customer preferance towards MF
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INTRODUCTION
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MUTUAL FUND:
An Introduction
A Mutual Fund is a body corporate that pools the savings of a number of investors and
invests the same in a variety of different financial instruments, or securities. The income
earned through these investments and the capital appreciation realized by the scheme is
shared by its unit holders in proportion to the number of units owned by them. Mutual funds
can thus be considered as financial intermediaries in the investment business that collect
funds from the public and invest on behalf of the investors. The losses and gains accrue to
the investors only. The Investment objectives outlined by a Mutual Fund in its prospectus are
binding on the Mutual Fund scheme. The investment objectives specify the class of securities
a Mutual Fund can invest in. Mutual Funds invest in various asset classes like equity, bonds,
debentures, commercial paper and government securities
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Working of Mutual Funds
A mutual fund is a common pool of money in to which investors with common investment
objective place their contributions that are to be invested in accordance with the stated
investment objective of the scheme. The investment manager would invest the money
collected from the investor in to assets that are defined/ permitted by the stated objective of
the scheme. For example, an equity fund would invest equity and equity related instruments
and a debt fund would invest in bonds, debentures, gilts etc.
A mutual fund is set up by a sponsor. However, the sponsor cannot run the fund directly. He
has to set up two arms: a trust and Asset Management Company. The trust is expected to
assure fair business practice, while the AMC manages the money. All mutual funds except
UTI function under SEBI (Mutual Fund) regulations 1996.
The mutual fund collects money directly or through brokers from investors. The money is
invested in various instruments depending on the objective of the scheme. The income
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generated by selling securities or capital appreciation of these securities is passed on to the
investors in proportion to their investment in the scheme. The investments are divided into
units and the value of the units will be reflected in Net Asset Value or NAV of the unit. NAV
is the market value of the assets of the scheme minus its liabilities. The per unit NAV is the
net asset value of the scheme divided by the number of units outstanding on the valuation
date. Mutual fund companies provide daily net asset value of their schemes to their investors.
NAV is important, as it will determine the price at which you buy or redeem the units of a
scheme. Depending on the load structure of the scheme, you have to pay entry or exit load.
Mutual Fund Business Structure
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The structure consists of Sponsor
Sponsor is the person who acting alone or in combination with another body corporate
establishes a mutual fund. Sponsor must contribute atleast 40% of the networth of the
Investment Managed and meet the eligibility criteria prescribed under the Securities and
Exchange Board of India (Mutual Funds) Regulations, 1996.The Sponsor is not responsible
or liable for any loss or shortfall resulting from the operation of the Schemes beyond the
initial contribution made by it towards setting up of the Mutual Fund.
Trust
The Mutual Fund is constituted as a trust in accordance with the provisions of the Indian
Trusts Act, 1882 by the Sponsor. The trust deed is registered under the Indian Registration
Act, 1908.
Trustee
Trustee is usually a company (corporate body) or a Board of Trustees (body of individuals).
The main responsibility of the Trustee is to safeguard the interest of the unit holders and inter
alia ensure that the AMC functions in the interest of investors and in accordance with the
Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, the provisions of
the Trust Deed and the Offer Documents of the respective Schemes. Atleast 2/3rd directors
of the Trustee are independent directors who are not associated with the Sponsor in any
manner.
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Asset Management Company (AMC)
The AMC is appointed by the Trustee as the Investment Manager of the Mutual Fund. The
AMC is required to be approved by the Securities and Exchange Board of India (SEBI) to act
as an asset management company of the Mutual Fund. At least 50% of the directors of the
AMC are independent directors who are not associated with the Sponsor in any manner. The
AMC must have a net worth of at least 10 crore at all times.
Registrar and Transfer Agent
The AMC if so authorised by the Trust Deed appoints the Registrar and Transfer Agent to
the Mutual Fund. The Registrar processes the application form, redemption requests and
dispatches account statements to the unit holders. The Registrar and Transfer agent also
handles communications with investors and updates investor records.
Today, there are over 8,000 different mutual funds versus over 1,000 different mutual funds
in 1985. The number of funds today is more than five times the number in 1985, but even
more astounding is that dollars invested in mutual funds today are 15 times the value of
mutual funds at the end of 1985. The increase in the number of mutual funds and the amount
of dollars invested in mutual funds have been brought about by changes in retirement
planning and changes in corporate America
Mutual Funds Regulatory Framework
The Association of Mutual Funds In India (AMFI) reassures the investors in units of mutual
funds that the mutual funds function within the strict regulatory framework. The different
entities such as the Mutual Fund, the Asset Management Company and the Custodian operate
as per the provisions of the SEBI Mutual Fund Regulation 1996 and the rules and guidelines
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issued by SEBI. Each of these entities has independent Boards of Directors and separate
auditors.
SEBI keeps a close watch on the mutual funds through periodical reports and every three
months, each mutual fund submits to SEBI a report conforming compliance with regulatory
provisions and mutual funds are required to record their investment decisions. Any
deficiency or non-compliance is dealt with suitably by SEBI. Every year, each mutual fund is
inspected by SEBI and such inspection is both a detailed scrutiny of operations and a
rectification exercise. Thus, the mutual funds are strictly supervised and regulated entities
and the regulatory provisions match with international standards. AMFI also is engaged in
upgrading professional standards and in promoting best industry practices in diverse areas
such as valuation, disclosure, transparency etc.
Types of Mutual Fund Schemes
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Schemes can be classified by way of their stated investment objective such as Growth
Fund, Balanced Fund, Income Fund etc.
Equity Oriented Schemes
These schemes, also commonly called Growth Schemes, seek to invest a majority of
their funds in equities and a small portion in money market instruments. Such schemes have
the potential to deliver superior returns over the long term. However, because they invest in
equities, these schemes are exposed to fluctuations in value especially in the short term.
Equity schemes are hence not suitable for investors seeking regular income or
needing to use their investments in the short-term. They are ideal for investors who have a
long-term investment horizon. The NAV prices of equity fund fluctuates with market value
of the underlying stock which are influenced by external factors such as social, political as
well as economic.
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General Purpose
The investment objectives of general-purpose equity schemes do not restrict them to
invest in specific industries or sectors. They thus have a diversified portfolio of companies
across a large spectrum of industries. While they are exposed to equity price risks, diversified
general-purpose equity funds seek to reduce the sector or stock specific risks through
diversification. They mainly have market risk exposure
Sector Specific
These schemes restrict their investing to one or more pre-defined sectors, e.g.
technology sector. Since they depend upon the performance of select sectors only, these
schemes are inherently more risky than general-purpose schemes. They are suited for
informed investors who wish to take a view and risk on the concerned sector.
Special Schemes
Index schemes
The primary purpose of an Index is to serve as a measure of the performance of the
market as a whole, or a specific sector of the market. An Index also serves as a relevant
benchmark to evaluate the performance of mutual funds. Some investors are interested in
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investing in the market in general rather than investing in any specific fund. Such investors
are happy to receive the returns posted by the markets. As it is not practical to invest in each
and every stock in the market in proportion to its size, these investors are comfortable
investing in a fund that they believe is a good representative of the entire market. Index
Funds are launched and managed for such investors.
Tax saving schemes
Investors (individuals and Hindu Undivided Families (HUFs)) are being encouraged
to invest in equity markets through Equity Linked Savings Scheme (ELSS) by offering
them a tax rebate. Units purchased cannot be assigned / transferred/ pledged / redeemed /
switched out until completion of 3 years from the date of allotment of the respective Units.
The Scheme is subject to Securities & Exchange Board of India (Mutual Funds) Regulations,
1996 and the notifications issued by the Ministry of Finance (Department of Economic
Affairs), Government of India regarding ELSS. Subject to such conditions and limitations, as
prescribed under Section 88 of the Income-tax Act, 1961, subscriptions to the Units not
exceeding Rs.10, 000 would be eligible to a deduction, from income tax, of an amount equal
to 20% of the amount subscribed.
Real Estate Funds
Specialized real estate funds would invest in real estates directly, or may fund real
estate developers or lend to them directly or buy shares of housing finance companies or may
even buy their securitized assets.
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Debt Based Schemes
These schemes, also commonly called Income Schemes, invest in debt securities such
as corporate bonds, debentures and government securities. The prices of these schemes tend
to be more stable compared with equity schemes and most of the returns to the investors are
generated through dividends or steady capital appreciation. These schemes are ideal for
conservative investors or those not in a position to take higher equity risks, such as retired
individuals. However, as compared to the money market schemes they do have a higher price
fluctuation risk and compared to a Gilt fund they have a higher credit risk.
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Income Schemes
These schemes invest in money markets, bonds and debentures of corporate with
medium and long-term maturities. These schemes primarily target current income instead of
capital appreciation. They therefore distribute a substantial part of their distributable surplus
to the investor by way of dividend distribution. Such schemes usually declare quarterly
dividends and are suitable for conservative investors who have medium to long term
investment horizon and are looking for regular income through dividend or steady capital
appreciation.
Liquid Income Schemes
These schemes are similar to the Income scheme but with a shorter maturity.
Money Market Schemes
These schemes invest in short term instruments such as commercial paper (CP),
certificates of deposit (CD), treasury bills (T-Bill) and overnight money (Call). The schemes
are the least volatile of all the types of schemes because of their investments in money
market instrument with short-term maturities. These schemes have become popular with
institutional investors and high net worth individuals having short-term surplus funds.
Gilt Funds
This scheme primarily invests in Government Debt. Hence the investor usually does
not have to worry about credit risk since Government Debt is generally credit risk free.
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Hybrid Schemes
These schemes are commonly known as balanced schemes. These schemes invest in
both equities as well as debt. By investing in a mix of this nature, balanced schemes seek to
attain the objective of income and moderate capital appreciation and are ideal for investors
with a conservative, long-term orientation. HDFC Balanced Fund and HDFC Childrens Gift
Fund are examples of hybrid schemes.
According to Constitution of Mutual Fund
Schemes can be classified as Closed-ended or Open-ended depending upon whether
they give the investor the option to redeem at any time (open-ended) or whether the investor
has to wait till maturity of the scheme.
Open ended Schemes
The units offered by these schemes are available for sale and repurchase on any
business day at NAV based prices. Hence, the unit capital of the schemes keeps changing
each day. Such schemes thus offer very high liquidity to investors and are becoming
increasingly popular in India. Please note that an open-ended fund is NOT obliged to keep
selling/issuing new units at all times, and may s issuing further subscription to new
investors. On the other hand, an open-ended fund rarely denies to its investor the facility to
redeem existing units.
Closed ended Schemes
The unit capital of a close-ended product is fixed as it makes a one-time sale of fixed
number of units. These schemes are launched with an initial public offer (IPO) with a stated
maturity period after which the units are fully redeemed at NAV linked prices. In the interim,
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investors can buy or sell units on the stock exchanges where they are listed. Unlike open-
ended schemes, the unit capital in closed-ended schemes usually remains unchanged. After
an initial closed period, the scheme may offer direct repurchase facility to the investors.
Closed-ended schemes are usually more illiquid as compared to open-ended schemes and
hence trade at a discount to the NAV. This discount tends towards the NAV closer to the
maturity date of the scheme.
Interval Schemes
These schemes combine the features of open-ended and closed-ended schemes. They
may be traded on the stock exchange or may be open for sale or redemption during pre-
determined intervals at NAV based prices.
Benefits of Mutual Funds
There are numerous benefits of investing in mutual funds and one of the key reasons
for its phenomenal success in the developed markets like US and UK is the range of benefits
they offer, which are unmatched by most other investment avenues. We have explained the
key benefits in this section. The benefits have been broadly split into universal benefits,
applicable to all schemes and benefits applicable specifically to open-ended schemes
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Affordability
A mutual fund invests in a portfolio of assets, i.e. bonds, shares, etc. depending upon
the investment objective of the scheme. An investor can buy in to a portfolio of equities,
which would otherwise be extremely expensive. Each unit holder thus gets an exposure to
such portfolios with an investment as modest as Rs.500/-. This amount today would get you
less than quarter of an Infosys share! Thus it would be affordable for an investor to build a
portfolio of investments through a mutual fund rather than investing directly in the stock
market.
Diversification
The nuclear weapon in your arsenal for your fight against Risk It simply means that
you must spread your investment across different securities (stocks, bonds, money market
instruments, real estate, fixed deposits etc.) and different sectors (auto, textile, information
technology etc.). This kind of a diversification may add to the stability of your returns, for
example during one period of time equities might under perform but bonds and money
market instruments might do well enough to offset the effect of a slump in the equity
markets. Similarly the information technology sector might be faring poorly but the auto and
textile sectors might do well and may protect your principal investment as well as help you
meet your return objectives.
Variety
Mutual funds offer a tremendous variety of schemes. This variety is beneficial in two
ways: first, it offers different types of schemes to investors with different needs and risk
appetites; secondly, it offers an opportunity to an investor to invest sums across a variety of
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schemes, both debt and equity. For example, an investor can invest his money in a Growth
Fund (equity scheme) and Income Fund (debt scheme) depending on his risk appetite and
thus create a balanced portfolio easily or simply just buy a Balanced Scheme.
Professional Management
Qualified investment professionals who seek to maximize returns and minimize risk monitor
investor's money. When you buy in to a mutual fund, you are handing your money to an
investment professional that has experience in making investment decisions. It is the Fund
Manager's job to (a) find the best securities for the fund, given the fund's stated investment
objectives; and (b) keep track of investments and changes in market conditions and adjust the
mix of the portfolio, as and when required.
Tax Benefits
Any income distributed after March 31, 2002 will be subject to tax in the assessment
of all Unit holders. However, as a measure of concession to Unit holders of open-ended
equity-oriented funds, income distributions for the year ending March 31, 2003, will be taxed
at a concession rate of 10.5%. In case of Individuals and Hindu Undivided Families a
deduction up to Rs. 9,000 from the Total Income will be admissible in respect of income
from investments specified in Section 80L, including income from Units of the Mutual Fund.
Units of the schemes are not subject to Wealth-Tax and Gift-Tax.
Regulations
Securities Exchange Board of India (SEBI), the mutual funds regulator has clearly
defined rules, which govern mutual funds. These rules relate to the formation, administration
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and management of mutual funds and also prescribe disclosure and accounting requirements.
Such a high level of regulation seeks to protect the interest of investors.
Benefits of Specific type of Schemes:
Open-ended Schemes offer the following benefits
Liquidity
In open-ended mutual funds, you can redeem all or part of your units any time you wish.
Some schemes do have a lock-in period where an investor cannot return the units until the
completion of such a lock-in period.
Convenience
An investor can purchase or sell fund units directly from a fund, through a broker or a
financial planner. The investor may opt for a Systematic Investment Plan (SIP) or a
Systematic Withdrawal Advantage Plan (SWAP). In addition to this an investor receives
account statements and portfolios of the schemes.
Flexibility
Mutual Funds offering multiple schemes allow investors to switch easily between various
schemes. This flexibility gives the investor a convenient way to change the mix of his
portfolio over time.
Transparency
Open-ended mutual funds disclose their Net Asset Value (NAV) daily and the entire
portfolio monthly. This level of transparency, where the investor himself sees the underlying
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assets bought with his money, is unmatched by any other financial instrument. Thus the
investor is in the know of the quality of the portfolio and can invest further or redeem
depending on the kind of the portfolio that has been constructed by the investment manager.
Selecting a Mutual Fund
Selection parameters
Objective: The first point to note before investing in a fund is to find out whether your
objective matches with the scheme. It is necessary, as any conflict would directly affect your
prospective returns. For example, a scheme that invests heavily in mid-cap stocks is not
suited for a conservative equity investor. He should be better off in a scheme, which invests
mainly in blue chips. Similarly, you should pick schemes that meet your specific needs.
Examples: pension plans, childrens plans, sector-specific schemes, etc.
Your risk capacity and capability: this dictates the choice of schemes. Those with no risk
tolerance should go for debt schemes, as they are relatively safer. Aggressive investors can
go for equity investments. Investors that are even more aggressive can try schemes that
invest in specific industry or sectors.
Fund Managers and scheme track record: Since you are giving your hard earned money
to someone to manage it, it is imperative that he manages it well. It is also essential that the
fund house you choose has excellent track record. It also should be professional and maintain
high transparency in operations. Look at the performance of the scheme against relevant
market benchmarks and its competitors. Look at the performance of a longer period, as it will
give you how the scheme fared in different market conditions.
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Cost factor: Though the AMC fee is regulated, you should look at the expense ratio of the
fund before investing. This is because the money is deducted from your investments. A
higher entry load or exit load also will eat into your returns. A higher expense ratio can be
justified only by superlative returns. It is very crucial in a debt fund, as it will devour a few
percentages from your modest returns.
Purchasing mutual funds
Purchasing during IPO: Like companies, even mutual funds offer initial public offering. It
is when they launch the scheme for the first time. You can buy units at par on this occasion.
However, it is not always advantageous to buy a mutual fund during IPO. You can always
wait and see the performance before investing in it.
Purchasing existing mutual fund units: You can buy units of an open-end scheme anytime
at NAV-related price. Most mutual funds charge an entry load of up to 2%. That means you
have to pay an additional 2% of the NAV to get into the scheme. You can buy the plan
directly from the mutual fund or brokerage. You can even buy them via the Internet.
Selling mutual funds
You can sell or redeem units very easily. As per Sebi guidelines, a mutual fund unit holder
has the right to receive redemption or repurchase proceeds within 10 days of the redemption
or repurchase. Most funds do not charge an exit load these days.
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When should you sell a mutual fund unit is a crucial question. Ideally, you should sell it
when you have met your target profit. The other reason is that you need the money or your
profile has changed due to some changes in your life. Other than this, you should sell the
units if you find that the fund has been taken over by another fund, which you do not approve
of. Any major changes in the objective of the fund or a sharp rise in expenses could also be
valid reasons to redeem units. Following a favorite fund manager is also a usual practice.
However, it need not be always rewarding.
Income from mutual funds: The options
Mutual funds distribute their income as dividend. An investor has the option of receiving the
dividend or opting for the dividend reinvestment. If an investor needs the income, he can opt
for dividend payout option. However, if you do not need the money, he can opt for dividend
reinvestment. Another choice before him is the growth or cumulative option. Here the
income generated from sale of securities or capital appreciation is automatically reinvested.
Speedy investment, redemption and income receipts
Thanks to the Electronic Clearing Services (ECS), mutual fund investor now has the option
of automatic credit of dividends and redemptions into bank account. This will save a lot of
paperwork, for both you and the fund. You can also instruct your bank to automatically
withdraw a certain sum towards systematic investment plan. Alternatively, you can also
directly receive systematic withdrawal proceeds in your bank account
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Tracking mutual funds performance
Objective parameters: A mutual fund is valued daily and reports a price known as a net
asset value
Net Asset Value:
NAV or Net Asset Value of the fund is the cumulative market value of the assets of the fund
net of its liabilities. NAV per unit is simply the net value of assets divided by the number of
units outstanding. Buying and selling into funds is done on the basis of NAV-related prices.
NAV is calculated as follows:
Market value of the funds investments + Receivables + Accrued Income Liabilities
Accrued Expenses
NAV= _________________________________________________________________
Number of Outstanding units
Method of NAV Declaration
The NAV of a scheme has to be declared at least once a week. However many Mutual Fund
declare NAV for their schemes on a daily basis. As per SEBI Regulations, the NAV of a
scheme shall be calculated and published at least in two daily newspapers at intervals not
exceeding one week. However, NAV of a close-ended scheme targeted to a specific segment
or any monthly income schemes (which are not mandatory required to be listed on a stock
exchange) may be published at monthly or quarterly intervals.
The NAV of the scheme will reflect the performance of the scheme. The fund will also give
you returns for various periods such as one month, three months, six months, one year, three
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years, since inception, etc. This will give you an idea about the performance of the fund.
Funds also provide comparison with relevant benchmarks. This should tell you whether the
fund manager has performed better than the benchmark. However, financial experts believe
that these returns do not give the complete picture. They believe that the return should be
risk-adjusted. Various publications and Internet sites provide such returns. The computation
is complicated and they use various formulas for this purpose.
Subjective parameters
The performance alone does not make a fund house a winner. Equally important is the
service standards and transparency in actions. It is also essential that the fund offer speedy
solutions to grievances of investors. The reputation of the fund house among its investors and
public at large indicates how well the fund scores on this front.
Information sources
Every financial daily offers daily NAV of all mutual fund schemes. Magazines also come out
with annual survey of mutual funds. There are even magazines dedicated entirely towards
mutual fund industry. Internet is also a great place for information. There are dedicated sites
as well as financial sites, which offer information on mutual funds. Association of Mutual
Funds of India (AMFI) home page is also a great place for information.
Resolving grievances
Mutual funds are regulated by Sebi (mutual fund) regulation 1996. Therefore, an investor
always has the recourse to approach the watchdog. Various investor forums also take up the
case of individual investors. You can also turn to judiciary as a last resort
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BANKS V/S MUTUAL FUNDS: A brief comparison
PARAMETERS BANKS MUTUAL FUNDS
Returns Low Better
Administrative exp. High Low
Risk Low Moderate
Investment options Less More
Network High penetration Low but improving
Liquidity At a cost Better
Quality of assets Not transparent Transparent
Interest calculationMinimum balance between 10th.
& 30th. Of every monthEveryday
Guarantee Maximum Rs.1 lakh on deposits None
SCOPES AND IMPORTANCE
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Scopes
The scope of the topic is very wide but here we are basically concerned with.
Satisfaction level of customers towards various mutual funds.
Market share of different mutual funds.
Preference of customers towards various mutual funds.
Risk bearing capacity of customers.
Factors affecting investors while selecting mutual funds.
Importance
It can help mutual fund companies to identify their market share.
It can provide the framework for designing NFO according to preference of investors.
To identify factors affecting mutual fund investment decisions
To identify comparative position of mutual fund companies
To help the investors to communicate their problems & suggestions to mutual fund
companies
OBJECTIVES OF THE STUDY
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1. Market position of mutual fund companies and customer preference towards
companies offerings.
2. Comparison of various mutual fund companies on the basis of customer perspective
3. Understand the investment opportunities and strategy of various mutual fund schemes
4. To Study and understand Mutual fund industry in India.
5. To study the working and performance of various Asset Management Company.
6. Overall perception of investors about mutual funds.
7. Acceptance of mutual funds in India & its scope in future
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INDUSTRY PROFILE
INDUSTRY PROFILE
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was made possible through the collective efforts of the Government of India and the Reserve
Bank of India. The history of mutual fund industry in India can be better understood divided
into following phases:
Phase 1. Establishment and Growth of Unit Trust of India - 1964-87
Unit Trust of India enjoyed complete monopoly when it was established in the year 1963 by
an act of Parliament. UTI was set up by the Reserve Bank of India and it continued to operate
under the regulatory control of the RBI until the two were de-linked in 1978 and the entire
control was transferred in the hands of Industrial Development Bank of India (IDBI). UTI
launched its first scheme in 1964, named as Unit Scheme 1964 (US-64), which attracted the
largest number of investors in any single investment scheme over the years.
UTI launched more innovative schemes in 1970s and 80s to suit the needs of different
investors. It launched ULIP in 1971, six more schemes between 1981-84, Children's Gift
Growth Fund and India Fund (India's first offshore fund) in 1986, Master share (Indias first
equity diversified scheme) in 1987 and Monthly Income Schemes (offering assured returns)
during 1990s. By the end of 1987, UTI's assets under management grew ten times to Rs 6700
crores.
Phase II. Entry of Public Sector Funds - 1987-1993
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The Indian mutual fund industry witnessed a number of public sector players entering the
market in the year 1987. In November 1987, SBI Mutual Fund from the State Bank of India
became the first non-UTI mutual fund in India. SBI Mutual Fund was later followed by Can
bank Mutual Fund, LIC Mutual Fund, Indian Bank Mutual Fund, Bank of India Mutual
Fund, GIC Mutual Fund and PNB Mutual Fund. By 1993, the assets under management of
the industry increased seven times to Rs. 47,004 crores. However, UTI remained to be the
leader with about 80% market share.
1992-93
Amou
nt
Mobili
sed
Assets
Under
Manageme
nt
Mobilisation as
% of gross
Domestic Savings
UTI 11,057 38,247 5.2%
Public Sector 1,964 8,757 0.9%
Total 13,021 47,004 6.1%
Phase III. Emergence of Private Sector Funds - 1993-96
The permission given to private sector funds including foreign fund management companies
(most of them entering through joint ventures with Indian promoters) to enter the mutual
fund industry in 1993, provided a wide range of choice to investors and more competition in
the industry. Private funds introduced innovative products, investment techniques and
investor-servicing technology. By 1994-95, about 11 private sector funds had launched their
schemes.
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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.
Investors' 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 Programmers 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 mutual fund players on the same level. UTI was re-organized 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)
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FROM TO
U
T
I
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31-March-99 53,3208,29
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72Phase 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 mutual 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.
Asset Management Company
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An Asset Management Company (AMC) is a highly regulated organization that pools money
from investors and invests the same in a portfolio. They charge a small management fee,
which is normally 1.5 per cent of the total funds managed.
Mutual Fund Companies
Birla Sun Life Mutual Fund
A joint venture between Sun Life Assurance Company, the Canada-based financial service
organization and the Indian industrial house of Aditya Birla, this AMC was launched in the
mid-90 s. Both the partners are well known in all areas that they operate in. While Aditya
Birla is a household name in India and has renowned brands in businesses spread across
industries as wide ranging as Aluminum (Hindalco), Textiles (Grasim), Fertilizers (Indo-
Gulf), Finance (Birla Global Finance Ltd.) and Rayon (India Rayon), Sun Life is a leading
financial service organization in North America. Sun Life provides services related to risk
management, money management and wealth management across globe. Having established
itself at Toronto in 1871, it has now spread its wings across Asia Pacific, U.S.A. and U.K. It
also has a significant presence through MFS Investment Management in U.S. and Spectrum
United Mutual Funds in Canada. The major strengths of the group are its expertise drawn
from managing assets over the globe, a big agent network and an ability to cater to the need
of people. Drawing on the expertise of a worldwide staff of over 10,000 people and a
network of more than 65,000 agents and distributors, Sun Life is committed to providing not
just products and services, but solutions for clients financial and risk management needs.
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Birla Sunlife Mutual Fund is one of India's leading mutual funds with assets of over
Rs.17,098 crore under management as of Aug 2006. Birla Sun Life Asset Management
Company Limited, the investment manager of Birla Sunlife Mutual Fund, is a joint venture
between the Aditya Birla Group and Sun Life Financial Services, leading international
financial services organization. Established in 1994, Birla Sunlife AMC provides investors a
range of 18 investment options, which include diversified and sector specific equity schemes,
a wide range of debt and treasury products, and two offshore funds. Both the sponsors have
equal stakes in the AMC.
In recognition to its high quality investment products, Birla Sun Life AMC became India's
first asset management company to be awarded the coveted ISO 9001:2000 certification by
DNV Netherlands. Here is a list of mutual funds of Birla Sunlife which includes Equity, Debt
Schemes, Hybrid Schemes and Offshore Schemes.
DSP Merrill Lynch Fund Managers
DSP Merrill Lynch Asset Management (India) Ltd., has been set up by DSPML and MLAM,
to act as the Asset Management Company (AMC) to the Fund. The AMC has been appointed
as the Investment Manager to the fund, MLAM holds 40% of the paid up share capital of the
AMC, while the balance 60% (approximately), is held by DSPML. DSP Merrill Lynch,
originally called DSP Financial Consultants Ltd., traces its origins to DS Purbhoodas & Co.,
a securities and brokerage firm with over 130 years of experience in the Indian market. After
a decade long association, DSP Merrill Lynch & Co. Inc. took up a 40% stake in DSPFC and
the name was changed to DSPML Ltd. DSPML is a full fledged financial services
organization with a broad employee base and offices in Mumbai, New Delhi, Calcutta,
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Chennai, Bangalore, Hyderabad and Cochin. MLAM is a unit of Merrill Lynch Asset
Management Group, the money management arm of ML & Co. It is based in Princeton, N.J.,
USA and offers a wide range of investment products in virtually all U.S. domestic and
international asset classes and in major capital markets of the world. Merrill Lynch
Investment Managers investment philosophy is designed to seek consistent, long-term
strategic performance results. Its disciplined value oriented approach to managing its clients
portfolios has been with the primary objective of seeking consistent returns over a long
period. The name of DSP Merrill Lynch Asset Management (India) Ltd. has been changed to
DSP Merrill Lynch Investment Managers Ltd. w.e.f 20th July, 2000
DSP Merrill Lynch mutual fund is one of the top-notch mutual funds in India with assets of
over Rs.10,980 crore under its management as of Aug 2006. The sponsor of the fund is DSP
Merrill Lynch Limited, one of India's largest investment bankers.
DSP Merrill Lynch is a joint venture between securities and brokerage firm D. S. Purbhoodas
& CO. and investment bank Merrill Lynch. Merrill Lynch is one of the world's leading
wealth management, capital markets and advisory companies, with offices in 36 countries
and total client assets of approximately $1.8 trillion. Merrill Lynch holds 40 per cent stake in
the joint venture.
DSP Merrill Lynch Fund Managers, a subsidiary of DSP Merrill Lynch, is the investment
manager to DSP Merrill Lynch Mutual Fund. The AMC has Hemendra Kothari, David
Graham of Merrill Lynch, Omkar Goswami and Piyush Mankad, former union finance
secretary among its directors. The fund management team is headed by S Naganath, chief
investment officer.
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entered into an agreement with ZIC to acquire the asset management business. Consequently,
all the schemes of Zurich Mutual Fund in India had been transferred to HDFC Mutual Fund
And renamed as HDFC schemes.
Prudential ICICI Mutual Fund
Prudential ICICI Asset Management Company Limited is an investment management
company and a 55:45 joint venture between Prudential Corporation plc, UK, and ICICI Ltd.,
India. Both companies are financial giants, and each is a major player in its field. Prudential
Corporation plc, UK was incorporated in 1848, as a provider of insurance products. Through
its investments, it controls approximately 4% of all the listed shares on the second largest
stock exchange in the world, the London Stock Exchange, making it one of the largest
institutional investors in the UK. ICICI Ltd. was established in 1955 by the World Bank, the
Government of India and representatives of Indian industry, to promote the industrial
development of India by providing project and corporate finance to Indian industry.
Prudential ICICI Asset Management Company Limited has been incorporated with a capital
of Rs 65 crore. This investment - way above the stipulated norm of Rs 10 crore, represents a
strategic long-term commitment, on the part of both partners, to the rapidly expanding
financial services sector in India. In a short span of 14 months, Prudential ICICIs product
portfolio has grown from 2 closed ended funds to 8 open ended funds and 2 closed ended
funds.
Prudential ICICI Mutual Fund is the largest private sector mutual fund in India with assets of
over Rs.34,119 crore under management as of Aug 2006. The asset management company,
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Prudential ICICI Asset Management Company Limited, is a joint venture between Prudential
Plc, Europe's leading insurance company and ICICI Bank, India's premier financial
institution.
Prudential Plc holds 55 per cent of the asset management company and the balance by ICICI
Bank. In a span of just over six years, Prudential ICICI Asset Management Company has
emerged as one of the largest asset management companies in the country. The Company
manages a comprehensive range of schemes to meet the varying investment needs of its
investors spread across 68 cities in the country. The management is headed by Pankaj
Razdan, managing director and the fund management team is headed by Nilesh Shah, chief
investment officer.
.
SBI Mutual Fund
SBI Funds Management Ltd. is the investment manager of SBI Mutual Fund. SBI Mutual
Fund has been constituted as a trust, sponsored by State Bank India. Today the Fund has an
investor base of over 2.8 million spread over 23 schemes. With a large network of collecting
branches and investor service centers, SBI Mutual Fund constantly endeavors to get closer to
its growing family of investors. SBI is the largest public sector Bank in India with 8,836
branches all over India. SBI is the leader in providing loans to trade & industry. It also
provides related services, which generate significant fee-based income. It has also identified
project finance and consumer banking as key areas.
SBI Mutual Fund, India's largest bank sponsored mutual fund, is a joint venture between the
State Bank of India and Societe Generale Asset Management, one of the world's top-notch
fund management companies. Over the years, SBI Mutual Fund has carved a niche for itself
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through prudent investment decisions and consistent wealth creation. Since its inception, SBI
Funds Management Private Ltd. has launched thirty-two schemes and successfully redeemed
fifteen of them. Throughout this journey, SBI Mutual Fund has profusely rewarded the
20,00,000 investors who have reposed their faith in it. Today, the SBI fund boasts of an
expertise of managing assets over Rs. 13,000 crores and has a diverse profile of investors
actively parking their investments across 28 active schemes. A vast network of 82 collection
branches, 26 investor service centres, 21 investor service desks and 21 district organizers
helps the SBI Mutual Fund to reach out to their investors.
TATA Mutual Fund
Tata TD Waterhouse Asset Management Private Limited is a Joint Venture between Tata
group and Canadian Major TD Waterhouse. TD Waterhouse is known as one of the best
asset managers, managing assets over $ 100 Bn. Tata Asset Management is a part of the Tata
group. The Shareholders of TAM are Tata Sons Limited, Tata Investment Corporation
Limited and Tata Finance Limited. Tata Investment Corporation Ltd. (TICL) was promoted
by Tata Sons Limited (TSL) in 1937, with the main objective of being an investment
company. Tata Sons Limited (TSL) is the principal investment holding company of TATAs.
Through its operating consultancy divisions Tata Consultancy Services, Tata Consulting
Engineers, Tata Economic Consultancy Services and Tata Financial Services, it provides a
wide range of services in the areas of information technology, engineering, and financial
services.
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Tata mutual fund, set up in 1995, is one of the leading private sector funds in the country and
is promoted by the Tata group. The sponsors of the fund are Tata Sons Limited and Tata
Investment Corporation Limited.
Tata Asset Management Limited is the investment manager of the mutual fund and has F K
Karavana of Tata Sons as its chairman. The management of the AMC is headed by Ved
Prakash Chaturvedi, managing director. Tata Sons holds a majority stake in the AMC with
the balance being held by Tata Investment Corporation.
Tata Mutual Fund offers a wide range of investment products for institutional and individual
investors and as of August 31, 2006, has assets of Rs. 12562.65 crores under management.
Standard Chartered Mutual Fund
The fund was established on March 13, 2000. Now the management of the fund has been
taken over by Standard Chartered Bank, the UK based banking conglomerate. The name of
the AMC too has been changed from ANZ AMC. Previously sponsored by ANZ Banking
Group, Australia, this fund has just set up its operations in the year 2000. Australia and New
Zealand Banking Group Limited, the previous sponsor of the fund, is a leading international
bank and is also one of the "Big Four" Australian commercial banks providing a full range of
banking and financial services with total assets of US $ 97.35 billion as on 30th Sept, 1999.
ANZ Funds Management is a core business unit of the group and is one of Australia s large
fund managers. It has a full range of investment products and services managing more than
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AUD $ 13267.7 million in customer funds on 30th Sept., 1999. ANZ Banking Group has
significant presence in 35 nations from the Middle East through South Asia and East Asia to
the Pacific.
Standard Chartered mutual fund is promoted by banking giant Standard Chartered and
exclusively focuses on debt schemes. The fund started as ANZ Grindlays Mutual Fund and
was later renamed as Standard Chartered Mutual Fund after the takeover of Grindlays Bank
by Standard Chartered.
Standard Chartered Bank is a truly global bank with employees representing 80 nationalities.
The bank has a strong brand presence in India and is well entrenched in developing markets
of Asia Pacific region.
The sponsor of the fund is Standard Chartered Bank. The AMC of the fund is Standard
Chartered Asset Management Company Private Limited. The sponsor holds a 75 per cent
stake in the company and the balance is held by Atul Choksey of Apcotex. As of Aug 2006,
the fund has assets of over Rs.15,551 crore under management.
Escorts Mutual Fund
Escorts Mutual Fund is promoted by the business conglomerate Escorts group. Escorts Asset
Management Limited acts as the AMC to the mutual fund. Escorts Mutual Fund usually
offers open ended schemes and the fund category is Equity- balanced fund. The fund is a
member of the Escort Group of Companies, which deals with a number of high growth
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industries like construction and material handling equipment, farm machinery, two wheelers,
auto ancillary products and financial Services.
Balanced Fund, Growth Plan and Floating Rate Fund are some popular open ended plans of
Escorts Mutual Fund. Balanced Fund aims to generate long term capital appreciation and
current income from a well diversified portfolio of equity shares and fixed income securities.
Floats Rates objective is to make regular income through investment in a portfolio
comprising substantially of Floating Rate Debt Securities. Growth Plan generates capital
appreciation by investing mainly in a well diversified portfolio of equity shares with growth
potential.
Kotak Mutual Fund
Kotak Mahindra Asset Management Company Limited is a wholly owned subsidiary of
Kotak Mahindra Finance Ltd. Kotak Mahindra Finance Limited (KMFL) was set up in 1985
with a capital base of Rs. 3 million and a single product. From those beginnings, KMFL has
grown over the last decade into a highly diversified financial services company with a net
worth of over Rs. 3 billion and more than 250,000 share, debenture and fixed deposit holders.
The Group currently offers financial services of every kind, including loans, lease and hire
purchase, consumer finance, car finance, investment banking, stock broking and primary
market distribution of equity and debt products, business information services and more. The
Group has offices in 30 Indian cities as well as in Dubai, Mauritius and London. Kotak
Mahindra (UK) Ltd, a subsidiary of KMFL, is the first company owned from India to be
registered with the Securities and Futures Authority in London.
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Kotak Mahindra mutual fund is one of the leading mutual funds in the country with assets of
over Rs.12,530 crore under management as of Aug 2006. The fund is promoted by Kotak
Mahindra Bank, one of India's leading financial institutions that offer financial solutions
ranging from commercial banking, stock broking, life insurance and investment banking.
Kotak Mahindra Asset Management Company Limited, a wholly owned subsidiary of Kotak
Mahindra Bank, is the asset manager for Kotak Mahindra mutual fund. The company is
headed by Uday Kotak of Kotak Bank as chairman and the fund management function is
headed by Sandesh Kirkire, chief executive officer.
Kotak Mahindra mutual fund launched its schemes in December 1998 and today manages
assets of 4,34,504 investors in various schemes. Kotak Mahindra mutual fund was the first
fund house in the country to launch a dedicated gilt scheme investing only in government
securities.
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Principal PNB Mutual Fund
IDBI-PRINCIPAL Asset Management Company (IPAMCO) is the Asset Management
Company for the Fund. IPAMCO is a 50:50 joint venture between IDBI and Principal
Financial Services Inc., US and is registered under the Companies Act, 1956. Industrial
Development Bank of India (IDBI) was established by the Govt. of India under the IDBI Act.
As India s premier development financial institution and one of the largest development
banks in the world, IDBI has an asset base of over Rs. 72000 crores (US$ 16 billion) and a
net worth exceeding Rs. 9000 crores (US$ 2 billion). With a current investor base of around
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3.3 million customers, IDBI continues to play a major role in institution building by setting
up various specialized institutions to cater to the ever-changing needs of the Indian industry
and its capital markets.
The principal Group has operations outside United States in Asia, Europe and Latin America.
Established in 1879 and a member of the Fortune 500, The Principal Group is a leading
provider of a wide range of financial products and services to businesses and individuals
including retirement services and asset management, life and health insurance and mortgage
banking. In India, Principal Financial Group and its member companies have 11 Foreign
Institutional Investors licenses. One of the first FIIs to establish a relationship in the country -
BT Funds Management, is a member company of the Principal Financial Group and one of
the largest fund management companies in Asia.
The Board of Trustees of IDBI Mutual Fund has appointed IPAMCO as the Asset
Management Company (the AMC) for the Mutual Fund as per Securities and Exchange
Board of India (Mutual Funds) Regulations, 1993. An Investment Management Agreement
has been signed between the Trustees and the AMC on November 25, 1994 whereby the
AMC is empowered to manage the affairs of IDBI Mutual Fund and operate its schemes.
HSBC Mutual Fund
HSBC Asset Management (India) Private Limited is the Investment Manager to HSBC
Mutual Fund, set up locally by the HSBC Group. The business is working on ambitious plans
to position itself as one of the leading Private Sector Fund Managers in the Indian financial
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Fund Name
ABN Amro Mutual Fund
AIG Mutual Fund
Benchmark Mutual Funds
Birla Sun Life Mutual Fund
BOB Mutual Fund
Canara Robeco Mutual Fund
DBS Chola Mutual Fund
Deutsche Mutual Fund
DSP Merill Lynch Mutual Fund
Fidelity Mutual Fund
Franklin Templeton Mutual Fund
HDFC Mutual Fund
HSBC Mutual Fund
ICICI Prudential Mutual Fund
IDFC Mutual Fund
ING Mutual Fund
J P Morgan Mutual Fund
JM Financial Mutual Fund
LIC Mutual Fund
Lotus India Mutual Fund
Mirae Asset Mutual Fund
Morgan Stanley Mutual Fund
Principal PNB Mutual Fund
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Quantum Mutual Fund
Fairwealth Securities
Sahara Mutual Fund
SBI Mutual Fund
Sundaram BNP Paribas Mutual Fund
Tata Mutual Fund
Taurus Mutual Fund
UTI Mutual Fund
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COMPANY PROFILE
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Fair-wealth Securities Limited
Fair-wealth Securities Ltd. is a financial services company which has emerged as a
one-stop investment solutions provider. It was founded in 2005 by two visionary
entrepreneur brothers, Mr. Dhirender Gaba and Mr. Naveen Gaba, who possess expertise
in the field of Finance. The company is headquartered in New Delhi, and has its
Corporate office in Gurgaon.
Today Fairwealth Securities is a well established and dynamic broking house in India.
Known for it's state-of-the-art systems and innovative processes, Fair-wealth offers a single
window advantage for all capital and money market related activities to over 20000 clients
across 12 states through its network of over 200 branches.
Fair-wealth Securities is a professionally managed company, lead by a team with outstanding
managerial acumen. The company is supported by more than 200 professionals keeping an
eye on the intricate financial needs of its clients and caters to both their short term and long
term financial needs through a comprehensive bouquet of investment services.
Their services range from offline & online trading in equity, commodities, and
currency derivatives. Company is also soon planning to launch its Portfolio Management
Services.
The company has a sizable presence in the distribution of 3rd party financial products
like mutual funds, and insurance products. It also provides expert Advisory on Life
Insurance, General Insurance, Mutual Funds and IPOs. The distribution network is backed
by in-house back office support to provide prompt and efficient customer service.
Company has established and expanded its research wing through which we cater to need of
our Equity and Commodity clients. Their clients have been able to make sober investment
decisions and make profit from our advice.
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The Equity broking arm Fairwealth Securities Ltd offers personalized premium
services on the NSE, BSE & Derivatives market-Equity and Currency Markets.
The Commodity broking arm Fairwealth Commodities Broking Ltd offers services in
Commodity trading on NCDEX and MCX.
Company Promoters.
Mr. Dhirender Gaba, the main promoter/director of the Company is a Science Graduate
having almost 16 years of share market experience is actively associated with the Stock
market operations since 1991. His vision, focus and dedication have been the driving force
for the companys success.
Mr. Naveen Gaba another promoter of the Company is an Art Graduate and younger brother
of Mr. Dhirender Gaba, having almost 14 years of experience, joined the business as a
Director ofFairwealth Securities Ltd. to take charge of the entire marketing and customer
support division of the company.
COMPANY OFFERINGS
Equity and Derivatives Broking (Retail and Institutional)
Commodities Broking
Currency Derivatives Broking
IBT - Online Internet Based Trading
Equity Research
Commodities Research
Depository Services
Portfolio Management Services
Mutual Fund Distribution
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Insurance Broking
IPO
Wealth Management (Coming Soon)
Vision
In our Endeavour to serve more customers across geographies Fairwealth Securities Ltd
plans to be a leading stock and commodity broker and a distribution proving a bouquet of
services. We want to be known to our customers for our excellent customer service, our
research advice and putting our clients priority at the top.
Mission:
We aim to provide wealth maximization solution for our clients and guide our clients in
talking sober investment decisions.
Broking with Human touch
State of the art IT infrastructure, choice of connectivity available
Quality Research Empowering the client
Decentralized operations
1. Equity Trading
The best way to amass wealth is by investing in the stock market. However, it can be a risky
proposition considering the high risk-return trade off prevalent in the stock market. Therefore
before investing, the clients should know how to go about it. By opening an account with
Fair-Wealth, an investor can avail additional benefits like access to various intraday and
fundamental calls.
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2. Commodity Broking
Investment in commodities is advisable in the portfolio, as it is generally considered as
defensive because stocks and bonds witnesses adverse performance during times of inflation.
We offer our advisory services with enhanced research and knowledge aims to capitalize the
immense potential of the commodities market
3. Derivatives Trading
They, at Fair-Wealth Securities, have endeavored to make trading in derivatives simpler.
They strive to educate new entrants in the derivatives trading market so that they are more
equipped with knowledge and techniques.
4. Portfolio Management Services
Company Portfolio Management Service is well suited for high-net worth customers who
want to invest in Indian Equities and desire to create wealth over longer period After
understanding varied risk appetites and financial goals of individuals Fair-Wealth has created
an Investment Strategy called Wealth- MAX Strategy
5. Research
Fair-Wealth carries out extensive research in equity and commodity
Equity Research: They have a dedicated research team which is engaged in analyzing the
Indian economy and corporate sectors to identify multi-bagger stocks. They provide Weekly
Techno Funda Calls based on the weekly outlook. The team also provides positional and
medium term calls. Their technical team provides various intraday, BTST and Weekly Calls
based on their analysis. It also comes out with a report called Market Pulse on a daily basis.
Daily Market Outlook which is a daily newsletter is well-known among the industry. Besides
this, they are also into Derivative research which covers Call-Put Strategy and Covered Call
strategy.
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Commodity Research: The commodity research team enables the investors to tap
appropriate opportunities in the commodity market.
6 .Risk Management through Life and General Insurance
They have a sizable presence in the distribution of 3rd party financial products like Life
Insurance and General Insurance Products. They provide expert Advisory on Life
Insurance and General Insurance. The distribution network is backed by in-house back
office support to provide prompt and efficient customer service.
7. Depository Participant
Fair-wealth Securities Limited is a depository participant with the Central Depository
Services (India) Limited for trading and settlement of dematerialized shares. The
company as a depository participant offers De-materialization, Re-materialization,
Pledge & transfer of shares. SMS Alert Facility for debits and IPO credits in demat
account are also available. They ensure safe and secure custody of the customers account
as every debit instruction is executed after authentication for the same is established.
They offer depository accounts to individual investors as well as corporate houses
which enable them to trade in the dematerialized environments.
8. Back Office
Fairwealth provides online back-office services to its clients for transparency of their
statements and provides the link to view the details of the account online. The account
statement that are available includes Financial Ledger, Net Position for the day etc.
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Management of the company
Mr. Dhirendra Gaba
Managing Director
Mr. Dhirendra Gaba, Founder and Managing director, could forsee the opportunities offered
by the stock market and thus FairWealth Securities was evolved in 2005. Mr Gaba, a law
graduate, has a vast experience of 15 years in the stock market. He has been actively
associated with the stock markets operations since 1995.
He is a reputed and well-known personality in the financial services domain
Mr. Naveen Gaba
Director- Sales & Marketing
Mr. Naveen Gaba, co-promoter of the Company, is an Art Graduate. He has a wide
experience of 15 years. He joined the business as a Director of FairWealth and took charge of
the entire marketing and customer support division of the company.
Under his dynamic leadership and experience, FairWealth has opened 40 branches all over
India.
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Mr.Rahul Yadav
Director-Operations
Mr. Rahul Yadav, COO and Director with FairWealth, brings with him a diverse experience
of over a decade. Mr. Yadav, an MBA (Finance) by qualification, has been associated with
FairWealth since its inception and has played a vital role in the organizations success.
Mr. Rajesh Gupta
Chief Investment Officer
Mr. Rajesh Gupta is credited for the acclaimed Research Capabilities at FairWealth. He
possesses expertise in equity research.
He has managed to identify numerous multi-baggers in the past decade, notable being
Hyderabad Industries, Shree cement, Banco Products, Jindal Saw and JSPL.
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Mr. Surendra Mehta
Executive Director-Business Development
Mr. Surendra Mehta is the Executive Director of Fairwealth Securities Limited. He has been
associated with the company since inception. Mr Mehta, a Commerce Graduate and a
Qualified Accountant From UK is a professional with over 20+ years of experience in the
field of Stock Markets.
National -Commodity Head
Mr. Prakash Thakkar is the National Head for commodities at Fair Wealth. He has a
successful track of over two decades in the financial services industry.
He has worked with some of the leading broking houses of India and has expertise in
Physical Agri Commodities and Commodities Future Market. He has identified major
opportunities in the commodities market.
He gave a new dimension to the research function at Fair Wealth by initiating commodity
research.
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Mr. Prakash Thakkar
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PRODUCT PROFILE
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understanding varied risk appetites and financial goals of individuals Fair-Wealth has created
an Investment Strategy called Wealth- MAX Strategy
5. Research
Fair-Wealth carries out extensive research in equity and commodity
Equity Research: They have a dedicated research team which is engaged in analyzing the
Indian economy and corporate sectors to identify multi-bagger stocks. They provide Weekly
Techno Funda Calls based on the weekly outlook. The team also provides positional and
medium term calls. Their technical team provides various intraday, BTST and Weekly Calls
based on their analysis. It also comes out with a report called Market Pulse on a daily basis.
Daily Market Outlook which is a daily newsletter is well-known among the industry. Besides
this, they are also into Derivative research which covers Call-Put Strategy and Covered Call
strategy.
Commodity Research: The commodity research team enables the investors to tap
appropriate opportunities in the commodity market.
6. Risk Management through Life and General Insurance
They have a sizable presence in the distribution of 3rd party financial products like Life
Insurance and General Insurance Products. They provide expert Advisory on Life Insurance
and General Insurance. The distribution network is backed by in-house back office support to
provide prompt and efficient customer service.
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7. Depository Participant
Fair-wealth Securities Limited is a depository participant with the Central Depository
Services (India) Limited for trading and settlement of dematerialized shares. The
company as a depository participant offers De-materialization, Re-materialization,
Pledge & transfer of shares. SMS Alert Facility for debits and IPO credits in demat
account are also available. They ensure safe and secure custody of the customers account
as every debit instruction is executed after authentication for the same is established.
They offer depository accounts to individual investors as well as corporate houses
which enable them to trade in the dematerialized environments.
8. Back Office
Fair-wealth provides online back-office services to its clients for transparency of their
statements and provides the link to view the details of the account online. The account
statement that are available includes Financial Ledger, Net Position for the day etc.
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RESEARCH METHODOLOGY
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RESEARCH METHODOLOGY
Introduction to the Problem:
To classify the investors on their risk and return profile.
To find out the awareness of mutual funds among investors.
To find out the expected rate of return of the investors.
Research Design
Research design is simply the framework or plan for a study, used as a guide in collecting
and analyzing data. There are three types of Research Design:-
Exploratory Research Design:- The major emphasis in exploratory
Research design is on discovery of ideas and insights.
Descriptive Research Design:- The Descriptive Research Design
Study is typically concerned with determining the frequency with which something occurs or
the relationship between two variables.
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Casual Research Design:- A Casual Research Design is concerned
with determining cause and effect relationship.
For the study, exploratory Research Design was undertaken to classify the investors on their
risk and return profile.
Sampling Design
(a) Population:
Element: Businessmen and Servicemen in Moradabad city
Extent: Fairwealth Securities, Moradabad.
Time: 15th May to 30th June
(b)Sampling Unit: -Businessmen and Servicemen in Moradabad city
(d) Sample Size:- 100
(e) Sampling Method:-
There are two methods of sampling:-
1. Probability Sampling: It is based on the concept of random selection of a controlled
procedure that assures that each Population element is gives a non-zero chance of selection.
Probability Sampling is of following types:
1. Simple Random
2. Systematic
3. Cluster
4. Stratified
5. Double
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2. Non-Probability Sampling: Non probability sampling is non-random and subjective.
That is each member does not have a known non zero chance of being included. Types of
Non-Probability Sampling
1. Convenience
2. Judgement
3. Quota
Researcher selects the sample as per their convenience.
For this research work I have chosen Non- Probability Convenience Sampling because time
limit for the completion of the work is limited and also managers and employees are not
available all the time.
Area of Study - Moradabad.
Duration - 6 weeks
Data Collection Method
Data for the present study is collected from two sources:
Primary sources:
The data are collected directly from the universe by conducting interviews, etc. these are the
original sources from which the researcher directly gathers data which are not previously
referred.
Secondary sources:
The data are collected from the secondary sources such as magazines, journals, etc. These
sources consist of already variable data in the form of statements, and reports, which may
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Stimulation:
Stimulation is a technique of performing experiments on the model of a particular system.
The experiment is done on the model and not on the real system because the latter will be
inconvenience and expansive.
Mail survey:
Through Mail survey, we can get direct data from the universe, the responds and the
feedback based on which the research can be carried out.
Projective techniques: Projective techniques are based on the theory that the description are
the vague objects and requires interpretation, and this interpretation can be based on the
individual own background, attitudes, and values.
Questionnaire:
Questionnaire is the method of data collection, which is very much popular, particularly in
big cities. Different modes of questions are put up on the paper and the particular universe,
on which the research is conducted, are asked to fill theirresponses.
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FINDING AND ANALYSIS
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1. Are you aware of Mutual Funds?
Yes( ) No( )
70
YES 77%
NO 23%
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2. Are you aware of the followings in relation to mutual funds?
Different types of schemes ( )
Net Asset Value (NAV) ( )
Sponsor ( )
Association of Mutual Funds of India (AMFI) ( )
INTERPRETATION
The purpose of this question is to know that whether investors are aware about various
relations in mutual funds. The findings show that 35% of people are aware about different
types of schemes and about 35% for NAV. 20% people are aware about AMFI and only 10%
are aware about the sponsors.
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Different types of schemes 35%Sponsor 10%
NAV 35%AMFI 20%
Awareness in relation to mutual funds
35%
10%
35%
20%
010 20 30 40
Different types of
schemes
Sponsor
NAV
AMFI
Awareness in relation to mutual funds
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3. How did you come to know about Mutual fund investment schemes?
Reference groups ( ) Intenet/Mail ( )
Financial Magazine/Newspaper ( ) Television ( )
Broker / Agent ( )
Influencial factor Referencegroups 12%
Intenet /Mail15%
Financial
Magazine /N
ewspaper
25%
Television
8%
Broker &Age
nts 40%
Reference groupsIntenet/MailFinancial Magazine/Newspaper
TelevisionBroker&Agents
INTERPRETATION
The purpose of this question is to know how people know about mutual fund schemes.The
findings show that majority i.e. 40% of people come to know through
brokers&agents.Second best is newspaper & Financial magazine having a stake of 25%.
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Reference groups 12%
Intenet/Mail 15%
Financial Magazine/Newspaper 25%
Television 8%
Broker&Agents 40%
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4. Which all mutual fund you have invested in?
Reliance Mutual Fund ( ), ICICI Prudential Mutual Fund ( )
S.B.I. Mutual Fund ( ) fair-wealth securities
INTERPRETATION
The purpose of this question is to know that in what all mutual funds investment is being
made by investors.The findings show that 55% of people invest in reliance and about 23%
invest in ICICI.
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Relaince Mutual Fund 55%
ICICI Mutual Fund 23%
S.B.I. Mutual Fund 12%
Others 10%
0%
20%
40%
60%
preferred mutual fund company
Series1 55% 23% 12% 10%
Reliance ICICI S.B.I. Fw.s
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5. Do you view following factors/ source of information important while investing in
mutual fund?
Safety ( ) Liquidity ( )
Return earned ( ) Tax saving ( )
All of the above ( )
Factor affecting investment in mutual funds
Tax saving
5%
All the above
75%
Liquidity
6%Return earned
6%
Safety
8%
Safety
Liquidity
Return earned
Tax saving
All the above
INTERPRETATION
The purpose of this question is to know what factors are important while investing in mutual
fund. The findings show that nearly all the factors i.e. safety, liquidity, returned earned and
tax saving are important and considered while making investment in mutual funds. However,
75% investors consider nearly all the factors.
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Safety 8%Liquidity 6%Return earned 6%
Tax saving 5%All the above 75%
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6. Do you find following source of information relevant to analyze the performance of
your investment?
Monthly updates ( ) , Quarterly Results ( )
Half yearly Reports ( ) , Annual Reports ( )
Newspapers ( ) , Websites of respective mutual funds ( )
AMFI website ( )
Monthly updates 10%
Quarterly Results 12%
Half yearly Reports 10%
Annual Reports 20%
Newspapers 30%Websites of respective mutual
funds 9%
AMFI website 9%
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0%
5%
10%
15%
20%
25%
30%
Information relevant to analyseperformance of investment
Series1 10% 12% 10% 20% 30% 9% 9%
Monthly
updates
Quarterl
y
Half
yearly
Annual
Reports
Newspa
pers
Websit
es of
AMFI
website
INTERPRETATION
The purpose of this question is to know various sources of information important to analyse
the performance of investment made in mutual funds.The result shows that majority is
occupied by newspaper having 30%.20% by annual reports,10% each for monthly and
halfyearly updates while 9% each by websites of respective mutual funds and AMFI website.
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7.Do you seriously go through the Annual report of your scheme to evaluate the
performance of your scheme?
Yes No (If no, skip to Q No. 8)
Yes 60%
No 40%
Considertion of Annual Reports
Yes
60%
No
40% Yes
No
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INTERPRETATION
From the above it can be easily depicted that 60% of people seriously go through Annual
reports of th