a study on the analysis of mutual fund & product marketing including micromarketing

8/13/2019 A STUDY ON THE ANALYSIS OF MUTUAL FUND & PRODUCT MARKETING INCLUDING MICROMARKETING

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A

RESEARCH PROJECT REPORT

ON

A STUDY ON THE ANALYSIS OF MUTUAL FUND &

PRODUCT MARKETING INCLUDING MICROMARKETING

Submitted to Maama!a Te"#i"a$ U#i%e'it! (Noida)

In the partial fulfillment of the requirement for the award ofMASTER OF *USINESS ADMINISTRATION

U#de te 'u+e%i'io# o, Submitted *!-Dr Prachi Nagar, Sana Fatima

(Professor) IAM M!A ("#$"%$&)

INSTITUTE OF ADVANCED MANAGEMENT ANDRESEARCH

'MI*+SN+ D+*I M++- AD,

D-AI, .A/IA!AD


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A

PROJECT REPORT ON

.A STUDY ON THE ANALYSIS OF MUTUAL FUND & PRODUCTMARKETING INCLUDING MICROMARKETING/

PRESENTED TO

MAHAMAYA TECHNICAL UNI0ERSITYIn the partial fulfillment of

Ma'te o, *u'i#e'' Admi#i'tatio#

I# te 'u+e%i'io# o, Pe'e#ted *!-

DR1 PRACHI NAGAR SANA FATIMAPROFESSOR ROLLNO12345346665

IAMR SESSION 366237289

INSTITUTE OF AD0ANCED MANAGEMENT AND

RESEARCH


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/or a student of professional course like MB the si!nificanceof the practical knowled!e !ained throu!h the survey trainin! is

enormous. It is durin! this period that one !ets an opportunity to

know how the market works in the real world.

%o+ keepin! in this mind I &oined a leadin! financial sector like

D% B*0K(#0K M1T1* /1ND *TD+ for my summer trainin!

pro!ramme. I was assi!ned to study about Mutual /unds

Investments.

I have tried my best to find out all the relevant information and

analy$e it to the best of my ability.

reface


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%ana /atima

Executive Summary

The title o my !ro"ect i# $A%aly#i# o Mutual u%& ' (ro&uct

mar)eti%* i%clu&i%* micromar)eti%*+,i# *oi%* to -e !rove& u#eul or

the or*a%i.atio%/ a# 0ell a# or me %ot o%ly i% theoretical a#!ect# -ut

al#o i% !ra*matic a#!ect#+ The curre%t mutual u%& i%&u#try i% I%&ia i#

!rovi%* to -e a limeli*ht or every or*a%i.atio% co%cer%e&+

1ei%* a !art o mutual u%& i%&u#try D#! -lac)roc)

mutual u%& throu*h it# cha%%el !art%er# i# movi%* to0ar hi*her

level o !erorma%ce that i# mea#ura-le throu*h variou# releva%t

ormatio%#+

Thi# !ro"ect aim# at a%aly.i%* the mutual i%&u#try 0ith #!ecial

reere%ce to DS( 12AC3 ROC3+ It act# a# a *ui&e to )%o0 the !re#e%t

#tatu# o mutual u%& a%& it# &ue im!orta%ce+ Com!ati-ility i% term#

o variou# mar)eti%* tool# u#e& to a%aly.e mutual u%& a%& to )%o0

the cu#tomer !erce!tio% a%& relative mar)et #hare a%& *ro0th 0ith

the hel! o the !ro"ect+


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0ontents

cknowled!ment 23

reface 24

5"ecutive %ummary26 7) Introduction

28-93

0ompany rofile

9) bout Mutual /und

94-34

History of Mutual /und

Benefits of Mutual /und

Drawbacks of Mutual /und

5ntities Involved in #r!ani$in! Mutual /und

Types of Mutual /und

Net sset :alue 'N:)

ortfolio Mana!ement

;) #b&ective 36

;) Methodolo!y36- 48

%urvey /orm

/indin!

4) bout HD/0 Mutual fund 4


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,hy HD/0 Mutual /und=

%ystematic Investment lan '%I)

6) Top Mutual /und 63-66

Top 72 Mutual /und In 5ach 0ate!ory

Top 72 Mutual /und '#pen 5nded) Top 72 Mutual /und '0lose 5nded)

8) *imitation 68

) %u!!estions 6>

72) Biblio!raphy 82

Com!a%y (roile4

The DS( Grou!/ hea&e& -y Mr+ Heme%&ra 3othari/ i# o%e othe ol&e#t i%a%cial #ervice# irm# i% I%&ia+ It ha# a trac)recor& o over 567 year# a%& 0a# o%e o the ou%&i%*mem-er# o the 1om-ay Stoc) Excha%*e+

1lac)Roc) i# the lar*e#t li#te& a##et ma%a*eme%t com!a%yi% the 0orl&+ It i# a !remier !rovi&er o i%ve#tme%t #olutio%#throu*h a variety o !ro&uct #tructure#/ i%clu&i%* i%&ivi&uala%& i%#titutio%al #e!arate accou%t#/ mutual u% a%& other

!oole& i%ve#tme%t vehicle#/ a%& the i%&u#try8lea&i%*iShare#9 ETF# to i%ve#tor# arou%& the 0orl&+ 1lac)Roc) i# atruly *lo-al irm that com-i%e# the -e%eit# o 0orl&0i&ereach 0ith local #ervice a%& relatio%#hi!#+ It ha# a &ee!!re#e%ce i% every ma"or ca!ital mar)et i% the 0orl&/ 0hichre#ult# i% *reater i%#i*ht# i%to i%crea#i%*ly i%terco%%ecte&i%a%cial mar)et#+ Ma%a*i%* a##et# or i%ve#tor# i% North

Introduction


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a%& South America/ Euro!e/ A#ia/ Au#tralia/ the Mi&&le Ea#ta%& Arica/ the irm to&ay em!loy# more tha% :/; cou%trie# arou%&the 0orl&+ 1lac)Roc)?# i%ve#tor -a#e i%clu&e# cor!orate/

!u-lic/ u%io% a%& i%&u#try !e%#io% !la%#@ *over%me%t#@i%#ura%ce com!a%ie#@ thir&8!arty mutual u%@e%&o0me%t#@ ou%&atio%#@ charitie#@ cor!oratio%#@ oiciali%#titutio%#@ #overei*% 0ealth u%@ -a%)#@ i%a%cial!roe##io%al#@ a%& i%&ivi&ual# 0orl&0i&e+

ith our three8&ime%#io%al a!!roach to ma%a*i%* the

or*a%i.atio%/ 0e #ee) to4 E%#ure co%#i#te%cy o% a *lo-al -a#i#@

Allo0 or the tailori%* o !ro&uct# a%& #ervice#accor&i%* to clie%t or local %ee@

(romote team0or) amo%* our em!loyee# 0orl&0i&e@a%&

Facilitate o!eratio%al i%te*rity a%& eicie%cy

Title4 8 A%aly#i# o Mutual u%&/ (ro&uct mar)eti%* MicroMar)eti%* Co%#i#t o A%aly#i# o Mutual u% Mar)et/ It#!ortolio a%& Variou# Mar)et# A#!ect#+

ABOUT DSB BLACK ROCK

D% Black (ock Investment Mana!ers vt. *td. is the

investment mana!er to D% Black (ock Mutual Fund.
http://www.dspblackrock.com/http://www.dspblackrock.com/


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The philosophy of D% Black (ock Investment Mana!ers vt.

*td. has been !rounded in the belief that e"periencedinvestment professionals+ usin! a disciplined process andsophisticated analytical tools+ can consistently add value to

client portfolios. DS( 1lac) Roc) I%ve#tme%t Ma%a*er#vt. *td. takes a

three dimensional approach to the mana!ement of theor!ani$ation+ incorporatin! functional+ product and re!ionalelements in support of clients? !oals. The functional dimensionlooks at the company?s operations by specific task+ suchas account mana!ement or operations. The product dimensionbrin!s to!ether the cross-disciplinary e"pertise critical tomana!in! client assets in each class. /inally+ the re!ionalaspect of the company?s model reco!ni$es the uni@ue+!eo!raphy-specific needs of clients as well as the importanceof local re!ulatory issues.

A1OUT 12AC3ROC3 GROU(

1lac) Roc)/ I%c+is a 1.%. based multinationalinvestmentmana!ementcorporation based in New Aork 0ity. s the world?slar!est asset mana!er+ Black (ock is a leadin! provider ofinvestment+ advisory and risk mana!ement solutions. The companyac@uired Barclays lobal Investors in December 922>+ solidifyin! itsposition as the lar!est investment mana!erin the world. s of%eptember ;2+ 9279+ Black (ock had C;.68 trillion in assets undermana!ement.

/ounded in 7>


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12AC3ROC3 MUTUA2 FUND

Revenue US$ 9.08billion(2011)

Net income US$ 2.239 billion (2011)

AUM US$ 3.792 trillion (2012)

Total assets US$ 178.4 billion (2010)

Total equity US$ 24.3 billion (2009)

Employees 10,100 (2011)

MISSION

D% B*0K (#0K mission is to be a leadin!+ !lobal+ client-

focused+ innovative and low-cost provider of financial services

throu!h the distribution channels of the clientGs preference in

markets to create value.

12AC3 ROC3 GROU( FINANCIA2 HIGH2IGHTS
http://en.wikipedia.org/wiki/1000000000_(number)http://en.wikipedia.org/wiki/1000000000_(number)http://en.wikipedia.org/wiki/1000000000_(number)http://en.wikipedia.org/wiki/Net_incomehttp://en.wikipedia.org/wiki/Assets_under_managementhttp://en.wikipedia.org/wiki/Assethttp://en.wikipedia.org/wiki/Equity_(finance)http://en.wikipedia.org/wiki/1000000000_(number)http://en.wikipedia.org/wiki/Net_incomehttp://en.wikipedia.org/wiki/Assets_under_managementhttp://en.wikipedia.org/wiki/Assethttp://en.wikipedia.org/wiki/Equity_(finance)


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Ne0 Bor)/ a%uary 5:/ =


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the #eco%& hal o the year/, #ai& 2aure%ce D+ Fi%)/

Chairma% a%& CEO o 1lac)Roc)+ LOur re#ult# rei%orce the

u%&erlyi%* #tre%*th a%& mome%tum o our &iver#iie& clie%t8

ocu#e& mo&el+ Our mix o -u#i%e##e#/ to*ether 0ith

u%!arallele& ri#) ma%a*eme%t ca!a-ilitie# a%& a #har!

ocu# o% executio%/ have allo0e& u# to &eliver #tro%*

re#ult# throu*h hi*hly challe%*i%* mar)et cycle#+ Thi#

mome%tum 0a# relecte& i% the ourth Juarter a# 0e

*e%erate& %et i%lo0# o =;+K -illio% i% lo%* term %et %e0

-u#i%e##+ I% a&&itio%/ 0ith the i%ve#tme%t# ma&e over thecour#e o =


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1OARD OF DIRECTORS

Laurence Fink 0hairmanLaurence Fink 05#Robert a!ito residenten"rick R. #ilon, :ice resident%&ili!! 'il"ebrand :ice resident&arle 'allac Directorar* S&e"lin Director+ennett #. olub Director

Robert #. Fairbairn Director
http://en.wikipedia.org/wiki/Laurence_D._Finkhttp://en.wikipedia.org/wiki/Laurence_D._Finkhttp://en.wikipedia.org/wiki/Robert_S._Kapitohttp://en.wikipedia.org/wiki/Philipp_Hildebrandhttp://en.wikipedia.org/wiki/Charles_Hallachttp://en.wikipedia.org/wiki/Laurence_D._Finkhttp://en.wikipedia.org/wiki/Laurence_D._Finkhttp://en.wikipedia.org/wiki/Robert_S._Kapitohttp://en.wikipedia.org/wiki/Philipp_Hildebrandhttp://en.wikipedia.org/wiki/Charles_Hallac


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COM(ARATIVE 1USINESS FIGURES

3

9277

3

9272

0han!e

;

9277

0han!e

AUM ;/75=/>5 ;/7>K 5 ;/;67/ 7

GAA(-a#i#4Reve%ue

== =6:; 55 =/==7 7:7

Dilute&E(S

;+

COR(ORATE SOCIA2 RES(ONSI1I2ITB

Our Cairman! "emen#ra Kotari! as al$ays %een a passionate $il#li&e entusiast' "isentusiasm to$ar#s $il#li&e le# im to set up te (il#li&e Conservation Trust )(CT*! a &e$years a&ter e sol# is &inancial services company to Merrill Lync )no$ Ban+ o& America*'(CT is a Mum%ai,%ase# re-istere# pu%lic carita%le trust #e#icate# an# committe# to tepreservation! protection an# conservation o& $il#li&e across .n#ia' (CT colla%orates $itN/Os an# ali-ns itsel& $it te -overnment to pro%lem,solve &or te many sta+eol#ersinvolve# in savin- .n#ia0s &orests an# $il# animals' 1urter! it elps &un# N/Os tat areactively involve# in ealt an# e#ucation initiatives aroun# national par+s an# ma+escommunities tat resi#e in &orest areas a$are o& te importance o& .n#ia0s 2un-les'Anoter important aspect o& (CT0s interventions are te 0(CT (il#li&e Service A$ar#s0$ic $ere intro#uce# to motivate te &orest sta&& alon- $it associate# a-encies suc aste 2u#iciary! police #epartment an# eco,#evelopment committees $o $or+ closely $it

te 1orest Department to curtail man,animal con&lict! &orest #e-ra#ation an# poacin-'(CT as %een con#uctin- consultations an# $or+sops on various trea#s o& $il#li&econservation involvin- &orest o&&icials! $il#li&e %iolo-ists! conservation N/Os! researcers!$il# li&ers! corporates! $riters an# &ilm,ma+ers' .t is te or-anisation0s %elie& tat %y $or+in-in unison! te country can elp &in# solutions to te many pro%lems con&rontin- .n#ia0s$il#li&e an# &orests'


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12AC3 ROC3 FOUNDATION

.n 3455! Larry 1in+an# Ro%ert S' Kapitole&t 1irst Bostonto &oun# a company tat $oul#

provi#e clients $it asset mana-ement services &rom a ris+ mana-ement perspective'

.nitially! Blac+Roc+ $as un#er te um%rella o& Te Blac+stone /roupan# $as calle#Blac+stone 1inancial Mana-ement'

1in+ 2oine# Blac+stone in 3455 as a partner! alon- $it Kapito! Ralp Sclosstein! Bennett

/olu%! Bar%ara Novic+! Susan (a-ner! Keit An#erson an# "u- 1rater' Be&ore 2oinin-

Blac+stone! 1in+! Kapito! /olu% an# Novic+ $or+e# to-eter at 1irst Boston' As Mana-in-

Director at 1irst Boston! 1in+ an# is team pioneere# te mort-a-e,%ac+e# securitiesmar+et

in te Unite# States'

Blac+stone 1inancial Mana-ement can-e# its name to Blac+Roc+ 1inancial Mana-ement a

&e$ years later to miti-ate potential con&usion $it oter Blac+stone /roup a&&iliates an# to

re#uce te nee# &or certain corporate -overnance restrictions tat a# %een place# on it %y

Te Blac+stone /roup'Te Blac+Roc+ team spun out o& Blac+stone an# %ecame an in#epen#ent &inancial services

&irm' 1in+ cut a #eal $it te 6NC 1inancial Services /roup$en tey purcase# 789 o&

Blac+Roc+' Su%sequently! 6NC contri%ute# a num%er o& its oter asset mana-ement

su%si#iaries into Blac+ Roc+ $ic ten consoli#ate# te various entities into an inte-rate#

asset mana-ement &irm' .n 3444! $it :3;< %illion in assets un#er mana-ement! te &irm

$ent pu%lic altou- 6NC remaine# its #ominant sareol#er'

On =une 37! >88>! Blac+Roc+ ?ir-inia Municipal Bon# Trust #eclare# te Trusts0 &irst

montly #ivi#en#s! paya%le on =uly 3! >88>! &or sareol#ers o& recor# as o& =une >;! >88>' '

Blac+Roc+ -re$ or-anically! trou- li&t,outs an# teir &irst acquisition $as on =anuary >5!

>88< $en tey purcase# State Street Researc Mana-ement! a mutual,&un# %usiness tat

a# previously %een o$ne# %y MetLi&e' Tis acquisition a##e# a si@a%le equity %usiness to

Blac+Roc+0s &un#s' On Septem%er >4! >88;! Blac+Roc+ complete# its mer-er $it Merrill

Lync .nvestment Mana-ers )ML.M*! alvin- 6NC0s o$nersip an# -ivin- Merrill Lynca

4'884! Blac+Roc+ ire#

employees &rom R Capital Mana-ement! LLC an# too+ control o& te :3'< %illion &un#'

Blac+Roc+ 1inancial Mana-ement .nc' as %een retaine# %y te Ne$ or+ 1e#to mana-e

an# eventually liqui#ate te assets el# in a ne$ly &orme# Dela$are limite# lia%ility

company )LLC* to &un# te purcase o& resi#ential mort-a-e,%ac+e# securities)RMBS* &rom

te securities len#in- port&olio o& several re-ulate# U'S' insurance su%si#iaries o& A./'

.n Decem%er >884! te company acquire# Barclays /lo%al .nvestors )B/.*! -ivin- it control

o& te iSaressystem' Te #ivision &ormerly %ran#e# B/. is ea#quartere# inSan

1rancisco! an# also as researc an# port&olio mana-ement teams

inLon#on!Sy#ney! To+yo! Torontoan# oter cities! as $ell as client service o&&ices in

several a##itional ma2or &inancial centers inNort America!European# Asia'
http://en.wikipedia.org/wiki/Laurence_D._Finkhttp://en.wikipedia.org/wiki/Robert_S._Kapitohttp://en.wikipedia.org/wiki/First_Bostonhttp://en.wikipedia.org/wiki/Blackstone_Grouphttp://en.wikipedia.org/wiki/First_Bostonhttp://en.wikipedia.org/wiki/Mortgage-backed_securityhttp://en.wikipedia.org/wiki/PNC_Financial_Services_Grouphttp://en.wikipedia.org/wiki/MetLifehttp://en.wikipedia.org/wiki/Merrill_Lynchhttp://en.wikipedia.org/wiki/New_York_Fedhttp://en.wikipedia.org/wiki/Residential_mortgage-backed_securityhttp://en.wikipedia.org/wiki/AIGhttp://en.wikipedia.org/wiki/AIGhttp://en.wikipedia.org/wiki/IShareshttp://en.wikipedia.org/wiki/San_Franciscohttp://en.wikipedia.org/wiki/San_Franciscohttp://en.wikipedia.org/wiki/San_Franciscohttp://en.wikipedia.org/wiki/Londonhttp://en.wikipedia.org/wiki/Londonhttp://en.wikipedia.org/wiki/Sydneyhttp://en.wikipedia.org/wiki/Tokyohttp://en.wikipedia.org/wiki/Torontohttp://en.wikipedia.org/wiki/Torontohttp://en.wikipedia.org/wiki/North_Americahttp://en.wikipedia.org/wiki/North_Americahttp://en.wikipedia.org/wiki/North_Americahttp://en.wikipedia.org/wiki/Europehttp://en.wikipedia.org/wiki/Europehttp://en.wikipedia.org/wiki/Asiahttp://en.wikipedia.org/wiki/Laurence_D._Finkhttp://en.wikipedia.org/wiki/Robert_S._Kapitohttp://en.wikipedia.org/wiki/First_Bostonhttp://en.wikipedia.org/wiki/Blackstone_Grouphttp://en.wikipedia.org/wiki/First_Bostonhttp://en.wikipedia.org/wiki/Mortgage-backed_securityhttp://en.wikipedia.org/wiki/PNC_Financial_Services_Grouphttp://en.wikipedia.org/wiki/MetLifehttp://en.wikipedia.org/wiki/Merrill_Lynchhttp://en.wikipedia.org/wiki/New_York_Fedhttp://en.wikipedia.org/wiki/Residential_mortgage-backed_securityhttp://en.wikipedia.org/wiki/AIGhttp://en.wikipedia.org/wiki/IShareshttp://en.wikipedia.org/wiki/San_Franciscohttp://en.wikipedia.org/wiki/San_Franciscohttp://en.wikipedia.org/wiki/Londonhttp://en.wikipedia.org/wiki/Sydneyhttp://en.wikipedia.org/wiki/Tokyohttp://en.wikipedia.org/wiki/Torontohttp://en.wikipedia.org/wiki/North_Americahttp://en.wikipedia.org/wiki/Europehttp://en.wikipedia.org/wiki/Asia


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A&ter te close o& tra#in-! on 1ri#ay! April 3! >833! Blac+Roc+ )NSEBLK*

replace# /en@yme)NASDA/ENF* on te SG6


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Hi#tory o Mutual Fu%&

The mutual fund industry in India started in 7>6; with the formation of

1nit Trust of India+ at the initiative of the overnment of India and(eserve Bank the. The history of mutual funds in India can be broadly

divided into four distinct phases

/irst hase J 7>63-63. t the end of

7>>; '5ntry of ublic %ector /unds)

7>2)+ Bank of Baroda Mutual

/und '#ct >9). *I0 established its mutual fund in une 7> while I0 had

set up its mutual fund in December 7>>2. t the end of 7>>;+ the mutual

fund industry had assets under mana!ement of (s.38+223 crores.

Third hase J 7>>;-922; '5ntry of rivate %ector /unds)

,ith the entry of private sector funds in 7>>;+ a new era started in theIndian

Mutual fund industry+ !ivin! the Indian investors a wider choice of fund

families.


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lso+ 7>>; was the year in which the first Mutual /und (e!ulations came

into bein!+

1nder which all mutual funds+ e"cept 1TI were to be re!istered and

!overned. The

5rstwhile Kothari ioneer 'now mer!ed with /ranklin Templeton) was the

first

rivate sector mutual fund re!istered in uly 7>>;.

The 7>>; %5BI 'Mutual /und) (e!ulations were substituted by a more

comprehensive and revised Mutual /und (e!ulations in 7>>6. The

industry now functions under the %5BI 'Mutual /und) (e!ulations 7>>6.

The number of mutual fund houses went on increasin!+ with many forei!n

mutual funds settin! up funds in India and also the industry has

witnessed several mer!ers and ac@uisitions. s at the end of anuary

922;+ there were ;; mutual funds with total assets of (s. 7+ 97+ 6;

1TI was bifurcated into two separate entities. #ne is the %pecified

1ndertakin! of the 1nit Trust of India with assets under mana!ement of

(s.9>+


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(e!ulations. ,ith the bifurcation of the erstwhile 1TI which had in March

9222 more than (s.86+222 crores of assets under mana!ement and with

the settin! up of a 1TI Mutual /und+ conformin! to the %5BI Mutual /und

(e!ulations+ and with recent mer!ers takin! place amon! different

private sector funds+ the mutual fund industry has entered its current

phase of consolidation and !rowth. s at the end of #ctober ;7+ 922;+

there were ;7 funds+ which mana!e assets of (s.796896 crores.

#ne can say that the industry is movin! from infancy to adolescence+ the

industry is maturin! and the investors and funds are frankly and openly

discussin! difficulties opportunities and compulsions.

A-out Mutual Fu%&

hat i# a mutual u%&

- Mutual /und is a trust that pools the savin!s of a number of investors

who share a common financial !oal. The money thus collected is then

invested in capital market instruments such as shares+ debentures and other

securities.

Thus a Mutual /und is the most suitable investment for the common man as

it offers an opportunity to invest in a diversified+ professionally mana!ed

basket of securities at a relatively low cost. The flow chart below describes

broadly the workin! of a mutual fund A# o early =


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9) *ump sum '#ne Time)

SI( 48 %I allow the investor to invest in Mutual fund as a recurrin!

basic+ means they can systematically like monthly+ @uarterly and halfyearly a certain amount of money invest in Mutual /und. This plan option

of investment basically beneficial for those employees who set their

salary on monthly basis.

2um! #um48This mode of investment allow investor to invest their

money at a onetime like fi"ed deposit in bank.

How funds rotate from investor to investor.


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E%titie# I%volve& i% Or*a%i.i%* Mutual Fu%&

1nit Holders - The investors who buy the unit of a mutual fund is called unitholders.

%ponsors - erson or a body who set up or form the trust.

ppoints board of trustees.

ualification of M0 0ustodian.

Hands over trust deed to trustees.

Trustees - There can be Trustee 0ompany.

Investments are hold by the trustees.

(i!ht to dismiss M0s.

(eserves fees for services.

M0s - M0s are the fund mana!er.

%hould have a net worth of (s 72 0r all the time.

Most company with %5BI re!ulations.

Mutual /und - mechanism for poolin! the resources by issuin! units tothe

Investors and investin! funds in securities in accordance withthe

#b&ectives disclosed in after documents.


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Transfer !ent - Issue and redeem the units and other related services suchas preparation of transfer documents and updatin! investorGsrecords.

Distributers - ppointed by M0 and may act on behalf of different funds.

0ustodians- ppointed by board of trustees for safe keepin! of securitiesas independent entity of sponsors investment for thecommon man as it after an opportunity to invest in aprofessionally mana!ed basket of securities at a relativelylow cost. The flow chart below describes broadly the workin!of a mutual fund.

Mutual u%& O!eratio% Flo0 Chart

There are many entities involved and the dia!ram below illustrates theor!ani$ational setup of the Mutual /und.

-nit older

S+!I

Sponsors

rustees

he Mutual Fund ransfer Agent

0ustodian

AM0


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1nit Holder is investors who buy the unit of a mutual fund+ %ponsors iswho set up or form the trust+ ppoints board of trustees+ ualification ofM0 0ustodian+ Hands over trust deed to trustees. Trustees can beTrustee 0ompanyL Investments are hold by the trustees+ (i!ht to dismissM0s+ and (eserves fees for services. M0s are the fund mana!er. It

should have a net worth of (s 72 0r all the time. Most company with %5BIre!ulations. Transfer !ent issue and redeem the units and other relatedservices such as preparation of transfer documents and updatin!investorGs records and Distributers appointed by M0 and may act onbehalf of different funds+ 0ustodians appointed by board of trustees forsafe keepin! of securities as independent entity of sponsors investmentfor the common man as it after an opportunity to invest in aprofessionally mana!ed basket of securities at a relatively low cost.

1e%eit# o Mutual Fu%&

rofessional Mana!ement Mutual /unds provide the services of e"perienced

and skilled professionals+ backed by a dedicated investment research team

that analyses the performance and prospects of companies and selects suitable

investments to achieve the ob&ectives of the scheme.

Diversification Mutual /unds invest in a number of companies across a

broad cross-section of industries and sectors. This diversification reduces

the risk because seldom do all stocks decline at the same time and in the

same proportion. Aou achieve this diversification throu!h a Mutual /und

with far less money than you can do on your own.

0onvenient dministration Investin! in a Mutual /und reduces

paperwork and helps you avoid many problems such as bad deliveries+

delayed payments and follow up with brokers and companies. Mutual

/unds save your time and make investin! easy and convenient.

(eturn otential #ver a medium to lon!-term+ Mutual /unds have the

potential to provide a hi!her return as they invest in a diversified basket

of selected securities. This can be said substantially as various schemes


26/68

of %BI has outperformed market in the matter of returns as they have

provided returns to the tune of 722 '%BI Ma!num 0ontra /und)

*ow 0osts Mutual /unds are a relatively less e"pensive way to invest

compared to directly investin! in the capital markets because the

benefits of scale in brokera!e+ custodial and other fees translate into

lower costs for investors.

*i@uidity In open-end schemes+ the investor !ets the money back

promptly at net asset value related prices from the Mutual /und. In

closed-end schemes+ the units

can be sold on a stock e"chan!e at the prevailin! market price or the

investor can avail of the facility of direct repurchase at N: related prices

by the Mutual /und.

Transparency n investor !ets re!ular information on the value of

hisher investment in addition to disclosure on the specific investments

made by himher in the scheme+ the proportion invested in each class of

assets and the fund mana!er?s investment strate!y and outlook.

/le"ibility Throu!h features such as re!ular investment plans+ re!ular

withdrawal plans and dividend reinvestment plans+ you can

systematically invest or withdraw funds accordin! to your needs and

convenience.

ffordability Investors individually may lack sufficient funds to invest in

hi!h-!rade stocks. mutual fund because of its lar!e corpus allows even

a small investor to take the benefit of its investment strate!y as all

investors weather bi! or small will be treated e@ually.


27/68

0hoice of %chemes Mutual /unds offers a family of schemes to suit your

varyin! needs over a lifetime. n investor can choose from amon! a

number of schemes whichever suit his or her need.

Dra0-ac)# o Mutual Fu%&

Mutual funds have their drawbacks and may not be for everyone

No uarantees No investment is risk free. If the entire stock market

declines in value+ the value of mutual fund shares will !o down as well+

no matter how balanced the portfolio. Investors encounter fewer risks

when they invest in mutual funds than when they buy and sell stocks on

their own. However+ anyone who invests throu!h a mutual fund runs therisk of losin! money.

/ees and commissions ll funds char!e administrative fees to cover their

day-to-day e"penses. %ome funds also char!e sales commissions or


28/68

loads to compensate brokers+ financial consultants+ or financial

planners. 5ven if you don?t use a broker or other financial adviser+ you

will pay a sales commission if you buy shares in a *oad /und.

Ta"es Durin! a typical year+ most actively mana!ed mutual funds sell

anywhere from 92 to 82 percent of the securities in their portfolios. If

your fund makes a profit on its sales+ you will pay ta"es on the income

you receive+ even if you reinvest the money you made.

Mana!ement risk ,hen you invest in a mutual fund+ you depend on the

fund?s mana!er to make the ri!ht decisions re!ardin! the fund?s portfolio.

If the mana!er does not perform as well as you had hoped+ you mi!ht not

make as much money on your investment as you e"pected. #f course+ if

you invest in Inde" /unds+ you fore!o mana!ement risk+ because these

funds do not employ mana!ers.

Ty!e# o Mutual Fu%&

Mutual fund schemes may be classified on the basis of its structure and itsinvestment ob&ective.

By %tructure

#pen-ended /unds n open-end fund is one that is available for

subscription all throu!h the year. These do not have a fi"ed maturity.Investors can conveniently buy and sell units at Net sset :alue 'N:)

related prices. The key feature of open-end schemes is li@uidity. 0losed-ended /unds closed-end fund has a stipulated maturity period

which !enerally ran!in! from ; to 74 years. The fund is open forsubscription only durin! a specified period. Investors can invest in thescheme at the time of the initial public issue and thereafter they can buyor sell the units of the scheme on the stock e"chan!es where they arelisted.


29/68

Interval /unds Interval funds combine the features of open-ended and

close-ended schemes. They are open for sale or redemption durin! pre-determined intervals at N: related prices.

By Investment #b&ective

rowth /unds The aim of !rowth funds is to provide capital appreciation

over the medium to lon!- term. %uch schemes normally invest a ma&orityof their corpus in e@uities. It has been proven that returns from stocks+have outperformed most other kind of investments held over the lon!term. rowth schemes are ideal for investors havin! a lon!-term outlookseekin! !rowth over a period of time.

Income /unds The aim of income funds is to provide re!ular and steady

income to investors. %uch schemes !enerally invest in fi"ed incomesecurities such as bonds+ corporate debentures and overnment

securities. Income /unds are ideal for capital stability and re!ularincome.

Balanced /unds The aim of balanced funds is to provide both !rowth and

re!ular income. %uch schemes periodically distribute a part of theirearnin! and invest both in e@uities and fi"ed income securities in theproportion indicated in their#ffer documents. In a risin! stock market+ the N: of these schemes maynot normally keep pace+ or fall e@ually when the market falls. These areideal for investors lookin! for a combination of income and moderate!rowth.

Money Market /unds The aim of money market funds is to provide easyli@uidity+ preservation of capital and moderate income. These schemes!enerally invest in safer short-term instruments such as treasury bills+certificates of deposit+

commercial paper and inter-bank call money. (eturns on these schemesmay fluctuate dependin! upon the interest rates prevailin! in the market.These are ideal for 0orporate and individual investors as a means to parktheir surplus funds for short periods.

*oad /unds *oad /und is one that char!es a commission for entry or

e"it. That is+ each time you buy or sell units in the fund+ a commissionwill be payable. Typically entry and e"it loads ran!e from 7 to 9. Itcould be worth payin! the load+ if the fund has a !ood performancehistory.

No-*oad /unds No-*oad /und is one that does not char!e a

commission for entry or e"it. That is+ no commission is payable on


30/68

purchase or sale of units in the fund. The advanta!e of a no load fund isthat the entire corpus is put to work.

#ther %chemes

Ta" %avin! %chemes These schemes offer ta" rebates to the investorsunder specific provisions of the Indian Income Ta" laws as theovernment offers ta" incentives for investment in specified avenues.Investments made in 5@uity *inked %avin!s %chemes '5*%%) and ension%chemes are allowed as deduction us


31/68

'II) *oad vs. No *oad

Marketin! of a new mutual fund scheme involves initial e"pense. Thesee"penses may be recovered from the investors in different ways atdifferent times. Three usual ways in which a fundGs sales e"penses may be

recovered from the investors are

7. t the time of investorGs entry into the fundscheme+ by deductin!a specific amount from his initial contribution front-end or entryload.

9. By char!in! the fundscheme with a fi"ed amount each year+durin! the stated number of years deferred load.

;. t the time o the investorGs e"it from the fundscheme+ bydeductin! a specific amount from the redemption proceedspayable to the investor back end or e"it load

These char!es made by the fund mana!ers to the investors to coverdistributionsalesmarketin! e"penses are often called EloadsF. /unds thatchar!e front-end+ back-end or deferred loads are called load funds. /undsthat make no such char!es or loads for sales e"penses are called no-loadfunds.

In India+ %5BI has defined a EloadF as the one-time fee payable by theinvestor to allow the fund to meet initial issue e"penses includin!brokersGa!entsGdistributorsG commissions+ advertisin! and marketin!e"penses.

load fundGs declared N: does not include local char!es

III. Ta"-e"empt vs. Non-Ta" e"empt /undsenerally+ when a fund invests in ta"-e"empt securities+ it is called a ta"-e"empt fund. In India+ after the 7>>> 1nion overnment Bud!et+ all ofthe dividend income received from any of the mutual funds is ta"-free inthe hands of the investors. However+ funds other than 5@uity /unds haveto pay a distribution ta"+ before distributin! income to investors. In otherwords+ e@uity mutual fund schemes are ta"-e"empt investment avenues+while other funds are ta"able for distributable income.

Mutual /und Types


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#nce we have reviewed the fund classes+ we are ready to discuss morespecific fund types. /unds are !enerally distin!uished from each other bytheir investment ob&ectives and types of securities they invest in.

a. Broad /und Types by Nature of Investments

Mutual funds may invest in e@uities+ bonds or other fi"ed incomesecurities+ or short-term money market securities. %o we have 5@uity+Bonds and Money Market /unds. ll of them invest in financial assets.But there are funds that invest in physical assets. /or e"ample+ wemay have old or other recious Metal /unds+ or (eal 5state /unds.

b. Broad /und Types by Investment #b&ectiveInvestors and hence the mutual funds pursue different ob&ectiveswhile investin!. Thus+ rowth /unds invest for medium to lon! termcapital appreciation. Income /unds invest to !enerate re!ular income+and less for capital appreciation. :alue /unds invest in e@uities that

are considered under-valued today+ whose value will be unlocked inthe future.

c. Broad /und Types by (isk rofileThe nature of a fundGs portfolio and its investment ob&ective implydifferent levels of risk undertaken. /unds are therefore often !roupedin order of risk. Thus+ 5@uity /unds have a !reater risk of capital lossthan a Debt /und that seeks to protect the capital while lookin! forincome. Money Market /unds are e"posed to less risk than even theBond /unds+ since they invest in short-term fi"ed income securities+ ascompared to lon!er-term portfolios of Bond /unds.

Money Market /unds *owest run! in the order of risk level+ Money Market/unds invest in securities of a short-term nature+ which !enerally meanssecurities of less than one-year maturity.

ilt /unds ilts are !overnment securities with medium to lon!-termmaturities+ typically of over one year 'under one-year instruments bein!money market securities).

Debt /unds 'or Income /unds) Ne"t in the order of risk level+ we have the!eneral cate!ory Debt /unds. Debt funds invest in debt instruments issuednot only by !overnments+ but also by private companies+ banks andfinancial institutions and other entities such as infrastructurecompaniesutilities.

7. Diversifies Debt /unds debt fund that invests in all available types of debt securities+ issuedby entities across all industries and sectors is a properly diversified


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debt fund. diversified debt fund is less risky than a narrow-focusfund that invests in debt securities of a particular sector or industry.

9. /ocused Debt /unds

%ome debt funds have a narrow focus+ with less diversification in itsinvestment. 5"amples include sector+ speciali$ed and offshore debtfunds. #ther e"amples of focused funds include those that invest onlyin 0orporate Debentures and Bonds or only in Ta" /ree Infrastructureor Municipal Bonds.

;. Hi!h yield Debt /undsThere are funds which seek to obtain hi!her interest rates by investin!in debt instruments that are considered Ebelow investment !radeF.e.!. unk Bond /unds.

3. ssured (eturn /unds J an Indian :ariantThe %5BI permits only those funds whose sponsors have ade@uatenet-worth to offer assurance of return. e.!. MIs. Investors have somelock-in period.

4. /i"ed Term lan %eries J nother Indian :ariantThese are essentially closed-end. These plans do not !enerally offer!uaranteed returns. This scheme is for short-term investors whootherwise place money as fi"ed term bank deposits or inter corporatebonds.

5@uity /und s investors move from Debt /und cate!ory to 5@uity /unds+they face increased risk level.

7. No !uarantee returns9. Hi!h potential for !rowth of capital

Types of 5@uity /und

a) !!ressive rowth /und

Ma"imum capital appreciation

Invests in less researched or speculative shares.

:ery volatile O riskier.

b) rowth /und

rowth fund invest in companies whose earnin!s are e"pected to

(ise above avera!e rate. e.g. Technology Fund

0apital appreciation in ; J 4 years

*ess volatile then a!!ressive !rowth fund.


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c) %peciality /undThey invest in companies that meet predefined criteria.i) Sector Funds

Technolo!y /und

harmaceutical /und

/M0 /und

ii) Offshore FundsInvest in e@uities in one or more forei!n countries.

iii) Small-Cap equity Funds

Invest in shares of companies with relative lower market

0apital.

d) Diversified 5@uity /unds fund that seeks to invest only in e@uities+ e"cept for a very smallportion in li@uid money market securities+ bur is not focused on anyone or few sectors or shares+ may be termed a diversified e@uity fund.,hile e"posed to all e@uity price risks+ diversified e@uity funds seek toreduce the sector or stock specific risks throu!h diversification.

i) Equity Linked Saings Schemes! "n #ndian $ariantInvestment in these schemes entitles the investor to claim anincome ta" rebate+ but usually has a lock-in period before the endof which funds cannot be withdrawn.

e) 5@uity Inde" /undsn inde" fund tracks the performance of a specific stock marketinde". The ob&ective is to match the performance of the stock marketby trackin! an inde" that represents the overall market.

The funds invest in share that constitute the inde" and in

the same proportion on the inde".

f) :alue /unds:alue /unds try to seek out fundamentally sound companies whoseshares are currently under-prices in the market. :alue /unds will add

only those shares to their portfolios that are sellin! at low price-earnin!s ratios+ low market to book value ratios and are undervaluedby other yardsticks.

/und concentrate on future !rowth prospect havin! !ood

potential

!) 5@uity Income /unds


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There are e@uity funds that can be desi!ned to !ive the investor ahi!h level of current income alon! with some steady capitalappreciation+ investin! mainly in shares of companies with hi!hdividend yields.

Hybrid /unds J uasi 5@uityuasi Debt Many mutual funds mi" these'money market+ debt and e@uity) different types of securities in theirportfolios. %uch funds are termed Ehybrid fundsF as they have a duale@uitybond focus.

0ommodity /unds ,hile all of the debte@uitymoney market funds invest infinancial assets+ the mutual fund vehicle is suited for investment in anyother- for e"amples- physical assets.

(eal 5state /unds %peciali$ed (eal 5state /unds would invest in (eal 5state

directly+ or may fund real estate developers+ or lend to them+ or buy sharesof housin! finance companies or may even buy their securities assets.

(I%K HI5((0HA #/ M1T1* /1ND

(I%K*5:5*

*5* ND (51*T#(A 5N:I(#NM5NT

(51*T#(% IN INDI

Mone1

Mar2et

.ilt

Funds

Di3ersifiedDe4t Funds

!alanced

Funds

+quit1 Income

Funds


36/68

%5BI - The capital markets re!ulators also re!ulates the mutual funds in

India. %5BI re@uires all mutual funds to be re!istered with them. %5BIissues !uidelines for all mutual funds operations - investment+ accounts+e"penses etc.

(BI as supervisor of banks owned mutual funds - s banks in India came

under the re!ulatory &urisdiction of (BI+ bank owned funds to be undersupervision of (BI and %5BI.

(BI as supervisor of Money Market Mutual /unds - (BI has supervisory

responsibility over all entities that operate in the money markets. Hence inthe past Money Market Mutual /unds scheme of Mutual funds had to beabide by policies laid down by (BI.

(ecently+ it has been decided that Money Market Mutual /unds of re!isteredmutual funds will be re!ulated by %5BI throu!h %5BI 'Mutual /und)(e!ulations 7>>6.

Ministry of /inance - 'Mo/) ultimately supervises both the (BI O the %5BI andplays the role of ape" authority for any ma&or disputes over %5BI !uidelines.

0ompany *aw Board - Dept of 0ompany ffairs - (e!istrar of companies

M0%s of Mutual funds are companies re!istered under the companies ct7>46 and therefore answerable to re!ulatory authorities empowered by the0ompanies ct.

%tock 5"chan!es

%tock 5"chan!es are self-re!ulatory or!ani$ations supervised by %5BI.Many of closed ended funds of M0s are listed as stock e"chan!es and are

traded like shares #ffice of the ublic Trustee

Mutual fund bein! public trust is !overned by the Indian Trust ct 7


37/68

ssociation of Mutual funds of India 'M/I )

M/I is not a %(#. It has been formed in 7>>4 with the ob&ective ofrepresentin! the Mutual fund industry collectively with a view

- To promote the interests of Mutual /unds and 1nit holders.

- To set ethical+ commercial and professional standards in the industry.

- To increase public awareness of Mutual funds in the country

IN:5%T#(% (IHT ND #B*ITI#N%

(i!ht of Eroportionate Beneficial #wnershipF

(i!ht of timely services

1nit holders entitled to receive dividend warrants within ;2 days of date of

declaration1nit holders have ri!ht to payment of interest at 74 p.a. in the event of

failure on the part of Mutual fund to dispatch redemption proceeds withinten workin! days.

The 1nit holders can claim unclaimed redemption proceeds or dividends due

within a period of ; years of the due date at the prevailin! N:. fter ;years heshe will be paid at N: applicable at the end of the third year.

/or initial offers unit holders have ri!ht to e"pect allotment of units within

;2 days from the closure of mutual offer period.

(i!ht to information

(i!ht to approve chan!es in fundamental attributes of the scheme.

(i!ht to wind up a scheme if 84 of investors pass a resolution to that

effect.

(i!ht to terminate M0 if 84 of the unit holders decides so+ of course withthe prior approval of the %5BI

*e!al *imitation to Investors (i!hts

1nit Holders are not distinct from the Trust and therefore cannot sue the

Trust.

%ponsors of a Mutual fund do not have any le!al obli!ation to meet the

shortfall in case the assured return is not achieved.

But if the offer document has specifically provided such !uarantee by anamed sponsor+ the investors will have the ri!ht to sue the sponsors tomake !ood any shortfall from his returns.

rospective investors do not en&oy any ri!ht with respect to the fund M0 orany other constituent Investor 0omplaints (edressal Mechanism.

%5BI entertains receipt of complaints a!ainst Mutual /unds and intervenes

with /und Mana!ement to help investor resolve his complaints. %5BI help


38/68

the investors in the new scheme by re@uirin! the sponsor to appoint acompliance#fficer who certified that all relevant %5BI and other re!ulations have beencomplied with by the fund mana!er and sponsors.

Investors are neither shareholders in the M0 nor depositors. Hence their

investments cannot be protected by any of these companies act re!ulators.

#//5( D#01M5NT '#D)

#ffer document describes a roductL it is the most important source ofinformation for prospective investors.

M0 or the sponsor issues it.

This '#D) is the primary vehicle for the investment decision.

It is a le!al document that protects and !overns the ri!ht of an investor.

Key information memorandum 'KIM) is the abrid!ed version of offerdocument. pplication forms are issued alon! with the KIM.

%5BI has desi!ned standard format for issue of #D and KIM.

#ffer document and the KIM is valid for two years.

#Ds are to be updated+ revised and printed once in every two years.

0han!es made in between these two years are circulated amon! investorsin form of addendum or some other source of communication to investors.

0han!es made in the #D have to be filed with %5BI and should be made

available at service centers and in the offices of distributorsbrokers.

#ffer documents should contain

- %ummary information at the cover pa!e containin! name+ type of thescheme+ name of M0 and the mutual fund+ openin! and closin! dateof the offer+ price of units+ hi!hli!hts of the scheme and mostimportantly disclaimer clause by %5BI.

- !lossary of defined terms used in the offer document.

- (isk factors J standard and scheme specific

- Due dili!ence certificate to be si!ned by 0ompliance

#fficer05#Mana!in! Director,hole Time Director The above points should be in the same se@uence.

#ffer document contains fundamental attributes of the scheme J

- Type of the scheme

- Investment ob&ectivea) Investment patternb) Investment policies


39/68

- *oad and e"penses

#ffer related information J all practical information needed by investor and

a!ents to make the entrustment in the proposed scheme.

0ondensed financial information for scheme launched durin! three fiscal

years.

0onstitution of the mutual fund. bout ob&ective of the fund.

ctivities of the sponsor.

Name and addresses of the Board of TrusteesDirectors

Mana!ement of the fund

ssociate Transactions and borrowin! policies

- In case+ scheme has invested more than 94 of its net assets in !roupcompanies.

a) Business !iven to associate brokers should be in the limit of 4of sale and purchase made.

N: determination+ valuation and accountin! policies. rocedure for repurchases.

Ta" treatment of investments made in the scheme.

InvestorsG ri!hts and services under the scheme.

- ccess to information on N: computation and unit price.

- InvestorGs friendly services provided by the scheme and documentsavailable for inspection by the investors.

Brief description of investor complaint history for the last three years of

e"istin! schemes and their redressal mechanism.

ny penalties pendin! liti!ation or proceedin!s should be mentioned in the

#D to alert the investors.

(ortolio Ma%a*eme%t

,hat is ortfolio=

The set of all securities held by an investor is called his portfolio. The

portfolio may contain &ust one security. However+ since in !eneral noone puts all oneGs e!!s in one basket+ it will contain several securities.%uch a portfolio is known as diversified portfolio can consist of anycombination of shares+ bonds+ derivatives and such. It means the totalholdin!s of securities belon!in! to any person.

,hat is ortfolio Mana!ement=


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ortfolio mana!ement refers to the selection of securities and theircontinuous shiftin! in the portfolio to optimi$e return to suit theob&ective of an investor.

The followin! three ma&or activities are involved in an efficientportfolio mana!ement.

a) Identification of assets or securities+ allocation of investmentand identifyin! asset classes.

b) Decidin! about ma&or wei!htsproportion of differentassetssecurities in the portfolio.

c) %ecurity selection within the asset classes as identified earlier.

,hat are the different alternatives of investment=

There are followin! alternatives available for investment-

'7)Hi!h (isk Hi!h ain modes of investmentsa) %haresb) Derivativesc) Mutual fund

'9)/i"ed interest most secured mode of investmentsa) Debenture Bondsb) /i"ed depositc) overnment instruments '/+ Indira O :ikas atra+ National

%avin!s %chemes)d) *ife insurance

Net A##et Value NAV

Net asset value of the fund is the cumulative market value of the assets fund

net of its liabilities. In other words+ if the fund is dissolved or li@uidated+ by

sellin! off all the assets in the fund+ this is the amount that the shareholders

would collectively own. This !ives rise to the concept of net asset value per

unit+ which is the value+ represented by the ownership of one unit in the fund.


41/68

*ike a share or a stock has a market price that fluctuates everyday accordin!

to the performance of that particular scrip similarly N: fluctuates on a daily

basis. part from this when a new scheme is launched it is sold at an offer price

of (s.72unit and it is listed once all the money is collected and forms are

cleared. It is calculated simply by dividin! the net asset value of the fund by

the number of units. However+ most people refer loosely to the N: per unit as

N:+ i!norin! the per unit. ,e also abide by the same convention.

0alculation of N:

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

by the fund. #nce it is calculated+ the N: is simply the net value of assets

divided by the number of units outstandin!. The detailed methodolo!y for the

calculation of the asset value is !iven below.

NAV Curre%t A##et# P Curre%t 2ia-ilitie# Q No+ O

Out#ta%&i%* U%it#

sset value P %um of market value of sharesdebentures Q *i@uid assetscash

held+ if any Q Dividendsinterest accrued Qmount due on unpaid assets Q

5"penses accrued but not paid

O-"ective

The ob&ective of the research is to study consumer perception about mutual

funds as an investment option.


42/68

There are basically two parts of the research

0onsumer perception about mutual fund

0omparative analysis across the mutual fund sector

comparative study about the different mutual fund schemes as well as

different M0s usin! secondary data would reveal the stren!ths provide a

!uide to investors. Decision re!ardin! the investment option and portfolio to be

chosen can be easily made by !lancin! throu!h the comparative analysis

result.

U#er# o the #tu&y

sset mana!ement companies

Mutual fund distributors

Investors

(esearchers of the Mutual fund market


43/68

Metho&olo*y

Data collection was done usin! @uestionnaire administration methodolo!y.

@uestionnaire containin! both open ended and closed ended @uestions was

desi!ned.

%amplin! techni@ues followed was Stratiie& ra%&om #am!li%*. The tar!et

respondents were people havin! an annual income comin! from different

demo!raphic back!rounds. (espondentGs demo!raphic back!round such as

income+ a!e and occupation formed an important part of the research. The

response of people havin! no income source was i!nored as their response

would have been irrelevant for our study. 0ontact with respondent was made

throu!h e-mails+ telephone and direct meetin!s.

The list of respondents will be further skimmed for identifyin! leads for

investin! in %BI Mutual /und.

The sample si$e taken was =


44/68

DT %#1(05%

:arious sources of information can be broadly divided into two cate!ories.

'7) (rimary Data4 Information !athered throu!h the @uestionnaire in

this survey is called primary date.

/or collection of primary data survey method was used. It was structured

@uestionnaire which is based on the closed ended as well as open ended

@uestions+ which are obtained throu!h direct communication with the people O

fillin! up of @uestionnaires. The @uestionnaire desi!ned was to provide dual

information sharin! type+ it is seriously under taken that anyone who is

seriously under taken that anyone who is under!oin! the process+ should find

his interest or else he mi!ht show disinterest towards the pro!rammed. The

@uestionnaire was e@ually important both to the customers as well as to the

bank to drawn out its prospects.

METHOD USED FOR (RIMARB DATA4

R (er#o%al i%tervie0 o%e to o%e

R Tele!ho%ic i%tervie0 Throu*h (ho%e

= Seco%&ary Data4 The information already !athered for some other

purpose and is used in the study is called secondary Data. The secondary

data was collected throu!h the

R #nternet

R "ssistant %anager of Standard chartered &ank


45/68


46/68

%BI Dsp black rock (eliance HD/01TI others

: +A# a% i%ve#tor 0hich i%#titutio% 0oul& you !reer to i%ve#t i% %BI Dsp black rock (eliance HD/0 1TI others

5+ Ho0 much #ati#ie& have you -ee% 0ith your mutual u%& i%ve#tme%t#

/ully %atisfied %omewhat %atisfied Neutral 1nsatisfied Hi!hly1nsatisfied

5+ Give% a choice/ 0hom 0oul& you !reer to ma%a*e your !ortolio+ (eputed %hare Broker (eputed /und Mana!er Do it on your own Take advice of ac@uaintances dealin! in funds

5K+ hat 0ill -e your criteria or #electi%* a u%&ItGs ortfolio

Net sset :alueDividend Declaredrowth #ption

5:+ hat 0oul& -e the !ulli%* actor or your choiceBrand Ima!e


47/68

Brand Nameast erformanceTrust In the brand

=


48/68

Mana!er+ 74

Doctor+ ;

5n!ineer+


49/68

6+ Mo#t ea#i-le o!tio% to i%ve#t

7+ A0are%e## a-out #toc) mar)et

>+ A0are%e## a-out Mutual Fu%&


50/68

+ Fir#t -ra%& recall a# relate& to Mutual Fu%

79

;2

99

7>

6

77

%BI /ranklin (eliance HD/0 1TI #thers

K+ I%#titutio%/ i%ve#tor# !reer to i%ve#t i%+


51/68

2

4

72

74

92

94

;2

;4

32

34

%BI (eliance /ranklin HD/0 1TI #thers

:+ 3i%& o i%teractio% !ote%tial i%ve#tor# ex!ect rom irm#

!er$onnal contact

49,

tele!&onic contact

23,

online

8,

letter$-.ail$

20,

!er$onnal contact

tele!&onic contact

online

letter$-.ail$

5


52/68

0

10

20

30

40

/0

0

70

80

'i&l* Sae

Sae

eit&er Sae or Un$ae

Un$ae

'i&l* Un$ae

5=+ Rea#o% or mutual u%& i%ve#tme%t

32,

28,

4,

4,

32,

ta ee.!tion

lon1 ter. 1ain$

ti.e $a5in1

ea$e o in5e$t.ent

lo6 ri$k in5ol5e"


53/68

56+ (reerre& u%& ma%a*er

57+ Criteria or #electi%* mutual u%&

57+ Bour criteria or #electi%* a u%&

24

41

21

14

S&are +roker

Fun" anaer

n 6n

"5ice Froc:uaintance


54/68

0

10

20

30

40

/0

0

70

80

90

!ortolio ; + (ulli%* actor or your choice+

+ran" =ae12

+ran" ae2

%at%erorance

2/

>rut =n >&e+ran"37

+ran" =ae

+ran" ae

%at %erorance

>rut =n t&e +ran"


55/68

HDFC Mutual Fu%&

,hy HD/0 Mutual /und=

HD/0 Mutual /und is one of the lar!est mutual funds and well-established fundhouse in the country with consistent and above avera!e fund performanceacross cate!ories since its incorporation on December 72+ 7>>>. ,hile our paste"perience does make us a veteran+ but when it comes to investments+ we havenever believed that the e"perience is enou!h.

%A%T5MTI0 IN:5%TM5NT *N '%I)HD/0 M/ %I is similar to a (ecurrin! Deposit. 5very month on a specifieddate an amount you choose is invested in a mutual fund scheme of your choice.The dates currently available for %Is are the 5#t/ 7th/ 5


56/68

Mo%thly Savi%*# 8 hat your #avi%*# may *e%erate

%avin!s permonth'for 74 years)

Total amount invested

'(s. in *acs)

(ate of return

6.2


57/68

Sure#h?# I%ve#tme%t Ra"e#h?# I%ve#tme%t

Month N: mount 1nits mount 1nits

an-23 >.;34 7222 728.22>7 79222 797

/eb-23 >.;>> 7222 726.;>3;

Mar-23


58/68

1e%eit 6Gro0 Bour I%ve#tme%t ith Com!ou%&e& 1e%eit#

It is far better to invest a small amount of money re!ularly+ rather than save upto make one lar!e investment. This is because while you are savin! the lumpsum+ your savin!s may not earn much interest.

,ith HD/0 M/ %I+ each amount you invest !rows throu!h compoundin!benefits as well. That is+ the interest earned on your investment also earnsinterest. The followin! e"ample illustrates this.

Ima!ine Neha is 92 years old when she starts workin!. 5very month she savesand invests (s. 4+222 till she is 94 years old. The total investment made by herover 4 years is (s. ; lakhs. r&un also starts workin! when he is 92 years old.But he doesnGt invest monthly. He !ets a lar!e bonus of (s. ; lakhs at 94 anddecides to invest the entire amount.

Both of them decide not to withdraw these investments till they turn 42. t 42+NehaGs Investments have !rown to (s. 36+6


59/68

have !rown to (s. ;6+78+2


60/68

HDFC A##et Ma%a*eme%t Com!a%y 2imite&

HD/0 sset Mana!ement 0ompany *imited 'M0) was incorporated under the

0ompanies ct+ 7>46+ on December 72+ 7>>>+ and was approved to act as an

sset Mana!ement 0ompany for the Mutual /und by %5BI on une ;2+ 9222.

The sponsor HD/0 was incorporated in 7>88 as first speciali$ed housin! finance

institution in India. HD/0 provides financial assistance to individuals+ corporate

and developers for the purchase and construction of residential housin!. It also

provides property-related services+ trainin! and consultancy. In the mutual

fund venture+ HD/0 has tied up with %tandard *ife+ one of the leadin!

Insurance companies in the 1nited Kin!dom+ havin! vast e"perience in

mana!ement of funds. HD/0 has developed a stron! and dedicated team of

a!ents that market its fi"ed deposit products. These key partners would

constitute the backbone of the marketin! and distribution network of Mutual

/und and will remain a central theme of the or!ani$ational framework in times

to come.

0orpus under mana!ement (s.994;


61/68

To! 5< Fu% i% Each Cate*ory

Ra%)

Scheme Name Date NAV R#+ 2a#t >Mo%th#

7 Taurus Infrastructure /und - rowth May 99 +922>

72.9< >2.;823

9 D% Black(ock ,orld old /und -rowth

May 99 +922>

7;.9;2< 73.77

89.;>49 DB% 0hola #pportunities /und -0umulative

May 99 +922>

;7.6 83.>89;

72 %BI Ma!num %ector 1mbrella -5mer!in! Businesses /und - rowth

May 99 +922>

9;.>< 83.643
http://www.mutualfundsindia.com/fundfactsheet1.asp?sname=TR012http://www.mutualfundsindia.com/fundfactsheet1.asp?sname=DS145http://www.mutualfundsindia.com/fundfactsheet1.asp?sname=DS145http://www.mutualfundsindia.com/fundfactsheet1.asp?sname=ID114http://www.mutualfundsindia.com/fundfactsheet1.asp?sname=BE002http://www.mutualfundsindia.com/fundfactsheet1.asp?sname=ID291http://www.mutualfundsindia.com/fundfactsheet1.asp?sname=ID291http://www.mutualfundsindia.com/fundfactsheet1.asp?sname=JM071http://www.mutualfundsindia.com/fundfactsheet1.asp?sname=JM330http://www.mutualfundsindia.com/fundfactsheet1.asp?sname=SB100http://www.mutualfundsindia.com/fundfactsheet1.asp?sname=CH006http://www.mutualfundsindia.com/fundfactsheet1.asp?sname=CH006http://www.mutualfundsindia.com/fundfactsheet1.asp?sname=SB081http://www.mutualfundsindia.com/fundfactsheet1.asp?sname=SB081http://www.mutualfundsindia.com/fundfactsheet1.asp?sname=TR012http://www.mutualfundsindia.com/fundfactsheet1.asp?sname=DS145http://www.mutualfundsindia.com/fundfactsheet1.asp?sname=DS145http://www.mutualfundsindia.com/fundfactsheet1.asp?sname=ID114http://www.mutualfundsindia.com/fundfactsheet1.asp?sname=BE002http://www.mutualfundsindia.com/fundfactsheet1.asp?sname=ID291http://www.mutualfundsindia.com/fundfactsheet1.asp?sname=ID291http://www.mutualfundsindia.com/fundfactsheet1.asp?sname=JM071http://www.mutualfundsindia.com/fundfactsheet1.asp?sname=JM330http://www.mutualfundsindia.com/fundfactsheet1.asp?sname=SB100http://www.mutualfundsindia.com/fundfactsheet1.asp?sname=CH006http://www.mutualfundsindia.com/fundfactsheet1.asp?sname=CH006http://www.mutualfundsindia.com/fundfactsheet1.asp?sname=SB081http://www.mutualfundsindia.com/fundfactsheet1.asp?sname=SB081


62/68

TO( 5< O(EN ENDED FUNDS 8 (ERIOD 2AST ; MONTHS

Ra%)

Scheme Name Date NAV R#+ 2a#t ;Mo%th#

7 Taurus Infrastructure /und - rowth May 99 +922>

72.9< >

74.9;>9 >6.>

4.86 ; <

78.>;38

7.9>34

> Bank Be5% May 99 +922>

824.8>>3 8

a study on the analysis of mutual fund & product marketing including micromarketing

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