PROJECT REPORT

ON

FINANCIAL INSTITUTION IN INDIA MUTUL FUND

Submitted by

SURAJ MANE (Roll no. : 26) T.Y.B.M.S.

Under the guidance of

Ms. N.NANDANI

Submitted to University of Mumbai in partial fulfillment of the requirements for the award of degree Of

BACHELOR OF MANAGEMENT STUDIES

PATUCK GALA COLLEGE OF COMMERCE & MANAGEMENT SANTACRUZ (E), MUMBAI-400055

ACADEMIC YEAR 2011-12

DECLARATION

I, MISS SHAIKH NILUFAR SHAFI, ROLL NO:-26, student of PATUCK GALA COLLEGE OF COMMERCE AND MANAGEMENT, studying in T.Y.B.M.S hereby declare that I have completed my project, titled FINANCIAL INSTITUTION IN INDIA MUTUAL FUND in the academic year 2011-2012. The information submitted here is true and original as per my research and observation.

______________________ SIGNATURE OF STUDENT

(KUMAR: SURAJ MANE) (ROLL NO: 26)

CERTIFICATE

THIS IS TO CERTIFY THAT MANE SURAJ LAXMAN, (ROLL NO. 26) STUDENT OF T.Y.B.M.S OF PATUCK GALA COLLEGE OF COMMERCE AND MANAGEMENT HAS COMPLETED THE PROJECT ON BLACK MONEY AND ITS IMPACT ON SAVING AND INVESTMENT IN THE ACADEMIC YEAR 2011-2012. THE INFORMATION SUBMITTED IS TRUE AND ORIGINAL TO THE BEST OF OUR KNOWLEDGE.

_____________________________ SIGNATURE OF PRINCIPAL (DR. MRS. MEETA)

______________________________ SIGNATURE OF PROJECT GUIDE (PROF. ALKA PANDEY)

_______________________________ SIGNATURE OF EXTERNAL EXAMINER

___________________________________ SIGNATURE OF BMS CO-ORDINATOR (PROF. BYSHI PANIKAR)

COLLEGE SEAL

ACKNOWLEDGEMENT

This goes to all those, who have knowingly and unknowingly been a great support for me to accomplish this piece of work. First of all, I express my sincere thanks to Dr. (Mrs.) Meeta Pathade, principal of Patuck Gala College for having giving a chance to undergo the project work. Secondly, I convey my sincere thanks to the course Co-ordinator Mrs. Byshi
Panikar for her valuable suggestions and Co-operation which helped me in completing the project successfully.

I am deeply grateful to my internal project guide Miss. N.NANDINI Lecturer who gave me very valuable ideas and required suggestions for refining this project study. Without the help of these three people this project would not be possible.

It gives me immense pleasure to present this project in the course of Bachelor in Management Studies. And I would also like to share the credit with Miss N.NANDINI for her valuable tip in this project.

EXECUTIVE SUMMARY
In few years Mutual Fund has emerged as a tool for e n s u r i n g o n e s f i n a n c i a l w e l l being. Mutual Funds have not only contributed to the India growth story but have also helped families tap into the success of Indian Industry. As information and awareness is rising more and more people are enjoying the benefits of investing in mutual funds. The main reason the number of retail mutual fund investors remains small is that nine in ten people with incomes in India do not know that mutual funds exist But once people are aware of mutual fund investment opportunities, the number who decide to i n v e s t i n m u t u a l f u n d s i n c r e a s e s t o a s m a n y a s o n e in five people. The trick for converting a person with no knowledge of mutual funds to a new Mutual Fund customer is to understand which of t h e p o t e n t i a l i n v e s t o r s a r e m o r e l i k e l y t o b u y mutual funds and to use the right arguments in the sales process that customers will accept as important and relevant to their decision. T h i s P r o j e c t g a v e m e a g r e a t l e a r n i n g e x p e r i e n c e a n d a t t h e s a m e t i m e i t g a v e m e enough scope to implement my analytical ability. The analysis and advice presented in this Project Report is based on market research on the saving and investment practices of the investors and preferences of the investors for investment in Mutual Funds. This Report will help to know about the investors Preferences in Mutual Fund means Are they prefer any particular Asset Management Company (AMC), Which type of Product they prefer, Which Option (Growth or Dividend) they prefer or Which Investment Strategy they follow (Systematic Investment Plan or One time Plan). This Project as a whole can be divided into two parts. The first part gives an insight about Mutual Fund and its various aspects, the CompanyP r o f i l e , O b j e c t i v e s o f t h e s t u d y , R e s e a r c h M e t h o d o l o g y . O n e c a n h a v e a b r i e f knowledge about Mutual Fund and its basics through the Project. The second part of the Project consists of data and its analysis collected through surveyed one on 200 people. For the collection of Primary data I made a questionnaire and surveyed of 200 people. I also taken interview of many People those who were coming at the SBI Branch where I done my Project. I visited other AMCs in Dehradoon to get some knowledge related to my topic. I studied about the products and strategies of other AMCs in Dehradoon to know why people prefer to invest in those AMCs. This Project covers the topic THE MUTUAL FUND IS BETTER INVESTMENT PLAN.The data collected has been well organized and presented. I hope the research find in gsand conclusion will be of use.

INDEX

Acknowledgement Declaration Executive Summary Chapter - 1 INTRODUCTION Chapter - 2 COMPANY PROFILE Chapter - 3 OBJECTIVES AND SCOPE Chapter - 4 RESEARCH METHODOLOGY Chapter - 5 DATA ANALYSIS AND INTERPRETATION Chapter - 6 FINDINGS AND CONCLUSIONS Chapter - 7 SUGGESTIONS & RECOMMENDATIONSBIBLIOGRAPHY MUTUAL FUNDS

CHAPTER: 1

Introduction to Mutual Funds

Wealthy individuals and institutions have always had access to professional money managers. They also have the wherewithal to properly diversify their holdings. These are the two major disadvantages for the small time individual investor the relatively small size of their portfolio does not allow them to properly diversify and most top money managers require a minimum of $250,000 (or more) to open an account. Mutual funds provide the answer for the individual investor. Most have very low initial investment requirements and some have no minimum requirement at all you can start investing with as little as $100.00 or even less!

What is a mutual fund? A mutual fund is a professionally managed investment company that combines the money of many individuals and invests this pooled money in a wide variety of different securities. It is by pooling the money of many individuals that mutual funds are able to provide the diversification and money management (along with many other advantages) that were once reserved only for the wealthy. Professional money managers take this pool of money and invest it in a wide variety of stocks, bonds, or other securities depending on the investment objective, or goal, of the particular fund. It is the investment objective of the fund that guides the manager in selecting the various securities for the fund. It is the investment objective of the mutual fund that also guides the investor on which funds to invest in. Since different investors have different objectives, there are a number of different kinds of mutual funds, i.e., some mutual funds may provide monthly income while others seek long-term capital appreciation. Mutual funds can be classified according to their investment objective. Some of the classifications include money market funds, growth funds, balanced funds, income funds, and many others. We will discuss the many different types of funds and their characteristics elsewhere on this website. (See Categories of Mutual Funds.) How to Profit with Mutual Funds When you invest in a mutual fund you hope that the value will rise and you can eventually sell your shares for a profit. This is one of the ways you can profit with mutual funds. Another way is through capital gains. When a mutual fund sells a security for a higher price than it originally paid for it, it is known as a capital gain. Most mutual funds distribute their capital gains to shareholders at least annually, some more often. The last way to profit with mutual funds is with dividends or interest. If the fund has invested in bonds or dividendpaying stocks, it must pass the dividends or interest earned on to its shareholders. Like capital gains, this is done at least annually.

Net Asset Value (NAV) When you invest your money in a mutual fund, you buy shares in that fund. To determine the price of those shares, each day the fund adds up the total value of the securities held in its portfolio. This total is divided by the number of shares outstanding. The resulting figure is known as the Net Asset Value or NAV. To find out the value of your holdings, you simply multiply the number of shares you own by the net asset value. The NAV of most funds is listed in most daily newspapers. The NAV will change daily depending on how well the underlying securities of the fund perform. If the securities held by the fund go up in value so will the value of your shares.

Open End & Closed End Mutual Funds As stated above, mutual funds are generally classified according to the investment objective of the fund. They are also classified according to how they are bought and sold. There are open- or closed-end funds and there are load or no-load funds. An open-end mutual fund is a mutual fund that continuously issues new shares as needed and buys them back when investors wish to sell. There is no limit to how many shares an openend fund can sell. The buy and sell price is based on the net asset value of the fund. The majority of mutual funds on the market today are open-end funds and are the type we are concerned with in this tutorial. The characteristics of a closed-end mutual fund more closely resemble that of an individual stock. A closed-end fund is a mutual fund that issues a fixed number of shares which are then traded (bought and sold) on a stock exchange or over the counter. Although the underlying value of the securities in a closed-end fund may be, for example, $10.00 per share, they may sell for more or less depending on investors outlook for the future value of the securities.

Load Funds vs No-Load Funds Load funds are simply mutual funds with a sales charge, or load. Load funds are generally sold by stockbrokers, financial planners, or other financial salespeople who charge you a commission every time you buy new shares. Under rules set by the National Association of Securities Dealers (NASD), the maximum charge or load allowed is 8.5% which is deducted from the amount of your investment. On a $1,000 investment, for example, you are really beginning with just $915.00. The difference goes to the salesperson who sold you the shares. This is known as a front-end load. There may also be a fee charged when you redeem, or sell, your shares. This fee, known as a back-end load, may be the only charge or it may be in addition to the front-end load. No-load funds are mutual funds with no sales charge. They are generally bought directly from the fund. 100% of your money is invested in shares of the particular fund. Similar to noload funds are funds known as low-load funds. These are funds with a load of between 1% and 3% and are bought either directly from the fund or through financial salespeople. One other fee to be aware of is the so-called 12b-1 fee (named after the SEC regulation that authorized it). This regulation allows mutual funds to charge up to 1.25% of their net asset

value to pay for such things as advertising and marketing expenses. If a fund charges 12b-1 fees (about 40% do) it must be stated in the prospectus. In this tutorial we are only concerned with open-end mutual funds. This author further suggests learning all you can about mutual funds and sticking with no-load or low-load mutual funds. There is no evidence that load funds perform better than no-load funds. Unless you need help in selecting a fund, go with a no-load fund and save the sales charge. Over time that small fee can mean many thousands of dollars to you. Lets look at an example: Lets assume you invest $10,000 in each of two funds, one a no-load fund and the other a load fund with an 8.5% load. Lets further assume both funds earn an identical 15% average annual return. After 5 years, the no-load fund would outperform the load fund by $1,710; after 10 years, $3,439; and after 20 years the no-load fund would outperform the load fund by $13,911 more than your original total investment! $10,000 invested: 15% average annual total return: No-Load Load 5 Years 20,114 18,404 37,017 Difference 1,710 3,439

10 Years 40,456 20 Years 163,665

149,754 13,911

As the above example shows, it does pay to stay with no-load or low-load funds. In Introduction to Mutual Funds, we have described what a mutual fund is and how they are classified according to their investment objective. We have shown the three ways you can profit with mutual funds. We have also described the charges a mutual fund can levy and why it may be best to stick with no-load or low-load funds.

CONCEPT OF MUTUAL FUND Mutual fund is a trust that pools money from a group of investors (sharing common financial goals) and invest the money thus collected into asset classes that match the stated investment objectives of the scheme. Since the stated investment objectives of a mutual fund scheme generally form the basis for an investor's decision to contribute money to the pool, a mutual fund can not deviate from its stated objectives at any point of time. Every Mutual Fund is managed by a fund manager, who using his investment management skills and necessary research works ensures much better return than what an investor can manage on his own. The capital appreciation and other incomes earned from these investments are passed on to the investors (also known as unit holders) in proportion of the number of units they own.

When an investor subscribes for the units of a mutual fund, he becomes part owner of the assets of the fund in the same proportion as his contribution amount put up with the corpus (the total amount of the fund). Mutual Fund investor is also known as a mutual fund shareholder or a unit holder. Any change in the value of the investments made into capital market instruments (such as shares, debentures etc) is reflected in the Net Asset Value (NAV) of the scheme. NAV is defined as the market value of the Mutual Fund scheme's assets net of its liabilities. NAV of a scheme is calculated by dividing the market value of scheme's assets by the total number of units issued to the investors.

Advantages and Disadvantages of Mutual Funds

Advantages What are the key advantages of mutual fund investing? Diversification Using mutual funds can help an investor diversify their portfolio with a minimum investment. When investing in a single fund, an investor is actually investing in numerous securities. Spreading your investment across a range of securities can help to reduce risk. A stock mutual fund, for example, invests in many stocks - hundreds or even thousands. This minimizes the risk attributed to a concentrated position. If a few securities in the mutual fund lose value or become worthless, the loss maybe offset by other securities that appreciate in value. Further diversification can be achieved by investing in multiple funds which invest in different sectors or categories. This helps to reduce the risk associated with a specific industry or category. Diversification may help to reduce risk but will never completely eliminate it. It is possible to lose all or part of your investment Professional Management: Mutual funds are managed and supervised by investment professionals. As per the stated objectives set forth in the prospectus, along with prevailing market conditions and other factors, the mutual fund manager will decide when to buy or sell securities. This eliminates the investor of the difficult task of trying to time the market. Furthermore, mutual funds can eliminate the cost an investor would incur when proper due diligence is given to researching securities. This cost of managing numerous securities is dispersed among all the investors according to the amount of shares they own with a fraction of each dollar invested used to cover the expenses of the fund. What does this mean? Fund managers have more money to research more securities more in depth than the average investor. Convenience: With most mutual funds, buying and selling shares, changing distribution options, and obtaining information can be accomplished conveniently by telephone, by mail, or online. Although a fund's shareholder is relieved of the day-to-day tasks involved in researching, buying, and selling securities, an investor will still need to evaluate a mutual fund based on investment goals and risk tolerance before making a purchase decision. Investors should always read the prospectus carefully before investing in any mutual fund. Liquidity: Mutual fund shares are liquid and orders to buy or sell are placed during market hours. However, orders are not executed until the close of business when the NAV (Net Average Value) of the fund can be determined. Fees or commissions may or may not be applicable. Fees and commissions are determined by the specific fund and the institution that executes the order.

Minimum Initial Investment: Most funds have a minimum initial purchase of $2,500 but some are as low as $1,000. If you purchase a mutual fund in an IRA, the minimum initial purchase requirement tends to be lower. You can buy some funds for as little as $50 per month if you agree to dollar-cost average, or invest a certain dollar amount each month or quarter.

Disadvantages Risks and Costs: Changing market conditions can create fluctuations in the value of a mutual fund investment. There are fees and expenses associated with investing in mutual funds that do not usually occur when purchasing individual securities directly. As with any type of investment, there are drawbacks associated with mutual funds.

No Guarantees. The value of your mutual fund investment, unlike a bank deposit, could fall and be worth less than the principle initially invested. And, while a money market fund seeks a stable share price, its yield fluctuates, unlike a certificate of deposit. In addition, mutual funds are not insured or guaranteed by an agency of the U.S. government. Bond funds, unlike purchasing a bond directly, will not re-pay the principle at a set point in time. The Diversification "Penalty." Diversification can help to reduce your risk of loss from holding a single security, but it limits your potential for a "home run" if a single security increases dramatically in value. Remember, too, that diversification does not protect you from an overall decline in the market. Costs. In some cases, the efficiencies of fund ownership are offset by a combination of sales commissions, 12b-1 fees, redemption fees, and operating expenses. If the fund is purchased in a taxable account, taxes may have to be paid on capital gains. Keep track of the cost basis of your initial purchase and new shares that are acquired by reinvesting distributions. It's important to compare the costs of funds you are considering. Always look at "net" returns when comparing fund performances. Net return is the bottom line; an investment's true returns after all costs are deducted.

HISTORY OF THE INDIAN MUTUAL FUND INDUSTRY

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 dramatic improvements, 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 rose the AUM to Rs. 470 bn in March 1993 and till April 2004, it reached the height of 1,540bn.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. Large sections of Indian investors are yet to be intellectuated with the concept. Hence, it is the 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. Each phase is briefly described as under. First Phase - 1964-87 Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up by the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial Development Bank of India (IDBI) took over the regulatory and administrative control in place of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6,700 crores of assets under management. Second Phase - 1987-1993 (Entry of Public Sector Funds) Entry of non-UTI mutual funds.SBI Mutual Fund was the first followed by Can bank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC in 1989 and GIC in 1990. The end of 1993 marked Rs.47,004 as assets under management. Third Phase - 1993-2003 (Entry of Private Sector Funds) With the entry of private sector funds in 1993, a new era started in the Indian mutual fund industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year in which the first Mutual Fund Regulations came into being, under which all mutual funds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993.The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI (Mutual Fund) Regulations 1996.The number of mutual fund houses went on increasing, with many foreign mutual funds setting up funds in India and also the industry has witnessed several mergers and acquisitions. As at the end of January 2003, there were 33 mutual funds with total assets of Rs. 1,21,805 crores. The Unit Trust of India with Rs.44,541 crores of assets under management was way ahead of other mutual funds.

Fourth Phase - since February 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.29,835 crores (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 UTI which had in March 2000 more than Rs.76,000 crores 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.153108 crores under 421 schemes.

Phase IV. Growth and SEBI Regulation - 1996-2004 The mutual fund industry witnessed robust growth and stricter regulation from the SEBI after the year 1996. The mobilisation of funds and the number of players operating in the industry reached new heights as investors started showing more interest in mutual funds. Invetors' interests were safeguarded by SEBI and the Government offered tax benefits to the investors in order to encourage them. SEBI (Mutual Funds) Regulations, 1996 was introduced by SEBI that set uniform standards for all mutual funds in India. The Union Budget in 1999 exempted all dividend incomes in the hands of investors from income tax. Various Investor Awareness Programmes were launched during this phase, both by SEBI and AMFI, with an objective to educate investors and make them informed about the mutual fund industry. In February 2003, the UTI Act was repealed and UTI was stripped of its Special legal status as a trust formed by an Act of Parliament. The primary objective behind this was to bring all mutal fund players on the same level. UTI was re-organised into two parts: 1. The Specified Undertaking, 2. The UTI Mutual Fund Presently Unit Trust of India operates under the name of UTI Mutual Fund and its past schemes (like US-64, Assured Return Schemes) are being gradually wound up. However, UTI Mutual Fund is still the largest player in the industry. In 1999, there was a significant growth in mobilisation of funds from investors and assets under management which is supported by the following data:

GROSS FUND MOBILISATION (RS. CRORES) FROM 01-April-98 01-April-99 01-April-00 01-April-01 01-April-02 01-Feb.-03 01-April-03 01-April-04 01-April-05 TO 31-March-99 31-March-00 31-March-01 31-March-02 31-Jan-03 31-March-03 31-March-04 31-March-05 31-March-06 UTI 11,679 13,536 12,413 4,643 5,505 * PUBLIC SECTOR 1,732 4,039 6,192 13,613 22,923 7,259* 68,558 1,03,246 1,83,446 PRIVATE SECTOR 7,966 42,173 74,352 1,46,267 2,20,551 58,435 5,21,632 7,36,416 9,14,712 TOTAL 21,377 59,748 92,957 1,64,523 2,48,979 65,694 5,90,190 8,39,662 10,98,158

ASSETS UNDER MANAGEMENT (RS. CRORES) AS ON UTI PUBLIC SECTOR 8,292 PRIVATE SECTOR TOTAL 6,860 68,472

31-March-99 53,320

Phase V. Growth and Consolidation - 2004 Onwards The industry has also witnessed several mergers and acquisitions recently, examples of which are acquisition of schemes of Alliance Mutual Fund by Birla Sun Life, Sun F&C Mutual Fund and PNB Mutual Fund by Principal Mutual Fund. Simultaneously, more international mutal fund players have entered India like Fidelity, Franklin Templeton Mutual Fund etc. There were 29 funds as at the end of March 2006. This is a continuing phase of growth of the industry through consolidation and entry of new international and private sector players.

CATEGORIES OF MUTUAL FUND:

Types of Mutual Funds BY STRUCTURE Close Ended Fund/ Scheme: A close-ended fund or scheme has a stipulated maturity period For eg. 5-7 years. The fund is open for subscription only during a specified period at the time of launch of the scheme. Investors can invest in the scheme at the time of the initial public issue and thereafter they can buy or sell the units of the scheme on the stock exchanges where the units are listed. In order to provide an exit route to the investors, some close-ended funds give an option of selling back the units to the mutual fund through periodic repurchase at NAV related prices or they are listed in secondary market. Open Ended Fund/ Scheme: An open-ended mutual fund is the most common type of mutual fund available for investment. An investor can choose to invest or transact in these schemes when ever he likes to. In an open-ended mutual fund, there is no limit to the number of investors, shares, or overall size of the fund, unless the fund manager decides to close the fund to new investors in order to keep it manageable. The value or share price of an open-ended mutual fund is determined at the market close every day and is called the Net Asset Value (NAV).

Interval Schemes: Interval Schemes are that scheme, which combines the features of open-ended and close-ended schemes. The units may be traded on the stock exchange or may be open for sale or redemption during pre-determined intervals at NAV related prices. FMP or the Fixed Maturity Plans are the example for these types of schemes.

Types of Mutual Funds BY INVESTMENT OBJECTIVE Growth Schemes Growth Schemes are also known as equity schemes. The aim of these schemes is to provide capital appreciation over medium to long term. These schemes normally invest a major part of their fund in equities and are willing to bear short-term decline in value for possible future appreciation. Income Schemes Income Schemes are also known as debt schemes. The aim of these schemes is to provide regular and steady income to investors. These schemes generally invest in fixed income securities such as bonds and corporate debentures. Capital appreciation in such schemes may be limited. Index Schemes Index schemes attempt to replicate the performance of a particular index such as the BSE Sensex or the NSE 50. The portfolio of these schemes will consist of only those stocks that constitute the index. The percentage of each stock to the total holding will be identical to the stocks index weight age. And hence, the returns from such schemes would be more or less equivalent to those of the Index. Balanced funds: As the name suggest they, are a mix of both equity and debt funds. They invest in both equities and fixed income securities, which are in line with pre-defined investment objective of the scheme. These schemes aim to provide investors with the best of both the worlds. Equity part provides growth and the debt part provides stability in returns. Money Market / Liquid Schemes Aim to provide easy liquidity, preservation of capital and moderate income. These schemes generally invest in safer, short term instruments such as treasury bills, certificates of deposit, commercial paper and interbank call money. Returns on these schemes may fluctuate, depending upon the interest rates prevailing in the market.

Types of Mutual Funds BY OTHER Index Schemes Index schemes attempt to replicate the performance of a particular index such as the BSE Sensex or the NSE 50. The portfolio of these schemes will consist of only those stocks that constitute the index. The percentage of each stock to the total holding will be identical to the stocks index weight age. And hence, the returns from such schemes would be more or less equivalent to those of the Index. Equity mutual funds: These funds invest a maximum part of their corpus into equities holdings. The structure of the fund may vary different for different schemes and the fund managers outlook on different stocks. The Equity Funds are sub-classified depending upon their investment objective, as follows: Diversified Equity Funds Mid-Cap Funds Small Cap Funds Sector Specific Funds Tax Savings Funds (ELSS) Equity investments are meant for a longer time horizon, thus Equity funds rank high on the risk-return matrix. Debt mutual funds: The objective of these Funds is to invest in debt papers. Government authorities, private companies, banks and financial institutions are some of the major issuers of debt papers. By investing in debt instruments, these funds ensure low risk and provide stable income to the investors. Debt funds are further classified as: Gilt Funds Income Funds MIPs Short Term Plans Liquid Funds Tax Saving Schemes (Equity Linked Saving Scheme - ELSS) These schemes offer tax incentives to the investors under tax laws as prescribed from time to time and promote long term investments in equities through Mutual Funds.Eligible for deduction under section 80C. Lock in period three years.

Special Schemes
This category includes index schemes that attempt to replicate the performance of a particular index such as the BSE Sensex, the NSE 50 (NIFTY) or sector specific schemes which invest in specific sectors such as Technology, Infrastructure, Banking, Pharma etc. Besides, there are also schemes which invest exclusively in certain segments of the capital market, such as Large Caps, Mid Caps, Small Caps, Micro Caps, 'A' group shares, shares issued through Initial Public Offerings (IPOs), etc.

CHAPTER: 2 Company profile

http://www.scribd.com/doc/13246827/PROJECT-ON-MUTUAL-FUND-AKHILESH-MISHRA http://www.scribd.com/doc/51201879/2/HISTORY-OF-THE-INDIAN-MUTUAL-FUND-INDUSTRY

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