Birla Project,(Mahesh.S)

8/9/2019 Birla Project,(Mahesh.S)

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Service proliferation and customer satisfaction

Mr.MAHESH.S

Masters of Business Administration, Marketing Specialization

at JSSCMS, sjce campus Mysore.

Project on Service proliferation and customer satisfaction at

Birla Sunlife Assest Management ,Mysore

Guide:HK Karthik

Branch Head

Birla AMCMysore

JSSCMS, Mysore,MAHESH.S VTU, Belgaum 1


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SUMMARY

The basic objective of any financial services company would be to provide anabsolute tailor made products and services to the customer and to retain them into the

organization, but to retain a particular customer is not easy because customer

expectations change by time and it becomes a tough job for the companies to curb the

needs of their customers.

Now with the case of asset management company which is getting its pace and a lot

of companies are emerging as players, here a study has been undertaken with regards to

BIRLA SUNLIFE AMC where study looks into the expectation of the customers

regarding mutual funds and issues relating to customers expectation. The need for this

research is to emphasis the expectations of customer of mutual funds and how the

company in contrast to the expectations is performing. This research is conducted to

understand the customers perception towards mutual fund. Till yesterday people are

having very less knowledge for mutual funds because of brokerage companies in India

have not made efforts to expand the market. They have been doing business with the

same clientele. There is also a lack of investor awareness as far as markets are concerned.

The Harshad Mehta scam and various other scams have created a bad impression in

people's minds and this need to be changed. Just to put things in perspective, India has

330 million bank accounts. The mutual fund industry has 30 million unique folios.



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Unfortunately, in the broking industry, the number of people with Demat accounts

has continued to stagnate at 5.85 million in the last 10-12 years, which is worrisome.

Every industry in India has grown over the last 10 years except this one. Whatever retail

participation exists is coming from bigger cities such as Mumbai and Delhi. The services

have not reached bottom-of-the-pyramid towns.

A Mutual Fund is a trust that pools the savings of a number of investors who

share a common financial goal. The money thus collected is then invested in capital

market instruments such as shares, debentures and other securities. The income earned

through these investments and the capital appreciation realized is shared by its unit

holders in proportion to the number of units owned by them. Thus a Mutual Fund is the

most suitable investment for the common man as it offers an opportunity to invest in a

diversified, professionally managed basket of securities at a relatively low cost. The flow

chart below describes broadly the working of a mutual fund.



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INTRODUCTION

Customer satisfaction is a measure of how products and services supplied by a

company can meet the customers expectations. Customer satisfaction is still one of the

single strongest predictors of customer retention. Its considerably more expensive to

attract new customers than it is to keep old ones happy.

In a climate of decreasing brand loyalties, understanding customer service and

measuring customer satisfaction are very crucial. There is obviously a strong link

between customer satisfaction and customer retention. Customer's perception of Service

and Quality of product will determine the success of the product or service in the market.

With better understanding of customers' perceptions, companies can determine the

actions required to meet the customers' needs. They can identify their own strengths and

weaknesses, where they stand in comparison to their competitors, chart out path future

progress and improvement. Customer satisfaction measurement helps to promote an

increased focus on customer outcomes and stimulate improvements in the work practices

and processes used within the company.

Customer expectations are the customer-defined attributes of your product or service

you must meet or exceed to achieve customer satisfaction.



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There are many reasons why customer expectations are likely to change over time.

Process improvements, advent of new technology, changes in customer's priorities,

improved quality of service provided by competitors are just a few examples.

PURPOSE OF THE STUDY

The main purpose of the study is to know the expectations of those investors who

invested in BIRLA SUNLIFE mutual funds and the satisfaction levels of investors with

the services provided by the BIRLA SUNLIFE Asset Management Company, MYSORE



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In the present competitive environment it is very crucial to every business firm to ensure

satisfaction to its customers.

According to one survey it was found that it costs five times more to attract a new

customer than to retain an existing customer. So with all these parameters taking into

consideration one can say that it is very important to provide goods and services that

satisfy customers needs or wants irrespective of the industry or scale of the business in

which a firm is operating. Here the main purpose of the survey is to know the various

factors that are very important in satisfying the customers needs and to know how

BIRLA SUNLIFE AMC is ensuring its customers satisfaction.

The expectations of customers are vary from one customer to the other customer.

For example some customers are only concerned about the returns that they are getting in

a fund but at the same time there are some other customers who are very specific about

the location, ambience and front line employees interaction and some other parameters.

It is very difficult to any business firm to satisfy all the expectations of all customers

but there are some common factors that are essential to fulfill. The objectives of the

projects are given as below. The details of the survey such as the source of data, the

sample size taken and the methods of analysis are all given briefly in the methodologies.

There are some constraints throughout the project, which are given clearly in the

limitations.

OBJECTIVES

The following are the objectives of the Management Thesis.

To understand the different investment options provided by BIRLA SUNLIFE

mutual funds through its mutual fund schemes.



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To know the investors expectations on mutual funds offered by BIRLA

SUNLIFE mutual funds.

To know the various services provided by BIRLA SUNLIFE AMC to its

Investors.

To study the satisfaction levels of customers in BIRLA SUNLIFE mutual funds.

To identify how the brand building helps in meeting the customers expectation to

meet their investment objectives

METHODOLOGY

The type of research used in the study is primary analytical research design.

Survey method of data collection was adopted. The research instrument used for

collection of primary data was a questionnaire.

The secondary data was obtained from various company journals, annual reports,

books from the library and websites.

SAMPLING TECHNIQUE

Since the size of the investors was large, sampling was adopted. Cluster random

sampling was adopted and further, convenience random sampling was adopted to

conduct the research. Depending on the availability of respondents, the sample

was selected.

SAMPLE SIZE



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A sample of 50 was targeted for the study. The sample consists of individual

investors classified as: High Net worth individuals. Medium Net worth

Individuals. Low Net worth Individuals.

SOURCES, TOOLS AND TECHNIQUES OF DATA

COLLECTION

Data was collected from both primary and secondary sources.

Primary Data

An interview schedule that is a questionnaire was designed, pre-tested and

administrated on the individual potential investors. Visiting the organization

Using structured questionnaire for the existing customer

Secondary Data

It is collected from a wide array of research papers, capital market, finance

journals, various websites and companys database.

Tool and techniques of data collection

Purpose based questionnaire have been designed seeking relevant information.

Furthermore, past history of investors and market watch is also used. Data has

also been collected through specific search engines over the Internet.

PLAN OF ANALYSIS

All data collected was carefully classified, tabulated and interpreted on the basis

of which, tables, charts and graphs were drawn up. Percentages were drawn and

the data have been analyzed. The analysis helped in drawing inferences and for

better understanding graphs were plotted.



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LIMITATIONS

As the data will be collected through questionnaire, there are chances of biased

information provided by the respondent. The study is confined to the existing customers

of BIRLA SUNLIFE mutual funds only.

The survey will be limited only to MYSORE city.

The study does not consider the equity investment portfolio of investors.

LITERATURE REVIEW

Literature review is the beginning of the primary data collection. It acts as a gateway to

the familiarity exercise by getting exposed to the study field in details. Literature review

included texts, databases, internet, journals and dailies.

PURPOSE

The purpose of literature review is innumerable in research work. Specific need

for references and citations makes secondary data quite valid. Literature review forms the

integral part of larger research. Secondary data forms the sole basis for research in some

instances. Above all, secondary data has proven to be less costly, readily available, less

time consuming and less effort required compared to primary data.

Literature reviews provides support to validate secondary data. Hence, complementing

the field data conclusion. It has also been observed that secondary data gives insight into

the research details. It is mandatory to examine secondary data as a prerequisite for

accuracy and relevance for primary data and subsequent analysis.

Document Review

This report has been supplemented by observational fieldwork and interviewing

with and gathering and analyzing documentary material. These kinds of documents are a



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useful source of information on program activities and processes, and they can generate

ideas for questions that can be pursued through observation and interviewing.

METHODOLOGY FOR LITERATURE REVIEW

Literature review heavily relied on published materials like journals, newspaper

articles; magazines and write-ups of Current issues on the internet concerning inventory

management were constantly reviewed. Dailies and journals were visited from time to

time as articles appeared in the newspapers and magazines. Methodology is the concept

of methods used in conducting the study.

The methodology used for data collection is mainly through primary and secondary data.

The secondary data is collected in the form of Balance sheets, Profit & Loss accounts and

Financial Statements from the annual reports published by the company and other

records, documents, journals, facts and figures of the company

Findings Customer revenue was found to correlate negatively with customer

profitability for unprofitable customers, and positively for profitable customers.

Research limitations/implications One of the limitations of this research is that it teststhe propositions within a single industry. Future research should attempt to replicate these

findings in other contexts.

Practical implications A simplistic focus on improving customer satisfaction for

all customers in order to improve share-of-wallet and customer revenue does not seem to

represent the best management approach to maximize overall firm profitability. In fact, it

could actually result in a negative return on investment. Therefore, customers should first

be segmented by their profitability to the firm before expending resources to improve

customer satisfaction and share-of-wallet.

Originality/value The results of this paper challenge the conventional belief that

customer satisfaction should lead to customer retention in turn, resulting in customer



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revenue and ultimately customer profitability. The findings indicate that this may not

always be true.



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Great Britain and France, making its way to the United States in the 1890s. The

Boston Personal Property Trust, formed in 1893, was the first closed-end fund in

the U.S. The creation of the Alexander Fund in Philadelphia, Pennsylvania, in

1907 was an important step in the evolution toward what we know as the modern

mutual fund. The Alexander Fund featured semi-annual issues and allowed

investors to make withdrawals on demand.

Origin of mutual fund 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 qualities wise as well as

quantity wise. Before, the monopoly of the market had seen an ending phase; the Assets

under Management (AUM) were Rs. 67bn. The private sector entry to the fund family

raised the AUM to Rs.470bn 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

http://www.investopedia.com/terms/c/closed-endinvestment.asphttp://www.investopedia.com/terms/c/closed-endinvestment.asp


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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)

SBI Mutual Fund was the first followed by Canbank Mutual Fund (Dec 87),

Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov89), Bank

of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC in 1989 and GIC in1990.

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,



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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 Regulations, and with recent mergers taking place among different private sector

funds, the mutual fund industry has entered its current phase of consolidation and growth.

As at the end of September, 2004, there were 29 funds, which manage assets of

Rs.153108 crores under 421 schemes.

OPERATION OF THE FUND

A mutual fund invites the prospective investors to join the fund by offering

various schemes so as to suit to the requirements of categories of investors. The resources

of individual investors are pooled together and the investors are issued units/shares for

the money invested. The amount so collected is invested in capital market instruments

like treasury bills, commercial papers, etc.

For managing the fund, a mutual fund gets an annual fee of 1.25% of funds

managed at the maximum as fixed by SEBI (MF) regulations, 1993 and if the funds

exceed Rs.100 crores, the fee is only 1%. The fee cannot exceed 1%. Off course, regular

expenses like custodial fee, cost of dividend warrants, fee for registration, the asset

management fee etc are debited to the respective schemes. These expenses cannot exceed

3% of the assets in the respective schemes. These expenses cannot exceed 3% of the

assets in the respective schemes each year. The remaining amount is given back to the

investors in full.



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Mutual Fund Operation Flow Chart

ORGANISATION OF A MUTUAL FUND

The formation and operations of Mutual Funds in India is solely guided by SEBI

(Mutual Funds) Regulations, 1993, which came into force on 20th January, 1996, through

a notification on 9th December 1996. These Regulations make it mandatory for Mutual

Funds to have a three-tier structure of:

1. A Sponsor Institution to promote the Fund.

2. A team of Trustees to oversee the operations and to provide checks for the efficient,

profitable and transparent operations of the fund and

3. An Asset Management Company (AMC) to actually deal with the funds.

There are many entities involved and the diagram below illustrates the Organizational set

up of a mutual fund



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Sponsoring institution;

The company, which sets up the mutual fund, is called the Sponsor. SEBI has laid

down certain criteria to be met by the sponsor. The criterion mainly deals with adequate

experience, good past track record, net worth etc.

Sponsor appoints the Trustees, Custodian and the AMC with the prior approval of

SEBI, and in accordance with SEBI Regulations.

Sponsor must have at least 5-year track record of business interest in the Financial

Markets.

Trustees:

Trustees are the people with long experience and good integrity in the respective

fields carry the crucial responsibility in safeguarding the interests of the investors. For

this purpose, they monitor the operations of the different schemes. They have wide

ranging powers and they can even dismiss AMC with the approval of SEBI.

The Indian Trust Act governs them.

Rules regarding appointment of the Trustees are:

Appointment of Trustees has to be done with the prior approval of SEBI.



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There must be at least 4 members in the Board of Trustees and at least 2/3 rd of the

members of the Board of Trustees must be independent.

Trustees of one Mutual Fund cannot be a Trustee of another Mutual Fund, unless

he is an independent trustee in both cases, and has the approval of both the

Boards.

Rights of Trustees:

Trustees appoint the AMC, in consultation with the sponsor and according SEBI

Regulations.

All mutual Fund Schemes floated by the AMC have to be approved by the

Trustees.

Trustees can seek information from the AMC on the operations and compliance of

the Mutual Fund, with the provisions of the trust Deed, investment management

agreement and the SEBI Regulations.

Trustees can review and ensure that Net worth of the AMC is according to

stipulated norms and regulations.

DISTRIBUTION CHANNELS IN THE MUTUAL FUND INDUSTRY:

In India, AMCs work with five distinct distribution channels those are direct,

banking, retail, corporate and individual financial adviser.

The Direct Channels:

In the direct channel, customers invest in the schemes directly through AMC. In

most cases, the company does not provide any investment advice, so these

investors have to carry out their own research and select schemes themselves. The

fund companies provide several tools to investors who invest through this

channel. This includes monthly a/c statement, processing of transaction, and



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maintenance of records. In this channel most investors can invest through

websites, or receive information through telephonic services provided by the

company. About 10-20% of the total sales of an AMC come through this direct

channel.

The banking channel:

The large customer bases of banks, in devolped countries, have played an

important role in the selling MFs. In the recent years, this channel has also opened

up in India. Banks operating in India , including public sector, private and foreign

banks have established tie-up with various fund companies for providing

distribution and servicing.

The banking channel is likely to develop as the most vital distribution channel for

fund companies there are several reasons for the same. Customers remain invested

in banks for long periods of time and therefore banks maintain a relationship of

trust with their customers. Customers are rely on advice provided to them by

bankers as they are always on the look out for better investment avenues.

Managers are guiding to customers about various funds.

An additional advantage that banks provide is that the concerned customer

becomes a permanent contact of the banks and therefore can be reached during

launch of (new fund offer) NFO or new schemes any time in the future.

The retail channel:

A customer can deal with directly with a sub broker belonging to a distributioncompany, instead of taking trouble of dealing with several agents. Distribution

companies sell the schemes of several fund houses simultaneously and brokerage

is paid by the AMC whose funds they sell. The retail channels offer the benefits

of specialist knowledge and established client contact and, therefore private fund

houses are generally prefer this channel. Some of the major players in India in this



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in this channel are national players like Karvey, Birla sun life and

cholamandalam. The key factor for this channel to sell a companys fund used to

be the brokerage paid. The banking and retail channel generally contribute to

about 50-70% of the total Asset Under Management (AUM).

The corporate channel:

The corporate channel includes a variety of institutions that invest in shares on the

companys name.these are businesses, trust,and even state and local governments.

For institutional investors, fund managers prefer to create special funds and share

classes. Corporate can either invest directly in mutual funds, or through an

intermediary such as a distribution house or a bank.

Corporate exhibit varying degrees of awareness of mutual fund products. Most of

the established corporate, such as the TVS industries in Hyderabad, are well-

versed with the performance and composition of various funds. The smaller

companies and start-up firms, however, need to be educating on several aspects of

mutual funds. In order to provide information to such clients, fund companies

usually organize presentation for these companies or set-up meetings with thefinance managers.

Individual Financial Advisors(IFA) or Agents:

i. The IFA channel is the oldest channel for distribution and was widely employed

at the time when UTI monopoly in the market. In recent times with the emergencesignificantly decreased.

ii. An agent who basically acts as an interface between the customer and the fund

house there is a unique systems in place in India , wherein several sub-brokers are



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working under one main broker. The huge network of sub-brokers, thus ensure

larger market penetration and geographic coverage. As per AMFI, over one lakh

agents are registered to sell mutual funds and other financial products such as

insurance across the country.

Asset Management Company:

The AMC actually manages the funds of the various schemes. The AMC employs

a large number of professionals to make investments, carry out research &to do agent and

investor servicing. Infact, the success of any Mutual

Fund depends upon the efficiency of this AMC. The AMC submits a quarterly report on

the functioning of the mutual fund to the trustees who will guide and control the AMC.

The AMC is usually a private limited company, in which the sponsors and their

associations or joint venture partners are shareholders. The AMC has to be registered by

SEBI and should have a minimum Net worth of Rs.10 cores all times. The role of the

AMC is to act as the Investment Manager of the Trust along with the following functions:

It manages the funds by making investments in accordance with the provision of

the Trust Deed and Regulations

The AMC shall disclose the basis of calculation of NAV and Repurchase price of

the schemes and disclose the same to the investors.

Funds shall be invested as per Trust Deed and Regulations.

Restrictions on the AMC.s:

AMC.s cannot launch a fund scheme without the prior approval of Trustees.

AMC.s has to provide full details of Employees and Board Members, in all cases

where such investments exceed Rs. 1 lakh.

AMC.s cannot take up any activity that is in conflict with the activities of the

mutual funds.



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Registrars and Transfer Agents:

The Registrars and Transfer Agents are responsible for the investor servicing

functions, as they maintain the records of investors in the mutual funds. They process

investor applications, record details provided by the investors on application forms, send

out periodical information on the performance of the mutual fund; process dividend pay-

out to the investors; incorporate changes in information as communicated by investors;

and keep the investor record up to date, by recording new investors and removing

investors who have withdrawn their funds

Custodian:

Custodians are responsible for the securities held in the mutual funds portfolio.They discharge an important back-office function, by ensuring that securities that are

bought are delivered and transferred to the books of mutual funds, and that funds are

paid-out when mutual fund buys securities. They keep the investment account of the

mutual fund, and also collect the dividends and interest payments due on the mutual fund

investments. Custodians also track corporate actions like bonus, issues, right offers, offer

for sale, buy back and open offers for acquisition.

GROWTH IN ASSETS UNDER MANAGEMENT



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REGULATORY STRUCTURE OF MUTUAL FUNDS IN

INDIA

The regulation of mutual funds in India is governed by the SEBI vide the SEBI (Mutual

Fund) Regulation, Act 1996 (here in after referred to as SEBI Regulations). These

regulations make it mandatory for mutual funds to have a three-tier structure of sponsor

Trustee Asset Management Company (AMC). The sponsor is the promoter of the

mutual fund and appoints the trustees. The Trustees are responsible to the investors in the

mutual fund and appoint the AMC for managing the investment portfolio. SEBI

regulations also provide for who can be a sponsor, trustee and AMC, specifying the

format of agreement between these entities. These agreements provide for the rights,



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duties and obligations of these three entities. The UTI is also structured as a trust. The

important difference through is that UTI does not have sponsors or a separate AMC.

Financial intuitions and banks that contributed to the initial capital of the UTI have their

representatives on UTIs Board of Trustees, which oversees the operation of UTI Mutual

Fund. The Association of Mutual Funds in India (AMFI) is a self regulatory body formed

by the various MF Companies to address the practices and policies of various aspects like

new scheme launches, payments to intermediaries comparisons and other ethical

systems.

Likewise, different companies have their own Compliance and Audit offices,

which are mandated to control and report adherence to and deviations if any on the

regulations and policies issued by SEBI.

Market Share and Growth of the Mutual Fund Industry

Assets Under Management as at the end of Feb-2009

SL.no Mutual Fund House Growth% % Market Share

1 AIG global investment group Mutual Fund 6.69 0.29

2 Baroda Pioneer Mutual Fund NA NA

3 Benchmark Mutual Fund -22.47 0.29

4 Bharathi AXA Mutual Fund -11.24 0.045 Birla Sun Life Mutual Fund 15.18 9.69

6 Canara Robeco Mutual Fund 19.53 0.98

7 DBS Chola Mutual Fund -8.48 0.20

8 Deutsche Mutual Fund 14.77 1.92

9 DSP BlackRock Mutual Fund 2.53 2.82

10 Edelweiss Mutual Fund -3.45 0.01

11 Escorts Mutual Fund -2.19 0.04

12 Fidelity Mutual Fund 3.79 1.25

13 Fortis Mutual Fund 7.86 1.10

14 Franklin Templeton Mutual Fund 0.52 3.8715 Goldman Sachs Mutual Fund NA NA

16 HDFC Mutual Fund 10.59 11.35

17 HSBC Mutual Fund -2.07 1.91

18 ICICI Prudential Mutual Fund 12.62 10.68

19 IDFC Mutual Fund 19.00 2.71

20 ING Mutual Fund 1.56 0.53

21 JM financial Mutual Fund -1.54 1.08



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22 JP Morgan Mutual Fund 16.09 0.48

23 Kotak Mahindra Mutual Fund 9.82 3.45

24 LIC Mutual Fund 29.56 4.84

25 Mirae Asset Mutual Fund -1.38 0.03

26 Morgan Stanley Mutual Fund -7.27 0.2827 PRINCIPAL Mutual Fund -1.60 1.39

28 Quantum Mutual Fund 3.14 0.01

29 Reliance Mutual Fund 7.17 16.29

30 Religare AEGON Mutual Fund NA NA

31 Religare Mutual Fund 23.99 1.08

32 Sahara Mutual Fund -7.06 0.03

33 SBI Mutual Fund 2.54 5.51

34 Sundaram BNP Paribas Mutual Fund 1.76 1.94

35 Tata Mutual Fund -4.18 3.85

36 Taurus Mutual Fund 3.39 0.04

37 UTI Mutual Fund 6.64 9.83

FUTURE OF MUTUAL FUND:

Indian mutual fund industry reached Rs 1, 50,537 crore by March 2004. 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 there is an annual growth rate of 9%. According to the

current growth rate, by year 2010.

Mutual fund India assets will be double.

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.



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'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 rurals 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

The asset base will continue to grow at an annual rate of about 30 to 35 % over the next

few years as investors shift their assets from banks and other traditional avenues.

Benefits of Mutual Fund Investment

Professional Management

Mutual Funds provide the services of experienced and skilled professionals, backed by a

dedicated investment research team that analyses the performance and prospects of

companies and selects suitable investments to achieve the objectives of the scheme.

Diversification

Mutual Funds invest in a number of companies across a broad cross-section of industries

and sectors. This diversification reduces the risk because seldom do all stocks decline at

the same time and in the same proportion. You achieve this diversification through a

Mutual Fund with far less money than you can do on your own.

Convenient Administration

Investing in a Mutual Fund reduces paperwork and helps you avoid many problems such

as bad deliveries, delayed payments and follow up with brokers and companies. Mutual

Funds save your time and make investing easy and convenient.



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Return Potential

Over a medium to long-term, Mutual Funds have the potential to provide a higher return

as they invest in a diversified basket of selected securities.

Low Costs

Mutual Funds are a relatively less expensive way to invest compared to directly investing

in the capital markets because the benefits of scale in brokerage, custodial and other fees

translate into lower costs for investors.

Liquidity

In open-end schemes, the investor gets the money back promptly at net asset value

related prices from the Mutual Fund. In closed-end schemes, the units can be sold on a

stock exchange at the prevailing market price or the investor can avail of the facility of

direct repurchase at NAV related prices by the Mutual Fund.

Transparency

You get regular information on the value of your investment in addition to disclosure

on the specific investments made by your scheme, the proportion invested in each class

of assets and the fund managers investment strategy and outlook.

Flexibility

Through features such as regular investment plans, regular withdrawal plans and dividend

reinvestment plans, you can systematically invest or withdraw funds according to your

needs and convenience.

Affordability



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Investors individually may lack sufficient funds to invest in high-grade stocks. A mutual

fund because of its large corpus allows even a small investor to take the benefit of its

investment strategy.

Well Regulated

All Mutual Funds are registered with SEBI and they function within the provisions of

strict regulations designed to protect the interests of investors. The operations of Mutual

Funds are regularly monitored by SEBI.

Advantages of mutual funds include:

_Diversification of risk,

_Professional management

_ Different investment options and ability to purchase a large selection of

investments at a modest cost.

_Their large size permits them to buy larger volumes of stocks at a discount

_The investor can be a part owner of many different companies even with a modest

investment

Disadvantages of mutual funds include:

Inability to make ones own decisions No guarantee that the professional managers will provide anticipated results

Investment company managers can switch styles of investing, even while

adhering to the objectives and policy agreed upon by the mutual fund. This makes

it difficult for the investor to keep track of the investments owned by the fund

and the activity of fund managers.



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Past performance, a highly reported indicator is just that, one of many indicators;

it is no guarantee for future performance. Careful scrutiny is warranted when

reading a funds advertisement about past stellar performance.

Risk Involved in Mutual Funds

All investments involve some form of risk, which should be evaluated them potential

rewards when an investment is selected.

Managing risk

At times the prices or yields of all the securities in a particular market rise or fall due

to broad outside influences. When this happens, the stock prices of both an outstanding,

highly profitable company and a fledgling corporation may be affected. This change in

price is due to market risk.

Interest rate risk

Sometimes referred to as loss of purchasing power. Whenever inflation sprints

forward faster than the earnings on your investment, you run the risk that you will

actually be able to buy less, not more. Inflation risk also occurs when prices rise faster

than your returns.

Credit risk

In short, how stable is the company or entity to which you lend your money when you

invest? How certain are you that it will be able to pay the interest you are promised, or

repay your principal when the investment matures?

Inflation risk



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Changing interest rates affect both equities and bonds in many ways. Investors are

reminded that predicting which way rates will go is rarely successful. A diversified

portfolio can help in offsetting these changes.

Effect of loss of key professional and inability to adopt

An industries key asset is often the personnel who run the business i.e. intellectual

properties of the key employees of the respective companies. Given the ever changingcomplexion of few industries and the high obsolescence levels, availability of qualified,

trained and motivated personnel is very critical for the success of industries in few

sectors. It is, therefore, necessary to attract key personnel and also to retain them to meet

the changing environment and challenges the sector offers. Failure or inability to

attract/retain such qualified key personnel may impact the prospects of the companies in

the particular sector in which the fund invests.

Exchange risks

A number of companies generate revenues in foreign currencies and may have

investments or expenses also denominated in foreign currencies. Changes in exchange

rates may, therefore, have a positive or negative impact on companies which in turn

would have an effect on the investment of the fund.

Investment risks

The Sectorial fund schemes, investments will be predominantly in equities of select

companies in the particular sectors. Accordingly, the NAV of the schemes are linked to

the equity performance of such companies and may be more volatile than a more

diversified portfolio of equities.



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Changes in government policy

Changes in Government policy especially in regard to the tax benefits may impact the

business prospects of the companies leading to an impact on the investments made by the

fund.

Types of Mutual Funds

Mutual fund schemes may be classified on the basis of its structure and its investment

objectives.

1. By Structure:_

Open-ended Funds

An open-end fund is one that is available for subscription all through the year. These do

not have a fixed maturity. Investors can conveniently buy and sell units at Net Asset

Value (NAV) related prices.

The key feature of open-end schemes is liquidity.

Closed-ended Funds

A closed-end fund has a stipulated maturity period which generally ranging from 3 to 15

years. The fund is open for subscription only during a specified period. Investors can

invest in the scheme at the time of the initial public issue and thereafter they can buy or

sell the units of the scheme on the stock exchanges where they are listed. In order to

provide an exit route to the investors, some close-ended funds give an option of sellingback 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.



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Interval Funds

Interval funds combine the features of open-ended and close-ended schemes. They are

open for sale or redemption during pre-determined intervals at NAV related prices.



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1. By Investment Objective:

Growth Funds

The aim of growth funds is to provide capital appreciation over the medium to long-term.

Such schemes normally invest a majority of their corpus in equities. It has been proven

that returns from stocks, have outperformed most other kind of investments held over the

long term. Growth schemes are ideal for investors having a long-term outlook seeking

growth over a period of time.

Income Funds

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

and Government securities. Income Funds are ideal for capital stability and regular

income.

Balanced Funds

The aim of balanced funds is to provide both growth and regular income. Such schemes

periodically distribute a part of their earning and invest both in equities and fixed income

securities in the proportion indicated in their offer documents. In a rising stock market,

the NAV of these schemes may not normally keep pace, or fall equally when the market

falls. These are ideal for investors looking for a combination of income and moderate

growth

Money Market Funds

The aim of money market funds is to provide easy liquidity, preservation of capital andmoderate income. These schemes generally invest in safer short-term instruments such as

treasury bills, certificates of deposit, commercial paper and inter-bank call money.

Returns on these schemes may fluctuate depending upon the interest rates prevailing in

the market. These are ideal for Corporate and individual investors as a means to part their

surplus funds for short periods.



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Load Funds

A Load Fund is one that charges a commission for entry or exit. That is, each time you

buy or sell units in the fund, a commission will be payable. Typically entry and exit loads

range from 1% to 2%. It could be worth paying the load, if the fund has a good

performance history.

No-Load Funds

A No-Load Fund is one that does not charge a commission for entry or exit. That is, no

commission is payable on purchase or sale of units in the fund. The advantage of a no

load fund is that the entire corpus is put to work.

2. Other Schemes:

Tax Saving Schemes

These schemes offer tax rebates to the investors under specific provisions of the Indian

Income Tax laws as the Government offers tax incentives for investment in specified

avenues. Investments made in Equity Linked Savings Schemes and Pension Schemes are

allowed as deduction u/s 88 of the Income Tax Act, 1961. The Act also provides

opportunities to investors to save capital gains u/s 54EA and 54EB by investing in

Mutual Funds, provided the capital asset has been sold prior to April 1, 2000 and the

amount is invested before September 30, 2000.

3. Special Schemes

Industry Specific Schemes

Industry Specific Schemes invest only in the industries specified in the offer document.

The investment of these funds is limited to specific industries like InfoTech, Fast moving

consumer goods Pharmaceuticals etc.

Index Schemes



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Index Funds attempt to replicate the performance of a particular index such as the BSE

Sensex or the NSE 50.

Sectorial SchemesSectorial Funds are those, which invest exclusively in a specified industry or a group of

industries or various segments such as A Group shares or initial public offerings.

TABLE SHOWING THE COMPARISION BETWEEN BANKS V/S

MUTUAL FUNDS

BASES BANKS MUTUAL FUNDS

Returns Low Better

Administrative expenses High Low

Risk Low Moderate

Investment Option Less More

Network High Penetration Low but improving

Liquidity At a cost Better

Quality of Assets Not Transparent Transparent

Interest calculation Minimum Balance

between 10th & 30th

Of every month

Everyday

Guarantee Maximum Rs.1 lac on

deposit

None



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RISKSAND RETURN

Investors interest in investments is largely pecuniary to earn a return on their money.

However, selecting stocks exclusively on the basis of maximization of returns is not

enough. The fact that most investors do not place available funds into the one, two or

even three stocks promising the greatest returns suggests that other factors must be

considered besides returns in the selection process. Investors not only like returns but

they also dislike risk. Their holding of an assortment of securities attests to that fact.

To say that investors like returns and dislike risk is however, simplistic. Before we can

analyze securities and portfolios within a risk return context, we must begin with a clear

understanding of the meaning of both, risk and return, what creates them and how they

should be measured?

The ultimate decisions to be made in investments are:

What mutual funds should be held?

How much to allocate to each.

Security analysis and portfolio management is built around the idea that investors are

concerned with two principal properties inherent in securities: the return that can be

expected from holding a security, and the risk that the return that is achieved will be less

than the return that was expected. Investors want to maximize expected returns subject totheir tolerance for risk.

The level of risk you are willing to take typically determines the funds you decide to

invest in. Mutual funds offer 3 levels of risk - low, medium and high. In general, the

higher the risk, the greater the potential gain or loss. As a result, unit prices for high risk

mutual funds fluctuate far more widely than for lower risk funds. People who are more

cautious would tend to purchase lower risk funds, while more aggressive investors tend to

purchase higher risk units. One method of investment that many people like to use is

diversification - that is, buying a variety of funds across the various risk levels. As a

result, they will never totally miss out on major market gains, and their losses will be less

than if they invested only in high risk funds. Depending on how quickly you want to

build your capital, you can choose from a number of investment styles, ranging from

conservative to aggressive.



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Mutual fund India assets will be double.

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 areconcentrating 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

The asset base will continue to grow at an annual rate of about 30 to 35 % over the next

few years as investors shift their assets from banks and other traditional avenues. Some

of the older public and private sector players will either close shop or be taken over.



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COMPANY PROFILE

Company Profile - Birla SunLife

Birla sunlife Asset Management Company Ltd.(BSLAMC). The investment

managers of Birla Mutual Fund, is a joint venture between the Aditya Birla Groups and

the Sun Life Financial Services Inc. of Canada. The joint venture brings together the

Aditya Birla Groups experience in the Indian market and Sun Lifes global experience.

Since its inception in 1994, Birla Mutual Funds has emerged as one of Indias

leading mutual Fund with over Rs.16500 crores* of assets under management and an

investor base in excess of 8 lakhs. The fund offers a variety range of investment options,

which includes diversified and sector specific equity schemes, fund of fund schemes,

hybrid and monthly income funds, a wide range of debt and treasury products and

offshore funds.

BSLMAC is the first asset management company in India to be awarded the

coveted ISO 9001:2000 certification by DNV, Netherlands .BSLAMC also provides

private Wealth Management services. BSLMAC follows a long -term, fundamental

research based approach is to identify companies, which have excellent growth prospects

and strong fundamentals. The fundamentals include the quality of companys

management, sustainability of its business model and its competitive position amongst

other factors. Birla sun life Asset Management Company has the largest team of research

analysts in the industry, dedicated to tracking down the best companies to invest in.

Birla sun life AMC strives to provide transparent, ethical and research, based

investment and wealth management services.

Vision:



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To be the most trusted name investment and wealth management, to be the

preferred employer in the industry and to be a catalyst for growth and excellence of the

asset management business in India.

Mission:

To consistently pursue investors Wealth optimization by: Achieving superior and

consistent investment results.

Creating conducive environment to hone and retain talent. Providing customer

delight. Institutionalizing system-approach in all aspects of functioning. Upholding

highest standards of ethical values at all times.

Values:

Integrity

Commitment

Passion

Seamlessness

Speed.

Birla mutual funds were set up in the year 1994. It provides a range of investment

products on equity and fixed asset classes. It is one of the leading Mutual funds in India

and has recipient of various awards for its investment performance.

Heritage:

Birla Mutual funds is a joint venture between the Aditya Birla Group and Sun lifeFinancial Inc. of Canada. Birla Mutual fund offers a wide Range of top quality financial

services solutions for resident and non-resident Indians.

The Aditya Birla Group:



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The Aditya Birla Group is one of the Indias largest business houses. Global in

vision, rooted in Indian values the Group is driven by a performance Ethics pegged on

value creation for its multiple stake holders.

The Groups operations span 66 state of the art, straddling India. Thailand

Malaysia, Indonesia, Egypt. Philippines, Canada. Australia and China. Its revenues are in

excess of US$ 8.3 billion and it has a market capitalization of US$ 14 billion. The group

has 72,000 committed employees and over 7, 00.000 shareholders. The Aditya Birla

Group is a dominant player in all its areas of operations viz; Aluminium, Copper,

Cement, Viscose staple fiber, carbon black, Viscose filament yarn, Fertilizers, Insulators,

Sponge iron, Chemicals, Brand apparels, Insurance, Telecom, Mutual funds and Soft

ware.

The group has strategic joint venture with global majors such as Sunlife (Canada).

AT&T (USA), the TATA group and NGK Insulators (Japan), and has Ventured into BPO

sector with the acquisition of Transworks, a leading ITES/BPO company.

Sun life Financial:

Sun life Financial is a leading international financial services organization

providing a diverse range of wealth accumulation and protection products and services to

individuals and corporate customers. Charted in 1865, Sunlife financial and its partners

today have operations in key markets world wide, including Canada, the United States

the United Kingdom, Hong Kong, the Philippines, Japan, Indonesia, India, China.

Bermuda. As of 30 June 2005, the sunlife financial group of companies has total assets

under Management of CDN $ 400 billion.

Track Record:

With a proven record of 11 years, Birla Mutual funds has bee a catalyst towards

the growth of the private sector asset management business.

Innovations:



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Birla Mutual funds was first to launch Birla Cash Plus, a liquid fund. Birla

Dividend Yield Plus which is a Dividend yield fund. Birla Bond Index Fund (a debt index

fund) which replicates the Crisil Composite Bond Fund Index, has been assigned AAAF

rating by Crisil.

BSLAMC is the first asset management company in India to be awarded the

covered ISO 9001: 2000 certification by DNV. Netherlands.

Investment Philosophy:

Birla mutual funds follow a long term fundamental research based approach to

investments. The approach is to identify companies, which have excellence credit-

Worthiness and strong fundamentals. The fundamentals include the quality of theCompanies management sustainability of its business model and its competitive position.

Amongst other factors. Birla sunlife Asset Management Company amongst others

factors. Birla Sunlife Life Asset Management Company (BSLAMC). Has one of the

largest team of tracking down the best companies to invest in. BSLAMC will always

strive to provide transparent, ethical and research - based Investments and wealth

management services.

Geographical Reach:

Today, BSLAMC is present in 71 locations, including 22 branches.

Product offering:

Birla mutual fund offers a range of investment options , which include diversified

And sector specific equity schemes, fund - of- fund schemes, hybrid schemes, and

monthly income schemes , a wide range of debt and treasury products and offshore funds.BSLAMC also provides Private wealth Management services.

Effective Marketing Plan



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The tale of peddling services is as old as the hills. But never has a period in

business history seen such an aggressive marketing of services. No business

prognosticator could have forecast such a brutal fight for customer money, such a

struggle for existence and such revolutionary changes in the service industries to satiate

the escalating expectations of consumers. This is now true of the Mutual Fund industry.

The fact that the Mutual Fund industry can be viewed as a Service industry

makes it imperative to analyze the seven Ps of marketing which form the pillars of

modern day marketing strategies. These seven Ps must be carefully examined and

analyzed and the effective marketing plan must be made only by giving adequate

weightage to them. This analysis is done as under and has been supplemented by real life

examples.

In a Mutual Fund managerial efficiency and investment skills and know-how determine

returns to the investors. Successful Mutual Funds are those wherein marketing creates

confidence among potential investors and strengthens their desire to invest in the Fund.

Since Mutual Funds have greater characteristics of being a service rather than a Product,

there are 7 Ps associated with it. These are, therefore, the following elements of the

Marketing Mix:

(1) Product(2) Price

(3) Promotion

(4) Place

(5) People

(6) Processes

(7) Physical Evidence

Mutual Funds as a Service

Mutual Funds primarily sell a service to the investors The service of organizing

the pooling of resources, and managing assets and investments of the investors. They

mobilize funds from the investing public to manage funds efficiently, i.e., they create an



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expectation of good returns in the mind of the investors and generate a desire in them to

invest their money in Mutual Fund units / shares.

Mutual Funds are portrayed as products different from various other investment

options. While bank deposits offer assured returns, insurance companies sell contracts.

Equity shares of companies give returns based on their operations. Mutual Funds on the

other hand sell on the proposition that returns are hedged against various risks and

depend on the investment skills and efficiency of the MF managers.

Successful mutual fund marketing, therefore, must create confidence among

potential investors and strengthen their desire to put their money with a particular fund. It

is not only publicity talking skills and public relations that will strengthen confidence, but

also evidence of good performance. Additionally, Organizational image, visibility of

operational policies and quality of management form an indirect part of Mutual fund

marketing.

In case of Mutual funds, unit certificates, which are proofs of the ownership,

nothing but the service provided by the professional portfolio managers who manage the

investments signifying the mutual fund units.

While intangibility means that services cannot be displayed, physically

demonstrated or illustrated, heterogeneity means that consumers cannot be certain about

performance on any given day.

These inherent properties of services lead them to possess very few search

qualities (the attributes that a customer can determine before purchasing a product like

color, style, feel, smell etc) and more of experience qualities (for their attributes cannot

be known or assessed until they have been purchased and consumed) and credence

qualities (the characteristics that the consumer may find impossible to evaluate even after

purchase and consumption). The services of an Asset management company of a MF arenot tangible, displayable or easily communicable to the investors. Thus, assessing the

quality of the services is difficult. Moreover, customer satisfaction is dependent on a

factor called inseparability of production and consumption that is important in the case of

Mutual funds where the units are first produced and then sold and invested in and hence

consumed simultaneously, thereby affecting the perception of the quality of service.



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The service aspect also has implications for Perishibility. The services provided

by the Mutual fund cannot be saved, stored, resold or returned. The implication of this is

that the Mutual fund managers find it difficult to forecast demand and plan creatively for

capacity utilization in terms of services. All such factors make selling of mutual funds as

services more complicated than ever. And to meet the challenging task of penetrating the

markets deeper and winning over the customers, in the face of heavy competition, it has

become imperative for the market players to sensibly tangibilise their services by correct

positioning and effective communication of the core benefit.

Some of the aspects that need to be kept studied are enumerated as under. These apply to

all services in general and hence are of relevance to the Mutual Fund industry as well.

Positioning

Service positioning is useful in establishing a new service image as well as for

maintaining and repositioning existing services. Some of the instances are as follows:

Service is considered to be successfully positioned if it establishes and strives hard to

maintain a distinctive and desirable place for itself in the consumers mind in relation to

the other competing organizations and offerings. Organizations may choose to focus on

one or more of the four dimensions of service quality in developing effective position viz.

reliability, responsiveness, assurance, empathy.

Reliability: Reliability can work well as an effective dimension of positioning

service as long as it can be maintained as a distinguishing characteristic feature among

their competitors.

Responsiveness: Mutual funds are increasingly realizing the need for focusing on

responsiveness by responding to the desires of the customers by prompt, willing-to

help value added services.



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Assurance: This factor is used effectively in the industries where trust and

confidence in the service provider are particularly critical. As in the case of MFs, which

frequently use assurance-based advertising tag lines to build customer confidence.

Empathy: Firms can position themselves on empathy, which caters to customers

desire for individualized attention. In a Mutual Fund managerial efficiency and

investment skills and know-how determine returns to the investors. Successful Mutual

Funds are those wherein marketing creates confidence among potential investors and

strengthens their desire to invest in the fund.

Since Mutual Funds have greater characteristics of being a service rather than a

product, there are 7 Ps associated with it.

OPTIONS AND VALUE-ADDED SERVICES:

Thanks to the heightened competition in the mutual fund industry, mutual funds now

offer various options and value-added services to attract and retain customers.

Options:

With respect to a number of schemes, mutual funds offer the following: dividend and

growth options, systematic investment plan, and systematic withdrawal plan.

i. Dividend and growth options when you join a scheme, you can choose the dividend

option or the growth option. Under the dividend option, the gains of the scheme are

paid out at regular intervals in the form of dividends. Funds may offer daily,

weekly, monthly, and quarterly, half-yearly, and annual dividend options.

ii. Under the growth option, investment gains are ploughed back into the scheme and

no dividends are declared. Though the returns from both the dividend and growth

options will be the same, the tax implications may be different.

iii. Systematic investment plan under the systematic investment plan (SIP), the investor

can invest regular sums of money every month to buy units of a mutual fund

scheme. As the investment is made regularly, the investor buys more units when the

price is low and fewer units when the price is high.



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iv. A systematic withdrawal plan (SWP) works like a systematic investment plan in the

opposite direction. The SWP allows the investor to withdraw a fixed amount every

month.

Value-added services:

Mutual funds offer value-added services like redemption over phone, triggers and alerts,

cheque book facility, and new points of purchase.

i. Redemption over phone for example offers investors the facility of making a

redemption request or switch between schemes over the phone.

ii. Cheque book facility Fund houses take few days to process a redemption request

and then further time is lost when the redemption cheque is in transit. To cut

down this delay, some fund houses give investors in certain schemes (typically

debt schemes), the some limit, at the time of investment itself. Encashment of the

cheque is deemed as withdrawal, at the schemes NAV on the day the cheque is

deposited.

iii. Sending messages through mobile phone regarding changes that happened in the

schemes.

BIRLA SUNLIFECUSTOMER SERVICE

Online Services

Transact Online. Its really simple.

It's time you experienced the ease and convenience of transacting online. You can

now purchase, redeem or switch your units Birla sunlife mutual fund schemes at

Www.Birlasunlifemutualfund.com. You can also check your account statement, fill in

and submit the application form as well as view and download Offer Documents. You

can do all this from the comfort of your home or office. Here is a simple step-by-step

online transaction guide that will help you get started.



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employees and Institutional Investors .The Mutual fund customers are risk averse .They

expect high returns from less risk .Customers have different views regarding Mutual fund

investments . They are in dilemma whether to invest in Bear market or Bull market. The

investment objective is varies from customers to customers. There are different objectives

like Growth Fund, Income Fund, and Balance Fund. Met some customers and got

feedback about Birla sunlife mutual fund from them.



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DATA ANALYSIS

Age profile:

The age group of a person is a very important factor of determining the risk taking

ability of an investor. Every investor has a different method of investment based on their

requirement, necessity and desire and sometimes their age could be a basis in determining

this. An investor, who is around the age of 20 to 30 years, can possibly take more risk

than an investor who is above 50. Considering that an investor around the age of 30

would have a fixed or stable income and an investor above 50 is usually retired.

Moreover an investor around the age of 30 might have young youth so he can still take

more risk than a person around 50 might have young children of manageable age. Of

course, this is just a general understanding of people of different ages out not necessarily

have to be the same.

This question was designed to get a feedback of the investment preferences and

the patterns and the ways an investor would invest based on his/her age.

DIFFERENT AGE GROUP OF THE RESPONDENTS

TABLE-1

AGE NO OF RESPONDENTS (%)20-30 18%

30-40 46%

40-50 24%

50 & above 12%

CHART-1



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Number of respondents

20-

30-

40-

50

Inference:As from the chart, it can be analyzed that 18% of the respondents are in the

age group of 20-30 years, 46% of them are between 30-40 years, 24% of the respondents

are in the range of 40-50 years and 12% of the respondents are above 50 years.

Annual income:

The annual income of a person is very important factor to determining the

investment profile and risk taking of an investor. Every investor has different method of

investment based on their requirement, necessity and desire and sometimes for this the

annual income would be a basis in determining this. An investor, whos annual income is

around Rs. 3,00,000 and above, they can be possibly take more risk and different

investment profile than an investor whos income is around 1,00,000 or below

considering that an investor would have a fixed or stable income the fund manager may

suggest him a good fund. A person around the category of Rs.1,00,000 to 2,00,000 and

2,00,000 to 3,00,000 their main intention is to save his money for a future deficits. So

naturally their investment habits and investment ideas vary with the annual income

category. Of course, this is just a general understanding of people of different annual

income group but not necessarily have to be the same.



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This question was designed to get a feedback of the investment preferences and

the patterns and ways an investor would invest based on his/her annual income

ANNUAL INCOME OF INVESTORS

TABLE-2

6

28

38

28

0 10 20 30 40

below 1lac

1lac-2lac

2lac-3lac

above 3lac

ANNUAL INCOME OF INVESTORS

below 1lac 1lac-2lac 2lac-3lac above 3lac


Annual income No. of respondents (%)Below 1,00,000 6%

1,00,000-2,00,000 28%

2,00,000-3,00,000 38%

Above 3,00,000 28%


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Inference: As from the graph and table number, it can be analyzed that 6% of the

investors annual income is below 1lakh, 28% of the investors annual income ranges from

1-2lakhs, 38% of them have 2-3lakhs annual income, and 28% of them are having above

3lakhs annual income. It can be inferred that most of the respondents, i.e., 38% draw an

annual income that ranges from 2-3lakhs.

Occupation profile:

Investors come from all walks of life with different occupations and different

professions. So they should be classified under different categories and different classesdepending on their job, occupation, income levels, status etc. Investors cannot be

generalized and put under one class and category.

Hence this question would give us the feedback as to what occupation does the

investor belong to. By this we could also know a little background of the investor and

assume how much income would probably be earning.

The options given under this question were:

a) Governmentb) Professionalc) Retiredd) Businessmane) Others

INVESTORS OCCUPATION

TABLE-3

Occupation No of investors (%)Government 14%

Professional 26%

Retired 4%

Businessmen 28%

Others 28%



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2828

4

26

14

government professional retired

investors 14 26 4 28 28

gover profes retired busine others

Inference: As from the graph and table, it can be analyzed that 28% of businessmen

invested, because of tax benefit.26% of them are professionals, 14% of them are

government persons, 28% of them are different fields and 4% of respondents are retired

persons.

DURATION OF INVESTMENT:

One of the important questions that arise in the investors mind before investing is

regarding the duration of the investment. The duration of investments usually depends on

the age factor. It also depends on the performance of the fund.

The purpose of this question was to get an idea of how long the people would invest in a

security.

The options given under this question were:

1) Less than one year

2) 1-3 years

3) 3-5 years

4) More than 5 years



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TABLE-4

Duration No. of respondents Percentage levelLess than 1year 9 15%

1-3 years 15 25%

3-5 years 16 27%

More than 5 years 20 33%

Total number ofrespondents

60 100%

Duration of investment

15%

25%27%

33%

0%

5%

10%

15%

20%

25%

30%

35%

Less than

1year

1-3 years 3-5 years More than 5

years

Duration

Percentage

lev



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PREFERRED FUND STRUCTURE

TABLE-5

NUMBER OF INVESTORS PREFERRED FUND

Inference: It is observed that 32 out of 50 that are 64% of investors are interested to

invest their money in open ended funds the reason can be attributed to its convenience to


Structure of the fund No of investors preferred (%)Open-ended fund 64%

Close-ended fund 24%

Interval fund 12%

0

20

40

60

80

respondents

respondents 64 24 12

open close interval


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enter and exit at any time. 24% investors preferred to invest in close ended funds because

they are long term investors as well as they want some tax benefits. And the remaining

12% investors replied that they dont mind to invest in any funds including interval fund.

INVESTORS SCHEME PREFERENCE

TABLE-6

Fund scheme No of investors (%)

Growth scheme 52%

Income scheme 16%

Balanced Scheme 32%


INVESTORS PREFERRED SCHEME

investors, 52%

investors, 16%

investors , 32%

growth income balance


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Inference: In the above given graph it is showed that26 out of 50 that are 52% of

customers are interested to invest in growth schemes. 32% of customers are interested to

invest in balanced schemes and the remaining 16% customers are preferred to invest in

Income schemes.

INVESTORS FUND PREFERENCE

TABLE-7

tax

saver

indexsectorial

0

10

20

30

40

50

tax

inde

sect

respondent 50 20 30

tax

saverindex

secto

rial

Inference: Out of 50 investors 25 that is 50% of customers are preferred to invest in Tax

saver funds. 10 that is 20% of investors are preferred to invest in index funds which give

returns based upon respective indexes..15 that is 30% of investors are interested to invest

in Sectorial funds that means they are ready to take high risk but want high returns.


FUND NO OF INVESTORS (%)

Tax saver fund 50

Index fund 20

Sectorial fund 30


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Repeating of Investment made by the respondents

TABLE-8

Repeating of investment Investors response (%)

Yes 78%No 22%

Inference: As from the chart and table number, it can be analyzed that most of the

respondents, i.e., 78% of them invest on regular basis, because those who invest

repeatedly, know about the market cycle and 22% of them do not invest. Because of

market risk, they are able to tolerate market up and downs.

GETTING MONTHLY / QUARTERLY STATEMENTS FROM TIME


REPEATION OF INVESTMENT

78%

22%

ye s no


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TO TIME

TABLE-9

GETTING MMONTHLY/QUARTERLY

STATEMENTS FROM TIME TO TIME

NO OF INVESTORS

YES 76

NO 24

YES

NO

0

20

40

60

80

INVESTORS 76 24

YES NO

INFERENCE: 70% of the investors getting monthly/quarterly statements and 30% of

the investors not getting monthly/quarterly statements from time to time.



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TEMPORARY DECLINE OF INVESTMENT TOLERATED BY

INVESTORS

TABLE-10

DECLINE INVESTORS (%)NO DECLINE 22%

5%-10% 34%

10%-15% 30%

15% ABOVE 14%

0%

50%

investors 22% 34% 30% 14%

nodecline 5%-10% 10%-15% 15%

Inference: as per the study and graph 22% of the investors cannot tolerate decline.

Because they always look for increase, 34% of the investors can tolerate 5-10% decline,

30% investors can tolerate 10%-15% decline and 14% of investors tolerate decline of

more than 15%.



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RESPONSE REGARDIND AREAS FOR IMPROVEMENT BY BIRLA SUN LIFE

MUTUAL FUND

TABLE-11

AREAS IMPROVEMENT

34%

32%

28%

6%


AREAS NO OF RESPONDENTS (%)

CUSTOMER SERVICE 34%

MONITORING FUND 32%

AGENTS TRAINING 28%

OTHERS 6%


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Inference: as per the survey 34% of the investors prefer good service, 32% of them are

prefer monitoring of fund, 28% of them are looked at agents training. 6% of them are

recommended other services such as ATM and others.

REDEMPTION FACILITY SATISFACTION OF THE CUSTOMERS

TABLE-12

SATISFACTION ABOUT REDEMPTION

FACILITY

NO OF INVESTORS

YES 84%

NO 16%

84% YES NO

Inference: As per the survey 84% of the investors have satisfied with redemption

facility provided by Birla sun Life Mutual fund.16% of them are not satisfied with

redemptions facility, because it takes longer time and delay of the process.



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RESPONSE REGARDING USAGE OF VALUE ADDED SERVICE

PROVIDED BY MUTUAL FUND

Table-13

VALUE ADDED SERVICE NO OF RESPONDENTS (%)

ATM 0

Ecs 42

Online transaction 20

Direct investment 38

ATM, 0

Ecs, 42

online, 20

Direct, 38

0

10

20

30

40

50

ATM Ecs online Direct

no of respondents

ATM Ecs online Direct

Inference: Most of the investors are making use of value added services of Ecs and

direct investment, few of the customers make use online transaction.

OPINION ON BIRLA SUN LIFE MUTUAL FUND

PERFORMANCE

TABLE-14



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PERFORMANCE OF THE COMPANY OPINION OF INVESTORS

EXCELLENT 18%

GOOD 50%

BETTER 22%

BAD 10%

EXCELLEN

T

GOOD

BETTERBAD

0

20

40

60

OPINION OF INVESTORS

EXCELLENT GOOD BETTER BAD

INVESTORS

OPINION

18 50 22 10

EXCEL GOOD BETTE BAD

Inference: As per the graph and survey 50% of the majority investors opinion is

GOOD, 22% of investors opinions are BETTER performance by the company,

18% of the investors opinion EXCELLENT and of them gave BAD opinion.

FINDINGS


Birla Project,(Mahesh.S)

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