INTRODUCTION

COMPANY PROFILE

UNIT TRUST OF INDIA MUTUAL FUND

Vision
To be the most preferred Mutual Fund.

Mission
To offer customer-oriented, innovative products by leveraging technology to provide superior returns, achieve the highest service standards and attain sustained growth levels through principled human resources striving in a focused, transparent ethical manner to exceed investor expectations.

Overview
UTI Mutual Fund has come into existence with effect from 1st February 2003. UTI Asset Management Company presently manages 42 NAV based domestic SEBI compliant schemes UTI Mutual Fund has a track record of managing a variety of schemes catering to the needs of every class of citizenry over a period of 39 years. It has a nationwide network consisting 54 branch offices, 3 UTI Financial Centers (UFCs) and representative offices in Dubai and London. With a view to reach to common investors at district level, 18 satellite offices have also been opened in select towns and districts. It has 2400 committed employees and over 10,000 active agents and 266 chief representatives to sell and service its schemes. It has a wellqualified, professional fund management team, who has been highly empowered to manage funds with greater efficiency and accountability in the sole interest of unit holders. The fund managers are also ably supported with a strong in-house equity research department. To ensure better management of funds, a risk management department is also in operation It has reset and upgraded transparency standards for the mutual funds industry. All the branches, UFCs and registrar offices are connected on a robust IT network to ensure cost-effective quick and efficient service. All these have evolved UTI Mutual Fund to position as a dynamic, responsive, restructured, efficient, and transparent and SEBI compliant entity. UTI Mutual Fund has recently opened out yet another investor friendly vista for its investors on the Internet i.e. MyUTI whereby an investor can transact through the Internet. With this the
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investors need not visit UTI offices, or write letters for non monetary changes, not involving any document submission for transactions viz. change of address, bank particulars mandate (mode of payment), update income tax details and view, download and print the latest statement of account (SoA). As on January 31, 2003, almost all schemes/funds have outperformed the respective benchmark indices over various periods. These schemes have distributed income/bonuses consistently. Over and above the faith reposed by the investor community on UTI has also been reflected by fresh sales mobilisation over Rs.5,200 crores in the last 7 months, commencing 1st July 2002. US 95 has been awarded with CNBC Mutual Fund Award for the year for the best performance in the open-end balance fund category under the three year segment. UTI Mutual Fund is poised to meet the challenges of the future with its dedicated human resources, vast reservoir of funds and 38 year track record. Speed, Quality and Transparency is the edifice on which it desires to stride ahead for the benefit of its investors.

Sponsors
1. State Bank of India 2. Punjab National Bank 3. Bank of Baroda 4. Life Insurance Corporation of India

Product Variety/Range
Apart from equity, debt and balanced schemes, UTI also manages schemes aimed at meeting specific needs like: * Low cost insurance cover (ULIP). Monthly income needs of retired persons and women. * Income and liquidity needs of religious and charitable institutions and trusts.

* Building up funds to meet cost of higher education and career plans for children.
* Future wealth and income needs of girl child and women. * Building savings to cover medical insurance at old age. * Wealth accumulation to meet income needs after retirement.

Reaching Investors
Individual household investors account for 99% of UTI's investor accounts and about 65% of unit capital of UTI schemes. Products are distributed through a marketing force of about 67,000 commission-based canvassing agents trained to explain the products and provide related service support to investors. Today, these agents are supervised by 266 Chief Representatives who guide the investors, organize, train and motivate the agents in their respective areas of operation(specifieddistricts). Investors under various schemes of UTI are now serviced through 54 UTI branches, 183 collection centers and offices of 4 Registrar and Transfer Agencies appointed by UTI. Besides there are 57 franchises offices, which accept applications and distribute certificates to unit holders. UTI has set up its own associate company, UTI-Investor Services Limited (UTI-ISL), UTI is also currently implementing a technology upgradation program, involving networking of on-line computer systems at UTI's offices, and offices of Registrars and Transfer Agencies. This would enable UTI to improve service quality significantly.

UTI inaugurated its first Touch Screen Kiosk on 29th October 2001. In the first phase, static information such as NAV, sale, repurchase prices of the schemes, product details, objective of the scheme and portfolios are available on the Touch Screen Kiosk at UTIs Lotus Court UFC. In the second phase, online investor query for various details on the investment made with UTI, interfacing with investor databases on various schemes using the existing browser based query system or generic system etc., will be introduced. In the third and final phase, integration would be started on completion of the data migration of all the schemes into the Generic System Database. It would enable the investing public to do online financial transactions such as Sale, Transfer, Repurchase, etc. of units using personalized Smart Cards / Debit Cards / Credit Cards on various UTI schemes.

UTI publishes weekly / daily NAVs for all its listed schemes and offers a prospectus for every scheme. It also publishes half yearly results for all schemes and releases information on portfolio as also largest shareholding for growth schemes and Unit Scheme 1964. UTI adheres

to disclosure requirements specified by SEBI. As on June 30, 2001 out of 74 domestic schemes, 68 are fully compliant with SEBI guidelines.

A Conglomerate with a vision

As a distinctive financial institution, UTI manages funds raised through common investible vehicles and at the same time provides companies financial services, including underwriting. To create a diversified financial conglomerate and to meet investors varying needs under a common umbrella, UTI has set up a number of associate companies in the field of banking, securities trading, investor servicing, investment advice and training.

* UTI Bank Ltd (1994)--the first private sector bank to be set up under RBI guidelines. * UTI Securities Exchange Ltd (1994)--the first institutionally sponsored corporate stockbroking firm.

* UTI Investor Services Ltd (1993)--the first institutionally sponsored Registrar and Transfer agency. * UTI Institute of Capital Markets (1989)--the first such institute in Asia, excluding Japan. * UTI Investment Advisory Services Ltd (1988)--the first Indian Investment Advisor registered with SEC, US.

Global links UTI pioneered the off-shore fund investment in Indian securities. The India Fund, launched in 1986 as a closed-end fund, became a multi-class open-ended fund in 1994. Thereafter, in 1988, UTI floated the India Growth Fund which is listed on the New York Stock Exchange. Both India Fund and India Growth Fund have increased their corpus through rights issues. Besides the Columbus India Fund, launched in 1994, UTI launched the India Access Fund, an Indian UTI International Limited is a 100% subsidiary of Unit Trust of India, registered in the island of Guernsey. This company was set up with the primary objective of administration and marketing of various offshore funds managed by UTI as also to act as the management company for these

funds as required by the Guernsey Law. UTI International Ltd has an office in London to market UTI's offshore funds to institutional clients in UK, Europe and USA. It is also responsible for developing new products as well as new business opportunities of UTI. This office also looks after ongoing investor relations with foreign investors and has succeeded in greatly improving communication between UTI and its clients and distributors abroad. UTI International Ltd has played an important role in launching three new offshore funds of UTI the India IT Fund Ltd, To cater to various needs of NRI investors based in the Gulf region, UTI has a branch office at Dubai. The branch office covers all the six GCC countries viz. UAE, Oman, Kuwait, Saudi Arabia, Qatar and Bahrain. The Dubai office of UTI Acts as a liaison office between our NRI investors in the Gulf and UTI offices all over India. Besides providing information on current and new schemes of UTI, it also co-ordinates with UTI offices in India for all after-sale requests of unitholders/agents.

In the recent past, UTI has extended its support to the development of Unit Trusts in other developing countries, like Sri Lanka and Egypt. Besides providing technical advise, UTI also participated in the equity capital of the Unit Trust Management Company of Sri Lanka.

Research strength

UTI has its own research set-up to deal with different areas. The areas of research analysis cover macro-economy, capital markets, financial sector and mutual funds. Industry and corporate performance are also covered by Equity Research. UTI Institute of Capital Markets conducts training programmes for the financial community and helps to develop modern and scientific approach towards investment management. It also serves as a forum to discuss ideas and issues relevant to the capital market besides publishing

research papers relating to capital market.

LIC MUTUAL FUND The Trustees of the LIC Mutual Fund have exclusive ownership of Trust Fund and are vested with general power of superintendence, discretion and management of the affairs of the Trust. Jeevan Bima Sahayog Asset Management Company Ltd. was formed on 20th April 1994 in compliance with the Securities and Exchange Board of India (Mutual Funds) Regulations, 1993. The Company commenced business on 29th April 1994. The Trustees of LIC Mutual Fund have appointed Jeevan Bima Sahayog Asset Management Company Ltd as the Investment Managers for LIC Mutual Fund. The Trustees are responsible for appointing a Custodian. The Trustees should also ensure that the activities of the Trust and the Asset Management Company are in accordance with the Trust Deedand the SEBI Mutual Fund Regulations as amended from time to time. The investors under the schemes can obtain a copy of the Trust Deed, the text of the concerned Scheme as also a copy of the Annual Report, on a written request made to the Jeevan Bima Sahayog Asset Management Company Limited at a nominal price of Rs. 10/-. The data of the investors like their names, certificate and folio numbers, addresses etc., are stored in electronic form by our registrars duly appointed by us. We offer a variety of after sales services. All kinds of services are basically handled by our registrars and accordingly the investors have to write to the registrars in the first instance. We handle services at our Area Centers also, but that activity is restricted to LIC Bond Fund and Government Securities Fund, the open ended funds.

It is very essential to quote the Certificate Number , Folio Number and Scheme Name as they appear in the certificate in case of any complaint / correspondence.

For all payments like premature encashment / redemption , a proper discharge either at the back of the unit certificate or through a separate discharge form if blank discharge form is not provided at the back of the certificate duly signed by all the holders and witnessed shall be given. Submission of the unit certificate or in lieu of that a original valid proof of holding at the specified offices is a must for settlement of such payments.

In case of repurchases , the unused warrants including the warrant pertaining to the month in which the repurchase is preferred shall be sent along with the duly discharged certificate.

The performance of our registrars is closely and regularly monitored by a team of officials of the Corporate Office.

The investors may register their complaints with the Corporate Office , in respect of any of the listed after sales service items herein , if they do not get the required service within reasonable time from the respective registrars.

After sales service

CHANGE OF ADDRESS CORRECTION/CHANGE OF NAME IN THE CERTIFICATE NON-RECEIPT OF CERTIFICATE NON-RECEIPT OF DIVIDEND/REDEMPTION/REPUTCHASE/REFUND WARRANTS. REDEMPTION REPURCHASE STATEMENT OF ACCOUNTS REVALIDATION / CORRECTION OF WARRANTS CHANGE OF NOMINEE SPLIT OF UNIT CERTIFICATES

 REGISTRATION/CANCELLATION OF LIEN DEATH CLAIMS LOSS OF UNIT CERTIFICATES LOSS OF WARRANTS

BANK MANDATE TRANSFER OF HOLDING

ICICI MUTUAL FUND

Prudential ICICI Asset Management Company, (55%:45%) a joint venture between Prudential Plc, UK's leading insurance company and ICICI Bank Ltd, India's premier financial institution. The joint venture was formed with the key objective of providing the Indian investor mutual fund products to suit a variety of investment needs. The AMC has already launched a range of products to suit different risk and maturity profiles. Prudential ICICI Asset Management Company Limited has a networth of about Rs. 69.89 crore (1 crore = 10 million) as of March 31, 2002. Both Prudential and ICICI Bank Ltd have a strategic long-term commitment to the rapidly expanding financial services sector in India.

Prudential ICICI Mutual Fund launches SPIcE Prudential ICICI today introduced SPIcE, the countrys first Exchange Traded Fund (ETF) to track the BSE-SENSEX.
January 2, 2003, Mumbai: SPIcE is a hybrid product having features of both an openended mutual fund such as diversification, lower transaction costs as well as those of an exchange-listed security like intra day trading, listing at the BSE/DSE. SPIcE can be bought and sold like any equity share on the BSE terminal through a stockbroker. The minimum lot size is one unit of SPIcE, effectively; a retail investor can buy one SPIcE unit and hold the same in his Demat account just like any other security. The price of one SPIcE unit will be equal to 1/100th of SENSEX value. For example, if the current SENSEX is at 3100, the price of one SPIcE unit will be Rs. 31. The scheme will be managed by Prudential ICICI and listed on both the BSE and DSE. Key Advantages of SPIcE

Instant exposure to a well-diversified portfolio of 30 quality stocks forming part of SENSEX

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Buying and selling of SPIcE units on a real-time basis just like any other equity share

Since once SPIcE unit is equal to 1/100th of SENSEX, the minimum investment for a retail investor is as low as Rs. 31 (3100/100)

The price of each unit of SPIcE would move in tandem with the SENSEX making the whole process extremely transparent

No sales load, normal brokerage commissions and low management and sponsor fees apply

Key Applications of SPIcE

Equitizing cash Cash flow management Diversifying Sector Exposure Shorting or Hedging Index Exposure Arbitrage between SPIcE and basket trading and between SPIcE and Index Futures

An important feature of SPIcE like most Exchange Traded Funds is the creation and redemption process. While the majority of the investors will trade SPIcE units through their stockbrokers on the stock exchange, Authorized Participants (i.e. brokers, institutions, etc.) will be eligible to create or redeem SPIcE units directly with the Fund by exchanging a basket of SENSEX securities. Such a process helps in maintaining parity between the traded price of a SPIcE unit and its NAV. Globally, there are above 250 ETFs listed and traded across the world with assets under management of above US$ 100 billion. In the US, the major ETFs include SPDRs (linked to S&P 500 Index), QQQs (linked to Nasdaq-100 Index and Diamonds (linked to DJIA). More than 60% of the trading volume on American Exchanges is in ETFs. Prudential ICICI Asset Management Company (PIAMC) is investment manager to the largest private sector mutual fund in the country, the Prudential ICICI Mutual Fund.

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PIAMC enjoys the strong parentage of ICICI Bank Ltd., a well-known and trusted name in financial services in India and Prudential PLC, one of UKs largest players in the Insurance and fund management business. PIAMC has 26 centers all over the country to service investors and enjoys the trust of over 5.5 Lakh investors. Its diverse product portfolio comprises of debt, equity & balanced funds.

Prudential ICICI Asset Management has become India's first Private Sector Mutual Fund to cross the milestone of managing over Rs. 10,000 Crore of Assets. As on the 30th of November 2002 Prudential ICICI manages assets worth Rs.10258.80 Crore and enjoys the trust of over 5,50,000 investors. December 12, 2002, Mumbai: Ever since inception, Prudential ICICI has focused on listening to the customer and has believed in establishing and maintaining a long-term relationship with its customers. Prudential ICICI has invested time and effort to understand customer's investment needs, and this understanding of the customer has helped it in tailoring products and services to suit his needs. Prudential ICICI's investment philosophy of rigorous analysis coupled with strict control measures has also ensured consistent product performance over the years. Along with the debt funds, PruICICI equity funds like Power and Growth Plan have performed very well over the last one-year. Mr. Dileep Madgavkar, Chief Investment Officer says, "The performance of the PruICICI equity funds is an endorsement of Prudential ICICI's bottom up and rigorous process driven approach to managing funds. Investment decisions are taken by the investment committee, which takes decisions based on detailed equity research and regular meetings with a company's management". On the debt side, PruICICI has a separate Credit Rating Analyst, who monitor's the quality of the assets over and above the ratings given by credit rating agencies. Mr. Shailendra Bhandari, Managing Director of Prudential ICICI AMC says, "From the very beginning we made the customer the center of all our efforts. We set up 26 customer service centers across the country and launched a range of products suited to the investors needs. Our vision is to provide the highest levels of customer delight among financial

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service providers in the country." Prudential ICICI's customer centric approach begins with educating and training its agents and distributors to understand customer requirements and counsel them accordingly. Over the years, PruICICI has provided innovative services like PruICICI InstaCall (a 24 hour call center enabling investors across India to update their account information, sell and switch between their investments in various schemes), PruICICI InstaCheque (over the counter redemptions) and www.pruicici.com (a transaction enabled website with customized financial planning tools), designed to increase customer convenience and further empower the customer. Prudential ICICI has established a multi-channel approach to the distribution of its various products and has today an extensive network of customer service centers in 26 cities and over 12,000 customer contact points, comprising partner banks, financial distribution houses and financial advisers. Says Pankaj Razdan, Senior Vice President - Sales, Distribution and Marketing, "Our extensive distribution network and the strength of our relationships have given us a leading edge in India's upcoming MF industry. A major part of the credit for our success goes to our channel partners." Prudential ICICI has always been at the forefront of initiatives to educate the Indian customer about Mutual Funds. PruICICI has invested in communication designed to answer the customers queries about Mutual Funds, and has done this throughout the ups and downs of the economy and the markets. Beginning June 2002, Prudential ICICI undertook customer education using, among other media, Television, with the aim of reaching ever-larger sections of customers. Prudential ICICI is today a brand to be reckoned with in the Indian financial sector, and its advertising in the past has won numerous accolades and mentions, such as the 2001 ABBY Award for Best Internet Advertising. Using various media effectively has been the hallmark of PruICICI advertising campaigns. However it does not just advertise, it actively

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listens and seeks customer feedback. PruICICI has institutionalized real time Brand Awareness monitors and has undertaken Usage & Attitude studies on investment options. These measures have enabled PruICICI to receive and implement customer feedback proactively.

Prudential ICICI Asset Management Company (PIAMC) is investment manager to the largest private sector mutual fund in the country, the Prudential ICICI Mutual Fund. PIAMC enjoys the strong parentage of ICICI Bank Ltd., a well-known and trusted name in financial services in India and Prudential PLC, one of UK's largest players in the Insurance and fund management business. PIAMC has 26 centers all over the country to service investors and enjoys the trust of over 5.5 Lakh investors. Its diverse product portfolio comprises of debt, equity & balanced funds. Life Insurance Corporation of India set up LIC Mutual Fund on 19th June 1989 and contributed Rs. 2 Crores towards the corpus of the Fund. LIC Mutual Fund was constituted as a Trust in accordance with the provisions of the Indian Trust Act, 1882. The settlor is not responsible for the management of the Trust. The settlor is also not responsible or liable for any loss or shortfall resulting in any of the schemes of LIC Mutual Fund.

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ESCORTS MUTUAL FUND

PRODUCTS

ESCORTS INCOME PLAN

Open Ended Income Fund available for investment at NAV every business day throughout the year. Exit Load of. 50%Date of Commencement: 18th May, 1998 Fund Manager: K.K. Mital, B.Com (Hons), FCA with 20 years' experiences.

Investment Options:
Growth Option for Capital Appreciation. Dividend Option for Regular Income Monthly Dividend payable from November, 1999 (Record Date: 21st of every month).Minimum Investment: Rs. 1,000/-Also Available: Systematic Investment Plan (SIP), Systematic Withdrawal Plan (SWP), Dividend Re-Investment Plan (DRIP) and Salary Savings Plan (SSP).

LIQUIDITY
Full or partial withdrawal at NAV possible on every business day throughout the year. No TDS on redemption. An Exit Load of 0.50%

SECURITY
Diversified Portfolio of Corporate Debentures/ Bonds and Money Market Instruments. Portfolio consists mainly of eligible investments for Provident Fund and Superannuation Trusts. Valuation: As per CRISIL Bond Valuer.

TAX BENEFITS
for Resident Investors (under Income -tax Act, 1961)Dividend Income (under Dividend Option) is tax free under section 10(33). Long Term Capital Gains (under both Options) enjoy indexation benefit and lower tax rate under sections 48 and 112. Investments in units by

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religious & charitable trusts is an eligible investment under section 11(5) of the Act., read with rule 17C of the Act.

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ESCORTS TAX PLAN

NATURE OF THE SCHEME An Open-Ended Equity Linked Saving Scheme for investment at NAV on every business day. LOAD No Entry/Exit Load. DATE OF COMMENCEMENT 1st April, 2001 INVESTMENT OPTIONS Growth Option for Capital Appreciation. Dividend Option for Regular Income. Minimum Investment: Rs. 1,000/Also Available: Systematic Investment Plan (SIP), Systematic Withdrawal Plan (SWP), Dividend Re-Investment Plan (DRIP) and Salary Savings Plan (SSP).

TAX BENEFITS Tax free dividend Investment in Units by religious and charitable trusts is an eligible investment under section 11(5) of the Income-Tax Act 1961 read with rule 17C of the Act. Investments in Units under the scheme are exempt from wealth-tax.

ESCORTS GROWTH PLAN

NATURE OF THE SCHEME: Open-Ended Growth Scheme available for investment at NAV on every business day. Load: Entry Load 1.50%. Exit Load Nil Date of Commencement:21st March, 2001

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Investment Objective: An Avenue to invest predominantly in a well diversified portfolio of Equity Shares with growth potential. The primary objective is to generate capital appreciation and at the same time providing continuing liquidity. Asset Allocation: Equity and related instruments: 80-100% Fixed Income Securities and money market instruments Investment Options: Growth Option for Capital Appreciation. Dividend Option for Regular Income. Minimum Investment: Rs. 5,000/- and in the multiples of Rs. 1,000/Also Available: Systematic Investment Plan (SIP), Systematic Withdrawal Plan (SWP), Dividend Re-Investment Plan (DRIP) and Salary Saving Plan (SSP) Liquidity: Full or partial withdrawal possible at NAV on every business day. No TDS on redemption.

ESCORTS GILT PLAN

NATURE OF THE SCHEME: Open-Ended Growth Scheme available for investment at NAV on every business day. Load: No entry or exit Load Date of Commencement:21st March, 2001 Investment Objective: A scheme that provides investors with an avenue to invest in government securities, with zero risk. The primary objective is to generate capital appreciation while at the same time providing continuing liquidity. Asset Allocation: Government Securities: 80-100% Money Market Instruments: 0-20% Investment Options: Growth Option for Capital Appreciation. Dividend Option for Regular Income.

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Minimum Investment: Rs. 5,000/- and in the multiples of Rs. 1,000/Also Available: Systematic Investment Plan (SIP), Systematic Withdrawal Plan (SWP), Dividend Re-Investment Plan (DRIP) and Salary Saving Plan (SSP) Liquidity: Full or partial withdrawal possible at NAV on every business day. No TDS on redemption.

ESCORTS BALANCED FUND

NATURE OF THE SCHEME: Open-Ended Growth Scheme available for investment at NAV on every business day. Load: Entry Load 1.25%. Exit Load - NIL. Date of Commencement:21st March, 2001 Investment Objective: An avenue to invest in a diversified portfolio of good quality equity and debt instruments. The primary objective is to generate long term capital appreciation and current income while providing continuing liquidity along with high and commensurate safety. Asset Allocation: Equity and equity related instruments: 60% Debt Instruments and Govt. Bonds etc.: 40% Investment Options: Growth Option for Capital Appreciation. Dividend Option for Regular Income. Minimum Investment: Rs. 1,000/- and in multiples thereof Also Available: Systematic Investment Plan (SIP), Systematic Withdrawal Plan (SWP), Dividend Re-Investment Plan (DRIP) and Salary Saving Plan (SSP) Liquidity: Full or partial withdrawal possible at NAV on every business day. No TDS on redemption.

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INTRODUCTION
PRODUCT PROFILE

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PRODUCT PROFILE
MUTUAL FUND - A GLOBALLY PROVEN INVESTMENT Worldwide, the Mutual Fund, or Unit Trust as it is called in some parts of the world, has a long and successful history. The popularity of the Mutual Fund has increased manifold. In developed financial markets, like the United States, Mutual Funds have almost overtaken bank deposits and total assets of insurance funds. In India, the Mutual Fund industry started with the setting up of Unit Trust of India in 1964. Public sector banks and financial institutions began to establish Mutual Funds in 1987. The private sector and foreign institutions were allowed to set up Mutual Funds in 1993. This fast growing industry is regulated by the Securities and Exchange Board of India (SEBI).

WHAT IS A MUTUAL FUND?

A Mutual Fund is a trust that pools the savings of a number of investors who share in common financial goal. Anybody with an investible surplus of as little as a few thousand rupees can invest in Mutual Funds. These investors buy units of a particular Mutual Fund scheme that has a defined investment objective and strategy. The money thus collected is then invested by the fund manager in different types of securities. These could range from shares to debentures to money market instruments, depending upon the scheme's stated objectives. The income earned through these investments and the capital appreciation realized by the schemes are shared by its unit holders in proportion to the number of units owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively lower cost.

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TYPES OF MUTUAL FUND SCHEMES

There are a wide variety of Mutual Fund Schemes that cater to your needs, whatever to your age, financial position, risk tolerance and return expectations. Whether as the foundation of your investment programme or as a supplement, Mutual Fund schemes can help you meet your financial goals. (A)By Structure Open-Ended Schemes These do not have a fixed maturity. You deal directly with the Mutual Fund for your investments and redemptions. The key feature is liquidity. You can conveniently buy and sell your units at net asset value ("NAV") related prices. Close-Ended Schemes Schemes that have a stipulated maturity period (ranging from 2 to 15 years) are called closeended schemes. You can invest directly in the scheme at the time of the initial issue and thereafter you can buy or sell the units of the scheme on the stock exchanges where they are listed. The market price at the stock exchange could vary from the scheme's NAV on account of demand and supply situation, unit holders expectations and other market factors. One of the characteristics of the close-ended scheme is that they are generally traded at a discount to NAV; but closer to maturity, the discount narrows. Some close-ended schemes give you an additional option of selling your units directly to the Mutual Fund through periodic repurchase at NAV related prices. SEBI regulations ensure that at least one of the two exit routes is provided to the investor. Interval Schemes These combine the features of open-ended and close-ended schemes. They may be traded on the stock exchange or may be open for sale or redemption during pre-determined intervals at NAV related prices.

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(B)By Investment Objective Tax Saving Schemes These schemes offer tax rebates to the investors under tax laws as prescribed from time to time. This is made possible because the Government offers tax incentives for investment in specific avenues. For example, Equity Linked Saving Schemes (ELSS) and Pension Schemes. Recent amendments to the Income Tax Act provide further opportunities to investors to save capital gains by investing in Mutual Funds. The detail of such tax savings are provided in the relevant offer documents. Ideal for: Investors seeking tax rebates.

Special Schemes This category includes index schemed that attempt to replicate the performance of a particular index such as the BSE Sensex or the NSE 50, or the industry specific schemes(which invest in specific industries) or sectorel schemes(which invest exclusively in segments such as 'A' Group shares or initial public offerings). Index fund schemes are ideal for investors who are satisfied with a return approximately equal to that of an index. Sectoral fund schemes are ideal for investors who have already decided to invest in a particular sector or segment. Keep in mind that anyone scheme may not meet all your requirements for all time. You need to place your money judiciously in different schemes to be able to get the combination of growth, income and stability that is right for you. Remember, as always, higher the return you seek, higher the risk you should be prepared to take.

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WHY SHOULD YOU INVEST IN MUTUAL FUNDS?

The advantages of investing in Mutual Fund are:

1. Professional Management. You avail of the services of experienced and skilled professionals who are backed by a dedicated investment research team which analyses the performance and prospects of companies and selects the suitable investments to achieve the objective of the scheme. 2. Diversification. Mutual Funds invest in a number of companies across a broad crosssection of industries and sectors. This diversification reduces the risk because seldom do all stocks decline in the same time and in same proportion. You achieve this diversification through a Mutual Fund with far less money than you can do on your own. 3. Convenient Administration. Investing in a Mutual Fund reduces paper work and helps you avoid many problems such as bad deliveries, delayed payments and unnecessary follow up with brokers and companies. Mutual Fund saves your time and makes investing easy and convenient. 4. Return Potential. Over a medium to long term, Mutual Funds have the potential to provide a higher return as they invest in a diversified basket of selected securities. 5. Low Costs. Mutual Funds are a relatively less expensive way to invest compared to directly investing in the capital markets because the benefits of scale in brokerage, custodial and other fees translate into lower costs for investors. 6. Liquidity. In open-ended schemes, you can get your money back promptly at net asset value related prices from the Mutual Fund itself. With close-ended schemes, you can sell your units on a stock exchange at a prevailing market price or avail of the facility of direct repurchase at NAV related prices which some close-ended and interval schemes offer you periodically. 7. Transparency. You get regular information on the value of your investment in addition to disclosure on the specific investments made by your scheme, the proportion invested in each class of assets and the fund manager's investment strategy and outlook.

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8. Flexibility. Through features such as regular investment plans, regular withdrawal plans and dividend reinvestment plans, you can systematically invest or withdraw funds according to your needs and convenience. 9. Choice of Schemes. Mutual Funds offer a family of schemes to suit your varying needs over a lifetime. 10. Well Regulated. All Mutual Funds are registered with SEBI and they function within the provisions of strict regulations designed to protect the interests of investors. The operations of Mutual Funds are regularly monitored by SEBI.

UNDERSTANDING AND MANAGING RISK

All investments whether in shares, debentures or deposits involve risk: share value may go down depending upon the performance of the company, the industry, state of capital markets and the economy; generally, however, longer the term, lesser the risk; companies may default in payment of interest/principal on their debentures /bonds/deposits; the rate of interest on an investment may fall short of the rate of inflation reducing the purchasing power. While risk cannot be eliminated, skillful management can minimise risk. Mutual Funds help to reduce risk through diversification and professional management. The experience and expertise of Mutual Fund managers in selecting fundamentally sound securities and timing their purchases and sales, help them to build a diversified portfolio that minimise risk and maximises returns.

HOW TO INVEST IN MUTUAL FUNDS? Step One - Identify your investment needs.
Your financial goals will vary, based on your age, lifestyle, financial independence, family commitments, level of income and expenses among many other factors. Therefore, the first step is to assess your needs. Begin by asking yourself these questions: 1. What are my investment objectives and needs?

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Probable Answers: I need regular income or need to buy a home or finance a wedding or educate my children or a combination of all these needs. 2. How much risk I am willing to take? Probable Answers: I can only take a minimum amount of risk or I am willing to accept the fact that my investment value may fluctuate or that there may be a short-term loss in order to achieve a long-term potential gain. 3. What are my cash flow requirements? Probable Answers: I need a regular cash flow or I need a lumpsum amount to meet a specific need after a certain period or I don't require a current cash flow but I want to build my assets for the future. By going through such an exercise, you will know what you want out of your investment and can set the foundation for a sound Mutual Fund investment strategy.

Step Two - Choose the right Mutual Fund.

Once you have a clear strategy in mind, you have to choose which Mutual Fund and scheme you want to invest in. The offer document of the scheme tells you its objectives and provides supplementary details like the track record of other schemes managed by the same Fund Manager. Some factors to evaluate before choosing a particular Mutual Fund are: The track record of performance over the last few years in relation to the appropriate yardstick and similar funds in the same category. How well the Mutual Fund is organised to provide efficient, prompt and personalised service. Degree of transparency as reflected in frequency and quality of their communications.

Step Three - Select the ideal mix of Schemes.

Investing in just one Mutual Fund scheme may not meet all your investment needs. You may consider investing in a combination of schemes to achieve your specific goals. The following tables could prove useful in selecting a combination of schemes that satisfy your needs.

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AGGRESSIVE PLAN AGGRESSIVE PLAN

Money Market Schemes Income Schemes Balanced Schemes Growth Schemes MODERATE PLAN Money Market Schemes Income Schemes Balanced Schemes Growth Schemes CONSERVATIVE PLAN Money Market Schemes Income Schemes Balanced Schemes Growth Schemes 10 % 50-60 % 20-30 % 10 % 10 % 20 % 40-50 % 30-40 % 5% 10-15% 10-20 % 60-70 %

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Step Four - Invest regularly

For most of us, the approach that works best is to invest a fixed amount at specific intervals, say every month. By investing a fixed sum every month, you buy fewer units when the price is higher and more units when the price is low, thus bringing down your average cost per unit. This is called rupee cost averaging and is a disciplined investment strategy followed by investors all over the world. With many open-ended schemes offering systematic investment plans, this regular investing habit is made easy for you.

Step Five - Keep your taxes in mind

If you are in a high tax bracket and have utilised fully the exemptions under section 80L of the Income Tax Act, investing in growth funds that do not pay dividends might be more tax efficient and improve your post-tax return. If you are in a low tax bracket and have not utilised fully the exemptions available under Section 80L of the Income Tax Act, selecting funds paying regular income could be more tax efficient. Further, there are other benefits available for investment in Mutual Funds under the provisions of the prevailing tax laws. You may therefore, consult your tax advisor or Chartered Accountant for specific advice.

Step Six - Start early

It is desirable to start investing early and stick to a regular investment plan. If you start now, you will make more than if you wait and invest later. The power of compounding lets you earn income on income and your money multiplies at the compounded rate of return.

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Step Seven - The final step

All you need to do now is to get a touch with a Mutual Fund or your agent/broker and start investing. Reap the rewards in the years to come. Mutual Funds are suitable for every kind of investor - whether starting a career or retiring, conservative or risk-taking, growth-oriented or income seeking.

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AN INTRODUCTION OF NATIONAL SECURITY DEPOSITORY LIMITED

Basic Services of NSDL

Under the provisions of the Depositories Act, NSDL provides various services to investors and other participants in the capital market like, clearing members, stock exchanges, banks and issuers of securities. These include basic facilities like account maintenance, dematerialization, rematerialization, settlement of trades through market transfers, off market transfers & interdepository transfers, distribution of non-cash corporate actions and nomination/ transmission.

The depository system, which links the issuers, depository participants (DPs), NSDL and clearing corporation/ clearing house of stock exchanges, facilitates holding of securities in dematerialized form and effects transfers by means of account transfers. This system which facilitates scripless trading offers various direct and indirect benefits to the market participants.

Special Services
Depository is a facility for holding securities, which enables securities transactions to be processed by book entry. In addition to the core services of electronic custody and trade settlement services, NSDL provides special services like pledge, hypothecation of securities, automatic delivery of securities to clearing corporations, distribution of cash and non-cash corporate benefits, stock lending, distribution of securities to allottees in case of public issues, Internet based services for clearing members 'SPEED' & Internet based services for account holders 'SPEED-e'. NSDL has taken the initiative for providing the facility of enabling brokers to deliver contract notes to custodian / fund managers electronically through its STEADY facility. STEADY (Securities Trading - information Easy Access and DeliverY) was launched by NSDL on

30

November 30, 2002. STEADY is a means of transmitting digitally signed trade information with encryption across market participants electronically and efficiently, through Internet.

Joining NSDL
NSDL carries out its activities through service providers like Depository Participants (DPs), Issuing companies and their Registrars and Share Transfer Agents, Clearing corporations/ Clearing Houses of Stock Exchanges. These entities are called business partners in NSDL terminology. These entities need to get integrated into NSDL depository system to be able to provide The investor can obtain depository services through a depository participant of NSDL. Just as one opens a bank account in order to avail of the services of a bank, an investor opens a depository account with a depository participant in order to avail of depository facilities.

A clearing member can open a special account in the depository system for the purpose of settling trades done on stock exchanges. The clearing account enables the clearing member to receive securities from its clients for delivery to the Clearing House/Clearing Corporation as pay-in, and to distribute the pay-out to its clients received from the Clearing House/Clearing Corporation.

Issuer can make dematerialisation services available to their shareholders by signing an agreement to that effect with NSDL. After the agreement is entered into, an electronic link is established between NSDL, Issuer or its R & T Agent. The clearing corporations/houses of stock exchanges also have to be electronically linked to the depository in order to electronically receive securities delivered by clearing members towards pay-in and to give out securities to clearing members towards pay-out.

The Certification Program

NSDL recognizes that quantitative progress would be ineffective if it is not backed by quality depository Services. It is, therefore, necessary to ensure that the staff of our business partners are sensitized to service standards and efficient depository operations.

31

Towards this objective, NSDL has launched Certification Programme on depository. This programme helps the participant to understand and assimilate the procedures to be followed in conducting various transactions in the NSDL depository system. Further, candidates successfully clearing such a programme would also add to the human resources pool qualified in depository operations. NSDL has made it mandatory for all branches of DPs to have at least one person

NSDL has embarked upon a series of training programmes called Quality Improvement Programmes (QIP) which cover all the operational aspects of depository services.

Details of the Depository Certification Programme:

NSDL is using the National Stock Exchange's Certification in Financial Markets (NCFM) infrastructure for conducting the "NSDL-Depository Operations Module". Additional information or prospectus on the certification programme can also be obtained from:

Marketing Department, National Securities Depository Ltd., Trade World, Kamala Mills Compound, Senapati Bapat Marg, Lower Parel, Mumbai - 400013. Ph: 022-4980829/30

What is a depository?
A depository can be compared to a bank. A depository holds securities (like shares, debentures, bonds, Government Securities, units etc.) of investors in electronic form. Besides holding securities, a depository also provides services related to transactions in securities.

What do you mean by dematerialisation?

Dematerialisation is the process by which physical certificates of an investor are converted to an equivalent number of securities in electronic form and credited in the investor's account with its DP. In order to dematerialise certificates; an investor will have to first open an account with a DP and then request for the dematerialisation of certificates by filling up a dematerialisation request form [DRF], which is available with the DP and submitting the same along with the

32

physical certificates. The investor has to ensure that before the certificates are handed over to the DP for demat, they are defaced by marking "Surrendered for Dematerialisation" on the face of the certificates.

Can I dematerialise any share certificate?

You can dematerialise only those certificates that are already registered in your name and are in the list of securities admitted for dematerialisation at NSDL. All the scrips included in S&P, CNX, NIFTY and BSE SENSEX have already joined NSDL. This list has more than 4,300 companies and is steadily growing. You can get an updated list of these companies from your DP or from NSDL's office or from NSDL website at www.nsdl.co.in.

What precautions should I take before defacing a share certificate?

Before defacing the share certificate, you must ensure that it is available for dematerialisation. You must therefore check with your Depository Participant (DP) whether the ISIN (code number for the security in a depository system) has been activated and made available for dematerialisation by the depository. If yes, then you may deface the share certificate. The certificates are defaced by marking "Surrendered for Dematerialisation" on the face of the certificate.

How long does the dematerialisation process take?

Dematerialisation will normally take about 30 days.

33

RIGHTS AS A MUTUAL FUND UNITHOLDER

As a unit holder in Mutual Fund scheme coming under the SEBI (Mutual Funds) Regulation, ("Regulations") you are entitled to: 1. Recieve unit certificates or statements of accounts conforming your title within 6 weeks from the date of closure of the subscription or within 6 weeks from the date your request for a unit certificate is recieved by the Mutual Fund; 2. Recieve information about the investment policies, investment objectives, financial position and general affairs of the scheme; 3. Recieve dividend within 42 days of their declaration and recieve the redemption or repurchase proceeds within 10 days from the date of redemption or date of redemption; 4. Vote in accorance with the Regulations to: a. either approve or disapprove any change in the fundamental investment policies of the Scheme which are likely to modify the scheme or affect your interest in the Mutual Fund; (as a dissenting unit holder, you would have the right to redeem your investments); b. change the asset management company; c. wind up the schemes. 5. Inspect the documents of the Mutual Funds specified in the scheme's offer document. In addition to your rights, you can expect the following from Mutual Fund: To publish their NAV, in accordance with the regulations: daily, in case of open-ended schemes and periodically, in case of close-ended schemes; To disclose your schemes' portfolio holdings, expenses, policy on asset allocation, the Report of the Trustees of the operations of your schemes and their future outlook through periodic newsletters, half-yearly and annual accounts; To adhere to a Code of Ethics which require that investment decisions are taken in the best interests of the unit holders.

34

STATEMENT OF PROBLEM

Small sample size The sample size was only 75 respondents which a very small size to base a research and give conclusion about the whole sector. These respondents are not sufficient enough to base our conclusion for the group of investors.

Time bound research The research was conducted in a short span of time. The responses of the respondents may be affected by some particular situation prevailing at that particular time. If the time duration would have been long it would have gien the general idea or perception of the investors.

Might get biased response As discussed earlier that the sample size was small also considering that the interview were conducted in a short span of time, there is high probability that the respondents might have given biased responses.

35

SIGNIFICANCE OF PROBLEM

An alternative form of financing much hyped during a languish sellers mutual fund market is owner or seller financing or owner carryback. This means the owner participates in financing the buyers purchase of the property, either in whole or in part. However, if the deal if not properly structured, owner financing can cause significant problems for both the buyer and the seller under various circumstances. (Owner or seller financing typically becomes more prevalent when home sales slow down in a given geographical area and sellers of real property who are highly motivated to sell their property are more willing to take risks in its sale than they normally would

36

SCOPE OF RESEARCH
The study of mutual fund has the wider scope. Mutual fund is a professionally managed form of collective investment that pools money from many investors and invest it in stocks, bonds, short-term money market instruments and other securities. Mutual fund distributors of tax free municipal bonds income are also tax free to the share holders. Taxable distribution can be either ordinary income or capital schems which are equity schemes , debt and hybrid schems. The present study includes five-year return of the mutual fund companies and funds in India. Out of all mutual fund companies we have selected only two companies those are ING mutual fund and HDFC mutual fund, and only those schemes and funds are included in this study, which are performed well during from last few years.

37

OBJECTIVES OF RESEARCH
The major objectives of study are as follows. To evaluate investment performance of mutual funds in terms of risk and return. To examine the funds sensitivity to the market fluctuations in terms of beta. To find out the financial performance of mutual fund schemes. To appraise investment performance of mutual funds with risk adjustment, the theoretical parameters as suggested by Sharpe, Treynor and Jensen. To analyze the performance of various schemes of mutual funds. To identify the sector where the mutual fund and how invested. To provide valuable suggestions and recommendations.

38

STATEMENT OF HYPOTHESES
Hypothesis: (1) H1: The customers have interest in investing in real estate. H2: The customers do not have interest in investing in real estate. (2) H2: Whether there is a strong relationship between the confidence of extrapolation and target allocation of resources by customers or investors. H2: Whether there is a weak relationship between the confidence of extrapolation and target allocation of resources by customers or investors. (3) H1: Whether there is a strong relationship between the length of time taken by customer/investor about investing in mutual fundand comfort with extrapolating past returns. H3: Whether there is a weak relationship between the length of time taken by customer/investor about investing in mutual fundand comfort with extrapolating past returns. (4) H4: The developers are successful in solving the problems and providing necessary specifications to customers. H4: The developers are unsuccessful in solving the problems and do not provide necessary specifications to customers.

39

ASSUMPTION
1 -As we are aware that India is one of the fastest growing economy in the world and the mutual fundsector of India is one of the major contributor to the growth of the economy. It is the second largest sector for employment opportunities after agriculture sector. . 5 % of the countrys GDP is contributed by the housing sector. 2 - From the above study we can infer that the main reason for the success of the Mutual fundsector is the Growth of the economy as a whole. When the disposable income of the investors increases they invest more in the mutual fundsector as they find it a lucrative investment opportunity. Mutual fund market is a favored investment option due to various efforts that are being made by the government. 3- The final conclusion that I can give from the above study is that there is great scope of the mutual fundsector. It will grow in the near future and will be one of the major reason for the growth for the Indian economy. 4- Investors have high hopes from the mutual fund industry , even though they are aware about the delays in the projects due to recession, Still they are positive about the future prospect of the mutual fundindustry. 5- It has been assumed that sample of 100 respondents represents the whole

population. 6- The information given by the customer is unbiased

40

LIMITATIONS
As the samples are not random samples, there is less likelihood of their representing the characteristics of the population as a whole. Time and cost constraints dictated the size of the sample selected. A large sample would have been more representative of the population. Many of the institutions had their center for investment located outside Delhi and hence respondent from such institution had to admit that any information provided by them may be inaccurate or incomplete. Some of the telephonic interviews may not have led to accurate responses. Interviewer biasness could have been introduced during personal interviews. Sometimes the respondent was unwilling to reveal some data (eg-quantum of investment]. Many of respondents did not agree to personal and telephonic interviews because of lack of time. Null Hypothesis: The disposable income is the main factor that drives the

investment decision in mutual fund ector

Alternate Hypothesis: The disposable income is not the main factor for investment decision in mutual fund sector Null Hypothesis: Government Policies play a major role in Mutual fundinvestment Alternate Hypothesis: Government Policies does not effect the investment in mutual fund sector

41

LITRATURE REVIEW

42

LITRATURE REVIEW
A research should be preliminary orientation and background knowledge about the topic and he should collect the basic concept and information regarding the final in which the topic includes due to this reasons review of the literature has an important role in research study. Considering the importance of mutual funds, several academicians have tried to study the performance of various funds. Initially, their studies have focused on timing and investment abilities of fund managers. Later, several researchers have tried to study the various factors and their impact on fund performance. These factors include potential measurement errors from survivorship bias and misspecification of the benchmark, the impact of fund expenses and economies of scale, to the personal characteristics of fund managers. Various studies that focused on factors such as the ability of fund managers to consistently outperform the market and the fund specific organizational and managerial aspects, came out with contradictory conclusions. Jensons (1968) study on mutual fund performance of 115 funds over a period spanning from 1945 60 1964, confirmed the efficient market hypothesis. His analysis has shown that the performance of expense-adjusted fund returns was markedly lower than those randomly chosen portfolios of a similar risk category. These results were in sync with the findings of Treynor 91965) and Sharpe (1966). Performance of professionally managed funds also was not any better than the performance of risk-adjusted index portfolio, which also indicated that managers of these funds did not appear to possess private information. Thus, the results of the early studies prevailed as general conclusions in the erstwhile literature.

However, a number of later studies on the topic, nonetheless, go against the early findings. For instance, a study by Ippolity (1993) found mutual fund returns after expenses (before loads) to be superior than the returns offered by risk-adjusted market indices, which indicated that mutual fund managers may have access to the useful private information. Thus, the mutual fund managers may produce such excess returns that can offset the expenses of the fund. Further studies by Grinblatt and Titman (1992), Hendricks, Patel and Zeckhauser (1993), Goetzmann and Ibbotson (1994), and Volkman and Wohar (1995) were in support of market

43

efficiency as they discovered instances of repeated winners amongst fund managers. Recently, Wermers (2000) decomposed mutual fund returns into a stock picking talent; features of stockholding and trading costs and expenses. The decomposition helped him show that stock picking of funds, in fact, enabled the managers to cover their costs. Other studies by Elton, Gruber, Das and Hlavka (1993), Malkiel (1995) and Carhart (1997) reinforce the early conclusion of Jensen (1968). While doing away with survivorship bias, carhart (1997) has shown that the common factors that drive stock returns are responsible for consistency in mutual fund performance. On the other hand the Malkiel (1995) study considers both benchmark errors and survivorship bias and concludes that the previous results indicating market inefficiency were affected by these factors.

44

SWOT ANALYSIS

45

SWOT ANALYSIS

STRENGTHS
Original research Integrated technology platform Performance of previously introduced funds Pan India distribution

WEAKNESS After Sales Services Limited number of outlet

OPPORTUNITIES Changing demographic with higher disposable income and increasing complex financial instruments will drive the demand for investment advisory services Rapid penetration of internet and computer needs that technology enabled services will gain market share

THREATS Economic slowdown Stock market fall will have a cascading effect on mutual fund mobilization Increase or decrease in interest rates can effect debt or income mobilizations Future changes in personal taxation rules can impact insurance sales Increasing competition from large and particularly foreign players

46

DESIGN OF STUDY

47

INTRODUCTION
Research refers to a search for knowledge. The advanced learners dictionary of current english lays down the meaning of research as a careful investigation or enquiry specially through search for new facts in any branch of knowledge. Research methodology is a way to systematically solve the research problem. It may be understood as a science of studying how research is done scientifically. In it we study the various steps that are generally adopted by a research in studying his research problem along with the logic behind them. It is necessary for the researcher to know how to develop certain indices or tests, how to calculate the mean, the mode, the median or the standard deviation or chi-suare, how to apply particular research technique, but they also need to know which of these methods or techniques, are relevant and which are not, and what would they mean and indicate and why. Researchers also by which they can decide that certain techniques and procedures will be applicable to certain problems and other will not. All this means that it is necessary for the researcher to design his methodology. The research methodology has wider dimension and wider scope than that of research methods. Thus, when we talk of research methodology we not only talk of research methods but also consider the logic behind the methods we use in the context of our research methods but also consider the logic behind the methods we use in the context of our research study and explain why we are using a particular method or technique and why we are not using other so that research results are capable of being evaluated either by the researcher himself or by others.

48

SOURCE OF DATA PRIMARY DATA

The data which is used for the research is secondary data. The secondary data is the data which is duplicate of primary data. The data (published or unpublished) which have already been collected and processed by some agency or person and taken over from there and used by any other agency for their statistical work are termed as person and taken over from there and used by any other agency for their statistical work are termed as secondary data as far as second agency is concerned. The second agency if and when it publishes and files such data becomes the secondary source to anyone who later uses these data.
In other words secondary source is the agency who publishes for use by others the data which was not originally collected and processed by it.

PRIMARY DATA
The study is primary data based oriented through a questionnaire.

Sources of data:
Unpublished sources: i. The data can be governments or private offices can be collected from these are unpublished data. ii. The research work, the secret documents. Published sources: i. Central and state government publication publishes the various statistics like crop production, population, statistic, wages expenses. ii. The commerce association, commerce and trade association, Indian chamber of commerce federation are publishes several data. iii. iv. News paper, journals, periodicals etc. publishes the several data. Some private organization, research berceuse, universities publishes several datas.

Periodicals: ICFAI journals

49

Internet: google.com Value research online.com Nytimes.com AMFI.com

SAMPLING PROCEDURES
The sample size for the above study was a total of 200 from the whole NCR (Gurgaon, Noida, Greater Noida, Faridabad and Bhiwadi).The respondents of a sample are selected using Non probability procedures.Nonprobability sampling is arbitrary and subjective; when we choose subjectively. The target respondents were HNIs (High Network Individuals), upper segment of middle class, high level of middle class, High level executive workforce of corporations. Approximately 200 questionnaires were filled and ultimately 169 were completed with positive response that they have their interest in investing in real estate. As a preliminary for the business development of the company it was essential to find the investor perception about investing in real estate. For collecting the information a questionnaire was designed focusing on the main cities in NCR like Gurgaon, Faridabad, Noida, Greater Noida and Bhiwadi where the company is operating its projects. The respondents in our sample size are professionals from major public and private institutions which include managers, consultants, proprietors, business class etc.Approximately 200 questionnaires were filled and ultimately collected 169 with positive response that they have their interest in investing their funds in mutual fund industry

50

METHODS AND INSTRUMENT OF DATA GETHERIN

Methods of Data Collection
Primary Dataprimary data is what is research collect from different sourcss .it is also helps research to get elaborate information to his research

Questionnaire Face to face interview

Telephonic Interview

51

DATA ANALYIS

52

DATA INTERPRETATION AND ANALYSIS

Findings are based on the questions asked from dealers and investors of the financial markets.

The diagram given below shows the sectorial composition of different investments in different categories like loan & leasing, shares , Mutual Funds etc.

The finding revealed that 15% goes to insurance sector, 16% goes to Loan & leasing, 46% goes to Shares & Debentures & 23% goes to Mutual Fund.

53

The diagram given below shows the market share of the different companies like ICICI, UTI, LIC etc. dealing in the Mutual Fund market.

LIC 4%

EMF 6%

ICICI 23% UTI 67%

54

The diagram given below shows the percentage composition of reasons for not investing in Mutual funds Most of investors are not investing in MFs due to lack of knowledge i.e. 46%, other reasons are lack of dealers awareness, complexity nature and others.

Any Others 10% Complexity Nature 23% Lack of Investor awareness 43%

Lack of dealers awareness 24%

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Reasons given by dealers for giving suggestion to their clients to invest in Mfs. The major reason for suggesting Mfs is Commission that counts about 57%,

Any other reason 3% For Less Risk 16% For commission 57%

For Dividiend 24%

for dividend reasons counts for 24%, for risk aversion counts for 16% and other reasons counts for 3%.

56

Reasons for investing money in Mfs by investors.

Major portion of MF investor invest in mutual funds for less risk that counts 44%, for dividend purpose counts for 37%, For tax rebate is 12%, for liquidity counts for 7%.

For Tax Debate 12%

For Liquidity 7% For Dividend 37%

For Less Risk 44%

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Position of MF companies in terms of number of investors hold by them. The largest market share is hold by UTI that is a govt. owned company, the second position is hold by ICICI that holds 16% market share and LIC counts for 4% market share.

LIC 4% ICICI 16%

EMF 4%

UTI 76%

58

Gender wise classification of mutual funds users

Gender

28 male female 47

INFERENCE:
From the above chart we can infer that 47 respondents are male and 27 respondents are female.

59

Age wise Distribution of mutual funds

Age
25
No.Of Persons

20 15 10 5 0 18-25 25-40 Age 40-60 >60

INFERENCE:
From the above chart we can infer that 11 respondents are in the age group between (18-25 yrs) , 22 respondents are in the age group between 25-40 yrs, 19 respondents are in the age group between (40-60 yrs), 23 respondents are above the age of 60 yrs.

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Qualification of final consumers

Qualification
30
No.Of persons

25 20 15 10 5 0 Graduate post graduate Diploma iti

Qualification

INFERENCE:
From the above chart we can infer that 27 respondents are Graduate, 18 respondents are Post Graduate, 15 respondents are Diploma holders and 15 respondents are ITI holders

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.Occupation wise of final consumer of mutual funds

Occupation
No.Of persons

30 20 10 0
Govt/Govt undertaking Private Business Farmer Others

Occupation

INFERENCE:
From the above chart we can infer that 21 respondents are employed in Govt/ Govt undertaking sector, 18 respondents are private employees, 15 respondents are doing business, 6 respondents are farmers, 15 respondents are retired and housewives.

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Individual Income wise final users of funds

Individual Income(annually)
50
No.Of Persons

40 30 20 10 0 <120000 120000240000 240000360000 >360000

Income

INFERENCE:
From the above chart we can infer that 5 respondents are having annual income of <Rs.120000, 8 respondents are having annual income between Rs.120000-240000, 44 respondents are having annual income between Rs.240000-360000, 18 respondents are having annual income of >RS. 360000 annually

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Type of investor in mutual fund sector

Type of invstor

29% 48% moderate aggressive conservative 23%

INFERENCE:
From the above chart we can infer that 29% of respondents are conservative type of investor, 23% of investors are aggressive investors, 48% of respondents are moderate investors and 23% of investors are aggressive investors.

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Type of Mutual Fund invested

Type of investm ent m ade

Grow th fund Equity Fund Gilt Fund

11%

4%

25% money market/liquid fund

21% 9% 19% 11%

Debt fund index fund others

INFERENCE:
From the above chart we can infer that 25% of respondents invested in Growth Fund, 19% of respondents are invested in Equity Fund, 11% of respondents are invested in Gilt Fund, 9% of respondents are invested in Money Market/ Liquid funds, 21% of respondents invested in Debt Fund, 11% of respondents invested in Index Fund and 4% of respondents invested in other categories of fund.

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Investing in Mutual Funds (years)

Investing in Mutual funds(years)

9% 27%

23% <2 yrs 2-5 yrs 5-10 yrs >10 yrs 41%

INFERENCE:
From the above chart we can infer that 23% of respondents investing less than two years. 41% of respondents investing in Mutual Funds for 2-5 years. 27% of the respondents are investing for 5-10 years. 9% of respondents are investing for greater than 10 years.

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Correlation between Individual income and Percentage allocation for investment:

Percentage allocation Income (Rs) 0-10000 10000-20000 20000-30000 30000-40000 0 2 8 1 4 3 20 2 1 2 13 10 0 0 13 16 Correlation coefficient 0.98 0-5% 5-10% 10-15% 15-20%

INFERENCE:
From the above table we can infer that there is a strong correlation between the income and the percentage of allocation for investmet.

67

Correlation between Years of investment and Expected return from the investment:

Years of investment Expected Return 0-10% 10-20% 20-30% 30-40% 4 7 4 0 6 6 10 9 1 16 9 0 0 0 3 0 Correlation coefficient 0.122 0-2 yrs 2-4 yrs 4-6 yrs 6-8 yrs

INFERENCE:
From the above table we can infer that there is a positive correlation between the Years of investment and expected return from the investment.

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RESULT OF ANALYSIS Investing Patterns in India

Changes are in order everywhere. The old order changed giving place to the new. And likewise old economy stocks have taken a backseat, sending the new in a tizzy. But amidst the changing order, one lot that has largely managed to maintain its identity has been the investor community. While changing from being part of the odd, lot to a, smart lot, the Indian investor has reposed his faith in the old and the traditional.

The fellow Indian, even today, has his full faith in the traditional. Risk-less investment mode. The research findings showed 64% of the herd investing in the safe abode of banks, with 16 percent trying their luck out in real the stock market and 9 % putting in their wealth in real estate. The mutual find bonanza could attract a mere 4%, with 5% investing in jewellery and the rest 2% in other modes of investment.

ANALYSIS ABOUT THE MUTUAL FUND

On the basis of findings the researcher has also analyzed the following points: Today the most of the area in capital market is covered by share & debenture i.e. 46%. The MF sector covers only 23% of the market. In MF sector, the UTI govt. owned company, is a dominating company with the 68% market share. It was found that there is still required to spread the knowledge about the MF because even 24% dealers & brokers have said that they do not prefer to deal with MF due ton lacking awareness and 43% have said that investors do not prefer to invest in MF due to their own less awareness about MF. The investors, who are aware about the MF, invest in MF for less risk, i.e. 44%. The brokers &dealers, both they deal in MF or not, prefer to deal with UTI, and ICICI comes at second place in preference list. Following are some reasons about the companies why investors prefer to a particular co.: a. About the UTI: Goodwill of co., Maximum return, Govt. owned, Involved less risk. b. About the ICICI: Credibility,

69

SUMMARY AND CONCLUSION

70

RESTATEMENT OF PROBLEM
Retailers are the most important members of the distribution channel. They are the people who provides product to the final consumer. As they have the direct touch with the consumer, so they can play a vital role for infusing the buyer decisions. The should try to the retailers in such a way that they can satisfy with them.

The basic objective of my study is to identify final consumer need i.e. What types of mutual fund services is generally they prefer, Why are they buying different brands of mutual fund sector. Important factor for purchase decision of final consumer, To find out whether the company provide all facility to timely, Are they satisfied with the delivery process of mutual fund sector. How is the behavior of end stage channel? Are they an y shortcoming being faced by the executive in the delivery process. Is there any defect in service etc.

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MAJOR FINDING
Sharp ratio indicates that fund performance by considering overall total risk. Some funds are not able to perform well because of total risk involved in the fund Because of volatility in the market conditions. The funds are not able to cross the benchmark return so fund houses should concentrate on the market conditions. Out of six funds last two funds that is sensex and index got ve value based on Jensen ratio because they gave more preference for bank deposits. All funds had a steep decline in their returns in the year 2008 as markets in india tanked due to recessionary pressures in the American markets. From portfolio construction shows that, the fund diversifies its risk for some extent so the fund able to give +ve return based on Jensen ratio. The beta of the funds suggest that they are no highly volatile funds when it is compared to their respective benchmark indices.

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COCLUSION
Taking the present scenario of Capital Market, there is a much more change in present than a decade ago. Before the 1990s, the capital market was having very little awareness amongst the general public, physical dealing of security was done with any governance body and operating with less capital formation rate in the country. The present situation of Indian capital market is not only different from the past, but also has started online trading, having SEBI Act,1992 as a governance body, increased capital formation rate in the country. Before the 1990s, there were only two instruments of dealing in capital market share & debenture. Later on, the mutual fund came into the economic scenario as an operating vehicle for parking the investible funds in the capital market. The MF was started with UTI and at present MF market has a well measurable share. Today the Indian economy is attracting the capital market and showing the various features resulting in the future growth of MF sector, the features are as below: 1. Cut down interest rate of bank deposit, 2. Industrialisation, 3. Increasing awareness of capital market, 4. Keep on increasing capital formation in the economy, 5. Promotion by the government, 6. Promotion by the SEBI, 7. Growing competition among the player of MF, 8. Less risk involved in MF than share & debenture. From the above analysis it can be concluded that; The capital market in India is mostly covered by share & debenture, In the MF sector too most of the part is captured by govt. owned MF, i.e.UTI 68%. The preference of the investors for UTI is based on its goodwill, return, & less risk.

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The projected percentage of brokers& dealers is 24% and investors is 43% who are aware will invest in MF. On the basis of above analysis for the MF sector it can be suggested that if the awareness among the brokers, dealers and investors is increased the investment in MFs will sour to greater heights in absolute & relative terms.

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RECOMMENDATIONS

The Mutual Fund Asset Management companies can educate and give awareness about the concept of Mutual Funds to the investors. As majority of the investors do not know about this type of investment, it should highlight the benefits of mutual fund over other investment and attract more number of customers The Mutual Fund Asset Management companies can come up with more advertisements andpromotional measures and it should also target the FIIs and individual investors who invest in the capital markets. The fund distributors should clearly state the objective of each fund floated by the Asset Management Companies to help the investors choose the right investment plan. To induce investments into mutual funds, the government may provide tax benefits to attract investment into mutual funds. The risk management systems and the benchmarking of indices may be improved by AMFI (Association of Mutual Funds in India) to give the investors more guidelines and tools to take a good investment decision. The fund house has to reduce the total risk involved in the fund in order to increase the return with good portfolio construction. The fund house should select the innovative way of portfolio construction and should see the attracting areas of investing funds. The fund houses should concentrate on the market conditions according to that they have to set the benchmark and invest in different sectors. The fund houses should invest in good and attracting sectors to reduce standard deviation. The fund house should try to reduce little more beta in order to generate more returns to investors.

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ANNEXURE

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ANNEXURE &QUESTIONNAIRE Questionnaire

1. In which sector of financial market do you deal? a. Share & Debenture c. Insurance b. Mutual Fund d. Loan & Leasing

2.

Do you deal in Mutual fund? a. Yes b. No

B. If, Yes; which companys Mutual Fund do you like most to deal with? a. UTI, c. LIC, b. ICICI d. EMF.

C. If No, would you like to tell the reason, because of ? a. Lack of your own awareness c. Complexity nature b. lack of investors awareness d. Any other .

3.

Why do you suggest your clients to invest in mutual fund. a. For Commission c. For Less risk b. For Dividend Rate c. For any other Reason

4.

In your opinion ,Why do investor want to invest in mutual fund ?

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a. For less risk c. Risk factors

b. For Dividend rate d. For liquidity

5.

Which companys MF has large number of investor? a. UTI, c. LIC, b ICICI, d. EMF.

6.

What are the reasons to select the above companys MF? ....

7.

What are the extra facilities which you need from company?

8.

Any other recommendations-

... ... LISTS OF DEALERS & BROKERS N. C. GARG GARG & ASSOCIATES
Arun Gupta Sunshinec Fincit & Mercantile Ltd. Rakesh Kumar Garg Tax Consultant Shitaram Bhuwaka RDC, Raj Nagar, Ghaziabad. 1, Navyug Mkt. Ghaziabad. 2794308 1, Navyug Mkt. Ghaziabad. 1, Navyug Mkt. Ghaziabad. 2790268 9810747268 2990523

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D.V. International Rajeev Kumar Gupta Tax Consultant Neeraj Sharma Tax Consultant Kapil Kumar Garg Tax Consultant Satish Gupta Tax Consultant Bajaj Capital Pvt. Ltd. Sandeep Tomar Pushpendra & Company Arvind Kumar Verma A.K. verma & Co. Pandey Chambers Tax Consultants Sandeep Sharma Tax Consultant Vinod Kr. Gaur Tax Consultant V.K. Associates Tax & Finance Advisor Sanjeev Singhal Chartered Account Mr. Naveen Sharma Basant Kumar Sharma Gopal Gupta & Associates K.K. Sharma Tax Advisor Mr. Anoop Ashirwad Investments Sudarshan Bansal FFS, 53-A Chambers, Bhikajee Kamajee Place, New Delhi 261, Deepali, Pratampura, Delhi 26171175 27018494 204, RDC, Devika, Ghaziabad. 303 & 4, IIIrd Floor, Devika Chamber, RDC Ghaziabad. 2755778 2757649 2751435 2784728 2758227 9811720859 2718501 2722563 RDC, Raj Nagar, Ghaziabad. 2780111 9891046342 9818107121 RDC, Raj Nagar, Ghaziabad. 9810248319 RDC, Raj Nagar, Ghaziabad. 2759220 RDC, Raj Nagar, Ghaziabad. 9811088563 2791242 2785320 1, Navyug Mkt. Ghaziabad. 2794246 1, Navyug Mkt. Ghaziabad. 2716598 1, Navyug Mkt. Ghaziabad.

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Aglow Fin Trade (p) Ltd. Amitabh Gupta Viju Bank Holdings & Fin. Ser. Ltd. Lalit Finance & Insurance House Asian Credits Mr. Chawala Atm Vaults Mr. Bahl Bahl Invest. & Insurance Mr. P.S. Bedi Bedi Jey Ess Invest. Centre Mr. Daljeet Singh Bindra Investments Surendra Singh Blue Chip Invest. Services Mr. Chawala Chawala Capital Ser. Ltd. Chug Securities (p) Ltd. 7, Prakashdeep Building, Tolstoy Marg, Delhi Heeralal Dhanvridhi Kendra Ele Investments Mr. vishal Ess Gee Associates Mr. Pankaj Fortune Finance investments Pankaj Agrawal AK Capital Services Affordis India Fin. Ser. 224, Ashiwad Complex, D-1, Green Park, New Delhi 47, IIIrd Floor, Palika Place, Pachkuian Road, New Delhi B-15, Sareen Sadan, Twrg-11, Vikaspuri, New Delhi New Sagar Apartment, 6- Tilak Marg, New Delhi GL-12, IInd Floor, Jail Road, Janakpuri, New Delhi 26851236 23344118 25548190 23385704 25535151 A4B, Part-2, Lajpat Nagar, Delhi 26848263 23712918 SHN-31, Ist Floor, Main Shopping Complex, Sarita Vihar, New Delhi. G-26 Palika Place Panchkuian Road, Delhi 26973082 23344942 10/25, LG Floor, Patel Nagar East, New Delhi. W2, 010, Chand Nagar, New Delhi. 25850957 25430483 347, IIIrd Floor, Sant Nagar, East of Kailash, New Delhi 8/33, Iind Floor, WEA, Sarbarwan School Marg, Karol Bagh, Delhi 3/K-18, Lajpat Nagar, New Delhi 26436906 25762055 26877568 B-3/73, Sarita Vihar, Delhi 26946321 D-688, Sufdarjung Enclave, Delhi C-713, Sufdarjung Enclave, Delhi 27013980 26193313

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Anil Sharma Capital Ideas Ltd. Mr. Sagar Arpil Finance Ltd. Aa Sun Finance & Services Ltd. Arkey Eng. Co. Mr. Arun Abics Arun Bandhu Investments AKS Finance &mgt. ser. Adarsh (i) Finance Limited Aditya Finance Co. Affinity Financial ltd.

B-47, Cannaught Place, New Delhi 101 X/320 Inderjeet Singh Place, Delhi Gate, Delhi 92, Bhagat Singh Place, Gole Market, New Delhi E348-A, IInd Floor, Greater Kailash-I, New Delhi 4754/23, LG-9, Akarshan Bhawan , Ansari Road, New Delhi D1/3A, Krishna Nagar , New Delhi 28-a/10jai sarai, Hauzkhas,ND-16 1st floor,10,Newrajdhanienc, Delhi-92 165,Vinobapuri, Lajpat Nagar,ND-24

23321212 23254395 23364839 26410122 23286353 2221894 26515981 22227777 26820165

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BIBLIOGRAPHY
BOOKS REFERRED:1.Name of the Author : Punithavathy Pandian Name of the Book : Security Analysis & Portfolio Management Published By : Vikas Publishing house Year of Publication : 2004 2. Name of the Author : H. Sadhak Name of the Book : Mutual Funds in India Name of the Author : C.R. Kothari Name of the Book : Research Methodology 3. Name of the Author : Vesant Desai Name of the Book : Security Indian Financial System 4. Name of the Author : Dr. S.N. Maheswari Name of the Book : Financial Management Journals & Newspapers Referred:Outlook Money Best Funds April 15, 2005 Investors India Economic Times Web sites Referred:www.utimf.com www.pruicici.com

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