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A PROJECT REP ORT ON ROLE OF MUTUAL FUND ADVISOR IN MUTUAL FUND MARKET IN SURAT

SUBMITTED BY: TUSHAR PATEL PROJECT GUIDE: Ms. Parinaz Todiwala

INSTITUTE NAME: S.R LUTHRA INSTITUTE OF MANAGEMENT MBA PROGRAMME (2011 2013) UNIVERSITY NAME: GUJARAT TECHNOLOGICAL UNIVERSITY

CERTIFICATE OF THE GUIDE

This is to certify that the Project Work titled Role Of Mutual Fund Advisor In Mutual Fund Market In India is a bonafide work of Mr. Tushar Patel carried out in partial fulfillment for the award of degree of MBA FINANCE of Gujarat Technological

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University under my guidance. This project work is original and not submitted earlier for the award of degree / diploma or associate ship of any other University / Institution. Signature of the Guide __________________________ Name and Official Address of the Guide ___________________________________ Guides Academic Qualification _________________________________ Designation and Experience _____________________________ Place: Date:

ACKNOWLEDGMENT I would like to Express my deep feeling of gratitude to the under mentioned

Officials for their Assistance, external guidance, Inspiration before and through the Project (SIP). MY Special Thanks to Mr. Chirag Desai who is the branch manager and also Mr. Yogesh Joshi , Mr. Yogesh Gohel , Mr. Ravi Kachiwala who is the unit manager, for their external guidance.

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They show me a proper way to talk on for providing help and guidance. Through

the SIP, They have always been the source of encouragement. He has genuinely guided us in all the aspects of the project with his abundance of experience and logical ideas.

I would like to thanks to MR. Sarfaraz Patel who is Zonal Manager and Mr.

Manoj Patel who is Regional Manager at NJ South Gujarat. I am really gratitude about their precious contribution and guidance in project of my SIP. They have made me clear about the any confusion related to research study.

Working on project is tough, its need hard work and concentration, what made it

possible is the support. I received it from those who around me .I would like to say thanks to all the Senior Executives of Surat Branch of marketing departmental studies. They all treated me as their team member and that is very precious moments which I have spent with them during the training.

I am thankful to all faculties of my college. They were providing the accurate

information about the training guidelines and project preparation. My special thanks to Ms. Parinaz Todiwala. All Faculties and my internal guide. They have reduced my unfruitful efforts to complete the project work.

I am thankful to my parents who are always source of inspiration for my life. I am

thankful to my Classmates, friends and also those people who have helped me directly to completion of my Summer Internship Project.

DECLARATION

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I, Mr. Tushar Pravinbhi Patel hereby declare that the summer project report titled, Role of Mutual Fund Advisors In Mutual Fund Market In Surat is an original piece of work done by me and submitted to the Gujarat University in fulfillment of requirements for the award of Master of Business Administration under the supervision of Mr. Chirag Desai , Branch manager at Surat in N.J.INDIA PVT LTD. For the fulfillment of the award of post graduate program in management and whatever information has been taken from any sources has been duly acknowledged. I also declare that the data received from the survey has not been shared with any one and is only used for the purpose of preparing this report.

Date:

Signature of the Student

________________________

CONTENTS NO TOPIC EXECUTIVE SUMMARY (1) Introduction of the project PAGE. NO 7 8

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Introduction of the research topic Research objective & problem Research Methodology

8 9 10

(2)

Company profile Establishment Vision & Mission statement Product and Services Division of NJ Achievement Market Position & Market Share

12 13 15 17 18 21 22

(3)

Theoretical background

23

History of The Mutual Fund

25

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Regulations For Mutual Fund In India

28

Mutual Fund Structure

29

Advantages of Mutual Funds Disadvantages of Mutual Funds Types of Mutual Fund Schemes Risk Associate With Mutual Fund Market Segmentation AMC With NJ (4) Interpretation

30 32 34 39 41 44 46

(5) (6) (7)

Finding and suggestion Conclusion Bibliography

55 57 58

(8)

Annexure

59

EXECUTIVE SUMMARY

As a part of this course curriculum of MBA in Summer Internship Program, we are assigned some practical studies with a view to relate with theoretical knowledge for completing the summer internship project. I am preparing comprehensive report on mutual fund industry and role of its advisors in governing mutual fund market of India. In this tenure of 40-45 Days, I have garnered good experience about the function of a
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company, understanding of the market as well as sentiments of the advisors and investors of the market.

In this tenure I have interacted with different types of advisors which include Insurance advisors (Particularly LIC), Equity Investors , PPF, Postal agents, CA and Mutual Fund Advisors. With the current recession in the financial market, I have got different views of each of them, where equity related advisors are having rough time due to market crash down but there is boom for Postal Agent and PPF advisors where more and more investors are opting for secured investment forgetting the incentives in other investment avenues.

As a whole I have met, approximately 150 different advisors, for recruitment as a partner of NJ, many investors who are clients of the NJ advisor and about 100 mutual fund advisors(Particularly for Project). I have already recruited one Advisor as a partner for NJ which I hope will generate good business for NJ Fundz Network in Future. Apart from objective of generating business or completing the project for NJ, this field work has definitely upgraded me to understand the investment market in a much better way.

I have prepared a questionnaire, which includes the basic information related to mutual fund advisors, their choices for preferred scheme, preferred fund houses for each scheme, the factors they look to choose particular fund, the factors they look to customize the investment available, their views for different investment options like NFO or OLD Scheme, SIP or LUMPSUM investment and also the scope they see in mutual fund industry, which will help NJ and all AMC as what directs them so that they direct money to particular mutual fund house and different schemes, which will also allow NJ to target a new customer.

(1.)

INTRODUCTION OF PROJECT:

INTRODUCTION OF THE RESEARCH TOPIC:


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A Mutual Fund is well financial product. It is contributed to the India growth and also helped families for the investments many people did not know about the Mutual Fund out of 10 only 3 people know about that. If once people are aware of mutual fund Investment opportunities it may be chances that many investors agree with mutual fund. It is very inspirable for me to study on Role of Mutual Fund, It is main important Product for investing our money. We all aware about the world recession period, only India & China were Growing economy. India didnt affected more in world recession because Saving in our Blood. The question of whether or not to work with a Mutual Fund advisor is very personal. For some people, dealing with financial issues is unpleasant and requires a great degree of undesired discipline. For these people, the real question will be how to choose the right advisor, rather than whether or not to work with one. A Mutual fund's advisor has the primary responsibility for the investment performance of the fund. This responsibility may be shared with another investment advisory firm, with each advisor focusing on different asset types in a portfolio. For fund investors, judging the quality of a mutual fund's portfolio management is one of the most important considerations for investing in a fund. A Mutual Fund advisor help to investor to take decision, where they can get good return from investment.

RESEARCH PROBLEM AND OBJECTIVES: RESEARCH PROBLEM:

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From last 4-6 month, more fluctuation create in equity market, as a result company facing the problem of sales decline in mutual fund. NJ Fundz wants to know the current situation of Mutual Fund advisors. By this way it can able to provide services to them. Company facing problem to find out potential mutual fund advisors among Insurance advisors and other professional people like CA, advocates, tax consultant etc. Company wants to analysis that what was the Mutual Fund advisor Perception about NJ Fundz. NJ want to know that by research, how to invite Mutual fund advisor for business Opportunity programmed(BOP) and NJ wants to know that what the reason for not getting proper outcome from the BOP .

RESEARCH OBJECTIVES: To find out the perception of Mutual Fund advisor toward NJ and how many mutual fund advisors potential to become partner of NJ. To find out the duty and responsibility of Mutual Fund advisor and how they work with NJ . To find out the performance relative to different plans with similar fund style, fund risk, or substitute plans and how they show the benefits of clients and how the advisor helps to select the proper mutual fund plan to clients. To find out the way of handle the clients and maintain satisfaction with the commitment of their clients To find out how Mutual Fund advisors getting the opinion of clients regarding Mutual Fund and what they feel about availing the service of Mutual Fund advisor. RESEARCH METHODOLOGY:

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Research methodology gives students the necessary training in gathering materials and arranging them, participation in the field work when required and techniques for the collection of data appropriate to a particular problem in the use of statistics questionnaire and controlled experimentation and in recording evidence, sorting it out and interpreting it thereafter. RESEARCH DESIGN: In this research, descriptive study done on the topic. descriptive study, Who, What, When, Where, How are the questions for researcher to find their answers during the study. A descriptive study may be simple or complex. My research study topic is according to the descriptive study. I have needed to find that all answers of these questions which come in descriptive study.

SOURCES OF DATA COLLECTION: Primary Source:In this research study, survey is primary source of data collection. To measure the role of Mutual Fund advisors about mutual Fund, I conduct survey on Mutual Fund advisors. Secondary Source:Secondary data sources are like book, magazines, company booklets, bibliographies, newspaper, dictionaries, textbooks, handbooks. Second sub topic is study on mutual fund of my research study. I select the AMFI text book, financial newspaper; NJ Mutual funds information booklets, NJs magazines for the collection of secondary data. Also the interpretation of the primary data which collected from the survey.

SAMPLING:

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The basic idea of sampling is that by selecting some of the elements in a population, we may draw conclusions about the entire population. A population element is the individual participant or object on which the measurement is taken.

SAMPLE STUDY: Sample Size:Sample size is selected portion of all the population. My study was conducted in Surat. There are more than 900 Mutual Fund advisors in Surat, In witch I personally meet around 150 Mutual Fund advisors from all of them and take 50 Mutual Fund advisors as sample size. Sample Unit:Sample unit in this study only Mutual Fund Advisors because my research study was conducted only on Mutual Fund Advisors.

(2.) ABOUT NJ INDIA INVEST

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Head Office:

Surat Branch:

NJ FUNDZ Center 9th Floor "B" Tower, Udhna Udyog Nagar Sangh Commercial Complex, Central Road No. 10, Udhna, Surat-394210. Phone - 0261 3985500

NJ Fundz Network 7th floor, Vishvakarma Arcade, Majura Gate Surat.

ESTABLISHMANT OF NJ INDIA INVEST: NJ FUNDZ INDIA INVEST is story of two dynamic young persons. Both have passion to do something different. Niraj Choksi from Surat and Jignesh Desai from Navsari are two young risk taker leaders provident Both have ambitions to do something new in
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investment sector After completion of 12th standard higher secondary education by Niraj Choksi he want to Vallbh Vidhyanager for Pursuing BBA degree Other side Jignesh Desai was also was in Vallabh Viidhyanagar for pursuing the diploma degree in civil engineering. Both youngsters from different cities were room partners at hostel both had completed their degree education but both were thought different to do in next career. Ravindrabhai choksi father of the Neeraj was industrialist but he refused to join with his father. Other side Jignesh Desai is also had different thinking. Both have decided to make a partnership and work together on the new way. This partnership was the reason of born of NJ FUNDZ INDIA INVEST. In 1993 they had started share broking office at Nanavati in Surat. This small start might be change in big empire this not to them. They had installed computer system to analyze the market volatility at that time. Computer system made them different from other share brokers. For the market study, the computer system worked efficiently with prefect result. This changed make by both youngsters in market. Because at that time Computer did not use to study share market. Both had an analyzed that to invest money in share market was so risky but it was not risky in mutual Fundz than share market. They had studied market and choose the different way. They had concentrated on mutual Fundz industry. In 1994, they had started NJ FUNDZ Capital Stock. Initially this was a share broking company but they turn toward the mutual Fundz in 1995-96. After started the business of mutual funds, they had seen Harshant Mehata share market scam. Investors had decided to stop invest money in market forever. But both partners had kept patience and they wait for good time. This was the difficult situation for the NJ FUNDZ but after this situation NJ FUNDZ has made the successful progress in mutual funds industry. Today in capital market NJ FUNDZ has invested 8500/- CR. In mutual funds. With the huge empire, NJ FUNDZ is going straightforward in market with large experience and support of knowledge.

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Bussiness Type Primary Competitive Advantage Assets Under Advice No. Of Amfi Certified Advisors Clients No. of Branches Employees

Mutual Fund Distributor Back office and Technology Support 8500 crore (Approximately) Above 15000 Over 12, 00,000 140 Branches in 22 States Over 1200

Board of directors: The Board of Directors of the Company has, as its members, eminent persons from Industry, Finance, Investment and other branches of business, who bring diverse experience and expertise to the Board. The Company's current Board of Directors is as follows: KEYMEMEBERS OF MANAGEMENT Mr. Niraj Choksi Mr. Jignesh Desai Jt.Manajing Director Jt.Manajing Director

Executive Team Name Mr.Shirish patel Mr. Vinayak Rajput Departmental Head Information technology Operation & customer care Mr. Tejas soni Mr. Abhishek Dubey Finance Business Process Management Mr.Samnvay Maniar Mr. Jignesh Desai Marketing Real Estate

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Mr. Viral Shah

Research & Development

Mr. Dhaval Desai

Human research

NJ India Invest Pvt. Ltd. is one of the leading advisors and distributors of financial products and services in India. Established in year 1994, NJ has over a decade of rich exposure in financial investments space, portfolio advisory services and distribution of financial products. At NJ we exist to provide quality financial / investment advisory solutions to customers of diverse profiles and needs. We aim to take the benefits of a maturing Indian financial market to the masses and provide them with solutions that best serve their interests.

Mission & Vision: Vision: To be the leader in our sector of business through total Customer Satisfaction, Commitment to Excellence, Determination to Succeed and finally to provide peace of mind on investment front to society.

Mission: Ensure creation of value by providing a differentiating edge to the activities of our customers, investors and distributors through techno-innovative solutions while fulfilling our social obligations and maintaining high professional and ethical standards along with the service standards.

Quality policy at NJ India Invest: NJ aims at providing high quality service on investment front through systematic and professional approach backed by total management commitment and teamwork. To
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achieve customer satisfaction at a cost that represents value. We as a whole are committed to practice a policy. RIGHT AT THE FIRST TIME & THEN CONTINEOUS IMPROVEMENT IN OUR ACTION & DEALING.

Products offer by Nj india invest Products: NJ offers advisory and distribution services on the following products. Investment Products:

Mutual funds covering all AMCs & all schemes, Fixed Deposits of companies, PMS products (Third party & NJ) Government/RBI bonds, Infrastructure Bonds, Approved securities for charitable trusts, etc

Real Estate:

Residential properties Commercial properties

Training & Education:


Certification training courses AMFI CFP Training product

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Services offer by Nj india invest An Advisor working as NJ Fundz Network Partner enjoys many privileges and advantages over any other normal advisor like, Online Personal Investment Account to Clients Quality, Comprehensive, Insightful Reports to Clients Automatic Capturing of MF Transaction Online Query Management Module for queries Superior and comprehensive Product Offerings Comprehensive Email Subscriptions Web Brand presence with your Own Website Complete access to Clients accounts Comprehensive Marketing Support Comprehensive Sales Support Regular Events, Seminars and Meets Your own Online Business Account on Partners Desk Automatically Updated Online MIS Reports Insightful reports on Business and Clients Transaction processing/acceptance at NJ Service Centers Comprehensive training modules under I-Gurukul Regular Interaction with Industry Experts Regular Personal Meetings and Group Meetings

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Support and help on an on-going day-to-day basis Business strategy and planning assistance from experts On-going planning and management guidance

NJ major differianting factor us the platform they provide to advisors to start and run business successfully. The Below 360* platform shows how varies and exhaustive NJ services have been.

DIVISIONS OF NJ INDIA INVEST:

NJ INDIA INVEST

NJ Fundz Realty

NJ Wealth

NJ Gurukul

Finlogic

NJ

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Network

Advisors

Technologies Pvt Ltd

NJ Fundz Network, started in 2003, is a dedicated channel for providing independent financial advisors or IFA's with a complete business platform for the strengthening and development of their advisory practice. NJ offers advisors under its network will all the products; support and services that enables them add considerable value to their business, emerge as a 'new age professional financial advisor' and compete confidently in the industry.

Established as a distinct entity, NJ Wealth Advisors Pvt. Ltd. seeks to offer comprehensive financial planning and portfolio advisory services to premium clients. NJ Wealth Advisors offers its clients with quality, unbiased, need-based advisory services & investment solutions.

NJ Wealth Advisors is a provider of comprehensive investment advisory and product distribution services. With a strong lineage, NJ Wealth Advisors possesses rich experience and strong domain understanding in delivering quality investment advisory services to its clients.
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This division provides the training to their employee regarding the how to selling the products and services in the market and also give the current scenario about the position about the mutual fund. This sporadic growth in terms of need of performers in financial advisory services has lead to the crunch of available performers. Though lots of youngsters are getting into financial advisory services, but the greatest challenge is of RIGHT SELLING, for which adequate Training is a prerequisite. Advisory function demands updated knowledge, backed up by honed skills to fetch effective business.

Today, NJ Gurukul has emerged as the leading provider of training solutions with a considerable contribution to the financial advisory industry. It is a silent worker, now being noticed not only by NJ Network Partners but even by students looking forward for steering to be successful, by corporates to bring shine to their employees, by industries to become more functional and by all to learn correct English through NJ Gurukul's classroom as well as the Distance Learning Programs, English for all.

Finlogic Technologies India Pvt Ltd (previously Finlogic India) was started in 2000 with a view to develop software applications to support the growing (financial services) distribution business. The company possesses strong domain knowledge in the investment distribution space, as the company was promoted by NJ India Invest Pvt Ltd, a leading investment distribution company.

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Technology has traditionally been NJ's key strength. Our offering on the technological front is unmatched, vibrant, and comprehensive in nature. Our focus & commitment on technology can be gauged from the fact that we have set-up distinct entity with a very strong, talented work-force for the sole purpose of providing the best to NJ in terms of technology and support. Finlogic Technologies (India) Pvt. Ltd. does all the development & support work in-house on a continuous basis. It has successfully developed & implemented a powerful support system for the mutual fund distribution business at NJ with a provision for integrating the same with other investment products as well as the financial accounting system.

At NJ India Realty, company understands the challenges in shaping reality from your realty aspirations. With companys fully integrated end-to-end service model it offers solutions that would enable you to meet the challenges of development, fortify your own transformation and exploit the opportunities available in the Indian realty sector. At NJ India Realty they have made backward & forward integration of value-added services to the core-realty services which lie at the heart of the business. The services at NJ India Realty enable continual partnership right from idea to its reality, encompassing all functional & operational undertakings.

Achievement of Nj India invest Some of the awards & recognitions that we have received in past.. Year 2000: For Outstanding Performance presented by Chairman, Prudential Plc. at London Year 2002: For Outstanding Performance presented by Group Chief Executive, Prudential Plc. at London Year 2003: For Outstanding Performance presented by Group Chief Executive, Prudential Plc. at

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London Year 2004: Among Most Valued Business Associates presented by HDFC Standard Life at Edinburgh, Scotland Year 2004: For Outstanding Performance by Deputy CEO, Prudential Singapore at Malaysia Year 2006: Award for mobilising the Highest Number of SIPs at National Level by Fidelity Mutual Fund Plc at Mumbai Year 2006: Award Vietnam

Comments from Industry Stalwarts: The essence of investment consultancy lies in optimal asset allocation as against security selection or timing the markets for clients. NJ understands this very well and has added significant value to the clients through this approach. I am sure with this new initiative; a much larger number of clients will be able to benefit from this approach. I wish them all the best in this initiative - Prashat Jain, CIO, HDFC AMC

The success of any business lies in innovation ahead of times and NJ has proved it time again - Rajan Krishnan, Principal Pnb AMC

MARKET POSITION & MARKET SHARE: We are headquarters in Surat, India and have more than INR 8500*Cr. Of mutual fund assets under advice, with a wide presence at over 110* location in 22* states in India. The numbers are reflection of the trust, Commitment and value the NJ FUNDZ
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shares with 11 lacs customer base with over 15000 advisors. As private organization of financial advisors.

Market Share: NJ FUNDZ INDIA INVEST has market share of 20% out of all mutual funds industry. In worldwide recession time NJ FUNDZ market share increased from 10% to 16%. This shows that NJ FUNDZ has in Mutual funds industry. It is one of the prominent investment avenue centre for advisors and their investors in market.

(3.) INTRODUCTION OF MUTUAL FUNDS

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.

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


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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. When an investor subscribes for the units of a mutual fund, he becomes part owner of the assets of the fund in the same proportion as his contribution amount put up with the corpus (the total amount of the fund). Mutual Fund investor is also known as a mutual fund shareholder or a unit holder. Any change in the value of the investments made into capital market instruments (such as shares , debentures etc) is reflected in the Net Asset Value (NAV) of the scheme. NAV is defined as the market value of the Mutual Fund scheme's assets net of its liabilities NAV of a scheme is calculated by dividing the market value of scheme's assets by the total number of units issued to the investors.

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Definition of Mutual Fund:

Mutual Fund investments are Collective Investment Schemes, which collect contribution from the subscribers and invest them in a variety of transferable assets such as ordinary shares and bonds. These Trusts are run by experienced Investment Managers who use their knowledge and expertise to select individual securities, which are classified to form portfolios that meet predetermined objectives and criteria. These portfolios are then sold to the public.

HISTORY OF MUTUAL FUND IN INDIA

The origin of mutual fund industry in India is with the introduction of the concept of mutual fund by UTI in the year 1963. Though the growth was slow, but it accelerated from the year 1987 when non-UTI players entered the industry. In the past decade, Indian mutual fund industry had seen a dramatic improvements, both quality wise as well as quantity wise. Before, the monopoly of the market had seen an ending phase, the Assets Under Management (AUM) was Rs. 67bn. The private sector entry to the fund family rose the AUM to Rs. 470 bn in March 1993 and till April 2004, it reached the height of 1,540 bn. Putting the AUM of the Indian Mutual Funds Industry into comparison, the total of it is less than the deposits of SBI alone, constitute less than 11% of the total deposits held by the Indian banking industry

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The main reason of its poor growth is that the mutual fund industry in India is new in the country. Large sections of Indian investors are yet to be intellectuated with the concept. Hence, it is the prime responsibility of all mutual fund companies, to market the product correctly abreast of selling.

Low Penetration of Mutual Funds in India:Few people have been exposed to the idea & advantages of mutual funds and even fewer actually invest in mutual funds, because of lack of adequate no. of advisors

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 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 of India. The history of mutual funds in India can be broadly divided into four distinct phases First Phase 1964-87 Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up by the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank of India. In 1978 UTI was delinked 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.

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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) With the entry of private sector funds in 1993, a new era started in the Indian mutual fund industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year in which the first Mutual Fund Regulations came into being, under which all mutual funds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the 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. The number of mutual fund houses went on

increasing, with many foreign mutual funds setting up funds in India and also the industry has witnessed several mergers and acquisitions. As at the end of January 2003, there were 33 mutual funds with total assets of Rs. 1,21,805 crores. The Unit Trust of India with Rs.44,541 crores of assets under management was way ahead of other mutual funds. Fourth Phase since February 2003 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 Specified Undertaking of Unit Trust of India, functioning under an administrator and under the rules framed by Government of India and does not come under the purview of the Mutual Fund

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Regulations.

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

LIC. It is registered with SEBI and functions under the Mutual Fund Regulations. With the bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76,000 crores of assets under management and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund Regulations, and with recent mergers taking place among different private sector funds, the mutual fund industry has entered its current phase of consolidation and growth. The graph indicates the growth of assets over the years.

REGULATIONS FOR MUTUAL FUND IN INDIA SEBI was established to promote the orderly and healthy development of securities market and to provide adequate investor protection. SEBI has an independent constituted board with regulatory powers over stock exchange, merchant banking, brokers, registrar and transfer agents, custodians, mutual funds and capital issues. SEBI issues guidelines for various market players to conform with. All players need to register with SEBI and consent to comply with the regulations of SEBI. In the case of
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mutual funds, the SEBI guidelines were first issued in the SEBI Mutual Fund Regulations of 1993. In December 1996, SEBI published the revised Mutual Fund Regulations, 1996, regulating several aspects including management fees, expenses, NAV calculation and standardized reporting practices.

MUTUAL FUND STRUCTURE To understand and appreciate the different techniques employed by Mutual Funds to market and sell their units, it is imperative that we first understand the objectives and aims that these funds have towards their customers. It is only in this light that we would be able to completely comprehend their marketing strategies.

Who can invest in mutual funds in India?


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Mutual funds have been emerging as a big financial intermediary in India. In a vast country like India it is a challenge to market these funds. Fund distributors are a very important link between the fund management industry and the investors. However, it is equally essential to know who can invest in mutual funds in India. Mutual funds in India are open to investment for:

a) Residents Including: 1. Resident Indian Individuals 2. Indian Companies 3. Indian Trusts / Charitable Institutions 4. Banks 5. Non-Banking Finance Companies 6. Insurance Companies 7. Provident Funds

b) Non-Residents including: 1. Non-Resident Indians 2. Other Corporate Bodies (OCBs)

c) Foreign Entities: 1. Foreign Institutional Investors (FIIs) registered with SEBI 2. Foreign citizens and other foreign entities are not allowed to invest in mutual funds in India

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Why invest in a mutual fund?

1. Professional Management Experience and professional people thoroughly analyze the economy/markets to spot good investment opportunities.

2. Diversification of Risk Reduces the risk to which you would've been exposed by investing in a single stock/bond invests in a broad cross section of industries or companies - negative performance of one security will not have as much of an impact on the fund.

3. Liquidity & Convenience You will be able to get your money back within a short period as compared to other securities.

4. Very Little Paper Work Helps avoid problems such as bad deliveries, delayed payments and unnecessary follow up with brokers and companies.

5. Tax Efficiency Some mutual fund schemes offer tax benefits under Section 88. Dividends declared under mutual fund schemes are tax free in the hands of the investor (However, some funds are

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required to pay dividend distribution tax).

6. Low Transaction Cost This is one of the important point to be considered for investing in mutual funds. If one person goes to purchase different equity stocks than its transaction cost leads to very high wherein mutual fund has comparatively very low transaction cost and also diversify the portfolio effectively.

7. Transparency Investors get regular information on the value of their investment in addition to disclosure on the specific investments made by their scheme, the proportion invested in each class of assets and the fund manager's investment strategy and outlook.

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. Affordability Investors individually may lack sufficient funds to invest in high-grade stocks. A mutual fund because of its large corpus allows even a small investor to take the benefit of its investment strategy.

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Why Not Invest in Mutual Fund ? 1. Entry and Exit load Mutual funds are a victim of their own success. When a large body like a fund invests in shares, the concentrated buying or selling in adverse price movements lay at the time of buying, the fund ends up paying a higher price and while selling it realize a lower price. This problem is especially severe in emerging markets like India, where, excluding a few stocks, even the stocks in the Sensex are not liquid. Let alone stocks in the NSE 50 or the CRISIL 500. So there is simply no way that a fund can beat the Sensex or any other index, if it is blindly invests in the same stocks as those in the Sensex and in the same proportion.

2. No control over costs The costs of the fund management process are deducted from the fund. This includes marketing and initial costs deducted at the time of entry itself, called, Load. Then there is the annual asset management fee and expenses, together called the expense ratio. Usually, the former is not counted while measuring performance, while the latter is. A Standard 2 percent expense ratio means that, everything else being equal, the fund manager under performs the benchmark index by an equal amount.

3. No tailor-made portfolio The portfolio of a fund does not remain constant. The extent to which the portfolio changes is a function of the style of the individual fund manager i.e. whether he is a buy and hold type of manager or one who aggressively churns the fund. It is also depends on the volatility of the fund

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size i.e. whether the fund constantly receives fresh subscriptions and redemptions. Such portfolios changes have associated costs of brokerage, custody fees, registration fees etc. that lowers the portfolio return commensurately 4. No Guarantee of return No investment is risk free. If the entire stock market declines in value, the value of mutual fund shares will go down as well, no matter how balanced the portfolio. Investors encounter fewer risks when they invest in mutual funds than when they buy and sell stocks on their own. However, anyone who invests through a mutual fund runs the risk of losing money.

5. Taxes During a typical year, most actively managed mutual funds sell anywhere from 20 to 70 Percent of the securities in their portfolios. If your fund makes a profit on its sales, you will pay taxes on the income you receive, even if you reinvest the money you made.

6. Management risk When you invest in a mutual fund, you depend on the fund's manager to make the right decisions regarding the fund's portfolio. If the manager does not perform as well as you had hoped, you might not make as much money on your investment as you expected. Of course, if you invest in Index Funds, you forego management risk, because these funds do not employ managers.

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TYPES OF MUTUAL FUNDS


INDEX FUND

Based on Struct ure

Based on Invest ment

DIVIDEND YIELD FUND


EQUITY DIVERSIFIED

THEMATIC FUNDS
SECTOR FUNDS ELSS FUNDS DEBT ORIENTED EQUITY ORIENTED

MUTUAL FUNDS

OPEN ENDED

EQUITY FUNDS

BALAN CED CLOSE ENDED

LIQUID FUNDS GILT FUNDS INCOME FUNDS FMPs FLOATING RATE FUNDS ARBITRAGE FUNDS

DEBT FUNDS

MIPs

A Mutual Fund may float several schemes, which may be classified on the basis of its structure, its investment objectives and other objectives.

Open Ended Schemes

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As the name implies the size of the scheme (fund) is open i.e. not specified or predetermined. Entry to the fund is always open, the investor who can subscribe at anytime. Such fund stands ready to buy or sell its securities at anytime. The key feature of Open-ended schemes is Liquidity. It implies that the capitalization of the fund is constantly changing as investors sell or buy their shares. Further, the shares or units are normally not traded on the stock exchange but are repurchased by the funds at announced rates. Open-ended schemes have comparatively better liquidity despite the fact that these are not listed. The reason is that investors can any time approach mutual fund for sale of such units. No intermediaries are required. Moreover, the realizable amount is certain since repurchase is at a price based on declared net asset value (NAV). The portfolio mix of such schemes has to be investments, which are actively traded in the market. Otherwise it will not be possible to calculate NAV. This is the reason that generally open-ended schemes are equity based. In Open-ended schemes, the option of dividend reinvestment is available.

Close-Ended Schemes A Close ended schemes have a definite period after which their shares/units are redeemed. The scheme is open for subscription only during a specified period at the time of launch of a scheme. Investors can invest in the scheme at the time of the initial public issue and thereafter they can buy or sell the units of the scheme on the stock exchanges where the units are listed. In order to provide an exit route to the investors, some close-ended funds give an option of selling back the units to the mutual fund through periodic repurchase at NAV related prices. In these types of schemes, the size of the fund kept to be constant. SEBI regulations stipulate that at least one of the two exit routes is provided to the investor i.e. either repurchase facility or through listing on stock exchanges. These mutual funds schemes disclose NAV generally on weekly basis.

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Interval schemes Interval Schemes combine the features of both open-ended and close-ended schemes. They are open for sale or redemption during pre-determined intervals at NAV based prices.

Mutual Fund schemes by Investment Objectives:

EQUITY FUNDS These funds invest a major part of their corpus in equities. The composition of the fund may vary from scheme to scheme and the fund managers outlook on various scrips. The Equity Funds are sub-classified depending upon their investment objective, as follows: 1. Growth Fund: Aim to provide capital appreciations over the medium to long term. These schemes normally invest a majority of their funds in equities and are willing to bear short term decline in value for possible future appreciation. These schemes are not for investors seeking regular income or needing their money back in the short-term. 2. Diversified Equity Fund: Diversified equity funds are the most popular among investors. They invest in many stocks across many sectors, and because they have the freedom to chop and churn their portfolios as they like, diversified equity funds are a good proxy to the stock market. If a general exposure to equities is what you want, they are a good option. They can invest in all listed stocks, and even in unlisted stocks. They can invest in which ever sector they like, in whatever ratio they like.

3. Equity Linked Savings Schemes (ELSS): Equity linked savings schemes (ELSS) are diversified equity funds that additionally offer income tax benefits to individuals. ELSS is one of the many section 80c instruments, along with the more
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popular debt options like the PPF, NSC and infrastructure bonds. In this Section 80c grouping. ELSS is unique. Being the only instrument to offer a total equity exposure.

4. Index Fund: An index fund is a diversified equity fund; with a difference- a fund manager has absolutely no say in stock selection. At all times, the portfolio of an index fund mirrors an index, both in its choice of stocks and their percentage holding. As of March 2004, equity index funds tracked either the Sensex or the Nifty. So, an index fund that mirrors the Sensex will invest only in the 30 Sensex stocks, which too in the same proportion as their weight age in the index.

5. Sector Fund: Sector funds invest in stocks from only one sector, or a handful of sectors. The objective is to capitalize on the story in the sectors, and offer investors a window to profit from such opportunities. Its a very narrow focus, because of which sector funds are considered the riskiest among all equity funds. 6. Mid Cap Fund: These are diversified funds that target companies on the fast growth trajectory. In the long run, share prices are driven by growth in a companys turnover and profits. Market players refer to them as mid-sized companies and mid-cap stocks with size in this context being benchmarked to a companys market value. So, while a typical large cap stock would have a market capitalization of over Rs 1,000 crores, a mid-cap stock would have a market value of Rs 250-2,000 crores.

DEBT FUNDS These Funds invest a major portion of their corpus in debt papers. Government authorities, private companies, banks and financial institutions are some of the major issuers of debt papers. By investing in debt instruments, these funds ensure low risk and provide stable income to the investors.

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Debt funds are further classified as: 1. Gilt Funds: Invest their corpus in securities issued by Government, popularly known as GOI debt papers. These Funds carry zero Default risk but are associated with Interest Rate risk. These schemes are safer as they invest in papers backed by Government.

2. Income Funds: Income funds aim to maximize debt returns for the medium to longer term. Invest a major portion into various debt instruments such as bonds, corporate debentures and Government securities.

3. MIPs: Invests around 80% of their total corpus in debt instruments while the rest of the portion is invested in equities. It gets benefit of both equity and debt market. These scheme ranks slightly high on the risk-return matrix when compared with other debt schemes.

4. Short Term Plans (STPs): Meant for investors with an investment horizon of 3-6 months. These funds primarily invest in short term papers like Certificate of Deposits (CDs) and Commercial Papers (CPs). Some portion of the corpus is also invested in corporate debentures.

5. Liquid Funds: Also known as Money Market Schemes, These funds are meant to provide easy liquidity and preservation of capital. These schemes invest in short-term instruments like Treasury Bills, inter-bank call money market, CPs and CDs. These funds are meant for short-term cash management of corporate houses and are meant for an investment horizon of 1day to 3 months. These

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schemes rank low on risk-return matrix and are considered to be the safest amongst all categories of mutual funds.

6. Floating Rate Funds: These income funds are more insulated from interest rate than their conventional peers. In other words, interest rate changes, which cause the NAV of a conventional debt fund to go up or down, have little, or no, impact on NAVs of floating rate funds.

BALANCED FUNDS These funds, as the name suggests, are a mix of both equity and debt funds. They invest in both equities and fixed income securities, which are in line with pre-defined investment objective of the scheme. These schemes aim to provide investors with the best of both the worlds. Equity part provides growth and the debt part provides stability in returns. Each category of funds is backed by an investment philosophy, which is pre-defined in the objectives of the fund. The investor can align his own investment needs with the funds objective and invest accordingly.

HYBRID FUNDS:-

1. Growth and Income Fund: Strike a balance capital appreciation and income for
the investors. In these funds portfolio is a mix between companies with good dividend paying record and those with potential capital appreciation. These funds are less risky than growth funds bit more than income funds.

2. Asset Allocation Fund: These funds follow variable asset allocation policy.
These move in an out of an asset class (equity, debt, money market or even nonfinancial assets). Asset allocation funds are those, which follow more stable

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allocation policies like balanced funds. Those, which flexible allocation policies, are like aggressive speculative funds.

Risks associated with Mutual Fund:

THE RISK-RETURN TRADE-OFF The most important relationship to understand is the risk-return trade-off. Higher the risk greater the returns/loss and lower the risk lesser the returns/loss. Hence it is up to you, the investor to decide how much risk you are willing to take. In order to do this you must first be aware of the different types of risks involved with your investment decision.

MARKET RISK:

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Sometimes prices and yields of all securities rise and fall. Broad outside influences affecting the market in general lead to this. This is true, may it be big corporations or smaller mid-sized companies. This is known as Market Risk. A Systematic Investment Plan (SIP) that works on the concept of Rupee Cost Averaging (RCA) might help mitigate this risk.

CREDIT RISK: The debt servicing ability (may it be interest payments or repayment of principal) of a company through its cash flows determines the Credit Risk faced by you. This credit risk is measured by independent rating agencies like CRISIL who rate companies and their paper. An AAA rating is considered the safest whereas a D rating is considered poor credit quality. A well-diversified portfolio might help mitigate this risk.

INFLATION RISK: Things you hear people talk about: Rs. 100 today is worth more than Rs. 100 tomorrow. Remember the time when a bus ride costed 50 paisa? The root cause, Inflation. Inflation is the loss of purchasing power over time. A lot of times people make conservative investment decisions to protect their capital but end up with a sum of money that can buy less than what the principal could at the time of the investment. This happens when inflation grows faster than the return on your investment. A well-diversified portfolio with some investment in equities might help mitigate this risk. INTEREST RATE RISK: In a free market economy interest rates are difficult if not impossible to predict. Changes in interest rates affect the prices of bonds as well as equities. If interest rates raise the prices of bonds fall and vice versa. Equity might be negatively affected as well in a rising interest rate environment. A well-diversified portfolio might help mitigate this risk.
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POLITICAL/GOVERNMENT POLICY RISK: Changes in government policy and political decision can change the investment environment. They can create a favorable environment for investment or vice versa.

LIQUIDITY RISK: Liquidity risk arises when it becomes difficult to sell the securities that one has purchased. Liquidity Risk can be partly mitigated by diversification, staggering of maturities as well as internal risk controls that lean towards purchase of liquid securities.

SEGMENTATION OF MUTUAL FUND MARKET: Different segments of the market have different risk-return criteria, on the basis of which they take investment decisions. Not only that, in a particular segment also there could be different sub-segments asking for yet different risk-return attributes, and differential preference for various investments attributes of financial product. Different investment attributes an investor expects in a financial product are: Liquidity, Safety of principal, Tax treatment, Dividend or interest income, Regulatory restrictions, Time period for investment, etc On the basis of these attributes the mutual fund market may be broadly segmented into five main segments as under.
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1) Retail Segment This segment characterizes large number of participants but low individual volumes. It consists of individuals, Hindu Undivided Families, and firms. It may be further subdivided into: i. Salaried class people;

ii. Retired people; iii. Businessmen and firms having occasional surpluses; iv. HUFs for long term investment purpose. These may be further classified on the basis of their income levels. It has been observed that prospects in different classes of income levels have different patterns of preferences of investment. Similarly, the investment preferences for urban and rural prospects would differ and therefore the strategies for tapping this segment would differ on the basis of differential life style, value and ethics, social environment, media habits, and nature of work. Broadly, this class requires security of the principal, liquidity, and regular income more than capital appreciation. It lacks specialised investment skills in financial markets and highly susceptible to mob behaviour. The marketing strategy involving indirect selling through agency network and creating awareness through appropriate media would be more effective in this segment. 2) Institutional Segment This segment characterises less number of participants, and large individual volumes. It consists of banks, public sector units, financial institutions, foreign institutional investors, insurance corporations, provident and pension funds. This class normally looks for more specialised professional investment skills of the fund managers and expects a structured product than a ready-made product. The tax features and regulatory

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restrictions are the vital considerations in their investment decisions. Each class of participants, such as banks, provides a niche to the fund managers in this segment. It requires more of a personalised and direct marketing to sustain and increase volumes. 3)Trusts This is a highly regulated, high volumes segment. It consists of various types of trusts, namely, charitable trusts, religious trust, educational trust, family trust, social trust, etc. each with different objectives. Its basic investment need would be safety of the principal, regular income and hedge against inflation rather than liquidity and capital appreciation. This class offers vast potential to the fund managers, if the regulators relax guidelines and allow the trusts to invest freely in mutual funds. 4)Non-Resident Indians This segment consists of very risk sensitive participants, at times referred as fair weather friends. They need the highest cover against political and exchange risk. They normally prefer easy exit with repatriation of income and principal. They also hold a strategic importance as they bring in crucial foreign exchange a crucial input for developing country like ours. Marketing to this segment requires special kind of products for groups of foreign countries depending upon the provisions of tax treaties. The range of suitable products is required to design to divert the funds flowing into bank accounts. 5)Corporate Generally, the investment need of this segment is to park their occasional surplus funds that earn return more than what they have to pay on account of holding them. Alternatively, they also get surplus fund due to the seasonality of the business, which typically become due for the payment within a year or quarter or even a month. They need short term parking place for their fund,. This segment offers a vast potential to specialised money market managers. Given the relaxation in the regulatory guidelines, fund managers are expected design products to this segment.

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Thus, each segment and sub-segment has their own risk return preferences forming niches in the market. Mutual funds managers have to analyse in detail the intrinsic needs of the prospects and design a variety of suitable products for them.

AMCs with NJ IndiaInvest: NAME OF COMPANY LOGO AUM(in crore) (as end of june 2009) 6,184 ABN AMRO MUTUAL FUND AIG GLOBAL INVESTMENT GROUP MUTUAL FUND 41,423 BIRLA MUTUAL FUND 68 BOB MUTUAL FUND 4,568

4,204 CANARA ROBECO MUTUAL FUND 1,853 12,405 21,560 171

DBS CHOLA MUTUAL FUND DEUTSCHE MUTUAL FUND DSP MERRILL LYNCH MUTUAL FUND ESCORTS MUTUAL FUND

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FIDELITY MUTUAL FUND FRANKLIN TEMPLETON MUTUAL FUND HDFC MUTUAL FUND HSBC MUTUAL FUND

8880 27,991 56,107 18,472

IDFC MUTUAL FUND 14,273

PRUDENTIAL ICICI MUTUAL FUND ING SAVINGS TRUST JM MUTUAL FUND JP MORGAN MUTUAL FUND KOTAK MAHINDRA MUTUAL FUND LIC MUTUAL FUND LOTUS INDIA MUTUAL FUND MIRAE ASSET MUTUAL FUND MORGAN STANLEY MUTUAL FUND

59060 8975 12,968 2,730 22,170 18,649 7,883 2,160 3510 16,705

PRINCIPAL MUTUAL FUND 98,431 RELIANCE MUTUAL FUND

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SAHARA MUTUAL FUND SBI MUTUAL

198 31,795 14,273

SUNDARAM BNP PARIBAS MUTUAL FUND

14,594

24,496 TATA MUTUAL FUND 3,36

TAURAS MUTUAL FUND UNIT TRUST OF INDIA (4.) INTERPRETATION & ANALYSIS

54,652

1 For how long have you been working as a mutual fund advisor?

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25

20

15

No. Of Advisor 10

0 <1 1 to 3 3 to 5 >5

Interpretation In the above Pie Chart we can see that 26% of the total respondents are having experience of below year, 40% of the total respondents are having experience of 1 to 3 years, 20% of the total respondents are having experience of 3 to 5 and 14% of the total respondents are having experience more than 5 years

2. What is the current Asset Under management (AUM) under your advise in mutual fund ?

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Avg.AUM
18 16 14 12 10 8

No.Of Advisor

6 4 2 0 <10 10 to 30 30 to 50 >50

AUM in Lacs

Interpretation In above chart there are 15 MF advisor who have less than 10 lacs AUM, between 1030 lacs there are 17 advisors and between 30-50 there are 11 advisors and above 50 there are 7 advisors .

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3. Are you satisfied with the Service from the firm through which you do Business?

Satisfaction Of Advisor

35 30 25

No.Of Advisor

20 15 10 5 0 Yes NO

Response

Interpretation There are 33(66%) Mutual Funds advisors who are satisfied with it firm while 17 (34%)advisors are not satisfied with their firm.

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4. Would you like to join NJ India Invest for the Multiple product business in Mutual Funds?

NJ Joining Response
40 35 30 25 20 15 10 5 0 Yes NO

No.Of Advisor

Interpretation There are 11 positive advisors who are ready to join with NJ While others are not interested to join with NJ.

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5.Which top 3 mutual fund houses do you prefer for your investors
Sugession Of Advisor Towards Mutual Fund Plan
35 30

Preference Given By Advisors

25 20 15 10 5 0

MF Houses

Interpretation By conducting a survey we analyzed top three MF Houses are as below. DSP(35) which most favorable by MF advisor and the other two companies are SBI and KOTAK(20) which is equally favorable at second choice. On third choice is MOTILAL OSWAL(18).

6. If your customer desires to invest in a MF other than the one suggested by you, do you go for That?

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35 30

Response Of Advisor

25 20 15 10 5 0 Yes NO

Interpretation There are 17(34%) advisors who suggests more than one MF product to their clients and others(66%) are not suggest the more than one products.

7 Which mutual fund scheme is most preferred by you for investors of mutual fund? (Please Rank)

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Rank Given By Advisor on Investing Option


25 20 15 10 5 0 1 2 3 4 Large Mid Balance Blend

Rank

Interpretation Large caps are preferred one 1st rank by the 22 advisors while mid caps are preferred by 8 advisors , Balance Fund are preferred by 12 advisors and Blend Funds are preferred by 12 advisors. Large caps are preferred one 2nd rank by the 8 advisors while mid caps are preferred by 15 advisors , Balance Fund are preferred by 23 advisors and Blend Funds are preferred by 11 advisors. Large caps are preferred one 3rd rank by the 8 advisors while mid caps are preferred by 16 advisors , Balance Fund are preferred by 15 advisors and Blend Funds are preferred by 17 advisors. Large caps are preferred one 4th rank by the 12 advisors while mid caps are preferred by 11 advisors , Balance Fund are preferred by 5 advisors and Blend Funds are preferred by 10 advisors From the above interpretation most preferable scheme is Balance Fund and least preferable is Blend Funds.

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8 Which type of investment is more advisable to investor for long term growth?

Suggestion
35 30 25 20 15 10 5 0 Lumpsum SIP

Interpretation There are 18(36%) advisors who are preferred lumpsum investment for their clients and other 32 (64%) advisors preferred SIP investment for their clients.

9 Given a choice between Old schemes and NFO, what do you prefer for investors?

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Suggestion
28 27 26 25 24 23 22 21 Old Scheme NFO

Interpretation There are 23(46%) advisors who are preferred Old Scheme for their clients and other 27 (54%) advisors preferred NFO for their clients.

10. What according to you are the reasons for investors to investing in mutual fund?

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Reason for investing in Mutual Fund


50 45 40 35 30 25 20 15 10 5 0

Interpretation There are multiple reasons for investing in Mutual Funds but most preferable reason is low transaction cost and next is more profits .

11.What according to you are the reasons for investors to not investing in mutual fund?

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50 45 40 35 30 25 20 15 10 5 0 No government No Assurance of Security return High Risk Not Aware about the product Low growth in short period

Interpretation There are some reasons for not investing in Mutual Funds but most common reasons is No government security and low growth for short period .

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(5.) FINDING & SUGGESTION Finding: There are 22 persons mutual fund advisors are positive to become a partner of NJ INDIA INVEST PVT. LTD To join with NJ mutual fund advisors have to give fees to NJ and NJ provides the guidance to the advisors. After joining with NJ mutual fund advisors get their own business code. On that business code they can know about their business and their clients investment. Mutual fund advisors takes help of NJ for joint calls and satisfies the customer needs. NJ have multiple mutual fund products so mutual fund advisors can choose better products and serve to clients. If mutual fund advisors AUM is above 2 crores, then he can join in realty without any paying any fees. Mutual fund advisors give better products to customers for getting better returns to customers and better commission for themselves. Some mutual fund advisors doing permanently mutual fund business as well as part time part time business, those who are doing side business in mutual fund they are finds difficulty to manage good relation with customers because of lake of time. NJ arranges the monthly meeting for Mutual Fund advisors. In that Mutual Fund advisors can know something new about Mutual Fund scheme and can get better idea to increase the Mutual Fund Business. Mutual Fund advisors are helping to clients for financial planning according to investors objective.Most of Mutual Fund advisors are knows their clients goal and objectives

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Mutual Fund advisors tells their clients about the market condition about performance, NFO, IPO etc. and suggest which time is good to invest to grow their investment.

SUGGESTION: To Company NJ should remove their new Mutual Fund partner joining fees and training fees. NJ supposed to start the brand awareness in market ,so more and more Mutual Fund advisors can easly know about the firm. NJ should be focus on those who are interested to start the career as a Mutual Fund advisors. NJ supposed to find out inactive Mutual Fund advisors and find their reason for not work in efficient way and remove it for better growth of the firm.

To Advisors Mutual Fund advisors have to analyzed the customers need and according to that serve different product. Mutual Fund advisors should attain the Business Opportunity Program(BOP) of NJ for updating their knowledge so they can know latest Mutual Fund phenomena. Mutual Fund advisors take personally visit to their client and solve their query as soon as possible for maintaing good relation with the clients.

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(6.) CONCLUTION: Running a successful Mutual Fund requires complete understanding of the peculiarities of the Indian Stock Market and also the psyche of the small investors. This study has made an attempt to understand the financial behavior of Mutual Fund investors in connection with the preferences of Brand (AMC), Products, Channels etc. I observed that many of people have fear of Mutual Fund. They think their money will not be secure in Mutual Fund. They need the knowledge of Mutual Fund and its related terms. Many of people do not have invested in mutual fund due to lack of awareness although they have money to invest. As the awareness and income is growing the number of mutual fund investors are also growing. Brand plays important role for the investment. People invest in those Companies where they have faith or they are well known with them. There are many AMCs in Surat but only some are performing well due to Brand awareness. Some AMCs are not performing well although some of the schemes of them are giving good return because of not awareness about Brand. Reliance, UTI, SBIMF, ICICI Prudential etc. they are well known Brand, they are performing well and their Assets Under Management is larger than others whose Brand name are not well known like Principle, Sunderam, etc. Distribution channels are also important for the investment in mutual fund. Mutual Fund Advisors are the most preferred channel for the investment in mutual fund. They can change investors mind from one investment option to others. Many of investors directly invest their money through AMC because they do not have to pay entry load. Only

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those people invest directly who know well about mutual fund and its operations and those have time.

(6.) BIBLIOGRAPHY

Books Marketing Management, Kotler Financial Management, I.M. Pandey NISM, NJ India Invest AMFI Test Work Book Monthly Fact Sheets Issued by Fund Houses Performance Watch Fundz watch of NJ

Websites www.mutualfundindia.com www.njfundz.com www.moneycontrol.com www.sebi.com www.amfiindia.com http://www.rediff.com/money/2005/oct/15perfin.htm http://toostep.com/debate/ulip-and-mutual-funds http://www.citeman.com/1490-salient-features-of-ulip-and-mutual-funds.html http://www.citehr.com/research.php?q=ulip-vs-mutual-fund-ppt

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Name : Contact No Age :

1. For how long have you been working as a mutual fund advisor? <1 1-3 3-5 >5

2. What is the Asset Under management (AUM) under your advise in mutual fund? <10 10-30 30-50 >50

3. How do you carry out Mutual Fund Business? Directly Sub Broker

4. Are you satisfied with the Service from the firm through which you do Business? Yes No

5. Would you like to join NJ India Invest for the Multiple product business in Mutual Funds? Strongly Disagree Disagree Moderate agree strongly agree

6. Which top 3 mutual fund houses do you prefer for your investors? (1) (2) (3)

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7. If your customer desires to invest in a MF other than the one suggested by you, do you go for that? Strongly Disagree Disagree Moderate agree strongly agree

8. Which mutual fund scheme is most preferred by you for investors of mutual fund? (Please Rank) Large Cap Funds Mid Cap Funds Small Cap Funds 9. Which type of investment is more advisable to investor for long term growth? Lump sum SIP (Systematic Investment Plan)

10. Given a choice between Old schemes and NFO, what do you prefer for investors? Old schemes NFO

11. What according to you are the reasons for investors to investing in mutual fund? (Give Rating between 1to5) Professionally managed Portfolio Diversification Risk Reduction More profit Low Transaction Cost

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12. What according to you the reason for investor to not investing in Mutual Fund? (Give Rating between 1to5) No government Security No Assurance of return High Risk Not Aware about the product Low growth in short period

13. What attracts you to choose any mutual fund scheme? (Rank From 1 to 6)

Past Performance Fund Manager Brand Name (Trust) Commission Advertisement Portfolio

14. According to you which is the most suitable stage to invest in mutual funds? Young unmarried stage Young Married with children stage Pre-retirement stage Old age stage 15. Do you offered different plans for different clients on basis on their age? Yes No

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If Yes, which types of plan you offered according to age? (Put numbers between 1 to 5) < 20 years 20-40 years 40-60 years > 60 years 1.Tax Benefit Plans 2.Fix Return with low risk Plans 3.Saving Plans 4.High return with high risk Plans 5. Long term growth Plans

If No, give reason ________________________________________________________________ ________________________________________________________________ ________________

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