A STUDY ON INVESTOR PERCEPTION TOWARDS MUTUAL FUNDS A Project Report submitted in partial fulfillment of the requirement For the

awa rd of the degree of MASTER OF BUSINESS ADMINISTRATION BY SANJEET KUMAR SAH SRM UNIVERSITY SCHOOL OF MANAGEMENT

MUTUAL FUND TABLE OF CONTENT CHAPTER NO. CONTENT PAGE No. CHAPTER:-1 1. INTRODUCTION:a. Introduction of mutual fund b. Opportunity & challenges. c. M utual fund industry in india d. Types of mutual fund e. Advantages of mutual fun d f. Basis of selection g. Constituent of mutual fund h. Marketing strategy i. M arket segment j. Marketing of funds & challenges. k. SEBI guidelines 2.1 Company profile Product profile 2.2 Objective of study 2.3 Scope of study 2.4 Limitatio n of study 2.5 Research methodology 2.6 Literature review CHAPTER:-2 CHAPTER:-3 3.3 Data Analysis CHAPTER:-4 4.1 Findings 4.2 Suggestion 4.3 Conclusion Bibliography CHAPTER:-5 CHAPTER:-6 QUESTIONNIRE SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND LIST OF TABLES Table no. Table name Page no. I II III IV V VI VII VIII IX X XI XII XIII XIV XV XVI XVII XVIII Occupation wise classification Income wise classification Savings Awareness of m utual fund Investment choice Choice to invest Reason to invest Investment amount Preferred fund in mutual fund Awareness of STANDARD CHARTERED mutual fund Inves tment in STANDARD CHARTERED mf Reason to select STANDARD CHARTERED mutual fund A ttracting attributes of STANDARD CHARTERED mf Nos of schemes invested by responde nts Investment in other mf scheme Choice other than STANDARD CHARTERED MF Sugges tion to others Suggested benefits SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND LIST OF FIGURES & CHARTS Serial no 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 FIGURES & CHARTS NAME Flow chart of working of mutual fund Concept of mutual fun d Classification of mutual fund Advantage of mutual fund Mutual fund constituent s Occupation wise classification Income wise classification Savings Awareness of mutual fund Investment choice Choice to invest Reason to invest Investment amou nt Preferred fund in mutual fund Awareness of STANDARD CHARTERED mutual fund Inv estment in STANDARD CHARTERED mf Reason to select STANDARD CHARTERED mutual fund Attracting attributes of STANDARD CHARTERED mf Nos of schemes invested by respon dents Investment in other mf scheme Choice other than STANDARD CHARTERED MF Sugg estion to others Suggested benefits Page no SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND INTRODUCTION a) MUTUAL FUND Mutual Funds refer to funds which collect money from investors and put this mone y in stocks, bonds and other securities to gain financial profit. Persons whose money is used by the Mutual Fund Manager to buy stocks, bonds and other securiti es, get a percentage of the Profit earned by the mutual fund in return of their Investments. In this way, the mutual fund offers benefit to both parties. A Mutu al Fund is a trust that pools the savings of a number of investors who share a c ommon financial goal. The money thus collected is then invested in capital marke t instruments such as shares, debentures and other securities. The income earned through these investments and the capital appreciation realized is shared by it s 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 opportu nity to invest in a diversified, professionally managed basket of securities at a relatively low cost. The flow chart below describes broadly the working of a m utual fund. Fig:-1 A mutual fund is a professionally managed type of collective investment s cheme that pools money from many investors and invests it in stocks, bonds, shor t-term money market instruments, and/or other securities. The mutual fund will h ave a fund manager that trades the pooled money on a regular basis. Currently, t he worldwide value of all mutual funds totals more than $26 trillion The mutual fund organization earns profit by using people s money for investment and the pe rsons who invest in mutual fund acquire financial Profit without going into inte nsive SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND analysis and research on bonds and stocks. The work of stock and bon d Market Analysis, Market Research and Market Speculation is done by the mutual fund managers. The people who invest in Mutual Funds are generally exposed to mu ch lower Risk compared to those who directly invest in bonds and stocks. Mutual Fund Investment involves lower Risk as the investment is diversified in to diffe rent bonds and stocks. So, if at any time Market Value of one particular bond or value of the stocks of any particular company drops, then the loss incurred by the mutual fund can be offset by the Market Gain of any other bond or stocks. Fig:-2 SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND b) OPPORTUNITY OF MUTUAL FUND:Opportunities of Mutual Funds are tremendous espec ially when investment is concerned. For any individual who intends to allocate h is assets into proper forms of investment and want to diversify his Investment P ortfolio as well as the risks, Mutual Funds can be proved as the biggest opportu nity. Investors get a lot of advantages with the Mutual Fund Investment. Firstly , they are not required to carry on intensive research and detailed analysis on Stock Market and Bond Market. This work is done by the Fund Mangers of the Inves tment Management Company on behalf of the investors. In fact, the professional F und Managers who handle the mutual funds of any particular company are able to s peculate the market trend more correctly than any common individual. Good Specul ation about the trends of stock prices and bond prices leads to right allocation of funds in the right stocks and bonds resulting in good Rate of Returns. Inves tors also get the advantage of high Liquidity of the mutual funds. This means th e investors can enjoy easy access to the funds invested in the mutual funds when ever they require the money. When the investors invest in any mutual fund, they are given some equity position in that fund. The investors can any time sell the ir mutual fund shares to get back the money invested in mutual funds. The only t hing is that the Rate of Return that they will get may not be favorable as the r eturn depends on the present market condition. The greatest opportunity that the mutual funds offer is the opportunity of diversifying their investments. Invest ment Diversification actually diversifies the Risk associated with investment. T his is because, if at a time, if prices of some stocks are declining, deceasing the Value of Investment, prices of some other stocks and bonds may tend to rise and in this way the loss of the mutual fund is offset by the strength of the sto cks whose prices are rising. As all the mutual funds diversify their investments in various common stocks, preferred stocks and different bonds, the risk to be borne by the investors are well diversified and in other terms lowered. SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND CHALLENGES FACING MUTUAL FUND:People find mutual fund investment so much interesting because they think they c an gain high rate of return by diversifying their investment and risk. But, in r eality this scope of high rate of returns is just one side of the coin. On the o ther side, there is the harsh reality of highly Fluctuating Rate of Returns. Tho ugh there are other disadvantages also, this concern of fluctuating returns is m ost possibly the greatest challenge faced by the mutual fund. The Issue of Fluctuating Returns In spite of being a diversified investment solu tion, mutual funds investment in no way guarantees any return. If the market pri ces of major shares and bonds fall, then the value of mutual fund shares are sur e to go down, no matter how diversified the mutual fund portfolio be. It can be said that mutual fund investment is somewhat lower risky than Direct Investment in stocks. But, every time a person invests in mutual fund, he unavoidably carri es the risk of losing money. Diversification or Over Diversification- In order to diversify the investment, m any times the mutual fund companies get involved in Over Diversification. The ri sk of holding a single financial security is removed by diversification. But, in case of over diversification, investors diversify so much that many time they e nd up with investing in funds that are highly related and thus the benefit of ri sk diversification is ruled out. Taxes-Every year, most of the mutual funds sell substantial amount of their hold ings. If they earn profit by this sell, then the investors receive the Profit In come. For most of the mutual funds, the investors are bound to pay taxes on thes e incomes, even if they reinvest the income. Costs- Most of the mutual funds charge Shareholder Fees and Fund Operating Fees from the investors. In the year, in which mutual fund fails to make profit and the in vestors get no return, these fees only blow up the losses. SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND c) MUTUAL FUNDS Vs OTHER STOCK:Mutual Funds Vs Individual Stocks has always been a debatable issue. While some like to play safe with mutual fund in vestment, some others prefer investment in individual stocks. When any investor invests in any mutual fund all that he is required to do is pay the Shareholder Fees and Fund Operating Fees. The whole work of managing funds, starting from Ma rket Research and analysis of stock and bond price and recent market trends up t o final Allocation of Funds or assets in various stocks and bonds is completely done by the Professional Fund Managers employed by the Investment Management Com pany. In this case, the fund management remains in the hands of the fund manager s of the mutual fund company. But, in case of Direct Investment in individual st ocks, the total control remains in the hands of the individual investors. But, m ost of the people agree about the fact, that mutual funds hold some important be nefits over and above Individual Stocks. So, to get the actual depiction of Mutu al Funds Vs Individual Stocks, we will discuss the advantages put forwarded by M utual Funds. Diversification. The core concept of mutual funds is to Diversify Investment in order to lower the risk of investing. As the mutual funds allocate their funds i nto stocks of different companies and in different bonds, the risk is diversifie d. If at a time, market price of some particular stocks fall, the loss of the mu tual fund may be offset by the rise in price of some other stocks held by that p articular mutual fund. But, individual stocks do not hold this advantage of dive rsification. If the prices of the stocks go down in the market, the investor is sure to lose money.

Professional management & efficiency As mutual funds are managed by the professi onal fund managers who are specialized in their field, they carry out the resear ch and analysis work much more efficiently and naturally speculate more correctl y about the market trends of stock prices and bond prices. In the other case, In dividual Stock investment is done directly by the investors who are in most case s common men who don t have much knowledge about the stock and bond market. Othe r than this as the mutual funds get a lot of money from people to invest in, the y can reap the benefit of Economies of Scale with the large sum of invested mone y.The origin of mutual fund industry in India is with the introduction of the co ncept of mutual SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND fund by UTI in the year 1963. Though the growth was slow, but it acc elerated from the year 1987 when non-UTI players entered the market. In the past decade, Indian mutual fund industry had seen dramatic improvements, both qualit y wise as well as quantity wise. Before, the monopoly of the market had seen an ending phase; the Assets under Management (AUM) were Rs. 67bn. The private secto r entry to the fund family raised the AUM to Rs. 470 by in March 1993 and till A pril 2009; it reached the height 2000 bn. Putting the AUM of the Indian Mutual F unds Industry into comparison, the total of it is less than the deposits of SBI alone, constitute less than 11% of the total deposits held by the Indian banking industry. The main reason of its poor growth is that the mutual fund industry i n India is new in the country. Large sections of Indian investors are yet to be intellectualed with the concept. Hence, it is the prime responsibility of all mu tual fund companies, to market the product correctly abreast of selling. The mut ual fund industry can be broadly put into four phases according to the developme nt of the sector. Each phase is briefly described as under. First Phase - 1964-8 7 Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up by the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank of India. In 1978 UTI was de-linked f rom the RBI and the Industrial Development Bank of India (IDBI) took over the re gulatory and administrative control in place of RBI. The first scheme launched b y UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6, 700 crores of asset s under management. Second Phase - 1987-1993 (Entry of Public Sector Funds) Entr y of non-UTI mutual funds. SBI Mutual Fund was the first followed by Canbank Mut ual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC in 1989 and GIC in 1990. The end of 1993 marked Rs.47, 004 as assets under mana gement. SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND Third Phase - 1993-2003 (Entry of Private Sector Funds) With the ent ry of private sector funds in 1993, a new era started in the Indian mutual fund industry, giving the Indian investors a wider choice of fund families. Also, 199 3 was the year in which the first Mutual Fund Regulations came into being, under which all mutual funds, except UTI were to be registered and governed. The erst while Kothari Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993. The 1993 SEBI (Mutual Fund) Regulat ions were substituted by a more comprehensive and revised Mutual Fund Regulation s in 1996. The industry now functions under the SEBI (Mutual Fund) Regulations 1 996. The number of mutual fund houses went on increasing, with many foreign mutu al funds setting up funds in India and also the industry has witnessed several m ergers and acquisitions. As at the end of January 2003, there were 33 mutual fun ds with total assets of Rs. 1,21,805 crores. The Unit Trust of India with Rs.44, 541 crores of assets under management was way ahead of other mutual funds. Four th Phase since February 2003 In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated into two separate entities. One is th e Specified Undertaking of the Unit Trust of India with assets under management of Rs.29, 835 crores as at the end of January 2003, representing broadly, the as sets of US 64 scheme, assured return and certain other schemes. The Specified Un dertaking of Unit Trust of India, functioning under an administrator and under t he rules framed by Government of India and does not come under the purview of th e Mutual Fund Regulations. The second is the UTI Mutual Fund Ltd, sponsored by S BI, PNB, BOB and LIC. It is registered with SEBI and functions under the Mutual Fund Regulations. With the bifurcation of the erstwhile UTI which had in March 2 000 more than Rs.76, 000 crores of assets under management and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund Regulations, and wit h recent mergers taking place among different private sector funds, the mutual f und industry has entered its current phase of consolidation and growth. As at th e end of September 2004, there were 29 funds, which manage assets of Rs.153108 c rores under 421 schemes. SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND d) Types of Schemes CLASSIFICATION OF MUTUAL FUND SCHEMES:Fig:-3 Any mutual fund has an objective of earning income for the investors and/ or getting increased value of their investments. To achieve these objectives mut ual funds adopt different strategies and accordingly offer different schemes of investments. On these bases the simplest way to categorize schemes would be to g roup these into two broad classifications: Operational Classification and Portfo lio Classification. Operational classification: - Operational classification hig hlights the two main types of schemes, i.e., open-ended and close-ended which ar e offered by the mutual funds. Portfolio classification:- Portfolio classificati on projects the combination of investment instruments and investment avenues ava ilable to mutual funds to manage their funds. Any portfolio scheme can be either open ended or close ended. SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND Operational Classification Open Ended Schemes: As the name implies t he size of the scheme (Fund) is open i.e., not specified or predetermined. Entry to the fund is always open to the investor who can subscribe at any time. Such fund stands ready to buy or sell its securities at any time. It implies that the capitalization of the fund is constantly changing as investors sell or buy thei r shares. Further, the shares or units are normally not traded on the stock exch ange but are repurchased by the fund at announced rates. Open-ended schemes have comparatively better liquidity despite the fact that these are not listed. The reason is that investors can any time approach mutual fund for sale of such unit s. No intermediaries are required. Moreover, the realizable amount is certain si nce repurchase is at a price based on declared net asset value (NAV). No minuteto-minute fluctuations in rates haunt the investors. The portfolio mix of such s chemes has to be investments, which are actively traded in the market. Otherwise , it will not be possible to calculate NAV. This is the reason that generally op en-ended schemes are equity based. Close Ended Schemes: Such schemes have a defi nite period after which their shares/ units are redeemed. Unlike open-ended fund s, these funds have fixed capitalization, i.e., their corpus normally does not c hange throughout its life period. Close ended fund units trade among the investo rs in the secondary market since these are to be quoted on the stock exchanges. Their price is determined on the basis of demand and supply in the Market. Their liquidity depends on the efficiency and understanding of the engaged broker. Th eir price is free to deviate from NAV, i.e., there is every possibility that the market price may be above or below its NAV. If one takes into account the issue expenses, conceptually close ended fund units cannot be traded at a premium or over NAV because the price of a package of investments, i.e., cannot exceed the sum of the prices of the investments constituting the package. Whatever premium exists that may exist only on account of speculative activities. In India as per SEBI (MF) Regulations every mutual fund is free to launch any or both types of schemes. SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND Portfolio Classification of Funds: Following are the portfolio class ification of funds, which may be offered. This classification may be on the basi s of (a) Return, (b) Investment Pattern, (c) Specialized sector of investment, ( d) Leverage and (e) Others. (a) Return based classification:To meet the diversif ied needs of the investors, the mutual fund schemes are made to enjoy a good ret urn. Returns expected are in form of regular dividends or capital appreciation o r a combination of these two. I. Income Funds: - For investors who are more curi ous for returns, Income funds are floated. Their objective is to maximize curren t income. Such funds distribute periodically the income earned by them. These fu nds can further be splitted up into categories: those that stress constant incom e at relatively low risk and those that attempt to achieve maximum income possib le, even with the use of leverage. Obviously, the higher the expected returns, t he higher the potential risk of the investment. ii. Growth Funds: - Such funds a im to achieve increase in the value of the underlying investments through capita l appreciation. Such funds invest in growth-oriented securities, which can appre ciate through the expansion production facilities in long run. An investor who s elects such funds should be able to assume a higher than normal degree of risk. iii. Conservative Funds: - The fund with a philosophy of all things to issue off ers document-announcing objectives as: (I) To provide a reasonable rate of retur n, (ii) To protect the value of investment and, (iii) To achieve capital appreci ation consistent with the fulfillment of the first two objectives. Such funds wh ich offer a blend of immediate average return and reasonable capital appreciatio n are known as middle of the road funds. Such funds divide their portfolio in co mmon stocks and bonds in a way to achieve the desired objectives. Such funds hav e been most popular and appeal to the investors who want both growth and income. SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND (b) Investment Based Classification:Mutual funds may also be classif ied on the basis of securities in which they invest. Basically, it is renaming t he subcategories of return based classification. I. Equity Fund: - Such funds, a s the name implies, invest most of their investible shares in equity shares of c ompanies and undertake the risk associated with the investment in equity shares. Such funds are clearly expected to outdo other funds in rising market, because these have almost all their capital in equity. Equity funds again can be of diff erent categories varying from those that invest exclusively in high quality blue -chip companies to those that invest solely in the new, unestablished companies. The strength of these funds is the expected capital appreciation. Naturally, th ey have a higher degree of risk. Equity Oriented Schemes ii. Bond Funds:Such funds have their portfolio consisted of bonds, debentures, etc. this type of fund is expected to be very secure with a steady income and little or no chance of capital appreciation. Obviously risk is low in such funds. In this category we may come across the funds called Liqu id Funds, which specialize in investing short-term money market instruments. The emphasis is on liquidity and is associated with lower risks and low returns. SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND Debt Based Scheme iii. Balanced Fund:The funds, which have in their portfolio a reasonable mix of equity and bonds, are known as balanced funds. Such funds will put more emphasis on equity share investments when the outlook is bright and wi ll tend to switch to debentures when the future is expected to be poor for share s. (c). Sector based classification: There are number of funds that invest in a specified sector of economy. While such funds do have the disadvantage of low di versification by putting all their all eggs in one basket, the policy of special izing has the advantage of developing in the fund managers an intensive knowledg e of the specific sector in which they are investing. Sector based funds are agg ressive growth funds which make investments on the basis of assessed bright futu re for a particular sector. These funds are characterized by high viability, hence more risky. nfrastructure IT Sector Auto Sector SRM UNIVERSITY [SCHOOL OF MANAGEMENT] Real Estate I

MUTUAL FUND Advantages of Investing into a Mutual Fund: Fig:-4 Flexibility - Mutual Fund investments also offers a lot of flexibility wi th features such as systematic investment plans, systematic withdrawal plans & d ividend reinvestment. Affordability - They are available in units so this makes it very affordable. Because of the large corpus, even a small investor can benef it from its investment strategy. Liquidity - In open-ended schemes, there is an option of withdrawing or redeeming money. Diversification - Risk is lowered with Mutual Funds as they invest across different industries & stocks. Professional Management - Expert Fund Managers of the Mutual Fund analyze all options based o n experience & research. Potential of return -The fund managers who take care of Mutual Fund have access to information and statistics from leading economists a nd analysts around the world. Because of this, they are in a better position tha n individual investors to identify opportunities for investments to flourish. Lo w Costs The benefits of scale in brokerage, custodial and other fees translate i nto lower costs for investors. Regulated for investor protection - The Mutual Fu nds sector is regulated to safeguard the investor s interests. SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND Advantages of Mutual Funds:Professional Management The primary advan tage of funds (at least theoretically) is the professional management of money. Investors purchase funds because they do not have the time or the expertise to m anage their own portfolio. A mutual fund is a relatively inexpensive way for a s mall investor to get a full-time manager to make and monitor investments. Divers ification By owning shares in a mutual fund instead of owning individual stocks o r bonds, risk is spread out. The idea behind diversification is to invest in a l arge number of assets so that a loss in any particular investment is minimized b y gains in others. In other words, the more stocks and bonds an individual own, the less any one of them can hurt. Economies of Scale: Because a mutual fund buy s and sells large amounts of securities at a time, its transaction costs are low er than as an individual would pay. Liquidity Just like an individual stock, a m utual fund allows in converting shares into cash at any time. Simplicity Buying a mutual fund is easy. When an investor invest in the mutual fund then they need to take form, fill it according to required instructions given and give the dem and draft or cheque of amount whatever they want to invest. Reduced risk: - As m utual funds invests in large number of companies and are managed professionally, the risk factor of the investor is reduced. A small investor, on the other hand , may not be in position to minimize the such risk. Tax advantage: - There are c ertain schemes of mutual fund which provide tax advantage under income tax act. Thus tax liability of investor also reduced when he invest in mutual fund scheme s. Low operating cost: - Mutual fund has large number of investible funds at the ir disposal and thus can avail the large scale of economies. This reduces their operating cost by way of brokerage, fees, commission etc. Thus, an investor can also gets the benefits of large scale of economies and low operating cost. SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND Disadvantages of Mutual Funds:Professional Management Many investors debate over whether or not the so-called professionals are any better than an i ndividual or others at picking stocks. Management is by no means infallible, and , even if the fund loses money, the manager still takes his/her cut. Costs The m utual fund industry is masterful at burying costs under layers of jargon. These costs are so complicated that in this tutorial we have devoted an entire section to the subject. Dilution Because funds have smallholdings in so many 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. Taxes When ma king decisions about an individuals money, fund managers don t consider about per sonal tax situation. For example, when a fund manager sells a security, a capita lgain 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 capit al gains liability. F) BASIS FOR SELECTION:Investors are selecting the mutual funds on the basis of following aspects of investment: Net assets Portfolio composition Income composit ion Gross income as percentage of net assets Expenses ratio Realized gain per un it Unrealized appreciation per unit SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND g) MUTUAL FUND CONSTITUENTS:Fig:-5 All mutual funds comprise four constituents Sponsors, Trustees, Asset Man agement Company (AMC) and Custodians. Sponsors: The sponsors initiate the idea t o set up a mutual fund. It could be a registered company, scheduled bank or fina ncial institution. A sponsor has to satisfy certain conditions, such as capital, record (at least five years operation in financial services), and de-fault free dealings and general reputation of fairness. The sponsors appoint the Trustee, A MC and Custodian. Once the AMC is formed, the sponsor is just a stakeholder. SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND Trust/ Board of Trustees: Trustees hold a fiduciary responsibility t owards unit holders by protecting their interests. Trustees float and market sch emes, and secure necessary approvals. They check if the AMCs investments are with in well-defined limits, whether the funds assets are protected, and also ensure t hat unit holders get their due returns. They also review any due diligence by th e AMC. For major decisions concerning the fund, they have to take the unit holde rs consent. They submit reports every six months to SEBI: Investors get an annua l report. Trustees are paid annually out of the funds assets 0.5 percent of the w eekly net asset value. Fund Managers/ AMC: They are the ones who manage money of the investors. An AMC takes decisions, compensates investors through dividends, maintains proper accounting and information for pricing of units, calculates th e NAV, and provides information on listed schemes. It also exercises due diligen ce on investments, and submits quarterly reports to the trustees. A funds AMC can neither act for any other fund nor undertake any business other than asset mana gement. Its net worth should not fall below Rs. 10 crore. And, its fee should no t exceed 1.25 percent if collections are below Rs. 100 crore and 1 percent if co llections are above Rs. 100 crore. SEBI can pull up an AMC if it deviates from i ts prescribed role. Custodian: Often an independent organization, it takes custo dy of securities and other assets of mutual fund. Its responsibilities include r eceipt and delivery of securities, collecting incomedistributing dividends, safe keeping of the units and segregating assets and settlements between schemes. The ir charges range between 0.15-0.2 percent of the net value of the holding. Custo dians can service more than one fund. SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND h) MARKETING STRATEGIES ADOPTED BY THE MUTUAL FUNDS The present mark eting strategies of mutual funds can be divided into three main headings: A. Dir ect marketing B. Selling through intermediaries. C. Joint Calls Direct Marketing : This constitutes 20 percent of the total sales of mutual funds. Some of the im portant tools used in this type of selling are: Personal Selling: In this case t he customer support officer or Relationship Manager of the fund at a particular branch takes appointment from the potential prospect. Once the appointment is fi xed, the branch officer also called Business Development Associate (BDA) in some funds then meets the prospect and gives him all details about the various schem es being offered by his fund. The conversion rate in this mode of selling is in between 30% 40%. Telemarketing: In this case the emphasis is to inform the peopl e about the fund. The names and phone numbers of the people are picked at random from telephone directory. Some fund houses have their database of investors and they cross sell their other products. Sometimes people belonging to a particula r profession are also contacted through phone and are then informed about the fu nd. Generally the conversion rate in this form of marketing is 15% 20%. Direct m ail: This one of the most common method followed by all mutual funds. Addresses of people are picked at random from telephone directory, business directory, pro fessional directory etc. The customer support officer (CSO) then mails the liter ature of the schemes offered by the fund. The follow up starts after 3 to 4 days of mailing the literature. The CSO calls on the people to whom the literature w as mailed. Answers their queries and is generally successful in taking appointme nts with those people. It is then the job of BDA to try his best to convert that prospect into a customer. SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND Advertisements in newspapers and magazines: The funds regularly adve rtise in business newspapers and magazines besides in leading national dailies. The purpose to keep investors aware about the schemes offered by the fund and th eir performance in recent past. Advertisement in TV/FM Channel: The funds are ag gressively giving their advertisements in TV and FM Channels to promote their fu nds. Hoardings and Banners: In this case the hoardings and banners of the fund a re put at important locations of the city where the movement of the people is ve ry high. The hoarding and banner generally contains information either about one particular scheme or brief information about all schemes of fund. Selling throu gh intermediaries: Intermediaries contribute towards 80% of the total sales of m utual funds. These are the people/ distributors who are in direct touch with the investors. They perform an important role in attracting new customers. Most of these intermediaries are also involved in selling shares and other investment in struments. They do a commendable job in convincing investors to invest in mutual funds. A lot depends on the after sale services offered by the intermediary to the customer. Customers prefer to work with those intermediaries who give them r ight information about the fund and keep them abreast with the latest changes ta king place in the market especially if they have any bearing on the fund in whic h they have invested. Regular Meetings with distributors: Most of the funds cond uct monthly/bi-monthly meetings with their distributors. The objective is to hea r their complaints regarding service aspects from funds side and other queries r elated to the market situation. Sometimes, special training programmes are also conducted for the new agents/ distributors. Training involves giving details abo ut the products of the fund, their present performance in the market, what the c ompetitors are doing and what they can do to increase the sales of the fund. SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND Joint Calls: This is generally done when the prospect seems to be a high net worth investor. The BDA and the agent (who is located close to the resi dence or area of operation) together visit the prospect and brief him about the fund. The conversion rate is very high in this situation, generally, around 60%. Both the fund and the agent provide even after sale services in this particular case. The most important trend in the mutual fund industry is the aggressive ex plosion of the foreign owned mutual funds companies and the decline of the compa nies floated by nationalized banks and small private sector players. Many nation alized banks got into the mutual funds business in the early nineties and got of to a good start due to the stock market boom prevailing then. These banks did n ot really understand the mutual funds business and they viewed it as another kin d of banking activity. Few hired specialized staff and generally chose to transf er staff from parent organizations. The performance of most of the schemes float ed by these organizations was not good. Some schemes had offered guaranteed retu rns and there parent organizations had to bail out these AMC by paying large amo unt of money as the difference between the guaranteed and actual returns. The se rvice levels were also very bad. Most of these AMC have not been able to retain staff, float new schemes etc. And it is doubtful whether, barring a few exceptio ns, they have serious plans of continuing the activity in a major way. The exper ience of some of the AMC floated by the private sector Indian companies was also very similar. They quickly realized that the AMC business is a business, which makes money in the long term and requires deep- pocketed support in the intermed iate years. Some have sold out to foreign owned companies, some have merged with others and there is a general restructuring going on. The foreign owned compani es have deep pockets and have come here with the expectations of a long haul. Th ey can be credited with the introduction of many new practices such as new produ ct innovation, sharp improvement in the service standards and disclosure, usage of technology, broker education and support etc. In fact, they have forced the i ndustry to upgrade itself and its service level of organization. SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND J) MARKETING OF FUNDS AND ITS CHALLENGES:When we consider marketing, we have to see the issues in totality, because we cannot judge an elephant by i ts trunk or by its tail but we have to see it in its totality. When we say marke ting of mutual funds, it means, includes and encompasses the following aspects: Assessing of investors needs and market research; Responding to investors needs; Product designing; Studying the macro environment; Timing of the launch of the product; Choosing the distribution network; Finalizing strategies for publicity and advertisement; Preparing offer documents and other literature; Getting feedb ack about sales; Studying performance indicators about fund performance like NAV ; Sending certificates in time and other after sales activities; Honoring the co mmitments made for redemptions and repurchase; Paying dividends and other entitl ements; Creating positive image about the fund and changing the nature of the ma rket itself. Widening, Broadening and Deepening the Markets The above are the aspects of marketing of mutual funds, in totality. Even if the re is a single weak-link among the factors which are mentioned above, no mutual fund can successfully market its funds. PRODUCT INNOVATION AND VARIETY A. Invest or Preferences The challenge for the mutual funds is in the tailoring the right products that will help mobilizing savings by targeting investors needs. It is n ecessary that the common investor understands very clearly and loudly the salien t features of funds, and distinguishes one fund from another. The funds that are being launched today are more or less look-alikes, or plain vanilla funds, and not necessarily designed to take into account the investors varying needs. SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND The Indian investor is essentially risk averse and is more passive t han active. He is not interested in frequently changing his portfolio, but is sa tisfied with safety and reasonable returns. Importantly, he understands more by emotions and sentiments rather than a quantitative comparison of funds performan ce with respect to an index. Mere growth prospects, in an uncertain market, are not attractive to him. He prefers one bird in the hand to two in bush, and is ha ppy if assured a rate of reasonable return that he will get on his investment. T he expectations of a typical investor, in order of preference are the safety of funds, reasonable return and liquidity. The investor is ready to invest his mone y over long periods, provided there is a purpose attached to it which is linked to his social needs and therefore appeals to his sentiments and emotions. That p urpose may be his child education and career development, medical expenses, heal th care after retirement, or the need for steady and sure income after retiremen t. In a country where social security and social insurance are conspicuous more by their absence, mutual funds can pool their resources together and try to mobi lize funds to meet some of the social needs of the society. B. Product Innovatio ns With the debt market now getting developed, mutual funds are tapping the inve stors who require steady income with safety, by floating funds that are designed to primarily have debt instruments in their portfolio. The other area where mut ual funds are concentrating is the money market mutual funds, sect oral funds, i ndex funds, gilt funds besides equity funds. The industry can also design separa te funds to attract semi-urban and rural investors, keeping their seasonal requi rements in mind for harvest seasons, festival seasons, sowing seasons, etc. i) M ARKET SEGMENTS OF MUTUAL FUND:Market Segmentation: Different segments of the market have different risk-return criteria, on the basis of which they take investment decisions. Not only that, in a particular segment also there could be different sub-segments asking for ye t different risk-return attributes, and differential preference for various inve stments attributes of financial product. SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND Different investment attributes an investor expects in a financial p roduct are: Liquidity, Capital appreciation, Safety of principal, Tax treatment, Dividend or interest income, Regulatory restrictions, Time period for investment, etc. On the basis of these attributes the mutual fund market may be broadly segmented into five main segments as under. 1) Retail Segment This segment characterizes large number of participants but low individual volumes. It consists of individu als, Hindu Undivided Families, and firms. It may be further sub-divided into: i. Salaried class people; ii. Retired people; iii. Businessmen and firms having oc casional surpluses; iv. HUF for long term investment purpose. These may be furth er classified on the basis of their income levels. It has been observed that pro spects in different classes of income levels have different patterns of preferen ces of investment. Similarly, the investment preferences for urban and rural pro spects would differ and therefore the strategies for tapping this segment would differ on the basis of differential life style, value and ethics, social environ ment, media habits, and nature of work. Broadly, this class requires security of the principal, liquidity, and regular income more than capital appreciation. It lacks specialized investment skills in financial markets and highly susceptible to mob behavior. The marketing strategy involving indirect selling through agen cy network and creating awareness through appropriate media would be more effect ive in this segment. SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND 2) Institutional Segment :---This segment characterizes less number of participants, and large individual volumes. It consists of banks, public sect or units, financial institutions, foreign institutional investors, insurance cor porations, provident and pension funds. This class normally looks for more speci alized professional investment skills of the fund managers and expects a structu red product than a ready-made product. The tax features and regulatory restricti ons are the vital considerations in their investment decisions. Each class of pa rticipants, such as banks, provides a niche to the fund managers in this segment . It requires more of a personalized and direct marketing to sustain and increas e volumes. 3) Trusts :---This is a highly regulated, high volumes segment. It co nsists of various types of trusts, namely, charitable trusts, religious trust, e ducational trust, family trust, social trust, etc. each with different objective s. Its basic investment need would be safety of the principal, regular income an d hedge against inflation rather than liquidity and capital appreciation. This c lass offers vast potential to the fund managers, if the regulators relax guideli nes and allow the trusts to invest freely in mutual funds. 4) Non-Resident India ns :---This segment consists of very risk sensitive participants, at times refer red as fair weather friends. They need the highest cover against political and e xchange risk. They normally prefer easy exit with repatriation of income and pri ncipal. They also hold a strategic importance as they bring in crucial foreign e xchange a crucial input for developing country like ours. Marketing to this segm ent requires special kind of products for groups of foreign countries depending upon the provisions of tax treaties. The range of suitable products are required to design to divert the funds flowing into bank accounts. The latest flavor in the mutual fund industry is exclusive schemes for non-resident Indians (NRI.) 5) Corporate :---Generally, the investment need of this segment is to park their o ccasional surplus funds that earn return more than what they have to pay on acco unt of holding them. Alternatively, they also get surplus fund due to the season ality of the business, which typically become due for the payment within a year or quarter or even a month. They need short term parking place for their fund, t his segment offers a vast potential to specialized money market managers. Given the relaxation in the regulatory guidelines, fund managers are expected design p roducts to this segment. Thus, each segment and sub-segment has their own risk r eturn preferences forming niches in the market. Mutual funds managers have to an alyze in detail the intrinsic needs of the prospects and design a variety of sui table products for SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND them. Not only is that, the products also required to be marketed th rough appropriately different marketing strategies. The Atheists are turning bel ievers. Mutual funds, private sector ones in particular, who had written off adv ertising as the A ultimate waste of money have nearly tripled their press media spend .What interesting is that in this period the share of the private sector m utual funds in the category total media spending has surged from 20 percent to 5 2 percent. This can be attributed to private sector funds (given the data availa ble with the Association of Mutual Funds of India) seeing an increase share of n et inflows relative to the bank-sponsored counterparts in the public sector. Cle arly advertising types have something to cheer about. But what caused this sudde n attitudinal shift towards advertising? According to experts, funds are being p ushed into advertising more by intermediaries like banks who are reluctant to se ll a product whose name is unfamiliar to investor. Besides, since more open-ende d schemes are now available, some form of ongoing support to keep sales booming has been deemed necessary by the funds. The industry has discovered that adverti sing in the changed climate today, when investors are most receptive to mutual f unds, can perk up sales by anywhere between 20-40 percent. MF has rationale for stepping up marketing spends because the brand is an important part of the consu mer decision to invest in a category that is not yet clearly understood by peopl e. According to the mutual fund marketers, advertising helps bring recall when c onsumers are looking at investment opportunities. Advertising backed by an integ rated marketing and communication campaign designed to attract investors with lo ng term prospective has helped the fund post a redemption-to-sales ratio of just about five percent as compared to 20-30 percent for the industry on an average. Direct mail is another medium, which some funds have successfully used. But rat her than sending out mailers to all and sundry, there is a need for appropriate targeting. Educational seminars are the final leg in the marketing and communica tion process. In these, investors conditioned by advertising and hooked by an in teresting mailer can have lingering doubts clarified. Attractive point of purcha se (POP) material can also help. SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND Another very successful media niche, which has been exploited to the hilt by funds, is intermediary magazines and newsletters. Besides the low costs of advertising in these newsletters, these publications circulate to those who are looking for investment opportunities and thus represent an extremely lucrati ve target segment. Advertising content by most of the funds too has undergone a marked change from concept-selling ads dispelling myths, to selling specific sch emes that meet defined objectives/ goals. k) SEBI GUIDELINES The SEBI issued a s et of regulations and code of conduct of 20 January. 1993 for the smooth conduct and regulation of Mutual fund. The silent features of these guidelines are a s follows: Mutual Fund cannot deal in Option trading, short selling or carrying forward transactions in securities. Mutual fund should be formed as trusts and managed by AMC Restriction to ensure those investments under all schemes do not Exceed 15% of the funds in the shares and debentures of a single company. SEBI will grant registration to only those Mutual Funds, which can prove an efficient and orderly conduct of business. The Mutual fund should have a custodian, not associated in any way with the AMC and registered with the board. The minimum amount to be raised with each closed ended scheme should be Rs. 20 crore and for the open-ended scheme Rs. 50 crore. The Mutual Fund is obliged to maintain books of account. f AMC is Rs. 5 crore of which the minimum contribution The minimum net worth o

of the sponsor should be 40%. The Mutual Fund should ensure adequate disclosures to the investors SEBI can imp ose suspension of registration in case of violation of the provision of the SEBI act 1992, to the regulations. Restrictions to ensure the investments under an individual scheme donot exceed 5 % of the corpus of any companies shares and investments under all schemes do not ex ceed 10% of the funds in the shares, debentures or securities of a single compan y. SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND CHAPTER:-2 2.1) COMPANY PROFILE:The Standard Chartered Group was formed in 1869 through a merger of two banks: T he Standard Bank of British South Africa founded in 1863, and the Chartered Bank of India, Australia and China, founded in 1853. Both companies were keen to cap italize on the huge expansion of trade and to earn the handsome profits to be ma de from financing the movement of goods from Europe to the East and to Africa. The Chartered Bank Founded by James Wilson following the grant of a Royal Charter by Queen Victoria in 1853

Chartered opened its first branches in Mumbai (Bombay), Calcutta and Shanghai in 1858, followed by Hong Kong and Singapore in 1859

Traditional business was in cotton from Mumbai (Bombay), indigo and tea from Cal cutta, rice in Burma, sugar from Java, tobacco from Sumatra, hemp in Manila and silk from Yokohama

Played a major role in the development of trade with the East which followed the opening of the Suez Canal in 1869, and the extension of the telegraph to China in 1871

In 1957 Chartered Bank bought the Eastern Bank together with the Ionian Banks Cyp rus Branches. This established a presence in the Gulf SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND The Standard Bank

Founded in the Cape Province of South Africa in 1862 by John Paterson. Commenced business in Port Elizabeth, South Africa, in January 1863

Was prominent in financing the development of the diamond fields of Kimberley fr om 1867 and later extended its network further north to the new town of Johannes burg when gold was discovered there in 1885

Expanded in Southern, Central and Eastern Africa and by 1953 had 600 Offices

In 1965, it merged with the Bank of West Africa expanding its Operations into Ca meroon, Gambia, Ghana, Nigeria and Sierra Leone In 1969, the decision was made by Chartered and by Standard to undergo a Friendl y merger. All was going well until 1986, when a hostile takeover bid was made fo r the Group by Lloyds Bank of the United Kingdom. When the bid was defeated, Sta ndard Chartered entered a period of change. Provisions had to be made against th ird world debt exposure and loans to corporations and entrepreneurs who could no t meet their commitments. Standard Chartered began a series of divestments notab ly in the United States and South Africa, and also entered into a number of asse t sales. From the early 90s, Standard Chartered has focused on developing its st rong franchises in Asia, the Middle East and Africa using its operations in the United Kingdom and North America to provide customers with a bridge between thes e markets. Secondly, it would focus on consumer, corporate and institutional ban king, and on the provision of treasury services? areas in which the Group had pa rticular strength and expertise. In the new millennium we acquired Grindlays Bank from the ANZ Group and the Chase Consumer Banking operations in H ong Kong in 2000. SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND Establishment of Standard Chartered Bank around the world Country Year Established United Kingdom 1853 China, India, Sri 1858 Lanka Hong K ong, 1859 Singapore Indonesia, Pakistan 1863 Philippines 1872 Malaysia 1875 Japa n 1880 Country Australia Mexico, Oman Peru Jersey Brazil Venezuela Falkland Macau Taiwa n Cameroon Year Established 1964 1968 1973 1978 1979 1980 Islands, 1983 1985 1986 Zimbabwe 1892 The Gambia, Sierra 1894 Leone, Thailand Ghana 1896 Botswana 1897 U SA Bangladesh Zambia Kenya Uganda Tanzania Bahrain Jordan Korea Qatar 1902 1905 1906 1911 1912 1917 1920 1925 1929 1950 Nepal 1987 Vietnam 1990 Cambodia, South 1992 Africa Iran 1993 Colombia 1995 Laos , Argentina 1996 Nigeria 1999 Lebanon 2000 CotedIvoire 2001 Mauritius 2002 Turke y 2003 Afghanistan 2004 Brunei, UAE 1958 SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND Recent strategic alliances and acquisitions The year 2005 and 2006 were historic years for us as we achieved several milestones with a number of strategic allia nces and acquisitions that will extend our customer or geographic reach and broa den our product range. We completed, rebranded and successfully integrated SC First Bank in Korea, whic h to date is the biggest acquisition in our history.

We completed full integration between Standard Chartered Bank ,Thailand and Stan dard Chartered Nakornthon Bank in October.

We formed strategic alliances with Fleming Family & Partners to expand private w ealth management in Asia and the Middle East.

We acquired stakes in ACB Vietnam and Travelex. We acquired the business operati ons of American Express Bank in Bangladesh. We acquired a stake in Bohai Bank in Tianjin, China, making us the first foreign bank to be allowed a stake in a loc al bank in China.

We acquired a 25% stake in First Africa Group Holdings in June 2006.

We acquired an additional 26% stake in Permata Bank through our consortium with PT Astra International, thus giving the consortium a total stake of 89%.

We acquired Union Bank in Pakistan in September 2006 and we have successfully re branded all branches.

We launched a tender offer in the end of 2006 for 100% in Hsinchu International Bank, Taiwan SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND PRODUCT PROFILE EQUITY SCHEME Imperial Equity Fund The Standard Chartered Premier Equity Fund, a n innovative open ended equity fund that attempts to generate wealth over the lon g term through a potent combination of well defined investment strategy and a ro bust investment management structure. At Standard Chartered Mutual Fund we belie ve that wealth creation is a patient process that involves a good blend of myria d themes like the identification of a basket of growth ideas, investing in them at an early stage and the conviction to hold on for the longer term. For opportu nities then will abound. Over the past decade, Indian companies have converted t heir competitive advantage to market dominance and in the process have created s erious wealth for investors over a 5-year period. If the software and the teleph ony sectors like the insurance, aviation to name a couple where we envisage such growth. The Premier Equity Fund will indulge wholeheartedly in this endeavor to create wealth creation process and thus seek to provide long - term investors w ith an option to generate wealth. Enterprise Equity Fund A 3 year close-ended eq uity fund that will invest in IPOs that are slated for launch in the next three years. It helps you take advantage of the increasing number of IPOs and benefit from the potential premium on listing of IPOs. So no more applying, waiting for allotment or refund cheques. Dont lose out on IPOs. Equity Arbitrage Fund The Standard Chartered Arbitrage Fund makes the most the difference across marke ts by investing in the cash and futures market. And with up to 35% allocation to debt and money market instruments, the product suits a low-risk profile perfetc ly. You don t have to always make a choice, but you can make the most from the o ptions. And The Standard Chartered Arbitrage Fund does exactly that. SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND Tax Saver (ELSS) Fund Standard Chartered has also introduced its Tax saver ELSS fund Specifically in o rder to provide income tax benefit to the IT payers Under section 80C of Income Tax Act. DEBT SCHEME Standard Chartered all session bond Fund Investment Objective:To gen erate optimal returns with high liquidity by active management of the portfolio, by investing predominantly in debt oriented mutual fund schemes and money marke t instruments. There can be no assurance that the investment objective of the heme will be realized. Ideal investment horizon The scheme is designed for investors seeking stable returns over a relatively. L onger tenor period of investment of more than a year. 2.2 OBJECTIVE OF STUDY Primary objective: The primary objective of the study is t o understand the mutual fund and understand the different aspects of mutual fund s and their functioning in market. To understand the investment pattern of mutua l fund in different type of schemes and how these schemes are able to serve the needs of the customer. To understand how a customer looks at the scheme and what kind of benefit they want from any scheme. SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

Sc

MUTUAL FUND To understand the difference between the direct investment in stocks and in mutual fund and evaluate that which investment is beneficial. Secondary objective: To understand the customer perception towards making investm ent in any kind of stock and in mutual fund. How the mutual funds where issued t o customer. Where these mutual funds are traded. 2.3) SCOPE OF STUDY: This study will help in understanding the growing mutual fun d market in India and this will also help us to understand the fast changes in n ature of mutual fund. This study is quite helpful in understanding the functioni ng of any mutual fund company in recent loomy market condition. This study will help in understanding the investment pattern of the mutual fund and help the cus tomer to choose a particular pattern. The study will help to understand the orga nization to understand the changing needs of the customer and that will the orga nization to track the customer in future. The study is done in Patna, where standard chartered mutual fund doesnt have more branches that will the organization to expand their firm in Patna by understand ing customer through this study. SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND 2.4) LIMITATION OF THE STUDY: The study was limited to specific area of the PATNA city. This study was limited to sample size of 150. The time has constraint of 1 month. The customer was not providing right information to us. Non-availabilit y of past data, Balance Sheet etc. Non-availability of Fund Manager to discuss o n fund strategies and growth projections due to geographical location. This stud y has been limited by time and cost factors. This study has been made from the i nformation given by STANDARD CHARTERD MF office. Accuracy of the findings is dep endent on the quality of their Responses. SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND 2.5) RESEARCH METHODOLOGY:Research methodology define as the systematic plan, de sign, collection, analysis and reporting of data and findings relevant to a spec ific marketing situation facing the company. RESEARCH DESIGN:The research requires developing the most efficient plan for gat hering the needed information. this involves decision on the data sources, resea rch approaches, research instrument, sampling plan and contact method. There are three types of research design as follows:EXPLARATORY RESEARCH:Explaratory research is conducted when researcher does not know how and why certain phenomenon occurs. The prime goal for this research is to know unknown, this research is unstructured. DESCRIPTIVE RESEARCH:Descriptive research is carried out to describe the phenomenon or market characteristics. T his study is done to understand buyer behavior and describe characteristics of t he target market. This study is done for evaluation of the customer preference. CAUSATIVE RESEARCH:Causative research is done to establish the cause and effect relationship. I use the descriptive research for my study. SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND DATA SOURCES:PRIMARY DATA:Primary data are collected by a study specifically to fulfill the data needs of the problem at hand. such data are original in charact er and are generated in large number of surveys conducted mostly by government a nd also by individual, institution, and research bodies. METHODS OF COLLECTING PRIMARY DATA: Direct personal interviews. Indirect oral int erviews. Information from correspondence. Mail questionnaire method. SECONDARY DATA:Data which are not originally collected but rather obtained from published and unpublished sources are known as secondary data. SOURCES OF SECONDARY DATA: Published sources Unpublished sources

SAMPLE:When secondary data are not available for the problem under study, a deci sion may be made to collect primary data by different methods for information. T he information may be collected by either the census method or sample method. Th e sample is a portion of universe. SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND SAMPLING METHODS:1. Non probability sampling method. 2. Probability sampling method. Non probability sampling method: Judgment sampling:In this method of sampling the choice of sample items depends on judgment of the investigator. In other words, the investigator exercises his judgment in the choice and includes those items in sample which he thinks are mo st typical of universe with regard to characteristics under investigation.

Quota sampling:In a quota sample, quotas are set up according to some specified characteristics such as so many in each of several income groups, so many in eac h age group etc.

Convenience sampling:A convenient sampling is obtained by convenient population. This is also called as chunk. Probability sampling method: Sampling or unrestricted random samples:-simple or restricted random sampling te chnique refers to that sampling in which each and every unit of the population h as an equal opportunity of being selected in the sample.

Restricted random sampling:o Stratified sampling:- Stratified random sampling or simply stratified sampling is one of the random methods which, by using the ava ilable information concerning the population, attempt to design a more efficient sample than obtained by the simple random procedure. SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND o Systematic sampling:- A systematic sample is formed by selecting o ne unit at random and then selecting additional unit at evenly spaced intervals until the samples has been formed. o Multi stage or cluster sampling:- Under thi s method, the random selection is made of primary, intermediate and final (the u ltimate) units given from a given population or stratum. SAMPLE SIZE:150 MATHEMATICAL & STATICAL TOOLS USED FOR DATA ANALYSIS ethod Percentage method Average m

2.6) LITERATURE REVIEW:The Indian mutual funds industry is witnessing a rapid gr owth as a result of infrastructural development, increase in personal financial assets, and rise in foreign participation. With the growing risk appetite, risin g income, and increasing awareness, mutual funds in India are becoming a preferr ed investment option compared to other investment vehicles like Fixed Deposits ( FDs) and postal savings that are considered safe but give comparatively low retu rns, according to Indian Mutual Fund Industry. This report provides a detailed ana lysis along with current and future outlook of the Indian mutual fund industry a nd explores the market development and potential. The forecasts and estimations given in this report are not based on a complex economic model, but are intended as a rough guide to the direction in which the industry is likely to move. SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND Key Findings The Indian mutual funds retail market, growing at a CAG R of about 30%, is forecasted to reach US$ 300 Billion by 2015. - At about 84% ( as on May 31, 2009), private sector Asset Management Companies account for major ity of mutual fund sales in India. - Individual investors make up for 96.86% of the total number of investor accoun ts and contribute 36.9% of the net assets under management. Key Issues & Facts A nalyzed in the Report - What are the key factors fueling growth into the Indian mutual fund market? - Which are the fastest growing products? - What are the key growth prospects? - What are the key challenges for the market? - How the marke t is likely to move in future? Key Players This section provides business analys is of key players in the Indian mutual fund market, including Reliance Capital, BOB and HDFC,Standard chartered. Research Methodology Used Information sources:I nformation for this report has been sourced from books, newspapers, trade journa ls, white papers, industry portals, government agencies, trade associations, mon itoring industry news and developments, and through access to more than 3000 pai d databases. Analysis method:The analysis methods used in this report include ra tio analysis, historical trend analysis, linear regression analysis using softwa re tools, judgmental forecasting, and cause and effect analysis. SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND CHAPTER:-3 DATA ANALYSIS & INTREPRETATION:TABLE:-1 1.Occupation wise classification:Occupat ion Professional Business man Employee Govt.employees Student Total Figure:-6 Occupation wise classification 160 140 120 100 80 60 40 20 0 1 2 3 4 5 6 Categories of occupation Occupation No . of respondents percentage No. of respondents 15 99 12 18 06 150 Percentage 10% 66% 8% 12% 4% 100% Inference: 66% of respondent were belonging to businessman category. dent were belonging to students category. SRM UNIVERSITY [SCHOOL OF MANAGEMENT] 4% of respon

MUTUAL FUND TABLE NO.-2 Income wise classification:Income level 5000-10000 10000-15000 15000-20000 More than 20000 Total Fig:-7 NO. of respondents 18 45 63 24 150 Percentage 12% 30% 42% 16% 100% Income wise classification 160 140 120 100 80 60 40 20 0 500010000 1000015000 1500020000 More than 20000 To tal No.of repondents NO. of respondents Percentage Income levels Inference: 42% of respondent are having income of 15000-20000 12% of respondents are having income of 5000-10000 SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND TABLE NO.-3 Savings:Saving 1000-4000 4000-7000 7000-10000 More than 10000 Total No. of respondents 27 23 72 28 150 Percentage 18% 15% 48% 19% 100% Fig:-8 Monthly saving 160 140 120 100 80 60 40 20 0 1000-4000 No. of respondents percentage No. of respondents 4000-7000 7000-10000 saving More than 10000 Total Inference: 4000-7000 48% of respondent are saving 7000-10000 15% of respondents are saving

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MUTUAL FUND TABLE NO.-4 Awareness of mutual fund among General mass:Attributes Yes No Total No. of respondent 135 15 150 Percentage 9o% 10% 100% Figure:-9 135 9o% Inference: l fund 90% of respondents was aware of mutual fund 10% was not aware of mutua

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MUTUAL FUND TABLE NO.-5 Where do you want to invest most:Investment alternatives Bank deposits Stock market Insurance Mutual fund Debentu re Derivatives Total No. of respondents 51 14 38 29 5 13 150 Percentage 34% 9.5% 25.5% 19.5% 3.5% 9% 100% Fig:-10 Investment pattern 350 300 250 200 150 100 50 0 In su ra nc e M ut ua lf un d de be nt ur e De riv at iv es de po s ar ke t To t a l its No.of respondents Percentage No. of respondents Ba nk St oc k m Invstment alternatives Inference: 34% of respondents liked to invest in bank deposit. st in debenture. SRM UNIVERSITY [SCHOOL OF MANAGEMENT] 3.5% liked to inve

MUTUAL FUND TABLE NO.-6 Do you want to invest? Attributes Yes No Total No. of respondents 120 30 150 Percentage 80% 20% 100% Fig:-11 Yes No Inference: 80% of respondents want to invest. 20 % dont want to invest

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MUTUAL FUND TABLE NO.-7 Reason to invest in mutual fund:Reason More return Safety Limited risk Capital appreciation Systematic investmen t Total Fig:-12 No. of respondents 36 25 27 39 23 150 Percentage 24% 16.5% 18% 26% 15.5% 100% reason to select MF 160 140 120 100 80 60 40 20 0 More return Safety Capital appreciation Limited risk Systematic investment Total No.of respondents Series1 Series2 Benefits of MF Inference: 26% of respondent would like to invest in mutual fund because of capit al appreciation. 15.5% of respondents would like to invest in mutual fund for sy stematic investment. SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND TABLE NO.-8 Investment amount in Mutual fund:Amount 1000-4000 4000-7000 7000-100 00 More than 10000 Total No. of respondents 10 18 75 47 150 Percentage 6.7% 12% 50% 31.3% 100% Fig:-13 investment amount in MF 160 140 120 100 80 60 40 20 0 10004000 40007000 700010000 Amount More than 10000 Total No. of respondents Percentage Inference: 50% of respondents wants to invest 7000-10000 6.7% respondents wants t o invest 1000-4000 SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND TABLE NO.-9 PREFERRED FUND IN MF S.NO. 1 2 3 4 FUND EQUITY FUND DEBT. FUND BALANCED FUND ELSS SCHEME TOTAL NO. OF RESPONDENTS 51 24 44 41 150 PERCENTAGE 34% 16% 29% 21% 100% Source Fig:-14 : PRIMARY DATA Inference: 34% of respondents prefer equity scheme of mutual fund. ents prefer debt scheme of mutual fund. SRM UNIVERSITY [SCHOOL OF MANAGEMENT] 16% of respond

MUTUAL FUND TABLE NO.-10 Do you know about STANDARD CHARTERD Mutual fund:Attribute Yes No Total Respondents 129 21 150 Percentage 86% 14% 100% Fig:-15 AWARENESS of STANDARD CHARTERD MF Yes No Inference: 86% of respondents know about the STANDARD CHARTERD mutual fund. 14% o f respondents dont knows the name of STANDARD CHARTERD Mutual fund. SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND TABLE NO.-11 Have you invested in STANDARD CHARTERD Mutual fund? Attribute Yes No Total No. of respondents 120 30 150 Percentage 80% 20% 100% Fig:-16 1 2 Inference: 80% 0f respondents have invested in STANDARD CHARTERD mutual fund 20% of respondents havent invested in mutual fund. SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND TABLE NO.-12 Reason for investing in STANDARD CHARTERD mutual fund:Reason For better return For minimum risk For tax benefit For Capital appreciati on Total Respondents 33 39 18 30 120 Percentage 27.5% 32.5 15% 25% 100% Fig:-17 Benefits of investment in STANDARD CHARTERD MF 120 100 80 60 40 20 0 For better return For tax benefit Benefits Total Responden ts percentage Inference: 32.5% of respondents have invested in STANDARD CHARTERD Mutual fund fo r minimum risk. 15% for tax benefit. SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND TABLE NO.-13 Attracting elements of STANDARD CHARTERD Mutual fund:Re asons Systematic investment plan(SIP) Limited investment Proficiency Better fund allocation Diversification of Your fund Total Respondents 18 Percentage 15% 51 27 18 6 120 42.5% 32.5% 15% 4% 100% Fig:-18 investment types 120 100 80 60 40 20 Diversification of Your fund 0 Respondents benefits Percenta ge Total Proficiency Better fund allocation Systematic investment plan(SIP) Limi ted investment Inference: 42.5% of respondents said the limited investment in STANDARD CHARTERD MF was most attracting. 6% said its diversification is most attractive.

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MUTUAL FUND TABLE NO.-14 In how many schemes of STANDARD CHARTERD Mutual fund wo uld you like to invest? No. of schemes 1 2 3 More than 3 No. of respondent 72 15 16 17 Percentage 60% 12.5% 13.25% 14.25% Fig:-19 Customer interest in STANDARD CHARTERD Mutual fund 80 70 60 50 40 30 20 10 0 No. of respondent Percentage No of respondent 1 2 3 More than 3 Inference: 60% of respondents would like to invest in 1 scheme of STANDARD CHARTE RD Mutual fund. 12.5% would like to invest in 2 schemes of STANDARD CHARTERD mut ual fund.

SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND TABLE NO.-15 Have you invested in any other mutual fund? Attributes Yes No Total No. of respondents 18 102 120 Percentage 15% 85% 100% Fig:-20 Yes 1 2 Inference; 85% of respondents havent invested in other mutual fund. 15% of respond ents have invested in other mutual fund SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND TABLE NO.-16 In which mutual fund have you invested? Names Prudential ICICI mutual fund Reliance mutual fund Birla sun life mutual fu nd SBI mutual fund Others Total No. of respondents 2 6 3 4 0 18 Percentage 10.5% 33.3% 16.6% 22.6% 0% 100% Fig:-21 investment in other MF 18 16 14 12 10 8 6 4 2 0 Prudential ICICI mutual fund No. of respondents Percentage Birla sun life mutual fund Others Other MF COs Inference: 33.3% of respondents have invested in Reliance mutual fund SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND TABLE NO.-17 Would you like to suggest others to invest in STANDARD CHARTERD mutual fund? Attributes Yes No Total No. of respondents 96 24 120 Percentage 80% 20% 100% Fig:-22 Yes 1 2 Inference: 80% of respondent would like to suggest to others to invest in STANDAR D CHARTERD Mutual fund. 20% wouldnt like to suggest. SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND TABLE NO.-18 For which benefit will you suggest others to invest in STANDARD CHARTERD Mutual fund? Benefits Good return Tax benefit Future benefit Capital appreciation Total No of respondents 20 28 39 9 120 Percentage 20.8% 29.9 40.7% 9.6% 100% Fig:-23 120 100 80 60 40 20 0 Good return Future benefit Total No of respondents Percent age Inference: 40.7% of respondents would like to suggest others for future benefits. 9.6% respondents would suggest for capital appreciation SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND CHAPTER:-4 4.1) FINDINGS:66% of respondent were belonging to businessman category. (refer Table no.1) 42% of respondent are having income of 15000-20000 (refer Table no.2) 48% of respondent are saving 7000-10000 (refer Table no.3) 90% of respondents was aw are of mutual fund (refer Table no.4) 34% of respondents liked to invest in bank deposits. (refer Table no.5) 80% of respondents want to invest. (refer Table no .6) 26% of respondent would like to invest in mutual fund because of capital app reciation. (refer Table no.7) 50% of respondents want to invest 7000-10000. (ref er Table no.9) 86% of respondents know about the STANDARD CHARTERED mutual fund. (refer Table no.10) 80% of respondents have invested in STANDARD CHARTERED mutu al fund. (refer Table no.11) 32.5% of respondents have invested in STANDARD CHAR TERED Mutual fund for minimum risk. (refer Table no.12) 15% for tax benefit. (re fer Table no.12) 42.5% of respondents said the limited investment in STANDARD CH ARTERED MF was most attracting. (refer Table no.13) 60% of respondents would lik e to invest in 1 scheme of STANDARD CHARTERED Mutual fund. (refer Table no.14) 8 5% of respondents havent invested in other mutual fund. (refer Table no.15) 33.3% of respondents have invested in Reliance mutual fund. (refer Table no.16) 80% o f respondent would like to suggest to others to invest in STANDARD CHARTERED Mut ual fund. (refer Table no.17)

40.7% of respondents would like to suggest others for future benefits. (refer Ta ble no.18) SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND 4.2) PERSONAL OBSERVATION:My personal observations/learnings are as f ollows: I understood the different schemes of mutual fund how these schemes were launched and designed for customer. I understood the behavior of the investors h ow investors are choosing the schemes of mutual fund. What were the criteria for selecting the mutual funds Through personal observation of small market place, I learnt that investor like a uniform yield from their investment so they were k een interested in STANDARD CHARTERED Mutual funds.

In this loomy scenario the investor didnt want to take any more risk in investmen t so they like to invest in mutual fund. Because of less risk in mutual fund the new investor would like invest in mutual funds schemes. Mutual fund becomes stro ng investment alternative for existing and new investors. There will be a wide m arket place for mutual fund in future.

4.3) SUGGESTION: The STANDARD CHARTERED Mutual fund is fastest growing mutual fun d company in India and they dont have the investor from Income group of 100001500 0 p.mth. So they should also target these investors who are more interested in i nvesting in mutual fund. They should provide more information about their investment product and services mean they should also concentrate on promotion of their schemes.

The STANDARD CHARTERED Mutual fund should widen their market in Bihar for next f ew yrs so they can target investors of that state. SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND Basically the equity schemes were performing well in market and rest of the schemes were performing comparative less so they should also change thei r strategy for other schemes like debt fund, children gilt fund, and liquid fund s. The STANDARD CHARTERED Mutual fund has competitors like SBI Mutual fund, ICICI M utual funds TATAs mutual funds etc which were performing equivalent to STANDARD C HARTERED Mutual fund so they should design their product according to the change s in their schemes and according to the needs of changing investors.

Retailers to give the right kind of investment pattern for the investors with th e value added services that in fact help the fund house to pull the investors th an to push the products to them.

Demonstrations about the products should be given to the investors, as it helps to suggest the right product to the right investors.

The retailers need to send the personal mails to the prospects, this can done by acquiring the database of the customers of home loan, this helps it penetrating .

Company can reduce the initial amount for all the mutual fund schemes; hence the y can cover huge customers.

For effective relationship, company can provide sufficient information about the se schemes, stock market, others information in local languages.

STANDARD CHARTERED Mutual fund has its own image and good will in the fund marke t, it should be a continued. SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND 4.4) STRATEGICAL SUGGESTION For selling the mutual fund to the custo mers the FAB concept is the best option to be followed by the company. The appli cation of FAB concept will really help the company to boost up its sale of mutua l funds to various new customers. This concept will well guide a way to reach to the maximum of customers. FAB includes F Features A Advantages & B Benefits Features: For success of a product, it must have extra new features than existin g one. Advantages: These extra features should provide more advantage to custome rs in other ways. Benefits: One must look that this new features and advantages must benefit the customers show only the customers will buy the product. The FABing concept focuses on the quality and new features that aspire customers to buy it. Aspiration in the customer is the basic flow of motivation to buy an y product. Hence the product should include all the new features of which is mor e advantageous and benefits to the customers. Thus the company must target to Add new features in its policies. tage of its policies. Sale the benefits to the customers. SRM UNIVERSITY [SCHOOL OF MANAGEMENT] Focus on advan

MUTUAL FUND 4.5) CONCLUSION:Finally I would like to conclude my study by saying that the STANDARD CHARTERED Mutual fund is one of the fastest growing mutual fun d company in India which fulfills the needs of new and existing investors. The S TANDARD CHARTERED Mutual fund also gives a way to forthcoming investors. Mutual fund is an emerging investment alternative which has grown so fatly in fe w decades and definitely it will be the powerful industry in future. The mutual fund is one of the safe investment alternative in which the new inves tor, who belong to limited salaried group, like to invest in these kind of mutua l for steady and limited yield with limited risk, tax benefit. From the above re sponses of questionnaire we can say that Investors are still not very much aware about mutual fund. Equity fund is most preferable fund. Advertisement is one of the ways to explore mutual fund. AMC should be more focuses on fund performance . The tax benefits on mutual funds made a turning point to its investors. Compan y should reduce the initial amount of mutual fund schemes so, it covers lot of c ustomers. Banks is most preferable investment on the basis of safety. SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND BIBLIOGRAPHY Websites: www.mutualfundsindia.com www.amfi.com www.mut ualfunds.com www.bseindia.com www.sebi.com www.sebi.gov.in www.capitalmarket.com www.moneycontrol.com www.alliancecapitalindia.com Books 1. David A.Aker, V.Kumar & George S. Day (2002), John Wiley & Sons, INC, M arketing research. C.R.Kothari (2003), New Age International (p) Ltd, Research m ethodology V.A. Avadhani (2003). Himalaya Publishers, Security Analysis and Port folio Management. Philip kotler, marketing management G.C.beri, Business statist ics. Security analysis, Prasanna Chandra. Mutual funds- management and working b y: - lalit k. Bansal 2. 3. 4. 5. 6. 7. SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND Questionnaire:1) Name:2) Occupation:3) Your monthly income:a) 5000-10000 b) 10000-15000 c) 150 00-20000 d) More than 20000 4) How much are you saving? a) 1000-4000 b) 4000-700 0 c) 7000-10000 d) More than 10000 5) Do you want to invest? a) Yes b) No c) Can not say 6) Do you know about mutual fund? a) Yes b) No 7) Where do you want to invest? a) Bank deposite b) Stock market c) Insurance d) Mutual fund e) debentur e f) Derivatives g) Bonds SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND 8) If you want to invest in mutual fund, why ? a) More return b) Saf ety c) Limited risk d) Capital appreciation e) Systematic investment 9) How much do you want to invest in mutual fund? a) 1000-4000 b) 4000-7000 c) 7000-10000 d ) More than 10000 10) Do you know about STANDARD CHARTERD Mutual fund? a) Yes b) No 11) Have you invested in STANDARD CHARTERED Mutual fund? a) Yes b) No 12) If yes , why have you invested in STANDARD CHARTERED mutual fund? a) For better re turn b) For minimum risk c) For tax benefit d) For Capital appreciation 13) In w hich scheme you have invested? a) Equity scheme b) Debt scheme c) Balanced fund scheme d) Equity linked saving scheme SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND 14) What attracts you most in STANDARD CHARTERED Mutual fund? a) Sys tematic investment plan(SIP) b) Limited investment c) Proficiency d) Better fund allocation e) Diversification of Your fund 15) In which scheme of STANDARD CHAR TERED Mutual fund would you like to invest? a) Equity/growth fund Scheme b) Debt fund c) Children gilt fund Scheme d) Liquid fund scheme 16) In how many schemes of STANDARD CHARTERED Mutual fund would you like to invest? a) 1 b) 2 c) 3 d) I n all 17) Have you invested in any other mutual fund? a) Yes b) No 18) If you ha ve invested in mutual fund, then in which mutual fund you have invested? a) Prud ential ICICI mutual fund b) Reliance mutual fund c) Birla sun life mutual fund d ) STANDARD CHARTERED Mutual fund e) SBI mutual fund f) Others SRM UNIVERSITY [SCHOOL OF MANAGEMENT]

MUTUAL FUND 19) Would you like to suggest others to invest in STANDARD CHARTERED mutual fund? a) Yes b) No 20) If yes, then, for which benefit you suggest other to select the STANDARD CHARTERED mutual fund? a) Good return b) Tax benefit c) Future benefit d) Capital appreciation THANK YOU!!!! SRM UNIVERSITY [SCHOOL OF MANAGEMENT]