COMPARITIVE ANALYSIS OF RELIANCE MUTUAL FUNDS WITH OTHER EXISTING MUTUAL FUNDS...

8/12/2019 COMPARITIVE ANALYSIS OF RELIANCE MUTUAL FUNDS WITH OTHER EXISTING MUTUAL FUNDS...

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SUMMER INTERNSHIP

REPORT

ON

COMPARITIVE ANALYSIS OF RELIANCE MUTUAL

FUNDS WITH OTHER EXISTING MUTUAL FUNDS...

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Submitted in u!i!!ment "# t$e %&%#d "M%'te# " bu'ine'' %dmini't#%ti"n (G.).T.U. Lu*+n"&,

SESSION- /0/1/0

FOR THE PARTIAL FULFILLMENT OF TWO YEAR DEGREE IN

MASTER OF )USINESS ADMINISTRATION

UNDER THE GUIDANCE OF- SU)MITTED

)Y-SAN2AY 3UMAR ANSHI3A

)A2PAI

)#%n*$ M%n%4e# M)A1Fin%! 5#

Re!i%n*e Mutu%! Fund R"!! N".1

0/6789///7

MAHARANA INSTITUTE OF PROFESSIONAL STUDIES

(AFFILIATED )Y GAUTAM )UDDH TECHNICAL UNIVERSITY,

APPROVED )Y AICTE: MINISTERY OF HRD: GOVT. OF INDIA:

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PREFACE

With the growth of rapid industrialization the need of management is felt every where

.management, A research report provides the most natural condition under which a student

can learn and got success in implementing the theoretically learned in to the practical and

current environment of daily practices done by the people (investor) it helps a student to

learn, to improve, to improvise, to eperiment, to find !nowledge in all possible ways and

to translate that !nowledge into action.

"#A is a foundation stone to the management career. $he classroom learning needs to

practical eposure. $o develop concrete managerial and administrative s!ills of potential

manager, it is important that the interaction to the real environment be there.

$he pro%ect is a real life venture for me. &t is a great privilege that you have spread your for

reading this. &n forthcoming pages, an attempt has been made to present the different aspect

of my pro%ect.

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Date (Anshika

Bajpai)

Place !anp"#

AC!NO$%ED&MENT

&f words are considered as a symbol of approval and ta!en of appreciation then let the

words play the heralding role epressing my gratitude.

irst of all & than! to my racie god who blessed me with all !ind of facilities that had been

provided to me for completion of my report.

&*m also grateful to m5 te%*$e# for guiding me to learn and helped me on pro%ect on

COMPARITI'E ANA%SIS OF RE%IANCE MUTUA% FUND $ITH OTHER

EISTIN& MUTUA% FUNDS*

"y endless appreciation goes to my all respected faculty who has stood by my side and

give me moral support whenever & was low and boosted my will power. inally, & would

li!e to epress my solidarity towards the +-&A/ +0for providing me with such

an opportunity.

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Risks in1.l1e+ in 3"t"al 2"n+s

'a#i."s 3"t"al 2"n+ sche3e

T4pes .2 3"t"al 2"n+

Di22e#ent t4pes .2 2"n+s

C.sts in1.l1e+ in 3"t"al 2"n+

The 1al"es .2 4."# 2"n+

S.3e .2 the e5istin- asset 3ana-e3ent c.3pan4

De1el.p3ent .2 3"t"al 2"n+ in In+ia

aphical #ep#esentati.n

M"t"al 2"n+s .#-ani6ati.ns

Fl./ cha#t

F#e7"entl4 "se+ te#3s in 3"t"al 2"n+s

St#"ct"#e .2 In+ian 3"t"al 2"n+

$.#kin- .2 3"t"al 2"n+

O)2ECTIVE OF THE STUDY


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SWOT ANALYSIS 861

8made to suit

the re@uirements of investors. "utual funds now offer products for the entire range of needs

of investors. $he encouraging response to inde funds and sector funds shows the growing

maturity among investors. 0pen>end funds, which provide li@uidity to investors at daily

AI related prices, are growing in popularity. $he funds have be en adopting technology

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to provide good service to investors and with the proposed introduction of electronic funds

transfer and thegrowing trend towards >/ommerceG the efficiency of service will increase

even further.

&n the coming year*s mutual funds as saving intermediaries will play a greater role in

bringing the gap between investors and issuers, especially in the area of e@uity funds JAt

present these funds represents 1'K of #B mar!et capitalization. $his is epected to go up

with increasing flows into financial savings, especially the mutual fund with the

growth and stability in the capital mar!et flows into e@uity funds are epected to go up.

A "utual und is a trust that pools the savings of a number of investors who share a

common financial goal. $he money thus collected is then invested in capital mar!et

instruments such as shares, debentures and other securities. $he income earned through

these investments and the capital appreciation realized is shared by its unit holders in

proportion to the number of units owned by them. $hus a "utual und is the most suitable

investment for the common man as it offers an opportunity to invest in a diversified,

professionally managed bas!et of securities at a relatively low cost.

"utual funds, also referred to as investment companies, offer an alternative investment

choice for individuals with a long>term horizon. $he way they operate is that individual

investor money are pooled and invested in many different companies. Assets are

professionally managed to meet various investment ob%ectives. $hey issue and sell shares to

share holders and also redeem them (buy them bac!) upon re@uest. rices of shares are set

daily at the close of business, based on the value of all investments in the mutual fund*s

portfolio. $heir ma%or advantages are diversification and professional management, which

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are not readily available to small investors outside the mutual fund arena. "oney mar!et

mutual funds are short>term funds. $hey invest in short>term cash and cash e@uivalent

instruments, such as $reasurybills, certificates of deposit, and short>term notes. "utual

funds may own "utual and bonds of many different companies.

A mutual fund is the ideal investment vehicle for today*s comple and modern financial

scenario. "ar!ets for e@uity shares, bonds and other fied income instruments, real estate,

derivatives and other assets have become mature and information driven. rice changes in

these assets are driven by global events occurring in faraway places. A typical individual is

unli!ely to have the !nowledge, s!ills, inclination and time to !eep trac! of events,

understand their implications and act speedily. An individual also finds it difficult to !eep

trac! of ownership of his assets, investments, bro!erage dues and ban! transactions etc.

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Hist.#4 .2 3"t"al

2"n+

&n 1=23 three #oston securities eecutives pooled their money together to create the first

mutual fund. $he idea of pooling money together for investing purposes started in urope

in the mid>1:??s. $he first pooled fund in the .B was created in 1:=' for the faculty and

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staff of 7arvard niversity on "arch 21st, 1=23 the first official mutual fund was born. &t

was called the "assachusetts &nvestors $rust.

7owever in &ndia $& was the first to introduce mutual funds in the &ndian mar!ets and it

commenced its operations from Euly 1=53, overnment allowed public sector ban!s and

institutions to set up mutual funds.

&n the year 1==2, Becurities and echange #oard of &ndia (B#&) Act was passed. $he

ob%ectives of B#& are L to protect the interest of investors in securities and to promote the

development of and to regulate the securities mar!et.

As far as mutual funds are concerned, B#& formulates policies and regulates the mutual

funds to protect the interest of the investors. B#& notified regulations for the mutual funds

in1=='. $hereafter, mutual funds sponsored by private sector entities were allowed to enter

the capital mar!et. $he regulations were fully revised in 1==5 and have been amended

thereafter from time to time. B#& 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 +egulations. $here is no

distinction in regulatory re@uirements for these mutual funds and all are sub%ect to

monitoring and inspections by B#&. $he ris!s associated with the schemes launched by the

mutual funds sponsored by these entities are of similar type. &t may be mentioned here that

nit $rust of &ndia ($&) is not registered with B#& as a mutual fund (as on Eanuary14,

2??2. $he end of millennium mar!s '5 years of eistence of mutual funds in our country.

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$he ride through these '5 years is not been smooth. &nvestor opinion is still divided. While

some are for mutual funds others are against it.

MUTUAL FUND SCHEMES

"utual funds offer a variety of schemes to investor so as to provide steady income or

growth or both. $hey differ according to the investment policies. $he funds li!e individual

investor have different goals. 0f the investor who will first ascertain his investment

ob%ectives, thin!ing that the units of a fund have an investment goal paralleling his

ob%ectives

FUND MUTUA% BASICS

As you probably !now,mutual funds have become etremely popular over the last 2?years.

What was once %ust another obscure financial instrument is now a part of our daily lives.

&n fact, too many people, investing means buying mutual funds. After all, its common

!nowledge that investing in mutual funds is (or at least should be) better than simply letting

your cash waste away in a savings account, but, for most people, thats where the

understanding of funds ends. &t doesnt help those mutual fund sales people spea! a strange

language that, sounding sort of li!e nglish, is interspersed with %argon li!e "+, AIB,

loadload, etc.

0riginally mutual funds were heralded as a way for the little guy to get a piece of the

mar!et. &nstead of spending all your free time buried in the financial pages of the

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investment Eournal, all you have to do is buy a mutual fund and youd be set on your way to

financial freedom. As you might have guessed, its not that easy. "utual funds are an

ecellent idea in theory, but, in reality, they havent always delivered. ot all mutual funds

are created e@ual, and investing in mutual*s isnt as easy as throwing your money at the first

salesperson who solicits your business.

AD'ANTA&ES OF MUTUA% FUND

:,P#.2essi.nal Mana-e3ent> $he primary advantage of funds (at least theoretically)

is the professional management of your money. &nvestors purchase funds because they do

not have the time or the epertise to manage their own portfolio. A mutual fund is a

relatively inepensive way for a small investor to get a full>time manager to ma!e and

monitor investments.

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;,Di1e#si2icati.n> #y owning shares in a mutual fund instead of owning individual

"utual

0r bonds, your ris! is spread out. $he idea behind diversification is to invest in a large

number of assets so that a loss in any particular investment is minimized by gains in others.

&n other words, the more "utuals and bonds you own, the less any one of them can hurt you

(thin! about nron). -arge mutual funds typically own hundreds of different "utuals in

many different industries. &t wouldnt be possible for an investor to build this !ind of a

portfolio with a small amount of money.

#ecause a mutual fund buys and sells large amounts of

securities at a time, its transaction costs are lower than you as an individual would pay.

=,%i7"i+it4-Eust li!e an individual "utual, a mutual fund allows you to re@uest that your

shares be converted into cash.

>,Si3plicit4> #uying a mutual fund is easy.

DISAD'ANTA&ES OF MUTUA% FUND

:,P#.2essi.nal Mana-e3ent> 8id you notice how we @ualified the advantage of

professional management with the word MtheoreticallyMJ "any investors debate over

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whether or not the so>called professionals are any better than you or & at pic!ing "utuals.

"anagement is by no means infallible, and, even if the fund loses money, the manager still

ta!es his "utual funds dont eist solely to ma!e your life easier>>all funds are in it for a

rofit. $hemutual fund industry is masterful at burying costs under layers of %argon

.#ecause funds have small holdings in so many different companies, high returns from a

few &nvestments often dont ma!e much difference on the overall return. 8ilution is also the

result of a successful fund getting too big. When money pours into funds that have had

strong Buccess, the manager often has trouble finding a good investment for all the new

money

When ma!ing decisions about your money, fund managers dont consider your

personal ta situation. or eample, when a fund manager sells a security, a capital>gain ta

is triggered, which affects how profitable the individual is from the sale. &t might have been

more advantageous for the individual to defer the capital gains liability

RIS!S IN'O%'ED IN MUTUA% FUND

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At times the prices or yields of all the securities in a particular mar!et rise or fall due to

broad outside influences. When this happens, the "utual prices of an out standing, highly

profitable company and a fledgling corporation may be affected.

$his change in price is due to @m%#+et #i'+.

Inte#est #ate #isk

Bometimes referred to as Nloss of purchasing powerO. Whenever inflation sprints forward

faster than the earnings on your investment, you run the ris! that you will actually be able to

buy less, not more. &nflation ris! also occurs when prices rise faster than your returns.

C#e+it #isk

$he sector offers. ailure or inability to attract


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$he sectoral fund schemes, investments will be predominantly in e@uities of select

companies in the particular sectors. Accordingly, the AI of the schemes are lin!ed to the

e@uity performance of such companies and may be more volatile than a more diversified

portfolio of e@uities.

Chan-es in -.1e#n3ent p.lic4

/hanges in overnment policy especially in regard to the ta benefits may impact the

business prospects of the companies leading to an impact on the investments made by

the fund.

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'ARIOUS MUTUA% FUND SCHEME

M"t"al F"n+ Sche3es,

Wide variety of "utual und Bchemes eists to cater to the needs such as financial position,

ris! tolerance and return epectations etc. $he table below gives an overview into the

eisting types of schemes in the &ndustry.

B4 St#"ct"#e

; 0pen > nded Bchemes

; /lose > nded Bchemes

; &nterval Bchemes

B4 In1est3ent O0jecti1e

rowth Bchemes

&ncome Bchemes

#alanced Bchemes

"oney "ar!et Bchemes

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T4pes .2 M"t"al F"n+

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M"t"al F"n+s Di22e#ent T4pes .2 F"n+s

o matter what type of investor you are there is bound to be a mutual fund that fits your

style. According to the last count there are over 1?,??? mutual funds in orth AmericaP

$hat means there are more mutual funds than "utuals. &ts important to understand that

each mutual fund has different ris!s and rewards. &n general, the higher the potential return,

the higher the ris! of loss. Although some funds are less ris!y than others, all funds have

some level of ris!>>its never possible to diversify away all ris!. $his is a fact for all

investments.

ach fund has a predetermined investment ob%ective that tailors the funds assets, regions

of investments, and investment strategies. At the fundamental level, there are three

varieties9 of mutual funds

1) @uity funds ("utual)

2)ied>income funds (bonds)

') "oney mar!et funds

All mutual funds are variations of these three asset classes. or eample, while e@uity

undsthat invest in fast>growing companies are !nown as growth funds, e@uity funds that

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&nvest only in companies of the same sector or region is !nown as specialty funds. -et*s go

over the many different flavors of funds. Well start with the safest and then Wor! through

to the more ris!y.

M.ne4 Ma#ket F"n+s

$he money mar!et consists of short>term debt instruments, mostly $>bills. $his is a safe

-ace to par! your money. Hou wont get great returns, but you wont have to worry about

losing your principal. A typical return is twice the amount you would earn in a regular

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#ond funds are li!ely to pay higher returns than certificates of deposit and money mar!et

&nvestments, but bond funds arent without ris!. #ecause there are many different types of

#onds, bond funds can vary dramatically depending on where they invest. or eample, a

fund specializing in high>yield%un! bonds is much more ris!y than a fund that invests in

government securitiesG also, nearly all bond funds are sub%ect to interest rate ris!, which

means that if rates go up the value of the fund goes down.

Balance+ F"n+s

$he ob%ective of these funds is to provide a MbalancedM miture of safety, income, and

capital appreciation. $he strategy of balanced funds is to invest in a combination of fied>

income and e@uities. A typical balanced fund might have a weighting of 5?K e@uity

and3?K fied>income. $he weighting might also be restricted to a specified maimum or

minimum for each asset class.

A similar type of fund is !nown as an asset allocation fund. 0b%ectives are similar to those

of a balanced fund, but these !inds of funds typically do not have to hold a specified

percentage of any asset class. $he portfolio manager is therefore given freedom to switch

the ratio of asset classes as the economy moves through thebusiness cycle.

E7"it4 F"n+s

unds that invest in "utual represent the largest category of mutual funds. enerally, the

investment ob%ective of this class of funds is long>term capital growth with some income.

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as part of a well>balanced portfolio, actually reduce ris! by increasing diversification.

Although the worlds economies are becoming more inter>related, it is -i!ely that another

economy somewhere is outperforming the economy of your home /ountry.

In+e5 F"n+s

$he last but certainly not the least important are inde funds. $his type of mutual fund

replicates the performance of a broad mar!et inde such as the sense and nifty. An

investor in an inde fund figures that most managers cant beat the mar!et. An inde fund

merely replicates the mar!et return and benefits investors in the form of low fees.

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COSTS IN'O%'ED IN MUTUA% FUND

M"t"al F"n+s C.sts

/osts are the biggest problem with mutual funds. $hese costs eat into your return, and they

are the main reason why the ma%ority of funds end up with sub>par performance. What*s

even more disturbing is the way the fund industry hides costs through a layer of financial

compleity and %argon. Bome critics of the industry say that mutual fund /ompanies get

away with the fees they charge only because the average investor does not understand what

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from as low as ?.2K (usually for inde funds) to as high as 2.?K. $he average e@uity

mutual fund charges around 1.'K>1.4K. Hou*ll generally pay more for specialty or

international funds, which re@uire more epertise from manager.

.

B"4in- an+ Sellin-

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(Hou can buy some mutual funds no>load) by contacting the fund companies directly.

0ther funds are sold through bro!ers, ban!s financial planners, or insurance agents. &f you

buy through a third party there is a good chance they*ll hit you with a sales charge (load).

$hat being said, more and more funds can be purchased through no>transaction fee

programs that offer funds of many companies. Bometimes referred to as a Mfund

supermar!et,M this service lets you consolidate your holdings and record !eeping, and it still

allows you to buy funds without sales charges from many different companies.

P.p"la# e5a3ples are Bchwab*s 0neBource, Ianguard*s und Access, and

idelity*s unds etwor!. "any large bro!erages have similar offerings. Belling a fund

is as easy as purchasing one. All mutual funds will redeem (buy bac!) your shares on

any business day. &n the nited Btates companies must send you the payment within

seven days.

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THE 'A%UES OF OUR FUND

Net asset 1al"e (NA')8which is a funds assets minus liabilities, is the value of a mutual

fund. AI per share is the value of one share in the mutual fund, and it is the number that

is @uoted in newspapers. Hou can basically %ust thin! of AI per share as the price of a

mutual fund. &t fluctuates everyday as fund holdings and shares outstanding change.

When you buy shares, you pay the current AI per share plus any sales front>end load.

When you sell your shares, the fund will pay you AI less any bac!>end load ."oses gave

to his follow eternities 1? commandments that were to be followed till9 $he world of

investments too has several ground rules meant for investors who are novices in their own

right and wish to enter the myriad world of investments. $hese come in handy for there is

every possibility of losing what one has if due care is not ta!en.

0. Assess 4."#sel29 Belf>assessment of one*s needsG epectations and ris! profile is of prime

importance failing whichG one will ma!e more mista!es in putting money in right places

than otherwise. 0ne should identify the degree of ris! bearing capacity one has and also

clearly state the epectations from the investments. &rrational epectations will only bring

pain.

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@uic! money. 0ne would do well to remember that nobody can perfectly time the mar!et so

staying invested is the best option unless there are compelling reasons to eit.

=* This .l+ a-e a+a-e is .2 "t3.st i3p.#tance. o matter what the ris! profile of a

person is, it is always advisable to diversify the ris!s associated. Bo putting one*s money in

different asset classes is generally the best option as it averages the ris!s in each category.

$hus, even investors of e@uity should be %udicious and invest some portion of the

investment in debt. 8iversification even in any particular asset class (such as e@uity, debt) is

good. ot all fund managers have the same acumen of fund management and with

identification of the best man being a tough tas!G it is good to place money in the hands of

several fund managers. $his might reduce the maimum return possible, but will also

reduce the ris!s.

dated che@ues to the fund and thereafter one will not be harried later. $he

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Automatic investment lans offered by some funds goes a step further, as the amount can

be directlyfree

in &ndia and so their ta liabilities can be reduced if the dividend payout option is used.

&nvestors of debt will be charged a ta on dividend distribution and so can easily avoid the

payout options.

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8.!eep t#ack .2 4."# in1est3ents

inding the right fund is important but even more important is to !eep trac! of the way they

are performing in the mar!et. &f the mar!et is beginning to enter a bearish phase, then

investors of e@uity too will benefit by switching to debt funds as the losses can be

minimized. 0ne can always switch bac! to e@uity if the e@uity mar!et starts to show some

buoyancy.

0/.!n./ /hen t. sell 4."# 3"t"al 2"n+s-

Qnowing when to eit a fund too is of utmost importance. 0ne should boo! profits

immediately when enough has been earned i.e. the initial epectation from the fund has

been met with. 0ther factors li!e non>performance, hi!e in fee charged and change in any

basic attribute of the fund etc. are some of the reasons for to eit. or more on it, read

$hen t. sa4-..+04e t. 4."# 3"t"al 2"n+ *

&nvestments in mutual funds too are not ris!>free and so investments warrant some caution

and careful attention of the investor. &nvesting in mutual funds can be a dicey business for

people who do not remember to follow these rules diligently, as people are li!ely to commit

mista!es by being ignorant or adventurous enough to ta!e ris!s more than what they can

absorb. $his is the reason why people would do well to remember these rules before they

set out to invest their hard>earned money.

SOME OF THE EISTIN& AMC (ASSET MANA&EMENT

COMPAN)

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A!!i%n*e Mutu%! Fund

)i#!% Mutu%! Fund

)O) Mutu%! Fund

)OI Mutu%! Fund

DSP Me##i!! L5n*$ Mutu%! Fund

HDFC Mutu%! Fund

ID)I P#in*iB%! Mutu%! Fund

Indi%n )%n+ Mutu%! Fund

ING Mutu%! Fund

3"t%+ M%$ind#% Mutu%! Fund

LIC Mutu%! Fund

M"#4%n St%n!e5 Mutu%! Fund

Pi"nee# ITI Mutu%! Fund

PN) Mutu%! Fund

P#udenti%! ICICI Mutu%! FundRe!i%n*e C%Bit%! Mutu%! FundS)I

Mutu%! Fund

St%nd%#d C$%#te#ed Mutu%! Fund

Sund%#%m Mutu%! Fund

T%t% TD W%te#$"u'e Mutu%! Fun

T%u#u' Mutu%! Fund

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DE'E%OPMENT OF MUTUA% FUND IN INDIA

$he mutual fund industry in &ndia started in 08


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MUTUA% FUND , OR&ANIATIONS

T$e#e %#e m%n5 entitie' in?"!?ed %nd t$e di%4#%m be!"& i!!u't#%te' t$e

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O#4%ni%ti"n%! 'et uB " % mutu%! und-

RE&U%ATOR BODIES

inancial Bystem is basically responsible for the ma%or up and downs in the

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NET ASSET 'A%UE

et Asset Ialue is the mar!et value of the assets of the scheme minus its liabilities. $he per

unit AI is the net asset value of the scheme divided by the number of units outstanding

on the Ialuation 8ate.

SA%E PRICE

$he price you pay when you invest in a scheme. Also called 0ffer rice. &t may include a

sales load.

REPURCHASE PRICE

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$he price at which units under open>ended schemes are repurchased by the "utual und.

Buch prices are AI related.

REDEMPTION PRICE

$he price at which close>ended schemes redeem their units on maturity. Buch prices are

AI related.

SA%ES %OAD

A charge collected by a scheme when it sells the units. Also called, Rront>end* load.

Bchemes that do not charge a load are called Ro -oad* schemes.

REPURCHASE OR BAC! END %OAD

A charge collected by a scheme when it buys bac! the units from the nit holders.

STRUCTURE OF INDIAN MUTUA% FUND

INDIAN MUTUAL FUND INDUSTRY

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$he rising &ndian mutual funds industry probably never had it better, as far as the entry of

individual or retail investors is concerned. $he industry*s total A" in 8ecember 2??5

stood at a hefty +s ', 2',4=6 crore, with a total of2.6= crore depositor folios, of which 2.'1

crore depositor folios had invested ine@uity schemes. $he share of direct investors, on the

other hand, has been dropping, stating that more retail investors see mutual funds as a

preferred route for investing in the mar!ets.

isting and new mar!et players as well as change $raded unds are li!ely to hit the

mar!et in the coming months with a flurry of new "utual unds schemes. An action pac!ed

first @uarter of 2??6 was forecasted to witness at -east 2? new schemes which are waiting

on the sidelines to be launched.

Ma#ket sha#e () .2 3"t"al 2"n+s c.3panies

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PERFORMANCE SNAPSHOTGGG

$he year 2??5 scored high in terms of both returns and volatility. $he rising &ndian mutual

funds industry saw its best, as far as the entry of individual or retail investors is concerned.

&n 2??5, out of the 14= diversified e@uity funds (includes diversified e@uity, midcap, and

e@uity ta saving schemes)9

S / und' (06, "ut1Be#"#med t$e Sen'e =/ und' (69, "ut1Be#"#med t$e

Nit5

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1) #irla Bun life was the best performer in Eanuary 2??6 and +s3, 1'5 crore to

its assets

2) +eliance " has become the top mutual fund house in the country by adding

a very &mpressive +s2, ?=2 crore to assets under management

') revious $op und 7ouse $& " declined by +s463 crore and lost its

top position to +eliance

3) B#& " was able to ac@uire 6th position by an addition of +s2, 355 crore

4) $ata " gained +s1, ?34 crore and able to secure its position in top 1?.

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BEST EUIT MUTUA% FUNDS

(As .n ; th Ap#il8 ;J)

ollowing is the ran!ing of the best mutual funds and their AIs as on 26thApril, 2??=.

$he ran!ings are based on 1 year returns of the @uity "utual unds available in the

mar!et.

S*NO* SCHEME NAME : #* #et"#n

()

P#esent

NA'

0 DSPML Te*$n"!"45.*"m und14#"&t$ 79.=/


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MUTUA% FUND AT A &%ANCE

A mutual fund is professionally managed firm of collective instrument that pools money

from many investors and invest it in "utual, bonds etc.

A mutual fund is a trust registered with securities and echange board of &ndia.

'al"e .2 the 2"n+

$he value of each unit of mutual fund, !nown as net asset value (AI)

F.#3"la

et asset scheme < o. of unit outstanding

METHODS OF MUTUA% FUND

0ne time payment

Bystematic investment plan

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$OR!IN& OF MUTUA% FUND

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$o study the mutual fund industry in detail.

$o study the investment procedure in detail.

$o find out the mar!et ris! of sip plan.

$o aware the client about mutual fund investment.

$o suggest better investment option according to mar!et behavior to the client.

pansion of mutual fund investment.

$o remove the past image of mutual fund from the mind of investors.

$o show the beneficiary aspect of mutual fund.

$o give the updated information to the investors about the high return and less ris!

fund.

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1* Resea#ch Desi-n

A research design is a pattern or an outline of a research pro%ect*s wor!ing. &t is a statement

of only the essential element of a study, those that provide the basic guidelines for the

details of the pro%ect. &t comprises a series of prior decision that ta!en together provide

master plans for eecuting a research pro%ects.

A research design serves as a bridge between what has been established i.e., the research

ob%ectives and what is to be done, in conduct of the study to relish those ob%ectives. &f there

were no research design, the research would have only foggy notions as about what is to be

done.

& have used of RploratoryT5BeK. $he research is of both @ualitative as well as

@uantitative type.

2. Unit .2 Anal4sis

&nvestors

Cha#acte#istics .2 inte#est

/lient*s !nowledge about "utual und.

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A sample design is a definite plan for obtaining a sample from a given population. &t refers

to the techni@ue or method the researcher would adopt in selecting items for the sample.

& have used convenience sampling method

K* Data c.llecti.n 3eth.+

& have used survey method to collect the data.

Tuestionnaire plan9 & have used structured for gathering the re@uired data

through contacting respondent personally

* T4pe .2 in2.#3ati.n

& have collected facts, awareness, attitude, future action plan and reason using

@uestionnaire.

L* T4pe .2 7"esti.ns

/lose ended @uestions for dichotomous.

"ultiple choice type

J* Data Anal4sis an+ Inte#p#etati.n

8ata analysis is based on the data collected by way of @uestionnaires. $he data is

tabulated and fre@uency distribution chart is prepared.

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We can !now that how many investors are aware about the mutual fund.

We can !now that in which type of securities, people want to invest and why.

We can !now that if investors don*t want to invest in mutual fund so what the

reason behind that is.

We can aware the investors about mutual funds beneficiary schemes.

We can !now about the mar!et potential.

#y this pro%ect we can !now that, which fund is growing up and which fund is

going down.

#y this we can !now about the co.*s that provide the mutual fund investment

facilities.

We can !now about the +eliance "utual fund co. and it*s wor!ing.

We can !now about the mutual fund A"/ (A''et M%n%4ement C"mB%n5,

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I3p.#tance .2 the

st"+4

"utual funds offer ineperienced and eperienced investors>>>who may not have a

lot of money to invest>>>the ability to invest in more than %ust one investment tool

without having to monitor or manage that investment personally and at a reduced

ris!.

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very person who have no more !nowledge about investment and he want to invest

anywhere so he can invest easily in mutual fund.

0ne of the mode to invest mutual fund that*s B& (Bystematic &nvestment lan) is

less ris!y to invest and every investor want to invest in less price.

"utual fund is totally depend upon the AI value (et Assets Ialue)

#y purchasing a combination of "utuals, bonds and other securities>>rather than %ust

one single "utual purchase>>their ris! is spread out over many fields and

companies, instead of %ust one.

urchasing into a mutual fund automatically provides the investor with an

eperienced investment manager to oversee their investment. $his is because the

mutual fund is composed of different investment securities and re@uires a competent

professional to oversee it from the onset.

&t is one of the easiest ways of investing your saving money

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MUTUAL FUND ADVISORS SUGGESTION A)OUT INVESTMENT

INTERPRETATION

"utual fund advisor will suggest the investors to invest in mutual fund investment more

because it is les ris!y than any investment. &n mutual fund the investor can invest in sip

(systematic investment plan) which is depend upon AI (net asset value) which is less

ris!y and whenever investors want to close that scheme they can. And it is profitable

because its profit is based on average basis.

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INVESTORS INTERESTED TO INVEST IN MUTUAL FUND

INTERPRETATION

After analysis we have seen that most of the investors are not interested to invest in mutual

fund %ust because of9

ast image of mutual fund.

#ecause of unawareness.

$hey are unaware about the mutual fund benefits.

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$hey don*t want to ta!e ris!

A INVESTORS WANTS TO INVEST ON WHICH )ASIS

INTERPRETATION

After analysis we have got the result that most of the investors want to invest in any

securities on the basis of rate of return, when they invest in any believable security

so they epected or anticipated that they will got the epected rate of return ,

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Bome people invest on the basis of safety purpose , some small investors mostly

invest their money for saving and for getting into near future

#usinessman mostly invests their money on securities %ust for saving the ta because

invested money always is ta free

A PERSON WANTS TO TA3E INFORMATION A)OUT MUTUAL

FUND

INTERPRETATION

#y above analysis we can !now that most of the clients,

ersons or investors want to !now about the mutual fund benefits, schemes, and

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ach and every information, because now a days every persons or investors want to

et information about everything so that on time he can utilize optimum utilization

0f resources in a right way and could get profit.

A PERSON WHO WANT TO DO THE 2O) IN RELIANCE MUTUAL

FUND

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INTERPRETATION

After analysis we got that investors don*t want to do the %ob in +eliance because9

#ecause lots of persons have no time for %oining that and there is lac! of

management in each dept. of +eliance that is also be reason that persons don*t want

to do %ob in +eliance

Bome persons don*t want %ust because of lac! of !nowledge about investment.

Bome persons don*t want to do the %ob in +eliance because they don*t want to

epand their business.

Bome persons gave no answers on such issues.

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A INVESTORS WHO WANT TO ATTEND THE SEMINAR

PROVIDED )Y RELIANCE

INTERPRETATION

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INTERPRETATION

=?


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We all !now that most of the investors or persons are interested to invest in public co. or

government co. in which there is less chance to drop out the invested money while on the

other hand less of the persons are not interested to invest in private sector because there is

more ris! than public sectors.

Bame as we can see in the above chart that most of the investors want to invest in reliance

co. because investors has made the mind set that we will get always theprofit in investing

over there while only small investors who invest very small amount in security invest in

private co. such as9 hdfc , icici. 0ther.

WHY THE CLIENTS )ELIEVE ONLY A)OVE CHOOSING FUND

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INTERPRETATION

"ost of the investors or clients want to invest in public co. because most of the

clients thin! that


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CLIENTS WANT TO GET ADVISORY SERVICES FROM RELIANCE

INTERPRETATION

&nvestors who have already invested in mutual fund they all want advisory services from

+eliance, in advisory servicesG we can !now AI (net assets value) of each fund on daily

basis.

Bo investors want to get those services so that they can ta!e right decision on right time, if

he sees that he is getting loss in investing fund so by this services he canswitch from loss

fund to profitable fund. Bo all the investors want to get that type of services from +eliance.

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CLIENTS ATTITUDE TOWARDS DSP )LAC3 ROC3 FUND WHICH

PROVIDE 0// RETURN NOW A DAYS

INTERPRETATION

We have seen that most of the investors don*t want to invest in dsp blac! roc! fund, which

is international co. , they don*t want to invest because they !now that now a days the AI

of this fund is very low appro. (13 >14 rs.) so on this the 1??K return is not so hectic for

the org. and mar!et is totally based upon uncertainty and always be fluctuating so he thin!s

that may be dspblac! roc! will not provide same return in future so the investors may get

lost, so they don*t want to invest in this. 0nly those investors would li!e to invest in this

fund who invests for short term.

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INVESTORS WOULD LI3E TO INVEST IN

INTERPRETATION

We can see that most if the investors want to invest in debt funds because there is a solid

reason behind this is that the debt funds provide the fied rate of interest to the investors,

there is no ris! in that type of funds for the investors.

While only big investors want to invest in e@uity mar!et because e@uity fund provide the

dividend according to performance of the org. if there will be profit in org so investors will

get the dividend otherwise they will have to face loss

$hat*s why investors want to invest in debt funds rather than e@uity mar!et.

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WHICH TYPE OF INSTRUMENT CURRENTLY INVESTED IN

INTERPRETATION

ow a day*s most of the investors want to invest in others funds such as9

8*s

&B+A/

tc.

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After that the investors mostly focus on to invest in debt mar!et %ust for reducing the

ris!.

After that they want to invest in e@uity mar!et for getting more profit.

$hen investors want to invest in commodity mar!et %ust for saving money in near

future.

Fin+in-s

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0, After getting in depth research study of +eliance, & came to !now that +eliance is

not much popular as other brands operating in Qanpur city. #a%a% Allianz, 78/,

&/&/& are having much higher tapped mar!et in respect to mutual funds.

, +eliance as an investment option in "utual und does not possess much proficiency

and potential customers in Qanpur city. $hough the financial advisors advise their

clients to go for "utual und as an investment option. About 32K of advisors

advise their clients to invest in "utual unds, followed by investing in &nsurance

sector.

6, $he advisors after having a deep thought says that it is the +eturns that ma!e them

convince their clients to go for investment in mutual funds. '5K of advisors said

that it is the +eturns which ma!e a person to invest in "utual und. ollowed by

+is! which is @uite lesser in other investment options.

7, A huge lot of advisors showed a positive response in dealing of for "utual und.

About 5?K of them said that they are interested in dealing for "utual unds,

because that results in higher bro!erage.

=, As far as +eliance is concerned about =1K of the advisors said that they are not

aware of the services provided by +eliance, including "utual und.

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A type of fundamental analysis of the health of a company by eamining its strengths(B),

wea!ness (W), business opportunity (0), and any threat ($) or dangers it might be eposed

to.

I.STREN&THS

B#an+ st#ate-4- as opposed to some of its competitors (e.g. 7B#/), +eliance

A8A operates a multi>brand strategy. $he company operates under numerous

well>!nown brand names, which allows the company to appeal to many different

segments of the mar!et.

Dist#i0"ti.n channel st#ate-49 +eliance is continuously improving the distribution

of its products. &ts online and &nternet>based access offers a combination of ecellent

growth prospects and its retail direct business also saw growth of 26K in 2??2 and

14K in 2??'.

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'a#i."s s."#ces .2 inc.3e9 +eliance has many sources of income throughout the

group, and this diversity within the group ma!es the company more fleible and

resistant to economic and environmental changes.

%a#-e p..l of installed capacities.

E5pe#ience+ 3ana-e#s for large number of enerics.

-arge pool of skille+ an+ kn./le+-ea0le 3anp./e#.

An inc#easin- li0e#ali6ati.n of government policies.

II* $EA!NESS

E3e#-in- 3a#kets- since there is more investment demand in the nited Btates,

Eapan and the rest of Asia, +eliance should concentrate on these mar!ets, especially

in view of low global interest rates.

"utual funds are li!e many other investments without a guaranteed return9there is

always the possibility that the value of your mutual fund will depreciate. nli!e

fied>income products, such as bonds and $reasury bills, mutual funds eperience

price fluctuations along with the stoc!s that ma!e up the fund. When deciding on a

particular fund to buy, you need to research the ris!s involved L %ust because a

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professional manager is loo!ing after the fund, that doesn*t mean the performance

will bestellar.

Fees- &n mutual funds, the fees are classified into two categories9 shareholder fees

and annual operating fees. $he shareholder fees, in the forms of loads and

redemption fees are paid directly by shareholders purchasing or selling the funds.

$he annual fund operating fees are charged as an annual percentage L usually

ranging from 1>'K. $hese fees are assessed to mutual fund investors regardless of

the performance of the fund. As you can imagine, in years when the fund doesn*t

ma!e money, these fees only magnify losses.

III* OPPORTUNITIES

P.tential 3a#kets- $he &ndian rural mar!et has great potential. All the ma%or mar!et

leaders consider the segments and real mar!ets for their products. A senior official

in a one of the leading company says foray into rural &ndia already started and there

has been realization that the rural mar!et is both price and @uantity conscious.

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Ent#4 .2 MNCs9 8ue to multinationals are entering into mar!et %ob opportunities are

increasing day by day. Also &ndia "utual und ma%ors are tie up with other financial

institutions.

I'* THREATS

He+-e 2"n+s- sometimes referred to as as hot money, are also causing a threat for

mutual funds have gained worldwide notoriety for bringing the mar!ets down. #e it

a crash in the currency, A stoc! or A bond mar!et, A usually a hedge fund

prominently figures somewhere in the picture.

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Rec.33en+ati.ns

$here is high potential mar!et. or mutual fund investors Qanpur city but this

mar!et need to bed eplored as investors are still hesitated to invest their money in

mutual fund.

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&n Qanpur city, investor has inade@uate !nowledge of mutual fund, so proper

mar!eting of various scheme is re@uired, co. should arrange more and more

seminar about mutual fund.

/o. should also provide the !nowledge of growth rate and epected growth rate of

mutual fund in &ndia.

+eliance must be concentrate on the management of the co. so that every wor! can

be done in a proper way.

+eliance must be advertising its tie up co. fund along with their features that the

investors can invest in that type of fund in +eliance.

+eliance must be provided the advice to investors about mutual fund growing fund.

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C.ncl"si.n

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The a/a#eness le1el .2 in1est.#s is l./ /h. a#e inte#este+ in +ealin- in

3"t"al 2"n+

"ost of investors are totally unaware about this investment.

Iery less people !nows about the service of +eliance.

ast image of mutual fund is not good.

+eliance can promote the investors by advertising, hording, and by interviews to

invest in this fund.

"ost of the investors want to invest in public co.*s fund %ust because of safety

purpose.

"ost of the investors want to safer side in investment.

"ost of the investors want to invest in debt funds because those are the ris! free

fundsG it gives the interest on investment.

"ost of the investors don*t !now about the mutual funds so they want advisory

services from reliance which could provide them whole information about the

mar!et situation of mutual fund.

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Anne5"#e

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$e ass"#e 4." that all the in2.#3ati.n that /ill 0e c.llecte+ 2#.3 4."

/ill #e3ain 2"ll4 c.n2i+ential an+ "se .nl4 2.# st"+4 p"#p.se.

A"9 UUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUU

8B&A$&0


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2) lease indicate reason for choosing above 9

a) +eturn ( )

b) +is! ( )

c) Bafety ( )

d) $a benefit ( )

e) 0thers ( )

') 8o you !now about the mutual fund services provided by the +eliance 9

a) Hes ( )

b) o ( )

3) Are you interested to invest in mutual fund 9

a) Hes ( )

b) o ( )

4) 8o you invest your money on which basis 9

a) +eturn ( )

b) Bafety ( )

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c) $a saving ( )

d) 0thers ( )

5) 8o you want to collect information about mutual fund investment9

a) Hes ( )

b) o ( )

6) Will you li!e to wor! in +eliance "utual und -td. , which deals with mutual

fund 9

a) Hes ( )

b) o ( )

:) &n future will you attend the seminar arranged by +eliance to guide the investors

about mutual fund 9

a) Hes ( )

b) o ( )

=) &n which co. you believe more 9

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a) 7dfc

b) &cici

c) +eliance

d) 8sp blac! roc!

e) Any other fund UUUUUUUUUUUUUUUUUUUUUUUUU

1?) Why you believe only such !ind of fund 9

a) +eturn ( )

b) ood mar!et position ( )

c) +is! free ( )

d) Any other reason ( )

11) 8o you want the advisory services of +eliance 9

a) Hes ( )

b) o ( )

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12) ow a days 8B blac! roc! fund provides the 1?? K return so do you want to

invest in this fund 9

a) Hes ( )

b) o ( )

c) &f yes


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Bi0li.-#aph4

$EBSITE

http9


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MA&AINES

B.opichand, the finapolis , +eliance "utual und -td..,volume 3 , 2?1?

unithavathyandian , Becurity Analysis And ortfolio "anagement , Ii!as

ublishing 7ouse , 2??1

T$%n+ 5"u
http://www.amfiindia.com/http://www.amfiindia.com/

COMPARITIVE ANALYSIS OF RELIANCE MUTUAL FUNDS WITH OTHER EXISTING MUTUAL FUNDS...

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