Professional Documents
Culture Documents
EXECUTIVE SUMMARY
additional return in the future. The expectation brings with it a probability that
every investment involves a return and risk. The investor can choose the
collects money from many investors and puts it in stocks, bonds, short-term
money market instruments, and/or other securities. The fund manager, also
capital gains or losses and passing any proceeds to the individual investors.
Today, the worldwide value of all mutual funds totals more than $26 trillion in
assets.
(depending on the allocation rate) & units are allocated depending on the
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STATEMENT OF PROBLEM:
The premiums that are collected are invested in different funds like equity
fund, mid-cap fund, debt fund, balanced fund and cash fund. The funds must
be allocated such that their performance is stable and improves so that the
necessary that the companies fund is the best performing fund with highest
return. Among the different mutual funds this study is to find out the best fund
which will yield high returns to the investor and minimize there risk.
M.G. Road, Bangalore. Also some of the software companies were covered
including Accenture, Oracle, HP, etc. Even bank ATM’s of Axis Bank in Wilson
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DEFINITIONS:-
EQUTY DIVERSIFIED:-
• Equity Fund – This fund provides the scope of high appreciation over a long
term. The fund will primarily invest in equities & is expected to match returns
given by NSE NIFTY. This fund will invest at least 90% in equities and
capital appreciation through investment in select equity stocks that have the
potential
for high capital appreciation. This fund will invest at least 85% in equities and
large cap stocks. The fund shall primarily invest in mid cap stocks (at least
Investment portfolio shall also include large cap stocks and cash with cash not
BALANCE:-
• Balanced Fund – The balanced fund is primarily for those who prefer a mix
of steady returns & growth. The balanced fund will invest 30% to 50% in the
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• Cash Fund – The cash fund will invest conservatively in money market &
negative. 100% of this fund will be invested in money market instruments. The
price of the units in this fund is guaranteed never to go down.(i.e :- gold, govt.
securities, etc)
• Debt Fund - This fund provides the scope for steady returns at low risk
through investment in high quality fixed income securities. This fund will be
restricting, but look at the other side of the picture -- the lock-in
because you need to take a long-term view when you invest in equity. The
real potential of equities starts to show only after a few years. This allows
you to ignore the short-term slumps and stay invested for the long haul.
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• This is irrespective of how much you earn and under which tax bracket
you fall.
Type of Study:
Management.
Types of Data:
Primary Data: This data was collected from discussions and interactions with
Sampling plan:
The sampling universe consisted of various mutual funds and their returns.
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CONTENT TABLE
a feasible solution.
inferences.
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proposed
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CHAPTER 1
INTRODUCTION
An investor earns or expects to earn additional monetary value from the mode
Fund is a trust that pools the savings of a number of investors who share a
common financial goal. The money thus collected is then invested in capital
realized are shared by its unit holders in proportion to the number of units
owned by them. Thus a Mutual Fund is the most suitable investment for the
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• Professional Management
• Diversification
• Convenient Administration
• Return Potential
• Low Costs
• Liquidity
• Transparency
• Flexibility
• Choice of schemes
• Tax benefits
• Well regulated
mutual funds.
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few.
If you need the funds to generate income either because you have
retired, are saving to buy a house or are unable to work, you need
to look at funds that will not only grow over time, but will also
GROWTH FUNDS:
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large companies.
When interest rates fall, existing bonds will generally rise in value;
when interest rates rise, bonds will generally fall in value. Overall,
Fixed income funds generally have the potential for higher returns
The risk on a bond fund is that the bond issuer is not able to repay
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Balanced funds tend to be more risky than bond funds and less
risky than equity funds. The main objective is to earn a high rate of
that of funds that are managed for long-term gains, but they are a
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Money market funds are ideal for parking your cash while you
decide where to invest for the long haul, or for money you will need
Asset allocation funds differ from balanced funds because the fund
asset allocation.
INDEX FUND:
Index funds include stock or bond funds that closely match the
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Over time, index fund performance will slightly lag that of the
The risks associated with index fund investing are similar to those
EQUITY FUNDS:
growth.
The market price of a stock will vary with the company's financial
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GEOGRAPHY:
in Canadian companies.
invest in the U.S., Europe, Australia and the Far East, sometimes
Global funds: These funds invest in any country around the globe,
including Canada.
many markets and reduce the risks associated with the health of
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the world may affect the fund managers' ability to value and trade
COMPANY SIZE:
Many funds restrict the types of stocks they buy for the fund based
outstanding).
Generally speaking, small cap funds are more risky than large cap
have a major impact on its market cap. However, if you can take
the ups and downs, there can be greater rewards for investors in
INDUSTRY:
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specific fund.
INVESTMENT ALTERNATIVES:
means that you have a residual interest in income and wealth. Perhaps the
most
Growth shares
Income shares
Cyclical shares
Speculative shares
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Government securities
PSU bonds
Preference shares
of less than one year at the time of issue are called money market
Treasury bills
Commercial paper
Certificate of deposit
funds which, in turn, invest in equity shares and fixed income securities. There
Equity schemes
Debt schemes
Balanced schemes
investment. Insurance premiums represent the sacrifice and the assured sum
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INVESTMENT ATTRIBUTES
• Rate of return
• Risk
• Marketability/Liquidity
• Safety
• Tax Shelter
• Convenience
RATE OF RETURN:
Investments are made with the primary objective of deriving a return. The
RISK:
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Risk is inherent in any investment. Risk may relate to loss of capital, delay in
almost without risk, others are more risky. The risk of an investment is
SAFETY:
desires from investments. Every investor expects to get back the initial capital
and successful corporate entity assures the investors of their initial capital.
MARKETABILITY/LIQUIDITY:
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TAX SHELTER:
Some investments provide tax benefits; others do not. They are of three
kinds.
Initial tax benefit referring to tax relief enjoyed at the time of making the
investment. For Eg:, when you make a deposit in a Public Provident Fund
account, we get a tax rebate under section 88 of the Income Tax Act..
Continuing tax benefit represents the tax shield associated with the periodic
returns from the investment. For Eg:, dividend income and income from
recipient.
CONVENIENCE:
end of the spectrum is the deposit in a savings bank account that can be
made
readily and that does not require any maintenance effort. At the other end of
the spectrum is the purchase of a property that may involve a lot of procedural
and legal hassles at the time of acquisition alIot a great deal of maintenance
effort subsequently.
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decisions.
A trustee or board who safeguards the assets and ensures compliance with
The shareholders or unitholders who own (or have rights to) the assets.
The Net Asset Value or NAV is the value of a scheme's assets less the value
of its liabilities. The per unit NAV is the net asset value of the scheme divided
calculating this varies between scheme types and jurisdiction and can be
OPEN-ENDED FUND:
An open-ended fund is equitably divided into shares (or units) which vary in
price in direct proportion to the variation in value of the funds net asset value.
Each time money is invested new shares or units are created to match the
prevailing share price; each time shares are redeemed the assets sold match
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the prevailing share price. In this way there is no supply or demand created
for shares and they remain a direct reflection of the underlying assets.
CLOSED-ENDED FUND:
public offering (or IPO). The shares are then traded on an exchange or
market forces. If demand for the shares are high they may trade at a premium
to net asset value. If demand is low they may trade at a discount to net asset
value. Further share (or unit) offerings may be made by the scheme if demand
is high although this may affect the share price.The added element of market
in a single equity may do well, but it may collapse for investment or other
reasons. If your money is invested in such a failed holding you could lose your
capital. By investing in a range of equities (or other securities) the capital risk
is reduced.
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The more diversified your capital, the lower the capital risk this investment
securities are all in a similar type of asset class or market sector then there
is a systematic risk that all the shares could be affected by adverse market
into different non-correlated asset classes. If any one of the three is failing,
If one investor were to buy a large number of direct investments, the amount
they would be able to invest in each holding is likely to be small. Dealing costs
are normally based on the number and size of each transaction, therefore the
overall dealing costs would take a large chunk out of the capital (affecting
future profits). Pooling your money with that of other investors means you
COSTS:
investors requires remuneration. This is often taken directly from the fund
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based) fee. If the investor managed their own investments, this cost would be
avoided.
Often the cost of advice given by a stock broker or financial adviser is built
into the scheme. Often referred to as commission or load (in the U.S.) this
the fund value each year. While this cost will diminish your returns it could be
argued that it reflects a separate payment for an advice service rather than a
possible to purchase units or shares direct from the providers without bearing
this cost.
LACK OF CHOICE:
Although the investor can choose the type of fund to invest in, they have no
control over the choice of individual holdings that make up the fund.
perks (for example, discounts on the company's products) and the right to
attend the company's annual general meeting and vote on important matters.
Each fund has a defined investment goal to describe the remit of the
investment manager and to help investors decide if the fund is right for them.
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The investment aims will typically fall into the broad categories of Income
(value)
select stocks with strong income streams, often more established businesses.
generate growth. Each strategy has its critics and proponents; some prefer a
TYPES OF RISK:
Depending on the nature of the investment, the type of 'investment' risk will
vary. A common concern with any investment is that you may lose the money
you invest - your capital. This risk is therefore often referred to as capital risk.
If the assets you invest in are held in another currency there is a risk that
open market (e.g. commercial property) or the market has a small capacity
may take time to sell. Assets that are easily sold are termed liquid therefore
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RETURN)
FIXED 8-9.5 6 8.5 THE
DEPOSIT ACCOMMODATE
BY PRESENT
VALUE FACTOR
GOVT. BOND 7-8 6 8.5 -0.5 (NEGATIVE
RETURN)
REAL 30+ 6 8.5 HIGH AMOUNT
ESTATE OF MONEY
REQURIED FOR
PURCHASE OF
REAL ESTATE
KISSAN 7-8 6 8.5 -1(NEGATIVE
VIKAS RETURN)
PATRA
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OFFICE
DEPOSIT
MUTUAL 20-30 6 8.5
CHAPTER 2
RESEARCH DESIGN
Type of Study:
Management.
Types of Data:
Primary Data: This data was collected from discussions and interactions with
Sampling Plan:
The sampling universe consisted of various mutual funds and their returns .
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The results of this analysis have been fed into marketing and organizational
Through our SWOT analysis, our clients have been able to take advantage of
niche markets and focus on product innovation which allows them to capture
greater margins.
Our SWOT analysis identifies strengths and weaknesses and relates them
with forward looking opportunities and threats. This helps to identify company
Strengths - to build on
Weaknesses - to cover
Opportunities - to capture
SWOT Analysis
Strengths:
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Weakness:
Opportunities:
Service offerings
* Leveraging the latest technology for providing quality and client centric
Services.
Threats;
* Execution risk.
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CHAPTER 3
MANAGEMENT COMPANY
On Job Training:
Empanelment:
For empanelment we have to call up the IFA in the Bangalore from the data
base given by the company, have to fix the appointment then have to go for
empanelling them.
Had meetings with clients to check for their requirements which is based on
satisfying their queries about the companies profile, schemes and it’s
build a strong relation between the company and the IFA, keep motivating
them for giving the business to the company, assisting them to remain
updated about the market activities, as they don’t have any sources of getting
PERFORMANCE APPARAISAL:
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1. DEVELOPMENT:
2. MOTIVATION:
3. COMMUNICATION:
subordinate about job related matters and thus they get to know each
other better.
4. LEGAL COMPLIANCE:
and discharges.
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2. By employee peers.
3. By employees subordinate.
5. Self evaluation.
1. Client interaction
2. Candidate interaction
3. Documentation
4. Job posting
5. Average CV received
6. Head hunting
7. Speed of Response
8. Client response
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10. Attitude
11. Leadership
12. Attendance/Punctuality
13. Integrity
14. Loyalty
sum is taken out. The employee would scored high is awarded best employee
of the month (per semester) and the employee scoring low is given training for
COMPENSATION:
Objective of compensation:
rewards that is equitable to the employee and employer alike. The desired
1. Adequate
2. Equitable
3. Balanced
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4. Cost-effective
5. Secure
6. Incentive – providing
CHAPTER 4
company discovers different needs and groups in the market place, targets
those needs and group that it can satisfy in a superior way, and than positions
its offering in a way so that target market recognizes the company’s distinctive
offering and image. Positioning is the act of designing the company’s offering
and image to occupy a distinctive place in the mind of target market. The end
proposition, a cogent reason why the target market will buy the product.
demand however within the total market there is always some diversity among
buyers, not all consumers who drink hot drink wants tea. Similarly not all
consumers who wear pants wants to wear jeans. So within the same general
market there are group of customer with different needs and buying
preference. Hence a market should never commit the mistake to taking up the
whole market uniformly at a time. The best way is to segment or break the
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market into groups of buyers with similar needs and preference and than
POSITIONING-----
Here in the case of Mahindra finance they did the very good segmentation,
targeting, positioning in the market. They have positioned itself very well in the
record. Now Mahindra finance a brand in the market and its on the consumers
TARGETING-----
Mahindra finance has basically targeting the all type of customer in every
level. They have the vide variety of product range that suit for every customer.
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TABLE OF S.T.P.
WHEELER- LOAN
NEWLY MARRIED YOUTH CREDIT CARD,
PLAN
FULLNEST ONE YOUTH ULIP- PLAN, HOME-
LOAN, INSURANCE,
CAR LOAN
FULLNEST TWO MIDDLE AGE EDUCATION LOAN,
SAFE INVESTMENT,
HEALTH INSURANCE,
RETIREMENT PLAN
EMPTYNESS ONE MIDDLE AGE EASY GROWTH FUND
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Primary Objective:
MFs: Investments
Investment Duration:
MFs: Works out for Medium term, Long Term Investors. Risky for Short Term
investors.
Flexibility:
MFs: Very flexible. Plenty of scope to correct your mistakes if you made any
wrong investment decisions. You can easily shuffle your portfolio in MFs.
ULIPs: Flexibility is limited to moving across the different funds offered with
your policy. Correcting mistakes can turn out to be expensive. Moving funds
from one ULIP to an other ULIP of a different fund house can be expensive.
Liquidity:
MFs: Very liquid. You can sell your MF units any time(except ELSS). Some
ULIPs: Limited liquidity. Need to stay invested for the minimum number of
Investment Objective:
MFs: MF's can be used as your vechile for investments to achive different
objectives.(Eg: Buying a car three years from now. Downpayment for a home
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five years from now. Childrens education 10 years from now. Childrens
marriage 15 years from now. Retirement planning 25 years from now. Medical
ULIPs: ULIPs can be used for achieving only long term objectives (Childrens
Tax Implications:
MFs: All investments in MF's don't qualify for section 80C. Only investments in
MFs: Returns on equity MF's are exempt from long term capital gains tax.
ULIPs: We are moving from EEE to EET. No clarity if ULIPs will be taxed
under EET.
MFs: Tax liabilities when moving across from debt to equity funds.(Returns
ULIPs: Very flexible in moving between equity and debt funds(not tax
MFs: None so ever. At most you pay a small exit load if any.
ULIPs: Some strings attached for your policy to be in effect. Minimum number
maintained. (I personally don’t like policies which say pay three years
premium and get insurance cover for the next 25 years since there are a lot of
ifs and butts involved. A lot of assumptions made and nothing is in your hand,
it could turn out your fund balance might be exhausted after just 12 years of
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insurance cover).
ADVANTAGES ULIPS:
• Can easily rebalance your risk between equity and debt without any tax
implications.
• Best suited for medium risk taking individuals who wish to invest in
additional tax burden for those investing mainly in debt unlike in MFs.
ADVANTAGE MFS:
• Very flexible and enables you to switch your investments from non
• Best suited for medium to high risk taking individuals who wish to
equities).
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CHAPTER 5
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