dessert at ion on mutual fund.4th sem mba..vvip

8/2/2019 Dessert at Ion on Mutual Fund.4th Sem Mba..VVIP

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CHAPTER-1

INTRODUCTION


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INTRODUCTION:

Mutual fund is a professionally managed form of collective investments that pools

money from different investor and invest it in stocks, bonds, short term money market

instrument, and other securities. In the mutual fund the fund manager who is also known as

the portfolio manager, trades the fund underlying securities, realizing capital gains or losses,

and collects the dividend or interest income the investment proceeds are then passed along to

the individuals investors. The value of a share of the mutual fund is known as net asset value

(NAV). The NAV is calculated daily based on the total value of the fund divided by the

number of shares currently issued and outstanding.

CHARACTERISTICS OF MUTUAL FUND:

1) The ownership is in the hands of the investors who have pooled in their funds.2) It is managed by the team of investment professionals and other service providers.3) The pool of funds is invested in a portfolio of marketable investments.4) The investors share is denominated by units whose value is called as net asset value

(NAV) which changes every day.

5) The investment portfolio is created according to the stated investment objectives of thefund.

HISTORY OF INDIA MUTAUL FUND INDUSTRY:

The mutual fund industry in India starts in 1963 with the formation of unit trust of

India, at the initiative of the government of India and Reserve Bank of India. The history of

mutual fund in India can be divided into four distinct phases:

FIRST PHASES (1964-87): Unit Trust of India was established in the year 1963 by an act of

Parliament. It was set up by the reserve bank of India and function under the administrative

control of the reserve bank of India. In 1978 UTI was delinked from the RBI and the

Industrial Development Bank of India (IDBI) took over the regulatory and administrative

control in place of RBI. The first scheme launched by UTI has Rs.6,700crore of assets under

management.

SECOND PHASE (1987-1993) (Entry of the public sector funds): In 1987, the entry of non-UTI, public sector mutual funds set up by public sector banks and Life Insurance Corporation


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of India and General Insurance Corporation of India. SBI mutual fund was the first non-UTI

mutual fund established in June 1987 followed by Canbank Mutual fund (Dec 87), Punjab

National Bank Mutual Fund (Nov 89), Bank of India (Jan 90), Bank of Baroda Mutual Fund

(Oct 92). LIC established its mutual fund in June 1989 while GIC had set-up its mutual fund

in December 1990. At the end of 1993, the mutual fund industry has assets under

management of Rs.47,004crore.

THIRD PHASE (1993-2003) (Entry of Private Sector Fund): with the entry of private sector

fund in 1993, a new era started in the India mutual Fund Industry, giving the India investor a

wider choice of fund families. Also 1993 is the year in which the first mutual fund

regulations came into being, under which all mutual fund except UTI were to be registered

and governed. The erstwhile Kothari Pioneer (now merged with frankling Templeton) was

the first private sector mutual fund registered in July 1993.

The 1993 SEBI regulations were substituted by a more comprehensive and revise mutual

fund regulation in 1996. The industry now functions under the SEBI (Mutual Fund)

regulations 1996.

The number of mutual fund went on increasing with many foreign mutual funds setting up

in India and also the industry has witness several mergers and acquisitions. At the end of

January 2003, there were 33 mutual funds with total assets of Rs. 1,21,805crore. The UTI

with Rs. 44,541 crore of assets under management was way ahead of other mutual funds.

FOURTH PHASE (Since Feb 2003): In February 2003, following the repeal of the UTI act

1963 UTI was divided into two separate entities:

i) Specified undertaking of the UTI with assets under management of Rs. 29,835crore as at the end of January 2003 representing broadly, the assets of scheme,

assured return and certain other scheme. The specified undertaking function

under an administrator and under the rules framed by the government of India

and does not come under the purview if the mutual fund regulations.

ii) UTI Mutual Fund Limited., sponsored by SBI, PNB, BOB, LIC. It isregistered with SEBI and functions under the mutual fund regulations. With


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the bifurcation of the erstwhile UTI which had in March 2000 more than

Rs.76,000 crore of assets under management and with the setting up of UTI

Mutual Fund, conforming to the SEBI fund regulations , and with recent

mergers taking place among different private sector funds the mutual funds,

the mutual fund industry has entered its current phase of consolidation and

growth. As at the end of September, 2004 there were 29 mutual funds, which

manages assets of Rs. 1,53,108 crore under 421 schemes.

ADVANTAGES OF MUTAUL FUNDS:

An investor can directly invest in individual securities or indirectly through a financialintermediary. Globally mutual fund has established themselves as a means of investment for

the retail investor. Some of the importance of mutual fund is listed below:

1) TRANSPARENCY:Mutual funds transparently declared their portfolio every month. Thus an

investor knows where his/her money is being deployed and in case they are not happy

with their portfolio they can withdraw at a short notice

.

2) DEVERSIFICATION:An investor undertakes risk if he invest all his funds in a single scrip. Mutual

fund invests in number of company across various industries and sectors. The

diversification reduces the riskiness of the investments.

3) RESEARCH:Mutual fund can afford information and data required for investment as they

have large amount of funds and equity research teams available with them.

4) PROFESSIONAL MANAGEMENT:Mutual funds are managed by professional managers who have the requisite

skills and experience to analyze the performance and prospects of company. And

average investor lacks all this knowledge.


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5) STABILITY:Mutual funds have a large amount of fund which provides them with

economies of scale by which they can absorb any losses in the stock market. In

addition mutual funds increase liquidity in the money and capital market.

6) AFFORDABILITY:Compared to direct investing in the capital market investing through the funds

is relatively less expensive as the benefits of economies of scale are passed on to the

investors.

7) TAX BENEFITS:Mutual funds investors now enjoy income tax benefits. Dividends received

from mutual funds debt schemes are tax exempt to the overall limit of Rs.9000

allowed under section 80L of the income tax act.

8) FLEXIBILITY:Mutual fund offers a family of schemes and investors have the option of

transferring their holdings from one scheme to the other.

9) CONVINIENCE:Investing in mutual funds reduces paperwork, saves time and makes

investment easy.

10) LIQUIDITY:Often investor cannot sell the security held easily, while in case of mutual

funds, they can easily encash their investment by selling their units to the fund if it is

open ended scheme or selling them on a stock exchange if it is close ended scheme.

11) SAFETY FROM LOSS DUE TO UNETHICAL PRACTICES:The probability of loss stemming from fraud, scandal, or bankruptcy involving

the funds management company is very small. By transferring investment

risk to shareholders, mutual fund company side step the problems that have

been especially painfull for people dealing with certain thrifts, banks, and

insurance companies among others.


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12) SHAREHOLDERS SERVICE:Mutual funds also offer many useful shareholders service. One important

service is the automatic reinvestment of distributions for people who want it.

Owners of individual stocks are more inclined to take their cash dividends and

spend them. Many funds have systematic withdrawal plans, which are handy

for retired individual. Other important services include automatic investment

plans, retirement plans, and record keeping for tax purposes.

DISADVANTAGES OF MUTUAL FUNDS:

There are certainly some benefits to mutual fund investing, but you should also be

aware of the drawbacks associated with mutual funds.

1. No Insurance:-

Mutual funds, although regulated by the government, are not insured against losses.

The Federal Deposit Insurance Corporation (FDIC) only insures against certain losses at

banks, credit unions, and savings and loans, not mutual funds. That means that despite the

risk-reducing diversification benefits provided by mutual funds, losses can occur, and it ispossible (although extremely unlikely) that you could even lose your entire investment.

2. Dilution:-

Although diversification reduces the amount of risk involved in investing in mutual

funds, it can also be a disadvantage due to dilution. For example, if a single security held by a

mutual fund doubles in value, the mutual fund itself would not double in value because that

security is only one small part of the fund's holdings. By holding a large number of different

investments, mutual funds tend to do neither exceptionally well nor exceptionally poorly.

3. Fees and Expenses:-

Most mutual funds charge management and operating fees that pay for the fund's

management expenses (usually around 1.0% to 1.5% per year). In addition, some mutual

funds charge high sales commissions, 12b-1 fees, and redemption fees. And some funds buy

and trade shares so often that the transaction costs add up significantly. Some of these

expenses are charged on
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an ongoing basis, unlike stockinvestments, for which a commission is paid only when you

buy and sell (see Investor Guide University: Fees and Expenses).

4. Poor Performance:-

Returns on a mutual fund are by no means guaranteed. In fact, on average, around

75% of all mutual funds fail to beat the major market indexes, like the S&P 500, and a

growing number of critics now question whether or not professional money managers have

better stock-picking capabilities than the average investor.

5. Loss of Control:-

The managers of mutual funds make all of the decisions about which securities to buy

and sell and when to do so. This can make it difficult for you when trying to manage your

portfolio. For example, the tax consequences of a decision by the manager to buy or sell an

asset at a certain time might not be optimal for you. You also should remember that you are

trusting someone else with your money when you invest in a mutual fund.

6. Trading Limitations:-

Although mutual funds are highly liquid in general, most mutual funds (called open-

ended funds) cannot be bought or sold in the middle of the trading day. You can only buy and

sell them at the end of the day, after they've calculated the current value of their holdings.

7. Size:-

Some mutual funds are too big to find enough good investments. This is especially

true offunds that focus on small companies, given that there are strict rules about how much

of a single company a fund may own. If a mutual fund has $5 billion to invest and is only

able to invest an average of $50 million in each, then it needs to find at least 100 such

companies to invest in; as a result, the fund might be forced to lower its standards when

selecting companies to invest in.

8. Inefficiency of Cash Reserves:-

Mutual funds usually maintain large cash reserves as protection against a large

number of simultaneous withdrawals. Although this provides investors with liquidity, it

means that some of the fund's money is invested in cash instead of assets, which tends tolower the investor's potential return.
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9. Different Types:-

The advantages and disadvantages listed above apply to mutual funds in general.

However, there are over 10,000 mutual funds in operation, and these funds vary greatly

according to investment objective, size, strategy, and style. Mutual funds are available forvirtually every investment strategy (e.g. value, growth), every sector (e.g. biotech, internet),

and every country or region of the world. So even the process of selecting a fund can be

tedious.

SCHEMES OF MUTUAL FUNDS:

Mutual fund schemes can be classified under two different categories:

1. General classification2. Broad classification.

GENERAL CLASSIFICATION:

Mutual funds are broadly classified into followings types:

1. Open-Ended schemes:The open-ended schemes are characterized by the continual selling and

redeeming of its shares. In other words the mutual fund does not have a fixed

capitalization. An open-ended funds stands ready at all time to sell new shares or buy

back old shares from investor at Net asset value. Open ended schemes do not have to

be listed in the stock exchange can also offer repurchase soon after allotment. Investor

can offer and exit the scheme anytime during the life of the fund. Open-ended

schemes do not have a fixed corpus. There is no fixed redemption period of the open-

ended scheme it can be terminated whenever the need arises. The funds offer a

redemption price at which the holder can sell units to the fund and exit. Besides an

investor can enter the fund again by buying units from the fund at its offer price.

2. Closed-ended scheme:Closed-ended schemes have a fixed corpus and a stipulated maturity period

ranging between 2 to 5 years. Investor can invest in the scheme when it is launched.

The scheme remains open for periods not exceeding 45 days. Investors in the closed-ended schemes can buy units only from the market, once initial subscriptions are over
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and thereafter the units is listed on the stocks exchanges where they can be bought

and sold. The funds has no intersection with investor except for paying dividend and

bonus

3. Interval scheme:Interval scheme combines the features of open-ended schemes and closed-

ended schemes. They are open for sale or redemption during predetermined

intervals at NAV-related prices.

BROAD CLASSIFICATION:

1) Equity funds:Equity funds are considered to be more risky compared to other fund types, but they

also provide higher return then other funds. It is advisable that that an investor

looking to invest in equity fund should invest for long term. Following are the type of

equity fund:

Aggressive growth fund: in aggressive growth fund managers aspire formaximum capital appreciation and invest in less research shares of speculative

nature. Because of these speculative investments Aggressive Growth Funds

become more volatile and thus are prone to higher risk than other equity funds.

Growth funds: Growth Funds also invest for capital appreciation, but they aredifferent from Aggressive Equity Funds in the sense they invest in companies

that will outperform the market in the future.

Equity Income or Dividend Yield Funds: The objective of equity incomefunds is to generate high recurring income and steady capital appreciation for

investor by investing in those companies which issue high dividends.

Diversified Equity fund: except for a small portion of investing in moneymarket, diversified equity fund invest mainly in equities without any

concentration on a particular sector(s). These funds are well diversified and

reduce sector specific or company specifics risk.


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2) Money Market or Liquid Fund:Money market or liquid fund invest in short term (maturing within one year) interest

bearing debt instruments. These securities are highly liquid and provide safety of

investment, thus making money market/liquid fund the safest investment option when

compared with other mutual fund types. However even money market funds are exposed

to interest rate risk. The typical investment option foe money market funds include

treasury bills (issued by governments, commercial papers(issued by companies) and

certificates of deposit(issued by banks).

3) Hybrid Funds:

Hybrid Funds, as the name suggest are those funds whose portfolio includes a blend

of equities, debts and money market securities. Hybrid Funds have an equal proportion of

debt equity in their portfolio. The following are hybrid funds in India,

Balanced Funds: The proportion of balance funds include assets like debtsecurities, convertible securities and equity and preference shares held in arelatively equal proportion. The objective of balanced fund are to reward investor

with regular income, moderate capital appreciation and at the same time

minimizing the risk of capital erosion. Balanced funds are appropriate for

conservative investors having a long term investment horizon.

Growth and Income Funds: Funds that combine features of growth fund andincome funds are known as Growth and Income Funds. These funds invest in

companies having potential for capital appreciation and those known for issuing

high dividends. The level of risk involve in these funds is lower than growth fund

and higher then income funds.

Asset allocation Funds: Mutual fund may invest in financial assets like equity,debt, money market or non financial (physical) assets like real estate,

commodities, etc.


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4) Debt or Income Fund:

Funds that invest in medium or long term debt instruments issued by private

companies, banks, financial institutions, governments and other entities belonging to

various sectors (like infrastructure companies etc.) are known as debt or income

funds. Debt funds are low risk profile funds that seek to generate fixed current income

(and not capital appreciation) to investors. In order to ensure regular income to

investor debt funds distribute large fraction of their surplus to investors. Although

debt securities are generally less risky then equities, they are subject to credit risk

(risk of default) by the issuer at the time of interest or principal payment.

6) Gilt Funds:Gilt funds are also known as Government Securities in India, Gilt funds invest in

government paper (named dated securities) having, medium to long term maturity

period. Issued by the Government of India, these investments have little credit risk

(risk of default) and provide safety of principal to the investors. However like all debt

funds, gilt fund too are exposed to interest rate risk.

Rating of Mutual Fund Schemes:

Mutual Fund schemes are periodically evaluated by independent institutions. CRISIL,

Value Research India, and economic Times are three such institutions whose rankings or

evaluations are currently very popular.

CRISIL:

Credit rating and Information Services of India Limited (CRISIL) carries out

Composite performance Rankings that cover all open-ended schemes that disclose their entire

portfolio composition and have NAV information for at least two years. It currently ranks

schemes in five categories, viz Equity Schemes, Debt Schemes, Gilt Schemes, Balanced

Schemes, and Liquid Schemes. Its ranking is based on four criteria, viz., and risk-adjusted

return of the schemes NAV, diversification of the portfolio, liquidity, and asset size. The

weights assigned to these criteria vary from category to category.


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Costs of investing in a Mutual Fund:

There are four types of costs associated with mutual fund investing: initial issue

expenses, entry load, exit load, and annual recurring expenses.

Initial issue expenses: include items such as brokerage fees and commission, marketing and

advertising expenses, printing and distribution costs, and so on which are incurred when the

scheme is launched. Initial expenses upto 6% of the amount mobilized can be charged to the

scheme.

Entry loador sales load is the load imposed when the units are purchased. It may be upto 2%

of course for many schemes it is nil. It the entry load is 2%, it means that when you buy theunits of a mutual fund scheme which has a net asset value that have an entry load are called

load schemes and schemes that have no entry load are called no-load schemes.

Exit loador redemption load is the load imposed when the units are sold back to the mutual

fund. In practice it varies from 0 % to 3%. This load is imposed to different investors from

withdrawing from the scheme. In some cases a contingent deferred sales charge is not

applicable when there is an entry load.

Annual recurring expenses refer to the investment management and advisory fees charged by

the AMC and operation expenses like marketing and selling expenses, brokerage costs,

trustee fees, custodian fees, audit fees, costs of investor communication. Costs of providing

account statements and dividend / redemption cheques and warrants and costs of statutory

advertisements.

RISK ASSOCIATED WITH MUTUAL FUNDS:

Higher the risk greater the return and lower the risk lesser the return. Hence it is upto the

investor to decide how much risk he is willing to take. Some of the risks associated with

mutual fund are:

Market risk: Sometimes price and yields of all securities rise and fall. Outside factorsaffecting the market in general leads to this. This is true, may it be big corporation or

smaller midsized companies. This is known as market risk.


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Credit risk: The debt servicing ability (May it be interest payment or repayment ofprincipal) of a company through its cash flows determine the credit risk. The credit

risk is determined by rating agencies like CRISIL who rate companies and their paper.

An AAA rating is considered as safest where as a D rating is considered as a poor

credit quality.

Inflation risk: Inflation is the loss of purchasing power over time. A lot of time peoplemake conservative decisions to protect their capital and end up with a sum of money

that can buy less then what the principal could at the investment. This happen when

inflation grows faster than the return on the investment. A well diversified portfolio

with some investment in equities might help to mitigate this risk .

Interest rate risk: In a free market economy interest rate are difficult if not possible topredict changes in interest rates affect the prices of bonds as well as equities. If

interest rate rises the prices of bond fall and vice versa.

Political risk: Changes in government policy and political decision can change theinvestment environments. They can create o favourable environment for investment

and vice versa.

Liquidity risk: Liquidity risk arises when it becomes difficult to sell the securities thatone 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.

RISK:

Any rational investor, before investing his or her ingestible wealth in the stock,

analyses the risk associated with the particular stock. The actual return he receives from a

stock may vary from his expected return and the risk is expressed in terms of variability of

return. The down side risk may be caused by several factors, either common to all stocks or

specific to a particular stock. Investor in general would like to analyze the risk factors and a

thorough knowledge of the risk helps him to plan his portfolio in such a manner so as to

minimize the risk associated with the investment.

Definition of Risk


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The dictionary meaning of risk is the possibility of loss or injury; the degree or

probability of such loss. In risk, the probable outcomes of all the possible events are listed.

Once the events are listed subjectively, the derived probabilities can be assigned to the entire

possible events.

Risk can be defined as the chance that the expected or prospective advantage, gain, profit or

return may not materialise that the actual outcome of investment may be less than the

expected outcome.

TYPES OF RISK:

There are two types of risk. They are:

i. Systematic riskii. Unsystematic risk.

Systematic Risk:

The systematic risk affects the entire market. Often we read in the newspaper that the

stock market is in the bear hug or in the bull grip. This indicates that the entire market is

moving in a particular direction either downward or upward. The economic conditions,

political situations and the sociological changes affect the security market. The recession in

the economy affects the profit prospect of the industry and the stock market. The 1998

recession experienced by developed and developing countries have affected the stock markets

all over the world. The South East Asian crisis has affected the stock market worldwide.

These factors are beyond the control of the corporate and the investor. They cannot be

entirely avoided by the investor. It drives home the point that the systematic risk is

unavoidable. The systematic risk is further sub-divided into

Market Risk Interest Rate Risk Purchasing Power Risk

Market Risk:


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Market risk is that portion of total variability of return caused by the alternating forces

of bull and bear markets. When the security index moves upward haltingly for a significant

period of time, it is known as bull market. In the bull market, the index moves from a low

level to the peak. Bear market is just a reverse to the bull market; the index declines haltingly

from the peak to a market low point called through for a significant period of time. During

the bull and bear market more than 80% of the securities prices rise or fall along with the

stock market indices.

Interest Rate Risk

Interest rate risk is the variation in the single period rates of return caused by thefluctuations in the market interest rate. Most commonly interest rate risk affects the price of

bonds, debentures and stocks. The fluctuations in the interest rates are caused by the changes

in the government monetary policy and the changes that occur in the interest rates of treasury

bills and the government bonds. The bonds issued by the government and quasi-government

are considered to be risk free.

Purchasing Power Risk:

Variations in the returns are caused also by the loss of purchasing power of currency.

Inflation is the reason behind the loss of purchasing power. The level of inflation proceeds

faster than the increase in capital value. Purchasing power risk is the probable loss in the

purchasing power of the returns to be received. The rise in price penalizes the returns to the

investor, and every potential rise in price is a risk to the investor.

UnsystematicRisk:

As already mentioned, unsystematic risk is unique and peculiar to a firm or an

industry. Unsystematic risk stems from managerial inefficiency, technological change in the

production process, availability of raw material, changes in the consumer preference, and

labour problems. The nature and magnitude of the above mentioned factors differ from

industry to industry, and company to company. They have to be analyzed separately for each


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industry and firm. The changes in the consumer preference affect the consumer products like

television sets, washing machines, refrigerators, etc. unsystematic risk can be classified into:

Business risk Financial risk

Business Risk:

Business risk is that portion of the unsystematic risk caused by the operating

environment of the business. Business risk arises from the inability of a firm to maintain its

competitive edge and the growth or stability of the earnings. Variation that occurs in the

operating environment as reflected on the operation income and expected dividends.

Financial Risk:

It refers to the variability of the income to the equity capital due to the debt capital.

Financial risk in a company is associated with the capital structure of the company. Capital

structure of the company consists of equity funds and borrowed funds. The presence of debt

and preference capital results in a commitment of paying interest or per fixed rate of

dividend. The interest payment affects the payments that are due to the equity investors.

Measurement of Risk:

The risk associated with a single asset is assessed from both behaviour and a

quantitative/statistical point of view. The behavioural view of risk can be obtained by using:

Sensitivity analysis Probability distribution

The statistical measure of risk of an asset/security is:

Standard deviation Coefficient of variation.


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Sensitivity Analysis:

It is a behaviour approach to assess risk using number of possible returns estimates to

obtain a sense of the variability among outcomes.

Probability Distribution:

It is a model that relates probabilities to the associated outcomes based on the rerun

the expected value of the return can be computed the expected rate of return is the weighted

average of all possible returns multiplied by their respective probabilities.

Standard Deviation:

Risk refers to the dispersion of returns around expected values. The most commonstatistical measure of risk of an asset is the standard deviation from the mean/expected values

of return. It represents the square root of the average squared deviation of the individual

returns from the expected returns.

Co-efficient of Variation:

It is a measure of relative dispersion used in comparing the risk of assets with

differing expected values. The co-efficient of variation is computed by dividing the for an

asset by its expected value.

RETURN:

Investment decisions are influenced by various motives. Some people invest in a

business to acquire control and enjoy the prestige associated with it. Some people invest in

expensive yachts and famous villas to display their wealth. Most investors, however, are

largely guided by the pecuniary motive of earning a return on their investment.

For earning returns investors have to almost invariably bear some risk. In general, risk and

return go hand in hand. While investors like returns they avoid risk. Investment decisions,

therefore, involve a trade-off between risk and return. Since risk and return are central to

investment decisions

Meaning of Return:


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Return is the primary motivation force that drives investment. It represents the reward

for undertaking investment. Since the game of investing is about returns (after allowing for

risk), measurement of realized (historical) returns is necessary to assess how well the

investment manager has done. In addition, historical returns are often used as an important

input in estimating future (prospective) returns.

Components of Return:

The return of an investment consists of two components,

Current Return:

The first component that often comes to mind when one is thinking about return is the

periodic cash flow (income), such as dividend or interest, generated by the investment.

Current return is measured as the periodic income in relation to the beginning price of the

investment.

Capital Return:

The second component of return is reflected in the price change called the capital

return it is simple the price appreciation (or depreciation) divided by the beginning price of

the asset. For assets like equity stocks, the capital return predominates.

Thus the total return for any security (or for that matter any asset) is defined as

Total return = Current return+ Capital return

The current return can be zero or positive, whereas the capital return can be negative,

zero, or positive

Measuring Historical Return:

The total return on an investment for a given period is:

( )


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All items are measured in rupees. The rupee cash payment received during the

period may be positive may be positive zero. The rupee price change over the period is

simply the difference between the ending price and the beginning price. This can be positive

(ending price exceeds the beginning price) or zero (ending price equals the beginning price)

or negative (ending price is less than the beginning price).

In formal terms:

R

( )E B

B

C P P

P

Where , R = total return over the period

C = cash payment received during the period

PE = ending price of the investment

PB= beginning price

Return Relative:

Often it is necessary to measure returns in a slightly different manner. This is

particularly true when a cumulative wealth index or a geometric mean has to be calculated,

because in such calculations negative returns cannot be used. The concept of return relative is

used in such cases. The return relative is defined as:

Return relative= E

B

C P

P


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CHAPTER-2

RESEARCH DESIGN


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RESEARCH DESIGN

TITLE OF THE SUDY:

A study on Risk and Return analysis of different scheme of Mutual FundSchemes in Reliance Money, Bangalore.

STATEMENT OD THE PROBLEM:

In the current economic scenario interest rates are falling and fluctuation in the share

market has put investors in confusion. One finds it difficult to take decision on investment.

This is primarily, because investments are risky in nature and investors have to consider

various factors before investing in investment avenues. Therefore the study aims to create

awareness about mutual fund schemes in form their risk, return & liquidity among the

investors.

OBJECTIVE OF THE STUDY:

Saving money is not enough. Each of us also need to invest ones savings intelligently

in order to have enough money available for funding the higher education of ones children,

for buying a house, or for ones own golden years. But the rapidly growing number of

investment avenues often led to confusion. Objectives of the study are to provide information

to individual investors regarding their risk, and choosing the best investment options to match

their goals and attitude to risk.

1. To identify the various risk and return associated with different scheme of mutual funds.2. To identify which scheme is best option for different type of investors.3. To find out the best mutual fund scheme with minimum risk and maximum return.4. To provide information to investors how to invest their hard money most profitably in

mutual funds schemes.

5. To provide information to investors how to adjust their investment portfolio withchanges in their life and volatile market situation.

6. Provide information about pros and cons of investing in Mutual Funds.


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7. To offer valuable suggestions on the basis of findings.8. To study the concept of mutual fund.

SCOPE OF THE STUDY:

This study is proposed to analyse the risk and return associated with different schemes of

mutual fund. This study will suggest how well the investor can choose the best scheme which

suits their needs. This study will also provide a well defined picture of the different scheme

of mutual fund which tells the various risk associated with them along with their return. This

report can be used by the investor as a guide for their investment.

The study is limited to mutual fund schemes in respect of their risk, return and

liquidity. The study covers 4 randomly selected mutual fund schemes out of mutual fund

industry in India. The analysis is strictly based on unit price information. Other company

performance indicators are not considered. It focuses net asset value prices during the period

from 1st Jan 2009, to 31st Dec, 2011. It is done within the specified time.

METHODOLOGY OF THE STUDY:

Keeping the objective in mind the study was based on the Net Asset Value of one

month market data of schemes. The data used are the first hand information collected with

newspaper and online trading. The second hand information also contains the net asset value

of the schemes through companies websites

The whole study can be termed as comparative study. It is also a desk research hence

there is no field work and collection of primary data. The study centers on mutual fundschemes in respect of their risk, return and liquidity. However, with the objective and scope

of the study in mind, it was decided to base the study on return series of selected mutual fund

schemes.

Daily unit prices of the selected schemes were collected from historical data. In order

to know liquidity, at least three months daily data was decided to be necessary. The reference

period is from 1st Jan. 2009 to 31st Dec, 2011.


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RESEARCH TECHNIQUE:

The quality of research output and the validity of its findings depend upon

appropriateness of the sampling design selected for the study. It was needed to apply

inferential statistical analysis; hence probability sampling was chosen to be essential.

The study is relating to the risk and return if mutual fund scheme. Therefore the Random

Sampling was used.

RESEARCH INSTRUMENT:

For analysis of the collected data the risk and return formula are used. Techniques

used are:

Sharpe index model, Si=

Treynor index model, Tn=

Jensen index model, Rp=Rf+(Rm-Rf)Statistical technique used is mean, standard deviation, etc.

SOUCES OF DATA:

Secondary data

Only secondary data is used for analysis. The data is collected through observation of

net asset value of each scheme and with online trading. The data has collected from

companys websites, magazines and company broachers.

LIMITATIONS OF THE STUDY:

The study is limited to some selected mutual fund scheme Only three months data is studied due of limited time. The information is not available at a proper time. It is dealt with only secondary data.


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OVER VIEW OF THE CHAPTER SCHEMES:

CHAPTER-1

This chapter gives the broad area about the history of Indian mutual fund industry,

growth of asset under management, strengths and weakness of mutual fund, advantages and

disadvantages of mutual fund to investors and rating of mutual fund schemes. The subject

gives the broad area about the historical return and risk profile about the particular schemes

and the parameters which measures the historical return and risk.

Chapter-2

This chapter describes the title of the study, the problem statement, the objective of

the study, scopes of the study. This chapter tells the methodology how the sample size hasbeen taken to study and technique used to find the solution for the problem. This chapter also

include imitations of the study and overview of chapter scheme.

Chapter-3

This chapter gives the profile of the chairman, corporate governance of the company,

investment approach, investment options, and risk factor which is associated for investment

in portfolio.

Chapter-4

This chapter gives the monthly risk and return of each selected mutual fund scheme

out of five mutual fund schemes. Based on the above calculations the table and graph shows

three months risk return of each selected mutual fund schemes and inference for the analysis.

Chapter-5

This chapter shows the findings based on the above calculations, suggestions for the

findings and conclusion for the whole study.


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CHAPTER-3

PROFILE OF THE

COMPANY


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INTRODUCTION

The Reliance groupone of Indias largest business houses with revenues of Rs. 990 billion($22.6 billion) that is equal to 3.5 percent of the countrys gross domestic product was splitinto two.

The group which claims to contribute nearly 10 per cent of the countrys indirect taxrevenues and over six percent of Indias exports was divided between Mukesh Ambani andhis younger brother Anil on June 18, 2005.

The groups activities span exploration, production, refining and marketing of oil and naturalgas, petrochemicals, textiles, financial services, insurance, power and telecom. The familyalso has interests in advertising agency and life sciences.

Reliance Mutual Fund (RMF) is one of India leading Mutual Funds, with Average AssetsUnder Management (AAUM) of Rs. 90,938 Crores (AAUM for Mar 08 ) and an investor

base of over 66.87Lakhs.

Reliance Mutual Fund, a part of the Reliance Anil Dhirubhai Ambani Group, is one of thefastest growing mutual funds in the country.

RMF offers investors a well-rounded portfolio of products to meet varying investorrequirements and has presence in 115 cities across the country. Reliance Mutual Fundconstantly endeavours to launch innovative products and customer service initiatives toincrease value to investors.

Reliance Mutual Fund schemes are managed by Reliance Capital Asset Management

Limited., a subsidiary of Reliance Capital Limited, which holds 93.37% of the paid-up

capital of RCAM, the balance paid up capital being held by minority shareholders.

Reliance Capital Ltd. is one of India leading and fastest growing private sector financialservices companies, and ranks among the top 3 private sector financial services and bankingcompanies, in terms of net worth.

Reliance Capital Ltd. has interests in asset management, life andgeneral insurance, privateequity and proprietary investments, stock broking and other financial services. RelianceMutual fund has largest AUM in India. Reliance capital asset Management is no. 1 AMC in

India but the picture is not the same in Chhattisgarh. In Chhattisgarh they are no. 2 AMC.Management of Reliance mutual fund wants to expand its feet in Chhattisgarh, before takingany step they want to understand market & investor and distributor behaviour of SMEs, sothey may plan accordingly to capture Chhattisgarh Market. In this research we have toanalyze why, how, where, when & how much an investor invest & according to it, we have tomake profile of investors. In this report I have endeavoured to understand the factorsaffecting Investment behaviour of an investor in Chhattisgarh. This behavioural studyconsists of how any investor invests in CG. What factor they consider, why these factors theyconsider, where do they invest, how do they invest, purpose behind investment, size ofinvestment, timing of investment & duration of investment. This study gave us basis toprofile investors.
http://managementfunda.com/customer-service/http://managementfunda.com/customer-service/http://managementfunda.com/general-insurance/http://managementfunda.com/general-insurance/http://managementfunda.com/general-insurance/http://managementfunda.com/general-insurance/http://managementfunda.com/customer-service/


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ASSETS UNDER MANAGEMENT

AUM for the Month Mar 2008

Average AUM Excluding Fund of Funds 9093794.02 Crs.

Average AUM Fund of Funds 0

COMPANY PROFILE

VISION STATEMENT

To be a globally respected wealth creator, with an emphasis on customer care and a culture

of goodcorporate governance .

MISION STATEMENT

To create and nurture a world-class, high performance environment aimed at delighting theircustomers
http://managementfunda.com/corporate-governance/http://managementfunda.com/corporate-governance/http://managementfunda.com/corporate-governance/


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CORPORATE GOVERNANCE

CORPORATE GOVERNANCE POLICY

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, animperative part of growth and visibility is adherence to Good Conduct in the marketplace. AtReliance Capital Asset Management Ltd., the implementation and observance of ethicalprocesses and policies has helped us in standing up to the scrutiny of our domestic andinternational investors.

MANAGEMENTThe management at Reliance Capital Asset Management Ltd. is committed to good CorporateGovernance, which includes transparency and timely dissemination of information to itsinvestors and unit holders. The Board of Directors of RCAM is a professional body,including well-experienced and knowledgeable Independent Members. Regular Audit

Committee meetings are conducted to review the operations and performance of thecompany.

EMPLOYEESReliance Capital Asset Management Ltd. has at present, a code of conduct for all its officers.It has a clearly defined prohibition on insider trading policy and regulations. Themanagement believes in the principles of propriety and utmost care is taken while handlingpublic money, making proper and adequate disclosures.

All personnel at Reliance Capital Asset Management Ltd are made aware of their rights,obligations and duties as part of the Dealing Policy laid down in terms of SEBI guidelines.They are taken through a well-designed HR program, conducted to impart work ethics, theCode of Conduct, information security, Internet and e-mail usage and a host of other issues.

One of the core objectives of Reliance Capital Asset Management Ltd. is to identify issuesconsidered sensitive by global corporate standards, and implement policies/guidelines inconformity with the best practices as an ongoing process. Reliance Capital AssetManagement Ltd. gives top priority to compliance in true letter and spirit, fully understandingits fiduciary responsibilities.

SPONSORS

Reliance Mutual Fund schemes are managed by Reliance Capital Asset ManagementLimited., a subsidiary of Reliance Capital Limited, which holds 93.37% of the paid-up capitalof RCAM, the balance paid up capital being held by minority shareholders., the sponsor.Reliance Mutual Fund (RMF) has been sponsored by Reliance Capital Ltd (RCL). Thepromoter of RCL is Enterprises Private Limited. Reliance Capital Limited is a Non BankingFinance Company. Reliance Capital Limited is one of the India leading and fastest growingfinancial services companies, and ranks among the top three private sector financial servicesand banking companies, in terms of net worth.

Reliance Capital has interests in asset management and mutual funds, life and non-life

insurance, private equity and proprietary investments, stock broking and other activities in thefinancial services sector. The net worth of RCL is Rs. 5,161.23 crores as on March 31, 2007.


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GIVEN BELOW IS A SUMMARY OF RCL FINANCIALS

Particulars(Rs. in crores)

2006-07 2005-06 2004-05 2003-04

Total Income 883.86 652.02 295.69 356.79

Profit Before Tax 733.18 550.61 111.21 105.79Profit After Tax 646.18 537.61 105.81 105.79Reserves & Surplus 4915.07 3849.58 1310.08 1271.84Net Worth 5161.23 4122.46 1437.92 1399.81Earnings per Share(Rs.)

28.39

(Basic +Diluted)

29.74

(Basic +Diluted)

8.31

(Basic+ Diluted)

8.31

(Basic +Diluted)

Book Value perShare (Rs.)

210.12 112.95 112.95 109.96

Dividend (%) 35% 30% 30% 29%

Paid up EquityCapital

246.16 223.40 127.84 127.84

Reliance Capital Ltd. has contributed Rupees One Lac as the initial contribution to the corpusfor the setting up of the Mutual Fund. Reliance Capital Ltd. is responsible for discharging itsfunctions and responsibilities towards the Fund in accordance with the Securities andExchange Board of India (SEBI) Regulations.

The Sponsor is not responsible or liable for any loss resulting from the operation of theScheme beyond the contribution of an amount of Rupees one Lac made by them towards theinitial corpus for setting up the Fund and such other accretions and additions to the corpus.

THE AMC

RELIANCE CAPITAL ASSET MANAGEMENT COMPANY

Reliance Capital Asset Management Limited (RCAM), a company registered under theCompanies Act, 1956 was appointed to act as the Investment Manager of Reliance MutualFund.

Reliance Capital Asset Management Limited (RCAM) was approved as the Asset

Management Company for the Mutual Fund by SEBI vide their letter no IIMARP/1264/95dated June 30, 1995. The Mutual Fund has entered into an Investment ManagementAgreement (IMA) with RCAM dated May 12, 1995 and was amended on August 12, 1997 inline with SEBI (Mutual Funds) Regulations, 1996. Pursuant to this IMA, RCAM isauthorized to act as Investment Manager of Reliance Mutual Fund. The net worth of theAsset Management Company including preference shares as on September 30, 2007 isRs.152.02 crores.

Reliance Mutual Fund schemes are managed by Reliance Capital Asset ManagementLimited., a subsidiary of Reliance Capital Limited, which holds 93.37% of the paid-up capitalof RCAM, the balance paid up capital being held by minority shareholders.


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Reliance Capital Asset Management Limited (RCAM) was approved as the AssetManagement Company for the Mutual Fund by SEBI by their letter no. IIMARP/1264/95dated June 30, 1995. The Mutual Fund has entered into an Investment ManagementAgreement (IMA) with RCAM dated May 12, 1995 and was amended on August 12, 1997 inline with SEBI (Mutual Funds) Regulations, 1996. Pursuant to this IMA, RCAM is

authorized to act as Investment Manager of Reliance Mutual Fund. The net worth of theAsset Management Company including preference shares as on March 31, 2005 is Rs.113.59crores.

MUTUAL FUNDS ASSET UNDER MANAGEMENT: TOP 10 COMPANIES LIST

Mutual Fund Assets Under Management (Rs. cr.)

February-

08

March-

08Change %Change

Reliance Mutual Fund 93,532 90,938 -2,594 -2.77

ICICI Prudential Mutual Fund 59,278 54,322 -4,956 -8.36UTI Mutual Fund 52,465 48,983 -3,482 -6.64

HDFC Mutual Fund 46,292 44,773 -1,519 -3.28Birla Sun Life Mutual Fund 34,704 35,906 1,202 3.46

SBI Mutual Fund 29,493 29,179 -314 -1.06Franklin Templeton Mutual Fund 29,902 26,842 -3,059 -10.23

Tata Mutual Fund 20,205 19,679 -526 -2.60Kotak Mahindra Mutual Fund 20,968 18,071 -2,897 -13.82

DSP Merrill Lynch Mutual Fund 19,139 16,675 -2,463 -12.87

SCHEMES

1. A. EQUITY/GROWTH SCHEMES The aim of growth funds is to provide capitalappreciation over the medium to long- term. Such schemes normally invest a majorpart of their corpus in equities. Such funds have comparatively high risks. Theseschemes provide different options to the investors like dividend option, capitalappreciation, etc. and the investors may choose an option depending on theirpreferences. The investors must indicate the option in the application form. Themutual funds also allow the investors to change the options at a later date. Growthschemes are good for investors having a long-term outlook seeking appreciation overa period of time.

1. B. DEBT/INCOME SCHEMES The aim of income funds is to provide regular andsteady income to investors. Such schemes generally invest in fixed income securitiessuch as bonds, corporate debentures, Government securities and money marketinstruments. Such funds are less risky compared to equity schemes. These funds arenot affected because of fluctuations in equity markets. However, opportunities ofcapital appreciation are also limited in such funds. The NAVs of such funds areaffected because of change in interest rates in the country. If the interest rates fall,NAVs of such funds are likely to increase in the short run and vice versa. However,long term investors may not bother about these fluctuations.

1. C. SECTOR SPECIFIC SCHEMES: These are the funds/schemes which invest in thesecurities of only those sectors or industries as specified in the offer documents. E.g.


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Pharmaceuticals, Software, Fast Moving Consumer Goods (FMCG), Petroleumstocks, etc. The returns in these funds are dependent on the performance of therespective sectors/industries. While these funds may give higher returns, they aremore risky compared to diversified funds. Investors need to keep a watch on theperformance of those sectors/industries and must exit at an appropriate time. They

may also seek advice of an expert.

PRODUCTS

FOLLOWING ARE SOME OF THE SCHEMES LAUNCHED BY RELIANCE

MUTUAL FUND:

Reliance Growth Fund

(September 1995)

Reliance Vision Fund

(September 1995)Reliance Income Fund

(December 1997)

Reliance Liquid Fund

(March 1998)Reliance Medium Term Fund

(August 2000)

Reliance Short Term Fund

(December 2002)Reliance Gilt Securities Fund

(July 2003)

Reliance Banking Fund

(May 2003)Reliance Monthly Income Plan

(December 2003)

Reliance Diversified Power Sector Fund

(March 2004)Reliance Pharma Fund

( May 2004)

Reliance Floating Rate Fund

(August 2004)Reliance Media & Entertainment Fund

(September 2004)

Reliance NRI Equity Fund

(October 2004)Reliance NRI Income Fund

(October 2004)

Reliance Index Fund

(February 2005)Reliance Equity Opportunities Fund

(February 2005)

Reliance Regular Savings Fund

(May 2005)Reliance Liquidity Fund

(June 2005)

Reliance Tax Saver (ELSS) Fund

(July 2005)Reliance Fixed Tenor Fund

(November 2005)

Reliance Equity Fund

(February 2006)Reliance Fixed Horizon Fund I

(August 2006)

Reliance Fixed Horizon Fund

(April 2006)


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Reliance Fixed Horizon Fund III

(March 2007)

Reliance Fixed Horizon Fund II

(November 2006)Reliance Liquid Plus Fund

(March 2007)

Reliance Long Term Equity Fund

(November 2006)Reliance Long Term Equity Fund

(Nov 2006)

Reliance Interval Fund

(March 2007)Reliance Fixed Horizon Fund IV

(August 2007)

Reliance Fixed Horizon Fund V

(September 2007)

INVESTMENT OBJECTIVES

a) RELIANCE MONTHLY INCOME PLAN

It aims to generate regular income in order to make regular dividend payments to unit holdersand the secondary objective is growth of capital.

b) RELIANCE INCOME FUND

It aims to generate optimal returns consistent with moderate levels of risk. This income maybe complemented by capital appreciation of the portfolio. Accordingly, investments shall

predominantly be made in Debt and Money Market Instruments.

c) RELIANCE MEDIUM TERM FUND

It aims to generate regular income in order to make regular dividend payments to unit holdersand the secondary objective is growth of capital.

d) RELIANCE LIQUID FUND

It aims 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.

e) RELIANCE LIQUIDITY FUND

It aims to generate optimal returns consistent with moderate levels of risk and high liquidity.Accordingly, investments shall predominantly be made in Debt and Money MarketInstruments.

f) RELIANCE SHORT TERM FUND

It aims to generate stable returns for investors with a short term investment horizon by

investing in fixed income securities of a short term maturity.


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g) RELIANCE GILT SECURITIES FUND

It aims to generate optimal credit risk free returns by investing in a portfolio of securitiesissued and guaranteed by the Central Government and State Governments

h) RELIANCE FLOATING RATE FUND

It aims to generate regular income through investment in a portfolio comprising substantiallyof Floating Rate Debt Securities (including floating rate securitized debt and Money MarketInstruments and Fixed Rate Debt Instruments swapped for floating rate returns).

i) RELIANCE REGULAR SAVINGS FUND DEBT OPTION

The primary investment objective of this plan is to generate optimal returns consistent withmoderate level of risk. This income may be complemented by capital appreciation of theportfolio. Accordingly investments shall predominantly be made in Debt & Money Market

Instruments.

j) RELIANCE REGULAR SAVINGS FUND EQUITY OPTION

The primary investment objective is to seek capital appreciation and or consistent returns byactively investing in equity / equity related securities.

k) RELIANCE REGULAR SAVINGS FUND HYBRID OPTION

The primary investment objective is to generate consistent return by investing a major portion

in debt & money market securities and a small portion in equity & equity related instruments.

l) RELIANCE GROWTH FUND

It aims to achieve long term growth of capital by investment in equity and equity relatedsecurities through a research based investment approach.

m) RELIANCE VISION FUND

It aims to achieve long term growth of capital by investment in equity and equity relatedsecurities through a research based investment approach.

n) RELIANCE EQUITY OPPORTUNITIES FUND

It aims to generate capital appreciation & provide long term growth opportunities byinvesting in a portfolio constituted of equity securities & equity related securities.

o) RELIANCE BANKING FUND

It aims to generate continuous returns by actively investing in equity / equity related or fixedincome securities of banks.


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p) RELIANCE DIVERSIFIED POWER SECTOR FUND

It seek to generate consistent returns by investing in equity / equity related or fixed incomesecurities of Power and other associated companies.

q) RELIANCE PHARMA FUND

It aims generate consistent returns by investing in equity / equity related or fixed incomesecurities of Pharma and other associated companies.

r) RELIANCE MEDIA & ENTERTAINMENT FUND

It aims to generate consistent returns by investing in equity / equity related or fixed incomesecurities of media & entertainment and other associated companies.

s) RELIANCE INDEX FUND-SENSEX PLAN

It aims to replicate the composition of the Sensex, with a view to endeavour to generatereturns, which could approximately be the same as that of Sensex.

t) RELIANCE INDEX FUND-NIFTY PLAN

It aims to replicate the composition of the Nifty, with a view to endeavour to generate returns,which could approximately be the same as that of Nifty.

u) RELIANCE NRI EQUITY FUND AIMS

It to generate optimal returns by investing in equity and equity related instruments primarilydrawn from the Companies in the BSE 200 Index.

v) RELIANCE EQUITY FUND

The primary investment objective of the scheme is to seek to generate capital appreciation &provide long-term growth opportunities by investing in a portfolio constituted of equity &equity related securities of top 100 companies by market capitalization & of companieswhich are available in the derivatives segment from time to time and the secondary objectiveis to generate consistent returns by investing in debt and money market securities.

w) THE MUTUAL FUND

ABOUT RELIANCE MUTUAL FUND

Reliance Mutual Fund (RMF) has been established as a trust under the Indian Trusts Act,1882 with Reliance Capital Limited (RCL), as the Settler /Sponsor and Reliance CapitalTrustee Co. Limited (RCTCL), as the Trustee.

RMF has been registered with the Securities & Exchange Board of India (SEBI) videregistration number MF/022/95/1 dated June 30, 1995. The name of Reliance Capital Mutual

Fund has been changed to Reliance Mutual Fund effective 11th. March 2004 vide SEBIsletter no. IMD / PSP / 4958 / 2004 date 11th. March 2004. Reliance Mutual Fund was formed


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to launch various schemes under which units are issued to the Public with a view tocontribute to the capital market and to provide investors the opportunities to makeinvestments in diversified securities.

MAIN OBJECTIVE OF THE TRUST

To carry on the activity of a Mutual Fund as may be permitted at law and formulate anddevise various collective Schemes of savings and investments for people in India and abroadand also ensure liquidity of investments for the Unit holders;

To deploy Funds thus raised so as to help the Unit holders earn reasonable returns on theirsavings and

To take such steps as may be necessary from time to time to realize the effects without anylimitation.

SOCIAL RESPONSIBILITIES

Organizations, like individuals, depend for their survival, sustenance and growth on thesupport and goodwill of the communities of which they are an integral part, and must payback this generosity in every way they can. This ethical standpoint, derived from the visionof the founder, lies at the heart of the CSR philosophy of the Reliance Group.

While they strongly believe that their primary obligation or duty as corporate entities is totheir shareholders they are just as mindful of the fact that this imperative does not exist inisolation; it is part of a much larger compact which they have with their entire body ofstakeholders: From employees, customers and vendors to business partners, eco-system, localcommunities, and society at large.

They evaluate and assess each critical business decision or choice from the point of view ofdiverse stakeholder interest, driven by the need to minimize risk and to pro-actively addresslong-term social, economic and environmental costs and concerns. For them, being sociallyresponsible is not an occasional act of charity or that one-time token financial contribution tothe local school, hospital or environmental NGO. It is an ongoing year-round commitment,which is integrated into the very core of their business objectives and strategy.

Because they believe that there is no contradiction between doing well and doing right.

Indeed, doing right is a necessary condition for doing well .


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THE MANAGEMENT TEAM

Board of DirectorsMr. Amitabh Chaturvedi

Mr. Kanu Doshi

Mr. Manu ChadhaMr. Sushil TripathiManagement Team

CEO

Mr. Vikrant GugnaniDeputy CEO

Mr. Sundeep SikkaHead Equity Investments

Mr. Madhusudan KelaHead Fixed Income

Mr. Amitabh Mohanty

Equity Fund ManagersMr. Sunil B. Singhania Mr. Ashwani KumarMr. Shailesh Raj Bhan Mr. Shiv Chanani

Mr. Omprakash S. KuckianDebt Fund Managers

Mr. Amit Tripathi Ms. Anju ChhajerMr. Arpit Malaviya

CommoditiesHead of Commodities Mr Vikram Dhawan

Head Of DepartmentsMarketing Communication Mr Rajat Johri

Finance and Accounts Mr. Sanjay WadhwaHuman Resource Development Mr. Rajesh Derhgawen

Information Technology Mr. Vinay NigudkarLegal & Compliance Mr. Balkrishna Kini

Operations & Settlement Ms. Geeta ChandranR&T Operations & Investor Relations Mr. Milind Nesarikar

Risk Management Mr. Lav ChaturvediSales & Distribution Mr Himanshu Vyapak

Zonal HeadsNorthern Zone Head Mr. Aashwin Dugal

Western Zone Head Mr. Sanjiv GudalSouthern Zone Head Mr. Gurbir ChopraEastern Zone Head Mr. Gopal Khaitan


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CUSTOMER MOTIVATION PLAN

a) OBJECTIVES

Area wise Identifying Potential Prospective distributors, which leads to increase the

business.

b) The Prospects

The Starting point is everyone who might conceivably buy the product that is calledsuspectsand from these the company determines the most likely prospects which it hopes to convertinto first time customers then repeat customers and then clients.


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Following figure shows the main steps of attracting and keeping customers.


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dessert at ion on mutual fund.4th sem mba..vvip

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