Mohammed Ismail. H No - 216311672026

ABSTRACT:
As in the past couple of years, equity markets showing range-bound movement, gilt funds that invest in government bonds (G-secs) could be a good investment. The credit risk is next to nil as the government has zero risk of defaulting, but the interest rate risk rises as the market price of debt security varies with fluctuating interest rates. Gilt funds are a very important part of asset allocation with their inverse correlation to stocks and they could contribute significantly to the yield enhancement of a portfolio. In this study, I have analyzed top 10 performing gilt funds selected (on the basis of their three years return) out of the 63 gilt funds available in the Indian mutual fund industry at present. My analysis is concentrated on six months to three years return of the funds and risk, risk- return, market sensitivity of this funds to find out that which gilt fund will offer best return to the investor considering the risk factor of investment
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ST. XAVIERS PG COLLEGE
INTRODUCTION
Many times the investors go on acquiring assets in an ad hoc & unplanned manner & the result is high risk, low return profile that they may face. All such assets of financial nature such as gold, silver, real-estate, building, insurance policies, post office certificate. NSC or NSS would constitute his portfolio & the wise investor not only plans his portfolio as per risk return profile or preferences but manages his portfolio efficiently so as to secure the highest return for the lowest risk possible at that level of investment. This is in short the portfolio management. The basic principle is that the higher the risk, the higher is the return &investor should have clear perception of elements of risk & return when he makes investments. Risk return analysis is essential for the investment & portfolio management. An investor considering investment is securities is faced with the problem of choosing from among a large no. of securities. His choice depends upon the risk return characteristics of individual securities. There was a time when portfolio management was an exotic term. The scenario has changed drastically. It is now a familiar term and is widely practiced in India. The theories and concepts relating to portfolio management now find their way to the front pages of financial newspapers and the cover pages of investment journals in India. Indian capital markets have become active. The Indian stock markets are steadily moving towards higher efficiency, with rapid computerization, increasing market transparency, better infrastructure, better customer service etc. The markets are dominated by large institutional investors with their diversified portfolios. A large no of mutual funds has been set up the county since 1987. With this development investment in securities has gained considerable momentum. Professional portfolio management
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backed by competent research begun to be practiced by mutual funds, investment consultants and big brokers. The Securities Exchange Board of India (SEBI). The Stock Market Regulatory body in India is supervising the whole process. With the advent of computers the whole process of portfolio management has become quite easy. The computer can absorb large volumes of data perform computations accurately and quickly give out results in desired form. The trend towards liberalization and globalization of the economy has promoted free flow of capital across international border. Portfolio now includes not only domestic securities but also foreign securities such as Options and Futures in the field of investment management and trading in derivative securities. Their valuation etc.., has broadened its scope.
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Need of the study

The main purpose of doing this project was to know about mutual fund and its functioning. This helps to know in details about mutual fund industry right from its inception stage, growth and future prospects. It also helps in understanding different schemes of mutual funds. My study depends upon prominent funds in India and their schemes like equity, income, balance as well as the returns associated with those schemes. The project study was done to ascertain the asset allocation, entry load, exit load, associated with the mutual funds. Ultimately this would help in understanding the benefits of mutual funds to investors.
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OBJECTIVES
To evaluate investment performance of selected mutual funds in terms of risk and return. To evaluate and create an ideal portfolio consisting the best mutual fund schemes which will earn highest possible returns and will minimize the risk. Basically to understand the concept of portfolio management and its relation to mutual funds. Also to analyze the performance of mutual fund schemes on the basis of various parameters.
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SCOPE OF THE PROJECT

The funds are selected to which ICICI Prudential is advisor. The Schemes were categorized and selected on evaluating their performance and relative risk.
The scope of the project is mainly concentrated on the different categories of the mutual funds such as equity schemes, debt funds, balanced funds and equity linked savings schemes etc.
The ideal portfolio is created by analyzing the risk pattern of the schemes and distributing the overall risk to earn maximum returns.
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METHODOLOGY
Research Methodology is a term made up of two words, research & methodology. Research means search for knowledge. It is a scientific and systematic search for potential information on a specific topic. It is an art of scientific investigation. It is careful investigation or inquiry especially for search of new fact in any branch of knowledge. Research is a systematic method of finding solutions to problems. According to Clifford woody, research comprises of defining and redefining problem, formulating hypothesis or suggested solutions, collecting, organizing and evaluating data, reaching conclusions, testing conclusions to determine whether they fit the formulated hypothesis For the purpose of study, both primary and secondary data has been collected. The observational method and survey research method is used to collect the primary data. The necessary data has also been collected from official records and other published sources. The collected data is classified, tabulated, analyzed and interpreted later.
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Data can be of two types primary and secondary data. Primary data are those which are collected afresh and for the first time, and it is in original form. Primary data can be collected either through experiment or through survey. The researcher has chosen the survey method for data collection. The two types of data collection: Primary data Secondary data
Primary data;
Primary data is personally developed data and it gives latest information and offers much greater accuracy and reliability. There are various sources for obtaining primary data i.e., Mail survey, personal interview, Field survey, panel research and observation approach etc. The study to maximum extent dependent on primary data, which is collected by way of structures personal interview with customers. Methods that can be used for collection of primary data are as follows: Direct personal observation: Under this method, the investigator presents himself personally before the informant and obtains first hand information. This method provides greater degree of accuracy. Telephone survey: Under this method the investigator, instead of presenting himself before the informants, contacts them on telephone and collects information from them. Indirect personal interview: Under this method, instead of directly approaching the informants, the investigator interviews several third persons who are directly or indirectly concerned with the subject matter of the enquiry and who are in possession of the requisite information. This method is highly suitable where the direct personal investigation is not practicable either because the informants are unwilling or reluctant to supply the information or where the information desired is complex or the study in hand is extensive. Questionnaire method: Under this method, the investigator prepares a questionnaire containing a number of questions pertaining to the field of enquiry. Under this method, the investigator directly contact the person and collect the information through questionnaire related to the data. The aims and objectives of collecting the information, and requesting the respondents to
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cooperate by furnishing the correct replies and fill the questionnaire with correct information. The success of this method depends upon the proper drafting of the questionnaire and the cooperation of the respondents.
Secondary data;
Secondary data is the published data. It is already available for using and its saves time. The mail source of secondary data are published market surveys, government publications advertising research report and internal source such as sales, sales records orders, customers complaints and other business record etc. the study has also depended on secondary data to little extent, which is collected through internal source. Methods that can be used for collection of secondary data are as follows: Published sources: There are a number of national organisations and international agencies, which collect and publish statistical data relating to business, trade, labour, price, consumption, production, etc. These publications of the various organisations are useful sources of secondary data. Unpublished sources: The records maintained by private firms or business houses who may not like to release their data to any outside agency are known as unpublished sources of collection of secondary data.
Limitations
This report gives an insight about mutual funds and mutual fund schemes but with few limitations as follows: The big question is how to judge a mutual fund before investing? It is important for an investor to consider a fund s performance over several years. The report only analyses equity mutual fund schemes of only some funds and there are around 34 AMCs offering wide range of scheme but to analyze them is a tedious task. This information is mainly regarding of those mutual funds were collected to which Icici prudential funds is an advisor.
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Different fund managers adopt different strategies to improve performance. While one fund manager may have invested in speculative stocks may over a period, another one who have invested in speculative stocks may have struck gold in that year to outperform the former by a long way. Lack of proper knowledge and awareness about advantages and disadvantages associated with various schemes among the investor. Usually there is a tendency among investors to ignore the consistency of returns over a period of time rather they focus on absolute returns generated in the short term.
Mutual Funds Overview: There are a lot of investment avenues available today in the financial market for an investor with an investable surplus. He can invest in Bank Deposits, Corporate Debentures, and Bonds where there is low risk but low return. He may invest in Stock of companies where the risk is high and the returns are also proportionately high. The recent trends in the Stock Market have shown that an average retail investor always lost with periodic bearish tends. People began opting for portfolio managers with expertise in stock markets who would invest on their behalf. Thus we had wealth management services provided by many institutions. However they proved too costly for a small investor. These investors have found a good shelter with the mutual funds. A mutual fund, also referred to as an open-end fund, is an investment company that spreads its money across a diversified portfolio of securities -- including stocks, bonds, or money market instruments. Shareholders who invest in a fund each own a representative portion of those investments, less any expenses charged by the fund.
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Mutual funds have been around for a long time, dating back to the early 19th century. The first modern American mutual fund opened in 1924, yet it was only in the 1990s that mutual funds became mainstream investments, as the number of households owning them nearly tripled during that decade. With recent surveys showing that over 88% of all investors participate in mutual funds, you're probably already familiar with these investments, or perhaps even own some. In any case, it's important that you know exactly how these investments work and how you can use them to your advantage. A mutual fund is a special type of company that pools together money from many investors and invests it on behalf of the group, in accordance with a stated set of objectives. Mutual funds raise the money by selling shares of the fund to the public, much like any other company can sell stock in itself to the public. Funds then take the money they receive from the sale of their shares (along with any money made from previous investments) and use it to purchase various investment vehicles, such as stocks, bonds and money market instruments. In return for the money they give to the fund when purchasing shares, shareholders receive an equity position in the fund and, in effect, in each of its underlying securities. For most mutual funds, shareholders are free to sell their shares at any time, although the price of a share in a mutual fund will fluctuate daily, depending upon the performance of the securities held by the fund. Mutual fund investors make money either by receiving dividends and interest from their investments, or by the rise in value of the securities. Dividends, interest and profits from the sale of any securities (capital gains) are passed on to the shareholders in the form of distributions. And shareholders generally are allowed to sell (redeem) their shares at any time for the closing market price of the fund on that day.
Concept Of Mutual Funds: A mutual fund is a common pool of money into which investors place their contributions that are to be invested in accordance with a stated objective. The ownership of the fund is thus joint or mutual; the fund belongs to all investors. A single investors ownership of the fund is in the same proportion as the amount of the contribution made by him or her bears to the total amount of the fund. Mutual Funds are trusts, which accept savings from investors and invest the same in diversified financial instruments in terms of objectives set out in the trusts deed with the view to reduce the risk and maximize the income and capital appreciation for distribution for the members. A Mutual Fund is a corporation and the fund managers interest is to professionally
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manage the funds provided by the investors and provide a return on them after deducting reasonable management fees. The objective sought to be achieved by Mutual Fund is to provide an opportunity for lower income groups to acquire without much difficulty financial assets. They cater mainly to the needs of the individual investor whose means are small and to manage investors portfolio in a manner that provides a regular income, growth, safety, liquidity and diversification opportunities.
Definitions:
Mutual funds are collective savings and investment vehicles where savings of small (or sometimes big) investors are pooled together to invest for their mutual benefit and returns distributed proportionately. A mutual fund is an investment that pools your money with the money of an unlimited number of other investors. In return, you and the other investors each own shares of the fund. The fund's assets are invested according to an investment objective into the fund's portfolio of investments. Aggressive growth funds seek long-term capital growth by investing primarily in stocks of fast-growing smaller companies or market segments. Aggressive growth funds are also called capital appreciation funds.
Why Select Mutual Funds?

The risk return trade-off indicates that if investor is willing to take higher risk then correspondingly he can expect higher returns and vise versa if he pertains to lower risk instruments, which would be satisfied by lower returns. For example, if an investor opt for bank FD, which provide moderate return with minimal risk. But as he moves ahead to invest in capital protected funds and the profit-bonds that give out more return which is slightly higher as compared to the bank deposits but the risk involved also increases in the same proportion. Thus investors choose mutual funds as their primary means of investing, as Mutual funds provide professional management, diversification, convenience and liquidity. That doesnt mean mutual fund investments risk free.
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This is because the money that is pooled in are not invested only in debts funds which are less riskier but are also invested in the stock markets which involves a higher risk but can expect higher returns. Hedge fund involves a very high risk since it is mostly traded in the derivatives market which is considered very volatile.
History Of Mutual Funds In India:

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 (UTI Monopoly): Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up by the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial Development Bank of India (IDBI) took over the regulatory and administrative control in place of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6,700 crores of assets under management. Second Phase 1987-1993 (Entry Of Public Sector Funds): 1987 marked the entry of non- UTI, public sector mutual funds set up by public sector banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC). SBI Mutual Fund was the first non- UTI Mutual Fund established in June 1987 followed by Can 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): With the entry of private sector funds in 1993, a new era started in the Indian mutual fund industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year in which the first Mutual Fund Regulations came into being, under which all mutual funds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993. The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI (Mutual Fund) Regulations 1996.
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The number of mutual fund houses went on increasing, with many foreign mutual funds setting up funds in India and also the industry has witnessed several mergers and acquisitions. As at the end of January 2003, there were 33 mutual funds with total assets of Rs. 1,21,805 crores. The Unit Trust of India with Rs.44,541 crores of assets under management was way ahead of other mutual funds. Fourth Phase Since February 2003: In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust of India with assets under management of Rs.29,835 crores as at the end of January 2003, representing broadly, the assets of US 64 scheme, assured return and certain other schemes. The Specified Undertaking of Unit Trust of India, functioning under an administrator and under the rules framed by Government of India and does not come under the purview of the Mutual Fund Regulations. The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is registered with SEBI and functions under the Mutual Fund Regulations. With the bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76,000 crores of assets under management and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund Regulations, and with recent mergers taking place among different private sector funds, the mutual fund industry has entered its current phase of consolidation and growth. As at the end of September, 2004, there were 29 funds, which manage assets of Rs.153108 crores under 421 schemes. Recent Trends in Mutual Funds Industry The Indian Mutual fund industry, despite all that has been said about it is still in a nascent stage and has extremely bright future ahead. The industry is still one-tenth size of the banking deposits in the country. The private sector mutual fund industry in its resent avatar is barely 7 years old. The total asset under management over the past 4 to 5 tears has almost remain stagnant around the Rs 100, 000 crore mark. This has put a question mark in front of the claims that mutual funds are growing part of the financial savings and planning industry in India. It holds scope for growth. In India this industry began with the setting up of the Unit Trust Of India (UTI) in 1964 by the government of India in order to mobiles small saving. During the past 37 years, UTI has grown to be a dominant player in the industry with assets with over Rs 76,547 crore as of March2000. However, trouble hit UTI has lost its dominant position in the industry and the asset under management has slipped drastically to Rs 46,396 crore.
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Private sector mutual funds, which were permitted along with foreign partners in 1993, now enjoy a dominant position in the country. Kothari Pioneer Mutual fund was the first fund to be established in the private sector with foreign fund. The private sector now controls around RS 45,818 crore assets under management, almost half the size of the industry. The mutual fund industry has become a fastest growing sector in the countrys capital and financial market with an average compounded growth rate of 20 percent over the past five years. This is despite increasing competition with more than 30 asset management companies for investors money. As on June 2002, the industry has Rs 100,703 crore asset under management spread across 36 funds with more than 390 schemes. Substantial development have made; spurred on by changes and amendments in regulation as the Sponsor Establishes MF as a mutual fund regulation that established a comprehensive legal framework for the mutual fund Trust industry to develop coherently. The Company securities and Exchange Board Of India (SEBI) came out with comprehensive regulation in 1993 which defined the structure of the Registers MF mutual with fund and asset SEBI management Companies for the first time. Managed by a Hold Unitholders The industry is in the process of evolving into a bigger and better investment medium for all Mutual Fund Ensure Compliance to currently, ING market segment, Say Kavita Hurry, CEO ING Investment Management, further, SEBI Enter into Investments manages around Rs.364 crore as on June 2002. Agreement with MC
Appointed by Board of Trustees
Board of Trustees
Fund in MF
Asset Management Company
Float, MF Funds Managers Fund as Per SEBI guidelines & AMC Agreement
by Funds Structure OfAppointed Mutual Trustees
Provides Necessary Custodian Custodian Services
Appointed by AMC
Provide Banking Bankers Services
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Transfer Agents
Appointed by AMC
ST. XAVIERS PG COLLEGE Provide Registrars Services and act as transfers Agents
The formation and operations of mutual funds in India is solely guided by SEBI (Mutual Fund) Regulations, 1993, which came into force on 20 January 1993. The regulations have since been replaced by the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, through a notification on 9 December 1996. The above figure gives an idea of the structure of Indian mutual funds. A mutual fund comprises four separate entities, namely sponsor, mutual fund trust, AMC and custodian. They are of course assisted by other independent administrative entities like banks, registrars and transfer agents. We may discuss in brief the formation of different entities, their functions and obligations. The sponsor for a mutual fund can by any person who, acting alone or in combination with another body corporate establishes the mutual fund and gets it registered with SEBI. The sponsor is required to contribute at least 40 per cent of the minimum net worth (Rs 10 crore) of the asset
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management company. The sponsor must have a sound track record and general reputation of fairness and integrity in all his business transactions. As per SEBI Regulation, 1996, a mutual fund is to be formed by the sponsor and registered with SEBI. A mutual fund shall be constituted in the form of a trust and the instrument of trust shall be in the form of a deed, duly registered under the provisions of the Indian Registration Act, 1908, executed by the sponsor in favour of trustees named in such an instrument. The board of trustees manages the mutual fund and the sponsor executes the trust deeds in favor of the trustees. The mutual fund raises money through sale of units under one or more schemes for investing in securities in accordance with SEBI guidelines. It is the job of the mutual fund trustees to see that the schemes floated and managed by the AMC appointed by the trustees, are in accordance with the trust deeds and SEBI guidelines. It is also the responsibilities of the trustees to control the capital property of mutual funds schemes. The trustees have the right to obtain relevant information from the AMC, as well as a quarterly report on its activities. They can also dismiss the AMC under specific condition as per SEBI regulations. At least half the trustees should be independent persons. The AMC or its employees cannot act as a trustee. No person who is appointed as a trustee of a mutual fund can be appointed as a trustee of any other mutual fund unless he is an independent trustee and prior permission is obtained from the mutual fund in which he is a trustee. The trustees are required to submit half-yearly reports to SEBI on the activities of the mutual fund. The trustees appoint a custodian and supervise their activities. The trustees can be removed only with prior approval of SEBI.
Benefits Of Mutual Fund Investments 1. Professional Management: Mutual Funds provide the services of experienced and skilled professionals, backed by a dedicated investment research team that analyses the performance and prospects of companies and selects suitable investments to achieve the objectives of the scheme. 2. Diversification: Mutual Funds invest in a number of companies across a broad cross-section of industries and sectors. This diversification reduces the risk because seldom do all stocks decline at the same time and in the same proportion. You achieve this diversification through a Mutual Fund with far less money than you can do on your own.
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3. Convenient Administration: Investing in a Mutual Fund reduces paperwork and helps you avoid many problems such as bad deliveries, delayed payments and follow up with brokers and companies. Mutual Funds save your time and make investing easy and convenient. 4. Return Potential: Over a medium to long-term, Mutual Funds have the potential to provide a higher return as they invest in a diversified basket of selected securities. 5. Low Costs: Mutual Funds are a relatively less expensive way to invest compared to directly investing in the capital markets because the benefits of scale in brokerage, custodial and other fees translate into lower costs for investors. 6. Liquidity: In open-end schemes, the investor gets the money back promptly at net asset value related prices from the Mutual Fund. In closed-end schemes, the units can be sold on a stock exchange at the prevailing market price or the investor can avail of the facility of direct repurchase at NAV related prices by the Mutual Fund. 7. Transparency: You get regular information on the value of your investment in addition to disclosure on the specific investments made by your scheme, the proportion invested in each class of assets and the fund manager's investment strategy and outlook. 8. Flexibility: Through features such as regular investment plans, regular withdrawal plans and dividend reinvestment plans, you can systematically invest or withdraw funds according to your needs and convenience. 9. Affordability: Investors individually may lack sufficient funds to invest in high-grade stocks. A mutual fund because of its large corpus allows even a small investor to take the benefit of its investment strategy.
Structure And Constituents Of Fund
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Figure 1: Types Of Mutual Funds Schemes
Source: Secondary Data
Mutual fund schemes may be classified on the basis of its structure and its investment objective. 1. By Structure:
A. Openended funds:
An open end fund is one that is available for subscription all through the year. These do not have a fixed maturity. Investors can conveniently buy and sell units at Net Asset Value (NAV) related prices. The key feature of open-end schemes is liquidity.
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B. Closed-ended funds:
A closed end funds has a stipulated maturity period which generally raging from 3 to 15 years. The funds are open for subscription only during a specified period. 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 they are listed. In order to provide an exist 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.
C. Interval Funds:
Interval funds combine the features of open-ended schemes. They are open for sale or redemption during pre-determined intervals at NAV related prices. 2. By Nature:
A. Equity Funds:
These funds invest a maximum part of their corpus into equities holdings. The structure of the fund may vary different for different schemes and the fund managers outlook on different stocks. The Equity Funds are sub-classified depending upon their investment objective, as follows: Diversified Equity Funds Mid-Cap Funds Sector Specific Funds Tax Savings Funds (ELSS)
Equity investments are meant for a longer time horizon, thus Equity funds rank high on the riskreturn matrix.
B. Debt Funds:
The objective of these Funds is to invest in debt papers. Government authorities, private companies, banks and financial institutions are some of the major issuers of debt papers. By investing in debt instruments, these funds ensure low risk and provide stable income to the investors. Debt funds are further classified as:
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Gilt Funds: Invest their corpus in securities issued by Government, popularly known as Government of India debt papers. These Funds carry zero Default risk but are associated with Interest Rate risk. These schemes are safer as they invest in papers backed by Government. Income Funds: Invest a major portion into various debt instruments such as bonds, corporate debentures and Government securities. MIPs: Invests maximum of their total corpus in debt instruments while they take minimum exposure in equities. It gets benefit of both equity and debt market. These scheme ranks slightly high on the risk-return matrix when compared with other debt schemes. Short Term Plans (STPs): Meant for investment horizon for three to six months. These funds primarily invest in short term papers like Certificate of Deposits (CDs) and Commercial Papers (CPs). Some portion of the corpus is also invested in corporate debentures. Liquid Funds: Also known as Money Market Schemes, These funds provides easy liquidity and preservation of capital. These schemes invest in short-term instruments like Treasury Bills, inter-bank call money market, CPs and CDs. These funds are meant for short-term cash management of corporate houses and are meant for an investment horizon of 1day to 3 months. These schemes rank low on risk-return matrix and are considered to be the safest amongst all categories of mutual funds.
C. Balanced Funds:
As the name suggest they, are a mix of both equity and debt funds. They invest in both equities and fixed income securities, which are in line with pre-defined investment objective of the scheme. These schemes aim to provide investors with the best of both the worlds. Equity part provides growth and the debt part provides stability in returns. The aim of balanced funds is to provide both growth and regular income. Such schemes periodically distribute a part of their earning and invest both in equities and fixed income securities in the proportion indicated in their offer documents. In a rising stock market, the NAV of these schemes may not normally keep pace, or fall equally when the market falls. These are ideal for investors looking for a combination of income and moderate growth.
D. Money Market Funds:

The aim of money funds is to provide easy liquidity, preservation of capital and moderate income. These schemes generally invest in safer short-term instruments such as treasury bills, certificates of deposit, commercial paper and inter-bank call money. Returns on these schemes may fluctuate depending upon the interest rate prevailing in the market. These are ideal for Corporate and individual investors as a means to park their surplus funds for short periods.
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E. Load Funds:
A Load Funds is one that charges a commission for entry of exit. That is, each time you buy or sell units in the fund, a commission will be payable. Typically entry exit loads range from 1% to 2%. It could be corpus is put to work.
F. No-Load Funds:
A No-Load Fund is one that does not charge a commission for entry or exit. That is, no commission is payable on purchase or sale of units in the fund. The advantage of a no load is that the entire corpus is put to work.
3. Schemes in Mutual Funds:

I. Tax Saving Schemes These schemes offer tax rebates to the investor under specific provisions of the Indian Income Tax laws as the Government offers tax incentives for investment in specified avenues. Investments in Equity Linked Saving Schemes (ELSS) and Pension Schemes are allowed as deduction u/s 88 of the Income Tax Act. The Act also provide opportunities to investors to save capital gains u/s 54EA and 54EB by investing in Mutual Funds, provided the capital asset has been sold to April 1, 2000 and the amount is invested before September 30, 2000.
II. Industry Specific Schemes: Industry Specific Schemes invest in the industries specified in the offer document. The investment or these funds is limited to specific like InfoTech, FMCG and Pharmaceuticals etc. III. Index Schemes: Index Funds attempt to replicate the performance of a particular index such as the BSE Sensex or the NSE
IV. Sectoral Schemes: Sectoral Funds are those, which invest exclusively in a specified industry or a group of industries or various segments such as A Group shares or initial public offerings. These are the funds/schemes which invest in the securities of only those sectors or industries as specified in the offer documents. e.g. Pharmaceuticals, Software, Fast Moving Consumer Goods (FMCG), Petroleum stocks, etc. The returns in these funds are dependent on the performance of the respective sectors/industries. While these funds may give higher returns, they are more risky compared to diversified funds. Investors need to keep a watch on the performance of those sectors/industries and must exit at an appropriate time. Advantages Of Mutual Funds: If mutual funds are emerging as the favorite investment vehicle, it is because of the many advantages they have over other forms and the avenues of investing, particularly for the investor who has limited resources available in terms of capital and the ability to carry out detailed research and market monitoring. The following are the major advantages offered by mutual funds to all investors: 1. Portfolio Diversification: Each investor in the fund is a part owner of all the funds assets, thus enabling him to hold a diversified investment portfolio even with a small amount of investment that would otherwise require big capital.
2. Professional Management: Even if an investor has a big amount of capital available to him, he benefits from the professional management skills brought in by the fund in the management of the investors portfolio. The investment management skills, along with the needed research into available investment options, ensure a much better return than what an investor can manage on his own. Few investors have the skill and resources of their own to succeed in todays fast moving, global and sophisticated markets. 3. Reduction/Diversification Of Risk:
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When an investor invests directly, all the risk of potential loss is his own, whether he places a deposit with a company or a bank, or he buys a share or debenture on his own or in any other from. While investing in the pool of funds with investors, the potential losses are also shared with other investors. The risk reduction is one of the most important benefits of a collective investment vehicle like the mutual fund. 4. Reduction Of Transaction Costs: What is true of risk as also true of the transaction costs. The investor bears all the costs of investing such as brokerage or custody of securities. When going through a fund, he has the benefit of economies of scale; the funds pay lesser costs because of larger volumes, a benefit passed on to its investors. 5. Liquidity: Often, investors hold shares or bonds they cannot directly, easily and quickly sell. When they invest in the units of a fund, they can generally cash their investments any time, by selling their units to the fund if open-ended, or selling them in the market if the fund is close-end. Liquidity of investment is clearly a big benefit. 6. Convenience And Flexibility: Mutual fund management companies offer many investor services that a direct market investor cannot get. Investors can easily transfer their holding from one scheme to the other; get updated market information and so on. 7. Tax Benefits: Any income distributed after March 31, 2002 will be subject to tax in the assessment of all Unit holders. However, as a measure of concession to Unit holders of open-ended equity-oriented funds, income distributions for the year ending March 31, 2003, will be taxed at a concessional rate of 10.5%. In case of Individuals and Hindu Undivided Families a deduction upto Rs. 9,000 from the Total Income will be admissible in respect of income from investments specified in Section 80L, including income from Units of the Mutual Fund. Units of the schemes are not subject to Wealth-Tax and Gift-Tax. Disadvantages Of Mutual Funds: 1. No Control Over Costs: An investor in a mutual fund has no control of the overall costs of investing. The investor pays investment management fees as long as he remains with the fund, albeit in return for the
professional management and research. Fees are payable even if the value of his investments is declining. A mutual fund investor also pays fund distribution costs, which he would not incur in direct investing. However, this shortcoming only means that there is a cost to obtain the mutual fund services. 2. No Tailor-Made Portfolio: Investors who invest on their own can build their own portfolios of shares and bonds and other securities. Investing through fund means he delegates this decision to the fund managers. The very-high-net-worth individuals or large corporate investors may find this to be a constraint in achieving their objectives. However, most mutual fund managers help investors overcome this constraint by offering families of funds- a large number of different schemes- within their own management company. An investor can choose from different investment plans and constructs a portfolio to his choice. 4. Managing A Portfolio Of Funds: Availability of a large number of funds can actually mean too much choice for the investor. He may again need advice on how to select a fund to achieve his objectives, quite similar to the situation when he has individual shares or bonds to select. 5. The Wisdom Of Professional Management: That's right, this is not an advantage. The average mutual fund manager is no better at picking stocks than the average nonprofessional, but charges fees. 6. No Control: Unlike picking your own individual stocks, a mutual fund puts you in the passenger seat of somebody else's car
7. Dilution: Mutual funds generally have such small holdings of so many different stocks that insanely great performance by a fund's top holdings still doesn't make much of a difference in a mutual fund's total performance. 8. Buried Costs: Many mutual funds specialize in burying their costs and in hiring salesmen who do not make those costs clear to their clients.
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Types of Returns on Mutual Fund: There are three ways, where the total returns provided by mutual funds can be enjoyed by investors: Income is earned from dividends on stocks and interest on bonds. A fund pays out nearly all income it receives over the year to fund owners in the form of a distribution. If the fund sells securities that have increased in price, the fund has a capital gain. Most funds also pass on these gains to investors in a distribution. If fund holdings increase in price but are not sold by the fund manager, the fund's shares increase in price. You can then sell your mutual fund shares for a profit. Funds will also usually give you a choice either to receive a check for distributions or to reinvest the earnings and get more shares. Return Risk Matrix:
HIGHIER RISK MODERATE RETURNS HIGHER RISK HIGHIER RETURNS
Ventur e Capital
Equit y
Bank FD Postal Savings

LOWER RISK LOWER RETURNS Risk Factors Of Mutual Funds:
Mutua l Funds
LOWER RISK HIGIER RETURNS
The Risk-Return Trade-Off: The most important relationship to understand is the risk-return trade-off. Higher the risk greater the returns / loss and lower the risk lesser the returns/loss.
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Hence it is up to you, the investor to decide how much risk you are willing to take. In order to do this you must first be aware of the different types of risks involved with your investment decision. Market Risk: Sometimes prices and yields of all securities rise and fall. Broad outside influences affecting the market in general lead to this. This is true, may it be big corporations or smaller mid-sized companies. This is known as Market Risk. A Systematic Investment Plan (SIP) that works on the concept of Rupee Cost Averaging (RCA) might help mitigate this risk. Credit Risk: The debt servicing ability (may it be interest payments or repayment of principal) of a company through its cashflows determines the Credit Risk faced by you. This credit risk is measured by independent rating agencies like CRISIL who rate companies and their paper. A AAA rating is considered the safest whereas a D rating is considered poor credit quality. A well-diversified portfolio might help mitigate this risk. Inflation Risk: Things you hear people talk about: "Rs. 100 today is worth more than Rs. 100 tomorrow." "Remember the time when a bus ride casted 50 paisa?" "Mehangai Ka Jamana Hai." The root cause, Inflation. Inflation is the loss of purchasing power over time. A lot of times people make conservative investment decisions to protect their capital but end up with a sum of money that can buy less than what the principal could at the time of the investment. This happens when inflation grows faster than the return on your investment. A well-diversified portfolio with some investment in equities might help mitigate this risk.
Interest Rate Risk: In a free market economy interest rates are difficult if not impossible to predict. Changes in interest rates affect the prices of bonds as well as equities. If interest rates rise the prices of bonds fall and vice versa. Equity might be negatively affected as well in a rising interest rate environment. A well-diversified portfolio might help mitigate this risk. Political / Government Policy Risk:
Changes in government policy and political decision can change the investment environment. They can create a favorable environment for investment or vice versa. Liquidity Risk: Liquidity risk arises when it becomes difficult to sell the securities that one has purchased. Liquidity Risk can be partly mitigated by diversification, staggering of maturities as well as internal risk controls that lean towards purchase of liquid securities.
Profile of MIDEAST INVESTMENTS PVT LTD.

Mideast investments Private Limited, a member of National Stock Exchange of India, stands to ensemble the province of trading in shares through its vibrant environment created among various professionals working to strive the need of its clients. Incepted in the year 1996, since inception the company has been at the foray of creating
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high end values, and enumerated its services for each and every category of client it handles. Promoted basically by business conglomerates from different facets of business families, and promoters having a clear vision of the corporate culture have been a czar, to the financial industry. With every promoter being professionally qualified and well experienced in the field of finance, the company is at a store of making high regards in the field of finance and stock broking services. Ensembles the direct approach to its clients in any kind of query, service and operational activity, the staff working around to provide such services are highly qualified professionals with dignity towards end clients for the sake of providing services and enlisted by the management of the organization. The company has well qualified staff to cater all kinds of different needs of its clients. Having various categories of clients viz., Individuals, High Networth Individuals, Corporate Entities, Domestic Financial Institution and etc., the company grosses up to make a unique blend of services to offer to each and every category of client it serves. Apart from broking services, advisory services relating to trading in shares are exclusively being managed by industry experts working as full timers to proved enriched services. With its huge database of more than 2000 individual clients, 50 plus corporate entities and around 120 High Networth Individuals, the company is making efficient efforts to add more client base to its present operations. With a broad view, the company is making exponential efforts to provide vast amount of services across the nation through PAN india presence, an initiative for the current fiscal,
Since inception turnovers ranging from 650 crores have sky marked to 900 crores till the financial year 2011-2012, during the year the company has started operations relating to Training, Research and Development keeping emphasis exclusively in development of financial sector, as the need of present hour is to generate human skill in the arena of finance. With vibrant services, the company has been on a verge of taking a pride in introducing SHARIAH Based Trading through its terminals being connected to NSE of India Limited., with latest technology in use, Mideast stands to its spa of services presently being offered. On introduction of these specialized services, the company has added extensive amount of MUSLIM client base appropriating nearly 80% out of the total 2000 individual client data base. On sprawling view, with use-age of latest technology for various purposes viz., Trading, Charting and etc., the company is always ahead of the competitive edge and promises to deliver the catastrophic mode of investment and returns to be generated for all categories of clients. It has been an enduring experience working with MIDEAST INVESTMENTS PVT LTD, during the course of internship and the amount of knowledge being shared together is enormous in the field of finance. OVERVIEW MIDEAST INVESTMENTS has significant volumes in the segment of Equity at National Stock exchanges aggregating Rs. 750 Cr per annum. The advantages of the company having more than 200 ready customers base that will help us in reach out to the
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people with trust they have in us over a decade. The company understands customer need very well as already enjoying highest customer satisfaction in services which is the key area. STOCK BROKERAGE The companys managers have over 10000 man-hours of ringside broking experience, which is being utilized to hilt by fully computerized VAST access at its Hyderabad Office. MIDEAST INVESTMENTS Pvt. Ltd. is a corporate member of the National Stock Exchange of India Limited, which is Indias largest exchange transacting over US $68 billion (Rs 2,38,000 Cr) annually. EQUITY RESEARCH: Based on fundamental and technical strengths of Indian Corporations and the market environment MIDEAST provides consultancy for investments. MIDEAST assists individuals to maximize their earnings through stock market investment and Mutual Fund as other financial instruments. Scientifically through their portfolio management services. NRI PLACEMENT AND RELATED SERVICES: The analysis of opportunities for NRIs the primary and secondary market is a focus area of MIDEAST Investments with the boom in the stock market, evaluation of companies to invest becomes critical particular for NRIs for trading in these markets. Hence MIDEAST provides the services. Our Vision
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"To become a globally renowned organization that provides state of the art trading solutions and infrastructure and to grow with latest technology and services, by delivering the best solutions by best-in-class people." Our Mission "To achieve our objectives in an environment of fairness, honesty, and courtesy
towards our clients, employees, vendors and society at large."
ACCEPTANCE OF TERMS AND CONDITIONS / BROKER NORMS The following should be read carefully and accepted prior to becoming a Constituent for online trading i.e. for trading availing the facilities and/or any information, or any part thereof, as the case may be, as may be made available from time to time on the Web-Site and/or entering into any securities dealings through the Contact India whether by use of any of the facilities available on the Web-Site, or by any other means whatsoever. Please read the following, which contains important information
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concerning use of the Web Site. The use of the Web Site is conditional upon and subject to, acceptance of and compliance with, the Terms. And whereas for offline the Constituent can avail the facilities subject to acceptance of and compliance with the terms contained herein. End User shall be responsible for obtaining and maintaining all telephone, computer hardware and other equipment needed for access to and use of this Site and all charges related thereto. MIDEAST INVESTMENTS PVT LTD shall not be liable for any
damages to the End User's equipment resulting from the use of this Site.
Mutual Funds
Mutual fund is a trust that pools money from a group of investors (sharing common financial goals) and invest the money thus collected into asset classes that match the stated investment objectives of the scheme. Since the stated investment objectives of a mutual fund scheme generally forms the basis for an investor's decision to contribute money to the pool, a mutual fund can not deviate from its stated objectives at any point of time. Every Mutual Fund is managed by a fund manager, who using his investment management skills and necessary research works ensures much better return than what an investor can manage on
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his own. The capital appreciation and other incomes earned from these investments are passed on to the investors (also known as unit holders) in proportion of the number of units they own.
History of mutual funds

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 of India. The history of mutual funds in India can be broadly divided into four distinct phases
First Phase 1964-87

Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up by the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial Development Bank of India (IDBI) took over the regulatory and administrative control in place of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6,700 crores of assets under management.
Second Phase 1987-1993 (Entry of Public Sector Funds)

1987 marked the entry of non- UTI, public sector mutual funds set up by public sector banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC). SBI Mutual Fund was the first non- UTI Mutual Fund established in June 1987 followed by Canbank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC established its mutual fund in June 1989 while GIC had set up its mutual fund in December 1990.
At the end of 1993, the mutual fund industry had assets under management of
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Rs.47,004 crores.
Third Phase 1993-2003 (Entry of Private Sector Funds) With the entry of private sector funds in 1993, a new era started in the Indian mutual fund industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year in which the first Mutual Fund Regulations came into being, under which all mutual funds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993. The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI (Mutual Fund) Regulations 1996. The number of mutual fund houses went on increasing, with many foreign mutual funds setting up funds in India and also the industry has witnessed several mergers and acquisitions. As at the end of January 2003, there were 33 mutual funds with total assets of Rs. 1,21,805 crores. The Unit Trust of India with Rs.44,541 crores of assets under management was way ahead of other mutual funds.
Fourth Phase since February 2003

In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust of India with assets under management of Rs.29,835 crores as at the end of January 2003, representing broadly, the assets of US 64 scheme, assured return and certain other schemes. The Specified Undertaking of Unit Trust of India, functioning under an administrator and under the rules framed by Government of India and does not come under the purview of the Mutual Fund Regulations.
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The second is the UTI Mutual Fund, sponsored by SBI, PNB, BOB and LIC. It is registered with SEBI and functions under the Mutual Fund Regulations. With the bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76,000 crores of assets under management and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund Regulations, and with recent mergers taking place among different private sector funds, the mutual fund industry has entered its current phase of consolidation and growth.
The graph indicates the growth of assets over the years.
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Organization of a Mutual Fund
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Sponsor :
Sponsor is the person who acting alone or in combination with another body corporate establishes a mutual fund. The sponsor of a fund is akin to promoter of a company as he gets the fund registered with SEBI. The sponsor will form a Trust and appoint a Board of Trustees. The sponsor will also generally appoint as Asset Management Company as fund managers. The sponsor, either directly or acting through the Trustees, will also appoint a Custodian to hold the fund asset. All these appointments are made in accordance with SEBI Regulations. Sponsor must contribute at least 40% of the net worth of the Investment Managed and meet the eligibility criteria prescribed under the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996.The Sponsor is not responsible or liable for any loss or shortfall resulting from the operation of the Schemes beyond the initial contribution made by it towards setting up of the Mutual Fund.
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Trust :
The Mutual Fund in India is constituted in the form of a public Trust created under the Indian Trustees Act, 1882. The fund sponsor acts as the settler of the trust, contributing to its initial capital, and appoints Trustees to hold the asset of the Trust for the benefit of the unit holders, who are the beneficiaries of the Trust. The fund then invites investors to contribute their money in the common pool, by subscribing to Units issued by various schemes established by the trust, units being the evidence of their beneficial interest in the fund. It should be understood that a mutual fund is just a pass-through vehicle. Under the Indian trusts Act, or the fund has no independent legal capacity itself, rather it is the Trustee or Trustees who have the legal capacity and therefore all acts in relation to the trust are taken on its behalf by the Trustees. The Trustees hold the unit holders money in a fiduciary capacity, i.e the money belongs to the unit holders and is entrusted to the fund for the purpose of investment. In legal parlance, the investor or the unit-holders are the beneficial owners of the investment held by the Trust, even as these investments are held in the name of the trustees on a day to - day basis. Being public Trusts, mutual fund can invite any number of investors as beneficial owners in their investment schemes.
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Trustee:
The trust the mutual fund may be a Board of Trustees a body of individuals, or a Trust company a corporate body. Most of the funds in India are managed by Board of Trustees. While the board of Trustees is governed by the provisions of the Indian Trusts Act, where the Trustee is a corporate body, it would also be required to comply with the provisions of the companies Act, 1956. The Board or the Trustee Company, as an independent body, act as protector of the unit holders interests. The Trustee doesnt directly manage the portfolio of securities. For this specialist function, they appoint an Asset Management Company. They ensure that the fund is managed by the AMC as per the defined objectives and in accordance with the Trust Deed and SEBI regulations. The trust is created through a document called the Trust Deed that is executed by the fund sponsor in favour of the Trustees. Trust Deed is required to be stamped as registered under the provisions of the Indian Registration Act and registered with SEBI. Clauses in the Trust Deed, inter alia, deal with the establishment of the Trust, the appointment of Trustees, their powers and duties, and the obligations of the Trustees towards the unit-holders and AMC. These clauses also specify activities that the fund/ AMC cannot undertake. The third schedule of the SEBI (MF) Regulations, 1996 specifies the contents of the Trust Deed. The Trustees being the primary guardians of the unit-holders funds and assets, a Trustee has to be a person of high repute and integrity. SEBI has laid down a set of conditions to be fulfilled by the individuals being proposed as trustees of mutual funds independent and non - independent. Besides specifying the disqualifications, SEBI has also set down the Right and obligations of the Trustees. Broadly, the Trustees must ensure that the investors interests are safeguarded and
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that the AMCs operations are along professional lines. They must also ensure that the management of the fund is in accordance with SEBI Regulations. To ensure the independence of the trustee company, SEBI mandates a minimum of two-third independent directors on the board of the trustee company.
Asset Management Company (AMC) :

The role of an AMC is to act the investment manager of the Trust. The sponsors or the trustees, if so authorized by the Trust Deed, appoint the AMC. The AMC so appointed is required to be approved by SEBI. Once approved, the AMC functions under the supervision of its own Board of Directors, and also under the directions of the Trustees and SEBI. The Trustees are empowered to terminate the appointment of the AMC and appoint a new AMC with the prior approval of SEBI and unit-holders The AMC would, in the name of the Trust, float and then manage the different investment schemes as per SEBI Regulations and as per the Investment Management Agreement it signs with the Trustees. Mutual fund Regulations,1996 describes the issues relevant to appointment, eligibility criteria, and restrictions on business activities and obligations of the AMC. The AMC of a mutual fund must have a net worth of at least Rs. 10 crores at all times. Directors of the AMC, both independent and non independent, should have adequate professional experience in financial services and should be individuals of high moral standing, a condition also applicable to other key personnel of the AMC. The AMC cannot act as a trustee of any other mutual fund. Besides its role as the fund manager, it may undertake specified activities such as advisory services and financial consulting, provided these activities are run independently of one another and the AMCs resources are properly segregated by activity. The AMC must always act
in the interest of the unit-holders and report to the trustees with respect to its activities. To ensure the independence of the asset management company, SEBI mandates that a minimum of 50% of the directors of the board of the asset management company should be independent directors.
Registrar and Transfer Agent :

The AMC if so authorized by the Trust Deed appoints the Registrar and Transfer Agent to the Mutual Fund. The Registrar processes the application form; redemption requests and dispatches account statements to the unit holders. The Registrar and Transfer agent also handles communications with investors and updates investor records.
Custodian :
Mutual funds are in the business of buying and selling of securities in large volumes. Handling these securities in terms of physical delivery and eventual safekeeping is therefore a specialized activity. The custodian is appointed by the Board of Trustees for safe keeping of physical securities or participating in any clearing systemthrough approved depository companies on behalf of mutual fund in case of dematerialized securities. A custodian must fulfill its responsibilities in accordance with its agreement with the mutual fund. The custodian should be an entity independent of the sponsers and is required to be registered with SEBI.
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Concept of mutual fund
When an investor subscribes for the units of a mutual fund, he becomes part owner of the assets of the fund in the same proportion as his contribution amount put up with the corpus (the total amount of the fund). Mutual Fund investor is also known as a mutual fund shareholder or a unit holder. Any change in the value of the investments made into capital market instruments (such as shares, debentures etc) is reflected in the Net Asset Value (NAV) of the scheme. NAV is defined as the market value of the Mutual Fund scheme's assets net of its liabilities. NAV of a scheme is calculated by dividing the market value of scheme's assets by the total number of units issued to the investors.
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For example: If the market value of the assets of a fund is Rs. 100,000
A. The total number of units issued to the investors is equal to 10,000. B. Then the NAV of this scheme = (A)/(B), i.e. 100,000/10,000 or 10.00 C. Now if an investor 'X' owns 5 units of this scheme D. Then his total contribution to the fund is Rs. 50 (i.e. Number of units held multiplied by the NAV of the scheme)
Association of Mutual Funds in India (AMFI)

With the increase in mutual fund players in India, a need for mutual fund association in India was generated to function as a non-profit organisation. Association of Mutual Funds in India (AMFI) was incorporated on 22nd August, 1995. AMFI is an apex body of all Asset Management Companies (AMC) which has been registered with SEBI. Till date all the AMCs are that have launched mutual fund schemes are its members. It functions under the supervision and guidelines of its Board of Directors. Association of Mutual Funds India has brought down the Indian Mutual Fund Industry to a professional and healthy market with ethical lines enhancing and maintaining standards. It follows the principle of both protecting and promoting the interests of mutual funds as well as their unit holders.
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The objectives of Association of Mutual Funds in India

The Association of Mutual Funds of India works with 30 registered AMCs of the country. It has certain defined objectives which supports the guidelines of its Board of Directors. The objectives are as follows:
This mutual fund association of India maintains high professional and ethical standards in all areas of operation of the industry.
It also recommends and promotes the top class business practices and code of conduct which is followed by members and related people engaged in the activities of mutual fund and asset management. The agencies who are by any means connected or involved in the field of capital markets and financial services also involved in this code of conduct of the association.
AMFI interacts with SEBI and works according to SEBIs guidelines in the mutual fund industry.
Association of Mutual Fund of India does represent the Government of India, the Reserve Bank of India and other related bodies on matters relating to the Mutual Fund Industry.
It develops a team of well qualified and trained Agent distributors. It implements a programme of training and certification for all intermediaries and other engaged in the mutual fund industry.
AMFI undertakes all India awareness programme for investors in order to promote proper understanding of the concept and working of mutual funds.
At last but not the least association of mutual fund of India also disseminate informations on Mutual Fund Industry and undertakes studies and research either directly or in association with other bodies.
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STUCTURE OF THE INDIAN MUTUAL FUNDS INDUSTRY:

Structure wise mutual fund industry can be classified into three categories;
Unit trust of India

The Indian mutual fund industry is dominated by the unit trust of India, which has a total corpus of 51000 crore collected from over 20 million investors. The UTI has many fund/ schemes in all categories in equity, balanced, debt, money market etc. With some being open ended and some being closed ended. The unit scheme 1964 commonly referred to as US64,which is a balanced fund, is the biggest scheme with a corpus of about 10000 crore.
Public sector mutual fund

The second largest categories of mutual funds are the ones floated by nationalized banks .can bank asset management floated by canara bank and sbi funds management floatedby state bank of india are the largest of these. Gicamc floated by general insurance corporation. On line trading is a great idea to reduce management expenses from the current 2%of total assets to about 0.75%of the total asset. 72% of the crore-customer base of mutual fund in the top 50-broking firms in theus is expected to trade on line by 2003
Private Sector Mutual fund

The third largest categories of mutual funds are the ones floated by the private sector domestic mutual funds and the private sector foreign mutual funds. The largest of these in private sector domestic mutual funds are Reliance mutual fund, JM capital management company ltd. Tata mutual, Axis mutual fund, Birla sun life asset management pvt. Ltd. and in private foreign mutual funds these are alliance capital asset management private ltd,
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Franklin Templeton Investments, Sun F&C asset management private ltd, Lurich asset management company pvt ltd. The aggregate corpus of the assets managed by this category of amcs is about 42000 cr.
Future of Mutual Funds in India

Financial experts believe that the future of Mutual Funds in India will be very bright. AUM of 41 mutual fund houses in India rose to Rs681,708crore at the end of March, 2011 and Rs.664,824 crore in 2012, according to AMFI data. In the coming 10 years the annual composite growth rate is expected to go up by 13.4%. Since the last 5 years, the growth rate was recorded as 9% annually. Based on the current rate of growth, it can be forecasted that the mutual fund assets will be double by 2015.
GLOBAL SCENARIO OF MUTUAL FUND:

The money market mutual fund segment has a total corpus of 1.48 trillion in theU.S. Out of the top 10 mutual fund worldwide, eight are worldwide sponsored. Only fidelity and capital are non-bank mutual funds in this group.
In the U.S. the total numbers of schemes is higher than that of the listed companies Internationally, mutual funds are allowed to go short. In India fund managers do not have such leeway.
In the U.S. about 9.7 million households will manage their assets online by the year 2003, such a facility is not yet of avail in India and jeevan bima sahayoga MC floated by the LIC are some of the other prominent ones. The aggregate corpus of the funds managed by this category of AMCc is around 8300 cr.
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Some of the major benefits of investingin them are:

These essentially investment vehicles where people with similar investment objective come together to pool their money and then invest accordingly. Each unit of any scheme represents the proportion of pool owned by the unit holder (investor). Appreciation or reduction in value of investments is reflected in net asset value (NAV) of the concerned scheme, which is declared by the fund from time to time. Mutual fund schemes are managed by respective Asset Management Companies (AMC). Different business groups/ financial institutions/ banks have sponsored these AMCs, either alone or in collaboration with reputed international firms. Several international funds like Alliance and Templeton are also operating independently in India. Many more international Mutual Fund giants are expected to come into Indian markets in the near future. The benefits on offer are many with good post-tax returns and reasonable safety being the hallmark that we normally associate with them.
Number of available options

Mutual funds invest according to the underlying investment objective as specified at the timeof launching a scheme. So, we have equity funds, debt funds, gilt funds and many others thatcater to the different needs of the investor. The availability of these options makes them a good option. While equity funds can be as risky as the stock markets themselves, debt funds offer the kind of security that is aimed for at the time of making investments. Money market funds offer the liquidity that is desired by big investors who wish to park surplus funds for very short-term periods. Balance Funds cater to the investors having an appetite for risk greater than the debt funds but less than the equity funds.
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The only pertinent factor here is that the fund has to be selected keeping the risk profile of the investor in mind because the products listed above have different risks associated with them. So, while equity funds are a good bet for a long term, they may not find favor with corporate or High Networth Individuals (HNIs) who have short-term needs.
Diversification
Investments are spread across a wide cross-section of industries and sectors and so the risk is reduced. Diversification reduces the risk because all stocks don t move in the same direction at the same time. One can achieve this diversification through a Mutual Fund with far less money than one can on his own.
Professional Management
Mutual Funds employ the services of skilled professionals who have years of experience to back them up. They use intensive research techniques to analyze each investment option for the potential of returns along with their risk levels to come up with the figures for performance that determine the suitability of any potential investment.
Potential of Returns
Returns in the mutual funds are generally better than any other option in any other avenue over a reasonable period of time. People can pick their investment horizon and stay put in the chosen fund for the duration. Equity funds can outperform most other investments over long periods by placing long-term calls on fundamentally good stocks. The debt funds too will outperform other options such as banks. Though they are affected by the interest rate risk in general, the returns generated are more as they pick securities with different duration that have different yields and so are able to increase the overall returns from the portfolio.
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Liquidity
Fixed deposits with companies or in banks are usually not withdrawn premature because there is a penal clause attached to it. The investors can withdraw or redeem money at the Net Asset Value related prices in the open-end schemes. In closed-end schemes, the units can be transacted at the prevailing market price on a stock exchange. Mutual funds also provide the facility of direct repurchase at NAV related prices. The market prices of these schemes are dependent on the NAVs of funds and may trade at more than NAV (known as Premium) or less than NAV (known as Discount) depending on the expected future trend of NAV which in turn is linked to general market conditions. Bullish market may result in schemes trading at Premium while in bearish markets the funds usually trade at Discount. This means that the money can be withdrawn anytime, without much reduction in yield. Some mutual funds however, charge exit loads for withdrawal within a period. Besides these important features, mutual funds also offer several other key traits. Important among them are:
Well Regulated
Unlike the company fixed deposits, where there is little control with the investment being considered as unsecured debt from the legal point of view, the Mutual Fund industry is very well regulated. All investments have to be accounted for, decisions judiciously taken. SEBI acts as a true watchdog in this case and can impose penalties on the AMCs at fault. The regulations, designed to protect the investors interests are also implemented effectively.
Transparency
Being under a regulatory framework, mutual funds have to disclose their holdings, Investment pattern and all the information that can be considered as material, before all investors. This means that the investment strategy, outlooks of the market and scheme related details are disclosed with reasonable frequency to ensure that transparency exists in the system. This is unlike any other investment option in India where the investor knows nothing as nothing is disclosed.
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Flexible, Affordable and a Low Cost affair

Mutual Funds offer a relatively less expensive way to invest when compared to other avenues such as capital market operations. The fee in terms of brokerages, custodial fees and other management fees are substantially lower than other options and are directly linked to the performance of the scheme. Investment in mutual funds also offers a lot of flexibility with features such as regular investment plans, regular withdrawal plans and dividend reinvestment plans enabling systematic investment or withdrawal of funds. Even the investors, who could otherwise not enter stock markets with low investible funds, can benefit from a portfolio comprising of high-priced stocks because they are purchased from pooled funds. As has been discussed, mutual funds offer several benefits that are unmatched by other investment options. Post liberalization, the industry has been growing at a rapid pace and has crossed Rs. 1,00,000.00 Crore size in terms of its assets under management. However, due to the low key investor awareness, the inflow under the industry is yet to overtake the inflows in banks. Rising inflation, falling interest rates and a volatile equity market make a deadly cocktail for the investor for whom mutual funds offer a route out of the impasse. The investments in mutual funds are not without risks because the same forces such as regulatory frameworks, government policies, interest rate structures, performance of companies etc. that Rattles the equity and debt markets, act on mutual funds too. But it is the skill of the managing risks that investment managers seek to implement in order to strive and generate superior returns than otherwise possible that makes them a better option than many others.
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Dis - Advantages of mutual funds

1.
High Expense Ratios and Sales Charges

If you're not paying attention to mutual fund expense ratios and sales charges, they can get out of hand. Be very cautious when investing in funds with expense ratios higher than 1.20%, as they will be considered on the higher cost end. Be weary of 12b-1 advertising fees and sales charges in general. There are several good fund companies out there that have no sales charges. Fees reduce overall investment returns.
2.
Management Abuses
Churning, turnover and window dressing may happen if your manager is abusing his or her authority. This includes unnecessary trading, excessive replacement and selling the losers prior to quarter-end to fix the books.
3.
Tax Inefficiency
Like it or not, investors do not have a choice when it comes to capital gain payouts in mutual funds. Due to the turnover, redemptions, gains and losses in security holdings throughout the year, investors typically receive distributions from the fund that are an uncontrollable tax event.
4.
Poor Trade Execution

If you place your mutual fund trade anytime before the cut-off time for same-day NAV, you'll receive the same closing price NAV for your buy or sell on the mutual fund. For investors looking for faster execution times, maybe because of short investment horizons, day trading, or timing the market, mutual funds provide a weak execution strategy.
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Types of mutual funds:
Risk Hierarchy of Different Mutual Funds Thus, different mutual fund schemes are exposed to different levels of risk and investors should know the level of risks associated with these schemes before investing. The graphical representation hereunder provides a clearer picture of the relationship between mutual funds and levels of risk associated with these funds:
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Major Mutual Fund Companies in India:

Axis Asset Management Company AIG Global Investment Group Mutual Fund Birla Sun Life Mutual Fund Bank of Baroda Mutual fund DBS Chola Mutual Fund Fraanklin Templeton India Mutual Fund HDFC Mutual fund
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ICICI Prudential Mutual fund ING Mutual fund JM Financial Mutual fund JP Morgan Mutual fund Kotak Mahindra Mutual fund LIC Mutual fund Reliance Mutual fund Sahara Mutual fund State Bank of India Mutual fund Standard Charted Mutual fund
PORTFOLIO MANAGEMENT
PORTFOLIO A portfolio is a collection of securities since it is really desirable to invest the entire funds of an individual or an institution or a single security, it is essential that every security be viewed in a portfolio context. Thus it seems logical that the expected return of the portfolio. Portfolio analysis considers the determine of future risk and return in holding various blends of individual securities Portfolio expected return is a weighted average of the expected return of the individual securities but portfolio variance, in short contrast, can be something reduced portfolio risk is because risk depends greatly on the co-variance among returns of individual securities. Portfolios, which are combination of securities, may or may not take on the aggregate characteristics of their individual parts.
Since portfolios expected return is a weighted average of the expected return of its securities, the contribution of each security the portfolios expected returns depends on its expected returns and its proportionate share of the initial portfolios market value. It follows that an investor who simply wants the greatest possible expected return should hold one security; the one which is considered to have a greatest expected return. Very few investors do this, and very few investment advisors would counsel such and extreme policy instead, investors should diversify, meaning that their portfolio should include more than one security
OBJECTIVES OF PORTFOLIO MANAGEMENT Primary Objectives:

The main objective of investment portfolio management is to maximize the returns from the investment and to minimize the risk involved in investment. Moreover, risk in price or inflation erodes the value of money and hence investment must provide a protection against inflation.
Secondary objectives:
The following are the other ancillary objectives: Regular return. Stable income. Appreciation of capital. More liquidity. Safety of investment. Tax benefits. Portfolio management services helps investors to make a wise choice between alternative investments with pit any post trading hassles this service renders optimum returns to the investors by proper selection of continuous change of one plan to another plane with in
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the same scheme, any portfolio management must specify the objectives like maximum returns, and risk capital appreciation, safety etc in their offer. Return From the angle of securities can be fixed income securities such as: (a) Debentures partly convertibles and non-convertibles debentures debt with tradable Warrants. (b) Preference shares (c) Government securities and bonds (d) Other debt instrument (2) Variable income securities (a) Equity shares (b) Money market securities like treasury bills commercial papers etc. Portfolio managers has to decide up on the mix of securities on the basis of contract with the client and objectives of portfolio.
NEED FOR PORTFOLIO MANAGEMENT:

Portfolio management is a process encompassing many activities of investment in assets and securities. It is a dynamic and flexible concept and involves regular and systematic analysis, judgment and action. The objective of this service is to help the unknown and investors with the expertise of professionals in investment portfolio management. It involves construction of a portfolio based upon the investors objectives, constraints, preferences for risk and returns and tax liability. The portfolio is reviewed and adjusted from time to time in tune with the market conditions. The evaluation of portfolio is to be done in terms of targets set for risk and returns. The changes in the portfolio are to be effected to meet the changing condition. Portfolio construction refers to the allocation of surplus funds in hand among a variety of financial assets open for investment. Portfolio theory concerns itself with the principles
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governing such allocation. The modern view of investment is oriented more go towards the assembly of proper combination of individual securities to form investment portfolio. A combination of securities held together will give a beneficial result if they grouped in a manner to secure higher returns after taking into consideration the risk elements. The modern theory is the view that by diversification risk can be reduced. Diversification can be made by the investor either by having a large number of shares of companies in different regions, in different industries or those producing different types of product lines. Modern theory believes in the perspective of combination of securities under constraints of risk and returns.
Process of portfolio management:

The Portfolio Program and Asset Management Program both follow a disciplined process to establish and monitor an optimal investment mix. This six-stage process helps ensure that the investments match investors unique needs, both now and in the future.
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1. IDENTIFY GOALS AND OBJECTIVES

When will you need the money from your investments? What are you saving your money for? With the assistance of financial advisor, the Investment Profile Questionnaire will guide through a series of questions to help identify the goals and objectives for the investments. 2. DETERMINE OPTIMAL INVESTMENT MIX: Once the Investment Profile Questionnaire is completed, investors optimal investment mix or asset allocation will be determined. An asset allocation represents the mix of investments (cash, fixed income and equities) that match individual risk and return needs. This step represents one of the most important decisions in your portfolio construction, as asset allocation has been found to be the major determinant of long-term portfolio performance. 3. CREATE A CUSTOMIZED INVESTMENT POLICY STATEMENT When the optimal investment mix is determined, the next step is to formalize our goals and objectives in order to utilize them as a benchmark to monitor progress and future updates. 4. SELECT INVESTMENTS The customized portfolio is created using an allocation of select QFM Funds. Each QFM Fund is designed to satisfy the requirements of a specific asset class, and is selected in the necessary proportion to match the optimal investment mix. 5 MONITOR PROGRESS Building an optimal investment mix is only part of the process. It is equally important to maintain the optimal mix when varying market conditions cause investment mix to drift
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away from its target. To ensure that mix of asset classes stays in line with investors unique needs, the portfolio will be monitored and rebalanced back to the optimal investment mix 6. REASSESS NEEDS AND GOALS Just as markets shift, so do the goals and objectives of investors. With the flexibility of the Portfolio Program and Asset Management Program, when the investors needs or other life circumstances change, the portfolio has the flexibility to accommodate such changes. ELEMENTS OF PORTFOLIO MANAGEMENT: Portfolio management is on-going process involving the following basic tasks: Identification of the investors objectives, constraints and preferences. Strategies are to be developed and implemented in tune with investment policy formulated. Review and monitoring of the performance of the portfolio. Finally the evaluation of the portfolio
Investment is a financial activity that involves risk. It is the commitment of funds for a return expected to be realized in the future. Investment can be made in financial assets or physical assets. In either case there is possibility that the actual return may vary from the expected return that possibility is risk involved in it. Investment is generally distinguished from speculation in terms of 3 factors namely Risk, Capital Gain and Time Period. Gambling is the extreme form of speculation. Investors may be individual or institutions there is large no. of investment avenues for savers in India. Corporate securities, deposits in the banks and Non-Banking companies, mutual funds schemes, provident fund schemes, life insurance policies, government securities are some of the important avenues. There are a large number of investment avenues for savers in India. Some of them are marketable and liquid, while others are non-marketable. Some of them are highly risky while some others are almost risk less.
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Investment avenues can be broadly categorized under the following head. 1. Corporate securities 2. Equity shares. 3. Preference shares. 4. Debentures/Bonds. 5. Derivatives. 6. Others.
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Schematic diagram of stages in portfolio management
Specification and quantification of investor objectives, constraints, and preferences Portfolio policies and strategies
Monitoring investor related input factors
Capital market expectations
Portfolio construction and revision asset allocation, portfolio optimization, security selection, implementation and execution
Attainment of investor objectives
Performance measuremen t
Relevant economic, social, political sector and security considerations
Monitoring economic and market input factors
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SEBI Norms
SEBI has prohibited the portfolio manager to assume any risk on behalf of the client. Portfolio manager cannot also assure any fixed return to the client. The investments made or advised by him are subject to risk. Which is the client has to bear. The investment consultancy and management has to be charged at rates, which are fixed at the beginning and transparent as per the contract. No sharing of profits or discounts or cash incentives to clients is permitted. The portfolio manager is prohibited to do lending, badla financing and bills discounting as per SEBI norms. He cannot put the clients funds in any investment can be made in capital market and money market instruments. Clients money has to be kept in a separate account with the public sector bank and cannot be mixed up with his own funds or investments. All the deals done for a clients account are to be entered in his name and contract notes, bills and etc., are all passed by his name. A separate ledger account is maintained for all purchases/sales on clients behalf, which should be done at the market price. Final settlement and termination of contract, portfolio manager is only acting on a contractual basis and on a fiduciary basis. No contract for less than a year is permitted by the SEBI.
SEBI Guidelines for the portfolio managers

On 7th January 1993 the securities exchange board of India issued regulations to the portfolio managers for the regulation of portfolio management services by merchant bankers. They are as follows:
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Portfolio management services shall be in the nature of investment boor consultancy management for an agreed free at clients risk. The portfolio manager shall not guarantee return directly or indirectly the fee should not be depended upon or it not be a return sharing basis. Various terms of agreements, fees, disclosures of risk and repayment should be mentioned. Clients funds should be kept separately in client wise account, which should be subject to audit. Manager should report clients at intervals not exceeding 6 months. Portfolio manager should maintain high standard of integrity and not desire any benefit directly or indirectly from clients funds. The client shall be entitled to inspect the documents. Portfolio manager shall not invest in funds belonging to clients in badly financing, bills discounting and lending operations. Client money can be invested in money and capital market instruments. Settlement on termination of contract should be as agreed in the contract. Clients fund should be kept in a separate bank account opened in scheduled commercial bank. Purchase or sale of securities shall be made at prevailing market price.
PORTFOLIO EVALUATION
Portfolio managers and investors who manage their own portfolios continuously monitor and review the performance of the portfolio. The evaluation of each portfolio, followed by revision and reconstruction are all steps in the portfolio management. The ability to diversify with a view to reduce and even eliminate all unsystematic risk and expertise in managing the systematic risk related to the market by use of appropriate risk measures, namely, betas. Selection of proper securities is thus the first requirement.
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Methods of evaluation:
Sharpe index model: It depends on total risk rate of the portfolio. Return of the security compare with risk free rate of return, the excess return of security is treated as premium or reward to the investor. The risk of the premium is calculated by comparing portfolio risk rate. While calculating return on security any one of the previous methods is used. If there is no premium Sharpe index shows negative value (-). In such a case portfolio is not treated as efficient portfolio. Sharpes ratio (Sp) = rp rf / p Where, Sp = Sharpe index performance model rp = return of portfolio rf = risk free rate of return p = portfolio standard deviation This method is also called reward to variability method. When more than one portfolio is evaluated highest index is treated as first rank. That portfolio can be treated as better portfolio compared to other portfolios. Ranks are prepared on the basis of descending order. Treynors index model: It is another method to measure the portfolio performance. Where systematic risk rate is used to compare the unsystematic risk rate. Systematic risk rate is measured by beta. It is also called reward to systematic risk . Treynors ratio (Tp) = rp rf / p Where, Tp = treynors portfolio performance model
rp= return of portfolio rf= risk free rate of return p= portfolio standard deviation. If the beta portfolio is not given market beta is considered for calculation of the performance index. Highest value of the index portfolio is accepted. Jansens index model: It is different method compared to the previous methods. It depends on return of security which is calculated by using CAPM. The actual security returns is less than the expected return of CAPM the difference is treated as negative (-) then the portfolio is treated as inefficient portfolio. Jp=rp-[rf+ p (rm-rf)] Where, Jp = Jansens index performance model rp= return of portfolio rf= risk free rate of return p= portfolio standard deviation rm= return on market This method is also called reward to variability method. When more than one portfolio is evaluated highest index is treated as better portfolio compared to other portfolios. Ranks are prepared on the basis of descending order.
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CORPORATE SECURITIES: Joint stock companies in the private sector issue corporate securities. These include equity shares, preference shares, and debentures. Equity shares have variable dividend and hence belong to the high risk-high return category; preference shares and debentures have fixed returns with lower risk. The classification of corporate securities that can be chosen as investment avenues can be depicted as shown below:
Characteristics of investment are Return, Risk, Safety and liquidity. Risk and return of an investment related. Normally, the higher the risk, the higher is the return. Hence an investor generally prefers liquidity for his investment, safety of his funds, good return with minimum risk and maximum return. RETURN: The term Return from an investment refers to the benefits from that investment. In the field of finance in general and security analysis in particular, the term return is almost invariably
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associated with a percentage (say, return on investment of 12%) and not a mere amount (like, profit of Rs. 150.). In security analysis we are primarily concerned with return forms a particular investment say, a share or a debenture or other financial instrument. Single period Returns:
It refers to a situation where an investor is concerned with return from a single period (Say, one day, one week, one month or one year). Multi period Returns:
It refers to situation where more than single period returns are under consideration. Investor is concern with computing the return per period, over a longer period.
Ex-Post Returns: The measurement of return from the historical data can be referred to Ex- Post returns. This includes the both current income and capital gains (or losses) brought about by gains price of the security. The income and capital gains are then expressed as .a percentage of the initial investment.
Ex-Ante Returns:
The majority of investors tend to emphasize the return they expect from a security while making investment decision and the expected return of a security. This enables the investors to look into future prospects from an investment and the measurement of returns from expectation of benefits is known as ex-ante returns. TYPES OF RISKS:
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Risk consists of two components. They are 1. Systematic Risk 2. Un-systematic Risk 1. Systematic Risk: Systematic risk is caused by factors external to the particular company and uncontrollable by the company. The systematic risk affects the market as a whole. Factors affect the systematic risk are Economic conditions Political conditions Sociological changes
The systematic risk is unavoidable. Systematic risk is further sub-divided into three types. They are Market Risk Interest Rate Risk Purchasing Power Risk
a) Market Risk: One would notice that when the stock market surges up, most stocks post higher price. On the other hand, when the market falls sharply, most common stocks will drop. It is not uncommon to find stock prices falling from time to time while a companys earnings are rising and vice-versa. The price of stock may fluctuate widely within a short time even though earnings remain unchanged or relatively stable. b). Interest Rate Risk: Interest rate risk is the risk of loss of principal brought about the changes in the interest rate paid on new securities currently being issued.
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c). Purchasing Power Risk: The typical investor seeks an investment which will give him current income and / or capital appreciation in addition to his original investment. 2.Un-systematic Risk: Un-systematic risk is unique and peculiar to a firm or an industry. The nature and mode of raising finance and paying back the loans, involve the risk element. Financial leverage of the companies that is debt-equity portion of the companies differs from each other. All these factors affect the un-systematic risk and contribute a portion in the total variability of the return.
Managerial inefficiently Technological change in the production process Availability of raw materials Changes in the consumer preference Labour problems
The nature and magnitude of the above mentioned factors differ from industry to industry and company to company. They have to be analyzed separately for each industry and firm. Unsystematic risk can be broadly classified into: a) Business Risk b) Financial Risk
a) BUSINESS RISK:
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Business risk is that portion of the unsystematic risk caused by the operating environment of the business. Business risk arises from the inability of a firm to maintain its competitive edge and growth or stability of the earnings. The volatibility in stock prices due to factors intrinsic to the company itself is known as Business risk. Business risk is concerned with the difference between revenue and earnings before interest and tax. Business risk can be divided into.
i)
Internal Business Risk:
Internal business risk is associated with the operational efficiency of the firm. The operational efficiency differs from company to company. The efficiency of operation is reflected on the companys achievement of its pre-set goals and the fulfillment of the promises to its investors.
ii)
External Business Risk:
External business risk is the result of operating conditions imposed on the firm by circumstances beyond its control. The external environments in which it operates exert some pressure on the firm. The external factors are social and regulatory factors, monetary and fiscal policies of the government, business cycle and the general economic environment within which a firm or an industry operates.
b) FINANCIAL RISK:
It refers to the variability of the income to the equity capital due to the debt capital. Financial risk in a company is associated with the capital structure of the company. Capital structure of the company consists of equity funds and borrowed funds. PHASES PORTFOLIO MANAGEMENT PORTFOLIO MANAGEMENT is a process encompassing many activities aimed at optimizing investment of funds, each phase is an integral part of the whole process and the success of portfolio management depends upon the efficiency in carrying out each phase. Five phases can be identified: 1. Security analysis 2. Portfolio analysis
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3. Portfolio selection 4. Portfolio revision 5. Portfolio evaluation
1. SECURITY ANALYSIS:
It refers to the analysis of trading securities from the point of view of their prices, return, and risk. All investment is risky and the expected return is related to risk. The securities available to an investor for investment are numerous and of various types. The shares of over more than 7000 are listed in stock exchanges of the country. Securities classified into ownership securities such as equity shares and preference shares and debentures and bonds. Recently ,a number of new securities such as convertible debentures and deep discount bonds, zero coupon bonds, Flexi bonds, Floating rate bonds GDRs Euro currency bonds etc, are issued to raise funds for their projects by companies from which investor has to choose those securities the is worthwhile to be included in his investment portfolio. This calls for detailed analysis of the available securities. Security analysis is the initial phase of the portfolio management process. It examines the risk return characteristics of individual securities. A basic strategy in securities investment is to buy under priced securities and sell over priced securities. But the problem is how to identify such securities in other words mis priced securities. This is what security analysis is all about. Prices of the securities in the stock market fluctuate daily on the account of continuous buying and selling. Stock prices move in trends and cycles and are never stable. An investor in the stock market is interested in buying securities at low price and selling them at high price so as to get a good return on his investment made. He therefore tries to analyze the movement of share prices in the market. Two approaches are commonly used for this purpose: Fundamental analysis:
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Where in the analyst tries to determine the intrinsic value of the share based on the current and future earning capacity of the company. Technical analysis: Is an alternative approach to the study of stock price behavior?
2. Portfolio analysis:
Portfolio analysis involves quantifying the operational and financial impact of the portfolio. It is vital to evaluate the performances of investments and timing the returns effectively. The analysis of a portfolio extends to all classes of investments such as bonds, equities, indexes, commodities, funds, options and securities. Portfolio analysis gains importance because each asset class has peculiar risk factors and returns associated with it. Hence, the composition of a portfolio affects the rate of return of the overall investment. 3.PORTFOLIO SELECTION Then according to the risk appetite and return pattern an optimum portfolio is designed for the investor. The baskets of investment instrument selected in the previous step are given due weight age and appropriate amount of money is invested in each of the investment avenue so as to get maximum return with minimum possible risk.
4.PORTFOLIO REVISION The fund managers main objective is revision of portfolio on monthly basis, The actual meaning is one person is taking care of investors capital. Addition of stock, deletion of stocks happen based on market conditions.
5.PORTFOLIO EVALUATION
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The next step would be evaluating the needs. Other investment instruments and options should be analyzed. The risk-return profile of investment products is evaluated in this step. Every investment product varies according to its return potential and riskiness. Investment products giving a high rate of return are generally risky and volatile. The products giving a lower rate of return usually are less risky.
MONEY MARKET MUTUAL FUNDS
Money Market Mutual Fund

A money market fund is a mutual fund open-ended scheme that invests solely in cash/cash equivalent securities with less than one year maturity, which are also often referred to as money market instruments. These investments are short-term very liquid investments with high credit rating. Money market fund's purpose is to provide investors with a safe place to invest in easily accessible cash-equivalent assets characterized as a low-risk, low-return investment. Because of their relatively low returns, it might not be feasible to use money market funds as a long-term investment option. To understand how a Money Market Mutual Fund (MMMF) works and how should one evaluate when to invest in these funds, we need to first figure out what money market is, what investments are traded in money market and who are the players in this field. Broadly speaking, the money market is a marketplace where money is bought and sold. This market is similar to capital market (where capital or investments having long maturity are dealt with). The money market is a place for large institutions and the government - to manage their short term cash needs. Money market securities are issued by governments, financial institutions and large corporations. The most common types of money market instruments are shown in side figure. Since the maturity of these securities is generally below one year, this market is also called cash market. This maturity differentiates money market from fixed-income market which consists of securities having life between one to five years.
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Features of Money Market Mutual Funds - Money market funds are the safest of all the mutual funds. They typically spend in certificates of deposits, government securities and government securities. In money market funds Net Asset Value or the NAV of the investment is tried to be kept at a fixed rate of $1 for every share even when the investments fail to perform. This makes the money market funds secure and the risk factor is very low. -These funds are regulated by the Investment Company Act that was established in 1940. -Dividends are paid to investors when the fun performs well in the market. -These are open ended mutual funds that are a good source of liquid money to the different intermediaries. In general huge investments are required for investing in money market instruments. This might not be possible for the common retail investors. Here money market funds step in to provide the retail investors the opportunity to invest in the instruments as per their capacity and benefit from the high yield. Purpose and Benefits of Money Market Mutual Funds for Investors: There are three instances when money market mutual funds, because of their liquidity, are particularly suitable investments. 1. Safety and Convenience Money market mutual funds offer a convenient place for cash reserves when an investor is not quite ready to make an investment or is anticipating a near-term cash outlay for a noninvestment purpose. Money market mutual funds offer ultimate safety and liquidity. This means that investors will have an expected sum of cash at the very moment that they need it. 2. Diversification An investor holding a basket of mutual funds from a single fund company may occasionally want to transfer assets from one fund to another. If, however, the investor wants to sell a fund before deciding on another fund to purchase, a money market mutual fund offered by the same fund company may be a good place to park the proceeds of sale. Then, at the appropriate time, the investor may exchange his or her money market mutual fund holdings
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for shares of the other funds in the fund family. 3. Earnings To benefit their clients, brokerage firms regularly use money market mutual funds to provide cash management services. Putting a client's dormant cash into money market mutual funds will earn the client an extra percentage point (or two) in annual returns above those earned by other possible investments. 4. Liquidity Investors can sell their mutual fund units on any business day and receive the current market value on their investments within a short time period (normally three- to five-days). Mutual Funds are managed by Asset Management Company (AMC) The company that puts together a mutual fund is called an AMC. An AMC may have several mutual fund schemes with similar or varied investment objectives. The AMC hires a professional money manager, who buys and sells securities in line with the fund's stated objective. Open- and Close-Ended Funds
1) Open-Ended Funds At any time during the scheme period, investors can enter and exit the fund scheme (by buying/ selling fund units) at its NAV (net of any load charge). Increasingly, AMCs are issuing mostly open-ended funds. 2) Close-Ended Funds Redemption can take place only after the period of the scheme is over. However, closeended funds are listed on the stock exchanges and investors can buy/ sell units in the secondary market (there is no load).
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Net Asset Value ( NAV) NAV is the total asset value (net of expenses) per unit of the fund and is calculated by the AMC at the end of every business day. TYPES OF MONEY MARKET MUTUAL FUNDS Money market funds are of two types: 1. Institutional Money Market Mutual Funds: These funds are held by governments, institutional investors and businesses etc. Huge sum of money is involved in institutional money funds. 2. Retail Money Market Mutual Funds: Retail money market funds are used for parking money temporarily. The investment portfolio of money market funds comprises of treasury bills, short term debts, tax free bonds etc.
TYPES OF RETAIL MONEY MARKET FUNDS Participatory funds
Participatory Notes commonly known as P-Notes or PNs are instruments issued by registered foreign institutional investors (FII) to overseas investors, who wish to invest in the Indian stock markets without registering themselves with the market regulator, the Securities and Exchange Board of India - SEBI. SEBI permitted foreign institutional investors to register and participate in the Indian stock market in 1992. Investing through P-Notes is very simple and hence very popular amongst foreign institutional investors.
Treasury Bills
Treasury Bills (T-bills) are the most marketable money market security. Their popularity is mainly due to their simplicity. Essentially, T-bills are a way for the U.S. government to raise money from the public. In this tutorial, we are referring to T-bills issued by the U.S. government, but many other governments issue T-bills in a similar fashion. T-bills are short-term securities that mature in one year or less from their issue date. They are issued with three-month, six-month and one-year maturities. T-bills are purchased for a price that is less than their par (face) value; when they mature, the government pays the holder the full par value.
Tax Free Bonds
A tax-free bond fund is a mutual fund that invests in tax free bonds. Those bonds are primarily municipal bonds. Hence, most tax-free bond funds are in fact municipal bond funds. Tax-free bond funds are free of federal income taxes. Funds are available that are also free of state income taxes. They are said to be double tax free. Some localities have local income taxes. Funds that are free of all three levels of income taxes are called triple tax free funds. As with other bond funds, the average maturity and the average bond rating of the bond portfolio are key factors which differentiate one bond fund from another.
Certificates of Deposit
Certificates of deposit (CDs) are certificates issued by a federally chartered bank against deposited funds that earn a specified return for a definite period of time. They are one of several types of interest-bearing "time deposits" offered by banks. An individual or company lends the bank a certain amount of money for a fixed period of time, and in exchange the bank agrees to repay the money with specified interest at the end of the time period. The certificate constitutes the bank's agreement to repay the loan. The maturity rates on CDs range from 30 days to six months or longer, and the amount of the face value can vary greatly as well. There is usually a penalty for early withdrawal of funds, but some types of CDs can be sold to another investor if the original purchaser needs access to the money before the maturity date.
Commercial Paper
Commercial Paper is nothing more than a promissory note sold by a large organization with the minimum size usually set at $100,000. The maturity of Commercial Paper is anywhere between 1 and 270 days (9 months). Longer maturities must be registered with the Securities and Exchange Commission (SEC). Lines of credit from large banks ensure that there is plenty of cash available to pay off Commercial Paper reducing the risk taken on by their holders. Advantages In a falling market it is observed that traders flee the market by selling their holdings to minimize their losses. In those times of crisis, money market mutual funds are good investment options for investors. These funds are also a great investment tools for those investor who are interested for
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a comparatively safer investment option. Large financial institutions like banks and government approach money market mutual funds to manage their short term liquidity. Individual investors can invest in these funds through mutual fund companies. Disadvantages of Money Market Mutual Funds Low Interest Rates While money market funds provide excellent safety, you are unlikely to get much of a yield while your money is parked there. While money market funds tend to pay a bit more than checking and savings accounts, their returns are often dwarfed by those available on certificates of deposits and government bonds. Check Restrictions You might be tempted to use a higher-yielding money market fund as a replacement for your checking account, but that could be a mistake. Many money market mutual funds restrict the number of checks account holders are permitted to write each month, and that number can be quite low. Often you are permitted to write only three to five checks per month. Potential for High Fees While you might be able to find checking accounts and savings accounts that are free of fees, the same may not be true of a money market mutual fund. All mutual funds, including money market funds, have annual expenses. In the case of a low-yielding money market fund, those fees could eat up a large portion of the return.
Selecting a Fund The various types of funds all invest in the same basket of securities within their section (Government securities, high rated bonds etc) so the returns of a particular fund might vary a minor percent from the others in its section. A fund with low operating costs therefore will generally produce better yields. Annual operating expenses should be your measuring stick when analyzing a fund. If a mutual fund is successful, the larger amounts of capital it controls will translate into lower operating expenses for investors. Keep in mind that although these investments are considered low risk, in their attempt to
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outperform, some have reached for higher-yielding instruments that are outside the norm, including company deposits, low rated debt instruments etc. so do your due diligence before investing in any of these funds. Thus we can say that money market offers superior avenues for deployment of bulk short term funds in terms of risk, return and liquidity. Money market mutual funds make it possible for retail investors to participate in money markets. Money market mutual funds enable retail investors to earn money market yields otherwise available to large and institutional investors. Money market mutual funds are usually rated by the rating agencies. So, check for the fund ratings before investing
PRODUCT PORTFOLIO
Baroda Pioneer Mutual Fund
Key Information
Mutual Fund Setup Date Baroda Pioneer Mutual Fund Nov-24-1994
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Incorporation Date Sponsor Trustee Chairman CEO / MD CIO Compliance Officer Investor Service Officer Assets Managed
Nov-05-1992 Pioneer Global Asset Management S.p.A. and Bank of Baroda N.A. Mr. Jack Lin Mr. Jaideep Bhattacharya N.A Ms. Rashmi Pandit N.A Rs. 5405.68 crore (Dec-31-2012)
Table of Returns (NAV as on Mar-15-2013) Period Returns (%) Rank #
1 mth 3 mth 6 mth 1 year 2 year 3 year 5 year
0.6 2.1 4.2 9.4 9.4 8.4 -
6 36 25 5 6 9 -
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Table of Absolute Returns (in %)

Year Qtr 1 Qtr 2 Qtr 3 Qtr 4 Annual
2012 2011 2010 2009
2.4 2.0 1.0 0.9
2.4 2.0 1.1 1.4
2.2 2.1 1.5 1.1
2.1 2.2 1.7 0.9
9.7 8.9 5.5 4.3
INVESTMENT INFO
Investment Objective
To generate income with a high level of liquidity by investing in a portfolio of money market and debt securities.
Scheme details
Fund Type Investment Plan Launch date Benchmark Asset Size (Rs cr) Minimum Investment Last Dividend Bonus Open-Ended Growth Jan 28, 2009 CRISIL Liquid Fund 3,353.90 (Dec-31-2012) Rs.5000 N.A. N.A.
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Fund Manager
Alok Sahoo / Hetal Shah
TABLE SHOWING DETAILS OF INVESTTMENTS (PORTFOLIO)

Portfolio Holdings
Debt
(Feb 28, 2013)
Rating
Value
CMB HDFC Bank HDFC Bank Kotak Mahindra Bank Fixed Deposit UCO Bank State Bank of Mauritius State Bank of Mauritius State Bank of Mauritius Bank of Nova Scotia Unrated Unrated Unrated Unrated Unrated Unrated Unrated Unrated
695.07 299.79 200.00 195.29 300.00 150.00 50.00 50.00 40.00 10.00
11.01 4.75 3.17 3.09 4.75 2.38 0.79 0.79 0.63 0.16
Table showing details of Money market Investments by the Fund

Money Market Rating Value %
MONEY MARKET INSTRUMENT / CD Canara Bank Andhra Bank Punjab National Bank Indusind Bank Punjab National Bank State Bank of Hyderabad Oriental Bank of Commerce Karur Vysya Bank Syndicate Bank Vijaya Bank State Bank of Patiala Vijaya Bank
- 2,209.97 448.13 257.92 224.18 198.90 125.00 124.03 99.94 99.45 99.22 74.95 74.93 59.78
35.04 7.10 4.09 3.55 3.15 1.98 1.97 1.58 1.58 1.57 1.19 1.19 0.95
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Punjab National Bank IDBI Bank State Bank of Patiala Indian Bank Indian Bank Canara Bank Canara Bank Punjab & Sind Bank MONEY MARKET INSTRUMENT / CP Indian Oil Corporation Tata Capital Housing Finance Housing Development Finance Corporation Tata Capital Services Sterlite Energy Reliance Capital Indian Oil Corporation Tata Capital Housing Finance Cholamandalam Investment & Financial Co. Edelweiss Financial Services Magma Fincorp Magma Fincorp Nirma Indian Oil Corporation ICICI Home Finance Indian Oil Corporation Dewan Housing finance Corporation Edelweiss Financial Services ECL Finance Infrastructure Development Finance Company Jindal Steel & Power IL&FS Financial Services Indian Oil Corporation
49.84 49.81 49.77 49.62 49.61 24.98 24.98 24.92
0.79 0.79 0.79 0.79 0.79 0.40 0.40 0.39 37.68 5.92 3.15 3.10 2.84 2.37 2.36 1.58 1.58 1.58 1.58 1.18 1.18 1.02 0.79 0.79 0.79 0.79 0.79 0.79 0.79 0.78 0.40 0.39
- 2,377.29 373.44 199.02 195.40 178.95 149.29 149.16 99.87 99.75 99.56 99.52 74.69 74.54 64.60 49.92 49.84 49.81 49.80 49.73 49.73 49.72 49.47 24.98 24.87
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Indian Oil Corporation L&T Housing Finance Magma Fincorp Srei Equipment Finance Tata Motors MONEY MARKET INSTRUMENT /Treasury Bill TBILL 364 DAY 2013 TBILL 182 DAY 2013 TBILL 182 DAY 2013
Cash / Call Rating
24.85 19.89 11.44 9.99 5.47 219.62 99.85 74.77 45.00

Value
0.39 0.32 0.18 0.16 0.09 3.47 1.58 1.18 0.71

%
CBLO / Reverse Repo Investments

Sector Value (Rs in cr.) Qty %
407.74
6.47
Debt Cash / Call Net Receivable / Payable Money Market
----
----
15.76 6.47 1.58
--
--
76.19
FINDINGS
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1. Majority of the respondents i.e. people are in the age group of 29-32 years 2. 36% of the respondents, representing 18 people, are privately employed 3. Out of the total 50 sample chosen, 36 respondents are married and 14 people are not married 4. Over 60% of the respondents are in the higher income group of more than Rs. 10,000 income per month 5. 36 respondents invests their money in mutual funds, anticipating low risk and good returns 6. 26 people representing 52% prefer to invest mostly in equity funds 7. 50% of the people preferred low risk, whereas 30% of the respondents preferred moderate risk. High risk sample was low with 20%. 8. 31 people representing 62% prefer to invest in open-ended mutual funds, driven by the investor getting the money back promptly at net asset value related prices from the Mutual Funds. 9. 24 people representing 48% prefer to invest in mutual funds for a long term period, while 26 people said it is for a short term period. 10.16 people representing 32% prefer to invest in technology funds, while 28% prefer in real estate funds, and 16% each prefer in investing in financial and healthcare funds 11.24 people representing 48% prefer to invest in mutual funds for tax saving purposes 12.16 people said that they prefer making investments in mutual funds after making a thorough research 13.people said that their return on investments in mutual funds were in between 6-10%, while 12 people said it is between 11-15% 14.40 people representing 80% said mutual fund is better than other type of investments
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SUGGESTIONS
1. Assess yourself: Self-assessment of ones needs; expectations and risk profile is of prime importance failing which, one will make more mistakes in putting money in right places than otherwise. One should identify the degree of risk bearing capacity one has and also clearly state the expectations from the investments. Irrational expectations will only bring pain. 2. Try to understand where the money is going: It is important to identify the nature of investment and to know if one is compatible with the investment. One can lose substantially if one picks the wrong kind of mutual fund. In order to avoid any confusion it is better to go through the literature such as offer document and fact sheets that mutual fund companies provide on their funds. 3. Don't rush in picking funds, think first: one first has to decide what he wants the money for and it is this investment goal that should be the guiding light for all investments done. It is thus important to know the risks associated with the fund and align it with the quantum of risk one is willing to take. One should take a look at the portfolio of the funds for the purpose. Excessive exposure to any specific sector should be avoided, as it will only add to the risk of the entire portfolio. Mutual funds invest with a certain ideology such as the "Value Principle" or "Growth Philosophy". Both have their share of critics but both philosophies work for investors of different kinds. Identifying the proposed investment philosophy of the fund will give an insight into the kind of risks that it shall be taking in future. 4. Invest. Dont speculate: A common investor is limited in the degree of risk that he is willing to take. It is thus of key importance that there is thought given to the process of investment and to the time horizon of the intended investment. One should abstain from speculating which in other words would mean getting out of one fund and investing in another with the intention of making quick money. One would do well to remember that nobody can perfectly time the market so staying invested is the best option unless there are compelling reasons to exit.
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5. Dont put all the eggs in one basket: This old age adage is of utmost importance. No matter what the risk profile of a person is, it is always advisable to diversify the risks associated. So putting ones money in different asset classes is generally the best option as it averages the risks in each category. Thus, even investors of equity should be judicious and invest some portion of the investment in debt. Diversification even in any particular asset class (such as equity, debt) is good. Not all fund managers have the same acumen of fund management and with identification of the best man being a tough task, it is good to place money in the hands of several fund managers. This might reduce the maximum return possible, but will also reduce the risks. 6. Be regular: Investing should be a habit and not an exercise undertaken at ones wishes, if one has to really benefit from them. As we said earlier, since it is extremely difficult to know when to enter or exit the market, it is important to beat the market by being systematic. The basic philosophy of Rupee cost averaging would suggest that if one invests regularly through the ups and downs of the market, he would stand a better chance of generating more returns than the market for the entire duration. The SIPs (Systematic Investment Plans) offered by all funds helps in being systematic. All that one needs to do is to give post-dated cheques to the fund and thereafter one will not be harried later. The Automatic investment Plans offered by some funds goes a step further, as the amount can be directly/electronically transferred from the account of the investor. 7. Do your homework: It is important for all investors to research the avenues available to them irrespective of the investor category they belong to. This is important because an informed investor is in a better decision to make right decisions. Having identified the risks associated with the investment is important and so one should try to know all aspects associated with it. Asking the intermediaries is one of the ways to take care of the problem. 8. Find the right funds: Finding funds that do not charge many fees is of importance, as the fee charged ultimately goes from the pocket of the investor. This is even more important for debt funds as the returns from these funds are not much. Funds that charge more will reduce the yield to the investor. Finding the right funds is important and one should also use DEPARTMENT OF MBA Page 88 ST. XAVIERS PG COLLEGE
these funds for tax efficiency. Investors of equity should keep in mind that all dividends are currently tax-free in India and so their tax liabilities can be reduced if the dividend payout option is used. Investors of debt will be charged a tax on dividend distribution and so can easily avoid the payout options. 9. Keep track of your investments: Finding the right fund is important but even more important is to keep track of the way they are performing in the market. If the market is beginning to enter a bearish phase, then investors of equity too will benefit by switching to debt funds as the losses can be minimized. One can always switch back to equity if the equity market starts to show some buoyancy. 10. Know when to sell your mutual funds: Knowing when to exit a fund too is of utmost importance. One should book profits immediately when enough has been earned i.e. the initial expectation from the fund has been met with. Other factors like non-performance, hike in fee charged and change in any basic attribute of the fund etc. are some of the reasons for to exit. For more on it, read "When to say goodbye to your mutual fund." 11.Investments in mutual funds too are not risk-free and so investments warrant some caution and careful attention of the investor. Investing in mutual funds can be a dicey business for people who do not remember to follow these rules diligently, as people are likely to commit mistakes by being ignorant or adventurous enough to take risks more than what they can absorb. This is the reason why people would do well to remember these rules before they set out to invest their hard-earned money.
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CONCLUSION
Mutual Funds now represent perhaps most appropriate investment opportunity for most investors. As financial markets become more sophisticated and complex, investors need a financial intermediary who provides the required knowledge and professional expertise on successful investing. As the investor always try to maximize the returns and minimize the risk. Mutual fund satisfies these requirements by providing attractive returns with affordable risks. The fund industry has already overtaken the banking industry, more funds being under mutual fund management than deposited with banks. With the emergence of tough competition in this sector mutual funds are launching a variety of schemes which caters to the requirement of the particular class of investors. Risk takers for getting capital appreciation should invest in growth, equity schemes. Investors who are in need of regular income should invest in income plans. The stock market has been rising for over three years now. This in turn has not only protected the money invested in funds but has also to helped grow these investments. This has also instilled greater confidence among fund investors who are investing more into the market through the MF route than ever before. India's largest mutual fund, UTI, still controls nearly 80 per cent of the market. Also, the mutual fund industry as a whole gets less than 2 per cent of household savings against the 46 per cent that go into bank deposits. Some fund managers say this only indicates the sector's potential. "If mutual funds succeed in chipping away at bank deposits, even a triple digit growth is possible over the next few years. To conclude: There is a great potential for investment in Mutual Funds as people wants to save for various future obligation. Since Rate of Interest on Bank deposit is falling people will be attracted towards investments in Mutual Funds because of high rate of returns. Comparatively people of small towns are less aware of other investment avenues viz Mutual Fund.
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People of young age group are ready to take risk and they can be targeted for investment in Mutual Fund.
People with less experience were inclined towards investment in the Mutual Funds. It attracted as a safer avenue as compared to share market.
Mutual Funds are more of an investment option than the speculative avenue. People tend to gain through long investments rather than through short term.
Income funds and ELSS are among the few top funds. People are not willing to take much risk and bear loss.
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BIBLIOGRAPHY
Books:
1. FINANCIAL MARKET AND SERVICES -Gordon and Natarajan 2. Investments Analysis & Portfolio Management by Prasana Chandra & V.K.Bhalla 3. Financial Accounting by I.M. Panday
Magazines
1. Business India 2. Business World News Papers 1. Economic Times 2. Business Standard.
Websites:
www.utimf.com www.reliancemutual.com
www.amfiindia.com www.wikipedia.com www.angelbroking.com
www.mutualfundsindia.com www.bseindia.com
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ABSTRACT:

ST. XAVIERS PG COLLEGE

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Need of the study

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SCOPE OF THE PROJECT

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Why Select Mutual Funds?

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History Of Mutual Funds In India:

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Asset Management Company

by Funds Structure OfAppointed Mutual Trustees

Provides Necessary Custodian Custodian Services

Provide Banking Bankers Services

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Structure And Constituents Of Fund

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Figure 1: Types Of Mutual Funds Schemes

Source: Secondary Data

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D. Money Market Funds:

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3. Schemes in Mutual Funds:

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Bank FD Postal Savings

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Profile of MIDEAST INVESTMENTS PVT LTD.

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towards our clients, employees, vendors and society at large."

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History of mutual funds

First Phase 1964-87

Second Phase 1987-1993 (Entry of Public Sector Funds)

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Fourth Phase since February 2003

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The graph indicates the growth of assets over the years.

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Organization of a Mutual Fund

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Asset Management Company (AMC) :

Registrar and Transfer Agent :

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Concept of mutual fund

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