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INTRODUCTION

COMPANY PROFILE


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UNIT TRUST OF INDIA MUTUAL FUND

Vision

To be the most preferred Mutual Fund.

Mission

To offer customer-oriented, innovative products by leveraging technology to provide superior

returns, achieve the highest service standards and attain sustained growth levels through

principled human resources striving in a focused, transparent ethical manner to exceed investor

expectations.

Overview

UTI Mutual Fund has come into existence with effect from 1st February 2003. UTI Asset

Management Company presently manages 42 NAV based domestic SEBI compliant schemes

UTI Mutual Fund has a track record of managing a variety of schemes catering to the needs of

every class of citizenry over a period of 39 years. It has a nationwide network consisting 54

branch offices, 3 UTI Financial Centers (UFCs) and representative offices in Dubai and

London. With a view to reach to common investors at district level, 18 satellite offices have also

been opened in select towns and districts. It has 2400 committed employees and over 10,000

active agents and 266 chief representatives to sell and service its schemes. It has a well-

qualified, professional fund management team, who has been highly empowered to manage

funds with greater efficiency and accountability in the sole 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 Mutual Fund has recently opened out yet another investor friendly vista for its investors on

the Internet i.e. MyUTI whereby an investor can transact through the Internet. With this the


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investors need not visit UTI offices, or write letters for non monetary changes, not involving

any document submission for transactions viz. change of address, bank particulars mandate

(mode of payment), update income tax details and view, download and print the latest statement

of account (SoA).

As on January 31, 2003, almost all schemes/funds have outperformed the respective benchmark

indices over various periods. These schemes have distributed income/bonuses consistently.

Over and above the faith reposed by the investor community on UTI has also been reflected by

fresh sales mobilisation over Rs.5,200 crores in the last 7 months, commencing 1st July 2002.

US 95 has been awarded with CNBC Mutual Fund Award for the year for the best performance

in the open-end balance fund category under the three year segment.

UTI Mutual Fund is poised to meet the challenges of the future with its dedicated human

resources, vast reservoir of funds and 38 year track record. Speed, Quality and Transparency is

the edifice on which it desires to stride ahead for the benefit of its investors.

Sponsors

1. State Bank of India

2. Punjab National Bank

3. Bank of Baroda

4. Life Insurance Corporation of India

Product Variety/Range

Apart from equity, debt and balanced schemes, UTI also manages schemes aimed at meeting

specific needs like:

* Low cost insurance cover (ULIP).

Monthly income needs of retired persons and women.

* Income and liquidity needs of religious and charitable institutions and trusts.* Building up funds to meet cost of higher education and career plans for children.

* Future wealth and income needs of girl child and women.

* Building savings to cover medical insurance at old age.

* Wealth accumulation to meet income needs after retirement.


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Reaching Investors

Individual household investors account for 99% of UTI's investor accounts and about 65% of

unit capital of UTI schemes. Products are distributed through a marketing force of about 67,000commission-based canvassing agents trained to explain the products and provide related service

support to investors.

Today, these agents are supervised by 266 Chief Representatives who guide the investors,

organize, train and motivate the agents in their respective areas of operation(specifieddistricts).

Investors under various schemes of UTI are now serviced through 54 UTI branches, 183

collection centers and offices of 4 Registrar and Transfer Agencies appointed by UTI. Besides

there are 57 franchises offices, which accept applications and distribute certificates to unit

holders. UTI has set up its own associate company, UTI-Investor Services Limited (UTI-ISL),

UTI is also currently implementing a technology upgradation program, involving networking

of on-line computer systems at UTI's offices, and offices of Registrars and Transfer Agencies.

This would enable UTI to improve service quality significantly.

UTI inaugurated its first Touch Screen Kiosk on 29th October 2001. In the first phase, static

information such as NAV, sale, repurchase prices of the schemes, product details, objective of

the scheme and portfolios are available on the Touch Screen Kiosk at UTIs Lotus Court UFC.

In the second phase, online investor query for various details on the investment made with UTI,

interfacing with investor databases on various schemes using the existing browser based query

system or generic system etc., will be introduced. In the third and final phase, integration would

be started on completion of the data migration of all the schemes into the Generic System

Database. It would enable the investing public to do online financial transactions such as Sale,

Transfer, Repurchase, etc. of units using personalized Smart Cards / Debit Cards / Credit Cards

on various UTI schemes.

UTI publishes weekly / daily NAVs for all its listed schemes and offers a prospectus for every

scheme. It also publishes half yearly results for all schemes and releases information on

portfolio as also largest shareholding for growth schemes and Unit Scheme 1964. UTI adheres


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to disclosure requirements specified by SEBI. As on June 30, 2001 out of 74 domestic schemes,

68 are fully compliant with SEBI guidelines.

A Conglomerate with a vision

As a distinctive financial institution, UTI manages funds raised through common investible

vehicles and at the same time provides companies financial services, including underwriting.

To create a diversified financial conglomerate and to meet investors varying needs under a

common umbrella, UTI has set up a number of associate companies in the field of banking,

securities trading, investor servicing, investment advice and training.

* UTI Bank Ltd (1994)--the first private sector bank to be set up under RBI guidelines.

* UTI Securities Exchange Ltd (1994)--the first institutionally sponsored corporate stock-

broking firm.

* UTI Investor Services Ltd (1993)--the first institutionally sponsored Registrar and Transfer

agency.

* UTI Institute of Capital Markets (1989)--the first such institute in Asia, excluding Japan.

* UTI Investment Advisory Services Ltd (1988)--the first Indian Investment Advisor registered

with SEC, US.

Global links

UTI pioneered the off-shore fund investment in Indian securities. The India Fund, launched in

1986 as a closed-end fund, became a multi-class open-ended fund in 1994. Thereafter, in 1988,

UTI floated the India Growth Fund which is listed on the New York Stock Exchange. BothIndia Fund and India Growth Fund have increased their corpus through rights issues. Besides

the Columbus India Fund, launched in 1994, UTI launched the India Access Fund, an Indian

UTI International Limited is a 100% subsidiary of Unit Trust of India, registered in the island of

Guernsey. This company was set up with the primary objective of administration and marketing

of various offshore funds managed by UTI as also to act as the management company for these


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funds as required by the Guernsey Law. UTI International Ltd has an office in London to

market UTI's offshore funds to institutional clients in UK, Europe and USA. It is also

responsible for developing new products as well as new business opportunities of UTI. This

office also looks after ongoing investor relations with foreign investors and has succeeded in

greatly improving communication between UTI and its clients and distributors abroad. UTI

International Ltd has played an important role in launching three new offshore funds of UTI -

the India IT Fund Ltd, To cater to various needs of NRI investors based in the Gulf region, UTI

has a branch office at Dubai. The branch office covers all the six GCC countries viz. UAE,

Oman, Kuwait, Saudi Arabia, Qatar and Bahrain. The Dubai office of UTI Acts as a liaison

office between our NRI investors in the Gulf and UTI offices all over India. Besides providing

information on current and new schemes of UTI, it also co-ordinates with UTI offices in India

for all after-sale requests of unitholders/agents.

In the recent past, UTI has extended its support to the development of Unit Trusts in other

developing countries, like Sri Lanka and Egypt. Besides providing technical advise, UTI also

participated in the equity capital of the Unit Trust Management Company of Sri Lanka.

Research strength

UTI has its own research set-up to deal with different areas. The areas of research analysis cover

macro-economy, capital markets, financial sector and mutual funds. Industry and corporate

performance are also covered by Equity Research.

UTI Institute of Capital Markets conducts training programmes for the financial community and

helps to develop modern and scientific approach towards investment management. It also serves

as a forum to discuss ideas and issues relevant to the capital market besides publishing

research papers relating to capital market.


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LIC MUTUAL FUND

The Trustees of the LIC Mutual Fund have exclusive ownership of Trust Fund and are vested

with general power of superintendence, discretion and management of the affairs of the Trust.

Jeevan Bima Sahayog Asset Management Company Ltd. was formed on 20th April 1994 in

compliance with the Securities and Exchange Board of India (Mutual Funds) Regulations, 1993.

The Company commenced business on 29th April 1994. The Trustees of LIC Mutual Fund have

appointed Jeevan Bima Sahayog Asset Management Company Ltd as the Investment Managers

for LIC Mutual Fund. The Trustees are responsible for appointing a Custodian. The Trustees

should also ensure that the activities of the Trust and the Asset Management Company are in

accordance with the Trust Deedand the SEBI Mutual Fund Regulations as amended from time

to time.

The investors under the schemes can obtain a copy of the Trust Deed, the text of the concerned

heme as also a copy of the Annual Report, on a written request made to the Jeevan Bima Sahayogset Management Company Limited at a nominal price of Rs. 10/-.

The data of the investors like their names, certificate and folio numbers, addresses etc., are stored

in electronic form by our registrars duly appointed by us. We offer a variety of after sales services.

All kinds of services are basically handled by our registrars and accordingly the investors have to

write to the registrars in the first instance. We handle services at our Area Centers also, but that

activity is restricted to LIC Bond Fund and Government Securities Fund, the open ended funds.

It is very essential to quote the Certificate Number , Folio Number and Scheme Name as they

appear in the certificate in case of any complaint / correspondence.

For all payments like premature encashment / redemption , a proper discharge either at the back of

the unit certificate or through a separate discharge form if blank discharge form is not provided at

the back of the certificate duly signed by all the holders and witnessed shall be given. Submission

of the unit certificate or in lieu of that a original valid proof of holding at the specified offices is a

must for settlement of such payments.


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In case of repurchases , the unused warrants including the warrant pertaining to the month in which

the repurchase is preferred shall be sent along with the duly discharged certificate.

The performance of our registrars is closely and regularly monitored by a team of officials of the

Corporate Office.

The investors may register their complaints with the Corporate Office , in respect of any of the

listed after sales service items herein , if they do not get the required service within reasonable timefrom the respective registrars.

After sales service

CHANGE OF ADDRESS

CORRECTION/CHANGE OF NAME IN THE CERTIFICATE

NON-RECEIPT OF CERTIFICATE

NON-RECEIPT OF DIVIDEND/REDEMPTION/REPUTCHASE/REFUND

WARRANTS.

REDEMPTION

REPURCHASE

STATEMENT OF ACCOUNTS

REVALIDATION / CORRECTION OF WARRANTS

CHANGE OF NOMINEE

SPLIT OF UNIT CERTIFICATES


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REGISTRATION/CANCELLATION OF LIEN

DEATH CLAIMS

LOSS OF UNIT CERTIFICATES

LOSS OF WARRANTS

BANK MANDATE

TRANSFER OF HOLDING


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ICICI MUTUAL FUND

Prudential ICICI Asset Management Company, (55%:45%) a joint venture betweenPrudential

Plc, UK's leading insurance company andICICI Bank Ltd, India's premier financial institution.

The joint venture was formed with the key objective of providing the Indian investor mutual

fund products to suit a variety of investment needs. The AMC has already launched a range of

products to suit different risk and maturity profiles.

Prudential ICICI Asset Management Company Limited has a networth of about Rs. 69.89 crore

(1 crore = 10 million) as of March 31, 2002. Both Prudential and ICICI Bank Ltd have a

strategic long-term commitment to the rapidly expanding financial services sector in India.

Prudential ICICI Mutual Fund launches SPIcE

Prudential ICICI today introduced SPIcE, the countrys first Exchange

Traded Fund (ETF) to track the BSE-SENSEX.

January 2, 2003, Mumbai: SPIcE is a hybrid product having features of both an open-

ended mutual fund such as diversification, lower transaction costs as well as those of an

exchange-listed security like intra day trading, listing at the BSE/DSE.

SPIcE can be bought and sold like any equity share on the BSE terminal through a

stockbroker. The minimum lot size is one unit of SPIcE, effectively; a retail investor can

buy one SPIcE unit and hold the same in his Demat account just like any other security.

The price of one SPIcE unit will be equal to 1/100th of SENSEX value. For example, if the

current SENSEX is at 3100, the price of one SPIcE unit will be Rs. 31. The scheme will be

managed by Prudential ICICI and listed on both the BSE and DSE.

Key Advantages of SPIcE

Instant exposure to a well-diversified portfolio of 30 quality stocks forming part of

SENSEX
http://www.prudential.co.uk/http://www.prudential.co.uk/http://www.prudential.co.uk/http://www.prudential.co.uk/http://www.icicibank.com/http://www.icicibank.com/http://www.icicibank.com/http://www.icicibank.com/http://www.prudential.co.uk/http://www.prudential.co.uk/


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Buying and selling of SPIcE units on a real-time basis just like any other equity

share

Since once SPIcE unit is equal to 1/100th of SENSEX, the minimum investment

for a retail investor is as low as Rs. 31 (3100/100)

The price of each unit of SPIcE would move in tandem with the SENSEX making

the whole process extremely transparent

No sales load, normal brokerage commissions and low management and sponsor

fees apply

Key Applications of SPIcE

Equitizing cash

Cash flow management

Diversifying Sector Exposure

Shorting or Hedging Index Exposure

Arbitrage between SPIcE and basket trading and between SPIcE and Index Futures

An important feature of SPIcE like most Exchange Traded Funds is the creation and

redemption process. While the majority of the investors will trade SPIcE units through

their stockbrokers on the stock exchange, Authorized Participants (i.e. brokers, institutions,

etc.) will be eligible to create or redeem SPIcE units directly with the Fund by exchanging

a basket of SENSEX securities. Such a process helps in maintaining parity between the

traded price of a SPIcE unit and its NAV.

Globally, there are above 250 ETFs listed and traded across the world with assets under

management of above US$ 100 billion. In the US, the major ETFs include SPDRs (linkedto S&P 500 Index), QQQs (linked to Nasdaq-100 Index and Diamonds (linked to DJIA).

More than 60% of the trading volume on American Exchanges is in ETFs.

Prudential ICICI Asset Management Company (PIAMC) is investment manager to the

largest private sector mutual fund in the country, the Prudential ICICI Mutual Fund.


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PIAMC enjoys the strong parentage of ICICI Bank Ltd., a well-known and trusted name in

financial services in India and Prudential PLC, one of UKs largest players in the

Insurance and fund management business. PIAMC has 26 centers all over the country to

service investors and enjoys the trust of over 5.5 Lakh investors. Its diverse product

portfolio comprises of debt, equity & balanced funds.

Prudential ICICI Asset Management has become India's first Private Sector Mutual Fund

to cross the milestone of managing over Rs. 10,000 Crore of Assets. As on the 30th of

November 2002 Prudential ICICI manages assets worth Rs.10258.80 Crore and enjoys the

trust of over 5,50,000 investors.

December 12, 2002, Mumbai: Ever since inception, Prudential ICICI has focused on

listening to the customer and has believed in establishing and maintaining a long-term

relationship with its customers. Prudential ICICI has invested time and effort to understand

customer's investment needs, and this understanding of the customer has helped it in

tailoring products and services to suit his needs.

Prudential ICICI's investment philosophy of rigorous analysis coupled with strict control

measures has also ensured consistent product performance over the years. Along with the

debt funds, PruICICI equity funds like Power and Growth Plan have performed very well

over the last one-year. Mr. Dileep Madgavkar, Chief Investment Officer says, "The

performance of the PruICICI equity funds is an endorsement of Prudential ICICI's bottom

up and rigorous process driven approach to managing funds. Investment decisions are

taken by the investment committee, which takes decisions based on detailed equity

research and regular meetings with a company's management". On the debt side, PruICICI

has a separate Credit Rating Analyst, who monitor's the quality of the assets over and

above the ratings given by credit rating agencies.

Mr. Shailendra Bhandari, Managing Director of Prudential ICICI AMC says, "From the

very beginning we made the customer the center of all our efforts. We set up 26 customer

service centers across the country and launched a range of products suited to the investors

needs. Our vision is to provide the highest levels of customer delight among financial


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service providers in the country."

Prudential ICICI's customer centric approach begins with educating and training its agents

and distributors to understand customer requirements and counsel them accordingly. Over

the years, PruICICI has provided innovative services like PruICICI InstaCall (a 24 hour

call center enabling investors across India to update their account information, sell and

switch between their investments in various schemes), PruICICI InstaCheque (over the

counter redemptions) and www.pruicici.com (a transaction enabled website with

customized financial planning tools), designed to increase customer convenience and

further empower the customer.

Prudential ICICI has established a multi-channel approach to the distribution of its various

products and has today an extensive network of customer service centers in 26 cities and

over 12,000 customer contact points, comprising partner banks, financial distribution

houses and financial advisers.

Says Pankaj Razdan, Senior Vice President - Sales, Distribution and Marketing, "Our

extensive distribution network and the strength of our relationships have given us a leading

edge in India's upcoming MF industry. A major part of the credit for our success goes to

our channel partners."

Prudential ICICI has always been at the forefront of initiatives to educate the Indian

customer about Mutual Funds. PruICICI has invested in communication designed to

answer the customers queries about Mutual Funds, and has done this throughout the ups

and downs of the economy and the markets. Beginning June 2002, Prudential ICICI

undertook customer education using, among other media, Television, with the aim of

reaching ever-larger sections of customers.

Prudential ICICI is today a brand to be reckoned with in the Indian financial sector, and its

advertising in the past has won numerous accolades and mentions, such as the 2001 ABBY

Award for Best Internet Advertising. Using various media effectively has been the

hallmark of PruICICI advertising campaigns. However it does not just advertise, it actively


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listens and seeks customer feedback. PruICICI has institutionalized real time Brand

Awareness monitors and has undertaken Usage & Attitude studies on investment options.

These measures have enabled PruICICI to receive and implement customer feedback

proactively.

Prudential ICICI Asset Management Company (PIAMC) is investment manager to the

largest private sector mutual fund in the country, the Prudential ICICI Mutual Fund.

PIAMC enjoys the strong parentage of ICICI Bank Ltd., a well-known and trusted name in

financial services in India and Prudential PLC, one of UK's largest players in the Insurance

and fund management business. PIAMC has 26 centers all over the country to service

investors and enjoys the trust of over 5.5 Lakh investors. Its diverse product portfoliocomprises of debt, equity & balanced funds.

Life Insurance Corporation of India set up LIC Mutual Fund on 19th June 1989 and

contributed Rs. 2 Crores towards the corpus of the Fund. LIC Mutual Fund was constituted

as a Trust in accordance with the provisions of the Indian Trust Act, 1882. The settlor is

not responsible for the management of the Trust. The settlor is also not responsible or

liable for any loss or shortfall resulting in any of the schemes of LIC Mutual Fund.


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ESCORTS MUTUAL FUND

PRODUCTS

ESCORTS INCOME PLAN

Open Ended Income Fund available for investment at NAV every business day throughout the

year. Exit Load of. 50%Date of Commencement: 18th May, 1998 Fund Manager: K.K. Mital,

B.Com (Hons), FCA with 20 years' experiences.

Investment Options:

Growth Option for Capital Appreciation.

Dividend Option for Regular Income Monthly Dividend payable from November, 1999 (Record

Date: 21st of every month).Minimum Investment: Rs. 1,000/-Also Available: Systematic

Investment Plan (SIP), Systematic Withdrawal Plan (SWP), Dividend Re-Investment Plan

(DRIP) and Salary Savings Plan (SSP).

LIQUIDITY

Full or partial withdrawal at NAV possible on every business day throughout the year. No TDS

on redemption. An Exit Load of 0.50%

SECURITY

Diversified Portfolio of Corporate Debentures/ Bonds and Money Market Instruments. Portfolio

consists mainly of eligible investments for Provident Fund and Superannuation Trusts.

Valuation: As per CRISIL Bond Valuer.

TAX BENEFITSfor Resident Investors (under Income -tax Act, 1961)Dividend Income (under Dividend Option)

is tax free under section 10(33). Long Term Capital Gains (under both Options) enjoy

indexation benefit and lower tax rate under sections 48 and 112. Investments in units by


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religious & charitable trusts is an eligible investment under section 11(5) of the Act., read with

rule 17C of the Act.


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ESCORTS TAX PLAN

NATURE OF THE SCHEME

An Open-Ended Equity Linked Saving Scheme for investment at NAV on every business day.

LOAD

No Entry/Exit Load.

DATE OF COMMENCEMENT

1st April, 2001

INVESTMENT OPTIONS


Dividend Option for Regular Income.

Minimum Investment: Rs. 1,000/-

Also Available: Systematic Investment Plan (SIP), Systematic Withdrawal Plan (SWP),

Dividend Re-Investment Plan (DRIP) and Salary Savings Plan (SSP).

TAX BENEFITS

Tax free dividend

Investment in Units by religious and charitable trusts is an eligible investment under

section 11(5) of the Income-Tax Act 1961 read with rule 17C of the Act.

Investments in Units under the scheme are exempt from wealth-tax.

ESCORTS GROWTH PLAN

NATURE OF THE SCHEME:

Open-Ended Growth Scheme available for investment at NAV on every business day.

Load: Entry Load 1.50%. Exit Load Nil

Date of Commencement:21st March, 2001


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Investment Objective: An Avenue to invest predominantly in a well diversified portfolio of

Equity Shares with growth potential. The primary objective is to generate capital appreciation

and at the same time providing continuing liquidity.

Asset Allocation:

Equity and related instruments: 80-100%

Fixed Income Securities and money market instruments

Investment Options:



Minimum Investment: Rs. 5,000/- and in the multiples of Rs. 1,000/-


Dividend Re-Investment Plan (DRIP) and Salary Saving Plan (SSP)

Liquidity: Full or partial withdrawal possible at NAV on every business day. No TDS on

redemption.

ESCORTS GILT PLAN



Load: No entry or exit Load


Investment Objective: A scheme that provides investors with an avenue to invest in government

securities, with zero risk. The primary objective is to generate capital appreciation while at the

same time providing continuing liquidity.

Asset Allocation:

Government Securities: 80-100%

Money Market Instruments: 0-20%

Investment Options:




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Minimum Investment: Rs. 5,000/- and in the multiples of Rs. 1,000/-




redemption.

ESCORTS BALANCED FUND



Load: Entry Load 1.25%. Exit Load - NIL.


Investment Objective: An avenue to invest in a diversified portfolio of good quality equity and

debt instruments. The primary objective is to generate long term capital appreciation and current

income while providing continuing liquidity along with high and commensurate safety.

Asset Allocation:

Equity and equity related instruments: 60%

Debt Instruments and Govt. Bonds etc.: 40%

Investment Options:



Minimum Investment: Rs. 1,000/- and in multiples thereof




redemption.


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INTRODUCTIONPRODUCT PROFILE


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PRODUCT PROFILE

MUTUAL FUND - A GLOBALLY PROVEN INVESTMENT

Worldwide, the Mutual Fund, or Unit Trust as it is called in some parts of the world, has a long

and successful history. The popularity of the Mutual Fund has increased manifold. In developed

financial markets, like the United States, Mutual Funds have almost overtaken bank deposits

and total assets of insurance funds.

In India, the Mutual Fund industry started with the setting up of Unit Trust of India in 1964.

Public sector banks and financial institutions began to establish Mutual Funds in 1987. The

private sector and foreign institutions were allowed to set up Mutual Funds in 1993. This fast

growing industry is regulated by the Securities and Exchange Board of India (SEBI).

WHAT IS A MUTUAL FUND?

A Mutual Fund is a trust that pools the savings of a number of investors who share in common

financial goal. Anybody with an investible surplus of as little as a few thousand rupees can

invest in Mutual Funds. These investors buy units of a particular Mutual Fund scheme that has a

defined investment objective and strategy.

The money thus collected is then invested by the fund manager in different types of securities.

These could range from shares to debentures to money market instruments, depending upon the

scheme's stated objectives. The income earned through these investments and the capital

appreciation realized by the schemes 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 to invest in a diversified, professionally managed basket of

securities at a relatively lower cost.


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TYPES OF MUTUAL FUND SCHEMES

There are a wide variety of Mutual Fund Schemes that cater to your needs, whatever to your

age, financial position, risk tolerance and return expectations. Whether as the foundation of your

investment programme or as a supplement, Mutual Fund schemes can help you meet your

financial goals.

(A)By Structure

Open-Ended Schemes

These do not have a fixed maturity. You deal directly with the Mutual Fund for your

investments and redemptions. The key feature is liquidity. You can conveniently buy and sell

your units at net asset value ("NAV") related prices.

Close-Ended Schemes

Schemes that have a stipulated maturity period (ranging from 2 to 15 years) are called close-

ended schemes. You can invest directly in the scheme at the time of the initial issue and

thereafter you can buy or sell the units of the scheme on the stock exchanges where they are

listed. The market price at the stock exchange could vary from the scheme's NAV on account of

demand and supply situation, unit holders expectations and other market factors. One of the

characteristics of the close-ended scheme is that they are generally traded at a discount to NAV;

but closer to maturity, the discount narrows.

Some close-ended schemes give you an additional option of selling your units directly to the

Mutual Fund through periodic repurchase at NAV related prices. SEBI regulations ensure that at

least one of the two exit routes is provided to the investor.

Interval Schemes

These combine the features of open-ended and close-ended schemes. They 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 Investment Objective

Tax Saving Schemes

These schemes offer tax rebates to the investors under tax laws as prescribed from time to time.

This is made possible because the Government offers tax incentives for investment in specific

avenues. For example, Equity Linked Saving Schemes (ELSS) and Pension Schemes.

Recent amendments to the Income Tax Act provide further opportunities to investors to save

capital gains by investing in Mutual Funds. The detail of such tax savings are provided in the

relevant offer documents.

Ideal for:

Investors seeking tax rebates.

Special Schemes

This category includes index schemed that attempt to replicate the performance of a particular

index such as the BSE Sensex or the NSE 50, or the industry specific schemes(which invest in

specific industries) or sectorel schemes(which invest exclusively in segments such as 'A' Group

shares or initial public offerings).

Index fund schemes are ideal for investors who are satisfied with a return approximately equalto that of an index.

Sectoral fund schemes are ideal for investors who have already decided to invest in a particular

sector or segment.

Keep in mind that anyone scheme may not meet all your requirements for all time. You need to

place your money judiciously in different schemes to be able to get the combination of growth,

income and stability that is right for you.

Remember, as always, higher the return you seek, higher the risk you should be prepared to

take.


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WHY SHOULD YOU INVEST IN MUTUAL FUNDS?

The advantages of investing in Mutual Fund are:

1. Professional Management. You avail of the services of experienced and skilled

professionals who are backed by a dedicated investment research team which analyses

the performance and prospects of companies and selects the suitable investments to

achieve the objective of the scheme.

2. Diversification. Mutual Funds invest in a number of companies across a broad cross-

section of industries and sectors. This diversification reduces the risk because seldom do

all stocks decline in the same time and in same proportion. You achieve thisdiversification through a Mutual Fund with far less money than you can do on your own.

3. Convenient Administration.Investing in a Mutual Fund reduces paper work and

helps you avoid many problems such as bad deliveries, delayed payments and

unnecessary follow up with brokers and companies. Mutual Fund saves your time and

makes investing easy and convenient.

4. Return Potential. Over a medium to long term, Mutual Funds have the potential to

provide a higher return as they invest in a diversified basket of selected securities.

5. Low Costs. Mutual Funds are a relatively less expensive way to invest compared to

directly investing in the capital markets because the benefits of scale in brokerage,

custodial and other fees translate into lower costs for investors.

6. Liquidity. In open-ended schemes, you can get your money back promptly at net asset

value related prices from the Mutual Fund itself. With close-ended schemes, you can sell

your units on a stock exchange at a prevailing market price or avail of the facility of

direct repurchase at NAV related prices which some close-ended and interval schemes

offer you periodically.

7. 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.


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8. Flexibility. Through features such as regular investment plans, regular withdrawal

plans and dividend reinvestment plans, you can systematically invest or withdraw funds

according to your needs and convenience.

9. Choice of Schemes. Mutual Funds offer a family of schemes to suit your varyingneeds over a lifetime.

10.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.

UNDERSTANDING AND MANAGING RISK

All investments whether in shares, debentures or deposits involve risk: share value may go

down depending upon the performance of the company, the industry, state of capital markets

and the economy; generally, however, longer the term, lesser the risk; companies may default in

payment of interest/principal on their debentures /bonds/deposits; the rate of interest on an

investment may fall short of the rate of inflation reducing the purchasing power.

While risk cannot be eliminated, skillful management can minimise risk. Mutual Funds help to

reduce risk through diversification and professional management. The experience and expertise

of Mutual Fund managers in selecting fundamentally sound securities and timing their

purchases and sales, help them to build a diversified portfolio that minimise risk and maximises

returns.

HOW TO INVEST IN MUTUAL FUNDS?

Step One - Identify your investment needs.

Your financial goals will vary, based on your age, lifestyle, financial independence, family

commitments, level of income and expenses among many other factors. Therefore, the first step

is to assess your needs. Begin by asking yourself these questions:

1. What are my investment objectives and needs?


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Probable Answers: I need regular income orneed to buy a home orfinance a wedding

oreducate my children ora combination of all these needs.

2. How much risk I am willing to take?

Probable Answers: I can only take a minimum amount of riskorI am willing to accept

the fact that my investment value may fluctuate orthat there may be a short-term loss in

order to achieve a long-term potential gain.

3. What are my cash flow requirements?

Probable Answers: I need a regular cash flow or I need a lumpsum amount to meet a

specific need after a certain period or I don't require a current cash flow but I want to

build my assets for the future.

By going through such an exercise, you will know what you want out of your investment and

can set the foundation for a sound Mutual Fund investment strategy.

Step Two - Choose the right Mutual Fund.

Once you have a clear strategy in mind, you have to choose which Mutual Fund and scheme

you want to invest in. The offer document of the scheme tells you its objectives and provides

supplementary details like the track record of other schemes managed by the same Fund

Manager. Some factors to evaluate before choosing a particular Mutual Fund are:

The track record of performance over the last few years in relation to the appropriate

yardstick and similar funds in the same category.

How well the Mutual Fund is organised to provide efficient, prompt and personalised

service.

Degree of transparency as reflected in frequency and quality of their communications.

Step Three - Select the ideal mix of Schemes.

Investing in just one Mutual Fund scheme may not meet all your investment needs. You may

consider investing in a combination of schemes to achieve your specific goals.

The following tables could prove useful in selecting a combination of schemes that satisfy your

needs.


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AGGRESSIVE PLAN

AGGRESSIVE PLAN

Money Market Schemes 5 %

Income Schemes 10-15%

Balanced Schemes 10-20 %

Growth Schemes 60-70 %

MODERATE PLAN


Income Schemes 20 %


Growth Schemes 30-40 %

CONSERVATIVE PLAN


Income Schemes 50-60 %


Growth Schemes 10 %


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Step Four - Invest regularly

For most of us, the approach that works best is to invest a fixed amount at specific intervals, say

every month. By investing a fixed sum every month, you buy fewer units when the price is

higher and more units when the price is low, thus bringing down your average cost per unit.

This is called rupee cost averaging and is a disciplined investment strategy followed by

investors all over the world. With many open-ended schemes offering systematic investment

plans, this regular investing habit is made easy for you.

Step Five - Keep your taxes in mind

If you are in a high tax bracket and have utilised fully the exemptions under section 80L of the

Income Tax Act, investing in growth funds that do not pay dividends might be more tax

efficient and improve your post-tax return.

If you are in a low tax bracket and have not utilised fully the exemptions available under

Section 80L of the Income Tax Act, selecting funds paying regular income could be more tax

efficient. Further, there are other benefits available for investment in Mutual Funds under the

provisions of the prevailing tax laws.

You may therefore, consult your tax advisor or Chartered Accountant for specific advice.

Step Six - Start early

It is desirable to start investing early and stick to a regular investment plan. If you start now,

you will make more than if you wait and invest later. The power of compounding lets you earn

income on income and your money multiplies at the compounded rate of return.


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Step Seven - The final step

All you need to do now is to get a touch with a Mutual Fund or your agent/broker and start

investing. Reap the rewards in the years to come. Mutual Funds are suitable for every kind of

investor - whether starting a career or retiring, conservative or risk-taking, growth-oriented or

income seeking.


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AN INTRODUCTION OF NATIONAL SECURITY DEPOSITORY

LIMITED

Basic Services of NSDL

Under the provisions of the Depositories Act, NSDL provides various services to investors and

other participants in the capital market like, clearing members, stock exchanges, banks and

issuers of securities. These include basic facilities like account maintenance, dematerialization,

rematerialization, settlement of trades through market transfers, off market transfers & inter-

depository transfers, distribution of non-cash corporate actions and nomination/ transmission.

The depository system, which links the issuers, depository participants (DPs), NSDL and

clearing corporation/ clearing house of stock exchanges, facilitates holding of securities in

dematerialized form and effects transfers by means of account transfers. This system which

facilitates scripless trading offers various direct and indirect benefits to the market participants.

Special Services

Depository is a facility for holding securities, which enables securities transactions to be

processed by book entry. In addition to the core services of electronic custody and trade

settlement services, NSDL provides special services like pledge, hypothecation of securities,

automatic delivery of securities to clearing corporations, distribution of cash and non-cash

corporate benefits, stock lending, distribution of securities to allottees in case of public issues,

Internet based services for clearing members 'SPEED' & Internet based services for account

holders 'SPEED-e'.

NSDL has taken the initiative for providing the facility of enabling brokers to deliver contract

notes to custodian / fund managers electronically through its STEADY facility. STEADY

(Securities Trading - information Easy Access and DeliverY) was launched by NSDL on


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November 30, 2002. STEADY is a means of transmitting digitally signed trade information

with encryption across market participants electronically and efficiently, through Internet.

Joining NSDL

NSDL carries out its activities through service providers like Depository Participants (DPs),

Issuing companies and their Registrars and Share Transfer Agents, Clearing corporations/

Clearing Houses of Stock Exchanges. These entities are called business partners in NSDL

terminology. These entities need to get integrated into NSDL depository system to be able to

provide The investor can obtain depository services through a depository participant of NSDL.

Just as one opens a bank account in order to avail of the services of a bank, an investor opens a

depository account with a depository participant in order to avail of depository facilities.

A clearing member can open a special account in the depository system for the purpose of

settling trades done on stock exchanges. The clearing account enables the clearing member to

receive securities from its clients for delivery to the Clearing House/Clearing Corporation as

pay-in, and to distribute the pay-out to its clients received from the Clearing House/Clearing

Corporation.

Issuer can make dematerialisation services available to their shareholders by signing an

agreement to that effect with NSDL. After the agreement is entered into, an electronic link is

established between NSDL, Issuer or its R & T Agent.

The clearing corporations/houses of stock exchanges also have to be electronically linked to the

depository in order to electronically receive securities delivered by clearing members towards

pay-in and to give out securities to clearing members towards pay-out.

The Certification Program

NSDL recognizes that quantitative progress would be ineffective if it is not backed by quality

depository Services. It is, therefore, necessary to ensure that the staff of our business partners

are sensitized to service standards and efficient depository operations.


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Towards this objective, NSDL has launched Certification Programme on depository. This

programme helps the participant to understand and assimilate the procedures to be followed in

conducting various transactions in the NSDL depository system. Further, candidates

successfully clearing such a programme would also add to the human resources pool qualified

in depository operations. NSDL has made it mandatory for all branches of DPs to have at least

one person

NSDL has embarked upon a series of training programmes called Quality Improvement

Programmes (QIP) which cover all the operational aspects of depository services.

Details of the Depository Certification Programme:

NSDL is using the National Stock Exchange's Certification in Financial Markets (NCFM)

infrastructure for conducting the "NSDL-Depository Operations Module". Additional

information or prospectus on the certification programme can also be obtained from:

Marketing Department,

National Securities Depository Ltd.,

Trade World, Kamala Mills Compound,Senapati Bapat Marg, Lower Parel,

Mumbai - 400013. Ph: 022-4980829/30

What is a depository?

A depository can be compared to a bank. A depository holds securities (like shares, debentures,

bonds, Government Securities, units etc.) of investors in electronic form. Besides holding

securities, a depository also provides services related to transactions in securities.

What do you mean by dematerialisation?

Dematerialisation is the process by which physical certificates of an investor are converted to an

equivalent number of securities in electronic form and credited in the investor's account with its

DP. In order to dematerialise certificates; an investor will have to first open an account with a

DP and then request for the dematerialisation of certificates by filling up a dematerialisation

request form [DRF], which is available with the DP and submitting the same along with the


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physical certificates. The investor has to ensure that before the certificates are handed over to

the DP for demat, they are defaced by marking "Surrendered for Dematerialisation" on the face

of the certificates.

Can I dematerialise any share certificate?

You can dematerialise only those certificates that are already registered in your name and are in

the list of securities admitted for dematerialisation at NSDL. All the scrips included in S&P,

CNX, NIFTY and BSE SENSEX have already joined NSDL. This list has more than 4,300

companies and is steadily growing. You can get an updated list of these companies from your

DP or from NSDL's office or from NSDL website atwww.nsdl.co.in.

What precautions should I take before defacing a share certificate?

Before defacing the share certificate, you must ensure that it is available for dematerialisation.

You must therefore check with your Depository Participant (DP) whether the ISIN (code

number for the security in a depository system) has been activated and made available for

dematerialisation by the depository. If yes, then you may deface the share certificate. The

certificates are defaced by marking "Surrendered for Dematerialisation" on the face of the

certificate.

How long does the dematerialisation process take?

Dematerialisation will normally take about 30 days.
http://www.nsdl.co.in/http://www.nsdl.co.in/http://www.nsdl.co.in/http://www.nsdl.co.in/


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RIGHTS AS A MUTUAL FUND UNITHOLDER

As a unit holder in Mutual Fund scheme coming under the SEBI (Mutual Funds) Regulation,

("Regulations") you are entitled to:

1. Recieve unit certificates or statements of accounts conforming your title within 6 weeks

from the date of closure of the subscription or within 6 weeks from the date your request

for a unit certificate is recieved by the Mutual Fund;

2. Recieve information about the investment policies, investment objectives, financial

position and general affairs of the scheme;

3. Recieve dividend within 42 days of their declaration and recieve the redemption or

repurchase proceeds within 10 days from the date of redemption or date of redemption;

4. Vote in accorance with the Regulations to:a. either approve or disapprove any change in the fundamental investment policies of the

Scheme which are likely to modify the scheme or affect your interest in the Mutual

Fund; (as a dissenting unit holder, you would have the right to redeem your

investments);

b. change the asset management company;

c. wind up the schemes.

5. Inspect the documents of the Mutual Funds specified in the scheme's offer document.

In addition to your rights, you can expect the following from Mutual Fund:

To publish their NAV, in accordance with the regulations: daily, in case of open-ended

schemes and periodically, in case of close-ended schemes;

To disclose your schemes' portfolio holdings, expenses, policy on asset allocation, the

Report of the Trustees of the operations of your schemes and their future outlook

through periodic newsletters, half-yearly and annual accounts;

To adhere to a Code of Ethics which require that investment decisions are taken in the best

interests of the unit holders.


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STATEMENT OF PROBLEM

Small sample size

The sample size was only 75 respondents which a very small size to base a research and

give conclusion about the whole sector. These respondents are not sufficient enough to

base our conclusion for the group of investors.

Time bound research

The research was conducted in a short span of time. The responses of the respondents

may be affected by some particular situation prevailing at that particular time. If the time

duration would have been long it would have gien the general idea or perception of the

investors.

Might get biased response

As discussed earlier that the sample size was small also considering that the interview

were conducted in a short span of time, there is high probability that the respondents

might have given biased responses.


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SIGNIFICANCE OF PROBLEM

An alternative form of financing much hyped during a languish sellers mutual fund market is

owner or seller financing or owner carryback. This means the owner participates in financing

the buyers purchase of the property, either in whole or in part.

However, if the deal if not properly structured, owner financing can cause significant problems

for both the buyer and the seller under various circumstances. (Owner or seller financing

typically becomes more prevalent when home sales slow down in a given geographical area and

sellers of real property who are highly motivated to sell their property are more willing to take

risks in its sale than they normally would


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SCOPE OF RESEARCH

The study of mutual fund has the wider scope. Mutual fund is a professionally managed form of

collective investment that pools money from many investors and invest it in stocks, bonds,

short-term money market instruments and other securities. Mutual fund distributors of tax free

municipal bonds income are also tax free to the share holders. Taxable distribution can be either

ordinary income or capital schems which are equity schemes , debt and hybrid schems.

The present study includes five-year return of the mutual fund companies and funds in India.

Out of all mutual fund companies we have selected only two companies those are ING mutual

fund and HDFC mutual fund, and only those schemes and funds are included in this study,

which are performed well during from last few years.


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OBJECTIVES OF RESEARCH

The major objectives of study are as follows.

To evaluate investment performance of mutual funds in terms of risk and return.

To examine the funds sensitivity to the market fluctuations in terms of beta.

To find out the financial performance of mutual fund schemes.

To appraise investment performance of mutual funds with risk adjustment, the

theoretical parameters as suggested by Sharpe, Treynor and Jensen.

To analyze the performance of various schemes of mutual funds.

To identify the sector where the mutual fund and how invested.

To provide valuable suggestions and recommendations.


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STATEMENT OF HYPOTHESES

Hypothesis:

(1) H1: The customers have interest in investing in real estate.

H2: The customers do not have interest in investing in real estate.

(2) H2: Whether there is a strong relationship between the confidence of extrapolation and target

allocation of resources by customers or investors.

H2: Whether there is a weak relationship between the confidence of extrapolation and target

allocation of resources by customers or investors.

(3) H1: Whether there is a strong relationship between the length of time taken by customer/investor

about investing in mutual fundand comfort with extrapolating past returns.

H3: Whether there is a weak relationship between the length of time taken by customer/investor

about investing in mutual fundand comfort with extrapolating past returns.

(4) H4: The developers are successful in solving the problems and providing necessary specifications to

customers.

H4: The developers are unsuccessful in solving the problems and do not provide necessary

specifications to customers.


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ASSUMPTION

1 -As we are aware that India is one of the fastest growing economy in the world and the mutual

fundsector of India is one of the major contributor to the growth of the economy. It is the second

largest sector for employment opportunities after agriculture sector. . 5 % of the countrys GDP is

contributed by the housing sector.

2 - From the above study we can infer that the main reason for the success of the Mutual fundsector is

the Growth of the economy as a whole. When the disposable income of the investors increases they

invest more in the mutual fundsector as they find it a lucrative investment opportunity. Mutual fund

market is a favored investment option due to various efforts that are being made by the government.

3- The final conclusion that I can give from the above study is that there is great scope of the mutual

fundsector. It will grow in the near future and will be one of the major reason for the growth for the

Indian economy.

4- Investors have high hopes from the mutual fund industry , even though they are aware about the

delays in the projects due to recession, Still they are positive about the future prospect of the mutual

fundindustry.

5- It has been assumed that sample of 100 respondents represents the whole

population.

6- The information given by the customer is unbiased


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LIMITATIONS

As the samples are not random samples, there is less likelihood of their representing the

characteristics of the population as a whole.

Time and cost constraints dictated the size of the sample selected. A large sample would

have been more representative of the population.

Many of the institutions had their center for investment located outside Delhi and hence

respondent from such institution had to admit that any information provided by them may be

inaccurate or incomplete.

Some of the telephonic interviews may not have led to accurate responses.

Interviewer biasness could have been introduced during personal interviews.

Sometimes the respondent was unwilling to reveal some data (eg-quantum of investment]. Many of respondents did not agree to personal and telephonic interviews because of lack of

time.

Null Hypothesis: The disposable income is the main factor that drives the

investment decision in mutual fund ector

Alternate Hypothesis: The disposable income is not the main factor for investment decision in mutual

fund sector

Null Hypothesis: Government Policies play a major role in Mutual fundinvestment

Alternate Hypothesis: Government Policies does not effect the investment in mutual fund sector


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LITRATURE REVIEW


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LITRATURE REVIEW

A research should be preliminary orientation and background knowledge about the topic and he

should collect the basic concept and information regarding the final in which the topic includes

due to this reasons review of the literature has an important role in research study.

Considering the importance of mutual funds, several academicians have tried to study the

performance of various funds. Initially, their studies have focused on timing and investment

abilities of fund managers. Later, several researchers have tried to study the various factors and

their impact on fund performance. These factors include potential measurement errors from

survivorship bias and misspecification of the benchmark, the impact of fund expenses and

economies of scale, to the personal characteristics of fund managers. Various studies that

focused on factors such as the ability of fund managers to consistently outperform the market

and the fund specific organizational and managerial aspects, came out with contradictory

conclusions.

Jensons (1968) study on mutual fund performance of 115 funds over a period spanning from

1945 60 1964, confirmed the efficient market hypothesis. His analysis has shown that the

performance of expense-adjusted fund returns was markedly lower than those randomly chosen

portfolios of a similar risk category. These results were in sync with the findings of Treynor

91965) and Sharpe (1966). Performance of professionally managed funds also was not any

better than the performance of risk-adjusted index portfolio, which also indicated that managers

of these funds did not appear to possess private information. Thus, the results of the early

studies prevailed as general conclusions in the erstwhile literature.

However, a number of later studies on the topic, nonetheless, go against the early findings. For

instance, a study by Ippolity (1993) found mutual fund returns after expenses (before loads) to

be superior than the returns offered by risk-adjusted market indices, which indicated that mutual

fund managers may have access to the useful private information. Thus, the mutual fund

managers may produce such excess returns that can offset the expenses of the fund.

Further studies by Grinblatt and Titman (1992), Hendricks, Patel and Zeckhauser (1993),

Goetzmann and Ibbotson (1994), and Volkman and Wohar (1995) were in support of market


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efficiency as they discovered instances of repeated winners amongst fund managers. Recently,

Wermers (2000) decomposed mutual fund returns into a stock picking talent; features of

stockholding and trading costs and expenses. The decomposition helped him show that stock

picking of funds, in fact, enabled the managers to cover their costs. Other studies by Elton,

Gruber, Das and Hlavka (1993), Malkiel (1995) and Carhart (1997) reinforce the early

conclusion of Jensen (1968). While doing away with survivorship bias, carhart (1997) has

shown that the common factors that drive stock returns are responsible for consistency in

mutual fund performance.

On the other hand the Malkiel (1995) study considers both benchmark errors and survivorship

bias and concludes that the previous results indicating market inefficiency were affected by

these factors.


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SWOT ANALYSIS


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SWOT ANALYSIS

STRENGTHSOriginal research

Integrated technology platform

Performance of previously introduced funds

Pan India distribution

WEAKNESS

After Sales Services

Limited number of outlet

OPPORTUNITIES

Changing demographic with higher disposable income and increasing complexfinancial instruments will drive the demand for investment advisory services

Rapid penetration of internet and computer needs that technology enabledservices will gain market share

THREATS

Economic slowdown

Stock market fall will have a cascading effect on mutual fund mobilizationIncrease or decrease in interest rates can effect debt or income mobilizations

Future changes in personal taxation rules can impact insurance sales

Increasing competition from large and particularly foreign players


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DESIGN OF STUDY


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INTRODUCTION

Research refers to a search for knowledge. The advanced learners dictionary of current english

lays down the meaning of research as a careful investigation or enquiry specially through

search for new facts in any branch of knowledge.

Research methodology is a way to systematically solve the research problem. It may be

understood as a science of studying how research is done scientifically. In it we study the

various steps that are generally adopted by a research in studying his research problem along

with the logic behind them. It is necessary for the researcher to know how to develop certain

indices or tests, how to calculate the mean, the mode, the median or the standard deviation or

chi-suare, how to apply particular research technique, but they also need to know which of these

methods or techniques, are relevant and which are not, and what would they mean and indicate

and why. Researchers also by which they can decide that certain techniques and procedures will

be applicable to certain problems and other will not. All this means that it is necessary for the

researcher to design his methodology.

The research methodology has wider dimension and wider scope than that of research methods.

Thus, when we talk of research methodology we not only talk of research methods but also

consider the logic behind the methods we use in the context of our research methods but also

consider the logic behind the methods we use in the context of our research study and explain

why we are using a particular method or technique and why we are not using other so that

research results are capable of being evaluated either by the researcher himself or by others.


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SOURCE OF DATA

PRIMARY DATA

The data which is used for the research is secondary data. The secondary data is the datawhich is duplicate of primary data. The data (published or unpublished) which have already

been collected and processed by some agency or person and taken over from there and used

by any other agency for their statistical work are termed as person and taken over from there

and used by any other agency for their statistical work are termed as secondary data as far as

second agency is concerned. The second agency if and when it publishes and files such data

becomes the secondary source to anyone who later uses these data.

In other words secondary source is the agency who publishes for use by others the data which

was not originally collected and processed by it.

PRIMARY DATA

The study is primary data based oriented through a questionnaire.

Sources of data:

Unpublished sources:

i. The data can be governments or private offices can be collected from these are

unpublished data.

ii. The research work, the secret documents.

Published sources:

i. Central and state government publication publishes the various statistics like crop

production, population, statistic, wages expenses.

ii. The commerce association, commerce and trade association, Indian chamber of

commerce federation are publishes several data.

iii. News paper, journals, periodicals etc. publishes the several data.

iv. Some private organization, research berceuse, universities publishes several datas.

Periodicals: ICFAI journals


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Internet: google.com

Value research online.com

Nytimes.com

AMFI.com

SAMPLING PROCEDURES

The sample size for the above study was a total of 200 from the whole NCR (Gurgaon, Noida,

Greater Noida, Faridabad and Bhiwadi).The respondents of a sample are selected using

Non probability procedures.Nonprobability sampling is arbitrary and subjective; when we

choose subjectively.

The target respondents were HNIs (High Network Individuals), upper segment of middle class,

high level of middle class, High level executive workforce of corporations.

Approximately 200 questionnaires were filled and ultimately 169 were completed with positive

response that they have their interest in investing in real estate.

As a preliminary for the business development of the company it was essential to find the

investor perception about investing in real estate.

For collecting the information a questionnaire was designed focusing on the main cities in NCR

like Gurgaon, Faridabad, Noida, Greater Noida and Bhiwadi where the company is operating its

projects.

The respondents in our sample size are professionals from major public and private

institutions which include managers, consultants, proprietors, business class etc.Approximately

200 questionnaires were filled and ultimately collected 169 with positive response that they

have their interest in investing their funds in mutual fund industry


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METHODS AND INSTRUMENT OF DATA GETHERIN

Methods of Data Collection

Primary Data-

primary data is what is research collect from different sourcss .it is also helps research to get elaborate

information to his research

Questionnaire

Face to face interview

Telephonic Interview


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DATA ANALYIS


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DATA INTERPRETATION AND ANALYSIS

Findings are based on the questions asked from dealers and investors of the

financial markets.

The diagram given below shows the sectorial composition of different investments

in different categories like loan & leasing, shares , Mutual Funds etc.

The finding revealed that 15% goes to insurance sector, 16% goes to Loan & leasing, 46%

goes to Shares & Debentures & 23% goes to Mutual Fund.


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The diagram given below shows the market share of the different companies like ICICI,

UTI, LIC etc. dealing in the Mutual Fund market.

UTI67%

ICICI23%

LIC4%

EMF6%


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The diagram given below shows the percentage composition of reasons for not investing in

Mutual funds

Most of investors are not investing in MFs due to lack of knowledge i.e. 46%, other reasons are

lack of dealers awareness, complexity nature and others.

Lack of Investorawareness

43%

Lack of dealersawareness

24%

Complexity Nature23%

Any Others10%


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Reasons given by dealers for giving suggestion to their clients to invest in Mfs.

The major reason for suggesting Mfs is Commission that counts about 57%,

for dividend reasons counts for 24%, for risk aversion counts for 16% and other reasons counts

for 3%.

Forcommission

57%For Dividiend

24%

For Less Risk16%

Any other

reason3%


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Reasons for investing money in Mfs by investors.

Major portion of MF investor invest in mutual funds for less risk that counts 44%, for dividend purpose

counts for 37%, For tax rebate is 12%, for liquidity counts for 7%.

For Dividend37%

For Less Risk44%

For Tax Debate12%

For Liquidity7%


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Position of MF companies in terms of number of investors hold by them.

The largest market share is hold by UTI that is a govt. owned company, the second position is

hold by ICICI that holds 16% market share and LIC counts for 4% market share.

UTI76%

ICICI16%

LIC4%

EMF4%


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Gender wise classification of mutual funds users

INFERENCE:

From the above chart we can infer that 47 respondents are male and 27 respondents are

female.

Gender

47

28

male

female


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Age wise Distribution of mutual funds

INFERENCE:

From the above chart we can infer that 11 respondents are in the age group between (18-25 yrs)

, 22 respondents are in the age group between 25-40 yrs, 19 respondents are in the age group

between (40-60 yrs), 23 respondents are above the age of 60 yrs.

Age

0

5

10

15

20

25

18-25 25-40 40-60 >60Age

No.O

fPersons


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Qualification of final consumers

INFERENCE:

From the above chart we can infer that 27 respondents are Graduate, 18 respondents are Post

Graduate, 15 respondents are Diploma holders and 15 respondents are ITI holders

Qualification

0

5

10

15

20

25

30

Graduate post

graduate

Diploma iti

Qualification

No.O

fpe

rsons


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.Occupation wise of final consumer of mutual funds

INFERENCE:

From the above chart we can infer that 21 respondents are employed in Govt/ Govt undertaking

sector, 18 respondents are private employees, 15 respondents are doing business, 6 respondents

are farmers, 15 respondents are retired and housewives.

Occupation

0

10

20

30

Govt/Govt

undertaking

Private

Business

Farmer

Others

Occupation

No.O

f

persons


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Individual Income wise final users of funds

INFERENCE:

From the above chart we can infer that 5 respondents are having annual income of RS.

360000 annually

Individual Income(annually)

0

10

20

30

40

50

360000

Income

No.O

fPer

sons


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Type of investor in mutual fund sector

INFERENCE:

From the above chart we can infer that 29% of respondents are conservative type of investor,

23% of investors are aggressive investors, 48% of respondents are moderate investors and 23%

of investors are aggressive investors.

Type of invstor

48%

23%

29%moderate

aggressive

conservative


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Type of Mutual Fund invested

INFERENCE:

From the above chart we can infer that 25% of respondents invested in Growth Fund, 19% of

respondents are invested in Equity Fund, 11% of respondents are invested in Gilt Fund, 9% of

respondents are invested in Money Market/ Liquid funds, 21% of respondents invested in Debt

Fund, 11% of respondents invested in Index Fund and 4% of respondents invested in other

categories of fund.

Type of investment made

25%

19%11%9%

21%

11% 4%

Grow th fund

Equity Fund

Gilt Fund

money market/liquid

fund

Debt fund

index fund

others


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Investing in Mutual Funds (years)

INFERENCE:

From the above chart we can infer that 23% of respondents investing less than two years. 41%

of respondents investing in Mutual Funds for 2-5 years. 27% of the respondents are investing

for 5-10 years. 9% of respondents are investing for greater than 10 years.

Investing in Mutual funds(years)

23%

41%

27%

9%

10 yrs


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Correlation between Individual income and Percentage allocation for

investment:

INFERENCE:

From the above table we can infer that there is a strong correlation between the income and the

percentage of allocation for investmet.

Percentage

allocation

Income

(Rs)

0-5% 5-10% 10-15% 15-20%

0-10000

10000-20000

20000-30000

30000-40000

0

2

8

1

4

3

20

2

1

2

13

10

0

0

13

16

Correlation

coefficient

0.98


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Correlation between Years of investment and Expected return from the

investment:

Years of

investment

Expected

Return

0-2 yrs 2-4 yrs 4-6 yrs 6-8 yrs

0-10%

10-20%

20-30%

30-40%

4

7

4

0

6

6

10

9

1

16

9

0

0

0

3

0

Correlation

coefficient

0.122

INFERENCE:

From the above table we can infer that there is a positive correlation between the Years of

investment and expected return from the investment.


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RESULT OF ANALYSIS

Investing Patterns in India

Changes are in order everywhere. The old order changed giving place to the new. And likewise

old economy stocks have taken a backseat, sending the new in a tizzy. But amidst thechanging order, one lot that has largely managed to maintain its identity has been the investor

community. While changing from being part of the odd, lot to a, smart lot, the Indian

investor has reposed his faith in the old and the traditional.

The fellow Indian, even today, has his full faith in the traditional. Risk-less investment mode.

The research findings showed 64% of the herd investing in the safe abode of banks, with 16

percent trying their luck out in real the stock market and 9 % putting in their wealth in real

estate. The mutual find bonanza could attract a mere 4%, with 5% investing in jewellery and the

rest 2% in other modes of investment.

ANALYSIS ABOUT THE MUTUAL FUND

On the basis of findings the researcher has also analyzed the following points:

Today the most of the area in capital market is covered by share & debenture i.e. 46%.

The MF sector covers only 23% of the market. In MF sector, the UTI govt. owned company, is a dominating company with the 68%

market share.

It was found that there is still required to spread the knowledge about the MF becauseeven 24% dealers & brokers have said that they do not prefer to deal with MF due ton

lacking awareness and 43% have said that investors do not prefer to invest in MF due to

their own less awareness about MF.

The investors, who are aware about the MF, invest in MF for less risk, i.e. 44%.

The brokers &dealers, both they deal in MF or not, prefer to deal with UTI, and ICICIcomes at second place in preference list.

Following are some reasons about the companies why investors prefer to a particular co.:

a. About the UTI: Goodwill of co.,

Maximum return,

Govt. owned,

Involved less risk.b. About the ICICI:

Credibility,


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SUMMARY AND CONCLUSION


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RESTATEMENT OF PROBLEM

Retailers are the most important members of the distribution channel. They are the people who

provides product to the final consumer. As they have the direct touch with the consumer, so

they can play a vital role for infusing the buyer decisions. The should try to the retailers in such

a way that they can satisfy with them.

The basic objective of my study is to identify final consumer need i.e. What types of mutual

fund services is generally they prefer, Why are they buying different brands of mutual fund

sector. Important factor for purchase decision of final consumer, To find out whether the

company provide all facility to timely, Are they satisfied with the delivery process of mutualfund sector. How is the behavior of end stage channel? Are they an y shortcoming being faced

by the executive in the delivery process. Is there any defect in service etc.


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MAJOR FINDING

Sharp ratio indicates that fund performance by considering overall total risk. Some funds are not

able to perform well because of total risk involved in the fund

Because of volatility in the market conditions. The funds are not able to cross the benchmark

return so fund houses should concentrate on the market conditions.

Out of six funds last two funds that is sensex and index got ve value based on Jensen ratio

because they gave more preference for bank deposits.

All funds had a steep decline in their returns in the year 2008 as markets in india tanked due to

recessionary pressures in the American markets.

From portfolio construction shows that, the fund diversifies its risk for some extent so the fund

able to give +ve return based on Jensen ratio.

The beta of the funds suggest that they are no highly volatile funds when it is compared to their

respective benchmark indices.


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COCLUSION

Taking the present scenario of Capital Market, there is a much more change in present than a

decade ago. Before the 1990s, the capital market was having very little awareness amongst thegeneral public, physical dealing of security was done with any governance body and operating

with less capital formation rate in the country.

The present situation of Indian capital market is not only different from the past, but also has

started online trading, having SEBI Act,1992 as a governance body, increased capital formation

rate in the country.

Before the 1990s, there were only two instruments of dealing in capital market share &

debenture. Later on, the mutual fund came into the economic scenario as an operating vehicle

for parking the investible funds in the capital market.

The MF was started with UTI and at present MF market has a well measurable share. Today the

Indian economy is attracting the capital market and showing the various features resulting in the

future growth of MF sector, the features are as below:

1. Cut down interest rate of bank deposit,

2. Industrialisation,

3. Increasing awareness of capital market,

4. Keep on increasing capital formation in the economy,

5. Promotion by the government,

6. Promotion by the SEBI,

7. Growing competition among the player of MF,

8. Less risk involved in MF than share & debenture.

From the above analysis it can be concluded that;

The capital market in India is mostly covered by share & debenture,

In the MF sector too most of the part is captured by govt. owned MF, i.e.UTI68%.

The preference of the investors for UTI is based on its goodwill, return, & lessrisk.


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The projected percentage of brokers& dealers is 24% and investors is 43% whoare aware will invest in MF.

On the basis of above analysis for the MF sector it can be suggested that if the awareness among

the brokers, dealers and investors is increased the investment in MFs will sour to greater heights

in absolute & relative terms.


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RECOMMENDATIONS

The Mutual Fund Asset Management companies can educate and give awareness about the

concept of Mutual Funds to the investors. As majority of the investors do not know about this type of

investment, it should highlight the benefits of mutual fund over other investment and attract more

number of customers

The Mutual Fund Asset Management companies can come up with more advertisements

andpromotional measures and it should also target the FIIs and individual investors who invest in the

capital markets.

The fund distributors should clearly state the objective of each fund floated by the Asset

Management Companies to help the investors choose the right investment plan.

To induce investments into mutual funds, the government may provide tax benefits to attract

investment into mutual funds.

The risk management systems and the benchmarking of indices may be improved by AMFI

(Association of Mutual Funds in India) to give the investors more guidelines and tools to take a good

investment decision.

The fund house has to reduce the total risk involved in the fund in order to increase the return

with good portfolio construction.

The fund house should select the innovative way of portfolio construction and should see theattracting areas of investing funds.

The fund houses should concentrate on the market conditions according to that they have to set

the benchmark and invest in different sectors.

The fund houses should invest in good and attracting sectors to reduce standard deviation.

The fund house should try to reduce little more beta in order to generate more returns to

investors.


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ANNEXURE


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ANNEXURE &QUESTIONNAIRE

Questionnaire

1. In which sector of financial market do you deal?

a. Share & Debenture b. Mutual Fund

c. Insurance d. Loan & Leasing

2. Do you deal in Mutual fund?

a. Yes b. No

B. If, Yes; which companys Mutual Fund do you like most to deal with?

a. UTI, b. ICICI

c. LIC, d. EMF.

C. If No, would you like to tell the reason, because of ?

a. Lack of your own awareness b. lack of investors awareness

c. Complexity nature d. Any other .

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