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A

PROJECT REPORT ON

A Study ofMUTUAL FUND-Smart Investment Solution

At

Axis Mutual Fund

Submitted By:

Kothiya Ravi

MBA PROGRAMME 2011-2013

In partial fulfillment of the requirements for Summer Internship Programme for the

award of the degree of

MASTER OF BUSINESS ADMINISTRATION

SHRI JAIRAMBHAI PATEL INSTITUTE OF BUSINESS MANAGEMENT

AND COMPUTER APPLICATIONS (NICM-MBA)

Submitted to:

GUJARAT TECHNOLOGICAL UNIVERSITY,

AHMEDABAD

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Declaration

This project report entitled Mutual Fund-Smart Investment solution has

been submitted to Gujarat Technological University, Ahmadabad in partial

fulfillment for the award of degree of Master of Business Administration. I, the

undersigned hereby declare that this report has been completed by me under the

guidance of Mr. Anjal Patel, Area Manager (South Gujarat) and Prof. Rashesh

Patel Faculty Member, Shri Jairambhai Patel Institute of Business Management &

Computer Applications, Gandhinagar.

The report is entirely the result of my own efforts and has not been

submitted either in part or whole to any other institute or university for any degree.

Kothiya Ravi K.

Date:

Place:

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ACKNOWLEDGEMENT

The expertise, skill, generosity, and hard work of many individuals and

organizations contributed significantly to the success of this project. This project

would not have been even started without Mr. Anjal Patel (Area Manager South

Gujarat). His inspirational words have always helped me. I would also like to

express my heartfelt thank to Mr. Jigar Sutariya (Officer-Investor services), Mr.

Vishal Parekh (Relationship Manager) , and Mr. Rashesh Patel who not only

served as my internal guides but also encouraged and challenged us throughout ourproject. I am very grateful to our director Prof. S.O. Junare who has immensely

supported while taking the project. Without the immense support of AXIS BANK

& MUTUAL FUND employees, I could not have completed my project. They

helped me at every step when needed. Finally, yet importantly, I would like to

express my heartfelt thanks to my beloved parents for their blessings, my group

friends/ classmates, staff members of my department for their help and wishes for

the successful completion of this project. Warm regards to my college library too

for backing up with indispensable support of various leaning resources.

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EXECUTIVE SUMMARY

The Indian mutual fund industry came into existence with the establishment

of Unit Trust of India in 1964. Unit Trust of India was not efficient enough to

expand the mutual fund market. In late 1980s nationalized bank sponsored mutual

funds came into existence which helped mutual fund industry to expand its market.

The private sector mutual fund entered the industry during early 1990s with

greater variety of products and better services. They introduced different kinds of

products satisfying the needs of the different classes of investors.

The major limitation of mutual fund industry in India is the lack of

awareness among the investors. Most of the investors are not at all aware about

what is mutual fund? How it functions? How money collected from investors are

invested, etc against which in America more than eighty million people or one half

of the households invest in mutual funds. That means that, in the United States

alone, trillions of dollars are invested in mutual funds.

Mutual fund industry depends on gaining the trust of investors. Once the

investors trust is gained it is easy to convince them to invest in mutual funds. The

investors are attracted based on the performance of the mutual funds rather than

winning the trust of investors. The performance of mutual funds is variable,

sometimes it may go up and sometimes it may come down. It is also not sure that

the past performance will be repeated in the current period. Still the investors are

attracted based on the past performance of mutual funds. The Indian mutual fund

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industry should come out of this limitation. They should try to attract the investors

by gaining their trust rather than showing the past performance of mutual funds.

Most of the investors are not aware about the professional fund managers of

the mutual funds. They invest in the mutual funds based of the returns which

mutual fund yields. The investors are not aware that the fund managers of mutual

funds do systematic analysis of the companies in which they are going to invest;

they give suggestions to the companies which are not performing well. Therefore

the mutual fund industry should try to promote about their professional fund

managers, which would help the industry to attract the investors and expand its

market.

The mutual fund industry in India is still in the developing stage. Many of

the mutual fund companies are presently functioning in the urban area, but in

country like India where the substantial part of total population lives in the rural

area, also the mutual fund companies needs to expand their business in the

unexplored rural areas which will lead to the substantial increase in the total

amount which is invested in mutual funds.

The basic functioning of mutual fund depends on the equity and debt market.

The portfolio of different mutual funds companies constitutes of the investments in

any of these markets depending upon the type and scheme of mutual fund.

Whenever any of the above mentioned market goes down the respective fund is

affected. For example if the market has gone down by 30% but the mutual funds

NAV has gone down only by 10% than the investor should understand that the

fund manager of such scheme is really efficient. But rather than having such a long

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view the investors thought is limited to short run and they think that the scheme in

which they have invested is not good and they withdraw their money by incurring

losses which is one of the major limitation of the investors investing in mutual

funds, which the mutual fund company must try to overcome by increasing the

awareness regarding the basic functioning of mutual funds and making the

customers aware regarding the difference between the absolute and relative returns.

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INDEX

Sr. No. Particular Page No.

1 Industry Profile

1.1 Introduction of industry

1.2 History of Mutual funds in India

1.3 Terms

1.4 Types of Funds

1.5 Investment option

1.6 Investment Plan

1.7 How Mutual fund Industry work?

1.8 Challenges & Issues

1.9 Advantages of Mutual Fund

1.10 Disadvantages of Mutual Fund

1.11 Future Of Industry

2 Company Profile

2.1 Constitution

2.2 Asset management Company

2.3 Register office of Axis Mutual Fund

2.4 Axis AMC Directors

2.5 Key Personnel

2.6 Sponsors2.7 Trustee

2.8 Vision

2.9 Products

- Equity Funds

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-Fixed Income Funds

-Hybrid Funds

-Gold Funds

3 Mutual funds- Smart Investment Solution

3.1 Facts About Mutual Funds

3.2 Invest Through Mutual Funds

3.3 Goals Which May Worry In Future

3.4 Investment Option

3.5 Investment Option Under Section 80C

3.6 ULIP Vs. Mutual Funds

3.7 PPF Vs. Mutual Funds

3.8 Mutual Fund Operation

3.9 Mutual Fund Vs. Real Estate

3.10 Segregated Funds Vs. Mutual Funds

3.11 MIP Monthly Dividend Plan Vs. Fixed Deposit

4 Learning

5 Suggestion & Recommendation

6 Findings & Conclusion

7 Bibliography

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Introduction of industry

As you probably know, mutual funds have become extremely popular over the

last 20 years. What was once just another obscure financial instrument is now a

part of our daily live

More than 80 million people, or one half of the households in America, invest

in mutual funds.

That means that, in the United States alone, trillions of dollars are invested in

mutual funds.

While in India only 8 % people have invested in the mutual funds.

In fact, to many people, investing means buying mutual funds. After all, its

common knowledge that investing in mutual funds is better than simply letting

your cash waste away in a savings account, but, for most people, that's where the

understanding of funds ends. It doesn't help that mutual fund salespeople speak a

strange language that is interspersed with jargon that many investors don't

understand.

Mutual funds are an excellent idea in theory, but, in reality, they haven't always

delivered. Not all mutual funds are created equal, and investing in mutuals isn't as

easy as throwing your money at the first salesperson who solicits your business.

What is Mutual Fund?

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If we understand in simple mutual fund means your fund would invest mutually

in different securities so your risk can be diversified. And you can invest in more

than securities with small amount.

But as per definition which can be given by the Investopedia

Definition:

A mutual fund is nothing more than a collection of stocks and/or bonds. Youcan think of a mutual fund as a company that brings together a group of people and

invests their money in stocks, bonds, and other securities. Each investor owns

shares, which represent a portion of the holdings of the fund.

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

1) Income is earned from dividends on stocks and interest on bonds. A fund pays

out nearly all of the income it receives over the year to fund owners in the form of

a distribution.

2) If the fund sells securities that have increased in price, the fund has a capital

gain. Most funds also pass on these gains to investors in a distribution.

3) If fund holdings increase in price but are not sold by the fund manager, thefund's shares increase in price. You can then sell your mutual fund shares for a

profit.

History of Mutual funds in India

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The mutual fund industry in India started in 1963 with the formation of Unit

Trust of India, at the initiative of the Government of India and Reserve Bank of

India. The history of mutual funds in India can be broadly divided into four distinctphases

First Phase 1964-87

Unit Trust of India (UTI) was established on 1963 by an Act of Parliament.

It was set up by the Reserve Bank of India and functioned under the Regulatory

and administrative control of the Reserve Bank of India. In 1978 UTI was de-

linked from the RBI and the Industrial Development Bank of India (IDBI) took

over the regulatory and administrative control in place of RBI. The first scheme

launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6,700

crores of assets under management.

Second Phase 1987-1993 (Entry of Public Sector Funds)

1987 marked the entry of non- UTI, public sector mutual funds set up by

public sector banks and Life Insurance Corporation of India (LIC) and General

Insurance Corporation of India (GIC). SBI Mutual Fund was the first non- UTI

Mutual Fund established in June 1987 followed by Canbank Mutual Fund (Dec

87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov

89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC

established its mutual fund in June 1989 while GIC had set up its mutual fund in

December 1990. At the end of 1993, the mutual fund industry had assets under

management of Rs.47,004 crores.

Third Phase 1993-2003 (Entry of Private Sector Funds)

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With the entry of private sector funds in 1993, a new era started in the Indian

mutual fund industry, giving the Indian investors a wider choice of fund families.

Also, 1993 was the year in which the first Mutual Fund Regulations came into

being, under which all mutual funds, except UTI were to be registered and

governed. The erstwhile Kothari Pioneer (now merged with Franklin Templeton)

was the first private sector mutual fund registered in July 1993.

The 1993 SEBI (Mutual Fund) Regulations were substituted by a more

comprehensive and revised Mutual Fund Regulations in 1996. The industry now

functions under the SEBI (Mutual Fund) Regulations 1996.

The number of mutual fund houses went on increasing, with many foreign

mutual funds setting up funds in India and also the industry has witnessed several

mergers and acquisitions. As at the end of January 2003, there were 33 mutual

funds with total assets of Rs. 1,21,805 crores. The Unit Trust of India with

Rs.44,541 crores of assets under management was way ahead of other mutual

funds

Fourth Phase since February 2003

In February 2003, following the repeal of the Unit Trust of India Act 1963

UTI was bifurcated into two separate entities. One is the Specified Undertaking of

the Unit Trust of India with assets under management of Rs.29,835 crores as at the

end of January 2003, representing broadly, the assets of US 64 scheme, assured

return and certain other schemes. The Specified Undertaking of Unit Trust of

India, functioning under an administrator and under the rules framed by

Government of India and does not come under the purview of the Mutual Fund

Regulations.

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The second is the UTI Mutual Fund, 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.76,000

crores of assets under management 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.

The graph indicates the growth of assets over the years.

Terms

What is NAV?

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The performance of a particular scheme of a mutual fund is denoted by Net

Asset Value (NAV).

Mutual funds invest the money collected from the investors in securities

markets. In simple words, Net Asset Value is the market value of the securities

held by the scheme. Since market value of securities changes every day, NAV of a

scheme also varies on day to day basis. The NAV per unit is the market value of

securities of a scheme divided by the total number of units of the scheme on any

particular date. For example, if the market value of securities of a mutual fund

scheme is ` 200 lakhs and the mutual fund has issued 10 lakhs units of ` 10 each to

the investors, then the NAV per unit of the fund is ` 20. NAV is required to be

disclosed by the mutual funds on a regular basis - daily or weekly - depending on

the type of scheme.

The Expense Ratio

The ongoing expenses of a mutual fund are represented by the expense ratio.

This is sometimes also referred to as the management expense ratio (MER). The

expense ratio is composed of the following:

The cost of hiring the fund manager(s):

Also known as the management fee, this cost is between 0.5% and 1% of

assets on average Administrative costs - These include necessities such as postage,

record keeping, customer service, cappuccino machines, etc. Some funds are

excellent at minimizing these costs while others (the ones with the cappuccino

machines in the office) are not.

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On the whole, expense ratios range from as low as 0.2% (usually for index

funds) to as high as 2%.

What is a Load or no-load Fund?

A Load Fund is one that charges a percentage of NAV for entry or exit. That

is, each time one buys or sells units in the fund, a charge will be payable. This

charge is used by the mutual fund for marketing and distribution expenses.

Suppose the NAV per unit is 10. If the entry as well as exit load charged is 1%,

then the investors who buy would be required to pay ` 10.10 and those who offer

their units for repurchase to the mutual fund will get only ` 9.90 per unit. The

investors should take the loads into consideration while making investment as

these affect their yields/returns. However, the investors should also consider the

performance track record and service standards of the mutual fund which are more

important. Efficient funds may give higher returns in spite of loads.

A no-load fund is one that does not charge for entry or exit. It means the investors

can enter the fund/scheme at NAV and no additional charges are payable on

purchase or saleof units.

Types of Funds

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It's important to understand that each mutual fund has different risks and

rewards. In general, the higher the potential return, the higher the risk of loss.

Although some funds are less risky than others, all funds have some level of risk -

it's never possible to diversify away all risk. This is a fact for all investments. Each

fund has a predetermined investment objective that tailors the fund's assets, regions

of investments and investment strategies. At the fundamental level, there are

following varieties of mutual funds:

1) On the basis of Assets Class

Equity funds/ Growth funds

Funds that invest in equity shares are called equity funds. They carry

the principal objective of capital appreciation of the investment over the medium to

long-term. They are best suited for investors who are seeking capital appreciation.

There are different types of equity funds such as Diversified funds, Sector specific

funds and Index based funds.

Debts / Income Funds

These funds invest predominantly in high-rated fixed-income-bearing

instruments like bonds, debentures, government securities, commercial paper andother money market instruments. They are best suited for the medium to long-term

investors who are averse to risk and seek capital preservation. They provide a

regular income to the investor.

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Liquid funds / Money market Funds

These funds invest in highly liquid money market instruments. The period of

investment could be as short as a day. They provide easy liquidity. They have

emerged as an alternative for savings and short-term fixed deposit accounts with

comparatively higher returns. These funds are ideal for corporate, institutional

investors and business houses that invest their funds for very short periods.

2 ) On the basis of Flexibility

Open-Ended Funds

These funds do not have a fixed date of redemption. Generally they are open

for subscription and redemption throughout the year. Their prices are linked to the

daily net asset value (NAV). From the investors' perspective, they are much more

liquid than closed-ended funds.

Close-Ended Funds

These funds are open initially for entry during the Initial Public Offering

(IPO) and thereafter closed for entry as well as exit. These funds have a fixed date

of redemption. One of the characteristics of the close-ended schemes is that they

are generally traded at a discount to NAV; but the discount narrows as maturity

nears. These funds are open for subscription only once and can be redeemed only

on the fixed date of redemption. The units of these funds are listed on stock

exchanges (with certain exceptions), are tradable and the subscribers to the fund

would be able to exit from the fund at any time through the secondary market.

3) Other Objectives

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Balanced Funds

These funds invest in companies spread across sectors. These funds are

generally meant for risk-averse investors who want a diversified portfolio across

sectors.

Sector Funds

These funds invest primarily in equity shares of companies in a particular

business sector or industry. These funds are targeted at investors who are bullish or

fancy the prospects of a particular sector.

Index Funds

These funds invest in the same pattern as popular market indices like S&P

CNX Nifty or CNX Midcap 200. The money collected from the investors is

invested only in the stocks, which represent the index. For e.g. a Nifty index fund

will invest only in the Nifty 50 stocks. The objective of such funds is not to beat

the market but to give a return equivalent to the market returns.

Tax Saving Funds

These funds offer tax benefits to investors under the Income Tax Act.

Opportunities provided under this scheme are in the form of tax rebates under the

Income Tax act.

Gilt Funds

These funds invest in Central and State Government securities. Since they

are Government backed bonds they give a secured return and also ensure safety of

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the principal amount. They are best suited for the medium to long-term investors

who are averse to risk.

Exchange Traded Funds (ETF)

Think of an exchange-traded fund as a mutual fund that trades like a stock.

Just like an index fund, an ETF represents a basket of stocks that reflect an index

such as the Nifty. An ETF, however, isn't a mutual fund; it trades just like any

other company on a stock exchange. Unlike a mutual fund that has its net-asset

value (NAV) calculated at the end of each trading day, an ETF's price changes

throughout the day, fluctuating with supply and demand. It is important toremember that while ETFs attempt to replicate the return on indexes, there is no

guarantee that they will do so exactly.

Fixed Maturity Plan

Fixed Maturity Plans (FMPs) are investment schemes floated by mutual

funds and are close ended with a fixed tenure, the maturity period ranging from

one month to three/five years. These plans are predominantly debt-oriented, while

some of them may have a small equity component. Under this plan the maturity of

the fund is fixed and return is based on the fluctuation of interest rate. The

objective of such a scheme is to generate steady returns over a fixed-maturity

period and protect the investor against market fluctuations. FMPs are typically

passively managed fixed income schemes with the fund manager locking into

investments with maturities corresponding with the maturity of the plan. FMPs are

not guaranteed products.

Capital Protection Oriented Schemes

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Capital Protection Oriented Schemes are schemes that endeavor to protect

the capital as the primary objective by investing in high quality fixed income

securities and generate capital appreciation by investing in equity / equity related

instruments as a secondary objective. The first Capital Protection Oriented Fund in

India, Franklin Templeton Capital Protection Oriented Fund opened for

subscription on October 31, 2006.

Investment option

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Growth:

A growth plan is a plan under a scheme wherein the returns from

investments are reinvested and very few income distributions, if any, are made.

The investor thus only realizes capital appreciation on the investment.

Dividend:

Dividend option is further divided in to two parts that is:

1) Payout

Under the dividend plan, dividend income is distributed from time to

time. This plan is ideal to those investors requiring regular income.

2) Reinvestment

Dividend plans of schemes carry an additional option for

reinvestment of income distribution. This is referred to as the

dividend reinvestment plan. Under this plan, dividends declared by a

fund are reinvested in the scheme on behalf of the investor, thus

increasing the number of units held by the investors.

Investment Plan

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SIP (Systematic investment Plan):

SIP means Systematic investment Plan in which a fix amount of

installment would be cut from your account and transfer to the selected fund

which you have selected. so market fluctuation cannot be affect to your fund

and you can get average NAV.

And you get return on the bases of fluctuation in market (Equity,

dept, money market and gold.).So you can avoid purchase at high

price. For example.

If we observe from Jan`09 up to Jan`11 Sip have given minimum

average return 15%.

So it would suggest that for great return you have to remain stable in the

market.

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Mutual fund mainly based on the market (Equity, Dept, money market and gold

etc)

But would be regulated by the SEBI(Security exchange board India) and

supported by the AMFI(Association of Mutual Fund in India)

A mutual fund is a fund established in the form of a trust to raise monies

through the sale of units to the public or a section of the public under one or more

schemes for investing in securities, including money market instruments. The

regulation of mutual funds operating in

Every mutual fund must be registered with SEBI and must be constituted in the

form of a trust in accordance with the provisions of the Indian Trusts Act, 1882.

The instrument of trust must be in the form of a deed between the sponsor and

the trustees of the mutual fund duly registered under the provisions of the Indian

Registration Act, 1908.

AMFI (Association of mutual fund in India):

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Association of Mutual Funds in India (AMFI) is the umbrella body of all the

Mutual Funds registered with SEBI. It is a non-profit organization committed to

develop the Indian Mutual Fund Industry on professional, healthy and ethical lines

and to enhance and maintain standards in all areas with a view to protecting and

promoting the interests of Mutual Funds and their unit holders.

Mutual Fund both conceptually and operationally is different from other

savings instruments. Mutual Funds invest in instruments of capital markets whichhave different risk-return profile. It is very necessary that the investors understand

properly the conceptual framework of Mutual Fund and its operational features.

AMFI therefore thought it appropriate to produce a booklet in the form of an

investors concise guide that will explain in simple language the concept and

working of Mutual Funds.

This guide on the concept, operations and advantages of Mutual Funds and

the rights of the Mutual Fund unit holders, is intended purely as a guide and does

not solicit investment in any specific Mutual Fund. It is not a legal or regulatory

document. It is recommended that you read the relevant offer document and if

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necessary, consult your investment advisor before making an investment decision.

Incorporated in August 1995.

SEBI (Security exchange board of India):

The Securities and Exchange Board of India (SEBI) is the regulatory

authority in India established under Section 3 of SEBI Act, 1992. SEBI Act,1992

provides for establishment of Securities and Exchange Board of India (SEBI) with

statutory powers for

(a) protecting the interests of investors in securities

(b) promoting the development of the securities market and

(c) Regulating the securities market.

Its regulatory jurisdiction extends over corporate in the issuance of capital and

transfer of securities, in addition to all intermediaries and persons associated with

securities market. SEBI has been obligated to perform the aforesaid functions by

such measures as it thinks fit.

In particular, it has powers for:

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Regulating the business in stock exchanges and any other securities markets

Registering and regulating the working of stock brokers, subbrokers etc.

Promoting and regulating self-regulatory organizations

Prohibiting fraudulent and unfair trade practices

Calling for information from, undertaking inspection, conducting inquiries and

audits of the stock exchanges, intermediaries, self regulatory organizations,mutual funds and other persons associated with the securities market.

Parties to Mutual fund

There are many parties are requiring for the running of mutual fund

industry like..

AMC (Assets Management Company)

Sponsor

Trustee

Custodian & Transfer agent

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Sponsor:

The sponsor is required, under the provisions of the Mutual Fund

Regulations, to have a sound track record3, a reputation of fairness and integrity in

all his business transactions additionally; the sponsor should contribute at least

40% to the net worth of the AMC. However, if any person holds 40% or more of

the net worth of an AMC shall be deemed to be a sponsor and will be required to

fulfill the eligibility criteria specified in the Mutual Fund Regulations. The sponsor

or any of its directors or the principal officer employed by the mutual fund should

not be guilty of fraud, not be convicted of an offence involving moral turpitude or

should have not been found guilty of any economic offence.

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Trustees:

The mutual fund is required to have an independent Board of Trustees, i.e.

two thirds of the trustees should be independent persons who are not associated

with the sponsors in any manner whatsoever. An AMC or any of its officers or

employees are not eligible to act as a trustee of any mutual fund. In case a

company is appointed as a trustee, then its directors can act as trustees of any other

trust provided that the object of such other trust is not in conflict with the object of

the mutual fund. Additionally, no person who is appointed as a trustee of a mutual

fund can be appointed as a trustee of any other mutual fund unless he is anindependent trustee and prior approval of the mutual fund of which he is a trustee

has been obtained for such an appointment.

AMC (Assets Management Company):

The directors of the AMC should be persons having adequate professional

experience in finance and financial services related field and not found guilty of

moral turpitude or convicted of any economic offence or violation of any securities

laws; the AMC should have and must at all times maintain, a minimum net worth

of Rs. 100 million; the board of directors of such AMC has at least 50% directors,

who are not associate of, or associated in any manner with, the sponsor or any of

its subsidiaries or the trustees; the Chairman of the AMC is not a trustee of any

mutual fund.

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Custodian:

The mutual fund is required, under the Mutual Fund Regulations, to appoint

a custodian to carry out the custodial services for the schemes of the fund. Only

institutions with substantial organizational strength, service capability in terms of

computerization, and other infrastructure facilities are approved to act as

custodians. The custodian must be totally delinked

from the AMC and must be registered with SEBI. Under the

Securities and Exchange Board of India (Custodian of Securities)

Guidelines, 1996, any person proposing to carry on the business as a

custodian of securities must register with the SEBI and is required to fulfill

specified eligibility criteria. Additionally, a custodian in which the sponsor

or its associates holds 50% or more of the voting rights of the share capital

of the custodian or where 50% or more of the directors of the custodian

represent the interest of the sponsor or its associates cannot act as custodian

for a mutual fund constituted by the same sponsor or any of its associate or

subsidiary company.

Schemes:

Under the Mutual Fund Regulations, a mutual fund is allowed to float

different schemes. Each scheme has to be approved by the trustees and the

offer document is required to be filed with the SEBI. The offer document

should contain disclosures which are adequate enough to enable the

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investors to make informed investment decision, including the disclosure on

maximum investments proposed to be made by the scheme in the listed

securities of the group companies of the sponsor. If the SEBI does not

comment on the contents of the offering documents within 21 days from the

date of filing, the AMC would be free to issue the offer documents to public.

SEBI has also prescribed an Advertising Code that has to be observed

while launching a new scheme.

Close-ended schemes4 are required to be listed on a recognized stock

exchange within six months from the closure of the subscription.

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Challenges & Issues

Low customer awareness levels and financial literacy pose the biggest

challenge the channelizing household Savings into mutual fund store awareness

levels and financial literacy pose the biggest challenge to channelizing household.

Fund houses have shown limited focus on increasing retail penetration and

Building retail AUM.

Limited customer engagement.

Limited focus of the public sector network on distribution of mutual funds.

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Advantages of Mutual Fund

Professional Management:

The primary advantage of funds is the professional management of your

money. in mutual fund your fund would be invested by expert managers.

Diversification

Here your money is invested in the different securities like equity, dept and

money market so here invest in equity means not only in one equity stock but in

no. of different stocks.

The idea behind diversification is to invest in a large number of assets so

that a loss in any particular investment is minimized by gains in others. In other

words, the more stocks and bonds you own, the less any one of them can hurt you.

Large mutual funds typically own hundreds of different stocks in many different

industries. It wouldn't be possible for an investor to build this kind of a portfolio

with a small amount of money.

Economies of Scale

Because a mutual fund buys and sells large amounts of securities at a time,

its transaction costs are lower than what an individual would pay for securities

transactions

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Liquidity

Just like an individual stock, a mutual fund allows you to request that your

shares be converted into cash at any time.

Simplicity

Buying a mutual fund is easy! Pretty well any bank has its own line of

mutual funds, and the minimum investment is small. Most companies also have

automatic purchase plans whereby as little as $100 can be invested on a monthly

basis.

Small investments:

Mutual funds help you to reap the benefit of returns by a portfolio spread

across a wide spectrum of companies with small investments.

Transparency:

Mutual Funds regularly provide investors with information on the value of

their investments. Mutual Funds also provide complete portfolio disclosure of the

investments made by various schemes and also the proportion invested in each

asset type.

Regulations:

All the mutual funds are registered with SEBI and they function within the

provisions of strict regulation designed to protect the interests of the investor.

Professional Management:

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Many investors debate whether or not the professionalsare any better than

you or I at picking stocks.

Costs:

Creating, distributing, and running a mutual fund is an expensive

proposition. Everything from the managers salary to the investors statements

cost money.

Taxes:

When a fund manager sells a security, a capital-gains tax is triggered.

Investors who are concerned about the impact of taxes need to keep those concerns

in mind when investing in mutual funds

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Disadvantages of Mutual Fund

Market risk

If the overall stock or bond markets fall on account of overall economic

factors, the value of stock or bond holdings in the fund's portfolio can drop,

thereby impacting the fund performance.

Non-market risk

Bad news about an individual company can pull down its stock price, which

can negatively affect fund holdings.

Interest rate risk

Bond prices and interest rates move in opposite directions. When interest

rates rise, bond prices fall and this decline in underlying securities affects the fund

negatively.

Credit risk

Bonds are debt obligations. So when the funds invest in corporate bonds,

they run the risk of the corporate defaulting on their interest and principal payment

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obligations and when that risk crystallizes, it leads to a fall in the value of the bond

causing the NAV of the fund to take a beating.

Future of Industry

In the event of a relatively slower economic revival Resulting in the

identified growth drivers not reaching their full potential, KPMG in India is of the

view that the Indian mutual fund industry may grow in the range of 15-18 percent

in the period from 2010 to 2015, resulting in AUM of INR 15,000 to 17,000 billion

in 2015.

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Constitution

Axis Mutual Fund (the Mutual Fund) has been constituted as a trust on

June 27, 2009 in accordance with the provisions of the Indian Trusts Act, 1882 (2

of 1882) with Axis Bank Limited, as the Sponsor and Axis Mutual Fund Trustee

Limited as the trustee to the Mutual Fund. The Deed of Trust has been registered

under the Indian Registration Act, 1908. The Mutual Fund was registered with

SEBI on September 04, 2009 under Registration Code MF - / 061 / 09 / 02.

Asset management Company.

Axis Asset Management Company Limited (AMC) is a public limited

company incorporated under the Companies Act, 1956 on January 13, 2009. Axis

Asset Management Company Limited has been appointed as the Investment

Manager of the Mutual Fund by the Trustee vide Investment Management

Agreement (IMA) dated June 27, 2009, and executed between the Trustee and the

AMC. The AMC has obtained Certificate of Registration as Portfolio Manager

under the SEBI (Portfolio Managers) Regulations, 1993.

Register office of Axis Mutual Fund:

11th Floor, Nariman Bhavan,

Vinay K. Shah Marg,

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Nariman Point,

Mumbai - 400021.

Axis AMC Directors

Shikha Sharma, Chairperson, Associate Director

MD & CEO of Axis Bank

Over two decades of experience across the spectrum of financial services

Instrumental in setting up various market leading businesses for the ICICI

Group

T S Narayanasami, Independent Director

Has been the Chairman & Managing Director of Bank of India, Indian

Overseas Bank and Andhra Bank

Has held various important positions within the banking industry

Pranesh Misra, Independent Director

Founder of Brandscapes Consultancy Private Limited

Over 26 years experience in communication, marketing, marketing

research, brand planning and international client management across varied

industries

U R Bhat, Independent Director

Managing Director of Dalton Capital Advisors (India)

Fellow of the Chartered Institute of Bankers, London

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Previously the Head of Country Operations of Jardine Fleming Asset

Management Company (AMC) in India for 7 years advising the India

dedicated funds of the Flemings Group.

Rajiv Anand, MD & CEO of Axis AMC, Associate Director

A Chartered Accountant with over 19 years experience in capital markets

Led an award winning investment management team at IDFC (erstwhile

Standard Chartered) AMC

Awarded Business Standards Debt Fund Manager of the year in 2004

Worked in the Treasuries of HSBC and Standard Chartered Bank

R. K. Bammi, Associate Director

Executive Director (Retail Banking) of Axis Bank

Certified Associate from the Indian Institute of Bankers

Has over 30 years of experience in the Banking Sector

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Key Personnel

Rajiv Anand_________________Managing Director & Chief ExecutiveOfficer

Karan Datta _________________National Sales Head

Pravin Bhatt _________________Head Operations

Miten Chawda________________Company SecretaryChandresh Nigam_____________Head Investment

Pankaj Murarka_______________Fund Manager Equity

Jinesh Gopani________________ Assistance Fund Manager EquityNinad Deshpande______________Fund Manager Fixed Income

Anurag Mittal_________________Credit Analyst Fixed Income

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Sponsor

Axis Mutual Fund is sponsored by Axis Bank Limited (Axis Bank). The

Sponsor is the Settler of the Mutual Fund Trust. The Sponsor has entrusted a sum

of Rs. 1,00,000/- (Rs. One Lakh only) to Axis Mutual Fund Trustee Limited (the

Trustee Company) as the initial contribution towards the corpus of the Mutual

Fund.

Trustee:

Axis Mutual Fund Trustee Limited (the Trustee), through its Board of

Directors, shall discharge its obligations as Trustee of the Mutual Fund. The

Trustee ensures that the transactions entered into by the AMC are in accordance

with the SEBI (Mutual Funds) Regulations, 1996 and will also review the activities

carried on by the AMC.

Vision:

To be the preferred financial solutions provider excelling in customer

delivery through insight, empowered employees and smart use of technology.

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Products of AXIS mutual fund

Equity Funds

1)Axis Equity Fund

A diversified equity fund that invests primarily in the Indian equity

markets

Provides the opportunity to capitalize on India's high paced growth

Supported by a strong investment management team at Axis Mutual Fund

Suitable for an investment horizon of 5 years or more

With no entry load

2) Axis Long Term Equity Fund

A diversified equity fund that invests in the Indian equity markets

Provides the opportunity to capitalize on Indias high paced growth

Also provides tax benefits under section 80C of the Income Tax Act, 1961

Lock-in period of only 3 years is the lowest amongst all section 80C

options available today

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With no entry load

Flexibility to invest across market caps in high growth stocks

EasyCall facility available .

3) Axis Midcap Fund

An equity fund that invests primarily in mid sized companies to capitalize

on their fast paced growth

Amongst the mid sized companies, it has a preference for the larger ones

that carry relatively lower risk

It is suitable for an investment horizon of 5 yrs or more

It is suitable when you want to plan for a bigger home, better holidays,

bigger cars, etc.

4) Axis Focused 25 Fund


Focus in the best ideas at any point of time

Nurtures companies over their business cycle without being affected by

short term market volatility

Professional fund management with established track record

With no entry load

Fixed Income Funds

1) Axis Treasury Advantage Fund

A low risk fund suitable for an investment horizon of 1 day to 90 days

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Returns are calculated for the number of days you remain invested

No entry or exit loads

High liquidity - Under normal circumstances, we will endeavor to ensure

that an investor gets his

money back one day after putting in a valid redemption request2) Axis Liquid Fund

An extremely low risk fund suitable for an investment horizon of 1 day

90 days


No entry or exit loads

High liquidity - Under normal circumstances, we will endeavour to ensure

that an investor gets his money back one day after putting in a valid

redemption request

3) Axis Short Term Fund

A low risk fund suitable for an investment horizon of 6 months or more

Aims to provide stable returns by investing in debt and money market

instruments


EasyCall facility available

High liquidity - Under normal circumstances, we will endeavour to ensure

that an investor gets his money back one day after putting in a valid

redemption request

4) Axis Dynamic Bond Fund

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A low risk fund suitable for an investment horizon of 1 year or more

Dynamic asset allocation policy across fixed income assets

Seeks to exploit market opportunities & manage risk

Able to invest across all segments of fixed income

Flexibility to invest only in high conviction ideas

Does not track benchmarks, i.e. can be invested in money market during

rising rate environment

Hybrid Funds1) Axis Triple Advantage Fund


Provides diversification across three asset classes viz. equity, fixed

income and gold thereby leading to reduction in risk

Returns potential not compromised even with reduced risk levels

Returns more stable than pure equity or gold investments over the long

term

Offers convenience. Now one single application is sufficient for

investment in three asset classes.

20 - 30% of investment in gold. Gold is a good hedge against financial

crises.

2) Axis Income Saver

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A low to medium risk fund suitable for an investment horizon of 2 4

years

Brings stability to your portfolio by investing primarily in fixed income

instruments

Offers the potential for capital growth through limited exposure to equity

instruments

Adopts a quantitative asset allocation strategy for risk management

Open-ended nature allows you to buy or sell units of the scheme at any

point of time subject to applicable loads

Scheme managed by an experienced team of fund managers

Gold Fund

1) Axis Gold Fund

Systematically invest in gold each month through SIPs

Buy gold in amounts as small as Rs 1000 without having to worry about

purity

No demat account required

Buy/sell units of Axis Gold Fund on any business day at NAV based

prices

No storage charges , no making charges, no safe-keeping worries

2) Axis Gold ETF

Protects against inflation

Allows you to take advantage of Gold as an investment opportunity

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Investors bear no risk of storage and safekeeping of gold

Get 99.5% purity at prevailing market prices without premium charges

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Facts about Mutual Funds

Equity Instruments like shares from only a part of the securities held by mutualfunds. Mutual funds also invest in debt securities which are relatively much safer.

The biggest advantage of mutual funds is their ability to diversify the risk.

Mutual funds are there in India since 1964. Mutual funds market is much

evolved in U.S.A. & is there for the last 60 years.

Mutual Funds are the best solution for people who want to manage risks and get

good returns.

The truth is as an investor you should always pay attention to your mutual funds

and continuously monitor them. There are various funds to suit investor needs,

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both as a long term investment vehical or as a very short term cash management

vehical.

US-64 is very much a part of the market and is not immune to its vagaries. The

crisis ha risen due to mismanagement of the fund.

Invest Through Mutual Funds

Have a long term objective

Profile your risk

Select appropriate MF scheme, based on return requirement

Mix of equity & debt

Invest regularly with Flexibility

Park surplus

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Short term investment

Easy liquidity

Tax benefits

Goals Which May Worry In Future

Goals which may worry in you future.

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A person pass through these three phases in first phase up to 22 years of life a

person depends on his parents where he get pocket money.

Then, from 22 years to 60 years he earn for his car, children, housing, child

education, child marriage, etc.

Then after at the age of 60 he retires and his steady income started in which

mutual fund help to complete the all desires and some part for after retirement.

The goals which worry during earning time will complete by mutual fund by

investing.

Investment Option

1) Investments in Bank Fixed Deposits (FD)

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Fixed Deposit or FD is accrues 9.25% of annual returns for non-seniorcitizen, depending on the bank's tenure and guidelines, which makes it's widelysought after and safe investment alternative. The minimum tenure of FD is 15 daysand maximum tenure is 5 years and above. Senior citizens are entitled forexclusive rate of interest on Fixed Deposits; current rate of return is average 10%annual.

2) Investments in life Insurance policies

Insurance features among the best investment alternative as it offers servicesto indemnify your life, assets and money besides providing satisfactory and riskfree profits. Indian Insurance Market offers various investment options withreasonably priced premium. Some of the popular Insurance policies in India areHome Insurance policies, Life Insurance policies, Health Insurance policies and

Car Insurance policies.

Some top Insurance firm in India under whom you can buy insurancescheme are LIC, SBI Life, ICICI Prudential, Bajaj Allianz, Birla Sunlife, HDFCStandard Life, Reliance Life, Max NewYork Life, Metlife, Tata AIG, KotakMahindra Life, ING Life Insurance, etc.

3) Investments in National Saving Certificate (NSC)

National Saving Certificate (NSC) is subsidized and supported by

government of India as is a secure investment technique with a lock in tenure of 6years. There is no utmost limit in this investment option while the highest amountis estimated as ` 100. The investor is entitled for the calculated interest of 8%which is forfeited two times in a year. National Saving Certificate falls underSection 80C of IT Act and the profit accrued by the investor stands valid for taxdeduction up to ` 1, 00,000.

4) Investments in Public Provident Fund (PPF)

Like NSC, Public Provident Fund (PPF) is also supported by the Indian

government. An investment of minimum Rs. 500 and maximum Rs. 100,000 isrequired to be deposited in a fiscal year. The prospective investor can create it PPFaccount in a GPO or head post office or in any sub-divisions of the nationalized

bank.

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PPF also falls under Section 80C of IT Act so investors could gain incometax deduction of up to Rs. 1, 00,000. The rate of interest of PPF is evaluated yearlywith a lock in tenure of maximum 15 years. The basic rate of interest in PPF is 8%.

5) Investments in Stock Market

Indian Stock market is very fluctuating. A smart portfolio positioned forlong-term growth includes strong stocks from different industries. Before investingin stock market one should be prepared to assume risk equivalent to sum investedin the market. Investing in share market yields higher profits. Influenced byunanticipated turn of market events, stock market to some extent cannot beconsidered as the safest investment options. However, to accrue higher gains, an

investor must update himself on the recent stock market news and events.

6) Investments in Real Estate

Indian real estate industry has huge prospects in sectors like commercial,housing, hospitality, retail, manufacturing, healthcare etc. Calculated realtydemand for IT/ITES industry in 2010 is estimated at 150mn sq.ft. around the chiefIndian cities. Termed as the "money making industry", realty sector of India

promises annual profits of 30% to 100% through real estate investments.

7) Investments in Gold Deposit Scheme

Controlled by SBI, Gold Deposit Scheme was instigated in the year 1999.Investments in this scheme are open for trusts, firms and HUFs with no specificupper limit. The investor can deposit invest minimum of 200 gm in exchange forgold bonds holding a tariff free rate of interest of 3% - 4% on the basis of the

period of the bond varying with a lock in period of 3 to 7 years.

Moreover, Gold bonds are not entitled of capital gains tax and wealth tariff.The sum insured can be accrued back in cash or gold, as per the investor's

preference.

Investment Option Under Section 80C

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Comparison of Popular Section 80C options

Options Return per Annum Lock In Period ( Years)Public Provident Fund (PPF) 8.6% 15

National saving Certificate(NSC) 8.4% Compound Half yearly 6

Equity Linked saving scheme from

Mutual funds (ELSS)

Market-linked 3

New Pension Plan Market-linked Up to retirement age (60)

Life insurance Premium/ ULIPs Market-linked 3-5

5 years Tax Saving bank deposits Various depending on the issuingbank. Currently at 6-7.50% p.a.as on 30 Dec 2011

5

Infrastructure Bonds Various depending on issuer 3-5 or more

Rates are as on 1 Dec 2012.

Here, in ELSS the lock in period is 3 years which is less compared to other 80C

investment option. Returns is also high like in axis mutual fund their current NAV

is Rs. 13.0076 as on 11July, 2012 which is higher than the other option which

shows MF is smarter investment solution.

ULIP vs. Mutual Funds

Mutual fund is pure investment. While, ULIP is combination of insurance andinvestment.

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Entry Load

ULIP generally come with huge entry load. For different scheme, this canvary between 5 to 40% of the first years premium.

MFs do not have any entry load.

Maturity

ULIP generally come with a maturity of 5 to 20 years.

Tax saving MF (popularly called as equity linked saving scheme) comewith a lock in period 3 years. While, other MF do not have any lock in period.

Compulsion of investing

ULIPs would generally make you pay at least first three premiums.

MFs do not have any compulsion on future investments.

Tax saving

Both ELSS & ULIP come under 80C and can save your tax. Returns inboth forms of investments are tax free.

Market Exposure

ULIPs give you both moderate and aggressive exposure to equity market

Debt and Liquid MF let invest with low risk.

Flexibility of time of redemption

ULIPs will get redeemed on maturing, premature redemption is allowedwith some penalty.

In MF premature redemption is not allowed. For a open ended schemeone can redeem the MF anytime after maturity.

So, it proves MF is smarter investment than ULIPs

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PPF vs. Mutual Funds

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Particular Mutual Funds Real Estate

Function Mutual funds are managed investmentpools that own stock & bonds aremanaged by the professional portfoliomanager. Buying mutual funds provides

investors access to diversified pool ofsecurities in single investment.

Real estate investing usually involvesbuying rental properties them out.Investment real estate can be singlefamily homes, apartment building or

commercial buildings.

Significance The stock market is more volatile andthe value of mutual fund can changesignificantly over a short time.

Real estate investing is most of thetime a long term pursuit of wealththrough steadily increasing value.

Considerations Selling mutual funds involves makingphone call. With no-load funds, there isno cost for either transaction. Mutualfunds allow investors to change theirmind quickly with little or no cost.

Real estate investing involves research,looking at different properties andselecting the right ones, completingpurchase and mortgage paper work andsignificant fees. Selling an investmentproperty can take months and there are

significant commissions and costs,there will be an on going cost to keepthe investment.

For e.g.

A real estate investor can borrow a significant portion of the cost of a

property. This leverage also leverages the profit potential. For example, an investor

has Rs.100000 to invest. That amount would buy Rs.100000 of mutual funds

shares. The same money could be a 20 % down payment on an investment property

worth Rs.500000. if each investment goes up 10 percent in value, the mutual funds

investment has a profit of Rs.10000 and the real estate investment has gained

Rs.50000. that is the upside of leverage. The flip side is that a 10 % decline would

cost the mutual fund investor 10% & the real estate investor would lose half of his

invested capital. Hence, Mutual fund has low risk it gives flexibility rather than

mutual fund. Therefore, mutual funds are Smart Investment Solution.

Segregated Funds vs. Mutual Funds

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The following chart summarizes many of the important differences and

similarities between segregated funds insurance products and mutual funds.

Particular Segregated Funds Mutual funds

Overview Your net Premiums are invested in thesegregated funds of an insurer which,in turn, invests in securities such asstocks, bonds and money marketinvestment. Segregated funds areinsurance products.

Money is pooled and invested onbehalf of unit holders in securitiessuch as stocks, bonds and moneymarket investments.

Regulated By Provincial life insurance Acts Securities legislation

Capital

Growth

Potential

Yes Yes

Track unit

value in the

newspaper

Yes Yes

Diversify

Investment

Yes Yes

Financial

Protection

At death and Maturity, premiumsminus withdrawals are usuallyguaranteed between, 75% & 100%

No guarantees on investmentperformance. Theoretically, you couldlose everything.

Death

Protection

Beneficiary receives either the

guaranteed death benefits or themarket value depending on which isgreater.

The estate or beneficiaries 2 will get

the market value only. There are noguaranteed minimums.

Probate

Protection

At death, proceeds can be paiddirectly to a named beneficiary,avoiding the estate administrationprocess, and the cost of probate fees.

At death, proceeds are an asset of theestate and subject to the estate,administration process and legal fees.It could be some time before theestate can distribute the mutual fund.

Creditor

Protection

Designation in favor of a parent,spouse, child or grandchild may result

in insurance money being exemptfrom seizure. This is sometimesreferred to as Creditors Protection

No protection against the claims ofcreditors.

MIP Monthly Dividend Plan vs. Fixed Deposit

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Letstake a 25 lakhs investment made in an MIP- Long term MIP Monthly Plan

is what I chose. Compare it with the same amount invested in a fixed deposit

yielding 9%.

Taxation

Dividends on MIPs are tax-free; FD interest is taxable. Ive assumed a 20%

tax.

However, note that about 13.6% of dividend distribution tax applies to

mutual funds, including surcharge and cess, but this is paid by the mutual fund. Itreflects in NAV.

Nowadays banks deducts 10-20% tax at source for FD interest- so if you

get a lower tax rate you have to ask for a refund. That is crazy for someone whos

investing for a monthly income.

Returns

The line graphs are the return to date for MIP & FD (Including

interest/dividend post tax) and the bars are the monthly income levels.

Learning

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It was a great opportunity to work with AXIS AMC LTD. The main benefit I

have got is to work for Axis mutual Fund but work with Axis Bank. As I have

described in introduction Axis Mutual Fund is not having any branch in Gujarat so

all employees are working with Axis Bank. The main learning during this 6 weeks

of summer training is

I have learned how to maintain relationship with distributors.

I have learned how to sell Mutual Funds.

I have learned how to work with superior and subordinates.

I have learned how to work smoothly in the situation of lot of pressure

from the manager.

With the help of bank I have learned how to sell Insurance and also some

bank transactions.

I also learn here that propare coordination among the employees is very

necessary.

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Suggestions And Recommendations

SEBI have to make change in the brokerage structure for the Mutual Fund

distribution.

Axis AMC has less staff.

Axis has not cover all the small region they are only in the main city.

No one indexed fund has been issued by the Axis AMC still.

AMFI have to make some plan to aware people about mutual fund.

Number of scheme which has been provided by the Axis AMC is very less ascompared to other AMC.

There is a tendency to push select products during specific economic cycles.

AMC have to made material so easy that can be easy under stable.

Even though AXIS BANK is doing Good marketing, there should be more

marketing through one pager and some leaflets.

Good and stable performance will increase the interest of investors and also theirwaiting for value researches.

Now even co-operative society can invest up to 10% of their capital in mutualfunds which open the door to new and very important client base.

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Findings And Conclusion

Axis always gives first important to their ethics.

Axis has provided the fund for the every type of client that is Aggressive,Moderate and Conservative.

Axis has provided very prompt service.

Axis AMC has good support of Axis Bank as a distributor.

All distributors are dissatisfied with the decision of SEBI for the restriction ofentry load.

Customer are less aware a about the mutual fund and rules and the regulation ofthe mutual fund.

Most of the Distributors are promote the fund on the bases of brokeragestructure and the extra incentive given by the AMC.

Mutual fund is the only instrument which gives you tax saving with high returnand less lock in period.

SIP is the magical way for the daily saving.

Most of the customers have fear to invest in mutual fund because of the marketrisk.

Axis not gives focused towards promotional activity.

Banks are also selling the mutual fund when there is some incentive plan wouldbe there.

Customer doesnt have passion.

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Mutual Fund are still sold not brought

Bibliography

www.amfindia.com

www.axismf.com

www.mutualfundsindia.com

www.answer.com

Documents

Ravi - SIP