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1
INTRODUCTION
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INTRODUCTION TO MUTUAL FUND
Mutual fund is a trust that pools the savings of a number of investors who share a common
financial goal. This pool of money is invested in accordance with a stated objective. The joint
ownership of the fund is thus Mutual, i.e. the fund belongs to all investors. The money thus
collected is then invested in capital market instruments such as shares, debentures and other
securities. The income earned through these investments and the capital appreciations
realized are shared by its unit holders in proportion the number of units owned by them. Thus
a 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. A Mutual Fund is an investment tool that allows small investors access to
a well-diversified portfolio of equities, bonds and other securities. Each shareholder
participates in the gain or loss of the fund. Units are issued and can be redeemed as needed.
The funds Net Asset value (NAV) is determined each day.
Investments in securities are spread across a wide cross-section of industries and sectors
and thus the risk is reduced. Diversification reduces the risk because all stocks may not move
in the same direction in the same proportion at the same time. Mutual fund issues units to the
investors in accordance with quantum of money invested by them. Investors of mutual funds
are known as unit holders.
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When an investor subscribes for the units of a mutual fund, he becomes part owner of the
assets of the fund in the same proportion as his contribution amount put up with the corpus
(the total amount of the fund). Mutual Fund investor is also known as a mutual fund
shareholder or a unit holder.
Any change in the value of the investments made into capital market instruments (such as
shares, debentures etc) is reflected in the Net Asset Value (NAV) of the scheme. NAV is
defined as the market value of the Mutual Fund scheme's assets net of its liabilities. NAV of a
scheme is calculated by dividing the market value of scheme's assets by the total number of
units issued to the investors.
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ADVANTAGES OF MUTUAL FUND
Portfolio Diversification
Professional management
Reduction / Diversification of Risk
Liquidity
Flexibility & Convenience
Reduction in Transaction cost
Safety of regulated environment
Choice of schemes
Transparency
DISADVANTAGE OF MUTUAL FUND
No control over Cost in the Hands of an Investor
No tailor-made Portfolios
Managing a Portfolio Funds
Difficulty in selecting a Suitable Fund Scheme
Mutual funds can be classified as follow:
Based on their structure:
Open-ended funds: Investors can buy and sell the units from the fund, at any point of
time.
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Close-ended funds: These funds raise money from investors only once. Therefore,
after the offer period, fresh investments can not be made into the fund. If the fund is listed
on a stocks exchange the units can be traded like stocks (E.g., Morgan Stanley Growth
Fund). Recently, most of the New Fund Offers of close-ended funds provided liquidity
window on a periodic basis such as monthly or weekly. Redemption of units can be made
during specified intervals. Therefore, such funds have relatively low liquidity.
RISK V/S. RETURN:
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The entire mutual fund industry operates in a very organized way. The investors, known as
unit holders, handover their savings to the AMCs under various schemes. The objective of
the investment should match with the objective of the fund to best suit the investors needs.
The AMCs further invest the funds into various securities according to the investment
objective. The return generated from the investments is passed on to the investors or
reinvested as mentioned in the offer document.
Before we understand what is mutual fund, its very important to know the area in
which mutual funds works, the basic understanding of stocks and bonds.
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Stocks : Stocks represent shares of ownership in a public company. Examples of public
companies include Reliance, ONGC and Infosys. Stocks are considered to be the most
common owned investment traded on the market.
Bonds : Bonds are basically the money which you lend to the government or a company,
and in return you can receive interest on your invested amount, which is back over
predetermined amounts of time. Bonds are considered to be the most common lending
investment traded on the market. There are many other types of investments other than
stocks and bonds (including annuities, real estate, and precious metals), but the majority of
mutual funds invest in stocks and/or bonds.
What Is Mutual Fund
A mutual fund is just the connecting bridge or a financial intermediary that allows a
group of investors to pool their money together with a predetermined investment objective.
The mutual fund will have a fund manager who is responsible for investing the gathered
money into specific securities (stocks or bonds). When you invest in a mutual fund, you are
buying units or portions of the mutual fund and thus on investing becomes a shareholder or
unit holder of the fund.
Mutual funds are considered as one of the best available investments as compare to
others they are very cost efficient and also easy to invest in, thus by pooling money together
in a mutual fund, investors can purchase stocks or bonds with much lower trading costs than
if they tried to do it on their own. But the biggest advantage to mutual funds is
diversification, by minimizing risk & maximizing returns.
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Thus a 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. The flow chart below describes broadly the working of a mutual fund
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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.
Further the mutual funds can be broadly classified on the basis of investment
parameter viz,
Each category of funds is backed by an investment philosophy, which is pre-defined in the
objectives of the fund. The investor can align his own investment needs with the funds
objective and invest accordingly.
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Guidelines of the SEBI for Mutual Fund Companies :
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To protect the interest of the investors, SEBI formulates policies and regulates the mutual
funds. It notified regulations in 1993 (fully revised in 1996) and issues guidelines from time to
time.
SEBI approved Asset Management Company (AMC) manages the funds by making
investments in various types of securities. Custodian, registered with SEBI, holds the securities
of various schemes of the fund in its custody.
According to SEBI Regulations, two thirds of the directors of Trustee Company or board of
trustees must be independent.
The Association of Mutual Funds in India (AMFI) reassures the investors in units of mutual
funds that the mutual funds function within the strict regulatory framework. Its objective is to
increase public awareness of the mutual fund industry. AMFI also is engaged in upgrading
professional standards and in promoting best industry practices in diverse areas such as
valuation, disclosure, transparency etc.
Documents required (PAN mandatory):
Proof of identity :
1. Photo PAN card
2. In case of non-photo PAN card in addition to copy of PAN card any one of the following:
driving license/passport copy/ voter id/ bank photo pass book.
Proof of address (any of the following ) :latest telephone bill, latest electricity bill, Passport,
latest bank passbook/bank account statement, latest Demat account statement, voter id, driving
license, ration card, rent agreement.
Offer document: An offer document is issued when the AMCs make New Fund Offer(NFO).
Its advisable to every investor to ask for the offer document and read it before investing. An
offer document consists of the following:11
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12
OBJECTIVE OF THE
STUDY
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OBJECTIVES OF THE STUDY
It is said that an objective well defined is half done. Thus in order to make sure that the
proper survey ensures defining clear-cut objective and outline is a prerequisite.
Objective serves as torchlight in a project. It lays down a well-defined path between start and
the end and that is the goal. As also an objective is well defined and it is important for the
research study that a scholar undergoes.
It is an action, a purpose, which is directed to a person to conduct a study. It represents a fact
having actual existence of outside the mind or a goal for which the study is to be conducted.
The objective of our study is:-
1) To know the various functions which are conducted for day-to-day operations in
Reliance Money.
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2) To know the various norms adopted by Reliance Money.
3) To know the various products and services rendered to its customers.
4) To know whether the services provided by Reliance Money is able to attain its
customers satisfaction or not.
5) To find and try to bridge the gap between the expectations and experiences of the
customers in case of dissatisfaction.
6) To know how the branch functions in terms of sales and operations.
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SCOPE OF THE STUDY
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SCOPE OF THE STUDY
A big boom has been witnessed in Mutual Fund Industry in resent times. A large number of
new players have entered the market and trying to gain market share in this rapidly improving
market.
The research was carried on in Moradabad. I had been sent at one of the branch of State Bank
of India Moradabad where I completed my Project work. I surveyed on my Project Topic Astudy of preferences of the Investors for investment in Mutual Fund on the visiting customers
of the Reliance Boring Canal Road Branch.
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The study will help to know the preferences of the customers, which company, portfolio,
mode of investment, option for getting return and so on they prefer. This project report may
help the company to make further planning and strategy.
16LITERATURE REVIEW
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LITERATURE REVIEW
The mutual fund industry in India started in 1963 with the formation of Unit Trust of India, at
the initiative of the Government of India and Reserve Bank. 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 a dramatic improvement, both
qualities wise as well as quantity wise. Before, the monopoly of the market had seen an ending
phase; the Assets Under Management (AUM) was Rs67 billion. The private sector entry to the
fund family raised the Aum to Rs. 470 billion in March 1993 and till April 2004; it reached the
height if Rs. 1540 billion.
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The Mutual Fund Industry is obviously growing at a tremendous space with the mutual fund
industry can be broadly put into four phases according to the development of the sector. Each
phase is briefly described as under.
First Phase 1964-87
Unit Trust of India (UTI) was established on 1963 by an Act of Parliament 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 the end of 1988 UTI had Rs.6,700 crores
of assets under management.
Second Phase 1987-1993 (Entry of Public Sector Funds)
1987 marked the entry of non- UTI, public sector mutual funds set up by public sector banks
and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India
(GIC). RELIANCE Mutual Fund was the first non- UTI Mutual Fund established in June 1987
followed by Canbank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89),
Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund
(Oct 92). LIC established its mutual fund in June 1989 while GIC had set up its mutual fund in
December 1990.At the end of 1993, the mutual fund industry had assets under management of
Rs.47,004 crores.
Third Phase 1993-2003 (Entry of Private Sector Funds)
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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. As at the end of January 2003, there were 33 mutual funds
with total assets of Rs. 1,21,805 crores.
Fourth Phase since February 2003
In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated
into two separate entities. One is the Specified Undertaking of the Unit Trust of India with
assets under management of Rs.29,835 crores as at the end of January 2003, representing
broadly, the assets of US 64 scheme, assured return and certain other schemes
The second is the UTI Mutual Fund Ltd, sponsored by RELIANCE, PNB, BOB and LIC. It is
registered with SEBI and functions under the Mutual Fund Regulations. consolidation and
growth. As at the end of September, 2004, there were 29 funds, which manage assets of
Rs.153108 crores under 421 schemes.
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 existance 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).
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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 existance 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.
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.
Major Mutual Fund Competing Companies of Reliance
ABN AMRO Mutual Fund
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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.
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 golbal organisation 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 AMC of
BOB Mutual Fund and was incorporated on November 5, 1992. Deutsche Bank AG is the
custodian.
HDFC Mutual Fund
HDFC Mutual Fund was setup on June 30, 2000 with two sponsorers nemely 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
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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.
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.
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.
State Bank of India Mutual Fund
State Bank of India Mutual Fund is the first Bank sponsored Mutual Fund to launch offshor
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 sponsor for Tata
Mutual Fund are Tata Sons Ltd., and Tata Investment Corporation Ltd. The investment
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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.
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.
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 Privete Limited. UTI Asset
Management Company presently manages a corpus of over Rs.20000 Crore. The 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.
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 Co.Pvt.Ltd.
Franklin Templeton India Mutual Fund
The group, Frnaklin 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
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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 offer.
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 organisations. 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 focussing on a
long-term capital appreciation.
Escorts Mutual Fund
Escorts Mutual Fund was setup on April 15, 1996 with Escorts 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.
Alliance Capital Mutual Fund
Alliance Capital Mutual Fund was setup on December 30, 1994 with Alliance Capital
Management Corp. of Delaware (USA) as sponsorer. 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
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Benchmark Mutual Fund was setup on June 12, 2001 with Niche Financial Services Pvt. Ltd.
as the sponsorer 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.
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.
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. 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.
Future of Mutual Funds in India
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
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100% growth in the last 6 years.
Number of foreign AMC's are in the que to enter the Indian markets like Fidelity
Investments, 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 rurals like the Indian insurance industry with simple and limited
products.
SEBI allowing the MF's to launch commodity mutual funds.
Emphasis on better corporate governance.
Trying to curb the late trading practices.
Introduction of Financial Planners who can provide need based advice.
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COMPANY PROFILE
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COMPANY PROFILE
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RELIANCE INDUSTRIES LIMITED
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Reliance Group Holdings has grown from a small office data-processing equipment
firm in 1961 into a major insurance and financial-services group in one generation under one
chief.
Reliance's insurance operations constitute the nation's 27th-largest property and
casualty operation. The parent company also includes a development subsidiary in
commercial real estate. Reliance's international consulting group contains several
subsidiaries in energy, environment, and natural resources consulting. A financial arm
invests in other businesses, primarily television stations.
Reliance Insurance started as the Fire Association of Philadelphia in 1817, organized
by 5 hose and 11 engine fire companies. It became the nation's first association of volunteer
fire departments.
Business got a boost as a result of the Great Chicago Fire of 1871.The association
soon developed a field of agents to write policies across the country. For the first two years,
shareholders received dividends twice a year of $5 a share, which increased gradually to $10
in 1876.
In 1972, the Reliance insurance group divided its pool so that Reliance Insurance
Company and its subsidiaries handled most standard lines, while United Pacific Insurance
Company handled the nonstandard and other operations.
In 1977, the company moved into real estate, forming Continental Cities
Corporation, which became Reliance Development Group, Inc. This division handled all real
estate operations of the parent company and other subsidiaries.
Reliance Capital Group, L.P. constituted the investment branch of the Reliance
conglomerate.
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In December 1989, Reliance Capital sold its investment, Days Corporation, parent company
of Days Inn of America, the world's third-largest hotel chain; it had been purchased in 1984.
Reliance Industries Limited. The Group's principal activity is to produce and
distribute plastic and intermediates, polyester filament yarn, fibre intermediates, polymer
intermediates, crackers, chemicals, textiles, oil and gas. The refining segment includes
production and marketing operations of the Petroleum refinery. The petrochemicals segment
includes production and marketing operations of petrochemical products namely, High and
Low density Polyethylene.
RELIANCE MUTUAL FUND
This group dominates this key area in the financial sector..This mega business houses
show that it has assetsunder management ofRs. 90,938 crore(US$ 22.73 billion) and an
investor base of over6.6 million (Source:www.amfiindia.com).Reliances mutual fund
schemes are managed by Reliance Capital Asset Management Limited(RCAM), a subsidiary
of
Reliance Capital Limited, which holds 93.37% of the paid-up capital of RCAM.
The company notched up a healthy growth of Rs. 16,354 crore(US$ 4.09 billion)in
assets under management in February2008 and helped propel the total industry-wide AUM
to Rs. 565,459 crore (US$ 141.36 billion)(Source: indiainvestments.com). A sharp rise
infixed maturity plans (FMPs) and collection of Rs. 7000 crore (US$ 1.75 billion) through
new fund offers (NFOs) created this surge. In AU rankings, Reliance continues to be in the
number one spot.
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India's Best Offering: Reliance Mutual Fund
Investing has become global. Today, a lot of countries are waking up to the reality that
in order to gain financial growth, they must encourage their citizens to not only save but also
invest. Mutual funds are fast becoming the mode of investment in the world.
In India, a mutual fund company called the Reliance Mutual Fund is making waves. Reliance
is considered India's best when it comes to mutual funds. Its investors number to 4.6 billion
people. Reliance Capital Asset Management Limited ranks in the top 3 of India's banking
companies and financial sector in terms of net value.
The Anil Dhirubhai Ambani Group owns Reliance; they are the fastest growing investment
company in India so far. To meet the erratic demand of the financial market, Reliance
Mutual Fund designed a distinct portfolio that is sure to please potential investors. Reliance
Capital Asset Management Limited manages RMF.
Vision And Mission
Reliance Mutual Fund is so popular because it is investor focused. They show their
dedication by continually dishing out innovative offerings and unparalleled service
initiatives. It is their goal to become respected globally for helping people achieve their
financial dreams through excellent organization governance and customer care. Reliance
Mutual fund wants a high performance environment that is geared at making investors
happy.
RMF aims to do business lawfully and without stepping on other people. They want to be
able to create portfolios that will ensure the liquidity of the investment of people in India as
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well as abroad. Reliance Mutual Fund also wants to make sure that their shareholders realize
reasonable profit, by deploying funds wisely. Taking appropriate risks to reach the
company's potential is also one of Reliance Mutual Fund's objectives.
Schemes
To make their packages more attractive, Reliance Mutual Fund created proposals called The
Equity/ Growth scheme, Debt/Income Scheme, and Sector Specific Scheme.
i. Debt/Income Scheme, and Sector Specific Scheme.
The Equity/ Growth scheme give medium to long term capital increase. The major
part of the investment is on equities and they have fairly high risks. The scheme gives the
investors varying options like, capital augmentation or dividend preference. The choices
are not deadlocked because if you want you may change the options later on.
Providing steady and regular income is one of the Debt/Income Scheme's primary
goals. The Debt/Income scheme has in its portfolio government securities, corporate
debentures fixed income securities, and bonds. returns on Sector Specific Scheme are
dependent on the performance of the industry at which your money is invested upon.
Compared to diversified funds this is a lot more risky and you will need to really give
your time on observing the market.
Although RMF is gaining good ground in the financial market, remember that they
are a risk taking bunch. They give higher profit because they take a lot of risks. So, if
you are faint hearted, then Reliance Mutual Fund is not for you.
GROWTH OF RELIANCE MONEY THROUGH RECOGNITION
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Growth through Recognition
Reliance has merited a series of awards and recognitions for excellence for businesses and
operations.
Corporate Ranking and Ratings:
Reliance featured in the Fortune Global 500 list of Worlds Largest Corporations for the
fourth consecutive year.
Ranked 269th in 2007 having moved up 73 places from the previous year.
Featured as one of the worlds Top 200 companies in terms of Profits.
Among the top 25 climbers for two years in a row.
Featured among top 50 companies with the biggest increase in Revenues.
Ranked 26th within the refining industry.
Reliance is ranked 182nd in the FT Global 500 (up from previous years 284th rank).
Petro Fed, an apex hydrocarbon industry association, conferred the Petro Fed 2007
awards in the categories of Refinery of the Year and Exploration & Production -
Company of the Year.
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Brand Reliance was conferred the Bronze Award at The Buzziest Brands Awards
2008, organized by agencyfaqs!
Institute of Economic Studies conferred the Udyog Ratna award in October 2007
for contributions to the industry.
Chemtech Foundation conferred the Hall of Fame in February 2008 for sterling
contributions to the industry.
Chemtech Foundation conferred the Outstanding Achievement - Oil Refining for
work at the Jamnagar Manufacturing Division.
Petroleum Federation of India conferred the Refinery of the Year Award - 2007 to
Jamnagar Manufacturing Division
The Plastics Export Promotion Council - PLEXCOUNCIL Export Award in the
category of Plastic Polymers for the year 2006-2007 was awarded to Reliance being
the largest exporter in this category.
HEALTH:-
Jamnagar Manufacturing Division was conferred the Golden Peacock Award for
Occupational Health & Safety - 2007 by Institute of Directors.
Jamnagar Manufacturing Division was conferred the ICC Award for Water
Resource Management in Chemical Industry.
Jamnagar Manufacturing Division was conferred the Good House Keeping Award
from Baroda Productivity Council.
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Jamnagar Manufacturing Division was conferred the BEL-IND Award for the best
scientific paper at the 58th National Conference of Occupational Health.
Naroda Manufacturing Division was conferred the Safety Award and Certificate of
Appreciation presented by Gujarat Safety Council & Directorate of Industrial Safety
& Health, Gujarat State for the recognition of safety performance at the 29th State
Level Annual Safety Conference.
Dahej Manufacturing Division received BSC 5-Star rating from British Safety
Council, UK.
Dhenkanal Manufacturing Division received the 2nd Prize for Longest Accident
Free Period from the Honble Minister of Labour, State of Orissa.
Hoshiarpur Manufacturing Division bagged the First Prize in Safety in Punjab,
organized by Punjab Safety Council.
Patalganga Manufacturing Division won the Gold Medal at CASHe (Change Agents
for Safety, Health and Environment) Conference. It also won the III Prize in Process
Management category for Presentation on Safety through Design in chemical process
industry in Petrosafe 2007 Conference.
Kurkumbh Manufacturing Division won the Greentech Safety Award silver trophy
for outstanding achievement in safety management in chemical sector.
Hazira Manufacturing Division received the TERI Corporate Environmental Award
(Certificate of Appreciation) for PET recycling project.
Nagothane Manufacturing Division received the Shrishti G-Cube Award for Good
Green Governance from Minister for Commerce and Industry, on World Earth Day.
Training and Development:-
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Jamnagar Refinery was adjudged the winner of the Golden Peacock National
Training Award -2007.
Patalganga Manufacturing Division won the ASTD (American Society for Training
& Development) Excellence in Practice Award for innovative practice titled
Learning Functions role as Business partner: Empowering people with Knowledge
to achieve Business Goals.
Reliance won the CNBC TV-18 instituted Jobstreet.com Jobseekers Employer of
Choice Award.
Energy Excellence:-
Exploration & Production (E&P) Division won The Infraline Energy Excellence
Awards 2007: Hydrocarbon Columbus Award for Excellence in Petroleum
Exploration.
Patalganga Manufacturing Division won the First Prize in Energy Conservation in
State of Maharashtra organized by Maharashtra Energy Development Agency
(MEDA).
Jamnagar Manufacturing Division won the Oil & Gas Conservation Award -2007
from the Centre for High Technology, Ministry of Power & Natural Gas for the
excellent performance in reduction/elimination of steam leaks in the plant.
Jamnagar Manufacturing Division was the recipient of the Infraline Energy Award-
2007 by Ministry of Power.
Hazira Manufacturing Division won the Government of India Energy Conservation
Award (2007) conferred by the Bureau of energy efficiency and Ministry of Power.
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Hazira Manufacturing Division was adjudged Excellent Energy Efficient Unit at
Energy Summit - 2007 by CII.
Vadodara Manufacturing Division received the CII award for Excellence in Energy
Management - 2007 as energy efficient unit. This division also received the 2nd prize in
National Energy Conservation Award 2007 from Bureau of Energy efficiency,
Ministry of Power, Government of India.
The Companys manufacturing divisions at Vadodara and Hazira were honoured with
CII-National award for excellence in water management - 2007 as water efficient unit in
Within the fence category. Additionally, Hazira Manufacturing Division was honoured
as water efficient unit Beyond the Fence category.
Quality:-
For the first time ever, globally, a petrochemical company bagged the Deming Prize
for Management Quality. The Quality Control Award for Operations Business Unit
2007 was awarded to the Hazira Manufacturing Division for Outstanding
Performance by Practicing Total Quality Management.
QUALTECH PRIZE 2007, which recognizes extraordinary results in improvement
and innovation, was won by Hazira Manufacturing Division for its Small Group
Activity Project.
Vadodara Manufacturing Divisions Polypropylene-IV (PP-IV) plant was conferred
the Spheripol Process Operability Award-2006 for the highest operability rate with
an on stream factor 98.97% by M/s. BASELL, Italy.
Allahabad Manufacturing Division won the Excellent Category Award at National
Convention of Quality Circle (NCQC) - 07.
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Six-Sigma:-
Lean Six sigma project on Reducing retention time of caustic soda lye tankers at
Jamnagar won the 1st prize in the national level competition held by Indian
Statistical Institute (ISI).
Patalganga Manufacturing Divisions Six Sigma Project on Improve Transfer
Efficiency for Automatic winders in PFY won the 2nd Prize for Best design for Six
Sigma Project in International Six Sigma Competition organized by IQPC
(International Quality and Productivity center).
Barabanki Manufacturing Division won the 3rd prize in All India Six Sigma case
study contest 2008 for the Case study on Reduction of waste of Plant 2 from 16%
to 8%.
Hoshiarpur Manufacturing Division won the 2nd prize in Six Sigma competition at
National Level organized by ISI and Quality Council of India (in manufacturing
category), while Dhenkanal and Barabanki Manufacturing Divisions won the 3rd
prize.
Vadodara Manufacturing Divisions Six Sigma project won the 1st prize as the Best Six
Sigma project at National level by CII.
Technology, R&D and Innovation:-
Vadodra Manufacturing Divisions R&D bagged an award from Indian Institute of
Chemical Engineers for Excellence in Process / Product Development for the work
on Eco friendly Process for Acetonitrile Recovery.
DSIR National Award for R&D Efforts in Industry (2007) was conferred on Hazira
Manufacturing Division for the Cyclehexane Recovery Project.
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Patalganga Manufacturing Divisions Project titled Augmentation of ETP and use of
biogas in Fired heaters won the Best Innovative Project from CII.
Reliance bagged the Innovation Award at Tech Converge 2007 for innovative
developments in short-cut fibres.
Hazira Manufacturing Division won the Golden Peacock Innovation Award - 2007 for
its Cyclohexane Recovery Process.
Information Technology:-
CIO of the Year Award for the best IT-enabled organization in India for the Year
2007.
Ones to Watch - CIO - USA Award, for figuring among the top 20 organizations
fostering excellence in IT team.
The Skoch Challenger Award conferred for the best IT Head (managing the most
IT enabled organization) of the Year 2007.
Best IT Implementation Award, by PC Quest for Knowledge Management Systems
portal (KMS).
CIO Excellence Award for Chemical Industry Information Technology Forum for
exemplary Information Technology implementation amongst global chemical
companies.
CTO Forum Hall of Fame Award for the best CIOs in India for not only providing
service to their
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41
PRODUCT PROFILE
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PRODUCT PROFILE
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CATEGORIES OF MUTUAL FUND:
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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 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.
Equity funds: These funds invest in equities and equity related instruments. With
fluctuating share prices, such funds show volatile performance, even losses. However, short
term fluctuations in the market, generally smoothens out in the long term, thereby offering
higher returns at relatively lower volatility. At the same time, such funds can yield great
capital appreciation as, historically, equities have outperformed all asset classes in the long
term. Hence, investment in equity funds should be considered for a period of at least 3-5
years. It can be further classified as:
i) Index funds- In this case a key stock market index, like BSE Sensex or Nifty is tracked.
Their portfolio mirrors the benchmark index both in terms of composition and individual
stock weightages.
ii) Equity diversified funds- 100% of the capital is invested in equities spreading across
different sectors and stocks.
iii|) Dividend yield funds- it is similar to the equity diversified funds except that they
invest in companies offering high dividend yields.
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iv) Thematic funds- Invest 100% of the assets in sectors which are related through some
theme.e.g. -An infrastructure fund invests in power, construction, cements sectors etc.
v) Sector funds- Invest 100% of the capital in a specific sector. e.g. - A banking sector fund
will invest in banking stocks.
vi) ELSS- Equity Linked Saving Scheme provides tax benefit to the investors.
Balanced fund: Their investment portfolio includes both debt and equity. As a result, on
the risk-return ladder, they fall between equity and debt funds. Balanced funds are the ideal
mutual funds vehicle for investors who prefer spreading their risk across various
instruments. Following are balanced funds classes:
i) Debt-oriented funds -Investment below 65% in equities.
ii) Equity-oriented funds -Invest at least 65% in equities, remaining in debt.
Debt fund: They invest only in debt instruments, and are a good option for investors averse
to idea of taking risk associated with equities. Therefore, they invest exclusively in fixed-
income instruments like bonds, debentures, Government of India securities; and money
market instruments such as certificates of deposit (CD), commercial paper (CP) and call
money. Put your money into any of these debt funds depending on your investment horizon
and needs.
i) Liquid funds- These funds invest 100% in money market instruments, a large portion
being invested in call money market.
ii) Gilt funds ST- They invest 100% of their portfolio in government securities of and T-
bills.
iii) Floating rate funds - Invest in short-term debt papers. Floaters invest in debt
instruments which have variable coupon rate.
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iv) Arbitrage fund- They generate income through arbitrage opportunities due to mis-
pricing between cash market and derivatives market. Funds are allocated to equities,
derivatives and money markets. Higher proportion (around 75%) is put in money markets,
in the absence of arbitrage opportunities.
v) Gilt funds LT- They invest 100% of their portfolio in long-term government securities.
vi) Income funds LT- Typically, such funds invest a major portion of the portfolio in long-
term debt papers.
vii) MIPs- Monthly Income Plans have an exposure of 70%-90% to debt and an exposure
of 10%-30% to equities.
viii) FMPs- fixed monthly plans invest in debt papers whose maturity is in line with that of
the fund.
Return Safety Volatility Liquidity Convenienc
e
Equity High Low High High Moderate
Bonds Moderate High Moderate Moderate High
Co.
Debentures
Moderate Moderate Moderate Low Low
Co. FDs Moderate Low Low Low Moderate
Bank
Deposits
Low High Low High High
PPF Moderate High Low Moderate High
Life
Insurance
Low High Low Low Moderate
Gold Moderate High Moderate Moderate Gold
Real Estate High Moderate High Low Low
Mutual
Funds
High High Moderate High High
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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.
1. Systematic Investment Plan: under this a fixed sum is invested each month on a fixed
date of a month. Payment is made through post dated cheques or direct debit facilities. The
investor gets fewer units when the NAV is high and more units when the NAV is low. This is
called as the benefit of Rupee Cost Averaging (RCA)
2. Systematic Transfer Plan: under this an investor invest in debt oriented fund and give
instructions to transfer a fixed sum, at a fixed interval, to an equity scheme of the same
mutual fund.
3. Systematic Withdrawal Plan: if someone wishes to withdraw from a mutual fund then he
can withdraw a fixed amount each month.
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 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
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performance of those sectors/industries and must exit at an appropriate time. They may also
seek advice of an expert.
48
RESEARCH
METHODOLOGY
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RESEARCH METHODOLOGY
This report is based on primary as well secondary data, however primary data
collection was given more importance since it is overhearing factor in attitude studies.
One of the most important users of research methodology is that it helps in identifying
the problem, collecting, analyzing the required information data and providing an
alternative solution to the problem .It also helps in collecting the vital information thatis required by the top management to assist them for the better decision making both
day to day decision and critical ones.
Data sources: Research is totally based on primary data. Secondary data can be used
only for the reference. Research has been done by primary data collection, and primary
data has been collected by interacting with various people. The secondary data has
been collected through various journals and websites.
Duration of Study: The study was carried out for a period of two months, from 3 rd
June to 30th July 2011.
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Sampling:
Sampling procedure: The sample was selected of them who are the
customers/visitors of Reliance Money, Boring Canal Road Branch, irrespective of
them being investors or not or availing the services or not. It was also collected
through personal visits to persons, by formal and informal talks and through filling
up the questionnaire prepared. The data has been analyzed by using
mathematical/Statistical tool.
Sample size: The sample size of my project is limited to 100 people
Sample design: Data has been presented with the help of bar graph, pie charts,
line graphs etc.
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51
FINDINGS & ANALYSIS
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FINDINGS AND ANALYSIS
1. (a) Age distribution of the Investors of Moradabad
Age Group 50
No. of Investors 10 15 40 15 10 10
1015
40
1510 10
05
10
1520
253035
4045
Less 30 31 - 35 36 - 40 41 - 45 46 - 50 more
than 50
more than 50
46 - 50
41 - 45
36 - 40
31 - 35
Less 30
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Interpretation:
According to this chart out of Mutual Fund investors of Moradabad the 40%
are in the age group of 36-40 yrs. i.e. 15%, the second most investors are in
the age group of 41-45yrs, 31 35yrs i.e. 10% and the least investors are in
the age group of below 30 yrs., 46-50yrs and more than 50yrs
(b). Educational Qualification of investors of Moradabad
Educational Qualification Number of Investors
Graduate/ Post Graduate 60
Under Graduate 30
Others 10
60
3010
010203040506070
Gradua
te/Post
Grad
uate
Under
Graduate
Others
Others
Under Graduate
Graduate/Post
Graduate
Interpretation:
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Out of 100 Mutual Fund investors 60% of the investors in Moradabad are
Graduate/Post Graduate, 30% are Under Graduate and 10% are others (under
HSC).
c). Occupation of the investors of Moradabad
.
Occupation No. of Investors
Govt. Service 20Pvt. Service 25
Business 45Agriculture 4
Others 6
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20 25
45
4 60
10
20
30
40
50
Govt.
Service
Pvt.
Service
Business Agriculture Others
Occupation of the customers
No.ofInvest
ors
Interpretation:
In Occupation group out of 100 investors, 25% are Pvt. Employees, 45% are
Businessman, 20% are Govt. Employees, 4% are in Agriculture and 6% are in others.
(d). Monthly Family Income of the Investors of Moradabad.
Income Group No. of Investors
30,000 25
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5
1520
35
25
0
5
10
15
20
25
30
35
40
Less
10000
10001 -
15000
15001 -
20000
20001 -
30000
more
30000
more 30000
20001 - 30000
15001 - 20000
10001 - 15000
Less 10000
Interpretation:
In the Income Group of the investors of Moradabad, out of 100 investors, 35%
investors that is the maximum investors are in the monthly income group Rs.
20,001 to Rs. 30,000, Second one i.e. 25% investors are in the monthly income
group of more than Rs. 30,000 and the minimum investors i.e. 5% are in the
monthly income group of below Rs. 10,000
(2) Investors invested in different kind of investments.
Kind of Investments No. of RespondentsSaving A/C 25Fixed deposits 15Insurance 20Mutual Fund 40
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25 15 2040
01020304050
Savin
gA/c
Fixed
Depo
sits
Insur
ance
M
utua
lFun
d
Kindsof
Investment
No.of
Respondents
Interpretation: From the above graph it can be inferred that out of 100 people, 25%
people have invested in Saving A/c, 20% in Insurance, 15% in Fixed Deposits, 40%
in Mutual Fund.
3. Preference of factors while investing
Factors (a) Liquidity (b) Low Risk (c) High Return (d) Trust
No. of Respondents 20 25 45 10
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Interpretation:
58
2025
45
10
0
10
20
30
40
50
Liquidity Low Risk High Return Trust
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Out of 100 People, 45% People prefer to invest where there is High Return, 25%
prefer to invest where there is Low Risk, 20% prefer easy Liquidity and 10% prefer
Trust
4. Awareness about Mutual Fund and its Operations
70
30
0
10
20
30
40
50
60
70
80
Yes No
Interpretation:
Response Yes NoNo. of Respondents 70 30
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From the above chart it is inferred that 70% People are aware of Mutual Fund
and its operations and 30% are not aware of Mutual Fund and its operations.
5. Source of information for customers about Mutual Fund
Source of information No. of RespondentsAdvertisement 10
Peer Group 15Bank 35
Financial Advisors 40
Interpretation:
From the above chart it can be inferred that the Financial Advisor is the most
important source of information about Mutual Fund. Out of 100 Respondents,
60
1015
3540
0
5
10
15
20
25
3035
40
45
Advertisement Peer Group Bank Financial
AdvisorsSource of Information
No.ofRespondent
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Interpretation:
Out of 100 People, 60% have invested in Mutual Fund and 40% do not have
invested in Mutual Fund.
7.Reason for not invested in Mutual Fund
Reason No. of Respondents
Not Aware 65Higher Risk 5
Not any Specific Reason 30
62
65
5
010203040506070
Not Aware Higher
Risk
Not any
Specific
Reason
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Interpretation:
Out of 100 people, who have not invested in Mutual Fund, 65% are not aware
of Mutual Fund, 5% said there is likely to be higher risk and 30% do not have
any specific reason.
8. Investors invested in different Assets Management Co. (AMC)
Name of AMC No. of InvestorsRELIANCE MF 25
UTI 25HDFC 15
ICICI Prudential 15Kotak 10Others 10
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25 25 15 1510
505
10
15202530
Relia
nceMF
UTI
HDFC
ICICI
Kotak
OTH
ER
N
ame
of
AMC
No. of
Investors
Interpretation:
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In Moradabad most of the Investors preferred UTI and Reliance Mutual Fund.
Out of 100 Investors 25% have invested in each of them, , 15% in ICICI
Prudential, 10% in Kotak and 15% in HDFC and 5% other
9. Reason for invested in Reliance MF
Reason No. of Respondents
Better Return 65Agents Advice 35
65
35
0
1020
30
40
50
60
70
Better Return Agents Advice
Column 1
Interpretation:
Out of 100 investors of Reliance MF, 35% invested on Agents Advice, 65%
invested because of better return.
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11. Channel Preferred by the Investors for Mutual Fund Investment
Channel Financial Advisor Bank AMCNo. of Respondents 60 20 20
60
20 20
0
10
20
30
40
50
60
70
Financial Advisor Bank AMC
AMC
Bank
Financial Advisor
Interpretation:
Out of 100 Investors 60% preferred to invest through Financial Advisors,
20% through AMC and 20% through Bank.
12. Mode of Investment Preferred by the Investors
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Mode of Investment One time Investment Systematic Investment Plan (SIP)
No. of Respondents 65 35
65
35
0
10
20
30
40
50
60
70
One time
Investment
SIP
Interpretation:
Out of 100 Investors 65% preferred One time Investment and 35 % Preferred
through Systematic Investment Plan.
13. Preferred Portfolios by the Investors
Portfolio No. of Investors
Equity 46
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Debt 17Balanced 37
46
17
37
0
10
20
30
40
50
Equity Debt Balance
Interpretation:
From the above graph 46% preferred Equity Portfolio, 37% preferred Balance
and 17% preferred Debt portfolio
14. Option for getting Return Preferred by the Investors
Option Dividend Payout Dividend
Reinvestment
Growth
No. of Respondents 21 8 71
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218
71
01020304050607080
Payo
ut
Reinv
estmen
t
Growth
Interpretation:
From the above graph 71% preferred Growth Option, 21% preferred Dividend
Payout and 8% preferred Dividend Reinvestment Option.
FINDINGS
In Moradabad in the Age Group of 36-40 years were more in numbers.
The second most Investors were in the age group of 41-45 years and the
least were in the age group of below 30 years.
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In Moradabad most of the Investors were Graduate or Post Graduate
and below HSC there were very few in numbers.
In Occupation group most of the Investors were Govt. employees, the
second most Investors were Private employees and the least were
associated with Agriculture.
In family Income group, between Rs. 20,001- 30,000 were more in
numbers, the second most were in the Income group of more than
Rs.30,000 and the least were in the group of below Rs. 10,000.
About all the Respondents had a Saving A/c in Bank, 76% Invested in
Fixed Deposits, Only 60% Respondents invested in Mutual fund.
Mostly Respondents preferred High Return while investment, the
second most preferred Low Risk then liquidity and the least preferred
Trust.
Only 67% Respondents were aware about Mutual fund and its
operations and 33% were not.
Among 200 Respondents only 60% had invested in Mutual Fund and
40% did not have invested in Mutual fund.
Out of 80 Respondents 81% were not aware of Mutual Fund, 13% told
there is not any specific reason for not invested in Mutual Fund and 6%
told there is likely to be higher risk in Mutual Fund.
Most of the Investors had invested in Reliance or UTI Mutual Fund,
ICICI Prudential has also good Brand Position among investors,
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Reliance MF places after ICICI Prudential according to the
Respondents.
Out of 55 investors of Reliance MF 64% have invested due to its
association with the Brand Reliance, 27% Invested because of
Advisors Advice and 9% due to better return.
Most of the investors who did not invested in Reliance MF due to not
Aware of Reliance MF, the second most due to Agents advice and rest
due to Less Return.
For Future investment the maximum Respondents preferred Reliance
Mutual Fund, the second most preferred ICICI Prudential, Reliance MF
has been preferred after them.
60% Investors preferred to Invest through Financial Advisors, 25%
through AMC (means Direct Investment) and 15% through Bank.
65% preferred One Time Investment and 35% preferred SIP out of
both type of Mode of Investment.
The most preferred Portfolio was Equity, the second most was Balance
(mixture of both equity and debt), and the least preferred Portfolio was
Debt portfolio.
Maximum Number of Investors Preferred Growth Option for returns,
the second most preferred Dividend Payout and then Dividend
Reinvestment.
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CONCLUSION
With the globalize economy and immense competition among countries for faster
development of their respective economies, the significance of Mutual Funds and Foreign
investment has taken manifold. With a buoyant vibrant and experienced stock market, India
today is looking ahead to surpass China in terms of foreign Investment and growth
74
CONCLUSION
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prospects. Stock exchange being the barometer of the economy plays a vital role in
showcasing growth of an economy and luring investment. While studying the role of Mutual
fund and FIIs in Stock Market, I discussed with a few persons who are into stock broking
business. And the information they have provided shows that though the investment and
participation of domestic investors are rising, still, they have not been able to prove
themselves to be as influential as mutual funds and FIIs.
Importance and the role of Mutual funds and FIIs play in the Indian stock market can be seen
from the fact that the recent surge in Sensex and NIFTY is attributed to the active
participation of FIIs in the Stock Market. Despite being aware of the Asian economic crisis
where FIIs role was of a major concern, the importance of foreign capital in the development
of economy can not be undermined in anyway so the people more emphasis on mutual fund
to earn more return increasing our benefit .
Running a successful Mutual Fund requires complete understanding of the
peculiarities of the Indian Stock Market and also the psyche of the small investors. This
study has made an attempt to understand the financial behavior of Mutual Fund investors in
connection with the preferences of Brand (AMC), Products, Channels etc. I observed that
many of people have fear of Mutual Fund. They think their money will not be secure in
Mutual Fund. They need the knowledge of Mutual Fund and its related terms. Many of
people do not have invested in mutual fund due to lack of awareness although they have
money to invest. As the awareness and income is growing the number of mutual fund
investors are also growing.
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Brand plays important role for the investment. People invest in those Companies
where they have faith or they are well known with them. There are many AMCs in
Moradabad but only some are performing well due to Brand awareness. Some AMCs are
not performing well although some of the schemes of them are giving good return because
of not awareness about Brand. Reliance, UTI, ICICI Prudential etc. they are well known
Brand, they are performing well and their Assets Under Management is larger than others
whose Brand name are not well known like Principle, Sunderam, etc.
Distribution channels are also important for the investment in mutual fund. Financial
Advisors are the most preferred channel for the investment in mutual fund. They can change
investors mind from one investment option to others. Many of investors directly invest their
money through AMC because they do not have to pay entry load. Only those people invest
directly who know well about mutual fund and its operations and those have time.
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SUGGESTIONS
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SUGGESTIONS
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The most vital problem spotted is of ignorance. Investors should be made
aware of the benefits. Nobody will invest until and unless he is fully
convinced. Investors should be made to realize that ignorance is no longer
bliss and what they are losing by not investing.
Mutual funds offer a lot of benefit which no other single option could offer.
But most of the people are not even aware of what actually a mutual fund is?
They only see it as just another investment option. So the advisors should try
to change their mindsets. The advisors should target for more and more young
investors. Young investors as well as persons at the height of their career
would like to go for advisors due to lack of expertise and time.
The advisors may try to highlight some of the value added benefits of Mutual
funds such as tax benefit, rupee cost averaging, and systematic transfer plan,
rebalancing etc. these benefits are not offered by other options single-
handedly. So these are enough to drive the investors towards mutual funds.
Investors could also try to increase the spectrum of services offered.
Now the most important reason for not availing the services of advisors was
spotted was being expensive. The advisors should try to charge a nominal fee
at the beginning. But if not possible then they could go for offering more
services and benefits at the existing rate. They should also maintain their
decency and follow the code of ethics so that the investors could trust upon
them. Thus the advisors should try to attract more and more persons and turn
them into investors and finally their clients.
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LIMITATION
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LIMITATIONS
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The study could not be made that comprehensive due to time constraints. Some customers
feel uncomfortable to reveal some personal information relating to income etc. it might have
happened that some more essential information could have been collected.
Time constraint.
Biases and non-cooperation of the respondents.
Financial constraint.
Geographical selectivity in study limiting to Moradabad city
People are not interested in giving personal opinion.
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BIBLIOGRAPHY
BOOKS:
Kothari C. R. Research Methodology Second Edition, Wishwa Prakashan.
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Donald S. Tull , Dell I. Hawkins Marketing Research Sixth Edition, Published
by Ashok k. Ghosh , Prentice-Hall Of India Pvt. Ltd.
JOURNALS:
Indian Journal of Marketing Volume xxxiv Oct 2006
IBAT Journal of Management Volume III Number 1 Jan 2007.
Journal of Indian Management & Strategy Volume 20, No.3, July, September
2007
MAGAZINES:
Business Today , November 21, 2007 issue
Business Today , November 21, 2007 issue
WEBSITE
www.reliancemoney.com
www.iloveindia.com/finance/...mutual-funds/reliance.html
www.connect.in.com/reliance-mutual-fund/profile-393400.html
www.financialexpress.com/.../reliance-mutual-fund...fund/466822
www.moneycontrol.com/mutualfundindia
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1. Personal Details:
Name:-
Add: - Phone:-(a) Age:-
Age Group 50
(b). Qualification:-
(c). Occupation. Pl tick ()
Govt. Ser Pvt. Ser Business Agriculture Others
(d). What is your monthly family income approximately? Pl tick ().
Up toRs.10,000
Rs. 10,001 to15000
Rs. 15,001 to20,000
Rs. 20,001 to30,000
Rs. 30,001and above
2. What kind of investments you have made so far? Pl tick (). All applicable.
a. Saving account b. Fixed deposits c. Insurance d. Mutual Funde. Post Office-NSC, etc f. Shares/Debentures g. Gold/ Silver h. Real Estate
3. While investing your money, which factor will you prefer?. (a) Liquidity (b) Low Risk (c) High Return (d) Trust
4. Are you aware about Mutual Funds and their operations? Pl tick (). Yes No
5. If yes, how did you know about Mutual Fund?
a. Advertisement b. Peer Group c. Banks d. Financial Advisors
6. Have you ever invested in Mutual Fund? Pl tick (). Yes No
Graduation/PG Under Graduate Others
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7. If not invested in Mutual Fund then why?
(a) Not aware of MF (b) Higher risk (c) Not any specific reason
8. If yes, inwhich Mutual Fund you have invested? Pl. tick (). All applicable.
a.
RELIANCEMF
b. UTI c.
HDFC
d. Reliance e. Kotak f. Other. specify
9. If invested in RELIANCEMF, you do so because (Pl. tick (), all applicable).
a. RELIANCEMF is associated with State Bank of India.b. They have a record of giving good returns year after year.c. Agent Advice
10. If NOT invested in RELIANCEMF, you do so because (Pl. tick () all applicable).
a. You are not aware of RELIANCEMF.b. RELIANCEMF gives less return compared to the others.
c. Agent Advice
11. Which Channel will you prefer while investing in Mutual Fund?
(a) Financial Advisor (b) Bank (c) AMC
12. When you invest in Mutual Funds which mode of investment will you prefer? Pl. tick().
a. One Time Investment b. Systematic Investment Plan (SIP)
13. When you want to invest ,which type of funds would you choose?
a. Having only debt portfolio b. Having debt & equity portfolio. c. Only equity portfolio.
14. How wouldyou like to receive the returns every year? Pl. tick ().
a. Dividend payout b. Dividend re-investment c. Growth in NAV
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