Research Project Report

On
TOPIC: - “Increasing the Value of Mutual Funds in India”

SUBMITTED IN PARTIAL FULFILLMENT

OF MBA PROGRAM
(2019-2021)
(Major in Finance)

RESEARCH GUIDE SUBMITTED BY:

Name – Harshit Bisht

Graphic Era Hill University MBA (2019-21)
Dehradun E.No. : PV-D1905181
Student ID -1905181
 GRAPHIC ERA HILL UNIVERSITY, DEHRADUN BATCH

BATCH 2019-2021

GUIDE CERTIFICATE

This is to certify that the project work done on “Increasing the Value of
Mutual Funds in India” Submitted to school of Management, Graphic
Era Hill University, Dehradun by Harshit Bisht in partial fulfilment of
the requirement for the award of Masters of Business Administration
(MBA), is a bonafide work carried out by him under my supervision and
guidance. This work has not been submitted anywhere else for any
degree.
Place: DEHRADUN

Date: (Prof Dr C.S Yadav)

 DECLARATION

I hereby declare that the following project report titled

“Increasing the Value of Mutual Funds in India” is an
authentic work done by me. This is to declare that all the work
indulged in the completion of this work such as research, data
collection, analysis is a profound and honest work of mine.

Date- Harshit Bisht

Place: DEHRADUN MBA (2019-21)

 ACKNOWLEDGEMENT

It is great pleasure for me to acknowledge the kind of help and guidance

received to me during my project work. I was fortunate enough to get
support from a large number of people to whom I shall always remain
grateful.

I would like to express my sincere gratitude to Dr. C.S. Yadav for giving me
this opportunity to undergo this project for her great guidance and advice on this
project for her great guidance and advice on this project, without which I will not
be able to complete this project.

I am very thankful to her for giving me valuable suggestion and encouragement

to bring out a good project.
Harshit Bisht

Table of Contents
Sr. No. Title Page No.

1 2
Guide certificate

2 Declaration 3

3 Acknowledgment 4

4 Executive Summary 6

Chapter I
 Introduction to Bajaj Capital Limited
 Corporate Profile 7-13
5
 Our Identity
 Our Vision
 Our Services
Company Key Information
 Chapter II
 History of Mutual Funds
 Regulatory Framework
 Concept of Mutual Funds
 Findings
 Types of Mutual Fund schemes in India
 Advantages Of Mutual Fund
6  Mutual Fund Industry Trends 14-40
 Key industry trends and gaps include
i) AUM skewed towards debt funds,
ii) Institutional dominance,
iii )Top 10 players control 80% of AUM,
iv) Low penetration, and
v) Low awareness.
 Systematic Investment Planning (SIP)
 How to Invest in Mutual Funds?
 Research Methodology

7 Chapter III -Literature Review 41-42

8 Chapter IV-Research Methodology 43-44

9 Chapter V- Data Analysis and Findings 45-52

10 Chapter VI -Conclusions 53

11 Chapter VII –Recommendations and Suggestions 54

12 Chapter VIII-Bibliography 55

13 Chapter IX- Questionnaire 56

 1. Executive Summary

A mutual fund is a scheme in which several people invest their money for a
common financial goal. The collected money invests in the capital market, debt
and the money market, which they earned, is divided based on the number of
units which they hold.

The topic of this project is “Increasing the value of mutual funds in India”.
The mutual fund industry in India has seen dramatic improvements in quantity
as well as quality of product and service offerings in recent years. Along with
this project also touches on the aspect of Systematic Investment Plan and Steps
of how to invest in Mutual Fund.

An effort has been made to work on the concepts that have been taught in class
along with other useful parameters so that better study can be done.
 CHAPTER - I

Introduction to Bajaj Capital Limited

 The Bajaj Group came into existence during the turmoil and the heady euphoria of India's
freedom struggle. Jamnalal Bajaj, founder of the Bajaj Group, was a confidante and disciple
of Mahatma Gandhi, and was deeply involved in the effort for freedom. The integrity,
dedication, resourcefulness and determination to succeed which are characteristic of the
Company today, are often traced back to its birth during those long days of relentless
devotion to a common cause.

 Today, Rahul Bajaj is the Head of the Group. He has been the Chief Executive Officer of
Bajaj since 1968 and is recognized as one of the most outstanding business leaders in India.
As dynamic and ambitious as his illustrious predecessors, he has been recognized for his
achievements at various national and international forays.

 Bajaj is currently India’s largest two and three- wheeler manufacturer and one of the
biggest in the world. They have long left behind their annual turnover of Rs.70 million
(1968), to currently register an impressive figure of Rs. 40 billion. Welcome to India's
leading Financial Planning and Investment Advisory Company. Where dreams inspire us to
excel. They ignite hope and kindle in us the passion to stretch our limits. At Bajaj Capital
we believe that nothing can or should stop us from dreaming. And financial constraints
should be the last thing to stop anyone from realizing them.

 For over four decades now, Bajaj Capital has been helping people to realize their
aspirations by making their wealth grow, and planning their financial lives. Bajaj Capital
offers advice on Investments, Insurance, Tax Saving, Retirement Planning, Future Planning
for Children and more. As India's largest distributors of financial products, Bajaj Capital
brings for you a wide range of investment options - the entire gamut of financial
instruments and investment products of almost all major public and private companies and
the Govt. sector. These services and products are delivered through Bajaj Capital's network
of over 200 branches located all over the country. The company is a SEBI-approved
Category I Merchant Banker catering to Individual Investors, Corporates, HNI and NRI
clients. The commitment of the company to create wealth for its clients with independent,
need-based and research based advice has been recognized by 8, 00,000 individual
investors and over 3000 institutional clients.
Our logo depicts Lord Ganesha who is the source of all our
values and ethics in business.

· The large ears of Lord Ganesha remind us to hear more. We listen carefully to our clients to
understand their needs.

· The weight of the trunk on the mouth symbolises silence. We work silently, without blowing our
own trumpet.

· The long trunk symbolises continuous exploration. We explore all avenues to provide the best
investment opportunities for our clients.

· The heavy posture of Ganesha symbolises stability. We help our clients to attain financial
stability through wise investments.

· Lord Ganesha is known as the remover of obstacles and bestower of prosperity. We emulate His
example and try our best to help our clients attain prosperity by proper financial planning.

· Our logo has a yellow background. Yellow is the colour of gold, which symbolises wealth.
According to Vedic lore, it is also the colour associated with Brihaspati, the guru and counsellor of
the Gods. We offer our clients sage counsel to make their wealth grow.

· The letters are in red. Red is the colour rajas – symbolising power and incessant activity. It
symbolises our aggressive quest for your well-being and happiness.

· The white streak represents the trunk of Lord Ganesha. White is the colour of Satva guna, and
implies our selfless commitment to your life-long happiness.

Mission & Vision

Mission Statement

Bajaj Capital aims to be the most useful, reliable and efficient provider of Financial Services. It is
our continuous endeavour to be a trustworthy advisor to our clients, helping them achieve their
financial goals.
Our Aims

· To serve our clients with utmost dedication and integrity so that we exceed their expectations
and build enduring relationships.

· To offer unparalleled quality of service through complete knowledge of products, constant

innovation in services and use of the latest technology.

· To always give honest and unbiased financial advice and earn our client’s everlasting trust.

· To serve the community by educating individuals on the merits of Financial Planning and in turn
help shape a financially strong society.

· To create value for all stake holders by ensuring profitable growth.

· To build an amicable environment that accords respect to every individual and

permits their personal growth.

· To utilize the power of teamwork to function as a family and build a seamless

organization.

Our Vision

· To be the most preferred financial planning and investment advisory company in

India by providing consumers with informed choices of lasting value, create wealth for them to
make their tomorrow better than today.

Product range of the company.

Financial Planning

 360°Financial Planning

 Investment Planning

 Insurance Planning

 Retirement Planning

 Tax Planning

 Children's Future Planning

 Cash Flow Planning

 Portfolio Tracker

 Financial Planning Tools

Mutual Funds

 Top Funds

 Latest NAV

 Historical NAV

 2o Current NFOs

 Compare Funds

 Dividends Declared

 Fund Barometer

Insurance
 Life Insurance Products

 Term Insurance Premium

 General Insurance Products

  General Insurance Brochures

 Health Insurance Premium

 Insurance Policy Reminder

 ULIP Multimeter

Calculators
 Crorepati Calculator

 Child Education Planner

 Child Marriage Planner

 Pension / Retirement Planner

 Future Value Calculator

 Maturity Yield Calculator

Achievements
Bajaj Finance Ltd is one of the few NBFCs in the country to be awarded a rating of FAAA/Stable
for fixed deposits, indicating a very strong degree of safety with regard to timely payment of
interest and principal on the instrument by the Credit Rating and Information Services India
Limited (CRISIL). In addition to this, we are also rated high in the following programs: P1+ rating
from CRISIL for Short-Term Debt Programme AA+/Stable from CRISIL and LAA+ from ICRA
for Long-Term Debt Programme We have a network of over 2,500 Bajaj Auto and consumer
durable dealerships and over 63 branch offices throughout the country to cater to all the
requirements of our customers. We have earned the trust and loyalty of over 50 lac satisfied
customers across the country.

Organization structure of the company

Organization chart
2.Company Key Information
Establish 1964

Incorporation date Feb-19-1965

Chairman Mr. Rajiv Bajaj

CEO Mr. Rahul Parikh

MD Mr. Rajeev Bajaj

Corporate Office Nehru Place, New Delhi

Toll Free No. 1800 3000 6000

Official Site www.bajajcapital.com

 CHAPTER – II

History of Mutual Funds

The mutual fund industry in India started in 1963 with the formation of Unit Trust of India, at
the initiative of the Government of India and Reserve Bank of India. The history of mutual
funds in India can be broadly divided into four distinct phases.

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 Sector Funds)

1987 marked the entry of non- UTI, public sector mutual funds set up by public sector banks
and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India
(GIC). SBI Mutual Fund was the first non- UTI Mutual Fund established in June 1987
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 established its mutual fund in June 1989 while GIC had set up its mutual fund
in December 1990.
At the end of 1993, the mutual fund industry had assets under management of Rs.47, 004 Crores.
Third Phase – 1993-2003 (Entry of Private Sector Funds)
With the entry of private sector funds in 1993, a new era started in the Indian mutual fund
industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year with
Franklin Templeton) was the first private sector mutual fund registered in July 1993.

The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and
revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI (Mutual
Fund) Regulations 1996. The number of mutual fund houses went on increasing, with many
foreign mutual funds setting up funds in India and also the industry has witnessed several
mergers and acquisitions. As at the end of January 2003, there were 33 mutual funds with total
assets of Rs. 1, 21,805 Crores. The Unit Trust of India with Rs.44, 541 Crores of assets under
management was way ahead of other mutual funds.

Fourth Phase – since February 2003

In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated
into two separate entities. One is the Specified Undertaking of the Unit Trust of India with
assets under management of Rs.29, 835 crores as at the end of January 2003, representing
broadly, the assets of US 64 scheme, assured return and certain other schemes. The Specified
Undertaking of Unit Trust of India, functioning under an administrator and under the rules
framed by Government of India and does not come under the purview of the Mutual Fund
Regulations

The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is registered
with SEBI and functions under the Mutual Fund Regulations. With the bifurcation of the erstwhile
UTI which had in March 2000 more than Rs.76,000 Crores of assets under management and with
the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund.
.

The graph indicates the growth of assets over the years

 Regulatory Framework

Securities and Exchange Board of India (SEBI)

The Government of India constituted Securities and Exchange Board of India, by an Act of
Parliament in 1992, the apex regulator of all entities that either raise funds in the capital
markets or invest in capital market securities such as shares and debentures listed on stock
exchanges. Mutual funds have emerged as an important institutional investor in capital
market securities. Hence they come under the purview of SEBI. SEBI requires all mutual
funds to be registered with them. It issues guidelines for all mutual fund operations including
where they can invest, what investment limits and restrictions must be complied with, how
they should account for income and expenses, how they should make disclosures of
information to the investors and generally act in the interest of investor protection. To protect
the interest of the investors, SEBI formulates policies and regulates the mutual funds. MF
either promoted by public or by private sector entities including one promoted by foreign
entities are governed by these Regulations. SEBI approved Asset Management Company
(AMC) manages the funds by making investments in various types of securities. Custodian,
registered with SEBI, holds the securities of various schemes of the fund in its custody.
According to SEBI Regulations, two thirds of the directors of Trustee Company or board of
trustees must be independent.

Association of Mutual Funds in 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 member. 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 line 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

The Association of Mutual Funds of India works with 30 registered AMCs 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.

 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 SEBIs guidelines in the mutual
fund industry.
 Associations of Mutual Fund of 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

program of training and certification for all intermediaries and other engaged in the
mutual fund industry.

 AMFI undertakes all India awareness program for investors in order to promote
proper understanding of the concept and working of mutual funds.

 At last but not the least association of mutual fund of India also disseminate
information on Mutual Fund Industry and undertakes studies and research either
directly or in association with other bodies.
 Concept of Mutual Funds

Mutual fund is a mechanism for pooling the resources by issuing units to the investors and
investing funds in securities in accordance with objectives as disclosed in offer document.
Investments in securities are spread across a wide cross-section of industries and sectors and thus
the risk is reduced. Diversification reduces the risk because all stocks may not move in the same
direction in the same proportion at the same time. Mutual fund issues units to the investors in
accordance with quantum of money invested by them. Investors of mutual funds are known as unit
holders.
The profits or losses are shared by the investors in proportion to their investments. The mutual
funds normally come out with a number of schemes with different investment objectives which are
launched from time to time. A mutual fund is required to be registered with Securities and
Exchange Board of India (SEBI) which regulates securities markets before it can collect funds
from the public.
Mutual funds are institutions that collect money from several sources - individuals or institutions
by issuing 'units', invest them on their behalf with predetermined investment objectives and
manage the same all for a fee. They invest the money across a range of financial instruments
falling into two broad categories – equity and debt. Individual people and institutions no doubt, can
and do invest in equity and debt instruments by themselves but this requires time and skill on both
of which there are constraints. Mutual funds emerged as professional financial intermediaries
bridging the time and skill constraint. They have a team of skilled people who identify the right
stocks and debt instruments and construct a portfolio that promises to deliver the best possible
'constrained' returns at the minimum possible cost. In effect, it involves outsourcing the
management of money. More explicitly, the benefits of investing in equities and debt instruments
are supposedly much better if done through mutual funds. This is because of the following reasons:
Firstly, fund managers are more skilled. They are trained to identify the best investment options
and to assess the portfolio on a continual basis; secondly, they are able to invest in a diversified
portfolio consisting of 15-20 different stocks or bonds or a combination of them. For an individual
such diversification reduces the risk but can demand a lot of effort and cost. Each purchase or sale
invites a cost in terms of brokerage or transactional charges such as demat account fees in India.
The need to possibly sell 'poor' stocks/bonds and buy 'good' stocks/bonds demands constant
tracking of news and performance of each company they have invested in. Mutual funds are able to
maintain and track a diversified portfolio on a constant basis with lesser costs. This is because of
the pecuniary economies that they enjoy when it comes to trading and other transaction costs;
thirdly, funds also provide good liquidity. An investor can sell her/his mutual fund investments and
receive payment on the same day day with minimal transaction costs as compared to dealing with
With individual securities, this totals to superior portfolio returns with minimal cost and better liquid it.

This can be represented with the following flow chart

Source: Association of Mutual Funds in India (AMFI)

In India one can gain additional benefit by investing through mutual funds tax savings.
Investment in certain types of funds such as Equity Linked Tax Savings Schemes (ELSS)
allows for certain amount of income tax benefits.
 Organization Structure of a Mutual Fund

In India, the structure of Mutual Funds is a three-tier structure with a few other significant
components. It is not just the different banks or AMCs that create or float different mutual fund
schemes; instead, there are other players that are involved in the structure of mutual funds. The
primary watchdog in all these transactions is the Securities Exchange Board of India (‘SEBI’)
under whom each entity is required to be registered with. The inception of SEBI (Mutual Funds)
Regulations, 1996, revolutionized the structure of mutual funds and since then all the entities are
regulated under it. Currently, mutual funds comprise of five basic participants, namely a Sponsor,
Mutual Fund Trustee, Asset Management Company, Custodian & Registrar and a Transfer Agent.

The Hierarchy looks like this:

The important terms of the figure are explained as follows:

1) Sponsor

A sponsor is any person or entity that can set up a mutual fund scheme to generate income through
fund management. The sponsor can be said as the first layer of the three-tier structure of mutual
funds in India. The sponsor is required to approach SEBI and get a mutual fund scheme approved.
The sponsor cannot work alone. It needs to create a Public Trust under the Indian Trust Act 1882
and get the same registered with SEBI. Once the trust is created, the Trustee is registered with
SEBI and is appointed as the trustee of the fund in order to safeguard the interest of the unit holders
and to adhere the SEBI Mutual Fund regulations. The Sponsor subsequently creates an Asset
Management Company under the Companies Act, 1956 to deal with the fund management. There
are certain eligibility criteria to become a Sponsor, as prescribed under:

a. The Sponsor must have profit in 3 of the last 5 years including immediately preceding year.

b. The Sponsor must have a minimum of 5 years of experience in financial services.

c. The net worth of the Sponsor must be positive for all the preceding five years.

d. Out of the total net worth of the AMC, 40% must be participated by the Sponsor.

As seen above, the position of a Sponsor is crucial and they should have high credibility. Strict
norms show that the sponsor must have enough liquidity and faithfulness to return the money of an
innocent investor, in case of a financial meltdown.

2) Trust And Trustees

Trust and trustees make up the second layer of the structure of mutual funds. Trustees are also
known as the protectors of the fund and are employed by the fund sponsor. As the name suggests,
they have a very important role in maintaining the trust of the investors and to oversee the growth
of the fund. SEBI mandates the trustees to provide a report on the fund and the functioning of the
AMC on a half-yearly basis. Trustees can be created either in the form of Board of Trustees or a
Trust Company. The Trustees supervise the entire functioning of the AMC and regulate the
operations of the mutual fund schemes. The SEBI has tightened the rule of transparency so as to
avoid any conflict of interest between the Sponsor and the AMC. Without the permission and
approval of the Trust, an AMC cannot float a new mutual fund scheme. It is important for the
Trustees to act independently and take appropriate measures to safeguard the hard earned money of
the investors. The Trustees are also required to be registered under SEBI, and SEBI further
regulates their registration by either suspending or revoking the registration if found breaching any
conditions.

3) Asset Management Company

An AMC is the third working layer in the structure of mutual funds. An AMC floats various
schemes of mutual fund in the market, pursuant to the needs of the investors and the nature of the
market. They create mutual funds along with the trustee and the sponsor and then oversee its
development. While creating the scheme, they take help of bankers, brokers, RTAs auditors etc.
and enter into an agreement with them. An AMC is a company formed under Companies Act and
needs to be registered under SEBI. Similar to the Trustees, an AMC also needs to ensure that there
is no conflict of interest amongst them, the sponsor and the trustees.

Other Participants In The Structure Of Mutual Funds

4) Custodian
A Custodian is an entity, which is responsible for the safekeeping of the securities. Custodians are
registered with SEBI and are responsible for the transfer and delivery of units and securities.
Custodians also enable investors in updating their holdings at a particular point of time and help
them in keeping track of their investments. Along with the primary job of safekeeping, custodians
are also in charge of the collection of corporate benefits such as bonus issue, interest, dividends etc.
 5) Registrar And Transfer Agents
RTAs are an important link between fund managers and investors. They cater to the fund managers
by updating them with the investor details and to investors by delivering the benefits of the fund to
them. RTAs are SEBI registered entities that process the applications of mutual funds, help with
investor KYC, manage and deliver periodical statements of investments, update records of
investors and process investor requests. Link-in time, Karvy etc. are some of the famous RTAs in
India and they provide the requisite operational support to the AMC in mutual fund activities.

Other Participants
Some other participants in the structure of mutual funds are brokers, auditors, and bankers. The
brokers are responsible to attract investors and help to disseminate the fund. The brokers help
investors in sell, purchase of units and provide with their valuable advice. Brokers also study the
market trend and predict the future movement of the market. Unlike brokers, auditors are an
independent internal watchdog, who audit the financials of the AMC, Trustee, and Sponsor and
provide their report. Bankers are also an important participant, who acts as collecting agents on
behalf of the fund managers.

These are the participants who play a key role in the management of mutual funds. Each participant
has their individual role to play. However, their functions are interlinked with each other. Mutual
fund regulations are the bible by which all the participants are bound together, to perform their
functions more diligently and without prejudice to the interest of the investors.

Example of Three Tier Structure:

 Types of Mutual Fund schemes in India

A mutual fund, say, SBI Mutual Fund, can have several 'funds' [called 'schemes' in India)
under its management. These different funds can be categorized by structure, investment
objective and others. It would be well illustrated by the following flow chart:
 Source: Association of Mutual Funds in India (AMFI)

1- Open-ended Fund/ Scheme

An open-ended fund or scheme is one that is available for subscription and repurchase on a
continuous basis. These schemes do not have a fixed maturity period. Investors can
conveniently buy and sell units at Net Asset Value (NAV) related prices which are declared
on a daily basis. The key feature of open-end schemes is liquidity.

2. Close-ended Fund/ Scheme

A close-ended fund or scheme has a stipulated maturity period e.g. 5-7 years. The fund is
open for subscription only during a specified period at the time of launch of the scheme.
Investors can invest in the scheme at the time of the initial public issue and thereafter they
 can buy or sell the units of the scheme on the stock exchanges where the units are listed. In
order to provide an exit route to the investors, some close-ended funds give an option of
selling back the units to the mutual fund through periodic repurchase at NAV related prices.
SEBI Regulations stipulate that at least one of the two exit routes is provided to the investor
i.e. either repurchase facility or through listing on stock exchanges. These mutual funds
schemes disclose NAV generally on weekly basis.

Schemes according to Investment Objective :

A scheme can also be classified as growth scheme, income scheme, or balanced scheme
considering its investment objective. Such schemes may be open-ended or close-ended
schemes as described earlier. Such schemes may be classified mainly as follows:

1. Growth / Equity Oriented Scheme

The aim of growth funds is to provide capital appreciation over the medium to long- term. Such
schemes normally invest a major part of their corpus in equities. Such funds have comparatively
high risks. These schemes provide different options to the investors like dividend option, capital
appreciation, etc. and the investors may choose an option depending on their preferences. The
investors must indicate the option in the application form. The mutual funds also allow the
investors to change the options at a later date. Growth schemes are good for investors having a
long-term outlook seeking appreciation over a period of time.

2. Income / Debt Oriented Scheme

The aim of income funds is to provide regular and steady income to investors. Such schemes
generally invest in fixed income securities such as bonds, corporate debentures, Government
securities and money market instruments. Such funds are less risky compared to equity schemes.
These funds are not affected because of fluctuations in equity markets. However, opportunities of
capital appreciation are also limited in such funds. The NAVs of such funds are affected because of
change in interest rates in the country. If the interest rates fall, NAVs of such funds are likely to
increase in the short run and vice versa. However, long term investors may not bother about these
fluctuations.

3. Balanced Fund

The aim of balanced funds is to provide both growth and regular income as such schemes invest
both in equities and fixed income securities in the proportion indicated in their offer documents.
These are appropriate for investors looking for moderate growth. They generally invest 40-60% in
equity and debt instruments. These funds are also affected because of fluctuations in share prices in
the stock markets. However, NAVs of such funds are likely to be less volatile compared to pure
equity funds.
4. Money Market or Liquid Fund

These funds are also income funds and their aim is to provide easy liquidity , preservation of
capital and moderate income. These schemes invest exclusively in safer short-term instruments
such as treasury bills, certificates of deposit, commercial paper and inter-bank call money,
government securities, etc. Returns on these schemes fluctuate much less compared to other funds.
These funds are appropriate for corporate and individual investors as a means to park their surplus
funds for short periods.

5. Gilt Fund

These funds invest exclusively in government securities. Government securities have no default
risk. NAVs of these schemes also fluctuate due to change in interest rates and other economic
factors as is the case with income or debt oriented schemes.

6. Index Funds

Index Funds replicate the portfolio of a particular index such as the BSE Sensitive index, S&P NSE
50 index (Nifty), etc these schemes invest in the securities in the same weightage comprising of an
index. NAVs of such schemes would rise or fall in accordance with the rise or fall in the index,
though not exactly by the same percentage due to some factors known as "tracking error" in
technical terms. Necessary disclosures in this regard are made in the offer document of the mutual
fund scheme.

Advantages Of Mutual Fund

 Advanced Portfolio Management - When you buy a mutual fund, you pay a
management fee as part of your expense ratio, which is used to hire a professional
portfolio manager who buys and sells stocks, bonds, etc. This is a relatively small price
to pay for getting professional help in the management of an investment portfolio.
 Dividend Reinvestment - As dividends and other interest income sources are
declared for the fund, it can be used to purchase additional shares in the mutual fund,
therefore helping your investment grow.

 Diversification - It can help an investor diversify their portfolio with a minimum

investment. Spreading investments across a range of securities can help to reduce risk. A
stock mutual fund, for example, invests in many stocks. This minimizes the risk
attributed to a concentrated position. If a few securities in the mutual fund lose value or
become worthless, the loss may be offset by other securities that appreciate in value.
Further diversification can be achieved by investing in multiple funds which invest in
different sectors.
 Risk Reduction (Safety) - Reduced portfolio risk is achieved through the use of
diversification, as most mutual funds will invest in anywhere from 50 to 200 different
securities—depending on the focus. Numerous stock index mutual funds own 1,000 or
more individual stock positions.
 Convenience and Fair Pricing - Mutual funds are easy to buy and easy to
understand. They typically have low minimum investments (some around $2,500) and
they are traded only once per day at the closing net asset value (NAV).This eliminates
price fluctuation throughout the day and various arbitrage opportunities that day traders
practice.

 Professional Management - Mutual funds are managed and supervised by

investment professional. These managers decide what securities the fund will buy and
sell. This eliminates the investor of the difficult task of trying to time the market.

 Well regulated - Mutual funds are subject to many government regulations that
protect investors from fraud.

 Liquidity - It's easy to get money out of a mutual fund.

 Convenience - we can buy mutual fund shares by mail, phone, or over the Internet.

 Low cost - Mutual fund expenses are often no more than 1.5 percent of our
investment. Expenses for Index Funds are less than that, because index funds are not
actively managed. Instead, they automatically buy stock in companies that are listed on
a specific index

 Transparency - The mutual fund offer document provides all the information about
the fund and the scheme. This document is also called as the prospectus or the fund
offer document, and is very detailed and contains most of the relevant information that
an investor would need.

 Choice of schemes - there are different schemes which an investor can choose from
according to his investment goals and risk appetite.

 Tax benefits - An investor can get a tax benefit in schemes like ELSS (equity linked
saving scheme).
 Mutual Fund Industry Trends

The Indian mutual fund industry has come a long way since the formation of the Unit Trust of
India in 1963 by the Government of India and the Reserve Bank of India (RBI). Currently,
there are 44 mutual funds operating in the country with assets under management (AUM) of
Rs 7.13 lakh cr. compared to AUM of around Rs.1 lakh cr. as of December 2001. However,
the quantum of mutual fund assets in financial savings is very low - at less than 5%, as most
Indian savings are locked in bank fixed deposits, small savings (postal savings) and
insurance. With growing disposable incomes, rising inflation (cost of living), improving
lifestyles and growing aspirations, there is a noticeable shift in preference for mutual funds
though it has still a long way to go.

Break-up of financial savings

* Equity market includes mutual fund investments

Source: Reserve Bank of India

Key industry trends and gaps include
i) AUM skewed towards debt funds
ii) Institutional dominance
iii) Top 10 players control 80% of AUM
iv) Low penetration
v) Low awareness.
i) AUM skewed towards debt funds
An analysis of the assets reveals AUM has been traditionally skewed towards debt funds with
65% assets on an average deployed in debt. Within debt, the assets are deployed largely in
short term debt funds (mainly liquid and ultra-short term debt funds). Liquid and ultra-short
term debt funds consumed 80% of assets of all debt funds over these periods.

Mutual Fund AUM across asset classes

Source: Association of Mutual Funds in India (AMFI)

ii) Institutional dominance

Traditionally, the majority of the money market in mutual funds comes from institutional
investors which include corporates, banks and foreign institutional investors (FIIs). All
schemes, except equity oriented schemes, have seen a high participation from institutional
investors. Corporates dominate the institutional segment with close to 90% share of
institutional AUM as of September 2011. Retail participation is more in equity oriented
schemes and is slowing picking up in Gold Exchange Traded Funds (ETFs).

Owing to the institutional dominance, mutual funds inflows / outflows too have seen a trend
wherein quarter ends witness outflows owing to redemptions (on account of advance tax
payments by corporates) while the funds return to the industry in the subsequent month.
.

AUM break-up for institutional and retail investors

* Institutional includes corporate, Banks/FIs and FIIs

Source: AMFI (Data as of September 2017)

Mutual Fund Inflows/ Outflows Trends

Source: Association of Mutual Funds in India (AMFI)

iii) Top 10 players control 80% of AUM
Among the 44 players, 56% of the AUM is controlled by the top 5 players while 80% of the
AUM is controlled by 10 players. The bottom 10 players contribute less than 1% of the
AUM. This significant tilt towards larger players has seen consolidation among asset
management companies (AMCs) from time to time.

AUM distribution by AMCs

Source: Association of Mutual Funds in India (AMFI)

iv) Low penetration

The country-wide mutual fund penetration is abysmal with majority of the assets (over 75%)
being held in the top 5 cities (Mumbai, New Delhi, Bangalore, Chennai and Kolkata) -
Mumbai alone accounts for 49% of the assets. Further, the top 15 cities account for 87% of
the AUM. The low distributor support in smaller cities has resulted in mutual funds becoming
an investment product restricted to urban Indians as of now. Hence, it is of great importance
for mutual funds to target smaller towns and rural areas, to spread the reach of the asset class
as well as provide investors from smaller cities an important avenue for investment.
AUM by Geography

Source: AMFI (Data as of September 2017)

v) Low awareness
Low public awareness (especially in smaller towns) about the investment opportunity in
mutual funds is also an integral factor affecting their growth. It is thus very important to
make investors aware about the benefits of mutual funds, viz., professional management, low
costs, transparency, liquidity and a strong regulatory framework.
 Systematic Investment Planning (SIP)

Systematic Investment Plan (SIP) is a method of investing in mutual funds wherein an

investor chooses a mutual fund scheme and invests a the fixed amount of his choice at fixed
intervals. SIP investment plan is about investing a small amount over time rather than
investing one-time huge amount resulting in a higher return.

SIP is similar to a Recurring Deposit. Every month on a specified date an amount you choose
is invested in a mutual fund scheme of your choice. The dates currently available for SIPs are
the 5th, 10th, 15th, 20th and the 25th of a month. There are many benefits of investing
through SIP.

Types of Systematic Investment Plan (SIP)

 Top-up SIP

This SIP allows you to increase your investment amount periodically giving you the flexibility to
invest higher when you have a higher income or available amount to be invested. This also helps in
making the most out of the investments by investing in the best and high performing funds at
regular intervals.

 Flexible SIP

As the name suggests this SIP plan carries flexibility of amount you want to invest. An investor
can increase or decrease the amount to be invested as per his own cash flow needs or preferences.

 Perpetual SIP

This SIP Plan allows you to carry on the investments without an end to the mandate date.
Generally, an SIP carries an end date after 1 Year, 3Years or 5 years of investment. The investor
can hence, withdraw the amount invested whenever he wishes or as per his financial goals.

Advantages of SIP
•Encourages Regular and Disciplined Investments

•A Convenient way to invest regularly

•Long term perspective

•Rupee Cost Averaging Benefit to counter volatility

•Compounding Benefits
•SIMPLE & CONVENIENT

•A larger target segment due to lower initial investment

SIP – Easy Pay Facility

•Opt for the SIP EASY PAY Auto debit Facility

•Choose the Amount (minimum Rs 500/- p.m.)

•Choose one Day of the month (5th / 10th /15th / 20th / 25th/ 30th)

•Make First Investment by Cheque drawn in favor of the scheme. E.g. SBIMF - Magnum Tax
Gain Scheme.

And Relax…….. Every month the said amount will be debited from your bank account and units
will allocated to you.

Register for Statement of Account (SOA) by mail.

 How to invest in mutual funds?

Step One - Identify your investment needs.

Your financial goals will vary, based on your age, lifestyle, financial independence, family
commitments, level of income and expenses among many other factors. Therefore, the first
step is to assess your needs. Begin by asking yourself these questions:

1. What are my investment objectives and needs?

Probable Answers: I need regular income or need to buy a home or finance a wedding or
educate my children or a combination of all these needs.

2. How much risk am I willing to take?

Probable Answers: I can only take a minimum amount of risk or I am willing to accept the
fact that my investment value may fluctuate or that there may be a short term loss in order to
achieve a long term potential gain.

3. What are my cash flow requirements?

Probable Answers: I need a regular cash flow or I need a lump sum amount to meet a specific
need after a certain period or I don’t require a current cash flow but I want to build my assets
for the future.

By going through such an exercise, you will know what you want out of your investment and
can set the foundation for a sound Mutual Fund Investment strategy.

Step Two - Choose the right Mutual Fund.

Once you have a clear strategy in mind, you now have to choose which Mutual Fund and
scheme you want to invest in. The offer document of the scheme tells you its objectives and
provides supplementary details like the track record of other schemes managed by the same
Fund Manager. Some factors to evaluate before choosing a particular Mutual Fund are:

 The track record of performance over the last few years in relation to the appropriate
yardstick and similar funds in the same category.

 How well the Mutual Fund is organized to provide efficient, prompt and personalized
service.

 Degree of transparency as reflected in frequency and quality of their communications.

.

Step Three - Select the ideal mix of Schemes.

Investing in just one Mutual Fund scheme may not meet all your investment needs. You may
consider investing in a combination of schemes to achieve your specific goals.

The following charts could prove useful in selecting a combination of schemes that satisfy your
needs.
Step Four - Invest regularly
For most of us, the approach that works best is to invest a fixed amount at specific intervals,
say every month. By investing a fixed sum each month, you get fewer units when the price is
high and more units when the price is low, thus bringing down your average cost per unit.
This is called rupee cost averaging and is a disciplined investment strategy followed by
investors all over the world. With many open-ended schemes offering systematic investment
plans, this regular investing habit is made easy for you.
 Step Five - Keep your taxes in mind

As per the current tax laws, Dividend/Income Distribution made by mutual funds is exempt
from Income Tax in the hands of investor. However, in case of debt schemes
Dividend/Income Distribution is subject to Dividend Distribution Tax. Further, there are
other benefits available for investment in Mutual Funds under the provisions of the prevailing
tax laws. You may therefore consult your tax advisor or Chartered Accountant for specific
advice to achieve maximum tax efficiency by investing in mutual funds.

Step Six - Start early

It is desirable to start investing early and stick to a regular investment plan. If you start now,
you will make more than if you wait and invest later. The power of compounding lets you
earn income on income and your money multiplies at a compounded rate of return.

Step Seven - The final step

All you need to do now is to get in touch with a Mutual Fund or your advisor and start
investing. Reap the rewards in the years to come. Mutual Funds are suitable for every kind of
investor whether starting a career or retiring, conservative or risk taking, growth oriented or
income seeking.

FUTURE PROSPECT OF MUTUAL FUNDS IN INDIA

Financial experts believe that the future of Mutual Funds in India will be very bright. It has been
estimated that by March-end of 2010, the mutual fund industry of India will reach Rs 40,90,000 crore,
taking into account the total assets of the Indian commercial banks. In the coming 10 years the annual
composite growth rate is expected to go up by 13.4%.

• 100% growth in the last 6 years.

• Number of foreign AMC's are in the queue to enter the Indian markets like Fidelity Investments, US
based, with over US$1trillion assets under management worldwide.

• Our saving rate is over 23%, highest in the world. Only channelizing these savings in mutual funds
sector is required.

• We have approximately 29 mutual funds which is much less than US having more than 800. There is
a big scope for expansion.

• 'B' and 'C' class cities are growing rapidly. Today most of the mutual funds are concentrating on the
'A' class cities. Soon they will find scope in the growing cities.

• Mutual fund can penetrate rural like the Indian insurance industry with simple and limited products.

• SEBI allowing the MF's to launch commodity mutual funds.

• Emphasis on better corporate governance.

• Trying to curb the late trading practices.

• Introduction of Financial Planners who can provide need based advice. Looking at the past
developments and combining it with the current trends it can be concluded that the future of Mutual
Funds in India has lot of positive things to offer to its investors.
 CHAPTER - III

Literature Review
Dr. Yogesh Kumar Mehta (Feb 2012), has studied Emerging Scenario of Mutual Funds in India:
An Analytical Study of Tax Funds. The present study is based on selected equity funds of public
sector and private sector mutual fund. Corporate and Institutions who form only 1.16% of the total
number of investors accounts in the MFs industry, contribute a sizeable amount of Rs. 2,87,108.01
crore which is 56.55% of the total net assets in the MF industry. It is also found that MFs did not
prefer debt segment.

Dr Surender Kumar Gupta and Dr. Sandeep Bansal (Jul 2012), have done a Comparative
Study on Debt Scheme of Mutual Fund of Reliance and Birla Sunlife. This study provides an
overview of the performance of debt scheme of mutual fund of Reliance, and Birla Sunlife with the
help of Sharpe Index after calculating Net Asset Values and Standard Deviation. This study reveals
that returns on Debt Schemes are close to Benchmark return (Crisil Composite Debt Fund Index:
4.34%) and Risk Free Return: 6% (average adjusted for last five year).

Vanaja and Dr. R. Karrupasamy (2013), have done a Study on the Performance of select Private
Sector Balanced Category Mutual Fund Schemes in India. This study of performance evaluation
would help the investors to choose the best schemes available and will also help the AUM’s in
better portfolio construction and can rectify the problems of underperforming schemes. The
objective of the study is to evaluate the performance of select Private sector balanced schemes on
the basis of returns and comparison with their bench marks and also to appraise the performance of
different category of funds using risk adjusted measures as suggested by Sharpe, Treynor and
Jensen.

Prof. Kalpesh P Prajapati and Prof. Mahesh K Patel (Jul 2012), have done a Comparative
Study On Performance Evaluation of Mutual Fund Schemes Of Indian Companies. In this paper
the performance evaluation of Indian mutual funds is carried out through relative performance
index, risk-return analysis, Treynor's ratio, Sharp's ratio, Sharp's measure, Jensen's measure, and
Fama's measure. The data used is daily closing NAVs. The source of data is website of Association
of Mutual Funds in India (AMFI). The study period is 1st January 2007 to 31st December, 2011.
The results of performance measures suggest that most of the mutual fund have given positive
return during 2007 to 2011.

Rashmi Sharma and N. K. Pandya (2013), have done an overview of Investing in Mutual Fund.
In this paper, structure of mutual fund, comparison between investments in mutual fund and other
investment options and calculation of NAV etc. have been considered. In this paper, the impacts of
various demographic factors on investors’ attitude towards mutual fund have been studied. For
measuring various phenomena and analyzing the collected data effectively and efficiently for
drawing sound conclusions, drawing pie charts has been used and for analyzing the various factors
responsible for investment in mutual funds.

Rahul Singal, Anuradha Garg and Dr Sanjay Singla (May 2013), have done Performance
Appraisal of Growth Mutual Fund. The paper examines the performance of 25 Growth Mutual
Fund Schemes. Over the time period Jan 2004 to Dec 2008. For this purpose three techniques are
used (I) Beta (II) Sharpe Ratio (III) Treynor Ratio. Rank is given according to result drawn from
this scheme and comparison is also made between results drawn from different schemes and
normally the different are insignificant. Dhimen Jani and Dr. Rajeev Jain (Dec 2013), have studied
Role of Mutual Funds in Indian Financial System as a Key Resource Mobiliser. This paper
attempts to identify, the relationship between AUM mobilized by mutual fund companies and GDP
growth of the India. To find out correlation coefficient Kendall’s tau b and spearman’s rho
correlation ship was applied, the data range was selected from 1998-99 to 2009-10.
 CHAPTER - IV

RESEARCH METHODOLOGY
Research methodology is way to systematically solve the research problem. Research, in common
terms refers to a search for knowledge. Research methodology consists of different steps that are
generally adopted by a researcher to study the research problem along with the logic behind them.

RESEARCH DESIGN:

 Research design is the plan, structure and strategy of investigation conceived so as to obtain
answers to research question.

 There are two types of research design. One is exploratory research and other is descriptive
research.

EXPLORATORY RESEARCH:

 We studied the company report, talked to the customers and employee of the company. We
identified that inspite of providing various opportunities customers may not be aware of
derivative and commodity products.

DESCRIPTIVE RESEARCH
 Survey method was adopted for this research

DATA SOURCES:
 The study is mainly based on the data collection from primary as well as secondary sources.

Primary data:
 Data collected for specific purposes in the form of questionnaire

Secondary data:
 Data existing in the form of Books, Internet Catalogues etc.

i). Research Objective

a ). To know the value of mutual funds in India and their major aspects.

b). To know the various fund offered by the mutual funds in India.

c).To identify the level of risk involved in investing in various equity diversified mutual fund
schemes.
d).To know various regulatory firm of mutual funds in India.

e). To know the organizational structure of a mutual funds.

f). To know the best mutual funds investment plan like Systematic investment plan.

g).To know the steps of how to invest in mutual fund by investor.

ii). Limitation of the Study

 Time constraints: Due to shortage or less availability of time it may be possible that all the
related and concerned aspects may not be covered in the project.

 Analysis done is limited to the availability of data.

 CHAPTER - V

Data Analysis & Interpretation

1. Analyzing to according to Age

Interpretation - Here, it is been found that most of the investors i.e, 35% of the investors who
Invest in Mutual Fund lies in between the age group of 36-40, they are more reluctant as well as
experienced in this field of Mutual Fund.
Then the Second highest age group lies in between the age group of 41-45 (22%), they are also
aware of the benefits in investing in mutual fund. The least interested group is the Youth
Generations.

2. Analyzing according to Qualification

Interpretation - Out of my survey of 100 people, 71% of the investors are Graduates and Post
Graduates and 16.67% are Under Graduates and Others, around 12.5%, which may include
persons who have passed their 10th standard or 12th standard invests in Mutual Funds.

3. Analyzing according to Occupation

Interpretation - Here it is amazed to see that around 46% of the investment is been invested
by the persons working in Private sectors, according to them investing in Mutual Funds is more
Safer as well as more gainer.
Then we find that the businessmen of around 25% give more preference in investing in mutual
funds, they think that investing in mutual fund is better than investing in shares as well as Post
Office. Next we see that the persons working in Government sectors of around 24% only invests
in Mutual Fund.
4. Analyzing according to Monthly Family Income

Interpretation - Here, we find that investors of around 43% with the monthly income of
Rs. >30000 are the most likely to invest in Mutual fund, than any other income group.

5. Analyzing data according to factors seen before investing

Interpretation - As it can be clearly stated from the above Diagram that investors before
Investing, the main criteria that they used to give more Preference are Low Risk. According to
them, if a scheme is low risk, it may or may not give a very good return, but still 56% of the
investors choose low risk as the option while investing in Mutual Funds.
43Then we see that 27% of the investors take High return as one of their most important criteria.
According to them, if there is no high return then we should opt for Post office and not mutual
Fund. 11% of the investors take trust as one of their important factors only 4% of the Investors
thinks liquidity as their most preferable options.

6. Analyzing data according to mode of investment

Interpretation - It can be clearly stated from the above Figure that 82% of the investors like to
Invest in SIP, as the investor feels that they are more comfortable to save via SIP than the Long
Term.
While 18% of the investors find SIP as very burdensome, and they are more reluctant to save in
Long term investment.
 7. Analyzing data according to objective of investment

Interpretation - Here we see that 36% of the investor’s objectives are to preserve the principal
amount, so that it can be used as a savings for the future period.
While 22% investors invest to get derive their current income through investing in Mutual Funds.
While 15% and 17% of the investors invest to get a conservative as well as aggressive growth.

8. Analyzing data according to awareness about Mutual Fund

Interpretation -. From The total lot of 100 people, 96 people are actually aware of the fact of
Mutual fund and are regular investors of Mutual Funds.
4 People were there who have just heard the name or rather are just aware of the fact of
existence of the word called Mutual Fund, but doesn’t know anything else about Mutual Funds.

9 Analyzing data according to from where they came to know about

Mutual Fund.

Interpretation - Here from the Line Graph it can be clearly stated that around 46% of the
investors came to know the benefits of Mutual Fund from Financial Advisors. According to the
suggestions given by the financial advisors, people use to choose Mutual Funds Scheme.
Then Secondly, 24% and 21% of the people used to know from Advertisement and Peer group
respectively.
Lastly 9% of the investors do invests after being intimated by the Banks about the benefits of
Mutual Funds.
10. Analyzing data according to investors choice of investing in
different Mutual Fund Companies.

Interpretation - From this above Pie Chart it can be clearly stated that 45%, 17%of the people
like to invest in large cap companies where return is comparatively less but risk is low thus they
invest in Reliance, SBI respectively.
15%, 10% of the people like to invest in Mutual Fund Companies like HDFC, UTI, etc. where risk
is slightly higher than the above two mentioned companies as well as return is also slightly high
13% of the investors like to invest in the Small Cap’s and Mid Cap’s companies.
 FINDINGS

 People who lie under the age group of 36-40 have more experience and are more interested
in investing in Mutual Funds.

 There was a lot of lack of awareness or ignorance, that’s why out of 200 people, 120
people have invested in Mutual Fund and 80 people is unaware of investing in Mutual
Funds.

 Generally, People employed in Private sectors and Businessman are more likely to invest
in Mutual Funds, than other people working in other professions.

 Generally investors whose monthly income is above Rs. 20000-30000 are more likely to
invest their income in Mutual Fund, to preserve their savings of at least more than 20%.

 People generally like to save their savings in Mutual Fund, Fixed Deposits and Savings
Account.

 Many people came to know about Mutual Fund from Financial Advisors, Advertisement as
well as from their Peer group , and they generally invest in the Mutual Fund by taking
advices from their Legal Advisors.

 Investors generally like to invest in Large Cap Companies like Reliance, SBI, etc. to
minimize their risk.

 The most popular medium of investing in Mutual Fund is through SIP and moreover
people like to invest in Equity Fund though it is a risky game.

 The main Objective of most of the Investors is to preserve their Income.

 CHAPTER - VI

CONCLUSION

Mutual Funds now represent perhaps most appropriate investment opportunity for most 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. As the investor always try to maximize the returns and minimize the risk. Mutual fund
satisfies these requirements by providing attractive returns with affordable risks. The fund industry
has already overtaken the banking industry, more funds being under mutual fund management than
deposited with banks. With the emergence of tough competition in this sector mutual funds are
launching a variety of schemes which caters to the requirement of the particular class of investors.
Risk takers for getting capital appreciation should invest in growth, equity schemes. Investors who
are in need of regular income should invest in income plans. The stock market has been rising for
over three years now. This in turn has not only protected the money invested in funds but has also
to help grow these investments. This has also instilled greater confidence among fund investors
who are investing more into the market through the MF route than ever before. Reliance India
mutual funds provide major benefits to a common man who wants to make his life better than
previous. The mutual fund industry as a whole gets less than 2 per cent of household savings
against the 46 per cent that go into bank deposits. Some fund managers say this only indicates the
sector's potential. "If mutual funds succeed in chipping away at bank deposits, even a triple digit
growth is possible over the next few years.
 CHAPTER - VII

RECOMMENDATIONS AND SUGGESTIONS

 To regulate entry and exit loads effectively as it creates a lot of confusion during actual
settlement of costs and bills.

 To better operations management so as to reduce the time lag and improve customer
feedback.

 To improve market penetration by targeting not only metros but mini-metros and smaller
towns more effectively.

 To come up with more innovative schemes and products so as to expand over the largest
customer base as possible.

 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 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? 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.

 Mutual Fund Company needs to give the training of the Individual Financial Advisors
about the Fund/Scheme and its objective, because they are the main source to influence the
investors.

 Before making any investment Financial Advisors should first enquire about the risk
tolerance of the investors/customers, their need and time (how long they want to invest). By
considering these three things they can take the customers into consideration.

 Younger people aged under 35 will be a key new customer group into the future, so making
greater efforts with younger customers who show some interest in investing should pay off.

 Customers with graduate level education are easier to sell to and there is a large untapped
market there. To succeed however, advisors must provide sound advice and high quality.

 Systematic Investment Plan (SIP) is one the innovative products launched by Assets
Management companies very recently in the industry. SIP is easy for monthly salaried
person as it provides the facility of do the investment in EMI. Though most of the prospects
and potential investors are not aware about the SIP. There is a large scope for the
companies to tap the salaried persons.
 CHAPTER - VIII
BIBLIOGRAPHY

 Books:

Mutual Funds in India – by H. Sadhak

 References

Websites:

www.bajajcapital.com

www.google.co.in

www.mutualfundsindia.com

www.utimf.com

www.moneycontrol.com

www.shodh.inflibnet.com

www.assocham.org

www.amfiindia.com
 CHAPTER - IX

Questionnaire

Name: ................... Age: …………….. Mob. ……………

Ques.1 What is your Qualification?

(a) Under-graduation (b) Graduation

(c) Post Graduation (d) Others

Ques.2 What is your Occupation?

(a) Government (b) Private

(c) Business (d) Others

Ques.3 What is your monthly family income?

(a) <=10000 (b) 10001-20000

(c) 20001-30000 (d) >30000

Ques.4 Do you have any idea about Mutual Fund?

(a) Yes
(b) No

Ques.5 From where you came to know about Mutual Fund?

(a) Advertisement (b) Peer Group

(c) Banks (d) Financial Advisors

Ques.6 Where you will prefer to invest?

(a) Savings (b) FD (c) Insurance (d) Mutual Fund

(e)PO (f) Shares (g) Gold (h) Real Estate

Ques.7 Which is your preference while investing?

(a) Low Return (b) High Risk

(c) Liquidity (d) Trust

Ques.8 Which Mutual Fund Company you will prefer to invest?

(a) Reliance (b) SBI (c) UTI

(d) HDFC (e) Others

Ques.9 Which modes of investment will you prefer?

(a) Long Term (b) Short Term

Ques.10 Objective of investment?

(a) Preservation (b) Current Income

(c) Conservative Growth (d) Aggressive Growth
63