COMPANY PROFILE

OVERVIEW KARVY, is a premier integrated financial services provider, and ranked among the top five in the country in all its business segments, services over 16 million individual investors in various capacities, and provides investor services to over 300 corporate, comprising the who is who of Corporate India. KARVY covers the entire spectrum of financial services such as Stock broking, Depository Participants, Distribution of financial products - mutual funds, bonds, fixed deposit, equities, Insurance Broking, Commodities Broking, Personal Finance Advisory Services, Merchant Banking & Corporate Finance, placement of equity, IPOs, among others. Karvy has a professional management team and ranks among the best in technology, operations and research of various industrial segments. EARLY DAYS: The birth of Karvy was on a modest scale in 1981. It began with the vision and enterprise of a small group of practicing Chartered Accountants who founded the flagship company Karvy Consultants Limited. Company started with consulting and financial accounting automation, and carved inroads into the field of registry and share accounting by 1985. Since then, they have utilized their experience and superlative expertise to go from strength to strengthto better their services, to provide new ones, to innovate, diversify and in the process, evolved Karvy as one of Indias premier integrated financial service enterprise. Thus over the last 20 years Karvy has traveled the success route, towards building a reputation as an integrated financial services provider, offering a wide spectrum of services. And we have made this journey by taking the route of quality service, path breaking innovations in service, versatility in service and finallytotality in service.

KARVY GROUP COMPANIES (1) KARVY CONSULTANTS LIMITED

As the flagship company of the Karvy Group, Karvy Consultants Limited has always remained at the helm of organizational affairs, pioneering business policies, work ethic and channels of progress. Having emerged as a leader in the registry business, the first of the businesses that Karvy ventured into, company have now transferred this business into a joint venture with Computer share Limited of Australia, the worlds largest registrar. With the advent of depositories in the Indian capital market and the relationships that Company have created in the registry business, Karvy believe that they were best positioned to venture into this activity as a Depository Participant. Karvy were one of the early entrants registered as Depository Participant with NSDL (National Securities Depository Limited), the first Depository in the country and then with CDSL (Central Depository Services Limited). Today, Karvy service over 6 lakhs customer accounts in this business spread across over 250 cities/towns in India and are ranked amongst the largest Depository Participants in the country. With a growing secondary market presence, they have transferred this business to Karvy Stock Broking Limited (KSBL), their associate and a member of NSE, BSE and HSE. The corporate website of the company, www.karvy.com, gives access to in-depth information on financial matters including Mutual Funds, IPOs, Fixed Income Schemes, Insurance, Stock Market and much more. A link called Resource Center, devoted solely to research conducted by team of experts on various financial aspects like Sector Research, deals exclusively with in-depth analysis of the key sectors of the Indian economy. Besides, a host of other links like My Portfolio which acts as a personalized and customized financial measure, makes this site

extremely informative about investment options, market trends, news and also about our their company and each of the services offered here.

(2) KARVY STOCK BROKING LIMITED

Karvy Stock Broking Limited, one of the cornerstones of the Karvy edifice, flows freely towards attaining diverse goals of the customer through varied services. Creating a plethora of opportunities for the customer by opening up investment vistas backed by research-based advisory services. Here, growth knows no limits and success recognizes no boundaries. Helping the customer create waves in his portfolio and empowering the investor completely is the ultimate goal. Karvy is a Member of National Stock Exchange (NSE), The Bombay Stock Exchange (BSE), and The Hyderabad Stock Exchange (HSE).

(3) KARVY INVESTORS SERVICES LIMITED

Merchant Banking- Recognized as a leading merchant banker in the country, Karvy are registered with SEBI as a Category I merchant banker. This reputation was built by capitalizing on opportunities in corporate consolidations, mergers and acquisitions and corporate restructuring, which have earned us the reputation of a merchant banker. Raising resources for corporate or Government Undertaking successfully over the past two decades have given us the confidence to renew company focus in this sector. Karvy quality professional team and their work-oriented dedication have propelled company to offer value-added corporate financial services and act as a professional navigator for long term growth of companies clients, which includes leading corporate, State Governments, foreign institutional investors, public and private sector companies and banks, in Indian and global markets. Karvy financial advice and assistance in restructuring, divestitures, acquisitions, de-mergers, spin-offs, joint ventures, privatization and takeover defense mechanisms have elevated company relationship with the client to one based on unshakable trust and confidence.

(4) KARVY COMPUTERSHARE PVT. LIMITED

Karvy have traversed wide spaces to tie up with the worlds largest transfer agent, the leading Australian company, Computershare Limited. The company that services more than 75 million shareholders across 7000 corporate clients and makes its presence felt in over 12 countries across 5 continents has entered into a 50-50 joint venture with KARVY. Mutual Fund Services Karvy have attained a position of immense strength as a provider of across-the-board transfer agency services to AMCs, Distributors and Investors. Nearly 40% of the top-notch AMCs including prestigious clients like Deutsche AMC and UTI swear by the quality and range of services that company offer. Besides providing the entire back office processing, Karvy provide the link between various Mutual Funds and the investor, including services to the distributor, the prime channel in this operation. Karvy service enhancements such as Karvy Converz', a full-fledged call center, a top-line website (www.karvymfs.com), the m-investor' and many more, creating a galaxy of customer advantages. Issue Registry

In company voyage towards becoming the largest transaction-processing house in the Indian Corporate segment, KARVY have mobilized funds for numerous corporate, and emerged as the largest transactionprocessing house for the Indian Corporate sector. With an experience of handling over 700 issues, Karvy today, has the ability to execute voluminous transactions and hard-core expertise in technology applications have gained company the No.1 slot in the business. Karvy is the first Registry Company to receive ISO 9002 certification in India that stands testimony to its stature

Corporate Shareholder Services Karvy has been a customer centric company since its inception. Karvy offers a single platform servicing multiple financial instruments in its bid to offer complete financial solutions to the varying needs of both corporate and retail investors where an extensive range of services are provided with great volume-management capability. Today, Karvy is recognized as a company that can exceed customer expectations which is the reason for the loyalty of customers towards Karvy for all his financial needs. An opinion poll commissioned by The Merchant Banker Update and conducted by the reputed market research agency, MARG revealed that Karvy was considered the Most Admired in the registrar category among financial services companies.

(5) KARVY GLOBAL SERVICES LIMITED

The specialist Business Process Outsourcing unit of the Karvy Group. The legacy of expertise and experience in financial services of the Karvy Group serves us well as company enter the global arena with the confidence of being able to deliver and deliver well. Here company offer several delivery models on the understanding that business needs are unique and therefore only a customized service could possibly fit the bill. KARVY service matrix has permutations and combinations that create several options to choose from. KARVY is in re-engineering and managing processes or delivering new efficiencies, companys service meets up to the most stringent of international standards. Their outsourcing models are designed for the global customer and are backed by sound corporate and operations philosophies, and domain expertise. Providing productivity improvements, operational cost control, cost savings, improved accountability and a whole gamut of other advantages. KARVY operate in the core market segments that have emerging requirements for specialized services. Their wide vertical market coverage includes Banking, Financial and Insurance Services (BFIS), Retail and Merchandising, Leisure and Entertainment, Energy and Utility and Healthcare.

(6) KARVY COMMODITIES BROKING LIMITED

At Karvy Commodities, they are focused on taking commodities trading to new dimensions of reliability and profitability. They have made commodities trading, an essentially age-old practice, into a sophisticated and scientific investment option. Company enables trade in all goods and products of agricultural and mineral origin that include lucrative commodities like gold and silver and popular items like oil, pulses and cotton through a well-systematized trading platform. The technological and infrastructural strengths and especially the streetsmart skills make them an ideal broker. Their service matrix is holistic with a gamut of advantages, the first and foremost being their legacy of human resources, technology and infrastructure that comes from being part of the Karvy Group. Their wide national network, spanning the length and breadth of India, further supports these advantages. Regular trading workshops and seminars are conducted to hone trading strategies to perfection. Every move made is a calculated one, based on reliable research that is converted into valuable information through daily, weekly and monthly
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newsletters, calls and intraday alerts. Further, personalized service is provided here by a dedicated team committed to giving hassle-free service while the brokerage rates offered are extremely competitive. Karvys commitment to excel in this sector stems from the immense importance that commodity broking has to a cross-section of investors & dash; farmers, exporters, importers, manufacturers and the Government of India itself.

(7)KARVY INSURANCE BROKING PRIVATE LIMITED

At Karvy Insurance Broking Pvt. Ltd., they provide both life and non-life insurance products to retail individuals, high net-worth clients and corporate. With the opening up of the insurance sector and with a large number of private players in the business, they are in a position to provide tailor made policies for different segments of customers. In their journey to emerge as a personal finance advisor, they will be better positioned to leverage their relationships with the product providers and place the requirements of their customers appropriately with the product providers. With Indian markets seeing a sea change, both in terms of investment pattern and attitude of investors, insurance is no more seen as only a tax saving product but also as an investment product. By setting up a separate entity, we would be positioned to provide the best of the products available in this business to the customers. KARVY have wide national network, spanning the length and breadth of India, further supports these advantages. Further, personalized service is provided here by a dedicated team committed in giving hassle-free service to the clients.

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KARVY Alliances Karvy Computershare Private Limited is a 50:50 joint venture of Karvy Consultants Limited and Computershare Limited, Australia. Computershare Limited is world's largest -- and only global -- share registry, and a leading financial market services provider to the global securities industry. The joint venture with Computershare, reckoned as the largest registrar in the world, servicing over 60 million shareholder accounts for over 7,000 corporations across eleven countries spread across five continents. Computershare manages more than 70 million shareholder accounts for over 13,000 corporations around the world. Karvy Computershare Private Limited, today, is India's largest Registrar and Share Transfer Agent servicing over 300 corporate and mutual funds and 16 million investors. Quality Policy To achieve and retain leadership, Karvy shall aim for complete customer satisfaction, by combining its human and technological resources, to provide superior quality financial services. In the process, Karvy will strive to exceed Customer's expectations.

Quality Objectives As per the Quality Policy, Karvy will: Build in-house processes that will ensure transparent and harmonious relationships with its clients and investors to provide high quality of services. Establish a partner relationship with its investor service agents and vendors that will help in keeping up its commitments to the customers. Provide high quality of work life for all its employees and equip them with adequate knowledge & skills so as to respond to customer's needs. Continue to uphold the values of honesty & integrity and strive to establish unparalleled standards in business ethics.
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Use state-of-the art information technology in developing new and innovative financial products and services to meet the changing needs of investors and clients. Strive to be a reliable source of value-added financial products and services and constantly guide the individuals and institutions in making a judicious choice of same.

Achievements

Among the top 3 stock brokers in India (4% of NSE volumes) India's No. 1 Registrar & Securities Transfer Agents Top most Depository Participants Largest Network of Branches & Business Associates ISO 9002 certified operations by DNV Among top 10 Investment bankers Largest Distributor of Financial Products Adjudged as one of the top 50 IT uses in India by MIS Asia Full Fledged IT driven operations
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THEORETICAL FRAMEWORK

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Introduction:
Mutual funds are for everyone. Around the world, millions of investor invests in mutual funds because of their safety, ease of investing and the many advantages they offer. It is very necessary before investing that you know some basics of investing which are given below.It is best option for those investors who dont have time to manage their fund. Investments and you: Investment is never an easy process. However, a sound understanding of some basic concepts make the process of investment decision-making much easier and the experience much more enjoyable. The following step can help you get started on your path to becoming a successful investor: 1. Identify your financial needs and goals: The first step is to get a clear understanding of your own financial needs and goals. Ask yourself the question When do I need money and for what purpose? List down your financial goals and when they will materialise (daughters higher education after 6 years, purchase of a house after 10 years), and how much money you will need for the same. The answer will help you arrive at the time frame for your investment short term, medium term or long term.

Financial Goals

Amount Years required at achieve todays price goal Rs. 25 Lakhs 20 years

to Investment your horizon

Retirement

Long term

Daughters
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higher Education

Rs. 2 Lakhs

6 years

Long term

Buying a car

Rs. 4 Lakhs

2 years

Medium term

Sons computer Rs. 0.5 Lakhs course

6 months

Short term

2. Understand your tolerance to risk: Before making an investment decision, it is very necessary for an investor to know his risk tolerance limits. Will he be comfortable with fluctuations in the value of his investments? Or would he prefer to settle down for a lower return without many ups and downs. By knowing risk tolerance limit of himself an investor can decide his portfolio and also choose from a variety of financial investment tools , one which suit his portfolio the most. 3. Estimate your required rate of return: Your required rate of return depends on your financial goals and the time you have to achieve them. Take an example that your retirement goal at 58 years is Rs. 20 Lakhs and your monthly savings is Rs. 5000, your required rate of return depending on your current age would be: Present Age 43 years 48 years Returns 9.5 % 21.2%

As you can see, the later you start, the higher will be your required rate of return, hence as your investment horizon reduces, for the same level of saving you may need to take higher risk. Alternatively, if you were not
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willing to take a higher risk, you would have to save a higher amount every month- Rs 9800, almost twice the original savings required to achieve your target accumulation. These three steps give a very basic idea about how to invest, when an investor is seeking investment in different financial tools. Though there are different steps of investment in each financial tool, these acts as blue print for them too.

Mutual Funds and You:

What is a mutual fund? A mutual fund is a type of financial intermediary that pools the funds of investors who seek the same general investment objective and invests them in a number of different types of financial claims (e.g. equity shares, bonds, money market instrument). These pooled funds provide thousands of investors with proportional ownership of diversified managed by professional investment managers. Where do mutual funds invest? Broadly, mutual funds invest basically in three types of asset classes: Stocks: Stocks represent ownership or equity in a company. These are also called as shares. Bonds: These represent debt from companies, financial institutions or government agencies. Money Market Instruments: These include short term debt instrument such as treasury bills, certificates of deposits and inter bank money.

History of Mutual Funds in India: In India the setting up of Unit Trust of India (UTI) in 1963 marked the advent of mutual fund industry. Unit Trust of India was set up by an Act of Parliament. The purpose of establishing of Unit Trust of India was

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to give a fillip to the equity market. In the wake of Indo-China war of 1962, there was shortage of savings going into industrial investment for economic development. There was a need to mobilize adequate amount of risk capital for industrial enterprise. The household savings were sought to be channelized into primary and secondary market through units. However, in the initial years, the emphasis in UTI was on income product. MasterShare launched in 1986 ushered in the equity-oriented schemes in India. Unit Trust of India launched a variety of innovative products suited to meet diverse needs of investors, virtually the complete life cycle of investors.

Evolution of Mutual Fund in India: The mutual fund industry in India started in 1963 with the formation of Unit Trust of India, at the initiative of the Government of India and Reserve Bank the. The history of mutual funds in India can be broadly divided into four distinct phases. First Phase: 1964-1987 Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up by the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial Development Bank of India (IDBI) took over the regulatory and administrative control in place of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6, 700 crores of assets under management. Second Phase: 1987-1993 (Entry of Public Sector Funds) 1987 marked the entry of non- UTI, public sector mutual funds set up by public sector banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC). SBI Mutual Fund was the first non- UTI Mutual Fund established in June 1987 followed by Canbank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC established its mutual fund in June 1989 while GIC had set up its mutual fund in December 1990.

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At the end of 1993, the mutual fund industry had assets under management of Rs.47, 004 crores. Third Phase: 1993-2003 (Entry of Private Sector Funds) With the entry of private sector funds in 1993, a new era started in the Indian mutual fund industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year in which the first Mutual Fund Regulations came into being, under which all mutual funds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993. The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI (Mutual Fund) Regulations 1996 The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI (Mutual Fund) Regulations 1996 Fourth Phase: Since 2003 In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust of India with assets under management of Rs.29, 835 crores as at the end of January 2003, representing broadly, the assets of US 64 scheme, assured return and certain other schemes. The Specified Undertaking of Unit Trust of India, functioning under an administrator and under the rules framed by Government of India and does not come under the purview of the Mutual Fund Regulations. The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is registered with SEBI and functions under the Mutual Fund Regulations. With the bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76, 000 crores of assets under management and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund Regulations, and with recent mergers taking place among different private sector funds, the mutual fund industry has entered its current phase of consolidation and growth. As at the end of September, 2004, there were 29 funds, which manage assets of Rs.153108 crores under 421 schemes.
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The graph indicates the growth of assets over the years

Funds for All Reasons and All Seasons:

TYPES OF MUTUAL FUNDS: -

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Mutual Funds have specific investment objectives such as growth of capital, safety of principal current income or tax exempt income, one can select one fund or any number of different funds to help one meets ones specific goals. In general mutual fund fall under 3 general categories: -

Equity fund invest in shares of common stocks. Fixed income funds invest in government or corporate securities which offer fixed rate of returns. Balanced fund invest in a combination of both stocks and bonds.

AGGRESSIVE GROWTH FUNDS:These funds seek to provide maximum growth of capital with secondary emphasis on dividend or interest income. They invest in common stocks with a high potential for rapid growth and capital appreciation. Aggressive growth funds are suitable for those investors who can afford to assume the risk of potential loss in value of their investment in the hope of achieving substantial and rapid gains. They are not suitable for investors who must conserve their principal or who must maximize their current income. GROWTH FUNDS:Like aggressive growth funds, growth fund generally invests in stocks for growth rather than income. They are considered more conservative in their approach because they usually invest in established companies to achieve long-term growth. Growth fund provides low current income but the investor principal is more stable then it would be in an aggressive growth fund. While the growth potential may be less over the short term, many growth funds have superior long-term performance records.

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These funds are suitable for growth oriented investors but not investors who are unable to assume risk or who are dependent on maximizing current income from there investments. GROWTH AND INCOME FUNDS:Growth and income funds seek long-term growth of capital as well as current income. The investments strategies use to reach these goals vary among funds. Growth and income funds have low to moderate stability of principal and moderate potential for current income and growth. They are suitable for investors who can assume some risk to achieve growth of capital but want to maintain a moderate level of current income.

FIXED INCOME FUNDS:The goal of fixed income fund is to provide high current income consistent with the level of capital. Growth of capital is of secondary importance. Fixed income funds offer a higher level of current income than money market funds, but a lower stability of principal. Fixed income funds are suitable for investors who want to maximize current income and who can assume a degree of capital risk in order to do so. EQUITY FUNDS:Funds that invest in stocks represent the largest category of mutual fund. Generally the investment objective of this class of fund is long-term capital growth with some income. There are however many type of equity funds. BALANCED FUNDS:The Balanced funds aims to provide both growth and income. These funds invest in both shares and fixed income securities in the proportion
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indicated in their offer documents. It is an idea for investors who are looking for the combinations of income and moderate growth. MONEY MARKET FUNDS/ LIQUID FUNDS:For the cautious investors these funds provide a very high stability of principal while seeking a moderate to high current income. They invest in highly liquid; virtually risk free, short-term debt securities of agencies of the Indian government, banks and corporation and treasury bills. Because of their short-term investments, money market mutual funds are able to keep a virtually constant unit price; only the yield fluctuates. Money market funds are suitable for those investors who want high stability of principal and current income with immediate liquidity. SPECIALITY / SECTOR FUNDS:These funds invest in securities of a specific industry or sector of the economy such as health care, technology, leisure, utilities or precious metals. The funds enable investor to diversify holding among many companies within an industry, a more conservative approach than investing directly in one particular company. Sector funds offer a opportunity for sharp capital gains in cases where the funds industry is in favor but also entail the risk of capital losses when the industry is out of favor. While sectors funds restrict holdings to a particular industry, other specialty funds such as index funds gives investors a broadly diversified portfolio and attempt to mirror the performance of various market averages. OPEN ENDED SCHEMES:Open-ended schemes do not have a fixed maturity period. Investors can buy or sell units at NAV- related prices from and to the mutual fund on any business day. These schemes have unlimited capitalization, openended schemes do not have a fixed maturity, there is no cap on the amount you can buy from the fund and the unit capital keep growing. These funds are not generally listed on any exchange. Open-ended schemes are preferred for their liquidity. Such funds can issue and redeem units any time during the life of schemes. Hence

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unit capital of open-ended funds can fluctuate on a daily basis. The advantages of open ended schemes are: Any time exit option Any time enter option. CLOSE ENDED SCHEMES:Close-ended schemes have fixed maturity periods. Investors can buy into these funds during the period when these funds are open in the initial issue. After that such scheme cannot issue new units except in case of bonus or right issue. However after the initial issue you can buy or sell units of the schemes on the stock exchange where they are listed. The market price of the unit could vary from the NAV of the schemes due to demand and supply factor

HOW LONG TO KEEP INVESTMENT TO GET MAXIMUM RETURNS Technically open-ended funds you can withdraw your investments even within a week, but to get desired returns positive time frame is required are:

Funds Equity Funds Balanced Funds

Time Period 3 Years (plus) 18 months to 3 Years

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MIPs Income Funds Liquid Funds

1 Year (plus) 6 months to 1 Year few days to 6 months

WHAT RETURNS CAN I EXPECT IF I KEEP MY MONEY FOR SUGGESTED TIME FRAMES

Funds Sector funds Balance funds MIPs Pension Plans

Returns 22% to 25% p.a 15% to 18% p.a 12% to 15% p.a

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Income Funds Liquid Funds

10% to 12% p.a 7% to 9% p.a

The above-mentioned returns in the table are indicative and not assured. All investments in MUTUAL FUNDS are securities and are subject to market risk and the NAVs of the schemes may go up and down depending upon the factors and forces affecting the security market including the fluctuations in the internal rates .The past performance of the MUTUAL FUNDS is not indicative of future performance.

THE RISK RETURNS GRAPHS FOR VARIOUS FUNDS:-

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Sector Funds R E T U R N S Equity Funds Balanced Funds Income Funds

Liquid Funds
RISKS

The above Graph shows the Risk and Returns generated by different Funds. Liquid Funds are less Risky and also generate less Returns where as Sector Funds are more Risky but generate more Returns by the example of above two Funds it is clear that Risk and Returns are directly proportional to each other. Other Funds like Equity Funds, Balanced Funds and Income Funds are also gives the same percentage of Returns as the Risk involved.

ADVANTAGE OF MUTUAL FUND:The advantages of investing in a Mutual Fund are: Diversification: The best mutual funds design their portfolios so individual investments will react differently to the same economic conditions. For example, economic conditions like a rise in interest rates may cause certain securities in a diversified portfolio to decrease in value. Other securities in the portfolio will respond to the same economic conditions by increasing in value. When a portfolio is balanced in this way, the value of the overall portfolio should gradually increase over time, even if some securities lose value. Professional Management: Most mutual funds pay topflight professionals to manage their investments. These managers decide what securities the fund will buy and sell.

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Regulatory oversight: Mutual funds are subject to many government regulations that protect investors from fraud. Liquidity: It's easy to get your money out of a mutual fund. Write a check, make a call, and you've got the cash. Convenience: You can usually buy mutual fund shares by mail, phone, or over the Internet. Low cost: Mutual fund expenses are often no more than 1.5 percent of your investment. Expenses for Index Funds are less than that, because index funds are not actively managed. Instead, they automatically buy stock in companies that are listed on a specific index. Transparency: Mutual Fund schemes are said to be Transparent because they show the clear allocation of Funds to Investors. Flexibility: Mutual funds are flexible because they change time to time and also if an Investor wants his money back before the maturity of the Fund He/she can easily redeem it.

DRAWBACKS OF MUTUAL FUNDS:Mutual funds have their drawbacks and may not be for everyone: No Guarantees: No investment is risk free. If the entire stock market declines in value, the value of mutual fund shares will go down as well, no matter how balanced the portfolio. Investors encounter fewer risks when they invest in mutual funds than when they buy and sell stocks on their own. However, anyone who invests through a mutual fund runs the risk of losing money. Fees and commissions: All funds charge administrative fees to cover their day-to-day expenses. Some funds also charge sales commissions or "loads" to compensate brokers, financial consultants, or financial planners. Even if you don't use

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a broker or other financial adviser, you will pay a sales commission if you buy shares in a Load Fund. Taxes: During a typical year, most actively managed mutual funds sell anywhere from 20 to 70 percent of the securities in their portfolios. If your fund makes a profit on its sales, you will pay taxes on the income you receive, even if you reinvest the money you made. Management risk: When you invest in a mutual fund, you depend on the fund's manager to make the right decisions regarding the fund's portfolio. If the manager does not perform as well as you had hoped, you might not make as much money on your investment as you expected. Of course, if you invest in Index Funds, you forego management risk, because these funds do not employ managers.

ASSOCIATION OF MUTUAL FUNDS IN INDIA:With the increase in mutual fund players in India, a need for mutual fund association in India was generated to function as a non-profit organization. Association of Mutual Funds in India (AMFI) was incorporated on 22nd August 1995. AMFI is an apex body of all Asset Management Companies (AMC), which has been registered with SEBI. Till date all the AMCs are that have launched mutual fund schemes are its members. It functions under the supervision and guidelines of its Board of Directors. Association of Mutual Funds India has brought down the Indian Mutual Fund Industry to a professional and healthy market with ethical lines enhancing and maintaining standards. It follows the principle of both protecting and promoting the interests of mutual funds as well as their unit holder

The objectives of Association of Mutual Funds in India:-

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The Association of Mutual Funds of India works with 30 registered AMCs of the country. It has certain defined objectives, which juxtaposes the guidelines of its Board of Directors. The objectives are as follows: This mutual fund association of India maintains high professional and ethical standards in all areas of operation of the industry. It also recommends and promotes the top class business practices and code of conduct which is followed by members and related people engaged in the activities of mutual fund and asset management. The agencies that are by any means connected or involved. In the field of capital markets and financial services also involved in this code of conduct of the association. AMFI interacts with SEBI and works according to SEBIs guidelines in the mutual fund Industry. Association of Mutual Fund in India do represent the Government of India, the Reserve Bank of India and other related bodies on matters relating to the Mutual Fund Industry. It develops a team of well qualified and trained Agent distributors. It implements a program of training and certification for all intermediaries and other engaged in the mutual fund industry. AMFI undertakes all India awareness programmed for investors in order to promote proper understanding of the concepts and working of mutual funds. At last but not the least association of mutual fund of India also disseminate informations on Mutual Fund Industry and undertakes studies and research either directly or in association with other bodies.

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Regulatory Aspects: Schemes of mutual funds: The Asset management company shall launch no schemes unless the trustees approve such scheme and a copy of the offer has been filed with the Board. Every mutual fund shall along with the offer documents of each scheme pay filing fees. The offer document shall contain disclosures which are adequate in order to enable the investors to make informed investment decision including the disclosure non maximum investments proposed to be made by the scheme in the listed securities of the group companies of the sponsor. A close-ended scheme shall be fully redeemed at the end of the maturity period. Unless a majority of the unit holders otherwise decide for its rollover by passing a resolution. The mutual fund and asset management company shall be liable to refund the application money to the applicants:1. If the mutual fund fails to receive the minimum subscription amount referred to in clause (i) of sub- regulation. 2. If the moneys received from the applicants for units are in excess of subscription as referred to in clause (ii) of subregulation.

The asset management company shall issue to the applicant whose: Application has been accepted, unit certificates or a statement of accounts Specifying the number of units allotted to the applicant as soon as possible But not later than six weeks from the date of closure of the initial Subscription list and or from the date of receipt of the request from the unit Holders in any open ended scheme.

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Rules Regarding Advertisement:The offer document and advertisement materials shall not be misleading or contain any statement or opinion, which are incorrect or false.

Investment objectives and valuation policies:The price at which the units may be subscribed or sold the price at which such unit may at any time be repurchased by the mutual fund shall be made available to the investors. General Obligation: Every asset management company for each scheme shall keep and maintain proper book of accounts, records and document, for each scheme so as to explain its transaction and to disclose at any point of time the financial position of each scheme and in particular give a true and fair view of the state of affairs of the fund and intimate to the board the place where such books of accounts, records and documents are maintained. The financial year for all the scheme shall end as of March 31 of each year. Every mutual fund or the asset management company shall prepare in respect of each financial year an annual report and annual statement of accounts of the schemes and the fund as specified in Eleventh Schedule. Every mutual fund shall have the annual statement of accounts audited by an auditor who is not in any way associated with the auditor of the asset management companies.

Procedure for Action In Case Of Default:On and from the date of the suspension of the certificate or the approval, as the case may be, the mutual fund, trustees or asset management company, during the period of suspension and shall be
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subject to the direction of the Board with regard to any records, documents, or securities that may be in its custody or control relating to its activities as mutual funds, trustees or the asset management company.

Restrictions on Investments: A mutual fund scheme shall not invest more than 15% of its NAV in debt instrument issued by a single issuer, which are rated not below investment grade by a credit rating agency authorize to carry out such activity under the act. Such investment limit may be extended to 20% of the NAV of the scheme with the prior approval of the Board of Trustees and the Board of Asset Management Company. A mutual fund Scheme shall not invest more than 10% of its NAV in unrated debt instrument issued by a single issuer and the total investment in such instruments shall not exceed 25% of the NAV of the Board of Trustees and the Board of Asset management. No mutual funds under all its schemes should own more than 10% of any companys paid up capital carrying voting rights. Such transfers are done at the prevailing market price for quoted instrument on spot basis. The securities so transferred shall be in conformity with the investment objectives of the scheme to which such transfer has been made. A scheme may invest in another scheme under the same asset management company or any other mutual fund without charging any fees, provided that aggregated intercourse inter scheme investment made by all schemes under the same management or in schemes under the management of any other asset management company shall not exceed 5% of the net asset value of the mutual fund.

35

The initial issue expenses in respect of any scheme may not exceed 6% of the funds raised under that scheme. Every mutual fund shall buy and sell securities on the basis of deliveries and shall in all cases of purchases, take delivery of relative securities and in all cases of sale, deliver the securities and shall in no case put itself in a position whereby it has to make short sale or carry forward transaction or engage in Badla finance. Every mutual fund shall get the securities purchased or transferred in the name of the mutual fund on account of the concerned scheme, wherever investments are intended to be of long-term nature. Pending deployment of funds of a scheme a mutual fund can invest the funds of the scheme in short term deposits of scheduled commercial banks. No mutual fund scheme shall make any investment in; 1. Any unlisted security of an associate or group company of the sponsor or 2. Any security issued by way of private placement by an associate or group company of the sponsor. 3. The listed securities of group companies of the sponsor which is in excess of 30% of the net assets (of all the schemes of a mutual fund) 4. No mutual fund scheme shall invest more than 105 of its NAV in the equity shares or equity related instrument of any company. Provided that, the limit of 10 percent shall not be applicable for investments in index fund or sector or industry specific schemes. 5. A Mutual fund scheme shall not invest more than 5% of its NAV in the equity shares or equity related investments in case of open-ended schemes and 10 % of its NAV in case of close ended schemes.

36

Some facts for the growth of mutual funds in India: 100% growth in the last 6 years. Number of foreign AMCs is in the queue to enter the Indian markets like Fidelity Investments, US based, with over US$1trillion assets under management worldwide. Our saving rate is over 23%, highest in the world. Only channelizing these savings in mutual funds sector is required. We have approximately 29 mutual funds which is much less than US having more than 800. There is a big scope for expansion. 'B' and 'C' class cities are growing rapidly. Today most of the mutual funds are concentrating on the 'A' class cities. Soon they will find scope in the growing cities. Mutual fund can penetrate rural like the Indian insurance industry with simple and limited products. SEBI allowing the MF's to launch commodity mutual funds.

37

RESEARCH METHODOLOGY

38

MEANING OF RESEARCH A research is a careful investigation or enquiry, especially through search foe new facts in any branch of knowledge. It is a systemized effort to gain more knowledge. Research Methodology is a way to systematically solve the research problem. It includes not only the research methods, but also the logic behind using the methods. The methods of research used in this project were as follows: Analytical Research Applied Research Analytical Research:In analytical research the researcher has to use the facts already available, and analyze these to make the critical evaluation of the material. In this project I have used many raw data from the various sources and analyzed it for underlying trends. Applied Research:Applied Research aims at finding a solution for an immediate problem. Research aimed at certain conclusions (say a solution) facing a concrete social or business problem is an example of applied research. Thus the central aim of applied research is to find a solution for some pressing practical problem.
39

In this project, in the last section, by means of assumptions I have found the feasibility of a project that the organization means to undertake. The analysis of the trends followed by the mutual funds was Analytical Research.

OBJECTIVE OF RESEARCH METHODOLOGY It intends, verifies or correct knowledge. It enables us to have a better understanding of our world. It aids in purposive planning. Research initiates, formulates, deflects and clarifies theories. METHODS OF DATA COLLECTION Data is primarily of two kinds. 1. Primary data. 2. Secondary data. Secondary data may be defined as a data that has been collected earlier for some purpose other than the purpose of the present study. Any data that is available to the prior commencement of the research project is secondary data and it is called historic data.

USES OF SECONDARY DATA It acts as a reference for the present study. The secondary data can be the useful benchmark on which the findings of the study can be tested. At times it may be the only source of data.

40

SOURCES OF SECONDARY DATA Published sources Unpublished sources

Data collection methods can be classified as follows Observations Interviewing Experimentation Simulations Projective techniques

In this projects the two methods of collection were used Interviewing Published source of data in the form of fact sheets

INTERVIEWING It is the most commonly used method of data collection. It is two ways purposive communication between interviewer and the respondent aimed at obtaining and recording information pertinent to the subject matter of the study.

41

DATA ANALYSIS AND INTERPRETATION

42

RELIANCE EQUITY FUND - GROWTH

OBJECTIVE The primary investment objective of the scheme is to seek to generate capital appreciation & provide long-term growth opportunities by investing in a portfolio constituted of equity & equity related securities of top 100 companies by market capitalization & of companies which are available in the derivatives segment from time to time and the secondary objective is to generate consistent returns by investing in debt and money market securities. Scheme Performance (%) as on Sep 15, 2011 1 Month 3 Month 6 Month 1 Year 3 Year
-0.65 -8.99 -7.66 -23.07 0.02

5 Year
2.96

Since Inception 3.71

Top 10 Holdings as on Jun 29, 2007

43

Company Other Equities Reliance Communication Ventures Ltd. Punj Lloyd Ltd. State Bank of India Grasim Industries Ltd HCL Technologies Ltd. Reliance Industries Ltd Divis Laboratories Limited Mahanagar Telephone Nigam Ltd Indian Petrochemicals Corporation Ltd

Nature EQ EQ EQ EQ EQ EQ EQ EQ EQ EQ

Value (Cr.) % 343.84 9.45 282.74 7.77 259.76 7.14 203.3 5.59 195.42 5.37 173.69 4.78 169.15 4.65 162.86 4.48 146.54 4.03 125.24 3.44

Fund Information Type of Scheme Nature of Scheme Inception Date Face Value(Rs/Unit) Fund Size (Rs. in crores) Increase/Decrease since May 31, 2007 (Rs. in crores) Minimum Investment (Rs) Purchase Redemptions NAV Calculation Open Ended Equity Mar 28, 2006 10 3636.99 on Jun 29, 2007 -163.48 5000 Daily Daily Amount Bet. 0 to 19999999 then Entry load is 2.25%. and Amount Bet. 20000000 to 49999999 then Entry load is 1.25%. and Amount greater than 50000000 then Entry load is 0%. If redeemed bet. 0 Months to 6 Months; and Amount Bet. 0 to 49999999 then Exit load is

Entry Load

Exit Load

44

1%. If redeemed bet. 6 Months to 12 Months; and Amount Bet. 0 to 49999999 then Exit load is 0.5%. and Amount greater than 50000000 then Exit load is 0%.

Top Industry Allocation as on Jun 29, 2007

Diversified Telecom Miscellaneous Banks Finance Pharmaceuticals Entertainment Computers - Software & Education Auto & Auto ancilliaries Petrochemicals Asset Allocation as on Jun 29, 2007 Equity 86.1 Debt 0 13.9

12.1858% 11.8031% 9.4539% 8.6294% 7.1422% 6.5319% 5.2821% 4.7756% 4.1629% 3.4436% Money Market

45

Net Asset Value (Rs/Unit)

13.29

As On Jul 25, 2007

Change in Portfolio(Sector-Wise)(%age)

46

14

12

11

10

Jun 29, 2007 12

May 31, 2007

A B C D E F G

Diversified Telecom Miscellaneous Banks Finance Pharmaceuticals Entertainment

SBI MAGNUM EQUITY FUND - GROWTH

47

OBJECTIVE The scheme invests in companies having sustainable competitive advantage owing to their leadership in either technology, brands, distribution network and adopts bottom-up approach in choosing companies. Scheme Performance (%) as on Jul 25 , 2007 14 days 5.76 1 month 10.68 3 months 15.63 1 year 62.2 3 yrs* 50.45 Inception* 12.81

Top 10 Holdings as on Jun 29, 2007 Company Nature Kotak Mahindra Bank Ltd. EQ Bharati Tele - Ventures EQ Bharat Heavy Electricals Ltd EQ Gujarat Ambuja Cements Ltd EQ Infosys Technologies Ltd EQ Larsen & Toubro Limited EQ Jindal Steel and Power Ltd. EQ Mahindra & Mahindra Ltd EQ JaiPrakash Associates Ltd. EQ Reliance Industries Ltd EQ

Value(Cr) 28.63 23.82 23.1 16.2 14.22 13 12.91 12.28 11.48 11.06

% 9.58 7.97 7.73 5.42 4.76 4.35 4.32 4.11 3.84 3.7

FUND INFORMATION

48

Type of Scheme Nature of Scheme Inception Date Face Value(Rs/Unit) Fund Size (Rs. in crores) Increase/Decrease since May 31, 2007 (Rs. in crores) Rolled Over To Previous Name Minimum Investment (Rs) Purchase Redemptions NAV Calculation

Open Ended Equity Jan 1, 1991 10 298.84 on Jun 29, 2007 1.88 Open Ended SBI Magnum Multiplier 1000 Daily Daily Amount Bet. 0 to 49999999 then Entry load is 2.25%. and Amount greater than 50000000 then Entry load is 0%. If redeemed bet. 0 Months to 6 Months; and Amount Bet. 0 to 49999999 then Exit load is 1%. and Amount greater than 50000000 then Exit load is 0%

Entry Load

Exit Load

Last Dividend Declared 50 %

On Oct 4, 2006
49

Top Industry Allocation as on Jun 29, 2007 Diversified Telecom Banks Auto & Auto ancilliaries Electricals & Electrical Equipments Pharmaceuticals Cement Housing & Construction Computers - Software & Education Entertainment Asset Allocation as on Jun 29, 2007 Equity 94.26 Debt 0 Money Market 5.74 13.85% 10.45% 9.58% 8.2% 7.73% 6.9% 6.39% 5.7% 4.76% 4.67%

Change in Portfolio(Sector-Wise)(%age)

50

14 14 -

10 11

10 9

8 9

8 7

7 7

6 6

Jun 29, 2007

May 31, 2007

A B C D

Diversified Telecom Banks Auto & Auto ancilliaries Electricals & Electrical E Equipments F Pharmaceuticals G Cement Net Asset Value (Rs/Unit) 33.06 As On Jul 25, 2007

51

RELIANCE TAX SAVER FUND - GROWTH

OBJECTIVE The primary objective of the scheme is to generate long-term capital appreciation from a portfolio that is invested predominantly in equity and equity related instruments.

Scheme Performance (%) as on Jul 25 , 2007

14 days 0.38

1 month 6.75

3 months 12.37

1 year 54.39

3 yrs* NA

Inception* 28.65

Top 10 Holdings as on Jun 29, 2007 Company Other Equities Areva T and D India Ltd. Alstom Projects India Ltd. Satyam Computer Services Ltd Tata Consultancy Services Ltd. KSB Pumps Ltd Eicher Motors Ltd Indian Hotels Co Ltd Walchandnagar Industries Ltd Cummins India Ltd

Nature EQ EQ EQ EQ EQ EQ EQ EQ EQ EQ

Value (Cr.) % 207.84 11.63 136.7 7.65 102.95 5.76 74.9 4.19 68.96 3.86 67.09 3.75 61.15 3.42 60.36 3.38 54.61 3.05 50.51 2.83

52

Fund Information Type of Scheme Nature of Scheme Inception Date Face Value(Rs/Unit) Fund Size (Rs. in crores) Increase/Decrease since 2007 (Rs. in crores) Minimum Investment (Rs) Purchase Redemptions NAV Calculation May 31,

Open Ended Equity Aug 23, 2005 10 1787.75 on Jun 29, 2007

84.31

500 Daily Daily Amount Bet. 0 to 19999999 then Entry load is 2.25%. and Amount Bet. 20000000 to 49999999 then Entry load is 1.25%. and Amount greater than 50000000 then Entry load is 0%.

Entry Load

Exit Load

Exit Load is 0%.

53

Top Industry Allocation as on Jun 29, 2007 Miscellaneous Computers - Software & Education Auto & Auto ancilliaries Engineering & Industrial Machinery Power Generation, Transmission & Equip Cement Hotels & Resorts Diversified Metals Chemicals Tax Benefits u/s 88(112) of Income Tax Act, 1961 20.3535% 13.2182% 11.6734% 11.5131% 5.7587% 3.9378% 3.3763% 3.3688% 3.0413% 1.9472%

Asset Allocation as on Jun 29, 2007 Equity 88.74 Debt 0 Money Market 11.26

Change in Portfolio(Sector-Wise)(%age)

54

20 18 -

13 12

12 19

12 11

3 Jun 29, 2007 May 31, 2007

A B C D E F G

Miscellaneous Computers - Software & Education Auto & Auto ancilliaries Engineering & Industrial Machinery Power Generation, Transmission & Equip Cement Hotels & Resorts

Net Asset Value (Rs/Unit)

15.81

As On Jul 25, 2007

SBI MAGNUM TAX GAIN SCHEME 93 - GROWTH

55

OBJECTIVE To provide tax saving u/s 80CCB and long term capital gains by investing in equities. Scheme Performance (%) as on Jul 25 , 2007 14 days 1 month 3 months 1 year 2.28 5.96 NA NA

3 yrs* NA

Inception* 65.37

Top 10 Holdings as on Jun 29, 2007 Company Nature Term Deposit Debt Reliance Industries Ltd EQ Reliance Communication Ventures Ltd. EQ JaiPrakash Associates Ltd. EQ Infosys Technologies Ltd EQ Welspun Gujarat Stahl Rohren Ltd EQ Crompton Greaves Ltd EQ Infrastructure Development Finance Debt company Bharat Petroleum Corporation Ltd EQ Thermax Limited EQ

Value (Cr.) % 100.1 4.61 83.81 3.86 76 3.5 58.63 2.7 55.8 2.57 55.59 2.56 54.5 2.51 49.94 47.33 46.47 2.3 2.18 2.14

Fund Information
56

Type of Scheme Nature of Scheme Inception Date Face Value(Rs/Unit) Fund Size (Rs. in crores) Increase/Decrease since May 31, 2007 (Rs. in crores) Rolled Over To Minimum Investment (Rs) Purchase Redemptions NAV Calculation Entry Load Exit Load

Open Ended Equity May 7, 2007 10 2171.31 on Jun 29, 2007

125.19

Open Ended 500 Daily Daily Amount Bet. 0 to 49999999 then Entry load is 2.25%. and Amount greater than 50000000 then Entry load is 0%. Exit Load is 0%.

Tax Benefits u/s 88 of Income Tax Act, 1961

Top Industry Allocation as on Jun 29, 2007 Diversified 11.6%

57

Computers - Software & Education Cement Finance Oil & Gas, Petroleum & Refinery Telecom Electricals & Electrical Equipments Housing & Construction Steel Engineering & Industrial Machinery

8.77% 6.09% 5.48% 5.17% 4.69% 4.68% 4.29% 4.26% 3.77%

Asset Allocation as on Jun 29, 2007 Equity Debt 79.42 7.32

Money Market 13.26

Net Asset Value (Rs/Unit)

50 .31

As On Jul 25, 2007

Change in Portfolio(Sector-Wise)(%age)

58

12 8 -

9 8

6 6

5 2

5 4

5 4

5 4

Jun 29, 2007

May 31, 2007

Diversified Computers - Software & B Education C Cement D Finance Oil & Gas, Petroleum & E Refinery F Telecom Electricals & Electrical G Equipments

59

RELIANCE PHARMA FUND - GROWTH OBJECTIVE To generate consistent returns by investing in equity or fixed income securities of pharma and other associated companies. Scheme Performance (%) as on Jul 25 , 2007 14 days -3.05 1 month 3.41 3 months 22.49 1 year 72.96 3 yrs* 37.24 Inception* 36.32

Top 10 Holdings as on Jun 29, 2007 Company Ankur Drugs & Pharna Ltd. Divis Laboratories Limited Dishman Pharmaceuticals & Chemicals Sun Pharmaceuticals Industries Ltd FDC Ltd Aurobindo Pharma Ltd Lupin Ltd. Aventis Pharma India Ltd. Ranbaxy Laboratories Ltd Torrent Pharmaceuticals Ltd

Nature EQ EQ EQ EQ EQ EQ EQ EQ EQ EQ

Value (Cr.) 23.57 23.4 15.28 10.25 9.16 8.1 7.32 7.23 5.33 5.1

% 16.69 16.57 10.82 7.26 6.49 5.74 5.18 5.12 3.77 3.61

Asset Allocation as on Jun 29, 2007 Equity Debt 94.25 0

Money Market 5.75

60

Fund Information Type of Scheme Nature of Scheme Inception Date Face Value(Rs/Unit) Fund Size (Rs. in crores) Increase/Decrease since May 31, 2007 (Rs. in crores) Minimum Investment (Rs) Purchase Redemptions NAV Calculation Entry Load Exit Load Open Ended Equity May 26, 2004 10 141.22 on Jun 29, 2007 11.07 5000 Daily Amount Bet. 0 to 19999999 then Entry load is 2.25%. and Amount Bet. 20000000 to 49999999 then Entry load is 1.25%. and Amount greater than 50000000 then Entry load is 0%. Exit Load is 0%.

Top Industry Allocation as on Jun 29, 2007 Pharmaceuticals Miscellaneous 93.1278% 1.1228%

Net Asset Value (Rs/Unit) 26.3777 As On Jul 25, 2007

61

SBI MAGNUM SECTOR UMBRELLA - PHARMA FUND GROWTH OBJECTIVE The scheme aims to provide the investors maximum growth opportunity through equity investment in stocks of Pharma Sector. Scheme Performance (%) as on Jul 25 , 2007 14 days 1 month 3 months 1 year -1.39 0.05 3.88 28.48 Top 10 Holdings as on Jun 29, 2007 Company Dishman Pharmaceuticals & Chemicals Glaxo Smithkline Pharmaceuticals Ltd Vimta Labs Ltd Orchid Chemicals & Pharmaceuticals Ltd Lupin Ltd. Aventis Pharma India Ltd. Wockhardt Limited Pfizer Ltd Indoco Remedies Ltd. Ranbaxy Laboratories Ltd

3 yrs* 33.8

Inception* 17.86

Nature EQ EQ EQ EQ EQ EQ EQ EQ EQ EQ

Value (Cr.) % 9.21 18.72 5.54 11.26 5.26 10.68 4.83 9.82 4.7 9.55 4.5 9.14 3.93 7.99 3.2 6.51 3.18 6.46 2.93 5.96

Asset Allocation as on Jun 29, 2007 Equity Debt 100.1 0

Money Market -0.1

62

Fund Information Type of Scheme Nature of Scheme Inception Date Face Value(Rs/Unit) Fund Size (Rs. in crores) Increase/Decrease since May 31, 2007 (Rs. in crores) Minimum Investment (Rs) Purchase Redemptions NAV Calculation Entry Load Open Ended Equity Jul 3, 1999 10 49.22 on Jun 29, 2007 -1.01 2000 Daily Daily Amount Bet. 0 to 49999999 then Entry load is 2.25%. and Amount greater than 50000000 then Entry load is 0%. If redeemed bet. 0 Months to 6 Months; and Amount Bet. 0 to 49999999 then Exit load is 1%. and Amount greater than 50000000 then Exit load is 0%.

Exit Load

Last Dividend Declared 30 % On Sep 6, 2004 97.2% 2.9% Top Industry Allocation as on Jun 29, 2007 Pharmaceuticals Diversified Net Asset Value (Rs/Unit) 36.95 As On Jul 25, 2007

63

RELIANCE REGULAR SAVINGS FUND - BALANCED GROWTH OBJECTIVE The primary investment objective of this option is to generate consistent returns and appreciation of capital by investing in a mix of securities comprising of equity, equity related instruments & fixed income instruments.

Scheme Performance (%) as on Jul 25 , 2007 14 days 1 month 3 months 1 year 4.08 7.03 9.68 18.67 Top 10 Holdings as on Jun 29, 2007 Company Hindustan Petroleum Corporation Ltd JaiPrakash Associates Ltd. Tata Consultancy Services Ltd. Voltas Ltd New Delhi Television ICICI BANK LTD. Hinduja TMT Ltd Zee News Limited Bharti Airtel Ltd Bank of Baroda

3 yrs* NA

Inception* 12.73

Nature EQ EQ EQ EQ EQ EQ EQ EQ EQ EQ

Value (Cr.) 1.4 1.3 1.15 1.11 1.04 0.96 0.94 0.92 0.84 0.81

% 6.13 5.71 5.03 4.87 4.58 4.19 4.1 4.03 3.66 3.55

Asset Allocation as on Jun 29, 2007 Equity Debt 68.33 0

Money Market 31.67

64

Fund Information Type of Scheme Nature of Scheme Inception Date Face Value(Rs/Unit) Fund Size (Rs. in crores) Increase/Decrease since May 31, 2007 (Rs. in crores) Previous Name Minimum Investment (Rs) Purchase Redemptions NAV Calculation Open Ended Equity & Debt May 10, 2005 10 22.83 on Jun 29, 2007 -1.29 Reliance Regular Savings Fund Hybrid 500 Daily Daily Amount Bet. 0 to 19999999 then Entry load is 2.25%. and Amount Bet. 20000000 to 49999999 then Entry load is 1%. and Amount greater than 50000000 then Entry load is 0%. Exit Load is 0%.

Entry Load

Exit Load

Top Industry Allocation as on Jun 29, 2007 Entertainment Computers - Software & Education Banks Oil & Gas, Petroleum & Refinery Housing & Construction Diversified Telecom Pharmaceuticals Auto & Auto ancilliaries Finance

12.6991% 12.2597% 7.7365% 6.1319% 5.7149% 4.8731% 3.6617% 3.369% 3.2596% 2.8176%

65

Change in Portfolio(Sector-Wise)(%age) 13 9 12 12 8 4 6 8 6 7 5 4 4 4 Jun 29, 2007 May 31, 2007

Entertainment Computers - Software & B Education C Banks Oil & Gas, Petroleum & D Refinery E Housing & Construction F Diversified G Telecom

Net Asset Value (Rs/Unit)

12.9355

As On Jul 25, 2007

66

SBI MAGNUM BALANCED FUND - GROWTH OBJECTIVE The fund aims to provide to its Investors growth through capital appreciation. It also plans to provide periodic income through declaration of dividends. Scheme Performance (%) as on Jul 25 , 2007 14 days 1 Declared 3 months 1 year Last Dividend month 1.6420 % 5.36 9.64 On Feb 3, 2004 42.21 Top 10 Holdings as on Jun 29, 2007 Company Term Deposit Reliance Industries Ltd IVRCL Infrastructure & Projects Ltd. Citicorp Finance Bharat Heavy Electricals Ltd Housing Development Finance Corporation Ltd SKF Bearings India Ltd Shree Cement Ltd Bharati Tele - Ventures Tata Consultancy Services Ltd.

3 yrs* 43.73

Inception* 18.86

Nature Debt EQ EQ Debt EQ Debt EQ EQ EQ EQ

Value (Cr.) 39.99 15.31 11.32 10.93 10.58 9.87 9.87 9.55 8.42 8.39

% 13.53 5.18 3.83 3.7 3.58 3.34 3.34 3.23 2.85 2.84

67

Fund Information Type of Scheme Open Ended Nature of Scheme Equity & Debt Inception Date Oct 31, 1995 Face Value(Rs/Unit) 10 Fund Size (Rs. in crores) 295.54 on Jun 29, 2007 Increase/Decrease since May 31, -3.51 2007 (Rs. in crores) Previous Name SBI Magnum Open End Minimum Investment (Rs) 1000 Purchase Redemptions Daily NAV Calculation Daily Amount Bet. 0 to 49999999 then Entry load is 2.25%. and Amount Entry Load greater than 50000000 then Entry load is 0%. If redeemed bet. 0 Months to 6 Months; and Amount Bet. 0 to Exit Load 49999999 then Exit load is 1%. and Amount greater than 50000000 then Exit load is 0%.

Asset Allocation as on Jun 29, 2007 Equity 68.25 Debt 25.68 Money Market 6.07

68

Top Industry Allocation as on Jun 29, 2007 Finance Computers - Software & Education Housing & Construction Diversified Auto & Auto ancilliaries Telecom Entertainment Banks Cement Electricals & Electrical Equipments

13.35% 9.93% 9.05% 8.19% 5.68% 4.87% 3.82% 3.7% 3.67% 3.58%

69

Change in Portfolio(Sector-Wise)(%age) 13 13 10 10 9 8 8 8 6 6 5 5 4 4

Jun 29, 2007

May 31, 2007

A A B C D E F G

Finance Computers - Software & Education Housing & Construction Diversified Auto & Auto ancilliaries Telecom Entertainment

Net Asset Value (Rs/Unit)

39.69

As On Jul 25, 2007

70

COMPARISON BETWEEN RELIANCE EQUITY FUNDGROWTH AND SBI MAGNUM EQUITY FUND-GROWTH

Performance (%) as on Jul 25, Date 2007

14 1 3 6 1 year days month months months

SBI Magnum Equity Fund - Jul 25, 5.76 10.68 15.63 15.23 62.2 Growth 2007 Reliance Equity Fund - Growth Jul 25, 1.45 5.14 13.01 12.15 42.9 2007 5.51 11.1 10.2 49.49

Average performance of similar category 2.23 funds BSE Sensex NSE Nifty Lifex Mindex Brandex IBEX 4.59 4.15 -3.83 -1.23 2.97 1.66

8.36 10.42 9.92 50.73 7.73 10.11 10.63 50.92 -2.74 -1.77 2.61 1.7 5.18 6.97 3.2 4.59 -0.51 22.37 1.1 51.28 1.33 12.62 4.41 11.55

If we take a glance at the performance of similar category funds we can see that the performance in last one year is 49.49%. Taking it as an average Reliance equity fund is performing below average, whereas SBI equity fund is above average. The BSE, NSE Nifty and Mindex are also above average.

71

COMPARISON BETWEEN RELIANCE TAX SAVER FUNDGROWTH AND SBI MAGNUM TAX GAIN SCHEME-GROWTH 1 3 14 6 1 Date mont month days months year h s Jul 25, 0.38 6.75 12.37 4.15 2007 54.39

Performance (%) as on Jul 25, 2007 Reliance Tax Saver Fund Growth

Jul SBI Magnum Tax Gain Scheme 25, 2.28 5.96 93 - Growth 2007 Average performance of similar category funds BSE Sensex NSE Nifty Lifex Mindex Brandex IBEX 2.23 5.51 11.1 10.2 4.59 8.36 10.42 9.92 4.15 7.73 10.11 10.63 -3.83 -2.74 -1.77 -0.51 -1.23 2.61 1.7 1.1 49.49 50.73 50.92 22.37 51.28 12.62 11.55

2.97 5.18 6.97 1.33 1.66 3.2 4.59 4.41

Here the SBI magnum tax gain fund has been introduced only two months back. The average performance of similar category funds in last one month is 5.51%. It can also be seen that the performance of both the funds under comparison are above average. The BSE and NSE Niftys performance is above average and they are also above the funds under comparison.

72

COMPARISON BETWEEN RELIANCE PHARMA FUNDGROWTH AND SBI MAGNUM SECTOR UMBRELLA-PARMA FUND-GROWTH

Performance (%) as on Jul 25, 2007 Date

14 days

1 month

3 6 1 year months months 22.49 27.26 72.96

Reliance Pharma Fund - Growth

Jul 25, -3.05 3.41 2007

SBI Magnum Sector Umbrella Pharma - Growth

Jul 25, -1.39 0.05 2007 5.51 8.36 7.73 -2.74 2.61 5.18 3.2

3.88

2.21

28.48

Average performance of similar category 2.23 funds BSE Sensex NSE Nifty Lifex Mindex Brandex IBEX 4.59 4.15 -3.83 -1.23 2.97 1.66

11.1 10.42 10.11 -1.77 1.7 6.97 4.59

10.2 9.92 10.63 -0.51 1.1 1.33 4.41

49.49 50.73 50.92 22.37 51.28 12.62 11.55

If we consider the performance of similar category funds the performance in last one year is 49.49%. The Reliance pharma fund is above the average but SBI pharma fund is very much below average.

73

COMPARISON BETWEEN RELIANCE REGULAR SAVING FUND-BALANCED-GROWTH AND SBI MAGNUM BALANCED FUND-GROWTH

Performance (%) as on Jul 25, 2007

Date

14 1 3 6 1 days month months months year

Reliance RSF - Balanced - Growth

Jul 25, 4.08 7.03 2007

9.68

10.55 18.67

SBI Magnum Balanced Fund Growth

Jul 25, 1.64 5.36 2007

9.64

9.4

42.21

Average performance of similar category 1.84 4.26 7.83 funds BSE Sensex NSE Nifty Lifex Mindex Brandex IBEX

9.95

37.02 50.73 50.92 22.37 51.28 12.62 11.55

4.59 8.36 10.42 9.92 4.15 7.73 10.11 10.63 -3.83 -2.74 -1.77 -1.23 2.61 1.7 2.97 5.18 6.97 1.66 3.2 4.59 -0.51 1.1 1.33 4.41

In this case the Reliance fund is very much below average, the SBI is above average.

74

INTERPRETATION OF RELIANCE EQUITY FUND-GROWTH AND SBI MAGNUM EQUITY FUND-GROWTH

After analyzing Reliance and SBI equity funds we infer that:

1. The reliance equity fund was launched only 16 months back,

2.

3.

4.

5.

6. 7.

whereas, SBI is 16 years old, proving SBI is far older than Reliance equity fund and has got a good brand preference. If the asset allocation is considered, the reliance equity fund has 13.9% in money market which is higher as compared to 5.7% in SBI, hence the liquidity in Reliance is more. The reliance scheme performance since its inception is 24% and 12.8% of SBI. But the scheme performance percentage of reliance is bound to decrease as the scheme grows older. The Net asset value as on 25th July 2007 of SBI is 33.06 which is more than double the reliance NAV which is 13.29. This shows that SBI is performing better than Reliance. Further the fund size of Reliance has been decreased by 163.48 crores since May 31st 2007 whereas incase of SBI it has increased by 1.88 crores. Reliance has not yet declared dividend so far but SBI has declared dividend at the rate of 50% per unit on October 6th 2006. The minimum investment in Reliance is 5000 Rupees and in SBI it is 1000 rupees this is one of the reasons why SBI attracts more investors.

75

INTERPRETATION OF RELIANCE TAX SAVER FUNDGROWTH AND SBI MAGNUM TAX GAIN SCHEME-GROWTH

After analyzing Reliance and SBI tax funds we infer that:

1. The reliance tax saver fund was launched two years back, whereas 2.

3. 4.

5.

6. 7.

SBI is only two months old. If the asset allocation is considered the reliance tax saver fund has 11.26% in money market as compared to 13.26% in SBI, hence the liquidity in SBI tax gain fund is more by 2%. The scheme performance since inception is 28.65% of reliance tax saver fund and 55.37% of SBI magnum tax gain fund. The Net asset value as on 25th July 2007 of SBI is 50.31 which is more than three times the reliance NAV which is 15.81. This shows that SBI magnum tax gain fund though being new in the market is performing far better than Reliance tax saver fund. Further the fund size of Reliance fund has been increased by 84.31 crores since May 31st 2007 whereas incase of SBI it has increased by 125.19 crores. Both the funds are giving tax benefits under section 88 of the Income Tax Act, 1961. The reliance tax saver fund has not invested in debt market whereas the SBI magnum tax gain scheme has invested in debt funds at around 7%.

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INTERPRETATION OF RELIANCE PHARMA FUND-GROWTH AND SBI MAGNUM SECTOR UMBRELLA-PARMA FUNDGROWTH

1. The inception of reliance pharma fund was done only 3 years back;

2. 3. 4.

5. 6.

whereas in case of SBI magnum sector umbrella-pharma funds it is 8 years. This shows that SBI is far older than Reliance. If the asset allocation is considered the reliance pharma fund has 93% in pharma industries as compared to 97% in SBI. The scheme performance since inception is 36% of reliance pharma fund and 18% of SBI magnum sector umbrella pharma fund. The Net asset value as on 25th July 2007 of SBI is 36.95 which is more than the reliance NAV which is 26.37. This shows that SBI magnum sector umbrella pharma fund is performing better than Reliance pharma fund. Reliance has not yet declared dividend so far but SBI has declared dividend at the rate of 30% on September 6th 2004. Further the fund size of Reliance fund has been increased by 11.07 crores since May 31st 2007 whereas incase of SBI it has decreased by 1.01 crores

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INTERPRETATION OF RELIANCE REGULAR SAVING FUNDBALANCED-GROWTH AND SBI MAGNUM BALANCED FUNDGROWTH

1. The inception of reliance balanced fund was done only 2 years

2.

3. 4.

5.

6.

7.

8.

back; whereas in case of SBI magnum balanced fund it is 12 years. This shows that SBI is far older than Reliance. If the asset allocation is considered the reliance balanced fund has 31% in money market as compared to 6% in SBI balanced fund. Hence Reliance balanced fund has got more liquidity. The scheme performance since inception is 12.73% of reliance balanced fund and 18.86% of SBI magnum balanced fund. The Net asset value as on 25th July 2007 of SBI balanced fund is 39.69 which is more than three times the Reliance balanced funds NAV which is 12.93. Further the fund size of Reliance fund has been decreased by 1.29 crores since May 31st 2007 whereas incase of SBI it has decreased by 3.51 crores. Reliance balanced fund has not yet declared dividend so far but SBI magnum balanced fund has declared dividend at the rate of 20% on February 3rd 2004. The Reliance balanced fund has not invested in debt market whereas the SBI magnum balanced fund has invested in debt funds at around 26%. The fund size of Reliance balanced fund is 22.83 crores which is very less than SBI magnum balanced fund which is 294.54 crores.

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CONCLUSIONS

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From the above data analysis and interpretation it can be concluded that: 1. Though the Reliance equity fund is recently introduced it is performing well. SBI magnum equity fund is older and is also brightly standing in the competition. SBI has declared dividend in 2006.Reliance can attract more investors if it reduces its minimum investment limit. If it does so it may also attract investors who have less than Rs.5000 to invest. 2. The SBI magnum tax gain fund was introduced just two months back but it is going parallel to Reliance tax saver fund. Here Reliance can perform better if it diversifies its funds in the companies which are making consistent growth profits. 3. The performance of both; Reliance pharma fund and SBI magnum sector umbrella- pharma fund in the last 14 days was negative. SBI fund is performing better than Reliance. One of the factors that can help Reliance to be more effective is to decrease the minimum investment. As investors who want to invest less than Rs. 5000 cannot invest in Reliance pharma fund. 4. The SBI balanced fund has diversified their funds in debt market also. Reliance has not invested in debt market. SBI is performing better than Reliance. 5. Both the asset management companies are performing well in the industry. Both had successfully created a niche in the market.

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FINDINGS AND SUGGESTIONS

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After making the above analysis I would like to suggest the following things: 1. Both the asset management companies are progressing and are strongly competing with other companies. 2. Asset management companies should invest in such/shall consider for investment where companies declare consistent growth in dividends. Dividends act as a good promotion tool to the investors. 3. Both the asset management companies are performing well, but due to increasing competition in this sector these asset management companies should introduce new schemes. 4. Investors who want to gain consistent profit but in a long time duration can invest in these companies. The net asset value of the funds under consideration had proved to be bullish and bearish in a very short period. But if we see the trend these schemes shows bullish nature on an average. 5. These asset management companies can be an encouragement factor for those investors who had never invested in mutual funds before. The investors who are investing for the first time in mutual funds; to be consistent investors should earn profits in the initial investments, loss will act as a demotivating factor for new investors.

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QUESTIONAIRE

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1. Are you a regular investor in investing your savings? a. Yes b. No 2. If at all you are a investor what percentage of your income do you invest? a. Below 10% b. 10% - 30% c. 30% - 50% d. Above 50%

3. What are your preferred investment priorities? Name of Investment products Insurance Mutual funds Bonds & Debentures Equities & Share Market PPF (Public Provident Fund) NSC (National Saving Schemes) 4. Do you invest using a. Scientific Tools b. By Intuition c. Market Research d. Brokers.

5. How much do you know about Mutual Funds as compared to other products? a. 20% b. 40% c. 80% d. 100%

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6. What is your perception about Mutual Funds? a. Safe b. Safe and profitable c. Risky d. Risky and profitable 7. Have you invested in these Mutual Funds of Reliance Capital Asset management limited? a. Reliance equity funds- growth b. Reliance regular saving fund- growth c. Reliance pharma fund- growth d. Reliance tax saver fund- growth 8. Have you invested in these Mutual Funds of SBI Funds management private limited? a. SBI Magnum equity fund- growth b. SBI Magnum balanced fund- growth c. SBI Magnum sector umbrella- pharma fund- growth d. SBI Magnum tax gain scheme- growth 9. How do you select and choose the above mentioned Mutual Funds schemes? a. Brand Name c. High Dividends b. High NAV d. Advertisement

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Demographics 10. NAME: _____________________________________________ 11. AGE: 12. MARTIAL STATUS: 13. PROFESSION: SEX: M / F

14. ANNUAL INCOME: a. b. c. d. e. 15. Contact Number:

Less than Rs. 1, 00,000/1, 00,000 - 1, 50,000/1, 50,000 - 2, 50,000/2, 50,000 - 5, 00,000/Above 5,00,000/-

16. Email ID : __________________________________________

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BIBLIOGRAPHY

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www.njindiainvest.com www.moneycontrol.com www.amfiindia.com www.karvy.com www.mutualfundsindia.com www.sbimf.com www.reliancemutualfunds.com Research Methodology By K.C.Kothari

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