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Research Supervisor: Mr. Vaibhav Kohli, Dy. Manager, HDFC Bank, Ambala.
Submitted by: Amit Sharma Enrollment No. 05061113001 M.B.A. (Marketing) {Semester- IV}
Certificate
This is to certified that the Mr. Amit Sharma has completed his Research Project entitled The Study and Performance of HDFC
Mutual Fund Company Under my Supervision, his Research is ready and fit for submission in partial fulfillment Requirement of Masters Degree M.B.A. (Marketing).
This is to also certified that the Research Project is the original Work of the candidate and having own findings and conclusions.
DECLARATION
This is to be certified that I, Amit Sharma, student of GJU of Science & Technology, studying in MBA IV semester, Roll no. 05061113001, have submitted a research project on title The Study and Performance Of HDFC Mutual Fund Company as assigned by the University for the partial fulfillment of degree of MBA (Marketing) .
I solemnly declare that the work done by me is original and no copy of it has been submitted to any other university for an award of any other degree.
Submitted By: Amit Sharma Roll No.05061113001 GJU of Science & Technology, Hissar
Acknowledgement
The research project report titled The Study and Performance of HDFC Mutual Fund Company is completed under the great guidance of my research supervisor Mr. Vaibhav Kohli, Dy. Manager, HDFC Bank, Ambala. His valuable attention helped me a lot to complete such a complicated task. Since Mr. Kohli have more than Six years of experience of Marketing of financial Products as he have to deal in Mutual funds, IPOs, Saving Accounts, Loans etc.. I am also thankful to Branch Manager Mr. Vikas Sethi, who also help me in this project and providing me necessary documents. The other persons to whom I am thankful are Mr. Karan Thappar, Manager Sales, Karvy investments Ltd, Ambala. Mr. S. K. Thakraal , Chief Investment Agent (AMFI) Certified, Ambala. Mr.Rajan Gupta, Branch Manager, Cholamandalam, Development Bank Of Singapore (DBS), Ambala.
Submitted by: Amit Sharma, Roll No. 05061113001 M.B.A. (IV - Semester)
When an investor subscribers to a mutual fund, he or she buys a part of the assets or the pool of funds that are outstanding at that time. It is no different from buying shares of a joint stock company, in which case the purchase makes the investor a part owner of the company and its assets. In fact, in the United States of America (U.S.A.) a mutual fund is constituted as an investment company and an investor buys into the fund meaning he buys the shares of the fund. In India, a mutual fund is constituted as a trust and the investor subscribes to the units issued by the fund, which is where the term Unit Trust comes from. However whether the investor gets fund shares or units is only a matter of legal distinction. In any case, a mutual fund share holder or unit holder is a part owner of the funds assets. Through out this we have the term unit holder to denote the mutual fund investor, in line with the common Indian usage of the term. The term unit holder is includes the mutual fund account holder of closed-and fund shareholder.
Since each owner is a part owner of a mutual fund, it is necessary to establish the value of his/her part. In other words, each share or unit that an investor holds needs to be assigned a value. Since the units held by an investor evidence the ownership of the funds assets, the value of the total assets of the fund when divided by the total number of unit issued by the mutual fund gives us the value of one unit this is generally called the Net Asset Value (NAV) of one unit or one share. The value of an investors part ownership is thus determined by the NAV of the number of units held.
Talking about Mutual Fund deeplyA mutual fund is a professionally managed investment company that combines the money of many individuals and invests this "pooled" money in a wide variety of different securities. It is by pooling the money of many individuals that mutual funds are able to provide the diversification and money management (along with many other advantages) that were once reserved only for the wealthy. Professional money managers (Portfolio Managers) take this pool of money and invest it in a wide variety of Stocks, Bonds, or other securities depending on the investment objective, or goal, of the particular fund. It is the investment objective of the fund that guides the manager in selecting the various securities for the fund.
It is the investment objective of the fund that also guides the investor on which funds to invest in. Since different investors have different objectives, there are a number of different kinds of mutual funds, i.e., some funds may provide monthly income while others seek long-term capital appreciation.
Mutual funds can be classified according to their investment objective. Some of the classifications include money market funds, growth funds, balanced funds, income funds, and many others. When you invest in a fund you hope that the value will rise and you can eventually sell your shares for a profit. This is one of the ways you can profit with mutual funds. Another way is through capital gains. When a fund sells a security for a higher price than it originally paid for it, it is known as a capital gain. Most funds distribute their capital gains to shareholders at least annually, some more often. The last way to profit with mutual funds is with dividends or interest. If the fund has invested in bonds or dividend-paying stocks, it must pass the dividends or interest earned on to its shareholders. Like capital gains, this is done at least annually.
When you invest your money in a mutual fund, you buy shares in that fund. To determine the price of those shares, each day the fund adds up the total value of the securities held in its portfolio. This total is divided by the number of shares outstanding. The resulting figure is known as the Net Asset Value or NAV.
To find out the value of your holdings, you simply multiply the number of shares you own by the net asset value. The NAV of most funds is listed in most Daily Newspapers. The NAV will change daily depending on how well the underlying securities of the fund perform. If the securities held by the fund go up in value so will the value of your shares. As stated above, mutual funds are generally classified according to the investment objective of the fund. They are also classified according to how they are bought and sold. There are Open End or Closed-End funds and There are load or no-load funds. An open-end fund is a mutual fund that continuously issues new shares as
needed and buys them back when investors wish to sell. There is no limit to how many shares an open-end fund can sell. The buy and sell price is based on the net asset value of the fund. The majority of mutual funds on the market today are open-end funds and are the type we are concerned with in this tutorial.
Let us see an example. If the value of a funds assets stands at Rs. 1,000 and it has 10 investors who have bought 10 units each, the total numbers of units issued are 100, and the value of one unit is Rs.10 (1,000/100). If a single investor in fact owns 3 units, the value of his ownership of the fund will be Rs.30 (1,000/100*3 units). Note that the value of the funds investment will keep fluctuating with the market price moments causing the Net Asset Value also to fluctuate. For example,
if the value of our funds assets increased from Rs.1,000 to 1,200, the value of our investors holding of 3 units will now be (1,200/100*3) Rs.36. the investment value can go up or down, depending on the market value of funds assets.
Todays Scenario:
Mutual funds now represent perhaps the most appropriate investment opportunity for the most investors. As financial markets become more sophisticated and complex, investors need a financial intermediary who provides the required knowledge and professional expertise on successful investing. It is no wonder then that in the birthplace of mutual funds In
the U.S.A. the Mutual fund industry has already overtaken the Banking Industry, as it shown that more funds being collected under mutual fund management then deposited with banks.
The Indian mutual fund industry has already started opening up many of the exciting investment opportunities to Indian investors. We have started witnessing the phenomenon of more savings now being entrusted to the funds than to the banks. Despite the expected continuing growth in the industry, mutual funds are still a new financial intermediary in India. Hence, it is important that the investors, the mutual fund agents/distributors, the investment advisors and even the fund employees acquire better knowledge of what mutual funds are, what they can do for investors and what they cannot, and how they function differently from other intermediaries such as the banks.
Mutual Funds are for every one. Around the world, millions of investors are investing and the money advantages they offer, as you read on, you will get a flavor of what mutual funds are and how they can help you
achieve your financial goals. But before that here are some basics of investing. Different investment avenues are available to investors. Mutual funds also offer good investment opportunities to the investors. Like all investments they also carry certain risk. The investor should compare the risks and expected yields after adjustment of tax on various instruments while taking investment decisions. The investor may seek advice from experts and consultants including agents and distributors of mutual funds schemes while making investment decision. With an objective to make the investor aware of functioning of mutual funds, an attempt has been made to provide information in question-answer format which may help the investors in taking investment.
The profits or losses are shared by the investors in proportion to their Investments. The mutual funds normally come out with a number of schemes with different investment objectives which are launched from time to time and required minimum investment depends on type of Fund, its Fund Managers Portfolio. A mutual fund is required to be registered with Securities and Exchange Board of India (SEBI) which regulates securities Markets before it can collect funds from the public. And also to get final approval from Associate of Mutual Fund Of India(AMFI) e.g. Offer Document etc. In case of Mutual Fund Company it should be registered with NBFC (Non Banking Financial Corporation) by depositing approximately 20 Million of Rupees.
Investment of Funds
Broadly, Mutual funds Invest basically in three types of Asset Classes:
-Stocks: Stocks represent ownership or equity in a company, popularly known as shares. Stock holder may be the owners-founder of company, the masses, FII, Sleeping partners, Government (depending on Stake Division)
-Bonds: These represent debt which are borrowed by companies, financial institutions or Government agencies for the particular period say three to ten years
-Money market instruments: These include short-term debt instruments such as treasury bills, certificate of deposits and inter-bank call money.
-Hybrid schemes:
of view
Non-Resident Indians can also invest in Mutual Funds. Necessary details in this respect are in the offer documents of the Schemes. The limit should one invest in debt or equity oriented schemes An investor should take into account his risk taking capacity, age factor, financial position, etc. As already mentioned, the schemes invest in different type of securities as disclosed in the offer documents and offer different returns and risks. Investors may also consult financial experts before taking decisions. Agents and distributors may also help in this regard. The fill-up processor of application form of a mutual fund scheme An investor must mention clearly his name, address, number of units applied for and such other information as required in the application form. He must give his bank account number so as to avoid any fraudulent encashment of any cheque/draft issued by the mutual fund at a later date for the purpose of dividend or repurchase. Any changes in the
address, bank account number , etc at a later date should be informed to the mutual fund immediately.
SEBI Regulations require that at least two thirds of the directors of trustee company or board of trustees must be independent i.e. they should not be associated with the sponsors. Also, 50% of the directors AMC must be independent. All mutual funds are required to be registered
with SEBI before they launch any scheme. However, Unit Trust of India(UTI) is not registered with SEBI (as on January 15, 2002)
an investment as modest as Rs.500/-. This amount today would get you less than quarter of an infosys share! Thus it would be affordable for an investor to build a portfolio of investments through a mutual fund rather than investing directly in the stock market.
-Diversification
The nuclear weapon in your arsenal for your fight against Risk. It simply means that you must spread your investment across different securities (stocks, bonds, money market instruments, real estate, fixed deposits etc.) and different sectors (auto, textile, information technology etc.). This kind of a diversification may add to the stability of your returns, for example during one period of time equities might under perform but bonds and money market instruments might do well enough to offset the effect of a slump in the equity markets. Similarly the information technology sector might be faring poorly but the auto and textile sectors might do well and may protect your principal investment ass well as help you meet your return objectives.
-Variety
Mutual funds offer a tremendous variety of schemes. This variety is beneficial in two ways: first, it offers different types of schemes to investors with different needs and risk appetites; secondly, it offers an opportunity to an investor to invest sums across a variety of schemes, both debt and equity. For example, an investor can invest his money in a Growth Fund (equity scheme) and income Fund (debt scheme) depending on his risk appetite and thus create a balanced portfolio easily or simply just buy a Balanced Scheme.
-Professional Management
Qualified investment professionals who seek to maximize returns and minimize risk monitor investors money. When you buy in to a mutual fund, you are handling your money to an investment professional who has experience in making investment decisions. It is the Fund Managers job to (a) find the best securities for the fund, given the funds stated investment objectives; and (b) keep track of investments and changes in market conditions and adjust the mix of the portfolio, as and when required.
-Tax Benefits
Any income distributed after March 31, 2002 will be subject to tax in the assessment of all Unit holders. However, as a measure of concession to Unit holders of open-ended equity-oriented funds, income distributions for the year ending March 31, 2003, will be taxed at a concessional rate of 10.5%. In case of individuals and Hindu Undivided Families a deduction upon Rs. 9,000 from the Total Income will be admissible in respect of income from investment specified in Section 80L, including income from Units of the Mutual Fund. Units of the schemes are not subject to Wealth-Tax and Gift-Tax.
-Low Cost
A mutual fund let's you participate in a diversified portfolio for as little as Rs.5,000/-, and sometimes less. And with a no-load fund, you pay little or no sales charges to own them.
-Personal Service
One call puts you in touch with a specialist who can provide you with information you can use to make your own investment choices. They will provide you personal assistance in buying and selling your fund units, provide fund information and answer questions about your account status. Our Customer service centers are at your service and our Marketing team would be eager to hear your comments on
our schemes.
-Regulations
Securities and Exchange Board of India (SEBI), the mutual funds regulator hasclearly defined rules, which govern mutual funds. These rules relates to the formation, administration and management of mutual funds and also prescribe disclosure and accounting requirements. Such a high level of regulation seeks to protect the interest of investors.
What are the different types of mutual fund schemes? 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.
-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 do not have a
fixed maturity period. Investors can conveniently buy and sell units at Net Asset Value (NAV) related prices which are declared 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 investor i.e. either repurchase facility or through listing on stock exchanges. These mutual funds schemes disclose NAV generally on weekly basis.
The aim of growth funds is to provide capital appreciation over the medium to long-term. Such schemes normally invest a major part of their corpus in equities. Such funds have comparatively high risks. These schemes provide different options to the investors like dividend option, capital appreciation, etc. and the investors may choose an option depending on their preferences. The investors must indicate the option in the application form. The mutual funds also allow the investors to change the options at a later date. Growth schemes are good for investors having a long-term outlook seeking appreciation over a period of time.
opportunities of capital appreciation are also limited in such funds. The NAVs of such funds are affected because of change in interest rates in the country. If the interest rates fall NAVs of such funds are likely to increase in the short run and vice versa. However, long term investors may not bother about these fluctuations. Such funds are less risky compared to equity schemes. These funds are not affected because of fluctuations in equity markets. However, opportunities of capital appreciation are also limited in such funds. The NAVs of such funds are affected because of change in interest rates in the country. If the interest rates fall, NAVs of such funds are likely to increase in the short run and vice versa. However, long term investors may not bother about these fluctuations.
-Balanced Fund
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 invests 40 60% in equity and debt instruments. These funds are also affected because of fluctuations in share prices in the stock markets. However, NAVs of such funds are likely to be less volatile compared to pure equity funds.
-Gilt Fund
These funds invest exclusively in Government securities. Government securities have no default risk. NAVs of these schemes also fluctuate due to change in interest rates and other economic factors as is the case with income or debt oriented schemes.
-Index Funds
Index Funds replicate the portfolio of a particular index such as the BSE Sensitive index, S&P NSE 50 index (Nifty), etc.. these schemes invest in the securities in the same weight age comprising of an index. NAVs of such schemes would rise or fall in accordance with the rise or fall in the index, though not exactly by the same percentage due to some factors known as tracking error in technical terms. Necessary disclosures in this regard are made in the offer document of the mutual fund scheme. These are also exchange traded index funds launched by the mutual funds which are traded on the stock exchanges.
Mutual fund change the asset allocation while deploying funds of investors
Considering the market trends, any prudent fund managers can change the asset allocation i.e. he can invest higher or lower percentage of the fund in equity or debt instruments compared to what is disclosed in the offer document. It can be done on a short term basis on defensive considerations i.e. to protect the NAV. Hence the fund managers are
allowed certain flexibility in altering the asset allocation considering the interest of the investors. In case the mutual fund wants to change the asset allocation on a permanent basis, they are required to inform the unit holders and giving them option to exit the scheme at prevailing NAV without any load.
When will the investor get certificate or statement of account after investing in a mutual fund?
Mutual funds are required to dispatch certificates or statements of accounts with in six weeks from the date of closure of the initial subscription of the scheme. In case of close-ended schemes, the investors would get wither a demat account statement or unit certificates as these are traded in the stock exchanges. In case of open-ended schemes, a statement of account is issued by the mutual fund with in 30 days from the date of closure of initial public offer of the scheme. The procedure of repurchase is mentioned in the offer document.
How long will it take for transfer of units after purchase from stock markets in case of close-ended schemes?
According to SEBI Regulations, transfer of units is required to be done with in thirty days from the date of lodgment of certificates with the mutual fund.
As a unit holder, how much time will it take to receive dividends/repurchase proceeds?
A mutual fund is required to dispatch to the unit holders the dividend warrants with in thirty days of the declaration of the dividend and the redemption or repurchase proceeds with in ten working days from the date of redemption or repurchase request made by the unit holder.
In case of failure to dispatch the redemption/repurchase proceeds with in the stipulated time period, Asset Management Company is liable to pay interest as specified by SEBI from time to time (15% at present)
How will an investor come to know about the changes? If any, which may occur in the mutual fund?
There may be changes from time to time in a mutual fund. The mutual funds are required to inform any material changes to their unit holders. Apart from it, many mutual funds send quarterly newsletters to their investors. At present, offer documents are required to be revised and updated at least once in two years. In the meantime, new investors are informed about the material changes by way of addendum to the offer document till the time offer document is revised and reprinted.
How to know where the mutual fund scheme has invested money mobilized from the investors?
The mutual funds are required to disclose full portfolios of all of their schemes on half-yearly basis which are published in the newspapers. Some mutual funds send the portfolios to their unit holders. The scheme portfolio shows investment made in each security i.e. equity, debentures, money market instruments, government securities, etc. and
their quantity, market value and % to NAV. These portfolio statements also required to disclose illiquid securities in the portfolio, investment made in rated and unrated debt securities, non-performing assets (NPAs), etc. Some of the mutual funds send newsletters to the unit holders on quarterly basis which also contain portfolios of the schemes.
Is there any difference between investing in a mutual fund and in an initial public offering (IPO) of a company?
Yes, there is a difference. IPOs of companies may open at lower or higher price than the issue price depending on market sentiment and perception of investors. However, in the case of mutual funds, the par
value of the units may not rise or fall immediately after allotment. A mutual fund scheme takes some time to make investment in securities. NAV of the scheme depends on the value of securities in which the funds have been deployed.
The performance of a particular scheme of a mutual fund is denoted by Net Asset Value (NAV). Mutual funds invest the money collected from the investors in securities markets. In simple words, Net Asset Value is the market value of the securities held by the scheme. Since market value of securities changes every day, NAV of a scheme also varies on day to day
basis. The NAV per unit is the market value of securities of a scheme divided by the total number of units of the scheme on any particular date. For example, if the market value of securities of a mutual fund scheme is Rs. 200 lakhs and the mutual fund has issued 10 lakhs units of Rs. 10 each to the investors, then the NAV per unit of the fund is Rs.20. NAV is required to be disclosed by the mutual funds on a regular basis daily or weekly depending on the type of scheme.
If scheme in the same category of different mutual funds are available, should one choose a scheme with lower NAV?
available at lower NAV compared to the one available at higher NAV. Sometimes, they prefer a new scheme which is issuing units at Rs. 10 whereas the existing schemes in the same category are available at much higher NAVs. Investors may please note that in case of mutual funds schemes. Lower or higher NAVs of similar type schemes of different mutual funds have no relevance. On the other hand, investors should choose a scheme based on its merit considering performance track record of the mutual fund, service standards, professional management, etc..
As already mentioned, the investors must read the offer document of the mutual fund scheme very carefully. They may also look into the past track record of performance of the scheme or other scheme of the same mutual fund. They may also compare the performance with other schemes having similar investment objectives. Though past performance of a scheme is not an indicator of its future performance and good performance in the past may or may not be sustained in the future, this is one of the important factors for making investment decision. In case of debt oriented schemes, apart from looking into past returns, the investors should also see the quality of debt instruments which is reflected in their rating.
Are the companies having names like mutual benefit the same as mutual funds schemes?
Investors should not assume some companies having the name mutual benefit as mutual funds. These companies do not come under the purview of SEBI. On the other hand, mutual funds can mobilize funds from the investors by launching schemes only after getting registered with SEBI as mutual funds.
better returns?
In the offer document of any mutual fund scheme, financial performance including the net worth of the sponsor for a period of three years is required to be given. The only purpose is that the investors should know the track record of the company which has sponsored the mutual fund. However, higher net worth of the sponsor does not mean that the scheme would give better returns or the sponsor would compensate in case the NAV falls.
In case of winding up of a scheme, the mutual funds pay a sum based on prevailing NAV after adjustment of expenses. Unit holders are entitled to receive a report on winding up from the mutual funds which gives all necessary details.
-Liquidity
in open-ended mutual funds, you can redeem all or part of your units any time you wish. Some schemes do have a lock-in period where an investor cannot return the units until the completion of such a lock-in period.
-Convenience
An investor can purchase or sell fund units directly from a fund, through a broker or a financial planner. The investor may opt for a Systematic Investment Plan (SIP) or a Systematic arious schemes. This flexibility gives the investor a convenient way to change the mix of his portfolio over time.
-Transparency
Open-ended mutual funds disclose their Net Asset Value (NAV) daily and the entire portfolio monthly. This level of transparency, where the investor himself sees the underlying assets bought with his money, is unmatched by any other financial instruments. Thus the investor is in the know of the quality of the portfolio and can invest future or redeem depending on the kind of the portfolio that has been constructed by the investment manager.
Basically Mutual Fund need a lot of attention towards the Public time to Time. So the Factor is that the concept of Mutual fund is a fundamental part of financial sector which is presently known as service sector. According to experts more than fourty percentage of share of Indian revenue is from service sector so one can say that in near future the first preference will be given to service sector.
This sector consists of lots of selling guts, torts, analyses of financial behavior and the investments behavior.
The marketing and selling of mutual funds consists of the following as below.
Advertisement Sales promotions Personal selling Marketing of new products (MF) Tele calling (Marketing) Cold calling Exhibition cum sale Issue of dividend warrants time to time Time to time communication between all channel partners After sale service
Consumer participation greatly influences the perception of services. For example a particular swimming pool may be very good, but a person whose experience with the swimming coach is not good, may complain about the quality of the swimming pool itself. There are different degrees of consumer participation. There is low participation in restaurants and air flights. Here the consumers presence is necessary, and the service personnel render the whole service. Even courier services have low consumer involvement. Consumers rarely see their infrastructure. They interact telephonically with the courier company for a short while. We can provide standardized offerings of such services. The procedures are well defined. In the financial sector, the participation is limited, say in a bank branch, consumer is expected to fill in a pay in slip while depositing cash, and tender the cash across the counter, and get back duly stamped acknowledgement. But the bank staff does the
major portion of work. But in a health club or business management school there is higher level of consumer participation.
They take active part in a weight reduction programmed. They hold themselves responsible if the results are not satisfactory. They are very happy when the service provider tries to solve the problem. Because of high degree of participation, organizations design customized offerings for the consumers. Consumer participation is also an educative process. A consumer must master telephone banking or mobile banking before getting its benefits. Even internet banking is a participative process requiring effort on the part of the consumer. But consumers gain benefits on account of such participation, e.g., utility bills can be paid through internet from anywhere.
adviser must use intangible cues and thoughts to convey a message. It is now established that there are clear differences in information usage between goods and services. First, the difference is that consumers of services are less likely to purchase without information than those of goods. Second, the consumer of services will prefer personal sources to impersonal sources of information. And third, the basic characteristics of services have implications for communication strategy. For example, in hospitality industry, the intangible service offer is made tangible and represented in the promotional material and; customers decide to buy or not to buy on the strength of the description and representation of the service offer in the promotional material. Advertising is a paid form of persuasive promotion. The creativity is found to be an essential aspect of advertising, which increases the importance of professional excellence in making the advertising process productive. The professionals are supposed to take into consideration the following facts while advertising. This would help them in making possible creativity besides optimizing the advertisement budget Advertising for the mutual fund having offer document (OD), brochures, pamphlets, hoardings, posters, stickers, broadcasting advertisement.
Advertising Objectives:
Although, there could be a variety of objectives to promote or advertise the service, but the basic objectives of it are as follows: Make a strong impression of competency, honesty and sincerity (professional orientation to service transaction so as to win buyers confidence in sellers abilities to deliver the service). Should be able to use indirect selling techniques (creating derived demand or act as a buying consultant). Manager to maintain a fine image by positive word of mouth. Packaging and customization. Target Audience to be specified.
In mutual fund salesmanship is necessary because the buying of or investing in that industry is very risky from investor point of view. Normally a investor invest in mutual fund not in hundred and even thousands, some times investment ratio crosses the lakhs of rupees.
So it all depends on salesmanship, sales promotion tools and the guts of salesman (sales executive etc.). the sales promotion consist of advertisement as well oral communication between sales executive and potential buyer or investor. One can oblise the invester by the giving of proven track record (NAV) of that particular mutual fund. Besides this the education also matters from salesman point of view. If the sales executive is a MBA graduate then he/she can sell mutual fund more easily then any other.
Talking about the hierarchy of mutual fund industry (HDFC). There are various channels from which mutual fund is sold example
Mutual fund company Corporate agent Branch head Area manager/territory manager Senior sales executive
Sales executive Business associates Channel partners or direct selling agent Free lancer
As we talk earlier a perfect salesman should have the knowledge and guts to sell the complicated and a product which is also know as concept selling. The whole process is also known as personal selling. It consists of way of talking, communication skills and the most important the process of opening sales till the closing of sale (taking DD or Cheque).
the FII, business associates and previous units holders etc.. although the most of the work of marketing is formally done by the advertisement campaign (TRP) of paid advertisement on television channels, daily vernacular, English newspaper etc.
Cold calling
. The cold calling consists of marketing or selling the product directly to the
potential investor. Which is go through by meeting, face to face talk etc... In some cases the cold calling is converted into successful sale due to tale calling or other links. Cold calling is the root of selling of mutual funds.
It is the important part of selling strategies of mutual fund company that their should be maintainance of well communication between the hierarchy of the all members of distribution for mutual fund. Whether it is MD of the company or business associate. It is also necessary to communicate to the unit holder (in case of single unit holder also).
Besides the HDFC Mutual Fund there are more than twenty Five Companies. The Name of Mutual Fund Companies other than HDFC which proves to be hard competitor of it. The Names of Companies Listed till date are as follows:
ABN AMRO. AIG GLOBAL Investment Bank Of Baroda Benchmark Birla Sunlife MF Canara Robeco DBS Cholamadalam DSP Merrill Lynch Deutshe Escorts Fidelity Franklin Templeton HSBC ICICI Prudential ING
J P Morgan Kotak Mahindra Lotus India Optimix Principal Quantum. Reliance SBI Sahara Standard Chartered Sundaram BNP Paribas TATA Taurus.
Balanced Funds
HDFC Childrens Gift Fund Investment Plan HDFC Childrens Gift Fund Savings Plan HDFC Balanced Fund HDFC Prudence Fund
Debt Funds
HDFC Income Fund HDFC Liquid Fund HDFC Gilt Fund Short Term Plan HDFC Gilt Fund Long Term Plan HDFC Short Term Plan HDFC Floating Rate Income Fund Short Term Plan HDFC Floating Rate Income Fund Long Term Plan HDFC Liquid Fund PREMIUM PLAN HDFC Liquid Fund PREMIUM PLUS PLAN HDFC Short Term Plan PREMIUM PLAN HDFC Short Term Plan PREMIUM PLUS PLAN HDFC Income Fund Premium Plan HDFC Income Fund Premium Plus Plan
HDFC High Interest Fund HDFC High Interest Fund Short Term Plan HDFC Sovereign Gilt Fund Savings Plan HDFC Sovereign Gilt Fund Investment Plan HDFC Sovereign Gilt Fund Provident Plan HDFC Cash Management Fund Savings Plan HDFC Cash Management Fund Call Plan HDFC MF Monthly Income Plan Short Term Plan HDFC MF Monthly Income Plan Long Term Plan HDFC Cash Management Fund Savings Plus Plan HDFC Multiple Yield Fund
The Most of the Features of HDFC Mutual Fund having various Facilities are with that Company are(SIP, STP,SWAP) The description is as follows
As far as concern with mutual fund one can say that the facility of switching of funds made easier the investment point of view of common man. The various types of funds are prove to be a choice (various types) according to age factor. The mutual fund is a product which is sold in a great volume after any financial product loan. In last I would like to say that the coming time in future will be the time of
selling of mutual funds after the number of Fast Moving Consumer Goods (FMCG), daily needs and durable goods Sector.
Bibliography
Kotler Philip (Marketing Management) D. C. Anjaria (Mumbai edition) Still R. Richard, Cundiff W. Edward, Govoni A. P. Norman (Sales Management, Prentice Hall of India, low price edition) Newsletter (HDFC Mutual Fund) Newsletter (UTI Mutual Fund) House journal (Morgan Stenley) Financial Reports (J. M. Financial Mutual Fund) AMFI (Association of Mutual Funds in India, book for AMFI certification) The Economics Times (Delhi edition)