A REPORT

ON

DEFINING CONSUMERS PERCEPTION

TOWARDS MUTUAL FUND

A REPORT SUBMITED IN PARTIAL FULFILMENT OF THE

REQUIREMENTS OF MBA PROGRAME OF ICFAI BUSINESS
SCHOOL

PROJECT GUIDE : SUBMITTED BY:

 ACKNOWLEDGEMENT

An endeavour to transform itself into success needs efforts. These efforts are
individual, standing in isolation. Such individual efforts require three things for
their further development. These three things being – “Reason, Rationality and Self-
Esteem”. The combination of these three basic traits delivers Productivity.
However, time and again this productivity requires encouragement and guidance.
This much requisite support comes in the form of individuals furthering the
development of individuals. Professionals furthering the development of Amateurs.
This acknowledgement is an effort to recognize these professionals who have made
this project a combination of the three fundamental traits.

This project report and the learning process behind it would not have been possible
without the guidance of my Faculty Guide, Prof. Tapas Mahapatra. He was able to
impart me with the right approach that my training required for its successful
practical implementation.

Secondly, my company guide at ICICI BANK LTD, Mr. Praveen Juyal who was
able to introduce me to the idea of Mutual Funds and what goes behind it.

I was involved with ICICI BANK LTD (Saket & G.K.-2 Branch) for these four
months, and I came across a lot of people who put in their time and effort towards
acclimatizing me to the workings of their organization. I express my thanks to Mr.
Sanjeev Priyadarshani, under whose guidance and leadership I was able to enhance
my financial as well as inter-personal skills. My acknowledgement also goes out to
Mr. Mohsin Shamim (S.O.-Investments ) who explained to me the intricacies and
the practicalities of selling, which is indeed a different ball game altogether. Lastly,
(but not even a remote reference to the literal meaning of the word) I express my
gratitude to the entire staff of ICICI BANK LTD lead by our pro-active Branch
Manager Mrs. Aarti Arora.

These past four months were of utmost importance as they added value towards my
path of knowledge. I would like to end this acknowledgement by thanking the
customers, clients, investors, and people at large with whom I have interacted
during the course of my training.

I am grateful for each and every valuable interaction that brought me to a better
understanding of the workings of the Mutual Fund industry and of the intricacies of
Investment in India, both forming the crux of my report.
 CONTENTS OF THE REPORT

SERIAL NO. PARTICULARS PAGE NO.

1 BACKGROUND 4

2 CONCEPT & WORKING 5

3 REGULATORY FRAMEWORK 7

4 ADVANTAGES 8

5 TYPES OF MUTUAL FUNDS 10

6 LIST OF MEMBERS 14

7 HISTORY OF MUTUAL FUNDS 16

8 TYPES OF RISK 20

9 FINDINGS 23

10 RECOMMENDATIONS 35

11 REFRENCES 38

BACKGROUND…………..
ICICI Bank is India's second-largest bank with total assets of about
Rs.1,67,659 crore at March 31, 2005 and profit after tax of Rs. 2,005
crore for the year ended March 31, 2005 (Rs. 1,637 crore in fiscal
2004). ICICI Bank has a network of about 560 branches and extension
counters and over 1,900 ATMs. ICICI Bank offers a wide range of
banking products and financial services to corporate and retail
customers through a variety of delivery channels and through its
specialised subsidiaries and affiliates in the areas of investment
banking, life and non-life insurance, venture capital and asset
management.

At April 4, 2005, ICICI Bank, with free float market capitalization* of

about Rs. 308.00 billion (US$ 7.00 billion) ranked third amongst all the
companies listed on the Indian stock exchanges.

ICICI Bank was originally promoted in 1994 by ICICI Limited, an

Indian financial institution, and was its wholly-owned subsidiary.
ICICI's shareholding in ICICI Bank was reduced to 46% through a
public offering of shares in India in fiscal 1998, an equity offering in
the form of ADRs listed on the NYSE in fiscal 2000, ICICI Bank's
acquisition of Bank of Madura Limited in an all-stock amalgamation in
fiscal 2001, and secondary market sales by ICICI to institutional
investors in fiscal 2001 and fiscal 2002. ICICI was formed in 1955 at
the initiative of the World Bank, the Government of India and
representatives of Indian industry. In the 1990s, ICICI transformed its
business from a development financial institution offering only project
finance to a diversified financial services group offering a wide variety
of products and services, both directly and through a number of
subsidiaries and affiliates like ICICI Bank. In 1999, ICICI become the
first Indian company and the first bank or financial institution from
non-Japan Asia to be listed on the NYSE.

In October 2001, the Boards of Directors of ICICI and ICICI Bank

approved the merger of ICICI and two of its wholly-owned retail
finance subsidiaries, ICICI Personal Financial Services Limited and
ICICI Capital Services Limited, with ICICI Bank.Consequent to the
merger, the ICICI group's financing and banking operations, both
wholesale and retail, have been integrated in a single entity.
 CONCEPT OF MUTUAL FUND

A Mutual Fund is a body corporate that pools the savings of a number

of investors and invests the same in a variety of different financial
instruments, or securities. The income earned through these
investments and the capital appreciation realized by the scheme is
shared by its unit holders in proportion to the number of units owned
by them. Mutual funds can thus be considered as financial
intermediaries in the investment business that collect funds from the
public and invest on behalf of the investors. The losses and gains
accrue to the investors only. The Investment objectives outlined by a
Mutual Fund in its prospectus are binding on the Mutual Fund scheme.
The investment objectives specify the class of securities a Mutual Fund
can invest in. Mutual Funds invest in various asset classes like equity,
bonds, debentures, commercial paper and government securities.

Mutua
l Fund Operation Flow Chart
WORKING OF MUTUAL FUNDS AND THEIR PERFORMANCE
 Mutual funds invest their funds in capital market instruments
such as shares, debentures, bonds and money market instruments and
therefore the net asset value of such investments will reflect the
market values of underlying assets. These market values fluctuate and
therefore the net asset values of the mutual fund schemes also
fluctuate.
All the capital market instruments have varying degrees of risk, the
degree of risk being the highest in equities and the risk factor is
highlighted in the respective offer documents as well as in the
abridged offer documents. The investor therefore is in the full
knowledge and understanding of the risks involved in various schemes.
As per SEBI regulation all mutual funds disclose their portfolio
periodically and all open-ended funds offer exit option to investors at
NAV based price.
In the current year, the share market is passing through a bear phase
with prices falling across the board and steeply in the technology
scrips. Reflecting this fall in share prices, the NAVs of most of the
equity schemes in general and of the technology funds in particular
have also fallen. This fall in the NAVs should therefore be viewed in the
context of the fall in the share prices, a phenomena which is world
wide today. The fall in NAVs not only affects the investors but it has an
impact on the fees and earnings of the investment managers also.
It may be recalled that the mutual funds have given good returns
while the market was in the upswing and even today, the non-equity
schemes which account for about 60 percent of total assets under
management provide competitive rates of returns.

MUTUAL FUNDS FUNCTION WITHIN STRICT REGULATORY

FRAMEWORK
 The Association of Mutual Funds In India (AMFI) reassures the
investors in units of mutual funds that the mutual funds function within
the strict regulatory framework.
The different entities such as the Mutual Fund, the Asset
Management Company and the Custodian operate as per the
provisions of the SEBI Mutual Fund Regulation 1996 and the rules and
guidelines issued by SEBI. Each of these entities has independent
Boards of Directors and separate auditors.
SEBI keeps a close watch on the mutual funds through periodical
reports and every three months, each mutual fund submits to SEBI a
report conforming compliance with regulatory provisions and mutual
funds are required to record their investment decisions. Any deficiency
or non-compliance is dealt with suitably by SEBI.
Every year, each mutual fund is inspected by SEBI and such
inspection is both a detailed scrutiny of operations and a rectification
exercise. Thus, the mutual funds are strictly supervised and regulated
entities and the regulatory provisions match with international
standards.
AMFI also is engaged in upgrading professional standards and in
promoting best industry practices in diverse areas such as valuation,
disclosure, transparency etc.

ADVANTAGES OF MUTUAL FUNDS

The advantages of investing in a Mutual Fund are:
• Professional Management.
The major advantage of investing in a mutual fund is that you
get a professional money manager to manage your investments
for a small fee. You can leave the investment decisions to him
and only have to monitor the performance of the fund at regular
intervals.

• Diversification.
Considered the essential tool in risk management, mutual funds
make it possible for even small investors to diversify their
portfolio. A mutual fund can effectively diversify its portfolio
because of the large corpus. However, a small investor cannot
have a well-diversified portfolio because it calls for large
investment. For example, a modest portfolio of 10 bluechip
stocks calls for a few a few thousands.

• Convenient Administration.
Mutual funds offer tailor-made solutions like systematic
investment plans and systematic withdrawal plans to investors,
which is very convenient to investors. Investors also do not have
to worry about investment decisions, they do not have to deal
with brokerage or depository, etc. for buying or selling of
securities. Mutual funds also offer specialized schemes like
retirement plans, children’s plans, industry specific schemes, etc.
to suit personal preference of investors. These schemes also help
small investors with asset allocation of their corpus. It also saves
a lot of paper work.
• Costs Effectiveness
A small investor will find that the mutual fund route is a cost-
effective method (the AMC fee is normally 2.5%) and it also
saves a lot of transaction cost as mutual funds get concession
from brokerages. Also, the investor gets the service of a financial
professional for a very small fee. If he were to seek a financial
advisor's help directly, he will end up paying significantly more
for investment advice. Also, he will need to have a sizeable
corpus to offer for investment management to be eligible for an
investment adviser’s services.

• Liquidity.
You can liquidate your investments within 3 to 5 working days
(mutual funds dispatch redemption cheques speedily and also
offer direct credit facility into your bank account i.e. Electronic
Clearing Services).

• Transparency.
Mutual funds offer daily NAVs of schemes, which help you to
monitor your investments on a regular basis. They also send
quarterly newsletters, which give details of the portfolio,
performance of schemes against various benchmarks, etc. They
are also well regulated and Sebi monitors their actions closely.

• Tax benefits.
You do not have to pay any taxes on dividends issued by mutual
funds. You also have the advantage of capital gains taxation.
 Tax-saving schemes and pension schemes give you the added
advantage of benefits under section 88.

• Affordability
Mutual funds allow you to invest small sums. For instance, if you
want to buy a portfolio of blue chips of modest size, you should
at least have a few lakhs of rupees. A mutual fund gives you the
same portfolio for meager investment of Rs.1,000-5,000. A
mutual fund can do that because it collects money from many
people and it has a large corpus.

TYPES OF MUTUAL FUND SCHEMES

1. BY STRUCTURE
• Open – Ended Schemes.
• Close – Ended Schemes.
• Interval Schemes.

2. BY INVESTMENT OBJECTIVE
• Growth Schemes.
• Income Schemes.
• Balanced Schemes.

3. OTHER SCHEMES
• Tax Saving Schemes.
• Special Schemes.
 Index Schemes.
 Sector Specific Schemes.
1. OPEN – ENDED SCHEMES
The units offered by these schemes are available for sale and
repurchase on any business day at NAV based prices. Hence, the unit
capital of the schemes keeps changing each day. Such schemes thus
offer very high liquidity to investors and are becoming increasingly
popular in India. Please note that an open-ended fund is NOT obliged
to keep selling/issuing new units at all times, and may stop issuing
further subscription to new investors. On the other hand, an open-
ended fund rarely denies to its investor the facility to redeem existing
units.

2. CLOSED – ENDED SCHEMES

The unit capital of a close-ended product is fixed as it makes a one-
time sale of fixed number of units. These schemes are launched with
an initial public offer (IPO) with a stated maturity period after which
the units are fully redeemed at NAV linked prices. In the interim,
investors can buy or sell units on the stock exchanges where they are
listed. Unlike open-ended schemes, the unit capital in closed-ended
schemes usually remains unchanged. After an initial closed period, the
scheme may offer direct repurchase facility to the investors. Closed-
ended schemes are usually more illiquid as compared to open-ended
schemes and hence trade at a discount to the NAV. This discount tends
towards the NAV closer to the maturity date of the scheme.

3. INTERVAL SCHEMES
These schemes combine the features of open-ended and closed-ended
schemes. They may be traded on the stock exchange or may be open
for sale or redemption during pre-determined intervals at NAV based
prices.

4. GROWTH SCHEMES
These schemes, also commonly called Equity Schemes, seek to invest
a majority of their funds in equities and a small portion in money
market instruments. Such schemes have the potential to deliver
superior returns over the long term. However, because they invest in
equities, these schemes are exposed to fluctuations in value especially
in the short term.

5. INCOME SCHEMES
These schemes, also commonly called Debt Schemes, invest in debt
securities such as corporate bonds, debentures and government
securities. The prices of these schemes tend to be more stable
compared with equity schemes and most of the returns to the
investors are generated through dividends or steady capital
appreciation. These schemes are ideal for conservative investors or
those not in a position to take higher equity risks, such as retired
individuals. However, as compared to the money market schemes they
do have a higher price fluctuation risk and compared to a Gilt fund
they have a higher credit risk.

6. BALANCED SCHEMES
These schemes are commonly known as Hybrid schemes. These
schemes invest in both equities as well as debt. By investing in a mix
of this nature, balanced schemes seek to attain the objective of
income and moderate capital appreciation and are ideal for investors
with a conservative, long-term orientation.
7. TAX SAVING SCHEMES
Investors are being encouraged to invest in equity markets through
Equity Linked Savings Scheme (“ELSS”) by offering them a tax rebate.
Units purchased cannot be assigned / transferred/ pledged / redeemed
/ switched – out until completion of 3 years from the date of allotment
of the respective Units.
The Scheme is subject to Securities & Exchange Board of India (Mutual
Funds) Regulations, 1996 and the notifications issued by the Ministry
of Finance (Department of Economic Affairs), Government of India
regarding ELSS.
Subject to such conditions and limitations, as prescribed under Section
88 of the Income-tax Act, 1961.

8. INDEX SCHEMES
The primary purpose of an Index is to serve as a measure of the
performance of the market as a whole, or a specific sector of the
market. An Index also serves as a relevant benchmark to evaluate the
performance of mutual funds. Some investors are interested in
investing in the market in general rather than investing in any specific
fund. Such investors are happy to receive the returns posted by the
markets. As it is not practical to invest in each and every stock in the
market in proportion to its size, these investors are comfortable
investing in a fund that they believe is a good representative of the
entire market. Index Funds are launched and managed for such
investors.

9. SECTOR SPECIFIC SCHEMES.

Sector Specific Schemes generally invests money in some specified
sectors for example: “Real Estate” Specialized real estate funds would
invest in real estates directly, or may fund real estate developers or
lend to them directly or buy shares of housing finance companies or
may even buy their securitized assets.

List of Members
A) Bank Sponsored
1. Joint Ventures - Predominantly Indian
a. SBI Funds Management Ltd.

2. Others
a. BOB Asset Management Co. Ltd.
b. Canbank Investment Management Services Ltd.
c. UTI Asset Management Company Pvt. Ltd.

B) Institutions
a. GIC Asset Management Co. Ltd.
b. Jeevan Bima Sahayog Asset Management Co. Ltd.

C) Private Sector

1. Indian
a. BenchMark Asset Management Co. Pvt. Ltd.
b. Cholamandalam Asset Management Co. Ltd.
c. Credit Capital Asset Management Co. Ltd.
d. Escorts Asset Management Ltd.
e. JM Financial Mutual Fund
f. Kotak Mahindra Asset Management Co. Ltd.
 g. Sundaram Asset Management Company Ltd.
h. Reliance Capital Asset Management Ltd.
i. Tata Asset Management Private Ltd.

2. Joint Ventures - Predominantly Indian

a. Birla Sun Life Asset Management Co. Ltd.
b. DSP Merrill Lynch Fund Managers Limited
c. Sahara Asset Management Co. Pvt. Ltd.
d. HDFC Asset Management Company Ltd.

3. Joint Ventures - Predominantly Foreign

a. ABN AMRO Asset Management (I) Ltd.
b. Alliance Capital Asset Management (India) Pvt. Ltd.
c. Deutsche Asset Management (India) Pvt. Ltd.
d. HSBC Asset Management (India) Private Ltd.
e. ING Investment Management (India) Pvt. Ltd.
f. Morgan Stanley Investment Management Pvt. Ltd.
g. Principal Asset Management Co. Pvt. Ltd.
h. Prudential ICICI Asset Management Co. Ltd.
i. Standard Chartered Asset Mgmt Co. Pvt. Ltd.
j. Franklin Templeton Asset Mgmt. (India) Pvt. Ltd.

History of the Indian Mutual Fund Industry

1964 1987 1993 2004

 Phase 1 Phase 2 phase 3

UTI-The only Public/ Bank Entry of Private

player Funds & Foreign FUTURE
established Players

The mutual fund industry in India started in 1963 with the

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

First Phase – 1964-87

Unit Trust of India (UTI) was established on 1963 by an Act of
Parliament. It was set up by the Reserve Bank of India and functioned
under the Regulatory and administrative control of the Reserve Bank
of India. In 1978 UTI was de-linked from the RBI and the Industrial
Development Bank of India (IDBI) took over the regulatory and
administrative control in place of RBI. The first scheme launched by
UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6,700
crores of assets under management.
Second Phase – 1987-1993 (Entry of Public Sector Funds)
1987 marked the entry of non- UTI, public sector mutual funds
set up by public sector banks and Life Insurance Corporation of India
(LIC) and General Insurance Corporation of India (GIC). SBI Mutual
Fund was the first non- UTI Mutual Fund established in June 1987
followed by Canbank Mutual Fund (Dec 87), Punjab National Bank
Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of
India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC established
its mutual fund in June 1989 while GIC had set up its mutual fund in
December 1990.
At the end of 1993, the mutual fund industry had assets under
management of Rs.47,004 crores.

Third Phase – 1993-2003 (Entry of Private Sector Funds)

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

Fourth Phase – since February 2003

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

RISK ASSOCIATED WITH MUTUAL FUNDS

The Risk-Return Trade-off
The most important relationship to understand is the risk-return trade-
off. Higher the risk greater the returns/loss and lower the risk lesser
the returns/loss.
Hence it is upto investor, the investor to decide how much risk you are
willing to take. In order to do this you must first be aware of the
different types of risks involved with your investment decision.

Market Risk
Sometimes prices and yields of all securities rise and fall. Broad
outside influences affecting the market in general lead to this. This is
true, may it be big corporations or smaller mid-sized companies. This
is known as Market Risk.

Credit Risk
The debt servicing ability (may it be interest payments or repayment
of principal) of a company through its cashflows determines the Credit
Risk faced by you. This credit risk is measured by independent rating
agencies like CRISIL who rate companies and their paper. A ‘AAA’
rating is considered the safest whereas a ‘D’ rating is considered poor
credit quality.

Inflation Risk
“Rs. 100 today is worth more than Rs. 100 tomorrow.”“Remember the
time when a bus ride costed 50 paise?” The root cause, Inflation.
Inflation is the loss of purchasing power over time. A lot of times
people make conservative investment decisions to protect their capital
but end up with a sum of money that can buy less than what the
principal could at the time of the investment. This happens when
inflation grows faster than the return on your investment. A well-
diversified portfolio with some investment in equities might help
mitigate this risk.

Interest Rate Risk

In a free market economy interest rates are difficult if not impossible
to predict. Changes in interest rates affect the prices of bonds as well
as equities. If interest rates rise the prices of bonds fall and vice versa.
Equity might be negatively affected as well in a rising interest rate
environment.

Political/Government Policy Risk

Changes in government policy and political decision can change the
investment environment. They can create a favorable environment for
investment or vice versa.

Liquidity Risk
Liquidity risk arises when it becomes difficult to sell the securities that
one has purchased. Liquidity Risk can be partly mitigated by
diversification, staggering of maturities as well as internal risk controls
that lean towards purchase of liquid securities.

FINDINGS
On the basis of my research I found the following results.

1. The Graph is based upon the Occupation of the people and their
preference in choosing the Asset Management Company.

25

20
No. of people

Salaried
15
Self Employed
10
Professional
5

0
Scheme Return Fund Brand
Type Record manager Name
Salaried 6 22 3 4
Self Employed 3 7 2 0
Professional 1 1 1 0

I. Returns record is considered most important factor for salaried

people in selecting any Asset Management Company.
II. Scheme type is the next priority of the customer while selecting
the Asset Management Company.
III. Fund manager and brand name is not seriously analyzed by the
customers and this is because of the lack of customer education
about Mutual Fund.

2. The Graph is based upon the Occupation of the people and there
preference area of investment .
 O c c u p a tio n V s In v e s tm e n t M a d e P ro fe s s io na l
S elf-E m p loy e d

1 00 % S ala rie d

80 %

60 %

40 %

20 %

0%
E qu ity In s u ran c eM u tu a l P .O B an k F .DC o m p a ny
F u n d S aving B o n ds

I. Salary class people are more inclined towards Mutual Funds as

compared to self employed and professionals .
II. Self employed and professionals are more keen in investment in
equity and company bonds.

3. The Graph is based upon the Occupation of people and investment

made in Mutual Fund Schemes.
 Occupation Vs Best Option

100%
80%

60%
Professional
40%
Self- Employed
20%
Salaried
0%
Balanced Growth Income Tax
saving
Funds

I. Salary class people are risk averse, they are more inclined
towards Balanced Scheme, and they even prefer the Schemes of
Income and Tax Saving.
II. Self employed people are risk takers and expect high returns.
They prefer the Growth Schemes.
III. Professionals generally prefer the Income and Tax saving
Schemes.

4. The Graph is based upon Income of the people with respect of their
investment made in different sectors.
 Income Vs Investment Made

100%

80%
Company Bond
60% Bank F.D
P.O saving
40%
Mutual Fund
20% Insurance
Equity
0%
Below 2 2 lac to 4 lac to 6 lac to Above 8
Lac 4 lac 6 lac 8 lac lac

I. Customers within the income range of 2 lakh to 8 lakh are keen

interested in Mutual Funds.
II. Equity is preferred by those who have income of 8 lakh and
above.

5. The Graph is based upon the income group and the best fund where
they want to invest there money.
 Income Vs Best Fund

100%

80%

60% Tax saving

Income
40%
Growth
20% Balanced

0%
Below 2 2 lac to 4 lac to 6 lac to Above 8
Lac 4 lac 6 lac 8 lac lac

I. Income group of below 2 lakh can’t afford to take too much of

risk and thus to be on the safer side , they generally invest in
Income and Balanced funds.
II. Balanced Schemes are mostly preferred by Income group 4 lakh
to 8 lakh.
III. Growth plan is preferred by the group of 2 lakh to 4 lakh and 6
lakh to 8 lakh.
IV. Tax Saving funds are popular with the people who earn more
than 8 lakh per annum.

6. The Graph is based upon age of the people and their respective
investments.
 A g e V s In v e s tm e n t O p tio n

100%
A b o ve 5 5 8 0 %
4 1 -5 5
60%
3 1 -4 0
40%
2 5 -3 0
1 9 -2 4 20%

0%
E q u it y In s u ra n c eM u t u a l P . O B a n k F ,D
Com pany
fu n d S a vin g B ond
In v e stm e n t O p tio n s

I. The age group of 25 to 40 years is the most prospective

customer segment for Mutual Fund.
II. Younger people of below 25 year are risk takers and thus apart
from Mutual Fund’s they even directly invest in equity.
III. Older people are risk averse and opt for safer options to invest.

7. The Graph is based upon the age group and the best fund where
they want to invest there money.
 Age Group Vs Best Fund

100%

80%
60%
Tax Saving
40% Income
20% Growth

0% Balanced
19-24 25-30 31-40 41-55 Above
55
Age

I. Growth plans are generally preferred by people who fall in age

group of 19 to 24 and 41 to 55. this category have customers
who are risk takers and expect high returns.
II. Balanced is mostly preferred by the age of 31 to 40 years. It is
even liked by the age group of below 31 years to a reasonable
extent.
III. Tax Saving funds are more popular among the people above 40
years of age.
IV. Income fund is predominant in the age group of 25 to 30 years.

8. The Graph is based on the knowledge of the customer relating with

their occupation.
 100%

80 %
P ro fe s s io n a ls
60 %
S e lf E m p loy e d
40 %
S a la rie d
20 %

0%
Q uie t W e ll
N o th in g V e ry L ittleM o d e ra te
C o n ve rs a nCto n ve rs a n t
P ro fes s ion a ls 0 0 0 2 1
S e lf E m p lo y e d 0 1 9 2 0
S a larie d 3 6 25 1 0

I. The level of awareness in salaried class is too wide where in it

ranges from nothing to quiet conversant.
II. Self employed people are towards the conversant side but still
many of them lack the adequate level required.
III. Professional are well versed with the concept and the industry of
Mutual Funds.

9. The Graph is based on the income of the consumer and their

investment in various schemes.
 Income Vs Investment Scheme

100%

80%
Tax Saving
60%
Money market
40% Balance
Growth
20%
Income
0%
Below 2 2 lac to 4 lac to 6 lac to Above 8
Lac 4 lac 6 lac 8 lac lac

I. Lower income group of below 2 lakh are more attracted towards

the income and money market Schemes as they cannot afford to
take too much of risk.
II. Balanced scheme is more popular with the income group of 2
lakh to 6 lakh . This group is even inclined towards growth
Schemes to certain extent .
III. Persons with a salary of 6 lakh and above are fascinated by tax
saving and money market schemes.

10. The Graph is showing the influential factor among the consumer.
 Influential Factor

35
30
No.of People

25
20
Series1
15
10
5
0

T.V

Internet
paper/Magazine
Friends/Family

Banners
News

I. Major chunk are fascinated by the Newspapers/ Magazine.

II. Second best instrument to fascinate the customer is the internet.
Because internet provide the easy and quickest way to get the
information.

Equity: Diversified
 Fund Fund Launc NAV Sinc YTD
Rating h e
Laun
ch
Apr-
DSPML Equity  28.73 22.83 2.39
1997
Apr-
DSPML Opportunities  25.85 20.58 -0.81
2000
Not May-
DSPML T.I.G.E.R. 14.09 40.90 0.64
Rated 2004
Not Feb-
DSPML Top 100 Equity 26.27 54.95 -3.91
Rated 2003
Jan-
HDFC Capital Builder  36.98 12.30 5.05
1994
Not Sep-
HDFC Core & Satellite 12.67 26.71 3.88
Rated 2004
Dec-
HDFC Equity  68.01 20.30 3.41
1994
Aug-
HDFC Growth Fund  24.36 20.67 1.33
2000
Not Jul-
HDFC Index Sensex Plus 70.60 31.98 -0.82
Rated 2002
Not Mar-
HDFC Premier Multi-Cap 10.06 0.55 —
Rated 2005
Sep-
HDFC Top 200  51.97 23.84 0.87
1996
Not Dec-
HSBC Equity 35.75 69.12 -3.30
Rated 2002
Not Feb-
HSBC India Opportunities 12.99 23.75 -3.57
Rated 2004
Apr-
DSPML Equity  28.73 22.83 2.39
1997
Apr-
DSPML Opportunities  25.85 20.58 -0.81
2000
Not May-
DSPML T.I.G.E.R. 14.09 40.90 0.64
Rated 2004
Not Feb-
DSPML Top 100 Equity 26.27 54.95 -3.91
Rated 2003
Prudential ICICI Advisor-Very Not Nov-
12.22 14.93 0.02
Aggressive Rated 2003
Not Jul-
Prudential ICICI Discovery 13.99 39.90 8.62
Rated 2004
Not Oct-
Prudential ICICI Emerging STAR 12.81 28.10 7.38
Rated 2004
Jun-
Prudential ICICI Growth  43.09 23.63 -1.46
1998
Sep-
Prudential ICICI Power  36.62 12.92 -0.97
1994
Not Mar-
Reliance Equity Opportunities 9.91 -0.86 —
Rated 2005
 Oct- 126.6 12.9
Reliance Growth 30.32
 1995 4 5
 Oct-
Reliance Vision 88.13 25.48 7.37
 1995
Nov-
Franklin India Bluechip  61.69 26.47 -3.71
1993
Not Feb-
Franklin India Flexi Cap 9.70 -3.00 —
Rated 2005
Franklin India Opportunities Not Mar- 11.29 26.80 -1.22
 Rated 2004
 Nov- 121.4 10.4
Franklin India Prima 24.40
 1993 6 9
Sep-
Franklin India Prima Plus  63.74 19.07 2.18
1994
Not Nov-
FT India Life Stage FoF 20s 13.18 21.23 -0.77
Rated 2003

Funds which were available for the selling in the ICICI Bank during the
tenure of our work for 14 weeks. It was nice experience working with
the staff of ICICI Bank and the experience which was gained at the
time of selling Mutual Funds and coming across many unknown things
which, not being in the market couldn’t have been possible to study.
Working with the Bank and the staff was being a wonderful experience
for me. Many things which are of practical nature and not given in any
of the books are taught in the field which are of great help in the near
future. You got to learn many things like, how to talk to a person and
what expressions to show at the right time. There are good and bad
people in the organization and you got to teach lot many things from
them. What I experienced while working was not to indulge in the
politics at the working place as these things have shorter life span and
not in long run.

Sales done during the service tenure :-

RELIANCE EQUITY OPPORTUNITY FUND Rs. 4, 00,000

HDFC MULTI-CAP FUND Rs. 1, 30,000

(Highest among my peers)

FIDELITY Rs. 12, 48,000

(Topped for three consecutive days in Northern India)
HSBC EQUITY FUND Rs. 3, 50,000
(Highest among my peers)

DSPML Rs. 80,000

FRANKLIN TEMPLETON Rs. 1, 10,000

SYSTEMATIC INVESTMENT PLAN (SIP) 64 APPLICATIONS

RECOMMENDATIONS

• Customer education of the salaried class individuals is far below

standard. Thus Asset Management Company’s need to create
awareness so that the salaried class people become the
prospective customer of the future.

• Early and mid earners bring most of the business for the Asset
Management Company’s. Asset Management Company’s thus
needed to educate and develop schemes for the person’s who
are at the late earning or retirement stage to gain the market
share.

• Return’s record must be focused by the sales executives while

explaining the schemes to the customer. Pointing out the brand
name of the company repeatedly may not too fruitful.
• The target market of salaried class individual has a lot of scope
to gain business, as they are more fascinated to Mutual Funds
than the self employed.

• Schemes with high equity level need to be targeted towards self

employed and professionals as they require high returns and are
ready to bear risk.

• Salary class individuals are risk averse and thus they must be
assured of the advantage of “risk – diversification” in Mutual
Funds.

• The choice range of salaried class individual’s is too wide, thus

the exact requirement of customer must be assessed before
advising him for any scheme.

• The major target market for the Asset Management Company’s

is the person’s with the income range of 2 to 8 lakhs and they
must be approached to gain investments.

• High end customers with a income of above 8 lakhs are more

interested in saving taxes and hence tax saving schemes fit to
their requirement.

• Low end customers require more of fixed returns and they can’t
take high risk because of limited financial resources. Thus
income schemes need to be recommended for this segment.
• Balanced schemes must be focused while explaining the schemes
to the income segment of 4 lakhs to 6 lakhs.

• Direct sales force can target the self employed and professionals
as they are conversant with Mutual Funds and thus convincing
them with the word of mouth won’t be a too tough job.
• During my research I found that the consumer wants a quick
grievance solving mechanism. Consumer doesn’t want to come
to the office/branch for solving the grievance. So the Asset
Management Company’s should have to work upon that.

• Most of the consumer is fascinated towards the open – ended

schemes. So the company should have more attention on open –
ended scheme.

• Asset Management Company’s for its advertisement and

promotional activity should go for Newspaper/Magazine and
Internet.
 REFRENCES

Websites Magazines

Capitalmarket.com Economic Times

Mutualfundsindia.com Financial Times

Mfindia.com Capital Markets

Business-standard.com

Valueresearchonline.com

Amfiindia.com