A Comparative Analysis of the Various Savings and Investment Avenues With Special Reference to Mutual Fund

2009 ON

A REPORT

“A COMPARATIVE ANALYSIS OF THE VARIOUS SAVINGS AND INVESTMENT AVENUES WITH SPECIAL REFERENCE TO MUTUAL FUND” (New Imperatives for the intelligent investor)

Company guide Mr. Rishi Khandal (Sales Manager)

Submitted To Ms. Radhika Suri (Faculty guide)

Submitted By

Sandeep Gupta MBA 2008-10 1

PREFACE

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As an integral part as curriculum all MBA a participant are required to undergo a practical training also known as Summer Internship, in any industry for six to eight week’s period. The main objective of this training is to supplement supplement theoretical knowledge with exposure to  practical operator of an organization or industries. Candidate take much help from this training when he get the job after completed the curriculum in this training candidates get the  better opportunity oppor tunity to in meet the customer , corporate corp orate client directly by which candidate gain more & more information about the market. By this practical experience candidate confident level is improved. Consequently Consequently we can say this training training provide better understanding of all functional areas of management skills.

It is great pleasure for me to present this project report prepared by myself between 25.05.09 to 25.07.09.This project I has been written according to my eight weeks summer training, certified by ICICI PRU AMC. Marketing as we all know is, promoting and selling our product in the new as well as old markets. markets. In the project I have done a market survey for doing a “A comparative analysis of  the various Savings and Investment Avenues with special reference to mutual fund”.

It has been a sincere effort of mine to prepare this project report. I hope that this project report will help the management to take important decisions

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Acknowledgement Sometimes words fall short to show gratitude, the same happened with me during this  project. The immense help and support received from ICICI ICICI PRUDE PRUDENTI NTIAL AL AMC overwhelmed me during the project. First and foremost I would like to express mu gratitude to Mr. Rishi Khandal (SM), and other staffs of  ICICI PRUDENTIAL AMC for their support and guidance in the Project work. I extend my sincere gratitude to the all persons of ICICI Bank, Shreeji tower where I have completed my research work. My sincere gratitude to Dr. Sheela Srivastava (CRC, AUR), for providing me with an opportunity to work with ICICI GROUP.

I am highly indebted to Ms. Radhika Suri (Faculty Guide), who has provided me with the necessary information information and his valuable suggestion suggestion and comments comments on bringing out this report in the best possible way.

Last but not the least; my heartfelt love for my parents, whose constant support and blessings helped me throughout this project.

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DECL DECLA ARATI RATION ON I hereby declare that this Project Report entitled “A comparative analysis of the various Savings and Investment Avenues with special reference to mutual fund” in ICICI PRU

Mutual Fund submitted in the partial fulfillment of the requirement of Master of Business Administration (MBA) of AMITY BUSINESS SCHOOL, JAIPUR is based on primary & secondary data found by me in various departments, books, magazines and websites & Collected by me in under guidance of Mr. Rishi

Khandal (SM, ICICI PRUDENTIAL

AMC).

D A T E:

SANDEEP GUPTA MBA (2008-10) Enrollment No. - A20001908127

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TABLE OF CONTENT S.no

Title

Page No.

1.

Executive Summary

2. 3.

Objectives of the Project Industry Profile

4.

Company Profile

5.

Introduction

7. 8.

4-5 17-53

➢

Introduction of mutual fund

17-25

➢

Introduction of 

26-32

ICICI PRUDENTIAL

product

33-35

➢

S.W.O.T Analysis of ICICI PRUDENTIAL

36-39

➢

Financial planning

40-51

➢

Investment planning

52-53

➢

Equity Market Snapshot 54-57

Funds

Methodology of study Interpretation an and an analysis of  of  findings

9.

3 6-16

Recommendation for ICICI Pru. Mutual

6.

1-2

Conclusion

58-70 71-72

73 6

10.

Limitations

74

11.

Recommendations

75

12.

Appendices

13.

Bibliography

76-82 83

ABBREVATIONS

ABBREVATI ONS

EXPANDED FORMS

B SE CAMS

BOMBAY STOCK EXCHANGE C OMPUTER AGE MANAGEMENT SERVICES

GD P IIP MMMF MSCI

GROSS DOMESTIC PRODUCT INDEX OF INDUSTRIAL PRODUCTION MONEY MARKET MUTUAL FUND M ORGAN STANLY CAPITAL INTERNATIONAL

N AV PSU PPF SEBI

NET ASSET VALUE PUBLIC SECTOR UNIT PUBLIC POVIDENT FUND SECURITY EXCHANGE BOARD OF INDIA UNITED PROGRESSIVE ALLIANCE

U PA

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EXECUTIVE SUMMARY In few years Mutual Fund has emerged as a tool for ensuring one’s financial well  being. Mutual Funds Fund s have not only o nly contributed contr ibuted to the India growth g rowth story sto ry but have also als o helped families tap into the success of Indian Industry. As information and awareness is rising more and more people are enjoying the benefits of investing in mutual funds. The main reason the number of retail mutual fund investors remains small is that nine in ten people with incomes in India do not know that mutual funds exist. But once  people are aware of mutual fund investment opportunities, the number who decide to invest in mutual funds increases to as many as one in five people. The trick for converting a person with no knowledge of mutual funds to a new Mutual Fund customer is to understand understand which of the potential investors are more likely to buy mutual funds and to use the right arguments in the sales process that customers will accept as important and relevant to their decision. This Project gave me a great learning experience and at the same time it gave me enough scope to implement implement my analytical analytical ability. The analysis and advice presented in this Project Report is based on market research on the saving and investment investment practices of the investors and preferences of the investors for investment in Mutual Funds.

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This Report will help to know about the investors’ Preferences in Mutual Fund in India means Are they prefer any particular Asset Management Company (AMC), Which type of Product they prefer, Which Option (Growth or Dividend) they prefer or Which Investment Strategy they follow (Systematic Investment Plan or One time Plan). This Project as a whole can be divided into two parts. The first part gives an insight about Mutual Fund and its various aspects, the Company Profi Profile le,, Objec Objecti tive vess of the the study, study, Rese Researc arch h Meth Methodo odolo logy. gy. One One can can have have a brief  brief  knowledge about Mutual Fund and its basics through the Project. The second part of the Project consists of data and its analysis collected through survey having a sample size of 200 people. For the collection of Primary data I made a

Questionnaire and surveyed of 200 people. I also taken interview of many People those who were coming at the ICICI Bank’s Branch where I done my Project. During the SIP, emphasis is laid on understanding understanding the products and strategies of ICICI Prudential Prudential to know why why people prefer prefer to invest invest in those Products. This Project Project covers covers the topic topic “Analysi “Analysiss of the various various Savings Savings and Investm Investment ent Avenues Avenues with special special reference reference to mutual fund.” The data collected collected has been well organized organized and presented. All it is done keeping in mind that it information generated will assist the different level of management in different ways.

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OBJECTIVE: The marketi marketing ng research research is systema systematic tic and objecti objective ve identif identificat ication, ion, collecti collection, on, analysi analysis, s, dissemination, and use information for the purpose of assisting management in decision making related to the identification identification and solution of problem and opportunities opportunities in marketing. marketing. In order to survive in today’s competitive world one should monitor the internal and external environment strategically. The first and most objective of our fundamental fundamental exploratory study is to make generalization of consumers buying behavior towards the invest of money and then to measure the extent of   brand loyalty, altogether with knowing what other marketing mix variable affect buyers decision regarding the investment in different financial products. The study of consumer   behavior is the th e most important factor for marketing of any goods and services. The consumer   behavior suggest how individual, groups and organization select, buy, use and dispose of  goods, services, ideas or experience to satisfy their needs and wants. 1. To learn learn about about the variou variouss invest investme ment nt opp oppor ortun tunit ity y avail availab able le in the market market for  different kind of investors.

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2. To know individ individual ual investme investment nt pattern pattern in relation relation to different different demogra demographic phic and  psychographic factors. 3. To gain insigh insightt about about how invest investor or invest invest,, and what what factor factorss stim stimul ulate ate him to invest in different Mutual Funds. 4. To know the significant significant promotio promotion n mix that that plays role in particular particular market. market. 5. To test the brand loyalty among different different gender gender of different different age in today’s today’s highly highly competitive market. 6. To know know the the vari variou ouss mark market etin ing g mix mix that that infl influe uenc ncee the the cust custom omer er beha behavi vior  or  including place and product mix.

INDUSTRY PROFILE HISTORY OF THE MUTUAL FUND INDUSTRY IN INDIA The mutual fund industry in India started in 1963 with the formation formation of Unit Trust of India, at the initiative of the Government of India and Reserve Bank. Though the growth was slow, but it accelerated from the year 1987 when non-UTI players entered the Industry. In the past decade, Indian mutual fund industry had seen a dramatic improvement, both qualities wise as well as quantity wise. Before, the monopoly of the market had seen an ending phase; the Assets Under Management (AUM) was Rs67 billion. The private sector  entry to the fund family raised the Aum to Rs. 470 billion in March 1993 and April 2004; it reached the height Rs. 1540 billion.

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The Mutual Fund Industry is obviously growing at a tremendous space with 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 Unit Trust of India (UTI) was established on 1963 by an Act of Parliament by the Reserve Bank Bank of India India and funct functio ioned ned und under er the Regul Regulat atory ory and admin administ istra rati tive ve contro controll of the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial Development Bank of India (IDBI) took over the regulatory and administrative control in  place of RBI. The first scheme launched lau nched by UTI was Unit Scheme 1964. 196 4. At the end of 1988 UTI had Rs.6,700 crores of assets under management.

Second Phase – 1987-1993 (Entry of Public Sector Funds) 1987 marked the entry of non- UTI, public sector mutual funds set up by public sector   banks and Life Insurance Corporation of India In dia (LIC) and General Gene ral Insurance Ins urance Corporation of  India (GIC). SBI Mutual Fund was the first non- UTI Mutual Fund established in June 1987 followed by Canbank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC established its mutual fund in June 1989 while GIC had set up its mutual fund in Dece Decemb mber er 1990 1990.A .Att the the end end of 1993 1993,, the the mu mutu tual al fund fund indu indust stry ry had had asse assets ts unde under  r  management of Rs.47,004 crores.

Third Phase – 1993-2003 (Entry of Private Sector Funds) 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 1993 SEBI (Mutual Fund) Regulations Regulations were substituted by a more comprehensive comprehensive and revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI

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(Mutual Fund) Regulations 1996. As at the end of January 2003, there were 33 mutual funds with total assets of Rs. 1,21,805 crores.

Fourth Phase – February 2003 In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was  bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust of  India with assets under management of Rs.29,835 crores as at the end of January 2003, representing broadly, the assets of US 64 scheme, assured return and certain other schemes The 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 Regulations. consolidation and growth. As at the end of September, 2004, there were 29 funds, which manage assets of  Rs.153108 crores under 421 schemes.

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HISTORY OF ICICI GROUP

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1955 The Industri Industrial al Credit Credit and Investme Investment nt Corporat Corporation ion of India India Limited Limited (ICICI) (ICICI) was incorporated incorporated at the initiative of World World Bank, the Government of India and representatives representatives of  Indian Indian industry industry,, with with the objectiv objectivee of creatin creating g a developm development ent financi financial al institut institution ion for   providing medium-term medium-ter m and long-term project financing to Indian businesses. b usinesses. 

1994 ICICI established Banking Corporation as a banking subsidiary. Formerly Industrial Credit and Investment Corporation of India. Later, ICICI Banking Corporation was renamed as 'ICICI Bank Limited'. ICICI founded a separate legal entity, ICICI Bank, to undertake normal banking operations - taking deposits, credit cards, car loans etc.

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2001 ICICI acquired Bank of Madura (est. 1943). Bank of Madura was a Chettiar bank, and had acquired Chettinad Mercantile Bank (est. 1933) and Illanji Bank (established 1904) in the 1960s.

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2002 The Boards of Directors of ICICI and ICICI Bank approved the reverse merger of  ICICI, ICICI Personal Financial Services Limited and ICICI Capital Services Limited, into ICICI Bank. After receiving all necessary regulatory approvals, ICICI integrated the group's financing and banking operations, both wholesale and retail, into a single entity.

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Also in 2002, ICICI Bank bought the Shimla and Darjeeling branches that Standard Chartered Bank had inherited when it acquired Grindlays Bank.

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ICICI started its international international expansion by opening representative representative offices in New York  York  and London.

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2003 ICICI opened subsidiaries in Canada and the United Kingdom (UK), and in the UK  it established an alliance with Lloyds TSB.

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It also opened an Offshore Banking Unit (OBU) in Singapore and representative offices in Dubai and Shanghai.

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2004 ICICI opens a rep office in Bangladesh to tap the extensive trade between that country, India and South Africa.

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2005 ICICI acquired Investitsionno-Kreditny Bank (IKB), a Russia bank with about US$4mn in assets, head office in Balabanovo Balabanovo in the Kaluga region, and with a branch in Moscow. ICICI renamed the bank ICICI Bank Eurasia.

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Also, ICICI established a branch in Dubai International Financial Centre and in Hong Kong.

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2006 2006 ICIC ICICII Bank Bank UK open opened ed a bran branch ch in Antw Antwer erp, p, in Belg Belgiu ium. m. ICIC ICICII open opened ed representative offices in Bangkok, Jakarta, and Kuala Lumpur.

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2007 2007 ICIC ICICII amal amalga gama mate ted d Sang Sangli li Bank Bank,, whic which h was was head headqu quar arte tere red d in Sang Sangli li,, in Mahar Maharash ashtr traa State State,, and and which which had 158 branch branches es in Mahar Maharash ashtra tra and anothe anotherr 31 in Karnataka State. Sangli Bank had been founded in 1916 and was particularly strong in rural areas. •

ICICI also received permission from the government of Qatar to open a  branch in Doha.

•

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ICICI Bank Eurasia opened a second branch, this time in St. Petersburg.

2008 The US Federal Reserve permitted ICICI to convert its representative office in New York into a branch. 

ICICI also established a branch in Frankfurt.

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ICICI Banks has exposure to Subhiksha Trading Ltd which is facing Credit Crunch.

OVERVIEW OF ICICI GROUP ICICI Group offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialized group companies, subsidiaries and affiliates in the areas of personal banking, investment banking,

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life and general insurance, venture capital and asset management. With a strong customer  focus, the ICICI Group Companies have maintained and enhanced their leadership position in their respective sectors.

ICICI Bank is India's second-largest bank with total assets of Rs. 3,793.01 billion (US$ 75 billion) at March 31, 2009 and profit after tax Rs. 37.58 billion for the year ended March 31, 2009. The Bank has a network of 1,451 branches and about 4,721 ATMs in India and  presence in 18countries. 18cou ntries.

ICICI Prudential Life Insurance Company is a 74:26 joint venture with Prudential plc (UK). It is the largest private sector life insurance company offering a comprehensive suite of life, health and pensions products. It is also the pioneer in launching innovative health care products like Diabetes Care Active and health Saver.The company operates on a multi-channel platform and has a distribution strength of over 2,76,000 financial advisors operating from more than 2000 branches spread across 1800 locations across the country. In addition to the agency force, it also has tie-ups with various banks, corporate agents and brokers. In fiscal 2009, ICICI Prudential attained a market share of  10.9% based on retail weighted premium and garnered a total premium of Rs 153.56 billion registering a growth of 13% and held assets of Rs. 327.88 billion as on March 31, 2009.

ICICI Lombard General Insurance Company , a joint venture with the Canada based Fairfax Financial Holdings, is the largest private sector general insurance company. It has a comprehensive product portfolio catering to all corporate and retail insurance needs and is present in over 300 locations across the country. ICICI Lombard General Insurance has achieved a market share of 27.2% among private sector general insurance companies and an overall market share of 11.2% during fiscal 2009. The gross return premium grew by 2.2% from Rs. 33.45 billion in fiscal 2008 to 34.20 billion in fiscal 2009.

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ICICI Securities Ltd is the largest equity house in the country providing end-toend solutions (including web-based services) through the largest non-banking distribution channel so as to fulfill all the diverse needs of retail and corporate customers. ICICI Securities (I-Sec) has a dominant position in its core segments of its operations - Corporate Finance including Equity Capital Markets Advisory Services, Institutional Equities, Retail and Financial Product Distribution.

ICICI Securities Primary Dealership Limited is the largest Primary Dealer in Government Securities. It is an acknowledged leader in the Indian fixed income and money markets, with a strong franchise across the spectrum of interest rate products and services institutional sales and trading, resource mobilization, portfolio management services and research. One of the first entities to be granted Primary Dealership license by RBI, I-Sec PD has made pioneering contributions since inception to debt market development in India. ISec PD is also credited with pioneering debt market research in India. I-Sec PD has been recognized as the 'Best Domestic Bond House in India' by Asia money every year from 2002 to 2007 and selected as 'Best Bond House' by Financeasia.com for the years - 2001, 2004 to 2007 and 2009."

ICICI Prudential Asset Managemen Managementt

is the third largest mutual fund with

average asset under management of Rs. 514.33 billion and a market share of 10.43% as on March 31, 2009. The Company manages a comprehensive range of mutual fund schemes and  portfolio management services to meet the varying vary ing investment needs of its investor’s through162 branches and 185 CAMS official point of transaction acceptance spread across the country.

ICICI Venture is one of the largest and most successful private equity firms in India with funds under management in excess of USD 2 billion. ICICI Venture, over the years has  built an enviable portfolio p ortfolio of companies across a cross sectors including includ ing Life Sciences, Information

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Technology, Media, Manufacturing, Retail, Financial Services, and Real Estate thereby  building sustainable sustain able value. It has several severa l “firsts” to its credit in the Indian Private Equity industry. Amongst them are India’s first leveraged buyout (Info media), the first real estate investment (Cyber Gateway), the first mezzanine financing for a acquisition (Arch Pharmalabs), the first ‘royalty-based’ structured deal in Pharma Research & Development (Dr Reddy’s Laboratories - JV) and the first fund level secondary transaction (Coller  Capital).

TOP MANAGEMENT

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Sandeep Bakhshi Deputy Managing Director

So njo y Ch att erj ee Ex ec uti ve Dir  ect

N.S. Kannan Executive Director & CFO

K. Ra mk u m ar  Ex ec uti ve Dir  ect

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Board Members Mr. K. V. Kamath, Chairman Mr. Sridar Iyengar  Mr. Lakshmi N. Mittal Mr. Narendra Murkumbi Dr. Anup K. Pujari Mr. Anupam Puri Mr. M.S. Ramachandran Mr. M.K. Sharma Mr. P.M. Sinha Prof. Marti G. Subrahmanyam Mr. T.S. Vijayan Mr. V. Prem Watsa Ms. Chanda Kochhar, Managing Director & CEO Mr. Sandeep Bakhshi, Deputy Managing Director* Mr. N. S. Kannan, Executive Director & CFO* Mr. K. Ramkumar, Executive Director* Mr. Sonjoy Chatterjee, Executive Director 

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Board Committees

Audit Committee

Board Governance & Remuneration Committee

Mr. Sridar Iyengar, Chairman Mr. M. K. Sharma, Alternate Chairman Mr. Narendra Murkumbi

Mr. M. K. Sharma, Chairman Chairman Mr. K. V. Kamath Mr. Anupam Puri Mr. P. M. Sinha Prof. Marti G. Subrahmanyam

Customer Service Committee

Credit Committee

Mr. K. V. Kamath, Chairman Mr. Narendra Murkumbi Mr. M.K. Sharma Mr. P.M. Sinha Ms. Chanda Kochhar 

Mr. K. V. Kamath, Chairman Mr. Narendra Murkumbi Mr. M .K. Sharma Mr. P. M. Sinha Ms. Chanda Kochhar 

Fraud Monitoring Committee

Risk Committee

Mr. M. K. Sharma, Chairman Mr. K. V. Kamath Mr. Narendra Murkumbi Ms. Chanda Kochhar  Mr. Sandeep Bakhshi

Mr. K. V. Kamath, Chairman Mr. Sridar Iyengar  Prof. Marti G. Subrahmanyam Mr. V. Prem Watsa Ms. Chanda Kochhar 

Share Transfer & Shareholders'/ Investors' Grievance Committee

Committee of Directors

Mr. M. K. Sharma, Chairman Mr. Narendra Murkumbi Mr. N. S. Kannan

Ms. Chanda Kochhar, Chairperson Mr. Sandeep Bakhshi Mr. N. S. Kannan Mr. K. Ramkumar  Mr. Sonjoy Chatterjee

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Type

Founded

Private BSE & NSE:ICICI,  NSE:ICICI, NYSE  NYSE:: IBN 1955 (as Industrial Credit and Investment Corporation of India) India)

ICICI Bank Ltd., ICICI Bank Towers, Headquarters Bandra Kurla, Mumbai, Mumbai, India Key people

K.V. Kamath, Kamath, Chanda Kochhar , V Vaidyanathan, Madhabi Puri

Industry

Banking Insurance Capital Markets and allied industries

Products

Loans, Credit Cards, Cards, Savings, Investment vehicles, Insurance etc.

Revenue

▲ USD 5.79 billion

Total assets

Rs. Rs. 3793.01 billion (US$ 75 billion) at March 31, 2009. 24

Website

ICICI Bank 

ICICI Prudential Asset Management Company

Corporate Profile:Asse sett Mana Manage geme ment nt Comp Compan any y enjo enjoys ys the the stro strong ng pare parent ntag agee of  ICICI ICICI Prudent Prudential ial As Prudential Prudential plc, one of UK's largest players in the insurance & fund  management management sectors and ICICI Bank, a well-known and trusted name in financial services in India. ICICI Prudential   Asset Management Company, in a span of just over eight years, has forged a position of pre-

eminence in the Indian Mutual Fund industry as one of the largest asset management companies companies in the country with average assets under management of Rs. 70,197.43 Crore (as of Jun 30, 2009). The Company manages a comprehensive range of schemes to meet the varying investment needs of its investors spread across 230 cities in the country.

At inception ion - May 1998

As on Jun 30, 2009

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Average Assets Under  Management

Number of Funds Managed

Rs. 160 Crore

Rs. 70,197.43 Crore

2

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Awards & Recognitions

Asian Banker Leadership Achievement Award for Mr. K.V. Kamath

Padma Bhushan conferred on Mr. K. V. Kamath

Avaya Global Connect Customer Responsiveness Awards 2007

Gold Trusted Brand Awa

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ICICI Prudential Mutual Fund awarded ‘Most Trusted Mutual Fund Brand 2009’ by Brand Equity.

INTRODUCTION 1.Concept and Role of Mutual Fund •

A pool of money contributed by many investors and collectively managed by an asset management company

•

Investments made in accordance with stated objectives

•

A financial intermediary that allows small investors to participate in the securities market

•

Ownership of the fund is mutual and beneficial

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•

An investor becomes part owner of the fund s assets when he buys into the fund

•

The investor is allotted units for the amount subscribed.

The MF Cycle

2. Mutual Fund Structure & Constituents

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MF Structure in India A mutual fund has a 3-tier structure

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MF Structure in other countries Structure in USA

Management Company Similar to AMC Underwriter for Sales Management Group Similar to Sponsor  Custodian Structure in UK 

Open Ended - Unit Trusts regulated by Securities and Investment Board Closed Ended - Investment Trusts like a Company.

MF Constituents in India

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Trust -Mutual funds in India constituted as a Public Trust under Indian Trust Act, 1882 -The trust is registered with the Office of Public Trustee -OPT reports to the Charity Commissioner  -The trust or the fund has no independent legal capacity itself  -Acts in relation to the trusts are taken on its behalf by the trustees -Treated as a separate entity and a pass through vehicle -Has its own auditors, separate from the AMC.

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Sponsor -Promoter of the mutual fund -Creates a Trust under Indian Trusts Act, 1882 and registers it with Office of Public Trustee -Appoints Board of trustees/trustee company -Creates AMC under Indian Companies Act, 1956 -Fulfills necessary formalities and applies to SEBI for registration of the Trust as a Mutual Fund.

Sponsor Criteria -Min 5 years track record in financial services -Bank, corporate or an FI -Profit making in at least 3 out of past 5 years, including the previous year  -Positive Net Worth in last 5 years -At least 40% of the capital of the AMC -Net worth in the immediately preceding year more than the capital contribution to the AMC.

Trustee -Appointed by sponsor with SEBI approval -Have Registered ownership of investments -Formed either as Board of Trustees or Trustee Company -Power to appoints all other constituents -Appoint AMC through the Investment Management Agreement and delegate powers.

Trustee Criteria 33

-Minimum number of trustees is 4 2/3rd should be independent trustees i.e. no connection of profit (what so ever) with the sponsor  -Meet at least 4 times in a year to review functioning of AMC -Trustees hold the unit-holders money in fiduciary capacity -All major decisions need trustee approval -Right to seek regular information and take remedial action.

AMC

-Required to be registered with SEBI -Appointed as Investment Manager of the mutual fund -Appointed by the trustees via an Investment Management Agreement -Responsible for operational aspects of the mutual fund -Net Worth of at least Rs.10 crore at all times -At least 1/2 of the board members must be independent -Mostly, structured as a private limited company where Sponsor and associates hold capital -Quarterly reporting to Trustees.

Other Constituents Role Restrictions

-Sponsor of a fund cannot be its custodian -Sponsor of a fund can be a distributor  -Trustee of one mutual fund cannot be trustee of another mutual fund -Trustee of one fund cannot be AMC of another 

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-AMC of one fund cannot be Trustee of another  -AMC cannot have any business interest other than fund advisory.

Valuation of Securities  Equity

-Traded Securities Mark to Market i.e., last quoted closing price on the stock exchange where it is principally traded -Thinly Traded Traded Securities Those securities securities which are traded for less than 5 lacs and less than 50,000 shares Complex valuation method is used if the security is not traded for more than 30 days otherwise last traded price.

 Debt 

-Traded Securities as quoted in market upto last 15 days -Thinly Traded Securities those securities (except GoI securities) where there is no trade in marketable lot of Rs 5 Cr on valuation date -Securities with maturity up to 182 days are valued on the basis of amortization cost + accrued interest.

Taxation

-Mutual Fund is a pass through vehicle hence not taxed -Mutual funds are exempt from tax under section 10(23D) of Income Tax Act, 1961 -Taxation for investor  Dividend Capital Gain -Taxation -Taxation as per Equity fund (at least 65% of assets in domestic equity) or Other than Equity fund.

Mutual Funds & securities Markets Equity

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Market and products Asset classes Investment styles Value indicator  Debt

Market and products Terminology Investment styles Investment restrictions

Equity Portfolio Management Approaches to Portfolio Management Passive Active Investment Styles Growth Value Securities Research Fundamental Analysis Quantitative Analysis Technical Analysis Portfolio Management Organization Structure Fund Managers Security Analysts & Researchers Dealers.

Approaches to portfolio management Active management

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Aim for Out-performance Higher fees Selection and timing Passive Management Replicate a chosen Index Low fees.

Debt Investing Debt implies lending/loan Types of debt instruments Govt. Securities PSU Bonds FI Bonds Corporate Bonds Debentures

Money Market Securities Treasury Bills (T-Bills) Commercial Paper (CP) Certificate of Deposit (CD).

Debt Classification Classification of Debt Securities Tenor long or short Credit quality Government Securities/Corporate Securities/FI Bonds Secured/Unsecured Market Traded/Non-traded Interest

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Periodic or Discounted Fixed or Floating (Floater) Call or Put option .

Investment Policy Investment policy of each scheme dictated by the scheme s objective SEBI imposes certain restrictions on mutual funds to ensure investor protection Minimum 20 investors per scheme  No one to hold more than 25% 2 5% of the corpus Record of Investment decisions to ensure transparency.

Investment Restrictions Invest only in marketable securities Investment transactions only on delivery basis Securities have to be bought in the name of the scheme A mutual fund under all its schemes, cannot hold more than 10% of the  paid-up capital of o f a company Equity with voting rights representing 10% of paid-up capital of one stock.

Investment in Sponsor  No investment in unlisted unliste d securities of sponsor spon sor or an associate or group g roup company of the sponsor   No investment in privately placed securities of the sponsor or an associate a ssociate Investment in listed securities of the sponsor or associate company permitted

ICICI Prudential Life Insurance 38

ICICI Prudential Prudential Life Insurance Company is a joint venture between ICICI Bank, a premier  premier  financial powerhouse, and Prudential plc, a leading international financial services group headquartered headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector  insurance companies to begin operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). ICICI Prudential Life is also the only private life insurer in India to receive a National Insurer Financial Strength rating of AAA (Ind) from Fitch ratings. The AAA (Ind) rating is the highest rating, and is a clear assurance of ICICI Prudential's ability to meet its obligations to customers at the time of maturity or claims. For the past seven years, ICICI Prudential Life has retained its leadership position in the life insurance industry with a wide range of flexible products that meet the needs of the Indian customer at every step in life.

Insurance solution for individuals… individuals….. ..

ICICI ICICI Prudenti Prudential al Life Life Insuranc Insurancee offers offers a range range of innovati innovative, ve, custome customer-ce r-centr ntric ic  products that meet the needs of customers at every life stage. Its 17 products cab is enhanced with up to 6 riders, to create a customized solution for each policyholder.

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Savings & Wealth Creation Solutions…

Secure Plus is a transparent and feature-packed savings plan that offers 3 levels of   protection. Cash Plus is a transparent, transpar ent, feature-packed feature-pack ed savings plan pla n that offers 3 levels of protection as well as liquidity options. Save n Protect is a traditional endowment savings plan that offers life protection along with adequate returns. Cash Back is an anticipated endowment policy ideal for meeting milestone expenses like a child’s marriage, expenses for a child’s higher education or purchase of an asset. traditional endowment savings plan that offers life protection along with Save'n'Protect is a traditional adequate returns. CashBak is an anticipated endowment policy ideal for meeting milestone expenses like a

child's marriage, expenses for a child's higher education or purchase of an asset. It is available for terms of 15 and 20 years. LifeTime Gold is a unit-linked plan that offers customers the flexibility and control to

customize the policy to meet the changing needs at different life stages. It offers 7 fund options options - Preserv Preserver, er, Protect Protector, or, Balance Balancer, r, Flexi Flexi Balance Balanced d Multipl Multiplier, ier, R.I.C. R.I.C.H H and Flexi Flexi Growth. unit linke linked d plan plan that that provi provides des you with with an optio option n of lifec lifecycl ycle-b e-base ased d LifeStage LifeStage RP is unit  portfolio strategy that continuously re-distributes your money across various asset classes  based on your life stage. This will help h elp you achieve the right Asset Allocation to meet your  desired financial goals.

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singlee premi premium um unit unit linke linked d insur insuranc ancee plan plan whic which h combin combines es life life LifeLink LifeLink Supe Superr is a singl insurance cover with the opportunity to stay invested in the stock market. Premier Life Gold is a limited premium paying plan specially structured for long-term

wealth creation. InvestShield Life New is a unit linked plan that provides premium guarantee on the invested

 premiums and ensures that the customer receives only the benefits of fund appreciation without any of the risks of depreciation. LifeStage Assure a unit linked insurance plan that provide upto 450 % of first year 

 premium guarantee on maturity, with the additional advantage of a lifecycle based  portfolio strategy that allocates the investor’s money across various asset classes  based on his life stage stag e and risk appetite.

Protection Solutions……. Lifeguard is a protection plan, which offers life cover at very low cost. It is available

in 3 coupons – level term assurance, level term assurance with return or premium and single premium. mortgage reducing term assurance plan designed Home Assure is a mortgage

specifically specifically to help

customers cover their home loans in a simple and cost-effective manner.

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Education Solutions…………..

Child Solutions……. Smart kid child plans provide guaranteed educational benefits to a child along with life insurance cover for the parent who purchases the policy. The policy is designed to provide money at important important milestones in the child’s life. Smart Kid child planed are also also avail availabl ablee with within in unitunit-li linke nked d form form – both both singl singlee premi premium um and and regul regular  ar   premium. Market-linked Solutions

Life Link is a single premium Market Linked Insurance Plan, which combines life insurance cover with the opportunity to stay, invested in the stock market. Life Time Time offers customers the flexibility and control to customize the policy to meet the changing needs at different life stages. It offers 3 investment options –Growth Plan, Income plan and Balance plan. Retirement Solutions……………

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Forever Life is a retirement products targeted at individual in there thirties. Secure Plus Pension is a flexible pension plan that allows one to select between 3 levels of  cover.

Market-linked retirement products

Life Time Pension is a regular premium market-linked pension plan. Life Link  Pension Pension is a single single premium premium market market linked linked pensio pension n plan. ICIC ICICII Prudenti Prudential al

also

launched “Salaam Zindagi”, a social sector group insurance policy targeted at the economically underprivileged sections of the society. ForeverLife is a traditional retirement product that offers guaranteed returns for the first 4

years and then declares bonuses annually. LifeTime Super Pension is a regular premium unit linked pension plan that helps one

accumulate over the long term and offers 5 annuity options (life annuity, life annuity with return of purchase price, joint life last survivor annuity with return of purchase price, life annuity guaranteed for 5, 10 and 15 years & for life thereafter, joint life, last survivor annuity without return of purchase price) at the time of retirement. LifeStage Pension is a regular premium unit linked pension plan that provides you with a

unique lifecycle-based strategy that continuously re-distributes your money across various asset classes based on your life stage, eventually providing you with a customized retirement solution. Group Insurance Solutions…… ICICI Prudential also offers Group Insurance Solutions for companies seeking to enhance benefits to their employees.

43

Group Gratuity Plan…… ICIC ICICII Pru”s Pru”s group group gratu gratuit ity y plan plan helps helps emplo employer yerss fund fund thei theirr statu statutor tory y gratu gratuit ity y obligation in a scientific manner. The plan can also customize to structure schemes that can provide benefits beyond the statutory obligations.

Group Superannuation Plan

ICICI Bank offers flexible defined contribution superannuation scheme to provide a retir retirem ement ent kitty kitty for each each memb member er of the the group group.. Em Empl ploye oyees es have have the the optio option n of  choosing from various annuity options or opting for partial commutation of the annuity at the time of retirement.

Group Term Plan……

ICICI Pru”s flexible group term solution helps provides affordable cove coverr to memb member erss of grou group. p. Th Thee cove coverr coul could d be unif unifor orm m or base based d on designation/rank or a multiple of salary. The benefit under the policy is paid to the beneficiary nominated by the member on his/her death.

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Flexible Rider Options

ICICI Pru Life offers flexible riders, which can be added to the basic policy at marginal cost, depending on the specific of the customer. Accident Accident & disability disability benefit: If death occurs as the result of an accident

during the term of the policy, the beneficiary receives an additional amount equal to the sum assured under the policy. If the death occurs while traveling in an authorized mass transport vehicle, the beneficiary will be entitled to twice the sum assured as additional benefit. Accident benefit: This rider option pays the sum assured the rider on death

due to accidents. Critical Illness Benefit: protects the insured against financial loss in the

event of 9 specified critical illnesses. Benefits are payable to the insured for  medical prior to death. financial support in the event Major Surgical Assistance Benefits: provides financial of medical emergencies, emergencies, ensuring that benefits are payable to the life assured for medi medical cal expen expense sess Incurr Incurred ed for surgi surgical cal proce procedur dures. es. Cove Cove is offer offered ed against 43 different surgical procedures. Income Benefit: This rider pays the 10% of the sum assured to the nominee

every year, till maturity, in the event of the death of the life assured. It is available on Smart Kid, Secure Plus and Cash plus. Waiver of Premium: In Case of total and permanent due to an accident, the

 premiums are waived till maturity. This rider is available with Secure Plus and Cash Plus.

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S.W.O.T Analysis of ICICI PRUDENTIAL:

a. Strengths

The biggest strength of this origination is; Money power, which makes them ignorant about the gestation period Brand image, business experience and innovation product The agents are very selectively chosen have excellent communication skill Service quality which is crux of mission Larger network branches which is help to customer for payment Their strategy has been to grow the portfolio large enough so that there is an in built fund hedge and in market where the portfolio has a large element of saving rather then protection Product is price competitive compare with the competition and its upfront charge has been always lower since from inspection. Automatic balance the debt and equity component of the portfolio every quarter and first to come up with health product (diabetics). Average age of its policyholder is approx 8 year lower than LIC policyholder. Strong agent network that bring 60% of the total premium (lower commission but high volume)

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b. Weakness

High target for financial advisor and for sales department Many competitions in the market offer same product by the title difference in the premium and offering Sustainable to risk associated with investment in money market Try to catch middle lower level people also. High expenses on advertisement Most of the plans are too complicated in understanding for simple person so most of person avoids such type of plan More than 70% people live in rural area but ICICI Prudential is more centric in urban area.

c. Opportunity

Huge market is literally untapped, out of 320 million insurable markets only 25% of the  people insured Health insurance and pension scheme, an estimated market potential of approximately $15  billion ICICI Prudential Prudential should give the insurance coverage coverage both to the parents and children children so that their life should be covered in both cases the customer do not mind paying some premium for that India is fast growing market and 80 to 85% people are below age of 45 Leverage the customer base of Bancassurance partner 

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Strong distribution network  Insurance awareness are increasing in India

d. Threats

Player like Bajaj and Birla Sun Life with low premium for same plan Entry of other private company with equal strong experience and financial strength of partner  making the competition difficult and saturating the urban market. Current Govt. policies policies do not encourage in gross domestic domestic saving. If the tax liabilities of the service rise the customer will have little money to invest LIC has woken up from sleep and is following competitive strategies. Its huge surplus in life fund gives a capability to lodge price war  Product differentiation is difficult in market (bancassurance) Competition is getting keener in couple of year  High opportunity expenses will be in future

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Financial Planning Investment planning is an alien concept for the Indian populace. For a country which till now was worried about making ends meet this emerging trend is definitely a new experience. But, the truth is that if only they would have been introduced to the Art of Managing Money, life could have been so much easier. Most of the people spend more than half of his lives working and saving because money is important, in fact crucial. However, most of person spends almost no time planning to make that hard-earned money work more effectively for  them. So, how does a person plan his financial life? The first step of creating a financial planning is to identify the personal and family financial goals of an investor. Goals are based on what is most important to an individual. Short-term goals (up to a year) are things that one desires soon(house-hold appliances, a vacation abroad), while long-term goals identify what one wants later on in life (a home, education for  children, sufficient old age income). Take these short- and long-term goals and establish  priorities, making sure su re an emergency fund for fo r unfortunately happens. happ ens. Then estimate the cost of each goal and set a target date to reach it.

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DEFINITION OF FINANCIAL PLANNING:

Financi Financial al planning planning means defining defining client client s profile profile and goals goals and recomme recommendin nding g asset asset allocation and monitoring financial planning recommendations. The objective of financial  planning is to ensure that the right amount of money is available at the right time to the investor to be able to meet his financial goals. A good financial planning is very much essential in one s portfolio; it helps to grow the money in right proportion and at right time. The changing life cycle affects financial planning. A person's goals must be updated as his needs and circumstances change. In one's young adult years, short-term goals may include adequate insurance, establishing good credit, and just getting under way. During a person's middle years, the goals shift from immediate personal spending to education for children, their marriage and planning for retirement. In one's later years, travel may become a primary goal.

FINANCIAL PLANNING OBJECTIVES:

1. Standard of Living- Maslow's basic needs satisfied such as food, water, clothing, shelter, and nice-to-have discretionary items, such as automobiles, vacations, entertainment.

2. Savings-emergency funds for sudden and unexpected events, such as extra living expenses  because of a fire at one's on e's home.

3. Protection- Disability Income Insurance; Health Insurance; Life Insurance; Property and Liability Insurance (all forms designed to offer coverage against the uncertainty of a financial loss due to the Pure Risk).

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4. -Investment-Accumulation of wealth through the return on assets deployed leading to financial independence. 5. -Estate Planning-distribution of the invested assets held for the purpose of the accumulation of wealth in a tax efficient and effective manner.

THE RIGHT ASSET ALLOCATION

Every one want to invest but problem is that how to invest, where to invest and when to invest and what should be the right asset allocation. The project found that there are three major asset classes that one can put his money into, namely equities, fixed income and money market instruments. In order to decide how much money goes into which investment class a person must first consider a few important factors (most of these will be tackled by him during his goal definition phase)

•

Return expected on investment

•

Amount he will be able to save (present as well as future)

•

Cash outflows he might have at certain points of time in the future

•

Risk appetite

•

Amount, a person will require for old age (Retirement)

•

Liquidity

•

Age

Example- If supposes you are a person who broadly falls into the Investment Growth category you might be interested in looking at an Aggressive portfolio. On the other hand if you are leaning towards an interest income with minimal risk  investments you might look at a Conservative asset allocation. Someone who wants a bit of  steady income as well as asset growth might go in for a moderate or a balanced asset allocation.

51

Another way to ascertain the right asset allocation allocation is by looking at your life cycle. The basis of this theory lies in the simple maxim that younger people with secure jobs will normally opt for higher returns and take higher risks compared to older retired people. One must remember remember that these are only indicative strategies and will probably have to be fine-tuned to meet your individual needs.

AGE

MAIN OBJECTIVES

Aggressive Growth Sow the seeds, plan for housing and create a safety cushion

20-29

PORTFOLIO STRATEGY

50% - Growth Funds 30% - Balanced Funds 20% - Money Markets / Cash

45% - Growth Funds

30-39

Growth Save for housing, childrens

30% - Balanced Funds

expenses (present and future education etc.) and safety cushion

05% - Blue Chip Stocks 20% - Money Markets / Cash

52

40% - Growth Funds

40-49

Safety Preserve investments/ savings and opt for minimal growth

30% - Balanced Funds 10% - Blue Chip Stocks 20% - Money Markets / Cash

30% - Growth Funds

50-59

Retirement Save for retirement and

40% - Balanced Funds

 build on safety cushion cush ion

10% - Blue Chip Stocks 20% - Money Markets / Cash

10% - Balanced Funds Safety Preserve investments/ savings and opt for minimal growth

60-69

15% - Income Funds 10% - Blue Chip Stocks 20% - Dividend Stocks 30% - Certificates of Deposits (Shorter-term) 15% - Money Markets / Cash 30% - Income Funds

Safety Preserve investments/ savings

70 & UP

25% - Dividend Stocks 35% - Certificates of Deposits (Shorter-term)

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INVESTMENT PLANNING: The sooner the better . By investing into the market right away an investor allow investments investments more time to grow, whereby the concept of compounding interest swells his income by accumulating earnin earnings gs and divide dividends nds.. Consid Consideri ering ng the unp unpred redict ictabi ability lity of the market markets, s, resear research ch and history history indicates these three golden rules for all investors.

1. Invest earl arly 2. Inv Invest est regu regula larl rly y 3. Invest Invest for for long long term term and and not not short short term term..

There is always a first time for everything so also for investing. To invest it needs capital free of any obligation. If a person is in the habit of saving sufficient amount every month, then he is ready for  investing. In this way he would be able to meet his financial requirements in future.

PROFESSIONAL INVESTMENT MANAGEMENT:

The complexities of today s financial environment have led many individuals and corporations to conclude that full-time, professional investment management is a necessary element of a successful investment plan. Individuals and families today bear an ever-growing responsibility for achieving and sustaining financial and economic stability across the life span. Never has there been a greater need for well-trained well-trained professionals professionals who can help individuals individuals and families make informed informed and effective effective financial and economic decisions and who can evaluate and recommend the public policies that influence the economic opportunity and future of individuals and families.

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This project emphasized that it is best to partner a professional in the field of investments who would assist in planning investments. According to report professional helps to suggest best things in investment.

BENEFIT OF FINANCIAL PLANNING: One should invest so that his money grows and shields against rising inflation. If prices rise  by four fou r per cent annually ann ually it would not be sufficient sufficien t if savings only give g ive a return of o f three per  cent. It gives a deficit of one per cent for. The idea is that rate of return on investments should be greater than the rate of inflation, leaving him with a nice surplus over a period of  time.

PROCESS OF PERSONAL FINANCIAL PLANNING:

Today, managing one s investment has become much more challenging and complex then ever. This is especially true for an ordinary investor. This is due to the fact that stock markets across the globe are witnessing unprecedented volatility owing to the uncertain economic and political situation. Though the FEDERATION FEDERATION has hinted at increasing the interest rates, the pace of increasing is causing uneasiness among the investing community. Though the central banks across the world are also increasing interest rates steadily. RBI has already shown such urgency in signaling for increasing the interest rates. Domestic markets have also become more integrated with the global markets ever since the technology boom of late 1990s. This has further added to the volatility of the markets .All these are making equity investing much more challenging for individual investors.

Financial Planning Process Denotes the process which typically includes the six elements-:

55

(1) Establishing Establishing and defining defining the client-planner client-planner relationshi relationship, p,

(2) Gathering Gathering client client data including goals.

(3) Analyzing Analyzing and evaluating evaluating the clients clients financial financial status. status.

(4) Developing Developing and presenting financial financial planning planning recommendations recommendations and/or Alternativ Alternatives. es. (5) Implementing Implementing the financial financial planning recommen recommendations dations .

(6) Monitoring Monitoring the financial financial planning planning recommendati recommendations. ons.

INSTRUMENTS OF FINANCIAL PLANNING WITH SPECIAL EMPHASIS ON MUTUAL FUNDS : Mutual funds A mutual fund is types of investment vehicle where investors pool their money in order to allow each investor participate in a portfolio of securities. The individual investor doesn't actually own each security but instead, he owns shares of the mutual fund. The main benefit of a mutual fund is that it provides a way for the investor to achieve diversification in his investments without having to invest a lot of money.

Insurance In general, life insurance is a type of coverage that pays benefits upon a person's death or  disability. In exchange for relatively small premiums paid in the present, the policy holder  receives the assurance that a larger amount of money will be available in the future to help his or her beneficiaries pay debts and funeral expenses. Some forms of life insurance can

56

also be used as a tax deferred investment to provide funds during a person's lifetime for  retirement or  Everyday living expenses.

Post Office Savings: Post Office Monthly Monthly Income Scheme is a low risk saving instrument, instrument, which can be availed through any post office. It provides an interest rate of 8% per annum, which is paid monthly. Minimum Minimum amount, amount, which which can be invested invested,, is Rs. 1,000/1,000/- and additional additional investment investment in multiples of 1,000/-. Maximum amount is Rs. 3, 00,000/- (if Single) or Rs. 6, 00,000/- (if held jointly) during a year. It has a maturity period of 6 years. A bonus of 10% is paid at the time of maturity. Premature withdrawal is permitted if deposit is more than one year old. A deduction of 5% is levied from the principal amount if withdrawn prematurely; the 10% bonus is also denied.

Bonds: It is a fixed income (debt) instrument issued for a period of more than one year with the purpose of raising capital. The central or state government, corporations and similar institutions sell bonds. A bond is generally a promise to repay the principal along with a fixed rate of interest on a specified date, called the Maturity Date .

Company Fixed Deposits : These are short-term (six months) to medium-term (three to five years) borrowings by companies at a fixed rate of interest which is payable monthly, quarterly, semi-annually or  annually. They can also be cumulative fixed deposits where the entire principal along with

57

the interest is paid at the end of the loan period. The rate of interest varies between 6-9% per  annum for company FDs. The interest received is after deduction of taxes.

Money Market or Liquid Fund  –  These funds are also income funds and their aim is to provide easy liquidity, preservation of  capital and moderate income. These schemes invest exclusively in safer short-term instruments such as treasury bills, certificates of deposit, commercial paper and inter-bank  call money, government securities, etc. Returns on these schemes fluctuate much less compared to other funds. These funds are appropriate for corporate and individual investors as a means to park their surplus funds for short periods.

GROWTH IN ASSETS UNDER MANAGEMENT The graph indicates the growth of assets over the years.

58

Source: amfiindia.com amfiindia.com

Benefits: mutual funds

59

Comparison of Investment Products Investment Products:

60

Comparison of financial products:

61

62

Mutual Fund vs. Direct Equity

Mutual Fund vs. Bank Deposit Mutual Funds

Bank Deposits

63

-No contractual agreement

-Contractual agreement

-No guarantee

-Guaranteed for repayment

-Direct holding of a portfolio

-No direct holding of a portfolio of  investment

-Return commensurate with risk.

Why MF is the best option •

Combine the advantages of all investment products -flexibility, convenience, affordability, liquidity, potential for high returns

•

Dispense the short comings of the other options -liquidity, low return expectation, risk diversification

•

Returns are adjusted for market movements -Commensurate with level of risk.

Risk in Mutual Fund Investing What is Risk? •

Volatility of earnings viz. deviation (+ & - ) from expected earnings

Possibility of Financial loss

•

Risk can be built into the investment planning by

64

-Defining the risk appetite of the investor and aligning investment objectives to risk  tolerance -Evaluating and measuring risks of portfolio to keep in line with the investor s risk  Appetite

The right level of risk tolerance of any investor depends upon age, investable funds,

•

circumstances including income level, job security, family size etc.

Type of risk in Equity Funds

Company Specific

• 

Sector Specific

• 

• 

 Market Risk  -Company and Sector risk can be reduced with diversification but market risk 

cannot  be diversified

Jacob s recommendation based on risk level

65

Risk-Return Hierarchy

66

Measures of Risk  Risk  Standard Deviation Beta Ex-marks Alpha

Standard Deviation (Volatility) •

Best measure of risk 

•

Measure of absolute or total risk of a portfolio

•

Dispersion around mean

•

Quality rating of the average

•

Higher S.D. indicates more volatile returns

67

-Lower deviation means less risk  •

High S.D. need not mean poor performance

Beta (Sensitivity) •

Shows how sensitive a fund is to market moves -If the Sensex moves by 25%, a fund s bet number will tell you whether the fund s return will be more or less.

•

Beta value for an Index is taken as 1

•

Multiplying the beta value of a fund will expected percentage movement of an index gives the expected movement in the fund

•

Higher beta means higher impact of market returns

•

Lower beta means less risk  -Higher beta funds do well in a rising market, lower beta funds do better in a falling market.

Alpha: •

Measure of a fund manager's performance

•

Tells what the fund has earned over and above (or under) what it was expected to earn

•

This is the value added (or subtracted) by the fund manager's investment decisions

•

Alpha tells you whether that fund has produced returns justifying the risks it is taking by comparing its actual return to the one 'predicted' by the beta -Say, a fund can be expected to earn based on its beta a return of 15 per cent in a given year. However, it actually fetches you 18 per cent. Then the alpha of the fund is simply 18 - 15 = 3

68

•

Index funds always have or should have, if they track their index perfectly an alpha of zero.

Equity Market Snapshot: Fundamentals: The Indian economy’s early rebound was imminent as infrastructure output grew 2.8% YoY in May ’09 as compared to upwardly revised 5% YoY (from 4.3% earlier) in April ’09 and the industrial production for April 2009 bounced back into the positive zone after declining three times in four months. The IIP rose 1.4% in April 2009 from a revised 0.75% decline (2.3% estimated earlier) in March 2009. Revival in industrial output and higher advance tax collections over the corresponding  period last las t fiscal further raised rais ed hopes of economic econo mic recovery on account of government gover nment thrust on infrastructure, soft monetary policy stance of RBI and government’s fiscal stimulus. Though most economists have begun upgrading the forecasts for GDP growth for FY10 from  below 6% to around 6.5%, a lot depends on the progress of the Annual Monsoon over the next couple of weeks. So far, the same has been delayed and is below expected levels. However, the Met department has forecast that the same could catch up in July & august. Analysts are counting on a sharper recovery in the second half of the year, as exports pick  up, investment demand gathers pace and consumer spending becomes robust, evident from an aggressive GDP growth target for FY10 at 7%(+/- 0.75%) as per the Economic Survey 2009-10, supported by the inclusive growth Budget for FY10.

Market Sentiments The Indian stocks markets remained highly volatile and ended slightly down with a loss of  0.9% for the Sensex during June ‘09 in line with the stock markets around the world. The

69

markets were range bound as there were a host of factors pulling the markets in both directions on account of negative global cues, profit booking by FIIs after a sharp rally on one hand hand and and reform reform expec expecta tatio tions, ns, optim optimist istic ic bud budget get expect expectati ations ons,, upb upbea eatt dom domest estic ic economic data and the potential outperformance of Indian economy among the Asian peers on the other. Software outsourcers moved higher on talks worst may be over for the US economy and the US banking system. Metal stocks corrected as metal prices on the London Metal Exchange Exchange declined after recent sharp run-up. Fears of fuel  price hike kept sentiment sen timent on Auto stocks lower. lower . Infrastructure-focused Infrastructure-focu sed companies gained on

expectation of reforms and spending from Union Budget. BSE Sensex with gains of 50% YTD has outperformed MSCI Emerging Markets Index (+27%) and MSCI World Index (+5%) on the back of strong liquidity liquidity and positive sentiment. Mid caps and Small caps have got re-rated on the back of recovery hopes and they continued to outperform.

Outlook and Recommendation Being the first major policy announcement from the new UPA government, the market had  built huge expectations from the budget announcement, expecting the same to deliver on  practically all the key reforms such as foreign direct investment, divestment in PSUs and roadmap towards reining in fiscal deficit. Due to the lack of a clear policy on any of the above, the market has reacted adversely. adversely. Though the Budget recommends ‘earliest’ revert to fiscal consolidation, consolidation, but failed to provide a roadmap for the same. Through higher spending on infrastructure, benefits to farmers and tax cuts for individuals the government seeks to  boost economic growth by encouraging consumer spending. As expected, the emphasis of  the the gove govern rnme ment nt cont contin inue uess on the the ‘aam ‘aam aadm aadmi’ i’ and and prom promot otin ing g incl inclus usiv ivee grow growth th by announcing announcing various measures on social sector. Corporate Corporate taxes not being changed much and continuation of sops to sectors hit by slowdown is another positive. Though the market was euphoric in its expectations, we were cautious that reforms cannot happen overnight and will  be spread over a period of time. The market will closely watch for the steps taken by the government outside of the

70

 budget for determining future course of action. Global market has more money and less opportunity. Indian market has many opportunities and need for capital. At some point of  time, the twin shall meet and flow of capital from global markets will augment with the local savings to accelerate economic momentum in India. Thee equit Th equity y marke markets ts will will benefi benefitt from from the the acce acceler lerate ated d econo economi micc mo mome ment ntum um whic which h is supported by enhanced government spending, money in the hands of consumer and higher  capital flows. It is clear that though some consolidation post Budget and due to excess supply pressure is imminent, we believe that the bottom of the market has shifted higher than October ’08 lows and every dip should be used as an opportunity to increase allocation to equities through systematic investment from the 3 to 5 year horizon.

RECOMMENDATION FOR ICICI PRU. FUNDS:

ICIC ICICII Prud Pruden enti tial al have have a wide wide rang rangee of well well perf perfor ormi ming ng fund fundss and and I am

stro strong ngly ly

recommending ICIC (large ge cap cap fund fund), ), ICICI ICICII Prud Pruden enti tial al Focu Focuse sed d Eq Equi uity ty Fund Fund (lar Prudential Dynamic Plan (flexi-cap asset allocation fund for conservative investors) and ICICI Prudential Infrastructure Fund (thematic fund looking to capitalize on the growth

opportunity). For investors wary of risks that come along with equity, but at the same time would like to initiate investments in equity through a product which bridges the gap between equity and debt, we recommend an investment in ICICI Prudential Monthly Income Plan.

Three types of mutual fund are mainly recommended by me during the summer internship.

1. ICICI Prudential Focused Equity Fund 2 .ICICI Prudential Dynamic Plan 71

3 . ICICI Prudential Infrastructure Fund

ICICI Prudential Focused Equity Fund: (Open Ended Concentrated Equity Scheme) WHY SHOULD ONE INVEST?  To Maximize long term capital return return by investing the equity and equity equity related securities of about 20 large cap companies.

SNAPSHOT : Fund Manager^ : Prashant Kothari

(Managing this fund since inception & over 5 yrs of  72

experience as equity analyst & fund manager) Indicative Investment Horizon: 3 yrs & more Inception date: 23-05-2008 Average AUM: Rs. 630.76 crores NAV (As on 30-June-09): Growth option : Rs. 10.76 Dividend option : Rs. 10.76 Institutional Option -I : Rs. 10.89 **Expense Ratio : Retail option : 2.20% Institutional option : 1.20%

Fund Manager’s Comment

The fund increased equity exposure to 94% including 11% exposure to Nifty Futures in order  to maintain liquidity and maneuverability. The fund is overweight Banks and Software on the  back of earnings visibility vis ibility and attractive attractiv e valuations.

ICICI Prudential Dynamic Plan (Open ended Diversified Equity Fund) WHY SHOULD ONE INVEST? Medium term investment of funds for capital appreciation by managing cash and equity  portfolio.

73

SNAPSHOT : Fund Manager^ : Sankaran Naren

(Managing this fund since Sept., 2006 & over 18 yrs of  experience in fund management, equity research, operation etc.) Indicative Investment Horizon: 3 yrs & more Inception date: 31-10-2002 Average AUM: Rs. 1,498.89 crores NAV (As on 30-June-09): Growth option : Rs. 69.4938 Dividend option : Rs. 15.1355 Institutional Option-I : Rs. 10.7440 **Expense Ratio : Retail option : 1.95% Institutional option-I : 1.00%

Fund Manager’s Comment : The fund’s equity exposure is at 83%. The fund is a good mix of large caps and mid-caps. The fund continues to maintain an overweight position in Pharma and Consumer NonDurables on account of defensive nature. The fund is underweight Telecom Services and Indust Industria riall Capi Capita tall Goods Goods/C /Cons onstru truct ction ion on valua valuati tion on conce concerns rns.. Th Thee fund fund has has turne turned d overweight Software in order to take advantage of attractive valuation levels.

ICICI Prudential Infrastructure Fund

(Open Ended Equity fund) 74

WHY SHOULD ONE INVEST? Long term investment of fund for capital appreciation derived from the growth and development Of the infrastructure fund.

SNAPSHOT : Fund Manager^ : Sankaran Naren

(Managing this fund since Oct., 2005 & over 18 yrs of  experience in fund management, equity research, operation etc.) Indicative Investment Horizon: 5 yrs and more Inception date: 31-08-2005 Average AUM: Rs. 3,812.63 crores NAV (As on 30-June-09): Growth option : Rs. 24.20 Dividend option : Rs. 11.07 Institutional option-I : Rs. 12.95 **Expense Ratio : Retail option : 1.80% Institutional option-I : 1.00%

Fund Manager’s Comment: The fund’s investment in equity stands at ~90. The fund has written Nifty Puts to the extent of 18% and has used covered calls on stocks to ride the volatility. The Exposure to Banks is significantly high in current falling interest rate environment and Power on the back of visibility in earnings. The allocation remains skewed towards large caps, due to cautious market scenario.

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PROCESS/METHODOLOGY PROCESS/METHODOLOGY OF STUDY: Procedure: The procedure that followed enlisted below: 1. Stud Studyi ying ng the the prod produc uctt 2. Decisio Decision n on object objective ive neede needed d to be be work work on. on. 3. Devel Developi oping ng Surve Survey y instrum instrument entss 4. Gett Getting ing quest question ionnai naire re fill filled ed throug through h inte interac ractin ting g with with diffe differen rentt age groups groups,, sex, sex, monthly income and occupation. 5. Finally Finally analyzing analyzing the data of various areas and trying to to study about about various various influence influence factors.

Process adopted: Gaining knowledge about the product:

Reading about the product was the first step undertaken. This gave not only in depth knowl kno wledg edgee about about what what is been been offer offered ed by the the insur insuran ance ce but also also proved proved usef useful ul whil whilee devel developi oping ng the quest question ionnai naire re.. Th Thee main main instr instrum ument entss requi required red for for surve survey y was was a well well-developed questionnaire. The questionnaire development took place in a series of steps as described below: Customer Survey : The survey is important tool as clear perception of people about the

 product can be estimated and known. The need n eed levels of the th e people regarding the insurance  product been observed through th rough survey. survey . It was very useful in knowing about the requirements of the people.

Type of research Descriptive Research design Research Design: A two stage Research been conducted:

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➢Secondary Research :

Collection of data from websites and catalogues to understand the

 product and the charges c harges of the different differen t AMC.

➢Primary Research :

A Primary Research been conducted:

The questionnaire was prepared for the companies and following areas covered: •

Selling Strategy of AMC Company

•

Consumer profile

•

Satisfaction level with the current AMC on the basis of return

•

Reason for the selection of specific MUTUAL FUND PLAN and company

•

Desirable features of the product and risk aptitude

Sampling Plan:

Elements: The target population of the study included the general population above the age of 25 yrs Target population: Adults meeting qualifications-over 25 years, working class, businessman,  personnel having havin g children Sampling frame- Urban class in the Jaipur region Sample size: 200 Sampling unit: urban class personnel

Sampling technique Sampling techniques used for the data collection will be purely non probability type (Purposive Sampling, Quota Sampling), where data will be taken randomly without any prejudice.

DATA COLLECTIONS Data Collection Plan:

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The first of Research consisted of secondary data search from the following sources: ○

Catalogues

○

Websites

For the conclusi conclusive ve researc research, h, question questionnair naires es been developed developed on basis basis of secondar secondary y data to gather information on the research objective.

Data Analysis & Interpretation 1.

Age distribution of the Investors of   Jaipur

Interpretation: According to this chart out of 120 Mutual Fund investors of Jaipur the most are in the age group of 36-40 yrs. i.e. 25%, the second most investors are in the age group of 41-45yrs i.e. 20% and the least investors are in the age group of below 30 yrs.

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2.Monthly Family Income of the Investors of Jaipur.

Interpretation: In the Income Group of the investors of Jaipur, out of 120 investors, 36% investors that is the maximum investors are in the monthly income group Rs. 20,001 to Rs. 30,000, Second Second one i.e. 27% 27% investors investors are in the monthly monthly income group of more than Rs. 30,000 30,000 and the minimum minimum investor investorss i.e. 4% are in the monthly monthly income income group of below Rs. 10,000

3. Investors invested in different kind of  investments.

Interpretation:

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From the above graph it can be inferred that out of 200 people, 97.5% people have invested in Saving A/c, 76% in Insurance, 74% in Fixed Deposits, 60% in Mutual Fund, 37.5% in Post Office, 25% in Shares or Debentures, 15% in Gold/Silver and 32.5% in Real Estate.

4. Preference of factors while investing

Interpretation: Out of 200 People, 32% People prefer to invest where there is High Return, 30% prefer to invest where there is Low Risk, 20% prefer easy Liquidity and 18% prefer Tax benefit

5. Source of information information for customers about Mutual Fund

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Interpretation: From the above chart it can be inferred that the Financial Advisor is the most important source of information about Mutual Fund. Out of 135 Respondents, 46% know about Mutual fund Through Financial Advisor, 22% through Bank, 19% through Peer Group and 13% through Advertisement.

6. Investors invested in Mutual Fund

Interpretation: Out of 200 People, 60% have invested in Mutual Fund and 40% do not have invested in Mutual Fund. It shows lack of awareness of the mutual fund as a type of investment product.

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7. Reason for not invested in Mutual Fund

Interpretation: Out of 80 people, who have not invested in Mutual Fund, 81% are not aware of Mutual Fund, 13% said there is likely to be higher risk and 6% do not have any specific reason.

8. Investors invested in different Assets Management Co. (AMC)

Interpretation: 82

In Jaipur most of the Investors preferred UTI and Reliance Mutual Fund. Out of 120 Investors 62.5% have invested in each of them, only 46% have invested in SBIMF, 47% in ICICI Prudential, 37.5% in Kotak and 25% in HDFC.

9. Preference of Investors for future investment in Mutual Fund

Interpretation: Out of 120 investors, 68% prefer to invest in Reliance, 67% in ICICI Prudential , 63% in SBIMF, 62.5% in Others, 50% in Kotak, 37.5% in UTI and 29% in HDFC Mutual Fund.

10. Mode of Investment Preferred by the Investors

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Interpretation: Out of 120 Investors Investors 65% preferred One time Investment and 35 % Preferred Preferred through Systematic Investment Plan.

11. Preferred Portfolios by the Investors

Interpretation: From the above above graph graph 46% prefe preferred rred Equity Equity Portf Portfolio olio,, Balance and 17% preferred Debt portfolio.

37% pref preferre erred d

Findings

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➢

In Jaipur in the Age Group of 36-40 years were more in numbers. The second most Investors were in the age group of 41-45 years and the least were in the age group of below 30 years.

➢

In Occupation group most of the Investors were Govt. employees, the second second mo most st Inves Investo tors rs were were Priv Privat atee emplo employee yeess and the least least were were associated with Agriculture.

➢

In family Income group, between Rs. 20,001- 30,000 were more in numbers, the second most were in the Income group of more than Rs.30,000 and the least were in the group of below Rs. 10,000.

➢

About all the Respondents had a Saving A/c in Bank, 76% Invested in Fixed Deposits, Only 60% Respondents invested in Mutual fund.

➢

Mostl Mo stly y Respo Responde ndent ntss prefe preferre rred d High High Retu Return rn while while inves investm tment ent,, the the second most preferred Low Risk then liquidity and the least preferred Tax benefits.

➢

Only Only 67% 67% Resp Respon onde dent ntss were were awar awaree abou aboutt Mu Mutu tual al fund fund and and its its operations and 33% were not.

➢

Among 200 Respondents only 60% had invested in Mutual Fund and 40% did not have invested in Mutual fund.

➢

Out of 80 Respondents 81% were not aware of Mutual Fund, 13% told there is not any specific specific reason for not invested in Mutual Fund and 6% told there is likely to be higher risk in Mutual Fund.

➢

Most of the Investors had invested in Reliance or UTI Mutual Fund, ICICI Prudential has also good Brand Position among investors.

➢

For Future investment the maximum Respondents preferred Reliance Mutual Fund, the second most preferred ICICI Prudential, SBIMF has  been preferred after afte r them.

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➢

60% Investor Investorss preferre preferred d to Invest Invest through through Financia Financiall Advisors Advisors,, 25% through AMC (means Direct Investment) and 15% through Bank.

➢

65% preferred preferred

One Time Time Investmen Investmentt and 35% preferred preferred SIP out of 

 both type of Mode of Investment. Inv estment. ➢

The most preferred Portfolio was Equity, the second most was Balance (mixture of both equity and debt), and the least preferred Portfolio was Debt portfolio.

SOME OTHER INTERESTING FINDINGS DURING SALES: Investors are not satisfied satisfied with with after sale sale service. service. Respondents Respondents reacted reacted that most most of time 1. Investors they do not receive important documents and statement on time. 2. Lack of awareness- people are not aware about mutual funds, their working system and  business and investment philosophy. The project found that due to unawareness people not like Mutual fund invest although they have enough fund.

3. Mis-conception about equity market- Majority of people avoids investing in mutual fund due to its relation with share market. Still they think that mutual fund is also speculative in nature. So they like to invest in real estate, gold etc. 4. Conservative approaches- Respondents are not ready to bear risk on investing in MF, Share Market. 5. People still carry a traditional approach - People still have a notion in their mind that investing investing in fixed deposit is far better than mutual funds, because fixed deposits do not carry risk factor with them.

6. People should invest early- investment early means you are getting benefit of  Compounding. Respondents are not aware the concept of compounding which make money double magically. During the survey I came across that there is still oblivion of the fact that the people who invest early always has a upper edge over the people who invest at a later  stage in their life.

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7.People still believe that bank is only for depositing and withdrawing money , people do not have knowledge that banks is not the place just for depositing or withdrawing money it  provides with the various vario us other alternatives through which you can raise r aise your money .

Conclusion Running a successful Mutual Fund requires complete understanding of the  peculiarities of the Indian Stock Market and also the psyche of the small investors. This study has made an attempt to understand the financial behavior  of Mutual Fund investors in connection with the preferences of Brand (AMC), Products, Products, and Channels Channels etc. It is observed observed that many of people have have fear of  Mutual Fund. They think their money will not be secure in Mutual Fund. They need the knowledge of Mutual Fund and its related terms. Many of people do not have invested in mutual fund due to lack of awareness although they have money to invest. As the awareness and income is growing the number of  mutual fund investors are also growing. “Bra “Brand” nd” plays plays impor importan tantt role role for the the invest investme ment nt.. Peopl Peoplee invest invest in those those Companies where they have faith or they are well known with them. There are many AMCs in Jaipur but only some are performing well due to Brand aware awarenes ness. s. Some Some AMCs AMCs are not perfor performi ming ng well well altho although ugh som somee of the the schemes of them are giving good return because of not awareness about Brand. ICICI Prudential Reliance, UTI, SBIMF, etc. they are well known Brand, they are performing well and their Assets Under Management is larger  than others whose Brand name are not well known like Principle, Sunderam, etc. Distribution channels are also important for the investment in mutual fund. Fina Financi ncial al Advi Advisor sorss are the mo most st prefe preferre rred d channe channell for the invest investme ment nt in mutual fund. They can change investors’ mind from one investment option to

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others. Many of investors directly invest their money through AMC because they do not have to pay entry load. Only those people invest directly who know well about mutual fund and its operations and those have time.

Limi Limitat tation ion of the study study 1. Some of the people were not so responsive. 2. Possibility Possibility of error error in data data collection collection because because many of investors investors may have not given actual actual answers of my questionnaire.

3. Sample size is limited to 200 visitors of ICICI Bank, C- Scheme Branch, and Jaipur out of  these these only only 120 had inves investe ted d in Mu Mutu tual al Fund. Fund. The sample sample size may may not adequat adequately ely represent the whole market. Some responde respondents nts were reluctant reluctant to divulge divulge personal personal informatio information n which which can affect affect the 4. Some validity of all responses.

5. The research is confined to a certain parts of Jaipur. 6. Th There ere was was time time constr constrai aint. nt.

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Recommendations: 1. ICICI PRU AMC should provide after sale service. service. Investors expects that after investing all necessary documents like bonds, receipts, statement, any important schemes and information should reach on time. So they can get actual status of their investment. 2. AMC should provide canopy to its marketing team for general awareness and also various seminars held in the city so that people should gain idea about mutual funds. Company should organize cultural program so that people can feel it as own company. Corporate social responsibility (CSR) should adopt by company. 3. Provide customer care service Company should provide customer care service where every one can complaint there problem and get the satisfactory solution. 4. Special Benefits and offers for regular and loyal customers. AMC should provide special  benefits for its regular regu lar and loyal customer for long term relationships. relationsh ips. 5. There has to be some corporate presentation: Every company wants to increase their client  profile and business busine ss and for it they do every ev ery thing in possibly way. ICICI PRU should hold some corporate presentation at various places where they can exchange their view & ideas and share knowledge. 6. Time to time training and meetings should be conduct so that employees motivate and update with advance knowledge and working system.

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7. Banks are concentrating only on selling their products; products; they are not paying any attention in making the people aware of what is mutual fund all about. 8. There is half of the population which is still untapped, untapped, so in order to make them investors then firstly the people should be made aware of mutual fund

APPENDICES

1.1. Questionnaire Official Use

AMITY UNIVERSITY,

S.no.

RAJASTHAN We are the students of Amity University, Rajasthan, (M.B.A.). We are conducting research on “A

study of preferences of the investors for investment in mutual funds.” Kindly help us to obtain the desired information by giving couple of  minutes from your valuable time.

Name____________________ 

Occupation:

Gender: M

Student

Profession

Age: ______

Business

90 House wife

Address: _____________________

Others ______________  

F

1. What is your monthly family income approximately? Pl tick (√).

Up to Rs. 10,001 to Rs. 15,001 to Rs. 20,001 to Rs Rs.. 30,0 30,001 01 Rs.10,000 15000 20,000 30,000 and above

2. What kind of investments you have made so far? Pl tick (√). All applicable.

a. Saving account

b. Fixed deposits

e. Post Post Office Office-NS -NSC, C, f. etc Shares/Debentures

c. Insurance g. Silver

d. Mutual Fund

Gold/ h. Real Estate

3. While investing your money, which factor will you prefer?

(a) Liquidity

(b) Low Risk

(c) Return

High

(d)Tax benefit

4. How did you know about Mutual Fund?

a. Advertisement

b. Peer Group c. Banks

d. Fi F inancial Advisors

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5. Have you ever invested in Mutual Fund? Pl tick (√).

Yes

6. If not invested in Mutual Fund then why?

(a) Not aware of MF (b) Higher risk (c) Not any specific reason

7. If yes , in which Mutual Fund you have invested? Pl. tick (√). All applicable.

a. ICICIMF

b. UTI

c. HDFC

d. Reliance

e. Kotak

f. Other. specify

8. When you plan to invest your money in asset management co. which AMC

will you prefer a. ICICIAMC b. UTI c. Reliance d. HDFC e. Kotak f. SBI MF

9. When you invest in Mutual Funds which mode of investment will you prefer?

Pl. tick (√). a. One Time Investment

b. Systematic Investment Plan (SIP) 92

10. When you want to invest which type of funds would you choose?

a. Having only debt portfolio

b. Having debt & equity portfolio.

c. Only equity portfolio.

Thank you for your valuable time and information.

Your ideas and

suggestions are welcome

 _____________  ___________________ _____________ _____________ ____________ _____________ _____________ ____________ _____________ ________  _   _______  _______

_ 

Date _______________

Place _______________  

(Signature)

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1.2

Tables 1. Age distri distributi bution on of the the Investo Investors rs of Jaipur Jaipur Age Group

<= 30

31-35

3 6 -4 0

4 1- 4 5

4 6- 5 0

>5 0

No. of 

12

18

30

24

20

16

Investors

2.Monthly Family Income of the Investors of Jaipur. Income Group

No. of   Investors

<=10,000

5

10,001-15,000

12

15,001-20,000

28

20,001-30,000

43

>30,000

32

3.Investors invested in different kind of  investments.

Kind of Investments

No. of   Respondents 94

Saving A/C

195

Fixed deposits

148

Insurance

152

Mutual Fund

120

Post office (NSC)

75

Shares/Debent ures

50

Gold/Silver

30 65

Real Estate

4.Preference of factors while investing Factors

(a)

(b) Low

(c) High

Liquidity

Risk

Return

40

60

64

No. of 

(d)Tax Benefit

36

Respondents

5.Source of information for customers about Mutual Fund Source of information

No. of Respondents

Advertisement

18

Peer Group

25

Bank

30 95

Financial Advisors

62

6.Investors invested in Mutual Fund Response

No. of   Respondents

 YES

120

NO

80

 Total

200

7.Reason 7.Reason for not invested in Mutual Fund Reason

No. of   Respondents

Not Aware

65

Higher Risk

5

Not any Specific

10

Reason

96

8.Investors invested in different Assets Management Co. (AMC)

Name of AMC

No. of Investors

SBIMF

55

UTI

75

HDFC

30

Reliance

75

ICICI

56

Kotak

45

Others

70

9.Preference of Investors for future investment in Mutual Fund Name of AMC

No. of Investors 97

SBIMF

76

UTI

45

HDFC

35

Reliance

82

ICICI Prudential

80

Kotak

60

Others

75

10.Mode of Investment Preferred by the Investors

Mode of 

One time

Systematic Investment Plan

Investment

Investment

(SIP)

No. of Respondents

78

42

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BIBLIOGRAPHY  NEWS PAPER   OUTLOOK  MONEY 

TELEVISION CHANNELS (CNBC AAWAJ)

 MUTUAL FUND HANDBOOK   FACT SHEETS AND STATEMENTS  www.icici.com  www.icicipruamc.com  www.bseindia.com  www.amfindia.com  www.moneycontrol.com  www.outlookmoney.com  www.mutualfundsindia.com  www.rediff.com

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