1.

Executive Summary

EXECUTIVE SUMMARY

This report provides information on the investment pattern of people of Raipur and evaluation of their
preferences with respect to share market, mutual fund, life insurance & gold. The study has been undertaken to
analyze the investment pattern of Raipur city of Chhattisgarh state. The main reasons behind the study are the
demographic factors like age, gender, occupation and the risk covering nature of the investors. Methods of
analysis include chi square test, charts & graphs.
This study has been undertaken in Reliance Securities Ltd. in the year 2013. The company provides customers
with access to Equity, Derivatives, and Mutual Funds. It also offers secured online share trading platform and
investment activities in secure, cost effective and convenient manner. To enable wider participation, it also
provides the convenience of trading offline through variety of means, including Call & Trade, Branch dealing
Desk and its network of affiliates.
This project contains the investors preferences and as well as the different factors that affect investors decision
on the different investment avenues. The findings relates to the outperforming products and investors risk taking
ability while investing in each different products. Through the research I have found out that people of Raipur
have life insurance as their most preferred financial instrument followed by mutual fund, equity derivatives &
gold.
The report is divided into five sections first section deals with the details of the company. The second section
provides information about the current market scenario. The third section gives details about the various
financial instruments we have considered in our project. The fourth section contains details about the market
research of consumers & dealers while the last section deals with the analysis & recommendations.

2. About the Company

RELIANCE SECURITIES LTD.

Pedigree
Reliance Securities comes from the house of Reliance Capital, one of Indias leading & prominent financial
houses.
Reliance Capital has a net worth of Rs. 12,138 crore (US$ 2.0 billion) and total assets of Rs. 42,155 crore (US$
7.1 billion) as on June 30, 2013.
Reliance Securities
Reliance Securities Limited is a Reliance Capital company and part of the Reliance Group.
Reliance Securities endeavours to change the way investors transact in equities markets and avails services. It
provides customers with access to Equity, Derivatives, Mutual Funds & IPOs. It also offers secured online share
trading platform and investment activities in secure, cost effective and convenient manner. To enable wider
participation, it also provides the convenience of trading offline through variety of means, including Call &
Trade, Branch dealing Desk and its network of affiliates.
Reliance Securities has a pan India presence at more than 1,700 locations.
Reliance Capital is one of India's leading and fastest growing private sector financial services companies, and
ranks among the top 3 private sector financial services and banking groups, in terms of net worth.
Awards & Achievements

'Most Admired Service Provider in Financial Sector' by IPE BFSI, 2012

'Indian E-Retail Awards for Best Customer Experience Award' by Franchise India, 2012

'My FM Stars of the Industry 2012'for excellence in Online Demat (Broking category)

Reliance Securities Limited is now ISO 9001:2008 certified for Online Trading Platform

'Brand Leadership Legacy Award' at the Asian Leadership Awards - Dubai, 2011

'My FM Stars of the Industry 2011' for excellence in Online Demat / Broking

'Largest E-Broking House 2010' by Dun & Bradstreet

'Largest E-Broking House & Best Equity Broking House for the year 2009' by Dun & Bradstreet

'Best in category Service Franchise' at the 6th International Franchise & Retail show 2008

'Best E-Brokerage House 2008' (runner's up) by Outlook Money NDTV Profit Awards

'Debutant Franchisor of the Year' at the 5th International Franchisee & Retail Show 2007

Reliance Securities has been rated no. 1 by Starcom Worldwide for online security and cost
effectiveness in 2007

PRODUCTS & SERVICES

1.) Equity
The Equities markets offers range of investment opportunities and we at Reliance Securities bring along with us
the added advantage of our innovative products to suite investor investment profile and help investor make the
right decision.

About Research

Reliance Securities Research Desk provides independent Equity Research to Retail Clients. It has a strong and
highly experienced team of Analysts enjoying a rich blend of youth and experience. In terms of sector coverage
it cover sectors like Automotives, Auto Components, Capital Goods, Engineering, Cement, Infrastructure,
Banking, Software, Pharma, Telecom, FMCG, Media and Oil. The Fundamental Research is broadly idea based
and gives a mix of large-cap and mid-cap ideas

R-Model Portfolio

R-Model Portfolio is a tool as well as a service which combines the power of Securities Trading and Portfolio
Allocation to invest in a portfolio of stocks created by the Reliance Securities Research Team. R-Model
Portfolio service is only provided to RSL Customers

Pre Market Calls

These are pre-market trade ideas, based on technical analysis. Stocks here are analyzed based on popular
technical patterns, indicators, oscillators, etc. Further, stocks are selected specifically from F&O basket so as to
provide maximum liquidity

Intraday Calls during Live Market

Live-market calls are provided based on directional momentum during live market hours that helps users to
make quick profits. Here, the position is not carried to the next trading session

Positional Calls

Pre-market & live-market positional ideas are provided for traders and/or short-term investors when any
meaningful breakout/breakdown is observed on long term charts of stocks. Stocks are usually advised with a
time horizon of 3-15 days

 IPOs Initial Public Offerings

With RSL Online Trading account investing in IPOs is just a click away without any paper work. It also gives
investor the option of investing through various banks.
Their unique single cash feature allows client to invest in IPOs from the same ledger account and Allotment of
Share happens in the same demat account. A special research reports, specifically analyzing company prospectus
before an IPO is shared with all our Clients that helps them to invest accordingly

2.) NRI Offerings

Reliance Securities with its extensive market reach, experience and cutting edge technology platforms, provides
the perfect vehicle for clients to invest and benefit from the Indian markets.
Reliance Securities is glad to introduce the most competitive products for the Non Resident Indian (NRI)
audience, supported by a dedicated NRI investment team to cater to their investment needs.
Currently we offer services to NRIs based in UAE, Kuwait, Bahrain, Singapore & Malaysia.
3.) Derivatives:
If investor trade on leverage - Derivatives are meant for investor. Transact in Futures and
Options on NSE

Future and Option Calls

F&O ideas are given when we observe some development materializing in the current or next month
futures of an index or a stock.
Clients use their unique products to take advantage of intraday and long term position benefits. Advisory
team can help client make informed investment decisions.
Their high leveraged products are most suited for derivatives trading

4.) Mutual Funds

Mutual Funds not only provide wider diversification, thus enhancing customer power to be with market
movements. Plus these are professionally managed to provide optimum value to one investment.

5.) Currency
Currency Derivatives Trading is emerging as an avenue for individuals and corporate in India to diversify their
portfolio and manage their foreign exchange risk. Exchange Traded Currency Derivatives have registered a
phenomenal growth since its inception in 2008 marking a daily turnover of almost Rs.50, 000 Cr. Reliance
Securities Ltd offers Currency Derivative Trading Services to all its clients on all major & recognized stock
exchanges.
Reliance Securities Value Proposition:

Online trading

Assisted trading

Research support

Dedicated customer service desk

Dedicated Relationship Management

3. Market Scenario

3.1 GLOBAL SCENARIO

Current Global Scenario of Equity/Derivative Market

U.S. stocks are the world's priciest after this year's big rally. Many strategists predict a significant pullback.
Not yet, at least for lots of global large-cap fund managers who have stayed invested more heavily in the
U.S. market than any other, according to recent Lipper data. Even after the big gains racked up in the first
quarter of the year, a Bloomberg poll showed that global investors gave U.S. equities their highest rating in
three-and-a-half years and expects them to be among the biggest gainers in the year ahead.
That marks a big difference from the recent past. Brazil, China and India were topping global investors'
"favorites" lists in 2010 and 2011. This year, the so-called BRICs (those three nations plus Russia) are all
struggling. The Standard & Poor's 500 index is up 20 percent, adding to last year's 13 percent gain.
Even with a pumped-up U.S. market valuation at 15.5 times projected earnings for 2013; global fund
managers are sticking strongly with American stocks and adding to their holdings during market pullbacks.
After the United States, next-biggest investing destination is tiny Switzerland, which accounts for 12
percent of the portfolio's assets. The rest of the fund is largely invested in Western Europe and Canada.

Current Global Scenario of Mutual Fund Industry

Mutual funds, in their process of recovery from their lows during the recession period, are being offered to
investors at lower costs and higher returns. As per studies conducted by ICI (Investment Company
Institute), expense ratios for mutual funds, on an average, decreased over 2012 with target date funds being
the greatest beneficiaries.

Exchange traded funds (ETF), being index driven, have lower costs as compared to mutual funds. Mutual
fund operators, in order to stay competitive against ETFs, have deliberately cut costs and remain in the
investment market.
When changes in investment pattern are compared over a short period, noticeable changes are not observed.
If, however, the span of study gets extended over several years, significant changes can be noticed. For
instance, between 1993 and 2012, equity funds expenses fell by 30 percent to 77 points while bond fund
expense ratio fell to 61 points a drop of nearly 27 percent.

Current Global Scenario of Life-Insurance Industry

The global insurance industry is one of the largest sectors of finance. It ranges from consumer to
corporate and industrial insurance, and even reinsurance.
The major insurance markets of the world are obviously the US, Europe, Japan, and South Korea. Emerging
markets are found throughout Asia, specifically in India and China, and are also in Latin America.
With the internet and other forms of high-speed communication, companies and individuals are now able to
purchase insurance and related financial products from almost anywhere in the world. Increasing affluence,
especially in developing countries, and a rising understanding of the need to protect wealth and human
capital has led to significant growth in the insurance industry.
Over the past ten years, global insurance premiums have risen by more than 50%, with annual growth rates
ranging between 2 and 10%. In 2004, global insurance premiums amounted to $3.3 trillion. The global
insurance market grew by 7.6% in 2007 to reach a value of $3,688.9 billion. Top ten global insurance
companies are American Intl Group(USA), AXA group (France), Allianz worldwide(Germany), Manulife
financial (Japan),General group (Italy), prudential financial (united states), met life (United States),
Aviva(United Kingdom) and Aegon(Netherland).
The life insurance segment is characterized by underwriting losses in some developed nations, and
underwriting profits in important emerging economies such as China, India, Brazil and Russia. The life
insurance segments in developed nations will record a rise in premium rates due to gradual recovery in their
economies, meaning that life insurers will need to protect their margins. In the case of emerging economies,
the life segment is moving towards a situation that is neither hard nor soft, due to factors such as the highly
under-penetrated markets in these countries, increased competition among life insurers and rising
disposable incomes.
The citizens of the developed nations, because of the reduction in their disposable incomes, have
increasingly been selecting insurance products that provide basic life cover over hybrid or exotic products.

Current Global Scenario of Gold Industry

The exodus out of gold this year, triggered by heavy exchange traded fund (ETF) selling, may nearing its
end, according to an executive at the World Gold Council (WGC), who expects prices to pick up towards
the end of 2013. Investors in gold ETFs have sold around 650 metric tons of bullion gold so far this year,
driven by improving prospects for U.S. economy and expectations for a tighter monetary policy in the
country.
Demand

Demand for gold is widely dispersed around the world. East Asia, the Indian sub-continent and the
Middle East accounted for approximately 66% of consumer demand in 2012. India, Greater China
(China, Hong Kong and Taiwan), US and Turkey represented well over half of consumer demand. A
different set of socio-economic and cultural incentives drives each market, creating a diverse range of
factors influencing demand. Rapid demographic and other socio-economic changes in many of the key
consuming nations are also likely to produce new patterns of demand in the foreseeable future.
Investment demand
Since 2003, investment has represented the strongest source of growth in demand. The last five years to
the end of 2012 saw an increase in value terms of around 435%. In 2012 alone, investment attracted net
inflows of approximately US$82.3bn. Numerous factors motivate both institutional and private
investors to seek gold investments. Of the key drivers behind investor demand, one common thread
emerges: all are rooted in gold's abilities to insure against instability and protect against risk. Gold
investment can take many forms and investors often choose to invest through a number of different
channels for greater flexibility. The growth in investment demand has sparked numerous innovations in
gold investment, ranging from online bullion sales to gold ETFs.
Central banks
Central banks and multinational organisations (such as the International Monetary Fund) currently hold
just under one-fifth of global above-ground stocks of gold as reserve assets (amounting to around
30,100 tonnes by the end of 2012, dispersed across circa 110 organisations). On average, governments
hold around 15% of their official reserves as gold, although the proportion varies country-by-country.
The advanced economies of Western Europe and North America typically hold over 40% of their total
external reserves in gold, largely as a legacy of the gold standard. Developing countries, by contrast,
have no such historical legacy and therefore tend to have much smaller gold reserves, typically holding
around 5% or less of their total external reserves in gold.
Supply
Mine production Gold is produced from mines on every continent except Antarctica, where mining is
prohibited. There are several hundred gold mines operating worldwide ranging in scale from minor to
enormous. This figure does not include mining at the very small-scale, artisanal and often unofficial
level.
Today, the overall level of global mine production is relatively stable. Supply from mine production has
averaged approximately 2,690 tonnes per year over the last five years. The stability of production
comes from the fact that when new mines are developed, theyre mostly serving to replace current
production, rather than expanding global production levels.
Demand and Supply
World investment amounted to 1614 MT in 2012, broadly flat year-on-year, but the approximate value
of this demand reached a new record of almost $87 billion.
Major drivers of this strong investment included further monetary loosening in the developed world,
continued sovereign debt crisis, rising longer-term inflation fears and in key markets, negative real
interest rates coupled with limited attractive risk-free investment alternatives to gold.
In 2012, the gold mine production increased by 12 MT to 2848 MT and the combined demand for bars
& coins dropped from 1515 MT to 1256 MT.

10

Global Scenario

London is the worlds biggest clearing house.

Mumbai is under India's liberalised gold regime.
New York is the home of gold futures trading.
Zurich is a physical turntable.
Istanbul, Dubai, Singapore, and Hong Kong are doorways to important consuming
regions.
Tokyo, where TOCOM sets the mood of Japan.

3.2 INDIAN SCENARIO

Current Scenario of Indian Equity Market

Tumbling Down & Still to Hit the Bottom
On Friday, August 16, 2013 the equity index fell by four per cent, the third largest one-day fall in the
last four years. Moreover, it is already seven per cent lower from the start of the year. Does this fall
present a good opportunity for investment, or is better to wait on the sidelines for the right
opportunity to get into the market. Many of the fundamental and technical indicators are indicating
that some pain is still left and that it will be wise to wait before these pointers turn in favour of
investment. FIIs ownership of the Indian markets continues to be at an eight-year high, which adds
another risk of FII funds outflow. On the fundamental side too, there does not seem to be the
possibility of respite any time soon. According to a survey by Bank of America Merrill Lynch,
investor sentiment has turned negative on India, and the Indian markets are now less coveted than
what they were three months ago. One of the reasons for such bearishness is the rupees plunge. Only
once this fall is arrested by the right policy initiatives can we see the markets recovering.

Current Scenario of Indian Mutual Fund Industry

Indian mutual funds industry is witnessing a rapid growth on the back of infrastructural
development, increase in personal financial assets, and rise in foreign participation. With the growing
risk appetite, rising income, and increasing awareness, mutual funds in India are becoming a
preferred investment option compared to other investment vehicles. The industry is expected to
secure growth by catering to the needs of retail customers. The industry has been largely product-led
and not customer focused as the players are not concentrating on new product development as per the
needs of the consumers. The industry seeks to target an increased share of the customer pocket
through the expansion of innovative products combined with deeper retail penetration by expanding
its presence in urban and rural locations.
From a single-player monopoly in 1964, the Indian mutual fund industry has evolved into a highgrowth and competitive market on the back of favourable economic and demographic factors. As of
August 2012, 44 asset management companies (AMCs) were operating in India with assets under
management (AUM) of INR 6.4 trillion. However, after several years of persistent growth, the
industry witnessed consistent declines of 6.3 percent and 5.1 percent in its AUM during FY11 and
FY12, respectively1. One of the reasons could be the changes in regulatory guidelines-example ban
on entry load, stringent KYC norms, guidelines on transaction charges, tightening valuation and
advertisement norms - which were introduced in a short span of time thus giving less time to the
industry to adjust in the new environment.

11

To further strengthen the regulatory framework and to make it increasingly transparent, SEBI has
asked AMCs to upload monthly portfolio disclosures and half-yearly financial results on their
websites. It has also mandated AMCs to report additional annual disclosures such as gross inflow, net
inflow, average AUM, and distributor-wise gross inflow on their websites. The regulator has also
asked its panel to study regulatory provisions in some of the international jurisdictions (such as the
US and the UK) to propose ways to increase inflow to mutual funds. The report is expected to be
released in the next three to four months

Fig: 1
Currently, equity mutual funds can charge a maximum of 2.5 percent as TER, of which 1.25 percent
may be allocated as fund management fees/charges and other expenses (such as marketing,
distribution and operations) each. Any expense above 2.5 percent has to be borne by the AMC.
Initially, SEBI proposed the removal of sub-limits on expenses, giving AMCs the freedom to allocate
the 2.5 percent TER the way they wanted to. This could have helped AMCs to incentivize
distributors more effectively and attract them to sell mutual funds more actively, which was
hampered after the ban on entry loads.

Current Scenario of Life Insurance Industry of India

Indian Insurance sector was thrown open to competition in 2000 and has evolved since then; thanks
to robust regulatory framework, positive business environment and economic growth.
The industry is at an inflection point today and all factors are well in place for it to develop into one
of the fastest growing financial services markets in the world. Rising income levels and higher
awareness are boosting demand and increasingly sophisticated consumers with varied needs are
compelling players to come-up with customized products.
Government-owned Life Insurance Corporation (LIC) of India is the countrys largest insurer,
controlling approximately 65 per cent of the market. Life insurance penetration in India is about 4.4
per cent of the countrys gross domestic product (GDP) in terms of total premiums underwritten
annually, according to the Insurance Regulatory and Development Authority (IRDA). The
penetration is quite less in India as against its peers and hence, the Indian insurance market provides
ample opportunities to domestic and international players to harness the profitable avenues in the
same.

12

India tops all the countries in terms of life insurance density, according to the World Economic
Forums Financial Development Report 2012. It is followed by China, Japan, US & UK. Life
insurance industry, comprising over 20 companies, including public sector LIC, collected total
premium of Rs 84,501.75 crore (US$ 15.38 billion) during the April-February period of 2012-13
fiscal. Private insurers together raked-in Rs 23,796.29 crore (US$ 4.33 billion) in these 11 months.
The Indian insurance sector is home to many other foreign players like Allianz, Prudential, Standard
Life, Aviva, Aegon and Nippon Life, which are present in the market through joint ventures (JVs)
with their respective Indian partners.

Fig: 2

Current Scenario of Gold Industry of India

India imports most of its gold requirement. Gold as a commodity on its own does not add much to
the productive capacity of the economy. Moreover, the foreign exchange reserve that is used to
import gold reduces the availability of this resource to finance the import of other commodities. Such
high value of gold imports has now started hurting Indias current account position.
Annual Rate of Gold Imports growth in the last three years was very high. In 2008-09 the growth
was 23.0 percent, in 2009-10 it was 38.1 per cent and in 2010-11 the recorded growth stood at 18.3
per cent. Thus the average rate of growth during this period was 26.8 percent.
As we know that Indias domestic production of gold is very limited, the rising demand has to be
sourced from outside the country. Moreover, Gold as a commodity on its own does not add much to
the productive capacity of the economy. When one buys gold, it either is stored in lockers or gets
converted into jewellery. In both the cases, money spent on purchasing gold gets blocked since gold
is not a productive asset.

13

Gold Imports US Dollars (US $

million)
Year
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11

Gold Import

Total Import

Percentage
Share

4170.4
3844.9
6516.9
10537.7
10830.5
14461.9
16723.6
20725.6
28640.1
33875.8

51413.3
61412.1
78149.1
111517.4
149166
185735.2
251439.2
298833.9
288372.9
352574.9

8.1
6.3
8.3
9.4
7.3
7.8
6.7
6.9
9.9
9.6

A look at the top ten import commodities for India over a period of ten years suggests that:
The percentage share of gold and silver combined has risen from the 3rd most imported commodity in
2000-01 to the 2nd most imported commodity in 2010-11 behind only crude oil.
As per a consumer demand report by the World Gold Council the consumer demand figures in selected
countries suggests:
India accounts for nearly one-third of the total world demand for gold.
Recently with the government increasing the import and excise duties on gold and silver means that
both these commodities are set to cost more. The new duty structure would be based on value, not a
fixed rate. The new rates two per cent on 10 gm gold and six per cent on one kg silver, it means that
importers will have to pay double the duty.
This move made by the government is also targeted to address the issue of reducing dollar outflows due
to gold imports, which are hurting the current account. However, looking at the pattern of gold
consumption in India and the numerous factors that motivate people and institutions as indicated in the
study earlier to seek gold investments it seems that just raising the import duties alone will not have the
desired result of bringing down gold demand.

14

3.3 GOVERNMENT REGULATIONS INDIA

REGULATORS OF SECURITIES MARKET : The responsibility for regulating the securities market is
shared by Department of Economic Affairs (DEA), Department of Company Affairs (DCA), Reserve Bank of
India (RBI) and Securities and Exchange Board of India (SEBI).
Securities and Exchange Board of India (SEBI): SEBI or Securities and Exchange Board of India is entitled
to protect the investors' interests, regulate and develop securities market in India. The Securities and Exchange
Board of India (SEBI) is the regulatory authority in India established under Section 3 of SEBI Act, 1992. SEBI
Act, 1992 provides for establishment of Securities and Exchange Board of India (SEBI) with statutory powers
for (a) protecting the interests of investors insecurities (b) promoting the development of the securities market
and (c) regulating the securities market. Its regulatory jurisdiction extends over corporates in the issuance of
capital and transfer of securities, in addition to all intermediaries and persons associated with securities market.
It passes laws for streamlining the Indian share market for efficient outcomes.
Role of SEBI: SEBI has been obligated to perform the aforesaid functions by such measures as it thinks fit. In
particular, it has powers for:

Regulating the business in stock exchanges and any other securities markets
Registering and regulating the working of stock brokers, subbrokers etc.
Promoting and regulating self-regulatory organizations
Prohibiting fraudulent and unfair trade practices
Calling for information from, undertaking inspection, conducting inquiries and audits of the stock
exchanges, intermediaries, self regulatory organizations, mutual funds and other persons associated
with the securities market.

REGULATION FOR DERIVATIVE TRADING:

Regulatory Framework:
The trading of derivatives is governed by the provisions contained in the SC (R) A, the SEBI Act and the
regulations framed there under the rules and bye-laws of stock exchanges.
Regulation for Derivative Trading:
SEBI set up a 24 member committed under Chairmanship of Dr.L.C.Gupta develop the appropriate regulatory
framework for derivative trading in India. The committee submitted its report in March 1998. On May 11,
1998 SEBI accepted the recommendations of the committee and approved the phased introduction of
Derivatives trading in India beginning with Stock Index Futures. SEBI also approved Suggestive bye-laws
recommended by the committee for regulation and control of trading and settlement of Derivatives contracts.
The provisions in the SC (R) A govern the trading in the securities. The amendment of the SC (R) A to include
DERIVATIVES within the ambit of Securities in the SC (R ) A made trading in Derivatives possible within
the framework of the Act.

1.

Eligibility criteria as prescribed in the L.C. Gupta committee report may apply to SEBI for grant of
recognition under Section 4 of the SC (R) A, 1956 to start Derivatives Trading. The derivatives
exchange/segment should have a separate governing council and representation of trading / clearing
members shall be limited to maximum of 40% of the total members of the governing council. The

15

2.
3.

4.

5.
6.
7.

exchange shall regulate the sales practices of its members and will obtain approval of SEBI before start
of Trading in any derivative contract.
The exchange shall have minimum 50 members.
The members of an existing segment of the exchange will not automatically become the members of
the derivative segment. The members of the derivative segment need to fulfil the eligibility conditions
as lay down by the L.C.Gupta Committee.
The clearing and settlement of derivates trades shall be through a SEBI approved Clearing Corporation
Clearing house. Clearing Corporation / Clearing House complying with the eligibility conditions as lay
down by the committee have to apply to SEBI for grant of approval.
Derivatives broker/dealers and Clearing members are required to seek registration from SEBI.
The Minimum contract value shall not be less than Rs.2 Lakh. Exchanges should also submit details of
the futures contract they purpose to introduce.
The trading members are required to have qualified approved user and sales person who have passed a
certification programmed approved by SEBI.

REGULATORY BODY FOR MUTUAL FUND:

Securities Exchange Board of India (SEBI) is the regulatory body for all the mutual funds. All the mutual
funds must get registered with SEBl. The only exception is the UTI, since it is a corporation formed under
a separate Act of Parliament.
Broad Guidelines Issued by SEBI for a MF: Mutual Funds should be formed as a Trust under Indian Trust Act and should be operated by Asset
Management Companies (AMCs).
Mutual Funds need to set up a Board of Trustees and Trustee Companies. They should also have
their Board of Directors.
The net worth of the AMCs should be at least Rs.5 crore.
AMCs and Trustees of a Mutual Fund should be two separate and distinct legal entities.
The AMC or any of its companies cannot act as managers for any other fund
AMCs have to get the approval of SEBI for its Articles and Memorandum of Association
All Mutual Funds schemes should be registered with SEBI.
Mutual Funds should distribute minimum of 90% of profits among the investors.
There are other guidelines also that govern investment strategy, disclosure norms and advertising code for
mutual funds.
REGULALATIONS FOR LIFE INSURANCE:
Insurance laws and regulations in India takes care of all matters related to various insurance companies in
the country. Much of the development and growth of the insurance sector in India is due to the
government's decision to nationalize the insurance business and to allow private and foreign insurance
companies to establish their businesses here. In India, there is one regulatory authority i.e. IRDA which
oversees different functioning of the life insurance companies in India and provide them with guidelines.

Insurance Regulatory and Development Authority (IRDA)

Insurance Regulatory and Development Authority (IRDA) is the controlling body, overseeing important aspects
and functioning of various insurance companies in India. Established by the government, it safeguards the
interest of the insurance policy holders of the country.

Some of IRDA's functions include:

16

To regulate, ensure and promote the orderly growth of the insurance business.
To prescribe regulations on the investment of funds by insurance companies.
To regulate the maintenance of the margin of solvency.
To adjudicate the disputes between insurers and intermediaries.
To supervise the functioning of the Tariff Advisory Committee
Other supporting organisations which facilitate in the working of the industry are:
1. Tariff Advisory Committee
The main task of Tariff Advisory Committee is to regulate and control the rates, benefits, terms and
conditions offered by life insurance companies in India.
2. Insurance Association of India
All insurance companies in India are members of the Insurance Association of India. It has two
councils under its patronage, mainly
a. Life Insurance Council
b. General Insurance Council
3.Ombudsmen
Ombudsmen play important role in regulating and ensuring smooth functions of the insurance
companies. They are appointed to address all complaints relating to settlements of claims. Anyone
having a grievance against an insurance company can approach Ombudsmen for redressal.

17

4. Introduction to Financial
Instruments

4.1 SHARE MARKET

4.1A EQUITY MARKET
Equity Markets: Are markets in which shares are issued and traded either through exchanges or over-thecounter markets. Also known as the equity market, it is one of the most vital areas of a market economy as it
provides companies with access to capital and investors with a slice of ownership in the company and the
potential of gains based on the company's future performance.
The Investment Pyramid:

18

NDGoEqBIlFMugsaAncieSxhvbpCrtdm,P
Fig: 3

The pyramid outlines the Risk to Reward ratio of all investment options available to us. It is interesting to note
here that returns on investments are inversely proportional to underlying risk. Thus it can be inferred from the
above pyramid that:
Investment options
Equities
Mutual Funds
Gold
NSC, PPF, Debt Instruments, Bonds, Postal Schemes
Fixed Deposits, Savings Account

Features
Wealth Creation
Growth
Security
Income
Foundation

Stock: Plain and simple, stock is a share in the ownership of a company. Stock represents a claim on the
Companys assets and earnings. As one acquire more stock, his/her ownership stake in the company becomes
greater.

The securities market has two interdependent segments: the primary (new issues) market and the secondary
market. Primary market is where new issues are first offered, with any subsequent trading going on in the
secondary market. The primary market provides the channel for sale of new securities. Secondary market refers
to a market where securities are traded after being initially offered to the public in the primary market and/or
listed on the Stock Exchange. Majority of the trading is done in the secondary market. Secondary market
comprises of equity markets and the debt markets.

19

Origin & Exchanges: Share market in Indian started functioning in 1875. The name of the first share trading
association in India was Native Share and Stock Broker's Association, which later came to be known as Bombay
Stock Exchange (BSE). This association kicked off with 318 members. Indian Share Market mainly consists of
two stock exchanges namely Bombay Stock Exchange (BSE) & National Stock Exchange (NSE).

Bombay Stock Exchange is the oldest stock exchange not only in India but in entire Asia. Its history is
synonymous with that of the Indian Share Market history. BSE started functioning with the name, The
Native Share and Stock Broker's Association in 1875. It got Government of India's recognition as a
stock exchange in 1956 under Securities Contracts (Regulation) Act, 1956. The main index of BSE is
called BSE SENSEX or simply SENSEX. It is composed of 30 financially sound company stocks,
which are liable to be reviewed and modified from time-to-time.

National Stock Exchange (NSE) founded although late than BSE, is currently the leading stock
exchange in India in terms of total volume traded. It is also based in Mumbai but has its presence in
over 1500 towns and cities. In terms of market capitalization, NSE is the second largest bourse in South
Asia. National Stock Exchange got its recognition as a stock exchange in July 1993 under Securities
Contracts (Regulation) Act, 1956. The products that can be traded in NSE are: Equity or Share
Futures (both index and stock)
Options (Call and Put)

NSE's leading index is Nifty 50 or popularly Nifty and is composed of 50 diversified benchmark Indian
company stocks.

Online Trading Mechanism: Bombay Stock Exchange's trading system is popularly known as BOLT (BSE's
Online Trading System). The BSE has deployed an OnLine Trading system (BOLT) on March 14, 1995. BOLT
has a two-tier architecture. The trader workstations are connected directly to the backend server, which acts as a
communication server and a Central Trading Engine (CTE). Other services like information dissemination,
index computation, and position monitoring are also provided by the system. Access to market related
information through the trader workstations is essential for the market participants to act on real-time basis and
take immediate decisions. BOLT has been interfaced with various information vendors like Bloomberg, Bridge,
and Reuters. Market information is fed to news agencies in real time. It makes the trade efficient, transparent
and time saving. NSE provides its customers with a fully automated screen based trading system known as
NEAT system, in which a member can punch into the computer quantities of securities and the prices at which
he likes to transact and the transaction is executed as soon as it finds a matching sale or buy order from a
counter party. It electronically matches orders on a price/time priority and hence cuts down on time, cost and
risk of error, as well as on fraud, resulting in improved operational efficiency. It allows faster incorporation of
price sensitive information into prevailing prices, thus increasing the informational efficiency of markets. The
stocks are hold in a demutualised format helping in fast, transparent and efficient preservation and transactions.
DEMAT ACCOUNT
Dematerialization: Dematerialization or "Demat" is a process whereby investor securities like shares,
debentures etc, are converted into electronic data and stored in computers by a Depository. It is safe, secure and
convenient buying, selling and transacting stocks without suffering endless paperwork and delays. Investor can
convert investor securities to electronic format with a Demat Account.
.
Dematerialization Process: An investor having securities in physical form must get them dematerialized, if he
intends to sell them. This requires the investor to fill a De-mat Request Form (DRF) which is available with

20

every DP and submit the same along with the physical certificates. Every security has an ISIN (International
Securities Identification Number). If there is more than one security than the equal number of Demat Request
Form.(DRF) has to be filled.

Fig: 4

Is a demat account must?

The market regulator, the Securities and Exchange Board of India (SEBI), has made it compulsory to
open the demat account if one want to buy and sell stocks. So a demat account is a must for trading and
investing.

How to start to open a Demat account?

We have to approach a Depository Participant to open a Demat account. Most banks are Depository
participants so we may approach them. A broker and a DP are two different people. A broker is a
member of the stock exchange, who buys and sells stocks on behalf of his customers.

Following are the documents required to open Demat account.

When we approach any DP, we will be guided through the formalities of opening an account. The DP
will ask to provide some documents as proof of our identity and address. Below is a list but we may not
require all of them
PAN card, Voter's ID, Passport, Ration card, Drivers license, Photo credit card, Employee ID card, IT
returns, Electricity/ Landline phone bill etc.

21

 Do we need any stocks to open a Demat account?

No. We need not need any stocks to open a demat account. A demat account can be opened with no
balance of stocks. And there is no minimum balance to be maintained either. Investor can have a zero
balance in investor account.
How much it cost to open a Demat account?
The charges for account opening, annual account maintenance fees and transaction charges vary
between various DPs.
Finally After successfully opening the demat account, the DP will allot Beneficial Owner
Identification Number, which will be needed to mention for all our future transactions.
If we want to sell our stocks, we need to place an order with our broker and give a 'Delivery Instruction'
to investor DP. The DP will debit our account with the number of stocks sold. We will receive the
payment from our broker.
If we want to buy stocks, inform our broker about our Depository Account Number, so that the stocks
bought are credited into our account.
Points to remember while opening online account:
a) Make multiple enquiries and try getting low brokerage trading and demat account.
b) Also discuss about the margin they provide for day trading.
c) Discuss about fund transfer. The fund transfer should be reliable and easy. Fund transfer from our
bank account to trading account and vice versa. Some online share trading account has integrated
savings account which makes easy for us to transfer funds from our saving account to trading account.

d) Very important is about service they provide, the research calls, intraday or daily trading tips.
e) Also enquire about their services charges and any other hidden charges if any.
f) And also see how reliable and easy is to contact them in case if any emergency.
Benefits Of De-mat Account:
A safe and convenient way of holding securities (equity and debt instruments both).

Transactions involving physical securities are costlier than those involving dematerialized
securities (just like the transactions through a bank teller are costlier than ATM transactions).
Therefore, charges applicable to an investor are lesser for each transaction.

Securities can be transferred at an instruction immediately.

Increased liquidity, as securities can be sold at any time during the trading hours (between 9:55
AM to 3:30 PM on all working days), and payment can be received in a very short period of time.

No stamp duty charges.

Risks like forgery, thefts, bad delivery, delays in transfer etc, associated with physical certificates,
are eliminated.

22

Pledging of securities in a short period of time.

Reduced paper work and transaction cost.

Odd-lot shares can also be traded (can be even 1 share).

Nomination facility available.

Any change in address or bank account details can be electronically intimated to all companies in
which investor holds any securities, without having to inform each of them separately.

Securities are transferred by the DP itself, so no need to correspond with the companies.

Shares arising out of bonus, split, consolidation, merger etc. are automatically credited into the
De-mat account of the investor.

Shares allotted in public issues are directly credited into De-mat account

The Brokers: The broker helps a client to buy & sell shares through the exchange who interact with each other
via trading terminals linked to the exchanges, to find suitable buyers for those who want to sell through them or
vice versa.
The Registrars: Each company has a Registrar that maintains a record of all shareholders & the number of
shares each owns. Whenever a transaction takes place, they update these values.
Depository Participants: These are organizations that hold shares of investors in electronic form. Its like a
bank of shares- it holds a record of securities on behalf of the account holder, & enables the transfer of shares
without the account holder having the risk of safe keeping physical shares. Much like investor bank statement
keeps an account of investor money.
The Market Players:
a)

Composition:
Institutional Participants: These are largely publicly listed companies that manage funds. They
contribute to the major part of the trading volume, & are not so heavily regulated.
Retail/HNI participants: These are individuals who purchase securities for their own personal purposes.

b) Intent:
Wealth Creation Investors: These are investors who strategise to build wealth & have a long term
income.
Regular Income Investors: These investors are less willing to tae higher risks, & are looking for safer
investments that will give them regular dividends & provide an income stream over the long term.
Traders: Actively involved in day trading & positional trading, these participants are always hunting
down opportunities to make short term profits.
Trading Account:
Trading Account is a account held at a financial institution and administered by an investment dealer that the
account holder uses to employ a trading strategy rather than a buy-and-hold investment strategy. Though trading
accounts are traditionally thought to hold only stocks, a trading account can hold cash, foreign cash, securities
and a number of other types of investments but generally a trading account is used to buy and sell shares.

Important terms in stock market and in stock trading:

23

Open - The first price at which the stock opens when market opens in the morning.
High - The stock price reached at the highest level in a day.
Low - The stock price reached the lowest level in a day.
Close - The stock price at which it remains after the end of market timings or the final price of the stock
when the market closes for a day.
Volume - Volume is nothing but quantity.
Bid - The Buying price is called as Bid price.
Offer - The selling price is called offer price.
Bid Quantity - The total number of stocks available for buying is called Bid Quantity.
Offer Quantity - The total number of stocks available for selling is called Offer Quantity.
Buying and selling of stocks - Buy is also called as demand or bid and selling is also called as supply or
offer. First selling and then buying (this only happens in day trading) is called as shorting of stocks or
short sell.
Stock Trading - Buying and Selling of stocks is called stock trading.
Transaction - One complete cycle of buying and selling of stocks is called One Transaction.
Squaring off - This term is used to complete one transaction. Means if we buy then we have to sell
(means square-off) and if we sell then we have to buy (means square-off).
Limit Order - In limit order the buying or selling price has to be mentioned and when the stock price
comes to that price then our order will get executed with the mentioned price by us.
Market Order- When we put buy or sell price at market rate then the price get executes at the current
rate of market. The market order get immediately executed at the current available price.

TRADING NETWORK:

24

HUB ANTENNA

SATELLITE

NSE MAIN FRAME

BROKERS PREMISES

Fig: 5

SMART EQUITY TRADING PRODUCTS OF RELIANCE SECURITIES:

CNC (Cash-n-Carry): Invest in preferred stock by taking delivery using this product.

25

Buying will require 100% margins.

Buying exposure is available on free cash balance plus same day sale proceeds.
CNC position can be converted either full or partial into other product (NRML/MIS) during market
hours subject to availability of required margin during conversion.

Normal (NRML) Product- cash segment: A product which allows leveraged positions in cash segment

These are delivery buy transactions in which pre-specified margin (ranging from 20%-100%) is
blocked by RSL during trading hours.
Pre-specified margin can be in the form of free cash balance + Post haircut value of RSL specified
Demat holdings+ same days sale proceeds.
The balance payment has to be made within T+2
If debits are not cleared by T+6 day, RSL will liquidate the positions anytime on or after T+7 days.
If debits are not cleared by T+2 day, Delayed Payment Charges will be levied from T+2 days onwards.
NRML position can be converted to other product (CNC/MIS) during market hours subject to
availability of required margin.

Margin Intraday Square-off (MIS): Take leveraged intraday positions using this product in cash segment.

MIS trading is preferably done by squaring off positions in cash market before the market closes.
Buy & sell specific stocks during the day. Margin blocked is based on predefined percentage at stock
level.
Pre-specified margin can be in the form of cash in ledger+ same days sale proceeds+ RSL specified
DEMAT stock collaterals post haircut value.
All positions are intraday & investor has to square off open positions before 3:20 pm.
MIS position can be converted to other product (CNC/NRML) during market hours subject to
availability of required margin.

R-Model Portfolio:

R-INVEST in Model Portfolio: This option allows investor to invest in a Model Portfolio of stocks
handpicked by Research Team of Reliance.
R-ALIGN in Model Portfolio: This option allows investor to align existing DP holdings with a Model
portfolio.

MAXMULTIPLIER-Cover Order: A high leveraging product for active traders in cash segment.

This product allows investor to take leverage as per his/her risk appetite along with the power to limit
investor downside. Investor can take an intraday position with such orders which blocks lesser margin
than MIS product.
It is a two leg order where investor place buy/sell order along with corresponding stop loss order.
Second leg is a stop loss market order.
All positions are Intraday & investor has to square off open positions before 3:10 pm.

R-Max Subscription Plan: It is a subscription plan that entitles investor to privileged slabs on brokerageinvestor can pay as little as 0.005% (1/2 paisa) on investor trading volumes. It helps investor lower his/her
brokerage.

26

Regular Stock Purchase Plan (RSP plan): It is a disciplined & easy way to invest in the equity markets which
helps in accumulating wealth by making small, regular investments. The benefit of RSP plan is that it allows
Rupee cost averaging by automatically.

4.1.B DERIVATIVE MARKET

The emergence of the market for derivative products, most notably futures and options, can be traced back to the
willingness of risk-averse economic agents to guard themselves against uncertainties arising out of fluctuations
in asset prices. By their very nature, the financial markets are marked by a very high degree of volatility.

27

Through the use of derivative products, it is possible to partially or fully transfer price risks by lockingin asset
prices. As instruments of risk management, these generally do not influence the fluctuations in the underlying
asset prices. However, by locking-in asset prices, derivative products minimize the impact of fluctuations in
asset prices on the profitability and cash flow situation of risk-averse investors.
Derivatives are risk management instruments, which derive their value from an underlying
asset. Banks, securities firms, companies and investors to hedge risks, to gain access to cheaper money and to
make profit, use derivatives. Derivatives are likely to grow even at a faster rate in future.
Definition: Derivative is a product whose value is derived from the value of an underlying asset in a contractual
manner. The underlying asset can be equity, forex, commodity or any other asset.
Securities Contracts (Regulation) Act, 1956 (SC(R) A) defines derivative to include
1. A security derived from a debt instrument, share, loan whether secured or unsecured, risk instrument
or contract for differences or any other form of security.
2. A contract which derives its value from the prices, or index of prices, of underlying securities.

Participants:
The following three broad categories of participants in the derivatives market:

HEDGERS:
Hedgers face risk associated with the price of an asset. They use futures or options markets to reduce or
eliminate this risk.

SPECULATORS:
Speculators wish to bet on future movements in the price of an asset. Futures and options contracts can
give them an extra leverage; that is, they can increase both the potential gains and potential losses in a
speculative venture.

ARBITRAGEURS:
Arbitrageurs are in business to take advantage of a discrepancy between prices in two different
markets. If, for example, they see the futures price of an asset getting out of line with the cash price,
they will take offsetting positions in the two markets to lock in a profit.

Functions of Derivatives Market:

The following are the various functions that are performed by the derivatives markets. They are:
Prices in an organized derivatives market reflect the perception of market participants about the future and
lead the prices of underlying to the perceived future level.
Derivatives market helps to transfer risks from those who have them but may not like them to those who
have an appetite for them.
Derivative trading acts as a catalyst for new entrepreneurial activity.
Derivatives markets help increase savings and investment in the long run.
Types of Derivatives:
The following are the various types of derivatives. They are:

28

FUTURES: A futures contract is an agreement between two parties to buy or sell an asset at a certain time in
the future at a certain price.
OPTIONS: Options are of two types - calls and puts. Calls give the buyer the right but not the obligation to buy
a given quantity of the underlying asset, at a given price on or before a given future date. Puts give the buyer the
right, but not the obligation to sell a given quantity of the underlying asset at a given price on or before a given
date
FORWARDS: A forward contract is a customized contract between two entities, where settlement takes place
on a specific date in the future generally fortnightly or monthly at todays pre-agreed price.
WARRANTS: Options generally have lives of up to one year; the majority of options traded on options
exchanges having a maximum maturity of nine months. Longer-dated options are called warrants and are
generally traded over-the-counter.
LEAPS: The acronym LEAPS means Long-Term Equity Anticipation Securities. These are options having a
maturity of up to three years.
BASKETS: Basket options are options on portfolios of underlying assets. The underlying asset is usually a
moving average of a basket of assets. Equity index options are a form of basket options.
SWAPS: Swaps are private agreements between two parties to exchange cash flows in the future according to a
prearranged formula. They can be regarded as portfolios of forward contracts. The two commonly used swaps
are

INTEREST RATE SWAPS: This entail swapping only the interest related cash flows between the
Parties in the same currency.
CURRENCY SWAPS: This entail swapping both principal and interest between the parties, with the
cash flows in one direction being in a different currency than those in the opposite Direction.

SWAPTIONS: Swaptions are options to buy or sell a swap that will become operative at the expiry of the
options. Thus a Swaptions is an option on a forward swap.

Derivative segment at National Stock Exchange:

The derivatives segment on the exchange commenced with S&P CNX Nifty Index futures on June 12, 2007.The
F&O segment of NSE provides trading facilities for the following derivative segment:
1.
2.
3.
4.

Index Based Futures

Index Based Options
Individual Stock Options
Individual Stock Futures

FUTURE

29

Definition
A Futures contract is an agreement between two parties to buy or sell an asset at a certain time in the future at a
certain price. To facilitate liquidity in the futures contract, the exchange specifies certain standard features of
the contract. The standardized items on a futures contract are:

Quantity of the underlying

Quality of the underlying

The date and the month of delivery

The units of price quotations and minimum price change

Locations of settlement

Types of futures: On the basis of the underlying asset they derive, the futures are divided into two types:

Stock futures:
The stock futures are the futures that have the underlying asset as the individual securities. The settlement of
the stock futures is of cash settlement and the settlement price of the future is the closing price of the underlying
security.

Index futures:
Index futures are the futures, which have the underlying asset as an Index. The Index futures are also cash
settled. The settlement price of the Index futures shall be the closing value of the underlying index on the expiry
date of the contract.

Parties in the Futures contract:

There are two parties in a future contract, the Buyer and the Seller. The buyer of the futures contract is one who
is LONG on the futures contract and the seller of the futures contract is one who is SHORT on the futures
contract.

The pay off for the buyer and the seller of the futures contract are as follows.

30

Payoff for a buyer of Futures:

PROFIT

LOSS

Fig: 6
CASE 1: The buyer bought the future contract at (F); if the futures price goes to E1 then the buyer gets the
profit of (FP).
CASE 2: The buyer gets loss when the future price goes less than (F), if the futures price goes to E2 then the
buyer gets the loss of (FL).
Payoff for a seller of Futures:

P
PROFIT

LOSS
L

Fig: 7
F FUTURES PRICE
E1, E2 SETTLEMENT PRICE.

31

CASE 1: The Seller sold the future contract at (F); if the futures price goes to E1 then the Seller gets the profit
of (FP).
CASE 2: The Seller gets loss when the future price goes greater than (F), if the futures price goes to E2 then the
Seller gets the loss of (FL).

Margins: Margins are the deposits, which reduce counter party risk, arise in a futures contract. These margins
are collected in order to eliminate the counter party risk. There are three types of margins:

Initial margin: Whenever a futures contract is signed, both buyer and seller are required to post initial
margin. Both buyer and seller are required to make security deposits that are intended to guarantee that
they will infact be able to fulfill their obligation. These deposits are Initial margins and they are often
referred as performance margins. The amount of margin is roughly 5% to 15% of total purchase price of
futures contract.

Marking to Market Margin: The process of adjusting the equity in an investors account in order to
reflect the change in the settlement price of futures contract is known as MTM Margin.

Maintenance margin: The investor must keep the futures account equity equal to or greater than certain
percentage of the amount deposited as Initial Margin. If the equity goes less than that percentage of
Initial margin, then the investor receives a call for an additional deposit of cash known as Maintenance
Margin to bring the equity up to the Initial margin.

Role of Margins: The role of margins in the futures contract is explained in the following example.
S sold a XYZ February futures contract to B at Rs.300; the following table shows the effect of margins
on the contract. The contract size of XYZ is 1200. The initial margin amount is say Rs.20000, the
maintenance margin is 65% of Initial margin.

Table

32

DAY

PRICE OF XYZ

300.00

311(price increased)

EFFECT
ON
BUYER (B)

EFFECT
ON
SELLER (S)

MTM
P/L
Bal.in Margin

MTM
P/L
Bal.in Margin

Contract
is
entered
and
initial margin is
deposited.

+13,200

-13,200
+13,200

287

-28,800

305

+21,600

B got profit and

S got loss, S
deposited
maintenance
margin.

+28,800

B got loss and

deposited
maintenance
margin.

-21,600

B got profit, S
got loss.

+15,600

REMARKS

Contract settled
at 305, totally B
got profit and S
got loss.

Pricing the Futures: The fair value of the future contract is derived from a model known as the Cost of Carry
model. This model gives the fair value of the futures contract.

33

Cost of Carry Model:

F=S (1+r-q) t
Where
F Futures Price
S Spot price of the Underlying
r Cost of Financing
q Expected Dividend Yield
T Holding Period.

Futures Terminology:
Spot price: The price at which an asset trades in the spot market.
Futures price: The price at which the futures contract trades in the futures market.
Contract cycle: The period over which a contract trades. The index futures contracts on the NSE have onemonth, two-months and three-month expiry cycles which expire on the last Thursday of the month. Thus a
January expiration contract expires on the last Thursday of January and a February expiration contract ceases
trading on the last Thursday of February. On the Friday following the last Thursday, a new contract having a
three-month expiry is introduced for trading.
Expiry date: It is the date specified in the futures contract. This is the last day on which the contract will be
traded, at the end of which it will cease to exist.
Contract size: The amount of asset that has to be delivered under one contract.
Basis: In the context of financial futures, basis can be defined as the futures price minus the spot price. There
will be a different basis for each delivery month for each contract. In a normal market, basis will be positive.
This reflects that futures prices normally exceed spot prices.
Cost of carry: The relationship between futures prices and spot prices can be summarized in terms of what is
known as the cost of carry. This measures the storage cost plus the interest that is paid to finance the asset less
the income earned on the asset.
Open Interest: Total outstanding long or short positions in the market at any specific time. As total long
positions for market would be equal to short positions, for calculation of open interest, only one side of the
contract is counted.

OPTIONS
Definition:

34

Option is a type of contract between two persons where one grants the other the right to buy a specific asset at a
specific price within a specified time period. Alternatively the contract may grant the other person the right to
sell a specific asset at a specific price within a specific time period. In order to have this right, the option buyer
has to pay the seller of the option premium.
The assets on which options can be derived are stocks, commodities, indexes etc. If the underlying asset is the
financial asset, then the options are financial options like stock options, currency options, index options etc, and
if the underlying asset is the non-financial asset the options are non-financial options like commodity options.

Properties of Options:
Options have several unique properties that set them apart from other securities. The following are the
properties of options:

Limited Loss
High Leverage Potential
Limited Life

Parties in an Option contract:

1.

Buyer of the Option:

The buyer of an option is one who by paying option premium buys the right but not the obligation to
exercise his option on seller/writer.

2.

Writer/Seller of the Option:

The writer of a call/put options is the one who receives the option premium and is there by obligated to
sell/buy the asset if the buyer exercises the option on him.

Types of Options:
The options are classified into various types on the basis of various variables. The following are the various
types of options:
On the basis of the Underlying asset:
On the basis of the underlying asset the options are divided into two types:

INDEX OPTIONS: The Index options have the underlying asset as the index.
STOCK OPTIONS: A stock option gives the buyer of the option the right to buy/sell stock at a
specified price. Stock options are options on the individual stocks, there are currently more than 50
stocks are trading in this segment.

On the basis of the market movement:

On the basis of the market movement the options are divided into two types. They are:

35

CALL OPTION: A call options is bought by an investor when he seems that the stock price moves
upwards. A call option gives the holder of the option the right but not the obligation to buy an asset by
a certain date for a certain price.

PUT OPTION: A put option is bought by an investor when he seems that the stock price moves
downwards. A put option gives the holder of the option right but not the obligation to sell an asset by a
certain date for a certain price.

On the basis of exercise of Option:

On the basis of the exercising of the option, the options are classified into two categories.
AMERICAN OPTION: American options are options that can be exercised at any time up to the
expiration date, most exchange-traded options are American.

EUROPEAN OPTION: European options are options that can be exercised only on the expiration date
itself. European options are easier to analyze than American options.

Factors affecting the price of an Option:

The following are the various factors that affect the price of an option. They are:

Stock price: The pay-off from a call option is the amount by which the stock price exceeds the strike
price. Call options therefore become more valuable as the stock price increases and vice versa. The
pay-off from a put option is the amount; by which the strike price exceeds the stock price. Put options
therefore become more valuable as the stock price decreases and vice versa.

Strike price: In the case of a call, as the strike price increases, the stock price has to make a larger
upward move for the option to go in-the money. Therefore, for a call, as the strike price increases,
options become less valuable and as strike price decreases, options become more valuable.

Time to expiration: Both Put and Call American options become more valuable as the time to
expiration increases.

Volatility: The volatility of a stock price is a measure of uncertain about future stock price
movements. As volatility increases, the chance that the stock will do very well or very poor increases.
The value of both Calls and Puts therefore increase as volatility increase.

Risk-free interest rate: The put option prices decline as the risk free rate increases where as the
prices of calls always increase as the risk free interest rate increases.

Dividends: Dividends have the effect of reducing the stock price on the ex dividend date. This has a
negative effect on the value of call options and a positive affect on the value of put options.

Options Terminology:
Strike Price: The price specified in the options contract is known as the Strike price or Exercise price.
Option Premium: Option premium is the price paid by the option buyer to the option seller.

36

Expiration Date: The date specified in the options contract is known as the expiration date.
In-The-Money Option: An in the money option is an option that would lead to a positive cash inflow to the
holder if it is exercised immediately.
At-The-Money Option: It is an option is an option that would lead to zero cash flow if it is exercised
immediately.
Out-Of-The-Money Option: An out of the money option is an option that would lead to a negative cash flow if
it is exercised immediately.
Intrinsic Value of an Option: The intrinsic value of an option is ITM, if option is ITM. If the option is OTM,
its intrinsic value is ZERO.
Time Value of an Option: The time value of an option is the difference between its premium and its intrinsic
value.

SWOT ANALYSIS OF EQUITY/DERIVATIVE TRADING:

Strengths

Long

term

growth

Weakness
through

capital

Very risky

37

appreciation

High rate of return

Has aggressive growth

Provides ownership in the company in which

investment is made

Share holders are entitled to profit made by

the company

Suitable for risk seekers

Volatile rate of return

No security of investment

Security transaction tax has to be paid

Suitable for risk seekers

Dividends received on shares depend on

profit made by the company. If there is no
profit there is no dividend

Share prices are subject to market

Threats

Opportunity

It gives the shareholder a right to vote in the

company

Fixed income securities are preferred when

markets are down

The market may be volatile due to many

factors, however returns are generated by
equity shares of earning potential i.e. P/E
ratio. Therefore an investor investing in
equity in a systematic manner over a long
period of time can easily expect double digit
return

Rate of return is more stable and there is

more security in other investment avenues

Returns generated by equity investment has

outperformed all other investment avenues in
the long run

Fixed income securities are preferred when

markets are down

Rate of return is more stable and there is

more security in other investment avenues

4.2 MUTUAL FUND

Introduction

38

A Mutual Fund is a vehicle for investing in stocks and bonds. It is not an alternative investment option to stocks
and bonds; rather it pools the money of several investors and invests this in stocks, bonds, money market
instruments and other types of securities. Buying a mutual fund is like buying a small slice of a big pizza. The
owner of a mutual fund unit gets a proportional share of the fund's gains, losses, income and expenses.
Association of Mutual Funds in India (AMFI) is the umbrella body of all the Mutual Funds registered with
SEBI. It is a non-profit organisation committed to develop the Indian Mutual Fund Industry on professional,
healthy and ethical lines and to enhance and maintain standards in all areas with a view to protecting and
promoting the interests of Mutual Funds and their unit holders .
CRISIL (Credit Rating Information Services of India Limited) is a global analytical company providing ratings,
research, and risk and policy advisory services. CRISILs majority shareholder is Standard & Poor's, a division
of The McGraw-Hill Companies and provider of financial market intelligence. CRISILs businesses can be
divided into three broad categories - Ratings, Research and Advisory. In India, CRISIL Research is an
independent and integrated research house and provides growth forecasts, profitability analysis, emerging
trends, expected investments, industry structure and regulatory frameworks

A Mutual Fund pools up the money from individual/ corporate investors and invests the same on behalf of the
investors /unit holders, in equity shares, Government securities, Bonds, Call money markets etc., and distributes
the profits. In other words, a mutual fund allows an investor to indirectly take a position in a basket of assets. A
mutual fund pools together sums from individual investors and invests it in various financial instruments. Each
mutual fund has its own investment objective. Mutual funds have become one of the most attractive ways for
the average person to invest their money. A mutual fund pools resources from thousands of investors and then
diversifies its investment into many different holdings such as stock, bonds, and securities in order to provide
highly relative safety and returns. Each Mutual Fund with different type of schemes is managed by respective
Asset Management Company (AMC). An investor can invest his money in one or more schemes of Mutual Fund
according to his choice and becomes the unit holder of the scheme. The invested money in a particular scheme
of a Mutual Fund is then invested by fund manager in different types of suitable stock and securities, bonds and
money market instruments. Each Mutual Fund is managed by qualified professional man, who use this money to
create a portfolio which includes stock and shares, bonds, money-market instruments or combination of all.

Distinguishing characteristics of Mutual Fund:

Distinguishing characteristics of the mutual fund may include the following:
1) Investors purchase mutual fund shares from the fund itself (or through a broker for the fund) instead of
from other investors on a secondary market
2) The price that investors pay for mutual fund shares is the fund's per share net asset value (NAV) plus any
shareholder fees that the fund imposes at the time of purchase (such as sales loads).
3) Mutual fund shares are "redeemable," meaning investors can sell their shares back to the fund (or to a
broker acting for the fund).
4) Mutual funds generally create and sell new shares to accommodate new investors. In other words, they sell
their shares on a continuous basis, although some funds stop selling when, for example, they become too
large.
5) The investment portfolios of mutual funds typically are managed by separate entities known as "investment
advisers" that are registered with the SEBI.
Mutual Fund operation flow chart:

39

Fig: 8
Role of Fund Manager:
Fund managers are responsible for implementing a consistent investment strategy that reflects the goals and
objectives of the fund. Normally, fund managers monitor market and economic trends and analyze securities in
order to make informed investment decisions. Thus the role of fund manager is very crucial.
ACCOUNT STATEMENT: When the units are bought or get allotted a statement will be issued mentioning the
number of units allotted/bought and redeemed by investor. The recording of entries would be similar to the
passbook entries in the bank. In mutual fund terminology it is called Account Statement. After investing in a
mutual fund investor gets an account statement, which shows his holding and the price at which bought units.
The account statement is computer generated and cannot be traded or transferred. The account statement shows
the:

holding details
the number of units outstanding
value of the holdings

All transactions relating to purchase units, redemption of units, dividend, reinvestment, etc are shown in the
account statement.

Structure of Mutual Fund:

40

Fig: 9

THE SPONSOR: The Sponsor is the creator of the fund, establishes the mutual fund and gets it registered with
SEBI and will typically hold a number of voting shares (perhaps 100) in the fund, but these are not entitled to
any distributions or share in the equity. All of the equity belongs to the investors, typically in the form of nonvoting "preferred redeemable shares" The voting shares generally control management of the fund, apart from
limited major decisions. The sponsor is the Settlor of the Trust that holds Trust property on behalf of investors
who are the beneficiaries of the Trust. The sponsor is also required to contribute at least 40% of the capital of
the asset management company, which is formed for managing the assets of the Trust.
THE BOARD OF TRUSTEES: The mutual fund needs to be constituted in the form of a trust and the
instrument of the trust should be in the form of a deed registered under the provisions of the Indian Registration
Act, 1908. The supervisory role is fulfilled by the Board of Trustees of the Investment Company. The board of
trustees manages the MF and the sponsor executes the trust deeds in favor of the trustees. It is the job of the MF
trustees to see that schemes floated and managed by the AMC appointed by the trustees are in accordance with
the trust deed and SEBI guidelines.
THE ASSET MANAGEMENT COMPANY (AMC): The company that manages a mutual fund is called an
AMC. For all practical purposes, it is an organized form of a "money portfolio manager". An AMC may have
several mutual fund schemes with similar or varied investment objectives. The AMC hires a professional money
manager, who buys and sells securities in line with the fund's stated objective. All Asset Management
Companies (AMCs) are regulated by SEBI and/or the RBI (in case the AMC is promoted by a bank). In
addition, every mutual fund has a board of directors that represents the unit holders' interests in the mutual fund.
This is entity that undertakes the designing and marketing of schemes, raises money from the public under the
schemes and manages the money on behalf of its owners. To segregate the collected funds from this entity's own
funds, the corpus is placed in a legal vehicle. It is the character of this legal vehicle that determines the character
of the Fund itself. Irrespective of the nature of the structure, what is more fundamental is that in view of the
fiduciary role of the AMC or the fund manager towards the public, there is a need for supervision of the
activities of the AMC or fund manager by a separate body. The assets of the Trust comprise of properties of the
schemes, which are floated by the asset management company with the approval of the Trustees Schemes may
have different characteristics - they may be open or closed ended or may have a particular investment focus or
portfolio composition. Finally, the safe custody of assets of the Trust is entrusted to one or more custodians.

41

THE CUSTODIAN: Custodian holds the fund's cash and investment assets. Commonly, parts of the fund's
assets are held by one or more brokers who execute trades on behalf of the fund Custodial Fees can also be a
fixed fee or a percentage of NAV. Where a broker acts as de facto custodian, it usually charges on a transactional
basis. Apart from these four there is registrar or a transfer agent who acts as a key party.
THE ADMINISTRATOR: Administrator acts as registrar and transfer agent, keeps the books and records of the
fund, and calculates the NAV. Depending on the complexity of the fund, the administrator's fees could be as
little as a few thousand dollars a year or as much as 0.5 to 0.65 % of the NAV per annum. Sometimes the
administrator's fees are included within the management fee. In certain situations, the administrator subcontracts
a part of the work, particularly the NAV certification, to the investment manager.

Investment avenues of Mutual Fund:

MUTUAL FUND INVEST INTO

BONDS

STOCKS

MONEY MARKET
INSTRUMENTS
Fig: 10

STOCKS: Mutual Funds invest into stocks, which represent ownership or equity in a company, popularly known
as shares.

BONDS: These represent debt from companies, financial institutions or government agencies.

MONEY MARKET INSTRUMENTS: These include short-term debt instruments such as treasury bills,
certificate of deposits and inter-bank call money.

Types of Mutual Funds:

42

Equity Fund

Debt Fund

Index Fund

Fig: 11

By Capitalization:
OPEN ENDED SCHEME:

43

These do not have a fixed maturity. One can deal with the Mutual Fund for investments and redemptions. The
key feature is liquidity. The investor can conveniently buy and sell units at Net Asset Value (NAV) related
prices, at any point of time.
CLOSE ENDED SCHEME:
Schemes that have a stipulated maturity period (ranging from 2 to 15 years) are called close ended schemes. The
investor can invest in the scheme at the time of the initial issue and thereafter can buy or sell the units of the
scheme on the stock exchanges where they are listed. There are a fixed number of shares available because a
closed-end fund raises its money all at once and does not buy back shares investors . The market price at the
stock exchange could vary from the schemes NAV on account of demand and supply situation, unit holders
expectations and other market factor. Closed-end fund shares often trade at a discount, or less than their net asset
value, but one may pay a premium, or more than the NAV, if the fund is in demand. Their prices change
constantly throughout the trading day, unlike open-end funds whose prices are set only once, at the end of the
day.

DIFFERENCE BETWEEN THE TWO:

The difference between the two is in the way each operates after the initial public offering. A close-ended
scheme operates like any other public entity whose shares are traded on the stock market. Thus, to buy or sell
the shares of a close-ended scheme, investor has to transact on the BSE or on the NSE. That's why the market
price of its shares is also determined by supply and demand for its shares (apart from quality and performance of
its portfolio). On the contrary, open-ended funds continue to price, sell and repurchase shares after the initial
offer on the basis of the NAV. This mutual fund is ready to sell additional shares of the fund at the NAV (at par
or adjusted for expenses), or buy back (redeem) shares of the fund at the NAV (at par or adjusted for expenses).
That's why the unit capital of open-ended funds can fluctuate on daily basis. But a close-ended fund may or may
not offer more shares after its listing. It may or may not also repurchase its shares. That is up to the issuing
company to decide.
So in an open-ended mutual fund there are no limits on the total size of the corpus. Investors are permitted to
enter and exit the open-ended mutual fund at any point of time at a price that is linked to the net asset value
(NAV). In case of closed-ended funds, the total size of the corpus is limited by the size of the initial offer.

By Investments:
EQUITY FUNDS invests mainly in the Stock market. Each fund states its investment objective and invests the
money pooled by the investors in stocks of companies that meet the stated objective.
The advantage of owning Equity funds is that they give substantially higher returns for client money compared
to other investment options. The disadvantage is that these high returns come with a certain amount of risk and
there is a chance that investor may lose the invested money.
DEBT FUNDS invest in long term or short term papers that are issued by companies, banks or the government.
These papers can be redeemed on a particular date at a pre-determined rate of interest. Once again, each debt
fund invests the investors money as per the stated investment objective.
The advantage of Debt is that it is a less risky option compared to equity schemes, though there is no guarantee
of the returns. The disadvantages are low returns compared to equity funds and returns are subject to interest
rate fluctuations.
INDEX FUNDS are mutual funds that are intended to track the returns of a market index. An index is a group of
securities that represents a particular segment of the market (stock market, bond market, etc.). Among the most
well-known companies that develop market indexes are Standard & Poor's, etc. Index funds will hold almost all

44

of the securities in the same proportion as its respective index. An index mutual fund is said to provide broad
market exposure, low operating expenses and low portfolio turnover.

GROWTH SCHEME:
Aim to provide capital appreciation over the medium to long term. These schemes normally invest a majority of
their funds in equities and are willing to bear short term decline in value for possible future appreciation. These
schemes are not for investors seeking regular income or needing their money back in the short term.
Ideal for:
Investors in their prime earning years.
Investors seeking growth over long term.

GROWTH & INCOME FUNDS:

Growth and income funds seek long-term growth of capital as well as current income. The investment strategies
used to reach these goals vary among funds. Some invest in a dual portfolio consisting of growth stocks and
income stocks, or a combination of growth stocks, stocks paying high dividends, preferred stocks, convertible
securities or fixed-income securities such as corporate bonds and money market instruments. They are suitable
for investors who can assume some risk to achieve growth of capital but who also want to maintain a moderate
level of current income.

FIXED INCOME FUNDS:

The goal of fixed income funds is to provide current income consistent with the preservation of capital.
These funds invest in corporate bonds or government-backed mortgage securities that have a fixed rate of return.
Within the fixed-income category, funds vary greatly in their stability of principal and in their dividend yields.
High-yield funds, which seek to maximize yield by investing in lower-rated bonds of longer maturities, entail
less stability of principal than fixed-income funds that invest in higher-rated funds but lower-yielding securities.
Some fixed-income funds seek to minimize risk by investing exclusively in securities whose timely payment of
interest and principal is backed by the full faith and credit of the Indian Government. Fixed-income funds are
suitable for investors who want to maximize current income and who can assume a degree of capital risk in
order to do so.
Gilt funds: They are aimed at generating returns commensurate with zero credit risk, which is done by
investing in securities created and issued by the central and/or the state government securities and/or
other instruments permitted by the Reserve Bank of India. They ensure zero risk.

BALANCED FUNDS:
The Balanced fund aims to provide both growth and income. These funds invest in both shares and fixed income
securities in the proportion indicated in their offer documents. An equity-oriented balanced fund must invest at
least 60% assets in equity funds. The same logic applies to a debt-oriented balanced fund, with at least 60%
assets lying in debt schemes. It is ideal for investors who are looking for a combination of income and moderate
growth.

MONEY MARKET FUNDS/ LIQUID FUNDS:

For the cautious investor, these funds provide a very high stability of principal while seeking a moderate to high
current income. They invest in highly liquid, virtually risk-free, short-term debt securities of agencies of the

45

Indian Government, banks and corporations and Treasury Bills. Because of their short-term investments, money
market mutual funds are able to keep a virtually constant unit price; only the yield fluctuates. Therefore, they are
an attractive alternative to bank accounts. With yields that are generally competitive with, and usually higher
than, yields on bank savings account, they offer several advantages. Money can be withdrawn any time without
penalty. Although not insured, money market funds invest only in highly liquid, short-term, top-rated money
market instruments. Money market funds are suitable for investors who want high stability of principal and
current income with immediate liquidity.

SECTOR FUNDS:
These funds invest in securities of a specific industry or sector of the economy such as health care, technology,
leisure, utilities or precious metals. The funds enable investors to diversify holdings among many companies
within an industry, a more conservative approach than investing directly in one particular company. These funds
invest in securities of a specific industry or sector of the economy such as health care, technology, leisure,
utilities or precious metals. The funds enable investors to diversify holdings among many companies within an
industry, a more conservative approach than investing directly in one particular company. Index funds generally
buy shares in all the companies composing the BSE Sensex or NSE Nifty or other broad stock market indices.
They are not suitable for investors who want to conserve their principal or maximize current income.

OTHER SCHEME:
Tax Saving Schemes (Equity Linked Saving Scheme - ELSS):
These schemes offer tax incentives to the investors under tax laws as prescribed from time to time and
promote long term investments in equities through Mutual Funds.
Ideal for:
Investors seeking tax incentives

SUMMARY:

46

Fig: 12

OBJECTIVE

OPEN

CLOSE

TIME
HORIZON

RISK
PROFILE

EQUITY
(%)

DEBT
(%)

Money
Market
Income

Yes

No

Short-Term

Low

0-20

MONEY
MARKET
INSTRUMEN
T & OTHERS
(%)
80-100

Yes

Yes

80-100

0-20

Yes

Yes

Low
Medium
High

to

Growth

Medium
-Long Term
Long Term

80-100

0-20

0-20

Balanced

Yes

Yes

Long term

Medium
high

to

0-60

0-40

0-20

Tax Saving

Yes

Yes

Long term

High

80-100

80-100

0-20

Types of Load:

47

The AMC that manages mutual fund has to bear a number of expenses. So it recovers part of these expenses
from its investors, for whom it is doing the favour of managing funds. It is broken into two parts: annual
management fee and entry & exit loads.
ENTRY LOAD: Loads normally apply to only open-ended schemes. An entry load is also called the sales load
which is mainly to help the AMC recover expenses relating to sales literature, distribution, advertising and
agent/broker commissions. The price at which an investor buys into the fund is a function of both the NAV and
sales load. An entry load is an additional cost that an investor pays at the point of entry. The entry load could be
different for each scheme; it would also depend on the amount of investment and the time period of investment.
In terms of SEBI no entry load will be charged by the scheme to the investor effective August 1, 2009.

EXIT LOAD: On the other hand, exit load (if one withdraws within a specified period) is charged while
redeeming investors units. The latter is for more logical reasons, especially with income or money market
funds, where a quick withdrawal by too many investors can put pressure on the fund's asset maturity profile. So
to ensure that longer-term investors are not penalized, short-term investors are charged an exit load. An exit load
is levy that an investor pays at the point of exit. This is levied to dissuade investors from exiting the fund. The
exit load could be different for each scheme. It would also depend on the amount of investment and the time
period of investment.

Various options of Mutual Fund:

Generally there are 3 broad categories that any Mutual Fund scheme offers:
A Dividend Plan entails a regular payment of dividend to the investors.
A Dividend Reinvestment Plan is a plan where these dividends are reinvested in the scheme itself. If
tax efficiency is the key parameter in one decision process, then Dividend reinvestment may turn out to
be the best.
A Growth Plan is one where no dividends are declared and the investor only gains through capital
appreciation in the NAV of the fund. If client investments and liquidity are not linked, the best option
would be growth / appreciation
Various Plans of Mutual Fund : The Direct Plan is a plan where investor can directly invest with the AMCs
without routing their investment through brokers. While in a Regular Plan investor invest through a distributor
or advisor. AMCs usually pay some upfront fee to agents for their services.
In September 13, 2012, market regulator SEBI came out with several reforms in Mutual Funds and launching
Direct Plans was one of them. Now, every AMC has launched Direct Plans which allow investors to invest
directly with the AMC without paying the distributor commission
The difference in returns is expected to range between 0.50 and 0.75 percent. The expense ratio is lower in case
of Direct Plan compare to a Regular Plan,
Thus with direct investment option investors will get the NAVs with lower cost. Now, investors can avoid
paying these commissions and it will translate into more returns every year. Normally a Direct Plan is expected
to be cheaper by about 0.5% to 1% p.a. for Equity Funds, 0.1% to 0.5% p.a. for Debt Funds and 0.05% to 0.15%
p.a. for Liquid Funds.

48

.Systematic Investment Plan: A systematic investment plan is one where an investor contributes a fixed
amount every month and at the prevailing NAV the units are credited to his account. Today many funds are
offering this facility. A systematic investment plan (SIP) offers 2 major benefits to an investor:

It avoids lump sum investment at one point of time

In a scenario of falling prices, it reduces investor overall cost of acquisition by a process of rupee-cost
averaging. This means that at lower prices one end up getting more units for the same investment.

Returns: As per SEBI Regulations, mutual funds are not allowed to assure returns. However, funds floated by
AMCs of public sector banks and financial institutions were permitted to assure returns to the unit holders
provided the parent sponsor was willing to give an explicit guarantee to honour such a commitment. But in
general, mutual funds cannot assure fixed returns to their investors.
Investors need to be clear that mutual funds are essentially medium to long-term investments. Hence, short-term
abnormal profits will not be sustainable in the long run. But in the medium to long run the mutual funds tend to
outperform most other avenues of investments at the same time avoiding the risk of direct investment
accompanied with professional fund management.

Mutual fund style box:

Fig: 13
Investment style:

Growth fund: The objective of Growth Fund scheme is to provide capital appreciation over
the medium to long term. This type of scheme is an ideal scheme for the investors seeking
capital appreciation for a long period. These funds buy shares in companies that are growing
rapidly but are probably not going to go out of business too quickly. Growth funds rarely
provide dividend income and are considered risky investments

Value fund: The term value refers to a style of investing that looks for high quality companies
that are out of favour with the market. Low P/E and price-to-book ratios characterize these
companies and high dividend yields. These funds invest in large and mid-sized companies that
appear to be overlooked or out of favour. These undervalued stocks tend to pay dividends.

Blend fund: These funds are a "blend" of both growth and value stocks.

49

Size of Investment:

Large cap funds: These funds buy shares of big companies. Think IBM. The stock prices for
these companies tend to be relatively stable, and the companies may pay a decent dividend. In
companies whose market value (shares outstanding X current market price) is large. By large,
I mean greater than $9 billion. These "blue-chip" funds tend to be well-established
corporations and tend to pay dividends.

Mid cap funds: These funds buy shares of medium-size companies. The stock prices for these
companies are less volatile than the small cap companies, but more volatile (and with greater
potential for growth) than the large cap companies. These funds invest in mid-sized companies
whose market value is more in the range of $1 billion to $9 billion.

Small cap funds: These funds buy shares of small companies. Think new IPOs. The stock
prices for these companies tend to be highly volatile, and the companies never (ever) pay a
dividend investor may also find funds called micro cap, which invest in the smallest of
publically traded companies.

MUTUAL FUND FUNDAMENTALS

Net Asset Value: The Net Asset Value of a Fund is calculated as the value of the fund's assets minus its
liabilities. The performance of a particular scheme of a mutual fund is measured by its Net Asset Value (NAV).
Alpha Ratio: Alpha measures the difference between a fund's actual returns and its expected performance,
given its level of risk (as measured by beta). A positive alpha figure indicates the fund has performed better than
its beta would predict. In contrast, a negative alpha indicates a fund has underperformed, given the expectations
established by the fund's beta.
Beta Ratio: Beta tells how sensitive the fund is towards the market movement. In other words, it shows the
sensitivity of mutual fund portfolio towards market. Beta is always benchmarked to 1. A fund with a beta greater
than 1 is considered more volatile than the market; less than 1 means less volatile. So say investor fund gets a
beta of 1.15 - it has a history of fluctuating 15% more than the benchmark if the market is up, the fund should
outperform by 15%. If the market heads lower, the fund should fall by 15% more.
Standard Deviation: Standard deviation measures how far a fund's recent numbers stray from its long-term
average. For example, if Fund X has a 10% average rate of return and a standard deviation of 5%, most of the
time, its return will range from 5% to 15%. A large standard deviation supposedly shows a more risky fund than
a smaller one.
Sharpe ratio: Sharpe ratio tries to quantify how a fund performs relative to the risk it takes. Take a fund's
returns in excess of a guaranteed investment (a 90-day T-bill) and divide by the standard deviation of those
returns. The bigger the Sharpe ratio, the better a fund performed considering its riskiness. Here, again, investor
has the problem of relativity - the ratio itself doesn't tell investor anything, investor has to compare it with the
Sharpe of other funds. But this ratio has an advantage over alpha because it uses standard deviation instead of
beta as the volatility variable, and therefore investor don't have to worry that a fund doesn't relate well to the
chosen index.
R- squared: R-squared measures the relationship between a portfolio and its benchmark. It can be thought of as
a percentage from 1 to 100.

50

R-squared is not a measure of the performance of a portfolio. A great portfolio can have a very low R-squared. It
is simply a measure of the correlation of the portfolio's returns to the benchmark's returns.
If investor wants a portfolio that doesn't move at all like the benchmark, he wants a low R-squared and viceversa.
General Range for R-Squared:

70-100% = good correlation between the portfolio's returns and the benchmark's returns

40-70% = average correlation between the portfolio's returns and the benchmark's returns

1-40% = low correlation between the portfolio's returns and the benchmark's returns

Portfolio Turnover Rate: The rate at which the fund's portfolio securities are changed each year. A portfolio
may contain a combination of investments such as stocks, bonds, and other securities. This is how often a fund
manager sells all the stocks in the mutual fund in a given year. Aggressively managed funds generally have
higher portfolio turnover rates than do conservative funds which invest for the long term. High portfolio
turnover rates generally add to the expenses of a fund.
Expense Ratio: It is a measure of what it costs an investment company to operate a mutual fund. An expense
ratio is determined through an annual calculation, where a fund's operating expenses are divided by the average
dollar value of its assets under management. Operating expenses are taken out of a fund's assets and lower the
return to a fund's investors. Also known as "management expense ratio" (MER).
Assets under management (AUM) is a financial term denoting the market value of all the funds being
managed by a financial institution on behalf of its clients, investors, partners, depositors, etc. This metric is very
popular within the financial industry and is a sign of size and success of any firm against its competition. And is
consists of growth/decline due to both capital appreciation/losses and new money inflow/outflow.
Benchmark: Capital market regulator SEBI (Securities and Exchange Board of India) has made it mandatory
for fund houses to declare a benchmark index. A schemes benchmark is an index that is decided by its fund
house to serve as a standard for the schemes returns.
A fund's returns compared to its benchmark are called its benchmark returns. Benchmark returns will give
investor a standard by which to make the comparison. It basically indicates what the fund has earned against
what it should have earned. One can say that the benchmarks returns are the MF schemes target and the scheme
is expected to have done well if it manages to beat its benchmark.
Outperformed or underperformed:
If fund performs > Benchmark = Fund has outperformed
If fund performs < Benchmark = Fund has underperformed
Benchmark indicates directly the fund manager's performance. For instance, a mutual fund which outperforms
the benchmark is a sign of an efficient fund manager.
Price-Earnings Ratio - P/E Ratio: A valuation ratio of a company's current share price compared to its pershare earnings. A high P/E usually indicates that the market will pay more to obtain the company's earnings
because it believes in the firm's ability to increase its earnings. A low P/E indicates the market has less
confidence that the company's earnings will increase.
In general, a high P/E suggests that investors are expecting higher earnings growth in the future compared to
companies with a lower P/E

51

Calculated as: Market Value per Share/Earnings per Share (EPS)

How Mutual Fund can earn Money?

A Mutual Fund can earn money in 3 different ways:
Dividend Payments A fund may earn income in the form of dividends and interest on the securities
in its portfolio. The fund then pays its shareholders nearly all of the income (minus disclosed expenses)
it has earned in the form of dividends.
Capital Gains Distributions They are paid from any profits the fund realizes from selling
investments. The price of the securities a fund owns may, increase. When a fund sells a security that
has increased in price, the fund has a capital gain. At the end of the year, most funds distribute these
capital gains (minus any capital losses) to investors
Increased NAV If the market value of a fund's portfolio increases after deduction of expenses and
liabilities, then the value (NAV) of the fund and its shares increases. The higher NAV reflects the
higher value of investor investment.
Advantages & Disadvantages of Mutual Fund:
Advantages:

PROFESSIONAL MANAGEMENT: One avail the services of experienced and skilled professionals
who are backed by a dedicated investment research team which 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 crosssection of
industries and sectors. This diversification reduces the risk because seldom do all stocks decline at the
same time and in the same proportion. Investor can achieve this diversification through a Mutual Fund
with far less money than investor can do on his/her own.
CONVINIENT ADMINISTRATION: Investing in a Mutual Fund reduces paperwork and helps
investor avoid many problems such as bad deliveries, delayed payments and unnecessary follow up
with brokers and companies. Mutual Funds save investors 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 COST: 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.
LIQUIDITY: In open-ended schemes, one can get investor money back promptly at Asset Value (NAV)
related prices from the Mutual Fund itself. With close-ended schemes, investor can sell units on a stock
exchange at the prevailing market price or avail of the facility of repurchase through Mutual Funds at
NAV related prices which some close-ended and interval schemes offer investor periodically.
TRANSPARECY: Investor get regular information on the value of the investment in addition to
disclosure on the specific investments made by ones scheme, the proportion invested in each class of
assets and the fund manager's investment strategy and outlook.
WELL REGULATED: All Mutual Funds are registered with SEBI and they function within the
provisions of strict regulations designed to protect the interests of investors. The operations of Mutual
Funds are regularly monitored by SEBI.

52

Disadvantages:

COSTS DESPITE NEGATIVE RETURNS:

Investors must pay sales charges, annual fees, and other expenses regardless of how the fund performs.
And, depending on the timing of their investment, investors may also have to pay taxes on any capital
gains distribution they receive even if the fund went on to perform poorly after they bought shares.

LACK OF CONTROL: Investors typically cannot ascertain the exact make-up of a fund's portfolio at
any given time, nor can they directly influence which securities the fund manager buys and sells or the
timing of those trades.

PRICE UNCERTAINTY: With an individual stock, investor can obtain real-time (or close to real
time) pricing information with relative ease by checking financial websites or by calling broker.
Investor can also monitor how a stock's price changes from hour to hour or even second to second.
By contrast, with a mutual fund, the price at which investor purchase or redeem shares will typically
depend on the fund's NAV, which the fund might not calculate until many hours after investor has
placed investor order. In general, mutual funds must calculate their NAV at least once every business
day.

53

SWOT ANALYSIS OF MUTUAL FUND:

Strengths

Weakness

There is a stable average rate of return

Cannot be provided as a collateral security

Functions of the mutual fund are regulated by

SEBI, thus are well governed

Long term capital losses cannot be set off

against capital gains

High liquidity is there as invested money can

be withdrawn at any point of time

Suitable for no risk tolerance investors

Long term capital gains are also tax free

Maturity amount not known as rate of return

fluctuates

It is an easy way of investment as paper work is

minimum

Payment of entry and exit load and high

maintenance charges

No charges for early withdrawal

Allows small investors to invest in capital

market, with professional management

Short term capital losses can be set off against

short term capital gains

Opportunities

Threats

Investors can write cheques out of their money

market mutual fund account

Fixed deposits are safer and more stableregulated by RBI

Suitable for investors and corporate to park

their surplus funds for a short period of time

Investors looking for higher return will prefer

investing in Equity market

Allows investors with small amount of money

to invest in a number of schemes

Investors ready to make long term investments

will look at land, government security as other
options as they are safer and can be provided as
a collateral security

54

4.3 LIFE INSURANCE

INTRODUCTION:
Life insurance is a contract under which the insurer (Insurance Company) in consideration of a premium paid
undertakes to pay a fixed sum of money on the death of the insured or on the expiry of a specified period of
time whichever is earlier. Life insurance is also known as Life Assurance.
It is a risk measure taken by an individual for the benefits of his/her dependents in his/her absence. As life is
uncertain, an individual by taking an insurance policy gives a cushion to his/her beneficiary/nominee where
they are entitled for an insured value in case of the insured untimely death.
IRDA: Insurance Regulatory & Development Authority (IRDA) is an autonomous apex statutory body which
regulates and develops the Insurance Industry in India. It was constituted by a Parliament of India act called
Insurance Regulatory & development Authority Act, 1999 & duly passed by the government of India. All life
insurance companies in India have to comply with the strict regulations laid out by IRDA.
The IRDA was incorporated as a statutory body in April, 2000. The key objectives of the IRDA include
promotion of competition so as to enhance customer satisfaction through increased consumer choice and lower
premiums, while ensuring the financial security of the insurance market.
At present, 23 life insurance companies are operating in the country.
A life insurance contract is made up of legal provisions, investor application (which identifies who is he and
his medical declarations), and a policy specifications page that describes the policy investor has selected,
including any options and riders that investor has purchased in return for an additional premium. Provisions
describe the conditions, rights, and obligations of the parties to the contract (e.g., the grace period for payment
of premiums, etc).
Mandatory Documents needed to be attached with Insurance form by insured are:
1.
2.
3.
4.

Identification Proof
2.Address Proof
3.Age Proof
4.Income Proof

BENEFITS OF LIFE INSURANCE:

Protection against untimely death:

Life insurance provides protection to the dependents of the life insured and the family of the assured in
case of his untimely death. The dependents or family members get a fixed sum of money in case of
death of the assured.

Saving for old age:

After retirement the earning capacity of a person reduces. Life insurance enables a person to enjoy
peace of mind and a sense of security in his/her old age.

Initiate Investments:
It encourages and mobilizes the public savings and channelizes the same in various investments for the
economic development of the country. Life insurance is an important tool for the mobilization and
investment of small savings.

55

Credit worthiness:
Life insurance policy can be used as a security to raise loans. It improves the credit worthiness of
business.

Social security:
Life insurance is important for the society as a whole also. Life insurance enables a person to provide
for education and marriage of children and for construction of house. It helps a person to make
financial base for future.

Tax benefit:
It provides tax benefit.

TYPES OF LIFE INSURANCE:

Fig: 14
Term Plan:
Term plan provides life insurance coverage for a specified term. The policy does not accumulate cash value.
Term is generally considered "pure" insurance, where the premium buys protection in the event of death and
nothing else.
Term assurance policy has the following features:
It provides a risk cover only for a prescribed period. Usually these policies are short-term plans and the
term ranges from one year onwards. If the policyholder survives till the end of this period, the risk
cover lapses and no insurance benefit payment is made to him.
The amount of premium to be paid for these policies is lower than all other life insurance policies. As
savings and reserves are not accumulated under this policy, it has no surrender value and loan or paidup values are not allowed on these policies.
This plan is most suitable for those who are initially unable to pay high premium.
Hence there is no element of savings or investment in such a policy. It is a 100 per cent risk cover. It simply
means that a person pays a certain premium to protect his family against his sudden death. He forfeits the
amount if he outlives the period of the policy. This is the cheapest insurance available.

56

Permanent /Traditional Life Insurance:

It provides coverage throughout lifetime, unless one fails to pay premiums. At first, premiums are usually higher
than for term life insurance policies, but may be lower than term premiums in later years. Permanent life
insurance policies generally accumulate a cash value that is either added to the face value of policy and paid out
upon death, or returned to insured if he/she cancels policy. Most policies will also allow taking a loan against the
cash value of policy.
The four basic types of permanent insurance are whole life, universal life, limited pay and endowment.

Whole life insurance: This policy runs for the whole life of the assured. The sum assured becomes
payable to the legal heir only after the death of the assured. Whole life insurance provides lifetime
death benefit coverage for a level premium in most cases. Part of the insurance contract stipulates that
the policyholder is entitled to a cash value reserve, which is part of the policy and guaranteed by the
company. This cash value can be accessed at any time through policy loans and are received income tax
free. Policy loans are available until the insured's death. If there are any unpaid loans upon death, the
insurer subtracts the loan amount from the death benefit and pays the remainder to the beneficiary
named in the policy.
The advantages of whole life insurance are guaranteed death benefits, guaranteed cash values, fixed,
predictable annual premiums and mortality and expense charges that will not reduce the cash value of
the policy. The disadvantages of whole life are inflexibility of premiums and the returns in the policy
may not be competitive with other savings alternatives. The death benefit can also be increased through
the use of policy dividends, though these dividends cannot be guaranteed and may be higher or lower
than historical rates over time.

Universal life insurance: Universal life insurance (UL) is a relatively new insurance product, intended
to combine permanent insurance coverage with greater flexibility in premium payment, along with the
potential for greater growth of cash values. .
Universal life insurance addresses the perceived disadvantages of whole life namely that premiums
and death benefit are fixed. With universal life, both the premiums and death benefit are flexible.
Flexible death benefit means the policy owner can choose to decrease the death benefit. The death
benefit could also be increased by the policy owner, but that would typically require the insured to go
through a new underwriting.
One of two options of universal life policies- Option B-pay the cash value in addition to the face value
upon death. A second option with universal policies--Option A--does not. In fact, the cash value is used
to pay the final death benefit.

Limited-pay: Another type of permanent insurance is Limited-pay life insurance, in which all the
premiums are paid over a specified period after which no additional premiums are due to the policy in
force.

Endowment Life Policy: In this policy the insurer agrees to pay the assured or his nominees a
specified sum of money on his death or on the maturity of the policy whichever is earlier. The premium
for endowment policy is comparatively higher than that of the whole life policy. The premium is
payable till the maturity of the policy or until the death of the assured whichever is earlier. It provides
protection to the family against the untimely death of the assured.

57

It is a combination of risk cover and financial savings. Endowment policies are the most popular
policies in the world of life insurance.

In an Endowment Policy, the sum assured is payable even if the insured survives the policy term.

If the insured dies during the tenure of the policy, the insurance firm has to pay the sum assured
just as any other pure risk cover.

A pure endowment policy is also a form of financial saving, whereby if the person covered
remains alive beyond the tenure of the policy. He gets back the sum assured with some other
investment benefits.
The cost of such a policy is slightly higher but worth its value.

Related products:

Joint Life Insurance: This policy is taken on the lives of two or more persons simultaneously. Under
this policy the sum assured becomes payable on the death of any one of those who have taken the joint
life policy. The sum assured will be paid to the survivor(s).

Group Insurance: Group life insurance is a plan of insurance under which the lives of many persons
are covered under one life insurance policy. However, the insurance on each life is independent of that
on the other lives. Usually, in group insurance, the employer secures a group policy for the benefit of
his employees. Insurer provides coverage for many people under single contract.

Money Back Policy: These policies are structured to provide sums required as anticipated expenses
(marriage, education, etc) over a stipulated period of time A portion of the sum assured is payable at
regular intervals. On survival the remainder of the sum assured is payable. The premium is payable for
a particular period of time

Annuities and Pension: In an annuity, the insurer agrees to pay the insured a stipulated sum of money
periodically. The purpose of an annuity is to protect against risk as well as provide money in the form
of pension at regular intervals.

Child Life Insurance: Child life insurance is a form of permanent life insurance that insures the life of
a minor. It is usually purchased to secure inexpensive and guaranteed insurance for the lifetime of the
child. It offers guaranteed growth of cash value when the child is in their early twenties. Child life
insurance policies typically offer the owner the option to purchase, or in some cases obtain additional
guaranteed insurance when the child reaches maturity.

Policy Begins:
Childs Age=8 years

Father pays premium for 4 years.

58

Father dies:
Childs Age=12 years

Death Benefits are payable.

Insurer pays the rest premium for 6
years

Policy Matures:

Maturity Benefits are payable.

Childs Age=18 years

Fig: 15
Investment policies:
Unit Linked Insurance Policy: These are unique insurance plans which are basically a mutual fund and term
insurance plan rolled into one. The investor doesn't participate in the profits of the plan, but gets returns based
on the returns on the funds he or she had chosen. The premium paid by the customer is deducted by initial
charges by the insurance companies and the remaining amount is invested in a fund by converting the amount
into units based upon the NAV of the fund on that date.
Mortality charges, fund management charges and a few other charges are deducted in regular intervals by way
of cancellation of units from the invested funds.
A Unit Linked Insurance Plan (ULIP) offers high flexibility to the customer in form of higher liquidity and
lower term. The customer has the choice of choosing the funds of his choice from whatever his/her insurance
provider has to offer. He can switch between the funds without the necessity to opt out of the insurance plan.
ULIPs got extremely popular in the heyday of the equity bull run in India, as the returns generated in equity
linked funds were beating any kind of debt or fixed return instrument.

Fees and Charges for Life Insurance

Premium loads/sales charges These compensate the insurance company for sales expenses, state and
local taxes. These charges are deducted from insured premium payment before it is applied to the
policy.

Administration fees These are used to pay the costs of maintaining the policy, including accounting
and record keeping. Administration fees usually are deducted from insured policy value once a month.

Mortality and expense risk charges When a policy is issued, the insurance company assumes the
insured person will live to a certain age based on their current age, gender and health conditions. This
charge compensates the insurance company in the case the insured person doesnt live to the assumed
age. It is generally charged once a month.

Cost of insurance This is the cost of actually having insurance protection. It is based on the insured
persons age, gender, health and death benefit amount. Cost of insurance is also usually charged once a
month

59

Surrender charges This charge is deducted from investor cash value if insured surrender (terminate)
his/her policy during his/her surrender charge period. Investor need to check the length of surrender
charge period when evaluating a policy to buy.

Fund management fees These charges compensate the fund managers for their work. Fund
management fees are usually deducted from the price paid for the shares of underlying fund options,
and not directly from insured cash value.

RIDERS:
Riders are modifications to the insurance policy added at the same time the policy is issued. These riders change
the basic policy to provide some feature desired by the policy owner. A common rider is accidental death rider.
Another common rider is a premium waiver, which waives future premiums if the insured becomes disabled.
There are many other riders such as critical illness rider, family income benefit rider etc.

TAXATION:
Premiums paid by the policy owner are deductible from the taxable income of the policy owner under section 80
(C) up to a maximum limit of Rs.1, 00,000. Any proceeds from an Insurance Plan in form of maturity proceeds,
claims, partial withdrawal is exempt from taxation under section 10 (10) D of Income Tax law of India

SWOT ANALYSIS OF LIFE INSURANCE:

Strengths:

Weakness:

60

Provides high level of security- guaranteed

by the issuing authority

Not affected by market volatility except

ULIP

Sum assured at maturity is known

Investor can decide the maturity period and

the sum of premium to be paid

Tax benefit is availed twice- once when

premium is paid and other on maturity
benefits

Fixed rate of return on premiums

Does not provide any liquidity excluding

ULIP

A lot of paper work has to be done when

entering the insurance contract

If a wrong claim is made on the policy,

penalty has to be paid

Opportunity:

Threats:

Only investment avenue which offers life risk

cover

Unit linked insurance plan are market linked

and therefore prone to market volatility

It sustains the economic loss suffered by the

family in the uneventful death of an income
earning person of the family

One may not be able to maintain the risk

cover commensurate with his/her human life
value

Unit linked insurance plans also offer market

linked returns

Helps in developing investment habit among

customers

4.4 GOLD
INTRODUCTION
Gold has been used throughout history as money and has been a relative standard for currency equivalents
specific to economic regions or countries, until recent times. The Indian government and the central banking
authority of India, the Reserve Bank of India (RBI) are not too happy about the fact that Indians can't get over
their fascination for physical gold.
The Indian government on its part has tried very hard to make physical gold less attractive by raising duties on
gold as well as forbidding banks from lending money to its customers for the purchase of gold.

61

Even Non Bank Financial Companies (NBFCs) who till last year were gung ho about lending money against
gold jewellery, have been snubbed. NBFCs can now only lend up to 60% of the value of gold that is being
offered by the borrower as against 80% to 85% permitted earlier.
However, this is not a reason to cheer simply because the import of gold makes it a large contributor
to the current account deficit of the country and in turn puts pressure on the rupee.
Gold imports in the year 2011-2012 rose to the level of USD 62 billion as compared to a total of $43 billion in
the previous year and this has had the current account deficit soaring to 4.2% of the GDP, which is a record 30year high!

Other-Forms-of-Physical-Gold
Gold in its physical form, invest in gold coins or gold bars. This is hallmark gold. However, the disadvantage of
buying gold in the form of coins and bars is that while banks sell such products they do not buy it back from
their customers. The other problem is that client has to buy this form of gold at least at a 5% to 10% premium.

Gold ETFs
A gold exchange-traded fund (or GETF) is an exchange-traded fund (ETF) that aims to track the price of gold.
Gold ETFs are units representing physical gold which may be in paper or dematerialized form. These units are
traded on the Exchange like a single stock of any company. Gold ETF's are intended to offer investors a means
of participating in the gold bullion market without the necessity of taking physical delivery of gold, and to buy
and sell that participation through the trading of a security on a stock exchange.
Only need is a Demat account and client can start with his/her investment. Gold ETFs also come with a
systematic investment plan (SIP) option so that anyone can choose to put in a monthly sum into these schemes,
just as one do with any other fund.

62

SWOT ANALYSIS OF GOLD:

Strengths

It is worldwide accepted

Has multiple usage

Does not involve a tedious investment

process

Weakness

Opportunity

Threats

Offers low rate of return

Can be provided as a collateral

security

Land, which provides a higher rate or return

as of today

Quality of gold provided can be below the

standard

Bank and financial institutions hesitate in

investing in gold because cost of

63

5. Research

64

5.1 METHODOLOGY
TITLE: To ascertain the investment pattern of people of Raipur and carry out comparative analysis of their
preferences with respect to share market, life insurance, mutual fund and gold.

DEFINITION OF THE RESEARCH PROBLEM: The statement of the problem under study is to analyze the
investment pattern of investors and the popularity of different financial instruments for investment. This
problem tries to identify the investors perception and their risk taking ability while investing in different
products of market.

REVIEW THE LITERATURE: The material for this study was collected from various internet sites, journals
and books by various authors. It is an extensive survey of all available past studies relevant to the field of
investigation.
On a previously conducted research it has been stated that Investment is the sacrifice of certain present value for
the uncertain future reward. It entails arriving at numerous decisions such as type, mix, amount, timing, grade
etc of investment and disinvestments. Further such decisions making has not only to be continuous but rational
too. Instead of keeping the savings idle investors may like to use savings in order to get return on it in the future,
which is known as investment. There are various investment avenues such as Equity, Mutual Funds, Gold
Bonds, Insurance, and Bank Deposit etc. There are various factors which affects investors portfolio such as
annual income, government policy, natural calamities etc.
In simple words investment means buying securities or other monetary or paper (financial) assets in the money
markets or capital markets, or in fairly liquid real assets, such as gold as an investment, real estate, or
collectibles. Valuation is the method for assessing whether a potential investment is worth its price. Types of
financial investments include shares or other equity investment, and bonds (including bonds denominated in
foreign currencies). These investments assets are then expected to provide income or positive future cash flows,
but may increase or decrease in value giving the investor capital gains or losses Features of an investment
programme In choosing specific investments, investors will need definite ideas regarding features, which their
investment avenue should possess. These features should be consistent with the investors general objectives and
in addition, should afford them all the incidental conveniences and advantages, which are possible under the
circumstances. The following are the suggested features as the ingredients from which many successful
investors compound their selection policies.

Safety of principal: The investor, to be certain of the safety of principal, should carefully review the
economic and industry trends before choosing the types of investment. Errors are avoidable and
therefore, to ensure safety of principal.

The investor should consider diversification of assets. Adequate diversification involves mixing
investment commitments by industry, geographically, by management, by financial type and maturities.
A proper combination of these factors would reduce losses.

Liquidity: Even investor requires a minimum liquidity in his investment to meet emergencies. Liquidity
will be ensured if the investor buys a proportion of readily saleable securities out of his total portfolio.

65

He may therefore, keep a small proportion of cash, fixed deposits and units which can be immediately
made liquid investments like stocks and property or real estate cannot ensure immediate liquidity.
Investor: Investor is a person or an organization that invest money in various investment sources for specific
objective. Attitude of investment is different in each alternative. E.g. financial market have different attitude
towards risk and return. Some investors are risk averse, while some have an affinity of risk. The risk bearing
capacity of investor is a function of personal, economical, environment, and situational factors such as income,
family size, expenditure pattern, and age. A person with higher income is assumed to have higher risk- bearing
capacity.

FORMULATION OF HYPOTHESIS: The null & alternate hypotheses for the research are as follows:
H0 (Null Hypothesis) - There is a relationship between demographic factors such as (age, gender & occupation)
& investment pattern of people.
H1 (Alternate Hypothesis) - There is no relationship between demographic factors such as (age, gender &
occupation) & investment pattern of people.

RESEARCH DESIGN & METHODS: Since the study is mainly related to know the investment patterns of
the investors on different products of companies. This is a descriptive research where survey method is adopted
to collect primary information from the investors & find out which financial instruments are prevalent in Raipur
region. The research also contains features of Explanatory research as the research aims to establish the
relationship or association or interdependence between demographic factors (Age, Gender, & Occupation) &
investment pattern. The other details about the research design are as follows:

Research Method: Survey Method

Research Technique: Questionnaire
Type of Questionnaire: Structured

DATA COLLECTION: The primary data was collected by a survey based on the questionnaire. It was
formulated on the basis of information carefully gathered by us about the various mindsets of the people. This
questionnaire was mainly formulated to target the common man to see his perception and awareness of various
investment options available. The number of respondents targeted was around 100 and the survey was confined
to Raipur city.
The secondary data (factsheets) was collected directly from the companies and their websites and internet
surveys. Also a lot of similar research studies and journals have been referred to.

66

DATA ANALYSIS:
Chi square test is used in this research for testing our hypothesis. The analysis of the research is as follows:

As per Gender:

Observed Frequencies: (f0)

Options
Gender
Male
Female

Equity

Mutual fund

Life insurance

Gold

20
4

29
8

66
21

6
2

Expected Frequencies: (fe)

Expected frequencies for all cells are calculated by using formula: fe = (column marginal)(row marginal)/N
Example: Here Males interested in Equity expected frequency is = [(20+4) * (20+29+66+6)]
(20+4+29+8+66+21+6+2)
= (24*121) / 156
=18.61
Similarly, expected frequencies for all cells can be derived & they are as follows:
Options
Gender
Male
Female

Equity

Mutual fund

Life insurance

Gold

18.61
5.38

28.69
8.301

67.48
19.51

6.205
1.79

To find the value of 2 we used formula:

2 = (f0 - fe)2 /fe

So for males interested in equity are = (20 18.61)2/18.61

= 0.10382

Thus we find out the values for all cells & they are as follows:
Options
Gender
Male
Female

Equity

Mutual fund

Life insurance

Gold

0.1038
0.3539

0.0033
0.0109

0.032
0.1123

0.0067
0.0246

After adding all the values, we get total value of 2 = 0.6745

To find Degrees of Freedom we used formula: df = (r 1)(c 1)

where, r = the number of rows

c = the number of columns
Here, df = (2-1)(4-1) = 3

67

Then we refer to 2 distribution table we find out that the nearest probabilities are between 0.90 (2=0.58) &
0.80 (2=1.01) for degree of freedom =3, so we interpolate that our probability P1=0.85

As per Occupation:

Observed Frequencies: (f0)

Options
Occupation
Public
Private
Businessmen
Professionals

Equity

Mutual fund

Life insurance

Gold

5
11
3
5

15
13
2
7

45
18
9
15

6
4
2
5

Expected Frequencies: (fe)

Similarly expected frequencies for all cells can be derived & they are as follows:
Options
Occupation
Public
Private
Businessmen
Professionals

Equity

Mutual fund

Life insurance

Gold

10.32
6.64
2.32
4.65

15.92
10.31
3.58
7.17

37.43
24.25
8.43
16.87

7.31
4.73
1.64
3.29

To find the value of 2 we used formula:

2 = (f0 - fe)2 /fe

Thus we find out the values for all cells & they are as follows:
Options
Occupation
Public
Private
Businessmen
Professionals

Equity

Mutual fund

Life insurance

Gold

2.74
2.77
0.19
0.026

0.053
0.70
0.69
0.004

1.53
1.61
0.038
0.207

0.23
0.11
0.079
0.88

After adding all the values, we get total value of 2 = 11.84

To find Degrees of Freedom we used formula: df = (r 1)(c 1)
Here df=(4-1)(4-1 )= 9
Then we refer to 2 distribution table we find out that the nearest probabilities are between 0.90 (2=4.16) &
0.10 (2=14.16) for degree of freedom =9, so we interpolate that our probability=0.80
P2=0.8

68

As per Age:

Observed Frequencies: (f0)

Options
Age in years
18-30
31-50
50+

Equity

Mutual fund

Life insurance

Gold

8
12
4

10
22
5

23
54
10

6
9
2

Expected Frequencies: (fe)

Similarly expected frequencies for all cells can be derived & they are as follows:
Options
Age in years
18-30
31-50
50+

Equity

Mutual fund

Life insurance

Gold

6.83
14.10
3.05

10.53
21.75
4.70

24.78
51.14
11.07

4.84
9.99
2.16

To find the value of 2 we used formula:

2 = (f0 - fe)2 /fe

Thus we find out the values for all cells & they are as follows:
Options
Age in years
18-30
31-50
50+

Equity

Mutual fund

Life insurance

Gold

0.200
0.3127
0.2959

0.02
0.002
0.019

0.127
0.0559
0.1034

0.27
0.098
0.011

To find Degrees of Freedom we used formula: df = (r 1)(c 1)

Here df=(3-1)(4-1 )= 6
After adding all the values of 2 we get total value of 2 = 1.53
Then we refer to 2 distribution table we find out that the nearest probabilities are between 0.975 (2=1.23) &
0.95 (2=1.63) for degree of freedom= 6, so we interpolate that our probability=0.94
P3=0.94
So we can summarise that:
P1=0.85
P2=0.8
P3=0.94
As all the probabilities are greater than the critical value i.e. 0.05 thus it is clear that the null hypothesis
that is There is a relationship between demographic factors such as (age, gender & occupation) &
investment pattern of people can be accepted.

69

5.2 TARGET MARKET SEGMENT PROFILE

For Consumers
Public Sector:

Raipur Municipal Corporation: The Nagar Nigam of Raipur, a local body for governance provides the
entire basic requirement to the citizens of Raipur. The main functions of the Nagar Nigam are
constructing health centres, educational institutes, schools and periodic maintenance of the houses.

Public Works Department: Facilitates easy & effective interaction with citizen for P.W.D related
information. It also facilitates interaction with Business community mainly Engineers, contractors
architects. It also facilitates informative easy interaction with other Government & Semi Government
Organization.

Prasar Bharti: It is India's largest public broadcaster. It is an autonomous body set up by an Act of
Parliament and comprises Doordarshan television network and All India Radio which were earlier
media units of the Ministry of Information and Broadcasting.

Income Tax office: The vision of the Income Tax Department (ITD) is to be a partner in the nation
building process through progressive tax policy, efficient and effective tax administration and improved
voluntary compliance. This will be achieved by an enabling policy environment and augmenting the
revenue mobilisation apparatus for optimum revenue collection under the law, while maintaining
taxpayer confidence in the system.

Public Health & Engineering Department: The Public Health Engineering Department (PHED) is a
public agency in Chhattisgarh and India that is responsible for rural water supply.
During natural disasters the agency has the responsibility to get drinking water to the public

Private Sector:

Bajaj Auto: Bajaj Auto Limited is an Indian motorised vehicle-producing company. Bajaj Auto is a part
of Bajaj Group. It was founded by Jamnalal Bajaj at Rajasthan in the 1930s.

Times of India: The Times of India (TOI) is an Indian English-language daily newspaper. It is the most
widely read English newspaper in India.

Mahindra & Mahindra: Mahindra & Mahindra Limited is an Indian multinational automobile
manufacturing corporation headquartered in Mumbai, Maharashtra, India. It is one of the largest
vehicle manufacturers by production in the Republic of India.

Thomas Cook: Thomas Cook Group plc is a British global online/offline travel company created on 19
June 2007 by the merger of Thomas Cook AG and MyTravel Group plc.

Western Union: The Western Union Company is a financial services and communications company
based in the United States. Western Union has several divisions, with products such as person-toperson money transfer, money orders, business payments and commercial services.

Orient Fans: Orient Fans is one of Indias leading brands in fans and lighting solutions. A household
name for decades now, Orient Fans has emerged as the largest manufacturer and exporter of fans in the
country. Range comprises of Ceiling Fans, Table Fans, Wall Mounted Fans, Stand Fans, Exhaust Fans

70

and Multi Utility Fans. Our Lighting solutions include energy-saving CFLs, Fluorescent Tube lights
and contemporary Consumer Luminaries.

Vespa: Vespa is an Italian brand of scooter manufactured by Piaggio. The name means wasp in Italian.

TVS: TVS Motor Company Limited, is part of TVS Group, manufactures motorcycles, scooters,
mopeds and auto rickshaws in India. TVS was established by Thirukkurungudi Vengaram Sundaram
Iyengar.

Celfrost: Celfrost Innovations Pvt. Ltd. is a company founded by a group of professionals who have
dedicated its formative years creating the coolest commercial refrigeration & food-service products
venture in India.

Suzuki Motor Corporation: is a Japanese multinational corporation headquartered in Minami-ku,

Hamamatsu, Japan, which specializes in manufacturing automobiles, four-wheel drive vehicles,
motorcycles, all-terrain vehicles (ATVs), outboard marine engines, wheelchairs and a variety of other
small internal combustion engines.

MRF Tyres: Madras Rubber Factory is an India-based company engaged in manufacturing, distribution
and sale of tyres for various kinds of vehicles. The company is primarily engaged in the manufacture of
rubber products, such as tyres, tubes, flaps, tread rubber and conveyor belt. It exports to more than 65
countries.

.
Business men:

Medical shop owners

Jewellery shop owners

Owner of Icy-Spicy

Owner of cream n spicy

Professionals:

Teachers
CA

For Firms:
Broking Firms:

71

Sharekhan is a
leading online broker in India. Sharekhan is actually a brand name from 'SSKI Securities'. Sharekhan Limited
offers online security broking and portfolio services to institutions and large corporate houses as well as
individual investors.

In 1944, Mr. Prabhudas Lilladher Sheth registered a stock broking firm with a vision of rising up to become
India's leading financial services provider. The wide range of services includes Equity & Derivative Broking,
Investment Banking, Corporate Advisory, PMS, Online Trading, Loan Against Shares, Mutual Funds, IPO's and
Insurance.

Nirmal Bang Securities Private Limited, a retail broking

house, provides an online share trading platform to customers to trade on equities, derivatives, commodities,
currency derivatives, insurance, depository services, and subscription to initial public offerings and mutual
funds in India. The company offers daily and company reports, stock ideas, and sector updates. It also provides
franchising opportunities to individual to use its infrastructure by being its channel partners. Nirmal Bang
Securities was founded in 1986 and is based in Mumbai, India.

Religare Securities Limited (RSL), the broking arm of REL, offers services such as equity broking (cash and
derivatives segments), currency futures and options broking and depository participant services. It is affiliated
with the country's leading exchanges (NSE and BSE) and is a depository participant with NSDL and CDSL.

72

Reliance Securities comes

from the house of Reliance Capital, one of Indias leading & prominent financial houses. Reliance Securities
endeavors to change the way investors transact in equities markets and avails services. It provides customers
with access to Equity, Derivatives, Mutual Funds & IPOs. It also offers secured online share trading platform
and investment activities in secure, cost effective and convenient manner. To enable wider participation, it also
provides the convenience of trading offline through variety of means, including Call & Trade, Branch dealing
Desk and its network of affiliates.

Mutual Funds:

73

HDFC Asset Management Company Ltd (AMC) was incorporated under the Companies Act, 1956, on
December 10, 1999, and was approved to act as an Asset Management Company for the HDFC Mutual Fund by
SEBI vide its letter dated July 3, 2000. The paid up capital of the AMC is Rs. 25.241 crore as on March 31,
2013.

Reliance Mutual Fund ('RMF'/ 'Mutual Fund') is one of Indias leading Mutual Funds, with Average Assets
Under Management (AAUM) of Rs. 90,636 Crores and an investor count of over 58.42 and 64.53 Lakh folios.
(AAUM and investor count as of Oct to Dec '12). Reliance Mutual Fund, a part of the Reliance Group, is one of
the fastest growing mutual funds in India. RMF offers investors a well-rounded portfolio of products to meet
varying investor requirements and has presence in 179 cities across the country. Reliance Mutual Fund
constantly endeavors to launch innovative products and customer service
initiatives to increase value to investors. Reliance Capital Asset
Management Limited (RCAM) is the asset manager of Reliance Mutual
Fund. RCAM is a subsidiary of Reliance Capital Limited (RCL).

With 25 years of rich experience in fund management, SBI Funds Management Pvt. Ltd. brings forward our
expertise by consistently delivering value to our investors. The mission of SBI MUTUAL FUND has been to
establish Mutual Funds as a viable investment option to the masses in the country. Working towards it, SBI
MUTUAL FUND Co. developed innovative, need-specific products and
educated the investors about the added benefits of investing in capital
markets via Mutual Funds.

Backed by one of the most trusted and valued brands in India, Tata
Mutual Fund has earned the trust of lakhs of investors with its consistent performance and world-class service.
Tata Mutual Fund manages around 20,882 crores (average AUM for the quarter of April June 2013) worth of
assets across its varied offerings. Tata Mutual Fund offers an investment option for everyone, whether investor
is a businessman or salaried professional, a retired person or housewife, an aggressive investor or a conservative
capital builder.

74

ICICI Prudential Asset Management Company Ltd. (IPAMC/ the Company) is the joint venture between ICICI
Bank, a well-known and trusted name in financial services in India and Prudential Plc, one of UKs largest
players in the financial services sectors. IPAMC was incorporated in the year 1993. The Company in a span of
over 18 years since inception and just over 13 years of the Joint Venture has forged a position of pre-eminence
in the Indian Mutual Fund industry as the third largest asset management company in the country, contributing
significantly to the growth of the Indian mutual fund industry.

Life Insurance Industry:

is the insurance group & investment company in India. Its a state-owned

company where government of India has 100% stake. The slogan of LIC is Yogakshemam Vahamyaham
means Your welfare is our responsibility.

INDUSTRY: Financial services

FOUNDED: 1 September 1956
HEADQUARTER: Mumbai, India

75

PRODUCTS: Life & Health Insurance,

Investment management,
Mutual Fund.

(BSLI) is a joint venture between the Aditya Birla Group & Sun Life Financial
Inc., one of the leading international financial services organization from Canada. It was established in 2000. It
was the first insurance company to introduce free look period and same was made mandatory by IRDA for
all other Life Insurance companies. Additionally Birla Sun Life Insurance pioneered the launch of Unit Linked
Life Insurance Plans amongst the private players in India. BSLI is known for its innovations & offers a
complete range of offerings comprising protection solutions, childrens future solutions, wealth with protection,
health & wellness as well as retirement solutions for its retail customers.
ESTABLISHED: 2000
REGISTERED OFFICE: Mumbai, India

Bajaj Allianz Life Insurance Company Limited is a joint venture between

Bajaj Finserv Limited and Allianz SE. Bajaj Allianz Life Insurance offers a range of insurance products for
financial planning and life insurance.

TYPE: Public Listed Company

INDUSTRY: Insurance
FOUNDED: 2001

is a joint venture between ICICI Bank & Prudential Plc, a

leading international financial services group headquartered in the United Kingdom. ICICI Prudential begins
operation in December 2000.

(RLIC) is Private Sector Life Insurance Company. It is a part of Reliance

Capital of Reliance Anil Dhirubhai Ambani Group. Nippon Life Insurance Company acquired 26% interest in
equity share capital of the Company effective from October 7, 2011.

TYPE : Private limited company

INDUSTRY: LIFE INSURANCE
HEADQUARTER: Navi Mumbai, India

76

Gold:

Tanishq is a prominent jewellery brand of India. It pioneered the concept of branded

jewellery and ornaments in India. It is a division of Titan Industries Limited, a company promoted by the Tata
Group, one of India's largest conglomerates. Tanishq started in 1994 and challenged the established family
jeweller system prevalent in India. They have set up production and sourcing bases with thorough research of
the jewellery crafts of India. In November 2012, Tanishq reached a landmark when it opened its 150th
showroom in India

offers customers the unique opportunity to start accumulating physical gold and
gold related schemes

77

5.3 QUESTIONNAIRE DESIGN

1.

For Consumers
Please fill the following information and tick (

) the appropriate options:

NAME: .....
CONTACT NUMBER: .......
OCCUPATION: ......................................................................................

1) Which of the following investments are your areas of interest?

Equity Derivatives
Mutual Fund
(
Insurance
Gold
Portfolio Management/ Fund Management
(

)
)

(
(

)
)
)

2) Do you have any active DEMAT Account?

If Yes - Please specify company name..........
If No - Do you wish to have one ..
3) What additional services would you seek from your broking firm?
Lower Brokerage
(
)

78

Online Trading Access

Offline Trading
Research Tips
Dealer Guide
Limits

(
(
(
(

4) Which segment of trading are you interested in?

Delivery/Long Term
Intraday/ Same Day Position Square off
Medium Term / Less than 1 year

)
)
)
)

)
(
(

)
)

5) Since how long have you been dealing in the stock market?
Ans: .......................................................................................................
6) What is the current brokerage being offered to you?
Ans: .
7) Are your basic requirements fulfilled?
If Yes - Specify best services you are availing
firm.

from

your

current

broking

If No - Would you like to be associated with any other broking firm?

.
8) If you are not associated with market then what is the reason behind it?

Ignorance
(
)
Risk factor associated with it
(
)
Others............................................................................

9) Do you have any Life Insurance Plans?

Term Plan
(
)
ULIP (Unit Linked Insurance Plan)
(
Traditional
(
)
Others............................................................................

10) Have you ever invested in Mutual Funds?

Yes
No

(
(

)
)

11) Do you wish to have personal services for managing your funds? (PORTFOLIO MANAGEMENT)

Yes
No

(
(

)
)

12) Have you invested in physical Gold as well as Gold related schemes?

Yes
No

(
(

)
)

79

DATE........................

2.

For Companies:
A) Please fill the details regarding your Broking firm

Demat A/c opening charges..

Name of the software used ..

Software installation charges.

Annual Maintenance charges.

Extent of limit (both cash & shares as collateral) .

Name of the banks associated with.

Provides trade service in which sector (Equity, Derivative, Commodity & Currency)
....

Penalty charges..

Does the broking firm provides research calls to the clients..

Brokerage.

Transaction Reports provided to clients or not & in which mode (Online/offline)

80

Special Features/ Additional services provided by your broking firm:

..

..

B) Please fill the details regarding the most preferred Mutual Funds by people of Raipur.
1.

HDFC:
1)
2)
3)
4)
5)

2.

SBI:
1)
2)
3)
4)
5)

3.

.......................................................
.......................................................
.......................................................
.......................................................
.......................................................

ICICI:
1)
2)
3)
4)
5)

4.

.......................................................
.......................................................
.......................................................
.......................................................
.......................................................

.......................................................
.......................................................
.......................................................
.......................................................
.......................................................

RELIANCE:
1)
2)
3)
4)

.......................................................
.......................................................
.......................................................
.......................................................

81

5) .......................................................
5.

TATA:
1)
2)
3)
4)
5)

.......................................................
.......................................................
.......................................................
.......................................................
.......................................................

C) Please fill the details regarding the most preferred insurance plans by people of Raipur.
1.

LIC:
1)
2)
3)
4)
5)

2.

RELIANCE:
1)
2)
3)
4)
5)

3.

.......................................................
.......................................................
.......................................................
.......................................................
.......................................................

BAJAJ ALLIANZ:
1)
2)
3)
4)
5)

5.

.......................................................
.......................................................
.......................................................
.......................................................
.......................................................

ICICI:
1)
2)
3)
4)
5)

4.

.......................................................
.......................................................
.......................................................
.......................................................
.......................................................

.......................................................
.......................................................
.......................................................
.......................................................
.......................................................

BIRLA SUNLIFE:
1) .......................................................
2) .......................................................

82

3) .......................................................
4) .......................................................
5) .......................................................

D) Please fill the details regarding the most preferred physical Gold plans & Gold related schemes by
people of Raipur.

1.

TANISHQ:
1)
2)
3)
4)
5)

2.

.......................................................
.......................................................
.......................................................
.......................................................
.......................................................

RELIANCE:
1)
2)
3)
4)
5)

.......................................................
.......................................................
.......................................................
.......................................................
.......................................................

83

5.4 SUMMARY OF FEEDBACK (FINDINGS)

Investors Demographic factors are important factors, which affects portfolio of the investor & governs his/her
investment pattern. Risk taking ability is also an important parameter which influences the investment decision
of investors.
Major Findings:
1.

Through the research I have found out that people of Raipur have life insurance as their most preferred
financial instrument followed by mutual fund, equity derivatives & gold.

2.

Females are less inclined towards the financial instruments than men.

3.

Females prefer gold more than men as an investment avenue, while men prefer life insurance, mutual
fund & equity derivative than gold.

4.

Another inference which can be drawn through this research is that Public sector employees prefer life
insurance plans more in comparison to Private sector employees, businessmen & professionals.

5.

Private sector employees have equity derivative & mutual funds as their most preferred investment
options.

6.

Professional prefers investing in gold rather than other financial instruments.

7.

Businessmen have a mixed style of investment pattern with more propensities towards life insurance.

8.

It can also be inferred that life insurance is favoured by people across different age groups.
Individuals of higher age group invest more in equity derivative & mutual funds than the
people of low & middle age groups.
People of lower age group prefer investments in gold than other age group people.
Middle age group persons invest in all the financial options with greater share in life insurance

9.

Respondents of Raipur have also invested in Reliance products such as Mutual funds, Life insurance &
gold schemes apart from equity derivative.

10. According to the research following are the most preferred broking firms by the citizens of Raipur :
Sharekhan, Religare, Nirmal Bang, Reliance Securities, Prabhudas Liladher.
11. The preferred Mutual fund companies & their plans by the citizens of Raipur:
A. SBI Mutual Fund
SBI Magnum Balanced Fund (G)
SBI Emerging Business (G)
SBI Magnum Global Fund (G)
SBI Magnum Income Fund
B. Reliance Mutual Fund
Reliance Equity Fund- Rp(G)
Reliance Index Fund - Nifty (G)

84

C. ICICI Mutual Fund

ICICI Prudential Services Industries Fund (G
ICICI Prudential Balanced Fund (G)
ICICI Prudential Tax Plan (G)
ICICI Prudential Top 100 Fund (G)
D. HDFC Mutual Fund
HDFC Long Term Advantage (G)
HDFC Index Sensex Plan
E. TATA Mutual Fund
TATA Ethical Fund (G)
TATA Income Fund (Appreciation) (G)

12. According to the research following are the preferred life insurance companies & their plans by the citizens
of Raipur:
A. LIFE INSURANCE CORPORATION (LIC)

Child plan- Komal Jeevan

Money back plan- Money back plan 20 years
Pension Plan- LICs Jeevan Akshay-VI
Unique Plans- Jeevan Anand & Jeevan Saral
Exclusively for ladies- LICs Jeevan Bharati

B. BIRLA SUN LIFE INSURANCE COMPANY LIMITED (BSLI)

BLSI Vision Plan
Platinum advantage plan
C. BAJAJ ALLIANZ LIFE INSURANCE COMPANY LIMITED
iSecure Term Insurance Plan
D. ICICI PRUDENTIAL LIFE INSURANCE COMPANY
ICICI PRUDENTIAL smart kid regular premium
ICICI PRUDENTIAL immediate plan
E. RELIANCE LIFE INSURANCE COMPANY LIMITED
Money back plan
Cash flow plan
13. As per Research conducted by us, the most preferred Gold Schemes are:
A. Physical Gold Scheme of Tanishq
Tanishq Swarna Nidhi Scheme
Golden Harvest Plan

B. Gold Related Schemes of Reliance

My Gold Plan
Gold ETF
Gold Saving Fund

5.5 LIMITATIONS

85

The study is confined only to a small segment of the entire population due to time constraints and
hence the results are applicable only to the city of Raipur.

The research only takes four investment patterns into consideration i.e. share market, life insurance &
gold & mutual funds.

It is not always possible to evaluate companies under similar parameters since many companies deal
with various businesses thus clubbing all the companies on the same parameters is not always possible.

An interpretation of this research is based on the fact that the respondents have given correct
information.

The lack of knowledge in customers about financial instruments can be a major limitation.

As the project includes secondary data also, possibility of unauthorized information cannot be avoided

86

6. Analysis &
Recommendations

6.1 ANALYSIS
6.1.1 ANALYSIS OF RESEARCH OF CONSUMERS
87

1.

As Per Age of Respondents : Investment Pattern

(In Percentage)

Instruments
Age in Years
18-30
31-50
51 and Above

Equity/Derivative
s
16
11.88
19.04

Mutual Funds

Life Insurance

Gold

Others

20
21.7
23.80

46
53.46
47.61

12
8.91
9.52

6
3.96
0

Others include investment in real-states, portfolio management services.

60

50

40

Equity/Derivatives
Mutual Funds

30

Life Insurance
Gold
Others

20

10

0
18-30

31-50

51 and above
Fig: 16

2.

As Per Gender of Respondents : Investment Pattern

(In Percentage)
Instruments
Gender

Equity/Derivatives

Mutual
Funds

Life
Insurance

Gold

Others

88

Male
14.92
21.64
49.25
Female
10.25
20.51
53.84
Others include investment in real-states, portfolio management services

9.70
10.25

4.47
5.12

60

50

40

Equity/Derivatives
Mutual Funds

30

Life Insurance
Gold
Others

20

10

Male

Female

Fig: 17

3.

As per Occupation of Respondents : Investment Pattern

(In Percentage)
Instruments

Occupation
Public Sector
Private Sector

Equity/Derivative
s

Mutual
Funds

Life
Insurance

Gold

Others

6.84
22

20.54
26

61.64
36

8.27
8

2.73
8

89

Business
17.64
11.76
52.94
11.76
Professionals
15.62
21.87
46.87
15.62
Others include investment in real-states and portfolio management services

5.88
-

70
60
50
Equity/Derivatives

40

Mutual Funds
Life Insurance

30

Gold
Others

20
10
0
Public Sector

Private Sector

Business

Professionals

Fig: 18

OVERALL, INVESTMENT PATTERN OF RESPONDENTS

Investment
Types
Preferred by
respondents
(in
percentage)

Equity/Derivative
s
24

Mutual
Funds
37

Life
Insurance
87

Gold

Others

17

Others include investment in real-states, portfolio management services

90

Financial Instruments

10%

3%

14%

Equity/Derivatives
Mutual Funds
Life Insurance
Gold

22%

Others

51%

Fig: 19

A. Equity/Derivatives :
Investment Pattern As per Age:
Age Group (in Years)
Preferred by Respondents in
Numbers
Preferred by Respondents in
Percentage

18-30
8

31-50
12

51 and Above
4

33

50

16.66

91

50
45
40
35
30
Preferred By Respondents in Percentage(%)

25
20
15
10
5
0
18-30

31-50

51 and above

Fig: 20
Investment Pattern As per Gender:
Gender
Preferred by Respondents in
Numbers
Preferred by Respondents in
Percentage

Male
20

Female
4

83.33

16.66

Male
Female

Fig: 21
Investment Pattern As per Occupation:
Occupation
Preferred by Respondents in
Numbers

Public Sector
5

Private Sector
11

Business
3

Professionals
5

92

Preferred by Respondents in
Percentage

20.83

45.83

12.5

20.83

50
45
40
35
30
25

Preferred By Respondents in Percentage(%)

20
15
10
5
0
Public Sector

Private Sector

Business

Professionals

Fig: 22

Respondents inclination towards Broking Firms

Broking
Firms
Preferred by
respondents
(in
percentage)

Religare

Sharekhan

16.66

16.66

Prabhudas
Liladher
11.11

Reliance
Securities
11.11

Nirmal
Bang
16.66

Others
27.77

93

Others include Anandrathi, ICICI securities, India Infoline and Microsec.

30
25
20
15
10
5

O
th
er
s

al
Ba
ng
irm
N

Re
lia
nc
e

Se
cu
rit
ie
s

Li
la
dh
er

Pr
ab
hu
da
s

Sh
ar
ek
ha
n

Re
lig
ar
e

Fig: 23
Segments
Preferred by respondents
(in percentage)

Delivery
66.66

Intraday
33.33

Fig: 24
B. Mutual Funds:
Investment Pattern As per Age:
Age Group (in Years)
Preferred by Respondents in
Numbers

18-30
10

31-50
22

51 and Above
5

94

Preferred by Respondents in
Percentage

27.02

59.45

13.51

60
50
40
Preferred By Respondents in Percentage(%)

30
20
10
0
18-30

31-50

51 and above

Fig: 25
Investment Pattern As per Gender:
Gender
Preferred by Respondents in
Numbers
Preferred by Respondents in
Percentage

Male
29

Female
8

78.37

21.62

Male
Female

Fig: 26
Investment Pattern As per Occupation:
Occupation
Preferred by Respondents in

Public Sector
15

Private Sector
13

Business
2

Professionals
7

95

Numbers
Preferred by Respondents in
Percentage

40.50

35.13

5.40

18.91

45
40
35
30
25
Preferred By Respondents in Percentage(%)

20
15
10
5
0
Public Sector

Private Sector

Business

Professionals

Fig: 27

Respondents inclination towards Asset Management Companies (AMC)

96

Asset
Reliance
HDFC
ICICI
Tata
SBI
Others
Managemen Mutual
Mutual
Prudential
Mutual
Mutual
t Company
Fund
Fund
Mutual Fund Fund
Fund
Preferred by 20.58
20.58
17.64
11.76
23.52
23.52
respondents
(in
percentage)
Others include Nirmal Bang, LIC Mutual Fund, Birla Sun Life Mutual Fund , UTI Mutual Fund, Kotak
Mutual Fund and Franklin-Templeton

25
20
15
10
5

O
th
er
s

M
IC
ut
IC
ua
IP
lF
ru
un
de
d
nt
ia
lM
ut
ua
lF
un
d
Ta
ta
M
ut
ua
lF
un
d
SB
IM
ut
ua
lF
un
d

H
D
FC

Re
lia
nc
e

M
ut
ua
lF
un
d

Fig: 28
Modes of Payment

Bulk

Preferred by respondents
(in percentage)

54.83

SIP (Systematic Investment

Plan)
45.16

SIP
Bulk

Fig: 29

97

C. Life Insurance:
Investment Pattern As per Age:
Age Group (in Years)
Preferred by Respondents in
Numbers
Preferred by Respondents in
Percentage

18-30
23

31-50
54

51 and Above
10

26.43

62.06

11.49

70
60
50
40

Preferred By Respondents in Percentage(%)

30
20
10
0
18-30

31-50

51 and above

Fig: 30
Investment Pattern As per Gender:
Gender
Preferred by Respondents in
Numbers
Preferred by Respondents in
Percentage

Male
66

Female
21

75.86

24.13

Male
Female

98

Fig: 31
Investment Pattern As per Occupation:
Occupation
Preferred by Respondents in
Numbers
Preferred by Respondents in
Percentage

Public Sector
45

Private Sector
18

Business
9

Professionals
15

51.72

20.68

10.34

17.24

60
50
40
30

Preferred By Respondents in Percentage(%)

20
10
0
Public Sector

Private Sector

Business

Professionals

Fig: 32

99

Respondents inclination towards Life Insurance Companies.

Life
Insurance
Company

LIC

Birla Sun Life

Insurance

Bajaj Allianz
Life
Insurance

ICICI
Prudential
Life
Insurance
6.12

Reliance
Life
Insurance

Others

Preferred by 67.34
7.14
5.10
4.08
10.20
respondents
(in
percentage)
Others include HDFC Life Insurance, Aviva Life Insurance, Kotak Mahindra Life Insurance, SBI Life Insurance
and Aegon Religare Life Insurance

LIC
Birla Sun Life Insurance
Bajaj Allianz Life Insurance
ICICI Prudential Life
Insurance
Reliance Life Insurance
Others

Fig: 33
Plan

Term Plan

Traditional Plan

Preferred by respondents
(in percentage)

36.45

52.08

ULIP (Unit Link

Investment Plan)
11.45

100

60
50
40
30
20
10
0
Term Plan

Traditional Plan

ULIP

Fig: 34
D. Gold :
Investment Pattern As per Age:
Age Group (in Years)
Preferred by Respondents in
Numbers
Preferred by Respondents in
Percentage

18-30
6

31-50
9

51 and Above
2

35.29

52.94

11.76

60
50
40
Preferred By Respondents in Percentage(%)

30
20
10
0
18-30

31-50

51 and above

Fig: 35
Investment Pattern As per Gender:
Gender
Preferred by Respondents in
Numbers
Preferred by Respondents in
Percentage

Male
13

Female
4

76.47

23.52

101

Male
Female

Fig: 36
Investment Pattern As per Occupation:
Occupation
Preferred by Respondents in
Numbers
Preferred by Respondents in
Percentage

Public Sector
6

Private Sector
4

Business
2

Professionals
5

35.29

23.52

11.76

29.41

40
35
30
25
20

Preferred By Respondents in Percentage(%)

15
10
5
0
Public Sector

Private Sector

Business

Professionals

Fig: 37
Respondents inclination towards gold schemes
Investment Option
Preferred by Respondents

Physical
Tanishq
75

Gold

Scheme

of

Gold Related
Reliance
25

Schemes

of

102

(in percentage)

Physical Gold Schemes of

Tanishq
Gold Related Schemes of
Reliance

Fig: 38

6.1.2 Analysis of Broking Firms, Mutual Funds, Life Insurance Plans and Gold Schemes

A. Equity/Derivatives:
Most preferred broking firms by the citizens of Raipur are:
1. ShareKhan
2. Reliance Securities
3. Religare
4. Nirmal Bang
5. Prabhudas Liladher

103

BASIS/COMPANY

RELIGARE

PRABHUDAS
LILADHAR

SHAREKHAN

RELIANCE

NIRMAL
BANG

A/C OPENING
CHARGE

Rs 750/-

NIL

Rs 150/-

Rs 950/If 10,000
margin then
NIL

NIL

NAME OF
SOFTWARE USED

ODIN

ODIN

SPEED
TRADE

NEST

DIETODIN

SOFTWARE
INSTALLATION
CHARGE

NIL

NIL

NIL

NIL

NIL

ACCOUNT
MAINTAINACE
CHARGE
(annually)

Rs 400/ -

1 yr free
2nd yr onward
300/ -

Rs 450/ -

Rs 300/-

1 yr free
2nd yr onward
200/If pay check
of Rs 1125/then lifetime
free

MAXIMUM
BROKERAGE
Intraday:
Delivery:

.03%
.3%

.05%
.5%

.03-.05%
.3-.5%

0.05%
0.5%

.05%
.5%

104

TRANSACTION
REPORT

Mail, SMS
(Free of
Cost)

Mail, SMS
(Free of
Cost)

Mail, SMS
(Free of
Cost)

Mail, SMS
(Free of
Cost)

Mail, SMS,
Paper
(Free of
Cost)

DP(PENALTY)

18%

18%

18%

18%

18%

EXPOSURE
(for Intraday)

5 times

NA

4-5 times

4-5 times

20 times

SERVICES
PROVIDED

Equity,
Derivative,
Commodity,
Insurance

Equity,
Derivative,
Commodity,
Currency trading

Equity,
Derivative,
Commodity,
Mutual Fund
Gold ETF

Equity,
Derivative,
Commodity,
Insurance,
Mutual Fund

Equity,
Derivative,
Commodity

B. Mutual Funds:
The preferred funds are:
1. Equity Fund

ICICI Prudential Services Industries Fund (G)

Tata Ethical Fund (G)

2. Balanced Fund

ICICI Prudential Balanced Fund (G)

SBI Magnum Balanced Fund (G)

3. ELSS Fund

HDFC Long Term Advantage (G)

ICICI Prudential Tax Plan (G)

4. Index Fund

Reliance Index Fund - Nifty (G)

HDFC Index Sensex Plan

5. Income Fund

Tata Income Fund (Appreciation) (G)

SBI Magnum Income Fund

6. Large-cap Fund

ICICI Prudential Top 100 Fund (G)

Reliance Equity Fund- Rp(G)

7. Small & Mid-cap Fund

105

SBI Emerging Business (G)

SBI Magnum Global Fund (G)

Most Preferred Equity Funds

Basis of comparison

ICICI PRUDENTIAL SEVICES

INDUSTRIES FUND (G)

TATA ETHICAL FUND (G)

Fund Class

Diversified Equity

Diversified Equity

Fund Type

Open Ended

Open Ended

Scheme Asset (till Sep 2,2013)

1.5 billion

1.1 billion

Inception date

Nov,2005

May 1996

Minimum Investment

Rs 5000

Rs. 5000

AMC

ICICI Prudential AMC Ltd.

TATA Asset Management Ltd.

Entry Load

0%

0%

Exit Load

1% (if units are redeemed /

switched-out for a period of up to 1
year from the date of allotment.)

1% (if units are redeemed /

switched-out for a period of up to 1
year from the date of allotment.)

Top 5 Holdings

Infosys, Cipla, Tech Mahindra,

Lupin, TCS

Reliance, Infosys, Lupin, ONGC,

Shree Cements

Top 3 sectors

Technology,
Media

Technology,
Oil
Pharmaceuticals

CRISIL Rank (on basis of last 1

year performance)
NAV (As per Sep 2, 2013)

22.63

74.79

R-Squared

74.46

68.96

Pharmaceuticals,

&

Gas,

106

Beta Ratio

0.88

0.52

Alpha Ratio

8.89

5.89

Standard Deviation

18.97

13.49

Return

9.09

4.41

Sharpe Ratio

0.22

-0.07

Expenses

2.39%

2.11%

Most Preferred Balanced Funds

Basis of comparison

ICICI
PRUDENTIAL
BALANCED FUND (G)

SBI MAGNUM
FUND (G)

Fund Class

Balanced

Balanced

Fund Type

Open Ended

Open Ended

Scheme Asset ( till Sep 2, 2013)

5.2 billion

3.9 billion

Inception date

Oct 1999

Oct 1995

Minimum Investment

Rs 5000

Rs. 1000

AMC

ICICI Prudential AMC Ltd.

NAV (As per Sep 2, 2013)

53.14

SBI Funds Management Pvt. Ltd

.
53.71

Entry Load

0%

0%

Exit Load

1% (if units are redeemed /

switched-out for a period of up to 1
year from the date of allotment.)

1% (if units are redeemed /

switched-out for a period of up to 1
year from the date of allotment.)

Top 5 Holdings

ITC, Infosys, Amara Raja Batt,

Motherson Sumi, Tech Mahindra

Repco Home Fin, HDFC Bank,

ICICI Bank, Infosys, Reliance

Top 3 sectors

Banking/Finance,
Pharmaceuticals

Banking/Finance,
Engineering

CRISIL Rank (on basis of last 1

year performance)
Standard Deviation

12.06

13.56

Return

6.59

1.79

Automotive,

BALANCED

Automotive,

107

Sharpe Ratio

0.08

-0.26

Expenses

2.28%

2.04%

Most Preferred ELSS Funds

Basis of comparison

ICICI PRUDENTIAL TAX PLAN

(G)

HDFC
LONG
ADVANTAGE (G)

TERM

Fund Class

ELSS

ELSS

Fund Type

Open Ended

Open Ended

Scheme Asset ( till Sep 2, 2013)

13.2 billion

7.8 billion

Inception date

Aug 1999

Jan 2001

Minimum Investment

Rs 500

Rs. 500

AMC

ICICI Prudential AMC Ltd.

NAV (As per Sep 2, 2013)

144.31

HDFC
Asset
Company Ltd
.
135.80

Entry Load

0%

0%

Exit Load

0%

0%

Top 5 Holdings

Cairn India, NMDC,

Reliance, ICICI Bank

Top 3 sectors

Oil & Gas,

Technology

CRISIL Rank (on basis of last 1

year performance)
Bench mark

S&P CNX 500

BSE SENSITIVE INDEX (S&P

BSE 200)

R-Squared

92.65

93.71

Beta Ratio

0.90

0.87

Management

Infosys,

Infosys, ICICI Bank, TCS, ITC,

Reliance

Banking/Finance,

Banking/Finance, Technology, Oil

& Gas

108

Alpha Ratio

2.80

1.03

Standard Deviation

17.83

17.17

Return

1.66

0.15

Sharpe Ratio

-0.17

-0.26

Expenses

1.99%

2.09%

Most Preferred Index Funds

Basis of comparison
Fund Class

RELIANCE
NIFTY (G)
Index

INDEX

FUND

HDFC INDEX SENSEX PLAN

Fund Type

Open Ended

Open Ended

Scheme Asset ( till Sep 2, 2013)

358.4 million

336.8 million

Inception date

Sep 2010

Jul 2002

Minimum Investment

Rs. 5000

Rs.5000

AMC
NAV (As per Sep 2, 2013)

Reliance
Capital
Management Ltd.
9.25

Entry Load

0%

0%

Exit Load

1% (if units are redeemed /

switched-out for a period of up to 1
year from the date of allotment.)

1% (if units are redeemed /

switched-out for a period of up to 1
year from the date of allotment.)

Top 5 Holdings

ITC, Reliance, Infosys, HDFC,

HDFC Bank

ITC, Reliance, Infosys, HDFC,

HDFC Bank

Top 3 sectors

Banking/Finance, Technology, Oil

& Gas

Banking/Finance, Technology, Oil

& Gas

CRISIL Rank (on basis of last 1

year performance)
Bench mark

S& P CNX NIFTY

BSE SENSITIVE INDEX

Index

Asset

HDFC Asset Management Co. Ltd.

159.33

R-Squared

97.70

Beta Ratio

0.97

Alpha Ratio

2.09

Standard Deviation

18.58

109

Return

1.53

Sharpe Ratio

-0.16

Expenses

1%

Most Preferred Income Funds

Basis of comparison

TATA INCOME FUND (App) (G)

SBI MAGNUM INCOME FUND

Fund Class

Debt long term

Debt long term

Fund Type

Open Ended

Open Ended

Scheme Asset (till Aug 30, 2013)

12.5 billion

62.4 billion

Inception date

April 1997

Nov 1998

Minimum Investment

Rs. 5000

Rs. 2000

AMC

TATA Asset Management Ltd.

SBI Funds Management Pvt. Ltd

NAV (As per Aug 30, 2013)

35.97

28.89

Entry Load

0%

0%

Exit Load

1% if units are redeemed /

switched-out for a period of up to
90 days from the date of
allotment.)
GOI - 8.15% (11/06/2022), GOI 8.33% (09/07/2026), POWER
FINANCE CORPORATION, GOI
- 8.07% (03/07/2017), GOI 8.12%(10/12/2020)

1% if units are redeemed /

switched-out for a period of up to 1
year from the date of allotment.)

CRISIL Rank (on basis of last 1

year performance)
Standard Deviation

3.09

3.48

Return

7.22

8.22

Sharpe Ratio

0.44

0.71

Expenses

1.67%

1.30%

Top 5 Holdings

GOVERNMENT OF INDIA,
HOUSING DEVELOPMENT
FINANCE CORPORATION
LIMITED, CANARA BANK, LIC
HOUSING FINANCE LTD,
POWER FINANCE
CORPORATION LTD

110

BASIS

ICICI PRUDENTIAL TOP 100 FUND (G)

RELIANCE EQUITY FUND- RP(G)

Inception Date

JUNE 19, 1998

MARCH 07, 2006

Fund Class

LARGE CAP

LARGE CAP

Fund Type

OPEN ENDED

OPEN ENDED

Crisil Ranking

RANK 3

RANK 5

Minimum Investment

RS. 5000

RS. 5000

Amc/Fund Family

ICICI Prudential Asset Mgmt Co. Ltd.

Reliance Capital Asset Mgmt Ltd.

Total Assest (till Sep

2,2013 )
Top 5 Holdings

3.7 billion

9.2 billion

Cairn India, ICICI Bank, Infosys,

Dr Reddys Labs, Power Grid Corp
34.15%

TCS, Reliance, HDFC Bank,

HCL Tech, ICICI Bank
27.57%

Banking/Finance, Oil & Gas, Metals &

Mining
49.22%

Banking/Finance,
Automotive
48.8%

Entry Load

0%

0%

Exit Load

Exit Load 1% if redeemed/switched out

within a period of 18 months from the date
of allotment
S&P CNX Nifty

Exit Load 1% if redeemed/switched out

within a period of 18 months from the
date of allotment
S&P CNX Nifty

Weightage To Top 5
Holdings
Top 3 Sectors
Weightage To Top 3
Sectors

Bench Mark

Technology,

Most Preferred Large Cap Funds

NAV as on
2,2013
R-Squared

Sep

147.23

13.71

94.29

91.12

Beta Ratio

0.92

1.01

Alpha Ratio

4.56

-2.52

Standard Deviation

18.15

20.26

Return

4.38

-3.57

111

Sharpe Ratio

-0.01

-0.38

Expenses

2.33%

2%

BASIS

SBI MAGNUM GLOBAL FUND (G)

SBI EMERGING BUSINESS (G)

Inception Date

Sep 22, 1994

Sep 17, 2004

Fund Class

Small & Midcap

Small & Midcap

Fund Type

Open ended

Open ended

Crisil Ranking

Rank 2

Rank 1

Minimum Investment

Rs. 2000

Rs. 2000

Amc/Fund Family

SBI Fund Mgmt. Private Ltd.

SBI Fund Mgmt. Private Ltd

Total Assets (till Sep

2,1013)
Top 5 Holdings

8.3 billion

12.3 billion

Page Industries, P and G, CRISIL, Blue

Dart, Supreme Ind
17.83%

HDFC Bank, Page Industries, 3M India,

Agro Tech Foods, P and G
31.55%

Automotive, Engineering, Banking/Finance

Weightage To Top 5
Holdings
Top 3 Sectors
Weightage To Top 3
Sectors
Entry Load

33%

Banking/Finance,
Manufacturing
30.78%

Automotive,

0%

0%

Exit Load

Exit Load 1% if units are redeemed /

switched-out within 1 year from the date of
allotment.

Exit Load 1% if units are redeemed /

switched-out within 1 year from the date
of allotment.

Bench Mark

CNX Midcap

BSE 500

Most Preferred Small & Midcap Funds

NAV as on
2,2013
R-Squared

Sep

60.76

47.85

74.14

68.82

Beta Ratio

0.62

0.71

Alpha Ratio

5.12

10.41

Standard Deviation

15.67

18.80

Return

1.93

5.36

Sharpe Ratio

-0.19

0.05

112

Expenses
2.07%
C. Life Insurance Schemes:

2.28%

The preferred plans are:

1) Traditional Whole Life Plans
LIC Jeevan Anand
BLSI Vision Plan
2) Child Life Insurance Plans

LIC Komal Jeevan

ICICI Pru Smart Kid Regular Premium
3) Term Life Insurance Plan
Bajaj Allianz iSecure Term Insurance Plan
4) Money Back Plans
LIC Money back plan 20 years
Reliance Guaranteed Money Back Plan
5) Pension Plans
LICs Jeevan Akshay-VI
ICICI PRUDENTIAL Immediate Annuity
6) Endowment Plan
Reliance Cash Flow Plan
LIC Jeevan Saral
7) Unit Linked Insurance Plan
Birla Sun Life Platinum advantage plan
8) Exclusively for ladies
LICs Jeevan Bharati

Most Preferred Whole Life Plans

113

Particular

BSLI Vision Plan

LIC Jeevan Anand

Product Type

Traditional Whole Life Plan

Whole Life Plan

Plan at a glance

Whole life traditional life insurance plan

combining whole life and endowment
features that offers Whole Life cover to Age
100 plus a Guaranteed Survival Benefit
payable at the end of the term selected by
investor.

LIC Jeevan Anand is with profit

Assurance plan; this plan is a
combination of Whole Life plan
and Endowment plan. The plan
provides pre decided Sum Assured
and bonuses at the end of the
stipulated premium paying term,
but the risk cover on the life
continues till death.

Policy Term
Pay Term
Entry Age
Minimum Sum Assured
Riders

Loan
Comments

Guaranteed Addition

Features
Whole Life to age 100 years
Whole Life to age 100 years
5 to 35 years (equal to the GSB Term)
5-57 years
1 to 65 years
18 to 65 years
Rs 1,00,000
Rs 50,000
5 riders are available
Accidental benefit rider is available
AD & D rider
with this plan
Critical illness rider
Term assurance benefit
Hospital care rider
Surgical care rider
Waiver of premium rider
Loan allowed only once plan acquires Loan available after 3 policy years
surrender value
BSLI Vision is a Whole Life traditional life insurance plan combining
Whole Life and Endowment features that offers whole life cover to Age
100 plus a Guaranteed Survival Benefit payable at the end of the term
selected by insured whereas LIC Jeevan Anand with profit Assurance
plan, bonus paid by LIC are based on Corporations Performance in Life
Insurance Business.
With BSLI Vision Plan, one can enhance the insurance coverage during
the GSB term by adding one or more of the 5 optional riders available in
the plan whereas only one optional rider available with LIC Jeevan
Anand.
Guarantee
Guaranteed Survival Benefit:
Guaranteed Survival Benefit (GSB) is the
minimum saving amount guaranteed to be
payable at the end of the GSB term based
upon GSB term opted and sum assured
band.
Guaranteed Maturity Benefit:
In the event of the life insured survives to
the end of the policy term, i.e. To age 100,
the Guaranteed Maturity Benefit equal to
sum assured.

Sum Assured along with the vested

bonuses is payable at the end of the
premium paying term.

114

Other Additions/Bonuses

Monthly Additions:
At the beginning of each policy year, client
policy will be assigned the latest Monthly
Addition Rate declared by us.
The currently declared Monthly Addition
Rates are as follows (annual rate per 1000
of SA)
GSB
(Yrs)
Currently
declared

Comments

Death Benefit

Maturity Benefit

Survival Benefit

How BSLI Fares better?

5-10
41.4

1115
41.4

1620
44.4

This is a with-profit plan and

participates in the profits of the
Corporations
Life
insurance
business.
Simple Reversionary Bonuses are
declared per thousand Sum
Assured annually at the end of each
financial year.

21+
48.6

Enhancement to Monthly Additions:

For GSB Terms beyond 21 years and if
client policy has earned Monthly Additions
payable as a death benefit or a survival
benefit shall be enhanced.
SA (Rs 1< 2 2< 4 4< 8
8+
in
Lakhs)
For
2.5% 5%
6.25
6.75%
each
%
Policy
year
21+
BSLI Vision Plan provides Guaranteed Survival Benefit and Guaranteed
Maturity Benefit whereas bonus is based on company performance in
LIC Jeevan Anand.
Benefits
During the GSB Term:
During Premium Paying Term:
Sum assured along with vested
The
Guaranteed
Death
bonuses if any will payable.
Benefit(SA); plus
Monthly Additions accrued to After Premium Paying Term:
An amount equal to sum assured
date; plus
Enhancement
to
Monthly payable.
Additions, if applicable
After the GSB Term:
The Guaranteed Death Benefit (SA) shall
be paid to the nominee
Guaranteed Maturity Benefit. The GMB is Sum assured
the sum assured
Payable at the end of the GSB term:
Sum assured along with the vested
The guaranteed survival benefit bonuses is payable at the end of the
premium paying term
plus
Monthly additions accrued due
date plus
Enhancement to monthly
additions, if applicable
In LIC Jeevan Anand, non-guaranteed Loyalty additions are payable
based on company performance whereas under BSLI Vision Plan instead
of declaring a non transparent loyalty bonus at maturity, the insured

115

knows what he is earning throughout the policy as at the beginning of

each policy year, the latest monthly addition rate is declared by BSLI
which shall be GUARENTEED for the next 12 months. Depending on
BSLI expectations with regards to future economic conditions, BSLI
declare new monthly Addition Rates on April 1st of every calendar year.
BSLI Vision Plan entry age is 1 year whereas it is restricted to 18 years in
LIC Jeevan Anand.

Most Preferred Endowment Life Insurance Plans

116

Particular
Plan at a Glance

Maturity benefit/Survival
benefit

Reliance Cash Flow Plan

LIC Jeevan Saral
Easy liquidity
Plan contains good feature of the
Wealth creation through bonus
conventional plans and the
On maturity receive accumulated
flexibility of unit linked plans.
bonuses along with final lump sum It provides higher cover, smooth
payout
return,
liquidity
and
High sum assured rebate
considerable flexibility.
Full sum assured plus bonuses in case In this plan one has to choose the
of client unfortunate death
premium he wants to pay
Options of two riders
whereas in normal plans one
chooses the S.A.
-Accidental Death Benefit

Under
this plan death cover will be
-Accidental Permanent
same irrespective of age at entry
Total/Partial Disability benefit
and term.
The sum payable at maturity
however differs for different
entry age and terms.
This plan is very appropriate for
employees seeking life cover
through salary savings schemes.

Survival Benefit:
Get a percentage of the sum assured on the
fourth anniversary and on every third policy
anniversary
Maturity Benefit:
On maturity, client get
remaining
percentage of sum assured plus accumulated
bonus

Maturity Benefit: The Maturity

Sum Assured plus Loyalty
additions, if any, is payable in a
lump sum.
Supplementary Benefits These are
the optional benefits that can be
added to client basic plan for extra
protection/option. An additional
premium is required to be paid for
these benefits.

Life Cover benefit:

In the unfortunate event of loss of life, client
beneficiary will receive the full lump sum
assured plus accumulated bonuses till that
date
Guarantee

NA

Death benefit is guaranteed 250

times the monthly premium.

Death Benefit

On death, policyholder beneficiary will get

the full Sum Assured, plus accumulated
bonuses, over and above survivals benefits
already paid to insured.

250 times the monthly premium

together with loyalty additions, if
any, & return of premiums
excluding first year premiums &
extra/rider premium, if any, is
payable in lump sum on death of
life assured during the term of
policy.

Bonus

On maturity of plan, policyholder receives

accumulated bonuses along with a final
lump sum payout.

Profits are shared in the form of

loyalty additions depending upon
the experience of the Corporation.

117

Beneficiary receives bonuses in case of

untimely demise of insured.
Waiver of premium

Inbuilt waiver of premium

If life assured become totally and
permanently disabled, the Reliance Life
Insurance will waive all future premiums
under basic policy and riders up to a limit
of Rs 40,000

Rebate

It offers premium discount for sum assured

over and above Rs 99,999
Sum Assured Range High Sum Assured
in Rs
Rebate per sum
assured
1,00,000-2,49,000

Rs 1 per 1,000

2,50,000-4,99,999

Rs 2 per 1,000

5,00,000-9,99,000

Rs 3 per 1,000

10,00,000 and above

Rs 4 per 1,000

The minimum term after which a

policy can earn loyalty addition
will be 10 years.
NA

Modal Rebate: 2% & 1% modal

rebate on premium mode annual &
semi-annual respectively.
Higher sum assured Rebate: Not
available.

Riders

3 riders are available (optional)

Accidental Death Benefit
Accidental Permanent Total/Partial
Disability benefit
Reliance Critical Illness Rider

2 riders are available(optional)

Accidental
death
&
disability benefit
Term assurance benefit

Surrender value

Plan acquires a Surrender value after 3 years

premium has been paid and after 3 years
have elapsed from the date of
commencement of policy

The policy can be surrendered after

it has been in force for at least 3
full years .The surrender value will
be the grater than guaranteed
surrender
value
or
special
surrender value.

Guarantee a minimum sum value of 30% of

the total premiums paid (excluding extra
premium and premiums for additional
benefits) subsequent to first year premium,
less the total of lump sum Survival Benefits
already paid under this policy.
On surrender, the insurance protection
provided under the policy will also cease.

GSV: The GSV will be equal to

30% of the total amount of
premiums paid excluding the
premiums for the first year & all
the extra premiums & premium for
accident benefit/term riders.
SSV: 80% of maturity sum assured
if less than 4 years premiums have
been paid,90% of the maturity sum
assured, if 4 or more years but less
than 5 years premiums have been
paid & 100% of the maturity sum
assured, if 5 or more years
premiums have been paid plus the

118

Loan

No Loan is available under this policy

loyalty additions if any.

Loan available at the rate of 10.5%

Most Preferred Child Life Insurance Plans

Basis of Comparison

LIC Komal Jeevan

ICICI Pru Smart Kid

Regular Premium

119

Policy term

18 years

Min:10 years
Max:25 years

Sum Assured

Min:1 lakhs
Max:50 lakhs

Min:1lakhs
Max:30 lakhs

Premiums are payable yearly, half-yearly,

quarterly, monthly or through Salary deductions
or in lump sum as single premium as opted by
client.

Yearly / Half yearly / Monthly

Age at entry(child)

Min: 0 years
Max: 10 years

Min: 0 yrs
Max: 12 years

Guaranteed additions

The policy provides for the Guaranteed

Additions at the rate of Rs. 75 per thousand Sum
Assured for each completed year. The
Guaranteed Additions are payable at the end of
the term of the policy or earlier death of the Life
Assured.

Loyalty Additions

Loyalty addition may be payable depending on

the experience of the Corporation.

This
plan
guarantees
educational
benefits
to
clients child. It provides
client with two options to
receive those benefits:
Benefits at critical
educational
milestones
Avail of benefits in
the last 5 years of the
policy
NA

Mode
payment

of

premium

Survival Benefits

NA
The percentage of sum assured as mentioned
below will be paid on survival to the end of
specified durations:
On the policy
anniversary
immediately
following
the % of Sum Assured
Life
assured
attains the age
of

Premium Waiver benefit

18 years

20%

20 years

20%

22 years

30%

24 years

30%

In the unfortunate event of death of the parent

(life assured) during the
term of the policy, the benefit under the policy
are as follows;
The Sum Assured would be paid out

This is an optional benefit

that can be added to investor
basic plan. An additional
premium is required to be
paid for this benefit. By

120

immediately.
Future premiums till maturity will be waived
off and the premiums
would be paid by the Company till maturity of
the policy
The policy benefits continue for client child's
educational and
Developmental needs as planned by investor
Accident
&
benefit rider
Vesting

disability

Guaranteed surrender value

NA

payment of this additional

premium, the proposer can
secure the benefit of cessation
of premiums from his/her
death to the end of the
deferment
period.
The
deferment period for this
purpose is to be taken as 18
minus age at entry of child.
Optional rider available

Assured attaining 18 years of age & no premium

is payable thereafter.

NA

The policy may be surrendered after it has been

in force for 3 years or more. The Guaranteed
Surrender Value before the date of
commencement of risk is 90% of the premiums
paid excluding the premiums paid during the
first year and any extra premium paid. After the
date of commencement of risk, the Guaranteed
Surrender Value is 90% of the premiums paid
before the date of commencement of risk
excluding the premiums paid during the first
year and any extra premium paid plus 30% of
the premiums paid after the date of
commencement of risk.

If premiums are paid for at

least three consecutive years,
The Policy
acquires a Surrender Value,
which is equal to 35% percent
of the
premiums paid, excluding the
premiums paid during the first
year of the Policy, the extra
premiums and the premiums
paid for
Supplementary
benefits
further reduced by the value
of the Fixed
Term Payments already paid.
The cash value of the
Guaranteed
Additions already made and
vested bonuses will also be
allowed.

Most Preferred Money Back Plans

Basis of Comparison
LIC 20 Year Money Back Plan

121

Reliance Guaranteed Money Back Plan

Age at entry
Min: 13 years
Max: 50 years
Min: 18 years
Max:

60 years(for policy term of 15 years)

55 years(for policy term of 20 years)

Premium payment modes

Premiums are payable yearly, half-yearly, quarterly, monthly or through salary deductions as opted by client
throughout the term of the policy, or till the earlier death
Client has the option to pay regular premium under yearly, half-yearly, quarterly and monthly mode. Quarterly
and Monthly modes are allowed only if premiums are paid electronically. The mode of premium payment can be
changed on the policy anniversary. A rebate of 5% and 2.5% of tabular premiums are allowed on yearly and half
yearly mode respectively.

Maturity benefits
At the maturity of the policy the insured will get the remaining 40% of the sum assured along with accrued
bonuses.
At the end of the policy term irrespective of survival of the life assured provided the policy is not paid up, the
total of following two benefits will be paid:
Accrued Guaranteed Loyalty Additions and
Guaranteed Maturity Additions.
The policy terminates on payment of maturity benefit

Bonuses
This is a with profit plan and participate in the profits of the Corporations life insurance business.
NA
Death benefits
The Sum Assured plus all bonuses to date is payable in a lump sum upon the death of the life assured during the
policy term irrespective of the Survival benefit /benefits paid earlier.
In case of unfortunate death of the life assured during the policy term provided the policy is in force as on the
date of death, the benefit will be paid in one lump sum.

122

Plan/ Term

Survival benefits

At the end of 5
years
At the end of
10 years
At the end of
15 years
At the end of
20 years

Plan of 20
Years
20%
20%
20%
balance 40% +
bonus

Some percentage of SA as per the

end of specified time.

plan will be paid on survival to the

NA

Maturity benefits

At the end of the policy term irrespective of survival of the

life assured provided the policy is not paid up, the total of
following two benefits will be paid
1. Accrued Guaranteed Loyalty Additions and
2. Guaranteed Maturity Additions.
The policy terminates on payment of maturity benefit
Guaranteed loyalty additions
NA
Guaranteed Loyalty Additions of 2% of the base sum assured/
paid up sum assured will be accrued at the end of every
policy year provided the policy is not surrendered or lapsed

123

Most Preferred Pension Plans

Particular
Plan at a glance

Benefits

Types of Annuity
payout
option
available

LIC Jeevan Akshay-VI

ICICI Prudential Immediate Annuity

It was introduced from 10th September 2007

It is the only immediately pension plan available in
Indian Market Pension starts immediately on the
purchase of the Policy.
No Medical Examination required

With this unique plan, client can start

getting his/her annuity immediately after
paying the premium.

The first instalment shall be paid one year, six Guaranteed Income for life for investor
months, three months or month after the date of
and spouse (depending upon the
purchase of the annuity depending on whether
option chosen by investor)
mode of annuity payment is available yearly, half- Flexible payout modes monthly,
quarterly, half yearly
yearly, quarterly or monthly respectively.
or yearly
On death during guarantee period- annuity is paid to Options of annuity Card which ensures
convenience in
receiving annuity
the nominee till the end of the guaranteed period
amount
after which the same ceases.
Flexible to choose from 5 different
payout options to receive investor
pension
No medical test required to avail of this
plan
Various annuity options available :
1. Annuity for option

Various annuity options available

1. Life Annuity: Annuity for Life

2. Annuity guaranteed for 5,10,15 or 20 yrs and life

thereafter

2. Life Annuity with Return of Purchase

Price: Life Annuity for annuitant with
return of purchase price on death to the
beneficiary.

3. Annuity for life with return of purchase on death.

124

4. Annuity for life increasing at a simple rate of 3%

p.a
5. Annuity for provision for 50% of the annuity to
the spouse of the annuitant for life on death of the
annuitant.
6. Annuity for life with a provision for 100% of the
annuity to the spouse of the annuitant for life on
death of annuitant.

3. Joint Life, Last Survivor without

Return of Purchase Price :
The annuity is first paid to the annuitant.
After the death of the annuitant, the
spouse receives a pension, which is an
amount equal to the annuity paid to the
annuitant.
4. Joint Life, Last Survivor with Return
of Purchase Price: The
annuity is first paid to the annuitant.
After the death of the annuitant, the
spouse receives a pension which is an
amount that is equal to the annuity paid
to the annuitant.
After the death of the last survivor, the
purchase price is returned to the
nominee.
5. Life Annuity guaranteed for 5/10/15
years and thereafter:
Guaranteed annuity is paid for the
chosen term (5/10/15) and after that, the
annuity continues as long as the
annuitant is alive.

Conditions
Applicable

a.
b.
c.

d.

Modes of Annuity
Payments

Minimum Age at entry : 40 Last Birthday

Maximum Age at entry : 79 Last Birthday
Minimum Purchase Price : Rs.50,000/- or such
amount which may secure a minimum annuity
as (d) below.
Minimum Annuity Instalment:
Rs.5,00/- per month,
Rs.3,000/- per quarter,
Rs.3,000/- per half-year,
Rs.3,000/- per year

The annuity can be received in monthly, quarterly,

half yearly or yearly modes subject to minimum
annuity as stated below:
MODE
Monthly

MINIMUM ANNUITY
P.A.
Rs 6000

Quarterly

Rs 4000

Half-Yearly

Rs 4000

Yearly

Rs 3000

a.
b.
c.
d.
e.

The minimum annuity payable

(p.a.) is Rs.12, 000
The minimum age under this
policy is 45 years
The maximum age is 80years
Minimum spouse age (at time of
entry) is 20 years
Minimum and Maximum policy
term-Not applicable

The annuity can be received in

monthly, quarterly, half yearly or yearly
modes.

Commission

Agents commission shall be payable @ 2% of

purchased price. No bonus shall be paid

NA

Rebates

a.) Incentives for Higher Purchase Price:

Under the policies where purchase price is high,

NA

125

incentive by way of increase in the tabular annuity

rate will be given to the annuitant.
Scale of absolute amount of incentive under high
purchase price policies as an addition to the annuity
rates per annum per thousand Rs. is as below:
MODE OF
ANNUITY

Yearly
Half Yearly
Quarterly
Monthly

PURCHASE PRICE (RS.)

1,50,000 to
2,99,999
3.00
2.50
2.50
2.00

3,00,000 to
4,99,999
3.75
3.50
3.50
3.25

b.) Rebate for Corporation Employees:

A rebate of 2% of the purchase price will be
eligible under Corporation employees under CEIS

Most Preferred Unit Linked Investment Plan (ULIP)

BIRLA SUN LIFE INSURANCE PLATINUM ADVANTAGE PLAN
This Plan gives the advantage to choose from two Investment Options:
1. Guaranteed Option
2. Self-Managed Option
With the Guaranteed Option investments in the Platinum Advantage Fund are safeguarded from any downsides
in the capital markets & one also have options to enhance the financial security of loved ones, at a nominal
additional cost.
This plan offers:
A 10-year plan with a 5-year Pay Term
Option to enhance the financial security for loved ones
Complete control on ones investments
How BSLI Platinum Advantage Plan works:
o
o
o
o

Choose Basic Premium

Choose Investment Option
Choose the Enhanced Sum Assured
Choose riders

Investment Options:
Self-Managed Option: The Self-Managed Option gives complete access to invest premiums in well established
10 Investment Funds, ranging from 100% debt to 100% equity. One also enjoys full freedom to switch from one
Investment Fund to another, as per changing requirements.
Guaranteed Option: The Guaranteed Option allows to invest first three annual premiums in Platinum
Advantage Fund. This Fund comes with a guarantee of the highest unit price recorded on a daily basis over 7

126

years. It offers optimal participation in capital market growth, while safeguarding investments and any gains
thereon.
Plan at a glance:
Entry Age of Life Insured
Policy term

8 to 70 years of age
10 years

Pay term

5 years

Basic premium

Minimum Rs. 25,000 p.a. if paid annually

Minimum Rs. 30,000 p.a. if paid monthly, quarterly or
semi-annually
Monthly, Quarterly, Semi-annually or Annually

Premium payment frequency

Basic sum assured
Enhanced sum assured

10 x Basic Premium for entry ages below 45

7 x Basic Premium for entry ages 45 and above
Minimum Rs. 50,000 and not exceeding Basic Sum
Assured,
Entry Age 18 to 65 years

Based on above choices one will receive a host of benefits as below:

Maturity Benefit: one will receive the Fund Value at maturity.
In addition, one will receive an amount equal to the number of units in Platinum Advantage Fund times the
excess, if any, of Guaranteed Unit Price over the then prevailing unit price of this Investment Fund, if opted for
Guaranteed Option .
Death Benefit: In the unfortunate event of the death of the life insured prior to maturity, company will pay to
the nominee the greater of (a) the Fund Value as on date of intimation of death or (b) the Basic Sum Assured
reduced for partial withdrawals as follows:
Before the life insured attains the age of 60, the Basic Sum Assured payable on death is reduced by
partial withdrawals made in the preceding two years

Once the life insured attains the age of 60, the Basic Sum Assured payable on death is reduced by all
partial withdrawals made from age 58 onwards

In addition Enhanced Sum Assured will also be paid, if any.

Death benefit shall never be less than 105% of total premiums paid to date (excluding any applicable rider
premium and/or underwriting extras) less any previous partial withdrawals.
Surrender Benefit: In case of emergency fund requirements, one can surrender policy after the completion of
five policy years and receive the Fund Value at that time.
Top-Up Premium: If investor wish to increase investment in the policy then he/she has the freedom to invest
additional amount to their premium as Top-up premiums. In case of Guaranteed Option, investor is allowed to
Top-up investor investment after first 3 policy years.
Partial withdrawals: One can make unlimited partial withdrawals to meet any financial emergencies.
Policy Loans: One can meet financial needs by availing loan on policy
Rider options:

127

Critical Illness Rider: On diagnosis any of the four illnesses

Accidental Death and Disability Rider
Hospital care rider
Surgical Care Rider
Waiver of Premium Rider
Tax benefits: This plan offers tax benefits under Section 80C and Section 10 (10D) of the Income Tax Act, 1961
Under Section 80C, premiums up to Rs. 1,00,000 are allowed as a deduction from taxable income each year.
Under Section 10 (10D), the benefits receive from this plan are exempt from tax, subject to mentioned
exclusions.

128

Most Preferred Plan Exclusively For Women

LIC JEEVAN BHARATI-I
Introduction: LICs Jeevan Bharati-I has been designed exclusively for females. This is a money back plan
having optional accident benefit, Critical illness benefit & Congenital Disability Benefit as riders.
Benefits:
Encashment of Survival Benefit as and when needed:
The policyholder at her option may avail the survival benefit any time on or after its due date. If opted to avail
later, increased survival benefit at the rate decided by the corporation from time to time will be payable.
Flexibility to pay premiums in advance:
The mode of premium payment is only yearly under this plan. However, policyholder may pay the next yearly
premium in advance in installments (maximum up to 3 installments) during the year. If premiums are paid in
advance a premium rebate may be allowed as may be decided by the Corporation from time to time
Option to receive maturity proceeds in the form of an annuity:
The policyholder shall have the option to receive the maturity proceeds in the form of annuity. The rate of
annuity will be based on the annuity rates prevalent at the time of stipulated Date of Maturity.
Auto Cover:
After two years premiums have been paid, whenever premium payment is discontinued, the life cover for full
sum assured will continue for 3 years from the due date of first unpaid premium.
If death occurs during the Auto Cover period, then death benefit after deducting unpaid premiums, with interest
is payable along with the vested bonus, if any. The auto cover shall not be available for rider benefits.
Optional Riders:
The following riders are available under this plan:
Critical Illness Rider:
An amount equal to the Critical Illness Rider Sum Assured will be payable in case of diagnosis of defined
categories of critical illnesses. A person is eligible for this benefit up to a maximum age of 60 years but subject
to a maximum of the policy term. This benefit can be availed for a minimum Sum of Rs 50000 and for a
maximum Sum equal to the Sum assured under the basic plan subject to the maximum of Rs 5 lakh overall limit
taking all critical illness riders under all existing policies of the Life Assured.
Accidental benefit rider:
An additional amount equal to the Accident Benefit Rider Sum Assured is payable upon death or total and
permanent disability due to accident during the policy term. This benefit can be availed for a minimum sum of
Rs 50000 and for a maximum sum equal to the Sum Assured under the Basic Plan subject to the maximum of
Rs.50 lakhs.
Congenital Disabilities Benefit Rider (CDB):
This rider can be opted for by a female between the ages of 18yrs and 35 years.
An amount equal to 50% of the CDB Sum Assured is payable if the Life Assured gives birth to a child with
specified congenital disabilities. This benefit is available for a maximum of two such children and this benefit
ceases at the age of 40 years. This benefit can be availed for a minimum Sum of Rs 50000 and a maximum sum
of Rs 500000.

129

Eligibility condition (For Basic Plan):

Minimum age at entry
: 18 years (completed)
Maximum age at entry
: 55 years (nearest birthday)
Maximum age at maturity
: 70 years (nearest birthday)
Policy term
: 15 and 20 years
Minimum Sum Assured
: Rs. 50,000/Maximum Sum Assured
: Rs. 25,00,000/(Sum Assured shall be in multiples of Rs.5,000/-)
Sample premium rates for basic plan:

Tabular Annual Premium per 1000 SA

AGE/TERM

15 years

20 years

20

79.35

63.90

25

79.45

64.10

30

79.70

64.55

35

80.25

65.45

36

80.45

65.70

37

80.60

66.00

40

81.35

67.00

45

83.15

69.50

50

86.05

73.50

High Sum Assured rebates:

Sum Assured (in Rs)
1,00,000 to 4, 99,999
5, 00,000 and above

Rebate per thousand Sum Assured

Rs 2.00
Rs 4.00

Loan:
Loan is available under the plan after the policy acquires paid-up value.
Grace Period: A grace period of one-month but not less than 30 days will be allowed for payment of premium.
Paid up Value: If after at least three full years premiums have been paid and any subsequent premium not paid,
this policy shall not be wholly void after the expiry of three years Auto Cover Period ,but shall continue as a

130

paid up policy. The Sum Assured of the policy shall be reduced in the same proportion as the number of
premiums actually paid bears to the total number of premiums stipulated for in the policy, less any survival
benefit paid. This reduced Sum is called the paid up value. This paid up value shall be payable on the date of
maturity or at Life Assureds prior death. No survival benefit shall be payable under paid up policies. The rider
benefits will cease to apply if the policy is in lapsed condition and will not acquire any paid up value.
Surrender Value: The Guaranteed Surrender value will be available after the expiry of 3 policy years provided
the premiums have been paid for at least three years. The Guaranteed Surrender Value is equal to 30% of the
total amount of premiums paid excluding the premiums paid for the first year, any premiums paid towards
riders, all extra premiums that may have been paid less the amount of survival benefits paid earlier. The cash
value of any existing bonuses if any will also be paid.

R UNIQUE FORESIGHT ADGELICABLE ONLY FOR T

Most Preferred Term Plan

Bajaj Allianz iSecure Insurance Plan
Bajaj Allianz iSecure Insurance plan, a level cover term assurance plan that secures ones family's financial
needs by giving a level term cover for high sum assured, but at a low cost.
Bajaj Allianz iSecure Insurance Plan offers the choice to cover spouse jointly with oneself. Investor can
customize investors policy to suit investors requirements by following these simple steps:

Step 1: Choose either an individual or a joint life cover

Step 2: Choose sum assured(s), i.e, life cover

Step 3: Choose policy term and premium payment frequency

Step 4: If sum assured chosen is Rs.20,00,000 and above, one may choose lifestyle category - either
Preferred Non-Smoker, or Non-Smoker, or Smoker.*

Premium will be based on current age(s), sum assured(s), lifestyle category (if applicable), policy term and
premium payment frequency. In case of unfortunate demise, the death benefit will be the sum assured under the
policy.
*This categorisation is available for sum assureds of Rs.20,00,000. A Non-Smoker who has no abnormalities in
his medical examination/tests or family/personal history; has no risky avocation and does not have a risky
occupation, as decided by the Company, is classified as a Preferred Non-Smoker.
Eligibility Criteria:

131

Minimum Entry Age

Maximum Entry Age
Minimum Sum Assured
Maximum
Sum
Assured
Maximum Policy Term
Minimum
Maturity
Age
Maximum
Maturity
Age
Minimum Premium

18 years
60 years
Rs. 250000 for general category and Rs. 200000 for the categories split by
Preferred Non-Smoker, Non-Smoker & Smoker
No Limit
10,15,20,25 & 30 years
28 years
70 years

Sum Assured
< 2000000
>= 2000000

Yearly
1000
3000

Half Yearly
500
1500

Quarterly
250
750

Monthly
100
250

Premium Rates:
Bajaj Allianz iSecure Insurance Plan provides separate sets of premium rates for sum assured less than
Rs.20,00,000 and for sum assured of Rs.20,00,000 and above. The plan provides one with a separate set of
premium rates for the lifestyle categories - Preferred Non-Smoker, Non-Smoker, and Smoker, but only for sum
assured of Rs.20,00,000 and above.
The table below shows the premiums for an age of 30 years and a sum assured of Rs.25,00,000 under all the
lifestyle categories and for various policy terms:
Lifestyle Category
Smokers
Non-Smokers
Preferred
Smokers

Non-

10
3803
3469
3258

15
3973
3561
3353

Policy Term (Years)

20
25
4266
4753
3723
4047
3488
3780

30
5387
4486
4208

Premium Rebates:
The plan offers an attractive premium discount to investor for choosing high sum assured of 500,000 and more.
The high sum assured rebate (HSAR) for an individual life is as below:
SA Band
500,000 to 999,999
1,000,000
to
1,999,999
2,000,000
to
4,999,999
5,000,000 & above

< = 30
10.00%
17.50%

% Rebate (reb%) for Age Band

31 40
41 50
5.00%
2.50%
7.50%
5.00%

20.00%

10.00%

5.00%

2.50%
5.00%

25.00%

10.00%

7.50%

5.00%

> = 51
2.50%

132

The premium rate for joint life will be arrived at by allowing rebate on the total of the gross premium applicable
to the individual lives. The joint life rebate (JLR) for joint life is as below
Age of Older Life Assured
<= 40
5%

41 to 50
3%

>= 51
1%

JLR as % of the total Gross

Premium
applicable
to
the
individual lives
Tabular Premium is the rate per Rs. 1,000 Sum Assured for a given age and policy term.Total of the Gross
premium is the total of the calculated premiums for each individual after allowing for any HSAR for each
individual life. An additional rebate of 5% of gross premium will be available for policies taken through the
web.
Flexibilities:
a) Option to take Death Benefit in installments
Spouse/nominee will have the option to take the death benefit in annual installments over a settlement period of
ten (10) years from the date of intimation of death.
b) Option to include spouse at a later date
If one is not married at the inception of the policy, then he/she can include spouse at a later date, after marriage.
c) Option to take additional Riders
Option to choose the following riders:

Comprehensive Accidental Protection*

Critical Illness Benefit**

Hospital Cash Benefit**

* The Bajaj Allianz Comprehensive Accidental Protection (CAP) rider includes the accidental death benefit,
accidental permanent total/partial disability benefit and waiver of premium benefit.
**Hospital Cash Benefit and Critical Illness Benefit riders can be taken only at inception of the policy.
d) Advance Premium Payment
Get discount on premiums that are paid in advance. The rate of discount will be declared by the company
every financial year. The rate of discount for the FY 2010-11 & 2011-12 is 7% per annum
If any advance premium has been paid, then, on death or surrender, such discounted advance premium(s)
paid-but not -yet-due will be refunded (without any interest).
Sum Assured Multiples
Sum Assured can be chosen in specific multiples only (as stated below):
Sum Assured Band
Upto Rs. 4,00,000
Rs.
4,00,00045,00,000
Rs. 45,00,000 & +

Multiple
Rs. 50,000
Rs. 1,00,000
Rs. 5,00,000

133

Tax Benefits:

Premiums paid are eligible for tax benefits as per Section 80C of the Income Tax Act
Death benefit(s) are eligible for tax benefits as per Section 10 (10D) of the Income Tax Act.
In case of changes in any relevant tax laws, the same will be applied from time to time.

D. GOLD :
Preferred Schemes are:

C. Physical Gold Scheme of Tanishq

Tanishq Swarna Nidhi Scheme
Golden Harvest Plan

D. Gold Related Schemes of Reliance

My Gold Plan
Gold ETF
Gold Saving Fund

134

R*Shares Gold ETF

Investment Objective: Is to seek to provide returns that closely correspond to returns provided by price of gold
through investment in physical gold
Fund Data:
Type
Date of allotment
Inception Date
Quarterly AAUM
Exchange Listed
NSE Symbol
Entry Load

Exit Load
Minimum Investment

An Open ended Gold Exchange Traded Fund

21 Nov 2007
22 Nov 2007
Rs 2,550.39 Crores(30/6/2013)
NSE
RELGOLD
Not Applicable
In terms of SEBI no entry load will be charged by
the scheme to the investor effective August
1,2009
Nil
Authorized Participants may buy the units on any
business day for the scheme directly from the
mutual fund at applicable NAV and transaction
charges, if applicable, by depositing Gold or cash,
value of which is equal to creation size.
Each creation unit consists of 1000 units and cash
components, if any, R*Shares Gold ETF. Others

135

can buy the units in multiple from the exchange

where they are traded.

NAV as on 31st July 2013

R*Shares Gold ETF-Dividend Payout

Rs 2,611.2767/-

Investment Objective: Is to seek to provide returns that closely correspond to provide returns that closely
correspond to returns provided by R*Shares Gold ETF
Fund Data:
Type
Date of allotment
Inception Date
Quarterly AAUM
Exchange Listed
Entry Load

Exit Load

An Open ended Fund of Fund Scheme

7th March 2011
11th March 2011
Rs 1,964.99 Crores(30/6/2013)
NSE
Not Applicable
In terms of SEBI no entry load will be charged by
the scheme to the investor effective August 1,2009
2% - If redeemed or switched out on or before

136

completion of 1 year from the date of allotment

of units
Nil- If redeemed or switched out after completion
of 1 year from the date of allotment of units
Rs 5,000 and in multiples of Re.1 thereafter
Reliance any time money card w.e.f. 19th Sep 2011

Minimum Investment
Special Feature
NAV as on 31st July 2013
Reliance Gold Savings Fund Direct Plan Growth Option

Rs 13.1222

Reliance Gold Savings Fund Dividend Plan

Reliance Gold Savings Fund Growth Plan
Reliance Gold Savings Fund Direct Plan Dividend
Option

Rs 13.1004
Rs 13.1004
Rs 13.1222

GOLDEN HARVEST PLAN FROM

Under this scheme a customer needs to pay a fixed amount every month with Tanishq for 11 months. The 12 th
month installment is paid by Tanishq hence a customer can buy for more than what he has paid. In the scheme
the minimum installment value is 500 Rs & it can increase to any amount as long as it is in multiples of Rs 500.

Scheme type
Investor pay
No. of months
Total amount paid
Discount
Total amount
Time period

111
3000
11
11*3000=33000
3000
36000
After 12 months

After completion of 12 months i.e. term of plan, customer can purchase gold as per prevailing market price.

137

Advantages with golden harvest:

Better value
Plan in advance
Flexibility in purchase
Added advantage

RELIANCE MY GOLD PLAN and TANISHQ SWARNA NIDHI SCHEME

Reliance My Gold Plan offers customers the unique opportunity to start accumulating physical
gold using a daily average pricing methodology. A minimum subscription of Rs.1000 per month translates to
accumulation of gold for as low as Rs. 50 per day. World Gold council is marketing partner for Reliance My
Gold Plan.
Tanishq Swarna Nidhi scheme allows customers to book grams of gold every month for 12 months post,
customer can redeem the grams booked in form of Tanishq jewellery at gold rate applicable at the time of
redemption, without having to pay even if gold rate increases.
Basis of comparison
Flexibility

Assured Purity

Amount required

Reliance My Gold Plan

Choice of obtaining the accumulated Gold
grams in the form of coins and/or bars
across multiple outlets.
24 karat gold of 995fineness or more
credited to customers account up to 4
decimal places.
Initial subscription: Rs1000 & in
multiples of 100 thereafter.
Monthly subscription: Rs 1000 & in
multiples of 100 thereafter.
Additional subscription: Rs 1000 & in
multiples of 100 thereafter.

Tanishq Swarna Nidhi scheme

Scheme valid for jewellery purchase only.

NA

Fixed amount every month & minimum amount

being Rs 2000 (multiples of Rs 1000)

138

Gold
Booked/Purchased

On daily basis

On monthly basis

Benefits

NA

Lock in period

6 months from date of initial subscription.

Become eligible for Tanishq loyalty

program Anuttara. investor will receive
points for every jewellery purchase that
investor meet at Tanishq & redeem the
coins while shopping at stores like Titan,
Helios, Fastrack, TATA Eye plus
Extra discount at the time of redemption
20% on gold, polka, kundan jewellery.10%
on diamond jewellery.5% on platinum &
studded solitaire.
No locking period.

Charges

NA

Payment options

Of daily gold price- administration

charges
In case the customer doesnt take
delivery of coins etc on time customer
shall be liable to pay safekeeping
charges at 0.50% rate p.a. on invoice
amount.
Cheque, DD, ECS, direct debit

Tenure

1 year to 15 years

Cash, credit card, debit card & post dated

cheque.
1 year

6.2 RECOMMENDATIONS

It is recommended that client awareness program has to be conducted by the company by giving advertisements
in business newspapers & magazines regarding the services offered. There should be a regular updates to the
investors regarding their investment through mails messages etc. It seems that the companys research team is
very active & well built than those of the others thus it should try to provide exposure to its clients, offer better
services in terms of charges etc. Charges of the services provided to the clients should be reasonable & viable.
As it is clear from the research that people of Raipur prefer life insurance plans over other investment options,
thus the company should try to provide necessary plans so as to satisfy & attract the clients. Also the most
preferred mutual funds in Raipur are ICICI Prudential Services Industries Fund, Reliance Index Fund Nifty (G),
SBI Magnum Income Fund, and SBI Emerging Business Fund so the company should try to boost the sales of
these funds so that it can aid in the profit of the company. Company can also introduce some new gold schemes
for women as they favour investing in gold than in other investment options.

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7. Conclusion
140

CONCLUSION
Reliance Securities Limited is a Reliance Capital company and part of the Reliance Group. Reliance Securities
has enough number of branches all over India. It provides the facility of trading, Mutual Fund, Life Insurance,
Gold and therefore whatever the customer demands the company has its package. The company also has a very
good research team at its Head Office which has 80 90% of hit ratio. The company also got INDIAS BEST
MARKET ANALYST AWARD 2013 from ZEE BUSINESS. The company has the advantage of the existing
customers where their level of faith and their view about the company to the outside world is helping hand for
the company to expand its business.
The study shows how different factors and instruments have different risk, returns and tax considerations while
taking investment decisions which are of diverse natures. From this study it is observed that people of Raipur
mostly prefer Life Insurance policy of LIC and are less aware of Life Insurance policies of different companies.
Economic liberalization has accelerated the pace of development in the securities market. In India, the role of
securities market has undergone structural transformation with the introduction of computerized online trading
and interconnected market system. People invest in Mutual Fund as the risk is less. It is very difficult to come to
any definite conclusions that how a particular market instrument is doing and how they will perform in the
future. The study also draws an important conclusion from the study that the investors are a keen to invest in
long term and less risk products, much interested to earn the good return on their investments.
The study also takes into account different preferred companies and their preferred plans which will somehow
help investors in deciding the correct investment for their savings and will also help companies to understand
what customers want.
I am very much thankful to Reliance Securities for providing us the opportunity for doing training programme
in the organization as management trainee. While doing Summer Internship Program in the reputed broking
firm I have got a chance for knowing and analyzing the share market, Mutual Fund, Life Insurance, Gold. I was

141

also able to know about the business environment and business ethics of the business world. I came to know
about what does a firm or an organization require or wants from a employee or a trainee.
.

8. Glossary
142

GLOSSARY

AMFI: Association of Mutual Funds in India: is the umbrella body of all the Mutual Funds registered
with SEBI. It is a non-profit organisation committed to develop the Indian Mutual Fund Industry.
AMC: Asset Management Company: The Company that manages a mutual fund is called an AMC. For
all practical purposes, it is an organized form of a "money portfolio manager".
ATM: At the Money: An at the money option is an option that would lead to zero cash flow if it is
exercised immediately.
AAUM: Average Asset under Management:
AUM: Asset under Management: is a financial term denoting the market value of all the funds being
managed by a financial institution on behalf of its clients, investors, partners, depositors, etc
BFSI: Banking, Financial services & insurance: is an industry term for companies that provide a range
of financial products/services.
BRIC: Brazil, Russia, India & China: BRIC is a grouping acronym that referred to the countries of
Brazil, Russia, India, China, which are all deemed to be at a similar stage of newly advanced economic
development.
BSE: Bombay Stock Exchange: Bombay Stock Exchange is the oldest stock exchange not only in India
but in entire Asia. Its history is synonymous with that of the Indian Share Market history. BSE started
functioning with the name, The Native Share and Stock Broker's Association in 1875. It got
Government of India's recognition as a stock exchange in 1956 under Securities Contracts (Regulation)
Act, 1956.
BSLI: Birla Sun Life Insurance: (BSLI) is a joint venture between the Aditya Birla Group & Sun Life
Financial Inc., one of the leading international financial services organizations from Canada.
CDSL: Central Depository Services India Ltd.: It is the second Indian Central Securities Depository
based in Mumbai. Its main function is holding securities either in certified or uncertified
(dematerialized) form, to enable book entry transfer of securities.
CEIS: Congregational Economic Impact Study

143

CRISIL: Credit Rating & Information Services of India Limited: A global analytical company
providing ratings, research and risk & policy advisory services.
CNC: Cash N Carry: Invest in investor preferred stock by taking delivery using this product.
CNX: Crisil NSE Index: ensures common branding of indices, to reflect the identities of both the
promoters i.e NSE and CRISIL.
DCA: Department of Company Affairs: now known as Ministry of Company Affairs is an Indian
government ministry. It is charged with administering the Companies Act 1956 and other acts related to
Indian Private Sector.
DEMAT: Dematerialized: Dematerialization or "Demat" is a process whereby securities like shares,
debentures etc, are converted into electronic data and stored in computers by a Depository
DEA: Department of Economic Affairs: It is the nodal agency of the Union Government to formulate
and monitor countrys economic policies and programs having a bearing on domestic international
aspects of economic management. A principal responsibility of this Department is the preparation of
the Union Budget annually.
DRF: De-mat Request Form: An investor having securities in physical form must get them
dematerialized, if he intends to sell them. This requires the investor to fill a De-mat Request Form
(DRF) which is available with every DP and submit the same along with the physical certificates
DP: Depository Participant: DP could be organizations involved in the business of providing financial
services like banks, brokers, financial institutions etc. DPs are like agents of Depository
ELSS: Equity Linked Savings Scheme: These schemes offer tax incentives to the investors under tax
laws as prescribed from time to time and promote long term investments in equities through Mutual
Funds
EPS: Earnings per Share: The portion of a companys profit allocated to each outstanding share of
common stock.
ETF: Exchange Traded Funds: A security that tracks an index, a commodity or a basket of assets like
an index fund, but trades like a stock on an exchange. ETFs experience price changes throughout the
day as they are bought and sold
GETF: Gold Exchange Traded Fund- Gold ETFs are exchange traded funds that are meant to track
closely the price of physical gold. Each unit of the ETF lets the investor own 1gm of gold without
physically owning it.
GSB: Guaranteed Survival Benefit -Guaranteed survival benefits are benefit given to the policy holder
during or upon completion of the policy tenure.
HDFC: Housing Development Finance Corporation- HDFC Bank Limited is an Indian financial
services company based in Mumbai, Maharashtra that was incorporated in August 1994. HDFC Bank is
the fifth largest bank in India by assets.
HNI: High Net worth Individual -Individuals having investable finance (financial assets not including
primary residence) in excess of US$1 million.
ICICI: Industrial Credit & Investment Corporation of India- ICICI Bank is an Indian multinational
bank and financial services company headquartered in Mumbai. Based on 2013 information, it is the
second largest bank in India by assets.
ISIN: International Securities Identification Number- It uniquely identifies a security. Its structure is
defined in ISO 6166. Securities for which ISINs are issued include bonds, commercial paper, stocks
and warrants.
ICI: Investment Company Institute- ICI encourages adherence to high ethical standards, promotes
public understanding of funds and investing, and advances the interests of investment funds and their
shareholders, directors, and advisers.
INR: Indian Rupee -The Indian rupee is the official currency of the Republic of India.
IPO: Initial Public Offering-It is a type of public offering where shares of stock in a company are sold
to the general public, on a securities exchange, for the first time.
IPE: Institute of Public Enterprise- It is a non-profit educational society established in 1964. It is
devoted to Education, Training, Research and Consultancy for business enterprises in the public and
private sector.

144

IRDA: Insurance Regulatory & Development Authority- It is an agency of Government of India for
insurance sector supervision and development
ITC: India Tobacco Company- ITC Limited or ITC is an Indian conglomerate headquartered in
Kolkata, West Bengal. Its diversified business includes four segments: Fast Moving Consumer Goods,
Hotels, Paperboards, Paper & Packaging and Agri Business.
ITM: In the Money- In the money means that investor stock option is worth money and investor can
turn around and sell or exercise it.
JV: Joint Venture- A joint venture (JV) is a business agreement in which the parties agree to develop,
for a finite time, a new entity and new assets by contributing equity.
LIC: Life Insurance Corporation- Life Insurance Corporation of India is the largest insurance group
and investment company in India. It's a state-owned company where Government of India has
100%stake
MF: Mutual Fund- A mutual fund is a type of professionally managed collective investment vehicle
that pools money from many investors to purchase securities
MIS: Margin Intraday Square off- Clients can buy and sell specific stocks during the day. Clients need
to square off their positions before 3.20pm
MT: Mettler Toledo- It is global provider of precision instruments and services for professional use.
MTM: Mark to Market- Mark to market aims to provide a realistic appraisal of an institution's or
company current financial situation.
NA: Not Available
NAV: Net Asset Value is the value of an entity's assets less the value of its liabilities, often in relation to
open-end or mutual funds.
NBFC: Non Banking Financial Company- These are financial institutions that provide banking services
without meeting the legal definition of a bank.
NDTV: New Delhi Television Limited- New Delhi Television Limited is an Indian commercial
broadcasting television network founded in 1988.
NMDC: National Mineral development Corporation- The NMDC Limited is a state-controlled mineral
producer of the Government of India.
NRML: Normal- a Reliance product that allows leveraged positions in cash segments.
NSE: National Stock Exchange- It is stock exchange located in Mumbai, India. It is the 11th largest
stock exchange in the world by market capitalisation.
NSDL: National Securities Depository Ltd.- NSDL, the first and largest depository in India, established
in August 1996 and promoted by institutions of national stature responsible for economic development
of the country has since established a national infrastructure of international standards that handles
most of the securities held and settled in dematerialised form in the Indian capital market.
OTM: Out of the Money- A call option with a strike price that is higher than the market price of the
underlying asset, or a put option with a strike price that is lower than the market price of the underlying
asset
PAN: Permanent Account Number- is unique alphanumeric combination issued to all juristic entities
identifiable under the Indian Income Tax Act 1961.
RBI: Reserve Bank of India- is India's central banking institution, which controls the monetary policy
of the Indian rupee.
SA: Sum Assured- The sum assured is the amount of money an insurance policy guarantees to pay up
before any bonuses are added
SBI: State Bank of India- is a multinational banking and financial services company based in India.
SC: Supreme Court- is the highest judicial forum and final court of appeal. It is a federal court and
guardian of the Constitution.
SEBI: Security Exchange Board of India- is the regulator for the securities market in India
SENSEX: Sensitivity Index-is a free float market capitalization weighted stock market index of
companies.
SIP: Systematic Investment Plan- is a vehicle offered by mutual funds to help investors to save
regularly.

145

S&P: Standard & Poors- is a well known American Financial Services Company. It is known for stock
market indices.
TCS: TATA Consultancy Services- is an Indian Multinational information technology services,
business solutions and consulting company headquartered in Mumbai, Maharashtra.
TER: Total Expense Ratio- is a measure of the total cost of a fund to investor. Total cost may include
various fees and other expenses.
TOCOM: Tokyo Commodity Exchange- is a non profit organisation and regulates trading of futures
contracts and option product of all commodities in Japan.
ULIP: Unit Linked Insurance Plan- is a product offered by insurance companies that unlike a pure
insurance policies, gives investors the benefits of both insurance and investment under a single
integrated plan.
UTI: Unit Trust of India- is a financial organisation in India, which was created by the UTI act passed
by the Parliament in 1964

9. List of Figures

146

LIST OF FIGURES
S. No.

Figure Description

Page Number

Fig 1

Trend In Aum

12

Fig 2

Indian Insurance Market 2000-2011

13

Fig 3

Investment Pyramid

19

Fig 4

Dematerialization Process

21

Fig 5

Trading Network

25

Fig 6

Payoff For A Buyer Of Futures

31

Fig 7

Payoff For A Seller Of Futures

31

Fig 8

Mutual Fund Operation Flow Chart

40

Fig 9

Structure Of Mutual Fund

41

Fig 10

Investment Avenues Of Mutual Fund

42

Fig 11

Types Of Mutual Funds

43

Fig 12

Summary Of Mutual Fund

47

Fig 13

Mutual Fund Style Box

49

Fig 14

Types Of Life Insurance

56

Fig 15

Child Plan

59

147

Fig 16
Fig 17
Fig 18
Fig 19
Fig 20
Fig 21
Fig 22
Fig 23

Fig 24
Fig 25
Fig 26

Fig 27
Fig 28

Fig 29
Fig 30
Fig 31
Fig 32
Fig 33

Fig 34
Fig 35
Fig 36
Fig 37
Fig 38

As Per Age Of Respondents :

Investment Pattern
As Per Gender Of Respondents :
Investment Pattern
As Per Occupation Of Respondents :
Investment Pattern
Overall, Investment Pattern Of
Respondents
Equity/Derivatives :
Investment Pattern As Per Age
Equity/Derivatives : Investment
Pattern As Per Gender
Equity/Derivatives
Investment
Pattern As Per Occupation
Equity/Derivatives: Respondents
Inclination Towards Broking Firms

89

Equity/Derivatives: Delivery And

Intraday Segment
Mutual Funds: Investment Pattern As
Per Age
Mutual Funds: Investment Pattern As
Per Gender

95

Mutual Funds: Investment Pattern As

Per Occupation
Mutual Funds: Respondents
Inclination Towards Asset
Management Companies
Mutual Funds: Modes Of PaymentBulk And Sip
Life Insurance: Investment Pattern
As Per Age
Life Insurance: Investment Pattern
As Per Gender
Life Insurance: Investment Pattern
As Per Occupation
Life Insurance : Life Insurance
Respondents Inclination Towards
Life Insurance Companies
Life Insurance: Plans-Term,
Traditional And ULIP
Gold : Investment Pattern As Per
Age
Gold : Investment Pattern As Per
Gender
Gold : Investment Pattern As Per
Occupation
Gold : Respondents Inclination
Towards Gold Schemes

97

90
91
92
93
93
94
95

96
96

98

98
99
99
100
101

101
102
102
103
103

148

10. Bibliography and

References

149

BIBLIOGRAPHY
Websites referred:

www.religare.com
www.sharekhan.com
www.nirmalbang.com
www.plindia.com
www.reliancemutual.com
www.icicipruamc.com
www.sbimf.com
www.hdfcfund.com
www.tatamutualfund.com
www.reliancelife.com
www.birlasunlife.com
www.iciciprulife.com
www.licindia.com
www.bajajallianz.com
www.reliancecapital.co.in
Titan.co.in/Tanishq
www.moneycontrol.com
bseindia.morningstar.co.in
www.investopedia.com
economictimes.indiatimes.com
www.wikipedia.com
www.morningstar.in
www.irda.gov.in
www.amfiindia.com

Persons contacted:

Bajaj Allianz:
Anurag Agrawal (Senior Sales Manager): 9826176746
Religare:
Manmeet Singh Ahuja: 9425507000
ShareKhan:
Pradeep Kumar Jain: 9425240678
Nirmal Bang:
Manish Kumar Shukla (Sales Manager): 9993457183
Prabhudas Liladher:

150

Dhiraj.p.Jain: 07714000021
Research Studies Referred:
A study on investment pattern of investors on different products conducted at Asit c. mehta investment
intermediates.
Journals Referred:

Factors Influencing Investment Decision of Generations in India: An Econometric Study ISSN 2229
3795 Assistant Professor, ABV-Indian Institute of Information Technology and Management

151