2011

MUTUALFUN SCHEMES
BIRLA SUN LIFE MUTUALFUND
Purpose of this report is to we aware about mutual fund and its schemes so that we learned which is helpful for us.

Birla sun life mutual 9/19/2011

A PROJECT REPORT ON TO KNOW THE MUTUALFUND SCHEMES

PREPERED AT

SUBMITTED TO
Prof. Mahipal Sir

MARWADI EDUCATION FOUNDATION GROUP OF INSTITUTIONS

PREPARED BY
Jignesh shingala Mayank Bhimani (PGDM)

ACADEMIC YEAR
2010-2012

HISTORY OF MUTUAL FUNDS

The history of mutual fund in India can be divided into 5 important phases A. 1963 1987: The Unit Trust Of India was the sole player in the industry. Created by an Act of Parliament in 1963, UTI launched its first product, the unit Scheme 1964, which is even today the single largest mutual fund scheme. UTI created a number of products such as monthly income plans, childrens plans, equity oriented schemes and offshore funds during this period. UTI managed assets of Rs 6700 crores at the end of this phase. B. 1987 1993: In 1987 public sector banks and financial institutions entered in mutual fund industry. SBI mutual fund was the first non-UTI fund to be set up in 1987. Significant shift of investors from deposits to mutual fund industry happened during this period. Most funds were growth-oriented closed-ended funds. By the end of this period, assets under UTIs management grew to Rs 38247 crores and public sector funds managed Rs. 8750 crores. C. 1993 - 1996: In 1993, the mutual fund industry was open to private sector player, both Indian and foreign. SEBIs first set of regulations for the industry were formulated in 1993, and substantially revised in 1996. Significant innovations in servicing, product design and information disclosure Happened in this phase, mostly initiated by private sector players. D. 1996- 1999: The implementation of the new SEBI regulations and the restructuring of the mutual fund industry late to rapid growth Bank mutual funds were re-cast according to the SEBI recommended structure, and UTI came voluntary SEBI supervision. E. 1999 2002: This phase was marked by very rapid growth in the industry, and significant increase in market shares of private sector players. Assets crossed Rs. 100000 crores. The tax break offered to mutual funds in 1999 created arbitrage opportunities for a number of institutional players. Bond funds and liquid funds registered the highest growth in this period, accounting for nearly 60% of the assets. UTIs share of the industry dropped to nearly 50%.

Mutual Fund Operation Flow Chart Pass back to

Returns

INVESTOR

Generates

Mutual Fund Operation Flow

Pull their money with

Security

Fund manager

Invest in
From the above cycle, it can be observed that how the money from the investors flow and they get returns out of it. With a small amount of fund, investors pool their money with the funds managers. Taking into consideration the market strategy the funds managers invest this pool of money into reliable securities. With ups and downs in market returns are generated and they are passed on to the investors. The above cycle should be very clear and also effective.

The fund manager while investing on behalf of investors takes into consideration various factors like time, risk, return, etc. so that he can make proper investment decision.

STRUCTURE OF INDIAN MUTUAL FUNDS

The mutual funds structure in the company form is as depicted in the following chart

A mutual fund is set up in the form of a trust, which has sponsor, trustees, Asset Management Company (AMC) and custodian. The trust is established by a sponsor or more than one sponsor who is like promoter of a company. The trustees of the mutual fund hold its property for the benefit of the unit holders. AMC approved by SEBI manages the fund by making investments in various types of securities. A custodian, who is registered with SEBI, holds the securities of various schemes of the fund in its custody. The trustees are vested with the general power of superintendence and direction over AMC. They monitor the performance and compliance of SEBI regulations by the mutual fund.

BIRLA SUNLIFE MUTUAL FUND

 HISTORY: Birla Sun Life Asset Management Company Ltd. (BSLAMC), the investment managers of Birla Sun Life Mutual Fund, is a joint venture between the Aditya Birla Group and the Sun Life Financial Services Inc. of Canada. Established in 1994, Birla Sun Life Mutual fund has emerged as one of India's leading flagships of Mutual Funds business managing assets of a large investor base. They offer a range of investment options, including diversified and sector specific equity schemes, fund of fund schemes, hybrid and monthly income funds, a wide range of debt and treasury products and offshore funds. Birla Sun Life Asset Management Company has one of the largest team of research analysts in the industry, dedicated to tracking down the best companies to invest in. It provides transparent, ethical and research-based investments and wealth management services.

GEOGRAPHICAL COVERAGE:
Today, BSLAMC is present in 111 locations, including 180 branches.

PRODUCT OFFERING:

Birla Sun Life Mutual Fund offers a range of investment options, which include diversified and sector specific equity schemes, fund-of-fund schemes, hybrid and monthly income funds, a wide range of debt and treasury products and offshore funds. BSLAMC also provides Private Wealth Management services.

INNOVATIONS:

Birla Sun Life Mutual Fund was the first to launch Birla Cash Plus, a liquid fund. Birla Dividend Yield Plus which is a dividend yield fund.

Birla Bond Index Fund (a debt index fund) which replicates the CRISIL Composite Bond Fund Index, has been assigned AAAF rating by CRISIL.

 VISION:To be a leader and role model in a broad based and integrated financial services business. To be the most trusted name in investment and wealth management, to be the preferred employer in the industry and to be a catalyst for growth and excellence of the asset management business in India.

MISSION:To consistently pursue investor's wealth optimization by: Achieving superior and consistent investment results. Creating a conductive environment to hone and retain talent. Providing customer delight. Institutionalizing system-approach in all aspects of functioning. Upholding highest standards of ethical values at all times.

VALUES: Integrity Commitment Passion Seamlessness Speed

PHILOSOPHY:Birla Sun Life Asset Management Company follows a long-term, fundamental research based approach to investment. The approach is to identify companies, which have excellent growth prospects and strong fundamentals. The fundamentals include the quality of the companys management, sustainability of its business model and its competitive position, amongst other factors.

TYPES OF SCHEMES Different types of mutual fund schemes

 Schemes according to Maturity Period:

A mutual fund scheme can be classified into open -ended scheme or close-ended scheme depending on its period.

Open-ended Fund/ Scheme:

An open-ended fund or scheme is one that is available for subscription and repurchase on a continuous basis. These schemes do not have a fixed maturity period. Investors can conveniently buy and sell units at Net Asset Value (NAV) related prices, which are de clared on a daily basis. The key feature of open-ended schemes is liquidity.

Close-ended Fund/Scheme:
A close-ended fund or scheme has a stipulated maturity period e.g. 5 -7 years. The fund is open for subscription only during a specified period at the t ime of launch of the scheme. Investors can invest in the scheme at the time of the initial public issue and thereafter they can buy or sell the units of the scheme on the stock exchanges where the units are listed. In order to provide an exit route to the investors, some close-ended funds give an option of buying back the units to the mutual fund at NAV related price. Regulations stipulate that at least one of the two exit routes is provided to the investor i.e. either repurchase facility or through listin g on stock exchanges. These mutual funds schemes disclose NAV generally on weekly basis.

Schemes according to Investment Objective:

A scheme can also be classified as growth scheme, income scheme or balanced scheme considering its investment objective. Such schemes may be open-ended or close ended schemes as described earlier. Such schemes may be classified mainly as follows

 Growth / Equity Oriented Scheme:

The aim of growth funds is to provide capital appreciation over the medium to long term. Such schemes normally invest a major part of their corpus in equities. Such funds have comparatively high risks. These schemes provide different options to the investors like dividend option, capital appreciation, etc. and the investors may choose an option dep ending on their preferences. The investors must indicate the option in the application form. The mutual funds also allow the investors to change the options at a later date. Growth schemes are good for investors having a long-term outlook seeking appreciation over a period of time.

Income / Debt oriented Scheme:

The aim of income funds is to provide regular and steady income to investors. Such schemes generally invest in fixed income securities such as bonds, corporate debentures, Government securities and money market instruments. Such funds are less risky compared to equity schemes. These funds are not affected because of fluctuations in equity markets. However, opportunities of capital appreciation are also limited in such funds. The NAVs of such funds a re affected because of change in interest rates in the Country. If interest rates fall, NAVs of such funds are likely to increase in the short run and vice versa. However, long term investors may not bother about these fluctuations.

Balanced Fund:
The aim of balanced funds is to provide both growth and regular income as such schemes invest both in equities and fixed income securities in the proportion indicated in their offer documents. These are appropriate for investors looking for moderate growth. They generally invest 40-60% in equity and debt instruments. These funds are also affected because of fluctuations in share prices in the stock markets. However NAVs of such funds are likely to be less volatile compared to pure equity funds.

Money Market or Liquid Fund:

These funds are also income funds and their aim is to provide easy liquidity, preservation of capital and moderate income.These schemes invest exclusively in safer short -term instruments such as treasury bills, certificates of deposit, comm ercial paper and inter-bank call money,

government securities, etc. Returns on these schemes fluctuate much less compared to other funds. These funds are appropriate for corporate and individual investors, as a means to park their surplus funds for short periods.

Gilt Fund:

These funds invest exclusively in government securities. Government securities have no default risk. NAVs of these schemes also fluctuate due to change in interest rates and other economic factors as is the case with income or debt orie nted schemes.

Index Funds:

Index Funds replicate the portfolio of a particular index such as the BSE Sensitive index, S&P NSE 50 index (Nifty), etc. These schemes invest in the securities in the same weightage comprising of an index. NAVs of such schemes would rise or fall in accordance with the rise or fall in the index, though not exactly by the same percentage due to some factors known as "tracking error" in technical terms. Necessary disclosures in this reg ard are made in the offer document of the mutual fund scheme. There are also exchange traded index funds launched by the mutual funds which are traded on the stock exchanges.

Sector specific funds:

These are the funds/schemes, which invest in the securiti es of only those sectors or industries as specified in the offer documents. E.g. Pharmaceuticals, Software, Fast Moving Consumer Goods (FMCG), Petroleum stocks, etc. The returns in these funds are dependent on the performance of the respective sectors/industries. While these funds may give higher returns, they, are more

risky compared to diversify funds? Investors need to keep a watch on the performance of those sectors/industries and must exit at an appropriate time. They may also seek advice of an expe rt.

Tax Saving Schemes:

These schemes offer tax rebates to the investors under specific, provisions of the Income Tax Act, 1961 as the Government offers tax incentives for investment in specified avenues. e.g. Equity Linked Savings Schemes (ELSS). Pension schemes launched by the mutual funds also offer tax benefits. These schemes are growth oriented and invest predominantly in equities. Their growth opportunities and risks associated are like any equity -oriented scheme. Asset Class Investment Sector Liquidity Trading Strategy Investment Strategy Security Selection

BIRLA MUTUAL FUND PRODUCTS

Growth Schems
Birla Sun Life Advantage Fund Birla Sun Life Dividend Yield Plus Birla Sun Life Midcap Fund Birla Sun Life MNC Fund Birla Sun Life India Oppprtunities Fund Birla Sun Life Infrastructure Fund Birla Sun Life India GetNext Fund Birla Sun Life Index Fund Birla Sun Life Top 100 Fund Birla Sun Life Equity Fund Birla Sun Life Frontline Equity Fund Birla Sun Life Buy India Fund Birla Sun Life New Millenium Fund Birla Sun Life Basic Industries Fund Birla Sun Life International Equity Fund Birla Sun Life Special Situations Fund Birla Sun Life Commodity Equity Fund Birla Sun Life Enhancedd Arbitrage Fund Birla Sun Life Tax Plan Birla Sun Life Tax Relife 96 Birla Sun Life Small & Midcap Fund Birla Sun Life Pure Value Fund
Birla Sun Life India Reforms Fund

Balance Schemes
Birla Sun Life Freedom Fund Birla Sun Life 95 Fund

Fund of Fund Schemes

Birla Sun Life Assest Allocation Fund

Income Schemes
Birla Sun Life MIP Birla Sun Life MIP Birla Sun Life Monthly Income Birla Sun Life Income Plus Birla Sun Life Income Fund Birla Sun Life Gilt Plus Birla Sun Life Govt. Securities Fund Birla Sun Life Dynamic Bond Fund Birla Sun Life Short Term Opp. Fund Birla Sun Life Cash Plus Birla Sun Life Savings Fund Birla Sun Life Ultra Shortt Term Fund Birla Sun Life Floating Rate Fund Birla Sun Life Cash Manager