A COMPARTIVE ANALYSIS ON
MUTUAL FUND
SUBMITTED FOR THE AWARD OF THE DEGREE
OF
MASTER OF BUSINESS ADMINISTRATION
(2010-2012)
FACULTY GUIDE :
Dr. Sadhna Gupta
SUBMITTED BY:-
Rohit kumar
MBA 4thsem
Roll No.01003570023
BABU BANARASI DAS INSTITUTE OF TECHNOLOGY
(GHAZIABAD)
ACKNOWLEDGMENT
“Expression of feelings by words makes them less
significant when it comes to make statement of gratitude”
Summer training needs a lot of dedication concentration and hard work of the students
and also it should be garnished with the topping of good guidance. I am deeply
indebted to all of them for excellent ideas and assistance.
I express my deep sense of gratitude to (Branch Manager) who spared his precious
time and gave me advice whenever I needed. I am also indebted to all other corporate
staffs that helped me in the successful completion of this project.
I would also like to express my sincere gratitude towards Dr. Sadhna Gupta my
faculty. This project would not have been a success without her motivation.
At the end I would like to thank the Almighty God and my Parents, who blessed me
and supported me every time I required.
Rohit kumar
MBA 4th sem
EXECUTIVE SUMMARY
The stock market has always been epicenter for common man. It was belief amongst the middle
class, that it is a playground where only rich played, where big money made bigger money. The
new entrants were often mercilessly whipped and lost their life savings. Often swearing never to
look at the stock market. Therefore middle & lower classes preferred to stay away from equity
because they could not afford to lose such huge amount at a single stretch.
This project is dedicated to common man, who fascinated by stock market but prefers to stay
away. It is just because of lack of knowledge. This will serve the purpose of middle & lower
class people who are looking for new avenues for investment. It may very well serve the purpose
of being a text on the introduction to investing in equity. It also gives step-by-step knowledge
about stock market, trading mechanism & risk factor involved in most logical manner. So, that
one can study itself by using this knowledge & invest his/her money in equity and earn
handsome return.
The first section of the project conveys about investments and different investment opportunities
available for investment. It also gives merits & demerits of available investment opportunities.
After that it explain the concept of equity, how one can invest in equity, different types of market
& also explain in detail how the trade procedure actually goes in stock market. This project also
covers up comparative analysis of all investment option available in Aditya Birla money with
investment pattern.
After that in section 3 it tells about regulatory framework. That is regulatory bodies which
controls stock market i.e. SEBI. It also covers NSE, BSE working mechanism.
OBJECTIVES
 To give idea to retail investor about the concept of fundamental
analysis of shares – the safest approach for investing in stock market.
 Prospects & constraint of investing in shares.
 Through the project create awareness among the retail investor about
equity and attracts them to invest in shares.
 To study the future of flat charges in India.
 To learn different patterns of investment
 To disseminate the improvement suggested by the customer to the
organization.
 To evaluate the advantages and disadvantages of the various schemes
launched by a Brokerage firm on itself.
 To draw a comparison between Aditya Birla flat & Kodak flat
 To understand Customer behavior in investment pattern
 Pyramids of customers and their interest I investment
CONTENTS
 Acknowledgement
 Executive Summary
 Objectives
Research Methodology
SWOT analysis of Stock Market
Company Profile
Key developments for Aditya Birla Money Limited
Comparative Analysis on mutual fund
 Competitors analysis
 investment analysis
Questionnaire
Market structure
Risk profile of investors
In Defense of Defensive Investors
Experience
Conclusion
Recommendation
Bibliography
RESEARCH METHODOLOGY
RESEARCH DESIGN:The Research Design is that conceptual structure with in which research is
conducted. It constitutes the blue print for the collection, measurement and
analyses of data. In this research descriptive research design is used because
my research is concerned with perception aditya Birla money product (IPO’s,
MF, Equity, Derivatives (Future & Options), PS, Insurance, and Demat)
SURVEY:Research is based on certain outlets that are to be collected from various
sources.
SOURCES OF DATA:This research is based on secondary sources as well as primary sources.
Primary data source includes:
Direct interview of the executives of the competitor firms.
Direct questioning to the marketing department of the competing companies.
Collection of information by me while moving around in Ghaziabad..
Secondary data source includes:
Advertisement pamphlets.
World Wide Web.
Newspapers & Magazines.
Company Magazines.
SWOT ANALYSIS OF STOCK MARKET
STRENGTH
 Stock market or mutual fund gives more return than any other deposit
 Scheme
like bank deposits or monthly deposit in post office. Company
fixed deposits and other small savings conducted by government.
WEAKNESS
 Market is very flexible and risky. So people who have much idea about
the market may lose their money.
OPPORTUNITY
 Current economic situation and monetary policy of government gives
Strength to the stock market so it gives opportunity to investors to
invest their money in stock market.
THREAT
 Banks
and post offices and other investment schemes are attack on
market potential of stock market.
About Aditya Birla Money Limited
Aditya Birla Money Limited formerly known as Apollo Sindhoori Capital
Investments is a leading player in the broking space with nearly 15 years of
experience. It became a part of Aditya Birla Group in March 2009, when the
group acquired 76% of the company.
The Company has a strong distribution network of over 800 own branches and
franchisee network, a large customer base in excess of 1,80,000, a strong
technology backbone and a range of products delivered through a robust online
and offline model. The Company boasts of immense talent pool and vertical
specialists which add to its positioning as a major player in this segment.
Aditya Birla Money is listed on National Stock Exchange of India Limited
[NSE] and The Bombay Stock Exchange Limited [BSE]. It is also registered as
Depository Participant with both NSDL and CDSL.
Aditya Birla Money offers the following services:

Trading facility in Equity segment on and Derivative segment on NSE &
BSE through a single platform

Trading facility in commodity segment, including bullion, oils, gaur seed
etc. through its subsidiary, Aditya Birla Commodities Broking Limited

Depository Participant [DP] services of NSDL and CDSL

Online bidding for IPO and Mutual funds

Subscription based brokerage plans

Distribution of Mutual Funds

Insurance
About Aditya Birla Group
A US $28 billion conglomerate, the Aditya Birla Group is in the league of Fortune
500 worldwide. It is anchored by an extraordinary force of 100,000 employees,
belonging to 25 different nationalities. The group operates in 25 countries across
six continents – truly India's first multinational corporation. Aditya Birla Group
through Aditya Birla Financial Services Group (ABFSG), has a strong presence
across various financial services verticals that include life insurance, fund
management, distribution & wealth management, security based lending, insurance
broking, private equity and retail broking. The seven companies representing
ABFSG are Birla Sun Life Insurance Company, Birla Sun Life Asset Management
Company, Birla Sun Life Distribution Company, Birla Global Finance Company,
Birla Insurance Advisory & Broking Services, Aditya Birla Capital Advisors and
Aditya Birla Money. In FY 2008-09, the consolidated revenues of ABFSG from
these businesses crossed Rs. 4763 crores, registering a growth rate of 36%.
Key developments for Aditya Birla Money Limited
 Aditya Birla Money Limited expected to report Fiscal Year 2011 results
on April 17, 2011. This event was calculated by Capital IQ (Created on
August 27, 2010).
Aditya Birla Money Limited expected to report Fiscal Year 2011 results
on April 17, 2011. This event was calculated by Capital IQ (Created on
August 27, 2010).
 Aditya Birla Money Limited expected to report Q2 2011 results on
October 21, 2010. This event was calculated by Capital IQ (Created on
July 25, 2010).
Aditya Birla Money Limited expected to report Q2 2011 results on
October 21, 2010. This event was calculated by Capital IQ (Created on
July 25, 2010).
 Aditya Birla Money Limited Reports Unaudited Earnings Results for
the First Quarter Ended June 30, 2010
Aditya Birla Money Limited reported unaudited earnings results for the
first quarter ended June 30, 2010. For the quarter, the company reported
net profit after tax of INR 30.135 million or INR 0.54 per basic and
diluted share on income from operations of INR 281.476 million
compared to net profit after tax of INR 27.159 million or INR 0.49 per
basic and diluted share on income from operations of INR 266.693
million for the same quarter a year ago. Profit from operations before
other income & interest was INR 44.387 million compared to INR 44.772
million for the same quarter a year ago.
Aditya Birla Money Limited - Strategic Analysis Review
Type:
Marktstudie
Year:
06/2010
Publisher:
GlobalData
Language: english
Availability: available
Features of
this market
15 pages
research:
This comprehensive SWOT profile of Aditya Birla Money Limited
provides you an in-depth strategic analysis of the company’s businesses
About this
and operations. The profile has been compiled by GlobalData to bri.....
market
survey:
More about this market survey
This comprehensive SWOT profile of Aditya Birla Money Limited
provides you an in-depth strategic analysis of the company’s businesses
and operations. The profile has been compiled by GlobalData to bring
to you a clear and an unbiased view of the company’s key strengths and
weaknesses and the potential opportunities and threats. The profile
helps you formulate strategies that augment your business by enabling
you to understand your partners, customers and competitors better.
This company report forms part of GlobalData’s ‘Profile on Demand’
Service, covering over 50,000 of the world’s leading companies. Once
purchased, GlobalData’s highly qualified team of company analysts will
comprehensively research and author a full strategic analysis of Aditya
Birla Money Limited, and deliver this direct to you in pdf format within
two
business
days
(excluding
weekends).
The profile contains critical company information including*,
- Business description – A detailed description of the company’s
operations
and
business
divisions.
- Corporate strategy – Analyst’s summarization of the company’s
business
strategy.
- SWOT Analysis – A detailed analysis of the company’s strengths,
weakness,
opportunities
and
threats.
- Company history – Progression of key events associated with the
company.
- Major products and services – A list of major products, services and
brands
of
the
company.
- Key competitors – A list of key competitors to the company.
- Key employees – A list of the key executives of the company.
- Executive biographies – A brief summary of the executives’
employment
history.
- Key operational heads – A list of personnel heading key
departments/functions.
- Important locations and subsidiaries – A list and contact details of key
locations
and
subsidiaries
of
the
company.
Note*: Some sections may be missing if data is unavailable for the
company.
Key
benefits
of
buying
this
profile
include,
You get detailed information about the company and its operations to
identify
potential
customers
and
suppliers.
- The profile analyzes the company’s business structure, operations,
major products and services, prospects, locations and subsidiaries, key
executives
and
their
biographies
and
key
competitors.
Understand and respond to your competitors’ business structure and
strategies, and capitalize on their weaknesses. Stay up to date on the
major
developments
affecting
the
company.
- The company’s core strengths and weaknesses and areas of
development or decline are analyzed and presented in the profile
objectively. Recent developments in the company covered in the profile
help
you
track
important
events.
Equip yourself with information that enables you to sharpen your
strategies
and
transform
your
operations
profitably.
- Opportunities that the company can explore and exploit are sized up
and its growth potential assessed in the profile. Competitive and/or
technological
threats
are
highlighted.
Gain key insights into the company for academic or business research.
- Key elements such as SWOT analysis and corporate strategy are
incorporated in the profile to assist your academic or business research
needs.
COMPETITORS ANALYSIS
ICICI DIRECT.COM
ICICI direct.com is a website from the ICICI group, that allows to buy and sell Shares, invest in
Mutual Funds, IPO’s, Postal savings like NSC (National Savings Certificate) and KVP (Kisan
Vikas Patra), Life Insurance and General Insurance, Derivatives (F&O), GOI Bonds through
the internet. A client can also use the Call N trade facility, wherein he/she can place orders over
phone available across 400 cities of the country.
The company was incorporated on December 02 1999 & it received certificate for
commencement of business from the register of companies, Maharashtra on Jan. 17, 2000. ICICI
web trade ltd. Commenced commercial operation on April 17, 2000
Features of ICICI Direct.com:
The following are the benefits of using ICICI account






Among the top 5 online broker’s in the World, based on number of daily trades
Seamless trading environment with no hassles of writing cheques or TIFDs
Completely integrated offering of bank, demat and brokering services coupled
with PINS give an end-to-end online offering.
Safe and secure transaction capabilities with Secured Socket Layer (SSL) with 128 bit
encryption
Host of content and Research online with access to data on over 5000 companies.
No delay in payout of funds. Funds paid out on the same day of exchange pay-out
5paisa.com
5paisa is the trade name of India Info line Securities Private Limited (5paisa), member of
National Stock Exchange and The Stock Exchange, Mumbai. 5paisa is a wholly owned
subsidiary of India Info line Ltd, India’s leading and most popular finance and investment portal.
5paisa has emerged as one of leading players in e-broking space in India. Our key product
offerings are as follows:
Target customer segment
Trader Terminal is almost a substitute for NSE NEAT terminal and VSAT. In fact, it has many
more powerful features that only a premium trader can appreciate.

It is for dedicated day traders, who churn their portfolio on minor movements in the
market, sometimes several times a day. Their rapid and high volume trading requires a
powerful interface for lightening fast order execution.

High Net worth Individuals with large and active equities portfolio who need to monitor
and action swiftly.

Large corporate or trusts who have dedicated staff to monitor, analyze and shuffle their
portfolios
Trader Terminal features

Trade execution in a fraction of a second!

Live streaming quotes. Price watch on any number of scrip’s.

Intra day charts, updated live, tick-by-tick.

Live margin, position, marked to market profit & loss report.

The Lowest Brokerage on the face of the earth!

Set any number of price alerts on any number of scrip.

Flexibility to customize screen layout and setting.

Facility to customize any number of portfolios & watch lists.

Facility to cancel all pending orders at one click.

Facility to square off all transactions at one click.

Top Gainers, Top Losers, Most Active, updated live.

Index information; index chart, index stock information live.

Market depth, i.e. Best 5 bids and offers, updated live for all scrip

Instant trade confirmation.

Online access to both accounts and DP.

Live updated Order and Trade Book.

Details of pending, executed and rejected orders.

Online access to Customer Service.

128 - bit super safe encryption.

Facility to place orders on the phone in all major cities.

Facility to place after market orders

Online fund transfer facility from leading Banks

Online intra-day technical calls.

Exhaustive database of over 5000 companies

Historical charts and technical analysis tools.

India Info line’s world - acclaimed news service and research.
INDIA BULLS
Indiabulls is a depository participant with the National Securities Depository Limited and Central
Depository Services (India) Limited for trading and settlement of dematerialized shares.
Indiabulls performs clearing services for all securities transactions through its accounts. They
offers depository services to create a seamless transaction platform – execute trades through
Indiabulls Securities and settle these transactions through the Indiabulls Depository Services.
Indiabulls Depository Services is part of their value added services for their clients that create
multiple interfaces with the client and provide for a solution that takes care of all customers
needs.
CO FOUNDER:
Sameer Gehlaut is the Chairman, CEO and Whole Time Director of Indiabulls. Sameer is an
engineer from IIT, Delhi (1995) and has worked internationally with Halliburton in its
international services business in 1995. He has utilized his experience with the international best
practices and professional work culture at Halliburton to lead Indiabulls successfully.
Rajiv Rattan is the President, CFO and Whole Time Director of Indiabulls. Rajiv is an engineer
from IIT, Delhi (1994) and has rich experience in the oil industry, having worked extensively
across the globe in highly responsible assignments with Schlumberger. Rajiv has managed
remote exploration projects providing evaluation services for different clients in India as well as
abroad.
Saurabh Mittal is a Director at Indiabulls. Declared the best graduating student in IIT, Delhi in
(1995), Saurabh was also one of the engineers selected by Schlumberger to work for its
international services business in 1995 and gained experience of working in various global
locations. He graduated as a Baker Scholar with an MBA from the Harvard Business School.
He has also developed in-depth understanding of international financial markets.
HDFC SEC
HDFC sec is a brand brought by HDFC Securities Ltd, which has been promoted by the HDFC
Bank & HDFC with the objective of providing the diverse customer base of the HDFC Group
and other investors a capability to transact in the Stock Exchanges & other financial market
transactions.
OBJECTIVE
Buying and selling of select mutual funds units, subscription to initial public offerings, public
issues and rights issues, and purchase of insurance policies and facilitating asset financing (house
and car loans for instance). These products and services would of course be provided subject to
the prevailing rules & regulations of HDFC sec., the regulatory body, the Securities Exchange
Board of India (SEBI) and the relevant stock exchanges
Products & Services







Cash-n-Carry on both NSE and BSE.
Day trading on both NSE and BSE.
Trade on Futures & Options on the NSE.
Online IPO's.
Online Buying and selling of select mutual funds units.
Online Purchase of insurance policies.
Facilitating asset financing (house and car loans for instance).
KARVY
Karvy has traveled the success route, towards building a reputation as an integrated financial
services provider, offering a wide spectrum of services for over 20 years. Karvy, a name
long committed to service at its best. A fame acquired through the range of corporate and
retail services including mutual funds, fixed income, equity investments, insurance ………
to name a few. Their values and vision of attaining total competence in our servicing has
served as a building block for creating a great financial enterprise.
The birth of Karvy was on a modest scale in the year 1982. It began with the vision and
enterprise of a small group of practicing Chartered Accountants based in Hyderabad, who
founded Karvy. They started with consulting and financial accounting automation, and then
carved inroads into the field of Registry and Share Transfers.
Since then, they have utilized our quality experience and superlative expertise to go from
strength to strength to provide better and new services to the investors. And today, we can look
with pride at the fruits of our experience into comprehensive financial services provider in the
Country.
KARVY Group companies are:
1.
2.
3.
4.
5.
6.
7.
8.
9.
Karvy Consultants Limited
Karvy Stock Broking Limited
Karvy Investor Services Limited
Karvy Computer share Private Limited
Karvy Global Services Limited
Karvy Comtrade Limited
Karvy Insurance Broking Private Limited
Karvy Mutual Fund Services
Karvy Securities Limited
KOTAK SECURITIES LIMITED
Kotak Securities Limited, a subsidiary of Kotak
Mahindra Bank, is the stock broking and distribution arm of the Kotak Mahindra Group. The
company was set up in 1994. Kotak Securities is a corporate member of both The Bombay
Stock Exchange and The National Stock Exchange of India Limited. Its operations include
stock broking and distribution of various financial products - including private and secondary
placement of debt and equity and mutual funds. Currently, Kotak Securities is one of the
largest broking houses in India with wide geographical reach. The company has four main
areas of business: (1) Institutional Equities, (2) Retail (equities and other financial products),
(3) Portfolio Management and (4) Depository Services.



Institutional Business
This division primarily covers secondary market broking. It caters to the needs of foreign
and Indian institutional investors in Indian equities (both local shares and GDRs). The
division also incorporates a comprehensive research cell with sectoral analysts who cover
all the major areas of the Indian economy.
Client Money Management
This division provides professional portfolio management services to high net-worth
individuals and corporate. Its expertise in research and stock broking gives the company
the right perspective from which to provide its clients with investment advisory services.

Retail distribution of financial products
Kotak Securities has a comprehensive retail distribution network, comprising
approximately 7000 agents, 13 branches and over 20 franchisees across India. This
network is used for the distribution and placement of a range of financial products that
includes company fixed deposits, mutual funds, Initial Public Offerings, secondary debt
and equity and small savings schemes.
Depository Services
Kotak Securities is a depository participant with the National Securities Depository
Limited and Central Depository Services (India) Limited for trading and settlement of
dematerialized shares. Since it is also in the broking business, investors who use its
depository services get a dual benefit. They are able to use its brokerage services to
execute transactions and its depository services to settle these.
Kotak Securities' width, volume and quality of offerings regularly earn it accolades from
industry monitors. In recent times, these have included:
Mr. Uday Kotak
Executive Vice Chairman & Managing Director
KCL as a Primary Dealer offers the following products /services through its branches at
Mumbai, Delhi, Calcutta, Chennai, Ahmedabad and Bangalore.
Trading in
1) Central and State Government Dated Securities
2) Treasury Bills of Varying maturities
3)Public Sector Bonds – both Taxable & Tax-free
Commercial Paper
Other Services:
1) Call
Money Operations*
2) Research -The Company publishes various newsletters for the benefit of investors and
market participants
3) Placing of Corporate funds into Call money market*
4) Constituent SGL Accounts*
MOTILAL OSWAL SECURITIES
Motilal Oswal Securities Ltd. (MOSt) is arguably one of the best brands among Indian
Domestic broking houses enjoying an unmatched and unparallel brand recall. Financially
sound, with an excellent track record of consistent market growth in all key business segments.
MOSt is spread across 24 states in 200 cities through 300 Business Associates and 52
branches.
To reach out to more investors across India, MOSt builds partnership with high caliber and
like minded individuals and companies who share similar business philosophy, ethics and
values, a sound client base and having the zeal and potential to capture a larger market share
within their allotted territory.
Depository Services
In the times of T+2 having a demat account linked to your trading account becomes really
convenient. The non-trading members also can avail of our Depository services. You receive
regular account reports and an efficient service at all times. MOSt is a member of both NSDL
and CDSL and the service is available at all our outlets in India.
Depository Service Provided By MODES
Account Opening, Dematerialization, Rematerialization, Account Transfer, Transmission,
Nomination, Pledging and Hypothecation, Account Closures.
Derivatives
Derivatives (Futures & Options) are ideal instruments to protect your portfolio against risk.
You can trade with index movements, hedge and leverage your portfolio by limiting risk but
keeping your upside unlimited.
Equity Research
Equity Research is an inherent strength of MOSt. MOSt believes in picking investment
opportunities where the underlying value is higher than the market price.
COMPARATIVE ANALYSIS
PRODUCTS AND SERVICES ALONG WITH FEES OFFERED BY
SECURITIES COMPANIES
ICICI
DIRECT.COM
HDFC
SEC
KOTAK
STREET
SHARE
KHAN
INDIA
BULLS
MOTILAL
OSWAL
5 PAISA
Aditya Birla
money
750
700
550
750
500
500
675
750
0
0
600
375
0
500
500
360
600
375
50
Inclusive
N
15
Cash
brokerage
0.75-0.3
0.5
0.59
ATST
brokerage
Same as
above
Margin
brokerage
0.10-0.3
0.15
Derivatives
brokerage
0.10-0.3
0.15
Commodity
brokerage
Will come
soon
A/C
opening
fees
Recurring
fees for
trading a/c
Demat
AMC
Demat
charges
0.1
300
0
0
12
0.5
0.5
40p
60
NIL
0.5
0.5
40p
60
NIL
15p
15
NIL
0.1
0.1
0.4
10p
NIL
0.4
50p
NIL
PRODUCTS AND SERVICES
ICICI
HDFC Kotak
direct.com sec
sec
Share
khan
India Moti lal
bulls oswal
Aditya
5 paisa Birla
money
Y
Y
Y
YSelective
YSelective
Y
Y
Y
Y
Y
N
Y
Y
Y
Y
Y
N
N
Y
N
Y
N
Y
N
Y
Y
N
N
Y
N
N
N
Y
Y
Y
Y
Y
Y
Y
Y
Derivatives
Y
Y
N
Y
Y
Y
Y
Y
commodity
Y(offline)
N
N
N
Y
N
Y
N
IPO
Y
Y
Y
Y
N
N
Y
Y
MF
Y
N
Y
N
N
N
Y
N
Y
N
N
N
N
N
Y
N
Y
N
N
N
N
N
Y
Y
GOI bonds
Y
N
Y
N
N
N
Y
N
Call n trade
Y
Y
Y
Y
Y
Y
Y
Y
Cash
ATST
Spot
Funded
margin
Margin
Small
savings
Insurance
Investment Analysis Mutual Fund
MUTUAL FUND
Mutual fund is a mechanism for pooling the resources by issuing units to the investors
and investing funds in securities in accordance with objectives as disclosed in offer
document.
Investments in securities are spread across a wide cross-section of industries and sectors
and thus the risk is reduced. Diversification reduces the risk because all stocks may not
move in the same direction in the same proportion at the same time. Mutual fund issues
units to the investors in accordance with quantum of money invested by them. Investors
of mutual funds are known as unit holders.
The investors, in proportion to their investments, share the profits or losses. The mutual
funds normally come out with a number of schemes with different investment objectives,
which are launched from time to time. A mutual fund is required to be registered with
Securities and Exchange Board of India (SEBI), which regulates securities markets
before it can collect funds from the public.
» What is the history of Mutual Funds in India and role of SEBI in mutual funds
industry?
Unit Trust of India was the first mutual fund set up in India in the year 1963. In early
1990s, Government allowed public sector banks and institutions to set up mutual funds.
In the year 1992, Securities and exchange Board of India (SEBI) Act was passed. The
objectives of SEBI are - to protect the interest of investors in securities and to promote
the development of and to regulate the securities market.
As far as mutual funds are concerned, SEBI formulates policies and regulates the mutual
funds to protect the interest of the investors. SEBI notified regulations for the mutual
funds in 1993. Thereafter, mutual funds sponsored by private sector entities were allowed
to enter the capital market. The regulations were fully revised in 1996 and have been
amended thereafter from time to time. SEBI has also issued guidelines to the mutual
funds from time to time to protect the interests of investors.
All mutual funds whether promoted by public sector or private sector entities including
those promoted by foreign entities are governed by the same set of Regulations. There is
no distinction in regulatory requirements for these mutual funds and all are subject to
monitoring and inspections by SEBI. The risks associated with the schemes launched by
the mutual funds sponsored by these entities are of similar type.
» What is an Asset Management Company?
The AMC acts as the investment manager of the Trust. The Trustees, with the approval of
SEBI, appoints the AMC. The AMC manages the different investment schemes of a
mutual fund. An AMC may have several mutual fund schemes with similar or varied
investment objectives. Besides its role as the Fund Manager, the AMC may undertake
specified activities such as advisory services and financial consulting. The AMC also
undertakes Customer Services, Accounting, Marketing and Sales functions for the
schemes of the mutual fund.
» How is a mutual fund set up?
A mutual fund is set up in the form of a trust, which has sponsor, trustees, asset
management company (AMC) and custodian. The trust is established by a sponsor or
more than one sponsor who is like promoter of a company. The trustees of the mutual
fund hold its property for the benefit of the unit holders. Asset Management Company
(AMC) approved by SEBI manages the funds by making investments in various types of
securities. Custodian, who is registered with SEBI, holds the securities of various
schemes of the fund in its custody. The trustees are vested with the general power of
superintendence and direction over AMC. They monitor the performance and compliance
of SEBI Regulations by the mutual fund.
SEBI Regulations require that at least two thirds of the directors of trustee company or
board of trustees must be independent i.e. they should not be associated with the
sponsors. Also, 50% of the directors of AMC must be independent. All mutual funds are
required to be registered with SEBI before they launch any scheme.
» What are the benefits of investing through the mutual fund route?
For investors who have limited resources available in terms of capital and the ability to carry
out detailed research and market monitoring, mutual funds offer the following major
advantages :• Portfolio Diversification
This enables an investor to hold a diversified investment portfolio, even with a small amount of
investment that would otherwise require big capital.
• Professional Management
A team of professional fund managers manages them with in-depth research inputs from
investment analysts.
• Reduction / Diversification of Risk
However small his investment, an investor in a mutual fund directly acquires a diversified
portfolio, which reduces his risk of loss as compared to investing directly in a few instruments.
• Reduced Transaction Costs
An investor can reap the benefits of the 'Economies of Scale' as funds pay lesser costs on
brokerage, custodian charges etc, because of larger volumes.
• Convenience and flexibility
Investors can easily transfer their holdings from one scheme to another; get updated market
information and so on.
» What is Net Asset Value (NAV) of a scheme?
Net Asset Value (NAV) denotes the performance of a particular scheme of a mutual fund.
Mutual funds invest the money collected from the investors in securities markets. In simple
words, Net Asset Value is the market value of the securities held by the scheme. Since market
value of securities changes every day, NAV of a scheme also varies on day-to-day basis. The
NAV per unit is the market value of securities of a scheme divided by the total number of units
of the scheme on any particular date. For example, if the market value of securities of a mutual
fund scheme is Rs 200 lakhs and the mutual fund has issued 10 lakhs units of Rs. 10 each to
the investors, then the NAV per unit of the fund is Rs.20. NAV is required to be disclosed by
the mutual funds on a regular basis - daily or weekly - depending on the type of scheme.
» What are the different types of Mutual fund Schemes?
• Schemes according to Maturity Period:
A mutual fund scheme can be classified into open-ended scheme or close-ended scheme
depending on its maturity period.
• Open-ended Fund/ Scheme
An open-ended fund or scheme is one that is available for subscription and repurchase on a
continuous basis. These schemes do not have a fixed maturity period. Investors can
conveniently buy and sell units at Net Asset Value (NAV) related prices, which are declared on
a daily basis. The key feature of open-end schemes is liquidity.
• Close-ended Fund/ Scheme
A close-ended fund or scheme has a stipulated maturity period e.g. 5-7 years. The fund is open
for subscription only during a specified period at the time of launch of the scheme. Investors
can invest in the scheme at the time of the initial public issue and thereafter they can buy or sell
the units of the scheme on the stock exchanges where the units are listed. In order to provide an
exit route to the investors, some 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 to the investor i.e. either repurchase facility
or through listing on stock exchanges. These mutual funds schemes disclose NAV generally on
weekly basis.
• Schemes according to Investment Objective:
A scheme can also be classified as growth scheme, income scheme, or balanced scheme
considering its investment objective. Such schemes may be open-ended or close-ended
schemes as described earlier. Such schemes may be classified mainly as follows:
• Growth / Equity Oriented Scheme
The aim of growth funds is to provide capital appreciation over the medium to long- term.
Such schemes normally invest a major part of their corpus in equities. Such funds have
comparatively high risks. These schemes provide different options to the investors like
dividend option, capital appreciation, etc. and the investors may choose an option depending
on their preferences. The investors must indicate the option in the application form. The mutual
funds also allow the investors to change the options at a later date. Growth schemes are good
for investors having a long-term outlook seeking appreciation over a period of time.
• Income / Debt Oriented Scheme
The aim of income funds is to provide regular and steady income to investors. Such schemes
generally invest in fixed income securities such as bonds, corporate debentures, Government
securities and money market instruments. Such funds are less risky compared to equity
schemes. These funds are not affected because of fluctuations in equity markets. However,
opportunities of capital appreciation are also limited in such funds. The NAVs of such funds
are affected because of change in interest rates in the country. If the interest rates fall, NAVs of
such funds are likely to increase in the short run and vice versa. However, long-term investors
may not bother about these fluctuations.
• Balanced Fund
The aim of balanced funds is to provide both growth and regular income as such schemes
invest both in equities and fixed income securities in the proportion indicated in their offer
documents. These are appropriate for investors looking for moderate growth. They generally
invest 40-60% in equity and debt instruments. These funds are also affected because of
fluctuations in share prices in the stock markets. However, NAVs of such funds are likely to be
less volatile compared to pure equity funds.
• 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.
• Gilt Fund
These funds invest exclusively in government securities. Government securities have no
default risk. NAVs of these schemes also fluctuate due to change in interest rates and other
economic factors as are the case with income or debt oriented schemes.
• Index Funds
Index Funds replicate the portfolio of a particular index such as the BSE Sensitive index, S&P
NSE 50 index (Nifty), etc These schemes invest in the securities in the same weightage
comprising of an index. NAVs of such schemes would rise or fall in accordance with the rise
or fall in the index, though not exactly by the same percentage due to some factors known as
"tracking error" in technical terms. Necessary disclosures in this regard are made in the offer
document of the mutual fund scheme.
There are also exchange traded index funds launched by the mutual funds, which are traded on
the stock exchanges.
» What are Sector specific funds/schemes?
These are the funds/schemes, which invest in the securities of 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 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. They may also
seek advice of an expert.
» What are Tax Saving Schemes?
These schemes offer tax rebates to the investors under specific provisions of the Income Tax
Act, 1961 as the Government offers tax incentives for investment in specified avenues. e.g.
Equity Linked Savings Schemes (ELSS). Pension schemes launched by the mutual funds also
offer tax benefits. These schemes are growth oriented and invest pre-dominantly in equities.
Their growth opportunities and risks associated are like any equity-oriented scheme.
» What is a Systematic Investment Plan?
Unit holders can benefit by investing specified rupee amounts at regular intervals for a
continuous period. The SIP allows the unit holders to invest a fixed amount of rupees at regular
intervals for purchasing additional Units of the Schemes at NAV based prices. This concept is
called Rupee Cost Averaging.
» What are the benefits of a Systematic Investment Plan?
By investing an equivalent amount at regular intervals, each month for example, the investors
do not have to worry about catching market highs and lows, because their monthly contribution
will buy more Units when prices are low and fewer Units when prices are high. The net result
is that, over a long period of time, their average cost could be lower than the average market
price, and when they eventually sell your Units, their gain could be higher than if they had
invested a lump sum. Thus, by investing a fixed amount of Rupees at regular intervals, Unit
holders can take advantage of the benefits of Rupee Cost Averaging, at the same time saving a
fixed amount of Rupees each month.
» What is a Systematic Withdrawal Plan?
A Systematic Withdrawal Plan is a strategy that allows the unit holder to withdraw a specified
sum of money each month / quarter from his investments in the scheme.
» What are the benefits of a Systematic Withdrawal Plan?
An SWP is ideal for investors seeking a regular inflow of funds for their needs. It is also
ideally suited to retirees or individuals, who wish to invest a lump sum and withdraw from the
investment over a period of time.
» What are Entry/Exit Loads and CDSC?
Charges levied by fund managers to the investors to cover distribution / sales / marketing
expenses are often called loads. The load charged to an investor at the time of an investor's
entry into a scheme / fund, by deducting a specific amount from his initial contribution is
called an Entry load.
The load charged to an investor at the time of an investor's exit from a scheme / fund, by
deducting a specific amount from his redemption proceeds is called an Exit load.
Some funds may also charge different amounts of loads to the investors, depending upon how
many years the investor has stayed with the fund; the longer the investor stays with the fund,
less the amount of 'exit load' he is charged. This is called 'Contingent Deferred Sales Charge'
(CDSC).
» What is a Load or no-load Fund?
A Load Fund is one that charges a percentage of NAV for entry or exit. That is, each time one
buys or sells units in the fund, a charge will be payable. This charge is used by the mutual fund
for marketing and distribution expenses. Suppose the NAV per unit is Rs.10. If the entry as
well as exit load charged is 1%, then the investors who buy would be required to pay Rs.10.10
and those who offer their units for repurchase to the mutual fund will get only Rs.9.90 per unit.
The investors should take the loads into consideration while making investment as these affect
their yields/returns. However, the investors should also consider the performance track record
and service standards of the mutual fund, which are more important. Efficient funds may give
higher returns in spite of loads.
A no-load fund is one that does not charge for entry or exit. It means the investors can enter the
fund/scheme at NAV and no additional charges are payable on purchase or sale of units.
» What is Sales/Purchase price?
The price or NAV a unit holder is charged while investing in an open-ended scheme is called
sales price. It may include sales load, if applicable.
» What is repurchase / redemption price?
Repurchase or redemption price is the price or NAV at which an open-ended scheme purchases
or redeems its units from the unit holders. It may include exit load, if applicable.
» What is a Switch?
Some Mutual Funds provide the investor with an option to shift his investment from one
scheme to another within that fund. The Switch will be effected by way of a redemption of
Units from the scheme and a reinvestment of the redemption proceeds in the 'Other Scheme(s)'
subject to the compliance of the switch with the redemption rules of this Scheme and the issue
rules of the 'other scheme'. The price at which the Units will be switched out of the Scheme,
will be based on the applicable redemption price and the proceeds will be invested in the 'other
scheme' at the prevailing Public Offer Price (POP) for units in that Scheme. Switching allows
the Investor to alter the allocation of their investment among the schemes in order to meet their
changed investment needs, risk profiles or changing circumstances during their lifetime.
» What is an assured return scheme?
Assured return schemes are those schemes that assure a specific return to the unit holders
irrespective of performance of the scheme.
A scheme cannot promise returns unless such returns are fully guaranteed by the sponsor or
AMC and this is required to be disclosed in the offer document.
Investors should carefully read the offer document whether return is assured for the entire
period of the scheme or only for a certain period. Some schemes assure returns one year at a
time and they review and change it at the beginning of the next year.
» Can a mutual fund change the asset allocation while deploying funds of investors?
Considering the market trends, any prudent fund managers can change the asset allocation i.e.
he can invest higher or lower percentage of the fund in equity or debt instruments compared to
what is disclosed in the offer document. It can be done on a short term basis on defensive
considerations i.e. to protect the NAV. Hence the fund managers are allowed certain flexibility
in altering the asset allocation considering the interest of the investors. In case the mutual fund
wants to change the asset allocation on a permanent basis, they are required to inform the unit
holders and giving them option to exit the scheme at prevailing NAV without any load
» Can non-resident Indians (NRIs) invest in mutual funds?
Yes, non-resident Indians can also invest in mutual funds. Necessary details in this respect are
given in the offer documents of the schemes.
» How to invest in a scheme of a mutual fund?
Mutual funds normally come out with an advertisement in newspapers publishing the date of
launch of the new schemes. Investors can also contact the agents and distributors of mutual
funds who are spread all over the country for necessary information and application forms.
Forms can be deposited with mutual funds through the agents and distributors who provide
such services. Now days, the post offices and banks also distribute the units of mutual funds.
However, the investors may please note that the mutual funds schemes being marketed by
banks and post offices should not be taken as their own schemes and they give no assurance of
returns. The only role of banks and post offices is to help in distribution of mutual funds
schemes to the investors.
Investors should not be carried away by commission/gifts given by agents/distributors for
investing in a particular scheme. On the other hand they must consider the track record of the
mutual fund and should take objective decisions.
» How much should one invest in debt or equity oriented schemes?
An investor should take into account his risk taking capacity, age factor, financial position, etc.
As already mentioned, the schemes invest in different type of securities as disclosed in the
offer documents and offer different returns and risks. Investors may also consult financial
experts before taking decisions. Agents and distributors may also help in this regard.
» What should an investor look into an offer document?
An abridged offer document, which contains very useful information, is required to be given to
the prospective investor by the mutual fund. The application form for subscription to a scheme
is an integral part of the offer document. SEBI has prescribed minimum disclosures in the offer
document. An investor, before investing in a scheme, should carefully read the offer document.
Due care must be given to portions relating to main features of the scheme, risk factors, initial
issue expenses and recurring expenses to be charged to the scheme, entry or exit loads,
sponsor's track record, educational qualification and work experience of key personnel
including fund managers, performance of other schemes launched by the mutual fund in the
past, pending litigations and penalties imposed, etc.
» How to choose a scheme for investment from a number of schemes available?
As already mentioned, the investors must read the offer document of the mutual fund scheme
very carefully. They may also look into the past track record of performance of the scheme or
other schemes of the same mutual fund. They may also compare the performance with other
schemes having similar investment objectives. Though past performance of a scheme is not an
indicator of its future performance and good performance in the past may or may not be
sustained in the future, this is one of the important factors for making investment decision. In
case of debt-oriented schemes, apart from looking into past returns, the investors should also
see the quality of debt instruments, which is reflected in their rating. A scheme with lower rate
of return but having investments in better-rated instruments may be safer. Similarly, in equities
schemes also, investors may look for quality of portfolio. They may also seek advice of
experts.
» How to fill up the application form of a mutual fund scheme?
An investor must mention clearly his name, address, number of units applied for and such other
information as required in the application form. He must give his bank account number so as to
avoid any fraudulent encashment of any cheque/draft issued by the mutual fund at a later date
for the purpose of dividend or repurchase. Any changes in the address, bank account number,
etc at a later date should be informed to the mutual fund immediately.
» When will the investor get certificate or statement of account after investing in a mutual
fund?
Mutual funds are required to dispatch certificates or statements of accounts within six weeks
from the date of closure of the initial subscription of the scheme. In case of close-ended
schemes, the investors would get either a demat account statement or unit certificates as these
are traded in the stock exchanges. In case of open-ended schemes, a statement of account is
issued by the mutual fund within 30 days from the date of closure of initial public offer of the
scheme. The procedure of repurchase is mentioned in the offer document.
» How long will it take for transfer of units after purchase from stock markets in case of closeended schemes?
According to SEBI Regulations, transfer of units is required to be done within thirty days from
the date of lodgment of certificates with the mutual fund.
» As a unit holder, how much time will it take to receive dividends / repurchase proceeds?
A mutual fund is required to dispatch to the unit holders the dividend warrants within 30 days
of the declaration of the dividend and the redemption or repurchase proceeds within 10
working days from the date of redemption or repurchase request made by the unitholder.
In case of failures to despatch the redemption/repurchase proceeds within the stipulated time
period, Asset Management Company is liable to pay interest as specified by SEBI from time to
time (15% at present).
» Can a mutual fund change the nature of the scheme from the one specified in the offer
document?
Yes. However, no change in the nature or terms of the scheme, known as fundamental
attributes of the scheme e.g. structure, investment pattern, etc. can be carried out unless a
written communication is sent to each unitholder and an advertisement is given in one English
daily having nationwide circulation and in a newspaper published in the language of the region
where the head office of the mutual fund is situated. The unit holders have the right to exit the
scheme at the prevailing NAV without any exit load if they do not want to continue with the
scheme. The mutual funds are also required to follow similar procedure while converting the
scheme form close-ended to open-ended scheme and in case of change in sponsor.
» How will an investor come to know about the changes, if any, which may occur in the mutual
fund?
There may be changes from time to time in a mutual fund. The mutual funds are required to
inform any material changes to their unit holders. Apart from it, many mutual funds send
quarterly newsletters to their investors.
At present, offer documents are required to be revised and updated at least once in two years.
In the meantime, new investors are informed about the material changes by way of addendum
to the offer document till the time offer document is revised and reprinted.
» How to know the performance of a mutual fund scheme?
The performance of a scheme is reflected in its net asset value (NAV), which is disclosed on
daily basis in case of open-ended schemes and on weekly basis in case of close-ended schemes.
The NAVs of mutual funds are required to be published in newspapers. The NAVs are also
available on the web sites of mutual funds. All mutual funds are also required to put their
NAVs on the web site of Association of Mutual Funds in India (AMFI) www.amfiindia.com
and thus the investors can access NAVs of all mutual funds at one place
The mutual funds are also required to publish their performance in the form of half-yearly
results, which also include their returns/yields over a period of time i.e. last six months, 1 year,
3 years, 5 years and since inception of schemes. Investors can also look into other details like
percentage of expenses of total assets as these have an affect on the yield and other useful
information in the same half-yearly format.
The mutual funds are also required to send annual report or abridged annual report to the unit
holders at the end of the year.
The financial newspapers on a weekly basis are publishing various studies on mutual fund
schemes including yields of different schemes. Apart from these, many research agencies also
publish research reports on performance of mutual funds including the ranking of various
schemes in terms of their performance. Investors should study these reports and keep
themselves informed about the performance of various schemes of different mutual funds.
Investors can compare the performance of their schemes with those of other mutual funds
under the same category. They can also compare the performance of equity-oriented schemes
with the benchmarks like BSE Sensitive Index, S&P CNX Nifty, etc.
On the basis of performance of the mutual funds, the investors should decide when to enter or
exit from a mutual fund scheme.
» How to know where the mutual fund scheme has invested money mobilized from the
investors?
The mutual funds are required to disclose full portfolios of all of their schemes on half-yearly
basis, which are published in the newspapers. Some mutual funds send the portfolios to their
unit holders.
The scheme portfolio shows investment made in each security i.e. equity, debentures, money
market instruments, government securities, etc. and their quantity, market value and % to
NAV. These portfolio statements also required to disclose illiquid securities in the portfolio,
investment made in rated and unrated debt securities, non-performing assets (NPAs), etc.
Some of the mutual funds send newsletters to the unit holders on quarterly basis, which also
contain portfolios of the schemes.
» Is there any difference between investing in a mutual fund and in an initial public
offering (IPO) of a company?
Yes, there is a difference. IPOs of companies may open at lower or higher price than the issue
price depending on market sentiment and perception of investors. However, in the case of
mutual funds, the par value of the units may not rise or fall immediately after allotment. A
mutual fund scheme takes some time to make investment in securities. NAV of the scheme
depends on the value of securities in which the funds have been deployed.
» If schemes in the same category of different mutual funds are available, should one choose a
scheme with lower NAV?
Some of the investors have the tendency to prefer a scheme that is available at lower NAV
compared to the one available at higher NAV. Sometimes, they prefer a new scheme, which is
issuing units at Rs. 10 whereas the existing schemes in the same category are available at much
higher NAVs. Investors may please note that in case of mutual funds schemes, lower or higher
NAVs of similar type schemes of different mutual funds have no relevance. On the other hand,
investors should choose a scheme based on its merit considering performance track record of
the mutual fund, service standards, professional management, etc. This is explained in an
example given below.
Suppose scheme A is available at a NAV of Rs.15 and another scheme B at Rs.90. Both
schemes are diversified equity oriented schemes. Investor has put Rs. 9,000 in each of the two
schemes. He would get 600 units (9000/15) in scheme A and 100 units (9000/90) in scheme B.
Assuming that the markets go up by 10 per cent and both the schemes perform equally good
and it is reflected in their NAVs. NAV of scheme A would go up to Rs. 16.50 and that of
scheme B to Rs. 99. Thus, the market value of investments would be Rs. 9,900 (600* 16.50) in
scheme A and it would be the same amount of Rs. 9900 in scheme B (100*99). The investor
would get the same return of 10% on his investment in each of the schemes. Thus, lower or
higher NAV of the schemes and allotment of higher or lower number of units within the
amount an investor is willing to invest, should not be the factors for making investment
decision. Likewise, if a new equity oriented scheme is being offered at Rs.10 and an existing
scheme is available for Rs. 90, should not be a factor for decision making by the investor.
Similar is the case with income or debt-oriented schemes.
On the other hand, it is likely that the better-managed scheme with higher NAV may give
higher returns compared to a scheme, which is available at lower NAV but is not managed
efficiently. Similar is the case of fall in NAVs. Efficiently managed scheme at higher NAV
may not fall as much as inefficiently managed scheme with lower NAV. Therefore, the
investor should give more weightage to the professional management of a scheme instead of
lower NAV of any scheme. He may get much higher number of units at lower NAV, but the
scheme may not give higher returns if it is not managed efficiently.
» How significant are fund costs while choosing a scheme?
The cost of investing through a mutual fund is not insignificant and deserves due consideration,
especially when it comes to fixed income funds. Management fees, annual expenses of the
fund, sales loads etc. can take away a significant portion of your returns. Please also carefully
examine the fee a fund charges for getting in and out of the fund.
» Are the companies having names like mutual benefit the same as mutual funds schemes?
Investors should not assume some companies having the name "mutual benefit" as mutual
funds. These companies do not come under the purview of SEBI. On the other hand, mutual
funds can mobilize funds from the investors by launching schemes only after getting registered
with SEBI as mutual funds.
» Is the higher net worth of the sponsor a guarantee for better returns?
In the offer document of any mutual fund scheme, financial performance including the net
worth of the sponsor for a period of three years is required to be given. The only purpose is that
the investors should know the track record of the company, which has sponsored the mutual
fund. However, higher net worth of the sponsor does not mean that the scheme would give
better returns or the sponsor would compensate in case the NAV falls.
» Where can an investor look out for information on mutual funds?
Almost all the mutual funds have their own web sites. Investors can also access the NAVs,
half-yearly results and portfolios of all mutual funds at the web site of Association of mutual
funds in India (AMFI) www.amfiindia.com. AMFI has also published useful literature for the
investors.
Investors can log on to the web site of SEBI www.sebi.gov.in and go to "Mutual Funds"
section for information on SEBI regulations and guidelines, data on mutual funds, draft offer
documents filed by mutual funds, addresses of mutual funds, etc. Also, in the annual reports of
SEBI available on the web site, a lot of information on mutual funds is given.
There are a number of other web sites, which give a lot of information of various schemes of
mutual funds including yields over a period of time. Many newspapers also publish useful
information on mutual funds on daily and weekly basis. Investors may approach their agents
and distributors to guide them in this regard.
» If mutual fund scheme is wound up, what happens to money invested?
In case of winding up of a scheme, the mutual funds pay a sum based on prevailing NAV after
adjustment of expenses. Unit holders are entitled to receive a report on winding up from the
mutual funds, which gives all necessary details.
» How can the investors redress their complaints?
Investors would find the name of contact person in the offer document of the mutual fund
scheme that they may approach in case of any query, complaints or grievances. Trustees of a
mutual fund monitor the activities of the mutual fund. The names of the directors of Asset
Management Company and trustees are also given in the offer documents. Investors can also
approach SEBI for redressed of their complaints. On receipt of complaints, SEBI takes up the
matter with the concerned mutual fund and follows up with them till the matter is resolved.
Investors may send their complaints
MUTUAL FUND BENEFITS
An expert on your side:
When you invest in a mutual fund, the analysis and strategic thinking that goes into
investing is not your worry. That's what a fund manager does for you.
Limited risk:
Mutual funds are diversification in action and hence do not rely on the performance of a
single entity.
More for less:
Your money can probably afford just a handful of stocks, but by investing in just one fund,
you could get yourself a number of units across a spread of companies and industries!
Easy investing:
You can invest in a mutual fund with as little as Rs. 5,000. Salaried individuals also have the
option of investing a little every month in a SIP or Systematic Investment Plan.
Convenience:
You can invest directly with a fund house, or through your financial adviser, or even over
the Internet.
Quick access to your money:
Should you need your money at short notice, you can usually get it in four working days.
Transparency:
As an investor, you get updates on the value of your units, information on specific
investments made by the mutual fund and the fund manager's strategy and outlook.
Low transaction costs:
A mutual fund, by the sheer scale of its investments is able to carry out cost-effective
brokerage transactions.
Tax benefits:
Over the years, tax policies on mutual funds have been favourable to investors and continue
to be so.
Investor protection:
A mutual fund in India is registered with The Securities and Exchange Board of India or
SEBI, which also monitors the operations of mutual funds to protect your interests.
Drawbacks of Mutual Funds
Mutual funds have their drawbacks and may not be for everyone:

No Guarantees: No investment is risk free. If the entire stock market declines in value,
the value of mutual fund shares will go down as well, no matter how balanced the
portfolio. Investors encounter fewer risks when they invest in mutual funds than when
they buy and sell stocks on their own. However, anyone who invests through a mutual
fund runs the risk of losing money.

Fees and commissions: All funds charge administrative fees to cover their day-to-day
expenses. Some funds also charge sales commissions or "loads" to compensate brokers,
financial consultants, or financial planners. Even if you don't use a broker or other
financial adviser, you will pay a sales commission if you buy shares in a Load Fund.

Taxes: During a typical year, most actively managed mutual funds sell anywhere from 20
to 70 percent of the securities in their portfolios. If your fund makes a profit on its sales,
you will pay taxes on the income you receive, even if you reinvest the money you made.

Management risk: When you invest in a mutual fund, you depend on the fund's manager
to make the right decisions regarding the fund's portfolio. If the manager does not
perform as well as you had hoped, you might not make as much money on your
investment as you expected. Of course, if you invest in Index Funds, you forego
management risk, because these funds do not employ managers
From an investors' viewpoint mutual funds have several advantages such as:





Professional management and research to select quality securities
Spreading risk over a larger quantity of stock whereas the investor has limited to buy
only a hand full of stocks. The investor is not putting all his eggs in one basket
Ability to add funds at set amounts and smaller quantities such as $100 per month
Ability to take advantage of the stock market which has generally out performed other
investment in the long run
Fund manager are able to buy securities in large quantities thus reducing brokerage fees
However there are some disadvantages with mutual funds such as:








The investor must rely on the integrity of the professional fund manager
Fund management fees may be unreasonable for the services rendered
The fund manager may not pass transaction savings to the investor
The fund manager is not liable for poor judgment when the investor's fund loses value
There may be too many transactions in the fund resulting in higher fee/cost to the
investor - This is sometimes call "Churn and Earn"
Prospectus and Annual report are hard to understand
Investor may feel a lost of control of his investment dollars
There may be restrictions on when and how an investor sells/redeems his mutual fund
shares
1. Where do you put your savings?
Stock Market
Govt.Securities
Mutual Funds
Banks
Post Office.
Real Estate
Other
Please specify_____________________________________________
The purpose of this question is to know about where people put their saving and in
which investment options they are more interested.
The analysis show that most of the people aware about the Banks but in current
situation they are also aware about the stock market and mutual funds.
So this point shows that investment related organization like ICICI WEB TRADE
LTD, has market potential to grow their business and influence to spectators about
the current market situation.
1. How do you made your savings and investment plan.
Risk Reduction
Return potential
Affordability
well regulated
Transparency
Tax efficiency
Easy Entry and Exit
S1
RI
SK
RE
DU
CT
IO
N
RE
TU
RN
PO
TE
NT
IA
L
AF
FO
RD
AB
ILI
TY
TR
AN
SP
AR
EN
CY
W
EL
L
RE
G
UL
AT
ED
TA
X
EA
SY
EF
FE
CI
EN
CY
EN
TR
Y
&
EX
IT
The purpose of the question is to know about that how people made their
investment plans .The most of the people do not want to take more risk nut up to a
limit they are ready to take risk for return potential.
So it is a great opportunity to stock market or mutual funds organization to
increase their customers just to influence by their performance and they can
increase their market potential
2. Does age factor affects the investment or savings policy.
(A)Yes
(C) Can’t say.
(B) No
Can't say
6%
No
16%
Yes
78%
The purpose of this question is to know about the various investors’ mental
position about the investment strategy. Different age group people choose their
investment strategy by their age requirement.
The analysis of this question shows that 78% people say that yes Age factor effects
to make a plan for investment.
3. What effects an investor to accept the investment policy of an
organization.
(A) Past Performance
(B) Current Economic Situation
(C)Government Approval
Others Please Specify________________
25
20
22
18
15
10
8
5
0
2
Past
Performance,
T
22
Current
Economic
Situation,8
Government
Approval, 18
Others,2
Series1
The purpose of the question is to know about the attributes of a broking agency
which is being analyze by investors before invest their money through that
organization.
The result shows that the past performance of the organization and government
approval is the two most important factors who effects to make investment
planning strategy before investment.
4. Should government establish an organization that will assure to people
about return and guide about risk?
(A) Yes
NO
(B) No
(C) Can’t say
CAN'T SAY
4%
12%
YES
84%
The purpose of the question is to know about what are the reasons in India that
most of the people do not want to invest their money in stock market or mutual
funds rather banks.
The feedback, which has been found by the recipient shows that the Indian investor
want that government will insure to people about the risk and return. So they are
very conscious about the government approval organization.
5. What are the common errors exist when investors select
their investment plan?
(A) Don’t analyze record
(B) Deceived by brokers
(C) Patience
(D) Can’t say.
CAN’T SAY
4
PATIENCE
2
Series1
DECEIVED BY
BROKERS
6
DON’T ANALYZE
RECORD
0
42
10
20
30
40
50
6. How do you compare investment alternatives on key investment
attributes?
(A) Return
(B) Risk
(C) Future Expectation
(D) Past Record.
25
20
15
10
5
0
Return
Series1
22
Risk
16
Future
Expectation
8
Past
Record
4
7. What attributes of an organization will help to investors to adopt their
policy?
(A) Glimpses
(B) Past Performances.
(C) Government approval
(D) Legitimate Statement
(E) Can’t Say.
CAN'T SAY, 6
GLIMPSES, 7
PAST
LEGITIMATE
STATEMENT, 8
PERFORMANCES, 6
GLIMPSES
PAST PERFORMANCES
GOVERNMENT APPROVAL
LEGITIMATE STATEMENT
CAN'T SAY
GOVERNMENT
APPROVAL, 23
In current situation most of the people are being deceived by the various
investment organizations. So the question has been asked that which is the most
important factor by which investors are being get mental assured for investment.
The result which came to analyze this question by recipient shows that government
approval organization is their first choice for investment
8. Which aspect will attract to investors and speculators to invest their
money in stock market or mutual fund.
(A) Less Risk
(B) More Return
(C) Less Flexibility
(D) Transparent
(E) All of the above
LESS FLEXIBILITY, 3
MORE RETURN, 2
LESS RISK, 3
LESS RISK
MORE RETURN
TANSPARENT, 3
LESS FLEXIBILITY
TANSPARENT
ALL OF THE ABOVE
ALL OF THE
ABOVE, 39
The purpose of this question is that what are the most influence factor to an
investor to accept to an organization. or an investment options .
The market survey shows that most of the people want that an organization should
be less risky, more profitable means there return should be based on return.
They should be transparent in their work and less flexibility.
9. What is the age group who has been targeted to know about the
response of the questionnaire?
AGE:
<25
25-45
46-60
ABOVE 61
Demographic Chart
20
Number
15
10
Series1
5
0
above 61
46- 60
25- 45
< 25
Age -->
This question shows that the age group of recipient who has been targeted to know about the
response of the questionnaire.
It shows that question has been asked by the all category of people, but majority of questions has
been asked by the two category25-45 and 46-60. Because they are more aware about the current
investment situation
10. What type of occupational person are found interested in share market?
OCCUPATION:
SERVICE
SELF EMPLOYED
BUSINESS
HOUSE WIFE
PROFESSIONAL
HOUSE WIFE,4
SELF
EMPLOYED, 5
SERVICE, 14
PROFESSIONAL,9
BUSINESS, 18
The targeted recipient were house wives self employed professional service men and the persons
who are doing their business.
Every kind of investors has been targeted because to know about the mentality of attacking and
defensive investor like wise women of India are defensive investors they don’t want to take more
risk. relatively men.
Business men are professional are want to invest in mutual fund because their risk taking ability
and return potential desire.
11.Chart based on income group:
INCOME:
0-100000
100001-300000
300001-500000
500001 and above
18
16
14
12
10
8
15
16
6
4
10
9
2
0
0-100000
100001-300000
300001-500000
Series1
500001AND
ABOVE
MARKET STRUCTURE
Market structure analysis or segmentation seeks to identify and profile subgroups of a
given population .POPULAS has conducted numerous Segmentation studies for a wide
variety of clients involving a wide range of Products of services and institutions.
POPULAS has been on the cutting edge of development of sophisticated techniques for
the analysis of market segmentation data and graphic presentation of the analytical
results.
Cluster analysis
Cluster analysis is a set of techniques for separating objects into mutually exclusive
groups such that the groups are relatively homogeneous .It is concerned with
classification and is part of the field of the numerical taxonomy.
A problem faced by many user of cluster analysis is that every cluster
analysis always producers clusters where there is underlying structure in the data or not
.given the natural tendency to read meaning into even the most random of patterns that
fact that a solution seems reasonable is no guarantee that the result would be reproducible
with a different sample or a different set of variables.
RISK PRFOFILE OF INVESTORS
The main purpose of this project to check the risk profile of investors
under some circumstances which is risk and return, sex and age, Income and less income
and other factors. Here some important strategy of investors is given.
The investors is classified in two category first is attacking customers and second are
defensive customers.
Especially in India those persons who have high income accept attacking investment and
the person those are lower income group are defensive investors. Women of India are
defensive investors. They prefer less risk relatively high return.
Similarly demographically those persons who live in villages or small towns are
conscious about risk they preferred less flexibility more transparency before investment.
Thus age group people have also their strategy of investment .Generally the age group pf
25-45 want to invest their money in stock market but after 45 to 60 people have desire to
gain more return but they do not want to take direct risk so they preferred investment
mutual fund.
Investors above 60 preferred bank investment or monthly investment in post office
because they want availability as well as safety. They are aware about the risk.
IN DEFENSE OF DEFENSIVE INVESTORS
The investors are generally categorized in two types. Most of the Indian in
Respect of Indian investment strategy, are defensive investors.
Since most of Indians belong from the lower or middle class income group
So they are very cautious about the investment plan. Generally they do not
want to invest their money in stock market or mutual fund because they have
no idea about these types of scheme or the impression of these regulating
body is not impressive.
To consider as many instances one thing found that is common that women
are defensive investors. This is essentially true for India. In the west there
are many studies on behavioral finance show casing varied investment
habits among women across classes.
Defensive investors would get low returns and if invested on almost riskfree assets such as bank deposits governments’ bank deposits, Government
Bonds etc are more less assured or the capital, in times of uncertainty. For
Instance a short tern bank fixed deposit offers a minuscule 6% regular
return but protects your capabilities. On the other hand equity related
Instrument might offer you huge returns, but there is no consistency. In
uncertain times even your capital could be wiped off.
EXPERIENCE AT ADITYA BIRLA MONEY
I had a great learning experience during my 6 weeks training at Aditya Birla Money. I got
to learn about the basics of stock market, equity, mutual funds, and online trading account
and demat account during my training duration. I am sure that these topics will help me a
great deal in comprehending finance more easily during the completion of my MBA
program. Also these 6 weeks corporate exposure will help me face the working challenge
in my future life.
Competitors Analysis helped me to understand the cutthroat competition in the financial
market.
Investment Analysis helped me to understand the mindset of the investors and the attitude
of the investors towards the stock market.
The CRM analysis taught me the various aspects of Customer Relationship Management.
During my training I got to learn how to deal with the customers. My first practical
learning experience was with
Mr. P K Jain SAS Investment Solution Chief Executive Officer(CEO) Noida, Sec-18. He
was a tough client; ask numerous questions which I unable to handle so, quickly I make a
call to my boss who lastly close the deal. Through doing practical my times I gain my
confidence and now I feel quiet comfortable in handling customer individually.
At the end I never forget to indebt my gratitude to industry mentor Mr. Gyanesh Kumar
who constantly gave small inputs from his side to increase my knowledge. All the
members in the branch were very supportive.
CONCLUSION
The project is “COMPRATIVE ANALYSIS BETWEEN MUTUAL FUND OF
ADITYA BIRLA MONEY LTD” So to analyze the marketing research some important
findings have been obtained about the Indian investors and Indian investment
organization. Most of the Indians are aware about high risk and high return. So it is
necessary that government will encourage to investors to invest in Market.
Large census are not well aware of this financial instruments, they only known with the
term mutual & share are something which exit in the market. Traditional person take it as
a speculation .
Lack of awareness is declining the market of such financial product so from my point of
view proper mechanism should be adopted to make learn this census about the product
and make him able to understand the market of such product so that they also penetrate.
Some important findings are that the women are defensive investors and small investors
want to invest their money in banks or post offices. But after research it has found that
the current economic situation and government role people are attracting towards market
investment.
Investment related organization should be transparent and they should be less flexible.
Government should guide to people about the investment Organization and investment
options .Because people are very conscious about the government approval organization.
Because they are ready to take the risk if government is ready to prevent or sustain them.
ADITYA BIRLA MONEY LTD. has a great opportunity to increase their market
potential especially in this market situation. Most of the branded broking agencies are
coped by security exchange board of India due to their illegal works and scams related to
IPO’s.
ADITYA BIRLA MONEY LTD has a unique brand name who assures to people about
the transparent work and obtaining their belief.
RECOMMENDATION
Since the project is related to assess the risk profile of investor and how to increase the
market potential of “ADITYA BIRLA MONEY LTD”. So every precise aspect like risk
taking, influencing factors of investment Organization government role, age, sex income
factors have been analyzed.
Since the problem is related to investors profiles. Market potential of “ADITYA BIRLA
MONEY LTD” therefore some Recommendations are being putted for improvement.
 Investors (especially lower and middle income group should invest some percent
of their income in stock market or mutual fund.
 Investment related organization should be transparent and they should guide to see
the mentality of investors like attacking investors or defensive investors
 Government should monitor the stock market closely and they should provide
some guide to investors about investment
BIBLIOGRAPHY
BOOKS
 PHILIP KOTLER
 CR KOTHARI
WEBSITES
www.Aditya Birlamoney.com
www.Aditya BirlaGroup.com
www.google.com
www.msnsearch.com
www.icicidirect.com
www.indiabulls.com
www.sharekhan.com
www.mutualfund.com
JOURNAL
BUISINESS WORLD
BUSINESS TODAY
OUTLOOK
NEWS PAPER
TIMES OF INDIA
BUSINESS TIMES
ECONOMIC TIMES