ACKNOWLEDGEMENT

At the very outset ,I fail to find adequate words ,with limited vocabulary at my command ,to express my emotions to ‘ DEAR GOD’ ,whose eternal blessing divine presence ,and masterly guidance helps me to fulfill all my goals.

I am thankful to the authority of reliance capital asset management limited

For providing me an opportunity to with them. I am especially thankful to Mr. Abhishek Arora (branch manager), Mrs. Deepika Arora (Operaions Executive), Mr. rajiv singh and Ms. Yash katyal (Relationship managers) for providing me opportunity, knowledge and all the vital information on which this project stands. The support provided to me during my project was overwhelming and the work environment was conducive to work.

Sometimes it not easy to express your emotion in words especially when you have to say thanks to your parents for their constant undemanding love, dedication, sacrifice, inspiriind guidance, affectionate encouragement and never-ending enthusiasm; with which this project would not have been completed successfully.

I would like to thanks many other who have been associated with work directly or indirectly.

DHEERAJ KUMAR SINGH

PREFRACE

This project “ QUEARY HANDLING, INVESTOR SERVICES AND CONSUMER BENEFIT IN INVESTING IN MUTUAL FUNDS” has been

prepared for the requirements of the graduation in bachelor of business administration. I have tried my best to present my project under the able co-operation with all the staff of reliance mutual fund.

Project stretched for four weeks training in the company to gain the knowledge of mutual funds. Mutual funds are now the most appropriate investment option for the investors. The development of economy form of organization makes turning point for rapid industrialization and economy growth. This form of organization flourished on account of several features such as limited liability easy transferability of share separate legal entity etc. this led to development of security market where ownership interest are initially sold (primary market) and later sold in the faster industrial growth and channelizing the savings of masses who do not venture to create and manage enterprise but want to more investor.

CONTENT

Introduction

An overview on mutual fund

Company profile (reliance capital management ltd. ) Product profile

An overview on mutual fund companies in India

Research methodology

Research design Sample design

Analysis and interpretation of data

Finding

Recommendation & suggestion

Conclusion

Appendix

Questionnaire Bibliography

INTRODUCTION

AN OVERVIEW ON MUTUAL FUNDS :-

HISTORY OF MUTUAL FUNDS:-

The mutual fund was born from a financial crisis that staggered Europe in the early 1770s.

The British East India Company had borrowed heavily during the preceding boom years to support its ambitious colonial interests, particularly in North America where unrest would culminate in revolution in a few short years.

As expenses increased and revenue from colonial adventures fell, the East India Company sought a bailout in 1772 from the already-stressed British treasury. It was the “original too big to fail corporation” and the repercussions were felt across the continent and indeed around the world.

At the same time, the Dutch were facing their own challenges, expanding and exploring like the British and taking “copy-cat risks” in a pattern that has drawn parallels to the banking crisis of 2008.

The first mutual fund

The world’s first mutual fund – in 1774. The financial risk to the mainly small investors was spread by diversifying across a number of European countries and the American colonies, where investments were backed by income from plantations, an early version of today’s mortgage-backed securities.

Subscription to the closed-end fund, which Van Ketwich called “Eendragt Maakt Magt” (“unity creates strength”), was available to the public until all 2,000 units were purchased. After that, participation in the fund was available only by buying shares from existing shareholders in the open market. The fund’s prospectus required an annual accounting, which investors could view if they requested. Two subsequent funds set up in the Netherlands increased the emphasis on diversification to reduce risk, escalating their appeal to even smaller investors with minimal capital.

Van Ketwich’s fund survived until 1824 but the vehicle he created is still a hallmark of personal investing more than two centuries later with an estimated $27.86 trillion US in global assets in July 2013. In Canada alone, mutual funds represent $920 billion.

The early mutual funds spread were of the closed-end variety, issuing a fixed number of shares. They spread from the Netherlands to England and France before heading to the U.S. in the 1890s.

The first modern-day mutual fund, Massachusetts Investors Trust, was created on March 21, 1924. It was the first mutual fund with an open-end capitalization, allowing for the continuous issue and redemption of shares by the investment company. After just one year, the fund grew to $392,000 in assets from $50,000. The fund went public in 1928 and eventually became known as MFS Investment Management.

The mutual fund advantage

Mutual funds offer Canadians a superior means of accumulating wealth through access to a broad range of personalized investment solutions based on sound investing principles.

Mutual funds include:

Professional portfolio management Streamlined and convenient administration Risk management through diversification Innovative solutions that meet a range of investment objectives and

evolving investor needs Opportunities for foreign and domestic investment that may not

otherwise be directly accessible to investors Liquidity, enabling investors to respond to changes in their personal

circumstances Access to investing for all types of people, including those who prefer

to invest small amounts at regular intervals Choice of purchase methods and fee structures, including full service,

fee-for-service and do-it-yourself Accountability and fairness to investors through industry regulation

and transparency

HISTORY MUTUAL FUNDS IN INDIA

The mutual fund industry in India started in 1963 with the formation of Unit Trust of India, at the initiative of the Government of India and Reserve Bank of India. The history of mutual funds in India can be broadly divided into four distinct phases

First Phase - 1964-1987

Unit Trust of India (UTI) was established in 1963 by an Act of Parliament. It was set up by the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial Development Bank of India (IDBI) took over the regulatory and administrative control in place of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs. 6,700 crores of assets under management.

Second Phase - 1987-1993 (Entry of Public Sector Funds)

1987 marked the entry of non-UTI, public sector mutual funds set up by public sector banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC). SBI Mutual Fund was the first non-UTI Mutual Fund established in June 1987 followed by Canbank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC established its mutual fund in June 1989 while GIC had set up its mutual fund in December 1990.

At the end of 1993, the mutual fund industry had assets under management of Rs. 47,004 crores.

Third Phase - 1993-2003 (Entry of Private Sector Funds)

The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI (Mutual Fund) Regulations 1996.The number of mutual fund houses went on increasing, with many foreign mutual funds setting up funds in India and also the industry has witnessed several mergers and acquisitions. As at the end of January 2003, there were 33 mutual funds with total assets of Rs. 1,21,805 crores. The Unit Trust of India with Rs. 44,541 crores of assets under management was way ahead of other mutual funds.

Fourth Phase - since February 2003

In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust of India with assets under management of Rs. 29,835 crores as at the end of January 2003, representing broadly, the assets of US 64 scheme, assured return and certain other schemes. The Specified Undertaking of Unit Trust of India, functioning under an administrator and under the rules framed by Government of India and does not come under the purview of the Mutual Fund Regulations.The second is the UTI Mutual Fund, sponsored by SBI, PNB, BOB and LIC. It is registered with SEBI and functions under the Mutual Fund Regulations. With the bifurcation of the erstwhile UTI which had in March 2000 more than Rs. 76,000 crores of assets under management and with the setting up of a UTI Mutual Fund, conforming to the SEBI

Mutual Fund Regulations, and with recent mergers taking place among different private sector funds, the mutual fund industry has entered its current phase of consolidation and growth.The graph indicates the growth of assets over the years.

Emerging issues of the mutual fund industry in india:

BY end of JUNE 2010, Indian mutual fund industry reached more than Rs. 640000 crore.

100% growth in the last 6 years. Numbers of foreign AMC’S are in the queue to enter the Indian

markets. Our saving rate is over 23%, highest in he world. Only channelizing

There saving in mutual funds sector is required.

We have approximately 39 mutual funds which is must less than US having more than 800. There is a big scope for expansion.

‘B’ and ‘C’ class cities are growing rapidly. Today most of the mutual funds are concentrating on the ‘A’ class cities. Soon they will find scope in the growing cities.

Mutual fund can penetrate rural like the Indian insurance industry with simple and limited products.

SEBI allowing the MF’S to launch commodity mutual funds. Emphasis on better corporate governance. Trying to cube the trading practices.

CONCEPT OF MUTUAL FUNDS

Mutual fund is a trust that pools money from a group of investors (sharing common financial goals) and invest the money thus collected into asset classes that match the stated investment objectives of the

scheme. Since the stated investment objectives of a mutual fund scheme generally forms the basis for an investor's decision to contribute money to the pool, a mutual fund can not deviate from its stated objectives at any point of time. Every Mutual Fund is managed by a fund manager, who using his investment management skills and necessary research works ensures much better return than what an investor can manage on his own. The capital appreciation and other incomes earned from these investments are passed on to the investors (also known as unit holders) in proportion of the number of units they own.

MUTUAL FUND OPERATION FLOW CHART

WORKING OF MUTUAL FUND:-

A Mutual fund is a collection of stock, bonds, or other securities owned by a group of investors managed by a professional investment company. For an individual investor to have diversified the portfolio is difficult. But he can approach to such company and can invest into share. Mutual funds have become very popular since they make individual investors to invite in equity and debt security easy. when investor invest a particular amount in a mutual fund, he become the unit holder of corresponding units . In turn, mutual funds invest unit holder money in stock, bonds or other securities that earn interest or dividend.