A Project Study Report On
“Systematic Investment Plan (The Better Way to Invest In Mutual Funds)” AT
Aditya Birla Money
Submitted in Partial Fulfilment for The Award of Degree of Master of Business Administration
(2015-17)
Submitted by:
Submitted to:
Sneha Yadav
Prof. Gaurav Malpani
PGDM-BM Semester I
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DECLARATION
I SNEHA YADAV student of PGDM-BM of the Institute of Rural Management, Jaipur hereby declare that the following project report titled "Systematic Investment Planning ” is an authentic work done by me. This is to declare that all the work indulged in the completion of this work such as research, data collection, analysis is a profound and honest work of mine.
Sneha Yadav
Prof.Gaurav Malpani
Student
Project Guide
Date: Place: Jaipur
2
ACKNOWLEDGEMENT
This project bears imprint of all those who have directly or indirectly helped and extended their kind support in completing this project. I would like to thank the management of “ADITYA BIRLA MONEY MART LTD. “For giving “For giving me a golden opportunity to work in this esteemed organization. I would like to convey my sincere thanks and gratitude to Mr. Vikas Kumar (Area Manager, Wealth Management) and Miss. Divya Tekchandani (Financial Advisor) for guiding me and helping me throughout the duration of my project and without whose help this project would never have been completed. He has been a constant source of motivation and encouragement for us. He motivated and encouraged us from all odds. I would also like to thank Mr. Gaurav Malpani (Faculty, FMS-IIRM) for providing me guidance and support throughout my training.
SNEHA YADAV
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EXECUTIVE SUMMARY Investing money where the risk is less has always been risky to decide. The first factor, which an investor would like to see before investing, is risk factor. Diversification of risk gave birth to the phenomenon called Mutual Fund. Fund. The Mutual Fund Industry is in the growing stage in India, which is evident from the flood of mutual funds offered by the Banks, Financial Institutes & Private Financial Companies. As a part of my study curriculum it is necessary to conduct a grand project. It provides me an opportunity to understand the particular topic in depth and which leads to that topic. A host of factors has contributed cont ributed to this explosive growth of the industry. The industry has made significant strides in terms of its variety, sophistication and regulation. Due to the economic boom, entry of foreign asset management companies, favorable stock markets and aggressive marketing by mutual funds, the asset management industry in India is witnessing dramatic growth in terms of new fund openings, the number of mutual fund families, and in the total assets under management in recent years. Despite various attractions offered, the total net assets of mutual funds are very less as compared to other developed countries. In the product offering too, the Indian fund industry is not close to the developed countries. India’s 32 member fund industry has to scale new heights to narrow the gap with the other developed countries. To achieve this, the Indian mutual fund industry needs to widen its range of products with affordable and competitive schemes that combine various elements of liquidity, return and security in making mutual fund products the best possible alternative for the small investors in the Indian market. Besides, mutual funds can survive only if they perform well and satisfy the expectations of the investors. In this context a sincere attempt has been made by the researcher to examine the steady growth of the industry, the innovations and the development that has taken place in India. This research on Mutual Fund industry will specifically focus on the SBI Mutual Funds.
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TABLE OF CONTENTS
SERIAL
INDEX:
PAGE
NO:
NO: 1
COMPANY PROFILE
6-7
2
INTRODUCTION TO MUTUAL FUNDS
8-9
3
TYPES OF MUTUAL DUNDS
10-13
4
HOW TO INVEST IN MUTUAL FUNDS
14-15
5
SYSTEMATIC INVESTMENT PLANNING
16-19
6
RESEARCH AND METHODOLOGY
20-22
7
ANALYSIS AND INETERPRETATION
23-29
8
DISCUSSION ON TRAINING WORK PROFILE
30-33
9
FINDINGS AND SUGGESTIONS
34-35
10
ANNEXURE
42
5
COMPANY PROFILE ADITYA BIRLA MONEY MART LIMITED
Aditya Birla money mart ltd is a wealth management and distribution player , offering third party product like company deposite , mutual funds, insurance, structured product, alternate investment, property services and has a premier weal th management service arm to cater to HNI customers.
Adtiya birla money mart limited is a premier wealth management company with an emphasis on investment advisory and financial planning .
Ranked among the top players in this segment, ABMML is driven by knowledge, expertise, and experience. Their product range covers mutual funds, life insurance and other instruments like RBI relief bonds, bonds of public financial institution, company fixed deposite and initial public offerings of equity and debt securities.
The company also provides life insurance products of Birla SunLife Insurance, through a wholly-owned subsidiary BSLD Insurance Adisory Services Limited (BSDLIAS)
The company caters to the corporate and institutional segment, the wealth management segment, the B2Csegment and channel business. With a direct presence through its 37 branches and additional reach through its network of 7000 business associates across more than 100 centres , ABMML has a trusted investor i nvestor base of over 260000.
ADITYA BIRLA MONEY MART INCLUDES :
STOCK BROKING AND DISTRIBUTION
REAL ESTATE
WEALTH MANAGEMENT
STOCK BROKING AND DISTRIBUTION
A disciplined and focused approach leads to healthier and speedier fulfilment of financial goals. But to leapfrog in the markets, you need to weight several factors like your your risk profile, product you have invested in,time frame and even uncontrollable f actors such as market movements, inflation and many more….
Therefore to manage all these we need a is a financial financia l partner with a trading pedigree, rich experience and smart expertise. At Aditya Birla Money can devise an ideal investment
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strategy aligned to your investment goals and risk appetite. This can help by rally the market sensex, NSE, BSE etc wih a diverse range of investment solutios and services available at any of our branches and online. Glance through our range of Broking and Investment product below: Demat Plus Broking Account Aditya Birla Money Trade Metri Express Trade Portfolio Tracker Online Trading Trading ‘Classic’ Account Mobile Trading I-Decide Brokerage Plan
REAL ESTATE
In the real estate arena, chances of finding a piece of property that shows potential of quick capital appreciation are tough and rather slim. Yet, property investments act as booster doses to pep the health of your portfolio. And even if you have zeroed in on the perfect propert y, it’s back breaking to land a good bargain for it. Here’s where our real estate advisory can assist you to negotiate a better deal and buy property of your choice. That’s That’s not all.
Aditya Birla Real Estate have huge repository of properties properties updated continuously continuously to provide you with realty deals that suit your need-profile. Besides, there is a host of exclusive services right from home loan acquisition to final paperwork that you can benefit from. With dedicated Relationship Managers at your service expect nothing but the best end-to-end property solutions for all property transactions. transactions .
WEALTH MANAGEMENT
Wealth Management is defined as the complete blend of various asset classes, tax consultancy and risk management strategies molded into a single cast normally normally targeted at High Net worth Individuals.
It normally addresses addresses certain critical issues such as asset allocation , retirement planning , estate and trust planning, business succession planning as well as equit y planning, HNWI of today is technology-accessed global in outlook and is willing to learn from the experience of the matured of the club outside India..
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INTRODUCTION TO MUTUAL FUND
A mutual fund is just the connecting bridge or a financial intermediary intermediar y that allows a group of investors to pool their money together with a predetermined investment objective. The mutual fund will have a fund manager who is responsible for investing the gathered money mone y into specific securities (stocks or bonds). When you invest in a mutual fund, you are buying units or portions of the mutual fund and thus on investing becomes a shareholder or unit holder of the fund.
Mutual funds are considered as one of the best available investments as compare to others they are very cost efficient and also easy to invest in, thus by pooling money together in a mutual fund, investors can purchase stocks or bonds with much lower trading costs than if they tried to do it on their own. But the biggest advantage to mutual funds is diversification, by minimizing risk & maximizing returns.
Organization Structure of a Mutual Fund There are many entities involved and the diagram below illustrates the Organizational set up of a mutual fund.
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Fund Sponsor:
A ‟sponsor” is any person who, acting alone or in combination with another body corporate, establishes a MF. The sponsor of a fund is similar to the promoter of a company. In accordance with SEBI Regulations, the sponsor forms a trust and appoints a Board of Trustees, and also generally appoints an AMC as fund manager. In addition, the sponsor also appoints a custodian to hold the fund assets. The sponsor must contribute at least 40% of the net worth of the AMC and possess a sound financial track record over five years prior to registration. Trustees:
The MF or trust can either eit her be managed by the Board of Trustees, which is a body of individuals, or by a Trust Company, which is a corporate body. Most of the funds in India are managed by Board of Trustees. The trustee being the primary guardian of the unit holders‟ funds and assets has to be a person of high repute and integrity. The trustees, however, do not directly manage the portfolio securities. The portfolio is managed by the AMC as per the defined objectives, accordance with Trust Deed and SEBI (Mutual Funds) Regulations. Asset Management Company (AMC):
The AMC, which is appointed by the sponsor or t he trustees and approved by SEBI, acts like the investment manager of the trust. The AMC functions under the supervision of its own Board of Directors, and also under the direction of the trustees and SEBI. AMC, in the name of the trust, floats and manages the different investment ‟schemes‟ as per the SEBI Regulations and as per the Investment Management Agreement signed with the Trustees. Others:
Apart from these, the Mutual Fund has some other fund constituents, such as custodians and depositories, banks, transfer agents and distributors. The custodian is appointed for safe keeping of securities and participating in the clearing system through approved depository. The bankers handle the financial dealings of the fund. Transfer agents are responsible for issue and redemption of units of Mutual Fund.
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TYPES OF MUTUAL FUNDS: A mutual fund, say, Birla Mutual Fund, can have several 'funds' [called 'schemes' in India) under its management. These different funds can be categorized by structure, investment objective objecti ve and others. It would be well illustrated by the following chart:
BY STRUCTURE 1. Open - Ended Schemes:
An open-end fund is one that is available for subscription al l through the year. These do not have a fixed maturity. Investors "an conveniently buy and sell units at Net Asset Value (“NAV”) related prices. The key feature of open-end schemes is liquidity.
2. Close - Ended Schemes:
A closed-end fund has a stipulated maturity period which generally ranging from 3 to 15 years. years. The fund is open for subscription
only during a specified period. Investors can invest in
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the scheme at the time of the initial initial public issue
and thereafter they can buy buy or sell
the units of the schemes on the stock exchanges: where they are listed. In order to provide an exit route t0 the investors, investors, some close-ended close-ended funds give an option of selling back the units to the Mutual Fund through periodic repurchase at NAV related prices. SEBI Regulations stipulate that at least One of the two exit routes is provided provided t0 the investor.
3. Interval Schemes:
Interval Schemes are that scheme, which combines the features of open-ended and close ended schemes. The units may be traded on the stock exchange or may be open for sale or redemption during pre-determined intervals at NA V related prices.
B) BY NATURE: 1. Equity Fund:
These funds invest the maximum part of their corpus into equities holdings. The structure of the fund may vary different for different schemes and the fund manager’s outlook on different stocks. The Equity Funds are sub-classified depending upon their investment objective, as follows: • Diversified Equity Funds
• Mid-Cap Mid-Cap Funds • Sector Specific Funds • Tax Savings Funds (ELSS) Equity investments are meant for a longer time horizon, thus Equity funds rank high on the ris kreturn matrix. 2. Debt Funds:
The objective of these Funds is to invest in debt papers, Government authorities, private companies, banks banks and financial institutions are some of the major issuers of debt papers. By investing in debt instruments, these funds ensure low risk and provide stable income to the investors. Debt funds funds are further classified as: •Gilt Funds: Invest their corpus in securities issued by Government, popularly known as Government of India debt papers. These Funds carry zero Default risk but are associated with Interest Rate risk. These schemes are safer as they invest in papers papers backed by Government. Government. •Income Funds: Invest a major portion into various debt instruments such as bonds,
corporate debentures
and Government securities. securit ies.
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•MIPs: Invests maximum of their total corpus in debt instruments while
they take
minimum exposure in equities. It gets benefit of both equity and debt market. These scheme ranks slightly high on the risk-return matrix when compared with other debt schemes. •Short Term Plans (STPs) : Meant for investment horizon for three to six months. These funds primarily invest in short s hort term papers like l ike Certificate of Deposits (CDs) and Commercial Papers (CPs). Some portion of the corpus is also invested in corporate debentures. •Liquid Funds: Also known as Money Market Schemes, These funds provides easy liquidity and preservation of capital, These schemes invest in short-term instruments like Treasury Bills, inter-bank call money market, CPs and CDs. These funds are meant for short-term cash management of corporate houses
and
are
meant for an investment horizon of 1 day to 3
months. These schemes rank low on risk-return matrix
and are considered to be the safest
amongst all categories of mutual funds. 3. Balanced Funds:
As the name suggest they are a mix of both equity and debt funds. They invest in both equities and fixed income securities, which are in line with pre-defined investment
objective of the
scheme. These schemes aim to provide investors with the best of both the worlds. Equity part provides growth and the debt part provides provides stability in returns. Further the mutual funds can be broadly classified on the basis of investment parameter viz; each category of funds is backed by an investment philosophy, which is pre-defined in the objectives of the fund. The investor can align his own invest ment needs with the funds objective and invest accordingly. C) BY INVESTMENT OBJECTIVE: Growth Schemes:
Growth Schemes are also known as equity schemes. The aim of these schemes is to provide capital appreciation over medium to long term. These schemes normally invest a major part of their fund in equities and are willing to bear short-term decline in value for possible future appreciation. Income Schemes:
Income Schemes are also known as debt schemes. The aim of these schemes is to provide regular and steady income to investors. These schemes generally invest in fixed income securities such as bonds and corporate corporate debentures. Capital appreciation in such schemes may be limited. Balanced Schemes:
Balanced Schemes aim to provide both growth and income by periodically distributing a part of
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the income and capital gains they can. These schemes invest in both shares and fixed income securities, in the proportion indicated in their offer documents (normally 50:50). Money Market Schemes:
Money Market Schemes aim to provide easy liquidity, preservation of capital and moderate income. These schemes generally invest in safer, short-term instruments, such as treasury bills, certificates of deposit, commercial paper and inter-bank call money. OTHER SCHEMES Tax Saving Schemes:
Tax-saving schemes offer tax rebates to the investors under tax laws prescribed from time to time. Under Sec.88 of the Income Tax Act, contributions made to any Equity Linked Savings Scheme (ELSS) are eligible for rebate. Index Schemes:
Index schemes attempt to replicate the performance of a particular index such as the BSE Sensex or the NSE 50. The portfolio of these schemes will consist of only those stocks that constitute the index. The The percentage of each stock to the total holding will be identical to the stocks index weightage. And hence, the returns from such schemes would be more or less equivalent to those of the Index. Sector Specific Schemes:
These are the funds/schemes which invest in the the securities of only only those sectors or industries as specified in the offer documents, e.g., Pharmaceuticals, Software, Fast Moving Consumer Goods (FMCG), Petroleum stocks, etc. The returns in these funds funds are dependent on the performance of the respective sectors/industries.
While these funds may give higher returns,
they are more risky compared to diversified funds. Investors need to keep a watch on the performance of those sectors/industries and must exit at an appropriate time.
BANKS V/S MUTUAL FUNDS:
Mutual Funds are now also competing with commercial banks in the race for retail investor’s savings and corporate float money. The power shift towards mutual funds has become obvious. The coming few years will show that the traditional saving avenues are losing out in the current scenario. Many investors are realizing that investments in savings accounts are as good as locking up their deposits in a closet. The fund mobilization trend by mutual funds indicates that money is going to mutual fund in a big way.
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CATEGORY
BANKS
MUTUAL FUNDS
Returns
Low
High
Administrative exp.
High
Low
Risk
Low
Moderate
Investment options
Less
More
Network
High penetration
Low but improving
Liquidity
At a cost
Better
Quality of assets
Not transparent
Transparent
Interest calculation
Guarantee
Minimum balance between
Everyday
10th & 30th of every month Maximum
Rs.1
deposits
lakh
on
None
How to invest in mutual funds? Steps One - Identify your investment needs.
Your financial goals will vary, based on your age, lifestyle, financial independence, family commitments, level of income and expenses among many other factors. Therefore, the first step is to assess your needs. Begin by asking yourself these questions: 1. What are my investment objectives and needs? Probable Answers: I need regular income or need to buy a home or finance a wedding or educate my children or a combination of all these needs. 2. How much risk am I willing to take? Probable Answers: I can only take a minimum amount of risk or I am willing to accept the t he fact that my investment value may fluctuate or that there may be a short term loss in order to achieve a long term potential gain.
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3. What are my cash flow requirements ? Probable Answers: I need a regular cash flow or I need a lump sum amount to meet a specific need after a ce rtain period or I don‟t require a current cash flow but I want to build my assets for the future. By going through such an exercise, you will know what you want out of your investment and can set the foundation for a sound Mutual Fund Investment strategy. Step Two - Choose the right Mutual Fund .
Once you have a clear strategy in mind, you now have to choose which Mutual Fund and scheme you want to invest in. The offer document of the scheme tells you its objectives and provides supplementary details like the track record re cord of other schemes managed by the same Fund Manager. Some factors to evaluate before choosing a particular par ticular Mutual Fund are: The track record of performance over the last few years in relation to the appropriate yardstick
and similar funds in the same category. How well the Mutual Fund is organized to provide efficient, prompt and personalized service.
Degree of transparency as reflected refle cted in frequency and quality of their communications.
Step Three - Select the ideal mix of Schemes.
Investing in just one Mutual Fund scheme may not meet all your investment needs. You may consider investing in a combination of schemes to achieve your specific goals. The following charts could prove useful in selecting a combination of schemes to satisfy your needs. Step Four - Invest regularly regularly For most of us, the approach that works best is to invest a fixed amount at specific intervals, say every month. By investing a fixed sum each month, you get fewer units when the price is high and more units when the price is low, thus 34 bringing down your average cost per unit. This is called rupee cost averaging and is a disciplined investment strategy followed by investors all over the world. With many open-ended schemes offering systematic investment plans, this regular investing habit is made easy for you. Step Five - Keep your taxes in mind As per the current tax laws, Dividend/Income Distribution made by mutual funds is exempt from Income Tax in the hands of investor. However, in case of debt schemes Dividend/Income
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Distribution is subject to Dividend Distribution Tax. Further, there are other benefits available for investment in Mutual Funds under the provisions of the prevailing tax laws. You may therefore consult your tax advisor or Chartered Accountant for specific advice to achieve maximum tax efficiency by investing in mutual funds. Step Six - Start early It is desirable to start investing early and stick to a regular investment plan. If you start now, you will make more than if you wait and invest later. The power of compounding lets you earn income on income and your money multiplies at a compounded rate of return. Step Seven - The final step All you need to do now is to get in touch with a Mutual Fund or your advisor and start investing. Reap the rewards in the years to come. Mutual Funds are suitable for every kind of investor whether starting a career or retiring, conservative or risk taking, growth oriented or income seeking.
Types of Investment in Mutual Fund
Lump Sum
Systematic Investment Plan
Lump Sum Payment
A lump sum is a single payment of money money,, as opposed to a series of payments made over time (such as an annuity) This means investing the entire sum of money at one go. For instance, if you have Rs 1 lakh which you are willing to fully full y invest in stocks or MFs, it is a lump-sum investment.
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Systematic Investment Plan
What is Systematic Investment Plan?
Systematic Investment Plan (SIP) is a smart financial planning tool that helps you to create wealth, by investing small sums of money every month, over a period of time. Systematic Investment Plan (SIP) is a planned approach to investments and an investment technique that allows you to provide for the future by investing small amounts of money in Mutual Fund schemes of your choice. A SIP is a method of investing in mutual funds, by investing a fixed sum at a regular frequency, to buy units of a mutual fund schemes. It is quite similar to a recurring deposit of a bank or post office. For the convenience, an investor could start a SIP with as low as Rs 500; however this amount may differ from one fund house to other. The SIP provides them a way to invest in the fund of their choice in installments. Why is SIP a Smart choice?
-
Helps in inculcating financial discipline Helps you put investments on your priority list Average out your cost of investment and hence reduce your risk Let's say you invested Rs. 1000 every month and let's assume the scheme you invested in is available at a unit value of Rs. 20 per unit. Then in month 1, you will be able to obtain 50 units. In month 2, if the unit value goes down to Rs. 10 then you will be able to obtain 100 units
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Hence for Rs. 2000 invested over 2 months, the total value of your investment at the end en d of 2 months is Rs. 1500. However, if you had invested a straight sum of Rs. 2000 in month 1 when the unit value was Rs. 20 per unit – unit – your your net value at the end of o f month 2 will only be Rs. 1000. Hence a SIP helps you average out your cost and thereby reduce risk resulting in generating better returns
-
Helps in compounding your wealth
Getting rich is simpler than you think, here's a simple formula that can help: Start Ear ly + I nve nves st Regular Regular l y = Cr eate We Wealth alth
Invest Regularly
Systematic investing has a compounding effect on your investments. In the long term, an investment as low as Rs 1000/- per month can swell up into a huge corpus. Start Early
Similarly, starting your investments early also has its own advantages. Starting early means that the power of compounding starts acting on your money earlier, thereby potentially generating better returns. Consider the following graph:
An individual who starts planning for his retirement at 25 yrs of age by investing Rs. 1000 / per month may collect up to Rs. 40 Lakhs on retirement whereas his investment over the period may just be Rs. 4.2 Lakhs.On Lakhs.On the other hand, if the same individual delays his retirement planning by 5 yrs, his wealth upon retirement may reduce significantly si gnificantly (approx Rs. 15 Lakhs.)
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Benefits of SIP
1. SIP can be started with a minimum investment i nvestment of Rs. 500/- per month or Rs. 1000/- per month. 2. It is good and effective way of creating creati ng wealth for long term. 3. ECS facility is available in case of Investment through SIP. 4. A small withdrawal from the account doesn’t affect the bank balance of an individual as compared to a hefty withdrawal. 5. It can be for a year, two years, three years etc. if a person at any point point of time couldn’t be able to continue its SIP, he may give instructions at least 25 days before to the fund house. His SIP be discontinued. 6. All type of funds except Liquid funds, cash funds and other funds who invest in ver y short fixed return investments offers the facility of SIP. 7. Capital gains, if applicable, are taxed on a first-in first-out basis. 8. As the investment made through SIP are not at one time. Some units bought at high price and some at low price, so chances of making gain through SIP is higher than the one time investment. In short, SIP is a simple and effective way to create wealth but to create such wealth, one should think about the investment in SIP for a period of at least for time frame of three years because it pays to invest in a longer run..
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RESEARCH METHODOLOGY TITLE OF THE STUDY: - Systematic Investment Plan
(The Better Way to Invest In Mutual Funds)’ F unds)’ DURATION OF THE PROJECT
-
The duration of the project is 30 days
OBJECTIVE OF THE STUDY
The purpose of choosing the project is to know:
Investor’s option for entry into mutual fund Lump sum SIP
Comparative analysis between Lump Sum and SIP
Investors Delight when investment is through SIP
Procedure for investment in SIP
RESEARCH TYPE
Conclusive and explorative approach has been adopted in the study. As here the topic of research problem has been explored so that hidden facts can come into the light and then the maximum allocation criteria in SIP are Rs. 1000-3000 i.e. the final conclusion is given 45% SAMPLE SIZE
A sample size of 50 investors was chosen to meet the earlier mentioned objectives. The selection of sample was based on the following criteria: -
People belonging to different state of society.
Servicemen working in government organization & private organization.
Professionals who includes doctors, lawyers, teachers etc
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RESEARCH DESIGN
This research is Explorative and conclusive in nature because it aims to collect the data about the behavior of investors in which way they invest in Mutual Funds. The research approach used is survey based and the analysis is lar gely based on the primary data. RESEARCH INSTRUMENT
Structured questionnaire: open- ended and close- ended. RESEARCH APPROACH
Any methodology includes the overall research design, the sampling procedure and data collection method. The methodology adopted by me for purpose of finding the investment behavior of investors was DIRECT SURVEY SURVEY METHOD STUDY SCOPE OF THE
Jaipur only This project will help existing/prospective investor to understand what the various mode of investment in Mutual Fund are and why Systematic Investment Plan gives better returns than Lump sum. So that investors can do better use of their hard earned money to earn more profit. TYPES OF DATA
1. Primary Data 2. Secondary Data Primary D ata ata is that data which is collected by the researcher as per his/her needs
is that data which is collected through references as websites, journals, books, is Secondary D ata magazines , etc.
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LIMITATIONS TO THE STUDY
Though research based decision-making is now considered but still there is a gap between the understanding of researcher and users. Research is there to help in decision-making, not a substitute of decision-making. Some of the following limitations have restricts the scope of survey to some extent :
Some respondents gave vague information and were not serious while responding.
Some respondents were hesitant to reveal information about their finances because of income tax queries.
It was difficult to find whether respondents actually participate in their financial planning.
Research can provide number of facts but it does not provide actionable r esults.
It cannot provide answer to any problem but can only provide a set of guidelines.
Management rely more on the intuitions and judgments rather than research.
Area of research was restricted to some location of the city and state.
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ANALYSIS AND INTERPRETATION Q 1: In which Financial Instrument Instrument do you invest into? Ans:
Financial Instruments
Investment in %
Mutual
76
Bond
15
Online Trading
07
Derivatives
02
INTERPRETATION: From above pie chart, I have analyzed that 76% of investors invest in the
analysis is done on the basis of the response of respondents, which is collected through the questions present in questionnaire. Q 2: By structure in which type of schemes have you invested?
Ans :
Types of schemes on the basis of structure
Investment in %
Open ended funds
66
Close ended funds
22
Intervals funds
12
23
INTERPRETATION: The above pie chart depicts that 66% investors invest in Open-ended funds,
22% in Close-ended funds and 12% in Interval funds. Q. 3: By investment i nvestment objective objective In which type of schemes have you invested?
Ans:
Types of Investment on the basis of objective
Investment in %
Growth Schemes
55
Income Schemes
13
Balanced Schemes
32
INTERPRETATION: From the above pie chart, I conclude that there are 55 % investors who
invest in Growth Schemes, 13% investor invest in Income Schemes, and 32% investors invest in Balanced Funds
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Q.4.
In which type of fund you want to invest?
Ans : TYPES OF FUNDS
INVESTMENT
IN
% Index Fund
41
Tax Saver Fund
15
Sectoral fund
44
INTERPRETATION: The above chart depicts that the maximum numbers of investor.i.e.41%
investors invest in Sectorial Funds , 44% in Index Funds and 15% in Tax T ax Saver Funds. Q.5 Do you repeat your investment after initial investment?
Ans : Repetition of investment
Investors in %
Yes
68
No
32
25
INTERPRETATION: The above pie chart depicts that 68% of investors invest again after the
initial investment. Q.6 What percentage of your earnings do you invest in Mutual Funds?
Ans :
% of earnings
Investors in %
Upto 10%
43
Upto 25%
32
Upto 50%
15
Above 50%
10
INTERPRETATION: The above chart depicts that 43% investor invest that up to 10% of their
earning in Mutual Fund.
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Q.7. How many investors invested in SIP , Lump sum or both?
Ans : Type of investment
Investment in %
SIP
55
Lump sum
10
Both
35
INTERPRETATION: From above chart I have analyzed that 55% investors have invested SIP,
10% in lump sum and 35% in both the category.
27
Q.8 What is an allocation criteria criteria of an investor in SIP?
Ans
Allocation criteria (in Rs)
:
Investment in %
Less than 1000
9
1000-3000
45
3000-5000
36
More than 5000
10
Allocation criteria (in Rs)
50 40 30 20
investment in % 10 0 less than 1000
1000-3000
30 00 - 5 00 0
more than 5000
INTERPRETATION: From above chart I have analyzed that the allocation criteria of investment
is 45% in the range Rs1000 to Rs 3000. Q.9 What is the time duration of investment? investment?
Ans : Time duration
Investment in %
Less than or equal to 5 years
25
Less than or equal to 4 years
8
Less than or equal to 3 years
34
Less than or equal to 2 years
25
Less than or equal to 1 year
8
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depict s that most of the investors invest ors (i.e. 33.33%) invest INTERPRETATION: The above bar chart depicts in less than 3 years. Q.10 Which has given more profit to investor s?
Ans :
Investment in
Profit in %
Lump sum
84
SIP
16
INTERPRETATION: The above Pie chart depicts that 84% of investors have got more profit in
Systematic Investment Plan.
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DISCUSSION ON TRAINING WORK PROFILE
It was very nice experience in my internship that I have worked in various conditions and I have gained my experience through different tasks which were assigned to me. In my training period of 45 days I have experienced a lot and had such experiences which I have never seen before the internship I would like to explain about my responsibilities during internship period.
It was really a total experience giving internship in my career and I came to know a lot of things about market, about the policies of company, about the market competition, about the segments of customers and the variety of customers, about customer satisfaction, the quality service, team spirit, achieving the targets and lot of other things.
Went for various morning activities and conducted surveys.
Went for meetings with mentor and understood about market conditions .
Pitching to the customers about Aditya Birla Money Services
Conducted calls and fixed meetings.
Entering Meetings in CTP Software.
Made Comparisons of PMS and Mutual Funds in Excel
30
Mutual Fund Comparison
Absolute (%)
CAGR (%)
Value of Rs. 1 crore invested on 1st Jan
3 Scheme Name
6
3
Months Months 1 Year Year 2 Year
5
Years 4years Years
2011 ( in crores)
Birla Sun Life MNC Fund (G)
1.07
1.37
17.84
42.35
30.55 33.32 22.35
2.74
Franklin India Smaller Cos Fund(G)
4.91
5.52
9.98
44.22
32.95 37.65 21.61
2.66
SBI Magnum MidCap Fund-Reg(G)
5.12
3.85
14.56
40.40
30.53 35.05 19.81
2.47
UTI Mid Cap Fund(G)
1.01
1.76
6.59
42.57
30.56 33.41 19.23
2.41
HDFC Mid-Cap Opportunities Fund(G)
2.85
2.54
6.10
36.91
26.93 30.24 18.64
2.35
ICICI Pru Value Discovery Fund-Reg(G)
2.04
-0.55
5.82
35.32
25.45 30.65 17.31
2.22
Franklin India High Growth Cos Fund(G)
1.18
-2.66
1.94
35.04
25.78 29.96 16.44
2.14
Reliance Mid & Small Cap Fund(G)
6.86
7.47
8.67
40.16
26.52 30.33 15.55
2.06
Reliance Equity Opportunities Fund(G)
3.26
0.91
1.19
27.09
18.77 25.57 14.27
1.95
IDFC Sterling Equity Fund (G)
4.65
-1.33
0.38
25.66
18.02 24.48 13.27
1.86
Kotak Select Focus Fund(G)
0.34
-0.72
3.68
27.90
19.81 23.37 12.48
1.80
Birla SL Top 100 Fund(G)
0.61
-2.17
0.13
22.19
17.31 22.10 11.75
1.74
Birla SL Advantage Fund(G)
1.34
-0.75
1.77
25.56
19.46 23.86 11.40
1.72
UTI Equity Fund (G)
-0.71
-2.33
1.17
21.96
16.73 20.55 11.31
1.71
Reliance Top 200 Fund(G)
2.82
-2.52
1.40
25.34 17.52 23.21 11.14
1.70
Principal Growth Fund(G)
4.88
-0.17
3.18
24.12
18.33 25.00 11.03
1.69
Birla SL Frontline Equity Fund(G)
0.69
-3.33
1.34
21.13
16.73 21.55 10.97
1.68
ICICI Pru Focused BlueChip Eq Fund-Reg(G)
1.77
-2.25
0.10
18.80
15.63 18.53 10.54
1.65
ICICI Pru Dynamic Plan-Reg(G)
4.87
-0.85
-1.10
16.45
16.16 19.83 10.45
1.64
ICICI Pru Top 100 Fund-Reg(G)
6.63
0.12
-0.32
17.39
15.10 19.53 10.22
1.63
31
PMS COMPARISION Curren Absolute Returns(%)
t
Annualised Returns(%)
Value of Rs 1 crore invest ed on
3 1 PMS
6
1st
month month 1
month s
s
Birla Core Equity Portfolio
1.01
3.6
10.4
2
1.18
-2.5
4
0.43
2.42
12.9
Motilal Oswal NTDOP
01st April
4
0.72
4
4
6
7
0.04
-4.43
3
2008
Jan 2011
1
22.48
3.33
6.36
7.58
1.36
14.9
1.97
16.9 12.3 16.9 7
4
7
1
27.2 20.8 33.6
6
5
16.0 43.7 34.6 39.8 25.4 2.67
Inception
18.3 62.3 45.9 44.1 27.2
Benchmark- CNX Midcap
Since
date
19.0 45.3 Outperformance
5
year year year year year Inception
Benchmark- CNX500 0.58
3
8
3
7
05th Dec
8
17.77
2007
3.11
8.62
5.85
1.51
11.92
1.60
28.8 16.3 21.6 1.12
3.17
2.98
6.46
3
5
6
14.9 18.2 18.2 16.8 Outperformance
1.55
-3.13
-7.41 9.57
5
8
1
6
25.7 17.5 18.9 11.8 Motilal Oswal Value
1.89
0.81
-4.74 0.43 -
Benchmark- Nifty
0.14
-0.03
-5.04 4.06
9
5
9
26.33
5.31
17.5
1.30
7.15 4.44 6.58
8.83
0.46
12.2 7
2
25th March 2003
1.75
14.4 10.4
8
13.5 Outperformance
1.75
0.84
0.3
4.49
2
32
LEARNING EXPERIENCE:
During this internship, I have many good and Bad Experiences & also got to learn many things like, Having Patience Convincing Skill Corporate working Nature Making Relation with persons Internships give you exposure to new and interesting professional situations…with a safety
net. The good internships are with companies who “get” that you’re an intern. They give you real opportunities for practical application of skill, but are also there to catch you if there is a problem along the way.
33
Findings
The analysis is done based on the structured questions and we got following points:
55% investor invests in SIP mode. 84% got more profit in SIP The maximum duration of investment in SIP is 3 years i.e. 34%. The maximum allocation criteria in SIP are 1000-3000 i.e. 45%
Aditya Birla is a top ranked company listed with NSDL and CDSL; provide trading through both NSE and BSE. BSE.
There are some more points:
Mutual fund advisors give emphasis on mutual funds than other investment options.
The awareness level of investor is low as advisors are interest ed in dealing in mutual funds.
Mutual funds have given a new direction to the flow of personal saving and enable small and medium investors in remote rural and semi urban areas to reap the benefits of the stock market investments. Indian mutual funds are thus playing a very important role in allocation of scarce resources in the emerging economy.
34
RECOMMENDATION RECOMMENDATION AND SUGGESTIONS
Though the Aditya Birla Financial Services have a very good ascribed plan with exclusive band of opportunities but as nothing is free from the hurdles therefore there are few shortcomings which I felt makes Aditya Birla Financial Services fail to achieve its target :
There is high potential market for mutual fund advisors in Jaipur city but this market needs to be explored as investors are still s till hesitated to invest i nvest their money in mutual fund.
In Jaipur investors have inadequate knowledge about mutual fund, so proper marketing of various schemes is required. Company should arrange more and more seminars on mutual funds.
Awareness of mutual fund services among the investors are very low so Asset Management Company needs proper marketing of their all services by advertising , distribution of pamphlet , arranging seminars etc.
Company should also provide knowledge about the growth rate and expected growth rate of mutual fund industry in India.
Most people are aware of Life Insurance , NSC and PPF for tax saving so company should market various tax saving scheme of mutual fund and their benefits.
35
ANNEXURE QUESTIONNAIRE
(Hello, I am Sneha Yadav. I need your spare time to fill up the questionnaire, as this is the part of my Winter Internship Training under MBA curriculum) NAME: __________________ _____________________________ ____________________ _________ _____________ __________________ _____ AGE 0-18_____
18-36_____
GENDER:
Male
36-54_____
54-72______
72 ABOVE______
Female OCCUPATION:
Businessman
[ ]
Pvt. Employee
[ ]
Govt. Employee
[ ]
Professional
[ ]
Student
[ ]
other (specify):________
CONTACT NO: ________________________ __________________________________ __________ Q1. In which of these Financial Instruments do you invest into? Mutual Funds [ ]
Bonds [ ]
Derivatives [ ]
Online trading [ ]
Q2 .By structure in which type of schemes did you invested? Open Ended Fund
[ ]
Close Ended Fund
[ ]
Interval Schemes
[ ]
Q3.By investment objective in which type of schemes have you invested? Growth Schemes
[ ]
Income Schemes
[ ]
Balanced Schemes
36
[ ]
Q4.In which type of funds you want to invest? Tax Saver Funds
[ ]
Index Funds
[ ]
Sectorial Funds
[ ]
Q5. Did you repeat your investment after your initial investments? Yes [ ]
No [ ]
Q6. What percentage of your your earnings do you you invest in Mutual Funds? Up to 10%
Up to 25%
Up to 50%
Above 50%
Q7. In which which you have invested? SIP [ ]
Lump Sum [ ]
Both [
]
Q8. What is your allocation criterion? <1000b [ ]
1000-3000 [ ] 3000-5000 [ ]
>5000b [ ]
Q9. For what time period you you have invested? <= 1 yr. [ ] <= 2 yr. [ ]
<= 3 yr. [ ] <= 4 yr. [ ] <= 5 yr. [ ]
Q10. Which has given given you more profit? SIP [ ]
Lump Sum [ ]
37
