Acknowledgement

With regard to my Project with Mutual Fund I would like to thank each and every one who offered help, guideline and support whenever require.

I would like to express my gratitude to all those who gave me the possibility to complete this project. My deepest thanks to my teacher Mrs. Rupali Misra for guiding and correcting various documents of mine with attention and care. She has taken pain to go through the project and make necessary correction as and when needed. I express my thanks to respected Dr. Latika Sahni, Dean Asian Business School (ABS) Noida, for extending her support. I would also thank my Institution and my faculty members without whom this project would have been a distant reality. I also extend my heartfelt thanks to my family, friends and well wishers.

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EXECUTIVE SUMMARY
In few years Mutual Fund has emerged as a tool for ensuring ones financial well being. Mutual Funds have not only contributed to the Indian 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 i n v e s t i n m u t u a l funds increases to as many as one in five people. This Project gave us a great learning experience and at the same t i m e i t g a v e u s enough scope to implement our analytical ability. The analysis and advice presented in this Project Report is based on literature survey and various market research companies. This Project as a whole can be divided into two parts. The first part gives an insight about Mutual Fund and its various aspects, like: Company Profile, Objectives of the study, Research Methodology. One can have a brief k nowledge about Mutual Fund and its basics through the Project. The second part of the Project consists of data and its analysis collected through research from various tools like: internet, books, and faculty members. This Project covers the topic THE MUTUAL FUND IS BETTER INVESTMENT PLAN. The data collected has been well organized and presented. I hope the research findings and conclusion will be of use.

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STUDENT DECLARATION

This project has been undertaken for partial fulfillment of the requirement for the award of the degree of Master of Business Administration (MBA) of PTU, UNIVERSITY, and PUNJAB. This project has executed during II semester of MBA programmed under the supervision of Mrs. Rupali Misra Nigam Further, I declare that this project is my original work and the analysis and findings are for academic purpose only. This project has not been presented in any seminar or submitted elsewhere for the award of any degree or diploma.

Counter signed by (MEGHA BANSAL) (NIKITA SINGHAL) MBA (II semester)

--------------------(Supervisor)

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Contents
EXECUTIVE SUMMARY................................................................................................. 2 INTRODUCTION TO MUTUAL FUND INDUSTRY..............................................................6 Terminology..............................................................................................................12 No-load fund.............................................................................................................. 12 A mutual fund whose shares are sold without a sales commission and without a 12b-1 fee of more than 0.25 percent per year.....................................................................12 Process of Mutual Fund.............................................................................................15 Types of Mutual Funds Schemes in India .................................................................16 Overview of existing schemes existed in mutual fund category: BY CONSTITUTION .............................................................................................................................. 16 1. Open - Ended Schemes: .................................................................................16 2. Close - Ended Schemes:..................................................................................17 3. Interval Schemes:...........................................................................................17 Overview of existing schemes existed in mutual fund category: BY INVESTMENT OBJECTIVE.............................................................................................................. 17 1. Equity fund: ...................................................................................................17 2. Debt funds:.....................................................................................................18 3. Balanced funds:..............................................................................................18 By investment objective:........................................................................................19 Other schemes ......................................................................................................19 Tax Saving Schemes:..........................................................................................19 Index Schemes:.................................................................................................. 19 Sector Specific Schemes:....................................................................................19 INVESTMENT STRATEGIES.........................................................................................21 Systematic Investment Plan:..................................................................................21

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Systematic Transfer Plan:.......................................................................................21 3. Systematic Withdrawal Plan:..............................................................................21 Risk Return MATRIX...................................................................................................22 Advantages of Investing Mutual Funds......................................................................24 Disadvantages of Investing Mutual Funds..................................................................25 COMPANY PROFILE.................................................................................................26 PRODUCTS OF SBI MUTUAL FUND..............................................................................27 Equity schemes......................................................................................................27 Debt Schemes........................................................................................................28 Balanced Schemes ................................................................................................29 COMPETITORS OF SBI MUTUAL FUND........................................................................30 Awards and achievement..........................................................................................31 CONCLUSIONS...........................................................................................................33 Recommendations.....................................................................................................34

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INTRODUCTION TO MUTUAL FUND INDUSTRY

The mutual fund industry in India is large and growing. Over the last decade, assets under management have increased 7.75 xs to $155 billion in March this year from $20 billion in March 2001, a CAGR of 23%, according to data from the Association of Mutual Funds in India This accelerated pace of growth is extremely attractive. India's large and increasing middle class, prosperity, and low penetration of financial products make a compelling case. But a closer look shows that operating a profitable mutual fund business in India is not easy. And, the industry is ripe for consolidation. The top 10 fund houses have almost 80% of the $170 billion of funds managed in India, as of June this year. While the large fund houses manage an average of $13 billion each, the rest of the players manage over $1 billion per fund house. But even there, the wealth is not evenly spread. The bottom 22 fund houses manage around $11 billion or around $500 million per fund house. Industry participants estimate that the break-even assets for a fund are at $2.25 billion up from around $750 million. The mutual fund industry is all about scale. Management fees are linked to the size of the portfolio, while the size of a team is virtually the same whether the assets managed are $100 million or $1 billion. Larger funds have greater brand visibility, enjoy more clout with distributors and attract more investors all of which reduces their cost of acquisition significantly. As a result, funds that get high inflows enjoy huge economies of scale and see a hockey stick surge in profitability.

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Conversely, smaller players suffer from poor brand visibility, higher distribution costs and struggle to attract talent as well as investors. The industry clearly can't continue in its current form. But what is hampering consolidation? First, existing players have extremely high valuation expectations. While there are quite a few sellers in the market, few deals have been done. Also, many players are keen to portray themselves as full-fledged financial services firms with a view to improve their own market multiples/valuation. Owning a mutual fund business is seen as a key part of this strategy. As a result, fund houses continue to operate, despite bleeding red, with even less than $100 million under management. And, the attractive market potential coupled with the ease of entry (100% FDI) continues to tempt new entrants to test their mettle. But market developments have increased the cost of being in the business and should provoke a rethink of strategy. In 2009, market regulator the Securities and Exchange Board of India banned mutual funds from charging investors an entry load, which was typically used by funds to pay commission to distributors. With the ban, launching new schemes is neither easy nor lucrative as funds are forced to pay commissions out of their own pockets. While limited data availability for prior periods makes comprehensive analysis difficult, it does appear that since the ban was introduced inflows into new equity schemes have reduced while established equity schemes have benefited and continue to attract net inflows. Clearly, an established franchise, strong brand equity and distribution reach have become even more critical to succeed. And small, marginal players can expect a rapid deterioration in value. In March, perhaps recognizing market realities, Benchmark Mutual Fund, a small niche player, sold out to Goldman Sachs for a reported valuation of about 4% of assets managed. This is significantly lower than some of the previous deals, which were in excess of 6% of managed.

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Through this project, we wish to understand the current dynamics of the mutual fund industry per se and its repercussions on the financial service sector.

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Scope of the study

A big boom has been witnessed in Mutual Fund in recent times. A large number of new players have entered the market and trying to gain market share in this rapidly improving market. The study will help to know the preferences of the customer, which company, portfolio, mode of investment, and option for getting return and so on they prefer. This project report may help the company to make further planning and strategy.

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OBJECTIVES OF THE STUDY

The Indian mutual fund industry is passing through a transformation. On 1 side it has seen a number of regulatory developments while on the other side the overall economy is just recovering from the global crisis of 2008.The regulatory changes have been made keeping in mind the best interest of the investors. However, like all changes these changes would take time to b adapted by industry, intermediaries and the investing public at large.

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Limitation

The scope of the study is to a limited area of mutual funds. It consists of only theoretical knowledge. It covers only one market instrument i.e., Mutual funds.

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Terminology
1) AMC
An Asset Management Company is the fund house or the company that manages the money. The mutual fund is a trust registered under the Indian Trust Act. It is initiated by a sponsor. A sponsor is a person who acts alone or with a corporate to establish a mutual fund. The sponsor then appoints an AMC to manage the investment, marketing, accounting and other functions pertaining to the fund. For instance, ABN AMRO Trustee (India) Private Limited is appointed as the trustee to the ABN AMRO mutual fund. ABN AMRO Asset Management (India) Limited is appointed as its investment manager. Various funds with different objectives can be floated under the umbrella of one parent. So ABN AMRO Equity Fund, ABN AMRO Opportunities Fund and ABN AMRO Flexi Debt Fund are all independent schemes of ABN AMRO Mutual Fund. They are managed by the ABN AMRO AMC.

No-load fund
A mutual fund whose shares are sold without a sales commission and without a 12b-1 fee of more than 0.25 percent per year.

2) NAV
The Net Asset Value is the price of a unit of a fund. When a fund comes out with an NFO, it is priced Rs 10. Later, depending on the value of the investments, this price could rise or fall.

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3) Load
This is a fee that is charged when you buy or sell the units of a fund. When you buy the units of a fund, you pay a percentage of it as a fee. This is known as the entry load. Let's say you are investing Rs 10,000 and the entry load is 2%. That means you pay Rs 200 as the entry load and Rs 9,800 is invested in the fund. Now, let's assume you are selling the units of your fund. And the Rs 10,000 you invested initially is now Rs 15,000. Let's further assume the exit load is 2%. So you pay Rs 300 and get back Rs 14,700. Generally, if funds charge an entry load, they will not charge an exit load. Or vice versa. Only one of the loads is charged. The load is a percentage of the NAV.

4) SIP
A Systematic Investment Plan refers to periodic investing in a mutual fund. Every month or every three months, the investor will have to commit to putting in a fixed amount. This will go towards the purchase of units. Let's say that every month you commit to investing, say, Rs 1,000 in your fund. At the end of a year, you would have invested Rs 12,000. If the NAV on the day you invest in the first month is Rs 20, you will get 50 units. The next month, the NAV is Rs 25. You will get 40 units. The following month, the NAV is Rs 18. You will get 55.56 units. So, after three months, you would have 145.56 units. On an average, you would have paid around Rs 21 per unit. This is because, when the NAV is high, you get fewer units per Rs 1,000. When the NAV falls, you get more units per Rs 1,000.

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5) Back-end load
Funds with back-end loads are sometimes called "B" shares. These funds impose a contingent deferred sales charge, or CDSC, which is paid at the time of redemption. This fee is generally much higher than a front-end load. The good news is that it declines incrementally to zero over time, and usually disappears in five to eight years. These funds charge 12b-1 fees, which are typically higher than for front-end load funds. These funds may convert "B" shares into "A" shares after the load period has expired.

6) Dividends and interest

Throughout the year, most mutual funds will receive dividends and interest on the securities they own. If the total passes the fund's annual expenses, you get the rest. Even if you reinvest those dividends, you have to pay ordinary income taxes on that money. That is to be expected -- it's money you made.

7) Prospectus
Every mutual fund issues a prospectus, which is written in the driest, most confusing, boring language possible. But, in essence, it will describe the investment style of the fund. It answers the following essential questions: 1. How much is the fund going to make from managing your money? 2. What kinds of returns has the fund delivered for investors in the past, and what does it generally invest in to achieve these results?

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Process of Mutual Fund

Many Investors with common financial objectives pool their money.

Investors, on a proportionate basis, get mutual funds unit for the sum contributed to the pool.

The money collected from investors is invested into shares, debentures and other securities by the fund manager.

The fund manager realizes gains or losses, and collects dividend or interest income. Any capital gain or losses from such investments are passed on to the investors in proportion of the number of units held by them.

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Types of Mutual Funds Schemes in India

Wide variety of Mutual Fund Schemes exists to cater to the needs such as financial position, risk tolerance and return expectations etc. thus mutual funds has Variety of flavors, Being a collection of many stocks, an investors can go for picking a mutual fund might be easy. There are over hundreds of mutual funds scheme to choose from. It is easier to think of mutual funds in categories, mentioned below.

Overview of existing schemes existed in mutual fund category: BY CONSTITUTION

1. 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.

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2. Close

- Ended Schemes:

These schemes have a pre-specified maturity period. One can invest directly in the scheme at the time of the initial issue. Depending on the structure of the scheme there are two exit options available to an investor after the initial offer period closes. Investors can transact (buy or sell) the units of the scheme on the stock exchanges where they are listed. The market price at the stock exchanges could vary from the net asset value (NAV) of the scheme on account of demand and supply situation, expectations of unit holder and other market factors. Alternatively some close-ended schemes provide an additional option of selling the units directly to the Mutual Fund through periodic repurchase at the schemes NAV; however one cannot buy units and can only sell units during the liquidity window. SEBI Regulations ensure that at least one of the two exit routes is provided to the investor.
3.

Interval Schemes:

Interval Schemes are that scheme, which combines the features of open-ended and close-ended schemes. The units may be traded on the stock exchange or may be open for sale or redemption during pre-determined intervals at NAV related prices.

Overview of existing schemes existed in mutual fund category: BY INVESTMENT OBJECTIVE

1. Equity

fund:

These funds invest a maximum part of their corpus into equities holdings. The structure of the fund may vary different for different schemes and the fund managers outlook on different stocks. The Equity Funds are sub-classified depending upon their investment objective, as follows:

Diversified Equity Funds Mid-Cap Funds Sector Specific Funds Tax Savings Funds (ELSS)

Equity investments are meant for a longer time horizon, thus Equity funds rank high on the risk-return matrix.

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2. Debt

funds:

The objective of these Funds is to invest in debt papers. Government authorities, private companies, banks and financial institutions are some of the major issuers of debt papers. By investing in debt instruments, these funds ensure low risk and provide stable income to the investors. Debt funds are further classified as:

Gilt Funds: Invest their corpus in securities issued by Government, popularly known as Government of India debt papers. These Funds carry zero Default risk but are associated with Interest Rate risk. These schemes are safer as they invest in papers backed by Government. Income Funds: Invest a major portion into various debt instruments such as bonds, corporate debentures and Government securities. MIPs: Invests maximum of their total corpus in debt instruments while they take minimum exposure in equities. It gets benefit of both equity and debt market. These scheme ranks slightly high on the risk-return matrix when compared with other debt schemes. Short Term Plans (STPs): Meant for investment horizon for three to six months. These funds primarily invest in short term papers like Certificate of Deposits (CDs) and Commercial Papers (CPs). Some portion of the corpus is also invested in corporate debentures. Liquid Funds: Also known as Money Market Schemes, These funds provides easy liquidity and preservation of capital. These schemes invest in short-term instruments like Treasury Bills, inter-bank call money market, CPs and CDs. These funds are meant for short-term cash management of corporate houses and are meant for an investment horizon of 1day to 3 months. These schemes rank low on risk-return matrix and are considered to be the safest amongst all categories of mutual funds.

3. Balanced funds:

As the name suggest they, are a mix of both equity and debt funds. They invest in both equities and fixed income securities, which are in line with pre-defined investment objective of the scheme. These schemes aim to provide investors with the best of both the worlds. Equity part provides growth and the debt part provides stability in returns. Further the mutual funds can be broadly classified on the basis of investment parameter viz, Each category of funds is backed by an investment philosophy, which is predefined in the objectives of the fund. The investor can align his own investment needs with the funds objective and invest accordingly.

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By investment objective:

Growth Schemes: Growth Schemes are also known as equity schemes. The aim of
these schemes is to provide capital appreciation over medium to long term. These schemes normally invest a major part of their fund in equities and are willing to bear short-term decline in value for possible future appreciation.

Income Schemes: Income Schemes are also known as debt schemes. The aim of these
schemes is to provide regular and steady income to investors. These schemes generally invest in fixed income securities such as bonds and corporate debentures. Capital appreciation in such schemes may be limited.

Balanced Schemes: Balanced Schemes aim to provide both growth and income by
periodically distributing a part of the income and capital gains they earn. These schemes invest in both shares and fixed income securities, in the proportion indicated in their offer documents (normally 50:50).

Money Market Schemes: Money Market Schemes aim 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.

Other schemes
Tax Saving Schemes: Tax-saving schemes offer tax rebates to the investors under tax laws prescribed from time to time. Under Sec.88 of the Income Tax Act, contributions made to any Equity Linked Savings Scheme (ELSS) are eligible for rebate.

Index Schemes:
Index schemes attempt to replicate the performance of a particular index such as the BSE Sensex or the NSE 50. The portfolio of these schemes will consist of only those stocks that constitute the index. The percentage of each stock to the total holding will be identical to the stocks index weight age. And hence, the returns from such schemes would be more or less equivalent to those of the Index.

Sector Specific Schemes:

These are the funds/schemes which invest in the securities of only those sectors or industries as specified in the offer documents. e.g. Pharmaceuticals, Software, Fast

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Moving Consumer Goods (FMCG), Petroleum stocks, etc. The returns in these funds are dependent on the performance of the respective sectors/industries. While these funds may give higher returns, they are more risky compared to diversified funds. Investors need to keep a watch on the performance of those sectors/industries and must exit at an appropriate time.

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INVESTMENT STRATEGIES
Systematic Investment Plan:
Under this a fixed sum is invested each month on affixed 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)

Systematic Transfer Plan:

Under this an investor invests in debt oriented fund and gives instructions to transfer a fixed sum, at a fixed interval, to an equity scheme of the same mutual fund.

3. Systematic Withdrawal Plan:

If someone wishes to withdraw from a mutual fund then he can withdraw a fixed amount each month.

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Risk Return MATRIX

The risk return trade-off indicates that if investor is willing to take higher risk then correspondingly he can expect higher returns and vise versa if he pertains to lower risk instruments, which would be satisfied by lower returns. For example, if an investors opt for bank FD, which provide moderate return with minimal risk. But as he moves ahead to invest in capital protected funds and the profit-bonds that give out more return which is slightly higher as compared to the bank deposits but the risk involved also increases in the same proportion.

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Thus investors choose mutual funds as their primary means of investing, as Mutual funds provide professional management, diversification, convenience and liquidity. That doesnt mean mutual fund investments risk free. This is because the money that is pooled in are not invested only in debts funds which are less riskier but are also invested in the stock markets which involves a higher risk but can expect higher returns. Hedge fund involves a very high risk since it is mostly traded in the derivatives market which is considered very volatile.

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Advantages of Investing Mutual Funds

1. Professional Management
The basic advantage of funds is that, they are professional managed, by well qualified professional. Investors purchase funds because they do not have the time or the expertise to manage their own portfolio. A mutual fund is considered to be relatively less expensive way to make and monitor their investments.

2. Diversification
Purchasing units in a mutual fund instead of buying individual stocks or bonds, the investors risk is spread out and minimized up to certain extent. The idea behind diversification is to invest in a large number of assets so that a loss in any particular investment is minimized by gains in others.

3. Economies of Scale
Mutual fund buy and sell large amounts of securities at a time, thus help to reducing transaction costs, and help to bring down the average cost of the unit for their investors.

4. Liquidity
Just like an individual stock, mutual fund also allows investors to liquidate their holdings as and when they want.

5. Simplicity
Investments in mutual fund are considered to be easy, compare to other available instruments in the market, and the minimum investment is small. Most AMC also have automatic purchase plans whereby as little as Rs. 2000, where SIP start with just Rs.50 per month basis.

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Disadvantages of Investing Mutual Funds

1. Professional Management
Some funds doesnt perform in neither the market, as their management is not dynamic enough to explore the available opportunity in the market, thus many investors debate over whether or not the so-called professionals are any better than mutual fund or investor himself, for picking up stocks.

2. Costs
The biggest source of AMC income, is generally from the entry & exit load which they charge from an investors, at the time of purchase. The mutual fund industries are thus charging extra cost under layers of jargon.

3. Dilution
Because funds have small holdings across different companies, high returns from a few investments often don't make much difference on the overall return. Dilution is also the result of a successful fund getting too big. When money pours into funds that have had strong success, the manager often has trouble finding a good investment for all the new money.

4. Taxes
When making decisions about your money, fund managers don't consider your personal tax situation. For example, when a fund manager sells a security, a capital-gain tax is triggered, which affects how profitable the individual is from the sale. It might have been more advantageous for the individual to defer the capital gains liability.

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Introduction of
COMPANY PROFILE
SBI Funds Management Pvt. Ltd. Is one of the leading houses in the country with an investor base of over 4.6 million and over 20 years of rich experience in fund management consistently delivering value to its investors? In 20 years of operation, the fund has launched 38 schemes and successfully redeemed 15 of them, and in the process, has rewarded our investors with consistent returns. Schemes of the Mutual Fund have time after time outperformed benchmark indices, honored us with 15 awards of performance and have emerged as the preferred investment for millions of investors. The trust reposed on us by over 4.6 million investors is a genuine tribute to our expertise in fund management.SBI Funds Management Pvt. Ltd. serves its vast family of investors through a network of over 130 points of acceptance, 28 Investor Service Centres , 46 Investor Service Desks and 56 District Organizers.SBI Mutual is the first bank-sponsored fund to launch an offshore fund Resurgent India Opportunities Fund. With over 24 years of rich experience in fund management, SBI Funds Management Pvt. Ltd. brings forward our expertise by consistently delivering value to our investors. They have a strong and proud lineage that traces back to the State Bank of India (SBI) - India's largest bank. It is a Joint Venture between SBI and AMUNDI (France), one of the world's leading fund management companies, with approximately Euro 688 billion of assets under management.

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PRODUCTS OF SBI MUTUAL FUND

Equity schemes
The investments of these schemes will predominantly be in the stock markets and endeavor will be to provide investors the opportunity to benefit from the higher returns which stock markets can provide. However they are also exposed to the volatility and attendant risks of stock markets and hence should be chosen only by such investors who have high risk taking capacities and are willing to think long term. Equity Funds include diversified Equity Funds,Sectoral Funds and Index Funds. Diversified Equity Funds invest in various stocks across different sectors while sectoral funds which are specialized Equity Funds restrict their investments only to shares of a particular sector and hence, are riskier than Diversified Equity Funds. Index Funds invest passively only in the stocks of a particular index and the performance of such funds move with the movements of the index.

Magnum COMMA Fund Magnum Equity Fund Magnum Global Fund Magnum Index Fund Magnum Midcap Fund Magnum Multicap Fund Magnum Multiplier plus 1993 Magnum Sectoral Funds Umbrella MSFU- Emerging Business Fund MSFU- IT Fund MSFU- Pharma Fund MSFU- Contra Fund
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MSFU- FMCF Fund

Debt Schemes
Debt funds invest only in debt instruments such as corporate bonds, Government securities and money market instruments either completely avoiding any instruments in the stock markets as in Income funds or Gilt Funds or having a small exposure to equities as in Monthly Income Plans or Childrens Plan. Hence they are safer than equity Funds. At the same time the expected returns from debt funds would be lower. Such investments are advisable for the risk-averse investor and as a part of the investment portfolio for other investors.

Magnum childrens benefit plan Magnum Gilt fund Magnum Income fund Magnum Insta Cash fund Magnum Income Fund-Floating Rate Plan Magnum Income Plus fund Magnum Monthly Income Plan SBI Premier Liquid fund

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Balanced Schemes
Magnum Balanced Fund invest in a mix of equity and debt investments. Hence, they are less risky than equity funds, but at the same time provide comparatively lower returns. They provide a good investment opportunity to investors who do not wish to be completely exposed to equity markets, but is looking for higher returns than those provided by debt funds.

Magnum Balanced Fund

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COMPETITORS OF SBI MUTUAL FUND

Some of the main competitors of SBI Mutual Fund are as follows:
1. 2. 3. 4. 5. 6. 7. 8.

ICICI Mutual Fund Reliance Mutual Fund UTI Mutual fund Birla Sun Life mutual Fund Kotak Mutual Fund HDFC Mutual Fund Sundaram Mutual Fund LIC Mutual Fund

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Awards and achievement SBI Mutual Fund (SBIMF) has been the proud recipient of the ICRA Online Award - 8times, CNBC TV - 18 Crisil Award 2006 - 4 Awards, The Lipper Award (Year 2005-2006) and most recently with the CNBC TV - 18 Crisil Mutual Fund of the Year Award 2007 and 5 Awards for our schemes.

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CONCLUSIONS

Running a successful Mutual Fund requires complete understanding of the peculiarities of the Indian Stock Market and also the psyche of the small investors. This study has made an attempt to understand the financial behavior of Mutual Fund investors in connection with the preferences of Brand (AMC), Products, 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 fund investors are also growing. Brand plays important role for the investment. People invest in those Companies where they have faith or they are well known with them. There are many AMCs in Dehradoon 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, Sunder am 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.

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Recommendations
Picking a Mutual Fund
Buying
You can buy some mutual funds (no-load) by contacting fund companies directly. Other funds are sold through brokers, banks, financial planners, or insurance agents. If you buy through a third party, you may pay a sales charge (load). That said, funds can be purchased through no-transaction fee programs that offer funds from many companies. Sometimes referred to as "fund supermarkets," these programs let you buy funds from many different companies. They also provide consolidated recording that includes all purchases made through the supermarket, even if they are from different fund families. Popular examples are Schwab's OneSource, Vanguard's Fund Access, and Fidelity's Funds Network. Many large brokerages have similar offerings.

What to Know Before You Shop

Net asset value (NAV), which is a fund's assets minus liabilities, is the value of a mutual fund. NAV per share is the value of one share in the mutual fund, and it is the number that is quoted in newspapers. You can basically just think of NAV per share as the price of a mutual fund. It fluctuates everyday as fund holdings and shares outstanding change. When you buy shares, you pay the current NAV per share plus any sales front-end load. When you sell your shares, the fund will pay you NAV less any back-end load.

Finding Funds
Nearly every fund company in the country also has its own website. Simply type the name of the fund or Fund Company that you wish to learn more about into a search engine and hit search. If you dont have a specific fund company already in mind, you can run a search for terms like no-load small cap fund or large-cap value fund.

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For a more organized search, there are a variety of other resources available online. Two notable ones include: The Mutual Fund Education Alliance is the not-for-profit trade association of the no-load mutual fund industry. They have a tool for searching for no-load funds. Morningstar is an investment research firm that is particularly well known for its fund information.

Identifying Goals and Risk Tolerance

Before acquiring shares in any fund, you need to think about why you are investing. What is your goal? Are long-term capital gains desired, or is a current income preferred? Will the money be used to pay for college expenses, or to supplement a retirement that is decades away? Identifying a goal is important because it will help you hone in on the right fund for the task. For really short-term goals, money market funds may be the right choice, For goals that are few years in the future, bond funds may be appropriate. For long-term goals, stocks funds may be the way to go. Of course, you must also consider the issue of risk tolerance. Can you afford and accept dramatic swings in portfolio value? If so, you may prefer stock funds over bond funds. Or is a more conservative investment warranted? In that case, bond funds may be the way to go.

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BIBLOGRAPHY
SITES

WWW.COOLAVENUES.COM WWW.LIVEMINT.COM WWW.INVESTOPEDIA.COM

NEWSPAPER

ECONOMICTIMES TIMES OF INDIA MINT

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