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A PROJECT REPORTA PROJECT REPORT

ONON

ANALYSE THE BEHAVIOUR OFANALYSE THE BEHAVIOUR OF

INVESTORSINVESTORS

&&

PROMOTION OFPROMOTION OF

RELIANCE MUTUAL FUNDRELIANCE MUTUAL FUND

Undergone at Reliance Mutual Fund

(Jaipur)

Submitted to Submitted by

Dr. Seema sharma Hitesh Pareek

UNIVERSITY.

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Anil Dhirubhai Ambani Group

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ACKNOWLEDGEMENT

Ones mind, once stretched by a new idea; never regains its original

dimensions

-Oliver Windell Holmes

The project report prepared by us though bears our name alone but is actually

a collective effort. I am indeed indebted to a lot of people and their names

surely deserve to be mentioned.

With due indebtedness, I am grateful to Mr. Sanjeev Sharma(Branch

Manager) & Mr. Ashish purohit(Regional Manager) for giving me an

opportunity to work on the project.

Further, I extend my gratefulness to Mr. Alok Shrivastav from operation

department for their regular guidance in the project and to sharpen my rough

edges from time to time.

I would also like to extend my sincere gratitude to the entire family of

RELIANCE Mutual Fund, Jaipur for giving me inspiration, guidance and

support throughout this project.

I would also like to thank my faculty staff for their moral support & intellectual

guidance throughout the project.

Hitesh Pareek

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PREFACE

Theories are being developed, designed and stated on the groundwork of their

practical implementation and usage. Work experience seems to be the most

effective and indispensable factor of making an individual an adept. This is

because one can not do without being exposed to varying circumstances and

possible consequences. Training not only develops individual skills and

abilities but also provides proficiency in work performance.

This report is the outcome of 60 working days of Branch Office of Reliancemutual fund, at Jaipur, on the topic Analyze the Behavior Of Investor &

promotion Of Reliance Mutual Fund which constitute an essential part of

three years BBA program. The idea & intention of taking training in this field to

came up to me because of tremendous changes in banking services.

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EXECUTIVE SUMMARY

TITLE OF PROJECT Analysis The Behavior Of Investor &

Promotion Of Reliance Mutual Fund

COMPANY NAME Reliance Capital Asset Management Ltd.

DURATION 60 days

GUIDE Mr.ashish purohit

The main objective to study The Analysis The Behavior Of Investor &

Promotion Of Reliance Mutual Fund to know about the market position of the

Reliance Mutual Funds to the opinion of customers and respondents about the

Reliance Mutual Fund as well as the marketing & promotion of Reliance

Mutual Fund. The respondents were the customers as well as the non-

customers.

The project titled "To Analysis the Behavior of Investors and Promotion of

Reliance Mutual Funds" is encountered by keen competition. In such a

scenario my study is limited to explore the possibilities of trapping the

competitive market. This is covered under the study is confined to Jaipur.

To make People aware of Reliance Mutual Fund.

To promote Reliance Mutual Fund.

To study the behavior of market.

To study the behavior of investors & general Mass.

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INDEX

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S.No. TOPIC

1)Company introduction

About Reliance Group

Reliance capital asset management ltd

2) Brief of mutual fund

What is mutual fun

3)

Mutual Fund Industry in india

Introduction

About Reliance Mutual Fund Schemes

4)Research Methodology

5)Data collection & Analysis

6)SWOT Analysis

7)Conclusion

8)Limitation

9)Recommendation

10

) Questionnaire

11

) Bibliography

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COMPANY INTRODUCTION

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ABOUT RELIANCE GROUP

The Reliance Group founded by Dhirubhai H. Ambani (1932-2002) is India's

largest business house with total revenues of over Rs 99,000 crore (US$ 22.6

billion), cash profit of Rs 12,500 crore (US$ 2.8 billion), net profit of Rs 6,200

crore (US$ 1.4 billion) and exports of Rs 15,900 crore.

The Group's activities span exploration and production (E&P) of oil and gas,

refining and marketing, petrochemicals (polyester, polymers, and

intermediates), textiles, financial services and insurance, power, telecom and

infocom initiatives.

The Group exports its products to more than 100 countries the world over.

Reliance emerged as India's Most Admired Business House, for the third

successive year in a TNS Mode survey for 2003.

Reliance Group revenue is equivalent to about 3.5% of India's GDP. The

Group contributes nearly 10% of the country's indirect tax revenues and over

6% of India's exports. Reliance is trusted by an investor family of over 3.1

million - India's largest.

THE GROUP CONTRIBUTES

5 per cent of India's total exports

10 per cent of the Government of India's indirect tax revenues

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COMPANY STRUCTURE

RELIANCE INDUSTRIES LTD. ALONE ACCOUNTS FOR

30 per cent of the total profits of the private sector in India

10 per cent of the profits of the entire corporate sector in India

7 per cent of the total market capitalization in India

Weightage of 15 per cent in the BSE Sensex

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Weightage of 12 per cent in the Nifty Index

RELIANCE INDUSTRIES LIMITED

Reliance Industries Limited (RIL) is India's largest private sector company on

all major financial parameters with gross turnover of Rs 74,418 crore (US$ 17

billion), cash profit of Rs 9,197 crore (US$ 2.1 billion), net profit of Rs 5,160

crore (US$ 1.2 billion), net worth of Rs 34,452 crore (US$ 7.9 billion) and total

assets of Rs 71,157 crore (US$ 16.3 billion).

RIL emerged as the only Indian Company in the list of global companies that

create most value for their shareholders, published by financial Times based

on a global survey and research conducted by PricewaterhouseCoopers in

2004. RIL features in the Forbes Global list of world's 400 best big companies

and in FT Global 500 list of world's largest companies.

RELIANCE CAPITAL ASSET MANAGEMENT LTD.

Reliance Capital Asset Management Ltd. is a wholly owned subsidiary of

Reliance Capital Limited, the sponsor. Reliance Capital Ltd. holds the entire

paid-up capital (100%) of Reliance Capital Asset Management Ltd.

Reliance Industries Ltd. has promoted reliance Mutual Fund (RMF) has beensponsored by Reliance Capital Ltd., one of India's largest private sector

enterprises.

Reliance Industries Ltd. has a net worth of Rs.34, 452 crores as on March31,

2004 and currently has a large family of shareholders.

Reliance Capital limited is a Non Banking Finance Company engaged in

leasing, investment and other fund based activities. The net worth of Reliance

Capital Ltd. is Rs. 1,399.81 crores as on March 31, 2004

Reliance Capital Ltd. has contributed Rupees One Lac as the initial

contribution to the corpus for the setting up of the Mutual Fund.

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Reliance Capital Ltd. is responsible for discharging its functions and

responsibilities towards the Fund in accordance with the Securities and

Exchange Board of India (SEBI) Regulations.

The Sponsor is not responsible or liable for any loss resulting from theoperation of the Scheme beyond the contribution of an amount of Rupees one

Lac made by them towards the initial corpus for setting up the Fund and such

other accretions and additions to the corpus.

Reliance Capital Asset Management Ltd. (RCAM), a company registered

under the Companies Act, 1956 was appointed to act as the Investment

Manager of Reliance Capital Mutual Fund.

It is a wholly owned subsidiary of Reliance Capital Ltd.

Reliance Capital Asset Management Ltd. was approved as the Asset

Management Company for the Mutual Fund by SEBI vide letter no

IIMARP/265/95 dated February 1, 1995.

The Mutual Fund has entered into an Investment Management Agreement

(IMA) with RCAM dated May 12, 1995 and was amended on August 12, 1997

in line with SEBI (Mutual Funds) Regulations, 1996.

Pursuant to this IMA, RCAM will act as Investment Manager of the Mutual

Fund. The net worth of the Asset Management Company as on 30th June 2005

is Rs. 9907.89 crores.

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BRIEF OF MUTUAL FUND

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Mutual Fund

Mutual fund is a mechanism for pooling the resources by issuing

units to the investors and investing funds in securities according to the

objective.

A mutual fund is created when investors put their money together a pool of

the investors funds. The most important characteristic of a mutual fund is that

the contributors and the beneficiaries of the fund are the same class of people,

namely the investors.

The term mutual means that investors contribute to the pool, and also benefit

from the pool. There are no other claimants to the funds. The pool of funds

held mutually by investors is the mutual fund.

A mutual funds business is to invest the funds thus collected, according to the

wishes of the investors who created the pool. In many markets these wishes

are articulated as investment mandates.

Usually, the investors appoint professional investment managers create a

product, and offer it for investment to the investor.

For e.g., a mutual fund, which sells a money market mutual fund, is actually

seeking investors willing to invest in a pool that would invest predominantly in

money market instruments.

Mutual funds issues units to investors in accordance with quantum of money

invested by them.

A mutual fund is required to be registered with SEBI, which regulates markets

before it can collect funds from the public.

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What is a mutual fund?

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.

Important Characteristics of a Mutual Fund

1- A mutual fund actually belongs to the investors who have pooled

their funds is in the hands of the investors.

2- Investment professionals and other service providers, who earn

a free for their services, from the fund, manage a mutual fund.

3- The pool of funds invested in a portfolio of marketable

investments. The value of the portfolio is updated every day.

4- The investors share in the fund is denominated by units. The

value of the units changes in the portfolios value, every day.

The value of one unit of investment is called as the net asset

value of NAV.

5- The investment portfolio of the mutual fund is created according

to the stated investment objectives of the fund.

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SET UP OF A MUTUAL FUND

A mutual fund set up in the form of a trust, which has sponsor, trustees, Asset

Management Company (AMC) and custodian.

The trust is established by a sponsor or more than one sponsor who is like

promoter of a company.

The trustees of the mutual fund hold its property for the benefit of the

unitholders. Asset Management Company approved by SEBI manages the

funds by making investments in various types of securities.

Custodian, who is registered with SEBI, holds the securities of variousschemes of the fund in its custody.

The trustees are vested with the general power of superintendence and

direction over AMC. They monitor the performance and compliance of SEBI

Regulations by the mutual fund.

Mutual Fund Structure:

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The structure consists of:

Sponsor:

Sponsor is the person who acting alone or in combination with another body

corporate establishes a mutual fund. Sponsor must contribute at least 40% of

the net worth of the Investment Managed and meet the eligibility criteria

prescribed under the Securities and Exchange Board of India (Mutual Funds)

Regulations, 1996.

The Sponsor is not responsible or liable for any loss or shortfall resulting from

the operation of the Schemes beyond the initial contribution made by it

towards setting up of the Mutual Fund.

Trust:

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The Mutual Fund is constituted as a trust in accordance with the provisions of

the Indian Trusts Act, 1882 by the Sponsor. The trust deed is registered under

the Indian Registration Act, 1908.

Trustee:

Trustee is usually a company (corporate body) or a Board of Trustees (body of

individuals). The main responsibility of the Trustee is to safeguard the interest

of the unit holder and internally ensure that the AMC functions in the interest

of investors and in accordance with the Securities and Exchange Board of

India (Mutual Funds) Regulations, 1996, the provisions of the Trust Deed and

the Offer Documents of the respective Schemes. At least 2/3rd directors of the

directors who are not associated with the Sponsor in any manner.

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Asset Management Company (AMC):

The AMC is appointed by the Trustee as the Investment Manager of the

Mutual Fund. The AMC is required to be approved by the Securities and

Exchange Board of India (SEBI) to act as an asset management company of

the Mutual Fund.

At least 50% of the directors of the AMC are independent directors who are

not associated with the Sponsor in any manner. The AMC must have a net

worth of at least 10 crore at all times.

Registrar and Transfer Agent:

The AMC if so authorized by the Trust Deed appoints the Registrar andTransfer Agent to the Mutual Fund.

The Registrar processes the application form, redemption requests and

dispatches account statements to the unit holders. The Registrar and Transfer

agent also handles communications with investors and updates investor

records.

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TYPES OF MUTUAL FUNDS

Mutual Funds schemes may be classified on the basis of its structure

and its investment objectives.

I Open-ended Funds/Schemes

An open ended fund or schemes is one tha t is ava ilab le 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 that are declared on a daily

basis. The key feature of open-end scheme is liquidity.

II Close ended Funds/ Schemes

A closed ended fund or scheme has a stipulated maturity period of 5-7

year. The fund is open for subscription only during a specified period at the

time of launch of the scheme. They can buy or sell the units of the scheme

On the stock exchange 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 periodic repurchase of NAV

related prices SEBI Regulations stipulate that at least one of the two exit

route is provided to the investor i.e. either repurchase facility or through

listing on stock exchange.

III. Interval Funds

These funds combine the feature of both open ended and close ended

funds wherein the fund is close ended for the first couple of years and

open ended thereafter. Some funds allows fresh subscription and

redemption at fixed times every year (say every six months) in order to

reduce the administrator aspects of daily entry or exit yet providing

reasonable liquidity.

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4 By Investment Objective:

A scheme can be also be classified as growth scheme income scheme,

or balanced scheme considering its investment objective. Such scheme

may be

I. Growth / Equity Oriented Schemes

The aim of the 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.

II. Income / Debt Oriented Schemes

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 debenture, Government Securities and money

market instruments. Such funds are less risky compare to equityschemes. The Net Asset Values of such funds are affected because of

change in interest rate in the country.

III Balanced Funds

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

such as 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.

However, Net Asset Values of such funds are likely to be same volatile

compared to pure-equity funds.

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IV. Money Market / Liquid Funds

These funds are also income funds and their aim is to provide easy

liquidity presentation of capital and moderate income. These schemes

invest exclusively in safer short-term instruments such as treasury bills,

certificates of deposits, 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 shot periods.

V. Gilt Funds

These funds invest exclusively in Government securi ties .

Government securities have no default risk.

Net Asset Values of these schemes also fluctuate due to changes in

invest rates and other economic factors as in the case with income or

debt oriented schemes

VI. Load Funds

A load fund is one that changes 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 or exit loads range from 1% to 20%.

VII. No-Load Funds

A No-load fund is one that does not change a commission for entry or

exit. That is no commission is payable on sale or purchase of units in the

fund.

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* Other Schemes

I. Tax Saving Fund/ Schemes

These funds offer tax benefits to investors under the Income Tax Act

opportunities provided under these schemes are in the form of tax rebates

U/S 88 as well as saving in Capital Gains U/S54EA and 54EB. Investments

made in Equity Linked Saving allowed as deduction U/S 88 of the Income

Tax Act, 1961.

They are rests suited for investors seeking tax concessions.

II. Index Funds

Index fund replicate the portfolio of a particular index such as 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 index, though not

exactly by the same percentage due to some factors known as "tracking

error" in technical terms.

III. Industry specific Schemes

Industry Specific Schemes invest only in the industry specified in the offer

document. The investment of these funds is limited to specific industries like

Info. Tech, FMCG, Pharmaceuticals, etc.

Index fund replicate the portfolio of a particular index such as 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 index, though not exactly by the same percentage due to somefactors known as "tracking error" in technical terms.

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Terms associated with mutual fund

Net Asset Value (NAV)

The net asset value of the fund is the cumulative market value of the assets

fund net of its liabilities.

In other words, if the fund is dissolved or liquidated, by selling off all the assets

in the fund, this is the amount that the shareholders would collectively own.

This gives rise to the concept of net asset value per unit, which is the value,

represented by the ownership of one unit in the fund. It is calculated simply by

dividing the net asset value of the fund by the number of units. However, most

people refer loosely to the NAV per unit as NAV, ignoring the "per unit". We

also abide by the same convention.

Calculation of NAV

The most important part of the calculation is the valuation of the assets owned

by the fund. Once it is calculated, the NAV is simply the net value of assets

divided by the number of units outstanding. The detailed methodology for the

calculation of the asset value is given below.

Asset value is equal to

Sum of market value of shares/debentures

+ Liquid assets/cash held, if any

+ Dividends/interest accrued

Amount due on unpaid assets

Expenses accrued but not paid

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Details on the above items

For liquid shares/debentures, valuation is done on the basis of the last or

closing market price on the principal exchange where the security is tradedFor

illiquid and unlisted and/or thinly traded shares/debentures, the value has to

be estimated. For shares, this could be the book value per share or an

estimated market price if suitable benchmarks are available. For debentures

and bonds, value is estimated on the basis of yields of comparable liquid

securities after adjusting for illiquidity. The value of fixed interest bearing

securities moves in a direction opposite to interest rate changes Valuation of

debentures and bonds is a big problem since most of them are unlisted and

thinly traded. This gives considerable leeway to the AMCs on valuation and

some of the AMCs are believed to take advantage of this and adopt flexible

valuation policies depending on the situation.

Loads:

Entry Load/Sale Load

Thus, the investor has to pay for the value of the units plus an additionalcharge. This additional charge is called the entry/sale load.

Exit Load/Repurchase Load

It is the charge imposed on the investor at the time of his exit from the

scheme. Operationally, therefore, the mutual fund will pay back to the investor

the value of the units reduced by the charge levied on exit.

Contingent Deferred Sales Charge

A mutual fund may not want to charge an exit load in all the cases. In such a

case the mutual fund may impose charges based on the time of withdrawal.

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Thus, a fund desirous of long-term investors may stipulate that the exit charge

will keep reducing with duration of investment.

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Such a charge is called Contingent Deferred Sales Charge. The asset

management company is entitled to levy a contingent deferred sales charge

for redemption during the first four years after purchase, not exceeding 4% of

the redemption proceeds in the first year, 3% in the second year, 2% in thethird year and 1% in the fourth year. In order to charge a CDSC the scheme

has to be a no load scheme as per the regulation laid down by SEBI. The idea

behind charging CDSC is the recovery of expenses incurred on promotion or

distribution of the scheme

Switchover/Exchange Fee

It is the fees charged by a fund when the investor decides to switch his

investment from one scheme of the fund to another scheme from the same

fund family.

Recurring Expenses:

Apart from loads, mutual funds also charge some other expenses. Even here

regulations stipulate the ceiling on each head. Some of the fees charged by

the fund are:

Investment Management & Advisory Fees - As the name explains

this is meant to remunerate the asset management company for

managing the investor's money.

Trustee Fees - is the fees payable to the trustees for managing the

trust.

Custodian Fees - is the fees paid by the fund to its custodians, the

organization which handles the possession of the securities invested in

by the fund.

Registrar and Transfer Agents Charges - is the fees payable to the

registrar and the transfer agents for handling the formalities related to

the transfer of units and other related operations.

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Broker/Dealer Remuneration, Audit Fees, Cost of Funds Transfer,

Cost of providing a/c statements, Cost of Statutory

Advertisements.

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ASSET MANAGEMENT COMPANY (AMC)

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ASSET MANAGEMENT COMPANY (AMC)

Asset Management Company controls the operations and functioning of a

mutual fund. It is very critical to the performance of a mutual fund as it

decided on the style of functioning people who are going to manage the funds,

the commitment to service quality and overall supervision.

The financial strength and the commitment of the AMC sponsors to the

business are very key issue. This is because most AMC's lose money in the

first few years of operations. In most cases, these losses are much more

than the capital requirements stipulated by SEBI

Hence, a sponsor which is financially weak or which cannot capital to thebusiness either because of its inability or unwillingness will result in an

unhealthy operation. This is the last place where high quality persons would

want to remain and work.

The Asset Management Company then remains stunted and the sponsors lose

interest. The worst affected are the investors. This is exactly what has

happened with some AMC's promoted by Indian business houses.

OPTIONS AVAILABLE TO INVESTORS:

Each plan of every mutual fund has three options Growth, Dividend and

dividend reinvestment. Separate NAV are calculated for each scheme.

Dividend Option:

Under the dividend plan dividend are usually declared on quarterly or annual

basis. Mutual fund reserves the right to change the frequency of

dividend declared.

Dividend Reinvestment Option:

Instead of remittances of units through payouts, Units holder may choose to

invest the entire dividend in additional units of the scheme at NAV related

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prices of the next working day after the record date. No sales or entry load is

levied on dividend reinvest.

Growth Option:

Under this plan returns accrue to the investor in the form of capital

appreciation as reflected in the NAV. The scheme will not declare the dividend

under the Growth plan and investors who opt for this plan will not receive any

income from the scheme. Instead of income earned on their units will remain

invested within the scheme and will be reflected in the NAV.

Plans Available To Investors:

In Mutual Funds, other than one time investment, some other plans are

available for the investor today.

These are:

Systematic Investment Plan (SIP)

Systematic Transfer Plan (STP)

Systematic Withdrawal Plan (SWP)M

Systematic Investment Plan:

It is a disciplined way of investing, where an investor invests fixed amounts at

a regular frequency. Systematic Investment Plan is available for planned and

regular investments. Under this plan unit holders can benefit by investing

specified rupee amounts periodically for a continuous period.

This concept is called Rupee Cost Averaging. This program allows Unit

holders to save a fixed amount of rupees every month/ quarter by purchasing

additional units of the Scheme(s). Rupee cost averaging does not guarantee a

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profit or protect against a loss. Rupee cost averaging can smooth out the

markets ups and downs and reduce the risk of investing in volatile markets.

Rupee Cost Averaging

Month Amount One

Invests

NAV No. of Units

1 Rs. 1000 Rs. 10 100.00

2 Rs. 1000 Rs. 12 83.33

3 Rs. 1000 Rs. 10 100.00

4 Rs. 1000 Rs. 8 125.00

5 Rs. 1000 Rs. 10 100.00

Total Rs. 5000 Rs. 50 508.33

The Average NAV = 50/5 = Rs. 10

The Average Price = Total Investments / Total No. of Units

= 5000/508.33 = Rs. 9.84

What we see from the table is the fascinating aspect of Rupee Cost

Averaging. It makes us buy fewer units when the price is high and more units

when the price is low, thereby bringing down our average cost.

Systematic Transfer Plan:

The Systematic Transfer Plan gives investors the option of systematic transfer

of fixed amounts/ capital appreciation on a periodic basis to another Plan/

Scheme of the Mutual Fund. STP can availed of as a monthly or quarterly

basis from one plan to another plan in the same scheme or to another scheme

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within the fund All transfers will take place on the 30th/ 31st of every Month/

Quarter based on the NAV of that day.

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Systematic Withdrawal Plan:

SWP is a Tax efficient way of obtaining regular income. Investor can opt for

SWP for periodic withdrawal of sums from their accounts. Investor can opt for

any one of the following two options offered by the Schemes.

Fixed Amount Encashment

Under this facility, the unit holders can opt to redeem/ switch (transfer) fixed

amount of money from their accounts at periodic intervals.

Capital Appreciation Encashment

Under this facility, the unit holders can opt to redeem amounts equivalent to

the appreciation in their investment value at periodic intervals. Thus the

appreciation, if any, earned by the Scheme during the specified period shall be

automatically redeemed and paid to the investors at the Applicable NAV.

Presently this option is available only for investors in Growth Plan/Option

The amount thus withdrawn / switched shall be converted into units at the

Applicable NAV, subject to load, if any, and such units shall be subtracted

from the Unit balance of that unit holder. This facility shall be subject to the

terms and conditions contained in the SWP / STP enrollment form. The

Registrar may terminate SWP/ STP on receipt of appropriate notice from the

unit holder. It will terminate automatically if all Units are liquidated or

withdrawn from the account or upon the receipt of notification of death or

incapability of the Unit holder.

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HOW A MUTUAL FUND WORK

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Benefits of Mutual Fund

Reduction in risk:

Mutual funds invest in a portfolio of securities. This means that all funds are

not invested in the same Investment Avenue. Holding a portfolio that is

diversified across investment avenues is a wise way to manage risk.

Reduction in transaction costs:

Through the individual investors contribution may be small; the mutual fund

itself is large enough to be able to reduce costs in its transactions. These

benefits are passed on to the investors.

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Portfolio Diversification:

By offering readymade diversified portfolios, mutual fund enables investors to

hold diversified portfolios. Through investors can create their own diversified

portfolios.

Liquidity:

Open-ended funds are very liquid as the Mutual Fund companies offer an

open window for redemption on all working days.

Professional fund management:

Investing in markets requires both knowledge and expertise. Experienced fund

managers are able to trade or negotiate better deals, manage the price risk

effectively, exploit trends and opportunities and constantly monitor the

environment.

Tax efficiencies:

Investing in mutual funds is tax efficient. If investors choose the growth option

and stay invested for a year, they only pay long term Capital Gains of 20.4%

of indexed returns or 10.2% of un indexed returns (whichever is lower).

Diversification:

Diversification is the core of any investment strategy. It allows you to minimize

the risks associated with any investment. However, it is very difficult for

individuals to have the requisite diversification for your investment given

smaller portfolios and transaction costs

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MUTUAL FUND INDUSTRY IN INDIA

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MUTUAL FUND IN INDIA

UTI was the first mutual fund set up in India in the year 1963. In early 1990s

government allowed public sector banks and institutions to set up mutual fund.

In year 1992, SEBI Act was passed to protect the interest of investors in

securities and to promote the development of and to regulate the securities

market.

As far as mutual funds are concerned, SEBI formulates policies and regulates

the mutual funds to protect the interest of investors. SEBI notified regulationsfor the mutual fund in year 1993. Thereafter, mutual fund sponsored by private

sector entities was allowed to enter the capital market. The regulations were

fully revised in 1996 and have been amended thereafter from time to time.

SEBI has also issued guidelines to the mutual funds from time to time to

protect the interest of investors.

All investors whether promoted by public sector of private sector entities

including those promoted by foreign entities are governed by the same set ofregulations. There is no distinction in regulatory requirements for these mutual

funds and all are subject to monitoring and inspections by SEBI. The risks

associated with the schemes launched by the mutual funds sponsored by

these entities are of similar type. UTI is not registered with SEBI as mutual

funds.

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Distribution Under different

Categories Of Indian Mutual Industry

24%

36%3%

33%

2%

2%Income Funds

Growth Funds

Balanced Funds

Liquid/Money Market

Funds

Gilt Funds

ELSS Funds

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Views of the Investors if the stock

market crashed down

Withdraw

19%Invest

29%

Wait

52%

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HISTORY OF MUTUAL FUND IN INDIA

PHASE 1- 1964-87 (UTI)

MF Industry started in India in 1963 with formation of UTI.

Asset under management in 1987-88: Rs. 6700 crores

Launch of First scheme- US64

Followed by ULIP in 1971, CGGA (1986), Mastershare(1987)

UTI was the only player in the market enjoying monopoly position

Huge mobilization of funds.

PHASE II- 1987- 93 (Entry of Public Sector Funds)

Establishments of SBI MF the first non UTI MF.

Followed by Canbank MF, LIC MF, and BOI MF.

Change in the mindset of the investors

UTI was still the undisputed leader of the market.

PHASE III 1993-1996 (Emergency of Pvt.funds)

Entry of the Pvt. Sector funds in 1993

JV of foreign fund management companies with Indian promoters

Competition increased investors servicing techniques

Investors started becoming selective.

PHASE IV- (SEBI Regulation for MF) 1996

SEBI the regulatory authority

UTI comes under SEBI regulation voluntarily

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Governments step for investors protection

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SOME OF THE AMCs CURRENTLY OPERATING ARE

Name of the AMC Nature of ownership

Alliance Capital Asset Management (I) Private Limited Private foreign

Birla Sun Life Asset Management Company Limited Private Indian

Bank of Baroda Asset Management Company Limited Banks

Bank of India Asset Management Company Limited Banks

Canbank Investment Management Services Limited Banks

Cholamandalam Cazenove Asset Management Company

Limited

Private foreign

Dundee Asset Management Company Limited Private foreign

DSP Merrill Lynch Asset Management Company Limited Private foreign

Escorts Asset Management Limited Private Indian

First India Asset Management Limited Private Indian

GIC Asset Management Company Limited Institutions

IDBI Investment Management Company Limited Institutions

Indfund Management Limited Banks

ING Investment Asset Management Company Private

Limited

Private foreign

J M Capital Management Limited Private Indian

Jardine Fleming (I) Asset Management Limited Private foreign

Kotak Mahindra Asset Management Company Limited Private Indian

Kothari Pioneer Asset Management Company Limited Private Indian

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Jeevan Bima Sahayog Asset Management Company Ltd. Institutions

Morgan Stanley Asset Management Company Private

Limited

Private foreign

Punjab National Bank Asset Management Company LimitedBanks

Reliance Capital Asset Management Company Limited Private Indian

State Bank of India Funds Management Limited Banks

Shriram Asset Management Company Limited Private Indian

Sun F and C Asset Management (I) Private Limited Private foreign

Sundaram Newton Asset Management Company Limited Private foreign

Tata Asset Management Company Limited Private Indian

Credit Capital Asset Management Company Limited Private Indian

Templeton Asset Management (India) Private Limited Private foreign

Unit Trust of India Institutions

Zurich Asset Management Company (I) Limited Private foreign

SEBIS REGULATION

There was no uniform regulation of the mutual funds industry till a few years

ago. The UTI was regulated by a special Act of Parliament while funds

promoted by public sector banks were subject to RBI Guidelines of July 1989.

The Securities & Exchange Board of India (SEBI) was formed in 1993 as a

capital market regulator.

One of its responsibilities was to regulate the mutual fund industry and it cameup with comprehensive regulations for the industry in 1993. The rules for the

formation, administration and management of mutual funds in India were

clearly laid down. Regulations also prescribed disclosure requirements.

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The regulations were thoroughly reviewed and re-notified in December 1996.

The revised guidelines tighten the accounting and disclosure requirements in

line with recommendations of The Expert Committee on Accounting Policies,

Net Asset Values and Pricing of Mutual Funds.

The SEBI (Mutual Funds) Regulations, 1996 have been further amended in

1997, 1998 and 1999. Today, all mutual funds are regulated by SEBI. Efforts

have been made to bring UTI schemes under SEBI's ambit with the result that

all schemes, with the exception of Unit 64, are now regulated by the capital

market regulator.

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Regulatory Aspects

Schemes of a Mutual Fund

The asset management company shall launch no scheme unless the

trustees approve such scheme and a copy of the offer document has

been filed with the Board.

Every mutual fund shall along with the offer document of each scheme

pay filing fees.

The offer document shall contain disclosures which are adequate in

order to enable the investors to make informed investment decision

including the disclosure on maximum investments proposed to be made

by the scheme in the listed securities of the group companies of the

sponsor A close-ended scheme shall be fully redeemed at the end of

the maturity period. "Unless a majority of the unit holders otherwise

decide for its rollover by passing a resolution".

The mutual fund and asset management company shall be liable to

refund the application money to the applicants,-

(i) If the mutual fund fails to receive the minimum subscription

amount referred to in clause (a) of sub-regulation (1);

(ii) If the moneys received from the applicants for units are in

excess of subscription as referred to in clause (b) of sub-

regulation(1).

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Rules Regarding Advertisement:

The offer document and advertisement materials shall not be misleading or

contain any statement or opinion, which are incorrect or false.

Investment Objectives and Valuation Policies:

The price at which the units may be subscribed or sold and the price at

which such units may at any time be repurchased by the mutual fund

shall be made available to the investors.

General Obligations:

Every asset management company for each scheme shall keep and maintain

proper books of accounts, records and documents, for each scheme so as to

explain its transactions and to disclose at any point of time the financial

position of each scheme and in particular give a true and fair view of the state

of affairs of the fund and intimate to the Board the place where such books of

accounts, records and documents are maintained.

The financial year for all the schemes shall end as of March 31 of each

year. Every mutual fund or the asset management company shall

prepare in respect of each financial year an annual report and annual

statement of accounts of the schemes and the fund as specified in

Eleventh Schedule.

Every mutual fund shall have the annual statement of accounts audited

by an auditor who is not in any way associated with the auditor of the

asset management company.

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Procedure For Action In Case Of Default:

On and from the date of the suspension of the certificate or the

approval, as the case may be, the mutual fund, trustees or asset

management company, shall cease to carry on any activity as a mutual

fund, trustee or asset management company, during the period of

suspension, and shall be subject to the directions of the Board with

regard to any records, documents, or securities that may be in its

custody or control, relating to its activities as mutual fund, trustees or

asset management company.

Restrictions On Investments:

A mutual fund scheme shall not invest more than 15% of its NAV in

debt instruments issued by a single issuer, which are rated not below

investment grade by a credit rating agency authorized to carry out such

activity under the Act.

Such investment limit may be extended to 20% of the NAV of the scheme

with the prior approval of the Board of Trustees and the Board of asset

Management Company.

A mutual fund scheme shall not invest more than 10% of its NAV in

unrated debt instruments issued by a single issuer and the total

investment in such instruments shall not exceed 25% of the NAV of the

scheme. All such investments shall be made with the prior approval of

the Board of Trustees and the Board of asset Management Company.

No mutual fund under all its schemes should own more than ten per

cent of any company's paid up capital carrying voting rights.

Such transfers are done at the prevailing market price for quoted

instruments on spot basis. The securities so transferred shall be in

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conformity with the investment objective of the scheme to which such

transfer has been made.

A scheme may invest in another scheme under the same asset

management company or any other mutual fund without charging

Any fees, provided that aggregate interscheme investment made by all

schemes under the same management or in schemes under the

management of any other asset management company shall not

exceed 5% of the net asset value of the mutual fund.

The initial issue expenses in respect of any scheme may not exceed six

per cent of the funds raised under that scheme.

Every mutual fund shall buy and sell securities on the basis of

deliveries and shall in all cases of purchases, take delivery of relative

securities and in all cases of sale, deliver the securities and shall in no

case put itself in a position whereby it has to make short sale or carry

forward transaction or engage in badla finance.

Every mutual fund shall, get the securities purchased or transferred in

the name of the mutual fund on account of the concerned scheme,wherever investments are intended to be of long-term nature.

Pending deployment of funds of a scheme in securities in terms of

investment objectives of the scheme a mutual fund can invest the funds

of the scheme in short term deposits of scheduled commercial banks.

No mutual fund scheme shall make any investment in:

i. Any unlisted security of an associate or group company of the

sponsor; or

ii. Any security issued by way of private placement by

an associate or group company of the sponsor; or The

listed securities of group companies of the sponsor

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which is in excess of 30% of the net assets [of all the

schemes of a mutual fund]

No mutual fund scheme shall invest more than 10 per cent of its NAV in

the equity shares or equity related instruments of any company.

Provided that, the limit of 10 per cent shall not be applicable for

investments in index fund or sector or industry specific scheme.

A mutual fund scheme shall not invest more than 5% of its NAV in the

equity shares or equity related investments in case of open-ended

scheme and 10% of its NAV in case of close-ended scheme.

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ABOUT RELIANCE MUTUAL FUND

Reliance Mutual Fund (RMF) has been established as a trust under the Indian

Trusts Act, 1882 with Reliance Capital Limited (RCL), as the Settlor/Sponsor

and Reliance Capital Trustee Co. Limited (RCTCL), as the Trustee.

RMF has been registered with the Securities & Exchange Board of India

(SEBI) vide registration number MF/022/95/1 dated June 30, 1995. The name

of Reliance Capital Mutual Fund has been changed to Reliance Mutual Fund

effective 11th. March 2004 vide SEBI's letter no. IMD/PSP/4958/2004 date

11th. March 2004. Reliance Mutual Fund was formed to launch various

schemes under which units are issued to the Public with a view to contribute

to the capital market and to provide investors the opportunities to make

investments in diversified securities.

The main objectives of the Trust are:

To carry on the activity of a Mutual Fund as may be permitted at law

and formulate and devise various collective Schemes of savings and

investments for people in India and abroad and also ensure liquidity ofinvestments for the Unit holders;

To deploy Funds thus raised so as to help the Unit holders earn

reasonable returns on their savings and

To take such steps as may be necessary from time to time to realise

the effects without any limitation.

Reliance Mutual Funds Schemes

Reliance Vision Fund (September 1995)

Reliance Growth Fund (September 1995)

Reliance Income Fund (December 1997),

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Reliance Liquid Fund (March 1998)

Reliance Medium Term Fund (August 2000),

Reliance Short Term Fund (December 2002),

Reliance Fixed Term Scheme (March 2003),

Reliance Banking Fund (May 2003),

Reliance Gilt Securities Fund (July 2003),

Reliance Monthly Income Plan (December 2003),

Reliance Diversified Power Sector Fund (March 2004)

Reliance Pharma Fund (April 2004)

Reliance Floating Fund (August 2004)

Reliance Media & Entertainment (October 2004)

Reliance Equity Opportunities Fund (April 2005)

DEBT SCHEMES

Reliance Monthly Income Plan Scheme Options

Reliance Income Fund Scheme Options

Reliance Medium Term Fund Scheme Options

Reliance Liquid Fund Scheme Options

Reliance Short Term Fund Scheme Options

Reliance Gilt Security Fund Scheme Options

Reliance Fixed Term Scheme Scheme Options

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EQUITY SCHEMES

Reliance Growth Fund Scheme Options

Reliance Vision Fund Scheme Options

Reliance Equity Opportunities Scheme Options

SECTOR SPECIFIC SCHEMES

Reliance Banking Fund Scheme Options

Reliance Diversified Power Sector Fund Scheme Options

Reliance Pharma Fund Scheme Options

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VARIOUS SCHEMESOF RELIANCE MUTUAL FUND

Equity/Growth Schemes

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.

Reliance Equity Fund:

(An open-ended diversified Equity Scheme.) The primary investment objective

of the scheme is to seek to generate capital appreciation & provide long-term

growth opportunities by investing in a portfolio constituted of equity & equity

related securities of top 100 companies by market capitalization & of

companies which are available in the derivatives segment from time to timeand the secondary objective is to generate consistent returns by investing in

debt and money market securities.

Reliance Tax Saver (ELSS) Fund:

(An Open-ended Equity Linked Savings Scheme.) The primary objective of the

scheme is to generate long-term capital appreciation from a portfolio that is

invested predominantly in equity and equity related instruments.

Reliance Equity Opportunities Fund:

(An Open-Ended Diversified Equity Scheme.) The primary investment

objective of the scheme is to seek to generate capital appreciation & provide

long-term growth opportunities by investing in a portfolio constituted of equity

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securities & equity related securities and the secondary objective is to

generate consistent returns by investing in debt and money market securities.

Reliance Vision Fund:

(An Open-ended Equity Growth Scheme.) The primary investment objective of

the Scheme is to achieve long term growth of capital by investment in equity

and equity related securities through a research based investment approach.

Reliance Growth Fund:

(An Open-ended Equity Growth Scheme.) The primary investment objective of

the Scheme is to achieve long term growth of capital by investment in equity

and equity related securities through a research based investment approach.

Reliance Index Fund:

(An Open Ended Index Linked Scheme.) The Investment Objective under the

Nifty Plan is to replicate the composition of the Nifty, with a view to endeavor

to generate returns, which could approximately be the same as that of Nifty.

The Investment Objective under the Sensex plan is to replicate the

composition of the Sensex, with a view to endeavor to generate returns, whichcould approximately be the same as that of Sensex.

Reliance NRI Equity Fund:

(An open-ended Diversified Equity Scheme.) The Primary investment

objective of the scheme is to generate optimal returns by investing in equity or

equity related instruments primarily drawn from the Companies in the BSE 200

Index.

Debt/Income Schemes:

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.

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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.

Reliance Monthly Income Plan:

(An Open Ended Fund. Monthly Income is not assured & is subject to the

availability of distributable surplus) The Primary investment objective of the

Scheme is to generate regular income in order to make regular dividend

payments to unitholders and the secondary objective is growth of

capital.Primarily the investment shall be made in debt and money market

securities (i.e. 80%) with a small exposure (i.e. upto 20%) in equity.

Reliance Gilt Securities Fund - Short Term Gilt Plan & Long Term Gilt

Plan:

Open-ended Government Securities Scheme) The primary objective of the

Scheme is to generate Optimal credit risk-free returns by investing in a

portfolio of securities issued and guaranteed by the central Government and

State Government

Reliance Income Fund:

(An Open-ended Income Scheme) The primary objective of the scheme is to

generate optimal returns consistent with moderate levels of risk. This income

may be complemented by capital appreciation of the portfolio. Accordingly,

investments shall predominantly be made in Debt & Money Instruments.

Reliance Medium Term Fund:

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(An Open End Income Scheme with no assured returns.) The primary

investment objective of the Scheme is to generate regular income in order to

make regular dividend payments to unitholders and the secondary objective is

growth of capital.

Reliance Short Term Fund:

(An Open End Income Scheme) The primary investment objective of the

scheme is to generate stable returns for investors with a short investment

horizon by investing in Fixed Income Securities of short term maturity.

Reliance Liquid Fund:

(Open-ended Liquid Scheme). The primary investment objective of the

Scheme is to generate optimal returns consistent with moderate levels of risk

and high liquidity. Accordingly, investments shall predominantly be made in

Debt and Money Market Instruments.

Reliance Fixed Term Scheme:

(Close-ended Income Scheme) The primary objective of the Scheme is to

seek to achieve regular returns / growth of capital by investing in a portfolio of

fixed income securities normally maturing in line with the time profile of theplan with the objective of limiting interest rate volatility.

Reliance Floating Rate Fund:

(An Open End Income Scheme) The primary objective of the scheme is to

generate regular income through investment in a portfolio comprising 3

substantially of Floating Rate Debt Securities (including floating rate

securitised debt and Money Market Instruments and Fixed Rate Debt

Instruments swapped for floating rate returns). The scheme shall also invest in

Fixed rate debt Securities (including fixed rate securitised debt, Money Market

Instruments and Floating Rate Debt Instruments swapped for fixed returns

Reliance NRI Income Fund:

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(An Open-ended Income scheme) The primary investment objective of the

Scheme is to generate optimal returns consistent with moderate levels of

risks. This income may be complimented by capital appreciation of the

portfolio. Accordingly, investments shall predominantly be made in debt

Instruments.

Reliance Fixed Maturity Fund - Series I:

(A Close Ended Income Scheme)

The primary investment objective of the Scheme is to seek to achieve regular

returns / growth of capital by investing in a portfolio of fixed income securities

normally maturing in line with the time profile of the Plan with the objective of

limiting interest rate volatility.

Reliance Fixed Maturity Fund - Series II:

(A closed ended Income Scheme) The primary investment objective of the

Scheme is to seek to achieve growth of capital by investing in a portfolio of

fixed income securities normally maturing in line with the time profile of the

respective plans.

Reliance Liquidity Fund:

(An Open - ended Liquid Scheme) The investment objective of the Scheme is

to generate optimal returns consistent with moderate levels of risk and high

liquidity. Accordingly, investments shall predominantly be made in Debt and

Money Market Instruments.

Reliance Regular Savings Fund:

(An Open - ended scheme)

The Investment Objectives:

Debt Option: The primary investment objective of this plan is to generate

optimal returns consistent with moderate level of risk. This income may be

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complemented by capital appreciation of the portfolio. Accordingly investments

shall predominantly be made in Debt & Money Market Instruments.

Equity Option: The primary investment objective is to seek capital

appreciation and or consistent returns by actively investing in equity / equityrelated securities.

Hybrid Option: The primary investment objective is to generate consistent

return by investing a major portion in debt & money market securities and a

small portion in equity & equity related instruments.

Sector Specific Schemes:

These are the funds/schemes which invest in the securities of only those

sectors or industries as specified in the offer documents. e.g.

Pharmaceuticals, Software, Fast Moving Consumer Goods (FMCG),

Petroleum stocks, etc. The returns in these funds are dependent on the

performance of the respective sectors/industries. While these funds may give

higher returns, they are more risky compared to diversified funds. Investors

need to keep a watch on the performance of those sectors/industries and mustexit at an appropriate time. They may also seek advice of an expert.

Reliance Banking Fund:

Reliance Mutual Fund has an Open-Ended Banking Sector Scheme which has

the primary investment objective to generate continuous returns by actively

investing in equity / equity related or fixed income securities of banks.

Reliance Diversified Power Sector Fund:

Reliance Diversified Power Sector Scheme is an Open-ended Power Sector

Scheme. The primary investment objective of the Scheme is to seek to

generate consistent returns by actively investing in equity / equity related or

fixed income securities of Power and other associated companies.

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Reliance Pharma Fund:

Reliance Pharma Fund is an Open-ended Pharma Sector Scheme.

The primary investment objective of the Scheme is to generate consistent

returns by investing in equity / equity related or fixed income securities ofPharma and other associated companies.

Reliance Media & Entertainment Fund:

Reliance Media & Entertainment Fund is an Open-ended Media &

Entertainment sector scheme.

The primary investment objective of the Scheme is to generate consistent

returns by investing in equity / equity related or fixed income securities of

media & entertainment and other associated companies.

Reliance Equity Advantage

(An open-ended Diversified Equity Scheme.) The primary investment objective

of the scheme is to seek to generate capital appreciation & provide long-term

growth opportunities by investing in a portfolio predominantly of equity &

equity related instruments with investments generally in S & P CNX Nifty

stocks and the secondary objective is to generate consistent returns byinvesting in debt and money market securities.

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RESEARCH METHODOLOGY

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RESEARCH METHODOLOGY

The study undertaken by me was regarding a detailed analysis of

MARKETING AND PROMOTION of Reliance Mutual Fund products, studying

its current scenario and studying the challenges and difficulties faced by

Reliance Mutual Fund Company.

RESEARCH DESIGN

Research Design is the overall description of all the steps though which the

projects have preceded forms the setting of objectives to the writing of the

project report. The success of the project depends on the soundness of the

research design, which includes problem definition, specific method of data

collection and analysis and time required for the project.

TYPES OF RESEARCH DESIGN

The Research Design is formulated after the formulation objectives and

according the requirement of study. The following types of research design are

used for the purpose of study with different objectives in frame of mind.

DESCRIPTIVE RESEARCH DESIGN

Descriptive studies undertaken in such a circumstances where researcher

is interested in knowing the demographic characteristic of the consumer of

when he is interested in knowing the proportion of people in the given

population who behaves in the particular manner making projections of the

certain thing or determining relation between two or more variables.

SAMPLE PLAN: Data Source:

Primary Data:

The primary data are which are collected afresh and for the first time, and

thus happen to be original in character. A primary survey was conducted at

jaipur city. The survey was carried out at various levels & the target group was

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retail investors, business men, builders, industrialists, exporters, CAs , CSs ,

etc.Questionnaires were used as an instrument to collect the primary data.

This data was obtained by various promotion schemes like-

CANNOPIES- We put canopies in front of various financial institutions like

banks (hdfc, icici), commercial places, and entertainment places like Gaurav

tower, crystal Mall, vaibhav complex. There people approach us and we give

them the questionnaire to fill and provide the details of reliance mutual fund.

APPROACHING TO INDUSTRIAL UNITS - We approach to industrial areas

like sitapura, VKI, Malviya industrial area and give the questionnaire to fill and

explain the details of reliance mutual fund.

Secondary sources:

The Secondary data are those which have already been collected and through

processed the statiscal process.

We got the secondary data through:-

PREVIOUS TRANSACTION RECORDS:-

We got the records of those people who have already invested in

mutual funds.

Trough directory- We got the records of CAs, architects etc

VARIOUS WALK IN QUIRES RECORDS

Marketing Approach:

o Directly meeting them

o Through telephonic calls

o Through Canopies

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Population Definition

Element: Retail Investors, Business Men, Builders, Industrialists,

Exporters, Senior Citizens, CAs, CSs and otherSample Unit- Jaipur City

Sampling Method- Simple Random Sampling

Sampling Size- Based on ages, income area etc.

Data collection- Through directories, Previous records

through friends and relatives.

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Modes of Marketing & Promotion

Directly Approaching:-

We directly approach people to invest like builders, investors, exporters,

businessmen,CAs, CSs, & even general mass.

Telephonic Calls:-

We approach them through telephones and take appointments & then directly

contact them for investment.

Canopies:-

We put canopies in front of Banks, Financial Institutions & other public

gathering places. There we approach people and take their telephone

numbers. & contact them or even in canopies itself make them invest.

Through Distribution Houses:-

Even most of our funds are promoted through distribution houses viz. Bajaj

Capital, RR Investors, Alliance Capital etc.

Through Brokers:-

Major part of our promotion & marketing is done through brokers, because

they are more reliable for knowledgeable. Thus people trust them.

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DATA COLLECTION & ANALYSIS

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Collection of Data for finding Customer Perception:

Primary sources were used to collect data for finding the customer perception

regarding the various factors considered when investing in mutual fund

schemes.

Primary data have been collected directly from respondents using data

collection methods like survey interviews, questionnaires, measurements and

direct observations. For this, I had made a questionnaire, which was filled in

by the investors.

This questionnaire was carefully prepared and it went through various checksbefore coming into final shape. Various bank officials were initially filled this

questionnaire and feedback were taken from each regarding this and based

on their feedback, changes were made again to it and again it was shown to

them till it got into final shape.

I have included only closed ended questions, which leaves no space for

biasness in individuals response. To get every questionnaire filled, I was

directly involved with the respondents to help and guide them with regard toany difficulty in filling in the required answer.

Various types of questions were included in the questionnaire, which directly

asks the respondents why he is investing in mutual funds and how he rates

the different mutual fund companies according to perceived value and

according to various factors like risks, returns, transparency, convenience and

trust.

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Investor's Knowledge about various

Investment Schemes

Average

69%

Nil8%

Good

23%

Nil

Average

Good

In the above table 12 investors were found with no knowledge about various

investment schemes, 104 investors were found with average knowledge about

various investment schemes, 34 investors were found with good knowledge

about various investment schemes.

In the above graph out of total surveyed investors 8% were found with nil

investment knowledge, 69% were found with average investment knowledge,

23% were found with good investment knowledge.

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Types of Investors

0

10

20

30

40

50

60

70

Aggressive

Investors

Moderate

Investors

Conservative

Investors

Very

Conservative

Investors

Aggressive Investors 18

Moderate Investors 60

Conservative Investors 47

Very Conservative Investors 25

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18 investors are found Aggressive, 60 investors are found Moderate, and 47

Investors are found Conservative & 25 Investors are found very conservative

in the survey.

Views of the Investors if the stock

market crashed down

Withdraw

19%Invest

29%

Wait

52%

Out of the total surveyed investors 28 investors were found in a state of

withdrawal of money, 79 investors were found out in the state of wait & watch

& 43 investors were found out in the state of more investment in the market if

the market crashes down.

In the above graph 52% will wait & watch 29% will invest more & 19%

investors will withdraw their money.

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What is your annual income?

How much do you invest out of your total income?

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124

96

48

32

0

20

40

60

80

100

120

140

60000-1Lakh 1Lakh-2Lakh 2Lakh-3Lakh 3Lakh &Above

e r o a ncome

25%

46%

29%

Upto 5% 5%-10% More Than 10%


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Which age group you are in?

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ge roup o ar ous nves o

Between 20

30

17%

Between 30

50

32%

Above 50

51%

Above 50 Between 30-50 Between 20-3


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Are you aware of various mutual fund schemes?

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75

80%

20%

0%

10%

20%

30%

40%

50%60%

70%

80%

Yes No

mutual fund schemes


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Have you ever invested in mutual funds?

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7 0 %

3 0 %

Y e s

N o


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DATA ANALYSIS

To analyze the mutual fund schemes using risks and returns, I have used the

various fact sheets of company. A fact sheet is a document containing the

past performance of different schemes offered by an AMC. A fact sheet shows

the allocation pattern, NAV changes since inception of a scheme and

comparative analysis with respect to its benchmark like S&P CNX Nifty and

BSE Sensex etc

Other than fact sheets of various AMCs, Secondary Data was collected from

sources like Internet,Reading Materials of various Investment and Services

Products, References and results from similar projects done in the past.

Web sites of various AMC and other institution were visited for the data

collection of their schemes and past performance.

Various reading material was also used for this like material provided by

AMCs, business newspapers and business magazines like The Economic

Times, Business Standard, and Business World etc.

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SWOT

ANALYSIS

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SWOT ANALYSIS

STRENGTHS:

1. Brand Name:

The biggest strength is the tag of Reliance is going to be the largest

group of industries.

2. Compatible Price:

Prices of different schemes of Reliance Mutual Funds are much morecompatible than others.

3. Diversified Schemes:

We has diversified schemes which is an exception case of Reliance

Mutual Fund.

4. Less Risk:

Our debt schemes are 100% free form market risk. Even as our

portfolio is that diversified so equities are also less risky than others.

5. Easy procedures of redemption & registration too:

We have open ended schemes so Mutual funds are easily redeemable.

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WEAKNESS:-

1 Prone to Market Risk:

Mutual Funds depend on overall macro economic condition and market

scenario.

2 Tough Competitions:

There is a very tough competition because of large number of Asset

Management Companies.

OPPORTUNITIES:-

1 Hoarding:

Most of the Indians have black money that too in huge amount i.e. the

do not have money in banks, so approaching them is beneficial.

2 Indian Capital Market is Growing:

So more & more new investors are interested in investments.

3 Tailor Made Products:

We have tailor made products like sector specified schemes & even

diversified schemes.

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4 Branch Expansion:

Large no. of branches are opening day by day and even we are

traping the countries having almost same type of socio-economic

condition & even same culture etc.

THREATS:-

1 Tough Competition:

As there are so many mutual fund companies having almost same

kind of schemes, so its tough to compete with.

2 Unawareness:

Major % of population is not aware of mutual funds and even

Reliance Mutual Funds, so its hard to convince people.

3 Changing Scenario:

Our market scenario is changing day by day i.e. our market is

fluctuating, so this makes

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CONCLUSION

From the analysis of the responses received from the investors in Jaipur City,

a majority of investors are found to be conscious and enlightened regarding

their investments, return & growth.

We have very good market in Jaipur which comprises potential investors but

due to lack of basic promotion & publicity these investors are not fully aware of

our company & whosoever is aware of our company.

Their investment decisions are done on the basis of security, analysis of risk

yield & return few parameters like Demographic, Physiological, Income, etc.

So my findings are that Reliance Mutual Fund Company should make little

more efforts to trap the potential investors, like Media Advertisement,

Paper Advertisement, Seminars & Business Meets & building a good

relationship with potential business, moreover friendly guidance.

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LIMITATIONS

UNCERTAINITY OF MARKET:-

Mutual Funds are securities investments are subject to market risks and there

is no assurance or guarantee that the objectives of the Scheme will be

achieved.

As with any investment in securities, the NAV of the units issued under the

Scheme can go up or down depending on the factors and forces affecting the

capital markets.

LACK OF PUBLIC AWARENESS:-

In Jaipur Mutual Fund Industry is in infantry stage so people are unaware of it.

So people are afraid to invest & they only trust of some govt funds like UTI ,

SBI, G. Securitys. Which give assured returns?

HIGH COMPETITION:-

Due to the existence of large number of AMCs the competition is high.

Investors are confused that where they have to invest and where not. Other

AMCs offered the same type of product/schemes which diversified the

investors.

RIGID AND TRADITIONAL STRUCTURE:-

The people believe investing in Bank FDs and Post Office saving and are

reluctant to invest in Mutual Fund. People like to secure money in terms of

lending to the people on high interest they meant their amount is safe.

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SOCIO- ECONOMIC FACTOR:-

The standard of living is low and people have low saving so investment in

Mutual Fund is low. The most of the people of this country are agriculture

dependent So they have less to invest

POLITICAL FACTOR:-

Due to volatile govt & their policies regarding investor & investment, the stock

market is not integrated which in turn affects the mutual fund industry.

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RECOMMENDATIONS

1) The investors above the age of 50 years must be taken into

consideration they are having great potential regarding investment.

2) Reliance must lay down some sound strategies to trap more customers

by giving them more commission in comparison to other investment

centers.

3) Reliance must use marketing tools like point of purchase,

advertisement through Mass Media like loading Newspapers,

Magazines, Television, Exhibition, Fairs, SMS on Mobiles,

advertisement on the internet.

4) The organization is lacking on the parameters of motivation. It is

recommended that the organization must adopt the concept of

motivation

5) Reliance should organize programs for customer awareness in

developing areas and establish a confidence and belief among the

customers residing there.

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QUESTIONAIRE

Dated.............................

Name..Age

Address

.

Tel. Office ..ResMobile..

1 AGE: ______ Years

2. Which type of instruments does you generally preferred for making

investment?

Bank FDs

Shares

Debentures

Post Office

Mutual Funds

Any Other

3 Rank the following, which influence you most while making an

investment?

Safety

Liquidity

Higher Returns

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Tax Benefits

4. Have you ever-invested in Mutual funds?

Yes

No

5. If yes, which schemes do you preferred most?

Debt fund

Gilt fund

Equity fund

Money market fund

Hybrid market fund

6. How much do you invest annually?

Below Rs. 25,000

Between Rs. 25000- Rs. 50,000

Between Rs. 50,000 - Rs. 100,000

More Than 1 lakh

7 You invested through:

Your own

Through Distribution house

Through broker

others

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8 Do you aware of different schemes of Mutual Funds?

Yes

No

9 Views of the investor if the stock market crashes down:

Wait and Watch

State of withdrawal

State of more investment

10 How long you are investing in market?

1-5 years

5-10 years

Above 10 years

11 INCOME LEVEL ANNUALY:

60,000 1, 00,000

2, 00,000 3,

Relaince Mutual Funds

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