ANALYSIS OF THE CUSTOMER ATTITUDE, PREFERENCE AND

SATISFACTION LEVEL TOWARDS MUTUAL FUND

INVESTMENT
WITH REFERENCE TO
FRANKLIN TEMPLETON INDIA PVT LTD, VISAKHAPATNAM.

A project report submitted in partial fulfillment of the

requirements of the award of the degree of
MASTER OF BUSINESS ADMINISTRATION

Submitted by

M. LALIT KUMAR
(Reg no: - 1225109417)

Under the esteemed guidance of

MS. S. ANJANI DEVI
Asst. Prof

GITAM INSTITUTE OF MANAGEMENT

(NAAC Accredited ‘A’ Grade institution)
(GITAM University, Visakhapatnam.)
(2009-2011)
 DECLARATION

I hereby declare that the project report title “Analysis

of the customer attitude, preference and satisfaction
level towards mutual funds investments” is done and
submitted by me is a genuine work. And it is not submitted to any
other university or published at any time before. The project work is
partial fulfillment of the requirements for the award of M.B.A
Degree by the GITAM INSTITUTION OF MANAGEMENT, GITAM
UNIVERSITY, VISAKHAPATNAM.

Place:-Visakhapatnam.
Date:- / /2011
Signature of
the student
M. Lalit Kumar
(12251
09417)
GITAM Institutions of Management,
GITAM University, Visakhapatnam.
 CERTIFICATE

This is to certify that the project report entitled “Analysis of the

customer attitude, preference and satisfaction level
towards mutual funds investments” with reference to
Franklin Templeton Investments India Pvt Ltd,
Visakhapatnam, is a bonafied, work carried out by M. Lalit Kumar
under my guidance in partial fulfillment for the award of degree of
“MASTER OF BUSINESS ADMINISTRATION” during the period
2009-2011.

Place: - Visakhapatnam.
Date:- / /2011
MS. S. ANJANI
DEVI
Asst. Prof.
GITAM
INSTITUTE OF MANAGEMENT
GITAM UNIVERSITY, VISAKHAPATNAM
 PREFACE

“Give a man a fish, he will eat it. Train a man to fish,

He will feed his family.”
The above saying highlights the importance of Practical
knowledge. Practical training is an important part of the
theoretical studies. It is of an immense importance in the field
of management. It offers the student to explore the valuable
treasure of experience and an exposure to real work culture
followed by the industries and thereby helping the students to
bridge gap between the theories explained in the books and
their practical implementations.
Project plays an important role in future building of an individual
so that he/she can better understand the real world in which he
has to work in future. The theory greatly enhances our
knowledge and provides opportunities to blend theoretical with
the practical knowledge.
I have done my Project on “Customer attitude, preference
and satisfaction level towards investment of mutual
fund”. I have tried to cover each and every aspect related to
the topic with best of my capability.
I hope this study would help many people in the future.
(Lalit
Kumar)

(1225109417)
 ACKNOWLEDGEMENT

I am thankful to Prof. K. Shiva Ramakrishna, Principal

of GITAM Institute of Management, Prof. P. Sheela, Vice
Principal of GITAM Institute of Management, and Associate
Prof K. Uma Devi, Program Co-ordinator, GITAM Institute of
Management, GITAM University, Visakhapatnam, for
providing me the opportunity to do my project.

I express my sincere thanks to Ms. S. Anjani Devi, whose

supervision, valuable guidance and help, enabled me to
complete this project work.

This project is a result of the hard work and sincere effort

put by my hands. And I am grateful to Mr. Shivaram Pandey
(Sales head Andhra Pradesh) for giving me this opportunity
to do my project work in Franklin Templeton Investments
India Pvt Ltd, Visakhapatnam.

I convey my sincere thanks to Mr. Suresh Kumar Sela,

Pavan Patnaik and Sumitha Nair for the constant advice and
encouragement.

I also wish to express my sincere thanks to all the

customers of Franklin Templeton Investments India Pvt
Ltd, Visakhapatnam, who have directly or indirectly help me
in completing my project work.

CONTENTS

Chapter 1
Page No.
• Meaning of Mutual Funds 02 - 07
• Classification of Mutual Fund 08 - 12
• Performance of Mutual Funds in India 13
- 15
• Other Important Concepts 16
- 33

Chapter 2
• Need of the study 34
• Objectives of the study 35
• Scope of the study 36
• Methodology 37
• Presentation of the study 38
• Limitation 39

Chapter 3
Profile
• Industry Profile 40
- 47
• Organization Profile 48 - 62
• Product Profile at Franklin Templeton 62
- 82

Chapter 4
 Analysis of Study 83 -
107

Chapter 5
• Findings 108 -
110
• Suggestions 111 -
113
• Conclusion 114 -
115

Bibliography 116
Annexure
List of Tables

No. Title
Page No.

1.1 Savings Plan 83

1.2 Investment plans 85

1.3 Age consideration 87
1.4 Period of investment 89
1.5 Interested in Mutual Fund 91
1.6 Anticipation of Risk 93
1.7 Primary Goal 95
1.8 Risk with Return Expected 97
1.9 Age combination 99
1.10 Factors to consider 102
1.11 Service providers 104
1.12 Satisfaction Level 106

List of Graphs

2.1 Savings Plan 83

2.2 Investment plans 85
2.3 Age consideration 87
2.4 Period of investment 89
2.5 Interested in Mutual Fund 91
2.6 Anticipation of Risk 93
2.7 Primary Goal 95
2.8 Risk with Return Expected 97
2.9 Age combination 99
2.10 Factors to consider 102
2.11 Service providers 104
2.12 Satisfaction Level 106

INTRODUCTION
Mutual funds are basically financial intermediaries, which collect the
savings of investors and invest them in a large and well-diversified
portfolio of securities such as money market instruments, corporate
and government bonds and equity shares of joint stock companies. A
mutual fund is a pool of common funds invested by different
investors, who have no contact with each other. Mutual funds
are conceived as institutions for providing small investors with
avenues of investments in the capital market. Since small investors
generally do not have adequate time, knowledge, experience and
resources for directly accessing the capital market, they have to rely
on an intermediary, which undertakes informed investment decisions
and provides consequential benefits of professional expertise. The
raison of mutual funds is their ability to bring down the transaction
costs. The advantages for the investors are reduction in risk, expert
professional management, diversified portfolios, liquidity of
investment and tax benefits. By pooling their assets through mutual
funds, investors achieve economies of scale. The interests of the
investors are protected by the SEBI, which acts as a watchdog.
Mutual funds are governed by the SEBI (Mutual Funds) Regulations,
1996.

MUTUAL FUND OPERATIONS FLOW CHART

The flow chart below describes broadly the working of a Mutual
Fund:

THE GOAL
OF
MUTUAL FUND
The goal of a mutual fund is to provide an individual to make money.
There are several thousand mutual funds with different investments
strategies and goals to chosen from. Choosing one can be over
whelming, even though it need not be different mutual funds have
different risks, which differ because of the fund’s goals fund
manager, and investment style. The fund itself will still increase in
value, and in that way you may also make money therefore the
value of shares you hold in mutual fund will increase in value when
the holdings increases in value capital gains and income or dividend
payments are best reinvested for younger investors Retires often
seek the income from dividend distribution to augment their income
with reinvestment of dividends and capital distribution your money
increase at an even greater rate. When you redeem your shares
what you receive is the value of the share.
ORGANISATION OF A MUTUAL FUND
There are many entities involved and the diagram below
illustrates the organizational set up of a mutual fund:

HISTORICAL VIEW:
History and Structure of Indian Mutual Fund Industry
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. The history of mutual funds in India can be broadly
divided into four distinct phases:
First Phase – 1964-87:
Unit Trust of India (UTI) was established on 1963 by an Act of
Parliament. It was set up by the Reserve Bank of India and
functioned under the Regulatory and administrative control of the
Reserve Bank of India. In 1978 UTI was de-linked from the RBI and
the Industrial Development Bank of India (IDBI) took over the
regulatory and administrative control in place of RBI. The first
scheme launched by UTI was Unit Scheme 1964. At 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). SBI Mutual Fund
was the first non- UTI Mutual Fund established in June 1987 followed
by Can-bank 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):
With the entry of private sector funds in 1993, a new era started in
the Indian mutual fund industry, giving the Indian investors a wider
choice of fund families. Also, 1993 was the year in which the first
Mutual Fund Regulations came into being, under which all mutual
funds, except UTI were to be registered and governed. The erstwhile
Kothari Pioneer (now merged with Franklin Templeton) was the first
private sector mutual fund registered in July 1993. The 1993 SEBI
(Mutual Fund) Regulations were substituted by a more
comprehensive and revised Mutual Fund Regulations in 1996. The
industry now functions under the SEBI (Mutual Fund) Regulations
1996. The number of mutual fund houses went on increasing, with
many foreign mutual funds setting up funds in India and also the
industry has witnessed several mergers and acquisitions. As at the
end of January 2003, there were 33 mutual funds with total assets of
Rs. 1, 21,805 crores. The Unit Trust of India with Rs.44, 541
crores of assets under management was way ahead of other mutual
funds.
Fourth Phase – since February 2003:
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 Specified Undertaking of Unit Trust
of India, functioning under an administrator and under the rules
framed by Government of India and does not come under the
purview of the Mutual Fund Regulations. The second is the UTI
Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is registered
with SEBI and functions under the Mutual Fund Regulations. With the
bifurcation of the erstwhile UTI which had in March 2000 more than
Rs.76, 000 crores of assets under management and with the setting
up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund
Regulations, and with recent mergers taking place among different
private sector funds, the mutual fund industry has entered its
current phase of consolidation and growth. As at the end of
September, 2004, there were 29 funds, which manage assets of
Rs.1, 53, 108 crores under 421 schemes.
 CLASSIFICATION OF MUTUAL FUND SCHEMES:
Any mutual fund has an objective of earning income for the investors
and/ or getting increased value of their investments. To achieve
these objectives mutual funds adopt different strategies and
accordingly offer different schemes of investments. On this basis the
simplest way to categorize schemes would be to group these into
two broad classifications:
OPERATIONAL AND PORTFOLIO CLASSIFICATION:
Operational classification highlights the two main types of
schemes, i.e., open-ended and close-ended which are offered by the
mutual funds.
Portfolio classification projects the combination of investment
instruments and investment avenues available to mutual funds to
manage their funds. Any portfolio scheme can be either open ended
or close ended.
Operational Classification:
 Open Ended Schemes: As the name implies the size of the
scheme (Fund) is open – i.e., not specified or pre-determined.
Entry to the fund is always open to the investor who can
subscribe at any time. Such fund stands ready to buy or sell its
securities at any time. It implies that the capitalization of the
fund is constantly changing as investors sell or buy their
shares. Further, the shares or units are normally not traded on
the stock exchange but are repurchased by the fund at
announced rates. Open-ended schemes have comparatively
better liquidity despite the fact that these are not listed. The
reason is that investors can any time approach mutual fund for
sale of such units. No intermediaries are required. Moreover,
the realizable amount is certain since repurchase is at a price
based on declared net asset value (NAV). No minute to minute
fluctuations in rates haunt the investors. The portfolio mix of
such schemes has to be investments, which are actively traded
in the market. Otherwise, it will not be possible to calculate
NAV. This is the reason that generally open-ended schemes are
equity based. Moreover, desiring frequently traded securities,
open-ended schemes hardly have in their portfolio shares of
comparatively new and smaller companies since these are not
generally traded. In such funds, option to reinvest its dividend
is also available. Since there is always a possibility of
withdrawals, the management of such funds becomes more
tedious as managers have to work from crisis to crisis. Crisis
may be on two fronts, one is, that unexpected withdrawals
require funds to maintain a high level of cash available every
time implying thereby idle cash. Fund managers have to face
questions like ‘what to sell’. He could very well have to sell his
most liquid assets. Second, by virtue of this situation such
funds may fail to grab favorable opportunities. Further, to
match quick cash payments, funds cannot have matching
realization from their portfolio due to intricacies of the stock
market. Thus, success of the open-ended schemes to a great
 extent depends on the efficiency of the capital market and the
selection and quality of the portfolio.

 Close Ended Schemes: Such schemes have a definite period

after which their shares/ units are redeemed. Unlike open-
ended funds, these funds have fixed capitalization, i.e., their
corpus normally does not change throughout its life period.
Close ended fund units trade among the investors in the
secondary market since these are to be quoted on the stock
exchanges. Their price is determined on the basis of demand
and supply in the market. Their liquidity depends on the
efficiency and understanding of the engaged broker. Their price
is free to deviate from NAV, i.e., there is every possibility that
the market price may be above or below its NAV. If one takes
into account the issue expenses, conceptually close ended fund
units cannot be traded at a premium or over NAV because the
price of a package of investments, i.e., cannot exceed the sum
of the prices of the investments constituting the package.
Whatever premium exists that may exist only on account of
speculative activities. In India as per SEBI (MF) Regulations
every mutual fund is free to launch any or both types of
schemes.

Portfolio Classification of Funds:

Following are the portfolio classification of funds, which may be
offered. This classification may be on the basis of (A) Return, (B)
Investment Pattern, (C) Specialized sector of investment, (D)
Leverage and (E) Others.
Return based classification:
To meet the diversified needs of the investors, the mutual fund
schemes are made to enjoy a good return. Returns expected are in
form of regular dividends or capital appreciation or a combination of
these two.
1. Income Funds: For investors who are more curious for
returns, Income funds are floated. Their objective is to
maximize current income. Such funds distribute periodically
the income earned by them. These funds can further be spitted
up into categories: those that stress constant income at
relatively low risk and those that attempt to achieve maximum
income possible, even with the use of leverage. Obviously, the
higher the expected returns, the higher the potential risk of the
investment.

2. Growth Funds: Such funds aim to achieve increase in the

value of the underlying investments through capital
appreciation. Such funds invest in growth oriented securities
which can appreciate through the expansion production
facilities in long run. An investor who selects such funds should
be able to assume a higher than normal degree of risk.

3. Conservative Funds: The fund with a philosophy of “all things

to all” issue offer document announcing objectives as: (i) To
provide a reasonable rate of return, (ii) To protect the value of
investment and, (iii) To achieve capital appreciation consistent
with the fulfillment of the first two objectives. Such funds which
offer a blend of immediate average return and reasonable
capital appreciation are known as “middle of the road” funds.
Such funds divide their portfolio in common stocks and bonds
in a way to achieve the desired objectives. Such funds have
been most popular and appeal to the investors who want both
growth and income.

 Investment Based Classification:

Mutual funds may also be classified on the basis of securities in
which they invest. Basically, it is renaming the subcategories of
return based classification.
1. Equity Fund: Such funds, as the name implies, invest most of
their investible shares in equity shares of companies and
undertake the risk associated with the investment in equity
shares. Such funds are clearly expected to outdo other funds in
rising market, because these have almost all their capital in
equity. Equity funds again can be of different categories
varying from those that invest exclusively in high quality ‘blue
chip companies to those that invest solely in the new,
unestablished companies. The strength of these funds is the
expected capital appreciation. Naturally, they have a higher
degree of risk.

2. Bond Funds: such funds have their portfolio consisted of

bonds, debentures, etc. this type of fund is expected to be very
secure with a steady income and little or no chance of capital
appreciation. Obviously risk is low in such funds. In this
category we may come across the funds called ‘Liquid Funds’
which specialize in investing short-term money market
instruments. The emphasis is on liquidity and is associated with
lower risks and low returns.

3. Balanced Fund: The funds, which have in their portfolio a

reasonable mix of equity and bonds, are known as balanced
funds. Such funds will put more emphasis on equity share
investments when the outlook is bright and will tend to switch
to debentures when the future is expected to be poor for
shares.

 Sector Based Funds:

There are number of funds that invest in a specified sector of
economy. While such funds do have the disadvantage of low
diversification by putting all their all eggs in one basket, the policy of
specializing has the advantage of developing in the fund managers
an intensive knowledge of the specific sector in which they are
investing. Sector based funds are aggressive growth funds which
make investments on the basis of assessed bright future for a
particular sector. These funds are characterized by high viability,
hence more risky.

PERFORMANCE OF MUTUAL FUND IN INDIA

The performance of mutual funds in India from the day the concept
of mutual fund took birth in India. The year was 1963 Unit Trust of
India invited investors or rather to those who believed in savings, to
park their money in UTI Mutual Fund. For 30 years it ranked top
without a single second player. Though the 1988 year saw some new
mutual fund companies, but UTI remained in a monopoly position.
The performance of mutual funds in India in the initial phase was not
even closer to satisfactory level. People rarely understood, and of
course investing was out of question. But yes, some 24 million
shareholders was accustomed with guaranteed high returns by the
beginning of liberalization of the industry in 1992. This good record
of UTI became marketing tool for new entrants. The expectations of
investors touched the sky in profitability factor. However, people
were miles away from the preparedness of risks factor after the
liberalization.
The Assets under Management of UTI was Rs. 67bn. by the end of
1987. Let me concentrate about the performance of mutual funds in
India through figures. From Rs. 67bn. the Assets under Management
rose to Rs. 470 bn. in March 1993 and the figure had a three times
higher performance by April 2004. It rose as high as Rs. 1,540bn.
The net asset value (NAV) of mutual funds in India declined when
stock prices started falling in the year 1992. Those days, the market
regulations did not allow portfolio shifts into alternative investments.
There were rather no choices apart from holding the cash or to
further continue investing in shares. One more thing to be noted,
since only closed-end funds were floated in market, the investors
disinvested by selling at a loss the in the secondary market.
The performance of mutual funds in India suffered qualitatively. The
1992 stock market scandal, the losses by disinvestments and of
course the lack of transparent rules in the whereabouts rocked
confidence among the investors. Partly owing to a relatively weak
stock market performance, mutual funds have not yet recovered,
with funds trading at an average discount of 1020 percent of their
net asset value.
The supervisory authority adopted a set of measures to create a
transparent and competitive environment in mutual funds. Some of
them were like relaxing investment restrictions into the market,
introduction of open-ended funds, and paving the gateway for
mutual funds to launch pension schemes.

The measure was taken to make mutual funds the key instrument for
long-term saving. The more the variety offered, the quantitative will
be investors. At last to mention, as long as mutual fund companies
are performing with lower risks and higher profitability within a short
span of time, more and more people will be inclined to invest until
and unless they are fully educated with the dos and don’ts of mutual
funds
 MUTUAL FUNDS FOR WHOM?
These funds can survive and thrive only if they can live up to the
hopes and trusts of their individual members. These hopes and
trusts echo the peculiarities which support the emergence and
growth of such insecurity of such investors who come to the rescue
of such investors who face following constraints while making direct
investments:
 Limited resources in the hands of investors quite often take
them away from stock market transactions.

 Lack of funds forbids investors to have a balanced and

diversified portfolio.

 Lack of professional knowledge associated with investment

business unable investors to operate gainfully in the market.
Small investors can hardly afford to have ex-pensive
investment consultations.

 To buy shares, investors have to engage share brokers who are

the members of stock exchange and have to pay their
brokerage.

 They hardly have access to price sensitive information in time.

 It is difficult for them to know the development taking place in

share market and corporate sector.

 Firm allotments are not possible for small investors on when

there is a trend of over subscription to public issues.
 WHY MUTUAL FUNDS?
Mutual Funds are becoming a very popular form of investment
characterized by many advantages that they share with other forms
of investments and what they possess uniquely themselves. The
primary objectives of an investment proposal would fit into one or
combination of the two broad categories, i.e., Income and Capital
gains. How mutual fund is expected to be over and above an
individual in achieving the two said objectives, is what attracts
investors to opt for mutual funds. Mutual fund route offers several
important advantages.
Diversification: A proven principle of sound investment is
diversification, which is the idea of not putting all your eggs in one
basket. By investing in many companies the mutual funds can
protect themselves from unexpected drop in values of some shares.
The small investors can achieve wide diversification on his own
because of many reasons, mainly funds at his disposal. Mutual funds
on the other hand, pool funds of lakhs of investors and thus can
participate in a large basket of shares of many different companies.
Majority of people consider diversification as the major strength of
mutual funds.
Expertise Supervision: Making investments is not a full time
assignment of investors. So they hardly have a professional attitude
towards their investment. When investors buy mutual fund scheme,
an essential benefit one acquires is expert management of the
money he puts in the fund. The professional fund managers who
supervise fund’s portfolio take desirable decisions viz., what scrip’s
are to be bought, what investments are to be sold and more
appropriate decision as to timings of such buy and sell. They have
extensive research facilities at their disposal, can spend full time to
investigate and can give the fund a constant supervision. The
performance of mutual fund schemes, of course, depends on the
quality of fund managers employed.
Liquidity of Investment: A distinct advantage of a mutual fund
over other investments is that there is always a market for its unit/
shares. Moreover, Securities and Exchange Board of India (SEBI)
requires the mutual funds in India have to ensure liquidity. Mutual
funds units can either be sold in the share market as SEBI has made
it obligatory for closed-ended schemes to list themselves on stock
exchanges. For open-ended schemes investors can always approach
the fund for repurchase at net asset value (NAV) of the scheme.
Such repurchase price and NAV is advertised in newspaper for the
convenience of investors.
Reduced risks: Risk in investment is as to recovery of the principal
amount and as to return on it. Mutual fund investments on both
fronts provide a comfortable situation for investors. The expert
supervision, diversification and liquidity of units ensured in mutual
funds reduces the risks. Investors are no longer expected to come to
grief by falling prey to misleading and motivating ‘headline’ leads
and tips, if they invest in mutual funds.
Safety of Investment: Besides depending on the expert
supervision of fund managers, the legislation in a country (like SEBI
in India) also provides for the safety of investments. Mutual funds
have to broadly follow the laid down provisions for their regulations,
SEBI acts as a watchdog and attempts whole heatedly to safeguard
investor’s interests.
Tax Shelter: Depending on the scheme of mutual funds, tax shelter
is also available. As per the Union Budget-2003, income earned
through dividends from mutual funds is 100% tax-free at the hands
of the investors.
Minimize Operating Costs: Mutual funds having large invisible
funds at their disposal avail economies of scale. The brokerage fee
or trading commission may be reduced substantially. The reduced
operating costs obviously increase the income available for
investors.
Investing in securities through mutual funds has many advantages
like – option to reinvest dividends, strong possibility of capital
appreciation, regular returns, etc. Mutual funds are also relevant in
national interest. The test of their economic efficiency as financial
intermediary lies in the extent to which they are able to mobilize
additional savings and channeling to more productive sectors of the
economy.

TYPES OF RETAIL INVESTORS

The Economic Times survey on retail equity investors in the
secondary market has identified different categories of investors
based on their characteristics. Many questions are raised about the
behavior of the small investor under different circumstances. The
answers to many of these questions and similar others is not difficult
to interpret once we identify the different types of retail investors in
the stock markets.
The survey shows that there are five different kinds of retail
investors:
 Intellectuals

 Cavaliers

 Reactivates

 Opportunists

 Gamblers

This classification is based on the attitudes of investors towards

secondary market investments. Let’s explain each type of investor
and understand their investment psyche and behavioral patterns.
INTELLECTUALS:
This retail investor group forms around 17% of the total retail
investment class. They are the intelligent investors who follow an
intelligent, individualist approach to investment planning and a well-
defined and deliberate strategy for stock investment. These
investors are self reliant good stock pickers and try to monetize
market knowledge.
Giving proof of their intelligence, they consider low-risk; low–gain
guaranteed return avenues as passé. Also, they believe in and work
towards a well-planned. Asset allocation and seek the right mix of
stability and reliability of returns.
The ‘intellectuals’ are unaffected by short–term fluctuations and
prefer long–term investments. Moreover, they are disciplined enough
to observe profit targets which they have set for themselves. And as
they invest for the long term, they are not concerned with short term
losses. They manager their money themselves and understand the
industry/sector before investing.
CAVALIERS:
As high as 49% of the small retail equity investors are ‘cavaliers’.
They are those who have lost money in ‘fly-by –night ‘schemes.
Therefore, much of their investments are driven by the desire to
recover past losses and make profits in the future. As such, they
invest aggressively into equities, mostly in volatile sectors in order to
make big gains. However, they will also invest in FDs and insurance
as a precautionary measure. They get tempted to speculate in the
secondary market and once in a while, they actually speculate but
with smaller amounts. The cavaliers try to gather all available
information and compare it with opinions from experts in the media,
but will trust their own judgment before making decisions.
REACTIVISTS:
About 5% of the retail equity investors fall under this category.
These investors basically short-term investors, are impulsive info
addicts who are vulnerable to external influences and as such, they
have no specific investment patterns, They believe that dynamic and
ad hoc investments will result in better profits and are prompted to
act on popular opinion rather than systematic planning. As they lack
in confidence, experience and expertise, they constantly rely on
advice from in the know people such as brokers and analysts. They
are extremely anxious about price fluctuations or short-term
declines. They are very skeptical and believe that small declines can
lead to larger losses if not reacted upon immediately. Therefore, the
reactivists constantly seek new information about stocks in which
they are currently invested in, to ensure a feeling of security.
Moreover, their investments apart from equities are solely for tax-
saving purposes.
OPPORTUNISTS:
This class of investors account for 10% of the retail equity investor
universe. This category is defensively pessimistic and prefers to take
only familiar risks. As they have a low risk tolerance, they are wary
of volatility in the equity market. They invest into equities by
imitating larger trends rather than with their individual analysis and
consider equity investment as a gamble. They want to be in the
black all the time and as such, prefer popular stocks with immediate
profit potential. Opportunists need positive price movements to
encourage their investments into equities and they will not hunt for
bargains of invest on price declines. But before investing into
equities. They prefer to build a critical mass of fixed income
instruments as they find fixed income options a reassuring way of
safe bets. The opportunists‘choice of investments as they find fixed
income options a reassuring way of safe bets. The opportunist’s
choice of investment is biased towards well known and previously
owned securities, including equities. This investor class is wary of
investing into equities when the market has moved up too high too
soon. So, if you have not invested in the current market, you are
probably an ‘opportunist’.
GAMBLERS:
19% the retail investor population is made up of not actual investors.
But gamblers.’ They are the typical thrill seeking traders who link
profitability to personal achievement. They experiment a lot, mostly
driven by instinct and self confidence; as such their stock selection is
more a random exercise that lacks rationale. This class perceives all
securities as tradable commodities to be bought and sold in the
short term. However, they know completely about the risk factors
and therefore, have a tendency to invest only as much as they are
willing to lose. As a part, of the game and this does not act as a
hindrance for future investments. They do not trust brokers, but will
secretly verify their suggestions for fear of missing an opportunity.
They ascertain fair value of stocks on gut feeling rather than any
financial analysis and use sudden downward fluctuations as buying
opportunities.
 MARKETING STRATEGIES ADOPTED BY THE
MUTUAL FUNDS
The present marketing strategies of mutual funds can be divided into
two main headings:
 Direct marketing

 Selling through intermediaries.

 Joint Calls

Direct Marketing:
This constitutes 20 percent of the total sales of mutual funds. Some
of the important tools used in this type of selling are:
Personal Selling: In this case the customer support officer or
Relationship Manager of the fund at a particular branch takes
appointment from the potential prospect. Once the appointment is
fixed, the branch officer also called Business Development Associate
(BDA) in some funds then meets the prospect and gives him all
details about the various schemes being offered by his fund. The
conversion rate in this mode of selling is in between 30% - 40%.
Telemarketing: In this case the emphasis is to inform the people
about the fund. The names and phone numbers of the people are
picked at random from telephone directory. Some fund houses have
their database of investors and they cross sell their other products.
Sometimes people belonging to a particular profession are also
contacted through phone and are then informed about the fund.
Generally the conversion rate in this form of marketing is 15% - 20%.
Direct mail: This one of the most common method followed by all
mutual funds. Addresses of people are picked at random from
telephone directory, business directory, professional directory etc.
The customer support officer (CSO) then mails the literature of the
schemes offered by the fund. The follow up starts after 3 – 4 days of
mailing the literature. The CSO calls on the people to whom the
literature was mailed. Answers their queries and is generally
successful in taking appointments with those people. It is then the
job of BDA to try his best to convert that prospect into a customer.
Advertisements in newspapers and magazines: The funds
regularly advertise in business newspapers and magazines besides
in leading national dailies. The purpose to keep investors aware
about the schemes offered by the fund and their performance in
recent past. Advertisement in TV/FM Channel: The funds are
aggressively giving their advertisements in TV and FM Channels to
promote their funds.
Hoardings and Banners: In this case the hoardings and banners of
the fund are put at important locations of the city where the
movement of the people is very high. The hoarding and banner
generally contains information either about one particular scheme or
brief information about all schemes of fund.
Selling through intermediaries:
Intermediaries contribute towards 80% of the total sales of mutual
funds. These are the people/ distributors who are in direct touch with
the investors. They perform an important role in attracting new
customers. Most of these intermediaries are also involved in selling
shares and other investment instruments. They do a commendable
job in convincing investors to invest in mutual funds. A lot depends
on the after sale services offered by the intermediary to the
customer. Customers prefer to work with those intermediaries who
give them right information about the fund and keep them abreast
with the latest changes taking place in the market especially if they
have any bearing on the fund in which they have invested.
Regular Meetings with distributors: Most of the funds conduct
monthly/bi-monthly meetings with their distributors. The objective is
to hear their complaints regarding service aspects from funds side
and other queries related to the market situation. Sometimes,
special training programs are also conducted for the new agents/
distributors. Training involves giving details about the products of
the fund, their present performance in the market, what the
competitors are doing and what they can do to increase the sales of
the fund.
Joint Calls:
This is generally done when the prospect seems to be a high net
worth investor. The BDA and the agent (who is located close to the
HNI’s residence or area of operation) together visit the prospect and
brief him about the fund. The conversion rate is very high in this
situation, generally, around 60%. Both the fund and the agent
provide even after sale services in this particular case.
Meetings with HNI’s: This is a special feature of all the funds.
Whenever a top official visits a particular branch office, he devotes
at least one to two hours in meeting with the HNI’s of that particular
area. This generally develops a faith among the HNI’s towards the
fund.
Advantages:
Portfolio diversification: - Mutual Funds invest in a well-diversified
portfolio of securities which enables investor to hold a diversified
investment portfolio (whether the amount of investment is big or
small)
Professional management: - Fund manager undergoes through
various research works and has better investment management
skills which ensure higher returns to the investor than what he can
manage on his own.
Less risk: - Investors acquire a diversified portfolio of securities
even with a small investment in a Mutual Fund. The risk in a
diversified portfolio is lesser than investing in merely 2 or 3
securities.
Low transaction cost: - Due to the economies of scale (benefits of
larger volumes), mutual funds pay lesser transaction costs. These
benefits are passed on to the investors.
Liquidity: - An investor may not be able to sell some of the shares
held by him very easily and quickly, whereas units of a mutual fund
are far more liquid.
Choice of scheme: - Mutual funds provide investors with various
schemes with different investment objectives. Investors have the
option of investing in a scheme having a correlation between its
investment objectives and their own financial goals. These schemes
further have different plans/options
Transparency: - Funds provide investors with updated information
pertaining to the markets and the schemes. All material facts are
disclosed to investors as required by the regulator.
Flexibility: - Investors also benefit from the convenience and
flexibility offered by Mutual Funds. Investors can switch their
holdings from a debt scheme to an equity scheme and vice-versa.
Option of systematic (at regular intervals) investment and
withdrawal is also offered to the investors in most open-end
schemes.
Safety: - Mutual Fund industry is part of a well-regulated investment
environment where the interests of the investors are protected by
the regulator. All funds are registered with SEBI and complete
transparency is forced.

Disadvantages:-
Cost control not in the hands of Investors: - Investor has to pay
investment management fees and fund distribution costs as a
percentage of the value of his investments (as long as he holds the
units), irrespective of the performance of the fund.
No customized portfolio: - The portfolio of securities in which a
fund invests is a decision taken by the fund manager. Investors have
no right to interfere in the decision making process of a fund
manager, which some investors find as a constraint in achieving
their financial objectives.
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 may have to take
advice from financial planners in order to invest in the right fund to
achieve their objectives.
Load structure:-
Load Funds
Mutual Funds incur various expenses on marketing, distribution,
advertising, portfolio churning, fund manager's salary etc. Many
funds recover these expenses from the investors in the form of load.
These funds are known as Load Funds. A load fund may impose
following types of loads on the investors:

1. Entry Load - Also known as Front-end load, it refers to the load

charged to an investor at the time of his entry into a scheme.
Entry load is deducted from the investor's contribution amount
to the fund.
 2. Exit Load - Also known as Back-end load, these charges are
imposed on an investor when he redeems his units (exits from
the scheme). Exit load is deducted from the redemption
proceeds to an outgoing investor.
3. Deferred Load - Deferred load is charged to the scheme over a
period of time.
4. Contingent Deferred Sales Charge (CDSC) - In some schemes,
the percentage of exit load reduces as the investor stays
longer with the fund. This type of load is known as Contingent
Deferred Sales Charge.

No-load Funds
All those funds that do not charge any of the above mentioned loads
are known as No-load Funds.

Tax exemption:
Tax-exempt Funds
Funds that invest in securities free from tax are known as Tax-
exempt Funds. All open-end equity oriented funds are exempt from
distribution tax (tax for distributing income to investors). Long term
capital gains and dividend income in the hands of investors are tax-
free.
Non-Tax-exempt Funds
Funds that invest in taxable securities are known as Non-Tax-exempt
Funds. In India, all funds, except open-end equity oriented funds are
liable to pay tax on distribution income. Profits arising out of sale of
units by an investor within 12 months of purchase are categorized as
short-term capital gains, which are taxable. Sale of units of an equity
oriented fund is subject to Securities Transaction Tax (STT). STT is
deducted from the redemption proceeds to an investor.
Risk Hierarchy of Different Mutual Funds:-
Thus, different mutual fund schemes are exposed to different levels
of risk and investors should know the level of risks associated with
these schemes before investing. The graphical representation
hereunder provides a clearer picture of the relationship between
mutual funds and levels of risk associated with these funds:
LITERATURE REVIEW

Literature on mutual fund performance evaluation is enormous.

A few research studies that have influenced the preparation of
this paper substantially are discussed in this section.

Sharpe, William F. (1966) suggested a measure for the

evaluation of portfolio performance. Drawing on results
obtained in the field of portfolio analysis, economist Jack L.
Treynor has suggested a new predictor of mutual fund
performance, one that differs from virtually all those used
previously by incorporating the volatility of a fund's return in a
simple yet meaningful manner.

Michael C. Jensen (1967) derived a risk-adjusted measure of

portfolio performance (Jensen’s alpha) that estimates how much
a manager’s forecasting ability contributes to fund’s returns. As
indicated by Statman (2000), the e SDAR of a fund portfolio is
the excess return of the portfolio over the return of the
benchmark index, where the portfolio is leveraged to have the
benchmark index’s standard deviation.
S.Narayan Rao, evaluated performance of Indian mutual funds
in a bear market through relative performance index, risk-
return analysis, Treynor’s ratio, Sharpe’s ratio, Sharpe’s
measure , Jensen’s measure, and Fama’s measure. The study
used 269 open-ended schemes (out of total schemes of 433) for
computing relative performance index. Then after excluding
funds whose returns are less than risk-free returns, 58 schemes
are finally used for further analysis. The results of performance
measures suggest that most of mutual fund schemes in the
sample of 58 were able to satisfy investor’s expectations by
giving excess returns over expected returns based on both
premium for systematic risk and total risk. Bijan Roy, et. al.,
conducted an empirical study on conditional performance of
Indian mutual funds. This paper uses a technique called
conditional performance evaluation on a sample of eighty-nine
Indian mutual fund schemes .This paper measures the
performance of various mutual funds with both unconditional
and conditional form of CAPM, Treynor- Mazuy model and
Henriksson-Merton model. The effect of incorporating lagged
information variables into the evaluation of mutual fund
managers’ performance is examined in the Indian context. The
results suggest that the use of conditioning lagged information
variables improves the performance of mutual fund schemes,
causing alphas to shift towards right and reducing the number
of negative timing coefficients. Mishra, et al., (2002) measured
mutual fund performance using lower partial moment. In this
paper, measures of evaluating portfolio performance based on
lower partial moment are developed. Risk from the lower partial
moment is measured by taking into account only those states in
which return is below a pre-specified “target rate” like risk-free
rate. Kshama Fernandes (2003) evaluated index fund
implementation in India. In this paper, tracking error of index
funds in India is measured .The consistency and level of
tracking errors obtained by some well-run index fund suggests
that it is possible to attain low levels of tracking error under
Indian conditions. At the same time, there do seem to be
periods where certain index funds appear to depart from the
discipline of indexation. K. Pendaraki et al. studied construction
of mutual fund portfolios, developed a multi-criteria
methodology and applied it to the Greek market of equity
mutual funds. The methodology is based on the combination of
discrete and continuous multi-criteria decision aid methods for
mutual fund selection and composition. UTADIS multi-criteria
decision aid method is employed in order to develop mutual
fund’s performance models. Goal programming model is
employed to determine proportion of selected mutual funds in
the final portfolios.
 NEED FOR THE STUDY

 To study the investors intention with regard to the products in

mutual funds and their features.
 To study awareness level of customers.
 To study the preference and satisfaction level of investors.
 To apprehend mutual funds movement in the market.
 To analyze how it benefited to investors.

With the awareness that is increasing day by day regarding investing

in secondary market and speculation, the comfort and flexibility the
customers seeking, there is a definite requirement to study.
In the fast growing competitive market scenario it is always required
to have an idea of changes that are taking place in the market from
time to time. Without which one can’t serve their customers
properly.
 OBJECTIVES OF THE STUDY

1. To enhance our knowledge about the subject.

2. Evaluate Perception towards risk involved in mutual funds in

comparison to other financial avenues.

3. How effectively investment houses are reaching their

customers.

4. To have a vivid picture of major players in Mutual Fund Industry

in India.

5. To study how the promotional activities of Mutual Fund

products in India.

6. To study the pattern of consumer behavior within the available

investment options and to test awareness among the consumer
about the various mutual fund houses.
 SCOPE OF THE STUDY

In today's complex financial environment, investors have unique

needs, which are derived from their risk appetite and financial goals.
Mutual funds (customized portfolios) recognize this, and
manage the investments professionally to achieve specific
investment objectives, and not to forget, relieving the investors from
the day-to-day hassles which investment require.

 It is offers professional management of equity and debt

diversified investment of the investor with an aim to deliver
consistent return with an eye on risk.
 Identify the key sectorial stocks in each portfolio.

 To look out for new prospective customers who are willing to

invest in Mutual Funds of Franklin Templeton, Visakhapatnam.
 To find out the Franklin Templeton Investments’, Mutual Funds
effectiveness in the current market situation.
It also covers the scenario of the Investment Philosophy of a Fund
Manager.
 RESEARCH AND METHODOLOGY

COLLECTION OF DATA:
Primary data: - Employees of Franklin Templeton India Pvt Ltd,
Visakhapatnam, & customers of Franklin Templeton, and other
investor out of Franklin Templeton (by personally in touch with them,
and by asking queries to them).
Methods: - Personal interaction.
Secondary data: - Web site of Franklin Templeton India,
brochures, textbooks and other web sites etc…..
Mainly the data was collected by interacting with people working at
various levels in Franklin Templeton and outside investors and
websites.
RESEARCH METHODOLOGY:
Sample Method : Non-Probability Sampling
Sample Size : 100
Sources of Data

 Primary Data : Structured Non-Disguised Questionnaire

 Secondary Data : Reference from distributors.

The whole study is based upon primary and secondary data.

Therefore, information has been collected from interacting with
different investors and from various magazines, journals, websites,
and bulletins.
 PRESENTATION OF THE STUDY:
The study has been presented in the organized structure or the
format which has been provided by the respective authority. In the
first chapter under the theoretical framework the concept of finance
has been described in detail with its meaning, definition, evolution
and the various modern and the traditional approaches in the field of
finance. In the column of topic related concepts there was a detailed
description about the topic of study, which is “study on customer
attitude, preference and satisfaction level towards mutual
fund investment”. In its context it was detailed allot the process
and the importance of customer satisfaction in the organization as
well as industry. In the column of review of literature the relation and
the importance of the customer satisfaction with the company,
investor’s value, etc has been presented with the reviews of the
various scholars in the field of finance.
There was a clear description about the importance and the scope of
study and the main objectives for the purpose of conducting the
study were made clear. The research design adopted with different
methods and tables and there was clear presentation of the
limitations of the study.
In chapter three the overview of the whole industry at global level
and also at the country level has been mentioned with actual facts
which were done same in the case of the company profile. Once the
topic profile in the organisation was made clear the study was
supported with clear analysis of data and the fair presentation of the
findings, suggestion and the conclusion at the end of the details
presented for the study.

LIMITATIONS

 The study is limited to Visakhapatnam city only.

 The time constraint was one of the major problems.
 The study is limited to the different schemes available under
the mutual funds selected.
 All the customers are online so only a few customers were in
contact.
 As all the information is given by the customers it may be
biased.
 Most of the customers were not ready to reveal the data about
their investments.
 Most of clients unaware of these options so that they didn’t
responded well.
 The lack of information sources for the analysis part.
 INDUSTRY PROFILE
The capital markets perform an important function in
mobilization of resources liquidity of the stock markets is an
important factor effecting growth. Many profitable projects
require long term finance; however investors do not relinquish
their savings for a long time. Capital market is a group of
interrelated markets in which capital is raised in financial form,
is lent and borrowed (or) raised in a varying time periods (such
as short term and long term). In a developing economy, the
business of capital market is the movement of capital to the
point of highest yield. A liquid stock market ensures a quick exit
without incurring heavy losses (or) costs. Stock market is a
vehicle through which long term finance is characterized for the
various needs of industry, commerce, government and local
authorities. Thus development of financial markets is necessary
for creating conductive climate for investment and economic
growth.
The tone of capital market largely depends on the
economy of the country and therefore, depends on the
available savings and investments on one hand the
performances of the industry on the other. Among other factors
that would influence the tone of the capital and stock market
are the monsoon, the agriculture, the industry growth and in
particular the performance of the corporate sector, as they too
have a controlling effect on the economy of the country. In
particular the performance of the corporate sector, as they too
have a controlling effect on the economy of the country. In
particular the government policy, the psychological expectation
and host of other factors play a very prominent role in
influencing the capital markets.
The capital market in India can be categorized into
two types:
 Organized
 Unorganized
The funds for long term capital come from individual
investors, corporate savings, government savings, foreign
investments, banks, financial institutions, investments trusts,
Life Insurance Corporation and international financial agencies,
industry, government and semi government institutions are the
potential users in the organized sector itself. Since the supply of
funds for unorganized sector falls short of demand, the interest
rates are kept high.
The economic progress of a country is largely influenced
by the availability of savings for investment and hence there is
a need for the mobilization of the savings for investment and
hence there is a need for the mobilization of savings for
investment and hence on a massive scale. Indigenous bankers
in town and money lenders in rural areas supply long term
finance in the UN organized sector. There is no link between the
organized and unorganized sector (or) within the unorganized
sector itself. There is a need for the mobilization savings on a
massive scale.
The economic progress of a country is largely influenced
by the availability of savings for investment and hence there is
need for the mobilization of savings for investment and hence
on a massive scale. Indigenous bankers in town and money
lenders in rural areas supply long term finance in the
unorganized sector. There is no link between the organized and
unorganized sector (or) within the unorganized sector itself.
There is a need for the mobilization savings on a massive scale.
In developing countries like India, there is a great set back
in mobilization process due to various reasons. The attitude of
the public; their affiliation to traditional investment in land and
property, bullions and hoardings and above all the risk of
uncertainty are some of the reasons. The fiscal commission
(1949-50) recognized the fact that in India there is an acute of
long term capital for industrial ventures. But it was not until
1954-55 that the central board of directors of the reserve bank
permitted established business house to raise their new capital
by issue of debentures at comparatively high rate of interest.
Since the capital market is a place where the private savings
are kept for a very long period, it is highly necessary to protect
the interests of these investors, if the capital market has to
grow.
To safe guard the investor’s interest, government
has to enacted laws such as:
 The securities act , 1938 ( together with the life
insurance corporation act 1956 )
 The capital issues (control and regulation act, 1943).
 The banking companies act, 1949.
 The provident fund act and the rules, 1957.
 The Indian companies act, 1956.
 The deposit insurance scheme, 1960.
 The monopolies and restrictive trade practices act,
1969.
A new era in the capital market in India was ushered in
July, 1991 with the starting of a new process of financial and
economic deregulation. Beginning With the devaluation of
rupee by about 20% in July, 1991, industrial policy was totally
reshaped to dispense with licensing of all industries except 18
scheduled industrial groups. Further, removal MRPT limit on
assets of Companies, dilution of FERA (Foreign Exchange
Regulation Act). And foreign trade liberalization etc, were some
of the other reforms. Fiscal Policy was rationalized to reduce the
central budget deficit and public Sector under takings were
freed from government controls by professionalizing their
management , giving greater autonomy to them and by
disinvestment of their shares in favor of the public.

ESTABLISHMENT OF SEBI
The Securities and Exchange Board of India was established
on April 12, 1992 in accordance with the provisions of
the Securities and Exchange Board of India Act, 1992.

PREAMBLE

The Preamble of the Securities and Exchange Board of India

describes the basic functions of the Securities and Exchange
Board of India as

“…..to protect the interests of investors in

securities and to promote the development of, and to
regulate the securities market and for matters
connected therewith or incidental thereto”

BOMBAY STOCK EXCHANGES

The 'BSE SENSEX' is a value-weighted index composed of 30
stocks and was started on January 1, 1986. The Sensex is
regarded as the pulse of the domestic stock markets in India. It
consists of the 30 largest and most actively traded stocks,
representative of various sectors, on the Bombay Stock
Exchange. These companies account for around fifty per cent of
the market capitalization of the BSE. The base value of the
Sensex is 100 on April 1, 1979, and the base year of BSE-
SENSEX is 1978-79.

A governing board comprising of 9 elected directors, 2 SEBI

nominees, 7 public representatives and an executive director is
the apex body, which decides the policies and regulates the
affairs of the exchange.

The BSE SENSEX consists of the following companies:

Bajaj Auto Limited, Bharti Airtel Ltd., Bharat Heavy Electricals
Ltd., Cipla Ltd., DLF Ltd., HDFC, HDFC Bank Ltd., Hero Honda
Motors Ltd., Hindalco Industries Ltd., Hindustan Unilever Ltd.,
ICICI Bank Ltd., Infosys Technologies Ltd., ITC Ltd., Jaiprakash
Associates Ltd., Jindal Steel & Power Ltd., Larsen & Toubro Ltd.,
Mahindra & Mahindra Ltd., Maruti Suzuki India Ltd., NTPC Ltd.,
ONGC Ltd., Reliance Industries Ltd., Reliance Communications
Ltd., Reliance Infrastructure Ltd., State Bank of India, Sterlite
Industries (India) Ltd., Tata Motors Ltd., Tata Power Company
Ltd., Tata Steel Ltd., Tata Consultancy Services Ltd., Wipro Ltd.

At regular intervals, the Bombay Stock Exchange (BSE)

authorities review and modify its composition to be sure it
reflects current market conditions. The index is calculated
based on a free float capitalization method; a variation of the
market cap method. Instead of using a company's outstanding
shares it uses its float, or shares that are readily available for
trading. The free-float method, therefore, does not include
restricted stocks, such as those held by promoters, government
and strategic investors.

Initially, the index was calculated based on the ‘full market

capitalization’ method. However this was shifted to the free
float method with effect from September 1, 2003. Globally, the
free float market capitalization is regarded as the industry best
practice.

As per free float capitalization methodology, the level of index

at any point of time reflects the free float market value of 30
component stocks relative to a base period. The Market
Capitalization of a company is determined by multiplying the
price of its stock by the number of shares issued by the
company. This Market capitalization is multiplied by a free float
factor to determine the free float market capitalization. Free
float factor is also referred as adjustment factor. Free float
factor represent the percentage of shares that are readily
available for trading.

The Calculation of Sensex involves dividing the free float

market capitalization of 30 companies in the index by a number
called Index divisor. The Divisor is the only link to original base
period value of the Sensex. It keeps the index comparable over
time and is the adjustment point for all Index adjustments
arising out of corporate actions, replacement of scrips, etc.

The index has increased by over ten times from June 1990 to
the present. Using information from April 1979 onwards, the
long-run rate of return on the BSE Sensex works out to be
18.6% per annum, which translates to roughly 9% per annum
after compensating for inflation.

NATIONAL STOCK EXCHANGE:

The NSE was incorporated in Now 1992 with an equity capital of Rs
25 crore. The International securities consultancy (ISC) of Hong Kong
has helped in setting up NSE. ISE has prepared the detailed business
plans and installation of hardware and software systems. The
promotions for NSE were financial institutions, insurances
companies, banks and SEBI capital market ltd, Infrastructure leasing
and financial services ltd and stock holding corporation ltd.
It has been set up to strengthen the move towards
professionalisation of the capital market as well as provide nation
wide securities trading facilities to investors. NSE is not an exchange
in the traditional sense where brokers own and manage the
exchange. A two tier administrative set up involving a company
board and a governing aboard of the exchange is envisaged. NSE is
a national market for shares PSU bonds, debentures and government
securities since infrastructure and trading facilities are provided.

NSE-NIFTY:
The NSE on April 22, 1996 launched a new equity Index. The new
index, which replaces the existing NSE-100 index, is expected to
serve as an appropriate Index for the new segment of futures and
options.
“Nifty” means National Index for Fifty Stocks. The NSE-50 comprises
50 companies that represent 20 broad Industry groups with an
aggregate market capitalization of around Rs. 1,70,000 crs. All
companies included in the Index have a market capitalization in
excess of Rs 500 crs each and should have traded for 85% of trading
days at an impact cost of less than 1.5%. The base period for the
index is the close of prices on Nov 3, 1995, which makes one year of
completion of operation of NSE’s capital market segment. The base
value of the Index has been set at 1000.

ORGANIZATION PROFILE
Franklin Templeton Investments has grown from being
recognized as one of the best small companies in America to
being considered a premier global investment management
organization. We offer clients a valuable perspective shaped by
our six decades of experience, investment expertise and
growing global reach.
Franklin Templeton GLOBAL
Franklin Resources, Inc. is a global investment management
organization known as Franklin Templeton Investments. We have an
extensive global presence, including offices in over 30 countries and
clients in more than 150. Our common stock is listed on the New
York Stock Exchange under the ticker symbol BEN and is included in
the Standard & Poor's 500®Index. As of December 31, 2010, we
manage over $670 billion in investment vehicles for individuals,
institutions, pension plans, trusts, partnerships and other clients.

A PREMIER GLOBAL INVESTMENT MANAGEMENT

ORGANIZATION

World-Class Investment Management

 A pure investment management organization

 Multi-manager structure encompassing well-known brands
across multiple asset classes
 94% of U.S.-registered fund assets ranked in top two Lipper
quartiles for 10-year period ended December 31, 20101

Extensive Global Presence

 A pioneer in global investing.

 Clients in 150+ countries.
 22 countries/regions with over U.S. $1 billion in AUM.
 Largest cross-border fund manager.
  More than 500 investment professionals who speak over 25
languages.

Financial Strength

 Diversified by investment objective, client type, and

geographical region
 Strong balance sheet
 Excellent credit ratings

Values-Based Culture

 Put clients first

 Build relationships
 Work with integrity

Franklin Templeton INDIA

Franklin Templeton's association with India dates back to more t han
a decade as an investor. As part of the group's major thrust on
investing in markets around the world, the India office was set up in
1996 as Templeton Asset Management India Pvt. Limited. It flagged
off the mutual fund business with the launch of Templeton India
Growth Fund in September 1996, and since then the business has
grown at a steady pace.
A Long term commitment:
Since starting its operations in India, Franklin Templeton has
invested a considerable amount of time, effort and resources
towards investor and distributor education, the belief being - to be
successful in the long term, the fundamentals need to be corrected,
at whatever cost! This has resulted in various advertising campaigns
aimed at educating investors, participation in seminars and
distributor training programs. Franklin Templeton has played a
pivotal role in steering the industry to its current stage, and as long
term players, we continue to strive to achieve the objective of
'making mutual funds an investment of choice' for both individual
and institutional investors.

In July 2002, Franklin Templeton India acquired Pioneer ITI, another

leading fund house in India to create an organization with rich
investment experience over market cycles, one of the most
comprehensive product portfolios, footprint across the country and
an in-house shareholder servicing function. The huge synergies that
existed in the two organizations have helped the business grow at a
rapid pace, catapulting the company to among the top two fund
houses in India.

Our Vision
To be the premier global investment management organization by
offering high quality investment solutions, providing outstanding
service and attracting, motivating and retaining talented individuals.
Investment philosophy

Our investment philosophy that follows a disciplined approach to

investing with a strong focus towards process orientation is the
common thread running through all our schemes. The key guiding
principle to our investment philosophy is - maximize the risk-
adjusted returns for our investors in the respective asset classes,
and create wealth for them over the long-term. We have successfully
demonstrated the ability to achieve this in the past, and are
confident that our process-oriented investment approach will help us
sustain the same in the years to come.

Equity
While broad economy and sector trends serve as a broad guideline,
Franklin Templeton portfolio managers are essentially 'bottom-up'
investors, focusing more on individual stocks and their potential to
deliver long term capital appreciation. While quantitative analysis
using proprietary research model serves as a first stage filter, the
research team and portfolio managers speak with key management
and observe operations onsite to get a meaningful insight into a
company's ability to translate vision into reality.

Debt

The overall objective is to minimize both liquidity and credit risk. Our
fixed income team looks to arrive at a general maturity/duration
range for the portfolio in relation to the market based on its interest
rate outlook, which is arrived after a rigorous and close monitoring of
various macro variables. The shifts within this range are then
determined by short term cyclical trends in the economy. They look
to manage interest rate risk across different asset class and duration
buckets, in order to optimise risk-adjusted returns. All the
investment options are thoroughly analysed to ensure that credit risk
is kept at the minimum level. Any major shifts in portfolio strategy
are based on long-term trends, as opposed to short-term aberrations
in interest rates.
 ORGANIZATIN STRUCTURE

Name Designation
Charles B. Johnson Chairman of the Board
Rupert H. Johnson, Vice Chairman
Jr.
Gregory E. Chief Executive Officer President
Johnson
Vijay C. Advani Executive Vice President - Global Advisory
Services
Jennifer M. Executive Vice President Chief Operating
Johnson Officer
Kenneth A. Lewis Executive Vice President Chief Financial
Officer
John M. Lusk Executive Vice President - Investment
Management
Craig S. Tyle Executive Vice President General Counsel
William Y. Yun Executive Vice President - Alternative
Strategies

FRANKLIN TEMPLETON ASSET MANAGEMENT INDIA PVT LTD,

VISAKHAPATNAM
Name and address
Franklin Templeton Asset management India pvt ltd.
204, First floor, Eswar plaza,
Dwarakanagar. Bata Showroom
Visakhapatnam. -16.
Name and designation:
Suresh Kumar Sela (Branch Manager)
No of Persons employed: Two
Name of the industry: Mutual Funds
Whether seasonal: No
Date of Opening: 30th Aug 2002.
Details of Head Offices/branches:
Franklin Templeton Asset management India pvt ltd
Level 4, wockhardt towers, Bandra-Kurla complex,
Bandra East, Mumbai 400051.
No of employees: 424
Person responsible to receive the notice on behalf of employees
under payment of gratuity act 1972 and the rules framed there
under.
Authorized person
Karan Kapadia
VP & Regional sales head.

HISTORY AND OVERVIEW OF FRANKLIN

TEMPLETON
In the year 1940:
The company was founded in 1947 in New York by Rupert H.
Johnson, Sr., who ran a successful retail brokerage firm from an
office on Wall Street. He named the company for U.S. founding
father Benjamin Franklin because Franklin epitomized the ideas of
frugality and prudence when it came to saving and investing. The
company's first line of mutual funds, Franklin Custodian Funds, was a
series of conservatively managed equity and bond funds designed to
appeal to most investors.
In the year 1950:
After Rupert Sr. retired, his son, Charles B. Johnson (Charlie), took
over as president and chief executive officer in 1957 at age 24.
There were only a handful of employees at that time and the funds
had total assets under management of $2.5 million. Franklin was
swimming against the tide because insurance companies dominated
the middle class investing markets, but Charlie was convinced that
he had a good story to tell.
In the year 1960:
By the early 1960s Charlie and his team's persistence was paying off
and the company was growing albeit slowly. It was a struggle to
keep up with the day-to-day demands of the business and Charlie
continued to wear many hats—mutual fund manager, wholesaler
accountant. Rupert Johnson, Jr., Charlie's brother, joined the
company in 1965 and also took on multiple roles.
In the year 1970:
Franklin went public in 1971, which gave Charlie and team the
capital needed to grow the business and position it for the future. In
1973, the company acquired Winfield & Company, a San Mateo,
California-based investment firm, and moved Franklin's offices from
New York to California. The combined organization had close to $250
million in assets under management and approximately 60
employees. In 1979, Franklin Money Fund began a growth surge that
made it Franklin's first billion-dollar fund and launched the
company's tremendous asset growth in the 1980s.
In the year 1980:
Starting in 1980, the company's total assets under management
doubled (or nearly doubled) every year for the next six years. The
company's stock began trading on the New York Stock Exchange in
1986 under the ticker symbol "BEN". In the same year, the company
opened its first office outside North America in Taiwan. In 1988,
Franklin acquired L.F. Rothschild Fund Management Company.
Assets under management for Franklin grew from just over $2 billion
in 1982 to more than $40 billion in 1989 (the crash of 1987 had little
impact on Franklin's income and bond funds). Not one to rest on
their laurels, management was concerned about Franklin's heavy
emphasis on fixed income investments that had become the
company's bread and butter.

In the year 1990:

Strategic acquisitions in the 1990s helped Franklin diversify its
investment management capabilities beyond fixed income and also
expand its global footprint throughout Europe and Asia. In 1992,
after striking a deal with famed global investor Sir John Templeton
for acquisition of Templeton, Galbraith & Hansberger Ltd., Charlie
was named Fund Leader of the Year for spearheading what was then
the largest merger of an independent mutual fund company in
history. Templeton gave the company a strong portfolio of
international equity funds as well as the expertise of emerging
markets guru Dr. Mark Mobius, who currently leads a team of
emerging markets analysts and manages emerging markets
portfolios. Dr. Mobius has spent more than 30 years working in
emerging markets all over the world. Then in 1996, in an effort to
broaden its line of domestic equity products, Franklin Templeton
bought Heine Securities Corporation, investment advisor to Mutual
Series Fund, Inc., from Wall Street icon Michael Price.
In the year 2000:
Several more key acquisitions solidified the company's position as a
premier global investment management organization: Bissett in
2000, Fiduciary Trust in 2001 and Darby in 2003. In 2005, Gregory E.
Johnson (Greg), Charlie's son, became chief executive officer,
assuming overall responsibility for leading Franklin Templeton
Investments. Greg had grown up in the business and worked his way
through the organization beginning on the trading desk at age 24 in
1985.

Fundamental Approach

Our investment decisions are guided more by what we believe in,

less by what the market thinks. That is the reason once we buy into
a stock, or take a maturity position in a debt portfolio based on our
fundamental research and analysis, we stick to our position without
paying heed to market rumours and whisper estimates. We believe
that while technical can rule the roost in the short term, it is the
fundamentals that prove rewarding over time.

Long Term Orientation

Franklin Templeton's portfolio managers are strong believers in

consistently delivering good performance. The key word is
consistency. We believe that it is not important to be top performer
at any time and we attach more importance to being among the top
quartile in the peer group consistently, and this requires taking a
long-term view, even at the cost of temporary underperformance.

Team Approach

While individual portfolio managers are the ultimate decision makers

for the scheme they manage, the belief is that working together can
achieve greater results than acting alone. That is why every stock
that is researched by the analysts is discussed intensively at regular
investment team meetings, and the analysis is available to all
investment team members on a common platform. Moreover, the
high degree of interaction between investment team members
across the globe helps share and learn from each other's experience
and expertise. The regular awards and top ratings accorded to
Franklin Templeton schemes are recognition of their consistently
superior performance across asset classes, and through market and
economic cycles. They also reflect Franklin Templeton's long
cherished values of choosing the long-term, disciplined and team
approach to managing its funds and business.
Highlights of the Quarter

 Record assets under management of $670.7 billion and long-

term sales of $54.9 billion.
 Long-term net new flows of $3.4 billion, net of the previously
announced advisory account redemption of $12.0 billion.
 Tax-free fixed-income funds experienced net outflows of $2.0
billion, but almost half of that was exchanged into other
Franklin Templeton funds.
 Announced a new strategic relationship with Pelagos Capital
Management and the acquisition of Rensburg Fund
Management, a U.K. equity manager.

Earning per share

CORPORATE GOVERNANCE GUIDELINES

These Corporate Governance Guidelines (the “Guidelines”) have
been adopted by the Board of Directors (the “Board”) of Franklin
Resources, Inc. (the “Company” or “Corporation”) in connection with
its oversight of the Company’s management and business affairs.
 Independence of Directors: A majority of directors must be
“independent” directors in accordance with the corporate
governance listing standards.
 Director Qualifications and Selection: The Corporate
Governance Committee of the Board is responsible for
establishing a policy setting forth the specific, minimum
qualifications that the Corporate Governance Committee
believes must be met by a nominee recommended by the
Corporate Governance Committee for a position on the Board.

 Term Limits: The Board does not believe that it should establish
term limits for its members. The Board recognizes the value of
continuity of directors who have experience with the Company
and who have gained over a period of time a level of
understanding about the Company and its operations

 Meetings and Preparation: Directors are expected to regularly

attend Board meetings and meetings of committees on which
they serve, to spend the time needed in preparation for such
meetings and to meet as frequently as they deem necessary to
properly discharge their responsibilities.

 Meeting Agendas: The Chairman of the Board and the

Corporate Secretary will establish and disseminate the agenda
for each Board meeting. Each Board member is free to suggest
the inclusion of items on the agenda. Each Board member is
free to raise at any Board meeting subjects that are not on the
agenda for that meeting.

 Annual Performance Evaluation: The Board, through its

delegation of oversight to the Corporate Governance
Committee, shall annually review its own performance in such
manner as it deems appropriate to determine whether the
Board and its committees are functioning effectively.

 Review of Corporate Governance Guidelines: The Corporate

Governance Committee, as appropriate, shall periodically
review and reassess the adequacy of these Guidelines to
determine whether any changes are appropriate and
recommend to the Board any such changes for the Board’s
approval.

TOPIC PROFILE IN THE ORGANIZATION

 Equity Funds
 • Open-end diversified

• Open-end sector

 Fixed Income Funds

• Open-end income/liquid

• Closed-end

 Hybrid Funds

• Open-end balanced

• Open-end fund of funds

• Closed-end

 Investment Styles

• What are growth and value styles?

EQUITY FUNDS
Open-end diversified
Fund Product Style Investment
Positioning horizon
FIOP Takes concentrated Blend, bottom 3-5 years or more
stock/sector up
exposure based on
four themes.
FIHGCF Invests in Growth 3-5 years or more
companies/ sectors combination of
with high growth top down and
rate. bottom up.
(Micro and
macro analysis)
FISCF Invests in small and Blend, bottom 3-5 years or more
mid cap companies up
FIPF Invests in mid and Blend, bottom 3-5 years or more
small cap stocks up
FBIF Invests in Blend, bottom 3-5 years or more
companies up with a top
benefiting from the down overlay
building blocks of
the economy
FIFCF Invests in Blend, bottom 3-5 years or more
companies across up
the market cap
range
FIT Invests in Blend, bottom 3-5 years or more
companies across up
sectors and market
cap range, offering
tax benefits under
Sec 80 C.
FIPP Primarily a large Blend, bottom 3-5 years or more
cap fund with some up
allocation to
small/mid cap
stocks that have
high long-term
potential.
FIIF Passively managed Passive, 3-5 years or more
index fund indexing
FIBCF Invest in large cap Blend, bottom 3-5 years or more
stocks up
TIGF Invests Value, bottom 3-5 years or more
predominantly in up
large cap stocks – a
value fund
TIEIF Focuses on Indian Value, bottom 3-5 years or more
and emerging up
market stocks – a
value fund taking
into account
dividend yield of
stocks
FAEF Invests in Asian Growth 3-5 years or more
Companies/ sectors combination
with long term top down and
potential across the bottom up.
market cap range. Micro and
macro within
countries stock.

Open-end Sector
FIF Invests in Blend, bottom 3-5 years or more
companies in the up
information
technology sector.
Equity funds
Templeton India Growth Fund (TIGF) Franklin India Prima plus (FIPP) Franklin India Prima fund (FIPF) Franklin
India Flexi Cap Fund (FIFCF) Franklin India High Growth Companies Fund (FIHGCH). Franklin Asian Equity Fund
(FAEF) Franklin India Opportunity Fund (FIOF) Templeton India Equity Income Fund (TIEIF) Franklin Build India
Fund (FBIF) Franklin India Tax-shield (FIT) Franklin India Index Fund (FIIF) Franklin InfoTech Fund (FIF)
FIXED INCOME FUNDS
Open-end income/liquid
Fund Product Style Investment
Positioning horizon
TGSF Invests primarily in Composite Composite plan/ PF
Indian govt plan/ PF Plans/ Plans/ LT Plan high
securities with LT Plan Treasury plans: Low
different plans. Treasury 3 to 6 to moderate
months
TIIBA A long bond fund 1 to 2 years Moderate to high
investing in quality
fixed income
instruments across
segments
TIIF Primarily a 1 to 2 years Moderate
corporate bond fund
with medium term
portfolio duration
TIIOF Focused on high 18 months and Moderate
accrual paper above
towards the short
end of the curve
including PTCs
TISTIP Invests in short 9 to 18 months Moderate
term corporate
bonds including
PTCs
TILDF Invests in a mix of 3 to 6 months Moderate
money market and
short term debt
instrument
TFIF-LT Invest in a mix of 1 to 6 months Moderate
floating and fixed
income securities
TIUBF Invests in short Upto 3 months Low
term debt and
money market
securities
TICMA Invests in money 3 days to 3 Low
market and short months
term investments
TITMA Invests in money 1 month Low
market securities

Closed-end
TFHF Invests in high 3 months to 5 Varies/low due to
quality fixed income years buy-hold strategy.
securities in line
with the portfolio
 duration.

Income & Liquid

Templeton India Income Fund (TIIF) Templeton India Income Builder Account (TIIBA) Templeton
India Income Opportunity Fund (TIIOF) FT India Monthly Income Plan (FTIMIP) Templeton India
Government Securities Fund (TGSF) Templeton Floating Rate Income Fund (TFIF) Templeton India
Short Term Income Plan (TISTIP) Templeton India Ultra-Short Bond Fund (TIUBF) Templeton India
Treasury Management Account (TITMA) Templeton India Low Duration Fund (TILDF)

HYBRID FUNDS
Open-end balanced
Fund Product Style Investment
Positioning horizon
FTIBF Invests both in Balanced 3 to 5 years or
stocks and fixed Equity: Blend more
income instruments and bottom up
offering a balanced Fixed Income:
exposure to the Similar to long
asset classes bond fund
TICAP Ideal avenue for Balanced At least 4 years and
investing for Equity: Blend until the child turns
children’s future and bottom up 18 years of age/
Education Plan: Fixed Income: Gift plan: Moderate
Invests in equities Similar to long to high. Education
and in debt bond fund plan: Low to
securities moderate
TIPP Invests in equities Balanced At least 3 years and
(Upto 40%) and the Equity: Blend until the age of 58
balance in high and bottom up years/ Moderate to
quality fixed income Fixed Income: High
instruments – a Similar to long
retirement product bond fund
offering tax benefits
with a lock-in
FTIMIP An MIP investing Balanced 1 to 3 years/
predominantly in Equity: Blend Moderate
debt instrument and bottom up
with a marginal Fixed Income:
exposure to Similar to short
equities. (Equity bond fund
exposure: upto
20%)
Open-end fund of funds
Fund Product Style Investment
Positioning horizon
FTDPEF A Fund of fund Tactical 3 to 5 years/ High
offering tactical Allocation
allocation between
an equity and debt
fund, based on (PE
Ratio)
FTLF A fund of fund Strategic/Tactica Varies as per the
offering life stage l Allocation plan/ Moderate to
solutions with high
different plans of
varying asset
allocation.
Closed-end
Fund Product Style Investment
Positioning horizon
FTFTF Invests in high Balanced, Varies/ Moderate to
quality fixed bottom up low
income sec in line approach
with the portfolio
duration and
provides marginal
equity exposure
upto 30%
FTCPOF Invests in mix of Balanced, Varies/ Moderate to
debt and equity bottom up low
approach
Hybrid
FT India Dynamic PE Ratio Fund of Funds (FTDPEF) FT India Life Stage Fund of Funds (FTLF) FT
India Balanced Fund (FTIBF) Templeton India Pension Plan (TIPP)

INVESTMENT STYLES
What are Growth and Value styles?
As per MSCI, the growth investment style has the following
characteristics
• Long-term forward earnings per share (EPS) growth rate

• Short-term forward EPS growth rate

• Current Internal growth rate

• Long-term historical EPS growth trend

 • Long-term historical sales per share growth trend

In other words, companies with above average revenue growth/

potential and ROE
The value investment style has the following characteristics-
• Book value to price ratio

• 12-month forward earnings to price ratio

• Dividend yield

In other words, out-of-favor stocks/sectors with good fundamentals,

turn-around opportunities and undervalued.
Risk factors: All investments in mutual funds and securities are
subjective to market risks and the NAV of the scheme may go up or
down depending upon the factors and forces affecting the securities
market including the fluctuations in the interest rates. There can be
no assurance that the scheme’s investment objectives will be
achieved.

PRODUCT FEATURES
What is Franklin India Bluechip Fund (FIBCF)?
FIBCF is an open-end diversified equity fund that seeks to achieve
capital appreciation through investments in large-cap companies. It
was launched in 1993 as a 3 years closed end fund and was
converted into an open end fund from January 1997, with declaration
of a 20% dividend. In the 90's it used to have a graded load structure
going upto 6%. The name Bluechip has its origin in poker from US -
blue chips typically had the highest value in the game poker and
have come to represent stocks f companies that are large/mature
and dominate their respective industries. Thus the term blue chip
refers to stocks with large market capitalization (established
companies).
What are large cap companies and how have the stocks
performed?
The phrase "large cap" is in reference to the S&P CNX 500 index.
This provides a dynamic and realistic picture of the capitalization
ranges, given the growing Indian markets. Any stock whose market
cap is higher than the 100th stock in S&P CNX 500 will be considered
a

large cap stock and the latest break up is given below.

Large cap companies have a relatively stable business model and
scale of operations and ability to attract best of talents helps them
sustain their growth. Stock of such companies are well researched,
constantly in demand and highly liquid. Typically, the scale and size
of these companies makes them less prone to external shocks,
usually demonstrating better resilience during volatile periods. Some
well known names in the large cap space in India include Reliance
Industries, Hindustan Lever, SBI and Infosys.
History suggests that large cap stocks provides stable and consistent
returns and typically do relatively well during down turns or volatile
environment.
What is the investment strategy of FIBCF?
The fund follows a bottom-up approach to stock selection based on
fundamental research with a medium to long term perspective and
ignores momentum stocks.

The companies that the fund

seeks to invest in (A) are well managed: (B) generate high ROCE and
(C) demonstrate the ability to deliver sustainable growth in earnings.
Our approach has been to construct a well diversified portfolio of
large cap stocks with a medium to long term perspective. We adopt
a buy-hold strategy and our average holding period tends to be
around 24 months, but we can also take short term view on
opportunities.
We continue to hold on to stocks that fall out of favor if we believe
that the fundamentals are still strong. Though growth stocks from a
large components of our portfolio, we have also tried to capitalize on
emerging opportunities in value / cyclical stocks. The scheme
generally invests in around 40 stocks thereby maintaining adequate
diversification.

Does in invest only in large cap stocks?

Depending on fundamental views we might sometimes look at mid
cap companies with a market capitalization close to that of the large
cap ones, but the primary exposure is towards large cap stocks.
Since inception, it has always remained true to its mandate of
investing in large cap stocks irrespective of the market conditions.
This sets the fund apart from other funds, which may have changed
their investment strategies to adopt market conditions.

Such a style

consistency helps the investors understand the risks they are

undertaking and the possible performance characteristics of the
fund. If a fund doesn’t stay true to its investment style, investors will
not have an idea of the type of risks they are undertaking.

How has the fund performed over the years?

As one of the oldest equity funds in the country, it has exhibited a
consistent track record over the past 17 years. FIBCF has
consistently out-performed its benchmark BSE SENSEX across time
horizons.
Since inception, FIBCF has successfully weathered various market
cycles. The table shows its performance against its benchmark BSE
SENSEX in various bull and bear phases.

What
was
its

strategy during the sharp rally upto 2008 and ensuring

global financial crisis?
Stringent screening on various quantitative and qualitative
parameters had led us to limit exposure to momentum based
stocks / sector (characterized by high volatility, valuation and
governance risks). We had largely stayed away from metals, power
and real estate stocks, despite the momentum building up in many
stocks in these sectors. This impacted the relative performance in
2007.
We however maintained exposure to growth stocks through
companies in sectors such as telecom, financial services, capital
goods etc. On the other hand, we were cognizant of the strong
domestic drivers for the Indian economy and hence had exposure to
defensive such as FMCG, which were undervalued. This mix of
growth/value exposure and avoiding overhead stocks helped our
funds deliver a relatively good performance during 2008/09. We took
advantage of the sharp decline in valuations of our picks in the
capital goods and banking sectors and thereby increased our
exposure to this space. This also added to out performance in 2009.
What is the current portfolio strategy?
Our strategy remains focused on the medium to long term
opportunities and while this might impact relative performance over
the near term, the fund’s track record over market cycles points
towards the benefits of the approach. Companies that can piggyback
on the domestic consumption and investment themes are good
opportunities from a medium to long-term perspective. They will
take advantage of the structural transition underway in India, with
growing income levels and increased infrastructure/capex spending
by the government Banks (17.91%), Software (9.64%), and Industrial
Capital goods (8.38%).
• India remains underserved in terms of financial services, but
the strong growth in personal incomes has led to increased
demand. Given the low penetration of banking and financial
services in India, we believe companies in this sector have
huge growth potential.

• Infrastructure companies would be the key beneficiaries of a

stable govt as it provides continuity in implementation of
projects and a renewed focus on private sector participation in
infrastructure development. Government’s focus on spending
in the infrastructure space and corporate India’s focus on
capital expansion makes the Capital Goods Sector a key
beneficiary of this story.

• Leading players in the Indian IT sector have emerged stronger

through the financial crisis and have benefited from the up tick
in global IT spending in recent quarters. We continue to focus
on companies which have been adopted multiple strategies
including cost rationalization, moving up the value chain
(consulting), and increasing focus on strong economies in the
emerging markets space to protect margins.

Why should investors consider investment in FIBCF?

 • Stability: The focus on large cap companies lends the portfolio
stability and at the same time helps investors take advantage
of the India growth story.

• Strong performance track record: Has delivered consistent and

superior performance for over 17 years!

• Resilience through market cycles: Has tackled the bull and

bear market phases by focusing on long term opportunities
rather than short term stories.

• True to its label: Remains focused on large cap stock – unlike

other funds that might have adopted a flexible approach,
based on market conditions.

• Consistent payout: The fund has a long history of consistently

paying rich dividends. It has paid out dividends every year
since 1999.

• Experienced investment team.

What is the risk-return profile of FIBCF?

The blend investment strategy places it above the value funds
amongst our actively managed equity funds.

What type of
investors
is the fund
suitable
for?
Given its large
cap focus, it
has the
potential to
deliver steady returns with relative lower volatility over the medium
to long run. Hence, it can form the core of all types of investors’ core
equity portfolio with an investment horizon of 3-5 years or more.

OTHER PRODUCTS
  FT INDIA DYNAMIC PE RATIO FUND OF FUNDS

Why PE?
Price to Earning ratio (PE) reflects the price one pays for every rupee
of earning and a high PE ratio reflects an expensive stock/market as
one would be paying more for the same level of earning and vice
versa.
The rational for choosing Nifty PE (calculated taking weightage
average PE ratio of index constituents) is because the index
comprises of highly liquid stocks that are constantly monitored by
market players and hence is a good barometer of market sentiment.
Historical, the PE ratio of the index and the market have moved in
tandem.
Investment objective: An open end fund which seeks to provide
long term capital appreciation with relatively lower volatility through
a dynamically balanced portfolio of equity and income funds.
• Asset allocation would be Franklin India Bluechip fund 30% and
Templeton India Income fund 70%.

 FRANKLIN BUILD INDIA FUND

India is one of the fastest growing economies in the world and

expected to become one of the top global economies in the coming
decades. The realize this potential, substantial investment and
efforts will have to be made in the key building blocks of our
economy like infrastructure, Financial services, Social development,
Agriculture and Resources. FBIF is an open ended equity fund
designed to tap investment opportunity in companies benefiting
from the growth in these sectors.
 FRANKLIN INDIA TAXSHIELD

Franklin India Tax-shield is an open-end, equity linked saving

scheme, which invests predominantly in equity and equity related
instrument and seeks to achieve long term growth of capital while
providing tax benefit under section 80C of the income tax Act.
• Key factors basically are it’s an open ended scheme
(ELSS) with an allocation of at least 80% to equities to enable
growth over the long term.

• Investments upto 1 lakh eligible for deduction from

taxable income under section 80C.

• No entry loads on your investment amount.

• Dividends and long term capital gains you earn are fully
exempt from tax, as per current tax laws.
 • Short lock in periods for three years.

 TEMPLETON INDIA PENSION PLAN

Templeton India Pension Plan is a central govt notified pension

scheme from the private sector. The fund which invests upto 40% of
its assets in equities and the remaining in fixed income instruments
can help you build a sizeable retirement corpus. Investments in the
funds are eligible for tax benefits under Section 80C.
Key aspects are:
• An open-end tax saving scheme with a lock in periods of 3
financial years that gives you the flexible to invest whenever
you have a surplus unlike some of the other retirement
products.

• While debt components of the portfolio can provide stability.

 TEMPLETON INDIA LOW DURATION FUND

Templeton India low duration fund is an open end income fund that
aims to provides steady returns by investing in a mix of money
market and short term debt instruments. Formally known as
Templeton Monthly Income Plan) (TMIP), the name has been
changed to Templeton India Low Duration Fund.
Investment obejective: An open-end income scheme having an
objective to earn regular income for investors through investments
primarily in highly rated debt securities.

Key aspects are:

• An open end income
fund that aims to provide
steady returns by
investing in a mix of money
market and short term debt
instruments.

• Aims to keep the duration the portfolio low to reduce the

interest-rate sensitivity of the portfolio.
 • Ideal for investors having conservative risk profile with an
investment horizon of 3 to 6 months.

 TEMPLETON INDIA EQUITY INCOME

Templeton India Equity Income Fund with a mandate to invest upto

50% of its corpus in foreign securities can help investors take
advantage of investment opportunities across other emerging
markets and participate in their growth.
Moreover, TIEIF leverages the international experience of the
Templeton emerging market team headed by Dr. J. Mark Mobius,
emerging market guru who has been managing emerging markets
for more than 30 years. The team follows the value style of investing
and compromise analysts and portfolio allocators, supported by a
team of assistants, economists and statisticians who work across
geographies to uncover the best opportunities available.

Investment objective: An
open end equity fund
which seeks to provide a
combination of regular
income and long-term capital
appreciation by investing
primarily in stocks that have
a current or potentially
attractive dividend yield.

Why Franklin Templeton Investments?

FRANKLIN TEMPLETON WORLDWIDE
• Premier global investment management organization with over
60 years of global investment experience.

• Head quartered in San Mateo, California with offices in 30

countries worldwide.
 • Over 459 investment professionals managing USD 664.3 billion
in assets for 22 million investors accounts.

• Global research expertise of over 100 investment professionals.

FRANKLIN TEMPLETON IN INDIA

• Established office in 1996

• Largest foreign fund house in India management INR 42,142

crore of average Assets Under Management for over 20 Lakh
investor accounts.

• Extensive experience in both equity and debt across market

cycles: 9 of our funds have a performance track record of over
10 years

OUR INVESTMENT PHILOSOPHY

• Follow disciplined approach to investing with a strong focus
towards process orientation.

• Maximize the risk-adjusted returns for our investors in the

respective asset classes.

• Creative wealth for our investors over the long term.

OUR CORE VALUES: WHAT WE STAND FOR

 ANALYSIS OF THE STUDY
1. Are you planning to save?
Respondents Yes No Total
Entrepreneurs 25 3 28
Employees 42 2 44
Advisors and 22 6 28 100
others

Table 1.1: Savings Plan

Chart
2.1:

Savings Plan
Interpretation:
For the Sample of 100 investors a question was raised about saving
as, should people go for savings? For which Almost 90% of
respondents mentioned yes, where as only 10% of respondents
mentioned no. Tough their profession differ their opinion matches.
The sample of 100 has 28% Entrepreneurs, 28% Individual Finance
Advisors and retail investors and remaining about 44% of our
employees from many private sector organizations.
Analysis:
From the individual point of view out of 100, 90% of them responded
that they have saving plans and rest 10% told no to this question,
because they already have alternative adjustments and don’t want
to bother about savings. Some of them don’t want to reveal the
data. And some do have savings with different financial institutions.
From this segment it can be analyzed that people are looking
forward for new financial instruments for saving.
As a whole if we see from all the available angles, almost all
respondents agree to this question, only reason is our economy is
encouraging us to save more, which again can be utilized for
individuals benefit.

2. Do you have any investments plans?

Respondents Yes No Total
Entrepreneurs 21 7 28
Employees 36 8 44
Advisors and 23 5 28 100
others

Table 1.2: Investment Plan

 Chart
2.2:

Investment Plan
Interpretation:
From the Sample of 100 investors a question was raised about
saving as, should people go for investment? Almost 80% of
respondents mention that they have their investment plans. And
rests 20% don’t have proper investments plans which they
mentioned.

Here from this sample of 100, which 28% of them are Entrepreneurs,
28% of them are Individual Finance Advisors and retail investors and
remaining about 44% of them are employees from many
organizations of private sectors.
Analysis:
From the individual point of view out of 100, 80% of them responded
that they have investment plans and rest 20%of them responded as
no to this question; because they feel that investment in own
business leads to more profitable than any other investment, so they
don’t want to invest in other area.
Investment in other areas like in secondary market, they feel that
there will not be fixed returns from investment. Employees feel more
comfortable in savings rather than other instruments; even they
would like to go for fix deposit where they will get at-least minimum
returns from their investment, this we can easily understand from
given table. Hence it is identified that people looking forward for
extra new more areas to pool their investments at a fixed rate of
returns. In their opinion secondary market investment is riskier than
any other investment. So people are very comfortable opting for
investments like Fix deposits, saving certificates, Provident fund
schemes etc.
Hence, it is clear indication that every one seems to have their
investment plans. Few of them don’t want to invest at this stage,
only due to lack of market knowledge, and their personal reasons.
People found very cautious and looking for new schemes to be
introduced which can really provide them good guaranteed returns
from an investment.
3. Age group:-

Respondents 20 - 25 25 - 35 35 – 55 Above
55
Entrepreneurs 2 17 7 2
Employees 3 26 11 4
Advisors and 5 6 12 5 100
others

Table 1.3: Age Group

Chart
2.3:
Age
Group
Interpretation:
Sample of 100 investors from which if we identify the age group,
almost 10% are the age group of 20-25, almost 49% are the age
group of 25-35, the group belongs to employers and young
entrepreneurs, almost 30% are the age group of 35-55, and about
11% are belonging to the group of above 55, the group consists of
advisors and few retired employees.
Here from this sample of 100, which 28% are Entrepreneurs, 28%
are Individual Finance Advisors and retail investors and remaining
about 44% of are Employees from many organizations of private
sectors.
Analysis:
From the individual’s point of view out of 100 respondents, almost
10% are the age of 20-25, and can be analysed that they would like
to take the risk at this moment. Almost 49% are the age group of 25-
35, from which it can be analysed that they feel more cautious about
their investment plans. About 30% are the age group of 35-55, they
are looking for a products like which must able to generate fixed
returns, and future plans. And about 11% of them are above the age
of 55 are responded that they purely looking from the perspective of
debt funds, and suggested well in terms of other investment
avenues.
Hence it is identified that depends upon their age they are opting for
schemes like debt, equity or combination of both as their preference.
So it can assume that almost investors are very cautious about their
investment plans and schemes that are available in the market.
 4. Preferable period of investment?
Respondents Short Long Total
term term
Entrepreneurs 7 21 28
Employees 12 32 44
Advisors and 7 21 28 100
others

Table 1.4: Period of Investment

Chart
2.4:

Period of investment
Interpretation:
Sample of 100 investors and common question was raised about
preferable period of investment. Almost 74% of respondents opting
for long term and only 26% respondents are going for short term.
Here from this sample of 100, which 28% are Entrepreneurs, 28%
are Individual Finance Advisors and retail investors and remaining
about 44% of are employees from many organizations of private
sectors.
Analysis:
From the Individual’s point of view out of 100, 26% of them
responded short term as their preference; they don’t want to spend
much time because they want quick returns even though they are
small in number. And rest 74% of them mentioned as long term,
because people believe that long term plans will give decent returns
as compare with others. Many of they suggested that when you are
waiting for long term obviously it will fetch and able to provide a
decent profit. Some of them mentioned only long term, because they
want to use those returns after some time, let’s say after few years,
and when they made this statement this is quiet clear that people
expecting some long term objective to be done. From this it can be
identified that people looking forward for extra new more areas to
pool their investments at a fixed rate of returns for a longer period.
And some of them suggested that if people looking for long term
that’s good, because at one particular stage risk would be zero and
hence can enjoy real benefit of an investment.
Hence it is identified that short term perspective will give returns but
risk will be high, because market conditions are volatile and it can
not be predict, it only can be anticipated. It is clear indication that
every one seems to have better understanding of markets with
reference to their terms.

5. Are you interested in mutual fund investment?

Respondents Yes No Total
Entrepreneurs 25 3 28
Employees 33 11 44
Advisors and 18 10 28 100
others

Table 1.5: Interested in Mutual Funds

 Chart
2.5:

Interested in Mutual Funds

Interpretation:
Sample of 100 investors and common question was raised about
mutual fund investment whether they are interested or not. Almost
76% of respondents are interested in mutual fund investment. And
only 26% of respondents are not interested in mutual fund
investment.
Here from this sample of 100, which 28% are Entrepreneurs, 28%
are Individual Finance Advisors and retail investors and remaining
about 44% of are employees from many organizations of private
sectors.
Analysis:
From the individual’s point of view out of 100, 76% of them
responded that they are interested in mutual fund investment. They
believe that comparative with equity shares, mutual funds are best
options to invest. And rest only 24% of them mentioned no to this,
because people under this category are willing to take risk, so they
would like to go for other options like equity and other trading areas.
People opting for this only due to reason that they believe steady
income will be available under dividend and growth option, so as
long it perform returns will be decent. And rest 24% of them
mentioned that they have other investment option which they feel
more comfortable than mutual fund investment. From this it is
identified that people they have different opinion and people are well
aware of options that are available in the market and some are
looking for new schemes of investments to be introduced. Many of
respondents ignored this. Reason as they specifically mentioned that
they would like to go for other options like fixed deposits, LIC etc.
Hence, it is identified that mutual funds are the best options. Others
there are many but respondents feel quite comfortable with mutual
funds. Some of investors had bad experience with the industry, so
they don’t want to invest in it. It is clear indication that almost
people are satisfied with this option and looking for extra new funds
to be introduced in it.

6. Anticipation of risk?
Respondents Minimu Moderat Maximum
m e
Entrepreneurs 14 8 6
Employees 26 14 4
Advisors and 10 14 4 100
others

Table 1.6: Anticipation of Risk

 Chart 2.6: Anticipation of Risk
Interpretation:
Sample of 100 investors and common question was raised about
anticipation of risk that one can bare. Almost 50% of respondents
are choosing for minimum risk, most of the employees are under this
category. Remaining 36% are going for moderate and rest opting for
high risk. If we compare only entrepreneurs are willing to take high
risk as concerned.
Here from this sample of 100, which 28% are Entrepreneurs, 28%
are Individual Finance Advisors and retail investors and remaining
about 44% of are employees from many organizations of private
sectors.
Analysis:
From the individual’s point of view out of 100, 50% of them
responded as minimum risk exposure that they can bear. They
believe that expect little with less effort is enough for them to
survive from their investment. About 36% of them are going for
moderate as such, and people are quite satisfied with moderate risk,
as they are not looking for maximum returns from investment. And
about 14% of them are ready to take maximum risk compare with
their expectations from an investment. As they are opting for
maximum risk exposure obviously they will look for high returns. One
thing need to concentrate is risk factor, where entrepreneurs can
take risk compare with others like employees and retail investors.
From this study it can be identified that people are very much
cautious to take much risk as such. It can be stated that individuals
are feeling comfortable opting minimum risk and somehow
moderate. One thing is very clearly indicating that no advisors are
opting for high risk as of information given by them.
Hence, more number of respondents opting for minimum risk and
moderate, as they are not looking for high returns but they believe
steady returns from an investment. Only few respondents about
14% of them are exposed themselves to take high risk and they are
very much aggressive in the market and looking for high returns
from an investment option.

7. Primary goal of your investment?

Respondents Educatio House Retireme

n nt
Entrepreneurs 11 9 8
Employees 12 14 18
Advisors and 4 9 15 100
others

Table 1.7: Primary Goal

Chart
2.7:

Primary Goal
Interpretation:
Sample of 100 investors and common question was raised about
primary aim of their investment. 27% of respondents mentioned that
their primary aim as Education of their children, and 32% have
clearly mentioned that they will be looking at the perspective of
housing benefit. And about 41% of respondents looking from the
perspective of retirement benefit.
Here from this sample of 100, which 28% are Entrepreneurs, 28%
are Individual Finance Advisors and retail investors and remaining
about 44% of are employees from many organizations of private
sectors.
Analysis:
From the individual’s point of view out of 100, 27% of them opted for
education as their primary goal. Many respondents have their
individual opinion to this; hence it has found that mutual funds are
best possible way to invest. About 32% of them are looking forward
for a housing benefit; they set their target as fulfill their desire with
house from an investment. 41% of them are considering as
retirement benefit, where they can enjoy the benefit of returns after
their retirement. It can be identified that most number of
respondents are looking for retirement benefit, and for liquidity.
People have view that going for retirement benefit is a better option,
where they would like to enjoy the benefit of regular income from
mutual fund scheme. Most of advisors also do consider this because
they mentioned that they are looking for regular returns for longer
period.
Hence, it is identified that more respondents are going for retirement
benefit as primary goal; from this it can conclude that mutual funds
are better investment for long term investors. And mutual funds are
the best avenues to pool their investments.

8. % of return that you are expecting with desired

anticipation of risk?
Respondents 10 – 15% 15 – 20% Above
20%
Entrepreneurs 9 14 5
Employees 10 16 18
Advisors and 5 9 14 100
others
Table 1.8: Risk Return Expectancy

Chart 2.8: Risk Return Expectancy

Interpretation:
Sample of 100 investors and common question was raised about
expected return from their investment. Their opinion goes very
similar upto some extent and then slight variation. Quite number of
responses says above 20% is what they are expecting, and
remaining respondents like to go for in between 10-20%.

Here from this sample of 100, which 28% are Entrepreneurs, 28%
are Individual Finance Advisors and retail investors and remaining
about 44% of are employees from many organizations of private
sectors.
Analysis:
From the investor’s point of view out of 100, 24% of them responded
that they are expecting in between 10-15%, very limited
respondents are expecting low returns as such. About 39% of them
are ready to take benefit of 15-20% of return from their investment
as they mentioned that when they are taking slight high risk,
obviously will have to look at good return. And almost 37% of them
are looking at 20% or more return that they are expecting from
return. Co-relate with previous question of terms (Short and long)
entrepreneurs are looking for short term, except them remaining are
looking for long term. When I asked why? One of investors has
mentioned, as long as investment period goes investors will be in a
position to earn decent returns from his investment. As long it goes
risk will be at zero level and investor will enjoy actual benefit of an
investment. It is identified that when people are opting for opting for
20% or more return definitely has to wait for longer period. From this
it can be analysed that investors following same strategy when they
are going for more % of returns.
Hence, it is identified that whenever there is an option for high
return definitely one should have to wait for longer the period,
irrespective of market performance. From this it can be stated that,
wait till maturity of a fund to enhance maximum return.
9. Where would you like to invest in mutual fund?
Respondents 20-25 25-35 35-55 55 and
above
Equity 9 12 4 0
Debt 0 2 8 12
Balanced 3 6 7 5
ELSS(Tax 4 16 10 2 100
shield)
Table 1.9: Age with combined investment
 Chart 2.9: Age with combined investment
Interpretation:
Sample of 100 investors and common question was raised about
investment area. Their opinion goes very similar even though
difference in their profession. Quite number of responses says
balanced and ELSS (Tax Shield).
Equity:
From an equity investment point of view, it is identified that most
number of investors opting for an equity investment is aged in
between 20-35; almost 84% of people are opting for equity as their
preference. With the help of this study it is identified that aged
below 35 almost respondents are going for equity as their option,
which is proved to be best option for them.

Debt:
From debt point of view, age in between 20-35, almost no one is
opting for debt as investment option. Many of them believe that debt
instrument is for those who are not willing to take any risk. And if we
see this from other angle almost 36% of people from the above age
of 35 are opting for debt. And almost 60% of people from the age
group of above 55 are going for debt as their preference.

Balanced:
From the above concept of balanced where combination of debt and
equity is concerned. Almost people have positive response towards
balanced fund; almost 22% of overall respondents mentioned their
preferences as balanced fund, and specifically mentioned that risk
will be low from this particular scheme. From the above graph we
can easily understand that how investors are cautious about their
investment plans.
ELSS (Tax shield):
From this it can be analysed that more number of respondents
opting for (ELSS) only to reduce tax burden. Most of responded are
under the age of 25-55 and people working different organization, if
we see the variation, it is identified that more number of people
belongs to private sector, where they are getting healthy income, so
as to minimize their taxes people prefer this schemes.

Analysis:
Overall if we look at it, maximum number of responses for tax
schemes, almost 40% of them are opting for this scheme
specifically, and 22% of respondents going for balanced fund, and
where as 25% of them are going for an equity option, and rest only
13% are looking at debt schemes. With the help of this we can
summarizes that respondents are well aware of schemes with prior
to their respective age. This could help them in a better way.

10. Important factors do you consider before

choosing an investment?
Respondents Safety Steady Liquidity
growth
Entrepreneurs 4 15 9
Employees 7 31 6
Advisors and 3 21 4 100
others

Table 1.10: Factors to consider

 Chart
2.10:
Factors
to

consider
Interpretation:
Sample of 100 investors and common question was raised about
factors do they consider before investment. Almost 70% are looking
from the perspective of steady growth, where as only 10% with
safety, and almost 20% are looking from the point of liquidity.

Here from this sample of 100, which 28% are Entrepreneurs, 28%
are Individual Finance Advisors and retail investors and remaining
about 44% of are employees from many organizations of private
sectors.
Analysis:
From the individual’s point of view out of 100, 14% of they
responded that they are looking for safety returns from an
investment, where investors very much cautious about their
individual plans. Almost 67% of them would like to go for steady
growth. They mentioned that when an individual looking at steady
growth obviously will wait for longer the period, and hence an
investment will be done for long term. And one of the respondents
has suggested that once investment has been done, next step
ultimately need to look for steady returns. And about 19% of them
are looking for liquidity, as some respondents are from
entrepreneurs, so they require liquidity at any moment, and rest
almost respondents will be opting for steady returns from an
investment. From this study it is identified that people are very
cautious regarding their investment plans. Most of advisors also
suggest that better to look at steady returns rather that anything
else.
Hence, investors feel that steady returns can beat further inflation,
and if we look at risk factor, at certain point of time risk of an
individual investment will be zero, and will have a decent returns
from an investment.
11. Interested fund houses to invest.

Franklin HDFC Reliance Others

Responden 28 22 18 32
ts

Table 1.11: Service Providers

Chart
2.11:

Service Providers
Interpretation:
Sample of 100 respondents where similar question was raised about
interested fund houses to invest. There were many options for them,
based upon their services people preferred one or another fund
house.

Analysis:
From this table it can be analysed that there are many number of
players who are performing in the market. But if we see their ratings
as per respondent’s preference almost 28% says Franklin Templeton
provides better facilities comparative with others. And at the same
time investors do consider brand value too. Some of the other
respondents about 22% say that HDFC mutual fund is doing well in
the market. There are respondents from other than Andhra Pradesh
who responded as HDFC doing well in the market. Where as 18% of
respondents says Reliance Mutual fund is doing well in terms of
rendering their services as well as customer service. Other
respondents abut 32% responded as other players such as Birla, DSP
Black rock, Fidility, ICICI, Sundaram etc. If we see as a whole almost
players are performing well in the market, because of huge
competition from others. So they are competitors of each other.
Hence it is identified that always customer’s preference would be
better service provider, because they expect something in return.
Basically from these fund houses people are expecting good
communication of every activity, research based data, problem
solving etc, depends upon which rating has been done.

12. Are you satisfied with your investment options?

 Respondents Yes No Total
Entrepreneurs 27 1 28
Employees 41 3 44
Advisors and 26 2 28 100
others

Table 1.12: Satisfaction Level

Chart
2.12:

Satisfaction Level
Interpretation:
Sample of 100 investors and common question was raised about
satisfaction level from mutual fund investment. Almost 95% of
respondents are satisfied with mutual fund investment and where as
only 5% respondents are not satisfied with the mutual fund
investment. This is only due to their personal experience as they
mentioned.
Here from this sample of 100, which 28% are Entrepreneurs, 28%
are Individual Finance Advisors and retail investors and remaining
about 44% of are Employees from many organizations of private
sectors.
Analysis:
From the individual’s point of view out of 100, 94% of them
responded that they are very much satisfied with mutual fund
investment. And they are quiet comfortable with kind of facility
provided by AMC’s. Most of respondents have mentioned that
industry doing well, and fund houses also reaching individual
expectations in terms of services. Only few respondents were
unhappy with mutual fund investment because of their personal
reasons. And only few told that they had bad experience with the
investment. Almost advisors are satisfied with it and many of them
suggesting others to invest in mutual funds.
Hence, it is identified that, almost all respondents quite satisfied with
services offered by various fund houses, and mutual fund
performance. So this made a clear statement that all investors are
very much satisfied with mutual funds.
 Findings

 Criteria to follow an investment strategy, which can be one of

the most important factors to consider.

 For growth oriented funds “Focus must be on medium and long

capital stock” which can able to provide good return.

 5(five) Important things to know in mutual fund calculation, so

that one can analyze in a better means. Are Alpha, SD, R-

Square, Beta, Sharpe Ratio.

 In Visakhapatnam more number of respondents are the age of

35-55, and respondents from other private organization are the

age of 25-35, with that it can be easily analyze in a better way.

 In my study most of the Investors were Graduate and some are

post graduates and they do have good market knowledge.

 In Occupation group most of the Investors were private

employees, the second most Investors were business persons

and the least were associated with advisors and retail

investors.
 It is observed that more number of respondents almost 50% of

them are opting for minimum risk, and most of them they

belonging to employees category, and rest about 36% of them

are going to moderate, most of retail and others are in this

category, and rests about 14% of them are entrepreneurs are

opting for maximum risk exposure.

 Mostly respondents preferred High Return from an investment

option, and the second most respondents preferred Low Risk,

even returns are low, and rest few are looking for liquidity and

the least they preferred Trust.

 Most number of respondents they would like to for retirement

benefit as their primary goal. And rest of them opting for other

such as education and house.

 65% of them preferred one time investment and 35% of them

preferred SIP.

 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 respondents preferred Growth Option for

healthy returns, and the second most preference given for

Dividend Payout and then least for Dividend Reinvestment.

 Almost 25% of the respondents are expecting returns in

between 10 – 15% from their mutual fund investment, and

 about 40% of them are expecting in between 15 – 20% of

return, and rest about 35% are expecting more than of 20%

from an investment.

 About 14% of the respondents expecting safety from an

investment, whereas 67% of them are looking for steady

growth and rests only few are looking for liquidity at any point

of time.

 It has been observed that almost 94% of respondents are

satisfied with investment options, and only 6% of them are not.

 It has been identified that investors showing more interested

towards SIP (systematic investment plans) rather than anything

else.

 It has been identified that some of investors are looking for

safe returns along with low risk.

 Respondents are looking for more visibility from an individual

AMC’s. In terms of transparency, and facts.

 Investors looking for more advantageous products which

should able to cover retirement benefit in a better way.

 Suggestions

 Investors’ looking for more benefits from investment, so advice

is to introduce more tailor made plans so that it would be

helpful for those needy investors.

 As investor responded that they have their individual plans, so

try to come up with more innovative investment plans.

 Should focus on introduce more long term plans, as people

demanding for more diversified long term plans.

 Should focus on introduction of ELSS (Equity linked saving

scheme) tax exemption plans under sec 80’C, so that it would

really helpful for common employee.

 Need to focus on YTM, where investors should have maximum

yield.

 Exit load should be minimized in case of withdrawal in one

year, so that more investors can participate.

 Invest in mutual funds when markets are low, will gives you

better returns.

 Short term investments should be introduced where investors

should have at least 10 to 15% returns from an investment.

 Equity diversified mutual funds can able to deliver 15 to 20%

returns over long term, so these kind of funds to be introduced

for aged below 35, where they can have maximum advantage.
 Investment through SIP (Systematic investment plans) is the

best options available in the market, so better to go with it.

 Usually high returns funds to be introduced, which can have

better advantages.

 Funds with low risk and steady returns will be introduced so

that it would be helpful for investors.

 Special funds like which would be benefited for corporate

employees, needs to be introduced.

 Some more students plans to be introduced, so that people

under this category can also be in a track.

 HDFC plans have quiet good features, so advisable to come up

with such features and promote themselves in the market.

 Retirement schemes to be introduced, which would have

regular high returns along with some value added benefits.

 Dynamic mutual funds to be introduced, which basically will be

focusing upon value, power and focus. Means they will not use

clients money directly.

 Exchange traded funds to be introduced, which are special kind

of financial investment tools to replicate the market indexes.

 There should not be any load on mutual funds, where there will

not be any charges like entry and exit load as such, only sales

commission can be charged based on its NAV.

 Conclusion

Since, from last 60 years mutual funds are there in this country. The
ride through these 60 years is not been smooth. Investor’s opinion is
still divided, while some are for the mutual funds others are against
it.
Mutual Funds (MF) have become one of the most attractive ways for
the average person to invest his money. It is said that Bank
investment is the first priority of people to invest their savings and
the second place is for investment in Mutual Funds and other
avenues. A Mutual Fund pools resources from thousands of investors
and then diversifies its investment into many different holdings such
as stocks, bonds, or Government securities in order to provide high
relative safety and returns. . Also generate leads of the prospective
investors in Mutual Funds for the Asset Management Company (AMC)

There are many improvements pending in the field and it has to

happen as soon as possible so as to call the MF industry as an
Organized and well-developed sector.

On the basis of the study it is found that Franklin Templeton

Investments pvt ltd, Visakhapatnam is better services provider than
any other AMC in city, because of their timely research and
personalized advice. Franklin Templeton Investments pvt ltd,
Visakhapatnam provides the facility of customer care for
encouragement and protects the interest of the investors.

Most of investors are not aware of market properly, since Franklin

Templeton Investments pvt ltd, Visakhapatnam customer care
department and other advisors is able to provide them necessary
information relates to market movements. Franklin Templeton
Investments pvt ltd is providing research-based team to solving
investor's problems, and they could able to maintain fair and
transparent details.

Mutual funds also charge management fees. The major advantages

of mutual funds are diversification, professional management, and
ownership of a variety of securities with a minimal capital
investment. Mutual funds are also convenient because
recordkeeping is done by the fund. There are several drawbacks,
however. Mutual funds may be costly to acquire because of sizable
commissions and professional management fees. The sale price is
known as the NAV or net asset value.

Most important role by a fund manager where the person is

responsible for implementing a fund's investing strategy and
managing its portfolio trading activities. A fund can be managed by
one person, by two people as co-managers and by a team of three or
more people. Fund managers are paid a fee for their work, which is a
percentage of the fund's average assets under management.
Another term for a fund manager is an investment manager.
Hence mutual funds are the best means of investment, where one
individual can maximizes his wealth. Mutual funds provides well
returns if an investor willing to wait for longer the period. So by this
means investors can enjoy the real benefit of mutual fund.

BIBLIOGRAPHY
Books and Journals:
Mark Mobius, 2008, “Mutual funds, an introduction to core
concepts” Asia, John Wiley & Sons, Asia Pvt Ltd.
Prasannachandra, 2007, “Investment analysis and Portfolio
management” New Delhi, Tata McGraw-Hill.
V.K.Bhalla, 2000, “Investment management” New Delhi, S.
Chand.
Finance insight, 2009, “Systematic investment planning” New
Delhi, CNBC TV 18, Prabhat Kiran, Rajendra Palace.
Deepa Venkataragavan, 2008, “Financial advisor” New Delhi,
CNBC TV 18, Personal finance editor, wealth.
“Ethical Flavour in Mutual Funds” 2001, Kolkata, article by S.
Suma, IIAM Prof.
Broachers and books by Franklin Templeton Investments house.
Websites:
www.moneycontrol.com
www.equitymaster.com
www.nseindia.com
www.bseindia.com
www.mutualfundindia.com
www.franklintempletonindia.com
 Annexure
Questionnaire on Analysis of attitude, preference and
satisfaction level of customers towards mutual funds
investment.
Name:-
Age: - Occupation:-
 Are you planning to save?

Yes No
 Do you have any investment plans?

Yes No
 Preferable period of investment?

Short term Long term

 Are you interested in mutual fund investment?

Yes No
 Anticipation of risk.

Min Moderate Maximum

 Primary goal of your investment?

Education House Retirement

benefit
 Interested fund houses to invest?

( ) ( ) (
)
 Which investment do you feel more profitable?

Fix deposits Mutual Funds Equities Others

 % of return that you are expecting?

5-10% 10-15% 15-20% above 20%

 Where would you like to invest?

Debt Equity ELSS (Tax

savings)
 % of savings towards investment?
 10-25% 30-50% 55-80% 100%
 Important factors to you consider before choosing an
investment?

Safety of investment principle

Opportunity for steady growth
Liquidity
 How do you intend to use the income earned from
investment?

Reinvest between 20-80% of earnings from

investment
Reinvest total earnings
Receive 80% and remaining reinvest.
 Are you satisfied with your investment options?

Yes No

Any suggestions:-
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Thanks for your cooperation.
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