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KARVY- STOCKBROKING LIMITED

SME SEGMENT
Internship Report Submitted By: Aakanksha Rathi SSN: 888940845

In partial fulfillment of the Masters Program in Business Administration, Ohio University, Athens, USA OHIO University Christ College Academy for Management Education Christ College Campus Hosur Road, Bangalore-29 April 2007
1

ACKNOWLEDGEMENT
I would like to convey my heartiest gratitude to several people, for their support and guidance which helped me complete my Summer Internship. First and foremost I would like to thank KARVY STOCK BROKING LIMITED, Bangalore for giving me an opportunity to do my internship in their esteemed organization. My special appreciation extends to the Segment Head Mr. Som Shekhar for his constant encouragement throughout this period. I also extend my gratitude to my Guide at KARVY, Wealth Manager -Miss. Sangeetha K, who instructed us with the work procedures and dealt with us with patience at all times. This internship would not be complete without the support of our Director Mr. Shivprakash. I would also like to thank our Internship Co-ordinators,Prof. Amalendu Jyotishi and Prof. Girish for their guidance and unflinching support throughout the phases of my Internship. I also thankProf. Venkatesh Bhagwat for his insightful knowledge, patience and encouragement which gave me the strength and power to perform my best. My special thanks to my co-students and dear friends Ms. Shikha Nagrath, Mr. Sumit Ambastha, Mr. Gaurav Singh and Mr. Mitesh Sonthaliawho being a part of the same internship, supported me throughout my Internship and with whose help I could complete my work efficiently and effectively. Their consistent help kept me motivated and going. Last but not the least, my endless appreciation goes to my family who has stood by my side and given me moral support whenever I was low and boosted my will power.

Thank You!
2

CONTENTS
PAGE NO. 1)Executive
Summary............................................................................4

2)Introduction........................................................................................5 3)Background.........................................................................................6 i) Karvys Mission.........................................................................6 ii)Karvy Milestones......................................................................7 iii)KARVY Credo............................................................................8 iv)Quality Policy............................................................................9 4)Achievements.....................................................................................10 5)KARVY Wings......................................................................................11 i)KARVY Stock Broking Limited................................................... 14 6)Organization Structure........................................................................15 i)Structure of SME Segment........................................................16 ii)Process.....................................................................................17 7)Product & Services..............................................................................19 i)Products....................................................................................19 (a)Mutual Funds..................................................................19 (b)Insurance........................................................................31 (c)Equities..........................................................................35 (d)Bonds.............................................................................38 (e)Derivatives.....................................................................41 ii)Services....................................................................................43 (a)Depository Participants.................................................. 45 (b)Distribution of Financial Products...................................46 (c)Advisory Services...........................................................47 (d)Private client Group OR CPMS........................................ 48 8)Marketing Plan....................................................................................50 9)Competitors of KARVY.........................................................................52 3

10)Learnings...................................................................... . . . . . . . . . . . . . . . . . . . . .54 11)Bibliography........................................................................................58

EXECUTIVE SUMMARY

This internship report consists of the overall experience of working as a part of SME Segment at KARVY STOCKBROKING LIMITED. This experience helped me understand the basic functioning of the particular SME segment where I was inducted. My Internship consisted of the On Job Training as A Relationship Manager. The best learning experience was that I started from the very basics of getting to that position and not from the position itself. This helped me get useful insight and understanding of various financial products, the market details about them and the benefits provided by them to the customers. Emphasis was given in analysis of the investor behavior of the clients. Another interesting fact was that all these products were suggested to clients not just based on their market performance and returns, but on the clients financial condition as well as their risk taking capacity. Training sessions were held to give me insights about the various products that KARVY STOCKBROKING deals in like: Mutual Funds, Insurance and Bonds. Presentations on the same after self study and analysis were a part of this internship session. I provided financial advice and suggestions to the investors for mutual funds which may prove prudent to them. For other products I studied the clients investing behavior and assisted the wealth manager, who decided the investment options and designed the portfolios. 4

INTRODUCTION
KARVY is a premier integrated financial services provider and ranked among the top five in the country in all its business segments. It services over 16 million individual investors in various capacities and provides investor services to over 300 corporates, comprising who is who of Corporate India. It is a member of all three: N a t i o n a l ( N S E ) B o m b a y S t H y d e r a b a d ( H S E )

S o

k c

n ( B g e

g S

e E )

c k S t o

E x c k

h a n g e E x c h a n

Karvy utilized its experience and superlative expertise to capitalize on its strengths and better its service, innovate and provide new ones. It diversified in the process and thus evolved as Indias premier integrated financial service enterprise. Karvy has been a customer centric company since its inception. It offers a single platform servicing multiple financial instruments in its bid to offer complete financial solutions to the varying needs of both corporate and retail investors, where an extensive range of services are provided with great volume-management capability. KARVY covers the entire spectrum of financial services such as Stock broking, Depository Participants, Distribution of financial products - mutual funds, bonds, fixed deposit, equities, Insurance Broking, Commodities Broking, Personal Finance Advisory Services, Merchant Banking & Corporate Finance, placement of equity, IPOs, among others. Karvy has a professional management team and ranks among the best in technology, operations and research of various industrial segments. 5

(Karvy.com)

BACKGROUND
The flagship company, Karvy Consultants Limited was found with the vision and enterprise of a group of practicing Chartered Accountants on a modest scale in 1981 in Hyderabad, where it now has 13 branches. It initiated with just one activity and later carved roads into fields of registry and share accounting as well. From then there was no stopping at all. A decade of commitment, professional integrity and vision helped Karvy achieve a leadership position in its field. It is known to handle the largest number of issues ever in the history of the Indian stock market in a particular year. Thereafter, Karvy made inroads into a host of capital market services, corporate and retail which proved to be a sound business synergy. Today Karvy has access to millions of Indian shareholders, besides companies, banks, financial institutions and regulatory agencies. Over the past one and half decades, Karvy has involved as a veritable link between industry, finance and people. In January 1998, Karvy became the first Depository Participant in Andhra Pradesh. An ISO 9002 company, Karvys commitment to quality and retail reach has made it an integrated financial services company. A SEBI category 1 registrar, so far Karvy has handled over 675 issues as Registrars to public issues, processed over 52 million applications and is servicing over 16 million investors from various locations spread over 205 cities.

Karvys Mission:
Our mission is to be a leading and preferred service provider to our customers, and we aim to achieve this leadership position by building an innovative, enterprising, and technology driven 6

organization which will set the highest standards of service and business ethics .
(Karvy.com)

KARVY MILESTONES
Karvy has traveled a success route over the past 20 years and positioned itself as an emerging financial service giant in which embeds the confidence and support of enviable patrons across the financial world. Patrons are also of diversified fields which includes over 16 million individual investors in various capacities and 300 corporates comprising the best out of the whole lot .Years of experience of holistic financial services and expertise in this industry has helped it gain the status it enjoys and cherishes today. 7

(Karvy.com)

KARVY CREDO

Following are the system of principles or beliefs followed by Karvy Group. Our Clients, Our Focus Clients are the reason for our being Personalized service, professional care; pro-activeness are the values that helps KARVY nurture enduring relationships with their clients. Teamwork None of us is more important than all of us 8

Each team member is the face of Karvy. Together they offer diverse services with speed, accuracy and quality to deliver only one product: excellence. Transparency, co-operation, invaluable individual contribution for a collective goal, and respect for individual uniqueness within a corporate whole, is what KARVY aims at. Responsible Citizenship A social balance sheet is as rewarding as a business one. As a responsible corporate citizen, KARVY believes that its duty is to foster a better environment in the society where they live and work. To abide by its norms, and to behave in a responsible manner towards the environment, are some of its growing initiatives towards realizing this. Integrity Everything else is secondary Professional and personal ethics are Karvys bedrocks. They take pride in building an environment that encourages honesty and opportunity to learn from failures than camouflage them. They insist on consistency between work and actions.
(Karvy.com)

QUALITY POLICY:
To achieve and retain leadership, Karvy aims for complete customer satisfaction, by combining its human and technological resources, to provide superior quality financial services. In the process, Karvy strives to exceed Customer's expectations. As per the Quality Policy, Karvy will: 9

Build in-house processes that will ensure transparent and harmonious relationships with its clients and investors to provide high quality of services.

Establish a partner relationship with its investor service agents and vendors that will help it in keeping up to its commitments to the customers.

Provide high quality of work life for all its employees and equip them with adequate knowledge & skills so as to respond to customer's needs.

Continue to uphold the values of honesty & integrity and strive to establish unparalleled standards in business ethics.

Use state-of-the art information technology in developing new and innovative financial products and services to meet the changing needs of investors and clients.

Strive to be a reliable source of value-added financial products, services and constantly guide the individuals and institutions in making a judicious choice of same.

Strive to keep all stake-holders (shareholders, clients, investors, employees, suppliers and regulatory authorities) proud and satisfied.
(Karvy.com)

ACHIEVEMENTS
A m o n g b r o k e r s volumes) 10

t i

h n

e I

t o p n d i

5 a (

s t o 4 %

c o

k f N S E

'

&

&

(Karvy.com)

KARVY WINGS
As discussed earlier, KARVY offers a single platform servicing multiple financial instruments in its bid to offer complete financial solutions to the varying needs of both corporate and retail investors. The range of products and services are provided by the following wings. 11

This is the flagship company of Karvy Group and it controls the organizational affairs, channels of progress, work affairs and pioneering business policies. This was the first business the KARVY group ventured into, but now they have transferred it into a joint venture with computer share limited of Australia, the worlds largest registrar. This company services around 6 lakh customer accounts in a spread of 250 cities/towns in India. This wing of Karvy is registered with SEBI as a category 1 merchant banker and is also recognized as a leading merchant banker of the country. It has built its reputation by capitalizing the opportunities as and when it comes, be it in corporate consolidations, mergers and acquisitions or corporate restructuring. Involvement in raising resources for corporate or government undertaking successfully over the past two decades has given it a tremendous confidence boost. This wing of Karvy has traversed wide spaces to tie up with the worlds largest transfer agent, the leading Australian company Computershare Limited. This company services more than 75 million shareholders across 7000 clients and makes its presence felt in over 12 countries across 5 continents. It has also 12

entered into a 50-50 joint venture with Karvy. After transferring completely to this new entity it has tried to enrich the financial services industry as a whole. The worldwide network of Computershare helps it to adapt to the international standards in addition to leveraging the best technologies from all over the world. This is a specialist Business Process Outsourcing unit of the Karvy Group. The legacy of experience in financial services of Karvy Group acts as a big support for entering the global arena with confidence of delivering the best. This wing offers several models on the understanding of business needs that are unique and therefore only a customized service could possibly fit the bill. Their service matrix has permutations and combinations that create several options to choose from. Its Services meet the most stringent International standards, be it re-engineering and managing processes or delivering new efficiencies. Karvy Commodities focuses on taking commodities trading to new dimensions of reliability and profitability. They have made commodities trading, an essentially age-old practice, into a sophisticated and scientific investment 13

option. It helps in enabling trade in all goods and products of agricultural and mineral origin that include lucrative commodities like gold and silver and popular items like oil, pulses and cotton through a well-systematized trading platform. Karvy Insurance Broking Pvt. Ltd., provides both life and non-life insurance products to retail individuals, high net-worth clients and corporates. With the opening up of the insurance sector and entry of a large number of private players in the business, it is in a position to provide tailor made policies for different segments of customers.
(Karvy.com)

KARVY STOCK BROKING LIMITED (KSBL)

It is undisputable fact that the stock market is unpredictable and volatile, but despite this KSBL enjoys a high success rate as a wealth management option. 14

Karvy Stock Broking Limited offers services that are much beyond serving just as a medium for buying and selling stocks and shares. Instead it provides multi dimensional and multi focused services. It offers trading facilities for National Stock Exchange, Bombay Stock Exchange and Hyderabad Stock Exchange and tries to make trading safe to maximum possible extent. For this they are assisted by their in depth research team for constant feedback and sound advices. TheFinapolis is the monthly magazine that is published by this wing. It analyzes the latest stock market trends and takes a close look at the various investment options and products available in the market. A weekly report, called Karvy Bazaar Baatein, keeps people informed on the immediate trends in the stock market. In addition, the specific industry reports give more comprehensive information on various industries. It also offers special portfolio analysis packages that provide daily technical advice on scrips for successful portfolio management. It provides customized advisory services to help the client make right financial moves which specifically suits their portfolios.
(Karvy.com)

ORGANIZATION STRUCTURE
There are various departments and segments in KARVY STOCKBROKING LIMITED. The segment of which I was a part of during my training process is 15

the SME segment. This segment caters especially to the needs of the SMALL & MEDIUM ENTERPRISES. Small and Medium Enterprises refers to organizations that are larger than SOHOs (Small office/Home office) and smaller than the Fortune 1000. The size is subjective ranging from approximately 25 to 500 employees. The BASVANGUDI branch in Bangalore, where I took my internship is the first branch all over India which has this segment. This segments operations were initialized in 2006 to cater to the ever increasing demand and growth of the SME Segment as it was found through a study, that most of the AMCs are getting 55% to 60% of their sales by SMEs alone. Based on the performance of this segment, plans will be laid down for opening up of such segments in other branches too. An important point to be noted is that The SME segment is emphasizing more on Mutual Funds instead of equity, insurance and other products. This segment concentrates approximately: 60% on Mutual Funds 30% on Equity 10% on Insurance and other products So far, the performance of this segment has been good and it has been a contributing factor in increasing the customer base of KARVY STOCK BROKING LIMITED. Thus plans for opening of SME Segment in other branches are shaping up.

STRUCTURE OF SME SEGMENT:

16

WHERE:
Relates to Back Office RO - Relationship officer SRM - Service Relationship Manager

PROCESS:
17 Sub dealer Main dealer Sub back office person MF desk HEAD Wealth Manager Wealth Manager SRM SRM SRM SRM SRM SRM
RO RO RO RO RO RO RO RO RO RO RO RO

Tele Sales Tele Sales

The process of the entire working of the SME segment takes place in the following manner: F i r s t t h e d a t a i s c o l l e c t b y t h e R O s , S R M s , W e a l t h M a n a g e r s , M a i n

Dealer and the Head himself. This is done at all levels so that the data is collected from all the resources available and is qualitative in terms of conversions. O n c e t h e d a t a i s a c q u o r s o u r c e d i t i s g i v e n T e l e M a r k e t i n g o r i r e d t

Sales team. They are expected to achieve a target of 60% through their calls. The main aim of them is to get to the right client and convince him for a meet. T h e n t h e T e l e c a l l e r s f i x a p p o i n t m e n t s a n d f o r w a r d t h e d e t a i l s o f t h e same to the ROs i.e. the Relationship Officers. N e x t t h e R O s v i s i t t h e c l i e n t a n d i n f o r m t h e m a b o u t t h e e n t i r e p r o d u c t s that would cater to the customers needs. His work is not just confined to imparting the information to the client; moreover he has to extract information from the client as well. He has to understand the customers needs, risk taking ability and gives the details to the SRM if the client is prospective. T h e n t h e S R M m e e t s t h e p r o s p e c t i v e c l i e n t s a n d c a t e r i n g t o t h e n e e d o f them gathers information regarding the financial details of client, his past investments, future investment capability etc. and gives it to the Wealth Manager. T h e W e a l t h M a n a g e r t h e n d e s i g n s t h e p o r t f o l i o f o r c l i e n t b a s e d o n his analysis, study and advices from the R&D department and closes the deal. 18

In the whole process mentioned above, there are 4 back office persons, who assist the segment at all times in various works.

M e S s e M e u S e o

a s u s a F s n u r r

i k b i l

D s e R t r e r

e a

a n t

e t

r o

M a i n

A D

s c

e h

r o

c n

h m

u t u a l

R f

e d b s

a s

B o s n e

k R i n

o e g

f s r

f p

i o e

c n p

e s o r i t b s l e

p f

a n d M I S Reports are sent weekly for Equity and Mutual Funds and monthly for futures and options. This whole process is controlled and managed by the Segment Head. 19

PRODUCT & SERVICES

PRODUCTS
MUTUAL FUNDS:
CONCEPT:
A Mutual Fund is a form of collective investment that pools money from many investors, who share common financial goals and invests their money in stocks, bond, short term money market instruments and/or other securities. The income earned through these investments and the capital appreciations realized are shared by its unit holders in proportion to the number of units owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost. The flow chart below describes broadly the working of a mutual fund:
(amfiindia.com.com)

20

INDIAN MUTUAL FUND INDUSTRY:

The rising Indian mutual funds industry probably never had it better, as far as the entry of individual or retail investors is concerned. The industrys total AUM in December 2006 stood at a hefty Rs 3, 23,597 crore, with a total of 2.79 crore depositor folios, of which 2.31 crore depositor folios had invested in equity schemes. The share of direct investors, on the other hand, has been dropping, stating that more retail investors see mutual funds as a preferred route for investing in the markets. Existing and new market players as well as Exchange Traded Funds are likely to hit the market in the coming months with a flurry of new Mutual Funds schemes. An action packed first quarter of 2007 was forecasted to witness at least 20 new schemes which are waiting on the sidelines to be launched.
(Myiris.com)

21

PERFORMANCE SNAPSHOT!!!
The year 2006 scored high in terms of both returns and volatility. The rising Indian mutual funds industry saw its best, as far as the entry of individual or retail investors is concerned. In 2006, out of the 159 diversified equity funds (includes diversified equity, midcap, and equity tax saving schemes):

I n f r a s t r u c t u r e Fund) and the worst being a negative 10.6% E q u i t y D i v e r s i f i e d f u n d s c h u r n e d o u t a n a v e r a g e 3 3 . 2 r e t u r n , w h i c h comprise of 72 fund in this category comprising of total 135 funds I n f r a s t r u c t u r e f u n d s s t o l e t h e l i m e l i g h t t h i s y e a r w i t h t h e t o p t h r e e performers being Infrastructure Fund.
(Myiris.com)

22

TOTAL ASSET MANAGED BY VARIOUS FUND HOUSES:

The amount of assets managed by AMCs varies every year. Following is the table that depicts the total amount of asset managed by the well known AMCs in India. It also shows the ranking of AMCs for the year 2007, based on the above mentioned parameter.

Fund House Jan 2007 Jan 2006 Dec 2006

Reliance MF 39,020 16,702 36,928 UTI MF 37,535 25,417 38,109 Prudential ICICI 34,746 22,635 33,305 HDFC MF 31,425 18,591 29,635 Franklin Templeton 23,908 18,153 23,403 Birla Sun Life 21,190 13,797 17,054 SBI MF 17,552 10,839 15,086 DSP Merrill Lynch 13,440 8,976 13,517 Tata MF 13,222 8,649 12,177 Standard Chartered 12,746 9,480 12,629 Kotak Mahindra 12,674 7,397 12,062 LIC MF 12,237 6,386 11,599 HSBC 12,140 6,288

10,450 Principal 10,333 6,789 10,522

Figures in Rs Crore Source: AMFI R e l i a

n c e M F h a s t o p m u t u a l f u n d h country by adding a very impressive Rs2, 092 crore under management. P r e v i o u s T o p F U T I M F d e c l i n e d c r o r e a n d lost its top position to Reliance MF. 23

b e c o o u s e to assets u n b d y

H o u s R s 5 7

e 4

B i r l a S u n l i f e w b e s t p e r f o r m e r i 2 0 0 7 a n d a d d e d Rs4, 136 crore to its assets S B I M F w a s a b l e a c q u i r e 7 t h p o s i a d d i t i o n o f R s 2 , 466 crore T a t a M F g a i n e d c r o r e a n d a b l e t i t s p o s i t i o n i n top 10. 24

a s n t t R o i s

t h e a n u

o o n 1 s e , c

0 4 5 u r e

BEST EQUITY MUTUAL FUNDS: (As on 27th April, 2007)

Following is the ranking of the best mutual funds and their NAVs as on 27th April, 2007. The rankings are based on 1 year returns of the Equity Mutual Funds available in the market. S.N O SCHEME NAME 1 YR RETURN (%) PRESEN T NAV
1 DSPML Technology.com Fund Growth 47.50 26.89 2 UTI Banking Sector Fund - Growth 40.05 21.47 3 Magnum IT 36.06 28.49 4 Birla Sunlife New Millennium - Growth 35.60 21.33 5 Banking BeEs 32.69 590.31 6 Prudential ICICI Technology - Growth 32.59 15.99 7 Prudential ICICI Services Industries Fund Growth 32.07 16.02 8 UTI Software Growth 30.09 27.71 9 Reliance Media & Entertainment Growth 28.61 26.07 10 Birla Sunlife Frontline Equity - Growth 27.90 52.81 11 Reliance Banking Growth 27.81 39.20 12 Reliance NRI Equity Fund Growth 26.54 24.70 13

Franklin Infotech Growth 25.95 52.62 14 DBS Chola Opportunity 25.85 28.63 15 Reliance Diversified Power Sector Growth 25.16 37.71

SOURCE: mutualfundsnavindia.com

TYPES OF MUTUAL FUNDS:25

(Amfiindia.com)

EXPLAINATION: Open ended Mutual Funds:

26 Types of Mutual Funds By Structure Other Schemes By Investment Objective Interval Schemes Close Ended Schemes Open Ended Schemes Growth Schemes Money Market Schemes Balanced Schemes Income Schemes Tax Saving Schemes
(ELSS)

Special Schemes Index Schemes Sector Specific Schemes

It is a type of mutual fund where there are no restrictions on the amount of shares the fund will issue. If demand is high enough, the fund will continue to issue shares no matter how many investors there are. Open-end funds also buy back shares when investors wish to sell. Most of the mutual funds available in the marketplace are open-end funds. Open-end funds are generally managed actively and are priced according to their net asset value (NAV). Open-end funds are wide-ranging. Some Open-end funds are more conservative and provide consistent returns with low risk, and some are more aggressive in seeking to make capital gains through constant trading.

Close ended Mutual Funds:

When an investment company issues a fixed number of shares in an actively managed portfolio of securities, it is referred to as close ended mutual funds. The shares are traded in the market just like common stock. The main difference with closed-end funds is that market price of the shares is determined by supply and demand and not by net-asset value (NAV).Its stipulated maturity period ranges from 3 to 15 years.

Interval Schemes:
It is a fund that combines the features of open-ended and closed-ended schemes, making the fund open for sale or redemption during pre-determined intervals. In other words, this is a mutual fund with redemption features in between those of closed-end and open-end funds.

Growth Schemes:
It is a diversified portfolio of stocks that has capital appreciation as its primary goal, and it thereby invests in companies that reinvest their earnings into 27

expansion, acquisitions, and/or research and development. Most growth funds offer higher potential growth but usually at a higher risk.

Income Schemes:

This scheme seeks to provide stable current income by investing in securities that pay interest. Income funds typically invest in utility stocks and blue chips.

Balanced Scheme:
It is a type of mutual fund that invests its assets into the money market, bonds, preferred stock, and common stock with the intention to provide both growth and income. A balanced fund is geared towards investors looking for a mixture of safety, income, and capital appreciation. The amount the mutual fund invests into each asset class usually must remain within a set minimum and maximum. It is also known as Asset Allocation Fund.

Money Market Schemes:

Money Market Schemes aim to provide easy liquidity, preservation of capital and moderate income. These schemes generally invest in safer, short-term instruments, such as treasury bills, certificates of deposit, commercial paper and inter-bank call money.

Tax Saving Schemes:

Tax-saving schemes offer tax rebates to the investors under tax laws prescribed from time to time. Under Sec.88 of the Income Tax Act, 28

contributions made to any Equity Linked Savings Scheme (ELSS) are eligible for rebate @20% to a maximum of Rs10, 000 per financial year.

Index Schemes:

It is a portfolio of investments that is weighted the same as a stock-exchange index in order to mirror its performance. This process is also referred to as "indexing". Investing in an index fund is a form of passive investing. The primary advantage to such a strategy is the lower management expense ratio on an index fund. Also, a majority of mutual funds fail to beat broad indexes such as the S&P 500.

Sector Specific Schemes:

It is an investment fund that makes investments solely in businesses that operates in a particular industry or sector of the economy. Since the holdings of this type of fund are in the same industry, there is an inherent lack of diversification by sector associated with these funds. These funds tend to increase substantially in price when there is an increased demand for the product or service offering provided by the businesses in which the funds invest. On the other hand, if there is a downturn in the specific sector in which a sector fund invests, the fund will face heavy losses due to the lack of diversification in its holdings.
(Amfiindia.com)

SELECTION CRITERIA FOR MUTUAL FUNDS:

I gave suggestions for Mutual Funds based on the following parameters: 29

Investment Objective of the client:

Whether the client is looking for long term investment or short, they require high returns or tax savings etc, had to be analyzed. The investment objective of the client should match with that of the particular Mutual Fund Scheme.

Past performance:

The previous returns of the funds mentioned in the investment brochures were seen and the funds which have performed well and given high returns were preferred and suggested to clients.

Consistency in returns:

The returns are not just expected to be high but a consistency should be observed in the funds performance and returns. The previous year return for a particular fund may be high but if it is not consistent in its performance then that is a risky deal. Consistent funds are more suitable for risk averse clients.

Tax benefits:

The investors whose objective was tax saving were advised to invest in Tax saving Mutual Funds. 30

Karvy- Stockbroking Limited

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