Professional Documents
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A Study On Mutual Fund
A Study On Mutual Fund
ON
“MUTUAL FUNDS”
Submitted By
GHAZALA AFRIN
Roll No. 2001750700017
Submitted to
'
ABIMS, Aligarh
Management Studies, Aligarh hereby declare that the Mini Project Report on
Further, I also declare that I have tried my best to complete this report with
utmost sincerity and accuracy. If any mistake or error has crept in, I shall most
humbly request the readers to point out those errors or omissions and guide me
Ghazala Afrin
A mini project report is never the sole product of the person whose name
appears on the cover. There is always help, guidance and suggestion of many
in preparation of such a report. So, it becomes my duty to express my gratitude
towards all of them.
I am grateful to my parents for their loving and caring attitude and generous
support at every step of my life.
Last but not the least, a token of deep appreciation to my friends who stood
by my side at time of need. Other than above, there are many friends whom
I have failed to mention, have also been helpful to me.
Ghazal Afrin
TABLE OF CONTENT
11. CONCLUSION
Introduction of Mutual Fund
There are a lot of investment revenue available today in the financial market
corporate debenture and bonds where there is low risk but low return. He may
invest in stock of companies where there is high risk and the return are also
proportionately high. The recent trend in the stock market have shown that an
average-retail investor always lost with periodic bearish trend. People began
opting for portfolio managers with expertise in stock market who would invest
A mutual fund is a Common pool of money into which investors place their
ownership of the funds is thus joint or mutual the fund belonging to all
the amount of the contribution made by him or her bears to the total amount of
the fund.
Mutual fund are trusts, which accept saving from investors and invest the same
in diversified financial instruments in term of objective set out in the trust deed
with the view to reduce the risk and maximize the in income and capital
and the fund manager’s interest are to professionally managed the fund
financial assets. They cater mainly to the needs of the individual investor whose
means are small and to manage investors portfolio in a manner that provides a
Mutual funds are collective savings and investment vehicles where savings
of small (or sometimes big) investors are pooled together to invest for their
A mutual funds is an investment that pools your money with the money of
investors each own shares of the fund. The funds’ assets are invested
The risk trade off indicates that if investor is willing to take higher risk then
lower risk instruments, which would be satisfied by lower returns. For example,
if an investors option for bank FD, which provide moderate return with
minimum risk. But as he moves ahead to invest in capital protected funds and
the profit-bonds that give out more return which is slightly higher as compared
to the bank deposit but the risk involved also increase in the same proportion.
and liquidity. That doesn’t mean mutual funds investment risk free.
This is because the money that is pooled in are not invested only in debts funds
which are less risker but are also invested in the stock market which involves a
higher risk but can expect higher returns. Hedge fund involves a very high risk
volatile.
History of Mutual Funds in India: -
The mutual fund industry in India started in 1963with the formation
of Unit Trust of India, at the initiative of the government of India and Reserve
Bank. The history of mutual funds in India can be broadly divided into four
distinct phases.
First Phase-1964-1987:
Unit trust of India (UTI)was established on1963 by an Act of parliament.
It was setup by the Reserve Bank of India and functioned under the Regulatory
and administrative control of the Reserve Bank of India. In 1978 UTI was de-
link from the RBI and the Industrial Development Bank of India (IDBI) took
over the regulatory and administrative control in place of RBI. The first scheme
launched by UTI was unit scheme 1964. At the end of 1988 UTI had Rs.6,700
crores of asset under management.
1987 marked the entry of non UTI, public sector mutual funds set up by public
sector bank and Life Insurance Corporation of India (LIC)and General
Insurance Corporation of India (GIC).SBI Mutual fund was the first non UTI
mutual fund established in June 1987 followed by Canara Mutual fund
(Dec1987), Punjab National Mutual Fund (Aug1989), Indian Bank Mutual
Fund (Nov1989),Bank of India (June 1990),Bank of Baroda Mutual Fund
(Oct1992),LIC established its mutual fund in June 1989 while GIC had set up
its mutual fund in December 1990. At the end of 1993, the mutual fund industry
had asset under management of Rs.47,004 crores.
With the entry of private sector funds in 1993, a new era started in the Indian
mutual fund industry, giving the Indian investors a wider choice of fund
families. Also 1993 was the year in which the first mutual fund regulations
came into being, under which all mutual funds, except UTI were to be registered
and governed. The erstwhile Kothari Pioneer (now merged with Franklin
Templeton) was the first private sector mutual fund registered in July 1993.
The number of mutual fund houses went on increasing with many foreign
mutual funds setting up fund in India and also the industry has witnessed several
mergers and acquisitions. As the end of January 2003, there were 33mutual
fund with total assets of Rs.1,21,805 crores. The Unit Trust of India with
Rs.44,541 crores of assets under management was way ahead of other mutual
funds.
Forth Phase-Since February 2003:
In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI
was bifurcated into two separate entities. One is the specified undertaking of
the Unit Trust of India with assets under management of Rs.29,835 crores at
assured return and certain other schemes. The specified undertaking of Unit
Trust of India, functioning under an administrator and under the rules framed
by Government of India and does not come under the purview of the mutual
fund regulations.
The second is the UTI Mutual Fund Ltd. Sponsored by SBI, PNB, BOB and
LIC. It is registered with SEBI and function under the mutual fund regulations.
With the bifurcation of the erstwhile UTI which had in March 2000 more than
Rs. 76,000 crores of assets under management and with the settings up of a UTI
Mutual Fund, confirming to the SEBI Mutual Fund Regulations, and with the
recent mergers taking place among different private sector funds, the mutual
fund industry has entered its current phase of consolidated and growth. As at
the end of September 2004 there were 29 funds, which manage assets of
1.Portfolio Diversification:
Each investor in the fund is a part owner of all the Funds’ assets, this enabling
him to hold a diversified investment portfolio even with a small amount of
investment that would otherwise requiring big capital.
2.Professional Management:
Even if an investor has a big amount of capital available to him, he benefits
from the professional management skills brought in by the fund in the
management of the investor’s portfolio. The investment management skills,
along with the needed research into available investment options, ensure a
much better return than what an investor can manage on his own. Few investors
have the skill and resources of their own to succeed in today’s fast moving,
global and sophisticated markets.
3.Reduction/Diversification of Risk:
When an investor invests directly, all the risk of potential loss is his own,
whether he places a deposit with a company or a bank, or he buys a share or
debenture on his own or in any other from. While investing in the pool of funds
with investors, the potential losses are also shared with other investors. The risk
reduction is one of the most important benefits of a collective investment
vehicle like the mutual fund.
5.Liquidity:
Often, investors hold shares or bonds they cannot directly, quickly and easily
sell. When they invest in the units of funds, they can generally cash their
investment any time, by selling their units of funds if open ended, or selling
them in the market if the fund is close end. Liquidity of investment is clearly a
big benefit.
7.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 an occasional rate of 10.5%.
8.Choice of schemes:
Mutual Fund offer a family of schemes to suit your varying needs over a life
time.
9.Well Regulated:
All mutual fund is registered with SEBI and they function within the provisions
of strict Regulations designed to protect the interests of investors. The operation
of mutual funds is regularly monitored by SEBI.
10.Transparency:
You get regular information on the value of your Investment in addition to
disclosure on the specific investment made by your scheme, the proportion
invested in each class of assets and the fund manager’s investment strategy and
outlook.
Disadvantages of mutual funds: -
5.No control:
Unlike picking your own individual stocks, a mutual fund puts you in the
passenger seat of somebody else car.
6.Dilution:
Mutual funds generally have such small holding of so many different stocks
that insanely great performance by a fund top holding still doesn’t make much
of a difference in a mutual fund’s total performance.
7. Buried costs:
Many mutual funds specialize in buying their costs and in hiring salesman who
do not make those costs clear to their clients.
Types of mutual funds schemes
in India: -
Wide variety of mutual fund schemes exits to cater to the needs such as financial
position, Risk tolerance and return expectations etc. thus mutual funds has
variety of flavors, being a collection of many stocks, an investor can go for
picking a mutual fund might be easy. There are over hundreds of mutual funds
schemes to choose from. It is easier to think of mutual fund in categories,
mentioned below.
A. By Structure-
1. Open ended schemes:
An open-ended funds is one that is available for subscription all through the
year. These do not have a fixed maturity. Investors can conveniently buy and
sell units at net assets value (NAV) related prices. The key features of open-
ended schemes are liquidity.
3.Interval schemes:
Interval schemes are that Schemes, which combines the features of open
ended and close ended schemes. The units may be traded on the stock
exchange or may be open for sale or resumption during pre-determined
interval at NAV related prices.
B. By nature-
1. Equity fund:
These funds invest a maximum part of their corpus into equities holdings.
The structure of the fund may vary different schemes and the fund manager’s
outlook on different stocks. The equity funds are sub classified depending
upon their investment objective, as follows:
Equity investment are meant for a longer time horizon; thus, equity funds
rank high on the risk return matrix.
2.Debt funds:
The objective of the fund is to invest in a debt paper. Government
authorities, private companies, bank and financial institutions are some of
the major issuer of debt papers. By investing in debt instruments, these funds
ensure low risk and provide stable income to the investors. Debt funds are
further classified as:
Short term plans (STPs): meant for investment horizon for three
to six months. These funds primarily invest in short term paper like
certificate of deposit (CDs) and commercial papers (CPs). Some
portion of the corpus is also invested in corporation debenture.
3. Balanced fund:
As the name suggests they are a mix of both equity and debt funds.
They invest in both equities and fixed income securities, which are in line with
pre-defined investment objective of the scheme. These schemes aim to provide
investors with the best of both the worlds. Equity part provides growth and the
debt part provides availability in returns.
C. By investment objective:
1. Growth schemes:
Growth schemes are also known as equity schemes. The aim of these
schemes is to provide capital appreciation over medium to long term. These
schemes normally invest a major part of their fund in equities and willing to
bear short term decline in value for possible future appreciation.
2.Income schemes:
Income schemes are also known as debt schemes. The aim of these schemes
is to provide regular and steady income to investors. These schemes
generally invest in fixed income securities such as bonds and corporate
debentures. Capital appreciation in such schemes may be limited.
3.Balanced schemes:
Balanced schemes aim to provide both growth and income by periodically
distributing a part of the income and capital gain they earn. These schemes
invested in both share and fixed income securities, in the proportion indicates
in their offer documents (normally 50-50).
Loads funds- a load funds are one that charge a commission for entry or
exit. That is, each time you buy or sell unit in the fund, a commission will
be payable. Typically, entry and exit load range from 1% to 2%. It could be
worth paying the load, if the fund has a good performance history.
No-load funds- A no load funds are one that doesn’t charge a commission
for entry or exit. That is no commission is payable on purchase and sale of
unit in the fund. The advantage of a no-load funds is that the entire corpus
is put to work.
D. Other schemes:
Tax savings schemes: Tax savings schemes offer tax
rebates to the investors under tax law prescribe from time to time. Ye
under SEC.88 of the Income Tax Act, contribution made to any equity
linked Savings scheme (ELSS) are eligible for rebates.
software, fast moving consumer goods (FMCG), petroleum stocks etc. The
sector/industries. While these funds may give higher returns, they are riskier
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 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 investment is divided into units and the value of the units will
be reflected in the Net Assets Value or NAV of the units. NAV is the market
value of the assets of the scheme in the minus it’s liabilities. The per unit NAV
is the net value assets of the scheme divided by the number of units outstanding
on the valuation date. Mutual fund companies provide daily net assets value of
their schemes to their investors. NAV is important as it will determine the price
at which you buy or redeem the unit of the scheme. Depending on the load
structure of the scheme, you have to pay entry or exit load.
Sponsor is defined under SEBI regulations as any person who, acting alone or
in combination of another corporate body established a mutual fund. The
sponsor of the mutual fund is akin to the promotor of a company as he gets the
fund registered with SEBI. The sponsor forms a trust and appoint a board of
trustees. The sponsor also appoints the assets management company as fund
managers. The sponsor either directly or acting to through the trustee will also
appoint a custodian to hold fund assets. All these are made in accordance with
the regulation and guidelines of SEBI.
The fund them invites investors to contribute their money in common pool, by
scribing to units issued by various schemes established by the trust as evidence
of their beneficial interest in the fund.
It should be understood that the fund should be just off passed through vehicle.
Under the Indian trust act the trust of the fund has no independent legal capacity
itself, rather it is the trustee or the trustees who have the legal capacity and
therefore all acts in relation to the trust are taken on its behalf by the trustees.
In legal parlance the investor on the unit holder are the beneficial owner of the
investment held by the trusts, even as these investments are held in the name of
the trustees on a day-to-day basis. Being public trust, Mutual fund can invite
and number of investors as beneficial owner in their investment schemes.
Trustees:
Trust is created through a document called the trust deed that is executed by the
fund sponsor in favors of the trustees. The trust and the mutual fund managed
by a board of trustees, a body of individuals or a trust company-a corporate
body. Most of the funds in India are managed by board of trustees. While the
board of trustees are governed by Indian trust act, where the trust our corporate
body, it would also require to complete with the companies Act 1956. The board
of the trust company, as an independent body act as a protector of the unit holder
interest. The trustee does not directly manage the portfolio of securities. For
this specialist function, the appoint the asset Management company. They
ensure that the fund is managed by ht AMC as per the defined objective and in
accordance with the trust deeds and SEBI regulations.
Bankers:
A Fund activity involve dealing in money on a continuous basis primarily with
respect to buying and selling units, paying for investment made, receiving the
proceeds from sale of the investment and discharging its obligation towards
operating expenses. Thus, the funds banker plays an important role to determine
quality of service that the fun give the timely delivery of remittance etc.
Transfer Agents:
Transfer agents are responsible for issuing and redeeming units of mutual fund
and provide other related services such as preparation of transfer document in
updating investor records. A Fund may choose to carry out its activity in house
and charge the scheme for the services at a competitive market rate. Where an
outside transfer agent is used, the fun investor will find the agent to be an
important interface to deal with, since all the investor services that a fund
provide are going to be dependent on the transfer agent.
SEBI Regulations:
As far as mutual fund is concerned, SEBI formulate policies and regulate
the mutual fund to protect the interest of investors.
SEBI notified regulation for the mutual fund in 1993. Thereafter, mutual
fund sponsored by private sector entities are allowed to enter the capital
market.
The regulation was fully revised in 1996 and have been amended
thereafter from time to time.
SEBI has also issued guideline to the mutual fund from time to time to
protect the interest of investors.
All Mutual funds whether promoted by public sector or private sector
entities including those promoted by foreign entities are governed by the
same set of regulation. The risk associated with the scheme launched by
the mutual fund sponsor by these entities are of similar type. There is no
distinction in regulatory requirement for these mutual funds and all are
subjected to monitoring and inspection by SEBI.
SEBI regulation required at least two third of the director of trustee
company or board of trustees must be independent i.e. this should not be
associated with the sponsor.
Also 50% of the director of AMC must be independent. All mutual fund
is required to be registered with SEBI before they launch any schemes.
Further SEBI regulation, inter-alia, stipulate that MFs cannot guarantee
return in any scheme and that each Scheme is subjected to 20:25 condition
[i.e. minimum 20investors per scheme and one investor can hold more
than 25%stake in the corpus in that one scheme]
Also, SEBI has permitted MFS to launch schemes overseas subject
various registration and also to launch scheme liked real estate, options
and future, commodities etc.
Association of Mutual Fund in India (AMFI):
With the increase in mutual fund players in India, a need for mutual fund
association in India was generated to function as a nonprofit organization.
Association of mutual fund in India (AMFI) was incorporated on 22 nd August
1995.
AMFI is an apex body of all assets management companies (AMC) which has
been registered with SEBI. Till date all the AMCs are that have launched
mutual fund scheme are its members. Its functions under the supervision and
guideline of its board of directors.
Association of mutual fund India has brought down the Indian mutual fund
industry to a professional and healthy market with ethical lines enhancing and
maintaining standard. It follows the principle of both protecting and promoting
the interest of mutual funds as well as their unitholders.
The association of mutual funds of India worked with 30 register AMC of the
country. It has certain define objective which juxtapose the guidelines of its
the activity of mutual fund and assets management. The agencies who are
AMFI interact with SEBI and work according to SEBI guideline in the
the Reserve Bank of India and other related bodies on matters relating to
At last but not the least association of mutual fund of India also
In 1963, the day the concept of mutual fund took birth in India. Unit Trust of
India invited investors or rather to those who believe in, to park their money in
UTI Mutual Fund.
For 30 years it goaled without a single second player. Through the 1988 years
saw some new mutual fund companies, but UTI remained in Monopoly
position.
The Performance of mutual funds in India in the initial phase was not even
closer to satisfactory level. People really understood, and of course investing
was out of questions. But yes, some 24 million shareholders were
accommodated with guaranteed high return by the beginning of liberalization
of the industry in 1992. This good record of UTI became marketing tool for
new entrants. The expectations of investors touched the sky in profitability
factor. However, people were miles away from the preparedness of risk factor
after the liberalization.
The net assets value (NAV) of mutual In India decline when stock prices
started falling in the year 1992. Those days, the market regulation did not allow
portfolio shift into alternative investment. There was rather no choice apart
from holding the cash or to further continue investing in shares. One more thing
to be noted, things only closed-end fund was floated in the market, the investors
dis invested by selling at a loss in the secondary market.
The performance of mutual fund in India suffered qualitatively. The 1992 stock
market scandal, the losses by this investment and of course the lake of
transparent rules in the whereabout rock confidence among the investors.
Partially owing to a relatively week stock market performance, mutual fund has
not yet covered, with funds trading at an average discount of 1020 % of their
net assets value.
The securities and exchange board of India (SEBI) came out with
comprehensive regulation in 1993 which define the structure of mutual fund
and assets management companies for the first time.
The measure was taken to make mutual fund the key instrument for long-term
saving, the more the variety offer the quantitative will be investors.
Several private sector Mutual funds where launch in 1993 and 1994. The share
of the private players has rising rapidly since them. Currently there are 34
Mutual Fund organization in India managing 102000 crores.
At last to mention, as long as mutual fund companies are performing with lower
risk and higher profitability within a short span of time, more and more people
will be inclined to invest until and unless they are fully educated with the do’s
and don’ts of mutual fund.
Mutual fund industry has seen a lot of changes in past few years with
multinational companies coming into the countries. Bringing in their
professional expertise in managing funds worldwide. In the past few months
there has been a consolidation phases going in the mutual fund industry in India.
Now investor have a wide range of scheme to choose from depending on their
individual profiles.
Mutual Fund Companies in India:
The concept of mutual fund in India date back to the year 1963. The era between
1963 and 1987 mark the existence of only one mutual fund company in India
with Rs.67 assets under management (AUM), by the end of its Monopoly era,
the unit Trust of India (UTI). By the end of the 80s decade, few other mutual
The new in trees of mutual fund companies in India where SBI Mutual Fund,
can bank Mutual Fund, Punjab National Bank Mutual Fund, Bank of India
Mutual Fund.
the end of 1993, the total AUM of industry was Rs.470.04 bn. The private sector
fund started penetrating the fund families. In the same year the first Mutual
Fund regulation came into existence with re-registration all mutual fund expects
Kothari Pioneer was the first private sector mutual fund company in India
which has now merged with Franklin Templeton. Just after 10 year with private
sector player penetration, total assets Rose up to Rs. 1218.05 billion. Today
In very next month, UTIMF head regained it top position as the largest fund
house in India.
Now, according to the current pegging order and the date release by association
of mutual fund in India (AMFI), the Reliance Mutual Fund, with a January end
AUM of Rs. 39020 crores have become the largest mutual fund in India.
On the other hand, UTIMF, with an AUM of Rs. 37,535 crores have gone to
second position. The prudential ICICI MF has believed to the third position
with the AUM of rs.34,746 crores.
It happened for the first time in last one year that a private sector mutual fund
house has reached to the top slot in term of assets under management. In the
last one year to January, AUM of the Indian fund industry had risen by 64% to
rupees 3.39 lakh crore.
Reliance MF maintain its top position as the largest fund house in the country
with Rs.74.25 billion jumps in AUM to Rs.883.87 billion at April End.
The second largest fund house HDFC MF gained Rs. 59.24 billion in its AUM
at Rs.638.80 billion. ICICI prudential and state-run UTI MF added Rs.46.16
billion respectively to their assets last month. ICICI prudential AUM stood
Rs.560 49 billion at the end of April, while UTI MF had assets worth Rs. 544.89
billion.
RELIANCE MUTUAL FUNDS Vs UTI
MUTUAL FUNDS: -
Reliance Mutual fund was established as trust under Indian trust act 1882. The
sponsor of RMF is Reliance capital limited and Reliance capital trustees
company limited is the trustees. It was registered on June 30, 1995 as Reliance
capital mutual fund which was changed on March 11 2004. Reliance Mutual
Fund was form for launching of various scheme under which unit are issued to
the public with the view to contribute to the capital market and to provide
investor to opportunities to make investment in diversified and securities.
RMF is one of India’s leading Mutual Fund, with average assets under
management (AAUM) of Rs.88,388 crores (AAUM for 30 th April 09) and an
investor base of over 71.53lacs. Reliance Mutual Fund, a part of Reliance-Anil
Dhirubhai Ambani group, one of the fastest growing mutual funds in the
country offers investors of well-rounded portfolio of products to meet varying
investor requirement and has a presence in 118 cities across the countries.
The sponsor, the trustee and the investment manager are incorporated under the
companies Act 1956.
Vision statement-
“To be a globally respected wealth creative with an emphasis on customer
care and a culture of good corporate governance.”
Mission statement-
To create and nature world-class high-performance environment I’m at
delighting our customer.
To take such step as may be necessary from time to time to realize the
effects without any limitation.
Schemes: -
A. Equity/ growth schemes-
The aim of growth Fund 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 risk.
Growth schemes are good for investor having a long-term Outlook
seeking appreciation over a period of time.
Tax benefit:
Investment up to Rs 100000 by the eligible investor in this fund
would enable you to avail the benefit under section 80c (2) of the
Income Tax Act 1961.
Dividend received will be absolutely tax free
The dividend distribution tax for equity scheme is also nil.
8. Reliance Growth Fund (Open-Ended Equity)
The primary investment objective of the scheme is to achieve long
growth of capital by investment in equity and equity related securities
through a research-based investment approach.
B. Debt/income schemes:
The aim of the income fund is to provide regular and steady income of
investors. Such scheme generally invests in fixed income securities such as
bonds, corporate debenture, government securities and money market
instruments. Such funds are less risky compared to equity scheme. These funds
are not affected because of fluctuation 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 rate of the countries. If
the interest rates fall, NAVs of such funds are likely to increase in short run and
vice versa. However, long-term investors may not bother about this fluctuation.
1. Reliance Monthly Income Plan
(As open-ended fund, monthly income is not assured and is subject to the
availability of distribution surplus) the primary investment objective of
the scheme is to generate regular income in order to make regular
dividend payment to unitholders and the secondary objective is growth of
capital.
2. Reliance Gilt Securities Fund-Short-Term Gilt Plan and Long-Term
Gilt Plan
(Open ended government securities scheme) the primary
objective of the scheme is to generate optimal credit risk free return by
investing in a portfolio of securities issued and generated by the central
government and the state government.
3. Reliance Income Fund
The primary objective of the scheme is to generate optimal return
consistent with moderate level of risk. This income may be completed by
capital appreciation of the portfolio. Accordingly, investment shall
predominantly made in debt and money market instruments.
4. Reliance Medium Term Fund
The primary investment objective of the scheme is to generate regular
income in order to make regular dividend payment to unit holder and the
secondary objective is growth of capital.
Unit Trust of India was created by UTI act passed by the parliament in 1963.
For more than two digit it remains the sole vehicle for investment in the capital
market by the Indian citizens. In mid-1980 public sector bank where allowed to
open mutual funds. The real vibrancy and competition in MF industries came
with the setting up of the regulations SEBI and its laying down the MS
regulation in 1993. UTI maintain its preeminent place till 2001, when a massive
decline in the market indices and negative investor sentiment after Ketan
Parekh scheme created doubt about the capacity of UTI to meet its obligation
to the investors. This was further compounded by two factors: namely its
flagship and largest scheme us-64 was sold and repurchase not at entrance and
NAV but an artificial price and it assured return scheme had promised return as
high as 18 % over a period going up two decades.
In order to distance government running a mutual fund the ownership was
transferred to four institution namely SBI, LIC, BOB and PNB, each owing
25%. UTI lost its market dominance rapidly and by end of 2005, when the new
share holder actually paid the consideration money to government its market
share had come down to close to 10%.
Vision:
To be the most preferred Mutual Fund
Mission:
The most trusted brand admired by all stakeholders.
The largest and most efficient money manager with global
presence
The best in class customer service provider
The most preferred employer
The most innovative and best wealth creator
A socially responsible organization known for best corporate
governance
Bank of Baroda
Schemes:
A. Equity fund
1. UTI Energy Fund (Open Ended Fund)
Investment will be made in stocks of those companies
engaged in the following are:
3. UTI Sunders
To provide investment return that before expenses closing
cross bonded to the performance and belt of the basket of
securities underlying the S&P CNX Nifty index.
C. Assets Fund
UTI Variable Investment Scheme
UTI VIS ILP is an open-ended scheme with the objective of
providing the investor with a product that would enable them to
diversify their ways through a suitable allocation between debt
and equity as its classes and thereby generate superior risk
adjusted return through a dynamic asset allocation process
D. Balanced fund
1. UTI Mahila Unit Scheme
To invest in a portfolio of equity or equity related securities
and debt and money market instruments with a view to
generate reasonable income with moderate capital
appreciation. The assets allocation will be debt, minimum
70% maximum 100% equity, minimal 0% maximum 30%.
Financial experts believe that the future of mutual fund in India will be very
bright. It has been estimated that by March end of 2021 the mutual fund industry
of India will be reach Rs 22.26 trillion to Rs31.43trillon taking into account that
total assets of the Indian commercial bank.
Looking at the past development and combine it with the current trend it can be
concluded that the future of mutual fund in India has lot of positive things to
offer to its investor.
Conclusion:
The Stock market has been rising for over three year now. This in turn has not
only protected the money invested in funds but also to help grow this
investment.
This has also instilled greater confidence among fund investors who are
investing more into the market through the MF route than ever before.
Reliance India mutual fund provides major benefit to a common man who want
to make his life better than previous.
India's largest Mutual Fund UTI still control nearly 80% of market. Also, the
mutual fund industry as a whole get less than 2% of household savings against
the 46% that go into Bank deposit. Some fund managers say this only indicate
that sector potential. If mutual fund succeeds in chipping away at Bank deposit,
even a triple digit growth is possible over the next few years.