EXECUTIVE SUMMARY

Mutual fund industry is on a booming path right now. With 44 players in the Indian market, the competition is like never before. Every company is claiming to give the best of the returns. The structure of the industry is such that it requires a vast, yet synchronized distribution network. The presence of middle man namely the distributors makes it even more critical to not only make investors happy with good returns but keep the distributors satisfied with best of services and excellent co-ordination with the fund house. So, the qualities of services offered become a critical area of concern.

I was privileged to work on a project with ‘Motilal Oswal Asset Management Company Ltd, with AAUM (Annual Assets Under Management) of over 367 crores, as on 31st March, 2012(source:www.amfiindia.com).

My project entitled, “Study on Mutual Fund industry and promotion of sales in Retail Vertical”, gave me the real insight into the mutual fund industry, as to how the services are rendered in financial service sector and what is the nitty-gritty of the flow of services.

The project was for the duration of 8 weeks, where the initial weeks were primarily focusing on operations side of the workflow. I observed how all the transactions are performed in the office and how it is processed in later stages. Then I had great learning opportunity as the latest ETF was launched by the MOAMC and thus I was closely involved in the promotional activities, giving me real insights of the industry. I had performed the sales function and worked in the Retail vertical. I generated many leads and empaneled many distributors to MOAMC and also observed how the Relationship Managers are undertaking their work.

The project aimed at studying the entire process and suggesting some ways to improve the functioning of sales as well as few operational aspects.

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INTRODUCTION

Mutual fund industry is on a booming path right now. With 44 players in the Indian market,

the competition is like never before. Every company is claiming to give the best of the

returns. The structure of the industry is such that it requires a vast, yet synchronized

distribution network. The presence of middle man namely the distributors makes it even

more critical to not only make investors happy with good returns but keep the distributors

satisfied with best of services and excellent co-ordination with the fund house. So, the

qualities of services offered become a critical area of concern.

I was privileged to work on a project with ‘Motilal Oswal Asset Management Company

Ltd, with AAUM (Annual Assets Under Management) of over 367 crores, as on 31st

March, 2012(source:www.amfiindia.com).

My project entitled, “Study on Mutual Fund industry and promotion of sales in Retail

Vertical”, gave me the real insight into the mutual fund industry, as to how the services are

rendered in financial service sector and what is the nitty-gritty of the flow of services.

The project was for the duration of 8 weeks, where the initial weeks were primarily

focusing on operations side of the workflow. I observed how all the transactions are

performed in the office and how it is processed in later stages. Then I had great learning

opportunity as the latest ETF was launched by the MOAMC and thus I was closely

involved in the promotional activities, giving me real insights of the industry. I had

performed the sales function and worked in the Retail vertical. I generated many leads and

empaneled many distributors to MOAMC and also observed how the Relationship

Managers are undertaking their work.

2

The project aimed at studying the entire process and suggesting some ways to improve the

functioning of sales as well as few operational aspects.

Mutual Fund is a mechanism for pooling the resources by issuing units to the investors and

investing funds in securities in accordance with objectives as disclosed in offer document.

Investments in securities are spread across a wide cross- section of industries and sectors

and thus the risk is reduced. Diversification reduces the risk because all stocks may not

move in the same direction in the same proportion at the same time. Mutual Fund issues

units to the investors in accordance with quantum of money by them.

Investors of mutual funds are known as Unit Holders.

The profits and losses are shared by the investors in proportion to their investments. The

Mutual Fund normally comes out with a number of schemes with different investment

objectives which are launched from time to time. A Mutual Fund is required to be registered

with SEBI which regulates securities markets before it can collect funds from the public.

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ORIGIN OF MUTUAL FUND

The origin of Mutual Fund industry in India is with the introduction of the concept of

Mutual Fund by UTI in the year 1963. Though the growth was slow, but it accelerated from

the year 1987 when non-UTI players entered the industry. In the past decades, Indian

mutual fund industry had seen dramatic improvements, both quality wise as well as quantity

wise before, the monopoly of the market had seen an ending phase, the AUM was Rs.67 bn.

The private sector entry to the fund family raised the AUM to Rs. 470 bn.

The mutual fund industry can be broadly put into four phases according to the development

of the sector. Each phase is briefly described as under:

FIRST PHASE-1964-87

UTI was established on 1963 by an Act of Parliament. It was set up by the Reserve bank of

India. In 1978 UTI was de-linked from the RBI and 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 AUM.

SECOND PHASE-1987-1993

Entry of non-UTI mutual funds SBI mutual fund was the first 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 (Oct 92), LIC in 1989 and GIC in 1990. The

end of 1993 Marked Rs.47,004 as AUM.

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THIRD PHASE-1993-2003

With the entry of private sector funds in 1993, a new era started in the Indian mutual fund

industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the

year in which the first mutual fund regulations came into being, under which all mutual

funds except UTI were to be registered and governed. The erstwhile Kothari Pioneer (now

merged with Franklin Templeton) was the first private sector mutual fund registered in July

1993.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 UTI with Rs.44, 541 crores of AUM was way ahead of other

mutual fund.

FOURTH PHASE-SINCE FEBRUARY 2003

This phase had bitter experience for UTI. It was bifurcated into two separate entities. One is

the specified undertaking of the UTI with AUM of Rs.29, 835 crores. The specified

undertaking of UTI, 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.

This second is the UTI mutual fund ltd, sponsored by SBI, PNB, BOB and LIC. It is

registered with SEBI and functions under the mutual fund regulation. With the bifurcation

of the rest while UTI which had in March 2000 more than Rs.76, 000 crores of AUM.

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GROWTH IN ASSETS UNDER MANAGEMENT

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FLOW CHART SHOWING THE WORKING OF MUTUAL FUND

ORGANISATION OF MUTUAL FUND

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MUTUAL FUNDS

OPEN ENDED FUNDS

CLOSE ENDED FUNDS

INTERVAL FUNDS

SYSTEMATIC INVESTMENT Plans

TYPES OF MUTUAL FUNDS

There are over 849 MF schemes available for investing today. This diversity may confuse

an investor. However, most mutual funds can be classified into various categories according

to the type of their structure.

On the Basis of Participation

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MUTUAL FUND

GROWTH SCHEME DIVIDEND SCHEME

DIVIDENDPAYOUT

DIVIDEND REINVESTMENT

MUTUAL FUND

FUND OF FUND

DEBT FUND

MONEY MARKET FUND

BALANCED FUNDEQUITY FUND

On Basis of Income distribution method :

On the Basis of Investment Objectives :

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EQUITY FUNDS

MARKET CAPS FUND

INDEX FUND

INDUSTRY

FUTURE GROWTH

SPECIAL

LARGE CAP

MID CAP

SMALL CAP

MIXED CAP

GROWTH

VALUETECHNOLOGY

PHARMA

FMCG

OTHERS

EXG TRADED

GOLD FUND

Equity Funds:

EMF invest corpus of the fund primarily in the stocks of public listed companies. Stocks

represent part ownership, or equity, in companies; many mutual funds invest primarily in

companies of particular types and are thus classified according to the underlying asset.

Equity fund managers employ different styles of stock picking when they make investment

decisions. EMF is not suitable for investors seeking regular income or those interested in

short-term returns. They are ideal for investors who have a long-term investment horizon.

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There are four constituents of a mutual fund in India:

1. The sponsor

2. The board of Trustees or Trustee Company,

3. The asset management company

4. The custodian

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Exchange traded Funds

ETFs are baskets of securities that are traded, on an exchange. Unlike regular OEMF, ETFs

can be bought and sold throughout the trading day like any stock. ETFs charge lower annual

expenses than index mutual funds.

However, investor must pay a brokerage to buy and sell ETF units, which can be an

important drawback for those who trade frequently or invest regular sums of money. An

exchange traded fund is similar to an index fund in that it will primarily invest in the

securities of companies that are included in a selected market index. However it may

choose to invest only in a representative sample of those securities only. The investment

objective of an ETF is to achieve the same return as a particular market index.

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ROLE OF REGULATOR IN INDIA

THE MONEY REGULATORS OF INDIA ARE:

SEBI – the capital markets regulators

The Government of India constituted Securities and Exchange of India, by an Act of

Parliament in 1992, as the apex regulator of all entities that either raise funds in the

capital markets or invest in capital market securities such as shares and debentures listed

on stock exchanges. Mutual funds have emerged as an important institutional investor in

capital market securities. Hence they come under the purview of SEBI. SEBI requires

all mutual funds to be registered with them. It issues guidelines for all mutual fund

operations including where they can invest, what investment limits and restrictions must

be complied with, how they should account for and income and expenses , how they

should make disclosures of information to the investors and generally acts in the issue

equity or debt, share registrars, custodians, bankers in the primary markets, stock

exchanges and brokers in the secondary markets and foreign and institutional investors

such as FIIs, offshore mutual funds with dedicated Indian mutual funds or venture

capital investors.

RBI – the money markets regulator

RBI as supervisor of Bank owned mutual funds: The first non-UTI mutual funds were

started by public sector banks. Banks come under the regulatory jurisdiction of the RBI .

Therefore, the operations of bank- owned mutual funds are governed by guidelines

issued by the Reserve Bank of India. Subsequently, it has been clarified that all mutual

funds, being primarily capital market players, come under the regulatory umbrella of

SEBI. Thus, the bank-owned funds continue to be under the joint supervision of both the

RBI and the SEBI. It is generally understood that all market related and investor related 13

activities of the funds are to be supervised by SEBI, while any issued concerning the

ownership of the AMCs by banks fall under the regulatory ambit of the RBI.

RBI as supervisor of money market mutual funds: RBI is the only government agency

that is charged with the sole responsibility to control the money supply in the country.

Therefore, it has the sole supervisory responsibility over all entities that operate in the

money markets, be it banks and companies that issue securities such as certificates of

deposit or commercial paper, or banks and mutual funds who are allowed to borrow

from or lend in all money market

Ministry of finance

The Ministry of finance, which is charged with implementing the government policies,

ultimately supervises both the RBI and the SEBI. Besides being the ultimate policy

making and supervising entity, the MOF has also been playing the role of an Appellate

Authority for any major disputes over SEBI guidelines on certain specific capital

market related guidelines- in particular any cases of insider trading or mergers and

acquisitions.

Company law board, Department of company affairs and Registrar of

companies

Mutual fund Asset Management Companies and corporate trustees are companies

registered under the companies act, 1956 and are therefore answerable to regulatory

authorities empowered by the companies Act. The primary legal interface for all

companies is the Registrar of Companies (RoC). RoC in turn is supervised by the

department of company affairs. The DCA forms part of the Company Law Board, which

is part of the Ministry of Law and Justice of the govt. of India.

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All AMC account and records are filed with the RoC who may demand additional

information and document from the company. The RoC plays the role of a watchdog

with respect to regulatory compliance by companies. The Company Law Board (CLB)

is the apex regulatory authority under the companies Act. While the CLB guides the

DCA, another arm of the CLB called Company Law Bench is the Appellate Authority

for corporate offences.

Stock Exchanges

Stock exchanges are self-regulatory organizations supervised by SEBI. Many closed-

ended schemes of mutual funds are listed on one or more stock exchanges through a

listing agreement between the fund and the stock exchange.

Office of the Public Trustee

Mutual funds, being Public Trusts are governed by the Indian Trust Act, 1882. The

Board of Trustee or the Trustee Company is accountable to the office of the Public

Trustee, which in turn reports to the charity commissioner.

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COMPANY PROFILE

MOTILAL OSWAL ASSET MANAGEMENT COMPANY

Motilal Oswal Asset Management Company Ltd. (AMC) is public limited company

incorporated under the Companies Act, 1956 on November 14, 2008, having its Registered

Office at 81/82, Bajaj Bhavan, Nariman Point, and Mumbai 400021. Motilal Oswal Asset

Management Company Ltd. has been appointed as the Investment Manager to Motilal

Oswal Mutual Fund vides Investment Management Agreement (IMA) dated May 21, 2009,

executed between Motilal Oswal Trustee Company Ltd. and Motilal Oswal Asset

Management Company Ltd.

The AMC is also registered with SEBI as a Portfolio Manager vides Registration No.

INP000000670 dated September 16, 2008 under SEBI (Portfolio Managers) Regulations,

1993 pursuant to the endorsement of Certificate of Registration as a Portfolio Manager held

by Motilal Oswal Securities Limited in the name of Motilal Oswal Asset Management

Company Limited with effect from October 21, 2010. The certificate is valid till September

15, 2011. There is no conflict of interest between the activities of managing the schemes of

Motilal Oswal Mutual Fund.

The board of directors of the asset management company comprises eminent personalities

with varied experience.

To understand the operations at MOAMC, it was necessary to observe the employee

structure at the office, to know the responsibility and accountability of every employee at

MOAMC.

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PRODUCTS OFFERED BY MOAMC

MOAMC at present has 5 different types of mutual funds in the market according to the

market situations/conditions and change with the demands.

1. MOST SHARES M50:

This is the first mutual fund introduced by MOAMC, Most shares M50 ETF was introduced

on 28th July 2010.ETF based on Nifty

Type of scheme: An open ended exchange traded fund.

Objective : The scheme seeks investment return that corresponds

(Before fees and expenses) generally performances of MOSt50 basket,

subject to the tracking error. However, there can be no assurance or

guarantee that the investment objective of the scheme would be

achieved.

Benchmark :MOSt 50 Basket and S&P CNX Nifty index

Cont. offer : On NSE, investor can buy/sell units of the scheme in round

lot of 1 unit and in multiple thereof.

Fund Manager : Mr. Rajnish Kr. Rastogi

India’s 1st Fundamentally weighted ETF based on S&P CNX Nifty Index (Nifty50) -

NSE Symbol: M50

It is essentially “Nifty50 Re-mixed”, consists of all stocks of Nifty50 but not in same

proportion

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Inception date of MOSt 50 Basket : 3rd April 2007

2. MOST SHARES MIDCAP 100:

This is the second mutual fund introduced by MOAMC, Most shares M100 ETF introduced

on31st January 2011. ETF based on Nifty

Type of scheme: An open ended exchange traded fund.

Objective : The scheme seeks investment return that corresponds

(Before fees and expenses) generally performances of CNX

Midcap index, subject to the tracking error. However, there can be no

assurance or guarantee that the investment objective of the scheme

would be achieved.

Benchmark : CNX Midcap index

Cont. offer : On NSE, investor can buy/sell units of the scheme in round

lot of 1 unit and in multiple thereof.

Fund Manager : Mr. Rajnish Kr. Rastogi

India's first Midcap ETF based on CNX Midcap Index. Midcap companies are hidden

gems as they are under-researched, under-owned and under-valued yet come with a

potential to become large caps. So here's your chance to invest in budding large caps.

Top five holdings : Ultra tech cement

Titan industries

Yes bank

Lic housing finance

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Colgate Palmolive

3. MOST SHARES NASDAQ 100:

This is the third mutual fund introduced by MOAMC, Most shares NASDAQ 100 ETF

introduced on 29th March 2011. ETF based on Nifty

Type of scheme: An open ended exchange traded fund.

Objective : The scheme seeks investment return that corresponds

(Before fees and expenses) generally performances of NASDAQ 100

index, subject to the tracking error. However, there can be no assurance

or guarantee that the investment objective of the scheme would be

achieved.

Benchmark : NASDAQ 100 index

Cont. offer : On NSE and BSE, investor can buy/sell units of the scheme

in round lot of 1 unit and in multiple thereof.

Fund Manager : Mr. Rajnish Kr. Rastogi

India's first US based ETF, Now Investors can access US stocks like Apple, Google,

Microsoft, Intel, Dell, Starbucks, Yahoo and many more that are part of NASDAQ-100;

that too in Indian Rupees.

Top five holdings:

o Apple Inc.

o Microsoft Corp

o Google Inc.

o Oracle Corp Com

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o Intel Corp

4. MOST 10 YEAR GILT FUND:

This is the fourth mutual fund introduced by MOAMC, Most 10 year Gilt Fund

introduced on 12th Dec 2011. ETF based on Nifty

Type of scheme: An open ended Gilt scheme.

Objective : The primary investment objective of the scheme is to generate credit

Risk-free return by investing in a portfolio of securities issued by the

central government & state government. However there can be no

assurance or guarantee that the investment objective of the scheme would

be achieved.

Benchmark : 10 years benchmarks GOI Data Securities and CRISIL Gilt Index.

Cont. offer : Minimum application amount : Rs 10000/- and in multiples of Rs

1/- after

Fund Manager: Mr. Abhiroop Mukherjee.

India’s first fund is to give easy access to 10 year bench mark government bonds.

{A Government security is a tradable security issued by the Central Government or the

State Governments, acknowledging the Government’s debt obligation. Such securities can

be short term (usually called Treasury Bills, with original maturities of less than 1 year) or

long term (usually called Government bonds or dated securities with original maturity of

one year or more)}.

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5. MOST GOLD SHARES:

This is the fifth mutual fund introduced by MOAMC, MOST GOLD SHARES

introduced on 22th Mar 2012. ETF based on Nifty

Type of scheme: An open ended Exchange traded fund.

Objective : The primary investment objective of the scheme is to generate credit

Risk-free return by investing in a portfolio of securities issued by the

central government & state government. However there can be no

assurance or guarantee that the investment objective of the scheme would

be achieved.

Benchmark : 10 years benchmarks GOI Data Securities and CRISIL Gilt Index.

Cont. offer : Minimum application amount : Rs 10000/- and in multiples of Rs

1/- after

Fund Manager: Mr. Abhiroop Mukherjee.

India’s first is fund to give easy access to 10 year bench mark government bonds.

{A Government security is a tradable security issued by the Central Government or the

State Governments, acknowledging the Government’s debt obligation. Such securities

can be short term (usually called Treasury Bills, with original maturities of less than 1

year) or long term (usually called Government bonds or dated securities with original

maturity of one year or more)}.

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INTRODUCTION TO THE PROJECT

My project is “Study on Mutual Fund industry and promotion of sales in Retail

Vertical” In the initial few weeks at MOAMC, my main objective was to get acquainted

with the mutual fund industry as a whole as well as understand various products and

schemes of Motilal Oswal.

I participated in all the functions being performed at the Delhi Branch of the MOAMC and

tried to understand the functioning of the mutual fund industry. This part has been covered

till now where I have mentioned the details of the industry and how its functioning affects

the investors.

Thus project involved firstly the understanding of the operational structure of MOAMC,

and then the functional analysis of the sales and how the leads are generated and investors

are attracted. I myself generated many leads and got investors for the MOAMC. My work

was deeply appreciated by Mr. Kshitiz Mahajan, Regional head, MOAMC, North India.

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PROJECT DETAILS

In the initial few weeks at Motilal Oswal Asset Management Company, my main

objective was to get acquainted with the mutual fund industry as a whole as well as

understand various products and schemes of Motilal Oswal.

I participated in all the functions being performed at the Delhi Branch of the

MOTILAL OSWAL ASSET MANAGEMENT COMPANY, and tried to understand

the functioning of the mutual fund industry. This part has been covered till now where

I have mentioned the details of the industry and how its' functioning affects the

investors.

Now my approach was to get familiarize with operations of the MOTILAL OSWAL

ASSET MANAGEMENT COMPANY, and it was a great learning opportunity as

MOTILAL OSWAL ASSET MANAGEMENT COMPANY, launched its latest fund

last year. I was closely involved with the entire hustle bustle associated with this fund

called NASDAQ 100.

Thus project involved firstly the understanding of the operational structure of

MOTILAL OSWAL ASSET MANAGEMENT COMPANY, and then the functional

analysis of the sales and how the leads are generated and investors are attracted. I

myself generated many leads and got investors for the MOAMC. My work was deeply

appreciated by Mr. Kshtiz Mahajan, Zonal head, MOAMC, North India.

After one month of internship MOAMC shifted me to Aarvee consultants for direct

sells and to meet different clients who are interested in Mutual funds and also to

convince database clients to invest money in Mutual funds

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OBJECTIVES OF THE PROJECT

At MOAMC included:

To visit various securities

To promote various schemes of MOAMC

To study engagement levels

Recall of schemes

Service levels

Removing communication gap

Network Strengthening

Information Dissemination

Providing relevant material and information

Trying to promote the less sales generating branches

Customer Queries (FAQs)

Send statements (hard and soft copy)

Current amount

Current NAV

Redemption amount not yet received

Dividend not yet received

To provide information regarding various schemes

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At Aarvee Consultants Included:

To get an insight knowledge of Mutual funds market.

Understanding different ratios and portfolios so as to tell the investors about the

terms and conditions with updated market situations, by this, managing the

relationship with the clients.

To know the Mutual Funds performance levels in the present market.

To analyze the comparative study between other leading MFs in the present market.

To know the awareness of MFs among different group of Investors.

Evaluating consumer feedback on ETFs.

Finding out ways and means to improve the services by MOAMC

I satisfied my objectives of the project in the following manner:

Complete insight knowledge about the MFs that were mentioned in the

project.

Different ratios with complete graphical representations were explained in

the project.

To know the consumer awareness, I have visited different customers so as to

analyze reviews about the Mutual funds and perception of the customers in

the present scenario.

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VARIOUS PROCESSES IN OPERTAIONS

Application acceptance process – commercial transaction

Time stamping process

Systematic transfer plan

Systematic investment plan

Return of undelivered documents

Non-commercial transaction

Addressing employees concern

QRC process

LMS- Lead Management System.

TARGETS TO BE MET

I was supposed to meet the following targets during my internship period:

To talk to at least 35 to 45 Walk-in clients per securities.

To make new distributors for MOAMC to promote sales.

To give information about Motilal Oswal products.

To tell the Clients and distributors about new Schemes, their specific attributes

their expected returns & why the Client should invest in this fund.

To solve clients queries.

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STRATEGIES EMPLOYED

I observed the processes mentioned vide supra and also talked to the personnel

involved. I tried to learn the nitty-gritties of the whole process. I took feedback from

the operations staff, taking their roles one by one and thus tried to note the processes

which involved duplications and thus avoidable delays in the system.

I had to visit various securities and meet all the persons concerned with the selling of

the ETFs. First few days, I accompanied one of the MOAMC personnel but after I

gained experience and confidence, I visited the branches all by myself.

After looking and interacting with various Walk-in clients, I could gain experience as

to who could be the potential investors. Their certain characteristics are:

Confident body language

Well, neat and clean dress

Polished shoes

Male gender (females generally don’t exercise the authority of investing)

Preferably middle aged &

Most important is the Gut-feeling

For selling various schemes /funds effectively and aggressively four points have to be

kept in mind: -

Efficient teamwork

Good relationship building

Efficient marketing strategies

Better pre and post sales services

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I took Empanelment forms, fact sheets and one-pagers with me to show and give them

to the potential investors. I also took laminated sheets with me to show them showing

the performance of top equity funds and SIP returns in the form of tables.

As we know data in the form of tables can be understood better, so that customer could

be persuaded easily. This all also helped me as I could build faith in them and they had

a genuine reason to trust me.

During the initial period I visited following branches and met the retailers and

distributors .i.e., HDFC Securities, SMC Consultants, Bajaj Capital Ltd, Integrated

Securities Ltd, Karvy Pvt. Ltd, Aditya Birla Money, Credent etc.

My task at all the above-mentioned branches was to:

To talk with walk-in clients and apprise them of the MOAMC products (equity

funds)

To promote sales of the MOAMC products to RM’s and other officials.

To get the feedback from the clients of their reasons for not investing in the

MOAMC products

During my training I also visited some of the distributors and IFA’s who were not

empanelled with Motilal Oswal Asset Management Company Ltd. My work was to

give complete details of MOAMC mutual funds to the distributors and convince them

to be empaneled with Motilal Oswal.

The empanelment form is attached below as Annexure 1

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DETAILS OF WOK DONE

Work of any AMC is to increase Sales and also at the same time remove

loopholes in the functioning. There are a lot of banks in Delhi and NCR selling

ETFs but only the branches, which are giving more of business, are taken care

of.

Since, a single Sr. Manager can’t concentrate on all of them. So management

trainees are very useful here and they perform the important function of

pushing forward the products and also getting the much-needed feedbacks

from the Retailers, Distributors, and Brokers.

Also, since attrition rate in the market at present is very high i.e. the persons

selling ETFs in different firms may change because of market dynamics. So, it

is very necessary to find out the details of all the persons selling investment

products

There is also a need to maintain proper communication with Retailers &

Distributors which will help AMC in promoting its products and thus

increasing its sales.

The AMCs also need to provide knowledge about new products and

performance of existing products and thus keeping the RMs updated.

The Walk-in clients need to be apprised about the latest products and their

queries have to be resolved and they have to be persuaded to invest in the ETF.

Thus the work of Management Trainees provides an overall view of

functioning of the ETF industry at its very grass root level.

Contacted with corporate and individuals and making them aware of Mutual

Funds (ETF’s), Gilt Fund and PMS.

The process created a database and fetched leads for the company

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AT MOAMC:

I was able to generate several leads for the company. I have made twelve new

empanelment of distributor to MOAMC.

I have visited several MF consultants who are empaneled with MOAMC to

discuss about Motilal Oswal mutual funds to increase sales by making them

aware of the product.

AT AARVEE CONSULTANTS:

During my internship, I was sent to Aarvee consultants located at Gagan vihar

(near preet vihar) for 20 days under the supervision of Mr. Ramesh Narula for

direct sales of Mutual funds. Under the guidance of Mr. Ramesh Narula, I am

able to meet several clients and my work is to give each and every detail of

mutual funds and to suggest best fund as per requirement of the client.

At this phase of my internship I was able to learn following things:

STEP- 1:

Know the requirement of client that for what purpose he/she is investing

the money.

How much money they want to invest.

For what period of time he/she want to invest.

Are they aware of MOAMC mutual funds?

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STEP- 2:

Advice best Mutual fund to the client.

Aware the client about all the risk factors of mutual funds.

Advice client to invest more and more money to generate more revenue.

Advice client to keep mutual funds for long period of time.

Built good relationship with client by being in touch with clients through

calls and emails.

Portfolio management: In this process I have to manage the portfolio of the

clients. Portfolio is the complete detail of any client. In this system clients can

easily see the status of their funds. If clients want to Sell/purchase their mutual

fund then they able to see which fund is giving well return and in another side

which fund are in loss.

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ACTIVITY SHEET

DATE ACTIVITY PERFORMED

May 7th, 2012-May 12th,2012 Learning and understanding about the

mutual fund industry.

May 13th,2012-May 18th2012 Study of mutual funds of Motilal Oswal

Asset Management Company.

May19th,2012-May 31st, 2012 Went to different distributors of Mutual

Funds for promotion of ETF’S offered by

MOAMC.

June 1st,2012-June 20th, 2012 Sent to Aarvee consultants by MOAMC

for direct sale of Mutual Funds

June 21st,2012-July 7th,2012 New empanelment of the distributors of

Mutual Fund and promotion of ETF’s to

new and existing distributors.

Weekly activity which I did in my internship was to first understand and study about

Mutual Fund industry later about the market of Mutual Funds and ETF’S of MOAMC.

Secondly promotion of ETF’S and Mutual Funds to the already existing empaneled

distributors was done by me. All details of Mutual Funds are available in the fact sheet

of the company which I used to explain the distributors along with relationship

managers.

Later on my job was shifted to Aarvee consultant for direct sales of Mutual Funds.

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In which I promoted and sold the mutual funds to data based clients. My job was to

convince the clients to invest money in mutual fund (ETF’s)

I even solved the queries of the clients related to their portfolio.

Lastly new empanelment of the distributors along with sales promotion of Mutual

Funds was done by me after returning to MOAMC.

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OBSERVATION FROM MOAMC ASSIGNMENT

POSITIVE RESPONES

It is Motilal Oswal and so I shall surely invest It’s because you have asked us we will surely invest, might be little, so

that your morale does not go down Yes, Earlier also Motilal Oswal has given good returns and so I will

invest Let me ask my CA What commission will I get back for investing in fund Let me think Any other benefit do I get except for returns which you expect

NEGATIVE RESPONSES

No, Motilal does not do any social work and so we don’t have any attachment with Motilal and even if it does give good returns, we are not interested at all

No, I will rather invest in property No, I will invest through my broker Investment through cheque or draft is problematic as I can invest only

white money, which I don’t have much to invest. Don’t really know about mutual fund No, I have invested in other options and policies I want to invest only in tax saving funds I have other plans for investment No one ever visited us from Motilal Oswal

Thus the responses varied from clients getting attracted to strong Brand Image of

Motilal Oswal to people shunning Motilal because of lack of Social work done by

Motilal.

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This also showed that people are still unaware about the mutual fund industry in

general and are wary about investing in MF’s.

OTHER INCIDENTAL FINDINGS:

Motilal Oswal has a very good Brand Name and Awareness. Because of which,

even if it’s services are not good, then also, the RM concerned person has to sell

Motilal Oswal ETFs due to the strong demand from the customers.

Promotion of Motilal ETFs in the surveyed Securities, Distributors, Retailers are

very less i.e., Banners, Stands, dispensers etc. are not available to them.

After sales Services is a major area of concern in all the surveyed Securities,

Distributors, and Retailers.

Incentives are provided after a long time

Gifts like pens, stands, diaries etc. are mostly provided to persons at higher

designation.

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The current AUM of MOAMC was 4.5 billion(appx) in which the

share of MF’s are:

44%

7%

19%

17%

13%

Sales contribution

10 yr Giit fundGold ETFM-50 ETFMidcap-100 ETFNasdaq-100 ETF

At the time of my internship the share market was at 16000 (BSE

Sensex) and 4900 (Nifty) which was very low as compared to the

share market of last 2 years.

So the response of all products was not good as compared to earlier

time. But After looking the market condition MOAMC launched 2

new products Gold ETF and Nasdaq 100 ETF last year.

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Current observation of all the products of MOAMC is changed due to market condition

and the graphical representation is shown below

10%

32%

5%8%

45%

Current Response

10 year gilt fundGold ETFM-50 ETFMidcap-100 ETFNasdaq-100 ETF

This happens due to increasing price of gold and value of dollar as compared to rupee

in Indian marketing clients wants to invest in these funds. As Nasdaq-100 fund is a

good vehicle to participate in the much-awaited economic recovery in the US economy

and the developed nations and gold prices are going higher day by day in current

scenario in Indian economy.

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OBSERVATION FROM AARVEE ASSIGNMENT

Throughout the process of query handling of the clients I concluded that different people have different requirements. I analyzed the preferences of the customers for buying mutual funds according to

Investment Needs. Occupation Preference of Investment options

Preferences of funds Reasons for not spending in Mutual funds

Objective behind investing in mutual funds.

These criteria showed all the reasons behind buying a mutual fund. This will depend on a customer if they buy mutual funds on the basis of above mentioned criteria.

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Graphical Representation (Primary)

To build a corpus for the retirement

23%

To save for children’s education /marriage

13%

To provide for medical emergencies

12%

To provide for family financial securities

45%

To create wealth5%

All the above2%

Investment Needs

From the above graph, it is clear that there are many people who are interested in investing in mutual fund for the sake of their family financial security. From the above graph it also reveals that the minor portion of the graph i.e. to build a corpus for retirement does not play a major role in the investment decisions.

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EMPLOYEE

BUSINESS

STUDENT

OTHERS

0 5 10 15 20 25 30 35

Occupation

Series1

In terms of occupation it was seen by me that the investors in mutual fund industries are maximum employees and then businessman which includes the number of participants and the type of participants.

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22%

7%

28%

23%

7%

13%

Preference of Investment options

BANKPOSMUTUAL FUNDSHAREBOND AND DEBENTUREINSURANCE

Various investment options available to the individuals are Bank Deposits, Post Office

(PO) Schemes, Mutual Funds, Shares etc. and investors put their money according to

their financial needs and risk appetite.

Majority of the respondents prefer share, bank and mutual fund as their favorite

investment option.

However, about 28 % of respondents favor mutual funds as the most preferred

investment options across the groups; this trend clearly shows the traditional

investment attitude still remains in the Investors’ mind.

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40%

23%

17%

20%

REASONS FOR NOT INVESTING IN MUTUAL FUNDS

Lack of knowledgeRisky investmentLack of guidanceLow return

Respondents from the student and unmarried group does not invest in ETFs because of

lack of knowledge whereas working people with younger children does not invest in

the MF because of lack of guidance in the right kind of investment portfolio . Retired

people say that they are not in a position of taking risk in that stage of life (Reaping

Stage).Overall among all the respondents who do not want to invest in the MF, show

that the lack of knowledge is the main factor not investing (40 %).

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42%

28%

17%

13%

OBJECTIVES BEHIND INVESTMENT IN MF

Growth of investmentTax SavingsRegular Dividend

Assured Return

Investment objectives can be classified as

Growth of Investments

Regular Dividend

Tax Saving

Assured Return

Majority of the respondents invest in mutual fund for growth of investment.

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22%

43%

35%

FUND PREFERENCE

DEBTEQUITYHYBRID

Majority of the investors across the investor groups prefer equity fund (43%) and also

for hybrid funds (35%).

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FINDINGS

Most Shares NASDAQ 100 is the best performing mutual fund at present.

Most gold ETF has also shown good returns. But it will take some time to take a

stable position in the market as the fund is comparatively new.

Most M 50 reflects the Nifty index. Thus their return depends only on the profits of

the companies listed by nifty.

Most Midcap 100 reflects the CNX Midcap index. It has shown returns as its

portfolio mainly consists of consumer non-durables, banks, pharmaceuticals etc.

Most gilt fund is a fund for the investors who do not wish to take risks and get fixed

returns like the other G-sec funds.

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MAJOR LEARNING

The working with MOAMC, one of the leading mutual fund houses of the country has

been a thoroughly enriching and enthralling experience.

I got a real insight into the functioning of a Business conglomerate like Motilal

Oswal

Working with the sales, I learnt the importance of patience, persuasive

communication and perseverance

I also got to know the spontaneity required in the sales department where one

faces different kinds of clients and thus different kinds of challenges every day

and how one has to come up with them on one’s own.

I experienced the thrill of making the lead successful when one of my clients

invested Rs 1, 00,000 in the NFO and appreciation I received from the Zonal

Head for the same.

I also envisaged that how each and every process is important in the overall

efficiency of the functioning of the financial services sector.

The training also helped me in improving my relationship creating and

managing skills with better communication skills

The Internship also helped me interacting with persons ranging from very high

standard to a low class people

Study of Mutual Fund concept

Study of different types of mutual funds

Study of structure of an AMC’s

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Other Learning’s during Summer Internship

Professionalism

Marketing Skills – how to deal with clients and pitch the product

Enhanced my knowledge of the working and operations in mutual fund industry.

Learned about different types of financial products offering by Motilal Oswal

Mutual Fund and how best they meet the client needs.

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RECOMENDATIONS

Spending two quality months at Motilal Oswal, Delhi Branch, was quite an enriching

experience. I learnt a lot about the functioning of the mutual fund industry and also

how a specific product is launched. Based on my observations and also feedbacks from

various colleagues, I would like to suggest following recommendations, which, in my

view, can improve the functioning and increase the efficiency of work at MOAMC:

The Retail investors must be attracted by some small gifts or other benefits so

that the target segment increases. This will automatically improve the hit ratio.

The marketing strategy has to be more aggressive. With more and more

mutual funds launching their products, there is urgent need to beat the

competition. Here more audio-visual strategies should be adopted, targeted

specifically at the retail investor.

The Relationship Managers (excepting those from Motilal) should be properly

incentivized so as to give push to MOAMC products over other Mutual funds.

“There is a very slight different in products of different AMC’s, at present

the services provided by the company is the key.” Thus the company

providing better services will rule the roost.

Motilal Oswal should focus on the improving their promotional activities i.e.,

they should provide banners, stands, dispensers etc. to the retailers, distributors.

There should be proper care of the Pay back commission.

At least once in month, Persons dealing in ETFs like the Brokers, Dealers etc.

must be visited, so that their queries related to fund are solved and anything

they need should be timely served.

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After-sales service should be given more care as after the investor has invested,

he does not get any correspondence from RM and this gives bad mouth-to-

mouth publicity to the ETF.

There should be a structured and standardized feedback system so that

regular feedbacks can be taken from the RMs and investors, and any major

complaints thus can be timely addressed.

There is need, especially for Motilal Oswal to do some works of CSR

(Corporate Social Responsibility) so that goodwill of the company is raised in

the eyes of an average retail investor.

Best time to invest in stock market is when it is down because with same

investment money he will get more value.

Mutual Fund is the best way to enter into market particularly for those investors

who want good returns with minimum risk as fund of mutual funds is handled by

an expert.

To get good returns investor must invest considering the time horizon of at least

two to three years. This will help him in getting good returns.

Portfolio management is a difficult task. So fund managers must choose optimal

number of securities which meets the objectives of fund.

Mutual Fund Companies must devise fund considering the end investor in mind.

Individual investors must also choose a basket of securities instead of making

investment in only one or two instruments, so that even if one instruments return

is negative other instruments return can compensate that.

Diversification of portfolio is must as it will reduce the unsystematic risk and

give the return an edge.

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CONCLUSION

The future of mutual funds is growing at a very high pace. Indian equity markets have

been transforming, which is a continuous process in the converging. The industry is

fast approaching its adolescent stage. Taking this thing into consideration, there are

lots of opportunities for Motilal Oswal Mutual Funds to tap the golden opportunities

from the Indian market.

MOAMC has emerged as a very strong player in the field of wealth management

giving stiff competition to all the established players. It is expanding its area of

business, if the progress of MOAMC goes in the same way, the total AUM of Motilal

Oswal Asset Management will cross four hundred Crores by the next year. They have

much potential to expand their distribution network in northern India.

The company is currently following huge investment and growth strategies. Hence the

firm should be selective using growth strategies. This is not to undermine the bright

future of MOAMC, just a check to be a cautious.

People in India are little aware of Mutual Funds but are still averse to it because they

still consider investing in mutual funds as a risky business. Equity will become one of

the most sought after investment avenues. The only thing, which the equity investment

industry needs to focus on, is that they should have a strong network, strive for good

performance by well researched investment decisions, prompt services, more

customer- oriented products and an efficient system to spread more and more

awareness about equity investments- mutual funds and portfolio management services,

etc. In this way, MOAMC will become the market leader not just in terms of AUM but

also customer base, returns, etc.

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BIBLIOGRAPHY

Websites

www.google.co.in

www.motilaloswal.com

www.motilaloswal.com/assetmanagement

www.mostshares.com

www.amfiiindia.com

www.crisil.com

www.moneycontrol.com

www.mutualfundsindia.com

www.valueresearchonline.com

www.moneylife.com

www.crisilratings.com

www.franklinindiatempleton.com

www.nseindia.com

www.bseindia.com

www.fundoodata.com

www.justdial.com

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