study of the growth of the mutual funds

Ambalika institute of management & technology
Summer Training Report
On
“STUDY OF THE GROWTH OF THE MUTUAL FUNDS”
AT
ESCORTS MUTUAL FUNDS , LUCKNOW
Prepared By
As a Partial Fulfillment of M.B.A Programme of U.P.T.U
AMBALIKA INSTITUTE OF MANAGEMENT & TECHNOLOGY,
MOHANLALGANJ, LKO
1. Certificate
2. Declaration

3. Preface
4. Acknowledgement
5. Executive Summary
TABLE OF CONTENTS
6. Introduction
 Industry profile
 Company profile
 About us
 Investment philosophy
 History
 Introduction of mutual fund
 Types of mutual fund
 Why should invest in mutual fund
 Understanding & managing risk
 How to invest in mutual fund
 Your right as mutual fund unit holder
 Benefits of mutual fund
 Drawbacks of mutual fund
7. Mutual fund in India
8. Performance of mutual fund in India
9. Future of mutual fund in India
10.Product available of mutual fund in escorts
11.Top ten reason to invest in mutual fund
12.Introduction of different competitive company
13.Research methodology
14.Techniques & instrument used
15.Analysis
16.Findings
17.SWOT analysis
18.Conclusion
19.Recommendation
20.Bibliography
21.Annexure
CERTIFICATE

This is to certify that the project report study of mutual funds in financial market
TOWARDS “GROWTH OF MUTUAL FUNDS” submitted to AMBALIKA INSTITUTE OF MANAGEMENT
& TECHNOLOGY, MOHANLALGANJ by APURVA SINGH in partial fulfillment of the requirement for the
award of MASTERS IN BUSINESS ADMINISTRATION is an original work carried out by the below
mentioned student under the guidance and supervision of the below mentioned guide. This work has not been
submitted anywhere else for any degree/diploma under my signature. The original work was carried out during
15TH
JUNE TO 30TH
JULY 2010 in ESCORTS MUTUAL FUNDS
Signature of the student :
Name of the student: : APURVA SINGH
Dated : 15TH
JUNE TO 30TH
JULY 2010
Signature of the Industry Guide :_______________________
Name of the industry Guide : Mr. GHANSHYAM PANDEY
Designation of the Industry Guide : A.S.M.(area sales manager)
E-mail Address : ghanshyamp@escortsmutual.com
Mailing Address : www.escortsmutual.com
Dated :__________________
Seal/Stamp of the Organization
Signature of the faculty supervisor :________________
Name of the faculty supervisor :Prof. ASHISH SHARMA
Dated : ___________
DECLARATION

I hereby declare that this project on “STUDY OF THE GROWTH OF THE MUTUAL FUND ”
has been prepared by me during the year 2009-2010 as a partial fulfillment of MBA course of
Ambalika Institute of Management & Technology, Lucknow. This project report has not been
submitted to any other university or institution for award of any degree or diploma so far.
Signature of the student
[APURVA SINGH]
Roll No. 0936370012
PREFACE

The customers are very important and play a very crucial role in any process of finance &
marketing. Today the customers are kings of the market because the customer’s loyalty and
customer’s preference are built by the products and services offered to the customers and they
seek for more benefits and money’s worth for the amount they spend. But these services and
products are delivered to the end customers only by the Brokers who work as the end medium in
the whole chain of sales. That is where the concept of Brokers preference and Brokers behavior
comes because the Brokers make the marketers rethink about designing their services; because of
the important role they play in the whole chain. They have to think about the market strategies,
Consumers behavior & taste etc also.
Many marketers are smart enough to understand Consumer needs, wants and demands and
perform beyond their expectation i.e. they delight them. it provides them growth , profitability
and creativity with lot of inventions.
ACKNOWLEDGEMENT

It is my pleasure to extend my deep gratitude to Senior Lect.ASHISH SHARMA, Faculty
Guide, AMBALIKA INSTITUTE OF MANAGEMENT AND
TECHNOLOGY,MOHANLALGANJ,LUCKNOW for the help, cooperation and guidance
received from her throughout the tenure of this Summer Internship Project .
I would like to take this opportunity to thank all other faculty members at Ambalika Institute of
Management & Technology, Mohanlalganj, Lucknow, for their cooperation.
I will also like to thank Mr. Ghanshyam Pandey, Area sales manager for giving me an
opportunity to do the “Summer Internship” in his esteemed organization, Escorts Asset
Management Ltd.
I am deeply indebted to Mr. Brijesh Srivastava, branch Manager of
Escorts mutual funds, Hazaratganj and also my company project guide, for providing amen tally
stimulating environment throughout the project period.
I am grateful to Mr. Avinash Tivari, branch manager of escorts securities , for there guidance and
help during the internship. Their valuable and constructive suggestions at many difficult
situations are immensely acknowledged.
Finally I would like to thank all the staff of Escorts Asset Management Ltd., Hazartganj Branch,
who helped me complete my project successfully.
Apurva singh
AIMT, LUCKNOW

EXECUTIVE SUMMARY
The project is framed mainly to know about the consumer perception for investment
in various mutual funds schemes in various mutual fund’s companies.
We have also done the marketing research on:
1) What part of income do they invest?
2) How do they respond to various investment opportunities?
3) What are their objectives of investment?
4) What is their investment behavior?
5) Do they invest in mutual funds, if no then reasons for the same?
At last interpretation and analysis were made and we came to the conclusion and
based on them the recommendation were framed.

INTRODUCTION

INDUSTRY PROFILE
Financial market are the arrangement that provide facilities for buying and selling of financial
claims and services. These are classified in to money market and capital market .Both of them
perform the same function of transferring resource to the producers but differ in the period of
maturity of financial assets in these markets.
Money markets deals in a short term claims (with a period of maturity of one year or less) and
capital market do so in the long term (maturity period above one years) claims. The two most
important constituents of the money market in India are the modern bank and the indigenous
banker..Modern banking became and effective force only after 1910.Before that the indigenous
bankers dominated the scene. Until 1860, they finance trade , acted as bankers to the company
govt., collected revenue on the behalf of the govt., managed
The govt. ,managed the transferred of fund from one center to another and some of them had
monopoly as mint masters and money changers. In later years there direct contact with the
government as financers declined. There of the modern banking business in India was negligible
till the beginning of the present country . During the second half of the 18th
century , agency
house used to perform banking business as an adjunct to their main business.
The foundation of modern banking was laid during the early part of the 19th
century
establishment of 3 Presidency Bank Madras (1846) . During the second half of the 19th
century
some exchange banks and India joint stock banks were also setup .In 1900 there were 9 Indian
joint stock bank and 3 Presidency Banks
The slow rate of growth of the banking business till the beginning of the present century was due
to
 The high rate of failure of banks as most of them had been created in a
speculative rush.
 Stagnant economic condition during this period .
 Decline in price.
 The passing of the century Act , 1861 which took away the power of the bank to issue notes.
During the half of the present century the banking system was progressing rapidly. Until the
depression of 1930s,the rate of economic progress was quite high in the period .The world was
contributed to raising the level of economic activity and the monetary resources in the economy

.Although the Bank of India(BOI) functioned as a quasi-Central Bank of India (RBI) was
established .after the establishment of RBI , the BOI use to act as the agent of the RBI in places
where the RBI did not have any offices of its own .Even after 1935 ,The BOI continued to act as
a banker for the other banks. All these functions are now performed by the SBI. Around 1950,
the banking system in India comprised of the RBI, BOI, Cooperative banks, Exchange banks and
Indian joint stock banks. Indian joint stock banks were divided in to 4 classes according to the
amount of paid – up capital and reserve held by the :-
 Class A had Rs 5lakhs and over.
 Class B had Rs.1lakhs and over but less than Rs.5lakhs.
 Class C had Rs.50,000 and over but less than 1lakhs.
 Class D had less than Rs. 50,000
After the criterion of the RBI , banks were divided into scheduled an nonscheduled banks. Class
A bank became scheduled banks and known as class A1 banks while other came to be known as
class A2 banks. Class A1 banks used to invest less in government securities than did the BOI.

COMPANY PROFILE
ESORTS MUTUAL FUNDS Plc
Type : Private Ltd. Company
Founded : 15 April 1996
Headquarters : NEW DELHI
Key people :
Industry : Asset Management
Products : Mutual funds, Securities.
Revenue : 35,478 crore(2010)
Net income : 6.1-6.2crore (2010)
Website : www.escortsmutual.com
Ms. Ritu Nanda Prof. Asish K. Bhattacharyya
Ms. Nitasha Nanda Prof. S.C. Kuchhal
Mr.P.C.Gupta Mr. Lalit K. Khanna

About us !
Escorts Mutual Fund is the premier Asset Management Company offering Investment products
across a broad cross-section of Financial Assets covering both Debt and Equity. It was registered
with Securities and Exchange Board of India (SEBI) in 1996.The Company is the one of the
earliest entrants into the Indian Mutual Funds Industry.
It is associated with Escorts Group - with Escorts Limited as its Flagship Company, which is
amongst India's leading corporations, operating in diverse fields of Agric-Machinery,
Construction and Railway Ancillaries and Financial Services. The genesis of Escorts goes back
to 1944 and over the decades, Escorts has surged ahead and evolved into one of the India's
leading conglomerates. The group holds a great repute and trust amongst people.
Escorts Mutual Fund has been established as a trust in accordance with the provisions of the
Indian Trusts Act,1882 and the Deed of Trust dated 15th April,1996 has been registered under
the Indian Registration Act,1908.
Backed by one of the most trusted and valued brands in India, Escorts Mutual Fund has earned
the trust of lakes of investors with its consistent performance and excellent service.
Escorts Mutual Fund, has made impressive gains by constantly increasing its retail client base
over the years. We at Escorts Mutual Fund aim to provide best risk-adjusted returns to our
clients. The Escorts philosophy is centered on seeking consistent, long-term results. It aims at
overall excellence, within the framework of transparent and rigorous risk controls

INVESTMENT PHILOSPHY:
We believe in a simple philosophy that different people have different needs. That
is why our investment strategies and products are geared towards fulfilling the
needs of our investors. e derive our satisfaction from the fulfillment of the
expectations of those special people, who have exposed faith in us and have
invested their savings in our schemes.
The following fundamentals define and guide our investments:
A Value-Based Approach
We believe in the concept of value investing and look for a consistent track-record
and the inherent fundamental soundness of the entities we invest our in. We also
give weight age to the future business prospects and the sustainability of the
earnings .Such a value based investment approach ensures that the investors money
grows with us.
Emphasis on Research
Our extensive research on the industry, the corporate and the money markets helps
us in planning our investments and formulating our strategies in a wise manner. In
periods of uncertainties and fluctuating market trends, the research work gives
substance to strategies and ensure their soundness.
Discipline
In markets that are characterized by cyclical booms and busts, it is vey essential to
be cautious and prudent. That is why, we believe in well thought out and well
planned investments and in having a healthy suspicion of volatile market situations.
We need to do all this because we feel that we have a responsibility towards our
investor

Incorporated on 9 Feb.'87 as Escorts Leasing and Financial, its name was changed to Escorts
Financial Services in Dec.'91 and ultimately to Escorts Finance Ltd. Promoted by Escorts, the
company is primarily engaged in purchase, lease financing, money market operations, merchant
banking and portfolio management activities. It is registered with the SEBI as a category-I
merchant banker. The company provides hire-purchase / lease finance to corporate / individual
clients for acquisition of light and heavy commercial vehicles, cars, two-wheelers, textile
machinery, packaging machines, computers and consumer durables. In 1992,
the company launched its portfolio management scheme, discretionary and non discretionary. In
Jan.'95, it came out with a public issue to significantly increase its hire purchase and leasing
activities and to diversify into other areas of financial services. Aggregate disbursement for hire
purchase and leased assets was Rs 2.30 cr during 1995-96. Company acquired 30% of the equity
capital of Escorts Consumer Credit Ltd a company engaged in hire purchase finance, leasing and
bill discounting activities. The rating agency also re-affirmed the company with "FAA" i,e. High
Safety rating. Company newly launched E-cash, a Smart Card based secured electronic Purse. It
facilitates off line transaction processing without the need for any authorization. This is the
first company who launch it in India & Slowly & gradually picking up popularity in India.
During the year 2001 the company's Capital Adequacy Ratio was 29.09% against the RBI
prescribed limited of 12%. The company has also consolidated its core business activity i.e.
construction equipment financing while maintaining its presence in two wheeler finance.
The company is also examining suitable avenues for diversification given the limited scope for
growth of its financial services business. The company has also maintained its rating on public
deposits of 'MA' by ICRA.
HISTORY OF ESCORTS MUTUAL FUNDS

Introduction of mutual fund
MUTUAL FUND - A GLOBALLY PROVEN INVESTMENT
Worldwide, the Mutual Fund, or Unit Trust as it is called in some parts of the world, has a long
and successful history. The popularity of the Mutual Fund has increased manifold. In developed
financial markets, like the United States, Mutual Funds have almost overtaken bank deposits and
total assets of insurance funds.
In India, the Mutual Fund industry started with the setting up of Unit Trust of India in 1964.
Public sector banks and financial institutions began to establish Mutual Funds in 1987. The
private sector and foreign institutions were allowed to set up Mutual Funds in 1993. This fast
growing industry is regulated by the Securities and Exchange Board of India (SEBI).
WHAT IS A MUTUAL FUND
A Mutual Fund is a trust that pools the savings of a number of investors who share in common
financial goal. Anybody with an investible surplus of as little as a few thousand rupees can invest
in Mutual Funds. These investors buy units of a particular Mutual Fund scheme that has a
defined investment objective and strategy.
The money thus collected is then invested by the fund manager in different types of securities.
These could range from shares to debentures to money market instruments, depending upon the
scheme's stated objectives. The income earned through these investments and the capital
appreciation realized by the scheme 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 lower cost.

TYPES OF MUTUAL FUND SCHEMES
There are a wide variety of Mutual Fund Schemes that cater to your needs, whatever to your age,
financial position, risk tolerance and return expectations. Whether as the foundation of your
investment program me or as a supplement, Mutual Fund schemes can help you meet your
financial goals.
(A) By Structure
Open-Ended Schemes
These do not have a fixed maturity. You deal directly with the Mutual Fund for your investments
and redemptions. The key feature is liquidity. You can conveniently buy and sell your units at
net asset value("NAV") related prices.
Close-Ended Schemes
Schemes that have a stipulated maturity period (ranging from 2 to 15 years) are called close-
ended schemes. You can invest directly in the scheme at the time of the initial issue and
thereafter you can buy or sell the units of the scheme on the stock exchanges where they are
listed. The market price at the stock exchange could vary from the scheme's NAV on account of
demand and supply situation, unit holders expectations and other market factors. One of the
characteristics of the close-ended scheme is that they are generally traded at a discount to NAV;
but closer to maturity, the discount narrows.
Some close-ended schemes give you an additional option of selling your units directly to the
Mutual Fund through periodic repurchase at NAV related prices. SEBI regulations ensure that at
least one of the two exit routes are provided to the investor.
Interval Schemes
These combine the features of open-ended and close-ended schemes. They may be traded on the
stock exchange or may be open for sale or redemption during pre-determined intervals at NAV
related prices.
(B) By Investment Objective
Tax Saving Schemes
These schemes offer tax rebates to the investors under tax laws as prescribed from time to time.
This is made possible because the Government offers tax incentives for investment in specific
avenues. For example, Equity Linked Saving Schemes(ELSS) and Pension Schemes.

Recent amendments to the Income Tax Act provide further opportunities to investors to save
capital gains by investing in Mutual Funds. The detail of such tax savings are provided in the
relevant offer documents.
Ideal for:
 Investors seeking tax rebates.
Special Schemes
This category includes index schemed that attempt to replicate the performance of a particular
index such as the BSE Sensex or the NSE 50, or the industry specific schemes(which invest in
specific industries) or sectoral schemes(which invest exclusively in segments such as 'A' Group
shares or initial public offerings).
Index fund schemes are ideal for investors who are satisfied with a return approximately equal to
that of an index.
Sectoral fund schemes are ideal for investors who have already decided to invest in a particular
sector or segment.
Keep in mind that anyone scheme may not meet all your requirements for all time. You need to
place your money judiciously in different schemes to be able to get the combination of growth,
income and stability that is right for you.
Remember, as always, higher the return you seek, higher the risk you should be prepared to take.
WHY SHOULD YOU INVEST IN MUTUAL FUNDS?
The advantages of investing in Mutual Fund are:
1. Professional Management. You avail of the services of experienced and skilled
professionals who are backed by a dedicated investment research team which analyses
the performance and prospects of companies and selects the suitable investments to
achieve the objective of the scheme.
2. Diversification. Mutual Funds invest in a number of companies across a broad cross-
section of industries and sectors. This diversification reduces the risk because seldom do
all stocks decline in the same time and in same proportion. You achieve this
diversification through a Mutual Fund with far less money than you can do on your own.
3. Convenient Administration. Investing in a Mutual Fund reduces paper work and helps
you avoid many problems such as bad deliveries, delayed payments and unnecessary

follow up with brokers and companies. Mutual Fund saves your time and make investing
easy and convenient.
4. Return Potential. Over a medium to long term, Mutual Funds have the potential to
provide a higher return as they invest in a diversified basket of selected securities.
5. Low Costs. Mutual Funds are a relatively less expensive way to invest compared to
directly investing in the capital markets because the benefits of scale in brokerage,
custodial and other fees translate into lower costs for investors.
6. Liquidity. In open-ended schemes, you can get your money back promptly at net asset
value related prices from the Mutual Fund itself. With close-ended schemes, you can sell
your units on a stock exchange at a prevailing market price or avail of the facility of
direct repurchase at NAV related prices which some close-ended and interval schemes
offer you periodically.
7. Transparency. You get regular information on the value of your investment in addition
to disclosure on the specific investments made by your scheme, the proportion invested in
each class of assets and the fund manager's investment strategy and outlook.
8. Flexibility. Through features such as regular investment plans, regular withdrawal plans
and dividend reinvestment plans, you can systematically invest or withdraw funds
according to your needs and convenience.
9. Choice of Schemes. Mutual Funds offer a family of schemes to suit your varying needs
over a lifetime.
10. Well Regulated. All Mutual Funds are registered with SEBI and they function within the
provisions of strict regulations designed to protect the interests of investors. The
operations of Mutual Funds are regularly monitored by SEBI.

UNDERSTANDING AND MANAGING RISK
All investments whether in shares, debentures or deposits involve risk: share value may go down
depending upon the performance of the company, the industry, state of capital markets and the
economy; generally, however, longer the term, lesser the risk; companies may default in payment
of interest/principal on their debentures/bonds/deposits; the rate of interest on an investment may
fall short of the rate of inflation reducing the purchasing power.
While risk cannot be eliminated, skillful management can minimize risk. Mutual Funds help to
reduce risk through diversification and professional management. The experience and expertise
of Mutual Fund managers in selecting fundamentally sound securities and timing their purchases
and sales, help them to build a diversified portfolio that minimize risk and maximizes returns.

HOW TO INVEST IN MUTUAL FUNDS?
Step One - Identify your investment needs.
Your financial goals will vary, based on your age, lifestyle, financial independence, family
commitments, level of income and expenses among many other factors. Therefore, the first step
is to assess your needs. Begin by asking yourself these questions:
What are my investment objectives and needs?
1. Probable Answers: I need regular income or need to buy a home or finance a
wedding or educate my children or a combination of all these needs.
2. How much risk I am willing to take?
Probable Answers: I can only take a minimum amount of risk or I am willing to accept
the fact that my investment value may fluctuate or that there may be a short-term loss in
order to achieve a long-term potential gain.
3. What are my cash flow requirements?
Probable Answers: I need a regular cash flow or I need a lump sum amount to meet a
specific need after a certain period or I don't require a current cash flow but I want to
build my assets for the future.
By going through such an exercise, you will know what you want out of your investment and can
set the foundation for a sound Mutual Fund investment strategy.
Step Two - Choose the right Mutual Fund.
Once you have a clear strategy in mind, you have to choose which Mutual Fund and scheme you
want to invest in. The offer document of the scheme tells you its objectives and provides
supplementary details like the track record of other schemes managed by the same Fund
Manager. Some factors to evaluate before choosing a particular Mutual Fund are:
 the track record of performance over the last few years in relation to the appropriate
yardstick and similar funds in the same category.
 how well the Mutual Fund is organized to provide efficient, prompt and personalized
service.

 degree of transparency as reflected in frequency and quality of their communications.
Step Three - Select the ideal mix of Schemes.
Investing in just one Mutual Fund scheme may not meet all your investment needs. You may
consider investing in a combination of schemes to achieve your specific goals.
The following tables could prove useful in selecting a combination of schemes that satisfy your
needs.
AGGRESSIVE PLAN
Money Market
Schemes
5 %
Income Schemes 10-15%
Balanced Schemes 10-20 %
Growth Schemes 60-70 %
MODERATE PLAN
Money Market
Schemes
10 %
Income Schemes 20 %
Growth Schemes 30-40 %
CONSERVATIVE PLAN
Money Market
Schemes
10 %
Income Schemes 50-60 %
Growth Schemes 10 %
Step Four - Invest regularly

For most of us, the approach that works best is to invest a fixed amount at specific intervals, say
every month. By investing a fixed sum every month, you buy fewer units when the price is
higher and more units when the price is low, thus bringing down your average cost per unit. This
is called rupee cost averaging and is a disciplined investment strategy followed by investors all
over the world. With many open-ended schemes offering systematic investment plans, this
regular investing habit is made easy for you.
Step Five - Keep your taxes in mind
If you are in a high tax bracket and have utilized fully the exemptions under section 80L of the
Income Tax Act, investing in growth funds that do not pay dividends might be more tax efficient
and improve your post-tax return.
If you are in a low tax bracket and have not utilized fully the exemptions available under Section
80L of the Income Tax Act, selecting funds paying regular income could be more tax efficient.
Further, there are other benefits available for investment in Mutual Funds under the provisions of
the prevailing tax laws. You may therefore, consult your tax advisor or Chartered Accountant for
specific advice.
Step Six - Start early
It is desirable to start investing early and stick to a regular investment plan. If you start now, you
will make more than if you wait and invest later. The power of compounding lets you earn
income on income and your money multiplies at the compounded rate of return.
Step Seven - The final step
All you need to do now is to get a touch with a Mutual Fund or your agent/broker and start
investing. Reap the rewards in the years to come. Mutual Funds are suitable for every kind of
investor - whether starting a career or retiring, conservative or risk-taking, growth-oriented or
income seeking.

YOUR RIGHTS AS A MUTUAL FUND UNITHOLDER
As a unit holder in Mutual Fund scheme coming under the SEBI (Mutual Funds) Regulation,
("Regulations") you are entitled to:
1. Receive unit certificates or statements of accounts conforming your title within 6 weeks
from the date of closure of the subscription or within 6 weeks from the date your request
for a unit certificate is received by the Mutual Fund;
2. Receive information about the investment policies, investment objectives, financial
position and general affairs of the scheme;
3. Receive dividend within 42 days of their declaration and receive the redemption or
repurchase proceeds within 10 days from the date of redemption or date of redemption;
4. Vote in accordance with the Regulations to:
a. either approve or disapprove any change in the fundamental investment policies of the
Scheme which are likely to modify the scheme or affect your interest in the Mutual Fund;
(as a dissenting unit holder, you would have the right to redeem your investments);
b. change the asset management company;
c. wind up the schemes.
5. Inspect the documents of the Mutual Funds specified in the scheme's offer document.
 In addition to your rights, you can expect the following from Mutual Funds :To publish
their NAV, in accordance with the regulations: daily, in case of open-ended schemes and
periodically, in case of close-ended schemes;
 To disclose your schemes' portfolio holdings, expenses, policy on asset allocation, the
Report of the Trustees of the operations of your schemes and their future outlook through
periodic newsletters, half-yearly and annual accounts;
 To adhere to a Code of Ethics which require that investment decisions are taken in the
best interests of the unit holders.

About Mutual Funds
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 invested by the fund manager in different types of
securities depending upon the objective of the scheme. These could range from shares to
debentures to money market instruments. The income earned through these investments and the
capital appreciation realized by the scheme 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
portfolio at a relatively low cost. The small savings of all the investors are put together to
increase the buying power and hire a professional manager to invest and monitor the money.
Anybody with an investible surplus of as little as a few thousand rupees can invest in Mutual
Funds. Each Mutual Fund scheme has a defined investment objective and strategy.

Benefits of Investing in Mutual Fund
Professional Management
Mutual Funds provide the services of experienced and skilled professionals, backed by a dedicated
investment research team that analyses the performance and prospects of companies and selects
suitable investments to achieve the objectives of the scheme.
Diversification
Mutual Funds invest in a number of companies across a broad cross-section of industries and
sectors. This diversification reduces the risk because seldom do all stocks decline at the same time
and in the same proportion. You achieve this diversification through a Mutual Fund with far less
money than you can do on your own.
Convenient Administration
Investing in a Mutual Fund reduces paperwork and helps you avoid many problems such as bad
deliveries, delayed payments and follow up with brokers and companies. Mutual Funds save your
time and make investing easy and convenient.
Return Potential
Over a medium to long-term, Mutual Funds have the potential to provide a higher return as they
invest in a diversified basket of selected securities.
Low Costs
Mutual Funds are a relatively less expensive way to invest compared to directly investing in the
capital markets because the benefits of scale in brokerage, custodial and other fees translate into
lower costs for investors.
Liquidity
In open-end schemes, the investor gets the money back promptly at net asset value related prices
from the Mutual Fund. In closed-end schemes, the units can be sold on a stock exchange at the
prevailing market price or the investor can avail of the facility of direct repurchase at NAV related
prices by the Mutual Fund.
Transparency

You get regular information on the value of your investment in addition to disclosure on the
specific investments made by your scheme, the proportion invested in each class of assets and the
fund manager's investment strategy and outlook.
Flexibility
Through features such as regular investment plans, regular withdrawal plans and dividend
reinvestment plans, you can systematically invest or withdraw funds according to your needs and
convenience.
Affordability
Investors individually may lack sufficient funds to invest in high-grade stocks. A mutual fund
because of its large corpus allows even a small investor to take the benefit of its investment
strategy.
Choice of Schemes
Mutual Funds offer a family of schemes to suit your varying needs over a lifetime.
Well Regulated
All Mutual Funds are registered with SEBI and they function within the provisions of strict
regulations designed to protect the interests of investors. The operations of Mutual Funds are
regularly monitored by SEBI.

Drawbacks of Mutual Funds
Mutual funds have their drawbacks and may not be for everyone:
 No Guarantees: No investment is 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, anyone who invests through a mutual fund runs the risk of
losing money.
 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 don't use a broker or other financial
adviser, 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's manager to
make the right decisions regarding the fund's 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

Mutual Funds Industry in India:
The origin of mutual fund industry in India is with the introduction of the concept of mutual fund
by UTI in the year 1963. Though the growth was slow, but it accelerated from the year 1987
when non-UTI players entered the industry.
In the past decade, Indian mutual fund industry had seen a dramatic improvement, both quality
wise as well as quantity wise. Before, the monopoly of the market had seen an ending phase; the
Assets Under Management (AUM) was Rs. 67bn. The private sector entry to the fund family
raised the AUM to Rs. 470bn in March 1993 and till April 2004; it reached the height of 1,540
bn. Putting the AUM of the Indian Mutual Funds Industry into comparison, the total of it is less
than the deposits of SBI alone, constitute less than 11% of the total deposits held by the Indian
banking industry.
The main reason of its poor growth is that the mutual fund industry in India is new in the
country. prime responsibility of all mutual fund companies, to market the
product correctly abreast of selling.
The mutual fund industry can be broadly put into four phases according to the development of
the sector. The first phase started from 1964-1987, the second phase continued from 1987-1993
where public sector funds entered the market, the third phase continued from 1993-2003 where
private sector funds also joined the market and the fourth phase is running currently which
started from 2003.
This phase had bitter experience for UTI. It was bifurcated into two separate entities. One is the
Specified Undertaking of the Unit Trust of India with AUM of Rs.29,835crores (as on January
2003). The Specified Undertaking of Unit Trust of India, functioning under an administrator and
under the rules framed by Government of India and does not come under the purview of the
Mutual Fund Regulations.
The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is registered
with SEBI and functions under the Mutual Fund Regulations. With the bifurcation of the
erstwhile

UTI which had in March 2000 more than Rs.76,000crores of AUM and with the setting up of a
UTI Mutual Fund, conforming to the SEBI Mutual Fund Regulations, and with recent mergers
taking place among different private sector funds, the mutual fund industry has entered its
current phase of consolidation and growth. As at the end of September, 2004, there were 29
funds, which manage assets of Rs.153108crores under 421 schemes.

Performance of Mutual Funds in India:
The performance of mutual funds in India in the initial phase was not even closer to satisfactory
level. People rarely understood, and of course investing was out of question. But yes, some 24
million shareholders were accustomed with guaranteed high returns 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 risks factor after the liberalization.
The Assets Under Management of UTI was Rs. 67bn. by the end of 1987. Let me concentrate
about the performance of mutual funds in India through figures. From Rs. 67bn. the Assets
Under Management rose to Rs. 470 bn. in March 1993 and the figure had a three times higher
performance by April 2004. It rose as high as Rs. 1,540bn.
The net asset value (NAV) of mutual funds in India declined when stock prices started falling in
the year 1992. Those days, the market regulations did not allow portfolio shifts into alternative
investments. There was rather no choice apart from holding the cash or to further continue
investing in shares. One more thing to be noted, since only closed-end funds were floated in the
market, the investors disinvested by selling at a loss in the secondary market.
The performance of mutual funds in India suffered qualitatively. The 1992 stock market scandal,
the losses by disinvestments and of course the lack of transparent rules in the whereabouts
rocked confidence among the investors. Partly owing to a relatively weak stock market
performance, mutual funds have not yet recovered, with funds trading at an average discount of
1020 percent of their net asset value.
The supervisory authority adopted a set of measures to create a transparent and competitive
environment in mutual funds. Some of them were like relaxing investment restrictions into the
market, introduction of open-ended funds, and paving the gateway for mutual funds to launch

pensionschemes.
The measure was taken to make mutual funds the key instrument for long-term saving. The more
the variety offered, the quantitative will be investors.
At last to mention, as long as mutual fund companies are performing with lower risks 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 dos and don’ts of mutual funds.

Future of Mutual Funds in India
By December 2004, Indian mutual fund industry reached Rs 1,50,537crore. It is estimated that
by 2010 March-end, the total assets of all scheduled commercial banks should be Rs
40,90,000crore.
The annual composite rate of growth is expected 13.4% during the rest of the decade. In the last
5 years we have seen annual growth rate of 9%. According to the current growth rate, by year
2010, mutual fund assets will be double.
Some facts for the growth of mutual funds in India
 100% growth in the last 6 years.
 Number of foreign AMC’s is in the queue to enter the Indian markets like fidelity
 Investments, US based, with over US$1trillion assets under management worldwide.
 Our saving rate is over 23%, highest in the world. Only channelizing these savings in
mutual
 funds sector is required.
 We have approximately 29 mutual funds which is much less than US having more than
800.
 There is a big scope for expansion.
 'B' and 'C' class cities are growing rapidly. Today most of the mutual funds are
concentrating
 on the 'A' class cities. Soon they will find scope in the growing cities.
 Mutual fund can penetrate rural like the Indian insurance industry with simple and
limited
 products.
 SEBI allowing the MF's to launch commodity mutual funds.
 Emphasis on better corporate governance.
 Trying to curb the late trading practices and introduction of Financial Planners who can
provide need based advice.

Product details:
Escorts Power & Energy Fund –
Mission to ensure energy independent country by 2030.The investment objective of the
scheme is to provide income distribution and/or medium to long-term capital gains by
investing predominantly, in equity/equity related instruments of the companies in the
Power/Energy Sector and/or Debt/Money-Market instruments.
Scheme Details.
Type of Scheme Open Ended Growth Scheme
Investment Objective
Investment Objective of the scheme is to provide
income distribution and/or medium to long term-
capital gains by investing predominantly in
Equity/Equity related instruments of the companies
in the Power / Energy Sector and /or Debt/Money
Market instruments.
Asset Allocation
Equity Shares and Equity related Instruments: 65-
100,
Debt Instruments, Govt. Bonds, Money Market
Instruments etc.: 0 – 35
Minimum Application Amount
Purchase: Rs. 1000/- and Multiples of Re. 1/-
Additional Purchase : Rs. 1000 and Multiples of
Re.1/-,
Repurchase: Minimum of Rs. 1000/-
Load Structure Entry Load: Nil : Exit Load :1% if exit <= 1 yrs
Option Available Daily NAV publication NAV will be declared on business days.

Escorts Opportunities Fund –
Launched in February 2001, Escorts opportunities Fund (EOF), Designed to provide regular
income. We invest in well- diversified portfolio for both equity and debt. Also, in case of
equities, we as a matter of policy only invest in well researched large cap stocks. Further to
reduce the volatility in returns induced due to the equity component, the fund aggressively uses
derivatives by selling option. This premium income received in the process not only reduces the
volatility but also enhances the risk adjusted return on the scheme. Through this mechanism, we
also partially hedge any potential downside in the portfolio to the extent of premium received.
Scheme Details
Type of
Scheme
An Open-Ended Growth Fund
Investment
Objective
The scheme seeks stable and regular income through an actively managed
portfolio of stocks, bonds and money market instruments. The asset allocation
is dynamically planned to capture the best of the opportunities in equity and
debt Exposure in equity is a blend of large and mid cap stocks, skewed largely
towards the well-researched blue chips. In debt, the scheme invests mainly in
Central and State Government debt papers besides PSUs and bank bonds. The
highlight of the scheme is the extensive use of derivatives not only as a
hedging tool but also in generating regular income, which in turn enhances the
overall portfolio’s risk-adjusted return.
Asset
Allocation
Fixed Income 0-49
Equity and Equity Related Securities 51-100
Minimum
Application
Amount
Growth Option & Dividend Re-investment option Rs. 1000/-,
Dividend Payout Option: Rs 30,000/-, Additional Purchase
:Rs. 1000, Repurchase: Minimum of Rs. 1000/-
Load
Structure
Entry Load: Nil
Exit Load: 1% if exit < = 1 year
Option
Available
Daily NAV
publication
NAV will be declared on business days.
Dividend
Paid
April
2002-
March
2006
April 2006-
September
2007
October
2007-
September
2008
November
2008-
January
2009
May,2009
June
2009-
Dec2009
Jan
2010
Rate
1.25%
(47-
Div.)
1.5% (18
Div.)
1.6% (12
Div.)
Avg. 0.97
% (7 Div.)
1.962 0.981 0.613

Escorts Income Plan -
To generate current income by investing predominantly in a well diversified portfolio of
Fixed Income securities with moderate risk levels. This income may be complemented by
possible Capital Appreciation..
Scheme Details
Type of Scheme An Open Ended Income Scheme
To generate current income by investing predominantly in a well diversified portfolio of
Fixed Income securities with moderate risk levels. This income may be complemented
by possible Capital Appreciation.
Asset Allocation
Money Market Instruments: 10 – 20; Fixed Income
Securities: 80 - 90 (max 100); Equity and Equity Linked
Instrument: 0 - 10 (max 20); Units of other Mutual
Funds: 0 - 5 (max 5);
Minimum Application
Amount
Purchase: Rs. 1000/- and Multiples of Re. 1/-,
Additional Purchase : Rs. 1000 and Multiples of Re.1/-,
Load Structure
Entry Load – Nil,
Exit Load – 0.5% if exit <= 6 months
Option Available
Daily NAV
publication
Dividend Paid 126 Dividends Since May 1998

Escorts Tax Plan –
To generate Capital Appreciation by investing predominantly
in a well diversified portfolio of Equity Shares with growth potential. This Income may
be complemented by possible dividend and other income.
. Scheme Details
Type of Scheme Open Ended Equity Linked Saving Scheme
Investment
Objective
To generate Capital Appreciation by investing predominantly in a well
diversified portfolio of Equity Shares with growth potential. This
Income may be complemented by possible dividend and other income.
Asset Allocation
Equity ,Cumulative convertible preference shares; fully convertible
Debentures and Bonds. 80-100
Money Market Instruments 0-20
Minimum
Application
Amount
Purchase: Rs. 500 and Multiple of Re. 1/-
Additional Purchase : Rs 500 and Multiple of Re. 1/-,
Load Structure
Entry Load : Nil Exit Load : Nil
Locking of 3 years being ELSS
Option Available
Daily NAV
publication
Dividend March 2004 March 2005 March 2006 March 2007 March 2008
Rate 80% 30% 35% 25% 30%

Escorts Balanced Fund –
To generate long term Capital Appreciation and current
income from a portfolio of equity & fixed income securities..
Scheme Details
Type of Scheme Open Ended Balanced Scheme
Investment
Objective
An open-ended balanced scheme, with the investment objective to
generate long term capital appreciation and current income from a
portfolio of equity & fixed-income securities.
Asset
Allocation
Equity Shares and Equity Related Instruments. 50-80
Debt Instruments, Govt. Bonds 20-45
Minimum
Application
Amount
Purchase: Rs. 1000 and Multiple of Re. 1/-
Additional Purchase: Rs. 1000 and Multiple of Re.1/-
Load Structure Entry Load: NIL : Exit Load :1% if exit <=1yrs
Option
Available Daily
NAV
publication
Dividend Mar’02 Dec’03 Mar’05 Mar’06 Mar’07 Mar’08
Rate 10% 45% 70% 40% 20% 30%

Escorts Growth Plan –
To generate Capital Appreciation by investing predominantly in a well diversified
portfolio of Equity Shares with growth potential. This income may be complemented by
possible dividend and other Income..
Scheme Details
Investment
Objective
To generate Capital Appreciation by investing predominantly in a well
diversified portfolio of Equity Shares with growth potential. This income
may be complemented by possible dividend and other Income.
Asset Allocation
Equity Shares and Equity Related Instruments Approx 0-20
Fixed Income Securities and Money Market Instruments ( Including
Securitized debt not exceeding 10%) Approx 0-20 Units of other Mutual
Fund Scheme(s) Approx 0-5
Minimum
Application
Amount
Additional Purchase : Rs.1000 & Multiples of Re.1/,
Load Structure Entry Load : Nil , Exit Load: 1% if exit <= 1 year
Option Available
Daily NAV
publication
Dividend Dec 03 Mar 06 Mar’06 Mar’07 Mar’08
Rate 80% 40% 50% 30% 30%

Escorts Gilt Plan –
To generate income and capital appreciation through investments in Government
Securities . The aim is to generate returns commensurate with minimal credit risk by
investing in securities created and issued by the Central Government and/or a State
Government and/or repos/reverse repos in such government securities as may be
permitted by RBI.
. Scheme Details
Type of Scheme Open Ended Gilt Scheme
Investment
Objective
To generate income and capital appreciation through investments in Government
Securities . The aim is
to generate returns commensurate with minimal credit risk by investing in
securities created and issued by the Central Government and/or a State
Government and/or repos/reverse repos in such government securities as may be
permitted by RBI.
Asset Allocation
Govt. Securities 80-100
Money Market Instruments 0-20
Minimum
Application
Amount
Purchase: Rs. 1000/- and Multiples of Re. 1/-,
Additional Purchase : Rs. 1000 and Multiples of Re.1/-,
Load Structure
Entry Load: Nil
Exit Load - 0.50% if exit <= 6 months
Option Available
Daily NAV
publication
Dividend Sep 01 Dec 01 Mar 02
Rate 30 30 20

Escorts Liquid Plan –
The primary investment objective of the scheme is to provide income and liquidity
consistent with the prudent risk from a portfolio comprising of money market and debt
instruments. This income may be complemented by possible capital appreciation. The
aim is to optimize returns while providing liquidity..
Scheme Details
Type of Scheme Open Ended Liquid Scheme
To provide income and liquidity consistent with the
prudent risk from a portfolio comprising of Money
Market and Debt Instruments. This income may be
complemented by possible capital appreciation. The
aim is to optimize returns while providing liquidity.
Asset Allocation
Money Market Instruments: 90 – 100
Debt Securities: 0 - 10
Purchase: Rs. 1000/- and Multiples of Rs. 1/-
Additional Purchase : Rs 1000 and Multiples of
Rs.1/-,
Load Structure
Entry Load : Nil,
Exit Load : Nil

Escorts Leading Sectors Fund –
The investment objective of the scheme is to provide capital appreciation or income
distribution by investing in companies from Leading Sectors, depending upon their
growth prospects and sustainability of future earnings growth..
Scheme Details
To Provide capital appreciation or income distribution by investing in
companies from Leading Sectors, depending upon their growth prospects
and sustainability of future earnings growth.
Purchase: Rs. 1000/-and Multiples of Re. 1/-
Additional Purchase: Rs.1000 and Multiple of Re. 1/-, Repurchase:
Minimum of Rs. 1000/-
Load Structure Entry Load : Nil , Exit Load: 1% if exit <= 1 years
Option Available Daily NAV
publication

Escorts Income Bond –
To generate income by investing predominantly in a well diversified portfolio of Fixed
Income securities ith moderate risk levels. This income may be complemented by
Scheme Details
Type of Scheme Open Ended Income Scheme
Investment
Objective
To generate current income by investing predominantly in a well
diversified portfolio of Fixed Income Securities with moderate risk
levels. This income may be complemented by possible Capital
Appreciation.
Asset Allocation
Money Market Securities: 0-25 ; Debt Securities: 40-90
Equity and Equity Related Instrument : 0-25
Minimum
Application Amount
Additional Purchase : Rs 1000 and Multiples of Rs.1/-,
Load Structure
Entry Load : Nil,
Exit Load : 0.50% if exit <=6 months
Option Available
Daily NAV
publication
Bonus 24.02.2010
Rate 3:50 (3 bonus units for 50 units held in growth option of EIB)

Escorts High Yield Equity Plan –
To generate income by investing predominantly in a well diversified portfolio of Fixed
Income securities ith moderate risk levels. This income may be complemented by
Scheme Details
To generate income by investing predominantly in
well diversified portfolio of equity stocks providing
high dividend yield but at the same time capture
long term capital appreciation as and when the
opportunity arises .This long style of investment
tries to locate , in a disciplined manner, shares
,which for a variety of reason are selling at prices
which are substantially lower than the company’s
actual business value or future earnings potential,
and are also yielding a higher return than normal
dividend yield. These companies would be backed
by stable earnings in the past while offering fair
growth potential in the future.
Asset Allocation
Equity Shares and Equity related Instruments: 65-
100,Debt Instruments,(Govt. Bonds, Money
Market Instruments etc.): 0 – 25, Securitized Debt :
0-10, Units of other Mutual Fund Scheme(s): 0 – 5
Additional Purchase : Rs.1000 & Multiples of
Re.1/-,
Load Structure Entry Load : Nil , Exit Load: 1% if exit <= 1 years
Option Available Daily NAV publication NAV will be declared on business days

Escorts Floating Rate Fund –
To generate regular income through investment in a portfolio comprising substantially of
Floating Rate Debt Securities (including floating rate securitized debt, Money Market
Instruments and Fixed Rate Debt Instruments swapped for floating rate returns).The
scheme shall also invest in Fixed Rate Debt Securities (including fixed rate securitized
debt, Money Market Instruments and Floating Rate Debt Instruments swapped for fixed
returns..
Scheme Details
Type of Scheme Open Ended Income Scheme
To generate regular income through investment in a
portfolio comprising substantially of Floating Rate Debt
Securities (including floating rate securitized debt,
Money Market Instruments and Fixed Rate Debt
Instruments swapped for floating rate returns).The
scheme shall also invest in Fixed Rate Debt Securities
(including fixed rate securitized debt, Money Market
Instruments and Floating Rate Debt Instruments swapped
for fixed returns.
Asset Allocation
Floating Rate Debt Securities: 65 – 100
Fixed Rate Debt Securities.: 0 - 35
Additional Purchase : Rs 1000 and Multiples of Rs.1/-,
Load Structure Entry Load : Nil , Exit Load: Nil

THE TOP TEN REASONS TO INVEST IN MUTUAL FUNDS
Every one who follows the financial news has heard about mutual funds and knows the stocks
markets has generally risen (with various ups and downs) for over 200 years . Ii fact, by most
measures, the stock market has made more money for more people, and done it more reliably,
than any other investment over the past 100 years ! if you want to accumulate substantial wealth,
you must include stocks in your investments !But most people who invest don’t study the
market. They don’t understand it and they don’t have time to manage their portfolio wisely.
That’s where mutual funds come in. I respect the other people opinion , and certainly not all
mutual funds are well managed – you must choose wisely and use appropriately caution ! But,
for most folks, a good , solid, boring mutual fund is the golden path to riches.
Here .there are top ten reasons to invest in mutual funds:
1.Selection:
You can select from thousands of funds (you’ll one to suit your needs) and you can get on them
easily. Magazines like “Money” are easy to find. Most credit unions have information, and your
local library is a goldmine-and the internet.
2.You can start with small amount of money:
Most mutual fund will let you start with less than $ 1000,and if you set it up for automatic
deposits , some will let you start with only $50,I’ve spent more than that in a restaurant . There is
no reason not to consider this!
3.Simplicity:
You deposit 10% of your income every month. Just pay yourself first then pay the mortgage ,
then pay everyone else.
4.Professional management:
I do not have always time to research, select and monitor individual stocks. So , I pay a
professional do it for me. A good fund manager will make you rich

5.Compound interest:
Depending on what index you pick , the U.S. stock market has gone up an average of over 12%
per year for the past 10 years, and it is been almost high for the past 20 years. The market
fluctuates, but the beauty of this is, you do not care ! Over 10,20,or 30 years. the system works
every time!
6.Dollar – Cost Averaging:
The details are complicated ,but by investing every single month whether the market is up or
down, you get a tremendous boost from the mathematics. Your “average cost” will always be
less than the “average price” you paid ! And that is money in your pocket!
7.Diversification:
A Broad based growth fund typically invest in dozens of companies in different industries
,sometimes even in different countries around the world. If one stock goes down ,hopefully
dozens will go up. There is excellent protection and sound risk management built in to these
funds.
8.Specialization:
If you prefer , and if you do the research, there are funds that invests in only a very small no of
companies. If you accept the additional risk , you can invest in one particular industry, or one
country ,or in companies of a certain size or that are environmentally responsible. This
specialization offers the potential for even greater profits, but it can also bring greater potential
risk. Study before you invest.
9.Fund “Families”:
Most mutual funds are offered by management companies that sponsor several different funds
,with different objectives. They make it easy to move your money between the funds ,so as your
goals change, you can adjust your investments with a quick phone calls, or the internet.
10.Momentum:
Once you get started ,your enthusiasm builds .Once you have money “in the market” ,you’ll
track it, manage it, and in all probability, your desire to save will increase. If you have had
difficulty saving in the past ? START ! Those monthly statement will be positive reminders to do

even more. Yes you should invest in tax sheltered retirement plans first and yes, there are other
investment probabilities .And Yes, there is some risk , because the market can go down. But to
retire wealthy, pick a great, long –term growth fund, invest regularly. and system work for you !
The key ,
as always is : GET STARTED!

INTRODUCTION
OF DIFFERENT
COMPETETIVE
COMPANIES

Introduction TO HDFC MUTUAL FUNDS
HDFC founded in 1977; today is marketing leading in housing finance in India Extended
financial assistance for more then is 15Lakh homes. HDFC 120 office in India, if also had one
Kuwait. Oman, it have IInd
haiku customer and 4600 agent HDFC SLIC has granted Loans in
over 2400 eeliest/towns across of country. HDFC holds around29% of equity in the bank. 120
Branches 1500000 center 144 ATMs. HDFC and standard life first commenced discussion about
a possible joint virtue enter the life insurance market; in Jan-1995.Standard life is companies of
U.K. HDFC are the main share holder in HDFC Standard life insurance company Limited, with
81.40% while Standard life own 18.6%.
H D F C
Housing Development Finance Corporation Limited
1. HDFC + Standard life
81.4% Company of U.K.
81.6%
Banking
Insurance
Health

STANDARD LIFE IN INDIA
Standard life has a joint venture company, HDFC Standard Life Insurance, launched in 2000
with our partners, the Housing Development Finance Corporation. HDFC and Standard Life first
came together for a possible joint venture, to enter the life insurance market, in January 1995. It
was clear from the outset that both companies shared similar values and a strong relationship
quickly formed. In October 1995 the companies signed a 3 year joint venture agreement.
Towards the end of 1999, the opening of the market looked very promising and both
companies agreed the time was right to move the operation to the next level. Therefore, in
January 2000 an expert team from the UK joined a hand picked team from HDFC to form the
core project team, based in Mumbai. Around this time Standard Life purchased a further 5%
stake in HDFC and a 5% stake in HDFC Bank
HDFC GROUP COMPANISE INCLUDE
 HDFC Bank
 HDFC SLIC Ltd.
 HDFC Mutual fund limited
 HDFC Realty ltd.

COMPARISION BETWEEN ESCORTS MUTUAL FUNDS & HDFC
MUTUAL FUNDS
Comparison Between Escorts Mutual Funds & HDFC Mutual
Funds
68%
32%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Customer of
HDFC Mutual
Funds
Customer of
ESCORTS MUTUAL FUND
Percentage
Series1

INTRODUCTION OF ICICI MUTUAL FUND COMPANY
THE COMPANY
ICICI Prudential Life Insurance Company is a joint venture between ICICI, a premier financial
powerhouse and prudential plc, a leading international financial services group headquartered in
the U.K. ICICI Prudential was amongst the first private sector insurance companies to begin
operations in December 2000 after receiving approval from Insurance Regulatory Development
Authority (IRDA).
ICICI Prudential’s equity base stands at Rs.3.75 billion with ICICI Bank and Prudential
plc holding 74% and 36% stake respectively.
ICICI Prudential has one of the largest distribution Networks amongst private life insurers in
India, having commenced operations in 25 cities and towns in India. These are: Ahmadabad
Bangalore, Chandigarh, Coimbatore, Guragaon, Hyderabad, Indore, Jaipur, Jalandhar, Kanpur,
Kolkata, Lucknow, Ludhiana, Madurai, Mangalore, Meerut, Mumbai, Nagpur, Nasik, Noida,
New Delhi, Pune and Vadodara.
The company has the largest number of bank assurance tie-ups, having agreements with
ICICI Bank, Citi Bank, Allahabad Band, Federal Bank, South Indian Bank, Bank of India, Lord
Krishna Bank and Punjab & Maharashtra Co-operative Bank. ICICI Prudential has recruited and
trained over 18,000 insurance agents to interface with and advise customers, and has the highest
number amongst private life insurers on the renowned Million Dollar Table (MDT)

ICICI MUTUAL FUNDS:
Asset Management Company enjoy the strong percentage of Prudential PLC ,one of the largest
player in the insurance and fund management sector and ICICI Bank, a well known and trusted
name in financial services in India ICICI Prudential Asset Management Co., in a span of just
over eight years ,has forged a position of preeminence in the Indian Mutual Fund Industry as on
of the largest asset management companies in the country with asset under management of
Rs.23559.60crores (as of March 31,2006) . The company manager a comprehensive range of
scheme to meet the varying investment needs of its investors spreads across 68 cities in the
country.
SPONSORS OF ICICI MUTUAL FUND LTD:
1.PRUDENTIAL:
Established in London in 1848, prudential PLC ,through its business in the UK ,US and Asia,
provides retail financial services products and services to more than 21 million customers
,policyholders and unit holders world wide with over $ 400 US (as of 31st
December ,
2005),billion in funds under management .Prudential employs some 23,000 staff world wide.

2.ICICI BANK:
ICICI Bank is India’s second largest bank with total assets of about Rs 2,513.89bn at March
31,2006 and profit after tax of Rs. 25.40 bn. ICICI Bank has a network about 614 branches and
extension counters and over 2,200 ATMs. ICICI Bank provide a wide range of banking products
And services to corporate and retail customer through a variety of delivery channels and through
its specialized subsidiaries .
ICICI Bank equity shares are listed in India on the BSE and NSE of India Limited and its
American Depositary Receipts (ADRs) are listed on the New York Stock Exchange(NYSE).
COMPARISION BETWEEN ESCORTS MUTUAL FUNDS & ICICI
MUTUAL FUNDS
Comparison Between ICICI Mutual Funds
& ESCORTS Mutual Funds
66.12%
33.88%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
Customer of
ICICI Mutual
Funds
Customer of
ESCORTS
Mutual
Funds
Percentage
Series1

INTRODUCTION OF UTI MUTUAL FUNDS
UTI mutual funds managed by UTI Asset Management Company private limited
(Estd. Jan 14 2003) who has been appointed by the UTI trustee co. Pvt. Ltd. For
managing the scheme of UTI mutual fund and the scheme transferred from UTI
mutual fund The UTI asset management company has its registered office at : UTI
tower , GN Block Bandera, Kurla Complex ,Bandera(East),Mumbai 4500051 will
provide professionally managed back office job for all business services for UTI
mutual fund (Excluding fund management) in accordance with the provisions of the
Investment Management Agreement ,the trust Deed, The SEBI (mutual fund)
regulations and the objectives of the schemes ,State of the art system &
communication are in place to ensure a seamless flow across the various activities
undertaken by UTI Asset Management Company.UTI Asset Management Company
is a registered portfolio manager under the SEBI (portfolio manager)
regulations1993 on Feb 3, 2004, for undertaking portfolio management services and
also act as the manager & market to offshore funds through its 10% subsidiary UTI
International Ltd, registered in Guernsey, Channel , Island.UTI Mutual Fund has
come in to existence with effect from 1st
Feb 2003.UTI Asset Management
Company presently manages a corpus of over Rs.34500crore..

ACHIEVEMENTS OF UTI MUTUAL FUND CO.
UTI mutual fund has a track record of managing a variety of schemes catering to the needs
of every class of citizenry . It has nation wide network consisting 70 UTI financial centers
(UFCs) and UTI International offices in London, Dubai and Bahrain.
With a view to reach to common investors at direct level ,4 satellite offices have also been
opened in select towns highly empowered to manage funds with greater efficiency and
accountability in the sole equity research department .
To ensure better management of funds , a risk management department is also in operation. It has
reset and upgraded transparency standards for the mutual funds industry. All the branches UFCs
and registered offices are connected to a robust IT network to ensure cost effective quick and
effective services All these have evolved UTI mutual fund to position as a dynamic , responsive,
restructured , efficient and transparent and SEBI complaint entity.
SPONSORS:
 Bank Of Baroda
 Life Insurance Corporation Ltd.
 Punjab National Bank
 State Bank Of India

RESEARCH
METHODOLOGY

RESEARCH METHODOLOGY
The approach and methodology that was followed in the compilation of this project
report on “Comparative study on mutual funds and desired expectations of
customers with mutual funds" is described as follows:
Selection Of The Topic And Framing Of The Questionnaire:
The topic was selected so as to decide upon the path of our research related works associated
with the project. First of all our task was to frame questionnaire for people to know their views
about the perception of consumers in various investment avenues.
Collection of Data:
Observations and interactions are made to prepare the questionnaire and get them filled. The
research was conducted and compiled by visiting various potential investors who regularly invest
in shares, securities, mutual funds, bonds, gold, business and other investment avenues.

Techniques And Instruments Used
Questionnaires:
Questionnaires are prepared for accurate information. The questionnaires are filled by people of
working or having their own business or self employed or others viz. students, house wives etc.
Thus we got views of people belonging to diverse fields. Thus by the help of the questionnaire
the study become more easy and reliable.
Interviews: Interviews were undergone through structured questionnaire and conversation
with people. The response of the people was quiet satisfying.
M.S.EXCEL: Microsoft Excel software was used for the analysis part of the survey done
among the investors. Major findings, recommendations and conclusion were taken out with its
help.
Internet: Various information’s were collected through internet and necessary information
regarding the company through website of the organization.
Sample Size: 30
Population: Local population of Lucknow.

The Above Research Report was Formulated as under:
 Research : Descriptive
 Data Source : Primary & Secondary
 Research Instrument :Questionnaires
 Sample Size : 30
 Sample Procedure : Simple Random Sampling
SAMPLE PLAN
 Sample Unit : Local Population of Lucknow
 Method of data collection : Structure

METHOD OF DATA COLLECTION
SECONDARY DATA:
the knowledge about company in term of facts and figures. It is a data Secondary data provided
which are already been collected by someone else.
 Websites
 Books
 Magazines
 Newspaper
PRIMARY DATA:
Primary data helped in the knowledge gathered from secondary sources . Primary data are
those which are collected a fresh and for first time It is original in nature
. The method adopted for it :
 Questionnaires

SUMMARY & ANALYSIS OF DATA
After the data are collected the term is the task of analyzing them . The analysis of data requires
the no of closely related operations . Analysis work after tabulation is generally based the
computation of various percentage coefficient etc by applying various well defined statistical
formulae.
PREPARATION OF REPORT
Finally the preparation of report as to be done according to the work done writing of
report must be done within great care keeping in view the following.
LAYOUT
 The report should be written in concise and objective style in simple language.
 Charts and illustration in the main report should be used
 Calculated confidence limits must be mentioned and the various constraints experienced
in conducting research operation may as be staled

ANALYSIS

ANALYSIS
Q1.What is your monthly income ?
 30% of people are earning 5000 to 15000 Rs monthly.
 40% of people are earning 15000 to 25000 Rs per month.
 16% of people are earning 25000 to 35000 Rs per month.
 14% of people are earning above 35000 Rs per month.
Q1.What is your monthly
income
0
0.
0.
0.3
0.
0.
t
15000
25000
to
35000
Range of income
Percentage
Series1
Series2
5000 15000
to
25000
35000
&
Above

Q2.How much do you save out of your income?
 58% of people save 10 to 20% out of their income.
 32% of people save 20 to 30% out of their income.
 8% of people save 30 to $0% out of their income.
 2% of people save above 40% out of their income
Q2. How much do you save out of
your income ?
58%
32%
8% 2%
10% to 20%
20% to 30%
30% to 40%
40% or above

Q3. Which of the following investment objective is important to you.
 44% people give importance to growth of investment.
 4% people give importance to regular dividend plan.
 28% people give importance to tax saving.
 12% people give importance to assumed return
 12% people give importance to wealth creation
Q3. Which of the following
investment objective is important
to you.
0%
10%
20%
30%
40%
50%
Growthof
investment
Tax
saving
Wealth
creation
Percentage
Series1
Tax
saving

Q4.Which of the following best reflects the manner you wish to invest to
achieve your goal.
 14% People prefer their investment should be absolutely safe & can’t bear
the risk to lose a single rupee of money
 24% People prefer their investment should generate the regular income
that they can spend
 38% People prefer their investment should generate some current income &
also growing income over time
 24% People prefer to create wealth not current income
Q4.Which of the following best reflects the manneryou wish to invest to
achieve your goal.
14%
24%
38%
24% My investment
should be
absolutely safe
and I can not bear
the risk to lose a
single rupee of
Money
.
My investment
should generate
the regular income
that I can spend.
My investment
should generate
some current
income and also
growingincome
over time.
I want to create
wealth not current
income.

Q5.Have you ever invested in mutual funds.
 82% of people have not invested in mutual funds.
 18% of people have invested in mutual funds.
Have you ever invested in mutual
funds?
82%
18%
No
Yes

Q6.How much do you invest in mutual funds out of your investment?
 72% of people invest 10% to 20% in mutual fund out of their investment.
 28% of people invest 20% to 30% in mutual fund out of their investment.
 0% of people invest 30% to 40% and 40% or above in mutual funds out of their
investment.

Q7.What is your experience with mutual funds ?
 04% People experience with mutual funds is excellent
 23% People experience with mutual funds is very good
 51% People experience with mutual funds is good
 13% People experience with mutual funds is fair
 09% People experience with mutual funds in poor
Q7,What is your experience with
mutual funds?
4%
23%
51%
13%
9%
Excellent
Very Good
Good
Fair
Poor

Q8.What are the reason behind not investing in Mutual Funds ?
 50% of people are not investing in mutual funds because of Lack of Knowledge.
 33% of people are not investing in mutual funds because of No proper investment.
 17% of people are not investing in mutual funds because of sky guidance.

Q 9.How much investment in mutual fund fulfill your expectations regarding
the return obtained ?
 55.81%of people have got 10 to 20 % return from mutual funds.
 0%of people have got 40 or above% return from mutual funds.

Q10.Do you know about “Escorts Mutual Funds” ?
If Yes:
1)Do you Know about the equity schemes of the Escorts Mutual Funds ?
 47% yes
 53% no
1) Do you know about the equity schemes of the
Escorts Mutual Funds ?
47%
53%
Yes
No
Q10.Do you Know about "Escorts
Mutual Funds" ?
64%
36%
Yes
No

2)How much have you invested in Escorts Mutual Funds out of your income?
 10%- 20% People have invested in escorts mutual funds out of their income
 20%-30% People have invested in escorts mutual funds out their income
2) How much have you invested in Escorts
mutual funds out of your investment
?
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
10%
to
20%
20%
to
30%
30%
to
40%
40%
to
50%
Range of investment
Percentage
Series1

3) What is your experience with Escorts Mutual Funds ?
 19% People experience with escorts mutual funds is poor
 25% People experience with escorts mutual funds is good
 56% People experience with escorts mutual funds is fair
 0% People experience with escorts mutual funds is very good
3) What is your experience with Escorts
Mutual Funds ?
0%0%
25%
56%
19%
Very Good
Good
Fair
Poor

Q11.Which Mutual Funds Company do you like most for investment.
 34% of people like to invest in HDFC Mutual funds.
 28% of people like to invest in ICICI Mutual funds.
 20% of people like to invest in UTI Mutual Funds.
 12% of people like to invest in Escorts Mutual Funds.
 6% of people like to invest in other Mutual Funds Companies.
Q11. Which mutual funds company do you like most
for investment ?
34%
20%
28%
12%
6%
HDFC Mutual
Funds
UTI Mutual
Funds
ICICI Mutual
Funds
Escorts
Mutual Funds
Other

FINDINGS

FINDINGS
Some of the results were very obvious and some of the results were very surprising. The
survey was done in the major areas of Lucknow such as Hazratganj, Aliganj, Mahanagar,
Alambagh etc.
A sample size of 80 was considered.
 The first finding is “What is the average salary of the working people”. After survey I
have found that 30% of people are earning 5000 to 15000 Rs per month ,40% of people
are earning 15000 to 25000 Rs per month ,16% of people are earning 25000 to 35000
Rs per month ,14% of people are earning above 35000 Rs per month.
 The second findings is “ How much people save out of their income.” After survey I have
found that 58% of people save 10% to 20% out of their income, 32% of people save 20%
to 30% out of their income, 8% of people save 30% to 40% out of their income, and 2%
of people save above 40% out of their income,
 The third finding is” What is the investment objective is important for the investment.”
After survey I have found that 22 persons say the growth of investment is important for
investment ,2 persons say dividend plan is important ,14 persons say tax saving is
important, 6 people say that assumed return is important and 6 people also say that wealth
creation is important for the investment.

 The fourth finding is “What is the nature of the people during the investment”. After
findings I have found that, out of 50 people 14 per. People say “My investment should be
absolutely safe and I can’t bear the risk of losing a single rupee of money”. 24 per people
says that “ My investment should generate regular income that I can spend.38 per people
say that “My income should generate some current income and also growing income over
time. and 24 per. People says “they want to create wealth not current income”.
 The fifth finding is “What is the no of people who have invested in mutual funds”. After
finding I have found that out of 80 people 82 per. People have invested in the mutual
funds . and 18 per. People have not.
 The next finding is “What is the experience with mutual funds of the people”. After
survey I have found that 51 per people are having good experience,23 per. people are
having very good experience,13per people are having fair experience ,9per.peopleare
having poor experience. And 4 per. People having excellent experience.
 The next finding is “What is the reason behind not investing in mutual funds. The result
is most of the people not investing in mutual funds because of lack of Knowledge and
because of no proper guidance.
 .The next finding is “ What is the no of people who invested in the “ESCORTS
MUTUAL FUNDS COMPANY ”.The result is out of 80 people 64 % people know the
company and 36 % people don’t know the company.
 With the reference of the “ESCORTS Mutual funds” I have found that
 47 % of people know about the equity scheme of the “Mutual Funds”.

 53% of people don’t know about the equity schemes of the “ESCORTS Mutual
Funds”.
 56% people are having fair experience with ESCORTS Mutual Funds ,25%
people are having good experience and 19 % people are having poor experience
with ESCORTS mutual funds.
 The last finding was about the Which mutual fund company is most preferable for the
investment in mutual funds. After survey I have found that the most preferable
company of mutual funds is the ”HDFC Mutual Funds Co.”After this co. the ICICI
Mutual Funds is more preferable, Funds co. is the “ESCORTS Mutual Funds
company”.

SWOT ANALYSIS

SWOT ANALYSIS
SWOT analysis is done for the environ as well as corporate appraisal it be can be applied to
generate feasible alternative.
STRENGTH:
Strength are the areas in which a particular organization is strong. The organization can use
these factor s to create an advantageous position for itself
 Escorts mutual fund is a strong financial organization with a strong brand name.
 It is well established and reputed organization with a strong market network.
 It has a qualified and experience human resource.
 The work force is highly motivated. It organization has a very clear understanding of
the environment in which it operate.
WEAKNESS:
These are the area where the organization should work hard to survive in the market. The
late entry in the market of mutual fund gives a tough competition to the organization. The
lesser no of advertising campaigns affects adversely the establishment of the products.
OPPORTUNITIES:
These are the factors which must be worked upon to in cash the numerous growth
opportunities available. In other words theses are the situations favorable for the
organizations.
The mutual fund market is understanding be an explicit growth. So Escorts should take
advantage of it. People’s attitude towards foreign and private is changing . The bank
should take measure to create an atmosphere of reliability.

THREATS:
The threat means any challenge posed by unfavorable situation to lead to loss
in sales and profit if left unattached A fierce international competition is
going to take place in the mutual fund market . GE Countrywide ,ABN Amro , Citi
Bank are now on there in this market. Nationalized bank posed a threat in term in
term of the liquidity and security of the money.

CONCLUSIONS

CONCLUSIONS
Some of the results were very obvious but some were surprising. The survey was done in major
areas of Gorakhpur and Lucknow A Sample size of 30 was considered. Of the 30 people
interviewed, 15 people were interested in Mutual fund or they think it as an unnecessary evil.
People not interested in mutual fund are very few such people considered mutual fund as a
liability.30% to 32% respondents living in and around Birhana Road and Pheel Khana
respondents were found to be high profile. Both of these areas have a large number of shops and
together they display great
unity in making decisions. Escorts Mutual fund should focus more on these areas as they provide
a lot of reference business also. Escorts finance should make strategies to tap these potential
customers. On the basis of this study, it was found that the customer share of escorts mutual fund
was a merge 4%. Whereas the scene was dominated by the State Bank of India & ICICI with a
customer share of 32% & 30% respectively. State Bank of India is a nationalized bank and is the
highest profit earning financial institution in the country. ICICI had entered into the market much
before than Escorts finance. Among the private sector bank, ICICI topped the charts with 35% of
the customer share While LIC was a close second with 30% customer share.

RECOMMENDATIONS

RECOMMENDATIONS
 The bank should spend a lot on advertising campaigns. At it has entered late in to the
market ,there is a stiff competition from other nationalized, private and foreign bank .
There is a lack of brand awareness for the financial product among the people. More
hoardings should be put at strategic points such as near cinema halls , Central & State
Government office in the city.
 According to the life cycle concept of marketing financial products of Escorts mutual
fund are bin their inception stage. So a heavy advertising expenditure is a must.
 The Escorts mutual funds should try to win the confidence of the people by making them
realize that private bank are also equally effective and efficient in providing security and
liquidity to their money.
 Fixing too many negative area in the inception stage will prove to be lethal for the
organization. The list of negative areas should be cut short.
 The policy of Escorts mutual fund to deal with the classes and ignore the masses will not
be advantageous in the long run.

ANNEXURE

The Questionnaire comprised of a wide range of questions such as:
Name
Age
Qualification
Address
Contact number
Saving Account
Mode of investment
Investment objective
Knowledge about mutual fund
Reasons behind not investing in mutual funds
Investment decision

Mutual fund service
Knowledge about Escorts mutual fund’s scheme

BIBLIOGRAPHY

BIBLIOGRAPHY
Books:
1. Mutual Funds in India. By. H. Sadat
2.Businness Research Methods By. William G. Z
3.Financial Management By.Dr.R.S. Kulshreshtha
Search Engines:
1. www.google.com
2. www.dogpile.com
3. www.ansmers.com
Websites:
1.www.amfiindia.com
2.www.indiainfoline.com
3.www.value research.com
4.www.money.com
5.www.economictime.com
6.www.scmf.com

7 www.escortsmutualfund.com
Magazines referred:
1.Businness India 2.Economic times
3.India Today 4.Business World

study of the growth of the mutual funds

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