Investment preference of investors for

Mutual fund
Project Report
Submitted to

UNICON INVESTMENT SOLUTION New delhi

In partial fulfillment of the requirements of the degree of

Master of Business Administration

Prepared by Training Supervisor:

Ashana Yadav Mr. Raghvendra Singh

M.B.A 3rd Semester (Branch Manager)

2009-10

Department of Business Administration

Technical Education & Research Institute

Post-Graduate College, Ghazipur-233001 (U.P)

 DECLARATION

I Ashana Yadav, here by declare that this research project report entitled

Investment preference of investors for Mutual fund has been prepared by me under

the supervision of Mr. Raghvendra Singh.

This research project report is my bona fide work and has not been submitted in

any form to any university or Institute for the award of any degree or diploma prior to the

under mentioned date. I bear the entire responsibility of submission of this project report.

Ashana Yadav
M.B.A. 3rd Semester

Department of Business Administration

Technical Education & Research Institute

P.G. College, Ghazipur

 ACKNOWLEDGEMENT

A research project report is never the sole product of a person whose

name has appeared on the cover. Even the best effort may not prove

successful without proper guidance. For a good project one needs proper

time, energy, efforts, patience and knowledge. But without any guidance it

remains unsuccessful. I have done this research project report with the best

of my ability and hope that it will serve its purpose.

It was really a great learning experience and I am really thankful to

Mr. Raghvendra Singh (Branch Manager), from UNICON

INVESTMENT SOLUTION, who not only helped me in the successful

completion of this research project report but also spread his precious and

valuable time in expending on my knowledge base.

I also thankful to Ms. Neetu Singh, Lecturer and Training Placement

Head MBA, who provide me all essential information on the topic for her

great support while completing my survey report She is not only guides me
but also helped me to perform this research in the efficient and effective

way.

After that I also thankful to god and my family who helped me.

After the completion of this research project report I feel myself as a well

aware person about the research procedure and the complexities that can

arose during the process. Also I get an insight of the training and

development activities in an organization. Finally, I am also grateful to all

those personalities who have helped me directly or indirectly in bringing up

this research project report.

Ashana Yadav
 INTRODUCTION TO MUTUAL FUND

A mutual fund is a pool money, collected form investors, and is invested

according to certain investment options. A mutual fund is a trust that pools the savings of

a number of investors who share a common financial goal. A mutual fund is created when

investors put their money together. It is therefore a pool of the investors founds. The

money thus collected is then invested in capital market instruments such as shares,

debentures and other securities. The income earned through these investments and the

capital appeciation realized is shared by its unit holders in proportion to the number of

units owned by them.

The most important characteristics of a fund are that the contributors and the

beneficiaries of the fund are the same class of people, namely the investors; the term

mutual fund means the investors contribute to the pool, and also benefit from the pool.

There are no other claimants to the funds. The pool of funds held mutually by investors in

the mutual fund.

A mutual funds business is to invest the funds thus collected according to the

wishes of the investors who created the pool. Usually, the investors appoint professional
investment managers, to manage their funds. The same objective is achieved when

professional investment managers create a product and offer it for investment to the

investor. This product represents a share in the pool, and pre states investment objectives.

Thus a mutual fund is the most suitable investment for the common man as it offers an

opportunity to invest in a diversified, professionally managed basket of securities at a

relatively low cost.

Investors in the mutual fund industry today have a choice of 39 mutual funds,

offering nearly 500 products. Though the categories of product offer can be classified

under about a dozen generic heads, competition in the industry has led to innovative

alterations to standard products. The most important benefit of product choice is that it

enables investors to choose options that suit their return requirements and risk appetite.

Investors can combine the options to arrive at their own mutual fund portfolios that fit

with their financial planning objectives.

MUTUAL FUNDS- THE YEAR AHEAD

A after a difficult year for equity markets & equity funds alike, all the eyes are

now on year 2007. Last year saw one of the lowest net flows ever into equity schemes,

with debt schemes being the major gainers on account of continued decline in the interest

rates.

Hopes are high that the performance of equity schemes should be better this year,

as the market history indicates such trends. It is only twice in the last 100 years that

markets have remained under that controls of bears for three consecutive years.

Therefore, chances are those both domestic & international markets will rebound sharply,

which would result in much better performance by equity funds. Thus, if one is looking at

investing in equity funds, INDEX FUND is the best choice. Though some sectoral funds

have been able to give decent returns but overall they havent lived up to the expectation

of the market. Every year one or the other sectors strongly outperform the market, but it

would still be a better choice to go in for DIVERSIFIED FUNDS, that have features of

dynamic plan.

The MF industry is expecting tax break, which were withdrawn in the last budget,

to be restored. And that is expecting to bring a section of investors back to the markets.

Merger V& Acquisitions developments, which started in 2002, are likely to continue. In

the few weeks time we will know the winner for ALLIANCE. Another important
 development in the current year is going to be a big- bang entry of MFs in

DERIVATIVAES market followed by their investments in FOREIGN markets

INTERNATIONAL HISTORY OF MUITUAL LFUNDS

When three Boston securities executive pooled their money together in 1924 to

create the first mutual fund, they had no idea how popular mutual funds would become.

The idea of pooling money together for investing purposes started in Europe in the mid

188s. The e first pooled fund in the U.S. was created in 1893 for the faculty and staff of

Harvard University. On March 21 st, 1924 the first official mutual fund was born. It was

called Massachusetts Investors Trust.

After one year, the Masschusetts Investors Trust grew $5000 in assets in 1924 to $

392, 000 in assets (with around 200 shareholders). In contrast, there are over 10,000

mutual funds in the U.S. today totaling around $7 trillion (with approximately 83 million

individual investors) according to the Investment Company institute.

With renewed confidence in the stock market, mutual funds began to blossom. By

the end of the 1960 s there were around 270 funds with $ 48 billion in assets.

In 1976, john C. Bogle opened the first the first the first retail index fund called

the First Index Investment Trust. It is now called the Vanguard 500 Index Fund and in

November 2000 it became the largest mutual fund growth was Individual Retirement

Account (IRA) provision made in 1981, allowing individuals (including those already in
corporate pension plans) to contribute $2,000 a year. Mutual funds are now popular

known for ease of use, liquidity and unique diversification capabilities.

History of the Indian Mutual Fund Industry

The mutual fund industry in India started in 1963 with the formation of Unit Trust

of India, at the initiative of the government of India and Reserve Bank. The history of

mutual funds in India can be broadly divided into four distinct phases.

First Phase: - 1964- 1987

Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was

set up by the Reserve Bank of India and functioned under the regulatory and

administrative control of the Reserve Bank of India. In1978 UTI was de-linkde form the

RBI and the industrial Development Bank of India (IDBI) took over the regulatory and

administrative control in place of RBI. The first scheme launched by UTI was Unit

Scheme 1964. At the end of 1988 UTI had RS. 6700 crores of assets under management.

Second Phase: 19887-1993

(Entry of public Sector Funds)

1987 marked the entry of non-UTI, public sector, mutual funds set by public

sector banks and life Insurance corporation of India (LIC) and General Insurance

Corporation of India (GIC). SBI Mutual funds was the first non-UTI Mutual fund

established in June 1987 followed by Can ban Mutual fund (Dec 87), Punjab National

Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89). Bank of India (June

90), Band of Barodra.

 Mutual Fund (Oct 92), LIC established its Mutual Fund in June 1989 while GIC

had set up its mutual fund in December 1990. At the end of 1993, the mutual fund

industry had assets under management of RS, 47,004 crores.

Third Phase- 1993-2003 (Entry of Private Sector Funds)

With the entry of private sector funds in 1993, a new era starede in the Indian

mutual fund industry, giving the Indian investors a wider choice of fund families. Also,

1993 was the year in which the first Mutual Fund Regulations came into being, under

which all mutual funds. Except UTI were to be registered and governed. The erstwhile

Kothari pioneer (now merged with Franklin Templeton) was the private sector mutual

registered in July 1993.

The 1993 SEBI (Mutual Fund) Regulations were substituted by a more

comprehensive and revised Mutual Fund Regulations in1996. The Industry now functions

under the SEBI (Mutual fund) Regulation 1996.

The number of mutual fund houses went on increasing, with many foreign mutual

funds setting up funds in India and also the industry have witnessed several Mergers and

acquisitions. As at the end of January 2003, there were 33 mutual funds, with total assets

of Rs 1, 21,805 crores. The Unit Trust of india with Rs 44,541 crores of assets

management were way ahead of other mutual funds.

PHASE 4: 1996

REGULARY STRUCTURES OF MUTUAL FUNDS IN INDIA

The structure of mutual fund in India is governed by the SEBI Regulations. 1996.

These regulations make it mandatory for mutual funds to have a three-tier Structure

SPONSER- TRUSTEE- ASSET MANAGEMENT COMPANY (AMC). The sponsor is

the promoters of the mutual fund and appoints the AMC for managing the investment

portfolio. The AMC is the business face of the mutual fund. As its manages all the affairs

of the mutual fund. The mutual fund and the AMC have to be registered with SEBI.

Mutual Funds can be structured in the following ways:

Company form in which investors hold shares of the mutual fund. In this structure

management of the fund in the4 hands of on elected board. Which in turn appoints

investment managers to manage the fund? Trust from, in which the investors are held by

the trust, on behalf of the investors. The appoints investment managers and monitors their

functioning in the interest of the investors.

The company form of organization is very popular in the United States. In India

mutual funds are organized as trusts. The trust is created by the sponsors who is actually

the entity interested in creating the mutual fund business. The trust is etihier managed by

a Board of trustees or by a trustee company. Formed for this purpose. The investors

funds arte held by the trust.

Though the trust is the mutual fund, the AMC is its operational face. The AMC is

the first functionary to be appointed, and is involved in the appointment of all the other
functionaries. The AMC structures the mutual fund products, markets them and mobilizes

the funds and services the investors. It seeks the services of the functionaries in carrying

out these functions. All the functionaries are required to the trustees, who lay down the

ground rules and monitor them, working.

 TYPES OF MUTUAL FUNDS

General Classification of Mutual Funds

Open- end Funds/Closed-end Funds

Open-end Funds

Funds that can sell and purchase units at nay point in time are classified as Open-

end Funds. The fund size (corpus) of an open-end fund is variable (keeps changing)

because of continuous selling (to investors) and repurchases (from the investors) by the

fund. An open-end fund is not requrchase, when an investor wants to sell his units. The

NAV of an open-end fund is calculated every day.

Closed end Funds

Funds that can sell a fixed number of units only during the New Fund (NFO) period are

known as Closed- end Funds. The corpus of a closed end fund

Mutual Funds: Different Types of Funds-

No matter what type of investor you are, there is bound to be a mutual fund that

fits your style. According to the last count there are more than 10,000 mutual funds in

North America! That means there are more mutual funds than stocks.

It's important to understand that each mutual fund has different risks and rewards.

In general, the higher the potential return, the higher the risk of loss. Although some

funds are less risky than others, all funds have some level of risk - it's never possible to

diversify away all risk. This is a fact for all investments.

Each fund has a predetermined investment objective that tailors the fund's assets, regions

of investments and investment strategies. At the fundamental level, there are three

varieties of mutual funds:

1) Equity funds (stocks)

2) Fixed-income funds (bonds)

3) Money market funds

All mutual funds are variations of these three asset classes. For example, while equity

funds that invest in fast-growing companies are known as growth funds, equity funds that

invest only in companies of the same sector or region are known as specialty funds.
Let's go over the many different flavors of funds. We'll start with the safest and then work

through to the more risky.

Money Market Funds

The money market consists of short-term debt instruments, mostly Treasury bills. This is

a safe place to park your money. You won't get great returns, but you won't have to worry

about losing your principal. A typical return is twice the amount you would earn in a

regular checking/savings account and a little less than the average certificate of deposit

(CD).
Bond/Income Funds

Income funds are named appropriately: their purpose is to provide current income on a

steady basis. When referring to mutual funds, the terms "fixed-income," "bond," and

"income" are synonymous. These terms denote funds that invest primarily in government

and corporate debt. While fund holdings may appreciate in value, the primary objective

of these funds is to provide a steady cash flow to investors. As such, the audience for

these funds consists of conservative investors and retirees.

Bond funds are likely to pay higher returns than certificates of deposit and money market

investments, but bond funds aren't without risk. Because there are many different types of

bonds, bond funds can vary dramatically depending on where they invest. For example, a

fund specializing in high-yield junk bonds is much more risky than a fund that invests in

government securities. Furthermore, nearly all bond funds are subject to interest rate risk,

which means that if rates go up the value of the fund goes down.

Balanced Funds

The objective of these funds is to provide a balanced mixture of safety, income and

capital appreciation. The strategy of balanced funds is to invest in a combination of fixed

income and equities. A typical balanced fund might have a weighting of 60% equity and

40% fixed income. The weighting might also be restricted to a specified maximum or

minimum for each asset class.

A similar type of fund is known as an asset allocation fund. Objectives are similar to
those of a balanced fund, but these kinds of funds typically do not have to hold a

specified percentage of any asset class. The portfolio manager is therefore given freedom

to switch the ratio of asset classes as the economy moves through the business cycle.

Equity Funds

Funds that invest in stocks represent the largest category of mutual funds. Generally, the

investment objective of this class of funds is long-term capital growth with some income.

There are, however, many different types of equity funds because there are many

different types of equities. A great way to understand the universe of equity funds is to

use a style box, an example of which is below.

The idea is to classify funds based on both the size of the companies invested in and the

investment style of the manager. The term value refers to a style of investing that looks

for high quality companies that are out of favor with the market. These companies are

characterized by low P/E and price-to-book ratios and high dividend yields. The opposite

of value is growth, which refers to companies that have had (and are expected to continue

to have) strong growth in earnings, sales and cash flow. A compromise between value and

growth is blend, which simply refers to companies that are neither value nor growth

stocks and are classified as being somewhere in the middle.

For example, a mutual fund that invests in large-cap companies that are in strong

financial shape but have recently seen their share prices fall would be placed in the upper

left quadrant of the style box (large and value). The opposite of this would be a fund that
invests in startup technology companies with excellent growth prospects. Such a mutual

fund would reside in the bottom right quadrant (small and growth).

Global/International Funds

An international fund (or foreign fund) invests only outside your home country. Global

funds invest anywhere around the world, including your home country.

It's tough to classify these funds as either riskier or safer than domestic investments. They

do tend to be more volatile and have unique country and/or political risks. But, on the flip

side, they can, as part of a well-balanced portfolio, actually reduce risk by increasing

diversification. Although the world's economies are becoming more inter-related, it is

likely that another economy somewhere is outperforming the economy of your home

country.
Specialty Funds
This classification of mutual funds is more of an all-encompassing category that consists

of funds that have proved to be popular but don't necessarily belong to the categories

we've described so far. This type of mutual fund forgoes broad diversification to

concentrate on a certain segment of the economy.

Sector funds are targeted at specific sectors of the economy such as financial, technology,

health, etc. Sector funds are extremely volatile. There is a greater possibility of big gains,

but you have to accept that your sector may tank.

Regional funds make it easier to focus on a specific area of the world. This may mean

focusing on a region (say Latin America) or an individual country (for example, only

Brazil). An advantage of these funds is that they make it easier to buy stock in foreign

countries, which is otherwise difficult and expensive. Just like for sector funds, you have

to accept the high risk of loss, which occurs if the region goes into a bad recession.

Socially-responsible funds (or ethical funds) invest only in companies that meet the

criteria of certain guidelines or beliefs. Most socially responsible funds don't invest in

industries such as tobacco, alcoholic beverages, weapons or nuclear power. The idea is to

get a competitive performance while still maintaining a healthy conscience.

Index Funds
The last but certainly not the least important are index funds. This type of mutual fund

replicates the performance of a broad market index such as the S&P 500 or Dow Jones

Industrial Average (DJIA). An investor in an index fund figures that most managers can't

beat the market. An index fund merely replicates the market return and benefits investors

in the form of low fees.

Mutual Funds: The Costs

Costs are the biggest problem with mutual funds. These costs eat into your return,

and they are the main reason why the majority of funds end up with sub-par performance.

What's even more disturbing is the way the fund industry hides costs through a layer of

financial complexity and jargon. Some critics of the industry say that mutual fund

companies get away with the fees they charge only because the average investor does not

understand what he/she is paying for.

Fees can be broken down into two categories:

1. Ongoing yearly fees to keep you invested in the fund.

2. Transaction fees paid when you buy or sell shares in a fund (loads).

The Expense Ratio

The ongoing expenses of a mutual fund are represented by the expense ratio. This is

sometimes also referred to as the management expense ratio (MER). The expense ratio is

composed of the following:

The cost of hiring the fund manager(s) - Also known as the management fee, this cost is

between 0.5% and 1% of assets on average. While it sounds small, this fee ensures that
mutual fund managers remain in the country's top echelon of earners. Think about it for a

second: 1% of 250 million (a small mutual fund) is $2.5 million - fund managers are

definitely not going hungry! It's true that paying managers is a necessary fee, but don't

think that a high fee assures superior performance.

Administrative costs - These include necessities such as postage, record keeping,

customer service, cappuccino machines, etc. Some funds are excellent at minimizing

these costs while others (the ones with the cappuccino machines in the office) are not.

The last part of the ongoing fee (in the United States anyway) is known as the 12B-1

fee. This expense goes toward paying brokerage commissions and toward advertising and

promoting the fund. That's right, if you invest in a fund with a 12B-1 fee, you are paying

for the fund to run commercials and sell itself!

On the whole, expense ratios range from as low as 0.2% (usually for index funds) to as

high as 2%. The average equity mutual fund charges around 1.3%-1.5%. You'll generally

pay more for specialty or international funds, which require more expertise from

managers.

Are high fees worth it? You get what you pay for, right?

Wrong.

Just about every study ever done has shown no correlation between high expense ratios

and high returns. This is a fact. If you want more evidence, consider this quote from the

Securities and Exchange Commission's website:

"Higher expense funds do not, on average, perform better than lower expense funds."

Loads, A.K.A. "Fee for Salesperson"

Loads are just fees that a fund uses to compensate brokers or other salespeople for selling

you the mutual fund. All you really need to know about loads is this: don't buy funds with

loads.

In case you are still curious, here is how certain loads work:

Front-end loads - These are the most simple type of load: you pay the fee when you

purchase the fund. If you invest $1,000 in a mutual fund with a 5% front-end load, $50

will pay for the sales charge, and $950 will be invested in the fund.

Back-end loads (also known as deferred sales charges) - These are a bit more

complicated. In such a fund you pay the a back-end load if you sell a fund within a

certain time frame. A typical example is a 6% back-end load that decreases to 0% in the

seventh year. The load is 6% if you sell in the first year, 5% in the second year, etc. If you

don't sell the mutual fund until the seventh year, you don't have to pay the back-end load

at all.

A no-load fund sells its shares without a commission or sales charge. Some in the mutual

fund industry will tell you that the load is the fee that pays for the service of a broker

choosing the correct fund for you. According to this argument, your returns will be higher

because the professional advice put you into a better fund. There is little to no evidence
that shows a correlation between load funds and superior performance. In fact, when you

take the fees into account, the average load fund performs worse than a no-load fund.

(For related reading, see Start Investing With Only $1,000.)

Stocks, bonds and mutual funds
If you're parking money in a savings account, that's not going to help

prepare you for retirement.

Bank accounts, CDs and money market funds may provide safety from loss of

principal, but these "cash equivalents" don't boast the higher returns of other investments.

Consider the following riskier alternatives.

Stocks
Also called equities, stocks are the cornerstone to most retirement accounts because

they've boasted higher returns than many other investments, clipping along at an average

10.4 percent a year between 1925 and 2006, according to Ibbotson Associates.

That said, stocks come in many different flavors. They represent all industries, with some

based in the U.S. and others overseas. Stocks also come in all sizes: There are large-cap,

mid-cap and small-cap stocks. The term "cap" is short for "market capitalization," which

is computed by multiplying share price by the number of a company's outstanding shares.

What does that mean?

"Large-cap stocks tend to be companies that are more established," says Brett Horowitz, a

Certified Financial Planner at Evensky & Katz. "Small companies tend to have more risk,

and the extra risk you're taking on leads to higher return," Horowitz adds.
 According to Ibbotson Associates, small caps have grown by an average 12.7 percent

annually over the past seven decades. The annual 2 percentage point lead over large caps

compensated investors for the extra risk they'd assumed.

Bonds
When you buy a bond, you're essentially becoming a lender, since bonds are

really nothing more than an I.O.U. that's been issued by a government or corporation.

In general, bonds are considered safer investments than stocks. But that's not always true.

It depends on the bond you buy. The riskier the bond -- that is, the lower a borrower's

credit quality or "rating" -- the higher the interest rate and the more you stand to gain,

unless, of course, the borrower defaults. Firms such as Standard & Poor's and Moody's

are among agencies that determine if bonds are "junk" status, meaning they carry high

risk, or "investment grade," meaning they carry little to moderate risk.

U.S. government bonds are guaranteed by Uncle Sam, so they're the safest

around. They mature -- or come due -- in various time periods. Treasury bills generally

mature in three months while Treasury notes typically mature within a year. Treasury

bonds mature over longer time frames, usually between five and 30 years. Historically,

long-term government bonds have returned an average of 5.4 percent annually, according

to Ibbotson Associates.
 ICICI Prudential Mutual Fund

ICICI Prudential Asset Management Company enjoys the strong parentage of Prudential

plc, one of UK's largest players in the insurance & fund management sectors and ICICI

Bank, a well-known and trusted name in financial services in India. ICICI Prudential Asset

Management Company, in a span of just over eight years, has forged a position of pre-

eminence in the Indian Mutual Fund industry as one of the largest asset management

companies in the country with average assets under management of Rs. 73,356.07 Crore (as

of July 31, 2009). The Company manages a comprehensive range of schemes to meet the

varying investment needs of its investors spread across 230 cities in the country.

At inception - May 1998 As on July 31, 2009

Average Assets Under
Rs. 160 Crore Rs. 73,356.07 Crore
Management
Number of Funds
2 40
Managed

Securities and Exchange Board of India, vide its letter no. MFD/PM/567/02

dated June 4, 2002, has accorded its approval in recognizing ICICI Bank Ltd. as

a co-sponsor consequent to the merger of ICICI Ltd. with ICICI Bank Ltd.
ICICI Bank is India's second-largest bank with total assets of Rs. 3,997.95 billion

(US$ 100 billion) at March 31, 2008 and profit after tax of Rs. 41.58 billion for

the year ended March 31, 2008. ICICI Bank is second amongst all the companies

listed on the Indian stock exchanges in terms of free float market capitalization

Free float holding excludes all promoter holdings, strategic investments and

cross holdings among public sector entities. The Bank has a network of about

1,308 branches and 3,950 ATMs in India and presence in 18 countries.

ICICI Bank offers a wide range of banking products and financial services to

corporate and retail customers through a variety of delivery channels and through

its specialized subsidiaries and affiliates in the areas of investment banking, life

and non-life insurance, venture capital and asset management.

The Bank currently has subsidiaries in the United Kingdom, Russia and Canada,

branches in Unites States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and

Dubai International Finance Centre and representative offices in United Arab

Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia.

Our UK subsidiary has established branches in Belgium and Germany. ICICI

Bank's equity shares are listed in India on Bombay Stock Exchange and the

National Stock Exchange of India Limited and its American Depositary Receipts

(ADRs) are listed on the New York Stock Exchange (NYSE). (Source: Overview

at www.icicibank.com).
Headquartered in London, Prudential plc and its affiliated companies together

constitute one of the world's leading financial services groups. Prudential

provides insurance and financial services in a number of markets around the

world, including in Asia, the US, the UK, Europe and the Middle East. Founded

in 1848, the company has 249 billion in funds under management (as of 31

December 2008) and more than 21 million customers worldwide.

Prudential has been writing life insurance in the United Kingdom for 160 years

and has had the largest long-term fund in the United Kingdom, for over a

century. In the United Kingdom, Prudential is a leading retirement savings and

income solutions and life assurance provider. M&G is Prudential's fund

management business in the United Kingdom and Europe, with almost 140

billion in funds under management (as of 31 December 2008). In the United

States, Jackson National Life, which we acquired in 1986, is one of the largest

life insurance companies providing retirement savings and income solutions.

In Asia, Prudential is the leading Europe-based life insurer in terms of market

coverage and number of top three ranking positions. It is also one of the largest

and most successful fund managers in Asia with more top five market rankings

than any other regional player. Today, Prudential has life insurance and fund

management operations spanning 13 diverse markets in Asia.

Prudential plc is incorporated and with its principal place of business in the
United Kingdom. It is not affiliated in any manner with Prudential Financial,

Inc., a company whose principal place of business is in the United States.

Reliance Mutual
Fund

Reliance Mutual Fund (RMF) is one of Indias leading Mutual Funds, with Average Assets

Under Management (AAUM) of Rs. 1,08,334.38 Crores and an investor base of over 74.63

Lacs. (AAUM and investor count as on July 31, 2009)

Reliance Mutual Fund, a part of the Reliance - Anil Dhirubhai Ambani Group, is one of the

fastest growing mutual funds in the country. RMF offers investors a well-rounded portfolio

of products to meet varying investor requirements and has presence in 118 cities across the

country. Reliance Mutual Fund constantly endeavors to launch innovative products and

customer service initiatives to increase value to investors. "Reliance Mutual Fund schemes

are managed by Reliance Capital Asset Management Limited., a subsidiary of Reliance

Capital Limited, which holds 93.37% of the paid-up capital of RCAM, the balance paid up

capital being held by minority shareholders."

Reliance Capital Ltd. is one of Indias leading and fastest growing private sector financial

services companies, and ranks among the top 3 private sector financial services and banking
companies, in terms of net worth. Reliance Capital Ltd. has interests in asset management,

life and general insurance, private equity and proprietary investments, stock broking and

other financial services.

AAUM Source : http://www.amfiindia.com/

Sponsor: Reliance Capital Limited Trustee: Reliance Capital Trustee Co. Limited

Investment Manager: Reliance Capital Asset Management Limited Statutory Details: The

Sponsor, the Trustee and the Investment Manager are incorporated under the Companies Act

1956.

Risk Factors:

Mutual Funds and securities investments are subject to market risks and there is no

assurance or guarantee that the objectives of the Scheme will be achieved. As with any

investment in securities, the NAV of the Units issued under the Scheme can go up or down

depending on the factors and forces affecting the capital markets. Past performance of the

Sponsor/AMC/Mutual Fund is not indicative of the future performance of the Scheme.

The Sponsor is not responsible or liable for any loss resulting from the operation of the

Scheme beyond their initial contribution of Rs.1 lakh towards the setting up of the Mutual

Fund and such other accretions and additions to the corpus. The NAV of the Scheme may be

affected, interalia, by changes in the market conditions, interest rates, trading volumes,

settlement periods and transfer procedures. The Mutual Fund is not assuring that it will make
periodical dividend distributions, though it has every intention of doing so. All dividend

distributions are subject to the availability of distributable surplus in the Scheme. For details

of scheme features and for scheme specific risk factors, please refer to the Scheme

Information Document. Please read the Statement of Additional Information and

Scheme Information Document carefully before investing.

Our Schemes

Equity/Growth Schemes

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 depending 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.

Debt/Income Schemes

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 are affected because of change

in interest rates in the country. If the 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.

Sector Specific Schemes

These are the funds/schemes which invest in the securities 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 diversified

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 expert.

1- Do you have any investment?

 Investment No of Respondent %
Response
Yes 60 80

No 15 20

75 100

2- Do you have D-mat A/c?

 D-mat A/c No of Respondent % of
Response
Yes 50 67

No 25 33

75 100

3- If you have any investment OR Dont has any investment. Would you like invest in mutual
fund?
 Mutual Fund No of Respondent %
Response
Yes 25 33

No 50 67

75 100

4- If customer says yes for the above answer? In which companies mutual fund would he
like to invest?
 Mutual Fund No of Respondent %
Response
Reliance MF 30 40

Tata MF 15 20

Kotak MF 11 15

ICICI MF 19 25

75 100

5- For how long would you like to invest?

N= 23 Reliance N=18 Tata N=14 Kotak MF N=20 ICICI MF

 No of % of No of % of No of % of No of % of
Option respondent respondent respondent respondent respondent respondent respondent respondent

6 Month 5 22 6 33 6 43 7 35

1 Year 11 47 4 22 3 22 5 25

2 Year 6 26 5 28 3 22 5 25

Above 2 1 5 3 17 2 13 3 15
Year

6- Parameters considered by the investors at the time of investing in particular mutual fund
scheme.
 Parameter No of respondent % of
consider by
respondent
investor

Mutual fund house 25 33

Portfolio 21 28

Rate of return 16 21

Market condition 13 18

7- Who influence your decision to invest in mutual fund?

Parameter No of respondent % of
consider by respondent
investor

Broken 16 21

Advertisement 22 29

Friends 20 27

Other 17 23

75 100
 8- What is your satisfaction level regarding the mutual fund you are opting?

Reliance MF Tata MF Kotak MF ICICI MF

Option No of
respondent
% of
respondent
No of
respondent
% of
respondent
No of
respondent
% of
respondent
No of
respondent
% of
respondent

Satisfied 16 89 5 46 7 58 8 31

Somewhat 2 11 6 54 5 42 10 38

satisfied

Not - - - - - - 8 31

Satisfied
9-If you would choose some other companies mutual fund in the near future which one you
would opt. for?

Mutual Fund No of Respondent %

Response
Reliance MF 40 54

Tata MF 10 13

Kotak MF 12 16

ICICI MF 13 17

75 100
 QUESTIONNAIRE
Name:-

Age:

Sex:.

Occupation:

Address:.

1- Do you have any investment?

a. Yes
b. No
2- Do you have D-mat A/c?
a. Yes
b. No
3- If you have any investment OR Dont has any investment. Would you like invest in mutual
fund?
a. Yes
b. No
4- If customer says yes for the above answer? In which companies mutual fund would he
like to invest?
a. Reliance MF
b. Tata MF
c. Kotak MF
d. ICICI MF
5- For how long would you like to invest?
a. 6 Month
b. 1 Year
c. 2 Year
d. Above 2 Year
6- Parameters considered by the investors at the time of investing in particular mutual fund
scheme.
a. Mutual fund house
b. Portfolio
c. Rate of return
d. Market condition
7- Who influence your decision to invest in mutual fund?
a. Broken
b. Advertisement
c. Friends
 d. Other
8- What is your satisfaction level regarding the mutual fund you are opting?
a. Satisfied
b. Somewhat satisfied
c. Not satisfied
9- If you would choose some other companies mutual fund in the near future which one you
would opt. for?
a. Reliance MF
b. Tata MF
c. Kotak MF
d. ICICI MF