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INDUSTRY BACKGROUND
CURRENT SCENARIO OF FINANCIAL MARKET
India's economy is on the fulcrum of an ever-increasing growth
curve. With positive indicators such as a stable 8 percent annual growth,
rising foreign exchange reserves of close to US$ 140 billion, a booming
capital market with the popular "Sensex" index topping the majestic
10,000 mark, flowing foreign direct investment (FDI) close to US$ 8
billion, and a more than 20 per cent surge in exports, it is easy to grasp
why India is a leading destination for foreign investment.
The GDP grew by 7.4 per cent in the first quarter and 6.6 per cent in
the second quarter of the current year, compared with 5.3 per cent and8.6 per cent in the corresponding quarters of the previous year. The
Economic Survey 2005-06 estimates that the GDP will grow at 8.1 per
cent. Growth of Gross Domestic Product (GDP) at constant prices in
excess of 8.0 per cent has been achieved by the economy in only five
years of recorded history, and two out of these five are in the last three
years
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CHANGING SCENARIO
Since 1991, there has been a radical change in the Indian economic
environment. In the early 90s the country was confronted with a severe
crisis due to a sharp plunge in the foreign exchange reserves, a
downgrading of the credit rating, suspension of foreign private capital
flows and a decline in the industrial output. India was on the verge of
defaulting on its foreign debt obligations. The only way was to initiate
reforms and a structural adjustment program. The country would have to
lift restrictions on foreign investments, on the flow of private capital and
on private initiatives in many area of economic development. The
structural reforms focused on liberalizing industry, trade, taxation and
foreign investment, and on reforming the financial sector.
FINANCIAL MARKETS
A financial market is a market for creation and exchange of financial
assets. If we buy or sell financial assets, we will participate in financial
markets in some way or the other. This includes the various instruments
for investment contains four attributes essential for an investor for taking
investment decision: Yield of the Instrument, Liquidity, Risk Perception,
and Initial Investment.
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Functions of Financial Markets:-
Financial markets facilitate price discovery. The continuous interaction
among numerous buyers and sellers who through financial markets
helps in establishing the prices of financial assets.
Financial markets provide liquidity to financial assets. Investors can
readily sell their financial assets through the mechanism of financial
markets.
Financial markets considerably reduce the cost of transaction. Two
major costs
associated with transaction are search costs and information costs.
WHAT IS AN INVESTMENT?
An Investment is the use of capital to create more money through
the acquisition of a security that promises the safety of the principal and
generates a reasonable return. In Pipeline of Mutual Fund. A company
that invests in securities of other companies; using funds acquired by
selling shares to investors. A mutual fund is one type of InvestmentCompany. Any purchase that fails to meet the safety and returns criteria
is not an investment. It could either be speculation or gambling.
For instance, betting or buying lottery tickets could make you lose all your
money or give huge unreasonable returns. This is gambling and not an
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investment. There is a very thin line differentiating the two and one has to
be careful not to cross that line.
FUNDAMENTALS OF INVESTMENT:-
There are three fundamentals of investment, namely:
SAFETY
LIQUIDITY
RETURN
TAXATION
The order is quite clear: Safety- always first, then the Liquidity- next
and Return- third. A lot of people fall prey to the lure of high returns, and
usually, this has resulted in a LOSS.
INVESTMENT OPTIONS AVAILABLE IN INDIA
There are basically two kinds of investment options available for theinvestor on the basis of their Risk, Return and time horizon. As per the
Return is concern one can earn a fixed rate of interest and other where
the rates fluctuate depending on certain factors prevailing in the market
at that point of time. Given below are the options available in each
category.
INVESTMENT AVENUES IN THE LAST DECADES
The Indian investors in the last decades were very risky so the
saving was focused in high fixed earning investment. Also there were not
many investment options and investments with sovereign guarantee were
preferred. This was partly due to high interest rates in India
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INVESTMENT AVENUES
* Source: www.indiainvest.com
InvestmentsInvestments
Mutual fundMutual fund DebtDebt InsuranceInsurance EquityEquity
Small SavingsSmall Savings RBI BondsRBI Bonds Primary MarketPrimary Market Secondary MarketSecondary Market
PPFPPF
Post OfficePost Office
Fixed Return Options:
1. Post Office (KVP, NSC, M.I.S.)
2. Public Provident Fund
3. Bank Fixed Deposits
4. Government Securities or Gilts
5. RBI Taxable Bonds
6. Insurance
7. Company Debentures
8. Company Fixed Deposit
9. Infrastructure Bonds
Variable Return Options:
1. Mutual Fund
2. Shares and Stock Market
o Primary Market (IPO)
o Secondary Market
3. Bullion Market (Gold & Silver)
4. Property
5. Foreign Exchange Assets
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HISTORY OF THE INDIAN MUTUAL FUND INDUSTRY
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 the. The history of mutual funds in India can be broadly
divided into four distinct phases:
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 Can
bank 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
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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):
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
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Specified Undertaking of Unit Trust of India, functioning under an
administrator and under the rules framed by Government of India and
does not come under the purview of the Mutual Fund Regulations
The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB
and LIC. It is registered with SEBI and functions under the Mutual Fund
Regulations. With the bifurcation of the erstwhile UTI which had in March
2000 more than Rs.76,000 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 differentprivate sector funds, the mutual fund industry has entered its current
phase of consolidation and growth. As at the end of September, 2004,
there were 29 funds, which manage assets of Rs.153108 crores under 421
schemes.
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The graph indicates the growth of Investment in Mutual
Fund over the years:
GROWTH IN ASSETS UNDER MANAGEMENT (AUM)
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INTRODUCTION OF MUTUAL FUND
CONCEPT:
A Mutual Fund is a trust that pools the savings of a number of
investors who share a common financial goal. The money thus collected is
then invested in capital market instruments such as shares, debentures
and other securities. The income earned through these investments and
the capital 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:
Mutual Fund Operation Flow Chart
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What is a mutual fund?
Pooled Vehicle:
A mutual fund (MF) is a vehicle to pool money from investors, with a
promise that professional managers would invest the money in a
particular manner. Professional Managers are expected to honor the
promise. Mutual funds in India are governed by the regulations of
Securities and Exchange Board of India (SEBI).
Professional Management:
The idea behind a MF is that investors lack the time and/or the skills
to manage their own investments. Professional managers, acting on
behalf of the MF, manage the investments for the benefit of investors, in
return for a management fee.
The organization that manages the investment is the Asset
Management Company (AMC). Employees of the AMC who perform this
role of managing investments are the Fund Managers.
Schemes:
Investors have their individual preferences on how they would like
their money invested and how much risk they are willing to take. For ease
of management and reporting, each a group of investors is identified with
a mutual fund scheme. In commercial terminology, the investors have
invested in a scheme and the professional managers manage the
scheme. A MF has several schemes to cater to different investor
preferences.
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Money in Trust:
The MF manages investments of the scheme for the benefit of its
investors. Every scheme has an:
Investment portfolio (Portfolio Statement);
Account of income and expenditure (Revenue
Account);
And
Account of assets and liabilities (Balance Sheet).
In order to ensure fameless to investors, the expenditure that can
be charged to the scheme, whether as management fees or as other
expenses, is regulated by SEBI.
The gains of any scheme would belong to its investors. Similarly
losses, if any, would need to be borne by its investors up to the amount
invested. Thus, the MF manages the moneys in trust for the benefit ofinvestors.
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ORGANISATION OF A MUTUAL FUND:
There are many entities involved and the diagram below illustrates the
organizational set up of a mutual fund:
Unit Holders:
Unit holders are Investors. Any Individual or Non- individuals who
have invest their money in Mutual Fund; they will get some Units against
their Investment according to the NAV of that fund.
Sponsor:
Sponsor is the promoter of the mutual fund. He himself of with
other body corporate establishes the mutual fund. However to became a
sponsor one has to have following qualifications?
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Sponsor should have sound track record and general reputation of
fairness and integrity in all business transactions. He must have carrying
business in financial services for a period of not less than five years. And
continuously derives the profit after providing for depreciation, interest
and tax. Having positive net worth as well. Sponsor has to contribute at
least 40 per cent to the net worth of the AMC.
Trustee:
There are some straight disqualifications provided by the SEBI for a
trustee. However the appointment for a trustee must be take prior
approval of SEBI. Trustee is a person having ability, integrity and has not
been found guilty of moral turpitude and also has not been convicted for
any economic offence.
Trustee has to play very critical role in the mutual fund
organization. He has work in a way to continuously protect the interest ofthe investors are properly taken care of. Any mutual fund has a minimum
of four trustees. Two thirds of the trustees must be an independent
person and shall not be associated with sponsor. No officer of employee of
an AMC can became a trustee.
Investors:
MF is a solution for investors who lack the time, and/or the skills to
actively manage their investment risk in individual securities. They can
delegate this role to the MF, while retaining the right and the obligation to
monitor their investments in the scheme having some specific objects.
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Asset Management Company (AMC):
AMC can be appointed by the sponsor or by the trustees if
authorized by the trust deed. But it is obligatory for all the mutual fund to
have a AMC to manage and operate its schemes. Appointment of AMC can
be terminated by majority of trustee of 75 per cent of unit holders
(investors).
AMC manages the investment portfolio of schemes. An AMCs
income comes from the management fees it charges to the schemes. Themanagement fee is calculated as a percentage of net assets managed.
Some countries provide for performance based management fees as well.
In order to earn the management fee, any AMC has to employ
people and bear all the establishment costs that are related to its activity,
such as for premises, furniture, computers and other assets, software
development, communication costs etc. These are to be met out of the
management fee earned.
Expenses such as on trustee fees, marketing etc. can be directly
borne by the mutual fund scheme. However, in some cases, competition
in the marketplace could force an AMC to bear some of these costs, which
would otherwise have been borne by investors in the schemes.
Distributors:
Distributors earn a commission for bringing investors into the
schemes of a MF. This commission is an expense for the scheme,
although there are occasions when an AMC chooses to bear the cost,
wholly or partly. Distributors are the key persons of the mutual funds.
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They are the only link between the mutual fund house and the investors.
The main role of the distributors is to analysis the risk appetite of
investors. They have to play their role such a way to keep interest of the
investors in the mutual fund. However they are not directly responsible of
any loss sustained by the investors.
To became a distributor one has to pass the exam conducted by
AMFI association of mutual funds in India.
Registrars:
Holdings of units by unit holders in schemes are tracked by the
schemes Registrar and Transfer agent (R&T). Some AMC prefer to handle
this role in house. The registrar/AMC maintains an account of the
investors investments in and disinvestments (redemptions) from the
scheme. Requests to invest more money into a scheme, or to switch in
another scheme run by the same mutual fund or to recover moneysagainst existing investments in the scheme are processed by the R&T.
Custodian / depository:
The custodian maintains custody of the securities in which the
scheme invests. This ensures an ongoing independent record of the
investments of the scheme. The custodian also follows up on various
corporate actions, such as rights, bonus and dividends declared by
investors companies
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FREQUENTLY USED TERMS:
Net Asset Value (NAV):
Net Asset Value is the market value of the assets of the scheme
minus its liabilities. The per unit NAV is the net asset value of the scheme
divided by the number of units outstanding on the Valuation Date.
How NAV is determined
In order to calculate the NAV of a scheme, each asset and
liability of the scheme needs to be valued.
NAV = Value of all assets (-) minus value of liabilities other than to unit-
holders
It can also be calculated as: Unit capital plus reserves.
Example of NAV
Suppose a scheme with 1,000 units has the following items in its
balance sheet:
Unit Capital Rs 10,000; investments at market value Rs 25,000; other Rs
3,500; other liabilities Rs 2,000; issue expenses not written off Rs 500;
reserve Rs 17,000.
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What would be its NAV?
By putting the above values is tabular form of normal balance sheet.
Liabilities
(Rs)
Assets (Rs)
Unit
Capital
10,00
0
Investment
(market
value)
25,000
Reserves
17,00
0
Other
assets
3,500
Other
Liabilities
2,000
Issue exp
not w/o
500
Total
Liabilities
29,00
0
Total
assets
29,000
NAV = Total assets Minus Liabilities other than to unit-holders, I-e Rs
29,000 minus Rs 2,000
= Rs 27,000
Alternatively, NAV = Unit capital plus Reserves
= Rs 10,000 plus Rs 17,000
= Rs 27,000
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Annual Return:
` Defines returns in uniform periods of a year. It standardizes returns
generated in a period lesser or greater than a year to a per year basis
thereby facilitating easy measurement and comparison of performance.
Balanced Fund / Mixed Funds:
A type of fund that holds securities of two or more asset classes to
meet its objective. The most common types of Balanced Funds / Mixed
Funds hold different combinations of fixed income and equity securities
Benchmark:
A measure used as a yardstick against which the return generated
by a mutual fund is evaluated.
Capital Gain:
It is the difference between the sale price and the cost price of the
security which could be either short term or long term. The long-term
capital gains are taxed at a confessional rate.
Close-Ended Funds:
These are funds that have a specified life span and do not offer
fresh units for sale after the initial offer is closed. While some funds do
offer limited repurchase after a specified time, liquidity is available to the
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investor only in case of close-ended schemes where units are listed on the
stock exchange
Discount to NAV:
It is the difference between the market price of the unit and the Net
Asset Value of the fund where the market price is ruling at less than the
NAV of the scheme. The phenomenon is observed in close-ended schemes
whose units are listed on the bourses.
Equity Fund or Growth Fund:
A mutual fund whose portfolio consists primarily of stock (equity)
with the aim of providing the benefit of capital appreciation to the unit
holders. Normally, such schemes focus on capital appreciation rather than
regular income
Ex-Dividend Date:
A publicly announced date on or after which the investor is not
entitled to the dividend declared. In such a case, the NAV of the scheme
falls by the same amount as the dividend on the ex- dividend date.
Income Fund:
A mutual fund set up with the specific objective of providing the
investors the benefit of interest and dividends. They primarily invest in
fixed income securities.
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Index:
The benchmark against which the performance of the fund is
evaluated to see whether the fund is under-performing or outperforming
the benchmark.
Index Fund
A type of mutual fund whose aim is to replicate a market index.
These funds are passively managed and the weightage of each security in
the portfolio of the fund is the same as that found in the index.
Sector Fund:
A fund that restricts its investments to a defined sector or some
defined sectors thereby limiting the scope of its investment universe.
Short Term Capital Gain:
The capital gain booked on an asset which has been held for less
than 3 years or 1 year in certain cases.
Top Down Approach:
The investment philosophy which involves the EIS analysis. Here the
fund manager first looks at the economy and the industry and then filters
down to the companies that are likely to benefit from those favourable
economic and industrial trends.
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Yield:
It is the effective return to the investor taking into account only the
dividend income and is usually expressed as a percentage of net asset
value or market price.
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FUND
MANAGERINVESTORS
SECURITIES & STOCK
MARKET
R
E
T
U
R
N
S
POOL THEIR
MONEY TO
INVEST
IN
GENRATE
PASS
ON
TO
MUTUAL FUND OPERATION
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Risk Associated With Mutual Fund:-
Interest Rate Risk
Bond price move inversely to changes in interest rate. If
interest rate go up bond price come down and vice-versa
changes in bond price will affect the NAV of income funds since
NAV is compiled on a daily basis, the effect of interest rate
fluctuation will get reflected in the NAV.
Liquidity Risk
This prefer to at which security can be sold at or near its true
value. The primary assessment of liquidity risk is the spread
between the bid price and the offer price quoted by dealer.
Credit Risk
Credit risk or default risk refers to the risk that on investors of a
fixed income security may default. Because of the risk, debentures
are sold at a fixed spread above these offered a treasury security,
which are considered as risk free. Normally, fixed income security
will fluctuate depending upon the actual changes in the provided
level of credit risk and actual event of default.
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Market Risk
The prices of shares are subject to wide price fluctuations
depending upon market conditions over which nobody has a
control. Moreover, every economy has to pass through a cycle-
Boom, Recession, Slump and Recovery. The phase of the business
cycle affects the market conditions to a larger extent.
ADVANTAGES OF MUTUAL FUND
Source : www.amfiindia.com
Mutual Funds offer several benefits to an investor that are
unmatched by the other investment options. Last six years have been the
Affordability Diversification
RegulationsVariety
Tax BenefitsProfessional
Mgmt
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most turbulent as well as exiting ones for the industry. New players have
come in, while others have decided to close shop by either selling off or
merging with others. Product innovation is now pass with the game
shifting to performance delivery in fund management as well as service.
Those directly associated with the fund management industry like
distributors, registrars and transfer agents, and even the regulators have
become more mature and responsible.
Affordability :
Small investors with low investment fund are unable to invest
in high-grade or blue chip stocks. An investor through Mutual
Funds can be benefited from a portfolio including of high priced
stock.
Diversification :
Investors investment is spread across different securities
(stocks, bonds, money market, real estate, fixed deposits etc.)
and different sectors (auto, textile, IT etc.). This kind of a
diversification add to the stability of returns, reduces the risk
for example during one period of time equities might under
perform but bonds and money market instruments might do
well do well and may protect principal investment as well as
help to meet return objectives.
Variety :
Mutual funds offer a tremendous variety of schemes.
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This variety is beneficial in two ways: first, it offers different
types of schemes to investors with different needs and risk
appetites; secondly, it offers an opportunity to an investor to
invest sums across a variety of schemes, both debt and equity
Professional Management :
Mutual Funds employ the services of experienced and skilled
professionals and dedicated investment research team. The whole
team analyses the performance and balance sheet of companies
and selects them to achieve the objectives of the scheme.
Tax Benefits :
Depending on the scheme of mutual funds, tax shelter is also
available. As per the Union Budget-99, income earned through
dividends from mutual funds is 100% tax free. Under ELSS of open-ended equity-oriented funds an exemption is provided up to Rs.
100,000/- under section 80C.
Regulation :
All Mutual Funds are registered with SEBI and they function
within the provisions of strict regulations designed to protect the
interests of investors. The operations of Mutual Funds are regularly
monitored by SEBI.
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Other Benefits
Potential Return :
Over a medium to long-term, Mutual Funds have the potential to
provide a higher return as they invest in a diversified basket of selected
securities.
Low Costs :
Mutual Funds are a relatively less expensive way to invest
compared to directly investing in the capital markets because the benefits
of scale in brokerage, custodial and other fees translate into lower costs
for investors.
Liquidity :
In open-ended schemes, investor can get money promptly at net
asset value related prices from the Mutual Fund itself. In close-ended
schemes the units can be sold on a stock exchange at the prevailing
market price or avail of the facility of direct repurchases at NAV related
prices which some close-ended and interval schemes offer you
periodically.
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Transparency :
Mutual Funds have to disclose their holdings, investment pattern
and the necessary information before all investors under a regulation
framework.
Flexibility :
Investment in Mutual Funds offers a lot of flexibility with features of
schemes 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.
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.
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DISADVANTAGES OF MUTUAL FUND:
The following are the disadvantages of investing through mutual fund:
No control over cost :
Since investors do not directly monitor the funds operations, they
cannot control the costs effectively. Regulators therefore usually limit the
expenses of mutual funds.
No tailor-made portfolio :
Mutual fund portfolios are created and marketed by AMCs, into
which investors invest. They can not made tailor made portfolio.
Managing a portfolio of funds :
As the number of funds increase, in order to tailor a portfolio for
himself, an investor may be holding portfolio funds, with the costs of
monitoring them and using hem, being incurred by him.
Delay in Redemption :
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The redemption of the funds though have liquidity in 24-hours to 3
days takes formal application as well as needs time for redemption. This
becomes cumbersome for the investors.
Non-availability of loans :
Mutual funds are not accepted as security against loan. The investor
cannot deposit the mutual funds against taking any kind of bank loans
though they may be his assets.
Facts about Mutual Fund
Equity instruments like shares from only a part of securities held byMutual Funds. Mutual Fund also invests in debt market, which is relatively
much safer.
The biggest advantage of Mutual Funds is their ability to diversify
the risk.
Mutual Funds exist in India since 1963. Mutual Fund market is much
evolved in India and theyre for last 60years.
Mutual Fund the best solutions for the people who want to managetheir risk and get good returns.
The size of Mutual Fund market in India is Rs. 107728 crores.
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According to the SEBI-NCAER survey of Indian Investor about 15
million of 8.7% of households have invested in Mutual Funds and about 23
millions are unit holders in India.
US-64 is very much a part of the market and is not immune to
vagaries. The crisis has arisen due to mismanagement of funds.
RISK RETURN GRAPH
Risk
Potential
fo
rreturn
Investment horizon
Liquid Fund
Debt Funds
Balanced FundsRatio of Debt : Equity
Growth FundsIndex, Active diversified
Sector funds
* Source: www.hdfcmutualfundindia.com
High Low
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AN OVERVIEW OF THE MARKET PIONEER
NJ INDIA INVEST
NJ India Invest is combination of two words N and J, where N
stands for NEERAJ CHOKSI and J stands for JIGNESH DESAI. They are
two friends form SURAT.
NJ INDIA INVEST- Past and Present:
The seeds of NJ INDIA INVEST were sown in the year 1994 and its
revolutionary journey of 13 years began from a business of MutualFund Advisors to Most successful National Distributor in the Mutual
fund industry.
Presently NJ playing important role as National Distributor in Mutual
fund industry. NJ has its own large distribution channel across India
and more than 7500 AMFI Certified Mutual Fund Advisors are working
with NJ India Invest. Today, NJ India Invest become stronger with 65Branch offices in 15 states with corporate office located at SURAT-
GUJARAT.
NJ FUNDZ NETWORK, a business division of NJ India Invest Pvt.ltd.
has been started in the year 2003 to grow and deals with the 7500
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AMFI Certified Mutual Fund Advisors spread across India. NJ Fund
Network is First in Indian Mutual Fund industry to offer a complete
business platform to Financial Advisors.
NJ INDIA INVESTs corporate philosophy:
At NJ Service and Investing philosophy inspire and shape the
thoughts, beliefs, attitude, actions and decisions of their employees.
Service Philosophy:
NJs primary measure of success is customer satisfaction
think of the customer first, take responsibility, and make prompt
service to the customer a priority
deliver upon the commitments & promises made on time
anticipate, visualize, understand, meet, exceed our customers
needs bring energy, passion & excellence in everything we do
be honest and ethical, in action & attitude, and keep the customers
interest supreme
strengthen customer relationships by providing service in a
thoughtful & proactive manner and meet the expectations,
effectively
Investing Philosophy:
NJ aim to provide Need-based solutions for long-term wealth
creation and with true, unbiased, need-based solutions and advice
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that best meets their stated & un-stated needs. NJs efforts to provide
quality financial & investment advice, NJ believes that
Clients want need-based solutions, which fits them
Long-term wealth creation is simple and straight
Asset-Allocation is the ideal & the best way for long-term wealth
creation
Educating and disclosing all the important facets which the
customer needs to be aware of, is important
The solutions must be unbiased, feasible, practical, executable,measurable and flexible
Constant monitoring and proper after-sales service is critical to
complete the on-going process.
NJ INDIA INVESTs Vision:
To be the leader in our field of business through,
Total Customer Satisfaction
Commitment to Excellence
Determination to Succeed with strict adherence to
compliance
Successful Wealth Creation of our Customers
NJ INDIA INVESTs Mission:
Ensure creation of the desired value for our customers, employees
and associates, through constant improvement, innovation and
commitment to service & quality. To provide solutions which meet
expectations and maintain high professional & ethical standards along
with the adherence to the service commitments
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NJ INDIA INVESTs Business Division:
NJ Fundz Network
NJ Print Shop
NJ Gurukul
NJ Web Nest
NJ Wealth Nest
NJ INDIA INVESTs Services:
NJ Advisors desk:
A comprehensive online Advisor Desk with complete reports, tools to
manage, monitor and control Advisors business.
- Business MIS reports(income,AUM,transaction,bills & rewards)
- Client servicing ( Admin,Protfolio,printing,Customer care)
- Administration ( employees,Branches,Website)
NJ Customer Care:
- Single contact point for all queries available to all Advisor in
India.
- Trained Executives for time bound solving of queries
- All India toll free number- 1800 233 0155
NJ INDIA Online:
Facility to your client to make Transaction online under Advisors, like
Purchase Redemption Switch.
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NJ HR Consultancy:
- Solutions for recruitment of Employees
- Online Management / Tracking of Employee or branch business
- Consulting services for Recruitment, Retention, Appraisals and
payment management.
NJ Research:
- Regular publications like monthly magazine FUNDZ WATCH
weekly reports etc. and communication like daily market update,
daily MF track and much more to keep you update.
- Research
- Reports, recommendation, market insight, analyses etc.
NJ Quality Service:
- Automatic capturing of all transaction done through Advisors
- Daily updating on Advisors client Portfolios
- Timely payments of all Brokerages/dues
- Timely/easy available of all application and other forms
NJ believes in 360 Advisory Platform:
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With this Platform, NJ try to offer all possible products, services and
support which an Advisor would need in his business.
The support functions are generally in the following areas
Business Planning and Strategy
Training and Development Self and of employees
Products and Service Offerings
Business Branding
Marketing
Sales and Development
Technology
Advisors Resources - Tools, Calculators, etc..
Research
Communications
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Marketing Support:
The Marketing Team will help Advisors to give the relevant support
needed for effective sales, creating brand and for the development of
their business.
Branded Flyers and One-pagers for products, new launches/NFOs,
services, etc
Business Organizers, Performance Review Hand-books, etc
Communication support NJ Knowledge Edge and NJ I-Gurukul
series
Letters, Direct Mail pieces
Email Communications for products, new launches/NFOs, services,
etc
Calculators and Tools for effective communication to clients
Support in form of NJ websites, web services and product
development
Branded Presentations
Technology:
Technology is the biggest differentiator.
NJ pots a lot of efforts and resources are put in to build a
technological edge to give the best possible services to Advisors and
their clients.
Technology has been and is NJs key strength. What NJ offer on the
technological front is unique and comprehensive. NJs focus can be
gauged from the fact that NJ have a separate sister concern started for
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the sole purpose of providing the best support to NJ in terms of
technology. High infrastructure spending is done to improve &
strengthen NJs deliverables on this technological front. Fin logic
Technologies (India) Pvt. Ltd. does all the development work in-
house on a continuous basis through its team of talented professionals.
All the tools, services, products, etc offered by NJ has been developed
in-house according to what NJ feel.
In todays world much is dictated by two important words
Information and Technology. NJ realizes this more than anyoneelse. And thats way NJ make constant efforts to keep Advisors ahead
of the curve and ensure that Advisors and their client receive quality,
accurate and timely information
NJ has made arrangements to receive the following through
Technology
Details of transaction of any nature in Mutual Funds by any client,through our Associates or us, on a Daily basis
NAV, Dividend, and other details of all the Mutual Fund schemes on
a Daily basis
Monthly Portfolio and other important information of all the Mutual
Fund schemes
All relevant details of Direct Equities like Prices, Dividends, Bonus,
Market Capitalizations, etc on a Daily basis
All relevant market related information in addition to economic,
event-specific, key economic variables, etc on a Daily basis
Training and Development:
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I-Gurukul is a program run by NJ Fundz Network to educate and train
Financial Advisors. The I-Gurukul program is run throughout the year at
all the Branches of NJ.
Objectives:
To impart all the important knowledge and skills to Financial Advisors
necessary to be successful both as a professional and a business
person
To raise the quality and standard of such Advisors and bring them on
par with the best Advisors in the industry
To ultimately benefit the investors with quality services, offerings and
recommendations
The Team:
The Team at I-Gurukul combines rich industry experience along with
in-depth knowledge of the financial advisory field and the
products/markets. The team has been carefully selected keeping in
mind the objective of the program, from among the best in the
company as well as from the industry.
Customer Care:
NJ Customer Care offers with a 'Single Service Point' to all the
advisors to help solve their customer queries. Centralized team of
Customer Care Executives would solve the queries at the earliest.
Advisors can also view the latest status of all your queries online.
As an NJ Advisor they can submit their queries to Customer Case
Executives by:-
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Telephonic
Email or
Online directly through your Advisors (Partners) Desk
NJ has also introduced a TOLL FREE number for NJ Customer Care.
Members of NJ Fundz Network can now call on 1800 233 0155 from
throughout India and submit their Queries.
Customer Care Objectives:
Solve customer queries within defined turn-around times
Serve Advisors as single contact point for all service related issues
Provide complete transparency and information to customers onqueries
Set a quality customer service benchmark in the industry.
Query Management:
Automated On-line Query Management Module is used to efficiently
handle the queries of our Advisors/Associates.
Query entered is automatically forwarded to concerned person whocan immediately solve the same.
Status is updated online and turns around time for different types of
queries defined.
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Alerts for unsolved queries is automatically shouted to the higher
management in instill discipline
Stringent actions taken against non-compliance
MANAGEMENT:
The management at NJ brings together a team of people with wide
experience and knowledge in the financial services domain. The
management provides direction and guidance to the whole
organization. The management has strong visions for NJ as a globally
respected company providing comprehensive services in financial
sector.
The Customer First philosophy in deeply ingrained in the
management at NJ. The aim of the management is to bring the best to
the customers in terms of
Range of products and services offered
Quality Customer Service
All the key members of the organization put in great focus on the
processes & systems under the diverse functions of business. The
management also focuses on utilizing technology as the key enabler
for all the activities and to leverage the technology for enhancing
overall customer experience.
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Departmental Study Of NJ Indiainvest
THE NJ FUNCTION:
Sales Dept.
OperationsDept.
AccountsDept.
ResearchDepart.
LegalCompliances
HR Dept.
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The support functions are generally in the following areas
Business Planning and Strategy
Training and Development Self and of employees
Products and Service Offerings
Business Branding
Marketing
Sales and Development
Technology
Advisors Resources - Tools, Calculators, etc.. Research
Communications
NJ deal in following Investment:
Mutual Funds
Fixed Deposits
Infrastructure Bonds
Approved Securities for Charitable Trust The above are the core
Investment in which we deal and where we have developed our
competency.
SERVICES
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As NJ Wealth Advisors Global Private Client, you get comprehensive
set of services that ensure you stay informed, insightful, in command,
of your investments at all times.
www.njfunz.com
Services provided to valuable Clients & Agents:
Dedicated portfolio planning & restructuring on demand
The Weekly Performance Sheet (it covers performance of leading
mutual fund schemes)
The Monthly Fund Fact Sheet (it covers comprehensive analysis of
various mutual fund.
Various Subscription services via e-mail
Sharing relevant information related to the Indian Investment
world.
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Over and all we also provide net-based services to our clients and
agents. Our e-services are powered by a comprehensive website
http:/www.njindiainvest.com. It covers detailed information about the
Mutual industry, it passes various financial planners to satisfy
investment goals like retirement planning, childs marriage planning
etc, it also posses various analytical tools to measure the performance
of Mutual Fund schemes viz. Returns Calculators, SIP Returns
Calculator, and many others. There is a separate desk for the clients to
get their portfolio information on fingertip
At NJ their Service and Investing philosophy inspire and shape the
thoughts, beliefs, attitude, actions and decisions of our employees. If
NJ would resemble a body, our philosophy would be our spirit which
drives our body.
Service Standards
Service in words, service in action
Service is the key to unlocking customer satisfaction, which again is
key for sustainability of any business. At NJ we understand this very
well. NJ has set strict processes in place to deliver quality services to
customers. At NJ strict quality service standards are set and a well-
defined process is established and followed religiously by our quality
customer service teams. Performance is evaluated on a frequent basis
and glitches are ironed out.
But quality service also involves quality people in addition to
processes. NJ gives significant focus to the proper training and
development of the people involved in the service delivery chain.
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Further they,
Have well-defined "Privacy Policy" to keep clients information
confidential & internal audits done on the same at regular intervals
Receive various statistics which are analyzed on an ongoing basis to
improve the service standards
They are committed to improve and enhance our services and
undertake new service initiatives. Such and other services differentiate
us with other service providers in the industry.
NJs Service Commitments
The service commitments are to guide the actions of the people at
NJ. Clearly stated, customers can freely communicate any such
actions/events wherein they feel that any of the following
commitments have been breached / compromised. At NJ we desire to
honor our commitments at all points of time and to all our customerswithout any bias.
To provide customer-focused need-based valued services
To provide reliable, accurate and timely information
To maintain all records in privacy
To optimize services/benefits at least justifiable cost
To develop and grow the customers business
To provide constructive after sales service
To honor our service commitments
Services offered
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www.njfundz.com
A good product/service offering, targeted at meeting the needs of
the clients, lies at the center of any business. With customers today
expecting single window solutions and services, successful and easy
integration of products is the need of the hour.
Any Advisor should wake up to this and other crucial changes taking
place and try to adapt himself to this change to avoid being out-dated
and out-serviced.
At NJ they try to foresee such changes and develop solutions that
are new, needed and well appreciated in the industry. The services
offered on the NJ Fundz Network are unique in the industry.
The services are designed to equip the independent advisors with all
the support and tools needed for a successful business. NJ providesservices and support where an advisor may feel ill equipped and make
them their strengths. The Partner on the NJ Fundz Network instantly
beats competition by being on the Network itself. Its a new paradig
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NJ IndiaInvests Achievements:-
NJ IndiaInvest is a growing company that can be very well proved
from the below achievements.
Have gained a dominant place in the Indian Mutual fund
Distribution Business
Certified by the association of Mutual Funds as AMFI registered mutual
fund advisor
Won the Pru. chairmans Award twice in the year 2000 & 2002 for
outstanding performance in the schemes of prudential ICICI Mutual
fund. The Chairman, Prudential, presented the awards at London both
the times.
Won many other awards & certificates for outstanding performance in
various mutual fund schemes.
It has acquired about 15 to 17% share of total mutual fund business of
Gujarat.
Received the Award for year 2003-04 from HDFC Mutual fund for
highest selling of Mutual Fund. The award was received by director at
Scotland.
Asset Under Management more than 850 crores.
Recognitions
Year 2000:
For Outstanding Performance presented by Chairman, Prudential Plc.
at London
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Year 2002:
For Outstanding Performance presented by Group Chief Executive,
Prudential Plc. at London
Year 2003:
For Outstanding Performance presented by Group Chief Executive,
Prudential Plc. at London
Year 2004:
Among Most Valued Business Associates presented by HDFC Standard
Life at Edinburgh, Scotland
Year 2006:
Award for mobilizing the Highest Number of SIPs at National Level by
Fidelity Mutual Fund Plc at Mumbai
AMCs with NJ IndiaInvest:
Alliance Capital Mutual Fund
Birla Mutual Fund
Cholamandalam Cazenove Mutual Fund
DSP Merrill Lynch Mutual Fund
Dundee Mutual Fund
Escorts Mutual Fund
First India Mutual Fund
Franklin Templeton Mutual Fund
Pioneer ITI
HDFC Mutual Fund
HSBC Mutual Fund
http://www.njindiainvest.com/mf/aboutfund/amcscheme.asp?ccode=D0002http://www.njindiainvest.com/mf/aboutfund/amcscheme.asp?ccode=D0003http://www.njindiainvest.com/mf/aboutfund/amcscheme.asp?ccode=E0001http://www.njindiainvest.com/mf/aboutfund/amcscheme.asp?ccode=F0001http://www.njindiainvest.com/mf/aboutfund/amcscheme.asp?ccode=T0001http://www.njindiainvest.com/mf/aboutfund/amcscheme.asp?ccode=K0002http://www.njindiainvest.com/mf/aboutfund/amcscheme.asp?ccode=H0001http://www.njindiainvest.com/mf/aboutfund/amcscheme.asp?ccode=H0002http://www.njindiainvest.com/mf/aboutfund/amcscheme.asp?ccode=D0002http://www.njindiainvest.com/mf/aboutfund/amcscheme.asp?ccode=D0003http://www.njindiainvest.com/mf/aboutfund/amcscheme.asp?ccode=E0001http://www.njindiainvest.com/mf/aboutfund/amcscheme.asp?ccode=F0001http://www.njindiainvest.com/mf/aboutfund/amcscheme.asp?ccode=T0001http://www.njindiainvest.com/mf/aboutfund/amcscheme.asp?ccode=K0002http://www.njindiainvest.com/mf/aboutfund/amcscheme.asp?ccode=H0001http://www.njindiainvest.com/mf/aboutfund/amcscheme.asp?ccode=H00027/31/2019 To find out whether LIC agent believe in Financial Planning or not.
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IL & FS Mutual Fund
ING Savings TrustJM Mutual Fund
LIC Mutual Fund
Prudential ICICI Mutual Fund
Reliance Capital
SBI Mutual
Standard Chartered Mutual Fund
Sun F&C Mutual Fund
Sundaram Mutual Fund
Tata Mutual
Unit Trust Of India
Important responsibilities of investors in the financial planning
exercise?
Should set measurable financial goals.
Should understand the impact of financial decisions on their cash flows
and their income. Should be willing to revise and re-balance their portfolios with
changing market conditions, performance and their changing needs.
Investors benefit immensely by starting early and being systematic
and disciplined in their approach.
http://www.njindiainvest.com/mf/aboutfund/amcscheme.asp?ccode=I0002http://www.njindiainvest.com/mf/aboutfund/amcscheme.asp?ccode=I0003http://www.njindiainvest.com/mf/aboutfund/amcscheme.asp?ccode=J0001http://www.njindiainvest.com/mf/aboutfund/amcscheme.asp?ccode=L0001http://www.njindiainvest.com/mf/aboutfund/amcscheme.asp?ccode=P0001http://www.njindiainvest.com/mf/aboutfund/amcscheme.asp?ccode=R0001http://www.njindiainvest.com/mf/aboutfund/amcscheme.asp?ccode=S0002http://www.njindiainvest.com/mf/aboutfund/amcscheme.asp?ccode=A0002http://www.njindiainvest.com/mf/aboutfund/amcscheme.asp?ccode=S0004http://www.njindiainvest.com/mf/aboutfund/amcscheme.asp?ccode=S0003http://www.njindiainvest.com/mf/aboutfund/amcscheme.asp?ccode=T0002http://www.njindiainvest.com/mf/aboutfund/amcscheme.asp?ccode=U0001http://www.njindiainvest.com/mf/aboutfund/amcscheme.asp?ccode=I0002http://www.njindiainvest.com/mf/aboutfund/amcscheme.asp?ccode=I0003http://www.njindiainvest.com/mf/aboutfund/amcscheme.asp?ccode=J0001http://www.njindiainvest.com/mf/aboutfund/amcscheme.asp?ccode=L0001http://www.njindiainvest.com/mf/aboutfund/amcscheme.asp?ccode=P0001http://www.njindiainvest.com/mf/aboutfund/amcscheme.asp?ccode=R0001http://www.njindiainvest.com/mf/aboutfund/amcscheme.asp?ccode=S0002http://www.njindiainvest.com/mf/aboutfund/amcscheme.asp?ccode=A0002http://www.njindiainvest.com/mf/aboutfund/amcscheme.asp?ccode=S0004http://www.njindiainvest.com/mf/aboutfund/amcscheme.asp?ccode=S0003http://www.njindiainvest.com/mf/aboutfund/amcscheme.asp?ccode=T0002http://www.njindiainvest.com/mf/aboutfund/amcscheme.asp?ccode=U00017/31/2019 To find out whether LIC agent believe in Financial Planning or not.
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Very important points on financial planning
The planner can look at all the clients need including budgeting,
saving, taxes, investments, insurance and retirement planning.
A financial planner can link his own rewards and fees to the clients
financial success and the achievement of their financial goals
Mutual Fund is the most important tool for financial planning.( Core
Product)
Financial is not only investing. It comes before investing.
It is relevant for all categories of clients.
It is not as same as retirement planning.
It is not only Tax Planning.
Financial planning is important at younger stage of life.
Important points on Financial Planning
The basis of genuine investment advice should be financial planning to
suit the investors situation. It should not be current market condition.
Financial Planning allows a person to achieve financial goals through
proper management of finances.
Financial planners and their clients should focus on allocating funds to
different asset classes.
Financial planning is relevant not only to HNIs
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Financial planning works better for younger/ middle aged client.
Financial planning is not merely tax planning.
Wealth cycle for investors
Comparison by Nature of Investment
Preference for low riskproducts
Wealth preservation.Medium to long termSudden
wealthsurge
Ability to take risk andinvest for the longterm
transfer
Low liquidity needs.Long term
investment of
inheritance
InterGenerati
onal
Preference for incomeand debt products
Liquid and medium terminvestments.
Higher liquidityrequirements
ReapingStage
Lower risk appetitepre-specified needs
draw closer
Liquid and medium term
investments.
Near term needs for
funds as
Transition
Stage
Products. High-riskappetite
Financial goals
Growth options and longterm
Investing for longterm identifed
Accumulationstage
Investment preferencesFinancial needsStage
R e t u r nS a f e t y
C o n v e n i c eV o l a t i l i t y L i q u i d i t
E q u i t y H i g h M o d e r a t e L o w H i g h H i g h o r L
F I B o n d s M o d e r a t e H i g h H i g h M o d e r a t e M o d e r a t e
C o r p o r a t e D e b e n t u r e sM o d e ra t e L o wM o d e r a t e M o d e ra t e L o w
C o m p a n y F ix
D e o s i t e s
M o d e ra t
M o d e ra tL o w L o w L o w
B a n k D e p o s i t e s L o w H i g h H i g h L o w H i g h
P P F M o d e r a t e H i g h H i g h L o w M o d e r a t e
L i fe I n s u r a n c e L o w M o d e r a t e H i g h L o w L o w
G o l d M o d e r a t e L o w H i g h M o d e r a t e M o d e r a t e
R e a l E s t a t e H i g h L o w M o d e r a t e H i g h L o w
M u t u a l F u n d s H i g h H i g h H i g h M o d e r a t e H i g h
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What are the financial planning strategies that can be
recommended to investors?
Rupee cost averaging.
A fixed amount is invested at regular intervals
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More units are bought when prices are low and fewer units are bought
when prices are high. Over a period of time, the average purchase
price of investor is lower than average NAV.
Its disadvantage: Does not indicate when to sell or switch.
Value averaging.
A fixed amount is targeted as the desired value of the portfolio at
regular intervals
If markets have moved up, the units are sold to restore target value
and vice versa.
It is superior to RCA as it enables the investor to book profits and
rebalance the portfolio.
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Research Methodology
Primary Objectives
To find out whether LIC agent believe in Financial Planning or not.
What are their beliefs about the financial planning? What do they think
about financial planning?
Secondary objective
To find out whether LIC agent manage the cash flow of clients by using
various cash management technique.
To find out whether LIC agent solves the investment & planning issues or
not of clients.
To find out whether LIC agent does Retirement planning or not.To find out whether LIC agent does tax planning or not.
To find out whether LIC agent does Estate Planning or not.
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Research Design:
I have used the Descriptive Research Design for the purpose of
survey, as it will enable me to describe the characteristics of a particular
individual or a group of LIC agents and their role towards financial
planning in financial advisory business.
Sampling Method:
I have used the non probability sampling method of Quota
sampling in different areas of Ahmedabad city, as it would give better
idea about the different categories of LIC agents what are their beliefs
about financial planning.
Sample Size:
It would be better to have a sample of 150 people to have better
idea and representativeness of the population being surveyed.
Research Instrument:
I have used primary data collection method. A detailed
questionnaire, BOP (Business Opportunity Presentation) is be used for
purpose survey and it is attached with this proposal.
Data analysis tool:
Since it is better to greater validity of the results found it is better to
use the statistical software using computers i.e. SPSS
(Statistical Package for Social Science)
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In SPSS I used T-test, Mean, Median, Mode, Frequency Table, Cross
Tabulation.
Data analysis and Interpretation
Q.1 Do you believe that financial planning should cover all areas
of financial needs of clients?
One Sample t-Test:
Null Hypothesis (HO): There is no significant difference between
calculated mean and hypothesized mean (4). In other words, wehypothesize that the LIC agents are agree that financial planning shouldcover all areas of financial needs of clients
i.e. Ho : x = = 4
Alternative Hypothesis (H1): There is significant difference betweencalculated mean and hypothesized mean. In other words the LIC agentsare not agree with the statement that financial planning should cover allareas of financial needs of clients?
i.e. H1: x , i.e. H1: x 4
Significance level: 0.05
One-Sample Statistics
N
Mea
n
Std.
Deviation
Std. Error
Mean
Covert financial
needs150 4.10 .81 6.60E-02
One-Sample Test
Test Value = 4t df Sig. (2-
tailed)
Mean
Differenc
e
95% Confidence
Interval of the
Difference
Lower Upper
Cover
financial
needs
1.514 149 .132 1.00E-01 -3.05E-02 .23
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Inference:
Here the test is performed at 95% significance level and the p-value
comes out as 0.132 which is grater than 0.05, it means that the null
hypothesis H0 is accepted and it can be said that there is significant
difference between calculated mean and hypothesized mean.
Q.2 (A) Do you believe that each and every financial decision
affected other areas of finance?
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Affect Financial Areas
Frequenc
yPercent
Valid
Percent
Cumulative
Percent
ValidYes 136 90.7 90.7 90.7No 14 9.3 9.3 100.0
Total 150 100.0 100.0
Affect Financial Areas
No
Yes
INFERENCE:
Out of 150 LIC agents
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136(91%) LIC agents are believe that each and every financial
decision affected other areas of finance like risk management,
tax plan, estate plan, investment plan etcand
14(9%) LIC agents are believe that each and every financial
decision is not affected other areas of finance,
So we can say that majority LIC agents are believe that each and
every financial decision affected other areas of finance like.
Q.2 (B) If yes which financial areas are affected of financial
decision?
One Sample t-Test:
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Null Hypothesis (HO): There is no significant difference between
calculated mean and hypothesized mean (3). In other words, wehypothesize that the LIC agents are agree that each and every financialdecision affected other areas of finance
i.e. Ho : x = = 4
Alternative Hypothesis (H1): There is significant difference betweencalculated mean and hypothesized mean. In other words the LIC agentsare not agree with the statement that each and every financial decisionaffected other areas of finance.
i.e. H1: x , i.e. H1: x 4
Significance level: 0.05
One-Sample Statistics
NMea
n
Std.
Deviation
Std. Error
Mean
Risk Mgmt. 150 3.97 1.16 9.46E-02
Retirement
Plan150 3.77 1.14 9.34E-02
Tax Plan 150 3.91 1.85 .15
Estate Plan 150 3.46 1.22 9.95E-02
One-Sample Test
Test Value = 3
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t dfSig. (2-
tailed)
Mean
Difference
95% Confidence
Interval of the
Difference
Lower Upper
Risk Mgmt. 10.292 149 .000 .97 .79 1.16
Retirement
Plan8.211 149 .000 .77 .58 .95
Tax Plan 6.047 149 .000 .91 .61 1.21
Estate Plan 4.623 149 .000 .46 .26 .66
Inference:
Here the test is performed at 95% significance level and the p-value
comes out as 0.000 which is less than 0.05, it means that the null
hypothesis H0 is rejected and it can be said that there is significant
difference between calculated mean and hypothesized mean. As our
mean is more than 3(3.46) and less than 4(3.97), which is between, agree
and strongly agree. So, we can say that LIC agent are agreed but not
strongly agree with the statement.
Q.3 Do you believe that my clients should adopt more easily to
life changes (financial) in order to feel more secure?
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65/123
One Sample t-Test:
Null Hypothesis (HO): There is no significant difference betweencalculated mean and hypothesized mean (4). In other words, wehypothesize that the LIC agents are agree that clients should adopt moreeasily to life changes (financial) in order to feel more secure.
i.e. Ho : x = = 4
Alternative Hypothesis (H1): There is significant difference betweencalculated mean and hypothesized mean. In other words the LIC agents
are not agree with the statement that clients should adopt more easily tolife changes (financial) in order to feel more secure.
i.e. H1: x , i.e. H1: x 4
Significance level: 0.05
One-Sample Statistics
NMea
n
Std.
Deviation
Std. Error
Mean
Feel More
Secure150 4.23 1.06 8.64E-02
One-Sample Test
Test Value = 4
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t dfSig. (2-
tailed)
Mean
Difference
95% Confidence
Interval of the
Difference
Lower Upper
Feel More
Secure2.701 149 .008 .23 6.26E-02 .40
Inference:
Here the test is performed at 95% significance level and the p-value
comes out as 0.008 which is less than 0.05, it means that the null
hypothesis H0 is rejected and it can be said that there is significant
difference between calculated mean and hypothesized mean. As our
mean is 4.23 and which is between agree and strongly agree. So, we can
say that LIC agent are agreed but not strongly agree with the statement.
Q.4 How do you manage cash flow of your clients?
Cash flow mgmt
Frequency Percent
Valid
Percent
Cumulative
PercentValid Sound Risk
Managemen
t
104 69.3 69.3 69.3
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Insurance
Techniques 46 30.7 30.7 100
Total 150 100 100
Frequency
Sound Risk
Management,
104, 69%
Insurance
Techniques, 46,31%
Sound Risk
Management
Insurance Techniques
INFERENCE:
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Out of 150 LIC agents
46(31%) LIC agents are use insurance techniques like insurance,
government securities, bank deposit etc for manage the cash
flow of his clients and
104(69%) LIC agents are use sound risk management like equity,
mutual funds, ULIP schemes ETC for manage the cash flow of his
clients,
So we can say that majority LIC agents are use sound risk
management technique for manage the cash flow of his clients
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Q.5 (A) Do you believe in creating and managing accumulation of
wealth, to generate future capital cash flow for your clients?
Generate Future Capital
Frequency Percent Valid Percent
Cumulative
PercentValid Yes 142 94.7 94.7 94.7
No8 5.3 5.3 100.0
Total 150 100.0 100.0
Generate Future Capital
No
Yes
INFERENCE:
Out of 150 LIC agents
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142(95%) LIC agents are believe in creating and managing
accumulation of wealth, to generate future capital cash flow for his
clients and
8 (5%) LIC agents are not believe in creating and managing
accumulation of wealth, to generate future capital cash flow for his
clients
So we can say that majority LIC agents are believe in creating and
managing accumulation of wealth, to generate future capital cash flow for
his clients
Q.5 (B) If yes where do you invest?
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INFERENCE:
Suggestion For Investme
83
64
3641
13
135
0
20
40
60
80
100
120
140
160
Mutual
Fund
Equity Post Bank Debt Insurance
Investment Produc
No.ofRespondents
Series1
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Out of 150 LIC agents
135 LIC agents suggest insurance is the best investment product for
investment,
83 LIC agents suggest mutual funds are the best investment
product for investment,
64 LIC agents suggest equity is the best investment product for
investment,
36 LIC agents suggest deposit in post is the best for investment,
41 LIC agents suggest deposit in bank is the best for investment,
13 LIC agents suggest debt like debenture, government securities
etc is the best investment product for investment,
So we can say that according to preferences of LIC agents insurance,
mutual funds, equity is best investment product for investment.
Q.6 Do you believe in planning to ensure financial independent
at retirement?
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73/123
One Sample t-Test:
Null Hypothesis (HO): There is no significant difference betweencalculated mean and hypothesized mean (4). In other words, wehypothesize that the LIC agents are agree that planning to ensurefinancial independent at retirement.
i.e. Ho : x = = 4
Alternative Hypothesis (H1): There is significant difference between
calculated mean and hypothesized mean. In other words the LIC agentsare not agree with the statement that planning to ensure financialindependent at retirement.
i.e. H1: x , i.e. H1: x 4
Significance level: 0.05
One-Sample Statistics
NMea
n
Std.
Deviation
Std. Error
Mean
Independence At
Retirement150 4.61 .63 5.17E-02
One-Sample Test
Test Value = 4
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t dfSig. (2-
tailed)
Mean
Difference
95% Confidence
Interval of the
Difference
Lower Upper
Independence
At Retirement11.729 149 .000 .61 .50 .71
Inference:
Here the test is performed at 95% significance level and the p-value
comes out as 0.000 which is less than 0.05, it means that the null
hypothesis H0 is rejected and it can be said that there is significant
difference between calculated mean and hypothesized mean. As our
mean is 4.61 and which is between agree and strongly agree. So, we can
say that LIC agent are agreed but not strongly agree with the statement.
Q.7 Do you believe that financial planning fulfills the goal of my
clients?
One Sample t-Test:
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Null Hypothesis (HO): There is no significant difference between
calculated mean and hypothesized mean (4). In other words, we
hypothesize that the LIC agents are agree that financial planning fulfills
the goal of my clients.
i.e. Ho : x = = 4
Alternative Hypothesis (H1): There is significant difference between
calculated mean and hypothesized mean. In other words the LIC agents
are not agree with the statement that financial planning fulfills the goal of
my clients.
i.e. H1: x , i.e. H1: x 4
Significance level: 0.05
One-Sample Statistics
NMea
n
Std.
Deviation
Std. Error
Mean
Fulfills The
Goals150 4.41 .84 6.89E-02
One-Sample Test
Test Value = 4
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t dfSig. (2-
tailed)
Mean
Difference
95% Confidence
Interval of the
Difference
Lower Upper
Fulfills
The Goals5.900 149 .000 .41 .27 .54
Inference:
Here the test is performed at 95% significance level and the p-value
comes out as 0.000 which is less than 0.05, it means that the null
hypothesis H0 is rejected and it can be said that there is significant
difference between calculated mean and hypothesized mean. As our
mean is 4.41 and which is between agree and strongly agree. So, we can
say that LIC agent are agreed but not strongly agree with the statement.
Q.8 (A) Do you believe that planning is necessary for
conservation and distribution of assets?
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Conservation & Distribution of Assets
Frequency Percent Valid PercentCumulative
Percent
Valid
Yes 140 93.3 93.3 93.3
No 10 6.7 6.7 100.0
Total 150 100.0 100.0
Conservation & Destribution Of Assets
No
Yes
INFERENCE:
Out of 150 LIC agents
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140(93.3%) LIC agents are believe that planning is necessary for
conservation and distribution of assets and
10 (6.7%) LIC agents are not believe that planning is necessary for
conservation and distribution of assets,
So we can say that majority LIC agents are believe that planning is
necessary for conservation and distribution of assets.
Q.8 (B) If yes which kind of financial product would you suggest
for conservation and distribution of assets of your clients?
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Suggestion Of Conservation And Distribution Of
Assets
82
64
3640
12
133
0
20
40
60
80
100
120
140
Mutual
fund
Equity Post Bank Debt Insurance
Investment Product
No.O
F
Respo
ndance
Series1
INFERENCE:Out of 150 LIC agents
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80/123
133 LIC agents suggest insurance is the best financial product for conservation anddistribution of assets.
83 LIC agents suggest mutual funds are the best financial product for conservation
and distribution of assets.
64 LIC agents suggest equity is the best financial product for conservation and
distribution of assets.,
36 LIC agents suggest deposit in post is the best financial product for conservation
and distribution of assets.
41 LIC agents suggest deposit in bank is the best financial product for conservation
and distribution of assets.
13 LIC agents suggest debt like debenture, government securities etc is the best
financial product for conservation and distribution of assets.
So we can say that according to preferences of LIC agents insurance, mutual funds,equity is the best financial product for conservation and distribution of assets.
.
Q.9 (A) Do you have plan for tax saving of your clients?
Plan for Tax Saving
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Frequenc
yPercent
Valid
Percent
Cumulative
Percent
Valid Yes 150 100.0 100.0 100.0
Plan For Tax Saving
Yes
INFERENCE:
150(100%) LIC agents has tax saving plan for solving the tax issues
of his clients,
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So we can say that all LIC agents has different types of tax saving
plan for solving many tax issues of his clients.
Q.9 (B) if yes which kind of tax saving financial product would you
suggest for your clients?
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83/123
INFERENCE:
Out of 150 LIC agents
Sugg e stion for Tax Sa
47
150
28
103
42
5 4
0
20
40
60
80
100
120
140
160
MutualF
und
Insurance
NSE
ULIP
PPF
ELSS
Othe
r
Investm e nt Prod
N
o.o
fRespondents
Series
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84/123
150 LIC agents suggest insurance is the best investment product for
tax saving,
103 LIC agents suggest ULIP schemes are the best investment
product for tax saving,
47 LIC agents suggest mutual funds are the best investment
product for in tax saving,
42 LIC agents suggest deposit in post is the best for investment tool
for tax saving,
28 LIC agents suggest NSE is the best investment tool for tax
saving,
5 LIC agents suggest ELSS schemes is the best investment product
for tax saving,
So we can say that according to preferences of LIC agents
insurance, ULIP schemes is best investment product for tax saving.
Q.10 Which of the below mentioned details of your clients is
necessary?
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85/123
One Sample t-Test:
Null Hypothesis (HO): There is no significant difference between
calculated mean and hypothesized mean (4). In other words, wehypothesize that the LIC agents are mentioned all details of the clients.i.e. Ho : x = = 4
Alternative Hypothesis (H1): There is significant difference betweencalculated mean and hypothesized mean. In other words the LIC agentsare not mentioned all details of the clients.i.e. H1: x , i.e. H1: x 4
Significance level: 0.05
One-Sample Statistics
NMea
n
Std.
Deviation
Std. Error
Mean
C Age 150 4.72 .49 4.03E-02
C Gender 150 4.65 .71 5.83E-02
C Occupation 150 4.73 .49 3.98E-02
C Marital Status 150 4.63 .66 5.39E-02
C No. Of Children 150 4.60 .70 5.68E-02
Gender Of Children 150 4.48 .90 7.37E-02
C No. Of
Dependence150 4.46 .93 7.60E-02
C Other income 150 4.49 .93 7.55E-02
One-Sample Test
Test Value = 4
t df Sig. (2-
tailed)
Mean
Difference
95% Confidence
Interval of the
Difference
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Lower Upper
C Age 17.880 149 .000 .72 .64 .80
C Gender 11.206 149 .000 .65 .54 .77
C Occupation 18.444 149 .000 .73 .65 .81
C Marital
Status11.759 149 .000 .63 .53 .74
C No. Of
Children10.571 149 .000 .60 .49 .71
Gender Of
Children6.512 149 .000 .48 .33 .63
C No. Of
Dependence6.049 149 .000 .46 .31 .61
C Other
income6.532 149 .000 .49 .34 .64
Inference:
Here the test is performed at 95% significance level and the p-value
comes out as 0.000 which is less than 0.05, it means that the null
hypothesis H0 is rejected and it can be said that there is significant
difference between calculated mean and hypothesized mean. As our
mean is more than 4(4.46) and less than 4(4.73), which is between, agree
and strongly agree. So, we can say that LIC agent are agreed but not
strongly agree with the statement.
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Q.11 Do you ask for the expected return of the clients?
Expected Return
Frequency Percent Valid PercentCumulative
Percent
Valid
Yes 148 98.7 98.7 98.7
No 2 1.3 1.3 100.0
Total 150 100.0 100.0
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INFERENCE:
Out of 150(98.7%) LIC agents
142 LIC agents ask expected return of his clients
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Only 8(1.3%) LIC agents not believe in asking about the expected
return of his clients
Q.12 It is indispensable to know the risk appetite of the client
One Sample T-Test:
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90/123
Null Hypothesis (HO): There is no significant difference between
calculated mean and hypothesized mean (4). In other words, wehypothesize that the LIC agents are agree with the statement It isindispensable to know the risk appetite of the clienti.e. Ho : x = = 4
Alternative Hypothesis (H1): There is significant difference betweencalculated mean and hypothesized mean. In other words the LIC agentsare not agree with the statement It is indispensable to know the riskappetite of the client
i.e. H1: x , i.e. H1: x 4
Significance level: 0.05
One-Sample Statistics
NMea
n
Std.
Deviation
Std. Error
Mean
C Know The
Risk150 4.43 .81 6.65E-02
One-Sample Test
Test Value = 4
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t dfSig. (2-
tailed)
Mean
Difference
95%
Confidence
Interval of the
Difference
Lower
Up
pe
r
C Know
The Risk6.516 149 .000 .43 .30 .56
Inference:
Here the test is performed at 95% significance level and the p-value
comes out as 0.00 which is less th