ON
BY
SUBMITTED TO
SESSION- 2007-2009
ACKNOWLEDGEMENT
With regard to my Summer Project with ICICI Mutual Fund in India, I would like to
thank each and every one who offered help, guideline and support whenever required.
Khandal(SM) , Mr. Mukesh Aneja(ASM) and other staffs of ICICI Prudential for their
valuable guidance and timely suggestions. I would like to thank all faculty members of
I would also like to extend my thanks to my members and friends for their
support. And lastly, I would like to express my gratefulness to the Lord Almighty for
I hereby declare that this Summer Training Project Report entitled “MUTUAL FUNDS
In few years Mutual Fund has emerged as a tool for ensuring one’s financial well
being. Mutual Funds have not only contributed to the India growth story but have also
helped families tap into the success of Indian Industry. As information and awareness is
rising more and more people are enjoying the benefits of investing in mutual funds.
The main reason the number of retail mutual fund investors remains small is that nine
in ten people with incomes in India do not know that mutual funds exist. But once
people are aware of mutual fund investment opportunities, the number who decide to
invest in mutual funds increases to as many as one in five people. The trick for
customer is to understand which of the potential investors are more likely to buy
mutual funds and to use the right arguments in the sales process that customers will
This Project gave me a great learning experience and at the same time it gave me
enough scope to implement my analytical ability. The analysis and advice presented in
this Project Report is based on market research on the saving and investment practices
of the investors and preferences of the investors for investment in Mutual Funds. This
Report will help to know about the investors’ Preferences in Mutual Fund in Indai
means Are they prefer any particular Asset Management Company (AMC), Which type
of Product they prefer, Which Option (Growth or Dividend) they prefer or Which
Investment Strategy they follow (Systematic Investment Plan or One time Plan). This
The first part gives an insight about Mutual Fund and its various aspects, the Company
Profile, Objectives of the study, Research Methodology. One can have a brief
knowledge about Mutual Fund and its basics through the Project.
The second part of the Project consists of data and its analysis collected through survey
done on 200 people. For the collection of Primary data I made a questionnaire and
surveyed of 200 people. I also taken interview of many People those who were coming
at the ICICI Bank’s Branch where I done my Project. I studied about the products and
strategies of ICICI Prudential to know why people prefer to invest in those Products.
This Project covers the topic “MUTUAL FUNDS IN INDAI.” The data collected has
been well organized and presented. I hope the research findings and conclusion will be
of use.
CONTENTS
Acknowledgement
Declaration
Executive Summary
Chapter - 1 INTRODUCTION
ANNEXURE BIBLIOGRAPHY
QUESTIONNAIRE
Chapter - 1
Introduction
INTRODUCTION TO MUTUAL FUND AND ITS VARIOUS
ASPECTS.
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
Mutual Fund is an investment tool that allows small investors access to a well-
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.
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
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
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
• Portfolio Diversification
• Professional management
• Liquidity
• Choice of schemes
• Transparency
• No tailor-made Portfolios
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
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
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.
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
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
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
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
• Open-ended funds: Investors can buy and sell the units from the fund, at any point
of time.
• 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
can be made during specified intervals. Therefore, such funds have relatively low
liquidity.
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
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
ii) Equity diversified funds- 100% of the capital is invested in equities spreading
iii|) Dividend yield funds- it is similar to the equity diversified funds except that they
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
vi) ELSS- Equity Linked Saving Scheme provides tax benefit to the investors.
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.
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
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
i) Liquid funds- These funds invest 100% in money market instruments, a large
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
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
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
vii) MIPs- Monthly Income Plans have an exposure of 70%-90% to debt and an
viii) FMPs- fixed monthly plans invest in debt papers whose maturity is in line with
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
Company Profile
Asset Management Company enjoys the strong parentage of Prudential plc, one of UK's largest
players in the insurance & fund management sectors and ICICI Bank, a well-known and trusted name
in financial services in India. ICICI Prudential Asset Management Company, in a span of just over
eight years, has forged a position of pre-eminence in the Indian Mutual Fund industry as one of the
largest asset management companies in the country with assets under management of Rs. 55,191.01
Crore (as of July 31, 2008). The Company manages a comprehensive range of schemes to meet the
varying investment needs of its investors spread across 68 cities in the country.
SPONSORS
Securities and Exchange Board of India, vide its letter no. MFD/PM/567/02 dated June 4, 2002, has
accorded its approval in recognizing ICICI Bank Ltd. as a co-sponsor consequent to the merger of
March 31, 2008 and profit after tax of Rs. 41.58 billion for the year ended March 31, 2008. ICICI
Bank is second amongst all the companies listed on the Indian stock exchanges in terms of free float
market capitalization Free float holding excludes all promoter holdings, strategic investments and
cross holdings among public sector entities. The Bank has a network of about 1,308 branches and
3,950 ATMs in India and presence in 18 countries. ICICI Bank offers a wide range of banking
products and financial services to corporate and retail customers through a variety of delivery
channels and through its specialized subsidiaries and affiliates in the areas of investment banking, life
and non-life insurance, venture capital and asset management. The Bank currently has subsidiaries in
the United Kingdom, Russia and Canada, branches in Unites States, Singapore, Bahrain, Hong Kong,
Sri Lanka, Qatar and Dubai International Finance Centre and representative offices in United Arab
Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia. Our UK subsidiary has
established branches in Belgium and Germany. ICICI Bank's equity shares are listed in India on
Bombay Stock Exchange and the National Stock Exchange of India Limited and its American
Depositary Receipts (ADRs) are listed on the New York Stock Exchange (NYSE).
Headquartered in London, Prudential plc and its affiliated companies together constitute one of the
world's leading financial services groups. Prudential provides insurance and financial services in a
number of markets around the world, including in Asia, the US, the UK, Europe and the Middle East.
Founded in 1848, the company has £267 billion in funds under management (as of 31 December
long-term fund in the United Kingdom, for over a century. In the United Kingdom, Prudential is a
leading retirement savings and income solutions and life assurance provider. M&G is Prudential's
fund management business in the United Kingdom and Europe, with almost £160 billion in funds
under management (as of 31 March 2008). In the United States, Jackson National Life, which we
acquired in 1986, is one of the largest life insurance companies providing retirement savings and
income solutions.
In Asia, Prudential is the leading Europe-based life insurer in terms of market coverage and number of
top three ranking positions. It is also one of the largest and most successful fund managers in Asia
with more top five market rankings than any other regional player. Today, Prudential has life
Prudential plc is incorporated and with its principal place of business in the United Kingdom. It is not
affiliated in any manner with Prudential Financial, Inc., a company whose principal place of business
You are unique - and that's why what's right for someone else may not be right for you. So is the case
with your investment needs. As an investor you could be very cautious or very aggressive or someone
We at ICICI Prudential Mutual Fund,To understand this reality and therefore to meet the
investment needs of different kinds of investors we offer a range of solutions that enable them to
create a portfolio of the tenor, return and risk that they desire.
On the debt market side, from simple parking solutions for efficient utilization of each rupee for each
products are managed to minimize liquidity & credit risks and also manage interest rate risks. They
come with periodic dividend and growth options to enable you to choose your income streams in a
manner most efficient for your needs.On the equity market side, our equity funds offer a choice of
size, sectors, themes and styles to enable participation in the broad market and its segments.
ICICI and Prudential came together in 1993 to provide mutual fund products in India and today are
the largest private sector mutual fund company in India. The two companies bring together two of the
strongest financial service brands in Asia known for their professionalism, excellent quality of service
helps you zero-in on the relevant schemes that match your risk taking ability and the returns you
desire:
Asset allocation is the key to investing success. It helps you reduce the volatility of returns. A
Balanced Fund takes care of this asset allocation by investing in equity for capital appreciation and
debt for stable returns. It focuses on reducing volatility of returns by increasing / decreasing equity
exposure based on the market outlook and using a core debt portfolio to do the rebalancing.
ICICI Prudential Balanced Fund, an open-ended fund that allocates to both equity and debt
markets, reflects this wisdom. In a bullish market equity allocation can go upto 80%. In a bearish
market equity allocation can go down to 65%. This dynamic allocation along with core debt portfolio
Debt Equity
accept the average returns from both markets as a trade-off for the benefit of lower risk from
diversification.
A simple but sensible way to invest in equity is through the ICICI Prudential SIP.
Min. Additional
Rs.500/- and in multiples thereof
Investment
(i) For investments of less than Rs. 5 Crores : 2.25% of applicable
Entry Load
NAV.(ii) For investments of Rs. 5 crores and Above : Nil
(i) For investment of less than Rs. 5 Crores : (a) 1% of applicable
more than 1 year from the date of allotment.(ii) For investment of Rs.
fundamentals. Every change in interest rates impacts the value of our fixed income portfolio i.e
increase in rates reduces the value of what we hold, and vice versa. If interest rates on instruments in
the portfolio keep getting reset according to the prevailing market rates, we may be able to focus on
the interest income, without undue worry about its impact on our portfolio value. ICICI Prudential
Long Term Floating Rate Plan enables such a focus on interest rates, creating a portfolio that responds
to these changes and minimizes their impact. ICICI Prudential Long Term Floating Rate Plan
further extends this benefit by tapping into products whose interest rates are benchmarked to longer
term rates.
ICICI Prudential Long Term Floating Rate Plan is a debt fund that invests predominantly in debt
securities with a floating rate of interest. The majority of floating rate instruments in the portfolio are
benchmarked to the 1 year INBNK rate and the rest are benchmarked to a short term rate like the
Mibor with resets taking place at 3 month / 6 month intervals. This also ensures that the portfolio has
limited interest rate risk. The portfolio also invests in fixed rate securities, but spreads out its
investments such that parts of the portfolio mature regularly, enabling redeployment at newer rates.
The portfolio also uses the interest rate swap market to swap fixed rates for floating rates. During
times of increases in interest rates, the Plan enables focus on the interest income, rather than losses in
portfolio value.
ICICI Prudential Long Term Floating Rate Plan offers the following key benefits:
Focus on accrual income that derives from floating rate instruments.
Reduced interest rate risk of longer term instruments.
Min. Additional can be any amount provided the minimum balance in the
Rs.5 Crores.
Entry Load Nil
Exit Load Option A: Exit load at 0.50% of applicable NAV in case of
Plan
Recurring
Expenses
Investment
-
Mangmt. Exp.
Other
Recurring -
Expenses
Plan A,B,C : First Rs.100 Cr - 2.25%, Next Rs.300 Cr -
Total
2.00%, Next Rs.300 Cr - 1.75%, Over Rs.700 Cr - 1.50%.
even as we keep planning to deploy our money in a way that will earn higher interest. At the same
time we don't always want to lock our money into a long term investment. ICICI Prudential Short
Term Plan is designed for exactly such requirements, as it enables deploying of funds for shorter
The ICICI Prudential Short Term Plan invests in a basket of debt securities, which have a shorter
term to maturity. The portfolio predominantly comprises of short term instruments issued by the
corporate sector and takes view-based limited G-Sec exposure. The portfolio is constructed to earn
credit spreads and short term market yield at lower levels of interest rate risk.
ICICI Prudential Short Term Plan offers the following key benefits:
Enables appropriate matching of investor time horizon. Funds that are not required for a short
term need not be kept as liquid cash only.
Enables participation in short term debt market, which is a large scale institutional market.
Investors who have a known fund requirement in the near term in future.
impact this has on debt securities. To a fund manager, however, the changes in the yield curve not
only offers risk, but also opportunities to benefit from these changes, by actively managing these
risks. ICICI Prudential Flexible Income Plan seeks to actively manage such risks as a conscious
investment strategy by allowing the fund manager to switch the allocation from a 100% debt stance to
a 100% cash stance, which provides the flexibility to implement yield curve strategies. (or manage
ICICI Prudential Flexible Income Plan is a debt fund that invests its funds entirely in both short
and long term debt securities of the government and the corporate sector. The objective is to earn
returns in the form of interest income and capital gains, which commensurate with long term
deployment in debt markets. The fund is managed to minimize risks from liquidity and credit while
ICICI Prudential Flexible Income Plan offers the following key benefits:
Strategic deployment of funds in the debt markets to take advantage of interest rate risks.
Participation in markets that are large and institution-dominated.
Ability to earn total return from both interest and capital gains, with the attendant risks of capital
loss as well.
See performance for the fund in the graph below:
and liquidity.
Cumulative and Dividend Reinvestment (Daily &
Options
Weekly Frequencies)
Default Option Dividend Reinvestment with Fortnightly frequency.
Application Amount Rs 5000/- (plus in multiples of Re 1)
Min. Additional
Rs.500/- and in multiples thereof
Investment
Entry Load Nil
Investments made : (a) before July 24, 2006 - Nil (b)
date of investment.
ICICI PRUDENTIAL MONTHLY INCOME PLAN
Investing has always meant seeking a stable, regular return to you. You are willing to settle for lower
returns as long as the risks are lower as well. Equity is not your preferred first choice, because you
worry about the risks, and do not like your principal to fluctuate wildly. However, inflation has been
impacting your low fixed returns and you are now seeking a better performance for your investments,
that does not assume high risks. ICICI Prudential Monthly Income Plan is your kind of product.
ICICI Prudential Monthly Income Plan is a conservatively managed fund that invests
predominantly in debt securities. It invests with the view of generating regular income from debt
securities. To this basic portfolio, it adds on a very limited equity exposure (max 15%) such that the
risk-adjusted returns are better. The intent is to provide the benefit of equity returns to the portfolio,
without adding on significant risk. The portfolio is managed with the objective of stability of income,
and has the track record of uninterrupted monthly dividends since inception.
Debt Equity
ICICI Prudential Monthly Income Plan offers the following key benefits:
Investment in a conservative debt portfolio with limited equity exposure.
Opportunity to earn better risk-adjusted returns.
Possibility of stable and regular income.
Investment Pattern debt and Cash upto 85%, Equity and equity related
securities 15%.
To generate regular income through investments in
offered.
Default Option Dividend Reinvestment (Monthly).
Cumulative - Rs. 5,000; Dividend & AEP - 25,000
Application Amount
(plus multiples of Re.1).
Min. Additional
Rs.500/- and in multiples thereof under each option
Investment
Entry Load Nil
Any purchase transaction less than Or upto Rs.10
each.
Systematic
Minimum of Rs.500/- and Multiples thereof
Withdrawal Plan
Recurring Expenses
Investment Mangmt.
1.25%
Exp.
Other Recurring
1.00%
Expenses
Total 2.25%
ICICI PRUDENTIAL INFRASTRUCTURE FUND
India needs to invest large amounts in areas like Roads, Ports, Power, and Telecom etc. to sustain
high economic growth. Apart from government spending, it will also require private participation to
participation, increase in FDI limits and adequate funding support from the government have provided
a tremendous boost to the system and therefore companies engaged in this sector have delivered
ICICI Prudential Infrastructure Fund is an open-ended equity fund focused on capturing the
opportunity presented by the long term growth potential of the Indian Infrastructure sector. It invests
across infrastructure sectors such as Cement, Power, Telecom, Oil and Gas, Construction, Banking
etc.
ICICI Prudential Infrastructure Fund seeks to optimise the risk adjusted return by a mix of top-
down macro and bottom-up micro research to pick up stocks providing long term potential. It is a
multi-sector fund and therefore has a much lesser concentration risk than a typical sector fund.
ICICI Prudential Infrastructure Fund offers the following key benefits:
Multi-sector fund with much lesser concentration risks.
The sector provides an attractive investment opportunity based on its long term growth potential.
In the last 5 years, we have seen India emerge as one of the fastest growing economies in the world.
The three pillars of Indian growth have been Retail Consumption, Infrastructure Development and
ICICI Prudential Services Industries Fund, an open-ended equity fund, is created to invest in the
services sector encompassing the above drivers of India's growth through sectors like Auto
components, Banking and Financial services, Health Care, Hotels, Media and Entertainment, Trade
ICICI Prudential Services Industries Fund seeks to optimize the risk adjusted return by a mix of
top-down macro and bottom-up micro research to identify stocks in the services sector. It is a multi-
sector fund and therefore has a much lesser concentration risk than a typical sector fund.
ICICI Prudential Services Industries Fund offers the following key benefits:
Multi-sector fund with much lesser concentration risks.
High and secular growth potential offered by the sector makes investment a promising
proposition.
A simple but sensible way to invest in equity is through the ICICI Prudential SIP.
Key Features ICICI Prudential Services Industries Fund
Type Open-ended Equity Fund
Equity and Equity related instruments in services
above : Nil
Generally Within 3 business day for Specified RBI
Redemption Cheques
locations and additional 3 Business Days for Non-
Issued
RBI locations.
Minimum Minimum of Rs. 500 and in multiples of Re.1
It is not always the case that you like your investments to be diversified across sectors. There are
times when you believe that a particular sector might do better than the others, and therefore choose to
increase your exposure to that sector. Sector funds enable spiking a diversified portfolio with sharper
ICICI Prudential FMCG Fund is a diversified sector fund that invests in companies which are
companies with a retail and consumption focus. The portfolio is made up of fewer number of scrips,
chosen to reflect the prospects of the FMCG sector. Within the broad definition of the sector, scrips
are held across sub sectors like food, retail distribution, apparel, and consumables. A smaller
allocation to other sectors is permitted, purely for defensive considerations. The fund adopts a bottom-
The fund also enables investors to diversify in terms of style into sharply focused thematic fund
Investors who view the fund in the context of their existing portfolio, rather than choose the fund
Companies.
Options Growth & Dividend
Default Option Dividend Reinvestment
Application Amount Rs.5,000/- (plus in multiples of Re. 1)
Min. Additional
Rs.500/- and in multiples thereof
Investment
(i) For investments of less than Rs. 5 Crores : Entry
It is not always the case that you like your investments to be diversified across sectors. There are
times when you believe that a particular sector might do better than the others, and therefore choose to
increase your exposure to that sector. Sector funds enable spiking a diversified portfolio with sharper
sectoral focus, as a strategic means to managing their asset allocation. ICICI Prudential Technology
Fund is a concentrated sector fund that focuses predominantly on Information Technology. The fund
can enhance the exposure of an investor's portfolio to this sector, if the investor is convinced about the
prospects.
ICICI Prudential Technology Fund is an open-ended equity fund, that predominantly invests in
knowledge sectors like IT and IT Enabled Services, Media, Telecom etc. However, in the interest of
retaining diversification across companies in the sector, the fund retains a 10% cap on a single
company, as is the case for diversified equity funds. A smaller allocation to other sectors is permitted,
purely for defensive considerations. The fund adopts a bottom-up stock selection strategy to choose its
investments.
The fund also enables investors to diversify in terms of style into growth sectors like IT and
ITES.
Expenses
Investment
1.25%
Mangmt. Exp.
Other Recurring
1.25%
Expenses
Total 2.50%
diversification in investment styles can bring significant advantages over the long run in equity
markets.
ICICI Prudential Discovery Fund offers an alternative value investing style that helps you truly
balance your equity portfolio. The value philosophy focuses on discovering stocks that have high
potential, but are currently lying low at a discount to their inherent value. ICICI Prudential Discovery
Fund seeks to invest in companies that are well managed and fundamentally strong, picked based on
in depth research. As these companies are bought at a discount to their fair value, there is a margin of
The stocks selection is based on a bottom up approach backed by an in depth research evaluating
several parameters such as Price / Earning, Price / Book Value and Dividend Yield. Focus is on stocks
that are selling at discounted prices to their inherent value. The portfolio is intended to be well
It diversifies your existing equity portfolio. An investor, who diversifies across growth and value
through a disciplined process of selecting stocks available at a discount to their fair value.
Investors in growth plans who are looking to further diversify their portfolios by investing in a
value fund.
Investors who like the value strategy of bargain hunting for intrinsically good stocks.
A simple but sensible way to invest in equity is through the ICICI Prudential SIP.
future dividends.
Options Growth & Dividend
Default Option Dividend Reinvestment.
Application Amount Rs.5,000/- (plus in multiples of Re. 1)
Min. Additional
Rs.500/- and in multiples thereof
Investment
(i) For investments of less than Rs. 5 Crores : Entry
Objectives and
scope
OBJECTIVES OF THE STUDY
Company.
3. To know why one has invested or not invested in SBI Mutual fund
A big boom has been witnessed in Mutual Fund Industry in resent times. A large
number of new players have entered the market and trying to gain market share in this
The research was carried on in Jaipur. I had been sent at one of the branch of ICICI
“Mutual Fund in India” on the visiting customers of the C- Scheme Branch of ICICI
Bnak.
The study will help to know the preferences of the customers, which company,
portfolio, mode of investment, option for getting return and so on they prefer. This
project report may help the company to make further planning and strategy.
Chapter–4
Research
Methodology
RESEARCH METHODOLOGY
This report is based on primary as well secondary data, however primary data
collection was given more importance since it is overhearing factor in attitude studies.
One of the most important users of research methodology is that it helps in identifying
the problem, collecting, analyzing the required information data and providing an
alternative solution to the problem .It also helps in collecting the vital information that
is required by the top management to assist them for the better decision making both
Data sources:
Research is totally based on primary data. Secondary data can be used only for the
reference. Research has been done by primary data collection, and primary data has
been collected by interacting with various people. The secondary data has been
Duration of Study:
The study was carried out for a period of two months, from 14th June to 14th Aug 2008.
Sampling:
Sampling procedure:
The sample was selected of them who are the customers/visitors of ICICI Bank, C-
scheme Branch, irrespective of them being investors or not or availing the services or
not. It was also collected through personal visits to persons, by formal and informal
talks and through filling up the questionnaire prepared. The data has been analyzed by
Sample size:
The sample size of my project is limited to 200 people only. Out of which only 120
people had invested in Mutual Fund. Other 80 people did not have invested in Mutual
Fund.
Sample design:
Data has been presented with the help of bar graph, pie charts, line graphs etc.
Limitation:
Possibility of error in data collection because many of investors may have not
Sample size is limited to 200 visitors of ICICI Bank C-scheme Branch, Jaipur
out of these only 120 had invested in Mutual Fund. The sample
Data Analysis
&
Interpretation
ANALYSIS & INTERPRETATION OF THE DATA
No. of 12 18 30 24 20 16
Investors
35
Investors invested in Mutual Fund
30
25
20
15 30
24
10 18 20
16
5 12
0
<=30 31-35 36-40 41-45 46-50 >50
Age group of the Investors
Interpretation:
According to this chart out of 120 Mutual Fund investors of Jaipur the most are in the
age group of 36-40 yrs. i.e. 25%, the second most investors are in the age group of 41-
45yrs i.e. 20% and the least investors are in the age group of below 30 yrs.
Under Graduate 25
Others 7
Total 120
Interpretation:
Out of 120 Mutual Fund investors 71% of the investors in Jaipur are Graduate/Post
Graduate, 23% are Under Graduate and 6% are others (under HSC).
.
Interpretation:
In Occupation group out of 120 investors, 38% are Pvt. Employees, 25% are Businessman,
Interpretation:
In the Income Group of the investors of Jaipur, out of 120 investors, 36% investors that is the
maximum investors are in the monthly income group Rs. 20,001 to Rs. 30,000, Second one
i.e. 27% investors are in the monthly income group of more than Rs. 30,000 and the
minimum investors i.e. 4% are in the monthly income group of below Rs. 10,000
Interpretation: From the above graph it can be inferred that out of 200 people, 97.5%
people have invested in Saving A/c, 76% in Insurance, 74% in Fixed Deposits, 60% in
Mutual Fund, 37.5% in Post Office, 25% in Shares or Debentures, 15% in Gold/Silver and
Factors (a) Liquidity (b) Low Risk (c) High Return (d) Trust
No. of 40 60 64 36
Respondents
Interpretation:
Out of 200 People, 32% People prefer to invest where there is High Return, 30% prefer to
invest where there is Low Risk, 20% prefer easy Liquidity and 18% prefer Trust
Interpretation:
Response Yes No
No. of Respondents 135 65
F
rom the above chart it is inferred that 67% People are aware of Mutual Fund and its
operations and 33% are not aware of Mutual Fund and its operations.
5. Source of information for customers about Mutual Fund
Interpretation:
From the above chart it can be inferred that the Financial Advisor is the most important
source of information about Mutual Fund. Out of 135 Respondents, 46% know about
Mutual fund Through Financial Advisor, 22% through Bank, 19% through Peer Group and
Interpretation:
Out of 200 People, 60% have invested in Mutual Fund and 40% do not have invested in
Mutual Fund.
7. Reason for not invested in Mutual Fund
Not Aware 65
Higher Risk 5
Not any Specific Reason 10
6%
13%
81%
Not Aware Higher Risk Not Any
Interpretation:
Out of 80 people, who have not invested in Mutual Fund, 81% are not aware of Mutual Fund,
13% said there is likely to be higher risk and 6% do not have any specific reason.
Interpretation:
In Jaipur most of the Investors preferred UTI and Reliance Mutual Fund. Out of 120
Investors 62.5% have invested in each of them, only 46% have invested in ICICI Prudential,
27%
9% 64%
Out of 55 investors of ICICI 64% have invested because of its association with Brand ICICI,
34%
38%
28%
Not Aware Less Return Agent's Advice
Interpretation:
Out of 65 people who have not invested in ICICI, 38% were not aware with ICICI Mutual
Funds, 28% do not have invested due to less return and 34% due to Agent’s Advice.
Others 75
Kotak 60
Name of AMC
ICICI Prudential 80
Reliance 82
HDFC 35
UTI 45
SBIMF 76
0 20 40 60 80 100
No. of Investors
Interpretation:
Out of 120 investors, 68% prefer to invest in Reliance, 67% in ICICI Prudential, 63% in
SBIMF, 62.5% in Others, 50% in Kotak, 37.5% in UTI and 29% in HDFC Mutual Fund.
25%
60%
15%
Interpretation:
Out of 120 Investors 60% preferred to invest through Financial Advisors, 25% through AMC
No. of Respondents 78 42
35%
65%
Interpretation:
Out of 120 Investors 65% preferred One time Investment and 35 % Preferred through
17%
Interpretation:
From the above graph 46% preferred Equity Portfolio, 37% preferred Balance and 17%
Reinvestment
No. of Respondents 25 10 85
21%
8%
71%
Interpretation:
From the above graph 71% preferred Growth Option, 21% preferred Dividend Payout and
79%
Yes No
Interpretation:
Out of 120 investors, 79% investors do not prefer to invest in Sectoral Fund because there is
Findings and
Conclusion
Findings
In Jaipur in the Age Group of 36-40 years were more in numbers. The
second most Investors were in the age group of 41-45 years and the least
In Jaipur most of the Investors were Graduate or Post Graduate and below
second most Investors were Private employees and the least were
numbers, the second most were in the Income group of more than
Rs.30,000 and the least were in the group of below Rs. 10,000.
About all the Respondents had a Saving A/c in Bank, 76% Invested in
most preferred Low Risk then liquidity and the least preferred Trust.
Only 67% Respondents were aware about Mutual fund and its operations
Out of 80 Respondents 81% were not aware of Mutual Fund, 13% told
there is not any specific reason for not invested in Mutual Fund and 6%
Most of the Investors had invested in Reliance or UTI Mutual Fund, ICICI
Prudential has also good Brand Position among investors, SBIMF places
with the Brand ICICI, 27% Invested because of Advisor’s Advice and 9%
Most of the investors who did not invested in ICICIMF due to not Aware
of ICICIMF, the second most due to Agent’s advice and rest due to Less
Return.
Mutual Fund, the second most preferred ICICI Prudential, SBIMF has
The most preferred Portfolio was Equity, the second most was Balance
(mixture of both equity and debt), and the least preferred Portfolio was
Debt portfolio.
Most of the Investors did not want to invest in Sectoral Fund, only 21%
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
Products, and 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
“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 Patna 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.
Financial 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 those people invest directly who know well
about mutual fund and its operations and those have time.
Chapter – 7
Suggestions
And
Recommendations
Suggestions and Recommendations
made aware of the benefits. Nobody will invest until and unless he is
Mutual funds offer a lot of benefit which no other single option could
offer. But most of the people are not even aware of what actually a
mutual fund is? They only see it as just another investment option. So
the advisors should try to change their mindsets. The advisors should
target for more and more young investors. Young investors as well as
persons at the height of their career would like to go for advisors due to
about the risk tolerance of the investors/customers, their need and time
(how long they want to invest). By considering these three things they
Younger people aged under 35 will be a key new customer group into the
future, so making greater efforts with younger customers who show some
Customers with graduate level education are easier to sell to and there is
SIP is easy for monthly salaried person as it provides the facility of do the
are not aware about the SIP. There is a large scope for the companies to
• NEWS PAPERS
• OUTLOOK MONEY
• WWW.SBIMF.COM
• WWW.MONEYCONTROL.COM
• WWW.AMFIINDIA.COM
• WWW.ONLINERESEARCHONLINE.COM
• WWW. MUTUALFUNDSINDIA.COM
QUESTIONNAIRE
1. Personal Details:
(a). Name:-
(c). Age:-
(d). Qualification:-
2. What kind of investments you have made so far? Pl tick (√). All applicable.
4. Are you aware about Mutual Funds and their operations? Pl tick (√). Yes No
(a) Not aware of MF (b) Higher risk (c) Not any specific reason
8. If yes, in which Mutual Fund you have invested? Pl. tick (√). All applicable.
10. If NOT invested in SBIMF, you do so because (Pl. tick (√) all applicable).
11. When you plan to invest your money in asset management co. which AMC will you prefer?
12. Which Channel will you prefer while investing in Mutual Fund?
13. When you invest in Mutual Funds which mode of investment will you prefer? Pl. tick (√).
14. When you want to invest which type of funds would you choose?
a. Having only debt b. Having debt & equity c. Only equity portfolio.
portfolio portfolio.
15. How would you like to receive the returns every year? Pl. tick (√).
16. Instead of general Mutual Funds, would you like to invest in sectorial funds?
Please tick (√). Yes No