109442875-Project-Report-on-Mutual-Funds.doc

A PROJECT REPORT ON

“MUTUAL FUND- A TOOL FOR INCREASING WEALTH”

Submitted in p!ti" #u"#i""ment #$!

MASTER OF %USINESS ADMIMISTRATION &AFFILATED %' MAHAMA'A TECHNICAL UNI(ERSIT')

NOIDA *

INSTITUTE OF TECHNOLOG' + SCIENCE GHA,IA%AD

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P!$#0 ANUSHA AGARWAL

TIN/U SAINI M%A %t1&23455- 3456* 5

MANAGEMENT DEPARTMENT DATED: ____________ CERTIFICATE

This is to certify that TINKU SAINI has done his SummerTraining Project on“ MUTUAL FUND-A TOOL FOR INCREASING WEALTH” in ANAND RATHI Delhi under the supervision and guidance of his guide and that report embodies the or! of candidate himself"

(Prof. ANUSHA AGARWAL) Inte!n" 7uide

3

DECLERATION

I hereby declare that this Project Report etitled “T!E "UTUA# $UND % A T&&# $&R IN'REASIN( )EA#T! is s*b+itted i the partial ,*l,ill+et o, the re-*ire+et o, "aster o, .*siess Ad+iistratio /".A0 o, INSTITUTE &$ TE'!N&#&(1 2 S'IEN'E3 (!A4IA.AD is based o pri+ary 2 secodary data ,o*d by +e i 5ario*s depart+ets3 boo6s3 +a7a8ies ad 9ebsites 2 'ollected by +e i *der 7*idace o, "R RA;EE< S!UK#A

DATE:

TINKU SAINI ".A /=>??@=>?0



AC/NOWLEDGEMENT

8G!titude i9 n$t  t2in7 $# e:p!e99i$n; it i9 m$!e mtte! $# #ee"in708

There is al9ays a sese o, 7ratit*de 9hich oe eBpress to9ards others ,or their help ad s*per5isio i achie5i7 the 7oals This ,or+al piece o, ac6o9led7e+et is a atte+pt to eBpress the ,eeli7 o, 7ratit*de to9ards people 9ho help,*l +e i s*ccess,*lly co+pleti7 o, +y traii7 I 9o*ld li6e to eBpress +y deep 7ratit*de to MR0 TIN/U SAINI +y traii7 coordiator ,or their costat co@operatio !e 9as al9ays there 9ith his co+petet 7*idace ad 5al*able s*77estio thro*7h o*t the p*rs*ace o, this research project Special tha6s to MR0SANJEE( SHU/LA 9ho 7*ided +e to 9or6 hoestly ad to 7i5e 5al*able s*77estio ,or i+pro5i7 +y 9or6 #ast b*t ot least I 9o*ld also li6e to place o, appreciatio to all the respodets 9hose resposes 9ere o, *t+ost i+portace ,or the project Abo5e all o 9ords ca eBpress +y ,eeli7s to +y parets3 ,rieds all those persos 9ho s*pported +e d*ri7 +y project I a+ also tha6,*l to all the respodets 9hose cooperatio 2 s*pport has helped +e a lot i collecti7 ecessary i,or+atio I 9o*ld also li6e to tha6 al+i7hty (od ,or his blessi7s sho9ered o +e d*ri7 the co+pletio o, project report

&TIN/U SAINI*

C

PREFACE

"aster o, .*siess Ad+iistratio is a co*rse3 9hich co+bies both theory ad its applicatios as its cotets o, st*dy i the ,ield o, +aa7e+et As part ad parcel o, this co*rse3 e5ery aspirat has to *der7o at least siB to ei7ht 9ee6s “Id*strial Traii7” i a or7ai8atio The p*rpose o, this traii7 is to eBpose the st*det o, +aa7e+et scieces 9ith real li,e sit*atios eBisti7 i the or7ai8atio ad to pro5ide a isi7ht ito the 5ario*s ,*ctios carried o*t 9ithi the or7ai8atio ad ca 5is*ali8e thi7s 9hat they ha5e bee ta*7ht i classroo+s Ed*catio beco+es +ore +eai7,*l 9he its theoretical aspects are co+bied 9ith practical eBperiece&e@ca@easily@o5erco+e@the@,ear o, @joii7@or7aisatio@a,ter @the@co+pletio@o, the@ co*rse@as@thee5iro+et@o@lo7er @re+ais@ali7@to@hi+@ad@oe@ca@easily@,ita place@,or @ the+sel5esAct*ally3 it is the li,e ,orce o, +aa7e+et I 9as ,ort*ate eo*7h to do +y traii7 i ANAND RAT!I As a co+ple+etary to traii73 e5ery traiee has to prepare ad s*b+it a report o the 9or6i7 o, the or7ai8atio This report is i coti*atio o, that traditio It is a atte+pt to preset a acco*t o, practical 6o9led7e ad obser5atios 7athered d*ri7 the traii7 ANAND RAT!I is oe o, the Idias leadi7 9ealth +aBi+isatio .rad that eco+pass e5ery sphere o, li,e I a short spa o, ti+e3 ANAND RAT!I has set a eBa+ple by ha5i7 a steady ad co,idet jo*rey to 7ro9th ad s*ccess



'&NTENTS

?

Declaratio

=

Ac6o9led7e+et



Pre,ace C

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EBec*ti5e S*++ary



INTR&DU'TI&N

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'&"PAN1 PR&$I#E

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A## A.&UT "UTUA# $UND

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RESEAR'! "ET!&D&#&(1 ?>

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DATA ANA#1SIS 2 INTERPRETATI&N

$INDIN(S

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SU((ESTI&N 2 RE'&""ENDATI&NS

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'&N'#USI&N

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.I.#&(RAP!1

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#I"ITATI&N ?

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ANNEJURES

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EJE'UTI
The ,irst part 7i5es a isi7ht abo*t "*t*al $*d ad its 5ario*s aspects3 the 'o+pay Pro,ile3 &bjecti5es o, the st*dy3 Research "ethodolo7y &e ca ha5e a brie, 6o9led7e abo*t "*t*al $*d ad its basics thro*7h the Project The secod part o, the Project cosists o, data ad its aalysis collected thro*7h s*r5ey doe o =>> people $or the collectio o, Pri+ary data I +ade a -*estioaire ad s*r5eyed o, =>> people I also ta6e iter5ie9 o, +ay People those 9ho 9ere co+i7 at the S.I .rach 9here I doe +y Project I 5isited other A"'s i Dehradoo to 7et so+e 6o9led7e related to +y topic I st*died abo*t the prod*cts ad strate7ies o, other A"'s i Dehradoo to 6o9 9hy people pre,er to i5est i those A"'s This Project co5ers the topic “T!E "UTUA# $UND % A T&&# $&R IN'REASIN( )EA#T!” The data collected has bee 9ell or7 ai8ed ad preseted I hope the research ,idi7s ad cocl*sio 9ill be o, *se



'hapter @ ? Itrod*ctio <

INTRODUCTION TO MUTUAL FUND AND ITS (ARIOUS ASPECTS0

"*t*al ,*d is a tr*st that pools the sa5i7s o, a *+ber o, i5estors 9ho share a co++o ,iacial 7oal This pool o, +oey is i5ested i accordace 9ith a stated objecti5e The joit o9ership o, the ,*d is th*s “"*t*al”3 ie the ,*d belo7s to all i5estors The +oey th*s collected is the i5ested i capital +ar6et istr*+ets s*ch as shares3 debet*res ad other sec*rities The ico+e eared thro*7h these i5est+ets ad the capital appreciatios reali8ed are shared by its *it holders i proportio the *+ber o, *its o9ed by the+ Th*s a "*t*al $*d is the +ost s*itable i5est+et ,or the co++o +a as it o,,ers a opport*ity to i5est i a di5ersi,ied3 pro,essioally +aa7ed bas6et o, sec*rities at a relati5ely lo9 cost A "*t*al $*d is a i5est+et tool that allo9s s+all i5estors access to a 9ell@ di5ersi,ied port,olio o, e-*ities3 bods ad other sec*rities Each shareholder participates i the 7ai or loss o, the ,*d Uits are iss*ed ad ca be redee+ed as eeded The ,*ds Net Asset 5al*e /NA<0 is deter+ied each day I5est+ets i sec*rities are spread across a 9ide cross@sectio o, id*stries ad sectors ad th*s the ris6 is red*ced Di5ersi,icatio red*ces the ris6 beca*se all stoc6s +ay ot +o5e i the sa+e directio i the sa+e proportio at the sa+e ti+e "*t*al ,*d iss*es *its to the i5estors i accordace 9ith -*at*+ o, +oey i5ested by the+ I5estors o, +*t*al ,*ds are 6o9 as *it holders

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)he a i5estor s*bscribes ,or the *its o, a +*t*al ,*d3 he beco+es part o9er o, the assets o, the ,*d i the sa+e proportio as his cotrib*tio a+o*t p*t *p 9ith the corp*s /the total a+o*t o, the ,*d0 "*t*al $*d i5estor is also 6o9 as a +*t*al ,*d shareholder or a *it holder Ay cha7e i the 5al*e o, the i5est+ets +ade ito capital +ar6et istr*+ets /s*ch as shares3 debet*res etc0 is re,lected i the Net Asset
AD(ANTAGES OF MUTUAL FUND

•

Port,olio Di5ersi,icatio

•

Pro,essioal +aa7e+et

•

Red*ctio L Di5ersi,icatio o, Ris6

•

#i-*idity

•

$leBibility 2 'o5eiece

•

Red*ctio i Trasactio cost

•

Sa,ety o, re7*lated e5iro+et

•

'hoice o, sche+es

•

Trasparecy

DISAD(ANTAGE OF MUTUAL FUND

•

No cotrol o5er 'ost i the !ads o, a I5estor

•

No tailor@+ade Port,olios

•

•

"aa7i7 a Port,olio $*ds Di,,ic*lty i selecti7 a S*itable $*d Sche+e

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'hapter % = 'o+pay Pro,ile

13

INTRODUCTION TO ANAND RATHI

ANAND RATHI

AadRathi is a leadi7 ,*ll ser5ice sec*rities ,ir+ pro5idi7 the etire 7a+*t o, ,iacial ser5ices The ,ir+3 ,o*ded i ?FFC by "r AadRathi3 today has a pa Idia presece as 9ell as a iteratioal presece thro*7h o,,ices i D*bai ad .a76o6 AR pro5ides a breadth o, ,iacial ad ad5isory ser5ices icl*di7 9ealth +aa7e+et3 i5est+et ba6i73 corporate ad5isory3 bro6era7e 2 distrib*tio o, e-*ities3 co++odities3 +*t*al ,*ds ad is*race @ all o, 9hich are s*pported by po9er,*l research tea+s The ,ir+s philosophy is etirely cliet cetric3 9ith a clear ,oc*s o pro5idi7 lo7 ter+ 5al*e additio to cliets3 9hile +aitaii7 the hi7hest stadards o, eBcellece3 ethics ad pro,essioalis+ The etire ,ir+ acti5ities are di5ided across distict cliet 7ro*ps: Idi5id*als3 Pri5ate 'liets3 'orporate ad Istit*tios ad 9as recetly ra6ed by Asia "oey =>>G poll a+o7st So*th Asias top  9ealth +aa7ers ,or the *ltra@rich

5=

A%OUT LOGO

AadRathi is 9ritte i 7old letteri7 9ith a 7ree bac67ro*d It stads ,or t*ri7 yo*r +oey to 7old (ree is the colo*r o, +oey ad 7ro9th The 7old letteri7 idicates 9ealth ad prosperity The ,ot is classy ad serio*s It 7i5es a persoal ,eel3 a sese o, sec*rity o, yo*r +oey bei7 i sa,e hads The baselie behid e5ery s*ccess,*l i5estorMis *derstated ThatMs 6eepi7 i lie 9ith o*r philosophy o, bei7 cliet cetric The ,oc*s is o cliet )e j*st 9or6 behid the scees to +a6e +oey ,or cliet MILESTONES 

5<<=. Started acti5ities i cos*lti7 ad Istit*tioal e-*ity sales



5<<>. Set *p a

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5<


5<<<. #ead +aa7ed ,irst IP& ad



3445. Iitiated



3443. Retail b*siess eBpasio reco++eces 9ith



3446. )ealth "aa7e+et assets

9ith sta,, o, ? research des6 ad e+paelled 9ith +ajor istit*tioal i5estors bro6era7e ser5ices la*ched

eBec*ted ,irst " 2 A deal

)ealth "aa7e+et Ser5ices o9ership +odel

cross Rs?>> crores Is*race bro6i7 la*ched #a*ch o,

)ealth "aa7e+et ser5ices i D*bai Retail .rach et9or6 eBceeds > 

344=. 'o++odities bro6era7e ad real

estate ser5ices itrod*ced3 )ealth "aa7e+et assets

cross Rs>>> crores3 Istit*tioal e-*ities b*siess rela*ched ad seior research tea+ p*t i 

place Retail .rach et9or6 eBpads across ?>> locatios 9ithi Idia 344>. Real Estate Pri5ate E-*ity $*d #a*ched3 Retail .rach et9or6 eBpads across =>> locatios 9ithi Idia ?



344@. AR "iddle East3 )&S

ac-*ires +e+bership o, D*bai (old 2 'o++odity EBcha7e

/D('J0 Ra6ed a+o7st So*th Asias top  9ealth +aa7ers ,or the *ltra@rich by Asia "oey =>>G poll3 Ra6ed Gth i $1=>>G ,or All Idia .ro6er Per,or+ace i e-*ity distrib*tio i the !i7h Net 9orth Idi5id*als /!NI0 'ate7ory3 Ra6ed Fth i the Retail 'ate7ory ha5i7 +ore tha  +ar6et share 'o+pletes its presece i all States across the co*try 9ith o,,ices at >>O locatios 9ithi Idia 

344?. 'iti7ro*p
*p ?FF e-*ity sta6e Retail c*sto+er

crosses =>> tho*sad Establishes preseces i o5er C> locatios

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MUTUAL FUNDS ALL A%OUT MUTUAL FUNDS



WHAT IS MUTUAL FUND



%' STRUCTURE



%' NATURE



EUIT' FUND



DE%T FUNDS



%' IN(ESTMENT O%JECTI(E



OTHER SCHEMES



PROS + CONS OF IN(ESTING IN MUTUAL FUNDS



AD(ANTAGES OF IN(ESTING MUTUAL FUNDS



DISAD(ANTAGES OF IN(ESTING MUTUAL FUNDS



MAJOR PLA'ERS OF MUTUAL FUNDS IN INDIA



HISTOR' OF THE INDIAN MUTUAL FUND INDUSTR'



CATEGORIES OF MUTUAL FUNDS



IN(ESTMENT STRATEGIES



WOR/ING OF A MUTUAL FUND



GUIDELINES OF THE SE%I FOR MUTUAL FUND 5?



COMPANIES DISTRI%UTION CHANNELS



DOES FUND PERFORMANCE AND RAN/ING PERSISTB



PORTFOLIO ANAL'SIS TOOLS

RESEARCH METHODOLOG'



O%JECTI(E OF RESEARCH



SCOPE OF THE STUD'



DATA SOURCES



SAMPLING



DATA ANAL'SIS



ANNEURES

?

HISTORY OF THE INDIAN MUTUAL FUND INDUSTRY The +*t*al ,*d id*stry i Idia started i ?FG 9ith the ,or+atio o, Uit Tr*st o, Idia3 at the iitiati5e o, the (o5er+et o, Idia ad Reser5e .a6 Tho*7h the 7ro9th 9as slo93 b*t it accelerated ,ro+ the year ?FH 9he o@UTI players etered the Id*stry I the past decade3 Idia +*t*al ,*d id*stry had see a dra+atic i+pro5e+et3 both -*alities 9ise as 9ell as -*atity 9ise .e,ore3 the +oopoly o, the +ar6et had see a edi7 phase the Assets Uder "aa7e+et /AU"0 9as RsGH billio The pri5ate sector etry to the ,*d ,a+ily raised the A*+ to Rs CH> billio i "arch ?FF ad till April =>>C it reached the hei7ht i, Rs ?C> billio The "*t*al $*d Id*stry is ob5io*sly 7ro9i7 at a tre+edo*s space 9ith the +*t*al ,*d id*stry ca be broadly p*t ito ,o*r phases accordi7 to the de5elop+et o, the sector Each phase is brie,ly described as *der Fi!9t P29e  5<@=-?

Uit Tr*st o, Idia /UTI0 9as established o ?FG by a Act o, Parlia+et by the Reser5e .a6 o, Idia ad ,*ctioed *der the Re7*latory ad ad+iistrati5e cotrol

o, the Reser5e .a6 o, Idia I ?FH UTI 9as de@li6ed ,ro+ the R.I ad the Id*strial De5elop+et .a6 o, Idia /ID.I0 too6 o5er the re7*latory ad ?F

ad+iistrati5e cotrol i place o, R.I The ,irst sche+e la*ched by UTI 9as Uit Sche+e ?FGC At the ed o, ?F UTI had RsG3H>> crores o, assets *der +aa7e+et Se1$nd P29e  5<?-5<<6 &Ent! $# Pub"i1 Se1t$! Fund9*

?FH +ar6ed the etry o, o@ UTI3 p*blic sector +*t*al ,*ds set *p by p*blic sector ba6s ad #i,e Is*race 'orporatio o, Idia /#I'0 ad (eeral Is*race 'orporatio o, Idia /(I'0 S.I "*t*al $*d 9as the ,irst o@ UTI "*t*al $*d established i ;*e ?FH ,ollo9ed by 'aba6 "*t*al $*d /Dec H03 P*jab Natioal .a6 "*t*al $*d /A*7 F03 Idia .a6 "*t*al $*d /No5 F03 .a6 o, Idia /;* F>03 .a6 o, .aroda "*t*al $*d /&ct F=0 #I' established its +*t*al ,*d i ;*e ?FF 9hile (I' had set *p its +*t*al ,*d i Dece+ber ?FF>At the ed o, ?FF3 the +*t*al ,*d id*stry had assets *der +aa7e+et o, RsCH3>>C crores T2i!d P29e  5<<6-3446 &Ent! $# P!ite Se1t$! Fund9*

?FF 9as the year i 9hich the ,irst "*t*al $*d Re7*latios ca+e ito bei73 *der 9hich all +*t*al ,*ds3 eBcept UTI 9ere to be re7istered ad 7o5ered The erst9hile Kothari Pioeer /o9 +er7ed 9ith $ra6li Te+pleto0 9as the ,irst pri5ate sector +*t*al ,*d re7istered i ;*ly ?FF

The ?FF SE.I /"*t*al $*d0 Re7*latios 9ere s*bstit*ted by a +ore co+prehesi5e ad re5ised "*t*al $*d Re7*latios i ?FFG The id*stry o9 ,*ctios *der the SE.I /"*t*al $*d0 Re7*latios ?FFG As at the ed o, ;a*ary =>>3 there 9ere  +*t*al ,*ds 9ith total assets o, Rs ?3=?3> crores

F$u!t2 P29e  9in1e Feb!u! 3446

I $ebr*ary =>>3 ,ollo9i7 the repeal o, the Uit Tr*st o, Idia Act ?FG UTI 9as bi,*rcated ito t9o separate etities &e is the Speci,ied Uderta6i7 o, the Uit Tr*st o, Idia 9ith assets *der +aa7e+et o, Rs=F3 crores as at the ed o, ;a*ary =>>3 represeti7 broadly3 the assets o, US GC sche+e3 ass*red ret*r ad certai other sche+es The secod is the UTI "*t*al $*d #td3 sposored by S.I3 PN.3 .&. ad #I' It is re7istered 9ith SE.I ad ,*ctios *der the "*t*al $*d Re7*latios cosolidatio ad 7ro9th As at the ed o, Septe+ber3 =>>C3 there 9ere =F ,*ds3 9hich +aa7e assets o, Rs??> crores *der C=? sche+es

35

CATEGORIES OF MUTUAL FUND.

==

"*t*al ,*ds ca be classi,ied as ,ollo9 : 

%9ed $n t2ei! 9t!u1tu!e.

•

&pe@eded ,*ds: I5estors ca b*y ad sell the *its ,ro+ the ,*d3 at ay poit o, ti+e

•

'lose@eded ,*ds: These ,*ds raise +oey ,ro+ i5estors oly oce There,ore3 a,ter the o,,er period3 ,resh i5est+ets ca ot be +ade ito the ,*d I, the ,*d is listed o a stoc6s eBcha7e the *its ca be traded li6e stoc6s /E73 "or7a Staley (ro9th $*d0 Recetly3 +ost o, the Ne9 $*d &,,ers o, close@eded ,*ds pro5ided li-*idity 9ido9 o a periodic basis s*ch as +othly or 9ee6ly Rede+ptio o, *its ca be +ade d*ri7 speci,ied iter5als There,ore3 s*ch ,*ds ha5e relati5ely lo9 li-*idity



%9ed $n t2ei! ine9tment $be1tie. Euit #und9: These ,*ds i5est i e-*ities ad e-*ity related istr*+ets )ith

,l*ct*ati7 share prices3 s*ch ,*ds sho9 5olatile per,or+ace3 e5e losses !o9e5er3 short ter+ ,l*ct*atios i the +ar6et3 7eerally s+oothes o*t i the lo7 ter+3 thereby o,,eri7 hi7her ret*rs at relati5ely lo9er 5olatility At the sa+e ti+e3 s*ch ,*ds ca yield 7reat capital appreciatio as3 historically3 e-*ities ha5e o*tper,or+ed all asset classes i the lo7 ter+ !ece3 i5est+et i e-*ity ,*ds sho*ld be cosidered ,or a period o, at least @ years It ca be ,*rther classi,ied as: i* Inde: #und9 @

trac6ed Their

I this case a 6ey stoc6 +ar6et ideB3 li6e .SE SeseB or Ni,ty is

port,olio +irrors the bech+ar6 ideB both i ter+s o, co+positio

ad idi5id*al stoc6 9ei7hta7es ii* Euit die!9i#ied #und9-

?>> o, the capital is i5ested i e-*ities spreadi7

across di,,eret sectors ad stoc6s

iii* Diidend ie"d #und9-

it is si+ilar to the e-*ity di5ersi,ied ,*ds eBcept that they

i5est i co+paies o,,eri7 hi7h di5ided yields i* T2emti1 #und9- I5est ?>> o, the assets i sectors 9hich are related thro*7h

so+e the+e e7 @A i,rastr*ct*re ,*d i5ests i po9er3 costr*ctio3 ce+ets sectors etc * Se1t$! #und9-

I5est ?>> o, the capital i a speci,ic sector e7 @ A ba6i7 sector

,*d 9ill i5est i ba6i7 stoc6s i* ELSS@ E-*ity #i6ed Sa5i7 Sche+e pro5ides taB

bee,it to the i5estors

%"n1ed #und. Their i5est+et port,olio icl*des both debt ad e-*ity As a res*lt3 o the ris6@ret*r ladder3 they ,all bet9ee e-*ity ad debt ,*ds .alaced ,*ds are the ideal +*t*al ,*ds 5ehicle ,or i5estors 9ho pre,er spreadi7 their ris6 across 5ario*s istr*+ets $ollo9i7 are balaced ,*ds classes: i*

Debt-$!iented #und9 - I5est+et belo9 G i e-*ities

ii*

Euit-$!iented #und9

I5est at least G i e-*ities3 re+aii7 i debt

-

3=

Debt #und. They i5est oly i debt istr*+ets3 ad are a 7ood optio ,or i5estors

a5erse to idea o, ta6i7 ris6 associated 9ith e-*ities There,ore3 they i5est eBcl*si5ely i ,iBed@ico+e istr*+ets li6e bods3 debet*res3 (o5er+et o, Idia sec*rities ad +oey +ar6et istr*+ets s*ch as certi,icates o, deposit /'D03 co++ercial paper

/'P0 ad call +oey P*t yo*r +oey ito ay o, these debt ,*ds depedi7 o yo*r i5est+et hori8o ad eeds i* Liuid #und9-

These ,*ds i5est ?>> i +oey +ar6et istr*+ets3 a lar7e

portio bei7 i5ested i call +oey +ar6et ii* Gi"t #und9 ST- They

i5est ?>> o, their port,olio i 7o5er+et sec*rities o, ad

T@bills iii* F"$tin7 !te #und9 -

I5est i short@ter+ debt papers $loaters i5est i debt

istr*+ets 9hich ha5e 5ariable co*po rate i* A!bit!7e #und-

They 7eerate ico+e thro*7h arbitra7e opport*ities d*e to +is@

prici7 bet9ee cash +ar6et ad deri5ati5es +ar6et $*ds are allocated to e-*ities3 deri5ati5es ad +oey +ar6ets !i7her proportio /aro*d H0 is p*t i +oey +ar6ets3 i the absece o, arbitra7e opport*ities * Gi"t #und9 LT-

They i5est ?>> o, their port,olio i lo7@ter+ 7o5er+et

sec*rities 3>

i* In1$me #und9 LT- Typically3

lo7@ter+ debt papers

s*ch ,*ds i5est a +ajor portio o, the port,olio i

ii* MIP9-

"othly Ico+e Plas ha5e a eBpos*re o, H>@F> to debt ad a

eBpos*re o, ?>@> to e-*ities iii* FMP9- ,iBed +othly plas i5est i debt papers 9hose +at*rity is i lie 9ith

that o, the ,*d

3@

INVESTMENT STRATEGY

50 S9temti1 Ine9tment P"n.

*der this a ,iBed s*+ is i5ested each +oth o a

,iBed date o, a +oth Pay+et is +ade thro*7h post dated che-*es or direct debit ,acilities The i5estor 7ets ,e9er *its 9he the NA< is hi7h ad +ore *its 9he the NA< is lo9 This is called as the bee,it o, R*pee 'ost A5era7i7 /R'A0 30 S9temti1 T!n9#e! P"n.

*der this a i5estor i5est i debt orieted ,*d ad

7i5e istr*ctios to tras,er a ,iBed s*+3 at a ,iBed iter5al3 to a e-*ity sche+e o, the sa+e +*t*al ,*d 60 S9temti1 Wit2d!" P"n.

i, so+eoe 9ishes to 9ithdra9 ,ro+ a +*t*al ,*d

the he ca 9ithdra9 a ,iBed a+o*t each +oth

=H

Mutu" Fund9

.e,ore 9e *derstad 9hat is +*t*al ,*d3 its 5ery i+portat to 6o9 the area i 9hich +*t*al ,*ds 9or6s3 the basic *derstadi7 o, stoc6s ad bods St$1K9

: Stoc6s represet shares o, o9ership i a p*blic co+pay EBa+ples o, p*blic co+paies

icl*de Reliace3 &N(' ad I,osys Stoc6s are cosidered to be the +ost co++o o9ed i5est+et traded o the +ar6et %$nd9

: .ods are basically the +oey 9hich yo* led to the 7o5er+et or a co+pay3 ad i

ret*r yo* ca recei5e iterest o yo*r i5ested a+o*t3 9hich is bac6 o5er predeter+ied a+o*ts o, ti+e .ods are cosidered to be the +ost co++o ledi7 i5est+et traded o the +ar6et There are +ay other types o, i5est+ets other tha stoc6s ad bods /icl*di7 a*ities3 real estate3 ad precio*s +etals03 b*t the +ajority o, +*t*al ,*ds i5est i stoc6s adLor bods W2t I9 Mutu" Fund

A +*t*al ,*d is j*st the coecti7 brid7e or a ,iacial iter+ediary that allo9s a 7ro*p o, i5estors to pool their +oey to7ether 9ith a predeter+ied i5est+et objecti5e The +*t*al ,*d 9ill ha5e a ,*d +aa7er 9ho is resposible ,or i5esti7 the 7athered +oey ito speci,ic sec*rities /stoc6s or bods0 )he yo* i5est i a +*t*al ,*d3 yo* are b*yi7 *its or portios o, the +*t*al ,*d ad th*s o i5esti7 beco+es a shareholder or *it holder o, the ,*d "*t*al ,*ds are cosidered as oe o, the best a5ailable i5est+ets as co+pare to others they are 5ery cost e,,iciet ad also easy to i5est i3 th*s by pooli7 +oey to7ether i a +*t*al ,*d3 i5estors ca p*rchase stoc6s or bods 9ith +*ch lo9er tradi7 costs tha i, they tried to do it o their o9 .*t the bi77est ad5ata7e to +*t*al ,*ds is di5ersi,icatio3 by +ii+i8i7 ris6 2 +aBi+i8i7 ret*rs

=

Th*s a "*t*al $*d is the +ost s*itable i5est+et ,or the co++o +a as it o,,ers a opport*ity to i5est i a di5ersi,ied3 pro,essioally +aa7ed bas6et o, sec*rities at a relati5ely lo9 cost The ,lo9 chart belo9 describes broadly the 9or6i7 o, a +*t*al ,*d

=F

>

Oe!ie $# e:i9tin7 912eme9 e:i9ted in mutu" #und 1te7$!

)ide 5ariety o, "*t*al $*d Sche+es eBists to cater to the eeds s*ch as ,iacial positio3 ris6 tolerace ad ret*r eBpectatios etc The table belo9 7i5es a o5er5ie9 ito the eBisti7 types o, sche+es i the Id*stry

?

Tpe $# Mutu" Fund S12eme9 %' STRUCTURE

Open Ended S12eme9

A ope@ed ,*d is oe that is a5ailable ,or s*bscriptio all thro*7h the year These do ot ha5e a ,iBed +at*rity I5estors ca co5eietly b*y ad sell *its at Net Asset
C"$9e Ended S12eme9

A closed@ed ,*d has a stip*lated +at*rity period 9hich 7eerally ra7i7 ,ro+  to ? years The ,*d is ope ,or s*bscriptio oly d*ri7 a speci,ied period I5estors ca i5est i the sche+e at the ti+e o, the iitial p*blic iss*e ad therea,ter they ca b*y or sell the *its o, the sche+e o the stoc6 eBcha7es 9here they are listed I order to pro5ide a eBit ro*te to the i5estors3 so+e close@eded ,*ds 7i5e a optio o, selli7 bac6 the *its to the "*t*al $*d thro*7h periodic rep*rchase at NA< related prices SE.I Re7*latios stip*late that at least oe o, the t9o eBit ro*tes is pro5ided to the i5estor

Inte!" S12eme9

Iter5al Sche+es are that sche+e3 9hich co+bies the ,eat*res o, ope@eded ad close@ eded sche+es The *its +ay be traded o the stoc6 eBcha7e or +ay be ope ,or sale or rede+ptio d*ri7 pre@deter+ied iter5als at NA< related prices

63

%' NATURE

Uder this the +*t*al ,*d is cate7ori8ed o the basis o, I5est+et &bjecti5e .y at*re the +*t*al ,*d is cate7ori8ed as ,ollo9:

66

50 Euit #und.

These ,*ds i5est a +aBi+*+ part o, their corp*s ito e-*ities holdi7s The str*ct*re o, the ,*d +ay 5ary di,,eret ,or di,,eret sche+es ad the ,*d +aa7ers o*tloo6 o di,,eret stoc6s The E-*ity $*ds are s*b@classi,ied depedi7 *po their i5est+et objecti5e3 as ,ollo9s: • • • •

Di5ersi,ied E-*ity $*ds "id@'ap $*ds Sector Speci,ic $*ds TaB Sa5i7s $*ds /E#SS0

E-*ity i5est+ets are +eat ,or a lo7er ti+e hori8o3 th*s E-*ity ,*ds ra6 hi7h o the ris6@ ret*r +atriB 30 Debt #und9.

The objecti5e o, these $*ds is to i5est i debt papers (o5er+et a*thorities3 pri5ate co+paies3 ba6s ad ,iacial istit*tios are so+e o, the +ajor iss*ers o, debt papers .y i5esti7 i debt istr*+ets3 these ,*ds es*re lo9 ris6 ad pro5ide stable ico+e to the i5estors Debt ,*ds are ,*rther classi,ied as: •

Gi"t Fund9: I5est their corp*s i

sec*rities iss*ed by (o5er+et3 pop*larly 6o9 as

(o5er+et o, Idia debt papers These $*ds carry 8ero De,a*lt ris6 b*t are associated 9ith Iterest Rate ris6 These sche+es are sa,er as they i5est i papers bac6ed by (o5er+et

•

In1$me Fund9: I5est a +ajor portio ito 5ario*s debt istr*+ets s*ch as bods3 corporate

debet*res ad (o5er+et sec*rities •

MIP9: I5ests +aBi+*+ o, their

total corp*s i debt istr*+ets 9hile they ta6e +ii+*+

eBpos*re i e-*ities It 7ets bee,it o, both e-*ity ad debt +ar6et These sche+e ra6s sli7htly hi7h o the ris6@ret*r +atriB 9he co+pared 9ith other debt sche+es C

•

S2$!t Te!m P"n9 &STP9*: "eat ,or i5est+et hori8o ,or three to siB +oths These ,*ds

pri+arily i5est i short ter+ papers li6e 'erti,icate o, Deposits /'Ds0 ad 'o++ercial Papers /'Ps0 So+e portio o, the corp*s is also i5ested i corporate debet*res •

Liuid Fund9: Also 6o9 as "oey "ar6et Sche+es3 These ,*ds pro5ides easy

li-*idity

ad preser5atio o, capital These sche+es i5est i short@ter+ istr*+ets li6e Treas*ry .ills3 iter@ba6 call +oey +ar6et3 'Ps ad 'Ds These ,*ds are +eat ,or short@ter+ cash +aa7e+et o, corporate ho*ses ad are +eat ,or a i5est+et hori8o o, ?day to  +oths These sche+es ra6 lo9 o ris6@ret*r +atriB ad are cosidered to be the sa,est a+o7st all cate7ories o, +*t*al ,*ds

60 %"n1ed #und9. As the a+e s*77est they3 are a +iB o, both e-*ity ad debt ,*ds They i5est

i both e-*ities ad ,iBed ico+e sec*rities3 9hich are i lie 9ith pre@de,ied i5est+et objecti5e o, the sche+e These sche+es ai+ to pro5ide i5estors 9ith the best o, both the 9orlds E-*ity part pro5ides 7ro9th ad the debt part pro5ides stability i ret*rs 

Further the mutual funds can be broadly classified on the basis of investment parameter viz,

Each cate7ory o, ,*ds is bac6ed by a i5est+et philosophy3 9hich is pre@de,ied i the objecti5es o, the ,*d The i5estor ca ali7 his o9 i5est+et eeds 9ith the ,*ds objecti5e ad i5est accordi7ly

%' IN(ESTMENT O%JECTI(E •

G!$t2 S12eme9. (ro9th Sche+es are also 6o9 as e-*ity sche+es The ai+ o, these

sche+es is to pro5ide capital appreciatio o5er +edi*+ to lo7 ter+ These sche+es or+ally i5est a +ajor part o, their ,*d i e-*ities ad are 9illi7 to bear short@ter+ declie i 5al*e ,or possible ,*t*re appreciatio •

In1$me S12eme9. Ico+e Sche+es are also 6o9

as debt sche+es The ai+ o, these

sche+es is to pro5ide re7*lar ad steady ico+e to i5estors These sche+es 7eerally i5est i ,iBed ico+e sec*rities s*ch as bods ad corporate debet*res 'apital appreciatio i s*ch sche+es +ay be li+ited •

%"n1ed S12eme9. .alaced Sche+es ai+ to pro5ide both 7ro9th ad ico+e by

periodically distrib*ti7 a part o, the ico+e ad capital 7ais they ear These sche+es i5est i both shares ad ,iBed ico+e sec*rities3 i the proportio idicated i their o,,er doc*+ets /or+ally >:>0 •

M$ne M!Ket S12eme9 : "oey "ar6et Sche+es ai+

to pro5ide easy li-*idity3 preser5atio

o, capital ad +oderate ico+e These sche+es 7eerally i5est i sa,er3 short@ter+ istr*+ets3 s*ch as treas*ry bills3 certi,icates o, deposit3 co++ercial paper ad iter@ba6 call +oey

36

OTHER SCHEMES

•

T: Sin7 S12eme9. TaB@sa5i7 sche+es o,,er taB rebates to the

i5estors *der taB la9s

prescribed ,ro+ ti+e to ti+e Uder Sec o, the Ico+e TaB Act3 cotrib*tios +ade to ay E-*ity #i6ed Sa5i7s Sche+e /E#SS0 are eli7ible ,or rebate •

Inde: S12eme9. IdeB sche+es atte+pt to replicate the

per,or+ace o, a partic*lar ideB

s*ch as the .SE SeseB or the NSE > The port,olio o, these sche+es 9ill cosist o, oly those stoc6s that costit*te the ideB The perceta7e o, each stoc6 to the total holdi7 9ill be idetical to the stoc6s ideB 9ei7hta7e Ad hece3 the ret*rs ,ro+ s*ch sche+es 9o*ld be +ore or less e-*i5alet to those o, the IdeB •

Se1t$! Spe1i#i1 S12eme9.

These are the ,*dsLsche+es 9hich i5est i the sec*rities o, oly

those sectors or id*stries as speci,ied i the o,,er doc*+ets e7 Phar+ace*ticals3 So,t9are3 $ast "o5i7 'os*+er (oods /$"'(03 Petrole*+ stoc6s3 etc The ret*rs i these ,*ds are depedet o the per,or+ace o, the respecti5e sectorsLid*stries )hile these ,*ds +ay 7i5e hi7her ret*rs3 they are +ore ris6y co+pared to di5ersi,ied ,*ds I5estors eed to 6eep a 9atch o the per,or+ace o, those sectorsLid*stries ad +*st eBit at a appropriate ti+e

Tpe9 $# !etu!n9.

There are three 9ays3 9here the total ret*rs pro5ided by +*t*al ,*ds ca be ejoyed by i5estors: •

Ico+e is eared ,ro+ di5ideds o stoc6s ad iterest o bods A ,*d pays o*t early all ico+e it recei5es o5er the year to ,*d o9ers i the ,or+ o, a distrib*tio

•

I, the ,*d sells sec*rities that ha5e icreased i price3 the ,*d has a capital 7ai "ost ,*ds also pass o these 7ais to i5estors i a distrib*tio

•

I, ,*d holdi7s icrease i price b*t are ot sold by the ,*d +aa7er3 the ,*ds shares icrease i price 1o* ca the sell yo*r +*t*al ,*d shares ,or a pro,it $*ds 9ill also *s*ally 7i5e yo* a choice either to recei5e a chec6 ,or distrib*tios or to rei5est the eari7s ad 7et +ore shares 6?

P!$9 + 1$n9 $# ine9tin7 in mutu" #und9.

$or i5est+ets i +*t*al ,*d3 oe +*st 6eep i +id abo*t the Pros ad cos o, i5est+ets i +*t*al ,*d

Adnt7e9 $# Ine9tin7 Mutu" Fund9. 50 P!$#e99i$n" Mn7ement - The basic ad5ata7e o, ,*ds is

that3 they are pro,essioal +aa7ed3

by 9ell -*ali,ied pro,essioal I5estors p*rchase ,*ds beca*se they do ot ha5e the ti+e or the eBpertise to +aa7e their o9 port,olio A +*t*al ,*d is cosidered to be relati5ely less eBpesi5e 9ay to +a6e ad +oitor their i5est+ets 30 Die!9i#i1ti$n - P*rchasi7 *its i a +*t*al ,*d istead o, b*yi7 idi5id*al stoc6s or bods3

the i5estors ris6 is spread o*t ad +ii+i8ed *p to certai eBtet The idea behid di5ersi,icatio is to i5est i a lar7e *+ber o, assets so that a loss i ay partic*lar i5est+et is +ii+i8ed by 7ais i others 60 E1$n$mie9 $# S1"e - "*t*al ,*d b*y ad sell lar7e a+o*ts o, sec*rities at a ti+e3 th*s help to

red*ci7 trasactio costs3 ad help to bri7 do9 the a5era7e cost o, the *it ,or their i5estors =0 Liuidit -

;*st li6e a idi5id*al stoc63 +*t*al ,*d also allo9s i5estors to li-*idate their

holdi7s as ad 9he they 9at >0 Simp"i1it - I5est+ets i +*t*al ,*d

is cosidered to be easy3 co+pare to other a5ailable

istr*+ets i the +ar6et3 ad the +ii+*+ i5est+et is s+all "ost A"' also ha5e a*to+atic p*rchase plas 9hereby as little as Rs =>>>3 9here SIP start 9ith j*st Rs> per +oth basis

6

Di9dnt7e9 $# Ine9tin7 Mutu" Fund9.

50 P!$#e99i$n" Mn7ement @

So+e ,*ds doest per,or+ i either the +ar6et3 as their

+aa7e+et is ot dya+ic eo*7h to eBplore the a5ailable opport*ity i the +ar6et3 th*s +ay i5estors debate o5er 9hether or ot the so@called pro,essioals are ay better tha +*t*al ,*d or i5estor hi+sel,3 ,or pic6i7 *p stoc6s 30 C$9t9

% The bi77est so*rce o, A"' ico+e3 is 7eerally ,ro+ the etry 2 eBit load 9hich they

char7e ,ro+ a i5estors3 at the ti+e o, p*rchase The +*t*al ,*d id*stries are th*s char7i7 eBtra cost *der layers o, jar7o 60 Di"uti$n

@ .eca*se ,*ds ha5e s+all holdi7s across di,,eret co+paies3 hi7h ret*rs ,ro+ a ,e9

i5est+ets o,te dot +a6e +*ch di,,erece o the o5erall ret*r Dil*tio is also the res*lt o, a s*ccess,*l ,*d 7etti7 too bi7 )he +oey po*rs ito ,*ds that ha5e had stro7 s*ccess3 the +aa7er o,te has tro*ble ,idi7 a 7ood i5est+et ,or all the e9 +oey =0 T:e9 @ 9he +a6i7 decisios abo*t yo*r +oey3 ,*d +aa7ers dot cosider yo*r persoal taB

sit*atio $or eBa+ple3 9he a ,*d +aa7er sells a sec*rity3 a capital@7ai taB is tri77ered3 9hich a,,ects ho9 pro,itable the idi5id*al is ,ro+ the sale It +i7ht ha5e bee +ore ad5ata7eo*s ,or the idi5id*al to de,er the capital 7ais liability

F

MAJOR PLAYERS OF MUTUAL FUND IN INDIA At preset ,ollo9i7 are the +ai players i the "*t*al $*d Id*stry:@ 50

Uit Tr*st o, Idia

3

A.N A+ro "*t*al $*d

60

.ech+ar6 "*t*al $*d

=0

.irla S* li,e "*t*al $*d

>0

'a ba6 "*t*al $*d

@0

D.S 'hola "*t*al $*d

?0

DSP "errill #ych "*t*al $*d

0

De*tsche "*t*al $*d

<0

Escorts "*t*al $*d

540 $idelity "*t*al $*d 550 !D$' "*t*al $*d 530 !S.' "*t*al $*d 560 I'I'I Pr*detial "*t*al $*d 5=0 IN(


5>0 Kota6 "ahidra "*t*al $*d

5@0 #I' "*t*al $*d 5?0 #ot*s Idia "*t*al $*d =4

50 &pti+iB "*t*al $*d 5<0 Pricipal "*t*al $*d 340 *at*+ "*t*al $*d 350 Reliace "*t*al $*d 330 S.I "*t*al $*d 360 Sahara "*t*al $*d 3=0 S*dara+ .NP Paribas "*t*al $*d 3>0 Tata

"*t*al $*d

3@0 Ta*r*s

"*t*al $*d

C?

Guidelines of the SEI fo! Mutu"l Fund #o$%"nies &

To protect the iterest o, the i5estors3 SE.I ,or+*lates policies ad re7*lates the +*t*al ,*ds It oti,ied re7*latios i ?FF /,*lly re5ised i ?FFG0 ad iss*es 7*idelies ,ro+ ti+e to ti+e SE.I appro5ed Asset "aa7e+et 'o+pay /A"'0 +aa7es the ,*ds by +a6i7 i5est+ets i 5ario*s types o, sec*rities '*stodia3 re7istered 9ith SE.I3 holds the sec*rities o,

5ario*s

sche+es

o,

the

,*d

i

its

c*stody

Accordi7 to SE.I Re7*latios3 t9o thirds o, the directors o, Tr*stee 'o+pay or board o, tr*stees +*st be idepedet The Associatio o, "*t*al $*ds i Idia /A"$I0 reass*res the i5estors i *its o, +*t*al ,*ds that the +*t*al ,*ds ,*ctio 9ithi the strict re7*latory ,ra+e9or6 Its objecti5e is to icrease p*blic a9areess o, the +*t*al ,*d id*stry A"$I also is e7a7ed i *p7radi7 pro,essioal stadards ad i pro+oti7 best id*stry practices i di5erse areas s*ch as 5al*atio3 disclos*re3 trasparecy etc D$1ument9 !eui!ed &PAN mndt$!*.

P!$$# $# identit : 50 Photo PAN card

30

I case o, o@photo PAN card i additio to copy o, PAN card ay oe o, the ,ollo9i7:

dri5i7 liceseLpassport copyL 5oter idL ba6 photo pass boo6 Proo, o, address /ay o, the ,ollo9i7 0 :latest telephoe bill3 latest electricity bill3 Passport3 latest ba6 passboo6Lba6 acco*t state+et3 latest De+at acco*t state+et3 5oter id3 dri5i7 licese3 ratio card3 ret a7ree+et

C= O##e! d$1ument.

A o,,er doc*+et is iss*ed 9he the A"'s +a6e Ne9 $*d &,,er/N$&0

Its ad5isable to e5ery i5estor to as6 ,or the o,,er doc*+et ad read it be,ore i5esti7 A

RIS' V(S) RETURN&

Inte!p!etti$n.

I the abo5e 7raph 9e see that as the ris6 is icreasi7 ret*r is also icreasi7 )e ca say that ris6 is directly propotioal to the ret*r !ere3 9e see that i li-*id ,*ds3 debt ,*d3 balaced ,*d ris6 is less so ret*r is also less )hile i ideB ,*ds3 e-*ity ,*ds3 sectoral ,*ds ris6 is hi7h so ret*r is also hi7h

76

'hapter @  &bjecti5es o, st*dy

??

O%JECTI(ES OF THE STUD'

? To ,id o*t the Pre,ereces o, the i5estors ,or Ass et "aa7e+et 'o+pay = To 6o9 the Pre,ereces ,or the port,olios  To ,id o*t the +ost pre,erred chael C To ,id o*t 9hat sho*ld do to boost "*t*al $*d Id*stry

H

'hapter % C Research "ethodolo7y

?<

RESEARCH METHODOLOG'

This report is based o pri+ary as 9ell secodary data3 ho9e5er pri+ary data collectio 9as 7i5e +ore i+portace sice it is o5erheari7 ,actor i attit*de st*dies &e o, the +ost i+portat *sers o, research +ethodolo7y is that it helps i ideti,yi7 the proble+3 collecti73 aaly8i7 the re-*ired i,or+atio data ad pro5idi7 a alterati5e sol*tio to the proble+ It also helps i collecti7 the 5ital i,or+atio that is re-*ired by the top +aa7e+et to assist the+ ,or the better decisio +a6i7 both day to day decisio ad critical oes Dt 9$u!1e9.

Research is totally based o pri+ary data Secodary data ca be *sed oly ,or the re,erece Research has bee doe by pri+ary data collectio3 ad pri+ary data has bee collected by iteracti7 9ith 5ario*s people The secodary data has bee collected thro*7h 5ario*s jo*rals ad 9ebsites Du!ti$n $# Stud.

The st*dy 9as carried o*t ,or a period o, t9o +oths3 ,ro+ = th "ay to ?>th ;*ly =>?=

>



Smp"e 9ie.

The sa+ple si8e o, +y project is li+ited to =>> people oly &*t o, 9hich oly ?=> people had i5ested i "*t*al $*d &ther > people did ot ha5e i5ested i "*t*al $*d



Smp"e de9i7n.

Data has bee preseted 9ith the help o, bar 7raph3 pie charts3 lie 7raphs etc

?

'hapter %  Data Aalysis 2 Iterpretatio

3

ANAL'SIS + INTERPRETATION OF THE DATA

50 &* A7e di9t!ibuti$n $# t2e Ine9t$!9 $# De2!d$$n

A7e(ro*p No o, I5estors

Inte!p!etti$n.

>

?@

G@C>

C?@C

CG@>

?=

?

>

=C

=>

> ?G

Accordi7 to this chart o*t o, ?=> "*t*al $*d i5estors o, Dehradoo the +ost are i the a7e 7ro*p o, G@C> yrs ie =3 the secod +ost i5estors are i the a7e 7ro*p o, C?@Cyrs ie => ad the least i5estors are i the a7e 7ro*p o, belo9 > yrs

&b*0 Edu1ti$n" u"i#i1ti$n $# ine9t$!9 $# De2!d$$n Edu1ti$n" u "i#i1ti$n

Numbe! $# In e9t$!9

(rad*ateLPost(rad*ate



Uder(rad*ate

=

&thers

H

Total

?=>

Inte!p!etti$n.

&*t o, ?=> "*t*al $*d i5estors H? o, the i5estors i Dehradoo are (rad*ateLPost (rad*ate3 = are Uder (rad*ate ad G are others /*der !S'0 1*0 O11upti$n $# t2e ine9t$!9 $# De2!d$$n

O11upti$n

(o5tSer5ice P5tSer5ice .*siess A7ric*lt*re &thers 

N$0 $# Ine9t$!9

> C  C G

Inte!p!etti$n. I &cc*patio 7ro*p o*t o, ?=> i5estors3  are P5t

E+ployees3 = are .*siess+a3 =F are (o5t E+ployees3  are i A7ric*lt*re ad  are i others &d*0 M$nt2" Fmi" In1$me $# t2e Ine9t$!9 $# De2!d$$n0

In1$meG!$up

?>3>>> ?>3>>?@?3>>> ?3>>?@=>3>>> =>3>>?@>3>>> >3>>>

N$0$#Ine9t$!9



?= = C =

Inte!p!etti$n.

I the Ico+e (ro*p o, the i5estors o, Dehradoo3 o*t o, ?=> i5estors3 G i5estors that is the +aBi+*+ i5estors are i the +othly ico+e 7ro*p Rs =>3>>? to Rs >3>>>3 Secod oe ie =H i5estors are i the +othly

ico+e 7ro*p o, +ore tha Rs >3>>> ad the +ii+*+ i5estors ie C are i the +othly ico+e 7ro*p o, belo9 Rs ?>3>>> &3* Ine9t$!9 ine9ted in di##e!ent Kind $# ine9tment90

Kid o, I5est+ets Sa5i7 AL'

$iBeddeposits Is*race "*t*al$*d Posto,,ice/NS'0 SharesLDebet*res (oldLSil5er RealEstate

No o, R espodets ?F ?C ?= ?=> H > > G

Inte!p!etti$n. $ro+ the abo5e 7raph it ca be i,erred that o*t o, =>> people3

FH people ha5e i5ested i Sa5i7 ALc3 HG i Is*race3 HC i $iBed Deposits3

G> i "*t*al $*d3 H i Post &,,ice3 = i Shares or Debet*res3 ? i (oldLSil5er ad = i Real Estate 60 P!e#e!en1e $# #1t$!9 2i"e ine9tin7

$actors

/a0 #i-*idity

/b0 #o9 Ris6

No o,

C>

G>

/c0 !i7h Ret*r GC

/d0 Tr*st G

Respodets

Inte!p!etti$n.

&*t o, =>> People3 = People pre,er to i5est 9here there is !i7h Ret*r3 > pre,er to i5est 9here there is #o9 Ris63 => pre,er easy #i-*idity ad ? pre,er Tr*st

 =0 A!ene99 b$ut Mutu" Fund nd it9 Ope!ti$n9

Respose No o, Respodets

1es ?

No G

Inte!p!etti$n.

$ro+ the abo5e chart it is i,erred that GH People are a9are o, "*t*al $*d ad its operatios ad  are ot a9are o, "*t*al $*d ad its operatios

F >0 S$u!1e $# in#$!mti$n #$! 1u9t$me!9 b$ut Mutu" Fund

S$u!1e $# in#$!mti$n

N$0 $# Re9p$ndent9

Ad5ertise+et Peer (ro*p .a6 $iacialAd5isors

? =

> G=

Inte!p!etti$n.

$ro+ the abo5e chart it ca be i,erred that the $iacial Ad5isor is the +ost i+portat so*rce o, i,or+atio abo*t "*t*al $*d &*t o, ? Respodets3 CG 6o9 abo*t "*t*al ,*d Thro*7h $iacial Ad5isor3 == thro*7h .a63 ?F thro*7h Peer (ro*p ad ? thro*7h Ad5ertise+et

F> G

Ine9t$!9 ine9ted in Mutu" Fund

Re9p$n9e

N$0 $# Re9p$ndent9

1ES N&

?=> >

Total

=>>

Inte!p!etti$n.

&*t o, =>> People3 G> ha5e i5ested i "*t*al $*d ad C> do ot ha5e i5ested i "*t*al $*d

F? ?0 Re9$n #$! n$t ine9ted in Mutu" Fund

Re9$n

N$0$#Re9p$ndent9

Not A9are !i7her Ris6 Not ay Speci,ic Reaso

@> > 54

Inte!p!etti$n.

&*t o, > people3 9ho ha5e ot i5ested i "*t*al $*d3 ? are ot a9are o, "*t*al $*d3 ? said there is li6ely to be hi7her ris6 ad G do ot ha5e ay speci,ic reaso <3

0 Ine9t$!9 ine9ted in di##e!ent A99et9 Mn7ement C$0 &AMC*

Nme $# AMC

S.I"$

N$0 $# Ine9t$!9



UTI !D$' Reliace I'I'I Pr*detial Kota6 &thers

H > H G C H>

Inte!p!etti$n.

I Dehradoo +ost o, the I5estors pre,erred UTI ad Reliace "*t*al $*d &*t o, ?=> I5estors G= ha5e i5ested i each o, the+3 oly CG ha5e i5ested i S.I"$3 CH i I'I'I Pr*detial3 H i Kota6 ad = i !D$'

<6

<0 Re9$n #$! ine9ted in S%IMF

Reaso

Noo,Respodets

Associated9ithS.I .etterRet*r A7etsAd5ice

  ?

Inte!p!etti$n.

&*t o,  i5estors o, S.I"$ GC ha5e i5ested beca*se o, its associatio 9ith .rad S.I3 =H i5ested o A7ets Ad5ice3 F i5ested beca*se o, better ret*r FC

540 Re9$n #$! n$t ine9ted in S%IMF

Re9$n

N$0$#Re9p$ndent9

Not A9are #ess Ret*r A7etsAd5ice

= ? ==

Inte!p!etti$n.

&*t o, G people 9ho ha5e ot i5ested i S.I"$3  9ere ot a9are 9ith S.I"$3 = do ot ha5e i5ested d*e to less ret*r ad C d*e to A7ets Ad5ice

F 550 P!e#e!en1e $# Ine9t$!9 #$! #utu!e ine9tment in Mutu" Fund

Nme $# AMC

S.I"$ UTI !D$'

N$0 $# Ine9t$!9

HG C 

Reliace I'I'I Pr*detial Kota6 &thers

= > G> H

Inte!p!etti$n.

&*t o, ?=> i5estors3 G pre,er to i5est i Reliace3 GH i I'I'I Pr*detial3 G i S.I"$3 G= i &thers3 > i Kota63 H i UTI ad =F i !D$' "*t*al $*d

FG

530 C2nne" P!e#e!!ed b t2e Ine9t$!9 #$! Mutu" Fund Ine9tment

'hael No o, Respodets

$iacialAd5isor H=

.a6 ?

A"' >

Inte!p!etti$n.

&*t o, ?=> I5estors G> pre,erred to i5est thro*7h $iacial Ad5isors3 = thro*7h A"' ad ? thro*7h .a6


560 M$de $# Ine9tment P!e#e!!ed b t2e Ine9t$!9

"ode o, I5est+et

&e ti+e I5est+et

Syste+atic I5est+et Pla /SIP0

No o, Respodets

H

C=

Inte!p!etti$n.

&*t o, ?=> I5estors G pre,erred &e ti+e I5est+et ad   Pre,erred thro*7h Syste+atic I5est+et Pla F

5=0 P!e#e!!ed P$!t#$"i$9 b t2e Ine9t$!9

P$!t#$"i$

E-*ity Debt

N$0$#Ine9t$!9

G =>

.alaced

CC

Inte!p!etti$n.

$ro+ the abo5e 7raph CG pre,erred E-*ity Port,olio3 H pre,erred .alace ad ?H pre,erred Debt port,olio FF

5>0 Opti$n #$! 7ettin7 Retu!n P!e#e!!ed b t2e Ine9t$!9

&ptio No o, Respodets

Di5idedPayo*t =

Di5ided Rei5est+et ?>

(ro9th 

Inte!p!etti$n.

$ro+ the abo5e 7raph H? pre,erred (ro9th &ptio3 =? pre,erred Di5ided Payo*t ad  pre,erred Di5ided Rei5est+et &ptio ?>> 5@0 P!e#e!en1e $# Ine9t$!9 2et2e! t$ ine9t in Se1t$!" Fund9

Re9p$n9e 'e9 N$

N$0 $# Re9p$ndent9 3> <>

Inte!p!etti$n.

&*t o, ?=> i5estors3 HF i5estors do ot pre,er to i5est i Sectoral $*d beca*se there is +aBi+*+ ris6 ad =? pre,er to i5est i Sectoral $*d

?>?

'hapter % G

$idi7s

543 Findin79 

A7e (ro*p o, G@C> years 9ere +ore i *+bers The secod +ost I5estors 9ere i the a7e 7ro*p o, C?@C years ad the least 9ere i the a7e 7ro*p o, belo9 > years



I &cc*patio 7ro*p +ost o, the I5estors 9ere (o5t e+ployees3 the secod +ost I5estors 9ere Pri5ate e+ployees ad the least 9ere associated 9ith A7ric*lt*re



I ,a+ily Ico+e 7ro*p3 bet9ee Rs =>3>>?@ >3>>> 9ere +ore i *+bers3 the secod +ost 9ere i the Ico+e 7ro*p o, +ore tha Rs>3>>> ad the least 9ere i the 7ro*p o, belo9 Rs ?>3>>>



Abo*t all the Respodets had a Sa5i7 ALc i .a63 HG I5ested i $iBed Deposits3 &ly G> Respodets i5ested i "*t*al ,*d



"ostly Respodets pre,erred !i7h Ret*r 9hile i5est+et3 the secod +ost pre,erred #o9 Ris6 the li-*idity ad the least pre,erred Tr*st



&ly GH Respodets 9ere a9are abo*t "*t*al ,*d ad its operatios ad  9ere ot



A+o7 =>> Respodets oly G> had i5ested i "*t*al $*d ad C> did ot ha5e i5ested i "*t*al ,*d



&*t o, > Respodets ? 9ere ot a9are o, "*t*al $*d3 ? told there is ot ay speci,ic reaso ,or ot i5ested i "*t*al $*d ad G told there is li6ely to be hi7her ris6 i "*t*al $*d ?>



"ost o, the I5estors had i5ested i Reliace or UTI "*t*al $*d3 I'I'I Pr*detial has also 7ood .rad Positio a+o7 i5estors3 S.I"$ places a,ter I'I'I Pr*detial accordi7 to the Respodets



&*t o,  i5estors o, S.I"$ GC ha5e i5ested d*e to its associatio 9ith the .rad S.I3 =H I5ested beca*se o, Ad5isors Ad5ice ad F d*e to better ret*r



"ost o, the i5estors 9ho did ot i5ested i S.I"$ d*e to ot A9are o, S.I"$3 the secod +ost d*e to A7ets ad5ice ad rest d*e to #ess Ret*r



$or $*t*re i5est+et the +aBi+*+ Respodets pre,erred Reliace "*t*al $*d3 the secod +ost pre,erred I'I'I Pr*detial3 S.I"$ has bee pre,erred a,ter the+



G> I5estors pre,erred to I5est thro*7h $iacial Ad5isors3 = thro*7h A"' /+eas Direct I5est+et0 ad ? thro*7h .a6



G pre,erred &e Ti+e I5est+et ad  pre,erred SIP o*t o, both type o, "ode o, I5est+et



The +ost pre,erred Port,olio 9as E-*ity3 the secod +ost 9as .alace /+iBt*re o, both e-*ity ad debt03 ad the least pre,erred Port,olio 9as Debt port,olio



"aBi+*+ N*+ber o, I5estors Pre,erred (ro9th &ptio ,or ret*rs3 the secod +ost pre,erred Di5ided Payo*t ad the Di5ided Rei5est+et



"ost o, the I5estors did ot 9at to i5est i Sectoral $*d3 oly =? 9ated to i5est i Sectoral $*d

?>C

LIMITATION

 

So+e o, the persos 9ere ot so resposi5e Possibility o, error i data collectio beca*se +ay o, i5estors +ay ha5e ot 7i5e act*al as9ers o, +y -*estioaire



So+e respodets 9ere rel*ctat to di5*l7e persoal i,or+atio 9hich ca a,,ect the 5alidity o, all resposes

?>

S*77estio

?>G

The +ost 5ital proble+ spotted is o, i7orace I5estors sho*ld be +ade a9are o, the bee,its Nobody 9ill i5est *til ad *less he is ,*lly co5iced I5estors sho*ld be +ade to reali8e that i7orace is o lo7er bliss ad 9hat they are losi7 by ot i5esti7 

"*t*al ,*ds o,,er a lot o, bee,it 9hich o other si7le optio co*ld o,,er .*t +ost o, the people are ot e5e a9are o, 9hat act*ally a +*t*al ,*d isV They oly see it as j*st aother i5est+et optio So the ad5isors sho*ld try to cha7e their +idsets The ad5isors sho*ld tar7et ,or +ore ad +ore yo*7 i5estors 1o*7 i5estors as 9ell as persos at the hei7ht o, their career 9o*ld li6e to 7o ,or ad5isors d*e to lac6 o, eBpertise ad ti+e



"*t*al $*d 'o+pay eeds to 7i5e the traii7 o, the Idi5id*al $iacial Ad5isors abo*t the $*dLSche+e ad its objecti5e3 beca*se they are the +ai so*rce to i,l*ece the i5estors



.e,ore +a6i7 ay i5est+et $iacial Ad5isors sho*ld ,irst e-*ire abo*t the ris6 tolerace o, the i5estorsLc*sto+ers3 their eed ad ti+e /ho9 lo7 they 9at to i5est0 .y cosideri7 these three thi7s they ca ta6e the c*sto+ers ito cosideratio



1o*7er people a7ed *der  9ill be a 6ey e9 c*sto+er 7ro*p ito the ,*t*re3 so +a6i7 7reater e,,orts 9ith yo*7er c*sto+ers 9ho sho9 so+e iterest i i5esti7 sho*ld pay o,,



'*sto+ers 9ith 7rad*ate le5el ed*catio are easier to sell to ad there is a lar7e *tapped +ar6et there To s*cceed ho9e5er3 ad5isors +*st pro5ide so*d ad5ice ad hi7h -*ality ?>H



Syste+atic I5est+et Pla /SIP0 is oe the io5ati5e prod*cts la*ched by Assets "aa7e+et co+paies 5ery recetly i the id*stry SIP is easy ,or +othly salaried perso as it pro5ides the ,acility o, do the i5est+et i E"I Tho*7h +ost o, the prospects ad potetial i5estors are ot a9are abo*t the SIP There is a lar7e scope ,or the co+paies to tap the salaried persos

?>

'ocl*sio

54<

R*i7 a s*ccess,*l "*t*al $*d re-*ires co+plete *derstadi7 o, the pec*liarities o, the Idia Stoc6 "ar6et ad also the psyche o, the s+all i5estors This st*dy has +ade a atte+pt to *derstad the ,iacial beha5ior o, "*t*al $*d i5estors i coectio 9ith the pre,ereces o, .rad /A"'03 Prod*cts3 'haels etc I obser5ed that +ay o, people ha5e ,ear o, "*t*al $*d They thi6 their +oey 9ill ot be sec*re i "*t*al $*d They eed the 6o9led7e o, "*t*al $*d ad its related ter+s "ay o, people do ot ha5e i5ested i +*t*al ,*d d*e to lac6 o, a9areess altho*7h they ha5e +oey to i5est As the a9areess ad Ico+e is 7ro9i7 the *+ber o, +*t*al ,*d i5estors are also 7ro9i7 “.rad” plays i+portat role ,or the i5est+et People i5est i those 'o+paies 9here they ha5e ,aith or they are 9ell 6o9 9ith the+ There are +ay A"'s i Dehradoo b*t oly so+e are per,or+i7 9ell d*e to .rad a9areess So+e A"'s are ot per,or+i7 9ell altho*7h so+e o, the sche+es o, the+ are 7i5i7 7ood ret*r beca*se o, ot a9areess abo*t .rad Reliace3 UTI3 S.I"$3 I'I'I Pr*detial etc they are 9ell 6o9 .rad3 they are per,or+i7 9ell ad their Assets Uder "aa7e+et is lar7er tha others 9hose .rad a+e are ot 9ell 6o9 li6e Priciple3 S*dera+3 etc Distrib*tio chaels are also i+portat ,or the i5est+et i +*t*al ,*d $iacial Ad5isors are the +ost pre,erred chael ,or the i5est+et i +*t*al ,*d They ca cha7e i5estors +id ,ro+ oe i5est+et optio to others "ay o, i5estors directly i5est their +oey thro*7h A"' beca*se they do ot ha5e to pay etry load &ly those people i5est directly 9ho 6o9 9ell abo*t +*t*al ,*d ad its operatios

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ANNE*URES

553

UESTIONNAIRE A 9tud $# p!e#e!en1e9 $# t2e ine9t$!9 #$! ine9tment in mutu" #und90

50 Pe!9$n" Deti"9.

/a0 Na+e:@ /b0 Add: @

Phoe:@

/c0 A7e:@ /d0 *ali,icatio:@ (rad*atioLP(

Uder(rad*ate

&thers

&cc*patio Pl tic6 /W0 (o5tSer

P5tSer

.*siess

A7ric*lt*re

&thers

/70 )hat is yo*r +othly ,a+ily ico+e approBi+atelyV Pl tic6 /W0 Up to Rs ?>3>>? to Rs ?3>>? to Rs =>3>>? to Rs?>3>>> ?>>> =>3>>> >3>>> 30 )hat 6id o, i5est+ets yo* ha5e +ade so ,arV Pl

a Sa5i7 acco*t e Post &,,ice@NS'3 etc

b $iBed deposits , SharesLDebet*res

tic6 /W0 All applicable

c Is*race 7 (oldL Sil5er

60 )hile i5esti7 yo*r +oey3 9hich ,actor 9ill yo*

Rs >3>>? ad abo5e

d "*t*al $*d h Real Estate

pre,erV

 /a0 #i-*idity

=0

/b0#o9Ris6

/c0!i7hRet*r

/d0Tr*st

Are yo* a9are abo*t "*t*al $*ds ad their operatiosV Pl tic6 /W0 ??

>0 I, yes3 ho9 did yo*

6o9 abo*t "*t*al $*dV

1es

No

/e0

a Ad5ertise+et

b Peer (ro*p

c .a6s

d $iacial Ad5isors

@0 !a5e yo* e5er i5ested i "*t*al $*dV Pl tic6 /W0

1es

No

?0 I, ot i5ested i "*t*al $*d the 9hyV

/a0 Not a9are o, "$ /b0 !i7her ris6 /c0 Not ay speci,ic reaso

 I, yes ) i 9hich "*t*al $*d yo*

a S.I"$

b UTI

c !D$'

<0 I, i5ested i S.I"$3 yo* do so

ha5e i5estedV Pl tic6 /W0 All applicable d Reliace

e Kota6

, &ther speci,y

beca*se /Pl tic6 /W03 all applicable0

a S.I"$ is associated 9ith State .a6 o, Idia b They ha5e a record o, 7i5i7 7ood ret*rs year a,ter year c A7et Ad5ice 540 I, N&T i5ested i

S.I"$3 yo* do so beca*se /Pl tic6 /W0 all applicable0

a 1o* are ot a9are o, S.I"$ b S.I"$ 7i5es less ret*r co+pared to the others c A7et Ad5ice 55 )he yo* pla to i5est yo*r +oey

i asset +aa7e+et co 9hich A"' 9ill yo* pre,erV

Assets "aa7e+et 'o a S.I"$ b UTI c Reliace d !D$' e Kota6 , I'I'I

53 )hich 'hael 9ill yo* pre,er 9hile i5esti7 i "*t*al $*d B

/a0 $iacialAd5isor

/b0.a6

/c0A"'

560 )he yo* i5est i "*t*al $*ds 9hich +ode o,

a &e Ti+e I 5est+et

b Syste+atic I5est+et Pla /SIP0

5=0 )he yo* 9at to i5est 9hich type o,

a !a5i7 oly debt port,olio

i5est+et 9ill yo* pre,erV Pl tic6 /W0

,*ds 9o*ld yo* chooseV

b !a5i7 debt 2 e-*ity port,olio

c &ly e-*ity port,olio

5>0 !o9 9o*ld yo* li6e to recei5e the ret*rs e5ery yearV Pl tic6 /W0

a Di5ided payo*t

b Di5ided re@i5est+et

5@0 Istead o, 7eeral "*t*al $*ds3 9o*ld yo*

Please tic6 /W0

c (ro9th i NA<

li6e to i5est i sectorial ,*dsV 1es No

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