A PROJECT REPORT On Mutual Fund A Safer Investment

Mutual fund a safer investment
INDEX PART I 1. Executive Summary 2. Introduction to Mutual Fund 3. Industrial background. 4. Company Profile PART II 5. Research Design / Methodology. a. Project Idea b. Objectives c. Duration of the Project d. Need for study e. Research Methodology f. Proposed outcome g. Benefits/ Limitations of Mutual Fund 6. Recommendation 7. Conclusion 8. Bibliography.
Babasbapatilfreepptmba.com
Page 1
Executive Summary Mutual Fund investment is the fastest growing investment industry in
the present scenario and it needs to be properly supported with educating the investor community which is not aware of Mutual Fund as it is of other forms of investment patterns like those of Fixed Deposits, Savings Accounts, Postal Deposits, Recurring Deposits, Insurance plans, Stocks etc.
The strength of ViVi securities lies in the qualitative manpower. Indian Mutual Fund investment is picking up fast, which has already happened in countries like US, U.K, France etc., the recent trends have shown that private ltd companies are doing far better as compared to Government PSUs in India which was not the case few years earlier and this implies that people are more attracted towards Mutual Funds investment as compared to other form of the investments.
Page 2
Mutual fund a safer investment Research Design

Organization:
ViVi Securities, Belgaum
Nature of Business:
Shares and Stock Broking services.
Topic of the study:

Need for the Study:

Association of mutual fund in India Asset Management company
Objectives of the study:

Organisation study. and various types of mutual fund. To study the performance of various schemes. To compare the performance of four mid cap funds. To study the risk involved in MFs
To understand the concept of Mutual fund, its working
Page 3

Research Methodology:
Study of mutual fund market Collection of data: Secondary data: data Fact sheets of SBI, Kotak, Tata and Sundaram Mutual Funds collected through various web-sites, Magazines, Journals and newspaper Analysis of data Preparation of project report
Scope of the project

The scope of the project is limited to analysis of mid cap mutual funds.
Proposed Outcome:
Avoids hassle free investments Avoids time consumption for research
Page 4
Introduction to Mutual Fund A mutual Fund is a common pool of money into which investors place their contributions that are to be invested in accordance with a stated objective. The ownership of the fund is thus joint or mutual; the fund belongs to all investors. Investor bears in the same proportion as the amount of the contribution make a single investors ownership of the fund to the total amount of the fund. A mutual fund uses the money collected from investors to buy those assets, which are specifically permitted by its stated investment objective. Thus an equity fund would buy mainly equity assets ordinary shares, preference shares, warrants, etc. A bond fund would mainly buy debt instruments such as debentures, bonds or government securities. It is these assets, which are owned by the investors in the same proportion as their contribution bears to the total contributions of all investors put together. When an investor subscribes to a mutual fund, he or she buys a part of the assets or the pool of funds that are outstanding at that time. It is no different from buying shares of a joint stock company, in which case the purchase makes the investor a part owner of the company and its assets.
Page 5
TYPES OF MUTUAL FUNDS Mutual funds can be classified in different ways according to their investment objectives, their constitution, as follows: Equity Fund Debt / Income Funds Balanced Funds Liquid / Money Market Funds Closed Ended funds Open Ended Funds Load Funds No Load Funds
Page 6

CLASSIFICATION BASED ON INVESTMENT OBJECTIVE: Funds can be classified according to their investment objectives on 4 main categories as they best reflect the risk and returns associated with investing in mutual funds. 1. EQUITY FUNDS:
Equity funds invest a major portion of their corpus in equity shares issued by companies, acquired directly in initial public offerings or through the secondary market. Equity funds would be exposed to the equity price fluctuation risk at the market level, at the industry or sector level and at the company-specific level. Equity funds, Net Asset Values fluctuate with all these price movements these price movements are caused by all kinds of external repayment as in case of debt instruments. Hence, Equity Funds are generally considered at the higher end of the risk spectrum among all funds available in the market. On the other hand, unlike debt instruments that offer fixed amounts of repayments equities can appreciate in value in line with the issuers earnings potential, and so offer the greatest potential for growth in capital. Equity Funds adopt different investment strategies resulting in different levels of risk. Hence, they are generally separated into different types in terms of their investment styles. Below are some of the major types of equity funds, arranged in order of higher to lower risk level a. Aggressive Growth Funds b. Growth Funds
Page 7

c. Specialty Funds 1. Sector Funds 2. Offshore Funds 3. Small-Cap Equity Funds 4. Option Income funds All AMCs have floated this type of funds. Prominent examples include JM Equity Fund, Morgan Stanley Growth Fund, Mastergain 92, Birla Advantage Fund, Sun F&C Value Fund, Kothari Pioneer Prima fund etc.
2. DEBT/INCOME FUNDS:
Debt Funds invest in debt instruments issued not only by governments, but also by private companies, banks and financial institutions and other entities such as infrastructure companies/utilities. By investing in debt, these funds target low risk and stable income for the investor as their key objectives. However, as compared to the money market funds, they do have a higher price fluctuation risk, since they invest in longer-term securities. Similarly, as compared to Gilt Funds, general debt funds do have a higher risk of default by their borrowers. 1. Debt funds are largely considered as Income Funds as they do not target capital appreciation, look for high current income, and therefore distribute a substantial part of their surplus to investors. Income funds that target returns substantially above market levels can face more risks. Different investment objectives set by the fund managers would result in different risk profiles.
Page 8

3. BALANCED FUNDS: These are funds that invest both in equity shares and income bearing instruments. Then idea is to reduce the volatility of the fund while providing some upside for capital appreciation. There is some flexibility in changing the asset composition between equity and debt and the fund managers exploit this to buy the best asset class at each time. Prominent balanced funds include JM Balanced Fund, Alliance 95, Tata Twin Option Balanced and GIC balanced funds. Govt. has announced special concessions for funds with more that 50% of the assets invested in equity. So for next three years the dividend will be taxed neither in the hands of the investor nor in the hands of the funds.
4. LIQUID / MONEY MARKET FUNDS: Often considered to be at the order of risk level, Money Market Funds invest in securities of a short-term nature, which generally means securities of less than one-year maturity. The typical, short term, interest bearing instruments these funds invest in include Treasure Bills issued by Governments, Certificates of Deposit issued by banks and Commercial Paper issued by companies. In India, Money Market Mutual Funds also invests in the inter bank call money market. The major strengths of money market funds are the liquidity and safety of principal that the investors can normally expect from short-term investments. These funds invest in highly liquid money market instruments. They have emerged as an alternative for savings and short term fixed deposit accounts. Regulations for managing liquid funds are more flexible than those for managing money market funds. Hence they are more popular than the latter. Eg. Birla Cash Plus, Prudential Liquid Fund, Templeton India Liquid fund, UTI fund, UTI Money Market Funds, JM Liquid fund.
Page 9
CLASSIFICATION BASED ON CONSTITUTION OBJECTIVE:

1. OPEN END-CLOSED END FUNDS: An open-end fund is one that has units available for sale and repurchase at all time. An investor can buy or redeem units from the fund itself at a price based on the Net Asset Value (NAV) per unit. NAV per unit is obtained by dividing the amount of the market value of the funds assets (plus accrued income minus the funds liabilities) by the number of units outstanding. The number of units outstanding goes up or down every time the fund issued new units outstanding. The number of units outstanding goes up or down every time the fund issued new units or repurchases existing units. In other words, the unit capital of an open-end mutual fund is not fixed but variable. The fund size and its total investment amount go up if more new subscriptions come in from new investors than redemptions by existing investors; the fund shrinks when redemptions of units exceed fresh subscriptions. Note that an open-end fund is not obliged to keep selling/issuing new units at all times, and many successful funds stop issuing further subscriptions from new investors after they reach a certain size and think they cannot manage a larger fund without adversely affecting profitability. On the other hand, an open-end fund rarely denies to its investors the facility to redeem existing units, subject to certain obvious conditions. For example, redemption is only possible after the investors cheque for initial subscription has cleared, or until after any look-in period specified by the fund is over, or only after the specified redemption period for collection of funds. Unlike an open-end fund, the unit capital of a closed-end fund is fixed, as it makes a onetime sale of a fixed number of units. Later on, unlike open-end funds, closed-end funds do not allow investors to buy or redeem units directly from the funds. However, to provide the much closed-end funds get themselves listed on a stock exchange. Trading through a stock exchange enables investors to buy or sell units of a closed-end mutual fund from each other, through a stockbroker, in the same fashion as buying or selling shares of a company. Babasbapatilfreepptmba.com Page 10

The funds units may be traded at a discount or premium to NAV based on investors perceptions about the funds future performance and other market factors affecting the demand for or supply of the funds units.
2. LOAD AND NO-LOAD FUNDS: Marketing of a new mutual fund scheme involves initial expenses. These expenses may be recovered from the investors in different ways at different time. Three usual ways in which a funds sales expenses may be recovered from the investors are: I. At the time of investors entry into the fund/scheme, by deducting a specific amount from his initial contribution, or 2. By charging the fund/scheme with a fixed amount each year, during the stated number of years, or 3. At the time of the investors exit from the fund/scheme, by deducting a specified amount from the redemption proceeds payable to the investor. These charges made by the fund managers to the investors to cover distribution expenses are often called a front-end or entry-load. This is the first case above. The load amount charged to the scheme over a period of time is called a deferred load. This is the third case above. Some funds may also charge different amount of loads to the investors, depending upon how many years the investor has stayed with the fund; the longer the investor stays with the fund, less the amount of exit load he is charged. This is called contingent deferred sales charge. Note that the front-end load amount is deducted from the initial contribution/purchase amount paid by the incoming investor, thus reducing his initial investment amount. Similarly exit loads would reduce the redemption proceeds paid out to the outgoing investor. If the sales charge is made on a deferred basis directly to the scheme, the amount of the load may not be apparent to the investor, as the schemes NAV would reflect the net amount after the deferred load.
Page 11

Funds that charge front-end, back-end or deferred loads are called load funds. Funds that make no such charges or loads for sales expenses are called no-load funds. In India, SEBI has defined a load as the one-time fee payable by the investor to allow the fund to meet initial issue expenses including brokers/agents/distributors commissions, advertising and marketing expenses. SEBI definition of a load fund would include all funds that charge a front-end load, which is in line with the internationally used definition. However, SE would consider a fund to be a no-load fund, if an AMC absorbs these initial marketing expenses and does not charge the fund-a situation that is somewhat special to India and not widely prevalent elsewhere. Internationally, a fund, even when it does not make a front-end load, would still be considered a load fund, if it charges an exit load or a deferred sales load.
Page 12
Industrial Background Concept of Mutual Fund:

Mutual Fund is an American Concept and the terms Investments Trust, Investment Company, Mutual Fund, Money Fund etc. are being used interchangeably in American Literature. Investment Company as defined in the US Investment company Act 1940 is any issuer that is or holds out as being engaged primarily or proposes to engage primarily in the business of investing, reinvesting or trading in securities, is engaged or proposes to the business of issuing face amount of certificates of the installment type or has been engaged in such business and has any such certificates outstanding; is engaged or proposes to engage in the business of investing, reinvesting, owning, holding or trading in securities and bounds or proposes to acquire investment securities having a value exceeding 40% of the value of such issuers total assets(exclusive of government of securities and a cash items) on an unconsidered basis.
The profits or losses are shared by the investors in proportion to their investments. The mutual fund normally comes out with number of schemes with different objectives which are launched from time to time. A Mutual
Babasbapatilfreepptmba.com Page 13

fund is required to be registered with Securities and Exchange Board of India (SEBI) which regulates securities markets before it can collect funds from the public. As the countries first and foremost mutual fund, Unit Trust of India has played significant supportive role in this process. As a pioneering garner larger household savings. It responded innovatively to the needs of investment and income goals of different strata of society. Under one roof there are schemes for every one in the family, from the newborn child to old and retired individuals. The Unit Trust has lunched schemes to cater to varying notions of savers. Thus, there are saving schemes for those who prefer safe and steadily rising returns. There are also high growth schemes for those who can wait and are prepared to take some risk with UTI With a view to providing a wider choice to small investors, the Government amended Banking Regulation Act to permit commercial banks to launch mutual fund India. Considering the fact that the household sector has a dominant share in the aggregate net savings of the economy, banks in their quest for mobilizing the community savings into productive avenues have found in mutual funds a lucrative opportunity.
Page 14

COMPANY PROFILE
FOUNDATION OF VENTURA
Founded in 1994 by Chartered Accountants Sajid Malik and Hemant Majethia. They are the first generation entrepreneurs and are the principal promoters of Ventura. A dedicated and efficient team of senior managers assists Mr. Majethia the CEO of the company.
ABOUT VENTURA
Ventura is one of the leading Commodity and Financial Futures Brokers with a strong and established market reputation spanning over 12 years. Ventura Securities Ltd., is a leading stock broking organization promoted and managed by professionals having exceptional knowledge of Capital Market. We recognize in our operating philosophy that the key to our business is service, which will result in total satisfaction to our clients. Ventura is a full-service domestic brokerage house providing value-based advisory services to Institutions (Foreign and Domestic), High Net Worth and Retail Investors with its core area of operations being stock-broking. We have considerable strength and domain knowledge in the booming derivatives market. Ventura has achieved a reputation for innovative and unbiased research along with excellent technical analysis and execution capabilities. Not only has Ventura provided value-added services to the gamut of India-based funds, it has also developed the advicedriven business of high net worth and corporate clients.
PHILOSOPHY
To propel corporate growth we have clear focus to service our clients with undivided attention hence, we do not carry on any proprietary trading or investment. Vision To create an all India network of brokers relationship and build the distribution strength of Ventura.
Page 15

TRACK RECORD
In a short time span we have achieved substantial success in its core business activity. We owe our success to our unique business building strategy plan, components of which are: A differentiated positioning Selective geographic spread Flexible and lean operating structure High quality people
Why ventura
Our services are offered under total confidentiality and integrity with the sole purpose of maximizing returns for our clients We operate on an alert and well-defined system in risk management and settlement mechanism. Such as EXPERTISE
Current news and views, analysis, trends during market hours, Daily newsletter and its implications on events affecting the economy and stock markets, Long-term investment avenues, trading strategy on Index and specific companies and Risk averse investment through derivative product mix. Live market commentary through - Pointer- customised on line chat room mainly to cater to upcountry outlets, a pioneering effort and a runaway successful product. Derivatives - Trading strategies in Future and Options; straddle calls to minimize risks and maximize returns. On-line trading and Depository services, to cater our retail clients, are on the anvil and should commence shortly. Research - An integrated system of research approach is to constantly look out for value in the market place based on intrinsic worth of the Company / Industry with necessary skills to analyse markets indices and stocks from a technical perspective to feed our army of retails clients. Networking: Regular touch with Institutional Investors (Foreign and Domestic) to gauge, understand and interpret markets sentiments. This we see as a value addition for our outstation clients who are very far away from the fulcrum of action.
Page 16

Products and services
We aim to add value and provide our clients with an unrivalled and specialised service which reflects the expertise and efficiency of our dedicated support teams.
Expertise and innovation

We put our clients' needs first and extend a highly personalised service through dedicated dealers. Our combination of service, technology, flexibility and experience makes our back-office second-to-none.
Information and research

No broking house is complete without the ability to provide detailed, relevant and timely information and research. Our research department produces reports covering all of the major exchanges and products.
Offerings
Daily pointer Sms facility Client preview site Demat services Wider networking Weekly report and product notes Internet online trading
Page 17
About ViVi Securities, Belgaum Branch

The Belgaum branch was started on 21st June 2004 with the capital of Rs 5 lakh. And the average volumes 2.5 to 3 crores and it has around 700 customers at present and its advertisement is mainly word of mouth.
Objectives Good services Proper guidance to investor Maximize its returns This branch offers trading in NSE BSE Derivatives Mutual fund Commodity exchange Demat services
Page 18
MUTUAL FUND STRUCTURE
The structure of mutual fund consists of Sponsor Sponsor is the person who acting alone or in combination with another body corporate establishes a mutual fund. Sponsor must contribute at least 40% of the net worth of the Investment Managed and meet the eligibility criteria prescribed under the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996.The Sponsor is not responsible or liable for any loss or shortfall resulting from the operation of the Schemes beyond the initial contribution made by it towards setting up of the Mutual Fund.
Page 19
Trust The Mutual Fund is constituted as a trust in accordance with the provisions of the Indian Trusts Act, 1882 by the Sponsor. The trust deed is registered under the Indian Registration Act, 1908. Trustee Trustee is usually a company (corporate body) or a Board of Trustees (body of individuals). The main responsibility of the Trustee is to safeguard the interest of the unit holders and ensure that the AMC functions in the interest of investors and in accordance with the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, the provisions of the Trust Deed and the Offer Documents of the respective Schemes. Asset Management Company (AMC) The Trustee as the Investment Manager of the Mutual Fund appoints the AMC. The AMC is required to be approved by the Securities and Exchange Board of India (SEBI) to act as an asset management company of the Mutual Fund. Atleast 50% of the directors of the AMC are independent directors who are not associated with the Sponsor in any manner. The AMC must have a net worth of atleast 10 crore at all times.
Registrar and Transfer Agent The AMC if so authorized by the Trust Deed appoints the Registrar and Transfer Agent to the Mutual Fund. The Registrar processes the application form; redemption requests and dispatches account statements to the unit holders. The Registrar and Transfer agent also handles communications with investors and updates investor records.
Page 20
Benefits of Mutual Fund investment Professional Management Mutual Funds provide the services of experienced and skilled professionals, backed by a dedicated investment research team that analyses the performance and prospects of companies and selects suitable investments to achieve the objectives of the scheme. Diversification Mutual Funds invest in a number of companies across a broad cross-section of industries and sectors. This diversification reduces the risk because seldom do all stocks decline at the same time and in the same proportion. You achieve this diversification through a Mutual Fund with far less money than you can do on your own. Convenient Administration Investing in a Mutual Fund reduces paperwork and helps you avoid many problems such as bad deliveries, delayed payments and follow up with brokers and companies. Mutual Funds save your time and make investing easy and convenient. Return Potential Over a medium to long-term, Mutual Funds have the potential to provide a higher return as they invest in a diversified basket of selected securities. Low Costs Mutual Funds are a relatively less expensive way to invest compared to directly investing in the capital markets because the benefits of scale in brokerage, custodial and other fees translate into lower costs for investors. DEMERITS OF INVESTMENTS IN MUTUAL FUNDS No control over the costs: Since investors do not directly monitor the funds operations they cannot control the costs effectively. Regulators therefore usually limit the expenses of mutual funds. No tailor-made portfolios: Mutual fund portfolios are created and marketed by AMCs, into which investors invest. They cannot create tailor made portfolios. Managing a portfolio of funds:
Page 21

As the number of mutual funds increases, in order to tailor a portfolio for him, an investor may be holding a portfolio of funds, with the costs of monitoring them and using them, being incurred by him.
Benefits of investing in Mutual Funds: 1. Qualified and experienced professionals manage Mutual Funds. Generally, investors, by themselves, may have reasonable capability, but to assess a financial instrument a professional analytical approach is required in addition to access to research and information and time and methodology to make sound investment decisions and keep monitoring them. 2. Since Mutual Funds make investments in a number of stocks, the resultant diversification reduces risk. They provide the small investors with an opportunity to invest in a larger basket of securities. 3. The investor is spared the time and effort of tracking investments, collecting income, etc. from various issuers, etc. 4. It is possible to invest in small amounts as and when the investor has surplus funds to invest. 5. Mutual Funds are registered with SEBI. SEBI monitors the activities of Mutual Funds. 6. In case of open-ended funds, the investment is very liquid as it can be redeemed at any time with the fund unlike direct investment in stocks/bonds.
Page 22
Risks involved in investing in Mutual Funds:

Mutual Funds do not provide assured returns. Their returns are linked to their performance. They invest in shares, debentures and deposits. All these investments involve an element of risk. The unit value may vary depending upon the performance of the company and companies may default in payment of interest/principal on their debentures/bonds/deposits. Besides this, the government may come up with new regulation which may affect a particular industry or class of industries. All these factors influence the performance of Mutual Funds.
Market Risk
Sometimes prices and yields of all securities rise and fall. Broad outside influences affecting the market in general lead to this. This is true, may it be big corporations or smaller mid-sized companies. This is known as Market Risk. A Systematic Investment Plan (SIP) that works on the concept of Rupee Cost Averaging (RCA) might help mitigate this risk.
Political/Government Policy Risk

Changes in government policy and political decision can change the investment environment. They can create a favorable environment for investment or vice versa
Inflation Risk
Inflation is the loss of purchasing power over time. A lot of times people make conservative investment decisions to protect their capital but end up with a sum of money that can buy less than what the principal could at the time of the investment. This happens when inflation grows faster than the return on your investment. A well-diversified portfolio with some investment in equities might help mitigate this risk.
Interest Rate Risk

In a free market economy interest rates are difficult if not impossible to predict. Changes in interest rates affect the prices of bonds as well as equities. If interest rates rise the prices of Babasbapatilfreepptmba.com Page 23

bonds fall and vice versa. Equity might be negatively affected as well in a rising interest rate environment. A well-diversified portfolio might help mitigate this risk.
Liquidity Risk
Liquidity risk arises when it becomes difficult to sell the securities that one has purchased. Liquidity Risk can be partly mitigated by diversification, staggering of maturities as well as internal risk controls that lean towards purchase of liquid securities.
Credit Risk
The debt servicing ability (may it be interest payments or repayment of principal) of a company through its cash flows determines the Credit Risk faced by you. This credit risk is measured by independent rating agencies like CRISIL who rate companies and their paper. A AAA rating is considered the safest whereas a D rating is considered poor credit quality. A well-diversified portfolio might help mitigate this risk.
The different plans that Mutual Funds offer:

Growth Plan A growth plan is a plan under a scheme wherein the returns from investments are reinvested and very few income distributions, if any, are made. The investor thus only realises capital appreciation on the investment. This plan appeals to investors in the high income bracket. Under the dividend plan, income is distributed from time to time. This plan is ideal to those investors requiring regular income.
Automatic
Investment
Plan
Under the Automatic Investment Plan (AIP) also called Systematic Investment Plan (SIP), the investor is given the option for investing in a specified frequency of months in a specified scheme of the Mutual Fund for a constant sum of investment. AIP allows the investors to plan their savings through a structured regular monthly savings program.
Entry/Exit Load:
A Load is a charge, which the AMC may collect on entry and/or exit from a fund. A load is levied to cover the up-front cost incurred by the AMC for selling the fund. It also covers Babasbapatilfreepptmba.com Page 24

one time processing costs. Some funds do not charge any entry or exit load. These funds are referred to as 'No Load Fund'. Funds usually charge an entry load ranging between 1.00% and 2.00%. Exit loads vary between 0.25% and 2.00%.
ASSOCIATION OF MUTUAL FUNDS IN INDIA (AMFI) :

With the increase in mutual fund players in India, a need for mutual fund association in India was generated to function as a non-profit organization. Association of Mutual Funds in India (AMFI) was incorporated on 22nd August, 1995. AMFI is an apex body of all Asset Management Companies (AMC) which has been registered with SEBI. Till date all the AMCs are that have launched mutual fund schemes are its members. It functions under the supervision and guidelines of its Board of Directors. Association of Mutual Funds India has brought down the Indian Mutual Fund Industry to a professional and healthy market with ethical lines enhancing and maintaining standards. It follows the principle of both protecting and promoting the interests of mutual funds as well as their unit holders. The objectives of Association of Mutual Funds in India : The Association of Mutual Funds of India works with 30 registered AMCs of the country. It has certain defined objectives which juxtaposes the guidelines of its Board of Directors. The objectives are as follows:
This mutual fund association of India maintains high professional and ethical standards in all areas of operation of the industry.
It also recommends and promotes the top class business practices and code of conduct which is followed by members and related people engaged in the activities of mutual fund and asset management. The agencies who are by any means connected or involved in the field of capital markets and financial services also involved in this code of conduct of the association.
AMFI interacts with SEBI and works according to SEBIs guidelines in the mutual fund industry. Page 25
Association of Mutual Fund of India does represent the Government of India, the Reserve Bank of India and other related bodies on matters relating to the Mutual Fund Industry.
It develops a team of well qualified and trained Agent distributors. It implements a programme of training and certification for all intermediaries and other engaged in the mutual fund industry.
AMFI undertakes all India awareness programme for investors in order to promote proper understanding of the concept and working of mutual funds.
At last but not the least association of mutual fund of India also disseminate informations on Mutual Fund Industry and undertakes studies and research either directly or in association with other bodies.
Page 26

Name of the Asset Management Company:
Name of the Asset Management Company ABN AMRO Asset Management (India) Ltd. Benchmark Asset Management Co. Pvt. Ltd. Birla Sun Life Asset Management Co. Ltd. BOB Asset Management Co. Ltd. Canbank Investment Management Services Ltd. DBS Cholamandalam Asset Management Ltd. Deutsche Asset Management (India) Pvt. Ltd. DSP Merrill Lynch Fund Managers Ltd. Escorts Asset Management Ltd. Fidelity Fund Management Pvt.Ltd. Franklin Templeton Asset Management (India) Pvt. Ltd. HDFC Asset Management Co. Ltd. HSBC Asset Management (India) Pvt. Ltd. ING Investment Management (India) Pvt. Ltd. JM Financial Asset Management Pvt. Ltd.
Website http://www.assetmanagement.abnamro.co.in/ http://www.benchmarkfunds.com/ http://www.birlasunlife.com/ http://www.bobmf.com/ http://www.canbankmutual.com/ http://www.dbscholamutualfund.com/ http://www.dws-india.com/ http://www.dspmlmutualfund.com/ http://www.escortsmutual.com/ fidelity.co.in http://www.franklintempletonindia.com/ http://www.hdfcfund.com/ http://www.hsbcinvestments.co.in/ http://www.ingvysyamf.com/ http://www.jmfinancialmf.com/
Page 27

Jeevan Bima Sahayog Asset Management Co. Ltd. Kotak Mahindra Asset Management Co. Ltd. Lotus India Asset Management Co. Pvt. Ltd. Morgan Stanley Investment Management Pvt. Ltd. Principal Pnb Asset Management Co. Pvt. Ltd. Prudential ICICI Asset Management Co. Ltd. Quantum Asset Management Co. Pvt. Ltd. Reliance Capital Asset Management Ltd. Sahara Asset Management Co. Pvt. Ltd. SBI Funds Management Pvt. Ltd. Standard Chartered Asset Management Co. Pvt. Ltd. Sundaram BNP Paribas Asset Management Co. Ltd. Tata Asset Management Ltd. Taurus Asset Management Co. Ltd. UTI Asset Management Co. Pvt. Ltd.
http://www.licmutual.com/ http://www.kotakmutual.com/ http://www.lotusindiaamc.com/ http://www.msgfindia.com/ http://www.principalindia.com/ http://www.pruicici.com/ http://www.quantumamc.com/ http://www.reliancemutual.com/ http://www.saharamutual.com/ http://www.sbimf.com/ http://www.standardcharteredmf.com/ http://www.sundarambnpparibas.in/ http://www.tatamutualfund.com/ http://www.taurusmutualfund.com/ http://www.utimf.com/
Mutual Fund Globally
Page 28

The money market mutual fund segment has a total corpus of $ 1.48 trillion in the U.S. against a corpus of $ 100 million in India. Out of the top 10 mutual funds worldwide, eight are bank- sponsored. Only Fidelity and Capital are non-bank mutual funds in this group. In the U.S. the total number of schemes is higher than that of the listed companies while in India we have just 277 schemes Internationally, mutual funds are allowed to go short. In India fund managers do not have such leeway. In the U.S. about 9.7 million households will manage their assets year 2003, such a facility is not yet of avail in India. on-line by the
On- line trading is a great idea to reduce management expenses from the current 2 % of total assets to about 0.75 % of the total assets.
Changes Taken Place Lower Costs: As per SEBI regulations, bond funds can charge a maximum of 2.25% and equity funds can charge 2.5% as administrative fees. Therefore if the administrative costs are low, the benefits are passed down and hence Mutual Funds are able to attract mire investors and increase their asset base. Better Advice: Mutual funds could provide better advice to their investors through the Net rather than through the traditional investment routes. Direct dealing with the fund could help the investor with their financial planning. New investors would prefer online: Mutual funds can target investors who are young individuals and who are Net savvy, since servicing them would be easier on the Net.
Future of Mutual Fund


Mutual Funds sponsored by various public sector financial institutions have made considerable dent particularly in the sphere of resource mobilization during the short period of their existence. This they have been able to achieve through launching of several scheme offering triple benefits of income, liquidity and growth. However, they have so far confined their area of operations to urban areas leaving vast savings potentiality in rural hinterlands untapped. By beneficences of rural a5reas and introducing them about the benefits of the schemes, mutual funds can raise burgeoning amount of resources, which can be gainfully employed for the national development. All this is possible only when the people have full confidence that their investments in mutual funds will remain safe. To inspire such confidence it is necessary that the Government should enact a comprehensive legislation on the pattern of the UTI Act govern the operations of all the mutual funds. The asset base will continue to grow at an annual rate of about 30 to 35 % over the next few years as investors shift their assets from banks and other traditional avenues. Some of the older public and private sector players will either close shop or be taken over. Out of ten public sector players five will sell out, close down or merge with stronger players in three to four years. In the private sector this trend has already started with two mergers and one takeover. Here too some of them will down their shutters in the near future to come. But this does not mean there is no room for other players. The market will witness a flurry of new players entering the arena. There will be a large number of offers from various asset management companies in the time to come. Some big names like Fidelity, Principal, Old Mutual etc. are looking at Indian market seriously. One important reason for it is that most major players already have presence here and hence these big names would hardly like to get left behind. The mutual fund industry is awaiting the introduction of derivatives in India as this would enable it to hedge its risk and this in turn would be reflected in its Net Asset Value (NAV). SEBI is working out the norms for enabling the existing mutual fund schemes to trade in derivatives. Importantly, many market players have called on the Regulator to initiate the process immediately, so that the mutual funds can implement the changes that are required to trade in Derivatives.
COMPARISON OF MUTUAL FUND WITH OTHER INVESTMENT Mutual Funds with Sharers:

In case of investing in shares youll have to spend the time to study and learn the market, also you should learn to buy individual stocks, because you maximize your gains by investing in the leading stocks in the leading groups in the markets. If you dont want to spend the time, delegate it to a good diversified domestic stock fund. The mutual fund company has an investment manager for each scheme that decides upon where to invest, how to invests and when to invest. He will take care of your investment.
Mutual Funds with Fixed Deposit:

In case of the fixed deposit the money, which you have invested, will lock in for certain period until the fixed deposit matures. That is before the lock in period you cant remove your money. The returns on the fixed deposit are only the interest prescribed on it. Where as in the mutual fund investment there is exit option for every scheme by which you can exit at any time. Due to which your money will not be locked. In the mutual fund investment the returns are through the dividend and also the growth appreciation.
Mutual funds are now also competing with commercial banks in the race for retail investors savings and corporate float money. The power shift towards mutual funds has become obvious. . The basic fact lies that banks cannot be ignored and they will not close down completely. Their role as intermediaries cannot be ignored. It is just that Mutual Funds are going to change the way banks do business in the future.
Banks v/s Mutual Funds BANKS Returns Low Administrative exp. High
MUTUAL FUNDS Better Low

Page 31

Risk Investment options Network Liquidity Quality of assets Interest calculation Guarantee Low Less High penetration At a cost Not transparent Minimum balance between 10th & 30th. Of every month Maximum Rs.1 lakh on deposits Moderate More Low but improving Better Transparent Everyday None
INVESTORS SEVEN RULES Here are seven rules that go a long way in helping you meet your investment objectives. Know your risk profile: Your investments should reflect your risk taking capacity. Equity funds might lure when the market is rising and your neighbor is making money, but if you are not cut out for the risk that accompanies it dont bite the bait. So, check if the funds objective matches yours. Invest only after you have found your match. If you are racked by uncertainty, seek exper4t advice from a qualified financial advisor. Identify your investment horizon: Invest in an equity fund only if you are willing to stay on for at least two years. For income and gilt funds, have a one-year perspective at least. Anything less than one year, the only option among mutual funds is liquid funds.
Read the offer document carefully: The offer document contains essential details pertaining to the fund, including the summary information (type of scheme, the name of the Asset

Management Company and price of units among other things), investment objectives and investment procedure, financial information and risk factors. Go through the fund fact sheet: Fund fact sheets give you valuable information of how the fund has performed in the past. You can check the funds portfolio, its diversification levels and its performance in the past. The more fact sheets you examine, the better. Diversify across fund houses: If you are routing a substantial sum through mutual funds, you should diversify across fund houses. That way, you spread your risk. Do not chase incentives: Dont get lured by investment incentives. Some financial intermediaries give upfront incentives, in the form of a percentage of your initial investment, to invest in a particular fund. Dont buy it. Your focus should be to find a fund that matches your investment needs and risk profile, and is a performer. Track your investments: One easy way to keep track of your fund is to keep track of the intelligent investor rankings of mutual funds, which are complied on a quarterly basis. These rankings allow you to take note of your funds performance and risk profile and compare it across various time periods as well as across its peer set,
Net Asset Value (NAV)

The net asset value of the fund is the cumulative market value of the assets fund net of its liabilities. In other words, if the fund is dissolved or liquidated, by selling off all the assets in the fund, this is the amount that the shareholders would collectively own. This gives rise Babasbapatilfreepptmba.com Page 33

to the concept of net asset value per unit, which is the value, represented by the ownership of one unit in the fund. It is calculated simply by dividing the net asset value of the fund by the number of units. Calculation of NAV The most important part of the calculation is the valuation of the assets owned by the fund. Once it is calculated, the NAV is simply the net value of assets divided by the number of units outstanding. The detailed methodology for the calculation of the asset value is given below. NAV= (Market valueof the schemes investment) + Other Assets (Including accrued interest) + Unamortized issue expenses (only in case of schemes launched on load basis) All Liabilities except All Asset and liabilities are valued at the current prices Details on the above items For liquid shares/debentures, valuation is done on the basis of the last or closing market price on the principal exchange where the security is traded For illiquid and unlisted and/or thinly traded shares/debentures, the value has to be estimated. For shares, this could be the book value per share or an estimated market price if suitable benchmarks are available. For debentures and bonds, value is estimated on the basis of yields of comparable liquid securities after adjusting for illiquidity. The value of fixed interest bearing securities moves in a direction opposite to interest rate changes Valuation of debentures and bonds is a big problem since most of them are unlisted and thinly traded. This gives considerable leeway to the AMCs on valuation and some of the AMCs are believed to take advantage of this and adopt flexible valuation policies depending on the situation. Interest is payable on debentures/bonds on a periodic basis say every 6 months. But, with every passing day, interest is said to be accrued, at the daily interest rate, which is calculated by dividing the periodic interest payment with the number of days in each period. Thus, accrued interest on a particular day is equal to the daily interest rate multiplied by the number of days since the last interest payment date. Usually, dividends are proposed at the time of the Annual General meeting and become due on the record date. Mutual Fund Weightage to various sectors in March'07 investment trend by various fund houses over the last 6 months Sector Investment (Rs. cr) Engineering 14,169.39 Banking/Finance 12,710.10 Information Technology 11,838.24 Babasbapatilfreepptmba.com
Weightage 14.2% 12.7% 11.9% Page 34

Oil & Gas Automotive Cement Telecom Pharmaceuticals Manufacturing Metals & Mining Media Chemicals Conglomerates Miscellaneous Services Utilities Consumer Non-Durables Food & Beverage Tobacco Consumer Durables TOTAL 7,706.11 6,731.96 5,822.06 5,683.10 5,533.54 5,322.88 4,976.70 3,183.53 3,131.07 2,603.40 1,990.53 1,834.24 1,772.22 1,771.20 1,467.79 1,420.23 177.89 99,846.19 7.7% 6.7% 5.8% 5.7% 5.5% 5.3% 5.0% 3.2% 3.1% 2.6% 2.0% 1.8% 1.8% 1.8% 1.5% 1.4% 0.2% 100.0%
Systematic Investment Plan - A plan for future

1 Investment - The basics We can define investment as the process of Sacrificing something now for the prospect of gaining something later. The definition implies that there are three dimensions of an investment-time, todays sacrifice and prospective gain. Investment is a three-step process.
Page 35
Step 1
Identifying ones financial goals
Step 2
Select of asset classes
Step 3
Regular savings plan
For example,
If Mr. Xs monthly consumption expenditure is Rs 20,000 today and he wants to maintain the same standard of living when he retires. What sum he will require if he is 30-yearold now? Assuming five percent inflation he would need Rs 78,400 a month when he retires at 58. Now to earn this amount every month from investment that earn 5 percent a year, he would need to have saved Rs 1.88 Crore when he retires. If he can put aside 20,000 a month he can just invest them in bonds that earn 5 percent and reach the target in most non-volatile manner. At the other extreme, he could invest just Rs 4166 every month in equities. Assuming 15 per cent returns this should generate the desired Rs 1.8 Crore. Actually real strategy should be to take a middle path between these two extremes and allocate some portion of portfolio to both based on your own financial situation and risk taking ability. Taking a cue from the above example systematic investment plan is the one, which helps in achieving financial goal of an individual.
What is a Systematic Investment Plan? Systematic Investment Plan (SIP) is a disciplined way of investing, where you invest fixed amounts at a regular frequency. You often decide to start saving and investing regularly, but get caught up in your day-to-day activities and forget investments. SIP, the time-tested investment approach helps bring in the much-needed discipline, and has shown good results the world over.
1 1
Benefits of SIP
Page 36

Rupee cost averaging Power of compounding Makes Investment a habit Low Cost (No entry load) 2 Rupee Cost Averaging
0 1 2 3
X and Y who are on a trip to a riverbank decide to test their swimming skills. X dives deep into the water, kicks his legs, splashes the water, stroke hard, shows all his skill to move faster than the current of the water. Y decides just to remain afloat and allow the stream to take him along with it. In the end, to your surprise you find that Y has covered more distance than X. The same applies to equity market also; most of us try to time the market perfectly. But, this is difficult at best given the volatility of the stock markets. Unfortunately, it is impossible to consistently predict the markets and even experienced investment professionals find it hazardous to do so. Nevertheless, there is a proven investment strategy that can help you offset the volatility of the markets and turn it into an advantage. This strategy is called Rupee Cost Averaging. Below is the example to explain how it works nder systematic investment plan:
Page 37

Simply put, Rupee Cost Averaging is a disciplined investment practice that takes the guesswork out of "timing" the markets. The essence of this strategy is that more units are
Month
Amount Fluctuating Invested (Rs) Market Price Units Price Units Price 1 2,000.00 12.00 166.67 2 2,000.00 15.00 133.33 3 2,000.00 9.00 222.22 4 2,000.00 15.00 133.33 Total 8,000.00 51.00 655.56 Average Rs. 12.20(i.e. Rs. 8000/ 655.55 cost per units) unit
Rising Market
Falling Market
Units 12.00 166.67 12.00 166.67 14.00 142.86 10.00 200.00 16.00 125.00 8.00 250.00 18.00 111.11 6.00 333.33 60.00 545.64 36.00 950.00 Rs. 14.66(i.e. Rs 8.42(i.e.Rs. Rs. 8000/ 8000/950.00 units) 545.63 units)
purchased automatically when prices are low and fewer units when prices are high. Over time, this result in the average cost per unit - the money you pay - being lower than the average price per unit
Power of compounding
Inflation can steadily erode the value of your income. However, long-term investing can provide returns that outpace inflation-through the power of compounding. Year after year, any money that you invest may earn interest, dividends, or capital gains. When you reinvest those earnings, they help generate additional earnings; those additional earnings help generate more earnings, and so on. This is called compounding. Let us take an example, two friends, X, and Y are 20 years old. X decides that he wants to start investing his money early to build himself a secure future and decides to save Rs. 5,000 monthly (i.e. Rs. 60,000 per annum) at the age of 20. Y feels that he is young and wants to enjoy his money for the time being. Y wakes up late and decides to invest at the age of 35 years and decides to save Rs. 10,000 per month (i.e. Rs. 1,20,000 per annum). At the age of 60 years when they want to retire, using an interest rate of 7% per annum, X who had invested Rs. 5,000 monthly for 25 years has Rs. 1.15 cr. and Y who had invested Rs. 10,000 monthly for the same amount of time has Rs. 57 lacs. Please refer to the illustrations below for a better understanding.
X (7%) :
Page 38
Y (7%) :
The key therefore lies in starting earlier, and giving your investments a longer time to row. Money starts multiplying, more towards the end as explained by above example
1
Does SIP work?
Given below are some examples of how a SIP has worked in select Mutual Funds schemes: Templeton Schemes HDFC Schemes Blue-chip Fund Prima Growth Fund Equity Top Fund Fund 200 Monthly 1000 1000 1000 1000 1000 Investment Nos of Investment 86 123 89 110 91 months Total Investment 86000 123000 89000 110000 91000 Value of Investment 337410 549558 249501 518895 267978 Return on 37.69% 27.45% 27.23% 33% 29% Investment
Page 39

COMPARISON BY NATURE OF INVESTMENTS
The table below compares the investment options with respect to Return, Safety, Volatility, Liquidity, and Convenience.
Investment Options Equity F1 Bonds Corporate Debentures Company Fixed Deposits Bank Deposits PPF Life Insurance Real estate Mutual Funds
Return High Moderate Moderate Moderate Low Moderate Low High High
Safety Low High Moderate Low High High High Moderate High
Volatility High Moderate Moderate Low Low Low Low High Moderate
Liquidity High or Low Moderate Low Low High Moderate Low Low High
Convenience Moderate High Low Moderate High High Moderate Low High
Page 40
Magnum Mid Cap Fund (SBI Mutual Fund) Open Ended Equity Fund Date of Inception: 17/03/2005 Corpus (Assets Under Management): Rs.343.64Cr Options: Growth and Dividend Top 10 holdings: Maharashtra Seamless Limited India Cements Limited Infotech Enterprises Limited Thermax Limited Skf India Limited IVRCL Infrastructure & Projects Limited Opto Circuit Limited Crompton Greaves Limited Hotel Leela Venture Limited 6.00% 5.48% 5.09% 4.89% 4.67% 4.60% 4.55% 4.27% 3.77%
Nagarjuna Construction Company Limited 4.84%
Page 41
Asset Allocation:
A sset Allocation
cash 10%
others 0%
E quity 90%
E quity
cash
others
Performance Report: Period 1 month 3 months 6 months 1yr 3yr 5yr S.Inception Return -12.84% 6.15% 27.52% 48.1% NA NA 47.89%
Page 42

NAV Analysis: Date 15/6/2006 16/6/2006 19/6/2006 20/6/2006 21/6/2006 22/6/2006 23/6/2006 26/6/2006 27/6/2006 28/6/2006 29/6/2006 30/6/2006 NAV 14.12 14.89 15.41 15.64 16.11 16.44 16.46 15.79 15.55 15.44 15.47 16.01
17 16.5 16 15.5 15 14.5 14 13.5 13 12.5 19/6 26/6 27/6 15/6 16/6 20/6 21/6 22/6 23/6 28/6 29/6 30/6
NAV
Date
Page 43
Tata Mid Cap Fund: Open Ended Equity Fund Date of Inception: 15/06/2005 Corpus (Assets Under Management): Rs.249.42Cr Options: Growth and Dividend Top 10 holdings: Dishman Pharmaceu & Chem Ltd. Greaves Limited Lakshmi Machine Works Limited Voltas Limited Indian Hotels Co. Limited Nagarjuna Construction Limited Ccl Products India Limited Tamilnadu Newspreint & Paper Ltd. EIH Limited Hinduja Tmt Limited 4.31% 4.06% 4.04% 3.87% 3.85% 3.12% 2.84% 2.81% 2.63% 2.50%
Asset Allocation:
Page 44

A s t A c tio s e llo a n
C sh a 4 %
O e th rs 0 %
Eu q ity 9% 6
Eu q ity
C sh a
O e th rs
Performance Report: Period 1yr 3yr 5yr S.Inception Return 12.8% NA NA 12.42%
NAV Analysis:
Page 45

Date 15/6/2006 16/6/2006 19/6/2006 20/6/2006 21/6/2006 22/6/2006 23/6/2006 26/6/2006 27/6/2006 28/6/2006 29/6/2006 30/6/2006 NAV 10.072 10.624 10.862 10.935 11.202 11.366 11.262 10.863 10.844 10.787 10.864 11.253
11.5 11 10.5 10 9.5 9 15/6 16/6 21/6 22/6 23/6 26/6 30/6 19/6 20/6 27/6 28/6 29/6
NAV
Date
Page 46
Sundaram Select Mid Cap Fund: Open Ended Equity Fund Date of Inception: 19/07/2002 Corpus (Assets Under Management): Rs.991.45Cr Options: Growth and Dividend Top 10 holdings: Ansal Properties & Industries Limited Unitech Limited Emami Limited Madras Cements Limited Balrampur Chini Mills Limited Jaiprakash Associates Limited Lakshmi Machine Works Limited Bajaj Hindustan Limited Kalpataru Power Transmission Ltd. Kirloskar Oil Engines Ltd. Asset Allocation: 4.67% 4.10% 3.71% 3.61% 3.08% 2.96% 2.81% 2.80% 2.58% 2.20%
Asset Allocation
Debt 0% cash 34% Others 0%
Equity 66%
Equity
cash
Debt
Others
Page 47
Performance Report: Period 1yr 3yr 5yr S.Inception Return 76.6% 75.9% NA 76.33%
NAV Analysis: Date 15/6/2006 16/6/2006 19/6/2006 20/6/2006 21/6/2006 22/6/2006 23/6/2006 26/6/2006 27/6/2006 28/6/2006 29/6/2006 30/6/2006 NAV 66.507 68.388 69.852 70.455 72.081 73.7 73.947 72.454 71.846 71.696 72.01 74.075
Page 48

76 74 72 NAV 70 68 66 64 62 19/6 21/6 28/6 15/6 16/6 20/6 22/6 23/6 26/6 27/6 29/6 30/6
Date
Kotak Mid Cap Fund: Open Ended Equity Fund Date of Inception: 28/01/2005 Corpus (Assets Under Management): Rs.344.11Cr Options: Growth and Dividend Top 10 holdings: Deccan Chronicle Holdings JSW Steel Jindal Steel & Power Tata Metaliks Madras Cements Television Eighteen Babasbapatilfreepptmba.com 4.73% 4.62% 3.94% 3.71% 3.35% 3.09% Page 49

Mahaveer Spg. Mills Areva T & D Taj GVK Hotels & Resorts Bharat Earth Movers Asset Allocation:
Asset Allocation
0% 0%
2.97% 2.89% 2.80% 2.78%
cash 8%
Equity 92%
Equity
cash
Performance Report: Period 1yr 3yr 5yr S.Inception Return 34.9% NA NA 34.48%
Date NAV NAV Analysis: 15/6/2006 13.696 16/6/2006 14.293 19/6/2006 14.681 20/6/2006 14.672 21/6/2006 15.006 22/6/2006 15.33 23/6/2006 15.346 26/6/2006 14.88 Babasbapatilfreepptmba.com 27/6/2006 14.732 28/6/2006 14.565 29/6/2006 14.617 30/6/2006 15.102
Page 50

15.5 15 14.5 NAV 14 13.5 13 12.5 16/6 23/6 30/6 15/6 19/6 20/6 21/6 22/6 26/6 27/6 28/6 29/6
Date
Comparison table of equity diversified midcap mutual funds SBI Corpus Asset Allocation Rs.343.64Cr Eq: 90% Cash:10% 1yr : 48.1% S.I: 47.89% NAV as on 15/6/06 30/6/06 Change (%) TATA Rs.249.42Cr Eq:96% Cash:4% 1yr: 12.8% S.I.:12.42% KOTAK Rs.344.11Cr Eq: 92% Cash: 8% 1yr : 34.9% S.I. :34.48% SUNDARAM Rs.991.45Cr Eq: 66% Cash: 34% 1yr: 76.6% S.I.:76.33%
Returns
14.12 16.01 15.8688
10.072 11.253 11.15228
13.696 15.102 14.96504
66.507 74.075 73.409 Page 51

Minimum Invt. Load: Entry Exit Rs.5000 2.25% Nil Rs.5000 2.25% Nil Rs.5000 2.25% Nil Rs.5000 2.25% Nil
By looking into the table we can say that Sundaram select mid cap mutual fund is performing extremely well in the market. It has large corpus. And it has wide diversification in investment. By investing nearly one third (34%) in cash market it is actively gaining the opportunity of cash market. Its diversified investment resulted in good returns to the investors and increase in the NAV. By comparing these four equity diversified mid cap funds performance we can say that the funds performance and its NAV depends on the following factors Its portfolio in which it has invested The asset allocation of the fund The sectors to which it has targeted The bench mark of stock market index which it has taken as base The common objective of all mid cap funds, with slight difference in words, is to provide investors with opportunities for long term growth in capital along with the liquidity of an open ended scheme by investing predominantly in a welldiversified basket of equity stocks of companies whose market capitalization is between Rs. 200 crores to Rs. 2000 crores and in debt and money market instruments. Out of above Sundaram Select Mid Cap is performing very well in the market since inception. It is ranked number one in returns by money control. Even we can say that Sundarm Select Mid Cap fund has started earlier than other three but it has a very selective and diversified portfolio and its corpus is also huge compare to other three. It has also sustained its growth from inception. The reason for difference in NAV of each fund is its portfolio, asset allocation, selection of sectors, and proportion of investment in the selected sector, different options, and different objective of the schemes etc.
Page 52

So while investing in any existing mutual funds scheme it is better to look at its portfolio and also the performance, but the present performance may not be assured in future.
Rate
of
Return
=Price
Change
+Dividend
Received*100 Purchase Price

The general equation used to calculate the compounded value after N years is given below:
A=P (1+I) to the power n

P = principal I = Interest rate N= number of years
Page 53
Mutual fund a safer investment Suggestions

Transparency, Flexibility and Ease of understanding, these core benefits of Mutual Funds need to be effectively communicated to the customers.
Though being riskier in nature mutual funds returns, sizable amount of returns to the investors, this will play a role of enlightening new investors in the pool.
The Mutual Fund Industry must convince the general public about the latest development (i.e. tax exemptions on dividends & returns in Mutual Funds by the finance ministry.) This would largely help to get clients.
People generally want a reasonable return on their investment. Majority of the investors try to see that their investments are secure. In case of equity mutual funds both in the growth and dividend plans have been realizing more than 15%20% returns on a year-to-year basis. This has uplifted the mutual fund Industry in the country. This will largely attract people to invest in Mutual Funds.
In the current scenario the bank are returning in the area of 4.5%to 8% returns/ annum, which are taxable. On the other hand tax-free returns of minimum two digits in equity mutual funds are need of the day, to beat inflation in our economy.
By creating active awareness regarding the progress of Mutual Fund, the Industry in India has seen tremendous growth in the last three years. This should be further proceeded more aggressively.
Page 54

Conclusions:
As per the study Mutual Fund has good future. It is gaining importance in the minds of consumers. Common people are taking more interest in Mutual Funds along with other conventional investment options. But the service providers like ViVi Securities need to more educate the customers. Midcap funds are more promising. So the companies need to promote these funds more in order to benefit the investor and gain their confidence.
Page 55

BIBLIOGRAPHY
Introduction to Mutual Fund By AMFI Brochures Journals Web Sites: www.amfiindia.com www.Ventura1.com www.moneycontrol.com
Page 56

A PROJECT REPORT On Mutual Fund A Safer Investment

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

A PROJECT REPORT On Mutual Fund A Safer Investment

Uploaded by

Copyright:

Available Formats

Mutual fund a safer investment

Mutual fund a safer investment

Mutual fund a safer investment Research Design

Topic of the study:

Need for the Study:

Objectives of the study:

To understand the concept of Mutual fund, its working

Mutual fund a safer investment

Scope of the project

Mutual fund a safer investment

Mutual fund a safer investment

Mutual fund a safer investment

Mutual fund a safer investment

Mutual fund a safer investment

Mutual fund a safer investment

CLASSIFICATION BASED ON CONSTITUTION OBJECTIVE:

Mutual fund a safer investment

Mutual fund a safer investment

Mutual fund a safer investment

Industrial Background Concept of Mutual Fund:

Mutual fund a safer investment

Mutual fund a safer investment

Mutual fund a safer investment

Mutual fund a safer investment

Expertise and innovation

Information and research

Mutual fund a safer investment

About ViVi Securities, Belgaum Branch

Mutual fund a safer investment

MUTUAL FUND STRUCTURE

Mutual fund a safer investment

Mutual fund a safer investment

Mutual fund a safer investment

Mutual fund a safer investment

Risks involved in investing in Mutual Funds:

Political/Government Policy Risk

Interest Rate Risk

Mutual fund a safer investment

The different plans that Mutual Funds offer:

Mutual fund a safer investment

ASSOCIATION OF MUTUAL FUNDS IN INDIA (AMFI) :

Mutual fund a safer investment

Mutual fund a safer investment

Mutual fund a safer investment

Mutual Fund Globally

Mutual fund a safer investment

Future of Mutual Fund

Mutual fund a safer investment

Mutual fund a safer investment

Mutual Funds with Fixed Deposit:

MUTUAL FUNDS Better Low

Mutual fund a safer investment

Mutual fund a safer investment

Net Asset Value (NAV)

Mutual fund a safer investment

Weightage 14.2% 12.7% 11.9% Page 34

Mutual fund a safer investment

Systematic Investment Plan - A plan for future

Mutual fund a safer investment

Identifying ones financial goals

Select of asset classes

Regular savings plan

Mutual fund a safer investment