Page |1

CONTENTS
Topic

Page No.

Company Profile......6 Introduction.....23 Ob ecti!e" of t#e "tudy....2$ %utual fund for &#om.3' (#y mutual fund.....3) Type" of in!e"tor".3* %ar+eting "trategie"..', -e"earc# %et#odology.)' .inding"....)* /ata 0naly"i" 1 interpretation.........63 Conclu"ion....*2 -ecommendation..*' 2ibliograp#y.....*) 3ue"tionnaire.......*6

Page |2

OVERVIEW
KARVY4 i" a premier integrated financial "er!ice" pro!ider4 and ran+ed among t#e top fi!e in t#e country in all it" bu"ine"" "egment"4 "er!ice" o!er 16 million indi!idual in!e"tor" in !ariou" capacitie"4 and pro!ide" in!e"tor "er!ice" to o!er 3,, corporate4 compri"ing t#e &#o i" &#o of Corporate India. 50-67 co!er" t#e entire "pectrum of financial "er!ice" "uc# a" 8toc+ bro+ing4 /epo"itory Participant"4 /i"tribution of financial product" 9 mutual fund"4 bond"4 fi:ed depo"it4 e;uitie"4 In"urance 2ro+ing4 Commoditie" 2ro+ing4 Per"onal .inance 0d!i"ory 8er!ice"4 %erc#ant 2an+ing 1 Corporate .inance4 placement of e;uity4 IPO<"4 among ot#er". 5ar!y #a" a profe""ional management team and ran+" among t#e be"t in tec#nology4 operation" and re"earc# of !ariou" indu"trial "egment".

KARVY-EARLY DAYS
T#e birt# of 5ar!y &a" on a mode"t "cale in 1$=1. It began &it# t#e !i"ion and enterpri"e of a "mall group of practicing C#artered 0ccountant" &#o founded t#e flag"#ip company 5ar!y Con"ultant" >imited. (e "tarted &it# con"ulting and financial accounting automation4 and car!ed inroad" into t#e field of regi"try and "#are accounting by 1$=). T#u" o!er t#e la"t 2, year" 5ar!y #a" tra!eled t#e "ucce"" route4 to&ard" building a reputation a" an integrated financial "er!ice" pro!ider4 offering a &ide "pectrum of "er!ice". 0nd &e #a!e made t#i" ourney by ta+ing t#e route of ;uality "er!ice4 pat# brea+ing inno!ation" in "er!ice4 !er"atility in "er!ice and finallytotality in "er!ice. (it# t#e e:perience of year" of #oli"tic financial "er!icing be#ind u" and year" of

Page |3 complete e:perti"e in t#e indu"try to loo+ for&ard to4 &e #a!e no& emerged a" a premier integrated financial "er!ice" pro!ider.

SERVICES
Commoditie" trading ?NC/@A 1 %CAB Per"onal finance ad!i"ory "er!ice" Corporate finance 1 merc#ant ban+ing /epo"itory participant "er!ice" ?N8/> 1 C/8>B .inancial product" di"tribution ?in!e"tment"Cloan product"B %utual fund "er!ice" 8toc+ bro+ing ?N8@ 1 28@4 .1OB @9Td"4 tanCpan cardCmapin In"urance ?life 1 generalB -egi"trar 1 tran"fer agent"

Page |'

MILESTONE OF KARVY CONSULTANTS LTD

Page |)

0" t#e flag"#ip company of t#e 5ar!y Droup4 5ar!y Con"ultant" >imited #a" al&ay" remained at t#e #elm of organiEational affair"4 pioneering bu"ine"" policie"4 &or+ et#ic and c#annel" of progre"". (e #a!e no& tran"ferred t#i" bu"ine"" into a oint !enture &it# Computer "#are >imited of 0u"tralia4 t#e &orld<" large"t regi"trar. (it# t#e ad!ent of depo"itorie" in t#e Indian capital mar+et and t#e relation"#ip" t#at &e #a!e created in t#e regi"try bu"ine""4 &e belie!e t#at &e &ere be"t po"itioned to !enture into t#i" acti!ity a" a /epo"itory Participant today4 &e "er!ice o!er 6 la+#" cu"tomer account" in t#i" bu"ine"" "pread acro"" o!er 2), citie"Cto&n" in India and are ran+ed among"t t#e large"t /epo"itory Participant" in t#e country. (it# a gro&ing "econdary mar+et pre"ence4 &e #a!e tran"ferred t#i" bu"ine"" to 5ar!y 8toc+ 2ro+ing >imited ?582>B4 our a""ociate and a member of N8@4 28@ and F8@.

IT enabled services
Our Tec#nology 8er!ice" di!i"ion form" t#e ideal platform to unlea"# our tec#nology initiati!e" and ma+e our pre"ence felt on t#e Internet. Our pa"t ac#ie!ement" include many ;uality &eb"ite" de"igned4 de!eloped and deployed by u". (e al"o po""e"" our o&n &eb #o"ting facilitie" &it# dedicated band&idt# and a "tate9of9t#e9art "er!er farm ?data centerB &it# "er!ice" functioning on a !ariety of operating platform" "uc# a" (indo&"4 8olari"4 >inu: and GNIA. T#e corporate &eb"ite of t#e company4 H&&&.+ar!y.comI4 gi!e" acce"" to in9dept# information on financial matter" including %utual .und"4 IPO"4 .i:ed Income 8c#eme"4 In"urance4 8toc+ %ar+et and muc# more.

Page |6

%ember 9 National 8toc+ @:c#ange ?N8@B4 t#e 2ombay 8toc+ @:c#ange ?28@B4 and T#e Fyderabad 8toc+ @:c#ange ?F8@B. 5ar!y 8toc+ 2ro+ing >imited4 one of t#e corner"tone" of t#e 5ar!y edifice4 flo&" freely to&ard" attaining di!er"e goal" of t#e cu"tomer t#roug# !aried "er!ice". Creating a plet#ora of opportunitie" for t#e cu"tomer by opening up in!e"tment !i"ta" bac+ed by re"earc#9ba"ed ad!i"ory "er!ice". Fere4 gro&t# +no&" no limit" and "ucce"" recogniEe" no boundarie". Felping t#e cu"tomer create &a!e" in #i" portfolio and empo&ering t#e in!e"tor completely i" t#e ultimate goal.

S !c" #r!"in$ Services

It i" an undi"puted fact t#at t#e "toc+ mar+et i" unpredictable and yet en oy" a #ig# "ucce"" rate a" a &ealt# management and &ealt# accumulation option. T#e difference bet&een unpredictability and a "afety anc#or in t#e mar+et i" pro!ided by in9dept# +no&ledge of mar+et functioning and c#anging trend"4 planning &it# fore"ig#t and c#oo"ing one 1 re"cue<" option" &it# care. T#i" i" &#at &e pro!ide in our 8toc+ 2ro+ing "er!ice. 50-67 offer "er!ice" t#at are beyond u"t a medium for buying and "elling "toc+" and "#are". In"tead &e pro!ide "er!ice" t#at are multi dimen"ional and multi9focu"ed in t#eir "cope. It offer trading on a !a"t platformJ National 8toc+ @:c#ange4 2ombay 8toc+ @:c#ange and Fyderabad 8toc+ @:c#ange. It ma+e trading "afe to t#e ma:imum po""ible

Page |* e:tent4 by accounting for "e!eral ri"+ factor" and planning accordingly. It i" a""i"ted in t#i" ta"+ by our in9dept# re"earc#4 con"tant feedbac+ and "ound ad!i"ory facilitie". It #a!e "+illed re"earc# team4 compri"ing of tec#nical analy"t" a" &ell a" fundamental "peciali"t"4 "ecure re"ult9oriented information on mar+et trend"4 mar+et analy"i" and re!ie&ed. 50-67 publi"# a mont#ly magaEine 1 ld;uoJ 5ar!yJ T#e .inapoli"1rd;uoJ4 &#ic# analyEe" t#e late"t "toc+ mar+et trend" and ta+e" a clo"e loo+ at t#e !ariou" in!e"tment option"4 and product" a!ailable in t#e mar+et4 &#ile a &ee+ly report4 called 1 ld;uo. It al"o offer "pecial portfolio analy"i" pac+age" t#at pro!ide daily tec#nical ad!ice on "crip" for "ucce""ful portfolio management and pro!ide cu"tomiEed ad!i"ory "er!ice" to #elp you ma+e t#e rig#t financial mo!e" t#at are "pecifically "uited to your portfolio. Our 8toc+ 2ro+ing "er!ice" are &idely net&or+ed acro"" India4 &it# t#e number of our trading terminal" pro!iding retail "toc+ bro+ing facilitie". Our "er!ice" #a!e increa"ingly offered cu"tomer oriented con!enience4 &#ic# &e pro!ide to a "pectrum of in!e"tor"4 #ig#9net &ort# or ot#er&i"e4 &it# e;ual dedication and competence. To empo&er t#e in!e"tor furt#er &e #a!e made "eriou" effort" to en"ure t#at our re"earc# call" are di""eminated "y"tematically to all our "toc+ bro+ing client" t#roug# !ariou" deli!ery c#annel" li+e email4 c#at4 8%84 p#one call" etc. In t#e future4 our focu" &ill be on t#e emerging bu"ine""e" and to meet t#i" ob ecti!e4 &e #a!e en#anced our manpo&er and re!italiEed our +no&ledge ba"e &it# en#ance" focu" on .uture" and Option" a" &ell a" t#e commoditie" bu"ine"".

DE%OSITORY %ARTICI%ANTS
T#e on"et of t#e tec#nology re!olution in financial "er!ice" Indu"try "a& t#e emergence of 5ar!y a" an electronic cu"todian regi"tered &it# Na i!nal Sec&ri ies De'!si !r( L d )NSDL* and Cen ral Sec&ri ies De'!si !r( L d)CSDL* in 1$$=. 5ar!y "et "tandard" enabling furt#er comfort to t#e in!e"tor by promoting paperle"" trading acro"" t#e country and emerged a" t#e !' + De'!si !r( %ar ici'an s in t#e country in term" of

Page |= cu"tomer "er!iced. Offering a &ide trading platform &it# a dual member"#ip at bot# N8/> and C/8>4 &e are a po&erful medium for trading and "ettlement of dematerialiEed "#are".

DISTRI#UTION OF FINANCIAL %RODUCTS

T#e paradigm "#ift from pure "elling to +no&ledge ba"ed "elling dri!e" t#e bu"ine"" today. (it# our &ide portfolio offering"4 &e occupy all "egment" in t#e retail financial "er!ice" indu"try. 0 16,, team of #ig#ly ;ualified and dedicated profe""ional" dra&n from t#e be"t of academic and profe""ional bac+ground" are committed to maintaining #ig# le!el" of client "er!ice deli!ery. T#i" #a" propelled u" to a po"ition among t#e top di"tributor" for e;uity and debt i""ue" &it# an e"timated mar+et "#are of 1)K in term" of application" mobiliEed4 be"ide" being e"tabli"#ed a" t#e leading procurer in all public i""ue". To furt#er tap t#e immen"e gro&t# potential in t#e capital mar+et" &e en#anced t#e "cope of our retail brand4 Karv( , -e Fina'!lis. t#ereby pro!iding planning and ad!i"ory "er!ice" to t#e ma"" affluent. Fere &e under"tand t#e cu"tomer need" and life"tyle in t#e conte:t of pre"ent earning" and pro!ide ade;uate ad!i"ory "er!ice" t#at &ill nece""arily #elp in creating &ealt#. Ludiciou" planning t#at i" cu"tomiEed to meet t#e future need" of t#e cu"tomer deli!er a "er!ice t#at i" e:emplary. T#e mar+et9"a!!y and t#e ignorant in!e"tor"4 bot# find t#i" "er!ice !ery "ati"factory. T#e edge t#at &e #a!e o!er competition i" our portfolio of offering" and our profe""ional e:perti"e. T#e in!e"tment planning for eac# cu"tomer i" done &it# an unbia"ed attitude "o t#at t#e "er!ice i" truly cu"tomiEed. Our mont#ly magaEine4 .inapoli"4 pro!ide" up9dated mar+et information on mar+et trend"4 in!e"tment option"4 opinion" etc. T#u" empo&ering t#e in!e"tor to ba"e e!ery financial mo!e on rational t#oug#t and prudent analy"i" and embar+ on t#e pat# to &ealt# creation.

Page |$

ADVISORY SERVICES
Gnder our retail brand M5ar!y N t#e .inapoli"O4 &e deli!er ad!i"ory "er!ice" to a cro"" "ection of cu"tomer". T#e "er!ice i" bac+ed by a team of dedicated and e:pert profe""ional" &it# !aried e:perience and bac+ground in #andling in!e"tment portfolio". T#ey are continually engaged in de"igning t#e rig#t in!e"tment portfolio for eac# cu"tomer according to indi!idual need" and budget con"ideration" &it# a compre#en"i!e "upport "y"tem t#at focu"e" on trading cu"tomer"O portfolio" and pro!iding !aluable input"4 monitoring and managing t#e portfolio t#roug# !aried tec#nological initiati!e". T#i" i" made po""ible by t#e e:perti"e &e #a!e gained in t#e bu"ine"" o!er t#e year". 0not#er !enture to&ard" being in!e"tor9friendly i" t#e circulation of a mont#ly magaEine called M5ar!y 9 t#e .inapoli"O. Co!ering t#e late"t of mar+et ne&"4 trend"4 in!e"tment "c#eme" and re"earc#9ba"ed opinion" from e:pert" in !ariou" financial field".

%RIVATE CLIENT /ROU%

T#i" "pecialiEed di!i"ion &a" "et up to cater to t#e #ig# net &ort# indi!idual" and in"titutional client" +eeping in mind t#at t#ey re;uire a different +ind of financial planning and management t#at &ill augment not u"t e:i"ting finance" but t#eir life9"tyle a" &ell. Fere &e follo& a #ard9no"ed bu"ine"" approac# &it# t#e "oft touc# of dedicated cu"tomer care and per"onaliEed attention. .or t#i" purpo"e &e offer a compre#en"i!e and per"onaliEed "er!ice t#at encompa""e" planning and protection of finance"4 planning of bu"ine"" need" and retirement need" and a #o"t of ot#er "er!ice"4 all pro!ided on a one9to9one ba"i".

P a g e | 1, Our re"earc# report" #a!e been &idely appreciated by t#i" "egment. T#e deli!ery and "upport module" #a!e been fine tuned by gi!ing our client" acce"" to online portfolio information4 con"tant update" on t#eir portfolio" a" &ell a" !alue9added ad!ice on portfolio c#urning4 "ector "&itc#e" etc. T#e in!e"tment recommendation" gi!en by our re"earc# team in t#e ca"# mar+et #a!e en oyed a #ig# "ucce"" rate.

MERC0ANT #ANKIN/
-ecogniEed a" a leading merc#ant ban+er in t#e country4 &e are regi"tered &it# 8@2I a" a Category I merc#ant ban+er. T#i" reputation &a" built by capitaliEing on opportunitie" in corporate con"olidation"4 merger" and ac;ui"ition" and corporate re"tructuring4 &#ic# #a!e earned u" t#e reputation of a merc#ant ban+er. -ai"ing re"ource" for corporate or Do!ernment Gnderta+ing "ucce""fully o!er t#e pa"t t&o decade" #a!e gi!en u" t#e confidence to rene& our focu" in t#i" "ector. Our ;uality profe""ional team and our &or+9oriented dedication #a!e propelled u" to offer !alue9added corporate financial "er!ice" and act a" a profe""ional na!igator for long term gro&t# of our client"4 &#o include leading corporate4 8tate Do!ernment"4 foreign in"titutional in!e"tor"4 public and pri!ate "ector companie" and ban+"4 in Indian and global mar+et". (e #a!e al"o emerged a" a trailblaEer in t#e arena of relation"#ip"4 bot# at t#e cu"tomer and trade le!el" becau"e of our un"#a+able integrity4 "eamle"" "er!ice and inno!ati!e "olution" t#at are tuned to meet !aried need". Our team of committed indu"try "peciali"t"4 #a!ing e:ten"i!e e:perience in capital mar+et"4 furt#er nurture" t#i" relation"#ip. Our financial ad!ice and a""i"tance in re"tructuring4 di!e"titure"4 ac;ui"ition"4 demerger"4 "pin9off"4 oint !enture"4 pri!atiEation and ta+eo!er defen"e mec#ani"m" #a!e ele!ated our relation"#ip &it# t#e client to one ba"ed on un"#a+able tru"t and confidence.

P a g e | 11

MUTUAL FUND SERVICES I ISSUE RE/ISTRY I COR%ORATE S0ARE0OLDERS SERVICES

(e #a!e tra!er"ed &ide "pace" to tie up &it# t#e &orld<" large"t tran"fer agent4 t#e leading 0u"tralian company4 Computer "#are >imited. T#e company t#at "er!ice" more t#an *) million "#are#older" acro"" *,,, corporate client" and ma+e" it" pre"ence felt in o!er 12 countrie" acro"" ) continent" #a" entered into a ),9), oint !enture &it# u".

(it# our management team completely tran"ferred to t#i" ne& entity4 &e &ill aim to enric# t#e financial "er!ice" indu"try t#an before. T#e future #old" ne& arena" of client "er!icing and contemporary and rele!ant tec#nologie" a" &e are geared to deli!er better !alue and fo"ter bigger in!e"tment" in t#e bu"ine"". T#e &orld&ide net&or+ of Computer "#are &ill #old u" in good "tead a" &e e:pect to adopt international "tandard" in addition to le!eraging t#e be"t of tec#nologie" from around t#e &orld. @:cellence #a" to be t#e order of t#e day &#en t&o companie" &it# "uc# "imilar ideologie" of gro&t#4 !i"ion and competence4 get toget#er

MUTUAL FUND SERVICES

(e #a!e attained a po"ition of immen"e "trengt# a" a pro!ider of acro""9t#e9board tran"fer agency "er!ice" to 0%C"4 /i"tributor" and In!e"tor". Nearly ',K of t#e top9notc# 0%C" including pre"tigiou" client" li+e /eut"c#e 0%C and GTI "&ear by t#e ;uality and range of "er!ice" t#at &e offer. 2e"ide" pro!iding t#e entire bac+ office proce""ing4 &e pro!ide t#e lin+ bet&een !ariou" %utual .und" and t#e in!e"tor4 including "er!ice" to t#e di"tributor4 t#e prime c#annel in t#i" operation. (e #a!e been &it# t#e 0%C" e!ery "tep of t#e &ay4 #elping t#em "er!e t#eir in!e"tor" better

P a g e | 12 by offering t#em a di!er"e and cu"tomiEed range of "er!ice". T#e Mfir"t to mar+etO approac# t#at i" our ant#em #a" earned u" t#e reputation of an inno!ati!e "er!ice pro!ider &it# a !i"ionary bent of mind. Our "er!ice en#ancement" "uc# a" M5ar!y Con!erEO4 a full9fledged call center4 a top9line &eb"ite ?&&&.+ar!ymf".comB4 t#e Mm9in!e"torO and many more4 creating a gala:y of cu"tomer ad!antage".

ISSUE RE/ISTRY
In our !oyage to&ard" becoming t#e large"t tran"action9proce""ing #ou"e in t#e Indian Corporate "egment4 &e #a!e mobiliEed fund" for numerou" corporate4 5ar!y #a" emerged a" t#e large"t tran"action9proce""ing #ou"e for t#e Indian Corporate "ector. (it# an e:perience of #andling o!er *,, i""ue"4 5ar!y today4 #a" t#e ability to e:ecute !oluminou" tran"action" and #ard9core e:perti"e in tec#nology application" #a!e gained u" t#e No.1 "lot in t#e bu"ine"". 5ar!y i" t#e fir"t -egi"try Company to recei!e I8O $,,2 certification in India t#at "tand" te"timony to it" "tature. 5ar!y #a" t#e benefit of a good "ynergy bet&een depo"itorie" and regi"try t#at enable" fa"ter re"olution to related cu"tomer ;uerie". 0part from it" uni;ue in!e"tor "er!icing pre"ence in all t#e p#a"e" of a public I""ue4 it i" acti!ely coordinating &it# bot# t#e main depo"itorie" to de!elop "pecial model" to enable t#e cu"tomer to acce"" depo"itory ?N8/>4 C/8>B "er!ice" during an IPO. Our tru"t9&ort#y reputation4 competent manpo&er and #ig#9end tec#nology and infra"tructure are t#e "olid foundation" on &#ic# our "ucce"" i" built.

COR%ORATE S0ARE0OLDER SERVICES

5ar!y #a" been a cu"tomer centric company "ince it" inception. 5ar!y offer" a "ingle platform "er!icing multiple financial in"trument" in it" bid to offer complete financial "olution" to t#e !arying need" of bot# corporate and retail in!e"tor" &#ere an e:ten"i!e range of "er!ice" are pro!ided &it# great !olume9management capability.

P a g e | 13

Today4 5ar!y i" recogniEed a" a company t#at can e:ceed cu"tomer e:pectation" &#ic# i" t#e rea"on for t#e loyalty of cu"tomer" to&ard" 5ar!y for all #i" financial need". 0n opinion poll commi""ioned by HT#e %erc#ant 2an+er GpdateI and conducted by t#e reputed mar+et re"earc# agency4 %0-D re!ealed t#at 5ar!y &a" con"idered t#e H%o"t 0dmiredI in t#e regi"trar category among financial "er!ice" companie". (e #a!e gro&n from being a pure tran"action proce""ing bu"ine""4 to one of complete "#are#older "olution" KARVY /OL#AL SERVICES T#e "peciali"t 2u"ine"" Proce"" Out"ourcing unit of t#e 5ar!y Droup. T#e legacy of e:perti"e and e:perience in financial "er!ice" of t#e 5ar!y Droup "er!e" u" &ell a" &e enter t#e global arena &it# t#e confidence of being able to deli!er and deli!er &ell. Fere &e offer "e!eral deli!ery model" on t#e under"tanding t#at bu"ine"" need" are uni;ue and t#erefore only a cu"tomiEed "er!ice could po""ibly fit t#e bill. Our "er!ice matri: #a" permutation" and combination" t#at create "e!eral option" to c#oo"e from. 2e it in re9engineering and managing proce""e" or deli!ering ne& efficiencie"4 our "er!ice meet" up to t#e mo"t "tringent of international "tandard". Our out"ourcing model" are de"igned for t#e global cu"tomer and are bac+ed by "ound corporate and operation" p#ilo"op#ie"4 and domain e:perti"e. Pro!iding producti!ity impro!ement"4 operational co"t control4 co"t "a!ing"4 impro!ed accountability and a &#ole gamut of ot#er ad!antage". (e operate in t#e core mar+et "egment" t#at #a!e emerging re;uirement" for "pecialiEed "er!ice". Our &ide !ertical mar+et co!erage include" 2an+ing4 .inancial and In"urance 8er!ice" ?2.I8B4 -etail and %erc#andi"ing4 >ei"ure and @ntertainment4 @nergy and Gtility and Fealt#care.

P a g e | 1' Our #oriEontal offering" do u"tice to our "tance a" a compre#en"i!e 2PO unit and include a !ariety of "er!ice" in .inance and 0ccounting Out"ourcing Operation"4 Fuman -e"ource Out"ourcing Operation"4 -e"earc# and 0nalytic" Out"ourcing Operation" and In"urance 2ac+ Office Out"ourcing Operation".

0t 50-67 Commoditie"4 &e are focu"ed on ta+ing commoditie" trading to ne& dimen"ion" of reliability and profitability. (e #a!e made commoditie" trading4 an e""entially age9old practice4 into a "op#i"ticated and "cientific in!e"tment option. Fere &e enable trade in all good" and product" of agricultural and mineral origin t#at include lucrati!e commoditie" li+e gold and "il!er and popular item" li+e oil4 pul"e" and cotton t#roug# a &ell9"y"tematiEed trading platform. Our tec#nological and infra"tructural "trengt#" and e"pecially our "treet9"mart "+ill" ma+e u" an ideal bro+er. Our "er!ice matri: i" #oli"tic &it# a gamut of ad!antage"4 t#e fir"t and foremo"t being our legacy of #uman re"ource"4 tec#nology and infra"tructure t#at come" from being part of t#e 5ar!y Droup. Our &ide national net&or+4 "panning t#e lengt# and breadt# of India4 furt#er "upport" t#e"e ad!antage". -egular trading &or+"#op" and "eminar" are conducted to #one trading "trategie" to perfection. @!ery mo!e made i" a calculated one4 ba"ed on reliable re"earc# t#at i" con!erted into !aluable information t#roug# daily4 &ee+ly and mont#ly ne&"letter"4 call" and intraday alert". .urt#er4 per"onaliEed "er!ice i" pro!ided #ere by a

P a g e | 1) dedicated team committed to gi!ing #a""le9free "er!ice &#ile t#e bro+erage rate" offered are e:tremely.

KARVY INSURANCE #ROKIN/ %VT1 LTD 0t 5ar!y 2ro+ing P!t. >td.4 &e pro!ide bot# life and non9life in"urance product" to retail indi!idual"4 #ig# net9&ort# client" and corporate". (it# t#e opening up of t#e in"urance "ector and &it# a large number of pri!ate player" in t#e bu"ine""4 &e are in a po"ition to pro!ide tailor made policie" for different "egment" of cu"tomer". In our ourney to emerge a" a per"onal finance ad!i"or4 &e &ill be better po"itioned to le!erage our relation"#ip" &it# t#e product pro!ider" and place t#e re;uirement" of our cu"tomer" appropriately &it# t#e product pro!ider". (it# Indian mar+et" "eeing a "ea c#ange4 bot# in term" of in!e"tment pattern and attitude of in!e"tor"4 in"urance i" no more "een a" only a ta: "a!ing product but al"o a" an in!e"tment product. 2y "etting up a "eparate entity4 &e &ould be po"itioned to pro!ide t#e be"t of t#e product" a!ailable in t#i" bu"ine"" to our cu"tomer". Our &ide national net&or+4 "panning t#e lengt# and breadt# of India4 furt#er "upport" t#e"e ad!antage". .urt#er4 per"onaliEed "er!ice i" pro!ided #ere by a dedicated team committed in gi!ing #a""le9free "er!ice to t#e client".

P a g e | 16

AC0IEVEMENTS
0mong t#e top ) "toc+ bro+er" in India ?'K of N8@ !olume"B IndiaO" No. 1 -egi"trar 1 8ecuritie" Tran"fer 0gent" 0mong t#e to top 3 /epo"itory Participant" >arge"t Net&or+ of 2ranc#e" 1 2u"ine"" 0""ociate" I8O $,,2 certified operation" by /N6 0mong top 1, In!e"tment ban+er" >arge"t /i"tributor of .inancial Product" 0d udged a" one of t#e top ), IT u"e" in India by %I8 0"ia .ull .ledged IT dri!en operation"

P a g e | 1*

2UALITY %OLICY
To ac#ie!e and retain leader"#ip4 5ar!y "#all aim for complete cu"tomer "ati"faction4 by combining it" #uman and tec#nological re"ource"4 to pro!ide "uperior ;uality financial "er!ice". In t#e proce""4 5ar!y &ill "tri!e to e:ceed Cu"tomerO" e:pectation".

2UALITY O#3ECTIVES
0" per t#e 3uality Policy4 5ar!y &illP
2uild in9#ou"e proce""e" t#at &ill en"ure tran"parent and #armoniou" relation"#ip" &it# it" client" and in!e"tor" to pro!ide #ig# ;uality of "er!ice". @"tabli"# a partner relation"#ip &it# it" in!e"tor "er!ice agent" and !endor" t#at &ill #elp in +eeping up it" commitment" to t#e cu"tomer". Pro!ide #ig# ;uality of &or+ life for all it" employee" and e;uip t#em &it# ade;uate +no&ledge 1 "+ill" "o a" to re"pond to cu"tomerO" need". Continue to up#old t#e !alue" of #one"ty 1 integrity and "tri!e to e"tabli"# unparalleled "tandard" in bu"ine"" et#ic". G"e "tate9of9t#e art information tec#nology in de!eloping ne& and inno!ati!e financial product" and "er!ice" to meet t#e c#anging need" of in!e"tor" and client". 8tri!e to be a reliable "ource of !alue9added financial product" and "er!ice" and con"tantly guide t#e indi!idual" and in"titution" in ma+ing a udiciou" c#oice of "ame. 8tri!e to +eep all "ta+e9#older" ?"#are#older"4 client"4 in!e"tor"4 employee"4 "upplier" and regulatory aut#oritie"B proud and "ati"fied.

P a g e | 1=

INTRODUCTION
%utual fund" are financial intermediarie"4 &#ic# collect t#e "a!ing" of in!e"tor" and in!e"t t#em in a large and &ell9di!er"ified portfolio of "ecuritie" "uc# a" money mar+et in"trument"4 corporate and go!ernment bond" and e;uity "#are" of oint "toc+ companie". A 4& &al 5&nd is a '!!l !5 c!44!n 5&nds inves ed b( di55eren inves !rs. 6-! -ave n! c!n ac 6i - eac- ! -er1 %utual fund" are concei!ed a" in"titution" for pro!iding "mall in!e"tor" &it# a!enue" of in!e"tment" in t#e capital mar+et. 8ince "mall in!e"tor" generally do not #a!e ade;uate time4 +no&ledge4 e:perience and re"ource" for directly acce""ing t#e capital mar+et4 t#ey #a!e to rely on an intermediary4 &#ic# underta+e" informed in!e"tment deci"ion" and pro!ide" con"e;uential benefit" of profe""ional e:perti"e. T#e rai"on d<Qtre of mutual fund" i" t#eir ability to bring do&n t#e tran"action co"t". T#e ad!antage" for t#e in!e"tor" are reduction in ri"+4 e:pert profe""ional management4 di!er"ified portfolio"4 and li;uidity of in!e"tment and ta: benefit". 2y pooling t#eir a""et" t#roug# mutual fund"4 in!e"tor" ac#ie!e economie" of "cale. T#e intere"t" of t#e in!e"tor" are protected by t#e 8@2I4 &#ic# act" a" a &atc#dog. %utual fund" are go!erned by t#e 8@2I ?%utual .und"B -egulation"4 1$$3.

P a g e | 1$

MUTUAL FUND O%ERATIONS FLOW C0ART

T#e flo& c#art belo& de"cribe" broadly t#e &or+ing of a %utual .undP

P a g e | 2,

T0E /OAL OF MUTUAL FUND

T#e goal of a mutual fund i" to pro!ide an indi!idual to ma+e money. T#ere are "e!eral t#ou"and mutual fund" &it# different in!e"tment" "trategie" and goal" to c#o"en from.

P a g e | 21 C#oo"ing one can be o!er &#elming4 e!en t#oug# it need not be different mutual fund" #a!e different ri"+"4 &#ic# differ becau"e of t#e fund<" goal" fund manager4 and in!e"tment "tyle. T#e fund it"elf &ill "till increa"e in !alue4 and in t#at &ay you may al"o ma+e money t#erefore t#e !alue of "#are" you #old in mutual fund &ill increa"e in !alue &#en t#e #olding" increa"e" in !alue capital gain" and income or di!idend payment" are be"t rein!e"ted for younger in!e"tor" -etire" often "ee+ t#e income from di!idend di"tribution to augment t#eir income &it# rein!e"tment of di!idend" and capital di"tribution your money increa"e at an e!en greater rate. (#en you redeem your "#are" &#at you recei!e i" t#e !alue of t#e "#are.

ORGANISATION OF A MUTUAL FUND

T#ere are many entitie" in!ol!ed and t#e diagram belo& illu"trate" t#e organiEational "et up of a mutual fundP

P a g e | 22

#ACK/ROUND
FI8TO-7 0N/ 8T-GCTG-@ O. IN/I0N %GTG0> .GN/ IN/G8T-7

P a g e | 23 T#e mutual fund indu"try in India "tarted in 1$63 &it# t#e formation of Gnit Tru"t of India4 at t#e initiati!e of t#e Do!ernment of India and -e"er!e 2an+. T#e #i"tory of mutual fund" in India can be broadly di!ided into four di"tinct p#a"e"P Firs %-ase , 789:-;< Gnit Tru"t of India ?GTIB &a" e"tabli"#ed on 1$63 by an 0ct of Parliament. It &a" "et up by t#e -e"er!e 2an+ of India and functioned under t#e -egulatory and admini"trati!e control of t#e -e"er!e 2an+ of India. In 1$*= GTI &a" de9lin+ed from t#e -2I and t#e Indu"trial /e!elopment 2an+ of India ?I/2IB too+ o!er t#e regulatory and admini"trati!e control in place of -2I. T#e fir"t "c#eme launc#ed by GTI &a" Gnit 8c#eme 1$6'. 0t t#e end of 1$== GTI #ad -".64*,, crore" of a""et" under management. Sec!nd %-ase , 78;<-788+ )En r( !5 %&blic Sec !r F&nds* 1$=* mar+ed t#e entry of non9 GTI4 public "ector mutual fund" "et up by public "ector ban+" and >ife In"urance Corporation of India ?>ICB and Deneral In"urance Corporation of India ?DICB. 82I %utual .und &a" t#e fir"t non9 GTI %utual .und e"tabli"#ed in Lune 1$=* follo&ed by Canara ban+ %utual .und ?/ec =*B4 Pun ab National 2an+ %utual .und ?0ug =$B4 Indian 2an+ %utual .und ?No! =$B4 2an+ of India ?Lun $,B4 2an+ of 2aroda %utual .und ?Oct $2B. >IC e"tabli"#ed it" mutual fund in Lune 1$=$ &#ile DIC #ad "et up it" mutual fund in /ecember 1$$,. 0t t#e end of 1$$34 t#e mutual fund indu"try #ad a""et" under management of -".'*4 ,,' crore". T-ird %-ase , 788+-=>>+ )En r( !5 %riva e Sec !r F&nds* (it# t#e entry of pri!ate "ector fund" in 1$$34 a ne& era "tarted in t#e Indian mutual fund indu"try4 gi!ing t#e Indian in!e"tor" a &ider c#oice of fund familie". 0l"o4 1$$3 &a" t#e year in &#ic# t#e fir"t %utual .und -egulation" came into being4 under &#ic# all mutual fund"4 e:cept GTI &ere to be regi"tered and go!erned. T#e er"t&#ile 5ot#ari Pioneer

P a g e | 2' ?no& merged &it# .ran+lin TempletonB &a" t#e fir"t pri!ate "ector mutual fund regi"tered in Luly 1$$3. T#e 1$$3 8@2I ?%utual .undB -egulation" &ere "ub"tituted by a more compre#en"i!e and re!i"ed %utual .und -egulation" in 1$$6. T#e indu"try no& function" under t#e 8@2I ?%utual .undB -egulation" 1$$6. T#e number of mutual fund #ou"e" &ent on increa"ing4 &it# many foreign mutual fund" "etting up fund" in India and al"o t#e indu"try #a" &itne""ed "e!eral merger" and ac;ui"ition". 0" at t#e end of Lanuary 2,,34 t#ere &ere 33 mutual fund" &it# total a""et" of -".14 214=,) crore". T#e Gnit Tru"t of India &it# -".''4 )'1 crore" of a""et" under management &a" &ay a#ead of ot#er mutual fund". F!&r - %-ase , since Febr&ar( =>>+ In .ebruary 2,,34 follo&ing t#e repeal of t#e Gnit Tru"t of India 0ct 1$63 GTI &a" bifurcated into t&o "eparate entitie". One i" t#e 8pecified Gnderta+ing of t#e Gnit Tru"t of India &it# a""et" under management of -".2$4 =3) crore" a" at t#e end of Lanuary 2,,34 repre"enting broadly4 t#e a""et" of G8 6' "c#eme4 a""ured return and certain ot#er "c#eme". T#e 8pecified Gnderta+ing of Gnit Tru"t of India4 functioning under an admini"trator and under t#e rule" framed by Do!ernment of India and doe" not come under t#e pur!ie& of t#e %utual .und -egulation". T#e "econd i" t#e GTI %utual .und >td4 "pon"ored by 82I4 PN24 2O2 and >IC. It i" regi"tered &it# 8@2I and function" under t#e %utual .und -egulation". (it# t#e bifurcation of t#e er"t&#ile GTI &#ic# #ad in %arc# 2,,, more t#an -".*64 ,,, crore" of a""et" under management and &it# t#e "etting up of a GTI %utual .und4 conforming to t#e 8@2I %utual .und -egulation"4and &it# recent merger" ta+ing place among different pri!ate "ector fund"4 t#e mutual fund indu"try #a" entered it" current p#a"e of con"olidation and gro&t#. 0" at t#e end of 8eptember4 2,,'4 t#ere &ere 2$ fund"4 &#ic# manage a""et" of -".1)31,= crore" under '21 "c#eme".

CLASSIFICATION OF MUTUAL FUND SC0EMES?

P a g e | 2) 0ny mutual fund #a" an ob ecti!e of earning income for t#e in!e"tor" andC or getting increa"ed !alue of t#eir in!e"tment". To ac#ie!e t#e"e ob ecti!e" mutual fund" adopt different "trategie" and accordingly offer different "c#eme" of in!e"tment". On t#i" ba"i" t#e "imple"t &ay to categoriEe "c#eme" &ould be to group t#e"e into t&o broad cla""ification"P O%ERATIONAL CLASSIFICATION AND %ORTFOLIO CLASSIFICATION1 Operational classification #ig#lig#t" t#e t&o main type" of "c#eme"4 i.e.4 open9ended and clo"e ended &#ic# are offered by t#e mutual fund". Portfolio classification pro ect" t#e combination of in!e"tment in"trument" and in!e"tment a!enue" a!ailable to mutual fund" to manage t#eir fund". 0ny portfolio "c#eme can be eit#er open ended or clo"e ended. O'era i!nal Classi5ica i!n? (A) O'en Ended Sc-e4es? 0" t#e name implie" t#e "iEe of t#e "c#eme ?.undB i" open N i.e.4 not "pecified or pre9determined. @ntry to t#e fund i" al&ay" open to t#e in!e"tor &#o can "ub"cribe at any time. 8uc# fund "tand" ready to buy or "ell it" "ecuritie" at any time. It implie" t#at t#e capitaliEation of t#e fund i" con"tantly c#anging a" in!e"tor" "ell or buy t#eir "#are". .urt#er4 t#e "#are" or unit" are normally not traded on t#e "toc+ e:c#ange but are repurc#a"ed by t#e fund at announced rate". Open9ended "c#eme" #a!e comparati!ely better li;uidity de"pite t#e fact t#at t#e"e are not li"ted. T#e rea"on i" t#at in!e"tor" can any time approac# mutual fund for "ale of "uc# unit". No intermediarie" are re;uired. %oreo!er4 t#e realiEable amount i" certain "ince repurc#a"e i" at a price ba"ed on declared net a""et !alue ?N06B. No minute to minute fluctuation" in rate" #aunt t#e in!e"tor". T#e portfolio mi: of "uc# "c#eme" #a" to be in!e"tment"4 &#ic# are acti!ely traded in t#e mar+et. Ot#er&i"e4 it &ill not be po""ible to calculate N06. T#i" i" t#e rea"on t#at generally open9ended

P a g e | 26 "c#eme" are e;uity ba"ed. %oreo!er4 de"iring fre;uently traded "ecuritie"4 open9ended "c#eme" #ardly #a!e in t#eir portfolio "#are" of comparati!ely ne& and "maller companie" "ince t#e"e are not generally traded. In "uc# fund"4 option to rein!e"t it" di!idend i" al"o a!ailable. 8ince t#ere i" al&ay" a po""ibility of &it#dra&al"4 t#e management of "uc# fund" become" more tediou" a" manager" #a!e to &or+ from cri"i" to cri"i". Cri"i" may be on t&o front"4 one i"4 t#at une:pected &it#dra&al" re;uire fund" to maintain a #ig# le!el of ca"# a!ailable e!ery time implying t#ereby idle ca"#. .und manager" #a!e to face ;ue"tion" li+e M&#at to "ell<. Fe could !ery &ell #a!e to "ell #i" mo"t li;uid a""et". 8econd4 by !irtue of t#i" "ituation "uc# fund" may fail to grab fa!orable opportunitie". .urt#er4 to matc# ;uic+ ca"# payment"4 fund" cannot #a!e matc#ing realiEation from t#eir portfolio due to intricacie" of t#e "toc+ mar+et. T#u"4 "ucce"" of t#e open9ended "c#eme" to a great e:tent depend" on t#e efficiency of t#e capital mar+et and t#e "election and ;uality of t#e portfolio. (B) Cl!se Ended Sc-e4es: 8uc# "c#eme" #a!e a definite period after &#ic# t#eir "#are"C unit" are redeemed. Gnli+e open9ended fund"4 t#e"e fund" #a!e fi:ed capitaliEation4 i.e.4 t#eir corpu" normally doe" not c#ange t#roug#out it" life period. Clo"e ended fund unit" trade among t#e in!e"tor" in t#e "econdary mar+et "ince t#e"e are to be ;uoted on t#e "toc+ e:c#ange". T#eir price i" determined on t#e ba"i" of demand and "upply in t#e mar+et. T#eir li;uidity depend" on t#e efficiency and under"tanding of t#e engaged bro+er. T#eir price i" free to de!iate from N064 i.e.4 t#ere i" e!ery po""ibility t#at t#e mar+et price may be abo!e or belo& it" N06. If one ta+e" into account t#e i""ue e:pen"e"4 conceptually clo"e ended fund unit" cannot be traded at a premium or o!er N06 becau"e t#e price of a pac+age of in!e"tment"4 i.e.4 cannot e:ceed t#e "um of t#e price" of t#e in!e"tment" con"tituting t#e pac+age. (#ate!er premium e:i"t" t#at may e:i"t only on account of "peculati!e acti!itie". In India a" per 8@2I ?%.B -egulation" e!ery mutual fund i" free to launc# any or bot# type" of "c#eme".

P a g e | 2*

%!r 5!li! Classi5ica i!n !5 F&nds? .ollo&ing are t#e portfolio cla""ification of fund"4 &#ic# may be offered. T#i" cla""ification may be on t#e ba"i" of ?0B -eturn4 ?2B In!e"tment Pattern4 ?CB 8pecialiEed "ector of in!e"tment4 ?/B >e!erage and ?@B Ot#er". )A* Re &rn based classi5ica i!n? To meet t#e di!er"ified need" of t#e in!e"tor"4 t#e mutual fund "c#eme" are made to en oy a good return. -eturn" e:pected are in form of regular di!idend" or capital appreciation or a combination of t#e"e t&o. 71 Income Funds: .or in!e"tor" &#o are more curiou" for return"4 Income fund" are floated. T#eir ob ecti!e i" to ma:imiEe current income. 8uc# fund" di"tribute periodically t#e income earned by t#em. T#e"e fund" can furt#er be "pitted up into categorie"P t#o"e t#at "tre"" con"tant income at relati!ely lo& ri"+ and t#o"e t#at attempt to ac#ie!e ma:imum income po""ible4 e!en &it# t#e u"e of le!erage. Ob!iou"ly4 t#e #ig#er t#e e:pected return"4 t#e #ig#er t#e potential ri"+ of t#e in!e"tment. =1 Growth Funds: 8uc# fund" aim to ac#ie!e increa"e in t#e !alue of t#e underlying in!e"tment" t#roug# capital appreciation. 8uc# fund" in!e"t in gro&t# oriented "ecuritie" &#ic# can appreciate t#roug# t#e e:pan"ion production facilitie" in long run. 0n in!e"tor &#o "elect" "uc# fund" "#ould be able to a""ume a #ig#er t#an normal degree of ri"+. +1 C!nserva ive F&nds? T#e fund &it# a p#ilo"op#y of Hall t#ing" to allI i""ue offer document announcing ob ecti!e" a"P ?iB To pro!ide a rea"onable rate of return4 ?iiB To protect t#e !alue of in!e"tment and4 ?iiiB To ac#ie!e capital appreciation con"i"tent &it# t#e fulfillment of t#e fir"t t&o ob ecti!e". 8uc# fund" &#ic# offer a blend of immediate a!erage return and rea"onable capital appreciation are +no&n a" Hmiddle of t#e roadI fund". 8uc# fund" di!ide t#eir portfolio in common "toc+" and bond" in a

P a g e | 2= &ay to ac#ie!e t#e de"ired ob ecti!e". 8uc# fund" #a!e been mo"t popular and appeal to t#e in!e"tor" &#o &ant bot# gro&t# and income. )#* Inves 4en #ased Classi5ica i!n? %utual fund" may al"o be cla""ified on t#e ba"i" of "ecuritie" in &#ic# t#ey in!e"t. 2a"ically4 it i" renaming t#e "ubcategorie" of return ba"ed cla""ification. 71 Equity Fund: 8uc# fund"4 a" t#e name implie"4 in!e"t mo"t of t#eir in!e"tible "#are" in e;uity "#are" of companie" and underta+e t#e ri"+ a""ociated &it# t#e in!e"tment in e;uity "#are". 8uc# fund" are clearly e:pected to outdo ot#er fund" in ri"ing mar+et4 becau"e t#e"e #a!e almo"t all t#eir capital in e;uity. @;uity fund" again can be of different categorie" !arying from t#o"e t#at in!e"t e:clu"i!ely in #ig# ;uality Mblue c#ip companie" to t#o"e t#at in!e"t "olely in t#e ne&4 une"tabli"#ed companie". T#e "trengt# of t#e"e fund" i" t#e e:pected capital appreciation. Naturally4 t#ey #a!e a #ig#er degree of ri"+. =1 Bond Funds: "uc# fund" #a!e t#eir portfolio con"i"ted of bond"4 debenture"4 etc. t#i" type of fund i" e:pected to be !ery "ecure &it# a "teady income and little or no c#ance of capital appreciation. Ob!iou"ly ri"+ i" lo& in "uc# fund". In t#i" category &e may come acro"" t#e fund" called M>i;uid .und"< &#ic# "pecialiEe in in!e"ting "#ort9term money mar+et in"trument". T#e emp#a"i" i" on li;uidity and i" a""ociated &it# lo&er ri"+" and lo& return".

+1 Balanced Fund: T#e fund"4 &#ic# #a!e in t#eir portfolio a rea"onable mi: of e;uity and bond"4 are +no&n a" balanced fund". 8uc# fund" &ill put more emp#a"i" on e;uity "#are in!e"tment" &#en t#e outloo+ i" brig#t and &ill tend to "&itc# to debenture" &#en t#e future e:pected to be poor for "#are".

P a g e | 2$

)#* Sec !r #ased F&nds? T#ere are number of fund" t#at in!e"t in a "pecified "ector of economy. (#ile "uc# fund" do #a!e t#e di"ad!antage of lo& di!er"ification by putting all t#eir all egg" in one ba"+et4 t#e policy of "pecialiEing #a" t#e ad!antage of de!eloping in t#e fund manager" an inten"i!e +no&ledge of t#e "pecific "ector in &#ic# t#ey are in!e"ting. 8ector ba"ed fund" are aggre""i!e gro&t# fund" &#ic# ma+e in!e"tment" on t#e ba"i" of a""e""ed brig#t future for a particular "ector. T#e"e fund" are c#aracteriEed by #ig# !iability4 #ence more ri"+y.

MUTUAL FUNDS FOR W0OM@

T#e"e fund" can "ur!i!e and t#ri!e only if t#ey can li!e up to t#e #ope" and tru"t" of t#eir indi!idual member". T#e"e #ope" and tru"t" ec#o t#e peculiaritie" &#ic# "upport t#e

P a g e | 3, emergence and gro&t# of "uc# in"ecurity of "uc# in!e"tor" &#o come to t#e re"cue of "uc# in!e"tor" &#o face follo&ing con"traint" &#ile ma+ing direct in!e"tment"P aB >imited re"ource" in t#e #and" of in!e"tor" ;uite often ta+e t#em a&ay from "toc+ mar+et tran"action". bB >ac+ of fund" forbid" in!e"tor" to #a!e a balanced and di!er"ified portfolio. cB >ac+ of profe""ional +no&ledge a""ociated &it# in!e"tment bu"ine"" unable in!e"tor" to operate gainfully in t#e mar+et. 8mall in!e"tor" can #ardly afford to #a!e e:9pen"i!e in!e"tment con"ultation". dB To buy "#are"4 in!e"tor" #a!e to engage "#are bro+er" &#o are t#e member" of "toc+ e:c#ange and #a!e to pay t#eir bro+erage. eB T#ey #ardly #a!e acce"" to price "en"iti!e information in time. fB It i" difficult for t#em to +no& t#e de!elopment ta+ing place in "#are mar+et and corporate "ector. gB .irm allotment" are not po""ible for "mall in!e"tor" on &#en t#ere i" a trend of o!er "ub"cription to public i""ue".

W0Y MUTUAL FUNDS@

%utual .und" are becoming a !ery popular form of in!e"tment c#aracteriEed by many ad!antage" t#at t#ey "#are &it# ot#er form" of in!e"tment" and &#at t#ey po""e""

P a g e | 31 uni;uely t#em"el!e". T#e primary ob ecti!e" of an in!e"tment propo"al &ould fit into one or combination of t#e t&o broad categorie"4 i.e.4 Income and Capital gain". Fo& mutual fund i" e:pected to be o!er and abo!e an indi!idual in ac#ie!ing t#e t&o "aid ob ecti!e"4 i" &#at attract" in!e"tor" to opt for mutual fund". %utual fund route offer" "e!eral important ad!antage". Diversification: 0 pro!en principle of "ound in!e"tment i" t#at of di!er"ification4 &#ic# i" t#e idea of not putting all your egg" in one ba"+et. 2y in!e"ting in many companie" t#e mutual fund" can protect t#em"el!e" from une:pected drop in !alue" of "ome "#are". T#e "mall in!e"tor" can ac#ie!e &ide di!er"ification on #i" o&n becau"e of many rea"on"4 mainly fund" at #i" di"po"al. %utual fund" on t#e ot#er #and4 pool fund" of la+#" of in!e"tor" and t#u" can participate in a large ba"+et of "#are" of many different companie". %a ority of people con"ider /i!er"ification a" t#e ma or "trengt# of mutual fund". Expertise upervision: %a+ing in!e"tment" i" not a full time a""ignment of in!e"tor". 8o t#ey #ardly #a!e a profe""ional attitude to&ard" t#eir in!e"tment. (#en in!e"tor" buy mutual fund "c#eme4 an e""ential benefit one ac;uire" i" e:pert management of t#e money #e put" in t#e fund. T#e profe""ional fund manager" &#o "uper!i"e fund<" portfolio ta+e de"irable deci"ion" !iE.4 &#at "crip<" are to be boug#t4 &#at in!e"tment" are to be "old and more appropriate deci"ion a" to timing" of "uc# buy and "ell. T#ey #a!e e:ten"i!e re"earc# facilitie" at t#eir di"po"al4 can "pend full time to in!e"tigate and can gi!e t#e fund a con"tant "uper!i"ion. T#e performance of mutual fund "c#eme"4 of cour"e4 depend" on t#e ;uality of fund manager" employed.
0. !iquidity of Investment: 0 di"tinct ad!antage of a mutual fund o!er ot#er

in!e"tment" i" t#at t#ere i" al&ay" a mar+et for it" unitC "#are". %oreo!er4 8ecuritie" and @:c#ange 2oard of India ?8@2IB re;uire" t#e mutual fund" in India #a!e to en"ure li;uidity. %utual fund" unit" can eit#er be "old in t#e "#are mar+et a" 8@2I #a" made it obligatory for clo"ed9ended "c#eme" to li"t t#em"el!e" on "toc+ e:c#ange". .or open9ended "c#eme" in!e"tor" can al&ay" approac# t#e fund

P a g e | 32 for repurc#a"e at net a""et !alue ?N06B of t#e "c#eme. 8uc# repurc#a"e price and N06 i" ad!erti"ed in ne&"paper for t#e con!enience of in!e"tor".
2. "educed ris#s: -i"+ in in!e"tment i" a" to reco!ery of t#e principal amount and a"

to return on it. %utual fund in!e"tment" on bot# front" pro!ide a comfortable "ituation for in!e"tor". T#e e:pert "uper!i"ion4 di!er"ification and li;uidity of unit" en"ured in mutual fund" reduce" t#e ri"+". In!e"tor" are no longer e:pected to come to grief by falling prey to mi"leading and moti!ating M#eadline< lead" and tip"4 if t#ey in!e"t in mutual fund".

C.

afety of Investment: 2e"ide" depending on t#e e:pert "uper!i"ion of fund manager"4 t#e legi"lation in a country ?li+e 8@2I in IndiaB al"o pro!ide" for t#e "afety of in!e"tment". %utual fund" #a!e to broadly follo& t#e laid do&n pro!i"ion" for t#eir regulation"4 8@2I act" a" a &atc#dog and attempt" &#ole #eatedly to "afeguard in!e"tor<" intere"t".

/.

$ax

helter: /epending on t#e "c#eme of mutual fund"4 ta: "#elter i" al"o

a!ailable. 0" per t#e Gnion 2udget92,,34 income earned t#roug# di!idend" from mutual fund" i" 1,,K ta: free at t#e #and" of t#e in!e"tor".

@. %inimi&e Operatin' (osts: %utual fund" #a!ing large in!i"ible fund" at t#eir

di"po"al a!ail economie" of "cale. T#e bro+erage fee or trading commi""ion may be reduced "ub"tantially. T#e reduced operating co"t" ob!iou"ly increa"e t#e income a!ailable for in!e"tor". In!e"ting in "ecuritie" t#roug# mutual fund" #a" many ad!antage" li+e N option to rein!e"t di!idend"4 "trong po""ibility of capital appreciation4 regular return"4 etc. %utual fund" are al"o rele!ant in national intere"t. T#e te"t of t#eir economic efficiency a" financial intermediary lie" in t#e e:tent to &#ic# t#ey are able to mobiliEe additional "a!ing" and c#anneling to more producti!e "ector" of t#e economy.

P a g e | 33

T('es !5 Re ail Inves !rs

P a g e | 3' T#e @T "ur!ey on retail e;uity in!e"tor" in t#e "econdary mar+et #a" identified different categorie" of in!e"tor" ba"ed on t#eir c#aracteri"tic". %any ;ue"tion" are rai"ed about t#e be#a!ior" of t#e "mall in!e"tor under different circum"tance". T#e an"&er to many of t#e"e ;ue"tion" and "imilar ot#er" i" not difficult to interpret once &e identify t#e different type" of retail in!e"tor" in t#e "toc+ mar+et". T#e "ur!ey "#o&" t#at t#ere are fi!e different +ind" of retail in!e"tor"P Mintellectual"<4 Mca!alier"<4 Mreacti!i"t"<4 Mopportuni"t"<4 and Mgambler"<. T#i" cla""ification i" ba"ed on t#e attitude" of in!e"tor" to&ard" "econdary mar+et in!e"tment". >et<" e:plain eac# type of in!e"tor and under"tand t#eir in!e"tment p"yc#e and be#a!ioral pattern".

INTELLECTUALS? T#i" retail in!e"tor group form" around 1*K of t#e total retail in!e"tment cla"". T#ey are t#e intelligent in!e"tor" &#o follo& an intelligent4 indi!iduali"t approac# to in!e"tment planning and a &ell9defined and deliberate "trategy for "toc+ in!e"tment. T#e"e in!e"tor" are "elf reliant good "toc+ pic+er" and try to monetiEe mar+et +no&ledge. Di!ing proof of t#eir intelligence4 t#ey con"ider lo&9ri"+J lo&Ngain guaranteed return a!enue" a" pa""R. 0l"o4 t#ey belie!e in and &or+ to&ard" a &ell9planned. 0""et allocation and "ee+ t#e rig#t mi: of "tability and reliability of return". T#e Mintellectual"< are unaffected by "#ortNterm fluctuation" and prefer longNterm in!e"tment". %oreo!er4 t#ey are di"ciplined enoug# to ob"er!e profit target" &#ic# t#ey #a!e "et for t#em"el!e". 0nd a" t#ey in!e"t for t#e long term4 t#ey are not concerned &it# "#ort term lo""e". T#ey manager t#eir money t#em"el!e" and under"tand t#e indu"tryC"ector before in!e"ting.

CAVALIERS?

P a g e | 3) 0" #ig# a" '$K of t#e "mall retail e;uity in!e"tor" are Mca!alier"<. T#ey are t#o"e &#o #a!e lo"t money in Mfly9by Nnig#t M"c#eme". T#erefore4 muc# of t#eir in!e"tment" are dri!en by t#e de"ire to reco!er pa"t lo""e" and ma+e profit" in t#e future. 0" "uc#4 t#ey in!e"t aggre""i!ely into e;uitie"4 mo"tly in !olatile "ector" in order to ma+e big gain". Fo&e!er4 t#ey &ill al"o in!e"t in ./" and in"urance a" a precautionary mea"ure. T#ey get tempted to "peculate in t#e "econdary mar+et and once in a &#ile4 t#ey actually "peculate but &it# "maller amount". T#e ca!alier" try to gat#er all a!ailable information and compare it &it# opinion" from e:pert" in t#e media4 but &ill tru"t t#eir o&n udgment before ma+ing deci"ion". REACTIVISTS? 0bout )K of t#e retail e;uity in!e"tor" fall under t#i" category. T#e"e in!e"tor" ba"ically "#ort term in!e"tor"4 are impul"i!e info addict" &#o are !ulnerable to e:ternal influence" and a" "uc#4 t#ey #a!e no "pecific in!e"tment pattern"4 T#ey belie!e t#at dynamic and ad #oc in!e"tment" &ill re"ult in better profit" and are prompted to act on popular opinion rat#er t#an "y"tematic planning. 0" t#ey lac+ in confidence4 e:perience and e:perti"e4 t#ey con"tantly rely on ad!ice from in t#e +no& people "uc# a" bro+er" and analy"t". T#ey are e:tremely an:iou" about price fluctuation" or "#ort9term decline". T#ey are !ery "+eptical and belie!e t#at "mall decline" can lead to larger lo""e" if not reacted upon immediately. T#erefore4 t#e reacti!i"t" con"tantly "ee+ ne& information about "toc+" in &#ic# t#ey are currently in!e"ted in4 to en"ure a feeling of "ecurity. %oreo!er4 t#eir in!e"tment" apart from e;uitie" are "olely for ta:9"a!ing purpo"e". O%%ORTUNISTS? T#i" cla"" of in!e"tor" account for 1,K of t#e retail e;uity in!e"tor uni!er"e. T#i" category i" defen"i!ely pe""imi"tic and prefer" to ta+e only familiar ri"+". 0" t#ey #a!e a lo& ri"+ tolerance4 t#ey are &ary of !olatility in t#e e;uity mar+et. T#ey in!e"t into e;uitie" by imitating larger trend" rat#er t#an &it# t#eir indi!idual analy"i" and con"ider e;uity in!e"tment a" a gamble. T#ey &ant to be in t#e blac+ all t#e time and a" "uc#4 prefer popular "toc+" &it# immediate profit potential. Opportuni"t" need po"iti!e price mo!ement" to encourage t#eir in!e"tment" into e;uitie" and t#ey &ill not #unt for

P a g e | 36 bargain" of in!e"t on price decline". 2ut before in!e"ting into e;uitie". T#ey prefer to build a critical ma"" of fi:ed income in"trument" a" t#ey find fi:ed income option" a rea""uring &ay of "afe bet". T#e opportuni"t"< c#oice of in!e"tment" a" t#ey find fi:ed income option" a rea""uring &ay of "afe bet". T#e opportuni"t<" c#oice of in!e"tment i" bia"ed to&ard" &ell +no&n and pre!iou"ly o&ned "ecuritie"4 including @;uitie". T#i" in!e"tor cla"" i" &ary of in!e"ting into e;uitie" &#en t#e mar+et #a" mo!ed up too Fig# too "oon. 8o4 if you #a!e not in!e"ted in t#e current mar+et4 you are probably an MOpportuni"t<. /AM#LERS? 1$K t#e retail in!e"tor population i" made up of not actual in!e"tor". 2ut gambler".< T#ey are t#e typical t#rill "ee+ing trader" &#o lin+ profitability to per"onal ac#ie!ement. T#ey e:periment a lot4 mo"tly dri!en by in"tinct and "elf confidenceJ a" "uc# t#eir "toc+ "election i" more a random e:erci"e t#at lac+" rationale. T#i" cla"" percei!e" all "ecuritie" a" tradable commoditie" to be boug#t and "old in t#e "#ort term. Fo&e!er4 t#ey +no& completely about t#e ri"+ factor" and t#erefore4 #a!e a tendency to in!e"t only a" muc# a" t#ey are &illing to lo"e. 0" a part4 of t#e game and t#i" doe" not act a" a #indrance for future in!e"tment". T#ey do not tru"t bro+er"4 but &ill "ecretly !erify t#eir "ugge"tion" for fear of mi""ing an opportunity. T#ey a"certain fair !alue of "toc+" on gut feeling rat#er t#an any financial analy"i" and u"e "udden do&n&ard fluctuation" a" buying opportunitie".

MARKETIN/ STRATE/IES ADO%TED #Y T0E MUTUAL FUNDS

P a g e | 3*

T#e pre"ent mar+eting "trategie" of mutual fund" can be di!ided into t&o main #eading"P A Direc 4ar"e in$ A Sellin$ -r!&$- in er4ediaries1 A 3!in Calls

Direc Mar"e in$? T#i" con"titute" 2, percent of t#e total "ale" of mutual fund". 8ome of t#e important tool" u"ed in t#i" type of "elling areP Personal ellin': In t#i" ca"e t#e cu"tomer "upport officer or -elation"#ip %anager of t#e fund at a particular branc# ta+e" appointment from t#e potential pro"pect. Once t#e appointment i" fi:ed4 t#e branc# officer al"o called 2u"ine"" /e!elopment 0""ociate ?2/0B in "ome fund" t#en meet" t#e pro"pect and gi!e" #im all detail" about t#e !ariou" "c#eme" being offered by #i" fund. T#e con!er"ion rate in t#i" mode of "elling i" in bet&een 3,K 9 ',K. $elemar#etin': In t#i" ca"e t#e emp#a"i" i" to inform t#e people about t#e fund. T#e name" and p#one number" of t#e people are pic+ed at random from telep#one directory. 8ome fund #ou"e" #a!e t#eir databa"e of in!e"tor" and t#ey cro"" "ell t#eir ot#er product". 8ometime" people belonging to a particular profe""ion are al"o contacted t#roug# p#one and are t#en informed about t#e fund. Denerally t#e con!er"ion rate in t#i" form of mar+eting i" 1)K 9 2,K. Direct mail: T#i" one of t#e mo"t common met#od follo&ed by all mutual fund". 0ddre""e" of people are pic+ed at random from telep#one directory4 bu"ine"" directory4 profe""ional directory etc. T#e cu"tomer "upport officer ?C8OB t#en mail" t#e literature of t#e "c#eme" offered by t#e fund. T#e follo& up "tart" after 3 N ' day" of mailing t#e literature. T#e C8O call" on t#e people to &#om t#e literature &a" mailed. 0n"&er" t#eir

P a g e | 3= ;uerie" and i" generally "ucce""ful in ta+ing appointment" &it# t#o"e people. It i" t#en t#e ob of 2/0 to try #i" be"t to con!ert t#at pro"pect into a cu"tomer. )dvertisements in newspapers and ma'a&ines: T#e fund" regularly ad!erti"e in bu"ine"" ne&"paper" and magaEine" be"ide" in leading national dailie". T#e purpo"e to +eep in!e"tor" a&are about t#e "c#eme" offered by t#e fund and t#eir performance in recent pa"t. 0d!erti"ement in T6C.% C#annelP T#e fund" are aggre""i!ely gi!ing t#eir ad!erti"ement" in T6 and .% C#annel" to promote t#eir fund". *oardin's and Banners: In t#i" ca"e t#e #oarding" and banner" of t#e fund are put at important location" of t#e city &#ere t#e mo!ement of t#e people i" !ery #ig#. T#e #oarding and banner generally contain" information eit#er about one particular "c#eme or brief information about all "c#eme" of fund. Sellin$ -r!&$- in er4ediaries? Intermediarie" contribute to&ard" =,K of t#e total "ale" of mutual fund". T#e"e are t#e peopleC di"tributor" &#o are in direct touc# &it# t#e in!e"tor". T#ey perform an important role in attracting ne& cu"tomer". %o"t of t#e"e intermediarie" are al"o in!ol!ed in "elling "#are" and ot#er in!e"tment in"trument". T#ey do a commendable ob in con!incing in!e"tor" to in!e"t in mutual fund". 0 lot depend" on t#e after "ale "er!ice" offered by t#e intermediary to t#e cu"tomer. Cu"tomer" prefer to &or+ &it# t#o"e intermediarie" &#o gi!e t#em rig#t information about t#e fund and +eep t#em abrea"t &it# t#e late"t c#ange" ta+ing place in t#e mar+et e"pecially if t#ey #a!e any bearing on t#e fund in &#ic# t#ey #a!e in!e"ted. "e'ular %eetin's with distri+utors: %o"t of t#e fund" conduct mont#lyCbi9mont#ly meeting" &it# t#eir di"tributor". T#e ob ecti!e i" to #ear t#eir complaint" regarding "er!ice a"pect" from fund" "ide and ot#er ;uerie" related to t#e mar+et "ituation. 8ometime"4 "pecial training programme" are al"o conducted for t#e ne& agent"C di"tributor". Training in!ol!e" gi!ing detail" about t#e product" of t#e fund4 t#eir pre"ent

P a g e | 3$ performance in t#e mar+et4 &#at t#e competitor" are doing and &#at t#ey can do to increa"e t#e "ale" of t#e fund. 3!in Calls? T#i" i" generally done &#en t#e pro"pect "eem" to be a #ig# net &ort# in!e"tor. T#e 2/0 and t#e agent ?&#o i" located clo"e to t#e FNI<" re"idence or area of operationB toget#er !i"it t#e pro"pect and brief #im about t#e fund. T#e con!er"ion rate i" !ery #ig# in t#i" "ituation4 generally4 around 6,K. 2ot# t#e fund and t#e agent pro!ide e!en after "ale "er!ice" in t#i" particular ca"e. Mee in$s 6i - 0NIBs? T#i" i" a "pecial feature of all t#e fund". (#ene!er a top official !i"it" a particular branc# office4 #e de!ote" at lea"t one to t&o #our" in meeting &it# t#e FNI<" of t#at particular area. T#i" generally de!elop" a fait# among t#e FNI<" to&ard" t#e fund.

P a g e | ', MARKETIN/ OF FUNDS? C0ALLEN/ES AND O%%ORTUNITIES (#en &e con"ider mar+eting4 &e #a!e to "ee t#e i""ue" in totality4 becau"e &e cannot udge an elep#ant by it" trun+ or by it" tail but &e #a!e to "ee it in it" totality. (#en &e "ay mar+eting of mutual fund"4 it mean"4 include" and encompa""e" t#e follo&ing a"pect"P Assessin$ !5 inves !rs needs and 4ar"e researc-C Res'!ndin$ ! inves !rs needsC %r!d&c desi$nin$C S &d(in$ -e 4acr! envir!n4en C Ti4in$ !5 -e la&nc- !5 -e 'r!d&c C C-!!sin$ -e dis rib& i!n ne 6!r"C FinaliDin$ s ra e$ies 5!r '&blici ( and adver ise4en C %re'arin$ !55er d!c&4en s and ! -er li era &reC /e in$ 5eedbac" ab!& salesC S &d(in$ 'er5!r4ance indica !rs ab!& 5&nd 'er5!r4ance li"e NAVC Sendin$ cer i5ica es in i4e and ! -er a5 er sales ac ivi iesC 0!n!rin$ -e c!44i 4en s 4ade 5!r rede4' i!ns and re'&rc-aseC %a(in$ dividends and ! -er en i le4en sC Crea in$ '!si ive i4a$e ab!& -e 5&nd and c-an$in$ -e na &re !5 -e 4ar"e i sel51 T#e abo!e are t#e a"pect" of mar+eting of mutual fund"4 in totality. @!en if t#ere i" a "ingle &ea+9lin+ among t#e factor" &#ic# are mentioned abo!e4 no mutual fund can "ucce""fully mar+et it" fund". Widenin$. #r!adenin$ and Dee'enin$ -e Mar"e s T#ere are certain i""ue" t#at are directly lin+ed &it# t#e mar+eting of mutual fund"4 t#e fir"t of &#ic# i" &idening4 broadening and deepening of t#e mar+et for t#e mutual fund

P a g e | '1 product". Con"ider t#e geograp#ical "pread of t#e in!e"tor" in t#e mutual fund indu"try. 0lmo"t =,K of t#e fund" are mobiliEed from le"" t#an 1, center" in t#e country. In fact t#ere are only around 3) center" in t#e country4 &#ic# account for almo"t $)K of t#e fund" mobiliEed. Con"idering t#e !a"t nature of t#i" country4 t#e fir"t priority i" t#at t#e geograp#ic "pread #a" to be &idened and t#e mar+et #a" to be deepened. 8econdly4 t#e mutual fund" mu"t try to "pread t#eir &ing" not only &it#in t#e country4 but al"o out"ide t#e country. A1 Mar"e s in R&ral and Se4i-Urban Areas T#ere e:i"t" a large in!e"tor ba"e in rural and "emi9urban area"4 #a!ing a population of about one la+#"4 &#ic# normally #a" acce"" to only po"t office "a!ing" and ban+ depo"it". T#i" i" t#e "ingle large"t untapped mar+et for mutual fund" in India. -ural mar+eting4 unli+e t#e mar+eting of mutual fund" in t#e metro" and urban area"4 &ould re;uire a completely different "trategy4 and different mean" of communication to t#e target cu"tomer. Typically4 in!e"tor" in t#e rural and "emi9urban area" are not &ell educated and are inade;uately e:po"ed to t#e capital mar+et mec#ani"m". T#erefore4 more emp#a"i" #a" to be gi!en to t#e electronic media and ot#er form" of publicity "uc# a" &all painting"4 #oarding"4 and educational film". It i" al"o important to utiliEe t#e "er!ice" of local intermediarie" li+e Dram 8e!a+"4 Po"tma"ter"4 8c#ool teac#er"4 0gricultural Co9 operati!e 8ocietie" and -ural 2an+". It &ould t#erefore be more e:pen"i!e to mar+et mutual fund" in "uc# mar+et" t#an mar+eting in t#e citie". T#e mutual fund indu"try can collecti!ely underta+e t#i" ob of creating a&arene"" among t#e rural population about t#e mutual fund" a" a ne& form of "a!ing"J tran"late t#at a&arene"" into increa"ed fund mobiliEation. Collecti!e 0d!erti"ement" can be relea"ed .0%.I can coordinate t#i" ta"+ on be#alf of t#e !ariou" %utual .und #ou"e". T#e retail di"tribution net&or+4 compri"ing of t#e di"trict repre"entati!e" and t#e collection center" can be be"t utiliEed to create "uc# a&arene"" and e:pand t#e mar+et. 8implification of literature in regional language"4 group meeting" in t#e"e "emi9urban and rural area"4 !i"it" by mobile !an" &it# "ome audio !i"ual aid" and t#e li+e4 "#ould #elp

P a g e | '2 de!elop t#e"e mar+et". In ot#er &ord"4 t#e untapped mar+et" in t#e country "#ould ideally be t#e fir"t t#ing t#at t#e mutual fund" in India "#ould @ndea!our to tap4 not entirely relying upon t#e in!e"tor" in t#e 3) odd citie" of t#e country. 2y concentrating on t#e"e area"4 t#e in!e"tor ba"e &ill get broader ba"ed. Once t#e "emi urban population get" ac;uainted &it# t#e concept of mutual fund"4 it &ill naturally gi!e t#e muc# needed "tability to t#e mar+et.

#1 Overseas Mar"e s T#e "econd a"pect &it# re"pect to t#e &idening and deepening t#e mar+et i" e:panding t#e o!er"ea" in!e"tor ba"e. 0 target group &it# large potential4 &#ic# can be tapped i" non9re"ident Indian". If offered after "ale" "er!ice" of international "tandard4 rea"onable return and ea"y acce"" to information4 N-I<" are &illing to in!e"t in Indian mutual fund". T#e e:pan"ion of t#e di"tribution net&or+ and ;uic+ di""emination of information4 coupled &it# prompt and timely "er!ice4 efficient collection and remittance mec#ani"m4 &ill play an important role in mobiliEing and retaining t#e"e fund". N-I<" &ill al"o re;uire a continuou" pre"ence in t#eir mar+et4 becau"e t#at generate" tru"t and confidence4 &#ic# tran"late" into "u"tained mobiliEation of fund".

P a g e | '3

%RODUCT INNOVATION AND VARIETY

A1 Inves !r %re5erences T#e c#allenge for t#e mutual fund" i" in t#e tailoring t#e rig#t product" t#at &ill #elp mobiliEing "a!ing" by targeting in!e"tor"< need". It i" nece""ary t#at t#e common in!e"tor under"tand" !ery clearly and loudly t#e "alient feature" of fund"4 and di"tingui"#e" one fund from anot#er. T#e fund" t#at are being launc#ed today are more or le"" loo+9ali+e"4 or plain !anilla fund"4 and not nece""arily de"igned to ta+e into account t#e in!e"tor"< !arying need". T#e Indian in!e"tor i" e""entially ri"+ a!er"e and i" more pa""i!e t#an acti!e. Fe i" not intere"ted in fre;uently c#anging #i" portfolio4 but i" "ati"fied &it# "afety and rea"onable return". Importantly4 #e under"tand" more by emotion" and "entiment" rat#er t#an a ;uantitati!e compari"on of fund"< performance &it# re"pect to an inde:. %ere gro&t# pro"pect"4 in an uncertain mar+et4 are not attracti!e to #im. Fe prefer" one bird in t#e #and to t&o in bu"#4 and i" #appy if a""ured a rate of rea"onable return t#at #e &ill get on #i" in!e"tment. The expectations of a typical investor, in order of preference are the safety of funds, reasonable return and liquidity. T#e in!e"tor i" ready to in!e"t #i" money o!er a long period4 pro!ided t#ere i" a purpo"e attac#ed to it &#ic# i" lin+ed to #i" "ocial need" and t#erefore appeal" to #i" "entiment" and emotion". T#at purpo"e may be #i" c#ild<" education and career de!elopment4 medical e:pen"e"4 #ealt# care after retirement4 or t#e need for "teady and "ure income after retirement. In a country &#ere "ocial "ecurity and "ocial in"urance are con"picuou" more by t#eir ab"ence4 mutual fund" can pool t#eir re"ource" toget#er and try to mobiliEe fund" to meet "ome of t#e "ocial need" of t#e "ociety. #1 %r!d&c Inn!va i!ns (it# t#e debt mar+et no& getting de!eloped4 mutual fund" are tapping t#e in!e"tor" &#o re;uire "teady income &it# "afety4 by floating fund" t#at are de"igned to primarily #a!e debt in"trument" in t#eir portfolio. T#e ot#er area &#ere mutual fund" are concentrating i" t#e money mar+et mutual fund"4 "ectoral fund"4 inde: fund"4 gilt fund" be"ide" e;uity

P a g e | '' fund". T#e indu"try can al"o de"ign "eparate fund" to attract "emi9urban and rural in!e"tor"4 +eeping t#eir "ea"onal re;uirement" in mind for #ar!e"t "ea"on"4 fe"ti!al "ea"on"4 "o&ing "ea"on"4 etc. DISTRI#UTION NETWORK 0mong t#e competitor" to t#e mutual fund indu"try4 >ife In"urance Corporation &it# it" dedicated "ale" force i" offering in"urance product"J ban+" &it# t#eir friendly neig#bor#ood pre"ence offer t#e ad!antage of e:ten"i!e net&or+J finance companie" &it# t#eir #efty upfront incenti!e" offer #ig#er return"J "#are" N pro!ided t#e mar+et i" mo!ing fa!orably N al"o attract direct in!e"tment" from retail in!e"tor". It i" again"t t#i" bac+ground t#at t#e merit" and demerit" of t#e alternati!e met#od" of di"tribution #a!e to be "tudied. Re ail -r!&$- a$en s T#e alternati!e di"tribution c#annel" t#at are a!ailable are "elling4 or u"ing lead manager" and bro+er" along &it# "ub9bro+er"4 for "elling unit". T#e e:perience of GTI #a" been t#at4 if nece""ary moti!ation and incenti!e i" pro!ided to t#e retailer agent"4 t#ey are li+ely to be more "ucce""ful t#an t#e lead manager". T#i" i" becau"e4 t#ere i" a "en"e of loyalty among"t agent"4 in anticipation of getting continuou" bu"ine"" t#roug#out t#e year4 and t#e tru"t and credibility t#at #a" been generated or &ill be generated by being loyal to one in"titution. 8tati"tic" re!eal t#at t#e &a"tage ratio of application form" in t#e lead manager concept i" muc# #ig#er t#an in t#e retail agency "y"tem. 8a!ing" in ad!erti"ement and publicity e:pen"e" i" al"o affected4 a" t#e target of communication i" re"tricted to a fe& group" of indi!idual"4 "ince t#e agent &ill function a" a facilitator4 informer and educator. T#e reduced co"t benefit &ill ultimately accrue to t#e in!e"tor in t#e form of #ig#er return". In "uc# a "y"tem4 one ac#ie!e" brand loyalty t#roug# continuou" interaction bet&een agent" and in!e"tor". 2uilding a team of agent" and ot#er di"tribution net&or+ "uc# a" di"tribution and collecting agent" and franc#i"e office"4 &ill pro!ide t#e in!e"tor t#e opportunity of #a!ing continuou" interaction and contact &it# t#e mutual fund.

P a g e | ') T#erefore4 retail di"tribution t#roug# t#e agent" i" a preferred alternati!e for di"tributing mutual fund product".

P a g e | '6 ADVERTISIN/ AND SALES %ROMOTION 2y t#eir !ery nature4 mutual fund" re;uire #ig#er ad!erti"ement and "ale" promotion e:pen"e" t#an any con"umer product offering mea"urable performance. /ifferent +ind" of ad!erti"ing and "ale" promotion e:erci"e" are re;uired to "er!e t#e need" of different cla""e" of in!e"tor". .or in"tance4 an aggre""i!e Mpu"#< mar+eting "trategy i" re;uired for retail mar+et"4 &#ere in!e"tor" are not ade;uately a&are of t#e product and do not #a!e "pecialiEed "+ill in financial mar+et4 in contra"t &it# Mpull< mar+eting "trategie" for t#e &#ole"ale mar+et. T#ere are certain i""ue" &it# reference to ad!erti"ement4 publicity literature and offer document"4 &#ic# de"er!e attention. %o"t of t#e mutual fund ad!erti"ement" loo+ "imilar4 focu"ing on "c#eme feature"4 return" and incenti!e". 0n in!e"tor e:po"ed to t#e increa"ing number of mutual fund product" find" t#at all t#e a!ailable brand" are rat#er identical4 and cannot appreciate any di"tinction. T#e pre"ent form of application4 broc#ure" and ot#er literature i" generally lengt#y4 cumber"ome and at time" complicated leading to #ig#er emp#a"i" on ad!erti"ement. One of t#e limiting factor" i" t#e regulatory frame&or+ go!erning ad!erti"ement" of mutual fund product". .or in"tance4 in t#e offer document"4 mutual fund" are re;uired to mention t#e fund ob ecti!e" in clear term". Immediately t#ereafter4 t#e fir"t ri"+ factor t#at #a" to be mentioned i" t#at t#ere i" no certainty &#et#er t#e ob ecti!e" of t#e fund &ill be ac#ie!ed or not. 8ome more rela:ation<" in t#e"e may facilitate bringing more no!elty in ad!erti"ement"4 &it#in a broad frame&or+4 &it#out luring in!e"tor" t#roug# fal"e promi"e"4 and &ill certainly impro!e t#e "ituation. 0not#er #urdle i" t#e "tatutory di"claimer re;uired to be carried along &it# e!ery ad!erti"ement. %utual fund" #a!e to pro!ide ri"+ factor". Gnder t#e pre"ent mutual fund regulation"4 a prior appro!al by 8@2I i" a mu"t before a mutual fund can launc# it" fund. In t#e regulation it"elf4 a period of one mont# #a" been pro!ided. 2ut in a mont#<" time4 per#ap" t#e "ituation may "o c#ange4 t#at t#e timing of launc# get" affected. T#e re;uirement for getting appro!al4 &#ic# normally ta+e" about 2 mont#"< time4 defeat" t#e purpo"e for &#ic# t#e fund &a" de"igned al"o.

P a g e | '*

2UALITY OF SERVICE T#i" indu"try primarily "ell" ;uality of "er!ice"4 gi!en t#at t#e performance cannot be promi"ed. It i" &it# t#i" attribute along &it# procedural "implicity4 t#at t#e fund gradually build" it" brand and it" cla"" of loyal in!e"tor". T#e ;uality of "er!ice" i" broadly categoriEed a"P S Timely "er!ice" after t#e "ale of t#e unit"J and S Continuou" reporting of in!e"tment performance. %utual fund manager" mu"t gi!e due attention and e!aluate t#eir performance on eac# front. T#ey may al"o con"ider an option of conducting a "er!ice audit for controlling and impro!ing t#e ;uality of "er!ice.

P a g e | '=

,(- $O%E" .IE/ "EG)"DI0G I0.E $%E0$ I0 %-$-)! F-0D1 MARKET RESEARC0 In!e"tment in mutual fund i" not a one9time acti!ity. It i" a continuou" acti!ity. T#e "ame in!e"tor4 if "ati"fied4 &ill come to t#e fund again and again. (#en t#e in!e"tor "end" #i" application4 it i" not only an application4 but it al"o contain" !ital information. %o"t of t#i" information if tabulated and analyEed &ould pro!ide important in"ig#t" into in!e"tor need"4 preference" and be#a!ior and enable" u" to target cu"tomer" need more accurately4 to ac#ie!e better penetration4 deeper loyalty and reduced co"t". It i" in t#i" conte:t t#at direct mar+eting &ill a""ume increa"ed importance. 5no&ing t#e cu"tomer t#oroug#ly i" of utmo"t importance. Gnli+e t#e con"umer good" indu"try4 it i" not po""ible for mutual fund indu"try to te"t mar+et and #a!e pilot pro ect" before launc#. 0t t#e "ame time4 focu"ing and concentrating on a particular geograp#ic area &#ere t#e fund #a" a "trong pre"ence and pro!en mar+eting net&or+4 can #elp reduce net&or+4 can #elp reduce i""ue e:pen"e" and ultimately tran"late into #ig#er return" for t#e in!e"tor. 6ery little re"earc# on in!e"tor preference i" a!ailable4 but t#e indu"try can collecti!ely #a!e a data ban+4 and "#are t#e information for appropriate u"e.

ObEec ives !5 S &d(?

1B @!aluate Perception to&ard" ri"+ in!ol!ed in mutual fund" in compari"on to ot#er financial a!enue". 2B To en#ance our +no&ledge about t#e "ub ect. 3B To #a!e a !i!id picture of ma or player" in %utual .und Indu"try in India 'B Fo& effecti!ely t#ey are reac#ing t#eir cu"tomer". )B To "tudy t#e mar+eting of %utual .und product" in India. 6B To "tudy t#e con"umer a&arene"" regarding %utual .und" *B To "tudy t#e preference" of t#e di"tributor" for %utual .und". =B To "tudy t#e pattern of con"umer be#a!ior &it#in t#e a!ailable in!e"tment option" and to te"t a&arene"" among t#e con"umer about t#e !ariou" mutual fund #ou"e".

P a g e | '$

%ar+et 8egmentation /ifferent "egment" of t#e mar+et #a!e different ri"+9return criteria4 on t#e ba"i" of &#ic# t#ey ta+e in!e"tment deci"ion". Not only t#at4 in a particular "egment al"o t#ere could be different "ub9"egment" a"+ing for yet different ri"+9return attribute"4 and differential preference for !ariou" in!e"tment" attribute" of financial product. /ifferent in!e"tment attribute" an in!e"tor e:pect" in a financial product areP

LiF&idi (. Ca'i al a''recia i!n. Sa5e ( !5 'rinci'al. TaG rea 4en . Dividend !r in eres inc!4e. Re$&la !r( res ric i!ns. Ti4e 'eri!d 5!r inves 4en . e c.

On t#e ba"i" of t#e"e attribute" t#e mutual fund mar+et may be broadly "egmented into fi!e main "egment" a" underP 7* Re ail Se$4en T#i" "egment c#aracteriEe" large number of participant" but lo& indi!idual !olume". It con"i"t" of indi!idual"4 Findu Gndi!ided .amilie"4 and firm". It may be furt#er "ub9 di!ided intoP i. 8alaried cla"" peopleJ ii. -etired peopleJ iii. 2u"ine""men and firm" #a!ing occa"ional "urplu"e"J i!. FG.<" for long term in!e"tment purpo"e.

P a g e | ),

T#e"e may be furt#er cla""ified on t#e ba"i" of t#eir income le!el". It #a" been ob"er!ed t#at pro"pect" in different cla""e" of income le!el" #a!e different pattern" of preference" of in!e"tment. 8imilarly4 the investment preferences for urban and rural prospects would differ and therefore the strategies for tapping this segment would differ on the basis of differential life style, value and ethics, social environment, media habits, and nature of work. 2roadly4 t#i" cla"" re;uire" "ecurity of t#e principal4 li;uidity4 and regular income more t#an capital appreciation. It lac+" "pecialiEed in!e"tment "+ill" in financial mar+et" and #ig#ly "u"ceptible to mob be#a!ior. The marketing strategy involving indirect selling through agency network and creating awareness through appropriate media would be more effective in this segment. =* Ins i & i!nal Se$4en T#i" "egment c#aracteriEe" le"" number of participant"4 and large indi!idual !olume". It con"i"t" of ban+"4 public "ector unit"4 financial in"titution"4 foreign in"titutional in!e"tor"4 in"urance corporation"4 pro!ident and pen"ion fund". T#i" cla"" normally loo+" for more "pecialiEed profe""ional in!e"tment "+ill" of t#e fund manager" and e:pect" a "tructured product t#an a ready9made product. T#e ta: feature" and regulatory re"triction" are t#e !ital con"ideration" in t#eir in!e"tment deci"ion". @ac# cla"" of participant"4 "uc# a" ban+"4 pro!ide" a nic#e to t#e fund manager" in t#i" "egment. It requires more of a personalized and direct marketing to sustain and increase volumes.

+* Tr&s s T#i" i" a #ig#ly regulated4 #ig# !olume" "egment. It con"i"t" of !ariou" type" of tru"t"4 namely4 c#aritable tru"t"4 religiou" tru"t4 educational tru"t4 family tru"t4 "ocial tru"t4 etc. eac# &it# different ob ecti!e". It" ba"ic in!e"tment need &ould be "afety of t#e principal4 regular income and #edge again"t inflation rat#er t#an li;uidity and capital appreciation.

P a g e | )1 T#i" cla"" offer" !a"t potential to t#e fund manager"4 if t#e regulator" rela: guideline" and allo& t#e tru"t" to in!e"t freely in mutual fund". :* N!n-Residen Indians T#i" "egment con"i"t" of !ery ri"+ "en"iti!e participant"4 at time" referred a" Mfair &eat#er friend".< T#ey need t#e #ig#e"t co!er again"t political and e:c#ange ri"+. T#ey normally prefer ea"y e:it &it# repatriation of income and principal. T#ey al"o #old a "trategic importance a" t#ey bring in crucial foreign e:c#ange N a crucial input for de!eloping country li+e our". %ar+eting to t#i" "egment re;uire" "pecial +ind of product" for group" of foreign countrie" depending upon t#e pro!i"ion" of ta: treatie". T#e range of "uitable product" i" re;uired to de"ign to di!ert t#e fund" flo&ing into ban+ account". T#e late"t fla!our in t#e mutual fund indu"try i" e:clu"i!e "c#eme" for non9re"ident Indian" ?N-I<"B.82I %. #a" already launc#ed an e:clu"i!e "c#eme for N-I<". ICICI Prudential and L% %utual are in proce"" of finaliEing detail" and "ome more fund" #a!e al"o confirmed t#at t#ey are planning "uc# "c#eme". T#e %. indu"try i" al"o loo+ing to tap t#e !a"t N-I fund" of about T) billion t#at &ere tran"ferred to t#e local ban+" a" .CNand N-@ depo"it" on t#e redemption of t#e -e"urgent India 2ond" in October4 2,,3. F/.C &a" one of t#e fir"t to launc# a fi:ed maturity plan to N-I<" after t#e -I2 redemption .T#e "c#eme #ad collected -".1691* crore". 8undaram and F/.C %. are currently in t#e proce"" of "trengt#ening di"tribution net9&or+" o!er"ea"4 e"pecially in t#e %iddle @a"t. 8an ay 8ant#anam4 6ice Pre"ident %ar+eting 18ale" of 8undaram %. "ay"4 H(e are inten"ifying our effort" at tapping N-I money. To begin &it#4 &e are loo+ing at a repre"entati!e office and a di"tribution net&or+ in /ubai. T#en &e &ill &or+ out "pecialiEed product" and a""et allocation model".N-I are u"ed to "eeing lo& intere"t rate" "o t#eir return e:pectation" are different from dome"tic in!e"tor". T#e large 8out# Indian population in t#e %iddle @a"t &ill "urely connect &it# t#e 8undaram brand.I H* C!r'!ra e Denerally4 t#e in!e"tment need of t#i" "egment i" to par+ t#eir occa"ional "urplu" fund" t#at earn return" more t#an &#at t#ey #a!e to pay on account of #olding t#em. 0lternati!ely4 t#ey al"o get "urplu" fund due to t#e "ea"onality of t#e bu"ine""4 &#ic#

P a g e | )2 typically become due for t#e payment &it#in a year or ;uarter or e!en a mont#. T#ey need "#ort term par+ing place for t#eir fund4 T#i" "egment offer" a !a"t potential to "pecialiEed money mar+et manager". Di!en t#e rela:ation in t#e regulatory guideline"4 fund manager" are e:pected de"ign product" to t#i" "egment. T#u"4 eac# "egment and "ub9"egment #a" t#eir o&n ri"+ return preference" forming nic#e" in t#e mar+et. %utual fund" manager" #a!e to analyEe in detail t#e intrin"ic need" of t#e pro"pect" and de"ign a !ariety of "uitable product" for t#em. Not only are t#o"e4 t#e product" al"o re;uired to be mar+eted t#roug# appropriately different mar+eting "trategie". 0/<8 TF@ (07 Increasin' sales have 'iven mutual fund promoters the +ud'et to spend more on advertisin'2 which has further +oosted sales T#e 0t#ei"t" are turning belie!er". %utual fund"4 pri!ate "ector one" in particular4 &#o #ad &ritten off ad!erti"ing a" t#e Hultimate &a"te of moneyI #a!e nearly tripled t#eir pre"" media "pend .(#at<" intere"ting i" t#at in t#i" period t#e "#are of t#e pri!ate "ector mutual fund" in t#e category<" total media "pending #a" "urged from 2, percent to )2 percent. T#i" can be attributed to pri!ate "ector fund" ?gi!en t#e data a!ailable &it# t#e 0""ociation of %utual .und" of IndiaB "eeing an increa"e "#are of net inflo&" relati!e to t#e ban+9"pon"ored counterpart" in t#e public "ector. Clearly ad!erti"ing type" #a!e "omet#ing to c#eer about. 2ut &#at<" cau"ed t#i" "udden attitudinal "#ift to&ard" ad!erti"ingU 0ccording to e:pert"4 fund" are being pu"#ed into ad!erti"ing more by intermediarie" li+e ban+" &#o are reluctant to "ell a product &#o"e name i" unfamiliar to in!e"tor. 2e"ide"4 "ince more open9ended "c#eme" are no& a!ailable4 "ome form of ongoing "upport to +eep "ale" booming #a" been deemed nece""ary by t#e fund". H T#e indu"try #a" di"co!ered t#at ad!erti"ing in t#e c#anged climate today4 &#en in!e"tor" are mo"t recepti!e to mutual fund"4 can per+ up "ale" by any&#ere bet&een 2,9', percent. %.<" #a" rationale for "tepping up mar+eting "pend" becau"e t#e brand i" an important part of t#e con"umer<" deci"ion to in!e"t in a category t#at i" not yet clearly under"tood by people. 0ccording to t#e mutual fund mar+eter"4 ad!erti"ing #elp" bring recall &#en con"umer" are loo+ing at in!e"tment opportunitie".

P a g e | )3

0d!erti"ing bac+ed by an integrated mar+eting and communication campaign de"igned to attract in!e"tor" &it# long term pro"pecti!e #a" #elped t#e fund po"t a redemption9to9 "ale" ratio of u"t about fi!e percent a" compared to 2,93, percent for t#e indu"try on an a!erage. 2ut &#at mode of ad!erti"ing do t#e"e fund" c#oo"eU HTo "ell t#e category4I an"&er i" Hma"" media i" more effecti!e becau"e one need" to target a large "egment of t#e population.I %utual .und mar+eter" feel t#at "ince t#e category i" Minformation N centric<4 pre"" i" t#e be"t medium to get acro"" one<" me""age. (it#in t#e print media4 mo"t mar+eter" feel t#at a combination of leading mainline and financial ne&"paper" complemented by financeC bu"ine"" magaEine"4 &it# rele!ant t#ematic appeal and editorial content are t#e perfect mi:. /irect mail i" anot#er medium4 &#ic# "ome fund" #a!e "ucce""fully u"ed. 2ut rat#er t#an "ending out mailer" to all and "undry4 t#ere i" a need for appropriate targeting. @ducational "eminar" are t#e final leg in t#e mar+eting and communication proce"". In t#e"e4 in!e"tor" conditioned by ad!erti"ing and #oo+ed by an intere"ting mailer can #a!e lingering doubt" clarified. 0ttracti!e point of purc#a"e ?POPB material can al"o #elp. 0not#er !ery "ucce""ful media nic#e4 &#ic# #a" been e:ploited to t#e #ilt by fund"4 i" intermediary magaEine" and ne&"letter". 2e"ide" t#e lo& co"t" of ad!erti"ing in t#e"e ne&"letter"4 t#e"e publication" circulate to t#o"e &#o are loo+ing for in!e"tment opportunitie" and t#u" repre"ent an e:tremely lucrati!e target "egment. 0d!erti"ing content by mo"t of t#e fund" too #a" undergone a mar+ed c#ange from concept "elling ad" di"pelling myt#"4 to "elling "pecific "c#eme" t#at meet defined ob ecti!e"C goal".

P a g e | )'

2ut &#y i" ad!erti"ing "uddenly &or+ing for mutual fund" &#en it doe"n<t "eem to #a!e made a difference earlierU 0 "u"tained mar+eting "trategy in"tead of a fe&4 "crappy ad" i" no& "een to be t#e +ey to in!e"tor demand. 0d!erti"ing "er!e" a" a reminder complementing a "ale" pu"# by t#e di"tributor. H8ince t#e di"tributor &a"n<t ready in earlier year"4 ad!erti"ing t#en4 didn<t &or+4I 2rand building4 i" a long9term e:erci"e. Lu"t li+e mutual fund" ad!ocate t#at in!e"tor" ta+e a long9term approac# to in!e"ting4 "imilarly fund" need to ta+e a long9term approac# to brand building. .und mar+eter" and indu"try ob"er!er" #o&e!er4 caution again"t t#e danger of "elling t#e product for t#e &rong rea"on". .und" need to focu" on "u"tainable communication. T#ey need to build brand" t#at "tri+e a c#ord &it# in!e"tor" by relating to t#eir concern" rat#er t#an "elling fla!or9of9t#e9mont# "tyle. $he winnin' formula as industry watchers put it is the troi#a of performance2 service and trust for meetin' lon' term needs or 'oals3 Ins'ired Mar"e in$ 6ill -el' M& &al F&nds 6al" a6a( 6i - -e ban" De'!si s 2an+er" better &atc# outV T#e Indian mutual fund indu"try &ill "oon "tart relie!ing t#e ban+ing "y"tem of it" priEed depo"it". Inno!ati!e di"tribution4 mar+eting and aggre""i!e concept "elling &ill dri!e "a!ing" into t#e lap of t#e Indian %utual .und indu"try in t#e ne:t millennium. .und c#ief" predicted t#at ea"e of tran"action"4 t#an+" to tec#nology and increa"ed a&arene""4 &ould lead to more in!e"tor" putting t#eir money into mutual fund". T#e day &a" not far4 t#ey "aid4 &#en "mall "a!ing" account " too began mo!ing into mutual fund". 8ignificantly4 fund c#ief" &ere unanimou" t#at t#e credibility gap &#ic# t#e indu"try "uffered for t#e pa"t fe& year" did not e:i"t anymore. 0ll t#e fund c#ief" &ere unanimou" t#at performance4 "er!ice and "upport &ere all imperati!e for gro&t#. HPerformance4 tran"parency and after "ale" "er!ice and genuine retail in!e"tor intere"t a" oppo"ed to #ot corporate money4 an important contributor to many mutual fund "c#eme"4 &ill dri!e t#e

P a g e | )) indu"try gro&t#. HPerformance4 tran"parency4 after "ale" cu"tomer "er!ice and genuine retail in!e"tor intere"t are oppo"ed to #ot corporate money4 an important contributor to many mutual fund "c#eme"4 &ill dri!e t#e indu"try gro&t#4 On t#e "tate of mar+et in general4 fund c#ief" attempted to allay fear" t#at an o!er!alued mar+et may po"e #urdle" to "toc+ pic+ing. 0ccording to t#em4 &#ile in!e"tor" may feel t#at information tec#nology4 p#armaceutical" and con"umer good" "toc+" 9 or t#e 28@ 8en"e: for t#at matter N mig#t #a!e pea+ed4 ne& opportunitie" are opening up in area" li+e retail4 #ealt#care and e!en in internet bu"ine"". .und c#ief" al"o made a ca"e for t#e code to pre!ent mutual fund" from pro ecting "#ort9 term gain" in an attempt to attract in!e"tor" into t#eir "c#eme". T#ey &ere of t#e !ie& t#at4 H%utual .und" #a!e to agree to pre"ent performance" in an annualiEed fa"#ion4 o!er a longer period. T#e indu"try a" a &#ole "#ould "tandardiEe it" performance.I

P a g e | )6

RESEARC0 MET0ODOLO/Y?

Researc- Desi$n Researc- Ins r&4en Sa4'le Me -!d Sa4'le SiDe Sa4'lin$ Desi$n

? /e"cripti!e -e"earc# ? 8tructured4 un9di"gui"ed ? Non9Probability 8ampling ? H> ? Con!enience 8ampling

S!&rces !5 Da a?-

Primary Data

? 8tructured Non9/i"gui"ed 3ue"tionnaire

econdary Data

? -eference from di"tributor" 1 ban+".

T#e &#ole "tudy i" ba"ed upon primary and "econdary data. T#erefore4 information #a" been collected from interacting &it# different in!e"tor" and from !ariou" magaEine"4 ournal"4 &eb"ite"4 and bulletin".

P a g e | )* LIST OF INFORMATION RE2UIRED %ri4ar( Da a? Primary data are generated &#en a particular problem and #and i" in!e"tigated by t#e re"earc#er employing mail ;ue"tionnaire4 telep#one "ur!ey4 per"onal inter!ie&"4 ob"er!ation"4 and e:periment". MET0OD USED IN COLLECTION OF DATA 1. %ers!nal In ervie6? In per"onal inter!ie&4 t#e in!e"tigator ;ue"tion" t#e re"pondent" in a face9to9face meeting. Per"onal inter!ie&" may be conducted on a door9to9door ba"i" or in public place" "uc# a" "#opping center". T#e u"ual approac# for t#e inter!ie&er i" to identify #im"elf to a potential re"pondent and attempt to "ecure t#e re"pondentO" cooperation in an"&ering a li"t of predetermined ;ue"tion". T#e"e an"&er" may be tape9recorded or &ritten do&n by t#e inter!ie&er.

Advantages a. It re;uire" relati!ely "#orter period of time to complete. b. -e"earc#er can procure many different type" of information. c. T#e amount of information procured on eac# a"pect" i" larger. d. T#e re"ult" can be pro ected to t#e rele!ant uni!er"e &it# a greater degree of accuracy. Disadvan a$es a. T#e co"t per completed inter!ie& i" relati!ely #ig#er a" compared to ot#er met#od". b. T#e in!e"tigator may #a!e to face relati!ely more difficultie" in admini"tering t#e Inter!ie& "c#edule. c. T#e in!e"tigator" t#em"el!e" may in!ol!e in c#eating &#ic# i" !ery difficult to detect.

P a g e | )= =1 Tele'-!ne S&rve(? In telep#one "ur!ey4 pro"pecti!e re"pondent" are telep#oned4 u"ually at #ome"4 and a"+ed to an"&er a "erie" of ;ue"tion" o!er t#e telep#one. T#i" form of t#e "ur!ey tec#ni;ue #a" become more popular in recent year" in ad!anced countrie" more people are #a!ing telep#one" at t#eir #ou"e". Advan a$es It can be conducted at a lo&er co"t a" compared &it# per"onal inter!ie&". T#e inter!ie&" can be completed !ery ;uic+ly. T#u"4 "peed i" t#e mo"t "ignificant ad!antage. Disadvan a$es T#e information on eac# a"pect can be obtained to a limited e:tent. 6i"ual aid" cannot be u"ed. It i" difficult to +eep re"pondent" on t#e p#one for any lengt# of time if t#e "ur!ey i" not of +een intere"t to t#em. TY%E OF SAM%LIN/ USED (e u"ed n!n-'r!babili ( type of "ampling. In non9probability "ampling4 t#e c#ance of any particular unit in t#e population being "elected i" un+no&n. 8ince randomne"" i" not in!ol!ed in t#e "election proce""4 an e"timate of t#e "ampling error cannot be made. 2ut t#i" doe" not mean t#at t#e finding" obtained from non9probability "ampling are of ;ue"tionable !alue. If properly conducted t#eir finding" can be a" accurate a" t#o"e obtained from probability "ampling. C!nvenience Sa4'lin$ 0" t#e name implie"4 a con!enience "ample i" one c#o"en purely for e:pedience ?e.g.4 item" are "elected becau"e t#ey are ea"y or c#eap to find and mea"ure.

P a g e | )$ (#ile fe& analy"t" &ould find credibility in conclu"ion" from "uc# e:treme ca"e"4 t#e inappropriatene"" of u"ing con!enience "ampling to e"timate uni!er"e !alue" i" not &idely recogniEed. T#e ma or problem &it# t#i" ?and ot#er non9probability met#odB i" t#at one i" unable to dra& ob ecti!e inference about a rigorou"ly defined uni!er"e. In practice4 it i" often found t#at t#e re"pon"e gi!en by Wcon!enientW item" in a uni!er"e differ "ignificantly from t#e re"pon"e" gi!en by uni!er"e item" t#at are le"" acce""ible. 0" a re"ult4 unle"" one i" dealing &it# a +no&n #ig#ly #omogeneou" uni!er"e ?!irtually all item" re"ponding ali+eB4 con!enience "ampling "#ould not be u"ed to e"timate uni!er"e !alue". Sa4'le SiDe T#e "ample "iEe ta+en in t#e pro ect &or+ i" ),. T#e area "elected i" 0lla#abad and it" "urrounding area. Con!enience "ampling met#od &a" u"ed in t#i" "tudy becau"e of t#e con"traint" li+e co"t and time.

P a g e | 6,

FINDIN/
FINDIN/S , 7s T#ere are *6K people &#o are in!e"ting 1 in t#i" *6K t#ere are ),K people in go!ernment "er!ice4 2,K in pri!ate ob 1 2'K people are bu"ine""men 1 6K are retired. FINDIN/S , =nd , T#ere are '=K people in age group ',-6, year" and '6K of people in 2,9', year" and re"t 6K are 0bo!e 6, year". FINDIN/S , +rd , (#en I #a!e analyEe t#e pro ect t#en I found t#at in out of total people 2'K people are not in!e"ting 1 *6K people are in!e"ting. FINDIN/S , : - In area of in!e"tment 32K people intere"t in fi:ed depo"it and 31K people intere"ted in property 1 *K in "#are and "ame in %utual fund" 1 23K in!e"ting in in"urance in t#i" finding "ome people intere"ted in t&o area of in!e"tment. FINDIN/S , H - In "ur!ey $2K of people are "ati"fied &it# in!e"tment and =K are not "ati"fied &it# our in!e"tment. FINDIN/S , 9 - In t#i" "ur!ey '6K people are intere"t to buy 82I mutual fund and 1$K people to in!e"t in reliance4 16K in ICICI mutual fund and *K in GTI and 12K intere"ted in in!e"ting in different mutual fund". FINDIN/S , < - In in!e"tment *2K people e:pected return bet&een 1,K to 3,K and 1=K people @:pect le"" t#an 1,K return and remain 1,K people e:pected abo!e 3,K return.

P a g e | 61 FINDIN/S , ; - In ri"+ factor *6K people ta+e minimum ri"+ in in!e"tment and 16K people ta+e moderate ri"+ only =K people ta+e #ig# ri"+ for more return on in!e"tment. FINDIN/S , 8 - - In 8ur!ey 6'K of people in!e"ted bet&een -" ),,, to 2),,, and 26K people in!e"ted abo!e -" 2),,, only 1,K people in!e"ted only -" ),,,. FINDIN/S - 7> - In 8ur!ey ),K in!e"tor" are intere"t in 1 to 3 year" of in!e"tment and '2K are intere"ted in more t#an 3 year" of in!e"tment only =K in!e"tor" are intere"ted in "#ort term in!e"tment. FINDIN/S , 77 -In 8ur!ey *)K in!e"tor" t#in+ t#at in!e"tment i" "afe and 2)K t#in+ t#at it i" not "afe. FINDIN/S , 7= - In 8ur!ey =$K in!e"tor" t#in+ t#at mutual fund can gi!e #ig#er return and 11K t#in+ t#at mutual fund cannot gi!e #ig#er return it can gi!e only normally 1)9 2,K return. FINDIN/S - 7+ - In 8ur!ey =1K in!e"tor t#in+ t#at future of mutual fund &ill be good and 1$K t#in+ t#at future of mutual fund &ill not be a" "uc# good a" it i".

P a g e | 62

ANALYSIS AND INTER%RETATION

P@OP>@ CON8I/@-8 60-IOG8 .0CTO-8 (FI>@ IN6@8TIND IN %GTG0> .GN/

Options R eturns Tax S aving L iquidity R isk Free

R esponses 49 26 16 9

Percentages 49 26 16 9

P a g e | 63 P@OP>@ CON8I/@- 60-IOG8 208@8 .O- IN6@8TIND IN 0N7 P0-TICG>0.GN/

OPTION8 -@8PON8@8 -@8PON8@8 IN K Pa"t performance of fund 6' 6' Portfolio of fund 36 36

P-@.@-@NC@ O. 60-IOG8 %GTG0> .GN/8 O. /I..@-@NT P@OP>@8

Option" .ran+lin Templeton F/.C -eliance ICICI 82I 0ny ot#er

-e"pon"e" 1* 1$ 11 1= 2$ =

-e"pon"e" in K 1* 1$ 11 1= 2$ =

P a g e | 6'

P@OP>@ IN6@8T TF@ /I..@-@NT K O. 806IND IN %GTG0> .GN/8

S r no 1 2 $ 4 Options 1"#2"! 2"#$"! %"! &ore t'an %"! R esponses 46 $$ 1% 6 R esponses in ! 46 $$ 1% 6

P a g e | 6) P@OP>@ @AP@CT0TION8 O. -@TG-N .-O% /I..@-@NT .GN/8

S r no 1 2 $ 4 Options 1"#2"! 2"#$"! %"! &ore t'an %"! R esponses $2 4% 9 4 R esponses in ! $2 4% 9 4

P-@.@-@/ %O/@ O. IN6@8T%@NT

Sr no Options 1 &utua* Funds 2 ,ank F-.s $ -irect /quity &arket 4 0nsurance % Ot'ers

Responses (!) 4+ 4% $+ $% 12

P a g e | 66

P-@.@-@/ 8CF@%@8 O. %GTG0> .GN/8

S r no 1 2 $ 4

Options -e2t Fund ,a*anced Fund / quity Fund / LS SFund

R esponses 12! 2"! %"! 1+!

P a g e | 6* 8OG-C@ O. IN.O-%0TION 02OGT %GTG0> .GN/8

S r no 1 2 $

Options Print &edia 0nternet Te*evision

R esponses 4"! 22! $+!

P-@.@-@/ OPTION (FI>@ %05IND IN6@8T%@NT

S r no 1 2 $ Options S 0P S TP 3 onso*idated a4ount R esponses %"! 2"! $"!

P a g e | 6=

CONCLUSION
T#e end of millennium mar+" '' year" of e:i"tence of mutual fund" in t#i" country. T#e ride t#roug# t#e"e '' year" i" not been "moot# .In!e"tor" opinion i" "till di!ided .&#ile "ome are for t#e mutual fund" ot#er" are again"t it. %utual .und" ?%.B #a!e become one of t#e mo"t attracti!e &ay" for t#e a!erage per"on to in!e"t #i" money. It i" "aid t#at 2an+ in!e"tment i" t#e fir"t priority of people to in!e"t t#eir "a!ing" and t#e "econd place i" for in!e"tment in %utual .und" and ot#er a!enue". 0 %utual .und pool" re"ource" from t#ou"and" of in!e"tor" and t#en di!er"ifie" it" in!e"tment into many different #olding" "uc# a" "toc+"4 bond"4 or Do!ernment "ecuritie" in order to pro!ide #ig# relati!e "afety and return". . 0l"o generate lead" of t#e pro"pecti!e in!e"tor" in %utual .und" for t#e 0""et %anagement Company ?0%CB t#ere are many impro!ement" pending in t#e field and it #a" to #appen a" "oon a" po""ible "o a" to call t#e %. indu"try a" an OrganiEed and &ell9de!eloped "ector.

P a g e | 6$

SU//ESSTION
1. Ta''in$ -e &'c!4in$ 4ar"e - 8emi Grban %ar+et a" t#ere i" a lot of opportunity. %o"t of t#e %utual .und" are operating in t#e metro" and big citie" a" per t#eir pre"ent branc# office location". If t#ey #a!e to increa"e t#eir mar+et "iEe t#ey #a!e to open more di"tribution center" at t#e !ariou" urban and "emi9 urban mar+et". 2. To create t#e a&arene"" about t#e different product" of %utual .und and not about t#e generic product. 6ariou" re"pondent" &ere not a&are of t#e mutual fund product" and t#e type of mutual fund "c#eme" and t#e ri"+ a""ociated &it# mutual fund product". 3. To pro!ide "ome +ind of curriculum at t#e "c#oolCcollege le!el to create a&arene"" regarding %utual .und.

P a g e | *,

#I#LIO/RA%0Y
#!!"s? -e"earc# %et#odology C. -. 5ot#ari

(eb"iteP &&&.+ar!ydp.com &&&.mfportfolio.+ar!y.com &&&.t#e9finapoli".com &&&.+ar!ymf".com &&&.+ar!ycomtrade.com &&&.economictime".com &&&."ebi.go!.in &&&.mutualfund"india.com

P a g e | *1

2UESTIONNAIRE

Name of cu"tomerP 0ddre""P CityP Telep#one no.P %obile no.P @9mail addre""P

1. Occupation

Do!ernment @mployee
Pri!ate @mployee 2u"ine""men

-etired
2. 0ge Droup

2,9', year" ',96, year" 0bo!e 6, year"

3. 0nnual #ou"e #old income >e"" t#an 1.) la+#

2et&een 1.) to 3 la+# 2et&een 3 to ) la+# 0bo!e ) la+#

'. 7ou are intere"ted in in!e"tment

7e"

P a g e | *2

No
). /o you #a!e any e:i"ting in!e"tmentU

7e" No
If 7e" in &#ic# areaXXXXXXXXXXXXXXXXXXXXXXXXXX 6. (#ere do you ma+e in!e"tmentU

.i:ed /epo"it Property %utual .und In"urance 8#are"

*. 7ou are "ati"fied &it# our in!e"tment

7e" No
If No4 &#yU -ea"onXXXXXXXXXXXXXXXXXXXXXXXXX =. 7ou &ant to in!e"t for

C#ildren @ducation -etirement Fou"e 6acation 0broad 0ny Ot#er

$. .or &#ic# company<" mutual fund or 2an+" mutual fund you are intere"ted

P a g e | *3

GTI -eliance %utual .und 82I %utual .und ICICI Prudential %utual .und
Ot#er mention #ereXXXXXXXXXXXXXXXXXXXXXXXXXXX

1,.Fo& muc# ri"+ you can ta+e

%inimum -i"+ %oderate -i"+ Fig# -i"+

11. Fo& muc# money you can in!e"t

),,, ),,,92),,, 0bo!e 2),,,

12. Fo& long you can in!e"t

>e"" t#an 1 year 2et&een 1 to 3 year %ore t#an 3 year

13. 0re in!e"tment in mutual fund unit" "afeU

7e" No
1'. (#at do you t#in+ mutual fund can gi!e a #ig#er returnU

P a g e | *'

7e" No
1). (#ic# i" more profitable ./ or mutual fundU

%utual fund ./