SUMMER TRANING REPORT

ON

“TARGETING AND POSITIONING STRATEGY OF FINANCIAL

SERVICES”

A dissertation submitted to RELIANCE CAPITAL

In partial fulfillment of the requirement of summer training for the award of degree of

BACHELOR OF BUSINESS ADMINISTRATION (HONS.)

Submitted by:

HIMANSHU RAO

Regd. No.7020070051

Supervisor:

MISS.POOJA KANSRA

LOVELY PROFESSIONAL UNIVERSITY

PHAGWARA

TO WHOM SO EVER IT MAY CONCERN

This is to certify that the project entitled, “TARGETING AND POSITIONING STRATEGY OF

FINANCIAL SERVICES” project done for “RELIANCE CAPITAL MARKET”, submitted by

Mr HIMANSHU RAO for the partial fulfillment of the requirements for the award of degree of

BBA(HONS)All the work is done by him under my guidance and that this has not been

submitted by him for any other Degree.

MISS POOJA KANSRA

LECTURER IN L.H.S.B

Acknowledgement

Before I get into the details of my project, I would like to show my sincere gratitude by adding

few heart full words for the people who were part of this project report in numerous ways.

People who gave unending support right from the stage the project were conceived.

I would also like to express my heartfelt thanks to Miss POOJA for providing me the opportunity

to do my project at international business i.e on foreign trade. I would like to thank for the

cooperation and intellectual counsel he gave me throughout the work on this project. I would

also like to thanks ideal teacher and a true guide, for his rendered invaluable help and guidance

to me during my project. He remained a continuous source of information and motivation for me.

Last but not the least; I owe my overwhelming gratitude to all the people who have directly or

indirectly have contributed to the completion of the project.

Sincerely;

Himanshu Rao

PREFACE

This project title is “TARGETING AND POSITIONING STRATEGY OF FINANCIAL

SERVICES” is done in RELIANCE MUTUAL FUND (Reliance Capital market), . In this

project, apart from introduction, the concept of mutual fund, its history, a comprehensive study

has been done to understand the overall impact of portfolios of mutual fund scheme.

The focus of the project is to find out whether mutual fund investors are interested to invest in

the present scenario or not. Another important area is to find out which products of mutual funds

are they interested in investing.

INDEX

S.NO CONTENTS

1 ABSTRACT

2 SCOPE OF THE STUDY

3 INTRODUCTION: TARGETING & POSITIONING STRATEGY

OF R-MONEY

4 COMPANY PROFILE, SCOPE OF STUDY,

MUTUAL FUND, LIFE INSURANCE

5 RESEARCH AND METHEDOLOGY

6 REVIEW OF LITERATURE

7 DATA ANALYSIS

8 RESEARCH FINDINGS

9 SUGGESTIONS AND RECOMMENDATIONS

10 QUESTIONNAIRE

11 BIBLIOGRAPHY, JOURNALS AND OTHER REFERENCES

Abstract

This project has been a great learning experience for me; at the same time it gave me

enough scope to implement my analytical ability. This project as a whole can be divided into

two parts:

The first part gives an insight about the mutual funds and its various aspects. It is purely

based on whatever I learned at Reliance Money. One can have a brief knowledge about

Mutual funds and all its basics through the project. Other than that the real servings come

when one moves ahead. Some of the most interesting questions regarding mutual funds

have been covered. Apart from Mutual Funds a light has also been through on Life

Insurance Policies.

All the topics have been covered in a very systematic way. The language has been kept

simple so that even a layman could understand. All the datas have been well analyzed

with the help of charts and graphs.

The second part consists of data and their analysis, collected through a survey done on 200

people. It covers the topic” Awareness and Impact level among people about Mutual Funds and

Life Insurance Policies” The data collected has been well organized and presented. Hope the

research findings and conclusions will be of use.

It has also covered why people don’t want to go in invest? The advisors can take further

steps to approach more and more people and indulge them for taking their advices.

SCOPE OF THE STUDY

The scope of the study refers to the job that to know about the activities of the organization.

The study means that the analysis of the products of the company on which he/she has to

focus. During the MSP days the volunteer need to find out the corporate strategies of the

running company and the mile stone which the company has covered during its journey.

In the summer training, it is necessary for the student that he /she involve with the

experience guys to get the knowledge about the company. That is how the company has

got the success, Or if it is going in the loss, why. During this MSP period I have found that

the reliance group is the biggest group in Indian companies. I felt that I can learn the more in

the Reliance Money and Reliance Mutual Fund.

Reliance Money and Reliance Mutual fund is the part of the Reliance Capital Limited which is a

growing company in the financial products.

Reliance Anil Dhirubhai Ambani group is also deals in communication, energy, natural

resources, media, and entertainment, healthcare and infrastructure.

INTRODUCTION

TARGETING DONE BY RELIANCE MONEY

Reliance Money is Targeting on :- Small Cities (tier 2, tier 3 cities) though it already has a

great recognition tier-1 cities and metros. It is the only wing of Reliance Capital which

targets on NRIs, Foreign collaborations and have branches in foreign countries like Singapore,

Malaysia and US.

The company is also focusing to leverage as it is also franchises to target various differential

markets and its customers.The company is expanding its branch network and also, more

importantly, its franchisee network. Reliance Money has over 10,000 outlets now, of which

500-600 are owned by the company. Moreover the company is very much focused on doing

business at Retail level as the collaboration of R-Money with STIC travel group is a live

example of it. Last but not the least the company is offering financial products and

services which are very required by the common people so its target population is

differential SEC (SPECIAL ECONOMIC CLASSES) on the basis of various

Demographics, Income groups, Occupation, etc.

POSITIONING DONE BY RELIANCE MONEY

Positioning is the next step after Targeting. Here for this purpose Reliance Money has done

various activities (like as some of which are done in their promotional activities) some

of which are; It is the brand name of the company RELI NCE which is India’s biggest company.

Here when it comes the time of choosing financial products/services and moreover when

a person compares with other companies definitely his one of the preferences/choice is

Reliance Products/Services. The company has positioned itself as the Retail Outlet or a

Financial Supermarket where all the needs of a person in terms of taking a financial

Product/Service is fulfilled as it offers the differential financial products/services of

various companies. Ex. Mutual Fund and Insurance Policies of ICICI, FRANKLIN

TEMPLETON, SBI, HDFC, KARVY, TATA AIG, etc. It regularly conducts Seminars,

Events (even participates in events) to provide knowledge of its offered products/services

and to have a direct face to face contact with the people. This really helps the company

to improve its services given to the customer and moreover to improve and modify the

products/services to fulfill the demand and wants of the customers and to offer a totally

customized products/services.

It also pays attention of promotion i.e. it does unique promotion and advertisement which

draws the attention of the public anyhow and there it shows that “Yes we are something

Different “and this is also perceived and positioned in the minds of the consumer

AN EXAMPLE:

A bundle of hundred rupee notes, a huge chain with a sizeable padlock and a few

words were quite enough for the ADAG led Reliance Mutual Funds to unlock its ideas

before its target group. A large safe kept at suburban railways stations in Mumbai

grabbed just the right eyeballs and pamphlets educating the consumer added to the impact of

the campaign.

The outdoor campaign that was launched in Mumbai adopted a disruptive method to

communicate its message to investors. Hoardings sporting bundles of hundred rupee notes

that were chained and locked were set up at important locations such as Mahim, Bandra

Kurla Complex and Worli. The tagline read ‘Unlock your money’s potential’ It was a clear call

to investors who store their money in fixed deposit schemes and other less productive

options.An extensive and expansive outdoor campaign was conducted by Reliance with this

latest strategy. The campaign included ground level activities at crowded public places and

micro marketing. The creative idea is a collaborative brain child of Reliance and 141 Sercon.

Vikrant Gugnani, president, Reliance Mutual Funds, says, “We wanted to create awareness

among the investing populace ” By way of brief, Reliance told the agency that it wanted a

disruptive way of targeting investors. The disruption is in the form of standing out starkly and

being noticed as a better option to just banking.

Gugnani continues, “The objective was to bring to people’s attention that instead of money lying

idle in the bank, one could invest it wisely in mutual funds ”

The on-ground campaign had a large safe deposit box, which ran the same positioning line

as the hoarding. The safe deposit box was strategically placed at crowded places such as

railway stations, bus stops and car parks. Road shows and a moving billboard were also part of

the campaign. Pamphlets were distributed at the venues to educate prospective investors about

Reliance’s various systematic investment plans.

COMPANY PROFILE

About Reliance Money In Brief

Reliance money is a part of the reliance Anil Dhirubhai Ambani Group and is promoted

by Mutual Fund Reliance capital, the fastest growing private sector financial services

company in India, ranked amongst the top 3 private sector financial companies in terms of net

worth.

Reliance money is a comprehensive financial solution provider that enables you to carry

out trading and investment activities in a secure, cost-effective and convenient manner.

Through reliance money, you can invest in a wi de range of asset classes from Equity, Equity

and commodity Derivatives Mutual Funds insurance products IPO’s to availing services of

Money Transfer & Money changing.

Reliance Money offers the convenience of on-line and offline transactions through a

variety of means including its Portal Call & Transact Transaction Kiosks and at it’s network of

affiliates Success sutras of Reliance Money:

The success story of the company is driven by 9 success sutras adopted by it namely Trust,

Integrity, Dedication, Commitment, Enterprise, Hard work,

Home work, Team work play, Learning and Innovation, Empathy

and Humility and last but not the least it’s the Network. These are the values that bind success

with Reliance Money.

Vision of Reliance Money

To achieve & sustain market leadership, Reliance Money shall aim for complete

customer satisfaction, by combining its human and technological resources, to provide world

class quality services. In the process Reliance Money shall strive to meet and exceed customer's

satisfacti on and set industry standards.

Mission Statement:

Our mission is to be a leading and preferred service provider to our customers, and we aim

to achieve this leadership position by building an innovative, enterprising , and technology

driven organization which will set the highest standards of service and business ethics.”

Equity

Reliance Money offers its clients competitively priced Equity broking, PMS and Portfolio

Advisory Services. Trading execution assistance provided to clients. In addition Reliance

Money provides independent and unbiased view on markets along with trading strategies and

entry / exit points for taking an informed decision.

Mutual Funds

A mutual fund is a professionally managed fund of collective investments that collects money

from many investors and puts it in stocks, bonds, short-term money market instruments, and/or

other securities.

Reliance Money offers dedicated research & expert advice on Mutual Funds. Mutual

funds are considered to have low risk factors owing to diversification of assets into

various sectors and scripts or instruments within.

Insurance

Life-Insurance

Reliance Money assists its clients in choosing a customized plan which will secure the

family’s future and their expenses post-retirement. Clients can choose from different plans

of almost all Insurance Companies where they can invest their money. Clients can choose

from products and services that channelise their savings and protect their needs while

guaranteeing security and returns for life A team of experts will suggest the best Insurance

scheme which suits the client’s requirement.

General Insurance

General Insurance is all about protecting against all kind of insurable risks. Reliance Money

assists you in areas of Health insurance, Travel insurance, Home insurance and Motor insurance.

Commodities

A single platform to trade on both the major commodity exchanges i.e. NCDEX and

MCX. In addition In-house research desk shall provide research reports on all major

commodities which shall enable in getting views for trading and diversify client’s holdings

Trade Execution assistance is also provided to clients.

Structured Products,

Art Investments Structured Products is a new class of financial products for investors

apprehensive of increased volatility in stock markets. Specially designed products could

include Equity, Index-linked in nature, Real Estate Funds, Art Funds, Overseas Investments

and Infrastructure Investments.

Tax Planning

With a view to provide complete wealth management solutions Reliance Money’s wealth

management offerings include tax related services like: Tax Planning & advisory

Filing Tax returns for individuals

MUTUAL FUNDS – AN UNDERSTANDING

Like most developed and developing countries the mutual fund cult has been catching on in

India. There are various reasons for this. Mutual funds make it easy and less costly for investors

to satisfy their need for capital growth, income and/or income preservation.

And in addition to this a mutual fund brings the benefits of diversification and money

management to the individual investor, providing an opportunity for financial success that

was once available only to a select few.

Understanding Mutual funds is easy as it's such a simple concept: a mutual fund is a

company that pools the money of many investors -- its shareholders -- to invest in a

variety of different securities. Investments may be in stocks, bonds, money market

securities or some combination of these. Those securities are professionally managed on

behalf of the shareholders, and each investor holds a pro rata share of the portfolio --

entitled to any profits when the securities are sold, but subject to any losses in value as well.

For the individual investor, mutual funds provide the benefit of having someone else

manage your investments and diversify your money over many different securities that may not

be available or affordable to you otherwise. Today, minimum investment requirements on

many funds are low enough that even the smallest investor can get started in mutual funds.

A mutual fund, by its very nature, is diversified -- its assets are invested in many different

securities. Beyond that, there are many different types of mutual funds with different

objectives and levels of growth potential, furthering your chances to diversify.

The Concept of Mutual Fund

A mutual fund is a common pool of money into which investors place their contributions that

are to be invested in accordance with a stated objective The ownership of the fund is thus ‘joint’

and ‘mutual’ the fund belongs to all investors.

Mutual Funds Industry in India

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

raised 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.

First Phase - 1964-87

Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up by the

Reserve Bank of India and functioned under the Regulatory and administrative control of the

Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial Development

Bank of India (IDBI) took over the regulatory and administrative control in place of RBI. The

first scheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6,700

crores of assets under management.

Second Phase - 1987-1993 (Entry of Public Sec tor Funds)

Entry of non-UTI mutual funds. SBI Mutual Fund was the first followed by Can bank Mutual

Fund(Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov

89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC in 1989 and GIC in

1990. The end of 1993 marked Rs.47, 004 as assets under management.

Third Phase - 1993-2003 (Entry of Private Sector Funds)

With the entry of private sector funds in 1993, a new era started in the Indian mutual fund

industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year in

which the first Mutual Fund Regulations came into being, under which all mutual funds, except

UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged with

Franklin Templeton) was the first private sector mutual fund registered in July 1993. The 1993

SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised Mutual

Fund Regulations in 1996. The industry now functions under the SEBI (Mutual Fund)

Regulations 1996. The number of mutual fund houses went on increasing, with many foreign

mutual funds setting up funds in India and also the industry has witnessed several mergers and

acquisitions. As at the end of January 2003, there were 33 mutual funds with total assets of Rs.

1,21,805 crores. The Unit Trust of India with Rs.44, 541 crores of assets under management was

way ahead of other mutual funds.

Fourth Phase - since February 2003

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 administrator and

under the rules framed by Government of India and does not come under the purview of the

Mutual Fund Regulations.

The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is registered

with SEBI and functions under the Mutual Fund Regulations. With the bifurcation of the

erstwhile UTI which had in March 2000 more than Rs.76, 000 crores of AUM and with the

setting up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund Regulati ons, and with

recent mergers taking place among different private sector funds, the mutual fund industry has

entered its current phase of consolidation and growth. As at the end of September, 2004, there

were 29 funds, which manage assets of Rs.153108 crores under 421 schemes.

GROWTH IN ASSETS UNDER MANAGEMENT

Erstwhile

UTI was bifurcated into UTI Mutual Fund and the Specified Undertaking of the Unit

Trust of India effective from February 2003. The Assets under management of the

Specified Undertaking of the Unit Trust of India has therefore been excluded from the

total assets of the industry as a whole from February 2003 onwards.

Mutual Fund Companies in India

The concept of mutual funds in India dates back to the year 1963. The era between 1963 and

1987 marked the existence of only one mutual fund company in India with Rs. 67bn assets under

management (AUM), by the end of its monopoly era, the Unit Trust of India (UTI). By the end

of the 80s decade, few other mutual fund companies in India took their position in mutual fund

market. The new entries of mutual fund companies in India were SBI Mutual Fund, Canra bank

Mutual Fund, Punjab National Bank Mutual Fund, Indian Bank Mutual Fund, Bank of India

Mutual Fund. The succeeding decade showed a new horizon in Indian mutual fund industry. By

the end of 1993, the total AUM of the industry was Rs. 470.04 bn. The private sector funds

started penetrating the fund families. In the same year the first Mutual Fund Regulations came

into existence with re-registering all mutual funds except UTI. The regulations were further

given a revised shape in 1996.

Major Mutual Fund Companies in India

ABN AMRO Mutual Fund

ABN AMRO Mutual Fund was setup on April 15, 2004 with ABN AMRO Trustee (India) Pvt.

Ltd. As the Trustee Company. The AMC, ABN AMRO Asset Management (India) Ltd. was

incorporated on November 4, 2003. Deutsche Bank A G is the custodian of ABN AMRO Mutual

Fund.

Birla Sun Life Mutual Fund

Birla Sun Life Mutual Fund is the joint venture of Aditya Birla Group and Sun Life Financial.

Sun Life Financial is a global organization evolved in 1871 and is being represented in Canada,

the US, the Philippines, Japan, Indonesia and Bermuda apart from India. Birla Sun Life Mutual

Fund follows a conservative long-term approach to investment. Recently it crossed AUM of Rs.

10,000 crores.

Bank of Baroda Mutual Fund (BOB Mutual Fund)

Bank of Baroda Mutual Fund or BOB Mutual Fund was setup on October 30, 1992 under the

sponsorship of Bank of Baroda. BOB Asset Management Company Limited is the AMC of BOB

Mutual Fund and was incorporated on November 5, 1992. Deutsche Bank AG is the custodian.

HDFC Mutual Fund

HDFC Mutual Fund was setup on June 30, 2000 with two sponsorers namely Housing

Development Finance Corporation Limited and Standard Life Investments Limited.

HSBC Mutual Fund HSBC Mutual Fund was setup on May 27, 2002 with HSBC Securities and

Capital Markets (India) Private Limited as the sponsor. Board of Trustees, HSBC Mutual Fund

acts as the Trustee Company of HSBC Mutual Fund.

ING Vysya Mutual Fund

ING Vysya Mutual Fund was setup on February 11, 1999 with the same named Trustee

Company. It is a joint venture of Vysya and ING. The AMC, ING Investment Management

(India) Pvt. Ltd. Was incorporated on April 6, 1998.

Prudential ICICI Mutual Fund

The mutual fund of ICICI is a joint venture with Prudential Plc. of America, one of the largest

life insurance companies in the US of A. Prudential ICICI Mutual Fund was setup on 13th of

October,1993 with two sponsorers, Prudential Plc. and ICICI Ltd. The Trustee Company formed

is Prudential ICICI Trust Ltd. and the AMC is Prudential ICICI Asset Management Company

Limited Incorporated on 22nd of June, 1993.

Sahara Mutual Fund

Sahara Mutual Fund was set up on July 18, 1996 with Sahara India Financial Corporation Ltd.

As the sponsor. Sahara Asset Management Company Private Limited incorporated on August 31,

1995 works as the AMC of Sahara Mutual Fund. The paid-up capital of the AMC stands at Rs

25.8 crore.

State Bank of India Mutual Fund

State Bank of India Mutual Fund is the first Bank sponsored Mutual Fund to launch offshor fund,

the India Magnum Fund with a corpus of Rs. 225 cr. approximately. Today it is the largest Bank

sponsored Mutual Fund in India. They have already launched 35 Schemes out of which 15 have

already yielded handsome returns to investors. State Bank of India Mutual Fund has more than

Rs. 5,500 Crores as AUM. Now it has an investor base of over 8 Lakhs spread over 18 schemes.

Tata Mutual Fund

Tata Mutual Fund (TMF) is a Trust under the Indian Trust Act, 1882. The sponsorers for Tata

Mutual Fund are Tata Sons Ltd., and Tata Investment Corporation Ltd. The investment manager

is Tata Asset Management Limited and its Tata Trustee Company Pvt. Limited. Tata Asset

Management Limited's is one of the fastest in the country with more than Rs. 7,703 crores (as on

April 30, 2005) of AUM.

Kotak Mahindra Mutual Fund

Kotak Mahindra Asset Management Company (KMAMC) is a subsidiary of KMBL. It is

presently having more than 1, 99,818 investors in its various schemes. KMAMC started its

operations in December 1998. Kotak Mahindra Mutual Fund offers schemes catering to investors

with varying risk - return profiles. It was the first company to launch dedicated gilt scheme

investing only in government securities.

Unit Trust of India Mutual Fund

UTI Asset Management Company Private Limited, established in Jan 14, 2003, manages the UTI

Mutual Fund with the support of UTI Trustee Company Private Limited. UTI Asset

Management.

Standard Chartered Mutual Fund

Standard Chartered Mutual Fund was set up on March 13, 2000 sponsored by Standard

Chartered Bank. The Trustee is Standard Chartered Trustee Company Pvt. Ltd. Standard

Chartered Asset Management Company Pvt. Ltd. is the AMC which was incorporated with SEBI

on December 20,1999.

Franklin Templeton India Mutual Fund

The group, Franklin 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 Funds schemes to offer.

Morgan Stanley Mutual Fund India

Morgan Stanley is a worldwide financial services company and it’s leading in the market in

securities, investment management and credit services. Morgan Stanley Investment Management

(MISM) was established in the year 1975. It provides customized asset management services and

products to governments, corporations, pension funds and non-profit organizations. Its services

are also extended to high net worth individuals and retail investors. In India it is known as

Morgan Stanley Investment Management Private Limited (MSIM India) and its AMC is Morgan

Stanley Mutual Fund (MSMF). This is the first close end diversified equity scheme serving the

needs of Indian retail investors focusing on a long-term capital appreciation.

Escorts Mutual Fund

Escorts Mutual Fund was setup on April 15, 1996 with Escorts Finance Limited as its sponsor.

The Trustee Company is Escorts Investment Trust Limited. It’s AMC was incorporated on

December 1, 1995 with the name Escorts Asset Management Limited.

Alliance Capital Mutual Fund

Alliance Capital Mutual Fund was setup on December 30, 1994 with Alliance Capital

Management Corp. of Delaware (USA) as sponsored. The Trustee is ACAM Trust Company Pvt.

Ltd. and AMC, the Alliance Capital Asset Management India (Pvt) Ltd. with the corporate office

in Mumbai. Benchmark Mutual Fund

Benchmark Mutual Fund was setup on June 12, 2001 with Niche Financial Services Pvt. Ltd. as

the sponsored and Benchmark Trustee Company Pvt. Ltd. as the Trustee Company. Incorporated

on October 16, 2000 and headquartered in Mumbai, Benchmark Asset Management Company

Pvt. Ltd. is the AMC.

Canbank Mutual Fund

Canbank Mutual Fund was setup on December 19, 1987 with Canara Bank acting as the sponsor.

Canbank Investment Management Services Ltd. incorporated on March 2, 1993 is the AMC. The

Corporate Office of the AMC is in Mumbai.

Chola Mutual Fund

Chola Mutual Fund under the sponsorship of Cholamandalam Investment & Finance Company

Ltd. was setup on January 3, 1997. Cholamandalam Trustee Co. Ltd. is the Trustee Company and

AMC is Cholamandalam AMC Limited.

LIC Mutual Fund

Life Insurance Corporation of India set up LIC Mutual Fund on 19th June 1989. It contributed

Rs. 2 Crores towards the corpus of the Fund. LIC Mutual Fund was constituted as a Trust in

accordance with the provisions of the Indian Trust Act, 1882. . The Company started its business

on 29th April 1994. The Trustees of LIC Mutual Fund have appointed Jeevan Bima Sahayog

Asset Management Company Ltd as the Investment Managers for LIC Mutual Fund.

GIC Mutual Fund

GIC Mutual Fund, sponsored by General Insurance Corporation of India (GIC), a Government of

India undertaking and the four Public Sector General Insurance Companies , viz. National

Insurance Co. Ltd (NIC), The New India Assurance Co. Ltd. (NIA), The Oriental

Insurance Co. Ltd (OIC) and United India Insurance Co. Ltd. (UII) and is constituted as a

Trust in accordance with the provisions of the Indian Trusts Act, 1882. Future of Mutual Funds

in India By December 2004, Indian mutual fund industry reached Rs 1, 50,537 crore. It is

estimated that by 2010 March-end, the total assets of all scheduled commercial banks should be

Rs 40, 90,000 crore. The annual composite rate of growth is expected 13.4% during the rest of

the decade. In the last 5

years we have seen annual growth rate of 9%. According to the current growth rate, by year

2010, mutual fund assets will be double.

Types of Reliance Mutual Funds

1. Reliance Growth Fund

2. Reliance Vision Fund

3. Reliance Banking Fund

4. Reliance Di versified Power Sector Fund

5. Reliance Pharma Fund

6. Reliance Media & Entertainment Fund

7. Reliance NRI Equity Fund

8. Reliance Equity opportunities Fund

9. Reliance Index Fund

10.Reliance Tax Saver (ELSS) Fund

11.Reliance Equity Fund

12.Reliance Long Term Equity Fund

13.Reliance Regular Saving Fund

There are two types of investment in Mutual Funds.

1) Lump Sum

2) Systematic Investment Plan(SIP)

Lump Sum : In Lump sum the investment is only one times that

is of Rs. 5,000. and if the investment is monthly then the investment will be 6,000/-.

Systematic Investment Plan(SIP): We have already mentioned about SIPs in brief in the

previous pages but now going into details, we will see how the power of compounding

could benefit us. In such case, every small amountsinvested regularly can grow substantially.

SIP gives a clear picture of how an early and regular investment can help the investor in

wealth creation. Due to its unlimited advantages SIP could be Redefined as “a methodology of

fund investing regularly to benefit regularly from the stock market volatility. In the later

sections we will see how returns generated from some of the SIPs have outperformed

their benchmark. But before moving on to that lets have a look at some of the top

performing SIPs and their return for 1 year:

Scheme Amount NAV NAV Date Total Amount

Reliance diversified power sector retail 1000 62.74 30/5/2008 14524.07

Reliance regular savings equity 1000 22.208 30/5/2008 13584.944

principal global opportunities fund 1000 18.86 30/5/2008 14247.728

DWS investment opportunities fund 1000 35.31 30/5/2008 13791.157

BOB growth fund 1000 42.14 30/5/2008 13769.152

In the above chart we can see how if we start investing Rs 1000 per month then what return we’ll

get for the total investment of Rs. 12000. There is reliance diversified power sector retail giving

the maximum returns of Rs. 2524.07 per year which comes to 21% roughly. Next we can see if

anybody would have undertaken the SIP in Principal would have got returns of app.

18%. We can see reliance regular savings equity, DWS investment opportunities and

BOB growth fund giving returns of 13.20%, 14.92%, and 14.74% respectively which is

greater than any other monthly

investment options. Thus we can easily make out how SIP is beneficial for us. Its hassle free, it

forces the investors to save and get them into the habit of saving. Also paying a small amount of

Rs. 1000 is easy and convenient for them, thus putting no pressure on their pockets. Now we

will analyze some of the equity fund SIP s of Birla Sunlife with BSE 200 and bank fixed

deposits In a tabular format as well as graphical.

Advantages of Mutual Funds

Diversification : The best mutual funds design their portfolios so individual investments will

react differently to the same economic conditions. For example, economic conditions like a

rise in interest rates may cause certain securities in a diversified portfolio to decrease in

value. Other securities in the portfolio will respond to the same economic conditions by

increasing in value. When a portfolio is balanced in this way, the value of the overall portfolio

should gradually increase over time, even if some securities lose value.

Professional Management : Most mutual funds pay topflight professionals to manage their

investments. These managers decide what securities the fund will buy and sell.

Regulatory oversight : Mutual funds are subject to many government regulations that

protect investors from fraud.

Liquidity : It's easy to get your money out of a mutual fund. Write a check, make a call, and

you've got the cash.

Basics of Life Insurance

What is Life Insurance?

An amount of money paid to someone (called beneficiary) when the Life Assured (in whose

name the insurance policy is taken) dies. This amount can be used to pay the expenses

related to Life assureds death or can be invested to generate income that will replace your

salary. Life Insurance is an important tool in any investors portfolio & can be used for - wealth

creation, asset building, provide for contingencies and retirement planning. The main reason to

buy Life Insurance is to provide income replacement for your loved ones Types of Life

Insurance Policies Most Insurance policies are a combination of Savings & Protection.

Products are formulated by either increasing or decreasing either one of these

components.

These combinations can be broadly divided into 4 groups

- ULIPs

-Term Insurance

-Endowment Policies : Whole Life ; Unit Linked etc

RESEARCH METHEDOLOGY

Objective of research

The main objective of this project is concerned with getting the opinion of people

regarding Mutual Funds and Life Insurance , to target them and create awareness while with the

generation of leads.

I have tried to explore the general opinion about Mutual Funds and Life Insurance.

It also covers why/ why not investors are availing the services of financial advisors.

Along with it a brief introduction to India’s larges t financial intermediary,

RELIANCE MONEY has been given and it is shown that what are mutual funds and

life insurance and how they work

Data sources: Research is totally based on primary data. Secondary data can be used

only for the reference. Research has been done by primary data collection, and primary data has

been collected by interacting with various people. The secondary data has been collected

through various journals and websites and some special publications of R-MONEY.

Sampling procedure: The sample is selected in a random way, irrespective of them

being investor or not or availing the services or not. It was collected through mails and

personal visits to the known persons, by formal and informal talks and through filling up

the questionnaire prepared. The data has been analyzed by using the measures of central

tendencies like Mean, median, mode. The group has been selected and the analysis has been

done on the basis statistical tools available.

Sample size: The sample size of my project is limited to 200 only. Out of which only

135 people attempted all the questions. Other 65 not investing in MFs and don’t have a Life

Insurance policy attempted only 2 questions.

Sample design: Data has been presented with the help of bar graph, pie charts, line graphs etc.

Hypothesis:

H0: Targeting and Positioning Strategy based on investment in Mutual Fund and

Life Insurances is significant.

REVIEW OF LITERATURE

Journal of Research into New Media

Convergence: The International Technologies

This very journal is basically an interview which is done by Patrick Crogan to Samuel Weber.

The title is Targeting, Television and Networking: An Interview with Samuel Weber.

Here a light is thrown on various aspects by the interviewee on the targeting, media and

networking.

According to him;

The ‘target’ is someone who doesn’t fit the usual criteria So one don’t have the same kind of

search procedures as in the normal hiring process. The target of opportunity can be a

function of affirmative action policy or be somebody whose qualifications are unusual enough

that one would not find them with a regular search process following criteria peculiar to an

individual discipline.

On the one hand the association of targeting with the aim of controlling the future, controlling

the environment by identifying a target, localizing it and hitting it or reaching it, depending on

what area a person is in, and on the other hand the notion of opportunity, which

suggests the unpredictable emergence of an event that can’t be entirely planned The coupling of

the two terms suggests that targeting, rather than just designating an abstract activity in which,

unencumbered by constraints of time and space, he identify something that he/she wants to

accomplish or goals to be reach and then everything is done to achieve that, involves responding

in a very determinate

situation spatially and temporally to an unpredicted, unforeseen event, trying to get that event in

some sense under control.

The word ‘opportunity’ itself is interesting because it already condenses this idea of the

unpredictable, singular event being turned into an occasion to do something else. An

opportunity means precisely to be able to do something with the event. Quite literally, the

word suggests a portal, op-port-unity; a gateway through which one can pass into another

domain. The latter can be construed as a realm of goals, and then the opportunity is

instrumentalized, like the target. But it can also suggest an area that may not be definable strictly

or primarily in terms of goals, aims or ends. In the latter case you can’t be absolutely sure that

you are going to be able to reach your target or even that there is one. So you have this

tension between the two terms, target and opportunity.

In the financial domain as well, where the maximization of profit in the short term takes

precedence over all other considerations and has come to undermine the very foundations of

the capitalist economy that produced it in the first place.

DATA ANALYSIS

1.Null Hypothesis : The opinion of customers for all positioning factors is Similar.

Alternative Hypothesis: The opinion of customers for all positioning Factors is not similar.

Statistical Test: One way ANOVA

Alpha level: .05

Confidence value: 2.71

Test value: 4.37

Result: The test results show that, the opinion of customers for all positioning factors is similar and can be considered to be true representative of the population.

2. Have you ever invested/

interested to invest in mutual funds or have taken a life insurance policy?

YES 13

NO 65

3. What is the most important reason for not investing in mutual funds or taking a life insurance policy? (Only for above 65 participants)

a) Lack of knowledge about mutual funds/do not like 25 insurance policy?

b) Enjoys investing in other options 10c) Its benefits are not enough to drive you for 18

investmentd) No trust over the fund managers and the company 12

4. Where do you find yourself as a mutual fund investor or an insurance policy owner?

a) Totally ignorant 28

b) Partial knowledge of MFs 37

c) Aware of only scheme in which invested 46

d) Good knowledge of MFs 24

5. Where from you purchases mutual funds and take insurance policies?

a) Directly from the AMCs and Insurance companies 33 b) Brokers only ( large intermediaries) 28

c) Broker/ sub-

brokers 59 d) Other sources 15

6. Which feature of the mutual funds allure you most?

a) Diversification 42b) Professional management 29c) Reduction in risk and transaction cost 34

d) Helps in achieving long term goal 30

7. According to you which are the most suitable stage to invest in mutual funds or take an

Insurance policy?

a) Young unmarried stage 55b) Young Married with children stage 32c) Married with older children stage 21

d) Pre retirement

stage 27

Research Findings and Conclusions

As the test result shows that there is significant difference among the opinion of the customers

regarding the positioning factors, the following conclusions will elaborate the positioning

factors which are given more preference by consumers. At the survey conducted upon 200

people, 135 (67.5%) are already mutual fund investors/an insurance policy owner or are

interested to invest in future or take an insurance policy and the remaining 65 are not

interested in doing either of it. So there is enough scope for the company to target

those 65 participants (32.5%) to convert them into investors through their convincing

power and great communication skills. Now, when those 65 people were asked about the

reason of not investing in mutual funds or taking an Insurance policy, then most of the

people held their ignorance responsible for that. They lacked knowledge and information about

the mutual funds and were confused due to various Insurance policies available in the

market. Whereas just 10 people enjoyed investing in other option. For 18 people, the benefits

arousing from these investments were not enough to drive them for investment in MFs

and Insurance and 12 people expressed no trust over the fund managers’ decision and the

company. Again the financial advisors of the company can tap upon these people by educating

them about mutual funds and create trust regarding the investment in an Insurance policy.

Out of the 135 persons who already have invested in mutual funds/or taken an Insurance

policy are interested to invest, only 18% have sound knowledge of MFs and various Insuranc e

policies, 34% people are aware of only the schemes in which they have invested. 27% possess

partial knowledge whereas 21% stands nowhere in knowledge about MFs and as far as the

Insurance polices are concerned they are still confused. 33 participants buy forms directly

from the AMCs, 28 from brokers only, 55 from brokers and sub-brokers even then 15

people buy from other sources. When asked about the most alluring feature of MFs,

most of them opted for diversification, followed by reduction in risk, helps in achieving

long term goals and helps in achieving long term goals respectively. Most of the investor

preferred to invest at a young unmarried stage. Even 32 persons were ready to invest at a stage of

young married with children but person with older children avoid investing due to increased

expenses. But again the number rose to 27 at pre-retirement stage.

Recommendations & Suggestions

The most vital problem spotted is of ignorance. Investors should be made aware of the

benefits. Nobody will invest until and unless he is fully convinced. Investors should be made

to realize that ignorance is no longer bliss and what they are losing by not investing. Mutual

funds and Insurance policies offer a lot of benefit which no other single option could offer.

But most of the people are not even aware of what actually a mutual fund is and

moreover they are still unaware of the combination of Mutual Fund + Insurance Policy, i.e.

SIP+INSURE PLAN. They only see it as just another investment option. So the advisors should

try to change their mindsets. The advisors should target for more and more young investors.

Young investors as well as persons at the height of their career would like to go for advisors due

to lack of expertise and time.

The advisors may try to highlight some of the value added benefits of MFs such as tax

benefit, rupee cost averaging, and systematic transfer plan, rebalancing etc. these benefits

are not offered by other options single handedly. So these are enough to drive the investors

towards mutual funds. Investors could also try to increase the spectrum of services offered. Now

the most important reason for not availing the services of advisors was spotted was being

expensive. The advisors should try to charge a nominal fee at the beginning. But if not possible

then they could go for offering more services and benefits at the existing rate. They should also

maintain their decency and follow the c ode of ethics so that the investors could trust upon

them. Thus the advisors should try to attract more and more persons and turn them into

investors and finally their clients.

QuestionnaireName :Age :Income per annum :Gender :Occupation :Contact No :

1) Have you invested /are you interested to invest in mutual funds or to take an Insurance policy?Yes [ ] No [ ] (plz. attempt the next question)

2) What is the most important reason for not investing in mutual funds and in Insurance policies?

a) Lack of knowledge about mutual funds/insurance [ ]b) Enjoys investing in other options [ ]c) Its benefits are not enough to drive you for investment [ ]d) No trust over the fund managers [ ]

3) Where do you find yourself as a mutual fund investor/an insurance policy owner?

a) Totally ignorant [ ]b) Partial knowledge of mutual funds [ ]c) Aware only of any specific scheme in which you invested [ ]d) Fully aware [ ]

4) Where from you purchase mutual funds/insurance policy?

a) Directly from the AMCs [ ]b) Brokers only [ ]c) Brokers/ sub-brokers [ ]d) Other sources [ ]

5) Which feature of the mutual funds allure you most?

a) Diversification [ ]b) Professional management [ ]c) Reduction in risk and transaction cost [ ]d) Helps in achieving long term goals [ ]

6) According to you which are the most suitable stage to invest in mutual funds/take an Insurance policy?

a) Young unmarried stage [ ]b) Young Married with children stage [ ]c) Married with older children stage [ ]d) Pre-retirement stage [ ]

7) If Any Suggestion

………………………………………………………………………………………………………………………………………………………………………………………………………………………………………Journals & Other References

The Economic Times, Jan 2007 issue

R-Money factsheet and journals, year 2006, vol.3, page- 33-45

Business Standard, June 2006 issue

The Telegraph, 5th, Feb 2007

Business India, September,2004 issue

Fact sheet and statements of various fund houses.2008

Money Today, March, 2007, page 22-31

Investment India, June 2005, Page 56-59

BIBLIOGRAPHY

www.reliancemoney.comwww.mutualfundsindia.comwww.valueresearchonline.comwww.moneycontrol.comwww.morningstar.comwww.yahoofinance.comwww.theeconomictimes.comwww.rediffmoney.comwww.bseindia.com