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“A study on mutual funds and
awareness of mutual fund among
insurance advisors”



A Project report submitted in partial fulfillment

for the award of Post Graduate
Diploma in Management.


Mr. T. N. Srivastava
Ranjeet kumar

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GDBA 2008-10


I, Ranjeet kumar, a student of Graduate School of

Business and Administration, Greater Noida hereby
declare that the project entitled “A study on
mutual funds and awareness of mutual fund
among insurance advisors” is submitted in partial
fulfillment of PGDM is my original work.

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Sometimes words fall short to show gratitude, the same

happened with me during this project. The immense help and
support received from NJ India Invest Pvt. Ltd. overwhelmed
me during the project.

My sincere gratitude to Mr. CHAHAT MIYA KHAN (Team

SUNIL SINGH (Relation Executive) whose co-operation and
guidance proved immensely helpful to me during the course
of summer training.

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I also wish to acknowledge my sincere thanks to the

entire concern faculty for their valuable advice and

Last but not the least; my heartfelt love for my

parents, whose constant support and blessings
helped me throughout this project.


Chapter Name

Objective of study …………………………………………………………….5

Industry profile ………………………………………………………………..6

Types of mutual fund…………………………………………………………..15

Advantage of mutual fund……………………………………………………..21

Disadvantage of mutual fund………………………………………………….22

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Company profile………………………………………………………………32

Why mutual fund advisors for insurance agents………………………………48

Research Methodology………………………………………………………....53

Summary of findings……………………………………………………...57




1 ) Understanding Mutual Funds

2 ) Understanding Market Potential of Mutual funds.

3 ) Understanding which mutual fund is good for whom

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4 ) Analyzing Awareness of Mutual Funds among insurance




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A Mutual Fund is a trust that pools the savings of a number of investors who share a common
financial goal. The money thus collected is then invested in capital market instruments such as
shares, debentures and other securities. The income earned through these investments and the
capital appreciations realized are shared by its unit holders in proportion to the number of units
owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it
offers an opportunity to invest in a diversified, professionally managed basket of securities at a
relatively low cost

The flow chart below describes broadly the working of a Mutual Fund.

A Mutual Fund is a body corporate registered with the Securities and Exchange Board of India
(SEBI) that pools up the money from individual/corporate investors and invests the same on
behalf of the investors/unit holders, in Equity shares, Government securities, Bonds, Call
Money Markets etc, and distributes the profits. In the other words, a Mutual Fund allows
investors to indirectly take a position in a basket of assets. Mutual Fund is a mechanism for
pooling the resources by issuing units to the investors and investing funds in securities in
accordance with objectives as disclosed in offer document. Investments in securities are spread
among a wide cross-section of industries and sectors thus the risk is reduced. Diversification
reduces the risk because all stocks may not move in the same direction in the same proportion at
same time. Investors of mutual funds are known as unit holders.

The investors in proportion to their investments share the profits or losses. 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
Exchange Board of India (SEBI) which regulates securities markets before it can collect funds
from the public.

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➢ A mutual fund actually belongs to the investors who have pooled their funds.

➢ A mutual fund is managed by investment professionals and other service providers, who
earn a fee for their services, from the fund.

➢ The pool of funds is invested in a portfolio of marketable investments. The value of the
portfolio is updated every day.

➢ The investor’s share in the fund is denominated by ‘units’. The value of the units changes
with change in the portfolio’s value, every day. The value of one unit of investment is
called the Net Asset Value or NAV.


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. Though the growth was slow, but it
accelerated from the year 1987 when non-UTI players entered the Industry.

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In the past decade, Indian mutual fund industry had seen a dramatic improvement, both
qualities wise as well as quantity wise. Before, the monopoly of the market had seen an ending
phase; the Assets Under Management (AUM) was Rs67 billion. The private sector entry to the
fund family raised the Aum to Rs. 470 billion in March 1993 and till April 2004; it reached the
height if Rs. 1540 billion.

The Mutual Fund Industry is obviously growing at a tremendous space with the mutual fund
industry can be broadly put into four phases according to the development of the sector. Each
phase is briefly described as under.

The history of mutual funds in India can be broadly divided into four
distinct phases.

First Phase: 1964-1987

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 cores of assets under management.

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

In 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 June1987followed
by Canara bank Mutual Fund (Dec87), Punjab National Bank Mutual Fund (Aug 89), Indian
Bank Mutual Fund (Nov89), 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

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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
industry now functions under the SEBI (Mutual Fund) Regulations1996.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 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. The graph indicates the growth of assets over the

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Growth of mutual fund business in India in the four

decades from 1964, when UTI was set up is given in
the table below:-

Aggregate Aggregate
investment in investment in
Period(Year) Period(Year)
Crores of Crores of
Rupees Rupees
1964-69 65 1992-93 46988.02

1969-74 172 1993-94 61301.21

19774-79 402 1994-95 75050.21

1979-84 1261 1995-96 81026.52

1986-87 4563.68 1996-97 80539.00

1987-88 6738.81 1997-98 68984.00

1988-89 13455.65 1998-99 63472.00

1989-90 19110.92 1999-00 107966.10

1990-91 23060.45 2000-01 90587.00

1991-92 37480.20 2001-02 94571.00

NOTE:- Industry AUM tripled from 1.50 lac crore 2003 to 4.50 lac
crore in Nov. 08.

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Note: Erstwhile UTI was bifurcated into UTI Mutual Fund and the Specified Undertaking of
the Unit Trust of India effective from February 2003. The Assets under management of the
Specified Undertaking of the Unit Trust of India has therefore been excluded from the total
assets industry as a whole from February 2003 onwards.
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The Structure Consists

The structure of mutual funds in India is governed by the SEBI Regulations, 1996. These
regulations make it mandatory for mutual funds to have a 3-tier structure of Sponsors- Trustee-
AMC (Asset Management Company). The Sponsor is the promoter of mutual fund, and
appoints the Trustee. The Trustees are responsible to the investors in the mutual funds, and
appoint the AMC for managing the investment portfolio. The AMC is the business face of the
mutual funds, as it manages all the affairs of mutual funds. The mutual funds and AMC have to
be registered by the SEBI.


A sponsor is a body corporate who establishes a mutual fund. It may be one person acting alone
or together with another body corporate. 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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Board of Trustee:

Mutual fund requires to have an independent board of Trustee, where two third of the trustees
should be independent person who are not associated with the sponsor in any manner. The
board of trustees of the trustee company holds the property of the mutual fund in trust for the
benefit of the unit holders. The board of trustees is responsible for protecting the unit holder’s

Asset Management Company (AMC)

The role of asset Management Company is highly significant in the mutual fund operation. The
AMC is appointed by the Trustee. They are the fund managers i.e. they invest the investors
money in various securities ( equity, debt and money market instruments) after proper research
of market conditions and the financial performance of individual companies and specific
securities in the efforts to meet or beat average market return and analysis. The AMC is
required to be approved by the Securities and Exchange Board of India (SEBI) to act as an asset
management company of the Mutual Fund. At least 50% of the directors of the AMC are
independent directors who are not associated with the Sponsor in any manner. The AMC must
have a net worth of at least 10 crores at all times. They also look after the administrative
functions of a mutual fund for which they charge management fee.

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.

Mutual fund is required by law to protect their portfolio securities by splacing them with a
custodian. Nearly all mutual funds use qualified bank custodians. Only a registered custodian
under the SEBI regulation can act as a custodian to a mutual fund.A custodian handles the
investment back office of a mutual fund.

Fee structure:-

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Custodian charges range between 0.15% to 0.20% on the net value of the customer’s holding for
custodian services space is one important factor which has fixed cost element.

➢ Receipt and delivery of securities

➢ Holding of securities.

➢ Collecting income

➢ Holding and processing cost

➢ Corporate actions etc


An investor in mutual fund earns return from two sources:

➢ Income from dividend paid by the mutual fund.

➢ Capital gains arising out of selling the units at a price higher than the

acquisition price

Formation and regulations:

➢ Mutual funds are to be established in the form of trusts under the Indian trusts act and
are to be operated by separate asset management companies (AMC s)

➢ AMC’s shall have a minimum Net worth of Rs. 5 crores;

➢ AMC’s and Trustees of Mutual Funds are to be two separate legal entities and that an
AMC or its affiliate cannot act as a manager in any other fund;

➢ Mutual funds dealing exclusively with money market instruments are to be regulated by
the Reserve Bank Of India

➢ Mutual fund dealing primarily in the capital market and also partly money market
instruments are to be regulated by the Securities Exchange Board Of India (SEBI)

➢ All schemes floated by Mutual funds are to be registered with SEBI

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 Schemes according to maturity period : -

A mutual fund scheme can be classified into open-ended scheme or close ended scheme
depending on its maturity period.

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 Open ended fund/scheme:

An open-ended fund or scheme is one that is available for subscription and repurchase on a
continuous basis. These schemes not have a fixed maturity period. Investors can conveniently
buy and sell units at Net Asset Value (NAV) related prices which are on a daily basis. The key
feature of open-end schemes is liquidity.

 Close ended Fund/scheme:

A close-ended fund or scheme has a stipulated maturity period e.g. 5-7 years. The fund is open
for subscription only during a specified period at the time of launch of the scheme. Investors can
invest in the scheme at the time of the initial public issue and thereafter they can buy or sell the
units of the scheme on the stock exchanges where the units are listed. In order to provide an exit
route to the investors some close ended funds give an option of selling back the units to the
mutual fund through periodic repurchase at NAV related prices. SEBI Regulations stipulate
that at least one of the two exit routes is provided to the investors i.e. either repurchase facility
or through listing on stock exchanges. These mutual funds schemes disclose NAV generally a
weekly basis.

 Schemes according to investment objective:

A scheme can also be classified as growth scheme, income scheme, or balance scheme
considering its investment objective. Such schemes may be open-ended or close-ended scheme as
described earlier. Such schemes may be classified mainly as follows:

 Equity funds: These funds invest in equities and equity related instruments.
With fluctuating share prices, such funds show volatile performance, even losses.
However, short term fluctuations in the market, generally smoothens out in the long
term, thereby offering higher returns at relatively lower volatility. At the same time, such
funds can yield great capital appreciation as, historically, equities have outperformed all
asset classes in the long term. Hence, investment in equity funds should be considered for
a period of at least 3-5 years. It can be further classified as:

1. Growth Fund: Aim to provide capital appreciations over the medium to long
term. These schemes normally invest a majority of their funds in equities and are willing
to bear short term decline in value for possible future appreciation. These schemes are
not for investors seeking regular income or needing their money back in the short term

2. Diversified Equity Fund: Diversified equity funds are the most popular
among investors. They invest in many stocks across many sectors, and because they have
the freedom to chop and churn their portfolios as they like, diversified equity funds are a
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good proxy to the stock market. If a general exposure to equities is what you want, they
are a good option. They can invest in all listed stocks, and even in unlisted stocks. They
can invest in which ever sector they like, in what ever ratio they like.

3. Equity – Linked Savings Schemes (ELSS): Equity – linked savings

schemes (ELSS) are diversified equity funds that additionally offer income tax benefits to
individuals. ELSS is one of the many section 80c instruments, along with the more
popular debt options like the PPF, NSC and infrastructure bonds. In this Section 80c
grouping. ELSS is unique. Being the only instrument to offer a total equity exposure.

4. Index Fund: An index fund is a diversified equity fund; with a difference- a fund
manager has absolutely no say in stock selection. At all times, the portfolio of an index
fund mirrors an index, both in its choice of stocks and their percentage holding. As of
March 2004, equity index funds tracked either the Sensex or the Nifty. So, an index fund
that mirrors the Sensex will invest only in the 30 Sensex stocks, which too in the same
proportion as their weight age in the index.

5. Sector Fund: Sector funds invest in stocks from only one sector, or a handful of
sectors. The objective is to capitalize on the story in the sectors, and offer investors a
window to profit from such opportunities. It’s a very narrow focus, because of which
sector funds are considered the riskiest among all equity funds.

6. Mid – Cap Fund: These are diversified funds that target companies on the fast –
growth trajectory. In the long run, share prices are driven by growth in a company’s
turnover and profits. Market players refer to them as ‘mid-sized companies’ and ‘mid-
cap stocks’ with size in this context being benchmarked to a company’s market value. So,
while a typical large cap stock would have a market capitalization of over Rs 1,000
crores, a mid-cap stock would have a market value of Rs 250-2,000 crores.

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Mutual Fund Equity schemes have delivered very attractive

returns in last 5 years, giving over 51% returns annually

 DEBT FUNDS:-These Funds invest a major portion of their corpus 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:

1. Gilt Funds: Invest their corpus in securities issued by Government, popularly

known as GOI 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

2. Income Funds: Income funds aim to maximize debt returns for the medium to
longer term. Invest a major portion into various debt instruments such as bonds,
corporate debentures and Government securities.

3. MIPs: Invests around 80% of their total corpus in debt instruments while the rest of
the portion is invested 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

4. Short Term Plans (STPs): Meant for investors with an investment horizon
of 3-6 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.

5. Liquid Funds: Also known as Money Market Schemes, These funds are meant to
provide easy liquidity and preservation of capital. These schemes invest in shortterm
instruments like Treasury Bills, inter-bank call money market etc. 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
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6. matrix and are considered to be the safest amongst all categories of mutual funds.

7. Floating Rate Funds: These income funds are more insulated from interest
rate than their conventional peers. In other words, interest rate changes, which cause the
NAV of a conventional debt fund to go up or down, have little, or no, impact on NAVs of
floating rate funds.


1. BALANCED FUNDS:-These funds, as the name suggests, are a mix of both

equity and debt funds. The aim of balanced funds is to provide both growth and regular
income as such schemes invest both in equities and fixed income securities in the
proportion indicated in their offer documents. These are appropriate for investors
looking for moderate growth. They generally invest 40-60% in equity and debt
instruments. These funds are also affected because of fluctuations in shares prices in the
stock markets. However, NAVs of such funds are likely to be less volatile compared to
pure equity funds. Following are balanced funds classes:-

a. Debt-oriented funds -Investment below 65% in equities.

b. Equity-oriented funds -Invest at least 65% in equities, remaining
in debt.

2. Growth and Income Fund: Funds that combine features of growth

funds and income funds are known as Growth-and-Income Funds. These funds
invest in companies having potential for capital appreciation and those known for
issuing high dividends. The level of risks involved in these funds is lower than
growth funds and higher than income funds.

3. Asset Allocation Fund: Mutual funds may invest in financial assets like
equity, debt, money market or non-financial (physical) assets like real estate,
commodities etc.. Asset allocation funds adopt a variable asset allocation strategy that
allows fund managers to switch over from one asset class to another at any time
depending upon their

4. outlook for specific markets. In other words, fund managers may switch over to equity if
they expect equity market to provide good returns and switch over to debt if they expect
debt market to provide better returns.

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Comparison of Investment

Return Safety Volatilit Liquidit Convenie

y y nce
Equity High Low High High Moderate
Bonds Moderate High Moderate Moderate High
Corporate Moderate Moderate Moderate Low Low
Corporate Moderate Low Low Low Moderate
Bank Low High Low High High
PPF Moderate High Low Moderate High
Life Low High Low Low Moderate
Gold Moderate High Moderate Moderate Gold
Real High Moderate High Low Low
Mutual High High Moderate High High


1. Portfolio Diversification

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Mutual Funds invest in a well-diversified portfolio of securities which enables investor to hold a
diversified investment portfolio (whether the amount of investment is big or small).

2. Professional Management
Fund manager undergoes through various research works and has better investment
management skills which ensure higher returns to the investor than what he can manage on
his own.

3. Less Risk
Investors acquire a diversified portfolio of securities even with a small investment in a
Mutual Fund. The risk in a diversified portfolio is lesser than investing in merely 2 or 3

4. Low Transaction Costs

Due to the economies of scale (benefits of larger volumes), mutual funds pay lesser
transaction costs. These benefits are passed on to the investors.

5. Liquidity
An investor may not be able to sell some of the shares held by him very easily and quickly,
whereas units of a mutual fund are far more liquid.

6. Choice of Schemes
Mutual funds provide investors with various schemes with different investment objectives.
Investors have the option of investing in a scheme having a correlation between its
investment objectives and their own financial goals. These schemes further have different

7. Transparency
Funds provide investors with updated information pertaining to the markets and the
schemes. All material facts are disclosed to investors as required by the regulator.

8. Flexibility
Investors also benefit from the convenience and flexibility offered by Mutual Funds.
Investors can switch their holdings from a debt scheme to an equity scheme and vice-versa.
Option of systematic (at regular intervals) investment and withdrawal is also offered to the
investors in most open-end schemes.
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9. Safety
Mutual Fund industry is part of a well-regulated investment environment where the interests of
the investors are protected by the regulator. All funds are registered with SEBI and complete
transparency is forced.


1. Costs Control Not in the Hands of an Investor

Investor has to pay investment management fees and fund distribution costs as a
percentage of the value of his investments (as long as he holds the units), irrespective of the
performance of the fund.

2. No Customized Portfolios
The portfolio of securities in which a fund invests is a decision taken by the fund manager.
Investors have no right to interfere in the decision making process of a fund manager, which
some investors find as a constraint in achieving their financial objectives.

3. Difficulty in Selecting a Suitable Fund Scheme

Many investors find it difficult to select one option from the plethora of funds /
schemes / plans available. For this, they may have to take advice from financial planners in
order to invest in the right fund to achieve their objectives.

4. Delay in Redemption:

The redemption of the funds though has liquidity in 24-hours to 3 days takes formal application
as well as needs time for redemption. This becomes cumbersome for the investors.

5. Non-availability of loans:

Mutual funds are not accepted as security against loan. The investor cannot deposit the mutual
funds against taking any kind of bank loans though they may be his assets.

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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. 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.


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

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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.


The debt servicing ability (may it be interest payments or repayment of principal) of a company
through its cash flows determines the Credit Risk faced by you. This credit risk is measured by
independent rating agencies like CRISIL who rate companies and their paper. An ‘AAA’ rating
is considered the safest whereas a ‘D’ rating is considered poor credit quality. A well-diversified
portfolio might help mitigate this risk.


Things you hear people talk about: “Rs. 100 today is worth more than Rs. 100 tomorrow.”
“Remember the time when a bus ride costed 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 welldiversified portfolio with some
investment in equities might help mitigate this 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 raise 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.


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 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.

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Net Asset Value (NAV)

The net asset value of the fund is the cumulative market value of the assets fund net of its
liabilities. In other words, if the fund is dissolved or liquidated, by selling off all the assets in the
fund, this is the amount that the shareholders would collectively own. This gives rise to the
concept of net asset value per unit, which is the value, represented by the ownership of one unit
in the fund. It is calculated simply by dividing the net asset value of the fund by the number of
units. However, most people refer loosely to the NAV per unit as NAV, ignoring the "per unit".
We also abide by the same convention.

Definition of NAV

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Net Asset Value, or NAV, is the sum total of the market value of all the shares held in the
portfolio including cash, less the liabilities, divided by the total number of units outstanding.
Thus, NAV of a mutual fund unit is nothing but the 'book value.'

Calculation of NAV

The most important part of the calculation is the valuation of the assets owned by the fund.
Once it is calculated, the NAV is simply the net value of assets divided by the number of units
outstanding. The detailed methodology for the calculation of the asset value is given below.

Asset value is equal to

Sum of market value of shares/debentures

+ Liquid assets/cash held, if any
+ Dividends/interest accrued
Amount due on unpaid assets
Expenses accrued but not paid
Other liabilities
NAV per unit = ------------------------------------------------------------------
No. of units outstanding of the scheme

NAV and its impact on the returns

We feel that a MF with lower NAV will give better returns. This again is due to the wrong
perception about NAV. An example will make it clear that returns are independent of the NAV.
Say, you have Rs 10,000 to invest. You have two options, wherein the funds are same as far as
the portfolio is concerned. But say one Fund X has an NAV of Rs 10 and another Fund Y has
NAV of Rs 50. You will get 1000 units of Fund X or 200 units of Fund Y. After one year, both
funds would have grown equally as their portfolio is same, say by 25%. Then NAV after one
year would be Rs 12.50 for Fund X and Rs 62.50 for Fund Y. The value of your investment
would be 1000*12.50 = Rs 12,500 for Fund X and 200*62.5 = Rs 12,500 for Fund Y. Thus your
returns would be same irrespective of the NAV. It is quality of fund, which would make a
difference to your returns. In fact for equity shares also broadly this logic would apply.

Misconception about NAV

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This situation arises from the perception that a fund at Rs 10 is cheaper than say Rs 15 or Rs
100. However, this perception is totally wrong and investors would be much better off once they
appreciate this fact. Two funds with same portfolio are same, no matter what their NAV is.
NAV is immaterial. Why people carry this perception is because they assume that the NAV of a
MF is similar to the market price of an equity share. This, however, is not true.


Entry Load: The load charged at the time of investment is known as entry load. It’s
meant to cover the cost that the AMC spends in the process of acquiring subscriber’s
commission payable to brokers, advertisements, register expenses etc. The load is
recovered by way of charging a sale price higher than the prevailing NAV.

Exist Load: Some AMC do not charge an entry load but they charged an exist load
i.e., they deduct a load before paying out the redemption proceeds. Psychologically,
investors are much more willing to pay exist loads as compared to entry loads.

Unit: Units mean the investment of the unit holders in a scheme. Each unit represents
one undivided share in the assets of a scheme. The value of each unit changes, depending
on the performance of the fund.


1. Governmental Influences

Mutual fund business is a highly regulated business throughout the world as it seeks to ensure
that quality and fairly priced schemes are available. Governmental intervention thus in mutual
fund market usually is most needed to ensure that insurers are reliable. And in the developing
countries the additional goal may be promotion of domestic mutual fund industry and ensuring
the national mutual fund industry contributes to overall economic development. In a non
technical sense mutual fund is purchased in a good faith so the duty of government intervention
in mutual fund industry is to ensure that this principle of mutual fund is never defeated. The
ideology of government plays an important role in mutual fund industry also. For example in
the past during 1991, the P .V Narsimha Rao government strongly believed in liberalization also
liberalized the mutual fund sector which helped to allow private players in the industry from
1993 and enhancing joint ventures with foreign companies. The present government with more
focuses on foreign direct investments has declared to favor the rise FDI in mutual fund to 49%
which further enhances competition in the industry.

2. Taxation Policy

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Social equity being one of the motives behind tax collections, government give certain
exemptions from such levying. One such exemption is deduction incurred by taxpayers towards
investment in mutual fund coverage. Similarly, capital invested in infrastructure bonds etc is
offered with certain concession under tax laws. The central idea behind such exemptions is that
the capitals so allocated by individuals reduce the ultimate burden on the public infrastructure
or helps in creating such infrastructural facilities. The income tax rules related to the mutual
fund transactions can be classified under:

[A] Exemptions available to companies or businesses

[B] Exemptions available to insured individuals

[A] Exemptions available to companies

Expenses deductible from commission earned by distributor, banker, national
Tax concessions under risk management practices of an enterprise
In growth option equity schemes there no long term capital gain by company.
In dividend option equity schemes there no tax.
Return received by charitable trust is total exempted from tax.
Else schemes give to advantage of tax saving, growth potential and return.

[B] Tax rules governing investment by individuals

Deduction in respect of ELSS schemes (sec 80C):

Investment in this fund would enable you to avail the benefits under clause (xiii) of a section
80C of the Income Tax Act investment made in the schemes up to 1 lakh by the eligible investor
for deduction under this section of the Act.
Since it will be an income deduction an investment of Rs 1 lakh in this fund can save off Rs.
33600 from your tax payable liability (assuming you are in the highest tax bracket) Investor will
receive tax free dividend in above case. Investor will also receive tax free dividend by investing
equity schemes in dividend option Investors also receive tax free return by investing equity
schemes in growth option for long term capital gain.

C Tax plannings

An individual can think of health ELSS schemes purchase as a tool of tax planning exercise. For
example people who are marginally affected by tax liability can be as well purchase a ELSS
fund get benefits of Rs. 33600 from tax. In this way tax burden is become less by purchasing
ELSS fund. Thus tax law offer benefit to individuals/companies by way of
exemptions/deductions of expenditure incurred towards purchase of mutual fund various
schemes coverage from total taxable income.

3. Foreign Trade Regulations

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With the vast potential for mutual fund in India due its large population in the country many
foreign companies are ready to enter into the Indian market. But companies can be permitted in
India through joint ventures with an Indian partner as well as come separately and the foreign
equity shall be restricted to only 25%. Another statement also tells that Indian subsidiaries of
foreign companies shall not be allowed to participate in banking sector unless they entered in to
joint ventures with the Indian partners. But at present the mutual fund regulator is in favor of
hike in FDI cap from 25% to 49%, and is finalizing a report that will be submitted to the
government for a comprehensive legislation for the industry. The security exchange board of
India and association of mutual fund India have been advocating a hike in FDI limit for mutual
fund companies so that the foreign partners can infuse additional funds in these companies to
sustain their growth. The government will need to amend the separate mutual fund Act for FDI
capital as well as domestic company as this is the statutory provision unlike sectors like civil
aviation and telecom, which have come through notification.

4. National Income

The relative importance of the mutual fund Market within a country will also be dependent
upon economic development. With greater rates of economic growth, consumption of
investment should increase as a result of increased income, and an increased stock of assets
requiring mutual fund. Furthermore, the development of mutual fund is likely to facilitate
greater economic growth, implying that economic growth may be endogenous. Consistent with
these arguments, studies find that the level of financial development and economic development
are positively related to the level of mutual fund across emerging markets.

5. Consumptions and Savings

The gross capital formation of any country is important for indication of its growth in the
future years. It is quite necessary to set up the rate of capital formation so that a large stock of
machines, tools and equipments are accumulated in a country. Experience of development in
other countries suggests that a high rate of capital formation was achieved to trigger rapid rate
of economic growth. With the hike in foreign capital coming to India the rate of capital
formation is becoming boom to insurers, which has given them opportunities. It is heartening to
them to note that latest savings rate of 28% is highest till now and with the growth rate near to
8% is bringing a pool of buyer’s purchasing power. This directly influences the demand for
mutual fund products.

6. Employment

The effect of employment on mutual fund industry is as direct as that on economic development
of any country. With the rising levels of employment the effect on mutual fund industry is
positive because employment adds to the insured properties and assets from every prospective
be it due to organized or unorganized.

7. Inflation

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The midterm policy review the strong macroeconomic indicators and RBI has revised its GDP
growth estimates to the upper limit of the earlier projection range 8% inflation (WPI) has been
steadily moving up in recent times and RBI has highlighted that primary articles prices have
been on of the key contributors. However one needs to keep in mind that
recent increase in global oil prices.

8. Money supply
The central banks has indicated that credit growth and money supply number are likely to be
above its prosecution for the current fiscal year, the statement “to consider promptly all
possible measures as appropriate to the evolving global and domestics situation “is indicative of
phased increase in FII limits for gilt investment could help in depending the securities market
and is part of the road map towards fuller convertibility.

9. Interest
Interest is major factor for investment when a person find less return from investment tool than
people move towards the higher returns tool of investment.

10. Risk factor

All investments in Mutual Fund and securities are subject to market risks and the NAV of the
fund may go up or down depending on the factors and forces affecting the security market.
There can be no assurance that the fund’s objective will be achieved. Past performance of the
sponsors/Mutual fund/schemes/AMC is not necessarily indicative of
the future results. The name of the schemes does not in any manner indicate their quality, their
future prospects or returns.
The specific risk would be credit, market, illiquidity, judgmental error, interest rate, swaps and
forward rates.

11. Demographic environment

The demographic environment significantly affects the demand for the mutual fund industry.
Factors like the average age of the population, levels of education, household structures income
distribution, life style and the extent of industrialization as well as urbanization terribly
influences the demand of mutual fund schemes In India the average age of the population is at
an increasing trend following the improved
medical technology and better awareness of health care requirements. As a result, the risk of
investment death is decreasing while connectivity is increasing. Simultaneously the demand for
pension funds and income fund is expected to grow. For example at the time of independence
the average age of dying for Indians was 45. Presently it has increased to 65 following better
healthcare, improvements in medicalscience and more health consciousness among the common
man. By 2010 it is expected to rise to 75. Hence risk profile is also changing. Earlier people are
thanking about safely but at present people thinking about capital growth.

12. Social Factors

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The social environment covers the customs, habits, level of education, tastes and standard of
living of people in the society. Today’s social environment is greatly influenced to a major extent
by the changes in technological aspects. With the rapid progress in technology and economic
liberalization, the physical boundaries are gradually vanishing. As a result, the social life of the
people and their views towards risk and uncertainty of life and health are gradually changing.
These factors of social life are affecting human motivations and emotions related to the physical
and mental incapacities, loss of health and death. In general there are extremes apprehensions
of one’s death, though it is certain. The perception of an individual toward risk and capital
growth depends on the social culture and religious belief. In the urbanized area people does
think about investment and capital growth. These beliefs ultimately influence the buying
behavior of a consumer.

13. Education

Education is major factor of demand for mutual fund product. if the education levels is higher
than the people know the benefits of mutual fund the use mutual fund as investment tool and
also take rise capital growth.


The Indian mutual fund industry is mainly divided into three kinds of categories. These
categories include public sector players, nationalized banks and private sector and foreign

UTI Mutual Fund was one of the leading Mutual Fund companies in India till May 2006 with a
corpus of more than Rs.31, 000 Crore and it is the public sector mutual fund. Bank of Baroda,
Punjab National Bank, Can Bank and SBI are the major nationalized banks mutual fund. At
present mutual fund industry is mainly dominated by private and foreign sector players which
include major players like Prudential ICICI Mutual Fund, HDFC Mutual Fund, Reliance
Mutual Fund etc. are private sector mutual funds players while Franklin Templeton etc. are
major foreign mutual fund players. At present there are more than 39 players operating in


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“Success is a journey, not a destination.” If we look for examples to prove this quote then we can
find many but there is none like that of NJ India Invest Pvt. Ltd. Back in the year 1994, two
people created history by establishing NJ India Invest Pvt. Ltd leading advisors and
distributors of financial products and services in India.

NJ has over a decade of rich exposure in financial investments space and portfolio advisory
services. From a humble beginning, NJ over the years has evolved out to be a professionally
managed, quality conscious and customer focussed financial / investment advisory &
distribution firm.

NJ prides in being a professionally managed, quality focused and customer

centric organisation. The strength of NJ lies in the strong domain knowledge in investment
consultancy and the delivery of sustainable value to clients with support from cutting-edge
technology platform, developed in-house by NJ.

At NJ we believe in …

➢ having single window, multiple solutions that are integrated for simplicity and sapience
➢ making innovations, accessions, value-additions, a constant process
➢ providing customers with solutions for tomorrow which will keep them above the curve,

NJ has over INR 60 billion* of mutual fund assets under advice with a wide presence in over 96
locations* in 18 states* and 500+ employees in India. The numbers are reflections of the trust,
commitment and value that NJ shares with its clients

NJ Wealth Advisors, a division of NJ, focuses on providing financial planning and portfolio
advisory services to premium clients of high net-worth. At NJ Wealth Advisors, we have
developed processes that focus on providing the best in terms of the advice and the ongoing
management of your portfolio and financial plans.

At NJ, our experience, knowledge and understanding enables us to provide you with the
expected value, in an enhanced way. As a leading player in the industry, we continue to
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successfully meet the expectations of our clients, through meaningful and comprehensive
solutions offered by NJ Wealth Advisors

2. VISION & MISSION OF NJ India invest:-

 Vision

To be the leader in our field of business through,

➢ Total Customer Satisfaction
➢ Commitment to Excellence
➢ Determination to Succeed with strict adherence to compliance
➢ Successful Wealth Creation of our Customers

 Mission

Ensure creation of the desired value for our customers, employees and associates, through
constant improvement, innovation and commitment to service & quality. To provide solutions
which meet expectations and maintain high professional & ethical standards along with the
adherence to the service commitments

At NJ our Service and Investing philosophy inspire and shape the thoughts, beliefs, attitude,
actions and decisions of our employees. If NJ would resemble a body, our philosophy would be our
spirit which drives our body.
Service Philosophy:

Our primary measure of success is customer satisfaction …

We are committed to provide our customers with continuous, long-term improvements and
value-additions to meet the needs in an exceptional way. In our efforts to consistently deliver the
best service possible to our customers, all employees of NJ will make every effort to:

• think of the customer first, take responsibility, and make prompt service to the customer
a priority
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• deliver upon the commitments & promises made on time

• anticipate, visualize, understand, meet, exceed our customer’s needs

• bring energy, passion & excellence in everything we do.

• be honest and ethical, in action & attitude, and keep the customer’s interest supreme

• strengthen customer relationships by providing service in a thoughtful & proactive

manner and meet the expectations, effectively.

Investing Philosophy:

We aim to provide Need-based solutions for long-term wealth creation

We aim to provide all customers of NJ, directly or indirectly, with true, unbiased, need-based
solutions and advice that best meets their stated & un-stated needs. In our efforts to provide
quality financial & investment advice, we believe that

• Clients want need-based solutions, which fits them

• Long-term wealth creation is simple and straight

• Asset-Allocation is the ideal & the best way for long-term wealth creation

• Educating and disclosing all the important facets which the customer needs to be aware
of, is important

• The solutions must be unbiased, feasible, practical, executable, measurable and flexible
• Constant monitoring and proper after-sales service is critical to complete the ongoing

At NJ our aim is to earn the trust and respect of the employees, customers, partners, regulators,
industry members and the community at large by following our service and investing
philosophy with commitment and without exceptions.

The management at NJ brings together a team of people with wide experience and knowledge in
the financial services domain. The management provides direction and guidance to the whole

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organisation. The management has strong visions for NJ as a globally respected company
providing comprehensive services in financial sector.

The 'Customer First' philosophy in deeply ingrained in the management at NJ. The aim of the
management is to bring the best to the customers in terms of -

• Range of products and services offered

• Quality Customer Service
All the key members of the organisation put in great focus on the processes & systems under the
diverse functions of business. The management also focuses on utilizing technology as the key
enabler for all the activities and to leverage the technology for enhancing overall customer

The key members of the management are:

Mr. Neeraj Choksi Jt. Managing Director

Mr. Jignesh Desai Jt. Managing Director

Key Sales Team:

Mr. Misbah Baxamusa National Head

Mr. Naveen Rathod V.P. (Sales)

Mr. Kulbhushan Nandwani A.V.P. (Marketing)

Mr. Prashant Kakkad A.V.P. (Sales)

Key Executive Team :

Mr. Shirish Patel Information Technology

Mr. Abhishek Dubey Business Process

Mr. Vinayak Rajput Operations

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Mr. Dhaval Desai Human Resources

Mr. Col. Dixit Administration

Mr. Tejas Soni Finance

Mr. Viral Shah Research

Mr. Rakesh Tokarkar Compliance

5. People & culture:-


Enthusiasm, Enterprise, Education and Ethics form the four pillars at NJ. At NJ one can
witness the vibrant energy, enthusiasm and the enterprising drive to excel flowing freely
throughout the organization. At NJ can also experience the creativity, one-to-one
responsiveness, collaborative approach and passion for delivering value.

At NJ people evolve to be more effective, efficient, and result oriented. Knowledge is inherent
due to the education-centric approach and the experience in handling different clients
groups across diverse product profiles.

NJ understands that the people are the most important assets of the company and it is not
the company that grows but the people. NJ hence undertakes rigorous training and
educational activities for enhancing the entire team at NJ . NJ also believes in the ‘Learning
through Responsibility’ concept for its employees.

For people at NJ success is not a new word, but is a regular stepping - stone to
realising the one vision that everyone shares.

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At NJ we believe in transforming the lives of our customers. We exist to create a difference

a change towards a better life. The culture at NJ reflects this responsibility, this
dream of transforming lives. And we at NJ are always excited and enthused in
doing so.

We believe in keeping ‘You First’, providing you with products and services that meet your
stated and unstated needs. Client satisfaction and client service is the Mantra we constantly
recite. This service oriented philosophy runs throughout the organization, from top to bottom.

Employees are given ample freedom in their work. The objective is to keep an open, healthy
environment with ample scope for enterprise, improvement, innovations and out-of-the box

Our efforts are constantly engaged in improving our existing services, offering new and
innovative solutions that go beyond your expectations. This focus has made us one of the
most respected and preferred service providers, especially in the mutual fund industry.

Service in words, service in action

Service is the key to unlocking customer satisfaction, which again is key for
sustainability Business. At NJ we understand this very well. NJ has set strict processes
in place to delivered service to customers. AT NJ strict quality service standards are set
and a well defined established and followed religiously by our quality customer service

Performance evaluated on a frequent basis and glitches are iron out.

But quality service also involves quality people in addition to processes. NJ gives
Significant the proper training and development of the people involved in the service
delivery chain.

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Further We:

Have well-defined “Privacy Policy” to keep clients information confidential & internal
done on the same at regular intervals.

Receive various statistics which are analyzed on an ongoing basis To improve the

We are committed to improve and enhance our services and undertake new Services
initiative and other services differentiate us with other services providers in the industry.

Our service commitment…..

The service commitments are to guide the actions of the people at NJ. Clearly stated
Customers can freely communicate any such action /events wherein they feel that any Of
the commitments have been breached/ compromised . At NJ we desire to honors Our
commitments all points of the time and to all our customers without any bias.

➢ To provide customer-focused need-based valued services.

➢ To provide reliable, accurate and timely information.

➢ To maintain all records in privacy.

➢ To optimize services/benefits at least justifiable cost.

➢ To develop and grow the customers business.

➢ To provide constructive after sales service.

➢ To honour our service commitments.

Wealth Advisor’s Global Private Client, you get comprehensive set of services
that ensure you stay informed, insightful, in command, of your investments at all times.

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Life Vista

Life is counted not in years, but in moments. Moments of truth, joy, achievement and
satisfaction. Of peace, tranquillity, and freedom. At NJ, we bring such moments to life.

How we can help you?

We will do a detailed study of your goals and objectives in life and would help you by devising a
comprehensive plan to help you achieve them. We would also regularly monitor your plans to
make sure that you are always on track to achieve your goals.
Asset Vista
Wealth is not an end. Neither is it a beginning. Wealth is a process, a journey. A journey of
power, achievement and responsibility .
At NJ we ensure that this journey continues and grows.

How we can help you?

We will seek to manage and monitor your portfolio as per your objectives and your risk profile.
We would manage your portfolio the Asset Allocation way which is the most effective & ideal
way to manage investments. You would also have access to consolidated portfolio reports that
enable you to see all your investments into multiple avenues at a single place.


As NJ Wealth Advisor’s Global Private Client, you get comprehensive set of services that ensure
you stay informed, insightful, in command, of your investments at all times.

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Comprehensive Financial Planning:-

We all have many responsibilities and goals in our lives. We have dreams and aspirations for a
better future. But quite often we are not sure as to how we will fulfil these goals and aspirations.
Life changes over time. We may never be sure what today holds for us tomorrow. What if
something goes wrong? How do we make sure that we get what we wish?

A comprehensive Financial Plan is what you need. At NJ Wealth Advisors we offer you with
Comprehensive Financial Planning solutions which would involve …

A detailed study of your goals

Preparation of a comprehensive Financial Plan
Monitoring of the Financial Plan on an on-going basis

At NJ Wealth Advisors we offer you with comprehensive Financial Planning Services under the
product – Life Vista.

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Quality Portfolio Advisory:-

Making money is easy. Managing money is difficult. And managing money in today’s complex
financial markets with multiple products on an ongoing basis becomes even more difficult.

As investors we often may feel the lack of time and energy to undertake monitoring and
managing of our investments in multiple avenues. This requires both dedicated efforts and skills
in portfolio management.

At NJ Wealth Advisors we realise the need for quality, unbiased portfolio advisory services. At
NJ we would aim to manage your portfolio with a superior, time tested and much effective way
of Asset Allocation keeping in mind your risk profile.

At NJ Wealth Advisors we offer you with quality Portfolio Advisory Services under the product
– Asset Vista.

Consolidated Reporting:-

Quality online Wealth Account:

As a premium client you would have access to one of the best online investment accounts that
offer comprehensive reports, many of which are unique in nature and give valuable insights on
our investments

Our online Wealth Account covers almost all the investment

avenues that you may have:
Mutual Funds – All AMCs, All Schemes

Direct Equity

Life Insurance

Physical Assets – Gold and Property

Private Equity – Business

Debt Products

➢ Bank Deposits and Company Deposits

➢ RBI / Infrastructure Bonds
➢ Postal Savings – KVP, MIS, NSC
➢ Debentures
➢ Small Savings – PPF, NSS
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You would have access to Consolidated Net Asset Reports which would give you a single view of
all your investments into different avenues as given above.

Further, within each of the Asset class we have many more reports and utilities. Some of the
reports covered are …


Consolidated Asset Allocation, Consolidated Net Asset, Interest Income, Profit & Loss

Mutual Funds:

Valuation, Transaction, Profit & Loss, Performance, Portfolio reports like - AMC / Sector /
Equity / Credit / Debt Exposure, Weighted Average Maturity, Dividend history, etc

Direct Equity:

Demat accounts, Transaction, Valuation, Profit & Loss

Life Insurance:

Policy Report, Premium Reminder, Cash Flow


Transaction, Interest Income, Maturity reports for different Asset

Dedicated Team:-

At NJ Wealth Advisors, we work in a team concept to provide quality, effective and

timely service to our clients. The team is designed keeping you at the beginning or the end of
the flow as the originator and the end receiver of any request or service.

The team handling you consists of the Relationship Manager and the Account
Manager who would be in direct touch with you. This would be supported by the
Centralised Research Team, the Chief Portfolio Manager and the Service Team. All the
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important investment decisions and/or plans recommended to you are actually prepared
and /or approved by the Chief Portfolio Manager with inputs from the Research Team.
The structure ensures that all the Plans and recommendations that you receive are unbiased,
based on true research & detailed study, and suited to your needs.

Quality Customer Service

NJ realizes the true importance of quality customer service. The service commitments are to guide
the actions taken at NJ. Clearly stated, customers can freely communicate any such actions/events
wherein they feel that the following commitments have been breached. At NJ we desire to honour
our commitments at all points of time and to all customers without any bias.

Quality Service:


You will receive regular portfolio reports in hard copies to serve as record
All records are maintained for the plans and recommendations and minutes of all the
meetings are kept.
Dedicated Account Manager directly oversees the operational support to you Quality
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True, unbiased recommendations.

Each plan is unique in nature to suit your needs and profile.
Defined Process followed in investment consultancy / portfolio management.
All the plans are prepared and/or approved in line with the set process by Chief
Portfolio Manager with inputs from the Research Team.

Quality Communications support:

Daily market update Email

Daily MF tracker-for sort term debt fund Email

Weekly performance report Email/ Hard copy

Comprehensive monthly fact sheet Hardcopy

Research articles and reports Email / Hardcopy

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With this philosophy, we try to offer all possible products, services and support which an
Advisor would need in his business.

The support functions are generally in the following areas …

Business Planning and Strategy
Training and Development – Self and of employees
Products and Service Offerings
Business Branding
Sales and Development
Advisors Resources - Tools, Calculators, etc..

With this comprehensive supporting platform, the NJ Fundz Partners stays ahead of the curve
in each respect compared to other Advisors/competitors in the market.


Some of the awards & recognitions that we have received in past …

Year 2000:
For Outstanding Performance presented by Chairman, Prudential Plc. at London.

Year 2002:
For Outstanding Performance presented by Group Chief Executive, Prudential Plc. at London.

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Year 2003:
For Outstanding Performance presented by Group Chief Executive, Prudential Plc. at London.

Year 2004:
Among Most Valued Business Associates presented by HDFC Standard Life at Edinburgh,

Year 2004:

For Outstanding Performance by Deputy CEO, Prudential Singapore at Malaysia.

Year 2006:
Award for mobilizing the Highest Number of SIPs at National Level by Fidelity Mutual
Fund Plc at Mumbai.

Year 2006:
Award – Vietnam

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Reason 1: Easy to make more clients …

The Penetration of Mutual Funds is very low …

Whereas relatively,

The Penetration of Insurance is very high ….

Opportunity for you to acquire more clients …

Now no call of yours should get waste


Lack of competition represents a very big opportunity to grow your business anywhere in India.

> 22 Lacs Insurance Advisors

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< 70,000 Mutual Fund Advisors

(Very Few Financial Advisors)

(>35 Insurance Advisors V/s 1 Mutual Fund Advisor)

A huge DEMAND of Quality Mutual Fund Agents …

There is a genuine need for more than 2 lakh mutual fund advisors in India …(our

Reason 3: More satisfaction to your clients

If you are not selling mutual funds then you must not be aware of what they truly are
and the possibilities that they offer in providing solutions that meet the diverse needs of
different clients.

With mutual funds in your offering, you are in a much better position to fully meet the
client’s financial and investment needs.

Your client would ideally like you to do that and will be happy once to offer him
multiple solutions.

Reason 4: Additional source of income

Mutual fund is one product today that potentially has no limits to the volumes that you
can generate.
The important differentiation here with insurance is that you income is not based
on the premium you collect but on the entire AUM (assets under management)
that you have mobilized to counter the low rates.
An agent’s AUM running into crores in quite common in the industry. The income
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from mutual funds can complement your earnings from insurance and may even
substitute them in future …

Reason 5: Leveraging existing clientele base

How to get more out of what you already have?

Well, mutual fund is just the perfect answer to that question.
The truth is that there is a lot of potential to generate further income
from your existing clientele base.
Much of the investment needs of clients are unexplored and unfulfilled that you can


Reason 6: Strong industry growth ahead

There is a very strong growth of mutual funds ahead …

The reasons are many – good product, low penetration, huge
market, growing income, changing mindset, lack of other attractive
investment products, etc.
In US, almost every third household invests in mutual funds.
The US MF industry size is about 67% of the US GDP and is 1.5 times of the bank
deposits in US.
The situation is though almost opposite in India with the MF industry size here equal to
6% of GDP and bank deposits are 10.50 times of the total industry size.
The potential is huge and India is expected to follow in on the lines of the more developed

Reason 7: Retention and loyalty of clients

The underlying logic can be found in the growth of multiplexes, shopping malls, after
all the human nature is basically the same …
People today look for easy, fast, and single service point that provides them with
solutions that meets their multiple needs.
your client would probably invest in mutual funds some day or later …

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Why not you do the same before anyone else gets to your client?

Reason 8: Greater choice of products

Till now we haven’t really talked about what choices you can offer to your clients … In
fact, you can offer cash-flow management, to long-term goal oriented planning to your
Your basket would include pure equity funds (Diversified / Sectoral / Index Funds) to
pure debt funds (Gilt / Income / Short Term Plans / Floating / Liquid Funds) to hybrid
funds (MIPs / Balance / Arbitrage Funds) to the tax saving ELSS.
With a vast range of Fund houses and many more schemes – the choices are
virtually endless, and one is sure to find what one needs.

Reason 9: Be a Complete Financial Advisor …

What next to Insurance?

There is an opportunity for you to transcend to the next level and offer ‘real solutions’
that will truly add value to your clients.
You should develop yourself and grow more as a ‘Financial’ advisor rather than just
‘Insurance’ agent.
The learnings can extend beyond products to markets, to equities, debt, economy,
etc to understanding real financial planning, funds management, etc

Reason 10: Helps in selling ULIPs …

If your focus is also selling ULIPS then, dealing in mutual funds should also help you in
better understanding and helping communicate the same to your clients.
It is a general observation in western countries that as an economy progresses, term
plans and ULIPs have increasing % of fresh investments from clients as far as insurance
is considered.

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Your presence in mutual funds would be an advantage to you going forward.

Reason 11: Market potential of mutual funds.

 Low Penetration of Mutual Funds in INDIA

Few people have been exposed to the idea & advantages of mutual funds and even fewer
actually invest in mutual funds, because of lack of adequate no. of advisors

Opportunity to offer such products to clients …

Every person can be a customer!!


Mutual Fund Equity schemes have delivered very attractive returns in last 5 years, giving over
51% returns annually

Opportunity for you to offer your clients with such equity-

related products for long-term wealth creation

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Data collection:-
1. Primary data
2. Secondary data:- Book , Internet, Magazines
NOTE:-Data for the study was collected by the survey method with the accessories
questionnaire Keeping in mind the objectives. The primary data was for attaining the
objective while the Secondary data were used to write the literature & get the information.

Primary data
Primary data can be obtained through direct communication with respondents or through
personal interaction. There are several method of collecting primary data through survey &
descriptive research. I have used questioner from as for collecting primary data. Which have
been very helpful for me to analyze the exact market potential of and awareness of mutual fund
and mutual fund advisors.

Secondary data:
Secondary data means, the data has already collected and analyzed by someone else. Various
sources of secondary data are as follow……






Projects etc.

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Data sources
The study is based on primary data only. For this, A questionnaire was prepared consisting of
both open and closed ended questions. Answers are collected by personal interview with the
insurance advisors of different insurance company by formal and informal talks.

Sample size :
The sample size of my project was limited to 150 people only

Limitation of the study:

Due the constraints, survey was conducted at west Delhi near Janakpuri branch. So result
cann’t represent the whole market.

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Name: ------------------------- Age: -------------- Address:

Contact no: ---------------------------------- E-mail ID:
Experience in business: ----------------------------

1. What are the products in your existing business?

a. life insurance b. general insurances
c postal scheme d. others

2. Do you know about Mutual Fund SIP 8th wonder of the world as
a product for wealth creation of customers?
a. Yes b. No
c. know slightly

3 Do you know about revenue and commission in Mutual Fund

and SIP business for advisors?
a. Yes b. No
c. know slightly

4. Do you know the advantages of adding up Mutual Fund and SIP

as a product along with your existing product?
a. Yes b. No
c. Would like to know

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5. Would you you like to attend business opportunity program

organized by NJ India Invest?
a. Yes b. No
c) Yes but not now

6. Can we send representative from NJ IndiaInvest for more

information about Mutual Fund?
a. Yes b. No c)Yes but with an

7. Have you cleared your AMFI exam?

a. Yes b. No

8 If no, would you like to give the exam if adequate reading

materials and training given?
a. Yes b. No

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1.What are the products in your existing business?

a. life insurance b. general insurancess

c. postal scheme d. others


No of Response %
Life Insurance 120 80
General Insurance 18 12
Postal schemes 3 2
Others 9 6

2.Do you know about Mutual Fund SIP 8th wonder of the world as a product
for wealth creation of customers?

a. Yes b. No

c. know slightly

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No of Response %
Yes 48 32
No 69 46
Know Slightly 33 22

3 Do you know about revenue and commission in Mutual Fund and SIP business
for advisors?

a. Yes b. No

c .know slightly

No of Response %
Yes 60 40
No 75 50
Would Like to 15 10

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4. Do you know the advantages of adding up Mutual Fund and SIP as a product
along with your existing product?

a. Yes b. No

c . Would like to know

No of Response %
Yes 18 12
No 48 32
Would Like to 84 56

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5. Would you you like to attend business opportunity program organized by NJ

India Invest?

a. Yes b. No

c Yes but not now

No of Response %
Yes 54 36
No 78 52
Yes but not now 18 12

6.Can we send representative from NJ India Invest for more information about
Mutual Fund?

a. Yes b. No c)Yes but with an appointment

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No of Response %
Yes 63 42
No 69 46
Yes but not now 18 12

7.Have you cleared your AMFI exam?

a. Yes b. No

No of Response %
Yes 12 8
No 138 92

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8 If no, would you like to give the exam if adequate reading materials and training

a. Yes b. No

No of Response %
Yes 48 32
No 102 68

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It was a very tough task to create an awareness of

mutual fund among the insurance advisors. Mostly they
were happy with the insurance product what they are
selling and are not ready to add up a new product in
their selling basket. Lic agents were not ready to sell
“Mutual fund” because they have mis-conception that in
mutual fund is only related to equity market and due to
the recent economic slowdown people are not ready to
invest in the market. After explaining to them about less
competition among mutual fund advisors rather than
insurance advisors and after making him understand
about the proper concept of mutual fund, some of them
were considered and were ready to come to meeting or
BOP program for becoming mutual fund advisor.

Through this research I found that mostly youth

insurance advisors were interested to become mutual
fund advisor and want to add up a new product in their
selling basket. The people who were older, were afraid to
appear in any kind of exam. They usually said that they
didn’t have time for the training as made mandatory by


 Most leads complain about its fees that are Rs.

8000/Rs.6900. they said that it is too much amount to
complete AMFI exam and become NJ partner. I know it is
nothing in spite of our company gives them.
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Consideration can be made to reduce the fee to stop de

motivating from taking our services.

 NJ has almost 25% market stake of mutual fund advisor

(almost 15,000 MF advisors are partner of NJ. whereas
total MF advisors are 75,000 in India.) but NJ is lacking
somewhere in its marketing. NJ needs to advertise its
brand to gain the image of a mutual fund distributer in
the minds of insurance advisors who are more concern
with RR and other mutual fund distributors.


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