SUMMER TRAINING PROJECT

REPORT
ON

YES MUTUAL FUND

Submitted in partial fulfillment of the requirement of the

degree of
BACHELORS OF BUSINESS ADMINISTRATION
Affiliated from
H.N.B. Garhwal University, Srinagar

SUBMITTED BY
GILBERT LAZRAS

Internal Guide: External Guide

Miss Neeta Bisht Mrs. Pushpa Negi
Lecturer Finance Manager

DEPARTMENT OF MANAGEMENT
INSTITUTE OF TECHNOLOGY & MANAGEMENT DEHRADUN

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 ACKNOWLEDGEMENT
At the very outset, I would like to acknowledge with immense gratitude the support and guidance
of some people without whom the project could not have been completed. Also thanks to them, I
learnt a lot more additional things than that just restricted to my project.

First of all I would like to thank my project guide Deepak Parekh - ( Manager ) for his
support and patience with me despite him being hard pressed for time.

I am thankful to for providing me with the wonderful opportunity and allowing me to take this
study.

Also I would like to thank the faculty guide of my college Ms Surbhi Sharma
who guided me in my project.

I would also like to thank my faculty member.

Last but not the least I would like to thank my parents who have always showed their full faith in
me, and are the biggest source of my encouragement and guidance.

Gilbert Lazras

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 CANDIDATES DECLARATION

I hereby declare that the work for the project Report entitled PERFORMANCE
APPRAISAL BIRLA POWER SOLUTION for the partial fulfillment of my Bachelors of
Business
Administration. Admittedly I have received suggestions and guidance from my guides.

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 EXECUTIVE SUMMARY

A summer Training of two months is an integral part of any M.B.A. programmer. It provides the
student with opportunity to experience the market condition in which the company works in a war
zone of rapidly changing competitions. Managed trade policies and diminishing customer locality.

The study was done in YES MUTUAL FUND ASSET MANAGEMENT COMPANY,
DEHRRADUN. The YES MUTUAL FUND way of life is a reflection of its parentage. The YES
group is one of the most respected and prestigious names in the country, and has a long-standing
commitment to service, reliability and customer satisfaction. And what the group stands for is what

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 Preface

This project report is submitted for the partial fulfillment of MBA (Master of Business
Administration) degree from Uttarakhand Technical University, undertaken at YES Mutual Fund
office, DEHRRADUN.

Mutual Fund as the name suggests are the investment products that operate on the principle of
strength in numbers. They collect money from large group of investors, pool it together and invest in
various securities. Mutual Funds are not magic investments vehicles that do it all. One has to come
to terms with the fact that neither they assure returns nor the value of an original investment. It has to
be accepted as a reality that even the experts in investments matter, can go wrong their assessments.
Mutual Fund offers several features that make them a powerful and convenient wealth creation
vehicle worthy of consideration. One can invest his money in allied ways in mutual funds such as
small investments, diversified portfolio, liquidity, tax brakes etc. I have done my study on mutual
fund of YES.

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 CONTENTS

1. OBJECTIVES

2. OVERVIEW

3. INTRODUCTION TO MUTUAL FUNDS

4. FUNDS STRUCTURE AND CONSTITUENTS

5. MUTUAL FUND STRUCTURE IN INDIA

6. ORGANISATION OF A MUTUAL FUND

7. ORGANISATION OF MUTUAL FUND

7.1. First phase: 1964 1987

7.2. Second phase: 1987 1993

7.3. Third phase: 1993 1996

7.4. Fourth phase: 1996 1999

7.5. Fifth phase: 1999 2004

8. MUTUAL FUNDS

9. TYPES OF MUTUAL FUND SCHEMES

9.1. By Structure

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 9.2. By Investment Objectives

9.3. Other Schemes

10. ADVANTAGES OF MUTUAL FUNDS

11. DISADVANTAGE OF MUTUAL FUNDS

12. YES MUTUAL FUNDS

13. YES ASSET MANAGEMENT COMPANY (AMC)

14. YES MUTUAL FUND PRODUCTS

14.1. Equity Funds

14.2. Balanced Funds

14.3. Debt Funds

15. COPARITIVE STUDY OF YES MUTUAL FUND WITH OTHER

COMPANYS MUTUAL FUND

16. RESEARCH METHODOLOGY

17. DATA COLLECTION

18. STEP BY STEP ANALYSIS AND INTERPRETATION

19. FINDINGS

20. SUGGESTIONS AND RECOMMENDATIONS

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21. CONCLUSION

22. QUESTIONNAIRE

23. BIBLIOGRAPHY

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OBJECTIVE

For the project to be successful it is important to define its objective.

The main objective of the project undertaken was:

To do the comparative analysis of YESs mutual fund with other respective companies

To find out the investment pattern of the consumers.

To create the awareness about mutual funds.

To spread awareness about YESs mutual funds.

Significance of the study

The underlying motivates of the research were to furnish the organization with vital information and
facilitate the researcher to gain a practical insight to the market scenario. The study proved
significant in terms of catering to the interests of both the company and the researcher.

Significance of the organization

The study enabled the organization to know about the perception of investors for investment.
Further, company will be benefited with the systematic database of the study conducted to find out
investment decisions made by the potential investors.

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 OVERVIEW

Overview of the Indian mutual fund industry

The unit trust of India dominates the Indian mutual funds industry. The UTI has many funds/
schemes in all categories i.e. equity, debt (income) etc. with some being open ended and some being
close ended. UTI was floated by financial institutions and is governed by a special act of parliament.
Most of its investors believe that the UTI is government owned and controlled, while legally
incorrect, is true for all practical purposes.

The second category of mutual fund in the ones floated by nationalized banks. Can bank asset
management floated by Canara bank and SBI funds management floated by the state bank of India
are the largest of these. GIC, AMC floated by General Insurance Corporation and Jeevan Bima
Sahayog AMC floated by the LIC are some of the other prominent ones.

The third largest category of mutual funds is the ones floated by the private sector and by foreign
asset management companies. The largest of these are Birla sun life, standard chartered AMC etc.

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 INTRODUCTION TO MUTUAL FUNDS
Different investment avenues are available to investors. Mutual funds also offer good investment
opportunities to the investors. Like all investments, they also carry certain risks. The investors
should compare the risks and expected yields after adjustment of tax on various instruments while
taking investment decisions. The investors may seek advice from the experts and consultants
including agents and distributors of mutual funds schemes while making investments decisions.

With an objective to make the investors aware of functioning of mutual funds, an attempt has been
made to provide information in question-answer format which may help the investors in taking
investment decisions.

CONCEPT

A Mutual Fund is a trust that pools the savings of a number of investors who share a common
financial goal. The money thus collected is then invested in capital market instruments such as
shares, debentures and other securities. The income earned through these investments and the capital
appreciations realized are shared by its unit holders in proportion to the number of units owned by
them. Thus a Mutual Fund is the most suitable investment for the common man as it offers an
opportunity to invest in a diversified, professionally managed basket of securities at a relatively low
cost.

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 The flow chart below describes broadly the working of a mutual fund:

Mutual Fund Operation Flow Chart

Mutual funds is a body corporate registered with the securities and exchange board of India (SEBI)
that pools up the money from individual/corporate investors and invests the same on behalf of the
investors/unit holders, in equity shares, government securities, bonds, call money markets etc, and
distributes the profits. In the other words, a mutual fund allows investors to indirectly take a position
in a basket of assets.

Mutual fund is a mechanism for pooling the resources by issuing units to the investors and investing
funds in securities in accordance with objectives as disclosed in offer document. Investments in
securities are spread among a wide cross-section of industries and sectors thus the risk is reduced.
Diversification reduces the risk because all stocks may not move in the same direction in the same
proportion at same time. Investors of mutual funds are known as unit holders.

The investors in proportion to their investments share the profits or losses. The mutual funds
normally come out with a number of schemes with different investment objectives which are

12
launched from time to time. A mutual fund is required to be registered with Securities Exchange
Board of India (SEBI) which regulates securities markets before it can collect funds from the public.

13
 FUNDS STRUCTURE AND CONSTITUENTS

LEGAL STRUCTURE OF MUTUAL FUNDS

Mutual funds have a unique structure not shared with other entities such as companies or firms. It is
important for the employees and agents to be aware of the special nature of this structure, because it
determines the rights and responsibilities of the funds constituents i.e. sponsors, trustee, custodian,
transfer agents and of course, the fund and asset management company (AMC). It also drives the
inter-relationship between these constituents.

MUTUAL FUND STRUCTURE IN THE USA

In the USA, mutual funds are set up as investment companies, which may be thought of as the fund
sponsors. An investment company may be a corporation, partnership or a unit investment trust. For
our purposes, all these legal entities may be broadly understood as mutual funds. The investment
company in turn appoints a management company, which may be either a closed end Management
Company or company or an open-end management company. Only open end management
companies are technically called mutual funds in the USA.

The constituents of mutual funds in the USA are:

The Management Company

The management company is the Indian equivalent of an AMC where the AMC is
approved by SEBI and is responsible for managing the funds by making investments
in various types of securities.

Underwriter

Underwriter of a fund is nothing but the distributor or the marketing company which
is responsible for selling the shares to the brokers or to the public.

Management Group

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 A management group is a family of management companies which is owned by a
group of people or a corporation.

Custodian

Custodian may be defined as the entity that holds the funds assets on the behalf of
the management company.

MUTUAL FUND STRUCTURE IN THE UK

In the UK mutual funds have two alternative structures.

OPEN ENDED FUNDS

Open ended funds are in the form of unit trust. These unit trusts are regulated by the
securities and investment board. They must also be authorized by the relevant self-
regulatory organization.

CLOSE ENDED FUNDS

Close ended funds are in the form of corporate entities although called as
investment trust. These investments trusts are structured as companies and provision
of the company act are applicable to them.

NOTE: Separate regulatory mechanism exist for both types of entities.

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 MUTUAL FUND STRUCTURE IN INDIA

India has a legal framework within which mutual funds must be constituted. In India open and close
ended funds operate under the same regulatory structure, and are constitute along one unique
structure as UNIT TRUSTS

A mutual fund in India is allowed to issue open and close ended schemes under a common legal
structure. Therefore, a mutual fund may have several different schemes under it. Mutual funds in
India are laid down under SEBI regulation, 1996.

In India mutual fund is step in the form of trust, which has Sponsor:-

Sponsor is defined under SEBI regulation as any person who is acting along or in combination with
another body corporate established as mutual funds. Sponsors are basically the promoters of a
company as they get the fund registered with SEBI. The sponsor will form a trust and appoint a
Board of trustees. It also generally appoints asset management companies as fund managers.

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 ORGANISATION OF A MUTUAL FUND

There are many entities involved and the diagram

below illustrates the organizational set up of a
mutual fund:

Mutual funds diversify their risk by holding a portfolio of instead of only one asset. This is because
by holding all your money in just one asset, the entire fortunes of your portfolio depend on this one
asset. By creating a portfolio of a variety of assets, this risk is substantially reduced.

Mutual fund investments are not totally risk free. In fact, investing in mutual funds contains the same
risk as investing in the markets, the only difference being that due to professional management of
funds the controllable risks are substantially reduced. A very important risk involved in mutual fund
investments is the market risk. When the market is in doldrums, most of the equity funds will also
experience a downturn. However, the company specific risks are largely eliminated due to
professional fund management.

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TRUSTEES:-

The mutual funds may be managed be board of trustees that may be a body of
individuals or trust company. These boards of trustees are governed by the provision of the Indian
Trust Act. The trustees of the mutual fund hold its property for the benefits of unit holders; they do
not directly manage the portfolio of securities. For this they appoint the asset management company.

RIGHTS OF TRUSTEES

The trustees appoint the AMC with the prior approval of SEBI.

They also approve each of the schemes floated by the AMC.

They have the right to request any necessary information from the AMC concerning the
operations of various schemes managed by AMC as often as required to ensure that the AMC
is in compliance with the trust deed and the regulation.

The trustees may take remedial action if they believe that the conduct funds business is not in
accordance with SEBI regulation.

The trustees have the right to ensure that, based on their quarterly review of the AMCs net
worth; any short fall in the net worth is made up by the AMC.

OBLIGATION OF TRUSTEES

Trustees must ensure that the fund transactions are accordance with the trust deed.

The trustees are responsible for ensuring that the AMC has proper systems and procedures in
place and has appointed key personnel including fund mangers and a compliance officer,
besides other constituents such as the auditors and registrars.

The trustees must ensure the due diligence on the part of AMC for empanelment of brokers.
The trustees must ensure that the AMC is managing schemes independent of other activities

18
 and that the interest of unit holders of one scheme are not compromise with those of others
scheme.

The trustees must furnish to SEBI on a half yearly basis, a report on the funds activities and a
certificate stating that the AMC has been managing. The schemes independently of other
activities.

THE ASSET MANAGEMENT COMPANY (AMC):-

The role of an AMC is to act as the investment manager of the trust; these are appointed by sponsors
and the trustees and the trustees and have to be approved by SEBI. Once the AMC is approved by
SEBI then it functions under the supervision of its own board of directors, and also under the
direction of the trustees and SEBI. 50% of the directors of AMC must be independent. The AMC of
mutual fund must have a net worth at least 10 crore at all times. Directors of AMC, both dependent
and independent, should have adequate professional experience in financial services and should be
individuals of high morale standing, a condition also applicable to other key personnel of the AMC.
The AMC can not act as trustee of any other mutual funds.

LIMITATIONS OF AMC

Investment of funds is in accordance with the SEBI regulation and trust deed.

They take responsibility for the act of its employee and others whose services it has procured.

They are answerable to the trustees and must submit quarterly reports to them on AMC
activity and compliance with SEBI regulations.

If the AMC uses the services of a sponsor, associate or employee, it must make appropriate
disclosure to unit holders, including the amount of brokerage or commission paid. They do
not undertake any other activity conflicting with managing the fund.

They will float schemes only after obtaining the prior approval of trustees and SEBI.

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 They will make the required disclosure to the investors in areas such as calculation of NAV
and repurchased price.

Each days NAV is updated on AMFIs web site by 8 pm. Of the relevant date.

WHAT IS NAV?

A mutual fund is a common investment vehicle where the assets of the fund belong directly to the
investors. Investors subscription is accounted for/ by the fund not as liabilities or deposits but as
Unit Capital. On the other hand, the investments made on the behalf of the investors are reflected on
the assets side and are the main constituents of the balance sheet. However, there are liabilities of a
strictly short-term nature that may be part of the balance sheet. The funds Net Assets are thereafter
defined as the Assets minus Liabilities. As there are many investors in a fund, it is common
practice for mutual funds to compute the share of each investor on the basis of the value of Net
Assets per Share/Unit, commonly known as the Net Asset Value (NAV).

Calculation of NAV according to SEBI:

NAV= Net Assets of the scheme / Number of Units Outstanding

i.e.

NAV= Market Value of Investments + Receivable + Other Accrued Income + Other Assets
Accrued Expenses Other Payables Other Liabilities / No. of Units Outstanding as at the
NAV date

Features of NAV:

For the purpose of NAV calculation, the day on which NAV is calculated by the fund is
known as the valuation date.

NAV of all the schemes must be calculated and published at least weekly for closed end
schemes and daily for open end schemes.

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 NAVs for a day must also be posted on the AMFIs website by 8.00 p.m. on that day; this
applies to both the open end and close end schemes. One exception is that those close end
schemes which are not mandatory required to be listed in any stock exchange may publish
their NAV at monthly or quarterly intervals as permitted by SEBI.

Example:

Monthly income schemes that are not listed on a stock exchange.

A funds NAV is affected by 4 sets of factors:

Purchase and sale of investment securities

Valuation of all investment securities held

Other assets and liabilities, and

Units sold or redeemed.

Now a day many funds calculate and announce their NAVs even daily. Such frequent
computations of asset values involve valuation investment securities at their market
prices and inclusion of other assets and liabilities.

Other assets include any income due to the fund but not received as on the valuation date
for example dividend announced by a company yet to be received where as other
liabilities are those which have to include expenses payable by the fund, for example
custodian fees or the management fees payable to the AMC. These income and
expenses have to include in the computation of NAV, therefore SEBI requires that all
these income and expenses are accrued up to the valuation date and considered for NAV
calculation.

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 In can be seen from the NAV definition that addition to and sales from the portfolio of
securities, and changes in the number of units outstanding will both affect the per unit
asset values. Such changes in securities and number of units must be recorded by the next
valuation date but if the frequency of NAV declaration does not permit this, then at that
time recording may be done within 7 days of the transaction, provided that the non
recording does not affect the NAV calculation by more than 2%.

The NAV of money market fund is kept at $1, although not guaranteed to stay at $1,
money market fund NAVs have usually been kept at $1 due to the stability of the
underlying investments. This means that by if we own 3,380 areas, our fund will be worth
$3,380, so that the fund manager must be able to maintain the $1 per share value allowing
the dividend rate to fluctuate rather than the share price.

WHO IS FUND MANAGERS?

A fund manager is one who manages one of the best-performing equity funds in the country says the
ability of the company managements to forecast the environment is very limited. He argues that
management fails miserably in assessing the environment dispassionately and hence is often off the
mark when it comes to predicting the future. That includes even the best companies such as Infosys -
the company ended the year with double the earnings growth projected in this inputs any less
important to the whole process of assessing the worthiness of a stock.

How to know the performance of a mutual fund schemes?

The performance of a scheme is reflected in its net asset value (NAV) which is disclosed on daily
basis in case of open-ended schemes and weekly basis in case of close-ended schemes. The NAVs
of mutual funds are required to be published in newspapers. The NAVs are also available on the
web site of Association of Mutual funds in India (AMFI) www.amfiindia.com and thus the investors
can access NAVs of all mutual funds at one place.

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The mutual funds are also required to publish their performance in the form of half-yearly results
which also include their returns/yields over a period of time i.e. last six months, 1 year, 3 years, 5
years and since inception of schemes. Investors can also look into other details like percentage of
expenses of total assets as these have an effect on the yield and other useful information in the same
half-yearly format.

The mutual funds are also required to send annual report or abridged annual report to the unit
holders at the end of the year.

Various studies on mutual fund schemes including yields of different schemes are being published by
the financial newspapers on a weekly basis. Apart from these, many research agencies also publish
research reports on performance of mutual funds including the ranking of various schemes in terms
of their performance of various schemes of different mutual funds.

Investors can compare the performance of their schemes with those of other mutual funds under the
same category. They can also compare the performance of equity oriented schemes with the
benchmarks like BSE Sensitive Index, S&P, CNX, Nifty, etc. On the basis of performance of the
mutual funds, the investors should decide when to enter or exit from a mutual fund scheme

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 INDUSTRY PROFILE

About YES BANK

YES BANK is pursuing a Brand strategy to build one of the finest financial brands in India. YES BANK
believes that differentiation begins with its service and trust mark embedded in YES, which represents the
Banks fundamental goal of being a highly service-oriented Financial Institution. The endeavor at YES BANK
is to provide an unprecedented Delightful Banking Experience to all its customers.

Rana Kapoor is the Founder/Managing Director & CEO of YES BANK. As a professional entrepreneur, since
2003, he is progressively establishing a high quality, state-of-the-art private Indian Bank with a vision of
Building the Best Quality Bank of the world in India by 2015.

YES signifies -

The essence of the brand completely by conveying all the values and characteristics - Attractive,
Smart, Simple, Serious, Reliable, Trustworthy, Optimistic, Positive, Efficient, Universal

Clutter breaking in the banking environment, and affirmative with target clients across business and
market segments

Brand Vision and Commitment

To be recognized as the WORLDs BEST QUALITY BANK IN INDIA

To provide a Delightful Banking Experience to all its customers

To be a long term partner with all stakeholders particularly customers by creating & sharing value

To be a solid and trusted financial trust mark backed by two professional promoters and an
exceptional management team

Brand Pillars
The YES BANK brand is being built around 5 Key Brand Pillars, which epitomize the growing
strengths of the Bank. All communication and advertising has been created around these key
Brand Pillars

Growth - YES BANK's core promise is growth, for it's internal and external stakeholders
symbolize in
Say YES to Growth!

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 Trust - YES BANK's Promoters, Investors and Top Management team, are all of the highest
pedigree with a demonstrated track record, thus inspiring and establishing a Trust Mark - Say
YES to Trust!

Knowledge Driven Human Capital - YES BANK has adopted a knowledge driven
entrepreneurial approach to Banking and offers Financial Solutions beyond the traditional
realm of banking.
YES BANK's top quality Human Capital represents the finest talents in Indian banking
mobilized from India and abroad.

Technology - YES BANK is establishing the highest standards in customer service by

adopting cutting-edge Innovative Technology. The only thing constant about YES BANK's
Technology is Evolution.

Transparency & Responsible Banking - YES BANK holds Transparency and Accountability
above all else. The Bank has established the most stringent Corporate Governance norms,
and is also committed to Responsible Banking by focusing on Sustainability and Social
Responsibility.

Organizational Structure
YES BANK is having a wide span structure with a decentralized model. The organization is having a Board
of Directors and a control committee. The organization is divided into different section as per the banking
services. The list of services provided by YES bank is

Corporate & Institutional Banking

Commercial Banking
Small Business Banking
Credit Risk, Business Banking
Cash Management & Direct Banking
International Banking
Investment Banking
Corporate Finance and Development Banking
Retail Banking & Wealth Management - Operations
Food & Agribusiness Strategic Advisory and Research (FASAR)
Responsible Banking
Sustainable Investment Banking

Based upon the services various departmental units are formed, which are responsible for conducting all the
operations of that type. These units are headed by the basic departments of the organization e.g. Marketing,
Sales (Financial Market), HR, International Banking etc.

Below is the list of Board of Directors and the Key Managerial staff of YES BANK.

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 Board of Directors

Name Designation
Mr. Rana Kapoor Managing Director & CEO
Chairman - Nominations & Governance Committee
Mr. Sipko Schat Non Independent Director
Mr. Wouter Kolff Independent Director
Mr. Bharat Patel Independent Director
Chairman - Investor Relations committee
Chairman - Service Excellence Committee
Mr. S.L Kapur Independent Director
Chairman - Audit & Compliance Committee
Chairman - Board Remuneration Committee
Mr. Arun K Mago Independent Director
Ms Radha Singh Independent Director
Mr. Ajay Vohra Independent Director

Key Management

26
 Designation

Rana Kapoor
Founder / Managing Director & CEO

Sunil Gulati Group President - Corporate & Institutional Banking

Deepak Gaddhyan President- Government Relationship Management

Sumit Gupta President- Commercial Banking

Rajnish Datta President- Small Business Banking

Aalok Gupta EVP & Country Head- Credit Risk, Small Business Banking &
Operations Risk Management

Ravi Shankar GEVP & Country Head- Cash Management & Direct Banking

Sandeep Sarkar Managing Director- Financial Market, Sales

Arun Agrawal President & Global Head-International Banking

Surendra Jalan EVP & Country Head- Indian Financial Institutions

Aditya Sanghi Senior Managing Director - Investment Banking

Vikas Dawra Managing Director - Investment Banking

27
Sandeep Baid Managing Director - Investment Banking

Somak Ghosh Group President - Corporate Finance and Development

Banking

Sanjay Palve Managing Director - Infrastructure Banking Group

Samir Chawla EVP & Country Head - Corporate Finance

Varun Tuli Group President, Branch Banking

Suhail Kazmi President, Wealth Management

Suresh Sethi Group President - Transaction Banking

Lovekesh Dev EVP & Country Head- Retail Banking & Wealth Management
- Operations

Rajat Monga Group President- Financial Markets & Chief Financial Officer

Nilanjan Sinha GEVP & General Counsel

Devamalya Dey President - Audit & Compliance

Shubhada Rao Executive Vice President & Chief Economist

Deodutta Kurane President - Human Capital Management

28
Umesh Jain President & Chief Information Officer

Alok Rastogi President & Chief Operating Officer

Kalyan Chakravarthy EVP & Country Head- Food & Agribusiness Strategic Advisory
and Research (FASAR)

Tushar Pandey EVP & Country Head- Strategic Initiatives & Advisory-
Government (SIG)

Vivek Mehra Managing Director - Sustainable Investment Banking

Rita Soni SVP & Country Head- Responsible Banking

Ankush Sambhoo EVP & Country Head- Infrastructure & Network Management

Om Ahuja EVP & Country Head - Liabilities & Investment Management

Kavita Venugopal Group President & Chief Risk Officer

29
 MUTUAL FUNDS

Dictionary definition of a mutual fund might go something like this: a single portfolio of stocks,
bonds, and / or cash managed by an investment company on behalf of many investors. The
Investment Company is responsible for the management of the fund and it sells shares in the fund to
individual investors. When you invest in a mutual fund, you become a part owner of the large
investment portfolio, along with all the other shareholders of the fund. When you purchase shares,
the fund manager invests your hands, along with the money contributed by the other shareholders.

Every day, the fund manager counts up the value of all the funds holdings, figures out how many
shares have been purchased by shareholders, and then calculate the Net Asset Value (NAV) of the
mutual fund, the price of a single share of the fund on that day.

If the fund manager is doing a good job, the NAV of the will usually gets bigger- your shares will be
worth more. But exactly how does mutual funds NAV increase? There are a couple of ways that a
mutual fund can make money in its portfolio.

A mutual fund can receive dividends from the stocks that it owns. Dividends are shares of
corporate profits paid to the stockholders of public companies. The fund might have money in
the blank that earns interest, or it might receive interest payments from bonds that it owns.
These are all sources of income for the fund. Mutual funds are required to hand out (or distribute)
this income to shareholders. Usually they do this twice a year; in a move thats called an income
distribution.

At the end of the year, a fund makes another kind of distribution, this time from the profits
they might make by selling stocks or bonds that have gone up in price. These profits are known as
capital gains, and the act of passing them out is called a capital gains distribution.

You can make money from a mutual fund in three ways:

30
 Income is earned from dividends on stocks and interest on bonds. A fund manager
pays out nearly all income it receives over the year to fund owners.

If the fund sells securities that have increased in price, the fund have a capital gain
most funds also pass on these gains to investors in a distribution.

If fund holdings increase in price but are not sold by the fund manager, the funds
shares increase in price. You can sell your mutual fund shares for a profit.

Funds will also usually give you a choice either to receive a check for distributions or to
reinvest the earnings and get more shares. Thus a Mutual Fund is the most suitable investment for
the common man as it offers an opportunity to invest in a diversified, professionally managed basket
of securities at a relatively low cost.

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 TYPES OF MUTUAL FUND SCHEMES

Wide variety of Mutual Fund Schemes exists to cater to the needs such as financial position, risk
tolerance and return expectations etc. The table below gives an overview into the existing types of
schemes in the industry.

TYPES OF MUTUAL FUND SCHEMES

BY STURUCTURE

Open Ended Schemes

Close Ended Schemes

Interval Schemes

BY INVESTMENT OBEJECTIVE

Growth Schemes

Income schemes

Money Market Schemes

OTHER SCHEMES

Tax Saving Schemes

Special Schemes

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 Index Schemes

Sector Specific Schemes

TYPES OF MUTUAL FUNDS

SCHEMES ACCORDING TO STURUCTURE:

A mutual fund schemes can be classified into open-ended scheme or close-ended scheme depending
on its maturity period.

1. Open-ended Fund/ Scheme

An open-ended fund or scheme is one that is available for subscription and repurchase on a
continuous basis. These schemes do not have a fixed maturity period. Investors can conveniently
buy and sell units at Net Asset Value (NAV) related prices which are declared on a daily basis.
The key feature of open-end schemes is liquidity.

2. Close-ended Fund/ Scheme

A close-ended fund or scheme has a stipulated maturity period e.g. 3 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

33
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. SEBI regulations stipulated that
at least one of the two exits routes is provided to the investor i.e. either repurchases facility or
through listing on stock exchanges. These mutual funds schemes disclose NAV generally on
weekly basis.

SCHEMES ACCORDING TO INVESTMENT OBJECTIVES:

A scheme can also be classified as growth scheme, income scheme, or balanced scheme
considering its investment objective. Such schemes may be open-ended or close-ended schemes
as described earlier. Such schemes may be classified mainly as follows:

1. Growth / Equity Oriented Scheme

The aim of growth funds is to provide capital appreciation over the medium to long term. Such
schemes normally invest a major part of their corpus in equities. Such funds have comparatively
high risks. These schemes provide different options to the investors like depending on their
preferences.

The investors must indicate the option in the application form. The mutual funds also allow the
investors to change the options at a later date. Growth schemes are good for investors having a
long-term outlook seeking appreciation over a period of time, some major types of equity funds
according to higher to lower risks level are as follows:

Aggressive Growth funds

Growth funds

34
Specialty funds

Sector funds

Offshore funds

Small Cap equity funds

Option income funds

Diversified Equity funds

Equity Linked Saving Schemes-An Indian Variant

Equity Index funds

Value funds

Equity Income funds

2. Income / Debt Oriented Scheme

The aim of income funds is to provide regular and steady income to investors. Such schemes
generally invest in fixed income securities such as bonds, corporate debentures, Government
securities and money market instruments. Such funds are less risky compared to equity schemes.
These funds are not affected because of fluctuations in equity markets. However, opportunities of
capital appreciation are also limited in such funds. The NAVs of such funds are affected because
of change in interest rates in the country. If the interest rates fall, NAVs of such funds are likely
to increase in the short run and vice versa. However, long term investors may not bother about
these fluctuations. Some major types of debt funds with different risk profiles:

Diversified debt funds

Focused debt funds

35
Higher Yield Debt funds

Assured Return Funds- An Indian Variant

Fixed Term Plan Series-Another Indian Variant

3. Balanced Fund

The aim of balanced funds is to provide both growth and regular income as such schemes invest
both in equities and fixed income securities in the proportion indicated in their offer documents.
These are appropriate for investors looking for moderate growth. They generally invest 40%-
60% in equity and debt instruments. These funds are also affected because of fluctuations in
share prices in the stock markets. However, NAVs of such funds are likely to be less volatile
compared to pure equity funds.

4. Money Market or Liquid Fund

These funds are also income funds and their aim is to provide easy liquidity, preservation of
capital and moderate income. These schemes invest exclusively in safer short-term instruments
such as treasury bills, certificates of deposit, commercial paper and inter bank call money,
government securities, etc. Returns on these schemes fluctuate much less compared to other
funds. These funds are appropriate for corporate and individual investors as a means to park their
surplus to park their surplus funds for short periods.

OTHERS SCHEMES:

1. Tax Saving Fund

36
These schemes offer tax rebates to the investors under specific provisions of the Income Tax Act,
1961 as the Government offers tax incentives for investment in specified avenues e.g. Equity
Linked Saving Schemes (ELSS). Pension schemes launched by the mutual funds also offer tax
benefits. These schemes are growth oriented and invest predominantly in equities-oriented
scheme.

2. Special schemes:

a) Index Funds:

Index Funds replicate the portfolio of a particular index such as the BSE sensitive index,
S&P NSE 50 index (Nifty), etc. These schemes would rise or fall in accordance with the
rise or fall in the index, though not exactly by the same percentage due to some factors
known as tracking error in technical terms. Necessary disclosures in this regard are
made in the offer document of the mutual fund scheme. There are also exchange traded
index funds launched by the mutual funds which are traded on the stock exchanges.

b) Sector Specific schemes:

These are the funds/schemes which invest in the securities of only those sectors or
industries as specified in the offer documents e.g. Pharmaceuticals, Software, Fast
Moving Consumer Goods (FMCG), Petroleum stocks, etc. The returns in these funds are
dependent on the performance of the respective sectors/ industries and must exit at an
appropriate time. They may also seek advice of an expert.

37
 What is a Load or no-load Fund?

A Load Fund is one that charges a percentage of NAV of entry or exit. That is, each time one buys
or sells units in the fund, a charge will be payable. This charge is used by the mutual fund for
marketing and distribution expenses. Suppose the NAV per unit is Rs.10. If the entry as well as exit
load charged is 1%, then the investors who buy would be required to pay Rs.10.10 and those who
offer their units for repurchase to the mutual fund will get only Rs.9.90 per unit. The investors
should take the loads into consideration while making investment as these affect their yields/returns.
However, the investors should also consider the performance track records and standards of the
mutual fund which are more important. Efficient funds may give higher returns in spite of loads. A
no-load fund is one that does not charge for entry or exit. It means the investors can enter the
fund/scheme at NAV and no additional charges are payable on purchase or sale or units.

38
 ADVANTAGES OF INVESTING IN MUTUAL FUNDS

Return Potential:
Mutual funds offer a higher return potential than banking products as they invest in various
instruments of the financial markets. Mutual funds investing in equity linked schemes are able to
offer higher returns to their investor because of the performance of the markets

Tax Benefit:
Some Mutual funds schemes offer you tax rebates under section 80 C. In addition, the returns from
mutual funds (dividends and capital appreciation) are also eligible for favorable tax treatment.

Convenient Administration:
Investing in mutual funds enables the investor to be mentally free of any troubles. An investor leaves
all decisions up to the fund manager, and is only required to decide the entry and exit from a
particular scheme.

Well Regulated:
Mutual fund industry is well regulated. SEBI has issued strict guidance Well Regulated Mutual fund
industry is well regulated. SEBI has issued strict declines governing the operations of a mutual fund.
From time to time SEBI keeps updating the rules and regulations governing the mutual fund
industry.
Mutual fund industry is well regulated. SEBI has issued strict guidelines governing the
operations of a mutual fund. From time to time SEBI keeps updating the rules and regulations
governing the mutual fund industry.

Diversification:
One rule of investing that both large and small investors should follow is asset diversification. Used
to manage risk, diversification involves the mixing of investments within a portfolio. To achieve a

39
truly diversified portfolio, you may have to buy stocks with different capitalization from different
industries and bonds having varying maturities from different issuers. By purchasing mutual funds,
you are provided with the immediate benefit of instant diversification and asset allocation without
the large amounts of cash needed to create individual portfolios.

Economies of Scale:
Mutual funds are able to take advantage of their buying and selling size and thereby reduce
transaction costs for investors. When you buy a mutual fund, you are able to diversify without the
numerous commission charges. Imagine if you had to buy the 10-20 stocks needed for
diversification. The commission charges alone would eat up a good chunk of your savings. Add to
this the fact you would have to pay more transaction fees every time you wanted to modify your
portfolio as you can see the costs begin to add up. Mutual funds are able to make transactions on a
much larger scale.

Liquidity:
Another advantage of mutual funds is the ability to get in and out with relative ease. You can sell
mutual funds at any time as they are as liquid as regular stocks. Both the liquidity and smaller
denominations of mutual funds provide mutual fund investors the ability to make periodic
investments through monthly purchase plans while taking advantage of Rupee cost averaging.

Professional Management:
When you buy a mutual fund, you are also choosing a professional money manager. This manager
will use the money that you invest to buy and sell stocks that he or she has carefully researched.
Therefore, rather than having to research thoroughly every investment before you decide to buy or
sell, you have a mutual funds money manager to handle it for you.

Transparency:

40
You will always have access to up-to-date information on the value of your investment in addition to
the complete portfolio of investments, the proportion allocated to different assets and the fund
managers investment strategy.

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

SEBI regulated:
All mutual funds are registered with SEBI and function within the provisions and regulations that
protect the interests of investors AMFI is the supervisory body of Mutual Fund Industry While most
investment options provide most of these features, only Mutual Funds provide all of these options.

1. Returns on mutual fund vary according to the scheme opted. Equity Funds can provide high but
inconsistent returns depending on the market performance. Debt funds provide relatively stable
returns. (Past performance is not a guarantee for future return.)

2. Debt funds are subject to interest rate risk and credit risk. Debt funds are comparatively safer
invest in government securities and highly rated corporate and government papers.

3. Liquidity in mutual funds is high, as it promises to pay on demand.

4. Diversification is important parameter for mutual funds as they invest in diverse securities, which
is not available with others. This also reduces the risk factor.

41
 DISADVANTAGES OF INVESTING THROUGH MUTUAL FUNDS

While the benefits of investing through mutual funds far outweigh the disadvantages, an investor and
his advisor will do well to be aware of a few shortcomings of using the mutual funds as investment
vehicles.

No Control over Costs:

An investor in a mutual fund has any control over the overall cost of investing. He pays investment
management fees as long as he remains with the fund, albeit in return for the professional
management and research. Fees are usually payable as a percentage of the value of his investments,
whether the fund value is rising or declining. A mutual fund investor also pays fund distribution
costs, which he would not incur in direct investing. However, this shortcoming only means that there
is a cost to obtain the benefits of mutual fund services. However, this cost is often less than the cost
of direct investing by the investors.

No Tailor-made Portfolios:

Investors who invest to their own can build their own portfolio of shares, bonds and other securities.
Investing through funds means he delegates this decision to the fund managers. The very high-net-
worth individuals or large corporate investors may find this to be a constraints in achieving their
objectives. However, most mutual funds help investors overcome these constraints by offering
families of schemes a large number of different schemes within the same fund. An investor can
choose from different investment plans and construct a portfolio of his choice.

No Guarantees:

No investments are risk free. If the entire stock market declines in value, the value of mutual
fund shares will go down as well. No matter how balanced the portfolio. Investors encounter
fewer risks when they invest in mutual funds than when they buy and sell stocks on their own.
However, any one who invests through a mutual fund runs the risk of losing money.

42
 Fees and commissions:

All funds charge administrative fees to cover their day-to-day expenses. Some funds also charge
sales commissions or loads to compensate brokers, financial consultants, or financial planners.
Even if you dont use a broker or other financial advisor, you will pay a sales commission if you buy
shares in a load fund.

Taxes:

During a typical year, most actively managed mutual funds sell anywhere from 20 to 70 percent of
the securities in their portfolios. If your fund makes a profit on its sales, you will pay taxes on the
income you receive, even if you reinvest the money you made.

Management Risk:

When you invest in a mutual fund, you depend on the fund manager to make the right decisions
regarding the funds portfolio. If the manager does not perform as well as you had hoped, you might
not make as much money on your investment as you expected. Of course, if you invest in Index
funds, you forego management risk, because these funds do not employ managers.

43
 How to choose the right kind of Mutual Fund scheme

Once you are comfortable with these basics, the next step is to understand your investment choices,
and draw up your investment plan relevant to your requirements. Choosing your investment mix
depends on factors such as your risk appetite, time horizon of your investment, your investment
objectives, age etc.

What should be kept in mind before investing in Mutual Funds? Mutual Fund investment
decision, require consistent effort on the part of the investor. Before investing in Mutual funds, the
following steps must be given due weight age to decide the right type of scheme:

1. Identifying the Investment Objective

2. Selecting the Right Scheme category
3. Selecting the right Mutual Fund
4. Evaluation of Portfolio

1. Identifying the Investment Objective:

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

Why do I want to Invest?

The probable answers could be:

I need regular income

I need to buy a house/finance a wedding
Educate my children or
A combination of all the above

44
How much risk am I willing to take?

Depending on various factors the risk taking capacities of individuals vary. Investors can be
classified as:

o Very conservative Investor

o Conservative Investor
o Moderate Investor
o Aggressive Investor
o Very Aggressive Investor

You may ascertain your risk appetite by filling the Investment Style check Questionnaire in the
latter half of the Guide.

What are my cash flow requirements?

Regular Cash Flow

Lump sum after a fixed period of time for some specific need in the future
No need of cash. Want to built fixed assets for the future

2. Selecting the Scheme Category:

The next step is to select a scheme category that matches your investment
objectives:-

For capital Appreciation go for equity sector funds, equity diversified funds, balanced funds.
For Regular Income and stability go for income funds/MIPS

45
 For short-term Parking of Funds go for liquid funds, floating rate funds, and Short term
funds.
For Growth with Tax Planning go for equity tax relief funds.
Investment Objective
Investment horizon

Ideal Instruments
Short Term Investment
1 - 6 Months
Liquid/short term plans
Capital Appreciation
Over 3 yrs
Diversified Equity/Balanced funds-
Regular Income-
Flexible
Monthly Income Plans / Income funds-
Tax saving-
3 yrs lock in
Equity linked saving scheme (ELSS)

3. Selecting the right Mutual fund

Once you have a clear strategy in mind, you now have to choose which Mutual fund and scheme you
want to invest in. The offer document of the scheme tells you its objectives and provided
supplementary details like the track record of other schemes managed by the same Fund Manager.
Some important factors to evaluate before choosing a particular Mutual Fund are:

The track record of performance over that last few years in relation to the appropriate
yardstick and similar funds in the same category.

46
 How well the Mutual Fund is organized to provide efficient, prompt and personalized
service.

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

4. Evaluation of portfolio-

Evaluation of equity fund involve analysis of risk and return, volatility, expense ratio, fund
managers style of investment, portfolio diversification, fund managers experience. Good equity
fund should provide consistent returns over a period of time. Also expense ratio should be within the
prescribed limits. These days fund house charge around 2.50% as management fees.

Evaluation of bond funds involve its assets allocation analysis, returns consistency, its
rating profile, maturity profile, and its performance over a period of time. The bond fund with deal
mix of corporate debt and gilt fund should be selected. Tax Implications on Mutual Funds
Investments.

Debt oriented-

Individual cases: Tax free in the hands of investor. Mutual fund has to pay a dividend distribution
tax of 12.5% plus 2.5% surcharge plus 2% education cess (13.07%).

Corporate Case: Tax free in the hands of investor. Mutual fund has to pay a dividend distribution
tax of 20% plus 2.5% surcharge plus 2% education cess (20.91%).

Long Term Capital Gain/Loss investment in the mutual funds held for more than 12 months
Equity oriented

Exempt from tax Long term capital loss from Mutual Funds can be set off only against Long term
capital gain from Mutual Fund or any other asset Any unabsorbed LTCL in a year can be carried

47
forward for set off in subsequent eight years against any other LTCG 20% with indexation with 2%
education cess

Debt oriented 10% with indexation with 2% education cess

Short Term Capital Gain/Loss investment in the mutual funds held for Less than 12 months

Equity oriented

Flat rate of 10% - Short-term capital loss from Mutual Funds can be set off against Short term
capital gain. Long Term capital gain from Mutual Fund is exempt from income tax.

Debt oriented
Applicable tax rate as per the tax slab of the investor, i.e., 10%, 20% or 30%.

48
YES MUTUAL FUND

VISION

To be a dominant player in the Indian MF industry recognized for its high levels of ethical and
professional conduct and a commitment towards enhancing investor interests.

SPONSOR

HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED (YES)

The sponsor of the YES MF is the housing development finance corporation Limited (YES). YES
was incorporated in 1977 as the first specialized housing finance institution in India. YES provides
financial assistance to individuals, corporate and developers for purchase or construction of
residential housing. As on December 31st, 2002, YESs cumulative loan disbursement are Rs 40,060
crore financing over 2.1 million units all over India.

PARTNERS

Standard Life Insurance Company of UK set up base in 1825. It is today the largest pension fund in
UK and the largest Mutual life assurance company in Europe. Standard Life Investment was set up
as a dedicated investment management company.

MANAGEMENT
YES Trustee Company Limited

A company incorporated under companies act 1956, is the trustee to the Mutual Fund vide the trust
deed dated June 8th, 2000 as amended from time to time. YES Trustee Company Limited is a wholly
owned subsidiary of YES Limited.

49
 YES ASSET MANAGEMENT COMPANY LIMITED (AMC)

It was incorporated under the companys act 1956, on December 10 th 1999 and was approved to act
as an asset management company for the MF by SEBI on July 3rd, 2000.
The registered office of the AMC is situated at Ramon house, 3 rd floor, H.T Parekh marg, 169
Bacbey Reclamation, Church gate, Mumbai-400020.

In terms of the joint participation agreement dated October 29th, 1999 entered between Housing
Development Finance Corporation Limited (YES) and standard life investment limited, 25.6% of
the paid up share capital of the AMC had been transferred by YES to the standard life assurance
company, the parent company of standard life investments limited, on April 17th, 2001.

Pursuant to the shareholders agreement dated October 17 th, entered between Housing Development
Finance Corporation Limited (YES) and Standard Life Investments Limited. 13.9% of the paid up
share capital of the AMC had been transferred by YES to standard life investments limited on
January 31st, 2002.
The present share holding pattern of the AMC is as follows
YES 50.1%
Standard life investments 49.9%

The AMC is managing many schemes as per the requirements of varied class of investors.
The AMC has obtained registration from SEBI vide registration no. PM/inp0000000506 dated
December 22nd, 2000 to act as a portfolio manager under the SEBI (portfolio managers) regulations,
1993. The certificate of registration is valid from January 1 st, 2003 to December 31st, 2003. The
AMC is also providing portfolio management /advisory services and such activities are not in
conflict with the activities of the mutual funds.

INVESTMENT PHILOSOPHY:
Consider above average return.
Conservative investment decisions.
Premium services.

50
 Essentially positioned as a No Surprise Fund

51
 YES MUTUAL FUND PRODUCTS

EQUITY FUNDS

YES Growth fund

YES Long term advantage fund
YES Index fund
YES Equity fund
YES Capital builder fund
YES Tax saver
YES top 200 funds
YES Core & satellite fund
YES Premier Multi-cap fund
YES Long term equity fund

BALANCED FUNDS

YES Childrens gift fund investment plan

YES Childrens gift fund savings plan
YES Balanced fund
YES Prudence fund

DEBT FUNDS

YES Income fund

YES Liquid fund
YES Gilt fund short term plan
YES Guilt fund long term plan
YES Short term plan
YES Floating rate income fund short term plan
YES Floating rate income fund long term plan
YES Liquid fund PREMIUM PLAN

52
YES Liquid fund PREMIUM PLUS PLAN
YES Short term plan PREMIUM PLAN
YES Short term plan PREMIUM PLUS PLAN
YES Income fund premium plus plan
YES High interest fund
YES High interest fund Short term plan
YES Cash management fund-Savings plan
YES Cash management fund Call plan
YES MF Monthly income plan Short term plan
YES MF Monthly income plan Long term plan
YES Cash management fund Savings plus plan
YES Multiple yield fund plan

53
54
 RESEARCH METHODOLOGY:

OBJECTIVE

When we talk of Research Methodology, we not only talk of the research methods but also consider
the logic behind the methods we use in the context of our research study and explain why we are
using a particular method or technique and why we are not using so that research results are capable
of being evaluated either by research himself or by others.

As the project is about the comparative study of YESs mutual funds with other respective
companies, so my objective is to compare the few products of YESs mutual fund with other
companies.

SAMPLE SIZE

The sample size refers to the number of employees selected from the heterogeneous group which
constitutes of doctors, engineers, working employees, housewives etc. It consists of 50 individuals.

SAMPLING

The sampling used is judgmental sampling. Judgmental sampling is a form of convince samplings in
which the population elements are selected based on the judgment of the researcher.

55
METHOD OF SAMPLING

Sampling Procedure: The samples were taken from the heterogeneous people, asking about
their financial goal and the kind of financial planning they want to have in order to achieve their
financial goal.

On the representation basis, the sample may be probability sampling or it may be non-probability
sampling.

Probability sampling: Probability sampling is also known as Random sampling or Chance

sampling. Under this sampling design, every item of the universe has an equal chance of inclusion
in the sample. (i.e., once an item is selected for the sample, it cannot appear in the sample again)

Non Probability sampling: Non Probability sampling is also known by different names such as
deliberate sample, purposive sampling and judgment sampling. In this type of sampling, items
remain supreme.

56
Type of research:

(1) EXPLORATORY RESEARCH

(2) DESCREPTIVE RESEARCH

Various different research methodologies was used in the study

Exploratory Research: Exploratory research was used in corporate and individual investors .It
seeks to discover new relationships. Exploratory research is a natural step. It is useful to find the
most likely alternatives, which are then turned into hypothesis. Exploratory research may also be
involved when the perceived problem is much less general .it is useful to develop the most
promising hypotheses. They define hypotheses, which are then tested by conclusive research

57
 DATA COLLECTION

In dealing with any real life problem it is often found that data at hand are inadequate and hence, it
becomes necessary to collect data that are appropriate. There are several ways of collecting the
appropriate data which differ considerably in context of money costs, time and other resources at the
disposal of the researcher.

The collection of data was done both from primary and secondary sources.

Primary Data
Primary data can be collected either through experiment or through survey. If the researcher
conducts an experiment, he observes some quantitative measurements, or the data, with the help of
which he examines the truth contained in his hypothesis, but in the case of survey, data can be
collected by any one or more of following ways.
By Demonstration.
Through personal interview.
Through telephone interview.
By questionnaires.

It was collected through the survey in which the questionnaire was prepared and was asked to
answer by the heterogeneous people. They were also personally interviewed. The data collected was
totally original and did not exist before. The data was flexible and reliable too.

Secondary Data
The data, which already exist in the nature, is called secondary data. It provides a slating point for
research and offers the advantage of low costs and ready availability. The historic literature and other
information regarding the company profile and strategic planning were taken from the secondary
sources like Economic Times, Business Today; investor India and through websites.

58
Sample size: The sample size chosen was 50 keeping in view the availability of time and the
convenience of the other people with whom the contacts were to be made.

59
 TOOLS

The tool used in the research is QUESTIONNAIRE.

What is a questionnaire?

A questionnaire a list of question to be asked from the respondents. It also contains a suitable space
where the answer can be offered a better questionnaire form, which has completed, by an interviewer

Why questionnaire?

Now a days questionnaire are commonly used to collect data that is specific are crucial to the
success of business venture. Without doubt questionnaire allows gathering information that cannot
be found any where, like from other secondary data such as Manuals, Books and internet resources.
That is why information collected is fresh and unique.

Here I have used close ended questionnaire in which the person has to only select the options which
he/she thinks is most suitable.

60
STEP-BY-STEP ANALYSIS AND INTERPRETATION OF ALL THE
QUESTIONS MENTIONED IN THE QUESTIONNAIRE

1. Annual income
This is the attempt to understand the sample populations financial conditions like under which
income slab individual invest the most.

a) <Rs.1lac b) Rs.1lac-Rs.3lacs c)>Rs.3lacs

Interpretation:
According to their responses, we analyzed that 85% sample population come under the slab of 1lac
to 3 lac only 15% sample population annual income is >3lacs who are interested in investment.

2. Where do you invest your savings?

(a) Savings (b) Real estate (c) Insurance (d) Mutual funds (e) Gold/Arts

Analysis and Interpretation:

61
The results show that the maximum percentage of the sample has their investments in savings a/c,
PPF & FDS. This clearly underlines the fact that most Indians are inclined towards investing in safe
investment avenues, which are backed by government and offer suitable returns over a period of
time. Thus, Indians are conservative investors by nature. 36% of the sample had invested in savings.
Only 17% of sample had invested in insurance sector and 34% in mutual funds. Most people who
invest in mutual funds are professionals, who have awareness about their benefits and are well
versed with these investments.

3. What percentage of the above do you invest in equities?

a) 10%-25% b) 25%-35% c) 35%-45% d) 45%-55% e) 55%&above

Interpretation:
44% sample invest 25%-35% in equities, 24% sample invest 10%-25% in equities, 16% sample
invest 35%-45% in equities, 12% sample invest 45%-55% in equities & only 4% sample invest 55%
& above in equities. This result shows that the investors are very careful while doing the investment
in equities.

4. What is the average time frame you normally envisage your

investments?
a) Less than 6 months
b) 6 months to 1 year
c) 1 year to 3 years
d) More than 3 years

Interpretation:

62
The results clearly highlight that a major proportion of the sample are long term investors and seek
the returns to grow over a period of time to give them suitable returns. People who are short-term
investors (5%) are basically those investors, who engage in quick returns from the equity markets.

Financial planning can be very useful to individuals who are long term investors as planning will not
only enhance the returns expected the risks can be diversified as well. Financial planners can help
the investors to cope with the various financial needs from time to time, if the investments are kept
for a long term

5. What do you measure while investing?

a) Time period

b) Return on investment

c) Tax benefits

Interpretation:
Most of the individual are interested in the returns from the investment no matter how that happens.
Many individual also give importance to the time duration till they have to invest. Very moderate
individuals are interested to take tax benefits.

6. How much return are you getting from your investment?

a) 5%-10%

b) 10%-20%

c) >20%

According to the 71% individual, good returns is the first priority for them. The individual (17%)
who comes under the income tax slab rate, measure tax benefit while doing the investment. Rest of
the investors measure the time period.

Interpretation:

63
59% sample are getting >20% return which is good in todays low bank investment rates situation,
only 41% sample are getting 10%-20% return from their investment.

7. What return are you expecting from your investments?

The purpose was to ask individuals in the sample about the average returns which they expect from
their investments.

a) 8%
b) 8- 15%
c) > 15%

Interpretation:
The study shows that more than 22% of the sample expects their returns to be between 8% - 15%.
The fact is that the fixed securities give a return of just about 10%. To get better results one has to
invest in riskier avenues. These avenues are equity, mutual funds etc. thus, as the expectations are
rising, more and more people are heading towards equity markets. The people who expect more than
15% are 78% of sample size, aggressive investors and represent the young professionals in the
sample. They are ready to take risks and thus, expect high returns on their investors. The attitude of
most of the investors is changing towards the financial markets due to robust growth and norms of
SEBI. There is a growing investor trust in the markets.

8. How much do you agree that systematic financial planning can help
you to achieve your financial goals in an efficient manner?
a) Strongly disagree
b) Disagree
c) Agree
d) Strongly Agree

Interpretation:

64
The results clearly state that 68% of the sample agrees that systematic financial planning can help
them to achieve their financial goals in an efficient manner. 18% of the sample strongly believes on
this statement. Only 13% of the people disagree to this statement but none of the people strongly
disagreed to this statement.

9. How do you manage your funds?

(a) Take helps of information available/by you.

(b) Do whatever my friends and family suggest

(c) No, I have a professional financial planner

Interpretation:
The results show that 27% of the sample do whatever their friends or family say or advice them
upon. Due, to the strong family values in India, people undertake advice from their family and
friends before investing in any asset. These people are usually aged between 40- 56 yrs in the
sample. This may be the helpful, but one must park their finances only when they have analyzed the
instrument efficiently, after knowing the pros and cons.

27% people in the sample rely on their own knowledge and they are usually professionals who are
well versed with the financial markets or are conservative in nature. 21% of the sample takes help
from information available on Internet and other literature. These are sound investors mostly
investing in equity markets. Websites of various financial services companies and newspapers are the
important sources of information.

The study shows that 46% of the sample is having a professional financial planner for their help. In
this 46%, 80% are servicemen, 10% are housewives, 5% are businessmen and 5% are senior citizens
who rely on the service of professional financial planner.

10. Are you aware of mutual funds?

The reason behind asking this question was that we want to know that how many people have the
knowledge about mutual funds besides the other investment tools.

a) Yes

b) No

65
Analysis and Interpretation:

The result is very positive approximately 90% respondents are aware about the mutual funds.

11. What is your perception about mutual funds?

The purpose behind asking this question was to understand what is an individuals understanding of
mutual funds. This will throw insights into the depth of his awareness about the mutual funds.

a) An investment vehicle to pool money from investors in a basket of securities, managed by

professional fund manger.

b) Term associated with UTI

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c) Instrument giving high returns with high risks

d) Speculative instrument for investment purposes

e) Safe vehicle for investment purposes.

Interpretation:

61% of the respondents think that mutual fund give high returns with moderate risk.

12. Do you own any mutual funds?

a) Yes

b) No

Interpretation:
100% sample population own mutual funds of different fund houses. This clearly highlights that the
awareness is increasing and many people know about mutual funds. The investments are also
increasing simultaneously, as the awareness.

13. If yes then please specify of which company?

a) YES b) ICICI c) DSPML d) HSBC e) RELIANCE f) OTHERS

Analysis and Interpretation:

The result clearly shows that most of the individual own the YES company mutual funds due to the
brand loyalty & good return.

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 14. Are
you

interested in knowing the investment product of mutual funds?

a) Yes

b) No

Interpretation:
The results clearly show that now days the investor becomes very smart they want to know the every
single step taken by the financial forest. According to our samples response 95% of the sample are
very keen in knowing the investment product of mutual fund.

15. Do you know about mutual funds as an investment/ tax saving

option?
(a) Yes

(b) No

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Interpretation:
The results clearly state that in present scenario 82% of sample are aware about the mutual funds as
an investment /taxes saving option (ELSS). Only 18% of sample is not aware about that. The
awareness about mutual funds is increasing due to investor education and efforts of government
bodies like SEBI and AMFI.

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FINDINGS

From the above observation it was found that most of the people are of the conservative view and
they generally invest their money in government securities like fixed deposit or post office or saving
accounts etc. It was not found in the people who are well educated and are working as professionals.
These people generally take advice from the financial advisor and invest their money into various
schemes of mutual fund and earn profits.

Most of the people are aware of mutual fund but the thing that goes behind their mind is the fear of
loosing their money. Each individual wants to earn money but it is their risk taking ability that
becomes the biggest hindrance during the time of investments. Most of the people relate mutual fund
with the UTI scam that happened many years ago. It is the after math affect of that scam that even
today small investor and generally income grade people hesitate to invest in mutual fund with the
fear of loosing it.

With the increase in the awareness about the mutual funds many people such as servicemen,
housewives, businessmen etc. are taking more interest in investing in mutual funds. The first and the
most favorite question that each individual ask is that what benefits and returns does mutual funds
will give to them. The second most favorite question that they ask is about the time duration till they
have to invest and how much. There are people that dont take advice from anybody and does their
investment on their own. When it was asked that what do they know about the mutual funds then a
satisfactorily answer was not found which shows the lack of knowledge amongst the people about
mutual fund.

Mutual fund is owned by almost all of them but the difference between them is the amount of money
they have invested and the time duration till the investment is made. While doing the studies about
the mutual funds it was found that most of the people owned YES mutual fund comparatively to
other companies. This is because of the brand name and the image that the company has created in
the minds of the people.

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 CONCLUSION

After doing my study and research on the project I found that YESs mutual funds are most popular
amongst the people due to their brand name and loyalty. With the increase in the awareness about
mutual funds, people are now a days showing interest towards it and are willing to invest in the
instruments of mutual funds. What is necessary is to provide proper knowledge and guidance to
them as people in India are conservative in nature.

In the research I found that the people who are well educated like doctors, retired engineers and IAS
etc. show more interest towards mutual funds because they have knowledge about it. On the other
hand people who are conservative like employees of some companies, housewives etc. spend their
money more in the government FDs and PPF (public provident fund). They are more cautious about
their money and dont know that they can earn more money just by investing in the mutual fund
instruments. But yes! When we provide the knowledge to them the same thing (mutual fund) become
very lucrative and fascinating to them too.

Mutual fund industry is growing on very fast as more and more people are becoming aware of it with
the passage of time. In the near future to come we can conclude that, most of the families will invest
their money in mutual funds.

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 QUESTIONNAIRE
NAME:

GENDER: Male ( ) Female ( )

ADDRESS:

OCCUPATION:

CONTACT NO.:

1. Annual Income
a) < Rs. 1 lac b) Rs. 1 lac Rs. 3 lacs c) > Rs. 3 lacs

2. Where do you invest your savings?

a) Saving a/c b) Real Estate c) Insurance d) Gold/ Arts e)
Mutual Funds

3. What percentage of the above do you invest in equities?

a) 10% 25% b) 25% - 35% c) 35% - 45% d) 45% - 55% e)
55% & above

4. What is the average time frame you normally envisage your investment?
a) < 6 months b) 6 months 1 year c) 1 year 3 years d) > 3 years

5. What do you measure while investing?

a) Time period b) Return on investment c) Tax benefits

6. How much return are you getting from your investments?

a) 5% - 10% b) 10% - 20% c) > 20%

7. What returns are you expecting from your investments?

a) < 8% b) 8% - 15% c) > 15%

8. How much do you agree that systematic financial planning can help you to achieve your financial
goals?
a) Strongly Disagree b) Disagree c) Agree d) Strongly Agree

9. How do you manage your funds?

a) Take help of information available/ by yourself
b) Do whatever my friends or family suggest
c) No, I have a professional financial planner

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10. Are you aware of Mutual Funds?
a) Yes b) No

11. What is your perception about mutual funds?

a) A Vehicle to pool money from investors in a basket of securities by professional manager.
b) Invest the money by mutually co-operative group
c) Term associated with UTI scam
d) High returns with moderate risks
e) Safe vehicle for investment purposes.

12. Do you own any mutual fund?

a) Yes b) No

13. If YES then please specify of which company?

a) YES b) ICICI c) DSPML d) HSBC e)
RELIANCE f) OTHERS

14. Are you interested in knowing the investment product of mutual funds?
a) Yes b) No

15. Do you know about mutual funds as an investment tax saving option?
a) Yes b) No

73
 BIBLIOGRAPHY

1) Kar Pratip; Natrajan, I and Singh, J.P. (2000) Survey of Indian

Investors, SEBI and NCAER

2) Financial management by I.M. PANDEY

3) Reid Brian K and Rea John D, (2003 July), Perspective, Mutual

Fund Distribution Channel and Distribution Costs, Investment
Company Institute

4) Bevis Charles, W, (2002 November), The Future of Mutual Fund

Industry, Financial Research Corporation

5) <http://www.researchandmarkets.com>

6) <http://www.bimaonline.com

7) Marketing research / Dr. Berry

8) /ajayshah/MEDIA/1997/eqprem.html>

9) <http://www.valueresearchonline.com>

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10) <http://www.amfiindia.com>

11) http://www.moneycontrol.com <http://moneycontrol.com>

12) <http://www.bseindia.com>

13) Primary Data from Questionnaires

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