dhiraj project

8/3/2019 Dhiraj Project

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A

PROJECT REPORT

PERFORMANCE ANALYSIS OF RELIANCE

MUTUAL FUNDS

AT

RELIANCE MONEY LTD., PUNE

SUBMITTED TO

UNIVERSITY OF PUNE

BY

JAIN DHIRAJ

MBA II

2007-09

SINHGAD INSTITUTE OF BUSINESS

ADMINISTRATION AND RESEARCH

KONDHWA, PUNE


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CERTIFICATE

This is to certify that MR. JAIN DHIRAJ student of SINHGAD

INSTITUTE OF BUSINESS ADMINISTRATION & RESEARCH,

PUNE has completed His fieldwork report at RELIANCE MONEY LTD.

on the topic of PERFORMANCE ANALYSIS OF RELIANCE

MUTUAL FUND and has Submitted the field work report in partial

fulfillment of MASTERS IN BUSINESS ADMINISTRATION Of the

UNIVERSITY OF PUNE for the academic year 2007 to 2009.He has

worked under our guidance and direction. The said report is based on

bonafide information.

Designation Prof. Sunil Kumar

DirectorDate:

Place:


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DECLARATION

I hereby declare that the Project titled PERFORMANCE ANALYSIS OF

RELIANCE MUTUAL FUND. Is an original piece of research workcarried out by me under the guidance and supervision of Prof. NIVIDITA

MOHARIR. The information has been collected from genuine & authentic

sources. The work has been submitted in partial fulfillment of the

requirement of MASTERS IN BUSINESS ADMINISTRATION to Pune

University.

Place : Signature

Date : JAIN DHIRAJ


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ACKNOWLEDGEMENT

I would like to sincerely thank RELIANCE MONEY LTD, PUNE for

allowing me to do the project work with them. I attribute the success to the

guidance and inputs by Mr. SHUBHAM MALOTHRA (CENTRAL

MANAGER). I am also thankful to him for monitoring the progress and

helping and suggesting alternatives whenever required. I am grateful to

Mr.GAJANAN ALURE & Mr. SUNIL INDANE for giving the inside

information about the company and also helped in completing my project.

My thanks are also due to the employees of RELIANCE MONEY

LTD.Who are directly and indirectly related to the successful completion of

my project. I take this opportunity to express my gratitude to respected

Director Prof. Sunil Kumar and internal guide Prof. NIVIDITA MOHARIR,

for his guidance and valuable suggestion.

JAIN DHIRAJ


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EXECUTIVE SUMMARY


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TABLE OF CONTENTS

1) Introduction

2) Objective

3) Research Methodology

4) Company Profile

5) Data Analysis

6) Conclusion

7) Limitation

8) Recommendation

9) Bibliography

10) Annexure


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Introduction

Mutual Funds - Concept


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A mutual fund is a trust that pools the money of several investors and manages

investments on their behalf. Legally it is like any other company you know of. Hence, the

fund is also called a mutual fund company. The fund company takes your money and like

you from other new investors. This is added to the money that's already invested with the

fund.

The fund collects this money from investors through various schemes. Each scheme is

differentiated by its objective of investment or in other words, a broadly defined purpose

of how the collected money is going to be invested. Based on these broad purposes

schemes are classified into a dozen or so categories.

When you buy into a scheme of a mutual fund you are holding units of the scheme.

Buying units is like owning shares of a scheme. The total money collected through a

scheme constitutes the funds assets.

Investing and managing the collected money is a difficult task. The fund company

delegates this to a company of professional investors, usually experts who are known for

smart stock picks. This company is the Asset Management Company (AMC) and the

fund company usually delegates the job of investment management for a fee.

The income earned through these investments and the capital appreciation realized by the

scheme is shared by its unit holders in proportion to the number of units owned by them.

Mutual Fund Operation Flow Chart


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Mutual Funds - Organization

There are many entities involved and the diagram below illustrates the organizational set

up of a mutual fund:


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Mutual Funds Industry in India

The origin of mutual fund industry in India is with the introduction of the concept of

mutual fund by UTI in the year 1963. Though the growth was slow, but it accelerated

from the year 1987 when non-UTI players entered the industry. In the past decade, Indian

mutual fund industry had seen dramatic improvements, both quality wise as well as

quantity wise. Before, the monopoly of the market had seen an ending phase; the Assets

Under Management (AUM) was Rs. 67bn. The private sector entry to the fund family

raised the AUM to Rs. 470 bn in March 1993 and till April 2004; it reached the height of

1,540 bn. Putting the AUM of the Indian Mutual Funds Industry into comparison, the

total of it is less than the deposits of SBI alone, constitute less than 11% of the total

deposits held by the Indian banking industry. The main reason of its poor growth is that

the mutual fund industry in India is new in the country. Large sections of Indian investors

are yet to be intellectuated with the concept. Hence, it is the prime responsibility of all

mutual fund companies, to market the product correctly abreast of selling.


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HISTORY OF MUTUAL FUND:.

First Phase - 1964-87

Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up

by the Reserve Bank of India and functioned under the Regulatory and administrative

control of the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the

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

control in place of RBI. The first scheme launched by UTI was Unit Scheme 1964. At theend of 1988 UTI had Rs.6,700 crores of assets under management.

Second Phase - 1987-1993 (Entry of Public Sector Funds)

Entry of non-UTI mutual funds. SBI Mutual Fund was the first followed by Canbank

Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank

Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92).

LIC in 1989 and GIC in 1990. The end of 1993 marked Rs.47,004 as assets under

management.

Third Phase - 1993-2003 (Entry of Private Sector Funds)

With the entry of private sector funds in 1993, a new era started in the Indian mutual fund

industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the

year in which the first Mutual Fund Regulations came into being, under which all mutual

funds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer

(now merged with Franklin Templeton) was the first private sector mutual fund registered

in July 1993.

The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive

and revised Mutual Fund Regulations in 1996. The industry now functions under the

SEBI (Mutual Fund) Regulations 1996.


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The number of mutual fund houses went on increasing, with many foreign mutual funds

setting up funds in India and also the industry has witnessed several mergers and

acquisitions. As at the end of January 2003, there were 33 mutual funds with total assets

of Rs. 1,21,805 crores. The Unit Trust of India with Rs.44,541 crores of assets under

management was way ahead of other mutual funds.

Fourth Phase - since February 2003

This phase had bitter experience for UTI. It was bifurcated into two separate entities. One

is the Specified Undertaking of the Unit Trust of India with AUM of Rs.29,835 crores (as

on January 2003). The Specified Undertaking of Unit Trust of India, functioning under an

administrator and under the rules framed by Government of India and does not comeunder the purview of the Mutual Fund Regulations.

The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is

registered with SEBI and functions under the Mutual Fund Regulations. With the

bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76,000 crores of

AUM and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual

Fund Regulations, and with recent mergers taking place among different private sector

funds, the mutual fund industry has entered its current phase of consolidation and growth.

As at the end of September, 2004, there were 29 funds, which manage assets of

Rs.153108 crores under 421 schemes.


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GROWTH IN ASSETS UNDER MANAGEMENT

Performance of Mutual Funds in India


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The year was 1963. Unit Trust of India invited investors or rather to those who believed

in savings, to park their money in UTI Mutual Fund.

For 30 years it goaled without a single second player. Though the 1988-year saw some

new mutual fund companies, but UTI remained in a monopoly position. The

performance of mutual funds in India in the initial phase was not even closer to

satisfactory level. People rarely understood, and of course investing was out of question.

But yes, some 24 million shareholders were accustomed with guaranteed high returns by

the beginning of liberalization of the industry in 1992. This good record of UTI became

marketing tool for new entrants. The expectations of investors touched the sky in

profitability factor. However, people were miles away from the preparedness of risks

factor after the liberalization.

The Assets Under Management of UTI was Rs. 67bn. by the end of 1987. Let me

concentrate about the performance of mutual funds in India through figures. From Rs.

67bn. the Assets Under Management rose to Rs. 470 bn. in March 1993 and the figure

had a three times higher performance by April 2004. It rose as high as Rs. 1,540bn.

The net asset value (NAV) of mutual funds in India declined when stock prices started

falling in the year 1992. Those days, the market regulations did not allow portfolio shifts

into alternative investments. There were rather no choices apart from holding the cash or

to further continue investing in shares. One more thing to be noted, since only closed-end

funds were floated in the market, the investors disinvested by selling at a loss in the

secondary market.

The performance of mutual funds in India suffered qualitatively. The 1992 stock market

scandals, the losses by disinvestments and of course the lack of transparent rules in the

where about rocked confidence among the investors. Partly owing to a relatively weak

stock market performance, mutual funds have not yet recovered, with funds trading at an

average discount of 1020 percent of their net asset value.

The supervisory authority adopted a set of measures to create a transparent and


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competitive environment in mutual funds. Some of them were like relaxing investment

restrictions into the market, introduction of open-ended funds, and paving the gateway for

mutual funds to launch pension schemes.

The measure was taken to make mutual funds the key instrument for long-term saving.

The more the variety offered, the quantitative will be investors.

At last to mention, as long as mutual fund companies are performing with lower risks and

higher profitability within a short span of time, more and more people will be inclined to

invest until and unless they are fully educated with the dos and donts of mutual funds.

Mutual Fund Companies in India

The concept of mutual funds in India dates back to the year 1963. The era between 1963

and 1987 marked the existence of only one mutual fund company in India with Rs. 67bn

assets under management (AUM), by the end of its monopoly era, the Unit Trust of India

(UTI). By the end of the 80s decade, few other mutual fund companies in India took their

position in mutual fund market. The new entries of mutual fund companies in India were

SBI Mutual Fund, Canbank Mutual Fund, Punjab National Bank Mutual Fund, Indian

Bank Mutual Fund, Bank of India Mutual Fund. The succeeding decade showed a new

horizon in Indian mutual fund industry. By the end of 1993, the total AUM of the

industry was Rs. 470.04 bn. The private sector funds started penetrating the fund

families. In the same year the first Mutual Fund Regulations came into existence with re-

registering all mutual funds except UTI. The regulations were further given a revised

shape in 1996. Kothari Pioneer was the first private sector mutual fund company in India,

which has now merged with Franklin Templeton. Just after ten years with private sector

players penetration, the total assets rose up to Rs. 1218.05 bn. Today there are 33 mutual

fund companies in India.


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Major Mutual Fund Companies in India

Abn Amro Mutual Fund

ABN AMRO Mutual Fund was setup on April 15, 2004 with ABN AMRO Trustee

(India) Pvt. Ltd. as the Trustee Company. The AMC, ABN AMRO Asset Management

(India) Ltd. was incorporated on November 4, 2003. Deutsche Bank A G is the custodian

of ABN AMRO Mutual Fund.

Alliance Capital Mutual Fund

Alliance Capital Mutual Fund was setup on December 30, 1994 with Alliance Capital

Management Corp. of Delaware (USA) as sponsored. The Trustee is ACAM Trust

Company Pvt. Ltd. and AMC, the Alliance Capital Asset Management India (Pvt) Ltd.

with the corporate office in Mumbai.

Benchmark Mutual Fund

Benchmark Mutual Fund was setup on June 12, 2001 with Niche Financial Services Pvt.

Ltd. as the sponsored and Benchmark Trustee Company Pvt. Ltd. as the Trustee

Company. Incorporated on October 16, 2000 and headquartered in Mumbai, Benchmark

Asset Management Company Pvt. Ltd. is the AMC.

Birla Sun Life Mutual Fund

Birla Sun Life Mutual Fund is the joint venture of Aditya Birla Group and Sun Life

Financial. Sun Life Financial is a global organization evolved in 1871 and is being

represented in Canada, the US, the Philippines, Japan, Indonesia and Bermuda apart from

India. Birla Sun Life Mutual Fund follows a conservative long-term approach to

investment. Recently it crossed AUM of Rs. 10,000 crores.

Bank of Baroda Mutual Fund (BOB Mutual Fund)

Bank of Baroda Mutual Fund or BOB Mutual Fund was setup on October 30, 1992 under

the sponsorship of Bank of Baroda. BOB Asset Management Company Limited is the
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AMC of BOB Mutual Fund and was incorporated on November 5, 1992. Deutsche Bank

AG is the custodian.

Canbank Mutual Fund

Canbank Mutual Fund was setup on December 19, 1987 with Canara Bank acting as the

sponsor. Canbank Investment Management Services Ltd. incorporated on March 2, 1993

is the AMC. The Corporate Office of the AMC is in Mumbai.

Chola Mutual Fund

Chola Mutual Fund under the sponsorship of Cholamandalam Investment & Finance

Company Ltd. was setup on January 3, 1997. Cholamandalam Trustee Co. Ltd. is the

Trustee Company and AMC is Cholamandalam AMC Limited.

Escorts Mutual Fund

Escorts Mutual Fund was setup on April 15, 1996 with Excorts Finance Limited as its

sponsor. The Trustee Company is Escorts Investment Trust Limited. Its AMC was

incorporated on December 1, 1995 with the name Escorts Asset Management Limited.

Franklin Templeton India Mutual Fund

The group, Franklin Templeton Investments is a California (USA) based company with a

global AUM of US$ 409.2 bn. (as of April 30, 2005). It is one of the largest financial

services groups in the world. Investors can buy or sell the Mutual Fund through their

financial advisor or through mail or through their website. They have Open end

Diversified Equity schemes, Open end Sector Equity schemes, Open end Hybrid

schemes, Open end Tax Saving schemes, Open end Income and Liquid schemes, closed

end Income schemes and Open end Fund of Funds schemes to offerFranklin

Templeton.

GIC Mutual Fund

GIC Mutual Fund, sponsored by General Insurance Corporation of India (GIC), a

Government of India undertaking and the four Public Sector General Insurance


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Companies, viz. National Insurance Co. Ltd (NIC), The New India Assurance Co. Ltd.

(NIA), The Oriental Insurance Co. Ltd (OIC) and United India Insurance Co. Ltd. (UII)

and is constituted as a Trust in accordance with the provisions of the Indian Trusts Act,

1882.

HDFC Mutual Fund

HDFC Mutual Fund was setup on June 30, 2000 with two sponsorers namely Housing

Development Finance Corporation Limited and Standard Life Investments Limited.

HSBC Mutual Fund

HSBC Mutual Fund was setup on May 27, 2002 with HSBC Securities and Capital

Markets (India) Private Limited as the sponsor. Board of Trustees, HSBC Mutual Fund

acts as the Trustee Company of HSBC Mutual Fund.

ING Vysya Mutual Fund

ING Vysya Mutual Fund was setup on February 11, 1999 with the same named Trustee

Company. It is a joint venture of Vysya and ING. The AMC, ING Investment

Management (India) Pvt. Ltd. was incorporated on April 6, 1998.

Kotak Mahindra Mutual Fund

Kotak Mahindra Asset Management Company (KMAMC) is a subsidiary of KMBL. It is

presently having more than 1,99,818 investors in its various schemes. KMAMC started

its operations in December 1998. Kotak Mahindra Mutual Fund offers schemes catering

to investors with varying risk - return profiles. It was the first company to launch

dedicated gilt scheme investing only in government securities

LIC Mutual Fund

Life Insurance Corporation of India set up LIC Mutual Fund on 19th June 1989. It

contributed Rs. 2 Crores towards the corpus of the Fund. LIC Mutual Fund was

constituted as a Trust in accordance with the provisions of the Indian Trust Act, 1882. .
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The Company started its business on 29th April 1994. The Trustees of LIC Mutual Fund

have appointed Jeevan Bima Sahayog Asset Management Company Ltd as the

Investment Managers for LIC Mutual Fund.

Morgan Stanley Mutual Fund India

Morgan Stanley is a worldwide financial services company and its leading in the market

in securities, investmenty management and credit services. Morgan Stanley Investment

Management (MISM) was established in the year 1975. It provides customized asset

management services and products to governments, corporations, pension funds and non-

profit organizations. Its services are also extended to high net worth individuals and retail

investors. In India it is known as Morgan Stanley Investment Management Private

Limited (MSIM India) and its AMC is Morgan Stanley Mutual Fund (MSMF). This is the

first close end diversified equity scheme serving the needs of Indian retail investors

focusing on a long-term capital appreciation.

Prudential ICICI Mutual Fund

The mutual fund of ICICI is a joint venture with Prudential Plc. of America, one of the

largest life insurance companies in the US of A. Prudential ICICI Mutual Fund was setup

on 13th of October 1993 with two sponsorers, Prudential Plc. and ICICI Ltd. The Trustee

Company formed is Prudential ICICI Trust Ltd. and the AMC is Prudential ICICI Asset

Management Company Limited incorporated on 22nd of June, 1993.

Reliance Mutual Fund

Reliance Mutual Fund (RMF) was established as trust under Indian Trusts Act, 1882. The

sponsor of RMF is Reliance Capital Limited and Reliance Capital Trustee Co. Limited is

the Trustee. It was registered on June 30, 1995 as Reliance Capital Mutual Fund which

was changed on March 11, 2004. Reliance Mutual Fund was formed for launching of

various schemes under which units are issued to the Public with a view to contribute to

the capital market and to provide investors the opportunities to make investments in

diversified securities.
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Sahara Mutual Fund

Sahara Mutual Fund was set up on July 18, 1996 with Sahara India Financial Corporation

Ltd. as the sponsor. Sahara Asset Management Company Private Limited incorporated on

August 31, 1995 works as the AMC of Sahara Mutual Fund. The paid-up capital of the

AMC stands at Rs 25.8 crore.

Standard Chartered Mutual Fund

Standard Chartered Mutual Fund was set up on March 13, 2000 sponsored by Standard

Chartered Bank. The Trustee is Standard Chartered Trustee Company Pvt. Ltd. Standard

Chartered Asset Management Company Pvt. Ltd. is the AMC which was incorporated

with SEBI on December 20,1999.

State Bank of India Mutual Fund

State Bank of India Mutual Fund is the first Bank sponsored Mutual Fund to launch

offshore fund, the India Magnum Fund with a corpus of Rs. 225 cr. approximately. Today

it is the largest Bank sponsored Mutual Fund in India. They have already launched 35

Schemes out of which 15 have already yielded handsome returns to investors. State Bank

of India Mutual Fund has more than Rs. 5,500 Crores as AUM. Now it has an investor

base of over 8 Lakhs spread over 18 schemes.

Tata Mutual Fund

Tata Mutual Fund (TMF) is a Trust under the Indian Trust Act, 1882. The sponsorers for

Tata Mutual Fund are Tata Sons Ltd., and Tata Investment Corporation Ltd. The

investment manager is Tata Asset Management Limited and its Tata Trustee Company

Pvt. Limited. Tata Asset Management Limited's is one of the fastest in the country with

more than Rs. 7,703 crores (as on April 30, 2005) of AUM.

Unit Trust of India Mutual Fund

UTI Asset Management Company Private Limited, established in Jan 14, 2003, manages

the UTI Mutual Fund with the support of UTI Trustee Company Private Limited. UTI

Asset Management Company presently manages a corpus of over Rs.20000 Crore. The
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sponsorers of UTI Mutual Fund are Bank of Baroda (BOB), Punjab National Bank

(PNB), State Bank of India (SBI), and Life Insurance Corporation of India (LIC). The

schemes of UTI Mutual Fund are Liquid Funds, Income Funds, Asset Management

Funds, Index Funds, Equity Funds and Balance Funds.


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Direct Equity Investing versus Mutual Fund Investing

Investors have the option to invest directly in equities through the stock market instead of

investing through mutual funds. However, a practical evaluation reveals that mutual

funds are indeed a more recommended option for the individual investor. Here is a

comparison between the two options:

Identifying stocks that have growth potential is a difficult process involving

detailed research and monitoring of the market. Mutual Funds specialize in this

area and possess the requisite resources to carry out research and continuous

market monitoring. This is clearly beyond the capability of most individual

investors.

A critical element towards successful equity investment is Diversification. A

diversified portfolio serves to minimize risk by ensuring that a downtrend in

some securities/sectors is offset by an upswing in the others. Clearly,

diversification requires substantial investment that may be beyond the means

of most individual investors. Mutual Funds pool the resources of many

investors and thus have the funds necessary to build a diversified portfolio, and

by investing even a small amount in a Mutual Fund, an investor can, through

his proportionate share, reap the benefit of diversification.

Mutual funds specialize in the business of investment management, and

therefore employ Professional Management for carrying out their activities.

Professional management ensures that the best investment avenues are tapped

with the aid of comprehensive information and detailed research. It also

ensures that expenses are kept under tight control and market opportunities are

fully utilized. An investor who opts for Direct Equity Investing loses out on

these benefits.


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Mutual Funds focus their investment activities based on Investment

Objectives such as income, growth or tax savings. An investor can choose a

fund that has investment objectives in line with his objectives. Therefore, funds

provide the investor with a vehicle to attain his objectives in a planned manner.

Mutual funds offerLiquidity through listing on stock exchanges (for closed

end funds) and repurchase options (for open-end funds). In case of Direct

Equity Investing, several stocks are often not traded for long periods. While

some closed end funds may not be traded frequently, they are nevertheless

more liquid than many stocks. In any case, all funds provide one of the two

avenues for liquidity.

Direct Equity Investing involves a high level ofTransaction Costsper rupee

invested in the form of brokerage, commissions, stamp duty, etc. While Mutual

Funds charge a management fee, they succeed in keeping transaction costs

under control because of the economies of scale they enjoy.

In term of Convenience, Mutual Funds score over Direct Equity Investing.

Funds serve investors not only through their investor services networks, butalso through associates such as banks and other distributors. Many funds allow

investors the flexibility to switch between schemes within a family of funds.

They also offer facilities such as cheque writing and accumulation plans. These

benefits are not matched by Direct Equity Investing.


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OBJECTIVE


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The objectives of the survey

1) T o study the performance of Reliance mutual fund.

2) To study the growth of Mutual fund industry in India.

3) To study the concept of mutual fund.

4) How effectively company is reaching their customer needs.

5) To study the investors perception about investing in the Mutual Funds.


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RESEARCHMETHODOLOGY


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Research methodology:

Research methodology is a way to systematically solve the research problem. It may be

understood as a science of studying how research is done scientifically. One can also

define research as a scientific and systematic search for pertinent information on a

specific topic.

Problem statement

In this project an attempt to study and analyze the relationship between the characteristics

of Mutual Funds as an Investment Vehicle and the Investment Behavior of the Investors.

To study and find out the maximum information that we can get, we need a research

design or a plan in advance of data collection and analysis for our project. Research

design in fact, has a great bearing on the reliability of the results.

A good design is often characterized by adjectives like flexibility, appropriate, efficient

and economical & so on. Generally, the design that minimizes bias and maximizes the

reliability of the data collected and analyzed is considered as a good deign. Similarly, a

design which yields maximal information and provides an opportunity many different

aspects of a problem is considered most appropriate and efficient design in respect of

many research problems.

Research design:

Research design facilitates the smooth sailing of the various research operations, thereby

making the research as efficient as possible, yielding maximal information with minimal

expenditure of efforts.

Sampling Design

(1) Type of Universe : The first step in developing any sample design is to clearly

define the set of objects, technically called the Universe, to be studied. The

Universe for this Project was the Investors in the City of Pune.


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(2) Sampling Unit : The sampling unit for this Project was the Investors working in

the business areas, employees, students.

(3) Size of Sample : Due to the time, the Sample size was restricted to 30 Investors.

(4) Period of Study : The Project Study was conducted in the time period of two

months i.e., from June 1st to July 31st, 2008.

Collection of Data:

The methods used for the collection of Data were:

(1) The Interview Technique

(2) The Observation Method

DATA SOURCES

After identifying and defining the research problem and determining specific information

required solving the problem, the researcher task is to look for the type and sources of the

data, which may yield the desired results. There are two types of data available to

researcher, these are

1. Primary Data.

2. Secondary Data.

Primary Data are generated when particular problem in hand is investigated by

researcher employing a mail questionnaire, telephonic surveys and personal interview.

Secondary Data on the other handincludes that data which is collected from some

earlier research work and is applicable or usable in the study, the researcher has presently

undertaken.


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COMPANY

PROFILE


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About Reliance Money

Reliance Money is a group company of Reliance Capital; one of India's leading and

fastest growing private sector financial services companies, ranking among the top 3

private sector financial services and banking companies, in terms of net worth. Reliance

Capital is a part of the Reliance Anil Dhirubhai Ambani Group. Reliance Money which

commenced commercial operations in April 2007 has over 300,000 customers and 4,300

outlets in more than 3,500 locations across India. Reliance Money is a comprehensive

electronic transaction platform offering a wide range of asset classes. Its endeavor is to

change the way India transacts in financial markets and avails financial services. Reliance

Money is a single window, enabling you to access, amongst others in Equities, Equity &

Commodities Derivatives, Mutual Funds, IPOs, and Life & General Insurance products,

Offshore Investments, Money Transfer, Money Changing and Credit Cards.

Reliance Mutual Fund (RMF)

Reliance Mutual Fund (RMF), a part of the Reliance - Anil Dhirubhai Ambani Group, is

India's leading Mutual Fund, with Assets Under Management of Rs. 77,765 crores (AUM

as on 30th November 2007), and an investor base of over 4.2 million. Reliance Mutual

Fund is one of the fastest growing mutual funds in the country. Reliance Mutual Fund

offers investors a well-rounded portfolio of products to meet varying investor

requirements. Reliance Mutual Fund has a presence in 300 cities across the country and

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 Mutual Fund (RMF) is one of Indias leading Mutual Funds, with Average

Assets Under Management (AAUM) of Rs. 90,813.45 Crores (AAUM for June 30th 08 )

and an investor base of over 67.39 Lakhs. 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

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


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

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. Reliance Mutual Fund (RMF) is one of Indias

leading Mutual Funds, with Average Assets Under Management (AAUM) of Rs.90,

813.45 Crores (AAUM for June 30th 08) and an investor base of over 67.39 Lakhs.

Reliance Capital Ltd. has interests in asset management, life and general insurance,

private equity and proprietary investments, stock broking and other financial services.

Statutory Details:

Sponsor: Reliance Capital Limited.

Trustee: Reliance Capital Trustee Co. Limited.

Investment Manager: Reliance Capital Asset Management Limited. The Sponsor, the

Trustee and the Investment Manager are incorporated under the Companies Act 1956

WANOWARIE RELIANCE MONEY LTD, SHOP NO G-23, GROUNDFLOOR, SACRED WORLD COMPLEX

WANOWARIE, PUNE, MAHARASHTRA. PIN-CODE:411040.Contact number : 020-30483143/44

Bhandarkar Road RELIANCE MONEY LTD, AMAR BUILDING,GROUND FLOOR, OPP. LORD SHRIKRISHNABANK, BHANDARKAR ROAD, PUNE - 411004,MAHARASHTRA.Contact number : 020-66207534 / 7535

VIMAN NAGAR RELIANCE MONEY LTD , SHOP NO 6 &7 SAI APEX

BLDG, VIMAN NAGAR, PUNE, MAHARASHTRA.PIN-CODE: 411032.Contact number : 020-30483281/83/84

Future of Mutual Funds in India


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By December 2004, Indian mutual fund industry reached Rs 1,50,537 crore. It is

estimated that by 2010 March-end, the total assets of all scheduled commercial banks

should be Rs 40,90,000 crore. The annual composite rate of growth is expected 13.4%

during the rest of the decade. In the last 5 years we have seen annual growth rate of 9%.

According to the current growth rate, by year 2010, mutual fund assets will be double.

Some facts for the growth of mutual funds in India

100% growth in the last 6 years.

Number of foreign AMC's are in the que to enter the Indian markets like FidelityInvestments, US based, with over US$1trillion assets under management

worldwide.

Our saving rate is over 23%, highest in the world. Only channelizing these

savings in mutual funds sector is required.

We have approximately 29 mutual funds, which is much less than US having

more than 800. There is a big scope for expansion.

'B' and 'C' class cities are growing rapidly. Today most of the mutual funds are

concentrating on the 'A' class cities. Soon they will find scope in the growing

cities.

Mutual fund can penetrate rural like the Indian insurance industry with simple and

limited products.

SEBI allowing the MF's to launch commodity mutual funds.

TYPES OF MUTUAL FUND SCHEMES


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By Structure

o Open - Ended Schemes

o Close - Ended Schemes

o Interval Schemes

By Investment Objective

o Growth Schemes

o Income Schemes

o Balanced Schemes

o Money Market Schemes

Other Schemes

o Tax Saving Schemes

o Special Schemes

Index Schemes

Sector Specific Schemes

BY STRUCTURE

Close-ended Fund/ Scheme:

A close-ended fund or scheme has a stipulated maturity period e.g. 5-7 years. The

fund is open for subscription only during a specified period at the time of launch

of the scheme. Investors can invest in the scheme at the time of the initial public

issue and thereafter they can buy or sell the units of the scheme on the stock

exchanges where the units are listed. In order to provide an exit route to the

investors, some close-ended funds give an option of selling back the units to the

mutual fund through periodic repurchase at NAV related prices. SEBI

Regulations stipulate that at least one of the two exit routes is provided to the

investor i.e. either repurchase facility or through listing on stock exchanges. These

mutual funds schemes disclose NAV generally on weekly basis.


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Growth / Equity Oriented Scheme:

The aim of growth funds is to provide capital appreciation over the medium to

long- term. Such schemes normally invest a major part of their corpus in equities.

Such funds have comparatively high risks. These schemes provide different

options to the investors like dividend option, capital appreciation, etc. and the

investors may choose an option depending on their preferences. The investors

must indicate the option in the application form. The mutual funds also allow the

investors to change the options at a later date. Growth schemes are good for

investors having a long-term outlook seeking appreciation over a period of time.

Interval Schemes:Interval Schemes are that scheme, which combines the features of open-ended and

close-ended schemes. The units may be traded on the stock exchange or may be

open for sale or redemption during pre-determined intervals at NAV related prices

BY NATURE:


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Equity fund:

These funds invest a maximum part of their corpus into equities holdings. The

structure of the fund may vary different for different schemes and the fund

managers outlook on different stocks. The Equity Funds are sub-classified

depending upon their investment objective, as follows :

Diversified Equity Funds

Mid-Cap Funds

Sector Specific Funds

Tax Savings Funds (ELSS)

Equity investments are meant for a longer time horizon, thus Equity funds rankhigh on the risk-return matrix.

Debt funds:

The objective of these Funds is to invest in debt papers. Government authorities,

private companies, banks and financial institutions are some of the major issuers

of debt papers. By investing in debt instruments, these funds ensure low risk and

provide stable income to the investors. Debt funds are further classified as :

Gilt Funds:

Invest their corpus in securities issued by Government, popularly known

as Government of India debt papers. These Funds carry zero Default risk

but are associated with Interest Rate risk. These schemes are safer as they

invest in papers backed by Government.

Income Funds:

Invest a major portion into various debt instruments such as bonds,corporate debentures and Government securities.

MIPs:

Invests maximum of their total corpus in debt instruments while they take

minimum exposure in equities. It gets benefit of both equity and debt


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market. These scheme ranks slightly high on the risk-return matrix when

compared with other debt schemes.

Short Term Plans (STPs):

Meant for investment horizon for three to six months. These fundsprimarily invest in short term papers like Certificate of Deposits (CDs)

and Commercial Papers (CPs). Some portion of the corpus is also invested

in corporate debentures.

Liquid Funds:

Also known as Money Market Schemes, These funds provide easy

liquidity and preservation of capital. These schemes invest in short-term

instruments like Treasury Bills, inter-bank call money market, CPs and

CDs. These funds are meant for short-term cash management of corporate

houses and are meant for an investment horizon of 1day to 3 months.

These schemes rank low on risk-return matrix and are considered to be the

safest amongst all categories of mutual funds.

Balanced funds:

As the name suggest they, are a mix of both equity and debt funds. They invest in

both equities and fixed income securities, which are in line with pre-defined

investment objective of the scheme. These schemes aim to provide investors with

the best of both the worlds. Equity part provides growth and the debt part

provides stability in returns.

BY INVESTMENT OBJECTIVE:

Growth Schemes

Growth Schemes are also known as equity schemes. The aim of these schemes is to

provide capital appreciation over medium to long term. These schemes normally

invest a major part of their fund in equities and are willing to bear short-term decline

in value for possible future appreciation.

Income Schemes


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Income Schemes are also known as debt schemes. The aim of these schemes is to

provide regular and steady income to investors. These schemes generally invest in

fixed income securities such as bonds and corporate debentures. Capital appreciation

in such schemes may be limited.

Balanced Schemes

Balanced Schemes aim to provide both growth and income by periodically

distributing a part of the income and capital gains they earn. These schemes invest

in both shares and fixed income securities, in the proportion indicated in their

offer documents (normally 50:50).

Money Market Schemes

Money Market Schemes aim to provide easy liquidity, preservation of capital and

moderate income. These schemes generally invest in safer, short-term

instruments, such as treasury bills, certificates of deposit, commercial paper and

inter-bank call money.

OTHER SCHEMES

Tax Saving Schemes:

Tax-saving schemes offer tax rebates to the investors under tax laws prescribed

from time to time. Under Sec.88 of the Income Tax Act, contributions made to

any Equity Linked Savings Scheme (ELSS) are eligible for rebate.

Index Schemes:Index schemes attempt to replicate the performance of a particular index such as

the BSE Sensex or the NSE 50. The portfolio of these schemes will consist of

only those stocks that constitute the index. The percentage of each stock to the

total holding will be identical to the stocks index weightage. And hence, the


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returns from such schemes would be more or less equivalent to those of the Index.

Sector Specific Schemes:

These are the funds/schemes, which invest in the securities of only those sectorsor industries as specified in the offer documents. e.g. Pharmaceuticals, Software,

Fast Moving Consumer Goods (FMCG), Petroleum stocks, etc. The returns in

these funds are dependent on the performance of the respective sectors/industries.

While these funds may give higher returns, they are more risky compared to

diversified funds. Investors need to keep a watch on the performance of those

sectors/industries and must exit at an appropriate time.

Advantages of Mutual Funds

Professional Management - The basic advantage of funds is that, they are

professional managed, by well-qualified professional. Investors purchase funds

because they do not have the time or the expertise to manage their own portfolio.


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A mutual fund is considered to be relatively less expensive way to make and

monitor their investments.

Diversification purchasing units in a mutual fund instead of buying

individual stocks or bonds, the investors risk is spread out and minimized up tocertain extent. The idea behind diversification is to invest in a large number of

assets so that a loss in any particular investment is minimized by gains in others.

Economies of Scale - Mutual fund buy and sell large amounts of securities at

a time, thus help to reducing transaction costs, and help to bring down the average

cost of the unit for their investors.

Liquidity - Just like an individual stock, mutual fund also allows investors to

liquidate their holdings as and when they want.

Simplicity Investments in mutual fund is considered to be easy, compare to

other available instruments in the market, and the minimum investment is small.

Most AMC also have automatic purchase plans whereby as little as Rs. 2000,

where SIP start with just Rs.50 per month basis.

Regulatory oversight: Mutual funds are subject to many government

regulations that protect investors from fraud.

Disadvantages of Mutual FundsMutual funds have their drawbacks and may not be for everyone:

No Guarantees:No investment is risk free. If the entire stock market declines

in value, the value of mutual fund shares will go down as well, no matter how

balanced the portfolio. Investors encounter fewer risks when they invest in mutual


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funds than when they buy and sell stocks on their own. However, anyone who

invests through a mutual fund runs the risk of losing money.

Fees and commissions: All funds charge administrative fees to cover their

day-to-day expenses. Some funds also charge sales commissions or "loads" to

compensate brokers, financial consultants, or financial planners. Even if you don't

use a broker or other financial adviser, you will pay a sales commission if you buy

shares in a Load Fund.

Taxes: During a typical year, most actively managed mutual funds sell anywhere

from 20 to 70 percent of the securities in their portfolios. If your fund makes a

profit on its sales, you will pay taxes on the income you receive, even if you

reinvest the money you made.

Management risk:When you invest in a mutual fund, you depend on the

fund's manager to make the right decisions regarding the fund's portfolio. If the

manager does not perform as well as you had hoped, you might not make as much

money on your investment as you expected. Of course, if you invest in Index

Funds, you forego management risk, because these funds do not employ

managers.


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CONCLUSION

Mutual Funds: Conclusion:

I would like to conclude that, it is immense learning experience while preparing theproject. To state on the concluding for the mutual funds, it can be said that Mutual fundsare method for investors to diversify risk and to benefit from professional moneymanagement.

A mutual fund brings together a group of people and invests their money in stocks,bonds, and other securities.
http://terms/m/mutualfund.asphttp://terms/m/mutualfund.asp


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The advantages of mutuals are professional management,diversification, economies ofscale, simplicity and liquidity.

The disadvantages of mutuals are high costs, over-diversification, possible taxconsequences, and the inability of management to guarantee a superior return.

Mutual funds have lots of costs.Costs can be broken down into ongoing fees (represented by the expense ratio) andtransaction fees (loads).The biggest problems with mutual funds are their costs and fees.

Mutual funds are easy to buy and sell. You can either buy them directly from the fundcompany or through a third party.

It is clear that investing through Mutual Funds is far superior to Direct Equity Investing

except perhaps for the investor who has truly large portfolio and the time, knowledge and

resources required for direct investing.

1 Equity/Growth Schemes

The aim of growth funds is to provide capital appreciation over the medium to long-

term. Such schemes normally invest a major part of their corpus in equities. Such funds

have comparatively high risks. These schemes provide different options to the investors

like dividend option, capital appreciation, etc. and the investors may choose an option

depending on their preferences. The investors must indicate the option in the application
http://terms/d/diversification.asphttp://terms/d/diversification.asphttp://terms/e/economiesofscale.asphttp://terms/e/economiesofscale.asphttp://terms/e/expenseratio.asphttp://terms/l/loadfund.asphttp://terms/d/diversification.asphttp://terms/e/economiesofscale.asphttp://terms/e/economiesofscale.asphttp://terms/e/expenseratio.asphttp://terms/l/loadfund.asp


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form. The mutual funds also allow the investors to change the options at a later date.

Growth schemes are good for investors having a long-term outlook seeking appreciation

over a period of time.

Reliance Natural Resources Fund :

(An Open Ended Equity Scheme) The primary investment objective of the scheme is to

seek to generate capital appreciation & provide long-term growth opportunities by

investing in companies principally engaged in the discovery, development, production, or

distribution of natural resources and the secondary objective is to generate consistent

returns by investing in debt and money market securities.

Reliance Equity Fund:

(An open-ended diversified Equity Scheme.) 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 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.

Reliance Tax Saver (ELSS) Fund :

(An Open-ended Equity Linked Savings Scheme.) 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.

Reliance Equity Opportunities Fund :

(An Open-Ended Diversified Equity Scheme.) The primary investment objective of the


opportunities by investing in a portfolio constituted of equity securities & equity related

securities and the secondary objective is to generate consistent returns by investing in

debt and money market securities.


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Reliance Vision Fund :

(An Open-ended Equity Growth Scheme.) The primary investment objective of the

Scheme is to achieve long term growth of capital by investment in equity and equity

related securities through a research based investment approach.

Reliance Growth Fund :

(An Open-ended Equity Growth Scheme.) The primary investment objective of the

Scheme is to achieve long term growth of capital by investment in equity and equity

related securities through a research based investment approach.

Reliance Index Fund:

(An Open Ended Index Linked Scheme.) The Investment Objective under the Nifty 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 Nifty. The Investment Objective under

the Sensex 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 Sensex.

Reliance NRI Equity Fund:

(An open-ended Diversified Equity Scheme.) The Primary investment objective of the

scheme is to generate optimal returns by investing in equity or equity related instruments

primarily drawn from the Companies in the BSE 200 Index.

Reliance Regular Savings Fund:

(An Open-ended Scheme.) 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 Securities.

Balanced Option: The primary investment objective of this option is to generate

consistent returns and appreciation of capital by investing in mix of securities comprising

of equity, equity related instruments & fixed income instruments.


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Reliance Long Term Equity Fund:

(An close-ended Diversified Equity Scheme.) The primary investment objective of the

scheme is to seek to generate long term capital appreciation & provide long-term growth

opportunities by investing in a portfolio constituted of equity & equity related securities

and Derivatives and the secondary objective is to generate consistent returns by investing

in debt and money market securities.

Reliance Equity Advantage Fund:

(An open-ended Diversified Equity Scheme.) The primary investment objective of the


opportunities by investing in a portfolio predominantly of equity & equity related

instruments with investments generally in S & P CNX Nifty stocks and the secondary

objective is to generate consistent returns by investing in debt and money market

securities.

2 Debt/Income Schemes

The aim of income funds is to provide regular and steady income to investors. Such

schemes generally invest in fixed income securities such as bonds, corporate debentures,

Government securities and money market instruments. Such funds are less risky

compared to equity schemes. These funds are not affected because of fluctuations in

equity markets. However, opportunities of capital appreciation are also limited in such

funds. The NAVs of such funds are affected because of change in interest rates in the

country. If the interest rates fall, NAVs of such funds are likely to increase in the short

run and vice versa. However, long term investors may not bother about these fluctuations.

Reliance Monthly Income Plan :

(An Open Ended Fund. Monthly Income is not assured & is subject to the availability of

distributable surplus ) The Primary investment objective of the Scheme is to generate

regular income in order to make regular dividend payments to unit holders and the

secondary objective is growth of capital.


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Reliance Gilt Securities Fund - Short Term Gilt Plan & Long Term Gilt

Plan:

Open-ended Government Securities Scheme) The primary objective of the Scheme is togenerate Optimal credit risk-free returns by investing in a portfolio of securities issued

and guaranteed by the central Government and State Government

Reliance Income Fund :

(An Open-ended Income Scheme) 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.

Reliance Medium Term Fund:

(An Open End Income Scheme with no assured returns.) The primary investment

objective of the Scheme is to generate regular income in order to make regular dividend

payments to unit holders and the secondary objective is growth of capital

Reliance Short Term Fund:

(An Open End Income Scheme) The primary investment objective of the scheme is to

generate stable returns for investors with a short investment horizon by investing in Fixed

Income Securities of short term maturity.

Reliance Liquid Fund :

(Open-ended Liquid Scheme). The primary investment objective of 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.

Reliance Floating Rate Fund :


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(An Open End Liquid Scheme) The primary objective of the scheme is to generate

regular income through investment 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 Market Instruments and Floating Rate Debt Instruments swapped for fixed

returns

Reliance NRI Income Fund :

(An Open-ended Income scheme) 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.

Reliance Liquidity Fund:

(An Open - ended Liquid Scheme) The investment objective of 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.

Reliance Interval Fund

(A Debt Oriented Interval Scheme) The primary investment objective of the scheme is to

seek to generate regular returns and growth of capital by investing in a diversified

portfolio

Reliance Liquid plus Fund(An Open-ended Income Scheme.) 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.


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Reliance Fixed Horizon Fund -I

(A closed ended Scheme) The primary investment objective of the scheme is to seek to

generate regular returns and growth of capital by investing in a diversified portfolio.

Reliance Fixed Horizon Fund -II

(An closed ended Scheme.) The primary investment objective of the scheme is to seek to


Reliance Fixed Horizon Fund -III

(An Close-ended Income Scheme.) The primary investment objective of the scheme is toseek to generate regular returns and growth of capital by investing in a diversified

portfolio

Reliance Fixed Tenor Fund

(An Close-ended Scheme.) The primary investment objective of the Plan is to seek to


Reliance Fixed Horizon Fund -Plan C

(An closed ended Scheme.) The primary investment objective of the scheme is to seek to


Reliance Fixed Horizon Fund - IV:

(An Close-ended Income Scheme.) The primary investment objective of the scheme is to


portfolio


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Reliance Fixed Horizon Fund - V:

(A Close-ended Income Scheme.) The primary investment objective of the scheme is to


portfolio of: -

Central and State Government securities and

other fixed income/ debt securities normally maturing in line with the time profile of the

scheme with the objective of limiting interest rate volatility

Reliance Fixed Horizon Fund - VI:

(A Close-ended Income Scheme.) The primary investment objective of the scheme is to


portfolio of: -



series with the objective of limiting interest rate volatility

Reliance Fixed Horizon Fund - VII:

(An Close-ended Income Scheme.) The primary investment objective of the scheme is to


portfolio of: -



series with the objective of limiting interest rate volatility.

3 Sector Specific Schemes

These are the funds/schemes which invest in the securities of only those sectors or

industries as specified in the offer documents. E.g. Pharmaceuticals, Software, Fast


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Moving Consumer Goods (FMCG), Petroleum stocks, etc. The returns in these funds are

dependent on the performance of the respective sectors/industries. While these funds may

give higher returns, they are more risky compared to diversified funds. Investors need to

keep a watch on the performance of those sectors/industries and must exit at an

appropriate time. They may also seek advice of an expert.

Reliance Banking Fund

Reliance Mutual Fund has an Open-Ended Banking Sector Scheme which has the

primary investment objective to generate continuous returns by actively investing in

equity / equity related or fixed income securities of banks.

Reliance Diversified Power Sector Fund

Reliance Diversified Power Sector Scheme is an Open-ended Power Sector Scheme.

The primary investment objective of the Scheme is to seek to generate consistent returns

by actively investing in equity / equity related or fixed income securities of Power and

other associated companies.

Reliance Pharma Fund

Reliance Pharma Fund is an Open-ended Pharma Sector Scheme.

The primary investment objective of the Scheme is to generate consistent returns by

investing in equity / equity related or fixed income securities of Pharma and other

associated companies.

Reliance Media & Entertainment FundReliance Media & Entertainment Fund is an Open-ended Media & Entertainment sector

scheme.

The primary investment objective of the Scheme is to generate consistent returns by

investing in equity / equity related or fixed income securities of media & entertainment

and other associated companies


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4 Exchange Traded Fund

Reliance Gold Exchange Traded Fund:(An open-ended Gold Exchange Traded Fund) The investment objective is to seek to

provide returns that closely correspond to returns provided by price of gold through

investment in physical Gold (and Gold related securities as permitted by Regulators from

time to time). However, the performance of the scheme may differ from that of the

domestic prices of Gold due to expenses and or other related factors.

What Are NAVs

The net asset value of the fund is the cumulative market value of the assets fund net of its

liabilities. In other words, if the fund is dissolved or liquidated, by selling off all the

assets in the fund, this is the amount that the shareholders would collectively own.

Net Asset Value (NAV) is the actual value of one unit of a given scheme for a given


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business day.

Units in the schemes are allotted on the basis of the Sale Price, which is calculated as

follows:

Sale Price= NAV *(1+ Entry Load)

Units in the schemes are repurchased on the basis of Repurchase Price, which is

calculated as follows:

Repurchase Price= NAV *(1- Exit Load)


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LIMITATIONS

Limitations

Though the report has been given the insight to the various mutual fund schmes but it

cannot be said fully relevant because of some limitations:

It is difficult to get full insight of how fund managers have deployed their funds.


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Mutual fund industry performance is dependent on daily churning of portfolio and

NAV and the volatility of each funds change every day. The fund that is in

comparision doing better today may not perform well tomorrow and thus affects

the analysis process.

As of in these projects for the analysis purpose the concentration of only few

schmes of Reliance mutual fund. Remaining schmes of Reliance mutual fund

were not studied due to time limitation.


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RECOMMENDATION

Investors

Most of us spend more than half our lives working and saving because money is

important, in fact crucial. However, most of us spend almost no time planning to make

that hard-earned money work more effectively for us. So, how do you plan your financial

life? Here are some suggestions that will help you, the Investors, to make Investment

Decisions that will lead to more fruitful results


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(A) Put your house (Financial Profile) in order

Financial planning does not begin at investing, but instead at reviewing your overall

financial profile. You need to address the following issues before rushing to build an

investment portfolio.

(i) Insure your health, life and assets

You should start your financial planning by taking steps to protect your familys current

lifestyle from events and expenses that are not in your control. You can achieve this by

buying appropriate insurance policies for your medical expenses, life, car, and other

important assets.

(ii) Repay your high-cost loans

A rupee saved is a rupee earned. Paying your credit card bills on time can save you more

money in interest costs than most of your investments could earn you. This is also true of

borrowings that cost you more than 15% per annum (after adjusting for any tax benefits).

So, invest in repaying your high-cost loans first before you start building your investment

portfolio.

(iii) Put aside money for emergencies

Deploy some money in short-term investments that can be encashed on demand to help

you tide over unforeseen needs and emergencies.

(iv) Draw up a savings plan


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Income - Expenditure = Savings

You don't want this equation to be left to chance; it is strongly recommended that you

make a savings plan. Under your savings plan you should put away as much as you can,

as regularly as you can, with the aim to save at least 15% of your take home annual

income. Depending on your financial commitments, you may be able to save more or

less. It doesn't matter, as long as you are saving something.

RELIANCE TAX SAVER FUND(ELSS)

Performance as on 30/06/2008

Absolute Compound Annualized

6 months 1 Year Since Inception

Reliance Tax Saver (ELSS) Fund -

Growth -41.41

-20.50 7.57


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BSE100 -36.49 -7.53 18.89

Scheme Features

Type : An Open-ended Equity Linked Savings Scheme.

Investment Pattern :

80-100% in equity and equity related securities.

Upto 20% in Debt and Money Market Instruments.

Investment Objective :

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.

Net Asset Value : Calculated & declared every working day

Plans / Options :

Growth Option

Dividend Pay-out Option & Dividend Reinvestment Option

Entry Load

For Subscription below Rs.2 crores 2.25%

For Subscription of Rs.2 crores &Above but below Rs. 5 crores

1.25%

For Subscriptions of Rs.5 crore & Nil

Exit Load : Nil

Inter-Scheme Switch :

Unitholders will have the flexibility to alter the allocation of their investments among the


59/83

scheme(s) offered by the Mutual Fund, in order to suit their changing investment needs,

by easily switching between all the scheme(s)/plans/options of the Mutual Fund, after the

statutory lock-in period of 3 Years. No load applicable for switches between the equity

schemes. However, differential load shall be charged for switching from Reliance Index

Fund and switching to Reliance NRI Equity Fund.

Inter Plan/Inter Option Switch :

Unitholders will have the flexibility to alter the allocation of their investments among the

scheme(s) offered by the Mutual Fund, in order to suit their changing investment needs,

by easily switching between all the scheme (s)/plans/options of the Mutual Fund, after the

statutory lock-in period of 3 Years.

Recurring Expenses :

AMC Fees 1.25%

Operational Expenses 0.25 %

Marketing Expenses 1.00 %Total 2.50%

Reliance Pharma Fund (Bonus)

Asset Size (Cr.) Fund Mngr Launch Date Min. Inv Inc. Inv(Rs.)

121.56 Sailesh Raj Bhan May 10, 2004 5000.00 1

Latest Information

Scheme Details


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Date NAV (Rs.)

31 Jul 2008 23.2480

28 Jul 2008 23.0638

15 Jul 2008 21.46301 Jul 2008 21.5824

20 Jun 2008 23.3599

Sectorial Allocation

Sector Assests (%) Value (Rs. /Cr.)

Pharma 96.11 133.59

Debt 3.89 5.40

Asset Allocation

Equity 93.63

Debt 0

Return Summary

Scheme Name 3MONTH 6MONTH 1YEAR

Reliance -0.94 5.33 -0.81

Nifty -2.26 -12.68 23.66

Sensex -3.40 -11.49 23.41

Scheme Portfolio


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Company % of Inv Inv Amt

Divi's Lab 14.45 17.57

Cipla 8.83 10.73

Fulford (Ind 8.07 9.81Ranbaxy Labs. 7.17 8.72

Aventis Phar 6.71 8.16



6 months 1 Year 3 Years Since Inception

Reliance Pharma Fund - Growth 2.4 -11.26 16.73 22.54

BSE-HC 15.5 11.9 12.8 16.05

Scheme Features

Type : An Open-ended Pharma Sector Scheme.


Types of InstrumentsAsset Allocation

(% of Net Assets)

Minimum Most

Likely

Maximum

Equity and Equity related Securities 0% 80% 100%

Debt and Money market Instruments with average

Maturity of 5 to 10 years.

0% 20% 100%

Investment Objective :

The primary investment objective of the Scheme is to generate consistent returns byinvesting in equity / equity related or fixed income securities of Pharma and otherassociated companies.


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Net Asset Value : Calculated & declared every day

Plans / Options :

Growth Plan :o Growth Option

o Bonus Option

Dividend Plan :o Dividend (Pay-out) Option

o Dividend (Reinvestment) Option

Entry (Sales) Load :

For Subscriptions Below Rs. 2 crores - 2.25%For Subscriptions of Rs. 2 crores and above and below Rs. 5 crores - 1.25%For Subscriptions of Rs. 5 crores and above - NIL

Inter-Scheme Switch :

At the applicable loads on the respective schemes. No load applicable for switchesbetween the equity /sector specific schemes and Reliance Pharma Fund and vice-versaexcept Reliance NRI Equity Fund.

Inter Plan/Inter Option Switch : Nil

Exit Load :

For Retail Plan for subscriptions of less than Rs 5 Crs per purchase transaction:1% if redeemed/switched on or before completion of 1 year from the date of allotment:nil if redeemed/switched after completion of 1 year from the date of allotment Forsubscriptions of more than Rs 5 Crs per purchase transaction: Nil

Switching Option :

Investors may opt to switch Units between the Dividend Plan and Growth Plan of theScheme at NAV based prices after completion of lock in period, if any. Switching willalso be allowed into/from any other eligible open-ended Schemes of the Fund either

currently in existence or a Scheme (s) that may be launched / managed in future, as perthe features of the respective scheme.


Investment Management Expenses 1.25%

Operational Expenses 0.75%


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Marketing Expenses

0.25%

Total 2.25%

1 Year NAV Chart

Reliance Banking Fund - (Bonus)

Scheme Details

Asset Size (Cr.) Fund Mngr Launch Date Min. Inv Inc. Inv(Rs.)788.12 Sunil Singhania May 08, 2003 5000.00 1

Previous NAV

Date NAV (Rs.)

31 Jul 2008 47.528428 Jul 2008 48.749018 Jul 2008 44.93411 Jul 2008 40.239920 June2008 46.8400

Sectorial Allocation

Sector Assests(%) Value(Rs./Cr.)


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Banking & 79.36 745.05Others 20.64 193.77

Asset AllocationEquity 83.16

Debt 0

Return SummaryScheme Name3MONTH6MONTH1YEARReliance -13.37 -23.11 5.65Nifty -2.26 -12.68 23.66Sensex -3.40 -11.49 23.41

Scheme Portfolio

Company % of Inv Inv Amt

Cash & Bank 16.84 132.72St Bk of Ind 15.87 125.07ICICI Bank 10.64 83.86Pun. Natl. B 7.27 57.30Bank of Baro 6.43 50.68



6 months 1 Year 3 Years Since Inception

Reliance Banking Fund - Growth -25.09 -3.27 15.73 34.95

S&P CNX Banks Index -38.62 -14.55 10.06 28.37

Scheme Features

Type : An open-ended banking sector scheme.

Investment Pattern : Asset Allocation Pattern of the Scheme :

Types of Instruments Normal Allocation (% of Net Assets)

Equity & Equity related securities 0 - 100 %

Debt & Money Market Instruments

0 - 100 %

Investment Objective :The primary investment objective of the Scheme is to seek to generate continuous returns by actively investing in equity / equity related orfixed income securities of banks.

Net Asset Value : Calculated & declared every day


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Plans / Options :

Growth Plan :

o Growth Option

o Bonus Option

Dividend Plan :

o Dividend Pay-out Option

o Dividend Reinvestment Option

Application Amount : Rs.5,000/- for Resident Indians and Non-Resident Indians and in multiples of Rs.1/- thereafter for both plans.

Min. Additional Investment : Rs.1000/- and in multiples of Rs.1/- , thereafter for both plans.

Portfolio Disclosures : Half-yearly

Entry Load :For Subscription below Rs. 2 crs - 2.25%For subscription of Rs. 2 crs & above and below Rs. 5 crs - 1.25%For Subscription of Rs 5 crs & above - Nil

Exit Load :

Contingent Deferred Sales Charge : NilFor Retail Plan for subscriptions of less than Rs 5 Crs per purchase transaction:1% if redeemed/switched on or before completion of 1 year from the date of allotment:nil if redeemed/switched after completion of 1 year from the date of allotment For subscriptions of more than Rs 5 Crs per purchasetransaction: Nil

For Institutional Plan - Nil

Inter-Scheme Switch :At the applicable loads in the respective scheme/s. No load applicable for switches between the equity/sector specific schemes andReliance Banking Fund and vice-versa except Reliance NRI Equity Fund.

Inter Plan/Inter Option Switch : Nil

Redemption Cheques Issued : Mutual fund shall endeavour to issue within 3 Working days

Minimum Redemption Amount :Any amount

Recurring Investment Plan (RIP) : Available

Regular investment option for corporate employees(RICE) : Available

Regular withdrawal Plan (RWP) : Available

Trigger Facility : Value & NAV Trigger to introduce a Stop loss or a Gain Cap.

Switch Facility :Available.

Systematic Transfer Plan / Dividend Transfer Plan : Available

Nomination Facility : Available

Mode of Holding : Single, Joint or Anyone or Survivor

Benchmark Index : S & P CNX Banks Index

Switching Option :Investors may opt to switch Units between the Dividend Plan and Growth Plan of the Scheme at NAV based prices after completion of lockin period, if any. Switching will also be allowed into/from any other eligible open-ended Schemes of the Fund either currently in existence ora Scheme (s) that may be launched / managed in future, as per the features of the respective scheme.


Investment Management Expenses 1.25%

Operational Expenses 0.75%

Marketing Expenses

0.25%


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Total 2.25%

1 Year NAV Chart


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Summary of Reliance Gilt Securities Fund - Short Term & Long Term Gilt Plans

Type : An Open-ended Government Securities Scheme


Types of Instruments Allocation (% of Net Assets)

Short Term Gilt Plan

Gilts 65 - 100%

Money Market Instruments 0 - 35%

Long-Term Gilt Plan

Gilts 70 - 100%

Money Market Instruments 0 - 30%

Investment Objective :The primary objective of the Scheme is to generate Optimal credit risk-free returns by investing in a portfolio of securities issued andguaranteed by the Central Government and State Government.

Net Asset Value : Calculated on daily basis

Choice of Plans :Short Term Gilt Plan

Plan Option

Retail Plan Growth option

Application Amount :Rs.100,000 and in multiples of Rs.1 thereafter for all Options under the Retail Plan of Short Term Gilt Plan and Long Term Gilt Plan.

Min. Additional Investment :Rs.1000 and in multiples of Rs.1 thereafter, for all Options under the Retail Plan of Short Term Gilt Plan and Long Term Gilt Plan.

Portfolio Disclosures : Half-yearly

Entry Load : NILLong Term 0.0 %

Long Term PF Option 0.0 %

Short Term 0.0 %

Exit Load :

Long Term (Retail Option) 0.0 %

Long Term PF Option 0.8 %

Short Term 0.0 %

Contingent Deferred Sales Charge : Nil

Inter-Scheme Switch : Available at applicable loads in the respective schemes.

Inter Plan/ Inter Option Switch : No Load for inter plan or inter option switch

Redemption Cheques Issued : Mutual Fund shall endeavour to issue within 1 working day

Minimum Redemption Amount : Any amount or any number of units

Cut off time : 3:00 p.m. on working days as defined in the Offer Document

Facilities Available :

Systematic Transfer Plan

Dividend Transfer Plan

Switch Facility

Nomination Facility


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Mode of Holding : Single, Joint or Anyone or Survivor

Benchmark Index :Short Term Gilt Plan: I Sec - Si BexLong Term Gilt Plan: I Sec - Li Bex

Switching Option :Investors may opt to switch Units between the plan and/or options under the plan of the Scheme at NAV based prices after completion oflock in period, if any. Switching will also be allowed into/from any other eligible open-ended Schemes of the Fund either currently inexistence or a Scheme (s) that may be launched / managed in future, as per the features of the respective scheme.

Recurring Expenses :Investment Management Expenses 0.25 %

Operational Expenses 0.20 %

Marketing Expenses 0.80 %

Total 1.25%

rformance as on 31/07/2008


6 months 1 Year 3 Years 5 Yrs Since Inception

ance G Sec Fund - LTP - Retail - Growth -2.98 4.56 5.34 6.56 6.54

c Li-BEX -9.17 -3.44 2.97 3.11 3.27



6 months 1 Year 3 Years 5 years Since Inception

ance G Sec Fund - STP - Retail - Growth 0.8 2.95 4.29 4 4.05

c Si-BEX 1.96 5.33 6.33 5.67 5.7

Year NAV Chart

NAV Performance as on 31/07/2008

Absolute Absolute

6 months Since Inception

ance Gold Exchange Traded Fund 5.7 20.44

es of Gold 5.48 22.31

Exchange Traded FundsETFs as they are called

Exchange Traded Funds are usually passively managed mutual fund schemes tracking a benchmark index and reflect the performance ofthat index. These schemes are listed on the stock exchange and therefore have the flexibility of trading like a share on the stock exchange.It can also be looked as a security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on anexchange, thus experiencing price changes throughout the day as it is bought and sold.

Introducing Reliance Gold Exchange Traded Fund. RGETF as they will be called

Reliance Gold Exchange Traded Fund (RGETF) is an open ended Gold Exchange Traded Fund which will track the performance of GoldBullion. The units issued under the scheme will represent the value of gold held in the scheme. It is designed to provide returns that, beforeexpenses, closely correspond to the returns provided by domestic price of Gold.


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Gold ETF is a security listed on the stock exchange available for trading with an intention to offer investors a means of participating in thegold bullion market without the necessity of taking physical delivery of gold.

Benefits of investing in Reliance Gold Exchange Traded Fund

Safety & Security

Zero concerns about physical security, theft or adulteration when faced with the tasks of custody and spot transactions.

Safeguard in the form of electronic mode in case of unforeseen circumstances where you have lost all the physical wealth

Long Term Commitments

A cost effective and convenient way to invest in gold through an instantaneous exposure to a physical asset viz gold. Forexample it can help accumulate gold for your daughters wedding

Transparency & Liquidity

Its units can be traded like a share and therefore it provides the ability to buy and sell them quickly at the ruling market price andtherefore highly liquid

Diversification

An efficient diversification for the portfolio of the investorM

Cost Effective

The expenses incurred in buying and selling units and the schemes ongoing expenses will be less than the costs associatedwith buying and selling of gold and storing and insuring gold bullion in a traditional gold bullion market.

Background on Gold & Exchange Traded Funds

World Scenario

India is the worlds largest gold consumer

Worldwide Consumption

Source : World Gold Council

Indian Scenario


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There is no doubt about the popularity & demand of gold in a country which exceeds 1000 tonnes of this metal.

They buy it for Jewellery, contingencies, gifting, wedding, mortgage requirement etc.

Gold has ritual, religious, sentimental values attached to it, so it cant be substituted and demand is more or less indispensable.However apart from Jewellery purpose one does not need it in a physical form.

The per capital gold consumption is 0.7 grams, half that of the US and one third of the Middle East that is likely to go up.

Source :www.reuters.com

Gold A Portfolio DiversifierGold Vs Sensex during different market cycles

Source : Bloomberg,www.bseindia.com

During different market cycles Gold as an asset class has been delivering consistent returns.

Debt Vs Gold prices during rising yields

Source : Bloomberg,

10 year bond yields rose from 4.97% in Oct 03 to 7.17% in Oct 05 to 8.11% in Apr 07 indicating a fall in debt marketreturns

During the period of Apr 03 to Apr 07 Gold gave a CAGR of 14.9%

Yields and prices of the bonds are inversely related. Therefore rise in yields would lead to lower prices & hence tend to reduce returns

Gold Hedge against US $
http://www.reuters.com/http://www.reuters.com/http://www.bseindia.com/http://www.bseindia.com/http://www.bseindia.com/http://www.reuters.com/http://www.bseindia.com/


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Source : Bloomberg

The above graph shows that Gold has an inverse relationship with US dollar indicating that Gold can act as a hedgeagainst dollar currency exposure.

With the dollar weakening & the growth slowing down in the US, investors are flocking back to Gold

Gold Vs Inflation

Source : BloombergThe above data of WPI & Gold prices ($ terms) are equated to 100 as on Jan 99

Rising oil prices, coupled with high liquidity, have contributed to a rise in inflationary pressures globally. Inflation,simply put, is erosion in the value of money and therefore in such times there is a strong case to move money into realassets such as gold.Gold has been an effective hedge against inflation. Historically higher inflation has led to higher gold prices.

Outlook on Gold

The return of positive investor sentiment, key external factors turning significantly price-positive, and an improvingsupply/demand balance drove gold prices over $700.

In an environment of expected slower US growth momentum, fed funds rate easing, a weakening dollar, rising oil prices andheightened geopolitical concerns, gold prices appear to be firmly supported in the months ahead.

Meanwhile, market conditions for gold-specific factors have now evolved unfavorably such that two price drivers have becomeless supportive. First, central bank sell

dhiraj project

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