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CONTENT

Serial

No.

Topic Page No.

1 Acknowledgement 12 Declaration 23 Certificate 34 Content 45 Introduction 56 Mutual funds 157 Company Profile 428 Organizational Structure 529 Research Methodology 5310 Case Study 5611 Introduction of different mutual fund

companies

57

12 Schemes of companies 8613 Data Analysis 13414 Findings and suggestions 13715 Bibliography 138

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CHAPTER 1

INTRODUCTION

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WHAT IS INVESTMENT?Investment is a term frequently used in the fields of economics, business management

and finance. It can mean savings alone, or savings made through delayed consumption.

Investment can be divided into different types according to various theories and

principles.

When an asset is bought or a given amount of money is invested in the bank, there is

anticipation that some return will be received from the investment in the future.

There are a number of definitions of investment. While dealing with the various options

of investment, the defining terms of investment need to be kept in mind.

According to economic theories, investment is defined as the per-unit production of

goods, which have not been consumed, but will however, be used for the purpose of

future production. Examples of this type of investments are tangible goods like

construction of a factory or bridge and intangible goods like 6 months of on-the-job

training. In terms of national production and income, Gross Domestic Product (GDP)

has an essential constituent, known as gross investment.

Investment is the investing of money or capital in order to gain Profitablereturns, as interest, income, or appreciation in value.

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The Indian market is different from other Asian markets:

One of the big differences is that the Indian market, at least today, is less dependent on

the manufacturing sector. Singapore, Malaysia, Taiwan, China, grew up as

manufacturing centre - low-cost, high-volume. India is strong in the software, service

area that really requires communication and IT infrastructure, which in many ways, is

more

advanced in India than in most of the other Asian countries.

Why Investment?

Inflation is constantly increasing the cost of goods and services and eating into

the value of your income and wealth. You need to save money and invest it well

so that the value of every rupee is augmented.

Higher life-expectancy means people live longer and hence, need more money to

maintain their living standards.

Investing selectively allows you to enjoy tax benefits. By investing wisely you can improve your standard of living and create wealth for

the future

Factors which influence the decision of investment:

Past market trends

Sometimes history repeats itself; sometimes markets learn from their mistakes. You

need to understand how various asset classes have performed in the past before

planning your finances.

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Your risk appetite

The ability to tolerate risk differs from person to person. It depends on factors such as

your financial responsibilities, your environment, your basic personality, etc. Therefore,

understanding your capacity to take on risk becomes a crucial factor in investment

decision making.

Investment horizon

How long can you keep the money invested? The longer the time-horizon, the greater

are the returns that you should expect. Further, the risk element reduces with time.

Investible surplus

How much money are you able to keep aside for investments? The investible surplus

plays a vital role in selecting from various asset classes as the minimum investment

amounts differ and so do the risks and returns.

Investment need

How much money do you need at the time of maturity? This helps you determine

the amount of money you need to invest every month or year to reach the

magic figure.

Expected returns

The expected rate of returns is a crucial factor as it will guide your choice of investment.

Based on your expectations, you can decide whether you want to invest heavily into

equities or debt or balance your portfolio.

How to invest?

1. What are investors needs and financial goals? Do investors need a regular

income or want to buy a house or require funds for his/her child's education?

2. How much risk are investors willing to take on? Can investor withstand the

volatilities in the capital market or are investor satisfied with a low-risk, low-

returns philosophy?

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3. How soon do investors need the money? Can investor invest for a longer time-

horizon or do investors need money in the near future?

4. What are investors cash flow requirements? Do investors need a regular income

or a lump sum amount after a certain period of time?

When to invest

It's never too late or too early to start investing. The best time to invest is now. The 4

keys that could guide investor regarding when to invest are:-

1. Start investing early- Start early and retire rich. Invest whatever you can today

and move steadily towards a secure tomorrow.

2. Invest regularly- Invest regularly and methodically and let the magic of

compounding work for you.

3. Never time the market- Be a smart investor. Always invest in time but never try

to time the market. Timing the market is mastered by none and is beyond one's

control.

4. Be patient- For long-term wealth creation, you need to be patient. The longer the

investment horizon, the lesser is the risk and greater are the returns

Investment Options in India

Today choosing a best investment plan is difficult because there are so many

Investment options available. These days we are getting more money Compared to last

decades

1. Fixed deposits

2. Insurance policies

3. National saving certificate

4. Public provident fund

5. Stock market

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6. Mutual funds

7. Gold

8. Real estate

9. Equity

10. Investment in non resident ordinary (NRO) funds

11. Commodity

12. Currency investment

13. Investment in art

Investments in Bank Fixed Deposits (FD)

Fixed deposits are the instruments where an investor can invest his Money for a long

duration of time on a fixed rate of return. These types of instruments are generally

secured & have low risk. These instruments have low risk profile as this is a debt

instrument. Fixed Deposit or FD is accrues 8.5% of yearly profits, depending on thebank's tenure and guidelines, which makes it's widely sought after and safe investment

alternative. The minimum tenure of FD is 15 days and maximum tenure is 5 years and

above. Senior citizens are entitled for exclusive rate of interest on Fixed Deposits.

Investments in Insurance policies

Insurance features among the best investment alternative as it offers services to

indemnify your life, assets and money besides providing satisfactory and risk free

profits. Indian Insurance Market offers various investment options with reasonably

priced premium. Some of the popular Insurance policies in India are Home Insurance

policies, Life Insurance policies, Health Insurance policies and Car Insurance policies.

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Some top Insurance firm in India under whom you can buy insurance scheme are LIC,

SBI Life, ICICI Prudential, Bajaj Allianz, Birla Sun life, HDFC Standard Life, Reliance

Life, Max New York Life, MetLife, Tata AIG, Kotak Mahindra Life, ING Life Insurance,

etc.

Investments in National Saving Certificate (NSC)

National Saving Certificate (NSC) is subsidized and supported by government of India

as is a secure investment technique with a lock in tenure of 6 years. There is no utmost

limit in this investment option while the highest amount is estimated as Rs 100. The

investor is entitled for the calculated interest of 8% which is forfeited two times in a year.

National Saving Certificate falls under Section 80C of IT Act and the profit accrued by

the investor stands valid for tax deduction up to Rs 1, 00,000.

Investments in Public Provident Fund (PPF)

PPF is a scheme by government or some special Organizations for its employees. They

during their course of working can contribute to their PPF on monthly basis for a certain

period of time or until they are into service. This amount is given to the employee on his

retirement along with some interest. An investment of minimum Rs 500 and maximum

Rs 70, 000 is required to be deposited in a fiscal year. The prospective investor can

create it PPF account in a GPO or head post office or in any sub-divisions of the

centralizedbank.

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PPF also falls under Section 80C of IT Act so investors could gain income tax deduction

of up to Rs 1, 00,000. The rate of interest of PPF is evaluated yearly with a lock in

tenure of maximum 15 years. The basic rate of interest in PPF is 8%.

Investments in Stock Market

Investing in share market yields higher profits. Influenced by unanticipated turn of

market events, stock market to some extent cannot be considered as the safest

investment options. However, to accrue higher gains, an investor must update himself

on the recent stock market news and events.

Investments in Mutual Funds

A mutual fund is a professionally-managed form of collective investments

that pools money from many investors and invests in stocks, bond, short term money

market instruments, and/or other securities. In a mutual fund, the fund manager, who is

also known as the portfolio manager, trades the funds underlying securities, realizing

capital gains or losses, and collects the dividend or interest income.

Investments in Gold, Silver

Gold & Silver commodity markets are generally differentiated from other commodity

markets due to their high trade. Investment in gold & silver is beneficial in India because

their price varies according to seasons, with their cultural importance.

Investments in Real Estate

Real Estate Investment in India is one of most successful investment phenomenon in

the last few decades. Real Estate industry in India has reached a culmination point ever

since, the gates were opened to the foreign investors. This is the reason why many

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foreign investors are investing huge amounts of money in this sector.

The real estate developments in the country consist of the following:-

Constructing houses

Townships

Residential complexes

Office buildings

Shopping malls

IT PARK

Investments in Equity

Private Equity is expanding at a fast pace. India acquired US $13.5 billion in 2008 under

equity shares and featured among the top 7 nations in the world. In 2010, the total

equity investment is predicted to increase up to USD 20 billion. Indian equities promise

satisfactory returns and have more than 365 equity investments firms functioning under

it.

Investments in Non Resident Ordinary (NRO) funds

Investing in domestic (NRO) is one of the best investment alternatives for NRIs who

wish to deposit their income accrued abroad and maintain it in Indian rupees. The

deposited amount along with the interest is completely repatriable. Investment can be

done in Indian financial institutions including the Non Banking Finance Companies

which are listed with RBI. The interest returns accrued on in this account is entitled

under IT Act and is subject to 30% tax reduction at source including the appropriate

surcharge and education cess. The NRI investor can repatriate upto USD 1 million

every year, for genuine reasons, by forfeiting valid tariffs.

Investments in commodity

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Commodities mean all types of products. However, the Foreign Currency Regulation

Act (FCRA) defines them as 'every kind of movable property other than actionable

claims, money and securities.'

Commodity trading is nothing but trading in commodity spot and derivatives (futures). If

you are keen on taking a buy or sell position based on the future performance of

agricultural commodities or commodities like gold, silver, metals, or crude, then you

could do so by trading in commodity derivatives.

Commodity derivatives are traded on the National Commodity and Derivative Exchange

(NCDEX) and the Multi-Commodity Exchange (MCX). Gold, silver, agri-commodities

including grains, pulses, spices, oils and oilseeds, mentha oil, metals and crude are

some of the commodities that these exchanges deal in.

Investments in currency

The function of currency investment is much the same as it is investing in stocks when

and other sorts of investment opportunities. The ultimate goal is to buy low and sell

high. Unlike most types of investments, buying currency results in neither ownership of

a company or holding a debt of a company. If anything, it can be seen as buying an

obligation from another country. Once the currency is purchased, it can be kept on hand

in a physical form or simply treated as a digital asset.

Investment in art

Art as an investment avenue has been considered an interesting and profitable

alternative, but it is also extremely risky.

With uncertain stock market returns and interest rates at their lowest in decades,

nervous investors are now considering alternative investment avenues. Some of them

are hoping to find solace in alternative investments such as fine art, wine and even

stamps.

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These alternative investments' performance is alluring. Indices tracking the performance

of high-class art have held up well in the recent economic slowdown, while art-auction

houses report record prices.

Where earlier art was the preserve of only the artists and art aficionados, today it

replaces blue-chip stocks as an invest option. And financial institutions and art galleries

in the country have jumped onto the wagon and floated art funds.

While new entrants scope the offerings for investment opportunities, for art lovers today

buying art is not just about succumbing to a passion it also offers art aficionados the

added advantage of future returns, if the need occurs.

WHAT IS A MUTUAL FUND?

A mutual fund is just the connecting bridge or a financial intermediary that allows a

group of investors to pool their money together with a predetermined investment

objective. The mutual fund will have a fund manager who is responsible for investing the

gathered money into specific securities (stocks or bonds). When you invest in a mutual

fund, you are buying units or portions of the mutual fund and thus on investing becomes

a shareholder or unit holder of the fund.

Mutual funds are considered as one of the best available investments as compare to

others they are very cost efficient and also easy to invest in, thus by pooling money

together in a mutual fund, investors can purchase stocks or bonds with much lower

trading costs than if they tried to do it on their own. But the biggest advantage to mutual

funds is diversification, by minimizing risk & maximizing returns. The income earned

through these investments and the capital appreciations realized are shared by its unit

holders in proportion the number of units owned by them. Thus a Mutual Fund is themost suitable investment for the common man as it offers an opportunity to invest in a

diversified, professionally managed basket of securities at a relatively low cost. A

Mutual Fund is an investment tool that allows small investors access to a well diversified

portfolio of equities, bonds and other securities. Each shareholder participates in the

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gain or loss of the fund. Units are issued and can be redeemed as needed. The funds

Net Asset value (NAV) is determined each day.

Investments in securities are spread across a wide cross-section of industries and

sectors and thus the risk is reduced. Diversification reduces the risk because all stocks

may not move in the same direction in the same proportion at the same time. Mutual

fund issues units to the investors in accordance with quantum of money invested by

them. Investors of mutual funds are known as unit holders.

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When an investor subscribes for the units of a mutual fund, he becomes part owner of

the assets of the fund in the same proportion as his contribution amount put up with the

corpus (the total amount of the fund). Mutual Fund investor is also known as a mutual

fund shareholder or a unit holder. Any change in the value of the investments made into

capital market instruments (such as shares, debentures etc) is reflected in the Net Asset

Value (NAV) of the scheme. NAV is defined as the market value of the Mutual Fund

scheme's assets net of its liabilities. NAV of a scheme is calculated by dividing the

market value of scheme's assets by the total number of units issued to the investors.

ADVANTAGES OF MUTUAL FUND

Portfolio Diversification: Mutual Funds invest in a number of companies across

a broad cross-section of industries and sectors. This diversification reduces the

risk because seldom do all stocks decline at the same time and in the same

proportion. You achieve this diversification through a Mutual Fund with far less

money than you can do on your own.

Professional management: Mutual Funds provide the services of experienced

and skilled professionals, backed by a dedicated investment research team that

analyses the performance and prospects of companies and selects suitable

investments to achieve the objectives of the scheme.

Liquidity: In open-end schemes, the investor gets the money back promptly at

net asset value related prices from the Mutual Fund. In closed-end schemes, theunits can be sold on a stock exchange at the prevailing market price or the investor

can avail of the facility of direct repurchase at NAV related prices by the Mutual

Fund.

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Flexibility & Convenience: Mutual fund offers features such as regular

investment plans, regular withdrawal plans and dividend reinvestment plans; you

can systematically invest or withdraw funds according to your needs and

convenience.

Low cost: Mutual Funds are a relatively less expensive way to invest compared to

directly investing in the capital markets because the benefits of scale in brokerage,

custodial and other fees translate into lower costs for investors.

Tax benefit: Dividends given by equity oriented mutual funds are tax-free in the

hands of the investor. In case of Debt funds, the funds pay dividend distribution

tax.

Transparency: India mutual funds are regulated by the Securities and Exchange

Board of India, which helps provide comfort to the investors. Sebi forces

transparency on the mutual funds, which helps the investor make an informed

choice. Sebi requires the mutual funds to disclose their portfolios at least six

monthly, which helps you keep track whether the fund is investing in line with its

objectives or not.

However, most mutual funds voluntarily declare their portfolio once every month.

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DISADVANTAGE OF MUTUAL FUND

No Control over Costs: An investor in a mutual fund has any control over the

overall cost of investing. He/she has to pay investment management fees as long as

he/she remains with the fund. Fees are payable even while the value of the

investment may be declining.

No Tailor made Portfolios: Investors who invest on their own can build their own

portfolios of shares and bonds and other securities. Investing through fund means

he/she delegates this decision to the fund managers.

Managing a Portfolio of Funds: Availability of a large number of funds can actually

mean too much choice for the investor. He/she may again need advice on how to

select a fund to achieve his/her objectives, quite similar to the situation when he/she

has to select individual shares or bonds to invest in.

Entry and Exit Cost: When large bodies like a fund invest in shares, the

concentrated buying or selling often result in adverse price movements i.e. at the

time of buying, fund has to pay high and vice-versa.

No Guarantees: No investment is risk free. If the entire stock market declines in

value, the value of mutual fund shares will go down as well, no matter how balanced

the portfolio. Investors encounter fewer risks when they invest in mutual funds than

when they buy and sell stocks on their own.

ENTITIES INVOLVED IN MUTUAL FUNDS

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Regulatory Authorities

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To protect the interest of the investors, SEBI formulates policies and regulates the

mutual funds. It notified regulations in 1993 (fully revised in 1996) and issues guidelines

from time to time. MF either promoted by public or by private sector entities including

one promoted by foreign entities is governed by these Regulations.

SEBI approved Asset Management Company (AMC) manages the funds by making

investments in various types of securities. Custodian, registered with SEBI, holds the

securities of various schemes of the fund in its custody

According to SEBI Regulations, two thirds of the directors of Trustee Company or board

of trustees must be independent.

The Association of Mutual Funds in India (AMFI) reassures the investors in units of

mutual funds that the mutual funds function within the strict regulatory framework. Its

objective is to increase public awareness of the mutual fund industry.

AMFI also is engaged in upgrading professional standards and in promoting best

industry practices in diverse areas such as valuation, disclosure, transparency etc.

Working of Mutual Fund

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HISTORY OF THE INDIAN MUTUAL FUND INDUSTRY

The mutual fund industry in India started in 1963 with the formation of Unit Trust of

India, at the initiative of the Government of India and Reserve Bank. Though the growth

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was slow, but it accelerated from the year 1987 when non-UTI players entered the

Industry.

In the past decade, Indian mutual fund industry had seen a dramatic improvement, both

qualities wise as well as quantity wise. Before, the monopoly of the market had seen an

ending phase; the Assets Under Management (AUM) was Rs67 billion. The private

sector entry to the fund family raised the Aum to Rs. 470 billion in March 1993 and till

April 2004; it reached the height if Rs. 1540 billion.

The Mutual Fund Industry is obviously growing at a tremendous space with the mutual

fund industry can be broadly put into four phases according to the development of the

sector. Each phase is briefly described as under.

First Phase 1964-87

Unit Trust of India (UTI) was established on 1963 by an Act of Parliament by the

Reserve Bank of India and functioned under the Regulatory and administrative control

of the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial

Development Bank of India (IDBI) took over the regulatory and administrative control in

place of RBI. The first scheme launched by UTI was Unit.

Second Phase 1987-1993 (Entry of Public Sector Funds)

1987 marked the entry of non- UTI, public sector mutual funds set up by public sector

banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation

of India (GIC). SBI Mutual Fund was the first non- UTI Mutual Fund established in June

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1987 followed by Canbank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund

(Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda

Mutual Fund (Oct 92). LIC established its mutual fund in June 1989 while GIC had set

up its mutual fund in December 1990.At the end of 1993, the mutual fund industry had

assets under management of Rs.47,004 crores.

Third Phase 1993-2003 (Entry of Private Sector Funds)

The 1993 was the year in which the first Mutual Fund Regulations came into being,

under which all mutual funds, except UTI were to be registered and governed. The

erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first private

sector mutual fund registered in July 1993. The 1993 SEBI (Mutual Fund) Regulations

were substituted by a more comprehensive and revised Mutual Fund Regulations in

1996. The industry now functions under the SEBI (Mutual Fund) Regulations 1996. As

at the end of January 2003, there were 33 mutual funds with total assets of Rs.

1,21,805 crores.

Fourth Phase since February 2003

In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was

bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust

of India with assets under management of Rs.29,835 crores as at the end of January

2003, representing broadly, the assets of US 64 scheme, assured return and certain

other schemes The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB

and LIC. It is registered with SEBI and functions under the Mutual Fund Regulations.

Consolidation and growth. As at the end of September, 2004, there were 29 funds,

which manage assets of Rs.153108 crores under 421 schemes.

Diversification

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Diversification is nothing but spreading out your money across available or different

types of investments. By choosing to diversify respective investment holdings reduces

risk tremendously up to certain extent.

The most basic level of diversification is to buy multiple stocks rather than just one

stock. Mutual funds are set up to buy many stocks. Beyond that, you can diversify even

more by purchasing different kinds of stocks, then adding bonds, then international, and

so on. It could take you weeks to buy all these investments, but if you purchased a few

mutual funds you could be done in a few hours because mutual funds automatically

diversify in a predetermined category of investments (i.e. - growth companies, emerging

or mid size companies, low-grade corporate bonds, etc).

Types of Mutual Funds Schemes in India

Wide variety of Mutual Fund Schemes exists to cater to the needs such as financial

position, risk tolerance and return expectations etc. thus mutual funds has Variety of

flavors, Being a collection of many stocks, an investors can go for picking a mutual fund

might be easy. There are over hundreds of mutual funds scheme to choose from. It is

easier to think of mutual funds in categories, mentioned below.

Overview of existing schemes existed in mutual fund category:

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BY STRUCTURE

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1. Open - Ended Schemes:

An open-end fund is one that is available for subscription all through the year. These do

not have a fixed maturity. Investors can conveniently buy and sell units at Net Asset

Value ("NAV") related prices. The key feature of open-end schemes is liquidity.

2. Close - Ended Schemes:

These schemes have a pre-specified maturity period. One can invest directly in the

scheme at the time of the initial issue. Depending on the structure of the scheme there

are two exit options available to an investor after the initial offer period closes. Investors

can transact (buy or sell) the units of the scheme on the stock exchanges where they

are listed. The market price at the stock exchanges could vary from the net asset value

(NAV) of the scheme on account of demand and supply situation, expectations of

unitholder and other market factors. Alternatively some close-ended schemes provide

an additional option of selling the units directly to the Mutual Fund through periodic

repurchase at the schemes NAV; however one cannot buy units and can only sell units

during the liquidity window. SEBI Regulations ensure that at least one of the two exit

routes is provided to the investor.

3. Interval Schemes:

Interval Schemes are that scheme, which combines the features of open-ended and

close-ended schemes. The units may be traded on the stock exchange or may be open

for sale or redemption during pre-determined intervals at NAV related prices.

BY NATURE

1. Equity fund:

These funds invest a maximum part of their corpus into equities holdings. The structure

of the fund may vary different for different schemes and the fund managers outlook on

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different stocks. The Equity Funds are sub-classified depending upon their investment

objective, as follows:

Diversified Equity Funds

Mid-Cap Funds

Sector Specific Funds

Tax Savings Funds (ELSS)

Equity investments are meant for a longer time horizon, thus Equity funds rank high on

the risk-return matrix.

2. Debt funds:

The objective of these Funds is to invest in debt papers. Government authorities, private

companies, banks and financial institutions are some of the major issuers of debt

papers. By investing in debt instruments, these funds ensure low risk and provide stable

income to the investors. Debt funds are further classified as:

Gilt Funds: Invest their corpus in securities issued by Government, popularly

known as Government of India debt papers. These Funds carry zero Default risk

but are associated with Interest Rate risk. These schemes are safer as they

invest in papers backed by Government.

Income Funds: Invest a major portion into various debt instruments such as

bonds, corporate debentures and Government securities.

MIPs: Invests maximum of their total corpus in debt instruments while they take

minimum exposure in equities. It gets benefit of both equity and debt market.

These scheme ranks slightly high on the risk-return matrix when compared with

other debt schemes.

Short Term Plans (STPs): Meant for investment horizon for three to six months.

These funds primarily invest in short term papers like Certificate of Deposits

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(CDs) and Commercial Papers (CPs). Some portion of the corpus is also

invested in corporate debentures.

Liquid Funds: Also known as Money Market Schemes, These funds provides

easy liquidity and preservation of capital. These schemes invest in short-term

instruments like Treasury Bills, inter-bank call money market, CPs and CDs.

These funds are meant for short-term cash management of corporate houses

and are meant for an investment horizon of 1day to 3 months. These schemes

rank low on risk-return matrix and are considered to be the safest amongst all

categories of mutual funds.

3. Balanced funds:

As the name suggest they, are a mix of both equity and debt funds. They invest in both

equities and fixed income securities, which are in line with pre-defined investment

objective of the scheme. These schemes aim to provide investors with the best of both

the worlds. Equity part provides growth and the debt part provides stability in returns.

Further the mutual funds can be broadly classified on the basis of investment

parameter viz,

Each category of funds is backed by an investment philosophy, which is pre-defined in

the objectives of the fund. The investor can align his own investment needs with the

funds objective and invest accordingly.

By investment objective:

Growth Schemes: Growth Schemes are also known as equity schemes. The

aim of these schemes is to provide capital appreciation over medium to long

term. These schemes normally invest a major part of their fund in equities and

are willing to bear short-term decline in value for possible future appreciation.

Income Schemes: Income Schemes are also known as debt schemes. The aim

of these schemes is to provide regular and steady income to investors. These

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schemes generally invest in fixed income securities such as bonds and corporate

debentures. Capital appreciation in such schemes may be limited.

Balanced Schemes: Balanced Schemes aim to provide both growth and income

by periodically distributing a part of the income and capital gains they earn.

These schemes invest in both shares and fixed income securities, in the

proportion indicated in their offer documents (normally 50:50).

Money Market Schemes: Money Market Schemes aim to provide easy liquidity,

preservation of capital and moderate income. These schemes generally invest in

safer, short-term instruments, such as treasury bills, certificates of deposit,

commercial paper and inter-bank call money.

Other schemes

Tax Saving Schemes:

Tax-saving schemes offer tax rebates to the investors under tax laws prescribed from

time to time. Under Sec.88 of the Income Tax Act, contributions made to any Equity

Linked Savings Scheme (ELSS) are eligible for rebate.

Index Schemes:

Index schemes attempt to replicate the performance of a particular index such as the

BSE Sensex or the NSE 50. The portfolio of these schemes will consist of only those

stocks that constitute the index. The percentage of each stock to the total holding will be

identical to the stocks index weightage. And hence, the returns from such schemes

would be more or less equivalent to those of the Index.

Sector Specific Schemes:

These are the funds/schemes which invest in the 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

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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.

Types of returns

There are three ways, where the total returns provided by mutual funds can be enjoyed

by investors:

Income is earned from dividends on stocks and interest on bonds. A fund pays

out nearly all income it receives over the year to fund owners in the form of a

distribution.

If the fund sells securities that have increased in price, the fund has a capital

gain. Most funds also pass on these gains to investors in a distribution.

If fund holdings increase in price but are not sold by the fund manager, the fund's

shares increase in price. You can then sell your mutual fund shares for a profit. Funds

will also usually give you a choice either to receive a check for distributions or to

reinvest the earnings and get more shares.

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Why invest in Mutual Funds?

Mutual funds are popular investments, primarily because of their numerous benefits:

Diversification:

Mutual funds help you diversify your portfolio, or spread your money over a number of

different investments that are handpicked and tracked by professional money

managers. This strategy can help decrease risk to your portfolio because when your

investment return isn't dependent on any single investment, the impact of one poor

performer on your portfolio is reduced.

Convenience:

Mutual funds make investing easy and flexible by emphasizing convenience to the

investor in several ways:

Low minimum investment: Most mutual funds require low minimum investments

making it easy for investors to build a diverse portfolio fairly quickly.

Easy liquidity: You can cash in any or all of your mutual fund shares on any business

day. The value of your shares is based on the closing market price (net asset value, or

NAV) of the underlying securities.

Automatic reinvestment: You can automatically purchase more mutual fund shares

by reinvesting your dividends and capital gains distributions.

Systematic withdrawal: You can request that regular payments from systematically

selling shares be sent directly to you.

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Professional Management:

Experienced, full-time money managers manage each mutual fund. These professional

money managers:

Research general market and economic trends: Using the information they gather,

the fund's professional money managers decide when to buy or sell securities to

increase return potential and keep constant tabs on individual holdings and the overall

performance of particular markets, adjusting the portfolio for the strongest possible

performance.

Strive to achieve specific objectives: Because each fund h as a specific investment

objective, such as long-term growth or aggressive growth, managers can focus on the

strategic goals of their funds.

Financial benefits:

These include:

Mutual fund unit holders can earn dividends on their mutual fund units.

Unit holders can also profit from the sale of their units if they sell them for more than

their original value.

Unit holders can receive their dividend payments directly or reinvest them back into

the fund and purchase additional units.

Investment strategies

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1. Systematic investment plans (sip)

Investing regularly through a Systematic Investment Plan (SIP) in an equity fund is one

strategy that can ensure success to a large extent for those who are looking to build up

their capital over the longer term and are not familiar with equity markets. It is a proven

fact that a steady saving and investing plan helps pursue financial goals. What SIP

really means is that investor invests a fixed sum every month. When investor invest a

fixed amount, such as Rs.10000 a month,

Some of the Benefits of SIPs are as follows:

Rupee Cost Averaging:

SIP makes market timing irrelevant. In other words, you can invest a certain amount of

money every month at various entry prices buying fewer units when the share prices are

high and more units when the share prices are low. Besides, you take advantage of the

fact that over a period of time stock markets generally go up, so your average cost price

tends to fall below the average NAV. This "averaging" ensures that you buy at different

levels, not just the top.

Benefit of Compounding:

The profits you earn from your investments get reinvested. Therefore you earn returns

on your primary investments and reinvested profits.

Cost Effective Method of Investment:

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Instead of blocking your money by making a one-time investment, in an SIP, you can

spread the same amount over a certain period of time and maintain liquidity.

Building for the Future:

SIP is an effective method of ensuring regular savings and achieving your short-term or

long-term financial goals. It is also an excellent method of utilizing your funds, which

may be, otherwise, lying idle.

Step-wise Approach to an SIP:

Choose the amount you want to invest at each interval. (The amount must be

such that you will be comfortable investing regularly over the long term)

Choose the frequency of your investment - every month, every quarter, every six

months.

Continue investing the same amount each period irrespective of whether themarket falls or rises.

Maintain a long-term perspective. Ignore the day-to-day fluctuations in the

market.

Keep investing over a long period of time to give your money a chance to grow.

2. Systematic Transfer Plan:

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Under this an investor invests in debt oriented fund and gives instructions to transfer

a fixed sum, at a fixed interval, to an equity scheme of the same mutual fund.

3. Systematic Withdrawal Plan:

If someone wishes to withdraw from a mutual fund then he can withdraw a fixed

amount each month.

4. Lump sum investment:

In this type of investment, investor invests the money at one time only. Say you have

Rs. 10 lakh with you and you decide to invest the entire amount in stocks or mutual

funds or gold together then you are making lump sum investments. What you get in

return are units (if you are buying into a mutual fund) at the then prevailing net asset

value(NAV).

Risk Involved in Mutual Funds

All investments involve some form of risk, which should be evaluated them potential

Rewards when an investment is selected.

Managing risk

At times the prices or yields of all the securities in a particular market rise or fall

due to broad outside influences. When this happens, the stock prices of both an

outstanding, highly profitable company and a fledgling corporation may be

affected. This change in price is due to market risk.

Interest rate risk

Sometimes referred to as loss of purchasing power. Whenever inflation sprints

forward faster than the earnings on your investment, you run the risk that you will

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actually be able to buy less, not more. Inflation risk also occurs when prices rise

faster than your returns.

Credit risk

In short, how stable is the company or entity to which you lend your money when

you invest? How certain are you that it will be able to pay the interest you are

promised, or repay your principal when the investment matures?

Investment risks

The sectoral fund schemes, investments will be predominantly in equities of

select

Companies in the particular sectors. Accordingly, the NAV of the schemes are

linked to the equity performance of such companies and may be more volatile

than a more diversified portfolio of equities.

Changes in government policy

Changes in Government policy especially in regard to the tax benefits mayimpact the business prospects of the companies leading to an impact on the

investments made by the fund.

Risk vs. Return

When you choose to invest in a mutual fund, it is important to consider how that fund

will fit into your investment strategy. An investment in a mutual fund should not depend

entirely on the mutual fund's returns; risk and diversification in the context of your

portfolio are also other important factors to consider.

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As you can see from the diagram above, Money Market Funds and Capital Preservation

Funds tend to be the lowest risk; however they also offer the lowest returns. Income

Funds such as bond and mortgage funds tend to be more risky than Capital

Preservation Funds, but less risky than Growth and Income Funds. Aggressive Growth

funds have the potential for the highest return, but are also the highest risk asset class.

Snapshot of mutual fund schemes:

The following table summarizes different types of mutual fund schemes, their objective,

where do they invest and their risk:

MutualFund

Type

Objective Risk InvestmentPortfolio

Who should invest Investmenthorizon

MoneyMarket

Liquidity +

Moderate

Negligible Treasury Bills,

Certificate of

Those who park

their funds in

2 days - 3

weeks

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Income +

Reservation of

Capital

Deposits,

Commercial

Papers, Call

Money

current accounts or

short-term bank

deposits

Short-term

Funds(Floating -

short-

term)

Liquidity +

ModerateIncome

Little

InterestRate

Call Money,

CommercialPapers,

Treasury Bills,

CDs, Short-term

Government

securities.

Those with surplus

short-term funds

3 weeks -

3 months

Bond

Funds(Floating -

Long-

term)

Regular

Income

Credit Risk

& Interest

Rate Risk

Predominantly

Debentures,

Government

securities,

Corporate

Bonds

Salaried &

conservative

investors

More than

9 - 12

months

Gilt Funds Security &Income

Interest

Rate Risk

Government

securities

Salaried &

conservative

investors

1 year and

more

EquityFunds

Long-term

Capital

Appreciation

High Risk Stocks Aggressive

investors with long

term outlook

> 3 years

Index

Funds

To generate

returns thatare

commensurate

with returns

of respective

indices

NAV varies

with indexperformance

Portfolio indices

like BSE,NIFTY etc

Aggressive

investors

> 3 years

BalancedFunds

Growth &

Regular

Income

Capital

Market Risk

and Interest

Rate Risk

Balanced ratio

of equity and

debt funds to

ensure higher

returns at lower

risk

Moderate &

Aggressive

> 2 years

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.

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Chapter 2

About KARVY

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Company profile

KARVY, is a premier integrated financial services provider, and ranked among the top

five in the country in all its business segments, services over 16 million individualinvestors in various capacities, and provides investor services to over 300 corporate,

comprising the who is who of Corporate India. KARVY covers the entire spectrum of

financial services such as Stock broking, Depository Participants, Distribution of

financial products - mutual funds, bonds, fixed deposit, equities, Insurance Broking,

Commodities Broking, Personal Finance Advisory Services, Merchant Banking &

Corporate Finance, placement of equity, IPOs, among others. Karvy has a professional

management team and ranks among the best in technology, operations and research of

various industrial segments.

It is a member of all three:-

National Stock Exchange (NSE)

Bombay Stock Exchange (BSE)

Hyderabad Stock Exchange (HSE)

Karvy utilized its experience and superlative expertise to capitalize on its strengths andbetter its service, innovate and provide new ones. It diversified in the process and thus

evolved as Indias premier integrated financial service enterprise. Karvy has been a

customer centric company since its inception. It offers a single platform servicing

multiple financial instruments in its bid to offer complete financial solutions to the varying

needs of both corporate and retail investors, where an extensive range of services are

provided with great volume-management capability

Karvy early days:

The birth of Karvy was on a modest scale in 1981. It began with the vision & enterprise

of a small group of practicing Chartered Accountants who founded the flagship

company Karvy Consultants Limited. It started with consulting and financial

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accounting automation, and carved inroads into the field of registry and share

accounting by 1985. Since then, It has utilized its experience and superlative expertise

to go from strength to strengthto make better services, to provide new ones, to

innovate, diversify and in the process, evolved Karvy as one of Indias premier

integrated financial service enterprise. Thus over the last 20 years Karvy has traveled

the success route, towards building a reputation as an integrated financial services

provider, offering a wide spectrum of services. And it has made this journey by taking

the route of quality service, path breaking innovations in service, versatility in service

and finallytotality in service. Its highly qualified manpower, cutting-edge technology,

comprehensive infrastructure and total customer-focus has secured for it the position of

an emerging financial services giant enjoying the confidence and support of an enviable

clientele across diverse fields in the financial world. Its values and vision of attaining

total competence in their servicing has served as the building block for creating a great

financial enterprise, which stands solid on our fortresses of financial strength - its

various companies.

With the experience of years of holistic financial servicing behind it and years of

complete expertise in the industry to look forward to, it has now emerged as a premierintegrated financial services provider.

And today, it can look with pride at the fruits of its mastery and experience

comprehensive financial services that are competently segregated to service and

manage a diverse range of customer requirements. Karvy consultant is one of Indias

premier investment consultancy firms offering personalized investment planning,

advisory and prompt facilitation services to retail investors, corporate and institutions. It

started in the year 1979 as karvy and company and later emerged as a karvy consultant

to cater to specialized and personal services. The company has a long track record and

history of being transparent and trust worthy with its customers.

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The flagship company, Karvy Consultants Limited was found with the vision and

enterprise of a group of practicing Chartered Accountants on a modest scale in 1981 in

Hyderabad, where it now has 13 branches. It initiated with just one activity and later

carved roads into fields of registry and share accounting as well. From then there was

no stopping at all. A decade of commitment, professional integrity and vision helped

Karvy achieve a leadership position in its field. It is known to handle the largest number

of issues ever in the history of the Indian stock market in a particular year. Thereafter,

Karvy made inroads into a host of capital market services, corporate and retail which

proved to be a sound business synergy.

Today Karvy has access to millions of Indian shareholders, besides companies, banks,

financial institutions and regulatory agencies. Over the past one and half decades,

Karvy has involved as a veritable link between industry, finance and people. In January

1998, Karvy became the first Depository Participant in Andhra Pradesh.

An ISO 9002 company, Karvys commitment to quality and retail reach has made it an

integrated financial services company. A SEBI category 1 registrar, so far Karvy has

handled over 675 issues as Registrars to public issues, processed over 52 million

applications and is servicing over 16 million investors from various locations spread

over 205 cities.

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Evolution of karvy:

1979-1980 Karvy and company

1981 - 1982 Karvy consultant ltd

1985 - 1986 Foray into capital market as registrars and transfer agent

1987 -1988 First branch in Mumbai

1990 Entry into retail broking

1994 Entry into mutual fund services

1995 Corporate finance and investment banking

1996 Jardine Fleming invests in group companies

1997 First registrar in the country to be awarded ISO 9002.

2002 Launch of private client group (PCG ) desk

2004 Jv with computer share limited, Australia.

2004 merger of karvy securities ltd with karvy stock broking ltd.

2007 karvy insurance broking pvt ltd.

Karvy has traveled a success route over the past 20 years and positioned itself as an

emerging financial service giant in which embeds the confidence and support of

enviable patrons across the financial world. Patrons are also of diversified fields which

includes over 16 million individual investors in various capacities and 300 corporate

comprising the best out of the whole lot .Years of experience of holistic financial

services and expertise in this industry has helped it gain the status it enjoys and

cherishes today.

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VISION STATEMENT

Karvys aspiration of establishing itself as an integrated financial services co is propelled

bya vision that is shared by the entire work force. Towards this end Karvy is dedicated

itself to:

Having a single minded focus on investor services.

Establish as a house hold name for financial services.

Set industrial standards.

MISSION

Our mission is to be a leading and preferred service provider to our customers,

and we aim to achieve this leadership position by building an innovative,

enterprising , and technology driven organization which will set the highest

standards of service and business ethics

ACHIEVEMENTS:

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Among the top 5 stock brokers in India (4% of NSE volumes)

India's No. 1 Registrar & Securities Transfer Agents

Among the to top 3 Depository Participants

Largest Network of Branches & Business Associates

ISO 9002 certified operations by DNV

Among top 10 Investment bankers

Largest Distributor of Financial Products

Adjudged as one of the top 50 IT uses in India by MIS Asia

Full Fledged IT driven operations

VALUES:

Trust

Integrity

Dedication

Commitment

Transparency

Enterprise

Hard work and team play

Learning & innovation

Empathy and humility

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KARVY WINGS:

As discussed earlier, KARVY offers a single platform servicing multiple financial

instruments in its bid to offer complete financial solutions to the varying needs of both

corporate and retail investors. The range of products and services are provided by the

following wings.

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This is the flagship company of Karvy Group and it controls the organizational affairs,

channels of progress, work affairs and pioneering business policies. This was the first

business the KARVY group ventured into, but now they have transferred it into a joint

venture with computer share limited of Australia, the worlds largest registrar. This

company services around 6 lakh customer accounts in a spread of 250 cities/towns in

India.

This wing of Karvy is registered with SEBI as a category 1 merchant banker and is also

recognized as a leading merchant banker of the country. It has built its reputation by

capitalizing the opportunities as and when it comes, be it in corporate consolidations,

mergers and acquisitions or corporate restructuring. Involvement in raising resources for

corporate or government undertaking successfully over the past two decades has given

it a tremendous confidence boost.

This wing of Karvy has traversed wide spaces to tie up with the worlds largest transfer

Agent, the leading Australian company Computer share Limited. This company services

More than 75 million shareholders across 7000 clients and makes its presence felt in

over

12 countries across 5 continents. It has also entered into a 50-50 joint venture with

Karvy. After transferring completely to this new entity it has tried to enrich the financial

services industry as a whole. The worldwide network of Computer share helps it to

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adapt to the international standards in addition to leveraging the best technologies from

all over the world.

This is a specialist Business Process Outsourcing unit of the Karvy Group. The legacy

of experience in financial services of Karvy Group acts as a big support for entering the

global arena with confidence of delivering the best. This wing offers several models on

the understanding of business needs that are unique and therefore only a customized

service could possibly fit the bill. Their service matrix has permutations and

combinations that create several options to choose from. Its Services meet the most

stringent International standards, be it re-engineering and managing processes or

delivering new efficiencies.

Karvy Commodities focuses on taking commodities trading to new dimensions of

reliability and profitability. They have made commodities trading, an essentially age-old

practice, into a sophisticated and scientific investment option. It helps in enabling trade

in all goods and products of agricultural and mineral origin that include lucrative

commodities like gold and silver and popular items like oil, pulses and cotton through a

well-systematized trading platform.

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Karvy Insurance Broking Pvt. Ltd., provides both life and non-life insurance products to

retail individuals, high net-worth clients and corporate. With the opening up of the

insurance sector and entry of a large number of private players in the business, it is in a

position to provide tailor made policies for different segments of customers.

KARVY Stock Broking Limited, one of the cornerstones of the KARVY edifice, flowsfreely towards attaining diverse goals of the customer through varied services. It creates

a plethora of opportunities for the customer by opening up investment vistas backed by

research-based advisory services. Here, growth knows no limits and success

recognizes no boundaries. Helping the customer create waves in his portfolio and

empowering the investor completely is the ultimate goal. KARVY Stock Broking Limited

is a member of: 1) National Stock Exchange (NSE) , 2) Bombay Stock Exchange (BSE).

(Karvy.com)

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Organization structure:

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Chapter 3

Research Methodology

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Research Methodology

OBJECTIVE OF THE STUDY:

1. To analyze the different mutual fund schemes of top 5 companies.2. To analyze the investment pattern in mutual fund schemes (lump sump or

systematic investment plan).3. To analyze the different options of mutual funds.4. To compare the mutual fund schemes on the basis of CORPUS, NAV (NET

ASSET VALUE), and RETURNS.5. To analyze the risk- return relationship of various schemes of mutual fund of

different companies.

METHODOLOGY:

Primary and secondary data both.

For primary data, I will take the help of department which deals in a mutual fundonly. And for secondary data, I will take the data from the internet, brochures andmagazine of karvy.

SIGNIFICANCE OF STUDY:

1. Market performance of various mutual fund schemes of top 5 companies.2. Factors that should be considered by investor before investing in mutual

funds.3. Risk involved in sectoral investment (how much risk is there if the fund of

investor is invested in a specific sector.)4. To find out which is the best scheme of mutual fund where the amount of

investor should be invested on the basis of performance of companies in past5 years.

5. Why the investor should invest in a mutual fund schemes rather than fixeddeposits or any other related schemes.

LIMITATIONS:

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1. Difficulty in finding the primary data.2. As the data is based on the past information, so the prediction made maybe not accurate.3. As the data is provided on an approximate basis.

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CHAPTER 4

Case study

(Top 5 companies of mutual funds)

HDFC MUTUAL FUND

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HDFC Mutual Fund is governed by HDFC Asset Management Company Limited (AMC).

The HDFC mutual fund was approved by SEBI in June 2000. Equity Funds, Balanced

Funds, and Debt Funds are the mutual fund schemes offered by HDFC Mutual Fund.

An Overview of HDFC Mutual Fund-

HDFC Mutual Fund has witnessed significant growth in the past few years. It is

regulated by HDFC Asset Management Company Limited (AMC) which works as an

Asset Management Company (AMC) for HDFC Mutual Fund. HDFC Asset Management

Company Limited (AMC) is a Joint Venture concern between the large-scale housing

finance company HDFC and British investment firm Standard Life Investments Limited.

The HDFC Asset Management Company Limited conducts the activities carried out bythe HDFC Mutual Fund and manages the assets of various mutual fund schemes. The

August 2006 report states that the fund has assets of Rs. 25,892 crores under Asset

Management Company (AMC).

HDFC Asset Management Company Limited (AMC) entered into an agreement with

Zurich Insurance Company (ZIC) with the aim to develop the asset management

business in India in the year 2003. Following to this, all the mutual fund schemes of

Zurich Mutual Fund in India got transferred to HDFC Mutual Fund and gained the name

of HDFC schemes.

Details of HDFC Mutual Fund

HDFC Asset Management Company Ltd (AMC) was set up on December 10, 1999

under the Companies Act, 1956. It got the approval to function as an Asset

Management Company for the HDFC Mutual Fund by SEBI on June 30, 2000. AMC

was appointed in order manage the HDFC Mutual Fund. The registered office of HDFCAsset Management Company Limited (AMC) is located at Ramon House, 3rd Floor,

H.T. Parekh Marg, 169, Backbay Reclamation, Churchgate, Mumbai - 400 020.

Schemes of HDFC Mutual Fund

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HDFC Equity Fund.

HDFC Prudence Fund

HDFC Capital Builder Fund

HDFC Tax Saver

HDFC Top 200 Fund

HDFC High Interest Fund

HDFC Cash Management Fund

HDFC Sovereign Gilt Fund

Equity Funds, Balanced Funds, and Debt Funds are the broad categories of mutual

fund schemes offered by HDFC Mutual Fund.

Key Statistics

As on 30 April 2010

Average Asset under Management - 94702.79 cr. rs

No. of investors - 39, 37,323

No. of ARN certified distributors - 34,920

Products

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Equity / Growth Fund

Invest primarily in equity and

equity related instruments.

Children's Gift Fund

Children's Gift Fund

Fixed Maturity PlanInvest primarily in Debt / Money

Market Instruments andGovernment Securities...

Liquid Funds

Provide high level of liquidity byinvesting in money market and

debt instruments.

Debt/ Income Fund

Invest in money market and debtinstruments and provide optimum

balance of yield, ...

Quarterly Interval FundThe primary objective of the

Scheme is to generate regular

income through investme...

Exchange Traded Funds

Invest primarily in equity and

equity related instruments.

.

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Competitors of HDFC mutual fund

Some of the main competitors are as follows:

ICICI Mutual Fund

Reliance Mutual Fund

UTI Mutual Fund

Birla Sun Life Mutual Fund

Kotak Mutual Fund

SBI Mutual Fund

Sundaram Mutual Fund

LIC Mutual Fund

AWARDS AND ACHIEVEMENTS

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ICRA Mutual Fund Awards 2010

ICRA Gold Award for 'Best Performance' - Seven Star Fund Ranking

HDFC Prudence Fund has been ranked A Seven Star Fund" and has been

awarded Gold Award for 'Best Performance' in the category of Open Ended

Balanced for one year period ending December 31, 2009 (from amongst 24

schemes).

HDFC MF Monthly Income Plan - Long Term Plan has been ranked A Seven Star

Fund" and has been awarded Gold Award for'Best Performance' in the category

of Open Ended Marginal Equity for one year period ending December 31, 2009

(from amongst 46 schemes).

HDFC High Interest Fund - Short Term Plan has been ranked A Seven Star

Fund" and has been awarded Gold Award for 'Best Performance' in the category

of Open Ended Debt - Short Term for three year period ending December 31, 2009

(from amongst 17 schemes).

ICRA Five Star Fund Ranking

HDFC Multiple Yield Fund - Plan 2005 has been ranked A Five Star Fund

indicating performance among top 4.6% in the category of Open Ended Marginal Equity

for one year period ending December 31, 2009 (from amongst 46 schemes).

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HDFC MF Monthly Income Plan - Long Term Plan has been ranked A Five Star

Fund indicating performance among top 4.6% in the category of Open Ended Marginal

Equity for three year period ending December 31, 2009 (from amongst 43 schemes).

HDFC Cash Management Fund - Savings Plan has been ranked A Five StarFund

indicating performance among top 4.6% in the category of Open Ended Liquid for one

year period ending December 31, 2009 (from amongst 29 schemes).

Lipper Fund Awards 2010

HDFC Equity Fund - Growth Option was awarded the BestFund over Ten Years in the Equity India Category (from

amongst 53 schemes) for the 10 year period ending

December 31, 2009 at Lipper Fund Awards 2010 (India).

HDFC Prudence Fund Growth Option was awarded the Best Fundfor over Five

years in the Mixed Asset INR Aggressive category (from amongst 24 schemes) for

the 5 year period ending December 31, 2009 at Lipper Fund Awards 2010 (India).

HDFC Prudence Fund - Growth Option was awarded the Best Fund over Ten Years

in the Mixed Asset INR Aggressive category (from amongst 10 schemes) for the 10

year period ending December 31, 2009 at Lipper Fund Awards 2010 (India).

HDFC MF Monthly Income Plan Long Term Plan - Growth Option was awarded the

Best Fund over Three Years in the Mixed Asset INR Conservative category (from

amongst 58 schemes) for the 3 year period ending December 31, 2009 at Lipper FundAwards 2010 (India).

CNBC TV18 - CRISIL Mutual Fund Awards

2010

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HDFC Top 200 Fund was among the only two schemes that won the Best Performing

Mutual Fund of the Year Award in the Large Cap Oriented Funds category at CNBC

TV18 - CRISIL Mutual Fund Awards 2010 for the calendar year 2009 (from amongst24 schemes)

HDFC Cash Management Fund - Treasury Advantage Plan was among the only two

schemes that won the Best Performing Mutual Fund of the Year Award # in the

Ultra Short Term Debt Funds category at CNBC TV18 - CRISIL Mutual Fund Awards

2010 for the calendar year 2009 (from amongst 28 schemes).

ICICI MUTUAL FUND

ICICI Prudential Asset Management Company enjoys the

strong parentage of Prudential plc, one of UK's largest

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players in the insurance & fund management sectors and ICICI Bank, a well-known and

trusted name in financial services in India. ICICI Prudential Asset Management

Company, in a span of just over eight years, has forged a position of pre-eminence in

the Indian Mutual Fund industry as one of the largest asset management companies in

the country with average assets under management of Rs. 83,069.89 Crore (as of April

30, 2010). The Company manages a comprehensive range of schemes to meet the

varying investment needs of its investors spread across 230 cities in the country

Securities and Exchange Board of India, vide its letter no. MFD/PM/567/02 dated June

4, 2002, has accorded its approval in recognizing ICICI Bank Ltd. as a co-sponsor

consequent to the merger of ICICI Ltd. with ICICI Bank Ltd.

ICICI Bank is India's second-largest bank with total assets of Rs. 3,997.95 billion (US$

100 billion) at March 31, 2008 and profit after tax of Rs. 41.58 billion for the year ended

March 31, 2008. ICICI Bank is second amongst all the companies listed on the Indian

stock exchanges in terms of free float market capitalization Free float holding excludes

all promoter holdings, strategic investments and cross holdings among public sector

entities. The Bank has a network of about 1,308 branches and 3,950 ATMs in India and

presence in 18 countries. ICICI Bank offers a wide range of banking products and

financial services to corporate and retail customers through a variety of delivery

channels and through its specialized subsidiaries and affiliates in the areas of

investment banking, life and non-life insurance, venture capital and asset management.

The Bank currently has subsidiaries in the United Kingdom, Russia and Canada,

branches in Unites States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai

International Finance Centre and representative offices in United Arab Emirates, China,

South Africa, Bangladesh, Thailand, Malaysia and Indonesia. Our UK subsidiary has

established branches in Belgium and Germany. ICICI Bank's equity shares are listed in

India on Bombay Stock Exchange and the National Stock Exchange of India Limited

and its American Depositary Receipts (ADRs) are listed on the New York Stock

Exchange (NYSE).

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Headquartered in London, Prudential plc and its affiliated companies together constitute

one of the world's leading financial services groups. Prudential provides insurance and

financial services in a number of markets around the world, including in Asia, the US,

the UK, Europe and the Middle East. Founded in 1848, the company has 249 billion in

funds under management (as of 31 December 2008) and more than 21 million

customers worldwide.

Prudential has been writing life insurance in the United Kingdom for 160 years and has

had the largest long-term fund in the United Kingdom, for over a century. In the United

Kingdom, Prudential is a leading retirement savings and income solutions and life

assurance provider. M&G is Prudential's fund management business in the United

Kingdom and Europe, with almost 140 billion in funds under management (as of 31

December 2008). In the United States, Jackson National Life, which we acquired in

1986, is one of the largest life insurance companies providing retirement savings and

income solutions.

In Asia, Prudential is the leading Europe-based life insurer in terms of market coverage

and number of top three ranking positions. It is also one of the largest and most

successful fund managers in Asia with more top five market rankings than any other

regional player. Today, Prudential has life insurance and fund management operations

spanning 13 diverse markets in Asia.

Prudential plc is incorporated and with its principal place of business in the United

Kingdom. It is not affiliated in any manner with Prudential Financial, Inc., a company

whose principal place of business is in the United States.

Key indicators

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Kotak Mutual Fund

SBI Mutual Fund


LIC Mutual Fund

Awards and achievements

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CNBC TV18 - CRISIL Mutual Fund Awards 2010

Debt fund house of the year

Lipper Fund Awards 2010

ICICI Prudential dynamic plan

Mixed asset INR flexible

ICRA Mutual Fund Awards 2010

ICICI Prudential tax plan

Open ended equity - tax planning

RELIANCE MUTUAL FUND

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Reliance Mutual Fund (RMF) is one of Indias leading Mutual Funds, with Average

Assets under Management (AAUM) of Rs. 1, 01,320 Crores and an investor count of

over 74 Lakh folios. (AAUM and investor count as of June 2010).

Reliance Mutual Fund, a part of the Reliance - Anil Dhirubhai Ambani Group, is one of

the fastest growing mutual funds in the country. RMF offers investors a well-rounded

portfolio of products to meet varying investor requirements and has presence in 159

cities across the country. Reliance Mutual Fund constantly endeavors to launch

innovative products and customer service initiatives to increase value to investors.

"Reliance Mutual Fund schemes are managed by Reliance Capital Asset Management

Limited., a subsidiary of Reliance Capital Limited, which holds 93.37% of the paid-up

capital of RCAM, the balance paid up capital being held by minority shareholders."

Reliance Capital Ltd. is one of Indias leading and fastest growing private sector

financial services companies, and ranks among the top 3 private sector financial

services and banking companies, in terms of net worth. Reliance Capital Ltd. has

interests in asset management, life and general insurance, private equity and

proprietary investments, stock broking and other financial services.

It is one of the fastest growing mutual funds in India having doubled its assets over the

last one year. In March, 2006, the Reliance mutual fund emerged as the largest private

sector fund house in the country, overtaking Prudential ICICI which has been holding

that position for many years.

The sponsor of the fund is Reliance Capital Limited, the financial services arm of ADAG.

Reliance Capital Asset Management Limited, a wholly owned subsidiary of Reliance

Capital Limited, acts as the AMC to the fund. Directors of the company include Amitabh

Jhunjhunwala, a senior executive of ADAG. Amitabh Chaturvedi is the managing

director of the AMC.

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As of end August 2006, Reliance mutual fund has Rs 28,753 crore of assets under

management. Reliance Equity Fund, launched by Reliance MF in early 2006, is the

largest mutual find scheme in the country with a fund size of over Rs 5,500 crore.

Our Corporate Governance Policy:

Reliance Capital Asset Management Ltd. has a vision of being a leading player in the

Mutual Fund business and has achieved significant success and visibility in the market.

However, an imperative part of growth and visibility is adherence to Good Conduct in

the marketplace. At Reliance Capital Asset Management Ltd., the implementation and

observance of ethical processes and policies has helped us in standing up to the

scrutiny of our domestic and international investors.

Management:

The management at Reliance Capital Asset Management Ltd. is committed to good

Corporate Governance, which includes transparency and timely dissemination of

information to its investors and unit holders. The Board of Directors of RCAM is a

professional body, including well-experienced and knowledgeable Independent

Members. Regular Audit Committee meetings are conducted to review the operations

and performance of the company.

Reliance Mutual Fund schemes are managed by Reliance Capital Asset Management

Limited., a subsidiary of Reliance Capital Limited, which holds 93.37% of the paid-up

capital of RCAM, the balance paid up capital being held by minority shareholders.

Reliance Mutual Fund (RMF) has been sponsored by Reliance Capital Ltd (RCL). The

promoter of RCL is AAA Enterprises Private Limited. Reliance Capital Limited is a Non

Banking Finance Company. Reliance Capital Limited is one of the Indias leading and

fastest growing financial services companies, and ranks among the top three private

sector financial services and banking companies, in terms of net worth.

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Reliance Capital has interests in asset management and mutual funds, life and non-life

insurance, private equity and proprietary investments, stock broking and other activities

in the financial services sector.

Key indicators

As on June 2010

Average Asset under Management - Rs. 1, 01,320 Crores

No. of investors - 74 lakh

Schemes:

Equity/Growth Schemes

The aim of growth funds is to provide capital appreciation over the medium to long-

term.

Such schemes normally invest a major part of their corpus in equities. Such funds have

Comparatively high risks. These schemes provide different options to the investors like

Dividend option, capital appreciation, etc. and the investors may choose an option

Depending on their preferences. The investors must indicate the option in the

application

Form. The mutual funds also allow the investors to change the options at a later date.

Growth schemes are good for investors having a long-term outlook seeking appreciation

over a period of time.

Debt /income schemes

The aim of income funds is to provide regular and steady income to investors. Such

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schemes generally invest in fixed income securities such as bonds, corporate

debentures, Government securities and money market instruments. Such funds are less

risky compared to equity schemes. These funds are not affected because of fluctuations

in equity markets. However, opportunities of capital appreciation are also limited in such

funds. The NAVs of such funds are affected because of change in interest rates in the

country. If the interest rates fall, NAVs of such funds are likely to increase in the short

run and vice versa. However, long term investors may not bother about these

fluctuations.

Sector Specific 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.

Exchange Traded Funds (ETFs)

Exchange Traded Funds (ETFs) are usually passively managed mutual fund schemes

tracking a benchmark index and reflect the performance of that index. These schemes

are listed on the stock exchange and therefore have the flexibility of trading like a share

on the stock exchange. It can also be looked as a security that tracks an index, a

commodity or a basket of assets like an index fund, but trades like a stock on an

exchange, thus experiencing price changes throughout the day as it is bought and sold.

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Fixed Maturity Plans (FMPs)

Fixed Maturity Plans (FMPs) are basically debt oriented investment schemes with a pre-

specified tenure offered by mutual funds. FMPs invest in a portfolio of debt instruments

whose maturity coincides with the maturity of the concerned FMP. The primary objective

of a FMP is to generate income while aiming to protect the capital by investing in a

portfolio of debt and money market securities. Since FMPs are available with several

maturity options, one can invest in the relevant plan depending upon his investment

horizon and the requirement of cash flows.

Competitors of Reliance mutual fund

Some of the main competitors are as follows:

ICICI Mutual Fund

HDFC Mutual Fund

UTI Mutual Fund

Birla Sun Life Mutual Fund

Kotak Mutual Fund

SBI Mutual Fund


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LIC Mutual Fund

Awards and achievements

Reliance Capital Asset Management Limited has won the prestigious US based,

2010 CIO 100 award. The 2010 CIO 100 Awards is presented by the CIO magazine &

honors 100 companies worldwide that are creating new business value by innovating

with technology.

Vinay Nigudkar, CTO, Reliance Capital Asset Management Limited has been

awarded this honor for implementation of the CRM next System that integrates sales

force automation, lead management, customer service and other sales and analysis

applications.

CNBC TV18 - CRISIL Mutual Fund of the Year

Award for 2009:

Reliance Mutual Fund has won the CNBC TV18 - CRISIL Mutual

Fund of the Year Award in the Category Mutual Fund House of the Year (Awarded

by CRISIL Fund Services, CRISIL Limited)

Asia Manager for the year 2009:

Reliance Capital Asset Management Limited has been awarded Asset Manager for

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theyear 2009 i.e. from July 2008 to July 2009 at Asia Risk Awards 2009 by Incisive

Media Publishing Limited

INTRODUCTION TO SBI MUTUAL FUND

SBI Funds Management Pvt. Ltd. is one of the leading fund

houses in the country with an investor base of over 4.6

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million and over 20 years of rich experience in fund management consistently delivering

value to its investors. SBI Funds Management Pvt. Ltd. is a joint venture between 'The

State Bank of India' one of India's largest banking enterprises, and Sociate general

Asset Management (France), one of the world's leading fund management companies

that manages over US$ 500 Billion worldwide. Today the fund house

Finance project mba

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