A

PROJECT REPORT

ON
“A COMPARATIVE STUDY ON ONE TIME
INVESTMENT AND SYSTEMATIC INVESTMENT
PLANS IN MUTUAL FUND”

Under the Guidance Of

Industry Guide: Internal Guide:
Mr. Nitin Ambardar Mr. Sunil Madan
BY
Devendra Singh Yadav

Batch:- 2017 - 2019

 ACKNOWLEDGEMENT

I, Devendra Singh Yadav, student of MBA in Doon Business

School, Dehradun is highly grateful to all those who guided me in
completing this project.
First of all , I would like to pay my heartiest thanks to entire family of
Bajaj Capital ltd., especially Mr. Nitin Ambardar (senior manager) ,
who provided me such a wonderful opportunity to do Summer
Training and provided their valuable suggestions in understanding the
work of Research Project.
I would like to thank my internal guide Mr. Sunil Madan and all the
faculty members of DBS, Dehradun, who gave me their useful tips
and suggestions regarding the project.

Devendra Singh Yadav

MBA 3rd semester

Doon Business School, Dehradun

Date:
 INDEX

 Executive summary…………………………………….
(Introduction of the company)

 Internship plan…………………………………………..
(Profile of work done)

 Methodology………………………….............................
(Elaborate the work profile)

 Conclusion………………………………………………
..
 EXECUTIVE SUMMARY

Bajaj Capital Profile

Industry Financial Services

Founded 1964
Headquarters New Delhi, India
Key people Mr. K.K. Bajaj (Founder chairman)
Mr. Rajiv Bajaj (Chairman & Managing
Director)
Mr. Sanjiv Bajaj (Vice chairman &
Managing director)
Mr. Rahul Parikh (CEO)
Products Wealth Management products & services
Employee 1001-4000
Parent BCL Group
Slogan Always acting in your interest.
USP Vast Experience in Financial Advisory
Website www.bajajcapital.com
 INTRODUCTION
Being one of India’s premier investment companies, Bajaj
Capital found its purpose in helping people protect and grow
their wealth. Bajaj Capital Limited offers personalized
investment solutions to individual investors, Non-Resident
Indians (NRIs), and High Net worth clients, among others.
Over the last 53 years, Bajaj Capital has secured more futures
and helped create more millionaires than any other firm in
India. But its true pride lies in the trust that their clients show
in them. It is their deep personal relationship with each client
that sets them apart.

Reasons to prefer Bajaj Capital

-Great choices o Get an incredible range of financial products
to choose from
-Hassle-free process o Timely updates, regular portfolio
reviews and a 24x7 online call centre support to keep you
updated about your investment
-Within easy reach o 150 offices in India, so even if you
relocate, we are right there with you.
 HISTORY

1964:- Bajaj Capital sets up its first investment centre in New

Delhi to guide individual investors on where , when, and how
to invest.

India’s first Mutual Fund, Unit Trust of India (UTI) was

incorporated in the same year.
1965:- The company introduces an innovative financial
instrument – The Company Fixed Deposit. Becomes the first
company to raise resources through company fixed deposits.
1966:- Bajaj Capital expands its product range to include all
UTI schemes and Government Saving Schemes in addition to
Company Fixed Deposits.
1993:- The first private sector Mutual Fund is launched and
followed by others. Bajaj Capital plays an active role and is
ranked among the top mobilisers for all their schemes.
2004:- Bajaj Capital obtains the All India Insurance Broking
License.
2008:- Bajaj Capital launches Just Trade, an online platform
for investing in Equities, Mutual Funds, IPO’s.
 MISSION, AIMS & VISION

MISSION: Provide need based solutions at the right value,

gaining lifetime client relationships through a happy team &
services excellence.

AIM: We promise to provide our clients – Research Based,

unbiased, Independent and need based services and advice
with honest and ethical dealings.

VISION: India’s most admired and recommended wealth

creation and protection brand.
SERVICES:-

o Retirement plan o Wealth Creation o

Tax Saving o Children’s Future o
Buying property
o Owning a car

PROCESS :-

1. Need Analysis:
o Identifying your goals, preferences and risk appetite.

2. Scheme Selection: o Presenting you with a set of schemes

that help you achieve the goals.

3. Efficient Execution:
o Being with you every step of the way.

360* BUSINESS SOLUTION

 LONG TERM FINANCIAL PLANNING

Financial Planning is planning for the future. It involves preparing

oneself and their family for important events like child education,
retirement planning, cash flow planning, taxation, vacation, health
corpus creation and just about any event in the future. The above
mentioned components form goals or the structure of the planning
process.
One needs to understand that Financial Planning is NOT only about
investments. And it is definitely not just another fancy word for
investing in stock markets. Financial Planning is a holistic approach to
your Personal Finances which takes into consideration your Cash
flows, Assets and Liabilities, Risk appetite, investment needs to meet
your Financial Goals, Insurance needs after considering all existing
assets and resources one owns.

Why is Financial Planning necessary?

People haven’t still wizened up to the benefits of a professional advice,

they are aware of the changing scenario and feel the need to plan for
their long-term commitments. Such planning and investments are not
made with adequate research and are very often done on an adhoc or
push basis and people end up accumulating financial products that do
not fit their need or worse have high costs but give low returns.
Unfortunately, majority of savings in Indian households lie in Fixed
Deposits and PPF accounts which are low interest earning and
sometimes don’t even cover inflation. Hence real returns are negative.
Hence, it is imperative that an individual seeks professional advice to
get their finances in order.
SCOPE:
• Risk Management and Insurance Planning
• Investment and Planning Issues
• Tax Planning
• Estate Planning
• Retirement Planning
• Education Planning for kids and the family members
• Cash Flow and Liability Management
• Planning to ensure financial independence at retirement
• Managing cash flow risks through sound risk
management and insurance techniques
• Planning for the reduction of tax liabilities and the
freeing-up of cash flows for other purposes
• Planning for the creation, accumulation, conservation
and distribution of assets
• Maintaining and enhancing personal cash flows through
debt and lifestyle management
• Relationship Management
• Moving beyond pure product selling to understand and
service the core needs of the client
• Planning, creating and managing capital accumulation to
generate future capital and cash flows for reinvestment
and spending
IMPORTANCE:
• Inflation-
It is called the biggest destroyer of purchasing power.
Financial planning ensures to sustain the inflation while
keeping the goals unaffected.
• Long term goals-
Financial planning is a process of making a proper
financial plan to meet your financial goals in a specific
period of time. It is better to plan early since investing
options may earn high returns over the period of time.
• Emergencies-
Prevention is better than cure and when it’s about money,
getting ready is better than regretting.
Financial planning involves being ready for such
situations without affecting primary objectives.
Providing security to the family is an important part of
financial planning.

• Dreams-
Financial planning is a step towards the dreams.
Financial planning supports the dreams while taking care
of responsibilities.
• Retirement-
While meeting the family goals it is a general objective
to have a comfortable retired life. Financial planning
helps to create adequate corpus for retirement when
expenses continue but income seems to be drying. It is
advisable to consider investing for the life’s goals. Plan
today, for a better tomorrow.
 All financial plans consider the following:
 Assumption on rates of interest, rates of inflation, salary growth
rates, life expectancy, current market conditions, basis
discussion with the client.
 Current Status of Financials- Every financial plan is as on date
and is likely to change based on changing circumstances.
 Understanding and documenting Risk- Risk profiling and
tolerance of the client to enable him/her plan for their savings
realistically to meet their goals.

INTERNSHIP PLAN

It was a great experience doing internship at Bajaj Capital. I

came to know a lot about Mutual Funds, Insurance etc and their
sale process.

The insights which I got from the staffs was great, the managers
shared their experiences in Mutual Fund Market and insurance
and how to handle problems.

I started my journey at Bajaj Capital as an intern on 16th of

August which was a 6 weeks internship program that ended on
11th October. The first day was an introduction day I observed
the office and the various processes going on both in the front
end and the back end.

I started to look around and noting down the various financial

products present in Bajaj Capital and also interacting with the
staff .

The internship period was divided into weeks. Every week I

have got an overall practical experience regarding all major
functional areas in a financial product.

WEEK LEARNING EXPERINCE

1st WEEK :-
Introduction and Overview of the company and
their various financial products and information about Mutual
Funds, Insurance.

2nd WEEK:-
Knowledge about Mutual Funds, Insurance,
Share Market, and Coustmer Interaction.
3rd WEEK:-
Learnt about various mutual fund schemes and
selling techniques.

4th WEEK:-
Done a survey on Financial Literacy in India for
the company.

5th WEEK:-
Communicate with more and more customers to
meet the targets of the company of selling mutual fund SIPs.

6th WEEK:-
Learnt about the requirement to fulfil at the time
of filling the form and maintain the continuity in achieving the
target as well as learn how to motivate customers to buy a SIP.

MUTUAL FUNDS

What are Mutual Funds ?

Mutual funds are investment avenues that pool the money of
several investors like you to invest in financial instruments
such as stocks, government securities, debentures to name a
few. The appreciation made on the investments is distributed
among the investors on the basis of the units held by each of
them.
Mutual fund companies have fund managers who invest your
money on your behalf in the above mentioned avenues to take
in maximum returns.
Due to a large pool of investors, the individual risk is spread.
So individually you take on low risk. Hence mutual funds are
relatively safe investment avenues enabling you to rake in
attractive gains. The mutual funds in India are governed by
Association of Mutual Funds in India { AMFI }, the umbrella
body for mutual funds, which is in turn governed by the
Securities and Exchange Board of India { SEBI }
As a single investor, if you want to invest Rs 1000 per month
in the equities & you want to invest in TCS which is available
at Rs 2500 per share...how will you buy that stock with your
current cash flow of Rs 1000 ...?

Will you wait for few months for that stock to come down...&
who knows... the stock might touch 3000 soon !!
So, in order to participate in the equity markets, MF comes as
a viable platform.
Also, there are very limited number stocks you can buy. Plus,
you won’t be able to build a diversified portfolio of various
company shares. Just like you, there are millions of other
investors who would like to grow their money.
A Mutual Fund (AMC)company pools money from these
investors for investment in a particular scheme with a specific
objective.E.g. ICICI Prudential is an Asset Management
company and ICICI Prudential Focused Bluechip Equity Fund
is one of their Mutual Fund schemes in which individuals can
invest.
This mutual fund invests in primarily large cap blue chip
companies like TCS, Reliance Industries, HDFC Bank, ITC
Infosys, Coal India, ONGC, SBI & Sun Pharma etc. Now,
what is happening here is, that fund, collectively from 1000
clients, each contributing 1000 p.m has collected 10 Lakh
rupees. Now the fund manager of that MF scheme will invest
that whole amount in different companies, allocating the
funds, percentage wise.
So, for example he might put 5% in TCS { So 5% of 10 Lakh
i.e Rs 50,000 have been invested to acquire TCS shares & you
with your Rs 1000 have got 5% ownership in that company,
which was earlier, not possible as a single investor with Rs
1000 }
So, A mutual fund thus becomes one of the most viable
investment options for the common man as it offers an
opportunity to invest in a diversified, professionally managed
basket of securities at a relatively low cost.

Investing in a mutual fund offers a number

of benefits:-

Small investments : With mutual fund investments, your

money can be spread in small bits across varied companies.
This way you reap the benefits of a diversified portfolio
with small investments.
Professionally managed : The pool of money collected by a
mutual fund is managed by professionals who possess
considerable expertise, resources and experience. Through
analysis of markets and economy, they help pick favorable
investment opportunities.

Spreading risk: A mutual fund usually spreads the money in

companies across a wide spectrum of industries. This not
only diversifies the risk, but also helps take advantage of the
position it holds.

Transparency and interactivity : Mutual funds clearly

present their investment strategy to their investors and
regularly provide them with information on the value of their
investments. Also, a complete portfolio disclosure of the
investments made by various schemes along with the
proportion invested in each asset type is provided. You will
not find this level of disclosure by insurance companies.

Liquidity: Open ended funds can be bought and sold at their

market value as they have their units listed at the stock
exchange.So, liquidity is the key element here.

Choice: A wide variety of schemes allow investors to pick up

those which suit their risk / return profile.

Regulations: All the mutual funds are registered with SEBI.

They function within the provisions of strict regulation
created to protect the interests of the investor. Mutual funds
provide you a platform to start with small investment and
that investment is managed by experts who guide as well as
execute the transactions for you.
Power Of Compounding:-

Wealth is not created by earning windfall income once by

speculation or gambling. Creating wealth is an art, and it can
be only attained by skillful handling of one’s resources.
Patience and discipline lead to wealth management and
creation. No matter how small an amount but duration is
important. It means earning interest on interest.

Types of Mutual Funds in India

By structure:
Open Ended: Open ended funds are those funds that do not
have a fixed maturity period. You can buy and sell these
funds just anytime. These funds offer high liquidity. For
example, Open ended equity funds.

Close Ended: These are funds that are open only for a
specific period after which you'd have to buy them from the
secondary market. For e.g. NFO's Interval schemes, These
schemes combine the features of open ended and close ended
schemes and are available for purchase or sale during a select
period.
By Investment Objective:

Growth: These are highly aggressive schemes and invest

mainly in equities.

Income: Income funds invest in medium to long-term debt

instruments. These are low risk and aim at a fixed current
income .

Balanced: Also called Hybrid funds, these are a combination

of growth, debt and money market funds.

Money market schemes: These schemes invest in short term

debt instruments and are highly liquid.

Tax saving: These are equity linked saving schemes that offer
tax benefits under Section 80 C and have a compulsory lock
in period of three years.

Special schemes: Special schemes: These are select funds that

aim at replicating the performance of an index.
Also there are funds that invest in specific sectors that fall
under this category.

There are three primary types of Mutual

Funds by Asset Class in India.
Equity mutual fund: These funds invest maximum
part of their corpus into equity holdings. The structure of the
fund may vary for different schemes and the fund manager’s
outlook on different stocks.

The Equity funds are sub-classified depending upon their

investment objective, as follows:

Diversified equity funds

Mid-cap funds

Small cap funds

Sector specific funds

Tax savings funds (ELSS)

Equity investments rank high on the risk-return grid and

hence, are ideal for a longer time frame.

2. Debt mutual funds: These funds invest in debt

instruments to ensure low risk and provide a stable income to
the investors. Government authorities, private companies,
banks and financial institutions are some of the major issuers
of debt papers.

Debt funds can be further classified as:

Gilt funds

Income funds

MIPs

Short term plans

Liquid funds

Debt Funds rank lower on the risk-return grid and are suitable
for shorter investment time frames.

3. Gold fund: A gold fund is a mutual fund that invests in

99.9% pure gold. This gold investment is a paper
investment and does not attract any making charges that a
gold jewelery would.

Gold Funds are a great option for those who want to buy gold
for their kid’s wedding in few years.

What is an AMC?
AMC or Asset Management Company is the company that
runs and manages mutual funds.

4. How different are mutual funds from other

investment avenues?

In case of other investment avenues such as fixed deposits,

post office savings, PPF you're almost certain about the
amount you would be receiving on maturity. The risk is
low and you receive returns accordingly.

But with mutual funds the returns are not assured since they
are linked to the stock market. Stock market
investments would mean taking on high risk. But since mutual
funds spread the risk among several investors like you,
individually you would take on low risk and rake in stock
market related returns.

How risky is mutual fund investing?

Mutual funds invest in a variety of financial instruments such

as equities, debt, government securities to name a few. Note
that the value of these investments could fluctuate, thereby
influencing your mutual fund NAV. But since the risk is
spread among a large pool of individuals you individually
take on low risk through diversification and rake in high
returns.
What is rupee cost averaging?

Rupee cost averaging means reducing market risk through

systematic purchase of a given security. In other words
instead of investing a lumpsum in a mutual fund scheme you
adopt a disciplined approach to investing a certain fixed
amount every month at pre-determined intervals. That way
your investment amount remains fixed while the number of
units you receive would be more or less depending on the
fluctuations of the market. And that brings down your
average cost. Such a methodology insulates you against
market risks.

What is NAV?

NAV or Net Asset Value is the market value of the assets per
unit after deducting the liabilities. Here's how the NAV
is calculated:

{(Market Value of the Scheme's Investments)+Other Assets

(including accrued interest)+ Un amortised Issue
Expenses (only in case of schemes launched on a load basis) -
All Liabilities except unit capital and reserves)}Divided by
the number of units outstanding at the end of the day.

7. How often is NAV announced?

In case of Open-ended funds the NAVs are announced daily
but in case of close-ended funds they are announced on a
weekly basis.
What is the tax one need to pay on mutual
funds?

The tax liability would depend on the fund one invest in and
also the amount of time you remain invested. The government
has made dividends on mutual funds tax-free. If one invested
in equity fund for lesser than 12 months he is liable to short
term capital gains. Whereas, if you remain invested in an
equity mutual fund for over 12 months he has no tax liability
since long term capital gains are tax free.

If one invest in Debt Funds, after 3 years he can get

indexation benefit which significantly reduces taxes on your
earnings.

Do one need a demat account to invest in

mutual funds?

Except for Exchange Traded Funds one does not need a demat
account to invest in mutual funds.
What are NFOs?

NFOs or New Fund Offerings are new schemes introduced by

mutual fund companies from time to time. During the launch
period the fund unit is available for Rs 10 with the relevant
loads.
What is the lock-in period in mutual funds?

If you're looking at investing in equity linked saving schemes

(ELSS) the lock in period is three years. Which means your
money will remain locked in with the mutual fund company
for a period of three years.

What is ELSS all about?

Equity Linked Saving Schemes (ELSS) are tax saving mutual

fund schemes that enable you to get tax benefits under
Section 80C of the Income Tax Act. But mind you, there's a
lock in period of three years.

What is an offer document?

An offer document provides details about a new mutual fund

scheme entering the market. It provides
information on the features of the scheme, risk factors, loads -
entry or exit load, the track record of the mutual fund
company among others.
What is KIM?

KIM or Key Information Memorandum provides detailed

performance related information on the several schemes of
a mutual fund company. So before you invest in any
scheme you can have a look at the various scheme
performances and take an informed decision. But always
remember that a fund's past performance is no guarantee of
its future success .

How do one choose the right fund?

One may choose the right mutual fund on the basis of

Age

Time horizon : The amount of time he plan to remain

invested.

Risk profile: The amount of risk one is comfortable taking

with his investments.
Asset allocation: Diversifying his investments to bring down
the inherent risk in each asset class for instance equities, debt,
bonds to name a few.

Background of the mutual fund company.

The track record of the scheme over a period of time.

What are the factors that influence the

performance of Mutual Funds?

The performances of Mutual funds are influenced by the

performance of the stock market as well as the economy as
a whole. Equity Funds are influenced to a large extent by
the stock market.
The stock market in turn is influenced by the performance of
the companies as well as the economy as a whole.
The performance of the sector funds depends to a large extent
on the companies within that sector.
Bond-funds are influenced by interest rates and credit quality.
As interest rates rise, bond prices fall, and vice
versa. Similarly, bond funds with higher credit ratings are less
influenced by changes in the economy

.
Who are fund managers?

A fund manager is responsible for implementing a fund's

investing strategy and managing its portfolio trading
activities. A fund can be managed by one person, by two
people as co-managers, or by a team of three or more people.
Fund managers are paid a fee for their work, which is a
percentage of the fund's average assets under management
(AUM).

SYSTEMATIC
INVESTMENT PLAN
A Systematic Investment Plan (SIP) is an investment
vehicle offered by mutual funds to investors, allowing them to
invest small amounts periodically instead of lump sums. The
frequency of investment is usually weekly, monthly or
quarterly.

In SIPs, a fixed amount of money is debited by the investors

in bank accounts periodically and invested in a specified
mutual fund. The investor is allocated a number of units
according to the current Net asset value. Every time a sum is
invested, more units are added to the investors account.

The strategy claims to free the investors from speculating in

volatile markets by Rupee cost averaging. As the investor is
getting more units when the price is low and less units when
the price is high, in the long run, the average cost per unit is
supposed to be lower.

SIP claims to encourage disciplined investment. SIPs are

flexible, the investors may stop investing a plan anytime or
may choose to increase or decrease the investment amount.
SIP is usually recommended to retail investors who do not
have the resources to pursue active investment.

How does a Systematic Investment Plan

(SIP) work ?
A Systematic Investment Plan or SIP is not a product in itself.
It’s method of investing regular sum every month or every
quarter.

Let’s say one person earn Rs 50,000 per month, of which he

want to invest 20% or Rs 10,000 every month. It does not
have a lock in period or a tenure which a client has to pay
every year, like other policies.

An SIP automates this process.

Once one have initiated an SIP, every month, an amount of Rs

10,000 ,as chosen by him, will automatically be debited from
his bank account and sent to the Mutual Fund company. one
can also stop it whenever he want & moreover one can also
withdraw his money anytime.

The biggest advantage of an SIP is the habit of regular,

disciplined savings. Every month this also gets deducted
from the bank account through electronic clearing
service{ECS } which is convenient. Another benefit is that
when investing through SIP, it is not necessary to time the
market. Investments will be made systematically every
month or quarter depending on the option.
Through SIP one is able to get more or less units of a fund
over a period of time with the investment amount remaining
constant.

For instance lets say one decide to invest Rs 1000 every

month in a mutual fund scheme. he could receive either 25,
24 or 22 units each month respectively depending on the
highs and lows of the market. This turns out to be beneficial
in the long run as the per unit cost gets evened out.

This way, one enjoy’s the benefit of rupee cost averaging

under this method.

What is the minimum of investment ?

One can start from as low as Rs 1000 per month and increase
as you become more aware. There is no upper limit for a SIP
and it all depends on what the monthly savings are like and
how much one would like to invest. But remember, cash
payment is not allowed in Mutual funds.

Where does money go ?

After your SIP is initiated, the money is directly debited from

the bank account via an ECS Mandate and sent to the Mutual
Fund company & invested in the Mutual fund scheme one
have selected.

How long do one have to invest for ?

One can invest in a SIP for a minimum of 6 months and

continue as long as he like. He can also withdraw his money
anytime he wish if it’s invested in open ended mutual funds.
Longer the period, higher are the chances of returns.
How do one monitor his portfolio ?

One will receive a login id and password to his online

portfolio on his Email. One will also receive statements
on his mentioned E mail.

When can one withdraw his money ?

One can withdraw the money anytime he wish. However, in

some funds, if you withdraw it before 12- 18 months, there
is an exit load / charge of 1% on the amount you have
invested which is levied by the Mutual Fund company.

Tax Saving or ELSS funds have a lock in period of 3 years

before you can withdraw your money.

The Cost of SIP ?

The cost is deducted by the Mutual Fund through the expense

ratio. It is about 2 - 2.5% of the value of your holding per
annum. This ratio is lower , typically 1 – 1.5% for direct plans
of Mutual Funds.

Advantages & Benefits of SIP:

Reduces risk: A SIP spreads your purchase price over time. It
protects you from catching a market high. This effect is called
‘rupee cost averaging’ – a SIP ‘averages out’ your cost of
buying a fund.
More units, less price: If the mutual fund falls due to market
turbulence, you will get more units in the fund by investing
through a SIP. This is because more mutual fund units will be
available for your money due to the drop in price.
Reduces hassle: A SIP is that it can be fully automated. You
can set up a SIP online with Paisabazaar and give a one-time
bank mandate. Your money will be invested every month on a
date selected by you. This saves you the trouble of filling
forms and cheques or logging in to platforms every month to
invest.
Optimises your salary: Those who earn a monthly salary or
income will also find that a SIP is highly convenient for them.
You can schedule a SIP on a date after your monthly salary is
credited and invest with ease.
 Lump Sum
Investments

A lump sum investment refers to investing the entire amount

in one go. Lump sum investments are mostly undertaken by
experienced investors who choose to time markets and invest
in asset classes that are likely to appreciate in the long term.
This improves the chances of an investment being profitable
in the long term.

Factors to Consider before Investing in an

Onetime Investment plan:

Since lump sum investments are mandatory in case of some

investments, investors need to understand, how to go about it.
Here are a few pointers that can help prospective lumpsum
investors make a good investment decision.
• Be Aware of Market Valuations:Irrespective of an
investor’s judgement and experience, finding market
lows to invest and finding market tops to sell is almost
However, one can use the Price to Earning (P/E) ratio as
a benchmark. You need to consider the earnings of the
last four quarters while calculating P/E. Projected
earnings can be misleading at times. Considering the
benchmarks such as Nifty, the decision to invest a lump
sum can be driven by whether the Nifty P/E is closer to
the lower end or the upper end. One usually stands a
 better chance of making profits when the P/E is lower
say around 14 rather than when the P/E is higher i.e.
closer to 22. Either ways, one needs to invest with a
long term view i.e. 5 years or more.

• Estimate potentialReturns and Liquidity

Expectations before Investing: This is partially an
extension of previous point and an extremely important
An investor is better off putting the money in a low
volatility debt fund or in a liquid fund if one is seeking to
utilise the money within a short term. As a result of their
potentially low volatility, these can be more predictable
and secure compared to equity funds from a short term
investment perspective. Similarly, do not expect
outperformance within one year if you invest lump-sum
in equity funds. This will need a much longer period of 5
years or more to show adequate performance.

• Patience:The most important principle in equity

lumpsum investing is to remain calm and level-headed
no matter how the market moves after the investment has
been made. For instance, investors who bought tech
sector funds in 2002 when NAVs were 70% below par,
still had to put up with even greater correction for a
while before these investments started giving returns.
Certainly, these tech funds became multi-baggers many
times over in the next five years. But being patient in the
middle of volatility or adversity is tough and easier said
 than done. One needs to consider this risk when one
engages in lump-sum investing.

• Investing via a STP instead of LumpSum: Investors

who are confused about market ups and downs can prefer
this way instead of a lump-sum investment in an equity
scheme. In this case, one should invest the lump sum in
an ultra-short term fund or liquid fund and set a
Systematic Transfer Plan (STP) to periodically allocate a
fixed sum into the chosen equity fund. This way one
would not have to time the market and in the meantime,
liquid fund investments earn higher returns than if the
money was deposited in a bank account.

Pros and Cons of One –Time Investment Plan:

 Investors should carefully look at both pros and cons of lump
sum investments before making a decision as these often carry
more risk than SIP investments. Here are a few pros and cons
of one time investment plans. Pros:

• Investment:This is a good option for investing available

cash in hand instead of keeping it idle or earning low
returns in a bank account.

• Convenience:This is a convenient mode of investment

as the investment has to be made only once and the
investor can just relax without worrying about any
further investments to be made in the future.

• Ideal for a Long Term Horizon: Lump sum

investments are suited for long term financial goals like
children’s education, marriage or others which are
expected expenses that go 10 to 12 years into the future.

• Capital appreciation over time:Investors acquire assets

that they believe will appreciate in value. So it makes
sense that the earlier one purchases an asset, the greater
the long-term financial gain. This is the main advantage
of lump sum investing over other modes of investment.
Let’s explain it with the help of an example. For instance,
let’s assume that research has led an investor to conclude
that Apple is an excellent long-term investment that will
 steadily climb in price. If one had Rs. 10 lakh on hand and
ready to allocate to Apple, it makes sense to invest it all
immediately rather than investing Rs. 10 lakh in 10 years
through SIP. Believing the financial advice your financial
planner, Apple will steadily grow, you are buying shares
today at a cheaper price as compared the price is expected
to be in the future. On the other hand, allocating the money
over a longer period will lead the investor to pay a higher
average price over time as the stock price appreciates.

• Low Charges: Another advantage of lump sum

investing relates to transaction costs. A lump sum
investing approach results in less transaction costs when
one is investing in stock market equities. Many online
brokers now offer flat-fee trades, regardless of the
number and type of shares bought or soldat a given.
Investing Rs. 10 lakh in one lump sum may result in
payment of 100 as commission. However, dividing that
into 10 separate transactions, the investor will end up
paying Rs. 1,000 in total i.e. 10 times as much.
Fortunately this is not the case in case of SIP mutual
fund investments (excluding ETF) as there are not
charges with respect to purchase or redemption of units.

Cons:

• Undisciplined Investment:Lump sum plan does not

inspire investment discipline. It is also unsuitable for
taking care of regular savings that an investor might
 make. The investor may have to prefer other low return
generating options for general savings in case only the
lump sum investment route is applicable.

• Unsuitable as Long Term Investment Method: Onetim

e investment plans for mutual funds are not usually
considered suitable for long term investments especially
in equity schemes. A lump sum investment may even not
be the best option if funds are required in the near future
unless the investment is made into low volatility options
such as liquid funds or ultra short term funds. This is
because the real returns are derived only over the longer
term.

• Higher Risk:The investor may end up buying lesser

units if the market is high at the time of purchase then
witnesses a decline as the sum is invested at one go. In
this style of investing, there is no option of buying units
in between or regularly. The only option is to invest in a
new fund for which an investor may not even have
surplus funds due to single cash outflow to the lump sum
payment.
METHODOLOGY

Introduction:
The objective of the project was a comparative study on one
time investment and systematic investment plan. To compare
both investment plan and to identify their differences and
similarities and Is their any plan among two which is more
beneficial or they have there own benefits depending on
circumstances.
Type of Research:
Comparative: Comparative Research essentially compares
two groups in an attempt to draw a conclusion about them.

Data Collection:
Data collection is most essential aspect of any research
because the whole result of research depends on the data and
information hence, the methodology adopted by me to collect
the data final interpretation were through secondary source of
data.
The secondary data helpful for study were:
Text book like Financial Institutions and Markets and Security
Analysis and Portfolio Management.
Internet, newspaper, business magzines were used for
collection of data.
Introduction

There are two primary ways of investing in a mutual fund —

lump sum and SIP. A lump sum investment is a one-time
investment while a SIP (systematic investment plan) is a
recurring investment.
A lump sum investment is generally considered when the
investor has a big corpus to invest. This could be money
received after retirement or from the sale of a house or from
an inheritance or it might just be the case that you have
accumulated money in your bank account and wish to invest it
now. There can be many reasons to consider a lump sum
investment, but a SIP is generally recommended who do not
have big corpus and want to invest for there future goals. This
is more so in the case of investments in an equity mutual fund
while in debt lump sum investments are more beneficial in
comparison to SIP.

Actually, the result of both these investment methodologies

depends upon the market behavior. Globally, different
markets behave differently. Share market of developing
countries swings wildly but the markets of developed
countries are relatively stable.
It also depends upon the person who is investing. Some
learned people can earn well by investing lump sum, but it is
not true for the common investor. One has to decide which
method of investment will suit you. Let’s put different
scenarios for understanding of SIP vs lump sum investment.

SIP vs Lump Sum Investments in Different

Years
Scenario #1- Year of 2013

Suppose X and Y Invested 12 lakh rupees each at the end of

2012. Both of them rely on equity and decided to invest in the
Nifty index fund. X invested whole 12 lakh at one go and y
invested one lakh every month for 12 months. Now let us see
what would be the return of both of them after the end of
2013.

INVESTMENT OF X

INVESTMENT
NIFTY VALUE

Jan, 2013 6035 12,00,000

=12,00,000
Jan, 2014 6090 12,10,936 *(6090/6035

INVESTMENT OF Y
 NIFTY SIP VALUE AT
JAN’ 14

Jan, 2013 6035 100000 100907

Feb, 2013 5693 100000 106964

Mar, 2013 5683 100000 107161

Apr, 2013 5930 100000 102686

May, 2013 5986 100000 101730

Jun, 2013 5842 100000 104233

Jul, 2013 5742 100000 106052

Aug, 2013 5472 100000 111289

Sep, 2013 5735 100000 106176

Oct, 2013 6299 100000 96672

Nov, 2013 6176 100000 98598

Dec, 2013 6304 100000 96597

Jan, 2014 6090

TOTAL 12,39,065

As you can see, Nifty gone through ups and downs during
2013. It started with 6035 and ended only slightly higher.

Consequently, investment of X only grew from 12 lakh to

12.11 Lakhs. The return was less than 1%. But due to the SIP
method, Y was in a far better place.He earned a 3.26% return.
Scenario #2 – Year of 2009

This was the year when stock market came out from big jolt.
Suppose X and Y have the same amount and same method as
of investment as stated above. Now let us see what would be
their return by investing in the Nifty Index Fund at 2009.

INVESTMENT OF X:-

NIFTY VALUE

Jan 2009 2875 12,00,000

Jan 2010 4882 20,37,867

INVESTMENT OF Y:-
VALUE AT
JAN’ 10
NIFTY SIP
Jan 2009 2875 100000 169822

Feb 2009 2764 100000 176652

Mar 2009 3021 100000 161606

Apr 2009 3474 100000 140533

May 2009 4449 100000 109735

June 2009 4291 100000 113772

July 2009 4636 100000 105297

Aug 2009 4662 100000 104718

Sep 2009 5084 100000 96029

Oct 2009 4712 100000 103615

Nov 2009 5033 100000 97007

Dec 2009 5201 100000 93867

Jan 2010 4882

TOTAL 14,72,653

This time, the Situation is totally changed. As you can see in

the chart,Nifty has grown constantly during the year. The year
started with Nifty at 2875 and ended at 4882. lakhs. It is
26.58% return. This return of Y is quite decent but less than X
return. His amount has grown to 20.38 lakhs, The return of
70%. It is a big difference.
 FINDINGS
After seeing both scenarios, the comparison of one time
investment and systematic investment plan is not a like to like
comparison. Such comparisons should not be the basis of
deciding between one time investment and systematic
investment plan. The decision of investing in one time
investment or systematic investment plan totally depends on
the source of investment.
• If the investor depends on regular savings for his or her
investments, it makes sense to invest through the
 systematic investment plan route. The investor should
not wait, till he or she has saved a sufficient corpus to
invest in mutual funds.
• If the investor has lump sum funds as a result of one time
income then he or she could invest in lump sum in
mutual funds The investor should not put his funds in a
bank account and invest it over a period of time through
Systematic Transfer Plan.

CONCLUSION
While doing my internship I came to a conclusion that this
training has helped me much in getting the through
knowledge about some of the asset management companies,
how this companies are competing against each other for
getting the more market share, how they are applying different
strategies to attract customers and making them satisfied.
I came to know about mutual funds and there benefits, and
gathered much more knowledge about Bajaj Capital ltd. Its
services, its strategies, and how every employees of it work
hard to achive the organizational goal.
At last it was a great experience to be a part of Bajaj Capital, a
company which has been successfully running for more than
50 years. It was a great opportunity for me to complete my
internship from Bajaj Capital.