Bachelor of Business ManagementIndustry Internship Programme
(IIP)DeclarationThis is to declare that the Report titled MARKETING
AND SALES WITH RESPECT TO UTI MUTUAL FUND has been made for the
partial fulfillment of the Course: Industry Internship Programme
(IIP) in Semester VI by me at UTI Mutual Fund under the guidance of
Mr. Gaur & Ankur Tyagi.I confirm that this Report truly
represents my work undertaken as a part of my Industry Internship
Programme (IIP). This work is not a replication of work done
previously by any other person. I also confirm that the contents of
the report and the views contained therein have been discussed and
deliberated with the faculty guide.
Signature of the Student:
Name of the Student (in Capital Letters): Manish
GuptaRegistration No: 11010141071
Certificate
This is to certify that Mr. Manish Gupta Regn. No. 11010141071
has completed the report titled MARKETING AND SALES WITH RESPECT TO
UTI MUTUAL FUND under my guidance for the partial fulfillment of
the Course: Industry Internship Programme (IIP) in Semester VI of
the Bachelor of Business Management.
Signature of Faculty Guide:
Name of the Faculty Guide: Dr. Vidhisha Vyas
ContentS.NO.CHAPTERPAGE
EXECUTIVE SUMMARYUTI Mutual Fund is among one of the largest
financial institution. It is doing its business by continuously
delivering a differentiated products and services that provide high
business value in return.The main objectives are To know the
awareness of mutual fund amongst the investor. To know the
investors knowledge and perceptions about mutual fund. To know the
investor priority level between different criteria of investment
like safety level, returns, liquidity,tax benefits and maturity
etc. of investment. To find out reason for choice of mutual fund as
an investment avenue. To savings form an important part of the
economy of any nationYoung investors have an edge over others on
account of their age.In other words, a young age investor has a big
ratio of disposable income. Now,India is seen as one of the best
and deepest of markets in the world. It has huge potential growth
rate in mutual fund and different financial instruments to provide
reasonable options for an ordinary man to invest his savings and
diversify the risk. This report will seek to cover all the
fundamental aspects relating to various investments assets classes
which are available for the investors in India. This report will
also tell us the customer perception about different investment
instrument which are available.
INTRODUCTIONAmutual fundis a type of professionally
managedinvestment fundthat pools money from many investors to
purchasesecurities.[1]While there is no legal definition of the
term "mutual fund", it is most commonly applied only to those
collective investment vehicles that are regulated and sold to the
general public. They are sometimes referred to as "investment
companies" or "registered investment companies".Hedge fundsare not
mutual funds, primarily because they cannot be sold to the general
public.In the United States, mutual funds must be registered with
theU.S. Securities and Exchange Commission, overseen by a board of
directors or board of trustees, and managed by aRegistered
Investment Advisor. Mutual funds are also subject to an extensive
and detailed regulatory regime set forth in theInvestment Company
Act of 1940. Mutual funds are not taxed on their income and profits
if they comply with certain requirements under the U.S.Internal
Revenue Code.Mutual funds have both advantages and disadvantages
compared to direct investing in individual securities. Today they
play an important role in household finances, most notably
inretirement planning.There are three types of U.S. mutual
fundsopen-end funds, unit investment trusts, and closed-end funds.
The most common type, open-end funds, must be willing to buy back
shares from investors every business day. Exchange-traded funds
(ETFs) are open-end funds or unit investment trusts that trade on
an exchange. Non-exchange traded open-end funds are most common,
but ETFs have been gaining in popularity.Mutual funds are generally
classified by their principal investments. The four main categories
of funds are money market funds, bond or fixed income funds, stock
or equity funds, and hybrid funds. Funds may also be categorized as
index (or passively managed) or actively managed.
Advantages and disadvantageMutual funds have advantages over
investing directly in individual securities: Increased
diversification: A fund normally holds many
securities;diversificationdecreases risk. Daily liquidity:
Shareholders of open-end funds and unit investment trusts may sell
their holdings back to the fund at the close of every trading day
at a price equal to the closing net asset value of the fund's
holdings. Professional investment management: Open-and closed-end
funds hire portfolio managers to supervise the fund's investments.
Ability to participate in investments that may be available only to
larger investors. For example, individual investors often find it
difficult to invest directly in foreign markets. Service and
convenience: Funds often provide services such as check writing.
Government oversight: Mutual funds are regulated by the SEC Ease of
comparison: All mutual funds are required to report the same
information to investors, which makes them easy to compare.
Mutual funds have disadvantages as well, which include: Fees
Less control over timing of recognition of gains Less predictable
income No opportunity to customize
2.1. INDUSTRY OVERVIEWA mutual fund is a professionally-managed
trust that pools the savings of many investors and invests them in
securities like stocks, bonds, short-term money market instruments
and commodities such as precious metals. Investors in a mutual fund
have a common financial goal and their money is invested in
different asset classes in accordance with the funds investment
objective. Investments in mutual funds entail comparatively small
amounts, giving retail investors the advantage of having finance
professionals control their money even if it is a few thousand
rupees.Mutual funds are pooled investment vehicles actively managed
either by professional fund managers or passively tracked by an
index or industry. The funds are generally well diversified to
offset potential losses. They offer an attractive way for savings
to be managed in a passive manner without paying high fees or
requiring constant attention from individual investors. Mutual
funds present an option for investors who lack the time or
knowledge to make traditional and complex investment decisions.
A mutual fund is set up in the form of a trust that has a
Sponsor, Trustees, Asset Management Company (AMC). The trust is
established by a sponsor(s) who is like a promoter of a company and
the said Trust is registered with Securities and Exchange Board of
India (SEBI) as a Mutual Fund. The Trustees of the mutual fund hold
its property for the benefit of unit holders. An Asset Management
Company (AMC) approved by SEBI manages the fund by making
investments in various types of securities.The trustees are vested
with the power of superintendence and direction over the AMC. They
monitor the performance and compliance of SEBI regulations by the
mutual fund. The trustees are vested with the general power of
superintendence and direction over AMC. They manage the performance
and compliance of SEBI Regulations by the mutual fund.
A mutual fund company collects money from several investors, and
invests it in various options like stocks, bonds, etc. This fund is
managed by professionals who understand the market well, and try to
accomplish growth by making strategic investments. Investors get
units of the mutual fund according to the amount they have
invested. The Asset Management Company is responsible for managing
the investments for the various schemes operated by the mutual
fund. It also undertakes activities such like advisory services,
financial consulting, customer services, accounting, marketing and
sales functions for the schemes of the mutual fund.
Based on the maturity periodOpen-ended FundAn open-ended fund is
a fund that is available for subscription and can be redeemed on a
continuous basis. It is available for subscription throughout the
year and investors can buy and sell units at NAV related prices.
These funds do not have a fixed maturity date. The key feature of
an open-ended fund is liquidity.
Close-ended FundA close-ended fund is a fund that has a defined
maturity period, e.g. 3-6 years. These funds are open for
subscription for a specified period at the time of initial launch.
These funds are listed on a recognized stock exchange.
Interval Funds Interval funds combine the features of open-ended
and close-ended funds. These funds may trade on stock exchanges and
are open for sale or redemption at predetermined intervals on the
prevailing NAV.
Based on investment objectivesEquity/Growth FundsEquity/Growth
funds invest a major part of its corpus in stocks and the
investment objective of these funds is long-term capital growth.
When you buy shares of an equity mutual fund, you effectively
become a part owner of each of the securities in your funds
portfolio. Equity funds invest minimum 65% of its corpus in equity
and equity related securities. These funds may invest in a wide
range of industries or focus on one or more industry sectors. These
types of funds are suitable for investors with a long-term outlook
and higher risk appetite.Debt/Income FundsDebt/ Income funds
generally invest in securities such as bonds, corporate debentures,
government securities (gilts) and money market instruments. These
funds invest minimum 65% of its corpus in fixed income securities.
By investing in debt instruments, these funds provide low risk and
stable income to investors with preservation of capital. These
funds tend to be less volatile than equity funds and produce
regular income. These funds are suitable for investors whose main
objective is safety of capital with moderate growth.Balanced
FundsBalanced funds invest in both equities and fixed income
instruments in line with the pre-determined investment objective of
the scheme. These funds provide both stability of returns and
capital appreciation to investors. These funds with equal
allocation to equities and fixed income securities are ideal for
investors looking for a combination of income and moderate growth.
They generally have an investment pattern of investing around 60%
in Equity and 40% in Debt instruments.Money Market/ Liquid
FundsMoney market/ Liquid funds invest in safer short-term
instruments such as Treasury Bills, Certificates of Deposit and
Commercial Paper for a period of less than 91 days. The aim of
Money Market /Liquid Funds is to provide easy liquidity,
preservation of capital and moderate income. These funds are ideal
for corporate and individual investors looking for moderate returns
on their surplus funds.Gilt FundsGilt funds invest exclusively in
government securities. Although these funds carry no credit risk,
they are associated with interest rate risk. These funds are safer
as they invest in government securities.Some of the common types of
mutual funds and what they typically invest in:
Type of FundTypical Investment
Equity or Growth FundEquities like stocks
Fixed Income FundFixed income securities like government and
corporate bonds
Money Market FundShort-term fixed income securities like
treasury bills
Balanced FundA mix of equities and fixed income securities
Sector-specific FundSectors like IT, Pharma, Auto etc.
Index FundEquities or Fixed income securities chosen to
replicate a specific Index for example S&P CNX Nifty
Fund of fundsOther mutual funds
Other SchemesTax-Saving (Equity linked Savings Schemes)
FundsTax-saving schemes offer tax rebates to investors under
specific provisions of the Income Tax Act, 1961. These are
growth-oriented schemes and invest primarily in equities. Like an
equity scheme, they largely suit investors having a higher risk
appetite and aim to generate capital appreciation over medium to
long term.
Index FundsIndex schemes replicate the performance of a
particular index such as the BSE Sensex or the S&P CNX Nifty.
The portfolio of these schemes consist of only those stocks that
represent the index and the weightage assigned to each stock is
aligned to the stocks weightage in the index. Hence, the returns
from these funds are more or less similar to those generated by the
Index.
Sector-specific FundsSector-specific funds invest in the
securities of only those sectors or industries as specified in the
Scheme Information Document. The returns in these funds are
dependent on the performance of the respective sector/industries
for example FMCG, Pharma, IT, etc. The funds enable investors to
diversify holdings among many companies within an industry. Sector
funds are riskier as their performance is dependent on particular
sectors although this also results in higher returns generated by
these funds.Benefits of investing in mutual funds:
Professional ManagementWhen you invest in a mutual fund, your
money is managed by finance professionals. Investors who do not
have the time or skill to manage their own portfolio can invest in
mutual funds. By investing in mutual funds, you can gain the
services of professional fund managers, which would otherwise be
costly for an individual investor.
DiversificationMutual funds provide the benefit of
diversification across different sectors and companies. Mutual
funds widen investments across various industries and asset
classes. Thus, by investing in a mutual fund, you can gain from the
benefits of diversification and asset allocation, without investing
a large amount of money that would be required to build an
individual portfolio.
LiquidityMutual funds are usually very liquid investments.
Unless they have a pre-specified lock-in period, your money is
available to you anytime you want subject to exit load, if any.
Normally funds take a couple of days for returning your money to
you. Since they are well integrated with the banking system, most
funds can transfer the money directly to your bank account.
FlexibilityInvestors can benefit from the convenience and
flexibility offered by mutual funds to invest in a wide range of
schemes. The option of systematic (at regular intervals) investment
and withdrawal is also offered to investors in most open-ended
schemes. Depending on ones inclinations and convenience one can
invest or withdraw funds.
Low transaction costDue to economies of scale, mutual funds pay
lower transaction costs. The benefits are passed on to mutual fund
investors, which may not be enjoyed by an individual who enters the
market directly.
TransparencyFunds provide investors with updated information
pertaining to the markets and schemes through factsheets, offer
documents, annual reports etc.
Well regulatedMutual funds in India are regulated and monitored
by the Securities and Exchange Board of India (SEBI), which
endeavors to protect the interests of investors. All funds are
registered with SEBI and complete transparency is enforced. Mutual
funds are required to provide investors with standard information
about their investments, in addition to other disclosures like
specific investments made by the scheme and the quantity of
investment in each asset class
Mutual funds invest in different securities like stocks or fixed
income securities, depending upon the funds objectives. As a
result, different schemes have different risks depending on the
underlying portfolio. The value of an investment may decline over a
period of time because of economic alterations or other events that
affect the overall market.Also, the government may come up with new
regulations, which may affect a particular industry or class of
industries. All these factors influence the performance of Mutual
Funds.
Risk and Reward:The diversification that mutual funds provide
can help ease risk by offsetting losses from some securities with
gains in other securities. On the other hand, this could limit the
upside potential that is provided by holding a single security.
Lack of Control:Investors cannot determine the exact composition
of a funds portfolio at any given time, nor can they directly
influence which securities the fund manager buys.
Performance of Mutual Funds in IndiaLet us start the discussion
of the performance of mutual funds in India from the day the
concept of mutual fund took birth in India. The year was 1963. Unit
Trust of India invited investors or rather to those who believed in
savings, to park their money in UTI Mutual Fund.For 30 years it
goaled without a single second player. Though the 1988 year saw
some new mutual fund companies, but UTI remained in a monopoly
position.The performance of mutual funds in India in the initial
phase was not even closer to satisfactory level. People rarely
understood, and of course investing was out of question. But yes,
some 24 million shareholders was accustomed with guaranteed high
returns by the begining of liberalization of the industry in 1992.
This good record of UTI became marketing tool for new entrants. The
expectations of investors touched the sky in profitability factor.
However, people were miles away from the praparedness of risks
factor after the liberalization.The Assets Under Management of UTI
was Rs. 67bn. by the end of 1987. Let me concentrate about the
performance of mutual funds in India through figures. From Rs.
67bn. the Assets Under Management rose to Rs. 470 bn. in March 1993
and the figure had a three times higher performance by April 2004.
It rose as high as Rs. 1,540bn.The net asset value (NAV) of mutual
funds in India declined when stock prices started falling in the
year 1992. Those days, the market regulations did not allow
portfolio shifts into alternative investments. There were rather no
choice apart from holding the cash or to further continue investing
in shares. One more thing to be noted, since only closed-end funds
were floated in the market, the investors disinvested by selling at
a loss in the secondary market.The performance of mutual funds in
India suffered qualitatively. The 1992 stock market scandal, the
losses by disinvestments and of course the lack of transparent
rules in the whereabout rocked confidence among the investors.
Partly owing to a relatively weak stock market performance, mutual
funds have not yet recovered, with funds trading at an average
discount of 1020 percent of their net asset value.The supervisory
authority adopted a set of measures to create a transparent and
competitve environment in mutual funds. Some of them were like
relaxing investment restrictions into the market, introduction of
open-ended funds, and paving the gateway for mutual funds to launch
pension schemes.The measure was taken to make mutual funds the key
instrument for long-term saving.
2.2 Company overviewUTI MUTUAL FUNDSUTI Mutual Fund is managed
by UTI Asset Management Company Private Limited (Estb: 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 Mutual Fund.The 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. 34500 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 70 UTI Financial Centers (UFCs) and
UTI International offices in London, Dubai and Bahrain. With a view
to reach to common investors at district level, 4 satellite offices
have also been opened in select towns and districts. It has a
well-qualified, professional fund management team, who have been
highly empowered to manage funds with greater efficiency and
accountability in the sole interest of unit holders. The fund
managers are also ably supported with a strong in-house equity
research department. To ensure better management of funds, a risk
management department is also in operation.
It has reset and upgraded transparency standards for the mutual
funds industry. All the branches, UFCs and registrar offices are
connected on a robust IT network to ensure cost-effective quick and
efficient service. All these have evolved UTI Mutual Fund to
position as a dynamic, responsive, restructured, efficient, and
transparent and SEBI compliant entityHISTORY OF UTI Mutual FundsThe
setting up of the Unit Trust of India (UTI) in 1963 heralded the
birth of the Indian mutual fund industry. In 1964, UTI mutual fund
launched its flagship scheme US-64 and went on to become a generic
term for the mutual fund sector till the government allowed public
sector banks to start mutual funds in 1987.Despite being the
trendsetter in the segment, the UTI mutual fund could not sustain
the initial tempo and was on the verge of a collapse in 2001,
before the government bailed it out and restructured the fund.
After the restructuring, the fund has somewhat redeemed its
credibility through professional management and a booming
market.The fund's sponsors are public sector financial giants like
Life Insurance Corporation, SBI, Bank of Baroda and Punjab National
Bank. The sponsors hold equal stakes in the asset management
company, UTI Asset Management Company Private Limited. UTI Mutual
Fund remains the largest fund in the country with assets of over
Rs.35,028 crore under management as of Aug 2006.In 2003, UTI was
divided into two parts, UTI Mutual Fund (UTI MF) and a specified
undertaking of UTI or UTI-I. UTI MF was brought under SEBI
regulations while UTI-I was kept under direct government control
since its schemes offered guaranteed returns.
UTI MUTUAL FUNDS SCHEMES
The Various Schemes Of Mutual Funds Provided By UTI Mutual
Funds
Liquid Funds Category
UTI - Money Market FundAn open-ended pure debt liquid plan,
seeking to provide highest possible current income, by investing in
a divesified portfolio of short-term money market securities.
UTI - Floating Rate FundTo generate regular income through
investment in a portfolio comprising substantially of floating rate
debt / money market instruments and fixed rate debt / money market
instruments.
UTI - Liquid Fund - Cash Plan-The scheme seeks to generate
steady & reasonable income with low risk & high level of
liquidity from a portfolio of money market securities & high
quality debt.Income Funds Category
UTI - G-Sec Fund-Investment Plan An open-end Gilt-Fund with the
objective to invest only in Central Government securities including
call money, treasury bills and repos of varying maturities with a
view to generate credit risk free return...
UTI - G-Sec Fund-Short Term Plan An open-end Gilt-Fund with the
objective to invest only in Central Government securities including
call money, overnment securities including call money, treasury
bills and repos of varying maturities with a view to generate
credit risk free return.
UTI - GILT Advantage Fund LTP-To generate credit risk-free
return through investments in sovereign securities issued by the
Central and / or a State Government. LTP.
UTI Children Career Plan-BondAn open ended debt oriented fund
with 100% investment in Debt/G-sec. Investment can be made in the
name of the children upto the age of 15 years...
UTI - Bond Advantage Fund LTP-It aims to generate attractive
returns consistent with capital preservation and liquidity.
UTI - Monthly Income Scheme-An open-ended debt oriented fund
investing a minimum of 90% in Debt and G-Sec and a maximum of 10%
in equity instruments. The fund aims to distribute income
periodically. Best suited to the investors.
UTI - Short Term Income Fund-The scheme seeks to generate steady
& reasonable income with low risk & high level of liquidity
from a portfolio of money market securities & high quality
debt.
UTI - MIS - Advantage Plan-To generate regular income through
investments in fixed income securities and capital appreciation /
dividend income through investment of a portion of net assets of
the scheme in equity and equity related instruments so as to
endeavor to make periodic income distribution to Unit holders.
UTI - Bond Fund-Open-end 100% pure debt fund, which invests in
rated corporate debt papers and government securities with
relatively low risk and easy liquidity.
UTI - Capital Protection Oriented Scheme-The scheme will invest
in a portfolio predominantly of fixed income securities that are
maturing in line with duration of the respective plans. Each Plan
will have a separate portfolio. The debt component of the portfolio
structure shall have the highest investment grade rating. The
equity components of the scheme will mainly focus on those
companies / stocks that have potential to appreciate in the medium
to long run.
Asset Allocation Funds Category
UTI - Variable Investment Scheme-The UTI- Variable Investment
Scheme is an open-ended scheme with dynamic allocation between
equity and debt classes.Index Funds Category
UTI - Master Index Fund-UTI MIF is an open-ended passive fund
with the primary investment objective to invest in securities of
companies comprising the BSE sensex in the same weightage as these
companies have in BSE sensex.
UTI - Index Select Fund-An open-ended equity fund with the
objective to invest in select stocks of the BSE Sensex and the S
& P CNX Nifty. The fund does not replicate any of the indices
but aims to attain performance better than the performance of the
indices.
UTI - Nifty Index Fund-UTI NIF is an open-ended passive fund
with the objective to invest in securities of companies comprising
of the S&P CNX Nifty in the same weightage as they have in
S&P CNX Nifty.
UTI Sunder-The objective of the scheme is to provide investment
returns that, before expenses, closely correspond to the
performance and yield of the basket of securities underlying the
S&P CNX NIFTY Index.
UTI - Gold Exchange Traded Fund-To endeavour to provide returns
that, before expenses, closely track the performance and yield of
Gold. However the performance of the scheme may differ from that of
the underlying asset due to tracking error.
Equity Funds Category
UTI - Equity Tax Saving Plan-An open-ended equity fund investing
a minimum of 80% in equity and equity related instruments. It aims
at enabling members to avail tax rebate under Section 88 of the IT
Act and provide them with the benefits of growth.
UTI MEPUS-The scheme primarily aims at securing for the
investors capital appreciation by investing the funds of the scheme
in equity shares of companies with good growth prospects
UTI - Mastreshare unit Scheme-An open-end equity fund aiming to
provide benefit of capital appreciation and income distribution
through investment in equity.
UTI - Master Plus Unit Scheme-An open-ended equity fund with an
objective of long-term capital appreciation through investments in
equities and equity related instruments, convertible debentures,
derivatives in India and also in overseas markets.
UTI - Mastergain Unit Scheme-Mastergain is open-ended equity
scheme with an objective of investing at least 80% of its funds in
equity and equity related instrument with medium to high risk
profile and upto 20% in debt and money market instruments with low
to medium risk profile.
UTI - Opportunities Fund-This scheme seeks to generate capital
appreciation and/or income distribution byinvesting the funds of
the scheme in equity shares and equity-related instruments.
UTI - Software Fund-An open-ended fund which invests exclusively
in the equities of the Software Sector companies. One of the growth
sectors funds aiming to invest in equity shares of companies
belonging to information technology sector to provide returns to
investors through capital growth as well as through regular income
distribution.
UTI - Pharma & Healthcare Fund-An open-ended fund which
exclusively invests in the equities of the Pharma & Healthcare
sector companies. This fund is one of the growth sector funds
aiming to invest in companies engaged in business of manufacturing
and marketing of bulk drug, formulations and healthcare products
and services.
UTI - Banking Sector Fund-An open-ended equity fund with the
objective to provide capital appreciation through investments in
the stocks of the companies/institutions engaged in the banking and
financial services activities.
UTI - Auto Sector Fund-An open-ended equity fund with the
objective to provide Capital appreciation through investments in
the stocks of the companies engaged in the automobile and
auto-ancillary industry.
UTI - Master Value Fund-An open-ended equity fund investing in
stocks which are currently under valued to their future earning
potential and carry medium risk profile to provide 'Capital
Appreciation'.
UTI - Master Growth-An open-ended equity fund for investment in
equity shares, convertible & non-convertible debentures and
other capital and money market instruments with a provision to
invest upto 50% of its corpus in PSUs equities and equity related
products. The fund aims to provide unit holders capital
appreciation & income distribution.
UTI - Mid Cap Fund-An open-ended equity fund with the objective
to provide 'Capital appreciation' by investing primarily in mid cap
stocks.
UTI - MNC Fund-An open-ended equity fund with the objective to
invest predominantly in the equity shares of multinational
companies in diverse sectors such as FMCG, Pharmaceutical,
Engineering etc.
UTI - Infrastructure Fund-An open-ended equity fund with the
objective to provide Capital appreciation through investing in the
stocks of the companies engaged in the sectors like Metals,
Building materials, oil and gas, power, chemicals, engineering etc.
The fund will invest in the stocks of the companies which form part
of Basic Industries.
UTI - Services Sector Fund-An open-ended fund which invests in
the equities of the Services Sector companies of the country. One
of the growth sector funds aiming to provide growth of capital over
a period of time as well as to make income distribution by
investing the funds in stocks of companies engaged in service
sector such as banking, finance, insurance, etc.
UTI - Leadership Equity Fund-This scheme seeks to generate
capital appreciation and/or income distribution by investing the
funds of the scheme in stocks that are "Leaders" in their
respective industries/sectors/sub-sector.
UTI - Dividend Yield Fund-UTI Dividend Yield Fund is an
open-ended equity orientedscheme, which endeavours to provide
medium to long termcapital gains and/or dividend distribution by
investing predominantly in equity and equity related instruments
thatoffer a high dividend yield.
UTI - SPrEAD Fund-UTI SPrEAD FUND a market-neutral equity fund
with the returns and safety of debt. A fund that takes advantage of
arbitrage opportunities between the spot and futures markets. The
fund where returns are not linked to the rise or fall of equity
markets.
UTI - Contra Fund-The fund aims to provide long-term capital
appreciation/dividend distribution through investments in listed
equities and equity-related instruments. The Fund's investment
policies are based on insights from behavioral finance.
UTI - Long-Term Advantage Fund-The investment objective of the
scheme is to provide medium to long term capital appreciation
alongwith income tax benefit.
UTI - Wealth Builder Fund-The objective of the scheme is to
achieve long term capital appreciation by investing predominantly
in a diversified portfolio of equity and equity related
instruments.
UTI - India Lifestyle Fund-The investment objective of the
scheme is to provide long term capital appreciation and/or income
distribution from a diversified portfolio of equity and equity
related instruments of companies that are expected to benefit from
changing Indian demographics, Indian lifestyles and rising
consumption pattern.Balanced Funds Category
UTI - Balanced Fund-An open-ended balance fund investing between
40% to 60% in equality related securities and the balance in debt
(fixed income securities) with a view to generate regular income
together with capital appreciation.
UTI - US 2002-An Open-ended balance fund. The scheme aims at
providing income distribution/ cumulation of income and capital
appreciation over a long term from a prudent portfolio mix of
equity and fixed income securities
UTI - Mahila Unit Scheme-An open-ended scheme with a minimum 70%
investment in Debt/G-Sec and a maximum 30% investment in equity.
The fund is designed to provide an enabler to adult female persons
in pooling their own savings and/ or gifts into an investment
vehicle so as to get periodic cash flow near to the time of any
chosen festival/ occasion or to allow income/ gains redeployed in
the scheme and repurchase units partially or fully as and when
desired.
UTI - Childrens Career Plan (Balanced)-An open-ended debt
oriented fund with investment in Debt/G-Sec of minimum 60% and a
maximum of 40% in Equity. Investment can be made in the name of the
children upto the age of 15 years so as to provide them, after they
attain the age of 18 years, a means to receive scholarship to meet
the cost of higher education and/or to help them in setting up a
profession, practice or business or enabling them to set up a home
or finance the cost of other social obligation.
UTI CRTS-This is an open-end income oriented scheme. The scheme
aims at catering to the investment needs of charitable, religious,
educational trusts and similar institutions to provide them an
investment vehicle to avail of tax exemption and also to have
regular income.
UTI ULIP-An open-ended balanced fund with an objective of
investing not more than 40% of the funds in equity and equity
related instruments and balance in debt and money market
instruments with low to medium risk profile. Investment by an
individual in the scheme is eligible for exemption under section 88
of the IT Act 1961. In addition the scheme also offers Life
Insurance and Accident Insurance cover.
UTI - Retirement Benefit Pension Fund-An open-ended balanced
fund with a maximum equity allocation of 40% and the balance in
debt. This ensures to provide pension to investors particularly
self-employed persons after they attain age of 58 years, in the
form of periodical cash flow upto the extent of repurchase value of
their holding through systematic withdrawal plan.
VISIONTo be the most preferred Mutual FundMISSIONTo make UTI
Mutual Fund: The most trusted brand that is admired by all
stakeholders The largest and most efficient wealth manager with
global presence The best-in-class customer service provider The
most preferred employer The most innovative and best wealth creator
A socially responsible organisation known for best corporate
governance
SWOT analysis
Mutual funds are among the financial products that benefit from
conducting a SWOT analysis. By reviewing their strengths,
weaknesses, opportunities and threats, an individual investor can
be better informed on where to invest their money, and be
positioned to shift gears along with the market.StrengthsThe most
critical strength for a mutual fund is its performance. If a fund
is outperforming the market, and particularly if it is at the top
of its benchmark, that is a big selling point. If the fund is part
of a well-established company with a track record of success and a
family of high-performing products, that brand name and historical
record may also be a strength. A best-in-class research department
or methodology that has a track record of picking winners is a huge
asset as well. Different financial metrics may be key depending on
your investment style and the fund involved: dividend yield may be
the key for one investor, total return over a 10-year period for
another.
WeaknessOne weakness to look at are your funds fees. A high
expense ratio is a weakness even if it pays for an active
management currently beating the market with its returns. Even in
good times, expenses are a drag on investor return, and they will
be more difficult to accept if the performance declines. Size can
be a weakness as well, since bigger isnt always better. As a
small-cap fund gets bigger, for example, it will have a hard time
finding growth opportunities for all of its assets and may have to
close or expand outside of its stated objective. Risk may be a
weakness for some investors looking for a smaller beta or standard
deviation.OpportunitiesIt's not enough to look at the current
numbers when evaluating prospective mutual funds. You also need to
look at the overall market and consider whether the fund is best
positioned to take advantage of trends. A lagging fund may offer
the best opportunity for growth if the combination of a management
change and economic trends prove beneficial. A change in the
government regulatory environment not only affects different
industries, but the funds that concentrate in those sectors as
well.ThreatsTo some extent, many funds move along with general
economic news. Some types of funds do better in a recession while
others track well in boom times -- those funds are particularly
threatened by a sudden change in the unemployment rate that
undermines consumer confidence or a stimulus plan that gets people
spending again. In addition, if a fund is dependent on a superstar
manager, make sure you have a plan in place if that manager
suddenly decides to leave.
3. PROJECT PROFILE3.1 OBJECTIVES OF THE STUDY 1. To study the
perception of customers towards various types of mutual funds.2. To
evaluate the awareness of customers towards various mutual funds.3.
To determine the expected return and risk involved in investing in
mutual funds.4. To understand the customers' investing power and
their interest in financial product
3.2 METHODOLOGY1) Research Design: Descriptive Research2) Sample
Design:a) Population: Unknownb) Population Frame: Various mutual
funds users.c) Method: Convenience Samplingd) Sample size: 2043)
Data Collection Design:a) Data Collection Method:1) Primary data:
Primary data are first-hand information collected through various
methods such as observation, interviewing, mailing etc. during the
project2) Secondary data: This is collected through book
periodical, bibliographies and annual reports. a) Data Collection
Instrument: For data collection instrument structured questionnaire
was used. They consist of open ended questions and close ended
question.b) Statistical Tools used: Simple Percentage analysis4.
OBSERVATIONS & ANALYSIS
FINDINGS About 46% of respondents are interested in bank mutual
fund and 69% respondents are aware of different tax benefit of
investing in mutual fund. About 54% of respondents agreed the
importance of investing in mutual fund and 33% respondents are
aware of the category of their investment they make. About 63% of
respondents are provided with vital source of information for
investing in mutual fund and 88% of respondents agreed that mutual
fund can provide a high return to them. About 76% of respondent are
aware of the level of risk they take and 73% of respondents are
aware of their expected return. About 51% of respondents are aware
of duration of investment they make. About 90% of respondents are
satisfied with our company investment and 64% respondents are
making lump sum amount of investment. About 44% of respondents are
earning dividend returns they expected and 62% of respondents are
of good opinion of mutual fund. About 42% of respondents have high
preference for investment and 64% respondents are satisfied in
mutual fund investment. About 80% of respondents are presently
satisfied with their life from a financial point of view.
Recommendations
Various respondents were not aware of the mutual fund products
and the type of mutual fund schemes and the risk associated with
mutual fund products. So Mutual fund companies should provide
complete information of various products to their investors.
Customers i.e., investors fees should be reduced thereby increasing
the number of investors towards investment. The mutual fund
companies to increase their market size by way of opening more
distribution centers at the various urban and semi-urban markets.
If the company improves the categories of investment then customer
will show the interest to invest more.
ConclusionMutual fund companies help investors by providing them
with a qualified fund manager. Increasingly, in India, fund
managers are acquiring global certifications like CFA and MBA which
help them be at the cutting edge of the knowledge in the investing
world. Since mutual fund company collect money from millions of
investors, they achieve economies of scale. The cost of running a
mutual fund is divided between a larger pool of money and hence
mutual funds are able to offer the investor a lower cost
alternative of managing their funds. In India mutual funds are
regulated by the Securities and Exchange Board of India, which
helps to provide comfort to the investors. SEBI forces transparency
on the mutual funds, which helps the investor make an informed
choice. SEBI requires the mutual funds to disclose their portfolios
at least six monthly, which helps the investors keep track whether
the fund is investing in line with its objectives or not.
Learning OutcomesThe time spent at the research of UTI mutual
fund was quite interesting. In my point of view, to understand what
mutual fund is and what are aspects of it is not that easy. There
are always market risk associated to it. And as per a marketer of
any organization one must know what he is selling or promoting.
However, its always not important that you should know about your
product only sometimes one must understand the customer as well. As
my objective of the study is to understand the customers
understanding over mutual fund and its awareness. I was well
trained by UTI and I feel by the knowledge I have possessed I can
decide and let other decide over wise investment for their bright
future. This was an achievement during my training as an industrial
trainee.
Appendix
QUESTIONNAIRE
1. Is your age a) Below 30 years b) 31-40 years c) 41-50 yearsc)
Over 51 years
2. Gender a) Male b) Female
3. Annual Household Income a) Less than 1.5 lakhsb) Between 1.5
to 3 lakhs c) Between 3 to 5 lakhsd) Above 5 lakhs
4. Education Qualificationa) Below Graduateb) Graduatec) PGd)
Professional5. Customers interest towards the type of Mutual
Fundsa) UTIb) Reliancec) SBId) ICICIe) Others
6. Benefits from Mutual Fundsa) Yesb) No
7. Purpose of Investmenta) Returnb) Safetyc) Principald)
Diversification
8. Category of Investmenta) Fixed depositb) Propertyc)
Insuranced) Shares
9. Level of Riska) Min riskb) Moderate riskc) High risk
10. Expected Returna) Less than 10%b) Between 10% to 30%c) Above
30%
11. Satisfaction in Mutual Fund Investmenta) Very Goodb) Goodc)
Neutrald) Poore) Very Poor
References www.utimf.com www.wikipedia.com www.google.com Dr.
Vidisha Vyas21