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ON
EVALUATE DIFFERENT MUTUAL FUND SCHEME
FOR HNIS
TABLE OF CONTENTS
Cover page
Title page
Authorization
Acknowledgements
1. Company Profile
2. Introduction to Mutual Funds
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2.1 Benefits
3.Analysis
4.Conclusion
5. Reference
6. Apendix
CHAPTER 2: RELIANCE MUTUAL FUND
2.1 The Sponsors: Reliance Capital Limited
Reliance Capital Asset Management Ltd. is a wholly owned subsidiary of Reliance
Capital Limited, the sponsor. The entire paid-up capital (100%) of Reliance Capital
Asset Management Ltd is held by Reliance Capital Ltd.
Reliance Mutual Fund (RMF) has been sponsored by Reliance Capital Ltd (RCL).
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Reliance Capital is Indias fastest growing private sector financial services company.
Ranking among the top 3 private sector banking and finance companies in India,
with a shareholder base of over 1.3 million. Reliance Capital has interests in asset
management and mutual funds, life and general insurance, private equity and
proprietary investments, stock broking and other financial services with a net worth
in excess of Rs. 5,262 crore (as of March 31, 2007)
Particulars
(Rs.in
crores)crores)
2005-06 2004-05 2003-04 2002-03
Total Income 652.02 295.69 356.79 458.78
Profit Before Tax 550.61 111.21 105.79 102.63
Profit After Tax 537.61 105.81 105.79 102.63
Reserves & Surplus 3849.58 1310.08 1271.84 1208.5
Net Worth 4122.46 1437.92 1399.81 1336.33
Earnings per Share
(Rs.)
29.74
(Basic +
Diluted)
8.31
(Basic +
Diluted)
8.31
(Basic +
Diluted)
8.06
(Basic +
Diluted)
Book Value per
Share (Rs.)
112.95 112.95 109.96 104.54
Dividend (%) 30% 30% 29% 29%
Paid up Equity
Capital
223.40 127.84 127.84 127.83
Reliance Capital Ltd. has contributed Rupees One Lac as the initial contribution to
the corpus for the setting up of the Mutual Fund. Reliance Capital Ltd. is responsible
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for discharging its functions and responsibilities towards the Fund in accordance
with the Securities and Exchange Board of India (SEBI) Regulations.
The Sponsor is not responsible or liable for any loss resulting from the operation of
the Scheme beyond the contribution of an amount of Rupees one Lac made by
them towards the initial corpus for setting up the Fund and such other accretions
and additions to the corpus.
2.2 Reliance Capital Asset Management Limited
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.
Reliance Capital Asset Management Limited was approved as the Asset Management Company
for the Mutual Fund by SEBI vide their letter no IIMARP/1264/95 dated June 30, 1995.
The Mutual Fund has entered into an Investment Management Agreement (IMA) with RCAM
dated May 12, 1995 and was amended on August 12, 1997 in line with SEBI (Mutual Funds)
Regulations, 1996. Pursuant to this IMA, RCAM is authorized to act as Investment Manager of
Reliance Mutual Fund.
The networth of the Asset Management Company including preference shares as on March 31,
2005 is Rs.30.13 crores.
2.3 Reliance Mutual Fund
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Reliance Mutual Fund (RMF) is one of Indias leading Mutual Funds, with Assets
Under Management (AUM) of Rs. 48,828 crore (AUM as on 30th Apr 2007) and an
investor base of over 3.1 million.
Reliance Mutual Fund, a part of the Reliance - Anil Dhirubhai Ambani Group, is one
of the fastest growing mutual funds in the country. RMF offers investors a well-
rounded portfolio of products to meet varying investor requirements and has
presence in 115 cities across the country.
Reliance Mutual Fund constantly endeavors to launch innovative products and
customer service initiatives to increase value to investors.
Reliance Mutual Fund schemes are managed by Reliance Capital Asset Management
Ltd., a wholly owned subsidiary of Reliance Capital Ltd.
Reliance Capital Ltd. is one of Indias leading and fastest growing private sector
financial services companies, and ranks among the top 3 private sector financial
services and banking companies, in terms of net worth.
Reliance Capital Ltd. has interests in asset management, life and general insurance,
private equity and proprietary investments, stock broking and other financial
services.
Sponsor: Reliance Capital Limited.
Asset Management Company: Reliance Capital Asset Management Ltd.
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Trustee: Reliance Capital Trustee Co. Limited.
Transfer Agent/Registrar: Reliance Computer Share Private Limited.
Custodian: Deutsche Bank AG
Auditors: Haribhakti & Co. (statutory auditors),
Price Waterhouse Coopers (internal auditors),
C.C.Chokshi & Co. (auditors to AMC),
M/s. Malpani & Associates (auditors to trustee)
Investment Manager: Reliance Capital Asset Management
Limited. The Sponsor, the Trustee and the
Investment Manager are incorporated under
the Companies Act 1956.
Vision
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Reliance Capital Asset Management Ltd. has a vision of being a leading player in the
Mutual Fund business and has achieved significant success and visibility in the
market.
However, an imperative part of growth and visibility is adherence to Good Conduct
in the marketplace. At Reliance Capital Asset Management Ltd., the implementation
and observance of ethical processes and policies has helped us in standing up to
the scrutiny of our domestic and international investors.
Management
The management at Reliance Capital Asset Management Ltd. Is committed to good
Corporate Governance, which includes transparency and timely dissemination of
information to its investors and unit holders. The Reliance Capital Asset
Management Limited Board is a professional body, including well-experienced and
knowledgeable Independent Directors. Regular Audit Committee meetings are
conducted to review the operations and performance of the company.
Reliance Capital Ltd. has contributed Rupees One Lac as the initial contribution to
the corpus for the setting up of the Mutual Fund. Reliance Capital Ltd. is responsible
for discharging its functions and responsibilities towards the Fund in accordance
with the Securities and Exchange Board of India (SEBI) Regulations.
The Sponsor is not responsible or liable for any loss resulting from the operation of
the Scheme beyond the contribution of an amount of Rupees one Lac made by
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them towards the initial corpus for setting up the Fund and such other accretions
and additions to the corpus.
2.3(1) Trustees
The trustees of Reliance Mutual Fund are:
Reliance Capital Trustee Co. Limited (RCTCL)
2.3(2) The Custodian
Deutsche Bank, AG .The Trustee has appointed Deutsche Bank, AG located at
Kodak House, Ground Floor, 222 Dr. D.N.Road, Mumbai-400 001, as the Custodian
of the securities that are bought and sold under the Scheme. A Custody Agreement
has been entered with Deutsche Bank in accordance with SEBI Regulations. The
Custodian is approved by SEBI under registration no. IN/CUS/003 to act as
Custodian for the Fund.
Deutsche Bank AG, the Custodian shall, inter alia:
Provide post-trading and custodial services to the Mutual Fund.
Keep Securities and other instruments belonging to the Scheme in safe
custody.
Ensure smooth inflow/outflow of securities and such other instruments as and
when necessary, in the best interests of the unit holders.
Ensure that the benefits due to the holdings of the Mutual Fund are recovered
and
Be responsible for loss of or damage to the securities due to negligence on its
part on the part of its approved agents.
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2.3(3) The Registrar
Reliance Capital Asset Management Limited has appointed M/s. Reliance
Computershare Pvt. Limited to act as the Registrar and Transfer Agent to the
Schemes of Reliance Mutual Fund. M/s. Reliance Computershare Pvt. Limited (KCL)having their office at No.21, Avenue 4, Street No.1, Adjacent to Rainbow Hospital,
Banjara Hills, Hyderabad - 500 034, is a Registrar and Transfer Agent registered
with SEBI under registration no. INR000000221.
Reliance Capital Asset Management Ltd. and the Trustee have satisfied themselves,
after undertaking appropriate due diligence measures, that they can provide the
services required and have adequate facilities, including systems facilities and back
up, to do so. The Trustee has also laid down broad parameters for supervision of the
Registrar. As Registrar to the Schemes, KCL will accept and process investor'sapplications, handle communications with investors, perform data entry services,
dispatch Account Statements and also perform such other functions as agreed, on
an ongoing basis.
The Registrar is responsible for carrying out diligently the functions of a Registrar
and Transfer Agent and will be paid fees as set out in the agreement entered into
with it and as per any modification made thereof from time to time.
2.4 Management Team
Board of Directors
Amitabh Chaturvedi
Kanu Doshi
Manu Chadha
Sushil Tripathi
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Management Team
President
Vikrant Gugnani
Chief Investment Officer
K.Rajagopal
Head Equity Investments
Madhusudan Kela
Equity Fund Managers
Equity Fund Manager Sunil B. Singhania
Equity Fund Manager Ashwani Kumar
Equity Fund Manager Shailesh Raj Bhan
Debt Fund Managers
Head Fixed Income Amitabh Mohanty
Debt Fund Manager Amit Tripathi
Debt Fund Manager Prashant Pimple
Head Of Departments
Brand and Communication Abraham Alapatt
Finance and Accounts Amit Bapna
Human Resource Development Rajesh Derhgawen
Information Technology Vinay Nigudkar
Legal & Compliance Balkrishna Kini
Risk Management Lav Chaturvedi
Operations & Settlement Geeta Chandran
Infrastructure & Administration Pradeep Andrade
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R&T operations Prashanth D Pereira
Sales and Distribution Sundeep Sikka
Zonal Heads
Northern Zone Head Aashwin Dugal
Western Zone Head Devendra Daga
Southern Zone Head Gurbir Chopra
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2.5 Different Schemes Offered By Reliance Mutual Fund
Debt Schemes
Reliance Income Fund
The primary objective of the scheme is to generate optimal returns consistent
with moderate levels of risk. This income may be complemented by capital
appreciation of the portfolio. Accordingly, investments shall predominantly be made
in Debt & Money market instruments. The benchmark for the scheme is Crisil
Composite Bond Fund Index.
FUND PERFORMANCE
Period % change in NAV % change in Index
1 Year 5.27 3.68
3 Years 4.36 2.83
5 Years 6.76 5.40
Since Inception 9.48 NA
Reliance Monthly Income Plan
The primary investment objective of the scheme is to generate regular
income in order to make regular dividend payments to unitholders and the
secondary objective is growth of capital. The benchmark for the scheme is Crisil MIP
Blended Index.
FUND PERFORMANCE
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Period % change in NAV % change in Index
1 Year 6.46 8.88
3 Years 10.74 8.19
Since Inception 9.51 6.38
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Reliance Medium Term Fund
The primary investment objective of the scheme is to generate regular
income in order ro make regular dividend payments to unitholders and the
secondary objective is growth of capital. The benchmark for the scheme is Crisil
Short Term Bond Fund Index.
FUND PERFORMANCE
Period % change in NAV % change in Index
1 Year 6.21 6.10
3 Years 3.73 4.675 Years 5.22 5.36
Since Inception 7.05 NA
Reliance Liquid Fund (Treasury Plan)
The primary investment objectiveof the scheme is to generate optimal
returns consistent with moderate levels of risk and high liquidity. Accordingly,
investments shall predominantly be made in Debt and Money market instruments.
The benchmark for the scheme is Crisil Liquid Fund Index.
FUND PERFORMANCE
Period % change in NAV % change in Index
1 Year 7.15 7.18
3 Years 5.66 5.58
5 Years 5.71 5.32
Since Inception 6.78 NA
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Reliance Liquid Fund (Cash Plan)
The primary investment objectiveof the scheme is to generate optimal
returns consistent with moderate levels of risk and high liquidity. Accordingly,
investments shall predominantly be made in Debt and Money market instruments.
The benchmark for the scheme is Crisil Liquid Fund Index.
FUND PERFORMANCE
Period % change in NAV % change in Index
1 Year 6.94 7.18
3 Years 5.49 5.58
5 Years 5.19 5.32
Since Inception 5.29 NA
Reliance Short Term Fund
The primary objective of the scheme is to generate stable returns for
investors with a short term investment horizon by investing in fixed income
securities of a short term maturity. The benchmark for the scheme is Crisil Liquid
Fund Index.
FUND PERFORMANCE
Period % change in NAV % change in Index
1 Year 8.01 7.18
3 Years 6.41 5.58
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Since Inception 6.55 5.20
Reliance Gilt Securities Fund (Short Term Plan)
The primary objective of the scheme is to generate optimal credit risk-free
returns by investing in a portfolio of securities issued and guaranteed by the Central
Government and State Government. The benchmark for the scheme is I - Sec Si -
Bex.
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FUND PERFORMANCE
Period % change in NAV % change in Index
1 Year 4.31 6.84
3 Years 3.19 5.17
Since Inception 3.92 5.39
Reliance Gilt Securities Fund (Long Term Plan)
The primary objective of the scheme is to generate optimal credit risk-free
returns by investing in a portfolio of securities issued and guaranteed by the Central
Government and State Government. The benchmark for the scheme is I - Sec Li -
Bex.
FUND PERFORMANCE
Period % change in NAV % change in Index
1 Year 6.64 6.64
3 Years 5.54 3.13
Since Inception 6.73 4.31
Reliance Floating Rate Fund
The primary objective of the scheme is to generate regular income through
investments in a portfolio comprising substantially of Floating Rate Debt Securities (
including floating rate securitized debt and Money market instruments and Fixed
Rate debt instruments swapped for floating rate returns.) The scheme shall also
invest in Fixed rate debt securities (including fixed rate securitized debt, money
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market instruments and floating rate debt instruments swapped for fixed returns).
The benchmark for the scheme is Crisil Liquid Fund Index.
FUND PERFORMANCE
Period % change in NAV % change in Index
1 Year 6.11 5.52
Since Inception 5.70 5.01
Reliance NRI Income Fund
The primary investment objective of the scheme is to generate optimal
returns consistent with moderate levels of risks. This income may be complimented
by capital appreciation of the portfolio. Accordingly, investments shall
predominantly be made in debt instruments. The benchmark for the scheme is Cirsil
Composite Bond Fund Index.
FUND PERFORMANCE
Period % change in NAV % change in Index
1 Year 7.15 3.68
Since Inception 5.47 4.51
Reliance Regular Savings Fund (Debt Option)
The primary investment objective of this option is to generate optimal returns
consistent with moderate level of risk. This income may be complemented by the
capital appreciation of the portfolio. Accordingly investments shall predominantly be
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made in debt and money market instruments. The benchmark for the scheme is
Crisil Composite Bond Fund Index.
FUND PERFORMANCE
Period % change in NAV % change in Index
1 Year 3.22 3.68
Since Inception 3.14 3.50
Reliance Regular Savings Fund (Equity Option)
The primary investment objective of this option is to seek capital appreciation
and / or to generate consistent returns by actively investing in equity / equity
related instruments. The benchmark for the scheme is BSE 100 Index.
FUND PERFORMANCE
Period % change in NAV % change in Index
1 Year 40.90 38.69
Since Inception 29.86 43.27
Reliance Regular Savings Fund (Hybrid Option)
The primary investment objective of this option is to generate consistent
return by investing a major portion in debt and money market securities and a small
portion in equity and equity related instruments. The benchmark for the scheme is
Crisil MIP Blended Index.
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FUND PERFORMANCE
Period % change in NAV % change in Index
1 Year 14.40 9.14
Since Inception 9.57 10.20
Reliance Liquidity Fund
The primary investment objective of the scheme is to generate optimal
returns consistent with moderate levels of risks. Accordingly, investments shall
predominantly be made in debt instruments.
The benchmark for the scheme is Crisil Liquid Fund Index. The fund has given
a weighted average return of 4.57% since inception date 16/06/2005.
FUND PERFORMANCE
Period % change in NAV % change in Index
1 Year 7.96 7.18
Since Inception 6.98 6.27
Reliance Liquid Plus Fund
The investment objective of the scheme is to generate optimal returns
consistent with moderate levels of risk and liquidity by investing in debt securities
and money market securities. The benchmark for the scheme is Crisil Liquid Fund
Index.
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FUND PERFORMANCE
Period % change in NAV % change in Index
Since Inception 2.01 2.24
EQUITY FUNDS
Reliance Growth Fund
The primary investment objective of the scheme is to achieve long term
growth of capital by investing in equity and equity related securities through a
research based investment approach. The benchmark for the scheme is BSE 100
Index.
FUND PERFORMANCE
Period % change in NAV % change in Index
1 Year 33.48 38.69
3 Years 62.23 43.54
5 Years 61.33 36.12
Since Inception 33.68 13.90
Reliance Vision Fund
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The primary investment objective of the scheme is to achieve long term
growth of capital by investing in equity and equity related securities through a
research based investment approach. The benchmark for the scheme is BSE 100
Index.
FUND PERFORMANCE
Period % change in NAV % change in Index
1 Year 41.01 38.69
3 Years 54.30 43,54
5 Years 55.49 36.12
Since Inception 29.32 13.90
Reliance NRI Equity Fund
The primary investment objective of the scheme is to generate optimal
returns by investing in equity or equity related instruments primarily drawn from
companies in the BSE 200 Index. The benchmark for the scheme is BSE 200 Index.
FUND PERFORMANCE
Period % change in NAV % change in Index
1 Year 46.49 36.92
Since Inception 44.88 37.71
Reliance Equity Opportunities Fund
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The primary investment objective of the scheme is to seek to generate
capital appreciation and provide long term growth opportunities by investing in a
portfolio constituted of equity and equity related securities and the secondary
objective is to generate consistent returns by investing in debt and money market
securities. The benchmark for the scheme is BSE 100 Index.
FUND PERFORMANCE
Period % change in NAV % change in Index
1 Year 33.81 38.69
Since Inception 46.52 42.21
Reliance Index Fund (Nifty Plan)
The objective of this plan is to replicate the composition of the Nifty with a
view to endeavor to generate returns which could approximately be the same as
that of the Nifty. The benchmark of the scheme is S & P CNX Nifty Index.
FUND PERFORMANCE
Period % change in NAV % change in Index
1 Year 26.00 39.88
Since Inception 25.44 37.66
Reliance Index Fund (Sensex Plan)
The objective of this plan is to replicate the composition of the Sensex with a
view to endeavor to generate returns which could approximately be the same as
that of the Sensex. The benchmark of the scheme is BSE Sensex.
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FUND PERFORMANCE
Period % change in NAV % change in Index
1 Year 34.84 39.87
Since Inception 39.14 41.36
Reliance Tax Saver Fund (ELSS)
The primary objective of the scheme is to generate long term capital
appreciation from a portfolio that is invested predominantly in equity and equity
related instruments. The benchmark for the scheme is BSE 100 Index.
FUND PERFORMANCE
Period % change in NAV % change in Index
1 Year 23.37 38.69
Since Inception 26.17 37.73
Reliance Equity Fund
The primary objective of the scheme is to generate capital appreciation and
provide long term growth opportunities by investing in a portfolio constituted of
equity and equity related securities of top 100 companies by market capitalization
and of companies which are available in the derivatives segment from time to time
and the secondary objective is to generate consistent returns by investing in debt
and money market securities. The benchmark for the scheme is S & P CNX Nifty.
FUND PERFORMANCE
Period % change in NAV % change in Index
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1 Year 30.21 39.88
Since Inception 18.42 21.55
Reliance Long Term Equity Fund
The primary investment objective of the scheme is to seek to generate long
term capital appreciation and provide long term growth opportunities by investing
in a portfolio constituted of equity and equity related securities and derivatives and
the secondary objective is to generate consistent returns by investing in debt and
money market securities. The benchmark for the scheme is BSE 200 Index.
SECTORAL FUNDS
Reliance Banking Fund
The primary investment objective of the scheme is to seek to generate
continuous returns by actively investing in equity and equity related instruments or
fixed income securities of banks. The benchmark for the scheme is S & P CNX Banks
Index.
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FUND PERFORMANCE
Period % change in NAV % change in Index
1 Year 47.05 55.27
3 Years 35.95 40.94
Since Inception 43.80 41.75
Reliance Diversified Power Sector Funds
The primary investment objective of the scheme is to seek to generate
continuous returns by actively investing in equity and equity related instruments or
fixed income securities of power and other associated companies. The benchmark
for the scheme is India Power Index.
FUND PERFORMANCE
Period % change in NAV % change in Index
1 Year 56.42 43.43
3 Years 63.28 49.43
Since Inception 58.72 32.99
Reliance Pharma Fund
The primary investment objective of the scheme is to seek to generate
continuous returns by actively investing in equity and equity related instruments or
fixed income securities of pharma and associated companies. The benchmark for
the scheme is BSE Health Care Index.
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FUND PERFORMANCE
Period % change in NAV % change in Index
1 Year 35.20 13.40
Since Inception 33.84 19.78
RELIANCE INFRASTRUCTURE FUND:-.The new fund offers two plans
Retail and Institutional. The minimum investment in the fund would be Rs.
5,000 and in multiples of Re. 1 thereafter for the Retail Plan and Rs. 5
crore and in multiples of Re 1 thereafter for the Institutional Plan.
Reliance Infrastructure Fund will invest at least 65 per cent of its assets in
engineering, cement and power stocks as well as banks, whereas the
balance will be invested in debt and money markets.
Here is a list of sectors that the fund may invest in (from their
prospectus): At first glance it may occur to you that the Reliance mutual
fund will invest most of its assets in Airport, then Banks, then Cement and
so on (which is what I felt), but this is not true. This is just a list of
indicative sectors and is not in any particular order.
Airports
Banks, Financial Institutions and Term Lending institutions.
Cement
Coal
Construction
Electrical and Electric Component
Engineering
Energy
Industry Capital Goods
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Metals and Minerals
Ports
Power and Power equipment
Road and Railways
Telecom
Transportation
Urban Infrastructure
Mining
Aluminum
Reliance Infrastructure Fund Manager
Why to Consider Infrastructure Mutual Fund Now?
Stable and stronger government - easy policy making
o The earlier coalition government had limited scope to thrust
infrastructure related reforms given its constitution. However stability of
the new government should ease policy making.
Sharp government focus on infrastructure - better implementation
o The government has indicated that infrastructure is a crucial growth
area and hence one can expect better project implementation than what
was witnessed in the past. The UPA in its manifesto seeks to increase
public investment into infrastructure and plans to increase power capacity
by 12,000 - 15,000 MW per year.
Key to reviving domestic growth
o The government has recognized that infrastructure spend might aid the
economy to ride overthe ongoing slowdown while even insulating the
economy from the adverse impact of the financial meltdown.
Entry Load of Reliance Infrastructure Mutual Fund
Subscription below Rs. 2 Crores: 2.25%
Between Rs. 2 and 5 Crores: 1.25%
Above Rs. 5 Crores: Nil
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Exit Load of Reliance Infrastructure Mutual Fund
1% if redeemed within a year of allotment
Nil if redeemed after a year of allotment
Nil if subscription is more than Rs. 5 crores
Minimum Application Amount for Retail Investors
The minimum investment needed is Rs.5000 and if you want to invest
additional money then you must invest a minimum of Rs.1000.
Plans offered by Reliance Infrastructure Mutual Fund
There are two types of plans in this fund:
Growth Plan and Dividend Plan
The growth plan is meant for people who are not looking for regular
dividend payouts from the mutual fund and the income from their funds
will be reinvested in the fund. The Dividend plan on the other hand will
give you dividend income (when the fund declares dividends). There is a
dividend reinvestment plan also where the fund will reinvest your
dividends to buy more units of the mutual fund.
Tax Rates
The dividends are tax free in the hands of resident Indian investors.
Similarly, there is no tax on long term capital gains. There is a 15% tax on
short term capital gains of the scheme
Following the result of the 2009 general elections the stock market has
gone up substantially in India. Over the last three months the Sensex has
jumped by 80%. Despite this rally there are many opportunities that
remain in the stock market. Billions of dollars have been poured into the
Indian markets by foreign institutional investors over the last few weeks.
Not surprisingly the dollar has dipped to around 47 rupees after hitting a
high of 52+ earlier this year. Indications are that there is a lot of money
waiting to be invested in Indian stocks. The recent run-up is very difficult
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for many hedge funds, foreign investors and mutual funds to buy stocks at
reasonable price. Many mutual funds like Morgan Stanley and investment
stalwarts like Mark Mobius have talked of very high targets for the Sensex
over the next year or two. The targets spoken about by significantly from
19,500 to as high as 25,000. In this scenario mutual fund houses like
reliance mutual fund are better equipped as compared to the retail
investor to make money from investing in stocks.
Until March this year most mutual funds had reported a poor performance.
Since then there have been increasing gains in the NAVs of most major
mutual funds. From the signs of it, then next year to two years will
continue to see a lot of money flowing in the Indian stock markets. So far
only between 5 to 10% of the investment in the dust. Infrastructure
remains a key sector for investment.
Reliance infrastructure fund comes at an opportune time as the NFO will
close barely a week before the Indian budget is announced. Indications
are that reliance will mop up anywhere between 4000 and 6000 crores
with this NFO. Most of the earliest mutual fund schemes of reliance have
outperformed many other mutual fund schemes. Reliance mutual fund
manages a corpus of 100,000 crores across all its mutual fund schemes.
While many investors invest in new fund offers because they are priced at
10 rupees instead of a higher NAV, there are several other more rational
reasons reliance infrastructure fund may be a good pick. For one the
infrastructure boom story is far from over. A lot of new money is expected
to come in over the next one year from FIIs, mutual funds, financial
institutions and even local HNIs who haven't been able to push in all their
money yet. Given their track record, financial clout and management,
reliance mutual fund is well-equipped to manage your money.
While the last month has seen the stock market go up substantially, it
cannot go up all the time and occasionally hiccups can be expected. If you
would like to ride the infrastructure boom and are willing to be patient
with your investments, the reliance infrastructure fund may be a good
option to consider.
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Reliance Media and Entertainment Fund
The primary investment objective of the scheme is to seek to generate
continuous returns by actively investing in equity and equity related instruments or
fixed income securities of media and entertainment and other associated
companies. The benchmark for the scheme is S & P CNX Media and Entertainment
Index.
FUND PERFORMANCE
Period % change in NAV % change in Index
1 Year 57.95 83.65
Since Inception 49.90 46.21
2.6 Reliance Mutual Fund: An Overview
Reliance Mutual Fund has been awarded as Indias Most Trusted Mutual Fund
Brand by Economic Times Brand Equity survey by AC Nielsen ORG-MARG
2005
Reliance Mutual Fund is the of the Largest Private Sector AMC in the country
First Mutual Fund in the World to launch Online Redemption through ATMs/
PoS
o Investors can redeem their Mutual Fund Units using any VISA ATM/ PoS
across the Globe on 24 X 7 bases.
Healthy Debt Equity mix of 50:50 with largest Equity Fund corpus in the
Industry as on September 06
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Reliance Equity Fund NFO had created history for having the highest
collection ever among domestic mutual funds, by raising a record Rs
5723.26 crores & 9.24 lakh applications- Surpassed UTIs 14-year-old record
Some of our Funds have been awarded both by International as well as
Domestic Rating Agencies in terms of their Performance and Consistency
Current Competitive Analysis
Amt. in Rs. Crs
Industry Players AUM as
on Mar
05
AUM as
on
Mar06
AUM as
on
Jan07
Growth
(Mar 05-
Mar 06)
YTD
Annualise
d Growth
Reliance 9,543 24,669 39,020 159% 70%
UTI 20,740 29,519 37,535 55% 33%
Pru ICICI 15,201 23,502 34,746 42% 57%
HDFC 15,010 21,550 31,425 44% 55%
Franklin
Templeton
15,354 17,827 23,907 16% 41%
Birla 10,373 15,018 21,190 45% 49%
Industry 1,49,6002,31,715 3,39,66355% 56%
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0
5000
10000
15000
20000
25000
30000
35000
40000
Mar-06 Jun-06 Sep-06 Dec-06
0
50000
100000
150000
200000
250000
300000
350000
400000
Reliance Mutual Fund Indus try
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Current Competitive Analysis
RMF Vs Industry QOQ Growth
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
Q1 Q2 Q3Industry RMF
Asset Class Wise - QOQ Growth
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0
5000
10000
15000
20000
25000
Mar 06 Jun-06 Sep-06 Dec-06Equity Debt
Current Investor Base
0
100
200
300
400
500
600
700
Debt Liquid** Equity
* The base period is Mar 05 which is taken as 100
Mar 05*
Mar 06
Jan 07
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Asset
Class
# of Folios
as on Mar
05
# of Folios
as on Mar
06
%
Growth
# of Folios
as on Jan
07
YTD %
Growth
Debt 30,205 34,138 13% 54,519 59.7%
Liquid*
*
5,616 12,547 123% 12,841 2.3%
Equity 4,40,768 20,50,369 365% 30,08,254 46.7%
Total 4,76,840 20,96,952 340% 30,75,614 46.6%
**Liquid category Includes Reliance Floating Rate Fund
Footprint
Mar - 06 Jan - 07 FY 06-07
Branches 30 46 50
FPC 20 22 25
Sub Total (A) 49 67 75
RRs 08 14 20
BFs 24 29 30
Sub Total (B) 32 43 50
Total 82 110 125
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Expansion plan into Tier-III & Tier IV cities
Expansion route
o Aggressively ramp up Resident Representatives (RRs) platforms formarket expansion
o Convert RRs into Branches on achieving Rs. 20 crs of Equity AUMs per
location
Branch breakeven target at 12 months & payback in 24 months
TYPES OF MUTUAL FUNDS
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A Mutual Fund may float several schemes, which may be classified on the basis of
its structure, its investment objectives and constitution.
INVESTMENT OBJECTIVE
Schemes can be classified by way of their stated investment objective such as
growth Fund, Balanced Fund, and Income Fund etc
EQUITY ORIENTED SCHEMES
These schemes, also commonly called Growth 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 because
the market boom and depression phases get evened out over a longer time span.
However, because they invest in equities, these schemes are exposed to
fluctuations in value especially in the short-term.
SECTOR SPECIFIC
These schemes restrict their investing to one or more pre-defined sectors, e.g.
technology sector, pharmaceutical, information technology etc. Since they depend
upon the performance of select sectors only, these schemes are inherently more
risky than general-purpose schemes. They are suited for informed investors who
wish to take a view and risk on the concerned sector.
SPECIAL 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
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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.
An example to such a fund is the HDFC Index Fund.
TAX SAVING SCHEMES
Investors (individuals and Hindu Undivided Families (HUFs)) are being
encouraged to invest in equity markets through Equity Linked Savings Scheme
(ELSS) by offering them a tax rebate. Units purchased cannot be assigned /
transferred/ pledged / redeemed / switched out until completion of 3 years from
the date of allotment of the respective Units.
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.
REAL ESTATE FUNDS
Specialized real estate funds would invest in real estates directly, or may fund real
estate developers or lend to them directly or buy shares of housing finance
companies or may even buy their securitised assets.
DEBT BASED SCHEMES
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These schemes, also commonly called Income Schemes, invest in debt securities
such as corporate bonds, debentures and government securities. The prices of these
schemes tend to be more stable compared with equity schemes and most of the
returns to the investors are generated through dividends or steady capital
appreciation. These schemes are ideal for conservative investors or those not in a
position to take higher equity risks, such as retired individuals. However, as
compared to the money market schemes they do have a higher price fluctuation
risk and compared to a Gilt fund they have a higher credit risk.
INCOME SCHEMES
These schemes invest in money markets, bonds and debentures of corporates with
medium and long-term maturities. These schemes primarily target current income
instead of capital appreciation. They therefore distribute a substantial part of their
distributable surplus to the investor by way of dividend distribution. Such schemes
usually declare quarterly dividends and are suitable for conservative investors who
have medium to long-term investment horizon and are looking for regular income
through dividend or steady capital appreciation.
HDFC Income Fund, HDFC Short Term Plan and HDFC Fixed Investment Plans
are examples of bond schemes.
LIQUID INCOMES SCHEMES
Similar to the Income scheme but with a shorter maturity than Income schemes.
An example of this scheme is the HDFC Liquid Fund
MONEY MARKET SCHEMES
These schemes invest in short-term instruments such as commercial paper (CP),
certificates of deposit (CD), treasury bills (T-Bill) and overnight money
(Call). The schemes are the least volatile of all the types of schemes because of
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their investments in money market instrument with short-term maturities. These
schemes have become popular with institutional investors and high net worth
individuals having short-term surplus investible funds.
GILT FUNDS
This scheme primarily invests in Government Debt. Hence, the investor usually
does not have to worry about credit risk since Government Debt is generally credit
risk free.
HDFC Gilt Fund is an example of such a scheme.
HYBRID SCHEMES
These schemes are commonly known as balanced schemes. These schemes invest
in both equities as well as debt. By investing in a mix of this nature, balanced
schemes seek to attain the objective of income and moderate capital appreciation
and are ideal for investors with a conservative, long-term orientation.
HDFC Balanced Fund and HDFC Childrens Gift Fund are examples of hybrid
schemes.
CONSTITUTION
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.
OPEN-ENDED SCHEMES
The units offered by these schemes are available for sale and repurchase on any
business day at NAV based prices. Hence, the unit capital of the schemes keeps
changing each day. Such schemes thus offer very high liquidity to investors and
are becoming increasingly popular in India. It is important to remember that an
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open-ended fund is NOT obliged to keep selling/issuing new units at all times, and
may stop issuing further subscription to new investors. On the other hand, an open-
ended fund rarely denies to its investor the facility to redeem existing units.
CLOSE-ENDED SCHEMES
The unit capital of a close-ended product is fixed as it makes a one-time sale of
fixed number of units. These schemes are launched with an initial public offer
(IPO) with a stated maturity period after which the units are fully redeemed at
NAV linked prices. In the interim, investors can buy or sell units on the stock
exchanges where they are listed. Unlike open-ended schemes, the unit capital in
closed-ended schemes usually remains unchanged. After an initial closed period,
the scheme may offer direct repurchase facility to the investors. Closed-ended
schemes are usually more illiquid as compared to open-ended schemes and hence
trade at a discount to the NAV. This discount tends towards the NAV closer to the
maturity date of the scheme.
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 TRADING STRATEGY
This category depends on the pace at which the funds trade their securities:
ACTIVE FUNDS
These are funds that are constantly active in the market - buying and selling the
securities in their portfolio very frequently. Such funds intend to take advantage of
the cycles in the market, and the opportunities in individual securities. Technically,
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these funds are said to have a 'high portfolio turnover'.
PASSIVE FUNDS
These are the funds with low portfolio trading. They normally follow a buy and
hold strategy and do not trade their holdings very frequently.
BALANCED FUNDS
Balanced Funds are those that follow the middle path between the active and
passive fund approaches. A better option for a conservative investor than the other
two.
BY INVESTMENT STRATEGY
This category is based on the various processes by which funds examine, analyze
and then invest the securities in their portfolios. Thus:
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GROWTH FUNDS
Growth funds typically invest in well-established companies with strong earnings
potential. Normally, such stocks have high price to earning ratios (P/E).
VALUE FUNDS
Value funds, on the other hand, invest in companies that have recently fallen out of
favor but are expected to bounce back or simply put they pick stocks that are out of
favor in the market believing that their prevailing market prices do not fully reflect
their intrinsic worth.
VALUE CUM GROWTH follows a mix of the growth and value approaches.
ASSET ALLOCATION FUNDS use asset allocation as a tool to maximize returns.
Here, the fund manager attempts to earn returns by shifting between asset classes.
In doing so, he can increase exposure to debt when equity markets are down and
vice versa. Investments in this case are generally made in index heavy stocks.
TRADING FUNDS are identified with high portfolio trading. Here, the fund
specifically adopts an active trading strategy to generate returns. Since mutual
funds do not have to pay any short -term capital gains tax, it makes sense for them
to operate trading funds.
.
BY SECURITY SELECTION
The type of security that the fund invests in is what determines this particular
group:
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TOP DOWN FUNDS are those that select stocks using the top down approach,
where the fund manager first identifies the sector in which he'd like to invest and
then the potential scrips /stock within the sector.
BOTTOMS UP FUNDS use the bottom up approach to investing, where the fund
manager focuses on the scrips, irrespective of what sector they come under.
SMALL CAP FUNDS focus on small cap stocks for their investment portfolio.
MID-CAP FUNDS invest in mid cap scrips.
LARGE CAP FUNDS are those that invest in large cap scrips.
AAA RATED FUNDS are those funds that invest only in triple A rated or higher
rated securities.
G SEC / GILT FUNDS invest in gilts or government securities (g-secs)
COMBINATION FUNDS are those that use a mix of each of the above security
selection strategies.
GENERAL FUNDS are those funds that do not follow any specified security
selection criteria
BY OBJECTIVE
This is one of the easiest to follow. Here the funds are classified based on the
objective that the investor has in mind while investing his money. Thus:
GENERAL FUNDS do not have any specific objectives and are ideal for investors
with no particular purpose in mind, apart from a good investment of course.
DEMATERIALIZED SHARES FUNDS invest in dematerialized shares only.
TAX SAVING (ELSS) FUNDS operates in conformity with the guidelines issued
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for Equity Linked Savings Schemes. Such schemes offer investors a tax rebate
under Section 80(C) of the Income Tax Act up to a maximum of Rs.100,000.
However, ELSS funds also prescribe a three-year lock-in period during which the
funds aren't accessible. These funds are also required to invest a minimum of 80 %
of their corpus in equity and related securities.
TAX SAVING (PENSION) enables unit holders to invest for their pension needs.
Investments in such funds normally carry a tax benefit under Section 88. Normally,
these funds also carry a lock-in period, which is determined according to the age of
the investor.
TAX SAVING (Insurance Linked) offers a tax-saving option along with insurance
benefits.
ASSURED RETURN assures unit holders of a minimum return in a prescribed
period. Normally, debt funds assure returns, however, there have been instances in
India of assured return equity schemes as well.
SHORT-TERM FUNDS invest with a short-term perspective. The Investment
timeframe influences the security selection strategy of the fund.
MEDIUM-TERM FUNDS invest with a medium term perspective. Here too,
investment timeframe influences security selection.
LONG-TERM FUNDS invest purely with a long-term perspective.
BY LOAD CHARGED/COST
These are based on whether a fee is charged or not for a particular transaction:
LOAD FUNDS impose a charge on a transaction carried out by the investor. For
example, when the fund sells units, it might charge an amount over and above the
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value of the units. Similarly, at the time of redemption, the fund may return a
slightly smaller amount than the total value of the units. This charge imposed by
the fund is called a "load". Thus, load funds are those that impose a charge either
on entry into the fund or on exit from the fund, or in some cases both on entry and
exit, within the limits as laid down by the regulatory authorities.
NO-LOAD FUNDS do not charge any fee on the transactions carried out by an
investor with the fund.
BY PLACE OF ORIGIN
OFFSHORE FUNDS raise money abroad to be invested in India.
DOMESTIC FUNDS raise and invest money in India.
THE BENEFITS OF MUTUAL FUNDS
DIAGRAM 4
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There are numerous benefits of investing in mutual funds and one of the key
reasons for its phenomenal success in the developed markets like US and UK is the
range of benefits they offer, which are unmatched by most other investment
avenues.
The benefits have been broadly split into universal benefits, applicable to all
schemes, and benefits applicable specifically to open-ended schemes.
BENEFITS
1. AFFORDABILTIY
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. Each unit holder thus
gets an exposure to such portfolios with an investment as modest as Rs.500/-. This
amount today would get an investor less than quarter of an Infosys share! 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.
2. DIVERSIFICATION
It is a well-known fact that one way of ensuring safe investments is to spread them
out over various instruments, securities, asset classes, locations and so on.
In proverbial layman terms:
Don't put all your eggs in one basket!
Mutual Funds, by virtue of their structure, offer investors precisely this benefit of
diversification.
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For instance, take Equity Growth Funds where the fund invests the money
collected in shares of various companies. The advantage? Say, some of the scrips
turn out to be poor investment decisions. The impact of this will not be disastrous
simply because the better investment decisions will balance it out and bring in
returns rather than losses
3. VARIETY OF OPTIONS
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.
For example, an investor can invest his money in a Growth Fund (equity scheme)
and Income Fund (debt scheme) depending on his risk appetite and thus create a
balanced portfolio easily or simply just buy a Balanced Scheme.
4. PROFESSIONAL MANAGEMENT
I. Instead of making decisions based on gut-feel or what one has heard from
others, when an investor buys into a mutual fund, he simply leaves his
investments in the expert hands of Professional fund managers, who invest
this money on the basis of minute analysis and astute investment strategies.
With their skill and experience at work, ones money ends up in the relevant
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assets. Qualified investment professionals who seek to maximize returns and
minimize risk monitor investor's money..
II. POTENTIAL OF RETURNS
Returns in the mutual funds are generally better than any other option in any other
avenue over a reasonable period of time. People can pick their investment horizon
and stay put in the chosen fund for the duration. Equity funds can outperform most
other investments over long periods by placing long-term calls on fundamentally
good stocks. The debt funds too will outperform other options such as banks.
Though they are affected by the interest rate risk in general, the returns generated
are more as they pick securities with different duration that have different yields
and so are able to increase the overall returns from the portfolio.
DIAGRAM
5
THE
RISK
RETURN TRADE-OFF
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The most important relationship to understand is the risk-return trade-off. Higher
the risk greater the returns/loss and lower the risk lesser the returns/loss.
Hence, it is up to the investor to decide how much risk he is willing to take. In
order to do this one must first be aware of the different types of risks involved with
his investment decision.
I. MARKET RISK
Sometimes prices and yields of all securities rise and fall. Broad outside influences
affecting the market in general lead to this situation. This is true, may it be big
corporations or smaller mid-sized companies. This is known as Market Risk. A
Systematic Investment Plan (SIP) that works like a recurring deposit account
might help mitigate this risk.
II. CREDIT RISK
The debt servicing ability (may it be interest payments or repayment of principal)
of a company through its cash flows determines the Credit Risk faced by the
investors. This credit risk is measured by independent rating agencies like CRISIL,
ICRA who rate companies and their paper. An AAA rating is considered the
safest whereas a D rating is considered poor credit quality. A well-diversified
portfolio might help mitigate this risk.
III. INFLATION RISK
Things one can often hear people talking about:
Rs.100 today is worth more than Rs.100 tomorrow.
Remember the time when a bus ride used to cost 50 paise?
The root cause, Inflation. Inflation is the loss of purchasing power over time. A lot
of times people make conservative investment decisions to protect their capital but
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end up with a sum of money that can buy less than what the principal could at the
time of the investment. This happens when inflation grows faster than the return on
ones investment. A well-diversified portfolio with some investment in equities
might help mitigate this risk.
IV. POLITICAL/GOVERNMENT POLICY RISK
Changes in government policy and political decision especially with regard to the
tax benefits may impact the business prospects of the companies leading to an
impact on the investments made by the fund.
They can create a favorable environment for investment or vice-versa. Therefore,
stable monetary and fiscal policies are crucial to sustain a propitious investment
environment.
V. LIQUIDITY RISK
Liquidity risk arises when it becomes difficult to sell the securities that one has
purchased. Liquidity Risk can be partly mitigated by diversification, staggering of
maturities as well as internal risk controls that lean towards purchase of liquid
securities.
VI. DIVERSIFICATION
The nuclear weapon in an investors arsenal to fight against Risk!
Diversification is the idea of spreading out ones money across many different
types of investments. When one investment is down another might be up. It
simply means that one must spread his investment across different securities
(stocks, bonds, money market instruments, real estate, fixed deposits etc.) and
different sectors (auto, textile, information technology etc.). Choosing to diversify
investment holdings not only reduces the risk tremendously but also adds to the
stability of returns.
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The most basic level of diversification is to buy multiple stocks rather than just one
stock. Mutual funds are set up to buy many stocks (even hundreds or thousands).
Mutual funds automatically diversify in a predetermined category of investments
(i.e. - growth companies, low-grade corporate bonds, international small
companies).
QUESTION-WISE ANALYSIS
1.) Do you think you have enough time and expertise to manage your financial
investment?
Results out of 250:
(a) Yes: 34 (b) No: 216
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Following patterns were observed:
(i) Around 86% people opined that the either have time constraints or lack
of expertise in financial area so that they can manage their funds in a best
possible way. They require professional management of their investment.
Such investors can better go for MF investment.
(ii) People belonging to (a) category exhibited profound knowledge of stock
markets, and invest primarily in equities, thus backing their own
judgment over mutual funds
2.) Do you have any knowledge about Mutual Funds?
Results out of 250:
(a) Yes: 78 (b) No: 172
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Following patterns were observed:
(i) A large population of investors was found to be ignorant
about MF industry. These include those people who
never have invested in mutual fund product.
(ii) Only 31% of the respondents said they have profound
knowledge about it.
3.) What is your annual income?
Results out of 250:
(a) Below Rs 1,50,000 : 25 (b)Rs 1,50,000 Rs 3,00,000: 102
(c) Rs 3,00,000 Rs 5,00,000: 78 (d) Rs 5,00,000 above: 45
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Following patterns were observed:
(i) The chart above simply shows the income distribution of respondents.
Major portion of the respondents lie in category b. The income
distribution affects the preference for the different products.
4.) How do you rate the risk taking ability?
Results out of 250:
(a) Low: 36 (b) Average: 96
(c) Medium: 64 (d) High: 54
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Following patterns were observed:
(i) Here category b and category c includes most of the respondents. It is in
accordance with the general tendency of investors to take average risk and to
gain average return. Thus Mutual Funds which fulfills this need, will be
preferred by most of the customers.
(ii) Category d respondents will prefer MF based on equity, which involves high
risk and high return whereas category a, which covers 14% of respondents,
are highly risk averse and will go for MF based purely on Debt funds.
5.) How do you rate the risks associated with Mutual Funds?
Results out of 250:
(a) Low: 67 (b) Average: 98
(c) Medium: 65 (d) High: 20
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Following patterns were observed:
(i) Around 40% of the respondents believe that investing in MFs involves
average risk and 27 % believe that it has medium risk.
(ii) 67% people think that the risk involved is quite low with MFs, thus
they are the ones who will prefer to invest MFs.
6.) What is your expected rate of return on Investments in a year?
Results out of 250:
(a) Less than 10 %: 12 (b) 10 % - 25 %: 123
(c) 25 % - 40 %: 71 (d) 40 % above: 44
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Following patterns were observed:
(i) Most of the people expectation is below 10%. This might be because of
the depression in the market.
7.) Do you think, it is safe to invest in Mutual Funds?
Results out of 250:
(a)Yes: 189 (b) No: 15
(c) Cant say: 46
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Interpretation:
It is good to see that people have still expectations from mutual funds. In this
scenario of market it is good to concentrate.
8.) How long would you like to hold your Investments?
Results out of 250:
(a) Less than 5 yrs: 21 (b) 5 to 10 yrs: 117
(c) 10 to 15 yrs: 76 (d) more than 15 yrs: 36
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Interpretation:
This shows a good sign from the investors that people understand that long term
investment will give them a good earn, however people also do not want to leave
that money for more than 10 years.
9.) Which Mutual Fund Plan do you consider the best?
Results out of 250:
(a) Balanced Plan: 111 (b) Equity Plan: 53
(c) Income Funds: 34 (d) Gilt funds: 40
(e) Cant say: 12
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Interpretation:
People of Dehradun are good in understanding the nature of market. They want to
diversify their investment rather than investing in few.
10.) During current scenario of market, do you think Mutual Funds are
destination for investments?
(a) Yes: 187 (b) No: 31
(c) Cant say: 32
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Interpretation:
Most of the people are satisfied with mutual funds and the think mutual funds as a
good option to invest.
11.) What are the factors that attract you to invest in Mutual Funds?
Results out of 250:
(a) Good Returns: 87 (b) Tax Benefits / Exemptions: 45
(c) Professional Management: 76 (d) Other: 42
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Interpretation:
In mutual funds people get good returns and also their risk is diversification. This
is due to the proper and professional management of funds.
12.)Which end-scheme do you feel is good?
Results out of 250:
(a) Close-end: 33 (b) Open-end: 217
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Interpretation:
Most of the people want to go with the open ended scheme. Thus MF with
liquidity options can better cater to the need of customers.
13.)Which among the following is the safest Investment option?
Results out of 250:
(a) Stock Markets: 11 (b) Mutual Funds: 75
(c) Bank Deposits: 83 (d) Others: 81
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67/78
Interpretation:
Due to steep declination in the stock market people think it is better to retain
money in banks, however a good amount of people still believe that mutual fund is
a good option. Although they have got certain losses but it is very less as compared
to the gain they have got from the mutual funds.
14.) What would you look for in a Mutual Fund company?
Results out of 250:
a) A trusted name: 98 b) Friendly service & responsiveness: 54
c) Good Plans: 78 d) Accessibility: 20
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68/78
Interpretation:
People think many times before investing. Brand image is given
the most preference and then the second most important thing
which people think about are the good plans.
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69/78
15.)Which of the following Mutual Fund product would you prefer?
Results out of 250:
a) Reliance MFs: 44 b) Tata AIG MFs: 57
c) SBI Life MFs: 71 d) ICICI MFs: 49
e) UTI MFs: 21 f) Others: 9
Interpretation:
It is clear from the results that people rely on the brand image of
the company. So the results have come according to the reliability
of the people on the organization. They thought that their money
is more secured in public sector companies.
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70/78
16.)How do you rate your experience with Mutual Funds?
Results out of 250:
(a) Excellent: 23 (b) Very good: 43
(c) Good: 52 (d) Average: 119 (e) Bad: 13
Interpretation:
Most of the people have got either average or good returns with mutual funds so
they are satisfied with the performance of mutual fund in this scenario.
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17.)Are you satisfied with the services offered by Reliance with respect to
MF? (Answer if you are a customer of Reliance or if you are aware of its
services)
Results out of 250:
(a) Yes: 176 (b) No: 67
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(c) Cant say: 107
Interpretation:
It is a good sign for Reliance that most of the people are fully satisfied with the
performance of the company. But still about of the people are having some
problem with it. So it is better to concentrate on the services and improve it to get
better results.
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CONCLUSION
1. Most the people dont have time to manage their financial
investments. So they will depend on ant broker to manage
their fincial investments.
2. The knowledge about the mutual funds is very less in the
customers. So it is very much essential to make them aware
of different types of options available to them in the market.
3. The investments which are having moderate risk are more
attracted by the customers. So mutual funds can have a long
run to go.
4. Most of the customers are aware that the risk associated
with mutual funds is average when compared to other
investments
5. The expectations of the customers were very less because of
downfall of the market
6. Most of the customers are of the opinion that it is safe to
ionvest on mutual funds as the economy is very down
7. Most of the investors were in long term growth of their
investments
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8. The people want to diversify their they investments
9. The customers were looking for liquidity in their options
10. They were in favour of open ended mutual funds
11. The most trusted mutual funds are SBI, TATA AiG,
RELIANCE, etc.
12. While choosing investments the customers choose the
trusted names more.
.
Questionnaire
Perception of consumers based on Reliance Mutual
Fund Products
Name = _______________________________Mob.__________________
Age = __________________ Gender = __________________
Profession = __________________
1.) Do you think you have enough time and expertise to manage your financial
investment?
(a) Yes (b) No
2.) Do you have any knowledge about Mutual Funds?
(a) Yes (b) No
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3.) What is your annual income?
(a) Below Rs 1,50,000 (b)Rs 1,50,000 Rs 3,00,000
(c) Rs 3,00,000 Rs 5,00,000 (d) Rs 5,00,000 above
4.) How do you rate your the risk taking ability?
(a) Low (b) Average
(c) Medium (d) High
5.) How do you rate the risks associated with Mutual Funds?
(a) Low (b) Average
(c) Medium (d) High
6.) What is your expected rate of return on Investments in a year?
(a) Less than 10 % (b) 10 % - 25 %
(c) 25 % - 40 % (d) 40 % above
7.) Do you think, it is safe to invest in Mutual Funds?
(a)Yes (b) No
8.) How long would you like to hold your Investments?
(a) Less than 5 yrs (b) 5 to 10 yrs
(c) 10 to 15 yrs (d) more than 15 yrs
9.) Which Mutual Fund Plan do you consider the best?
(a) Balanced Plan (b) Equity Plan
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(c) Income Funds (d) Gilt funds
10.) During current scenario of market, do you think Mutual Funds are a
destination for investments?
(a) Yes (b) No
11.) What are the factors that attract you to invest in Mutual Funds?
(a) Good Returns (b) Tax Benefits / Exemptions
(c) Professional Management (d) Other (specify___________________)
12.) Which end-scheme do you feel is good?
(a) Close-end (b) Open-end
13.) Which among the following is the safest Investment option?
(a) Stock Markets (b) Mutual Funds
(c) Bank Deposits (d) Others (specify__________________)
14.) What would you look for in a Mutual Fund company?
a) A trusted name b) Friendly service & responsiveness
c) Good Plans d) Accessibility
15.) Which of the following Mutual Fund product would you prefer?
a) Reliance MFs b) Tata AIG MFs
c) SBI Life MFs d) ICICI MFs
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e) UTI MFs f) others.
16.) How do you rate your experience with Mutual Funds?
(a) Excellent (b) Very good (c) Good (d) Average (e) Bad
17.) Are you satisfied with the services offered by Reliance with respect to
MF? (Answer if you are a customer of Reliance or if you are aware of its
services)
(a) Yes (b) No
If not, why _________________________________________
Thank You for Your cooperation
References:
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http://www.Reliance .com/v2/showPage.asp?page=homePage.asp
http://www.Reliance online.com/
http://demataccount.com/
https://nsdl.co.in/about/index.php
http://www.cdslindia.com/
http://www.religare.in/\
http://www.religare.in/apply-now.asp
www.demataccount.com
http://www.nse-india.com/
http://www.bseindia.com/
Reports of previous years
Finapolish(monthly magazine of Reliance ),Jan(09),Feb(09),Mar(09)
Business Research Methods(Donald.R.Cooper and Pamela.S.Schindler).8th
Edition
Tata McGraw-Hill, 2003.
http://www.karvy.com/v2/showPage.asp?page=homePage.asphttp://www.karvyonline.com/http://demataccount.com/https://nsdl.co.in/about/index.phphttp://www.cdslindia.com/http://www.religare.in/%5Chttp://www.religare.in/apply-now.asphttp://www.demataccount.com/http://www.nse-india.com/http://www.karvy.com/v2/showPage.asp?page=homePage.asphttp://www.karvyonline.com/http://demataccount.com/https://nsdl.co.in/about/index.phphttp://www.cdslindia.com/http://www.religare.in/%5Chttp://www.religare.in/apply-now.asphttp://www.demataccount.com/http://www.nse-india.com/