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STUDY OF EQUITY SCHEMES OF RELIANCE MUTUAL FUND IN THE INDIAN MARKET

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STUDY OF EQUITY SCHEMES OF RELIANCE MUTUAL FUND IN THE INDIAN MARKET Powered By Docstoc
					         STUDY OF EQUITY SCHEMES
                    OF
RELIANCE MUTUAL FUND IN THE INDIAN MARKET




            MBA BATCH : 2007 - 2009


                  Submitted By

                 Amit Sankhla




                       1
                          Table and Contents

1. Acknowledgement

2. Profile of Company

3. About Mutual Fund

4. About Reliance Mutual Fund Scheme

5. List of Tables and Illustrations

6. Abbreviations

7. Summary of Thesis

8. Introduction

9. Research Methodology

10.Objectives

11.Limitations

12.Summary of all AMC

13.Conclusion




                                      2
                         ACKNOWLEDGEMENT

I put myself in humblest desk in order to give the same measure and recognition
to all those who have instrumental through out the entire process of carrying out
this project report. I would like to take this opportunity to acknowledge and
thanks to Reliance Mutual Fund, Udaipur for providing me this highly coveted
opportunity to associate my summer internship project with the organization of
national repute.


My debts for assistance in making this report are more numerous than can be
identified here; this whole effort is the result of guidance, assistance and
inspiration of several people who held me through my study and in the
preparation of this report. I find no words to express my deep gratitude and
thanks to all of them.
My special thanks and heartiest gratitude flows to Mr.Mayur Dhanopia ,Jodhpur
Reliance Mutual Fund. His help in various capacities towards making me familiar
with the research problem and preparing the report is invaluable. His knowledge,
nature and judgement along with his experience were an immense source of
inspiration in completing this project.


I feel greatly honored to show my indebt ness and my profound gratitude towards
him, as he lent his precious time for accomplishment of this project and under
whose guidance this study and observation were undertaken.


               I further feel indebted to all my Faculty members of ICFAI
National College Jodhpur for there consistent encouragement, inspiration and
various suggestions from the conception to completion of the project. They
helped me to prepare a factual, realistic and pragmatic report in limited period.

                                          3
                        Company Profile
INTRODUCTION

               With the advent of globalization age, geography has become part
of history. The world is shrinking technology transfer has taken place from
developed countries to the developing countries; one has mad possible for the
people in every part of world to enjoy the latest trend with minimal time
difference. This led to emergence of a transparent and efficient market, the
mutual fund market has no exception to this new mutual fund market is up
growing market of India which was rigid and traditional market. The success of
mutual fund industry in other part of world has promoted Indian giants to make
foray in this segment. The major player who have capture the Indian market are
Reliance Capital, HDFC, ICICIpru, BIRLA SUN LIFE & others. Couple of
MNC’s has joined these giant after seeing potential market of India.


              Out of these, Reliance Mutual Fund is one of the largest market
players in India’s Mutual Fund Industry’s. Right from its launch it has made an
impression in market and become successful only in 11Years.


              It is the ultimate quest or it is the dilemma that’s seems to
consume more company’s now then ever before? Yes, the desire to win over
consumer hearts and causes the competitors to suffer, it is the dream of every
company and to fulfill this dream, the Indian giants have shed any flab in the
mind and body to achieve goal.



                                      4
                So especial about Reliance Capital, what is that has caught the
imagination of the consumer’s in this segment. Reliance Mutual Fund today sells
maximum number of Schemes than any other company. All these, despite severe
competition that Mutual Fund Sector has faced in India with companies from all
over the world, Launching products of all size in various segments and yet failing
to achieve modest target.

About Reliance Mutual Fund


                Reliance Mutual Fund (RMF) has been established as a trust under
the Indian Trusts Act, 1882 with Reliance Capital Limited (RCL), as the
Settler/Sponsor and Reliance Capital Trustee Co. Limited (RCTCL) as the
Trustee.



RMF has been registered with the Securities & Exchange Board of India (SEBI)
vide registration number MF/022/95/1 dated June 30, 1995. The name of
Reliance Capital Mutual Fund has been changed to Reliance Mutual Fund
effective 11th. March 2004 vide SEBI's letter no. IMD/PSP/4958/2004 date 11th.
March 2004. Reliance Mutual Fund was formed to launch various schemes under
which units are issued to the Public with a view to contribute to the capital
market and to provide investors the opportunities to make investments in
diversified securities.




                                      5
   The main objectives of the Trust are:

      To carry on the activity of a Mutual Fund as may be permitted at law and
   formulate and devise various collective Schemes of savings and investments for
   people in India and abroad and also ensure liquidity of investments for the Unit
   holders;

      To deploy Funds thus raised so as to help the Unit holders earn reasonable
   returns on their savings and

      To take such steps as may be necessary from time to time to realize the effects
   without any limitation.



   Reliance Capital Asset Management Ltd.

  Reliance Capital Asset Management Ltd. is a wholly owned subsidiary of
Reliance Capital Limited, the sponsor. Reliance Capital Ltd. holds the entire paid-up
capital (100%) of Reliance Capital Asset Management Ltd.




   Reliance Industries Ltd. has promoted reliance Mutual Fund (RMF)          has been
sponsored by Reliance Capital Ltd., one of India's largest private sector enterprises.
Reliance Industries Ltd. has a net worth of Rs.61000 crores as on till date. Currently
has a large family of shareholders. Reliance Capital limited is a Non Banking
Finance Company engaged in leasing, investment and other fund based activities.




                                          6
Reliance Capital Ltd. has contributed Rupees One Lac as the initial contribution
to the corpus for the setting up of the Mutual Fund. Reliance Capital Ltd. is
responsible for discharging its functions and responsibilities towards the Fund in
accordance with the Securities and Exchange Board of India (SEBI) Regulations.

               The Sponsor is not responsible or liable for any loss resulting from
the operation of the Scheme beyond the contribution of an amount of Rupees one
Lac made by them towards the initial corpus for setting up the Fund and such
other accretions and additions to the corpus.

Reliance Capital Asset Management Ltd. (RCAM), a company registered under
the Companies Act, 1956 was appointed to act as the Investment Manager of
Reliance Capital Mutual Fund. It is a wholly owned subsidiary of Reliance
Capital Ltd.

               Reliance Capital Asset Management Ltd. was approved as the
Asset Management Company for the Mutual Fund by SEBI vide letter no
IIMARP/265/95 dated February 1, 1995. The Mutual Fund has entered into an
Investment Management Agreement (IMA) with RCAM dated May 12, 1995 and
was amended on August 12, 1997 in line with SEBI (Mutual Funds) Regulations,
1996. Pursuant to this IMA, RCAM will act as Investment Manager of the
Mutual Fund.




                                       7
                         Mutual Fund Concept

Mutual Fund



               Mutual fund is a mechanism for pooling the resources by
issuing units to the investors and investing funds is securities in accordance
with objectives.

               A mutual fund is created when investors put their money
together a pool of the investor’s funds. The most important characteristic of a
mutual fund is that the contributors and the beneficiaries of the fund are the
same class of people, namely the investors. The term mutual means that
investors contribute to the pool, and also benefit from the pool. There are no
other claimants to the funds. The pool of funds held mutually by investors is
the mutual fund.

               A mutual fund’s business is to invest the funds thus collected,
according to the wishes of the investors who created the pool. In many
markets these wishes are articulated as ―investment mandates.‖ Usually, the
investors appoint professional investment managers create a ―product,‖ and
offer it for investment to the investor. This product represents a share in the
pool, and pre-states investment objectives. For e.g., a mutual fund, which sells
a ―money market mutual fund,‖ is actually seeking investors willing to invest
in a pool that would invest predominantly in money market instruments.

               Mutual funds issues units to investors in accordance with
quantum of money invested by them. A mutual fund is required to be
registered with SEBI, which regulates markets before it can collect funds from
the public.
                                     8
What is a Mutual Fund?


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




                                   9
Important characteristics of a mutual fund
  1. A mutual fund actually belongs to the investors who have pooled their
     funds is in the hands of the investors.
  2. Investment professionals and other service providers, who earn a free
     for their services, from the fund, manage a mutual fund.
  3. The pool of funds invested in a portfolio of marketable investments.
     The value of the portfolio is updated every day.
  4. The investors share in the fund is denominated by ―units‖. The value of
     the units changes in the portfolio’s value, every day. The value of one
     unit of investment is called as the net asset value of NAV.
  5. The investment portfolio of the mutual fund is created according to the
     stated investment objectives of the fund.




                                 10
                      TYPES OF MUTUAL FUND



Balanced Funds
                 Balanced funds seek to obtain the highest return consistent
with a low-risk strategy. They hold a mix of common and preferred stocks,
bonds and cash reserves. The mix can vary according to current market
conditions. Balanced funds usually offer higher yields than pure stock funds.
Balanced funds are generally the least risky of growth-oriented mutual funds.

Growth and Income Funds
                Growth and income funds attempt to achieve both long-term
growth and current income. They invest primarily in high-yield common
stock, preferred stock, and convertible debt (bonds) to generate both growth
and income. Because they include a mix of investments, these funds are
typically less risky than growth funds.

Growth Funds
                Growth funds seek long-term appreciation by investing in the
stocks of established companies that may be poised for growth. These
companies typically pay low dividends yet offer the potential for long-term
capital appreciation. Some growth funds limit their investments to specific
sectors of the economy. Growth funds are generally less risky than aggressive
growth funds.




                                   11
International and Global Growth Funds

               International and global mutual funds offer diversification into
international stock markets. International funds invest only in foreign
securities. Global funds, on the other hand, can invest in foreign and U.S.
securities. The risks associated with investing on a worldwide basis include
differences in regulation of financial data and reporting, currency exchange
differences, as well as economic and political systems that may be different
that those in the United States

Aggressive Growth Funds
              Aggressive growth funds, sometimes known as "small-cap"
funds, seek maximum capital gains. They invest primarily in the stock of
smaller, less established companies. Since these companies generally pay little
or no dividends, aggressive growth funds rely on capital growth for returns.
These funds tend to be the riskiest of growth-oriented mutual funds.

Money Market Funds
               Money market funds seek current income while maintaining a
stable $1.00 per share net asset value by investing in short-term debt
securities, including T-bills, certificates of deposit, commercial paper, and
other highly liquid and safe securities. They offer modest current income and
no potential for capital gains. They generally offer the lowest returns but the
most safety of all fund types. Some money market funds also offer tax-free
income. Money market funds are neither insured nor guaranteed by the
Federal Deposit Insurance Corporation or any other government agency.
Although the fund seeks to preserve the value of your investment at $1.00 a
share, it is possible to lose money by investing in the fund.


                                    12
Government Securities Funds
              Government securities funds invest primarily in Treasury and
government agency securities. Because they are issued or guaranteed by the
U.S. government, they are considered the credit worthiest alternatives
available Government securities offer moderate current income and high
safety. Treasury securities are backed by the full faith and credit of the U.S.
government as to the timely payment of principal and interest. Government
agency securities are not considered government obligations and therefore are
not backed by the full faith and credit of the government. The principal value
of these funds will fluctuate due to changes in interest rates.

Municipal Bond Funds
             Municipal bond funds seek tax-free income by investing in the
bonds of state and local governments. In many cases, it may be wise to
consider municipal bond funds issued by your state because they may offer
double or even triple tax-free income. In some states you will have to pay
income tax if you buy shares of a municipal bond fund that invests in bonds
issued by other states. In addition, while some municipal bonds in the fund
may not be subject to regular income taxes, they may be subject to federal,
state, or local alternative minimum tax. If you sell a tax-free bond fund at a
profit, there are capital gains taxes to consider. As with all types of bond
funds, the principal value will fluctuate with changes in interest rates.




                                    13
Corporate Bond Funds
                Corporate bond funds invest in debt securities issued by
corporations. The risk of corporate bond funds may vary depending on the
objectives of the fund. Because credit risk is somewhat higher, these funds
may offer higher returns than funds specializing in government securities.
Principal will fluctuate with changes in interest rates.

High-Yield Bond Funds
                High-yield bond funds seek to maximize current income by
investing in lower-quality — high-yielding — corporate bonds. The bonds
held by these funds are generally rated BB or lower by rating agencies. They
offer the high current yields to compensate for the greater risk of default.
Since they are more volatile than and pay higher yields than investment grade
bonds, they tend to be suited to investors with a high degree of risk tolerance.

Sector Funds
                Sector funds invest in specific industries or sectors of the
economy, such as communications, aerospace and defence, or health care.
While they may be diversified within a particular sector, they lack broad
diversification. This increases their investment risk. These funds typically
seek long-term capital appreciation.

Growth-Income Funds
              Growth-income funds are specialists in blue chip stocks. These
funds invest in utilities, Dow industrials, and other seasoned stocks. They
work to maximize dividend income while also generating capital gains. These
funds are suitable as a substitute for conservative investment in the stock
market.’
                                    14
Income Funds
               Income funds focus on dividend income, while also enjoying
the capital gains that usually accompany investment in common and preferred
stocks. These funds are particularly favoured by conservative investors.

Asset Allocation Funds

               Asset allocation funds don't invest in just stocks. Instead, they
focus on stocks, bonds, gold, real estate, and money market funds. This
portfolio approach decreases the reliance on any one segment of the
marketplace, easing any declines. A plus factor is limited by this strategy as
well.

Precious Metal Funds

               Precious metal funds invest in gold, silver, and platinum. Gold
and silver often move in the opposite direction from the stock market, and
thus these funds can provide a hedge against investments in common stocks.

Bond Funds

               Bond funds invest in corporate and government bonds. A
common misunderstanding among investors is that the return on a bond fund
is similar to the returns of the bonds purchased. One might expect that a fund
that owns primarily 8 percent-yielding bonds would return 8 percent to
investors. In fact, the yield from the fund is based primarily on the trading of
bonds, which are extraordinarily sensitive to interest rates. Thus, one could
find a bond fund that was earning double-digit returns as the prime rate
climbed from 4 percent to 6 percent.


                                   15
                In addition to mutual funds, there are money market funds,
which are essentially mutual funds that invest solely in government-insured
short-term instruments. These funds nearly always reflect the current interest
rates, and rarely engage in interest-rate speculation.

Benefits of Mutual Fund



Reduction in risk:

               Mutual funds invest in a portfolio of securities. This means that
all funds are not invested in the same Investment Avenue. Holding a portfolio
that is diversified across investment avenues is a wise way to manage risk.
When such a portfolio is liquid and marked to market, it enables investors to
continuously evaluate the portfolio and manage their risks more efficiently.

Reduction in transaction costs:

                Through the individual investor’s contribution may be small;
the mutual fund itself is large enough to be able to reduce costs in its
transactions. These benefits are passed on to the investors.

Portfolio Diversification:

                By offering readymade diversified portfolios, mutual fund
enables investors to hold diversified portfolios. Through investors can create
their own diversified portfolios, the costs of creating and monitoring such
portfolios can be high, apart from the fact that investors may lack the
professional expertise to manage such a portfolio.




                                    16
Liquidity:

                 Open-ended funds are very liquid as the Mutual Fund
companies offer an open window for redemption on all working days. The
redemption proceeds are normally dispatched within three to four working
days.

Professional fund management:

                Investing in markets requires both knowledge and expertise.
Experienced fund managers are able to trade or negotiate better deals, manage
the price risk effectively, exploit trends and opportunities and constantly
monitor the environment.

Tax efficiencies:

                Investing in mutual funds is tax efficient. If investors choose
the growth option and stay invested for a year, they only pay long term
Capital Gains of 20.4% of indexed returns or 10.2% of un indexed returns
(whichever is lower).

Diversification:

               Diversification is the core of any investment strategy. It allows
you to minimize the risks associated with any investment. However, it is very
difficult for individuals to have the requisite diversification for your
investment given smaller portfolios and transaction costs. Mutual Funds can
pool in the investments of thousands of investors and achieve the desired level
of diversification for each.



                                   17
Regulated:

               Private sector MFs are governed by the regulatory framework
lay down by SEBI. This ensures strict control over investment practices.

Code of conduct AMFI CERTIFICATION:

                   AMFI has come out with a code of conduct. Accordingly,
passing the AMFI Test has been made mandatory by SEBI in a phased
manner. As per SEBI Circular dated September25, 2001 all agents/distributors
appointed from November1, 2001 have to obtain AMFI certification prior to
their appointment. In case of firms and corporate the requirement of
certification is applicable to persons engaged in sales and marketing. Existing
agent distributors are expected to pass the certification program by March3,
2003. Vide this notification any RM / CSE / CSM who intent to sell mutual
funds to his customers should be AMFI certified. For further details please
contact IA’s of your region.

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   .

                                       18
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
                 We 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.




                                     19
  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.




  Some of the AMCs operating currently are:


                 Name of the AMC                                     Nature of
                                                                     ownership
    Alliance Capital Asset Management (I) Private                  Private foreign
                        Limited
 Birla Sun Life Asset Management Company Limited                   Private Indian
Bank of Baroda Asset Management Company Limited                        Banks
 Bank of India Asset Management Company Limited                        Banks
 Canbank Investment Management Services Limited                        Banks
    Cholamandalam Cazenove Asset Management                        Private foreign
                   Company Limited
    Dundee Asset Management Company Limited                        Private foreign
  DSP Merrill Lynch Asset Management Company                       Private foreign
                        Limited
         Escorts Asset Management Limited                          Private Indian
        First India Asset Management Limited                       Private Indian
      GIC Asset Management Company Limited                           Institutions
  IDBI Investment Management Company Limited                         Institutions
             Indfund Management Limited                                Banks
ING Investment Asset Management Company Private                    Private foreign
                        Limited
          J M Capital Management Limited                           Private Indian
   Jardine Fleming (I) Asset Management Limited                    Private foreign
Kotak Mahindra Asset Management Company Limited                    Private Indian
Kothari Pioneer Asset Management Company Limited                   Private Indian

                                      20
 Jeevan Bima Sahayog Asset Management Company               Institutions
                       Limited
Morgan Stanley Asset Management Company Private          Private foreign
                       Limited
 Punjab National Bank Asset Management Company                Banks
                       Limited
Reliance Capital Asset Management Company Limited        Private Indian
   State Bank of India Funds Management Limited              Banks
    Shriram Asset Management Company Limited             Private Indian
 Sun F and C Asset Management (I) Private Limited        Private foreign
   Sundaram Newton Asset Management Company              Private foreign
                       Limited
      Tata Asset Management Company Limited              Private Indian
 Credit Capital Asset Management Company Limited         Private Indian
Templeton Asset Management (India) Private Limited       Private foreign
                  Unit Trust of India                      Institutions
   Zurich Asset Management Company (I) Limited           Private foreign




                     Banks v/s Mutual Funds


                           BANKS                     MUTUAL FUNDS
  Returns                  Low                       Better
  Administrative exp.      High                      Low
  Risk                     Low                       Moderate
  Investment options       Less                      More
  Network                  High penetration          Low but improving
  Liquidity                At a cost                 Better
  Quality of assets        Not transparent           Transparent
  Interest calculation     Minimum balance           Everyday
                           between 10th. &
                           30th. Of every month
  Guarantee                Maximum Rs.1 lakh         None
                                  21
                               deposits



    Reliance Mutual Funds Schemes

   Reliance Vision Fund (September 1995)
   Reliance Growth Fund (September 1995)
   Reliance Income Fund (December 1997),
   Reliance Liquid Fund (March 1998)
   Reliance Medium Term Fund (August 2000),
   Reliance Short Term Fund (December 2002),
   Reliance Fixed Term Scheme (March 2003),
   Reliance Banking Fund (May 2003),
   Reliance Gilt Securities Fund (July 2003),
   Reliance Monthly Income Plan (December 2003),
   Reliance Diversified Power Sector Fund (March 2004)
   Reliance Pharma Fund (May 2004)




        DEBT SCHEMES
        Reliance Monthly Income Plan             Scheme Options
        Reliance Income Fund                     Scheme Options
        Reliance Medium Term Fund                Scheme Options
        Reliance Liquid Fund                     Scheme Options
        Reliance Short Term Fund                 Scheme Options
        Reliance Gilt Securities Fund            Scheme Options
        Reliance Fixed Term Scheme               Scheme Options


                                        22
                 EQUITY SCHEMES
                 Reliance Growth Fund        Scheme Options
                 Reliance Vision Fund        Scheme Options




    SECTOR SPECIFIC SCHEMES
    Reliance Banking Fund                    Scheme Options
    Reliance Diversified Power Sector        Scheme Options
    Fund
    Reliance Pharma Fund                    Scheme Options




    EQUITY SCHEMES

RELIANCE VISION FUND (An Open End Equity Growth Scheme):

                  The objective is to achieve long-term growth of capital through
    a research based investment approach.




                                     23
Our Strategy:

                We invest in fundamentally strong stocks with good growth
potential. Fresh inflows are being invested in suitable opportunities at
appropriate times. Portfolio is reshuffled based on various industry and
company specific developments.

RELIANCE GROWTH FUND (An Open End Equity Growth
Scheme)

The investment objective is to achieve long-term growth of capital through a
research based investment approach.

Our Strategy:

                We continue with our strategy as in Vision Fund of investing in
fundamentally strong stocks with good growth potential. Fresh inflows being
invested in suitable opportunities at appropriate times. Portfolio is reshuffled
based on various industry and company specific development.

SECTOR FUNDS

                Sector Funds are Specialty Mutual Funds that invest in stocks
falling into a certain sector of the economy. Here the portfolio is dispersed or
spread across the stocks in that particular sector. This type of scheme is ideal
for investors who have already made up their mind to confine risk and return
to a particular sector.




                                    24
RELIANCE BANKING FUND

              Reliance Mutual Fund has a Banking Sector Specific Scheme
which     has the primary investment objective to generate continuous returns
by actively investing in equity / equity related or fixed income securities of
banks.

Reliance Diversified Power Sector Fund

               Reliance Diversified Power Sector Scheme is an Open-end
Power Sector Scheme. The primary investment objective of the Scheme is to
seek to generate consistent returns by investing in equity / equity related or
fixed income securities of Power and other associated companies.




                     RELIANCE PHARMA FUND

Reliance Pharma Fund is an Open-end Pharma Sector Scheme.

The primary investment objective of the Scheme is to generate consistent
returns by investing in equity / equity related or fixed income securities of
Pharma and other associated companies.

PRODUCT PROFILE (SCHEMES) OF RELIANCE MUTUAL
FUND

(A) PRODUCT:

We are having so many schemes of Reliance Mutual Funds, here we have
categorized those schemes is –

                                    25
1. Equity:

   a) Vision
   b) Growth

2. Debt:

   a. Gilt securities
   b. Monthly Income Plan
   c. Medium Term Fund
   d. Liquid Fund
   e. Short Term Fund

3. Sector Specific:

   a. Pharma fund
   b. Power Fund
   c. Banking Fund




(B) PRICE:

CAPITALIZATION:

The figures of over 24,000 applications amounting to over Rs.147 crores have
indeed exceeded all over expectations and our total assets under management
have also been notched up to Rs. 10,806 crores. As on May 31, 2004
expectations and our total assets under management have also been notched
up to Rs. 10,806 crores. As on May 31, 2004


                                  26
  Minimum Corpus:

                  The fund seeks to collect a minimum corpus of Rs. 1 crore.
  There will not be any maximum limit on the amount raised and the fund will
  make full and firm allotments against all valid applications. In the event this
  amount is not raised during the initial offer period, the amount collected will
  be in the event this amount is not raised during the initial offer period, the
  amount collected will be refunded to the applicants in accordance with SEBI
  Regulations. Refund of subscription amount to applicants whose applications
  are invalid for any reason whatsoever, will commence after the allotment
  process is completed.

Purchase of Units:

                  Investors can purchase units under the schemes at the purchase
  price. The unit holder can request for purchase of units by amount and not by
  number of units.

     a. Minimum Amount:
  The following are the minimum purchase amounts for the scheme:

  Resident Investors:

  Dividend Plan- Rs. 5000

  Growth Plan- Rs. 5000

  NRI/PIO/FIIs:

  For all plans: Rs. 10,000

     o   The minimum purchase amount is specified above. Any purchases
         thereafter can be made in multiples of Re. 1/-.

                                       27
   o   For minimum purchase amount in Recurring Investment Plan (RIP)
       please refer to the recurring Investment Plan in Section.
   o   The fund may revise the minimum/maximum amounts and the
       methodology for new/additional subscriptions as and when necessary.
       Such change may be brought about after taking into account the cost
       structure for a transaction/account and/or market practices and/or the
       interest of existing unit holders. Further, such changes shall only be
       applicable to transactions from the date of such change.

   b. Purchase Price:

The purchase Price will be calculated on the basis of the entry load. It is
calculated in the following way:

Purchase Price= Applicable NAV * (1+Entry Load)

For detailed explanation on loads, please refer the section on “Loads and
Recurring Expenses”. After every subscription transaction a fresh Account
statement Transaction confirmation slip will be dispatched, reflecting the
updated holding of the unit holder, subject to realization of the payment.
Under normal circumstances, Reliance Mutual Fund endeavors to dispatch.
Account statement within five working days from the date of receipt of the
application form/transaction slip at the designated investor service center.

However, the fund reserves right to provide the account statement/transaction
confirmation slip to investor through an alternative mechanism as may be
decided by the fund from time to time. The alternative mechanism may
include electronic means of communication such as e-mail etc. The alternative
mechanism to provide the account statement/transaction confirmation slop
will be provided only to those investor who have specifically opted for the
                                    28
alternative mechanism. For example, if an investor in future, redeems or
switches his units to another scheme/plan on the internet, then an online
account statement/transaction confirmation may be provided to the investor or
the same may be sent to his e-mail address.

   o   PLACE:
Reliance capital Asset Management Limited is an asset management
company:

   o   Its Corporate Office is at Mumbai.
   o   Its Registration House is at Hyderabad.
   o   One of its Regional Office is at Jaipur.

But it has so many branches all over the country.

Complete structure of Reliance Mutual Fund

   o   Sponsor-Reliance Capital Limited (Mumbai)
   o   Trustee-Reliance Capital Trustee Co. Limited (Mumbai)
   o   Investment manager-Reliance Capital Asset Management Limited
       (Mumbai).
   o   Registrar-Karvy Computer share Private Limited (Hyderabad).
   o   Custodian: Deutsche Bank AG (Mumbai) .
   o   Auditors to the scheme- Haribhakti & Co. Charted Accountant
       (Mumbai).
   o   Legal Advisors to the scheme- Dave & Girish & Co. Advocates
       (Mumbai).




                                    29
     d. PROMOTION:-


     o    We have wide spread distribution channel located in all major cities of
          India.
     o    We have good network of brokers through every asset management
          company.
     o    We have a good network of brokers in small cities also to trap minor
          investors.

   SWOT ANALYSIS

                                STRENGTHS:-
1. Brand Name:

  The biggest strength is the tag of Reliance is going to be the largest group of
  industries.

2. Compatible Price:

  Prices of different schemes of Reliance Mutual Funds are much more
  compatible than others.

3. Diversified Schemes:

  We have diversified schemes which are an exception case of Reliance Mutual
  Fund.




                                      30
4. Less Risk:

  Our debt schemes are 100% free form market risk. Even as our portfolio is
  that diversified so equities are also less risky than others.

5. Easy procedures of redemption & registration too:

  We have open ended schemes so Mutual funds are easily redeemable.

                              WEAKNESS: -


1. Prone to Market Risk:

  Mutual Funds depend on overall macro economic condition and market
  scenario.

2. Tough Competitions:

  There is a very tough competition because of large number of Asset
  Management Companies.




                                       31
                   OPPORTUNITIES:-


1. Hoarding: Most of the Indians have black money that too in huge amount
   i.e. the do not have money in banks, so approaching them is beneficial.

2. Indian Capital Market is Growing:
   So more & more new investors are interested in investments.

3. Tailor Made Products:
   We have tailor made products like sector specified schemes & even
   diversified schemes.

4. Branch Expansion:
   Large no. of branches are opening day by day and even we are trapping the
   countries having almost same type of socio-economic condition & even same
   culture etc.

                              THREATS:-


1. Tough Competition:
   As there are so many mutual fund companies having almost same kind of
   schemes, so its tough to compete with.

2. Unawareness:




                                     32
     Compitive analysis Of Equity Schemes Of
                          Reliance Mutual
    Fund With Equity Schemes Of Other AMC




Equity Schemes




      Of

Reliance Mutual Fund
    Some Prominent Equity Schemes of Reliance Mutual in which it is dealing
    are: -


  Reliance Equity Fund :

        It is an open-ended diversified Equity Scheme. The primary investment

    objective of the scheme is to seek to generate capital appreciation &

    provide long-term growth opportunities by investing in a portfolio

                                       33
    constituted of equity & equity related securities of top 100 companies

market capitalization & of companies which are available in the

derivatives segment from time to time and the secondary objective is to

generate consistent returns by investing in debt and money market

securities.

   Reliance Tax Saver (ELSS) Fund :

It is an Open-ended Equity Linked Savings Scheme.The primary

objective of the scheme is to generate long-term capital appreciation

from a portfolio that is invested predominantly in equity and equity

related instruments.

   Reliance Equity Opportunities Fund :


It is an Open-Ended Diversified Equity Scheme.The primary

Investment objective of the scheme is to seek to generate capital

appreciation & provide long-term growth opportunities by investing in a

portfolio constituted of equity securities & equity related securities and

the secondary objective is to generate consistent returns by investing in

debt and money market securities.




                                           34
 Reliance Vision Fund :


It is an Open-ended Equity Growth Scheme.The primary investment

 objective of the Scheme is to achieve long term growth of capital by

investment in equity and equity related securities through a research

based investment approach.


 Reliance Growth Fund :

  It is an Open-ended Equity Growth Scheme.The primary investment

 objective of the Scheme is to achieve long term growth of capital by

 investment in equity and equity related securities through a research

 based investment approach.

 Reliance Index Fund :

  It is an Open Ended Index Linked Scheme.The Investment Objective

 under the Nifty Plan is to replicate the composition of the Nifty, with a

 view to endeavor to generate returns, which could approximately be the

 same as that of Nifty. The Investment Objective under the Sensex plan

 is to replicate the composition of the Sensex, with a view to endeavor to

 generate returns, which could approximately be the same as that of

 Sensex.




                                        35
Reliance NRI Equity Fund :

It is an open-ended Diversified Equity Scheme.The Primary investment

objective of the scheme is to generate optimal returns by investing in

equity or equity related instruments primarily drawn from the

Companies in the BSE 200 Index.




                                      36
                            SBI MUTUAL FUND




This is the first Fund, whose different Equity Schemes will be compared with the
Equity Schemes Of Reliance Money. SBI Mutual Fund is a fund that would
endeavour to participate in the all – round growth of the Indian Economy through a
dedicated investment approach focused on the four regions of the country.




                                        37
 Given below are some Comparisons. They are as under: -
 SBI Magnum Tax Gain Scheme (G) and Reliance Tax Saver (ELSS) (G).



Scheme Name                 SBI Magnum Tax Gain           Reliance Tax Saver (ELSS)
                            Scheme (G)                    (G)
Mutual Fund Family          SBI Funds Management          Reliance Capital Asset
                            Pvt. Ltd.                     Management Ltd.
AMC Assets (Rs. in          19660.83                      59143.48
Crore)
Fund Class                  Equity Tax Saving             Equity Tax Saving
Scheme Assets (Rs in        2046.12                       1703.44
crore)
Inception Date              Mar-31-1993                   Aug-23-2005
Minimum Investment          500                           500

Last dividend (Rs/Unit)     -                             -

Minimum Investment          500                           500
Entry Load                  2.25%                         2.25%
Exit Load                   0%                            0%
Load comment                Entry Load - 2.25% for        Entry Load - 2.25% for
                            subscriptions below Rs 2      subscriptions below Rs 2
                            crores, 1.25% for             crores, 1.25% for
                            subcription of Rs 2 crores    subcription of Rs 2 crores
                            & above and below Rs 5        & above and below Rs 5
                            crores.                       crores.
Fund Manager                Gopal Agrawal                 Ashwani Kumar




                                          38
                          Absolute Returns As On May-31-2007


MONTH           SBII
                SB           RELIIANCE
                             REL ANCE
3 Months        11..4%
                11 4%        8..7%
                             8 7%
6 Months        9..4%
                9 4%         1..4%
                             1 4%
1 Year          46..3%
                46 3%        33..1%
                             33 1%




                DIFFERENCE BETWEEN SBI AND RELIANCE

            50.00%

            40.00%
   GROWTH




            30.00%                                              Series1
            20.00%                                              Series2

            10.00%

            0.00%
                         3 Months      6 Months        1 Year
                                         TIME




                                          39
  SBI Magnum Contra Fund (G ) and Reliance Vision Fund (G)


Scheme Name               SBI Magnum Contra Fund        Reliance Vision Fund (G)
                          (G )
Mutual Fund Family        SBI Funds Management          Reliance Capital Asset
                          Private Limited               Management Ltd.
AMC Assets (Rs in cr)     19660.83                      59143.48
Fund Class                Equity Diversified            Equity Diversified
Scheme Assets (Rs in cr) 1837.07                        2970.37

Inception Date            Jul-31-1999                   Sep-07-1995
Latest NAV (Rs/Unit) as   41.43                         200.01
on 24 June, 2007
Last dividend (Rs/Unit)   2.1 as on Nov-09-2004         -

Minimum Investment        2000                          5000
Entry Load                2.25%                         2.25%

Exit Load                 1%                            0%
Load comment              Entry Load - 2.25% for        Entry Load - 2.25% for
                          Investments below Rs. 5       subscriptions below Rs 2
                          crores, Exit Load - 1% for    crores, 1.25% for
                          Investments below Rs.5        subcription of Rs 2 crores
                          crores if redeemed within 6   & above and below Rs 5
                          months                        crores.
Fund Manager              Pankaj Gupta                  Ashwani Kumar

Absolute Returns as on May-31-2007

3 Months                  16.2%                         18.9%
6 Months                  12.3%                         14.0%
1 Year                    42.6%                         49.3%
2 Years                   135.9%                        122.3%
3 Years                   399.3%                        285.7%
5 Years                   857.3%                        691.9%
                                        40
SBI Magnum Contra Fund (G) and Reliance RSF – Equity


Scheme Name               SBI Magnum Contra Fund        Reliance RSF – Equity
                          (G)
Mutual Fund Family        SBI Funds Management          Reliance Capital Asset
                          Private Limited               Management Ltd.
AMC Assets (Rs in cr)     19660.83                      59143.48
Fund Class                Equity Diversified            Equity Diversified
Scheme Assets (Rs in cr) 1837.07                        222.03

Inception Date            Jul-31-1999                   May-10-2005
Latest NAV (Rs/Unit) as   41.43                         16.796
on 24 June, 2007
Last dividend (Rs/Unit)   2.1 as on Nov-09-2004         -

Minimum Investment        2000                          500
Entry Load                2.25%                         2.25%
Exit Load                 1%                            0%
Load comment              Entry Load - 2.25% for        Entry Load - 2.25% for
                          Investments below Rs. 5       subscriptions below Rs 2
                          crores, Exit Load - 1% for    crores, 1.25% for
                          Investments below Rs.5        subcription of Rs 2 crores
                          crores if redeemed within 6   & above and below Rs 5
                          months                        crores.
Fund Manager              Pankaj Gupta                  Ashwani Kumar/ Prashant
                                                        Pimple




                                        41
Absolute Returns as on May-31-2007


3 Months            16.2%            15.6%

6 Months            12.3%            11.3%
1 Year              42.6%            52.2%
2 Years             135.9%           69.6%
3 Years             399.3%           -
5 Years             857.3%           -




                             42
                             BIRLA SUN LIFE




This is another competitor of Reliance Money in the market of Mutual Funds. There
are some Equity Schemes of Birla Sun Life which are being compared with the
Equity Schemes of Reliance Money as under : -




                                       43
   Birla Equity Plan (G) and Reliance Equity Fund (G)



Scheme Name                      Birla Equity Plan (G). Reliance Equity Fund
                                                      (G)
Mutual Fund Family               Birla Sun Life Asset Reliance Capital Asset
                                 Management Company Management Ltd.
                                 Ltd
AMC Assets (Rs in cr)            23719.46             59143.48
Fund Class                       Equity Tax Saving           Equity Diversified

Scheme Assets (Rs in cr)         125.12                      3800.47

Inception Date                   Oct-01-2006                 Mar-07-2006
Latest NAV (Rs/Unit) as on 24    12.07                       12.37
June, 2007
Last dividend (Rs/Unit)          -                           -



Minimum Investment         500                            5000
Entry Load                 2.25%                          2.25%
Exit Load                  0%                             0%
Load comment               Entry load of 2.25% for        Entry Load - 2.25% for
                           each purchase/switch-in of     subscriptions below Rs 2
                           units for less than Rs 5       crores, 1.25% for
                           crores.                        subcription of Rs 2 crores
                                                          & above and below Rs 5
                                                          crores.
Fund Manager               Jayesh Gandhi                  Sunil B. Singhania


Absolute Returns as on May-31-2007

3 Months                   16.2%                           14.3%
6 Months                   12.1%                           9.2%
1 Year                     34.8%                           -

                                         44
Birla Tax Plan 98 and Reliance Tax Saver (ELSS) (G)

Scheme                    Birla Tax Plan 98      Reliance Tax Saver (ELSS)
                                                 (G)
Mutual Fund Family        Birla Sun Life Asset   Reliance Capital Asset
                          Management Company     Management Ltd.
                          Ltd.
AMC Assets (Rs in cr)     23719.46               59143.48
Fund Class                Equity Tax Saving      Equity Tax Saving
Scheme Assets (Rs in cr) 7.16                    1703.44
Inception Date           Dec-01-1997             Aug-23-2005
Latest NAV (Rs/Unit) as   216.26                 14.73
on 24 June, 2007
Last dividend (Rs/Unit)   -                      -
Minimum Investment        500                    500
Entry Load                0%                     2.25%
Exit Load                 0%                     0%
Load comment              -                      Entry Load - 2.25% for
                                                 subscriptions below Rs 2
                                                 crores, 1.25% for
                                                 subcription of Rs 2 crores
                                                 & above and below Rs 5
                                                 crores.
Fund Manager              Jayesh Gandhi          Ashwani Kumar

Absolute Returns as on May-31-2007


MONTH                     BRILA                  RELIANCE

3 Months                  14.4%                  8.7%

6 Months                  8.1%                   1.4%
1 Year                    39.1%                  33.1%
2 Years                   100%                   -

                                      45
           DIFFERENCE BETWEEN BRILA AND RELIANCE

         120.00%
         100.00%

         80.00%
GROWTH




                                                               Series1
         60.00%
                                                               Series2
         40.00%

         20.00%
          0.00%
                   3 Months   6 Months      1 Year   2 Years
                                     TIME




                                    46
ICICI PRUDENTIAL FUND




ICICI is another strong competitor of Reliance Money. The comparison of different
Equity Schemes can be seen as below : -




                                        47
  ICICI Pru Dynamic Plan (G) and Reliance Growth Fund (G)



Scheme                    ICICI Pru Dynamic Plan      Reliance Growth Fund (G)
                          (G)
Mutual Fund Family        ICICI Prudential Asset      Reliance Capital Asset
                          Mgmt.Co. Ltd                Management Ltd.
AMC Assets (Rs in cr)     50703.00                    59143.48
Fund Class                Equity Diversified          Equity Diversified
Scheme Assets (Rs in cr) 2278.67                      3775.92
Inception Date           Oct-18-2002                  Sep-08-1995
Latest NAV (Rs/Unit) as   69.969                      294.38
on 24 June, 2007
Last dividend (Rs/Unit)   -                           -
Minimum Investment        5000                        5000
Entry Load                2.25%                       2.25%
Exit Load                 0%                          0%
Load comment              Entry load of 2.25% for     Entry Load - 2.25% for
                          investment less than Rs 5   subscriptions below Rs 2
                          crores.                     crores, 1.25% for
                                                      subcription of Rs 2 crores
                                                      & above and below Rs 5
                                                      crores.
Fund Manager              Anil Sarin                  Sunil B. Singhania




                                       48
Absolute Returns as on May-31-2007


MONTH                           ICICI                          RELIANCE


3 Months                        10.1%                          16.6%


6 Months                        8.4%                           16.3%

1 Year                          48.4%                          51.6%

2 Years                         141.8%                         125.6%

3 Years                         333.2%                         359.8%

5 Years                         -                              916.1%




                DIFFERENCE BETWEEN ICICI AND RELIANCE

           1000.00%
            900.00%
            800.00%
            700.00%
  GROWTH




            600.00%
                                                                                   Series1
            500.00%
                                                                                   Series2
            400.00%
            300.00%
            200.00%
            100.00%
             0.00%
                      3 Months 6 Months   1 Year     2 Years   3 Years   5 Years
                                                  TIME




                                             49
  ICICI Pru Tax Plan (G) and Reliance Tax Saver (ELSS) (G)


Scheme                    ICICI Pru Tax Plan (G)      Reliance Tax Saver (ELSS)
                                                      (G)
Mutual Fund Family        ICICI Prudential Asset      Reliance Capital Asset
                          Mgmt.Co. Ltd                Management Ltd.
AMC Assets (Rs in cr)     50703.00                    59143.48
Fund Class                Equity Tax Saving           Equity Tax Saving
Scheme Assets (Rs in cr) 700.14                       1703.44
Inception Date           Aug-09-1999                  Aug-23-2005
Latest NAV (Rs/Unit) as   92.43                       14.73
on 24 June, 2007
Last dividend (Rs/Unit)   6 as on Mar-21-2000         -
Minimum Investment        500                         500
Entry Load                2.25%                       2.25%
Exit Load                 0%                          0%
Load comment              Entry load of 2.25% for     Entry Load - 2.25% for
                          investment less than Rs 5   subscriptions below Rs 2
                          crores.                     crores, 1.25% for
                                                      subcription of Rs 2 crores
                                                      & above and below Rs 5
                                                      crores.
Fund Manager              Sankaran Naren              Ashwani Kumar




Absolute Returns as on May-31-2007


3 Months                  10.5%                       8.7%
6 Months                  1.4%                        1.4%
1 Year                    22.0%                       33.1%
2 Years                   71.2%                       -
3 Years                   288.9%                      -
5 Years                   592.5%                      -

                                      50
  ICICI Pru Fusion Fund (G) and Reliance RSF – Equity (G)

Scheme                    ICICI Pru Fusion Fund (G)     Reliance RSF – Equity (G)
Mutual Fund Family        ICICI Prudential Asset        Reliance Capital Asset
                          Mgmt.Co. Ltd                  Management Ltd.
AMC Assets (Rs in cr)     50703.00                      59143.48
Fund Class                Equity Diversified            Equity Diversified
Scheme Assets (Rs in cr) 701.03                         222.03
Inception Date           Feb-27-2006                    May-10-2005
Latest NAV (Rs/Unit) as   13.39                         16.796
on 24 June, 2007
Last dividend (Rs/Unit)   -                             -
Minimum Investment        5000                          500
Entry Load                0%                            2.25%
Exit Load                 5%                            0%
Load comment              Exit load of 5% for           Entry Load - 2.25% for
                          investment < or = 1 yr; 4%    subscriptions below Rs 2
                          for > 1yr but < or = 2 yrs;   crores, 1.25% for
                          3% for > 2 yr but < or = 3    subcription of Rs 2 crores
                          yrs; 2% for > 3 yr but < or   & above and below Rs 5
                          = 4 yrs; 1% for investment    crores.
                          > 4 yr but redeemed before
                          date of maturity
Fund Manager              Anil Sarin                    Ashwani Kumar/Prashant
                                                        Pimple

Absolute Returns as on May-31-2007


3 Months                  26.6%                         19.8%

6 Months                  15.8%                         9.8%
1 Year                    57.0%                         60.8%
2 Years                   -                             70.5%



                                       51
                          KOTAK MUTUAL FUND




The another competitor of Reliance Money in the market of Mutual Funds is Kotak
Mutual Fund. Given below is the comparison between Equity Schemes of both the
Companies : -




                                       52
  Kotak Tax Saver (G) Reliance Tax Saver (ELSS) (G)


Scheme                    Kotak Tax Saver (G)        Reliance Tax Saver (ELSS)
                                                     (G)
Mutual Fund Family        Kotak Mahindra Asset       Reliance Capital Asset
                          Mgmt Co. Ltd               Management Ltd.
AMC Assets (Rs in cr)     16722.56                   59143.48
Fund Class                Equity Tax Saving          Equity Tax Saving
Scheme Assets (Rs in cr) 245.67                      1703.44

Inception Date            Oct-28-2005                Aug-23-2005
Latest NAV (Rs/Unit) as   16.121                     14.73
on 24 June, 2007
Last dividend (Rs/Unit)   -                          -
Minimum Investment        500                        500

Entry Load                2.25%                      2.25%

Exit Load                 0%                         0%

Load comment              Entry Load - 2.25% for    Entry Load - 2.25% for
                          purchase/switch-in amount subscriptions below Rs 2
                          less than Rs 3 crores.    crores, 1.25% for
                                                    subcription of Rs 2 crores
                                                    & above and below Rs 5
                                                    crores.
Fund Manager              Nitin Jain                Ashwani Kumar



Absolute Returns as on May-31-2007

MONTH                     RELIANCE                   KOTAK
3 Months                  17.6%                      8.7%
6 Months                  17.1%                      1.4%
1 Year                    52.9%                      33.1%


                                        53
           DIFFERENCE BETWEEN RELIANCE AND KOTAK

         60.00%
         50.00%

         40.00%
GROWTH




                                                   Series1
         30.00%
                                                   Series2
         20.00%

         10.00%
         0.00%
                  3 Months   6 Months   1 Year
                              TIME




                               54
                            UTI MUTUAL FUND




This is another Fund dealing in the Mutual Funds and is the competitor of Reliance
Money. The comparison between Equity Schemes of both the Companies can be
explained as below : -




                                        55
  UTI Equity Fund (G) and Reliance Equity Fund (G)

Scheme                    UTI Equity Fund (G)         Reliance Equity Fund (G)
Mutual Fund Family        UTI Asset Mgmt Company      Reliance Capital Asset
                          Pvt. Ltd.                   Management Ltd.
AMC Assets (Rs in cr)     40070.17                    59143.48
Fund Class                Equity Diversified          Equity Diversified
Scheme Assets (Rs in cr) 1621.61                      3800.47
Inception Date           May-18-1992                  Mar-07-2006
Latest NAV (Rs/Unit) as   32.25                       12.37
on 24 June, 2007
Last dividend (Rs/Unit)   2 as on Jul-19-2006         -

Minimum Investment        5000                        5000
Entry Load                2.25%                       2.25%
Exit Load                 0%                          0%
Load comment              Entry load of 2.25% for     Entry Load - 2.25% for
                          investments < Rs 25 lacs    subscriptions below Rs 2
                          and 0.50% for investments   crores, 1.25% for
                          > Rs 25 lacs but < than 2   subcription of Rs 2 crores
                          crores.                     & above and below Rs 5
                                                      crores.
Fund Manager              Siddharth Dembi             Sunil B. Singhania




Absolute Returns as on May-31-2007

3 Months                  14.2%                       15.6%

6 Months                  5.9%                        7.6%
1 Year                    23.7%                       38.6%



                                      56
  UTI Contra Fund (G) and Reliance Vision Fund (G)


Scheme                    UTI Contra Fund (G)          Reliance Vision Fund (G)
Mutual Fund Family        UTI Asset Mgmt Company       Reliance Capital Asset
                          Pvt. Ltd.                    Management
AMC Assets (Rs in cr)     40070.17                     59143.48
Fund Class                Equity Diversified           Equity Diversified
Scheme Assets (Rs in cr) 641.62                        2970.37
Inception Date           Mar-22-2006                   Sep-07-1995
Latest NAV (Rs/Unit) as   9.89                         200.01
on 24 June, 2007
Last dividend (Rs/Unit)   -                            -
Minimum Investment        5000                         5000
Entry Load                2.25%                        2.25%
Exit Load                 0%                           0%
Load comment              Entry load of 2.25% for      Entry Load - 2.25% for
                          investments < than Rs        subscriptions below Rs 2
                          2crore, Exit load of 0.50%   crores, 1.25% for
                          for investments => Rs 2      subcription of Rs 2 crores
                          crore if exited within 6     & above and below Rs 5
                          months from date of          crore.
                          allotment.
Fund Manager              Siddharth Dembi              Ashwani Kumar




                                      57
Absolute Returns as on May-31-2007
Month                     UTI                                RELIANCE

3 Months                  10.1%                              22.4%

6 Months                  0.4%                               11.7%
1 Year                    20.6%                              55.7%
2 Years                   -                                  125.6%
3 Years                   -                                  266.3%
5 Years                   -                                  684.1%




            DIFFERENCE BETWEEN RELIANCE AND UTI

            700.00%
            600.00%
            500.00%
            400.00%
  GROWTH
            300.00%                                                      Series1
            200.00%                                                      Series2
            100.00%
              0.00%
                        3      6      1 Year   2 Years 3 Years 5 Years
                      Months Months
                                          TIME




                                         58
                                   Illustrations

The returns of each year that are shown above in the Graphs are calculated on the
basis of NAV. NAV is the rate of Mutual Fund, on which the amount is being
invested and units are allotted.

Net Asset Value (NAV) is the actual value of one unit of a given scheme for a given
business day.

Units in the schemes are alloted on the basis of the Sale Price, which is calculated as
follows : -

Sale Price= NAV *(1+ Entry Load)


Units in the schemes are repurchased on the basis of Repurchase Price, which is
calculated as follows : -

Repurchase Price= NAV *(1- Exit Load)




                                          59
                              Summary Of Thesis



After completion of Thesis, I can summarize that there are many Companies in the
Market which are dealing in same set of products and as a result, becomes the
competitor of each other.

In my study, I had compared different Equity Schemes of different Companies with
that of Reliance Mutual fund Here, Reliance Mutual fund was taken as a base and
rest of the company’s Equity Schemes were being compared with it.

I had also taken the help of Tables and Graphs in preparing my Thesis for making it
easily understandable for the readers.

The objective behind the preparation of Management Thesis was only that to make
the comparative study of performance evaluation of various equity schemes of
Reliance money and other major players/competitors in the market.

My Thesis also signifies the growth and returns obtained from Equity Schemes of
different companies and verifies that how these growth and returns that are obtained
from different Equity Schemes are in competition with Equity Schemes of Reliance
Mutual which are also giving good returns and performing well in the market of
Mutual Funds. .

The competitors of Reliance Mutual, with whom a comparison has been made were
SBI, ICICI, Birla Sun Life,




                                         60
                                  Introduction




The comparative study of performance evaluation of Equity Schemes of       Reliance
Mutual and other major players in the market defines and describes the overall goal
of the project. The topic also covers the information about the company and the
main problems faced by the company. The main goal behind this study is to evaluate
a program, to develop knowledge about a particular area and perform a need
analysis. The topic that I had studied includes comparison between Equity Schemes
of Reliance Mutual with Equity Schemes of other major competitive firms in the
market. The problems that the company is facing because of other competitors was
also stated and how the company

The actual need for project aroses only to analyse the market conditions and to be
aware of the market scenario. The major competitors of the company was also
known to me. By this research, the various Equity Schemes of different companies
was studied by me. By this study, the practical knowledge was being gained which
cannot be possible by applying it theoretically.




                                          61
   Research Methodology:

   Research is a way to systematically the various research problems. It includes
   the various steps that are generally adopted by the researcher in studying the
   research problem along with the logic being them. The steps are as follows:

   Problem Definition:

      o Why the returns in those schemes?
      o What are the lacunas?
      o What is the position or rank of Reliance mutual fund?

   Research objectives:

      o     To compare the Reliance Mutual fund schemes with top ranked mutual
            funds like Frankline Templeton, HDFC, Birla, Ect.
      o     To find position of Reliance Mutual fund among the others.
      o     To find out the lacunas in the schemes

               By the study, I had analyzed the objectives of my research.
               The main objectives behind the study are as under:-



1. To identify the Equity Schemes of Reliance Mutual and other competitive
   firms.
2. To make comparative study of Equity Schemes of Reliance Mutual and other
   major players in the market.

                                         62
3. To gain Knowledge about various Equity Schemes of different companies.
4. To know about various benefits and drawbacks of investing in different
   Equity Schemes of different Companies.
5. To be aware of the various Competitive players of Reliance in the market.
6. To apply practically whatever is learned theoretically.
7. To analyze various problems faced by the company and finds the solution for
   it.
8. To collect information about the minimum investments in different Equity
   funds in different companies which differentiates them with the Reliance
   Mutual.
9. To know about the portfolios of different companies in which the amount is
   being invested.
10.To attract more and more customers towards various        schemes provided by
   different companies.
11.To evaluate the performance of Equity Schemes of different companies.




                                      63
                                    Limitations



Every Project, if, having some advantages, also involves several disadvantages also.
These Limitations can become the major drawback in the progress of the Company.

The main Limitations of the study are as follows:-

    First of all, the major drawback is that, we have to perform our work in
      Udaipur itself because of which, we were not be able to understand the market
      situation of other cities practically. This is the reason that, my study is
      restricted to Udaipur only.


    Secondly, as my training will be of only 4 months so, I will be aware of
      current market scenario which will exist in these 4 months, but afterwards it
      may be impossible to estimate the demand for next year. This is again one of
      the major drawbacks.


    The next limitation is that the respondent does not give exact information
      which sometimes leads to wrong and incomplete reports.


    Another limitation is that the market is not in a favorable situation, which may
      leads to uncertain conditions which is not beneficial while performing the
      study.


    Another drawback of the study is that, not much Statistical Tools can be
      applied as, one is not aware of some statistical tools which is very important
      to apply in the study. Lack of Statistical Tools results in imperfect report,

                                           64
   which can causes certain problems in future and this is only because of
   unawareness about these tools.


 The next important limitation is that, one is not having perfect and full

   information about the study because of which he/she is not able to make other
   customers understand about the topic. It will take much time to make the
   customers understand and provide them awareness regarding the study. So
   again the time constraint also becomes the major problem in this case.




                                       65
                       Summary of all AMC


Data Analysis: Equity Schemes:
Name of          Reliance     Franklin      HDFC     Birla
Mutual Fund      growth       India         Growth   Advantage
                 fund         Prima         fund     fund
                              Fund
Date of          7-Oct-95     28-Sep-94     10-      24-Feb-95
Launch                                      Aug-00
Fund             1135.44      1498.32       840.96   447.64
size(Cr.)
Rank             1st          2nd           3rd      10th
One Month        5.3          4.7           3.4      2.4
returns
One year         83.44        70.23         48.8     49.78
annualised
returns in %
Three year       68.28        44.98         38.63    72.76
annualised
returns in %
Five year        38.42        42.7          10.75    11.75
annualised
returns in %
Sharpe ratio     6.32         7.3           6.8      9.8
Alpha          2.4            1.72          2.39     2.14
values
Standard       8.63           7.30          6.80     11.57
Deviation




                              66
      Income funds:

      Name of      Reliance      Franklin       HDFC         Birla
      Mutual       income        India          high         income
      Fund         fund          income         interest     plus
                                 fund           fund
      One year     4.52          2.04           1.59         0.78
      annualised
      returns in
      %
      Three        8.81          8.30           7.66         7.42
      year
      annualised
      returns in
      %
                   0.1365        0. 1058        0.0903       0.0859
Sharpe ratio

                   1.5000        1.7500         1.8400       1.7800
      Expense



Liquid funds:

      Name of         Reliance   Templeton        HDFC         Birla
      Mutual          Income     India Income     High         Income
      Fund            Fund       Fund             Interest     Fund
                                                  Fund
      One year        0.1365     0.1058           0.0903       0.0859
      annualised
      returns in
      %
      Sharpe          -1.6205    -1.5119          -1.1748      -1.4536
      ratio




                                  67
Long term G sec funds
Name of    Reliance     Templeton   HDFC Gilt    Birla
mutual     G Sec        GSF -       Fund - L T   GPRP -
fund       Fund -       Composite   P - Growth   Growth
           LTP -        Plan -
           Retail -     Growth
           Growth

Launch     4jul 03      21 jun 99   17jul01      11oct 99
Date

Corpus     11.8289      22.7877     15.0577      21.4419
(Rs. In
Crore)

Expense    1.5000       1.6000      1.2500       1.2500
Ratio
Avg        785          2216        1091         2610
Maturity
(No of
Days)


1 week     0.114        0.138       0.157        0.200
1 month    0.259        0.071       0.302        0.204
           2.023        1.099       1.196        1.577
3month

6 months   4.139        2.299       1.321        2.802
1 year     8.926        2.836       2.107        4.386




                          68
                                Conclusion



Mutual fund pools money of investors with similar investment goals the
money intern is invested in various securities depending on the objectives of
mutual fund schemes, profit (losses) shared among investors in proportion to
their investments.

The mutual funds invest basically in three types of assets classes.

Stocky represents ownership or equity in a company, popularly kwon as
shares Bonds:

The represents debt from companies, financial institution or government
agencies

Money market instruments: these include short term debt instruments such as
Treasury bill, certificate of deposits and inter bank call money.

Classification on mutual fund can be done on the basis of objectives.




                                    69

				
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