Project on Mutual Fund

Summer Training Report On
“STUDY OF THE GROWTH OF THE MUTUAL FUNDS”

AT

ESCORTS MUTUAL FUNDS , LUCKNOW
Prepared By As a Partial Fulfillment of M.B.A Programme of U.P.T.U

AMBALIKA INSTITUTE OF MANAGEMENT & TECHNOLOGY,
MOHANLALGANJ, LKO

1. Certificate 2. Declaration
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3. Preface 4. Acknowledgement 5. Executive Summary

TABLE OF CONTENTS
6. Introduction  Industry profile  Company profile  About us  Investment philosophy  History  Introduction of mutual fund  Types of mutual fund  Why should invest in mutual fund  Understanding & managing risk  How to invest in mutual fund  Your right as mutual fund unit holder  Benefits of mutual fund  Drawbacks of mutual fund

7. Mutual fund in India 8. Performance of mutual fund in India 9. Future of mutual fund in India 10.Product available of mutual fund in escorts 11.Top ten reason to invest in mutual fund 12.Introduction of different competitive company 13.Research methodology 14.Techniques & instrument used 15.Analysis 16.Findings 17.SWOT analysis 18.Conclusion 19.Recommendation 20.Bibliography 21.Annexure

CERTIFICATE

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This is to certify that the project report study of mutual funds in financial market TOWARDS “GROWTH OF MUTUAL FUNDS” submitted to AMBALIKA INSTITUTE OF MANAGEMENT & TECHNOLOGY, MOHANLALGANJ by APURVA SINGH in partial fulfillment of the requirement for the award of MASTERS IN BUSINESS ADMINISTRATION is an original work carried out by the below mentioned student under the guidance and supervision of the below mentioned guide. This work has not been submitted anywhere else for any degree/diploma under my signature. The original work was carried out during 15TH JUNE TO 30TH JULY 2010 in ESCORTS MUTUAL FUNDS

Signature of the student Name of the student: Dated Signature of the Industry Guide Name of the industry Guide Designation of the Industry Guide E-mail Address Mailing Address Dated Seal/Stamp of the Organization

: : APURVA SINGH : 15TH JUNE TO 30TH JULY 2010 :_______________________ : Mr. GHANSHYAM PANDEY : A.S.M.(area sales manager) : [email protected] : www.escortsmutual.com :__________________

Signature of the faculty supervisor Name of the faculty supervisor

:________________ :Prof. ASHISH SHARMA

Dated

: ___________

DECLARATION

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I hereby declare that this project on “STUDY OF THE GROWTH OF THE MUTUAL FUND ” has been prepared by me during the year 2009-2010 as a partial fulfillment of MBA course of Ambalika Institute of Management & Technology, Lucknow. This project report has not been submitted to any other university or institution for award of any degree or diploma so far.

Signature of the student

[APURVA SINGH]

Roll No. 0936370012

PREFACE

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The customers are very important and play a very crucial role in any process of finance & marketing. Today the customers are kings of the market because the customer’s loyalty and customer’s preference are built by the products and services offered to the customers and they seek for more benefits and money’s worth for the amount they spend. But these services and products are delivered to the end customers only by the Brokers who work as the end medium in the whole chain of sales. That is where the concept of Brokers preference and Brokers behavior comes because the Brokers make the marketers rethink about designing their services; because of the important role they play in the whole chain. They have to think about the market strategies, Consumers behavior & taste etc also. Many marketers are smart enough to understand Consumer needs, wants and demands and perform beyond their expectation i.e. they delight them. it provides them growth , profitability and creativity with lot of inventions.

ACKNOWLEDGEMENT

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It is my pleasure to extend my deep gratitude to Senior Lect.ASHISH SHARMA, Faculty Guide, AMBALIKA INSTITUTE OF MANAGEMENT AND TECHNOLOGY,MOHANLALGANJ,LUCKNOW for the help, cooperation and guidance received from her throughout the tenure of this Summer Internship Project . I would like to take this opportunity to thank all other faculty members at Ambalika Institute of Management & Technology, Mohanlalganj, Lucknow, for their cooperation. I will also like to thank Mr. Ghanshyam Pandey, Area sales manager for giving me an opportunity to do the “Summer Internship” in his esteemed organization, Escorts Asset Management Ltd. I am deeply indebted to Mr. Brijesh Srivastava, branch Manager of Escorts mutual funds, Hazaratganj and also my company project guide, for providing amen tally stimulating environment throughout the project period. I am grateful to Mr. Avinash Tivari, branch manager of escorts securities , for there guidance and help during the internship. Their valuable and constructive suggestions at many difficult situations are immensely acknowledged. Finally I would like to thank all the staff of Escorts Asset Management Ltd., Hazartganj Branch, who helped me complete my project successfully.

Apurva singh AIMT, LUCKNOW

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EXECUTIVE SUMMARY

The project is framed mainly to know about the consumer perception for investment in various mutual funds schemes in various mutual fund’s companies. We have also done the marketing research on:

1) What part of income do they invest? 2) How do they respond to various investment opportunities? 3) What are their objectives of investment? 4) What is their investment behavior? 5) Do they invest in mutual funds, if no then reasons for the same?

At last interpretation and analysis were made and we came to the conclusion and

based on them the recommendation were framed.

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INTRODUCTION

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INDUSTRY PROFILE

Financial market are the arrangement that provide facilities for buying and selling of financial claims and services. These are classified in to money market and capital market .Both of them perform the same function of transferring resource to the producers but differ in the period of maturity of financial assets in these markets. Money markets deals in a short term claims (with a period of maturity of one year or less) and capital market do so in the long term (maturity period above one years) claims. The two most important constituents of the money market in India are the modern bank and the indigenous banker..Modern banking became and effective force only after 1910.Before that the indigenous bankers dominated the scene. Until 1860, they finance trade , acted as bankers to the company govt., collected revenue on the behalf of the govt., managed The govt. ,managed the transferred of fund from one center to another and some of them had monopoly as mint masters and money changers. In later years there direct contact with the government as financers declined. There of the modern banking business in India was negligible till the beginning of the present country . During the second half of the 18th century , agency house used to perform banking business as an adjunct to their main business. The foundation of modern banking was laid during the early part of the 19th century establishment of 3 Presidency Bank Madras (1846) . During the second half of the 19th century some exchange banks and India joint stock banks were also setup .In 1900 there were 9 Indian joint stock bank and 3 Presidency Banks

The slow rate of growth of the banking business till the beginning of the present century was due to     The high rate of failure of banks as most of them had been created in a speculative rush. Stagnant economic condition during this period . Decline in price. The passing of the century Act , 1861 which took away the power of the bank to issue notes.

During the half of the present century the banking system was progressing rapidly. Until the depression of 1930s,the rate of economic progress was quite high in the period .The world was contributed to raising the level of economic activity and the monetary resources in the economy

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.Although the Bank of India(BOI) functioned as a quasi-Central Bank of India (RBI) was established .after the establishment of RBI , the BOI use to act as the agent of the RBI in places where the RBI did not have any offices of its own .Even after 1935 ,The BOI continued to act as a banker for the other banks. All these functions are now performed by the SBI. Around 1950, the banking system in India comprised of the RBI, BOI, Cooperative banks, Exchange banks and Indian joint stock banks. Indian joint stock banks were divided in to 4 classes according to the amount of paid – up capital and reserve held by the :    Class A had Rs 5lakhs and over. Class B had Rs.1lakhs and over but less than Rs.5lakhs. Class C had Rs.50,000 and over but less than 1lakhs. Class D had less than Rs. 50,000

After the criterion of the RBI , banks were divided into scheduled an nonscheduled banks. Class A bank became scheduled banks and known as class A1 banks while other came to be known as class A2 banks. Class A1 banks used to invest less in government securities than did the BOI.

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COMPANY PROFILE
ESORTS MUTUAL FUNDS Plc

Type

:

Private Ltd. Company

Founded

:

15 April 1996

Headquarters

:

NEW DELHI

Key people

:

Ms. Ritu Nanda

Prof. Asish K. Bhattacharyya

Ms. Nitasha Nanda Prof. S.C. Kuchhal Mr.P.C.Gupta Mr. Lalit K. Khanna

Industry

:

Asset Management

Products Revenue

: :

Mutual funds, Securities. 35,478 crore(2010)

Net income

:

6.1-6.2crore (2010)

Website

:

www.escortsmutual.com

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About us !
Escorts Mutual Fund is the premier Asset Management Company offering Investment products across a broad cross-section of Financial Assets covering both Debt and Equity. It was registered with Securities and Exchange Board of India (SEBI) in 1996.The Company is the one of the earliest entrants into the Indian Mutual Funds Industry. It is associated with Escorts Group - with Escorts Limited as its Flagship Company, which is amongst India's leading corporations, operating in diverse fields of Agric-Machinery, Construction and Railway Ancillaries and Financial Services. The genesis of Escorts goes back to 1944 and over the decades, Escorts has surged ahead and evolved into one of the India's leading conglomerates. The group holds a great repute and trust amongst people. Escorts Mutual Fund has been established as a trust in accordance with the provisions of the Indian Trusts Act,1882 and the Deed of Trust dated 15th April,1996 has been registered under the Indian Registration Act,1908. Backed by one of the most trusted and valued brands in India, Escorts Mutual Fund has earned the trust of lakes of investors with its consistent performance and excellent service. Escorts Mutual Fund, has made impressive gains by constantly increasing its retail client base over the years. We at Escorts Mutual Fund aim to provide best risk-adjusted returns to our clients. The Escorts philosophy is centered on seeking consistent, long-term results. It aims at overall excellence, within the framework of transparent and rigorous risk controls

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INVESTMENT PHILOSPHY:

We believe in a simple philosophy that different people have different needs. That is why our investment strategies and products are geared towards fulfilling the needs of our investors. e derive our satisfaction from the fulfillment of the expectations of those special people, who have exposed faith in us and have invested their savings in our schemes. The following fundamentals define and guide our investments: A Value-Based Approach We believe in the concept of value investing and look for a consistent track-record and the inherent fundamental soundness of the entities we invest our in. We also give weight age to the future business prospects and the sustainability of the earnings .Such a value based investment approach ensures that the investors money grows with us. Emphasis on Research Our extensive research on the industry, the corporate and the money markets helps us in planning our investments and formulating our strategies in a wise manner. In periods of uncertainties and fluctuating market trends, the research work gives substance to strategies and ensure their soundness. Discipline In markets that are characterized by cyclical booms and busts, it is vey essential to be cautious and prudent. That is why, we believe in well thought out and well planned investments and in having a healthy suspicion of volatile market situations. We need to do all this because we feel that we have a responsibility towards our investor

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HISTORY OF ESCORTS MUTUAL FUNDS

Incorporated on 9 Feb.'87 as Escorts Leasing and Financial, its name was changed to Escorts Financial Services in Dec.'91 and ultimately to Escorts Finance Ltd. Promoted by Escorts, the company is primarily engaged in purchase, lease financing, money market operations, merchant banking and portfolio management activities. It is registered with the SEBI as a category-I merchant banker. The company provides hire-purchase / lease finance to corporate / individual clients for acquisition of light and heavy commercial vehicles, cars, two-wheelers, textile machinery, packaging machines, computers and consumer durables. In 1992, the company launched its portfolio management scheme, discretionary and non discretionary. In Jan.'95, it came out with a public issue to significantly increase its hire purchase and leasing activities and to diversify into other areas of financial services. Aggregate disbursement for hire purchase and leased assets was Rs 2.30 cr during 1995-96. Company acquired 30% of the equity capital of Escorts Consumer Credit Ltd a company engaged in hire purchase finance, leasing and bill discounting activities. The rating agency also re-affirmed the company with "FAA" i,e. High Safety rating. Company newly launched E-cash, a Smart Card based secured electronic Purse. It facilitates off line transaction processing without the need for any authorization. This is the first company who launch it in India & Slowly & gradually picking up popularity in India. During the year 2001 the company's Capital Adequacy Ratio was 29.09% against the RBI prescribed limited of 12%. The company has also consolidated its core business activity i.e. construction equipment financing while maintaining its presence in two wheeler finance. The company is also examining suitable avenues for diversification given the limited scope for growth of its financial services business. The company has also maintained its rating on public deposits of 'MA' by ICRA.

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Introduction of mutual fund

MUTUAL FUND - A GLOBALLY PROVEN INVESTMENT
Worldwide, the Mutual Fund, or Unit Trust as it is called in some parts of the world, has a long and successful history. The popularity of the Mutual Fund has increased manifold. In developed financial markets, like the United States, Mutual Funds have almost overtaken bank deposits and total assets of insurance funds. In India, the Mutual Fund industry started with the setting up of Unit Trust of India in 1964. Public sector banks and financial institutions began to establish Mutual Funds in 1987. The private sector and foreign institutions were allowed to set up Mutual Funds in 1993. This fast growing industry is regulated by the Securities and Exchange Board of India (SEBI).

WHAT IS A MUTUAL FUND
A Mutual Fund is a trust that pools the savings of a number of investors who share in common financial goal. Anybody with an investible surplus of as little as a few thousand rupees can invest in Mutual Funds. These investors buy units of a particular Mutual Fund scheme that has a defined investment objective and strategy. The money thus collected is then invested by the fund manager in different types of securities. These could range from shares to debentures to money market instruments, depending upon the scheme's stated objectives. The income earned through these investments and the capital appreciation realized by the scheme are shared by its unit holders in proportion to the number of units owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively lower cost.

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TYPES OF MUTUAL FUND SCHEMES
There are a wide variety of Mutual Fund Schemes that cater to your needs, whatever to your age, financial position, risk tolerance and return expectations. Whether as the foundation of your investment program me or as a supplement, Mutual Fund schemes can help you meet your financial goals.

(A) By Structure
Open-Ended Schemes These do not have a fixed maturity. You deal directly with the Mutual Fund for your investments and redemptions. The key feature is liquidity. You can conveniently buy and sell your units at net asset value("NAV") related prices. Close-Ended Schemes Schemes that have a stipulated maturity period (ranging from 2 to 15 years) are called closeended schemes. You can invest directly in the scheme at the time of the initial issue and thereafter you can buy or sell the units of the scheme on the stock exchanges where they are listed. The market price at the stock exchange could vary from the scheme's NAV on account of demand and supply situation, unit holders expectations and other market factors. One of the characteristics of the close-ended scheme is that they are generally traded at a discount to NAV; but closer to maturity, the discount narrows. Some close-ended schemes give you an additional option of selling your units directly to the Mutual Fund through periodic repurchase at NAV related prices. SEBI regulations ensure that at least one of the two exit routes are provided to the investor. Interval Schemes These combine the features of open-ended and close-ended schemes. They may be traded on the stock exchange or may be open for sale or redemption during pre-determined intervals at NAV related prices.

(B) By Investment Objective
Tax Saving Schemes These schemes offer tax rebates to the investors under tax laws as prescribed from time to time. This is made possible because the Government offers tax incentives for investment in specific avenues. For example, Equity Linked Saving Schemes(ELSS) and Pension Schemes.
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Recent amendments to the Income Tax Act provide further opportunities to investors to save capital gains by investing in Mutual Funds. The detail of such tax savings are provided in the relevant offer documents. Ideal for:


Investors seeking tax rebates.

Special Schemes
This category includes index schemed that attempt to replicate the performance of a particular index such as the BSE Sensex or the NSE 50, or the industry specific schemes(which invest in specific industries) or sectoral schemes(which invest exclusively in segments such as 'A' Group shares or initial public offerings). Index fund schemes are ideal for investors who are satisfied with a return approximately equal to that of an index. Sectoral fund schemes are ideal for investors who have already decided to invest in a particular sector or segment. Keep in mind that anyone scheme may not meet all your requirements for all time. You need to place your money judiciously in different schemes to be able to get the combination of growth, income and stability that is right for you. Remember, as always, higher the return you seek, higher the risk you should be prepared to take.

WHY SHOULD YOU INVEST IN MUTUAL FUNDS?

The advantages of investing in Mutual Fund are: 1. Professional Management. You avail of the services of experienced and skilled professionals who are backed by a dedicated investment research team which analyses the performance and prospects of companies and selects the suitable investments to achieve the objective of the scheme. 2. Diversification. Mutual Funds invest in a number of companies across a broad crosssection of industries and sectors. This diversification reduces the risk because seldom do all stocks decline in the same time and in same proportion. You achieve this diversification through a Mutual Fund with far less money than you can do on your own. 3. Convenient Administration. Investing in a Mutual Fund reduces paper work and helps you avoid many problems such as bad deliveries, delayed payments and unnecessary

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follow up with brokers and companies. Mutual Fund saves your time and make investing easy and convenient. 4. Return Potential. Over a medium to long term, Mutual Funds have the potential to provide a higher return as they invest in a diversified basket of selected securities. 5. Low Costs. Mutual Funds are a relatively less expensive way to invest compared to directly investing in the capital markets because the benefits of scale in brokerage, custodial and other fees translate into lower costs for investors. 6. Liquidity. In open-ended schemes, you can get your money back promptly at net asset value related prices from the Mutual Fund itself. With close-ended schemes, you can sell your units on a stock exchange at a prevailing market price or avail of the facility of direct repurchase at NAV related prices which some close-ended and interval schemes offer you periodically. 7. Transparency. You get regular information on the value of your investment in addition to disclosure on the specific investments made by your scheme, the proportion invested in each class of assets and the fund manager's investment strategy and outlook. 8. Flexibility. Through features such as regular investment plans, regular withdrawal plans and dividend reinvestment plans, you can systematically invest or withdraw funds according to your needs and convenience. 9. Choice of Schemes. Mutual Funds offer a family of schemes to suit your varying needs over a lifetime. 10. Well Regulated. All Mutual Funds are registered with SEBI and they function within the provisions of strict regulations designed to protect the interests of investors. The operations of Mutual Funds are regularly monitored by SEBI.

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UNDERSTANDING AND MANAGING RISK
All investments whether in shares, debentures or deposits involve risk: share value may go down depending upon the performance of the company, the industry, state of capital markets and the economy; generally, however, longer the term, lesser the risk; companies may default in payment of interest/principal on their debentures/bonds/deposits; the rate of interest on an investment may fall short of the rate of inflation reducing the purchasing power. While risk cannot be eliminated, skillful management can minimize risk. Mutual Funds help to reduce risk through diversification and professional management. The experience and expertise of Mutual Fund managers in selecting fundamentally sound securities and timing their purchases and sales, help them to build a diversified portfolio that minimize risk and maximizes returns.

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HOW TO INVEST IN MUTUAL FUNDS?

Step One - Identify your investment needs. Your financial goals will vary, based on your age, lifestyle, financial independence, family commitments, level of income and expenses among many other factors. Therefore, the first step is to assess your needs. Begin by asking yourself these questions:

What are my investment objectives and needs? 1. Probable Answers: I need regular income or need to buy a home or finance a wedding or educate my children or a combination of all these needs. 2. How much risk I am willing to take? Probable Answers: I can only take a minimum amount of risk or I am willing to accept the fact that my investment value may fluctuate or that there may be a short-term loss in order to achieve a long-term potential gain. 3. What are my cash flow requirements? Probable Answers: I need a regular cash flow or I need a lump sum amount to meet a specific need after a certain period or I don't require a current cash flow but I want to build my assets for the future. By going through such an exercise, you will know what you want out of your investment and can set the foundation for a sound Mutual Fund investment strategy. Step Two - Choose the right Mutual Fund. Once you have a clear strategy in mind, you have to choose which Mutual Fund and scheme you want to invest in. The offer document of the scheme tells you its objectives and provides supplementary details like the track record of other schemes managed by the same Fund Manager. Some factors to evaluate before choosing a particular Mutual Fund are:
 

the track record of performance over the last few years in relation to the appropriate yardstick and similar funds in the same category. how well the Mutual Fund is organized to provide efficient, prompt and personalized service.

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

degree of transparency as reflected in frequency and quality of their communications.

Step Three - Select the ideal mix of Schemes. Investing in just one Mutual Fund scheme may not meet all your investment needs. You may consider investing in a combination of schemes to achieve your specific goals. The following tables could prove useful in selecting a combination of schemes that satisfy your needs.

AGGRESSIVE PLAN Money Market Schemes Income Schemes Balanced Schemes Growth Schemes MODERATE PLAN Money Market Schemes Income Schemes Balanced Schemes Growth Schemes CONSERVATIVE PLAN Money Market Schemes Income Schemes Balanced Schemes Growth Schemes 10 % 50-60 % 20-30 % 10 % 10 % 20 % 40-50 % 30-40 % 5% 10-15% 10-20 % 60-70 %

Step Four - Invest regularly

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For most of us, the approach that works best is to invest a fixed amount at specific intervals, say every month. By investing a fixed sum every month, you buy fewer units when the price is higher and more units when the price is low, thus bringing down your average cost per unit. This is called rupee cost averaging and is a disciplined investment strategy followed by investors all over the world. With many open-ended schemes offering systematic investment plans, this regular investing habit is made easy for you. Step Five - Keep your taxes in mind If you are in a high tax bracket and have utilized fully the exemptions under section 80L of the Income Tax Act, investing in growth funds that do not pay dividends might be more tax efficient and improve your post-tax return. If you are in a low tax bracket and have not utilized fully the exemptions available under Section 80L of the Income Tax Act, selecting funds paying regular income could be more tax efficient. Further, there are other benefits available for investment in Mutual Funds under the provisions of the prevailing tax laws. You may therefore, consult your tax advisor or Chartered Accountant for specific advice. Step Six - Start early It is desirable to start investing early and stick to a regular investment plan. If you start now, you will make more than if you wait and invest later. The power of compounding lets you earn income on income and your money multiplies at the compounded rate of return. Step Seven - The final step All you need to do now is to get a touch with a Mutual Fund or your agent/broker and start investing. Reap the rewards in the years to come. Mutual Funds are suitable for every kind of investor - whether starting a career or retiring, conservative or risk-taking, growth-oriented or income seeking.

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YOUR RIGHTS AS A MUTUAL FUND UNITHOLDER
As a unit holder in Mutual Fund scheme coming under the SEBI (Mutual Funds) Regulation, ("Regulations") you are entitled to: 1. Receive unit certificates or statements of accounts conforming your title within 6 weeks from the date of closure of the subscription or within 6 weeks from the date your request for a unit certificate is received by the Mutual Fund; 2. Receive information about the investment policies, investment objectives, financial position and general affairs of the scheme; 3. Receive dividend within 42 days of their declaration and receive the redemption or repurchase proceeds within 10 days from the date of redemption or date of redemption; 4. Vote in accordance with the Regulations to: a. either approve or disapprove any change in the fundamental investment policies of the Scheme which are likely to modify the scheme or affect your interest in the Mutual Fund; (as a dissenting unit holder, you would have the right to redeem your investments); b. change the asset management company; c. wind up the schemes. 5. Inspect the documents of the Mutual Funds specified in the scheme's offer document.






In addition to your rights, you can expect the following from Mutual Funds :To publish their NAV, in accordance with the regulations: daily, in case of open-ended schemes and periodically, in case of close-ended schemes; To disclose your schemes' portfolio holdings, expenses, policy on asset allocation, the Report of the Trustees of the operations of your schemes and their future outlook through periodic newsletters, half-yearly and annual accounts; To adhere to a Code of Ethics which require that investment decisions are taken in the best interests of the unit holders.

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About Mutual Funds
A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is invested by the fund manager in different types of securities depending upon the objective of the scheme. These could range from shares to debentures to money market instruments. The income earned through these investments and the capital appreciation realized by the scheme are shared by its unit holders in proportion to the number of units owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed portfolio at a relatively low cost. The small savings of all the investors are put together to increase the buying power and hire a professional manager to invest and monitor the money. Anybody with an investible surplus of as little as a few thousand rupees can invest in Mutual Funds. Each Mutual Fund scheme has a defined investment objective and strategy.

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Benefits of Investing in Mutual Fund
Professional Management
Mutual Funds provide the services of experienced and skilled professionals, backed by a dedicated investment research team that analyses the performance and prospects of companies and selects suitable investments to achieve the objectives of the scheme.

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

Convenient Administration
Investing in a Mutual Fund reduces paperwork and helps you avoid many problems such as bad deliveries, delayed payments and follow up with brokers and companies. Mutual Funds save your time and make investing easy and convenient.

Return Potential
Over a medium to long-term, Mutual Funds have the potential to provide a higher return as they invest in a diversified basket of selected securities.

Low Costs
Mutual Funds are a relatively less expensive way to invest compared to directly investing in the capital markets because the benefits of scale in brokerage, custodial and other fees translate into lower costs for investors.

Liquidity
In open-end schemes, the investor gets the money back promptly at net asset value related prices from the Mutual Fund. In closed-end schemes, the units can be sold on a stock exchange at the prevailing market price or the investor can avail of the facility of direct repurchase at NAV related prices by the Mutual Fund.

Transparency

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You get regular information on the value of your investment in addition to disclosure on the specific investments made by your scheme, the proportion invested in each class of assets and the fund manager's investment strategy and outlook.

Flexibility
Through features such as regular investment plans, regular withdrawal plans and dividend reinvestment plans, you can systematically invest or withdraw funds according to your needs and convenience.

Affordability
Investors individually may lack sufficient funds to invest in high-grade stocks. A mutual fund because of its large corpus allows even a small investor to take the benefit of its investment strategy.

Choice of Schemes
Mutual Funds offer a family of schemes to suit your varying needs over a lifetime.

Well Regulated
All Mutual Funds are registered with SEBI and they function within the provisions of strict regulations designed to protect the interests of investors. The operations of Mutual Funds are regularly monitored by SEBI.

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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 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







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Mutual Funds Industry in India:

The origin of mutual fund industry in India is with the introduction of the concept of mutual fund by UTI in the year 1963. Though the growth was slow, but it accelerated from the year 1987 when non-UTI players entered the industry. In the past decade, Indian mutual fund industry had seen a dramatic improvement, both quality wise as well as quantity wise. Before, the monopoly of the market had seen an ending phase; the Assets Under Management (AUM) was Rs. 67bn. The private sector entry to the fund family raised the AUM to Rs. 470bn in March 1993 and till April 2004; it reached the height of 1,540 bn. Putting the AUM of the Indian Mutual Funds Industry into comparison, the total of it is less than the deposits of SBI alone, constitute less than 11% of the total deposits held by the Indian banking industry.

The main reason of its poor growth is that the mutual fund industry in India is new in the country. prime responsibility of all mutual fund companies, to market the

product

correctly

abreast

of

selling.

The mutual fund industry can be broadly put into four phases according to the development of the sector. The first phase started from 1964-1987, the second phase continued from 1987-1993 where public sector funds entered the market, the third phase continued from 1993-2003 where private sector funds also joined the market and the fourth phase is running currently which started from 2003. This phase had bitter experience for UTI. It was bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust of India with AUM of Rs.29,835crores (as on January 2003). 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

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UTI which had in March 2000 more than Rs.76,000crores of AUM 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.153108crores under 421 schemes.

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Performance of Mutual Funds in India:

The performance of mutual funds in India in the initial phase was not even closer to satisfactory level. People rarely understood, and of course investing was out of question. But yes, some 24 million shareholders were accustomed with guaranteed high returns by the beginning of liberalization of the industry in 1992. This good record of UTI became marketing tool for new entrants.

The expectations of investors touched the sky in profitability factor. However, people were miles away from the preparedness of risks factor after the liberalization.

The Assets Under Management of UTI was Rs. 67bn. by the end of 1987. Let me concentrate about the performance of mutual funds in India through figures. From Rs. 67bn. the Assets Under Management rose to Rs. 470 bn. in March 1993 and the figure had a three times higher performance by April 2004. It rose as high as Rs. 1,540bn.

The net asset value (NAV) of mutual funds in India declined when stock prices started falling in the year 1992. Those days, the market regulations did not allow portfolio shifts into alternative investments. There was rather no choice apart from holding the cash or to further continue investing in shares. One more thing to be noted, since only closed-end funds were floated in the market, the investors disinvested by selling at a loss in the secondary market.

The performance of mutual funds in India suffered qualitatively. The 1992 stock market scandal, the losses by disinvestments and of course the lack of transparent rules in the whereabouts rocked confidence among the investors. Partly owing to a relatively weak stock market performance, mutual funds have not yet recovered, with funds trading at an average discount of 1020 percent of their net asset value.

The supervisory authority adopted a set of measures to create a transparent and competitive environment in mutual funds. Some of them were like relaxing investment restrictions into the market, introduction of open-ended funds, and paving the gateway for mutual funds to launch

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pensionschemes.

The measure was taken to make mutual funds the key instrument for long-term saving. The more the variety offered, the quantitative will be investors.

At last to mention, as long as mutual fund companies are performing with lower risks and higher profitability within a short span of time, more and more people will be inclined to invest until and unless they are fully educated with the dos and don’ts of mutual funds.

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Future of Mutual Funds in India
By December 2004, Indian mutual fund industry reached Rs 1,50,537crore. It is estimated that by 2010 March-end, the total assets of all scheduled commercial banks should be Rs 40,90,000crore. The annual composite rate of growth is expected 13.4% during the rest of the decade. In the last 5 years we have seen annual growth rate of 9%. According to the current growth rate, by year 2010, mutual fund assets will be double. Some facts for the growth of mutual funds in India           
  

100% growth in the last 6 years. Number of foreign AMC’s 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. Emphasis on better corporate governance. Trying to curb the late trading practices and introduction of Financial Planners who can provide need based advice.

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Product details:

Escorts Power & Energy Fund –
Mission to ensure energy independent country by 2030.The investment objective of the scheme is to provide income distribution and/or medium to long-term capital gains by investing predominantly, in equity/equity related instruments of the companies in the Power/Energy Sector and/or Debt/Money-Market instruments.

Scheme Details.
Type of Scheme Open Ended Growth Scheme Investment Objective of the scheme is to provide income distribution and/or medium to long termcapital gains by investing predominantly in Equity/Equity related instruments of the companies in the Power / Energy Sector and /or Debt/Money Market instruments. Equity Shares and Equity related Instruments: 65100, Debt Instruments, Govt. Bonds, Money Market Instruments etc.: 0 – 35 Purchase: Rs. 1000/- and Multiples of Re. 1/Additional Purchase : Rs. 1000 and Multiples of Re.1/-, Repurchase: Minimum of Rs. 1000/Entry Load: Nil : Exit Load :1% if exit <= 1 yrs

Investment Objective

Asset Allocation

Minimum Application Amount Load Structure

Option Available Daily NAV publication NAV will be declared on business days.

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Escorts Opportunities Fund –
Launched in February 2001, Escorts opportunities Fund (EOF), Designed to provide regular income. We invest in well- diversified portfolio for both equity and debt. Also, in case of equities, we as a matter of policy only invest in well researched large cap stocks. Further to reduce the volatility in returns induced due to the equity component, the fund aggressively uses derivatives by selling option. This premium income received in the process not only reduces the volatility but also enhances the risk adjusted return on the scheme. Through this mechanism, we also partially hedge any potential downside in the portfolio to the extent of premium received.

Scheme Details
Type of Scheme An Open-Ended Growth Fund

The scheme seeks stable and regular income through an actively managed portfolio of stocks, bonds and money market instruments. The asset allocation is dynamically planned to capture the best of the opportunities in equity and debt Exposure in equity is a blend of large and mid cap stocks, skewed largely Investment towards the well-researched blue chips. In debt, the scheme invests mainly in Objective Central and State Government debt papers besides PSUs and bank bonds. The highlight of the scheme is the extensive use of derivatives not only as a hedging tool but also in generating regular income, which in turn enhances the overall portfolio’s risk-adjusted return. Fixed Income 0-49 Asset Allocation Equity and Equity Related Securities 51-100 Minimum Growth Option & Dividend Re-investment option Rs. 1000/-, Application Dividend Payout Option: Rs 30,000/-, Additional Purchase Amount :Rs. 1000, Repurchase: Minimum of Rs. 1000/Entry Load: Nil Load Structure Exit Load: 1% if exit < = 1 year Option Available NAV will be declared on business days. Daily NAV publication Dividend Paid Rate April October November April 2006June 200220072008Jan September May,2009 2009March September January 2010 2007 Dec2009 2006 2008 2009 1.25% (47Div.) 1.5% (18 Div.) 1.6% (12 Div.) Avg. 0.97 % (7 Div.) 1.962 0.981 0.613

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Escorts Income Plan To generate current income by investing predominantly in a well diversified portfolio of Fixed Income securities with moderate risk levels. This income may be complemented by possible Capital Appreciation..

Scheme Details
Type of Scheme An Open Ended Income Scheme

To generate current income by investing predominantly in a well diversified portfolio of Investment Objective Fixed Income securities with moderate risk levels. This income may be complemented by possible Capital Appreciation. Asset Allocation Money Market Instruments: 10 – 20; Fixed Income Securities: 80 - 90 (max 100); Equity and Equity Linked Instrument: 0 - 10 (max 20); Units of other Mutual Funds: 0 - 5 (max 5);

Minimum Application Purchase: Rs. 1000/- and Multiples of Re. 1/-, Additional Purchase : Rs. 1000 and Multiples of Re.1/-, Amount Repurchase: Minimum of Rs. 1000/Load Structure Option Available Daily NAV publication Dividend Paid Entry Load – Nil, Exit Load – 0.5% if exit <= 6 months NAV will be declared on business days. 126 Dividends Since May 1998

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Escorts Tax Plan –
To generate Capital Appreciation by investing predominantly in a well diversified portfolio of Equity Shares with growth potential. This Income may be complemented by possible dividend and other income.

. Scheme Details
Type of Scheme Open Ended Equity Linked Saving Scheme Investment Objective To generate Capital Appreciation by investing predominantly in a well diversified portfolio of Equity Shares with growth potential. This Income may be complemented by possible dividend and other income.

Equity ,Cumulative convertible preference shares; fully convertible Asset Allocation Debentures and Bonds. 80-100 Money Market Instruments 0-20 Minimum Application Amount Load Structure Purchase: Rs. 500 and Multiple of Re. 1/Additional Purchase : Rs 500 and Multiple of Re. 1/-, Entry Load : Nil Exit Load : Nil Locking of 3 years being ELSS

Option Available NAV will be declared on business days. Daily NAV publication Dividend Rate March 2004 March 2005 80% 30% March 2006 35% March 2007 25% March 2008 30%

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Escorts Balanced Fund –
To generate long term Capital Appreciation and current income from a portfolio of equity & fixed income securities..

Scheme Details
Type of Scheme Open Ended Balanced Scheme Investment Objective Asset Allocation Minimum Application Amount An open-ended balanced scheme, with the investment objective to generate long term capital appreciation and current income from a portfolio of equity & fixed-income securities. Equity Shares and Equity Related Instruments. 50-80 Debt Instruments, Govt. Bonds 20-45 Purchase: Rs. 1000 and Multiple of Re. 1/Additional Purchase: Rs. 1000 and Multiple of Re.1/-

Load Structure Entry Load: NIL : Exit Load :1% if exit <=1yrs Option Available Daily NAV will be declared on business days. NAV publication Dividend Rate Mar’02 10% Dec’03 45% Mar’05 70% Mar’06 40% Mar’07 20% Mar’08 30%

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Escorts Growth Plan –
To generate Capital Appreciation by investing predominantly in a well diversified portfolio of Equity Shares with growth potential. This income may be complemented by possible dividend and other Income..

Scheme Details
Type of Scheme Open Ended Growth Scheme Investment Objective To generate Capital Appreciation by investing predominantly in a well diversified portfolio of Equity Shares with growth potential. This income may be complemented by possible dividend and other Income.

Equity Shares and Equity Related Instruments Approx 0-20 Fixed Income Securities and Money Market Instruments ( Including Asset Allocation Securitized debt not exceeding 10%) Approx 0-20 Units of other Mutual Fund Scheme(s) Approx 0-5 Minimum Application Amount Load Structure Purchase: Rs. 1000/- and Multiples of Re. 1/Additional Purchase : Rs.1000 & Multiples of Re.1/, Repurchase: Minimum of Rs. 1000/Entry Load : Nil , Exit Load: 1% if exit <= 1 year

Option Available NAV will be declared on business days. Daily NAV publication Dividend Rate Dec 03 80% Mar 06 40% Mar’06 50% Mar’07 30% Mar’08 30%

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Escorts Gilt Plan –
To generate income and capital appreciation through investments in Government Securities . The aim is to generate returns commensurate with minimal credit risk by investing in securities created and issued by the Central Government and/or a State Government and/or repos/reverse repos in such government securities as may be permitted by RBI.

. Scheme Details
Type of Scheme Open Ended Gilt Scheme To generate income and capital appreciation through investments in Government Securities . The aim is to generate returns commensurate with minimal credit risk by investing in securities created and issued by the Central Government and/or a State Government and/or repos/reverse repos in such government securities as may be permitted by RBI. Govt. Securities 80-100 Money Market Instruments 0-20 Purchase: Rs. 1000/- and Multiples of Re. 1/-, Additional Purchase : Rs. 1000 and Multiples of Re.1/-, Repurchase: Minimum of Rs. 1000/Entry Load: Nil Exit Load - 0.50% if exit <= 6 months NAV will be declared on business days. Sep 01 30 Dec 01 30 Mar 02 20

Investment Objective

Asset Allocation Minimum Application Amount Load Structure Option Available Daily NAV publication Dividend Rate

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Escorts Liquid Plan –
The primary investment objective of the scheme is to provide income and liquidity consistent with the prudent risk from a portfolio comprising of money market and debt instruments. This income may be complemented by possible capital appreciation. The aim is to optimize returns while providing liquidity..

Scheme Details
Type of Scheme Open Ended Liquid Scheme To provide income and liquidity consistent with the prudent risk from a portfolio comprising of Money Market and Debt Instruments. This income may be complemented by possible capital appreciation. The aim is to optimize returns while providing liquidity. Money Market Instruments: 90 – 100 Debt Securities: 0 - 10 Purchase: Rs. 1000/- and Multiples of Rs. 1/Additional Purchase : Rs 1000 and Multiples of Rs.1/-, Repurchase: Minimum of Rs. 1000/Entry Load : Nil, Exit Load : Nil

Investment Objective

Asset Allocation

Minimum Application Amount

Load Structure

Option Available Daily NAV publication NAV will be declared on business days.

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Escorts Leading Sectors Fund –
The investment objective of the scheme is to provide capital appreciation or income distribution by investing in companies from Leading Sectors, depending upon their growth prospects and sustainability of future earnings growth..

Scheme Details
Type of Scheme Investment Objective Open Ended Growth Scheme To Provide capital appreciation or income distribution by investing in companies from Leading Sectors, depending upon their growth prospects and sustainability of future earnings growth. Purchase: Rs. 1000/-and Multiples of Re. 1/Additional Purchase: Rs.1000 and Multiple of Re. 1/-, Repurchase: Minimum of Rs. 1000/Entry Load : Nil , Exit Load: 1% if exit <= 1 years NAV will be declared on business days.

Minimum Application Amount Load Structure Option Available Daily NAV publication

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Escorts Income Bond –
To generate income by investing predominantly in a well diversified portfolio of Fixed Income securities ith moderate risk levels. This income may be complemented by possible Capital Appreciation..

Scheme Details
Type of Scheme Investment Objective Asset Allocation Open Ended Income Scheme To generate current income by investing predominantly in a well diversified portfolio of Fixed Income Securities with moderate risk levels. This income may be complemented by possible Capital Appreciation. Money Market Securities: 0-25 ; Debt Securities: 40-90 Equity and Equity Related Instrument : 0-25

Purchase: Rs. 1000/- and Multiples of Rs. 1/Minimum Additional Purchase : Rs 1000 and Multiples of Rs.1/-, Application Amount Repurchase: Minimum of Rs. 1000/Load Structure Option Available Daily NAV publication Bonus Rate Entry Load : Nil, Exit Load : 0.50% if exit <=6 months NAV will be declared on business days. 24.02.2010 3:50 (3 bonus units for 50 units held in growth option of EIB)

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Escorts High Yield Equity Plan –
To generate income by investing predominantly in a well diversified portfolio of Fixed Income securities ith moderate risk levels. This income may be complemented by possible Capital Appreciation..

Scheme Details

Type of Scheme

Open Ended Growth Scheme To generate income by investing predominantly in well diversified portfolio of equity stocks providing high dividend yield but at the same time capture long term capital appreciation as and when the opportunity arises .This long style of investment tries to locate , in a disciplined manner, shares ,which for a variety of reason are selling at prices which are substantially lower than the company’s actual business value or future earnings potential, and are also yielding a higher return than normal dividend yield. These companies would be backed by stable earnings in the past while offering fair growth potential in the future. Equity Shares and Equity related Instruments: 65100,Debt Instruments,(Govt. Bonds, Money Market Instruments etc.): 0 – 25, Securitized Debt : 0-10, Units of other Mutual Fund Scheme(s): 0 – 5 Purchase: Rs. 1000/- and Multiples of Re. 1/Additional Purchase : Rs.1000 & Multiples of Re.1/-, Repurchase: Minimum of Rs. 1000/Entry Load : Nil , Exit Load: 1% if exit <= 1 years

Investment Objective

Asset Allocation

Minimum Application Amount Load Structure

Option Available Daily NAV publication NAV will be declared on business days

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Escorts Floating Rate Fund –
To generate regular income through investment in a portfolio comprising substantially of Floating Rate Debt Securities (including floating rate securitized debt, Money Market Instruments and Fixed Rate Debt Instruments swapped for floating rate returns).The scheme shall also invest in Fixed Rate Debt Securities (including fixed rate securitized debt, Money Market Instruments and Floating Rate Debt Instruments swapped for fixed returns..

Scheme Details
Type of Scheme Open Ended Income Scheme To generate regular income through investment in a portfolio comprising substantially of Floating Rate Debt Securities (including floating rate securitized debt, Money Market Instruments and Fixed Rate Debt Instruments swapped for floating rate returns).The scheme shall also invest in Fixed Rate Debt Securities (including fixed rate securitized debt, Money Market Instruments and Floating Rate Debt Instruments swapped for fixed returns. Floating Rate Debt Securities: 65 – 100 Fixed Rate Debt Securities.: 0 - 35 Purchase: Rs. 1000/- and Multiples of Rs. 1/Additional Purchase : Rs 1000 and Multiples of Rs.1/-, Repurchase: Minimum of Rs. 1000/Entry Load : Nil , Exit Load: Nil

Investment Objective

Asset Allocation

Minimum Application Amount Load Structure

Option Available Daily NAV publication NAV will be declared on business days.

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THE TOP TEN REASONS TO INVEST IN MUTUAL FUNDS

Every one who follows the financial news has heard about mutual funds and knows the stocks markets has generally risen (with various ups and downs) for over 200 years . Ii fact, by most measures, the stock market has made more money for more people, and done it more reliably, than any other investment over the past 100 years ! if you want to accumulate substantial wealth, you must include stocks in your investments !But most people who invest don’t study the market. They don’t understand it and they don’t have time to manage their portfolio wisely. That’s where mutual funds come in. I respect the other people opinion , and certainly not all mutual funds are well managed – you must choose wisely and use appropriately caution ! But, for most folks, a good , solid, boring mutual fund is the golden path to riches.

Here .there are top ten reasons to invest in mutual funds: 1.Selection:
You can select from thousands of funds (you’ll one to suit your needs) and you can get on them easily. Magazines like “Money” are easy to find. Most credit unions hav e information, and your local library is a goldmine-and the internet.

2.You can start with small amount of money:
Most mutual fund will let you start with less than $ 1000,and if you set it up for automatic deposits , some will let you start with only $50,I’ve spent more than that in a restaurant . There is no reason not to consider this!

3.Simplicity:
You deposit 10% of your income every month. Just pay yourself first then pay the mortgage , then pay everyone else.

4.Professional management:
I do not have always time to research, select and monitor individual stocks. So , I pay a professional do it for me. A good fund manager will make you rich
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5.Compound interest:
Depending on what index you pick , the U.S. stock market has gone up an average of over 12% per year for the past 10 years, and it is been almost high for the past 20 years. The market fluctuates, but the beauty of this is, you do not care ! Over 10,20,or 30 years. the system works every time!

6.Dollar – Cost Averaging:
The details are complicated ,but by investing every single month whether the market is up or down, you get a tremendous boost from the mathematics. Your “average cost” will always be less than the “average price” you paid ! And that is money in your pocket!

7.Diversification:
A Broad based growth fund typically invest in dozens of companies in different industries ,sometimes even in different countries around the world. If one stock goes down ,hopefully dozens will go up. There is excellent protection and sound risk management built in to these funds.

8.Specialization:
If you prefer , and if you do the research, there are funds that invests in only a very small no of companies. If you accept the additional risk , you can invest in one particular industry, or one country ,or in companies of a certain size or that are environmentally responsible. This specialization offers the potential for even greater profits, but it can also bring greater potential risk. Study before you invest.

9.Fund “Families”:
Most mutual funds are offered by management companies that sponsor several different funds ,with different objectives. They make it easy to move your money between the funds ,so as your goals change, you can adjust your investments with a quick phone calls, or the internet.

10.Momentum:
Once you get started ,your enthusiasm builds .Once you have money “in the market” ,you’ll track it, manage it, and in all probability, your desire to save will increase. If you have had difficulty saving in the past ? START ! Those monthly statement will be positive reminders to do

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even more. Yes you should invest in tax sheltered retirement plans first and yes, there are other investment probabilities .And Yes, there is some risk , because the market can go down. But to retire wealthy, pick a great, long –term growth fund, invest regularly. and system work for you ! The key , as always is : GET STARTED!

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INTRODUCTION OF DIFFERENT COMPETETIVE COMPANIES

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Introduction TO HDFC MUTUAL FUNDS
HDFC founded in 1977; today is marketing leading in housing finance in India Extended financial assistance for more then is 15Lakh homes. HDFC 120 office in India, if also had one Kuwait. Oman, it have IInd haiku customer and 4600 agent HDFC SLIC has granted Loans in over 2400 eeliest/towns across of country. HDFC holds around29% of equity in the bank. 120 Branches 1500000 center 144 ATMs. HDFC and standard life first commenced discussion about a possible joint virtue enter the life insurance market; in Jan-1995.Standard life is companies of U.K. HDFC are the main share holder in HDFC Standard life insurance company Limited, with 81.40% while Standard life own 18.6%.

H

D

F

C

Housing 1.

Development HDFC +

Finance

Corporation Limited

Standard life

81.4%

Company of U.K.

81.6%
Banking

Insurance

Health

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STANDARD LIFE IN INDIA

Standard life has a joint venture company, HDFC Standard Life Insurance, launched in 2000 with our partners, the Housing Development Finance Corporation. HDFC and Standard Life first came together for a possible joint venture, to enter the life insurance market, in January 1995. It was clear from the outset that both companies shared similar values and a strong relationship quickly formed. In October 1995 the companies signed a 3 year joint venture agreement.

Towards the end of 1999, the opening of the market looked very promising and both companies agreed the time was right to move the operation to the next level. Therefore, in January 2000 an expert team from the UK joined a hand picked team from HDFC to form the core project team, based in Mumbai. Around this time Standard Life purchased a further 5% stake in HDFC and a 5% stake in HDFC Bank

HDFC GROUP COMPANISE INCLUDE  HDFC Bank  HDFC SLIC Ltd.  HDFC Mutual fund limited  HDFC Realty ltd.

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COMPARISION BETWEEN ESCORTS MUTUAL FUNDS & HDFC MUTUAL FUNDS

Comparison Between Escorts Mutual Funds & HDFC Mutual Funds

80% 70% Percentage 60% 50% 40% 30% 20% 10% 0%

68%

32%

Series1

Customer of HDFC Mutual Funds

Customer of
ESCORTS MUTUAL FUND

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INTRODUCTION OF ICICI MUTUAL FUND COMPANY

THE COMPANY

ICICI Prudential Life Insurance Company is a joint venture between ICICI, a premier financial powerhouse and prudential plc, a leading international financial services group headquartered in the U.K. ICICI Prudential was amongst the first private sector insurance companies to begin operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). ICICI Prudential’s equity base stands at Rs.3.75 billion with ICICI Bank and Prudential plc holding 74% and 36% stake respectively. ICICI Prudential has one of the largest distribution Networks amongst private life insurers in India, having commenced operations in 25 cities and towns in India. These are: Ahmadabad Bangalore, Chandigarh, Coimbatore, Guragaon, Hyderabad, Indore, Jaipur, Jalandhar, Kanpur, Kolkata, Lucknow, Ludhiana, Madurai, Mangalore, Meerut, Mumbai, Nagpur, Nasik, Noida, New Delhi, Pune and Vadodara. The company has the largest number of bank assurance tie-ups, having agreements with ICICI Bank, Citi Bank, Allahabad Band, Federal Bank, South Indian Bank, Bank of India, Lord Krishna Bank and Punjab & Maharashtra Co-operative Bank. ICICI Prudential has recruited and trained over 18,000 insurance agents to interface with and advise customers, and has the highest number amongst private life insurers on the renowned Million Dollar Table (MDT)

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ICICI MUTUAL FUNDS:
Asset Management Company enjoy the strong percentage of Prudential PLC ,one of the largest player in the insurance and fund management sector and ICICI Bank, a well known and trusted name in financial services in India ICICI Prudential Asset Management Co., in a span of just over eight years ,has forged a position of preeminence in the Indian Mutual Fund Industry as on of the largest asset management companies in the country with asset under management of Rs.23559.60crores (as of March 31,2006) . The company manager a comprehensive range of scheme to meet the varying investment needs of its investors spreads across 68 cities in the country.

SPONSORS OF ICICI MUTUAL FUND LTD: 1.PRUDENTIAL:
Established in London in 1848, prudential PLC ,through its business in the UK ,US and Asia, provides retail financial services products and services to more than 21 million customers ,policyholders and unit holders world wide with over $ 400 US (as of 31st December , 2005),billion in funds under management .Prudential employs some 23,000 staff world wide.

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2.ICICI BANK:
ICICI Bank is India’s second largest bank with total assets of about Rs 2,513.89bn at March 31,2006 and profit after tax of Rs. 25.40 bn. ICICI Bank has a network about 614 branches and extension counters and over 2,200 ATMs. ICICI Bank provide a wide range of banking products And services to corporate and retail customer through a variety of delivery channels and through its specialized subsidiaries . ICICI Bank equity shares are listed in India on the BSE and NSE of India Limited and its American Depositary Receipts (ADRs) are listed on the New York Stock Exchange(NYSE).

COMPARISION BETWEEN ESCORTS MUTUAL FUNDS & ICICI MUTUAL FUNDS

Comparison Between ICICI Mutual Funds & ESCORTS Mutual Funds

70.00% Percentage 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00%

66.12% 33.88% Series1

Customer of Customer of ICICI Mutual ESCORTS Funds Mutual Funds

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INTRODUCTION OF UTI MUTUAL FUNDS

UTI mutual funds managed by UTI Asset Management Company private limited (Estd. Jan 14 2003) who has been appointed by the UTI trustee co. Pvt. Ltd. For managing the scheme of UTI mutual fund and the scheme transferred from UTI mutual fund The UTI asset management company has its registered office at : UTI tower , GN Block Bandera, Kurla Complex ,Bandera(East),Mumbai 4500051 will provide professionally managed back office job for all business services for UTI mutual fund (Excluding fund management) in accordance with the provisions of the Investment Management Agreement ,the trust Deed, The SEBI (mutual fund) regulations and the objectives of the schemes ,State of the art system & communication are in place to ensure a seamless flow across the various activities undertaken by UTI Asset Management Company.UTI Asset Management Company is a registered portfolio manager under the SEBI (portfolio manager) regulations1993 on Feb 3, 2004, for undertaking portfolio management services and also act as the manager & market to offshore funds through its 10% subsidiary UTI International Ltd, registered in Guernsey, Channel , Island.UTI Mutual Fund has come in to existence with effect from 1st Feb 2003.UTI Asset Management Company presently manages a corpus of over Rs.34500crore..

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ACHIEVEMENTS OF UTI MUTUAL FUND CO.

UTI mutual fund has a track record of managing a variety of schemes catering to the needs of every class of citizenry . It has nation wide network consisting 70 UTI financial centers (UFCs) and UTI International offices in London, Dubai and Bahrain. With a view to reach to common investors at direct level ,4 satellite offices have also been opened in select towns highly empowered to manage funds with greater efficiency and accountability in the sole equity research department . To ensure better management of funds , a risk management department is also in operation. It has reset and upgraded transparency standards for the mutual funds industry. All the branches UFCs and registered offices are connected to a robust IT network to ensure cost effective quick and effective services All these have evolved UTI mutual fund to position as a dynamic , responsive, restructured , efficient and transparent and SEBI complaint entity.

SPONSORS:
    Bank Of Baroda Life Insurance Corporation Ltd. Punjab National Bank State Bank Of India

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RESEARCH METHODOLOGY

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RESEARCH METHODOLOGY

The approach and methodology that was followed in the compilation of this project report on “Comparative study on mutual funds and desired expectations of customers with mutual funds" is described as follows:

Selection Of The Topic And Framing Of The Questionnaire:

The topic was selected so as to decide upon the path of our research related works associated with the project. First of all our task was to frame questionnaire for people to know their views about the perception of consumers in various investment avenues.

Collection of Data:

Observations and interactions are made to prepare the questionnaire and get them filled. The research was conducted and compiled by visiting various potential investors who regularly invest in shares, securities, mutual funds, bonds, gold, business and other investment avenues.

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Techniques And Instruments Used

Questionnaires:
Questionnaires are prepared for accurate information. The questionnaires are filled by people of working or having their own business or self employed or others viz. students, house wives etc. Thus we got views of people belonging to diverse fields. Thus by the help of the questionnaire the study become more easy and reliable.

Interviews: Interviews were undergone through structured questionnaire and conversation
with people. The response of the people was quiet satisfying.

M.S.EXCEL: Microsoft Excel software was used for the analysis part of the survey done
among the investors. Major findings, recommendations and conclusion were taken out with its help.

Internet: Various information’s were collected through internet and necessary information
regarding the company through website of the organization.

Sample Size: 30

Population: Local population of Lucknow.

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The Above Research Report was Formulated as under:

 Research : Descriptive  Data Source : Primary & Secondary  Research Instrument :Questionnaires  Sample Size : 30  Sample Procedure : Simple Random Sampling

SAMPLE PLAN
 Sample Unit : Local Population of Lucknow  Method of data collection : Structure

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METHOD OF DATA COLLECTION

SECONDARY DATA:

the knowledge about company in term of facts and figures. It is a data Secondary data provided which are already been collected by someone else.  Websites  Books  Magazines  Newspaper

PRIMARY DATA:
Primary data helped in the knowledge gathered from secondary sources . Primary data are those which are collected a fresh and for first time It is original in nature

. The method adopted for it :

 Questionnaires

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SUMMARY & ANALYSIS OF DATA

After the data are collected the term is the task of analyzing them . The analysis of data requires the no of closely related operations . Analysis work after tabulation is generally based the computation of various percentage coefficient etc by applying various well defined statistical formulae.

PREPARATION OF REPORT
Finally the preparation of report as to be done according to the work done writing of report must be done within great care keeping in view the following.

LAYOUT
   The report should be written in concise and objective style in simple language. Charts and illustration in the main report should be used Calculated confidence limits must be mentioned and the various constraints experienced in conducting research operation may as be staled

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ANALYSIS

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ANALYSIS

Q1.What is your monthly income ?

Q1.What is your monthly
income
Percentage 0. 0. 0.3 0. 0. 0 5000 t 15000 15000 to 25000 25000 to 35000 & Above 35000

Series1 Series2

Range of income



30% of people are earning 5000 to 15000 Rs monthly. 40% of people are earning 15000 to 25000 Rs per month. 16% of people are earning 25000 to 35000 Rs per month. 14% of people are earning above 35000 Rs per month.

  

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Q2.How much do you save out of your income?

Q2. How

much do you save out of
your income ?

8% 2% 10% to 20% 20% to 30% 32% 58% 30% to 40% 40% or above

   

58% of people save 10 to 20% out of their income. 32% of people save 20 to 30% out of their income. 8% of people save 30 to $0% out of their income. 2% of people save above 40% out of their income

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Q3. Which of the following investment objective is important to you.

Q3. Which of the following
Percentage 50% 40% 30% 20% 10% 0%

investment objective is important to you.

Series1

investment

Growth of

Investment Objective

    

44% people give importance to growth of investment. 4% people give importance to regular dividend plan. 28% people give importance to tax saving. 12% people give importance to assumed return 12% people give importance to wealth creation

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Wealth creation

Tax saving

Q4.Which of the following best reflects the manner you wish to invest to achieve your goal.

Q4.Which of the following best reflects the manneryou wish to invest to achieve your goal.

14% 24%
My investment should be absolutely safe and I can not bear the risk to lose a single rupee of Money My investment should generate . the regular income that I can spend.

24%

38%

My investment should generate some current income and also growingincome over time. I want to create wealth not current income.

   

14% People prefer their investment should be absolutely safe & can’t bear the risk to lose a single rupee of money 24% People prefer their investment should generate the regular income that they can spend 38% People prefer their investment should generate some current income & also growing income over time 24% People prefer to create wealth not current income

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Q5.Have you ever invested in mutual funds.

Have you ever invested in mutual funds?

18% No Yes 82%

 

82% of people have not invested in mutual funds. 18% of people have invested in mutual funds.

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Q6.How much do you invest in mutual funds out of your investment?

  

72% of people invest 10% to 20% in mutual fund out of their investment. 28% of people invest 20% to 30% in mutual fund out of their investment. 0% of people invest 30% to 40% and 40% or above in mutual funds out of their investment.

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Q7.What is your experience with mutual funds ?

Q7,What is your experience with

mutual funds?
9% 13% 4% 23% Excellent Very Good Good Fair Poor 51%

    

04% People experience with mutual funds is excellent 23% People experience with mutual funds is very good 51% People experience with mutual funds is good 13% People experience with mutual funds is fair 09% People experience with mutual funds in poor

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Q8.What are the reason behind not investing in Mutual Funds ?

  

50% of people are not investing in mutual funds because of Lack of Knowledge. 33% of people are not investing in mutual funds because of No proper investment. 17% of people are not investing in mutual funds because of sky guidance.

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Q 9.How much investment in mutual fund fulfill your expectations regarding the return obtained ?

  


55.81%of people have got 10 to 20 % return from mutual funds. 37.20%of people have got 20 to 30 % return from mutual funds. 6.97%of people have got 30 to 40 % return from mutual funds. 0%of people have got 40 or above% return from mutual funds.

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Q10.Do you know about “Escorts Mutual Funds” ?

Q10.Do you Know about "Escorts Mutual Funds" ?

36% 64% Yes No

If Yes:

1)Do you Know about the equity schemes of the Escorts Mutual Funds ?
1) Do you know about the equity schemes of the Escorts Mutual Funds ?

47% 53%

Yes No

 

47% yes 53% no

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2)How much have you invested in Escorts Mutual Funds out of your income?

2) How much have you invested in Escorts mutual funds out of your investment ?

Percentage 100.00% 80.00% 60.00% 40.00% 20.00% 0.00% 10% to 20% 20% to 30% 30% to 40% 40% to 50%

Series1

Range of investment

   

10%- 20% People have invested in escorts mutual funds out of their income 20%-30% People have invested in escorts mutual funds out their income 30%-40% People have invested in escorts mutual funds out their income 40%-50% People have invested in escorts mutual funds out their income

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3) What is your experience with Escorts Mutual Funds ?

3) What is your experience with Escorts Mutual Funds ?

19%

0%

25% Very Good Good Fair Poor

56%

   

19% People experience with escorts mutual funds is poor 25% People experience with escorts mutual funds is good 56% People experience with escorts mutual funds is fair 0% People experience with escorts mutual funds is very good

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Q11.Which Mutual Funds Company do you like most for investment.

Q11. Which mutual funds company do you like most for investment ? HDFC Mutual Funds 34% UTI Mutual Funds ICICI Mutual Funds 28% 20% Other

6% 12%

Escorts
Mutual Funds

   


34% of people like to invest in HDFC Mutual funds. 28% of people like to invest in ICICI Mutual funds. 20% of people like to invest in UTI Mutual Funds. 12% of people like to invest in Escorts Mutual Funds. 6% of people like to invest in other Mutual Funds Companies.

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FINDINGS

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FINDINGS
Some of the results were very obvious and some of the results were very surprising. The survey was done in the major areas of Lucknow such as Hazratganj, Aliganj, Mahanagar, Alambagh etc. A sample size of 80 was considered.

 The first finding is “What is the average salary of the working people”. After survey I have found that 30% of people are earning 5000 to 15000 Rs per month ,40% of people are earning 15000 to 25000 Rs per month ,16% of people are earning 25000 to 35000 Rs per month ,14% of people are earning above 35000 Rs per month.  The second findings is “ How much people save out of their income.” After survey I have found that 58% of people save 10% to 20% out of their income, 32% of people save 20% to 30% out of their income, 8% of people save 30% to 40% out of their income, and 2% of people save above 40% out of their income,  The third finding is” What is the investment objective is important for the investment.” After survey I have found that 22 persons say the growth of investment is important for investment ,2 persons say dividend plan is important ,14 persons say tax saving is important, 6 people say that assumed return is important and 6 people also say that wealth creation is important for the investment.

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 The fourth finding is “What is the nature of the people during the investment”. After findings I have found that, out of 50 people 14 per. People say “My investment should be absolutely safe and I can’t bear the risk of losing a single rupee of money”. 24 per people says that “ My investment should generate regular income that I can spend.38 per people say that “My income should generate some current income and also growing income over time. and 24 per. People says “they want to create wealth not current income”.  The fifth finding is “What is the no of people who have invested in mutual funds”. After finding I have found that out of 80 people 82 per. People have invested in the mutual funds . and 18 per. People have not.  The next finding is “What is the experience with mutual funds of the people”. After survey I have found that 51 per people are having good experience,23 per. people are having very good experience,13per people are having fair experience ,9per.peopleare having poor experience. And 4 per. People having excellent experience.  The next finding is “What is the reason behind not investing in mutual funds. The result is most of the people not investing in mutual funds because of lack of Knowledge and because of no proper guidance.  .The next finding is “ What is the no of people who invested in the “ESCORTS MUTUAL FUNDS COMPANY ”.The result is out of 80 people 64 % people know the company and 36 % people don’t know the company.  With the reference of the “ESCORTS Mutual funds” I have found that



47 % of people know about the equity scheme of the “Mutual Funds”.

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

53% of people don’t know about the equity schemes of the “ESCORTS Mutual Funds”.



56% people are having fair experience with ESCORTS Mutual Funds ,25% people are having good experience and 19 % people are having poor experience with ESCORTS mutual funds.

 The last finding was about the Which mutual fund company is most preferable for the investment in mutual funds. After survey I have found that the most preferable company of mutual funds is the ”HDFC Mutual Funds Co.”After this co. the ICICI Mutual Funds is more preferable, company”. Funds co. is the “ESCORTS Mutual Funds

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SWOT ANALYSIS

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SWOT ANALYSIS

SWOT analysis is done for the environ as well as corporate appraisal it be can be applied to generate feasible alternative.

STRENGTH:
Strength are the areas in which a particular organization is strong. The organization can use these factor s to create an advantageous position for itself     Escorts mutual fund is a strong financial organization with a strong brand name. It is well established and reputed organization with a strong market network. It has a qualified and experience human resource. The work force is highly motivated. It organization has a very clear understanding of the environment in which it operate.

WEAKNESS:
These are the area where the organization should work hard to survive in the market. The late entry in the market of mutual fund gives a tough competition to the organization. The lesser no of advertising campaigns affects adversely the establishment of the products.

OPPORTUNITIES:
These are the factors which must be worked upon to in cash the numerous growth opportunities available. In other words theses are the situations favorable for the organizations. The mutual fund market is understanding be an explicit growth. So Escorts should take advantage of it. People’s attitude towards foreign and private is changing . The bank should take measure to create an atmosphere of reliability.

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THREATS:
The threat means any challenge posed by unfavorable situation to lead to loss in sales and profit if left unattached A fierce international competition is going to take place in the mutual fund market . GE Countrywide ,ABN Amro , Citi Bank are now on there in this market. Nationalized bank posed a threat in term in term of the liquidity and security of the money.

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CONCLUSIONS

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CONCLUSIONS
Some of the results were very obvious but some were surprising. The survey was done in major areas of Gorakhpur and Lucknow A Sample size of 30 was considered. Of the 30 people interviewed, 15 people were interested in Mutual fund or they think it as an unnecessary evil. People not interested in mutual fund are very few such people considered mutual fund as a liability.30% to 32% respondents living in and around Birhana Road and Pheel Khana respondents were found to be high profile. Both of these areas have a large number of shops and together they display great

unity in making decisions. Escorts Mutual fund should focus more on these areas as they provide a lot of reference business also. Escorts finance should make strategies to tap these potential customers. On the basis of this study, it was found that the customer share of escorts mutual fund was a merge 4%. Whereas the scene was dominated by the State Bank of India & ICICI with a customer share of 32% & 30% respectively. State Bank of India is a nationalized bank and is the highest profit earning financial institution in the country. ICICI had entered into the market much before than Escorts finance. Among the private sector bank, ICICI topped the charts with 35% of the customer share While LIC was a close second with 30% customer share.

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RECOMMENDATIONS

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RECOMMENDATIONS



The bank should spend a lot on advertising campaigns. At it has entered late in to the market ,there is a stiff competition from other nationalized, private and foreign bank . There is a lack of brand awareness for the financial product among the people. More hoardings should be put at strategic points such as near cinema halls , Central & State Government office in the city.



According to the life cycle concept of marketing financial products of Escorts mutual fund are bin their inception stage. So a heavy advertising expenditure is a must.



The Escorts mutual funds should try to win the confidence of the people by making them realize that private bank are also equally effective and efficient in providing security and liquidity to their money.



Fixing too many negative area in the inception stage will prove to be lethal for the organization. The list of negative areas should be cut short.



The policy of Escorts mutual fund to deal with the classes and ignore the masses will not be advantageous in the long run.

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ANNEXURE

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The Questionnaire comprised of a wide range of questions such as:

Name

Age

Qualification

Address

Contact number

Saving Account

Mode of investment

Investment objective

Knowledge about mutual fund

Reasons behind not investing in mutual funds

Investment decision
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Mutual fund service

Knowledge about Escorts mutual fund’s scheme

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BIBLIOGRAPHY

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BIBLIOGRAPHY

Books: 1. Mutual Funds in India. 2.Businness Research Methods 3.Financial Management

By. H. Sadat

By. William G. Z

By.Dr.R.S. Kulshreshtha

Search Engines:
1. www.google.com 2. www.dogpile.com 3. www.ansmers.com

Websites: 1.www.amfiindia.com
2.www.indiainfoline.com

3.www.value research.com 4.www.money.com 5.www.economictime.com 6.www.scmf.com

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7 www.escortsmutualfund.com

Magazines referred: 1.Businness India 3.India Today 2.Economic times 4.Business World

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