CHAPTER I

INTRODUCTION

1
1.1 OVERVIEW OF MUTUAL FUND INDUSTRY IN INDIA

The establishment of the Unit Trust of India make the evolution of the Indian mutual fund
industry in year 1963. The basic motive behind development of mutual fund industry in India is
to try to attract the investors. During the year 1964-87 the RBI introduce mandatory and
regulatory framework for mutual funds industry. In 1964, the Unit Trust of India launched the
first mutual fund schemes with named US – 64 and the excessive response was been received
from the investors. From 1987-93 public players has been entered in mutual fund industry. More
than 90% market share was capture by the public sector players in this development phase.

From the period of 1993-96 lots of private players entered into the mutual fund industry too with
the collaboration of foreign asset management companies and launched numerous schemes in
the Indian mutual fund industry. During the period of 1996-2004 SEBI implemented few new
guidelines for the mutual fund players with respect to investor’s protection. During this time
frame SEBI also conducted awareness programs for investors toward availability of investment
opportunities. The last development stage of mutual fund industry in India started from 2001
onwards. The industry witnessed the many strategic alliance, mergers and acquisitions for many
varieties of mutual fund schemes for various class of inventors. Up to 2008 mutual fund industry
shows sign of significant and continuous growth but from 2008 onwards various mutual fund
schemes generated negative return because of the recession period.

There is lack of penetration of MFs, especially in tier II and tier III cities, and the need for
interest of various stakeholders, SEBI introduced several progressive measures in September
2012 to "re-energize" the Indian Mutual Fund industry and increase MFs’ penetration. Since
May 2014, the Industry has witnessed steady inflows and increase in the AUM as well as the
number of investor accounts. The growth in the size of the industry has been possible due to the
twin effects of the regulatory measures taken by SEBI in re-energizing the MF Industry in
September 2012 and the support from mutual fund distributors in expanding the retail base. MF
distributors have also had a major role in popularizing Systematic Investment Plans (SIP) over
the years. In April 2016, the no. of SIP accounts has crossed 1 crore mark and as on 31st July
2022 the total no. of SIP Accounts are 5.62 crore.

2
1.2 OVERVIEW OF MUTUAL FUND
The mutual fund enterprise continues to be at growing stage in India. With financial savings rate
of approximately 25% and a booming economy, mutual fund enterprise has a brilliant scope to
expand, provided they evolve out of the present challenges. The primary trouble for the
enterprise is its slow penetration. Mutual fund has invested 97% overall investments within the
debt marketplace, while FII investments are 96% in equities.

A mutual fund is a financial vehicle that pools unit holders' assets to invest in securities such as
stocks, bonds, money market instruments, and other assets. Mutual funds are operated by
professional money managers who allocate the fund's assets and seek to generate capital gains or
income for the fund's investors. A mutual fund's portfolio is structured and managed to meet the
investment objectives set out in the prospectus.

Mutual funds offer retail or individual investor’s access to portfolios of stocks, bonds and other
professionally managed securities. Each shareholder therefore participates proportionately in the
profit or loss of the fund. Mutual funds invest in a large number of securities and performance is
typically tracked as a change in the fund's total market capitalization, which is derived from the
overall performance of the underlying investments. A mutual fund has a fund manager,
sometimes called an investment advisor, who has a legal obligation to work in the best interests
of the mutual fund's unitholders.

Investors purchase mutual fund stocks from the fund by themselves or via a dealer. The charge
that buyers pay for the mutual fund is the fund’s consistent with proportion internet asset cost
plus any expenses charged on the time of purchase, which include income loads. Mutual fund
stocks are redeemable, which means buyers can sell the stocks back to the fund at any time; the
fund need to resend investor the fee in seven days. Before purchasing stocks in a mutual fund,
examine the prospectus carefully. The prospectus includes records approximately the mutual
fund’s funding objectives, risks, performance, and expenses.

The mutual fund industry has come a long way in supporting the transfer of savings into the real
sector of the economy. The overall AUM of the mutual fund industry recorded a CAGR of
12.4% in the 2007-16 financial year. This shows how mutual funds have played a crucial role in
mobilizing HNI investor savings into the capital market over the past 10 years in India. At the
end of March 2017, the AUM for mutual funds was around Rs. 17.5 lakh crore rupees. In 2017,
investors invested Rs 3.4 lakh crore for all categories of mutual funds in India.

3
1.3 OPERATIONAL FLOW OF MUTUAL FUND
The below diagram 1.1 shows the flow of mutual fund process. In initial stage investor pooled
invests his money with his fund manager. In second stage the fund manager invests the pooled
amount with the securities. In third stage the securities generated return on pooled money or
investment. In fourth stage the generated returns are transferred to the investor.

INVESTORS
Pool their money
with registered
Mutual Fund

MUTUAL FUND
RETURNS
MANAGER
Are passed back
Invest the amount
to Investors
with Securities

SECURITIES
Generates return
on pooled
investment

Diagram.1.1

1.4 FEATURES OF MUTUAL FUND

 A mutual fund is actually owned by investors who have pooled their funds.
 A mutual fund is managed by investment professionals and other service providers
who receive a fee from the fund for their services.
 The Fund will be invested in a portfolio of tradable assets. The value of the portfolio
is updated daily.
 The investor's interest in the fund is "Shares". The value of the share’s changes daily
as the value of the portfolio changes. The value of an investment unit is referred to as
Net Asset Value or NAV.

4
1.5 HIGH-NET-WORTH- INDIVIDUALS
HNIs or High Net worth Individuals (HNI) belong to the financial services sector where a class
of individuals has an investable surplus of more than Rs 5 crore below this threshold. Such
investors are classified as retail investors as they are measured by their net worth in the financial
industry.

Net Assets is an amount by which assets exceed liabilities.

In general, HNIs are broadly defined as, “individuals whose fixed assets, such as bonds and
stocks, exceeds a certain amount”. A high-net-worth individual is one who owns liquid assets,
including money in bank or brokerage accounts, excluding assets such as a primary residence,
durable goods, or collectibles.

Private wealth managers are always in high demand at HNI because a lot of work goes into
maintaining and maintaining such assets. The more liquid assets a person has, the more
attractive an HNI becomes to wealth managers, since they make money that is a percentage of
the total wealth they manage.

Investable surplus

The additional amount of money that a person must invest in capital appreciation is referred to
as “investable surplus”. In fact, the investable surplus does not include investments in real estate
and excludes any assets acquired without the expectation of a return. For example, a person's
house, personal belongings, automobile or country house may not be included in the investable
surplus.

If someone has a house valued at Rs 5 crore, bank deposits valued at Rs 1 crore and a car valued
at Rs 50 lakh, then in principle he or she is not an HNI. Although his total net worth including
house and bank deposits is over Rs 6 crore, the investable surplus is only the fixed deposit of Rs
1 crore.

Types of HNI

 High-Net-Worth Individuals (HNWI): Investors holding between Rs 5Cr.

and Rs 25Cr. in liquid assets
 Very-high-net-worth individuals (VHNWIs): Investors holding between Rs
5Cr. and Rs 25Cr. In liquid assets.

5
 Ultra-High-Net-Worth Individuals (UHNWI): Investors holding more than Rs
25Cr.

6
1.6 ADVANTAGES OF MUTUAL FUND TO HNI’S

 Portfolio diversification: Mutual fund invests in a well-diversified portfolio of

securities, which allows the investor to maintain a diversified portfolio of investments.
 Professional management: The fund manager undertakes extensive research and
has better investment management skills which ensure the investor higher returns.
 Low Risk: Investors acquire a diversified portfolio of securities in a mutual fund. The
risk in a diversified portfolio is lower than investing in just 2 or 3 unit.
 Low transaction costs: Due to economies of scale (benefits from higher volumes),
investment funds pay lower transaction costs. These profits are passed on to the
investors.
 Liquidity: An investor may not be able to sell some of the stocks they own very
easily and quickly, while mutual fund shares are much more liquid.
 Selection of funds: Mutual funds offer investors different funds with different
investment objectives. Investors have the opportunity to invest in a plan that shows a
correlation between their investment goals and their own financial goals.

 Transparency: The Funds provide investors with up-to-date information in relation

to the markets and the plans. All material facts are disclosed to investors as required by
the regulator.
 Flexibility: Investors also benefit from the convenience and flexibility that mutual
funds offer. Investors can switch their holdings from a debt system to an equity system
and vice versa. The possibility of systematic investment and withdrawal (at regular
intervals) is also offered to investors in most open systems.
 Security: The mutual fund industry is part of a well-regulated investment environment
where the interests of investors are protected by the regulator. All funds are registered
with SEBI and full transparency is required.

7
1.7 OBJECTIVES OF THE STUDY
The present study tries to spot the subsequent objectives given below:

 To bridge the gap between theory and practical knowledge.

 To study on work culture at NJ Wealth.

 To gain experience and exposure about working of business organization in a corporate

setting.
 To understand the working and flow of different departments of a business firm.

1.8 SCOPE OF THE STUDY

Investing in mutual funds allows HNIs to diversify their investments into common stocks,
preferred stocks, bonds, and other financial stocks. At the same time, they also enjoyed the
liquidity advantage in mutual funds. With mutual funds, they have the scope of easy access to
their invested funds as per requirements.

1.9 LIMITATIONS OF THE STUDY

 Time was a major constraint for the study, as the internship period was of only two months
 The study was conducted only on secondary data basis. Therefore there may be
limitations while finding about all details about preference of HNI’s.
 Lack of knowledge of mutual fund industry.

8
9
 CHAPTER II

PROFILE OF THE ORGANISATION

10
2.1 ORGANISATIONAL PROFILE

Name of the organisation: NJ INDIA INVEST PRIVATE LIMITED

Started in year: 2003

Founders: Mr. Neeraj Choksi & Mr. Jignesh Desai

Driven by the strong vision of 'Creating Wealth and Transforming Lives', NJ Wealth's constant
endeavor is to build on the ideas that are meaningful & effective in scaling business challenges,
seizing available opportunities and serving the interests of the customer.

The NJ Wealth family has grown steadily and today it has over 24,995 Active Distributors,
spread across 95 branches in 19 states in India with over 24,20,626 investors and over INR
1,26,488 Cr of mutual fund assets under management. Irrespective of the numbers though, it is
trust in us which fuels the passion for creating solutions with excellence that touch many lives,
day after day.

PRODUCTS

 Domestic mutual funds (all AMCs)

 Capital Markets - direct equity and ETFs
 Fixed Deposits of companies
 PMS products (Third party & NJ)
 Government/ RBI/ Infrastructure bonds
 Residential & commercial properties

PARTNER SERVICES

 Dedicated Relationship Manager

 Marketing & Sales support
 Research support
 Training & Education support
 Dedicated Customer Care / Query management support
 Technological support, including online business / 'Partners Desk' with CRM &
Employee Management modules
CUSTOMER SERVICES:

 Online family "Client Desk" enabling single portfolio view of 'entire' wealth portfolio
Trading & Demat Account with online transacting & call-&-trade service in mutual

11
funds, direct equity & ETF

12
2.2 SWOT ANALYSIS: NJ WEALTH
STRENGTHS

 NJ have strong client base.

 NJ have around 19+ years of experience in financial services.
 NJ is India’s top mutual fund distributor.
 NJ have better technological support.

WEAKNESSES

 NJ have small office space.

 NJ have a smaller number of ground agents.

OPPORTUNITY

 NJ is growing fast in asset management market.

 NJ provides high quality financial advisors.
 Number of investors is increasing in Indian market.

THREATS

 Threat of increasing in competition within the industry.

 Competition with banking channels is increasing.
 Increase in the fees of AMFI certification.

13
2.3 NJ WEALTH

(Source: Unknown)

Built on trust an evolving, thriving and business group with roots in the financial services
industry, today it is passionate about exploring new horizons. Mr. Neeraj Choksi & Mr. Jignesh
Desai are first entrepreneur who started the adventure of 'NJ' in 1994. With a humble starting
from home, the promoters have correctly formed the group's forays into many different
businesses. The group's vision is to be a leader in business, driven by customer satisfaction, a
commitment to excellence and a passion for continuously creating value for all stakeholders.
This vision has helped us grow and build the trust of our customers and employees, which is the
cornerstone of everything. Trust is also at the core of their success and the engine of the passion
for success.
NJ Group is a leader in the Indian financial services industry, known for its strong distribution
capabilities.
NJ's journey began in 1994 with the formation of NJ India Invest Pvt Ltd., the reference
company to meet the needs of investors in the financial services industry. Today, the Wealth
Advisory Network, also known as the NJ Fundz Network, established in 2003, is one of the
largest wealth advisory networks in India. Over the years, NJ Group has diversified into other
businesses and is now present in businesses ranging from network wealth advisory, wealth
management, real estate, insurance broking, training and development, and technology. Their
rich financial services experience, combined with execution skills and a strong process and
systems orientation, has enabled customers to chart an upward growth trajectory in their
businesses. NJ’s Headquarter is in Surat, Gujarat, India. NJ Group has over 1,000+ employees in
over 100+ locations across India.

14
2.4 PRODUCTS AND SERVICES: NJ WEALTH
2.4.1 Wealth Advisors Network

NJ Wealth Advisors Network is one of India's largest and most successful networks of advisors
in the financial services industry. The NJ Wealth Advisory Platform is a comprehensive 360°
platform that offers comprehensive solutions required for a successful wealth advisory. Founded
in 2003, the network seeks to reach the common man and expand the opportunity to create
wealth through sound investment principles and strategies. The NJ Wealth Advisors Network
today has over 15,000+ advisors called NJ Partners spread across India serving over 12 lakh
investors and holding an AUA of almost Rs 10,000+ Cr. The platform offers partners a basket of
traditional products as well as comprehensive solutions in all key areas of the business,
supported by state-of-the-art IT services. The Wealth Advisory Platform has successfully
transformed the lives of many wealth advisors by providing an answer to all questions related to
the advisory practice. The NJ Wealth Advisors Network is represented in over 100+ locations.

2.4.2 NJ PMS (Asset Management)

NJ has partnered with NJ Advisory Services a group company that markets its discretionary
PMS products. At the heart of NJ Advisory Services is the idea of providing clients with
solutions that give them the freedom to actively manage investments while having the
confidence that we would do so in the best possible way. Our belief, along with our passion and
experience, is to give investors peace of mind. The PMS products currently on offer are
designed to meet investors' need for long-term wealth accumulation through strategies that
control risk and optimize returns in a mutual fund portfolio. NJ Advisory Services leverages its
wealth of portfolio management experience with extensive mutual fund knowledge and
experience. Mutual fund portfolio decisions also combine the results of proven, proprietary
research models, extensive fund house due diligence, interactions with fund managers and
internal risk controls.

2.4.3 Fin Logic Technologies (Information Technology)

NJ Company that aims to provide quality technology solutions to businesses in a variety of

fields. NJ began its technology journey by founding Fin Logic Technologies Pvt. ltd, a group
company, in 2000. The idea at the time was to develop software applications to support the
growing sales business and to manage the IT infrastructure. Over the years, the in-house IT team
has accumulated extensive experience and skills in various fields and technology domains.
Today, the Fin Logic team has nearly 200+ employees with skills and extensive experience in
product development, software testing, infrastructure management, and project management and
15
information security. All of NJ Group's infrastructure and internal systems are managed by Fin
logic which helps NJ to drive business.

16
2.4.4 NJ Realty (Real Estate)

NJ Realty Company offers an integrated service model that provides end-to-end real estate
program management and execution services to diverse stakeholders. The idea is to work with
stakeholders and actively participate in different phases of program management of different
sizes, whether residential or commercial. Real estate program management is a long and
Challenging process, from program discovery to marketing. As a developer, investor or property
owner you may be interested in undertaking real estate projects but may not have the right skills,
contacts, experience and/or knowledge for the business. This is where NJ Realty can become a
partner and help set up real estate programs. NJ Realty has gained significant program
management experience and also currently participates in several programs serving different
roles. At the core of NJ Realty is the philosophy of sustainability and environmental protection.
Beyond words, NJ Realty tries to keep the environment as one of the focal points in its real
estate business.

2.4.5 Insurance Brokerage

NJ Insurance Brokers Pvt. Ltd., an IRDA Licensed Insurance Broker, strives to provide clients
with comprehensive solutions to meet their insurance needs. At the heart of NJ Insurance is a
strong vision of continued financial well-being for clients, individuals and families, no matter
the circumstance. The key is to offer the 'right' advice that is unbiased and customer focused,
covering the right risk to insure, the right coverage and the right product and at the right time.
The idea of offering customers comprehensive solutions also extends to high-quality claims
processing and other services. NJ Insurance leverages NJ Group's wealth of experience in
financial planning and investment management for clients. NJ Insurance Brokers has appointed
Certified Insurance Consultants (CIAs) who work with clients to identify, meet and manage their
insurance needs. NJ offers a full range of products in both life and non-life insurance and makes
extensive use of technology to deliver value to customers.

2.4.6 Global Wealth Advisor

NJ Global Invest ltd. is a new NJ company aiming to provide a global wealth advisory platform
to offshore fund advisors around the world. The vision of the Global wealth advisory platform is
to provide clients with a single window to investment opportunities around the world. The idea
is to offer clients a wide range of offshore fund plans through advisors on the Global Wealth
Advisory platform. NJ Global Invest strives to provide an offshore fund distribution platform
and offshore portfolio advisory services under a B2B distribution model. NJ Global Invest also
intends to offer a full order routing and trade execution service with client reporting and fee
17
processing support services.

2.4.7 NJ Gurukul (Training and Development)

NJ Gurukul is a company that aims to provide valuable training and educational support to the
pool of emerging young talent in India. Established in 2007, NJ Gurukul today offers a wide
range of training programs across India in major cities. NJ Gurukul is about a vision that aims to
nurture young talents in India and transform them into people with knowledge and skills for
employment and business. With a particular focus on the financial advisor community, NJ
Gurukul is a leading provider of training programs in the financial services industry today. NJ
Gurukul offers a wide range of training programs in part-time or full-time classroom form held
at various locations across India. NJ Gurukul has an institutionalized, process-oriented approach
to training with an emphasis on providing consistency in quality and content. The NJ Gurukul
has a Board of Trainers with over 90+ well qualified professional trainers across India to deliver
training programs. In a short period of time, NJ Gurukul has trained more than 30,000+
participants in more than 50 locations in India. NJ Gurukul is an Authorized Education Provider
(EP) with FPSB India to provide training for the prestigious Certified Financial Planner -
CFPCM certification.

2.4.8 Fin Logic Technologies (Information Technology)

NJ Company that aims to provide quality technology solutions to businesses in a variety of

fields. NJ began its technology journey by founding Fin Logic Technologies (India) Pvt. ltd, a
group company, in 2000. The idea at the time was to develop software applications to support
the growing sales business (financial services) and to manage the IT infrastructure. Over the
years, the in-house IT team has accumulated extensive experience and skills in various fields
and technology domains. Today, the Fin Logic team has nearly 200+ employees with skills and
extensive experience in product development, software testing, infrastructure management, and
project management and information security. All of NJ Group's infrastructure and internal
systems are managed by Fin logic, which has also developed many state-of-the-art proprietary
applications that drive NJ's business.

18
2.5 ANALYSIS OF COMPETITORS

2.5.1 Prudent

Prudent was founded in 2000 with a clear vision to provide professional services in the area of
personal and corporate investments and over time has developed a niche segment with a world-
class client base. In recent years, Prudent Corporate Advisory Services has built in-house
capabilities to analyze funds on various parameters before proposing them to clients. The team
approach worked wonders and in the short span of just a decade, Prudent Group expanded its
horizons by providing specialized services in personal and corporate investment planning
through mutual funds, equities, derivatives, third party products, fixed income, life/general
insurance and Real estate products through various companies listed below.

2.5.2 Anand Rathi

Anand Rathi is financial institution based in 1994 supplying an extensive variety of monetary
offerings and wealth control to institutions, corporations HNIs and families. The corporation has
swiftly increased its footprint to over 350 places throughout India with worldwide presence in
Hong Kong, Dubai & London. Founded by Mr. Anand Rathi and Mr. Pradeep Gupta, the
organization these days employs over 2,500 experts worldwide. Anand Rathi has been named
The Best Domestic Private Bank in India by Asia money on their Fifth Annual Private Banking
Poll 2009. The corporation has emerged a winner throughout all key segments in Asia money’s
biggest survey of HNIs in India.

2.5.3Karvy

Since its inception in 1982, Karvy has demonstrated a dedication combined with a drive that has
earned the trust of diverse segments, companies, government agencies and individuals. Since
then, Karvy has played a crucial role as an interface between these actors. As mutual. Funds
emerge as an asset class in their own right, Karvy has made a strategic decision to harness the
power of the latest technology to bring its services up to date. Today they service nearly 60% of
Asset Management Companies (AMCs) through an extensive network of service centers with
assets valued at over Rs.2,20,341.59 million rupees. Mutual fund services have undergone a sea
change in the Indian market and asset management companies are finding their niche in by
offering unique product and service offerings.

19
 ANALYSIS OF COMPITITORS OF NJ ON BASIS OF COMMISSION

AUM to
Distributor AUM Commission
Commission %

2020-21

NJ India Invest 77,005 874 1.13

Prudent Corporate Advisory 24,915 263 1.06

Axis Bank 43,949 393 0.89

Anand Rathi Wealth 11,127 99 0.89

ICICI Securities 35,529 264 0.74

Karvy Stock Broking 9,302 60 0.65

ICICI Bank 38,526 227 0.59

JM Financial Services 10,758 59 0.55

Kotak Mahindra Bank 32,399 173 0.53

Standard Chartered Bank 14,712 77 0.52

State Bank of India 96,712 489 0.51

HDFC Bank 67,149 344 0.51

Daisha Services 18,027 92 0.51

HSBC 16,725 85 0.51

Citibank N. A 21,537 107 0.5

Julius Bair Wealth Advisors 15,180 71 0.47

IIFL Wealth Finance 23,480 89 0.38

Aditya Birla Finance 10,506 35 0.33

20
Batlivala & Karana Securities India 9,306 19 0.2

SPA Capital Services 14,545 24 0.17

2.6 ORGANISATIONAL STRUCTURE

Administration is a crucial element in a company and this is what HR department is responsible
for. Human Resources is defined as “A department that manages a company's most important
and valuable resource which is employees” It manages employees in their search, selection,
termination, hiring and training process. Human Resources also manages employee benefit
programs. It is an integral part of a company because it protects the image, success and interests
of the company by hiring workers, firing them and taking disciplinary action for violations.

A finance department manages a company's day-to-day and long-term financial strategy and
operations. Finance groups oversee incoming and outgoing payments, budgeting, treasury
management, book-keeping, financial reporting, and many other tasks related to corporate
finances. The size of the finance organization depends on the total number of employees in the
company, company revenue, industry and overall business strategy.

In marketing department, there are different roles and functions that supports the promotion of a
company and its product or service. The structure of a marketing department will vary based on
the needs of the business. The Marketing President manages the marketing management team,
including roles like the Product Manager, Advertising Manager, and Public Relations Manager.
Each manager organizes his or her team of staff members and specialists who conduct the work
of their group. For instance, the advertising manager may have a team of advertising specialists
and assistants who create advertisements, manage the placement of the advertisements, and
evaluate the effectiveness of the campaigns.

Operations management involves managing the operations and processes of an organization.

Some of the functions performed by an operations manager include supply chain management,
product design, forecasting, quality control, and delivery management. An operations manager
must have excellent organizational, coordination, and people skills and must be tech-savvy.

21
22
2.7 DEPARTMENTS: NJ WEALTH

2.7.1 HR DEPARTMENT

MANAGING
DIRECTOR

HR HEAD

ASSISTANT
MANAGER OF
HR

ZONAL HEAD COMPANY HR

Diagram 2.1

THE ACTIVITIES CARRIED OUT BY THE HR DEPARTMENT

• They carry out the recruitment and selection process based on certain criteria.

• Human resource planning is done by them to recruit candidates for the company.

• They also provide staff training, transfers and benefits.

• They also supervise the work of candidates or employees in the company.

23
2.7.2 FINANCE DEPARTMENT

CHIEF BOARD OF
EXECUTIVE DIRECTOR
OFFICER

CHIEF
VICE
FINANCIAL PRESIDENT
OFFICERS

INTERNAL
CONTROLLER TREASURER AUDITOR

MANAGERIAL
ACCOUNTANT

FINANCIAL
ACCOUNTANT

TAX
ACCOUNTANT

Diagram 2.3

FINANCE DEPARTMENT FUNCTION

 Accountant: An accountant prepares financial statements, documents monetary

transactions and income statements. The role of accountant has a seniority hierarchy,
with the chief accountant being highest in the ranks.
 Auditor: The main function of the auditor is to evaluate the documents produced by
the rest of the teams and to authenticate their accuracy. They identify any shortcomings
and mistakes for accountability.
 Budget Analyst: The Budget Analyst is adept at creating and maintaining a balanced
budget throughout the year. They plan the future financial responsibilities of the
company.

 Financial Controller: Also known as a controller, oversees the activities performed

by other financial functions such as auditing and accounting. The financial controller
reviews and prepares financial reports on tax compliance and risk management, among
24
other financial documents.

25
  Treasurer: The Treasurer helps plan and verify the integrity of business documents.
They also manage cash flows, prepare budgets and report to management for advisory
and accountability purposes.
 Payroll Clerks: Payroll clerks prepare records related to employee wages, taxes,
commissions, and other benefits for timely and accurate payment.

 Treasury Analyst: A treasury analyst analyses trading and investment accounts to

evaluate expenses and advise management on how best to minimize expenses.

2.7.3 MARKETING DEPARTMENT

Managing Director

National Head

Zonal Head

Regional Head

Branch Manager

Sales Exectutive

Diagram 2.4

MARKETING DEPARTMENT FUNCTION

DIRECT MARKETING

• Face-to-face sale: In this case, the customer service representative at a particular

branch makes an appointment with the prospect. Once the date is set, he informs the
marketing department executives to meet with him and provide him with all the details
of the plans offered by the fund.
• Telemarketing: In this type of marketing, the database of people is taken from the
telephone book or other random commercial sources. In some cases, members of the
profession are also contacted by telephone and informed about the funding.

• Advertisements: Asset management companies regularly advertise their plans in

newspapers, magazines, television and radio. Today, Mutual Fund NFOs (IPOs) come

26
 every two months and are heavily promoted through these media. The aim is to keep
investors informed about the programs offered by the funds and their recent
performance.

• Billboards and banners: In this type of marketing, the various funds publicize their
programs through billboards and banners placed at key points in the city where
passenger traffic is very high.

SALES THROUGH INTERMEDIARIES

Intermediaries include distributors, agents or brokers who are instrumental in increasing sales of
mutual funds. These persons or distributors are in direct contact with the investors. Most of them
are also involved in selling stocks and other investment vehicles. They are fully connected to the
financial markets, so they do a good job of convincing investors to invest in mutual funds. On
the other hand, clients prefer to trust those traders who give them correct information about the
fund and keep them up to date on market conditions. Regular meetings with traders also play an
important role in gathering mutual fund sales. Sales managers regularly meet with these dealers
and resolve their requirements and complaints either on the service side or on the customer side.
The goal is to establish a good business relationship and work cooperatively, as these traders or
brokers bring in 70-80% of the total turnover of mutual funds. Special training sessions are also
sometimes organized for new agents or distributors. The training includes giving details of the
systems, their investment objective, their performance in the market and also the systems of the
competitors. Large dealers sometimes have their own sub-agents or sub-brokers to expand their
sales activities.

OTHER CHANNELS

In addition to direct marketing and intermediaries, there are other distribution channels that have
also been developed by mutual funds. It includes banks and other financial institutions that
promote these mutual fund programs under the regulations mandated by SEBI and RBI. There is
a separate section for mutual funds in both private and nationalized banks. They have their own
executives with an efficient sales team to promote mutual funds to their clients.

27
2.7.4 OPERATIONS DEPARTMENT

MANAGING
DIRECTOR

OPERATIONAL
HEAD

MANAGER

ASSISTANT
MANAGER

ASSISTANT

Diagram 2.5

THE OPERATIONS OF MUTUAL FUND CONSISTS FOLLOWING

STEPS

• Transaction: Care must be taken to ensure that all information is filled in correctly
and without errors.
• Buy: Upon completion of the transactions, these forms are sent to AMC where the form
details are rescanned and sent to the head office. In the head office, the data sent by the
AMC is compared with the data of the employees in the operations department. If
deviations are found, they are checked and corrected.

• Systematic Investment Plan: After completing the buying process, the most
important thing is to decide which company's mutual fund you want to invest in and at

28
 what amount. The amount is determined by the investor himself.
• Switch: Switch means to transfer money from one type of mutual fund to another type
of mutual fund. This can be done through the NJ or from the investor. The main goal is
to maximize the “money” invested.

29
 • Redemption: Redemption means that the investor withdrew all of their money from
the NJ invest in India. Redemption occurs when the term of the money invested in a
mutual fund has expired. The expiry date of this investment fund has been reached. This
is also possible if you no longer want to invest your money in mutual funds for a while or
are satisfied with the profits you have made.
• Systematic transfer plan: This means that money invested in one mutual fund can
also be transferred to another type of mutual fund. For example, it can be transferred
from an IT branch to the textile industry.
• Systematic retirement plan: A systematic withdrawal plan is a financial plan that
allows a shareholder to withdraw money from an existing portfolio of mutual funds at
specified intervals. Money withdrawn via a systematic withdrawal schedule can be
reinvested in another wallet or used to pay for something else. Systematic retirement
planning is often used to fund retirement expenses. However, this type of plan can also
be used for other purpose.

ORGANISATIONAL STRUCTURE OF NJ

Managing director

vice president

associate vice-
president

Branch manager Branch manager Branch manager

Unit manager Unit manager Unit manager

relationship relationship relationship

executive executive executive

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 CHAPTER III

REVIEW OF LITERATURE

31
3.1 STUDY OF HNI WITH RESPECT TO MUTUAL FUNDS

A person buying mutual fund shares worth more than Rs. 2 lakhs at a time (single transaction)
are defined as HNI. The change in economy leads to many changes like fluctuation in
consumption patterns, spending, saving, investing and many other things. In India, the income of
people is increasing in recent years, however, the gap between income ranges is also increasing.
There are many options available for saving and investing in India. Choosing an option depends
on the behavior of the investor. Financial planning, awareness of the product, tax advantages,
liquidity, convenience are some important points when choosing an investment opportunity. For
the past few years, interest rates have been falling and hence other options such as stock trading,
gold borrowing, mutual fund investing, etc. are increasing. Investors of mutual funds belong to
five different types such as corporations, banks/financial institutions, foreign investment
institutions (FIIs), high net worth individuals (HNIs) and retailers. From these five types of
investors, the first three are institutional and the last two are individual investors. HNIs are those
retail investors investing more than Rs 2 lakhs.

32
3.2 REVIEW OF LITERATURE
H. Mehta (2021) explained that, derivative marketplace encourages the investor to take
greater hazard and earn greater return. So, on this manner it facilitates the Indian financial
system with the aid of using developing entrepreneurship. Derivative marketplace is greater
regulated and standardized so on this manner it offers a greater managed environment. In a
nutshell, we can say that the guideline of thumb of High Risk and High Return observe in
derivatives. If we're capable of take greater hazard we are able to earn greater profit.

P. Mittal (2020) found that Investors are familiar with various investment fund systems. Best
Return & Security and tax advantages are the main factors of mutual funds that attract investors.
The country's mutual fund industry has much to explore and look forward to. Despite the
challenges it faces in terms of lack of awareness and financial literacy, the industry is gaining
prominence with the rise of the country's young and working class.

N. Bhatnagar (2017) conducted a study to engage with alternative investment funds and review
their performance, particularly in the context of the opening up of the Indian financial
landscape. In this article, the author discusses the definition of Alternative Investment Funds, the
options available in the market, the growth trends in India, the regulatory restrictions and the
government's efforts towards procedural reforms leading to easier trade facilitation and analyses
how the market utilizes them out.

B. Aarthy, AA. Nair, P. Anju Sai (2015) explained that, capital appreciation, price, high returns
and tax benefits are some of the main factors HNI preferred for investing in mutual funds.
Mutual fund earnings are rising, although little investment in, but a large number of investors are
also investing money in the future. The researcher also emphasized the fact that investors accept
the fact that economic development can take place due to investments in mutual funds.

S. Veena (2015) has provided her views on the available investment paths for investors in the
research article entitled Alternative Investment: A Comprehensive View apart from traditional
channels such as bank deposits, government securities, etc. or investing in available markets,
which in turn is a traditional investment method. The article attempts to provide a
comprehensive Overview of investment opportunities, their past returns and how they are
trending into the future. It is interesting to note that those that were considered hobbies can
generate returns for the investor and make the investment worthwhile.

R. Jain (2014) explained that, Investment is the ability to consume and save in monetary terms
in the future. Two asset classes such as fixed income statements i.e. Preferred stocks, bonds, Fix
deposits and equity investments, i.e. Equity, property.
33
V. Virani (2013) found that, Investment plans are important to face future consequences and
achieve financial goals. Economic development is promoted with the help of investments.
Investing in the bank helps circulate funds for the development of nations. Financial
independence, increased wealth, and personal goals can all be achieved through investing. The
investment channels are divided into high and low risk instruments.

R. Sehdev, P. Ranjan (2009) found that, HNI mutual fund investors favored predominantly
mixed funds, debt funds, followed by diversified equity funds and sector funds. They
highlighted the key investment factor of the funds, not only for their benefits and transparency,
but also for the redemption period, information and return on the investment.

34
 CHAPTER IV

DATA PRESENTATION, ANALYSIS AND

INTERPRETATION

35
4.1 THE FOLLOWING DATA GIVES INFORMATION ABOUT
WHICH MUTUAL FUND DOES HIGH NET WORTH
INDIVIDUALS CHOOSE

4.1.1 Liquid fund

RETAIL
2%

HNI
14%

CORPORATES
84%

Pie Chart 4.1

The above Pie Chart 4.1 gives us information that the 14% of HNI’s invests in Liquid fund
compared to Retail investors and corporates. Liquid funds generate higher return on investment
with short term investments and gives tax benefits so we can say that the HNI prefers liquidity
of money with tax benefits and low interest risks.

36
 4.1.2 GILT FUNDS

RETAIL
7%

HNI
37%

CORPORATE
56%

Pie Chart 4.2

The above Pie Chart 4.2 gives information that 37% HNI’s invests their money in Gilt Funds.
As compared to retail investors and the corporates. Gilt funds invest 80% money in government
securities which invest the amount in low-risk debt instrument. So, we can conclude that HNI
invests in gilt funds because they are less risky.

37
 4.1.3 DEBT FUNDS

RETAIL
4%

HNI
36%

CORPORATE
60%

Pie Chart 4.3

The above Pie Chart 4.2 gives information that 36% HNI’s invests in Debt Funds as compared
to Retail investors and Corporates quite same as Gilt Funds. Debt funds are less risky as
compared to equity funds. Debt funds are investment which are lend to a borrower as debt and
the borrower pays interest which goes to the investor. So, we can conclude that corporates invest
huge amount in debt funds which are less risky and gives sufficient returns.

38
 4.1.4 EQUITY FUND

HNI
9%

RETAIL
36%

CORPORATE
55%

Pie Chart 4.4

The above Pie Chart 4.4 gives information that 9% HNI’s invests in Equity Funds as compared
to Retail investors and Corporates. Equity funds are high risky funds, they are volatile in nature,
and diversifiable. So, we can conclude that Corporates shows huge investment in equity funds as
compared to HNI who invest less in high-risk funds which are intensely volatile.

39
 4.1.5 HYBRID FUND

RETAIL
1%
HNI
4%

CORPORATE
95%

Pie Chart 4.5

The above Pie Chart 4.5 gives information that 4% HNI’s invests in Hybrid Funds as compared
to Retail investors and Corporates. Hybrid funds invest money in different asset classes like
gold, equity, debt, etc. which diversifies the invested amount, so we can conclude that
corporates hold the total of 95% investment in hybrid funds as compared to HNI who do not
show much investment in such hybrid funds.

40
 4.1.6 INDEX FUNDS

RETAIL
25%
HNI
42%

CORPORATE
33%

Pie Chart 4.6

The above Pie Chart 4.6 gives information that 42% HNI’s invests in Index Funds as compared
to Retail investors and Corporates. A key advantage of index funds is that they are relatively
low-risk options for investing in stocks and bonds that are designed for consistent long-term
growth. They are inherently diversified, representing many different sectors within an index that
protects against big losses.

41
 4.1.7 FUND OF FUNDS

CORPORATE
16%

RETAIL
22% HNI
62%

Pie Chart 4.7

The above Pie Chart 4.7 gives information that 62% HNI’s invests in Fund of Funds as
compared to Retail investors and Corporates. In Fund of Funds scheme gives investor
professional wealth management service. The funds of fund give investor option to invest
money in different funds with different underlying assets. So, we can say that HNI mostly prefer
Funds of funds because they allowed to invest money in different diversified segment and gives
high profit with low risk.

42
CHAPTER V

FINDINGS

43
FINDINGS

 The study helped me to acquire a lot of knowledge in addition to theoretical

and academic learning.

 Through this internship I learned how the corporate world works, the roles of the
different departments of the company.

 The study aids me to understand the workplace culture at NJ Wealth.

 Through the study, I learned about the invest avenues which HNIs prefer for investment.
It show that return potential and liquidity continue to be top priorities when it comes to
factors responsible for investing in mutual funds for HNIs.

44
 CHAPTER VI

RECOMMENDATIONS

45
RECOMMENDATIONS:
There are various recommendations based on my study which are as follows:

1. NJ Wealth should get involved with community through volunteering and other

programs as a way to feel connected and find potential clients.

2. NJ Wealth should educate HNIs clients about the high return funds i.e. hybrid funds and
equity funds where HNIs shows low investment because of the risk.

3. NJ Wealth should conduct seminars and workshops for HNIs to spread awareness
about various investment options available in company.

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CHAPTER VII

CONCLUSION

47
CONCLUSION
To achieve success in financial market mutual fund companies should implement strategies
which can fulfil the expectations and requirements of investors. There are huge number of
investors in mutual funds. We can classify the investors in HNI, Retail investors and
organizations. A person buying mutual fund shares worth more than Rs. 2 lakhs at a time (single
transaction) are defined as HNI; Retail investors are individual investors who invests through
broker and corporates are the companies which invests their money in other companies.

The highest investments by HNIs in mutual funds are in index funds and funds of fund schemes
which are less volatile in nature, gives expected return, diversifies the invested amount, and low
investment in hybrid funds which are highly volatile in nature. HNI investors have most of their
investments in fund schemes in which money is diversified in different underlying assets which
are less risky, gives tax benefits, and provides diversified segments. Awareness about equity and
hybrid funds among the HNI investors is needed, company must arrange workshops and
seminars to educate the investors. There are lot of schemes for which investors need the
guidance and suggestions from the company. The report can be concluded by the stating that
investors prefer mutual funds which are less risky and highly liquid.

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BIBLIOGRAPHY

49
BIBLIOGRAPHY
References:

• IBMRD's Journal of Management and Research Volume-2, Issue-1, March 2013

• P. Mittal (2020) investors’ behavior towards Indian mutual funds investment
• N. Bhatnagar (2017) What are Alternative Investment Funds
• B Arathy, AA Nair, P Anju Sai (2015) a study on factors affecting investment on mutual
funds and its preference of retail investors

• S. Veena (2015) Alternative Investment: A Comprehensive view

• H. Mehta (2012) Financial Awareness of HNI Clients about Futures & Options

• R Sehdev, P Ranjan (2009) study on investor's perception towards mutual fund

investment

Websites:

• NJ Wealth information from https://www.njwealth.in

• M. Pattabiraman (2021) Data of mutual funds- https://freefincal.com/which-mutual-
funds-do-retail-and-high-net-worth-investors-choose
• Competitor analysis (2021) https://cafemutual.com/news/industry/22523-nj-india-
prudent-command-highest-commission-share

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