L.

S RAHEJA COLLEGE OF ARTS AND COMMERCE

JUHU ROAD, SANTACRUZ (W), MUMBAI 400054 PROJECT REPORT ON

INDIAN MUTUAL FUND INDUTRY SUBMITTED BY AWADHESH GIRI T.Y.B.COM (FINANCIAL MAREKTS) SEMESTER V
PROJECT GUIDE

PROF. NAVEEN ROHATGI UNIVERSITY OF MUMBAI

2011 - 2012

DECLARATION
I hereby declare that I have successfully completed the project on INDIAN MUTUAL FUND INDUSTRY for the academic year 2010-2011. The project is done under the guidance of Prof. Naveen Rohatgi and this project work is submitted in the partial fulfillment of the requirements for the award of the degree of Bachelor of Commerce (Financial Markets) The information provided in the project is true and to the best of my knowledge.

Signature of the Student Awadhesh Giri Roll No: 10 T.Y.B.F.M

CERTIFICATE
This is to certify that Awadhesh Giri student of TY-B.Com (Financial Markets) Semester V of L. S Raheja College of Arts & Commerce has successfully completed the project on Indian Mutual Fund Industry under the guidance of Prof. Naveen Rohatgi for the academic year 2010-2011.

Course Co-ordinator (Prof. Abdul Kadir Khan)

Principal

College Seal

Project Guide Guide (Prof. Naveen Rohatgi)

External

PREFACE The main purpose of doing this project was to know about mutual fund and its functioning. This helps to know in details about mutual fund industry right from its inception stage, growth and future prospects. It also helps in understanding different schemes of mutual funds. Because my study depends upon prominent funds in India and their schemes like equity, income, balance as well as the returns associated with those schemes. The project study was done to ascertain the asset allocation, entry load, exit load, associated with the mutual funds. Ultimately this would help in understanding the benefits of mutual funds to investors.

ACKNOWLEDGEMENT
My gratification and privilege writing this acknowledge for my project guide Prof. NAVEEN ROHATGI & all other faculty from the college. I also show gratitude to the college Liberian for providing us with the valuable books. I am also grateful to all my friends, family members & college faculty for assisting me all through the project. Everyone has been commendably supportive, all I can articulate is been utter Harmony on the project INDIAN MUTUAL FUND INDUSTRY.

MUMBAI

AWADHESH GIRI

EXECUTIVE SUMMERY
A mutual fund is a scheme in which several people invest their money for a common financial cause. The collected money invests in the capital market and the money, which they earned, is divided based on the number of units, which they hold. The mutual fund industry started in India in a small way with the UTI Act creating what was effectively a small savings division within the RBI. Over a period of 25 years this grew fairly successfully and gave investors a good return, and therefore in 1989, as the next logical step, public sector banks and financial institutions were allowed to float mutual funds and their success emboldened the government to allow the private sector to foray into this area. The advantages of mutual fund are professional management, diversification, and economies of scale, simplicity, and liquidity. The disadvantages of mutual fund are high costs, over-diversification, possible tax consequences, and the inability of management to guarantee a superior return. The biggest problems with mutual funds are their costs and fees it include Purchase fee, Redemption fee, Exchange fee, Management fee, Account fee & Transaction Costs. There are some loads which add to the cost of mutual fund. Load is a type of commission depending on the type of funds. Mutual funds are easy to buy and sell. You can either buy them directly from the fund company or through a third party. Before investing in any funds one should consider some factor like objective, risk, Fund Managers and scheme track record, Cost factor etc. There are many, many types of mutual funds. You can classify funds based Structure (open-ended & close-ended), Nature (equity, debt, balanced), Investment objective (growth, income, money market) etc. The most important trend in the mutual fund industry is the aggressive expansion of the foreign owned mutual fund companies and the decline of the companies floated by nationalized banks and smaller private sector players. Reliance Mutual Fund, UTI Mutual Fund, ICICI Prudential Mutual Fund, HDFC Mutual Fund and Birla Sun Life Mutual Fund are the top five mutual fund company in India. Reliance mutual funding is considered to be most reliable mutual funds in India. People want to invest in this institution because they know that this institution will never dissatisfy the mat any cost.

INDEX
SR. NO: CONTENTS PAGE NO:

1 2 3 4 5 6 7

Introduction Of Mutual Funds History Of Mutual Funds Advantages And Disadvantages Types Of Mutual Funds Schemes In India Net Asset Value(NAV) Mutual Fund Fees And Expenses Selection Parameters For Mutual Funds Working Of Mutual Funds Mutual Funds In India Mutual Funds Companies In India

01 05 10-13 15 24 26 29

8 9

33 41 43 56 57

10 11 12

Conclusion References Annexure1.1

ANNEXURE 1.1

Have you ever invested in Mutual Fund?

YES

YES

NO

.
10%

YES

NO

90%

What is your priority while investing your money?

YES

NO

26% Safety High Returns Liquidity 61% 10% Tax Benefits

3%

Which type of investment do you prefer?

Mutual Fund Fixed Deposits Bonds Shares

Real Estate

.
5% 15%

30%

Mutual fund Bonds Fixed Deposit Shares

5%

Real Estate

45%

Which of the following Mutual Fund Scheme would you prefer?

Growth Scheme Money Market Scheme

Balanced Scheme

Tax Saving Scheme

Others

.
2% 20%

Growth Scheme 40% Balanced Scheme Money Market Tax Saving scheme Others

30%

8%

Who is the regulator of the mutual funds in India?

RBI

IRDA

SEBI

OTHERS

.
0% 2% 3%

RBI IRDA SEBI OTHERS

95%

Do you thing that Mutual Funds have contributed towards economic development of India?
YES NO

MAY BE

10% 5%

YES NO MAY BE

85%