ORGANISATION OF A MUTUAL FUND There are many entities involved and the diagram below ill strates the

organisational set ! o" a m t al " nd#

Organisation of a Mutal Fund

AD$ANTAG%S OF MUTUAL FUNDS The advantages o" investing in a M t al F nd are# & 'ro"essional Management & Diversi"i(ation & )onvenient Administration & Ret rn 'otential & Low )osts & Li* idity & Trans!aren(y & Fle+ibility & )hoi(e o" s(hemes & Ta+ bene"its & ,ell reg lated

T-'%S OF MUTUAL FUND S).%M%S ,ide variety o" M t al F nd S(hemes e+ist to (ater to the needs s (h as "inan(ial !osition/ ris0 toleran(e and ret rn e+!e(tations et(1 The table below gives an overview into the e+isting ty!es o" s(hemes in the Ind stry1

FR%2U%NTL- US%D T%RMS Net Asset Value (NAV) Net Asset $al e is the mar0et val e o" the assets o" the s(heme min s its liabilities1 The !er nit NA$ is the net asset val e o" the s(heme divided by the n mber o" nits o tstanding on the $al ation Date1 Sale 'ri(e Is the !ri(e yo !ay when yo invest in a s(heme1 Also (alled O""er 'ri(e1 It may in(l de a sales load1 Re! r(hase 'ri(e Is the !ri(e at whi(h a (lose3ended s(heme re! r(hases its nits and it may in(l de a ba(03end load1 This is also (alled 4id 'ri(e1 Redem!tion 'ri(e Is the !ri(e at whi(h o!en3ended s(hemes re! r(hase their nits and (lose3ended s(hemes redeem their nits on mat rity1 S (h !ri(es are NA$ related1 Sales Load Is a (harge (olle(ted by a s(heme when it sells the nits1 Also (alled/ 5Front3end6 load1 S(hemes that do not (harge a load are (alled 5No Load6 s(hemes1 Re! r(hase or 54a(03end6Load Is a (harge (olle(ted by a s(heme when it b ys ba(0 the nits "rom the nitholders1

.istory o" the Indian M t al F nd Ind stry

The m t al " nd ind stry in India started in 789: with the "ormation o" Unit Tr st o" India/ at the initiative o" the Government o" India and Reserve 4an0 the1 The history o" m t al " nds in India (an be broadly divided into "o r distin(t !hases First 'hase ; 789<3=> Unit Tr st o" India ?UTI@ was established on 789: by an A(t o" 'arliament1 It was set ! by the Reserve 4an0 o" India and " n(tioned nder the Reg latory and administrative (ontrol o" the Reserve 4an0 o" India1 In 78>= UTI was de3 lin0ed "rom the R4I and the Ind strial Develo!ment 4an0 o" India ?ID4I@ too0 over the reg latory and administrative (ontrol in !la(e o" R4I1 The "irst s(heme la n(hed by UTI was Unit S(heme 789<1 At the end o" 78== UTI had Rs19/>AA (rores o" assets nder management1 Se(ond 'hase ; 78=>3788: ?%ntry o" ' bli( Se(tor F nds@ 78=> mar0ed the entry o" non3 UTI/ ! bli( se(tor m t al " nds set ! by ! bli( se(tor ban0s and Li"e Ins ran(e )or!oration o" India ?LI)@ and General Ins ran(e )or!oration o" India ?GI)@1 S4I M t al F nd was the "irst non3 UTI M t al F nd established in B ne 78=> "ollowed by )anban0 M t al F nd ?De( =>@/ ' nCab National 4an0 M t al F nd ?A g =8@/ Indian 4an0 M t al F nd ?Nov =8@/ 4an0 o" India ?B n 8A@/ 4an0 o" 4aroda M t al F nd ?O(t 8D@1 LI) established its m t al " nd in B ne 78=8 while GI) had set ! its m t al " nd in De(ember 788A1 At the end o" 788:/ the m t al " nd ind stry had assets nder management o" Rs1<>/AA< (rores1 Third 'hase ; 788:3DAA: ?%ntry o" 'rivate Se(tor F nds@ ,ith the entry o" !rivate se(tor " nds in 788:/ a new era started in the Indian m t al " nd ind stry/ giving the Indian investors a wider (hoi(e o" " nd "amilies1 Also/ 788: was the year in whi(h the "irst M t al F nd Reg lations (ame into being/ nder whi(h all m t al " nds/ e+(e!t UTI were to be registered and governed1 The erstwhile Eothari 'ioneer ?now merged with Fran0lin Tem!leton@ was the "irst !rivate se(tor m t al " nd registered in B ly 788:1 The 788: S%4I ?M t al F nd@ Reg lations were s bstit ted by a more (om!rehensive and revised M t al F nd Reg lations in 78891 The ind stry now " n(tions nder the S%4I ?M t al F nd@ Reg lations 78891 The n mber o" m t al " nd ho ses went on in(reasing/ with many "oreign m t al " nds setting ! " nds in India and also the ind stry has witnessed several mergers and a(* isitions1 As at the end o" Ban ary DAA:/ there were :: m t al " nds with total assets o" Rs1 7/D7/=AF (rores1 The Unit Tr st o" India with Rs1<</F<7 (rores o" assets nder management was way ahead o" other m t al " nds1 Fo rth 'hase ; sin(e Febr ary DAA: In Febr ary DAA:/ "ollowing the re!eal o" the Unit Tr st o" India A(t 789: UTI was bi" r(ated into two se!arate entities1 One is the S!e(i"ied Underta0ing o" the Unit Tr st o" India with assets nder management o" Rs1D8/=:F (rores as at the end o" Ban ary DAA:/ re!resenting broadly/ the assets o" US 9< s(heme/ ass red ret rn and (ertain other s(hemes1 The S!e(i"ied Underta0ing o" Unit Tr st o" India/ " n(tioning nder an administrator and nder the r les "ramed by Government o" India and does not (ome nder the ! rview o" the M t al F nd Reg lations1 The se(ond is the UTI M t al F nd Ltd/ s!onsored by S4I/ 'N4/ 4O4 and LI)1 It is registered with S%4I and " n(tions nder the M t al F nd Reg lations1 ,ith the bi" r(ation o" the erstwhile UTI whi(h had in Mar(h DAAA more than Rs1>9/AAA (rores o" assets nder management and with the setting ! o" a UTI M t al F nd/ (on"orming to the S%4I M t al F nd Reg lations/ and with re(ent mergers ta0ing !la(e among di""erent !rivate se(tor " nds/ the m t al " nd ind stry has entered its ( rrent !hase o" (onsolidation and growth1 As at the end o" Se!tember/ DAA</ there were D8 " nds/ whi(h manage assets o" Rs17F:7A= (rores nder <D7 s(hemes1 The gra!h indi(ates the growth o" assets over the years1 GRO,T. IN ASS%TS UND%R MANAG%M%NT

Note# %rstwhile UTI was bi" r(ated into UTI M t al F nd and the S!e(i"ied Underta0ing o" the Unit Tr st o" India e""e(tive "rom Febr ary DAA:1 The Assets nder management o" the S!e(i"ied Underta0ing o" the Unit Tr st o" India has there"ore been e+(l ded "rom the total assets o" the ind stry as a whole "rom Febr ary DAA: onwards1

Mutual funds witness Rs18,500-cr di in A!M in August

Mumbai: Continued volatility in Indian stock markets over the US subprime mortgage crisis all through August has led to a fall in assets of mutual funds in the country by over Rs1 !"## crore during the month$ %he total Assets under Management &AUM' of () fund houses have decreased to Rs*!+,!+)( crore from Rs *! +!1)- crore in .uly! latest data from Association of Mutual /unds in India sho0ed$ Reliance M/ remains the country1s largest fund house 0ith its AUM increasing to Rs+,!"- crore in August as against Rs ++!*)# crore in .uly$ ICICI 2rudential M/ is at the second rank 0ith AUM of Rs"#!+1) crore in August! increasing from Rs* !+ - crore in .uly$ 3o0ever! state4run U%I M/ 0itnessed a dip in its AUM to Rs *1!+-- crore in August from Rs *)!"," crore previous month$ 5ther fund houses in the top league are 36/C M/ and /ranklin %empleton M/ 0ith AUM of Rs*#! ,1 crore and Rs )-!--) crore respectively$ %he 7S8 benchmark inde9 Sense9 had 0itnessed a sharp volatility during the past month on concerns related to the US subprime mortgage crisis$ %he inde9 had dipped belo0 the 1*!### mark in the month! but managed to bounce back to 1"!### level in the last t0o days of the month$

Analysts! believe the decline in the assets of fund house may be due to the redemptions by investors on concerns of a market meltdo0n and utilisation of cash pile of mutual funds for making purchases in the bearish markets$ 5verall! mutual funds have made net purchases 0orth Rs*!#-($-# crore in August in e:uity markets$ In sharp contrast! foreign institutional investors have been on a selling spree in the domestic markets after the global meltdo0n$ %hey made net sales 0orth aroud Rs,!,,# crore in August

Mutual fund assets cross $100b mark

4 Jun 2007, 0311 hrs IST , TNN
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MUM4AI# The Indian e(onomy (rossed several milestones in May1 D ring the month/ in * i(0 s ((ession/ the (o ntryGs GD' and 4S%Gs mar0et (a!italisation (rossed the H7 trillion mar01 Now/ the (o ntryGs m t al " nd ind stry (rossed the H7AA billion milestone1 On Sat rday/ assets nder management ?AUM@ by D8 " nd ho ses/ released by Asso(iation o" M t al F nds in India ?AMFI@/ was !egged at Rs <1A> la0h (rore1 At the ( rrent r !ee3dollar e+(hange rate o" <A1FD/ this translates into a little over H7AA billion1 This milestone was rea(hed on the ba(0 o" a 79I rise in ind stry AUM in May over the !revio s month and a <=I C m! over the May DAA9 "ig res1 To! ind stry o""i(ials said a n mber o" "a(tors led to this high growth o" AUM last month1 For one/ as (all rates "ell below 7I level d ring the last "ew days o" May/ s bstantial amo nt o" " nds had "lown into li* id " nds rather than being invested in the overnight (all money mar0et1 This in t rn gave a boost to the ind stry AUM1 Se(ondly/ in May a large n mber o" " nds had la n(hed "i+ed mat rity !lans ?FM's@ whi(h too hel!ed in boosting the ind stry AUM1 For e+am!le/ Lot s India MF had a n mber o" FM's last month and its total assets rose nearly ><I to Rs :/9D: (rore now1 Other than these/ a steady sto(0 mar0et and the " nd ho sesG strategy to a(* ire investors "or the long3term also !aid o""1 JThe high growth o" AUM vindi(ates o r year3old strategy o" aggressively a(* iring ( stomers1 In May/ we got abo t >A/AAA new a((o nts/J said $i0rant G gnani/ !resident K )%O/ Relian(e M t al F nd1 At the " nd ho se level/ Relian(e MF maintained its !osition at the to! o" the AUM leag e table with Rs F8/7<: (rore nder management1 In May/ Relian(e MFGs AUM grew by a who!!ing 7A/:7F (rore ?D7I@1 I)I)I 'r dential MF and UTI MF too retained their !la(es in the AUM !e(0ing order1 ,ith an AUM o" Rs FA/>A: (rore 'r 3I MF was at the se(ond !osition and with Rs <A/A>A (rore/ UTI MF was at the third !osition1 In the (ase o" UTI MF/ other than in"lows in its li* id " nds and FM's/ its G"o( s " nd o""erG/ a bas0et o""ering o" some o" its e+isting high3!er"orming e* ity s(hemes thro gh distrib tors bro ght in good money/ Baidee! 4hatta(harya/ (hie" mar0eting o""i(er/ UTI MF said1 JO r e* ity (or! s also witnessed good in"lows thro gh the SI' ?systemati( investment !lan@ ro te/J 4hatta(harya said1 Among others/ in May S ndaram 4N' 'aribas MF (rossed the Rs 7A/AAA (rore AUM mar0 "or the "irst time/ to Rs 7A/7<F (rore/ growing "rom abo t Rs F/:AA (rore a year ago

India's top 5 mutual fund houses

.anuary #)! )## 1 :)* IS%

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State-run UTI Mutual fund has toppled private se tor I!I!I ;"et #uote< $rudential to %e the ountr&'s se ond %i((est fund house, )hile *nil *+%ani "roup's ,elian e ;"et #uote< M- has retained its top position. * ordin( to latest data availa%le )ith *sso iation of Mutual -unds in India, total asset under +ana(e+ent /*UM0 )ith 31 +utual funds stood at ,s 1,12,123 rore /,s 1,121.23 %illion0 at the end of 3e e+%er, 2007. There are 32 fund houses in the ountr& %ut 3e e+%er data for 4irla Sun 5ife Mutual fund )as not availa%le. * +onth a(o, the total *UM of the +utual fund industr& stood at ,s 1,37,212 rore /,s 1,372.12 %illion0.

Top 5 MF houses 1 ,elian e M2 UTI M-

3 I!I!I $rudential 4 73-! ;"et #uote< M1 -ran;lin Te+pleton

The ountr&'s top five fund houses -- ,elian e M-, UTI M-, I!I!I $rudential, 73-! M- and -ran;lin Te+pleton re orded an in rease in their assets under +ana(e+ent. ,elian e M-'s *UM rose to ,s 20,720 rore /,s 207.20 %illion0 fro+ ,s 77,7@1 rore /,s 777.@1 %illion0 a +onth a(o, )hile that of UTI and I!I!I $ru rose fro+ ,s 12,120 rore /,s 121.20 %illion0 to ,s 1@,214 rore /,s 1@2.14 %illion0 and fro+ ,s 14,A04 rore /,s 14A.04 %illion0 to ,s 1@,772 rore /,s 1@7.72 %illion0, respe tivel&. These fi(ures e8 lude *UMs for -und of -unds. 73-! M-'s *UM rose fro+ ,s 4@,712 rore /,s 4@7.12 %illion0 to ,s 42,1@1 rore /,s 421.@1 %illion0, )hile that of -ran;lin Te+pleton sur(ed fro+ ,s 30,773 rore /,s 307.73 %illion0 to ,s 31,171 rore /,s 311.71 %illion0. 4:4, 3S$ Merrill 5&n h, =s orts, -idelit&, JM -inan ial ;"et #uote<, J$ Mor(an, 5I! ;"et #uote<, 5otus India, Mor(an Stanle&, #uantu+, Sahara, S4I ;"et #uote<, Sundara+ 4N$ $ari%as, Tata and Taurus +utual funds also sa) a rise in their *UMs. 7o)ever, assets under +ana(e+ents of *4N *+ro, *I" "lo%al Invest+ent "roup, 4en h+ar;, !anara ,o%e o, 34S !hola, 3euts he, 7S4!, IN", Bota; Mahindra, $rin ipal and Standard !hartered Mutual funds de lined durin( the +onth.

Future of Mutual Funds in India

4& 3e e+%er 2004, Indian +utual fund industr& rea hed ,s 1,10,137 rore. It is esti+ated that %& 2010 Mar h-end, the total assets of all s heduled o++er ial %an;s should %e ,s 40,A0,000 rore. The annual o+posite rate of (ro)th is e8pe ted 13.4C durin( the rest of the de ade. In the last 1 &ears )e have seen annual (ro)th rate of AC. * ordin( to the urrent (ro)th rate, %& &ear 2010, +utual fund assets )ill %e dou%le. 5et us dis uss )ith the follo)in( ta%leD

A""re"ate deposits of #cheduled $om %anks in India &'s($rore) MonthEFear 3eposits !han(e in C over last &r Source - RBI Mutual Fund A1M2s 3ro th MonthEFear M- *UM's
Mar*+, Mar*00 Mar*01 Mar*0- Mar*0. Mar*0/ Mar-05 Mar-0" Mar-0# $an-08

Mar*+, Mar*00 Mar*01 Mar*0@0141 0 2111A 3 11 A2A14 1 14 113112 2 13

Mar*0. 122021 3 12

Mar*0/ #ep*0/ 11@721 1 12

/*0ec 1@2217A 3

@2A24

A3717

23131 A4017 7130@ 134221 7<8D<8 D:A>AA :D<>8< F<=A9:

!han(e in C over last &r Source - AMFI

31C

-11C

13C

-20C

>=I

77I

F<I

<AI

9=I

#ome facts for the "ro th of mutual funds in India 210C (ro)th in the last 1 &ears. Nu+%er of forei(n *M!'s are in the <ue to enter the Indian +ar;ets li;e -idelit& Invest+ents, US %ased, )ith over USG1trillion assets under +ana(e+ent )orld)ide. :ur savin( rate is over 23C, hi(hest in the )orld. :nl& hanneliHin( these savin(s in +utual funds se tor is re<uired. Ie have appro8i+atel& 2A +utual funds )hi h is +u h less than US havin( +ore than 200. There is a %i( s ope for e8pansion. '4' and '!' lass ities are (ro)in( rapidl&. Toda& +ost of the +utual funds are on entratin( on the '*' lass ities. Soon the& )ill find s ope in the (ro)in( ities. Mutual fund an penetrate rurals li;e the Indian insuran e industr& )ith si+ple and li+ited produ ts. S=4I allo)in( the M-'s to laun h o++odit& +utual funds. =+phasis on %etter orporate (overnan e. Tr&in( to ur% the late tradin( pra ti es. Introdu tion of -inan ial $lanners )ho an provide need %ased advi e.

Assets Under Management (AUM) as at the end of Jan-2008 (Rs in Lakhs)

AUM Mutual Fund Name Ex lud!ng Fund "f Funds ")- *$#, )-*()-$)) "+1#--$ ("-(1("$,+ ,+$+) +(1($( (#1",($, 1(( ,#$, 1-1(+##$*) Fund "f Funds )"#+*$1# # 1 ,($)( # # # ,1(($ ( 1",*-#$( Average AUM For The Month Ex lud!ng Fund "f Funds 1## -$1) ((#*1+$#) +*(",*$)()#,+ -$) ,$"* ()##-($,, (,- )"$1+ 1(*(())$+ )#(, #*$#" Fund "f Funds )-#,#$)( # # 1- -$)* # # # ,"(+$"" 1", +1$(,

1$ A7= AMR5 Mutual /und )$ AI> >lobal Investment >roup Mutual /und ($ 7enchmark Mutual /und *$ 7irla Sun ?ife Mutual /und "$ 757 Mutual /und +$ Canara Robeco Mutual /und ,$ 67S Chola Mutual /und $ 6eutsche Mutual /und -$ 6S2 Merrill ?ynch Mutual /und

1#$ 8scorts Mutual /und 11$ /idelity Mutual /und 1)$ /ranklin %empleton Mutual /und 1($ 36/C Mutual /und 1*$ 3S7C Mutual /und 1"$ ICICI 2rudential Mutual /und 1+$ I=> Mutual /und 1,$ .M /inancial Mutual /und 1 $ .2Morgan Mutual /und 1-$ @otak Mahindra Mutual /und )#$ ?IC Mutual /und )1$ ?otus India Mutual /und ))$ Mirae Asset Mutual /und )($ Morgan Stanley Mutual /und )*$ 2RI=CI2A? Mutual /und )"$ Buantum Mutual /und )+$ Reliance Mutual /und ),$ Sahara Mutual /und ) $ S7I Mutual /und )-$ Standard Chartered Mutual /und (#$ Sundaram 7=2 2aribas Mutual /und (1$ %ata Mutual /und ()$ %aurus Mutual /und (($ U%I Mutual /und #rand Total

1," #$# -"#-1"$ )-+#*(($(( *(,+)+-$ " 1+(1"),$1* +*#*"#,$"" -"( ),$11 1(-)*,#$#)"1+,)$ )))-",1$,( 1(( ,(-$,+ 1##",#-$ =AA (+,#)($,1 1*)(* -$ "+ 1$+ ,,)1##($,( ))##* )," 1"*$#+ 1(11 1)$+* 1()-1 )$"+ 1 )"$-, =AA

# ()(#$,) )"#*($#1 # # ( 1*$,( #" +$1) # # (+-(,$#, # # # # # # # # ("#*$" )+ +,$+1 # # #

1,"(($(+ 1#*)"),$) (1+11+ $-1 *-"**()$+" 1,)1)**$* ",1#-11$(" -,,,"-$1, 1*()+,($,)+))#+$, )),(+ )$*1 1"#*(++$,) -#"-,)$* =AA *#"-( $"* 1**(1*#$(* +"(#$*(-#"( $1( )),(-$-)- 11(-$ ) 1*(**-1$#, 1* 1(#)$1" )1(()**$,+ *(+),$+) "+ , 1+$1* =AA

# "(#*$+)+1(($1" # # **11$)( -1,-$+* # # *#,(#$"1 # # # # # # # # ("*#$,( ) ,(1$-) # # # '+%%8+)2&

(-"*"$#1 ")+"+1-$), $%80&'$()$$

'*($%$)'( $*0**&+0)(