mf jesw

7/28/2019 mf jesw

1/78

A PROJECT REPORT ON

MUTUAL FUND

WITH SPECIAL REFERENCE TO

KARVY (HYDERABAD)

(Submitted in Partial Fulfillment of the Award of the Degree

Of

MASTER OF BUSINESS ADMINISTRATION

Submitted By

T.JASWANTHIM.B.A

H.T NO: 112G1E00A5

Under The Guidance Of

Mrs. ANNAPURNA

M.B.A (ASST.PROF)

DEPARTMENT OF MANAGEMENT STUDIES

ANANTHA LAKSHMI INSTITUTE OF SCIENCE&TECHNOLOGY

(AFFILIATED TO JNT UNIVERSITY)

ANANTAPUR DIST

2011-2013

7/28/2019 mf jesw

2/78

DECLARATION

I here declare that the project report entitled A STUDY ON MUTUAL

FUND has been prepared by me in partial fulfillment of the requirements for the

award of the degree of MASTER OF BUSINESS ADMINISTRATION

I also declare that this project work is a result of my effort and it has not been

submitted to any other university for the award of any degree or diploma.

PLACE:

DATE:

T.JASWANTHIH.T NO: 112G1E00A5

7/28/2019 mf jesw

3/78

ACKNOWLEDGMENT

With a profound sense of thankfulness, I acknowledge my indebtedness to my

company guide Mr. SATHISH (RELATIONSHIP MANAGER) Faculty guide

Mrs Mrs. ANNAPURNA M.B.A., for their

valuable guidance, timely suggestions and constant encouragement. Their insightful

criticisms and patience throughout the duration of this project have been

instrumental in allowing this project to be completed.

My sincere thanks are to the name of Director, Mr. RAMESH NAIDU (M.A)

(P.hd)., name ofHOD NAGA PRABHAKAR (M.com, M.B.A) and all the staff

members of Department of management studies, ANANTHA LAKSHMI

INSTITUTE OF SCIENCE&TECHNOLOGY,For their consistent guidance in

my project work. Their continual support and careful attention to the details

involved in producing a document of this nature are very much appreciated.

T.JASWANTHIH.T NO: 112G1E00A5

7/28/2019 mf jesw

4/78

CONTENTS

CH. NO.CH. NO. PURTICULARS PAGE NO.PAGE NO.

CHAPTER -1 INTRODUCTION

OBJECTIVES OF THE STUDY

NEED &IMPORTANT OF THE STUDY

SCOPE OF THE STUDYRESEARCH METHODOLOGY

LIMITATIONS OF THE STUDY

CHAPTER -2REVIEW OF LETERATURE

CHAPTER -3 INDUSTRY PROFILE

COMPANY PROFILE

CHAPTER-4ANALYSIS & INTERRETATION OF THE STUDY

CHAPTER -5

FINDINGS

SUGGESTIONS

CONCLUSIONS

CHAPTER-6

CHAPTER-7

BIBLIOGRAPHY

APPENDIX

7/28/2019 mf jesw

5/78

CHAPTER -1

INTRODUCTION

7/28/2019 mf jesw

6/78

INTRODUCTION

SEBI (Mutual Fund) Regulations 1993 defines Mutual Fund as a fund established in the

form of a trust by a sponsor to raise money by the trustees through the sale of units to the public

under one or more schemes for investing securities in accordance with these regulations The

rationale behind a mutual fund is that there a large number of investors who lack the time and or

the skills to manage their money.

Hence, professional fund managers, acting on behalf of the Mutual Fund, manage the

investments (investors money) for their benefit in return for a management fee. The

organization that manages the investment is called the Asset Management Company (AMC).

Thus, a Mutual Fund is the most suitable investment for the common person as it offers an

opportunity to invest in a diversified, professionally managed basket of securities at a relatively

low cost. Anybody with an investible surplus of as little as a few thousand rupees can invest in

mutual fund .Each mutual fund scheme has defined investment objective and strategy.

A Draft offer documents is to be prepared for launching a fund. Typically, it specifies the

investment objectives of the fund, the risk associated, the cost involved in the process and the

broad rules for entry into and exit from funds and others areas of operation. As you probably

know, mutual funds have become extremely popular over the last couple of decades what was

once just another obscure instrument is now part of daily lives. More than 80 million people or

one half of the household in America invest in mutual funds. That means that, in the United

States alone, trillions of dollars alone are invested in mutual fund. In fact, too many people,

investing means buying mutual funds After all, its common knowledge that investing in mutual

fund is (or at least should be) better than simply letting cash waste away in a saving account but

for most people, thats where the understanding of fund ends.

7/28/2019 mf jesw

7/78

Mutual fund is a mechanism for pooling the resources by issuing unit to the investors and

investing funds in securities in accordance with the objective as disclosed in offer document.

Investment in securities is spread across a wide section of industry and sector and the risk is

reduced. Diversification reduces the risk because all stock may or may not move in the same

direction in the same proportion to their proportion at the same time. Mutual fund issues units to

the investors in accordance with quantum of money invested by them. Investor of mutual are

called unit holders.The profit or losses are shared by the investors in proportion to their

investment. The mutual fund usually comes out with a number of schemes with different

investment objectives which are launched from time to time. A mutual fund is required to be

registered with the SEBI, which regulates securities markets before it can collect fund from the

public.

A mutual fund is nothing more than a collective stock and /or bonds. You can think of a mutual

fund as a company that brings together a group of people and invests their money in stock,

bonds and other securities Each investors owns shares which represent a portion of holding of

the fund.

In India, SEBI (Mutual Fund) Regulations, 1996 regulates the structure of mutual funds. Mutual

funds in India are constituted in the form of a Public Trust created under The Indian Trusts Act,

1882.

7/28/2019 mf jesw

8/78

Mutual fund is a trust that pools the savings of a number of investors who share a common

financial goal. This pool of money is invested in accordance with a stated objective. The joint

ownership of the fund is thus Mutual, i.e. the fund belongs to all investors. The money thus

collected is then invested in capital market instruments such as shares, debentures and other

securities. 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 the most 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 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. 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 (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
http://www.appuonline.com/mf/knowledge/concept.htmlhttp://www.appuonline.com/mf/knowledge/concept.html

7/28/2019 mf jesw

9/78

7/28/2019 mf jesw

10/78

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 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 Scheme 1964. At the end of 1988 UTI had Rs.6,700 crores of assets

under management.

7/28/2019 mf jesw

11/78

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 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)

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.

7/28/2019 mf jesw

12/78

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.153118 crores

under 421 schemes.

Structure of the Indian mutual fund industry:

The Indian mutual fund industry is dominated by the Unit Trust of India and which has a total

corpus of Rs 700bn collected from more than 20 million investors .The UTI has many fund

/schemes in all categories i.e. equity, balanced, income etc with some being open ended and

some being closed ended. The United Scheme 1964 commonly referred to as US64, which is a

balanced fund, is the biggest scheme with a corpus of about Rs 200bn URI was floated by

financial institution and is governed by a special act of the parliament. Most of its investors

believe that the UTI is government owned and controlled, which, while legally incorrect, is true

for all practical purposes.

The second largest categories of mutual funds are the ones floated by nationalized banks. Can

bank Asset management floated by Canara Bank and SBI Funds Management floated by the

State Bank of India are the largest of these. GIC AMC floated by General Insurance

Corporation and Jeevan Bima Sahayog AMC floated by the LIC are some of the prominent

7/28/2019 mf jesw

13/78

ones. The aggregate corpus of funds managed by this category of AMCs is about Rs 150

billion

The third largest categories of the mutual funds are the once floated by the private sector and by

the foreign asset management companies. The largest of these are Prudential ICICI AMC and

Birla SUN LIFE AMC. The aggregate corpus of the asset managed by this category of AMC s

is in excess of Rs 250bn.

Recent trends in the mutual fund industry:

The most important in the mutual fund industry is the aggressive expansion of the foreign

owned mutual fund companies and the decline of the companies floated by the nationalized

bank and smaller private sector players. Many nationalized banks got into the mutual fund

business in the early nineties and go off to a good start due to the stock market boom prevailing

then. These banks did not really understand the mutual fund business and they just viewed it as

another kind of banking activity. Few hired specialized staff and generally choose to transfer

staff from the parent organization. Some schemes had offered guaranteed returns and their

patent organization had to bail out these AMCs by paying large amount of money the difference

between the guaranteed and actual returns. The service level was also bad. Most of these AMCs

have not been able to retain staffs, float, and new schemes etc. and it is doubtful whether barring

a few expectations, they have serious plans of continuing the activity in a major way.

The experience of some of the AMCs floated by private sector Indian companies was also very

similar. They quickly realized that the AMCs business is a business, which makes money in the

long term and requires deep pocketed support in the intermediate years. Some have sold out to

foreign owned companies, some have merged with the others and there is general restructuring

going on.

7/28/2019 mf jesw

14/78

The foreign owned companies have deep pockets and have come in here with the expectation of

a long haul. They can be credited with introducing many new practices such as new product

innovation, sharp improvement in the service standards and disclosure, usage of technology,

broker education etc. In fact, they have forced the industry to upgrade itself and service levels of

the organization like UTI have improved dramatically in the last few years in response to the

competition provided by these.

Future scenario:

The asset base will continue to grow at an annual rate of about 30 to 35% over the next few

years as investors shift their asset from banks and other traditional avenues. Some of the older

public and private sector players will either close or be taken over.Out of ten public sectors

players five will sell out, close down or merge with strong players in three to four years. In the

private sector this trend has already started with two mergers and one takeover. Here too some

of them will down their shutter in the near future to come.

But this does not mean there is no room for other players. The market will witness a flurry of

new players entering the area. There will be a large number of offers from various asset

management companies in times to come. Some big names like Fidelity, Principal and Old

Mutual etc. are looking at Indian market seriously.

The mutual fund industry is awaiting the derivation in India as this would enable it to hedge its

risk and this in turn would be reflected in its Net Asset Value (NAV).

SEBI is working out the norms for enabling the existing mutual fund scheme to trade in

derivatives. Importantly, many market players have called on the Regulator to initiate the

process immediately, so that the mutual funds can implement the changes that are required to

trade in derivates.

7/28/2019 mf jesw

15/78

Role of SEBI in mutual fund:

In the year 1992 SEBI act was passed. The objectives of SEBI are to protect the interest of

investors in securities, to promote the development of, and to regulate the securities market. As

far as mutual are concerned, SEBI formulates policies and regulation the mutual fund to protect

the interest of the investors. SEBI notified regulation for mutual funds in 1993. Thereafter

mutual fund sponsored by private sector entities were allowed to enter the capital market. The

regulations were fully revised in 1996 and been amended. Therefore, from time to time SEBI

has also issued guidelines to the mutual fund from time to time to protect the interest of the

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 regulation. There is no distinction

in regulatory requirement of the mutual fund and all are subject to monitoring and inspecting by

SEBI. The risks associated with the scheme launched by mutual funds sponsored by these

entities are of similar type.

7/28/2019 mf jesw

16/78

CATEGORIES OF MUTUAL FUND:

7/28/2019 mf jesw

17/78

Mutual funds can be classified as follow :

Based on their structure:

Open-ended funds: Investors can buy and sell the units from the fund, at any point of

time.

Close-ended funds: These funds raise money from investors only once. Therefore, after

the offer period, fresh investments can not be made into the fund. If the fund is listed on a

stocks exchange the units can be traded like stocks (E.g., Morgan Stanley Growth Fund).

Recently, most of the New Fund Offers of close-ended funds provided liquidity window on a

periodic basis such as monthly or weekly. Redemption of units can be made during specified

intervals. Therefore, such funds have relatively low liquidity.

Based on their investment objective:

Equity funds: These funds invest in equities and equity related instruments. With fluctuating

share prices, such funds show volatile performance, even losses. However, short term

fluctuations in the market, generally smoothens out in the long term, thereby offering higher

returns at relatively lower volatility. At the same time, such funds can yield great capital

appreciation as, historically, equities have outperformed all asset classes in the long term.

Hence, investment in equity funds should be considered for a period of at least 3-5 years. It can

be further classified as:

7/28/2019 mf jesw

18/78

i) Index funds- In this case a key stock market index, like BSE Sensex or Nifty is tracked.

Their portfolio mirrors the benchmark index both in terms of composition and individual

stock weightages.

ii) Equity diversified funds- 110% of the capital is invested in equities spreading across

different sectors and stocks.

iii|) Dividend yield funds- it is similar to the equity diversified funds except that they invest in

companies offering high dividend yields.

iv) Thematic funds- Invest 110% of the assets in sectors which are related through some

theme.

e.g. -An infrastructure fund invests in power, construction, cements sectors etc.

v) Sector funds- Invest 110% of the capital in a specific sector. e.g. - A banking sector fund will

invest in banking stocks.

vi) ELSS- Equity Linked Saving Scheme provides tax benefit to the investors.

Balanced fund:

Their investment portfolio includes both debt and equity. As a result, on the risk-return ladder,

they fall between equity and debt funds. Balanced funds are the ideal mutual funds vehicle for

investors who prefer spreading their risk across various instruments. Following are balanced

funds classes:

i) Debt-oriented funds -Investment below 65% in equities.

ii) Equity-oriented funds -Invest at least 65% in equities, remaining in debt.

7/28/2019 mf jesw

19/78

Debt fund: They invest only in debt instruments, and are a good option for investors averse to

idea of taking risk associated with equities. Therefore, they invest exclusively in fixed-income

instruments like bonds, debentures, Government of India securities; and money market

instruments such as certificates of deposit (CD), commercial paper (CP) and call money. Put

your money into any of these debt funds depending on your investment horizon and needs.

i) Liquid funds- These funds invest 110% in money market instruments, a large portion being

invested in call money market.

ii) Gilt funds ST- They invest 110% of their portfolio in government securities of and T-bills.

iii) Floating rate funds - Invest in short-term debt papers. Floaters invest in debt instruments

which have variable coupon rate.

iv) Arbitrage fund- They generate income through arbitrage opportunities due to mis-pricing

between cash market and derivatives market. Funds are allocated to equities, derivatives and

money markets. Higher proportion (around 75%) is put in money markets, in the absence of

arbitrage opportunities.

v) Gilt funds LT- They invest 110% of their portfolio in long-term government securities.

vi) Income funds LT- Typically, such funds invest a major portion of the portfolio in long-term

debt papers.

vii) MIPs- Monthly Income Plans have an exposure of 70%-90% to debt and an exposure of

11%-30% to equities.

viii) FMPs- fixed monthly plans invest in debt papers whose maturity is in line with that of the

fund.

7/28/2019 mf jesw

20/78

INVESTMENT STRATEGIES:

1. Systematic Investment Plan: under this a fixed sum is invested each month on a fixed date of

a month. Payment is made through post dated cheques or direct debit facilities. The investor

gets fewer units when the NAV is high and more units when the NAV is low. This is called as

the benefit of Rupee Cost Averaging (RCA)

2. Systematic Transfer Plan: under this an investor invest in debt oriented fund and give

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.

7/28/2019 mf jesw

21/78

RISK V/S. RETURN:

7/28/2019 mf jesw

22/78

MAJOR PLAYERS

1. Bank Sponsored

1. Joint Ventures - Predominantly Indian

1. SBI Funds Management Private Ltd.

2. Others

1. BOB Asset Management Co. Ltd.

2. Canbank Investment Management Services Ltd.

3. UTI Asset Management Co. Private Ltd.

2. Institutions

1. Jeevan Bima Sahayog Asset Management Co. Ltd.

3. Private Sector

1. Indian

1. Benchmark Asset Management Co. Private Ltd.

2. Cholamandalam Asset Management Co. Ltd.

3. Credit Capital Asset Management Co. Ltd.

4. Escorts Asset Management Ltd.

5. J. M. Financial Asset Management Private Ltd.

6. Kotak Mahindra Asset Management Co. Ltd.

7. Reliance Capital Asset Management Ltd.

8. Sahara Asset Management Co. Private Ltd

9. Sundaram Asset Management Co. Ltd.

10. Tata Asset Management Ltd.

2. Joint Ventures - Predominantly Indian

1. Birla Sun Life Asset Management Co. Ltd.

7/28/2019 mf jesw

23/78

2. DSP Merrill Lynch Fund Managers Ltd.

3. HDFC Asset Management Co. Ltd.

4. Prudential ICICI Asset Management Co. Ltd.

3. Joint Ventures - Predominantly Foreign

1. ABN AMRO Asset Management (India) Ltd.

2. Deutsche Asset Management (India) Private Ltd.

3. Fidelity Fund Management Private Ltd.

4. Franklin Templeton Asset Management (India) Private Ltd.

5. HSBC Asset Management (India) Private Ltd.

6. ING Investment Management (India) Private Ltd.

7. Morgan Stanley Investment Management Private Ltd.

8. Principal Pnb Asset Management Co. Private Ltd.

9. Standard Chartered Asset Management Co. Private Ltd

Who can invest?

Who can invest in Mutual Funds in India:

First of all, distributors need to be aware of who mutual

fund units.

Mutual funds in India are open to investment by

1) Residents including:

a) Resident Indian Individuals.

b) Indian Companies/Partnership Firms.

c) Indian Trust/Charitable Institutions.

7/28/2019 mf jesw

24/78

d) Banks/Financial Institutions.

e) Non-Banking Finance Companies.

f) Insurance Companies.

g) Provident funds.

h) Mutual funds.

2) Non-Residents including:

Non-Resident Indians, and Persons of Indian Origin.

Overseas Corporate Bodies (OCBs) and

3) Foreign entities, viz.

Foreign Institutional Investors(FII) registered with SEBI.

Foreign citizens/ entities are not allowed to invest in mutual funds in India.

7/28/2019 mf jesw

25/78

OBJECTIVES OF THE STUDY

1. To find out the Preferences of the investors for Asset Management Company.

2. To know the Preferences for the portfolios.

3. To know why one has invested or not invested in Mutual fund

4. To find out the most preferred channel.

5. To find out what should do to boost Mutual Fund Industry.

7/28/2019 mf jesw

26/78

SCOPE OF THE STUDY

A big boom has been witnessed in Mutual Fund Industry in recent times. A large number of

new players have entered the market and trying to gain market share in this rapidly improving

market.

The research was carried on in Aurangabad. I had been sent at one of the branch of KARVY

where I completed my Project work. I surveyed on my Project Topic A study of Mutual Fund

Industry on the visiting to individual & government offices employee.

The study will help to know the interest & preferences of the customers, which company,

portfolio, mode of investment, option for getting return and so on they prefer. This project

report may help the company to make further planning and strategy.

7/28/2019 mf jesw

27/78

RESEARCH METHODOLOGY

This report is based on primary as well secondary data, however primary data collection was

given more importance since it is overhearing factor in attitude studies. One of the most

important users of research methodology is that it helps in identifying the problem, collecting,

analyzing the required information data and providing an alternative solution to the problem .It

also helps in collecting the vital information that is required by the top management to assist

them for the better decision making both day to day decision and critical ones.

Data sources:

Research is totally based on primary data. Secondary data can be used only for the reference.

Research has been done by primary data collection, and primary data has been collected by

interacting with various people. The secondary data has been collected through various journals

and websites.

Duration of Study:

The study was carried out for a period of two months, from 7 th June to 30th July 2012.

Sampling:

Sampling procedure:

The sample was selected of them who are the Businessman/govt. employee, irrespective of

them being investors or not or availing the services or not. It was also collected through

personal visits to persons, by formal and informal talks and through filling up the questionnaire

prepared. The data has been analyzed by using mathematical/Statistical tool.

7/28/2019 mf jesw

28/78

Sample size:

The sample size of my project is limited to 110 people only. Out of which only 11 people had

invested in Mutual Fund. Other 90 people did not have invested in Mutual Fund.

Sample design:

Data has been presented with the help of bar graph, line graphs etc.

* Rising inflation could reduce savings and investments

7/28/2019 mf jesw

29/78

LIMITATION:

Some of the persons were not so responsive.

Possibility of error in data collection because many of investors may have not given

actual answers of my questionnaire.

The sample size may not adequately represent the whole market.

Some respondents were reluctant to divulge personal information which can affect the

validity of all responses.

The research is confined to a certain Govt. Dept. & part of KARVY

7/28/2019 mf jesw

30/78

CHAPTER-3

INDUSTRY &COMPANY

PROFILE

7/28/2019 mf jesw

31/78

INDUSTRY PROFILE

INDUSTRY PROFILE

The Indian trader is being fancied by the democratized world of online trading or also known as e-

broking. The regular and attractive advertisements in the print media and electronic media have added to

this fancy world

But as we compare to the Western countries, in India online trading has not still grasped the market , but

has done a very important amount of progress in the past years and the future of online trading is bright.

That is why many new companies are coming into this form of business structure and the existing

companies are changing to this new format besides offline and other traditional forms of business. With

only a mere share of 11% online trading a combined gross turnover of around Rs.

12000-13,000 cores handled by the BSE and NSE together there is a much greater scope for online

trading.

The various players whos offering and facilities is different according to the individual investors. This

will help us understand what processes and strategies competitors have adopted to attract and retain

investors and satisfy their investments needs.

Resolved between the Department of Telecommunications (Dot) and the Finance Ministry around 1998

and after that soon came the online trading portals like IL&FS invest smart, ICICIDirect.com,

motilaloswal.com, sharekhan.com etc. Connectivity related issue was perhaps the most important

technological factor.RBI made regulation that it is mandatory for company to store at least 7 year

financial and transactional data.

In the non-stop, 24 hours a day, seven days a week world of investing, we are able to

Obtain investment news around the clock

Check quotes on exchanges all over the world day or night

Easily compare one investment to another via numerous ratios, charts, graphs, and tables

Screen for the best investments to fit our individual goals and requirements

Trade stocks as easily and quickly as professional traders

Calculate retirement needs based on various scenarios

Regularly monitor portfolios and make necessary changes quickly and almost effortlessly

Control the routing of individual trades for the best possible price and execution

7/28/2019 mf jesw

32/78

Even many years after the launch of the first online brokerage firm, there remain a large

contingent of individual investors who still pick up the phone and call their stock broker to buy

and sell investments. However, every year a growing number of investors are placing their trades

using online brokers.

INDIAN EXCHANGES: NSE and BSE

The NSE and BSE are among the largest exchanges in the country handling very large daily

trading volumes, support large amounts of data traffic, and have a very large nationwide network.

The trading volume in year 2000 was huge with the average daily turnover in the capital markets

7/28/2019 mf jesw

33/78

Segment at NSE is around Rs 2300 crore and in the derivatives segment, around Rs 1300 crore.

The average daily traffic volume was around one million trades per day in the capital markets

segment and around 50,000 trades per day in the derivatives segment and there were around

13,000 registered users in both segments and an average ofaround9500 users is logged in at a

time. At BSE the average daily turnover in 2001-2002 (April-March) was Rs 1244.11 crore andthe number of average daily trades was Rs 5.17 lakh.

THE NETWORK DESIGN

Any online exchange should always be-on, safe, secure, redundant and should have adequate backup

& recovery processes. The Vice President of NSE-IT G.M Shenoy tells that the basic design

objective of NSE was to provide fair, equal and transparent access across all NSE nationwide locationsand to provide connectivity to the trading members as soon as possible.

RECOMMENDATIONS OF SEBI

The SEBI has also played an important role in the issue of the guidelines regarding online trading

so that the chances of fraud and misrepresentation are minimized.The stock brokers which are being

registered with Securities Exchange Board of India (SEBI) will have to apply to stock exchanges for a

formal permission. The following conditions must be fulfilled-

The online trading company must have a minimum net worth of Rs 50 lakh

The encryption technology should be there in the system used by the brokers to ensure the provision for

confidentiality ,security ,justifiability and reliability of data .The user id, first level and second level

password, automatic expiry of passwords at the end of a reasonable period,

The brokers must maintain adequate back-up systems and data storage capacity which must be checked by

the stock exchanges.

7/28/2019 mf jesw

34/78

SEBI has recently announced that to reduce the fraud cases each and every broking house has to

give back the full amount of customer after each three month, they will have to show the zero

balance of every customers account at the end of every 3 month

The minimum qualification must be laid down by the stock exchange to ensure that the persons hired by

the brokers must have the proper qualification regarding trading so as to guide the clients and he can

communicate regarding trading instructions.

To ensure the authenticity and accuracy of data a certification agency must be appointed using the

certification technologies when notified by the government or the SEBI.

The better client and the broker relationship to be maintained.

To determine the risk associated with the clients the brokers must have the have sufficient verifiable

information about clients and the stock exchange must ensure it.

The clients must be taken into an agreement stating about all the obligations and rights including the

minimum service standards to be maintained by the service provider broker for services specified by

SEBI/exchanges for Internet-based trading from time to time.

The web site of the broker providing the online trading facility should contain information rules and

regulations affecting client broker relationship, arbitration rules, investor protection rules, etc meant for

investor protection. It should also provide and display prominently hyper link to the web site/page on the

web site of the relevant stock exchange(s) displaying rules/ regulations/circulars. Ticker/quote/order book

displayed on the web site of the broker should display the time stamp as well as the source of such

information.

An e-mail should be sent to he investor for the confirmation of his Order or trade.

The limits of trading and exposure provided to the client must be set on system-based control and brokers

and exchanges must ensure it. The limits must be predefined by the broker on the exposure and turnover of

each client. The system of broker should be such that it is capable of assessing the risk of the client as soon

as the order comes in. The system should inform the clients client the reports on margin requirements,

payment and delivery obligations etc.

As per the regulations the Contract Notes must be issued to clients within 24 hours of the trade execution.

Cross trades of the clients will not be allowed with each other to the brokers using Internet-based systems

for routing client order and all orders must be offered to the market for matching.

A separate working group has been set up to look into the surveillance and enforcement-related

issues arising due to Internet-based securities trading. However, general anti-fraud provisions (SEBI

7/28/2019 mf jesw

35/78

Fraudulent and Unfair Trade Practices Regulations, 1995) will apply to all transactions involving

securities or financial services, regardless of the medium

FEATURES

Instant Loading

Works behind a Proxy

Live Streaming quotes

Multiple Watch lists

NSE& BSE Access

7/28/2019 mf jesw

36/78

Single order form for Cash and FnO

Point and Click order entry

Hot Key Functions

Market Depth Window

Back Office access

SYSTEM REQUIREMENT

Browser Type Microsoft Internet Explorer 6.0 or higher (Java enabled)

Internet Connection Broadband/Dial-Up connection (Modem at a minimum of 28.8/33.6 Kbps)

System Pentium 3 or 4 GHz or best available at market RAM (Physical) 128 MB or better

Operating System Windows 98/2000 or Windows XP

BENEFITS

Instant Loading -

The browser-based applet system allows you instant access to your account with no wait time,

unlike other systems that take a few minutes to load.

Works behind a Proxy -

This platform can be accessed on any Internet enabled network. You can access it even from your

place of work

Live Streaming quotes -

Keep an eye on the stocks you care about most with streaming, real-time quotes and customizable

market data. Color-coded price changes help you to spot trends and react to them quickly

Multiple Watch lists -

The new watch list option allows you to create upto 11 watch lists. Each watch list can be

personalized by inserting securities which you would like view as a group

NSE& BSE Access -

Flexibility of trading on both the NSE & BSE via a single screen

7/28/2019 mf jesw

37/78

Single order form for Cash and FnO -

Single order form offers you the convenience of transacting in various segments of the market

without having to switch between multiple windows

Point and Click order entry -

Makes order entry quick and simple with a click on the security the same gets inserted into the order

form on your trade screen

Hot Key Functions -

Using a single keystroke (Hot Key) function you can achieve important tasks very similar to a

broker's terminal. Accessing important reports is also one keystroke away

Market Depth Window -

It gives an immediate "at a glance" info about the stock you are following. The view provides the

best 5 bid and offer quotes and the outstanding order quantities

Back Office access -

View segment wise ledger bills and contract notes, trades, positions, account balance,

realized/unrealized profit & loss, and buying power all in real time

Smart TRADE

SmartTrade is an EXE based desktop software designed for active traders who transact frequently to

capture favorable short-term price movements. The platform offers active traders the tools they need to

make critical decisions with confidence. SmartTrade is designed and built from the ground up to address

the needs of active traders. SmartTrade makes the most of state-of the-art technology to deliver power,

speed and reliability. Through an easy-to-use interface, users are provided with the same tools and

advantages that the professionals enjoy.

7/28/2019 mf jesw

38/78

COMPANY PROFILE

KARVY Stock Broking Limited, one of the cornerstones of the KARVY edifice, flows freely

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), 3) MCX Stock Exchange(MCX-SX) Karvy Stock

Broking Limited, one of the cornerstones of the Karvy edifice, flows freely towards attaining

diverse goals of the customer through varied services. Creating 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.

Stock Broking Services

It is an undisputed fact that the stock market is unpredictable and yet enjoys a high success rate

as a wealth management and wealth accumulation option. The difference between

unpredictability and a safety anchor in the market is provided by in-depth knowledge of market

functioning and changing trends, planning with foresight and choosing one's options with care.

This is what we provide in our Stock Broking services.

We offer services that are beyond just a medium for buying and selling stocks and shares.

Instead we provide services which are multi dimensional and multi-focused in their scope.

There are several advantages in utilizing our Stock Broking services, which are the reasons why

it is one of the best in the country.

7/28/2019 mf jesw

39/78

We offer trading on a vast platform National Stock Exchange and Bombay Stock Exchange.

More importantly, we make trading safe to the maximum possible extent, by accounting for

several risk factors and planning accordingly. We are assisted in this task by our in-depth

research, constant feedback and sound advisory facilities. Our highly skilled research team,

comprising of technical analysts as well as fundamental specialists, secure result-oriented

information on market trends, market analysis and market predictions. This crucial information

is given as a constant feedback to our customers, through daily reports delivered thrice daily ;

The Pre-session Report, where market scenario for the day is predicted, The Mid-session

Report, timed to arrive during lunch break , where the market forecast for the rest of the day is

given and The Post-session Report, the final report for the day, where the market and the report

itself is reviewed. To add to this repository of information, we publish a monthly magazine

"Karvy The Finapolis", which analyzes the latest stock market trends and takes a close look at

the various investment options, and products available in the market, while a weekly report,

called "Karvy Bazaar Baatein", keeps you more informed on the immediate trends in the stock

market. In addition, our specific industry reports give comprehensive information on various

industries. Besides this, we also offer special portfolio analysis packages that provide daily

technical advice on scrips for successful portfolio management and provide customized

advisory services to help you make the right financial moves that are specifically suited to your

portfolio.

Our Stock Broking services are widely networked across India, with the number of our trading

terminals providing retail stock broking facilities. Our services have increasingly offered

customer oriented convenience, which we provide to a spectrum of investors, high-networth or

otherwise, with equal dedication and competence.

7/28/2019 mf jesw

40/78

But true to our spirit, this success is not our final destination, but just a platform to launch

further enhanced quality services to provide you the latest in convenient, customer-friendly

stock management.

Over the years we have ensured that the trust of our customers is our biggest returns. Factors

such as our success in the Electronic custody business has helped build on our tradition of trust

even more. Consequentially our retail client base expanded very fast.

To empower the investor further we have made serious efforts to ensure that our research calls

are disseminated systematically to all our stock broking clients through various delivery

channels like email, chat, SMS, phone calls etc. Our foray into commodities broking has been

path breaking and we are in the process of converting existing traders in commodities into the

more organized mainstream of trading in commodity futures, both as a trading and risk hedging

mechanism.

In the future, our focus will be on the emerging businesses and to meet this objective, we have

enhanced our manpower and revitalized our knowledge base with enhances focus on Futures

and Options as well as the commodities business.

The onset of the technology revolution in financial services Industry saw the emergence of

Karvy as an electronic custodian registered with National Securities Depository Ltd (NSDL)

and Central Securities Depository Ltd (CSDL) in 1998. Karvy set standards enabling further

comfort to the investor by promoting paperless trading across the country and emerged as the

top 3 Depository Participants in the country in terms of customer serviced.

Offering a wide trading platform with a dual membership at both NSDL and CDSL, we are a

powerful medium for trading and settlement of dematerialized shares. We have established live

DPMs, Internet access to accounts and an easier transaction process in order to offer more

7/28/2019 mf jesw

41/78

convenience to individual and corporate investors. A team of professional and the latest

technological expertise allocated exclusively to our demat division including technological

enhancements like SPEED-e, make our response time quick and our delivery impeccable. A

wide national network makes our efficiencies accessible to all.

The paradigm shift from pure selling to knowledge based selling drives the business today.

With our wide portfolio offerings, we occupy all segments in the retail financial services

industry.

A 1600 team of highly qualified and dedicated professionals drawn from the best of academic

and professional backgrounds are committed to maintaining high levels of client service

delivery. This has propelled us to a position among the top distributors for equity and debt

issues with an estimated market share of 15% in terms of applications mobilized, besides being

established as the leading procurer in all public issues.

To further tap the immense growth potential in the capital markets we enhanced the scope of

our retail brand, Karvy - the Finapolis , thereby providing planning and advisory services to the

mass affluent. Here we understand the customer needs and lifestyle in the context of present

earnings and provide adequate advisory services that will necessarily help in creating wealth.

Judicious planning that is customized to meet the future needs of the customer deliver a service

that is exemplary. The market-savvy and the ignorant investors, both find this service very

satisfactory. The edge that we have over competition is our portfolio of offerings and our

professional expertise. The investment planning for each customer is done with an unbiased

attitude so that the service is truly customized.

Our monthly magazine, Finapolis, provides up-dated market information on market trends,

investment options, opinions etc. Thus empowering the investor to base every financial move

on rational thought and prudent analysis and embark on the path to wealth creation.

7/28/2019 mf jesw

42/78

Under our retail brand "Karvy the Finapolis", we deliver advisory services to a cross-section

of customers. The service is backed by a team of dedicated and expert professionals with varied

experience and background in handling investment portfolios. They are continually engaged in

designing the right investment portfolio for each customer according to individual needs and

budget considerations with a comprehensive support system that focuses on trading customers'

portfolios and providing valuable inputs, monitoring and managing the portfolio through varied

technological initiatives. This is made possible by the expertise we have gained in the business

over the years. Another venture towards being investor-friendly is the circulation of a monthly

magazine called "Karvy - the Finapolis". Covering the latest of market news, trends, investment

schemes and research-based opinions from experts in various financial fields.

www.thefinapolis.com

This specialized division was set up to cater to the high net worth individuals and institutional

clients keeping in mind that they require a different kind of financial planning and management

that will augment not just existing finances but their life-style as well. Here we follow a hard-

nosed business approach with the soft touch of dedicated customer care and personalized

attention.

For this purpose we offer a comprehensive and personalized service that encompasses planning

and protection of finances, planning of business needs and retirement needs and a host of other

services, all provided on a one-to-one basis.

VISION&MISION

We are a company that has a mission to provide you with the best of web design and

development services. We aim at helping you create the optimum website which will offer your

rival and competition websites the competition they need.

7/28/2019 mf jesw

43/78

Our vision is made possible through the technical knowledge we know and use, the tools we use

and the software that is used in creating your website. Emphasis is always placed on creating a

website that is not only great in visual appeal, structure and corporate identity, is also user

friendly.

To ensure that you get the website that you want, we work with you, blending all your thoughts

and wants in your website design. It is based on your concept that our staff uses their skills and

ideas in implementing flash, animation, e-commerce, sound, custom graphics, simple text

images and other forms in your website.

We don?t just forget you after creating your website. We know the importance of a fully

functional website, 24 hours a day, 7 days a week. This is why we ensure that we provide 24

hours service to websites created for anyone, from anywhere in the world with our efficient

after sales services.

Not only do we have a competent staff to provide you with graphic, web, brochure and logo

designing and flash presentation services, we can help you with software development.

Our vision lies in satisfying all your web development needs so that your company gets the

identity it deserves in the corporate and internet world. To help you create a website that you are

comfortable with, you can not only choose from the various packages we have to offer you, but

we can also give you a web design proposal that will surely fit the fixed budget that you specify.

We take pride in having provided our services to so many webmasters during the span of our

company. With so much of experience in our hands, it is not surprising that we seldom get

unhappy and unsatisfied customers. All this is made possible with our mission and vision to

provide you with the best web designing services possible on the internet

7/28/2019 mf jesw

44/78

NameBoardRelationships

C. Parthasarathy

29 Relationships

Karvy Consultants Limited 57

M. S. Ramakrishna

18 Relationships

KARVY Stock Broking Limited 58

Meka Yugandhar B.Com., Fca

14 Relationships

Karvy Consultants Limited 61

Sudhir Variyar

4 RelationshipsMultiples Alternate Asset Management PrivateLimited --

Jimmy Mahtani

23 Relationships

Sharekhan Limited

7/28/2019 mf jesw

45/78

CHAPTER-4

Data Analysis

&

Interpretation

7/28/2019 mf jesw

46/78

1. Birla Sun Life Tax Plan (Growth)

Month Net Assets Value Monthly Return

Apr-12 7.13 - 8.65 21.3184

May-12 8.65 - 11.66 23.2370

Jun-12 11.66 - 11.28 -3.5647

Jul-12 11.28 - 11.44 11.2840

Aug-12 11.44 - 11.44 0.0000

Sep-12 11.44 - 12.19 6.5559

Oct-12 12.19 - 11.42 -6.3167

Nov-12 11.42 - 12.24 7.1804

Dec-12 12.24 - 12.87 5.1471

Jan-11 12.87 - 12.15 -5.5944

Feb-11 12.15 - 12.12 -0.4938

Mar-11 12.12 - 12.85 6.2862

AVERAGE RETURN 5.4199 %

Calculation of Sharpe Index:

Sharpe Index = Portfolio average return - Risk free rate of return

Standard Deviation

1947.0

60.9

%55.3%4199.5

=

=

=

t

t

p

fpt

S

S

RRS

7/28/2019 mf jesw

47/78

Interpretation of the Funds Performance

Particular Average

Return

Sharpe

Index Ratio

Rank

Birla Sun Life Equity Fund-Growth 6.8383 % 0.235 I

Birla Sun Life Income Fund -Growth 0.4806 % -3.259 III

Birla Sun Life Tax Plan (Growth) 5.4199 % 0.1947 II

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

Birla Sun Life Equity

Fund-Growth

Birla Sun Life Income

Fund -Growth

Birla Sun Life Tax Plan

(Growth)

Average Return

7/28/2019 mf jesw

48/78

7/28/2019 mf jesw

49/78

Kotak Equity-FOF-Growth

Kotak Income Plus-(Growth)

Kotak Tax Saver-Scheme-Growth

1. Kotak Equity-FOF-Growth

Month Net Assets Value Monthly ReturnApr-12 18.755 - 20.77 11.7438

May-12 20.77 - 27.76 33.6543

Jun-12 27.76 - 27.516 -0.8790

Jul-12 27.516 - 30.134 9.5145

Aug-12 30.134 - 30.134 0.0000

Sep-12 30.134 - 32.362 7.3936

Oct-12 32.362 - 31.2190 -3.5319

Nov-12 31.2190 - 33.2560 6.5249

Dec-12 33.2560 - 34.354 3.3017

Jan-11 34.354 - 33.1150 -3.6357Feb-11 33.1150 - 32.9911 -0.3444

Mar-11 32.9911 - 34.8960 5.7743

AVERAGE RETURN5.7127%



Standard Deviation

2144.0

06.10

%55.3%709.5

=

=

=

t

t

p

fp

t

S

S

RRS

7/28/2019 mf jesw

50/78

2. Kotak Income Plus-Growth


Apr-12 12.8357 - 13.1126 2.0794

May-12 13.1126 - 13.736 4.8342

Jun-12 13.736 - 13.6629 -0.5249

Jul-12 13.736 - 14.1237 3.1455

Aug-12 14.1237 - 14.1237 0.0000

Sep-12 14.1237 - 14.1651 0.5066

Oct-12 14.1651 - 14.2771 0.7907

Nov-12 14.2771 - 14.5153 1.6684

Dec-12 14.5153 - 14.6471 0.9080

Jan-11 14.6471 -14.5702

-0.5250

Feb-11 14.5702 - 14.5597 -0.0721

Mar-11 14.5597 - 14.8148 1.7521

AVERAGE RETURN 1.2136%



Standard Deviation

4634.1

59.1

%55.3%2136.1

=

=

=

t

t

p

fp

t

S

S

RRS

7/28/2019 mf jesw

51/78

3. Kotak Tax Saver Scheme-Growth


Apr-12 9.122 - 9.98 9.4058

May-12 9.98 - 13.789 38.1663

Jun-12 13.789 - 13.447 -2.4802Jul-12 13.447 - 14.894 11.7608

Aug-12 14.894 - 14.894 0.0000

Sep-12 14.894 - 15.918 6.8753

Oct-12 15.918 - 14.9270 -6.2257

Nov-12 14.9270 - 16.06 7.5903

Dec-12 16.06 - 16.675 3.8294

Jan-11 16.675 - 15.85 -4.9475

Feb-11 15.85 - 15.8111 -0.2461

Mar-11 15.8111 - 17.1180 8.2031

AVERAGE RETURN (in%age)

5.9111%



Standard Deviation


Particular Average Sharp Index Rank

1637.0

66.11

%55.3%911.5

=

=

=

t

t

p

fp

t

S

S

RRS

7/28/2019 mf jesw

52/78

Return RatioKotak Equity-FOF-

Growth

5.7127 % 0.2144 I

Kotak Income Plus-

(Growth)

1.2136 % - 1.4634 III

Kotak Tax Saver-

Scheme-Growth

5.9111 % 0.1637 II

7/28/2019 mf jesw

53/78

Escorts Mutual Fund

Escorts Mutual Fund is promoted by the business conglomerate Escorts group. Escorts Asset

Management Limited acts as the AMC to the mutual fund. Escorts Mutual Fund usually offers

open ended schemes and the fund category is Equity- balanced fund.The fund is a member of the Escort Group of Companies, which deals with a number of high

growth industries like construction and material handling equipment, farm machinery, two

wheelers, auto ancillary products and financial Services.

Corpus Under Management: Rs.195.75 Crs. as on May 31, 2011

Key Personnel: Rajan Nanda (Chairman & MD), Lalit K Khanna (CEO & Compliance), Sanjay

Arora (CIO), Mohini Sharma (IRO).

Fund Managers: Mr. Jagveer Singh Fauzdar , Mr. Sanjeev Sharma.

No. of schemes 13

No. of schemes including options 30

Equity Schemes 13

Debt Schemes 7Short term debt Schemes 4

Equity & Debt 4

Money Market 0

Gilt Fund 2

7/28/2019 mf jesw

54/78

For Performance Comparison we take three Mutual Fund

Schemes of Company

Escorts Growth Plan (Growth)

Escorts Income Plan (Growth)

Escorts Tax Plan (Growth)

1. Escorts Growth Plan (Growth)


Apr-12 34.8155 - 36.6330 5.2204

May-12 36.6330 - 56.9001 55.3247

Jun-12 56.9001 - 55.5782 -2.3232

Jul-12 55.5782 - 60.7149 9.2423

Aug-12 60.7149 - 60.7149 0.0000

Sep-12 60.7149 - 63.0134 3.7857

Oct-12 63.0134 - 60.7351 -3.6156

Nov-12 60.7351 - 64.4480 6.1133Dec-12 64.4480 - 68.3673 6.0813

Jan-11 68.3673 - 65.7441 -3.8369

Feb-11 65.7441 - 64.8682 -1.3323

Mar-11 64.8682 - 70.1250 8.1138

AVERAGE RETURN 6.8970%



Standard Deviation

210.0

252.15

%55.3%897.6

=

=

=

t

t

p

fp

t

S

S

RRS

7/28/2019 mf jesw

55/78

2. Escorts Income Plan (Growth)


Apr-12 27.1535 - 28.2081 3.8838

May-12 28.2081 - 27.8613 -1.2294

Jun-12 27.8613 - 28.1730 1.1188

Jul-12 28.1730 - 28.1160 -0.2023

Aug-12 28.1160 - 28.1160 0.0000

Sep-12 28.1160 - 28.3370 0.7860Oct-12 28.3370 - 28.4620 0.4411

Nov-12 28.4620 - 28.9679 1.7775

Dec-12 28.9679 - 28.9170 -0.1757

Jan-11 28.9170 - 29.0567 0.4831

Feb-11 29.0567 - 29.0088 -0.1649

Mar-11 29.0088 - 29.2065 0.6815




Standard Deviation

289.2

28.1

%55.36167.0

=

=

=

t

t

p

fp

t

S

S

RRS

7/28/2019 mf jesw

56/78

3. Escorts Income Plan (Growth)


Apr-12 25.9839 - 27.2905 5.0285May-12 27.2905 - 37.1172 35.9711

Jun-12 37.1172 - 38.6629 4.1924

Jul-12 38.6629 - 40.8944 5.7717

Aug-12 40.8944 - 40.8944 0.0000

Sep-12 40.8944 - 42.8570 4.7992

Oct-12 42.8570 - 41.6245 -2.8758

Nov-12 41.6245 - 44.1556 6.0808

Dec-12 44.1556 - 45.8891 3.9259

Jan-11 45.8891 - 44.3687 -3.3132

Feb-11 44.3687 - 42.6067 -3.9713Mar-11 42.6067 - 45.3606 6.4635



7/28/2019 mf jesw

57/78

7/28/2019 mf jesw

58/78

Escorts Tax Plan

(Growth)

5.1727 % 0.155 II

ICICI Prudential Mutual Fund

Prudential ICICI Mutual Fund is the largest private sector mutual fund in India with assets of over

Rs.34,119 crore under management as of Aug 2006.

The asset management company, Prudential ICICI Asset Management Company Limited, is a

joint venture between Prudential Plc, Europe's leading insurance company and ICICI Bank,

India's premier financial institution. Prudential Plc holds 55 per cent of the asset management

company and the balance by ICICI Bank.

7/28/2019 mf jesw

59/78

7/28/2019 mf jesw

60/78

7/28/2019 mf jesw

61/78

7/28/2019 mf jesw

62/78

3. ICICI Prudential Tax Plan- (Growth Option)


Apr-12 56.88 - 63.84 12.2363

May-12 63.84 - 85.02 33.1767

Jun-12 85.02 - 85.95 1.1239

Jul-12 85.95 - 110.63 17.0797

Aug-12 110.63 - 110.63 0.0000

Sep-12 110.63 - 117.97 7.2940

Oct-12 117.97 - 116.29 -1.5560

Nov-12 116.29 - 113.55 6.8304

Dec-12 113.55 - 121.69 7.1686

Jan-11 121.69 - 118.88 -2.3121

Feb-11 118.88 - 120.47 1.3375

Mar-11 120.47 - 127.34 5.7027




Standard Deviation

3804.0

9567.9

%55.3%3379.7

=

=

=

t

t

p

fp

t

S

S

RRS

7/28/2019 mf jesw

63/78


Particular Average

Return

Sharpe

Index Ratio

Rank

ICICI Prudential Growth Plan-

(Growth Option)4.8724 % 0.1615 II

ICICI Prudential Income Plan-

(Growth Option)

0.6522 % -1.488 III

ICICI Prudential Tax Plan-

(Growth Option)

7.3379 % 0.3804 I

Interpretation:

According to this chart out of 11 Mutual Fund investors of Auranagabad the most are in the age

group of 31-35 yrs. i.e. 40%, the second most investors are in the age group of 36-40yrs i.e.

30% and the least investors are in the age group of below 46-50 yrs.

2. Occupation of the investors of Aurangabad.

7/28/2019 mf jesw

64/78

.

34

2

01

0

1

2

3

4

5

Govt.

Service

Pvt. Service Business Agriculture Others

Occupation of the customers

No.ofInvestors

Interpretation:

In Occupation group out of 11 investors, 40% are Pvt. Employees, 20% are Businessman, 30%

are Govt. Employees, 0% are in Agriculture and 11% are in others.

Occupation No. of Investors

Govt. Service 3

Pvt. Service 4

Business 2

Agriculture 0

Others 1

7/28/2019 mf jesw

65/78

(3) Investors invested in different kind of investments of Aurangabad.

Priority of Investments No. of Respondents %

Saving A/C 98

Fixed deposits 50

Insurance 99

Mutual Fund 11

RD 45

Real Estate 35

98

50

99

10

45

35

0 20 40 60 80 100 120

Saving A/c

Insurance

RD

priority

ofinvest

No.of Respondents%

7/28/2019 mf jesw

66/78

Interpretation: From the above graph it can be inferred that out of 200 people, 98 % people have

invested in Saving A/c, 91.6% in Insurance, 51.6% in Fixed Deposits, 11% in Mutual Fund,

43% in RD and 21.6% in Real Estate.

4. Educational Qualification of investors of Aurangabad.

Educational Qualification Number of Investors

Graduate/ Post Graduate 5

Under Graduate 2

Others 3

Total 120

7/28/2019 mf jesw

67/78

7/28/2019 mf jesw

68/78

Factors (a) Liquidity (b) Low Risk (c) High Return (d) Trust

No. of

Respondents

11 31 40 19

10%

31%

40%

19

Liquidity Low Risk High Return Trust

Interpretation:

7/28/2019 mf jesw

69/78

Out of 110 People, 40% People prefer to invest where there is High Return, 31%

prefer to invest where there is Low Risk, 11% prefer easy Liquidity and 19%

prefer Trust

Preference of Investors for future investment in Mutual Fund

Name of AMC No. of InvestorsSBIMF 30

UTI 14HDFC 11

Reliance 20ICICI Prudential 16

Kotak 6

Others 4

30

14

10

20

16

6

4

0 5 10 15 20 25 30

No. of Investors

SBIMF

UTI

HDFC

Reliance

ICICI Prudential

Kotak

Others

NameofAMC

7/28/2019 mf jesw

70/78

Interpretation:

Out of 110 investors, 20% prefer to invest in Reliance, 16% in ICICI Prudential,

30% in SBIMF, 4% in Others, 6% in Kotak, 16% in UTI and 11% in HDFC

Mutual Fund.

Source of information for customers about Mutual Fund

Source of information No. of RespondentsAdvertisement 13

Peer Group 25

Bank 30

Financial Advisors 42

1325 30

42

0

10

2030

40

50

No.of

Respond

ents

Advertisement Peer Group Bank Financial

Advisors

Source of Information

Interpretation:

From the above chart it can be inferred that the Financial Advisor is the most

important source of information about Mutual Fund. Out of 110 Respondents,

42% know about Mutual fund Through Financial Advisor, 30 % through Bank,

25% through Peer Group and 13% through Advertisement.

7/28/2019 mf jesw

71/78

Findings and

Conclusion

7/28/2019 mf jesw

72/78

Findings

In Aurangabad in the Age Group of 36-40 years were more in numbers.

The second most Investors were in the age group of 41-45 years and the least

were in the age group of below 45-50 years.

In Occupation group most of the Investors were Private employees., the second

most Investors were Govt. employees

About all the Respondents had a Saving A/c in Bank, 98% Invested in Fixed

Deposits,50% Invested in insurance, Only 99% Respondents invested in Mutual

fund 11%.

Among 110 Respondents only 11% had invested in Mutual Fund.

Out of 90 Respondents 61% were not aware of Mutual Fund, 39% told there is

not any specific reason for not invested in Mutual Fund.

For Future investment the maximum Respondents preferred SBI Mutual Fund,

the second most preferred Reliance , ICICI Prudential has been preferred after

them.

Mostly Respondents preferred High Return while investment, the second

most preferred Low Risk then trust and the least preferred Liquidity.

Only 61% Respondents were aware about Mutual fund and its operations and

39% were not.

Among 110 Respondents only 11% had invested in Mutual Fund and 40%

did not have invested in Mutual fund.

7/28/2019 mf jesw

73/78

7/28/2019 mf jesw

74/78

Conclusion

Running successful Mutual Funds requires complete understanding of the peculiarities of the

Indian Stock Market and also the psyche of the small investors. This study has made an attempt

to understand the financial behavior of Mutual Fund investors in connection with the

preferences of Brand (AMC), Products, Channels etc. I observed that many of people have fear

of Mutual Fund. They think their money will not be secure in Mutual Fund. They need the

knowledge of Mutual Fund and its related terms. Many of people do not have invested in

mutual fund due to lack of awareness although they have money to invest. As the awareness and

income is growing the number of mutual fund investors are also growing.

Brand plays important role for the investment. People invest in those Companies where they

have faith or they are well known with them. There are many AMCs in Aurangabad but only

some are performing well due to Brand awareness. Some AMCs are not performing well

although some of the schemes of them are giving good return because of not awareness about

Brand. Reliance, UTI, SBIMF, ICICI Prudential etc. they are well known Brand, they are

performing well and their Assets Under Management is larger than others whose Brand name

are not well known like Principle, Sunderam, etc.

Distribution channels are also important for the investment in mutual fund. Financial Advisors

are the most preferred channel for the investment in mutual fund. They can change investors

mind from one investment option to others. Many of investors directly invest their money

through AMC because they do not have to pay entry load. Only those people invest directly

who know well about mutual fund and its operations and those have time.

7/28/2019 mf jesw

75/78

Suggestions and Recommendations

The most vital problem spotted is of ignorance. Investors should be made aware of the

benefits. Nobody will invest until and unless he is fully convinced. Investors should be made to

realize that ignorance is no longer bliss and what they are losing by not investing.

Mutual funds offer a lot of benefit which no other single option could offer. But most of

the people are not even aware of what actually a mutual fund is? They only see it as just another

7/28/2019 mf jesw

76/78

investment option. So the advisors should try to change their mindsets. The advisors should

target for more and more young investors. Young investors as well as persons at the height of

their career would like to go for advisors due to lack of expertise and time.

Mutual Fund Company needs to give the training of the Individual Financial Advisors

about the Fund/Scheme and its objective, because they are the main source to influence the

investors.

Before making any investment Financial Advisors should first enquire about the

risk tolerance of the investors/customers, their need and time (how long they want to invest). By

considering these three things they can take the customers into consideration.

Younger people aged under 35 will be a key new customer group into the future, so

making greater efforts with younger customers who show some interest in investing should pay

off..

Systematic Investment Plan (SIP) is one the innovative products launched by Assets

Management companies very recently in the industry. SIP is easy for monthly salaried person as

it provides the facility of do the investment in EMI. Though most of the prospects and potential

investors are not aware about the SIP. There is a large scope for the companies to tap the

salaried persons.

7/28/2019 mf jesw

77/78

7/28/2019 mf jesw

78/78

BIBLIOGRAPHY

NEWS PAPERS

TELEVISION CHANNEL

MUTUAL FUND HAND BOOK

FACT SHEET AND STATEMENT

WWW.SBIMF.COM

WWW.MONEYCONTROL.COM

WWW.AMFIINDIA.COM

WWW.ONLINERESEARCHONLINE.COM

WWW. MUTUALFUNDSINDIA.COM

MUTUAL FUND INVESTMENT IS SUBJECT TO MARKET RISKS. PLEASE

READ THE OFFER DOCUMENT CAREFULLY BEFORE INVESTING
http://www.sbimf.com/http://www.moneycontrol.com/http://www.amfiindia.com/http://www.onlineresearch.com/http://www.sbimf.com/http://www.moneycontrol.com/http://www.amfiindia.com/http://www.onlineresearch.com/

mf jesw

Documents