comparative analysis ulip vs mutual funds- networth.doc

8/15/2019 comparative analysis ulip vs mutual funds- networth.doc

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ABSTRACT

“A comparative study of ULIP plans VS MUTUAL FU!S.” an analysis to be done be by

S.NAVEEN KUMAR, student (MBA - IV Regula! SU"RAB#A$# INS$I$U$E %&R

'&M"U$ER S$UIES, #)ERABA. $otal In*est+ent senaio is anging, in ast

eole /ee not inteested in in*est+ent beause tee /ee no good otions a*ailable 0o

in*est+ent. No/ tee ae +any otions a*ailable 0o in*est+ent li1e li0e Insuane, Mutual

0und, E2uity +a1et, Real asset, et.

$oday eole /ant +oe se*ies and +oe etun on tei in*est+ent. So +ost o0 te

insuane o+anies ae o*iding +oe *alue 3 added se*ies /it te basi insuane

oeation. Anote otion 0o in*est+ent a*ailable is U4I"S ae o*iding good etuns. So

/ile in*esting eole tend +oe to /ods +utual 0und as tey ae o*iding +oe etuns tan

Insuane also, /it a good in*est+ent ot0olio. Mutual 0und o+anies ae o*iding +oe

li2uidity. $e o5et /as ta1en to 1no/ about, /at ae te +ain asets in U4I" in insuane

o+anies, and its US" (Uni2ue Selling "eosition!. A0te +y study and analysis I a+e to

1no/ tat +ost o0 te eole go 0o U4I" insuane oliies to o*e te is1 o0 li0e, and in*est

it in a good "ot0olio but tee is big otion o0 usto+es a*e ta1en te oliies to sa*e te

ta6es. And eole ae a/ae about te ta6 bene0its tey get 0o insuane oliies. $ee0oe,

/ile in*esting in any In*est+ent otion in*esto e1s /ete is +oney is sa0e o not,

Mutual 0unds o*ides good etuns but in*est+ents ae dietly e6osed to is1. As in U4I"

etuns ae elated to sto1 +a1et but tey ae a*ing so+e insuane bene0it and IRA

egulates te in*est+ent.Many eole ae getting te ta6 bene0its in U4I". In Mutual %und tey

a*e to in*est tei +oney in ta6 sa*ing 0unds to get te ta6 bene0it. No/ a day7s eole /ant

good etuns /itout any e00ots te lans li1e Auto+ati In*est+ent lan ae o*iding good

Bene0it 8 etuns to in*estos.

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C"T#TS

$ ITR"!UCTI"

I% "&'ective of t(e pro'ect

II% Scope ) eed "f t(e study

III% Researc( met(odolo*y

IV% Limitation of t(e pro'ect

+ LIT#RATUR# R#VI#,

I% A&out Insurance

II% A&out Mutual Funds

- Industry Profile

I% Insurance

a% !efinition

&% .istory

II% Mutual Funds

a% !efinition

&% .istory

/ Company Profile

0% AAL1SIS " ULIPs V2S Mutual Funds

3 FI!I4S ) SU44#STI"S ) C"CLUSI"

Bi&lio*rap(y55555555555555555555

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ITR"!UCTI"

ITR"!UCTI"

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About Insurance

India /it about : eetion. It /asn7t suising ten tat its

otential lay 0o?en and une6loited. $e allenge 0o i*ate insuane layes /as to ange

te establised ategoy di*e and get usto+es to e*aluate li0e insuane as an in*est+ent-

u+ otetion to

About Mutual Funds

Mutual %unds oeate as olleti*e in*est+ent *eiles ('IV! tat ools esoues by issuing

units to in*estos and olleti*ely in*ests tose esoues in a di*esi0ied ot0olio o+ising

o0 sto1s, bonds o +oney +a1et instu+ents in aodane /it te ob5eti*es +entioned in

te o00e dou+ent issued 0o te uose o0 ooling esoues. $e in*estos sae te o0it

o losses in ootion to tei in*est+ents in te 0und. $e 0ist e*e Mutual %und in India, te

Unit tust o0 India /as set u in 9@. $is /as 0ollo/ed by enty o0 M%s suoted by ubli

seto ban1s and insuane o+anies in 9@CD. $e industy /as oened 0o te i*ate layes


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in 9@@; o*iding Indian in*estos /it a boade oie. Stating /it an asset base o0 Rs. :

oe in 9@, te industy as go/n e6onentially.

$e M% industy in India is go*ened by te SEBI, /i lay no+s 0o M% and its Asset

Managing 'o+anies (AM's!. A Mutual %und is allo/ed to issue oen-ended and losed-

ended se+es unde a o++on legal stutue. Reseti*e Asset Manage+ent 'o+anies

(AM'! +anages +utual 0und se+es. i00eent business gousF 0inanial institutionsF ban1s

a*e sonsoed tese AM's, eite alone o in ollaboation /it euted intenational 0i+s.

Se*eal intenational 0unds li1e Alliane and $e+leton ae also oeating indeendently in

India. Many +oe intenational Mutual %und giants ae e6eted to o+e into Indian +a1ets

in te nea 0utue.

Ma1et su*ey lays a *ital ole in undestanding te in*est+ent atten o0 te usto+e and

te le*el o0 satis0ation. It is *ey i+otant 0o te o+any to e0o+ su ati*ities li1e

+a1et esea and su*eys at egula inte*als and aodingly 0ute lans and oliies an

be 0o+ulated. By studying te in*est+ent atten o0 te usto+es, te o+any an lan te

stategies to atue te +oe +a1et sae by o*iding te bette se*ies and usto+i?ed

lans.

CONCEPT OF MUTUAL FUNDS

A +utual 0und is an in*est+ent *eile /i allo/s in*estos /it si+ila (one ould say

+utual! in*est+ent ob5eti*es, to ool tei esoues and teeby aie*e eono+ies o0 sale

and di*esi0iation in tei in*esting. Eono+ies o0 Sale +ean lo/e osts on a e unit basis

by doing tings Gin bul1G /i seads 0i6ed osts o*e geate *olu+e. A +utual 0und

aie*es lo/e e unit osts 0o o0essional +oney +anage+ent and 0o tansation ages,

tan s+all in*estos ould aie*e on tei o/n. $is an inease etun to te in*esto.

i*esi0iation is 5ust anote /ay o0 saying Gon7t ut all you eggs in one bas1et.G A +utual

0und allo/s its in*estos to a s+all eentage o0 +any di00eent in*est+ents. So in a /ell-

di*esi0ied +utual 0und no one atiula in*est+ent do+inates its e0o+ane. "oo esults

0o+ so+e in*est+ents ae li1ely to be o00set by good esults 0o+ ote in*est+ents.

$ee0oe, te unit *alue o0 a +utual 0und /ill not 0lutuate as saly as te *alue o0 any one

o0 its in*est+ents. $is an edue is1 to te in*esto.


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A +utual 0und is te ideal in*est+ent *eile 0o today7s o+le6 and +oden 0inanial

senaio. Ma1ets 0o e2uity saes, bonds and ote 0i6ed ino+e instu+ents, eal estate,

dei*ati*es and ote assets a*e beo+e +atue and in0o+ation di*en. "ie anges in

tese assets ae di*en by global e*ents ouing in 0aa/ay laes. A tyial indi*idual is

unli1ely to a*e te 1no/ledge, s1ills, inlination and ti+e to 1ee ta1 o0 e*ents, undestand

tei i+liations and at seedily. An indi*idual also 0inds it di00iult to 1ee ta1 o0

o/nesi o0 is assets, in*est+ents, bo1eage dues and ban1 tansations et.

A +utual 0und is te ans/e to all tese situations. It aoints o0essionally 2uali0ied and

e6eiened sta00 tat +anages ea o0 tese 0untions on a 0ull ti+e basis. $e lage ool o0

+oney olleted in te 0und allo/s it to ie su sta00 at a *ey lo/ ost to ea in*esto. In

e00et, te +utual 0und *eile e6loits eono+ies o0 sale in all tee aeas - esea,

in*est+ents and tansation oessing. Hile te onet o0 indi*iduals o+ing togete to

in*est +oney olleti*ely is not ne/, te +utual 0und in its esent 0o+ is a :


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in*est+ent ob5eti*e. It also ies anote entity to te ustodian o0 te assets o0 te 0unds and

eas a tid one to andle egisty /o1.

In te Indian onte6t, te sonsos o+ote te Asset Manage+ent 'o+any also, in /i it

olds a +a5oity sta1e. In +any ases a sonso an old a 9


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Mutual fund Investment Flo67c(art

TYPES OF MUTUAL FUNDS

Most +utual 0unds ae oen-ended 0unds. $is +eans you an subsibe to one at any ti+e o0

te yea. &en-ended 0unds ae not listed on sto1 e6anges.

A on*ese set o0 ules aly to losed ended 0unds. 'losed ended 0unds a*e a 0i6ed nu+be

o0 saes, ae oen 0o subsition duing a sei0ied eiod and oeate 0o a 0i6ed eiod o0ti+e. %o e6a+le, 0i*e yeas J and so, te nu+be o0 buyes and selles ae e6at J so+eone

/ould a*e to sell 0o you to be able to buy. 'losed ended 0unds ae geneally listed on sto1

e6anges.

Mutual 0unds an also be boadly lassi0ied into 0ou distinguisable tyes>

#8uity funds

!e&t or Income funds

Balanced funds

Money Mar9et funds

!e&t or Income Funds

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$e ai+ o0 debt o ino+e 0unds is to +a1e egula ay+ents to its in*estos, altoug

di*idends an be ein*ested to buy +oe units o0 te 0und. $o o*ide you /it a steady

ino+e, tese 0unds geneally in*est in 0i6ed ino+e seuities su as bonds, ooate

debentues, go*en+ent seuities (gilts! and +oney +a1et instu+ents. &otunities 0o

aital aeiation ae li+ited and te do/nside is

tat as inteest ates 0lutuate, te net asset *alue o NAV o0 te 0und ould 0ollo/ suit 3 i0

inteest ates 0all, te NAV is

li1ely to inease and *ie *esa. $ee is also a is1 tat a o+any issuing a bond +ay de0ault

on its ay+ent, i0 it is not 0inanially ealty. #o/e*e, i0 te 0und in*ests in go*en+ent

seuities tee is little is1 o0 te go*en+ent de0aulting on its ay+ent.

#8uity Funds

E2uity 0unds (o0ten desibed as go/t 0unds! ai+s to o*ide aital go/t by in*esting in

te saes o0 indi*idual o+anies. eending on te 0und7s ob5eti*e, tis ould ange 0o+

lage blue-i ogani?ations to s+all and ne/ businesses. Any di*idends eei*ed by te 0und

an be ein*ested by te 0und +anage to o*ide 0ute go/t o aid to in*estos. Bot is1

and etuns ae ig but tey

ould be a good in*est+ent i0 you a*e a long-te+ eseti*e and an stay in*ested 0o at

least 0i*e yeas.

Balanced funds 7 T(e &est of &ot( t(e 6orlds

As te na+e suggests, tese 0unds ai+ 0o balane, so tey ae +ade u o0 a +i6tue o0 e2uities

and debt instu+ents. $ey +at te goals o0 in*estos /o see1 to go/ tei aital and get

egula ino+e, /ile etaining elati*ely lo/ is1.

$e debt o bond ele+ent o0 te 0und o*ides a le*el o0 ino+e and ats as te sa0ety net

duing dyna+i eiods in te +a1et, /ile e2uities o*ide te otential 0o aital

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aeiation.

Balaned 0unds ould be suitable 0o in*estos /o ae loo1ing 0o +odeate aital

aeiation.

Money mar9et funds

Money +a1et o li2uid 0unds ae an aealing altenati*e to ban1 deosits beause tey ai+ to

o*ide stability, li2uidity, aital ese*ation and sligtly ige inteest ates tan ban1

aounts. Hen you in*est in a +oney +a1et 0und, te 0und +anage in*ests in as7 assets

su as teasuy bills, eti0iates o0 deosit and o++eial ae. Retuns on tese

0unds 0lutuate +u less o+aed to ote 0unds, but tey ae not guaanteed. $ey ae

aoiate 0o ooate and indi*idual in*estos /o /is to a1 tei sulus +oney in a

0und 0o a sot eiod.

CLASSIFICATION OF MUTUAL FUNDS

$ee ae *aied /ays in /i 0unds an be lassi0ied. %o+ te in*estos eseti*e 0unds

ae usually lassi0ied in te+s>

C o n s t i t u t i o n S t r u c t u r e

C o l l e c t i o n e n t r y

o r e : i t c ( a r * e s

f r o m i n v e s t o r s

C l o s e ; e n d e d L o a d f u n d s

" p e n ; e n d e d o 7 L o a d f u n d s

I n t e r v a l f u n d s o 7 L o a d f u n d s

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Unde ea boad lassi0iation, tee ae se*eal tyes o0 0unds, deending on te basis o0 te

natue o0 tei ot0olio. E*ey 0und as uni2ue is1-o0iles tat ae dete+ined by its

ot0olio.

"pen7ended Funds

An oen-end 0und is one tat as units a*ailable 0o sale and euase at all te ti+es at a

ie based on te NAV e unit. Su 0unds ae oen 0o subsition te /ole yea.

'aitali?ationFous is ontinuously anging. %und si?e and te total in*est+ent a+ount

goes u i0 +oe ne/ subsition o+es in 0o+ ne/ in*estos tan

ede+tion by e6iting in*estos, te 0und sin1s /en ede+tion o0 units e6eeds 0es

subsition. $ee7s no 0i6ed +atuity.

Saes o units o0 su 0unds ae no+ally not taded on te sto1 e6ange but ae

euased by te 0und at announed ates. $ey o*ide bette li2uidity e*en toug not

listed as in*estos an any ti+e aoa +utual 0unds 0o sale o0 su units.

i*idend ein*est+ent otion is also a*ailable in ase o0 su 0unds. Sine tee is al/ays a

ossibility o0 /itda/als, +anage+ent o0 su 0unds beo+es +oe tedious as +anages a*e

to /o1 0o+ ises to ises. 'ises +ay be t/o 0onts>

Une6eted /itda/als e2uie 0unds to +aintain a ig le*el o0 as a*ailable e*ey ti+e

i+lying teeby idle as.

By *itue o0 tis situation su 0unds +ay 0ail to gab 0a*oable ootunities. %ute to

+at 2ui1 as ay+ents, 0unds annot a*e +ating eali?ation 0o+ tei ot0olio due to

intiaies o0 te sto1 +a1et.

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Close7ended Funds

'lose end 0unds an be subsibed to, only duing te initial ubli o00e. $eea0te te units

o0 su 0unds an be bougt and sold on te sto1 e6ange on /i tey ae listed toug a

bo1e. Su 0unds a*e a stiulated +atuity eiod. $e duation o0 su 0unds is geneally :

to 9 yeas.

$e 0unds units +ay be taded at te disount o e+iu+ to NAV based on te in*estos7

eetion about te 0unds 0utue e0o+ane and ote +a1et 0atos a00eting te de+and

0o a suly o0 te 0unds units. An i+otant oint to note ee is tat te nu+be o0

outstanding units o0 su 0und doesn7t *ay on aount o0 tading in te 0unds units at te sto1

e6ange. %o+ +anage+ent oint o0 *ie/, +anaging lose ended se+es is o+aati*ely

easy sine 0und +anages an e*ol*e and adot long te+ in*est+ent stategies deending on

te li0e o0 te se+e.

Interval Funds

Inte*al 0unds o+bine te 0eatues o0 oen-ended and lose-ended se+es. $ey ae oen 0o

sale o ede+tion duing e-dete+ined inte*als at NAV elated ies.

Load Funds

Ma1eting o0 ne/ +utual 0und se+e in*ol*es initial e6enses. 'ages +ade to te in*esto

to o*e distibutionFsalesF+a1eting e6enses ae o0ten alled “loads”. $ese e6enses +ay be

eo*eed 0o+ te in*estos in di00eent /ays at di00eent ti+es.

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$yially enty and e6it loads ange 0o+ 9= to :=. $ee usual /ays in /i 0unds sales

e6enses +ay be eo*eed 0o+ te in*esto ae>

At te ti+e o0 enty into te 0und, by deduting a sei0i a+ount 0o+ is initial e6enses.

$e load ages to te in*esto at te ti+e o0 is enty into te se+e ae alled a “0ont-end

o enty load”.

By aging te 0undFse+e /it a 0i6ed a+ount ea yea, duing te stated nu+be o0 yeas.

$e load a+ount aged to te se+e o*e a eiod o0 ti+e is alled “de0eed load”.

At te ti+e o0 in*estos e6it 0o+ te se+e, by deduting a sei0ied a+ount 0o+ te

ede+tion eedes ayable to te in*esto. $e load tat te in*estos ay at te ti+e o0 is

e6it is alled a “ba1-end o e6it load”

So+e 0unds +ay also age di00eent a+ounts o0 load to te in*esto deending uon o/

+any yeas te in*estos as stayed /it te 0und, te longe te in*esto stays /it te 0und

less te a+ount o0 e6it load, e is aged. $is is alled as ontingent de0eed sales

'age. $e se+es NAV /ould e0let te net a+ount a0te te de0eed load.

4oads ae aged not only by an oen-ended 0und but e*en a lose-ended 0und an age a

load to o*e te initial issue e6ense.

o7Load Funds

%unds tat +a1e no su ages o loads 0o sales e6enses ae alled as “no load 0unds”.

OPTIONS AVAILABLE TO INVESTORS

Ea lan o0 e*ey +utual 0und as tee otions 3 o/t, i*idend and di*idend

ein*est+ent. Seaate NAV ae alulated 0o ea se+e.

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! i v i d e n d " p t i o n

Unde te di*idend lan di*idend ae usually delaed on 2uately o annual basis. Mutual

0und ese*es te igt to ange te 0e2ueny o0 di*idend delaed.

! i v i d e n d r e i n v e s t m e n t o p t i o n

Instead o0 e+ittanes o0 units toug ayouts, Units olde +ay oose to in*est te entie

di*idend in additional units o0 te se+e at NAV elated ies o0 te ne6t /o1ing day a0te

te eod date. No sales o enty load is le*ied on di*idend ein*est.

! i v i d e n d P a y o u t o p t i o n

i*idend delaed by te 0und +anage is e+itted to te in*estos and NAV is edued by tat

*alue.

4 r o 6 t ( " p t i o n

Unde tis lan etuns aue to te in*esto in te 0o+ o0 aital aeiation as e0leted in

te NAV. $e se+e /ill not delae te di*idend unde te o/t lan and in*estos /o

ot 0o tis lan

/ill not eei*e any ino+e 0o+ te se+e. Instead o0 ino+e eaned on tei units /ill

e+ain in*ested /itin te se+e and /ill be e0leted in te NAV.

Calculaton O! NAV

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PR"!UCTPR"FIL#

LIFE INSURANCE

,(at is Life Insurance<

4i0e insuane is an agee+ent bet/een you (te insued! and an insue. Unde te te+s o0 a

li0e insuane ontat, te insue o+ises to ay a etain su+ to so+eone (a bene0iiay!

/en you die, in e6ange 0o you e+iu+ ay+ents.

Insuane is te otetion against 0inanial loss aising in te aening o0 an une6eted

e*ent.

,(y S(ould 1ou Ta9e Insurance<

Insuane is desied to sa0eguad onesel0 and one7s 0a+ily against ossible losses on aount o0

is1s and eils .It o*ides 0inanial o+ensation 0o te losses su00eed due te aening o0

te un0oeseen e*ents.

li0e insuane oeeds is to ay o00 any debts you lea*e beind. %o e6a+le, +otgages, a

loans, +edial bills, and edit ad debts ae o0ten le0t unaid /en so+eone dies. $ese

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obligations +ust be aid 0o+ te assets le0t beind. $is an delete te esoues tat you

0a+ily needs. 4i0e insuane an be used to ay o00 tese debts, lea*ing you ote assets intat

0o you 0a+ily to use.

4i0e insuane o*ides li2uidity to you estate. Hen you die, you +ay lea*e so+e li2uid

assets (su as as, 's, and sa*ings bonds!, and so+e illi2uid assets (su as eal estate, an

auto+obile, and sto1s!. )ou li2uid assets +ay not be enoug to ay all te debts tat you

lea*e beind, lus all te e6enses tat aise beause o0 you deat (su as 0uneal e6enses

and estate ta6es!. )ou illi2uid assets +ay a*e to be sold in ode to +eet tese obligations

/en tey o+e due. $is +ay ause a 0inanial loss i0 te assets +ust be sold ealy in ode

to get te +oney on ti+e. 4i0e insuane an a*et tis situation, beause te oeeds ae

a*ailable al+ost i++ediately uon you deat.

4i0e insuane eates an estate 0o you eis. A0te you debts and e6enses ae aid, tee

+ay not be +u le0t o*e 0o you 0a+ily. 4i0e insuane an auto+atially o*ide assets 0o

te+ a0te you deat.

4i0e insuane is a geat /ay to gi*e to aity /en you die. )ou +ay a*e al/ays ad a geat

ilantoi desie, but not te +eans to +a1e it a eality. 4i0e insuane an do tat 0o you.

4i0e insuane an be a itial o+onent 0o seiali?ed business aliations, su as

0unding a buy-sell agee+ent. Unde a buy-sell agee+ent, li0e insuane an be used to

o*ide as 0o te uase o0 a deeased o/neLs inteest in te business.

%inally, li0e insuane an be an in*est+ent *eile. So+e tyes o0 li0e insuane oliies +ay

atually +a1e +oney 0o you, as /ell as o*ide te bene0its desibed abo*e. $is an el

you /it long-te+ 0inanial goals.

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TYPES OF LIFE INSURANCE

9. $e+ Insuane "oliy

:. Hole 4i0e "oliy

;. Endo/+ent "oliy

. Money Ba1 "oliy

. Annuities and "ension

Most o0 te oduts o00eed by Indian li0e insues ae de*eloed and stutued aound tese

GbasiG oliies and ae usually an e6tension o a o+bination o0 tese oliies. So, /at ae

tese oliies and o/ do tey di00e 0o+ ea ote is e6lained in detail.

Term Insurance Policy

A te+ insuane oliy is a ue is1 o*e 0o a sei0ied eiod o0 ti+e. Hat tis +eans is

tat te su+ assued is ayable only i0 te oliyolde dies /itin te oliy te+. %o

instane, i0 a eson buys Rs :< la1s oliy 0o 9-yeas, is 0a+ily is entitled to te +oney i0 e dies /itin tat 9-yea eiod.

I0 e su*i*es te 9-yea eiod, ten e is not entitled to any ay+ent te insuane

o+any 1ees te entie e+iu+ aid duing te 9-yea eiod.

So, tee is no ele+ent o0 sa*ings o in*est+ent in su a oliy. It is a 9


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,(ole Life Policy

As te na+e suggests, a Hole 4i0e "oliy is an insuane o*e against deat, ieseti*e o0

/en it aens.

Unde tis lan, te oliyolde ays egula e+iu+s until is deat, 0ollo/ing /i te

+oney is anded o*e to is 0a+ily.

$is oliy, o/e*e, 0ails to addess te additional needs o0 te insued duing is ost-

etie+ent yeas. It doesnLt ta1e into aount a esonLs ineasing needs eite. Hile te

insued buys te oliy at a young age, is e2uie+ents inease o*e ti+e. By te ti+e e

dies, te *alue o0 te su+ assued is too lo/ to +eet is 0a+ilyLs needs. As a esult o0 tese

da/ba1s, insuane 0i+s no/ o00e eite a +odi0ied Hole 4i0e "oliy o o+bine in /it

anote tye o0 oliy.

#ndo6ment Policy

'o+bining is1 o*e /it 0inanial sa*ings, endo/+ent oliies is te +ost oula oliies

in te /old o0 li0e insuane.

In an Endo/+ent "oliy, te su+ assued is ayable e*en i0 te insued su*i*es te oliy

te+.

I0 te insued dies duing te tenue o0 te oliy, te insuane 0i+ as to ay te su+

assued 5ust as any ote ue is1 o*e.

A ue endo/+ent oliy is also a 0o+ o0 0inanial sa*ing, /eeby i0 te eson o*eed

e+ains ali*e beyond te tenue o0 te oliy, e gets ba1 te su+ assued /it so+e ote

in*est+ent bene0its.

In addition to te basi oliy, insues o00e *aious bene0its su as double endo/+ent and

+aiageF eduation endo/+ent lans. $e ost o0 su a oliy is sligtly ige but /ot its

*alue.

9C


19/72

Money Bac9 Policy

$ese oliies ae stutued to o*ide su+s e2uied as antiiated e6enses (+aiage,

eduation, et! o*e a stiulated eiod o0 ti+e. Hit in0lation beo+ing a big issue, o+anies

a*e eali?ed tat so+eti+es te +oney *alue o0 te oliy is eoded. $at is /y /it-o0it

oliies ae also being intodued to o00set so+e o0 te losses inued on aount o0 in0lation.

A otion o0 te su+ assued is ayable at egula inte*als. &n su*i*al te e+ainde o0 te

su+ assued is ayable.

In ase o0 deat, te 0ull su+ assued is ayable to te insued.

$e e+iu+ is ayable 0o a atiula eiod o0 ti+e.

Annuities and Pension

In an annuity, te insue agees to ay te insued a stiulated su+ o0 +oney eiodially. $e

uose o0 an annuity is to otet against is1 as /ell as o*ide +oney in te 0o+ o0 ension

at egula inte*als. &*e te yeas, insues a*e added *aious 0eatues to basi insuane

oliies in ode to addess sei0i needs o0 a oss setion o0 eole

ULIP AS A PRODUCT

,"R=I4 "F ULIPs

Hen you deide te a+ount o0 e+iu+ to be aid and te a+ount o0 li0e o*e you /ant

0o+ te ULIP, te insue deduts so+e otion o0 te ULIP e+iu+ u0ont. $is otion is

1no/n as te "e+iu+ Alloation age, and *aies 0o+ odut to odut. $e est o0 te

e+iu+ is in*ested in te 0und o +i6tue o0 0unds osen by you. Motality ages and

ULIP ad+inistation ages ae teea0te deduted on a eiodi (+ostly +ontly! basis by

anellation o0 units, /eeas te ULIP 0und +anage+ent ages ae ad5usted 0o+ NAV on a

daily basis.

Sine te 0und o0 you oie as an undelying in*est+ent 3 eite in e2uity o debt o a

o+bination o0 te t/o 3 you 0und *alue /ill e0let te e0o+ane o0 te undelying asset

lasses. At te ti+e o0 +atuity o0 you lan, you ae entitled to eei*e te 0und *alue as at te

ti+e o0 +atuity. $e ie-at belo/ illustates te slit o0 you ULIP e+iu+>

9@


20/72

A +utual 0und is te Lsa0ety o0 te inialL, lus te added ad*antage o0 aital aeiation

togete /it te ino+e eaned in te 0o+ o0 inteest o di*idend. Insuane is a o*ision

against is1

and it is a de*ie /it /i +an ties to otet i+sel0 0o+ is1 in li0e. $e eent

de*elo+ent in te 0inanial inno*ation is Unit Lin9 Insurance Policy >ULIP?, /i o*este onet o0 +utual 0und and insuane.

A Unit 4in1 Insuane "oliy (U4I"! is one in /i te usto+e is o*ided /it a li0e

insuane o*e and te e+iu+ aid is in*ested in eite debt o e2uity oduts o a

o+bination o0 te t/o. In ote /ods, it enables te buye to seue so+e otetion 0o is

0a+ily in te e*ent o0 is unti+ely deat and at te sa+e ti+e o*ides i+ an ootunity to

ean a etun on is e+iu+ aid. In te e*ent o0 te insued esonLs unti+ely deat, is

no+inees /ould no+ally eei*e an a+ount tat is te ige o0 te su+ assued o te *alue

o0 te units (in*est+ents!. $o ut it si+ly, U4I" atte+ts to 0ul0ill in*est+ent needs o0 an

in*esto /it otetionFinsuane needs o0 an insuane see1e. It sa*es te in*estoFinsuane-

see1e te assles o0 +anaging and ta1ing a ot0olio o oduts.

:


21/72

Moe i+otantly U4I"s o00e in*estos te ootunity to selet a odut /i +ates

tei is1 o0ile 0o e6a+le an indi*idual /it a ig is1 aetite an sun taditional

endo/+ent lans (/i in*est about C= o0 tei 0unds in te debt instu+ents! in 0a*ou o0

a U4I" /i in*ests its entie ous in e2uities.

In taditional insuane oduts, te su+ assued is te one stone in U4I"s e+iu+

ay+ents is te 1ey o+onent. U4I"s ae e+a1ably ali1e to +utual 0unds in te+s o0 tei

stutue and 0untioning e+iu+ ay+ents +ade ae on*eted into units and a net asset

*alue (NAV! is delaed 0o te sa+e

S#RVICI4 A UIT LI=#! PLA

• Sin*le Premium@ $e oliy olde is e2uied to ay te entie e+iu+

a+ount as a lu+ su+ at te beginning o0 te oliy te+.

• Re*ular Premium Payment >annually semi7annually or mont(ly?@ $e

oliy olde as to ay te e-dete+ined e+iu+ a+ount eiodially

i.e. annually, se+i annually o +ontly, deending uon te e+iu+

ay+ent te+ oted 0o.

• um&er of Premium Payin* 1ears@ $is deends on te te+ o0 te

oliy tat you a*e osen. In +ost ases, te oliy te+ and te nu+be

o0 e+iu+ aying yeas (in ase o0 egula e+iu+s! ae te sa+e.

#o/e*e, so+e oliies gi*e te insued te otion o0 oosing te

nu+be o0 e+iu+ aying yeas.

V#RIFICATI"S B#F"R# SI4I4 T.# PR"P"SAL

&ne as to *ei0y te approved sales &roc(ure 0o

•all te ages dedutible unde te oliy

• ay+ent on e+atue suende

• 0eatues and bene0its

• li+itations and e6lusions

• lasation and its onse2uenes

• ote dislosues

:9


22/72

• Illustation o5eting bene0its ayable in t/o senaios o0 = and 9


23/72

0und *alue and sub5et to oteonditions.

in*est+ent.

S6itc(in* options@ A*ailable. )ou an angeyou in*est+ent 0und deision by s/iting bet/een te 0undsas being o00eed by te oliy.

Not a*ailable sine te tein*est+ent deision is ta1en by teinsuane o+any.

C(ar*es structure@ Unit 4in1ed "lans sei0y teages. unde *aious eads. $ese lans do not sei0y teages in*ol*ed.

Sin*le premium Top7up A*ailable. $e single e+iu+to-u 0aility allo/s you toin*est an e6ta a+ount o*eand abo*e you egula e+iu+s in you unit lin1ed lan.

$e to-u 0aility is not a*ailable.

Benefit Snaps(ot • Unit 4in1ed "lans

gi*e you 0le6ibility o0in*est+ent

• $ey allo/ you to

ta1 you ot0olio.

•Unit 4in1ed "lanso00e te bene0it o0 asingle e+iu+ to u/i allo/s you toin*est ad oadditional a+ounts

• Unit 4in1ed "lans

allo/ atial/itda/als, sub5etto onditions ands/iting bet/een0unds by aying so+eages, i0 neessay.

• Unit 4in1ed "lans

gi*e you te otion o0a e+iu+ *aation.

• 'on*entional lans o00e

0i6ed e+iu+s lin1ed tote su+ assued.

• $e +atuity bene0its 0o

tese lans inlude te su+assued lus bonuses, i0aliable

C"MPARIS" B#T,## UIT LI=#! PLAS A! MUTUAL FU!S

Unit Lin9ed Insurance Plans Mutual funds

Type

!escription Unit 4in1ed "lans e0e to Unit 4in1ed

Insuane "lans o00eed by insuaneo+anies. $ese lans allo/ in*estosto diet at o0 tei e+iu+s intodi00eent tyes o0 0unds (e2uity, debt,+oney +a1et, ybid et.!

A +utual 0und ools te +oney 0o+

in*estos and uses it to in*est in*aious seuities aoding to a e-sei0ied in*est+ent ob5eti*e.

=ey Features

:;


24/72

"&'ective@ Unit 4in1ed "lans ae long te+ lanso00eing you a dual bene0it o0 insuaneand in*est+ent.

Mutual 0unds ae ideal in*est+enttool 0o te sot to +ediu+ te+.

Ta: Benefit@ All Unit 4in1ed "lans o00e ta6 bene0itsunde setion C


25/72

• Fund mana*ement c(ar*es@ $ese ages ae to/ads +eeting e6enses

elated to +anaging te 0und. $is is aged as a eentage o0 te 0und7s

*alue and is deduted be0oe ai*ing at te net asset *alue o0 te 0und.

• S6itc( c(ar*es@ )ou an s/it bet/een te 0unds a*ailable to suit you

anging needs and goals. In a oliy yea, a 0i6ed nu+be o0 sus/ites ae a*ailable 0ee o0 ost. Subse2uent to tis, ea s/it /ould

attat a etain age. $ese ages ae deduted by anelling units

ootionately 0o+ ea o0 te 0unds you a*e osen.

• Surrender c(ar*es@ $ese ages ae le*ied 0o e+atue enas+ent o0

units. $ey ae aged as a eentage o0 te 0und *alue and deend on

te oliy yea in /i te oliy as been suendeed.

• Mortality C(ar*es@ eending uon te age, and te a+ount o0 o*e,

tese ages ae le*ied to/ads o*iding a deat o*e to te insued.• Premium Allocation C(ar*e@ $is age is deduted as a 0i6ed

eentage o0 te e+iu+ eei*ed, and is usually aged at a ige ate

in te initial yeas o0 a oliy. $is age *aies deending uon /ete

te oliy is a single e+iu+ o egula e+iu+ oliy, te si?e o0 te

e+iu+, e+iu+ 0e2ueny and ay+ent +ode.

• Partial ,it(dra6al C(ar*es@ 4u+ su+ /itda/als ae allo/ed 0o+

te 0und a0te te lase o0 tee yeas o0 te oliy te+ and sub5et to e-

sei0ied onditions. #o/e*e, su /itda/als attat ages, as

+entioned in te eseti*e oliy boues.

T1P#S "F ULIPS

:


26/72

&ne o0 te big ad*antages tat a ULIP o00es is tat /ate*e be you sei0i

0inanial ob5eti*e, anes ae tat tee is a ULIP /i is 5ust igt 0o you.

$e 0igue belo/ gi*es a geneal guide to te di00eent goals tat eole a*e at*aious age-gous and tus, *aious li0e-stages.

eending on you sei0i li0e-stage and te oesonding goal, tee is aULIP /i an el you lan 0o it.

9. "e+iu+s aid an be single, egula o *aiable. $e ay+ent eiod too an

be egula o *aiable. $e is1 o*e an be ineased o deeased.

:. As in all insuane oliies, te is1 age (+otality ate! *aies /it age.

;. $e +atuity bene0it is not tyially a 0i6ed a+ount and te +atuity eiod an

be ad*aned o e6tended.

:


27/72

:. In*est+ents an be +ade in gilt 0unds, balaned 0unds, +oney +a1et 0unds, go/t

0unds o bonds.

. $e oliyolde an s/it bet/een se+es, 0o instane, balaned to debt o gilt to

e2uity, et.

. $e +atuity bene0it is te net asset *alue o0 te units.

D. $e osts in U4I" ae ige beause tee is a li0e insuane o+onent in it as /ell,

in addition to te in*est+ent o+onent.

C. Insuane o+anies a*e te disetion to deide on tei in*est+ent ot0olios.

@. $ey ae si+le, lea, and easy to undestand.

9


28/72

di00eene bet/een on*entional sa*ings-based insuane lans li1e endo/+ent and U4I"s is

te in*est+ent +andate- /ile U4I"s an in*est u to 9FMC?

$ese ages ae le*ied by te insuane o+any to +eet te e6enses inued on +anaging

te U4I" in*est+ents. A otion o0 U4I" e+iu+s ae in*ested in e2uities, bonds, g-ses and

:C


29/72

+oney +a1et instu+ents. Managing tese in*est+ents inus a 0und +anage+ent age,

si+ila to /at +utual 0unds inu on tei in*est+ents. %M's di00e aoss in*est+ent otions

li1e aggessi*e, balaned and debt U4I"s usually a ige e2uity otion tanslates into ige

%M'.

Aat 0o+ te tee e6ense ategoies +entioned abo*e, indi*iduals +ay also a*e to inu

etain e6enses, /i ae i+aily otional7 in natue- te e6enses /ill be inued i0

etain oies tat ae +ade a*ailable to indi*iduals ae e6eised.

a? S6itc(in* c(ar*es

Indi*iduals ae allo/ed to s/it tei U4I" otions. %o e6a+le, an indi*idual an s/it is

0und +oney 0o+ 9


30/72

Anote eason is also beause te e6enses ae le*ied on te annual e+iu+ a+ount, /i

stays te sa+e tougout te tenue. $ee0oe, te e6enses do not a*e any i+at on te

etuns geneated by te ous.

%und +anage+ent ages also a*e an e00et on te etuns. %M' is le*ied on te ous,

/i 1ees 0lutuating o*e te tenue.

$e etuns also deend to a lage e6tent on o/ /ell te insuane o+any +anages te

in*est+ent. Indi*iduals tee0oe, need to bea in +ind tat e6enses ae an i+otant *aiable

/ile e*aluating U4I"s aoss li0e insuane o+anies. $ey a*e te otential to +a1e a

onsideable di00eene to te etuns geneated o*e a eiod o0 ti+e.

Insurance Re#ulator& and De'elo%(ent

Aut(ority Act $ >IR!A?@

&n te eo++endation o0 Malota o++ittee, and IRA at assed by Indian alia+ent

in9@@;. Its +ain ai+ is to ati*ate an insuane egulatoy aaatus essential 0o oe+onitoing and ontol o0 te insuane industy. ue to tis at se*eal Indian i*ate

o+anies a*e 5oined /it 0oeign atnes. In tis eono+i e0o+ oess te insuane

o+any /ill boost te soio eono+i de*elo+ent oess. $e uge a+ount o0 0unds tat

/ill be at disosal o0 insuane o+anies /ill be dieted as desied a*enues li1e ousing,

sa0e-din1ing /ate, eletiity, i+ay eduation and in0astutue. $e go/t o0 te debt

+a1et /ill also get a boost. Abo*e all te oliy olde /ill get bette iing o0 oduts

0o+ o+etiti*e insuane o+anies.

'o+osition o0 Autoity unde IRA At 9@@@>

As e te setion o0 IRA at 9@@@ Insuane Regulatoy e*elo+ent Autoity At

(IRA!, /i /as onstituted by an at o0 alia+ent sei0y te o+osition o0 autoity.

;


31/72

$e autoity is ten-+e+be tea+ onsisting o0>

a ai+an

0i*e /ole-ti+e +e+bes

0ou at ti+e +e+bes

,it( t(e openin* of t(e Insurance industry India stands to *ain 6it( t(e follo6in* ma'or

advanta*es@

lobali?ation /ill o*ide i+o*ed ootunities to te usto+e 0o bette oduts,

/it +oe easonable and a00odable iing.

$e usto+e /ill get 2ui1e and bette se*iing.

It /ill enane te Sa*ings Rate 0o s+alle in*estos.

4ong-te+ 0unds 0o in0astutue de*elo+ent /ill be a*ailable to te ounty.

It /ill seue 0o India lage in0lo/s o0 0oeign aital needed to sustain ou "

go/t.

T(e Title

$e o5et is elated to In*est+ent stategy and o+aati*e analysis bet/een U4I" odut

and Mutual %unds

;9


32/72

"&'ectives of t(e study@ 9.$e o5et in*ol*es Study o0 di00eent in*est+ents a*ailable in te

+a1et and si+ultaneously ounseling te in*estos about te best 0unds and in*est+ent

otions a*ailable and to +a1e te+ a/ae about te is1 and etun aa+etes o0 tose

in*est+ent instu+ents.

:. In tis o5et, I a*e +ade e00ots to gi*e te o+aati*e analysis bet/een te U4I"

oduts and Mutual %unds. $is "o5et /ill igligt te di00eene bet/een te In*est+ents.

;. 4ast but not te least e6tensi*e esea /as done on o+ing u /it in*est+ent guidelines

to +a1e it easie 0o otential lients to in*est tei +oney aoding to tei o/n /ill.

. And analy?ing /o1ing o0 +utual 0und and /o1ing o0 U4I", /it eal ti+e e6a+les.

SC"P# "F T.# STU!1@ $e +a5o oduts in*ol*ed in 0inanial lanning and 0inanial

odut distibution ae MU$UA4 %UNS, U4I", E"&SI$S, and INSURAN'E. And te

o5et +ainly soing to stitly t/o aeas i.e. MU$UA4 %UNS 8 U4I"S. Unde tis study

in*est+ents elating to &en-Ended EUI$) o/t %und o0 Mutual %unds and R&H$#

0und o0 U4I"s ae ta1en into aount. $e teoetial at o0 te study inlude te 0ollo/ing

onets>-

'aateistis o0 Mutual %unds 8 U4I"

Ad*antagesF isad*antages o0 Mutual %unds, U4I"

'alulation o0Net Asset Value (NAV!.

In*est+ent "oess in M% VS U4I"

Ris1 etun gid o0 Mutual %unds 8 U4I"

SEBI 8 IRA guidelines.

M#T."!"L"41 "F T.# STU!1

All in0o+ation elated to te toi needs to be ae0ully sutini?ed to a*oid te is1 o0

biased analysis. #a*ing one identi0ied /i in0o+ation is ele*ant and need to be olleted,

/e /ill a*e to de0ine o/ tis /ill be done.

$e Metod e+loyed in te in*estigation deends on te uose and soe o0 te study.

;:


33/72

Researc( !esi*n@

Resea design is so+e state+ent o sei0iation o0 oedues 0o olleting and

analy?ing te in0o+ation e2uied 0o te solution o0 so+e sei0i oble+. #ee, te

e6loatoy esea is used as in*estigation and is +ainly onened /it dete+ining te

tends and etuns in Mutual %unds and Ban1 etuns.

!ata Collection Met(ods@

$e 1ey 0o eating use0ul syste+ is seleti*ity in olletion o0 data and lin1ing tat

seleti*ity to te analysis and deision issue o0 te ation to be ta1en. $e auay o0

olleted data is o0 geat signi0iane 0o da/ing oet and *alid onlusions 0o+ te

esea.

Sources of Information@

ata a*ailable in +a1eting esea ae eite i+ay o seonday. "i+ay ata is

not inluded in tis study, only seonday data is ta1en in to aount sine, it is a o+aati*e

analysis.

Secondary !ata@

Seonday data an be de0ined as - )data collected b& so(e one else !or %ur%ose ot"er

t"an sol'n# t"e %roble( ben# n'est#ated* % Seonday data is olleted 0o+ e6tenal

soues /i inlude in0o+ation 0o+ ublised +ateial o0 SEBI and so+e o0 te

in0o+ation is olleted online. $e data soues also inlude *aious boo1s, +aga?ines,

ne/saes, /ebsites et. $e ogani?ation o0ile is olleted 0o+ te #ydeabad Sto1

E6ange.

##! "F T.# STU!1@

$e basi uose o0 te study is to gi*e boad idea on Mutual %unds, U4I"S and

analy?e *aious se+es to igligt te di*esi0ied in*est+ent tat Mutual %und o00es to its

in*estos. $oug tis study one an undestand o/ to in*est in Mutual %unds and o/ to

;;


34/72

in*est in U4I" tun te a/ in*est+ent into ien 0uits by ta1ing /ise deisions, ta1ing te

is1 0atos into aount.

Limitation of t(e study

$e study an be biased to te e6tent o0 esonal eetion, istoial natue o0 data olletion

and o0 te ti+e li+it. Many usto+es ae tin1ing tat in*est+ent in sae +a1et is

*ey is1y. As U4I" and Mutual 0und bot ae elated to sae +a1et.

LIT#RATUR# R#VI#,

;


35/72

Sunayna 1uana (:


36/72

uta 4' (9@@;! onduted a ouseold in*esto su*ey /it te ob5eti*e to o*ide data

on in*esto e0eenes on M%s and ote 0inanial asset.

IV#STM#TS

“INVESTMENT IS A SCIENCE AND NOT AN ART”

Sa*ings 0o+ an i+otant at o0 te eono+y o0 any nation. Hit te sa*ings in*ested in

*aious otions a*ailable to te eole, te +oney ats as te di*e 0o go/t o0 te ounty.

Indian 0inanial sene too esents a letoa o0 a*enues to te in*estos. $oug etainly not

te best o deeest o0 +a1ets in te /old, it as easonable otions 0o an odinay +an to

in*est is sa*ings.

In*est+ents, unli1e /o1s o0 at, annot a00od te lu6uy o0 e6ei+enting. In*esting is not

guess/o1. It ta1es +oe tan 5ust a LtiL, it needs taining to lan, instint to i1 and see

intellet to +a1e it /o1 0o te in*esto. #u+an natue is 0i1le, is /ants 1ee anging.

An in*est+ent an be desibed as e0et i0 it satis0ies all te needs o0 all in*estos. So, te

stating oint in seaing 0o te e0et in*est+ent /ould be to e6a+ine in*esto needs. I0 all

tose needs ae +et by te in*est+ent, ten tat in*est+ent an be te+ed te e0et

in*est+ent.

Most in*estos and ad*isos send a geat deal o0 ti+e undestanding te +eits o0 te

tousands o0 in*est+ents a*ailable in India. 4ittle ti+e, o/e*e, is sent undestanding te

needs o0 te in*esto and ensuing tat te +ost aoiate in*est+ents ae seleted 0o i+.

T"e I n'est(ent Needs o! an In'estor

$e in*est+ent needs o0 an in*esto ae si+ly is li0estyle needs on*eted into 0inanial

te+s. $ese inlude te no+al li*ing e6enses, ao++odation, 0ood, as /ell as eduation,

;


37/72

ealt, eeation, tansot, seial oasions li1e +aiages, 0esti*als et. $ese needs ae

de0ined not only in uent te+s but also o*e te est o0 te li0e. $ese needs tend to e+ain

te sa+e o*e te yeas. It is te uent li0estyle and te li0estyle desied in 0utue tat

dete+ines te attitude o0 in*esto to/ads in*est+ents.

By and lage, +ost in*estos a*e eigt o++on needs 0o+ tei in*est+ents> 9. Seuity o0

&iginal 'aital :. Healt Au+ulation ;. 'o+0ot %ato . $a6 E00iieny . 4i0e 'o*e

. Ino+e D. Si+liity C. Ease o0 Hitda/al @. 'o++uniation.

• Security of ori*inal capital@ $e ane o0 losing so+e aital as been a i+ay

need. $is is eas te stongest need a+ong in*estos in India, /o a*e su00eed

egulaly due to 0ailues o0 te 0inanial syste+.

• ,ealt( accumulation@ $is is lagely a 0ato o0 in*est+ent e0o+ane, inluding

bot sot-te+ e0o+ane o0 an in*est+ent and long-te+ e0o+ane o0 a

ot0olio. Healt au+ulation is te ulti+ate +easue o0 te suess o0 an in*est+ent

deision.

• Comfort factor@ $is e0es to te eae o0 +ind assoiated /it an in*est+ent.

A*oiding diso+0ot is obably a geate need tan eei*ing o+0ot. Reutation

lays an i+otant at in deli*eing te o+0ot 0ato.

• Ta: efficiency@ 4egiti+ate edution in te a+ount o0 ta6 ayable is an i+otant at

o0 te Indian sye. E*ey uee sa*ed in ta6es goes to/ads /ealt au+ulation.

• Life Cover@ Many in*estos loo1 0o in*est+ents tat o00e good etun /it ade2uate

li0e o*e to +anage te situations in ase o0 any e*entualities.

• Income@ $is e0es to +oney distibuted at inte*als by an in*est+ent, /i ae

usually used by te in*esto 0o +eeting egula e6enses. Ino+e needs tend to be

0aily onstant beause tey ae elated to li0estyle and ae /ell undestood by

in*estos.

;D


38/72

• Simplicity@ In*est+ent instu+ents ae o+le6, but in*estos need to undestand /at

is being done /it tei +oney. A lanne sould also deli*e si+liity to in*estos.

• #ase of 6it(dra6al@ $is e0es to te ability to in*est long te+ but /itda/ 0unds

/en desied. $is is stongly lin1ed to a sense o0 o/nesi. It is no+ally tiggeed

by a need to send aital, ange in*est+ents o ate to anges in ote needs.

Aess to a long-te+ in*est+ent at sot notie an only be ad at a substantial ost.

• Communication@ $is e0es to in0o+ing and eduating in*estos about te uose

and ogess o0 tei in*est+ents. $e need to o++uniate ineases /en

in*est+ents ae teatened.

It is also etinent to di00eentiate bet/een needs and /ants. Hants an be desibed as

tansient needs. Hants 0ous on te sot-te+, and o0ten lead to long-te+ in*est+ent

disaoint+ent.

• Seuity o0 oiginal aital is +oe i+otant /en e0o+ane 0alls.

• "e0o+ane is +oe i+otant /en in*est+ents ae e0o+ing /ell.

• %ailues engende a desie 0o an inease in te o+0ot 0ato.

"e0et in*est+ent /ould a*e been aie*ed i0 all te abo*e-+entioned needs ad been +et to

satis0ation. But tee is al/ays a tade-o00 in*ol*ed in +a1ing in*est+ents. As long as te

in*est+ent stategy +ates te needs o0 in*esto aoding to te ioity assigned to te+,

e sould be ay.

;C


39/72

$e Ideal In*est+ent stategy sould be a usto+i?ed one 0o ea in*esto deending on is

is1-etun o0ile, is satis0ation le*el, is ino+e, and is e6etations. Auate lanning

gi*es auate esults. And 0o tat tee +ust be an e00iient and tust/oty oad+a to

aie*e te ulti+ate goal o0 /ealt +a6i+i?ation.

In'est(ent A'enues n Inda

$aditionally, Indian in*estos a*e been going 0o in*est+ent a*enues anging 0o+ lo/

etun-lo/ is1 %i6ed eosits to ig is1-ig-etun Sae Ma1ets. $ill nineties, in*estos

/ee en5oying ig inteest ates in te ange o0 9-:: = on %i6ed eosits. Hit te outset o0

a libeali?ed ea and oening o0 Indian eono+y inteest ates so0tened and %i6ed eosits

/ee no longe te e0eed oies o0 +any in*estos. $ey loo1ed out beyond te taditional

oduts. $ese is1 sa**y in*estos tuned to te sto1 +a1et /i ad been gi*ing good

etuns on selet sis.

'on*entionally, Indian in*estos /ee in*esting in te 0ollo/ing a*enues>

Fi:ed !eposits 3 $ey o*e te 0i6ed deosits o0 *aied tenos o00eed by te o++eial

ban1s and ote non-ban1ing 0inanial institutions. $ese ae geneally a lo/ is1 eositions

as te o++eial ban1s ae belie*ed to etun te a+ount due /itout de0ault. By and lage

tese %s ae te e0eed oie o0 is1-a*ese Indian in*estos /o ate sa0ety o0 aital 8

ease o0 in*est+ent abo*e all aa+etes. 4agely, tese in*est+ents ean a +aginal ate o0

etun o0 -C= e annu+.

4overnment Bonds 3 $e 'ental and State o*en+ents aise +oney 0o+ te +a1et

toug a *aiety o0 S+all Sa*ing Se+es li1e national sa*ing eti0iates, Kisan Vi1as "ata,

"ost &00ie eosits, "o*ident %unds, et. $ese se+es ae is1 0ee as te go*en+ent does

not de0ault in ay+ents. But te inteest ates o00eed by te+ ae in te ange o0 D= - @=.

;@


40/72

Money7&ac9 Insurance - Insuane in India is +ostly sold and bougt as in*est+ent oduts.

$ey ae e0eed beause o0 tei add-on bene0its li1e 0inanial li0e-o*e, ta6-sa*ings and

satis0atoy etuns. E*en i0 one does not +anage to sa*e +oney and in*est egulaly in

0inanial instu+ents, /it insuane, te oliyolde as no oie. I0 e does not ay is

e+iu+s on ti+e, is insuane o*e /ill lase. Money-ba1 Insuane se+es ae used as

in*est+ent a*enues as tey o00e atial as-ba1 at etain inte*als. $is +oney an be

utili?ed 0o ilden7s eduation, +aiage, et.

#ndo6ment Insurance 3 $ese oliies ae te+ oliies. In*estos a*e to ay te e+iu+s

0o a atiula te+, and at +atuity te aued bonus and ote bene0its ae etuned to te

oliyolde i0 e su*i*es at +atuity.

Bullion Mar9et 3 "eious +etals li1e gold and sil*e ad been a sa0e a*en 0o Indian

in*estos sine ages. Besides 5e/elley tese +etals ae used 0o in*est+ent uoses also.

Sine last 9 yea, bot old and Sil*e a*e igly aeiated in *alue bot in te do+esti as

/ell as te intenational +a1ets. In addition to its attibutes as a stoe o0 *alue, te ase 0o

in*esting in gold e*ol*es aound te ole it an lay as a ot0olio di*esi0ie.

Aoding to te Hold old 'ounil statistis, te tend in te ie +o*e+ents in te ast

0i*e yeas as been uneedented. old as aeiated by @. = in te ast 0i*e yeas. $is

+eans tat te esent *alue (as o Ma ;9,:


41/72

“ P A + u tu a l 0 u nd i s a o + a n y t a t b in g s t o g e t e + o n e y 0 o +

+ a ny e o l e a n d i n *e s t s i t i n s t o 1s , b o nd s o o t e a s se t s . $ e

o + b in e d o l d i n g s o 0 s t o 1 s , b o n d s o o t e a s s e t s t e 0 u n d o / n s

a e 1 n o / n a s i t s o t 0 o l io . E a i n * e s to i n t e 0 u n d o / n s s a e s ,

/ i e e s e n t a a t o 0 t e s e o l d i n g s P P . . ”

- $ e U . S . S e u i t i e s a n d E 6 a n g e ' o + + i s s io n

COMPARATIVE ANALYSIS BET-EEN TRADITIONAL INVESTMENT PLANS 1

MODERN INVESTMENT PLAN

Traditional met(ods

9. %i6ed deosits 3

• 4o/ is1

• 4ess tan =.a etuns

• $a6able

:. Reuing deosits 3

• 4o/ is1

9


42/72

• 4ess tan = .a etuns

• $a6able

;. Sa*ings -• 4o/ is1

• ;.= etuns

• $a6able

. $a6 Sa*ing Bonds 3

• 4o/ is1

• C= etuns

• edutible 0o+ ta6able ino+e

. o*en+ent bonds 3

• No is1

• C= etuns

• $a6 0ee

Modern met(ods

9. In*est+ent in +utual 0unds 3

• #ig is1

• A*eage etuns deends on +a1et 0lutuations

• %unds unde E4SS edutible 0o+ ta6able ino+e

:. Initial "ubli o00es by ooate 3

• #ig is1

:


43/72

• #ig o lo/ deends on +a1et onditions

• Retuns a0te one yea ta6 0ee

;. In*est+ents in "ue old 3• 4o/ is1

• eends on te go/t in te +a1et

• $a6able

I!USTR1 PR"FIL#

INSURANCE

!efinition@

;


44/72

Insuane +ay be de0ined as a ontat bet/een insues and insued unde /i insue

inde+nities te loss o0 te insued against identi0ied eilous 0o te +utually ageed uon

e+iu+ as been aid by te insued.

.istory@

$e oigin o0 insuane is *ey old. $e ti+e /en /e /ee not e*en bon, +an as sougt

so+e sot o0 otetion 0o+ uneditable ala+ities o0 te natue. $e basi uge in +an to

seue i+sel0 against any 0o+ o0 is1 and unetainty led to te oigin o0 insuane. $e

insuane a+e to India 0o+ U.K., /it te establis+ent o0 &iental 4i0e Insuane

'ooation in 9C9C. $e li0e insuane o+any at 9@9: /as te 0ist statutoy body tat

stated to egulate te li0e insuane business in India. By 9@ about 9 Indian, 9 0oeign

and D o*ident 0i+s /ee been establised in India. $en te ental go*en+ent too1 o*e

tese o+anies and as esult te 4I' as /o1ed to/ads seading li0e insuane and

building a /ide net/o1 aoss te lengt and te beadt o0 te ounty. A0te te

libeali?ation te entane o0 0oeign layes as added to te o+etition in te +a1et.

Insurance Mar0et n Inda2

Hit te on*egene o0 0inanial oduts, te lines bet/een oduts, te lines bet/een

oduts, te lines bet/een odut ategoies o0ten get blued, lea*ing te usto+es

be/ildeed about te uose, stutue and bene0its o0 te odut e o se as uased.

$e 1ey is to undestand /at 0inanial goal one /ould li1e to 0ul0ill and ten uase o0

odut. Ea o0 te 0inanial oduts a*ailable- ban1 deosit, bonds, -setos, li0e

insuane, +utual 0unds, sto1s ae stutued along 0atos li1e te+, is1 and li2uidity to +eet

di00eent needs.

Indian li0e insuane +a1et si?e in :


45/72

business a*e ossed +a1et e6etations and esent insuane business $e USQ 9-billion

Indian li0e insuane industy is onsideed te 0i0t lagest li0e insuane +a1et, and go/ing

at a aid ae o0 ;:-; e ent annually, aoding to te 4i0e Insuane 'ounil. 4i0e

insuane o+anies a*e /itnessed a D< e ent 5u+ in ne/ e+iu+ olletion duing te

0ist 0i*e +onts o0 te 0inanial yea. Aoding to data eleased by te Insuane Regulatoy

and e*elo+ent Autoity (IRA!, insuane o+anies ganeed USQ 99.D; billion in ne/

business e+iu+ duing Ail-August :


46/72

INDUSTRY PROFILE

!efinition@

A +utual 0und is an in*est+ent *eile /i allo/s in*estos /it si+ila (one ould say

+utual! in*est+ent ob5eti*es, to ool tei esoues and teeby aie*e eono+ies o0 sale

and di*esi0iation in tei in*esting.

.istory@

$e +utual 0und industy in India stated in 9@; /it te 0o+ation o0 Unit $ust o0 India, at

te initiati*e o0 te o*en+ent o0 India and te Rese*e Ban1 o0 India. $e istoy o0 +utual

0unds in India an be boadly di*ided into 0ou distint ases

%ist "ase> 9@ 3 9@CD

An At o0 "alia+ent establised Unit $ust o0 India (U$I! in 9@;. It /as set u by te

Rese*e Ban1 o0 India and 0untioned unde te Regulatoy and ad+inistati*e ontol o0 te

Rese*e Ban1 o0 India. In 9@DC U$I /as de-lin1ed 0o+ te

RBI and te Industial e*elo+ent Ban1 o0 India (IBI! too1 o*e te egulatoy and

ad+inistati*e ontol in lae o0 RBI. $e 0ist se+e launed by U$I /as Unit Se+e

9@. At te end o0 9@CC U$I ad Rs., D


47/72

0ollo/ed by 'anban1 Mutual %und (ee+be CD!, "un5ab National Ban1 Mutual %und

(August C@!, Indian Ban1 Mutual %und (No*e+be C@!, Ban1 o0 India (Oune @

Baoda Mutual %und (&tobe @:!. 4I' establised its +utual 0und in Oune 9@C@ /ile I'

ad set u its +utual 0und in ee+be 9@@


48/72

0a+ed by o*en+ent o0 India and does not o+e unde te u*ie/ o0 te Mutual %und

Regulations. $e seond is te U$I Mutual %und 4td, sonsoed by SBI, "NB, B&B and 4I'.

It is egisteed /it SEBI and 0untions unde te Mutual %und Regulations. Hit te

bi0uation o0 te est/ile U$I /i ad in Ma :


49/72

C"MPA1 PR"FIL#

'&M"AN) "R&%I4E

@


50/72

'&M"AN) "R&%I4E

Inooated in 9@@;, Net /ot Sto1 Bo1ing 4i+ited (NSB4! as been a listed

o+any at Bo+bay Sto1 E6ange (BSE!, Mu+bai sine 9@@.

A Me+be, at te National Sto1 E6ange o0 India (NSE! and Bo+bay Sto1 E6ange,

Mu+bai (BSE! on te 'aital Ma1et and ei*ati*es (%utues 8 &tions! seg+ent, NSB4

as been taditionally se*iing Institutional lients and in te eent ast as 0oayed into etail

bo1ing, establising banes aoss te ounty. "esene is being +a1ed in te Middle East,

Euoe and te United States too, as at o0 ou atte+ts to ate to global +a1ets. He ae a

eositoy atiiant at 'ental eositoy Se*ies India ('S4! /it lans to beo+e one

at National Seuities eositoy (NS4! by te end o0 tis 2uate. He a*e ou usto+es

atiiating in te boo+ing o++odities +a1ets /it ou +e+besi at te Multi

'o++odity E6ange o0 India (M'! and National 'o++odity 8 ei*ati*es E6ange

(N'E!, toug Net/ot Sto1.'o+ 4td. Hit its stong suot and business units o0

esea, distibution 8 ad*isoy, NSB4 ai+s to beo+e a one-sto solution to te bo1ing and

in*est+ent needs o0 its lients, globally.

Stong tea+ o0 o0essional7s e6eiened and 2uali0ied ool o0 u+an esoues da/n

0o+ to 0inanial se*ie 8 bo1ing ouses 0o+ te ba1bone o0 ou si?eable in0astutue.


51/72

#igly tenology oiented, te o+any7s salability o0 oeations and te igest le*el o0

se*ie standads as ensued aid go/t in te nu+be o0 loations 8 te lients se*ied in

a *ey sot san o0 ti+e. Net/otians7, as ea one o0 ou


52/72

Mum&ai >Re*istered "ffice?

, 'u gate #ouse, :nd %loo, ;:F ; Vee Nainan Road, %ot

Mu+bai -


53/72

Products and services portfolio

• Retail and institutional bo1ing

• Resea 0o institutional and etail lients

• istibution o0 0inanial oduts

• "MS

• 'ooate 0inane

• Net tading

• eositoy se*ies

• 'o++odities Bo1ing

;


54/72

Infrastructure

A ooate o00ie and ; di*isional o00ies in 'B o0 Mu+bai /i ouses state-o0-

te-at dealing oo+, esea /ing 8 +anage+ent and ba1 o00ies.

All o0 9


55/72

:


56/72

UALIT1 P"LIC1

$o aie*e and etain leadesi, Net/ot sall ai+ 0o o+lete usto+e satis0ation, by

o+bining its u+an and tenologial esoues, to o*ide sueio 2uality 0inanial

se*ies. In te oess, Net/ot /ill sti*e to e6eed 'usto+e7s e6etations.

As e te 2uality oliy, Net/ot /ill>

Build in ouse oesses tat /ill ensue tansaent and a+onious elationsis /it

its lients and in*estos to o*ide ig 2uality o0 se*ies.

Establis a atne elationsi /it in its in*esto se*ie agents and *endos tat /ill

el in 1eeing u its o++it+ents to te usto+es.

"o*ide ig 2uality o0 /o1 li0e 0o all its e+loyees and e2ui te+ /it

ade2uate 1no/ledge 8 s1ill so as to esond to usto+e7s needs.

'ontinue to uold te *alues o0 onesty 8 integity and sti*e to establis

unaalleled standads in business etis.

Use state-o0-te at in0o+ation tenology in de*eloing ne/ and inno*ati*e 0inanial

oduts and se*ies to +eet te anging needs o0 in*estos and lients.

Sti*e to be a eliable soue o0 *alue-added 0inanial oduts and se*ies and onstantly

guide te indi*iduals and institutions in +a1ing a 5udiious oie o0 it.

Sti*e to 1ee all sta1e-oldes (sae oldes, lients, in*estos, e+loyees, sulies and

egulatoy autoities! oud and satis0ied.

=ey Personnel@


57/72

Mr% S P Gain ; CM! et6ort( Stoc9 Bro9in* Ltd%

A 2uali0ied 'ateed Aountant /it o*e 9 yeas o0 e6eiene in te aital

+a1ets.

Mr% !eepa9 Me(ta ; .ead PMS

&*e 9: yeas o0 e6eiene in te aital +a1ets and as te io /o1 e6eiene

o0 se*ing on te E2uity des1 o0 Reliane.

Mr%Viral !os(i ; #8uity Strate*ist

A 2uali0ied 'ateed Aountant /it e6eiene o0 o*e a deade in tenial

analysis /it eset to e2uity +a1ets.

Mr% Vines( Gain ; Asst% Fund Mana*er

A 2uali0ied MBA gaduate seiali?ing in 0inane and o*e t/o yeas o0 e6eiene

in te aital +a1ets.

Resea and te Ba1 o00ie.

/e a*e sougt to o*ide e+iu+ 0inanial se*ies and in0o+ation, so tat te o/e o0

in*est+ent is *ested /it te lient. He e2ui tose /o in*est /it us to +a1e intelligent

in*est+ent deisions, o*iding te+ /it te 0le6ibility to eite ta into ou e6tensi*e

1no/ledge and e6etise, o +a1e tei o/n deisions. He +ade ou debut into te 0inanial

/old by se*iing Institutional lients, and o*ed its ig salability o0 oeations by

go/ing e6onentially o*e a sot eiod o0 ti+e. No/, o/eed by a to-not esea tea+

D


58/72

and a net/o1 o0 e6ets, /e o*ide an aay o0 0inanial oduts 8 se*ies sanning entie

India.&u stong suot, tenology-di*en oeations and business units o0 esea,

distibution, ad*isoy, /ide aay o0 oduts 8 se*ies oalese to o*ide you /it a one-

sto solution to ate to all you in*est+ent needs. &u single +inded ob5eti*e is to el you

go/ you Net/ot.

"UR 4R"UP C"MPAI#S

et6ort( Stoc9 Bro9in* Ltd% HSBL

NSB4 is a +e+be o0 te National Sto1 E6ange o0 India 4td (NSE! and te Bo+bay Sto1

E6ange 4td (BSE! in te 'aital Ma1et and ei*ati*es (%utues 8 &tions! seg+ent.

NSB4 as also a2uied +e+besi o0 te ueny dei*ati*es seg+ent /it NSE, BSE 8

M'-S. It is eositoy atiiants /it 'ental eositoy Se*ies India ('S4! and

National Seuities eositoy (India! 4i+ited (NS4!. Hit a lient base o0 o*e 94 loyal

usto+es, NSB4 is sead aoss te ounty toug its o*e :;


59/72

et6ort(Stoc9%ComLtd%HSCL

NS'4 is te o++odities a+ o0 NSB4. It is a +e+be at te Multi 'o++odity E6ange o0

India (M'! and National 'o++odity 8 ei*ati*es E6ange (N'E! and is ba1ed by

solid esea 8 analytis in 'o++odities.

et6ort(SoftTec(Ltd%HSL

NS4 is an IS& @


60/72

Values

• $esponsive

• "rustworthy

• %reative

• %ourageous

Approach

• &articipation'- (ocusing on attractive, growing markets where we can leverage

our relationships and e)pertise

• %ompetitive positioning'- %om!ining glo!al capa!ility, deep local knowledge

and creativity to outperform our competitors

• *anagement +iscipline'- %ontinuously improving the way we work, !alancing

the pursuit of growth with firm control of costs and risks %ommitment to

stakeholders

• %ustomers'- &assionate a!out our customers# success, delighting them with the

uality of our service

• ur &eople'- elping our people to grow, ena!ling individuals to make a

difference and teams to win

• %ommunities'- "rusted and caring, dedicated to making a difference

• /nvestors'- A distinctive investment delivering outstanding performance and

superior returns

• $egulators' - E)emplary governance and ethics wherever we are.

!ATA AAL1SIS A! IT#RPR#TATI"


61/72

Preparation of Reports

A0te analysis, te ne6t ste is in te eaation o0 te eot. $e eot as been eaed

aoding to te eot /iting iniles.

$e &b5eti*e, laity in esentation o0 ideas and te uses o0 ats a*e been +aintained

tougout te eot.

&ne te data as been olleted, te eseae as to oess, analy?e and inteet te sa+e.

It /as e+asi?ed tat te eseae sould e6eise good ae to ensue tat eliable data ae

not oely oessed and analy?ed. Su00iient attention is o0ten not gi*en to tese asets,

/it te esult tat te 2uality o0 te eot su00es.

Editing -$e 0ist tas1 in data is editing. It is te oess by /i data ae eaed 0o

subse2uent oding. As it is *ey sub5eti*e oess, editing is te oess o0 e6a+ining eos

and o+ission in te olleted data and +a1ing neessay in te sa+e tis is desiable /en

tee is +oe inonsisteny in te esonses.

Codin* 7 oding is te oedue o0 lassi0ying te ans/es to a 2uestion in +eaning0ul

ategoies te sy+bol used to indiate te ategoies ae alled odes. 'oding is neessay to

ay out te subse2uent oeation o0 tabulation and analy?ing data.

'oding in*ol*es t/o stes>

$e 0ist is to sei0y te di00eent ategoies o lasses into /i te esonses ae lassi0ied.

$e seond ste is to alloate indi*idual ans/es to di00eent ategoies.

Ta&ulation - tabulation o+ises o0 soting o0 data into di00eent ategoies and ounting te

nu+be o0 ases tat belongs to ea ategoies.

&ne is un*aied tabulation. $is inludes te nu+bes o0 esonses to one 2uestion o to ount.

It7s *ey si+lest /ay to tabulate /ee t/o o +oe *aiables ae in*ol*ed in tabulation. It is

alled &ivariate or multivariate ta&ulation. In +a1eting esea o5et, geneally bot

tye o0 tabulation is used.

9


62/72

Analysis and interpretation> - analysis and inteetation ae te ental stes in te esea

oess. $e goal o0 analysis is to su++aies te olleted data in su a /ay tat tey o*ide

ans/e to 2uestions tat tiggeed /ile esea. Inteetation is te esea 0o bode,

+eaning o0 esea 0inding.

U4I" VS MU$UA4 %UN>

9. INSURAN'E

:. EN$R) 4&A

;. MA$URI$)

. '&M"U4SI&N &% INVES$IN

. $A SAVIN

. %4EIBI4I$) &% $IME &% REEM"$I&N

E> In a U4I", in*esto /ould ay


63/72

Atual +oney in*ested in U4I" is ;9C

A0te 9st 0inanial yea NAV eoded


64/72

%UN. #ee li2uid 0und doesn7t a*e e2uity e6osue and able to geneate D.= etuns

+ini+u+ e annu+.

I0 an in*esto e6its total C.


65/72

In E4SST$ERM "4AN ase, E4SS o*eed 0ull by 0a+ily and te+ insuane :.


66/72

FI!I4S

Interpretation%ist eason o e0eene tat /y an in*esto is inteested in U4I" is In*est+ent "uose, and

seond is to its etuns and a0te tat tey in*esting beause tey ae getting te ta6 bene0it.

$en again tee ae so+e eole /o ae in*esting 0o ension lanning and seuity.


67/72

InterpretationIn 0utue eole /ill be +oe e0eing to te seuity o0 tei +oney +eans tey /ant an

seued otion /i sould o*ide good etuns. As U4I" ae te otion in /i you an

a*e te seuity also and good etuns. $e seond oie o0 te in*estos is etun o0 tei

+oney.

• It is udent to +a1e e2uity-oiented in*est+ents based on an establised ta1 eod

o0 at least tee yeas o*e di00eent +a1et yles. U4I"s do not 0ul0ill tis iteion

no/.

• In U4I", only 9st yea e+iu+ as to be lo1ed 0o ; yeas and : nd yea in*est+ent

:yeas and ;

d

yea 0o 9yea. But in E4SS e*ey yea7s in*est+ent lo1ed 0o ; yeas.

• Insuane and sa*ings ae t/o di00eent goals and it is bette to addess te+ seaately

ate tan bundle te+ into a single odut. A o+bination o0 a te+ lan and a

+utual 0und ould gi*e bette esults o*e te long te+.

• I0 in*est+ent etuns ae you ioity, you sould o+ae altenati*e in*est+ent

oduts be0oe lo1ing in you +oney.

• $a6 ad*antages do /o1 in 0a*o o0 U4I"s 0o debt-oiented 0unds. %o e2uity-oiented

0unds, e2uity-lin1ed sa*ings oduts, /i en5oy ta6 ad*antages and o*ide +a1et-

lin1ed etuns, ae o+aable.

• esite te IRA egulations o0 no +oney ba1s to be o00eed by agents, it still

e*ails in te +a1et. As obse*ed, +oney ba1 as ig as := /as seen is being

o*ided by an agent. $is is ating as one o0 te +a5o bottlene1s 0o ban1s as no

+oney ba1s ae o*ided at ban1 le*el.

D


68/72

• #%' ban1 e*en ates to te need o0 indi*iduals /o ae not satis0ied by its o/n

U4I"S i.e. oliies o00eed by #%' Standad 4i0e Insuane by o00eing te+ U4I"7s

o0 Bila Sun li0e insuane.

• U4I"7s ae sold as in*est+ent lans ate tan RISK '&VERIN7 lans.

• No a/aeness about U4I"7s desite 4I' being te lagest and te oldest laye in te

+a1et a*ing U4I" lans.

• It /as obse*ed tat salaied lass is +u easie to on*ine to go 0o U4I"7s tan te

business lass. It /as also obse*ed tat te business lass doesn7t usually ot 0o

+ontlyF 2uatelyF al0 yealy +odes o0 ay+ent beause o0 unneessay assles and

also +oe +oney at disosal.

• Insuane and in*est+ent ae teated in te sa+e +anne desite te+ being di00eent.

• "ot0olio in M% anges e*ey +ont, /ee as in U4I"7s anges on 2uately basis.

Reco((endatons

• Insuane and in*est+ents +ust be teated di00eently

• 'onsu+e a/aeness +ust be eated 0o U4I"7s

•

Sould not be +is-sold as in*est+ent oduts but is1 o*e7 oduts

• Relationsi building +ust be 0oused at, ate tan iting in te /ong odut.

$is /ill eate usto+e loyalty.

• A eson aleady a*ing a U4I", an lo/e osts and inease etuns by te 0ollo/ing>

C


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9. $y tous

:. Redue li0e o*e

;. Stay a/ay 0o+ ides

CONCLUSION

'ange is *ey i+otant and one /ose goes /i te anging en*ion+ent al/ays

sueeds, tat is /at I a*e leant 0o+ te study. $e o+etition as go/n too +u in te

+a1et tat te in*estos ae on0used in /i e Fse sould in*est. $e o+etition is

bet/een te taditional +etods and +oden +etods.

T(is pro'ect *ives t(e comparative analysis &et6een ULIP products and Mutual Funds

t(at is@

Mutual %unds and te Unit 4in1ed Insuane "lans ae bot o0essionally +anaged

in*est+ent lans. U4I" o*ides li0e insuane and at te sa+e ti+e o*ides suitable

in*est+ent a*enues. $e oliy *alue is te su+ assued lus te aeiation o0 te

undelying assets. It is li0e insuane solution tat o*ides 0o te bene0its o0 otetion and

aital aeiation at te sa+e ti+e. $e odut is 2uite si+ila to a +utual 0und in te sense

tat te in*est+ent is denoted as units and is eesented by te *alue tat it as attained alled

as Net Asset Value (NAV!, and aat 0o+ te insuane bene0it te stutue and 0untioning

o0 U4I" is e6atly li1e a +utual 0und.

$e idea o0 a*ing insuane and in*est+ent on*eniently olled into one-odut loo1s

alluing enoug and sa*es te o++on in*esto te ti+e and e00ot to onside di00eent

otions. #o/e*e, an in*esto +ay build a usto+i?ed solution 0o i+sel0 seaating

insuane 0o+ is in*est+ent needs.

@


70/72

In te ase o0 U4I", te insuane o+any deduts ages to/ads li0e insuane o*e

(+otality ages!, ad+inistation ages and 0und +anage+ent ages 0o+ te e+iu+

aid by te in*esto. $e balane a+ount le0t is used to in*est in sto1s o bonds o a

o+bination o0 te t/o. All e+iu+s aid ae eligible 0o ta6 bea1 unde Se CC and o+e

unde a lo1-in o0 tee yeas.

$e ad+inistati*e ages le*ied by te insuane o+any ae 2uite ig duing te 0ist 0e/

yeas o0 te oliy. $is ats as a da+ene as te etuns ae a00eted due to lo/e le*els o0

0unds a*ailable 0o in*est+ent, and e6ta autious aoa by te insuane o+any to/ads

in*esting doesn7t el eite. Heeas, M% o+aable ad+inistati*e ages ae *ey less

and tey in*est tei entie oldings in e2uities 2uite aggessi*ely in 0a*oable ti+es, tus

allo/ing te ot0olio to aeiate aidly.

$e ige ad+inistati*e ages duing te initial yeas eode te etuns and +a1e it less

attati*e /en o+aed to a +utual 0und in*est+ent 0o a si+ila eiod. U4I"s ae not as

li2uid as +utual 0unds. $e ede+tion oess ta1es +oe ti+e as o+aed to a +utual 0und.

I0 one intends to edee+ a0te te lo1-in eiod o0 tee yeas, e /ould be at a loss beause o0

ige initial ad+inistati*e ages.

"ot0olio dislosue is anote aea /ee M% soe o*e U4I"s and toug leading insuaneo+anies do dislose tei ot0olio on a egula basis, te o+etiti*e essue in te +utual

0unds industy lead to ige dislosues and in*estos 1no/ e6atly /ee tee +oney is

being in*ested.

Altoug U4I"s o00e etain bene0its, /i M%s ae unable to o*ide 0o, 0o e6a+le

etain U4I"s /it a aital guaantee. $is odut otets indi*iduals 0o+ a otential

+a1et slide. In ase o0 a +a1et slide, te insuane o+any uots to at least etun te

e+iu+ aid by te indi*idual. $is is unli1e in*est+ents in a +utual 0und se+e /ee

in*estos ae atne to bot o0its as /ell as losses inued by te se+e. S/it inFout

0o+ di00eent asset lasses is also allo/ed at no e6ta ost, and in*esto an on*eniently

tans0e is in*est+ents 0o+ an e2uity se+e to a debt o balaned se+e. $e in*est+ent

D


71/72

a+ount tat an in*esto ays an also be alteed as e is /ises duing anyti+e in bet/een

is +atuity eiod.

$us it is bette to 1ee insuane and in*est+ent needs seaate.

In*esting in Mutual %unds an be done syste+atially. Syste+ati In*est+ent "lan, Syste+ati

$ans0e "lan and Syste+ati Hitda/al "lan o00e geate bene0its tan lu+ su+

in*est+ent. "eole in*esting in M%s toug SI"s +ay bene0it toug Ruee 'ost A*eaging.

#ee te a*eage ost o0 buying units is 1et lo/. It /o1s out to be a disilined in*est+ent

atie tat ta1es te guess/o1 out o0 ti+ing te +a1ets. It in*ol*es in*esting a 0i6ed

a+ount in te sa+e in*est+ent lan at egula inte*als3say e*ey +ont o e*ey 2uate. $e

essene o0 tis stategy is tat +oe units ae uased auto+atially /en ies ae lo/ and

0e/e units /en ies ae ig. &*e ti+e, tis esults in te a*eage ost e unit3te +oney

in*esto ays3being lo/e tan te a*eage ie e unit.

Unli1e +utual 0und SI"s, /i ae not long-te+ by natue, insuane lans usion

i++ediate +a1et 0lutuations as /ell as long-te+ +a1et 0lutuations *aying o*e

in*est+ent yles. And as ages on U4I"s ae 0ont-loaded, te bene0it on unit *alues o*e a

9-yea eiod (o +oe! is onouned. I0 /ell lanned, insuane an /o1 0a*oably as

e00eti*e sa*ings tools, eseially i0 in*esto also 0atos in te ta6 bene0its. 'ontibutions in to

insuane lans o*ides Setion C


72/72

Mutual %unds ae 0o a di00eent lass o0 in*estos. "eole /o /ant to sead out tei is1

and still ean a andso+e etun Mutual %unds /ould be te igt in*est+ent a*enue.

Altoug no ta6 bea1s ae o00eed, Mutual %unds a*e a otential to gi*e e6taodinay

etuns tat +ay e*en o+ensate 0o te ta6 at. But tee is a note o0 aution 0o te

in*estos tat tey sould onstantly +onito tei ot0olio and te Se+e in /i tey

a*e in*ested. 'ae0ul +onitoing and an intelligent aoa ould de0initely el in eaning

0otunes.

BIBILO3RAP4Y

9. ///.net/otdiet.in:. ///.google.o+;. ///.+oneyontol.o+. ///.liindia.o+. Boues o0 di00eent Insuane "oduts. IRA boo1s
http://www.google.com/http://www.moneycontrol.com/http://www.licindia.com/http://www.google.com/http://www.moneycontrol.com/http://www.licindia.com/

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