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Mutual funds A Case Study and survey at (HDFC Bank branches: Jalandhar City.) Submitted to: Shaheed Udham Si ngh College of Engineering and Technology Tangori (Mohali) Submi tted by: Munish Kapil Roll no. 90692234759 Session (2009-11) Contents
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Mutual funds

A Case Study and survey

at

(HDFC Bank branches: Jalandhar City.)

Submitted to: Shaheed Udham Singh College

of 

Engineering and Technology Tangori (Mohali)

Submitted by: Munish Kapil

Roll no. 90692234759

Session (2009-11)

Contents

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Acknowledgment 3

Student undertaking 4

Executive summery 5

Introduction 7-38

- What is Mutual Fund; 7- History of Mutual Fund in India; 9- Types of mutual funds schemes; 12-  Advantages of Mutual Funds; 17- Disadvantage of Investing Through Mutual Funds; 18- Mutual Fund investment strategies; 19- Performance evaluation; 20- Risk and Return; 25- Tax treatment for unit holder; 29- Mutual fund set up; 33-  AMFI; 33- Tips on buying mutual funds; 36

-  AUM; 37

Company Profile 39-54

- HDFC AMC Nam Dev Choak Jalandhar - Schemes-  Acquisition of standard charted by IDFC

Findings 52- Survey background; 52- Methodology; 52- Findings;53

Conclusion and reconditions 60

Questionnaire 61

Glossary 65

References 67

Acknowledgment

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It took great deal of help, tolerance and understanding on the part of a variety of people and

organizations to prepare this project report. I would particularly thank to Harmeet Sir , Naresh

Sir, Rijju Sir and Manjit sir( HDFC AMC) as they provided me guide line and support during my

training.

My special thanks go to JIMS College and its placement department for providing me such an

opportunity to work with HDFC AMC.

I would also thank to all staff members of different branches of HDFC Bank Ltd. To all the

above and the many colleagues whose ideas and practice I adopted in the project I wish to

express my warmest appreciation for their help and support along the way.

Munish Kapil

Student undertaking

 This is to certify that this project “Mutual Funds : study & survey ” is original work

done for the partial fulfillment for the award of post graduate Degree in business

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management from Shaheed Udham Singh College of Engineering and Technology ,

 Tangori ( Mohali) . I am grateful to Prof.Shaweta Mam , faculty of MBA Department

S.U.S.C.E.T. Tangori

Project guide Student

(HOD Pankaj Mahindroo) (Munish

Kapil)

Executive summary

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 The Indian mutual fund industry in recent years has exponential growth and yet it is

still at a very nascent stage. We believe that the mutual fund industry has grown in

terms of size or choices available, but is a long distance from being regarded as a

mature one. To understand this one has to look at the global scenario. If one look at

the global mutual fund industry, one has see that assets have grown by 185%

between 2000 and 2006. In comparison, Indian assets outgrew at a staggering 446%,

where as the US only grew by 158% and Europe by 242%.

As our economy continues to grow at a spectacular rate there is a huge amount of 

wealth creating opportunities surfacing everywhere. Financial Planners have an

immensely responsible role to play by identifying these opportunities and channeling

them into wealth creating initiatives that would enable people to address their

financial needs. To give an overview of a recent study conducted by Invest India, there

are about 321.8 millions paid workers in India. Of this only 5.3 millions have an

exposure to mutual funds. This is less than 2% of total work force. Even more

interesting fact is that 77% of them reside in super metros and Tier I cities. Again,

about 4 millions come in the Rs 90,000-5 lack income bracket. The penetration amongthe less than Rs 90,000 and more than Rs 5 lack income bracket is very low. The need

for the hour is to expend the market boundaries and expand scope in Tier II and Tier III

cities.

India is also one of the fastest growing markets for mutual funds, attracting a host of 

global players. Hence, investors will have an even wider range of products to choose

from. The combination of the increase in number of fund houses along with new

schemes and the increase in the number of people parking their saving in mutual

funds has resulted in per cent during April-December 2007. This now stands at Rs

30314 billions as against Rs 13476 billions for the corresponding period last year.

As on January 31,2008, Indian assets stood at $ 137 billions and are growing. We

already have many experts expressing their concentration at the frequency of NFO

launches. Yet we have less than 1000 schemes in India, compared to 15000 in the US

and 36000 in Europe. The gap is significant and has to be filled up with unique and

better priced products.

 There has also been a rapid rise in the HNI segment. India stands only second-best to

Korea in the Asia- Pacific region in terms of percentage growth. The total HNWI (High

Net Worth Individual) assets stood at about Rs 12 trillion and their assets aredistributed over various assets classes. To top them MFs will have to come up with

structured products, real estate funds, commodity based funds, art funds and the like.

Indian house holds have also increased their exposure to the capital market. Very

interestingly, the MF proportion in this has increased. In fact, there has been more

than 2000% growth in the assets coming to MFs in the last 3 years. Statistics reveal

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that a higher portion of investors’ savings is now invested in market-linked avenues

like mutual funds as compared to earlier times.

Passing through the growth phase

We have always read that fund industry has seen three phases – the UTI phase, thepublic sector phase and the post – UTI phase. But if we study a bit more closely, there

have been four clear stages.

- UTI Phase (1964 – 1987)

- Public sector phase (1987 – 1993), during which the likes of SBI,BOB and Canara

Bank comes in to existence

-  The emergence phase (1993 – 2003), when international players come in to

India. Some have wound up their operations and a few of them are looking for

re-entry.

- Post UTI phase (2003 – 2007), when domestic players along with some global

players have consolidated the MF industry.

And now we are entering Phase V of the industry, when not only are newer players

readying to enter the market but are also looking at penetration and market

expansion. All in all, this is a win-win situation for Indian investors. We have also come

up a long way from plain vanilla equity funds to hybrid funds, from balanced funds to

arbitrage funds, from sect oral funds to quant strategies.

Changing investor profile

 Today’s investor is quite young and very unlike the older generation. He follows a

contrarian’s approach. How buys when the market flips and books profit when it

rallies. While the market corrected by almost 22% during the January mayhem, mutual

funds were net buyers to the tune of Rs 4,200 crores. Much of this support came from

domestic investors. The retail participation in equity schemes has also increased

tremendously. The total AUM of 330 schemes in December last year stood at Rs 2,157

billions as compared to 197 schemes and Rs92 billions In march 2000. Also in the last

three years, mobilizations from NFOs stood at Rs 95,000 crores. Although manycomplain that the industry is still brokerage driven, the trends clearly suggest that

investors prefer NFOs to enter equities.

Our economy is booming, we have now a sustained GDP growth of 8%, which is likely

to remain at this level for years to come, our per capita income is about to touch $

1000 by the end of 2008. The number of AMCs is increasing. Their presence across

India is expending. Distributors too are expanding their networks. Besides, the

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benefits that come from the ownership of a diversified portfolio of securities chosen

and monitored daily by experience, professional advisers.

 The funds create and sell new shares on demand. Investors` shares represent a

portion of the fund’s portfolio and income proportional to the number of shares they

purchase. Individual shareholders of the mutual funds have voting rights in the

operation of the fund, just as most holders of common stocks in corporations have the

right to vote on certain issues involving the running of the company. The key attributeof a mutual fund, regardless of how it is structured, is that the investor is entitled to

receive on demand, or within a specified period after demand, an amount computed

by reference to the value of the investor’s proportionate interest in the net assets of 

the mutual fund. This means that the owner of mutual fund shares can "cash in," or

redeem his or her shares at any time.

Mutual funds, therefore, are considered a liquid investment. The investor’s selling

(redemption) price may be higher or lower than the purchase price. It all depends on

the performance of the fund’s portfolio. The fund has an adviser who charges a fee for

managing the portfolio. The adviser decides when and what securities to buy and sell,

and is responsible for providing or causing to be provided all services required by the

mutual fund in carrying on its day-to-day activities. All fund investors get this built-in

portfolio management whether they own 50 shares or 10,000.The adviser generally

purchases many different securities for the portfolio, since investment theory holds

that diversification reduces risk. It is this diminished risk that is one of the attractions

of mutual funds. The fund also has a custodian, usually a financial institution such as a

bank, which holds all cash and securities for the fund.

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Phase 1. Establishment and Growth of Unit Trust of India- 1964-87

Unit Trust of India enjoyed complete monopoly when it was established in the year1963 by an act of Parliament. UTI was set up by the Reserve Bank of India and itcontinued to operate under the regulatory control of the RBI until the two were de-linked in 1978 and the entire control was transferred in the hands of IndustrialDevelopment Bank of India (IDBI). UTI launched its first scheme in 1964, named asUnit Scheme 1964 (US-64), which attracted the largest number of investors in anysingle investment scheme over the years.

UTI launched more innovative schemes in 1970s and 80s to suit the needs of differentinvestors. It launched ULIP in 1971, six more schemes between 1981-84, Children'sGift Growth Fund and India Fund (India's first offshore fund) in 1986, Master share

(India’s first equity diversified scheme) in 1987 and Monthly Income Schemes (offeringassured returns) during 1990s. By the end of 1987, UTI's assets under managementgrew ten times to Rs 6700 crores.

Phase II. Entry of Public Sector Funds - 1987-1993

 The Indian mutual fund industry witnessed a number of public sector players enteringthe market in the year 1987. In November 1987, SBI Mutual Fund from the State Bankof India became the first non-UTI mutual fund in India. SBI Mutual Fund was laterfollowed by Canbank Mutual Fund, LIC Mutual Fund, Indian Bank Mutual Fund, Bank of India Mutual Fund, GIC Mutual Fund and PNB Mutual Fund. By 1993, the assets undermanagement of the industry increased seven times to Rs. 47,004 crores. However, UTIremained to be the leader with about 80% market share.

1992-93

AmountMobilise

d

AssetsUnderManagement

Mobilisationas %

of gross

Domestic

Saving

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s

UTI11,0

5738,247 5.2%

Publ

icSector

1,964 8,757 0.9%

Total

13,021

47,004 6.1%

Phase III. Emergence of Private Sector Funds - 1993-96

 The permission given to private sector funds including foreign fund managementcompanies (most of them entering through joint ventures with Indian promoters) toenter the mutual fund industry in 1993, provided a wide range of choice to investorsand more competition in the industry. Private funds introduced innovative products,investment techniques and investor-servicing technology. By 1994-95, about 11private sector funds had launched their schemes.

Phase IV. Growth and SEBI Regulation - 1996-2004

 The mutual fund industry witnessed robust growth and stricter regulation from theSEBI after the year 1996. The mobilization of funds and the number of playersoperating in the industry reached new heights as investors started showing moreinterest in mutual funds.

Inventors’ interests were safeguarded by SEBI and the Government offered taxbenefits to the investors in order to encourage them. SEBI (Mutual Funds) Regulations,1996 was introduced by SEBI that set uniform standards for all mutual funds in India. The Union Budget in 1999 exempted all dividend incomes in the hands of investorsfrom income tax. Various Investor Awareness Programmes were launched during this

phase, both by SEBI and AMFI, with an objective to educate investors and make theminformed about the mutual fund industry.

In February 2003, the UTI Act was repealed and UTI was stripped of its Special legalstatus as a trust formed by an Act of Parliament. The primary objective behind thiswas to bring all mutual fund players on the same level. UTI was re-organized into twoparts: 1. The Specified Undertaking, 2. The UTI Mutual Fund

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Phase V. Growth and Consolidation - 2004 Onwards

 The industry has also witnessed several mergers and acquisitions recently, examples

of which are acquisition of schemes of Alliance Mutual Fund by Birla Sun Life, Sun F&CMutual Fund and PNB Mutual Fund by Principal Mutual Fund. Simultaneously, more

international mutual fund players have entered India like Fidelity, Franklin Templeton

Mutual Fund etc. There were 29 funds as at the end of March 2006. This is a continuing

phase of growth of the industry through consolidation and entry of new international

and private sector players.

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Types of mutual funds

1. Schemes according to Maturity Period:-

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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. eitherrepurchase facility or through listing on stock exchanges

 These mutual funds schemes disclose NAV generally on

weekly basis.

2. 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

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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 limitedin 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 provideeasy 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

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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 economicfactors as is 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 withthe 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.

3. 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.

4. 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 forinvestment 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.

5. Fund of Funds (FoF) scheme:-

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A scheme that invests primarily in other schemes of the same mutual fund

or other mutual funds is known as a FoF scheme. An FoF scheme enables

the investors to achieve greater diversification through one scheme. It

spreads risks across a greater universe.

6. 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 whichare 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.

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ADVANTAGES OF MUTUAL FUND 

S.

No.Advantage Particulars

1.

Portfolio

Diversifica

tion

Mutual Funds invest in a well-diversified portfolio of securities which enables

investor to hold a diversified investment portfolio (whether the amount of 

investment is big or small).

2.

Profession

al

Manageme

nt

Fund manager undergoes through various research works and has better

investment management skills which ensure higher returns to the investor than

what he can manage on his own.

3. Less Risk

Investors acquire a diversified portfolio of securities even with a small

investment in a Mutual Fund. The risk in a diversified portfolio is lesser than

investing in merely 2 or 3 securities.

4.

Low

Transactio

n Costs

Due to the economies of scale (benefits of larger volumes), mutual funds pay

lesser transaction costs. These benefits are passed on to the investors.

5. LiquidityAn investor may not be able to sell some of the shares held by him very easily

and quickly, whereas units of a mutual fund are far more liquid.

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6.Choice of 

Schemes

Mutual funds provide investors with various schemes with different investment

objectives. Investors have the option of investing in a scheme having a

correlation between its investment objectives and their own financial goals.

These schemes further have different plans/options

7.Transpare

ncy

Funds provide investors with updated information pertaining to the markets and

the schemes. All material facts are disclosed to investors as required by the

regulator.

8. Flexibility

Investors also benefit from the convenience and flexibility offered by Mutual

Funds. Investors can switch their holdings from a debt scheme to an equity

scheme and vice-versa. Option of systematic (at regular intervals) investment

and withdrawal is also offered to the investors in most open-end schemes.

9. Safety

Mutual Fund industry is part of a well-regulated investment environment where

the interests of the investors are protected by the regulator. All funds are

registered with SEBI and complete transparency is forced.

Disadvantage of Investing Through Mutual Funds

S.

No.

Disadvanta

geParticulars

1.

Costs

Control Not

in the

Hands of 

an

Investor

Investor has to pay investment management fees and fund distribution costs

as a percentage of the value of his investments (as long as he holds the

units), irrespective of the performance of the fund.

2.

No

Customize

d Portfolios

The portfolio of securities in which a fund invests is a decision taken by the

fund manager. Investors have no right to interfere in the decision making

process of a fund manager, which some investors find as a constraint in

achieving their financial objectives.

3.

Difficulty

in

Selecting a

Suitable

Fund

Scheme

Many investors find it difficult to select one option from the plethora of 

funds/schemes/plans available. For this, they may have to take advice from

financial planners in order to invest in the right fund to achieve their

objectives.

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Mutual Fund Investment Strategies

Systematic Investment Plan (SIPs): 

 These are best suited for young people who have started their careers and need to btheir wealth. SIPs entail an investor to invest a fixed sum of money at regular intervamutual fund scheme the investor has chosen. For instance an investor opting for SIP inmutual fund scheme will need to invest a certain sum of money every month / qua/half year in the scheme.

Systematic Withdrawal Plan (SWPs):

These plans are best suited for people nearing retirement. In these plans an inveinvests in a mutual fund scheme and is allowed to withdraw a fixed sum of moneyregular intervals to take care of expenses.

Systematic Transfer Plan (STPs) :

They allow the investors to transfer on a periodic basis a specified amount from scheme to another within the same fund family meaning two schemes belonging tosame mutual fund. A transfer will be treated as redemption of units from the scheme fwhich the transfer is made .Such redemption or investment will be at the applicable N  This service allows the investor to manage his investment actively to achieve

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objectives. Many funds do not even charge even any transaction feed for this serviceadded advantage for the active investor.

Performance Evaluation

PARAMETERS OF MUTUAL FUND EVALUATION:

Risk 

Returns

Liquidity 

Expense Ratio

Composition of Portfolio

Risks Associated With Mutual Funds

Investing in mutual funds as with any security, does not come without risk. One ofmost basic economic principles is that risk and reward are directly correlated. In owords, the greater the potential risk, the greater the potential return. The types of commonly associated with mutual funds are:

Market Risk: 

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Market risk relate to the market value of a security in the future. Market prices fluctuand are susceptible to economic and financial trends, supply and demand, and mother factors that cannot be precisely predicted or controlled.

Political Risk:

Changes in the tax laws, trade regulations, administered prices etc. is some of the m

political factors that create market risk. Although collectively, as citizens, we have indcontrol through the power of our vote, individually as investors, we have virtuallycontrol.

Inflation Risk:

Inflation or purchasing power risk, relates to the uncertainty of the future purchaspower of the invested rupees. The risk is the increase in cost of the goods and servicesmeasured by the Consumer Price Index.

Interest Rate Risk:

Interest Rate risk relates to the future changes in interest rates. For instance, iinvestor invests in a long term debt mutual fund scheme and interest rate increase,NAV of the scheme will fall because the scheme will be end up holding debt offelowest interest rates.

Business Risk:

Business Risk is the uncertainty concerning the future existence, stability and profitabof the issuer of the security. Business Risk is inherent in all business ventures. The fufinancial stability of a company can not be predicted or guaranteed, nor can the pricits securities. Adverse changes in business circumstances will reduce the market pricthe company’s equity resulting in proportionate fall in the NAV of mutual fund schewhich has invested in the equity of such a company.

Economic Risk :

Economic Risk involves uncertainty in the economy, which, in turn can haveadverse effect on a company’s business. For instance, if monsoons fall in a year, eqstocks of agriculture bases companies will fall and NAVs of mutual funds, which hinvested in such stocks, will fall proportionately. There are 3 different methods with the help of which we can measure the risk.

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Measurement of risk 

I. Beta Coefficient Measure Of Risk :

Beta relates a fund’s return with a market index. It basically measures the sensitivitfunds return to changes in market index.If Beta = 1Fund moves with the market i.e. Passive fundIf Beta < 1Fund is less volatile than the market i. e Defensive FundIf Beta > 1Funds will give higher returns when market rises & higher losses when market fallsAggressive Fund

II. Ex –Marks or R-squared Measure Of Risk :

Ex –Marks represents co relation with markets. Higher the Ex-marks lower the risk offund because a fund with higher Ex-marks is better diversified than a fund with lowermarks.

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III. Standard Deviation Measure Of Risk :

It is a statistical concept, which measures volatility. It measures the fluctuations of fureturns around a mean level. Basically it gives you an idea of how volatile your earnare. It is broader concept than BETA. It also helps in measuring total risk and not justmarket risk of the portfolio.

How to Calculate the Value of a Mutual Fund:

 The investors’ funds are deployed in a portfolio of securities by the fund manager. value of these investments keeps changing as the market price of the securities chaSince investors are free to enter and exit the fund at any time, it is essential that market value of their investments is used to determine the price at which such entry exit will take place. The net assets represent the market value of assets, which belonthe investors, on a given date.Net Asset Value or NAV of a mutual fund is the value of one unit of investment in the fu

in net asset terms.

NAV = Net Assets of the scheme / Number of Units Outstanding

Where Net Assets are calculated as:-

(Market value of investments + current assets and other assets + Accrued incomcurrent liabilities and other liabilities – less accrued expenses) / No. of Units Outstanas at the NAV date

NAV of all schemes must be calculated and published at least weekly for closed-

schemes and daily for open-end schemes.

The major factors affecting the NAV of a fund are:

Sale and purchase of securities Sale and repurchase of units Valuation of assets Accrual of income and expenses

SEBI requires that the fund must ensure that repurchase price is not lower than 93%

NAV (95% in the case of a closed-fund). On the other side, a fund may sell new units price that is different from the NAV, but the sale price cannot be higher than 107 %NAV. Also the difference between the repurchase price and the sale price of the unit ispermitted to exceed 7% of the sale price.

Measuring Mutual Fund Performance:We can measure mutual fund’s performance by different method:

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• Absolute Return Method:

Percentage change in NAV is an absolute measure of return, which finds the appreciation between two points of time, as a percentage.e .g: If NAV of one fund changes from Rs.20 to Rs.22 in 12 months then Absolute return = (22 – 20)/20 X 100 =10%

• Simple Annual Return Method :

Converting a return value for a period other than one year, into a value for one yeacalled as annualisation. In order to annualize a rate, we find out what the return wouldfor a year, if the return behaved for a year, in the same manner it did, for any otfractional period.E .g: If NAV of one fund changes from Rs.20 to Rs.22 in 6 months thenAnnual Return = (22 – 20) /20 X 12/6 X 100 = 20%

• Total Return Method:

 The total return method takes into account the dividends distributed by the mutual fuand adds it to the NAV appreciation, to arrive at returns.Total Return =(Dividend distributed + Change in NAV)/ NAV at the start X 100e .g: If NAV of one fund changes from Rs.20 to Rs.22 in 6 months if in between dividenRs. 4 has been distributed thenTotal Return = {4 + (22 – 20)}/20 X 100 = 30%

• Total Return when dividend is reinvested:

 This method is also called the return on investment (ROI) method. In this method,dividends are reinvested into the scheme as soon as they are received at the tprevailing NAV (ex-dividend NAV).= ((Value of holdings at the end of the period/ value of the holdings at the beginnin1)*100E.g. An investor buys 100 units of a fund at Rs. 10.5 on January 1, 2007. On June 30, 2he receives dividends at the rate of 10%. The ex-dividend NAV was Rs. 10.25.

December 31, 2007, the fund’s NAV was Rs. 12.25.Value of holdings at the beginning period= 10.5*100= 1050Number of units re-invested = 100/10.25 = 9.756

End period value of investment = 109.756*12.25 = 1344.51 Rs.Return on Investment = ((1344.51/1050)-1)*100

= 28.05%

• Compounded Average Annual Return Method:

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  This method is basically used for calculating the return for more than 1 year. In method return is calculated with the following formula:

A = P X (1 + R / 100) N

Where P = Principal investedA = maturity valueN = period of investment in yearsR = Annualized compounded interest rate in %

R = {(Nth root of A / P) – 1} X 100E. g: If amount invested is Rs. 100 & in the end we get return of Rs. 200 & perioinvestment is 10 years then annualized compounded return is

200 = 100 (1 + R / 100) 10 Rate = 7.2 %

RETURNS:

Returns have to be studied along with the risk. A fund could have earned higher retthan the benchmark. But such higher return may be accompanied by high risk. Therefwe have to compare funds with the benchmarks, on a risk adjusted basis. William Shacreated a metric for fund performance, which enables the ranking of funds on a adjusted basis.

Sharpe Ratio = Risk PremiumFunds Standard DeviationTreynor Ratio = Risk Premium

Funds BetaRisk Premium = Difference between the Fund’s Average return and Risk free returngovernment security or treasury bill over a given period .

LIQUIDITY :

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Most of the funds being sold today are open-ended. That is, investors can sell texisting units, or buy new units, at any point of time, at prices that are related to the Nof the fund on the date of the transaction. Since investors continuously enter and funds, funds are actually able to provide liquidity to investors, even if the underlymarkets, in which the portfolio is invested, may not have the liquidity that the inveseeks.

EXPENSE RATIO:

Expense ratio is defined as the ratio of total expenses of the fund to the averageassets of the fund. Expense ratio can actually understate the total expenses, becabrokerage paid on transactions of a fund are not included in the expenses. Accordinthe current SEBI norms, brokerage commissions are capitalized and included in the cothe transactions.

Expense ratio = Total ExpensesAverage Net Assets

COMPOSITION OF THE PORTFOLIO:

Credit quality of the portfolio is measured by looking at the credit ratings of investments in the portfolio. Mutual Fund fact sheets show the composition of the portand the investments in various asset classes over time.Portfolio turnover rate is the ratio of lesser of asset purchased or sold by funds inmarket to the net assets of the fund.If Portfolio ratio is 100% means portfolio has been changed fully. When Portfolio rat

high means expense ratio is high.

Portfolio Ratio = Total Sales & PurchaseNet Assets of fund

In order to meaningfully compare funds some level of similarity in the following factors to be ensured:

Size of the funds Investment objective Risk profile Portfolio composition Expense ratios

Fund evaluation against benchmark :

Funds can be evaluated against some performance indicators which are knownbenchmarks.

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 There are 3 types of benchmarks: Relative to market as whole Relative to other comparable financial products Relative to other mutual funds

Relative to market as whole:

 There are different ways to measure the performance of fund w.r.t market asEquity Funds

• Index Fund – An Index fund invests in the stock comprising of the index in thesame ratio. This is a passive management style.

For example,

Market Index Fund - BSE Sensex

Nifty Index Fund - NIFTY

 The difference between the return of this fund and its index benchmark can be explaby “TRACKING ERROR”.

• Active Equity Funds: The fund manager actively manages this fund. To evaluate performance in such casehave to select an appropriate benchmark.

Large diversified equity fund - BSE 100

Sector fund - Sectoral Indices

• Debt Funds:Debt fund can also be judged against a debt market index e.g. I-BEX

Relative to other comparable financial products:

Schemes ReturnConvenience

Safety Volatility Liquidity

Equity HighModerate

Low High High

FI Bonds Moderate High Moderate Moderate

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High

CorporateDebentures

ModerateLow

Moderate Moderate Low

Company FixedDeposits

ModerateModerate

Low Low Low

Bank Deposits LowHigh

High Low High

PPF ModerateHigh

High Low Moderate

Life Insurance LowModerate

High Low Low

Gold ModerateLow

High Moderate Moderate

Real Estate HighLow

Moderate High Low

Mutual Funds HighHigh

High Moderate High

Schemes InvestmentObjective

Risk Tolerance

InvestmentHorizon

Equity Term Capital Appreciation High Long

FI Bonds Income Low Medium to Long term

CorporateDebentures

Income High Moderate Medium to Long term

Company FixedDeposits

Income Moderate Low Medium

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Bank Deposits Income Generally Flexible all terms

PPF Income Low Long

Life Insurance Risk Cover Low Long

Gold Inflation Hedge Low Long

Real Estate Inflation Hedge Low Long

TAX TREATMENT FOR THE INVESTORS (UNITHOLDERS):-

Tax benefits of investing in the Mutual Fund

As per the taxation laws in force as at the date of the Offer Document, some broadincome tax implications of investing in the units of the Scheme are stated below. Theinformation so stated is based on the Mutual Fund's understanding of the tax laws inforce as of the date of the Offer Document, which have been confirmed by its auditors The information stated below is only for the purposes of providing general informationto the investors and is neither designed nor intended tobe a substitute for professionatax advice. As the tax consequences are specific to each investor and in view of thechanging tax laws, each investor is advised to consult his or her or its own taxconsultant with respect to the specific tax implications arising out of his or her or itsparticipation in the Scheme.

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Implications of the Income-tax Act, 1961 as amended by the Finance Act, 2006

To the Unit holders

(a.) Tax on Income

In accordance with the provisions of section 10(35)(a) of the Act, income received by

all categories of unit holders in respect of units of the Fund will be exempt fromincome-tax in their hands.Exemption from income tax under section 10(35) of the Act would, however, not applyto any income arising from the transfer of these units.

(b.) Tax on capital gains:

As per the provisions of section 2(42A) of the Act, a unit of a Mutual Fund, held by theinvestor as a capital asset, is considered to be a short-term capital asset, if it is heldfor 12 months or less from the date of its acquisition by the unit holder. Accordingly, ifthe unit is held for a period of more than 12 months, it is treated as a long-term capita

asset.

Computation of capital gainCapital gains on transfer of units will be

computed after taking into account the cost of their acquisition. While calculating long-term capital gains, such cost will be indexed by using the cost inflation index notifiedby the Government of India.

Individuals and HUFs, are granted a deductionfrom total income, under section 80C of the Act upto Rs. 100,000, in respect ofspecified investments made during the year (please also refer paragraph d).

Long-term capital gainsAs per Section 10(38) of the Act, long-term

capital gains arising from the sale of unit of an equity oriented fund entered into in arecognized stock exchange or sale of such unit of an equity oriented fund to themutual fund would be exempt from income-tax, provided such transaction of sale ischargeable to securities transaction tax.

Pursuant to an amendment made in theFinance Act, 2006, effective 1 April 2006, companies would be required to include suchlong term capital gains in computing the book profits and minimum alternated taxliability under section 115JB of the Act.

Short -term capital gainsAs per Section 111A of the Act, short-term

capital gains from the sale of unit of an equity oriented fund entered into in arecognized stock exchange or sale of such unit of an equity oriented fund to the

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mutual fund would be taxed at 10 per cent, provided such transaction of sale ischargeable to securities transaction tax.

 The said tax rate would be increased by a surcharge of:- 10 per cent in case of non-corporate Unit holders, where the total income exceedsRs.1,000,000,- 10 per cent in case of resident corporate Unit holders, and

- 2.5 per cent in case of non-resident corporate unit holders irrespective of the amountof taxable income.

Further, an additional surcharge of 2 per cent byway of education cess would be charged on amount of tax inclusive of surcharge.

In case of resident individual, if the income fromshort term capital gains is less than the maximum amount not chargeable to tax, thenthere will be no tax payable. 

Further, in case of individuals/ HUFs, being residents, where the total incomeexcluding short-term capital gains is below the maximum amount not chargeable to

tax1, then the difference between the current maximum amount not chargeable to taxand total income excluding short-term capital gains, shall be adjusted from short-termcapital gains. Therefore only the balance short term capital gains will be liable toincome tax at the rate of 10 percent plus surcharge, if applicable and education cess.

Non-residentsIn case of non-resident unit holder who is a

resident of a country with which India has signed a Double Taxation AvoidanceAgreement (which is in force) income tax is payable at the rates provided in the Act,as discussed above, or the rates provided in the such agreement, if any, whichever ismore beneficial to such non-resident unit holder.

Investment by MinorsWhere sale / repurchase is made during the

minority of the child, tax will be levied on either of the parents, whose income isgreater, where the said income is not covered by the exception in the proviso tosection 64(1A) of the Act. When the child attains majority, such tax liability will be onthe child.

Losses arising from sale of units

- As per the provisions of section 94(7) of the Act, loss arising on transfeof units, which are acquired within a period of three months prior to therecord date (date fixed by the Fund for the purposes of entitlement of theunit holder to receive the income from units) and sold within a period ofnine months after the record date, shall not be allowed to the extent ofincome distributed by the Fund in respect of such units.

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- No tax is required is to be withheld from long term capital gains arisingfrom sale of units in equity oriented fund schemes, that are subject tosecurities transaction tax.

- In respect of short-term capital gains arising to foreign companies(including Overseas Corporate Bodies), the Fund is required to deduct taxat source at the rate of 10.46 per cent (10 per cent tax plus 2.5 per cent

surcharge thereon plus additional surcharge of 2 per cent by way oeducation cess on the tax plus surcharge). In respect of short-term capitagains arising to non-resident individual unit holders, the Fund is required todeduct tax at source at the rate of 11.22 per cent (10 per cent tax plus 10per cent surcharge thereon2 plus additional surcharge of 2 per cent byway of education cess on the tax plus surcharge).

(d.) Wealth Tax

Units held under the Schemes of the Fund are not treated as assetswithin the meaning of section 2(ea) of the Wealth Tax Act, 1957 and therefore, not

liable to wealth-tax.

(e.) Securities Transaction Tax

Nature of Transaction Current tax rate Tax rate effective (%) 1 June2006 (%) Delivery based purchase transaction in equity shares or units of equityoriented fund entered in a recognized stock exchange 0.1 0.125 Delivery based saletransaction in equity shares or units of equity oriented fund entered in a recognizedstock exchange 0.1 0.125 Non-delivery based sale transaction in equity shares or unitsof equity oriented fund entered in a recognized stock exchange. 0.02 0.025 Sale ofunits of an equity oriented fund to the mutual fund 0.2 0.25 Value of taxable securities

transaction in case of units shall be the price at which such units are purchased orsold.

A deduction in respect of securities transaction taxpaid is not permitted for the purpose of computation of business income or capitagains.

However, if the total income of an assesseeincludes any business income arising from taxable securities transactions, he shall beentitled to a rebate3 from income-tax of an amount equal to the securities transactiontax paid by him in respect of the taxable securities transactions entered during thecourse of his business.

The maximum amounts of total income, not chargeable to tax are as under: Type of person Maximum amount of income not chargeable to tax

Women Rs. 135,000Senior citizens Rs. 185,000Other individuals and HUFs Rs. 100,000

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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 mutualfund 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 arerequired to be registered with SEBI before they launch any scheme.

Association of Mutual Funds in India (AMFI)

With the increase in mutual fund players in India, a need for mutual fund association in

India was generated to function as a non-profit organization. Association of Mutual

Funds in India (AMFI) was incorporated on 22nd August, 1995.AMFI is an apex body of 

all Asset Management Companies (AMC) which has been registered with SEBI. Till dateall the AMCs are that have launched mutual fund schemes are its members. It

functions under the supervision and guidelines of its Board of Directors.

Association of Mutual Funds India has brought down the Indian Mutual Fund Industry to

a professional and healthy market with ethical lines enhancing and maintaining

standards. It follows the principle of both protecting and promoting the interests of 

mutual funds as well as their unit holders.

The objectives of Association of Mutual Funds in India: ---

 The Association of Mutual Funds of India works with 30 registered AMCs of the countryIt has certain defined objectives which juxtaposes the guidelines of its Board of 

Directors. The objectives are as follows:-

 This mutual fund association of India maintains a high professional and

ethical standard in all areas of operation of the industry.

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It also recommends and promotes the top class business practices and code

of conduct which is followed by members and related people engaged in the

activities of mutual fund and asset management. The agencies who are by

any means connected or involved in the field of capital markets and financial

services also involved in this code of conduct of the association.

AMFI interacts with SEBI and works according to SEBIs guidelines in themutual fund industry.

Associations of Mutual Fund of India do represent the Government of India,

the Reserve Bank of India and other related bodies on matters relating to the

Mutual Fund Industry.

It develops a team of well qualified and trained Agent distributors. It

implements a programme of training and certification for all intermediaries

and other engaged in the mutual fund industry.

AMFI undertakes all India awareness programme for investors in order topromote proper understanding of the concept and working of mutual funds.

At last but not the least association of mutual fund of India also disseminate

information on Mutual Fund Industry and undertakes studies and research either

directly or in association with other bodies.

The sponsorers of  Association of Mutual Funds in India :---

- Bank Sponsored

- SBI Fund Management Ltd.

- BOB Asset Management Co. Ltd.

- Canara bank Investment Management Services Ltd.

- UTI Asset Management Company Pvt. Ltd.

Institutions -

- GIC Asset Management Co. Ltd.

- Jeevan Bima Sahayog Asset Management Co. Ltd.

Private Sector: -

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- Morgan Stanley Investment Management Pvt. Ltd.

- Principal Asset Management Co. Pvt. Ltd.

- Prudential ICICI Asset Management Co. Ltd.

- Standard Chartered Asset Mgmt Co. Pvt. Ltd.

 Tips on buying mutual funds:-

1. Determine your financial objectives and how much money you have to invest. Make

sure the fund’s objectives coincide with your own. Don’t change your objectives or

exceed the amount set aside for investment unless you have good reason.

2. Always obtain all available information before you invest. Request the prospectus,

the Statement of Additional Information and the latest shareholder report from eachfund you are considering.

3. Never invest in periodic payment plans unless you are virtually certain that you will

not have to redeem early. If you redeem early or do not complete the plan, you may

have to pay sales charges of up to 51% of your investment.

4. Be on the alert for incorporation by reference. You will have "no excuse" for not

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knowing this information, if a problem arises. You may be legally presumed to know

materials incorporated by reference in a prospectus or other documents.

5. Always determine all sales charges, fees and expenses before you invest. Fees such

as 12b-1 fees can cost you dearly and charges for reinvestment of dividends and

capital gains distributions can substantially add to your costs. Shop around among the

many funds offered and compare the various fees and costs connected with funds thatappeal to you.

6. Learn the costs of redemption. Sometimes investors are surprised to learn that they

have to pay to get out of funds through back-end loads or redemption fees. Find out

the redemption costs before you invest so you won’t be unpleasantly surprised when

you redeem your shares.

7. Never treat the risks of investment in a fund lightly. Weigh the risks of the funds you

want to buy against your ability to tolerate the ups and downs of the market and your

investment goals. Be extra cautious when considering investing in funds with highyield/high risk portfolios. Junk bond problems, for example, invariably affect the fund’s

performance.

8. Don’t be misled by the name of a fund. Some funds have been given names

denoting safety, stability and low risk, despite the fact that the underlying investments

in the portfolio are volatile and highly risky.

AUM

Assets Under Management (AUM) as at the end of May-2008 (Rs in

Lakhs)

Mutual Fund Name Average AUM For The Month

Excluding Fundof Funds -

Domestic butincluding Fund

of Funds -

Fund Of Funds -Domestic

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Overseas

1. ABN AMRO Mutual Fund 592459.08 20979.02

2. AIG Global Investment Group MutualFund

456809.8 0

3. Benchmark Mutual Fund 280241.84 0

4. Bharti AXA Mutual Fund N/A N/A

5. Birla Sun Life Mutual Fund 4142342.8 1854.08

6. BOB Mutual Fund 6776.69 07. Canara Robeco Mutual Fund 420417.41 0

8. DBS Chola Mutual Fund 185289.01 0

9. Deutsche Mutual Fund 1240531.71 0

10. DSP Merrill Lynch Mutual Fund 2155962.79 0

11. Edelweiss Mutual Fund N/A N/A

12. Escorts Mutual Fund 17065.31 0

13. Fidelity Mutual Fund 887973.14 2763.41

14. Franklin Templeton Mutual Fund 2799087.37 23660.71

15. HDFC Mutual Fund 5610729.27 0

16. HSBC Mutual Fund 1847223.18 0

17. ICICI Prudential Mutual Fund 5906002.34 3359.41

18. IDFC Mutual Fund 1427291.26 3776.66

19. ING Mutual Fund 916079.34 47916.62

20. JM Financial Mutual Fund 1296780.93 0

21. JPMorgan Mutual Fund 273018.18 0

22. Kotak Mahindra Mutual Fund 2217001.56 30651.82

23. LIC Mutual Fund 1864914.45 0

24. Lotus India Mutual Fund 788330.4 0

25. Mirae Asset Mutual Fund 216037.01 0

26. Morgan Stanley Mutual Fund 350997.47 0

27. PRINCIPAL Mutual Fund 1670542.76 0

28. Quantum Mutual Fund 6632.78 0

29. Reliance Mutual Fund 9843093.38 0

30. Sahara Mutual Fund 19814.33 0

31. SBI Mutual Fund 3179496.78 0

32. Sundaram BNP Paribas Mutual Fund 1459384.72 0

33. Tata Mutual Fund 2449586.66 0

34. Taurus Mutual Fund 33550.65 0

35. UTI Mutual Fund 5465168.28 0

Grand Total 60026632.68 134961.73

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Company profile:

About Standard Chartered Mutual Fund

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Standard Chartered Mutual Fund is well-established fund house and is sponsored by

the Standard Chartered Group. At Standard Chartered Mutual Fund we strive to launch

not just innovative products, but products that truly add value to our investors. We

were among the first to launch an active management debt fund-the Dynamic Bond

Fund - that had the capability to mimic a cash fund or an income fund depending on

market situations. The Short term and Medium term funds that were uniquely

positioned at various points along the interest rate curve with the sole objective of maximizing value to investors with different investment time horizons.

Lately this innovation was again brought to the fore with the launch of the Standard

Chartered Enterprise Equity Fund, a close-ended fund that sought to invest a portion in

Equity IPOs. The fund also launched the Standard Chartered Premier Equity fund an

equity fund that seeks to generate wealth by investing in relatively smaller companies.

We manage our schemes through well-researched and thoroughly tested processes

like the 3 D Factor (For debt funds and helps us in predicting interest rate movements)

and the Equity Circle process. SCMF also pioneered several service initiatives that

helped increase transactional ease. It was the first mutual fund to initiate

Across the counter redemptions for all classes of investors in liquid funds,

Toll Free No accessible in 976 cities

Phone transact service wherein investors can redeem without having any

Personal Identification Number

Standard Chartered Mutual Fund currently manages assets in excess of Rs 15801.53Cr

as on 5th February 2008 and has touched the lives of more than lakhs of investors

residing in more than 1000 Indian towns.

Schemes ManagedScheme NameGrindlays Cash Fund (G)

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Grindlays CF - Inst Plan (G)

Grindlays Dynamic Bond (G)

Grindlays FRF - LTP Inst (G)

Grindlays Floating Rate (G)

Grindlays FRF- Inst Plan (G)

Grindlays FRF - LTP (RP) (G)

Grindlays GSec - Inv Plan (G)Grindlays GSec Fund - PF (G)

Grindlays GSec - STP (G)

Grindlays SSIF - MTP A (G)

Grindlays SSIF STP - Inst (G)

GSSIF STP - MF Plan C (G)

GSSIF STP - Super Inst C (G)

Grindlays SSIF (G)

Grindlays SSIF - STP (G)

SC All Seasons Bond - RP (G)

StanChart Arbitrage - Inst (G)

StanChart Arbitrage Fund (G)

StanChart Classic Equity (G)

StanChart Enterprise Equity(G)

StanChart Imperial Equity (G)

StanChart Imperial Equity (G)

StanChart Liquidity Manager –G

StanChart Liq. Manager Plus-G

StanChart Premier Equity (G)

StanChart Small&Midcap Eqty –G

StanChart Tax Saver Fund (G)

HDFC Asset Management Company Private Ltd

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 The fund was established on March 13, 2000. Now the management of the fund has

been taken over by Standard Chartered Bank, the UK based banking conglomerate.

 The name of the AMC too has been changed from ANZ AMC. Previously sponsored by

ANZ Banking Group, Australia, this fund has just set up its operations in the year 2000.

Australia and New Zealand Banking Group Limited, the previous sponsor of the fund, is

a leading international bank and is also one of the "Big Four" Australian commercial

banks providing a full range of banking and financial services with total assets of US $97.35 billion as on 30th Sept, 1999. ANZ Funds Management is a core business unit of 

the group and is one of Australia s large fund managers. It has a full range of 

investment products and services managing more than AUD $ 13267.7 million in

customer funds on 30th Sept., 1999. ANZ Banking Group has significant presence in

35 nations from the Middle East through South Asia and East Asia to the Pacific.

No. of schemes 84

No. of schemes includingoptions

269

Equity Schemes 24

Debt Schemes 209

Short term debt Schemes 19

Equity & Debt 0

Money Market 0

Gilt Fund 13

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Open Ended Schemes

Scheme Name

Performance ( % Return )

Fund Size

As On30

Days

91

Days1 Year 3 Year

Rs. in

Cr.

As on

IDFC Arbitrage Fund -

Plan A (Regular) -

Dividend

 Jun 24,

2008

0.4885 1.4969 7.4858NA 953.23

May 30,

2008

IDFC Arbitrage Fund -

Plan A (Regular) - Growth

 Jun 24,

2008

0.4876 1.4962 7.492NA 953.23

May 30,

2008

IDFC Arbitrage Fund -

Plan B (I P) - Dividend

 Jun 24,

2008

0.5326 1.625 8.027NA 953.23

May 30,

2008

IDFC Arbitrage Fund -

Plan B (I P) - Growth

 Jun 24,

2008

0.5317 1.6241 8.0317NA 953.23

May 30,

2008

IDFC Arbitrage Plus Fund

- Plan A - Dividend

 Jun 24,

2008NA NA NA NA NA NA

IDFC Arbitrage Plus Fund

- Plan A - Growth

 Jun 24,

2008NA NA NA NA NA NA

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IDFC Arbitrage Plus Fund

- Plan B - Dividend

 Jun 24,

2008NA NA NA NA NA NA

IDFC Arbitrage Plus Fund

- Plan B - Growth

 Jun 24,

2008NA NA NA NA NA NA

IDFC ASBF - Plan A -

Annual Dividend

 Jun 24,

2008

0.2939 -5.3391

6.86175.820

7 35.34May 30,

2008

IDFC ASBF - Plan A -

Growth

 Jun 24,

2008

0.2935 1.5911 8.20786.761

1 35.34May 30,

2008

IDFC ASBF - Plan A - Half 

 Yly Div

 Jun 24,

2008

0.293

-0.806

7.33855.933

635.34

May 30,

2008

IDFC ASBF - Plan A - Qtly

Dividend

 Jun 24,

2008

0.2937 0.1307 7.16526.019

2 35.34May 30,

2008

IDFC Cash Fund - Plan A -

Daily Dividend

 Jun 24,

2008

0.4832 1.2309 4.6024.952

1 75.61May 31,

2008

IDFC Cash Fund - Plan A -

Growth

 Jun 24,

2008

0.6198 1.5808 5.94115.971

2 75.61May 31,

2008

IDFC Cash Fund - Plan A -

Wkly Div

 Jun 24,

2008

0.4063 1.1466 4.51464.942

2 75.61May 31,

2008

IDFC Cash Fund - Plan B -

IP - Daily Div

 Jun 24,

2008

0.4832 1.2365 4.60884.977

3 75.61May 31,

2008

IDFC Cash Fund - Plan B -

IP - Growth

 Jun 24,

2008

0.6206 1.5821 5.9428 5.981 75.61 May 31,

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IDFC D B F- Plan A -

Growth

 Jun 24,

2008

-

0.3294

1.459310.400

2

7.397

3 21.9May 30,

2008

IDFC F R F - IP - LTP - Plan

B - Annual Div.

Dec 7,

2007

0.6768

NA NA

0.298

5

4659.8

Nov 30,

2007

IDFC F R F - IP - LTP - Plan

B - Daily Div

 Jun 24,

2008

0.6358 1.8665 7.357NA

3416.1

5

May 30,

2008

IDFC F R F - IP - LTP - Plan

B - Growth

 Jun 24,

2008

0.7264 2.133 8.4368 6.934 3416.1

5

May 30,

2008

IDFC F R F - IP - LTP - Plan

B - Mtly Div

 Jun 24,

2008

0.0577 1.2852 6.7581 3.4005 3416.1

5

May 30,

2008

IDFC F R F - IP - LTP - Plan

B - Qtly Div

 Jun 24,

2008

0.726 -

0.30027.2733

6.187

6 3416.1

5

May 30,

2008

IDFC F R F - IP - LTP - PlanB - Wkly Div  Jun 24,2008

0.6483 1.8515 7.37214.019

3 3416.15 May 30,2008

IDFC F R F - LTP - Plan A -

Daily Div.

 Jun 24,

2008

0.5893 1.733 6.8208NA

3416.1

5

May 30,

2008

IDFC F R F - LTP - Plan A -

Growth

 Jun 24,

2008

0.6727 1.9831 7.84076.543

8 3416.1

5

May 30,

2008

IDFC F R F - LTP - Plan A -

Mtly Div.

 Jun 24,

2008

0.5995 1.711 6.17645.371

7 3416.1

5

May 30,

2008

IDFC F R F - LTP - Plan A -

Qtly Div.

 Jun 24,

2008

0.6722 -

0.4767

6.6976 5.807 3416.1 May 30,

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 5

5 2008

IDFC F R F - LTP - Plan A-

Annual Div.

 Jun 24,

2008

0.6728 1.9793 6.89144.998

4 3416.1

5

May 30,

2008

IDFC F R F - STP - Plan A -

Daily Div

 Jun 24,

2008

0.414 1.2201 4.62694.953

8 117.63May 31,

2008

IDFC F R F - STP - Plan A -

Growth

 Jun 24,

2008

0.5317 1.5688 5.99765.964

7 117.63May 31,

2008

IDFC F R F - STP - Plan A -

Mthly Div

 Jun 24,

2008

0.4198 1.2276 4.85184.889

3 117.63May 31,

2008

IDFC F R F - STP - Plan A -

Wkly Div

 Jun 24,

2008

0.4259 1.2227 4.65094.959

9 117.63May 31,

2008

IDFC F R F - STP - Plan B -IP - Daily Div

 Jun 24,2008

0.4144 1.2212 4.6456 4.969 117.63 May 31,2008

IDFC F R F - STP - Plan B -

IP - Growth

 Jun 24,

2008

0.5315 1.5692 5.99925.968

6 117.63May 31,

2008

IDFC F R F - STP - Plan B -

IP - Mthly Div

Feb

21,

2007

0.4808 1.4559 5.50254.770

9 140.47 Jul 31,

2007

IDFC F R F - STP - Plan B -

IP - Wkly Div

 Jun 24,

2008

0.4228 1.2227 4.65074.980

5 117.63May 31,

2008

IDFC F R F - STP - Plan C -   Jun 24, 0.4342 1.2668 4.8759 5.251 117.63 May 31,

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Super I P - Daily Div 20083

2008

IDFC F R F - STP - Plan C -

Super I P - Growth

Nov 7,

2007NA

-

17.080

8

-

13.053

5

-

0.910

3

140.47 Jul 31,

2007

IDFC F R F - STP - Plan C -

Super I P - Monthly Div

Dec

10,

2006

-

0.4678

0.1209 3.5741NA 364.26

Nov 30,

2006

IDFC F R F - STP - Plan C -

Super I P - Weekly Div

Dec

10,

2006

0 02.259

NA 364.26Nov 30,

2006

IDFC G Sec Fund -

Investment - Plan A -Annual Div.

 Jun 24,2008 -0.5188

-

3.5388

7.86555.885

7 8.05 May 30,2008

IDFC G Sec Fund -

Investment - Plan A -

Growth

 Jun 24,

2008

-

0.5197

0.9384 8.6436.453

2 8.05May 30,

2008

IDFC G Sec Fund -

Investment - Plan A - HY

Div.

 Jun 24,

2008

-

0.5185

-

2.70987.8489

5.844

3 8.05May 30,

2008

IDFC G Sec Fund -

Investment - Plan A -

Qtrly Div.

 Jun 24,

2008

-

0.5188

-

0.46887.8695

5.907

8 8.05May 30,

2008

IDFC G Sec Fund - Short

 Term - Plan A - Growth

 Jun 24,

2008

-

0.3101

-

0.31164.1879

4.078

3 0.29May 30,

2008

IDFC G Sec Fund - Short

 Term - Plan A - Mthly Div.

 Jun 24,

2008

-

0.3097

-

0.18733.7783

3.623

9 0.29May 30,

2008

IDFC G Sec Fund - Short

 Term - Plan A - Qtly Div.

 Jun 24,

2008

-

0.3094

-

1.2873

2.1828 3.110 0.29 May 30,

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 4

2008

IDFC G-Sec Fund - IP - PF

Plan - Plan B - Annual

Dividend

Dec 2,

20050 0

0.8139NA 17.5

Apr 30,

2008

IDFC G-Sec Fund - IP - PF

Plan - Plan B -Qty

Dividend

 Jun 24,

2008

-

0.0653

-

0.86439.2156

6.425

5 17.64May 30,

2008

IDFC G-Sec Fund - IP- PF

Plan - Plan B - Growth

 Jun 24,

2008

-

0.0665

1.519910.298

8

7.125

8 17.64May 30,

2008

IDFC G-Sec Fund - PF Plan

- Plan A - Annual Dividend

 Jun 24,

2008-0.066

-

5.28488.9937

6.3775 17.64

May 30,

2008

IDFC G-Sec Fund - PF Plan

- Plan A - Growth

 Jun 24,

2008

-

0.0659

1.519910.330

7

7.203

9 17.64May 30,

2008

IDFC G-Sec Fund - PF Plan

- Plan A - Qtly Dividend

 Jun 24,

2008

-

0.0662 -0.861

9.217 6.498

17.64May 30,

2008

IDFC Imperial Equity Fund

- Dividend

 Jun 24,

2008

-

12.498

6

-

5.08376.4711

NA 144.49May 30,

2008

IDFC Imperial Equity Fund

- Growth

 Jun 24,

2008

-

12.499

5

-

5.45396.0593

NA 144.49May 30,

2008

IDFC Liquidity Manager

Fund - Daily Div

 Jun 24,

2008

0.4837 1.2568 4.7504NA 34.65

May 31,

2008

IDFC Liquidity Manager

Fund - Monthly Div

 Jun 24,

2008

0.504 1.2843 4.8135NA 34.65

May 31,

2008

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IDFC Liquidity Manager

Fund - Weekly Div

 Jun 24,

2008

0.4989 1.2631 4.7622NA 34.65

May 31,

2008

IDFC Liquidity Manager

Fund -Growth

 Jun 24,

2008

0.6205 1.6159 6.1409NA 34.65

May 31,

2008

IDFC Liquidity Manager

Fund Plus - Daily Div

 Jun 24,

2008

0.5514 1.6129 6.0924NA

2420.4

1

May 31,

2008

IDFC Liquidity Manager

Fund Plus - Growth

 Jun 24,

2008

0.7084 2.0725 7.8835NA

2420.4

1

May 31,

2008

IDFC Liquidity Manager

Fund Plus - Monthly Div

 Jun 24,

2008

0.5616 1.6275 6.1181NA

2420.4

1

May 31,

2008

IDFC Liquidity Manager

Fund Plus - Weekly Div

 Jun 24,

2008

0.568 1.618 6.1035NA

2420.4

1

May 31,

2008

IDFC Premier Equity Fund

- Dividend

 Jun 24,

2008

-

12.631

5

0.498912.003

7 NA 785.32May 30,

2008

IDFC Premier Equity Fund

- Growth

 Jun 24,

2008

-12.631

5

0.498912.003

7 NA 785.32May 30,

2008

IDFC SSIF - Invt. Plan -

Plan A - Ann Div.

 Jun 24,

2008

-

0.4539-5.639

8.59435.483

9 68.94May 30,

2008

IDFC SSIF - Invt. Plan -

Plan A - Growth

 Jun 24,

2008

-

0.4535

1.0729 9.91396.193

168.94

May 30,

2008

IDFC SSIF - Invt. Plan -

Plan A - H Y Div.

 Jun 24,

2008

-

0.4536

-

3.49948.8549

4.689

9 68.94May 30,

2008

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IDFC SSIF - Invt. Plan -

Plan A - Qtly Div.

 Jun 24,

2008

-

0.4522

-

1.28748.8493

5.615

5 68.94May 30,

2008

IDFC SSIF - MTP - Plan A -

Bimonthly Dividend

 Jun 24,

2008

0.1003 0.6906 6.25785.626

7

181.93

May 30,

2008

IDFC SSIF - MTP - Plan A -

Daily Dividend

 Jun 24,

2008

0.1575 1.5463 6.2093NA 181.93

May 30,

2008

IDFC SSIF - MTP - Plan A -

Fortnightly Dividend

 Jun 24,

2008

0.1601 1.5166 6.0223NA 181.93

May 30,

2008

IDFC SSIF - MTP - Plan A -

Growth

 Jun 24,

2008

0.19 1.7778 7.0329 6.4605 181.93

May 30,

2008

IDFC SSIF - MTP - Plan A -

Monthly Dividend

 Jun 24,

2008

0.1091 1.5082 6.0738NA 181.93

May 30,

2008

IDFC SSIF - Short Term -

Plan A - Fortnightly Div

 Jun 24,

2008

-

0.2826

0.9306 6.7801NA 261.54

May 30,

2008

IDFC SSIF - Short Term -

Plan A - Growth

 Jun 24,

2008

-

0.2652

1.1583 7.75086.746

3 261.54May 30,

2008

IDFC SSIF - Short Term -

Plan A - Monthly Dividend

 Jun 24,

2008

-

0.3178

0.9134 6.63215.804

9 261.54May 30,

2008

IDFC SSIF - Short Term -

Plan B - Fortnightly Div

 Jun 24,

2008

-

0.2618

0.9887 7.0197NA 261.54

May 30,

2008

IDFC SSIF - Short Term -

Plan B - Growth

 Jun 24,

2008-0.243

1.219 8.0156NA 261.54

May 30,

2008

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IDFC SSIF - Short Term -

Plan B - Monthly Dividend

 Jun 24,

2008

-

0.2987

0.9688 6.9434NA 261.54

May 30,

2008

IDFC SSIF - Short Term -

Plan C - Super IP - Frtly

Div

 Jun 24,

2008

-

0.2548

1.0057 6.9577NA 261.54

May 30,

2008

IDFC SSIF - Short Term -

Plan C - Super IP - Growth

 Jun 18,

2008

0.1099 1.7759 8.4959NA 261.54

May 30,

2008

IDFC SSIF - Short Term -

Plan C - Super IP -

Monthly Div

 Jun 24,

2008

-

0.2901

0.9874 4.4279NA 261.54

May 30,

2008

IDFC SSIF - Short Term -

Plan D - MF Plan - Growth

 Jun 24,

2008

-

0.2612

1.1675NA NA 261.54

May 30,

2008

IDFC SSIF - Short Term -

Plan D - MF Plan - Monthly

Div

 Jun 24,

2008

-

0.3107

0.925NA NA 261.54

May 30,

2008

IDFC acquires StanChart's mutual fund

Infrastructure Finance Development Company Ltd today acquired mutual fund

business of Standard Chartered Bank. The company has received all necessary

approvals from the concerned regulatory authority, IDFC informed the Bombay Stock

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Exchange in a communiqué here. The company had earlier signed an agreement with

Standard Chartered Bank in March for a consideration of Rs 820 crore.

Standard Chartered MF has around Rs 14,000 crore in assets of which Rs 4,000 crore is

in equity while rest is in debt. With this IDFC acquires Standard Chartered Trustee

Company and Standard Chartered Asset Management Company, both of which

represent Standard Chartered's mutual fund business in India.IDFC is one of the leading infrastructure finance institutions, and the acquisition would

give it a foothold in the retail sector and improve its high margin fee based income.

Study and Survey:

 

Objective

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 This study is conducted in order to find out:-

- Current trends of mutual funds in the Indian market.

- Investor’s perception towards mutual funds investment option.

- Different views of professional advisors.

RATIONALE OF STUDY 

 The study of this nature is being conducted on the behalf of IDFC AMC (Standard

charted) for prediction of future of mutual funds in Indian emerging market. A high

level of competition entering the mutual funds sector, companies need to catch up

with the ever changing demands of the industry. The study is being conducted to get

an edge over other MFs houses in the mutual fund industry. It is also done in order to

know as to how much knowledge and money the consumers contribute in the MFsschemes.

Survey Methodology

Survey comprises collecting, organizing, and evaluating data, reaching at a specificconclusion and at the same time careful evaluation of the conclusion. Collection of data has been done by two ways (1) primary data collection; and (2) secondary datacollection, through questionnaires and websites, magazines, newspapers, documents,etc. Area of data collection was HDFC Bank branches at Chandnichowk, Ashok vihar(Delhi). Analysis of data has been done with the help of spss software. Articles are

attached from various magazines. Conclusion is drown from result of different dataprocessing and articles analyzation.

LIMITATIONS OF THE STUDY

 The survey was conducted in chandnichowk and ashok vihar. The standard of living,per capita income of people, earning style, etc. of this region is different from otherareas. Therefore, the inferences drawn from the survey can’t be generalized.

Another major limitation was unwillingness of 

respondents to reveal information. Due to lack of sufficient time and hesitation toreveal information regarding their investments, it was a difficult task to extractinformation from them.Sample size was also small i.e. 100. Therefore, it is very difficult to infer correctconclusions from small sample.

Findings

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1. This graph clearly shows that young people are more likely to visit bank

branches. Thus more chances of getting long term, more risk taker and

aggressive investors.

Figure 1

Age group

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2. Here data shows that people are willing to earn more return than

that of they earn in traditional ways of investment.

Expected returns

Figure 2

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3. This graph predicts that generally consumers keep a smaller part of 

their disposable income aside for different investment options.

% of disposable income

Figure 3

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4. This graphical representation clearly shows that investors give smaller

part of their investment pool to mutual funds investment.

% of total investment

Figure 4

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5. These pillars provide a clear thought to our mind that in India

professional advisors are more reliable source to get mutual funds related

information.

No. of persons

Figure 5

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6. This chart is showing that Indian investors are willing to stay invested

for a time duration of more than 12 months. They have patience, they

want to earn more money on their investment, and this is a bright sign for

mutual funds industry.

Figure 6

Key findings:-

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# Study found that more young people are likely to involved in financial activities.

 They more frequently visit banks and meet financial advisors. This is an opportunity

for mutual funds houses to attract these people.

# More than 50% of surveyed persons willing to take high risk for high rate of return.

 This indicates that riskier investment options can also attract big pool of money if 

investors are properly convinced.# Study shows professional advisors are considered to be more reliable source of 

mutual funds information, not because they provide human touch to investor but

others are not aggressively proposed, advertised, availed and used .

# An another observation made by study was , many a time advisors themselves do

not get timely updates from AMCs. This leads them not to offer some of schemes those

may give good returns.

# technological advancements are at nascent stage. Therefore these channels will

take time to come in picture. In other words these are seems to narrow ways to walk.

# surveyed persons are not having knowledge of more than 10 AMCs name and not

more than 7 schemes of any one of mutual fund houses. This requires an aggressive

marketing of funds. So that awareness level of investor can be improved.

Professional advisors think that investors are not educated properly. They (investor)

rely on what others say or what they (advisors) say. It’s easy to convince them for

investment but not so easy to make them clear about market affecting factors. “Stock

market is going low and I am already losing, you are asking for investment in market,

sorry I am not interested.” An investor grievance.

Conclusion & recommendations:

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Questionnaires

[I] For staff of HDFC Bank Ltd. and Brokers.

1. How long have you been selling mutual funds?

2. By what way did you used to communicate to your clients?

3. Do you still follow the same modes?

4. Industry is changing, consumer`s perception is changing, Indian economy is

also dynamic, growing, how do you justify your job with such a changing

scenario?

5. How do you describe ‘technological innovation in mutual funds ‘, by what

extent seen and foreseen changes are caused by it?

6. If I keep all recommendations aside and simply ask you, what factors do you

consider before suggesting any scheme to a prospective client?

7. Demand and supply mechanism moreover is applicable to buying and

selling, what is the present seen of this mechanism for mutual funds in India?

8. Data says that in US number of mutual funds schemes are more than that of 

number of listed companies at stock exchange whereas in India not more than

1000 schemes. How do you react on this situation?

9. One side double digit inflation rate, RBI’s norms for curbing liquidity from

market, high price of fuel, are putting pressure on consumer’ s savings, on the

other side SEBI and RBI are relaxing norms for AMCs business. How these two

repelling poles can stand simultaneously?

10. Number of distribution channels is increasing just to cater untouched

market. What do you think?

11. Finally, where do you see this industry in coming 10years horizon?

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[II] For clients of HDFC Bank Ltd.

1. Which of the following age bands do you fall in to?

Less than 21

21 to 25

25 to 35

35 to 60

Above 60

2. What is your primary source of income?

 Your pension

 Your salary

Income from your business

Rental income from investment properties

3. What is your return expectation on your investment?

Up to 8%

Between 8% to 18%

Above 18%

4. How would you describe/rate your level of knowledge of financial products?

Low level of knowledge

Medium level of knowledge

High level of knowledge

5. What level of risk are you willing to accept on your investment?

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I want to protect my capital

I am comfortable with a small degree of risk

I am comfortable accepting the fact that investment could decline

I am willing to tolerate putting my principal at risk by investing in volatile

investments

6. What percent of your disposable income do you keep aside for different

investment options?

0% to 5%

5% to 10%

10% to 15%

15% to 20%

20% to 30%

Above 30%

7. What percent of above mentioned percentage part do you invest in mutual

funds?

0% to 5%

5% to 10%

10% to 20%

20% to 30%

30% to 50%

Above 50%

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8. Which of the following source of mutual funds information do you like to opt

for?

Professional advisory

Company advisory

Mutual fund prospects

Newspaper, magazine, television

Mutual fund rating service

9. How long are you planning to stay invested?

Long term > 12 months

Medium term 6 – 12 months

Short term < 6 months

10. How likely are you stay invested during volatile times?

Unlikely you will stay invested

Likely you will stay invested

Highly likely to remain invested

Glossary:-68 | P a g e

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Back-end Load - Charge imposed by a mutual fund when an investor redeems

shares. Redemption fees and contingent deferred sales charges are examples.

Contingent Deferred Sales Charges - Back-end load imposed on an investor who

redeems shares. It is usually expressed as a percentage of the original purchase

price or of the value of shares redeemed. In most cases, the longer the investor

holds his shares, the smaller the deferred sales charge.

Distribution - Payments made to shareholders by the mutual fund. Interest and

stock dividends earned by the fund’s portfolio are passed to shareholders as

dividends, while capital gains are passed as capital gains distributions.

Dividend Reinvestment Fee - Fee charged when an investor uses dividends paid

by a mutual fund to purchase additional shares of the mutual fund.

Exchange Fee - Fee charged when an investor switches from one mutual fund to

another in the same family of funds.

Front-end Load - Sales charge applied at the time the investor purchases shares.

Investment Companies - The companies that pool investor monies to purchase

securities. The Investment Company Act of 1940 created three types of 

investment companies: face-amount certificate companies, unit investment

trusts and management companies.

Management Companies - There are two types: open-end and closed-end. Open-

end funds, which sell and buy shares back on demand, are called mutual funds.

Closed-end funds have a fixed number of shares. After the initial public offering,

shares in closed-end funds trade only on exchanges. The price is determined by

the market and does not necessarily reflect the net asset value of the shares.

Management Fee - A fee paid by the mutual fund to its investment adviser and

charged against fund assets, generally 1% or less per year.

Net Asset Value - In effect, the share price of a fund computed daily by adding

the value of the fund’s securities and other assets, subtracting liabilities, and

dividing by the number of shares outstanding. For a mutual fund with a front-end

load, net asset value is identical to the "asked price" or "offering price."

Prospectus - A disclosure document which should provide the investor with full

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and complete disclosure of all material information needed by the investor to

make a decision whether or not to invest. The prospectus generally incorporates

the SAI by "reference." (See SAI definition.)

Redemption Fee - A fee charged to an investor who redeems shares. It is

generally expressed as a percentage of the value of shares redeemed.

Rule 12b-1 Fee - An asset-based sales load, permitted by SEC Rule 12b-1,

representing annual charges of up to 1-1/4% for specific sales or promotional

activities of the mutual fund. Over time, the amount paid in Rule 12b-1 fees can

surpass the amount paid in sales fees charged by load funds.

SAI - A disclosure document called a Statement of Additional Information. The

SAI is not required to be furnished by mutual funds to investors unless investors

specifically request it. Investors are responsible for information in the SAI, even

if they don’t request it.

 Total Return - A computation of mutual fund performance which measures

changes in total value over a specified time period. Included in the computation

are distributions paid to investors, capital gains distributions and unrealized

capital gains and losses. Since all fund activity which has an effect on net asset

value is represented, this measure provides a picture of performance which is

more complete than yield.

 Yield - A measure of mutual fund performance, which is figured by dividing the

income generated (dividends, capital gains distribution, etc.) per share for aspecific time period by the fund’s current price per share. For example if, during

a year, a single share of a fund had paid income totaling $1 and its share price

was $10, the annual yield for that year would be figured by dividing 1 by 10,

which equals one tenth, or a yield of 10%.

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References:-

www.IDFCMF.com 

www.moneycontrolindia.com 

http://www.nse-india.com 

http://www.amfiindia.com 

http://www.mutualfundsindia.com

http://www.sebi.gov.in

www.businessmapsofindia.com 

www.ceicdata.com 

www.economictimes.com 

www.valueresearchonline.com