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INTRODUCTION
1.1 GENERAL INTRODUCTION In todays market people invest money to gain more. So when they take into account, they mostly look out for Investment Company where they can get more income.

Investment companies can be classified into closed-end and open-end investment companies. Closed-end is when it is readily transferable in the market. Open-end funds sell their own shares to investors and ready to buy back their old shares.

If we talk about the investment options today, in India we have so many investment companies like UTI, LIC etc, all have their own special ways of servicing the customers. The investors also feel that they are worth to be the part of that company. These days people mainly look for avoiding tax so normally they l ook out for some investments which can help them in doing so. When it comes to this point of view, people mainly look out for mutual fund.

Mutual fund is a pool of funds, which is divided into units of equal value and sold to investing public, and the funds so collected are utilized for collective investments in various capitals and money market instrument.

1.2 THEORETICAL BACKGROUND

1.2.1 Mutual Fund

The Indian MF industry is at a point of strategic inflection. It was founded with the establishment of UTI in 1964. The private sector MF entered the Scene in early 1990 s and introduced better service standards and wider product choices. The Indian MF industry has not performed up to the mark in gaining investor confidence. The assets have been garnered based on performance rather than confidence of investor.

1.2.2 Concept and origin of Mutual Funds

Personnel investing involve a clear understanding of the investment environment; Investing means the committing of money for the purchase of assets, based on a careful analysis of risks and rewards anticipated over a period of time. Depending upon the characteristics of individuals there exists a broad spectrum of purposes for Investors seeking monetary returns. Investors have a wide variety of opportunity to commit funds various types of saving plans involving bonds, preferred stocks and common stocks and other types of portfolio are available.

In contrast to the large investors who can engage experienced investment Advisors in the selection and supervision of there funds, the small investors, by there nature and other limitations cannot construct and successfully manage investment Portfolio. They lack the proper technical knowledge of the capital market and the share market transactions and consequently may suffer heavy losses.

The basic principles of investment trusts are diversifying the securities purchased for the trust and expert management. It reduces the risks of capital depreciations and poor dividends.

At the same time the investors are given the benefit of expert management through trained experienced and specialized personnel, which are the ordinary investors usually lacks.

There are two main types of investment companies. The first group is variously called Management investment trust or a closed end companies in U.S.A And Japan. The second is the unit trust type and by far the more important one. These Are referred to as open end investment companies or as mutual funds as they are Usually called. These may be either fixed or flexible.

MEANING OF MUTUAL FUNDS Mutual fund is a pool of funds which is divided into units of equal value and sold to investing public and the funds so collected are utilized for collective investment in various capital and money market instrument.

Definitions

Different persons in different words have defined mutual fund. The SEBI (MF) Regulations, 1993 defines mutual fund as A fund established In the form of a trust by a sponsor to raise monies by the trustees through the sale of

units to the public under one or more schemes for investing in securities in accordance with these regulations.

Characteristics of MF

a) A mutual fund actually belongs to the investors who have pooled their funds. The ownership of the MF is in the hands of the investors.

b) A MF is managed by investment professionals and other service providers , who earn a fee for their services from the fund. c) The pool of funds is invested in a portfolio of marketable investment. The value of the portfolio is updated every day. d) The investors share in the fund is denominated by units. The value of the units changes with change in the portfolios value , every day. The value of one unit of investment is called as the net assets value or NAV. e) The investment portfolio of the Mutual fund is vested according to the slated Investment objectives of the fund

Structure of Mutual Fund

Mutual fund is a mechanism for pooling the investment, made by the investors, in stock market, securities, shares and debentures as disclosed in offer document and issuing units to the investors. Units are issued to the investors in accordance with quantum of money invested by them. Investors of Mutual funds are known as Unit Holders.

Figure 1.1

As investments are spread across a wide cross-section of industries and sectors, the risk are reduced. Diversification reduces the risk because all stocks may not move in the same direction in the same proportion at the same time.

The profits or losses are shared by investors in proportion to their investments. The Mutual funds normally come out with a number of schemes with different investment objectives which are launched from time to time. A mutual fund is required to be registered with Securities and Exchanges Board of India (SEBI) which regulates securities markets before it can collect funds from the public.

ONE CAN MAKE MONEY FROM MUTUAL FUND IN THREE WAYS: Income is earned from dividends 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 sell securities that have increased in price, the fund have a capital gain most fund also pass on this gain to investor in a distribution. If fund holding increases in price but are not sold by the fund manager, the fund shares increase in price. One can sell then this mutual fund shares the profit.

INDUSTRY PROFILE
SHARE MARKET:
The trading on stock exchanges in India used to take place through open outcry without use of information technology for immediate matching or recording of trades. This was time consuming and inefficient. This imposed limits on trading volumes and efficiency. In order to provide efficiency, liquidity and transparency, NSE introduced a nation-wide on-line fully automated screen based trading system where a member can punch into the computer quantities of securities and the prices at which he likes to transact and the transaction is executed as soon as it finds a matching sale or buy order from a counter party. Screen based electronic system electronically matches orders on a strict price/time priority and hence cuts down on time, cost and risk of error, as well as on fraud resulting in improved operational efficiency. It allows faster incorporation of price sensitive information into prevailing prices, thus increasing the informational efficiency of markets. It enables market participants, irrespective of their geographical locations, to trade with one another simultaneous, improving the depth and liquidity of the market. It provides full anonymity by accepting orders, big or small, from members without revealing their identity, thus providing equal access to everybody. It also provides a perfect audit trial, which helps to resolve disputes by logging in the trade execution process entirety. Now dematerialization of shares is introduced a new concept which converts paper based physical trading into electronic trading. It is a safe and convenient way to hold securities. Screen based trading system helps in faster transfer of securities and no stamp duty is required on transfer of securities.

Commodity:
No balance sheet, P&L statement, EBITDA and reading between the lines. Commodity trading is about the simple economics of supply and demand. Supports are known, only resistance matters! Minimum support price acts as a statutory support for many commodities. No Dollar-Rupee premiums/discounts. No hedging on the NYMEX. Indian commodity derivatives hedge both

forex and commodity specific risk, at a single cost. No brainstorming over market direction. Seasonality patterns quiet often provide a clue to both short-term and long-term players.

No scam, no price rigging. Commodity trading comes with no insider trading information and company specific risk.

Multi Commodity Exchange (MCX):

Multi Commodity Exchange (MCX) is an independent commodity exchange based in India. It was established in 2003 and is based in Mumbai. The turnover of the exchange for the fiscal year 2009 was US$ 1.24 trillion, and in terms of contracts traded, it was in 2009 the world's sixth largest commodity exchange. MCX offers futures trading in bullion, ferrous and non-ferrous metals, energy, and a number of agricultural commodities (mentha oil, cardamom, potatoes, palm oil and others). It is regulated by the Forward Markets Commission. MCX is India's No. 1 commodity exchange with 83% market share in 2009 The exchange's main competitor is National Commodity & Derivatives Exchange Ltd Globally, MCX ranks no. 1 in silver, no. 2 in natural gas, no. 3 in crude oil and gold in futures trading The highest traded item is gold. MCX has several strategic alliances with leading exchanges across the globe As of early 2010, the normal daily turnover of MCX was about US$ 6 to 8 billion MCX now reaches out to about 800 cities and towns in India with the help of about 126,000 trading terminals MCX COMDEX is India's first and only composite commodity futures price index METAL FIBER BULLION ENERGY

SPICES PULSES OIL&OIL SEEDS

PLANTATIONS PETROCHEMICALS CEREALS

Table 1.2.a: List of Commodities

National Commodity and Derivatives Exchange (NCDEX):

National Commodity & Derivatives Exchange Limited (NCDEX) is an online commodity exchange based in India. It was incorporated as a private limited company incorporated on 23 April 2003 under the Companies Act, 1956. It obtained its Certificate for Commencement of Business on 9 May 2003. It has commenced its operations on 15 December 2003. NCDEX is a closely held private company which is promoted by national level institutions and has an independent Board of Directors and professionals not having vested interest in commodity markets.

Mutual funds:
A mutual fund is a professionally managed type of collective investment that pools money from many investors to buy stocks, bonds, short-term money market instruments, and/or other securities.

Advantages of Mutual Funds

Mutual funds have advantages compared to direct investing in individual securities. These include: Increased diversification Daily liquidity Professional investment management Ability to participate in investments that may be available only to larger investors Service and convenience

 Government oversight Ease of comparison

Disadvantages of Mutual Funds

Mutual funds have disadvantages as well, which include. Fees Less control over timing of recognition of gains Less predictable income No opportunity to customize

Types of Mutual Funds:

Open-end funds Closed-end funds Unit investment trusts Exchange-traded funds

Investments and Classifications:

Money market funds Bond funds Stock or equity funds Hybrid funds Index (passively-managed) versus actively-managed

Mutual Funds Expenses:

Distribution charges Front-end load or sales charge Back-end load 12b-1 fees No-load funds 9

 Share classes Management fee Other fund expenses Shareholder transaction fees Securities transaction fees Expense ratio Controversy

1.2.3. HISTORY OF INDIAN MUTUAL FUND INDUSTRY

The mutual fund industry in India started in 1963 with the formation of Unit Trust of India, at the initiative of the Government of India and Reserve Bank 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 Can bank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund

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(Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC established its mutual fund in June 1989 while GIC had set up its mutual fund in December 1990. At the end of 1993, the mutual fund industry had assets under management of Rs.47,004 crores.

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

With the entry of private sector funds in 1993, a new era started in the Indian mutual fund industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year in which the first Mutual Fund Regulations came into being, under which all mutual funds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993.

The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI (Mutual Fund) Regulations 1996.

The number of mutual fund houses went on increasing, with many foreign mutual funds setting up funds in India and also the industry has witnessed several mergers and acquisitions. As at the end of January 2003, there were 33 mutual funds with total assets of Rs. 1,21,805 crores. The Unit Trust of India with Rs.44,541 crores of assets under management was way ahead of other mutual funds.

Fourth Phase since February 2003

In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust

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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, 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.

Figure 1.2

The graph indicates the growth of assets over the years.

1.2.4.Mutual fund calculation under SEBI consideration:

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Net Asset Value

Following are the regulatory requirements and accounting definitions laid down by SEBI: NAV = Net Asset of the Scheme / Number of Units Outstanding = MVL+ REC+ AI+ Asset AE Pay Lia No .of Units Outstanding as at the NAV date

MVL: Market value of Investment REC: Receivables AI: Other Accrued Income Asset: Other Assets (Dividend yet to be received) AE: Accrued Expense Pay: Other Payables Lia: Other Liabilities (Custodian and Management Fees)

Funds NAV is affected by: Purchase or Sale of Investors Securities. Valuation of all Investment Securities. Other Assets and Liabilities. Units Sold or Redeemed.

Classification of Mutual Fund

Open Ended Funds: These funds have units available for sale and repurchase at all time. An investor can buy or redeem the units at price based on NAV per Unit.

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Close Ended Funds: These funds dont have units available for sale and repurchase at all time. It allows only one-time sale of a fixed number of units. However, to provide liquidity to investors many close-ended funds get listed on a Stock Exchange(s).

Load Funds: Fund Manager made charges to the investors to cover distribution/ sales/marketing expenses. These charges are called Loads. If

load amount is charged over a period of time, it is called a Deferred Load. Some funds charge different amount of load to the investors depending on number of years the investors have stayed with funds. Such charges are called Contingent Deferred Sale Charge.

No-Load Funds: Funds which make no charges or load for sales expenses are called as No Load Funds.

1.2.5. TYPES OF MUTUAL FUNDS : -

Mutual Funds have specific investment objectives such as growth of capital, safety of principal current income or tax exempt income, one can select one fund or any number of different funds to help one meets ones specific goals. In general mutual fund fall under 3 general categories : Equity fund invest in shares of common stocks. Fixed income funds invest in government or corporate securities which offer fixed rate of returns. Balanced fund invest in a combination of both stocks and bonds.

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AGGRESSIVE GROWTH FUNDS :-

These funds seek to provide maximum growth of capital with secondary emphasis on dividend or interest income. They invest in common stocks with a high potential for rapid growth and capital appreciation.

Aggressive growth funds are suitable for those investors who can afford to assume the risk of potential loss in value of their investment in the hope of achieving substantial and rapid gains. They are not suitable for investors who must conserve their principal or who must maximize their current income.

GROWTH FUNDS:-

Like aggressive growth funds, growth fund generally invests in stocks for growth rather than income. They are considered more conservative in their approach because they usually invest in established companies to achieve long-term growth. Growth fund provides low current income but the investor principal is more stable then it would be in an aggressive growth fund. While the growth potential may be less over the short term, many growth funds have superior long-term performance records.

These funds are suitable for growth oriented investors but not investors who are unable to assume risk or who are dependent on maximizing current income from there investments.

GROWTH AND INCOME FUNDS:-

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Growth and income funds seek long-term growth of capital as well as current income. The investments strategies use to reach these goals vary among funds.

Growth and income funds have low to moderate stability of principal and moderate potential for current income and growth. They are suitable for investors who can assume some risk to achieve growth of capital but want to maintain a moderate level of current income.

FIXED INCOME FUNDS:The goal of fixed income fund is to provide high current income consistent with the level of capital. Growth of capital is of secondary importance. Fixed income funds offer a higher level of current income than money market funds, but a lower stability of principal. Fixed income funds are suitable for investors who want to maximize current income and who can assume a degree of capital risk in order to do so.

EQUITY FUNDS:Funds that invest in stocks represent the largest category of mutual fund. Generally the investment objective of this class of fund is long-term capital growth with some income. There are however many type of equity funds.

BALANCED FUNDS:-

The Balanced funds aims to provide both growth and income. These funds invest in both shares and fixed income securities in the proportion indicated in their offer documents. It is an idea for investors who are looking for the combinations of income and moderate growth.

MONEY MARKET FUNDS/ LIQUID FUNDS:For the cautious investors these funds provide a very high stability of principal while seeking a moderate to high current income. They invest in highly liquid; virtually risk free, short-term debt securities of agencies of the Indian government, banks and

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corporation and treasury bills. Because of their short-term investments, money market mutual funds are able to keep a virtually constant unit price; only the yield fluctuates. Money market funds are suitable for those investors who want high stability of principal and current income with immediate liquidity.

SPECIALITY / SECTOR FUNDS:These funds invest in securities of a specific industry or sector of the economy such as health care, technology, leisure, utilities or precious metals. The funds enable investor to diversify holding among many companies within an industry, a more conservative approach than investing directly in one particular company. Sector funds offer a opportunity for sharp capital gains in cases whe re the funds industry is in favor but also entail the risk of capital losses when the industry is out of favor. While sectors funds restrict holdings to a particular industry, other specialty funds such as index funds gives investors a broadly diversified portfolio and attempt to mirror the performance of various market averages.

1.2.6. Pros and corns of mutual fund

Advantages of Mutual funds

Diversified portfolio of investments: As the investments are made in various stocks of different companies, Professional Management: Fund Managers and his/her team of highly qualified professional looks at all perspectives before committing to an investment decision. This sort of specialist knowledge is available to the small retail investor through the MF route.

Market Linked Return: Many schemes offered by mutual funds help investors to gain return better than the market.

Diversification of Risk: Diversification reduces the risk of exposure to one or two shares or debentures or other instruments. 17

Reduction in Transaction Cost: A direct investors bears all costs of investing such as brokerage or custody of securities. Investing via Mutual Fund help investors to reduce the cost as larger volumes are involved

. Liquidity: An MF investor can invest and disinvest at will, irrespective of market conditions. In case of shares or bonds its very difficult to sell them unless and until a buyer is there. Mutual Funds give the option of liquidity. The units of an open ended scheme can be redeemed at any working day.

Convenience and Flexibility: Various options of Systematic Investment Plan, Systematic Withdrawal Plan and Systematic Transfer Plan are designed for the convenience of the investors.

Disadvantages of Mutual Fund

No Control over Costs: A Mutual Fund Investor has to pay management fees, fund distribution cost to the Mutual Fund. This cost is not incurred in direct investing. But this cost is less than the cost of direct investing by the investors.

No Tailor-made Portfolios: Investors investing in Mutual Fund gives the rights to Fund Manager to build the portfolio of shares, bonds and other securities.

W hile investing directly, investors can build there own portfoli o However, today Mutual Funds are offering families of schemes. Investors can choose from different investment plans c construct a portfolio of his choice .

Managing a Portfolio of Funds: Due to presence of large number of funds availability in the market, investor needs some advice to select a fund to achieve his objective

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1.2.7. MUTUAL FUND INDUSTRY IN INDIA

Mutual Funds in India

UTI

Private sector

Public

JVs with foreign Partners Birla Sun Capital Prudential ICICI Alliance Capital Kothari Pioneer

Foreign Houses

Indian Houses

Templeton Alliance Morgan Stanley

TATA JM CD EQUISEARC H

Banks SBI CANARA PNB BOI etc.

Institutions GIC LIC etc.

Figure 1.3

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1.2.8. THE RISK RETURN GRAPHS FOR VARIOUS FUNDS:-

Sector Funds R E T U R N S Equity Funds Balanced Funds Income Funds Liquid Funds RISKS Figure 1.4

The above Graph shows the Risk and Returns generated by different Funds. Liquid Funds are less Risky and also generate less Returns where as Sector Funds are more Risky but generate more Returns by the example of above two Funds it is clear that Risk and Returns are directly proportional to each other. Other Funds like Equity Funds, Balanced Funds and Income Funds are also gives the same percentage of Returns as the Risk involved.

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COMPANY PROFILE

CD Equi search is one of the leading brokerage houses with a strong presence in the institutional and HNI broking segment. With over 30 years of experience, you could besure of the best in class research, operations back-end support and above all, a name which inspires trust. At CD Equi search,the emphasis is on transparent and clean dealings. This has earned us our clients goodwill. This quality has stood the test of time and has helped us secure business from all quarters. At CD Equi search, people are not weighted down by tradition. Rather, we are inspired by the heritage of the company. Here, business is conducted by building long term relationships with our clients and associates by laying emphasis on ethical and clean dealings. Here, people practice the gentle art of finance with professionalism, skill and transparency. Continued growth which is so essential in todays fast paced and ever changing capital market has been a constant feature at CD equi search. With an eye on the future and in keeping with the 22

changing times, we at CD equi search have earned the investors goodwill our most important assets over the year. After having a track record of servicing institutions and HNIs for over 3 decades, we are planning to foray into the growing retail segment in a big way. We would be expanding across the geography with a wide network of our regional offices, branches, franchisees and sub-brokers. We would be offering a complete basket in financial services. We are looking at ourselves amongst one of the top ten broking houses in india by 2014. To achieve that, we have very aggressive plans of expansion. 2.10. M - CONNECT

CD MConnect is a mobile application developed by CD equisearch for its users to explore the complete Stock market spectrum on mobile phone. It is a value added service which will enable the users to access Market

information: Equity, F&O, Commodity and MF on Mobile Phone.

CD M-Connect supports all JAVA enabled GSM and Black Berry handsets having GPRS connectivity. Available for CD and Non CD Clients. Access Market News / Analyses 24x7 on Mobile. CD Clients will have the advantage to access their BackOffice data on Mobile Phone. Real time Equity, F&O, Commodities and MF rates on a single platform.

Set Watchlist for Equity, F/O and Commodity and track your favorite stocks. Rates Refresh Option available for all Watchlist. User-friendly interface for easy navigation. Stock Updates and Market Stats on your Mobile CDs Product and Services details available. Easy & free to download. View Top 10 Local and Global indices. Non CD Clients Can Sign up directly from their Mobile Phones through Non CD Client Sign Up link.

2.11.SMS SERVICES

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Types of SMS services: Trade confirmation SMS Equity Trade confirmation SMS Commodity Weekly Ledger Payin Auction SMS Welcome SMS Welcome Kit SMS Password Reset

Pro-Active SMS Services Sent from CD equisearch to its clients.

This SMS are sent to the clients daily b/w 5 pm to 7 pm who have traded in NSE, BSE and NSEFO. This SMS are sent to the clients daily b/w 9 am to 9:30 am who have traded in MCX and NCDEX on previous day.

Client has to subscribe for Weekly Ledger only once by sending sms WLED to 5757587. He will receive SMS every Saturday for his Ledger Balance as per his Back Office details.

The SMS is sent daily to the client. It contains the details like Settlement No, Exchange Name, Scrip Name, Qty and Rate at which the scrip were auctioned. The SMS is sent daily to the clients whose account is activated on previous day. It contains details like his Client Code, Branch Name and Tag. The SMS is sent to the client when the Welcome Kit is dispatched from CSO. The client can reset his Back Office password through SMS Services from CD

2.12.Linking of bank accounts for fund transfer

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Below are the various banks which are been having a link

1. ICICI Bank 2. Axis Bank 3. YES Bank 4. HDFC Bank 5. Karnataka Bank 6. Corporation Bank 7. Union Bank of India 8. South Indian Bank 9. Bank of Rajasthan 10. Oriental Bank of Commerce 11. Vijaya Bank 12. Bank of India

2.13. Services Offered - Electronic Payment

We can now make electronic payment to our clients using the RTGS / NEFT mode. Once registration is done, all payments from CD to the client would go by default as a direct credit in to the registered bank account whether the payout is marked by client, sub broker or branch. This facility is available in all bank branches which are enabled for RTGS / NEFT facility. Facility of direct bank credit in any bank that the client has his/her account. Reduced time of credit clearing time eliminated. Client need not go to the bank to deposit payout cheques.

PRE-PAID BROKERAGE:

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Pre-paid brokerage is a scheme where we are selling brokerage vouchers to our prospective clients by giving them special brokerage rate with a time validity in-turn taking commitment of absolute brokerage amount from them.

2.14.MANAGEMENT:

MISSION AND VISSION

CDEqui search is passionate about providing friendly customer services on the greens of the investing world. Following the highest standards of ethics is entrenched in the DNA of CD Equi search. At CD Equi search, the selection and recommendations of wealth creating opportunities are primarily based on the 3C principle. Conservation of capital Consistent growth in value of investment over a period of time. Continual cash inflow through handsome dividends.

KEY PRODUCT OFFERINGS ARE AS FOLLOWS:

Equities Commodities Currency derivatives Online broking Depository participant Structured products Distribution of mutual funds

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 Life insurance Alternate investment Distribution of IPO / FPO Bonds

MANAGEMENT TEAM
Mr. Chandravadan Desai - Chairman Mr. Pranay Desai - Director Mr. VikashKalani- COO (Chief operating officer) Mr. JayeshVora - CFO ( Chief financial officer) Mr. Nilesh Vasa Mr. Hussain Sheriff Mr. Mahimai Raj Mr. Thulasi Raman Mr. Krishna Kumar - Director ( Group companies) - Assistant Vice President - Cluster Manager - Branch Manager

Mr. Loganathan - Team Manager - Relationship manager

2.15.COMPETITORS
ABN AMRO Mutual Fund , BIRLA SUN LIFE Mutual Fund FRANKLIN TEMPLETON Mutual Fund HDFC Mutual Fund HSBC Mutual Fund KOTAK MAHINDRA Mutual Fund LIC mutual fund Morgan Stanley Mutual Fund Principal Mutual Fund Prudential ICICI Mutual Fund Sahara Mutual Fund SBI Mutual Fund Standard Tableered Mutual Fund Sundaram Mutual Fund Tata Mutual Fund

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3. PROBLEM STATEMENT AND OBJECTIVE OF THE STUDY:-

3.1 PROBLEM STATEMENT:-

Due to the falling Rate of Interest on Bank deposits, it is obvious that Investment in Mutual Fund will grow in year to come. However lack of Awareness of Mutual Fund is a hindering factor in expected growth of Mutual Fund Business. Under noted problems are envisaged in this area:

Difficult in convincing people for investment.

Difficult to change mind of the investor according to age and Profession.

Difficult to make an approach to investors.

Difficult to take an appointment with professional people.

Difficult to get the documents required for formalities from investors

Difficult to overcome an impassionate person who wants return in less time.

Difficult to follow up the people whose names are being stored in a data.

Difficult to remove the fear of risk from the minds of investors.

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3.2 OBJECTIVES OF STUDY:

In view of the problem cited above, the study aims at analyzing the following major issues:

To know the awareness of MUTUAL FUND among people.

To know the different Asset management companies involve in MUTUAL FUND.

To know the different aspects of MUTUAL FUND according to different age, profession etc.

To see the interest of people in investing in MUTUAL FUNDS.

To know the different attitudes of people regarding risk, rate of return, period of investment etc.

To study the diversification of mutual fund.

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4. RESERCH METHODOLOGY:
4.1 METHODOLOGY OF STUDY:-

Research can be defined as systemized effort to gain new knowledge. A research is carried out by different methodologies which have their own pros and cons. Research methodology is a way to solve research in studying and solving research problem along with logic behind them are defined through research methodology. Thus while talking about research methodology we are not only talking of research methods but also considered the logic behind the methods. We are in context of our research studies and explain why it is being used a particular method or technique and why the others are not used. So that research result is capable of being evaluated either by researcher himself or by others

4.2 Research Methodology:-

Research has its special significance in solving various operational and planning problem of business and industry. Research methodology is the way to systematically solve the research problem.

4.3 ASSUMPTIONS:-

1. It has been assumed that sample of 100 respondents represents the whole population. 2. The information given by the customer is unbiased

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4.4 Literature Survey:-

The project is based on pure findings of facts.

Development of Working Hypothesis:-The Hypothesis could be developed by discussing with the concerning department heads and guides about this exploratory research and reached to the conclusion that the data is to be collected by personal interaction with the customers, asking them about the services and the improvement required. First of all they are aware of mutual funds or not and then analyzing the findings to reach to the objectives of research.

Collection of Data:-There was secondary data available for the study and also primary data collected by carrying out by the survey which has been carried out to through personal interviews of the customers. The sample size was roughly 100.

Sampling methods: - A sample is the representative of the population which will predict the behavior of the whole universe. a. The sampling size put under two categories: Probability sampling and non probability sampling.

Probability sampling:This is the process of selecting the elements or group of elements from as well defined population by such procedure which gives every element in the population an equal chance of being selected for observation. The sampling method use for this survey is the area sampling which is a sub type of probability sampling.

4.5 Sampling size:-

Large sample gives reliable result than small sample. However, it is not feasible to target entire population or even a substantial portion to achieve a reliable result. So, in

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this aspect selecting the sample to study is known as sample size. Hence, for my project my sample size was 100.

The Sample Size of 100 is not enough to draw a conclusion but as per the time assigned it was difficult to take a sample size more than 100.

The Sample Size consist of both the Professional and Business class people. IT peoples, Doctors, Jewelers, Timber Merchants & Real estate Agents are taken as Sample .

4.6 Execution of the project:-

It is the very important step in the research process accuracy findings depends on how systematically the study has been carried out in time so that it can make some sense when required. I have executed the project after prior discussion with the guide and structured in following steps:

a. Preparation of questionnaire.

b. Collection of list of some of the clients interview of the customer so that more interaction is impossible and the variety of responses can be registered to have a good data for analysis.

c. Visiting the corporate and asking about their feedback on the mutual funds services they are availing. Try to find out their satisfaction level with the existing mutual fund.

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5. LIMITATIONS:
Every work has its own limitation. Limitations are extent to which the process should not exceed. Limitations of this project are:-

1. Duration of Project was not enough to make a conclusion on such a vast subject time Constraint has become a big limitation.

2. The Sample Size being taken for drawing a conclusion was too small to get an accurate result.

3. Changing the Mentality of people for investing in a particular Financial Product is a very difficult task.

All the above mentioned statements are the limitations of the project ,Time, Sample Size & Mentality of investor are the main limitations of the project. The study is being done by taking and keeping all the limitations in mind. The project is completed in prescribed time. To find the Awareness of Mutual Fund the Sample Size is not at all enough because the population size is much bigger than the sample size and the last limitation was to change the mentality of the investor to invest in a particular type of the Investment Product. As the Indian Market have a large number of potential customer to draw a conclusion in such a small size may not be reliable.

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6. ANALYSIS OF MUTUAL FUNDS:The schemes have been divided into 10 different categories for the purpose of meaningful comparison. The categories are as follows:

1. Equity diversified Funds.

2. Equity ELSS Funds.

3. Equity sector Funds.

4. Balanced Funds.

5. Income Funds.

6. Liquid Funds.

7 .Gilt Funds.

8. MIPS (Monthly income plans)

9. Index Funds.

10. Hybrid Funds.

There are many asset management companies being involved in mutual fund but people invest thing reputed mutual fund like ICICI PRUDENTIAL, FRANKLIN TEMPLETON, HSBC, KOTAK, HDFC, CD EQUISEARCH etc. All the companies have different mutual fund schemes vary from different needs of a customer.

34

6.2 COMPARISAN BETWEEN BANKS AND MUTUAL FUNDS IN DIFFERENT ASPECTS:Table 3 MUTUAL BANKS Returns Administrative exp. Risk Investment option Network Liquidity Quality of asset Interest calculation Guarantee Less High Penetration At a cost Not Transparent Min. Balance between 10th and 31st of month. Max. Rs. 1Lakh on Deposit Everyday None More Low but improving Better Transparent High Low Low Moderate Low FUNDS Better

In the above table the Comparison is made between Banks and Mutual Fund with different aspects. Now a day due to low Rate of interest people prefer to invest in those products which give more Returns in less time without Risk. Now a days also nearly 40% of people keep there money in Banks because they are less Risky . The Returns expected in Mutual Funds are high where as in bank it is low but the Guarantee of money back is more than Mutual fund. Thus both Bank and Mutual Fund are good enough in themselves. It is depend on the Investor what type of investment they want to do.

35

7. DATA COLLECTION:
Proceeding further after determines the Methodology and limitation of the study the next step is to analyze the Data being collected for the study. Data is being collected from various sources like: Questionnaire Personal visit Telephonic Information etc.

7.1 QUESTIONAIRE:-

Questionnaire is a written form being given to the prospective investor to give feedback about the services provided to them and also to find the satisfaction level of the investor for a particular investment product .Questionnaire is an easy and simple way of collecting a data .After filling up of form the next step is to evaluate the form in different dimensions and draw a conclusion. It is difficult to get a Questionnaire filled by corporate because of time they dont have time to fill the Questionnaire so at the time of meeting them personally or after that the Questionnaire is filled by us. The Sample size taken for this study is 100 which is not enough to draw a conclusion but due to time limitation only this much size has been taken into consideration. After analyzing the Questionnaire the following evaluation has been done:-

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Table 4 CATEGORY OF INVESTORS TOTAL INCOME RISK RETURN

IT PEOPLE DOCTORS TIMBER MERCHANTS JEWELLERS REAL ESTATE AGENTS

HIGH HIGH HIGH HIGH HIGH

LOW LOW HIGH HIGH HIGH

HIGH HIGH HIGH HIGH HIGH

After analyzing the above table the conclusion was made that the business people are more Risk taker while professional people are less Risk taker where the return expected in both the case are high.

7.2 PERSONAL VISIT:-

The second way of collecting data is Personal Visits to the corporate personally by fixing an appointment. Personal Visit gives a clear picture of the conclusion drawn in Questionnaire It gives a clear view of the client Awareness about the product .Some of the difficulties in making Personal Visits are: To take a time or appointment from the corporate. To convenes investor to invest in a particular product.

Personal Visit gives a clear picture about the Investment areas of both the categories they are:-

37

Table 5 PROFESSIONAL PEOPLE PPF KISAN VIKAS PATR BANK ACCOUNT INSURANCE FURTHER STUDIES etc. BUSINESS PEOPLE LAND GOLD STOCKS INSURANCE VEHICLES etc.

From the above table it is clear that the Professional people invest in the Value Added items where as Business people they invest in Future Prospect assets like land, gold etc.

7.3 TELEPHONIC INFORMATION:-

The further source of collecting data is telephonic information with the existing customer and the prospective investors. It is very difficult to reveal the data of investors from the company itself because it has been kept as a secret document. After getting a data some problems too come in the way. Some are: People are not ready to listen. People ask question like from where did you get the number? From this source not much of the Information is drawn. Few respondents where not happy with the level of customer services rendered by CD EQUISEARCH MUTUAL FUND LTD. Particularly about the delays in replying or not replying the queries raised by them.

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8. INTERPRETATION AND ANALYSIS OF DATA:From the data collected through the questioner, observation made during the personal visits the data revealed following information:-

Table 8.1

PERCENTAGE OF INVESTMENT TO TOTAL INCOME INCOME Over 50% 30%-50% 10%-30% NO. of PEOPLE 1 5 56 PERCENTAGE 1% 5% 56% 38%

10% & below 38

Source : primary data

In the below chat it has been observed that people invest mostly between 10% to 30% of their income as the moderate level of income is in the range of rupees 30,000 to 40,000. There are very few people who invest above 50% of their Income as their income level is too high say above Rs. 10,000,00. Investors are having different responsibilities toward the society and family due to which they are not able to invest more money in Financial product .There are many people who invest only 10% of there income according to total Sample Size.

39

Chart 8.1

PERCENTAGE OF INVESTMENT TO TOTAL INCOME

Percentage in Income People Investment

1% 38%

5%

56%

Over 50%

30-50%

10-30%

Below 10%

40

TABLE:-8.2

INVESTMENT IN FINANCIAL PRODUCTS

FINANCIAL INSTRUMENTS BANK INSURANCE STOCK MARKET BONDS & DEBENTURE PPF NSC POST OFFICE SAVING SCHEMES REALESTATE GOLD CHIT FUND

% OF INVESTMENT 40% 10% 15% 3% 7% 5% 8% 2% 5% 5%

Source : primary data

These are many Financial Instrument in Indian Market. People in early days kept their money in Bank. They think Bank is the only place where the money is safe till today also 40% of people feel the same but many of them have started investing in other Financial Products like Insurance, Stock Markets etc. The Post Office savings are less preferred by the Investors due to the less Returns in more Time. Businessmen mostly invest in tangible assets like land, building, gold etc.

In this Table it is clear that people mainly invest and keep their money in banks .Stock market came into existence only from early 90s thats why the percentage investment in stocks is low as compared to banks. People generally invest in risk free financial product like PPF, NSC etc. as they get tax exemption. Investment in Insurance is also preferred by people because it is not a risky instrument.

41

Chart 8.2

INVESTMENT IN FINANCIAL PRODUCTS

BANK INSURANCE STOCK MARKET BONDS & DEBENTURE 40% PPF NSC POST OFFICE SAVING SCHEMES REALESTATE GOLD CHIT FUND

5% 5% 2% 8% 5% 7% 3% 15% 10%

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TABLE:-8.3

AWARENESS OF MUTUAL FUND OUT OF 100 PEOPLE:Awareness of mutual fund Yes No People 7% 93 %

Source : primary data

In Table the awareness of mutual fund is determined in the percentage terms only 7% of the total population are not aware of MUTUAL FUNDS. As Mutual Funds of India are growing rapidly the awareness of Mutual Funds is increasing among the Investors although & every Investor knows about Mutual Funds by its nomenclature. They are not really aware of the concept.

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Chart 8.3

AWARENESS OF MUTUAL FUND OUT OF 100 PEOPLE:-

Awareness of Mutual Funds

7%

Yes No

93%

44

TABLE :- 8.4

PERCEPTION ABOUT MUTUAL FUND

Safe Risky Other

10% 28% 62%

Source : primary data

From the below pie Table it is clear that people perceive mutual fund as an risky product whereas 62% of investors believe that mutual fund gives high returns. Only 10 % of people feel that it is safe. Out of 100 sample size it is very difficult to determine the exact perception of investors. Due to continuous increase in mutual fund industries the perception of people are changing slowly.

45

Chart 8.4

PERCEPTION ABOUT MUTUAL FUND

Perception of Investors

10%

Safe
28% 62%

Risk y Others

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TABLE : 8.5

AWARENESS OF DIFFERENT MUTUAL FUND SCHEMES

Schemes
growth schemes Income schemes Balance scheme Money market and liquid schemes Tax saving schemes Guilt funds

No. of respondents
10 20 25 17 18 10

Source : primary data

in the below Table there are moderate preferences to all the schemes. The respondents first to know about the schemes well then only they ensure to get reasonable returns to his investment. Mostly the balanced scheme was much focused to more no. of investors, other than all equally known by the respondents

47

Chart 8.5

AWARENESS OF DIFFERENT MUTUAL FUND SCHEMES

AWARNESS OF DIFFERENT TYPES OF MUTUAL FUND

25 20

no. of persons

15 10 5 0 Growth Income Balance Money Tax schemes schemes schemes market saving and schemes Liquid Schemes Guilt funds

schemes

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TABLE :-8.6

COMPARITIVE STUDY OF RISK , INVESTMENT AND RETURN. AGE GROUP 25-35 35-45 45-60 60& ABOVE RISK 60% 25% 10% 5% RETURN 35% 15% 20% 30% INVESTMENT 45% 15% 10% 30%

Source : primary data

In Table below it is determined that people of the age group 25-30 yrs are more risk takers as compared to other age groups. However they are able to invest less because they do not have any responsibility toward the society and family. They also invest less because they dont get proper guidance. As the age increases the saving percentage decrease but the people above 55 are keener to invest because they become free from all the responsibilities of the family and society. At this stage they need continuous flow of income.Middle age people of the age group of 35-45 yrs. are not investing much because they are bound to many responsibilities towards family and society.

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Chart 8.6

COMPARITIVE STUDY OF RISK , INVESTMENT AND RETURN.

Risk Return and Investment Chart according to different age group

60% 50% 40% 30% 20% 10% 0% 25-35 45-60 RISK RETURN INVESTMENT

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TABLE:- 8.7

IDENTIFICATION OF MUTUAL FUND COMPANIES

ASPECTS Brand Name Good Services High Yield Advertisement Any other reason

PERCENTAGE 39 24 15 10 12

Source : primary data

From the below Table it is clear that Brand Name plays an important role for attracting investors. Secondly, good services are also expected by an investor from the companies. In other reasons investors generally pointed out the identification of the companies known by their friends or relatives.

Advertisements and high yield are the secondary aspects of identifying the mutual fund industries.

51

Chart 8.7

IDENTIFICATION OF MUTUAL FUND COMPANIES

40 35 30 25 Percentage 20 15 10 5 0 Brand Name Good Services High Yeild Advertisement Any other reason Aspects Series1

52

TABLE :- 8.8

RISK TAKEN BY DIFFERENT AGE GROUP :-

AGE

RISK

TAKEN

IN

GROUP PERCENTAGE 25-35 35-45 45-60 60 above & 3 60 20 17

Source : primary data

In Table below the risk taking ability are being depicted. The person of younger age are willing to take more risk as compared to the elder age group people. The middle age people do not take much risk because of much responsibility toward family and society With reference to this Table only 17% of income of middle age people is being invested in risk prone securities.

53

Chart 8.8

RISK TAKEN BY DIFFERENT AGE GROUP :-

RISK TAKEN IN PERCENTAGE

3% 17% 25-35 35-45 45-60 20% 60% 60 & above

54

TABLE :- 8.9

PERCENTAGE OF TOTAL INCOME INVESTED IN MUTUAL FUND:-

INVESTORS CATEGORY IT SECTOR

% OF TOTAL INCOME INVEST IN MUTUAL FUNDS

PEOPLE DOCTORS TIMBER MERCHANTS JEWELLERS REALESTATE AGENTS

50% 30%

7% 3%

10%

Source : primary data

In the Pie Table below it is clear that professional people are more indented to invest in comparison with business people who are high risk takers. Business people are more in dined to invest in real estate, land etc. This is because business people want money in less time as and when required while Professional people believe in continuous flow of money.

55

Chart 8.9

PERCENTAGE OF TOTAL INCOME INVESTED IN MUTUAL FUND:-

PERCENTAGE OF TOTAL INCOME INVEST IN MUTUAL FUND

10% 3% 7% 50%

IT SECTOR PEOPLE DOCTORS TIMBER MERCHANTS JEWELLERS

30% REALESTATE AGENTS

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TABLE 8.10

AWARENESS OF CD EQUISEARCH MUTUAL FUND LTD OUT OF 100 PEOPLE

Awarness Of Mutual Fund Yes No

percentage 55% 45%

Source : primary data

55% says that they are aware of CD EQUISEARCH Mutual Fund Ltd 45% says that they are not aware of CD EQUISEARCH Mutual Fund Ltd

57

Chart 8.10

AWARENESS OF CD EQUISEARCH MUTUAL FUND LTD OUT OF 100 PEOPLE

yes no

58

TABLE 8.11

COMPARISON ON THE BASIS OF PLACE:-

Comparison on the place

Cities rural

People
70 30

Source : primary data

In Table, it is clear that the people staying in small town are less aware of MUTUAL FUNDS as compared to big cities. The approximate population of cities is 7 times more than rural . Investors of rural place are less aware of the Mutual Fund & they feel it as a risky Financial Product where as the investors of cities are fully Aware of the concept of the Mutual Fund and evince interest in investing in new IPOs etc.

59

Chart 8.11

COMPARISON ON THE BASIS OF PLACE:-

Awareness in Mutual Fund out of 100 people

80 No of People 60 Series 40 20 0 cities Place rural 30 70

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9. PROJECT FINDINGS AND RECOMMENDATIONS:-

9.1 PROJECT FINDINGS: There is a great potential for investment in Mutual Fund 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.

People of young age group are ready to take risk and they can be targeted for investment in Mutual Fund. Some of the people who were personally contacted showed reservation about dealing with CD EQUISEARCH MUTUAL FUND LTD.

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9.2 RECOMMENDATION:-

It is seen that CD EQUISEARCH brand is not seen enough in the market place and hence the brand is invisible to the naked eyes of the consumer and hence CD EQUISEARCH should beef up its publicity campaigns and promotional activities so that CD EQUISEARCH becomes an easily recognizable brand. For creating a brand image in our country CD EQUISEARCH should go for a brand ambassador. In CD EQUISEARCH, they should provide training to its employees in the field of Insurance, Stock broking, Mutual fund etc. CD EQUISEARCH should conduct more surveys in order to interact with customer to know their preferences for improving its services.
Small towns may be targeted for business development as this area is untapped relatively and there exist huge potential for business development

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CONCLUSION
The study will guide the new investor who wants to invest in mutual fund schemes by providing knowledge about how mutual fund . The study recommends new investors to go for mutual funds rather than equities, because of high risk and market instability. There is a great need to disclose the risk involved in the schemes properly to the investor by the investment companies. The high returns (above 20 per cent) are definitely not sustainable over a long term, as they have been generated during the biggest Bull Run in recent mutual fund industry. Investments in both mutual fund schemes are subjected to market risk. Now a days investments in equity and mutual fund schemes are increases because of falling interest rates and awareness of mutual fund schemes in the minds of investors. In case of both equities and mutual funds(open ended) liquidity is very high, with in three working days mutual funds will converted into cash and liquidity of equity is based on demand and supply conditions of the market for a particular scrip.

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10. REFERENCES:1. www.njindiainvest.com

2. http://mutualfunds.about.com

3. www.shcil.com

4. MutualFunds-ICMR book of readings

5. Fact Sheet of various Mutual Funds.

6. ICMR Text Book 7. Dalal Street Journals Stock Market Book 8. AMFI BOOK

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ANNEXURE

11. QUESTIONAIRE:-

1. DO YOU INVEST? YES NO

2. WHAT PERCENTAGE OF INCOME DO YOU INVEST? OVER 50% 30% TO 50% 10% TO 30% Below 10%

3. WHAT ARE THE VARIOUS INVESTMENT SCHEMES IN WHICH YOU INVEST? Bank Insurance Stock Market Bonds and Debenture PPF (Public provident Funds) NSC (National saving certificate) Post office saving schemes Real Estate Gold Chit Funds

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4. WHAT ARE THE BREAK UP IN PERCENTAGE TERMS TO YOUR INVESTMENT?

TYPE OF INVESTMENT BANK INSURANCE STOCK MARKET BONDS & DEBENTURE PPF NSC POST OFFICE SAVING

PERCENTAGE

SCHEMES REAL ESTATE GOLD CHIT FUNDS

5. ARE YOU AWARE OF MUTUAL FUNDS? Yes No

6. WHAT IS YOUR PERCEPTION ABOUT MUTUAL FUNDS? Safe Risky Others

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7. WHAT ARE DIFFERENT TYPES OF MUTUAL FUNDS ARE YOU AWARE OF? Growth schemes.(provide appreciation of capital over medium to long term) Income schemes.(provide regular and continuous income to investor) Balance schemes.(provide both growth and income) Money market and Liquid Schemes.(provide easy liquidy preservation of capital and moderate income). Tax saving schemes.(offer tax rebates under tax laws) Guilt funds(generating returns by investing in securities created and issued by a central govt. or state govt.)

8. WHICH OF THEM DO YOU PREFER? Growth schemes Income schemes Balance schemes Money Market and Liquid schemes Tax saving schemes Guilt Funds

9. comparative study on risk, return and investment according to different age group

25-35 35-45 45-60 60 & above

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10. HOW DO YOU LOOK MUTUAL FUND COMPANYS? Brand Name Good Service High Yield Advertisement Any Other Reason...........................................

11. ARE YOU AWARE OF CD EQUISEARCH MUTUAL FUND LTD? YES NO

12. WOULD YOU CONSIDER AVAILING THE FINANCIAL CONSULTANCY OFFERED BY CD EQUISEARCH MUTUAL FUND LTD? YES NO

13. .PLACE THEY BELONG TO Cities rural

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NAME:. PLACE:. AGE: GENDER:.. (

SIGNATURE )

69