Deepak (Axis) Project Report

8/8/2019 Deepak (Axis) Project Report

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AUTUMN INTERNSHIP PROJECT

REPORT

Submitted By

DEEPAK M(Reg. No: 5NB11843)

Under The Guidance Of

Mr. JEEMON JOSEPH

(Faculty Guide)

Submitted in the Partial Fulfillment of theRequirements for the Award of the Degree Of

Masters of BusinessAdministration

INC, KNR PROJECT REPORT 1


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ICFAI NATIONAL COLLEGE KANNUR



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PROJECT REPORT ON

A STUDY CONDUCTED TO IDENTIFY THE MOST

EFFECTIVE MARKETING STRATEGIES OF MUTUAL

FUND AMONG COMPETITORS IN KANNUR

A report submitted in the partial fulfillment of the requirements of MBAProgram (2005-2007) ICFAI National College.

SUBMITTED BY: DEEPAK MENROLLMENT NO: 5NB11843

PROGRAM: MBA

ICFAI NATIONAL COLLEGEKANNUR

UNDER THE GUIDANCE OF

FACULTY GUIDE COMPANY

GUIDE

Mr. JEEMON JOSEPH Mr. SABU PETER

Organization: TATA ASSET MANAGEMENT

LIMITED



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This is to certify that the Autumn Internship Project titled A STUDY

CONDUCTED TO IDENTIFY THE MOST EFFECTIVE

MARKETING STRATEGIES OF MUTUAL FUND AMONG

COMPETITORS IN KANNUR, a bonafide work ofDEEPAK M, is

original and has been done under my supervision partial fulfillment of the

requirement for the award of MBA for the period starting from 8th August

2006 to 16th December 2006. I am pleased to say that his performance

during the period was extremely satisfactory.

Mr. Jeemon Joseph

FACULTY GUIDE

Countersigned by

Regional Head



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DECLARATION

I Deepak M here by declare that this report is a true record of

the autumn internship project report done by me at Tata Asset

Management Pvt Ltd, Cochin for the partial fulfillment of my

MBA at ICFAI National College, Kannur. Further, this report

has not been submitted to any other university or educational

institution for the award if any degree or diploma.

Place: Deepak M

Date : Enrollment No: 5NB11843



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TABLE OF CONTENTS

Acknowledgement

7

List of Table8

List of Chart9

Abstract10

Importance of the study11

Scope of the Study12

CHAPTER I14

Introduction

Project title

Objective

Methodology

Defining the problem and the research objective

Developing the research plan

Collection and Sources of data

Analyze the collected information

Report research findings

Limitations

CHAPTER II18

Introduction about Mutual Fund



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The Mutual Fund Industry-History

Fund by types

Recent trends in mutual fund industry Future scenario

Market trends

Performance of mutual funds in India

Association of mutual fund federation of India (amfi)

The objectives of association of mutual funds in India

(amfi)

CHAPTER III38

Company Profile

About TATA

TATA Group Tata Asset Management Pvt. Ltd

About UTI

UTI-Asset Management Company Pvt. Ltd

UTI Bank

About FRANKLIN TEMPLETON

Franklin Templeton Investments Pvt. Ltd

CHAPTER IV54

Analysis and interpretation of data

Findings from 4P,s among companys

Findings from data collected through questionnaire



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Suggestions

ConclusionCHAPTER V 80

OJT titleObjectives

Targets/Tasks

Strategy

Achievements

Mid-course correction

Limitations

Conclusion

REFERENCES86

ANNEXURE: QUESTIONNAIRE87



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ACKNOWLEDGEMENT

It gives me great pleasure to thank and acknowledge all the

concerned people who helped me and are helping me in continuing this

project work successfully.

I extend my sincere gratitude to Mr. Jeemon Joseph (Faculty,

INC Alapuzha), Mr. Hareendran (Faculty, INC Calicut) my faculty

guides for his valuable guidance in steering the course of the study and

in the preparation of this report.

I also express my gratitude towardsMr. Sujith (Regional head,

Kerala Region, TATA Asset Management Limited), my company guide

Mr. Sabu Peter (Banking functional Manager, TATA Asset

Management Limited), Mr. Kishore Krishna (Senior Sales Executive,

TATA Asset Management Limited) under whose valuable guidance and

co-operation I conducted my studies.

Im also gratefulMr.Krishnan (Branch Manager, HDFC),Mr. Regunath (Deputy Manager, HDFC), Mr. Arun Nambiar (Deputy

Manager, HDFC), Mr. Jestin Joseph (Asst Manager, HDFC) and, Mr.

Rakesh Rajan . P.T (Sales Officer, HDFC) and all at bankfor their

support and encouragement.

Last, but not the least my heart felt gratitude to all my teachers of ICFAI

Kannur and friends for their constant encouragement, support, help andvaluable advice to make this project in the way of success.

Name: DEEPAK M

Enrollment No: 5NB11843



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Sl.

No.

Table

. No.List of Tables

Pg.

no.

Comparing 4 Ps

1 1 Comparing Products 56

2 2 Comparing Price 57

3 3 Comparing Place 57

Analysis and Interpretation of Data

4 1 Customer awareness about mutual funds 60

5 2 Awareness Media 60

6 3 Customers invested in mutual funds 61

7 4Customers preference of schemes in mutualfunds

62

8 5 Investment pattern of the customers 63

9 6 Customers objective of saving 64

10 7 Factors influencing investments 65

11 8 Knowledge about Mutual Fund schemes 66

12 9 Preference for Equity schemes 67

13 10 Reason to choose Mutual Fund 68

14 11Customers preference regarding SIP andLump sum

69

15 12Category of customers investing in Mutual

Fund (Employment)70

16 13Category of customers invested/interested inMutual Fund (Age)

71



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Sl.

No.

Chart

. No.List of Charts

Pg.

no.

Comparing 4 Ps

1 1 Comparing Products 56

Analysis and Interpretation of Data

2 1 Customer awareness about mutual funds 60

3 2 Awareness Media 61

4 3 Customers invested in mutual funds 62

5 4 Customers preference of schemes in mutualfunds

62

6 5 Investment pattern of the customers 63

7 6.A Customers objective of saving 64

8 6.B Customers objective of saving 65

9 7 Factors influencing investments 66

10 8 Knowledge about Mutual Fund schemes 67

11 9 Preference for Equity schemes 68

12 10 Reason to choose Mutual Fund 69

13 11Customers preference regarding SIP and Lumpsum

70

14 12Category of customers investing in Mutual Fund

(Employment)

71

15 13.ACategory of customers invested/interested inMutual Fund (Age)

72

16 13.BCategory of customers invested/interested inMutual Fund (Age)

72



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ABSTRACT

The present study A study conducted to identify the most

effective marketing strategies of mutual fund among competitors inKannuris based on mutual funds and various schemes provided by Tata

Asset Management Private Limited. The on-the-job training task

assigned is Sale of 30 mutual fund applications per month.

The Autumn Internship Program (AIP) commenced from the 8th of

August 2006 and will formally close on the 16 th of December 2006. The

duration of the present study is 4 months. The project work and the OJT

should be done simultaneously during the AIP program. The main

objective of this AIP program is to fill the gap between academic

institution and the corporate world. The company I have got for doing my

AIP is Tata Asset Management Private Limited. It is one of the best

companies in the field of asset management and its my pleasure to work

with such a well-reputed company like Tata.

The company, TataAsset Management Private Limitedconducted

orientation and training sessions, where in a briefing about the company

and its working was given. Then on 03rd September Company placed me

in HDFC Bank, Kannur branch. My OJT task is to sit inside the bank and

make telecalls to the bank account holder and to approach the walk-in-

clients.

The primary data for the study project is obtained from the survey

conducted using well-structured questionnaires. The sample on which the

survey was conducted consists of 100 HDCF account holders feed back.

Interaction with the company officials and bank employees helped a lot

for the study. Secondary data for the study was got from the various

brochures and fact sheets distributed by the company and from related

websites.



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Importance of the study

This study is being conducted to increase the customer base

of as well as to suggest the best marketing strategy for TATA AMC.

Taking in to consideration the other AMCs TATA MUTUAL FUND has

got tough time to play in the market, why because there are other AMCs

in the market which has got good market share as well as given a higher

returns than TATA AMC. So this study would help TATA AMC to opt

the best for their move in the market. Regarding service TATA AMC has

got a good remark from the customer. As now a days technology is

increasing so the usage of internet is also increasing. So the information

is at the tip of finger of the people. So the people are now more in to

shares, mutual funds, web trades etc. So a study and formulation of an

effective marketing strategy would really help TATA to perform better.



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Scope of the Study

The mutual fund industry in India is still young. MUTUAL

FUND Worldwide, Mutual Fund or Unit Trust as it is referred to in some

parts of the world, has a long and successful history. The popularity of

Mutual Funds has increased manifold in developed financial markets, like

the India. In India, the mutual fund industry started with the setting up of

the Unit Trust of India in 1964. Public sector banks and financial

institutions were allowed to establish mutual funds in 1987. Since 1993,

private sector and foreign institutions were permitted to set up mutual

funds.

In February 2003, following the repeal of the Unit Trust of

India Act 1963 the erstwhile UTI was bifurcated into two separate entities

viz. The Specified Undertaking of the Unit Trust of India, representing

broadly, the assets of US 64 scheme, assured returns and certain other

schemes and UTI Mutual Fund conforming to SEBI Mutual Fund

Regulations.

As at the end of March 2006, there were 29 mutual funds,

which managed assets of Rs. 2,31,862 crores ( US $ 52 Billion) under

592 schemes. This fast growing industry is regulated by the Securities

and Exchange Board of India (SEBI).

So in this aggressive Indian share market an effective

marketing strategy would make TATA AMC to reach up to heights i.e.

among top 5 mutual fund companies in India. The company can improve

its position in the industry if it adopts an effective marketing tool. The

study is upon whether to enrich the existing marketing channel or to

adopt a new marketing tool.



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PART 1

PROJECT WORK



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CHAPTER I

Introduction

Project title

Objective

Methodology

Defining the problem and the research objective

Developing the research plan

Collection and Sources of data

Analyze the collected information

Report research findings

Limitations



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INTRODUCTION

PROJECT TITLE:A STUDY CONDUCTED TO IDENTIFY THE MOST

EFFECTIVE MARKETING STRATEGIES OF MUTUAL FUND

AMONG COMPETITORS IN KANNUR

OBJECTIVE

To find out effective marketing strategy of mutual fund for TATA

ASSET MANAGEMENT in relation with 4P'.

SUB OBJECTIVES

To find the prospective customer segment.

To know about the investment pattern of customers in different

portfolios.

To make necessary recommendations to improve the marketing

strategies of the company.

METHODOLOGY

The objectives of the present study were accomplished by conducting a

systematic market research. Market research is the systematic design,

collection, analysis and reporting of data and findings that are relevant to

different marketing situations facing the company. The marketing

research process adopted in the present study consisted of the following

stages: -



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a. Defining the problem and the research objective: The

research Objective states what information is needed to solve the

problem. The objective of the research was to find out effective

marketing strategy of mutual fund for the company where I am doing my

internship in comparison with UTI Mutual Fund and Franklin Templeton

Investments.

b. Developing the research plan: Once the problem is identified,

the next step is to prepare a plan for getting the information needed for

the research. The present study adopted the exploratory approach wherein

there was a need to gather large amount of information before making a

conclusion.

c. Collection and Sources of data: Market research requires two

kinds of data, i.e., primary data and secondary data. Well-structured

questionnaires were prepared for to collect data from the customers.

Secondary data was collected from various journals, books and web sites.

Sampling Technique:

Sample Size : 100nos

Sample Method : Random sampling method.

Samples were taken out of 100 HDFC customers whose age is above

18yrs. Samples were taken out on random basis because any one who iscapable of investing can be a customer to the company.

Method of collection of data:

1. Primary Data

A. Data is collected through questionnaire method from the

customers.



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B. Direct interview with the bank managers, employees of

stock broking firms and amfi agents.

2. Secondary Data

The study is mainly based on the data provided by fact sheets,

broachers, official internet sites and advertising media. This is

supplemented by information gathered during discussions with the

company officials.

d. Analyze the collected information: This involved converting

raw data into useful information. It involved tabulation of data,Correlation and finding out the percentages.

e. Report research findings: This phase marked the culmination of

the marketing research effort. This report with the research findings is a

formal written document. The research findings and personal experience

were used to propose the recommendations to develop an effective

marketing strategy for to improve the companys market share in Kannur.

Limitations

Every effort has been made to make the study as exhaustive as possible.

But the study is not free from limitations

The confidentiality of some facts and figures.

Time limitation.

All values related to mutual funds changes from day to day.



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Confined geographical location.



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CHAPTER II

Industry Profile

Introduction about Mutual Fund

The Mutual Fund Industry-History

Fund by types

Recent trends in mutual fund industry

Future scenario

Market trends


Association of mutual fund federation

of India (amfi)

The objectives of association of

mutual funds in India (amfi)



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Introduction

A Mutual Fund is a trust that pools the savings of a number of investors

who share a common financial goal. 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 appreciations realized are shared by its unit holders in proportion

to the number of units owned by them. Thus a Mutual Fund is the most

suitable investment for the common man as it offers an opportunity toinvest in a diversified, professionally managed basket of securities at a

relatively low cost. The flow chart below describes broadly the working

of a mutual fund:



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The Mutual Fund Industry in India-History

Between 1964 and 1987, the industry was a 'one-man show', with

UTI being the only player in the market.

In the following six years, the industry was opened up but limited

to state-run players. Six state-run banks and two government

insurance firms established asset management companies.

The industry remained a public-sector preserve till 1993, when the

first private mutual fund - the Kothari Pioneer Mutual Fund --

launched one closed- and one open-ended fund.

Nevertheless, about two-thirds of the industry's assets are managed

by state-run AMCs and the remainder by privately run asset

management companies.

UTI alone controls about 60 per cent of the industry's assets; 17.6

per cent is managed by AMCs that are largely foreign owned and

10.4 per cent by Indian-owned AMCs.

Indian private mutual funds have 4.9 per cent of the industry's

AUM; state-run institutions control 3.8 per cent and bank-

sponsored AMCs have a 3.6 per cent share of the pie.



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The origin of mutual fund industry in India is with the introduction

of the concept of mutual fund by UTI in the year 1963. Though the

growth was slow, but it accelerated from the year 1987 when non-UTI

players entered the industry.

In the past decade, Indian mutual fund industry had seen a dramatic

improvement, both quality wise as well as quantity wise. Before, the

monopoly of the market had seen an ending phase; the Assets Under

Management (AUM) was Rs. 67bn. The private sector entry to the fund

family rose the AUM to Rs. 470 bn in March 1993 and till April 2004, it

reached the height of 1,540 bn.

Putting the AUM of the Indian Mutual Funds Industry into

comparison, the total of it is less than the deposits of SBI alone,

constitute less than 11% of the total deposits held by the Indian banking

industry.

The main reason of its poor growth is that the mutual fund industry

in India is new in the country. Large sections of Indian investors are yet

to be intellectuated with the concept. Hence, it is the prime responsibility

of all mutual fund companies, to market the product correctly abreast of

selling.

The mutual fund industry can be broadly put into four phases

according to the development of the sector. Each phase is briefly

described as under.



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

comprehensive and revised Mutual Fund Regulations in 1996. The

industry now functions under the SEBI (Mutual Fund) Regulations 1996.

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

foreign mutual funds setting up funds in India and also the industry has

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 under

management was way ahead of other mutual funds.

Fourth Phase - since February 2003

This phase had bitter experience for UTI. It was bifurcated into two

separate entities. One is the Specified Undertaking of the Unit Trust of

India with AUM of Rs.29,835 crores (as on January 2003). The Specified

Undertaking of Unit Trust of India, functioning under an administratorand under the rules framed by Government of India and does not come

under the purview of the Mutual Fund Regulations.

The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB,

BOB and LIC. It is registered with SEBI and functions under the Mutual

Fund Regulations. With the bifurcation of the erstwhile UTI which had inMarch 2000 more than Rs.76,000 crores of AUM and with the setting up

of a UTI Mutual Fund, conforming to the SEBI Mutual Fund

Regulations, and with recent mergers taking place among different

private sector funds, the mutual fund industry has entered its current

phase of consolidation and growth. As at the end of September, 2004,



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there were 29 funds, which manage assets of Rs.153108 crores under 421

schemes.

Types of Mutual Funds Schemes in India

Wide variety of Mutual Fund Schemes exists to cater to theneeds such as financial position, risk tolerance and return expectationsetc. The table below gives an overview into the existing types of schemesin the Industry.

TYPES OF MUTUAL FUND SCHEMES

By Structure

Open - Ended Schemes

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

Close - Ended Schemes

A closed-ended scheme has a stipulated maturity periodwhich generally ranging from three to fifteen years. Thefund 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 ofthe scheme on the stock exchanges where they are listed. In

order to provide an exit route to the investors, some closed-ended schemes give an option of selling back the units to themutual fund through periodic repurchase at NAV related

prices. SEBI regulations stipulate that at least one of the twoexit routes is provided to the investor.

Interval Schemes



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Interval funds combine the features of open-ended andclosed-ended schemes. They are open for sale or redemptionduring pre-determined intervals at NAV related prices.

By Investment Objective

Growth Schemes

The aim of growth funds is to provide capital appreciationover the medium to long-term. Such schemes normallyinvest a majority of their investments in equities. It has been

proven that returns from stocks, have outperformed mostother kinds of investments held over the long-term. Growth

schemes are ideal for investors having a long-term outlookseeking growth over a period of time.

Income Schemes

The aim of income funds is to provide regular and steadyincome to investors. Such schemes generally invest in fixedincome securities such as bonds, corporate debentures andgovernment securities. Income funds are ideal for investors

who look for capital stability and regular income.

Balanced Schemes

The aim of balanced funds is to provide both growth andregular income. Such schemes periodically distribute a partof their earning and invest both in equities and fixed incomesecurities in the proportion indicated in their offerdocuments. In a rising stock market, the NAV of these

schemes may not normally keep pace, or fall equally whenthe market falls. These are ideal for investors looking for acombination of income and moderate growth.

Money Market Schemes

The aim of money market funds is to provide easy liquidity,preservation of capital and moderate income. These schemes

generally invest in safer short-term instruments such as



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treasury bills, certificates of deposit, commercial paper andinter-bank call money. Returns on these schemes mayfluctuate depending upon the interest rate prevailing in themarket. These are ideal for corporate and individual

investors as a means to park their surplus funds for shortperiods.

Other Schemes

Tax Saving Schemes

These schemes offer tax rebates to the investors underspecific provisions of the Indian Income Tax laws as the

Government offers tax benefits for investments in specifiedavenues. Investments made in Equity Linked SavingsSchemes (ELSS) and Pension Schemes are allowed incometax benefits as per Section 88 of the Income Tax Act.

Special Schemes Industry Specific SchemesIndustry Specific Schemes invest only in the industriesspecified in the offer document. The investment of these

funds is limited to specific industries like InfoTech,FMCG, and Pharmaceuticals etc.

Index schemesIndex schemes attempt to replicate the performance of a

particular index such as the BSE Sensex or the NSE 50.

Sectoral schemesSectoral funds are those, which invest exclusively in a

specified industry or a group of industries or varioussegments such as A Group shares or initial publicofferings (IPO).



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Tax benefits

Tax Laws governing investments in mutual funds Under

Income Tax Act, 1961:

I. To Unit-holders (Resident)

Section 94(6) of the Income Tax Act, 1961

Section 94(6) of the Income Tax Act 1961 now provides that any

person who buys or acquires any securities or unit within a period of

three months prior to the record date and such person sells or transfers

such securities or unit within a period of three months after such date and

the dividend or income on such securities or unit received or receivable

by such person is exempt, then, the loss, if any, arising to him on account

of such purchase and sale of securities or unit, to the extent such loss does

not exceed the amount of dividend or income received or receivable on

such securities or unit, shall be ignored for the purposes of computing his

income chargeable to tax.

Section 10(33) of the Income Tax Act, 1961

The dividend received by the investors from the scheme will be

exempt from income tax for all categories of investors under Section

10(33) of the Income Tax Act, 1961. The scheme will pay a distribution

tax currently @10% plus surcharge if the portfolio holds less than 50

percent debt securities on an average during the last one year period.

Section 88 of the Income Tax Act, 1961

Specified units of mutual fund schemes qualify for rebate under

Section 88 of the Income Tax Act, 1961, subscription to the Units of the

Scheme by Individuals and Hindu Undivided Families, not exceeding



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Rupees ten thousand would be eligible to a deduction, from income-tax,

of an amount equal to 20% of the amount so subscribed. In the case of

subscription by an individual, whose income is derived from the exercise

of his profession as an author, playwright, artist, musician, actor or

sportsman (including an athlete), the deduction admissible would be at

the rate of 25%.

Tax Deducted at Source (TDS)

There will not be any Tax Deduction at Source on payment to

resident unit-holders towards redemption or dividends.

Capital Gains benefit under Section 112 of the Income Tax Act, 1961

Long-term capital gains in respect of Units held for a period of

more than 12 months will be chargeable under Section 112 of the Income

Tax Act, 1961, at a concessional rate of tax @ 20% (excluding surcharge)

From the full value of consideration, the following amounts would

be deductible to arrive at the amount of capital gains:

Cost of acquisition as adjusted by Cost Inflation Index notified by

the Central Government and expenditure incurred wholly and exclusively

in connection with such transfer.Investors can also opt to pay tax @10%

(excluding surcharge) on such Long Term Capital Gains, but without the

cost inflation indexation benefit.

Wealth Tax Benefits

Mutual Fund units are exempt from Wealth Tax.

To Non-Residents/OCBs



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a) Capital Gains under Section 112 of the Income Tax Act,

1961

Long-term capital gains in respect of Units held for a period ofmore than 12 months will be chargeable under Sec 112 of the Income Tax

Act, 1961 at a concessional rate of tax of 20%. The capital gains would

be calculated after indexation of the cost of acquisition.

Investors can also opt to pay tax @10% (excluding surcharge) on

Long Term Capital Gains, but without the cost inflation indexation

benefit.

b) Tax Deduction at Source (TDS)

Redemptions/Exchanges/Switches by non-residents/OCBs/FIIs will

be subjected to tax deduction at source at the rates in force and

certificates for tax deducted will be issued.

To Charitable Trusts

Investment in the units of the scheme is an eligible mode of

investment under Section 11(5) of the Income Tax Act read with Income

Tax Rule 17 C.

II. To the Fund

Open Ended Mutual Funds are exempt from income tax under

Section 10 [23D] of the Act.



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Recent trends in mutual fund industry

The most important trend in the mutual fund industry is the aggressive

expansion of the foreign owned mutual fund companies floated by

nationalized banks and smaller private sector players.

Many nationalized banks got in to the mutual fund business in the early

nineties and got off to a good start due to the stock market boom

prevailing there. These banks did not really understand the mutual fund

business and they just viewed it as another kind of banking activity few

hired specialized staff and generally chose to transfer staff from theparent organizations. The performance of most of the schemes floated by

these funds was not good. Some schemes has offered guaranteed returns

and their parent organizations had to bail out these AMCs by paying

large amounts of money as the difference between the guaranteed and

actual returns. The services levels were also very bad. Most of these

AMC s have not been able to retain staff, float new schemes etc. and it isdoubtful whether, barring a few expectations, they have serious plans of

the activity in a major way.

The experience of some of the AMCs floated by private sector Indian

companies was also similar. They quickly realized that AMC business is

business, which makes money in the long term and requires deed

pocketed support in the intermediate years. Some have sold out to foreign

owned companies, some have merged with others and there is general

restructuring going on.

The foreign owned companies have deep pockets and have come in here

with expectation of long haul. They can be credited with introducing



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many new practices such as new product innovation, sharp improvement

in service standards and disclosure, usage of technology broken education

and support etc. In fact, they have forced the industry to upgrade itself

and service levels of organizations like UTI have improved dramatically

in the last few years.

Future scenario

The asset base will continue to grow at an annual rate of about 30 to 35%

over the next few years as investors shift their assets from banks and

other traditional avenues. Some of the older public and private sector

players will either close shop or be taken over.

Out of 10 public sector players 5 will sell out, close down or merge with

stranger players in 3 to 4 years. In the private sector this trend has already

started with two mergers and one take over. Here too some of them will

down their shutters in the near future to come.

But this does not mean there is no room for other players. The market

will witness a flurry of new players entering the arena. There will be a

large number of offers from various asset management companies in the

time to come. Some big names like fidelity principal, old mutual etc. are

looking at Indian market seriously one important reason for it is that most

major players already have presence here and hence these big names

would hardly like to get left behind.The mutual fund industry is awaiting the introduction of derivatives in

India as this should be enable it hedge its risk and this in turn would be

reflected in its Net Asset Value (NAV).

SEBI is working out the norms for enabling the existing mutual fund

schemes to trade in derivatives. Importantly, many market players have

called on the regular to initiate the process immediately, so that the



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mutual funds can implement the changes that are required to trade in

derivatives.

Market trends

Alone UTI with just one scheme in 1964, now competes with as many as

400 odd products and 34 players in the market. In spite of the stiff

competition and losing market share UTI still remains a formidable force

to reckon with.

Last six years have been the most turbulent as well as exiting ones for the

industry. New layers have come in , while others have decided to close

shop by either selling off or merging with others. Product innovation is

now pass with the game shifting to performance delivery in fund

management as well as service. Those directly associated with the fund

management industry like distributors, registrars and transfer agents and

even the regulators have become more mature and responsible.

The industry is also having a profound impact on financial markets.

While UTI has always been a dominant player on the bourses as well as

the debt markets, the new generations of private funds which have gained

substantial mass are now seen flexing their muscles. Fund managers by

their selection criteria for stocks have forced corporate governance on the

industry. By rewarding honest and transparent management with higher

valuations a system of risk reward has been created where the corporatesector is more transparent management with higher valuations a system

of risk reward has been created where the corporate sector is more

transparent than before.

Funds have shifted their focus to the recession froe sectors like

pharmaceuticals. FMCG and technology sector fund performance are

improving funds convection which averaged less than Rs. 100bn. Per



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annum over five years period spanning 1993-98 doubted to Rs. 210bn. in

1998-99. Total collection for the current financial year ending March

2000 is expected to reach Rs. 450bn.

What is particularly noteworthy is that bulk of the mobilization has been

by the private sector mutual funds rather than public sector mutual funds.

Indeed private

Mutual funds saw a net inflow of Rs. 7819.34 crores during the first nine

months of the year as against a net inflow of Rs. 604.40 crores in the case

of public sector funds.

Mutual funds are now also competing with commercial banks in the race

for retail investors saving & corporate float money. The power shift

towards mutual funds has become obvious. The coming few years will

show that the traditional saving avenues are closing out in the current

scenario. Many investors are realizing that investments in saving account

are as good as locking up their deposits in a close. The fund mobilization

trend by mutual funds in a big way. The collection in the first half of thefinancial year 1999-2000 matches the 1998-1999. India is at first stage of

a revolution that has already peaked in U.S. boasts of an assets are not

even 10% of the bank deposits, but this trend is beginning to change.

Recent figure indicate that in the first quarter of the current fiscal year

mutual fund assets went up by 115% where as bank deposits rose by only

17% (Source: Think tank. The Financial Express. September 1999). Thisis forcing a large number of banks to adopt the concept of narrow

banking where in the deposits are kept in the Gilt and some other assets

which improves liquidity and reduces risk. The role as intermediaries

cannot be ignored. It is just that mutual funds are going to change the way

banks do business in the future.



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The discussion of the performance of mutual funds in India from the day

the concept of mutual fund took birth in India. The year was 1963. UnitTrust of India invited investors or rather to those who believed in savings,

to park their money in UTI Mutual Fund. For 30years it goaled without a

single second player. Though the 1988-year saw some new mutual fund

companies, but UTI remained in a monopolyposition.

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 was

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 Assets Under

Management of UTI was Rs. 67bn. by the end of 1987. Let me

concentrate about the performance of mutual funds in India through

figures. From Rs. 67bn. the Assets Under Management rose to Rs. 470bn.

in March 1993 and the figure had a three times higher performance by

April 2004. It rose as high as Rs. 1,540bn.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 were 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



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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 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 into the market, introduction of

open-ended funds, and paving the gateway for mutual funds to launch

pension schemes.

The measure was taken to make mutual funds the key instrument for

long-term saving. The more the variety offered, the quantitative would be

investors.

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 donts of mutual funds.



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ASSOCIATION OF MUTUAL FUND FEDERATION OF INDIA

(AMFI)

With the increase in mutual fund players in India, a need for mutual fund

association in India was generated to function as a non-profit

organization. Association of Mutual Funds in India (AMFI) was

incorporated on 22nd August 1995.

AMFI is an apex body of all Asset Management Companies (AMC),which has been registered with SEBI. Till date all the AMCs are that

have launched mutual fund schemes are its members. It functions under

the supervision and guidelines of its Board of Directors. Association of

Mutual Funds India has brought down the Indian Mutual Fund Industry to

a professional and healthy market with ethical lines enhancing and

maintaining standards. It follows the principle of both protecting and

promoting the interests of mutual funds as well as their unit holders.

The objectives of Association of Mutual Funds in India

(amfi)

The Association of Mutual Funds of India works with 30 registeredAMCs of the country. It has certain defined objectives, which juxtaposes

the guidelines of its Board of Directors. The objectives are as follows:

This mutual fund association of India maintains high professional

and ethical standards in all areas of operation of the industry.



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It also recommends and promotes the top class business practices

and code of conduct which is followed by members and related

people engaged in the activities of mutual fund and asset

management. The agencies who are by any means connected or

involved in the field of capital markets and financial services also

involved in this code of conduct of the association.

AMFI interacts with SEBI and works according to SEBI s

guidelines in the mutual fund industry.

Association of Mutual Fund in India do represent the Government

of India, the Reserve Bank of India and other related bodies on

matters relating to the Mutual Fund Industry.

It develops a team of well-qualified and trained Agent distributors.

It implements a programmed of training and certification for all

intermediaries and other engaged in the mutual fund industry.

AMFI undertakes all India awareness programmed for investors in

order to promote proper understanding of the concept and working

of mutual funds.



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CHAPTER III

Company Profile

About TATA TATA Group

Tata Asset Management Pvt. Ltd

About UTI

UTI-Asset Management Company Pvt. Ltd

UTI Bank

About FRANKLIN TEMPLETON

Franklin Templeton Investments Pvt. Ltd



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TATA Group

About the group

The Tata Group comprises 93 operating companies in seven

business sectors: information systems and communications; engineering;

materials; services; energy; consumer products; and chemicals. The

Group was founded by Jamsetji Tata in the mid 19th century, a period

when India had just set out on the road to gaining independence from

British rule. Consequently, Jamsetji Tata and those who followed him

aligned business opportunities with the objective of nation building. This

approach remains enshrined in the Group's ethos to this day.

The Tata Group is one of India's largest and most respectedbusiness conglomerates, with revenues in 2004-05 of $17.8 billion (Rs

799,118 million), the equivalent of about 2.8 per cent of the country's

GDP.

Tata companies together employ some 215,000 people. The Group's 32

publicly listed enterprises among them standout names such as Tata

Steel, Tata Consultancy Services, Tata Motors andTata Tea have a

combined market capitalization that is the highest among Indian business

houses in the private sector, and a shareholder base of over 2 million.

The Tata Group has operations in more than 40 countries across six

continents, and its companies export products and services to 140 nations.

The Tata family of companies shares a set of five core values:

integrity, understanding, excellence, unity and responsibility. These

http://www.tata.com/0_about_us/history/pioneers/jamsetji_tata.htmhttp://www.tata.com/tata_steel/index.htmhttp://www.tata.com/tata_steel/index.htmhttp://www.tata.com/tcs/index.htmhttp://www.tata.com/tata_motors/index.htmhttp://www.tata.com/tata_tea/index.htmhttp://www.tata.com/0_about_us/history/pioneers/jamsetji_tata.htmhttp://www.tata.com/tata_steel/index.htmhttp://www.tata.com/tata_steel/index.htmhttp://www.tata.com/tcs/index.htmhttp://www.tata.com/tata_motors/index.htmhttp://www.tata.com/tata_tea/index.htm


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values, which have been part of the Group's beliefs and convictions from

its earliest days, continue to guide and drive the business decisions of

Tata companies. The Group and its enterprises have been steadfast and

distinctive in their adherence to business ethics and their commitment to

corporate social responsibility. This is a legacy that has earned the Group

the trust of many millions of stakeholders in a measure few business

houses anywhere in the world can match.



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Tata Asset Management Pvt Ltd

About the Company

Tata Asset Management Ltd. is a part of the Tata group - one of India's

largest and most respected industrial group. The Tata Group is one of

India's best-known conglomerates in the private sector with a turnover of

around US $ 14.25 billion (equivalent to 2.6 % of India's GDP). Long

known for its adherence to business ethics, it is India's most respected

private business group. With 220,000 employees across 91 companies, it

is also India's largest employer in the private sector.

The Group has always believed in returning wealth to the society which it

serves. Thus, nearly two-thirds of the equity of Tata Sons, the Group's

promoter company, is held by philanthropic trusts which have created a

host of national institutions in natural sciences, medical care, energy and

the arts, and which give substantial annual grants and endowments to

deserving individuals and institutions in the areas of education, healthcare

and social upliftment.

By combining ethical values with business acumen, globalization with

national interests and core businesses with emerging ones, the Tata Group

aims to be the largest and most respected global brand from India:

fulfilling its long-standing commitment to improving the quality of life of

its stakeholders.

Tata Asset Management has over Rs 12,341.92 crore (as on 31 July 2006)

of assets under management, from over 800,000 investors. Established in

1995, it is also one of the oldest fund management companies in the

country's private sector. The key objectives for the company are to serve



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various segments of investors, retail and corporate, to identify investment

avenues with an aim of generating medium-term returns for the investors

in line with their objectives.

In its endeavor to minimize risk and maximize delivery of investment

value to its investors, Tata Asset Management has equipped itself with

the latest and the best in risk management as well as fund management

processes and techniques that are available in the world today.

The company offers a wide range of investment products for institutional

and individual investors for varied market conditions. Its schemes

encompass a comprehensive range of solutions across the risk-return

spectrum and can be classified into three categories: equity funds,

balanced funds and debt funds.

Key PersonalsMr.F.K.Kavarana (Chairman)

Mr. Ved Prakash Chaturvedi (Managing Director)

Mr. A. R. Gandhi (Director)

Mr. S. S. Marathe ( Director)

Mr. M. L. Apte ( Director)

Mr. A. Hasib (Director)



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Products

At Tata Asset Management Company, we believe that your

investment needs depend on personal and financial goals. Identifying

your financial goals is the key to achieving the big things in your life, be

it your child's education or a carefree and comfortable retired life.

After identifying and defining your financial goals, you now need to plan

for each of them in an organized and a professional way. Investment

experts around the world advise instruments like equity funds and stocks

for long-term (more than 5 years), income funds for medium-term and

liquid funds for short- term needs.

The investment matrix here depicts the entire available variety of

investment options. Those at the top provide for a greater opportunity for

long-term capital growth while those at the bottom take care of current

income and preservation of capital. Tata Mutual Fund offers a wide range

of funds for different investment instruments designed to cater to your

individual profile and life-stage.



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UTI Mutual Fund Pvt Ltd

The setting up of the Unit Trust of India (UTI) in 1963 heralded the birth

of the Indian mutual fund industry. In 1964, UTI mutual fund launched

its flagship scheme US-64 and went on to become a generic term for the

mutual fund sector till the government allowed public sector banks to

start mutual funds in 1987.

Despite being the trendsetter in the segment, the UTI mutual fund could

not sustain the initial tempo and was on the verge of a collapse in 2001,

before the government bailed it out and restructured the fund. After the

restructuring, the fund has somewhat redeemed its credibility through

professional management and a booming market.

The fund's sponsors are public sector financial giants like Life Insurance

Corporation, SBI, Bank of Baroda and Punjab National Bank. The

sponsors hold equal stakes in the asset management company, UTI Asset

Management Company Private Limited. UTI Mutual Fund remains the

largest fund in the country with assets of over Rs.35,028 crore under

management as of Aug 2006.

In 2003, UTI was divided into two parts, UTI Mutual Fund (UTI MF) and

a specified undertaking of UTI or UTI-I. UTI MF was brought under

SEBI regulations while UTI-I was kept under direct government control

since its schemes offered guaranteed returns.

UTI Mutual Fund is managed by UTI Asset Management Company

Private Limited (Estb: Jan 14, 2003) who has been appointed by the UTI

Trustee Company Private Limited for managing the schemes of UTI



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Mutual Fund and the schemes transferred /migrated from UTI Mutual

Fund.

The UTI Asset Management Company has its registered office at: UTI

Tower, Gn Block, Bandra - Kurla Complex, Bandra (East), Mumbai - 400

051 will provide professionally managed back office support for all

business services of UTI Mutual Fund (excluding fund management) in

accordance with the provisions of the Investment Management

Agreement, the Trust Deed, the SEBI (Mutual Funds) Regulations and

the objectives of the schemes. State-of-the-art systems and

communications are in place to ensure a seamless flow across the various

activities undertaken by UTI AMC.

UTI AMC is a registered portfolio manager under the SEBI (Portfolio

Managers) Regulations, 1993 on February 3 2004, for undertaking

portfolio management services and also acts as the manager and marketer

to offshore funds through its 100 % subsidiary, UTI InternationalLimited, registered in Guernsey, Channel Islands.

UTI Mutual Fund has come into existence with effect from 1st February

2003. UTI Asset Management Company presently manages a corpus of

over Rs. 34500 Crore. UTI Mutual Fund has a track record of managing a

variety of schemes catering to the needs of every class of citizenry. It hasa nationwide network consisting 70 UTI Financial Centers (UFCs) and

UTI International offices in London, Dubai and Bahrain. With a view to

reach to common investors at district level, 4 satellite offices have also

been opened in select towns and districts. It has well-qualified,

professional fund management teams, who have been highly empowered

to manage funds with greater efficiency and accountability in the sole



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interest of unit holders. The fund managers are also ably supported with a

strong in-house equity research department. To ensure better management

of funds, a risk management department is also in operation.

It has reset and upgraded transparency standards for the mutual funds

industry. All the branches, UFCs and registrar offices are connected on a

robust IT network to ensure cost-effective quick and efficient service. All

these have evolved UTI Mutual Fund to position as a dynamic,

responsive, restructured, efficient, and transparent and SEBI compliant

entity.

UTI AMC has been promoted by four sponsors each holding 25% paid-up capital :-

Bank of Borada (BOB)Life Insurance Corporation of India (LIC)Punjab National Bank (PNB) andState Bank of India (SBI)

Key People

Shri U.K.Sinha

(Chairman and Managing Director)

Shri A K Sridhar(Chief Investment Officer)

Shri Jaideep Bhattacharya(Chief Marketing Officer)

Shri Imtaiyazur Rahman(Chief Finance Officer, Company Secretary and Head HRD)

Shri S C Dikshit(Chief Legal Advisor and Head of Internal Audit and RiskManagement)



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Shri F Q Kolman(Head of Operations and Investor Service)

Shri Ashish M Ranawade

(Head of Portfolio Management Services Division)

Fund managers

A K Sridhar

Amandeep Chopra

Sanjeev Bhasin

Sanjay Ramdas Dongre

Swati Kulkarni

Siddharth Dembi

Gautami Desai

Harsha Upadhyaya



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UTI Bank

About UTI Bank

UTI Bank was the first of the new private banks to have begun operationsin 1994, after the Government of India allowed new private banks to be

established. The Bank was promoted jointly by the Administrator of the

specified undertaking of the Unit Trust of India (UTI - I), Life Insurance

Corporation of India (LIC) and General Insurance Corporation Ltd. and

other four PSU companies, i.e. National Insurance Company Ltd., The

New India Assurance Company, The Oriental Insurance Corporation and

United Insurance Company Ltd. The Bank today is capitalized to the

extent of Rs. 280.51 Crores with the public holding (other than

promoters) at 72.46 %.

The Bank's Registered Office is at Ahmedabad and its Central Office is

located at Mumbai. Presently the Bank has a very wide network of more

than 469 branch offices and Extension Counters. The Bank has a network

of over 2016 ATMs providing 24hrs a day banking convenience to its

customers. This is one of the largest ATM networks in the country. The

Bank has strengths in both retail and corporate banking and is committed

to adopting the best industry practices internationally in order to achieve

excellence.

Promoters

UTI Bank Ltd. has been promoted by the largest and the best Financial

Institution of the country, UTI. The Bank was set up with a capital of Rs.

115 crore, with UTI contributing Rs. 100 crore, LIC - Rs. 7.5 crore and

GIC and its four subsidiaries contributing Rs. 1.5 crore each.



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About the Company

Franklin Templeton Investments, global investment management major,

started their India operations in 1996 as Templeton Asset Management

India Pvt. Limited. It flagged off the mutual fund business with the

launch of Templeton India Growth Fund in September 1996.

Over the years, Franklin Templeton has emerged as one of the largest and

renowned mutual funds in the country. Franklin Templeton has over

Rs.24,198 crore under management as of Aug 2006.

Franklin Templeton Asset Management (India) Private Limited acts asthe asset management company with Templeton holding a majority of 75

per cent of the equity. The fund management is headed by Mark Mobius,

who is also a director of the AMC and one of the best fund managers in

the world.

The board of directors of the company has Gregory Johnson, president ofFranklin Templeton USA as its chairman. Deepak Satwalekar of HDFC

and Rajan Raheja are the other prominent members.

Franklin Templeton Investments is one of the largest financial

services groups in the world based at San Mateo, California USA. The

group has US$ 511.3 billion in assets under management globally (as of

Sep 30, 2006).



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Franklin Templeton has offices in 33 locations across India and

manages assets of Rs.23060.19 crores for around 19 lakh investors as of

September 30, 2006.

Franklin Templeton Investments offers more than 200 investment

products under the Franklin, Templeton, Mutual Series, Bissett and

Fiduciary Trust names globally, providing investors with the flexibility to

choose from a great variety of goalsfrom value to growth and sector

specific to internationalto meet their individual investment objectives.

The group, Frnaklin Templeton Investments is a California (USA)

based company with a global AUM of US$ 409.2 bn. (as of April 30,

2005). It is one of the largest financial services groups in the world.

Investors can buy or sell the Mutual Fund through their financial advisor

or through mail or through their website. They have Open end Diversified

Equity schemes, Open end Sector Equity schemes, Open end Hybrid

schemes, Open end Tax Saving schemes, Open end Income and Liquid

schemes, Closed end Income schemes and Open end Fund of Fundsschemes to offer.

It has over 50 years of experience in international investment

management and offices in over 20 countries services more than 10

million unit holders.

Templeton Asset Management Company, a company incorporated underthe Companies Act, 1956, is a part of the Franklin Templeton Group. The

sponsor of the Fund Templeton International Inc., is a wholly owned

subsidiary of Templeton Worldwide Inc., which in turn is a wholly

owned subsidiary of Franklin Resources Inc. The Franklin Templeton

Group is one of the world s largest Investment Management Companies.

It has over 50 years of experience in International Investment



54/92

Management with 34 offices in over 23 countries, which service over 10

million unit holders. Templeton started operations in Mumbai, India in

January 1996.Templeton in India has 8 different funds. Templeton has

eleven offices including Mumbai, Delhi, Calcutta, Pune, Chennai,

Bangalore, Cochin and Hyderabad.

Key Personnel

Gregory E. Johnson (Chairman), J. Mark Mobius, Deepak Satwalekar,

Navroz H. Seervai, P. Vaidyanathan, Rajan Raheja, Vijay C. Advani,

Vivek Kudva (President in India), B Swaminathan (Head of Operations),

Vivek Pai (Compliance Officer), Gaurav Nagori.

Fund Managers

J Mark Mobius, K. N. Siva Subramanian, Sukumar Rajah .



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The Marketing Mix

(The 4 P's of Marketing)

Marketing decisions generally fall into the following four controllable

categories:

Product

Price

Place (distribution)

Promotion

The term "marketing mix" became popularized after Neil H. Borden

published his 1964 article, The Concept of the Marketing Mix. Borden

began using the term in his teaching in the late 1940's after James

Culliton had described the marketing manager as a "mixer of

ingredients". The ingredients in Borden's marketing mix included product

planning, pricing, branding, distribution channels, personal selling,

advertising, promotions, packaging, display, servicing, physical handling,

and fact finding and analysis. E. Jerome McCarthy later grouped these

ingredients into the four categories that today are known as the 4 P's of

marketing, depicted below:

The Marketing Mix



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These four P's are the parameters that the marketing manager can control,

subject to the internal and external constraints of the marketing

environment. The goal is to make decisions that center the four P's on the

customers in the target market in order to create perceived value and

generate a positive response.



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CHAPTER IV

Analysis and interpretation of data

Findings from 4P,s among companys

Findings from data collected through

questionnaire

Suggestions



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Analyzing 4Ps

So now taking into consideration about the 4 Ps of marketing of the

AMCs taken for the study.

PRODUCT

TATA ASSET MANAGEMENT PRIVATE LIMITED

FRANKLIN TEMPLETON ASSET MANAGEMENT(INDIA) PVT. LTD.

UTI MUTUAL FUND


No. of schemes 62

No. of schemes including options 165

Equity Schemes 32

Debt Schemes 130

Equity & Debt 3

Corpus under managementRs.12474.3579 Crs. as on Oct 31, 2006

No. of schemes 55


Equity Schemes 37

Debt Schemes 88

Equity & Debt 6

Corpus under management

Rs.23920.2628 Crs. as on Oct 31, 2006


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Table 1

Chart1.

5655

62

50

52

54

56

58

60

62

PRODUCTS

UTI

FRANKLIN

TATA

Interpretation 1: Herewe can see that TATA is having more products

than the other AMCs. But TATA numbers of products increased since

TATA had put concentration on debt products more.


No. of schemes 56


Equity Schemes 31

Debt Schemes 37

Equity & Debt 8

Corpus under management

Rs: 37,789.97 Crs. As on Oct 31, 2006

AMCsPRODUCTS (INCLUDING

OPTIONS)

UTI 56(155)

FRANKLIN TEMPLETON55(139)

TATA62(165)


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PRICE

Table 2

AMCs

PRICE

LUMPSUM (MIN) SIP (MIN)

UTI 5000 1000

FRANKLIN TEMPLETON5000 500

TATA5000 1000

Interpretation 2: Franklin has an advantage over here, why because they

are having SIP (Systematic Investment Plan) starting from Rs: 500. Here

they can cater to average income group as well. So here Franklin has a

competitive advantage over other two AMCs.

PLACE

Table 3

AMCs PLACE

UTIBank Branches 469

AMC Branches 69

FRANKLIN TEMPLETONTOTAL 538

AMC Branches 33

TATA AMC Branches 39

Interpretation 3: Here UTI is having a competitive advantage over the

other two companies. As all the new generation banks deal with all the

AMCs products still the preference is given to the home brand. So here

UTI is have a superiority over the other.



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PROMOTION

Now viewing the promotional side of these mutual funds, first of

all we shall see the ways and method in common to all the 3

AMCs.

COMMON

1. Television advertisement.

2. Advertisement through print media.

3. Broachers and fund fact sheets and Banners

4. Their own official site and advertisement through other

sites.

5. During the launch of NFO (New Fund Offer) the AMCs

conduct meet in which their existing customers, VIPs,

advisors, bank officials etc are invited.

6. Direct mailers to the existing customers.

7. For to motivate the advisors in the bank as well the

employees dealing with mutual fund in stock broking

firms, the AMCs provide the some gift to them.

8. Both Franklin and TATA AMCs appoint executives in

bank branches on a temporary basis.

SPECIAL



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1. UTI has permanent staffs for to deal with mutual fund

section.

2. For to promote their product their own bank is the most

powerful tool with the UTI. As most the people involved

in share trading opens account with UTI as the

transaction processes are very quick. Another advantage

that the UTI Bank has over the other banks is that they

provide AT PAR cheque to the customers opening an SB

account with them. So which is convenient for the other

bankers take the investments.

3. UTI bare the expenses of some activities (party)

conducted by the UTI bank. On other hand the other two

AMCs bare the expenses of the activities of most of the

new generation banks, since the banker over there are the

people who generate business for them.

4. Franklin Templeton has of one the best strategy where

the company has its products where the investment can

be started from Rs: 500. Hence with this strategy is one

of the reason that they are able to grab market share and

their customer base is also large.

Analysis of Data Collected through Questionnaire



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Table1 Customer awareness about mutual funds

Response No. of respondents

Yes 30No 70

Chart1.

AWARENESS

YES

NO

Interpretation 1: In the sample taken of 100 out of HDFC customers,30% were aware of mutual funds.

Table2 Media through which customers came to

know about mutual funds

Chart 2


Media No. of responseTelevision 7

Newspaper 8

Magazines 12

Others 3


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78

12

3

0

2

4

6

8

10

12

TELEVISION

NEWSPAPER

MAGAZINE

OTHERS

Interpretation 2: Majority of the investors came to know about mutual

funds through Magazines. Some of them came to know from other

sources such as from advertisements through Television, News Papers

etc. While specifically speaking about the channels, it was found that

NDTV PROFIT is the most effective channel that would be mosteffective regarding visual media advertising.

Table3 Customers invested in mutual funds

Response No. of respondentsYes 7

No 93

Chart 3



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CUSTOMERS INVESTED IN MUTUAL FUNDS

7%

93%

YES

NO

Interpretation 3: Regarding investment it was found that only 7% of the

HDFC customers were only had done investments in mutual funds. So

this proves that there is lots of opportunities for the AMCs to exploit the

Kannur market.

Table4 Customers preference of schemes in mutual

funds

Scheme No. of respondentsEquity 79

Debt 0

Balanced 19

Chart 4

PREFERENCE FOR INVESTMENT

79%

21%

EQUITY

BALANCED

Interpretation 4: Many of the investors were interested in equity

schemes. This is because of the tremendous growth in the equity market



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in the recent past. This reveals that investors are looking for more returns.

Only the corporate investors go for debt.

Table5 Investment pattern of the customers

Investments % of respondentsShares 5%

Bank Deposits 62%

Insurance 52%

Bonds 0%

Government Securities 0%

Post Office Savings 58%

Others 18%

Chart 5

2

62

52

0 0

58

18

0

10

20

30

40

50

60

70

PATTERN OF INVESTMENTS

SHARE

BANK

DEPOSITSINSURANCE

BOND

GOVT

SECURITIESP.O.SAVINGS

OTHERS

Interpretation 5: Investment pattern reveals that the customer has more

investments in Bank deposits, Insurance and Recurring Deposits, but if

the AMCs are able to make awareness about the mutual funds and its

returns, the companies can take advantage of the Kannur market well. SIP

can be a really well substitute for RDs.



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31

56

85

0

10

20

30

40

50

60

O BJ E C T IV E S O F S AV I

INCOME

SAFETY

LIQU ID IT

TA X

SAVING

Table 6 Customers objective of saving

Objective No. of respondentsIncome 31

Safety 56

Liquidity 8

Tax Savings 5

Chart 6.A



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Chart6.B

OBJECTIVES OF SAVINGS

31, 31%

56, 56%

8, 8% 5, 5%

INCOME

SAFETY

LIQUIDITY

TAX SAVING

Interpretation 6: From the objectives of investments of the customers

56% of the customers are looking forward for the safety again here there

is much scope for SIPs, since the risks for SIPs are very low. 31% of the

customers are looking forward for the income generation, so in addition

to the existing customers who have invested in mutual fund there is 24%

more customers who are really interested in income generation. 8% of the

customers are looking for liquidity, as mutual fund can be exited at any

time this category of customers are also can be tapped out. And now 5%

of the customers are looking forward for tax benefit. Here the tax benefit

funds have greater importance.

Table 7 Factors influencing investments

Factors No: of Respondent Performance of fund 22

Advertisement 1

Recommendation of Advisors 6

Broachers 1

Chart 7



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FACTORS INFLUENCING INVESTMENT

22, 74%

1, 3%

6, 20% 1, 3%

PERFORMANCE OF

FUND

ADVERTIDSEMENTS

RECOMMENDATION

BROACHERS

Interpretation 7: 74% of the investors decides their investment in

mutual fund based on the performance of the fund and 20% based on

the recommendations of the advisors. Here advertisements of the

AMCs should mainly concentrate on the performance of the rather

than making it colorful and just giving vague about the funds.

Table 8 Knowledge about Mutual Fund schemes

Response No: of Respondent Not at all 70

Fairly 19

Very Good 11

Chart 8



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KNOWLEDGE ABOUT MUTUAL FUND

70%

19%

11%

NOT AT ALLFAIRLY

VERY GOOD

Interpretation 8: Knowledge about the mutual for is very low among

the customers in Kannur (81%). Hence AMCs should give moreimportance for to create awareness rather than directly going into for

sales.

Table 9 Preference for Equity schemes

Preferences No: of Respondent Recommendations of Advisors 18

High Return 8

Low Loads 4

Chart 9



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PREFERENCE FOR EQUITY FUNDS

18, 60%8, 27%

4, 13% RECOMMENDATION

OF ADVISORSHIGH RETURNS

LOW LOADS

Table 10 Reason to choose Mutual Fund

Response No. of respondents

Not at all 1

High Returns 7Liquidity 5

Transparency 4

Diversification 13

Chart 10



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REASON TO CHOOSE MUTUAL FUND

1, 3%7, 23%

5, 17%4, 13%

13, 44%

NOT AT ALL

HIGH RETURNS

LIQUIDITY

TRANSPARENCY

DIVERSIFICATION

Interpretation 10: 44% of the customers will choose mutual fund for

their investment, since its more risk less than share trading and mutual

funds are having diversification. 23% would like to go for more returns

since they are of the reason that its gives more returns than the fixed

deposits and RD of post office.

Table 11 Customers preference regarding SIP and

Lump sum

Response No. of respondentsSIP 92

LUMPSUM 8

Chart 11



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8%

92%

LUMPSUM

SIP

Interpretation 11: At present market condition (14000+ points) 92% of

the customers would like to go for SIP (Systematic Investment Plan).

Since risk factor is less in the case of SIP compared to lump sum

investment.

Table 12 Category of customers investing in Mutual

Fund (Employment)

Category No: of respondent Self Employed 4

Employed 1

Retired 2

Chart 12



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CATAGORY OF CUSTOMERS

4, 57%2, 29%

1, 14%

SELF EMPLOYED

RETIRED

EMPLOYED

Interpretation 12: In Kannur its found that business people are

investing in mutual funds (57%). And following them its the retired

people going for investment (29%).

Table 13 Category of customers invested/interested in

Mutual Fund (Age)

Age No of Response

20-30 3

30-40 9

40-50 11

50-60 5

60< 2

Chart 13. A



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AGE CATEGORY

3, 10%

9, 30%

11, 36%

5, 17%2, 7%

'20-30

30-40

40-50

50-60

60

Documents

Deepak (Axis) Project Report