COMPANY PROFILE

Reliance Mutual Fund (RMF) is one of Indias leading Mutual Funds, with Assets Under Management (AUM) of Rs. 48,8 8 crore (AUM as on !"th A#r ""$) and an in%estor &ase of o%er !.' million. Reliance Mutual Fund, a #art of the Reliance ( Anil )hiru&hai Am&ani *rou#, is one of the fastest growing mutual funds in the countr+. RMF offers in%estors a well(rounded #ortfolio of #roducts to meet %ar+ing in%estor re,uirements and has #resence in ''- cities across the countr+. Reliance Mutual Fund constantl+ endea%ors to launch inno%ati%e #roducts and customer ser%ice initiati%es to increase %alue to in%estors. Reliance Mutual Fund schemes are managed &+ Reliance .a#ital Asset Management /td., a wholl+ owned su&sidiar+ of Reliance .a#ital /td. Reliance .a#ital /td. is one of Indias leading and fastest growing #ri%ate sector financial ser%ices com#anies, and ran0s among the to# ! #ri%ate sector financial ser%ices and &an0ing com#anies, in terms of net worth . Reliance .a#ital /td. has interests in asset management, life and general insurance, #ri%ate e,uit+ and #ro#rietar+ in%estments, stoc0 &ro0ing and other financial ser%ices.

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Investment Manager : Reliance .a#ital Asset Management /imited. 1he 2#onsor, the 1rustee and the In%estment Manager are incor#orated under the .om#anies Act '3-4. General Risk Factors : Mutual Funds and securities in%estments are su&5ect to mar0et ris0s and there is no assurance or guarantee that the o&5ecti%es of the 2cheme will &e achie%ed. As with an+ in%estment in securities, the 6A7 of the Units issued under the 2cheme can go u# or down de#ending on the factors and forces affecting the ca#ital mar0ets. 8ast #erformance of the 2#onsor9AM.9Mutual Fund is not indicati%e of the future #erformance of the 2cheme. 1he 2#onsor is not res#onsi&le or lia&le for an+ loss resulting from the o#eration of the 2cheme &e+ond their initial contri&ution of Rs.' la0h towards the setting u# of the Mutual Fund and such other accretions and additions to the cor#us. 1he Mutual Fund is not guaranteeing or assuring an+ di%idend9 &onus. 1he Mutual Fund is also not assuring that it will ma0e #eriodical di%idend9&onus distri&utions, though it has e%er+ intention of doing so. All di%idend9&onus distri&utions are su&5ect to the a%aila&ilit+ of the distri&uta&le sur#lus in the 2cheme. For details of scheme features a#art from those mentioned a&o%e and scheme s#ecific ris0 factors, #lease refer to the #ro%isions of the offer document. :ffer )ocument and ;IM is a%aila&le at all the )I2.s9 )istri&utors of RMF.

RELIANCE MUTUAL FUN

Reliance mutual fund, #romoted &+ the Anil )hiru&hai Am&ani (A)A*) grou#, is one of the fastest growing mutual funds in India ha%ing dou&led its assets o%er the last one +ear. In March, ""4, the Reliance mutual fund emerged as the largest #ri%ate sector fund house in the countr+, o%erta0ing 8rudential I.I.I which has &een holding that #osition for man+ +ears. 1he s#onsor of the fund is Reliance .a#ital /imited, the financial ser%ices arm of A)A*. Reliance .a#ital Asset Management /imited, a wholl+ owned su&sidiar+ of Reliance .a#ital /imited, acts as the AM. to the fund. )irectors of the com#an+ include Amita&h <hun5hunwala, a senior e=ecuti%e of A)A*. Amita&h .hatur%edi is the managing director of the AM.. As of end August ""4, Reliance mutual fund has Rs 8,$-! crore of assets under management. Reliance >,uit+ Fund, launched &+ Reliance MF in earl+ ""4, is the largest mutual find scheme in the countr+ with a fund si?e of o%er Rs -,-"" crore. Reliance Mutual Fund (RMF) has &een esta&lished as a trust under the Indian 1rusts Act, '88 with Reliance .a#ital /imited (R./), as the 2ettlor92#onsor and Reliance .a#ital 1rustee .o. /imited (R.1./), as the 1rustee.

RMF has &een registered with the 2ecurities @ >=change Aoard of India (2>AI) %ide registration num&er MF9" 93-9' dated <une !", '33-. 1he name of Reliance .a#ital Mutual Fund has &een changed to Reliance Mutual Fund effecti%e ''th. March ""4 %ide 2>AIBs letter no. IM)9828943-89 ""4 date ''th. March ""4. Reliance Mutual Fund was formed to launch %arious schemes under which units are issued to the 8u&lic with a %iew to contri&ute to the ca#ital mar0et and to #ro%ide in%estors the o##ortunities to ma0e in%estments in di%ersified securities.

T!e main o"#ectives o$ t!e Tr%st are : 1o carr+ on the acti%it+ of a Mutual Fund as ma+ &e #ermitted at law and

formulate and de%ise %arious collecti%e 2chemes of sa%ings and in%estments for #eo#le in India and a&road and also ensure li,uidit+ of in%estments for the Unit holders. 1o de#lo+ Funds thus raised so as to hel# the Unit holders earn reasona&le 1o ta0e such ste#s as ma+ &e necessar+ from time to time to realise the effects returns on their sa%ings and without an+ limitation.

Cere is a list of mutual funds of RelianceD e"t&Income F%n's Reliance Income Fund Reliance Monthl+ Income 8lan Reliance Fi=ed 1erm 2cheme Reliance *ilt 2ecurities Fund Reliance /i,uid Fund Reliance Medium 1erm Fund Reliance 2hort 1erm Fund Reliance Floating Rate Fund Reliance 6RI Income Fund Reliance Fi=ed Maturit+ Fund 2eries ( I Reliance Fi=ed Maturit+ Fund 2eries ( II Reliance /i,uidit+ Fund Reliance Regular 2a%ings Fund Reliance Fi=ed 1enor Fund Reliance Fi=ed 1enor Fund 8lan A Reliance Fi=ed Cori?on Fund 8lan A @ A E(%it) F%n's Reliance *rowth Fund Reliance 7ision Fund 6RI >,uit+ Fund Reliance Inde= Fund Reliance >,uit+ :##ortunities Fund Reliance 1a= 2a%er (>/22) Fund Reliance >,uit+ Fund

*ector *+eci$ic F%n's Reliance Aan0ing Fund Reliance )i%ersified 8ower 2ector Fund Reliance 8harma Fund Reliance Media @ >ntertainment Fund

OUR CORPORATE GO,ERNANCE POLICY

Reliance .a#ital Asset Management /td. has a %ision of &eing a leading #la+er in the Mutual Fund &usiness and has achie%ed significant success and %isi&ilit+ in the mar0et. Cowe%er, an im#erati%e #art of growth and %isi&ilit+ is adherence to *ood .onduct in the mar0et#lace. At Reliance .a#ital Asset Management /td., the im#lementation and o&ser%ance of ethical #rocesses and #olicies has hel#ed us in standing u# to the scrutin+ of our domestic and international in%estors. Management 1he management at Reliance .a#ital Asset Management /td. is committed to good .or#orate *o%ernance, which includes trans#arenc+ and timel+ dissemination of information to its in%estors and unitholders. 1he Reliance .a#ital Asset Management /imited Aoard is a #rofessional &od+, including well(e=#erienced and 0nowledgea&le Inde#endent )irectors. Regular Audit .ommittee meetings are conducted to re%iew the o#erations and #erformance of the com#an+. Em+lo)ees Reliance .a#ital Asset Management /td. has a #reset code of conduct for all its officers. It has a clearl+ defined #rohi&ition on insider trading #olic+ and regulations. 1he management &elie%es in the #rinci#les of #ro#riet+ and utmost care is ta0en while handling #u&lic mone+, ma0ing #ro#er and ade,uate disclosures. All #ersonnel at Reliance .a#ital Asset Management /td. are made aware of the dos and donts as #art of the )ealing #olic+ laid down &+ the 2ecurities and >=change Aoard of India (2>AI). 1he+ are ta0en through a well(designed CR #rogram, conducted to im#art wor0 ethics, the .ode of .onduct, information securit+, Internet and e(mail usage and a

host of other issues. :ne of the core o&5ecti%es of Reliance .a#ital Asset Management /td. is to identif+ issues considered sensiti%e &+ glo&al cor#orate standards, and im#lement #olicies9guidelines in conformit+ with the &est #ractices as an ongoing #rocess. Reliance .a#ital Asset Management /td. gi%es to# #riorit+ to com#liance in true letter and s#irit, full+ understanding its fiduciar+ res#onsi&ilities.

RELIANCE CAPITAL LIMITE Cor+orate - Registere' O$$ice Reliance .a#ital /td. C Aloc0, 'st Floor, )hiru&hai Am&ani ;nowledge .it+, ;o#ar0hairne, 6a%i Mum&ai ( 4"" $'".1el. " ( !"! $ " Reliance Ca+ital Asset Management Lt'. is a wholl+ owned su&sidiar+ of Reliance .a#ital /imited, the s#onsor. 1he entire #aid(u# ca#ital ('""F) of Reliance .a#ital Asset Management /td is held &+ Reliance .a#ital /td. Reliance Mutual Fund (RMF) has &een s#onsored &+ Reliance .a#ital /td (R./). Reliance .a#ital is Indias fastest growing #ri%ate sector financial ser%ices com#an+. Ran0ing among the to# ! #ri%ate sector &an0ing and finance com#anies in India, with a shareholder &ase of o%er '.! million. Reliance .a#ital has interests in asset management and mutual funds, life and general insurance, #ri%ate e,uit+ and #ro#rietar+ in%estments, stoc0 &ro0ing and other financial ser%ices with a net worth in e=cess of Rs. -, 4 crore (as of March !', ""$) Reliance .a#ital /td. has contri&uted Ru#ees :ne /ac as the initial contri&ution to the cor#us for the setting u# of the Mutual Fund. Reliance .a#ital /td. is res#onsi&le for discharging its functions and res#onsi&ilities towards the Fund in accordance with the 2ecurities and >=change Aoard of India (2>AI) Regulations. 1he 2#onsor is not res#onsi&le or lia&le for an+ loss resulting from the o#eration of the 2cheme &e+ond the contri&ution of an amount of Ru#ees E !"! $""", Fa=. "

one /ac made &+ them towards the initial cor#us for setting u# the Fund and such other accretions and additions to the cor#us.

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A"o%t Reliance Ca+ital Asset Management Lt'.

Reliance .a#ital Asset Management /imited (R.AM), a com#an+ registered under the .om#anies Act, '3-4 was a##ointed to act as the In%estment Manager of Reliance Mutual Fund. Reliance .a#ital Asset Management /imited is a wholl+ owned su&sidiar+ of Reliance .a#ital /imited, the s#onsor. 1he entire #aid(u# ca#ital ('""F) of Reliance .a#ital Asset Management /imited is held &+ Reliance .a#ital /imited. Reliance .a#ital Asset Management /imited was a##ro%ed as the Asset Management .om#an+ for the Mutual Fund &+ 2>AI %ide their letter no IIMAR89' 4493- dated <une !", '33-. 1he Mutual Fund has entered into an In%estment Management Agreement (IMA) with R.AM dated Ma+ ' , '33- and was amended on August ' , '33$ in line with 2>AI (Mutual Funds) Regulations, '334. 8ursuant to this IMA, R.AM is authorised to act as In%estment Manager of Reliance Mutual Fund. 1he networth of the Asset Management .om#an+ including #reference shares as on March !', ""- is Rs.!".'! crores. Reliance Mutual Fund has launched twent+ fi%e 2chemes till date, namel+D Reliance 7ision Fund (2e#tem&er '33-), Reliance *rowth Fund (2e#tem&er '33-) Reliance Income Fund ()ecem&er '33$), Reliance /i,uid Fund (March '338), Reliance Medium 1erm Fund (August """), Reliance 2hort 1erm Fund ()ecem&er "" ), Reliance Fi=ed 1erm 2cheme (March ""!), Reliance Aan0ing Fund (Ma+ ""!), Reliance *ilt 2ecurities Fund (<ul+ ""!), Reliance Monthl+ Income 8lan ()ecem&er ""!), Reliance )i%ersified 8ower 2ector Fund (March ""4) Reliance 8harma Fund ( Ma+ ""4), Reliance Floating Rate Fund (August ""4), Reliance

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Media @ >ntertainment Fund (2e#tem&er ""4), Reliance 6RI >,uit+ Fund (:cto&er ""4), Reliance 6RI Income Fund (:cto&er ""4), Reliance Inde= Fund (<anuar+ ""-), Reliance >,uit+ :##ortunities Fund (Fe&ruar+ ""-), Reliance Fi=ed Maturit+ Fund ( 2eries I (March ""-), Reliance Fi=ed Maturit+ Fund ( 2eries II (A#ril ""-), Reliance Regular 2a%ing Fund (Ma+ ""-), Reliance /i,uidit+ Fund (<une ""-), Reliance 1a= 2a%er (>/22) Fund (<ul+ ""-), Reliance Fi=ed 1enor Fund (6o%em&er ""-) and Reliance >,uit+ Fund (Fe& ""4). R.AM has &een registered as a #ortfolio manager %ide 2>AI Registration 6o. I68""""""4 ! and renewed effecti%e 'st August, ""!. R.AM has commenced these acti%ities. It has &een ensured that 0e+ #ersonnel of the AM., the s+stems, &ac0 office, &an0 and securities accounts are segregated acti%it+ wise and there e=ists s+stems to #rohi&it access to inside information of %arious acti%ities. As #er 2>AI Regulations, it will further ensure that AM. meets the ca#ital ade,uac+ re,uirements, if an+, se#aratel+ for each such acti%it+. R.AM has &een a##ointed as the In%estment Manager of GReliance India 8ower FundG, a 7enture .a#ital Fund registered with 2>AI %ide Registration no.I697.F9"-("49"4 dated <une '4, ""- &ut this acti%it+ is +et to commence.

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Name an' A''ress Mr. Amita"! C!at%rve'i / Rahe5a >m#ress, Flat 6o. ' "'9' " , ' th Floor, 7eer 2a%ar0ar Marg, :##. 2iddhi 7ina+a0 1em#le, 8ra&hade%i, Mum&ai ( 4"" " -. *enior Cor+orate E0ec%tive

Ot!er irectors!i+s irector : Reliance Asset Management (2inga#ore) 8te /imited, Reliance Asset Management (Mauritius) /imited, Reliance Infoin%estments /imited. Financial 8lanning 2tandards Aoard of India

Mr. 1an% os!i '" , 2hi%ala, ;hatau Road, .uffe 8arade, Mum&ai ( 4"" ""-.

C!airman : Matri= Ad%isors (India) 8ri%ate /imited irector :

C!artere' Acco%ntant

A:A .a#ital Mar0ets /imited, 8eo#les Financial 2er%ices /imited Al#ha#lus In%estment Management 8ri%ate /imited.

Mr. Man% C!a'!a .(!-, Malcha Marg, .han0+a#uri, 6ew )elhi ( ''" " '. C!artere' Acco%ntant

irector : 1R. Financial 2er%ices /imited, Cimala+an .rest 8ower /imited, *I. Cousing Finance /imited, ;otla C+dro 8ower /imited, Is#at Industries /imited, 1R. .or#orate .onsulting (8) /imited Arad+ Air /imited. Partner : M9s 1.R. .hadha @ .o., .hartered Accountants

Mr. *%s!il C. Tri+at!i2 I.A.*.

irector :

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3Ret'.4 $, 2ector '-A, 6:I)A ( "' !"'(U8) 3Former *ecretar) to Government o$ In'ia2 Ministr) o$ Petrole%m Nat%ral Gas & Ministr) o$ E'%cation4

I/@F2 Infrastructure )e%elo#ment .or#oration /imited

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INTRO UCTION A mutual fund is created when in%estors #ut their mone+ together in a #articular fund which is #ro%iding them ma=imum in%estment o##ortunities. 1he fund thus collected through #articular mutual fund scheme is managed &+ e=#ertise ha%ing great 0nowledge of in%estment @ mar0et.
TYPE* OF MUTUAL FUN *

Mutual Funds are classified &+ structure intoD :#en E >nded 2chemes .lose E >nded 2chemes. Inter%al 2chemes 5) o"#ective into: >,uit+ (*rowth) 2chemes Income 2chemes Mone+ Mar0et 2chemes 1a= 2a%ing 2chemes Aalanced 2chemes :ffshore funds 2#ecial 2chemes li0e inde= schemes etc. RETURN OPTION IN MUTUAL FUN * )i%idend :#tion *rowth :#tion Rein%estment :#tion T6E A ,ANTAGE* OF IN,E*TING IN A MUTUAL FUN ARE iversi$ications Pro$essional Management Reg%lator) oversig!t Li(%i'it) Convenience Lo7 Cost

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O+en 8 En'e' *c!emes In an o#en( ended fund an in%estor can &u+ and sell units of the fund at 6A7 related #rices, at an+ time, directl+ from the fund. 1his is called as o#en( ended fund &ecause, the #ool of funds is o#en for additional sales and #urchases. 1he #rice at which the in%estors &u+ or sell units is lin0ed to the 6A7. :#en >nded Funds are offered for sale at a #er(s#ecified #rice, sa+ Rs.'", in the initial offer #eriod. After a #er(s#ecified #eriod, sa+ !" da+s, this is declared o#en for sale further sales and re#urchases. 1hese transactions ha##en at the com#uted 6A7 related #rices.

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CLO*E EN E FUN * A closed ended fund is o#en for sale to in%estors for a s#ecific #eriod, after which further sales are closed. An+ further transaction for &u+ing the units or re#urchasing them, ha##en in the secondar+ mar0ets, where closed funds are lists. 1herefore new in%estors &+e from the e=isting in%estors, and the+ can li,uidate their units &+ selling them to other willing &u+ers. 1he #rice at which the units can &e sold redeemed de#ends on the mar0et #rices, which are fundamentall+ lin0ed to the 6A7. In%estors in closed funds recei%e either certificates of de#ositor+ recei#ts, for their holding in closed ended mutual fund. INTER,AL *C6EME* Inter%al 2chemes are those that com&ine the features of o#en(ended and close ended schemes. 1he units ma+ &e traded on the stoc0 e=change or ma+ &e o#en for sale or redem#tion during #re(determined inter%als at 6A7 related #rices. GRO9T6 *C6EME* *rowth 2chemes are also 0nown as e,uit+ schemes. 1he aim of these schemes is to #ro%ide ca#ital a##reciation o%er medium. 1hese schemes normall+ in%est a ma5or #art of their fund in e,uities and are willing to &ear short(them decline in %alue for #ossi&le future a##reciation.

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INCOME *C6EME* Income 2chemes are also 0nown as de&t schemes. 1he aim of these schemes is to #ro%ide regular and stead+ income to in%estors. 1heses schemes generall+ in%est in fi=ed income securities such as &onds and cor#orate de&entures. .a#ital a##reciation in such schemes ma+ &e limited. TA: *A,ING *C6EME* 1a=(sa%ing schemes offer ta= re&ates to the in%estors under ta= laws #rescri&ed from time to time. Under 2ec. 88 of the Income 1a= Act, contri&utions made to an+ >,uit+ /in0ed 2a%ings 2cheme (>/22) are eligi&le for re&ate @ "F for a ma=imum in%estment on Rs '",""" #er financial +ear. MONEY MAR1ET *C6EME* Mone+ Mar0et 2chemes aim to #ro%ide eas+ li,uidit+, #reser%ation of ca#ital and moderate income. 1hese schemes generall+ in%est in safer, short( term instruments, such as treasur+ &ills, certificates of de#osit, commercial #a#er and inter(&an0 call mone+. 5ALANCE *C6EME* Aalanced 2chemes aim to #ro%ide &oth growth and income &+ #eriodicall+ distri&uting a #art of the income and ca#ital gains the+ earn. 1hese schemes in%est in &oth shares and fi=ed income securities, in the #ro#ortion indicated in their offer documents (normall+ -"D-"). RETURN OPTION IN MUTUAL FUN * I,I EN OPTION In%estors who choose a di%idend o#tion as there in%estment, will recei%e di%idends from the mutual funds ,as and when such di%idends are declared 1here are further choices in the distri&ution of di%idend .in a normal di%ided #lan, #eriodicit+ of di%idends is left to the fund manager, who ma+ #a+
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annual di%idend. 1he timing of #a+outs decided &+ the fund manager which can %ar+ form dail+, wee0l+, ,uarterl+, half +earl+ and annuall+. In%estor choosing this o#tion ha%ing affi= num&er of units in%ested in the fund and earn income on this in%estment the 6A7 of these in%estors holdings will %ar+ with the %alue of #ortfolio. GRO9T6 OPTION In%estors who do not re,uire #eriodic income distri&ution can choose the growth o#tion where income earned are retained in the in%estment #ortfolio and are allowed to grow rather &eing distri&uted to the in%estors. 1he return to the in%estors is the rate at which his initial in%estment has grown o%er the #eriod for which he has in%ested in the fund. 1he 6A7 of in%estors will %ar+ with %alue of the in%estment while the num&er of units remains constant REIN,E*TMENT OPTION In%estors rein%est the di%idends that are declared &+ the mutual funds &ac0 into the fund itself at 6A7 that #re%alent at the time of rein%estment .In this o#tion the num&ers of unit held &+ the in%ests will change with e%er+ rein%estment .1he %alue f the units will &e similar to that under the di%idend o#tions

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9!) s!o%l' )o% invest in M%t%al F%n's; <4 Re'%ce )o%r risks = Mutual Funds di%ersif+ +our #ortfolio &+ in%esting in %arious securities @ minimise the ris0. >4 Ma0imise )o%r o++ort%nities = 1he fund managers with the strong research ta0e ?4 Li(%i'it): @%ick access to )o%r mone) = Mutual Funds can &e &ought and sold on an+ dealing da+ A4 A$$or'a"ilit) = :f course +ou dont need to &e millionaire to in%est in mutual fund as the minimum in%estment in mutual fund starts from Rs.-""9(. A Mutual Fund &ecause of its large cor#us allows e%en a small in%estor to ta0e the &enefit of its in%estment strateg+. B4 Lo7 Costs = Mutual Funds are a relati%el+ less e=#ensi%e wa+ to in%est com#ared to directl+ in%esting in the ca#ital mar0ets &ecause the &enefits of scale in &ro0erage, custodial and other fees translate into lower costs for in%estors. C4 Ta0 5ene$its = 1he ta= &enefits that Mutual Funds in%estors en5o+ at the moment is the treatment of long(term ca#ital gains. In%estors ha%e two o#tions as regards long(term ca#ital gainsD 1a= H '"F on ca#ital gains without inde=ation (#lus surcharge) 1a= H "F on ca#ital gains after inde=ation (#lus surcharge) D4 Trans+arenc) = 1he in%estor gets regular information on the %alue of his in%estment in addition to disclosure on the s#ecific in%estments made &+ the fund, the in%ested in each class of assets and the fund managerBs in%estment strateg+ and outloo0. 8) Regulated for in%estor #rotection ( All Mutual Funds in India are registered with the regulator of the Indian securities industr+ ( the 2ecurities and >=change Aoard of India (2>AI). 1he funds function within the framewor0 of regulations designed &+ 2>AI and these

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regulations are intended to #rotect the interests of in%estors. 1he o#erations of the mutual funds are also regularl+ monitored &+ 2>AI.

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T6E A ,ANTAGE* OF IN,E*TING IN A MUTUAL FUN ARE: iversi$ications: 1he &est mutual funds design their #ortfolios so indi%idual in%estments will react differentl+ to the same economic conditions. For e=am#le, economic conditions li0e a rise in interest rates ma+ cause certain securities in a di%ersified #ortfolio to decrease in %alue. :ther securities in the #ortfolio will res#ond to the same economic conditions &+ increasing in %alue. Ihen a #ortfolio in &alanced in this wa+, the %alue of the o%erall #ortfolio should graduall+ increase o%er time, e%en if some securities lose %alue. Pro$essional Management: Most mutual funds #a+ to#flight #rofessionals to manage their in%estments. 1hese managers decide what securities the fund will &u+ and sell. Reg%lator) oversig!t: Mutual funds are su&5ect to man+ go%ernment regulations that #rotect in%estors from fraud. Li(%i'it): Its eas+ to get +our mone+ out of a mutual fund. Irite a chec0, ma0e a call, and +ou%e got the cash. Convenience: Jou can usuall+ &u+ mutual fund shares &+ mail, #hone, or o%er the Internet. Lo7 Cost: Mutual fund e=#enses are often no more than '.- #ercent of +our in%estment. >=#enses for Inde= Funds are less than that, &ecause inde= funds are not acti%el+ managed. Instead, the+ automaticall+ &u+ stoc0 in com#anies that are listed on a s#ecific inde=. 1rans#arenc+ Fle=i&ilit+ .hoice of schemes 1a= &enefits Iell regulated

M%t%al F%n's In'%str) in In'ia 1he origin of mutual fund industr+ in India is with the introduction of the conce#t of mutual fund &+ U1I in the +ear '34!. 1hough the growth was slow, &ut it accelerated from the +ear '38$ when non(U1I #la+ers entered the industr+.

In the #ast decade, Indian mutual fund industr+ had seen a dramatic im#ro%ements, &oth ,ualit+ wise as well as ,uantit+ wise. Aefore, the mono#ol+ of the mar0et had seen an ending #hase, the Assets Under Management (AUM) was Rs. 4$&n. 1he #ri%ate sector entr+ to the fund famil+ rose the AUM to Rs. 4$" &n in March '33! and till A#ril ""4, it reached the height of ',-4" &n. 8utting the AUM of the Indian Mutual Funds Industr+ into com#arison, the total of it is less than the de#osits of 2AI alone, constitute less than ''F of the total de#osits held &+ the Indian &an0ing industr+. 1he main reason of its #oor growth is that the mutual fund industr+ in India is new in the countr+. /arge sections of Indian in%estors are +et to &e intellectuated with the conce#t. Cence, it is the #rime res#onsi&ilit+ of all mutual fund com#anies, to mar0et the #roduct correctl+ a&reast of selling. 1he mutual fund industr+ can &e &roadl+ #ut into four #hases according to the de%elo#ment of the sector. >ach #hase is &riefl+ descri&ed as under.

First P!ase = <ECA=FD Unit 1rust of India (U1I) was esta&lished on '34! &+ an Act of 8arliament. It was set u# &+ the Reser%e Aan0 of India and functioned under the Regulator+ and administrati%e control of the Reser%e Aan0 of India. In '3$8 U1I was de(lin0ed from the RAI and the Industrial )e%elo#ment Aan0 of India (I)AI) too0 o%er the regulator+ and administrati%e control in #lace of RAI. 1he first scheme launched &+ U1I was Unit 2cheme '344. At the end of '388 U1I had Rs.4,$"" crores of assets under management. *econ' P!ase = <EFD=<EE? 3Entr) o$ P%"lic *ector F%n's4 >ntr+ of non(U1I mutual funds. 2AI Mutual Fund was the first followed &+ .an&an0 Mutual Fund ()ec 8$), 8un5a& 6ational Aan0 Mutual Fund (Aug 83), Indian Aan0 Mutual Fund (6o% 83), Aan0 of India (<un 3"), Aan0 of Aaroda Mutual Fund (:ct 3 ). /I. in '383 and *I. in '33". 1he end of '33! mar0ed Rs.4$,""4 as assets under management.

T!ir' P!ase = <EE?=>GG? 3Entr) o$ Private *ector F%n's4 Iith the entr+ of #ri%ate sector funds in '33!, a new era started in the Indian mutual fund industr+, gi%ing the Indian in%estors a wider choice of fund families. Also, '33! was the +ear in which the first Mutual Fund Regulations came into &eing, under which all mutual funds, e=ce#t U1I were to &e registered and go%erned. 1he erstwhile ;othari 8ioneer (now merged with Fran0lin 1em#leton) was the first #ri%ate sector mutual fund registered in <ul+ '33!.

1he '33! 2>AI (Mutual Fund) Regulations were su&stituted &+ a more com#rehensi%e and re%ised Mutual Fund Regulations in '334. 1he industr+ now functions under the 2>AI (Mutual Fund) Regulations '334. 1he num&er of mutual fund houses went on increasing, with man+ foreign mutual funds setting u# funds in India and also the industr+ has witnessed se%eral mergers and ac,uisitions. As at the end of <anuar+ ""!, there were !! mutual funds with total assets of Rs. ', ',8"- crores. 1he Unit 1rust of India with Rs.44,-4' crores of assets under management was wa+ ahead of other mutual funds. Fo%rt! P!ase = since Fe"r%ar) >GG? 1his #hase had &itter e=#erience for U1I. It was &ifurcated into two se#arate entities. :ne is the 2#ecified Underta0ing of the Unit 1rust of India with AUM of Rs. 3,8!- crores (as on <anuar+ ""!). 1he 2#ecified Underta0ing of Unit 1rust of India, functioning under an administrator and under the rules framed &+ *o%ernment of India and does not come under the #ur%iew of the Mutual Fund Regulations. 1he second is the U1I Mutual Fund /td, s#onsored &+ 2AI, 86A, A:A and /I.. It is registered with 2>AI and functions under the Mutual Fund Regulations. Iith the &ifurcation of the erstwhile U1I which had in March """ more than Rs.$4,""" crores of AUM and with the setting u# of a U1I Mutual Fund, conforming to the 2>AI Mutual Fund Regulations, and with recent mergers ta0ing #lace among different #ri%ate sector funds, the mutual fund industr+ has entered its current #hase of consolidation and growth. As at the end of 2e#tem&er, ""4, there were 3 funds, which manage assets of Rs.'-!'"8 crores under 4 ' schemes.
-

GRO9T6 IN A**ET* UN ER MANAGEMENT

D .

TYPE* OF PRO UCT* OFFERE 5Y MUTUAL FUN *

E@UITY FUN *= >,uit+ funds are those that in%est #re(dominantl+ in e,uit+ shares of com#anies. 1here are %ariet+ of wa+s in which an e,uit+ #ortfolio can &e created for in%estors. C6OICE* FOR E@UITY FUN IN,E*TOR* *IMPLE E@UITY FUN *= 1hese funds in%est a #redominant #ortion of(the funds mo&ili?ed in e,uit+ related #roducts. In most cases a&out 8"(3"F of their in%estments are in e,uit+ shares. 1hese funds ha%e the freedom to in%est &oth in #rimar+ and secondar+ mar0ets for e,uit+. :ne %ariation of sim#le fund is the >//2 K>,uit+ /in0ed 2a%ing 2chemes). It in%ests at least 3"F of its funds in e,uit+ and e,uit+ lin0ed in%estments in eligi&le for ta=(re&ate u# to a ma=imum in%estment of Rs. '"""" under section 88 of the Income 1a= Act and the minimum loc0(in #eriod in ! +ears, in order to a%ail the ta= re&ate.

 PRIMARY MAR1ET FUN *= 1he #rimar+ mar0et funds in%est in e,uit+ shares, &ut do so onl+ when a #rimar+ mar0et offering is a%aila&le. 1he focus is on ca#turing the o##ortunit+ to &u+ those com#anies which issue their e,uit+ in #rimar+ mar0ets. *ECTORAL FUN *= 2ectoral funds choose to in%est in one or more chosen sectors of the e,uit+ mar0ets. 1hese %ar+ de#ending on the in%estor #references and the return ris0 attri&utes of the sector. For >=am#le during the technolog+ &oom in stoc0 mar0ets, when #rices of I1 com#anies was rising shar#l+, in%estors who wanted to #artici#ate in this sector could do so, &+ in%esting in sectoral funds whose in%estment o&5ecti%e was to in%est in few choosen sectors such as information technolog+, media and telecommunication.

E5T FUN * )e&t are those that #re(dominantl+ in%est in de&t securities. 1hese in%estors are also 0nown as Income Funds. 1he uni%erse of the de&t securities is com#rises of long term in%estments such as &ond issues &+ central and state go%ernments,. 8u&lic sector organi?ations, #u&lic financial institutions and #ri%ate sector com#aniesL and short(term instruments such as call mone+ lendingL commercial #a#ers, certificates of de#ositsL and treasur+ &ills.
8

 *IMPLE E5T FUN *= 1hese funds in%ests in a #ortfolio of de&t securities chosen from the uni%erse of de&t securities .. 1he fund manager has the freedom to choose from the uni%erse of de&t securities,*o%t. securities and others, as well as long and short term. LI@UI FUN * AN MONEY MAR1ET FUN *= 1hese de&t funds in%est onl+ in instruments with maturities less than a +ear. 1he in%estment #ortfolio is %er+ li,uid, and ena&les in%estors to hold %er+ short hori?ons of a da+ or more. 1he fund is #re(dominantl+ in%ests in mone+ mar0et instruments and #ro%ides in%estors the returns that returns that are a%aila&le on these instruments. In some cases, the funds also #ro%ides in%estors with che,ue writing facilit+, as an additional facilit+ for li,uidit+.

GILT FUN * A *ilt fund in%ests onl+ in securities that are issued &+ the go%ernment, and therefore does not carr+ an+ credit ris0. 1hese funds in%est in short term and long term securities issued &+ the go%ernment. 1hese funds are #referred &+ institutional in%estors who ha%e to in%est onl+ in go%ernment #a#er. Cence the in%estor usuall+ does not ha%e to worr+ a&out credit ris0 since

*o%ernment )e&t is generall+ credit ris0 free. C)F. *ilt Fund is an e=am#le of such a scheme.. *ECTORAL E5T FUN *= 1hese funds in%est in a #re(s#ecified su&set of the de&t mar0ets. For e=am#le, there are de&t funds that would in%est onl+ in AAA rated de&t securities issued &+ the cor#orate sector. 5ALANCE FUN = Fund that in%est &oth in de&t and e,uit+ mar0ets are called &alanced funds. A t+#ical &alanced fund would &e almost e,uall+ interested in &oth the mar0ets. 1he &enefits of di%ersification get further enhanced, as e,uit+ and de&t mar0ets ha%e different ris0s and return #rofiles. 1hese funds see0 to enhance the income #otential of their e,uit+ com#onent, &+ &ringing in de&t. C)F. Aalanced Fund and C)F. .hildrens *ift Fund are e=am#les of h+&rid schemes. T6E *TRUCTURE CON*I*T* OF *+onsor 2#onsor is the #erson who acting alone or in com&ination with another &od+ cor#orate esta&lishes a mutual fund. 2#onsor must contri&ute at least 4"F of the net worth of the In%estment Managed and meet the eligi&ilit+ criteria #rescri&ed under the 2ecurities and >=change Aoard of India KMutual FundsM Regulations, '334. 1he 2#onsor is not res#onsi&le or lia&le for an+ loss or shortfall resulting from the o#eration of the 2chemes &e+ond the initial contri&ution made &+ it towards setting u# of the Mutual Fund.
!"

1he Mutual Fund is constituted as a trust in accordance with the #ro%isions of the Indian 1rusts Act, '88 &+ the 2#onsor. 1he trust deed is registered under the Indian Registration Act, '3"8. Tr%stee 1rustee is usuall+ a com#an+ Kcor#orate &od+ M or Aoard of 1rustees K&od+ of indi%idualsM. 1he main res#onsi&ilit+ of the 1rustee is to safeguard the interest of the unit holders and inter(alia ensure that the AM. functions in the interest of in%estors and in accordance with the 2ecurities and >=change Aoard of India KMutual FundsM Regulations, '334, the #ro%isions of the 1rust )eed and the :ffer )ocuments of the res#ecti%e 2chemes. At least 9! rd directors of the 1rustee are inde#endent directors who are not associated with the 2#onsor in an+ manner. Asset Management Com+an) HAMCI 1he AM. is a##ointed &+ the 1rustee as the In%estment Manager of the Mutual Fund. 1he AM. is re,uired to &e a##ro%ed &+ the 2ecurities and >=change Aoard of India K2>AIM to act as an asset management com#an+ of the Mutual Fund. At lest -"F of the directors of the AM. are inde#endent directors who are not associated with the 2#onsor in an+ manner. 1he AM. must ha%e a net worth of at least '" crore at all times.

!'

Registrar an' Trans$er Agent 1he AM. if so authori?ed &+ the 1rust )eed a##oints the Registrar and 1ransfer Agent to the Mutual Fund. 1he Registrar #rocesses the a##lication form, redem#tion re,uests and dis#atches account statements to the unit holders. 1he Registrar and 1ransfer agent also handles communications with in%estors and u#dates in%estor records.

MAJOR PLAYER* IN MUTUAL FUN * IUN U*TY PRU ENTIAL ICICI MUTUAL FUN
6et worth E as on Mar !'st , "" of Rs 43..83 crores. O"#ective= 1o #ro%ide Indian in%estor mutual fund #roducts 6o. of schemes 44 to suit a %ariet+ of in%estment needs and to suit different ris0s and maturit+ #rofiles. 6o. of schemes including o#tion ' ' >,uit+ 2chemes ')e&t 2chemes -3 2hort term de&t 2chemes '$ >,uit+ @ )e&t 4 *ilt Fund 4 1EY IN ICATOR*:

Assets under Management 6um&er of Funds Managed

As of Ma+ '338 Rs. '4" .rore

As on <une !", ""4 Rs.'4, 44,3' .rore '$

*C6EME*= E(%it) F%n's= 8rudential I.I.I( *rowth 8lan 1a= 8lan FM.* 8lan 1echnolog+ 8lan 8ower 8lan Inde= 8lan )+namic 8lan

!!

e"t F%n's= 8rudential I.I.I( /i,uid 8lan Income 8lan *ilt 8lan Monthl+ Income Fund 2wee# 8lan *ilt In%estment(8F Fi=ed Maturit+ 8lan 2hort term 8lan Fle=i&le Rate 8lan )e#osit #lus 6RI series Income Multi#lier Fund F%n's 5alance'= '. 8rudential I.I.I Aalanced Fund . 8rudential I.I.I .hild .are 8lan

5irla *%n Li$e AMC It #laces a lot of em#hasis on ,ualit+ of management and ris0 control. 1his is done through e=tensi%e anal+sis that includes factor+ %isit and field research. It has largest team of research anal+st in the industr+

!4

*C6EME*= E(%it) *c!emes Airla Ad%antage Fund Airla )i%ident Fund Airla >,uit+ 8lan Airla Inde= 8lan Airla India :##ortunities Fund Airla Midca# Fund Airla M6. Fund Airla 1a= 8lan 38 e"t *c!emes Airla Aond >=change Airla Aond Inde= Fund Airla Floating Rate Fund Institutional 8lan for A.8 Airla MI8 Airla .ash 8lus Institutional 8lan for AA Unit Tr%st o$ In'ia M%t%al F%n' U1I Asset Management .om#an+ 8ri%ate /imited, esta&lished in <an '4, ""!, manages the U1I Mutual Fund with the su##ort of U1I 1rustee .om#an+ 8ri%ete /imited. U1I Asset Management .om#an+ #resentl+ manages a cor#us of o%er Rs. """" .rore. 1he s#onsorers of U1I Mutual Fund are Aan0 of Aaroda (A:A), 8un5a& 6ational Aan0 (86A), 2tate Aan0 of India (2AI), and /ife Insurance .or#oration of India (/I.).

!-

1he schemes of U1I Mutual Fund are /i,uid Funds, Income Funds, Asset Management Funds, Inde= Funds, >,uit+ Funds and Aalance Funds. Reliance M%t%al F%n' Reliance Mutual Fund (RMF) was esta&lished as trust under Indian 1rusts Act, '88 . 1he s#onsor of RMF is Reliance .a#ital /imited and Reliance .a#ital 1rustee .o. /imited is the 1rustee. It was registered on <une !", '33- as Reliance .a#ital Mutual Fund which was changed on March '', ""4. Reliance Mutual Fund was formed for launching of %arious schemes under which units are issued to the 8u&lic with a %iew to contri&ute to the ca#ital mar0et and to #ro%ide in%estors the o##ortunities to ma0e in%estments in di%ersified securities. *tan'ar' C!artere' M%t%al F%n' 2tandard .hartered Mutual Fund was set u# on March '!, """ s#onsored &+ 2tandard .hartered Aan0. 1he 1rustee is 2tandard .hartered 1rustee .om#an+ 8%t. /td. 2tandard .hartered Asset Management .om#an+ 8%t. /td. is the AM. which was incor#orated with 2>AI on )ecem&er ",'333.

!4

Association of Mutual Funds in India (AMFI) Iith the increase in mutual fund #la+ers in India, a need for mutual fund association in India was generated to function as a non(#rofit organisation. Association of Mutual Funds in India (AMFI) was incor#orated on August, nd '33-.

AMFI is an a#e= &od+ of all Asset Management .om#anies (AM.) which has &een registered with 2>AI. 1ill date all the AM.s are that ha%e launched mutual fund schemes are its mem&ers. It functions under the su#er%ision and guidelines of its &oard of directors. Association of Mutual Funds India has &rought down the Indian Mutual Fund Industr+ to a #rofessional and health+ mar0et with ethical lines enhancing and maintaining standards. It follows the #rinci#le of &oth #rotecting and #romoting the interests of mutual funds as well as their unit holders. O"#ectives o$ 3 AMFI4 1he Association of Mutual Funds of India wor0s with !" registered AM.s of the countr+. It has certain defined o&5ecti%es which 5u=ta#oses the guidelines of its Aoard of )irectors. 1he o&5ecti%es are as followsD 1his mutual fund association of India maintains a high #rofessional and ethical standards in all areas of o#eration of the industr+. It also recommends and #romotes the to# class &usiness #ractices and code of conduct which is followed &+ mem&ers and related #eo#le engaged in the acti%ities of mutual fund and asset management. 1he agencies who are &+
!$

an+ means connected or in%ol%ed in the field of ca#ital mar0ets and financial ser%ices also in%ol%ed in this code of conduct of the association. AMFI interacts with 2>AI and wor0s according to 2>AIs guidelines in the mutual fund industr+. Association of Mutual Fund of India do re#resent the *o%ernment of India, the Reser%e Aan0 of India and other related &odies on matters relating to the Mutual Fund Industr+. It de%elo#s a team of well ,ualified and trained Agent distri&utors. It im#lements a #rog ramme of training and certification for all intermediaries and other engaged in the mutual fund industr+. AMFI underta0es all India awareness #rogramme for in%estors in order to #romote #ro#er understanding of the conce#t and wor0ing of mutual funds At last &ut not the least association of mutual fund of India also disseminate informations on Mutual Fund Industr+ and underta0es studies and research either directl+ or in association with other &odies. T!e s+onsorers o$ Association o$ M%t%al F%n's in In'ia

5ank *+onsore'

2AI Fund Management /td. A:A Asset Management .o. /td. .an&an0 In%estment Management 2er%ices /td. U1I Asset Management .om#an+ 8%t. /td.
!8

Instit%tions *I. Asset Management .o. /td. <ee%an Aima 2aha+og Asset Management .o. /td. Private *ector In'ian:= AenchMar0 Asset Management .o. 8%t. /td. .holamandalam Asset Management .o. /td. .redit .a#ital Asset Management .o. /td. >scorts Asset Management /td. <M Financial Mutual Fund ;ota0 Mahindra Asset Management .o. /td. Reliance .a#ital Asset Management /td. 2ahara Asset Management .o. 8%t. /td 2undaram Asset Management .om#an+ /td. 1ata Asset Management 8ri%ate /td. Pre'ominantl) In'ia Joint ,ent%res:=

!3

Airla 2un /ife Asset Management .o. /td. )28 Merrill /+nch Fund Managers /imited C)F. Asset Management .om#an+ /td.

Pre'ominantl) Foreign Joint ,ent%res:= AA6 AMR: Asset Management (I) /td. Alliance .a#ital Asset Management (India) 8%t. /td. )eutsche Asset Management (India) 8%t. /td. Fidelit+ Fund Management 8ri%ate /imited Fran0lin 1em#leton Asset Mgmt. (India) 8%t. /td. C2A. Asset Management (India) 8ri%ate /td. I6* In%estment Management (India) 8%t. /td. Morgan 2tanle+ In%estment Management 8%t. /td. 8rinci#al Asset Management .o. 8%t. /td. 8rudential I.I.I Asset Management .o. /td. 2tandard .hartered Asset Mgmt .o. 8%t. /td.

4"

4'

FUTURE OF MUTUAL FUND INDUSTRY A+ )ecem&er ""4, Indian mutual fund industr+ reached Rs ',-",-!$ crore. It is estimated that &+ "'" March(end, the total assets of all scheduled commercial &an0s should &e Rs 4",3",""" crore. 1he annual com#osite rate of growth is e=#ected '!.4F during the rest of the decade. In the last - +ears we ha%e seen annual growth rate of 3F. According to the current growth rate, &+ +ear "'", mutual fund assets will &e /et us discuss with the following ta&leD Aggregate 'e+osits o$ *c!e'%le' Com 5anks in In'ia 3Rs.Crore4 Month9Jear Mar(38 Mar("" Mar("' Mar(" )e#osits .hange in F o%er last +r 2ource ( RAI M%t%al F%n' AUMKs Gro7t! Month9Jear MF AUMBs .hange in F Mar( 38 Mar( Mar( "" "' Mar( Mar( " "! Mar("4 2e#("4 4()ec '!$4 4 4'-''4 ' 3 '43!"" ' ''4 '! ' ( '8 ! Mar("! Mar( "4 ( 2e#("4 '-4$ ' 4()ec '4 -$3 dou&le.

4"-4' 8-'-3 383'4 ''!''8 ' 8"8" ! ' 8 !

48384 3!$'$ 8!'!' 34"'$ $-!"4 4 '! ' -

o%er last +r 2ource ( AMFI *ome $acts $or t!e gro7t! o$ m%t%al $%n's in In'ia '""F growth in the last 4 +ears. 6um&er of foreign AM.Bs are in the ,ueue to enter the Indian mar0ets li0e Fidelit+ In%estments, U2 &ased, with o%er U2N'trillion assets under management worldwide. :ur sa%ing rate is o%er !F, highest in the world. :nl+ channeli?ing these sa%ings in mutual funds sector is re,uired. In India there are onl+ 3 mutual funds which is much less than U2 ha%ing more than 8"". 1here is a &ig sco#e for e=#ansion. BAB and B.B class cities are growing ra#idl+. 1oda+ most of the mutual funds are concentrating on the BAB class cities. 2oon the+ will find sco#e in the growing cities. Mutual fund can #enetrate rural li0e the Indian insurance industr+ with sim#le and limited #roducts. 2>AI allowing the MFBs to launch commodit+ mutual funds. Investment o+tions availa"le 7it! 'i$$erent risk +ro$iles E(%it) iversi$ie' F%n's = iversi$ication = Mutual Funds reduces the ris0 &+ in%esting in all the sectors. Instead of #utting all +our mone+ in one sector or com#an+ itBs &etter to in%est in %arious good #erforming sectors as +ou reduces the ris0 of getting in%ol%ed in a #articular sector9com#an+ which ma+ #erform or ma+ not.

4!

9!o s!o%l' invest = 1his is an ideal categor+ for those who want to #artici#ate in stoc0 mar0et @ 0nows the ris0 in%ol%ed in stoc0 mar0et &ut ha%e few ru#ees to in%est in &lue(chi# stoc0s. 6o7 t!e) +er$orme' = 1hough the short term out loo0 is %olatile in long( term e,uit+ di%ersified funds ha%e out#erformed other categories @ stoc0 mar0ets will lesser amount of ris0 than stoc0 mar0ets. 1he a%erage returns of e,uit+(di%ersified funds are '" F. Per$ormance as on Marc! >B2 >GGA A"sol%te *c!eme Name NA, ? Mont!s C2A. >,uit+ 4. $ .!4 India Ad%antage 83.-$ -.-8 Reliance *rowth $'.84 (4. 3) A%erage ( (!.3!) 2@8 6ift+ '$"4.4- (-.$4) A2> 2ense= -4'4.44 (4."!) Categor) Rating //// In'e0 F%n's = Follo7 t!e in'e0 = 1hese are the inde=(&ased funds, which mo%e with the li0es of 2ense= @ 6ift+. 1hese fund charges 6I/ or %er+ low entr+9e=it loads. 9!o s!o%l' invest = As +ou ha%e seen in last few months 6ift+ @ 2ense= ha%e almost come down '$F from their to#s, it is a good time to in%est in Inde= funds with the #rinci#al of GIn%esting at the lower le%elsG. 6o7 t!e) +er$orme' = 1hough the short term out loo0 is %olatile in long( term 2ense= @ 6ift+ could do well with im#ro%ing economic conditions. It has &een seen that these Inde= funds ha%e out#erformed the indices ma0ing them more attracti%e.
44

*im+le Ann%aliLe' < Year ? Years *ince Ince+tion '-4.8$ ( ' 4. 4 '-".4! 43.44 '"4. '4$. 4 88.48 $!."" '" .'3 4".'$ !!.34 48.!- '-.-( $ . ' '4. $ (

Per$ormance as on Marc! >B2 >GGA A"sol%te *im+le Ann%aliLe' ? *ince *c!eme Name NA, ? Mont!s < Year Years Ince+tion <unior Ae>2 !'.8$ ('.-3) '-4. - ( (4-.8!) C)F. Inde= ( 2ense= 8lus -4.4" (!.-") $4.8 ( 44.42>62>O 8rud I.I.I -4.-- (4."4) $!.$$ ( ( >=change 1raded A%erage ( (-.'3) $".$" '4.4 $.8" 2@8 6ift+ '$"4.4- (-.$4) 48.!- '-.-- ( A2> 2ense= -4'4.44 (4."!) $ . ' '4. $ ( Categor) Rating = /// = *ECTOR FUN : 9!o s!o%l' invest = Jou ha%e to &e selecti%e while in%esting in these funds, as +ou need to select #articular sector, which will #erform &etter in the future. In%esting in these funds carries some amount of ris0 &ut also gi%e +ou more returns. 6o7 t!e) +er$orme' = 2ector funds ha%e gi%en a%erage returns of $!F for ' +ear #eriod. Auto, 2teel, .ement ha%e done well the +ear B"! @ the trend will continue in +ear B"4 &ut I1, FM.* sectors are e=#eriencing downward trend due to N de#reciation, #rice war in FM.* res#ecti%el+. 1hough short( term trend for #harma sector loo0s down in long term we loo0 forward to lot more action in the sector, as there e=ists a long(term, strong fundamental stor+ &ac0ed &+ immense growth #otential for the Indian #harmaceutical com#anies. Per$ormance as on Marc! >B2 >GGA

4-

A"sol%te *c!eme Name Alliance Aasic NA, $.8 '8.!$ '-.8

*im+le Ann%aliLe' *ince Ince+tion 4 .48 8 .88 '-.-8 '4.!4 ( (

? Mont!s < Year ? Years '. " !.$$ (3. 4) '!-.33 8!. ! ' ".-- $4.34 '''.$8 ! .'$ .4" 48.!$ . ' !.-$ '-.-'4. $

Industries U1I *rowth 2ector ( 8etro 2AI Magnum 2ector E 8harma A%erage 2@8 6ift+ A2> 2ense= Categor) rating = // 5alance' F%n's =

( ($.38) '$"4.4- (-.$4) -4'4.44 (4."!)

5alance' Act = Aalanced funds gi%es +ou the sta&ilit+ with the #otential to grow with the e,uit+ hel# of e,uit+ in%estments. 1hese funds in%est in &oth >,uit+ @ )e&t mar0ets. 9!o s!o%l' invest = 1he &alanced funds are for those, who want to en5o+ the a##reciation effects of e,uit+ mar0et &ut at the same time li0e to #la+ safe with less %olatile de&t mar0et. In this %olatile mar0et it is good to in%est in &alanced funds as the+ carries less ris0 com#are to e,uit+ funds. 6o7 t!e) +er$orme' = In the last ' months &alanced funds ha%e gi%en descent returns with the u# trend in the e,uit+ mar0ets. Aalanced funds a%erage returns are 4"F for '(+ear #eriod. Ret%rns as on Marc! >B2 >GGA A"sol%te *im+le Ann%aliLe' NA, ? Mont!s < Year ? Years *ince Ince+.
44

*c!eme Name

C)F. 8rudence 2AI Magnum Aalanced Fran0lin India 7ista A%erage 2@8 6ift+ .risil Aalanced Inde= Categor) rating = ///

44."3 ' .88 8.!3

('.4!) ."$ ('."4) ( ."-) '$"4.4- (-.$4) '4"3.' ('."$)

8'.48 8".44 $$.-4 4".-4 48.!4-.

-'. 4 '.88 '4.8! $.-4 '-.-(

44.-3 !. ' (!.$-) '8.'( (

E(%it) Linke' Ta0 *avings *c!emes 3EL**4 = En#o) ta0 "ene$its = 1hese schemes are &ecoming more #o#ular as traditional wa+s of ta= sa%ing &ecoming less interesting with declining interest rates. 9!o s!o%l' invest = >,uit+ /in0ed 2a%ings 2chemes (>/22) is an ideal wa+ to sa%e on ta= as well as sta+ing in%ested in e,uit+ mutual funds 6o7 t!e) +er$orme' = In last ' +ear these funds ha%e gi%en a&o%e a%erage returns to 0ee# +ou more @ more interested in sa%ing ta= as well as counting returns on +our in%estment. 1he a%erage returns for this categor+ are 38F. Per$ormance as on Marc! >B2 >GGA A"sol%te *im+le Ann%aliLe' *c!eme Name NA, ? Mont!s < Year ? Years *ince Ince+tion Airla >,uit+ 4.3" (4.'') '!$.! -!.-4 44.8$ Magnum 1a= *ain 3! !."! (!.4!) '!4.3- 4.4' '4.44 1ata 1a= 2a%ing !.!- ( .$!) '!!."8 -". 4 4"."3 A%erage ( (-.48) 38.!" !$.'$ -'.$! 2@8 6ift+ '$"4.4- (-.$4) 48.!- '-.-- ( A2> 2ense= -4'4.44 (4."!) $ . ' '4. $ ( Categor) rating = //// e"t F%n's =

4$

5anking on e"t Markets = )e&t funds in%est in the go%ernment securities, .or#orate Aonds, 1reasur+ Aills, etc. 9!o s!o%l' invest = 1he conser%ati%e in%estors li0e to go for ca#ital safet+. 6o7 t!e) +er$orme' = From /ast ' months in the declining interest rate scenario de&t funds remained flat. In ! +ears de&t funds ha%e gi%en a%erage returns of ' F. As e,uit+ mar0et is loo0ing %olatile its &etter to in%est #art of +our mone+ in these funds. Per$ormance as on Marc! >B2 >GGA A"sol%te *im+le Ann%aliLe' < ? *ince *c!eme Name NA, C Mont!s Year Years Ince+tion )eutsche 8remier Aond E ''.'$ !.!' '!.4- ( 3.3! Institutional 2undaram 2elect )e&t ( ) A ' .'' .8! ' .'$ ( '!.4! 8 C2A. Institutional Income ''.!3 !."4 ''.88 ( '".4' E In%est A%erage ( .!! 3."$ '!.38 '".$3 2@8 6ift+ '$"4.4- -.-3 48.!- '-.-- ( 62> * 2ec .om#osite 4$.'$ .44 ' .4' '4.8" ( Inde= Categor) rating = ///

48

Gilt F%n's = Government *ec. = *ilt funds in%est in go%ernment securities. 9!o s!o%l' invest = 1he in%estors who li0e to a%ail the &enefits of ca#ital safet+ with go%ernment securit+. 6o7 t!e) +er$orme' = From /ast 4(' months *ilt funds ha%e gi%en a%erage returns. As e,uit+ mar0et is loo0ing %olatile its &etter to in%est #art of +our mone+ in these funds as the+ #ro%ide ade,uate securit+ to +our in%estments. 1he a%erage returns for '(+ear #eriod are '".4'F com#are to the 62> * 2ec .om#osite Inde= has gi%en ' .4"F returns. Per$ormance as on Marc! >B2 >GGA *im+le A"sol%te Ann%aliLe' C *ince *c!eme Name NA, < Year ? Years Mont!s Ince+tion F1 India *ilt In%estment '4.88 -.4! '3.44 ( '. 8lan E *rowth .hola *ilt In%estment E '$.34 4.-8 '4.38 '3.8! '3.3! *rowth 1ata *ilt 2ecurities Fund E . - !.!! '-.44 -.44 4.!4 *rowth A%erage ( .-4 '".4' '4.'3 3.-8 .risil .om#osite Aond ' "!. 3 . ! 3."! ( ( Fund Inde= 62> * 2ec .om#osite 4$.'$ .44 ' .4' '4.8" ( Inde= Categor) rating = /// MIP = Mont!l) Income = 1hese schemes gi%es +ou monthl+ income.
43

9!o s!o%l' invest = 1hose who see0 monthl+ income. In the current scenario where de&t mar0et is %er+ %olatile itBs &etter to in%est in h+&rid funds li0e MI8 with suita&le time hori?on for ca#ital a##reciation. 6o7 t!e) +er$orme' = In /ast 4(' months MI8Bs ha%e gi%en descent returns com#are to de&t funds. 1he a%erage returns of MI8Bs stands at '-.48F, which loo0s good, com#ared to income funds.

Per$ormance as on Marc! >B2 >G<G A"sol%te *im+le Ann%aliLe' *c!eme Name NA, C Mont!s < Year ? Years *ince Ince+tion Alliance MI8 '3.38 8.48 ".44 '$."! '. F1 India MI8 ( 8lan A '-.$$ $.3" '3. " '4.'! '4.-4 2AI Magnum MI8 '!.4- $.4" '-. ( ' .' A%erage ( 4.'3 '-.48 '4.$4 $.!' 2@8 6ift+ '$"4.4- -.-3 48.!- '-.-- ( .risil MI8 Alended ' --."$ 4.''$.!4 ( ( Inde= Categor) rating = //// *TP = *!ort=term Plans = 1hese schemes #ro%ides short(term sa%ing o#tion with more li,uidit+ than F)Bs to #ar0 +our in%estments. with more li,uidit+ than Aan0 fi=ed de#osit. 6o7 t!e) +er$orme' = Ihile sa%ings accounts would gi%e +ou !.-F #er annum, &an0 F)Bs annuall+ return u# to 4.-F, /i,uid funds would t+#icall+ gi%e +ou more than -F and short(term #lans 4 to 4.-F #er annum. In /ast 4( ' months 218Bs ha%e gi%en descent returns. Per$ormance as on Marc! >B2 >G<G
-"

*c!eme Name

NA,

First India 2hort 1erm ''.'Reliance 2hort 1erm '".83 )eutsche 2hort Maturit+ '".$4 A%erage ( .RI2I/ .om#osite Aond ' "!. 3 . ! 3."! ( ( Inde= .RI2I/ short(term Aond ''!8.3' .'3 -.48 ( ( Inde= (PPPPP :ut #erformer PPPP *ood 8erformer PPP A%erage 8erformer PP :0 8erformer P Aad 8erformer)

A"sol%te *im+le Ann%aliLe' < ? *ince C Mont!s Year Years Ince+tion .$$ $.3" ( $.-" .8' $.!" ( $." .44 $."! ( 4.4$ .4' 4.!! 3. $ 4.4

-'

AMFI MONT6LY M%t%al F%n' ata O$ Jan%ar) >G<G 3Rs. in Crores4 1a&le 'D( Categor) *ales=All *c!emes Re'em+tion Assets Un'er Manage ment

From 1otal .umulat .umulat 1otal >=isti For i%e From new i%e For A#rB"! As on !'st ng the schemes A#rB"! the <an ""4 schem Month to to <anB"4 Month es <anB"4 6o. Amou Amou nt nt A) Aan0 2#onsored (-) A) Institutions (!) .) 8ri%ate 2ector ' Indian (8) Foreign (') ! <oint 7entures D 8redominantl+ Indian(-) 4 <oint 7entures D 8redominantl+ Foreign (3) 1otal ('Q Q!Q4) Gran' Total ' ( 4' 4!44 44"( 8"4 8"4 !-""8 '$8" -"-! "4' !'3!4 '44 " >D?<? DAEE ><<CF ?CBC ?AACA

4'4 '"8-! ''443 ''-$$- '"-3$ '"48'8 ( ( ( !$4 !$4 '4-48 "$ '4$"!

( ' -'! ' -'! ''4 34 '"$4' '""'-8

( '8438 '8438 '$$""4 '$448 '-$334

B<>D>

4'4 44 4" 448-4 4 !4 - 4'"-8 !$$4$! ? CBD B?AGF BAGCB ADCA?B AF<D> A>A>>D
-

<<GBCG <AB?D>

3AM5MC4 /?B?D /?A<D />AFEDE />?>?CD /<><FGB G D

Released on -th Fe&ruar+ "

Ta"le >:= >.< Income *rowth Aalanced /i,uid9Mone + Mar0et *ilt >/22 Total

O+en En' No. O$ *c!emes ' ( ( ( ( ? Amo%nt 34 !4' ( ( ( ( CBD

Close En' No. O$ *c!emes ( ( ( ( ( ( = Amo%nt ( ( ( ( ( ( =

Ass%re' Ret%rns No. O$ *c!emes ( ( ( ( ( ( = Amo%nt ( ( ( ( ( ( =

Total No. O$ Amo%n *c!emes t > < = = = = ? >EC ?C< = = = = CBD

E:I*TING *C6EME* 3Rs.in Crores4 Close En' Ass%re' Ret%rns Total Amo%nt <<DDA ?FEA >AG ?CF>D CCA E B?AGF

O+en En' >.> Income *rowth Aalanced /i,uid 9 Mone+ Mar0et *ilt >/22 Total

No O$ No O$ No O$ No O$ Amo%nt Amo%nt *c!emes *c!emes *c!emes Amo%nt *c!emes ''' " !4 !! !' '3 ?BA ''$ " !834 4" !48 $ 444 3 B??BA ( ( 4 AG '' ! R-4 ( ( ( ( ( BA ! ( ( ( ( ( ? ( ( ( ( ( ( = <>E <>? ?F ?? ?< A? ?ED

RAmount mo&ili?ed &+ new #lans launched under e=isting schemes

-!

TOTAL OF ALL *C6EME* 3Rs. in Crores4

O+en En' >.? Income *rowth Aalanced /i,uid9Mone+ Mar0et *ilt >/22 Total

Close En'

Ass%re' Ret%rns

Total

No. O$ No. O$ No. O$ No. O$ Amo%nt Amo%nt Amo%nt *c!emes *c!emes *c!emes Amo%nt *c!emes ''$ ' ' !4 !! !' '3 ?BD ' "'4 4 -4" !48 $ 444 3 BAG<< ( ( 4 AG '' ! -4 ( ( ( ( ( BA ! ( ( ( ( ( ? ( ( ( ( ( ( = <?< <>A ?F ?? ?< A? AGG <>GDG A>BB >AG ?CF>D CCA E BAGCB

Note: T!e c!ange in n%m"er o$ sc!emes is "eca%se o$ t!e mat%rit) an' reclassi$ication o$ e0isting sc!emes ") some o$ t!e $%n's. /Ne7 *c!emes: O+en En' Income: 2AI Magnum 6RI In%estment Fund. O+en En' Gro7t!: ;ota0 Mahindra *lo&al India 2cheme @ 2undaram Monthl+ Income 8lan. RE EMPTION & REPURC6A*E URING T6E MONT6 JANUARY2 >GGA

Ta"le ?:= Income *rowth Aalanced /i,uid 9 Mone+ Mar0et *ilt >/22 Total

O+en En' '-'8! --!

Close En' '! ! '

Ass%re' ret%rn ( ( ( ( ( ( =

Total <B?<B >BBC >>? >E<?? FEE AC AF<D>

3'!! 833 '8 AFGGF

( ( 8 <CA

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A**ET* UN ER MANAGEMENT A* ON ?<st JANUARY2 >GGA

Ta"le A:= Income *rowth Aalanced /i,uid9Mone+ Mar0et *ilt >/22 Total

O+en En' 483$! '4-' !4"4"'' 44'$ -4' <A<AEE No o$ *c!emes !

Close En' 4 '43 $33 ( ( ' !?DCF

Ass%re' ret%rn '"( ( ( ( ( <GB

Total CE?>G >?<A? AAGA AG<<> CC<D <DDC <AB?D?

ATA ON FUN OF FUN * Ta"le B:= Fund of Funds *ales '3$ Re'em+tions ''3 AUM as on ?<st Jan >GGA $ '

P6oteD Fund of Funds is a scheme wherein the assets are in%ested in the e=isting schemes of mutual funds and hence, the figures indicated herein are included in the ta&les ' to 4 and 4. )ata on fund of funds is gi%en for information onl+. A**ET* UN ER MANAGEMENT A* ON ?<st Jan%ar)2 >GGA Ta"leC :=

--

*r. No. A

Name o$ t!e Asset Management Com+an) 5AN1 *PON*ORE A:A Asset Management .o. /td. .an&an0 In%estment Management 2er%ices /td. 86A Asset Management .o. /td. 2AI Funds Management /td. U1I Asset Management .om#an+ 8%t. /td. Total A

Asset Un'er Management 3Rs. in Crores4 !44 '8'4 '!8 -!-4 '344' >D?<?

IN*TITUTION* *I. Asset Management .o. /td. I/ @ F2 Asset Management .o. /td. <ee%an Aima 2aha+og Asset Management .o. /td. Total 5 4-8" 44-4 DAEE

C<

PRI,ATE *ECTOR 3i4 IN IAN Aenchmar0 Asset Management .o. 8%t. /td. .holamandalam Asset Management .o. /td. >scorts Asset Management /td. First India Asset Management 8%t. /td. <.M..a#ital Management 8%t. /td. ;ota0 Mahindra Asset Management .o. /td. Reliance .a#ital Asset Management /td. 2undaram Asset Management .om#an+ /td. Total C3i4 4! ''43 ' ! 4"$ 4!8$ -'$! $" 8 8'8 ><<CF

C>

3ii4 FOREIGN 8rinci#al Asset Management .o. 8%t. /td. Total C3ii4 3iii4 JOINT ,ENTURE*= PRE OMINANTLY IN IAN !4-4 ?CBC

C?

-4

Airla 2un /ife Asset Management .o. /td. .redit .a#ital Asset Management .o. /td. )28 Merrill /+nch Fund Managers /td. C)F. Asset Management .o. /td. 1ata 1) Asset Management 8ri%ate /td. Total C3iii4 JOINT ,ENTURE* = PRE OMINANTLY FOREIGN Alliance .a#ital Asset Management (India) 8%t. /td. )eutsche Asset Management (India) 8%t. /td. C2A. Asset Management (India) 8ri%ate /td. I6* In%estment Management (India) 8%t. /td. Morgan 2tanle+ In%estment Management 8%t. /td. 8rudential I.I.I Asset Management .o. /td. 2tandard .hartered Asset Mgmt .o. 8%t. /td. 2un F @ . Asset Management (India) 8%t. /td. 1em#leton Asset Management (India) 8%t. /td. Total CA3iv4 Total C 3i M ii MiiiMiv4 Total 3A M 5 M C4

344' '--4$'-! " !8$! ?AACA

CA

!"4 4$4 !34' 8! '!'-4$! 8" ' '-334 B<>D> <<GBCG <AB?D>

-$

RE*EARC6 MET6O OLOGY

Researc! O"#ective 1o stud+ a&out %arious mutual fund schemes @ their utilit+ to in%estors 1o stud+ the reasons &ehind the success of Mutual funds in India. 1o stud+ a&out the structure @ regulator+ &od+ of mutual fund in India.

Researc! esign )escri#ti%e research design is used in order to find out which #roduct is gi%ing ma=imum in%estment ad%antage to in%estors.

ata Collection 'esign For the #ur#ose of data collection secondar+ sources li0e &oo0s, <ournal, Maga?ines, news#a#ers @ data from com#an+ record has &een used.

Anal)sis Mutual fund #roducts are mar0et dri%en and for a mar0et dri%en #roduct its designing, #ricing, distri&ution @ #romotion assume critical im#ortance. 1he most im#ortant determinant of the success of an+ financial #roduct is consumer satisfaction mutual fund needs to o#timi?e consume satisfaction along with cost minimi?ation in the deregulated com#etiti%e mar0et.

-8

CONCLU*ION
In the #ast decade Indian Mutual fund industr+ had seen dramatic im#ro%ement &oth ,ualit+ wise as well as ,uantit+(wise. 1he #ri%ate sector entr+ to the fund famil+ raised the asset under management to Rs. 4 " &illion in March '33! and till A#ril ""4 it reached the height of '-4" &illion. It is estimated that &+ "'" March end the total assets of mutual funds will &e dou&led. Following are the main reasons &ehind the growth of mutual funds in IndiaD 6o. of foreign Asset Management .om#anies are in ,ueue to enter the Indian Mar0et li0e fidelit+ in%estment U2 &ased with o%er N' trillion assets under management worldwide. :ur sa%ing rate is !F highest in the world. :nl+ channeli?ing the sa%ings in mutual funds sector is re,uired. As com#ared to U2 there are less mutual funds com#anies in India, therefore, chances of e=#ansion are more.

-3

*UGGE*TION

1here are a few things that I would ad%ise an+ in%estor and the+ areD Jou should 0now what +ou are &u+ing. For e=am#le +ou cannot &u+ an e,uit+ fund and es#eciall+ a tech fund and e=#ect that there would &e %er+ little %olatilit+. Jou should &e clear a&out the time frame and #ur#ose that +ou are &u+ing for. Most im#ortantl+, there is a tendenc+ among in%estors to &u+ high and sell low. Jou cannot &e dri%en &+ sentiments Im#ortance of s+stematic in%esting. Alwa+s in%est in smaller lots o%er a #eriod of time. An initial in%estor has lost a&out 4-F since ince#tion. Aut someone who has in%ested o%er a #eriod of time would ha%e a%eraged well

4"

5I5LIOGRAP6Y 5ooks ;othari ..R('33-, SResearch Methodolog+T, nd ed. wishwa #ra0ashan ;umar Ran5it('33-, SResearch Methodolog+T,
nd

ed. sage #u&lication

8andian 8unitha%ath+( S2ecurit+ Anal+sis and 8ortfolio ManagementT .handra 8rasana, "" SIn%estment Anal+sis and #ortfolio ManagementT, 4th ed. Ne7s+a+er 1imes of India >conomic 1imes 9e"sites www.nseindia.com www.reliancemutual.com www.indiainfoline.com

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