Contents

Acknowledgement. Declaration Objective of study..

1. Introduction 2. Evolution of Indian Mutual Fund Industry 3. Mutual Fund Terminology 4. Risk Involved In Investing In Mutual Fund 5. Types of Mutual Funds 6. Benefits of Mutual Funds 7. Customer relationship management 8. Product life cycle of mutual fund 9. Similarity with Various Assets Classes 10. Regulatory Framework for Working of Mutual 11.Company profile 12.Research Design 13.Data collection method 14. Finding

Acknowledgement

Life is Journey; its not the years in your life that count. Its the life in your years.
But Life cant be completed without the support of many people

Any accomplishment requires the efforts of many people and this work is not different. I would like take this opportunity to thanks Share Khan for giving me an opportunity to be a part of their esteem organization and enhance my knowledge by granting permission to do Dissertation training project. I am very grateful to Mr. Heena De, Regional Manager, Share Khan LTD. Bangalore, to give me some of his valuable time and able guidance. Without his guidance, support and encouragement. It would not have been possible to complete this project successfully. I am highly indebted to Mr. Akhilesh Gupta, Relationship Manager, UTI AMC LTD. Ajmer, who has provided me with the necessary information and his valuable Suggestions and comments on bringing out this report in the best possible way.

Declaration
I Mr. Akhilesh Pandey hereby declare that this Project Report entitled Customer perception towards Mutual Fund submitted in the partial fulfilment of the requirement of Post Graduated Diploma Management(PGDM)of Dayananda Sagar Business School, Bangalore is based on primary & secondary research. Used data founded & Collected by me in various newspapers, books, Magazines and websites under guidance of my project guide Mr Amit Sharma.

DATE: 15 July 2012

Akhilesh Pandey Student DSBS, Bangalore

Objective of study

The study aims at analyzing the following major issues:

To enhance our knowledge about mutual fund The objective of this study is to measuring satisfaction level of Customers regarding MF. To study the consumer awareness regarding mutual fund To analyze the perception of existing investors about Share Khan. Evaluate perception towards risk involved in mutual fund in comparison to avenues To study the diversification of mutual fund. To know the different attitudes of people regarding Risk, Rate of Return, period of investment etc. To Measure the Awareness of different services of Share Khan in Existing Investors. Like their Online & Offline after sale Services To study the marketing of mutual fund in India

Introduction
A Mutual is a pool of money, which is collected from many investors and is invested by an asset management company to achieve some objective of the investors. Thus, a mutual fund is a collective investment process. An Asset management Company (AMC) collects many investor money. It invest this in various securities to generate return for the investor. Investor get returns after deducting the related expenses. If there is any loss, it would be borne by the investors. An Asset management company manage the pool of money; therefore, it is also an indirect form of investment for investors.

INVESTOR E INVEST 5000

POOL OF
E A

MONEY 100 CR

INVESTOR A INVEST 5000

INVESTOR D INVEST 5000

B
INVESTOR B INVEST 5000

INVESTOR C INVEST 6000

It is necessary that every pool of investor should have one common investment objective because the investment objective decides where the investment is made. If the common objective is to take risk for higher returns in medium to long term then investment will be made in equity. If the objective is lower returns in medium to long term then investment will be made in equity. If the objective is lower return with safety of principal then investment is done in debt instrument. The pool of money witch is contributed mutually by all investors are the benefits will be shared mutually by all investor is the mutual fund. 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 Operation Fund Chart:

Investor

Returns

Fund manager

Securities

Evolution of Indian Mutual Fund Industry

The mutual fund industry in India started in 1963 with the formation of Unit Trust of India, at the initiative of the Government of India and Reserve Bank. The history of mutual funds in India can be broadly divided into four distinct phases

First Phase 1964-87 Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up by the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial Development Bank of India (IDBI) took over the regulatory and administrative control in place of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6, 700 corers of assets under management.

Second Phase 1987-1993 (Entry of Public Sector Funds) 1987 marked the entry of non- UTI, public sector mutual funds set up by public sector banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC). SBI Mutual Fund was the first non- UTI Mutual Fund established in June 1987 followed by Canara bank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC established its mutual fund in June 1989 while GIC had set up its mutual fund in December 1990.

At the end of 1993, the mutual fund industry had assets under management of Rs.47, 004 crores. Third Phase 1993-2003 (Entry of Private Sector Funds) With the entry of private sector funds in 1993, a new era started in the Indian mutual fund industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year in which the first Mutual Fund Regulations came into being, under which all mutual funds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993. The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI (Mutual Fund) Regulations 1996. The number of mutual fund houses went on increasing, with many foreign mutual funds setting up funds in India and also the industry has witnessed several mergers and acquisitions. As at the end of January 2003, there were 33 mutual funds with total assets of Rs. 1, 21,805 crores. The Unit Trust of India with Rs.44, 541 crores of assets under management was way ahead of other mutual funds.

Fourth Phase since February 2003 In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust of India with assets under management of Rs.29, 835 crores as at the end of January 2003, representing broadly, the assets of US 64 scheme, assured return and certain other schemes. The Specified Undertaking of Unit Trust of India, functioning under an administrator and under the rules framed by Government of India and does not come under the purview of the Mutual Fund Regulations. The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is registered with SEBI and functions under the Mutual Fund Regulations. With the bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76, 000 cores of assets under management and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund Regulations, and with recent mergers taking place among different private sector funds, the mutual fund industry has entered its current phase of consolidation and growth. As at the end of September, 2004, there were 29 funds, which manage assets of Rs.153108 cores under 421 schemes.

Risk Involved In Investing In Mutual Fund

Mutual Funds do not provide assured returns. Their returns are linked to their performance. They invest in shares, debentures, bonds etc. All these investments involve an element of risk. The unit value may vary depending upon the performance of the company and if a company defaults in payment of interest/principal on their debentures/bonds, the performance of the fund may get affected. Besides in case there is a sudden downturn in an industry or the government comes up with new a regulation, which affects a particular industry or company the fund can again be adversely affected. All these factors influence the performance of Mutual Funds. Some of the Risk to which Mutual Funds are exposed to is given below:
Market risk -If the overall stock or bond markets fall because of overall economic

factors, the value of stock or bond holdings in the fund's portfolio can drop, thereby affecting the fund performance

Non-market risk - Bad news about an individual company can pull down its stock

price, which can negatively affect fund holdings. This risk can be reduced by having a diversified portfolio that consists of a wide variety of stocks drawn from different industries.
Interest rate risk - Bond prices and interest rates move in opposite directions. When

interest rates rise, bond prices fall and this decline in underlying securities affects the fund negatively.

 Credit risk - Bonds are debt obligations. So when the funds invest in corporate

bonds, they run the risk of the corporate defaulting on their interest and principal payment obligations and when that risk crystallizes, it leads to a fall in the value of the bond causing the NAV of the fund to take a beating.

ORGANIZATION OF A MUTUAL FUND

The Sponsor - A Sponsor is a person who acting alone or in combination with another body
or corporate, establishes a mutual fund and applies to SEBI for its registration. The sponsor is also closely associated with the AMC. As per SEBI regulations, the sponsor has to contribute a minimum of 40% of the net worth of the AMC.

The Board of Trustees(BOT) A person or a group of persons having an overall

supervisory authority over the fund managers, they ensure that the managers keep to the trust deed that the unit prices are calculated correctly and the assets of the funds are held safely.

The Asset Management Company (AMC) A company set up primarily for managing
the investment of mutual funds. It makes investment decisions in accordance with the scheme objectives, deed of trust and provisions of the Investment management Agreement. The Custodian Custodian is registered with SEBI, holds the securities and other assets of various schemes of the fund in its custody. The Unit Holders A person who holds Unit(s) a Mutual Fund.

Types of Mutual Funds

Mutual Funds can be classified on the basis of nature of schemes and the nature of investments. The way in which the features of the schemes are also considered will also impact their classification.

On the basis of nature of Schemes:

On the basis of nature of schemes, Mutual Funds can be divided into three types. The classification is as follows-

Open Ended Funds:

Open ended Mutual Funds have an infinite life which means that there is no ending date of the scheme. This scheme can continue to go on forever and due to this factor the scheme allows investors to come in and go out of the fund when they wish subject to some specific conditions for a few funds. For example, a large number of schemes in the Indian market are open ended schemes that invest in equities where they can continue to operate for years on end. The real benefit of these schemes is that an investor can put additional money into the scheme or take their money out When they feel like it rather than this being decided as a specific date by the fund or some other entity.

Close Ended Schemes:

A close-ended fund or scheme has a stipulated maturity period e.g. 5-7 years. The fund is open for subscription only during a specified period at the time of launch of the scheme. Investors can invest in the scheme at the time of the initial public issue and thereafter they can buy or sell the units of the scheme on the stock exchanges where the units are listed. In order to provide an exit route to the investors, some close-ended funds give an option of selling back the units to the mutual fund through periodic repurchase at NAV related prices. SEBI Regulations stipulate that

at least one of the two exit routes is provided to the investor i.e. either repurchase facility or through listing on stock exchanges. These mutual funds schemes disclose NAV generally on weekly basis.

Interval Fund:
There is another category of funds whose characteristics fall between open ended and close ended funds and these are known as Interval Funds. These funds are not completely close ended or completely open ended in the sense that they are not of a Fixed duration and they do allow investors to make purchases once the initial offer period is over but they will not be available for purchase and sale every day. There will be a specific time period like a few days every three months or every six months when investors can buy and/or sell these units back to the funds. Thus they provide liquidity without compromising on the restricted nature of the fund.

On the Basis of Nature of Investment:

On the basis of nature of investments, Mutual Funds can be divided into thirteen types. The classification is as follows-

Equity Schemes:
Equity schemes invest the amounts that they collect from investors into stocks of various companies listed on the stock exchanges as well as those that are unlisted. These schemes are also called growth schemes because the idea behind such investments is to earn a high return through the rise in the value of the investment. The wide range of stocks available in the market and the different nature of styles of management of the schemes will result in a different profile for various schemes within this area. For example a scheme which invests in large cap stocks will be different from a scheme that will invest its funds into mid cap companies.

In addition there are schemes, which are diversified across various sectors without any bias towards market cap of the stocks it holds. In terms of other styles one can see funds that select stocks based on their dividend yield and these are called dividend yield funds. There is a chance of a high gain in such schemes and in the last three years the returns on many schemes have even crossed more than 100% in a single year. Many investors however forget that there is a downside to the whole investment as a fall in the equity market can result in a fall in the value of the scheme leading to a capital loss for the investors.

Sectoral Schemes:
These are a variant of equity oriented schemes where the risk for the investor is higher than the diversified equity schemes. The funds of such schemes are invested into the shares of a particular sector only or it could be in companies that comply with a particular theme only. Good examples of such schemes are those which invest in the shares of information technology companies or companies from the fast moving consumer goods (FMCG) sector. There is a possibility of a higher return from such schemes because even if the whole market is not doing well a particular sector might be on the growth path. At the same time this has a higher risk because it is possible that nothing happens to a particular sector while the overall market is rising or it could be that just a specific sector is doing badly due to specific reasons. Further with other investment options closed the entire portfolio of the scheme will be subject to a similar kind of risk leading to very little diversification in the portfolio.

Equity Linked Savings Scheme:

Equity linked savings schemes are also known as ELSS or tax savings schemes. These are like diversified equity schemes in terms of their portfolio composition but they give investors a tax benefit that other schemes do not. Investment up to Rs 1 lacks into these schemes qualifies for a deduction under Section aoc of the Income Tax Act along with several other specified investment options.

Investors who put money into such schemes are looking at earning higher returns on their investments and at the same time save on the tax. Unlike normal equity schemes there is also a three year lock in for such schemes.

Index Funds:
Index funds are known as passive schemes because here the fund manager does not have to take active investment decisions regarding selection of companies for investment. The corpus of these schemes is invested in such a manner that it mimics an index that is being tracked by the fund. Thus for example a scheme Tracking the Sensex will have its portfolio in the exact proportion that the 30 sensex scrips are in and hence the performance should mirror the behavior of the index being tracked. At regular periods of time the portfolio is rebalanced so that any deviation is corrected. These are meant for investors who would like to ensure that their returns match that of a specified index.

Income Schemes:
Income schemes invest their assets into debt instruments that are either of medium to long term in duration. This means that the scheme will invest the money into debt instruments that mature after a few years and these can stretch to several years. In terms of the choice available for the fund manager there are bonds, debentures, government securities and other debt instruments. Typically most of these schemes hold a mixture of bonds, debentures, gilts and even short term securities in their portfolio and they keep changing the mix depending upon the fund managers outlook for the future. These schemes are steady in the growth that they witness and hence one should expect returns aligned to the performance of the debt market, which means that under steady conditions it should give reasonable returns and the risk to capital is accordingly lower. However the returns of the scheme turn negative when rates rise and positive when t he rates fall in line with the behavior of the debt instruments.

Liquid Funds:
Liquid schemes are meant for very short term investors where the investor horizon ranges from a couple of days to around a week or slightly more. The liquid schemes invest the money into overnight call money market and extremely short term options so that there is very risk for investors in terms of a capital loss in these schemes. Ideally when the investment is made in this manner liquid scheme should not show any fall in their value but the returns will vary depending upon the rates prevalent during the time period of investment. Thus liquid schemes are meant to be the safest type of schemes where the risk for the investor is minimum and returns are consequently lower.

Short term Schemes:

Short term schemes are debt oriented schemes and are meant for investors who want to park their money for a few months. Thus these are meant for those who do not want to invest for a just a few days and neither for a very long period amounting to a few years. Thus it is for middle of the road investors who do not fall into either the very short or the long term category. The portfolio of short term schemes consists of short term securities including gilts, certificates of deposits and in several cases even bank deposits The returns from such schemes is not very high but similarly the risk is also considerably lower and this is useful for several investors who would like to put their money away for a short period of time and earn high returns during this period.

Floating Rate Funds:

One of the basic features of debt schemes is that the value of the debt holdings will fall in value as the interest rates rise in the economy and they will rise when the rates fall. This makes investors in debt schemes susceptible to losses when conditions are adverse in the bond market. Floating rate funds are those schemes which invest their corpus into floating rate securities which means that the interest rate on these funds are reset at regular intervals. This makes them better positioned to tackle tough times in the debt market as their earnings and rates will change depending upon the resetting of the rates for the securities held. Again these schemes can be either short term or long term schemes.

Gilt schemes:
Gilt schemes are those schemes that invest their assets into only government securities. The gilt schemes can be short term or long term schemes depending upon the composition of the portfolio of the scheme. These schemes have no credit risk, which means that there is no possibility of the investments of the scheme turning out to be worthless because the issuer has gone bankrupt as in this case the issuing authority is the government itself. This does not mean that there is no risk for the investor in such schemes because there is interest rate risk which means that in case interest rate rises there will be a fall in the value of the holdings and a consequent fall in NAV for the investors because the value of the holdings will depend upon the conditions in the debt markets and the movements therein.

Monthly Income Schemes:

Monthly income schemes are debt oriented schemes with a small dose of equity holdings. These schemes invest a large part of their corpus ranging from around 80 to 95% in debt while the remaining 5 to 20% is in equities. There are a large number of such schemes in the market with different levels of equity. The average level of equity holdings of these schemes is around 10% but in the last few years

several variations with a higher level of equity have entered the market. Investors should know that the higher level of equity can raise the earnings of the scheme above that witnessed in pure debt schemes but it will also raise the risk level whereby even the higher debt constituent will not be able to dictate the overall performance of the scheme.

Balanced Schemes:
Balanced schemes are a mixture of equity and income schemes whereby they hold both equities and debt in their portfolio. Recently there was a change whereby in order to qualify for tax benefits in terms of exemption from dividend distribution tax balanced schemes need to hold an average 65% of assets as equity. Due to this one will find the average equity holdings of balanced schemes rising above this level in the last few months. These schemes are meant for those who want to earn some returns on their investment but would like a small element of stability built into the scheme but with the new norms this will be slightly skewed in favor of equity.

Fixed Maturity Plans:

Fixed maturity plans known as FMP are plans that are in operation for a short period of time but they act like a quasi fixed deposit for the investors. This is because the fund manager selects the securities in the portfolio in such a manner that it matures on the same date as that of the scheme. This results in the situation where the investor will get a return near the yield of the investments when they were purchased because of reduced risk in the investment. There is a reduced risk in this kind of an investment because of the fact that when the debt instruments in the scheme are held till maturity the intervening movement of interest rates in the market will not impact the investor in terms of the final returns because of the fact that the price of the debt instrument will converge to its face value at the time of maturity.

Fund of Funds:
Fund of funds is another type of scheme available in the market. This scheme invests its funds into another mutual fund scheme and is hence known as fund of funds. The target objective of the scheme is met through the selection of several other schemes in the portfolio with the desired weights. Several funds invest their corpus into schemes of their own fund house while another variety of fund of fund schemes invest the amount into schemes from other fund houses too.

Benefits of Mutual Funds

Small investors can enjoy several advantages when they invest through the mutual fund route. Not all mutual fund schemes or investors can boast to give all these benefits to the investors but each one gives you one benefit or the other.

Small Amounts: The biggest benefit for small investors is that they can invest using very small amounts of money. In the absence of mutual funds many of these investments would not have been possible at all. For example one can invest regularly each month into a mutual fund scheme with a sum as low as Rs 500 or Rs 1000 each month. A similar amount would have got the investor precious little in terms of actual holdings in the debt market. In case of a bond issue where the face is value is Rs 10,000 they would not even be able to procure 1 bond.

If an investor has say Rs 1,000 with him then quite a few stocks would be out of reach because their values are more than the sum available for investment. On the other hand they can use the same sum to buy the available number of mutual fund units The use of the small amounts for investment is not restricted to just the initial investment but is applicable at all points of time, This means that at any point of time if there is some amount lying in the account then this can be put to use whereby it will earn a higher amount of return than what would have been the case had it just remained in the savings account. In fact the money here can do things which would not be possible otherwise. This means that the amounts can be utilized as pert he need both in terms of investing and withdrawal The use of the money in terms of withdrawing it from the scheme does not receive as much attention as the investment part but its role is no less important. Being able to get some of your money back when you need it without disturbing the other part

of your entire investment is a greater benefit for investors because it ensures that their entire investment plan does not go for a toss due to some small decision on the side.

Diversification:
Even if an investor is able to buy a few assets with the amounts available with them there is little scope for diversification, which results in an increase in risk. Diversification in simple words is nothing but holding a large number of stocks or securities so that the entire holding is not influenced in the same way due to a certain event in the market. An investment in a mutual fund can provide one with the necessary diversification even with the small amounts that one may have. For example, with a sum of Rs 5,000 an investor might be able to get just 1 share of Infosys,1 share of Bajaj Auto and 1 share of Tata Steel at July 2006 price levels. On the other hand the same amount invested in a mutual fund which is diversified in nature would help the investor get around 20-25 shares which would reduce the risk as compared to the small holdings in an individual capacity. There are different levels of diversification that investors can make use of. The most common one is to ensure that in a particular holding in an asset class all the investments do not bear the same functions or features so that they will not move in a single direction based upon the happening of certain events. However taken further the real benefit of diversification is to ensure that your entire investment portfolio is such that there is adequate breadth as well as variety in it. An individual can diversify across various asset classes when their portfolio increases. This is possible with the help of a mutual fund whereby the money can be moved to different types of schemes both in the equity as well as the debt side. Similarly one can now also ensure that the money is diversified between investments in various countries as there are international funds where one will hold equities or debt instruments of foreign countries. This gives the investor a benefit of really ensuring that his money is working well.

Professional fund manager:

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.

Economies 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..

Liquidity:
There is adequate liquidity for mutual fund investors when they want the necessary funds. This means that the fund will be available to the investor when they require it would go through large amounts of paperwork. This might not be the case with regular investments where it might take several days for one to liquidate the necessary amounts. Using the right combination one can create the required liquidity in the mutual fund portfolio. One of the best cases of liquidity is with respect to equity oriented schemes. In several cases with respect to various shares it is very much possible that an investor will be unable to sell the shares on particular days the volumes in the scrip have dried up. On the other hand when an investor puts through a sale transaction on a mutual fund then this has to be executed at the prevailing net asset value at the end of the day and the investor will receive his money. There are some restrictions on this which is mentioned in the line print of the offer document wherein in case there is a major Crisis the fund can restrict the redemptions however in normal market conditions there is little to worry for the investor.

Tax Benefit:
There are a host of tax benefits that an investor can earn with the help of mutual funds. First dividends are tax free in respect of all mutual funds while in case of equity oriented funds even the long term capital gains earned will be tax free in the hands of the investor. This means that the investment can be quite tax Efficient with quite a bit of the payout free from the tax clutches of the investors. In case of equity oriented schemes there is no dividend distribution tax and hence the investors benefit indirectly too and this is another tax benefit for them. While direct investments into assets would also qualify for several of these benefits mutual funds are not worse off than elsewhere.

Rights for a Mutual Fund Holder in India

As per SEBI Regulations on Mutual Funds, an investor is entitled to: Receive Unit certificates or statements of accounts confirming your title within 6 weeks from the date your request for a unit certificate is received by the Mutual Fund. Receive information about the investment policies, investment objectives, financial position and general affairs of the scheme. Receive dividend within 42 days of their declaration and receive the redemption or repurchase proceeds within 10 days from the date of redemption or repurchase. The trustees shall be bound to make such disclosures to the unit holders as are essential in order to keep them informed about any information, which may have an adverse bearing on their investments. 75% of the unit holders with the prior approval of SEBI can terminate the AMC of the fund. 75% of the unit holders can pass a resolution to wind-up the scheme. An investor can send complaints to SEBI, who will take up the matter with the Concerned Mutual Funds and follow up with them till they are resolved.

Marketing strategies of mutual fund

The present marketing strategies of mutual fund can be divided into two main heading:

Direct marketing Selling though intermediaries

Direct marketing
This constitutes 20 percent of the total sales of mutual funds. Some of the important tools used in this type of selling are:

Personal Selling:
In this case the customer support officer or Relationship Manager of the fund at a particular branch takes appointment from the potential prospect. Once the appointment is fixed, the branch officer also called Business Development Associate (BDA) in some funds then meets the prospect and gives him all details about the various schemes being offered by his fund. The conversion rate in this mode of selling is in between 30% - 40%.

Telemarketing:
In this case the emphasis is to inform the people about the fund. The names and phone numbers of the people are picked at random from telephone directory. Some fund houses have their database of investors and they cross sell their other products. Sometimes people belonging to a particular profession are also contacted through phone and are then informed about the fund. Generally the conversion rate in this form of marketing is 15% - 20%.

Direct mail:
This one of the most common method followed by all mutual funds. Addresses of people are picked at random from telephone directory, business directory, professional directory etc. The customer support officer (CSO) then mails the literature of the schemes offered by the fund. The follow up starts after 3 4 days of mailing the literature. The CSO calls on the people to

whom the literature was mailed. Answers their queries and is generally successful in taking appointments with those people. It is then the job of BDA to try his best to convert that prospect into a customer.

Advertisements in newspapers and magazines:

The funds regularly advertise in business newspapers and magazines besides in leading national dailies. The purpose to keep investors aware about the schemes offered by the fund and their performance in recent past. Advertisement in TV/FM Channel: The funds are aggressively giving their advertisements in TV and FM Channels to promote their funds. Hoardings and Banners: In this case the hoardings and banners of the fund are put at important locations of the city where the movement of the people is very high. The hoarding and banner generally contains information either about one particular scheme or brief information about all schemes of fund. Selling though intermediaries Intermediaries contribute towards 80% of the total sales of mutual funds. These are the people distributors who are in direct touch with the investors. They perform an important role in attracting new customers. Most of these intermediaries are also involved in selling shares and other investment instruments. They do a commendable job in convincing investors to invest in Mutual funds. A lot depends on the after sale services offered by the intermediary to the customer. Customers prefer to work with those intermediaries who give them right information about the fund and keep them abreast with the latest changes taking place in the market especially if they have any bearing on the fund in which they have invested.

Regular Meetings with distributors: Most of the funds conduct monthly/bi-monthly meetings with their distributors. The objective is to hear their complaints regarding service aspects from funds side and other queries related to the market situation. Sometimes, special training programmers are also conducted for the new agents/ distributors. Training involves giving details about the products of the fund, their present performance in the market, what the competitors are doing and what they can do to increase the sales of the fund.

COMPANY PROFILE
Incorporated in February 2000, Share khan is India's 2nd largest stock broker providing brokerage services through its online trading website Sharekhan.com and 1950 Share shops which includes branches & Franchises in more than 575 cities across India. Share khan has seen incredible over last 10+ years though it's very successful online trading platform and the chain of franchises located in almost every part of India. Share khan has over 10 lakh retail and institutional customers. Sharekhan.com is the finest investment growth portal for India stock market. The well designed website provides wide range on investment options, latest stock market updates and many tools for investors. Share khan also offers 'Share khan Trade Tiger', one of the most popular trading terminals, for retail investors. The Trade Tiger is quite similar to Broker Terminal and allows frequent traders to place and execute their orders at a high speed. It also provides live data and other tools on the same screen to help the users with their trades. Share khan's 'Share Mobile' platform offers trading facility though mobile application. Mobile apps are available for popular iPhone, iPad, Blackberry, Android and other phones. Services offered by Share khan include trading in equity, F&O and Commodity and investment in IPO's, Mutual Funds, Insurance, Bonds and NCD's. Company also provide Share khan Demat Account and registered as a depository participant with NSD and CDS. Share khan offers verity of accounts to suite customer requirement. These accounts include Share khan First Step Account, Share khan Classic Account, Share khan Trade Tiger Account and Portfolio Mgmt Services (PMS) though Share khan Platinum Circle Account.

Share khan has its own research teams which regularly publishes investment advices, stock tips, quarterly company result analysis and news alerts to its customer though email, SMS and on Sharekhan.com. Share khan has an excellent knowledge centre on its website to help stock and commodity market investors of all kind. It also offers free online and classroom seminars / workshops to investors. Each Share khan Accounts comes with online and in-person help from Share khan representative

Account Types 1. Classic account Allow investor to buy and sell stocks online along with the following features like multiple watch lists, Integrated Banking, demat and digital contracts, Real-time portfolio tracking with price alerts and Instant credit & transfer. a. Online trading account for investing in Equities and Derivatives b. Free trading through Phone (Dial-n-Trade) I. Two dedicated numbers for placing your orders with your cell phone or landline. II. Automatic funds transfer with phone banking (for Citibank and HDFC bank customers) III. Simple and Secure Interactive Voice Response based system for authentication IV. V. get the trusted, professional advice of our telebrokers After hours order placement facility between 8.00 am and 9.30 am

c. Integration of: Online trading + Bank + Demat account d. Instant cash transfer facility against purchase & sale of shares e. IPO investments f. Instant order and trade confirmations by e-mail g. Single screen interface for cash and derivatives

2. Trade Tiger account This is a net based executable application for active traders who trade frequently during the day's trading session. Following are few popular features of Trade Tiger account. a. A single platform for multiple exchange BSE & NSE (Cash & F&O), MCX, NCDEX b. Multiple Market Watch available on Single Screen c. Hot keys similar to a traditional broker terminal d. Tie-up with 12 banks for online transfer of funds e. Different tools available to gauge market such as Tick Query, Ticker, Market Summary, Action Watch, Option Premium Calculator, Span Calculator f. Graph Studies are available including Average, Band- Bollinger, Know Sure Thing, MACD, RSI, etc Share khan Brokerage Charges 2013 Account Opening Fees & Annual maintenance charges (AMC)

Trading Account Opening Charges (One Time): Rs 750 (Classic Account), Rs 1000 (Trade Tiger Account)

Trading Annual maintenance charges (AMC): Rs 400 (First year remains free) Demat Account Opening Charges (One Time): Included in trading account opening charges

Demat Account Annual Maintenance Charges (AMC): Rs. 400 (Free for 1st year with trading account.)

Trading Brokerages

Intra-day Trades: 0.1% on the buy side and 0.1% on the sell side. Delivery Based Trades: 0.5% or 10 paisa per share or Rs. 16/- per scrip whichever is higher.

F&O Trades: 0.1% on the first leg and 0.02% on the second leg if squared off on the same day and 0.1% if squared off on any other day.

Options Trades: Rs. 100/- per contract or 2.5% on the premium (which ever is higher).

How to open account with Share khan? For online trading with Share khan, investor has to open an account. Following are the ways to open an account with Share khan:

Drop your phone number and Share khan Customer Service Executive will call you back for trading & demat account.

Visit one of the Share khan branches. They have branches all over India. Visit Share khan to find the nearest branch.

You can send them an Email on info@sharekhan.com to know about their products and services.

If you wish to chat with customer service representative, you can join the chat session.

Share khan Advantages 1. Share khan offers different trading platform to suite customer requirement. This includes online browser based trading, Installable terminal, mobile, call n trade and in-person trade though branch offices. 2. It offers different brokerage slabs to suit individual customers. Higher your trade your brokerage gets reduced. They have multiple brokerage schemas are available with them. 3. Share khan offers online and classroom training, seminars and workshops to investors. 4. Share khan doesn't charge for Online Funds Transfer from bank account and Funds Payout to bank account. 5. Share khan doesn't charge for DP transactions. Share transfer from and to the dp account is free. 6. Share khan has India-wide network of branches. You can find surly find a Share khan in your neighbourhood. 7. Call & Trade facility is free with Share khan.

Share khan Disadvantages

Share khan doesn't offer 3-in-1 account as they don't provide banking services. They brokerage charges are % based which are higher in comparison to flat fee brokers. They charge minimum brokerage of 10 paisa per stock would not let you trade stocks below 20 rs. (If you trade, you will loose majority of your money in brokerage). Facility to place orders after trading hours is not available. Classic account holders cannot trade commodities.

Research Design

Research can be defined as systemized effort to gain new knowledge. A research is Carried out by different methodologies which have their own pros and cons. Research Methodology is a way to solve research in studying and solving research problem along With logic behind them are defined through research methodology. Thus while talking About research methodology we are not only talking of research methods but also Considered the logic behind the methods. We are in context of our research studies and Explain why it is being used a particular method or technique and why the others are Not used. So that research result is capable of being evaluated either by researcher Himself or by others.

The study at reliance mutual fund is a combination of analytical &practical study. It is a based on secondary data collected from records of the company as Well as other published sources beside the primary data collected from the investors. The study was covered over a period of 2 months.

Data collection method

There are two types of source for collection of data:

Primary Data:
Primary data are collected through personal and telephonic interviews with the help of a structured questionnaire.

Secondary data:
These data are collected from company sources, internet, magazines, newspapers and reference books

TYPE OF SAMPLING USED

We used non-probability type of sampling. In non-probability sampling, the chance of any particular unit in the population being selected is unknown. Since randomness is not involved in the selection process, an estimate of the sampling error cannot be made. But this does not mean that the findings obtained from non-probability sampling are of questionable value. If properly conducted their findings can be as accurate as those obtained from probability sampling.

Convenience Sampling
As the name implies, a convenience sample is one chosen purely for expedience (e.g., items are selected because they are easy or cheap to find and measure. While few analysts would find credibility in conclusions from such extreme cases, the inappropriateness of using convenience sampling to estimate universe values is not widely

recognized. The major problem with this (and other non-probability method) is that one is unable to draw objective inference about a rigorously defined universe. In practice, it is often found that the response given by "convenient" items in a universe differ significantly from the responses given by universe items that are less accessible. As a result, unless one is dealing with a known highly homogeneous universe (virtually all items responding alike), convenience sampling should not be used to estimate universe values. Sample Size The sample size taken in the project work is 50. The area selected is Bangalore and its surrounding area. Convenience sampling method was used in this study because of the constraints like cost and ftime.

1) In which company Mutual Fund Have you invested?

According to survey,

Categories SBI mutual fund UTI mutual fund ICICI mutual fund Reliance mutual HDFC mutual fund Total respondent

Agree Respondents 23 3 8 10 6 50

Percentage (%) 46% 6% 16% 20% 12% 100%

HDFC UTI mutual mutual fund fund 12% 6% SBI mutual fund 46% ICICI mutuafundl 16% Reliance mutual fund 20%

OBSERVATION: In this survey 46% people are interest to buy SBI mutual fund and 20% people to invest in reliance, 16% in ICICI mutual fund and 6% in UTI and 12% interested in investing in HDFC mutual funds

Money Invested

Categories 5000 10,000 15,000 20,000 25,000 above Total Respondents

Agree Respondents 5 7 11 14 13 50

Percentage (%) 10% 14% 22% 28% 26% 100%

5000 10% 25000 above 26% 10000 14%

20000 28%

15000 22%

FINDINGS: In Survey 26% of people invested above Rs 25000 to and 28% people invested Rs 20000 only 10% people invested only Rs 5000.

Employee X1 20 25 15 10 25 15 20 5 15 15 25 5 20 20 15 10 5 15 25 20 10 10 25 20 10 15 20 25 15 443 X12 400 625 225 100 625 225 400 25 225 225 625 25 400 400 225 100 25 225 625 400 100 100 625 400 100 225 400 625 225 9050 X2 20 20 25 25 15 5 20 25 10 20 25 5 20 15 25 20 10 15 20 25 15 443(Total)

Businessman X22 400 400 625 625 225 25 400 625 100 400 625 25 400 225 625 400 100 225 400 625 225 9050

PEOPLE CONSIDERS VARIOUS FACTORS WHILE INVESTING IN MUTUAL FUND

Options Returns Tax saving Liquidity Risk free Total

Responses 26 12 7 5 50

Percentages (%) 49 26 16 9 100%

Risk free 10% Liquidity 14% Return 52% Tax saving 24%

PEOPLE CONSIDER VARIOUS BASES FOR INVESTING IN ANY PARTICULAR FUND OPTIONS Past performance of fund Portfolio of fund Total RESPONSES 32 18 50 RESPONSES IN % 64 36 100%

Portfolio of fund 36%

Past performance of fund 64%

FINDINGS: In Survey 64% of people invested on basis of Past performance of fund and 36 % people have invested on basis of Portfolio of fund.

PEOPLE INVEST THE DIFFERENT % OF SAVING IN MUTUAL FUNDS Sr.no 1 2 3 4 Options 10-20% 20-30% 50% More than 50% Responses 23 17 7 3 Responses in % 46 34 14 6

More than 50% 6% 50% 14% 10-20% 46% 20-30% 34%

FINDINGS: In Survey 6% of people invested more than 50% 10-20% people invested 46% 20-30% people invested 34% of their saving and 6% people invested 50% of their saving in Mutual Fund.

PEOPLE EXPECTATIONS OF RETURN FROM DIFFERENT FUNDS

Sr.no 1 2 3 4

Options 10-20% 20-30% 50% More than 50%

Responses 16 22 5 2

Responses in % 36 49 11 4

50% More than 11% 50% 4%

10-20% 36%

20-30% 49%

FINDINGS: In Survey 49% people expectation of return is 20-30% and 36% people expectation of return is 10-20%. 11% people expectation of return is 50% and only 4% people expectation of return is more than 50%.

PREFERED SCHEMES OF MUTUAL FUNDS

Sr.no 1 2 3 4

Options Debt Fund Balanced Fund Equity Fund ELSS Fund 6 10 25 9

Responses

Responses % 12% 20% 50% 18%

Debt Fund 12%

ELSS Fund 18%

Balance Fund 20%

Equity Fund 50%

PREFERED OPTION WHILE MAKING INVESTMENT

Sr.no 1 2 3

Options SIP STP Consolidated amount

Responses 25 10 15

Responses % 50% 20% 30%

25

15 10

SIP

STP

Consolidated amount

FINDINGS: In Survey 50% people prefer SIP option to invest in mutual fund and 20% prefer STP option of investment and 30% prefer Consolidated option of investment.

SOURCE OF INFORMATION ABOUT MUTUAL FUNDS

Sr.no 1 2 3

Options Print Media Internet Television

Responses 20 11 19

Responses 40% 22% 38%

Television 38%

Print Media 40%

Internet 22%

Risk Factor

Sr.no 1 2 3

Options High Risk Low Risk Television

Responses 4 38 8

Responses 8% 76% 16%

38

8 4

High Risk

Low Risk

Television

FINDINGS: In risk factor 76% people take minimum risk in investment and 16% people take moderate risk only 8% people take high risk for more return on investment

How Long Invested

Sr.no 1 2 3

Options Less than 1year Between 1 to 3year More than 3Year

Responses 4 25 21

Responses 8% 50% 42%

Less than 1year 8%

More than 3Year 42%

Between 1to3year 50%

FINDINGS: In Survey 50% investors are interest in 1 to 3 years of investment and 42% are interested in more than 3 years of investment only 8% investors are interested in short term investment.

Is investment in mutual fund safe? Sr.no 1 2 Options Yes No Responses 38 12 Responses 76% 24%

No 24%

Yes 76%

FINDINGS: In Survey 76% investors think that investment is safe and 24% think that it is not safe

Mutual fund can give higher return?

Sr.no 1 2

Options Yes No

Responses 45 5

Responses 90% 10%

No 10%

Yes 90%

FINDINGS:In Survey 90% investors think that mutual fund can give higher return and 10% think that mutual fund cannot give higher return it can give only normally 15- 20% return.

Future of mutual fund?

Sr.no 1 2

Options Good Not Good

Responses 41 9

Responses 82% 18%

Not Good 18%

Good 82%

FINDINGS:In Survey 82% investor think that future of mutual fund will be good and 18% think that future of mutual fund will not be as such good as it is.

Please rank your expectations from a mutual funds Advisory concern?

Categories 1st Right Advice Speed of transaction Reliability Investor facilitation Advertisements 30 21 17 25 20

Rank given by Respondent 2nd 8 10 13 15 10 3rd 6 9 7 3 2 4th 3 6 10 5 7 5th 3 4 3 2 11

Total Respondents

50 50 50 50 50

35 30 25 20 15 10 5 0 1st 2nd 3rd 4th 5th

OBSERVATION: By surveying for Financial Advisory Institution ,out of 50 respondents 30 respondents give 1st rank to Right Advice ,21 give 2nd Rank to Speed of transaction , 17 give 3rd rank to Investor facilitation , 25 give 4th rank to Reliability & 20give 5th rank for Advertisements so we analyzed that respondents prefer Financial Advisory Institution for Right Advice & Speed of transaction

Following services preferred by you from a financial Advisory Institution? Categories Telephone service Online services Mobile services Personal services Total Respondent Agree Respondents 10 8 17 15 50 Percentage (%) 20% 16% 34% 30% 100%

Personal service 30%

Telephone service 20%

Mobile service 34%

Online service 16%

Do you need further assistance from Investment Advisory Service Share Khan?

Categories Yes No Total Respondents

Agree Respondents 34 16 50

Percentage (%) 68% 32% 100%

No 32%

Yes 68%

OBSERVATION: From the graph, it is clear that only 34 out of 50 respondents want further assistant from Share Khan regarding Mutual Fund but 16 respondents are not looking for assistant from Share Khan.

CONCLUSION
The end of millennium marks 44 years of existence of mutual funds in this country. The ride through these 44 years is not been smooth .Investors opinion is still divided .while some are for the mutual funds others are against it. Mutual Funds (MF) have become one of the most attractive ways for the average person to invest his money. It is said that Bank investment is the first priority of people to invest their savings and the second place is for investment in Mutual Funds and other avenues. A Mutual Fund pools resources from thousands of investors and then diversifies its investment into many different holdings such as stocks, bonds, or Government securities in order to provide

High relative safety and returns. Also generate leads of the prospective investors in Mutual Funds for the Asset Management Company (AMC) There are many improvements pending in the field and it has to happen as soon as possible so as to call the MF industry as an Organized and well-developed sector.