Contents 1. Company profile 2. Mutual Fund History 3. Mutual
fund Industry 4. Mutual Funds an introduction Types of mutual funds
Net Asset Value Comparison of mutual fund Advantages of mutual fund
Disadvantages of mutual fund Distribution channels of mutual fund
Risk in mutual fund Factors affecting mutual fund Regulatory
framework for mutual fund Structure of mutual fund 5. Research
methodology 6. Data interpretation and analysis Limitation of study
Findings and suggestions conclusion References and bibliography
Questionnaire
Chapter 1
INTRODUCTION The Ludhiana Stock Exchange Limited was established
in 1981, by Sh. S.P. Oswal of Vardhman Group and Sh. B.M. Lal
Munjal of Hero Group, leading industrial luminaries, to fulfill a
vital need of having a Stock Exchange in the region of Punjab,
Himachal Pradesh, Jammu & Kashmir and Union Territory of
Chandigarh. Since its inception, the Stock Exchange has grown
phenomenally. The Stock Exchange has played an important role in
channelising savings into capital for the various industrial and
commercial units of the State of Punjab and other parts of the
country. The Exchange has facilitated the mobilization of funds by
entrepreneurs from the public and thereby contributed in the
overall, economic, industrial and social development of the States
under its jurisdiction.Ludhiana Stock Exchange is one of the
leading Regional Stock Exchange and has been in the forefront of
other Stock Exchange in every spheres, whether it is formation of
subsidiary for providing the platform of trading to investors, for
brokers etc. in the era of Screen based trading introduced by
National Stock Exchange and Bombay Stock Exchange, entering into
the field of Commodities trading or imparting education to the
Public at large by way of starting Certification Programmes in
Capital Market.The vision and mission of Stock Exchange is:
"Reaching small investors by providing services relating to Capital
Market including Trading, Depository Operations etc and creating
Mass Awareness by way of education and training in the field of
Capital Market.To create educated investors and fulfilling the gap
of skilled work force in the domain in Capital Market." Further,
the Exchange has 295 members out of which 162 are registered with
National Stock Exchange as Sub-brokers and 121 with Bombay Stock
Exchange as sub-brokers through our subsidiary.
Governance and management:LSE has a strong governance and
administration, which encompasses a right balance of Industry
Experts with highest level educational background, practicing
professionals and independent experts in various fields of
Financial Sector. The administration is presently headed by Sr.
General Manager CUM Company Secretary and team of persons having
indepth knowledge of Secretarial, Legal and Education &
Training.
The Governing Board of our Exchange comprises of eleven members,
out of which two are Public Interest Directors, who are eminent
persons in the fields of Finance and Accounts, Education, Law,
Capital Markets and other related fields, Six are Shareholder
Directors, and Three are Broker Member Director and the Exchange
has four Statutory Committees namely Disciplinary Committee,
Arbitration Committee, Defaults Committee and Investor Services
Committee. In addition, it has advisory and standing committees to
assist the administration.
LSE has a Code of Conduct in place that governs the elected
Board Members and the Senior Management Team. The same is monitored
through periodic disclosure procedures. The Exchange has an Ethics
Committee, which looks into any issue of conflict of interest and
has in place general code of conduct for the Senior Officials.
The composition of the Governing Board is as under:-
DETAILS OF PRESIDENTS AND VICE PRESIDENTS
Ludhiana Stock and Capital Limited Salutes its
President/Chairmen vice Present/Vice Chairman
PRESIDENTS/ CHAIRMEN
Sr. No. Name of the person Tenure
1 Sh. S.P. Oswal 16.08.1983 to 27.07.1986
2 Sh. B.M. Munjal 28.07.1986 to 15.10.1989
3 Sh. V.N. Dhiri 16.10.1989 to 30.10.1992 30.09.1998 to
04.10.2000
4 Sh. G.S. Dhodi 31.10.1992 to 22.12.1993
5 Sh. Jaspal Singh 23.12.1993 to 05.10.1995 01.10.1996 to
29.09.199806.10.2001 to 01.07.2002
6 Sh. M.S. Gandhi 06.10.1995 to 30.09.1996
7 Sh. R.C. Singal 05.10.2000 to 05.10.2001
8 Dr. B. B. Tandon 25.06.2007 to 10.12.2007
9 Sh. S.P. Sharma 15.07.2007 to 23.09.2008
10 Sh. Jagmohan Krishan 23.09.2008 to 29.09.2009
11 Prof. Padam Parkash Kansal 30.09.2009 to 18.08.2012
12 Sh. Joginder Kumar 19.08.2012 to 18.09.2012
13 Sh. Ved Parkash Gaur 18.02.2013 to 30.09.2014
14 Sh. Jagmohan Krishan 18.12.2014 to till date
VICE PRESIDENTS/ VICE CHAIRMEN
Sr. No. Name of the person Tenure
1 Sh. Rajinder Verma 14.07.1984 to 08.08.1987
2 Sh. B.K. Arora 09.08.1987 to 15.10.198931.10.1992 to
22.12.1993
3 Sh. G.S. Dhodi 28.10.1991 to 30.10.1992
4 Sh. B.S. Sidhu 16.10.1989 to 27.10.199123.12.1993 to
05.10.1995
5 Sh. D.P. Gandhi 06.10.1995 to 26.09.1997
6 Sh. M. S. Sarna 27.09.1997 to 29.09.1998
7 Sh. T.S. Thapar 30.09.1998 to 04.10.2000
8 Sh. Tarvinder Dhingra 05.10.2000 to 05.10.2001
9 Dr. Rajiv Kalra 06.10.2001 to 01.07.2002
10 Sh. D.K. Malhotra 25.06.2007 to 10.12.2007
11 Sh. Jagmohan Krishan 15.07.2007 to 23.09.2008
12 Sh./ Ravinder Nath Sethi 23.09.2008 to 08.10.2008
13 Prof. Padam Parkash Kansal 09.10.2008 to 10.09.2009
14 Sh. Joginder Kumar 30.09.2009 to 18.09.2012
15 Sh. Jaspal Singh 09.01.2015 to till date
BOARD OF DIRECTOR
The Governing Board of the Company comprises of eight Directors,
out of which six are elected Directors and two are Professional
Directors who are eminent persons in the fields of Finance and
Accounts, Education etc.The present composition of the Governing
Board is as under:-
Sr. No. Name of Director Designation Date Of Appointment
1 Sh. Jagmohan Krishan Chairperson 18.12.2013
2 Sh. Jaspal Singh Vice Chairperson 09.01.2015
3 Sh. Anup Kumar Jain Shareholder Director 21.12.2012
4 Sh. Vikas Batra Shareholder Director 29.09.2010
5 Sh. Ashok Kumar Shareholder Director 30.09.2011
6 Sh. Prem Thapar Shareholder Director 30.12.2014
7 Sh. V.P. Gaur Professional Director 11.06.2010
8 Sh. Kanwal Preet Singh Walia Professional Director
09.01.2015
Strength of LSE group1. LSE brand is popular among masses. The
brand image of LSE can be capitalized.
2. We have requisite infrastructure for the Capital Market
activities which includes a multi-storeyed, centrally air
conditioned building situated in the financial hub of the city i.e.
Feroze Gandhi Market.
3. We have well experienced staff handling operations of Stock
Exchange.
4. We have competent Board and professional management.
5. We have much needed networking of sub brokers in the entire
region, who are having rich experience in Stock Market operations
for the last 25 years.
6. We have more than 40,000 clients spread across Punjab,
Himachal Pardesh, Jammu & Kashmir and adjoining areas of
Haryana and Rajasthan.
7. The turnover of our subsidiary is the highest amongst all
subsidiaries of Regional Stock Exchanges in India.
INVESTOR RELATED SERVICESThe Exchange has been providing a
variety of services for the benefit of investing public. The
services include Investor Service Centres, Investor Protection fund
and Investor Educational Seminars.
(i).Investor Service Centres
The Exchange has set-up Investor Service Centres at various DP
branches of its subsidiary for providing information relating to
Capital Market to the general public. The Centres subscribe to
leading economic, financial dailies and periodicals. They also
store the Annual Reports of the companies listed at the Stock
Exchange. The Investor Service Centres are also equipped with a
Terminal for providing live rates of trading at NSE and BSE. A
large number of the investors visit the centres to utilize the
services being provided by the Exchange.
(ii).Investor Awareness Seminars
The Exchange has been organizing Investor Awareness Seminars for
the benefit of Investors of the region comprising State of Punjab,
Himachal Pradesh, Jammu & Kashmir, Chandigarh and adjoining
areas of Haryana and Rajasthan. This massive exercise of organizing
Investor Awareness Seminars has been launched as a part of
Securities Market Awareness Campaign launched by SEBI in January,
2003. The Exchange apprises the investors about Dos and Donts to be
observed while dealing in Securities Market. Till date, Exchange
has organized more than 200 workshops in the region mentioned
above.
(iii).Website of the Exchange: www.lse.co.in
The Exchange has its own website with the domain name
www.lse.co.in. The website provides valuable information about the
latest market commentary, research reports about companies, daily
status of International markets, a separate module for Internet
trading, information about listed companies and brokers and
sub-brokers of the Exchange and its subsidiary. The website also
contains many useful links on portfolio management, investor
education, frequently asked questions about various topics relating
to Primary and Secondary Market, information about Mutual Funds,
Financials of the Company including Quarterly Results, Share
Prices, Profit and Loss Accounts, Balance Sheet and Many More. The
website also contains daily Technical Charts of various scrips
being traded in BSE and NSE
EDUCATIONAL INITIATIVES OF EXCHANGELSE has carved out its unique
position among the Stock Exchanges of the country for the Knowledge
Management. It has set up an Education and Training Cell and the
same has emerged as a leading facility in various Financial
Services in India. The Exchange has been conducting a unique
certification programme in Capital Market in association with
Centre for Industry Institute Partnership Programme Panjab
University, Chandigarh for the last three year. This programme has
widened the horizons of participants vis--vis Capital Market
Operations as practical skill based knowledge is provided by Stock
Brokers, Stock Exchange Officials, Professors of Finance and
Business Management and above all Professionals working in
different areas of Capital Market. We have completed series of
batches of this programme and we now want to scale up this
programme and are planning to launch various other programmes on
areas relating to Securities Market.
We have edge over others as far as Education and Training in
Financial Services is concerned due to following factors:
a. Directly connected with the Industry as Regional Stock
Exchange.
b. Connected with large base of Investors as they use the Stock
Exchange as a Trading Platform for their liquidity needs
c. Presence in the region of Punjab, Himachal Pradesh, Jammu
& Kashmir and Chandigarh through our branches Network and the
area being under the jurisdiction of our Exchange.
d. Already running Certification programmes in Capital Market
successfully.
e. Continuously holding Investor Awareness Programmes for
Investors & Investor Groups through association with Brokers,
Sub-brokers, Colleges, Universities and Consumer Groups.
DIFFERENT COMPANY MUTUAL FUNDDSP Merrill Lynch Mutual Fund Birla
Mutual Fund Alliance Capital Mutual Fund ING Vysya Mutual Fund
Cholamandalam Mutual Fund Deutsche Mutual Fund ABN - AMRO Mutual
Fund HDFC Mutual Fund Franklin Templeton Mutual Fund Reliance
Mutual Fund HSBC Mutual Fund Unit Trust Of India Prudential ICICI
Mutual Fund Kotak Mutual Fund Standard Chartered Mutual Fund SBI
Mutual Principal Mutual Fund Tata Mutual Chapter 2
HISTORY OF MUTUAL FUNDS
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 form the year 1987 when non-UTI players entered
in the industry.In the past decade INDIAN Mutual Fund industry had
seen a dramatic improvement quality wise as well as quantity wise.
The history of mutual funds in India can be broadly divided into
four distinct phases:
First Phase - 1964-87
Unit Trust of India (UTI) was established on 1963 by an Act of
Parliament. It was set up 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.
Second Phase - 1987-1993 (Entry of Public Sector Funds)
Entry of non-UTI mutual funds.SBI Mutual Fund was the first
followed by Canra bank 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 in 1989 and
GIC in 1990. The end of 1993 marked Rs.47, 004 as assets under
management.
Third Phase - 1993-2003 (Entry of Private Sector Funds)
With the entry of private sector funds in 1993, a new era
started in the Indian mutual fund industry, giving the Indian
investors a wider choice of fund families. Also, 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.
The number of mutual fund houses went on increasing, with many
foreign mutual funds setting up funds in India and also the
industry has witnessed several mergers and acquisitions. As at the
end of January 2003, there were 33 mutual funds with total assets
of Rs. 1, 21,805 crores. The Unit Trust of India with Rs.44, 541
crores of assets under management was way ahead of other mutual
funds.
Fourth Phase - since February 2003
This phase had bitter experience for UTI. It was bifurcated into
two separate entities. One is the Specified Undertaking of the Unit
Trust of India with AUM of Rs.29,835 crores (as on January 2003).
The Specified Undertaking of Unit Trust of India, functioning under
an administrator and under the rules framed by Government of India
and does not come under the purview of the Mutual Fund
Regulations.
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. With the bifurcation of the erstwhile UTI
which had in March 2000 more than Rs.76, 000 crores of AUM and with
the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual
Fund Regulations, and with recent mergers taking place among
different private sector funds, the mutual fund industry has
entered its current phase of consolidation and growth. As at the
end of September, 2004, there were 29 funds, which manage assets of
Rs.1, 53,108 crores under 421 schemes.
GROWTH IN ASSETS UNDER MANAGEMENT
Chapter 3
MUTUAL FUND INDUSTRY
The Indian Mutual fund industry has witnessed considerable
growth since its inception in 1963. The assets under management
(AUM) have surged to Rs 4,173 bn in Mar-09 from just Rs 250 mn in
Mar-65. In a span of 10 years (from 1999 to 2009), the industry has
registered a CAGR of 22.3%, albeit encompassing some shortfalls in
AUM due to business cycles.The impressive growth in the Indian
Mutual fund industry in recent years can largely be attributed to
various factors such as rising household savings, comprehensive
regulatory framework, Favourable tax policies, Introduction of
several new products Investor education campaign and role of
distributors.In the last few years, households income levels have
grown significantly, leading to commensurate increase in households
savings.Towards the huge market potential of the Mutual fund
industry in India.Besides, SEBI has introduced various regulatory
measures in order to protect the interest of small investors that
augurs well for the long term growth of the industry.The tax
benefits allowed on mutual fund schemes.Besides, the Indian Mutual
fund industry has introduced an array of products such as
liquid/money market funds, sector-specific funds, index funds, gilt
funds, capital protection oriented schemes, special category funds,
insurance linked funds, exchange traded funds, etc. It also has
introduced Gold ETF fund in 2007 with an aim to allow mutual funds
to invest in gold or gold related instruments. Further, the
industry has launched special schemes to invest in foreign
securities. The wide variety of schemes offered by the Indian
Mutual fund industry provides multiple options of investment to
common man.
FUTURE OF MUTUAL FUNDSIN INDIA
TheFuture of Mutual FundsIn India suggests that the industry has
got huge scopes of development in the times to come.The Future of
Mutual Funds In India is quite bright. Mutual Funds are one of the
most popular forms of investments as these funds are
diversification, professional management, and liquidity. In the
year 2004, the mutual fund industry in India was worth Rs 1, 50,537
crores. The mutual fund industry is expected to grow at a rate of
13.4% over the next 10 years.Mutual Fund Assets under Management
(MF AUM)-Growth
a) In March 1998, the MF AUM was`68984 crores.b) In March 2000,
the MF AUM was`93717 crores and the percentage growth was 26 %.c)
In March 2001, the MF AUM was`83131 crores and the percentage
growth was 13 %.d) In March 2002, the MF AUM was`94017 crores and
the percentage growth was 12 %.e) In March 2003, the MF AUM
was`75306 crores and the percentage growth was 25 %.f) In March
2004, the MF AUM was`137626 crores and the percentage growth was 45
%.g) In September 2004, the MF AUM was`151141 crores and the
percentage growth was 9 % in 6 months time.h) In December 2004, the
MF AUM was`149300 crores and the percentage growth was 1 % in 2
months time.i) Future of Mutual Funds In India-Facts on growth
Important aspects related to the future of mutual funds in India
are -a) The growth rate was 100 % in 6 previous years.b) The saving
rate in India is 23 %.c) There is a huge scope in the future for
the expansion of the mutual funds industry.d) A number of foreign
based assets management companies are venturing into Indian
markets.
MAJOR PLAYERS IN INDUSTRY
List of Asset Management Companies in India
Bank SponsoredI. Bank of Baroda Asset Management Co. Ltd.II.
Canbank Investment Management Services Ltd.III. PNB Asset
Management Ltd.IV. UTI Asset Management Company (P) Ltd.
InstitutionsI. GIC Asset Management Co. Ltd.II. Jeevan Bima
Sahayog Asset Management Co. Ltd.
Private SectorINDIANI. Benchmark Asset Management Co. Ltd.II.
Cholamandalam Asset Management Co. Ltd.III. Escorts Asset
Management IV. J.M. Capital Management Ltd.V. Kotak Mahindra Asset
Management Co. Ltd.VI. Sundaram Asset Management Co.VII. Reliance
Capital Asset Management Ltd. FOREIGNI. Principal Asset Management
Co. Ltd.
Joint Ventures Predominantly IndianI. Birla Sun Life Asset
Management Pvt. Co. Ltd.II. Credit Capital Asset Management Co.
Ltd.III. DSP Merrill Lynch Fund Managers Ltd.IV. First India Asset
Management Pvt. Ltd.V. HDFC Asset Management Co. Ltd.VI. Tata TD
Waterhouse Asset Management Pvt. Ltd.
Joint Ventures Predominantly ForeignI. Alliance Capital Asset
Management (India) Pvt. Ltd.II. Deutsche Asset Management (India)
Pvt. Ltd.III. HSBC Asset Management (India) Pvt. Ltd.IV. ING
Investment Management (India) Pvt. Ltd.V. Prudential ICICI
Management Co. Ltd.
Chapter 4
MUTUAL FUND (AN INTRODUCTION)
Definition:-Mutual Fund is the pool of money from investors to
invest in different securities according to certain objectives.
A Mutual Fund is a trust that pools the savings of a number of
investors who share a common financial goal. The money thus
collected is invested by the fund manager in different types of
securities depending upon the objective of the scheme. These could
range from shares to debentures to money market instruments. The
income earned through these investments and the capital
appreciations realized by the scheme are shared by its unit holders
in proportion to the number of units owned by them (pro rata). 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 portfolio at a relatively low cost. Anybody with an
inventible surplus of as little as a few thousand rupees can invest
in Mutual Funds. Each Mutual Fund scheme has a defined investment
objective and strategy
A Mutual fund is the ideal investment vehicle for todays complex
and modern financial scenario. Markets for equity shares, bonds and
other fixed income instruments, real estate, derivatives and other
assets have become mature and information driven. Price changes in
these assets are driven by global events occurring in faraway
places. A typical individual is unlikely to have the knowledge,
skills, inclination and time to keep track of events, understand
their implications and act speedily. An individual also finds it
difficult to keep track of ownership of his assets, investments,
brokerage dues and bank transactions etc.
A draft offer document is to be prepared at the time of
launching the fund. Typically, it pre specifies the investment
objectives of the fund, the risk associated, the costs involved in
the process and the broad rules for entry into and exit from the
fund and other areas of operation. In India, as in most countries,
these sponsors need approval from a regulator, SEBI (Securities
exchange Board of India) in our case. SEBI looks at track records
of the sponsor and its financial strength in granting approval to
the fund for commencing operations.
A sponsor then hires an asset management company to invest the
funds according to the investment objective. It also hires another
entity to be the custodian of the assets of the fund and perhaps a
third one to handle registry work for the unit holders
(subscribers) of the fund.
In the Indian context, the sponsors promote the Asset Management
Company also, in which it holds a majority stake. In many cases a
sponsor can hold a 100% stake in the Asset Management Company
(AMC). E.g. Birla Global Finance is the sponsor of the Birla Sun
Life Asset Management Company Ltd., which has floated different
mutual funds schemes and also acts as an asset manager for the
funds collected under the schemes.
CHARACTERISTICS OF MUTUAL FUNDS
The ownership is in the hands of the investors who have pooled
in their funds. It is managed by a team of investment professionals
and other service providers.The pool of funds is invested in a
portfolio of marketable investments.The investors share is
denominated by units whose value is called as Net Asset Value (NAV)
which changes everyday.The investment portfolio is created
according to the stated investment objectives of the fund.
MUTUAL FUND OPERATION
TYPES OF MUTUAL FUNDSMutual fund schemes may be classified on
the basis of its structure and its investment objective.
A. By Structure:
Open-ended Funds
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.
Closed-ended Funds
A closed-end fund has a stipulated maturity period which
generally ranging from 3 to 15 years. The fund is open for
subscription only during a specified period. Investors can invest
in the scheme at the time of the initial public issue and
thereafter they can buy or sell the units of the scheme on the
stock exchanges where they are listed. In order to provide an exit
route to the investors, some close-ended funds give an option of
selling back the units to the Mutual Fund through periodic
repurchase at NAV related prices. SEBI Regulations stipulate that
at least one of the two exit routes is provided to the
investor.
Interval Funds
Interval funds combine the features of open-ended and
close-ended schemes. They are open for sale or redemption during
pre-determined intervals at NAV related prices.
B. By Investment Objective:
Growth/Equity oriented schemes
The aim of growth funds is to provide capital appreciation over
the medium to long- term. Such schemes normally invest a majority
of their corpus in equities. It has been proven that returns from
stocks, have outperformed most other kind of investments held over
the long term. Growth schemes are ideal for investors having a
long-term outlook seeking growth over a period of time.
Income/Debt oriented schemes
The aim of income funds is to provide regular and steady income
to investors. Such schemes generally invest in fixed income
securities such as bonds, corporate debentures and Government
securities. Income Funds are ideal for capital stability and
regular income.
Balanced Funds
The aim of balanced funds is to provide both growth and regular
income. Such schemes periodically distribute a part of their
earning and invest both in equities and fixed income securities in
the proportion indicated in their offer documents. In a rising
stock market, the NAV of these schemes may not normally keep pace,
or fall equally when the market falls. These are ideal for
investors looking for a combination of income and moderate
growth.
Money Market/liquid fund
The aim of money market funds is 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. Returns on these schemes may fluctuate depending upon
the interest rates prevailing in the market. These are ideal for
Corporate and individual investors as a means to park their surplus
funds for short periods.
Gilt Fund
These funds invest exclusively in government securities.
Government securities have no default risk. NAVs of these schemes
also fluctuate due to change in interest rates and other economic
factors as is the casewith income or debt oriented schemes.
Index Funds
Index Funds replicate the portfolio of a particular index such
as the BSE Sensitive index,S&P NSE 50 index (Nifty), etc, these
schemes invest in the securities in the same
weightagecomprisingofanindex.NAVsofsuchsche-meswouldriseorfallin
accordance with the rise or fall in the index, though not exactly
by the same percentage due to some factors known as "tracking
error" in technical terms. Necessary disclosures in this regard are
made inthe offer document of the mutual fundscheme.
Load Funds
A Load Fund is one that charges a commission for entry or exit.
That is, each time you buy or sell units in the fund, a commission
will be payable. Typically entry and exit loads range from 1% to
2%. It could be worth paying the load, if the fund has a good
performance history.
No-Load Funds
A No-Load Fund is one that does not charge a commission for
entry or exit. That is, no commission is payable on purchase or
sale of units in the fund. The advantage of a no load fund is that
the entire corpus is put to work
C. other schemes:
Tax Saving Schemes
These schemes offer tax rebates to the investors under specific
provisions of the Indian Income Tax laws as the Government offers
tax incentives for investment in specified avenues. Investments
made in Equity Linked Savings Schemes (ELSS) and Pension Schemes
are allowed as deduction u/s 88 of the Income Tax Act, 1961. The
Act also provides opportunities to investors to save capital gains
u/s 54EA and 54EB by investing in Mutual Funds.
Industry Specific Schemes
Industry Specific Schemes invest only in the industries
specified in the offer document. The investment of these funds is
limited to specific industries like InfoTech, FMCG, and
Pharmaceuticals etc.
Index Schemes
Index Funds attempt to replicate the performance of a particular
index such as the BSE Sensex or the NSE 50
Sectoral Schemes
Sectoral Funds are those, which invest exclusively in a
specified industry or a group of industries or various segments
such as 'A' Group shares or initial public offerings.
NET ASSET VALUE Net Asset Value (NAV) Definition of NAV Net
Asset Value, or NAV, is the sum total of the market value of all
the shares held in the portfolio including cash, less the
liabilities, divided by the total number of units outstanding.
Thus, NAV of a mutual fund unit is nothing but the book value.
It is calculated simply by dividing the net asset value of the
fund by the number of units. However, most people refer loosely to
the NAV per unit as NAV, ignoring the "per unit". We also abide by
the same convention. An example will make it clear that returns are
independent of the NAV. Say; you have Rs 10,000 to invest. You have
two options, wherein the funds are same as far as the portfolio is
concerned. But say one Fund X has an NAV of Rs 10 and another Fund
Y has NAV of Rs 50. You will get 1000 units of Fund X or 200 units
of Fund Y. After one year, both funds would have grown equally as
their portfolio is same, say by25%. Then NAV after one year would
be Rs 12.50 for Fund X and Rs 62.50 for Fund Y. The value of your
investment would be 1000*12.50 = Rs 12,500 for Fund X and 200*62.5=
Rs 12,500 for Fund Y. Thus your returns would be same irrespective
of the NAV.It is quality of fund, which would make a difference to
your returns. COMPARISON OF MUTUAL FUNDSMutual
fundsObjectiveRiskInvestment portfolioWho should investInvestment
horizon
EquityfundsLong-term capital appreciationHigh riskStock
&shareAggressive investors , long term investment3 years +
BalancedfundsGrowth & regular incomeCapital market risk
& interest riskBalanced ratio of equity &debt funds to
ensure higher return at low riskModerate & aggressive
investors2 years +
IndexfundsTo generate returns that commensurate with returns of
respective indicesNAV varies with index performancePortfolio
indices like BSE, NIFTY etc.Aggressive investors3 years +
Gilt fundsSecurities & Income Interest rate riskGovernment
SecuritiesSalaried & conservative Investors12 months +
Bond fundsRegular IncomeCredit Risk & Interest rate
riskDebentures ,Govt. securities , corporate BondsSalaried &
conservative Investors12 months +
Money marketLiquidity + Moderate Income + Reservation of
IncomeNegligibleTreasury Bills, Certificates of Deposits ,
commercial papers, Call money Park funds in current A/c s or short
term Bank Deposits2 Days to 3 weeks
HOW MUTUAL FUND DIFFER IN TERMS OF RISK PROFILE?
EQUITY FUNDS
High level of return, but has a high level of risk too (no fixed
return)
DEBT,s FUND
Return comparatively less than equity funds
LIQUID AND MONEYMARKET FUNDProvide stable but low level of
return
ADVANTAGES OF MUTUAL FUND
Mutual Funds offer several benefits to an investor that are
unmatched by the other investment options.
1. Affordability: Small investors with low investment fund are
unable to invest in high-grade or blue chip stocks. An investor
through Mutual Funds can be benefited from a portfolio including of
high priced stock.
2. Risk Diversification: Investors investment is spread across
different securities (stocks, bonds, money market, real estate,
fixed deposits etc.) and different sectors (auto, textile, IT
etc.). This kind of a diversification add to the stability of
returns, reduces the risk for example during one period of time
equities might under perform but bonds and money market instruments
might do well do well and may protect principal investment as well
as help to meet return objectives.
3. Variety: Mutual funds offer a tremendous variety of schemes.
This variety is beneficial in two ways: first, it offers different
types of schemes to investors
4. Professional Management: Mutual Funds employ the services of
experienced and skilled professionals and dedicated investment
research team. The whole team analyses the performance and balance
sheet of companies and selects them to achieve the objectives of
the scheme.
5. Tax Benefits: Depending on the scheme of mutual funds, tax
shelter is also available. As per the Union Budget-99, income
earned through dividends from mutual funds is 100% tax free. Under
ELSS of open-ended equity-oriented funds an exemption is provided
up to Rs. 100,000/- under section 80C.
6. Regulation: All Mutual Funds are registered with SEBI and
they function within the provisions of strict regulations designed
to protect the interests of investors. The operations of Mutual
Funds are regularly monitored by SEBI.
7. Liquidity: Investment in MUTUAL FUND can be redeemed at any
time.
8. Flexibility: Investment in MUTUAL FUND is flexible because an
investor can switch easily in schemes.
9. High Return: Mutual Fund may generate high return in long run
(beyond 5 year).
DISADVANTAGES OF MUTUAL FUND
The following are the disadvantages of investing through mutual
fund:
1. No GuaranteesNo investment is risk free. If the entire stock
market declines in value, the value of mutual fund shares will go
down as well, no matter how balanced the portfolio. Investors
encounter fewer risks when they invest in mutual funds than when
they buy and sell stocks on their own. However, anyone who invests
through mutual fund runs the risk of losing the money.2. No control
over costSince investors do not directly monitor the funds
operations, they cannot control the costs effectively. Regulators
therefore usually limit the expenses of mutual funds.
3. No tailor-made portfolio Mutual fund portfolios are created
and marketed by AMCs, into which investors invest. They cannot made
tailor made portfolio.Projectsformba.blogspot.com
4. Managing a portfolio of funds As the number of funds
increase, in order to tailor a portfolio for himself, an investor
may be holding portfolio funds, with the costs of monitoring them
and using hem, being incurred by him.
5. Delay in RedemptionThe redemption of the funds though has
liquidity in 24- hours to 3 days takes formal application as well
as needs time for redemption. This becomes cumbersome for the
investors.
1. Non-availability of loans Mutual funds are not accepted as
security against loan. The investor cannot deposit the mutual funds
against taking any kind of bank loans though they may be his
assets.
DISTRIBUTION CHANNELSOF THEMUTUAL FUND
In India,AMCs work withfive distinctdistribution channels those
aredirect, banking, retail, corporate and individual financial
adviser.
1. The Direct Channels:
In the direct channel, customers invest in the schemes directly
through AMC. In most cases, the company does not provide any
investment advice, so these investors have to carry out their own
research and select schemes themselves.The
fundcompaniesprovideseveraltoolstoinvestorswhoinvestthroughthis
channel.
Thisincludesmonthlya/cstatement,processingoftransaction,and
maintaince of records. In this channel most investors can invest
through websites, or receive information through telephonic
services provided by the company. About 10-20% of the total sales
of anAMC come through this direct channel
2. The banking channel:
Thelargecustomerbaseofbanks,indevelopedcountries,haveplayedan
important role in the selling MFs. In the recent years, this
channel has also opened up in India. Banks operating in India ,
including public sector, private and foreign banks have established
tie-up with various fund companies for providing distribution and
servicing. The banking channel is likely to develop as the most
vital distribution channel forfund companies there are several
reasons for the same. Customers remain invested in banks for long
periods of time and therefore banks maintain a relationship oftrust
with their customers. Customers are rely on advice provided to them
bybankersastheyarealwaysonthelookoutforbetterinvestmentavenues.
Managers are guiding to customers about various funds.
Anadditionaladvantagethatbanksprovideisthattheconcernedcustomerbecomes
a permanent contact of the banks and therefore can be reached
during launch of (new fund offer) NFO ornew schemes any time in the
future.
3. The retail channel:
A customer can deal with directly with a sub broker belonging to
a distribution company, instead of taking trouble of dealing with
several agents. Distribution companies sell the schemes of several
fund houses simultaneously and brokerage is paid by the AMC whose
funds they sell. The retail channel offers the benefits
ofspecialist knowledge and established client contact and,
therefore private fund houses are generally prefer this channel.
Someof the major players in India in this
inthischannelarenationalplayerslikeKarvey,BirlasunlifeIL&FSand
cholamandalam. The key factor for this channel to sell a companys
fund used tobe the brokerage paid. The banking and retail channel
generally contribute to about 50-70% of the total Asset
underManagement (AUM).
4. The corporate channel
The corporate channel includes a variety of institutions that
invest in shares on the companysname.
Thesearebusinesses,trust,andevenstateandlocal governments. For
institutional investors, fund managers prefer to create special
funds and share classes. Corporate can either invest directly in
mutual funds orthrough an intermediary such as a distribution house
or a bank. Corporate exhibit varying degrees of awareness of mutual
fund products.Most ofthe established corporate, such as the TVS
industries in Hyderabad, are
well-versedwiththeperformanceandcompositionofvarious
funds.Thesmallercompanies and start-up firms, however, need to be
educating on several aspects ofmutual funds. In order to provide
information to such clients, fund companies usually organize
presentation for these companies or set-up meetings with the
finance managers.
5. Individual financial advisors (ifa) or agents:
The IFAchannel is theoldestchannel for distribution andwas
widely employed atthetimewhenUTImonopolyinthemarket.
Inrecenttimeswiththe emergence significantly decreased. An agent
who basically acts as aninterface between the customer and the fund
house there is a unique systems in place in India , wherein several
sub-brokers are working under one main broker. The huge network of
sub-brokers, thus ensure larger market penetration and geographic
coverage. As per AMFI, over one lakh agents are registered to sell
mutual funds and other financial products such as insurance across
the country.
RISK INVOLVED IN MUTUAL FUND
THE RISK-RETURN TRADE-OFF The most important relationship to
understand is the risk-return trade-off. Higher the risk greater
the returns/loss and lower the risk lesser the returns/loss Hence
it is up to you, the investor to decide how much risk you are
willing to take. In order to do this you must first be aware of the
different types of risks involved with your investment
decision.
MARKET RISKSometimes prices and yields of all securities rise
and fall. Broad outside influences affecting the market in general
lead to this. This is true, may it be big corporations or smaller
mid-sized companies. This is known as Market Risk. A Systematic
Investment Plan (SIP) that works on the concept of Rupee Cost
Averaging (RCA) might help mitigate this risk
CREDIT RISKThe debt servicing ability (May it be interest
payments or repayment of principal) of a company through its cash
flows determines the Credit Risk faced by you. This credit risk is
measured by independent rating agencies like CRISIL who rate
companies and their paper. An AAA rating is considered the safest
whereas a D rating is considered poor credit quality. A
well-diversified portfolio might help mitigate this risk.
INFLATION RISKThings you hear people talk about: Rs. 100 today
is worth more than Rs. 100 tomorrow. Remember the time when a bus
ride costed 50 paisa? Mehangai Ka Jamana Hai. The root
cause,Inflation. Inflation is the loss of purchasing power over
time. A lot of times people make conservative investment decisions
to protect their capital but end up with a sum of money that can
buy less than what the principal could at the time of investment.
This happens when inflation grows faster than the return on your
investment. A well-diversified portfolio with some investment in
equities might help mitigate this risk
INTEREST RATE RISKIn a free market economy interest rates are
difficult if not impossible to predict. Changes in interest rates
affect the prices of bonds as well as equities. If interest rates
raise the prices of bonds fall and vice versa. Equity might be
negatively affected as well in a rising interest rate environment.
A well-diversified portfolio might help mitigate this risk
POLITICAL/GOVERNMENT POLICY RISKChanges in government policy and
political decision can change the investment environment. They can
create a favorable environment for investment or vice versa.
LIQUIDITY RISKLiquidity risk arises when it becomes difficult to
sell the securities that one has purchased. Liquidity Risk can be
partly mitigated by diversification, staggering of maturities as
well as internal risk controls that lean towards purchase of liquid
securities.
FACTORS AFFECTING MUTUAL FUND
Governmental Influences Mutual fund business is a highly
regulated business throughout the world as it seeks to ensure that
quality and fairly priced schemes are available. Governmental
intervention thus in mutual fund market usually is most needed to
ensure that insurers are reliable
Taxation Policy Social equity being one of the motives behind
tax collections, government gives certain exemptions from such
levying. One such exemption is deduction incurred by tax payer s
towards investment in mutual fund coverage. Similarly, capital
invested in infrastructure bonds etc is offered with certain
concession under tax laws.
National Income The relative importance of the mutual fund
Market within a country will also be dependent upon economic
development. With greater rates of economic growth, consumption of
investment should increase as a result of increased income, and an
increased stock of assets requiring mutual fund.
Employment The effect of employment on mutual fund industry is
as direct as that on economic development of any country. With the
rising levels of employment the effect on mutual fund industry is
positive.
Money supply The central banks has indicated that credit growth
and money supply number are likely to be above its prosecution for
the current fiscal year, the statement to consider promptly all
possible measures as appropriate to the evolving global and
domestics situation is indicative of phased increase in FII limits
for gilt investment could help in depending the securities market
and is part of the road map towards fuller convertibility.
Interest Interest is major factor for investment when a person
find less return from investment tool than people move towards the
higher returns tool of investment.
Risk factor All investments in Mutual Fund and securities are
subject to market risks and the NAV of the fund may go up or down
depending on the factors and forces affecting the security market.
There can be no assurance that the funds objective will be
achieved. Past performance of the sponsors/Mutual fund/schemes/AMC
is not necessarily indicative of the future results. The name of
the schemes does not in any manner indicate their quality, their
future prospects or returns. The specific risk would be credit,
market, illiquidity, judgmental error, interest rate, swaps and
forward rates. Demographic environment The demographic environment
significantly affects the demand for the mutual fund industry.
Factors like the average age of the population, levels of
education, household structures income distribution, life style and
the extent of industrialization.
Education Education is major factor of demand for mutual fund
product. If the education levels is higher than the people know the
benefits of mutual fund the use mutual fund as investment tool and
also take raise capital growthREGULATORY FREAMWORK FOR MUTUAL
FUND
For the smooth functioning of mutual funds in INDIA followings
are the watchdogs
1. ASSOCIATION OF MUTUAL FUNDS IN INDIA (AMFI)
With the increase in mutual fund players in India, a need for
mutual fund association in India was generated to function as a
non-profit organization. Association of Mutual Funds in India
(AMFI) was incorporated on 22nd August 1995.
AMFI is an apex body of all Asset Management Companies (AMC),
which has been registered with SEBI. Till date all the AMCs are
that have launched mutual fund schemes are its members. It
functions under the supervision and guidelines of board of
directors. AMFI has brought down the Indian Mutual Fund Industry to
a professional and healthy market with ethical lines enhancing and
maintaining standards. It follows the principle of both protecting
and promoting the interest of mutual funds as well as their unit
holders.
2. SECURITIES AND EXCHANGE BOARD OF INDIA (MUTUAL FUNDS)
REGULATIONS, 1996
The fast growing industry is regulated by Securities and
Exchange Board of India (SEBI) since inception of SEBI as a
statutory body. SEBI initially formulated SECURITIES AND EXCHANGE
BOARD OF INDIA (MUTUAL FUNDS) REGULATIONS, 1993 providing detailed
procedure for establishment, registration, constitution, management
of trustees, asset management company, about schemes/products to be
designed, about investment of funds collected, general obligation
of MFs, about inspection, audit etc. based on experience gained and
feedback received from the market SEBI revised the guidelines of
1993 and issued fresh guidelines in 1996 titled SECURITIES AND
EXCHANGE BOARD OF INDIA (MUTUAL FUNDS) REGULATIONS, 1996. The said
regulations as amended from time to time are in force even
today.
STRUCTURE OF MUTUAL FUNDS
The mutual fund industry is governed by the Securities and
Exchange Board of India (Mutual Fund) Regulations, 1996, which lays
the norms for the structure and the operation of a mutual fund in
India. The diagram below illustrates the organizational set up of a
mutual fund:
Organizational Setup of a Mutual Fund
SPONSOR A sponsor is a person who, acting alone or in
combination with another corporate body, establishes a Mutual Fund.
In order to register with SEBI as a Mutual Fund, the sponsor should
have a sound financial track record of over five years and general
reputation of fairness and integrity in all his business
transactions. Following its registration with SEBI, the sponsor
forms a trust, appoints a Board of Trustees and an Asset Management
Company (AMC) as a fund manager. The sponsor should contribute at
least 40% of the net worth of the AMC. SEBI
The regulation of mutual funds operating in India falls under
the preview of authority of the Securities and Exchange Board of
India (SEBI). Any person proposing to set up a mutual fund in India
is required under the SEBI (Mutual Funds) Regulations, 1996 to be
registered with the SEBI.
MUTUAL FUNDA Mutual Fund is established in the form of a trust
under the Indian Trusts Act, 1882. The investor subscribes to the
units issued by the Mutual Funds. The resources raised are pooled
under various schemes established by the trust. TRUSTEES The Mutual
Fund can either be managed by the Board of Trustees, which is a
body of individuals, or by a trust company, which is a corporate
body. Most of the funds in India are managed by the Board of
Trustees. The Trustees are appointed with the approval of the SEBI.
Two thirds of the Trustees are independent persons and are not
associated with the sponsors. The Trustees, however, do not manage
the portfolio of Mutual Fund. It is managed by the AMC.
UNIT HOLDERS
They are the parties to whom the mutual fund is sold. They are
ultimate beneficiary of the income earned by the mutual funds.
ASSET MANAGEMENT COMPANY (AMC) The AMC,appointed by the sponsors or
the Trustees and approved by SEBI, acts like an investment manager
of the Trust. The AMC should have a net worth of at least Rs.10
crores. It functions under the supervision of its Board of
Directors, Trustees and the SEBI. In the name of the Trust, AMC
floats and manages different investment schemes as per the SEBI
regulations. Apart from these, a Mutual Fund has some other
constituents, such as, custodians and depositories, banks, transfer
agents and distributors. A custodian is appointed for safe keeping
the securities and participating in the clearing system through
approved depository. The bankers handle the financial dealings of
the fund. Transfer agents are responsible for issue and redemption
of the units. The AMC appoints distributors or brokers to sell
units on behalf of the fund. CUSTODIAN
The mutual fund is required, under the Mutual Fund Regulations,
to appoint a custodian to carry out the custodial services for the
schemes of the fund. Only institutions with substantial
organizational strength, service capability in terms of
computerization and other infrastructure facilities are approved to
act as custodians. The custodian must be totally delinked from the
AMC and must be registered with SEBI.
Chapter 5
RESEARCH METHODOLOGY
Research can simply be defined as search for knowledge; it is an
art of scientific investigation.In this report a research has been
conducted to know Investors and Advisors perception about Mutual
Funds.
OBJECTIVES:
To study about the mutual funds and MF industry. To know the
perception of Investors and Advisors towards mutual funds.
SCOPE OF THE STUDY:
Study covers mutual fund Company (NJ India invest), mutual fund
industry, investors and advisors behaviour towards mutual funds.
People of age between 20 to 60 years Area covered Panchkula,
manimajra, pinjor, kalka, parwanoo and Zirakpur.
RESEARCH PROCESS1. Define research problem and objective: -
first of all we need to define research problem with out which we
can not proceed. In our study our research problem and Objectives
are
To know about the mutual funds industry. To study the perception
of Investors and Advisors towards mutual funds.
2. Define the information needed: - here we need to define the
information actually required for our study. In this case we
require information about the approach of investors and advisors
about mutual funds e.g. what points investors consider before
investing in mutual fund, attitude of insurance advisors who are
not selling mutual funds and are not AMFI certified. So, the
information sought and information generated is only possible after
defining the information needed.
3. Research design: - A research design is a framework or
conceptual structure with in which research would be conducted and
also helps us to collect maximum information with minimal
expenditure of effort, time and money. In this project Descriptive
Research (in which researcher has no control over variables) is
designed.
4. Determine sample design and sample size:- Sample design is a
definite plan for obtaining a sample from given population and is
determined before data collection. Our study uses convenient
sampling technique.Sample Is the part of totality on the basis of
which a judgment about the totality is made. This study consists of
near about 170 respondents
Population All the investors and advisors from panchkula,
manimajra,pinjor, kalka, parwanoo and zirakpur from 20 July to
11august 2011.
5. Collection of data: - Both primary and secondary data have
been used for the purpose of the data collection.Primary data was
collected by a structured questionnaire. And the secondary data was
collected from companys books and data source.
Chapter 6
DATA INTERPRETATION AND ANALYSIS
After collection of data analysis is done to make it
understandable and to draw a conclusion.In the present work sample
size is 170 which is taken from panchkula, manimajra,pinjor, kalka,
parwanoo and zirakpur
Q1. Are you a wealth Advisor?
YesNoTotal
1700170
The table and diagram shows that there are 170 wealth advisors
in my sample size.
Above diagram shows that, there are 30% females and 70% males
working as a wealth advisors in my sample size.
Q2. How long have you been working as a wealth advisor?
YearsNo of personspercentage
1-54023.52%
5-107544.11%
More than 105532.35%
The above diagram shows that there are 24% means 40 advisors out
of 170 who are working as wealth advisors from 1-5 years. There are
44% means 75 advisors working from 5-10 years and 32% means 55
advisors working from more than 10 years as wealth advisor.
Q3. With which organization you are working?
OrganizationsNo of persons%
LIC8047
Post office5632.94
New India insurance21.76
Oriental insurance3017.64
National insurance21.76
Above data shows 47% advisors work with LIC, 33% work with post
office, about 1% works with new India, 18% advisors work with
Oriental insurance and 1% with National Insurance
Q4.Do you invest in mutual fund?
ResponseRespondents%
Yes3822.35
No13277.64
When question asked to advisors that do they invest in mutual
fund 38 advisors means 22% say yes they do and 78% advisors do not
invest in mutual fund.
(a). If yes, what factors do you keep in mind before investing
in mutual fund?
ResponseRespondents%
Safety1847.36
Good return1231.57
Liquidity821.05
It shows majority of investors i.e. 47% wants safety, 32%want
good return and 21%investors want liquidity before investing in
mutual fund.
Q5. Do you sell MUTUAL FUND?ResponseRespondents%
Yes2514.70
No14585.30
There are 15% advisors who sell Mutual Funds and 85 % advisors
dont deal in mutual fund
Q6.
(a) Are you AMFI certified?
ResponseRespondents%
Yes74.11
No16395.88
In the above diagram there are only 4% advisors are AMFI
certified and 96% are not AMFI certified.
(b) If yes, do you want to associate with NJ India Invest?
ResponseRespondents%
No342.85
Already with NJ457.14
Above data shows that out of 7 AMFI certified advisors there are
57% advisors who are working with NJ India Invest, 43% advisors
dont want to associate with due to less brokerage at NJ.
Q7.Do you want to be an AMFI certified Advisor?
ResponseRespondents%
Yes84.90
No15595.09
out of 163 advisors there are 5% means 8 advisors want to be
AMFI certified and 95% rwe not interested to be AMFI certified.
LIMITATIONS OF THE STUDY
Research has made many achievements and thus simplified human
life. Whatever we are enjoying today is due to research. Every
research has its own advantages, disadvantages and limitations and
my present research work is no exception to this general rule.
Limitations of the study are as under: In this research Interview
method was followed which is very much time consuming and very
expensive method, especially when spread geographic sample is
taken. Questionnaire method can be used only for those respondents
who are literate and co-operative. In this research work Sample
size was 170 which is not enough to study the awareness of mutual
fund and on the basis of this sample we can not make a judgment.
Sampling techniques used in the study is convenient sampling so it
may result in personal bias. Even respondent give bias answers.
Time is main constraint of the research as we have very less
time.
FINDING AND SUGESSIONS During my summer training program at
panchkula in NJ India invest I found that a large number of wealth
Advisors were working with insurance companies (LIC, new India,
oriental insurance, National insurance) and post offices or with
both.Most of investors and advisors have a little knowledge about
mutual fund.
FINDINGS
Highest number of investors comes from the salaried class(having
age group 25-40) and have been investing in mutual funds for last
5-7 years. Most of the advisors have been working with insurance
companies and post offices. Brokerage in mutual funds is very low
as compare to insurance. Mutual fund investments are subject to
market risk therefore people dont want to talk about them. Advisors
dont want to be AMFI certified because they have to study and they
think fee at NJ is more as compare to LIC. Some advisors were
dealing in mutual fund with out any AMFI certification with RR chd.
Majority of people were not aware about NJ India Invest so they
should launch Brand awareness programme periodically. ARN holders
who are working independently dont want to associate with NJ due to
less brokerage at NJ. Some people want to earn high return, some
want safety, some want tax benefit and some want liquidity.
SUGGESTIONS
NJ should decrease charges upon AMFI test. NJ should launch
awareness program about mutual fund for general public to get
direct clients and for brand building. Brokerage of the financial
advisors should be improved. Give more importance to safety and
return attributes because Independent Financial Advisors are more
concern about safety and of giving more benefit of the investments
to their clients. By providing better service NJ India Invest
should try to attract the Independent Financial Advisors to join
with them. Tax benefit should be highlighted to attract public
sector employees for investment in mutual fund.
CONCLUSIONOn the Basis of above research we can say that mutual
fund industry is growing with a great speed and investment in
mutual fund provides a good return in long run i.e. beyond 5 years.
Today each and every person is fully aware of every kind of
investment proposal. Everybody wants to invest money, which
entitled of low risk, high returns and easy redemption. Though a
mutual fund provides a good return but it also has risk involved in
it. Investor should have a good knowledge about working of mutual
fund and market before investment. In my opinion before investing
in mutual funds, one should be fully aware of each and
everything.
REFERENCES & BIBLIOGRAPHY
Websites: www.google.com www.njfundz.com www.amfiindia.com
www.mutualfundsindia.com
Books: C.R.Kothari,Research methodology, new Delhi: new age
international publishers. Text book for AMFI Exam.
Magazines: Business India Opportunity (by NJ) Business Today
Questionnaire
Q1. Are you a wealth Advisor? Yes No
Q2. How long have you been working as a wealth advisor? 0-5years
5-10years More than 10 years
Q3. With which organization you are working? A B C D E
Q4.Do you invest in mutual fund? Yes No
(a). If yes, what factors do you keep in mind before investing
in mutual fund? Safety Return Liquidity
Q5. Do you sell MUTUAL FUND? Yes No
Q6.
(a) Are you AMFI certified? Yes No(b) If yes, do you want to
associate with NJ India Invest? Yes No Already with NJ
Q7.Do you want to be an AMFI certified Advisor? Yes No
Name: - .Mail Id: - .Contact No: - .Office Address: -
Thanks for your Co-operation