This is a summer training report which is base on mutual fund overview and customer perception regarding to mutual fund.

1. SUMMER TRAINING PROGRAMME
2012
Indian Mutual Fund Industry
Company:
“UTI Assets Management Company Ltd.”

2. A Project On
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Customer Perception toward the
Mutual Fund
Unit Trust of India Mutual Fund
Submitted to
Advent Institute of management studies, Udaipur
In partial fulfilment of
Master of Business Administration
(MBA)
Submitted by: Under Guidance of:
Pushpendra Kumar Amit Sharma
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3. Student, AIMS CM, UTI
MF, Ajmer
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Contents
Acknowledgement…………………………………………………….
Declaration……………………………………………………………
Preface…………………………………………………………………
Objective of study…………………………………………………………..
1. Introduction
2. Evolution of Indian Mutual Fund Industry
3. Mutual Fund Terminology
4. Risk Involved In Investing In Mutual Fund
5. Types of Mutual Funds
6. Benefits of Mutual Funds
7. Customer relationship management
8. Product life cycle of mutual fund
9. Similarity with Various Assets Classes
10. Regulatory Framework for Working of Mutual
11. Company profile
12. Research Design
13. Data collection method
14. Finding
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4. Acknowledgement
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“Life is Journey; it’s not the years in your life that count. It’s the life in your
years.
But Life can’t be completed without the support of many people
Any accomplishment requires the efforts of many people and this work is not different. I
would like take this opportunity to thanks UTI Mutual Fund for giving me an
opportunity to be a part of their esteem organization and enhance my knowledge by
granting permission to do summer training project.
I am very grateful to Mr. Amit Sharma, Chief Manager, UTI AMC LTD. Ajmer, for
being to give me some of his valuable time and able guidance. Without his guidance,
support and encouragement. It would not have been possible to complete this project
successfully.
I am highly indebted to Mr. Akhilesh Gupta, Relationship Manager, UTI AMC
LTD. Ajmer, who has provided me with the necessary information and his valuable
Suggestions and comments on bringing out this report in the best possible way.
PUSHPENDRA KUMAR
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5. Declaration
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I Mr. Pushpendra kumar hereby declare that this Project Report entitled “Customer
perception towards Mutual Fund” submitted in the partial fulfilment of the
requirement of Master of Business Administration (MBA) of ADVENT INSTITUTE
OF MANAGEMENT STUDIES, UDAIPUR is based on primary & secondary research. Used
data founded & Collected by me in various newspapers, books, Magazines and websites
under guidance of my project guide Mr Amit Sharma.
DATE: 15 July 2012
Pushpendra Kumar
Student
AIMS, Udaipur
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6. Preface
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“Give a man a fish, he will eat it.
Train a man to fish, he will feed his family.”
The above saying highlights the importance of practical knowledge. Practical training is
an important part of the theoretical studies. It is of an immense important in the field of
management. It offers the student to explore the valuable treasure of experience and an
exposure to real work culture followed by the industries and thereby helping the student
to bridge gap between the theories explained in the book and their practical
implementation.
Research project an important role in future building of an individual so
that he/she can better understand the word in which he has to work in future. The
theory greatly enhances our knowledge and provides opportunity to blend theoretical
with the practical knowledge.
I complete the research project on “customer perception towards the
mutual funds”. I have tried to cover each and every aspect related to the topic with best
of my capability.
(PUSHPENDRA KUMAR)
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7. Page | 7 Objective of study
The study aims at analyzing the following major issues:
To enhance our knowledge about mutual fund
The objective of this study is to measuring satisfaction level of Customers
regarding MF.
To study the consumer awareness regarding mutual fund
To analyze the perception of existing investors about UTI Mutual Fund.
Evaluate perception towards risk involved in mutual fund in comparison to
avenues
To study the diversification of mutual fund.
To know the different attitudes of people regarding Risk, Rate of Return, period of
investment etc.
To Measure the Awareness of different services of UTI MUTUAL FUND in Existing
Investors. Like their Online & Offline after sale Services
To study the marketing of mutual fund in india
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8. Page | 8
Introduction
A Mutual is a pool of money, which is collected from many investors and is invested by
an asset management company to achieve some objective of the investors. Thus, a
mutual fund is a collective investment process. An Asset management Company(AMC)
collects many investor money. It invest this in various securities to generate return for
the investor. Investor get returns after deducting the related expenses. If there is any
loss, it would be borne by the investors. An Asset management company manage the
pool of money; therefore, it is also an “indirect form of investment” for investors.
INVESTOR
E INVEST
POOL OF 5000
A MONEY
E
100 CR
INVESTOR
A INVEST
5000
B
D
INVESTOR B C INVESTOR
INVEST D INVEST
5000 5000
INVESTOR C
INVEST 6000
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9. It is necessary that every pool of investor should have one common investment objective
because the investment objective decides where the investment is made. If the common
Page | 9 objective is “to take risk for higher returns in medium to long term “then investment will
be made in equity. If the objective is lower returns in medium to long term” then
investment will be made in equity. If the objective is lower return with safety of principal
then investment is done in debt instrument.
The pool of money witch is contributed mutually by all investors are the benefits will be
shared mutually by all investor is the mutual fund.
Thus a Mutual Fund is the most suitable investment for the common man as it offers an
opportunity to invest in a diversified, professionally managed basket of securities at a
relatively low cost.
Mutual Fund Operation Fund Chart:
Investor
Returns Fund
manager
Securities
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10. Page | 10
Evolution of Indian Mutual Fund Industry
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 corers 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 Canara bank 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)
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11. 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
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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
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12. 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
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manage assets of Rs.153108 crores under 421 schemes.
Mutual Fund Terminology
NET ASSET VALUE (NAV):
(NAV) represents a fund's per share market value. This is the price at which investors buy
fund shares from a fund company and sell them to a fund company. It is derived by dividing
the total value of all the cash and securities in a fund's portfolio, less any liabilities, by the
number of shares outstanding. An NAV computation is undertaken once at the end of each
trading day based on the closing market prices of the portfolio's securities.
For example, if a fund has assets of $50 million and liabilities of $10 million, it would have a
NAV of $40 million.
The net asset value more popularly known as the NAV is the most important thing for
the investor in a mutual fund because all purchases and sales that they make are related
to this figure. The NAV will determine the gains or losses that they will make on the
investment. Consider the NAV as being similar to the price of a share as both of them
play the same role of determining the value of the investment.
There is however big differences between the NAV and the price of an equity share. The
first one is that the NAV depends upon the value of the assets being held by the scheme.
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13. Thus the value of the NAV can rise only when the value of the underlying holdings go up.
In this case mere demand and supply can have no impact on the NAV of the scheme.
The price of a share on the other hand can be affected by demand and supply even when
other fundamental factors are constant. Thus one might see a sharp spike in the price of
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a share even when there is no other movement all around. This will not happen in a NAV
and hence investor who mistakes a mutual fund for a share will learn it the hard way
that NAV does not just double or triple based on demand for the fund. However if there is
large scale churning by short term investors then this can work to the detriment of long
term investors not because NAV will suddenly become half but because the long term
investors end up bearing a larger part of the cost.
The NAV is the value of all the investments in the scheme plus the current assets of the
scheme less the current liabilities of the scheme. This entire figure is then divided by the
number of units outstanding in the scheme to get the NAV per unit. This shows the value
of each unit of the scheme and it is used for the purpose of buying and selling units by
the fund
An important thing is the value of the NAV at a particular point of time does not matter.
All that matters is the future growth potential in the scheme, which is based on the
change in the value of the assets held by the scheme. Thus for example an Rs 10 NAV if it
rises by 20% will go to Rs 12 while the same portfolio held by a scheme with a NAV of Rs
30 will go to Rs 36. In that sense if there is a decision regarding the purchase of a unit in
either of the schemes then the actual NAV does not matter but only the growth there
does.
The NAV of the scheme is usually calculated as follows
NAV (Rs) = Market or fair value of schemes Investments + Current assets - Current
Liabilities and provisions
Number of units outstanding under the scheme
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14. LOADS:
Loads are an extra charge that investors pay to the mutual fund. This is an additional
expense for the investor. Loads are of two kinds - entry loads and exit loads. Mutual
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funds can charge either of these loads or even both of these loads so one has to check
about the features of a particular scheme as the type of loads as well as the amount of
load differs from scheme to scheme. A load is usually calculated as a percentage of the
NAV. An entry load is the load that is paid by the investor when they buy units in a
mutual fund. The cost for the investor will rise to the extent of the load and they will get
a lower number of units than what would have been available had there been no entry
load. For example if there is an entry load of 2% in a scheme then an investors who goes
out to buy units of the fund when the NAV is Rs 10 will get it at a cost of Rs 10.2.
An exit load is the load that is charged to investors when they withdraw money from a
scheme. Here the investors get a price lower than the NAV applicable on the particular
date. For example when investors goes to sell units in a scheme with an exit load of 2%
when the NAV is Rs 20 then the investor will get a sale value of Rs 19.6 per unit.
In both the cases these represent an extra charge that is paid by the investors when they
make a buy or sell decision in the units of the fund. In this entire process two more terms
come into the picture. The first is the repurchase price which is the price paid by the
fund to the investor when it buys units from them. The other term is the sale price, which
is the price at which the fund sells the units to the investor.
SCHEME OPTIONS:
After selecting a particular mutual fund and a specific scheme there is still some more
work to be done by the investor because they have to select the options available to them
within a scheme. There are three such options available and these are the dividend
payout, dividend reinvestment and the growth option
In the dividend payout option the dividend declared by the scheme is paid out in cash to
the investor. Investors have to be careful and select this as the option when they want
the actual payment to be received in cash. One has to note that the dividend declaration
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15. is always on the face value of the units and not on the current value. Thus if the NAV of a
scheme is Rs 55 and the fund declared a 60% dividend then the dividend declared is Rs 6
per unit because the percentage figure is considered on the face value of Rs 10 and not
the current NAV of the scheme.
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The dividend reinvestment option is one where the dividend declared by the scheme is
then poured down back into the scheme at the applicable NAV. In reality what happens is
that the investor first receives the dividend on paper and then the same figure is
converted into additional units. An investor might earn Rs 6.000 as dividend but that is
not received in cash but will be converted into additional units. Many investors select the
dividend option but tick the dividend reinvestment part resulting in no payout coming to
them.
The growth option is one where the gains of the scheme are added on to the NAV of the
scheme and no payout is received. This means that the value of the NAV keeps on
increasing without any intervention from the fund. If there is a scheme that has grown
consistently over the years then it will be witnessed that the NAV has also gone quite
high while in the dividend option this will keep reducing as and when the dividend is
paid.
EXPENSE RATIO:
There are various expenses that are incurred by the mutual fund in respect to its
operations. There are two expense ratios that one will read about. The first is the initial
issue expense ratio which is the expense incurred at the time of a new fund offering. The
other is the expense ratio that is witnessed during the normal operation of the scheme.
There are limits prescribed for various expenses. According to the regulations issued by
the Securities and Exchange Board of India (SEBI) the total initial expenses shall not
exceed 6% of the initial resources raised under a close ended scheme and any excess
over this figure will have to be borne by the asset management company (AMC). There
has been a recent change to the provisions of the charging of the initial issue expenses
for an open ended scheme and there cannot be any initial issue expenses over and above
the entry load on the scheme. The initial issue expenses will include advertising
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16. expenses, agent commission, registrar expenses, marketing expenses, banker’s fees, legal
fees, printing and distribution expenses etc.
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There is a bit of calculation involved in terms of the maximum recurring expenses
permitted by SEBI as it depends upon the assets under management. The list of such
expenses include investment management and advisory fees, trustee fees, custodian fees,
marketing and selling expenses, registrar and transfer agent fees, audit fees,
communication costs, cost of providing account statements, dividend, redemption
warrants, cost of statutory advertisement and other expenses.
Investors need to watch this final figure as this will be the one that will affect them
because their earnings, which are linked to the NAV will be the net figure after the
scheme has charged off the expense made. While a better performing scheme might have
some higher expense one has to look carefully at the total expense figure and how they
shape up over a period of time.
NEW FUND OFFER (NFO):
A new fund offer is a new scheme launched by a mutual fund. It is called a NFO to
differentiate it from the IPO of a stock because there was large confusion among
investors who were being sold new units of mutual fund schemes like a new share
offering.
As can be seen by the meaning of the NAV of the scheme there is no way that a NFO will
open at double or triple the value of the offer price because the assets of the scheme will
have not grown in value by the same extent during the period from which the new offer
closed and the scheme then reopened for investment.
There is a difference also within the way in which a new offering has to be evaluated
because there cannot be under pricing or overpricing of the issue which can be the case
with a share offering and hence one has to be careful in the way in which one is able to
evaluate these offerings that are available for the investor. In such offers unlike other
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17. mutual fund schemes there is also no track record to measure the past performance of
the scheme.
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SYSTEMETIC INVESTMENT PLAN (SIP):
Systematic Investment Plan is often called SIP and this is a method of investing used by
mutual fund investors. In this method there is an investment of a fixed sum on the same
day of each month for a period of say 6 months or 1 year by an investor. This ensures
that there is a regular investment each month and the idea is to ensure that the highs and
lows are averaged out so that the investor is able to get an average price for the units.
The way a SIP plan works is that the investor has to decide on two factors when the
decision is made. The first is the amount of investment that one would like to make and
this could be something as low as Rs 1,000 or even higher like Rs 10,000 as this can be
selected depending upon the profile of the investment and the extent of funds that are to
be invested. The next things to decide is the period of the investment and this will be 6
months or a year, which will enable the actual benefits for the investor to flow in.
The benefit for the investor is that when the prices are high there are a few units that are
allotted to him but when the prices drop the same amount of money will ensure that
there is automatically a higher allocation of units. This ensures that the investor is able
to gain in terms of higher allocation when the price is low. This will also ensure that the
investor does not face the risk of the onetime investment that would be present had the
entire investment be made in a lump sum at a single time point.
SYSTEMATIC TRANSFER PLAN (STP):
Systematic transfer plan is a variant of the SIP that has been explained above. In a SIP the
investor makes a direct investment into a scheme on a regular basis. On the other hand
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18. in STP there is a regular transfer of money into a particular scheme but this is a transfer
from an existing scheme by an investor.
This is useful for any investor who has funds at his disposal and they still do not want to
invest the whole amount at one go. What can be done in such a situation is that the funds
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are first transferred to a debt oriented scheme and from that scheme there is a
movement each month amounting to a specific sum into an equity oriented scheme.
This will ensure that two objectives of the investor are met. The first is that the funds of
the investor are not lying vacant and earning a low rate of return but they will be earning
a slightly higher figure in the debt scheme and at the same time there is the benefit of the
systematic investment that is available because the money is transferred each month
Risk Involved In Investing In Mutual Fund
Mutual Funds do not provide assured returns. Their returns are linked to their
performance. They invest in shares, debentures, bonds etc. All these investments involve
an element of risk. The unit value may vary depending upon the performance of the
company and if a company defaults in payment of interest/principal on their
debentures/bonds, the performance of the fund may get affected.
Besides in case there is a sudden downturn in an industry or the government comes up
with new a regulation, which affects a particular industry or company the fund can again
be adversely affected. All these factors influence the performance of Mutual Funds.
Some of the Risk to which Mutual Funds are exposed to is given below:
 Market risk -If the overall stock or bond markets fall because of overall
economic factors, the value of stock or bond holdings in the fund's portfolio can
drop, thereby affecting the fund performance
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19.  Non-market risk - Bad news about an individual company can pull down its
stock price, which can negatively affect fund holdings. This risk can be reduced by
having a diversified portfolio that consists of a wide variety of stocks drawn from
Page | 19 different industries.
 Interest rate risk - Bond prices and interest rates move in opposite directions.
When interest rates rise, bond prices fall and this decline in underlying securities
affects the fund negatively.
 Credit risk - Bonds are debt obligations. So when the funds invest in corporate
bonds, they run the risk of the corporate defaulting on their interest and principal
payment obligations and when that risk crystallizes, it leads to a fall in the value
of the bond causing the NAV of the fund to take a beating.
Types of Mutual Funds
Mutual Funds can be classified on the basis of nature of schemes and the nature of
investments. The way in which the features of the schemes are also considered will
also impact their classification.
On the basis of nature of Schemes:
On the basis of nature of schemes, Mutual Funds can be divided into three types. The
classification is as follows-
Open Ended Funds:
Open ended Mutual Funds have an infinite life which means that there is no ending
date of the scheme. This scheme can continue to go on forever and due to this factor
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20. the scheme allows investors to come in and go out of the fund when they wish subject
to some specific conditions for a few funds. For example, a large number of schemes
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in the Indian market are open ended schemes that invest in equities where they can
continue to operate for years on end. The real benefit of these schemes is that an
investor can put additional money into the scheme or take their money out
When they feel like it rather than this being decided as a specific date by the fund or
some other entity.
Close Ended Schemes:
A close-ended fund or scheme has a stipulated maturity period e.g. 5-7 years. The
fund is open for subscription only during a specified period at the time of launch
of the scheme. Investors can invest in the scheme at the time of the initial public
issue and thereafter they can buy or sell the units of the scheme on the stock
exchanges where the units are listed. In order to provide an exit route to the
investors, some close-ended funds give an option of selling back the units to the
mutual fund through periodic repurchase at NAV related prices. SEBI Regulations
stipulate that at least one of the two exit routes is provided to the investor i.e.
either repurchase facility or through listing on stock exchanges. These mutual
funds schemes disclose NAV generally on weekly basis.
Interval Fund:
There is another category of funds whose characteristics fall between open ended
and close ended funds and these are known as Interval Funds. These funds are not
completely close ended or completely open ended in the sense that they are not of a
Fixed duration and they do allow investors to make purchases once the initial offer
period is over but they will not be available for purchase and sale every day. There
will be a specific time period like a few days every three months or every six months
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21. when investors can buy and/or sell these units back to the funds. Thus they provide
liquidity without compromising on the restricted nature of the fund.
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On the Basis of Nature of Investment:
On the basis of nature of investments, Mutual Funds can be divided into thirteen types.
The classification is as follows-
Equity Schemes:
Equity schemes invest the amounts that they collect from investors into stocks of
various companies listed on the stock exchanges as well as those that are unlisted.
These schemes are also called growth schemes because the idea behind such
investments is to earn a high return through the rise in the value of the investment.
The wide range of stocks available in the market and the different nature of styles of
management of the schemes will result in a different profile for various schemes within
this area. For example a scheme which invests in large cap stocks will be different
from a scheme that will invest its funds into mid cap companies.
In addition there are schemes, which are diversified across various sectors without any
bias towards market cap of the stocks it holds. In terms of other styles one can see
funds that select stocks based on their dividend yield and these are called dividend
yield funds.
There is a chance of a high gain in such schemes and in the last three years the returns
on many schemes have even crossed more than 100% in a single year. Many investors
however forget that there is a downside to the whole investment as a fall in the equity
market can result in a fall in the value of the scheme leading to a capital loss for the
investors.
Sectoral Schemes:
These are a variant of equity oriented schemes where the risk for the investor is
higher than the diversified equity schemes. The funds of such schemes are
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22. invested into the shares of a particular sector only or it could be in companies
that comply with a particular theme only.
Good examples of such schemes are those which invest in the shares of
information technology companies or companies from the fast moving consumer
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goods (FMCG) sector. There is a possibility of a higher return from such schemes
because even if the whole market is not doing well a particular sector might be on
the growth path. At the same time this has a higher risk because it is possible that
nothing happens to a particular sector while the overall market is rising or it
could be that just a specific sector is doing badly due to specific reasons. Further
with other investment options closed the entire portfolio of the scheme will be
subject to a similar kind of risk leading to very little diversification in the
portfolio.
Equity Linked Savings Scheme:
Equity linked savings schemes are also known as ELSS or tax savings schemes.
These are like diversified equity schemes in terms of their portfolio composition
but they give investors a tax benefit that other schemes do not. Investment up to
Rs 1 lacks into these schemes qualifies for a deduction under Section aoc of the
Income Tax Act along with several other specified investment options.
Investors who put money into such schemes are looking at earning higher returns
on their investments and at the same time save on the tax. Unlike normal equity
schemes there is also a three year lock in for such schemes.
Index Funds:
Index funds are known as passive schemes because here the fund manager does
not have to take active investment decisions regarding selection of companies for
investment. The corpus of these schemes is invested in such a manner that it
mimics an index that is being tracked by the fund. Thus for example a scheme
Tracking the Sensex will have its portfolio in the exact proportion that the 30
sensex scrip’s are in and hence the performance should mirror the behavior of the
index being tracked. At regular periods of time the portfolio is rebalanced so that
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23. any deviation is corrected. These are meant for investors who would like to
ensure that their returns match that of a specified index.
Income Schemes:
Page | 23 Income schemes invest their assets into debt instruments that are either of
medium to long term in duration. This means that the scheme will invest the
money into debt instruments that mature after a few years and these can stretch
to several years.
In terms of the choice available for the fund manager there are bonds, debentures,
government securities and other debt instruments. Typically most of these
schemes hold a mixture of bonds, debentures, gilts and even short term securities
in their portfolio and they keep changing the mix depending upon the fund
manager’s outlook for the future.
These schemes are steady in the growth that they witness and hence one should
expect returns aligned to the performance of the debt market, which means that
under steady conditions it should give reasonable returns and the risk to capital is
accordingly lower. However the returns of the scheme turn negative when rates
rise and positive when t he rates fall in line with the behavior of the debt
instruments.
Liquid Funds:
Liquid schemes are meant for very short term investors where the investor
horizon ranges from a couple of days to around a week or slightly more. The
liquid schemes invest the money into overnight call money market and extremely
short term options so that there is very risk for investors in terms of a capital loss
in these schemes.
Ideally when the investment is made in this manner liquid scheme should not
show any fall in their value but the returns will vary depending upon the rates
prevalent during the time period of investment. Thus liquid schemes are meant to
be the safest type of schemes where the risk for the investor is minimum and
returns are consequently lower.
Short term Schemes:
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24. Short term schemes are debt oriented schemes and are meant for investors who
want to park their money for a few months. Thus these are meant for those who
do not want to invest for a just a few days and neither for a very long period
amounting to a few years. Thus it is for middle of the road investors who do not
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fall into either the very short or the long term category. The portfolio of short
term schemes consists of short term securities including gilts, certificates of
deposits and in several cases even bank deposits
The returns from such schemes is not very high but similarly the risk is also
considerably lower and this is useful for several investors who would like to put
their money away for a short period of time and earn high returns during this
period.
Floating Rate Funds:
One of the basic features of debt schemes is that the value of the debt holdings
will fall in value as the interest rates rise in the economy and they will rise when
the rates fall. This makes investors in debt schemes susceptible to losses when
conditions are adverse in the bond market. Floating rate funds are those schemes
which invest their corpus into floating rate securities which means that the
interest rate on these funds are reset at regular intervals. This makes them better
positioned to tackle tough times in the debt market as their earnings and rates
will change depending upon the resetting of the rates for the securities held.
Again these schemes can be either short term or long term schemes.
Gilt schemes:
Gilt schemes are those schemes that invest their assets into only government
securities. The gilt schemes can be short term or long term schemes depending
upon the composition of the portfolio of the scheme. These schemes have no
credit risk, which means that there is no possibility of the investments of the
scheme turning out to be worthless because the issuer has gone bankrupt as in
this case the issuing authority is the government itself.
This does not mean that there is no risk for the investor in such schemes because
there is interest rate risk which means that in case interest rate rises there will be
24 | P a g e

25. a fall in the value of the holdings and a consequent fall in NAV for the investors
because the value of the holdings will depend upon the conditions in the debt
markets and the movements therein.
Page | 25 Monthly Income Schemes:
Monthly income schemes are debt oriented schemes with a small dose of equity
holdings. These schemes invest a large part of their corpus ranging from around
80 to 95% in debt while the remaining 5 to 20% is in equities. There are a large
number of such schemes in the market with different levels of equity. The average
level of equity holdings of these schemes is around 10% but in the last few years
several variations with a higher level of equity have entered the market. Investors
should know that the higher level of equity can raise the earnings of the scheme
above that witnessed in pure debt schemes but it will also raise the risk level
whereby even the higher debt constituent will not be able to dictate the overall
performance of the scheme.
Balanced Schemes:
Balanced schemes are a mixture of equity and income schemes whereby they hold
both equities and debt in their portfolio. Recently there was a change whereby in
order to qualify for tax benefits in terms of exemption from dividend distribution
tax balanced schemes need to hold an average 65% of assets as equity. Due to this
one will find the average equity holdings of balanced schemes rising above this
level in the last few months.
These schemes are meant for those who want to earn some returns on their
investment but would like a small element of stability built into the scheme but
with the new norms this will be slightly skewed in favor of equity.
Fixed Maturity Plans:
Fixed maturity plans known as FMP are plans that are in operation for a short
period of time but they act like a quasi fixed deposit for the investors. This is
because the fund manager selects the securities in the portfolio in such a manner
that it matures on the same date as that of the scheme. This results in the
25 | P a g e

26. situation where the investor will get a return near the yield of the investments
when they were purchased because of reduced risk in the investment.
There is a reduced risk in this kind of an investment because of the fact that when
the debt instruments in the scheme are held till maturity the intervening
Page | 26
movement of interest rates in the market will not impact the investor in terms of
the final returns because of the fact that the price of the debt instrument will
converge to its face value at the time of maturity.
Fund of Funds:
Fund of funds is another type of scheme available in the market. This scheme
invests its funds into another mutual fund scheme and is hence known as fund of
funds. The target objective of the scheme is met through the selection of several
other schemes in the portfolio with the desired weights. Several funds invest their
corpus into schemes of their own fund house while another variety of fund of
fund schemes invest the amount into schemes from other fund houses too.
RISK V/S. RETURN
R Sectoral Fund
E
T Equity Fund
U
Index Fund
R
N Balanced Fund
Debt Fund
Liquid Fund
RISK
26 | P a g e

27. Benefits of Mutual Funds
Page | 27
Small investors can enjoy several advantages when they invest through the mutual fund
route. Not all mutual fund schemes or investors can boast to give all these benefits to the
investors but each one gives you one benefit or the other.
Small Amounts:
The biggest benefit for small investors is that they can invest using very small
amounts of money. In the absence of mutual funds many of these investments
would not have been possible at all. For example one can invest regularly each
month into a mutual fund scheme with a sum as low as Rs 500 or Rs 1000 each
month. A similar amount would have got the investor precious little in terms of
actual holdings in the debt market. In case of a bond issue where the face is value
is Rs 10,000 they would not even be able to procure 1 bond.
If an investor has say Rs 1,000 with him then quite a few stocks would be out of
reach because their values are more than the sum available for investment. On the
other hand they can use the same sum to buy the available number of mutual fund
units
The use of the small amounts for investment is not restricted to just the initial
investment but is applicable at all points of time, This means that at any point of
time if there is some amount lying in the account then this can be put to use
whereby it will earn a higher amount of return than what would have been the
case had it just remained in the savings account. In fact the money here can do
things which would not be possible otherwise. This means that the amounts can
be utilized as pert he need both in terms of investing and withdrawal
27 | P a g e

28. The use of the money in terms of withdrawing it from the scheme does not
receive as much attention as the investment part but its role is no less important.
Being able to get some of your money back when you need it without disturbing
the other part of your entire investment is a greater benefit for investors because
Page | 28
it ensures that their entire investment plan does not go for a toss due to some
small decision on the side.
Diversification:
Even if an investor is able to buy a few assets with the amounts available with
them there is little scope for diversification, which results in an increase in risk.
Diversification in simple words is nothing but holding a large number of stocks or
securities so that the entire holding is not influenced in the same way due to a
certain event in the market. An investment in a mutual fund can provide one with
the necessary diversification even with the small amounts that one may have.
For example, with a sum of Rs 5,000 an investor might be able to get just 1 share
of Infosys,1 share of Bajaj Auto and 1 share of Tata Steel at July 2006 price levels.
On the other hand the same amount invested in a mutual fund which is diversified
in nature would help the investor get around 20-25 shares which
would reduce the risk as compared to the small holdings in an individual capacity.
There are different levels of diversification that investors can make use of. The
most common one is to ensure that in a particular holding in an asset class all the
investments do not bear the same functions or features so that they will not move
in a single direction based upon the happening of certain events. However taken
further the real benefit of diversification is to ensure that your entire investment
portfolio is such that there is adequate breadth as well as variety in it.
An individual can diversify across various asset classes when their portfolio
increases. This is possible with the help of a mutual fund whereby the money can
be moved to different types of schemes both in the equity as well as the debt side.
Similarly one can now also ensure that the money is diversified between
28 | P a g e

29. investments in various countries as there are international funds where one will
hold equities or debt instruments of foreign countries. This gives the investor a
benefit of really ensuring that his money is working well.
Page | 29
Professional fund manager:
The basic advantage of funds is that, they are professional managed, by well
qualified professional. Investors purchase funds because they do not have the
time or the expertise to manage their own portfolio. A mutual fund is considered
to be relatively less expensive way to make and monitor their investments.
Economies scale:
Mutual fund buy and sell large amounts of securities at a time, thus help to
reducing transaction costs, and help to bring down the average cost of the unit for
their investors..
Liquidity:
There is adequate liquidity for mutual fund investors when they want the necessary
funds. This means that the fund will be available to the investor when they require it
would go through large amounts of paperwork. This might not be the case with regular
investments where it might take several days for one to liquidate the necessary
amounts.
Using the right combination one can create the required liquidity in the mutual fund
portfolio. One of the best cases of liquidity is with respect to equity oriented schemes.
In several cases with respect to various shares it is very much possible that an investor
will be unable to sell the shares on particular days the volumes in the scrip have dried
up. On the other hand when an investor puts through a sale transaction on a mutual
fund then this has to be executed at the prevailing net asset value at the end of the day
29 | P a g e

30. and the investor will receive his money. There are some restrictions on this which is
mentioned in the line print of the offer document wherein in case there is a major
Crisis the fund can restrict the redemptions however in normal market conditions there
is little to worry for the investor.
Page | 30
In addition the funds have developed a high quality service delivery whereby the funds
are available to the investor in the shortest possible time. In case of several liquid
schemes the investors also have the option of using instruments like direct cheques and
even ATM cards.
Tax Benefit:
There are a host of tax benefits that an investor can earn with the help of mutual
funds. First dividends are tax free in respect of all mutual funds while in case of
equity oriented funds even the long term capital gains earned will be tax free in
the hands of the investor. This means that the investment can be quite tax
Efficient with quite a bit of the payout free from the tax clutches of the investors.
In case of equity oriented schemes there is no dividend distribution tax and hence
the investors benefit indirectly too and this is another tax benefit for them. While
direct investments into assets would also qualify for several of these benefits
mutual funds are not worse off than elsewhere.
Product life cycle of mutual fund
Product sales
30 | P a g e

31. Introduction Growth Maturity Decline
Page | 31
Similarity with Various Assets Classes
A mutual fund holds assets as part of its portfolio and this determines the performance
of the scheme. The question that most people ask is how a mutual fund is different or
similar to assets that it holds. One basic factor that investors have to consider is that the
performance of the asset and the mutual fund investing in the asset will move in a
similar direction. Thus if there is a bond fund and the prices of bonds fall then the value
of the bond fund will also decline. Similar is the case with equity shares and equity
oriented funds.
This means that a mutual fund cannot be divorced from the overall movement in the
asset class into which it is invested. Thus one should not expect miracles from mutual
funds but the better performing mutual fund will be one which rises faster when the
market is going up and at the same time falls slower than the fall in the market. This is
the way in which the performance of the fund will have to be considered rather than just
look at the absolute figure.
One should look only at asset classes that are of the similar type rather than looking at
different asset classes. This means that if you are holding a debt oriented mutual fund
then you cannot compare its performance to that of equities because here you will end
up comparing two entirely different things. Once this difference is realized one can
comfortably look at the various mutual funds and how they have performed.
31 | P a g e

32. While one would expect similar movement between a fund and its underlying assets
there will be some difference in t he way the movement takes place. For example in case
of equities the price may shoot up 20% in a day while in case of a mutual fund this will
Page | 32
not happen unless the value of the entire assets of the fund rise by a similar percent.
Similarly in case of a daily purchase of shares by an invest to these are made in the
market and here the shares are bought from another investor however in case of a
mutual fund the units in an open ended scheme are bought and sold to the fund itself and
hence the total units outstanding will keep changing every day. In that sense the most
important thing to consider in case of a mutual fund is its NAV rather than several other
figures that one would normally look at.
Regulatory Framework for Working of Mutual
Funds
Every action of the mutual fund is governed by the various regulations laid down by SEBI
and there is a need for mutual funds to follow these guidelines so that investors get the
best services along with a fair treatment with respect to their investments. All of the
regulations are not relevant for the lay investor and here we shall look at some of them
that would be relevant and useful for them in their daily investment process. It is also to
be noted that these can change anytime and one has to be alert for some of the changes
are taking place on a regular basis.
Formation:
One of the main regulations relate to the formation of a mutual fund. There are three
entities present as far as the functioning of the mutual fund is concerned. The first link in
the entire mutual fund setup is the presence of a sponsor. The sponsor is expected to
have a sound track record along with a general reputation of fairness and integrity in all
business transactions. This includes the requirement of carrying on business in financial
32 | P a g e

33. services for a specified period of time. In addition there are also financial parameters
relating to the net worth of the sponsor and its profits that are calculated after various
adjustments as suggested by the guidelines. The whole idea behind the entire exercise
both in terms of business reputation as well as financial parameters is that the sponsor
Page | 33
should be sound enough so the mutual fund is backed by the right kind of people.
As one goes down to the other conditions of the setting up of the mutual fund there is the
actual mutual fund, which has to be in the form of a trust with a trust deed. Thus there
has to be a board of trustees who will acts as trustees of the mutual fund. The instrument
of trust shall be in the form of a trust deed, duly registered under the provisions of the
Indian Registration Act.
The trustees who have been appointed for the mutual fund have to be people of standing,
ability as well as integrity. Similarly there is a condition that an asset management
company or its officers or employees will not be eligible to act as the trustees of the
mutual fund. There is also a requirement for certain proportion of the trustees to be
independent persons and who are not associated with the sponsors in many manner.
The reason behind such a move is to ensure that there is a clear separation between the
management and the administration of the mutual fund.
After this is the process of management of the funds and for this there will be an asset
management company and the trustees and the asset management company will enter
into an investment management agreement. The asset management company has to
manage the mutual fund schemes independently and take several other steps to ensure
that the interest of the investors of one of the scheme is not being compromised in any
manner whatsoever. It is the responsibility of the trustees to keep a check on the various
activities of the asset management company and to see that everything is in order and is
being carried out in accordance with the guidelines for mutual funds.
The asset management companies to have the requirement of having a sound track
record, general reputation and fairness in transactions along with right qualities for the
directors and key personnel of the company
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34. Expense Limits:
There is also the issue of recurring expenses of a mutual fund. The limits that are
Page | 34
prescribed for the fund to charge various expenses state that for the first Rs 100
crore of the average weekly net assets the expense is 2.5%, for the next Rs 300 crore
it is 2.25%, for the next Rs 300 crore it is 2% and for the figure over that amount (Rs
700 crore) it is 1.75%. In case of a scheme investing in bonds the limit shall be lesser
by at least 0.25% of the weekly average net assets. Any expense over and above the
prescribed ceiling will be borne by the asset management company.
Change in Features:
There is also a condition that no change in the fundamental attributes of any scheme or
the trust or even fees and expenses or some other change which would modify the
scheme and affects the interest of unit holders will be carried out without a written
communication being sent to each unit holder. In addition an advertisement has to be
given in one English daily newspaper having nationwide circulation and in a newspaper
published in the language of the region where the head office of the mutual fund is
situated. The unit holders also have to be given an option to exit the scheme at this stage
without paying any exit load.
Investor Services:
Whenever there is an application by an investor for units in a mutual fund scheme then
the asset management company shall issue to the applicant unit certificates or a
statement of accounts specifying the number of units allotted to the applicant as soon as
possible but this cannot be later than six weeks from the date of closure of the initial
subscription list or the date of receipt of the request from an investor in an open ended
scheme.
While calculating the prices of the units the mutual fund shall ensure that the repurchase
price is not lower than 93% of the net asset value and the sale price is not higher than
107% of the net asset value. However the total difference between the repurchase price
and the sale price of the units shall not exceed 7% calculated on the sale price. In case of
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35. a close ended scheme the repurchase price cannot be lower than 95% of the net asset
value.
There has to be a dispatch to the unit holders of the dividend warrants within 30 days of
the declaration of dividend in the scheme. In case of redemption proceeds this has to be
Page | 35
within 10 working days from the date of redemption or repurchase.
Investments:
In terms of investments no mutual fund shall invest more than 10% of its NAV in the
equity shares or equity related instruments of any company. This limit of 10% will not be
applicable for index funds and sector or industry specific schemes. A mutual fund shall
also not invest more than 5% of the NAV in the unlisted equity shares of an open ended
scheme and 10% of its NAV in case of a close ended scheme. No mutual fund shall under
all its schemes own more than 10% of any company’s paid up capital carrying voting
rights.
A mutual fund shall not invest more than 15% of its NAV in debt instruments issued by a
single issuer, which are rated not below investment grade by a credit rating agency. This
can be extended to 20% with the prior approval of the Board of Trustees and the board
of the asset management company. These limits are not applicable to government
securities and money market instruments. A mutual fund shall not invest more than 10%
of its NAV in unrated debt instruments issued by a single issuer and the total
investments in such instruments should not exceed 25% of the NAV of the scheme. All
such investments have to be made with the prior approval of the Board of Trustees and
the board of the asset management company.
In case a company has invested more than 5 % of the net asset value of a scheme, the
investment made by that scheme or any other scheme of the mutual fund in that
company or its subsidiaries shall be brought to the notice of the trustees by the asset
management company and disclosed in the half yearly and annual accounts of the
scheme with justification for such investments.
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36. Page | 36
Rights for a Mutual Fund Holder in India
As per SEBI Regulations on Mutual Funds, an investor is entitled to:
 Receive Unit certificates or statements of accounts confirming your title within 6
weeks from the date your request for a unit certificate is received by the Mutual
Fund.
 Receive information about the investment policies, investment objectives,
financial position and general affairs of the scheme.
 Receive dividend within 42 days of their declaration and receive the redemption
or repurchase proceeds within 10 days from the date of redemption or
repurchase.
 The trustees shall be bound to make such disclosures to the unit holders as are
essential in order to keep them informed about any information, which may have
an adverse bearing on their investments.
 75% of the unit holders with the prior approval of SEBI can terminate the AMC of
the fund.
 75% of the unit holders can pass a resolution to wind-up the scheme.
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37.  An investor can send complaints to SEBI, who will take up the matter with the
Concerned Mutual Funds and follow up with them till they are resolved.
Page | 37
Marketing strategies of mutual fund
The present marketing strategies of mutual fund can be divided into two main heading:
Direct marketing
Selling though intermediaries
Direct marketing
This constitutes 20 percent of the total sales of mutual funds. Some of the important tools used
in this type of selling are:
Personal Selling: In this case the customer support officer or Relationship Manager of
the fund at a particular branch takes appointment from the potential prospect. Once the
appointment is fixed, the branch officer also called Business Development Associate
(BDA) in some funds then meets the prospect and gives him all details about the various
schemes being offered by his fund. The conversion rate in this mode of selling is in
between 30% - 40%.
Telemarketing: In this case the emphasis is to inform the people about the fund. The
names and phone numbers of the people are picked at random from telephone directory.
Some fund houses have their database of investors and they cross sell their other
products. Sometimes people belonging to a particular profession are also contacted
through phone and are then informed about the fund. Generally the conversion rate in
this form of marketing is 15% - 20%.
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38. Direct mail: This one of the most common method followed by all mutual funds.
Addresses of people are picked at random from telephone directory, business directory,
professional directory etc. The customer support officer (CSO) then mails the literature
of the schemes offered by the fund. The follow up starts after 3 – 4 days of mailing the
Page | 38
literature. The CSO calls on the people to whom the literature was mailed. Answers their
queries and is generally successful in taking appointments with those people. It is then
the job of BDA to try his best to convert that prospect into a customer.
Advertisements in newspapers and magazines: The funds regularly advertise in business
newspapers and magazines besides in leading national dailies. The purpose to keep
investors aware about the schemes offered by the fund and their performance in recent
past. Advertisement in TV/FM Channel: The funds are aggressively giving their
advertisements in TV and FM Channels to promote their funds.
Hoardings and Banners: In this case the hoardings and banners of the fund are put at
important locations of the city where the movement of the people is very high. The
hoarding and banner generally contains information either about one particular scheme
or brief information about all schemes of fund.
Selling though intermediaries
Intermediaries contribute towards 80% of the total sales of mutual funds. These are the people/
distributors who are in direct touch with the investors. They perform an important role in
attracting new customers. Most of these intermediaries are also involved in selling shares and
other investment instruments. They do a commendable job in convincing investors to invest in
Mutual funds. A lot depends on the after sale services offered by the intermediary to the
customer. Customers prefer to work with those intermediaries who give them right
information about the fund and keep them abreast with the latest changes taking place in the
market especially if they have any bearing on the fund in which they have invested.
Regular Meetings with distributors: Most of the funds conduct monthly/bi-monthly
meetings with their distributors. The objective is to hear their complaints regarding
38 | P a g e

39. service aspects from funds side and other queries related to the market situation.
Sometimes, special training programmers are also conducted for the new agents/
distributors. Training involves giving details about the products of the fund, their
present performance in the market, what the competitors are doing and what they can
Page | 39
do to increase the sales of the fund.
COMPANY PROFILE
UTI MUTUAL FUND
UTI AMC is a company incorporated under companies act 1956.In UTI AMC the investment
agreement is executed between UTI Trustee company Ltd and UTI AMC on December 9 2002
UTI AMC was registered by SEBI to act as Asset Management Company for UTI Mutual
Fund vide its letter of January 2003.
The paid up capital of UTI AMC has been subscribed equally by four sponsors: State Bank of
India, Life Insurance Corporation of India, Bank of Baroda and Punjab National Bank.
UTIAMC, apart from managing the schemes of UTI Mutual Fund, also manages the schemes
transferred/migrated from the erstwhile Unit Trust of India, in accordance with the provisions
of the Investment Management Agreement, the Trust Deed, and the SEBI (Mutual Funds)
Regulations.
HISTORY
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 crore of assets under management.
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40. Despite being the trendsetter in the segment, the UTI mutual fund could not sustain the
initial tempo and was on the verge of a collapse in 2001, before the government bailed it
The fund's sponsors are public sector financial giants like Life Insurance Corporation,
SBI, Bank of Baroda and Punjab National Bank. The sponsors hold equal stakes in the
Page | 40
asset management company, UTI Asset Management Company Private Limited. UTI
Mutual Fund remains the largest fund in the country with assets of over Rs.35, 028 crore
under management as of Aug 2006.
In 2003, UTI was divided into two parts, UTI Mutual Fund (UTI MF) and a specified
undertaking of UTI or UTI-I. UTI MF was brought under SEBI regulations while UTI-I was
kept under direct government control since its schemes offered guaranteed returns.
VISION:
To be the most Preferred Mutual Fund.
MISSION:
 The most trusted brand, admired by all stakeholders
 The largest and most efficient money manager with global presence
 The best in class customer service provider
 The most preferred employer
 The most innovative and best wealth creator
 A socially responsible organisation known for best corporate governance
Sponsors of Company:
State Bank of India
Life Insurance Corporation of India
Bank of Baroda
Punjab National Bank
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41. HERE IS A LIST OF MUTUAL FUND OF UTI
EQUITY FUNDS CATEGORY:
Page | 41
Diversified Funds:
 UTI MASTER SHARE UNIT SCHEME
 UTI MASTER PLUS UNIT SCHEME
 UTI EQUITY FUND
 UTI CONTRA FUND
 UTI WEALTH BUILDER FUND
 UTI TOP 100 FUND
Speciality/ Theme Based Funds:
 UTI MNC FUND
 UTI MASTER VALUE FUND
 UTI SERVICE INDUSTRIES FUND
 UTI INFRASTRUCTURE FUND
 UTI MIDCAP FUND
 UTI DIVIDEND YIELD FUND
 UTI OPPORTUNITIES FUND
 UTI LEADERSHIP EQUITY FUND
 UTI INDIA LIFESTYLE FUND
 UTI WEALTH BUILDER FUND SER.- 2
Sector Funds:
 UTI PHARMA & HEALTHCARE FUND
 UTI BANKING SECTOR FUND
 UTI ENERGY FUND
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42.  UTI TRANSPORTATION & LOGISTICS FUND
Tax Planning Funds:
Page | 42  UTI EQUITY TAX SAVING PLAN
 UTI MEPUS
 UTI LONGTERM ADVANTAGE FUND- SER. 1
 UTI LONGTERM ADVANTAGE FUND- SER. 2
Arbitrage Fund:
 UTI SPREAD FUND
INDEX FUNDS CATEGORY:
Pure Index Funds:
 UTI MASTER INDEX FUND
 UTI NIFTY INDEX FUND
Exchange Index Fund:
 UTI SUNDER
BALANCED FUNDS CTAEGORY:
Pure Balanced Funds:
 UTI BALANCED FUND
Segment Focused Funds:
 UTI UNIT LINKED INSURANCE PLAN
 UTI CHARITABLE & RELIGIOUS TRUST & REISTERED SOCEITY
 UTI CHILDREN’S CAREER BALANCED PLAN
 UTI RETIRMENT BENEFIT PENSION FUND
 UTI MAHILA UNIT SCHEME
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43.  UTI CCP ADVANTAGE FUND
Monthly Income Schemes:
 UTI MONTHLY INCOME SCHEME
Page | 43  UTI MIS ADVANTAGE PLAN
INCOME FUNDS CTAEGORY:
Segment Focused Funds:
 UTI BOND FUND
 UTI TREASURY ADVANTAGE FUND
 UTI G-SEC FUND-INVESTMENT PLAN
 UTI GILT ADVANTAGE FUND- LTP
 UTI SHORT TERM INCOME FUND
 UTI FLOATING RATE FUND
 UTI G-SEC FUND- SHORT TERM PLAN
 UTI DYNAMIC BOND FUND
LIQUID FUNDS CATEGORY:
 UTI MONEY MARKET FUND
 UTI LIQUID FUND-CASH PLAN
Sponsors of Company:
State Bank of India
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44. Life Insurance Corporation of India
Page | 44
Bank of Baroda
Punjab National Bank
Subsidiaries:
UTI Venture Funds
UTI International Ltd.
UTI Retirement Solutions
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45. Page | 45
Registered and Corporate Office:
UTI Tower, ‘GN Block, Bandra Kurla Complex, Bandra (E), Mumbai-400051.
Tel: 66786666 (Broad), Fax: 26524921
Registrar of UTI MF:
M/s Karvy Computershare Pvt. Ltd.
No 1-90/2/10/E, Narayani Mansion, Vittal Rao Nagar, Madhapur, Hyderabad-500081
Research Design
Research can be defined as systemized effort to gain new knowledge. A research is
Carried out by different methodologies which have their own pros and cons. Research
Methodology is a way to solve research in studying and solving research problem along
With logic behind them are defined through research methodology. Thus while talking
About research methodology we are not only talking of research methods but also
Considered the logic behind the methods. We are in context of our research studies and
Explain why it is being used a particular method or technique and why the others are
Not used. So that research result is capable of being evaluated either by researcher
Himself or by others.
The study at reliance mutual fund is a combination of analytical &practical
study.
It is a based on secondary data collected from records of the company as
Well as other published sources beside the primary data collected from the
investors.
The study was covered over a period of 2 months .
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46. Data collection method
Page | 46 There are two types of source for collection of data:
1. Primary Data:
Primary data are collected through personal and telephonic interviews with
the help of a structured questionnaire.
2. Secondary Data:
These data are collected from company sources, internet, magazines,
newspapers and reference books
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47. Page | 47
TYPE OF SAMPLING USED
We used non-probability type of sampling.
In non-probability sampling, the chance of any particular unit in the population being
selected is unknown. Since randomness is not involved in the selection process, an
estimate of the sampling error cannot be made. But this does not mean that the findings
obtained from non-probability sampling are of questionable value. If properly conducted
their findings can be as accurate as those obtained from probability sampling.
Convenience Sampling
As the name implies, a convenience sample is one chosen purely for expedience (e.g., items
are selected because they are easy or cheap to find and measure.
While few analysts would find credibility in conclusions from such extreme cases, the
inappropriateness of using convenience sampling to estimate universe values is not widely
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48. recognized. The major problem with this (and other non-probability method) is that one is
unable to draw objective inference about a rigorously defined universe. In practice, it is often
found that the response given by "convenient" items in a universe differ significantly from the
responses given by universe items that are less accessible. As a result, unless one is dealing
Page | 48
with a known highly homogeneous universe (virtually all items responding alike),
convenience sampling should not be used to estimate universe values.
Sample Size
The sample size taken in the project work is 50. The area selected is Dehradun and its
surrounding area.
Convenience sampling method was used in this study because of the constraints like cost and
ftime.
FINDING
OCCUPATION OF PERSONS
6% Government
employee
Private
24% employee
50% Businessmen
Retired
20%
FINDINGS: - There are 76% people who are investing & in this 76% there are 50%
people in government service, 20% in private job & 24% people are businessmen & 6%
are retired.
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49. AGE GROUP
6%
Page | 49
46%
48%
20-40 year 40-60 year Above 60 years
FINDINGS: - There are 48% people in age group 40-60 years and 46% of people in 20-40
years and rest 6% are Above 60 years.
INTEREST IN INVESTMENT
24%
76%
Interested Not Interested
FINDINGS: - When I have analyze the project then I found that in out of total people 24%
people are not investing & 76% people are investing.
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50. AREA OF INVESTMENT
7%
Page | 50 Fixed
32%
23% deposit
Property
7% Mutual
Funds
31%
FINDINGS: - In area of investment 32% people interest in fixed deposit and 31% people
interested in property & 7% in share and same in Mutual funds & 23% investing in insurance
in this finding some people interested in two area of investment.
SATISFIED WITH INVESTMENT
8%
92%
Satisfied with investment Not satisfied with investment
FINDINGS: - In survey 92% of people are satisfied with investment and 8% are not satisfied
with our investment.
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51. MUTUAL FUND INVESTMENT
Page | 51 12% 7%
16% 19%
46%
UTI Reliance mutual fund
SBI mutual fund ICICI prudential mutual fund
Other
FINDINGS: - In this survey 46% people are interest to buy SBI mutual fund and 19% people
to invest in reliance, 16% in ICICI mutual fund and 7% in UTI and 12% interested in
investing in different mutual funds.
EXPECTED RETURN
10%
18%
72%
less than 10% Between 10% to 30% Above 30%
FINDINGS: - In investment 72% people expected return between 10% to 30% and 18%
people expect less than 10% return and remain 10% people expected above 30% return.
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52. RISK FACTOR
Page | 52
8%
16%
76%
Minimum risk Moderate risk High risk
FINDINGS: - In risk factor 76% people take minimum risk in investment and 16% people
take moderate risk only 8% people take high risk for more return on investment.
MONEY INVESTED
10%
26% 5000
64% 5000-25000
Above 25000
FINDINGS: - In Survey 64% of people invested between Rs 5000 to 25000 and 26% people
invested above Rs 25000 only 10% people invested only Rs 5000.
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53. HOW LONG INVESTED
Page | 53 8%
42%
50%
Less than 1 year Between 1 to 3 year More than 3 year
FINDINGS: - In Survey 50% investors are interest in 1 to 3 years of investment and 42% are
interested in more than 3 years of investment only 8% investors are interested in short term
investment.
Is investment in mutual fund
safe?
25%
Yes
75% No
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54. FINDINGS: - In Survey 75% investors think that investment is safe and 25% think that it is
not safe.
Page | 54
Mutual fund can give higher
return?
11%
Yes
No
89%
FINDINGS:- In Survey 89% investors think that mutual fund can give higher return and 11%
think that mutual fund cannot give higher return it can give only normally 15- 20% return.
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55. Future of mutual fund
Page | 55
19%
Good
81% Not good
FINDINGS:- In Survey 81% investor think that future of mutual fund will be good and 19%
think that future of mutual fund will not be as such good as it is.
Analysis
&
Interpretation
PEOPLE CONSIDERS VARIOUS FACTORS WHILE INVESTING IN MUTUAL FUND
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56. Options Responses Percentages (%)
Returns 49 49
Page | 56
Tax saving 26 26
Liquidity 16 16
Risk free 9 9
People consider various factor while investing in
mutual fund
60
50
40
% of response
30 Series1
20
10
0
1 2 3 4 5
options
PEOPLE CONSIDER VARIOUS BASES FOR INVESTING IN ANY PARTICULAR FUND
OPTIONS RESPONSES RESPONSES IN %
Past performance of fund 64 64
Portfolio of fund 36 36
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57. people consider various bases while investing in
any particular fund
64
Page | 57
36
Series1
1 responses in
%
2
options
PREFERENCE OF VARIOUS MUTUAL FUNDS OF DIFFERENT PEOPLES
Options Responses Responses in %
Franklin Templeton 17 17
HDFC 19 19
Reliance 11 11
ICICI 18 18
SBI 29 29
Any other 8 8
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58. preference of various funds of different
Page | 58 peoples
8%
17%
1
2
28% 3
18% 4
5
6
11%
18%
PEOPLE INVEST THE DIFFERENT % OF SAVING IN MUTUAL FUNDS
Sr.no Options Responses Responses in %
1 10-20% 46 46
2 20-30% 33 33
3 50% 15 15
4 More than 50% 6 6
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59. peoples invest the different % of savings in
mutual funds
Page | 59
50 46
45
40
33
responses in %
35
30
25
20 15
15
10 6
5
0
1 2 3 4
options
PEOPLE EXPECTATIONS OF RETURN FROM DIFFERENT FUNDS
Sr.no Options Responses Responses in %
1 10-20% 32 32
2 20-30% 45 45
3 50% 9 9
4 More than 50% 4 4
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