on

For

Conducted by

1
 This is to certify that Mr. Punit Nitin Raut, a student of Chetanas R. K. Institute of
Management & Research bearing Roll No. 98 and specializing in Finance has successfully
completed the project titled study of financial products through IFA channel under the
guidance of Prof. Nalini krishnaa in partial fulfilment of the requirements of Masters in
Management Studies in Finance by Chetanas R. K. Institute of Management & Research for
the academic year of 2016 2018.

________________ ________________
Prof. Nalini krishnaa Dr. Jayshree Bhake
Project Guide Director

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 I hereby declare that the following project report titled STUDY OF FINANCIAL
PRODUCTS THROUGH IFA CHANNEL is an authentic work done by me. This is to declare
that all the work indulged in the completion of this work such as profound and honest work of
mine.

Date: Punit Nitin Raut

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 I would like to thank all the employee of MOTILAL OSWAL SECURITIES PVT
LTD. To give me opportunities to intern with them. The training at this company was held for
2 months from 2st May 2017 to 1st July 2017. During this training period I was guided by my
mentor Mr. Vatsal Tripathi. He shared his knowledge about financial products like Mutual
Fund & Portfolio Management Services with me & also helps me in project. He made sure that
I was exposed to all the distribution channel partners, operational process and also was exposed
to sale mutual funds. Under his guidance I was able to enhance my knowledge about equity
market, various financial products and inter-personal skill.
These 2 Months was very important for me and also helped me in going beyond class
room and get a practical feel of corporate world.

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1 Introduction
2 Concept, meaning & Importance of investment 8
3 Investment objective 11
4 Company overview
5 Vision Statement 12
6 Mission Statement & awards 13
7 Why Motilal Oswal 14
8 Services 15
7 Introduction to project
8 PMS 20
9 Investment Philosophy: Buy Right Sit Tight 22
10 Value PMS 28
11 IOP PMS 29
12 Types of PMS & Difference between PMS & Mutual Fund 30
13 Concept of Mutual Fund 33
14 History of Mutual Fund 35
15 Advantages & Disadvantages of Mutual Fund 36
16 Types of Mutual Funds 39
17 Literature review 45
18 Research methodology 49
19 Data analysis 50
20 Findings 56
21 Conclusion 57
22 Bibliography 58

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 This project has been a great learning experience for me at the same time it gave me
enough scope to implement my analytical ability and enhance my skills.

In few years investment products has emerged as a tool for ensuring ones financial
wellbeing. These products have not only contributed to the India growth story but have also
helped families tap into the success of Indian Industry. As information and awareness is rising
more and more people are enjoying the benefits of investing in equity market. The main reason
the number of retail investors remains small is that nine in ten people with incomes in India do
not know that such investment products exist. But once awareness of mutual fund & portfolio
management services investment opportunities, the number of people who decide to invest in
mutual funds increases to as many as one in five people. The trick for converting a person with
no knowledge of equity investment to a new equity investor customer is to understand which
of the potential investors are more likely to buy mutual funds & portfolio management services
and to use the right arguments in the sales process that customers will accept as important and
relevant to their decision.

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 An investment is an asset or purchased of goods which will be use or beneficial in future
for creating wealth. In an economic sense, an investment is the purchase of goods that are not
consumed today but are used in the future to create a wealth.
In finance, an investment is a monetary purchased of asset which will provide a good income
& better life in future.

Investing a money means putting a money which will work for you or which will help
you to create a wealth in future. Essentially it is a different way to think how to make money.
While growing up, most of us taught that you can generate an income only by getting a job &
working. If you want more money you have to work more.
Instead of that you need to send an extension of yourself or your money to work. By
wasting your time in sleeping, reading a newspaper or socializing with your friends you can
also be earning money elsewhere. It is quite simple that you have to make money which will
work for you, which will maximize your earning potential whether or not you receive a raise,
decide to work overtime, or look for a higher paying job.
There are many other different ways where you can go to invest your money. This
includes putting your money in market stocks, bonds, fixed deposits, gold, real estate and
mutual fund etc. or stating your own business. Sometimes people refer to these options as an
Investment Vehicle which is just another way of saying a way to invest. Each of these
vehicles has some positive & negative points.

Everybody wants to generate more income. In todays generation investment is a

necessity, because everybody wants to increase their personal freedom, in the sense of security
and ability to afford the things that they want in a life.

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 However, investment is becoming more necessity. The days when everyone worked in
a same job for 30years and then retired with a good fat pension are gone. For average people
investing is not so helpful tool as the way they can retire and maintain their present lifestyle.

Considering two individuals, Pam and Sam. Both of them at the same age. When Pam
was at the age of 25 she invested 15000 at an interest rate of 5.5%. Lets assume interest rate
was compounded annually. By the she reaches 50, she will have 57200.89
(15000*{1.055^25}) in her account.
Pams friend Sam did not start investing until at the age of 35. At that time, he invested
15000 at the same rate of interest 5.5%. By the time he reaches 50 he will have 33487.15
(15000*{1.055^15}) in his bank account.
Both Pam & Sam are at the age of 50. But Pam has 23713.74 more in her saving
account than Sam. Even though he invested same amount of money. By giving her investment
more time to grow, Pam earned a total of 42200.89 in interest and Sam earned only 18 487.15
It means that if you start investing money early it will beneficial for you in future. It will help
you to create more wealth in a future.
Both Pam & Sam earning interest are shown in chart

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 As shown in a chart, both investments start to grow slowly and then accelerate, as
reflected in the increase in the curves' steepness. Pam's line becomes steeper as she nears his
50s not simply because she has accumulated more interest, but because this accumulated
interest is itself accruing more interest.
Pam's line gets even steeper (her rate of return increases) in another 10 years. At age 60
he would have nearly 100,000 in her bank account, while Sam would only have around
60,000, a 40,000 difference!

When you invest, always keep in mind that compounding amplifies the growth of your
working money. Just like investing maximizes your earning potential, compounding
maximizes the earning potential of your investments - but remember, because time and
reinvesting make compounding work, you must keep your hands off the Principal and earned
interest.
All the investors are trying to make money. They all are come from different
background. The investors use different types of financial vehicle to invest their money, which
will help them in future to make a good wealth.

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 While investing money investors have to consider certain factors where their moneys
are invested, Safety of capital, current income & capital appreciation these factors are influence
investment decision & will also depend on the age, position of person in his life, financial
position of person.
A financial position of investors will also effect on his or her objectives of investment.
E.g. a millionaire who is taking an effort to make a profit in his business, he might not have
any problem to putting down 100,000 from an investment because, for him hundred grands is
a small percentage for him.
On the other hand, a newly married couple who are saving their money for down
payment for house. They cant afford to lose their money from their speculative investment.

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 Motilal Oswal Securities Ltd. (MOSL) was founded in 1987 as a small sub-broking
unit, with just two people running the show. Focus on customer-first attitude, ethical and
transparent business practices, respect for professionalism, research-based value investing and
implementation of cutting-edge technology have enabled us to blossom into an over 1500
members team.
Today Motilal Oswal Securities Ltd is a well-diversified financial services firm offering
a range of financial products and services such as Private Wealth Management, Retail Broking
and Distribution, Institutional Broking, Asset Management, Investment Banking, Private
Equity, Commodity Broking, Currency Broking and Home Finance.
Motilal Oswal Securities Ltd has a diversified client base that includes retail customers
(including High Net Worth Individuals), mutual funds, foreign institutional investors, financial
institutions and corporate clients. It is headquartered in Mumbai and as of March 2016, has a
network spread over 520 cities and towns comprising 1,743 Business Locations operated by
their Business Partners and them. As on March 2015, Motilal Oswal Securities Ltd
had 740,000 registered customers.
Research is the solid foundation on which Motilal Oswal Securities advice is based.
Almost 10% of revenue is invested on equity research and they hire and train the best resources
to become their advisors. At present they have 30 research analysts researching over 250
companies across 20 sectors. From a fundamental, technical and derivatives research
perspective, Motilal Oswal`s research reports have received wide coverage in the media.

To be a well-respected & preferred global financial services organization enabling

wealth creation for all our customers.

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Integrity A company honoring commitment with highest ethical and
business practices

Team Work Attaining goals collectively and collaboratively

Meritocracy Performance gets differentiated, recognized and rewarded in

an apolitical environment

Passion & Attitude High energy and self-motivated with a Do It attitude and
entrepreneurial spirit.

Excellence in Execution Time bound results within the framework of the companys
value system

13-Dec-2014 Motilal Oswal won best IT & FMCG sector in zee business Indias best
market analyst awards 2014

13-Dec-2014 MOCBPL won the best COMMODITY FOREX RESEARCH award at

Indias Best Market Analyst Award 2014

26-Sep-2014 Motilal Oswal Securities Ltd. wins the Best Research as Research
Showcase Partner at RESEARCHBYTES IC AWARDS 2014. The winners
were selected from a poll of over 1500 Fund Managers/Analysts.

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Industry leader
4-time winner of Best Performing Equity Broker (National) by CNBC TV18 Financial Advisor
Awards
29 years of wealth creation driven by the philosophy of Solid Research, Solid Advice
7,50,000 customers with Rs. 26,681 Cr. plus depository assets
PAN India coverage across 2,200+ locations in over 500 cities
Solid Research
Indias Best Market Analyst Award for IT & FMCG sector by Zee Business
30,000+ research reports across 244+ companies and 21+ sectors
Dedicated large cap, mid cap & technical research teams
Daily, weekly, monthly, quarterly & yearly reports across asset class
Solid Advice
Advice across Equity, Derivatives, Commodity, Currency and Mutual Funds
Available across all devices Mobile, Tablet, Desktop and Web
Advanced tools & strategies for various time horizons ranging from hours, days, weeks months
and years
Solid Technology
Powerful, fast & secure technology across all platforms Mobile, Tablet, Desktop and Web
Trade, Invest, Track, Review through a single login
LIVE streaming quotes and technical charts to help you make the right decision
Products & Services
One-stop financial superstore to get access to a range of products & services
Option to trade across exchanges - BSE, NSE, NCDEX, MCX, MSEI
All products backed by our customized solid research & advice
Robust trading platforms, highly skilled dedicated advisors and Call & Trade desk
Operational Efficiency
Indias first broker to offer 15 min, 100% paperless trading and demat account
Instant day account activation on receipt of application
Dedicated customer service team with a 6-hour query resolution TAT

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 Services provided by Motilal Oswal Financial Securities Ltd. are as follow
Broking & Distribution
Asset Management
Private wealth Management
Private Equity
Home Finance
Institutional Equities
Investment banking

The Broking and Distribution business of Motilal Oswal Securities Ltd (MOSL)
supports retail customers all over the country to take informed investment decisions with the
strong research based advisory service that they provide. Their services include products such
as Equities, Commodities, Derivatives, Portfolio Management Services, Depository Services
and distribution of Mutual Funds, Insurance products and Primary Equity Offerings.
With Solid Advice that comes from Solid Research as their guiding philosophy, their clients
are advised by the centralized dealing and advisory desk based in Mumbai. Use of technology
and the benefit of synergized operations all under one roof have helped them deliver enhanced
value to their clients

At Motilal Oswal Asset Management Company (MOAMC), their attempt has been to
offer concentrated equity funds and PMS strategies based on their strength (i.e. Equity). They
have inherited the equity expertise from their sponsor, MOSL which has 28+ years of
experience in the very same field. Their equity offerings have been driven by their investment
philosophy, Buy Right: Sit Tight. Buy Right means buying good quality companies at a
reasonable price and Sit Tight means staying invested in them for a longer period of time to

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grasp the full growth potential of the stocks. This viewpoint has helped them become a
company that has an Equity AUM of over 10,478 crores across Mutual Fund and Portfolio
Management Services as on March, 2016.

At Motilal Oswal Private Wealth Management, they help coordinate 3 critical forces
Individuality of Needs, the Financial Situation and a wide variety of Advisory Solutions to
select from. They achieve accord by skillfully developing the balance between the above
mentioned forces, through timely advice that help them grow, preserve and transmit wealth for
the future generations. Thus, in each key area of Private Wealth Management, Growth,
Preservation and Transmission, they help to weave together a unified and holistic plan designed
around your particular needs & objectives in an ethical manner. They manage the wealth needs
of 1,931 HNI families through a 130 plus member team across 8 cities with over 6,400 cr of
assets under advisory.

Motilal Oswal Private Equity (MOPE) is an asset management platform for

entrepreneurs by entrepreneurs. The company currently advises and manages funds for
investing in the Growth Capital and Real Estate space.

Aspire Home Finance Corporation Limited (AHFCL) is a subsidiary of Motilal Oswal

Securities Limited (MOSL). AHFCL works on the business philosophy of financial inclusion
of Low-Moderate income (LMI) families by providing them an entrance to long term housing
finance. It operates on the income segment which is underserved by financial institutions. It
focuses exclusively on retail housing loans.
Its Vision is to enable home ownership to the lower and middle income Indian families by
providing hassle free housing loan assistance for acquiring affordable housing units thus
improving housing stock in India.

Motilal Oswal Securities Ltd (MOSL) offers Institutional Broking services in the Cash
and Derivatives segments. Their clients include Domestic Institutional Investors (financial

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 institutions, mutual funds, banks, insurance companies) and Foreign Institutional Investors
(FIIs). They also have a Corporate Broking desk that caters the specialized broking needs of
ultra-high net worth clients.
Strong Corporate Access, highly-rated Research and efficient Sales & Trading support are the
keystones of their Institutional Broking services.

Motilal Oswal Financial Services Ltd. aim to deliver a focused transaction closure
orientation which is assisted by knowledge across products and well deep-rooted relationships
with the investor community, corporate sector and market intermediaries.
They work in partnership with their clients and commit their resources end to end throughout
the transaction. This ensures timely execution with minimum trouble. Since its inception in
2006, the unit has executed milestone transactions related to capital raising and financial
advisory. As a result, they have established a solid track record in the investment banking space.
Motilal Oswal Securities Ltd. is a part of Motilal Oswal Financial Services Ltd. It is
headquartered at Prabhadevi, Mumbai. The following report is comparative study of financial
products of Motilal Oswal Financial Services Ltd. and how the company is trying penetrating
the wealth management market.

The penetration of wealth management market is done in two steps:

1. Profiling the wealth channel partner
2. Getting Eligible partners empanelled with Motilal Oswal Financial Services Ltd. to recommend
the product their clients.

Motilal Oswal Financial Services Ltd. (MOFSL) is a very big brand in the financial
world. Hence they recruit students from reputed B-schools to work in the company as Interns.
Interns are divided into 2 sections

I. IFA Section (Directly under MOFSL)

II. Franchisee Section (Under the different franchises of MOFSL)

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 This year 90 students were hired as interns from different reputed B-Schools across the
country and were divided into 2 primary groups and later on into secondary groups according
to their respective regions.
As it is a very reputed and big organization, they had final placements placement
offering for suitable students. Therefore, they had a keen eye on all the interns so they could
select the best performers. To maintain a competitive environment during the internship
program they had various contests such as Pehla Kadam and Coffee with CEO.

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 At Motilal Oswal I had to make Channel Partners who would have a good AUM
(Asset Under Management) and help Motilal Oswal sell their products to its existing client
base majorly focusing on HNI (High Net Worth Individuals).
We were given data from AMFI (The Association of Mutual Funds in India) or JustDial
and we had to set-up a meeting with people who would be interested and get them empaneled
with Motilal Oswal.
A person who would be either a Mutual Fund distributor, CA, CFP, LIC agent etc. was
eligible for becoming a partner with Motilal Oswal.
A person who is an LIC agent sells only Insurance but getting empaneled with Motilal
Oswal would help him/her expand its product basket i.e. He/ She could sell other products too
which Motilal Oswal offers such as PMS, Private Equity, Mutual Funds, Insurance, Fixed
Deposit, Bonds/IPO, Commodity, Equity etc.
This would be win-win for both channel partner as well as Motilal Oswal with Channel
partner earning commission and Motilal Oswal expanding its client base. As well as partner
could be able to handle 100% of his clients asset to earn maximum profit from their
investments.

Two distribution models exist in Motilal Oswal:

1. IFA
2. Franchisee
IFA (Independent Financial advisors) would involve people who is either/and Mutual
Fund distributor, CA, CFP, LIC agent etc. and has a good AUM
Franchisee model had the requirements that 3 Lacs need to be deposited with Motilal
Oswal along with the person having an office and adequate staff.
The Channel partners should have a minimum AUM of Rs 1 crore.
The next part involved activating these partners for bringing in investments in Motilal
Oswal products. We were assigned the task of focusing mainly on PMS (Portfolio Management
Services), Private Equity, Mutual Fund and Broking service.

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 Our major objective was to learn about the equity market and various investment
product through this IFA channel.
Following are the various investment product that I have learned

Portfolio management services (PMS) have evolved to become one of the top
investment vehicles in Indian capital markets in the last 13 years. Several domestic and foreign
players are present in this space which continues to grow rapidly. As per Securities Exchange
Board of India (SEBI), the assets under management of discretionary portfolio management
service have doubled in the last one year to Rs 40,000 crore, and continues to grow at a fast
clip.
So why is the product is gaining popularity?
Let's first understand what PMS is all about. PMS is a tailor-made professional service
offered to cater to the investments objective of different investor classes. The investment
solutions provided by PMS cater to a niche segment of clients. The clients can be individuals
or institutional entities with high net worth. Simply put, a portfolio management service
provides professional management of client's investments to create wealth. The service
providers offer various thematic strategies themes ranging from large cap, small & mid cap,
flexi cap, focused products etc. to suit the specific needs of the investors.
Once the investor has chosen the investment strategy based on his risk-return profile,
strategy features and other details, PMS investor and the portfolio manager enter into an
agreement. The agreement list down the roles and responsibilities of the portfolio manager and
is legally binding for both the parties.
The portfolio manager than creates the portfolio of stocks (or fixed income
instruments/debentures) for the investor. The minimum investment amount is Rs 25 lakh which
can be paid in either cheque/bank transfer or stocks worth this much. The portfolio of stocks
bought for the investor are then housed in a demat account opened in the investor's name only,
and can be transferred back to him in case he decides to close his PMS account. This is one of
the main differentiating features between a PMS and mutual fund where an investor exiting
will see his MF units being liquidated and he would only receive the monetary value of those
liquidation proceeds. Also, PMS as a platform can be used to implement more flexible,
concentrated and customized strategies, unlike MFs where there are clear guidelines from the

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regulator. While there is a limit on exposure to individual stocks in a mutual fund, a PMS
portfolio can make a far more aggressive allocation to any particular stock if he so decides. For
example, it is possible to construct a portfolio of 5-10 stocks on a PMS platform, but not under
MF platform.
Most PMS service providers use technology to provide a very transparent view of the
existing client portfolio by providing a web page with login details for every client. This way
the client can access and review his portfolio on 24x7 basis. Equity enthusiasts appreciate the
fact that they have access to full portfolio at all times and can question the portfolio manager
on stock rationale and investment process.
An investor normally gets a choice to decide how he will like to pay his portfolio
manager. He can decide to either pay a fixed management fee or have a performance linked fee
structure where he pays as a percentage of the returns generated in the portfolio. Since, all
stocks are held in the name of the client, tax treatment is similar to an individual equity
portfolio.
A good portfolio manager will identify good long-term wealth creating investment
ideas for the investor. Also, a professional portfolio manager will be able to take dispassionate
calls about each stock in the portfolio and enter and exit stocks at the right time, which most
investors find difficult to do on their own.
Thus PMS provides a hassle-free, transparent and customized platform for investor
participation in equity markets. For those investors who are actively tracking the markets and
like to understand how their money is being managed, PMS offers a great platform.

The financial industry today offers a gamut of investment options to the common man.
There is so much information available on various products and services that, very often it
leaves the common man confused as to the choice of investments. Most often an investor finds
himself inadequate to perform the task of managing his own investments due to lack of
knowledge, time, education, foresight and resources. This scenario gives rise to the services of
an entity that provides professional portfolio management services.

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 An investor uses the help of professional investment counsel to advise him on his
investment policy. He discusses his objectives and the counsel chalks out an investment
solution to obtain those objectives. Portfolio Management is the process of designing an
investment plan to meet the specified objectives of the clients and balance risk against returns.

Each portfolio scheme is different from the other and consists of an ideal portfolio. These
schemes are designed on the following parameters:
Age of the client
Risk bearing capacity of the client
Amount of investment
Purpose of investment viz. marriage, education, property, retirement, etc.
An investor may belong to a particular scheme offered by the portfolio manager, but the
investment will be completely different from an investor belonging to the same scheme. This
is because of the timing of investment, the amount of investment in every stock and the
withdrawals for requirements.

How do MOTILAL OSWAL Buy Right:

QUALITY: Quality of business and management
GROWTH: Growth in earnings and sustained ROE (Return on Equity)
LONGEVITY: Longevity of the competitive advantage/economic moat of the
business.
PRICE: Buying a good Business for a fair Price rather than buying a fair Business for
a good price.

Q:
"Great companies to invest are like wonderful castles, surrounded by deep, dangerous
moats where the leader inside is an honest and decent person. Preferably, the castle gets its
strength from the genius inside; the moat is permanent and acts as a powerful deterrent to those
considering an attack; and inside, the leader makes gold but doesn't keep it all for himself.

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There are two aspects to Q: (1) Quality of business and (2) Quality of management.
The relationship between the two is multiplicative and not additive. Thus, if one of the
aspects is zero, Q will be equal to zero, no matter how high the other.
Quality is a subjective concept, and yet there are several objective indicators of the same, as
listed below

G:
"Growth creates value only when it takes place within the limits of a strong and
sustainable company franchise, and these are rare.

In investing, there are two dimensions of growth: (1) Earnings growth and (2) Valuation
growth. The G of QGLP addresses earnings growth, whereas the P(rice) takes care of the
Valuation growth.
Earnings growth by itself doesn't mean much. It adds value only when the company
earns returns on capital higher than the cost of capital. Hence, growth is simply an amplifier:
good when returns exceed the cost of capital, bad when returns are below the cost of capital,
and neutral when returns equal the cost of capital.

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 In the final analysis, G (i.e. earnings growth in a company) is a quantitative reflection
of Q (i.e. quality of business and management). G has four dimensions:

Volume growth - a function of demand growth matched by company's capacity to supply

Price growth - a function of company's pricing power, which in turn is a function of the
competitive landscape
Operating leverage - a function of the company's operating cost structure. Higher the fixed cost,
lower the unit cost incidence and higher the operating leverage
Financial Leverage - a function of capital structure. Higher the debt-equity, higher the financial
leverage and vice versa

L:
"We like great companies with dominant positions, whose franchise is hard to duplicate
and has tremendous staying power or some permanence to it.

Having established the present quality and earnings growth of the company, the next
challenge to investors is assessing how long it can sustain both. In the context of longevity,
competence of management is tested at two levels:
(1) Extending CAP (i.e. Competitive Advantage Period), and
(2) Delaying growth slowdown.

Extending CAP: Competitive Advantage Period (CAP) is the time during which a
company generates returns on investment that exceed its cost of capital. Competition eventually
drives down returns to cost of capital, and sometimes even below it. However, a company with
a great business and great management keeps extending its CAP, sustaining high return both
for itself and its equity investors.

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Delaying growth slowdown: Competent managements can delay growth slowdown by
(1) New streams of organic growth, and/or
(2) Inorganic growth via judicious acquisitions.

P:
"In the Bible, it says that love covers a multitude of sins. Well, in the investing field,
price covers a multitude of mistakes. For human beings, there is no substitute for love. For
investing there is no substitute for paying the right price absolutely none.

Growth in stock price is a multiplicative function of growth in earnings and growth in

valuation. The simplest way to improve the odds of valuation growth is by ensuring favorable
purchase price.
The price of a stock has to be seen in conjunction with the value it offers. Price is what we pay;
value is what we get. Therefore, stock prices are attractive only when they are less than the
value perceived in the stock.
A simple rule of thumb of favorable purchase price is low P/E, preferably single-digit.
However, in certain situations, low P/E may not be the sole determinant of favorable price e.g.
during bottom-of-the-cycle, earnings of cyclical stocks are depressed leading to high P/E;
likewise, where companies are expected to turn from loss to profit, current P/E cannot be
calculated.

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How do MOTILAL OSWAL Sit Tight:

Buy and Hold: We are strictly buy and hold investors and believe that picking the right
business needs skill and holding onto these business to enable our investors to benefit from
the entire growth cycle, needs even more skill.
Focus: Our portfolios are high conviction portfolios with 15 to 25 stocks being our ideal
number. We believe in adequate diversification but over-diversification results in diluting
returns for our investors and adding market risk.
On the above mentioned Investment Philosophy MOSL have Three Offerings on the Portfolio
Management Services namely Value Strategy, Next Trillion Dollar Opportunities
Portfolio and India Opportunities Strategy

Below mention are few critical points which will help you to understand the offering better.
Indias leading PMS Service Providers, with Assets under Management of over Rs. 9,519 Cr.
(approx.)
Buy & Hold philosophy with focus on better post tax returns for the client.
Stock selection based on Quality of Management / Cash Reserves / Return on Equity /
Valuations at which the stock is available.
Value is the one of the PMS in the country with 10 years + track record launched in March
2003.

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 MOSL Flagship Value Strategy has consistently outperformed the benchmark across
market cycles over a 13-year period.
Motilal Oswal PMS has one of the largest active accounts (more than 20,624) on PMS
platform.
MOAMC - PMS has active clients in 148 different cities right from Adilabad to Zirakpur;
a testimony of strong acceptance of our PMS across the length & breadth of the country.
Professional Investment / Raamdeo Agarwal is the Chairman of the Investment
Committee.
Focused Portfolio Investments for client.
Clients will get 24*7 access to his portfolio on the web. (Transparency).
Client will get CA Certified Tax statement end of every financial year.

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 The Strategy aims to benefit from the long term compounding effect on investments done
in good businesses, run by great business managers for superior wealth creation.
Value based stock selection
Investment Approach: Buy & Hold
Investments with Long term perspective
Maximize post tax return due to Low Churn
In last 3 years, Value Strategy has delivered a CAGR returns of 21.03% vs. Nifty returns
of 12.25%, i.e. delivered an annualized alpha of 8.78%
Since Inception Value Strategy has delivered a CAGR returns of 24.86% vs. Nifty returns
of 16.86%, i.e. since Inception Value has delivered an annualized alpha of 8.00%
In absolute terms Rs.1 cr. invested in Value PMS in March 2003 is worth Rs. 22.11 cr. as
on 28th February, 2017. For the same period Rs.1 cr. invested in Nifty is now worth Rs.
8.78 cr.
Average One Year Rolling Return of portfolio is 25.00%.

27
 The Strategy aims to benefit from the long term compounding effect on investments done
in good businesses, run by great business managers for superior wealth creation.
Value based stock selection
Investment Approach: Buy & Hold
Investments with Long term perspective
Maximize post tax return due to Low Churn
In last 3 years, IOP Strategy has delivered a CAGR returns of 31.49% vs. Nifty returns of
28.26%, i.e. delivered an annualized alpha of 3.23%
Since Inception IOP Strategy has delivered a CAGR returns of 17.04% vs. Nifty returns
of 12.37%, i.e. since Inception Value has delivered an annualized alpha of 4.67%
In absolute terms Rs.1 cr. invested in IOP Strategy in February,2010 is worth Rs. 3.03 cr.
as on 28th February, 2017. For the same period Rs.1 cr. invested in Nifty Free Float Midcap
100 is now worth Rs. 2.27 cr.
Average One Year Rolling Return of portfolio is 14.00%

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There are two types of PMS services available to the investors:

The portfolio manager uses his discretion and chooses investments to meet the specified
objectives without any interference of the client. However, at the beginning of the contract the
investor can specify his preferences of stocks and the portfolio manager has to choose
investments bearing in mind the specified stocks.

The portfolio manager informs the clients of the investment opportunities and its, at the sole
discretion of the client to choose the timing of his investment.

Making money off the market requires certain degree of expertise and a healthy appetite
for risk. While most people start off early and eventually go on to learn how the market behaves
and thereby invest their monies, there are investors who enter the scenario with large amounts
of monies and seek help from professionals for the purpose of earning above-average returns
from their savings. Towards this end, some opt for portfolio management services (PMS)
offered by various entities registered with the SEBI.
Portfolio management services have equity and debt options. As far as mutual funds
are concerned, they are more tax-friendly. Now let 's see how the two competitors, portfolio
management services and equity mutual funds, differ from each other, and how they fare
against each other.
Customized investment: Its commonly believed that portfolio management services offer
customized services, with many brokerages offering you the choice of different model
portfolios such as large-cap and mid-cap depending on your needs. However, this is not a
scalable model and large portfolio managers won 't do it for just 25 lakhs. They usually do it
for investors who fall under HNI category. However, you can get certain specific customization
done with 25 lakhs as well. Mutual funds offer no such options.

29
Transparency: Portfolio management services offer complete transparency in money
management. You will be aware of every purchase and sale of shares, brokerage, date of
transaction, portfolio manager 's exact fee amongst others. This level of transparency also lets
you know where your portfolio manager made you money and where he lost it. In mutual funds,
you get a monthly report of final holdings and the quarterly total expense ratio. Having said
this, it is very difficult to gauge the performance of a portfolio management service product
before investing in it. There is nothing called a scheme performance since it comprises of
individual portfolios created as per individual needs.

Flexibility: Unlike mutual funds, a portfolio management service is not restricted to a stated
objective and stringent set of terms. This offers flexibility to the portfolio manager in terms of
how and when he wants to invest/pull back your money. If he senses risk, he can take
aggressive cash calls. If the situation demands, he can even sell off all the equity holdings and
maintain 100 % cash position. This is great for protection against market crashes like the one
in 2008. However, its rare that portfolio managers take such bold cash calls.

Separate status: In portfolio management services, your portfolio is treated as a separate

entity. This prevents others ' action affecting your portfolio. Let 's say, if a lot of investors are
redeeming simultaneously, then the fund manager of a mutual fund may have to create liquidity
by selling off the most liquid stocks. This changes the fund 's portfolio and can have adverse
effects on the portfolio of the people who stay invested. Whereas in portfolio management
services, the portfolio manager will sell the entire portfolios of specific clients only, and not
affect your portfolio if you wish to stay invested.

Fee structure: Mutual funds have a fixed fee structure. Portfolio management service
providers will offer you more than one option with the same fee structure.

Size vs cost: Mutual funds even accept SIPs of INR 500, while portfolio management services
has a mandatory of minimum 25 lakhs.

Taxation: Mutual funds offer schemes and have a pass through status, which means a fund
manager may buy and sell stocks any number of times without incurring tax. Whereas in the
case of portfolio management services, its you holding stocks in your name, so every time the
portfolio manager sells a share, there is capital gain or loss.

30
Accountability: Portfolio management service managers are directly answerable to you,
whereas mutual fund managers have no such obligations.

So this is how mutual funds and portfolio management services differ from each other, spend
good amounts of time in understanding the market, seek professional help in this regard, and
take a call. Whatever be your choice, remember that you will not only have to invest monies,
but also time if you really want to reap monetary benefits from market movements.

31
 Mutual funds are institutions that collect money from several sources - individuals or
institutions by issuing 'units', invest them on their behalf with predetermined investment
objectives and manage the same all for a fee. They invest the money across a range of financial
instruments falling into two broad categories equity and debt. Individual people and
institutions no doubt, can and do invest in equity and debt instruments by themselves but this
requires time and skill on both of which there are constraints. Mutual funds emerged as
professional financial intermediaries bridging the time and skill constraint. They have a team
of skilled people who identify the right stocks and debt instruments and construct a portfolio
that promises to deliver the best possible 'constrained' returns at the minimum possible cost. In
effect, it involves outsourcing the management of money. More explicitly, the benefits of
investing in equities and debt instruments are supposedly much better if done through mutual
funds. This is because of the following reasons: Firstly, fund managers are more skilled. They
are trained to identify the best investment options and to assess the portfolio on a continual
basis; secondly, they are able to invest in a diversified portfolio consisting of 15-20 different
stocks or bonds or a combination of them. For an individual such diversification reduces the
risk but can demand a lot of effort and cost. Each purchase or sale invites a cost in terms of
brokerage or transactional charges such as demat account fees in India. The need to possibly
sell 'poor' stocks/bonds and buy 'good' stocks/bonds demands constant tracking of news and
performance of each company they have invested in. Mutual funds are able to maintain and
track a diversified portfolio on a constant basis with lesser costs. This is because of the
pecuniary economies that they enjoy when it comes to trading and other transaction costs;
thirdly, funds also provide good liquidity. An investor can sell her/his mutual fund investments
and receive payment on the same day with minimal transaction costs as compared to dealing
with individual securities, this totals to superior portfolio returns with minimal cost and better
liquidity.

32
 In India one can gain additional benefit by investing through mutual funds tax savings.
Investment in certain types of funds such as Equity Linked Tax Savings Schemes (ELSS)
allows for certain amount of income tax benefits.
My role at Motilal Oswal required me to make Channel Partners who would have a
good AUM (Asset Under Management) and help Motilal Oswal sell their products to its
existing client base majorly focusing on HNIs (High Net Worth Individuals).
We were given data from AMFI (The Association of Mutual Funds in India) or JustDial
and we had to set-up a meeting with people who would be interested and get them empaneled
with Motilal Oswal.

A person who would be either a Mutual Fund distributor, CA, CFP, LIC agent etc. was
eligible for becoming a partner with Motilal Oswal.
A person who is an LIC agent sells only Insurance but getting empaneled with Motilal
Oswal would help him/her expand its product basket i.e. He / She could sell other products too
which Motilal Oswal offers such as PMS, Private Equity, Mutual Funds, Insurance, Fixed
Deposit, Bonds/IPO, Commodity, Equity etc.
This would be win-win for both channel partner as well as Motilal Oswal with Channel
partner earning commission and Motilal Oswal expanding its client base.

33
 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 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 delinked 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 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

34
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.

lf mutual funds are emerging as the favorite investment vehicle, it is because of the
many advantages they have over other forms and the avenues of investing, particularly for
the investor who has limited resources available in terms of capital and the ability to carry
out detailed research and market monitoring. The following are the major advantages offered
by mutual funds to all investors:

1. Portfolio Diversification:
Each investor in the fund is a part owner of all the fund's assets, thus enabling him to
hold a diversified investment portfolio even with a small amount of investment that would
otherwise require big capital.

2. Professional Management
Even if an investor has a big amount of capital available to him, he benefits from the
professional management skills brought in by the fund in the management of the investor's
portfolio. The investment management skills, along with the needed research into
available investment options, ensure a much better return than what an investor can manage
on his own. Few investors have the skill and resources of their own to succeed in todays fast
moving, global and sophisticated markets.

35
3. Reduction/Diversification of Risk:
When an investor invests directly, all the risk of potential loss is his own, whether
he places a deposit with a company or a bank, or he buys share or debenture on his own or in
any other from. While investing in the pool of funds with investors, the potential losses
are also shared with other investors. The risk reduction is one of the most important
benefits of a collective investment vehicle like the mutual fund.

4. Reduction of Transaction Costs:

What is true of risk as also true of the transaction costs? The investor bears all the costs
or investing such as brokerage or custody of securities. When going through a fund, he has
the benefit of economics of scale; the funds pay lesser costs because of larger volumes, a
benefit passed on to its investors.

5. Liquidity
Often, investors hold shares or bonds they cannot directly, easily and quickly sell. When
they invest in the units or a fund, they can generally cash their investments any time,
by selling their units to the fund if open-ended, or selling them in the market if the fund
is close-end. Liquidity of investment is clearly a big benefit.

6. Convenience and Flexibility:

Mutual fund management companies offer many investor services that a direct market
investor cannot get. Investors can easily transfer their holding from one scheme to the other;
get updated market information and so on.

7. Tax Benefits:
Any income distributed after March 31, 2002 will be subject to tax in the assessment of
all Unit holders. However, as a measure of concession to Unit holders of open-ended equity-
oriented funds, income distributions for the year ending March 31. 2003 will be taxed at
a concessional rate of 10.5%.
In case of Individuals and Hindu Undivided Families (HUF) a deduction up to Rs.
9,000 from the Total Income will be admissible in respect of income from investments
specified in Section 80L, including income from Units of the Mutual Fund. Units of the
schemes are not subject to Wealth-Tax and Gift-Tax.

36
1. No Control over Costs:
An investor in a mutual fund has no control of the overall costs of investing. The
investor pays investment management fees as long as he remains with the fund, albeit in return
for the professional management and research. Fees are payable even if the value of his
investments is declining. A mutual fund investor also pays fund distribution costs, which he
would not incur in direct investing. However, this shortcoming only means that there is a cost
to obtain the mutual fund services.

2. No Tailor-Made Portfolio:
Investors who invest on their own can build their own portfolios of shares and bonds
and other securities, Investing through fund means he delegates this decision to the fund
managers, The very-high-net-worth individuals or large corporate investors may find this to
be a constraint in achieving their objectives. However, most mutual fund managers help
investors overcome this constraint by offering families of funds - a large number of different
schemes - within their own management company. An investor can choose from different
investment plans and constructs a portfolio to his choices.

3. Managing a Portfolio of Funds:

Availability of a large number of funds can actually mean too much choice for
the investor. He may again need advice on how to select a fund to achieve his objectives,
quite similar to the situation when he has individual shares or bonds to select.

4. The Wisdom of Professional Management:

Thats right, this is not an advantage. The average mutual fund manager is no better
at picking stocks than the average non-professional, but charges fees.

5. No Control:
Unlike picking your own individual stocks, a mutual fund puts you in the passenger
seat of somebody elses car.

37
6. Holding stock
Mutual funds generally have such small holdings of so many different stocks
that insanely great performance by a fund's top holdings still doesn't make much of a
difference in a mutual fund's total performance.

7. Buried Cost
Many mutual funds specialize in burying their costs and in hiring salesmen who do not
make those costs clear to their clients.

Wide variety of Mutual Fund Schemes exists to cater to the needs such as
financial position, risk tolerance and return expectations etc. thus mutual funds has
Variety of flavors, being a collection of many stocks, an investor can go for picking a
mutual fund might be easy. There are over hundreds of mutual funds scheme to choose
from. It is easier to think of mutual funds in categories, mentioned below:

BY NATURE BY INVESTMENT
BY STRUCTURE OTHER SCHEMES
OBJECTIVE

Open-Ended Growth Tax-Saving

Equity Funds
Schemes Schemes Schemes

Close-Ended Income Index

Debt Funds
Schemes Schemes Schemes

Sector
Interval Balanced Balanced
Specific
Schemes Funds Schemes
Schemes

Money Market
Schemes
38
1. Open - Ended Schemes:
An open-end fund is one that is available for subscription all through the year. These
do not have a fixed maturity. Investors an conveniently buy and sell units at Net Asset
Value (NAV) related prices. The key feature of open-end schemes is liquidity.

2. Close - Ended Schemes:

A closed-end fund has a stipulated maturity period which generally ranging from 3
to 15 years. The fund is open for subscription only during a specified period. Investors
can invest in the scheme at the time of the initial public issue and thereafter they
can buy or sell the units of the schemes on the stock exchanges: where they are listed.
In order to provide an exit route t0 the investors, some close-ended funds give an option
of selling back the units to the Mutual Fund through periodic repurchase at NAV related
prices. SEBI Regulations stipulate that at least One of the two exit routes is provided t0 the
investor.

3. Interval Schemes:
Interval Schemes are that scheme, which combines the features of open-ended and
close- ended schemes. The units may be traded on the stock exchange or may be open for
sale or redemption during pre-determined intervals at NA V related prices.

1. Equity Fund:
These funds invest the maximum part of their corpus into equities holdings. The
structure of the fund may vary different for different schemes and the fund managers outlook
on different stocks. The Equity Funds are sub-classified depending upon their investment
objective, as follows:
Diversified Equity Funds
Mid-Cap Funds

39
 Sector Specific Funds
Tax Savings Funds (ELSS)
Equity investments are meant for a longer time horizon; thus Equity funds rank high
on the risk-return matrix.

2. Debt Funds
The objective of these Funds is to invest in debt papers, Government authorities,
private companies, banks and financial institutions are some of the major issuers of debt
papers. By investing in debt instruments, these funds ensure low risk and provide stable
income to the investors. Debt funds are further classified as:
Gilt Funds: Invest their corpus in securities issued by Government, popularly known
as Government of India debt papers. These Funds carry zero Default risk but are associated
with Interest Rate risk. These schemes are safer as they invest in papers backed by
Government.
Income Funds: Invest a major portion into various debt instruments such as bonds,
corporate debentures and Government securities.
MIPs: Invests maximum of their total corpus in debt instruments while they
take minimum exposure in equities. It gets benefit of both equity and debt market. These
scheme ranks slightly high on the risk-return matrix when compared with other debt
schemes.
Short Term Plans (STPs): Meant for investment horizon for three to six months. These
funds primarily invest in short term papers like Certificate of Deposits (CDs) and Commercial
Papers (CPs). Some portion of the corpus is also invested in corporate debentures.
Liquid Funds: Also known as Money Market Schemes, these funds provides easy
liquidity and preservation of capital, These schemes invest in short-term instruments like
Treasury Bills, inter-bank call money market, CPs and CDs. These funds are meant for short-
term cash management of corporate houses and are meant for an investment horizon of
1 day to 3 months. These schemes rank low on risk-return matrix and are considered to
be the safest amongst all categories of mutual funds.

40
3. Balanced Funds
As the name suggest they are a mix of both equity and debt funds. They invest in both
equities and fixed income securities, which are in line with pre-defined investment objective
of the scheme. These schemes aim to provide investors with the best of both the worlds.
Equity part provides growth and the debt part provides stability in returns.
Further the mutual funds can be broadly classified on the basis of investment parameter via;
each category of funds is backed by an investment philosophy, which is pre-defined in the
objectives of the fund. The investor can align his own investment needs with the funds
objective and invest accordingly.

1. Growth Schemes:
Growth Schemes are also known as equity schemes. The aim of these schemes is to
provide capital appreciation over medium to long term. These schemes normally invest a
major part of their fund in equities and are willing to bear short-term decline in value for
possible future appreciation.

2. Income Schemes:
Income Schemes are also known as debt schemes. The aim of these schemes is to
provide regular and steady income to investors. These schemes generally invest in fixed
income securities such as bonds and corporate debentures. Capital appreciation in such
schemes may be limited.

3. Balanced Schemes:
Balanced Schemes aim to provide both growth and income by periodically
distributing a part of the income and capital gains they can. These schemes invest in both
shares and fixed income securities, in the proportion indicated in their offer documents
(normally 50:50).

4. Money Market Schemes:

Money Market Schemes aim to provide easy liquidity, preservation of capital and
moderate income. These schemes generally invest in safer, short-term instruments, such as
treasury bills, certificates of deposit, commercial paper and inter-bank call money.

41
1. Tax Saving Schemes:
Tax-saving schemes offer tax rebates to the investors under tax laws prescribed from
time to time. Under Sec.88 of the Income Tax Act, contributions made to any Equity Linked
Savings Scheme (ELSS) are eligible for rebate.

2. Index Schemes:
Index schemes attempt to replicate the performance of a particular index such as the
BSE Sense or the NSE 50. The portfolio of these schemes will consist of only those stocks
that constitute the index. The percentage of each stock to the total holding will be identical to
the stocks index weight age. And hence, the returns from such schemes would be more or
less equivalent to those of the Index.

3. Sector Specific Schemes:

These are the funds/schemes which invest in the securities of only those sectors or
industries as specified in the offer documents, e.g., Pharmaceuticals, Software, Fast Moving
Consumer Goods (FMCG), Petroleum stocks, etc. The returns in these funds are dependent
on the performance of the respective sectors/industries. While these funds may give higher
returns, they are riskier compared to diversified funds. Investors need to keep a watch on the
performance of those sectors/industries and must exit at an appropriate time.

There are many entities involved and the diagram below illustrates the organizational
set up of a mutual fund
The important terms of the figure are explained as follows:
Fund Sponsor:
A sponsor is any person who, acting alone or in combination with another body
corporate, establishes a MF. The sponsor of a fund is similar to the promoter of a company. In
accordance with SEBI Regulations, the sponsor forms a trust and appoints a Board of Trustees,
and also generally appoints an AMC as fund manager. In addition, the sponsor also appoints a

42
custodian to hold the fund assets. The sponsor must contribute at least 40% of the net worth of
the AMC and possess a sound financial track record over five years prior to registration.
Trustees:
The MF or trust can either be managed by the Board of Trustees, which is a body of
individuals, or by a Trust Company, which is a corporate body. Most of the funds in India are
managed by Board of Trustees. The trustee being the primary guardian of the unit holders
funds and assets has to be a person of high repute and integrity. The trustees, however, do not
directly manage the portfolio Securities. The portfolio is managed by the AMC as per the
defined objectives, accordance with Trust Deed and SEBI (Mutual Funds) Regulations.
Asset Management Company (AMC):
The AMC, which is appointed by the sponsor or the trustees and approved by SEBI,
acts like the investment manager of the trust. The AMC functions under the supervision of its
own Board of Directors, and also under the direction of the trustees and SEBI. AMC, in the
name of the trust, floats and manages the different investment schemes as per the SEBI
Regulations and as per the Investment Management Agreement signed with the Trustees.

43
An investment is an asset or purchase of goods which will be useful in future for creating
wealth. In an economic sense, an investment is the purchase of goods that are not consumed
today but are used in the future to create a wealth.
In finance, an investment is a monetary purchased of an asset which will provide a good income
& better life in future.

Investing a money means putting a money which will work for you or which will help you to
create a wealth in future. Essentially it is a different way to think how to make money. While
growing up, most of us taught that you can generate an income only by getting a job & working.
If you want more money you have to work more.
Instead of that, you need to send an extension of yourself or your money to work. By wasting
your time in sleeping, reading a newspaper or socializing with your friends you can also be
earning money elsewhere. It is quite simple that you have to make money which will work for
you, which will maximize your earning potential whether or not you receive a raise, decide to
work overtime or look for a higher-paying job.
There are many other different ways where you can go to invest your money. This includes
putting your money in market stocks, bonds, fixed deposits, gold, real estate and mutual fund
etc. or starting your own business. Sometimes people refer to these options as an Investment
Vehicle which is just another way of saying a way to invest. Each of these vehicles has
some positive & negative points.

Everybody wants to generate more income. In todays generation investment is a necessity,

because everybody wants to increase their personal freedom, in the sense of security and ability
to afford the things that they want in a life.
However, investment is becoming more necessary. The days when everyone worked in the
same job for 30years and then retired with a good fat pension are gone. For average people
investing is not so helpful tool as the way they can retire and maintain their present lifestyle.

44
While investing money investors have to consider certain factors where their money are
invested? Safety of capital, current income & capital appreciation these factors are influence
investment decision & will also depend on the age, the position of the person in his life, the
financial position of the person.
A financial position of investors will also effect on his or her objectives of investment. E.g. a
millionaire who is taking an effort to make a profit in his business, he might have any problem
with putting down 100,000 from an investment because for him hundred grands is a small
percentage for him.
On the other hand, a newly married couple who are saving their money for down payment for
a house. They cant afford to lose their money from their speculative investment.

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 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 delinked 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),

45
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)

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.
Nature of Field Work Questionnaires & interviews
Field Experience

46
In field I had to visit Channel Partners place and know what kind of services he provides to his
customers. Then we had to build a relationship with customer by getting him involved in
conversation so that he can trust and feel that whatever I am talking is for his benefits.
In this situation I faced various problems also like partner didnt behave properly or asked me
questions of which answers I didnt know. But as the time passed I learned to tackle all. I
learned how to talk to people and how to handle them to get what I want. I learned various new
things from partners also about importance of investment and knowledge about various
financial products.

47
The study was conducted through survey and involved a different people who invested in
Different financial product. Interviewing them.
The information gives us an overall information and understanding of the investors profile as
Their thinking about different investment companies. I also understand what is investment.

I got the data on mutual fund from internet through mutual fund website. My company mentor
also helped me in collecting data of company. I also met my family friend who have his own
financial firm to collect data.

48
I conducted survey of about 100 random people of and their age group was as given below

Knowledge and experience about Investment Products

Where I found that out of 100 people 40 people had knowledge about the Investment product.

49
Following chart indicates that does investing habit is depending on age or not?

40 36
35
18-24
30
25
25 25-34
20
15
15 12 12 35-50
10 0
5
0
Yes No

Following chart indicates which investment does investor prefers

60.00% Broking product

41.38% Mutual Fund

Hedge funds
40.00%
24.14% Bonds

10.34% 10.34% IPOs

20.00% FDs
10.34%
Derivatives

Portfolio Management
0.00% Services
Other
3.45%

Investment behavior
13.33%
20.00% I am investing for the first
time
13.33%
I have been investing for one
year
I have been investing for
three years
I have been investing for five
years
I have been investing for
more than five years

6.67%
46.67%

50
Amount people generally invest in Mutual Fund

70.00% 64.29%

60.00%

50.00%

40.00%

30.00%

20.00% 14.29%
7.14% 7.14% 7.14%
10.00%
0.00%
0.00%
< 10 lacs 10 - 50 lacs 51 lacs - 1 cr 1 - 5 cr > 5 cr N/A

Amount people generally invest in Broking

57.14%
60.00%

50.00%

40.00%
28.57%
30.00%

20.00% 14.29%

10.00%
0.00% 0.00% 0.00%
0.00%
< 10 lacs 10 - 50 lacs 51 lacs - 1 cr 1 - 5 cr > 5 cr N/A

Amount people generally invest in PMS

100.00%

90.00%

80.00%

70.00%

60.00%

50.00%

40.00%

30.00%

20.00%

10.00%

0.00%
< 10 lacs 10 - 50 lacs 51 lacs - 1 cr 1 - 5 cr > 5 cr N/A Total

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From above investment, Investors generated returns of about 15% average.
And with this returns 46% investors were not completely happy.
But 54% investors were satisfied with the kind of returns they were generating.
And out of total investors 91.67% investors were willing to invest more money in mutual fund
whereas only 60% investors were ready to invest in portfolio management services. And
broking had similar number of investors of about 55% who were willing to invest more.

Following graph shows the investment that investors want to do in various investment
products

% vise

Don't want to invest more

> 5cr

1 to 5 cr

51 lacs to 1 cr

10 - 50 lacs

< 10 lacs

0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00%

Broking PMS MF

In numbers

Don't want to invest more

> 5cr

1 to 5 cr

51 lacs to 1 cr

10 - 50 lacs

< 10 lacs

0 5 10 15 20 25 30 35

Broking PMS MF

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Importance and Satisfaction of returns from Investment products

Which AMC would you suggest for Mutual Fund investment?

No of
AMC name people %

Motilal Oswal 28 57'14%

Reliance 4 8'16%
DSP Black Rock 12 24'48%
Birla Sun Life 3 6'12%
Other 2 4'08%

Mean 1'83
Standard Dev. 1'11
Variance 1'24

Other

Birla Sun Life

DSP Black Rock

Reliance

Motilal Oswal

0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00%

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When asked do you use any Motilal Oswal product
I got response that 27 people were using Motilal Oswal product out of 60.

Product Name No of People using Average Ratings

Mutual Fund 15 4.4
Portfolio Management Services 05 4.5
Broking 07 3.2

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 The people who are investing money they are above the age of 18 and they started
investing money early in their life.
People prefer to invest their money in mutual fund, because they are aware about mutual
fund and their return through word of mouth, friends, TV, advertisements.
While investing money people give first preference to safety, because they want their
money to be safe. Most of the people look for higher returns.
People prefer to invest their money in company like DSP Black Rock Mutual Fund, UTI
Mutual Fund, Motilal Oswal Mutual Fund
People trust on brand. They give stable and good returns in medium and long term plan.
Motilal Oswal It is well known and good company for investment. They have strong
research base. They provide good quality of services and customer support.
People are aware about Motilal Oswal Mutual Fund as well as Motilal Oswal PMS as
well as Broking products.
People monitor their Mutual Fund Investment scheme once in a month. Some of them
track their, scheme once in six months because they take the advantage of professional
management.

55
 Motilal Oswal being a big brand in financial services industry was difficult to pitch for
as we had to match the level of pitching done by their regular employees. Along with it, doing
sales for the first time in life was a challenging task. But sales of financial products not only
taught me about the importance of investment but also how to handle various personality in the
market. My Internship program was designed in such a way that along with business we learn
about the equity market. The above findings and recommendation are my personal opinion
which I found out during my summer internship project.
During this internship I, learned about various financial products and a lot of facts and
philosophy associated with investing, also had an opportunity to learn about sales and had a
close encounter with my selling skills. I was on cloud nine when I converted my first pitch into
business. With acquisition of 12 valuable Channel partners I felt motivated and learned a lot
and hope to use all the knowledge I gained here to add value to my career.

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