servey report

CONTENTS

INTRODUCTION

COMPANY PROFILE

TOPIC

OBJECTIVES

RESEARCH METHODOLOGY

ANALYSIS

FINDINGS

SUGGESTIONS

LIMITATIONS

BIBLIOGRAPHY

ANNEXURE

SCHOOL OF MANAGEMENT SCINCES VARANASI

INTRODUCTION


INTRODUCTION TO MUTUAL FUND

Mutual fund is a trust that pools the savings of a number of investors who share a common

financial goal. This pool of money is invested in accordance with a stated objective. The joint

ownership of the fund is thus “Mutual”, i.e. the fund belongs to all investors. 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 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 low cost. A Mutual Fund is

an investment tool that allows small investors access to a well-diversified portfolio of equities,

bonds and other securities. Each shareholder participates in the gain or loss of the fund. Units are

issued and can be redeemed as needed. The funds Net Asset value (NAV) is determined each day.

The flow chart below describes broadly the working of a mutual fund:

Mutual Fund Operation Flow Chart


Investments in securities are spread across a wide cross-section of industries and sectors and thus

the risk is reduced. Diversification reduces the risk because all stocks may not move in the same

direction in the same proportion at the same time. Mutual fund issues units to the investors in

accordance with quantum of money invested by them. Investors of mutual funds are known as unit

holders.

A mutual fund is just the connecting bridge or a financial intermediary that allows a group of

investors to pool their money together with a predetermined investment objective. The mutual fund

will have a fund manager who is responsible for investing the gathered money into specific

securities (stocks or bonds). When you invest in a mutual fund, you are buying units or portions of

the mutual fund and thus on investing becomes a shareholder or unit holder of the fund.

Mutual funds are considered as one of the best available investments as compare to others they are

very cost efficient and also easy to invest in, thus by pooling money together in a mutual fund,

investors can purchase stocks or bonds with much lower trading costs than if they tried to do it on

their own. But the biggest advantage to mutual funds is diversification, by minimizing risk &

maximizing returns.

ORGANISATION OF A MUTUAL FUND:



ADVANTAGES OF MUTUAL FUND

Portfolio Diversification

Professional management

Reduction / Diversification of Risk

Liquidity

Flexibility & Convenience

Reduction in Transaction cost

Safety of regulated environment

Choice of schemes

Transparency

DISADVANTAGE OF MUTUAL FUND

No control over Cost in the Hands of an Investor

No tailor-made Portfolios

Managing a Portfolio Funds

Difficulty in selecting a Suitable Fund Scheme


HISTORY OF THE INDIAN

MUTUAL FUND INDUSTRY

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

initiative of the Government of India and Reserve Bank. 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 qualities

wise as well as quantity wise. Before, the monopoly of the market had seen an ending phase; the

Assets Under Management (AUM) was Rs67 billion. The private sector entry to the fund family

raised the Aum to Rs. 470 billion in March 1993 and till April 2004; it reached the height if Rs.

1540 billion.

The Mutual Fund Industry is obviously growing at a tremendous space with 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.


First Phase – 1964-87

Unit Trust of India (UTI) was established on 1963 by an Act of Parliament by the Reserve Bank of

India and functioned under the Regulatory and administrative control of the Reserve Bank of India.

In 1978 UTI was de-linked from the RBI and the Industrial Development Bank of India (IDBI)

took over the regulatory and administrative control in place of RBI. The first scheme launched by

UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6,700 crores of assets under

management.

Second Phase – 1987-1993 (Entry of Public Sector Funds)

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

Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC). SBI

Mutual Fund was the first non- UTI Mutual Fund established in June 1987 followed by Canbank

Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund

(Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC established its

mutual fund in June 1989 while GIC had set up its mutual fund in December 1990.At the end of

1993, the mutual fund industry had assets under management of Rs.47,004 crores.


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

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

mutual funds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer (now

merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993.

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

Rs. 1,21,805 crores.

Fourth Phase – since February 2003

In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated into

two separate entities. One is the Specified Undertaking of the Unit Trust of India with assets under

management of Rs.29,835 crores as at the end of January 2003, representing broadly, the assets of

US 64 scheme, assured return and certain other schemes

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. consolidation and growth. As at the

end of September, 2004, there were 29 funds, which manage assets of Rs.153108 crores under 421

schemes.


CATEGORIES OF MUTUAL FUND:


Mutual funds can be classified as follows:

Based on their structure

1-Open-ended funds: Investors can buy and sell the units from the fund, at any point of time.

2-Close-ended funds: These funds raise money from investors only once. Therefore, after the

offer period, fresh investments can not be made into the fund. If the fund is listed on a stocks

exchange the units can be traded like stocks (E.g., Morgan Stanley Growth Fund). Recently, most

of the New Fund Offers of close-ended funds provided liquidity window on a periodic basis such

as monthly or weekly. Redemption of units can be made during specified intervals. Therefore, such

funds have relatively low liquidity.

Based on their investment objective:

1-Equity funds: These funds invest in equities and equity related instruments. With fluctuating

share prices, such funds show volatile performance, even losses. However, short term fluctuations

in the market, generally smoothens out in the long term, thereby offering higher returns at

relatively lower volatility. At the same time, such funds can yield great capital appreciation as,

historically, equities have outperformed all asset classes in the long term. Hence, investment in

equity funds should be considered for a period of at least 3-5 years.


Equity funds can be further classified as:

i) Index funds- In this case a key stock market index, like BSE Sensex or Nifty is tracked. Their

portfolio mirrors the benchmark index both in terms of composition and individual stock weights.

ii) Equity diversified funds- 100% of the capital is invested in equities spreading across

different sectors and stocks.

iii) Dividend yield funds- it is similar to the equity diversified funds except that they invest in

companies offering high dividend yields.

iv)Thematic funds- Invest 100% of the assets in sectors which are related through some theme.

e.g. -An infrastructure fund invests in power, construction, cements sectors etc.

v) Sector funds- Invest 100% of the capital in a specific sector. e.g. - A banking sector fund will

invest in banking stocks.

vi) ELSS- Equity Linked Saving Scheme provides tax benefit to the investors.

2-Balanced fund: Their investment portfolio includes both debt and equity. As a result, on the

risk-return ladder, they fall between equity and debt funds. Balanced funds are the ideal mutual

funds vehicle for investors who prefer spreading their risk across various instruments.


Following are balanced funds classes:

i) Debt-oriented funds -Investment below 65% in equities.

ii) Equity-oriented funds -Invest at least 65% in equities, remaining in debt.

3-Debt fund: They invest only in debt instruments, and are a good option for investors averse to

idea of taking risk associated with equities. Therefore, they invest exclusively in fixed-income

instruments like bonds, debentures, Government of India securities; and money market instruments

such as certificates of deposit (CD), commercial paper (CP) and call money. Put your money into

any of these debt funds depending on your investment horizon and needs.

Following are balanced funds classes:

i) Liquid funds- These funds invest 100% in money market instruments, a large portion being

invested in call money market.

ii) Gilt funds ST- They invest 100% of their portfolio in government securities of and T-bills.

iii) Floating rate funds - Invest in short-term debt papers. Floaters invest in debt instruments

which have variable coupon rate.


iv) Arbitrage fund- They generate income through arbitrage opportunities due to mis-pricing

between cash market and derivatives market. Funds are allocated to equities, derivatives and

money markets. Higher proportion (around 75%) is put in money markets, in the absence of

arbitrage opportunities.

v) Gilt funds LT- They invest 100% of their portfolio in long-term government securities.

vi) Income funds LT- Typically, such funds invest a major portion of the portfolio in long-term

debt papers.

vii) MIPs- Monthly Income Plans have an exposure of 70%-90% to debt and an exposure of

10%-30% to equities.

viii) FMPs- fixed monthly plans invest in debt papers whose maturity is in line with that of the

fund.

INVESTMENT STRATEGIES

1. Systematic Investment Plan: under this a fixed sum is invested each month on a fixed

date of a month. Payment is made through post dated cheques or direct debit facilities. The

investor gets fewer units when the NAV is high and more units when the NAV is low. This is

called as the benefit of Rupee Cost Averaging (RCA)


2. Systematic Transfer Plan: under this an investor invest in debt oriented fund and give

instructions to transfer a fixed sum, at a fixed interval, to an equity scheme of the same mutual

fund.

3. Systematic Withdrawal Plan: if someone wishes to withdraw from a mutual fund then he

can withdraw a fixed amount each month.

RISK V/S. RETURN:


FREQUENTLY USED TERMS

Net Asset Value (NAV)

Net Asset Value is the market value of the assets of the scheme minus its liabilities. The per unit

NAV is the net asset value of the scheme divided by the number of units outstanding on the

Valuation Date.

Sale Price

Is the price you pay when you invest in a scheme. Also called Offer Price. It may include a sales

load.

Repurchase Price

Is the price at which units under open-ended schemes are repurchased by the Mutual Fund. Such

prices are NAV related.

Redemption Price

Is the price at which close-ended schemes redeem their units on maturity. Such prices are NAV

related.

Sales Load

Is a charge collected by a scheme when it sells the units. Also called, ‘Front-end’ load. Schemes

that do not charge a load are called ‘No Load’ schemes.

Repurchase or ‘Back-end’Load

Is a charge collected by a scheme when it buys back the units from the unitholders.


PLAYERS OF INDIAN MUTUAL FUND INDUSTRY-

1. AIG Global Investment Group2. Baroda Pioneer3. Benchmark4. Bharti Axa5. Birla Sun Life6. Canara Robeco7. DBS Chola8. Deutsche9. DSP Blackrock10. Edelweiss11. Escort12. Fidelity13. Fortis14. Franklin Temp.15. HDFC16. HSBC17. ICICI Prudential18. IDFC19. ING20. JM Finance21. JP Morgan22. Kotak Mahindra23. LIC24. Mirae Asset25. Morgan Stanley26. Principal27. Quantum28. Reliance Cap.29. Religare30. Sahara31. SBI32. Sundaram Bnp Paribas33. TATA34. Taurus35. UTI


COMPANY PROFILE


Type - Private Conglomerate

Founded - 1966 as Reliance Commercial Corporation

Headquarters - Navi Mumbai , Maharastra, India

Key people - Anil Ambani, Chairman

Industry - Energy, Telecommunications, Finance, Media Products Electricity, Wireless services,

Bonds, Movies

Website - www.RelianceADAgroup.com


http://en.wikipedia.org/wiki/File:Relianceada.gif

http://en.wikipedia.org/wiki/India

http://en.wikipedia.org/wiki/India

The Reliance – Anil Dhirubhai Ambani Group is among India’s top three private sector

business houses on all major financial parameters, with a market capitalization of Rs.325,000

crores (US$ 81 billion), net assets in excess of Rs.115,000 crores (US$ 29 billion), and net worth

to the tune of Rs.55,000 crores (US$ 14 billion)

Across different companies, the group has a customer base of over 100 million, the largest in India,

and a shareholder base of over 12 million, among the largest in the world.

Through its products and services, the Reliance - ADA Group touches the life of 1 in 10 Indians

every single day. It has a business presence that extends to over 20000 towns and 4.5 lakhs villages

in India, and 5 continents across the world.

The interests of the Group range from communications (Reliance Communications) and financial

services (Reliance Capital Ltd), to generation, transmission and distribution of power (Reliance

Energy), infrastructure and entertainment.


Group Philosophy - Vision

To build a global enterprise for all our stakeholders, and

A great future for our country,

To give millions of young Indians the power to shape their destiny,

The means to realize their full potential…

RELIANCE ADA GROUP COMPANIES

Reliance Communications

Reliance Capital

Reliance Infrastructure

Reliance Power

Reliance Big Entertainment

Reliance Health

Other Business

RELIANCE CAPITAL


Reliance Capital Limited (RCL) is a Non-Banking Financial Company (NBFC) registered with the

Reserve Bank of India under section 45-IA of the Reserve Bank of India Act, 1934. RCL was

incorporated as a public limited company in 1986 and is now listed on the Bombay Stock

Exchange and the National Stock Exchange (India).

RCL has a net worth of over Rs 3,300 crore and over 165,000 shareholders. On conversion of

outstanding equity instruments, the net worth of the company will increase to about Rs 4,100

crore.

It is headed by Anil Ambani and is a part of the Reliance ADA Group.

Reliance Capital ranks among the top 3 private sector financial services and banking companies, in

terms of net worth.

Reliance Mutual Fund is India's no.1 Mutual Fund. Reliance Life Insurance is one of India's fastest

growing life insurance company and among the top 4 private sector insurers. Reliance General

Insurance is one of India's fastest growing general insurance company and among the top 3 private

sector insurers. Reliance Money is the largest brokerage and distributor of financial products in

India with over 2.7 million customers and has the largest distribution network. Reliance Consumer

finance has a loan book of over Rs. 8,900 crore at the end of December 2008.

Corporate & Registered Office:

Reliance Capital Ltd. H Block, 1st Floor, Dhirubhai Ambani Knowledge City, Koparkhairne, Navi

Mumbai - 400 710.Tel. 022 – 30327000, Fax. 022 – 30327202


http://en.wikipedia.org/wiki/Anil_Ambani

RELIANCE CAPITAL ASSET MANAGEMENT LIMITED

.

Reliance Mutual Fund (RMF) is one of India’s leading Mutual Funds, with Average Assets Under

Management (AAUM) of Rs. 1,08,332 CRORES and an investor base of over 70.87 Lacs. (AAUM

and investor count as on June 30, 2009)

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

growing mutual funds in the country. RMF offers investors a well-rounded portfolio of products to

meet varying investor requirements and has presence in 118 cities across the country. Reliance

Mutual Fund constantly endeavors to launch innovative products and customer service initiatives

to increase value to investors. "Reliance Mutual Fund schemes are managed by Reliance Capital

Asset Management Limited., a subsidiary of Reliance Capital Limited, which holds 93.37% of the

paid-up capital of RCAM, the balance paid up capital being held by minority shareholders."


Sponsor: Reliance Capital Limited

Trustee: Reliance Capital Trustee Co. Limited

Investment Manager: Reliance Capital Asset Management Limited

Statutory Details: The Sponsor, the Trustee and the Investment Manager are incorporated under

the Companies Act 1956.

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

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

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

factors and forces affecting the capital markets. Past performance of the Sponsor/AMC/Mutual

Fund is not indicative of the future performance of the Scheme. The Sponsor is not responsible or

liable for any loss resulting from the operation of the Scheme beyond their initial contribution of

Rs.1 lakh towards the setting up of the Mutual Fund and such other accretions and additions to the

corpus. The NAV of the Scheme may be affected, interalia, by changes in the market conditions,

interest rates, trading volumes, settlement periods and transfer procedures. The Mutual Fund is not

assuring that it will make periodical dividend distributions, though it has every intention of doing

so. All dividend distributions are subject to the availability of distributable surplus in the Scheme.

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

Information Document. Please read the Statement of Additional Information and Scheme

Information Document carefully before investing.


Vision Statement

To be a globally respected wealth creator with an emphasis on customer care and a culture of good

corporate governance.

Mission Statement

To create and nurture a world-class, high performance environment aimed at delighting our

customers.

Corporate Governance

Our Corporate Governance Policy :

Reliance Capital Asset Management Ltd. has a vision of being a leading player in the Mutual Fund

business and has achieved significant success and visibility in the market.

However, an imperative part of growth and visibility is adherence to Good Conduct in the

marketplace. At Reliance Capital Asset Management Ltd., the implementation and observance of

ethical processes and policies has helped us in standing up to the scrutiny of our domestic and

international investors.


About Reliance Capital Asset Management Ltd.

Reliance Capital Asset Management Ltd.(RCAM) is an unlisted Public Limited Company

incorporated under the Companies Act, 1956 on February 24, 1995, having its registered office at

"Reliance House", Near. Mardia Plaza, Off. C.G. Road, Ahmedabad, 380 006 and its Corporate

Office at Express Building (4th, 5th & 6th floor), 14-E Road, Churchgate, Mumbai 400020.

RCAM has been appointed as the Asset Management Company of Reliance Mutual Fund by The

Trustee vide Investment Management Agreement (IMA) dated May 12, 1995 and executed

between Reliance Capital Trustee Co. Limited and Reliance Capital Asset Management Ltd. and

amended on August 12, 1997 in line with SEBI (Mutual Funds) Regulations, 1996).

Pursuant to this IMA, RCAM is authorised to act as Investment Manager of the Mutual Fund. The

networth of the Asset Management Company based on audited accounts as on March 31, 2009 is

Rs. 841.32 Crore. The Mutual Fund has launched Forty Seven Schemes till date, namely:

1. Reliance Growth Fund (September 1995)

2. Reliance Vision Fund (September 1995)

3. Reliance Income Fund (December 1997)

4. Reliance Income Fund (December 1997)

5. Reliance Liquid Fund (March 1998)

6. Reliance Medium Term Fund (August 2000)

7. Reliance Short Term Fund (December 2002)

8. Reliance Fixed Term Scheme (March 2003)

9. Reliance Banking Fund (May 2003)

10. Reliance Gilt Securities Fund (July 2003)


11. Reliance Monthly Income Plan (December 2003)

12. Reliance Diversified Power Sector Fund (March 2004)

13. Reliance Pharma Fund ( May 2004)

14. Reliance Floating Rate Fund (August 2004)

15. Reliance Media & Entertainment Fund (September 2004)

16. Reliance NRI Equity Fund (October 2004)

17. Reliance NRI Income Fund (October 2004)

18. Reliance Equity Opportunities Fund (February 2005)

19. Reliance Index Fund (February 2005)*

20. Reliance Fixed Maturity Fund – Series I (March 2005)

21. Reliance Fixed Maturity Fund – Series II (April 2005)

22. Reliance Regular Savings Fund (May 2005)

23. Reliance Liquidity Fund (June 2005)

24. Reliance Tax Saver (ELSS) Fund (July 2005)

25. Reliance Fixed Tenor Fund (November 2005)

26. Reliance Equity Fund (February 2006)

27. Reliance Fixed Horizon Fund (April 2006)

28. Reliance Fixed Horizon Fund I (August 2006)

29. Reliance Fixed Horizon Fund II ( November 2006)

30. Reliance Long Term Equity Fund (November 2006)

31. Reliance Money Manager Fund (March 2007)


32. Reliance Fixed Horizon Fund III (March 2007)

33. Reliance Interval Fund (March 2007)

34. Reliance Equity Advantage Fund (June 2007)

35. Reliance Fixed Horizon Fund IV (August 2007)

36. Reliance Gold Exchange Traded Fund (October 2007)

37. Reliance Fixed Horizon Fund V (September 2007)

38. Reliance Fixed Horizon Fund VI (December 2007)

39. Reliance Equity Linked Saving Fund - Series I (December 2007)

40. Reliance Natural Resources Fund (January 2008)

41. Reliance Fixed Horizon Fund VII (January 2008)

42. Reliance Fixed Horizon Fund VIII (March 2008)

43. Reliance Fixed Horizon Fund IX (March 2008)

44. Reliance Banking Exchange Traded Fund (May 2008)

45. Reliance Fixed Horizon Fund X (August 2008)

Reliance Fixed Horizon Fund XI (October 2008)

46. Reliance Fixed Horizon Fund XII (November 2008)

47. Reliance Infrastructure Fund (June 2009)


RCAM has been registered as a Portfolio Manager vide SEBI Registration No. INP000000423 and

renewed effective 1st August, 2006.

RCAM was appointed as the Investment Manager of “Reliance India Power Fund”, a Venture

Capital Fund registered with the SEBI vide registration number IN/VCF/05-06/062 dated June 16,

2005.

Reliance Capital Asset Management Limited has also incorporated a wholly owned subsidiary

named Reliance Capital Pension Fund Limited for managing the funds of Pension Fund Regulatory

and Development Authority (PFRDA) – Mandate vide Letter of appointment dated March 13,

2009.

The AMC has also been rendering advisory services in respect of ‘Emergent India Investment

Limited’, an offshore fund for investment in India.

RCAM has commenced these activities. It has been ensured that key personnel of the AMC, the

systems, back office, bank and securities accounts are segregated activity wise and there exists

systems to prohibit access to inside information of various activities. As per SEBI Regulations, it

will further ensure that AMC meets the capital adequacy requirements, if any, separately for each

such activity.


About Reliance Mutual Fund

Reliance Mutual Fund (RMF) has been established as a trust under the Indian Trusts Act, 1882

with Reliance Capital Limited (RCL), as the Settlor/Sponsor and Reliance Capital Trustee Co.

Limited (RCTCL), as the Trustee.

RMF has been registered with the Securities & Exchange Board of India (SEBI) vide registration

number MF/022/95/1 dated June 30, 1995. The name of Reliance Capital Mutual Fund has been

changed to Reliance Mutual Fund effective 11th. March 2004 vide SEBI's letter no.

IMD/PSP/4958/2004 date 11th. March 2004. Reliance Mutual Fund was formed to launch various

schemes under which units are issued to the Public with a view to contribute to the capital market

and to provide investors the opportunities to make investments in diversified securities.

The main objectives of the Trust are:

To carry on the activity of a Mutual Fund as may be permitted at law and formulate and

devise various collective Schemes of savings and investments for people in India and

abroad and also ensure liquidity of investments for the Unit holders;

To deploy Funds thus raised so as to help the Unit holders earn reasonable returns on their

savings and

To take such steps as may be necessary from time to time to realise the effects without any

limitation.


SCHEMES

Equity/Growth Schemes

The aim of growth funds is to provide capital appreciation over the medium to long- term. Such

schemes normally invest a major part of their corpus in equities. Such funds have comparatively

high risks. These schemes provide different options to the investors like dividend option, capital

appreciation, etc. and the investors may choose an option depending on their preferences. The

investors must indicate the option in the application form. The mutual funds also allow the

investors to change the options at a later date. Growth schemes are good for investors having a

long-term outlook seeking appreciation over a period of time.

Debt/Income Schemes

The aim of income funds is to provide regular and steady income to investors. Such schemes

generally invest in fixed income securities such as bonds, corporate debentures, Government

securities and money market instruments. Such funds are less risky compared to equity schemes.

These funds are not affected because of fluctuations in equity markets. However, opportunities of

capital appreciation are also limited in such funds. The NAVs of such funds are affected because

of change in interest rates in the country. If the interest rates fall, NAVs of such funds are likely to

increase in the short run and vice versa. However, long term investors may not bother about these

fluctuations.

Sector Specific Schemes

These are the funds/schemes which invest in the securities of only those sectors or industries as

specified in the offer documents. e.g. Pharmaceuticals, Software, Fast Moving Consumer Goods

(FMCG), Petroleum stocks, etc. The returns in these funds are dependent on the performance of

the respective sectors/industries. While these funds may give higher returns, they are more risky

compared to diversified funds. Investors need to keep a watch on the performance of those

sectors/industries and must exit at an appropriate time. They may also seek advice of an expert.


THE MANAGEMENT TEAM

Board of Directors

Mr. Vikrant Gugnani

Mr. Kanu Doshi

Mr. Manu Chadha

Mr. Sushil Tripathi

Management Team

CEO

Mr. Sundeep Sikka

Head Equity Investments

Mr. Madhusudan Kela

Head Fixed Income

Mr. Amitabh Mohanty


Equity Fund Managers

Mr. Sunil B. Singhania

Mr. Ashwani Kumar

Mr. Shailesh Raj Bhan

Mr. Shiv Chanani

Mr. Krishan Daga

Mr. Govind Agrawal

Mr. Omprakash S. Kuckian

Debt Fund Managers

Mr. Amit Tripathi

Ms. Anju Chhajer

Mr. Prashant Pimple

Mr. Arpit Malaviya

Commodities

Fund Manager

Mr. Hiren Chandaria


Head of Departments

Infrastructure & Admin Mr. Pradeep Andrade

Finance and Accounts Mr. Milind Gandhi

Human Resource Development Mr. Rajesh Derhgawen

Information Technology Mr. Vinay Nigudkar

Operations & Settlement Ms. Geeta Chandran

R&T Operations & Investor Relations Mr. Milind Nesarikar

Sales & Distribution Mr. Himanshu Vyapak

Compliance Mr. Suresh Viswanathan

Legal Mr. Muneesh Sud

Zonal Heads

Northern Zone HeadMr. Gurbir Chopra

Western Zone Head Mr. Sanjiv Gudal

Southern Zone HeadMr. Nikunj Sharma

Eastern Zone Head Mr. Gopal Khaitan


Auditors

Statutory Auditor to the Schemes of Reliance Mutual Fund : Haribhakti & Co. Chartered Accountants42, Free Press House, Nariman Point, Mumbai - 400 021.

Internal Auditor to the Schemes of Reliance Mutual Fund : Price Waterhouse Coopers.Chartered Accountants252, Veer Savarkar Marg,Shivaji Park, Dadar,Mumbai - 400 028.

Statutory Auditors to the Asset Management CompanyBSR & Co.KPMG House, Kamla Mills Compound,448, Senapati Bapat Marg,Lower Parel, Mumbai

Statutory Auditors to the Trustee Company M/s. Malpani & Associates Chartered Accountants307, Chartered House,Dr. C.H. Street,Near Marine Lines Church, Mumbai.


Our Service Providers

Service Providers

Custodian

Deutsche Bank, AG

The Trustee has appointed Deutsche Bank, AG located at Kodak House, Ground Floor, 222 Dr.

D.N.Road, Mumbai-400 001, as the Custodian of the securities that are bought and sold under the

Scheme. A Custody Agreement has been entered with Deutsche Bank in accordance with SEBI

Regulations. The Custodian is approved by SEBI under registration no. IN/CUS/003 to act as

Custodian for the Fund.

Deutsche Bank AG, the Custodian shall, inter alia: Provide post-trading and custodial services to the Mutual Fund.

Keep Securities and other instruments belonging to the Scheme in safe custody.

Ensure smooth inflow/outflow of securities and such other instruments as and when

necessary, in the best interests of the unitholders.

Ensure that the benefits due to the holdings of the Mutual Fund are recovered and


Be responsible for loss of or damage to the securities due to negligence on its part on the

part of its approved agents.

Registrar

Karvy Computershare Pvt. Limited

Reliance Capital Asset Management Limited has appointed M/s. Karvy Computershare Pvt.

Limited to act as the Registrar and Transfer Agent to the Schemes of Reliance Mutual Fund. M/s.

Karvy Computershare Pvt. Limited (KCL) having their office at Karvy Plaza .21, Road No. 4,

Street No.1, Adjacent to Rainbow Hospital, Banjara Hills, Hyderabad - 500 034, is a Registrar and

Transfer Agent registered with SEBI under registration no. INR000000221.

Reliance Capital Asset Management Ltd. and the Trustee have satisfied themselves, after

undertaking appropriate due diligence measures, that they can provide the services required and

have adequate facilities, including systems facilities and back up, to do so. The Trustee has also

laid down broad parameters for supervision of the Registrar. As Registrar to the Schemes, KCL

will accept and process investor's applications, handle communications with investors, perform

data entry services, despatch Account Statements and also perform such other functions as agreed,

on an ongoing basis.

The Registrar is responsible for carrying out diligently the functions of a Registrar and Transfer

Agent and will be paid fees as set out in the agreement entered into with it and as per any

modification made thereof from time to time.

Reliance Capital Trustee Co. Limited (RCTC), a company incorporated under the Companies


Act, 1956, has been appointed as the Trustee to the Fund vide the Trust Deed dated April 25, 1995

executed between the Sponsor and the Trustee.

Bankers to the Schemes of Reliance Capital Asset Management

* HDFC Bank Limited

* ABN Amro Bank

* ICICI Bank Limited

* Citibank N. A.

* CITI Channel & Citi Wealth - only for online

* Deutsche Bank AG

* Standard Chartered Bank

* UTI Bank

* IDBI Bank

* HSBC Bank

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Webservices

Reliance Infocomm

VARANASI Reliance Capital Asset Management LimitedUnit No. 2, 1st floor, Arihant Complex, Sigra Varanasi


Tel. No.: 0542-3244441Contact Person : Dhananjay SinghEmail : [email protected]

AWARDS AND ACHIEVEMENT

Reliance Mutual Fund – At a Glance

Reliance Mutual Fund (RMF) is one of India’s leading Mutual Funds, with Assets Under

Management (AUM) of Rs. 1,08,332 crore (AUM as on 30th June 2009) and an investor

base of over 70.87 Lacs.

Investor base of over 3.38 million as on March 31, 2007

Rapid growth in Assets Under Management (AUM), 87.7% growth in AUM year on year.

AUM of over Rs.46,306 crore ($10.62 billion) as on March 30, 2007 from Rs. 24,669 crore

($5.53 billion) as on March 31, 2006.

Accelerated growth in investor base – 66.89% growth in investor base year on year. Over

3.38 million investors as on March 31, 2007 from over 2.02 million investors as on March

31, 2006.

Reliance Mutual Fund has over 10 years of extensive market experience, over 26 schemes

combined with a strong performance track record.

Reliance Equity Fund NFO (6th Feb -7th March 2006), the largest ever collection of

Rs.5,759 crore ($1.29 billion) in the history of the Indian Mutual Fund industry.

Footprint in over 100 cities in India

Wide network of 130 collection points

Wide portfolio of 26 well-rounded products to meet varying investor requirements.


mailto:[email protected]

Reliance Mutual Fund is amongst the few mutual funds in the industry to offer

Subscription, Redemption and Switch through Online Transactions.

Lipper Fund Award India 2007 :

Reliance Gilt Securities Fund-Long Term Plan-Growth was declared the best fund over 3

years in the Bond INR Government category, out of 52 eligible schemes.

Reliance Growth Fund-Growth Plan was declared the best fund over 5 years in the Equity

India category, out of 81 eligible schemes.

Lipper Fund Award Gulf 2007 :

Reliance Banking Fund-Growth Plan-Growth Option was declared the best fund over 3

years in Equity Sector Banks and Other Financials


India category


India category

Reliance Income Fund-Growth Plan-Growth Option was declared the best fund over 5

years in Bond Indian Rupee – General category

Reliance Gilt Securities Fund-Long Term Plan-Growth was declared the best fund over 3

years in the Bond INR Government category

Reliance Short Term Fund-Growth Plan was declared the best fund over 3 years in Bond

Indian Rupee

CNBC TV18 - CRISIL Mutual Fund of the Year Awards 2006 :


Reliance Gilt Securities Fund - Long Term Plan was awarded CNBC TV18 - CRISIL

Mutual Fund of the Year Awards 2006, in the Open End Long Term Gilt Category

Reliance Short Term Fund was awarded CNBC TV18 - CRISIL Mutual Fund of the Year

Awards 2006, in the Open End Debt Short Term Category

ICRA Mutual Funds Awards 2007 :

Reliance Short Term Fund has been ranked ICRA MFR 1 by ICRA Mutual Funds Awards

2007 in the category Open Ended Debt – Short Term for its 1 year performance till

December 31, 2006. The rank indicates performance within the top 10% of the stated

category.

Reliance Gilt Securities Fund - Long Term Retail Plan has been ranked ICRA MFR 1 by

ICRA Mutual Funds Awards 2007 in the category Open Ended Gilt - Long Term for its 3

year performance till December 31, 2006. The rank indicates performance within the top

10% of the stated category.

Reliance Liquidity Fund has been ranked ICRA MFR 1 by ICRA Mutual Funds Awards

2007 in the category Open Ended Liquid Scheme for its 1 year performance till December

31, 2006. The rank indicates performance within the top 10% of the stated category.

FACILITIES

The first mutual fund in India to offer instant cash withdrawal facility on investments.

Reliance Mutual Fund offers the Reliance Any Time Money (ATM) Card with select

schemes. The card is a boon for retail investors as it enables them to withdraw their

investment any time, anywhere at over 1 million VISA-enabled ATMs across the world.

Reliance Mutual Fund is amongst the few mutual funds with a 24X7 Call Centre facility.


TOPIC OF THE PROJECT


TOPIC

ACTIVISATION OF DISTRIBUTORS: A COMPREHENSIVE

STUDY ON ACTIVE V/s NON-ACTIVE DISTRIBUTORS


OBJECTIVES


PROJECT OBJECTIVES

To know the perception of distributors regarding Reliance

Mutual fund in Varanasi.

To find out the primary reasons why distributors work for

Reliance Mutual Fund.

To have an insight about the causes of the distributors for

their inactiveness in Reliance Mutual Fund.


To gain detailed knowledge about mutual fund and its

working.

RESEARCH

METHODOLOGY


RESEARCH METHODOLOGY

TYPE OF RESEARCH – DESCRIPTIVE RESEARCH TYPE OF DATA COLLECTED – PRIMARY DATA DATA COLLECTION METHOD – SURVEY DATA COLLECTION TECHNIQUE – STRUCTURED

QUESTIONNAIRE UNIVERSE OF THE STUDY – ALL INDIVIDUAL FINANCIAL

ADVISORS (IFA) OF VARANASI CITY SAMPLE UNIT –EACH RESPONDENT IS CONSIDERED A UNIT SAMPLING TECHNIQUE – NON-PROBABILITY (CONVENIENCE

SAMPLING) SAMPLE SIZE – 150 STATISTICAL TOOLS – BAR DIAGRAMS, PIE CHARTS, GRAPHS


ANALYSIS


INTRODUCTION-

In mutual fund industry distributors plays a key role or in simple words distributors are the seller

of mutual fund. Distributors are acting as a bridge or intermediary or middlemen between the

company and the customers.

Distributors are classified in three different categorizes. They are-

Individual Financial Advisors (IFA)

National Distributors (ND)

Public Sector Units (PSU)


In this particular project that is “Activisation of distributors: A comprehensive study on active v/s

non-active distributors” the study on Individual Financial Advisors (IFA) is done. Basically

through this report it has been tried to know the reasons of distributors that why they are preferring

reliance mutual fund over other and vice-versa.

1- From how long are you ARN holder?

Duration No of Respondents

Less than 6months 2

Between 6months – 1year 24

Between 1year – 2years 46

More than 2years 78

Total 150


2

24

46

78

01020304050607080

No of Distributors

DURATION OF ARN HOLDER

Less than 6months

Between 6months – 1year

Between 1year – 2years

More than 2years

INTERPRETATION:-

By analyzing this chart and graph it is clear that the more than 50% of the distributors are working

for more than 2 years and rest of them are working less than 2 years.

2- In which fund/AMC do you deal more, mention it?

Company Name No of RespondentsRELIANCE 53

UTI 17ICICI 20HDFC 31TATA 14

OTHERS 15Total 150


36%

11%13%

21%

9%

10%

RELIANCE

UTI

ICICI

HDFC

TATA

OTHERS

INTERPRETATION:-

This pie chart shows that, the percentage of distributors working with RMF is more than in comparison to other company.

3- Which factors do you consider more while suggesting/advising investors about any fund?

Factors No of Respondents

Fund Rating 5Past year records 8

Brand Name/AMC 13Market Conditions 30NAV of the fund 24

All of them 70Total 150


3% 5%

9%

20%

16%

47%

Fund Rating

Past year records

Brand Name/AMC

Market Conditions

NAV of the fund

All of them

INTERPRETATION:-

By analyzing this chart and graph it is clear that most of the distributors agree that they consider all

the factors while advising but at the same time market conditions also considered.

4- What pattern of investment do you suggest more to the investors?

Pattern of Investment No of Respondents

Systematic Investment Plan (SIP) 83

One Time/ Lump Sum 67

Any other 0

Total 150


Systematic Investment Plan

)SIP(55%

One Time /LumpSum45%

INTERPRETATION:-

This pie chart shows that almost both pattern of investment are equally suggested by the

distributors.

5- Rank the factors of your choice which you like in RMF (1 for most preferred and 5 for least preferred).

FACTORS RANK1 RANK2 RANK3 RANK4 RANK5Scheme Performance 85 48 13 3 1

Sales Person Approach 24 36 30 22 38Service 22 20 83 15 10

Investors Demand 13 29 12 87 9


Brand Name 6 7 12 23 102TOTAL 150 150 150 150 150

85

48

133 1

0102030405060708090

No of Respondents

1 2 3 4 5

RANK

Scheme Performance

INTERPRETATION- This above graph clearly shows that the distributors prefer the scheme

performance of the RMF.


Sales Person Approach

24

36

30

22

38

0

5

10

15

20

25

30

35

40

1 2 3 4 5

RANK

No

of

Res

po

nd

ents


INTERPRETATION- This above graph clearly shows that the distributors are not very clear about

the sales persons approach.

22 20

83

1510

0102030405060708090

No of Respondents

Service

RANK

Service

INTERPRETATION- This above graph clearly shows that most of the distributors are given rank

3 to the service of RMF.


13

29

12

87

9

0

20

40

60

80

100

No of Respondents

Investors Demand

RANK

Investors Demand

INTERPRETATION- This above graph clearly shows that most of the distributors are given rank

4 to the investor’s demand of RMF.

Brand Name

6 712

23

102

1

2

3

4

5

INTERPRETATION- This above graph clearly shows that almost all the distributors are given

rank 5 to the brand name.


6- Rank the factors of your choice which you dislike in RMF ( 1 for most preferred and 4 for least preferred).

FACTORS RANK1 RANK2 RANK3 RANK4Brokerage 24 40 72 14

Sales Person Approach 47 49 34 20

Service Issues (opts) 55 50 24 21

Add Schemes 24 11 20 95

TOTAL 150 150 13 150

Brokerage

24

40

72

14

0

10

20

30

40

50

60

70

80

1 2 3 4

RANK

No

of

Res

po

nd

ents

Brokerage



47 49

34

20

0

10

20

30

40

50

60

1 2 3 4

RANK


12

34

Service Issues(opts)

55

50

24

21

0

10

20

30

40

50

60

RANK

Service Issues


Add Schemes24

11

2095

1 2

3 4

INTERPRETATION-

By analyzing all the above four graphs it is clear that distributors dislike reliance mutual fund due

to its service issues and sales person approach because almost half of the distributors mark these

two as rank 1 and rank 2 of disliking it.

After that brokerage is the main issue of disliking reliance mutual fund by the distributors, and add

schemes mark as rank 4 by most of the distributors this means that add schemes are not much

affected the liking and disliking the AMC.


7- What you like in the other AMCs (Mark them)?

ATTRIBUTES No of RespondentsBrokerage 34

Add Schemes 20Sales Person Approach 35

Service 46Scheme Performance 15

TOTAL 150

ATTRIBUTES LIKE IN OTHER AMC

Brokerage, 34

Add Schemes, 20

Sales PersonApproach ,35

Service, 46

SchemePerformance ,15 Brokerage

Add Schemes


Service

Scheme Performance

INTERPRETATION-

It is clear from this table and pie chart that distributors don’t like other AMC’s scheme

performance but they like their service and sales person approach.


8- Mention which service of RMF is poor than other AMCs which affects your decision?

ATTRIBUTES No of RespondentsBrokerage 20

Add Schemes 27Sales Person Approach 19

Operational Service 21Scheme Performance 3

Not any Service 60TOTAL 150

Brokerage, 20

Add Schemes, 27

Sales Person Approach, 19Operational Service,

21

Scheme Performance, 3

Not any Service, 60

INTERPRETATION- Pie chart very clearly indicates that almost half of the distributors

agree that no service of RMF is poor than any other AMC. But rest of the distributors said that add

schemes, operation issues, etc are there in the RMF.


9- Are you satisfied with the services of RMs?

Level of Satisfaction No of Respondents

Highly Satisfied 31

Satisfied 57

Neutral 40

Dissatisfied 22

Highly Dissatisfied 0

TOTAL 150

Level of Satisfaction

31

57

40

22

00

10

20

30

40

50

60

Highly Satisfied Satisfied Neutral Dissatisfied HighlyDissatisfied

NO

of

Res

po

nd

ents

INTERPRETATION- By analyzing this graph it very clear that more than 50% of the

distributors are satisfied and others are neutral means they all neither satisfied nor dissatisfied.


10- What are your expectations/suggestion regarding RMF?

SUGGESTIONS No of RespondentsNot Responded 55

Timely Statements 30More Additional Schemes 27

Increase Brokerage 16More learning Sessions 7

Others 15TOTAL 150

SUGGESTIONS

55

30

27

16

7

15

0 10 20 30 40 50 60

No of Respondents

Others

More learning Sessions

Increase Brokerage

More Additional Schemes

Timely Statements

Not Responded

INTERPRETATION - It is viewed that the more distributors are not responded to this particular question, rest of them are suggested that RMF should provide timely statements and more additional schemes.


FINDINGS


FINDINGS FROM THIS FIELD SURVEY

Through this survey it was concluded that the most distributors (IFA) of the

Varanasi are dealing in mutual funds more than two years and almost all the

distributors are dealing with all the major AMCs of India.

As per this survey Reliance mutual fund is the most preferred mutual fund

among the distributors (IFA) of the Varanasi.

According to this report distributors consider all the factors like market

conditions, NAV of the fund, past year records, etc while suggesting any fund

to their customers.

As per this survey, it is clear that the scheme performance of the reliance

mutual fund is most preferred by most of the distributors rather than the sales

person approach, service, etc.


The responses regarding sales person approach and operational service are not

so impressive it shows that the distributors are not very much happy with the

sales person approach and other operational services of the RMF.

At the same time the distributors are not very much satisfied with the

brokerage and additional local and national level schemes for the selling of the

fund.

Most of the distributors are satisfied with the services of RMs but at the same

time many of the distributors are neutral while answering.


SUGGESTIONS


The Reliance Mutual Fund Varanasi should

focus on following points-

It should provide more additional schemes for distributors.

It must improve the operational services like statements, NAV updating on

daily basis, photo state machine within the office premises, etc.

There should be at the regular interval meeting between the distributors and

company members.

Increase the training programs of the distributors.

Try to facilitate more interaction between senior members of the company to

the distributors.


LIMITATIONS


LIMITATIONS OF THE RESEARCH

Time limitation

Geographical limitation

Some respondents were not interested in filling the

questionnaire.


BIBLIOGRAPHY


BIBLIOGRAPHY

WEBSITES-

www.reliancemutual.com

www.wikipedia.com

www.amfiindia.com

www.relianceadagroup.com

BOOK - C.R.KOTHARI (RESEARCH METHOLOGY).

BOOK BY AMFI INDIA ON MUTUAL FUNDS

JOURNAL- ICFAI JOURNAL ON MUTUAL FUNDS.


http://www.relianceadagroup.com/

http://www.amfiindia.com/

http://www.wikipedia.com/

http://www.reliancemutual.com/

ANNEXURE

QUESTIONNAIREACTIVISATION OF DISTRIBUTORS: A COMPREHENSIVE

STUDY ON ACTIVE v/s NON-ACTIVE DISTRIBUTORSHello Sir/Madam, I am Sarvesh Mishra student of PGDM (IB)-III Semester from School of Management Sciences, Varanasi. I am doing my summer training in RELIANCE CAPITAL ASSET MANAGEMENT LTD (RELIANCE


MUTUAL FUND), VARANASI and my field survey topic is “Activisation of distributors: A comprehensive study on active v/s non-active distributors”. Please co-operate and help me by giving your valuable answers to the Questionnaire given below which help me for successful fulfillment of my project.This document will be kept confidential and will not share with anyone. This study is completely based for academic purpose and it is part of my curriculum of PGDM (IB) program.PERSONAL INFORMATION

NAME………………………………………………………………ARN No…………………………………………………………….AGE…………OCCUPATION……………………………………..ADDRESS…………………………………………………………..CONTACT NO. ……………………………………………………

1- From how long are you ARN holder?(a) Less than 6months [ ](b) Between 6months – 1year [ ](c) Between 1year – 2years [ ](d) More than 2years [ ]

2- In which fund/AMC do you deal more, mention it? ………………………………………………………

3- Which factors do you consider more while suggesting/advising investors about any fund?(a) Fund rating [ ](b) Past year records [ ](c) Brand Name/AMC [ ](d) Market Conditions [ ](e) NAV of the fund[ ](f) All of them [ ]

4- What pattern of investment do you suggest more to the investors?(a) Systematic Investment Plan(SIP) [ ](b) Lump-Sum/ One Time [ ](c) Any Other [ ]

5- Rank the factors of your choice which you like in RMF ( 1 for most preferred and 5 for least preferred).

ATTRIBUTES RANKScheme Performance


Sales Person ApproachServiceInvestors DemandBrand Name

6- Rank the factors of your choice which you dislike in RMF ( 1 for most preferred and 4 for least preferred).

ATTRIBUTES RANKBrokerageSales Person ApproachService Issues(opts)Add Schemes

7- What you like in the other AMCs (Mark them)?(a) Brokerage [ ](b) Add schemes [ ](c) Sales Person Approach [ ](d) Services [ ](e) Scheme Performance [ ]

8- Mention which service of RMF is poor than other AMCs which affects your decision?……………………………………………………………………………………………………………………………………………………..

9- Are you satisfied with the services of RMs?(a) Highly Satisfied [ ](b) Satisfied [ ](c) Neutral [ ] (d)Dissatisfied [ ](e)Highly dissatisfied [ ]

10-What are your expectations/suggestion regarding RMF?…………………………………………………………….


Documents

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