ASIAN SCHOOL OF BUSINESS

MANAGEMEMT

A PROJECT REPORT ON
ROLE OF MUTUAL FUND IN THE ERA OF DROPPING
INTEREST RATE

CORPORATE GUIDE-MR.BIJAN PANDA

INTERAL CORPORATE GUIDE-MR.PRASANT

SUBMITTED FOR FULFILLMENT OF THE REQUIREMENT FOR AWARD OF THE

DEGREE OF

POSTGRADUATE PROGRAM IN INTERNATIONAL

BUSINESS

( REG.N0-PGPIB 01-09/11)

SUBMITTED TO
SUBMITTED BY

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 SHAREKHAN PVT.LTD ABHISHEK

JOSHI BHUBANESWAR

PGPIB, ASBM

Acknowledgement to the company

The opportunity to get practical training in a reputed organization fulfills the felt gap between the
theory and practical. In the case of a student of FINANCE this aspect assumes an additional
dimension.

I hereby acknowledge share khan for providing the constant guidance for encouragement which helped me

a lot to besuccessful in my efforts. This formal acknowledgement will hardly be sufficient to express my
deep sense of gratitude to all of them. It was a memorable experience while doing my project at
ORGANISATION, Bhubaneswar .

I am highly indebted and thankful to PRASANT SIR for his guidance and encouragement, without which
the satisfactory completion of this project would not had been possible. He is a constant source of
inspiration to me showing all the patience and abundant encouragement throughout the project duration.

Acknowledgement couldn’t end without expressing my gratitude towards MR. BIJAN PANDA
project guidewho was instrumental in timely completion of the project.

Lastly thanks to teacher and colleagues who directly or indirectly helped me in procurement of my goal. In
all share khan provided a wonderful simulating environment for this very educative and instructive
training.

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MR.BIJAN PANDA

AST.BRANCH MANAGER

Acknowledgement to the Faculty

ASIAN SCHOOL OF BUSINESS Management

It is high privilege for me to express my deep sense of gratitude to all

Those faculty members who helped me in the completion of the project,
Especially my ASBM Director DR. BISWAJEET PATNAIK who was always
There at hour of need.

My special thanks to DR..NITIKANT CHAND (FACULTY OF BUSINESS COMUNICATION)

for helping me in the completion of project work and its report submission.

Last but not the least my special thanks to the faculty of Asian school of business management
For their kind co–operation and providing me with all the necessary documents needed and guidance
during the time period of project completion.

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 Dr.Niti

ranjan chand

ASBM,

Bhubaneswar

DECLARATION

This is the report of the project work entitled “ROLE OF MUTUAL FUND IN
THE ERA OF DROPPING NTREST RATE’ undertaken by me during the two
month training at share khan, Bhubaneswar

I hereby declare that project report is being submitted by me to the Department

of PGPIB for the partial fulfillment of the

degree of POSTGRADUATE PROGRAM INTERNATIONAL BUSINESS. A copy of this

project has been submitted to

the organization where the project was developed. This project is not submitted to
any other organization or university or

college and is the Outcome of my work.

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 ABHI

SHEK JOSHI

SBM, BHUBANESWAR

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INDEX

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 TOPIC- ROLE OF MUTUAL FUND
IN THE ERA OF
DROPPING INTREST
RATE

COMPANY-SHAREKHAN
PVT.LTD

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8
 OBJECTIVE
Here my purpose is to study the bank rates whether bank increase the interest rate or not. Bank return
with risk ,hear to also verify how much risk attached to the bank return.

Then compare mutual fund (mf) return with bank rate, also to study different company’s mutual fund

according to their nature of the schemes.

o Tata mutual fund

o Birla sun life

o Franklin Templeton

o Unit trust of India (uti)

o ICICI PRU

o HDFC

Here to see whether mutual fund provide good return as they promise to the investor also with amount
of risk. For this last five year all mutual fund schemes should be thoroughly studied.

Here also need to collect past performance, dividend and history of different schemes according different

AMC’s

METHODOLOGY
The data used is secondary in nature, drawn from published material viz. several book ,journal, news paper,

report fact sheet of AMC;s and other document and information drawn from personal meetings and
discussion with several finance professionals, intermediaries (agent ,broker, and sub- brokers)

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 SIGNIFICANCE OF THE STUDY

The stock market has been known as money spinners in the past. And truly anyone who entered the arena

in the in the early part of the decade could strike wealth. The early 90’s brought he stock market into
prominence after the deregulation in the industry with the abolition of the controller of capital issues (cci)

and the allowance of free pricing brought in a spate of new issues. All was gold and shining till the scams

haded and shine. Investor panicked and ran for cover. Several had burnt their fingers while other had only

valuable ss paper with them. The FII entry only fueled the fire. The retail investor was out of the
market,shaken out of confidence. This was the time when debt took center stage safety and rating to
confirm that security. They found a better option to the banks with low return and the stock market

with risks. Thousand of finance companies came into with return as high as 20% and above. All went well
till the CRB episode the myth that al debt was safe. The investor were then option less with only the banks
providing the safest Instrument, but with RBI signaling a downward interest revision, and a war wagin
among banks and FI’s to provide the lowest lending rates coupled with the banks flush with funds, the
deposit rates moved only southwards not even covering the inflation.While the market witnessed such
events, an instrument that was slowly but steadily making its mark was MUTUAL FUND. Better return
coupled with risk diversification and professional management of funds made this Instrument very safe and
a lucrative investment opportunity. The low profile industry stood through the test of time and weathered
the storm. And now, when the lull looms large the industry stands distinctly apart.

Bearing the initial hiccups and with the passage of time and performance of the funds have helped in
gaining confidence. The industry has carved a niche for itself which seems to be exploding but with control.
The market possesses such a potential for growth that in a single year leading international fund managers have
opened their Indian operations.With increasing awareness among investors towards this product education
becomes all the more essential. The significance of the report lies in the immense potential of the industry.

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 Limitation of the study
The limitation of the study lies in the fact the scope of the study has been limited to India with place of study

being Kolkata. The data has been used is only secondary.

The study takes into account the performance of the funds till 30th April 2010.

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 INTRODUCTION

Background

The financial is one of the most important inventions of the modern society. The phenomenon of
imbalance in the distribution of capital or funds existed in every economic system. There are areas
or people with surplus funds and there are those with a deficit. A financial system functions as an
intermediary and facilitates the flow of funds from the areas of surplus to the areas of deficit. A
financial system is a composition of various institutions, markets, regulations and laws, practices,
money managers, analysts, transactions and claims and liabilities. The functions performed by a
financial system are:

• THE SAVINGS FUNCTION:

• LIQUIDITY FUNCTION:

• PAYMENT FUNCTION:

• RISK FUNCTION:

• POLICY FUNCTION:

COMPANY PROFILE SHAREKHAN LIMITED

Sharekhan is one of the top retail brokerage houses in India with a strong online trading
platform. The company provides equity based products (research, equities, derivatives, depository,
margin funding, etc.). It has one of the largest networks in the country with 704 share shops in 280
cities and India’s premier online trading portal www.sharekhan.com.With their research expertise,
customer commitment and superior technology, they provide investors with end-to-end solutions
in investments. They provide trade execution services through multiple channels - an Internet
platform, telephone and retail outlets. Sharekhan was established by Morakhia family in 1999-2000
and Morakhia family, continues to remain the largest shareholder. It is the retail broking arm of the
Mumbai- based SSKI [SHANTILAL SHEWANTILAL KANTILAL ISWARNATH LIMITED]
Group. SSKI which is established in 1930 is the parent company of Sharekhan ltd. With a legacy

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of more than 80 years in the stock markets, the SSKI group ventured into institutional broking and
corporate finance over a decade ago. Presently SSKI is one of the leading players in institutional

broking and corporate finance activities. Sharekhan offers its customers a wide range of equity
related services including trade execution on BSE, NSE, and Derivatives. Depository services,
online trading, Investment advice, Commodities, etc. Sharekhan Ltd. is a brokerage firm which is
established on 8th February 2000 and now it is having all the rights of SSKI. The company was
awarded the 2005 Most Preferred Stock Broking Brand by Awwaz Consumer Vote. It is first
brokerage Company to go online. The Company's online trading and investment site -
www.Sharekhan.com - was also launched on Feb 8, 2000. This site gives access to superior content
and transaction facility to retail customers across the country. Known for its jargon-free, investor
friendly language and high quality research, the content-rich and research oriented portal has stood
out among its contemporaries because of its steadfast dedication to offering customers best-of-
breed technology and superior market information. Share khan has one of the best states of art web
portal providing fundamental and statistical information across equity, mutual funds and IPOs. One
can surf across 5,500 companies for in-depth information, details about more than 1,500 mutual
fund schemes and IPO data. One can also access other market related details such as board
meetings, result announcements, FII transactions, buying/selling by mutual funds and much more.
Share khan’s management team is one of the strongest in the sector and has positioned Sharekhan
to take advantage of the growing consumer demand for financial services products in India through
investments in research, pan-Indian branch network and an outstanding technology platform.
Further, Share khan’s lineage and relationship with SSKI Group provide it a unique position to
understand and leverage the growth of the financial services sector. We look forward to providing
strategic counsel to Share khan’s management as they continue their expansion for the benefit of all
shareholders." SSKI Corporate Finance Private Limited (SSKI) is a leading India-based investment
bank with strong research-driven focus. Their team members are widely respected for their
commitment to transactions and their specialized knowledge in their areas of strength. The team
has completed over US$5 billion worth of deals in the last 5 years - making it among the most
significant players raising equity in the Indian market. SSKI, a veteran equities solutions company
has over 8 decades of experience in the Indian stock markets. If we experience their language,
presentation style, content or for that matter the online trading facility, we'll find a common thread;

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 one that helps us make informed decisions and simplifies investing in stocks. The common thread
of empowerment is what Sharekhan's all about! "Sharekhan has always believed in collaborating

with like-minded Corporate into forming strategic associations for mutual benefit relationships"
says Jaideep Arora, Director - Sharekhan Limited. Sharekhan is also about focus.Sharekhan does
not claim expertise in too many things. Sharekhan's expertise lies in stocks and that's what he talks
about with authority. So when he says that investing in stocks should not be confused with trading
in stocks or a portfolio-based strategy is better than betting on a single horse, it is something that is
spoken with years of focused learning and experience in the’ stock markets. And these beliefs are
reflected in everything Sharekhan does for us! Sharekhan is a part of the SSKI group, an Indian
financial services power house, with strong presence in Retail equities Institutional equities
Investment banking.

1. Sharekhan provides 4 in 1 account. –

2. Demat a/c
3. Trading a/c: for cash calculation
4. Bank a/c: for fund transfer

5. Mutual fund schemes

6. Dial and Trade: for query relating trading Products:
7. Bonds
8. Shares -online and offline

Portfolio Management System ¬Insurance Commodities

• Demat account: Sharekhan is a depository participant. This means that we can keep the shares in
dematerialized form in Sharekhan. But for this one has to the demat account in Sharekhan.
Dematerialization is the process by which a client can get physical certificates converted into
electronic balances maintained in his account with the DP. In Sharekhan, under demat account there
are two types of terminals.

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 Share Khan Classic account
Allow investor to buy and sell stocks online along with the following features like multiple watch lists,
Integrated Banking, demat and digital contracts, Real-time portfolio tracking with price alerts and Instant
credit & transfer.

 Online trading account for investing in Equities and Derivatives

 Free trading through Phone (Dial-n-Trade)

 Two dedicated numbers for placing your orders with your cell phone or landline.

 Automatic funds transfer with phone banking (for Citibank and HDFC bank customers)

 Simple and Secure Interactive Voice Response based system for authentication

 get the trusted, professional advice of our telebrokers

 After hours order placement facility between 8.00 am and 9.30 am

 Integration of: Online trading + Bank + Demat account

 Instant cash transfer facility against purchase & sale of shares

 IPO investments

 Instant order and trade confirmations by e-mail

 Single screen interface for cash and derivative

ShareKhan SpeedTrade account

This accounts for active traders who trade frequently during the day's trading session. Following
are few popular features of Speed Trade account

 Single screen interface for cash and derivatives

 Real-time streaming quotes with Instant order Execution & Confirmation

 Hot keys similar to a traditional broker terminal

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  Alerts and reminders

 Back-up facility to place trades on Direct Phone lines

Sharekhan enjoyed about 20 per cent market share in Web business (Internet trading) in stock
markets. Three years ago, Web trading showed lot of promise but with the market witnessing a
downturn, there was not much interest among retail customers. Profits The share of Web trading
constituted 22 per cent of the revenue. As Sharekhan's daily trading volume was over Rs 200 crore,
the share of Web trading at about Rs 40 crore a day was substantial and a larger part of the volume
was coming from day traders.

Features of Trading With Sharekhan:

1:Freedom from paperwork

2:Instant credit and money transfer

3:Trade from any net enabled PC

4:After hour orders

5:Online orders on the phone

6:Timely advice and-research reports

7:Real-time Portfolio tracking

8:Information and Price alerts.

FINANCIAL CAPABILITY

Taking in to consideration all its assets and liabilities company is valued at around Rs.750-850 crores.

HIERARCHY IN Sharekhan There are 14 main hierarchic levelinSharekhan:

1) Trainees

2) Super trainees

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 3) Sales executives

4) Assistant sales manager

5) Area sales manager

6) City sales manager

7Assistant branch manager (MR.BIJAN PANDA)

8) Branch manager

9) Regional head

10)Cluster head

11) Business head

12) Country head

13) Directors 14) CEO

SWOT ANALYSIS OF SHAREKHAN STRENGTHS WEAKNESSES

• First brokerage firm to go online.

• High brokerage charges but now

• Products they have overcome this by a new prepaid scheme in which brokerage

• PMS Services. is reduced to half

. • Technology

• Online fund transfer.

• Research reports.

Clients (average of 15,000 accounts per year)

Recommendations from clients.

Free Demat a/c opening.

• Low annual maintenance charge OPPORTUNITIES THREATS

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 • Huge market.

Volatility of the share market.

• Competitors.

Account opening:
Opening a DP account with Sharekhan One can open a Depository Participant (DP) account, either
through a Sharekhan branch or through a Sharekhan Franchisee center. There is no fee for opening
DP accounts with Sharekhan. However a nominal deposit (refundable) is charged towards
services which will be adjusted against all future billings. All investors have to submit their
proof of identity and proof address along with the prescribed account opening form. List of
Documents required to open an account with Sharekhan:

 Proof of Identity You can submit a photo copy of any of the following

 Voter ID o Passport

 PAN Card o MAPIN UID Card

 Driving License

 Photo I card issued by Employer registered under MAPIN

 Copy of Ration Card

 Address Proof You can submit a photo copy of any of the following

 Voter ID Card

 Driving License

 Passport

 Ration Card

 Telephone Bill

 Electricity Bill

 Leave-License

 Bank Passbook

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 Latest Bank Statement

 Insurance Policy

 Flat Maintenance Bill

 A copy of cancelled cheque

 Nominee photograph, if filled Signed Photograph of all holders

BROKERAGE STRUCTURE OF SHAREKHAN BROKERAGE:

• INTRADAY DELIVERY CASH- EQUITIES 0.05% 0.5% FnO 0.05%

• PREPAID SCHEME 0.025% 0.25%

• Sharekhan has tie up with the following banks:

• • HDFC
• • Axis Bank
• • IDBI
• • Citi Bank
• • IndusInd Bank
• Union Bank
• • ICICI
• ADVANTAGES OF SHAREKHAN:

• 1. Online trading is very user friendly and one doesn't need any software to access.
• 2. They provide good quality of services like daily SMS alerts, mail alerts, stock recommendations etc.
Sharekhan has ability to transfer funds from most banks. Unlike ICICI Direct, HDFC Sec, etc., so
investor not really needs to open an account with a particular bank as it can establish link with most modern
banks.

CUSTOMER

• • Business class people (high class)

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• • High Net worth Individuals
• • Service class people
• • Government Employees
• • Young Adults (19-30 yrs.)
• • Adults (35-50 yrs.)
• • HUF (Hindu Undivided Family)
• • Women (literate and working)

• COMPETITORS

• India Bulls
• Anand Rathi
• . Motilal Oswal paisa.co m
• India
• Religare Infoline
• . Reliance
• Kotak Money Securities
• Angel Broking 5

OBJECTIVE:
• • To project Sharekhan as an authority in the retail stock trading business.
• • To execute business for the company by selling demat accounts and mutual funds.
• • To study the various products of the company.
• • To know how to open and close the calls.
• • To learn the online terminal used for trading.
• • To know the various policies of the company.
• • To know how to handle various types of customers.
• • To know various reasons for market fluctuations.
• To learn to manage time.
• • To gain practical knowledge of the market.
• • To have a practical experience of working in a reputed organization.

• TASKS
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 • To tell the client about the advantages of opening a A/C and its products.
• To convince the clients to do Online demat account with Sharekhan limited.
• To explain him the terms and conditions of the product.
• And compare between bank deposit and mutual fund

•
•

• Trading. To give a live demo of how-the client to open Demat account at Sharekhan ltd. By

means of Presentation explaining them how to the online terminal works.

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1. MY SIP IN SHAREKHAN
Before my Summer Internship Programmed, I had very little knowledge about the stock market and
its fundamentals. And now after undergoing training for the 8th week at Sharekhan there is a
tremendous increase in my knowledge about the stock market. I have also gained a lot of
knowledge about the Sharekhan Company and its various products, schemes and policies and also
about its competitors. The products which I have sold up till now are Demat accounts and mutual
funds. And I am confident about my knowledge about demat accounts and mutual funds. Although
nobody can claim complete expertise but there is a sea change at least from my point of view. I
have learnt what are the various Indices and their significance in market. I have also learnt the
impact of Sensex and Nifty on overall stock market.I have learnt about various fundamentals and
technical aspects, which affect the stock prices in short, run and long run.t Sharekhan we have also
been taught to use the online terminal. Sharekhan is one of the top retail brokerage houses in India
with a strong online trading platform. The company provides equity based products (research,
equities, derivatives, depository, margin funding, etc.). It has one of the largest networks in the
country with 1000 share shops in 375 cities and India’s premier online trading portal
www.sharekhan.com. Out of these we have to mostly sell demat accounts and Mutual Funds.

In the first week we had training sessions for 3 days in which our company guide Mr. bijan panda gave us
the complete information about the company, its products and policies. He gave us tips on how to open
and close the calls. He also gave us tips on how to do telecalling. He also gave us information on how to
fill the KYC form and what are the documents required to open the demat account. Then finally after this
we were sent to the market to bring demat accounts and Mutual funds. Initially we faced many obstacles
and reasons were many like bad stock market conditions And we were unable to locate potential market
etc.but slowly I collected a good number of leads and references from hom so ever I met. I am still
following the clients who are giving follow up dates During this venture I came across many people who
came from different walks of life. I have learned How to deal with them and convince them to open the
demat account with Sharekhan. Selling a demat account requires special focus on targeting the customers.
Each and every person does not invest in the share market. The person who will be investing in the share
market should have atleast the basic knowledge about the same or should have the curiosity to gain the

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 same. So what Ihad to do is toidentify the prospective client and then try to convince them. Wasting time
on the customer who does not know Anything about stock market is completely worthless.

While on the call if customer asks me any query about which I am not very much sure then I call our
prasnta sir my interal corporate guide who then clears my doubts and queries without any irritation. This
not only solves clients query but also makes our concepts clear and strong. I initially met 2 to people every
day. Out of these I found 5 to 6 persons who took actual interest in the Demat account and Mutual funds.
As I met more and more people, I learned how to identify the prospective clients. I came to know more
about how to talk to them, how much time should be given to each client. So my clients’ conversion ratio
also increased. Even, by solving the customer queries, my own understandings were enhanced. While
selling our product in the market, I also came to know more about our competitor's product like,
ICICIDirect, India bulls, India Infoline, Motilal Oswal, Ventura, Angel Broking etc. and their strategy of
marketing and the consumer's preference towards the competitor's product. I did cold calling in these three
months and created my own database through it. In the second month some of the follow-ups from the first
month started converting. Sharekhan also started giving advertisement in leading English dailies and on
channels like CNBC where the customers care toll free number is displayed. Sharekhan also started giving
ads on the various sites like Yahoo, Google etc.Sharekhan also started a scheme of free demat account
opening and also the one in which the brokerage reduces to half of the original brokerage of 0.05% for
Intraday and 0.05% for Delivery.

I met people in different locations i.e. at saheed nagar,acharya bihar,nayapalli,.. This includes people
from the Big Showrooms and malls like Big Bazzar, Chartered Accountants, Travel agents, business
people, housewives, real estate people, Customer Relationship Managers, Assistant Sales Manager, and
engineers of some companies..

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 INTRODUCTION

Investment is the application of money for earning more money. The money we earn
is partly spent and the rest is saved for meeting future expenses. Instead of keeping
the savings idle one may like to channelize their savings in a particular order so that
they get a percentage of return out of it in the future. This is called Investment.

Thus, Investing is a method of purchasing assets in order to gain profit in the

form of reasonably predictable income (dividends, interest, or rentals) and
appreciation over the long term.

In India, traditionally the family savings were invested in immovable assets such
as land & building, fixed deposit, post office savings as well as precious metals.

One needs to invest to:

Earn return on their idle resources,

Generate a specified sum of money for a specific
goal in life,
Make a provision for an uncertain future.
One of the important reasons why one needs to invest wisely is to meet the cost of
Inflation. Inflation is the rate at which the cost of living increases. The cost of living is
simply what it costs to buy the goods and services you need to live. Inflation causes
money to lose value because it will not buy the same amount of a good or a service in
the future as it does now or did in the past. This is why it is important to consider
inflation as a factor in any long-term Investment strategy. The aim of Investments
should be to provide a return above the inflation rate to ensure that the Investment
does not decrease in value.

If the after-tax return on the Investment is less than the inflation rate, then the assets
have actually decreased in value; that is, they won't buy as much today as they did last
year.

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 The three golden rules for all investors are:
Invest early,
Invest regularly,
Invest for long term or short term as per your objective.

Introduction to Mutual Funds

A mutual fund is a professionally managed type of collective investment scheme that

pools money from many investors and invests it in stocks, bonds, short-term money
market instruments and other securities. Mutual funds have a fund manager who
invests the money on behalf of the investors by buying / selling stocks, bonds etc. It is
a substitute for those who are unable to invest directly in equities or debt because of
resource, time or knowledge constraints. Benefits include professional money
management, buying in small amounts and diversification.

Mutual fund units are issued and redeemed by the Fund Management Company based
on the fund's Net Asset Value (NAV), which is determined at the end of each trading
session. NAV is calculated as the value of all the shares held by the fund, minus
expenses, divided by the number of units issued. Mutual Funds are usually long term
investment vehicle though there are some categories of mutual funds, such as money
market mutual funds which are short term instruments.

Currently, the worldwide value of all mutual funds totals more than $US 26 trillion.
The United States leads with the number of mutual fund schemes. There are more
than 8000 mutual fund schemes in the U.S.A. Comparatively, India has around 1000
mutual fund schemes, but this number has grown exponentially in the last few years.
The Total Assets under Management in India of29
all Mutual funds put together touched
a peak of Rs. 5,44,535 crs. at the end of August 2008.
 Why Mutual Fund?

There are various investment avenues available to an investor such as real estate, bank
Deposits, post office deposits, shares, etc. A mutual fund is one more type of
Investment Avenue available to investors. There are many reasons why investors
Prefer mutual funds.

Buying shares directly from the market is one way of investing. But this requires
Spending time to find out the performance of the company whose share is being
Purchased, understanding the future business prospects of the company, finding out
the track record of the dividend, bonus issue history of the company etc. Many
Investors find it cumbersome and time consuming to pore over so much of
Information, get access to so much of details before investing in the shares.

Investors therefore prefer the mutual fund route. They invest in a mutual fund scheme
Which in turn takes the responsibility of investing in stocks and shares after due?
Analysis and research. The investor need not bother with researching hundreds of
stocks. It leaves it to the mutual fund and its professional fund management team.

Another reason why investors prefer mutual funds is because mutual funds offer
Diversification. An investor’s money is invested by the mutual fund in a variety of
shares, bonds and other securities thus diversifying the investor’s portfolio across
Different companies and sectors. This diversification helps in reducing the overall risk
of the portfolio. It is also less expensive to invest in a mutual fund since the minimum
Investment amount in mutual fund units is fairly low (Rs. 500 or so). These are some
of the reasons why mutual funds have gained in popularity over the years.

IMPORTANT CHARACTERISTICS OF A MUTUAL FUND

· A Mutual Fund actually belongs to the investors who have pooled their Funds. The
ownership of the mutual fund is in the hands of the Investors.
· A Mutual Fund is managed by investment professional and other Service providers, who
earn a fee for their services, from the funds.
· The pool of Funds is invested in a portfolio of marketable investments.

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· The value of the portfolio is updated every day.
· The investor’s share in the fund is denominated by “units”.
. The value of the units changes with change in the portfolio value, every day.
. The value of one unit of investment is called net asset value (NAV)’.
OBJECTIVES OF A MUTUAL FUND
· To provide an opportunity for lower income groups to acquire without
much difficulty, property in the form of shares.
· To Cater mainly of the need of individual investors, whose means are
small.
· To manage investor’s portfolio that provides regular income, growth,
Safety, liquidity, tax advantage and diversification.

NEED OF THE STUDY

The main aim of the project is to project Mutual Fund as a better avenue
for
Investment on a long-term or short-term basis. Mutual Fund is a
productive package
For an investor with limited finances, this project creates an awareness
that the
Mutual Fund is a worthy investment practice. Mutual Fund is a globally
proven
Instrument. Mutual Funds are”Unit Trust” as it is called in some parts of
the world
Has a long and successful history, of late Mutual Funds have become a hot
favorite
Of millions of people all over the world. The driving force of Mutual Funds
is the ‘safety of the principal’ guaranteed, plus the added advantage of
capital appreciation together with the income earned in the form of
interest or dividend. The various schemes of Mutual Funds provide the
investor with a wide range of investment options according to his risk
bearing capacities and interest besides. Mutual Funds offers an investor to
invest even a small amount of money, each Mutual Fund has a defined
investment objective and strategy. Mutual Funds schemes are managed
by respective asset managed companies sponsored by financial
institutions, banks, private companies or International firms. A Mutual
Fund is the ideal investment vehicle for todays Complex and modern
financial scenario. The study is basically made to analyze the various
open-ended equity schemes of Different Asset Management Companies to
highlight the diversity of investment thatMutual Fund offer. Thus, through
the study one would understand how a common Man could fruitfully
convert a pittance into great penny by wisely investing into the Right
scheme according to his risk taking abilities.

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 INDUSTRY PROFILE

Definition
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.

STRUCTURE OF MUTUAL FUND IN INDIA:

Mutual Funds in India follow a 3-tier structure. There is a Sponsor (the First tier),
Who thinks of starting a mutual fund? The Sponsor approaches the Securities &
Exchange Board of India (SEBI), which is the market regulator and also the regulator
For mutual funds. SEBI checks whether the person is of integrity, whether he has
Enough experience in the financial sector, his net-worth etc. Once SEBI is convinced,
the sponsor is allowed to create a Public Trust (the Second tier) as per the Indian
Trusts Act, 1882. Trusts have no legal identity in India and cannot enter into
Contracts, hence the Trustees are the people authorized to act on behalf of the Trust.
Contracts are entered into in the name of the Trustees. Once the Trust is created, it is
Registered with SEBI after which this trust is known as the mutual fund. It is
Important to understand the difference between the Sponsor and the Trust. They are
Two separate entities. Sponsor is not the Trust; i.e. Sponsor is not the Mutual Fund. It
Is the Trust which is the Mutual Fund. The Trustees role is not to manage the
Sponsor

32
Money. Their job is only to see, whether the money is being managed as per stated
Objectives. Trustees may be seen as the internal regulators of a mutual fund.

ASSET MANAGEMENT COMPANIES (AMC)

AMC forms the third tier of the mutual fund structure. Trustees appoint the Asset
Management Company (AMC), to manage investor’s money. The AMC in return
Charges a fee for the services provided and this fee is borne by the investors as it is
Deducted from the money collected from them. The AMC’s Board of Directors must
Have at least 50% of Directors who are independent directors. The AMC has to be
approved by SEBI. The AMC functions under the supervision of its Board of
Directors, and also under the direction of the Trustees and SEBI. It is the AMC, which
In the name of the Trust, floats new schemes and manages these schemes by buying
And selling securities. In order to do this the AMC needs to follow all rules and
Regulations prescribed by SEBI and as per the Investment Management Agreement it
Signs with the Trustees. If any fund manager, analyst intends to buy/ sell some
A security, the permission of the Compliance Officer is a must. A compliance Officer
is one of the most important persons in the AMC. Whenever the fund intends to
launch a new scheme, the AMC has to submit a Draft Offer Document to SEBI. This
draft offer document, after getting SEBI approval becomes the offer document of the
scheme. The Offer Document (OD) is a legal document and investors rely upon the
Information provided in the OD for investing in the mutual fund scheme. The
Compliance Officer has to sign the Due Diligence Certificate in the OD. This
Certificate says that all the information provided inside the OD is true and correct.
This ensures that there is accountability and somebody is responsible for the OD. In

33
Case there is no compliance officer, then senior executives like CEO, Chairman of the
AMC has to sign the due diligence certificate. The certificate ensures that the AMC
Takes responsibility of the OD and its contents.

CUSTODIAN
A custodian’s role is safe keeping of physical securities and also keeping a tab on the
Corporate actions like rights, bonus and dividends declared by the companies in which
the fund has invested. The Custodian is appointed by the Board of Trustees. The
Custodian also participates in a clearing and settlement system through approved
Depository companies on behalf of mutual funds, in case of dematerialized securities.
In India today, securities and units of mutual funds are no longer held in physical
form but mostly in dematerialized form with the Depositories. The holdings are held
In the Depository through Depository Participants (DPs). The deliveries and receipt of
Units of a mutual fund are done by the custodian or a depository participant at the
Instruction of the AMC and under the overall direction and responsibility of the
Trustees. Regulations provide that the Sponsor and the Custodian must be separate
Entities.
Types of Mutual Funds Schemes in India

Wide variety of Mutual Fund Schemes exists to cater to the needs such as financial
position, risk tolerance and return expectations etc. Being a collection of many stocks,
investors can go for picking a mutual fund might be easy. There are over hundreds OFmutual
funds scheme to choose from.

It is easier to think of mutual funds in categories, mentioned below.

1. By structure
o Open - Ended Schemes
o Close - Ended Schemes

2. By Investment Objective
o Growth Schemes
o Income Schemes
o Balanced Schemes
o Money Market Schemes
·

34
Other Schemes
o Tax Saving Schemes
o Special Schemes
Index Schemes
 Sector Specific Schemes

Classification of schemes based on structure:

Open - Ended Schemes:

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.

Close - Ended Schemes:

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
selling back the units to the Mutual Fund through periodic repurchase at NAV
related prices. SEBI Regulations stipulate that at least one of the two exit routes is
provided to the investor.

Classification of schemes based on the investment objective:

Growth Schemes:

35
Growth Schemes are also known as equity schemes. The aim of these schemes is to
provide capital appreciation over medium to long term. These schemes normally
invest a major part of their fund in equities and are willing to bear short-term decline
in value for possible future appreciation.

Income Schemes:
Income Schemes are also known as debt schemes. The aim of these schemes is to
provide regular and steady income to investors. These schemes generally invest in
fixed income securities such as bonds and corporate debentures. Capital appreciation
in such schemes may be limited.
Balanced Schemes:
Balanced Schemes aim to provide both growth and income by periodically
distributing a part of the income and capital gains they earn. These schemes invest in
both shares and fixed income securities, in the proportion indicated in their offer
documents (normally 50:50).
Money Market Schemes:
Money Market Schemes aim to provide easy liquidity, preservation of capital and
moderate income. These schemes generally invest in safer, short-term instruments,
such as treasury bills, certificates of deposit, commercial paper and inter-bank call
money.

Other schemes:
· Tax Saving Schemes:
Tax-saving schemes offer tax rebates to the investors under tax laws prescribed from
time to time. Under Sec.88 of the Income Tax Act, contributions made to any Equity

36
Linked Savings Scheme (ELSS) are eligible for rebate.
· Index Schemes:
Index schemes attempt to replicate the performance of a particular index such as the
BSE Sensex or the NSE 50. The portfolio of these schemes will consist of only those
stocks that constitute the index. The percentage of each stock to the total holding will
be identical to the stocks index weightage. And hence, the returns from such schemes
would be more or less equivalent to those of the Index.
· 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 must exit at an appropriate time
MUTUAL FUND INVESTING STRATEGIES:
1. Systematic Investment Plans (SIPs)
These are best suited for young people who have started their careers and need to
build their wealth. SIPs entail an investor to invest a fixed sum of money at regular
intervals in the Mutual fund scheme the investor has chosen, an investor opting for
SIP in xyz Mutual Fund scheme will need to invest a certain sum on money every
month/quarter/half-year in the scheme.
2. Systematic Withdrawal Plans (SWPs)
These plans are best suited for people nearing retirement. In these plans, an investor
invests in a mutual fund scheme and is allowed to withdraw a fixed sum of money at
regular intervals to take care of his expenses
3. Systematic Transfer Plans (STPs)
They allow the investor to transfer on a periodic basis a specified amount from one
scheme to another within the same fund family – meaning two schemes belonging to
the same mutual fund. A transfer will be treated as redemption of units from the
scheme from which the transfer is made. Such redemption or investment will be at
the applicable NAV. This service allows the investor to manage his investments
actively to achieve his objectives. Many funds do not even charge any transaction
fees for his service – an added advantage for the active investor.

37
ADVANTAGES OF INVESTING IN MUTUAL FUND
Affordable
Almost everyone can buy mutual funds. Even for a sum of Rs 1,000 an investor can
invest in a mutual fund.
Professional Management
For an average investor, it is a difficult task to decide what securities to buy, how
much to buy and when to sell. By buying a mutual fund, you acquire a professional
fund manager who manages your money. This is the person who decides what to buy
for you, when to buy it and when to sell. The fund manager takes these decisions after
doing adequate research on the economy, industries and companies, before buying
stocks or bonds. Most mutual fund companies charge a small fee for providing this
service which is called the management fee.
Diversification
According to finance theory, when your investments are spread across several
securities, your risk reduces substantially. A mutual fund is able to diversify more
easily than an average investor across several companies, which an ordinary investor
may not be able to do. With an investment of Rs.5000, you can buy stocks in some of
the top Indian companies through a mutual fund, which may not be possible to do as
an individual investor.
Liquidity
Unlike several other forms of savings like the public provident fund or National
Savings Scheme, you can withdraw your money from a mutual fund on immediate
basic.
Tax Benefits
Mutual funds have historically been more efficient from the tax point of view. A debt
fund pays a dividend distribution tax of 12.5 per cent before distributing dividend to
an individual investor or an HUF, whereas it is 20 per cent for all other entities. There
is no dividend tax on dividends from an equity fund for individual investor.

Transparency
The investor gets regular information on the value of his investment in addition to
disclosure on the specific investments made by the fund, the proportion invested in
each class of assets and the fund manager’s investment strategy and outlook.

38
Risks Associated With Mutual Funds
Investing in Mutual Funds, as with any security, does not come without risk. One of
the most basic economic principles is that risk and reward are directly correlated. In
other words, the greater the potential risk the greater the potential return. The types
of risk commonly associated with Mutual Funds are:
1) Market Risk
Market risk relates to the market value of a security in the future. Market prices
fluctuate and are susceptible to economic and financial trends, supply and demand,
and many other factors that cannot be precisely predicted or controlled.
2) Political Risk
Changes in the tax laws, trade regulations, administered prices, etc are some of the
many political factors that create market risk. Although collectively, as citizens, we
have indirect control through the power of our vote individually, as investors, we
have virtually no control.
3) Inflation Risk
Interest rate risk relates to future changes in interest rates. For instance, if an
investor invests in a long-term debt Mutual Fund scheme and interest rates increase,
the NAV of the scheme will fall because the scheme will be end up holding debt
offering lower interest rates.
4) Business Risk
Business risk is the uncertainty concerning the future existence, stability, and
profitability of the issuer of the security. Business risk is inherent in all business
ventures. The future financial stability of a company cannot be predicted or
guaranteed, nor can the price of its securities.
Adverse changes in business circumstances will reduce the market price of the
company’s equity resulting in proportionate fall in the NAV of the Mutual Fund
scheme, which has invested in the equity of such a company.

5) Economic Risk
Economic risk involves uncertainty in the economy, which, in turn, can have an
adverse effect on a company’s business. For instance, if monsoons fail in a year,
equity stocks of agriculture-based companies will fall and NAVs of Mutual Funds,
which have invested in such stocks, will fall proportionately.

SCHEMES

39
Equity/Growth Schemes
The aim of growth funds is to provide capital appreciation over the medium to longterm.
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.

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. 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.

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
must exit at an appropriate time. They may also seek advice of an expert.

40
comparison between bank fixed deposit with different mutual fund return

Reliance Growth – Growth

Fund Objective
The scheme aims at long term growth of capital through research based
investment approach. The funds will be invested in Equity and equity
related instruments ,and there will be an exposure to debt and money
market instruments also.

RELIANE GROWTH

Year RP RM RF
last 1 27.47 21.17 3.23
year
last 3 19.36 10.48 3.23
years
last 5 YEARS 34.85 25.27 3.23
Years 47.23

where
Rp - Portfolio Return-Reliance growth-growth
Rm - Market Return-Fund’s Benchmark BSE-100
Rf - Risk free rate of return

Interpretation
• Last 1 year : It reveals that Reliance growth Fund Returns
are 27.47 as compare to Funds Benchmark Returns Are
21.17, and The Risk Free Rate is 3.23%
• Last 3 years : It reveals that Reliance growth Fund Returns
are 19.36 as compare to Funds Benchmark Returns are 10.48,
and The Risk Free Rate is 3.23%
• Last 5 years : It reveals that Reliance growth Fund Returns
are 34.85 as compare to Funds Benchmark Returns are 25.27
and The Risk Free Rate is 3.23%

41
Sundaram BNP Paribas Select Midcap
Fund Objective
The scheme aims to achieve capital appreciation by investing in mid-cap stocks.
The

fund defines 'midcap' as a stock whose market capitalization shall not exceed the

market capitalization of the 50th stock (after sorting the securities in the
descending
Year RP RM RF
last 1 32.39 21.17 3.23
year
last 3 12.83 10.48 3.23
years
last 5 YEARS 33.33 25.27 3.23
years 47.23

where

Rp - Portfolio Return- Sundaram BNP Paribas Select Midcap

Rm - Market Return-Fund’s Benchmark BSE Mid Cap

Rf - Risk free rate of return

Interpretation:-

Last
 1 year : It reveals that Sundaram BNP Paribas select midcap Fund Returns are 32.39 as
compare to Funds Benchmark Returns Are 21.17 and The Risk Free Rate is 3.23%)

Last
 3 years : It reveals that Sundaram BNP Paribas select midcap Fund Returns are 12.83
as compare to Funds Benchmark Returns are 10.48, and The Risk Free Rate is 3.23%

Last
 5 years : It reveals that Sundaram BNP Paribas select midcap Fund Returns are 33.33
as compare to Funds Benchmark Returns are 25.27, and The Risk Free Rate is 3.23%.

Brila Sun life Midcap Fund Plan A

42
Fund Objective
The scheme aims at long-term growth of capital at controlled level of risk
by
Investing primarily in mid-cap stocks, to generate returns higher than a
fund focused on large and liquid stocks.

Year RP RM RF
last 1 36.07 21.17 3.23

year

last 3 17.18 10.48 3.23

years

last 5 YEARS 29.98 25.27 3.23

years 47.23

where

Rp - Portfolio Return- Brila Sunlife Midcap Fund plan A

Rm - Market Return-Fund’s Benchmark CNX Midcap

Rf - Risk free rate of return

Interpretation:-

Last
 1 year : It reveals that Brila Sunlife Midcap Fund plan A

Returns are 36.07 as compare to Funds Benchmark Returns

are 21.17 and The Risk Free Rate is 3.23%)

Last
 3 years : It reveals that Birla Sun life Midcap Fund plan

A Returns are 17.18 as compare to Funds Benchmark Returns

are 10.48, and The Risk Free Rate is 3.23%

Last
 5 years : It reveals that Birla Sun life madcap Fund plan

A Returns are 29.98 as compare to Funds Benchmark Returns

are 25.27, and The Risk Free Rate is 3.23%

SBI Magnum Global Fund 94 – Growth

43
Fund Objective
The scheme seeks to prove maximum growth opportunities from a
portfolio of equity and debt instruments of companies having high growth
potential.

where
Rp - Portfolio Return-SBI Magnum Global fund 94 -growth
Rm - Market Return-Fund’s Benchmark BSE-100
Rf - Risk free rate of return

Year RP RM RF
last 1 14.48 21.17 3.23
year
last 3 6.33 10.48 3.23
years
last 5 YEARS 29.48 25.27 3.23
years 47.23

Interpretation:-
Last
 1 year : It reveals that SBI Magnum Global fund Returns
are 14.48 as compare to Funds Benchmark Returns are 21.17
and The Risk Free Rate is 3.23%)

Last
 3 years : It reveals that SBI Magnum Global fund
Returns are 6.33 as compare to Funds Benchmark Returns are
10.48, and The Risk Free Rate is 3.23%

Last
 5 years : It reveals that SBI Magnum Global fund
Returns are 29.48 as compare to Funds Benchmark Returns
are 25.27, and The Risk Free Rate is 3.23%

Franklin India Prima Fund – Growth

Fund Objective
44
The primary objective of the fund is capital appreciation and secondary objective is

income generation by focusing on mid and small cap industry

where

Rp - Portfolio Return-Franklin India Prima Fund growth

Year RP RM RF

last 1 22.29 21.17 3.23

year

last 3 5.07 10.48 3.23

years

last 5 YEARS 20.58 25.27 3.23

years 47.23

Rm - Market Return-Fund’s Benchmark S&P CNX 500

Rf - Risk free rate of return

Interpretation:-Last
 1 year : It reveals that Franklin India Prima Fund Returns

are 22.29 as compare to Funds Benchmark Returns are 21.17

and The Risk Free Rate is 3.23%)

Last
 3 years : It reveals that Franklin India Prima Fund

Returns are 5.07 as compare to Funds Benchmark Returns are

10.48, and The Risk Free Rate is 3.23%

• Last 5 years : It reveals that Franklin India Prima Fund

Returns are 20.58 as compare to Funds Benchmark Returns

are 25.27, and The Risk Free Rate is

Return on different mutual fund in India

45
 Last 1 year Last 3 year Last 5 year
MUTUAL FUND
In% In% In%
Reliance pharma 133.91 31.28 31.57
fund
Sundaram bnp 49.35 10.03 16.83
Paribas balance
Sundaram bnp 58.36 8.3 20.52
Paribas growth
fund
Sundaram bnp 5.3 6.87 9.86
Paribas flexible
fund

Sundaram bnp 55.7 9.43 21.81

Paribas india
ledershipfund

Sundaram BNP 89.4 21.3 24.75

Paribas SMILE Fund

Birla Sun Life Basic 73.91 13.25 22.21

Industries

Birla Sun Life MNC 84.96 13.88 20.83

Fund

Birla Sun Life frontline 61.80 15. 68 27.26

fund

Birla Sun Life 60.80 6.89 18.46

advantages fund

46
Tupe of mutul LAST 1 year LAST2 year LAST 5 year
fund In % In% In%

Franklin India Bluechip 56.91 13.9 25.34

- Growth

Franklin India 46.54 4.46 20.46

Opportunity Fund

Templeton India 70.59 17.58 25.57

Growth Fund

Templeton India tax 58.94 13.71 22.29

shield Growth

Sbi magnum tax 85.39 6.82 19.86

gain

SBI Magnum SFU - 66.1 9.4 20.9

Contra Fund

Birla Sun Life 95 fund 53.56 15.43 22.04

–birla sun life basic
industry
Type Open Ended

Nature Equity

Option Growth

Inception Date Jan 15, 2000

Face Value 10

Fund Size (Rs.Crore) 140.09 as on Apr 30, 2010

Fund Manager Ankit Sancheti .

SIP NA

STP NA

SWP NA

Expense ratio(%) 2.44

Portfolio Turnover Ratio(%) 47

47
Last Dividends Declared NA

Minimum Investment (Rs) 5000

Purchase Redemptions Daily

 RETURN

1 year-73.91

3 year-13.25

5 year-22.21

Since inception-25.01

FranklinReliance pharma
Templeton fund
India balanced
fund
Type Open Ended
Type Open Ended

NatureNature Equity &Equity (Equity:

Debt (Equity: 93.05%,
67.26%, Debt: 0%,
Debt: 27.75%, Cash: 4.99%) RETURN
Option Growth
Cash: 6.95%)
Inception Date Dec 10, Growth
1999 1 year-36.07
Option
Face Value 10
3 year-10.65
Inception
Fund Size Date
(Rs.Crore) Jun
298.96 as on5, 2004
Apr 30, 2010

Fund Manager
Face Value Vivek Ahuja .
10
5 year-18.81
SIP NA
Fund Size (Rs.Crore) 379.41 as on Apr 30, 2010 Since
STP NA
inception-15.63
SWP NA
Fund Manager Sailesh Raj Bhan .
Expense ratio(%) 2.33
SIPTurnover
Portfolio NA
57.83
Ratio(%)
STP
Last Divdend Declared NA
NA
RETURN
Minimum Investment (Rs) 5000
SWP NA 1 year-70.59
Purchase Redemptions Daily
Expense ratio(%) 2.36 3 year-17.58

Portfolio Turnover 5 year-25.57

21
Ratio(%)

Last Divdend Declared NA Since inception-19.49

Minimum Investment
5000
(Rs)
48
Purchase Redemptions Daily

NAV Calculation Daily

 Sundaram bnp Paribas select focus RETURN
Type Open Ended
1 year-49.14
Nature Equity (Equity: 97.57%, Debt: 0%, Cash: 2.43%)
3 year-11.63
Option Growth
5 year-25.34
Inception Date Jul 30, 2002

Face Value 10 Since

inception-
Fund Size (Rs.Crore) 1193.15 as on Apr 30, 2010 31.31

Fund Manager Srividhya Rajesh .

SIP NA

STP NA

SWP NA

Expense ratio(%) 1.98

Portfolio Turnover Ratio(%) 304

Last Divdend Declared NA

Minimum Investment (Rs) 5000

49
50
51
 INTEREST RATE OF DIFFERENT BANK IN
YEAR 2010

BANK NAME

Aallhabad bank

Am.express

Andhra bank
b.n.p

Bank of baroda

Bank of punjab

Bank of rajastan

Banara st.bank

Bharat overse
bank

Bank of india

Bank of madura

Bank of
Maharashtra

Bank of
tokyomits

52
 Canara bank

Central bank of
india

Centurion bank

City union bank

Dena bank

Dev cr.bank

Hdfc bank

Hsbc bank

Icici bank

Idbi bank

Indian overse bank

Indian bank

Indusind bank

Karnataka bank

Laxmi bilas
bank

Punjab
national
bank

State bak of
hydrabad

State bak
of patiala

53
State bank of
saurastra

State bank of
indore

State bank of
india

Syndicate
bank

Uco bank

Union bank of
india

United bank
of india

Uti bank

Vijaya bank

Vysya bank

54
The study was conducted mainly in the city of Bhubaneswar. The data used is secondary. For
the purpose of the survey 85 people were interviewed but actual and positive replies were
received from 25 people. There were some people who invested in mutual fund but refused
any information. So, they are kept out from the purview of the survey.

Q1. Do you invest in mutual fund? (Please tick)

a)yes

b)NO

ANS; The total samle size as told above was 85. Positive replies were received from 25
people,i.e 71% said that they did not invest ib mutual fund because some of them did not
knew anything about the scripts. Some said that they did not invest they suffered huge losses
from us 64. Moreover, there were some people who invested in mutual funds but did not want
to disclose any information. So, these people were kept out from the purview of the survey.

INVESTMENT IN MUTUALFUND

YES, 29

NO, 71

55
Q 2. In which kind of fund you wish to invest?
a)equity

b)debt

c)balance

ANS; of the 25 positive result . Whereas 12 people i.e. 48% said that they invested in equity
while 8 people i.e. 32%said that they invested in debt. however there are 5 people i.e. 20%
invested both in equity and debt. The people who said that they invested in balance fund were
aged people and were not at all risk averse, whereas those who invested in equity were ready
to take risk and had high income. Similarly. Those who said that they invested in debt wanted
regular return and generally invested in MIP.

INVESTD IN FUND

DEBT, 32
EQUITY, 48

BALANCE, 20

56
Q 3-please state the reason for investing in this particular type of scheme?
a)HIGH RETURN

b)MODERATE RETURN

c)LOW RETURNV

ANS; out that 25 people 10 people i.e 40% wanted high return because they have risk
takiong capacity. Then 8 people i.e 32% wanted moderate return and rest 7 people i.e
28%wanted low return because they did not have the risk taking capacity.

RETURN

HIGH LOW
RETURN, 40 RETURN, 28

MODERATE
RETURN, 32

As told above, the person who had high income and expected high returns opted for
equity, whereas the persons who wanted a moderated return opted for debt funds and
hence stated the same reason. At the same time who did not want for their investment.

57
 Q 4- in which option do you prefer ton invest?

A) GROWTH

B) DIVIDEND

C) REINVESTMENT

ANS- out of 25 people , 15 people 60%said that they preferred to invest in growth
option,while 6 people i.e 24%said that they preferred dividend option while the 4 people i.e
16%opted for reinvestment option.

The prime reason stated for opting the growth option was that people
wanted their money to grow in that scheme , while the persons who
showed their preference for reinvestment scheme gave the reason that
they wanted their extra earning from the scheme to be invested again in
the same scheme thereby increasing the number of unit.

58
Q 5 –please state the reason for investing in his particular type of option?

Ans – the reason given is stated as above.at the same time besides giving these reson most of
the peole said that for saving tax and to reduce loss of revenue they wanted to opt for the
same

Q 6-how do you want to invest in mutual fund;s ?

a)sip system

b)once in evey six month

c)one time investment

ANS- out of 25 people 8 people i.e 32%said that they invest through sip system while 6
people i.e 24%said that they invest once six months and the remaning11 people11 peoplei.e
44%said they invest in one time.

Frequency in investment

ONCE IN EVERY
SIXMONTH, 24

ONE TIME
INVESTMENT, 44

SIP
INVESTMENT, 32

59
Q 7- what is the average quantum of your investment?

Ans –none of the 35 people answered to this question.

Q 8- from where have you come to know about this particular scheme in which
you are investing?

a)news paper

b)television

c)journal

d)agencies

ans – out of 25 people 12 people i.e 71%said they have come to know about this
scheme from agencies and distribution houses. while 6 people i.e11%said that
they came to know from television.however,4 peoplei.e9%said that they came to
know from journal and the rest 3 people i.e 9% said that they came to know from
newspaper.

SOURCES OF GETTING INFORMATION

NEWS
PAPER9, 9

TELIVISION, 11

JOURNAL, 9

AGENCIES, 71

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Q 9- according to you which AMC is doing well out of these 7 AMC’S ?(please tick)
A)PRU ICICI MUTUAL FUND

B)HDFC MUTUAL FUND

C)FRANKLIN TEMPLETON MUTUAL FUND

D)BIRLA SUN LIFE MUTUAL FUND

E)KOTAK MUTUAL FUND

F)UTI MUTUAL FUND

G)TATA MUTUAL FUND

Ans – out of 25 people 10 people i.e 40% said Franklin Templeton is doing well since they
are getting good return on their investment. Again 6 people i.e. 24%said that hdfc is doing
well while 3 ands 3 people i.e 125 and 12% respectively said that prudential icici and uti
mutual fund is doing well. Again 2 people i.e 8% said that Birla mutual fund is doing well &
1 person i.e. 4%said that Tata mutual fund is doing well. Having, analyzed about the different
schemes it is now quite easy to understand the reason now.

PERFORMANCE OF AMC;S

PRU ICICI KOTAK HDFC TATA BIRLA FRANKLIN TEM

0%
14%

45%
27%

9%
5%

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CONCLUSION
In my study I have found that bank interest rate are falling continuously, for this I had taken
five years interest rate from 2006-2010. In the year 2005 the interest rate of term deposit was
fallings.

1-2 year the interest rate was

2 - 3year the interest rate was

3-year or above interest rate was

Similarly in the year 2006

1- 2year the interest rate was

2 - 3year the interest rate was

3 year or above the interest rate was

Similarly in the year 2007

1-2 year the interest rate was

2-3 year the interest rate was

3 year or above the interest rate was

Similarly in the year 2008

1-2 year the interest rate was

2-3 year the interest rate was

3 year or above the interest rate was

Similarly in the year 2009

1-2 year the interest rate was

2-3 year the interest rate was

3 year or above the interest rate was

Similarly in the year 2010

1-2 year the interest rate was

2-3 year the interest rate was

3 year or above the interest rate was

For senior citizen

62
Similarly in the year 2005

1-2 year the interest rate was

2-3 year the interest rate was

3 year or above the interest rate was

Similarly in the year 2006

1-2 year the interest rate was

2-3 year the interest rate was

3 year or above the interest rate was

Similarly in the year 2007

1-2 year the interest rate was

2-3 year the interest rate was

3 year or above the interest rate was

Similarly in the year 2008

1-2 year the interest rate was

2-3 year the interest rate was

3 year or above the interest rate was

Similarly in the year 2009

1-2 year the interest rate was

2-3 year the interest rate was

3 year or above the interest rate was

Similarly in the year 2010

1-2 year the interest rate was

2-3year the interest rate was

3 year or above the interest rate was

63
64
Bibliography
There are no sources in the current document.

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