Reliance Mutual Fund Final Project
Reliance Mutual Fund Final Project
Reliance Mutual Fund Final Project
At RELIANCE MONEY, initially the trainees were imparted process and product know
ledge. They were given sufficient time to know about the products and also abou
t sales and distribution channel They had to work with the sales representatives
of the Distributor and think of ways of improving the sales and distribution ch
annel and implementing them. The main aim was to increase sales and for this di
f ferent ways were tried and implemented. They were provided with database and h
ad to make cold calls from the data. Company activity was also one of the major
so urces for generating business. Initially they even accompanied sales represen
tat ives to the clients place. Main objective was to know the need of the custom
er a nd how to fulfill that in the best way.
CONTENTS 1 2 3 4 5 6 7 8 9 10 13 14 15 16 INTRODUCTION 7 HISTORY & MUTUAL FUND R
EGULATION TYPES OF MUTUAL FUND SCHEME IN INDIA ADVANTAGES & FETURES OF MUTUAL FU
ND COMPANY PROFILE 21 COMPETITORS RELIANCE MONEY 31 OBJECTIVE OF STUDY 36 RESERC
H METHODOLOGY 37 DATA ANALYSIS AND INTERPRETATION OBSERVATION 45 FINDINGS AND SU
GGESTION ,QUESTIONNAIR LIMITATION 48 CONCLUSION 49 BIBLIOGRAPHY 50
9 11 19
40 46
INTRODUCTION Mutual fund Mutual funds can give investors access to emerging mark
ets A mutual fund is a professionally managed type of collective investment sche
me t hat pools money from many investors and invests it in stocks, bonds, shortterm money market instruments, and/or other securities. The mutual fund will hav
e a f und manager that trades the pooled money on a regular basis. As of early 2
008, t he worldwide value of all mutual funds totals more than $26 trillion. Sin
ce 1940, there have been three basic types of investment companies in the Uni te
d States: open-end funds, also known in the US as mutual funds; unit investmen t
trusts (UITs); and closed-end funds. Similar funds also operate in Canada. How
ever, in the rest of the world, mutual fund is used as a generic term for variou
s types of collective investment vehicles, such as unit trusts, open-ended inve
s tment companies (OEICs), unitized insurance funds, and undertakings for collec
ti ve investments in transferable securities (UCITS). There are a lot of investm
ent avenues available today in the financial market fo r an investor with an inv
est able surplus. He can invest in Bank Deposits, Corpo rate Debentures, and Bon
ds where there is low risk but low return. He may invest in Stock of companies w
here the risk is high and the returns are also proportio nately high. The recent
trends in the Stock Market have shown that an average re tail investor always l
ost with periodic bearish tends. People began opting for p ortfolio managers wit
h expertise in stock markets who would invest on their beha lf. Thus we had weal
th management services provided by many institutions. Howeve
r they proved too costly for a small investor. These investors have found a good
shelter with the mutual funds. Like most developed and developing countries the
mutual fund cult has been catching on in India. The reasons for this interestin
g occurrence are: 1. Mutual funds make it easy and less costly for investors to
satisfy their need for capital growth, income and/or income preservation. 2. Mut
ual fund brings the benefits of diversification and money management to the indi
vidual investor, providing a Opportunity for financial success that was once ava
ilable only to a select few. Fig.5.1 Concept of mutual fund HISTORY Unit Trust o
f India is the first Mutual Fund set up under a separate act, UTI Act in 1963, a
nd started its operations in 1964 with the issue of units under th e scheme US-6
41. In 1978 UTI was delinked from the RBI and Industrial Developmen t Bank of In
dia (IDBI) took over the Regulatory and administrative control in place of RBI.
In the year 1987 Public Sector banks like State Bank of India, Punjab Nationa l
Bank, Indian Bank, Bank of India, and Bank of Baroda have set up mutual funds. A
part from these above mentioned banks Life Insurance Corporation [LIC] and Gener
al Insurance Corporation [GIC] too have set up mutual fund. LIC established its
mutual fund in June 1989.while GIC had set up its mutual fund in December 1 990.
The mutual fund industry had assest under management of Rs. 47,004 crores. With
the entry of Private Sector Funds a new era has started in Mutual Fund I ndustry
[e.g:- Principal Mutual Fund.]
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 Fun
d Regulations. With the bifurcation of the erstwhile UTI which had in March 2000
more than Rs.76,000 cro res of assets under management and with the setting up
of a UTI Mutual Fund, con forming to the SEBI Mutual Fund Regulations, and with
recent mergers taking plac e among different private sector funds, the mutual fu
nd industry has entered its current phase of consolidation and growth. As at the
end of September, 2004, th ere were 29 funds, which manage assets of Rs.153108
crores under 421 schemes.
Types of Mutual Funds Scheme in India Open end versus Closed end Schemes There a
re two different types of funds.
Open-ended Fund/ Scheme Closed-ended fund/ Scheme The key differences between th
e closed-end and open-end schemes area as follows: The subscription to a closedend scheme is kept open only for a limited period ( usually one month to three m
onths). Where an open-end scheme accepts funds from investors by offering its un
its or shares on a continuing basis. A closed-end scheme does not allow investor
s to withdraw funds as and when they like, whereas an open-end scheme permits in
vestors to withdraw funds on a contin uing basis under a re-purchase arrangement
. A closed-end scheme has a fixed maturity period (usually five to fifteen years
) whereas an open-end scheme has no maturity period. The closed-end schemes are
listed on the secondary market, whereas the open-end schemes are ordinarily not
list. In India, three entities are central to a mutual fund operation: The spons
or, The mutual fund The asset management company. The sponsor is the key who est
ablishes the mutual fund and the asset Management Company. For example, Templeto
n International (sponsor) set up the Templeton Mu tual Fund which has been const
ituted as a trust under the Indian Trusts Act, 188 2 and registered with SEBI. T
he mutual fund is, in a way, an umbrella organizat ion that floats various schem
es in which investors participate. The asset manag ement company, organized as a
separate joint Stock company, manages the funds of mutual fund under its variou
s schemes. For example, Templeton Asset Management (India) Pvt. Ltd., the asset
management company set up by Templeton Internation al, manages the various schem
es of Templeton Mutual Fund. Why one should invest in mutual funds? Mutual funds
are preferable mode of investment due to the following reasons: Reduction of ri
sk Professional Management Tax benefits Low transaction costs Highly regulated L
iquidity Easy to administer Why one should not invest in mutual funds? The follo
wing are the reasons, which are deterrent to mutual fund investment: No control
over costs No tailor made portfolios Managing a portfolio of funds Constitution
of a Mutual Fund There are a number of bodies that form a part of the mutual fun
d, they are as fo llows: Sponsors The sponsor is the company which sets up the m
utual fund. It means anybody corpo rate acting alone or in combination with anot
her body corporate established a mu tual fund after initiating and completing th
e formalities. Trustees The management of the mutual fund is subject to the cont
rol of the board of trus tees of the fund. They guide the operations of the fund
and carry the crucial re sponsibility to see that AMC always act in the best in
terest of the investors. Asset Management Company The mutual fund is operated by
a separately established asset management company (AMC).It manages the funds of
the various schemes. It is entrusted with the spe cific task of mobilizing fund
s under the scheme. Custodian A custodian is a person carrying on the activities
of the safekeeping of the sec
change. These may be shares in very small or bankrupt companies; they may be der
ivatives; or they may be private investments in unregistered financial instrume
n ts (such as stock in a non-public company). In the absence of a public market
fo r these securities, it is the responsibility of the fund manager to form an e
sti mate of their value when computing the NAV. How much of a fund s assets may
be i nvested in such securities is stated in the fund s prospectus. Nature of In
come Distribution to Investors At a broad level, the investors have three option
s: DIVIDEND PAY OUT OPTION In this option investors receive dividends from the m
utual fund, as and when suc h dividends are declared. Dividends are paid in the
form of warrants, or are dir ectly credited to the investors bank accounts. GROWT
H OPTION Investors who do not require periodic income distributions can choose t
he growth option, where the incomes earned are retained in the investment portfo
lio, and allowed to grow, rather than being distributed to the investors. RE-INV
ESTMENT OPTION In this option investors re invest the dividends that are declare
d by the mutual fund, back into the fund itself, at NAV that is prevalent at the
time of reinve stment .In this option, the number of units held by the investor
will change wit h every reinvestment. The value of the units will be similar to
that under the d ividend option. Different schemes of Reliance Mutual fund The
different schemes offered to various kinds of investors by Reliance mutual f und
can be broadly classified into three categories Equity, Debt and sector spe cifi
c. Each of these categories has different investment objectives and therefor e h
as different portfolio. Equity Schemes Reliance Growth Fund Reliance Vision Fund
Reliance NRI Equity Fund Reliance Equity Opportunities Fund Reliance Index Fund
Reliance Tax Saver Fund Reliance Equity Fund Debt Schemes Reliance Income Fund
Reliance Medium Term Fund Reliance Short Term Fund Reliance Liquid Fund Reliance
Monthly Income Plan Reliance Gilt Securities Fund Reliance Floating Rate Fund R
eliance NRI Income Fund Sector Specific Schemes Reliance Banking Fund Reliance P
harma Fund Reliance Media and Entertainment Fund Reliance Diversified Power Sect
or Fund As I was more involved in the understanding and promotion of the NFO of
Reliance Equity Fund during the initial part of my training. I would like to sum
marize i t in brief. Reliance Equity Fund The Reliance Equity Fund is an open en
ded diversified equity fund that seeks to provide long term capital appreciation
by investing in a portfolio constituted o f equity and equity related securitie
s of top 100 companies by market capitaliza tion and of companies that are avail
able in derivatives segment, belonging to di verse sectors. The investment strat
egy being that even if the markets go down, the fund has a p art of its portfoli
o hedged, which aims at minimizing the downside risk. The fun
d will not only use hedging techniques to limit the downside risk but will also
try & capitalize on short selling opportunities to generate additional returns f
or the investors. The fund will invest 75-100% in equity and equity related ins
t ruments and 0-25% in debt and money market securities. In a nut shell what thi
s fund tries to do: Generate long term returns by investing in a diversified por
tfolio of st ocks. Minimize the downside risk by being in a hedged position Capi
talize on generating additional returns by selective shorting.
ADVANTAGES OF MUTUAL FUNDS There are numerous benefits of investing in mutual fu
nds and one of the key reas ons for its phenomenal success in the developed mark
ets like US and UK is the ra nge of benefits they offer, which are unmatched by
most other investment avenues . Diversification The nuclear weapon in your arsen
al for your fight against Risk. It si mply means that you must spread your inves
tment across different securities (sto cks, bonds, money market instruments, rea
l estate, fixed deposits etc.) and diff erent sectors (auto, textile, informatio
n technology etc.). Tax Benefits Any income distributed after March 31, 2002 wil
l be subject to tax in the assess ment of all Unit holders. However, as a measur
e of concession to Unit holders of open-ended equity-oriented funds, income dist
ributions for the year ending Marc h 31, 2003, will be taxed at a concessional r
ate of 10.5%. Regulations Securities Exchange Board of India (SEBI), the mutual fu
nds regulator has clearly defined rules, which govern mutual funds. These rules
relate to the formation, administration and management of mutual funds and also
prescribe disc losure and accounting requirements. Such a high level of regulati
on seeks to pro tect the interest of investors Affordability A mutual fund inves
ts in a portfolio of assets, i.e. bonds, shares, etc. depend ing upon the invest
ment objective of the scheme. Azn investor can buy in to a po rtfolio of equitie
s, which would otherwise be extremely expensive. Features related mutual funds R
eliance was the first fund house to launch sector funds with flexibilit y to inv
est in a range of 0% to 100% in either equity or debt instruments. . As at 31st
May 2008, more than 6.6 million people had invested in Relian ce Mutual Fund;the
investments comprised 16% of the countrys entire mutual fund . Mutual fund inves
tments linked to an ATM/debit card a Reliance innovation Indias first long-short
fund comes from Reliance Mutual Fund
RELIANCE INDUSTRIES LIMITED Reliance Group Holdings has grown from a small offic
e data-processing equipment firm in 1961 into a major insurance and financial-s
e rvices group in one generation under one chief. Reliance s insurance operation
s constitute the nation s 27th -largest property and casualty operation. The par
ent company also includes a dev elopment subsidiary in commercial real estate. R
eliance s international consulti ng group contains several subsidiaries in energ
y, environment, and natural resou rces consulting. A financial arm invests in ot
her businesses, primarily televisi on stations. Reliance Insurance started as th
e Fire Association of Philadelph ia in 1817, organized by 5 hose and 11 engine f
ire companies. It became the nati on s first association of volunteer fire depar
tments. Business got a boost as a result of the Great Chicago Fire of 1871.The a
ssociation soon developed a field of agents to write p olicies across the countr
y. For the first two years, shareholders received divid ends twice a year of $5
a share, which increased gradually to $10 in 1876. In 1972, the Reliance insuran
ce group divided its pool so that Reli ance Insurance Company and its subsidiari
es handled most standard lines, while United Pacific Insurance Company handled t
he nonstandard and other operations. In 1977, the company moved into real estate
, forming Continenta l Cities Corporation, which became Reliance Development Gro
up, Inc. This divisio n handled all real estate operations of the parent company
and other subsidiarie s. Reliance Capital Group, L.P. constituted the investmen
t branch of the Reliance conglomerate. In December 1989, Reliance Capital sold i
ts investment, Days Corporation, parent company of Days Inn of America, the worl
d s third-largest hotel chain; it had b een purchased in 1984. Reliance Industri
es Limi ted. The Group s principal activity is to produce and distribute plastic
and int ermediates, polyester filament yarn, fibre intermediates, polymer inter
mediates, crackers, chemicals, textiles, oil and gas. The refining segment inclu
des produ ction and marketing operations of the Petroleum refinery. The petroche
micals seg ment includes production and marketing operations of petrochemical pr
oducts name ly, High and Low density Polyethylene. Reliance Money is promoted by
Reliance Capital; one of India s leading and faste st growing private sector fi
nancial services companies, ranking among the top 3 private sector financial ser
vices and banking companies, in terms of net worth. Reliance Capital is a part o
f the Reliance Anil Dhirubhai Ambani Group. Thus, Reliance Money provides a comp
rehensive platform, offering an investment a venue for a wide range of asset cla
sses. Its endeavor is to change the way India transacts in financial market and
avails financial services. Reliance Money off ers a single window facility, enab
ling you to access amongst others, Equities, E quity and Commodity derivatives,
Offshore Investments, IPOs, Mutual Funds, Life Insurance and General Insurance pr
oducts. Advantages offered by Reliance money over other companies: Cost Effectiv
e Convenience Security Single Window for Multiple Products 3 in 1 Integrated Acc
ess Demat Account with Reliance Capital Other Services like research, live news
from Reuter and Dow Jones, etc.
"Growth has no limit at Reliance. I keep revising my vision. Only when you can d
ream it, you can do it." Dhirubhai Ambani founded Reliance as a textile company
and led its evolution as a global leader in the materials and energy value chain
businesses. He is credited to have brought about the equity cult in India in th
e late sevent ies and is regarded as an icon for enterprise in India. He epitomi
zed the spirit dare to dream and learn to excel . The Reliance Group is a living
testimony to his indomitable will, single-minded dedication and an unrelenting
commitment to his goals.
RELIANCE MUTUAL FUND This groupdominates this key areain the financial sector..T
his mega business houses show that it has assetsunder management ofRs. 90,938 cr
ore(US$ 22.73 billion) andan investor base of over6.6 million (Source:www.amfiin
dia.com) .Reliances mutual fundschemes are managed byReliance Capital AssetManage
ment Li mitedRCAM), a subsidiary of Reliance Capital Limited,which holds 93.37%
ofthe paid-up capitalof RCAM. The company notchedup a healthy growth ofRs. 16,35
4 crore(US$ 4.09 billion)in assets under management in February2008 and helped p
r opelthe total industry-wideAUM to Rs. 565,459 crore (US$ 141.36 billion)(Sourc
e: indiainvestments.com). A sharp rise infixed maturity plans (FMPs) and collect
io n ofRs. 7000 crore (US$ 1.75 billion) through newfund offers (NFOs) created t
his surge. In AUrankings, Reliance continues to be in thenumber one spot. India
s Best Offering: Reliance Mutual Fund Investing has become global. Today, a lot
of countries are waking up to the re ality that in order to gain financial growt
h, they must encourage their citizens to not only save but also invest. Mutual f
unds are fast becoming the mode of in vestment in the world.
The Anil Dhirubhai Ambani Group owns Reliance; they are the fastest growing inve
stment company in India so far. To meet the erratic demand of the financial mar
k et, Reliance Mutual Fund designed a distinct portfolio that is sure to please
po tential investors. Reliance Capital Asset Management Limited manages RMF. Vis
ion And Mission Reliance Mutual Fund is so popular because it is investor focuse
d. They show the ir dedication by continually dishing out innovative offerings a
nd unparalleled s ervice initiatives. It is their goal to become respected globa
lly for helping pe ople achieve their financial dreams through excellent organiz
ation governance an d customer care. Reliance Mutual fund wants a high performan
ce environment that is geared at making investors happy. RMF aims to do business
lawfully and without stepping on other people. They want to be able to create p
ortfolios that will ensure the liquidity of the investmen t of people in India a
s well as abroad. Reliance Mutual Fund also wants to make sure that their shareh
olders realize reasonable profit, by deploying funds wisel y. Taking appropriate
risks to reach the company s potential is also one of Reli
COMPARATIVE STUDY OF MUTUAL FUND Major competitor of Reliance Money Company Prof
ile of HDFC HDFC BANK is one of the leading Depository Participant (DP) in the c
ountry with over 8 Lac demat accounts. HDFC Bank Demat services offers you a sec
ure and convenient way to keep track of your securities and investments, over a
period of time, without the hassle of h andling physical documents that get muti
lated or lost in transit. HDFC BANK is Depository participant both with -Nationa
l Securities Depositories Limited (NSDL) and Central Depository Services Limited
(CDSL). Features & Benefits As opposed to the earlier form of dealing in physic
al certificates with delays i n transaction, holding and trading in Demat form h
as the following benefits: Settlement of Securities traded on the exchanges as w
ell as off market t ransactions. Shorter settlements thereby enhancing liquidity
. Pledging of Securities. Electronic credit in public issue. Auto Credit of Righ
ts / Bonus / Public Issues / Dividend credit through ECS. Auto Credit of Public
Issue refunds to the bank account. No stamp duty on transfer of securities held
in demat form. No concept of Market Lots. Change of address, Signature, Dividend
Mandate, registration of power of attorney, transmission etc. can be effected a
cross companies held in demat form by a single instruction to the Depository Par
ticipant (DP). Secured & easy transaction processing HDFC Bank Ltd provides conv
enient facility called SPEED-e (Internet based tran saction) whereby account hol
der can submit delivery instructions electronically through SPEED-e website (htt
ps://speed-e.nsdl.com). SPEED-e offers secured means of transaction processing e
liminating preparation of instruction slips and subm ission of the same across t
he counter to the depository participant. The IDEAS facility helps in viewing th
e current transactions and balances (holdings) of D emat account on Internet on
real time basis.
Company Profile of ICICI ICICIDirect (or ICICIDirect.com) is stock trading compa
ny of ICICI Bank. Along w ith stock trading and trading in derivatives in BSE an
d NSE, it also provides fa cility to invest in IPOs, Mutual Funds and Bonds. Tra
ding is available in BSE an d NSE ICICIDirect offers 3 different online trading
platforms to its customers 1. Investment Account Along with stock trading and IP
O investing in BSE and NSE, Wise Investment accou nt also provide options to inv
est in Mutual Funds and Bonds online.
OBJECTIVE To give a brief idea about the benefits available from mutual Fund inv
estment. To give an idea of the types of schemes available. Explore the recent d
evelopments in the mutual funds in To give an idea about the regulations of mutu
al funds. To analyze reliance mutual fund strategy against its competitor. India
RESEARCH METHODOLOGY Research as a care full investigation or enquiry specially
through search for a new facts in any branch of knowledge Research is an academic
activity and such as the term should be used in technic al sense.The manipulati
on of things , concepts or symbols for the purpose of ge neralizing to extend ,c
orrect or verify knowledge ,whether that knowledge thro ugh objective. TYPES OF
RESEARCH ANALYTICAL RESERCH In this project work, analytical research is used. I
n this project has to use fa cts or information .Already used available ,and ana
lyze these to make a critica l evolution of the material.
METHODS OF DATA COLLECTION In this project work primary and secondary data sourc
es of data has been used. Primary data: Primary data collect through observation
, or through direct commun ication or doing experiments . Secondary data: Second
ary data means already available through books ,journals , magazines ,newspaper.
TOOLS OF ANALYSIS For the proper analysis of data Quantitative Technique such as
percentage metho d was used.
DATA ANALYSIS AND INTERPRETATION Q.1 Which banking mutual fund do you prefer for
mutual Fund ? Co mpany Name Persentages of respondents Reliance Money 25 HDFC 1
0 ICICI 15
INTERPRETATION: 50% of respondent have Reliance Money, 30% of respondent says th
at other%.
Q.2
Which banking mutual fund offer you good investment plan? Percentage of responde
nt 22
Company Name Reliance HDFC 21 ICICI 7
INTERPRETATION: 44% respondent for Reliance,32 %forHdfc,14% for ICICI Q.3 Which
banking mutul fund offer a lot of tax saving? Company Name Percentage of respond
ent Reliance 20 HDFC 15 ICICI 15
INTERPRETATION: 40% respondent for Reliance,30 %forHdfc,30% for ICICI
Q.4 Which banking mutual fund offer you a large number of product & services? Co
mpany Name Percentage of respondent Reliance 18 HDFC 16 ICICI 16
FINDINGS AND SUGGESTION In Equity Schemes we have taken Reliance Vison Fund and
Reliance growth Fund . Both schemes are open ended but Reliance Growth fund is m
ore valuable for Relian ce Mutual Fund than reliance vision Fund. In Dedt scheme
we have taken Reliance money Manager Fund and Reliance Liquidty Fund .In it bot
hs schemes are open ended but reliance money manager is more bene ficial for rel
iance mutual fund . In sector specific scheme we have taken Reliance media and e
ntertainment fund an d Reliance Pharma fund scheme both is more efficient for Re
liance Mutual Fund. Above all the schemes of Reliance Mutual Fund Debt schemes a
re best schemes for Mutual Fund . There is a Good investment plan and saving sch
eme in reliance Mutual Fund. SUGGESTION Reliance Money have to add some extra fe
atures in it with aggressive mar keting promotional strategy. Advertisement on t
elevision is the main source of attraction so the comp any must advertise its pr
oducts heavily. Product must be improved . There should be provision of complain
suggestion boxes at each branch.
QUESTIONNAIR Q.1 Which banking mutual fund do you prefer for mutual Fund ? Relia
nce Money HDFC ICICI Q.2 Which banking mutual fund offer you good investment pla
n? Reliance Money HDFC ICICI
Q.3 Which banking mutul fund offer a lot of tax saving? Reliance Money HDFC ICIC
I Q.4 Which banking mutual fund offer you a large number of product & services?
Reliance Money HDFC ICICI
Q.5 Which banking mutual fund offer you a good e-mail facility ? Reliance Money
HDFC ICICI Limitations
The time constraint was The study is limited to selected. The study is limited t
o The lack of information
one of the major problems. the different schemes available under the mutual fund
s selected mutual fund schemes. sources for the analysis part.
CONCLUSION Mutual Fund investment is better than other raising fund . Reliance M
utual Fund have good returns in investment . A good brand is always welcomed ove
r here people are more aware and conscious fo r the brand so they go for they ar
e ready to spend some extra bucks for the qual ity . At last all con be conclude
d by that Reliance Money is still growing industry in India and is still explori
ng its potential and prospects in here.
BIBLIOGRAPHY Websites: www.reliancemoney.com www.hdfc.com www.icicidirect.com Re
ferencebooks: FINANCIAL INSTITUTIONS AND MARKETS - L.M.BHOLE INVESTMENT MANAGEMENT
- V.K.BHALLA Research Methodology - Kothari