PROJECT REPORT

ON
BIRLA SUN LIFE MUTUAL FUND
STUDY OF MUTUAL FUND AND INVESTORS
PERCEPTION REGARDING THE AMCs.
Partial fulfillment of continuous internal assessment as
summer internship project to Amity Business School
MBA General Class of 2009
SUBMITTED BY:
UNDER THE GUIDANCE OF:
MR. VIRAJ JONEJA
SUBMITTED TO:
Ms. ANUBHA SRIVASTAVA
AMITY BUSINESS SCHOOL (AUUP)

ACKNOWLEDGEMENT
1

This Project Report is a result of efforts, time and skills contributed by a number of
people. I would like to take this opportunity to thank all of those who have worked
towards successful completion of this project report.
At the onset I would like to thank Mr.Viraj Joneja(company guide), Ms. Rashi Tickoo
(Operation Manager), for their valuable inputs and ideas supplied in the beginning. They
took great pains to show me the right path and also held the torch for me to walk that
path. Periodic meetings with them during the last two months have been enlightening not
just for the purpose of project report but also for my overall intellectual abilities.
I also sincerely acknowledge the help provided by my faculty guide Ms. Anubha
Srivastava, my institute and the resources made available to me in the form of latest
literature, journals and books on Mutual Funds as well as the inputs from the websites of
the AMCs have gone a long way in culmination of this summer training project report.
Above all I would like to thank my parents without whose blessings I would not have
been here where I am today.
Finally, I am grateful to my friends and fellow students currently working in
organizations of Mutual Funds for facilitating the search of raw data for the purpose of
research.

DECLARATION

I hereby declare that the project done by me is true to my knowledge .The project
duration was of two months (5/05/08 to 4/07/08).The information collected by me is
authentic and is done through data analysis and interpretation and I have a thorough
knowledge of the project.
I further declare that this project report has not been submitted to any other university or
Institute for the award of any Degree or Diploma.

Place: Jalandhar
Date: 2 July, 08

Aesha Thakur
Amity Business School,
Noida.

CERTIFICATE

This is to certify that Aesha Thakur, student of Master of Business Administration class
of 2009 of Amity Business School, Amity University; enrollment number A0101907022
has

undertaken

summer

internship

training

at

BIRLA SUN

LIFE ASSET

MANAGEMENT CO. PVT. LTD. from 5nd May, 2008 to 04 July, 2008. The project
report has been prepared in partial fulfillment of Master of Business Administration to be
awarded by Amity University, Uttar Pradesh. To the best of my knowledge this piece of
work is original and no part of the report has been submitted by the student to any other
institute or university earlier.

Date:

Ms. Anubha Srivastava

TABLE OF CONTENTS
4

S.NO

2.
3.
4.
5.
6.
7.

PARTICULARS
EXECUTIVE SUMMARY
INTRODUCTION
1.A WHAT IS MUTUAL FUND
1.B ADVANTAGES OF MUTUAL FUND
1.C DISADVANTAGES OF MUTUAL FUND
MUTUAL FUNDS INDUSTRY IN INDIA
STRUCTURE
REGULATORS IN INDIA
TYPES OF FUNDS
COMPANY OVERVIEW
TOP FIVE PERFORMING FUNDS OF BIRLA SUN

8.
9.
10
11.
12.
13.
14.
15.
16.

LIFE MUTUAL FUNDS

7.A BIRLA SUN LIFE EQUITY FUND
7.B BIRLA MIDCAP FUND
7.C BIRLA SUN LIFE FRONTLINE EQUITY FUND
7.D BIRLA EQUITY 95 FUND
7.E BIRLA SUN LIFE TAX RELIEF FUND
COMPARISON
OBJECTIVE OF THE STUDY
RESEARCH METHODOLOGY
LIMITATIONS OF THE STUDY
PURPOSE OF THE STUDY
DATA ANALYSIS AND INTERPRETATION
CONCLUSION
ANNEXURE
BIBLIOGRAPHY

1.

PAGE NO.
7
9
10
12
13
16
19
21
29
33
33
34
35
37
38
39
43
44
45
47
50
68
71
74

EXECUTIVE SUMMARY
Everyday we see new forays into the mutual fund industry of India, with the introduction
of new schemes and entry of new players. Slowly and slowly, the people in India are
getting more and more educated about the mutual funds. Earlier they used to invest by
depositing in the bank, opening an account in the post offices etc. In India, a mutual fund
is constituted as a trust and the investor subscribes to the units of a scheme launched by
the fund, which is where the term Unit Trust comes from. An investor can buy the shares
from a company only when the company makes a share issue. At other times, a share can
be purchased from another investor through the stock exchange if the share is listed.

This project helped me analyze the difference between the organizational realities and the
theories that have been taught in my academic sessions and also gave me a real
experience of the corporate world.
This project also helped me in understanding the working/functioning of the organization
in a better way. It also taught me how to take every experience in the right way and learn
from each one. In order to carry out the project properly, research was undertaken.
Research uses both primary and secondary sources of data. The research tools applied for
the analysis of data were mainly statistical tools. On the basis of analysis and the
interpretations of the results obtained certain recommendations and conclusions have
been derived from the research.
The main limitation faced was in gathering of the primary data which was in the form of
questionnaire, as people were reluctant to give personal information and time to fill the
questionnaire.

INTRODUCTION
MUTUAL FUND INDUSTRY
Not so long ago a common investor when asked about his investing would have pointed
out to the Fixed Deposits that he holds with the bank, the Government Bonds that he has
invested in, the deposits with the Post Office and the basket of shares (if any) that he
holds in his kitty. The common man was not aware of the alternate route to investment,
that of Mutual Funds. Gradually and slowly, with the privatization and opening up of
international borders, people are getting more and more informed about other avenues of
investment, be it Insurance or Mutual Funds. Consumption driven growth in the Indian
6

markets and globalization have brought several world-class products and the solution to
the doors of Indian consumers. Investors attach utmost importance to convenience,
quality of services, choice of the products and solution, speed of delivery proper manager
for their funds. They also demand higher standards of services and lower cost. To suit
endless needs of the customers there are various options available with them for
investment.
However, risk diversification is the very purpose of the mutual funds. It is
the safest way to play the market. Gradually people in India, are getting educated more
and more about Mutual Funds through the interplay of the Banks and AMCs. Every day
we see new forays into the mutual fund industry with the entry of new players and the
introduction of new schemes. The investors are getting informed day by day. The present
generation is more open to the idea of investing in a mutual fund, since they are very
much aware of the global scenario. India is observing this transition and soon our
investors would be displaying better investment habits than they had exhibited
previously.
Personal finance discipline demands every individual to plan for savings against
current income and expenditure. As one goes on in life, the standard of living the rises,
the expenditure to meet those needs also increases and needs also increases. Without
proper financial planning, the future can be a miserable struggle to meet these demands.
Role of the financial system is to enthuse economic development. As investors are getting
more educated and aware, they look for innovative investment instruments so that they
are able to reduce investment risk, maximize returns along with certain level of
convenience and minimize transaction costs. As a result there has been advent of
numerous innovative financial instruments such as company deposits, bonds, insurance
and mutual funds.
Mutual funds score over all other investment options in terms of liquidity, safety and
returns are as transparent and convenient as it can get.

WHAT IS MUTUAL FUND

A Mutual Fund is a trust which pools the savings of a number of investors who share
common financial goal. The money thus collected is invested by the fund manager in
different types of securities depending upon the objective of the scheme. These could
range from debentures to shares to money market instruments. The income so earned
through these investments and the capital appreciation realized by the scheme are shared
by its unit holders in proportion to the number of units which are owned by them. Thus a
Mutual Fund is the most suitable investment for the common man as it offers an
opportunity to invest in professionally managed and diversified portfolio at a relatively
low cost. The savings of all the investors are put together to increase the buying power
and hire a professional manager to invest and monitor the money.

In India, a mutual fund is constituted as a Trust and the investor subscribes to the units
issued by fund. Since each owner is a part owner of a mutual fund, it is necessary to
establish the value of his part. In other words each share or unit that an investor holds
needs to be assigned the value.. This is generally called the Net Asset Value (NAV) of one
unit or one share. The value of investors part ownership is thus determined by the NAV of
the number of units held.

ADVANTAGES OF MUTUAL FUNDS:

 Professional management-Even if an investor has a big amount of capital available to

him, he gets benefit from the professional management skills brought in by the fund in
the management of investors portfolio. The investment management skills brought in,
along with the needed research into available investment options ensure a much better
return than what an investor can manage on his own.
Diversification of Risk- An investor in a mutual fund acquires a diversified portfolio,
no matter how small his investment is. Diversification reduces risk of loss, as compared
to investing directly in one or two shares or debentures or other instruments. When an
investor invests directly, all the risk of potential loss is his own. While investing in pool
of funds with other investors, any loss on one or two securities is also shared with other
investors. This risk reduction is one of the most important benefits of a collective
investment vehicle like mutual fund.
Liquidity- Often, investors hold shares or bonds which they cannot directly, easily and
quickly sell. Investment in mutual funds, on the other hand, is more liquid. An investor
can liquidate the investment, by selling the units to the fund if open-end, or selling them
in the market if the fund is close-end, and collect funds at the end of each period specified
by the mutual fund or the stock market.
Reduction of Transaction Cost- A direct investor bears all the cost of investing such
as custody of security and brokerage. When going through a fund, the investor has the
benefits of economies of scale; the funds pay a lesser costs because of larger volumes,
benefits passed on to its investors.
Convenience and Flexibility- Mutual fund management companies often offer many
investor services that a direct market investor cannot get. Investors can easily transfer
their holdings from one scheme to the other; get updated on market information, and so
on.

10

 Regulation- Securities Exchange Board of India (SEBI), the mutual funds regulator
has clearly defined rules, which govern mutual funds. These rules relate to the formation,
administration and management of mutual funds and also prescribe disclosure and
accounting requirements. The high level of regulation seeks to protect the interest of
investors.

DISADVANTAGES OF MUTUAL FUNDS:

Professional Management- Many investors debate over whether or not the so-called
professionals are any better than the common investor at picking stocks. Management is
by no means infallible, and, even if the fund loses money, the manager still takes his/her
cut.

Costs - Mutual funds don't exist solely to make the life easier--all funds are in it for a

11

profit. The mutual fund industry is masterful at burying costs under layers of jargon.
These costs are very complicated

Taxes - When making decisions about the money, fund managers don't consider the
personal tax situation. For example, when a fund manager sells a security, a capital-gain
tax is triggered, which affects how profitable the individual is from the sale. It might have
been more advantageous for the individual to defer the capital gains liability.
Dilution - It's possible to have too much diversification. Because funds have small
holdings in so many different companies, high returns from a few investments often don't
make much difference on the overall return.

MUTUAL FUNDS IN INDIA- A BRIEF HISTORY

The mutual fund industry in India started in 1963 with the formation of Unit Trust of
India, at the initiative of Government of India and Reserve bank. The objective was to
attract the small investors and introduce them to market investments. Since then, the
history of mutual funds in India can be broadly divided into three distinct phases
PHASE 1- 1964-87 (UNIT TRUST OF INDIA)

12

In 1963, UTI was established by an Act of Parliament and given a monopoly.

Operationally, UTI was set up with the help of the Reserve Bank of India, but was later
de linked from the RBI. The first and still one of the largest schemes, launched by the
UTI was the Unit Scheme 1964. In 1970s and 80s, UTI started innovating and offering
different schemes to suit the needs of different classes of investors. Unit Linked
Insurance Plan (ULIP) was launched in 1971.UTI is still the largest player with the
largest corpus of investible funds among all mutual funds currently operating in India.

PHASE 2- 1987-1993 (ENTRY OF PUBIC SECTOR FUNDS)

1987 marked the entry of non-UTI, Public Sector mutual funds, bringing in competition.
With the opening of the economy, many public sector banks and financial institutions
were allowed to establish mutual funds. The State Bank of India established the first nonUTI mutual funds-SBI Mutual Fund-in November 1987. From 1987 to 1992-93, the fund
industry expanded nearly 7 times in terms of Assets under Management. During this
period, investors were shifting from the bank deposits to mutual funds, as they started
allocating larger part of their savings and financial assets to fund investments.

PHASE 3- 1993-1996 (EMERGENCE OF PRIVATE FUNDS)

Permission was granted for the entry of private sector funds in 1993, giving the investors
a broader choice of funds to choose from and increasing competition for the existing
public sector funds. Foreign fund management companies were also allowed to operate
mutual funds. These private funds brought in with them the latest product innovations,
investment management techniques and investor servicing technology that make the
Indian mutual fund industry today a vibrant and growing financial intermediary. During

13

the year 1993 94, 5 private sector mutual funds launched their schemes followed by six
others in 1994-95.

PHASE 4- 1996 (SEBI REGULATION FOR MUTUAL FUNDS)

Liberalization and deregulation of the Indian economy has introduced competition and
provided impetus to the growth of the industry. More investor friendly regulatory
measures have been taken both by SEBI to protect the investor and by the government to
enhance investors returns through these benefits. A comprehensive set of regulations for
all mutual funds operating in India was introduced with SEBI (Mutual Fund)
Regulations,1996.these regulations set uniform standards for all funds and will eventually
be applied in full to Unit Trust if India as well, even though UTI is governed by its own
UTI Act.
1999 marks the beginning of a new phase in the history of mutual fund industry in India,
a phase of significant growth in terms of both amounts mobilized from investors and
assets under management.

PHASES IN MUTUAL FUND INDUSTRY INDIA

Table 1
phases
st

1 phase
nd

years

Number

Sectors

AUM

1964-

of MF
1

UTI

6700cr.

Public

47004cr.

1987
phase 1987-

14

rd

phase

1993
19932003

33

sector
Private

121805cr.

sector

GRAPH 1

STRUCTURE

15

SPONSOR
Sponsor is the person who acts alone or in combination with another body corporate
establishes a mutual fund. Sponsor must contribute at least 40% of the net worth of the
Investment Managed and meet the eligibility criteria prescribed under the Securities and
Exchange Board of India (Mutual Funds) Regulations, 1996.
TRUST
The Mutual Fund is constituted as a trust in accordance with the provisions of the Indian
Trusts Act, 1882 by the Sponsor. The trust deed is registered under the Indian
Registration Act, 1908.

16

TRUSTEE
Trustee is usually a company (corporate body) or a Board of Trustees (body of
individuals). The main responsibility of the Trustee is to safeguard the interest of the unit
holders and also ensure that the AMC functions in the interest of investors and in
accordance with the Securities and Exchange Board of India (Mutual Funds) Regulations,
1996. At least 2/3rd directors of the Trustee are independent directors who are not
associated with the Sponsor in any manner.
ASSET MANAGEMENT COMPANY (AMC)
The AMC is required to be approved by the Securities and Exchange Board of India
(SEBI) to act as an asset management company of the Mutual Fund. At least 50% of the
directors of the AMC are independent directors who are not associated with Sponsor in
any manner. The AMC must have the net worth of at least 10 crores at all times.
CUSTODAIN AND DEPOSITORIES
Mutual funds are in the business of buying and selling of securities in large volumes. The
Custodian is appointed by the Board of Trustees for safekeeping the physical securities or
participating in any clearing system on behalf of the mutual fund. The custodian should
be an entity independent of the sponsors and is required to be registered with SEBI.

BANKERS
A funds activities involve dealing with money on a continuous basis primarily with
respect to buying and selling units, paying for investments made, receiving the proceeds
on the sale of investments and discharging its obligations towards operating expenses. A
funds bankers therefore play a crucial role with respect to its financial dealings by
holding its bank accounts and providing it with remittance services.

17

TRANSFER AGENTS
Transfer agents are responsible for issuing and redeeming units of mutual funds and
provide other related services such as preparation of transfer documents and updating
investor records. A fund may chose to carry out this activity in-house and charge the
scheme for the service at a competitive market rate.
DISTRIBUTORS
For a fund to sell units across a wide retail base of individual investors, an established
network of distribution agents is essential.
AMCs usually appoint Distributors or Agents or Brokers, who sell units on behalf of the
fund. Some funds even require that all transactions be routed through such brokers. A
broker usually acts on behalf of several mutual funds simultaneously and may have
several sub-brokers under him for the purpose of distribution of units.
In India, besides brokers, independent individuals are appointed as agents for the
purpose of selling the fund schemes to investors directly. While individuals constitute the
largest segment in the category of mutual fund distributors, other distributors include
Banks, Non Banking Finance Companies, and Distribution Companies.

18

REGULATORS IN INDIA

SEBI

The Government of India constituted Securities and Exchange Board of India, by an Act
of Parliament in 192, as the apex regulator of all entities that either raise funds in the
capital markets or invest in capital market securities such as shares and debentures listed
on stock exchanges. Mutual funds have emerged as an important institutional investor in
capital market securities. SEBI requires all mutual funds to be registered with them. It
issues guidelines for all the mutual fund operations including where they can invest, how
they should account for income and expenses , what investment limits and restrictions
must be complied with, how they should make disclosures of information to investors and
generally acts in the interest of investor protection.

RBI

1. RBI AS SUPERVISOR OF BANK OWNED MUTUAL FUNDS

Banks come under the regulatory jurisdiction of the RBI. Therefore, the operations of
bank owned mutual funds are governed by guidelines issued by Reserve Bank of India.
Subsequently, it has been clarified that all mutual funds, being primarily capital market
players, come under the regulatory provisions of SEBI. Thus, the bank owned funds
continue to be under the joint supervision of both the RBI and the SEBI. It is generally
understood that all the market related and investor related activities of the funds are to be
supervised by SEBI, while any issues concerning the ownership of the AMCs by banks
fall under the regulatory ambit of the RBI.

19

2. RBI AS SUPERVISOR OF MONEY MARKET MUTUAL FUNDS

Reserve Bank on India is the only government agency that is charged with the sole
responsibility to control the money supply in the country. Therefore, it has the sole
supervisory responsibility over all entities that operate in the money markets, be it banks
and companies that issue securities such as certificates of deposit or commercial paper, or
banks and mutual funds who are allowed to borrow from or lend in the call money
market.

MINISTRY OF FINANCE
The Ministry on Finance, which is charged with implementing the government policies,
ultimately supervises both the RBI and the SEBI. Besides being the ultimate policy
making and supervising entity, the MOF has also been playing the role of an Appellate
Authority for any major disputes over SEBI guidelines on certain specific capital market
related guidelines- in particular any cases of insider trading or mergers and acquisitions.

STOCK EXCHANGES

Stock exchanges are self-regulatory organizations supervised by SEBI. Many closed-end

schemes of mutual funds are listed on one or more stock exchanges. Such schemes are
subject to regulations by the concerned stock exchange(s) through a listing agreement
between the fund and the stock exchange.

20

TYPES OF FUNDS
There are many types of mutual funds available to the investor. However, these different
types of funds can be grouped into certain classifications for better understanding.
MUTUAL FUND CLASSIFICATION
OPEN-END AND CLOSE-END FUNDS
An open end fund is one that has units available for sale and repurchase at all the
times. An investor can buy or redeem units from the fund itself at the price based on
the Nat Asset Value (NAV) per unit. NAV per unit is obtained by dividing the amount
of market value of funds assets (plus accrued income minus funds liabilities) by the
number of units outstanding.
Unlike an open end fund, the unit capital of a close end fund is
fixed as it makes a one time sale of a fixed number of units. Close end funds do not
allow investors to buy or redeem units directly from the funds. Trading through an
exchange enables investors to buy or sell units of a close end mutual fund from each
other.
LOAD AND NO- LOAD FUNDS
Marketing of a new mutual fund scheme involves expenses. These may be recovered
from the investors in different ways at different times. Three usual way in which a
funds sales expenses may be recovered from the investors are:
1. ENTRY LOAD-At the time of investors entry into the funds /schemes,
by deduction a specific amount from his initial contribution. or
2. DEFERRED LOAD-By charging the funds/scheme with a fixed amount
each year, during the stated number of years, or

21

3. EXIT LOAD- At the time of investors exit from the fund/scheme, by

deducting a specified amount from the redemption proceeds payable to the
investor.
Funds are generally distinguished from each other by their investment objectives and
types of securities they invest in. The major types are as follows-

1.

MONEY MARKET FUND-

These funds invest in securities of a short term nature, which generally means
securities of less than one year maturity. The typical, short-term, interest bearing
instruments these funds invest in include Treasury Bills issued by governments,
Certificates of deposits issued by banks and Commercial Paper issued by companies.
In India MMMF also invest in inter bank call money market. The major strength is
the liquidity and safety of principal that the investors can normally expect from short
term investments. They are considered at the lowest rung in the order of risk level.
2.

GILT FUNDS-

These are government securities with medium to long term maturities, typically of
over one year (under one year instruments being money market securities). In India,
we have now seen the emergence of Government Securities or Gilt Funds that invest
in government paper called dated securities. Since the issuer is the government, these
funds have little risk of default and hence offer better protection of principal.
However, investors have to recognize the potential changes in values of debt
securities held by the funds.
3.

DEBT FUNDS (INCOME FUNDS)

These invest in debt instruments issued not only by the governments, but also by
private companies, banks and financial institutions and other entities such as
infrastructure companies/utilities. By investing in debt, these funds target low risk and
stable income for the investor as their key objectives. Debt Funds are largely

22

considered as income funds as they do not target capital appreciation, look for high
current income, and therefore distribute a substantial part of their surplus to investors.
Income funds that target returns substantially above market levels can face more
risks. There are different kinds of debt fundsa) Diversified Debt Funds
A debt fund that invests in all available types of debt securities, issued by entities
across all industries and sectors is a properly diversified debt fund. Debt securities are
subject to risk of default by the issuer on payment of interest of interest or principal.
A diversified debt fund has the benefit of risk reduction through diversification and
sharing of any default related losses by a large number of investors.
b) Focused Debt Funds
Some debt funds have a narrower focus, with less diversification in its investments.
Examples include Sector, Specialized and Offshore debt funds. They have a
substantial part of their portfolio invested in debt instruments and are therefore more
income oriented and inherently less risky. It should, however, be recognized that
market value of debt securities will fluctuate as Indian debt market witness more
trading and interest rate volatility in the future
c) High Yield Debt Funds
Usually, Debt Funds control the borrower default risk by investing in securities issued
by borrowers who are rated by credit rating agencies and are considered to be of
investment grade. There are, however, High Yield Debt Funds that seek to obtain
higher interest returns by investing in debt instruments that are considered below
investment grade. These funds are exposed to higher risk. In USA, these are called
Junk Bonds.

23

d) Assured Return Funds-Indian Variant

Fundamentally, mutual funds hold funds in trust for investors. All returns and risk are
for account of the investor. The fund manager or the trustees or the sponsors do not
give any guarantee on the minimum returns to the investors. However, in India, UTI
and other funds have offered assured return schemes to investors. The most popular
variant of these schemes is the Monthly Income Plans of UTI. Returns are indicated
in advance for all of the future years of these close end schemes.
e) Fixed Term Plan Series
It offers a combination of two features i.e. issue of new units as under an open end
fund and a stated maturity or fixed term of investment, as a series of plans are offered
and units are issued at frequent intervals for short plan durations. Fixed Term Plans
are essentially close end in nature in that the mutual fund AMC issues a fixed number
of units for each series only once and closes the issue after an initial offering period,
like a close end scheme offering. But fixed term plans are close end usually for
shorter term- less than a year, unlike close end funds.

4.

EQUITY FUNDS

These invest a major portion of their corpus in equity shares issued by companies,
acquired directly in initial public offerings or through secondary market. They would
be exposed to equity price fluctuation risk at the market level, at the industry level or
the sector level and at the company specific level. Equity Funds Net Asset Values
fluctuate with all these price movements. The issuers of these funds offer no
guaranteed repayment as in the case of debt instruments. Hence Equity Funds are
considered at the higher end of the risk spectrum among all funds available in the
market. On the other hand, unlike debt instruments that offer fixed amounts of
repayments, equities can appreciate in value in line with the issuers earnings
potential, and so offer the greatest potential for growth in capital. They are separated
into different types in terms of their investment styles-

24

a) Aggressive Growth Funds

These funds target maximum capital appreciation, invest in less researched or
speculative shares and may adopt speculative investment strategies to attain their
objective of hoi returns for the investors. Consequently they tend to be more volatile
and riskier than other funds.

b) Growth Funds
Growth funds invest in companies whose earnings are expected to rise at an above
average rate. These companies may be operating in sectors like technology. he
primary objective is capital appreciation over three to five year span. Growth Funds
are therefore less volatile than funds that target aggressive growth.
c) Specialty Funds
These funds have narrow portfolio orientation and invest in only companies that meet
pre defined criteria. Within the specialty fund category, some funds may be broad
based in terms of the type of the investments in the portfolio. However most specialty
funds tend to be concentrated funds, since diversification is limited to one type of
investment. Clearly, concentrated specialty funds tend to be more volatile than
diversified funds.
1. Sector Funds
Sector funds portfolio consists of investment in only one industry or sector of the
market such as information technology, FMCG, etc. Since sector funds do not
diversify into multiple sectors, they carry a higher level of sector and company
specific risk than diversified equity fund.

2. Offshore Funds
These funds invest in equities in one or more foreign countries thereby achieving
diversification across the countrys borders. However they also have additional risks-

25

such as the foreign exchange rate risk- and their performance depends on the
economic conditions of the countries they invest in.

3. Small Cap Equity Funds

These funds invest in shares of companies with relatively lower market capitalization
than that of the big, blue chip companies. They may thus be more volatile than other
funds, as smaller companies shares are not very liquid in the market. In terms of risk
characteristics, small company funds may be aggressive growth or just growth type.
In terms of investment style, some of these funds may also be value investors.

4. Option Income Funds

These funds do not yet exist in India, but Option Income Funds write options on a
significant part of their portfolio. While options are viewed as risky instruments, they
may actually help to control volatility, if properly used.

d) Diversified Equity Funds

A fund that seeks to invest only in equities, except for a very small portion in liquid
money market securities, but is not focused on any one or few sectors or shares, may
be termed a diversified equity fund. While exposed to all equity price risks, it seeks to
reduce the sector or stock specific risks through diversification. They have mainly
market risk exposure. They are at low risk level than growth funds.
Equity Linked Saving Schemes-Indian Variant
Investments in these schemes entitles the investor to claim an income tax rebate, but
usually has a lock in period before the end of which the funds cannot be withdrawn.
These funds are subject to the general guidelines foe all equity funds and would be in
the diversified equity category.

26

e) Equity Index Funds

An index fund tracks the performance of a specific stock market index. The objective
is to match the performance of the stock market by tracking an index that represents
the overall market. The funds invest in shares that constitute the index and in the
same proportion as the index

f) Value Funds
Value Funds try to seek out fundamentally sound companies whose shares are
currently under priced in the market. Value funds will add only those shares to their
portfolio that are selling at low price earnings ratios, low market to book value ratios
and are undervalued by other yardsticks.
Value funds have the equity market price fluctuation risks, but stand often at the
lower end of the risk spectrum in comparison with the growth funds. Value funds may
be from large number of sectors and therefore diversified.
g) Equity Income Funds
Equity funds can be designed to give the investor a high level of current income along
with some steady capital appreciation, investing mainly in shares of companies with
high dividend yields. These equity funds should therefore be less volatile and less
risky than nearly all other equity funds.

5.

HYBRID FUNDS-QUASI EQUITY/ QUASI DEBT

Many mutual funds mix the different kinds of securities (money market, debt and
equity) in their portfolios. Thus, most funds, equity or debt, always have some money
market securities in their portfolios as these securities offer the much needed
liquidity.. There are funds that, however, seek to hold a relatively balanced holding of
debt and equity securities in their portfolios. Such funds are termed as Hybrid
Funds as they have a dual equity/bond focus. Some of them are-

27

a) Balanced Funds
A balanced fund is one that has a portfolio comprising debt instruments, convertible
securities, and preference and equity shares. Their assets are generally held in more or
less equal proportions between debt/money market securities and equities. Thus they
seek to obtain the objectives of income, moderate capital appreciation and
preservation of capital, and are ideal for investors with a conservative and long term
orientation.
b) Growth and Income Funds
These funds seek to strike a balance between capital appreciation and income for
investor. Their portfolio is a mix between companies with good dividend paying
records and those with potential for capital appreciation
c) Asset Allocation Funds
Some funds follow a variable asset allocation policies and move in and out of an asset
class (equity, debt, money market, or even nom financial assets) depending upon their
outlook for specific markets. Asset allocation funds that follow more stable allocation
policies (which hold relatively fixed proportion of specific categories) are more like
balanced funds. On the other hand, funds that follow more flexible asset allocation
policies are more akin to aggressive growth or speculative funds

6.

COMMODITY FUNDS

Commodity funds specialize in investing in different commodities directly or through

shares of commodity companies or through commodity futures contracts. Specialized
funds may invest in a single commodity or a commodity group such as edible oils or
grains, while diversified commodity funds will spread their assets over many
commodities.

28

COMPANY OVERVIEW

BIRLA SUNLIFE ASSET MANAGEMENT COMPANY LTD.

A joint venture between the Indian industrial house of Aditya Birla and the Sun Life
Assurance Company, the Canada-based financial service organization, was launched in
the mid-90 s.
ADITYA BIRLA GROUP
A US $28 billion corporation with a market cap of US $31.5 billion and in the league of
Fortune 500 companies. The Group has been adjudged "The Best Employer in India and
among the top 20 in Asia" by the Hewitt-Economic Times and Wall Street Journal Study
2007. Over 50 per cent of its revenues flow from its overseas operations.
The Group operates in 20 countries: India, Laos, Indonesia, Egypt, China, Canada,
Philippines, Australia, USA, UK, Germany, Thailand Hungary, Brazil, Italy, France,
Luxembourg, Switzerland, Malaysia and Korea.
The Aditya Birla Group is a dominant player in all of the sectors in which it operates
which includes viscose staple fiber, non-ferrous metals, cement, and viscose filament
yarn, branded apparel, chemicals, fertilizers, carbon black sponge iron, insulators and
financial services.
The Group has also made successful forays into the BPO and IT sectors.

29

SUN LIFE FINANCIAL INC.

Sun Life Financial Inc. is a leading financial services organization which has its
headquarters in Toronto, Canada, operating in the key markets around the world.
Chartered in 1865, Sun Life Financial and its partners today have operations in key
markets worldwide, including Canada, the United States, Hong Kong, the Philippines, the
United Kingdom Japan of 30 June 2007, the Sun Life Financial group of companies had
total assets under management of CDN $ 435 billion.
The Sun Life Financial group of companies and their joint ventures offer individuals and
corporate customers and individuals a diverse range of financial services that fall into two
principal business areas: wealth management and protection. Throughout its
international operations, Sun Life Financial has an employee base of approximately
13,800 people plus an extensive global distribution network of career sales forces,
investment dealers, independent agents, and financial planners.
WHY BIRLA SUN LIFE MUTUAL FUND?
Birla Sun Life Mutual Fund was set up in the year 1994. . It is one of the leading Mutual
Funds in India and has been recipient of various awards for its investment performance,
over the years. It provides a range of investment products on equity and fixed income
asset classes.
HERITAGE
The Aditya Birla Group is one of India's largest business houses. Global in vision,
rooted in Indian values, the Group's operations span around India, Thailand, Indonesia,
Egypt, Malaysia Philippines, Canada. A US $28 billion corporation with a market capital
of US $31.5 billion and in the League of Fortune 500, the Aditya Birla Group has an
employee base of an extraordinary force of 100,000 employees, belonging to 25 different
nationalities. Over 50 per cent of its revenues flow from its operations across the world.

30

Sun Life Financial Sun Life Financial is a leading international financial services
organization which provides a diverse range of wealth accumulation and protection
products and services to individuals and corporate customers. Chartered in 1865, Sun
Life Financial and its partners today have operations in key markets worldwide, including
Canada, the United States, the United Kingdom, Hong Kong, the Philippines, Japan of 30
June 2007, the Sun Life Financial group of companies had total assets under management
of CDN $ 435 billion.
Track Record
With a proven track record of 12 years, Birla Sun Life Mutual Fund has been a catalyst
towards the growth of the private Sector.
Investment Philosophy
Birla Sun Life Mutual Fund follows a long-term, fundamental research based approach to
investment. The approach is to identify companies, which have strong fundamentals and
excellent credit-worthiness. The fundamentals include the quality of the company's
management, its competitive position and sustainability of its business model , amongst
other factors. Birla Sun Life invest in.
Product Offerings
Birla Sun Life Mutual Fund offers a wide range of investment options, which include
fund-of-fund schemes, hybrid and monthly income funds, diversified and sector specific
equity schemes and a wide range of debt and treasury products and offshore funds.
BSLAMC also provides Private Wealth Management services..

31

BIRLA SUN LIFE ASSET MANAGEMEMT COMPANY

Assets under management
Rs. 37446 Crs. as on june 30,2008

Fund Managers
A Balasubramaniam , Ajay Argal , Ajay Garg , Ankit Sancheti , Atul Penkar , Badrish
Kulhalli, Jayashankar Madhavan , Jayesh Gandhi , Jignesh Shah , Mahesh Patil,
Maneesh Dangi , Navneet Munot, Prasad Dhonde , Sanjay Chawla , Satyabrata
Mohanty, Sunaina da Cunha , Vineet Maloo .

No. of schemes

117

No. of schemes including options

348

Equity Schemes

48

Debt Schemes

256

Short term debt Schemes

17

Equity & Debt

Money Market

Gilt Fund

13

TOP FIVE PERFORMING FUNDS OF BIRLA SUN LIFE MUTUAL

FUNDS:

32

A list of the top performing funds of Birla sun life mutual fund has been taken
out. In order to judge a funds consistency in performance, returns for 3 months, 1 year, 2
year and 3 years are taken wherever possible.

1. BIRLA SUN LIFE EQUITY FUNDS

Birla Sun Life Equity Fund is a diversified equity fund which enables
investors to capitalize on the immense growth opportunities provided by the
stock market while at the same time, it minimizes the risk.
The fund is an open-ended growth scheme. The Fund invests
in a wide cross-section of sectors thereby offering adequate diversification to
investors.

2.BIRLA MIDCAP FUND

Birla Midcap Fund is an open ended growth fund. Superior risk control and
diversification form an integral part of the fund management strategy to keep portfolio
volatility at lower levels vis-a-versa the benchmark CNX Mid-cap Index. The key
portfolio strategy is summarized as follows:
Strong process driven investment philosophy which matches with a disciplined risk
management strategy.
Identifying stocks which can show strong growth over 3-5 years horizon.

33

The fund seeks to achieve long-term growth of capital at the controlled level of
risk by primarily investing in Mid Cap Stocks. The Midcap segment comprises
mostly of companies which are able to sustain themselves in the initial phases of
growth. Since many companies out of this segment would show higher growth in
future and move towards the large cap segment, this segment offers very high
potential.

BIRLA SUN LIFE MID CAP FUND - GROWTH

Fund Size as on
Jun 30, 2008
Fund Size ( Rs. in 487.86
crores)
Asset Allocation as Jun 30, 2008
on
Equity
Debt
Others

95.07%
0.12%
4.81%

3.BIRLA SUN LIFE FRONTLINE EQUITY FUND

Birla Sun Life Frontline Equity Fund is an open-ended diversified equity fund,
which invests in stocks which have the potential of providing superior growth
opportunities such that it is representative of all leading sectors of its chosen
benchmark. Investing in frontline stocks provides for the possibility of higher
returns. Birla Sun Life Frontline Equity Fund is an ideal for investors looking
at investing in quality stocks across the leading sectors of the economy.

34

BIRLA SUN LIFE FRONTLINE EQUITY FUND

Fund Size as on
Jun 30, 2008
Fund Size ( Rs. in 351.46
crores)
Asset Allocation as Jun 30, 2008
on
Equity
Debt
Others

85.37%
0%
14.63%

Though the scheme primarily focuses on top 200 corporates that comprise the
benchmark, the scheme has managed to deliver the superior performance. Its stock
selection along with rally in largecap and the momentum picks rally in largecap stocks
has aided in high returns. The scheme has consistently outperformed its benchmark and
posted one year return of 37.5%. Its performance has been equally good and has returned
7.57% while other funds lost 1.05%.

35

5.BIRLA SUN LIFE 95 FUND

Birla Sun Life 95 Fund strikes a balance between the growth that equity
offers and the safety which debt provides, and therefore helps to achieve the
best of both worlds. Thus fund seeks to maximize returns on investment at
moderate levels of risk.
The fund is an open-ended balanced scheme investing across equity and debt
classes with a target allocation of 60% in equity and the remaining in money
market securities and debt. Being a balanced fund, it is geared towards
providing a mixture of capital appreciation, income and safety. The fund is
ideal for investors who are seeking growth from equity investments but with a
cushion of debt.

BIRLA SUN LIFE 95 GROWTH

Fund Size as on
Jun 30, 2008
Fund Size ( Rs. In 142.88
crores)
36

Asset Allocation as Jun 30, 2008

on
Equity
Debt
Others

67.76%
21.5%
10.74%

5.BIRLA SUN LIFE TAX RELIEF 96 FUND

There are various income tax saving investment options available to investors
under Section 80C of the Income Tax Act. Among them, Equity Linked
Savings Schemes (ELSS) offers an option of investing primarily in equity
markets and thus there is huge potential of generating higher returns. 80C
investments like ELSS provide the investor with the dual benefit of Tax
rebate.
Birla Sun Life Tax Relief '96 (BSLTR 96) is a fund which aims at achieving long term
growth of capital along with Income . It follows a bottom-up approach to investing,
where the emphasis is on identifying companies in quality businesses with a strong
competitive position and run by quality management. Essentially the focus is on long
term fundamentally driven values.

BIRLA SUN LIFE TAX RELIEF 96 - GROWTH

Fund Size as on
Jun 30, 2008
Fund Size ( Rs. in 507.65
crores)
Asset Allocation as Jun 30, 2008

37

on
Equity
Debt
Others

84.76%
0%
15.24%

COMPARISON
1. BIRLA SL TAX RELIEF 96(GROWTH) AND HSBC TAX SAVER EQUITY
FUND(GROWTH)
Mutual Fund Family

AMC Assets (Rs in cr)

Inception Date

Birla

Sun

Life

Asset

HSBC Asset Management

Management Company Ltd.

(India) Pvt. Ltd.

41075.24
Mar-06-2008

17357.31
Nov-20-2006

Latest NAV (Rs/Unit)

7.290
Absolute Returns as on Jul-03-2008 :

9.257

3 Months

-21.7%

-10.0%

6 Months

-42.9%

1 Year

-15.5%

38

2. BIRLA SUN LIFE AGGRESSIVE ( DIVIDEND) AND ICICI PRU ADVISOR

AGGRESSIVE ( DIVIDEND)
Mutual Fund Family

Birla

Sun

Life

Asset ICICI

Management Company Ltd.

Prudential
Asset
Mgmt.Co.

AMC Assets (Rs in cr)

Inception Date

41075.24
Jan-20-2004

Ltd
59473.59
Nov-28-

Latest NAV (Rs/Unit)

20.373

2003
20.670

Absolute Returns as on Jul-03-2008

3 Months
-7.8%
6 Months
-31.6%
1 Year
-10.4%
2 Years
23.4%
3 Years
58.0%

-8.9%
-29.4%
-10.8%
19.6%
62.9%

39

3.BIRLA SL INFRASTRUCTURE FUND AND TATA INFRASTRUCTURE

FUND
Mutual Fund Family

Birla

Sun

Life

Asset Management

Tata Asset Management

Limited

Company Ltd.
AMC Assets (Rs in cr)
Inception Date

41075.24
Feb-24-2006

23852.89
Dec-22-2004

Latest NAV (Rs/Unit)

10.660

18.954

Last dividend (Rs/Unit)

1.000 as on Mar-24-2008
Absolute Returns as on Jul-04-2008

1.000 as on Mar-11-2008

3 Months

-17.0%

-13.8%

6 Months

-47.3%

-40.9%

1 Year

-19.1%

-3.6%

2 Years
3 Years

26.6%
-

48.6%
134.9%

40

OBJECTIVES OF THIS STUDY:

1)

To know about the Mutual Funds Industry.

2)

To have a deeper knowledge about Birla sun life Mutual Fund.

3)

To know about the product line of Birla sun life Mutual Fund.

4)

To compare equity schemes of Birla sun life Mutual Fund with its competitors on

the

basis of the returns.

SUB OBJECTIVE

41

1) To know investors perspective while investing in different AMCs

RESEARCH METHODOLOGY
In order to fulfill the desired objectives the analysis makes use of both primary and
secondary data.
To carry on these projects I have prepared the list of 31 investors who invest in mutual
fund in different AMCs. To compare equity schemes of the companies I have taken 6
companies. Following AMCs are taken into consideration 1 public company and 4 private
companies:
Birla sun life mutual fund
ICICI PRU mutual fund
HDFC Mutual Fund

42

Reliance mutual Fund

UTI Mutual Fund

SCOPE OF THE STUDY

Scope of the study is limited only to Jalandhar.

LIMITATIONS OF THE STUDY

Due to limited time it was not possible to conduct an in depth analysis of the concept
under the present study.
Due to limited resources it was difficult to study all factor as relevant to the study
Non responsiveness of the respondents hindered the complete analysis of the subject
under the present study.
Biased opinions of the respondents may be present in the data collected hence
element of subjectivity present.

43

INVESTORS PERSPECTIVE REGARDING

DIFFERENT AMCS

PURPOSE OF SURVEY
Q1 To know what proportion of investors income goes to different investment avenues
Q2 To know which sources is most influential for the investor while they invest in
different avenues.

44

Q3- To know which goal investors considers the most while investing.
Q4- I have taken 5 AMCs in my study to know which AMC is most preferred as per
return & services they generate to the investors.
Q5- To know whether the investors are satisfied, dissatisfied or neither satisfied
nor dissatisfied as regard after sale services of these AMCs

DATA ANALYSIS
Classification on the basis of sex: figure 1 depicts 32% are female respondents & 68%
are male respondents.

45

Classification according to age: Below figure depicts 43% of investors are up to the age
of 25 to 35 years,

Classification according to Qualification: Most of my respondents are postgraduate and

Professionals

46

Classification according to Income Level: 50% of investors lie under the income
bracket of up to 2 lakh annually and 33%of respondents are in range of 2 to 5 lakh.

Classification according to Occupation: Data analysis shows that most of the investors
are employed in service sectors and 16% investors are housewife & 16% are
businessmen.

47

This is the basic data about the respondents their profile related to occupation,
income, and qualification.
Results:
Large respondents are male respondents falling in the age group of 25 to 35 years.
Most of my respondents are post graduate and are in the service sector
Most of the respondents are earning annual income of 2 lakh.

DATA ANALYSIS AND INTERPRETATION

Classification on the basis of proportion of income invested in different avenues
The purpose of question is to find out the proportion of income invested in different
avenues of investments.
Results out of 31 Respondents:
a)

In case

of

fixed
deposits

48

10% of investors invests 10 to 20% of there income in fixed deposits. Only 3 % invests
40 to 50 % of there income in fixed deposits, 42% generally look for other investments

b)

In case of insurance also only 3 % of investors invest 50%of their income and 36%
of investors look for other avenues.

c)

13% of investors invests above 50% of there income in shares but still investors are
risk averse and 23% of investors invests only 10% of there income.

49

d) In case of mutual fund also 13% of investors invests above 50% of their income and
46% invests 10% of there income in mutual fund thus large number of investors
invests 1/10th proportion of their income in mutual fund.

e)

In case of provident fund we found that 78%of investors are not interested in
blocking their money. Thus only 6% of respondents invest in provident fund.

f)
In

case
of post office investors are well aware that their money will be blocked and can not be
withdrawn before the maturity of the period. So 78% of investors are not interested in
investing in post office.

50

g)

In case of ULIP which is investment in market and insurance also. This source
attracts only 13% of investors who only invests 10% of their income, but it is found that
large proportion of investors not interested in this source.

Following patterns were observed:

51

There are different sources of avenues available to investors to invest. Out of 31

respondents it is seen,

Most of them had invested in shares and mutual fund.

The tradition of blocking the money in post office, provident fund has been changed
to investing in avenues which guarantees good return and more liquidity.

No doubt fixed deposits has a locking period but offers good return there fore it is
found that most of the investors had invested 10% of their income in fixed deposits. 50%
of income is invested only in mutual fund and shares. This can be illustrated through this
chart.

Classification of data according to the sources which we look before going for any
investment.

52

The purpose of this is to find out which source is most influential while selecting
different investment avenues. I have included five sources namely, newspaper, friends,
advertisement, agents & website.
Results out of 31 Respondents:

A)

MUTUAL FUNDS
Out of total respondents 32% looks for
newspaper

for

taking

investment

decision in mutual fund. Next 29%

depends upon their friends advice. It
is seen that today even websites are
proving beneficial for mutual fund

B) Fixed deposits

In case of fixed deposits it is found that

investors are not dependent upon any
source. Most of them are self aware of
this avenue. 13% of respondents depend
upon advertisement and agents to take
decision regarding investing in fixed
deposits.

C) Shares
53

In case of shares 39% of respondents

considers website as a most reliable
source of information. After websites
16% of respondents consider friends
advice

before

taking

any

trading

decision in securities.

D) Provident fund

Since 78% of respondents had not

invested in provident fund, its only
16% who had invested their 10% of
income. . Therefore their source of
information to this avenue is agents
and then their friends.

E) Post office

54

Here also, 75% of respondents had no

interest in post office so none of the
sources of information is useful for
them.

F) ULIP (Unit linked Insurance Plan)

Here also, 81% of respondents had no

interest in ULIP so none of the sources
of information is useful for them. Only
13% of respondents invested in post
office this group of investors are more
conservative in approach and they
consider newspaper friends as most
reliable source of information.

Following patterns were observed

55

In case of mutual fund newspaper, friends play most reliable source of information
for taking investment decision this shows that people are becoming more aware by
themselves their dependency on agents has decreased and they look for their own
sources.

Today online trading is on demand most of the respondents consider websites as a

most reliable and informative source to them. Websites like moneycontrol.com.

In case of fixed deposits friends knowledge and respondents self awareness plays a
pivotal role.

For post office and provident fund picture is almost the same. Around 13-14% of
respondents had blocked their money in these avenues as they are more conservative
so sources like websites, newspaper, agents and advertisement hardly play any
important role for them.

56

The question is placed in order to judge the individuals short and long term goals and
expectations from their investments. Which goal is most important and which is least
important.

Classification according to the investment vehicle and their personal planning goal
Out of 31 respondents 35% of respondents consider child education as most
important goal in their life and keeping this in mind, they likely to take investment
decision.

When asked respondents about marriage, as whether this is also a goal they consider
before going for investment answer to this was little amazed as 29% of respondents do
consider this as important while 29% do not consider it at all important

57

Today the major concern of people is about their retirement, that what will happen at the
time of retirement so almost everyone consider this in mind before going for investment
and looks for long time investments

any person who invests their money want appreciation in their money so almost
everyone consider this as important before taking investment decision and it is seen that
most of the respondents had invested their money in mutual fund, fixed deposits and
shares . Very few invest in post office and provident fund.

Capital Appreciation
Not Important
3%
Least Important
13%

Important
29%

Most Important
55%

58

Today tax liability is major concern for every one. Every one want to reduce their tax
burden, so any investments which generates more tax benefits is more fascinating to
them. Thus all respondents consider tax benefits as most important goal.

Safety is the basic necessity for any investment no body can deny this. Everyone wants
their investment to be safe generating long term and short term benefits.

59

It is seen that today people even invests in order to keep their social status intact 6 % of
investors do consider this as a goal while going for investment but it is found that 52% of
respondents do not considers this at all important.

Following patterns were observed

60

Capital appreciation, tax benefits and safety are the most important goals which are
considered by the investors before they take any decision for investments.

Social status is not at all consider as an important goal by any of the

respondents

61

The pivotal question asked from the respondents to know which AMCs ( Assets
Management Company ) they consider on security and return wise as best . They were
asked to rank them 1 to 5.
Following AMCs are taken into consideration 1 public company and 4 private companies:
Birla sun life mutual fund
ICICI PRU mutual fund
HDFC Mutual Fund
Reliance mutual Fund
UTI Mutual Fund

Criterion 1 security/ safety wise:

I have applied T- Test in order to know which AMCs is preferred by the
respondents on safety or security basis.
Paired Differences
std.error
mean
Pair 1 bsmicici
Pair 2 bsm-uti
Pair 3 bsmHdfc
Pair 4 bsm rmf
Pair 5 icici - uti
Pair 6 icici Hdfc
Pair 7 icici rmf
Pair 8 uti Hdfc
Pair 9 uti - rmf
Pair 10 Hdfcrmf

Mean

std. dev

0
-1.065

2.295
1.879

-1.903

95%
Confidence
interval of the
difference

Sig.(2tailed)

Lower

Upper

df

0.412
0.337

-0.842
-1.754

0.842
-0.375

0
-3.155

30
30

1
0.004

2.399

0.431

-2.783

-1.023

-4.416

30

-0.871
-1.065

2.553
1.672

0.458
0.3

-1.807
-1.678

0.065
-0.451

-1.9
-3.545

30
30

0.067
0.001

-1.903

1.68

0.302

-2.52

-1.287

-6.306

30

-8.71

1.477

0.265

-1.413

-0.329

-3.282

30

0.003

-0.839
0.194

1.753
1.957

0.315
0.351

-1.482
-0.524

-0.196
0.911

-2.664
0.551

30
30

0.012
0.586

1.032

1.197

0.215

0.593

1.471

4.802

30

62

Null Hypothesis H0 = there is no significance difference between mean ranks of two

AMCs
Alternative Hypothesis Ha = there is a significance difference between the ranks of two
AMCs
If T value lies between upper limits and lower limits this means that are no significance
differences in the ranks of two AMCs
Security basis

I have first compared Birla sun life Mutual Fund with other AMCs and find out that
there are no significance differences between Birla Sun life Mutual Fund and ICICI
Pru Assets Management Company on security basis.

But if we compare Reliance Mutual Fund with HDFC and SBI, we found that
reliance is mostly preferred by the respondents as compared to other two AMCs.

Return basis

Paired differences
std error
mean
Pair 1 Bsm-icici
Pair 2 Bsm-uti
Pair 3 Bsm Hdfc
Pair 4 Bsm- rmf
Pair 5 icici-uti
Pair 6 icici
-Hdfc
Pair 7 icici - rmf
Pair 8 uti -Hdfc
Pair 9 uti-rmf
Pair 10 Hdfcrmf

95% Confidence
Interval of the
difference

Mean
-2.9
-1.677

std dev
1.16
1.72

0.208
0.309

lower
-7.16
-2.308

upper
0.135
-1.046

t
-1.393
-5.429

-1.968
-2.387
-1.387

1.402
1.498
2.06

0.252
0.269
0.37

-2.482
-2.937
-2.143

-1.453
-1.837
-0.631

-1.677
-2.097
-0.29
-0.71

1.326
1.136
2.397
2.254

0.238
0.204
0.431
0.405

-2.164
-2.513
-1.17
-1.536

-0.419

1.285

0.231

-0.891

df
30
30

sig(2tailed)
0.174
0

-7.815
-8.87
-3.748

30
30
30

0
0
0

-1.191
-1.68
0.589
0.117

-7.042
-10.277
-0.674
-1.753

30
30
30
30

0
0
0.505
0.09

0.052

-1.817

30

0.079

63

Inferences: when AMCs are compared on return basis i.e. return to the investors and T
test is applied it is inferred that;

Both Birla Sun life Mutual Fund and ICICI AMCs are preferred by the respondents
on return basis thus we accept null hypothesis (H 0) but if we compare Reliance with
other AMCs i.e. HDFC, UTI, & RMF we found that there is a significance
differences between these AMCs.

Now if we compare ICICI Pru with UTI AMCs on return generated to them we
found that there is no significance differences in these two companies respondents
equally preferred them. But when we compare ICICI with HDFC & RMF we have
to accept alternative hypothesis i.e. (Ha)

64

Q5 Purpose of this question is to know which AMC is considered by the respondents

as best as regard timely delivery of account statements and handling of queries.
To know this I have used T Test assuming same null hypothesis as in above question and
try to compare BSM with other AMC.

Timely Delivery of Account Statement

Paired Differences
95% Confidence

Pair 1 bsm - icici

Pair 2 bsm -uti
Pair 3 bsm Hdfc
Pair 4 bsm- rmf
Pair 5 icici- uti
Pair 6 icici - hdfc
Pair 7 icici - rmf
Pair 8 uti- hdfc
Pair 9 uti- rmf
Pair 10 hdfc- rmf

std. error

Interval of the

mean

difference

Sig.(2tailed)

Mean
0.968
1

Std. dev
1.798
2

0.323
0.359

Lower
0.308
0.266

Upper
1.627
1.734

t
2.997
2.784

1.742
-0.129
0.032
0.774
-1.097
0.742
-1.129
-1.871

1.341
2.391
2.168
1.961
2.521
1.731
1.979
1.727

0.241
0.429
0.389
0.352
0.453
0.311
0.355
0.31

1.25
-1.006
-0.763
0.055
-2.022
0.107
-1.855
-2.504

2.234
0.748
0.827
1.494
-0.172
1.377
-0.403
-1.237

7.233
-0.3
0.083
2.198
-2.422
2.386
-3.177
-6.032

df
30
30

0.005
0.009

30
30
30
30
30
30
30
30

0
0.766
0.935
0.036
0.022
0.024
0.003
0

Inferences: when AMCs are compared on timely delivery of account statement it is

inferred that;

No particular AMC is considered best as regard this service almost every AMC is
graded with equal rank.

If we compare BSM with other AMC we find that RMF is ranked very low for this
criterion as compare to other AMC but it is in better position then RMF AMC.

When ICICI is compared with other AMC it is found that it is better then RMF and
HDFC AMC as regard timely delivery of statement.

HANDLING QUERIES: AMC are also ranked on the basis of there services to the
customers. Respondents are asked to rank AMC on the basis of there ability to handle
there queries. Again T test has been applied following the same assumption that there is
65

no significance difference in rank of two AMC as regard this criterion (Ho) and
alternative to this is that there is a significance differences (Ha).
When T test is applied it is found that BSM is better than ICICI and HDFC as regard this
criterion as T value lies within the range value of upper limit and lower limit. UTI and
RMF is better then ICICI so for this criterion (Ha) is to be accepted i.e. there is a
significance differences in the ranking of these AMC as regard this handling of queries. It
can not be clearly stated that which AMC is at better position in the eyes of respondents.
Table 7
Paired Differences
95% Confidence

Pair 1 bsm- icici

Pair 2 bsm- uti
Pair 3 bsm- Hdfc
Pair 4 bsm - rmf
Pair 5 icici - uti
Pair 6 icici - hdfc
Pair 7icici - rmf
Pair 8 uti - hdfc
Pair 9 uti - rmf
Pair 10 hdfc rmf

std. error

Interval of the

mean

difference

Sig. ( 2tailed)

Mean
0.226
1.258
0.548
-8.39
1.032
0.323
-1.065
-0.71
-2.097

Std. dev
1.606
1.897
2.514
2.252
1.835
2.372
2.144
1.51
1.469

0.289
0.341
0.452
0.405
0.329
0.426
0.385
0.271
0.264

Lower
-0.363
0.562
-0.374
-1.665
0.359
-0.547
-1.851
-1.263
-2.635

Upper
0.815
1.954
1.471
-0.013
1.705
1.193
-0.278
-0.156
-1.558

t
0.783
3.693
1.214
-2.073
3.133
0.757
-2.765
-2.617
-7.949

-1.387

1.687

0.303

-2.006

-0.768

-4.57

df
30
30
30
30
30
30
30
30
30

0.44
0.001
0.234
0.047
0.004
0.455
0.01
0.014
0

30

CONCLUSION

Objective of the project is to know the investors perspective while investing in

different AMCs. For this survey of 31 respondents has been done covering
66

Jalandhar region. With the help of a structured questionnaire following response

has been received.

There are different sources of avenues available to investors to invest. Out of 31

respondents it is seen. Most of them had invested in shares and mutual fund. The
tradition of blocking the money in post office, provident fund has been changed
to investing in avenues which guarantees good return and more liquidity. No
doubt fixed deposits has a locking period but offers good return there fore it is
found that most of the investors had invested 10% of their income in fixed
deposits. 50% of income is invested only in mutual fund and shares.

In case of mutual fund newspaper, friends play most reliable source of

information for taking investment decision this shows that people are becoming
more aware by themselves their dependency on agents has decreased and they
look for their own sources. Today online trading is on demand most of the
respondents consider websites as a most reliable and informative source to them.
Websites like moneycontrol.com. For post office and provident fund picture is
almost the same. Around 13-14% of respondents had blocked their money in
these avenues as they are more conservative so sources like websites,
newspaper, agents and advertisement hardly play any important role for them.

Capital appreciation, tax benefits and safety are the most important goals which
are considered by the investors before they take any decision for investments.
Social status is not at all consider as an important goal by any of the
respondents

Security basis

I have first compared Birla Sun life Mutual Fund with other AMCs and found
out that there were no significant differences between Birla sun life Mutual Fund
and ICICI Pru Assets Management Company on security basis.

67

 But if we compare Birla Mutual Fund with HDFC and RMF, I found that Birla is
mostly preferred by the respondents as compared to other two AMCs.

Return basis

Inferences: when AMCs are compared on return basis i.e. return to the investors
and T test is applied it is inferred that;

Both Birla Sun life Mutual Fund and ICICI AMCs are preferred by the
respondents on return basis, but if we compare Birla with other AMCs i.e.
HDFC, UTI, & RMF we found that there is a significance differences between
these AMCs.
Now if we compare ICICI Pru with UTI AMCs on return generated to them we
found that there is no significance differences in these two companies
respondents equally preferred them. But when we compare ICICI with HDFC &
RMF we have to accept alternative hypothesis i.e. (Ha)

Timely delivery of account statement

Inferences: when AMCs are compared on timely delivery of account statement

it is inferred that;
No particular AMC is considered best as regard this service almost every AMC
is graded with equal rank.
If we compare BSM with other AMC we find that BSM is ranked very low for
this criterion as compare to other AMC but it is in better position then SBI
AMC.
When ICICI is compared with other AMC it is found that it is better then RMF
and HDFC AMC as regard timely delivery of statement.

Handling queries:

Inferences

68

 AMC are also ranked on the basis of there services to the customers.
Respondents are asked to rank AMC on the basis of there ability to handle
their queries.
When T test is applied it is found that BSM is better than ICICI and HDFC
as regard this criterion as T value lies within the range value of upper limit
and lower limit. UTI and RMF is better then ICICI so for this criterion.
There is a significance differences in the ranking of these AMC as regard
this handling of queries. It can not be clearly stated that which AMC is at
better position in the eyes of respondents.

ANNEXURES
QUESTIONNAIRE

69

I am student of AMITY BUSINESS SCHOOL, NOIDA doing my summer internship

with Birla Sun Life Asset Management Company. I am making a project on mutual fund
i.e. regarding the mutual fund industry and my objective to know investors perspective
for investment in different AMCs, for which I need your valuable insights. This
questionnaire is solely for educational purpose.
Individual Profile;
Name Gender. Phone no
Occupation: business; self employed; services; professional; retired; others.
Age: up to 25; 2 5 to 35; 35 to 45; 45 to 55; 55 to 65;
Income level; up to2 lakh; 2 to 5 lakh; 5 to 10 lakh; above 10 lakh.
Qualification: plus 2; graduation; post graduation; professional course
Q1 How much proportion of your income do you invest in following avenues?
Investment

Up

avenues
Fixed

10%

to 10

to 20

20%

to 30

30%

40%

to 40

to Above

50%

50

deposits
Insurance
Shares
Mutual fund
Provident
fund
Post office
ULIP

Q2 Which source you look before making final decision for your investment? Rank them
from 5 to 1 where 5 are most influential and 1 as not at all influential.
Sources

Mutual Fixed
fund

deposits

Shares

Provident Post
fund

ULIP

office

Newspaper

70

Friends
Website
Advertisement
Agents

Q3 Tick the following parameters of your preferences which you keep in mind before
investing?
Goals

Most

importan

important

Least Not
important

important

Child education
Marriage
Retirement
benefit
Capital
appreciation
Tax benefit
Social status
Security/safety

Q4 As regards your mutual fund investment, mark these AMCs on a scale of 1 to 10?
AMCs
Birla Sun life

Safety

return

MF
ICICI PRU
UTI MF
HDFC MF
RMF MF
Q5 score these AMCs on a scale of 1 to 10 on the basis of their after sale services you
availed?

71

AMCs

Timely delivery of

Handling of queries

account statement
Birla sun life MF
ICICI PRU MF
UTI MF
HDFC MF
RMF MF

BIBLIOGRAPHY
Websites:
www.moneycontrol.com
www.ampiindia.com
www.birlasunlife.com
www.valueresearchonline.com
www.icicidirect.com
www.mutualfundsindia.com
References:

AMFI Mutual Fund workbook

Mutual Fund Insight

Second Edition, Dec2001

72

Economic Times
Mutual Fund Fact sheets
Outlook Money

73