Summer Internship Project Report

ON
MUTUAL FUNDS OF INDIA

Submitted in partial fulfilment of requirement of Bachelor of Commerce in

Honours (B.Com H.)

Guru Gobind Singh Indraprastha University

B.Com(H), 5th Semester

Batch 2014-2017

Submitted to: Submitted by:

Mrs Shweta Khandelwal Hitanshi Takkar
Assistant Professor 05924588814

JAGANNATH INTERNATIONAL MANAGEMENT SCHOOL

KALKAJI, NEW DELHI

1
 STUDENT DECLARATION

This is to certify that I have completed this Summer Internship Project titled MUTUAL
FUNDS OF INDIA of OTPC (ONGC TRIPURA POWER COMPANY LIMITED) based
on my own experience and study during my summer internship training in partial
fulfilment of the requirement for the award of degree of Bachelor of Commerce at
Jagannath International Management School, Delhi. This is an original piece of work and
I have not submitted it earlier elsewhere.

Signature:
HITANSHI TAKKAR

PROJECT GUIDE

SHWETA KHANDELWAL
Assistant Professor
Jagannath International Management School

2
 ACKNOWLEDGEMENT

Simply put, I could not have done this work without the lots of help I received cheerfully
from whole OTPC. The work culture in OTPC really motivates. Everybody is such a
friendly and cheerful companion here that work stress is never comes in way.

I would specially like to thank Mr. Mukesh Mangla for proving the nice ideas to work
upon. Not only did he guided and advised about my project, but also had solutions to all
my problems.

I am deeply indebted to Shweta Khandelwal for their valuable contribution during the
academic session.

I would specially like to thank all the staff members and workers for helping me
throughout the internship. Without their support, it would have been difficult job to
successfully complete the training.

HITANSHI TAKKAR

3
 Table Of Content

S.no Topic
1. Student Declaration
2. Acknowledgement
3. Content
4. Literature Review
5. Objective of the study
6. About the company
6.1 OTPC Shareholders
6.2 Location
7. Introduction to the project
7.1 History of Mutual Funds
8. Regulatory Authorities
9. Types of Mutual Funds
10. Research Methodology
11. Result and Findings
12. Conclusions
13. Appendix
14. References

LITERATURE REVIEW

Literature on mutual fund performance evaluation is enormous. A few research studies

that have influenced the preparation of this paper substantially are discussed in this

4
section. Sharpe, William F. (1966) suggested a measure for the evaluation of
portfolio performance. Drawing on results obtained in the field of portfolio
analysis, economist Jack L. Treynor has suggested a new predictor of mutual fund
performance, one that differs from virtually all those used previously by
incorporating the volatility of a fund's return in a simple yet meaning
Full manner. Michael C. Jensen (1967) derived a risk-adjusted measure of
portfolio performance (Jensens alpha) that estimates how much a managers
forecasting ability contributes to funds returns.

As indicated by Statman (2000), the e SDAR of a fund portfolio is the excess return of
the portfolio over the return of the benchmark index, where the portfolio is leveraged to
have the benchmark indexs standard deviation. S.Narayan Rao , et. al., evaluated
performance of Indian mutual funds in a bear market through r e l a t i v e
performance index, risk return analysis, Treynor s ratio,
S h a r p e s r a t i o , S h a r p e s measure , Jensens measure, and Famas measure. The
study used 269 open-ended schemes (out of total schemes of 433) for computing relative
performance index.

Then after excluding funds whose returns are less than risk-free returns, 58 schemes are
finally used for further analysis. The results of performance measures suggest that most
of mutual fund schemes in the sample of 58 were able to satisfy investors expectations
by giving excess returns over expected returns based on both premium for
systematic risk and total risk. Bijan Roy, et al., conducted an empirical
study on conditional performance of Indian mutual funds.

This paper uses a technique called conditional performance evaluation on a sample

of eighty-nine Indian mutual fund schemes .This paper measures the performance of
various mutual funds with both unconditional and conditional
form of CAPM, TreynorMazuy model and Henriksson
Merton model.

5
 T h e e f f e c t o f incorporating lagged information variables into t
h e e v a l u a t i o n o f m u t u a l f u n d m a n a g e r s performance is examined in the
Indian context. The results suggest that the use of conditioning lagged information
variables improves the performance of mutual fund schemes, causing alp has to shift
towards right and reducing the number of negative timing coefficients.
Mishra (2002) measured mutual fund performance using lower partial moment.

In this paper, measures of evaluating portfolio performance based on lower partial

moment are developed. Risk from the lower partial moment is measured by taking
into account only those states in which return is below a pre-specified target
rate like risk-free rate. Kshama Fernandes (2003) evaluated index fund
implementation in India. In this paper, tracking error of index funds in India
is measured.

The consistency and level of tracking errors obtained by some well-run index fund
suggests that it is possible to attain low levels of tracking error under Indian
conditions. At the same time, there do seem to be periods where certain
index funds appear to depart from the discipline of indexation. K. Pendaraki et
al. studied construction of mutual fund portfolios, developed a multi c r i t e r i a
methodology and applied it to the Greek market of equity
mutual funds.

OBJECTIVES OF THE STUDY

The objectives of the study is to analyses, in detail the growth pattern

of mutual fund industry in India and to evaluate performance of
different schemes floated by most preferred mutual funds in public
fund in public and private sector.

6
The main objectives of this project are:-
1. To study about the Mutual Funds in India
2. To study the various Mutual Funds schemes in India.
3. To study about the risk factors involved in the Mutual Funds and
How to analyze it?
4. To study the performance indices that can be used for mutual
fund comparison.
5. To study the people in which age and income group prefer
mutual funds over other investment options.

ABOUT THE COMPANY

Oil & Natural Gas Corporation Ltd. (ONGC), a Fortune 500 company of the
Government of India, owns significant natural gas reserves in the North Eastern state of
Tripura. However, these natural gas reserves are yet to be commercially developed due to
low industrial demand in the North-Eastern region. The complexities of logistics and

7
attendant costs limit the economic viability of transportation of gas to other parts of the
country where gas is in deficit. In order to optimally utilise the gas available in Tripura,
ONGC proposes to initially develop a 726.6 MW Combined Cycle Gas Turbine (CCGT)
thermal power plant (the Project) close to its gas fields in the state of Tripura and
supply power to the deficit areas of North Eastern States of India

This initiative of ONGC is expected to transform the power scenario of entire North-
Eastern Region of the country and catalyze rapid economic development of the region.
The generation project combined with linked transmission project and upstream gas
supply project is slated to bring in investments of around Rs. 9,000 Crore, in the region

Oil and Natural Gas Corporation (ONGC), Infrastructure Leasing and Financial Services
Limited (IL&FS) and Government of Tripura (Got) sponsor ONGC TRIPURA POWER
COMPANY LTD for implementation of 726.6 MW CCGT thermal power project
at Palatana in Tripura to supply power to the power deficit areas of North Eastern states
of the country. ONGC, IL&FS and Got have entered into a Shareholders Agreement
(SHA) on September 18, 2008 for subscribing to the equity of OTPC.

The Ministry of Power (MoP) has allocated the power from the project to the NER
beneficiary states. This initiative is expected to transform the entire North Eastern region
of the country. The generation project combined with linked transmission project and
upstream gas supply project is slated to bring in investments of around Rs. 9000 crore in
the region.

Consequently the delivery of the power from the power plant site to the demand centers
would comprise of two distinct project components namely:

Generation Project: 726.6 MW Combined Cycle Gas Turbine (CCGT) power plant at
Palatana, Tripura, based on ONGC's domestic gas supply. The project is in advanced

8
stage of implementation. EPC contract of about Rs. 2200 crores has already been
awarded to BHEL on August 11,2008.

The Generation Project is being domiciled in ONGC Tripura Power Company Ltd.
(OTPC or the Company), a Special Purpose Vehicle promoted by ONGC, IL&FS
Limited and Government of Tripura (Got).

The First Block (363.3 MW) of Palatana Combined Cycle Gas Turbine (CCGT) Power
Project was declared under Commercial Operation w.e.f. 00:00 hrs. of 04.01.2014 & the
Second Block (363.3 MW) of the Project was declared under Commercial Operation
w.e.f. 00:00 hrs of 24.03.2015. Hence, the project, 726.6 MW Combined Cycle Gas
Turbine (CCGT) Power Project has been declared under Commercial Operation w.e.f.
00:00 hrs of 24.03.15.

Transmission Project: A 400 kV D/C Transmission system connecting Palatana

(generation project site) in Tripura to Bongaigaon in Assam over a distance of around 650
Kms for the evacuation of power from the generation project.

North-East Transmission Company Limited (NETCL) a joint venture of OTPC, POWER

GRID CORPORATION of India Ltd (PGCIL) and the North Eastern Region beneficiary
states would undertake the development and operation of the transmission system. OTPC
has been granted in-principle approval for Mega Power Project (MPP) status by GoI on
July 27, 2006 for the Project. The company is applying to MoP, GoI for final approval of
MPP status and the same is expected to be obtained shortly.

For evacuating Power from the gas based 726.6 MW power Project Generators, a trunk
transmission line is being developed by another Special Purpose Vehicle (SPV), jointly
promoted by Power Grid Corporation Ltd., OTPC and the North Eastern Region (NER)
states. Inter-state and intra-state sub-transmission system and the distribution system

9
within NER states shall be developed by Power Grid Corporation as the Central
Transmission Utility (CTU)

The Transmission Project was initially envisaged to be domiciled in a separate SPV,

North-East Power Transmission Company Limited ("NEPTC") and developed through a
BOOT operator. However given the criticality of timely completion of the Transmission
System to the operations of the Generation Plant, a decision was taken todevelop the
transmission system as a component of the composite Project within OTPC.
Subsequently, the process of merging NEPTC with OTPC was initiated; The petition for
amalgamation of NEPTC with OTPC was approved by the Hon'ble Guwahati High Court
in Sept 2007.

Subsequently, in late 2007, in consultation with the Ministry of Power (MoP), it was
decided that the integrated project be developed as a regional project. The power
allocation from the project was revised and about 640 MW was allocated to the NER
beneficiary states and the balance 100 MW was to be retained by OTPC for
merchant/short-term sale (based on assumed capacity of 740 MW). Pursuant to this
development, the Transmission project was again carved out for development through a
separate SPV. Accordingly the Transmission JV was again incorporate as North East
Transmission Company Ltd(NETC) .The transmission project is progressing smoothly
with the process of award of transmission tower construction packages for completion in
tandem with the commissioning of the Generation Project

OTPC Shareholders

The shareholding pattern of OTPC is as follows:

Promoter %age Shareholding

10
ONGC 50.0 %
IL&FS 26.0 %
Govt. of Tripura (GoT) 0.5 %
Investor
India Infrastructure Fund II (IIF- II) 23.5 %
Total 100 %

The major shareholding in the Company is with ONGC, which is promoter and also the
gas supplier of OTPCs power plant. The substantial shareholding is with IL&FS,
promoter which has provided the project development support. The Government of
Tripura, which has a minority stake promoter in the project, has provided all State level
support in implementation of the Project.

In another breakthrough, the Company has successfully achieved financial closure of the
Project by tying up its residual equity of 23.5% on 10.04.2015, consequent to entering
into definitive agreements by ONGC, IEDCL and GOT, three promoters of OTPC with
IIF- II (acting through its investment manager IDFC Alternatives Limited).

Oil & Natural Gas Corporation (ONGC) - 50%

ONGC is India's largest producer of Crude Oil & Natural Gas and dominates the
exploration and production of crude oil and natural gas in India with 85% market share.
ONGC has the maximum number of exploration licenses, including competitive NELP
rounds. It owns and operates more than 15,000 kilometers of pipelines in India, including
nearly 3,800 kilometers of sub-sea pipelines.

ONGCs strong financials and impressive record provide considerable credibility to the
OTPC power project.

ONGC has existing set up in Tripura for exploration and production of gas. However due
to the lack of industrial development in the state, the assets have been hitherto

11
underutilized. The private developers have till date not exhibited material interest in
developing such projects in the region due to the lack of familiarity with the area and
quantum of investment required to set up facility of such magnitude.

Therefore as an entity well versed with local peculiarities as well as having access to
tremendous financial resources, ONGC has played a key role in developing the project.
Further as an operator of gas fields in the state of Tripura, ONGC would be able to
mitigate gas supply related risks for the Power Project.

Infrastructure Leasing & Financial Services (IL&FS) 26%

IL&FS is a leading institution of India, promoted by Public sector Financial Institutions

and Banks of India including UTI, Central Bank of India and HDFC among others, with
an objective, inter alia, of developing projects in the infrastructure sector on commercial
basis. IL&FS group companies have significant experience and expertise to render
advice, develop projects, facilitate formulation of policy and related aspects for
catalyzing Public Private Partnership (PPP), identify prospective developers, undertake
mobilization of financial resources from both the domestic Financial Institutions and
multilateral agencies and participate as a co-promoter in specific projects.

Government of Tripura 0.5%

Government of Tripura (GoT) has picked up 0.5% stake in the project in view of its
expected positive impact on the industrial development in the state. The project would
give a big boost to the industrialization and economic growth to not only Tripura state but
the whole North Eastern part of the country and would go a long way in eradicating
regional imbalances in the country. GoT has been fully committed to the implementation
of the project and has made all efforts to help OTPC in land acquisition, water
availability, availability of local infrastructure, obtaining various clearances etc.

India Infrastructure Fund II- 23.5%

12
India Infrastructure Fund- II (acting through its investment manager IDFC Alternatives
Limited) has acquired 23.5% equity stake in the Company with effect from 10.04.2015.
This investment by India Infrastructure Fund- II brings on board a credible infrastructure
partner, further strengthening the core development theme of the project.

LOCATION

About North East

13
North eastern India is made up of the states of Assam, Meghalaya, Tripura, Arunachal
Pradesh, Mizoram, Manipur, and Nagaland.

Tripura State

The economy of Tripura state is primarily agrarian. The primary sector (agricultural)
contributes about 64% of total employment in the state and about 48% of the State
Domestic Product (SDP).

A variety of Horticultural / Plantation Crops are produced in Tripura like Pineapple,

Oranges, Cashewnut, Jackfruit, Coconut, Tea, Rubber, Forest , Plantations etc. There is
ample scope for increasing the area under such plantations as well as the productivity.

The Industry Sector has also remained to undeveloped so far, despite the vast potential.
The secondary sector contributes only about 5% of total employment and about 7% of the
total income (SDP) of the state at present. Tourism has been declared as an Industry in the
state since 1987. Handicraft is emerging as a potential industry in Tripura. The Handloom
Industry also plays an important role in rural Industry of Tripura.

14
Project Site

The Project would be located at Palatana in district Udaipur in the State of Tripura. The
proposed project site is located about 12 kms from the sub-district head quarters of
Udaipur and is about 60 kms from the capital city of Agartala. The project site is located
adjacent to the existing State Highway connecting to Udaipur, with onward connectivity
to Agartala by NH-44. A perennial river, namely Gumti flows near the site and is the
proposed source of water required for the power plant operations.
Connectivity
The power project is located on Udaipur-Kakraban road at about 9 km from district head
quarters - Udaipur and at about 60 km from state capital -Agartala. The site is connected
by a state highway to Udaipur, with onward connectivity to Agartala by NH-44. A
perennial river, namely Gumti flows near the site, which is the proposed source of water
required for the power plan

INTRODUCTION

MUTUAL FUND INDUSTRY

The mutual fund industry in India is one of the emerging industries in India. Today, the
Indian mutual fund industry has 40 players. The number of public sector players has

15
reduced from 11 to 5. The public sector has gradually receded into the background,
passing on a large chunk of market share to private sector players.

The Association of Mutual Funds in India (AMFI) is the industry body set up to facilitate
the growth of the Indian mutual fund industry. It plays a pro-active role in identifying
steps that need to be taken to protect investors and promote the mutual fund sector.

It is noteworthy that AMFI is not a Self-Regulatory Organisation (SRO) and its

recommendations are not binding on the industry participants. By its very nature, AMFI
has an advisors or a counsellors role in the mutual fund industry. Its recommendations
becomemandatory if and only if the Securities and Exchange Board of India (SEBI)
incorporates them into the regulatory framework it stipulates for mutual funds.

The Indian mutual fund industry follows a 3-tier structure as shown

below:

16
1. Sponsors
They are the individuals who think of starting a mutual fund. The Sponsor approaches
SEBI, the market regulator and also the regulator for mutual funds. Not everyone can
start a mutual fund. SEBI will grant a permission to start a mutual fund only to a person
of integrity, with significant experience in the financial sector and a certain minimum net
worth. These are just some of the factors that come into play.

17
2. Trust
Once SEBI is satisfied with the credentials and eligibility of the proposed Sponsors, the
Sponsors then establish a Trust under the Indian Trust Act 1882. Trusts have no legal
identity in India and thus cannot enter into contracts. Hence the Trustees are the
individuals authorized to act on behalf of the Trust. Contracts are entered into in the name
of the Trustees. Once the Trust is created, it is registered with SEBI, after which point,
this Trust is known as the mutual fund.

3. Asset Management Company (AMC)

The Trustees appoint the AMC, which is established as a legal entity, to manage the
investors (unit holders) money. In return for this money management on behalf of the
mutual fund, the AMC is paid a fee for the services provided. This fee is to be borne by
the investors and is deducted from the money collected from them.

The AMC has to be approved by SEBI and it functions under the supervision of its Board
of Directors, and also under the direction of the Trustees and the regulatory framework
established by SEBI. It is the AMC, which in the name of the Trust, that floats new
schemes and manages these schemes by buying and selling securities.

HISTORY OF MUTUAL FUND INDUSTRY

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

18
First Phase: 1964 1987
An Act of Parliament established Unit Trust of India (UTI) on 1963. It was set up by the
Reserve Bank of India and functioned under the Regulatory and administrative control of
the RBI. In 1978, UTI was delinked from RBI and the 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. 6700 crores of AUM.

Second Phase: 1987 1993 (Entry of Public Sector Funds)

In 1987, it was the entry of non-UTI, public sector mutual funds setup by public sector
banks and the 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.

1992-93 Amount Assets Under Mobilization as

Mobilized Management % of gross
Domestic
Savings
UTI 11,057 38,247 5.2%
Public Sector 1,964 8,757 0.9%
Total 13,021 47,004 6.1%

Third Phase : 1993 2003 (Entry of Private Sector Funds)

With the entry of the private sector funds in 1993, a new era started in the Indian Mutual
Fund Industry, giving the investors a wider choice of fund families. Also, 1993 was the
yearin which first Mutual Fund Regulations came into being, under which all mutual
funds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer

19
now merged with Franklin Templeton) was the first private sector mutual fund registered
in July 1993.
The industry now functions under SEBI Regulations, 1996. At the end of January 2003,
there were 33 mutual funds with total assets of Rs. 1,21,805 crores. The UTI with Rs.
44,541 crores of AUM 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 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.

20
The Assets under Management(AUM) have grown at a rapid pace over the past few years
at a CAGR of 35% for the past few years at a CAGR of 35 percent for the five- year
period from 31 March, 2005 to 31 March, 2009. Over the 10-year period from 1999 to
2009 encompassing varied economic cycles, the industry grew at 22% CAGR.
This growth was despite two falls in the AUM the first being after year 2001 due to
dotcom bubble burst and the second in 2008, consequent to the global economic crisis.

AUM Base and Growth Relative To the Global Industry

India has been amongst the fastest growing markets for mutual funds since 2004 in the
five year period from 2004 to 2008 (as of December) the Indian mutual fund industry
grew at 29 percent CAGR as against the global average of 4 percent . Over this period,
the mutual fund industry in mature markets like the US and France grew at 4 percent,
while some of the emerging markets viz. China and Brazil exceeded the growth
witnessed in the Indian market.

WHAT IS A MUTUAL FUND?

A mutual fund is a legal vehicle that enables a collective group of individuals to:

21
1. Pool their surplus funds and collectively invest in instruments / assets for a
common investment objective.

2. Optimize the knowledge and experience of a fund manager, a capacity that

individually they may not have.

3. Benefit from the economies of scale which size enables and is not available on an
individual basis. Investing in a mutual fund is like an investment made by a
collective.

An individual as a single investor is likely to have lesser amount of money at disposal

than say, a group of friends put together. Now, lets assume that this group of individuals
is a No vice in investing and so the group turns over the pooled funds to an expert to
make their money work for them. This is what a professional Asset Management
Company does for mutual funds. The AMC invests the investors money on their behalf
into various assets towards a common investment objective.

Hence, technically speaking, a mutual fund is an investment vehicle which pools

investors money and invests the same for and on behalf of investors, into stocks, bonds,
money market instruments and other assets. The money is received by the AMC with a
promise that it will be invested in a particular manner by a professional manager
(commonly known as fund managers). The fund managers are expected to honor this
promise. The SEBI and the Board of Trustees ensure that this actually happens.

When an investor subscribes for the units of a mutual fund, he becomes part owner of the
assets of the fund in the same proportion as his contribution amount put up with the
corpus (the total amount of the fund). Mutual Fund investor is also known as a mutual
fund shareholder or a unit holder.

Any change in the value of the investments made into capital market instruments

22
 (such as shares, debentures etc.) is reflected in the Net Asset Value (NAV) of the
scheme.

NAV is defined as the market value of the Mutual Fund scheme's assets net of its
liabilities. NAV of a scheme is calculated by dividing the market value of scheme's assets
by the total number of units issued to the investors.

For example:

A. If the market value of the assets of a fund is Rs. 100,000

B. The total number of units issued to the investors is equal to 10,000.
C. Then the NAV of this scheme = (A)/(B), i.e. 100,000/10,000 or 10.00
D. Now if an investor 'X' owns 5 units of this scheme
E. Then his total contribution to the fund is Rs. 50 (i.e. Number of units held multiplied
by the NAV of the scheme).

MUTUAL FUNDS STRUCTURE

The SEBI (Mutual Funds) Regulations 1993 define a mutual fund (MF) as a fund
established in the form of a trust by a sponsor to raise monies by the Trustees through the

23
sale of units to the public under one or more schemes for investing in securities in
accordance with these regulations.

These regulations have since been replaced by the SEBI (Mutual Funds) Regulations,
1996. The structure indicated by the new regulations is indicated as under. A mutual fund
comprises four separate entities, namely sponsor, mutual fund trust, AMC and custodian.
The sponsor establishes the mutual fund and gets it registered with SEBI.
The mutual fund needs to be constituted in the form of a trust and the instrument of the
trust should be in the form of a deed registered under the provisions of the Indian
Registration Act,1908.

24
The Custodian maintains the custody of the securities in which the scheme invests. It
also keeps a tab on corporate actions such as rights, bonus and dividends declared by the
companies in which the fund has invested. The Custodian is appointed by the Board of
Trustees. The Custodian also participates in a clearing and settlement system through
approved depository companies on behalf of mutual funds, in case of dematerialized
securities.

The sponsor is required to contribute at least 40% of the minimum net worth (Rs. 10
crore) of the asset management company. The board of trustees manages the MF and the
sponsor executes the trust deeds in favour of the trustees. It is the job of the MF trustees
to see that schemes floated and managed by the AMC appointed by the trustees are in
accordance with the trust deed and SEBI guidelines.

TYPES OF RETURN

There are three ways, where the total returns provided by mutual funds can be enjoyed by

Investors:

25
1. Income is earned from dividends on stocks and interest on bonds. A fund pays
out.nearly all income it receives over the year to fund owners in the form of a
distribution.

2. If the fund sells securities that have increased in price, the fund has a capital gain. Most
funds also pass on these gains to investors in a distribution.

3. If fund holdings increase in price but are not sold by the fund manager, the fund's
shares increase in price. You can then sell your mutual fund shares for a profit. Funds will
also usually give you a choice either to receive a check for distributions or to reinvest the
earnings and get more shares.

INDICATORS OF INVESTMENT RISK

There are five main indicators of investment risk that apply to the analysis of stocks,
bonds and mutual fund portfolios. They are alpha, beta, r-squared, standard deviation
and the Sharpe ratio. These statistical measures are historical predictors of investment
risk/volatility and are all major components of modern portfolio theory (MPT).

26
The MPT is a standard financial and academic methodology used for assessing the
performance of equity, fixed-income and mutual fund investments by comparing them to
market benchmarks.

All of these risk measurements are intended to help investors determine the risk-reward
parameters of their investments

UNDERSTANDING AND MANAGING RISK

All investments whether in shares, debentures or deposits involve risk: share value may
go down depending upon the performance of the company, the industry, state of capital

27
markets and the economy; generally, however, longer the term, lesser the risk; companies
may default in payment of interest/principal on their Debentures /bonds/ deposits; the rate
of interest on an investment may fall short of the rate of inflation reducing the purchasing
power.

While risk cannot be eliminated, skillful management can minimize risk. Mutual Funds
help to reduce risk through diversification and professional management. The experience
and expertise of Mutual Fund managers in selecting fundamentally sound securities and
timing their purchases and sales help them to build a diversified portfolio that minimize
risk and maximizes returns.

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

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

RISKS ASSOCIATED WITH MUTUAL FUNDS

28
At the cornerstone of investing is the basic principle that the greater the risk you take, the
greater the potential reward. Remember that the value of all financial investments will
fluctuate.
Individual tolerance for risk varies, creating a distinct "investment personality" for each
investor. Some investors can accept short-term volatility with ease, others with near
panic. So whether you consider your investment temperament to be conservative,
moderate or aggressive, you need to focus on how comfortable or uncomfortable you will
be as the value of your investment moves up or down.

Managing
Risks
Mutual funds offer incredible flexibility in managing investment risk. Diversification and
Automatic Investing (SIP) are two key techniques you can use to reduce your investment
risk considerably and reach your long-term financial goals.

Diversification

When you invest in one mutual fund, you instantly spread your risk over a number of
different companies. You can also diversify over several different kinds of securities by
investing in different mutual funds, further reducing your potential risk.
Diversification is a basic risk management tool that you will want to use throughout your
lifetime as you rebalance your portfolio to meet your changing needs and goals.
Investors, who are willing to maintain a mix of equity shares, bonds and money market
securities have a greater chance of earning significantly higher returns over time than
those who invest in only the most conservative investments.
Additionally, a diversified approach to investing -- combining the growth potential of
equities with the higher income of bonds and the stability of money markets -- helps
moderate your risk and enhance your potential return.

Systematic
Investment Plan (SIP)

29
The Unit holders of the Scheme can benefit by investing specific Rupee amounts
periodically, for a continuous period. Mutual fund SIP allows the investors to invest a
fixed amount of Rupees every month or quarter for purchasing additional units of the
Scheme at NAV based prices.

TYPES OF RISKS

30
All investments involve some form of risk. Even an insured bank account is subject to the
possibility that inflation will rise faster than your earnings, leaving you with less real
purchasing power than when you started (Rs. 1000 gets you less than it got your father
whenhe was your age).
Consider these common types of risk and evaluate them against potential rewards when
you select an investment.

Type of risk Type of investment affected How the fund could lose money

31
1. Market risk All types The value of its investments decline
because of unavoidable risks that
affect the entire market
2. Liquidity All types The fund cant sell an investment
risk thats declining in value because
there are no buyers.
3. Credit risk Fixed income securities If a bond issuer cant repay a bond,
it may end up being a worthless
investment.
4. Interest rate Fixed income securities The value of fixed income securities
risk generally falls when interest rates
rise.
5. Country Foreign investments The value of a foreign investments
risk declines because of political
changes or instability in the country
where the investment was issued.
6. Currency Investments denominated If the other currency declines
risk in a currency other than against the Canadian dollar, the
the Canadian dollar investment will lose val

REGULATORY AUTHORITIES

32
To protect the interest of the investors, SEBI formulates policies and regulates the mutual
funds. It notified regulations in 1993 (fully revised in 1996) and issues guidelines from
time to time. MF either promoted by public or by private sector entities including one
promoted by foreign entities is governed by these Regulations. SEBI approved Asset
Management

Company (AMC) manages the funds by making investments in various types of

securities.Custodian, registered with SEBI, holds the securities of various schemes of the
fund in its custody.

According to SEBI Regulations, two thirds of the directors of Trustee Company or board
of trustees must be independent. The Association of Mutual Funds in India (AMFI)
reassures the investors in units of mutual funds that the mutual funds function within the
strict regulatory framework. Its objective is to increase public awareness of the mutual
fund industry. AMFI also is engaged in upgrading professional standards and in
promoting best industry practices in diverse areas such as valuation, disclosure,
transparency etc.

MUTUAL FUNDS IN INDIA

33
1) ABN AMRO Mutual Fund
2) Benchmark Mutual Fund
3) Birla Sun Life Mutual Fund
4) Bharti AXA Mutual Fund

34
5) BOB Mutual Fund
6) Canara Robero Mutual Fund
7) DBS Chola Mutual Fund
8) Deutsche Mutual Fund
9) DSP BlackRock Mutual Fund
10)Escorts Mutual Fund
11)Fidelity Mutual Fund
12)Fortis ( ABN ) Mutual Fund
13)Franklin Templeton Mutual Fund
14)HDFC Mutual Fund
15)HSBC Mutual Fund
16)ING Vysya Mutual Fund
17)JM Financial Mutual Fund
18)Kotak Mahindra Mutual Fund
19)LIC Mutual Fund
20)Principal Mutual Fund
21)ICICI Prudential Mutual Fund
22)Reliance Mutual Fund
23)Sahara Mutual Fund
24)SBI Mutual Fund
25)Standard Chartered Mutual Fund
26)Sundaram Mutual Fund
27)Tata Mutual Fund
28)Taurus Mutual Fund
29)UTI Mutual Fund

TYPES OF MUTUAL FUNDS

There are wide variety of Mutual Fund schemes that cater to investor needs, whatever
theage, financial position, risk tolerance and return expectations. The mutual fund

35
schemes can be classified according to both their investment objective (like income,
growth, tax saving) as well as the number of units (if these are unlimited then the fund is
an open-ended one while if there are limited units then the fund is close-ended).

36
Open-ended schemes

These funds are sold at the NAV based prices, generally calculated on every business day.
These schemes have unlimited capitalization, open-ended schemes do not have a fixed
maturity - i.e. there is no cap on the amount you can buy from the fund and the unit
capital can keep growing. These funds are not generally listed on any exchange.

Open-ended funds are bringing in a revival of the mutual fund industry owing to
increased liquidity, transparency and performance in the new open-ended funds promoted
by the private sector and foreign players. Open-ended funds score over close-ended ones
on several counts.

Some of these are listed below:

a) Any time exit option :

The issuing company directly takes the responsibility of providing an entry and
an exit. This provides ready liquidity to the investors and avoids reliance on
transfer deeds, signature verifications and bad deliveries.
b) Tax advantage :
Though Budget 2004 proposals envisage a tax rate of 20.91%(Corporate
investors) and 13.06875% (Non-Corporate investors) on dividend distribution
made by the Debt funds, the funds continue to remain attractive investment
vehicles. In equity plans there is no distribution tax.
c) Any time entry option :
An open-ended fund allows one to enter the fund at any time and even to invest
at regular intervals (a systematic investment plan).

Close ended schemes

37
Schemes that have a stipulated maturity period, limited capitalization and the units are
listed on the stock exchange are called close-ended schemes.
These schemes have historically seen a lot of subscription. This popularity is estimated to
be on account of firstly, public sector MFs having floated a lot of close-ended income
schemes with guaranteed returns and secondly easy liquidity on account of listing on the
stock exchanges.

Classification according to investment objectives

Objectives
Mutual funds have specific investment objectives such as growth of capital, safety of
principal, current income or tax-exempt income. In general mutual funds fall into three
general categories:

Equity Funds invest in shares or equity of companies.

Fixed-Income funds invest in government or corporate securities that offer fixed rates
of return.
Balanced Funds invest in a combination of both stocks and bonds.

i) Growth Funds
These funds seek to provide growth of capital with secondary emphasis on dividend.
They invest in shares with a potential for growth and capital appreciation. Because they
invest in well-established companies where the company itself and the industry in which
it operates are thought to have good long-term growth potential, growth funds provide
low current income. Growth funds generally incur higher risks than income funds in an
effort to secure more pronounced growth.

These funds may invest in a broad range of industries or concentrate on one or more
industry sectors. Growth funds are suitable for investors who can afford to assume the

38
risk of potential loss in value of their investment in the hope of achieving substantial and
rapid gains.

They are not suitable for investors who must conserve their principal or who must
maximize current income.

ii) Growth and Income Funds

Growth and income funds seek long-term growth of capital as well as current income.
The investment strategies used to reach these goals vary among funds. Some invest in a
dual portfolio consisting of growth stocks and income stocks, or a combination of growth
stocks, stocks paying high dividends, preferred stocks, convertible securities or fixed-
income securities such as corporate bonds and money market instruments. Others may
invest in growth stocks and earn current income by selling covered call options on their
portfolio stocks. Growth and income funds have low to moderate stability of principal
and moderate potential for current income and growth. They are suitable for investors
who can assume some risk to achieve growth of capital but who also want to maintain a
moderate level of current income

iii) Fixed-Income Funds

The goal of fixed income funds is8 to provide current income consistent with the
preservation of capital. These funds invest in corporate bonds or government-backed
mortgage securities that have a fixed rate of return. Within the fixed-income category,
funds vary greatly in their stability of principal and in their dividend yields. High-yield
funds, which seek to maximize yield by investing in lower-rated bonds of longer
maturities, entail less stability of principal
than fixed-income funds that invest in higher-rated but lower-yielding securities.

iv) Balanced Fund

39
The Balanced fund aims to provide both growth and income. These funds invest in both
shares and fixed income securities in the proportion indicated in their offer documents.
Ideal for investors who are looking for a combination of income and moderate growth.

v) Money Market Funds/Liquid Funds

For the cautious investor, these funds provide a very high stability of principal while
seeking a moderate to high current income. They invest in highly liquid, virtually risk-
free, short-term debt securities of agencies of the Indian Government, banks and
corporations and Treasury Bills. Because of their short-term investments, money market
mutual funds are able to keep a virtually constant unit price; only the yield fluctuates.
Therefore, they are an attractive alternative to bank accounts. With yields that are
generally competitive with - and usually higher than -- yields on bank savings account,
they offer several advantages. Money can be withdrawn any time without penalty.
Although not insured, money market funds invest only in highly liquid, short-term, top-
rated money market instruments.
Money market funds are suitable for investors who want high stability of principal and
current income with immediate liquidity.

vi) Specialty/Sector Funds

These funds invest in securities of a specific industry or sector of the economy such as
health care, technology, leisure, utilities or precious metals. The funds enable investors to
diversify holdings among many companies within an industry, a more conservative
approach than investing directly in one particular company.
Sector funds offer the opportunity for sharp capital gains in cases where the fund's
industry is "in favor" but also entail the risk of capital losses when the industry is out of
favor. While sector funds restrict holdings to a particular industry, other specialty funds
such as index funds give investors a broadly diversified portfolio and attempt to mirror
the performance of various market averages.
Index funds generally buy shares in all the companies composing the BSE Sensex or NSE
Nifty or other broad stock market indices. They are not suitable for investors who must
conserve their principal or maximize current income.

40
BENEFITS OF INVESTING THROUGH A MUTUAL FUND

A mutual fund is an entity that pools the money of many investors -- its unit-holders to
invest in different securities. Investments may be in shares, debt securities, money market
securities or a combination of these. Those securities are professionally managed on
behalf of the unit-holders, and each investor holds a pro-rata share of the portfolio i.e.
entitled to any profits when the securities are sold, but subject to any losses in value as
well.

i) Professional investment management

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

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

iii) Low Cost

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

iv) Convenience and Flexibility

You own just one security rather than many, yet enjoy the benefits of a diversified
portfolio and a wide range of services. Fund managers decide what securities to trade,

41
collect the interest payments and see that your dividends on portfolio securities are
received and your rights exercised. It also uses the services of a high quality custodian
and registrar in order to make sure that your convenience remains at the top of our mind.

v) Personal Service
One call puts you in touch with a specialist who can provide you with information you
can use to make your own investment choices. They will provide you personal assistance
in buying and selling your fund units, provide fund information and answer questions
about your account status.

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

vii) Transparency
You get regular information on the value of your investment in addition to disclosure on
the specific investments made by the mutual fund scheme.

Limitations of mutual funds

42
1. No Insurance:
Mutual funds, although regulated by the government, are not insured against
losses. The Federal Deposit Insurance Corporation (FDIC) only insures against
certain losses at banks, credit unions, and savings and loans, not mutual funds.
That means that despite the risk-reducing diversification benefits provided by mutual
funds, losses can occur, and it is possible (although extremely unlikely) that you could
even lose your entire investment.

2. Dilution:
Although diversification reduces the amount of risk involved in investing in mutual
funds, it can also be a disadvantage due to dilution. For example, if a single security held
by a mutual fund doubles in value, the mutual fund itself would not double in value
because that security is only one small part of the fund's holdings. By holding a large
number of different investments, mutual funds tend to do neither exceptionally well nor
exceptionally poorly.

3. Fees and Expenses:

Most mutual funds charge management and operating fees that pay for the fund's
management expenses (usually around 1.0% to 1.5% per year for actively managed
funds). In addition, some mutual funds charge high sales commissions, 12b-1 fees, and
redemption fees. And some funds buy and trade shares so often that the transaction costs
add up significantly. Some of these expenses are charged on an ongoing basis, unlike
stock investments, for which a commission is paid only when you buy and sell.

4. Poor Performance:

43
Returns on a mutual fund are by no means guaranteed. In fact, on average, around 75%
of all mutual funds fail to beat the major market indexes, like the S&P 500, and a
growing number of critics now question whether or not professional money managers
have better stock-picking capabilities than the average investor.

5. Loss of Control:
The managers of mutual funds make all of the decisions about which securities to buy
and sell and when to do so. This can make it difficult for you when trying to manage your
portfolio. For example, the tax consequences of a decision by the manager to buy or sell
an asset at a certain time might not be optimal for you. You also should remember that
you are trusting someone else with your money when you invest in a mutual fund.

6. Trading Limitations:
Although mutual funds are highly liquid in general, most mutual funds (called open-
ended funds) cannot be bought or sold in the middle of the trading day. You can only buy
and sell them at the end of the day, after they've calculated the current value of their
holdings.

7. Size:
Some mutual funds are too big to find enough good investments. This is especially true of
funds that focus on small companies, given that there are strict rules about how much of a
single company a fund may own. If a mutual fund has $5 billion to invest and is only able
to invest an average of $50 million in each, then it needs to find at least 100 such
companies to invest in; as a result, the fund might be forced to lower its standards when
selecting companies to invest in.
8. Inefficiency of Cash Reserves:
Mutual funds usually maintain large cash reserves as protection against a large number of
simultaneous withdrawals. Although this provides investors with liquidity, it means that

44
some of the fund's money is invested in cash instead of assets, which tends to lower the
investor's potential return.

9. Too Many Choices:

The advantages and disadvantages listed above apply to mutual funds in general.
However, there are over 10,000 mutual funds in operation, and these funds vary greatly
according to investment objective, size, strategy, and style. Mutual funds are available for
virtually every investment strategy (e.g. value, growth), every sector (e.g. biotech,
internet), and every country or region of the world. So even the process of selecting a
fund can be tedious.

RESEARCH METHODOLOGY

45
Research is an organized enquiry designed and carried out to provide information for
solving a problem.
Research methodology is a way to systematically solve the research problem. It may be
understood as a science of studying how research is done scientifically.

a) Research Design: Descriptive Design

b) Data Collection Method: Survey Method
c) Universe: Agra
d) Sampling Method: Non probability convenience sampling method
e) Sample Size: 100 respondents
f) Sampling Unit: Businessmen, Government Servant, Retired Individuals
g) Data Source: Primary data
h) Data Collection Instrument: Structured Questionnaire

1) Do you invest your saving in mutual fund?

Investment Number Of Respondents

Yes 68
No 32
Total 100

Investment Willingness

We observe that 68% of all the respondents invest in mutual fund. We have got 32% of
our total respondents who do not invest in any mutual fund at all.
2) Do you have complete information about mutual fund?

46
Information Number Of Respondents
Yes 56
No 24
Not Much 20
Total 100

Awareness Level

We observe that 56% of all the respondents have complete information of mutual
funds. We have got 24% of our total respondents who do not have complete information
of mutual fund at all and 20% of our total respondents have some information of mutual
fund.

3) Are you an investor, who is interested in getting good deduction from tax?

Information Number Of Respondents

Yes 89
No 11
Total 100

Interested in Tax Deduction

We observe that 89% of all the respondents are interested in getting good deduction from
tax. We have got 11% of our total respondents who are not interested in getting good
deduction from tax at all.

4) Do you know mutual fund is a good instrument of tax saving?

47
Information Number Of Respondents
Yes 89
No 11
Total 100

Awareness for Tax saving

We observe that 76% of all the respondents knows mutual fund is a good instrument of
tax saving. We have got 24% of our total respondents who are mutual fund is a good
instrument of tax saving.

5) Among which of the following income group you fall?

Income group Number Of Respondents

Upto 1,00,000 25
1,00,001-2,00,000 60
2,00,001-3,00,000 10
3,00,001 & more 5
TOTAL 100

Investment Holding

We observe that 25% of all the respondents fall under income group of less than
1,00,000. We have got 60% of our total respondents fall under income group of 1,00,001-
2,00,000 and 10% of our respondents fall under income group of 2,00,001-3,00,000 while
5% of our respondents fall under income group of 3,00,000 & more.

6) Which are the investments you hold at present?

48
Investment Number Of Respondents
Equity market 20
Mutual fund 54
Govt. bond 0
Real estate 9
Bank FD 48
Post office 26
Insurance 45

Investment Holding

We observed that many respondents invest in more than one instrument of saving.The
people are not channelizing all of their savings in just one Investment Avenue.

7) What is the Basic purpose of your investments?

Investment purpose Number Of Respondents

High return 20
Tax benefit 18
Saving 45
Wealth creation 10
Risk diversification 7
Total 100

Purpose for Investment

49
We observe that 20% of all the respondents Invest for the purpose of high return, 18%
Invest for the purpose of tax benefit, 45% Invest for the purpose of saving, 10% Invest
for the purpose of wealth creation , 7% Invest for the purpose of risk diversification.

8) What returns do you receive at present from all your investments?

Investment Returns Number Of Respondents
Less than 5% 3
5%-10% 65
10-15% 20
15%-20% 7
Greater than 20% 5
Total 100

Returns from Investment

We observe that 3% of all the respondents get less than 5%, 65% of all the respondents
get between 5%-10%, 20% of all the respondents get between 10%-15%, 7% of all the
respondents get between 15%-20% and 5% of all the respondents get more than 20%.

9) Which types of funds would you like to prefer for your investment in mutual
fund?

Investment preference Number Of Respondents

Equity fund 65
Debt fund 11
Balanced fund 24
Total 100
Fund Preference

50
We observe that 65% of all the respondents prefer investment in equity fund, 11% of all
the respondents prefer investment in Debt fund, and remaining 24% of all the respondents
prefer investment in balanced fund

CROSS TABULATION

51
Age Wise Break up of Service-Pvt Class Respondents

Service Class 20-30 30-40 40-50 50-60 >60 TOTAL

Equity Market 5 6 1 0 0 12

Mutual Funds 12 8 2 0 0 22
0

Govt. Bonds 0 0 0 0 0 0
0
Real Estate 0 1 0 0 0 1
0

Bank fixed 3 1 0 0 0 4
deposit
Post Office 0 1 0 0 1 2
Life Insurance 4 1 1 0 0 6
Total 25 20 5 0 0 50

We observe that people in the age category of 30-40 and 40-50 years have a certain
preference for Equity holdings, Mutual Fund, Real Estate. However these people are very
conscious for the assured return and security.

RESULTS AND FINDINGS

We observe that 68% of all the respondents invest in mutual fund. We have got 32% of
our total respondents who do not invest in any mutual fund at all.

52
We observe that 56% of all the respondents have complete information of mutual fund.
We have got 24% of our total respondents who do not have complete information of
mutual fund at all and 20% of our total respondents have some information of mutual
fund.

We observe that 89% of all the respondents are interested in getting good deduction from
tax. We have got 11% of our total respondents who are not interested in getting good
deduction from tax at all.

We observe that 76% of all the respondents knows mutual fund is a good instrument of
tax saving. We have got 24% of our total respondents who are mutual fund is a good
instrument of tax saving.

We observe that our respondents invest in more than one instrument of saving.
We observe that 20% of all the respondents Invest for the purpose of high return, 18%
Invest for the purpose of tax benefit, 45% Invest for the purpose of saving, 10% Invest
for the purpose of wealth creation ,7% Invest for the purpose of risk diversification.

We observe that 3% of all the respondents get less than 5%, 65% of all the respondents
get between 5%-10%, 20% of all the respondents get between 10%-15%, 7% of all the
respondents get between 15%-20% and 5% of all the respondents get more than 20%.

We observe that 65% of all the respondents prefer investment in equity fund, 11% of all
the respondents prefer investment in Debt fund, and remaining 24% of all the respondents
prefer investment in Balanced fund.

CONCLUSIONS

53
The mutual fund investors prefer more of the equity fund as they want more return on
their money. They avoid going in the debt fund because they can get same amount of
return on their banks that is also without taking any risk.
Usually people preferred to invest in mutual fund during NFO rather than seeing the
performance of mutual fund scheme. Sometimes due to lack of detailed awareness about
mutual fund schemes the investors seek advice of distributors.
Investors feel that the AMC should go for more promotional activities & should try to
comeup with new innovative schemes which can easily be understood by the investors.

Even after seeing the market crash in May 2006 people still thinks that mutual fund is
much reliable way to invest in stock market. So investors are not going for redemption
during crash & were ready to wait. In fact during the crash time many people were ready
to invest in mutual fund.

People will not accept the entry load if the company would any such type loads during
NFO because during NFO the investors were not sure whether the given scheme can
really give them better return or not.

APPENDIX

54
 QUESTIONNAIRE
PART A

1. Name: Mrs./Ms/Mr _____________________________

2. Age
(a) Between 20 30 years
(b) Between 30 40 years
(c) Between 40 50 Years
(d) Between 50 60 Years
(e) More than 60 Years

3. Contact Nos. / e-mail: ____________________

4. Profession: ____________________________

PART B
1) Do you invest your saving in mutual fund?
a) Yes
b) No

2) Do you have complete information about mutual fund?

a) Yes
b) No
c) Not Much

3) Are you an investor, who is interested in getting good deduction from tax?

55
a) Yes
b) No

4) Do you know mutual fund is a good instrument of tax saving?

a) Yes
b) No

5) Among which of the following income group you fall?

a) Up to 1,00,000
b) 1, 00,001-2, 00,000
c) 2,00,001-3,00,000
d) 3,00,001 & more

6) Which are the investments you hold at present?

a) Equity market
b) Mutual fund
c) Govt. bond
d) Real estate
e) Bank FD
f) Post office
g) Insurance

7) What is the Basic purpose of your investments?

a) High return
b) Tax benefit
c) Saving
d) Wealth creation
e) Risk diversification

8) What returns do you receive at present from all your investments?

a) Less than 5%

56
b) 5%-10%
c) 10-15%
d) 15%-20%
e) Greater than 20%

9) Which types of funds would you like to prefer for your investment in mutual
fund?
a) Equity fund
b) Debt fund
c) Balanced fund

10) Give your preference for tax saving plan of ICICI PRUDENTIAL?
a) Most preferred
b) Favorably preferred
c) Preferred
d) Least preferred
e) Not preferred

11) Rank the following investment options according to your preference.

a) Equity market
b) Mutual fund
c) Govt. bond
d) Real estate
e) Bank FD
f) Post office
g) Insurance

REFERENCES

57
I. Value research
II. Economic times Newspaper
III. www.icicipruamc.com
IV. www.reliancemutual.com
V. Indian Mutual Fund Industry The Future in a Dynamic Environment A
report by KPMG.
VI. www.nseindia.com
VII.www.bseindia.com
VIII.www.rbi.org.in
IX. www.kotakmutual.com
X. www.escortsmutual.com
XI. www.mutualfund.birlasunlife.com
XII.www.sebigov.in

58