CHAPTER

INTRODUCTION

INTRODUCTION

1
 Marketing Research is a research of manifold problems in marketing. Its purpose is
to aid decision- making in marketing, systematic gathering and analysis of
information is what it does in achieving its mission.

With the increased complexities of business activity marketing research too has
been growing in complexity and it has emerged as a highly specialized function of
marketing Management. Today carrying out research relating to customers
necessitates specialized skills and sophisticated techniques.

Branding means giving a specified name to a product or group of product

from one seller. In financial sector branding can be done on the basis of
performance, track record and availability of distributors

In a specific sense, product awareness includes those activities that supplement

both personal meeting and advertising, and coordinate them and make them
effective, such as displays, shows, demonstrations and other non-recurrent efforts
not in the ordinary routine.

DISTRIBUTION CHANNELS
A distribution channel is asset of marketing intermediaries or channels members ,
which forms links between AMC and customers . Intermediaries the need of
customer’s product from various AMC. The intermediaries indistribution channels
carry out key marketing activities-buying and selling , transporting, and financial
products as they move from producer to customers . For customers to find the right
products in the right products in the right place at the time distribution channels are a
key factor.

Distribution channel perform following functions :-

2
 • ACCESSIBILITY
• COMMUNICATION
• FEEDBACK
• EFFICIENCY
• ASSORTMENT

Development of Distribution Channel :-

To have a good distribution channel are Independent Financial Advisor an

important factor for any Asset Management Companies to increase its business.
• To develop a working network of following Independent Financial Advisor
owing functions should be done by the Asset Management Companies
• Impaneling more no of Independent Financial Advisor with Asset
Management Companies
• Providing services to Independent Financial Advisor regarding investors and
their personnel related with Asset Management Companies
• Having a system to provide solution to their Complains and Queries.
• Providing updated information related with mutual fund industry and schemes
to Independent Financial Advisor
• Giving information to Independent Financial Advisor about Brokerages,
incentives and Schemes
• Providing a thought Product Knowledge or Information to Independent
Financial Advisor
• Creating a feeling of Belongings among Independent Financial Advisor

3
 CHAPTER

INDUSTRY PROFILE

INDUSTRY PROFILE

4
 1.1 Mutual Fund
Mutual fund is a mechanism for pooling the resources by issuing units to
the
investors and investing in securities in accordance with objectives as disclosed
in offer document.
Investments in securities are wide spread across a wide cross-
section of
industries and sectors thus risk is reduced. Mutual fund issues units to the
investors in accordance with quantum of money invested by them.
Investors of
Mutual Funds are known as unit holders
.
The investors in proportion to their investments share the profits or
losses.
Mutual Fund is required to be registered with Securities and Exchange
Board of
India (SEBI).

Thus, a mutual fund is a collective investment process. An Asset Management

Company (AMC) collects many investors money. It invests this money in various
securities to generate returns for the investors. Investors get the net returns after
deducting the related expenses. If there is any loss, it would also be borne by the
investors. An Asset Management Company (AMC) manages the pool of money;
therefore, it is also an “indirect form of investment” for investors.
2.1Mutual Fund Industry Shares in GDP- The Global Scenario

5
COUNTRY %

Australia 87

USA 72

Brazil 30

UK 23
South Korea 21

India 6

Japan 5

6
ORGANISATION OF MUTUAL FUND

There are many entities involved and the diagram below illustrates the organiz
ational set up of a mutual fund

How does a Mutual Fund work?

7
 Organization of mutual fund

AMFI (ASSOCIATION OF MUTUAL FUNDS IN INDIA)

A mutual fund is a body corporate that pools the savings of a number of investors
and invests the same in a variety of different financial instruments and securities.
The income earned through these investments and the capital appreciation realized
by the scheme is shared by its unit holders in the proportion to the number of units
held by them. Mutual funds can thus be considered as financial intermediaries in
the investment business that collect funds from the public and invest on behalf of
the investors. The losses and gains accrue to the investors only. The investment
objectives outlined by a mutual fund in its prospectus are binding on the mutual
fund scheme. The investments objectives specify the class of securities a mutual

8
fund can invest in. mutual funds invest in various asset classes like equity, bonds,
debentures, and commercial paper and government securities.

2.2GROWTH IN ASSETS UNDER MANAGEMENT

Year Rs. In crores

Mar-65 25
Mar-87 4564
Mar-93 47000
Jan-03 121805
Feb-03 87190
Mar-03 79464
Mar-04 139616
Mar-05 149554
Mar-06 231862
Mar-07 326388
Mar-08 505152

9
 The graph indicates the growth of assets over the years

WHAT IS NAV?

Net Asset Value of the fund is the cumulative market value of the
assets of the fund net of its liabilities. NAV per unit is simply the net value of
assets dividend by the number of units outstanding. Buying and selling into
funds is done on the basis of NAV- related prices
NAV is calculated as follows:
NAV = (Market value of the funds investments + Receivables + Accrued
Income – Liabilities – Accrued Expenses) / Number outstanding units.

10
 M u tu a l F u n d s

UTI P u b lic S e c to r P riv a te S e c to r

J V s w ith fo re ig n p a rtn e rs F o re ig n h o u s e s In d ia n H o u s e s

The Indian Mutual Fund Industry

1. Bank Sponsored

A. Joint Ventures – Predominantly Indian

1. SBI Funds Management Private Limited

B. Others
1. BOB Asset Management Company Limited
2. Can bank Investment Management Services Limited
3. UTI Asset Management Company Private Limited.

2. Institutions
Jeevan Bima Sahayog Asset Management Company Limited

11
3. Private Sector
Indian
• Benchmark Asset Management Company Private Limited.
• Cholamandalam Asset Management Co. Ltd.
• Credit Capital Asset Management Co. Ltd.
• Escorts Asset Management Ltd.
• J.M. Financial Asset Management Private Ltd.

• Kotak Mahindra Asset Management Ltd.

• Reliance Capital Asset Management Co. Ltd.

• Sahara Asset Management Co. Private Ltd.
• Sundaram Asset Management Co. Ltd.
• Tata Asset Management Ltd.

Joint Ventures – Predominantly Indian

 Birla Sun Life Asset Management Ltd.
 DSP Merrill Lynch Fund Managers ltd.
 HDFC Asset Management Co. Ltd.
 Prudential ICICI Asset Management Co. Ltd.

12
  Principal PNB Asset Management Co Private Ltd

Joint Ventures –Predominantly Foreign.

1. ABN AMRO Asset Management (India) Ltd.
2. Deutsche Asset Management (India) Private Ltd.
3. Fidelity Fund Management Private Ltd.
4. Franklin Templeton Asset Management (India) Private Ltd.
5. HSBC Asset Management (India) Private Ltd.
6. ING Investment Management (India) Private Ltd.
7. Morgan Stanley Investment Management Private Ltd.
8. . Standard Chartered Asset Management Co. Private Ltd

Types Of Mutual Fund Schemes

By Structure

 Open –Ended Schemes

 Close Ended Schemes
 Interval Schemes

By Investment Objective
 Growth Schemes
 Income Schemes
 Balanced Schemes
 Money Market Schemes

13
Other Schemes
 Tax Saving Schemes
 Special Schemes
• Index Schemes
• Sector Specific 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 maturity period.

• Open-ended Fund/ Scheme

• Close-ended Fund/ Scheme

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:

14
 • Growth / Equity Oriented Scheme
• Income / Debt Oriented Scheme
• Balanced Fund
• Money Market or Liquid Fund
• Gilt Fund
• .Index Funds
• Sector specific funds/schemes?
• Tax Saving Schemes?

Mutual Fund Structure

The SEBI (Mutual Funds) Regulations 1993 define a mutual fund (MF) as a fund
established in the form of a trust by a sponsor to raise monies by the Trustees
through the sale of units to the public under one or more schemes for investing in
securities in accordance with these regulations.

These regulations have since been replaced by the SEBI (Mutual Funds)
Regulations, 1996. The structure indicated by the new regulations is indicated as
under.

A mutual fund comprises four separate entities, namely sponsor, mutual fund trust,
AMC and custodian. The sponsor establishes the mutual fund and gets it
registered with SEBI.

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 sponsor is required to contribute at least 40% of the minimum net worth (Rs.
10 crore) of the asset management company. The board of trustees manages the
MF and the sponsor executes the trust deeds in favors 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.

15
 Sponsor Company Establishes the MF as a trust registers
(E.g. Franklin Templeton Asset the MF with SEBI
Management)

Managed by a board of trustee

Holds unit-holders in MF enter into

Mutual Fund enter
an agreement
into an agreement
with SEBI and ensure
with sebi and ensure
compliance

AMC Floats MF funds manages the fund

(E.g. Franklin Templeton Asset as per SEBI guidelines and AMC
Management) agreements

Custodian Provides custodial services

Provides registrar and transfer

Registrar services

Distributors Provides the network of the

distribution of the schemes to the
investors

Types of Risks

All investments involve some form of risk. Even an insured bank account is
subject to the possibility that inflation will rise faster than your earnings, leaving
you with less real purchasing power than when you started (Rs. 1000 gets you less
than it got your father when he was your age). Consider these common types of
risk and evaluate them against potential rewards when you select an investment.

16
 1.Market Risk

At times the prices or yields of all the securities in a particular market rise or fall
due to broad outside influences. When this happens, the stock prices of both an
outstanding, highly profitable company and a fledgling corporation may be
affected. This change in price is due to "market risk".

2 Inflation Risk

Sometimes referred to as "loss of purchasing power." Whenever inflation sprints

forward faster than the earnings on your investment, you run the risk that you'll
actually be able to buy less, not more. Inflation risk also occurs when prices rise
faster than your returns.

3.Credit Risk

In short, how stable is the company or entity to which you lend your money when
you invest? How certain are you that it will be able to pay the interest you are
promised, or repay your principal when the investment matures

4.Exchange Risk

A number of companies generate revenues in foreign currencies and may have

investments or expenses also denominated in foreign currencies. Changes in
exchange rates may, therefore, have a positive or negative impact on companies
which in turn would have an effect on the investment of the fund.

5.Investment Risk

The sect oral fund schemes, investments will be predominantly in equities of

select companies in the particular sectors. Accordingly, the NAV of the schemes
are linked to the equity performance of such companies and may be more volatile
than a more diversified portfolio of equities.

6.Changes in the Government Policy

Changes in Government policy especially in regard to the tax benefits may impact
the business prospects of the companies leading to an impact on the investments
made by the

17
 CHAPTER

3
ORGANISATION OVERVIEW

18
 ORGANISATION OVERVIEW

In 1940, Sir John Templeton became controlling shareholder and president

of investment counseling company Templeton, Dobbrow and Vance Inc. (TDV).
John W. Galbraith became president of Securities Fund Investors, Inc.
(SFI) in 1974. In 1977, Mr. Galbraith acquired SFI from Sir John and began
building the broker/dealer network that distributes the open-end Templeton funds
throughout the United States.
In 1978, SFI moved its operations to St. Petersburg, Florida. In 1980, a
subsidiary of SFI registered as a transfer agent with the Securities and Exchange
Commission (SEC) and began providing transfer agency services to the open-end
Templeton funds.
Templeton Investment Counsel, LLC. Commenced business as an
investment adviser in Fort Lauderdale, Florida, in 1979. Initially, it built upon the
international securities analysis and research sources already established by Sir
John Templeton. Templeton Investment Counsel subsequently developed its own
research capabilities and began managing private and institutional accounts.
In January 1986, these companies, which had been operating in close
association with one another, were combined to form Templeton, Galbraith &
Hansberger Ltd. In February 1986, the company made an initial public offering of
Ordinary Shares on the London Stock Exchange
since that time; Templeton has improved and expanded both its investment
management and its distribution capabilities. In addition to domestic retail fund
distribution, private accounts are solicited from pension funds and institutions
worldwide. Templeton is known for its global investment efforts headed Jeff
Everett, chief investment officer of Templeton Global Equity Group, Gary Motyl,
chief investment officer of Templeton Institutional Global Equities, as well as its
emerging markets endeavors led by Dr. J. Mark Mobius, president of Templeton
Asset Management Ltd.

Worldwide

19
  Assets under Management: US $ 601.1 billion (April '08), over 17.1
million billable investor accounts world-wide.
 Extensive international presence and breadth of product line with
offices in 29 countries, supported by over 450 investment
professionals.
 60 year of experience in global investing
 Offers more than 200 investment solutions under the Franklin,
Templeton, Mutual Series, Bissett, Fiduciary Trust and Darby names
globally.

Franklin Templeton India

Franklin Templeton's association with India dates back to more than a decade
as an investor. As part of the group's major thrust on investing in markets around
the world, the India office was set up in 1996 as Templeton Asset Management
India Pvt. Limited. It flagged off the mutual fund business with the launch of
Templeton India Growth Fund in September 1996, and since then the business
has grown at a steady pace

Assets Under Management & Assets Mix (in Rs.

Crs.)

100%
23% 28% 27% 20%
33% 33%
80%
15% 22%
60% 21%
57% 49% 41%
40%
58% 58%
46%
20% 26%
20% 23%
0%
Sep-02 sep-03 Sep-04 Sep-05 Sep-06 Apr-07

Equity Debt Cash

A long-term commitment

20
 Since starting its operations in India, Franklin Templeton has invested a
considerable amount of time, effort and resources towards investor and distributor
education, the belief being - to be successful in the long term, the fundamentals
need to be corrected, at whatever cost! This has resulted in various advertising
campaigns aimed at educating investors, participation in seminars and distributor
training programs. Franklin Templeton has played a pivotal role in steering the
industry to its current stage, and as long term players, we continue to strive to
achieve the objective of 'making mutual funds an investment of choice' for both
individual and institutional investors.
In July 2002, Franklin Templeton India acquired Pioneer ITI, another
leading fund house in India to create an organization with rich investment
experience over market cycles, one of the most comprehensive product portfolios,
footprint across the country and an in-house shareholder servicing function. The
huge synergies that existed in the two organizations have helped the business
grow at a rapid pace, catapulting the company to among the top two fund houses
in India.

Company’s Vision
To be the premier global investment management organization by offering high
quality investment solutions, providing outstanding service and attracting,
motivating and retaining talented individuals.

India
 One of the largest Mutual Funds with over Rs.24,510 crores In assets.(as on
April 07).
 Over 21 lakh shareholder accounts.
 Healthy asset mix and great choice in equity and fixed-income Investment
management style
 Sizeable footprint in the country; presence in 33 cities.
 Manages 4 equity funds with a track record of over 10 years.
 Manages 3 of the 15 largest equity funds.

21
OBJECTIVES OF FRANKLIN TEMPLETON INVESTMENTS
The principal objective of FRANKLIN TEMPLETON
INVESTMENTS was to reduce the risk that is always present in the share market
and also to give the investors a fair return than the banks. Today the investors do
not have enough idea to invest in the share market nor do they have the time to
ponder over the working principles of the share market. There are fund managers
in every mutual fund company to analyze the market and then invest on behalf of
the investors.

So FRANKLIN TEMPLETON INVESTMENTS made the job of the

investors easy by investing on behalf of them. Thus the returns are high and the
work has also become very easy. It has provided a wide range of products, which
are very specific according to the needs of the investors

PRODUCTS
Franklin Templeton Investments has a wide variety of products to cater to
the needs of different types of investors. The main products of Franklin Templeton
Investments can be said to consist of the following: -

OPEN END DIVERSIFIED EQUITY SCHEMES

 Franklin India Bluechip Fund (FIBCF)

 Templeton India Growth Fund (TIGF)
 Franklin India Prima Fund (FIPF)
 Franklin India Prima Plus (FIPP)
 Franklin India Opportunities Fund (FIOF)
 Templeton India Equity Income Fund (TIEIF)
 Franklin India Index Fund (FIIF)

22
  Franklin India Flexi Cap Fund (FIFCF)
 Franklin India High Growth Companies Fund (FIHGCF)

OPEN END SECTOR EQUITY SCHEMES

 Franklin FMCG Fund (FFF)

 Franklin Pharma Fund (FPF)
 Franklin InfoTech Fund (FIF)

OPEN END TAX SAVINGSCHEMES

 Franklin India Tax shield (FIT)

 Franklin India Pension Plan (FIPP)

OPEN END INCOME AND LIQUID SCHEMES

 Templeton India Income Fund (TIIF)
 Templeton India Income Builder Account (TIIBA)
 Templeton India Government Securities Fund (TGSF)
 Templeton India Short-Term Income Fund (TISTIP)
 Franklin India International Fund (FIIF)
 FT India Monthly Income Plan (FTIMIP)
 Templeton Monthly Income Plan (TMIP)

OPEN END FUND OF FUNDS SCHEMES

 FT India Life stage Fund of Funds (FTLF)
 FT India Dynamic PE Ratio Fund of Funds (FTDPEF)

23
 OPEN END HYBRID SCHEME
 FT India Balanced Fund (FTIBF)
 Templeton India Children’s Asset Plan (TICAP)

24
 ORGANIZATION CHART

PRESIDENT (LEADING INDIA)

SALES HEAD (COUNTRY)

SENIOR VICE PRESIDENT

VICE PRESIDENT

ASSISTANT VICE PRESIDENT

REGIONAL SALES MANAGER

BRANCH MANAGER (METRO)

SENIOR MANAGER

AREA SALES MANAGER

BUSINESS DEVELOPMENT MANAGER (BRANCH LEVEL)

BUSINESS DEVELOPMENT EXECUTIVE

MANAGEMENT TRAINEE

25
 CHAPTER

RESEARCH METHODOLOGY

26
 RESEARCH METHODOLOGY
Introduction:

Research is an important aspect of any project. It is a systematic

collection, recording, and analysis of data concerning the related issues. The
principal objective of this task is to unfold certain facts regarding a predicting area
of inquiry. It is a significant management tool for working out strategic business
decision this job of research is strenuous and requires tremendous patience. To
make decisions regarding any thing, information is needed. This critical role of
providing in formation is fulfilled by marketing research. Marketing research
could be a clearly defined search for answers to some questions, which if
answered would lead a company to make critical marketing decisions on a
strategic or tactical level.

Marketing Research Process:

27
Information Need:
• The need of information for the project were:-
• No of distributors attached with FTI
• Perception of distributors about FTI.

Research Objective;
 To study the Mutual Fund industry
 To develop distribution channel .
 To suggest the performing Schemes to the Independent
Financial Advisor
 To get feedback from Independent Financial Advisor
 To empanel distributors for Franklin Templeton Investments.
 To understand the SIP route of investment

Data sources

Primary data :
To collect Primary data survey method was used . The primary data was
collected during the survey by interviewing the Independent Financial
Advisor filling the questionnaires by direct interviews.

Secondary data
Secondary data collected through published sources such as internet websites ,
magazines , academic books, value research.

Research Methodology:

Survey method
Structured questionnaire was prepared and questionnaire were fixed

By personal interview
Personal interview was conducted with investors

28
 Sample size
Target size was assumed by analyzing the population of the area and number
of potential customers.
The sample of 147 people of different regions are taken and analyzed

Data Collection

The source of information for research was both primary and secondary data.
Primary data was utilized due to its originality and reliability. Secondary data was
utilized when collection of primary data became difficult
• Primarily data collection was done with using tools i.e. questionnaire and
personal interview.
• Sampling method by creating adequate questionnaire.
• Secondary data collection was done with using magazines, various internet
sources and internal records.

Data Presentation

Univariate technique which was found most suitable to analysis data as there
was two and more measurement, on each element and the variables are analysised
simultaneously.

Method of sampling :

The sample size for two month summer project was 90 Independent Financial
Advisor
In which the Independent Financial Advisor are from different regions Patna city.

29
 Types of Questionnaire:

Structured Questionnaire was used for the surveys which contained close ended as
well as open ended questions so as to get the required information from the selected
group of Independent Financial Advisor

Questionnaire Design:

The questionnaire was simple and lucid, so that the respondent understand it
easily and so the maximum data can be taken from the respondent to catch the
objective of the project .

Analysis

The facts and figures collected were processed with a view to reducing them to
manageable proportion. Only by such a careful and systematic processing, the
data collected will lend itself for statistical treatment and meaningful
interpretation leading to formulation of a theory or a finding. Thus, the data
processing comprises of editing, coding, categorization, and tabulation.

30
SCOPE OF PROJECT

The scope of the project is limited to only mutual fund industry , developing
distribution channel , suggesting them about different funds of FRANKLIN
TEMPLETON INVESTMENTS & empanelling more distributors for FTI.

In a nutshell the scope of the project was to –

1 .Visit Independent Financial Advisor in different regions in Patna city
• Patna central
• Patna west
• Patna east
2 .Get the feedback of Independent Financial Advisor

• About FTI among investors

• Services provided by the FTI to them
• About their business with FTI
• What steps should be taken by the FTI to increase its investor base in their
region
• About there queries and complain
3. Convince them to do business with FTI
4. Be in contact with them regularly on phone during project time.
5. Provide updated information about best performing Schemes of FTI

The sample of 90 Independent Financial Advisors of different regions were

taken and analyzed. The validity of these findings of this project is limited to the
period during which the market survey was conducted. (June –July)

31
 CHAPTER 5

DATA ANALYSIS
&
PRESENTATION

32
 I was given the project to develop independent Financial Advisor (IFAs) Channel
w.r.t. Franklin Templeton Schemes in different localities Patna region and empanel
distributors to enlarge the market base so that market share of the company could
increase.

5.1 No of I.F.A in different location

Region No of IFAs

PATNA EAST 63

PATNA CENTRAL 283

PATNA WEST 144

No of IFAs

63
144
PATNA EAST
PATNA CENTRAL
PATNA WEST
283

Analysis:-

33
 From the above table it is clear that the no. of Independent Financial Advisor
associated with FTI is more in Patna Central region.

5.2 Satisfaction of Distributors with reference to Services &

Brokerages

Name of the AMC No. of Distributors

FTI 24
ICICI 21
RELIANCE 19
HDFC 18
OTHERS 08
TOTAL 90

No. of Distributors

FTI
24
ICICI
21
RELIANCE
90 HDFC
19
OTHERS
8 18
TOTAL

Analysis:-
Hence FTI comes second in providing services and brokerages to its
distributors. The first one is ICICI.

34
5.3 Overall consistent performance by AMC’s in maximum of
there schemes in view of distributors.

Name of the AMC No. of Distributors

FTI 45
ICICI 12
HDFC 12
RELIENCE 11
OTHERS 12
TOTAL 90

No. of Distributors

FTI
45
ICICI
90 HDFC

12 RELIENCE
12 OTHERS
12 11
TOTAL

Analysis:-

Hence in terms of consistent performance in maximum of there schemes, a

maximum 50% of distributors believe that FRANKLIN TEMPLETON
INVESTMENTS is the best option available to the new investors.

35
5.4 IFAs attached with FTI and their % of business with FTI and
with other AMC

REGION % of business with FTI % of business with others

PATNA CENTRAL 28 72
PATNA WEST 23 77
PATNA EAST 18 82

90 82
77
80 72
70
60 % of business
50 with FTI
40 % of business
28
30 23 with others
18
20
10
0
PATNA PATNA PATNA
CENTRAL WEST EAST

Analysis :-

Thus from above table it can be seen tha in Patna city market Independent Financial
Advisor were doing well for FTI

36
 FUND COMPARISIONS

5.5 Fund Details :

Sr. No Scheme Name AMC Objective

1 Franklin India Tax FTI ELSS

Shield 99
2 UTI Tax Saving Plan UTI ELSS
200
3 Magnum Tax Gain SBI ELSS

5.6 Fund Comparison-Performance View:

Sr. Schemes 1- year 3- year 5- year 5-year

No return return return rank
1 UTI Tax 11.73 34.80 37.34 16/32
Saving
Plan 200
2 Franklin 18.84 30.09 40.41 6/32
India
Tax
Shield
99
3 Magnum 11.14 35.28 64.40 1/32
Tax
Gain

37
 100
90
80 UTI- Tax Saving
70 Plan 200
60
Franklin India Tax
50
40 Shield 99
30 Magnum Tax
20 Gain
10
0
1- year 3- year 5-year 4th Qtr
return return return

Interpretation:

• From the above comparison it is evident that Magnum Tax Gain fund has
Performed best in the category with 64.40% of returns as compared to
Franklin India tax shield 99 funds and UTI Tax saving funds-200 who have
given returns as 40.41% and 37.34% resp.

5.7 Fund Comparison-Pharma Sector Fund

UTI Pharma Franklin Magnum

Healthcare Pharma Fund Pharma
Fund Fund
AMC UTI FTI SBI

Objective Equity Equity Equity

Sub- Sectoral- Sectoral- Sectoral-

Objective Pharma Pharma Pharma
Type Open Open Open

38
 5.8 Fund Comparison-Performance View:

Sr. Schemes 1- year 3- year 5- year 5-

No return return return yea
r
ran
k
1 UTI 3.20 12..86 22.57 2/5
Pharma
Healthca
re Fund
2 Franklin 2.78 13.91 26.39 1/5
Pharma
Fund
3 Magnum -8.22 14.81 22.32 3/5
Pharma
Fund

50

40 UTI pharma&
Healthcare
30
Fund
20 Franklin
Pharma Fund
10

0 Magnum
Pharma Fund
1-year 3- year 5- year
-10
return return return
-20

Interpretation:

From the above comparison it is evident that Franklin Pharma fund has
Performed best in the category with 26.392% of returns as compared to
Magnum Pharma fund and UTI Pharma and Healthcare funds who
have given returns as 22.32% and 22.57% resp.

39
 CHAPTER 6

FINDINGS
&
SUGGESTIONS

Observation and finding at Branch level

a. As Patna being a big city Franklin Templeton branch is inadequately staffed

and not specious too .
b. B. As Patna branch has to look after both Bihar and Jharkhand region there is a
deficiency like
• Fact sheets and accounts statement are not dispatched quickly to the
investors
• Distributors are not updated about the schemes or about NFOs( New
Fund Offers )

40
 c. On advertisement front, Franklin Templeton is not as aggressive as its
competitors.
d. There is a communication gap between the branch office and the rural office.
e. As Patna being a big city Franklin Templeton branch is inadequately staffed
and not specious too .
f. B. As Patna branch has to look after both Bihar and Jharkhand region there is a
deficiency like
• Fact sheets and accounts statement are not dispatched quickly to the
investors
• Distributors are not updated about the schemes or about NFOs
g. On advertisement front, Franklin Templeton is not as aggressive as its
competitors.
There is a communication gap between the branch office and the rural office

Observation and finding at Business level

• There is very good market potential in selected area of Patna city.

• As far as consistent performance maximum of 45 Independent Financial
Advisor out of 90 believes that FTI is the best.
• No. of Independent Financial Advisor more in urban areas than in rural market
hence the rural market may be trapped.
• In both rural market and urban market about one third of the IFAs of the total
Independent Financial Advisor of that areas, were attached with FTI.
• On the front of providing better services and brokerages to its Independent
Financial Advisor the situation is not very well for FTI.
• Investors have lack of knowledge about different types of funds.
• People feel safe to invest their fund in Bank and Post office because of high
risk in mutual fund compare to bank and post office.

There are some ground rules for the common man who
Wants to enter this world of investments and start investing in
Mutual funds.

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 • Start Early:
• Keep some cash aside:
• Ask yourself how much risk you can take:
• Bear in mind inflation will eat into your savings:
• Think carefully about how long you will be investing for:
• Spread your money across a range of investments:
• Invest regularly:
• Choose your funds carefully:
• Remember that time not timing is the key to successful
• investing:
• Review your investments:

Suggestions:
1. As Patna branch is less staffed and has to look two states hence at
least two or three more Marketing executives should be appointed to
fulfill the communication gap between the branch office and the rural
markets and a separate branch should be opened at Ranchi.
2. As FTI is a foreign AMC, distributors get difficulties to convince the
investors, who are not much aware about FTI , hence there should be
advertisement in vernacular language newspaper , like Dainik Jagran ,
Hindustan, Times of India etc.
3. To tap big market of Bihar region more distributors should be
empanelled and they should be given some lucrative gifts like
Holidays packages, some incentives etc so they can work
enthusiastically for the company.

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6.1 The Investors Perspective: Funds vs. Other Products:

Investment Risk Investment

Objective Tolerance Horizon
Equity Capital High Long Term
Appreciation
F1 Bonds Income Low Medium

Corporate Income H-M-Low Medium

Debenture
Company Income H-M-Low Medium
Fixed
Deposits
Bank Income Low Flexible All
Deposit Term
PPF Income Low Long Term

Life Risk cover Low Long Term

Insurance
Gold Inflation Hedge Low Long Term

Real Estate Inflation Hedge Low Long Term

Mutual H-M-Low Flexible All

Funds Term

6.2 The Investors Prospective At Different Stages Of Life

Cycle
Stages of Surplus to Risk tolerance options
lifecycle save
Childhood - - -
stage
Young & High High Life Insurance,
Unmarried Equity
Young & High High Emergency
Married fund equity
Young Married Moderate Low/Moderate Investment for
& Child child education
Married and Moderate Low Debt service/
with growing/ pension
adult Children provision
Post family/ Low Low Pension
Pre-retirement Provision
Retirement Nil Nil

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Systematic Investment Plan (SIP):

These require the investor to investor to invest a fixed to sum periodically,

thereby letting the investor save in a disciplined and the phased manner. The
mode of the investment could be through direct debit to the investor’s salary or
bank account. Such plans are also known as Systematic Investment Plan.
Investors looking for rupee cost averaging will generally opt for that offer this
facility.

A modified version of SIP is the Voluntary Accumulation Plan (VAP) that allows
the investor flexibility with respect to the amount and frequency of investment.
Note that both SIP and VAP are only two optional ways of investing in a
disciplined manner, in open end funds. The difference is that in the SIP, the
investor agrees as a contractual obligation to deep investing, whereas in case of
the VAP, he is not obliged to keep investing but has to impose voluntary self
discipline.

6.3

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 Amount Purchase No. of Units
Invested Price (Rs.) Purchased
(Rs.)
Initial 1000 10 100
Investment
1 1000 8.20 121.95
2 1000 7.40 135.14
3 1000 6.10 163.93
4 1000 5.40 185.19
5 1000 6.00 166.67
6 1000 8.20 121.95
7 1000 9.25 108.11
8 1000 10.00 100.00
9 1000 11.25 88.89
10 1000 13.40 74.63
11 1000 14.40 69.44
TOTAL 12,000 - 1,435.90

Average unit cost Rs 12,000/1,435.9 = Rs 8.36

Average unit price 109.6/12 = Rs 9.13

Unit price at beginning of next quarter Rs 14.90

Market value of investment 1435.9 * 14.90= Rs 21,395/-

The investor liquidates his units and gets back Rs 21,395/-

Using the SIP strategy the investor can reduce his average cost per unit. The
investor gets the advantage of getting more units when the market is turned down.

Rupee Cost Averaging:

If an investor invests a fixed amount in an investment avenue, say mutual

funds, he will benefit from this disciplined approach, in the long run even if the
N.A.V of the mutual fund in which he is investing is fluctuating from time to time.

45
This is because, if a fixed sum is invested, when the N.A.V is high, the investor
will buy fewer units; he will buy more units when the NAV is lower. This results
in
the average cost of the investment lower to the investor. This strategy is called
as rupee cost averaging. Instead of timing the market and trying to enter or exit
At random points, in case the investors adopts a disciplined approach of staying
invested, regular.

CHAPTER
7

46
 CONCLUSION

QUESTIONNAIRE
FOR
PRODUCT AWARENESS

NAME OF THE IFA -: _ __ _ _ _ _ _ _ _ _ _ _ _ _ _ _

ADDRESS: _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
____________________
_ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

CONTACT NO. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

47
Q 1 Are you attached with FRANKLIN TEMPLETON
INVESTMENTS?
a) Yes
b) No

Q 2 What kind of client do you have?

a) Government Job
b) Private Job
c) Businessman
d) Others

Q 3. Where do they prefer to invest there money?

a) Banks
b) Post-office
c) Mutual funds
d) Others

Q.4 Do they know about mutual funds?

a) Yes
b) No

Q.5 What is the % of your clients are new investor in mutual funds?
a) 0-25%
b) 25- 50%
c) 50 -75%
d) 75 -100%

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 Q.6 Out of your total Business with AMCs (Asset Management
Companies ), how much % is with Franklin Templeton
a) 0 - 25 %
b) 25 – 50 %
c) 50 – 75 %
d) 75 -100 %
Q.7 Which AMC Asset Management Company provides you better
services and solution to your Complains?
a) ICICI
b) HDFC
c) FTI
d) Others

Q.8 Which AMC has an attractive policy of giving Brokerages to its

Distributors?
a) ICICI
b) HDFC
c) FTI
d) Others

Q.9 Which AMC do you find most prompt in providing you updated
information and data about the schemes ……..

Q.10on advertisement front how many points you would like to give
to FTI out of 10…

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Q.11 In your view which AMC provide an overall consistent
performance in maximum of its schemes
a) FTI
b) ICICI Prudential
c) Reliance
d) HDFC
e) OTHERS

BIBLIOGRAPHY

1) Value Research magazine

2) Marketing Management by Philip Kotler
3) www.franklintempletonindia.com
4) www.indiainfoline.com
5) www.amfiindia.com

6) Marketing Management by V.S. Ramaswamy & S. Namakumari

7) www.hdfcfund.com

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