CONTENTS

Page No.

Chapter 1 : Introduction to the Industry ( Mutual Fund Industry) Chapter 2 : Introduction to the Organization ( KMAMCL) Chapter 3 : Project Study Chapter 4 : Research Methodology 4.1 Title of the Study 4.2 Objective of the study 4.3 Type of Research 4.4 Sample Size and Method of Selecting Sample 4.5 Limitation Of Study Chapter 5 : Facts and Findings Chapter 6 : Analysis and Interpretation Chapter 7 : Conclusion

3 - 22

23 - 30

31 - 79

80 - 84

85 - 95

85 - 95

96 - 97

Chapter 8 : Recommendation & Suggestions

98 - 99

Chapter 9 : Appendix Chapter 10 : Bibliography

100 - 102

103 - 105

Chapter 1

Introduction to the Industry ( Mutual Fund Industry)

INDUSTRY PROFILE

MUTUAL FUNDS INTRODUCTION MUTUAL FUND INDUSTRY IN INDIA ADVANTAGES OF MUTUAL FUNDS DISADVANTAGES OF MUTUAL FUNDS

Mutual Funds An Introduction

Economic liberalization and globalization have brought about a new and competitive environment for the common and small investors who are willing to participate in the equity of the corporate sector in our country. There are a large number of small investors, who have the ability to save and make an investment in equity but a majority of them lack professional expertise to judge or forecast the violent volatility and swings, which rock the stock markets. As most of the investors are not experts in choosing the right scrip or portfolio, sometimes they get their fingers burnt on certain investment choices. Lower per capita income, apprehensions of loss of capital and economic insecurity significantly influence the investment decisions of the investors. Nevertheless, the avowed objective of every investor is to reduce the risk as low as possible and ensure the returns as fast high as possible. Mutual funds, obviously, are the most popular channel in the investment activity as they, by and large, not only guarantee repayment of the principal money invested but assures a reasonable and regular return. But, there are some exceptions to this phenomenon. Mutual funds, being an institution/investment agency, are treated as a suitable vehicle specifically for small investors, who normally feel shy of the capital market and are unable to predict its conditions through different schemes.

Introduction about Mutual Fund

Mutual fund: why? Mutual fund: what is its? 5

Mutual fund: what is it made of? Different type of MF

Mutual Funds: Why?

Professional management Diversification and Lowered risks Low costs Liquidity Transparency 6

Flexibility Choice of schemes Tax benefits Regulation

The advantages of investing in a Mutual Fund are: Professional Management

Mutual funds hire full-time, high-level investment professionals. Funds can afford to do so as they manage large pools of money. The managers have real-time access to crucial market information and are able to execute trades on the largest and most cost-effective scale. Diversification

Mutual funds invest in a broad range of securities. This limits investment risk by reducing the effect of a possible decline in the value of any one security. Mutual fund unit-holders can benefit from diversification techniques usually available only to investors wealthy enough to buy significant positions in a wide variety of securities. Low Costs

A mutual fund let's you participate in a diversified portfolio for as little as Rs.5,000/-, and sometimes less. And with a no-load fund, you pay little or no sales charges to own them. Liquidity

In open-ended schemes, you can get your money back promptly at net asset value related prices from the mutual fund itself. Transparency

You get regular information on the value of your investment in addition to disclosure on the specific investments made by the mutual fund scheme. Convenience and Flexibility 7

You own just one security rather than many; yet enjoy the benefits of a diversified portfolio and a wide range of services. Fund managers decide what securities to trade collect the interest payments and see that your dividends on portfolio securities are received and your rights exercised. It also uses the services of a high quality custodian and registrar in order to make sure that your convenience remains at the top of our mind. Personal Service

One call puts you in touch with a specialist who can provide you with information you can use to make your own investment choices. They will provide you personal assistance in buying and selling your fund units, provide fund information and answer questions about your account status. Their Customer Service Centers are at your service and their Marketing Team would be eager to hear your comments on their schemes.

Mutual Funds: What is it ?

Mutual Fund Operation Flow Chart 8

A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. The income earned through these investments and the capital appreciations realized are shared by its unit holders in proportion to the number of units owned by them. Thus, a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost.

Mutual Fund: What is it made of ?

Investors: Every investor, given his financial position and personal disposition, has a certain propensity inclination to take risk (risk profile / risk appetite). The hypothesis is that 9

by taking an incremental risk (of losing capital, wholly or partly), it would be possible for the investor to earn an incremental return. But assuming risk without regularly monitoring it is foolhardy. Therefore, it would be prudent for investors who take a risk to be able to manage this risk. MF is a solution for investors who lack the time, or the inclination or the skills to actively manage their investment risk in individual securities. They can delegate this role to the MF, while retaining the right and the obligation to monitor their investments in the scheme (which, in turn, invests in individual securities). In the absence of a MF option, the moneys of such passive these investors

would lie either in bank deposits or other safe investment options, thus depriving the investors of the possibility of earning a better return. Investing through a MF would make economic sense for an investor if his investment, over the medium to long term, fetches a return (net of all costs and expenses) that is higher than what she would otherwise have earned by investing directly. Because the goal of investing is to accumulate real wealth an enhanced ability to pay for goods and services the ultimate focus of the long-term investor must be on real, not nominal, returns. Trustees: Trustees are the people within the mutual fund organization, who are responsible to ensure for ensuring that investors interests are properly taken care of In return for their services, they are paid trustee fees, which is normally charged to the scheme.

Asset Management Company (AMC): 10

AMCs manage the investment portfolios of schemes. An AMCs Income for an AMC comes through from the management fees that are it charges to the schemes. The management fee is calculated as a percentage of net assets managed. Some countries provide for performance based management fees as well.

Distributors Distributors earn a commission for bringing investors into the schemes of a MF. This commission is an expense for the scheme, although there are occasions when the AMC chooses to bear the cost, wholly or partly.

Depending on the financial and physical resources at their disposal, they distributors could be: Tier 1 distributors (having an owned or franchised network reaching out to Tier 2 distributors (regional players with some reach within their region); or Tier 3 distributors (marginal players). It is paradoxical that distributors earn

investors all across the country); or

a commission from the AMC, but are expected to safeguard the financial health of investors from whom they do not earn a fee. It is almost like a doctor earning a commission from the pharmaceutical company, but expected to safeguard the physical health of the patient who does not pay him anything. Registrars The investors holding in various schemes is typically tracked by the schemes Registrar and Transfer agent (R&T). Some AMCs prefer to handle this role in11

house. The registrar / AMC maintains an account of the investors investments in and dis-investment from the scheme. Requests to invest more money into a scheme, or to recover moneys against existing investments in the scheme are processed by the R&T. Custodian / Depository The custodian maintains custody of the securities in which the scheme invests (as distinct from the registrar who tracks the investment by investors in the scheme). This ensures an ongoing independent record of the investments of the scheme. The custodian also follows up on various corporate actions, such as rights, bonus and dividends declared by invested companies. In a situation where securities are increasingly being dematerialized, the role of the depository for such independent record of investments is increasing growing.

Different types of Mutual Funds:

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Wide variety of Mutual Fund Schemes exists to cater to the needs such as financial position, risk tolerance and return expectations etc. The table below gives an overview into the existing types of schemes in the Industry.

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TYPES OF MUTUAL FUND SCHEMES

By Structure: Open - Ended Schemes: An open-end fund is one that is available for subscription all through the year. These do not have a fixed maturity. Investors can conveniently buy and sell units at Net Asset Value ("NAV") related prices. The key feature of open-end schemes is liquidity. Close - Ended Schemes: A closed-end fund has a stipulated maturity period which generally ranging from 3 to 15 years. The fund is open for subscription only during a specified period. Investors can invest in the scheme at the time of the initial public issue and thereafter they can buy or sell the units of the scheme on the stock exchanges where they 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. SEBI Regulations stipulate that at least one of the two exit routes is provided to the investor. Interval Schemes: Interval funds combine the features of open-ended and close-ended schemes. They are open for sale or redemption during predetermined intervals at NAV related prices. By Investment Objective: Growth Schemes: The aim of growth funds is to provide capital appreciation over the medium to long- term. Such schemes normally invest a majority of their corpus in equities. It has been proven that returns from stocks, have outperformed most other kind of investments held over the long term. Growth schemes are ideal for investors having a long-term outlook seeking growth over a period of time.

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Income Schemes: The aim of income funds is to provide regular and steady income to investors. Such schemes generally invest in fixed income securities such as bonds, corporate debentures and Government securities. Income Funds are ideal for capital stability and regular income. Balanced Schemes: The aim of balanced funds is to provide both growth and regular income. Such schemes periodically distribute a part of their earning and invest both in equities and fixed income securities in the proportion indicated in their offer documents. In a rising stock market, the NAV of these schemes may not normally keep pace, or fall equally when the market falls. These are ideal for investors looking for a combination of income and moderate growth. Money Market Schemes: The aim of money market funds is to provide easy liquidity, preservation of capital and moderate income. These schemes generally invest in safer short-term instruments such as treasury bills, certificates of deposit, commercial paper and inter-bank call money. Returns on these schemes may fluctuate depending upon the interest rates prevailing in the market. These are ideal for Corporate and individual investors as a means to park their surplus funds for short periods. Load Funds: A Load Fund is one that charges a commission for entry or exit. That is, each time you buy or sell units in the fund, a commission will be payable. Typically entry and exit loads range from 1% to 2%. It could be worth paying the load, if the fund has a good performance history.

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No-Load Funds: A No-Load Fund is one that does not charge a commission for entry or exit. That is, no commission is payable on purchase or sale of units in the fund. The advantage of a no load fund is that the entire corpus is put to work.

Other Schemes: Tax Saving Schemes: These schemes offer tax rebates to the investors under specific provisions of the Indian Income Tax laws as the Government offers tax incentives for investment in specified avenues. Investments made in Equity Linked Savings Schemes (ELSS) and Pension Schemes are allowed as deduction u/s 88 of the Income Tax Act, 1961. The Act also provides opportunities to investors to save capital gains u/s 54EA and 54EB by investing in Mutual Funds, provided the capital asset has been sold prior to April 1, 2000 and the amount is invested before September 30, 2000. Special Schemes: Industry Specific Schemes: Industry Specific Schemes invest only in the industries specified in the offer document. The investment of these funds is limited to specific industries like InfoTech, FMCG, and Pharmaceuticals etc. Index Schemes: Index Funds attempt to replicate the performance of a particular index such as the BSE Sensex or the NSE 50 Sector Specific Schemes: Sectoral Funds are those, which invest exclusively in a specified industry or a group of industries or various segments such as 'A' Group shares or initial public offerings.

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MUTUAL FUND INDUSTRY IN INDIA HISTORY

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. We can divide history of mutual funds in India in 4 distinct phases, Phase I (Period between 1964 to 87)

An Act of Parliament established Unit Trust of India (UTI) on 1963. 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.

Phase II

(Period from1987 to 1993)

1987 was the year when public sector funds entered in the market, these funds were set by public sector banks, Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC).

Phase III (Period from 1993 to 2003) In 1993 Private sector entered in to the mutual fund industry. The number of mutual

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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. Phase IV (Period from 2003 onwards) The IV phase of mutual funds in India is going on. In recent past, mutual fund industry has grown with tremendous pase. In last 6 years, mutual fund industry in India has grown 100%. So many new companies have come up with their exciting schemes. As at the end of September, 2004, there were 29 funds, which manage assets of Rs.153108 crores under 421 schemes.

RECENT TRENDS IN MUTUAL FUND INDUSTRY

The most important trend in the mutual fund industry is the aggressive expansion of the foreign owned mutual fund companies and the decline of the companies floated by nationalized banks and smaller private sector players. Many nationalized banks got into the mutual fund business in the early nineties and got off to a good start due to the stock market boom prevailing then. These banks did not really understand the mutual fund business and they just viewed it as another kind of banking activity. Few hired specialized staff and generally chose to transfer staff from the parent organizations. The performance of most of the schemes floated by these funds was not good. Some schemes had offered guaranteed returns and their parent organizations had to bail out these AMCs by paying large amounts of money as the difference between the guaranteed and actual returns. The service levels were also very bad. Most of these AMCs have not been able to retain staff, float new schemes etc. and it is doubtful whether, barring a few exceptions, they have serious plans of continuing the activity in a major way.

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The experience of some of the AMCs floated by private sector Indian companies was also very similar. They quickly realized that the AMC business is a business, which makes money in the long term and requires deep-pocketed support in the intermediate years. Some have sold out to foreign owned companies, some have merged with others and there is general restructuring going on. The foreign owned companies have deep pockets and have come in here with the expectation of a long haul. They can be credited with introducing many new practices such as new product innovation, sharp improvement in service standards and disclosure, usage of technology, broker education and support etc. In fact, they have forced the industry to upgrade itself and service levels of organizations like UTI have improved dramatically in the last few years in response to the competition provided by these.

ASSOCIATION OF MUTUAL FUNDS IN INDIA (AMFI)

With the increase in mutual fund players in India, a need for mutual fund association in India was generated to function as a non-profit organization. Association of Mutual Funds in India (AMFI) was incorporated on 22nd August, 1995. AMFI is an apex body of all Asset Management Companies (AMC) which has been registered with SEBI. Till date all the AMCs are that have launched mutual fund schemes are its members. It functions under the supervision and guidelines of its Board of Directors. Association of Mutual Funds India has brought down the Indian Mutual Fund Industry to a professional and healthy market with ethical lines enhancing and maintaining standards. It follows the principle of both protecting and promoting the interests of mutual funds as well as their unit holders.

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The objectives of Association of Mutual Funds in India The Association of Mutual Funds of India works with 30 registered AMCs of the country. It has certain defined objectives which juxtaposes the guidelines of its Board of Directors. The objectives are as follows: This mutual fund association of India maintains high professional and ethical standards in all areas of operation of the industry. It also recommends and promotes the top class business practices and code of conduct which is followed by members and related people engaged in the activities of mutual fund and asset management. The agencies who are by any means connected or involved in the field of capital markets and financial services also involved in this code of conduct of the association. AMFI interacts with SEBI and works according to SEBIs guidelines in the mutual fund industry.

Associations of Mutual Funds of India do represent the Government of India, the Reserve Bank of India and other related bodies on matters relating to the Mutual Fund Industry. T

t develops a team of well qualified and trained Agent distributors. It implements a programme of training and certification for all intermediaries and other engaged in the mutual fund industry.

AMFI undertakes all India awareness programme for investors in order to promote proper understanding of the concept and working of mutual funds.

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At last but not the least association of mutual fund of India also disseminate informations on Mutual Fund Industry and undertakes studies and research either directly or in association with other bodies.

The sponsors of Association of Mutual Funds in India Bank Sponsored: SBI Fund Management Ltd. BOB Asset Management Co. Ltd. Canbank Investment Management Services Ltd. UTI Asset Management Company Pvt. Ltd.

Institutions: GIC Asset Management Co. Ltd. Jeevan Bima Sahayog Asset Management Co. Ltd.

Private Sector Indian: BenchMark Asset Management Co. Pvt. Ltd. Cholamandalam Asset Management Co. Ltd. Credit Capital Asset Management Co. Ltd. Escorts Asset Management Ltd. JM Financial Mutual Fund

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Kotak Mahindra Asset Management Co. Ltd. Reliance Capital Asset Management Ltd. Sahara Asset Management Co. Pvt. Ltd Sundaram Asset Management Company Ltd. Tata Asset Management Private Ltd.

Predominantly India Joint Ventures: Birla Sun Life Asset Management Co. Ltd. DSP Merrill Lynch Fund Managers Limited HDFC Asset Management Company Ltd.

Predominantly Foreign Joint Ventures: ABN AMRO Asset Management (I) Ltd. Alliance Capital Asset Management (India) Pvt. Ltd. Deutsche Asset Management (India) Pvt. Ltd. Fidelity Fund Management Private Limited Franklin Templeton Asset Mgmt. (India) Pvt. Ltd.

HSBC Asset Management (India) Private Ltd. ING Investment Management (India) Pvt. Ltd. Morgan Stanley Investment Management Pvt. Ltd. Principal Asset Management Co. Pvt. Ltd. Prudential ICICI Asset Management Co. Ltd. Standard Chartered Asset Mgmt Co. Pvt. Ltd.

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Association of Mutual Funds in India Publications AMFI publishes mainly two types of bulletin. One is on the monthly basis and the other is quarterly. These publications are of great support for the investors to get intimation of the know-how of their parked money.

ADVANTAGES OF MUTUAL FUNDS

The basic advantages of mutual funds are as follows, It is beneficial for those investors who do not possess any knowledge about the market. For such type of customers mutual funds is the best option because here the decision about where to invest the funds is taken by company expert team i.e. Portfolio Manager. SIP is another option available to those investors who do not want to invest more money in market. Systematic investment plan can be started from just Rs 500 to 1000 on monthly basis. Another advantage for the mutual fund investor is of capital gain. No capital gain tax shall be levied on any return after 1 year of investment. Mutual fund is a less riskier option of investment Mutual funds are highly liquid. invested amount anytime. Any investor can opt to withdraw his

Monthly statement of investment gives a chance to investor to see where his money has been invested by the fund manger. So there minimal chances of partiality. Good continuous returns.

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DISADVANTAGES OF MUTUAL FUNDS

Mutual funds have their drawbacks and may not be for everyone:

No Guarantees: 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. Fees and commissions: All funds charge administrative fees to cover their day-to-day expenses. Some funds also charge sales commissions or "loads" to compensate brokers, financial consultants, or financial planners. Taxes: During a typical year, most actively managed mutual funds sell anywhere from 20 to 70 percent of the securities in their portfolios. If a fund makes a profit on its sales, investor will have to pay taxes on the income he received, even if he reinvests the money.

Management risk: When investors invest in a mutual fund, he depends on the fund manager to make the right decisions regarding the fund's portfolio. If the manager does not perform as well as investors had hoped, they might not make as much money on their investment as they expected. Most mutual funds have qualified and experienced personnel, who understand the risks of investing. But, nobody is immune from making mistakes. However, funds diversify the investment portfolio substantially so that default in any single investment (in the case of an income fund) will not affect the overall performance of a fund in a significant manner. Yet there is some risk attached to every investment.

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Chapter 2

Introduction to the Organization

( Kotak Mahindra Asset Management Company Limited)

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History

Kotak Mahindra is one of India's leading financial institutions, offering complete financial solutions that encompass every sphere of life. From commercial banking, to stock broking, to mutual funds, to life insurance, to investment banking, the group caters to the financial needs of individuals and corporates. The group has a net worth of around Rs.3,200 crore and employs around 10,800 employees across its various businesses servicing around 2.6 million customer accounts through a distribution network of branches, franchisees, representative offices and satellite offices across 300 cities and towns in India and offices in New York, London, Dubai, Mauritius and Singapore. Kotak Mahindra Asset Management Company Limited (KMAMCL), a wholly owned subsidiary of KMBL, is the Asset Manager for Kotak Mahindra Mutual Fund (KMMF). KMAMC started operations in December 1998 and has over 4 Lac investors in various schemes. KMMF offers schemes catering to investors with varying risk - return profiles and was the first fund house in the country to launch a dedicated gilt scheme investing only in government securities.

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Setup

Kotak Mahindra Mutual Fund are sponsored by Kotak Mahindra Bank Limited, One of India's fastest growing banks, with a pedigree of over twenty years in the Indian Financial Markets. Kotak Mahindra Asset Management Co. Ltd., a wholly Owned subsidiary of the bank, is its Investment Manager. It made a humble beginning in the Mutual Fund space with the launch of its first Scheme in December 1998. Today it offer a complete bouquet of products and services suiting the diverse and varying needs and risk-return profiles of its Investors. It is committed to offering innovative investment solutions and world-class services and conveniences to facilitate wealth creation for its investors. It is set up in 1998. Kotak Mutual Fund currently manages assets worth Rs. 19731.48 crores contributed by over 8 lakh investors (as on 29thFebruary, 2008).

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Orgnization Structure
# Directors : Trustee Company Mr. Amit Desai Mr. Girish Sharedalal Mr. Tushar Mavani Mr. Anirudh Barwe Mr. Chandrashekhar Sathe

Directors : Asset Management Company Mr. Uday S. Kotak Mr. R. C. Khanna Mr. Sukant S. Kelkar Mr. Chengalath Jayaram Mr. Bipin R. Shah Mr. Narayan S. A.

Key Employees : Asset Management Company Mr. Sandesh Kirkire (Chief Executive Officer) Mr. Alroy Lobo (Chief Strategist & Global Head Equities Asset Management) Mr. R. Krishnan (Chief Operations Officer) Mr. V. R. Narasimhan (Compliance Officer)

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Achievements & Awards

# NDTV AWARDS, 2006

# LIPPER FUND AWARDS, 2006 # ICRA AWARDS, 2006 # ICRA MFR 1 (December 2004 & December 2005) # OUTLOOK MONEY BEST WEALTH CREATOR DEBT 2003 # CRISIL BEST FUND AWARD 2003

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Products

Different people have different investment needs. The ability to take risks while investing in financial products varies accordingly. In this section a wide range of Mutual Fund schemes is presented, which span across the risk-reward spectrum. Equity Fund : 1. Kotak 30 Debt Fund : 1. Kotak Bond Balanced Fund : 1. Kotak Balance FOF : 1. Kotak Equity FOF ETF : 1. Kotak Gold ETF FMPs : 1. Kotak FMP 1M Series 3 2. Kotak FMP 3M Series 30 2. Kotak Sensex ETF 2. Kotak Flexi FOF 2. Kotak Dynamic Asset Allocation 2. Kotak Liquid 2. Kotak Tax Saver 3. Kotak Opportunities

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Competitors Of Kotak Mutual Fund

MUTUAL FUND COMPANIES IN INDIA List of Some of the AMCs Operating in India Name of the AMC Alliance Capital Asset Management (I) Private Limited Birla Sun Life Asset Management Company Limited Bank of Baroda Asset Management Company Limited Bank of India Asset Management Company Limited Canbank Investment Management Services Limited Nature of ownership Private Foreign Private Indian Banks Banks Banks

Cholamandalam Cazenove Asset Management Company Private Foreign Limited Dundee Asset Management Company Limited DSP Merrill Lynch Asset Management Company Limited Escorts Asset Management Limited First India Asset Management Limited GIC Asset Management Company Limited IDBI Investment Management Company Limited Indfund Management Limited Private Foreign Private Foreign Private Indian Private Indian Institutions Institutions Banks

ING Investment Asset Management Company Private Private Foreign 31

Limited J M Capital Management Limited Private Indian

Jardine Fleming (I) Asset Management Limited HDFC Mutual Fund Kothari Pioneer Asset Management Company Limited

Private Foreign Private Indian Private Indian

Jeevan Bima Sahayog Asset Management Company Institutions Limited Morgan Stanley Asset Management Company Private Private Foreign Limited Punjab National Bank Asset Management Company Banks Limited Reliance Capital Asset Management Company Limited State Bank of India Funds Management Limited Shriram Asset Management Company Limited Sun F and C Asset Management (I) Private Limited Private Indian Banks Private Indian Private Foreign

Sundaram Newton Asset Management Company Limited Private Foreign Tata Asset Management Company Limited Credit Capital Asset Management Company Limited Templeton Asset Management (India) Private Limited Unit Trust of India 32 Private Indian Private Indian Private Foreign Institutions

In respect of Kota city, the main competitors of Kotak Mutual Fund are HDFC Mutual Fund & Reliance Mutual Fund.

Chapter 3
Project Study On Customer Awareness & Development of Different Financial Investment Tools

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BASICS

IntroductionIn this particular chapter we will come to know some of the basic things which are must for any one before going in to any type of investment tool. These aspects include followings:-Investment need Before starting investment procedure first of all we will have to know why et al we are investing, this is what we will come to know under the head WHY TO INVEST? -History- Investment has been an activity which is being done for thousands of year, we will also come to know how it was done under the head A HISTORICAL PERSPECTIVE.

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-Risk- It has always been an important part of investments, we will come to know a bit about it at INVESTMENT AND RISK

WHY TO INVEST?

Following may be some of the primary motives of investing in any sort of investment tool:-Proper utilization of savings.

-Save money for future needs.

-To fulfill any specific need of the investor.

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While making any type of investment, a financial advisor as well as the investor should always keep in mind the need for which he/she is making investments, then only any type of investment will serve its purpose because a purpose less investment is always like putting your money in a black hole.

A HISTORICAL PERSPECTIVE

As we all know that in past, investment was not any sort of painstaking activity, it was as simple as having food. People used to purchase GOLD or PRECIOUS STONES with whatever amount they could save from their income. In past years there were not any sort of investment advisors or companies which could tell a person how to invest the money which has been saved by them. Even places like stock market were not in access of common man. Most of the time money saved by a person used to lie idle with him for many years, which was against the rule productivity of money.

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But now days the scenario has changed. How? Let us have a look.

INVESTMENT AND RISK

Investment is not always about making money, sometime we may loose also because of risk factor associated with it. Now a days investment analysts have started paying a lot of attention to the risk part of investments. Following are some of the techniques of risk analysis: - Macro environmental analysis, which includes study of different industries and economy as a whole.

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- Fundamental and technical analysis in relation to equity and Instrument related to it. - Statistical techniques like forecasting and some of others. - Economic cycle study.

Here we can say that it is not easy to decide which of the above mentioned techniques is better, it all depends on how we use any of the technique and implement for analytical purposes. The general assumption is that in bad time analysts use technical and mathematical analysis and in good times the analysis part is dominated by fundamental part.

DIFFERENT INVESTMENT TOOLS

IntroductionIn this particular chapter we will take a look on different investment tools available for investments to be made in those. These tools of investment will include following aspects: 38

1) Equity. 2) Mutual funds. 3) Corporate debts. 4) Fixed deposits. 5) Precious metal and stones. 6) Commodity. 7) Government securities. 8) Land.

EQUITY

Introduction As we all know that equity has always been one of the most important tools for investment, here in this chapter we will come to know some of the basic things about this tool, which will cover following aspects: 39

-Definition. -Positive and negative aspects of equity. -Stock exchanges. -De-materialised accounts -Data related to equity and stock market in section lets play with numbers. -Recent development in equity field

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DEFINITION: Equity is a part of ownership in a company

Positive features: -High returns -Liquidity -Growth oriented investments Negative features: -High risk

Stock exchanges: -Stock exchanges are those places where a person can buy or sell shares of any of the company, which is listed in that particular stock exchange. In simple words we can say that these are the markets where trading of shares happens.1

D-MAT a/c: -De-materialized a/c is almost like a bank account where we can keep shares of the company. It provides security because the investor does not have to keep shares in physical form. Reliance industries was the first company in Indian stock market history which introduced shares in de-materialized form.2

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Lets play with numbers

-There are more than 4900+ listed companies on both NSE and BSE3

-In India there are 26 stock exchanges, among them BSE and NSE are the largest4

-More than 60000 crore is the average daily turnover of both of the major stock exchanges5

-There are almost 91+ lac D-mat accounts in our nation.6

-More than 47700+ crore was the FII inflows in Indian equity market in 20077

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* All the above figures are as on 31st March, 2009.

RECENT DEVELOPMENTS

In past few years Indian equity markets have seen a lot of changes in terms of good and bad times. People like HARSHAD MEHTA and KETAN PAREKH are considered as villains of the market, and on the other hand person like M. DAMODARAN helped the market to scale new hights.some of the major development in the stock market arena of investments has been as follows: -Large foreign participation

-Regulations on stock markets and intermediaries by SEBI

-Increased retail participation in the market

-Equity is now considered as one of the asset class for investment purpose

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-Impact of global markets in terms of performance

-Global hedge funds have been an important part of Indian equity markets for past 3-4 years.

MUTUAL FUNDS
IntroductionMutual funds are one of the investment tools which is very famous all over the world because of its power of risk reduction to some extent. In this chapter regarding mutual funds we will come to know different aspects about mutual funds. The content of the chapter will be as follows:-Definition. -Negative and positive aspects of mutual funds. -Asset Management Company (AMC). -Fund managers -Different type of mutual funds. -Data related to mutual funds industry. -Recent developments in mutual funds industry.

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DEFINITION:Mutual fund is a pool of money which invests on behalf of the investors in different investment tools.

Positive features:-Professional money management -Risk diversification -No direct exposure of investor to the markets

Negative features:-Equity related risk -No assured returns

Asset Management Company (AMC):-

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-Asset Management Company is that company which manages or say invest the money provide by the investor to the mutual funds. These asset management companies work as a proxy for the investors who are associated with that particular mutual fund and charge a particular percentage of total investment as asset management charges8.

Fund managers:-Fund managers are professionals appointed by the asset management companies to invest the money collected through the mutual fund, by investing the money with prudence they try to maximize the investors wealth. Different type of mutual funds:Growth funds -These types of funds create wealth for the investors by investing through equity in those companies which have the potential of doing well in future. These funds can invest up to 100 percent of the fund amount in equity. Balanced funds

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-Balanced funds are those type of mutual fund in two type of instrument a)fixed return money market instrument, b)equity shares Debt funds -Debt fund are those type of mutual fund which invest up to 100 percent of the amount in money market instrument. These money market instruments include debt paper issued by the companies, govt. securities and some more like that. These funds provide a good amount of assurance regarding returns.

Fixed Maturity Plans -Fixed Maturity Plans (FMP) can be considered as a fixed deposit in case of a mutual fund. In which we can invest our money for a fixed period of time with assurance of a fixed return. Tax benifit is one of the most attractive features while we compare FMP and FD, because returns generated by FMP are tax free unlike FD.9

From where can we purchase mutual funds? -Now a days mutual fund can be purchased easily by any person who wants to invest in those from any of the following:49

-Banks -NBFC (non banking financial companies) -AMFI (association of mutual funds in India) certified Brokers

Lets play with numbers -45+ is the number of asset management companies in INDIA.10 -5200+ mutual fund schemes are offered by different AMCs.11 -More than 5000+ registered brokers.12 -400000+ crore is the amount managed by AMCs in India.13 -RELIANCE MUTUAL FUND is the largest asset management company of nation with asset under management of 100000+ crore.14 50

-UTI was the 1st institution of the nation which launched mutual funds in INDIA.15 -INDIA mutual fund industry is expected to grow by more than 30% per annum for next 3 years according to a survey by HSBC GLOBAL.16

*All of the above figures are as on 31st March, 2009.

RECENT DEVELOPMENT

-Because of risk diversification a lot of retail investors have started showing interest in mutual funds.

-Mutual fund industry in INDIA is one of the fastest growing industries which grew by almost 80 percent over the period of past 3 years.17

51

-Global giants like, FRANKLIN TEMPLETON, HSBC MUTUAL FUNDS, FIDELITY MUTUAL FUNDS, BNP PARIBAS and some others are expanding their operations in INDIA.18

-Because of higher returns mutual funds are getting preference by the investors over traditional investment tools like bank FDs.

-SEBI (securities exchange board of India) and AMFI (association of mutual funds in India) are playing important role regarding regulating the mutual funds industry.

CORPORATE DEBTS

Introduction-

52

Corporate debts are the type of investment tool which attracts a lot of institutional investors towards itself. In this chapter we will come to the cause of it with the help of following heads:-Definition. -Positive and negative aspects of it. -Issue of debts. -Coupon rate. -Time period. -Maturity. -Redemption of corporate debts. -Trading of corporate debts. -Data related to debt industry. -Recent developments related to the industry.

53

54

DEFINITION:Corporate debts are paper issued by companies to raise loans which may of short or long term.
19

Positive features:- Fixed returns which avoid fluctuations. - Guaranteed returns in case of govt. corporate bonds.

Negative features:- Longer period of investment. - Lesser liquidity when compared to equity and mutual funds. - Risk of default in case of private companies. - Lower returns in comparison with other investments like equity, land and mutual funds.

Issue of debts:- Companies issue debentures and bonds when they need large amount of long term loans. It adopts a stipulated issuance procedure regarding it.

Coupon rate:-Coupon rate refers to the rate of interest which is given by the company to its investors. Currently the rate is in the range of 8-11 percent.

55

Time period:-Corporate debts are issued for a fixed period of time. In case of short term debts the time period is less than 2-3 years, where for the long term loans the time period may exceed 10 years.

Maturity:-Maturity refers to that point on the time line when the company has to repay the loans terms of corporate debts. Maturity period is fixed prior to issuance of the debt paper.

Redemption:-Redemption simply refers to the process of repayment of the loan at the time of maturity. At the end of the maturity of the debt paper principle amount with interest is paid to the investor.

Trading of corporate debts:-Now a days corporate bonds can be traded on stock exchanges like BOMBAY STOCK EXCHANGE and NATIONAL STOCK EXCHANGE.

56

Lets play with numbers

-More than 4900+ companies are there which can issue corporate debts in India.20

-68000 crore was the market capitalization of corporate debt market in India as on 31st December 2007

-342 crore is the amount of corporate debts traded on exchanges on daily basis.

-$ 4 trillion is the total amount floated in terms of corporate debts.21

-$35 trillion is the size of total worlds corporate debt market.22

* All of the above figures are as on 31st March, 2009.

57

RECENT DEVELOPMENTS

-In past few years Indian corporates have created great goodwill all over the world, which is pushing FIIs to prefer Indian corporate debt.

-Presently Indian corporate debts are offering a higher coupon rate in comparison with their counterparts all over the world which is also pulling the world towards them.

-In past few years equity has emerged as an asset class which has provided very good returns, because of this fact retail investors are preferring equity over corporate debts.

-Authorities have been formed all over the world to regulate the corporate bond market.

58

-Now a days ECB (external commercial borrowing) has emerged as a new arena in the field of corporate bonds, which allows the companies to borrow from overseas markets.

FIXED DEPOSITS

IntroductionIn the field if financial investment fixed deposits has been a legendary tool, people preferring risk free investment will always go for this without hasitation.in this chapter we are about to know following aspects of this type of investment tool :-Positive and negative aspects of fixed deposits. -Rate of interest on fixed deposits. -Maturity. -Time period. -Data related with the industry.

59

-Recent developments.

60

61

DEFINITION:-Fixed Deposite refers to the amount deposited for a fixed tenure with a fixed rate of interest.

Positive features:-Risk free returns. -Bank guarantee. -Tax exemption. -Easy to invest

Negative features:-Low liquidity. -Does not beat inflation with very high margin.

Time period:-Time period is one of the most important element of a fixed deposit; F.D. is issued for a particular period of time with a fixed rate of interest. Generally the period is 1 to 7 years.

Rate of interest:-As we know that a bank F.D. is issued with a fixed rate of return on it, currently the rate of interest on a F.D. is between 9-12 percent which is provided on a compounding basis.23

62

Maturity:-Maturity refers to completion of that time period for which a F.D. has been issued.

Lets play with numbers:-163 is the number of commercial banks in India which can issue FIXED DEPOSITS.24

-3417000+ CRORE is the total amount of deposits with all scheduled banks in terms of FIXED DEPOSITS.25

-7- 9%is the current rate of interest now days.26

* All of the above figures are as on 31 st March, 2009.

63

RECENT DEVELOPMENTS

-Fixed deposits have always been one of the most favorite instrument for investment among all classes of investors, but recently other investment tools like LAND and EQUITY and COMMODITY have provided far better returns in comparison with FIXED DEPOSITS. Because of this reason a lot of focus is shifting from this investment tool.

-Interest rate on F.D. is largely affected by RESERVE BANK OF INDIAs monetary policy and recently the R.B.I. has increased interest rates

-The difference between rate of interest of INDIA and the rest of the world is providing a lot of money to Indian banking system.

64

PRECIOUS METALS AND STONES

IntroductionPrecious metals and stones are considered to be the safest heaven in the field of investment, these things includes tools like gold, silver and gems with it. Another important aspect of this tool is that in times of high inflation it provides a huge amount of security because of a history of providing returns which beats inflation with better margin. In this chapter we will learn following about this investment tool:-Positive and negative aspects of precious metals and stones. -Exchanges. -Exchange Traded Funds (ETF). -Data related to the industry. -Recent developments.

65

66

Precious metals and stones -Precious metals and includes investments tools like gold, silver and gems. Positive features:-High returns. -Security of investment to some extent. Negative features:-Price fluctuations. -Huge amount of investment is needed. Exchanges:-Multi Commodity Exchange (MCX), National Commodity and Derivative Exchange (NCDEX) are two of the largest exchanges of INDIA where we can purchase precious metals like gold and silver. Commodities exchanges play an important role in price discover for these metals.27

ETFs:-Exchange Traded Funds (ETF) are some sort of mutual fund which can be traded on stock exchanges, these funds are purely dedicated to GOLD and SILVER. Any of the investor can simply contact his/her stock

67

broker and order to purchase any number of units according to his/her wish. Each unit of ETF is equal to one gram of gold in terms of market price. Recently AMCs like KOTAK MUTUAL FUND, RELIANCE MUTUAL FUND, and UTI MUTUAL FUND have successfully launched their ETFs.28

Lets play with numbers:-

-900+ tons of gold is consumed annually in INDIA annually.29

-300+ million tons of gold produced annually all over the world.30

-Rs.14407 was the all time high price of gold per 10 gram in INDIA.31

* All of the above figures are as on 31st March, 2009.

68

RECENT DEVELOPMENTS

-Precious metals and stones has always been a preferred tool of investment for centuries and there is not any change in that status, still gold is considered to be the safest investment tool of all.

-Because of uncertainty in global environment gold is being considered as the safest heaven by all the investor classes.

-Exchange traded funds are the new gateway to invest in GOLD and SILVER.

-In past few years INDIA has been able to maintain its no. 1 status in gold
consumption and this status is expected to maintain in future.

69

-In past few years some of the corporate like TATA (tanishq). RAJESH EXPORTS have successfully entered in branded jewellary market which is expected to grow 20%+ per annum.

COMMODITIES

IntroductionCommodities can be considered as an emerging tool for investments, in past 4-5 years people have started looking at it for investment purposes and now they are no more worried about the price discovery mechanism because availability of commodity exchanges. In this chapter for commodities we will understand following facts:-Meaning -Positive and negative aspects. -Commodity exchanges. -Data related to the field. -Recent developments. 70

71

72

MEANING -While talking about commodities we can take two of the following parts:-edibles like GRAINS, PULSES and some others

-non edibles like METALS and CRUDE OIL.

Positive features:-high returns -consumability.

Negative features:-price fluctuations. -high risk -huge investment needed.

Commodity exchanges:-MCX and NCDEX are the largest commodity exchanges in India. -NEWYORK metal and energy exchange (NYMEX) is the largest commodity exchange of the world.

73

Lets play with numbers:-

-9000+ crore is the total daily turnover of exchanges like MCX and NCDEX32

-147+ dollar per barrel was the peak price for crude at NYMEX.33

-There are more than 15 global commodity exchanges in the world34.

* All of the above figures are as on 31st March, 2009.

74

RECENT DEVELOPMENTS

-Crude oil is the highest demanded commodity of the world which is leading the crude oil to new highs.

-Development of exchanges for trading in commodity has is helping the investor in price discovery.

-Global exchanges like NYMEX and NYSE are eying stakes in local exchanges like MCX and NCDEX. One of the reasons for this development is the fast growing Indian commodity market

-In past few months government has banned some commodities like rice and wheat for future trading due to inflationary pressure in the nation.

-FMC (Forward Market Commission) has been established to keep an eye on commodity trading in INDIA. 75

GOVERNMENT SECURITIES

Introduction Government securities are issued by the government to fulfill its need of funds for different economic and non-economic activities. because of risk free return and assurance of getting the amount back in any case this tool of investment is considered to be one of the best, in this chapter we will cover following aspects :-

-Positive and negative aspects of investing in governments securities. -Recent developments.

76

77

78

Government securities like KVP (kisaan vikas patra); NSC (national saving certificate) has always been a preferred tool of investment for Indian public. Positive features -Risk free returns. -Fixed rate of return. -Government guarantee on investment. Negative features -Low rate of interest. -Does not prove to be an effective investment in times of high inflation.

RECENT DEVELOPMENTS
As we all know that government securities have always been one of the favorite investment tools in any part of the world because of the guarantee of return provided by the government. But now a days people are showing preference to other investment tool over this because of low return on investment by government securities. Still there are some of the financial analysts who support the view that most of the part of the portfolio should be invested in government securities because of looming fear of global recession in next few years because in any case government will have to pay the amount back to the investor.

79

LAND

Introduction As we all know that land is a resource which is limited in nature, it is something which cannot be crated et al,that is why this is getting very famous for investment purposes.now days a new industry named REAL ESTATE INDUSTRY is getting a lot of attention of investors of both sides domestic as well aa foreign. In this chapter we will understand following :-

-Positive and negative aspects of investment in land. -Recent developments.

80

81

Positive features -High rate of return. -Low price fluctuation. -Asset building for investor.

Negative features -Huge amount of investment is needed. -Price discovery is a very critical issue for land.

RECENT DEVELOPMENTS

-Land is considered as one of the safest asset class to invest in. in past few years Indian real estate industry has seen a lot of changes, now a person who does not have that much money to invest directly in real estate can invest into the shares of some of the real estate companies like DLF, UNITECH and some more.35 -Global players like BLACKSTONE from U.S.A. and EMMAR from DUBAI are expanding their operation in INDIA.

82

-INDIAN real estate company DLF is crowned as the largest real estate company of the world

ONE STEP MORE

TOWARDS INVESTMENTS

Introduction In preceding chapters we have understood most of the things about financial investment and different tool available for that activity, but this is not the whole thing, we have to take one more step for developing a better understanding, in this chapter we will discuss following aspects of investments :-Investment strategy. -A global perspective. -A futuristic view.

83

INVESTMENT STRATEGY

Now when we have understood most of the part regarding financial investment, so we should also come to know about the overall financial investment strategy. Following should be some of the most important part of any investment strategy:

-Return maximization.

-Risk minimization.

-Investment strategy should be based on investors profile.

-Investment should always be knowledge based.

84

While taking consideration of investment strategy we should keep in mind all of the factors related to the investor, which may include AGE, FINANCIAL STATUS, RISK APETITE and some others.

A GLOBAL PERSPECTIVE

GLOBAL RISK Now it is not like that investment made in a part of the world will not be affected with developments happening in other parts. Recently we have seen global equity market meltdown because of SUB-PRIME issue. Most of the equity markets corrected 30-40 % from their peak only because of fear of recession over U.S. economy. In simple words we can say that investments made in any part of the world will surely get affected by any type of development happened in other part. These developments may be on both sides, either positive or negative. So while choosing any type of investment tool the analyst as well as the investor should also understand the global risk associated with it.

GLOBAL PARTICIPATION The world is flat -THOMAS FREEDMAN As fast as globalization is taking place in different part of the world the distance between nations is shrinking with the same pace. Now people from SINGAPORE or U.K. are not restricted to invest only in their own nation rather they are moving 85

to different part of the world. The same is the case with most of the world. Global giants like CITIBANK, BNP PARIBAS, HSBC, UBS and some more are taking part in day to day investment activities all over the world.

A FUTURISTIC VIEW
As we all know that no one can predict future accurately but at least we can make an estimate of it. The same is the case with investment field. Following are some of the prediction about the future of investments field:-

-Higher participation in equity and equity related instruments.

-Reduced interest in fixed income tools.

-Increased role of financial planners.

-More attention towards investor protection.

-Increased transparency in the system.

86

Chapter 4 Research Methodology

87

Research Methodology :Research methodology is a way to systematically solve the research problem. It may be understood as a science of studying how research is done scientifically. In it we study the various steps that are generally adopted by a researcher in studying his research problem along with the logic behind them.

Title of the study :The title of my project study report is Customer Awareness Development of Different Financial Investment Tools.

Objective of the Study :The main aim of project was to accomplish the following objectives : # To explore different financial investment tools. # To understand the methodology to invest in different investment tools.

88

# To understand competitive impact of financial investment tools on one another. # To get information about the investors awareness about various investment tools.

Type of Research :The type of research under the present project is a descriptive research. It includes surveys and fact-finding inquiries of different kinds. The major purpose of descriptive research is the description of state of affairs, as they exist at present. There is no control over the variables and only the causes can be discovered Personal interview approach was adopted for the project. In this type of research, the researcher has to contact the person directly to know the available information and analyze these to make a critical evaluation. The facts or information required to analyze the data was available in interviewers statements. This was one of the main sources for the project.

Sampling Design :A sample design is a definite plan, determined before any data actually collected from a given population. Sampling is only a tool, which helps to know the characteristics of the universe or the population by examining only a small part of it.

Define Universe :89

The first step in developing the sample design is to clearly define the set of objectives i.e. the universe. The universe, in this project is future prospect of city was considered as a universe.

Sampling Unit :All the persons who fall under the category of literate people, who have knowledge of various or even some of investment tools, I have chosen as a sample unit for this project work.

Sample size :This refers to the number of items to be selected from the universe to constitute a sample. It should be optimum i.e. one which fulfills the requirement of efficiency, flexibility, reliability and representative- ness. From long list of general public, I selected a sample of 100 people.

Data Collection :Data can be obtained from two important sources : # Primary Data # Secondary Data

Primary Data :-

90

The Primary data are those, which are collected a fresh and for the first time, and thus happen to be in character. Primary data can be collected by various methods i.e.

Data Collection Method : To collect primary data, I employed questionnaire for this survey work. I visited personally to sample units selected by me using stratified sampling methods.

Secondary Data :Secondary data are those data which have already been collected by someone else and which have already passed through the statistical process. It can be collected through : # Various publications. # Book, magazines and newspapers

Limitation of the Study :Although this study has done with optimal accuracy yet there were some limitations which I have faced while doing my project work. Some of the limitations which I faced during my project may be summarized as follows :# The size of sample general people is limited as looking at the time constraints it is impossible to get reaction of each & every body . # The area of study is limited up to the limits of Kota city. 91

# Getting accurate responses from general public is difficult. They may be partial or refuse to give any information.

92

Chapter 5 & 6 Facts and Findings & Analysis and Interpretation

93

1.Are you aware about all of the financial investment tools? Yes 18 No 82

YES 18%

NO 82%

From the above chart Most of the people like 82% are not aware about various new investment tools like, Mutual Funds, Equity, Corporate Debts etc. So, companies shold make attempts to increase such awareness.

2.Which type of tool do you prefer the most, while investing? Fixed Return Tools Fluctuating Return Tools

94

77

23

90 80 70 60 50 40 30 20 10 0 Fixed return Tool Fluctuating Return Tool

Even today people have low risk bearing attitude and thus,most of the people prefer fixed return tools like Fixed Deposits, Government Securities etc.

3.Under the umbrella of Fixed Return Instruments, which instrument do you think is the best?

95

FMP 12

Corporate Debt 18

Government Securities 28

Fixed Deposit 42

42

28 18 12

FMP

Corporate Debt

Government Security

Fixed Deposit

As generally people prefer fixed return tools, among such tools, people prefer Fixed Deposits and Government Securities the most.

96

4.Under the umbrella of Fluctuating Return Instruments, which instrument do you think is the best? Equity 17 Gold 38 Land 32 Mutual Fund 13

40 35 30 25 20 15 10 5 0 Equity Gold

Land Mutual Fund

Even today, people invest mostly in traditional fluctuating return instruments like, Gold and Land.

5.In which type of investment tool do you believe? Diversified Tools 97 Single Tool

62

38

Diversified Tool

Single Tool

18%

82%

Most of the people invest in diversified investment tools rather than in a single tool, so as to allocate their risk.

6. From which place do you prefer to buy Mutual Funds?

98

Banks 55

Individual Brokers 13

NBFCs 32

NBFCs 32%

Bank 55%

Individual Bankers 13%

Study shows that while investing in Mutual Funds, people trust on Banks the most.

99

7. Are you aware about all of the charges of Mutual Funds? Yes 20 No 68 Partially Aware 12

70 60 50 40 30 20 10 0 Yes No Partially Aware

Study shows that most of the people who invest in the Mutual Funds have less or no awareness about the various charges of Mutual Funds.

8. What do you think right time of the investment? 100

When market goes down. When market goes up. We can invest any time, but with sound advice. Regular, but systematic investment.

23 10 34 33

40 35 30 25 20 15 10 5 0 When m arket goes down When market goes up We can invest any time but with sound advice Regtm entular but system atic inves

Mostly, people prefer regular investment, but with proper precautions.

9.Which source provides you the best information about investment tools? Newspapers Advertisement Research provided by Distributor

101

32

35

different companies 15

Channels 18

Newspaper

Advertisement

Research provided by different companies distributer channel 1% 18% 39%

42%

Even today, print media and broadcast media are the most successful tools which get people informed about various investment tools.

10. What is your expected rate of return from different investment tools? 4-5% 5-7% 7-10% More Than 10%

102

15

27

43

15

50 40 30 20 10 0 4-5% 5-7%

7-10% More than 10%

Most of the people expect average rate of return on their investments.

10.Are you satisfied from your investment:103

Yes 75

No 25

No 25%

Yes 75%

From the above chart most of the people are satisfy from their investment

Chapter 7
104

Conclusion

Conclusion :After understanding most of the thing about different investment tools, we can say that there have been a lot of developments and the field is growing consistently. Another we can say that this development process is not going to stop. A lot of new aspects will be there and a lot of older one will get phased out because the only thing which is consistent is change.

105

Another thing to be concluded is that even today, in India, many people are there who are not aware about new investment tools like, Mutual Funds etc. and also having low risk bearing attitude.

Chapter 8
106

Recommendation & Suggestions

Suggestions :On the basis of my experience & study, I would like to give following suggestions :107

# As there is low awareness in general public about new investment tools like, Mutual Fund, Equity Corporate Debt etc, so attempts should be made to increase awareness for such tools.

# Mutual Fund is the least popular investment area so promotional tools should be used to make it popular among small & big investors.

# In today,s volatile market, investors are loosing their confidence in stockmarkets and mutual funds, so attempts should be made to bring investors confidence back.

108

Chapter 9 Appendix

Questionnaire
109

NAME AGE OCCUPATION

:- . :- . :- .

CONTACT NO. :- .

1.

Are you aware about all of the financial investment tools? Yes No

2.

Which type of tool do you prefer the most, while investing? Fixed Return Tools Fluctuatin Return Tools

3.Under the umbrella of Fixed Return Instruments, which instrument do you think is the best? FMP Corporate Debt Government Securities Fixed Deposit

4. Under the umbrella of Fluctuating Return Instruments, which instrument do you think is the best? Equity Gold Land Mutual Fund

5. In which type of investment tool do you believe? 110

Diversified Tools

Single Tool

6.Are you aware about all of the charges of Mutual Funds? Yes Partially Aware No

7.What do you think right time of the investment? When market goes down. When market goes up. We can invest any time, but with sound advice. Regular, but systematic investment.

8.Which source provides you the best information about investment? Newspapers Advertisement Research of different companies Distribution Channels

9. What is your expected rate of return from different investment tools? 4-5% 5-7% 7-10% More Than 10%

10.Are you satisfied from your investment? Yes No 11.Suggestion:

111

112

Chapter 10 Bibliography

113

BIBILOGRAPHY
1. bseindia.com, nseindia.com Book- laymans guide to mutual funds (outlook publication 2nd edition) 2. 3. 4. nseindia.com, sebi.gov.in moneycontrol.com sebi.gov.in Book- laymans guide to stock market (outlook publication 2nd edition) 5. 6.. 7.. bseindia.com rbi.gov.in amfiindia.com Book- laymans guide to mutual funds 8.. 9. easymf.com .amfi circular year 2008-09 10.reliancemutual.com 11 .valueresearchonline.com 12 Financial Management by Ravi M. Kishore (taxmann publications) 114

13. moneycontrol.com 14. bseindia.com 15 rbi.gov.in 16. mcxindia.com 17. reliance mutual funds, valueresearchonline.com 18 .commoditycontrol.com 19. ncdex.com, mcxindia.com 20. cnbc-tv 18 21. HSBC global survey 2006-07 22. forbes magazine

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