Project Reliance Mutul Fund

PROJECT REPORT
ON
ANALYSIS OF RELIANCE MUTUAL

FUND
SCHEMES & DISTRIBUTION
NETWORK
Submitted in the partial fulfillment for the award of
Degree of Master of Business Administration
Submitted
To
RAI BUSINESS SCHOOL
Submitted by
Nitesh Kumar
Semester 3rd
RAI BUSINESS SCHOOL, New Delhi
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INTRODUCTION
There are a lot of investment avenues available today in the financial market for
an investor with an invest able surplus. He can invest in Bank Deposits,
Corporate Debentures, Bonds, Mutual Fund where there is low risk but low
return. He may invest in Stock of companies where the risk is high and the
returns are also proportionately high. The recent trends in the Mutual Fund
Market have shown that an average retail investor always gain with good return.
People began opting for fund managers with expertise in markets who would
invest on their behalf. Thus we had wealth management services provided by
many institutions. However they proved too costly for a small investor. These
investors have found a good shelter with the mutual funds.
Like most developed and developing

countries the mutual fund cult has been catching on in India. The reasons for
this interesting occurrence are:
1. Mutual funds make it easy and less costly for investors to satisfy their need
for capital growth, income and/or income preservation.
2. Mutual fund brings the benefits of diversification and money management

to the individual investor, providing a
Opportunity for financial success that was once available only to a select few.
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Through its products and services, the Reliance - ADA Group touches the life of 1 in 10 Indians
every single day. It has a business presence that extends to over 20000 towns and 4.5 lakhs villages in
India, and 5 continents across the world.
The interests of the Group range from communications (Reliance Communications) and financial
services (Reliance Capital Ltd), to generation, transmission and distribution of power (Reliance
Energy), infrastructure and entertainment.
Reliance Anil Dhirubhai Ambani Group (Reliance ADAG) ranks among India's top three private
sectors business houses. The group has a market capitalization of US$ 22 billion, net assets in excess
of US$ 7 billion, and net worth to the tune of US$ 6 billion. Reliance Anil Dhirubhai Ambani Group
has a customer base of over 50 million, the largest in India, and a shareholder base of over 8 million,
among the largest in the world. R-ADAG has a business presence that is spread over 4,500 towns and
300,000 villages in India, and 5 continents across the world.
Reliance Anil Dhirubhai Ambani Group came into existence when the business empire of the
Reliance Group founded by Dhirubhai Ambani was split between his two sons, Mukesh and Anil.
Mukesh Ambani, the elder brother, retained Reliance Industries Limited (RIL), the flagship company
of the Reliance Group. The part of the empire that was inherited by the younger brother Anil Ambani
was christened as Reliance Anil Dhirubhai Ambani Group. Hence, one can say that the founder of
Reliance ADAG was Dhrubhai Ambani. The interests of the Reliance Anil Dhirubhai Ambani span
communications, financial services, generation, transmission and distribution of power, infrastructure
and entertainment.
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COMPANIES OF RELIANCE ADAG
Reliance Communications Limited: Reliance Communications Limited is the flagship company

of the Reliance - ADA Group. The company is the culmination of Dhirubhai's dream of bringing
about a digital revolution that will provide every Indian with affordable means of communication
and a ready access to information. Reliance Communications Limited started operations in 1999
and has over 20 million subscribers today. It offers a complete range of integrated telecom services
such as mobile and fixed line telephony, broadband, national and international long distance
services, data services and a wide range of value added services.
Reliance Capital: Reliance Capital is one of India's leading private sector financial services
companies. Reliance Capital deals in asset management and mutual funds, life and general
insurance, private equity and proprietary investments, stock broking and other activities in financial
services.
Reliance Energy Limited: Reliance Energy Limited is a fully integrated utility engaged in the
generation, transmission and distribution of electricity. The company distributes more than 21
billion units of electricity to over 25 million consumers in Mumbai, Delhi, Orissa and Goa.
Reliance Energy Limited currently generates 941 MW of electricity, through its power stations
located in Maharashtra, Andhra Pradesh, Kerala, Karnataka and Goa. It is currently pursuing a
number of gas, coal, wind and hydro-based power generation projects in Maharashtra, Uttar
Pradesh, Arunachal Pradesh and Uttaranchal with total capacity of over 12,500 MW.
Reliance Media & Entertainment: Reliance Media & Entertainment has interest in Movies,
Music, Sports, Gaming, Internet & mobile portals, Digital cinema, IPTV, DTH and Mobile TV. In
2005, Reliance ADA Group acquired Adlabs Films Limited, one of the largest entertainment
companies in India, which has interests in film processing, production, exhibition & digital cinema.
Reliance Entertainment has also forayed into the FM Radio business through BIG 92.7 FM.
Reliance Health: Reliance Health aims at providing integrated health services and plans to venture
into diversified fields like Insurance Administration, Health care Delivery and Integrated Health,
Health Informatics and Information Management and Consumer Health.
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ABOUT THE 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/or
other securities. The mutual fund will have a fund manager that trades the pooled money on a regular
basis. As of early 2008, the worldwide value of all mutual funds totals more than $26 trillion.
Since 1940, there have been three basic types of investment companies in the United States: open-end
funds, also known in the US as mutual funds; unit investment trusts (UITs); and closed-end funds.
Similar funds also operate in Canada. However, in the rest of the world, mutual fund is used as a
generic term for various types of collective investment vehicles, such as unit trusts, open-ended
investment companies, unitized insurance funds, and undertakings for collective investments in
transferable securities.
Working of Mutual Fund
Regulatory Authorities:-
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To protect the interest of the investors, SEBI formulates policies and regulates the mutual funds. It
notified regulations in 1993 (fully revised in 1996) and issues guidelines from time to time. MF either
promoted by public or by private sector entities including one promoted by foreign entities is
governed by these Regulations.
SEBI approved Asset Management Company (AMC) manages the funds by making investments in
various types of securities. Custodian, registered with SEBI, holds the securities of various schemes
of the fund in its custody.
According to SEBI Regulations, two thirds of the directors of Trustee Company or board of trustees
must be independent.
The Association of Mutual Funds in India (AMFI) reassures the investors in units of mutual funds
that the mutual funds function within the strict regulatory framework. Its objective is to increase
public awareness of the mutual fund industry.
AMFI also is engaged in upgrading professional standards and in promoting best industry practices in
diverse areas such as valuation, disclosure, transparency etc.
What is a Mutual Fund?

A mutual fund is just the connecting bridge or a financial intermediary that allows a group of
investors to pool their money together with a predetermined investment objective. The mutual fund
will have a fund manager who is responsible for investing the gathered money into specific securities
(stocks or bonds). When you invest in a mutual fund, you are buying units or portions of the mutual
fund and thus on investing becomes a shareholder or unit holder of the fund.
Mutual funds are considered as one of the best available investments as compare to others they are
very cost efficient and also easy to invest in, thus by pooling money together in a mutual fund,
investors can purchase stocks or bonds with much lower trading costs than if they tried to do it on
their own. But the biggest advantage to mutual funds is diversification, by minimizing risk &
maximizing returns.
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Diversification
Diversification is nothing but spreading out your money across available or different types of
investments. By choosing to diversify respective investment holdings reduces risk tremendously up to
certain extent.
The most basic level of diversification is to buy multiple stocks rather than just one stock. Mutual
funds are set up to buy many stocks. Beyond that, you can diversify even more by purchasing
different kinds of stocks, then adding bonds, then international, and so on. It could take you weeks to
buy all these investments, but if you purchased a few mutual funds you could be done in a few hours
because mutual funds automatically diversify in a predetermined category of investments (i.e. -
growth companies, emerging or mid size companies, low-grade corporate bonds, etc
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. thus mutual funds has Variety of flavors, Being a collection of
many stocks, an investors can go for picking a mutual fund might be easy. There are over hundreds of
mutual funds scheme to choose from. It is easier to think of mutual funds in categories, mentioned
below.
Overview of existing schemes existed in mutual fund category:

BY STRUCTURE:-
1. 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.
2. Close - Ended Schemes:

These schemes have a pre-specified maturity period. One can invest directly in the scheme at the time
of the initial issue. Depending on the structure of the scheme there are two exit options available to an
investor after the initial offer period closes. Investors can transact (buy or sell) the units of the scheme
on the stock exchanges where they are listed. The market price at the stock exchanges could vary
from the net asset value (NAV) of the scheme on account of demand and supply situation,
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expectations of unit holder and other market factors. Alternatively some close-ended schemes provide
an additional option of selling the units directly to the Mutual Fund through periodic repurchase at the
schemes NAV; however one cannot buy units and can only sell units during the liquidity window.
SEBI Regulations ensure that at least one of the two exit routes is provided to the investor.
3. Interval Schemes:
Interval Schemes are that scheme, which combines the features of open-ended and close-ended
schemes. The units may be traded on the stock exchange or may be open for sale or redemption
during pre-determined intervals at NAV related prices.
The risk return trade-off indicates that if investor is willing to take higher risk then correspondingly
he can expect higher returns and vise versa if he pertains to lower risk instruments, which would be
satisfied by lower returns. For example, if an investors opt for bank FD, which provide moderate
return with minimal risk. But as he moves ahead to invest in capital protected funds and the profit-
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bonds that give out more return which is slightly higher as compared to the bank deposits but the risk
involved also increases in the same proportion.
Thus investors choose mutual funds as their primary means of investing, as Mutual funds provide
professional management, diversification, convenience and liquidity. That doesn’t mean mutual fund
investments risk free. This is because the money that is pooled in are not invested only in debts funds
which are less riskier but are also invested in the stock markets which involves a higher risk but can
expect higher returns. Hedge fund involves a very high risk since it is mostly traded in the derivatives
market which is considered very volatile.
Overview of existing schemes existed in mutual fund category:

BY NATURE:-
Equity fund:
These funds invest a maximum part of their corpus into equities holdings. The structure of the fund
may vary different for different schemes and the fund manager’s outlook on different stocks. The
Equity Funds are sub-classified depending upon their investment objective, as follows:
 Diversified Equity Funds
 Mid-Cap Funds
 Sector Specific Funds
 Tax Savings Funds (ELSS)
Equity investments are meant for a longer time horizon, thus Equity funds rank high on the risk-
return matrix.
Debt funds
The objective of these Funds is to invest in debt papers. Government authorities, private companies,
banks and financial institutions are some of the major issuers of debt papers. By investing in debt
instruments, these funds ensure low risk and provide stable income to the investors.
Gilt Funds
Invest their corpus in securities issued by Government, popularly known as Government of India debt
papers. These Funds carry zero Default risk but are associated with Interest Rate risk. These schemes
are safer as they invest in papers backed by Government.
Income Funds
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Invest a major portion into various debt instruments such as bonds, corporate debentures and
Government securities.
MIPs
Invests maximum of their total corpus in debt instruments while they take minimum exposure in
equities. It gets benefit of both equity and debt market. These scheme ranks slightly high on the risk-
return matrix when compared with other debt schemes.
Short Term Plans (STPs)

Meant for investment horizon for three to six months. These funds primarily invest in short term
papers like Certificate of Deposits (CDs) and Commercial Papers (CPs). Some portion of the corpus
is also invested in corporate debentures.
Liquid Funds
Also known as Money Market Schemes, These funds provides easy liquidity and preservation of
capital. These schemes invest in short-term instruments like Treasury Bills, interbank call money
market, CPs and CDs. These funds are meant for short-term cash management of corporate houses
and are meant for an investment horizon of 1day to 3 months. These schemes rank low on risk-return
matrix and are considered to be the safest amongst all categories of mutual funds.
Balanced Funds
As the name suggest they, are a mix of both equity and debt funds. They invest in both equities and
fixed income securities, which are in line with pre-defined investment objective of the scheme. These
schemes aim to provide investors with the best of both the worlds. Equity part provides growth and
the debt part provides stability in returns.
Further the mutual funds can be broadly classified on the basis of investment
parameter-
Each category of funds is backed by an investment philosophy, which is pre-defined in the objectives
of the fund. The investor can align his own investment needs with the funds objective and invest
accordingly.
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By investment objective:
Growth Schemes:
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 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
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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.
Types of returns
There are three ways, where the total returns provided by mutual funds can be enjoyed by investors:
If income is earned from dividends on stocks and interest on bonds. A fund pays out nearly all
income it receives over the year to fund owners in the form of a distribution.
If the fund sells securities that have increased in price, the fund has a capital gain. Most funds also
pass on these gains to investors in a distribution.
If fund holdings increase in price but are not sold by the fund manager, the fund's shares increase in
price. You can then sell your mutual fund shares for a profit. Funds will also usually give you a
choice either to receive a check for distributions or to reinvest the earnings and get more shares.
Advantages of Investing Mutual Funds:
1. Professional Management - The basic advantage of funds is that, they are professional
managed, by well qualified professional. Investors purchase funds because they do not have the time
or the expertise to manage their own portfolio. A mutual fund is considered to be relatively less
expensive way to make and monitor their investments.
2. Diversification - Purchasing units in a mutual fund instead of buying individual stocks or bonds,
the investors risk is spread out and minimized up to certain extent. The idea behind diversification is
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to invest in a large number of assets so that a loss in any particular investment is minimized by gains
in others.
3. Economies of Scale - Mutual fund buy and sell large amounts of securities at a time, thus help to
reducing transaction costs, and help to bring down the average cost of the unit for their investors.
4. Liquidity - Just like an individual stock, mutual fund also allows investors to liquidate their
holdings as and when they want.
Disadvantages of Investing in Mutual Funds:
1. Professional Management- Some funds doesn’t perform in neither the market, as their
management is not dynamic enough to explore the available opportunity in the market, thus many
investors debate over whether or not the so-called professionals are any better than mutual fund or
investor him self, for picking up stocks.
2. Costs – The biggest source of AMC income is generally from the entry & exit load which they
charge from investors, at the time of purchase. The mutual fund industries are thus charging extra cost
under layers of jargon.
3. Dilution - Because funds have small holdings across different companies, high returns from a few
investments often don't make much difference on the overall return. Dilution is also the result of a
successful fund getting too big. When money pours into funds that have had strong success, the
manager often has trouble finding a good investment for all the new money.
4. Taxes - when making decisions about your money, fund managers don't consider your personal tax
situation. For example, when a fund manager sells a security, a capital-gain tax is triggered, which
affects how profitable the individual is from the sale. It might have been more advantageous for the
individual to defer the capital gains liability.
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Growth of Mutual Fund Industry in India:-
In India Mutual Fund Industry growing very rapidly. Since its inception of 1965, this industry has
collected many billions rupees. This graph showing this pace of the industry as on 30th March 2009.
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Schemes offering by Reliance:-
EQUITY/GROWTH SCHEMES
Reliance Growth Fund (An Open-ended Equity Growth Scheme)

Reliance Vision Fund (An Open-ended Equity Growth Scheme)
Reliance Equity Opportunities Fund (An Open-ended Diversified Equity Scheme)
Reliance Quant plus Fund (An Open-ended Equity Scheme)
Reliance NRI Equity Fund (An Open-ended Diversified Equity Scheme)
Reliance Tax Saver (ELSS) Fund (An Open-ended Equity Linked Savings Scheme)
Reliance Regular Savings Fund (An open ended Scheme)
Reliance Equity Fund (An open-ended Diversified Equity Scheme)
Reliance Equity Advantage Fund (An Open ended Diversified Equity Scheme)
Reliance Long Term Equity Fund (A 36 months close ended diversified equity fund)
Reliance Equity Linked Saving Fund – Series I (A 10 year close-ended Equity Linked Savings
Scheme)
Reliance Natural Resources Fund (An Open Ended Equity Scheme)
Reliance Infrastructure Fund (An open ended Equity Scheme)
DEBT/LIQUID SCHEMES
Reliance Income Fund (An Open-ended Income Scheme)

Reliance Liquid Fund (An Open-ended Liquid Scheme)
Reliance Medium Term Fund (An Open-ended Income Scheme with no assured returns)
Reliance Short Term Fund (An Open-ended Income Scheme)
Reliance Gilt Securities Fund (An Open-ended Govt. Securities Scheme)
Reliance Monthly Income Plan (An Open-ended Fund-Monthly Income)
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Reliance Floating Rate Fund (An Open-ended Liquid Scheme)
Reliance NRI Income Fund (An Open-ended Income Scheme)
Reliance Money Manager Fund (Open ended income scheme)
Reliance Liquidity Fund (An Open-ended liquid scheme)
Reliance Regular Savings Fund (An open ended Scheme)
Debt Option:
SECTOR SPECIFIC SCHEMES
Reliance Pharma Fund (An Open-ended Pharma Sector Scheme):

Reliance Diversified Power Sector Fund (An Open-ended Power Sector Scheme):
Reliance Media & Entertainment Fund (An Open-ended Media & Entertainment Sector Scheme)
Reliance Banking Fund (An Open-ended Banking Sector Scheme)
EXCHANGE TRADED FUND
Reliance Banking Exchange Traded Fund (An Open-ended, exchange listed, index linked Scheme)
Reliance Gold Exchange Traded Fund (An open ended Gold Exchange Traded Fund)
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RELIANCE IN TERMS OF AUM WITH OTHER PLAYERS
Reliance AMC has highest Assets Under Management as on June 30th 2009
Assets Under Management (AUM) as at the end of JUN-2009 (Rs in Lakhs)
Average AUM For The Month
Excluding Fund of
Sr No Mutual Fund Name Funds - Domestic but Fund Of Funds -
including Fund of Domestic
Funds - Overseas
1 AIG Global Investment Group Mutual Fund 154787.95 0
2 Baroda Pioneer Mutual Fund 372337.92 0
3 Benchmark Mutual Fund 111985.24 0
4 Bharti AXA Mutual Fund 24321.91 0
5 Birla Sun Life Mutual Fund 5628286.60 1826.22
6 Canara Robeco Mutual Fund 762400.12 0
7 DBS Chola Mutual Fund 250850.60 0
8 Deutsche Mutual Fund 1361563.21 0
9 DSP BlackRock Mutual Fund 1739634.99 0
10 Edelweiss Mutual Fund 4478.89 0
11 Escorts Mutual Fund 20144.95 0
12 Fidelity Mutual Fund 937537.91 3589.23
13 Fortis Mutual Fund 802767.54 9234.94
14 Franklin Templeton Mutual Fund 2547284.93 18514.32
15 Goldman Sachs Mutual Fund N/A N/A
16 HDFC Mutual Fund 7819790.24 0
17 HSBC Mutual Fund 960483.83 0
18 ICICI Prudential Mutual Fund 7016946.33 2796.66
19 IDFC Mutual Fund 2167628.96 1254.72
20 ING Mutual Fund 239677.15 19046.64
21 JM Financial Mutual Fund 777085.93 0
22 JPMorgan Mutual Fund 376635.88 0
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23 Kotak Mahindra Mutual Fund 3083302.28 16297.69
24 LIC Mutual Fund 3241492.12 0
25 Mirae Asset Mutual Fund 23788.46 0
26 Morgan Stanley Mutual Fund 220835.95 0
27 PRINCIPAL Mutual Fund 869538.09 0
28 Quantum Mutual Fund 6663.52 0
29 Reliance Mutual Fund 10833236.33 0
30 Religare AEGON Mutual Fund N/A N/A
31 Religare Mutual Fund 1003125.02 0
32 Sahara Mutual Fund 21253.53 0
33 SBI Mutual Fund 3406103.72 0
34 Shinsei Mutual Fund N/A N/A
35 Sundaram BNP Paribas Mutual Fund 1331465.05 0
36 Tata Mutual Fund 2122280.89 0
37 Taurus Mutual Fund 56126.70 0
38 UTI Mutual Fund 6797818.56 0
Grand Total 67093661.3 72560.42
O V E R V I E W A N A L Y S IS OF THE INDIAN MUTUAL FUND INDUSTRY
There are many entities involved in mutual fund and the diagram below illustrates the
stakeholders involved.
FIGURE 1 INDIAN MF STAKEHOLDERS
The mutual fund is constituted as trust in India, which is supervised by the Board of Trustees.
Mutual funds in India are structurally arranged into 3-tier: Sponsor – Trustee – AMC
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RELIANCE MUTUAL FUNDS SCHEMES
GROWTH FUND
INVESTMENT OBJECTIVE
The primary investment objective of the scheme is to achieve long-term growth of capital by
investing in equity and equity related securities through a research based investment approach.
FUND DATA
Structure . . . . ………………..Open-ended Equity Growth Scheme
Date of allotment . . . . . . . . . . .October 8, 1995
Inception Date . . . . . . . . . . . . .October 8, 1995
Corpus……………………… 5171.25cr(30/06/2009)
Minimum Investment ………..Retail Plan- Rs 5,000
Institutional Plan (IP)- Rs 5 cr
Fund Manager . . . . . . . . . . . .Sunil Singhania
Benchmark. . . . . . . . . . . . . . . BSE 100 Index
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VOLATILITY MEASURES
Beta 0.8511
Standard Deviation 4.2468
R Squared 0.9039
Sharpe Ratio 0.0766
Portfolio Turnover Ratio 1.99
VISION FUND
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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.
FUND DATA
Structure . . . ………………….... Open-ended Equity Growth Scheme
Date of allotment . . . . . . . . . . …. October 8, 1995
Inception Date . . . . . . . . . . . . . . . .October 8, 1995
Corpus: …………………………..3453.32 cr(30/06/2009)
Minimum Investment
Retail Plan- Rs 5,000
Institutional Plan (IP)- Rs 5 cr
Fund Manager . . . . . . . . . . . . . . . Ashwani Kumar
Benchmark. . . . . . . . . . . . . . . . . .. BSE 100 Index
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NRI EQUITY FUND
The primary investment objective of the scheme is to generate optimal returns by investing in equity
and equity-related instruments primarily drawn from the Companies in the BSE 200 Index.
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FUND DATA
Structure . . . Open-ended Diversified Equity Scheme
Date of allotment: . . . . . . . . . . November 15, 2004
Inception Date . . . . . . . . . . . . . November 16, 2004
Corpus: 118.47 crore . . . . . . . . . . . (30/06/2009)
Minimum Investment . . . . . . . . . . . . . . . . .Rs 5,000
Fund Manager . . . . . . . . . . . . . . Omprakash Kuckian
Entry Load . . . . . . . . . . <2cr - 3%; >_2cr <5cr - 2% >_5cr - Nil
Exit Load . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Nil
No Entry Load for Direct Investments w.e.f
January 4, 2008
Benchmark. . . . . . . . . . . . . . . . . . . . BSE 200 Index
VOLATILITY MEASURES
Beta 0.9631
R Squared 0.8967
Sharpe Ratio 0.0834
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BANKING FUND
The primary investment objective of the scheme is to generate continous returns by actively investing
in equity and equity-related or fixed-income securities of Banks.
FUND DATA
Structure . . . . . ……………………Open-ended Banking Sector Scheme
Date of allotment . . . . . . . . . . . . . . May 26, 2003
Inception Date . . . . . . . . . . . . . . . . . May 28, 2003
Corpus: 942.29 crore . . . . . . . . . . . (30/06/2009)
Minimum Investment . . …………Retail Plan- Rs 5000
Institutional Plan- Rs 5 cr
Fund Manager . . . . . . . . . . . . . . . . . . Sunil Singhania
Benchmark. . . . . . . . . . . . . . . . S&P CNX Bank Index
VOLATILITY MEASURES
Beta 0.9456
R Squared 0.7318
Sharpe Ratio 0.1339
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DIVERSIFIED POWER SECTOR FUND
The primary investment objective of the scheme is to seek to generate continous returns by actively
investing in equity and equity-related or fixed-income securities of Power and other associated
companies.
ASSET ALLOCATION
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FUND DATA
Structure . . . . . ……………………….Open-ended Pharma Sector Scheme
Date of Allotment . . . . . . . . . . . . . . . .June 5, 2004
Inception Date . . . . . . . . . . . . . . . . . . June 8, 2004
Corpus . . . . . . . . . . . . ………………114.36 cr (30/06/2009)
Minimum Investment . . . . . . . . . . . . . .Rs 5,000
Fund Manager . . . . . . . . . . . . . . . . . Sailesh Rajbhan
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Benchmark. . . . . . . . . . . . …………. BSE - Health Care Index
VOLATILITY MEASURES
Beta 0.8579
R Squared 0.8216
Sharpe Ratio 0.1594
PHARMA FUND
The primary investment objective of the scheme is to seek to generate consistent returns by investing
in equity and equity related or fixed income securities of Pharma and other associated companies.
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FUND DATA
Structure . . . . ………………… Open-ended Media & Entertainment
Date of allotment: . . . . . . . . . …. September 30, 2004
Inception Date . . . . . . . . . . . . . . . ...October 7, 2004
Corpus . . . . . . . . . . . . ……………127.21 cr (30/06/2009)
Minimum Investment . . . . . . . . . . . .Rs 5,000
Fund Manager . . . . . . . . . . . . . . . . Sailesh Rajbhan
Benchmark. . ………………… … S&P CNX Media & Entertainment Index
VOLATILITY MEASURES
Beta 0.6297
R Squared 0.5423
Sharpe Ratio 0.0960
MEDIA & ENTERTENMAINT FUND

The primary investment objective of the scheme is to generate continous returns by investing in
equity and equity-related or fixed-income securities of Media & Entertainment and other associated
companies.
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FUND DATA
Structure . . . . . ……………………..Open-ended Media & Entertainment
Date of allotment: . . . . . . . . . ……. ..September 30, 2004
Inception Date . . . . . . . . . . . . . . . . .October 7, 2004
Corpus . . . . . . . . . . . . …………… 127.21 cr(30/06/2009)
Minimum Investment . . . . . . . . . . . Rs 5,000
Fund Manager . . . . . . . . . . . . . . . Sailesh Rajbhan
Benchmark. . ……………………… S&P CNX Media & Entertainment Index
VOLATILITY MEASURES
Beta 0.8199
R Squared 0.6091
Sharpe Ratio 0.0481
EQUITY OPPOURTIENTIES FUND
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 securities & equity-
31
related securities and the secondary objective is to generate consistent returns by investing in debt and
money market securities.
FUND DATA
Structure . . ……………………… Open-ended Diversified Equity Scheme
Date of allotment . . . . . . . . . . . . …March 28, 2005
Inception Date . . . . . . . . . . . . . . . . March 31, 2005
Corpus . . . . . . . . . . ……………… 1506.76 cr (30/06/2009)
Minimum Investment . . . ………..Retail Plan- Rs 5,000
IP Plan- Rs 5 cr
Fund Manager . . . . . . . . . . . . . . . . . Sailesh Raj Bhan
32
VOLATILITY MEASURES
Beta 0.8512
R Squared 0.8586
Sharpe Ratio 0.0547
33
RELIANCE REGULAR SAVING FUND (Equity Option)
The primary investment objective of this option is to seek capital appreciation and or to generate
consistent returns by actively investing in equity / equity related securities.
FUND DATA
Structure . . . . . . . . . . . . . . . . ……… ..Open-ended Scheme
Date of allotment . . . . . . . . . . . . . . . …June 8, 2005
Inception Date . . . . . . . . . . . . . . . . . ....June 9, 2005
Corpus . . . . . . . ………………………Rs. 1112.38 cr (30/06/2009)
Minimum Investment . . …………….. Rs 500
Fund Manager . . . . . . . . . . . . . ……… Omprakash Kuckian
Benchmark. . . . . . . . . . . . . . . . . . . . ….BSE 100 Index
34
VOLATILITY MEASURES
Beta 0.8995
R Squared 0.8237
Sharpe Ratio 0.1138
35
REGULAR SAVINGS FUND (Balanced Option)
The primary investment objective of this option is to generate consistent returns and appreciation of
capital by investing in a mix of securities comprising of equity, equity related instruments & fixed
income instruments.
FUND DATA
Structure . . . . . . . . . . . . . . . . .Open-ended Scheme
Date of allotment . . . . . . . . . ..June 8, 2005
Inception Date . . . . . . . . . . . ..June 9, 2005
Corpus . . . . . . . . …………….Rs. 86.86 cr (30/06/2009)
Minimum Investment . . . ……Rs 500 & in multiples of Re 1
Fund Manager. ……………...Arpit Malaviya & Omprakash Kuckian
Benchmark. . . . . . . . . . . . ……Crisil Balanced Fund Index
36
VOLATILITY MEASURES
Beta 1.0640
R Squared 0.7917
Sharpe Ratio 0.0799
37
REGULAR SAVINGS FUND (Debt Option)
The primary investment objective of this option is to generate optimal returns consistent with
moderate level of risk. This income may be complemented by capital appreciation of the portfolio.
Accordingly investments shall predominantly be made in Debt & Money Market Instruments.
FUND DATA
Structure . . . . . . . . . . . . . . . . ………. Open-ended Scheme
Date of allotment . . . . . . . . . . . . . . . . June 8, 2005
Inception Date . . . . . . . . . . . . . . . . . . .June 9, 2005
Corpus . . . . . . . . . . . . ……………….Rs 2.37 crore (30/06/2009)
Minimum Investment……………….. Rs 500
Fund Manager . . . . . . . . . . . . . . . . . . .Arpit Malaviya
Benchmark. . . . . . ……………………Crisil Composite Bond Fund Index
38
TAX SAVER (ELSS) FUND
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.
FUND DATA
Structure . . …………………. .Open-ended Equity Linked Savings Scheme
Date of allotment . . . . . . .. …..September 21, 2005
Inception Date . . . . . . . . . . ….September 22, 2005
Corpus . . . . . . . . . ……………Rs 1879.81 crore (30/06/2009)
Minimum Investment . . . . . …Rs 500
Fund Manager . . . . . . . . . . …Ashwani Kumar
Benchmark. . . . . . . . . . . . . . ….BSE 100 Index
39
VOLATILITY MEASURES
Beta 0.7840
R Squared 0.7945
Sharpe Ratio 0.0570
40
EQUITY FUND
The primary investment objective of the scheme is to seek to generate capital appreciation and
provide long term growth opportunities by investing in a portfolio constituted of equity and equity
related securities of top 100 companies by market capitalization and of companies which are available
in the derivatives segment from time to time and the secondary objective is to generate consistent
returns by investing in debt and money market securities.
FUND DATA
Structure . . . ……………………. .Open-ended Diversified Equity Scheme
Date of allotment . . . . . . . . . . . . . .March 28, 2006
Inception Date . . . . . . . . . . . . . . . .March 30, 2006
Corpus . . . . . . . . …………………Rs. 2232.02 crore (30/06/2009)
Minimum Investment . . . ……… Retail Plan- Rs 5,000
Institutional Plan (IP)- Rs 5 cr and
Fund Manager . . . . . . . . . . . . . . . . .Sunil Singhania
Benchmark. . . . . . . . . . . . . . . . . . . . .S&P CNX Nifty
41
VOLATILITY MEASURES
Beta 0.7499
R Squared 0.9097
Sharpe Ratio 0.0745
42
Long-Term Equity Fund
The primary investment objective of the scheme is to seek to generate long term capital appreciation
& provide long-term growth opportunities by investing in a portfolio constituted of equity & equity
related securities and Derivatives and the secondary objective is to generate consistent returns by
investing in debt and money market securities.
FUND DATA
Structure . . . . …………………. …….A 36-month close-ended diversified
Date of allotment . . . . . . . . . . ……….December 26, 2006
Inception Date . . . . . . . . . . . . . ………December 27, 2006
Corpus . . . . . . . …………………. ….Rs 1922.99 cr (30/06/2009)
Minimum Investment . . . . . . . . . . . …Rs 5,000
Fund Manager . . . . . . . . . . . . . . . . ..Sunil Singhania
43
VOLATILITY MEASURES
Beta 0.6901
R Squared 0.7392
Sharpe Ratio 0.0265
44
EQUITY ADVANTAGE FUND
longterm growth opportunities by investing in a portfolio predominately of equity & equity related
instruments with investments generally in S & P CNX Nifty stocks and the secondary objective is to
generate consistent returns by investing in debt and money & money
market securities.
FUND DATA
Structure . . . …………………………Open-ended Diversified Equity Scheme
Date of allotment . . . . . . . . . . . . . …..August 8, 2007
Inception Date . . . . . . . . . . . . . . . . ….August 9, 2007
Corpus . . . . . . . . ………………… ...Rs 1869.15 cr(30/06/2009)
Minimum Investment . . . …………..Retail Plan- Rs 5,000 and
Fund Manager . . …………………Ashwani Kumar & Sailesh Raj Bhan
Benchmark. . . . . . . . . . . . . . . . . . . . .S&P CNX Nifty
45
VOLATILITY MEASURES
Beta 0.9098
R Squared 0.9713
Sharpe Ratio 0.0270
46
NATURAL RESOURCE FUND
long term growth opportunities by investing in companies principally engaged in the discovery,
development, production, or distribution of natural resources and the secondary objective is to
generate consistent returns by investing in debt and money market securities.
FUND DATA
Structure . . . . . . . . . . ……………. .Open-ended Equity Scheme
Date of allotment . . . . . . . . . . . ……February 25, 2008
Inception Date . . . . . . . . . . . . . . …..February 26, 2008
Corpus . . . . . . . . …………………...Rs 4419.12 crore (30/06/2009)
Minimum Investment . . ……………Retail Plan- Rs 5000
Institutional Plan (IP) - Rs 5 cr
Fund Manager . . . . . ……………….Ashwani Kumar & Shiv Chanani
47
Benchmark ........................................ A custom benchmark created using
the BSE-200 to the extent of 65% of portfolio and
MSCI World Energy Index for balance 35% of
the portfolio.
48
VOLATILITY MEASURES
Beta 0.7327
R Squared 0.839
Sharpe Ratio -0.0269
49
QUANT PLUS FUND
The investment objective of the Scheme is to generate capital appreciation through investment in
equity and equity related instruments. The Scheme will seek to generate capital appreciation by
investing in an active portfolio of stocks selected from S & P CNX Nifty on the basis of a
mathematical model
FUND DATA
Structure . . . . . . . . . . …………… Open-ended Equity Scheme
Date of allotment . . . . . . . . . . . . . .April 18, 2008
Inception Date . . . . . . . . . . . . . .. . .April 18, 2008
Corpus . . . . . . . . . . . ………………Rs 42.73 crore (30/06/2009)
Minimum Investment . . . …………Retail Plan - Rs 5,000
Institutional plan - Rs 5 cr
Fund Manager . . . . . . . . . . . . . . . . . Krishan Daga
Benchmark ..................................... S&P CNX Nifty
50
VOLATILITY MEASURES
Beta 0.8763
R Squared 0.9577
Sharpe Ratio 0.0145
51
INCOME FUND
The primary investment objective of the scheme is to generate optimal returns consistent with
moderate level of risk. This income may be complemented by capital appreciation of the portfolio.
Accordingly, investments shall predominantly be made in Debt & Money Market Instruments.
FUND DATA
Structure . . . . . . . . ……………... . .Open-ended Income Scheme
Date of allotment . . . . . . . . . . . . …. January 1, 1998
Inception Date . . . . . . . . . . . . . . . . ..January 1, 1998
Corpus . . . . . . . . …………………..Rs 1560.75 crore (30/06/2009)
Min Investment For Growth Option..Rs. 5,000;
Mthly Div Plan: Rs 25,000; . . . .
Qtrly Div Plan: Rs 10,000
Half yearly Div Plan: Rs 5,000;
Annual Div Plan: Rs 5,000
Fund Manager . . . . . . . . . . . . . . . . . Prashant Pimple
Weighted Average YTM . . . . . . . . . 6.85%
Weighted Avg. Maturity . . . . . . . . . .. 6.61 Years
Benchmark. . . . ………………….. . .Crisil Composite Bond Fund Index
52
MEDIUM-TERM FUND
The primary investment objective of the scheme is to generate regular income in order to make
regular dividend payments to unit holders and the secondary objective is growth of capital.
FUND DATA
Structure . . ……………………... . Open-ended Income Scheme with no assured returns
Date of allotment . . . . . . . . . ………September 14, 2000
Inception Date . . . . . . . . . . . . …….September 25, 2000
Corpus . . . . . . . …………………...Rs 10400.49 crore (30/06/2009)
Minimum Investment . . . . . . . . . . . Rs. 5,000
Fund Manager . . . . . . . . . . . . . . . . .Amit Tripathi
Modified Duration . . . . . . . . . . . . .. . 0.40 Years
Weighted Avg. Maturity . . . . . . . . . . 0.43 Years
Benchmark. . . . . ………………….. Crisil Short-term Bond Fund Index
53
SHORT-TERM FUND
The primary investment objective of the scheme is to generate stable returns for investors with a short
term investment horizon by investing in fixed income securitites of a short term maturity.
FUND DATA
Structure . . . . . . . . ……………….. . Open-ended Income Scheme
Date of allotment . . . . . . . . . . ………December 18, 2002
Inception Date . . . . . . . . . . . . . ……..December 23, 2002
Corpus . . . . . . . . ……………………Rs 2865.78 crore (30/06/2009)
Minimum Investment . . . . . . . . . . . . ..Rs 50,000
Weighted Average YTM . . . . . . . . . . 6.19%
Modified Duration . . . . . . . . . . . . . . . 1.29 Years
Weighted Avg. Maturity . . . . . . . . . . . 1.50 Years
Benchmark. . . . . . . . . . . ………… . . .Crisil Liquid Fund In
54
MONTHLY INCOME PLAN
The primary investment objective of the scheme is to generate regular income in order to make
regular dividend payments to unit holders and the secondary objective is growth of capital.
FUND DATA
Structure . . . . . . . . …………….. . . . . . . . . . . Open-ended Fund
Date of allotment . . . . . ……………….. . . . . December 29, 2003
Inception Date . . . . . . . . . . . . . . . ……………January 13, 2004
Corpus . . . . . . . . . ……………………………Rs 233.18 crore (30/06/2009)
Minimum Investment . . ……………………...For Growth Plan: Rs 10,000;
Benchmark. . . . . . . . . . . . …………………… Crisil MIP Blended Index
55
NRI INCOME FUND
The primary investment objective of the scheme is togenerate 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 Instruments.
FUND DATA
Structure . . . . . . . . . . ……………….Open-ended Income Scheme
Date of allotment . . . . . . . . . . ………November 15, 2004
Inception Date . . . . . . . . . . . . . ……..November 16, 2004
Corpus . . . . . . . . . . ………………… Rs 0.39 crore (30/06/2009)
Minimum Investment . . . . . . . . . . . . .Rs 50,000
Weighted Average YTM . . . . . . . . . . 3.98%
Modified Duration . . . . . . . . . . . . . . .. 0.11 Years
Weighted Avg. Maturity . . . . . . . . . . . 0.12 Years
Benchmark. . . . . . ……………………Crisil Composite Bond Fund Index.
56
MONEY MANAGER FUND
The investment objective of the Scheme is to generate optimal returns consistent with moderate levels
of risk and liquidity by investing in debt securities and money market securities.
FUND DATA
Structure . . . . . . . ………………….. . .. Open-ended Income Scheme
Date of allotment . . . . . . . . . . . . ……….March 20, 2007
Inception Date . . . . . . . . . . . . . . . …… March 21, 2007
Corpus . . . . . . . …………………………Rs 15979.80 crore (30/06/2009)
Minimum Investment . . ……………. . . For Retail Plan: Rs 1 lakh
Fund Manager . . . . . . . . . . . . . . . . . … . .Amit Tripathi
Weighted Average YTM . . . . . . . . . . .. . .6.76%
Modified Duration . . . . . . . . . . . . . . . . . . 0.42 Years
Weighted Average Maturity . . . . . . . . .. . 0.46 Years
Benchmark. . . . . . . . . . . . . . …………….Crisil Liquid Fund Index
57
LIQUID FUND (Treasury Plan)
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
FUND DATA
Structure . . ………………. . . . . . . ….. . .Open-ended Liquid Scheme
Date of allotment . . . . . . . . ………... . . . .March 18, 1998
Inception Date . . . . . . . . . . . . . . . ………March 23, 1998
Corpus . . . . . . . ……………………… .Rs 5494.38 crore (30/06/2009)
Minimum Investment . . . . . . . . . . . …….Retail: Rs. 5,000
Istitutional Plan ………………………… Rs. 1,00,00,000
Fund Manager . . . . . . . . . . . . . . . . ………Prashant Pimple
Weighted Average YTM . . . . . . . . . . . . . . 6.33%
Weighted Avg. Maturity . . . . . . . . . . . . . 0.21 Years
Benchmark. . . . . . . . . . . . …………... . .Crisil Liquid Fund Index
58
FLOATING RATE FUND
The primary investment objective of the scheme is to generate regular income through investment in
a portfolio comprising substantially of Floating Rate Debt Securities (including floating rate
securitized debt, Money Market Instruments and Fixed Rate Debt Instruments swapped for floating
rate returns). The scheme shall also invest in Fixed Rate Debt Securities (including floating rate
securities debt, Money Market Instruments and Fixed Rate Debt Instruments swapped for fixed
returns).
`
FUND DATA
Structure . . . . . . . . . . . …………….Open-ended Liquid Scheme
Date of allotment . . . . . . . . . . . . ….August 27, 2004
Inception Date . . . . . . . . . . . . . ……September 2, 2004
Corpus . . . . . . . . . …………………Rs 667.38 crore (30/06/2009)
Minimum Investment . . . . . . . . . . . .Rs 25,000
Fund Manager . . . . . . . . . . . . . . . . Amit Tripathi
Modified Duration . . . . . . . . . . . . ... 0.14 Years
Weighted Avg. Maturity . . . . . . . . . 0.16 Years
Benchmark. . . . . . . . . ………... . . .Crisil Liquid Fund Index
59
GOLD EXCHANGE TRADED FUND
The investment objective is to seek to provide returns that closely correspond to returns provided by
price of gold through investment in physical Gold (and Gold related securities as permitted by
Regulators from time to time). However, performance of the scheme may differ from that of the
domestic prices of Gold due to expenses and or other related factors.
FUND DATA
Structure . . An open ended Gold ETF that tracks the domestic prices of gold through investments in
physical gold
Date of allotment . . . . . . ……… . . . November 21, 2007
Inception Date . . . . . . . . . . . . . …….November 22, 2007
Corpus . . . . . . . . . ………………….Rs 178.42 crore (30/06/2009)
Exchange listed . . . . . . . . . . . . . . . . .NSE
NSE Symbol . . . . . . . . . . . . . . . . . . .RELGOLD
Fund Manager . . . . . . . . . . . . . . . . Hiren Chandaria
Benchmark. . . …………………… .As there are no indices catering
60
ANALYSIS OF RELIANCE MUTUAL FUND SCHEMES
A mutual fund schemes is good, better or best, it depends on some measures. These measures tell us
about the volatility of fund, risk of the fund and whether an investor should invest in that particular
fund or not. Explanations of these measures are below here:-
Sharpe Ratio
A ratio developed by Nobel laureate William F. Sharpe to measure risk-adjusted
performance. The Sharpe ratio is calculated by subtracting the risk-free rate - such as that of the 10-
year .Treasury bond - from the rate of return for a portfolio and dividing the result by the standard
deviation of the portfolio returns.
The Sharpe ratio formula is:
The Sharpe ratio tells us whether a portfolio's returns are due to smart investment decisions or a result
of excess risk. This measurement is very useful because although one portfolio or fund can reap
higher returns than its peers, it is only a good investment if those higher returns do not come with too
much additional risk. The greater a portfolio's Sharpe ratio, the better its risk-adjusted performance
has been. A negative Sharpe ratio indicates that a risk-less asset would perform better than these
security being analyzed.
A variation of the Sharpe ratio is the Sortino ratio, which removes the effects of upward price
movements on standard deviation to measure only return against downward price volatility.
Alpha
Alpha is a risk-adjusted measure of the so-called active return on an investment. It is the

return in excess of the compensation for the risk borne, and thus commonly used to assess
active managers' performances. Often, the return of a benchmark is subtracted in order to
61
consider relative performance; the alpha coefficient (αi) is a parameter in the capital asset
pricing model (CAPM). It is the intercept of the Security Characteristic Line (SCL).
Alternatively, it is also the coefficient of the constant in a market model regression.
It can be shown that in an efficient market, the expected value of the alpha coefficient equals
the return of the risk free asset: E(αi) = r f.
Therefore the alpha coefficient indicates how an investment has performed after accounting
for the risk it involved:
• αi < rf: the investment has earned too little for its risk (or, was too risky for the
return)
• αi = rf: the investment has earned a return adequate for the risk taken
• αi > rf: the investment has a return in excess of the reward for the assumed risk
Beta
Where ra measures the rate of return of the asset, rp measures the rate of return of the
portfolio, and Cov (ra, rp) is the covariance between the rates of return. In the CAPM
formulation, the portfolio is the market portfolio that contains all risky assets, and so the rp
terms in the formula are replaced by rm, the rate of return of the market.
Beta is also referred to as financial elasticity or correlated relative volatility, and can be
referred to as a measure of the sensitivity of the asset's returns to market returns, its non-
diversifiable risk, its systematic risk, or market risk. On an individual asset level, measuring
beta can give clues to volatility and liquidity in the marketplace. In fund management,
62
measuring beta is thought to separate a manager's skill from his or her willingness to take
risk.
• Volatility is measured by the standard deviation of a stock or a portfolio’s return from the
mean. Thus, beta is one important measure of volatility.
• Ideally, alternative investment strategies will not only minimise downside risk, they will also
aim to achieve low levels of volatility.
• Many managers perform statistical analysis to rank securities according to their expected
returns and risk factors, this is called quantitative risk analysis.
• From this analysis, they make judgments on stock selection—to enhance alpha and minimise
beta risk. The mathematical analysis is usually performed by computer generated models,
earning the epithet black box investing.
Standard Deviation
A measure of the dispersion of a set of data from its mean. The more spread apart the data, the higher
the deviation. Standard deviation is calculated as the square root of variance.
Standard deviation is a statistical measurement that sheds light on historical volatility. For example, a
volatile stock will have a high standard deviation while the deviation of a stable blue chip stock will
be lower. A large dispersion tells us how much the return on the fund is deviating from the expected
normal returns.
63
TABELS WITH DIFFERENT MEASURES
Volatility Measures
Fund
Risk Sharpe R-
Fund Name Grade Std Dev. Ratio Beta Alpha Square
-- 40.7 0.78 0.81 9.67 0.94
Reliance Banking Retail
Reliance Diversified Power -- 39.22 0.88 1.07 22.32 0.91
Sector Retail
29.35
Reliance Equity Opportunities Avg. 0.23 0.99 -3.1 0.92
36.29
Reliance Growth Avg. 37.32 0.48 1.02 6.13 0.93

Reliance Income Above 9.12 0.76 0.91 4.02 0.25
Avg.
Reliance Liquid Cash High 0.36 0.82 0.02 0.25 0.01
Reliance Liquid Treasury Low 0.19 14.18 0.01 2.61 0.02
Reliance Liquid Treasury Inst Low 0.19 15.37 0.01 2.89 0.02
Reliance Liquidity Below 0.2 14.68 0.01 2.91 0.02
Avg.
Reliance M Interval Series I -- 0.51 6.45 0.01 3.29 0
Inst
Reliance M Interval Series I -- 0.51 6.09 0.01 3.06 0
Retail
Reliance M Interval Series II -- 0.32 10.07 0.01 3.21 0.01
Retail
Reliance Media & -- 40.95 0.24 0.99 -1.51 0.72
Entertainment
Reliance Medium Term Low 0.28 7.92 0.02 2.18 0.09
Reliance MIP Above 10.33 0.72 0.8 10.75 0.45
Avg.
Reliance Money Manager Inst Below 0.2 15.97 0.01 3.2 0.01
Avg.
Reliance Money Manager Below 0.2 15.07 0.01 2.94 0.01
Retail Avg.
Reliance NRI Equity Avg. 36.73 0.41 1 3.66 0.91
64
Reliance NRI Income -- 0.41 -8.83 0 -3.6 0
Reliance Pharma -- 35.1 0.48 1.07 13.34 0.76
Reliance Regular Savings Avg. 27.88 0.41 1.01 3.58 0.87

Balanced
Reliance Regular Savings -- 2.44 0.57 0.04 1.26 0.01
Debt Ret
Reliance Regular Savings Avg. 42.1 0.6 1.12 12.31 0.87
Equity
Reliance Short-term Avg. 2.44 2.6 - 6.38 0
0.02
Reliance Tax Saver Avg. 33.29 0.28 0.88 -0.99 0.86
Reliance Vision Avg. 34.5 0.36 0.95 1.51 0.93
Investment Details
Mim
Expense Entry Exit Initial Portfolio Tenure
Fund Name
Ratio % Load % Load % Inv. Manager (Yrs.)
(Rs)
Reliance 0.35 0.00 0.00 -- Krishan Daga 1
Banking ETF
Reliance 2.14 2.25 0.00 5,000 Sunil B. 4
Banking Retail Singhania
Reliance 1.72 0.00 0.00 5 crore Sunil B. 1
Diversified Singhania
Power Sector
Inst
Reliance 1.82 2.25 0.00 5,000 Sunil B. 5
Diversified Singhania
Power Sector
Retail
Reliance ELSS 2.46 0.00 0.00 500 Sailesh Raj 2
Series I Bhan
Reliance Equity 1.89 2.25 0.00 5,000 Sunil B. 3
Singhania
Reliance Equity 1.73 0.00 0.00 5 crore Ashwani 2, 2
Advantage Inst Kumar, Sailesh
Raj Bhan
Reliance Equity 1.93 2.25 0.00 5,000 Ashwani 2, 2
65
Mim
Fund Name
(Rs)
Advantage Kumar, Sailesh
Retail Raj Bhan
Reliance Equity 1.99 2.25 0.00 5,000 Sailesh Raj 4

Opportunities Bhan
Reliance Gilt 1.40 0.00 0.00 1 crore Prashant R 1

Securities Inst Pimple
Reliance Gilt -- 0.00 0.00 1 crore Prashant R 1
Securities Inst Pimple
PF
Reliance Gilt 1.50 0.00 0.00 10,000 Prashant R 1
Securities Retail Pimple
Reliance Gilt -- 0.00 0.00 Prashant R 1
Securities Retail Pimple
PF
Reliance Gold 1.00 -- -- Hiren 1
ETF Chandaria
Reliance Growth 1.82 2.25 0.00 Sunil B. 5
Singhania
Reliance Growth 1.62 0.00 0.00 Sunil B. 2
Inst Singhania
Reliance Income 1.48 0.00 0.00 Prashant R 1
Pimple
Reliance -- 0.00 0.00 Sunil B. 0
Infrastructure Singhania
Inst
Reliance -- 2.25 0.00 Sunil B. 0
Infrastructure Singhania
Retail
Reliance Liquid 0.38 0.00 0.00 Amit Tripathi 6
Cash
Reliance Liquid 1.13 0.00 0.00 Prashant R 1
Treasury Pimple
Reliance Liquid 0.89 0.00 0.00 Prashant R 1
Treasury Inst Pimple
Reliance 0.68 0.00 0.00 Amit Tripathi 4
Liquidity
66
Mim
Fund Name
(Rs)
Reliance Long 1.94 0.00 0.00 Sunil B. 3
Term Equity Singhania
Reliance Media 2.46 2.25 0.00 Sailesh Raj 4
& Entertainment Bhan
Reliance 0.81 0.00 0.00 Amit Tripathi 1
Medium Term
Reliance MIP 2.00 0.00 0.00 Ashwani 5, 1
Kumar, Amit
Tripathi
Reliance Money 0.96 0.00 0.00 Amit Tripathi 2
Manager Inst
Reliance Money 1.16 0.00 0.00 Amit Tripathi 2
Manager Retail
Reliance Natural -- 0.00 0.00 Ashwani 1, 1
Resources Inst Kumar, Shiv
Chanani
Reliance Natural 1.83 2.25 0.00 Ashwani 1, 1
Resources Retail Kumar, Shiv
Chanani
Reliance NRI 2.46 3.00 0.00 Omprakash 1
Equity Kuckian
Reliance NRI 1.36 0.00 0.00 Prashant R 1
Income Pimple
Reliance 2.50 2.25 0.00 Sailesh Raj 4
Pharma Bhan
67
MUTUAL FUND INDUSTRY AND DISRIBUTION CHANNELS
In the past 25 years, there have been dramatic changes in how mutual funds are sold to the
investing public. Before 1980, all funds had a single share class, and shares of a given fund were
offered to all investors. Most funds were sold through a broker, who provided advice, assistance,
and ongoing service to the fund buyer. The shareholder paid for these distribution services through a
front-end sales charge when he or she bought the fund. Other funds sold shares directly to investors
without a sales charge. Investors in these funds either did not receive advice and assistance or
obtained and paid for these services separately. Funds sold through financial professionals such as
brokers have since adopted alternatives to the front-end sales charge. The alternative payment
methods typically include a fee based on assets that may also be in combination with a front-end or
back-end sales charge. In many cases, funds offer several different share classes — all of which
invest in the same underlying portfolio of assets, but each share class may offer shareholders different
methods of paying for broker services.
The purpose of this paper is to describe the current structure of the distribution system for mutual
funds and to analyze trends and developments in distribution cost incurred by mutual fund investors
since 1980. The principal findings of the paper include the following:
Distribution of Mutual Funds

_ Mutual funds are sold through five principal distribution channels:
1) The advice channel,
2) The retirement plan channel,
3) The supermarket channel, and
4) The institutional channel.
Distribution Cost
Distribution cost — the combination of sales loads and 12b-1 fees incurred by buyers of mutual funds
— decreased 60 percent for equity fund share classes with loads and 43 percent for bond fund share
classes with loads between 1980 and 2001. Distribution cost fell as load share classes were sold with
greater frequency in retirement plans and other accounts that reduce or waive the
load. The decline in cost of purchasing load share classes was also partly in response to competition
from no-load fund companies. To meet the competition, load funds reduced front-end sales loads in
68
the 1980s and offered lower-cost alternatives to front-end loads. _For the mutual fund industry as a
whole, distribution costs fell as sales of no-load share classes increased through the direct,
supermarket, and retirement plan channels. The combination of lower distribution costs among load
share classes and increased sales of no-load share classes caused overall distribution costs to fall by
73 percent for equity funds and 60 percent for bond funds between 1980 and 2001. _ Since the
adoption of Rule 12b-1 in 1980, asset-based distribution fees have become a significant element of
distribution cost. In 2001, 12b-1 fees represented an estimated 48 percent of all distribution costs for
equity fund load share classes and 49 percent for bond fund load share classes. The use of 12b-1 fees
has not offset reductions in sales loads, however.
Advice Channel:
The principal feature of the advice channel is the provision of investment guidance, assistance,
and advice by financial professionals. These include full-service brokers at national wirehouses,
independent financial planners and advisers, registered sales representatives at banks and savings
institutions, and insurance agents. Such advisers help fund shareholders identify financial goals such
as retirement, tax management, education savings, and estate planning. They assess therisk tolerance
of their clients and select mutual funds and other investments to meet these goals.
As an intermediary between investors and funds, financial professionals conduct transactions
for the shareholder, maintain the financial records for the investments under their management, send
periodic financial statements to shareholders, and coordinate the distribution of prospectuses,
financial reports, and proxy statements to shareholders on behalf of the funds. Shareholders’
questions about their funds and accounts often are handled by the financial professionals rather than
by the fund companies themselves.
Retirement Plan Channel

In the 1990s, defined contribution retirement plans, such as 401(k) plans, became one of the primary
sources through which investors buy mutual funds. In 2002, $1 trillion was invested in mutual funds
through defined contribution plans, up from $67 billion in 1990. Furthermore, 62 percent of all
household owners of mutual funds held shares in defined contribution plans.5 Employers sponsoring
defined contribution plans rely upon third parties to administer the plans and provide plan
investments to employees. The third-party administrator (TPA) typically handles the recordkeeping
and other administrative Employers sponsoring defined contribution plans rely upon third parties to
administer the plans and provide plan investments to employees. The third-party administrator (TPA)
69
typically handles the recordkeeping and other administrative services and assists the employer in the
selection of the investment options offered to employees. Investment options typically include mutual
funds, guaranteed investment contracts, stable value funds, and company stock.6 Among the services
provided by these third parties are educational materials and seminars for employees that explain the
retirement plan, investment options, and investment principles.
Supermarket Channel
The introduction of the first mutual fund supermarket by a discount broker in 1992 represented a
significant innovation in the distribution of mutual funds. Many other discount brokers, some
affiliated with mutual fund companies, have since organized fund supermarkets.
The most important feature of a fund supermarket is its no transaction- fee (NTF) program, whereby
an investor may purchase mutual funds with no transaction fees from a large number of fund
companies. The NTF offerings at a discount broker often number in the thousands, providing an
investor the convenience of purchasing “no load” funds from different families at a single location.
Supermarkets generally do not provide investment advice, and investors must undertake their own
research when choosing funds. However, supermarkets provide a variety of products and tools to
assist shareholders’ decision making. In addition, the supermarkets provide a convenient platform
through which investors can research funds, obtain fund literature, and purchase fund shares.
The supermarket platform not only provides fund sponsors with access to a national retail
distribution channel, but it also promotes competition among funds because investors can
readily compare fund fees, expenses, and returns. The fund supermarket holds a single account
with each fund and maintains shareholder transaction records for the mutual fund. The
supermarket also provides consolidated reports to fund shareholders, distributes mutual fund proxy
statements, financial reports, prospectuses, and tax reports. In addition, because the supermarket
maintains the relationship with the investor rather than the fund itself, fund shareholders rely on
the supermarket’s telephone representatives and website for account information, reducing the
fund’s direct cost for providing these services.
Institutional Channel
The institutional channel comprises a variety of institutions purchasing fund shares for their own
accounts. These institutions include businesses, financial institutions, endowments, foundations,
and state and local governments. Fund sponsors often create special share classes or funds for
70
institutional investors. Because these investors have large average account balances, the cost of
managing a fund or share class with institutional accounts is lower than that for funds with a large
number of small accounts. Consequently, the expense ratios for institutional funds and share classes
tend to be lower than for comparable funds sold to individual investors.
Institutional investors can purchase shares directly from fund companies, but they also rely on third
parties to purchase their fund shares. For example, banks and other third parties that help institutions
manage their cash holdings have created platforms that offer a variety of money market funds. These
platforms permit institutional investors to place money in multiple money market funds and to move
money between the funds on this platform. These arrangements allow institutional investors, which
are often restricted as to the portion of their cash holdings that can be held in any particular mutual
fund, to easily diversify their holdings across funds.
71
Summary
The Indian mutual fund industry is in a relatively burgeoning stage with respect to its product
offerings, and tends to compete with products offered by the government providing fixed
guaranteed returns. While the Indian mutual fund industry has shown a striking growth rate
in the last few years, the recent developments triggered by the global financial meltdown
have impacted the industry resulting in AUM decline, adversely impacting the revenue and
profitability. This report discusses about the key issues facing the Indian MF industry and
how the penetration of mutual fund could be potentially increased. In order to increase the
penetration of MF, it is also imperative to understand the investors buying behavior. At the
retail level, investors comprising of a highly heterogeneous group are unique. Hence, their
purchasing pattern and behaviour also widely differs. This makes it mandatory for the Asset
Management Companies (AMCs) to understand the fund/scheme selection/switching
behaviour of the investors in order to design suitable for the end customers. With this
background a survey was conducted among 20 Mutual Fund distributors in NCR region to
understand the factors influencing the fund/scheme selection behaviour of Retail Investors.
This paper discusses the survey findings. It is hoped that the report will have some useful
managerial insight for the Reliance AMC in their product and distribution strategy.
Bibliography
72
http://economictimes.indiatimes.com/Markets/Analysis/India-offers-biggest-opportunity-for-
asset-management-companies-Study/articleshow/2859573.cms
http://www.indianmoney.com/article-display.php?cat id=1&sub
id=11&aid=721&acat=&ahead=Reliance+Infrastructure+Fund++(NFO)+-
+An+IndianMoney.com+analysis
http://www.weforum.org/pdf/climate/Green.pdf
www.scribd.com/doc/17094302/Mutual-Fund-Web
www.reliancemutualfunds.com
www.mutualfundsindia.com
www.bseindia.com
www.amfiindia.com/mutual funds/nav/about funds/open ended schemes.com
www.investopedia/aboutus/html
http://www.docstoc.com/docs/2411492/An-Empirical-Study-on-Factors-Influencing-the-
Mutual-FundScheme
http://www.managementparadise.com/forums/archive/index.php/t-31210.html
http://www.scribd.com/doc/17093549/FACTORS-AFFECTING-INVESTORS-
PREFERENCE-FOR-MUTUAL-FUNDS-IN-INDIA
http://www.utiicm.com/Cmc/PDFs/2001/rajeswari.pdf
http://www.docstoc.com/docs/8097051/Factors-affecting-choice-of-mutusl-funds
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abstractid=1103758&mirid=1
http://www.appuonline.com/mf/knowledge/amfiguidelines.html
http://www.sundarambnpparibas.in/sebiconduct/sebiconduct.htm
73

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PROJECT REPORT

ANALYSIS OF RELIANCE MUTUAL

Submitted in the partial fulfillment for the award of

Degree of Master of Business Administration

RAI BUSINESS SCHOOL

Like most developed and developing

2. Mutual fund brings the benefits of diversification and money management

Reliance Communications Limited: Reliance Communications Limited is the flagship company

Working of Mutual Fund

What is a Mutual Fund?

Types of Mutual Funds Schemes in India

Overview of existing schemes existed in mutual fund category:

2. Close - Ended Schemes:

Overview of existing schemes existed in mutual fund category:

Short Term Plans (STPs)

Sector Specific Schemes:

Advantages of Investing Mutual Funds:

Disadvantages of Investing in Mutual Funds:

Reliance Growth Fund (An Open-ended Equity Growth Scheme)

Reliance Income Fund (An Open-ended Income Scheme)

Reliance Pharma Fund (An Open-ended Pharma Sector Scheme):

EXCHANGE TRADED FUND

O V E R V I E W A N A L Y S IS OF THE INDIAN MUTUAL FUND INDUSTRY

FIGURE 1 INDIAN MF STAKEHOLDERS

MEDIA & ENTERTENMAINT FUND

Alpha is a risk-adjusted measure of the so-called active return on an investment. It is the

the return of the risk free asset: E(αi) = r f.

Reliance Growth Avg. 37.32 0.48 1.02 6.13 0.93

Reliance Pharma -- 35.1 0.48 1.07 13.34 0.76

Reliance Regular Savings Avg. 27.88 0.41 1.01 3.58 0.87

Reliance Vision Avg. 34.5 0.36 0.95 1.51 0.93

Reliance Equity 1.99 2.25 0.00 5,000 Sailesh Raj 4

Reliance Gilt 1.40 0.00 0.00 1 crore Prashant R 1

Distribution of Mutual Funds

Retirement Plan Channel

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