AWARENESS IN MARKETING OF MUTUAL FUND
AWARENESS IN MARKETING OF MUTUAL FUND
TABLE OF CONTENTS
Objective of Study
Literature Review
Research studyResearch objectivesResearch MethodologyResearch Methodology adopted
Indian Mutual Fund Industry History of Mutual Fund Introduction of Mutual Fund
Types of Mutual Fund Structure of MF Industry in IndiaAdvantages of Mutual FundRole of SEBI in Mutual FundSEBI’s Code of Conduct
About UTI Mutual Fund
Other Players In Mutual Fund Industry
Data Analysis and Interpretation
Conclusion & Recommendation
Annexure
Questionnaire
Bibliography
OBJECTIVE OF STUDY
This project aimed at finding out the present perception, investing attitude and awareness
towards Mutual Fund of people in Delhi.
A study was necessary to analyze the above stated requirement. A survey was therefore
conducted to find the prospective customer along with their perception and investing
attitude towards Mutual Fund. Objective was first defined and then questionnaires were
developed and administered to different class of people.
The result obtained were analyzed and recommendations drawn which are presented in
the report.
The objective of the project was to know about the present perception, investing attitude
and awareness of people towards mutual funds
The overall objective may be divided into the following:
Selling of mutual Funds:
i) To know the market with regards to the investment activities of
people.
ii) To understand as how people had their experience with Mutual funds.
Know the Customer and prospects:
i) Expectations of peoples towards Mutual Funds.
ii) To Study the other factors that are related with while investing in
Mutual Funds schemes.
LITERATURE REVIEW
The principal task of marketing management is to fulfill the aspiration of consumer. It is
thus imperative to understand what the consumer want; how they make the choice; or
what are their sources of information and influence processes etc. In this process and
organization can identify new opportunities in the market; evaluate and monitor
marketing actions; and in general, evolve better marketing program to serve the interest
of consumers. Thus market research acts a link between the consumer and the marketer.
ROLE OF MARKET RESEARCH
“Marketing research is defined as the systematic and objective search for and analysis of
information relevant to the identification and solution of any problem in the field of
marketing”.
Marketing research is the function which links the consumer, customer, and public to the
marketer through the information-information used to identify and define marketing
opportunities and problems; generate; refine and evaluate marketing actions; monitor
marketing performance; and improve understanding of marketing as a process.
STAGES IN THE MARKET RESEARCH PROCESS
In planning and designing a specific research project, it is necessary to anticipate all the
steps that must be undertaken if the project is to be success in collecting valid and reliable
information. The steps of marketing research process are-
Marketing Research Process
Defining the problem
Statement of the Research Objective
Planning a Research Design
Planning a Sample
Collecting the Data
Analyzing the Data
Formulation of Conclusion
Prepare and present the Report
RESEARCH STUDY
RESEARCH OBJECTIVE
The aim of this research is to study the investor perception about UTI mutual fund and
his awareness level about mutual fund.
Objective
To study the investor’s awareness towards mutual funds .
To find the investor’s overall perception about UTI mutual fund and other mutual
funds
To study the influential attributes of the schemes on the basis of investor’s
sensitivity
The study will also involve thorough field research of the various similar schemes
of other mutual fund and investor’s perception about them.
RESEARCH METHODOLOGY
Research Design
A research design is a type of blueprint prepared depending on various types of blueprints
available for the collection, measurement and analysis of data. A research design calls for
developing the most efficient plan of gathering the needed information. The design of the
research study is based on the purpose of the study.
Types of Research
Exploratory Research
Descriptive Research
Exploratory Research
It is done to generate new ideas; respondents should be given sufficient freedom to
express themselves. Sometimes a group of respondents is brought together and a focus
group interview is held.
An exploratory study is generally based on the secondary data that are readily available.
It does not have a formal and rigid design as the researcher may have to change his focus
or direction, depending on the availability of new ideas and relationship among variables.
Descriptive Research
It is undertaken in many circumstances. When the researcher is interested in knowledge
the characteristics of certain groups such as age; sex; education level; occupation; or
income; interested in knowing the proportion of in a given population who have behaved
in a particular manner; making the projections of a certain things; or determining the
relationship between two or more variables, descriptive study may be necessary.
SAMPLING
An integral component of a research design is the sampling. Specifically, it address three
questions
Whom to survey (the sample unit)?
How many to survey (the sample size)?
How to select the (the sampling procedure)?
The objective of sampling is to get maximum information about the population with
minimum efforts. Sampling produces representative data of the entire population.
Data collection Method
Data, which can be secondary or primary, can be collected using variety of tools.
Collection of primary data through
Observation Method
Interview Method
Through Questionnaire
Through Schedule.
Depth Interview
Secondary Data means data that are already available like:
Various publications of central, state and local government;
Various publications of international bodies ;
Technical and trade journals;
Books, Magazines, Newspapers;
Reports and Publication of various associations connected with business and
industry, bank, stock exchange etc.;
Report prepared by research scholars, Universities, economics, etc.;
Public records and statistics, historical document and other sources of published
information
RESEARCH METHODOLOGY ADOPTED
Research Design Descriptive Research
Research Instrument Questionnaire
Sampling Plan
a) Sample Method Probability Sampling (simple random sampling)
b) Sample Size 100
c) Sample Unit general and service class individual
Sources of Data
a) Primary Data Questionnaire
b) Secondary Data Journal, Magazines, Internet, etc.
INTRODUCTION
A mutual fund is a common pool of money in to which investors with common
investment objective place their contributions that are to be invested in accordance with
the stated investment objective of the scheme. 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 appreciation realized are shared by its
unit holders in proportion to 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.
The MUTUAL FUND industry started in 1963 with the formation of the Unit Trust Of
India , at the initiative by Reserve Bank of India and the Government of India.
The flow chart below describes broadly the working of a mutual fund:
Mutual Fund Operation Flow Chart
HISTORY OF MUTUAL FUND
Mutual Fund Started in US
First Mutual Funds in India Started in 1963 (UTI MF)
First Scheme in India was US 64
PublicSector Banks were allowed to set up Mutual funds in 1987
First public sector bank to set up Mutual was SEBI
Private sector was allowed in 1993 (Kothari Pioneer)
In 1996 SEBI formed Mutual Funds Regulation
In 1999 the dividends from muutual funds were made tax free
In 2003 a level playing field was created & all Mutual funds including UTI
came under SEBI Regulations.
CHARACTERSTICS OF MUTUAL FUND
Investors own the Mutual Fund
AMC manages the funds for a fee
o Fee is expressed as %of assets managed
o Fee is within limits specified by SEBI
The funds are invested in a portfolio of marketable securities , reflecting the
investment objective.
Value of the portfolio & investors holdings ,alters with change in the market
value of investments.
TYPES OF MUTUAL FUND SCHEMES
BY STRUCTURE –
Schemes can be classified as Closed-ended or Open-ended depending upon whether they
give the investor the option to redeem at any time (open-ended) or whether the investor
has to wait till maturity of the scheme (closed-ended scheme).
Open ended Schemes
An open-ended fund or scheme is one that is available for subscription and repurchase on
a continuous basis. These schemes do not have a fixed maturity period. Investors can
conveniently buy and sell units at Net Asset Value (NAV) related prices which are
declared on a daily basis. The key feature of open-end schemes is liquidity.
Closed ended Schemes
A close-ended fund or scheme has a stipulated maturity period e.g. 5-7 years. The fund is
open for subscription only during a specified period at the time of launch of the scheme.
Investors can invest in the scheme at the time of the initial public issue and thereafter
they can buy or sell the units of the scheme on the stock exchanges where the units are
listed. In order to provide an exit route to the investors, some close-ended funds give an
option of selling back the units to the mutual fund through periodic repurchase at NAV
related prices. SEBI Regulations stipulate that at least one of the two exit routes is
provided to the investor i.e. either repurchase facility or through listing on stock
exchanges. These mutual funds schemes disclose NAV generally on weekly basis.
Interval Schemes
These schemes combine the features of open-ended and closed-ended schemes. They may
be traded on the stock exchange or may be open for sale or redemption during pre-
determined intervals at NAV based prices.
BY INVESTMENT OBJECTIVE –
Growth Scheme
These schemes seek to invest a majority of their funds in equities and a small portion in
money market instruments. Such schemes have the potential to deliver superior returns
over the long term. However, because they invest in equities, these schemes are exposed
to fluctuations in value especially in the short term. Equity schemes are hence not
suitable for investors seeking regular income or needing to use their investments in the
short-term. They are ideal for investors who have a long-term investment horizon. The
aim of growth funds is to provide capital appreciation over the medium to long- term
Income 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,
Government securities and money market instruments. Such funds are less risky
compared to equity schemes. These funds are not affected because of fluctuations in
equity markets. However, opportunities of capital appreciation are also limited in such
funds. The NAVs of such funds are affected because of change in interest rates in the
country. If the interest rates fall, NAVs of such funds are likely to increase in the short
run and vice versa. However, long-term investors may not bother about these
fluctuations.
Balanced Schemes
These schemes are commonly known as Hybrid Schemes. These schemes invest in both
equities as well as debt. The aim of balanced funds is to provide both growth and regular
income as such schemes invest both in equities and fixed income securities in the
proportion indicated in their offer documents. These are appropriate for investors looking
for moderate growth. They generally invest 40-60% in equity and debt instruments.
These funds are also affected because of fluctuations in share prices in the stock markets.
However, NAVs of such funds are likely to be less volatile compared to pure equity
funds.
OTHER SCHEMES –
Index schemes
The primary purpose of an Index is to serve as a measure of the performance of the
market as a whole, or a specific sector of the market. An Index also serves as a relevant
benchmark to evaluate the performance of mutual funds. Some investors are interested in
investing in the market in general rather than investing in any specific fund. Such
investors are happy to receive the returns posted by the markets. As it is not practical to
invest in each and every stock in the market in proportion to its size, these investors are
comfortable investing in a fund that they believe is a good representative of the entire
market. Index Funds are launched and managed for such investors.
Tax Saving schemes
The Scheme is subject to Securities & Exchange Board of India (Mutual Funds)
Regulations, 1996 and the notifications issued by the Ministry of Finance (Department of
Economic Affairs), Government of India regarding ELSS.
Subject to such conditions and limitations, as prescribed under Section 88 of the Income-
tax Act, 1961, subscriptions to the Units not exceeding Rs.10, 000 would be eligible to a
deduction, from income tax, of an amount equal to 20% of the amount subscribed.
STRUCTURE OF MUTUAL FUND INDISTRY IN INDIA
There are many entities involved and the diagram below illustrates the organisational set
up of a mutual fund:
THE STRUCTURE CONSISTS OF
Sponsor -
Sponsor is the person who contribute atleast 40% of the networth of the Investment
Managed and meet the eligibility criteria prescribed under the Securities and Exchange
Board of India (Mutual Funds) Regulations,
1996.The Sponsor is not responsible or liable for any loss or shortfall resulting from the
operation of the Schemes beyond the initial contribution made by it towards setting up of
the Mutual Fund.
Trust -
The Sponsor constitutes the Mutual Fund as a trust in accordance with the provisions of
the Indian Trusts Act, 1882. The trust deed is registered under the Indian Registration
Act, 1908.
Trustee -
Trustee is usually a company (corporate body) or a Board of Trustees (body of
individuals). The main responsibility of the Trustee is to safeguard the interest of the unit
holders and inter alia ensure that the AMC functions in the interest of investors and in
accordance with the Securities and Exchange Board of India (Mutual Funds) Regulations,
1996, the provisions of the Trust Deed and the Offer Documents of the respective
Schemes. At least 2/3rd directors of the Trustee are independent directors who are not
associated with the Sponsor in any manner.
Asset Management Company (AMC) -
The Trustee as the Investment Manager of the Mutual Fund appoints the AMC. The
AMC is required to be approved by the Securities and Exchange Board of India (SEBI) to
act as an asset management company of the Mutual Fund. At least 50% of the directors of
the AMC are independent directors who are not associated with the Sponsor in any
manner. The AMC must have a net worth of at least 10 crore at all times.
Registrar and Transfer Agent -
The AMC if so authorized by the Trust Deed appoints the Registrar and Transfer Agent
to the Mutual Fund. The Registrar processes the application form, redemption requests
and dispatches account statements to the unit holders. The Registrar and Transfer agent
also handles communications with investors and updates investor records.
ADVANTAGES OF MUTUAL FUND IN INDIA
Affordability
A mutual fund invests in a portfolio of assets, i.e. bonds, shares, etc. depending upon the
investment objective of the scheme. An investor can buy in to a portfolio of equities,
which would otherwise be extremely expensive. Thus it would be affordable for an
investor to build a portfolio of investments through a mutual fund rather than investing
directly in the stock market.
Diversification
It means that you must spread your investment across different securities (stocks, bonds,
money market instruments, real estate, fixed deposits etc.) and different sectors (auto,
textile, information technology etc.). This kind of a diversification may add to the
stability of your returns
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 with different needs and risk
appetites; secondly, it offers an opportunity to an investor to invest sums across a variety
of schemes, both debt and equity.
Professional Management
Qualified investment professionals who seek to maximize returns and minimize risk
monitor investor's money. When you buy in to a mutual fund, you are handing your
money to an investment professional who has experience in making investment decisions.
It is the Fund Manager's job to (a) find the best securities for the fund, given the fund's
stated investment objectives; and (b) keep track of investments and changes in market
conditions and adjust the mix of the portfolio, as and when required.
Tax Benefits
Any income distributed after March 31, 2002 will be subject to tax in the assessment of
all Unit holders. However, as a measure of concession to Unit holders of open-ended
equity-oriented funds, income distributions for the year ending March 31, 2003, will be
taxed at a concessional rate of 10.5%.
In case of Individuals and Hindu Undivided Families a deduction upto Rs. 9,000 from the
Total Income will be admissible in respect of income from investments specified in
Section 80L, including income from Units of the Mutual Fund. Units of the schemes are
not subject to Wealth-Tax and Gift-Tax.
Regulations
Securities Exchange Board of India (“SEBI”), the mutual funds regulator has clearly
defined rules, which govern mutual funds. These rules relate to the formation,
administration and management of mutual funds and also prescribe disclosure and
accounting requirements. Such a high level of regulation seeks to protect the interest of
investors
Liquidity
In open-ended mutual funds, you can redeem all or part of your units any time you wish.
Some schemes do have a lock-in period where an investor cannot return the units until
the completion of such a lock-in period.
Convenience
An investor can purchase or sell fund units directly from a fund, through a broker or a
financial planner. The investor may opt for a Systematic Investment Plan (“SIP”) or a
Systematic Withdrawal Advantage Plan (“SWAP”). In addition to this an investor
receives account statements and portfolios of the schemes
Flexibility
Mutual Funds offering multiple schemes allow investors to switch easily between various
schemes. This flexibility gives the investor a convenient way to change the mix of his
portfolio over time.
Transparency
Open-ended mutual funds disclose their Net Asset Value (“NAV”) daily and the entire
portfolio monthly. This level of transparency, where the investor himself sees the
underlying assets bought with his money, is unmatched by any other financial instrument.
Thus the investor is in the know of the quality of the portfolio and can invest further or
redeem depending on the kind of the portfolio that has been constructed by the
investment manager.
Drawbacks of Mutual Fund
Mutual funds have their drawbacks and may not be for everyone:
No Guarantees: No investment is risk free. If the entire stock market declines in
value, the value of mutual fund shares will go down as well, no matter how
balanced the
portfolio. Investors encounter fewer risks when they invest in mutual funds than
when
they buy and sell stocks on their own. However, anyone who invests through a
mutual
fund runs the risk of losing money.
Fees and commissions: All funds charge administrative fees to cover their day-
to-day expenses. Some funds also charge sales commissions or "loads" to
compensate brokers, financial consultants, or financial planners. Even if you don't
use a broker or other financial adviser, you will pay a sales commission if you buy
shares in a Load Fund.
Taxes: During a typical year, most actively managed mutual funds sell anywhere
from 20 to 70 percent of the securities in their portfolios. If your fund makes a
profit on its sales, you will pay taxes on the income you receive, even if you
reinvest the money you made.
Management risk: When you invest in a mutual fund, you depend on the fund's
manager to make the right decisions regarding the fund's portfolio. If the manager
does not perform as well as you had hoped, you might not make as much money
on your investment as you expected. Of course, if you invest in Index Funds, you
forego management risk, because these funds do not employ managers.
ROLE OF SEBI IN MUTUAL FUNDS INDUSTRY
In the year 1992, Securities and exchange Board of India (SEBI) Act was passed. The
objectives of SEBI are – to protect the interest of investors in securities and to promote th
developmentof and to regities markets ulate the secar.
SEBI REGULATIONS
Mutual Funds are highly regulated financial entities that must comply with a large
number of regulates mutual funds as per the Security and Exchange Board of India
(Mutual Funds) Regulations,1996(“SEBI Regulations”)
Registration
All mutual funds are required to be registered with SEBI. SEBI Regulations lay down the
terms and conditions of registration, including fee mutual funds may charge investors.
Constitution and Management
SEBI Regulations highlight the manner in which the mutual fund ought to be constituted
including the contents of the trust deed. It also mentions the eligibility criteria for the
appointment of assets management company, custodian and registers & share transfer
agents.
Advertising Code
SEBI Regulations lays down strict norms for any advertisements by a mutual fund with a
view to ensure that there are no inaccurate and misleading statements.
Investment Objectives and Valuation Policies
SEBI Regulations restrict the type of investments by any mutual funds. And the
investment objective and policies in respect of any scheme should be clearly mentioned
in the offer document pertaining to such scheme in accordance with the regulations. SEBI
Regulations also lay down guidelines and method for valuation of investments,
computation of NAV and pricing of units.
SEBI'S CODE OF CONDUCT FOR INTERMEDIARIES OF
MUTUAL FUNDS
1. Take necessary steps to ensure that the clients' interest is protected.
2. Adhere to SEBI Mutual Fund Regulations and guidelines related to selling,
distribution and advertising practices. Be fully conversant with the key provisions
of the offer document as well as the operational requirements of various schemes.
3. Provide full and latest information of schemes to investors in the form of offer
documents, performance reports, fact sheets, portfolio disclosures and brochures,
and recommend schemes appropriate for the client's situation and needs.
4. Highlight risk factors of each scheme, avoid misrepresentation and exaggeration,
and urge investors to go through offer documents/key information memorandum
before deciding to make investments.
5. Disclose all material information related to the schemes/plans while canvassing
for business.
6. Abstain from indicating or assuring returns in any type of scheme, unless the offer
document is explicit in this regard.
7. Maintain necessary infrastructure to support the AMCs in maintaining high
service standards to investors, and ensure that critical operations such as
forwarding forms and cheques to AMCs/registrars and
8. Dispatch of statement of account and redemption cheques to investors are done
within the time frame prescribed in the offer document and SEBI Mutual Fund
Regulations.
9. Avoid colluding with clients in faulty business practices such as bouncing
cheques, wrong claiming of dividend/redemption cheques, etc.
10. Avoid commission driven malpractices such as:
(a) recommending inappropriate products solely because the intermediary is
getting higher commissions there from.
(b) Encouraging over transacting and churning of mutual fund investments to earn
higher commissions, even if they mean higher transaction costs and tax for
investors.
11. Avoid making negative statements about any AMC or scheme and ensure that
comparisons if any, are made with similar and comparable products.
12. Ensure that all investor related statutory communications (such as changes in
fundamental attributes, exit/entry load, exit options, and other material aspects)
are sent to investors reliably and on time.
13. Maintain confidentiality of all investor deals and transactions.
14. When marketing various schemes, remember that a client's interest and suitability
to their financial needs is paramount, and that extra commission or incentive
earned should never form the basis for recommending a scheme to the client.
15. Intermediaries will not rebate commission back to investors and avoid attracting
clients through temptation of rebate/gifts etc.
16. A focus on financial planning and advisory services ensures correct selling, and
also reduces the trend towards investors asking for pass back of commission.
UTI MUTUAL FUND
UTI Mutual Fund is managed by UTI Asset Management Company Private Limited
(Est.: Jan 14, 2003) who has been appointed by the UTI Trustee Company Private
Limited for managing the schemes of UTI Mutual Fund and the schemes transferred /
migrated from UTI Asset Management Company has its registered office at: UTI Tower,
Gn Block, Bandra - Kurla Complex, Bandra (East), Mumbai - 400 051 will provide
professionally managed back office support for all business services of UTI Mutual Fund
(excluding fund management) in accordance with the provisions of the Investment
Management Agreement, the Trust Deed, the SEBI (Mutual Funds) Regulations and the
objectives of the schemes. State-of-the-art systems and communications are in place to
ensure a seamless flow across the various activities undertaken by UTI AMC.
UTI AMC is a registered portfolio manager under the SEBI (Portfolio Managers)
Regulations, 1993 on February 3 2004, for undertaking portfolio management services
and also acts as the manager and marketer to offshore funds through its 100 % subsidiary,
UTI International Limited, registered in Guernsey, Channel Islands.
UTI Mutual Fund has come into existence with effect from 1st February 2003. UTI Asset
Management Company presently manages a corpus of over Rs.20000 Crore.
UTI Mutual Fund has a track record of managing a variety of schemes catering to the
needs of every class of citizenry. It has a nationwide network consisting 56 UTI Financial
Centres (UFCs) and representative offices in Dubai and London. With a view to reach to
common investors at district level, 11 satellite offices have also been opened in select
towns and districts. It has a well-qualified, professional fund management team, who has
been highly empowered to manage funds with greater efficiency and accountability in the
sole interest of unit holders.
Trustee
UTI Trustee Company Private Limiteda company incorporated
under The Companies Act, 1956 will be the Trustee of
transferred/migrated schemes are the first and sole trustee of the
Mutual Fund under the Trust Deed dated December 9, 2002 executed
between the Sponsors and the Trustee Company (the Trustee).
UTI Tower, Gn Block, Bandra - Kurla Complex, Bandra (East), Mumbai -
400 051
Board of Directors
Shri Janki Ballabh,
Dr. P G Apte,
Shri S P Oswal,
Shri Babasaheb Neelkanth Kalyani
Asset Management Company
UTI Asset Management Company Limited is a company incorporated under The
Companies Act, 1956. Registered office: UTI Tower, Gn Block, Bandra - Kurla
Complex, Bandra (East), Mumbai - 400 051.
UTI Asset Management Company Limited has been appointed as the Asset Management
Company of the UTI Mutual Fund by the Trustee in terms of Investment Management
Agreement dated December 9, 2002 executed between UTI Trustee Company Limited
and UTI Asset Management Company Limited. The AMC was approved by SEBI to act
as the asset management company for UTI Mutual Fund vide their letter
no.MF/BC/PKN/03 dated January 14, 2003.
The paid up capital of the UTIAMC has been subscribed equally by the four sponsors,
viz. State Bank of India, LIC of India, Bank of Baroda and Punjab National Bank. The
AMC apart from managing the schemes of UTI Mutual Fund will also manage the
schemes transferred/migrated from the erstwhile Unit Trust of India, in accordance with
the provisions of the Investment Management Agreement, the Trust Deed, the SEBI
(Mutual Funds) Regulations and the objectives of the schemes.
UTI AMC has entered into a service agreement with the Administrator of the Specified
Undertaking of The Unit Trust of India to provide back office support for business
processes but specifically excluding the making of decisions for the sale and purchase
for assets of the Specified Undertaking. UTI AMC has been registered as a portfolio
manager under the SEBI (Portfolio Managers) Regulations, 1993 on February 3 2004,
for undertaking portfolio management services.
NAME OF DIRECTORS OF UTI ASSET MANAGEMENT CO. (P)Ltd
Shri UK Sinha
Chairman& managing Director
Shri SK Bhargava
Non executive Chairman
Dr. KC Mishra
Director
Ms. Anita Ramachandaran
Director & CEO
Shri Prithvi Haldea
Managing Director
Shri PK Khanna
Charted Accountant
Sponsors
Three leading public sector banks – Bank of Baroda, Punjab National Bank and
State Bank ofIndia and Life Insurance Corporation of India (LIC), the largest
public financial investment institution and life insurer in India are the sponsors of UTI
Mutual Fund.
Bank of Baroda:-
Bank of Baroda is a commercial bank performing activities in terms of Banking
Companies (Acquisition and Transfer of Undertakings Act 1970) under which the
Undertaking of the Bank was taken over by the Central Government. During the period
since inception, it has always maintained its practice of sound value based banking to
emerge as one of the premier public sector Banks of the country today. It has a track
record of uninterrupted profits since inception in 1908. The financial strength of the
Bank and its long tradition of efficient customer service are drawn substantially from the
extensive reach of its 2704 strong branch network (as of 31.03.2006) covering almost
every State and Union Territory in the Country. The Bank is also one of the few Indian
Banks with a formidable presence overseas with 39 branches. Thus, the total branch
network is 2,743 as at 31.03.2006.
Life Insurance Corporation of India
Life Insurance Corporation of India (LIC) is amongst the largest insurance companies in
the world, with 2048 branches and having a Fund size of Rs. 463147.62 crore.
Three leading public sector banks – Bank of Baroda, Punjab National Bank and State
Bank of
India and Life Insurance Corporation of India (LIC), the largest public financial
investment institution and life insurer in India are the sponsors of UTI Mutual Fund.
Punjab National Bank
Punjab National Bank is a commercial bank performing activities in terms of Banking
Companies (Acquisition and Transfer of Undertakings Act 1970) under which the
Undertaking of the Bank was taken over by the Central Government. The main object of
the bank under the said Act is as below:- An act to provide for the acquisition and
transfer of the undertaking of certain banking companies, having regard to their size,
resources coverage and organisation, in order to further to control the heights of the
economy, to meet progressively and serve better, the needs of the development of the
economy and to promote the welfare of the people, in conformity with the policy of the
State towards securing the principles laid down in clause (b) and (c) of Article 39 of the
Constitution of India and for matter connected therewith or incidental therein.
State Bank of India:
The State Bank of India is the largest public sector bank in India with
9177 branches in India and 70 offices in 30 countries worldwide. In
addition to this, SBI also has 21 subsidiaries. The sponsors are not
responsible nor liable for any loss resulting from the operation of the
scheme beyond the contribution of an amount of Rs.10,000/- made by
them towards setting up of the Mutual Fund.
SCHEMES OF UTI MUTUAL FUND
A. LIQUID FUND CATEGORY
UTI Money Market Fund
UTI Liquid Short-Term Plan
UTI Liquid Fund-Cash Plan
UTI Liquid Advantage Fund
B. INCOME FUND CATEGORY
UTI G-sec Fund-Investment Plan
UTI G-sec Fund-Short term Plan
UTI Gilt Advantage Plan-LTP
UTI Gilt Advantage Plan-STP
UTI Bond Fund
UTI Bond Advantage Fund-LTP
UTI Bond Advantage Fund-STP
UTI Floating Rate Fund
UTI monthly Income Scheme
UTI MIS Advantage Plan
UTI Children’s Career Plan
C. BALANCED FUND CATEGORY
PURE BALANCED FUND
UTI Balanced Fund
UTI US 2002
GEMENT FOCUDSED FUNDS
UTI Mahila Unit Scheme
UTI Children’s Career Plan(Balanced)
UTI Charitable & Religious Trust
& Registered Society
RETIREMENT BENEFIT/UNIT LINK PLAN
UTI Unit Link Insurance Plan
UTI Retirement Benefit Pension Fund
D. ASSET ALLOCATION FUNDS CATEGORY
UTI Variable Investment Scheme
UTI Dynamic Equity Fund
E. INDEX FUNDS CATEGORY
PURE INDEX FUND
UTI Master Index Fund
UTI Nifty Index Fund
UTI –Index Advantage Fund-Nifty Plan
ENHANCED INDEX FUND
UTI Index Select Fund
EXCHANGE TRATED FUND
UTI Sunder
F. EQUITY FUND CATEGORY
TAX PLANNING FUND
UTI Equity Tax saving Plan
UTI MEPUS(not open for sale)
DIVERSIFIED FUND
UTI Mastershare Unit Scheme
UTI Master Plus Unit Scheme
UTI Mastergain Unit scheme
UTI Grandmaster Unit Scheme
UTI PEF Unit Scheme
UTI Growth and Value Fund
SECTOR FUND
UTI Petro Fund
UTI Pharma & Healthcare Fund
UTI Software Fund
UTI Auto Sector Fund
UTI banking Sector Fund
SPECIALTY/THEME BASED FUND
UTI Mastergrowth
UTI Master value fund
UTI MNC Fund
UTI Brand Value Fund
UTI Service Fund
UTI Large Cap Fund
UTI Mid Cap Fund
UTI Basic Industries Fund
UTI PSU Fund
UTI India Advantage Equity Fund
PLAYERS IN MUTUAL FUND INDUSTRY
1. Alliance Capital
Alliance Capital Asset Management (India) Pvt. Ltd. (ACAM) is an affiliate of
Alliance Capital Management L.P. (Alliance Capital), a leading global investment
adviser headquartered New York, USA. Alliance operates out of eight offices in the
US and through its subsidiaries and affiliate offices in over 19 countries. Alliance
Capital and its subsidiaries employ over 4,000 persons worldwide.
2. Birla Sun Life Mutual Fund
Birla Sun Life Mutual Fund follows a conservative long-term approach to investment,
which is based on identifying companies that have good credit-worthiness and are
fundamentally strong. It places a lot of emphasis on quality of management and risk
control. This is done through extensive analysis that includes factory visits and field
research. It has one of the largest team of research analysts in the industry. The company
is one of India's leading, private mutual funds with a large customer base. It has been
recognised nationally with coveted awards.
3. Cholamandalam Mutual Fund
Cholamandalam AMC Limited (CAMC) is an asset management company, which offers
mutual funds to retail and institutional investors. The company was set up in 1996, as a
joint venture with Cazenove Investment Management of the UK. In 2001, the Murugappa
Group acquired Cazenove’s stake in the company; today CAMC is a subsidiary of
CIFCL. CAMC is known for its prudent philosophy in fund-management. Chola Triple
Ace, India’s first AAAf-rated mutual fund scheme, has not only retained its rating since
inception, but also has a consistent track record of dividend payments. Based in Mumbai,
CAMC manages over Rs.1000 crores of assets
4. Franklin Templeton
Franklin Templeton Investments is one of the largest financial services groups in the
world based at San Mateo, California USA. The group has US$ 409.2 billion in assets
under management globally (as of April 30, 2005).
Franklin Templeton has set-up offices in 33 locations nationwide and manages Rs.17,
079.29 crores in assets and an investor base of 10.5 lacs as of May 31, 2005.
5. ING Mutual Fund
ING Vysya Mutual Fund brings with it the vast international experience and
professional expertise of the ING Group. With presence in eight cities across the
country, and over Rs. 1600 crores of Assets Under Management, ING Vysya Mutual
Fund aims to provide investors with the most practical and secure investment
opportunities to invest their valuable savings. This is combined with a range of
innovative options to deliver healthy returns combined with a high degree of security.
Currently, the fund offers four equity, five debt and two hybrid schemes to its
investors
6. Kotak Mahindra Mutual Fund
Kotak Mahindra Mutual Fund (KMMF) is managed by Kotak Mahindra Asset
Management Company Ltd., a wholly owned subsidiary of Kotak Mahindra Bank
Ltd. Kotak Mahindra Mutual Fund launched its Schemes in December 1998 and today
manages assets over and above Rs. 7353.82 cr. contributed by more than 1,99,818
investors in various schemes. KMMF has to its credit the launching of innovative
schemes and plans like Kotak Gilt and Free Life Insurance with Kotak Bond Deposit
Plan.
7. Prudential ICICI Mutual Fund
Prudential ICICI Asset Management Company, (55%:45%) a joint venture between
Prudential Plc, UK's leading insurance company and ICICI Bank Ltd, India's premier
financial institution.
The joint venture was formed with the key objective of providing the Indian investor
mutual fund products to suit a variety of investment needs. The AMC has already
launched a range of products to suit different risk and maturity profiles. Prudential ICICI
Asset Management Company Limited has a networth of about Rs. 80.14 crore (1 crore =
10 million) as of March 31, 2004. Both Prudential and ICICI Bank Ltd have a strategic
long-term commitment to the rapidly expanding financial services sector in India
8. Reliance Capital Mutual Fund
Reliance Capital Asset Management Limited (RCAM), a company registered under
the Companies Act, 1956 was appointed to act as the Investment Manager of Reliance
Mutual Fund.
Reliance Capital Asset Management Limited is a wholly owned subsidiary of
Reliance Capital Limited, the sponsor. The entire paid-up capital (100%) of Reliance
Capital Asset Management Limited is held by Reliance Capital Limited.
9. SBI Mutual Fund
SBI Mutual Fund draws strength from India's premier and largest bank; the State Bank of
India. Set up on July 1, 1955, the State Bank of India is the largest banking operation in
the country.
Through years of commitment to service and national development, SBI has grown into
an instrument of social change. Today, it has 9,039 branches in India (excluding 4599
branches of banking subsidiaries) and 54 offices in 28 countries spread over all time
zones.
10. Tata Mutual Fund
Tata Asset Management Ltd. is a part of the Tata group - one of India's largest and most
respected industrial group. The Tata Group is one of India's best-known conglomerate in
the private sector with a turnover of around US $ 11.2 billion (equivalent to 2.4 % of
India's GDP). Long known for its adherence to business ethics, it is India's most
respected private business group. With 210,443 employees across 93 companies, it is also
India's largest employer in the private sector.
11. DSP MERRILL LYNCH MUTUAL FUND
DSP Merrill Lynch Fund Managers is the investment manager to DSP Merrill Lynch
Mutual Fund and is a subsidiary of DSP Merrill Lynch Ltd. DSP Merrill Lynch is one of
India's leading financial services company.
12. HDFC
HDFC Asset Management Company Ltd(AMC) was incorporated under the Companies
Act, 1956, on December 10, 1999, and was approved to act as an Asset Management
Company for the Mutual Fund by SEBI on June 30, 2000.
The registered office of the AMC is situated at Ramon House, 3rd Floor, H.T. Parekh
Marg, 169, Backbay Reclamation, Churchgate, Mumbai - 400 020.
13. FIDELITY INVESTMENT
14. STANDARD CHARTERED
15. ESCORTS
16. PRINCIPAL MUTUAL FUND
17. HSBC
18. Sundaram Mutual Fund
Mutual Funds – FAQs
Net Asset Value (NAV)
Net Asset Value is the market value of the assets of the scheme minus its liabilities. The
per unit NAV is the net asset value of the scheme divided by the number of units
outstanding on the Valuation Date
Sale Price
Is the price you pay when you invest in a scheme. Also called Offer Price. It may include
a sales load.
Repurchase Price
Is the price at which a close-ended scheme repurchases its units and it may include a
back-end load. This is also called Bid Price.
Redemption Price
Is the price at which open-ended schemes repurchase their units and close-ended schemes
redeem their units on maturity. Such prices are NAV related.
Sales Load
Is a charge collected by a scheme when it sells the units. Also called, ‘Front-end’ load.
Schemes that do not charge a load are called ‘No Load’ schemes.
Repurchase or ‘Back-end’ Load
Is a charge collected by a scheme when it buys back the units from the unitholders.
DATA ANALYSIS & INTERPRETATION
The data collected from primary sources through collection of the responses of the
questionnaire was assembled, stored, selected and analyzed. The analysis of the data is as
under here-
1. Do you know about mutual fund
64
36
yes no
INTERPRETATION:
Yes 64
No 36
From the above diagram it is quite clear that awareness towards mutual funds is 64% i.e.,
mostly majority is aware of the mutual fund.
2. AWARENESS TOWARDS MF THROUGH
NATURE OF AWARENESSNO OF
RESPONDENT
NEWSPAPER 30
T.V. 23
MAGAZINES 20
FRIENDS & RELATIVES 10
FINANCIAL ADVISOR 7
OTHERS 10
0
23
0
20
0
10
0
7
0
10
0
5
10
15
20
25
INTERPRETATION:
From the above table it can be seen that newspaper (30%) has an upper edge in awareness
of the mutual fund followed by TV (23%) and magazines (20%).
3. INVESTMENT IN MUTUAL FUNDS
TYPES OF AMC NO OF RESPONDENTS
UTI 40
KOTAK 12
HDFC 10
PRUDENTIAL ICICI 25
FRANKLIN TEMPLTON 8
OTHERS 5
40
1210
25
8 5
UTI KOTAK HDFC
PRUDENTIAL ICICI FRANKLIN TEMPLTON OTHERS
INTERPRETATION:
From the above table it is quite clear that mostly respondents prefer to invest in UTI
(40%) followed by Prudential ICICI (25%), KOTAK (12%).
4.Do you have investment in mutual fund
YES 24
NO 76
24
76
YES NO
INTERPRETATION:
From the above table it is quite clear that mostly respondents do not have investment in
mutual fund.
5.REASON TO PREFER MUTUAL FUND
Attributes/Rank 1 2 3 4 5
TAX SAVING 270 170 40 20 0
HIGH RETURN 155 260 60 15 10
LIQUIDITY 50 40 185 140 85
TRANSPRANCY 15 20 175 185 105
FLEXIBILITY 10 10 40 140 300
0
50
100
150
200
250
300
350
1 2 3 4 5
TAX SAVING
HIGH RETURN
LIQUIDITY
TRANSPRANCY
FLEXIBILITY
INTERPRETATION:
From the above table it is quite clear that mostly respondents invested money due to tax
benefit followed by high return, liquidity, transprancy, and flexibility.
6.What the most preferred period of investment
PERIODS NO OF RESPONDENTS
BELOW 1 YEAR 50
1-3 YEAR 260
3-5 YEAR 120
ABOVE 5 YEAR 70
0
10
20
30
40
50
60
BELOW 1YEAR
1-3 YEAR 3-5 YEAR ABOVE 5YEAR
Series1
INTERPRETATION:
From the above table it is quite clear that mostly respondents invested their money for
short-term period (1-3 year) followed by 3-5 year.
7. Do you have any future plan for investment
YES 64
NO 36
INTERPRETATION:
From the above table it is quite clear that mostly respondents are interested to invest in
mutual fund in future .As the above graph shows that 64 % respondents are interested to
invest in future.
8.Have you ever invested in UTI Mutual Fund?
YES 33
NO 67
33%
67%
YES NO
INTERPRETATION:
From the above table it is quite clear that only 33% respondents have investment in UTI
mutual fund.
9.IF YES, IN WHICH SCHEME?
NATURE OF SCHEME No. Of RESPONDENTS
EQUITY 8
BALANCED 16
DEBT 9
No. Of RESPONDENTS
9
16
8
02468
1012141618
EQUITY BALANCED DEBTNo. Of RESPONDENTS
INTERPRETATION:
From the above table it is quite clear that 48.48% respondents have investment in UTI
Balanced fund followed by debt fund (27.27%) and equity fund (24.24%).
10..HOW DO YOU RATE UTI MUTUAL FUND AGIANST OTHER MUTUAL
FUND?
RATINGSNO OF
RESPONDENTS
EXCELLENT 8
GOOD 63
AVERAGE 22
POOR 7
INTERPRETATIONS:
It can be concluded by saying that the 63% respondents rate UTI mutual fund as good
against other mutual fund whereas 22% respondents rate UTI mutual fund as average
against other mutual funds.
11.OPINION REGARDING MARKETING, SALES AND AFTER SALES
SERVICES OF UTI MUTUAL FUND?
RATINGS
NO OF
RESPONDENTS
EXCELLENT 2
GOOD 10
AVERAGE 14
POOR 7
0
2
4
6
8
10
12
14
EXCELLENT GOOD AVERAGE POOR
Series1
INTERPRETATIONS:
It can be concluded by saying that the maximum respondents rate UTI mutual fund as
average towards sales and service.
CONCLUSION
It was very difficult to pursue people to invest their capital, as the mindset of people is
not to invest in any type risk, which is attached to their capital. For the purpose, we had
to meet different type of people. Some were managers, businessman, service class,
doctors, retired persons etc. All have a different mind and their own views while they
think of investing in mutual fund, as the market was not so good. So one option was that
the unit price of the Mutual Fund had come down and it was better time for people to
invest at a low value and earn a higher return in a long run. During this period we
collected information on the following funds also, such as Birla Mutual Fund, Franklin
Templeton, Prudential ICICI Mutual Fund. All of them have different schemes. Many
things that were not known to us came into light and the last but not the least was
experiencing that current market and the condition prevailing.
Following are the points which cover the whole conclusion of the survey regarding the
project-
Most of the respondents were aware about mutual fund but they do not know very
much about mutual fund.
Most of the respondents were aware through newspapers and magazines.
Among the total respondents covered maximum respondent had already
investment in mutual funds.
The most popular and well known mutual funds is UTI MUTUAL
FUND and followed by PRUDENTIAL ICICI, KOTAK MAHINDRA, HDFC
MUTUAL FUNDS and FRANKLIN TEMPLENTON.
Among the total respondents covered, maximum respondents prefer mutual
funds due to tax benefits followed by high returns transparency, liquidity and
flexibility.
The respondent who have invested UTI mutual funds, are not very much
satisfied with services of UTI mutual funds and now they are switching to private
mutual funds for better services.
High net worth individuals wants high returns on their money so they want to
invest in equity-oriented funds.
Medium class individuals want moderate returns as well as security on their
money so they prefer in balanced funds.
The investors, who had been lost their money in mutual funds, are now switching
to other saving investments.
RECOMMENDATIONS & FINDINGS
According to agents, private mutual fund’s advertisement and logo concept
plays major role in awareness about the product. So UTI mutual funds should also
do aggressive ad campaign with the celebrity endorsement and innovative and
creative logo should be there which matches the product and signifies the strength
of the type.
An agent in continues should be increased to boost sales.
As the mutual fund industry is growing and facing tough competition from
foreign brands, UTI mutual funds should focus on product awareness and product
preference advertising.
There are some investors who have invested in UTI mutual funds, but they are
actually not aware about mutual funds because of the lack of awareness of mutual
funds, so the company should conduct such a awareness programs that the people
should come to know about the schemes of UTI mutual funds.
Advertising of the schemes in newspaper should be done aggressively so that
investors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokers
investors and corporate
The organization should focus on balanced scheme as they are the most
preferred scheme.
ANNEXURES
The following important annexure relevant to this study are enclosed with the –
Questionnaire
Graph of Indian mutual fund industry
Awareness in marketing of Mutual Funds
(With reference to UTI Mutual Funds)
QUESTIONNAIRE
NAME :
OCCUPATION :
COMPANY NAME :
DESIGNATION :
ADDRESS :
TEL. NO. :
MOB. NO. :
E-MAIL :
1.Do you know about Mutual Funds? Yes No
2. If Yes, than from which source
News Paper
T.V.
Magazines
Friends and Relatives
Financial Advisor
Others (please specify)
3. The name, which comes to your mind when it comes to mutual funds
4. Do you have any investment in mutual funds Yes No
If yes, company & fund name. I.
II.
III.
5. Please tell why you prefer mutual funds (please mention in the order of preference)
I. Tax Benefit
II. High return
III. Liquidity
IV. Transparency
V. Flexibility
6.What is the most preferred period of investment in the mutual fund.
I. Below 1 Year
II. 1-3 Year
III. 3-5 Year
IV. Above 5 year
7. Do you have any future plan for investing in mutual funds? Yes No
8. Have you ever invested in UTI mutual funds? Yes No
9. If yes, in which fund
Equity Balanced Debt
10. How do you rate UTI mutual fund against other mutual funds
Excellent Good Average Poor
11. What is your opinion regarding marketing, sales and after sales services of UTI
mutual funds.
Excellent Good Average Poor
12. Give your suggestions regarding UTI Mutual funds as a Port Folio Manager
Signature
UTI Mutual Funds 41 Navyug Market, Ghaziabad.
Tel. 2790966/0366
BIBLIOGRAPHY
BOOKS:
MARKETING RESEARCH C.R.KOTHARI
PROJECT REPORT WRITING M.K.RAMPAL & S.L.GUPTA
UTI BULLETIN PLUS MARCH -APRIL
INTERNET:
www.utimf.com
www.amfiindia.com
www.mutualfundsindia.com
www.google.com