1.1 Introduction of the Mutual fund Mutual fund units are investment vehicles that provide a means of participation in the stock market for people who have neither the time nor money not perhaps the expertise to undertake direct investment in equities successfully on another level, they also provide a route into specialist market where direct investment often demand both more time and more knowledge than an investor or his financial advisor may process.

The basic idea of mutual fund is simple. A large number of investors pool their money in order to obtain a spread of professionally managed stock exchange investment that they cannot obtain individually. The advantage is that the investor in a mutual fund is taking much more/less of a risk than a direct equity investor, because increase in the number of stocks held obviously reduces the effect that anyone stock can have to maintain benefits. It provides specialist investment expertise, which should ensure greater success than the inexperienced investor, can achieve on his own and it reduces the administrative burden of investment.

A Mutual Fund is divided into equal portfolios called units. The price of units is calculated regularly by the managers, rather than being determined by supply and

demand in the market. The price are quoted for units higher price being the price the investor pays to buy units, and the lower price he will receive for units sold back to the managers.

A mutual fund is a trust that pools the saving of a numbers of investors who shares and common financial goals. The money thus collected is then invested in capital market instruments such as shares debenture and other securities the income earned through these investment and the capital appreciation realized is shared by its unit holders in proportion to the no. of units own by them. Thus, mutual fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost.

1.2 MUTUAL FUND INVESTMENT CYCLE INVESTORSFUND MANAGERPool their money withInvest inSECURITIESRETURNS Generates Passed back toPool their money with

Pool their money with

From the above cycle it can be observe that how can the money from the investors flow and they get returns out of it. With a small amount of fund, investors pool their money with the fund manager. Taking into consideration the marketer strategy the fund manger invest this pool money into reliable securities. With up and down in market returns are generated and they are passed on to the investors. The above cycle should be very clear also and effective. The fund manger while investing on behalf of investors takes into consideration various Factors like time risk; return etc so that he can make proper investment decision.

1.3 HISTORY OF MUTUAL FUND IN INDIA

The mutual fund industry in india started in 1963 with the formation of Unit Trust of India, at the initive of the government of India and reserve Bank of India. The history can be brodly divided into four phases.

PHASE-1 1963-1987 UNIT TRUST OF INDIA An act of parliament established Unit Trust of india on 1963 it was set up by the reserve bank of India,and functional under the regulatory and administrative control of the RBI. The first scheme was launched by UIT unit scheme 1964.These scheme was also at least partially the the first open end scheme in the country. Now moving toward becoming fully open end. Later on, 1970 and 1980,UTI started innovating offering different classes of different scheme to suit the needs of different classes of different investors. Unit Linked Insurance Plans (ULIP) was launched in 1971. Six new scheme were introduced between 1981 & 1984.During 1984-87, new scheme like Childrens gift growth fund and Master Share were launched and also Monthly Income Plan scheme.

PHASE-2 1987-1993 ENTRY OF PUBLIC SECTOR FUNDS. In 1987 public sector bank and financial institution entered in mutual fund industry. Public sector mutual fund set up by public sector banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India. SBI mutual fund was the first non-UIT mutual fund established in june 1987. Most of the funda were growth oriented, closed ended funds. By the end of this period, assets under UTIs management grew to Rs.38247 crores and Public sector funds managed Rs. 8750 crores.

PHASE-3 1993-1996 ENTRY OF PRIVATE SECTOR FUNDS. A new era of mutual fund industry started with the entry of private sector fund in 1993, giving the Indians investors, a wider choice of fund families and increasing competition for the existing public sector fund. Also, 1993 was the year in the first Mutual Fund regulation came into being under which all mutual funds, except UTI were to be registered and governed. During the year 1993-94 five Private Sector Mutual Fund launched their scheme followed by other six.

PHASE-4 1996-2003 SEBI REGULATION FOR MUTUAL FUNDS. The implementation of the new SEBI regulation and the restructuring of the mutual fund industry late to rapid growth bank mutual fund were recast according to the SEBI recommended structure, and UTI became voluntary SEBI, supervision. 1999 makes the beginning of a new phase in the history of the mutual fund industry in India, a phase of significant growth in terms of both amount mobilized from investors and assets under management.

PHASE -5 2003 ONWARDS This phase was marked by very rapid growth in the industry, and significant increase in market shares of private sector players. In February 2003, following the repeal of the unit Trust of India Act 1963 was bifurcated into two separate entities. One is the specified undertakings of the Unit Trust of India with assets under management of Rs.29,835 corers as at the end of January 2003, representation broadly, the assets of unit scheme 1964, assured return and certain other schemes. The specified undertakings of UTI, functioning under an administrator and under the rules framed by the Government of India, and do not come under the purview of the Mutual Fund Regulation. 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 Regulation, with the bifurcation of the UTI which had in march 2000 more than Rs. 76000 corers of assets under management and with the setting up of a UIT Mutual Fund, Conforming to the SEBI Mutual Fund Regulation, and with recent mergers taking place among different private sector funds, the Mutual Fund Industry has entered its current phase of consolation and growth. As, at the end of sep. 2004, there were 29 funds, which manage assets of Rs. 153108 corers under 421 schemes

1.4 ORGANISATION STRUCTURE OF MUTUAL FUND

SEBI

Sponsor Trustee

AMCOperations

Fund Manager

MKT/Sales

MutualFund

Distributors

MKT/Sales

Schemes

Investors

The Mutual fund is set up in the form of a trust, which has sponsor, trustee, Asset Management Company (AMC) and custodian. The trust is established by a sponsor or more than one sponsor who is like promoter of the company. The trustee of the mutual fund holds its property for the benefit of the unit holders.AMC approved by SEBI managed the fund by making investment in various types of securities. A custodian, who is registered with SEBI, holds the securities of various schemes of the fund in its custody. The trustees are vested with the general power of superintendence and direction over AMC. They monitor the performance and compliance of SEBI regulations by the mutual fund. The structure of the mutual fund in India is governed by the SEBI Regulation 1996. These regulation make is mandatory for mutual fund to have a 3 tire structure of

SPONSORS-----TRUSTEES-----AMC

SEBI Like other countries, India has a legal framework within which MF must be constituted. Unlike in the UK, where two distinct Trust and corporation structures are followed with separate regulations. In India, open & closed funds operate under the same

regulatory structure, and are constituted along one unique structure as Unit Trust. A mutual fund in India is allowed to issue open and close ended schemes under a common legal structure. Therefore, mutual fund may have several different schemes under it. The structure which is required to be followed by MF in India is laid down under SEBI regulation 1996

SPONSORS:- Sponsors are the promoter of mutual fund and appoint the Trustee. The sponsors, either directly acting through the Trustees, will also appoints a custodian to hold the funds assets. All these appointment are made accordance with SEBI regulation. The sponsors will also generally appoint an Assets Managements company as Fund Managers.

TRUSTEES:- Trustees are responsible to the investors in the mutual fund and hold the mutual fund property for the benefit of unit holders. They are an independent authority set up under the aegis of SEBI. They are appointed by the AMC for managing the investment portfolio.

ASSET MANAGEMENT COMPANY:- AMC approved by it mange the funds by making investment in various type of instrument and securities. The role of AMC is to act as the Investment Manager of the trust. The trustees are empowered to terminate the appointment of the AMC by majority and new AMC with the prior approval of SEBI and unit holders. The AMC of a mutual fund must have a net worth of at least 10 corers at all times.

CUSTODIAN:- Custodian registered with SEBI, It holds the securities of various scheme of the fund in its custody. Its responsibilities include receipt and delivery of securities, collecting income distributing dividends, safe keeping of the units and safeguarding assets and settlement between schemes. Their charge range between 0.15-0.2 per. of the net value of the holding custodian cans more than one fund.

DISTRIBUTORS:- Distributor sells units on behalf of funds and is generally appointed by the AMC.

BANKERS:- Bankers are dealing with money for buy and sale of units, paying and receiving funds for investment, discharging obligations for operational expenses.

TRANSFER AGENT:-Transfer agents are used for issuing and redeeming units, preparation of transfer of documents, updating investor records, in house or external agency.

1.5 Types of Mutual Fund Scheme

By StructureOpen ended SchemesClose ended SchemesInterval SchemesBY INVESTMENT OBJECTIVEGrowth SchemesIncome schemesBalanced SchemesMoney market schemeOTHER SCHEMESTax saving schemesSpecial Schemes Index income Sector Schemes

Schemes according to Maturity period.

1. Open ended fund Schemes An open ended fund or scheme is one of that is available for subscription and repurchase on a continuous basis. These schemes do not have a fixed maturity period. The key feature of open end scheme is liquidity. Investors can conveniently buy & sell unit at net assets value related prices, which are declared on a daily basis. Most mutual fund scheme are open ended.

2. Close ended fund schemes

A close ended fund or scheme has stipulated Maturity periods e.g. 5-7 years. The fund is open for subscription only during a specified period at the time of launch. Generally, investors can invest in the scheme at the time of New Fund Offer (NFO) and thereafter they can buy or sell the unit of the schemes on the stock exchange where the unit may be listed. Occasionally, the mutual fund provides a repurchase option to investors for a specified offer.

Schemes according to investmentObjectives:- A scheme can also be classified as growth scheme, income scheme or balanced scheme considering its investment objective such scheme may be open ended or close ended scheme as described earlier. Such scheme may be classified mainly as follow:

1. Growth/Equity oriented schemeThe aim of growth fund is to provide capital appreciation over the medium to long term. Such scheme normally invests a major part of their corpus in equities. Such funds have comparatively high risks. These schemes provide different option to the investors like dividends option, capital appreciation etc... And the investors may choose an option depending on their preference. The investors must indicate the option in the application form. Growth schemes are good for investors having a long term outlooks seeking appreciation over a periods of time.

2. Income/Debt oriented scheme The aim of income funds is to provide regular and steady income to investor. Such schemes generally invest in fixed income securities such as bonds, corporate debentures, govt. securities and money market instrument. Such funds are risky compared to equity

schemes. These funds are not affected because of fluctuation in equity market. The NAVS of such funds are affected because of change in interest rate in the country. If interest rates fall, NAVs of such funds are likely to increase in the short run and vice-versa.

3. Balanced Fund The aim of balanced funds as to provide both growth and regular income as such schemes invest both in equities and fixed income securities in the proportion indicate in their offer document. These are appropriate for investors looking for moderate growth. They generally invest 40-60% in equity and debt instrument. These funds are also affected because of fluctuation in share policies in the stock markets.

4. Money Market / Liquid Fund These funds are also income funds and their aim is to provide easy liquidity and moderate income. These schemes invest exclusively in safer short term instrument, such as treasury bills, certificate of deposits, commercial paper and interbank call money, government securities etc. Returns on these schemes fluctuate much less compared to other funds. These funds are appropriate for corporate and individual investors as a means to park their surplus funds for short periods. Other schemes

1. Gilt funds These funds invest in exclusively in government securities. Government securities have no default risk. NAV of these schemes also fluctuate due to change in interest rates and other factors as is the cash with income or debt oriented schemes.

2. Index funds Index funds replicate the portfolio of a particular index such as the BSE sensitive Index, S&P NSE 50 index (Nifty) etc...These schemes invest in the securities in the same weight age compromising of an index. NAV of such Schemes would rise or fall in the index. Though not exactly by the same percentage due to some factors known as tracking error in technical terms. Necessary discourses in this regard are made in the offer document of the mutual fund schemes.

3. Sector specific FundsThese are the funds, which invest in the securities of only those sectors or industries as specified in the offer document. E.g. Pharmaceuticals, Software, Fast Moving Consumer Goods (FMCG), Petroleum Stocks etcThe returns in these funds are depending on the performance of the respective sectors. While these funds may give

higher returns. They are more risky compared to the diversify fund. Investors need to keep a watch on the performance of those sectors and must exit at an appropriate time.

4. Tax Saving SchemesThese schemes offer tax rebates to the investors under specific provisions of the Income Tax Act, 1961 as the government in specified avenues. e.g. Equity Linked Saving Schemes (ELSS) pension Schemes launched by the mutual funds also offer tax benefits. These schemes are growth oriented and invest predominately in equities.

1.6 VARIOUS TYPES OF PLAN

SYSTEMATIC INVESTMENT PLAN (SIP) Under this, affixed sum is invested each month on a fixed date of a month. Payment is made through post dated cheques or direct debit facilities. The investors get fewer units when the NAV is high and gets more units when the NAV is low. This is called as the Benefit of Rupee Cost Averaging

SYSTEMATIC WITHDRAWAL PLAN (SWP) An opposed to the SIP, the SWP allows the investors the facility to withdraw the pre determined interval. The investors units will be redeemed at the existing NAV as on that day.

SYSTEMATIC TRANSFER PLAN (STP) They allow the investors to transfer on a periodic basis a specifying amount from one scheme to another within the same fund family meaning two schemes belonging to the same mutual fund. A transfer will be treated as redemption of units from the scheme from which the transfer is made. Such redemption or investment will be at the applicable NAV. This service allows the investor to manage his investment activity to achieve his objectives.

1.7 ADVANTAGE OF MUTUAL FUND

1) PROFESSIONAL MANAGEMENT Fund managers, people who are highly qualified in the area of investment and have a thorough knowledge of the capital market, manage mutual fund. 2) DIVERSIFICATION AND LOWERED RISKS Mutual fund invests in a number of companies across a broad cross section of industries and sectors. This diversification reduces the risk because all stock cannot go through adown trend at the same time and in the same proportion. You achieve this diversification through a mutual fund with far less money than you can do on your own.3) LOW COSTS When compared to direct investment in the capital market, funds cost less. This is due to savings in brokerage costs, demat costs, depositary costs etc4) LIQUIDITY Investments in mutual funds are quite liquid and hence can be redeemed at the Net Assets Value related price on any working day.5) TRANSPARANCY All that you invest in a scheme is made known to you and you are periodically informed about all the updates and changes taking place.

6) Flexibility Mutual funds offer flexibility in their options and schemes to match individual needs. Also, with features like regular withdrawal plans and systematic investment plans. You can withdraw or invest funds according to your needs and convenience. 7) TAX BENEFITS Mutual funds offer a host of tax benefits. Dividend income received from investing in equity and debt schemes of a mutual fund is tax free in the hand of the investor.8) REGULATION Mutual funds are regulated by SEBI and function within provisions and regulations that protect the interests of investors. SEBI acts as watchdog to ensure fair market practices.

1.8 DISADVATAGES OF MUTUAL FUND

1) Cost control not in the hands of an investor Investor has to pay investment management fees and fund distribution cost as a percentage of the value of his investments, irrespective of the performance of the fund.2) NO GURANTEES No investments are 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. However, anyone who invests through a mutual fund runs the risk of losing money.3) MANAGEMENT RISK When you invest in a mutual fund, you depend on the funds manager to make the right decisions regarding the funds portfolio. If the manager does perform as well as you had hope, you might not makes as much money on your investment as you expected of course. 4) DIFFICULTY IN SELECTING A SUITABLE FUND SCHEME Many investors find it difficult to select one option from the plethora of funds/schemes/ plans available. For this, they have to take advice from financial planners in order to invest in the right fund to achieve their objective.

1.9 BANKS V/S MUTUAL FUNDSBANKS MUTUAL FUNDS

ReturnsLowBetter

Administrative exp.HighLow

RiskLowModerate

Investment optionsLessMore

NetworkHigh penetrationLow But improving

Quality of assetsNot TransparentBetter transparency

Interest CalculationMinimum balance b/w 10th & 30th of every monthEvery year

GuaranteeMaximum Rs.1 lakh on depositsNone

1.10 COMPARISION OF INDIAN INVESTMENT OPTIONSInvestment OptionsLiquiditySafetyReturnsVolatility

Equity sharesModerate to HighLowUncertainHigh

DebenturesLowModerateModerateModerate

DepositLowModerateLowLow

LifeInsuranceLowHighLowLow

RBI BondsModerateHighModerateLow

Bank Fixed DepositsHighHighLowLow

PPFLowHighModerateLow

Post OfficeHighHighGoodLow

NSCLowHighModerateLow

GoldHighHighModerateModerate

Real EstatesLowModerateVariableHigh

Investment means putting your money to work to earn more money. You do not be wealthy to be an investor. Investing even a small amount can produce considerable rewards over the long term, especially if you do it regularly. But you need to make decision about how much you want to invest and where to invest it. To choose wisely, you need to know the investment options thoroughly and there relative risk exposures. Financial planning is the process of meeting your lifes goal through proper management of your finances.

1.11 Impact of tax on income from mutual fund Income earned from Mutual fund falls under two heads;-1. Dividend income2. Capital gain Given that the tax implication can have a significant impact on the return earned it is necessary to understand the tax implication for both these heads of income.(1) .DIVIDEND INCOME Lets take income earned under the head of dividends first. As per existing tax provisions income from dividends is tax free in the hands of the investors. However this is not to say that there is no tax levied at all. To the contrary, there is a levy of 15% of the dividends declared as distribution tax. This tax is paid out of the profits of the mutual funds schemes declaring the dividends. The dividends distribution tax has to be paid only in the case if debt scheme of the mutual fund. Equity schemes are exempt from tax. So, if you were to receive Rs. 100 as dividends from a debt mutual fund it is an equivalent to Rs. 115 being paid out, the incremental Rs. 15 having being paid to the government as distribution tax. In case of equity funds however, as mentioned, there will be no. such implication. (2).CAPITAL GAIN Capital gains from mutual fund are two types, Short terms and long term capital gains. This classification is based upon the periods of holding. If the investment is sold within 365 days from the date of purchase, any capital gain made would be treated as short term nature. Such capital gain will be treated as part of the total income and chargeable to tax at the normal rate of tax. If the mutual fund investment is sold after 365 days from the date of purchase, any capital gain made during that period will be treated as long term capital gain and they get tax deduction and they are not liable to pay the tax.

Tax benefits Section 88, 88B, 88C scrapped. New section 80C introduced under which tax payers can directly claim deductions up to Rs.1 lakhs from their income. All investment eligible U/S 88, are being placed U/S 80C without any sactoral caps. Amount invested under section 80CCC, 80CCD to be included U/S 88C. No changes in tax treatment on capital gain on mutual fund units. Investment in ELSS can be done up to 1 lakhs to claim deduction under sectional 88C as against previous limit.

1.12 The process of purchase and redeem unit The most common method to invest in a fund once you are in it is to simply fill out investment forms and write a check to the mutual fund family. This is probably the easiest but it often takes the few days or even a week to have the funds credited to your account. Another method that is common, automatic withdrawals. This allows you to have a certain amount which you choose to be deducted from your bank account each month. These are excellent for getting into the habit of investing on a regular basis. The fund will also provide information on how you can redeem your shares. Once common way is to request redemption by filling out a form or writing a letter to the mutual fund family. This is the most common method but it is not only one. Now that you understand the basis of a prospectus, you are one step closer to getting started in mutual fund. So, when you finally receive the information you requested on a mutual fund, look it over carefully and make an educated decision if it is right for you.

2.1 INTRODUCTION OF RELIANCE COMAPANY LTD

RELIANCE INDUTRIES LIMITED-INDIAS LARGEST BUSINESS HOUSE Reliance group was founded by Dhirubhai Ambani in 1966 as a polyester firm. Dhirubhai started the equity cult in India. Reliance later entered into financial services, petroleum refining, power sector. By 2002 Reliance had grown into a $15 billion conglomerate. After the death of Dhirubhai Ambani on July 6, 2002, Reliance was headed by his sons. The group was formed after the two feuding brothers Mukesh Ambani and Anil Ambani, split Reliance Industries. The Groups activities span exploration and production of oil & gas, refining and marketing, petrochemicals, textiles, financial services & insurance, power& telecom. The Group exports its products to more than 100 countries of the world. Reliance emerged as Indias Most Admired Business House, for the third successive year in a TNS mode survey for 2003.

Reliance Group Revenue is equilent to about 3.5% of Indias GDP. The group contributes nearly 10 % of the countrys indirect tax revenues and over 6% of Indias exports.

RELIANCE INDUSTRIES LTD. - INDIAS LARGEST PRIVATE SECTOR COMPANY RELIANCE INDUSTRIES LTD. is Indias largest private sector company on all major financial parameters with gross turnover of Rs.74,418 Crore, cash profit of Rs.9197 crore, net profit of Rs.34,452 crore, net worth of Rs.50,483 crore and total assets of Rs. 71,157 crore. RIL emerged as the only Indian company in the list of global companies that create most value of their shareholders, published by Financial Times based on a global survey and research conducted by Price Warehouse Cooper in 2004.RIL features in the Forbes Global list of worlds 400 best big companies and in FT Global 500 list of worlds largest companies. RIL emerged as the Best Managed Company in India in a study by Business Today and A.T.Kearney in 2003.The Company emerged Indias biggest wealth creator in the private sector over a 5 year period in a study by business today.

2.2 RELIANCE MUTUAL FUND

REALIANCE MUTUAL FUND (RMF) has been sponsored by REALIANCE CAPITAL LTD (RCL). RCL has been promoted by RELIANCE INDUSTRIES LTD., one of the Indias largest private sector enterprise.RIL has net worth Rs.5 ,483 crores as on march 31 2010 and currently has a large family of shareholders.RCL is a non banking finance company engaged in leasing ,investment and other fund based activities.

RMF has been established as a trust under the Indian Trust Act, 1882 with Reliance Capital Trustee Co. Limited, as the Trustee. RMF has been registered with the Securities & Exchange Board of India (SEBI) vide registration number MF/022/95/1 dated June 30, 1995.

As of end August 2006, Reliance mutual fund has Rs 28,753 crore of assets under management. Reliance Equity Fund, launched by Reliance MF in early 2006, is the largest mutual find scheme in the country with a fund size of over

2.3 RELIANCE ASSET MANAGEMENT COMPANY LIMITED Reliance Capital Asset Management Limited (RCAM), a company registered under the companies Act 1956 was appointed to act as the investment manager of Reliance Mutual Fund.

RCAM is a wholly owned subsidiary of Reliance Capital Limited, the sponsor. The entire paid up capital of RCAM is held by Reliance capital Limited.

RCAM was approved as the Asset Management Company for the mutual fund by SEBI vide their Letter No.IIMARP/1264/95 dated June, 30 1995. The mutual fund was entered into an Investment Management Agreement (IMA) with RCAM dated May 12 1997 in line with SEBI Regulations, 1996. Pursuant to this IMA, RCAM is authorized to act as Investment manager of Reliance Mutual Fund. Reliance Mutual Fund has launched 35 schemes till date.

2.4 RMF INVESTMENT PROCESS

The sole business of the organization is to to manage clients investment and to fill full their need from cap-a-pie. At RMF the people are education centric, the relationship manger will help you in identifying and understanding your needs and helps you develop a portfolio across different assets classes commensurate to your needs. This practice is only performed at RMF and this is what makes it superior to other competition in this same field.

There are well trained expert who will give a feel on the various assets classes and explain you the risk associated with each in a simple and lucid manners to put you at clam. Once the invest is planned and done we dont leave our client in between, but we back them by periodic valuation report and regular relevant information through news, letter, e-mail, roads shows etc.

The prime concern of the people at RMF will be to help you attain peace of mind on the investment points.

2.5 PHILOSOPHY OF RMF It aims to provide need based solution for long term wealth creation. Educating and disclosing all the important facts which the customers needs to be aware of, is important. It aim to provide all its customer, directly or indirectly, with true, unbiased, need based solution an advice that best meets their stated and unstated needs. At RMF its aim is to earn the trust of investors and respect of the employees, customers, partner and regulators. To restructure investment plans on demand of investors. To provide reliable information also. To guide the investors for their future investment.

2.6 PROJECT AT GLANCE

*Name of the company*Reliance Mutual Fund

*Corporate office*Reliance Capital Assets Management Ltd.Express Building, 4th floor, 14 E Road,Church Gate, Mumbai-400020.

*Registered Office*Reliance House,Nr. Mardia plaza,Opp.C.G. Road,Ahemdabad-380006.

*Form of Organization*Private limited company.

*Year of establishment*30thJune, 1995.

*Types of Service*Portfolio Management Service under head of Mutual Fund.

*Website*www.reliancemutual.com

*Toll free no.*1800-300-11111

*Telephone No.*022-30301111

*E-mail*Customer-care@relaince. mutual.com

2.7 MANAGEMENT TEAM

Management Team Chief Executive Officer - Sandeep Sikha Head Equity Investors - Sunil B. Singhania Head Fixed Income - Amitabh Mohanty Board of Directors Mr. Kanu Doshi Mr. Manu Chadha Mrs. Sushi Tripathi Mr. Soumen Ghos Equity Fund Management Team Sunil Singhania Ashwani Kumar Sailesh Raj Bhan Ompraksh S. Kuckian Krishan Daga Samir Rachh Jhanvee Shah Shrey Loonker Debt Fund Manager Mr.Amitabh Mohanty Mr.Amit Tripathi

Head of Department Himanshu Vyapak Executive-vice, President-Sales & Distribution. Pradeep Andrade Infrastructure & Admin Milind Gandhi Chief Financial Officers Vinay Nigudkar Information Technology Bhalchandra Jhoshi Head Service Delivery &Operation Geeta Chandran Operation &Settlement Sanjay Kumar Singh Head Product Development.

Zonal Head Gurbir Chopra Northern Zone Aashwin Dugal Western Zone Gopal Khitan Southern Zone Vikas Rathie Eastern Zone

2.8 Organization Chart

2.8 VISION & MISSION STATEMENT

Vision To be globally respected wealth creator with an emphasis on customer care and a culture of good corporate governance and also provide good service to the consumers

Mission To create and nurture a world class, high performance environment aimed at delighting our customer

2.10 DIVIDEND POLICY OF RELIANCEMUTUAL FUND

It refers that RMF are many fund which is in the market. Each fund have many option to the invest the money of the investors. There are growth option, dividend option, etcthe investor choose option as per his requirement which the company paid dividend to the investor weekly, monthly, yearly. A major decision of financial management is the dividend decision in the sense that the firm chose the distributing the dividends to the investors and the also provided facilities of the reinvestment of the dividend.

2.11 RELIANCE MUTUAL FUND BRANCHES IN GUJARAT

Ahmadabad4th floor, Mega House, Mithakali, Low garden road, Ellis Bridge,Ahmadabad 380 006

Rajkot3rd floor, Plus Point, Opp. Haribhai Hall,Near Ramakrishna Ashram,Yagnik Road,Rajkot 360 001

Anand2nd Floor, 204 Maruti Sharnam, Anand Vidhyanagar Road,Anand 388 001

Bhavnagar 3rd floor, corporate house, Plot no.113, Waghawadi Road.Bhavnagar 364 004

2.12 DIFFERENT SCHEMES OFFERED BY RELIANCE MUTUAL FUND

Reliance Vision Fund The primary objective of the schemes is to achieve long term growth of capital by investment in equity and equity related securities through a research based investment approach.

Reliance Equity Advantage Fund The primary objective of the schemes is to seek to generate capital appreciation and provide long term growth opportunities by investing in a portfolio predominately of equity & equity instrument with investment generally in S & P CNX Nifty stocks and the secondary objective is to generate consistence return by investing in debt and money & money market securities.

Reliance Equity Fund The investment objective of the schemes is to seek to generate capital appreciation and provide long term growth opportunities by investing in portfolio constituted of equity & equity related securities of top 100 companies by market capitalization and of companies which are available in the derivatives segment from time to time and the secondary objective is to generate consistent returns by investing in debt and money market securities.

Reliance Index fund Nifty plan The investment objective of the schemes is to replicate the composition of the Nifty, with a view to generate returns that are commensurate with the performance of the Nifty, subject to tracking errors.

Reliance Growth Fund The investment objective of the schemes is to achieve long term growth of capital by investing in equity and equity related securities through a research based investment approach.

Reliance Long Term Equity Fund. The investment objective of the schemes is to seek to generate long term capital appreciation and provide long term growth opportunities by investing in a portfolio constituted of equity and equity related securities and Derivatives and the secondary objective are to generate consistent returns by investing in debt and money markets securities.

Reliance Small Cap Fund The investment objective of the schemes is to seek to generate capital appreciation by investing pre dominantly in equity and equity related instruments of small cap companies and the secondary objective is to generate consistent returns by investing in debt and money market securities.

Reliance Equity Opportunities Fund The investment objective of the schemes is to seek to generate capital appreciation and provide long term growth 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.

Reliance Infrastructure Fund The investment objective of the schemes is to seek to generate long term capital appreciation by investing predominantly in equity and equity related instrument of companies engaged in infrastructure related sectors and which are in corporate or have their area of primary activity.

Reliance Natural Resources Fund The investment objective of the schemes 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.

Reliance Banking fund The investment objective of the schemes is to seek to generate continuous returns by actively investing in equity & equity related or fixed income securities of companies in the banking sector.

Reliance Diversified Power Sector Fund The investment objective of the schemes is to seek to generate continuous returns by actively investing in equity & equity related or fixed income securities of power and other associated companies.

Reliance Media & Entertainment Fund The investment objective of the schemes is to seek to generate continuous returns by investing in equity and equity related or fixed income securities of media & entertainment and other associated companies.

Reliance Pharma Fund The investment objective of the schemes is to seek to generate consistent returns by investing in equity & equity related or fixed income securities of pharma and other associated companies.

Reliance Tax Saver (ELSS) Fund The investment objective of the schemes is to seek to generate long term capital appreciation from a portfolio that is invested predominately in equity & equity related instruments.

Reliance Equity Linked Saving Fund(ELSS) The investment objective of the schemes is to seek to generate long term capital appreciation from a portfolio that is invested predominantly in equities along with income tax benefit.

Reliance Liquidity Fund The investment objective of the schemes is to seek to generate optimal returns consistent with moderate levels of risk and high liquidity. Accordingly investment shall predominantly be made in debt and money market Instrument.

Reliance Money Manager Fund The investment objective of the schemes is to seek to generate optimal returns consistent with moderate levels of risks and liquidity by investing in debt securities and money market securities.

Reliance Medium Term Fund The investment objective of the schemes is to seek to generate regular income in order to make regular dividend payments to unit holders and the secondary objective is growth of capital.

Reliance Income Fund The investment objective of the schemes is to seek to generate optimal returns consistent with moderate levels of risk. This income may be complemented by capital appreciation of the portfolio. Accordingly, investments shall be made in debt & money market instruments.

Reliance Gilt Securities Fund The investment objective of the schemes is to generate optimal credit risk free returns by investing in a portfolio of securities issued and guaranteed by the Central Government and State Government.

Reliance Monthly Income Plan The investment objective of the schemes is to seek to generate regular income in order to make regular dividend payments to unit holders and the secondary objective is growth of capital.

Reliance 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. However, performance of the schemes may differ from that of the domestic prices of gold due to expenses and or other related factor.

3.1 INTRODUCTION OF NAV

In general senses, the performance of a mutual fund are denoted by Net Assets Value. The investors funds are deployed in a portfolio of securities by the fund manager. The value of these investment keeps changing as the market price of the securities change since investors are free to enter and exit the fund at any time, it is essential that the market value of their investment is used to determine the price at which such entry and exist will tax place. The NAV per unit is the market values of securities of a scheme divided by the total no of units of the scheme of any particular date. The net asset represents the market value of assets, which belongs to the investors, on a given date. NAV is the value of one unit of investment in the fund, in net asset terms. For e.g. If the market value of securities of a mutual fund scheme is Rs. 200 lakhs and the mutual fund has issued 10 lakhs unit at Rs. 10 each to the investors, then the NAV per unit of the fund is Rs.20.

3.2 CALCULATION OF NAV

NAV=Net assets value of the schemes /No. of units outstandingNAV is equals to- Market / fair value of schemes (+) Receivables (+) Accrued income (+) Other assets (-) Accrued expenses (-) Payables (-) Other liability (/) Number of unit outstanding.

Here, "other assets" includes any income due to the fund but not received as on the valuation date (for example, dividend announced by a company but yet to be received). Similarly, "other liabilities" includes expenses payable by the fund, for example management fees payable to the AMC. Thus, SEBI requires that all expenses and incomes are accrued up to the valuation date and considered for NAV computation

The major factor affecting the NAV of a fund are; Sale and purchase of securities Sale and repurchase of unit Valuation of assets Actual of income and exp.

In the context of mutual funds, NAV per share is computed once a day based on the closing market prices of the securities in the fund's portfolio. All mutual funds' buy and sell orders are processed at the NAV of the trade date. However, investors must wait until the following day to get the trade price.

NAV of all schemes must be calculated and published at least weekly for closed end schemes and daily for open end schemes. Mutual funds pay out virtually all of their income and capital gains. As a result, changes in NAV are not the best gauge of mutual fund performance, which is best measured by annual total return.

Mutual funds pay out virtually all of their income and capital gains. As a result, changes in NAV are not the best gauge of mutual fund performance, which is best measured by annual total return.

4.1 INTRODUCTION

Research means to collect the data and analysis it with the help of a graph, tabulation etc. And gives some findings which is useful to the research and other needy people in their research and other needy people in their research project Here Research has collected the secondary data of the different types of mutual funds of Reliance Mutual fund &HDFC mutual fund. Research has collected annually return on the different schemes of the Reliance mutual fund & HDFC mutual fund. The financial information provided by the company is become more difficult to understand. One must possess ability to understand and oversee risk. Research has found out on the annual return of last five years of some schemes of both mutual fund with the help of chart and small sample test. This information gives quite useful information to the sampled unit to improve their position as well as to the investor for investing their money in the different schemes of funds. This information is also useful to the adviser, manager, employees etc. of the company

4.2 OBJECTIVES OF THE STUDY

The main objectives of the study are as follows:- To compare NAV of various schemes on various years To know the profitability of the different schemes of the mutual funds. To get the idea about the highest benefit from the different mutual fund schemes. To know the efficiency of the sampled unit. These studies also give risk margin. To understand overall performance of various schemes of both the mutual fund companies. To know which Asset Management company is give higher return to the investors. To know which type of fund is preferred by the investors.

4.3 SCOPE OF THE STUDY

Scope of the study means the study whichever is carried out where it wills helpful future.The study is useful to the Company in the following ways.. This study will be helpful to the MF companies to know where it is lacking behind. This study will helpful to know the investor satisfaction towards return provided by company. On the basis of the study company can take the corrective action. Through this study company can get idea about the competitors efficiency and they will take corrective steps. Through this study company can get the idea about at which level they reach and what type of changes are required.

4.4 SAMPLING PROCESS

The basic idea of sampling is that by selecting some of the elements in a population, we may draw conclusion about the entire populations. A sample is a part of the target population carefully selected to represent that populations sampling include following process.

Define PopulationsSpecify sampling unitDetermining sample sizeSelection of sampling methodSpecifying sampling planSelection of sample

Sample Size:-Reliance Mutual FundHDFC Mutual Fund

Sampling Technique:-Convient Random Sampling

4.5 Data Collection

There are two kinds of data that can be collected for research purpose. Based on the requirement in the research appropriate data is collected. Both the kinds of data are shown below. Primary Data Secondary Data

PRIMARY DATA Primary data are collected and gathered for the first time. Primary data are sought for their proximately to the truth and control over error. Primary data are collected by you &agents known to you especially to answer your research question. In the primary data are 3 ways to collect it. 1. Observation2. Survey3. Focus

SECONDARY DATA Secondary data are collected by someone else. There are two ways to collect the data.1. Published data2. Unpublished data

By analyzing the requirement of data here in this project report the secondary data is used for the purpose of research work. Researcher has collected annually return on the different schemes of the Reliance mutual fund & HDFC mutual fund for the calculating chart & Small Sample Test. I have also used the materials provided by the mutual fund company.

4.6 RESEARCH INSTRUMENTS

This is also part of research of methodology. Instrument which I have used in my research are as under: Mean Standard Deviation F Test There are two types of the sample tests for analysis of statistical data. For analysis, you can choose the test according to the sample size. They are as under

LARGE SAMPLE TEST SMALL SAMPLE TEST

LARGE SAMPLE TEST

For testing a given hypothesis a random sample is drawn from a population. If the no. of unit in the sample is greater than 30, it is generally regarding as large sample. The following tests will be included in this test. Normal distribution is used for the testing.

Test of varianceA. Test of Significance of a meanB. Test of Significance of difference between two means.C. Test of Significance of difference between two standard deviations.

Test of attributesA. Test of significance of proportion of successesB.Test of significance difference between two proportions

SMALL SAMPLE TEST

For testing a given hypothesis a random sample is drawn from a population. If the No. of unit in the sample is less than 30, it is generally regarding as a small sample. We shall study the tests of significance for small sample tests. The following tests will be included in this test. Here, standard deviation is used for testing. In small sample test there are also included two test T-test & F-test.

F- Test If we have two samples and to hypothesis that the population variances are equal that time we use the F-Test. In which, two method are included.1. Significance of variance2. ANOVA table

T-Test If we have more than two samples and to hypothesis that the population mean are equal that time we use the T-Test. In which following method included. 1. Significance of mean 2. Significance of means 3. Significance of Co-relation Regression

Here, the hypothesis on the basis of a two sample size and samples are less than 30. So, we used F-Test, ANOVA table.

4.7 METHOD OF DATA ANALYSIS

The data collected are tabulated according to the annual returns received of last five years on each schemes of both the mutual fund company. The steps of the data analysis are as under

The data was collected from the different mutual fund schemes of different companies and was complied in an Excel sheet. Then I used MS Excel software for in depth- analysis of the survey. With the help of descriptive Statistical tools of analysis in MS Excel analyzed the whole data.

4.8 LIMITATION OF THE STUDY

There are many limitations while conducting my study which are as follows:

Time constraint as the training is of 1 month I cannot get the proper data within a limited time period. Generalization of my study is not possible. Research has been done on the secondary data , the data itself has own limitation. The period of study is 5 years. So, before and after 5 years changes take place are not considered. Reliance Mutual Fund is large scale company, so not possible to study the entire department.

5.1 DATA ANALYSIS

Under the topic A Comparative Study of NAVS in Reliance Mutual Fund & HDFC Mutual Fund in which we compare the annual returns of the RMF & HDFC MF and for that we take the annual returns of the some selected schemes and compare with each other. For analysis of the data, we used F-Test and chart. Schemes are as under.

ANNUAL RETURNS ON EQUITY ORIENTED SCHEMES1. Equity Fund2. Tax Sever Fund3. Top 200 fund

ANNUAL RETURNS ON DEBT ORIENTED SCHEMES1. Income Fund2. Liquid cash3. Monthly Income Plan4. Short Term Fund

ANNUAL RETURNS ON EQUITY ORIENTED SCHEMES(1) .EQUITY FUND The investment objective of the schemes is to seek to generate capital appreciation and provide long term growth opportunities by investing in portfolio constituted of equity & equity related securities.

SR.NOYEARRELIANCE MFHDFC MF

12006035.86

2200752.0153.61

32008-44.85-49.68

4200954.72105.57

520100.2829.22

TEST OF HYPOTHESIS H0: There is no significant difference between annual returns of Reliance Equity fund & HDFC Equity Fund during the period of study.F-Test Two-Sample for Variances

Reliance MFHDFC MF

Mean12.43234.91

Variance1734.533132.81

Observations55

Df44

F0.55

P(F