S.

K SOMAIYA COLLEGE OF ARTS, SCIENCE & COMMERCE

VIDYAVIHAR (EAST), MUMBAI - 400077

PROJECT ON:
STUDY OF MUTUAL FUNDS IN INDIA WITH REFERENCE TO UTI LTD.

MASTERS OF COMMERCE
(BANKING & FINANCE)

PART 1 (SEM)
(2015-2016)

Submitted:
In Partial Fulfillment of the requirements
For the Award of the Degree of
MASTERS OF COMMERCE
( BANKING & FINANCE )
BY
KUNJAL M SHAH
ROLL NO : 44

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DECLARATION

I KUNJAL M SHAH

student of class Mcom

(BANKING & FINANCE) PART 1 (SEM-1), ROLL NO. 44, academic year
2015-2016 Studying at S.K. SOMAIYA COLLEGE OF ARTS, SCIENCE AND
COMMERCE, hereby declare that the work done on the project Entitled
STUDY OF MUTUAL FUNDS IN INDIA WITH REFERENCE TO UTI
LTD. is true and original and any Reference used in this project is duly
acknowledged.

DATE:

PLACE: MUMBAI
SIGNATURE OF STUDENT
( KUNJAL M SHAH )

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CERTIFICATE
This is to certify that MISS KUNJAL SHAH, studying in Mcom (BANKING &
FINANCE) PART 1 (SEM-1), ROLL NO. 44, academic year 2015-2016 at
S.K.SOMAIYA COLLEGE OF ARTS, SCIENCE & COMMERCE has
completed the project on STUDY OF MUTUAL FUNDS IN INDIA WITH
REFERENCE TO UTI LTD. under the guidance of Proff. BOSCO PETER
The information submitted herein is true and original to the best of my
knowledge.

____________________

Proff. BOSCO PETER

[PROJECT GUIDE]

____________________
EXTERNAL EXAMINER

___________________

DR. SANGEETA KOHLI

[PRINCIPAL]

___________________
MR. RAVIKANT
[CO-ORDINATOR]

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DECLARATION BY GUIDE
I, the undersigned Prof. has guided MISS KUNJAL SHAH ROLL NO. 44 for
her project. She has completed the project on STUDY OF MUTUAL FUNDS IN
INDIA WITH REFERENCE TO UTI LTD. successfully.
I, hereby declare that information provided in this project is true as per the
best of my knowledge.

Thank You,
Yours Faithfully,

(Prof.
________)
Project
Guide

ACKNOWLEDGEMENT

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It gives me immense pleasure to present a project on STUDY OF MUTUAL

FUNDS IN INDIA WITH REFERENCE TO UTI LTD. As a Mcom student it
is a great honour to undergo a project work at an graduate level and I would like to
thank the University of Mumbai for giving me such a golden opportunity.
I am eternally grateful to almighty god for giving me the spirit to put in my best
effort towards my project. I owe my sincere gratitude to DR. SANGEETA
KOHLI, the principal of our college. I am also thankful to my project guide MR.
BOSCO PETER for his valuable guidance and for providing an insight to the
subject.
I am also obliged to the library staff of S.K..Somaiya College for the numerous
books made me available for the handy reference.
Although, I have taken every care to check mistake and misprint yet it is difficult
to claim perfection. Any error, omission and suggestion brought to my notice, will
be thankfully acknowledged by me.

INDEX
SR
NO.

CHAPTER NAME
1 Mutual Fund-An Introduction

PAGE
NO.
7-13
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1.1 Introduction
1.2 Benefits of Mutual Fund
1.3 Limitations of Mutual Fund

8
10
11

1.4 Rights of Unit Holders

13

2 Types of Mutual Funds

14-18

3 Investment Strategies of Mutual Fund

3.1 Investment Strategies
3.2 Risk Return Analysis
3.3 Mutual Fund Asset Type

19-22
20
20
21

3.4 Working of Mutual Fund

4 Organisational Structure & Regulation of Mutual Fund
4.1 Organisational Structure of Mutual Fund
4.2 Regulations of Mutual Fund
4.3 Players of Mutual Fund
5 UTI - Unit Trust of India

22
23-30
24
26
30
31-40

Conclusion

41

Biblography

42

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1. MUTUAL FUND AN
INTRODUCTION

1.1 INTRODUCTION
Mutual fund is a trust that pools the savings of a number of investors who share a common
financial goal. This pool of money is invested in accordance with a stated objective. The joint
ownership of the fund is thus Mutual, i.e. the fund belongs to all investors. The money thus
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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 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. A Mutual Fund
is an investment tool that allows small investors access to a well-diversified portfolio of equities,
bonds and other securities. Each shareholder participates in the gain or loss of the fund. Units are
issued and can be redeemed as needed. The funds Net Asset value (NAV) is determined each day.
Investments in securities are spread across a wide cross-section of industries and sectors and
thus the risk is reduced. Diversification reduces the risk because all stocks may not move in the
same direction in the same proportion at the same time. Mutual fund issues units to the investors
in accordance with quantum of money invested by them. Investors of mutual funds are known as
unit holders.
Mutual funds are considered as one of the best available investments as compare to others
they are very cost efficient and also easy to invest in, thus by pooling money together in a mutual
fund, investors can purchase stocks or bonds with much lower trading costs than if they tried to
do it on their own. But the biggest advantage to mutual funds is diversification, by minimizing
risk & maximizing returns.
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.

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When an investor subscribes for the units of a mutual fund, he becomes part owner of the assets
of the fund in the same proportion as his contribution amount put up with the corpus (the total
amount of the fund). Mutual Fund investor is also known as a mutual fund shareholder or a unit
holder.
Any change in the value of the investments made into capital market instruments (such as shares,
debentures etc) is reflected in the Net Asset Value (NAV) of the scheme. NAV is defined as the
market value of the Mutual Fund scheme's assets net of its liabilities. NAV of a scheme is
calculated by dividing the market value of scheme's assets by the total number of units issued to
the investors.

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1.2 Benefits of investing in Mutual Funds:

There are several benefits from investing in a Mutual Fund:
Small investments: Mutual funds help you to reap the benefit of returns by a portfolio
spread across a wide spectrum of companies with small investments.
Professional Fund Management: Professionals having considerable expertise,
experience and resources manage the pool of money collected by a mutual fund. They
thoroughly analyse the markets and economy to pick good investment opportunities.
Spreading Risk: An investor with limited funds might be able to invest in only one or
two stocks/bonds, thus increasing his or her risk. However, a mutual fund will spread its
risk by investing a number of sound stocks or bonds. A fund normally invests in
companies across a wide range of industries, so the risk is diversified.
Transparency: Mutual Funds regularly provide investors with information on the value
of their investments. Mutual Funds also provide complete portfolio disclosure of the
investments made by various schemes and also the proportion invested in each asset type.
Choice: The large amount of Mutual Funds offer the investor a wide variety to choose
from. An investor can pick up a scheme depending upon his risk/ return profile.
Regulations: All the mutual funds are registered with SEBI and they function within the
provisions of strict regulation designed to protect the interests of the investor.
Flexibility: Through features such as Systematic Investment Plans (SIP), Systematic
Withdrawal Plans (SWP) and dividend reinvestment plans, you can systematically invest
or withdraw funds according to your needs and convenience.
Return Potential: Over a medium to long term, Mutual Funds have the potential to
provide a higher return as they invest in a diversified basket of selected securities.

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 Diversification: Mutual Funds invest in a number of companies across a broad cross

section of industries and sectors. This diversification reduces the risk because seldom do
all stocks decline at the same time and in the same proportion. You achieve this
diversification through a Mutual Fund with far less money than you can do on your own.

1.3 Limitation of Mutual Fund:

Entry and exit costs: Mutual Funds are a victim of their own success. When a large
body like a fund invests in shares, the concentrated buying or selling often results in
adverse price movements i.e. at the time of buying, the fund ends up paying a higher
price and while selling it realizes a lower price. For obvious reasons, this problem is
even more severe for funds investing in small capitalization stocks. However, given the
large size of the debt market, excluding UTI, most debt funds do not face this problem.

Waiting time before investment: It takes time for a Mutual Fund to invest money.
Since it is difficult to invest all funds in one day, there is dome money waiting to be
invested. Further, there may be a time lag before investment opportunities are identified.
This ensures that the fund under performs the index. For open-ended funds, there is the
added problem of perpetually keeping some money in liquid assets to meet redemption.
The problem of impracticability of quick investments is likely to be reduced to some
extent with the introduction of index futures.

Fund management costs: The costs of the fund management process are deducted from
the fund. This includes marketing and initial costs deducted at the time of entry itself,
called load. Then there is the annual asset management fee and expenses, together
called the expense ratio.

Usually, the former is not counted while measuring

performance, while the later is. A standard 2% expense ratio means that, everything else
being equal, the Fund manager under performs the benchmark index by an equal amount.

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 Professional Management- Some funds doesnt perform in neither the market, as their
management is not dynamic enough to explore the available opportunity in the market,
thus many investors debate over whether or not the so-called professionals are any better
than mutual fund or investor himself, for picking up stocks.
Costs The biggest source of AMC income, is generally from the entry & exit load
which they charge from an investors, at the time of purchase. The mutual fund industries
are thus charging extra cost under layers of jargon.
Dilution - Because funds have small holdings across different companies, high returns
from a few investments often don't make much difference on the overall return. Dilution
is also the result of a successful fund getting too big. When money pours into funds that
have had strong success, the manager often has trouble finding a good investment for all
the new money.

Taxes - when making decisions about your money, fund managers don't consider your
personal tax situation. For example, when a fund manager sells a security, a capital-gain
tax is triggered, which affects how profitable the individual is from the sale. It might
have been more advantageous for the individual to defer the capital gains liability.

1.4 Rights of Unit holders:

As a unitholder in a Mutual Fund scheme coming under the SEBI (Mutual Funds) Regulations,
you are entitled to:

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Receive unit certificates or statements of accounts confirming your title within 30 days
from the date of closure of the subscription under open-ended schemes or within 6 weeks

from the date your request for a unit certificate is received by the Mutual Fund.
Receive information about the investment policies, investment objectives, financial

position and general affairs of the scheme.

Receive dividend within 30 days of their declaration and receive the redemption or

repurchase proceeds within 10 working days from the date of redemption or repurchase.
Vote in accordance with the Regulations to:
Change the Asset Management Company.
Wind up the schemes.
Receive communication from the Trustees about change in the fundamental attributes of
any scheme or any other changes which would modify the scheme and affect the interest
of the unitholders and to have option to exit at prevailing Net Asset Value without any

exit load in such cases.

Inspect the documents of the Mutual Funds specified in the schemes offer document.

In addition to your rights, you can expect the following from Mutual Funds:

To publish their NAV, in accordance with the regulations: daily, in case of open-ended

schemes and once a week, in case of close-ended schemes.

To disclose your schemes entire portfolio twice a year, unaudited financial results half
yearly and audited annual accounts once a year. In addition many mutual funds send out

newsletters periodically.
To adhere to a Code of Ethics which require that investment decisions are taken in the
best interest of the unitholders.

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2.TYPES OF MUTUAL FUNDS

TYPES OF MUTUAL FUNDS

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Mutual funds can be classified as follow:

BASED ON THEIR STRUCTURE :
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Open-ended funds: Investors can buy and sell the units from the fund, at any point of
time.

Close-ended funds: These funds raise money from investors only once. Therefore, after
the offer period, fresh investments can not be made into the fund. If the fund is listed on a
stocks exchange the units can be traded like stocks (E.g., Morgan Stanley Growth Fund).
Recently, most of the New Fund Offers of close-ended funds provided liquidity window
on a periodic basis such as monthly or weekly. Redemption of units can be made during
specified intervals. Therefore, such funds have relatively low liquidity.
BASED ON THEIR INVESTMENT OBJECTIVES :

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:
i) Index funds- In this case a key stock market index, like BSE Sensex or Nifty is tracked.

Their portfolio mirrors the benchmark index both in terms of composition and individual stock
weightages.
ii) Equity diversified funds- 100% of the capital is invested in equities spreading across
different sectors and stocks.
iii) Dividend yield funds- it is similar to the equity diversified funds except that they invest
in companies offering high dividend yields
iv) Thematic funds- Invest 100% of the assets in sectors which are related through some
theme.
e.g. -An infrastructure fund invests in power, construction, cements sectors etc.

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v) Sector funds- Invest 100% of the capital in a specific sector. e.g. - A banking sector
fund will invest in banking stocks.
vi) ELSS- Equity Linked Saving Scheme provides tax benefit to the investors.

Balanced fund: Their investment portfolio includes both debt and equity. As a result, on
the risk-return ladder, they fall between equity and debt funds. Balanced funds are the
ideal mutual funds vehicle for investors who prefer spreading their risk across various
instruments. Following are balanced funds classes:
i) Debt-oriented funds -Investment below 65% in equities.
ii) Equity-oriented funds -Invest at least 65% in equities, remaining in debt.

Debt fund: They invest only in debt instruments, and are a good option for investors
averse to idea of taking risk associated with equities. Therefore, they invest exclusively in
fixed-income instruments like bonds, debentures, Government of India securities; and
money market instruments such as certificates of deposit (CD), commercial paper (CP)
and call money. Put your money into any of these debt funds depending on your
investment horizon and needs.
i) Liquid funds- These funds invest 100% in money market instruments, a large portion

being invested in call money market.

ii) Gilt funds - They invest 100% of their portfolio in government securities of and T-bills.
iii) Floating rate funds - Invest in short-term debt papers. Floaters invest in debt instruments
which have variable coupon rate.
iv) Arbitrage fund- They generate income through arbitrage opportunities due to mis-pricing
between cash market and derivatives market. Funds are allocated to equities, derivatives and

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money markets. Higher proportion (around 75%) is put in money markets, in the absence of
arbitrage opportunities.
v) Gilt funds - They invest 100% of their portfolio in long-term government securities.
vi) Income funds - Typically, such funds invest a major portion of the portfolio in long-term
debt papers.
vii) MIPs- Monthly Income Plans have an exposure of 70%-90% to debt and an exposure of
10%-30% to equities.
viii)FMPs- fixed monthly plans invest in debt papers whose maturity is in line with that of the
fund.

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3. INVESTMENT STRATEGIES

3.1 INVESTMENT STRATEGY

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1. Systematic Investment Plan: under this a fixed sum is invested each month on a fixed date of
a month. Payment is made through post dated cheques or direct debit facilities. The investor gets
fewer units when the NAV is high and more units when the NAV is low. This is called as the
benefit of Rupee Cost Averaging (RCA)
2. Systematic Transfer Plan: under this an investor invest in debt oriented fund and give
instructions to transfer a fixed sum, at a fixed interval, to an equity scheme of the same mutual
fund.
3. Systematic Withdrawal Plan: if someone wishes to withdraw from a mutual fund then he
can withdraw a fixed amount each month.

3.2 RISK V/S. RETURN:

3.3 MUTUAL FUND ASSETS TYPE :

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Worldwide Mutual Fund Assets by type of fund:

If we see the worldwide Mutual fund Assets by the type of fund for the third
quarter in 2008, then it is seen that the major investments

were in equities

i.e. 40% of the total investments.

Worldwide Mutual Fund Assets by Region:

By region, 55 percent of worldwide assets were in the Americas in the third
quarter of 2008, 34 percent were in Europe and 11 percent in Africa and
Asia/Pacific.

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3.4 WORKING OF MUTUALFUND :

A mutual fund is just the connecting bridge or a financial intermediary that allows a
group of investors to pool their money together with a predetermined investment objective. The
mutual fund will have a fund manager who is responsible for investing the gathered money into
specific securities (stocks or bonds). When you invest in a mutual fund, you are buying units or
portions of the mutual fund and thus on investing becomes a shareholder or unit holder of the
fund.
Mutual funds are considered as one of the best available investments as compare to others
they are very cost efficient and also easy to invest in, thus by pooling money together in a mutual
fund, investors can purchase stocks or bonds with much lower trading costs than if they tried to
do it on their own. But the biggest advantage to mutual funds is diversification, by minimizing
risk & maximizing returns.
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

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4. ORGANISATIONAL STRUCURE
AND REGULATIONS OF MUTUAL
FUNDS

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4.1 ORGANISATIONAL STRUCURE OF MUTUAL FUNDS :

The Mutual fund organization as per the SEBI formation and necessary formation is needed for
sooth activities of the companies and achieved the desire objectives.Transfer agent and custodian
play role for dematerialization of the fund and unit holders hold the account statement, but
custody of the unit is on particular Asset Management Company. Custodian holds all the fund
units on dematerialization form. Sponsor had decided the responsibility of custodian when
investor to purchase the fund and to sell the unit. Application forms, transaction slip and other
requests received by transfer agent, middle men between investors and Assts Management co.

THE STRUCTURE OF MUTUAL FUND CONSISTS OF:

SPONSOR
Sponsor is the person who acting alone or in combination with another body corporate
establishes a mutual fund. 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 Fund) Regulations, 1996. The sponsor is not responsible or
liable for any loss or shortfall resulting from the operation of the Schemes beyond the initial
contribution made by it towards setting up of the Mutual Fund.

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TRUST
The Mutual Fund is constituted as a trust in accordance with the provisions of the Indian Trusts
Act, 1882 by the Sponsor. The trust deed is registered under the Indian Registration Act, 1908.

TRUSTEE
Trustee is usually a company (corporate body) or a Board of Trustees (body of individuals). The
main responsibility of the Trustee is to safeguard the interest of the unit holders and ensure that
the AMC functions in the interest of investors and in accordance with the Securities and
Exchange Board of India (Mutual Funds) Regulations, 1996, the provisions of the Trust Deed
and the Offer Documents of the respective Schemes. At least 2/3rd directors of the Trustee are
independent directors who are not associated with the Sponsor in any manner.

ASSET MANAGEMENT COMPANY (AMC)

The AMC is appointed by the Trustee as the Investment Manager of the Mutual Fund. 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 cores at all times.

REGISTRAR AND TRANSFER AGENT

The AMC if so authorized by the Trust Deed appoints the Registrar and Transfer Agent to the
Mutual Fund. The Registrar processes the application form, redemption requests and dispatches
account statements to the unit holders. The Registrar and Transfer agent also handles
communications with investors and updates investor records.

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4.2 REGULATION OF MUTUAL FUNDS :

Role of SEBI
(Securities exchange board of India)
There was no uniform regulation of the mutual funds industry till a few years ago. The UTI was
regulated by a special Act of Parliament while funds promoted by public sector banks were
subject to RBI Guidelines of July 1989. The Securities & Exchange Board of India (SEBI) was
formed in 1993 as a capital market regulator. One of its responsibilities was to regulate the
mutual fund industry and it came up with comprehensive regulations for the industry in 1993.
The rules for the formation, administration and management of mutual funds in India were
clearly laid down. Regulations also prescribed disclosure requirements.
The regulations were thoroughly reviewed and re-notified in December 1996. The revised
guidelines tighten the accounting and disclosure requirements in line with recommendations of
The Expert Committee on Accounting Policies, Net Asset Values and Pricing of Mutual Funds.
The SEBI (Mutual Funds) Regulations, 1996 have been further amended in 1997, 1998 and
1999. Today, all mutual funds are regulated by SEBI. Efforts have been made to bring UTI
schemes under SEBI's ambit with the result that all schemes, with the exception of Unit 64, are
now regulated by the capital market regulator.

SEBI Guideline of Mutual Fund

SEBI Regulation Act 1996
Establishment of a Mutual Fund:
In India mutual fund play the role as investment with trust, some of the formalities laid down by
the SEBI to be establishment for setting up a mutual fund. As the part of trustee sponsor the
mutual fund, under the Indian Trust Act, 1882, under the trustee company are represented by a
board of directors. Board of Directors is appoints the AMC and custodians. The board of trustees
made relevant agreement with AMC and custodian. The launch of each scheme involves inviting
the public to invest in it, through an offer documents.
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Depending on the particular objective of scheme, it may open for further sale and repurchase of
units, again in accordance with the particular of the scheme, the scheme may be wound up after
the particular time period.
1. The sponsor has to register the mutual fund with SEBI
2. To be eligible to be a sponsor, the body corporate should have a sound track record and a
general reputation of fairness and integrity in all his business transactions.

Role of AMFI
(Association Mutual Fund in India)
AMFI, the apex body of all the registered asset management companies was incorporated on
August 22, 1995 as a nonprofit organization. All the asset management companies that have
launched mutual fund schemes are its members. One of the objectives of AMFI is to promote
investors' interest by defining and maintaining high ethical and professional standards in the
mutual fund industry. The AMFI code of ethics sets out the standards of good practices to be
followed by the asset management companies in their operations and in their dealings with
investors, intermediaries and public. AMFI code has been drawn up to encourage adherence
to standards higher than those prescribed by the regulations for the benefits of investors in
the mutual fund industry.
The members of Asset Management Companies (AMC) have always carried out the
responsibility of introducing new mutual fund schemes under the governance and guidelines
of its Board of Directors. Association of Mutual Funds in India has played a significant role
in creating a healthy and professional market for mutual funds. It has elevated the standard of
the mutual fund investment patterns by introducing more beneficiary schemes to attract more
investors. The Association of Mutual Funds is also the main governing body of all Asset
Management Companies (AMC). The Association of Mutual Funds in India (AMFI) has
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been registered with the Securities and Exchange Board of India (SEBI). The main principle
religiously followed by AMFI is to protect and promote the mutual funds along with the
investors or shareholders.

The Association of Mutual Funds in India (AMFI) is dedicated to developing the Indian
Mutual Fund Industry on professional, healthy and ethical lines and to enhance and maintain
standards in all areas with a view to protecting and promoting the interests of mutual funds and
their unit holders.
AMFI working group on Best Practices for sales and marketing of Mutual Funds under the
Chairmanship of Shri B. G. Daga, Former Executive Director of Unit Trust of India with Shri
Vivek Reddy of Pioneer ITI, Shri Alok Vajpeyi of DSP Merrill Lynch, Shri Nikhil Khattau of
Sun F & C and Shri Chandrashekhar Sathe, Formerly of Kotak Mahindra Mutual Fund has
suggested formulation of guidelines and code of conduct for intermediaries and this work has
been ably done by a sub-group consisting of Shri B. G. Daga and Shri Vivek Reddy.

Objectives of AMFI:

To define and maintain high professional and ethical standards in all areas of operation of
mutual fund industry.

To recommend and promote best business practices and code of conduct to be followed
by members and others engaged in the activities of mutual fund and asset management including
agencies connected or involved in the field of capital markets and financial services.

To interact with the Securities and Exchange Board of India (SEBI) and to represent to
SEBI on all matters concerning the mutual fund industry.

To represent to the Government, Reserve Bank of India and other bodies on all matters
relating to the Mutual Fund Industry.

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To develop a cadre of well trained Agent distributors and to implement a programme of

training and certification for all intermediaries and others engaged in the industry.

To undertake nation wide investor awareness programme so as to promote proper

understanding of the concept and working of mutual funds.

To disseminate information on Mutual Fund Industry and to undertake studies and

research directly and/or in association with other bodies.

To take regulate conduct of distributors including disciplinary actions (cancellation of

ARN) for violations of Code of Conduct.

To protect the interest of investors/unit holders.

Important aspects of AMFI:

AMFI provides professionalism and a proper balance in the mutual fund industry.

It promotes the highly-efficient business practices as well as the code of conduct in

the mutual fund industry among its members and those who are involved in mutualfund
investments.

AMFI is registered with SEBI and follows its suggestions while executing its
activities.

AMFI also represents the Government of India, the Reserve Bank of India and other
related higher authority bodies in the mutual fund operations.

It also provides training programs to hone the skills of those who are involved in
mutual fund investments and also develops a team of efficient and skilled agents.
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AMFI also carries out various campaigns and awareness programs to inform the
individuals about the basic concept of mutual fund investments.

4.3 PLAYERS OF MUTUAL FUND :

Fund Managers

Fund managers, assigned by management company, are responsible for making investment in
accordance with the mutual funds objective and investment policy specified in the constitutive
documents. Fund managers are required to be approved by the SEC. Approval criteria include
relevant knowledge and experience, knowledge on laws, professional ethic and standards and no
subject to statutory disqualification.

Fund Supervisors
Mutual fund supervisor (performing the roles equivalent to those of a trustee) is entrusted with
fiduciary duties in that it shall act for the best interest of unitholders. Mutual fund supervisor
shall ensure that the investment of mutual fund follows the constitutive documents approved by
the SEC, confirm that the net asset value of the mutual fund is valued properly, hold in safekeeping, administer the movement of and register mutual fund assets to ensure accuracy, monitor
the investment of mutual fund and file a legal action in court on behalf of unitholders in case of
noncompliance caused by the management company. Mutual fund supervisor shall be a financial
institution registered with the SEC. The registration criteria are based on fit & proper
principles. Fund supervisor shall not be connected to the management company either directly or
indirectly nor have an interest in fund management which may jeopardize its independence.
Custodians
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Assigned by the management company or customer, a custodian is responsible for holding in

safe-keeping, administering the movement of, registering and carrying out inventory control to
assure the accuracy for the fund assets. In addition, custodian shall collect information on income
from such assets and prepare a report for the management company. Custodian shall be fit &
proper and approved by the SEC.

5. UNIT TRUST OF INDIA

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UNIT TRUST OF INDIA MUTUAL FUND

'Unit Trust of India was created by the UTI Act passed by the Parliament in 1963. For
more than two decades it remained the sole vehicle for investment in the capital market by the
Indian citizens. In mid-1980's public sector banks were allowed to open mutual funds. The real
vibrancy and competition in the MF industry came with the setting up of the Regular SEBI and
its laying down the MF Regulations in 1993. UTI maintained its pre-eminent place till 2001,
when a massive decline in the market indices and negative investor sentiments after Ketan
Parekh scam created doubts about the capacity of UTI to meet its obligations to the investors.
This was further compounded by two factors; namely, its flagship and largest scheme US 64 was
sold and re-purchased not at intrinsic NAV but at artificial price and its Assured Return Schemes
had promised returns as high as 18% over a period going up to two decades.
In order to distance Government from running a mutual fund the ownership was
transferred to four institutions; namely SBI, LIC, BOB and PNB, each owning 25%. UTI lost its
market dominance rapidly and by end of 2005, when the new share-holders actually paid the
consideration money to Government its market share had come down to close to 10%.
A new board was constituted and a new management inducted. Systematic study of its
problems role and functions was carried out with the help of a reputed international consultant.
Once again UTI has emerged as a serious player in the industry. Some of the funds have won
famous awards, including the Best Infra Fund globally from Lipper. UTI has been able to
benchmark its employee compensation to the best in the market.
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Besides running domestic MF Schemes UTI AMC is also a registered portfolio manager
under the SEBI (Portfolio Managers) Regulations.
This company runs two successful funds with large international investors being active
participants. UTI has also launched a Private Equity Infrastructure Fund along with HSH Nord
Bank of Germany and Shinsei Bank of Japan.

Company profile :
Vision :
To be the most Preferred Mutual Fund.

Mission :

The most trusted brand, admired by all stakeholders.

The largest and most efficient money manager with global presence.
The best in class customer service provider.
The most preferred employer.
The most innovative and best wealth creator.
A socially responsible organization known for best corporate governance.

Assets Under Management: UTI Asset Management Co. Ltd

Sponsor:

State Bank of India

Bank of Baroda
Punjab National Bank
Life Insurance Corporation of India

Trustee: UTI Trustee Co. Limited.

Reliability
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UTIMF has consistently reset and upgraded transparency standards. All the branches,
UFCs and registrar offices are connected on a robust IT network to ensure cost-effective quick
and efficient service. All these have evolved UTIMF to position as a dynamic, responsive,
restructured, efficient and transparent entity, fully compliant with SEBI regulations.

UTI MUTUAL FUND

When started?

Established in 1964.
1st Mutual Fund Company
in India.

How they came into

business?

Board of director

By the UTI Act passed by

the parliament in 1963.
Mr Leo Puri (Managing
director)
Mr.P.N.Venkatachalam

Minimum Investment

Rs.1000

Investment

Equity
Finanicial service:1622%
Energy: 12-18%
Consumer Goods:8-14%

Main Funds

UTI Dividend Yield Fund.

UTI Opportunity Fund.

Type of Fund Offered

Equity Fund,Index
Fund,Asset Fund,Balanced
Fund, Debt Fund.

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Fund managers
Mr. Anoop Bhaskar
Mr. Amandeep Chopra
Mr. Sanjay Dongre
Mr. Manish Joshi
Ms. Swati Kulkarni
Ms.Shilpita Guha
No. of schemes offered
Distribution

107 Schemes

Tie-up with post

offices branches.

UTI outlet and

branches.

Subsidiaries
UTI Venture
UTI Venture is leading private equity firm. Focused on growth capital, they propel the ambitions
of passionate Indian entrepreneurs, while unlocking superior returns for our investors. Our
demonstrated track record of successful investments, led by an experienced management team,
positions our funds among top performers in India.

UTI International Ltd

UTI International Ltd (UTI IL) is a 100% subsidiary of UTI Asset Management Company Ltd.
(UTI AMC). UTI AMC is the largest retail Asset Management Company in India with more
than 9 million investor accounts and Assets under Management of close to US$ 9.5bn
(September 30, 2008). UTI International Ltd. is responsible for all international business
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activities of UTI AMC. The Assets under Management (AUM) of UTI International Ltd stands at
USD 615 mn as on September 30, 2008.

UTI RSL (Retirement Solutions Limited)

UTI RSL has been set up to carry out the operations as Pension Fund as directed by the Board of
Trustees of the New Pension System Trust, set up under the Indian Trust Act, 1882, and to
undertake wholesale asset management as prescribed by the Government.

Awards
UTI MF CNBC Award 2009.
UTI Mutual Fund sweeps ICRA mutual fund Award 2009.
UTI MF wins the Best Debt Fund House Award.
Lipper Fund Awards09-UTI Mahila Unit-5 yrs.
Lipper Fund Awards09-UTI Mahila Unit-3 yrs.
Lipper Fund Awards 2007.
CNBC-TV18-BNP Par-ibas Mutual Fund of the year Award 2006.
CNBC-TV18-BNP Par-ibas Mutual Fund of the year Award 2004
ICRA online Mutual Fund Award: UTI NIFTY INDEX FUND won the award for
the year 2004.
CNBC India Mutual Fund of the Year Award 2003.
UTI Nifty Index Fund wins Gold at ICRA Online 2005.
UTI Dynamic Equity Fund wins Silver at ICRA Online 2005.
UTI Growth Value Fund has been ranked by CRISIL 2004.

PRODUCTS OF UTI MUTUAL FUND :

Unit Scheme (An open-ended equity scheme)

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UTI - Master Plus Unit Scheme (An open-ended equity scheme)

UTI - Equity Fund (An open-ended equity scheme)
UTI - Top 100 Fund (An open-ended equity scheme)
UTI - MNC Fund (An open-ended equity scheme)
UTI - Master Value Fund (An open-ended equity oriented value fund)
UTI - Pharma & Healthcare Fund (An open-ended equity scheme)
UTI - Energy Fund (An open-ended equity scheme)
UTI - Services Industries Fund (An open-ended equity scheme)
UTI - Equity Tax Savings Plan (An open-ended ELSS with a lock-in period of 3 years)
UTI - Nifty Index Fund (An open-ended passive Index Fund tracking the CNX Nifty

Index)
UTI - Mid Cap Fund (An open-ended equity scheme)
UTI - Infrastructure Fund (An open-ended equity scheme)
UTI-Transportation and Logistics Fund (An open-ended equity scheme)
UTI - Banking Sector Fund (An open-ended equity scheme)
UTI - Dividend Yield Fund (An open-ended equity scheme)
UTI - Opportunities Fund (An open-ended equity scheme)
UTI - Leadership Equity Fund (An open-ended equity scheme)
UTI - Contra Fund (An open-ended equity scheme)
UTI - India Lifestyle Fund (An open-ended equity scheme)
UTI-Wealth Builder Fund Series II (An open-ended equity scheme)
UTI - Balanced Fund (An open-ended Balanced Fund)
UTI - G-SEC Fund (An open-ended dedicated gilt fund)
UTI - Gilt Advantage Fund (An open-ended Gilt Scheme)
UTI - Bond Fund (An open ended pure debt fund)
UTI - Short Term Income Fund (An open-ended income scheme)
UTI - Treasury Advantage Fund (An open-ended Income Scheme)
UTI - Floating Rate Fund (An open-ended Income Scheme)
UTI - Dynamic Bond Fund (An open ended income scheme)
UTI - Spread Fund (An open-ended equity fund investing in a mix of equity, equity

derivatives, debt and money market instruments)

UTI Credit Opportunity Fund (An open-ended Income scheme)
Fixed Maturity Plans (FMPs), Fixed Term Income Funds (FTIFs), Fixed Income Interval

Funds (FIIFs) & Interval Funds

UTI - MIS-Advantage Plan (An open-ended income scheme)
UTI - Monthly Income Scheme (An open-ended debt oriented scheme)
UTI - Unit Linked Insurance Plan (An open-ended tax saving cum insurance scheme)
UTI- Unit Scheme for Charitable & Religious Trusts & Registered Societies (UTI-

C.R.T.S) (An open-ended income scheme)

UTI -Childrens Career Balanced Plan (An open-ended scheme)
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UTI-Retirement Benefit Pension Fund (An open-ended notified tax saving -cumpension

scheme)
UTI - Mahila Unit scheme (An open-ended debt oriented scheme)
UTI - CCP Advantage Fund (An open-ended scheme)
UTI - Liquid Cash Plan (An open-ended income scheme)
UTI - Money Market Fund (An open-ended Money Market Mutual Fund)

ASSET UNDER MANAGEMENT OF UTI LTD. WITH OTHER CO.

Assets under management (Rs.Cr)
Mutual Funds
HDFC Mutual Fund

June 2015

September
2015

Change

%
Change

165,013

170,838

5,824

3.53

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ICICI Prudential Mutual Fund

155,522

164,629

9,106

5.86

Reliance Mutual Fund

144,693

152,919

8,226

5.69

Birla Sun Life Mutual Fund

125,502

133,404

7,901

6.30

UTI Mutual Fund

92,730

104,077

11,347

12.24

SBI Mutual Fund

83,693

88,628

4,935

5.90

Franklin Templeton Mutual Fund

74,312

77,328

3,016

4.06

IDFC Mutual Fund

54,498

56,774

2,276

4.18

Kotak Mahindra Mutual Fund

48,077

56,511

8,434

17.54

DSP BlackRock Mutual Fund

36,036

37,339

1,302

3.61

Axis Mutual Fund

28,365

31,789

3,425

12.07

Tata Mutual Fund

28,045

28,857

812

2.90

Deutsche Mutual Fund

20,720

25,329

4,609

22.24

L&T Mutual Fund

22,213

24,280

2,067

9.31

Sundaram Mutual Fund

20,996

22,124

1,128

5.37

Religare Invesco Mutual Fund

19,519

21,594

2,075

10.63

JM Financial Mutual Fund

11,676

15,858

4,182

35.82

JPMorgan Mutual Fund

14,684

12,455

-2,229

-15.18

LIC NOMURA Mutual Fund

11,133

11,157

24

0.21

Baroda Pioneer Mutual Fund

7,225

9,532

2,307

31.93

HSBC Mutual Fund

7,880

7,843

-37

-0.47

Canara Robeco Mutual Fund

7,078

7,213

135

1.90

Goldman Sachs Mutual Fund

7,775

7,132

-643

-8.26

IDBI Mutual Fund

5,556

7,016

1,460

26.27

PRINCIPAL Mutual Fund

6,479

6,624

144

2.23

Indiabulls Mutual Fund

3,691

5,196

1,505

40.77

Taurus Mutual Fund

4,188

4,656

468

11.18

BNP Paribas Mutual Fund

4,138

4,638

499

12.07

Motilal Oswal Mutual Fund

2,744

3,928

1,185

43.18

BOI AXA Mutual Fund

2,332

2,881

549

23.54

Union KBC Mutual Fund

2,675

2,672

-3

-0.12

Mirae Asset Mutual Fund

1,981

2,427

446

22.50

DHFL Pramerica Mutual Fund

2,125

2,366

241

11.33

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Edelweiss Mutual Fund

1,148

1,573

424

36.95

Peerless Mutual Fund

854

860

0.77

Quantum Mutual Fund

594

612

18

3.03

PPFAS Mutual Fund

592

604

12

2.06

IIFL Mutual Fund

399

412

13

3.21

Escorts Mutual Fund

279

300

21

7.47

Sahara Mutual Fund

134

124

-10

-7.66

Shriram Mutual Fund

33

35

4.66

1,227,327

1,314,532

87,204

6.63

Total

Assets under management includes:

Capital raised from investors;

Capital belonging to the principals of the fund management firm.

For example, if fund managers contribute $

CONCLUSION

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Mutual fund has become one of the important sources for investing. It is quite likely that a more
efficient portfolio can be constructed directly from funds. Thus, the two-step process of choosing
an asset allocation based on the information about benchmark indexes and then choosing funds
in each category may be one of the best realistically attainable approaches. To use this approach
to portfolio selection effectively, investors would benefit from estimates of future asset returns,
risks and correlations, as well as from fund managements disclosure of future asset exposures
and appropriate benchmarks.
It has been a great opportunity for me to get a first experience of Mutual Funds. My study is to
get the feel of how the work is carried out in relation to funds portfolio aspect. I got an
opportunity in relation to the documentation and also the portfolio analysis that have been
carrying out in facilitating the investor and the fund manager.

BIBLOGRAPHY

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Websites:
www.amfiindia.com
www.utimf.com
www.mutualfundindia.com
www.mutualfunds.about.com
www.utiamc.com

Books:
Fact sheet of UTI mutual fund
Understanding Mutual Fund- Sunita Abraham & Uma Shashikant

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