MUTUAL FUND: A GLOBALLY PROVEN

INVESTMENT AVENUE
A PROJECT SUBMITTED TO SAMBALPUR UNIVERSITY IN PARTIAL
FULFILLMENT FOR THE AWARD OF BACHELOR DEGREE IN
COMMERCE

Submitted by:-
NAME: DEBALOK KARMI
ROLL NO: S05821COM006

Supervised by:-
NAME: DEBENDRA KUMAR OJHA
Faculty in commerce
Dept. Of commerce

SHRAMA SHAKTI COLLEGE

DEPARTMENT OF COMMERCE
SHRAMA SHAKTI COLLEGE
BIRMITRAPUR
 ACKNOWLEDGEMENT

To being with I extend heartfelt thanks to my esteemed guided Dr. DEBENDRA

KUMAR OJHA Faculty in Commerce, Shrama Shakti College, Birmitrapur, Odisha
for having guided me whole heartedly in preparing this project entitled “MUTUAL
FUND – A GLOBALLY PROVEN INVESTMENT AVENUE”.

I also acknowledge the continuous encouragement by my friends, non –

teaching persons involved and finallly in my endeavour.

My deep sense of gratitude is for those who helped me effortlessly in

preparing this project.

Name: Debalok Karmi

Roll No: S05821COM006

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Dr. Debendra Kumar Ojha
Lecturer in commerce
Department of commerce
S.S college, Birmitrapur

CERTIFICATE OF THE GUIDE

This is to certify that Debalok karmi, bearing Roll No.S05821COM006,

+3 3rd year, commerce, Shrama Shakti college, Birmitrapur, Odisha has
submitted the project entitle MUTUAL FUND: A GLOBALLY PROVEN
INVESTMENT AVENUE

This project is based on the original work done by the candidate under
my guidance and fulfils the requirement of the project work which is
necessary for the partial fulfilment of B.COM degree.

It is to the best of my knowledge and belief that the work has not been
submitted elsewhere for the award of any Degree.

Project guide
Dr. DEBENDRA KUMAR OJHA
Faculty in commerce
S.S COLLEGE, BIRMITRAPUR, Odisha

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 DECLARATION

I Debalok karmi hereby declare that this project entitled MUTUAL FUND: A
GLOBALLY PROVEN INVESTMENT AVENUE, Submitted to Shrama
Shakti College, Birmitrapur, Odisha has been prepared by me under the
valuable guidance Of Dr. DEBENDRA KUMAR OJHA, Lecture in
commerce, Shrama Shakti College, Birmitrapur, towards the fulfilment of
awards of bachelor of commerce as required in the curriculum for UG CBSE
VI semester 2023-2024

I also declare this project has not been submitted to any other university for
the award of any degree.

DATE:
PLACE: Birmitrapur NAME: Debalok karmi
ROLL NO: S05821COM006

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 NEED FOR THE STUDY:
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.

OBJECTIVE:
 To give a brief idea about the benefits available from Mutual Fund
investment.
 To give an idea of the types of schemes available.
 To discuss about the market trends of Mutual Fund investment.
 To study some of the mutual fund schemes.
 To study Mutual Fund Distribution Channels.
 To study Marketing strategies of Mutual Funds.
 Explore the recent developments in the mutual funds i`n India.
 To give an idea about the regulations of mutual funds.

LIMITATIONS:
 The lack of information sources for the analysis part.
 Though I tried to collect some primary data but they were too
inadequate for the purposes of the study.
 Time and money are critical factors limiting this study.
 The data provided by the prospects may not be 100% correct as
they too have their limitations.

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 EXECUTIVE SUMMARY

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, 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
Manager’s 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.
A code of conduct and registration structure for mutual fund
intermediaries, which were subsequently mandated by SEBI. In addition,
this year AMFI was involved in a number of developments and
enhancements to the regulatory framework.

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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 them at any cost. You should always
keep this into your mind that if particular mutual funding scheme is on
larger scale then next time, you might not get the same results so being
a careful investor you should take your major step diligently otherwise
you will be unable to obtain the high returns.

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 CONTENTS

SRNO. TOPICS PAGE NO.

1. NEED FOR THE STUDY 5
2. EXECUTIVE SUMMARY 6
3. ITRODUCTION OF MUTUAL FUND 9
4. WHY SELECT MUTUAL FUND? 10
5. ADVANTAGES & DISADVANTAGES OF MUTUAL FUND? 12
6. TYPES OF MUTUAL FUND SCHEMES IN INDIA 16
7. SELECTION PARAMETERS FOR MUTUAL FUND 23
8. MUTUAL FUND DISTRIBUTION CHANNELS 25
9. MARKETING STRATEGIES FOR MUTUAL FUND 26
10. WORKING OF MUTUAL FUNDS 27
11. MUTUAL FUNDS IN INDIA 32
12. MUTUAL FUNDS COMPANIES IN INDIA 34
13. RESEARCH MYTHOLOGY 37
14. DATA ANALYSIS AND INTERPRETATION 39
15. FINDINGS 44
16. CONCLUSION 45
17. BIBLIOGRAPHY 46

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 INTRODUCTION OF MUTUAL FUND
The first introduction of a mutual fund in India occurred in 1963, when
the Government of India launched Unit Trust of India (UTI). Until 1987,
UTI enjoyed a monopoly in the Indian mutual fund market. Then a host
of other government-controlled Indian financial companies came up with
their own funds. These included State Bank of India, Canara Bank, and
Punjab National Bank. This market was made open to private players in
1993, as a result of the historic constitutional amendments brought
forward by the then Congress-led government under the existing regime
of Liberalization, Privatization and Globalization (LPG). The first private
sector fund to operate in India was Kothari Pioneer, which later merged
with Franklin. Templeton.

CONCEPT OF MUTUAL FUND:

A mutual fund is a common pool of money into which investors place
their contributions that are to be invested in accordance with a stated
objective. The ownership of the fund is thus joint or “mutual”; the fund
belongs to all investors. A single investor’s ownership of the fund is in
the same proportion as the amount of the contribution made by him or
her bears to the total amount of the fund.
Mutual Funds are trusts, which accept savings from investors and invest
the same in diversified financial instruments in terms of objectives set
out in the trusts deed with the view to reduce the risk and maximize the
income and capital appreciation for distribution for the embers. A Mutual
Fund is a corporation and the fund manager’s interest is to
professionally manage the funds provided by the investors and provide a
return on them after deducting reasonable management fees.

DEFINITION:
“A mutual fund is a trust that pools your money with the money of an unlimited
number of other investors. In return, you and the other investors each own shares of
the fund. The fund's assets are invested according to an investment objective into
the fund’s portfolio of investments. Aggressive growth funds seek long-term capital
growth by investing primarily in stocks of fast growing smaller companies or market
segments. Aggressive growth funds are also called capital appreciation funds”.

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 Why Select Mutual Fund?
The risk return trade-off indicates that if investor is willing to take higher risk
then correspondingly he can expect higher returns and vise versa if he
pertains to lower risk instruments, which would be satisfied by lower
returns. For example, if an investors opt for bank FD, which provide
moderate return with minimal risk. But as he moves ahead to invest in
capital protected funds and the profit-bonds that give out more return
which is slightly higher as compared to the bank deposits but the risk
involved also increases in the same proportion.

Thus investors choose mutual funds as their primary means of investing, as

Mutual funds provide professional management, diversification,
convenience and liquidity. That doesn’t mean mutual fund investments risk
free.

This is because the money that is pooled in are not invested only in debts
funds which are less riskier but are also invested in the stock markets
which involves a higher risk but can expect higher returns. Hedge fund
involves a very high risk since it is mostly traded in the derivatives market
which is considered very volatile.

RETURN RISK MATRIX

HIGHER RISK HIGHER RISK

MODERATE RETURNS HIGHER RETURNS

Venture Equity
capital

Bank FD
Mutual
Funds
Postal
Seving
s
LOWER RISK LOWER RISK HIGHER
LOWER RETURNS RETURNS

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The graph indicates the growth of assets under
management over the years.

GROWTH IN ASSETS UNDER MANAGEMENT

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 ADVANTAGES OF MUTUAL FUNDS:
If mutual funds are emerging as the favorite investment vehicle, it is
because of the many advantages they have over other forms and the
avenues of investing, particularly for the investor who has limited
resources available in terms of capital and the ability to carry out
detailed research and market monitoring. The following are the major
advantages offered by mutual funds to all investors:

1. Portfolio Diversification:
Each investor in the fund is a part owner of all the fund’s assets,
thus enabling him to hold a diversified investment portfolio even
with a small amount of investment that would otherwise require
big capital.

2. Professional Management:
Even if an investor has a big amount of capital available to him,
he benefits from the professional management skills brought in
by the fund in the management of the investor’s portfolio. The
investment management skills, along with the needed research
into available investment options, ensure a much better return
than what an investor can manage of his own. Few investors
have the skill and resources of their own to succeed in today’s
fast moving, global and sophisticated markets.

3. Reduction/Diversification Of Risk:
When an investor invests directly, all the risk of potential loss is
his own, whether he places a deposit with a company or a bank,
or he buys a share or debenture on his own or in any other
from. While investing in the pool of funds with investors, the
potential losses are also shared with other investors. The risk
reduction is one of the most important benefits of a collective
investment vehicle like the mutual fund.

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4. Reduction Of Transaction Costs:
What is true of risk as also true of the transaction cost? The investor
bears all the costs of investing such as brokerage or custody of
securities. When going through a fund, he has the benefit of economies
of scale; the funds pay lesser costs because of larger volumes, a benefit
passed on to its investors.

5. Liquidity:
Often, investors hold shares or bonds they cannot directly, easily and
quickly sell. When they invest in the units of a fund, they can generally
cash their investments any time, by selling their units to the fund if open-
ended, or selling them in the market if the fund is close-end. Liquidity of
investment is clearly a big benefit.

6. Convenience And Flexibility:

Mutual fund management companies offer many investor services that a
direct market investor cannot get. Investors can easily transfer their
holding from one scheme to the other; get updated market information
and so on.

7. Tax Benefits:
Any income distributed after March 31, 2002 will be subject to tax in the
assessment of all Unit holders. However, as a measure of concession to
Unit holders of open-ended equity- oriented funds, income distributions
for the year ending March 31, 2003, will be taxed at a concessional rate
of 10.5%.

In case of Individuals and Hindu Undivided Families a deduction up to

Rs. 9,000 from the Total Income will be admissible in respect of income
from investments specified in Section 80L, including income from Units
of the Mutual Fund. Units of the schemes are not subject to Wealth-Tax
and Gift-Tax.

8. Choice of Schemes:
Mutual Funds offer a family of schemes to suit your varying needs over a
lifetime.

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9. Well Regulated:
All Mutual Funds are registered with SEBI and they function within the
provisions of strict regulations designed to protect the interests of
investors. The operations of Mutual Funds are regularly monitored by
SEBI.

10. Transparency:
You get regular information on the value of your investment in addition to
disclosure on the specific investments made by your scheme, the
proportion invested in each class of assets and the fund manager’s
investment strategy and outlook.

DISADVANTAGES OF INVESTING THROUGH

MUTUAL FUND:
1. No Control Over Costs:
An investor in a mutual fund has no control of the overall costs of
investing. The investor pays investment management fees as long as he
remains with the fund, albeit in return for the professional management
and research. Fees are payable even if the value of his investments is
declining. A mutual fund investor also pays fund distribution costs, which
he would not incur in direct investing. However, this shortcoming only
means that there is a cost to obtain the mutual fund services.

2. No Tailor-Made Portfolio:
Investors who invest on their own can build their own portfolios of shares
and bonds and other securities. Investing through fund means he
delegates this decision to the fund managers. The very-high-net-worth
individuals or large corporate investors may find this to be a constraint in
achieving their objectives. However, most mutual fund managers help
investors overcome this constraint by offering families of funds- a large
number of different schemes within their own management company. An
investor can choose from different investment plans and constructs a
portfolio to his choice.

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3. Managing A Portfolio Of Funds:
Availability of a large number of funds can actually mean too much
choice for the investor. He may again need advice on how to select a
fund to achieve his objectives, quite similar to the situation when he has
individual shares or bonds to select.

4. The Wisdom Of Professional Management:

That’s right, this is not an advantage. The average mutual fund manager
is no better at picking stocks than the average nonprofessional, but
charges fees.

5. No Control:
Unlike picking your own individual stocks, a mutual fund puts you in the
passenger seat of somebody else’s car

6. Dilution:
Mutual funds generally have such small holdings of so many different
stocks that insanely great performance by a fund’s top holdings still
doesn’t make much of a difference in a mutual fund’s total performance.

7. Buried Costs:
Many mutual funds specialize in burying their costs and in hiring
salesmen who do not make those costs clear to their clients.

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 TYPES OF MUTUAL FUNDS SCHEMES IN INDIA

Wide variety of Mutual Fund Schemes exists to cater to the needs such
as financial position, risk tolerance and return expectations etc. thus
mutual funds has Variety of flavors, Being a collection of many stocks,
an investors can go for picking a mutual fund might be easy. There are
over hundreds of mutual funds scheme to choose from. It is easier to
think of mutual funds in categories, mentioned below.

TYPES OF MUTUAL FUNDS

BY STRUCTURE BY NATURE BY INVESTMENT OTHER

OBJECTIVE SCHEMES

Open Ended Equity Fund Growth Tax Saving

Schemes Schemes Schemes

CLOSE – Ended Debt Funds Income Index

Schemes Scemes Schemes

Interval Balanced Balanced Sector

Schemes Schemes Specific
Schemes
Money Market
Schemes

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A). BY STRUCTURE

1. Open – Ended Schemes:

An open-end fund is one that is available for subscription all through the year.
These do not have a fixed maturity. Investors can conveniently buy and sell
units at Net Asset Value (“NAV”) related prices. The key feature of open-end
schemes is liquidity.

2. Close Ended Schemes:

A closed-end fund has a stipulated maturity period which generally ranging
from 3 to 15 years. The fund is open for subscription only during a specified
period. 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 they are listed. In order to provide an exit route to the
investors, some close-ended funds give an option of selling back the units to
the Mutual Fund through periodic repurchase at NAV related prices. SEBI
Regulations stipulate that at least one of the two exit routes is provided to
the investor.

3. Interval Schemes:
Interval Schemes are that scheme, which combines the features of open-
ended and close- ended schemes. The units may be traded on the stock
exchange or may be open for sale or redemption during pre-determined
intervals at NAV related prices.

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B). BY NATURE
1. Equity Fund:
These funds invest a maximum part of their corpus into equities holdings.
The structure of the fund may vary different for different schemes and the
fund manager’s outlook on different stocks. The Equity Funds are sub-
classified depending upon their investment objective, as follows:
• Diversified Equity Funds.
• . Mid-Cap Funds
• . Sector Specific Funds
• . Tax Savings Funds (ELSS)
Equity investments are meant for a longer time horizon, thus Equity funds
rank high on the risk-return matrix.

2. Debt Funds:
The objective of these Funds is to invest in debt papers. Government
authorities, private companies, banks and financial institutions are some
of the major issuers of debt papers. By investing in debt instruments,
these funds ensure low risk and provide stable income to the Investors.
Debt funds are further classified as:
• Gilt Funds: Invest their corpus in securities issued by
Government, popularly known as Government of India debt
papers. These Funds carry zero Default risk but are associated
with Interest Rate risk. These schemes are safer as they invest in
papers backed by Government.

• Income Funds: Invest a major portion into various debt

instruments such as bonds, corporate debentures and
Government securities.

• MIPs: Invests maximum of their total corpus in debt instruments

while they take minimum exposure in equities. It gets benefit of
both equity and debt market. These scheme ranks slightly high on
the risk-return matrix when compared with other debt schemes.

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Short Term Plans (STPs): Meant for investment horizon for three to six
months. These funds primarily invest in short term papers like Certificate
of Deposits (CDs) and Commercial Papers (CPs). Some portion of the
corpus is also invested in corporate debentures.

Liquid Funds: Also known as Money Market Schemes. These funds

provides easy liquidity and preservation of capital. These schemes
invest in short-term instruments like Treasury Bills, inter-bank call money
market, CPs and CDs. These funds are meant for short-term cash
management of corporate houses and are meant for an investment
horizon of Iday to 3 months. These schemes rank low on risk-return
matrix and are considered to be the safest amongst all categories of
mutual funds.

3. Balanced Funds:

As the name suggest they, are a mix of both equity and debt funds. They
invest in both equities and fixed income securities, which are in line with
pre-defined investment objective of the scheme. These schemes aim to
provide investors with the best of both the worlds. Equity part provides
growth and the debt part provides stability in returns.

Further the mutual funds can be broadly classified on the basis of investment
parameter via, Each category of funds is backed by an investment
philosophy, which is pre-defined in the objectives of the fund. The
investor can align his own investment needs with the funds objective and
invest accordingly.

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C). BY INVESTMENT OBJECTIVE:
Growth Schemes:
Growth Schemes are also known as equity schemes. The aim of these
schemes is to provide capital appreciation over medium to long term.
These schemes normally invest a major part of their fund in equities and
are willing to bear short-term decline in value for possible future
appreciation.
Income Schemes:
Income Schemes are also known as debt schemes. The aim of these
schemes is to provide regular and steady income to investors. These
schemes generally invest in fixed income securities such as bonds and
corporate debentures. Capital appreciation in such schemes may be
limited.
Balanced Schemes:
Balanced Schemes aim to provide both growth and income by
periodically distributing a part of the income and capital gains they earn.
These schemes invest in both shares and fixed income securities, in the
proportion indicated in their offer documents (normally 50:50).
Money Market Schemes:
Money Market Schemes aim to provide easy liquidity, preservation of
capital and moderate income. These schemes generally invest in safer,
short-term instruments, such as treasury bills, certificates of deposit,
commercial paper and inter-bank call money.
Load Funds:
A Load Fund is one that charges a commission for entry or exit. That is,
each time you buy or sell units in the fund, a commission will be
payable.Typically entry and exit loads range from 1% to 2%. It could be
worth paying the load, if the fund has a good performance history.
No-Load Funds:
A No-Load Fund is one that does not charge a commission for entry or
exit. That is, no commission is payable on purchase or sale of units in
the fund. The advantage of a no load fund is that the entire corpus is put
to work.

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OTHER SCHEMES
Tax Saving Schemes:
Tax-saving schemes offer tax rebates to the investors under tax laws
prescribed from time to time. Under Sec.88 of the Income Tax Act,
contributions made to any Equity Linked Savings Scheme (ELSS) are
eligible for rebate.

Index Schemes:
Index schemes attempt to replicate the performance of a particular index
such as the BSE Sensex or the NSE 50. The portfolio of these schemes
will consist of only those stocks that constitute the Index. The
percentage of each stock to the total holding will be identical to the
stocks index weightage. And hence, the returns from such schemes
would be more or less equivalent to those of the Index.

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.

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NET ASSET VALUE (NAV):
Since each owner is a part owner of a mutual fund, it is necessary to
establish the value of his part. In other words, each share or unit that an
investor holds needs to be assigned a value. Since the units held by
investor evidence the ownership of the fund’s assets, the value of the total
assets of the fund when divided by the total number of units issued by the
mutual fund gives us the value of one unit. This is generally called the Net
Asset Value (NAV) of one unit or one share. The value of an investor’s
part ownership is thus determined by the NAV of the number of units held.

Calculation of NAV:
Let us see an example. If the value of a fund’s assets stands at Rs. 100
and it has 10 investors who have bought 10 units each, the total numbers
of units issued are 100, and the value of one unit is Rs. 10.00 (1000/100).
If a single investor in fact owns 3 units, the value of his ownership of the
fund will be Rs. 30.00(1000/100*3). Note that the value of the fund’s
investments will keep fluctuating with the market-price movements,
causing the Net Asset Value also to fluctuate. For example, if the value of
our fund’s asset increased from Rs. 1000 to 1200, the value of our
investors holding of 3 units will now be (1200/1003) Rs. 36. The
investment value can go up or down, depending on the markets value of
the fund’s assets.

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 SELECTION PARAMETERS FOR MUTUAL FUND
Your objective:

The first point to note before investing in a fund is to find out whether
your objective matches with the scheme. It is necessary, as any conflict
would directly affect your prospective returns. Similarly, you should pick
schemes that meet your specific needs. Examples: pension plans,
children’s plans, sector-specific schemes, etc.

Your risk capacity and capability:

This dictates the choice of schemes. Those with no risk tolerance should
go for debt. Schemes, as they are relatively safer. Aggressive investors
can go for equity investments. Investors that are even more aggressive
can try schemes that invest in specific industry or sectors.

Fund Manager’s and scheme track record:

Since you are giving your hard earned money to someone to manage it,
it is imperative that he manages it well. It is also essential that the fund
house you choose has excellent track record. It also should be
professional and maintain high transparency in operations. Look at the
performance of the scheme against relevant market benchmarks and its
competitors. Look at the performance of a longer period, as it will give
you how the scheme fared in different market condition.

Cost factor:

Though the AMC fee is regulated, you should look at the expense ratio
of the fund before investing. This is because the money is deducted from
your investments. A higher entry load or exit load also will eat into your
returns. A higher expense ratio can be justified only by superlative
returns. It is very crucial in a debt fund, as it will devour a few
percentages from your modest returns.

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Also, Morningstar rates mutual funds. Each year end, many financial
publications list the years best performing mutual funds. Naturally, very
eager investors will rush out to purchase shares of last year’s top
performers. That’s a big mistake. Remember, changing market
conditions make it rare that last year’s top performer repeats that ranking
for the current year. Mutual fund investors would be well advised to
consider the fund prospectus, the fund manager, and the current market
conditions. Never rely on last year’s top performers.

Types of Returns on Mutual Fund:

There are three ways, where the total returns provided by mutual funds
can be enjoyed by investors:

 Income is earned from dividends on stocks and interest on bonds.

A fund pays out nearly all income it receives over the year to fund
owners in the form of a distribution.
 If the fund sells securities that have increased in price, the fund
has a capital gain. Most funds also pass on these gains to
investors in a distribution.

If fund holdings increase in price but are not sold by the fund manager,
the fund’s shares increase in price. You can then sell your mutual fund
shares for a profit. Funds will also usually give you a choice either to
receive a check for distributions or to reinvest the earnings and get more
shares.

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MUTUAL FUNDS DISTRIBUTION CHANNELS
Investors have varied investment objectives and can be classified as aggressive,
moderate and conservative, depending on their risk profile. For each of these
categories, asset management companies (AMCS) devise different types of fund
schemes, and it is important for investors to buy those that match their investment
goals.
Funds are bought and sold through distribution channels, which play a significant role
in explaining to the investors the various schemes available, their investment style,
costs and expenses. There are two types of distribution channels-direct and indirect.
In case of the former, the investors buy units directly from the fund AMC, whereas
indirect channels include the involvement of agents. Let us consider these distribution
channels in detail.
Direct channel
This is good for investors who do not need the advisory services of agents and are
well-versed with the fundamentals of the fund industry.The channel provides the
benefit of low cost, which significantly enhances the returns in the long run.
Indirect channel
This channel is widely prevalent in the fund industry. It involves the use of agents, who
act as intermediaries between the fund and the investor. These agents are not
exclusive for mutual funds and can deal in multiple financial instruments.They have an
in-depth knowledge about the functioning of financial instruments and are in a position
to act as financial advisers.Here are some of the players in the indirect distribution
channels.
A) Independent financial advisers (IFA): These are individuals trained by AMCs for
selling their products. Some IFAs are professionally qualified CFPs (certified
financial planners). They help investors in choosing the right fund schemes and
assist them in financial planning. IFAs manage their costs through the
commissions that they earn by selling funds.
b) Organized distributors: They are the backbone of the indirect distribution channel.
They have the infrastructure and resources for managing administrative paperwork,
purchases and redemptions. These distributors cater to the diverse nature of the
investor community and thevast geographic spread of the country by establishing
offices in rural and semi urban locations.
C) Banks: They use their network to sell mutual funds. Their existing customer base
serves as acaptive prospective investor base for marketing funds. Banks also handle
wealth management for their clients and manage portfolios where mutual funds are
one of the asset classes.The playersin the indirect channel assist investors in buying
and redeeming fund units.
They try to understand the risk profile of investors and suggest fund schemes that best
suits their objectives. The indirect channel should be preferred over the direct channel
when investors want to seek expert advice on the risk-return mix or need help in
understanding the features of thefinancial securities in which the fund invests as well
as other important attributes of mutualfunds, such as benchmarking and tax treatment.

25
 Marketing Strategies for Mutual Funds
Business Accounts
The most common sales and marketing strategies for mutual funds is to
sign-up companies as a preferred option for their retirement plans. This
provides a simple way to sign-up numerous accounts with one master
contract. To market to these firms, sales people target human resource
professionals. Marketing occurs through traditional business-to-business
marketing techniques including conferences, niche advertising and
professional organizations. For business accounts, fund representatives
will stress ease of use and compatibility with the company’s present
systems.

Consumer Marketing
Consumer marketing of mutual funds is similar to the way other financial
products are sold. Marketers emphasize safety, reliability and
performance. In addition, they may provide information on their diversity
of choices, ease of use and low costs. Marketers try to access all
segments of the population. They use broad marketing platforms such
as television, newspapers and the internet. Marketers especially focus
on financially oriented media such as CNBC television and Business
week magazine.

Performance
Mutual funds must be very careful about how they market their
performance, as this is heavily regulated. Mutual funds must market their
short, medium and long-term average returns to give the prospective
investor a good idea of the actual performance. For example, most funds
did very well during the housing boom. However, if the bear market that
followed is included, performance looks much more average. Funds may
also have had different managers with different performance records
working on the same funds, making it hard to judge them.

Marketing Fees
Mutual funds must be very clear about their fees and report them in all of
their marketing materials. The main types of fees include the sales fee
(load) and the management fee.The load is an upfront charge that a
mutual fund charges as soon as the investment is made.
Themanagement fee is a percentage of assets each year, usually 1 to 2
percent,

26
 WORKING OF MUTUAL FUNDS

Pass
Back To

RETURN INVESTMENT

Pool Their
Money
Generates

FUND
SECURITIES MANAGER

Invest
In

The mutual fund collects money directly or through brokers from

investors. The money is invested in various instruments depending on
the objective of the scheme. The income generated by selling securities
or capital appreciation of these securities is passed on to the investors in
proportion to their investment in the scheme. The investments are
divided into units and the value of the units will be reflected in Net Asset
Value or NAV of the unit. NAV is the market value of the assets of the
scheme minus its liabilities. The per unit NAV is the net asset value of
the scheme divided by the number of units outstanding on the valuation
date. Mutual fund companies provide daily net asset value of their
schemes to their investors. NAV is important, as it will determine the
price at which you buy or redeem the units of a scheme. Depending on
the load structure of the scheme, you have to pay entry or exit load.

27
 STRUCTURE OF A MUTUAL FUND:
India has a legal framework within which Mutual Fund have to be
constituted. In India open and close-end funds operate under the same
regulatory structure i.e. as unit Trusts. A Mutual Fund in India is allowed
to issue open-end and close-end schemes under a common legal
structure. The structure that is required to be followed by any Mutual Fund
in India is laid down under SEBI (Mutual Fund) Regulations, 1996.

AMC
Savings

Trust Investment

Units
Unit holders Returns

Register

Trust
SEBI

Custodian AMC

The Fund Sponsor:

Sponsor is defined under SEBI regulations as any person who, acting
alone or in combination of another corporate body establishes a Mutual
Fund. The sponsor of the fund Is akin to the promoter of a company as he
gets the fund registered with SEBI. The sponsor forms a trust and appoints
a Board of Trustees. The sponsor also appoints the Asset Management
Company as fund managers. The sponsor either directly or acting through
the trustees will also appoint a custodian to hold funds assets. All these
are made in accordance with the regulation and guidelines of SEBI.

28
As per the SEBI regulations, for the person to qualify as a sponsor, he
must contribute at least 40% of the net worth of the Asset Management
Company and possesses a sound financial track record over 5 years
prior to registration.
Mutual Funds as Trusts:
A Mutual Fund in India is constituted in the form of Public trust Act, 1882.
The Fund sponsor acts as a settlor of the Trust, contributing to its initial
capital and appoints a trustee to hold the assets of the trust for the
benefit of the unit-holders, who are the beneficiaries of the trust. The
fund then invites investors to contribute their money in common pool, by
scribing to “units” issued by various schemes established by the Trusts
as evidence of their beneficial interest in the fund.
It should be understood that the fund should be just a “pass through”
vehicle. Under the Indian Trusts Act, the trust of the fund has no
independent legal capacity itself, rather it is the Trustee or the Trustees
who have the legal capacity and therefore all acts in relation to the trusts
are taken on its behalf by the Trustees. In legal parlance the investors or
the unit-holders are the beneficial owners of the investment held by the
Trusts, even as these investments are held in the name of the Trustees
on a day-to-day basis. Being public trusts. Mutual Fund can invite any
number of investors as beneficial owners in their investment schemes.
Trustees:
A Trust is created through a document called the Trust Deed that is
executed by the fund sponsor in favor of the trustees. The Trust- the
Mutual Fund may be managed by a board of trustees- a body of
individuals, or a trust company a corporate body. Most of the funds in
India. Are managed by Boards of Trustees. While the boards of trustees
are governed by the Indian. Trusts Act, where the trusts are a corporate
body, it would also require complying with the Companies Act, 1956. The
Board or the Trust company as an independent body, acts as a protector
of the of the unit-holders interests. The Trustees do not directly manage
the portfolio of securities. For this specialist function, they appoint an
Asset Management Company. They ensure that the Fund is managed by
ht AMC as per the defined objectives and in accordance with the trusts
deeds and SEBI regulations.

29
The Asset Management Companies:
The role of an Asset Management Company (AMC) is to act as the
investment manager of the Trust under the board supervision and the
guidance of the Trustees. The AMC is required to be approved and
registered with SEBI as an AMC. The AMC of a Mutual Fund must have
a net worth of at least Rs. 10 Cores at all times. Directors of the AMC,
both independent and non- independent, should have adequate
professional expertise in financial services and should be individuals of
high morale standing, a condition also applicable to other key personnel
of the AMC. The AMC cannot act as a Trustee of any other Mutual Fund.
Besides its role as a fund manager, it may undertake specified activities
such as advisory services and financial consulting, provided these
activities are run independent of one another and the AMC’s resources
(such as personnel, systems etc.) are properly segregated by the
activity. The AMC must always act in the interest of the unit-holders and
reports to the trustees with respect to its activities.

Custodian and Depositories:

Mutual Fund is in the business of buying and selling of securities in large
volumes. Handling these securities in terms of physical delivery and
eventual safekeeping is a specialized activity. The custodian is
appointed by the Board of Trustees for safekeeping of securities or
participating in any clearance system through approved depository
companies on behalf of the Mutual Fund and it must fulfill its
responsibilities in accordance with its agreement with the Mutual Fund.
The custodian should be an entity independent of the sponsors and is
required to be registered with SEBI. With the introduction of the concept
of dematerialization of shares the dematerialized shares are kept with
the Depository participant while the custodian holds the physical
securities. Thus, deliveries of a fund’s securities are given or received by
a custodian or a depository participant, at the instructions of the AMC,
although under the overall direction and responsibilities of the Trustees.

Bankers:
A Fund’s activities involve dealing in money on a continuous basis primarily
with respect to buying and selling units, paying for investment made,
receiving the proceeds from sale of the investments and discharging its
obligations towards operating expenses. Thus the Fund’s banker plays
an important role to determine quality of service that the fund gives it
timely delivery of remittances etc.

30
Transfer Agents:
Transfer agents are responsible for issuing and redeeming units of the
Mutual Fund and provide other related services such as preparation of
transfer documents and updating investor records. A fund may choose to
carry out its activity in-house and charge the scheme for the service at a
competitive market rate. Where an outside Transfer agent is used, the
fund investor will find the agent to be an important interface to deal with,
since all of the investor services that a fund provides are going to be
dependent on the transfer agent.

REGULATORY STRUCTURE OF MUTUAL FUNDS IN

INDIA:
The structure of mutual funds in India is guided by the SEBI. Regulations,
1996. These regulations make it mandatory for mutual fund to have three
structures of sponsor trustee and asset Management Company. The
sponsor of the mutual fund and appoints the trustees. The trustees are
responsible to the investors in mutual fund and appoint the AMC for
managing the investment portfolio. The AMC is the business face of the
mutual fund, as it manages all the affairs of the mutual fund. The AMC and
the mutual fund have to be registered with SEBI.

31
 MUTUAL FUNDS IN INDIA

In 1963, the day the concept of Mutual Fund took birth in India. Unit Trust
of India invited investors or rather to those who believed in savings, to
park their money in UTI Mutual Fund.
For 30 years it goaled without a single second player. Though the 1988
year saw some new mutual fund companies, but UTI remained in a
monopoly position.

The performance of mutual funds in India in the initial phase was not even
closer to satisfactory level. People rarely understood, and of course
investing was out of question. But yes, some 24 million shareholders were
accustomed with guaranteed high returns by the beginning of
liberalization of the industry in 1992. This good record of UTI became
marketing tool for new entrants. The expectations of investors touched the
sky in profitability factor. However, people were miles away from the
preparedness of risks factor after the liberalization.
The net asset value (NAV) of mutual funds in India declined when stock
prices started falling in the year 1992. Those days, the market regulations
did not allow portfolio shifts into alternative investments. There was rather
no choice apart from holding the cash or to further continue investing in
shares. One more thing to be noted, since only closed-end funds were
floated in the market, the investors disinvested by selling at a loss in the
secondary market.
The performance of mutual funds in India suffered qualitatively. The 1992
stock market scandal, the losses by disinvestments and of course the lack
of transparent rules in the whereabouts rocked confidence among the
investors. Partly owing to a relatively weak stock market performance,
mutual funds have not yet recovered, with funds trading at an average
discount of 1020 percent of their net asset value.

The securities and Exchange Board of India (SEBI) came out with
comprehensive regulation in 1993 which defined the structure of Mutual
Fund and Asset Management Companies for the first time.
The supervisory authority adopted a set of measures to create a
transparent and competitive environment in mutual funds. Some of them
were like relaxing investment restrictions in to the market, introduction of
open-ended funds,and paving the getway of mutual funds to lunch

32
pension schemes.The measure was taken to make mutual funds the key
instrument for long-term saving. The more the variety offered, the
quantitative will be investors.

Several private sectors Mutual Funds were launched in 1993 and 1994.
The share of the private players has risen rapidly since then. Currently
there are 34 Mutual Fund organizations in India managing 1,02,000
crores.

At last to mention, as long as mutual fund companies are performing with

lower risks and higher profitability within a short span of time, more and
more people will be inclined to invest until and unless they are fully
educated with the dos and don’ts of mutual funds.

Mutual fund industry has seen a lot of changes in past few years with
multinational companies coming into the country, bringing in their
professional expertise in managing funds worldwide. In the past few
months there has been a consolidation phase going on in the mutual fund
industry in India. Now investors have a wide range of Schemes to choose
from depending on their individual profiles.

33
 MUTUAL FUND COMPANIES IN INDIA:
The concept of mutual funds in India dates back to the year 1963. The
era between 1963 and 1987 marked the existance of only one mutual
fund company in India with Rs. 67bn assets under management (AUM),
by the end of its monopoly era, the Unit Trust of India (UTI). By the end
of the 80s decade, few other mutual fund companies in India took their
position in mutual fund market.

The new entries of mutual fund companies in India were SBI Mutual
Fund, Canbank Mutual Fund, Punjab National Bank Mutual Fund, Indian
Bank Mutual Fund, Bank of India Mutual Fund.

The succeeding decade showed a new horizon in Indian mutual fund

industry. By the end of 1993, the total AUM of the industry was Rs.
470.04 bn. The private sector funds started penetrating the fund families.
In the same year the first Mutual Fund Regulations came into existance
with re-registering all mutual funds except UTI. The regulations were
further given a revised shape in 1996.

Kothari Pioneer was the first private sector mutual fund company in India
which has now merged with Franklin Templeton. Just after ten years with
private sector players penetration, the total assets rose up to Rs.
1218.05 bn. Today there are 33 mutual fund companies in India.

34
 Major Mutual Fund Companies in India
 ABN AMRO Mutual Fund Reliance Mutual Fund
 Birla Sun Life Mutual Fund Standard Chartered Mutual Fund
 Bank of Baroda Mutual Fund Franklin Templeton India Mutual Fund
 HDFC Mutual Fund Morgan Stanley Mutual Fund
 HSBC Mutual Fund Escorts Mutual Fund
 ING Vysya Mutual Fund Alliance Capital Mutual Fund
 Prudential ICICI Mtual Fund Benchmark Mutual Fund
 State Bank of India Mutual Fund Canbank Mutual Fund
 Tata Mutual Fund Chola Mutual Fund
 Unit Trust of India Mutual Fund LIC Mutual Fund

Market Share ’09

Reliance Mutual Fund HDFC Mutual Fund
Birla Sun Life Mutual Fund ICCI Prudential Mutual Fund
Kotak Mahindra Mutual Fund UTI Mutual Fund
LIC Mutual Fund SBI Mutual Fund
IDFC Mutual Fund TATA Mutual Fund

3% 3% 9%
3%

9%

20%

9%

4%

4%
14% 4%
4%
14%

35
FUTURE PROSPECT OF MUTUAL FUNDS IN INDIA

Financial experts believe that the future of Mutual Funds in India will be
very bright. It has been estimated that by March-end of 2016, the mutual
fund industry of India will reach Rs 40,90,000 crore, taking into account
the total assets of the Indian commercial banks. In the coming 10 years
the annual composite growth rate is expected to go up by 13.4%.

 100% growth in the last 6 years.

 Number of foreign AMC’s are in the queue to enter the Indian
markets like Fidelity Investments, US based, with over USS Itrillion
assets under management worldwide.
 Our saving rate is over 23%, highest in the world. Only
channelizing these savings in mutual funds sector is required.
 We have approximately 29 mutual funds which is much less than
US having more than 800. There is a big scope for expansion.
 ‘B’ and ‘C’ class cities are growing rapidly. Today most of the
mutual funds are concentrating on the ‘A’ class cities. Soon they
will find scope in the growing cities.
 Mutual fund can penetrate rurals like the Indian insurance industry
with simple and limited products.
 SEBI allowing the MF’s to launch commodity mutual funds.
 Emphasis on better corporate governance.
 Trying to curb the late trading practices.
 Introduction of Financial Planners who can provide need based
advice.

Looking at the past developments and combining it with the current

trends it can be concluded that the future of Mutual Funds in India
has lot of positive things to offer to its investors.

36
 RESEARCH METHODOLOGY

This Report is based on primary as well as secondary data, however

primary data collection was given more important since it is overhearing
factor in attitude studies.

One of the most important users of Research Methodology is that it

helps in identifying the problem, collecting, analyzing the required
information or data and providing an alternative solution to the problem.
It also helps in collecting the vital information that is required by the Top
Management to assist them for the better decision making both day to
day decisions and critical ones.

a) Research Design: Descriptive Design

b) Data Collection Method: Survey Method

c) Sampling Method: The sample was collected through personal

visits, formally and informal talks and through filling up the
Questionnaire prepared. The data has been analyzed by using
mathematical or statistical tools.
d) Sample Size: 80 respondents
e) Sampling Unit: Businessmen, Government Servant, Retired

Individuals

f) Data Source: Primary data

g) Data Collection Instrument: Structured Questionnaire

h) Sample Design: Data has been presented with the help of Bar
Graph, Pie Chart, and Line Graph etc.

37
 Sample Questionaire
Name…………… Age………………. Mob……………

Ques.1 What is your Qualification?

(a) Under graduation (b) Graduation (c) Post Graduation (d) Others

Ques.2 What is your occupation?

(a) Government (b) Private (c) Business (d) Others

Ques.3 What is your monthly family income?

(a) <=10000 (b) 10001-20000 (c) 20001-30000 (d) >30001

Ques.4 Do you have any idea about mutual fund?

(a) Yes (b) No

Ques.5 From where you came to know about Mutual fund?

(a) Advertisement (b) Peer Group (c) Banks (d) Fincial Advisors

Ques.6 Where will you prefer to invest?

(a) Savings (b) Insurance (c) FD (d) Mutual Fund (e) PO (f) Shares

(g) Gold (h) Real Estate

Ques.7 Which is your preference while investing?

(a) Low Return (b) High Return (c) Liquidity (d) Trust

Ques.8 Which Mutual Fund company you will prefer to invest?

(a) Reliance (b) SBI (c) UTI (d) HDFC

Ques.9 Which mode of investment will you prefer?

(a) Long Term (b) Short Term

Ques.10 Objectives of investment?

(a) Preservation (b) Current Income (c) Conservative Growth

(d) Aggressive Growth

38
 Data Analysis & Interpretation
1. Analyzing to according to age

Age of investors
10% 3%
12%

18%

35%
22%

>=30 31-35 36-40 41-45 46-50 >50

Interpretation Here, it is been found that most of the investors i.e, 35%
of the investors who invest in Mutual Fund lies in between the age group
of 36-40, they are more reluctant as well as experienced in this field of
Mutual Fund.
Then the Second highest age group lies in between the age group of 41-
45 (22%), they are also aware of the benefits in investing in mutual fund.
The least interested group is the Youth Generations.

2. Analyzing according to Qualifiaction

Qualification of Investors
70
60
No. of Investors

50
40
30
20
10
0

Qualification

Interpretation – Out of my survey of 100 people, 71% of the investors are

Graduates and Post Graduates and 16.67% are Under Graduates and
Others, around 12.5%, which may include persons who have passed their
10 standard or 12 standard. Invests in Mutual Funds.

39
3. Analyzing according to Occupation

Investor's Profession
Business Others Goverments Private

25%

46%
5%

24%

Interpretation – Here it is amazed to see that around 46% of the

investment is been invested by the persons working in Private sectors,
according to them investing in Mutual Funds is more safer as well as
more gainer.
Then we find that the businessmen of around 25%gives more preference
in investing in mutual funds, they think that investing in mutual fund is
better than investing in shares as well as Post office.
Next we see that the persons working in Government sectors of around
24% only invests in Mutual Fund.

4. Analyzing according to Monthly Family Income

Income of Investors <=10000

10001-20000
18% 20001-30000
43% >30000

39%

Interpretation – Here, we find that investors of around 43% with the

monthly income of Rs. >30000 are the most likely to invest in Mutual
fund, than any other income group.

40
5. Analyzing data according to factors seen before
investing
Preference of Investment

No.of Investors

Trust

High-return
Low-risk
Liquidity

Interpretation – As it can be clearly Stated from the above Diagram

that investors before investing, the main criteria that they used to give
more Preference is Low Risk. According to them, if a scheme is low risk,
it may or may not give a very good return, but still 56% of the investors
choose low risk as the option while investing in Mutual Funds.
Then we see that 27% of the investors take High return as one of their
most important criteria. According to them, if there is no high return then
we should opt for Post office and not mutual fund.
11% of the investors take trust as one of their important factors
Only 4% of the Investors think liquidity as their most preferable options.
6. Analyzing data according to mode of investment
Mode of Investment

18%

82%

Long Term Short Term

Interpretation – It can be clearly stated from the above Figure that

82% of the investors like to invest in SIP, as the investor feels that they
are more comfortable to save via SIP than the Long term.
While 18% of the investors find SIP as very burdensome, and they are
more reluctant to save in Long term investment.

41
7. Analyzing data according to objective of investment
Objective of Investment
No. of Investors

Aggressive
Conservation
Current Income Growth Growth
Preservation

Interpretation – Here we see that 36% of the investor’s objectives are

to preserve the principal amount, so that it can be used as a savings for
the future period.
While 22% investors invest to get derive their current income through
investing in Mutual Funds.
While 15% and 17% of the investors invest to get a conservative as well
as aggressive growth.
8. Analyzing data according to awarness about Mutual
Fund
No. of Investors
Awarness
Awarness about about Mutual
Mutual Fund
Fund

100
80
60
40
20
0
Yes No

Knowledge about Mutual Fund

Interpretation- From The total lot of 100 people, 96 people are actually
aware of the fact of Mutual fund and are regular investors of Mutual
Funds.
4 People were there who have just heard the name or rather are just
aware of the fact of existence of the word called Mutual Fund, but
doesn’t know anything else about Mutual Funds.

42
9. Analyzing data according to from where they came to
know about Mutual Fund.
50
Chart Title
No. of Investors 45
40
35
30
25
20
15
10
5
0
Advertisement Peer Group Bank Financial Advisors

Intmated about Mutual Fund

Interpretation – Here from the Line Graph it can be clearly stated that
around 46% of the investors came to know the benefits of Mutual Fund from
Financial Advisors. According to the suggestions given by the financial
advisors, people use to choose Mutual Funds Scheme.
Then Secondly, 24% and 21% of the people used to know from
Advertisement and Peer group respectively.
Lastly 9% of the investors do invests after being intimated by the Banks
about the benefits of Mutual Funds.
10. Analyzing data according to investors choice of
investing in different Mutual Fund Companies.
Different Mutual Fund Company
UTI
Others 10%
13% Reliance
45%

HDFC
15%

SBI
17%
Interpretation – From this above Pie Chart it can be clearly stated that
45%, 17% of the people like to invest in large cap companies where return
is comparatively less but risk is low thus they invest in Reliance, SBI
respectively.
15%, 10% of the people like to invest in Mutual Fund Companies like
HDFC, UTI, etc. where risk is slightly higher than the above two mentioned
companies as well as return is also slightly high
13% of the investors like to invest in the Small Cap’s and Mid Cap’s
companies.

43
 FINDINGS
Through this Project the results that was derived are-

 People who lie under the age group of 36-40 have more
experience and are more interested in investing in Mutual Funds.
 There was a lot of lack of awareness or ignorance, that’s why out
of 200 people, 120 people have invested in Mutual Fund and 80
people is unaware of investing in Mutual Funds.
 Generally, People employed in Private sectors and Businessman
are more likely to invest in Mutual Funds, than other people
working in other professions.
 Generally investors whose monthly income is above Rs. 20001-
30000 are more likely to invest their income in Mutual Fund, to
preserve their savings of at least more than 20%.
 People generally like to save their savings in Mutual Fund, Fixed
Deposits and Savings Account.
 Many people came to know about Mutual Fund from Financial
Advisors, Advertisement as well as from their Peer group, and they
generally invest in the Mutual Fund by taking advices from their
Legal Advisors.
 → Investors generally like to invest in Large Cap Companies like
Reliance, SBI, etc. to minimize their risk..
 The most popular medium of investing in Mutual Fund is through
SIP and moreover people like to invest in Equity Fund though it is
a risky game.
 The main Objective of most of the Investors is to preserve their
Income.

44
 CONCLUSION
Mutual Funds now represent perhaps most appropriate investment
opportunity for most investors. As financial markets become more
sophisticated and complex, investors need a financial intermediary who
provides the required knowledge and professional expertise on
successful investing. As the investor always try to maximize the returns
and minimize the risk. Mutual fund satisfies these requirements by
providing attractive returns with affordable risks. The fund industry has
already overtaken the banking industry, more funds being under mutual
fund management than deposited with banks. With the emergence of
tough competition in this sector mutual funds are launching a variety of
schemes which caters to the requirement of the particular class of
investors. Risk takers for getting capital appreciation should invest in
growth, equity schemes. Investors who are in need of regular income
should invest in income plans.

The stock market has been rising for over three years now. This in turn
has not only protected the money invested in funds but has also to
helped grow these investments.

This has also instilled greater confidence among fund investors who are
investing more into the market through the MF route than ever before.

Reliance India mutual funds provide major benefits to a common man

who wants to make his life better than previous.

The mutual fund industry as a whole gets less than 2 per cent of
household savings against the 46 per cent that go into bank deposits.
Some fund managers say this only indicates the sector’s potential. “If
mutual funds succeed in chipping away at bank deposits, even a triple
digit growth is possible over the next few years.

45
 BIBLIOGRAPHY

 www.google.com
 Various MFs Company sites
 Journals & Magazines
 Newspaper & Dailies

46