Birla Sun Life MF Project by Himanshu Sahu PGDFS

A PROJECT REPORT ON
Acquisition of Individual Financial Adviser (IFA)
SUBMITTED BY
Himanshu Sekhar Sahu
SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR
DIPLOMA IN FINANCIAL SERVICES
OF
UNIVERSITY OF PUNE
UNDER THE GUIDANCE OF
Mr. Prasad V. Bhat
SINHGAD BUSINESS SCHOOL, PUNE CITY

APRIL-MAY 2009
1
Bonafide Certificate
This is to certify that Mr. Himanshu Sekhar Sahu Studying in the 1st
semester of PGDFS programme of University of Pune is a Bonafide student
of Sinhgad Business School, Pune City.
Director
Sinhgad Business School
Pune City
2
STUDENT DECLARATION
I hereby declare that the project report entitled
ACQUISITION OF IFA
Submitted in partial fulfillment of the requirement for the award of diploma

in
Financial Services
To University of Pune, India, is my original work.
Place:
Date:
Signature of the student
3
APPROVAL CERTIFICATE
The project report of
Mr. Himanshu Sekhar Sahu
ACQUISITION OF IFA
Is approved and is acceptable in quality and form.
Internal Examiner External Examiner
Signature: __________ Signature: __________
Name: ________________ Name: ________________
4
GUIDE’S CERTIFICATE
This is to certify that the project report entitled
ACQUISITION OF IFA
Submitted in partial fulfillment of the requirement for the award of diploma

in
Financial Services
Of
University of Pune
Himanshu Sekhar Sahu
has worked under my supervision and guidance and that the project report is
the original work of the student.
CERTIFIED
Guide’s name & signature
5
ACKNOWLEDGEMENT
If words are considered symbol and tokens of acknowledgements then

the following words play the heralding role of expressing my gratitude, a lot
many students have participated directly or indirectly in the completion of
this project.
I would like to convey my thanks to all those who have extended their
cooperation in completing this project. I would like to express my sincere
appreciation and thanks to Mr. Tarun Nirmalkar, who guided me all
throughout the winter training. It is under his valuable guidance, constant
interest and encouragement I have completed this project. He devoted his
ever-precious time from his busy schedule and helped in complete
understanding of the mutual fund industry in India. With his guidance, other
staff of Birla Sun Life Mutual Fund, They were helping me when I was
facing problem .There was very friendly environment all were support me
when I needed.
Also my sincere thanks to the faculty Mrs.Charusila Mantri who has

provided her invaluable expertise for training to be success and encouraged
me in preparing of this report.
Everlasting thanks to God and my Parents whose blessing made my effort

successful. They always encouraged me and motivate me to give my sincere
efforts.
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EXECUTIVE SUMMARY
The project titled “ ACQUISITION OF IFA “ being carried out for BIRLA
SUN LIFE ASSET MANAGEMENTCOMPANY, Mutual fund is a financial
product and Marketing of a financial Products require lot of things, first one
must know about the product Completely so first I was given one week
training about the Mutual fund. I was working as calling to investor to fill up
the empanelment form to associate with AMC for direct distributor which is
known as Individual Financial Advisor (IFA) .First I was collecting detail
address from internet then I was calling them. I was facing many quires from
investor .Some investor is working with NJ, other AMC, which was very
difficult to solve their quires. Such quires like return on investment, upfront,
trail, incentives etc. Some quires which I was not solving, my relationship
manager were solving it. Then I was picked up form the investor and I was
telling them about product which is suitable for them. I was together person
who were interested for AMFI exam. . So Birla Sun Life Mutual Fund
conducts training to those people. Our company also conducts about product
training for investor. I was working with confidently, punctuality with my
manager.
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Index
CONTENTS
CHAPTER-1: 1.1 Company profile

1.2 Industry profile
CHAPTER-2: 2.1 About IFA

2.2 Qualification
2.3 Chart of IFA
CHAPTER-3: 3.1 Introductions

3.2 Scope of the study
3.3 Need of the study
3.4 Objective of the study
3.5 Terminology
3.6 Categories
CHAPTER-4: MUTUAL FUND

4.1 Introduction
4.2 Types of mutual fund
4.3 Advantages and disadvantages of mutual fund
4.4 Role of SEBI for Mutual Fund
4.5 Role of AMFI for Mutual Fund
4.6 Performance of mutual funds in India
4.7 Objective of AMFI
CHAPTER-5: Problem Statement
CHAPTER-6: Project Finding
CHAPTER-7: Recommendation
.
Bibliography & Reference
CHAPTER-1:
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1.1 Company profile
1.2 Industry profile
1.1 Company profile:

Birla Sun Life Asset Management Company Ltd. (BSL-AMC), the investment managers
of Birla Sun Life Mutual Fund, is a joint venture between the Aditya Birla Group and the
Sun Life Financial Services Inc. of Canada. The joint venture brings together the Aditya
Birla Group's experience in the Indian market and Sun Life's global experience.
Since its inception in 1994, Birla Sun Life Mutual fund has emerged as one of India's
leading Mutual Funds managing assets of a large investor base. The fund offers a range of
investment options, which include diversified and sector specific equity schemes, fund of
fund schemes, hybrid and monthly income funds, a wide range of debt and treasury
products and offshore funds.
BSL-AMC follows a long-term, fundamental research based approach to investment. The

approach is to identify companies, which have excellent growth prospects and strong
fundamentals. The fundamentals include the quality of the company’s management,
sustainability of its business model and its competitive position, amongst other factors.
Birla Sun Life Asset Management Company has one of the largest team of research
analysts in the industry, dedicated to tracking down the best companies to invest in.
Birla Sun Life AMC strives to provide transparent, ethical and research-based
investments and wealth management services.
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Aditya Birla Group
The Aditya Birla Group is India's first multinational corporation. Global in vision, rooted
in Indian values, the Group is driven by a performance ethic pegged on value creation for
its multiple stakeholders.
The Aditya Birla Group’s products and services offer distinctive customer solutions
worldwide. The Group has operations in 20 countries - India, Thailand, Laos, Indonesia,
Philippines, Egypt, China, Canada, Australia, USA, UK, Germany, Hungary, Brazil,
Italy, France, Luxembourg, Switzerland, Malaysia and Korea.
A US $28 billion corporation with a market cap. of US $31.5 billion and in the League of
Fortune 500, the Aditya Birla Group is anchored by an extraordinary force of 100,000
employees, belonging to 25 different nationalities. Over 50 per cent of its revenues flow
from its operations across the world.
Its 66 state-of-the-art manufacturing units and sectoral services span India, Thailand,
Indonesia, Malaysia, Philippines, Egypt, Canada, Australia and China.
The Aditya Birla Group is a dominant player in all of the sectors in which it operates.
These sectors include viscose staple fibre, non-ferrous metals, cement, viscose filament
yarn, branded apparel, carbon black, chemicals, fertilizers, sponge iron, insulators and
financial services.
The Group has also made successful forays into the IT and BPO sectors.
In India, the Group has been adjudged “The Best Employer in India and among the top 20
in Asia” by the Hewitt-Economic Times and Wall Street Journal Study 2007.
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Sun Life Financial Inc.
Sun Life Financial Inc. is a leading financial services organization headquartered in

Toronto, Canada, operating in key markets around the world.
The Sun Life Financial group of companies and their joint ventures offer individuals and
corporate customers a diverse range of financial products and services that fall into two
principal business areas: wealth management and protection. Throughout its international
operations, Sun Life Financial has an employee base of approximately 13,800 people plus
an extensive global distribution network of career sales forces, independent agents,
investment dealers and financial planners.
Tracing its roots back to 1865, Sun Life Financial Inc. and its partners today have
operations in key markets worldwide, including Canada, the United States, the United
Kingdom, Hong Kong, the Philippines, Indonesia, India and China. As on 30th June
2007, Sun Life Financial Inc. manages assets worth CDN $435 billion.
Sun Life Financial Inc. trades on the Toronto (TSX), New York (NYSE) and Philippine
(PSE) stock exchanges under ticker symbol "SLF".
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VISION
To be the most trusted name in investment and wealth management, to be the preferred
employer in the industry and to be a catalyst for growth and excellence of the asset
management business in India.
MISSION
To consistently pursue investor's wealth optimization by:
Achieving superior and consistent investment results.
Creating a conducive environment to hone and retain talent.
Providing customer delight.
Institutionalizing systems-approach in all aspects of functioning.
Upholding highest standards of ethical values at all times.
Values
• Integrity
• Commitment
• Passion
• Seamlessness
• Speed
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CONSTITUTION OF THE MUTUAL FUND
BACKGROUND OF THE ASSET MANAGEMENT COMPANY’S
PROMOTERS
The Aditya Birla Group
The Aditya Birla Group is India's first multinational corporation. Global in vision, rooted
its multiple stakeholders. A US$ 8.3 billion conglomerate, with a market capitalisation of
US$ 14 billion, it is anchored by an extraordinary force of 72,000employees belonging to
over 20 different nationalities. Over 30 per cent of its revenues flow from its operations
across the world. The Group's products and services offer distinctive customer solutions.
Its 72, state-of-the-art manufacturing units and sectoral services, span India, Thailand,
Indonesia, Malaysia, Philippines, Egypt, Canada, Australia and China.
A premium conglomerate, the Aditya Birla Group is a dominant player in all the sectors
in which it operates, such as viscose staple fibre, non-ferrous metals, cement, viscose
filament yarn, branded apparel, carbon black, chemicals, fertilisers, sponge iron,
insulators and financial services.
Sun Life Financial Inc.
Sun Life Financial is a leading international financial services organization providing a

diverse range of wealth accumulation and protection products and services to individuals
and corporate customers. Chartered in 1865, Sun Life Financial and its partners today
have operations in key markets worldwide, including Canada, the United States, the
United Kingdom, Hong Kong, the Philippines, Japan, Indonesia, India, China and
Bermuda. As of December 31, 2005, the Sun Life Financial Inc. group of companies had
total assets under management of CDN$ 387 billion.
Fund Organization and Management
Birla Mutual Fund has been constituted as a trust under the provisions of the Indian
Trusts Act, 1882 (2 of 1882) and registered with SEBI bearing registration no.
MF/020/94/8 dated December 23, 1994. The objective of the Mutual Fund is to offer to
the public and other eligible investors units in one or more schemes of the Mutual Fund
for making group or collective investments primarily in Indian Securities in accordance
with and as permitted under the directions and guidelines issued from time to time by
SEBI. The Corporate Office of the Mutual Fund is at Ahura Centre, Tower A, 2nd Floor,
96 A/D Mahakali Caves Road, Andheri (East), Mumbai - 400 093.
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The Sponsors
The sponsors of Birla Mutual Fund are Birla Global Finance Ltd. (since merged with
Aditya Birla Nuvo Limited) and Sun Life (India)AMC Investments Inc. (a company
governed by the laws of Canada), which is a wholly-owned subsidiary of Sun Life
Financial Inc.Sun Life (India) AMC Investments Inc. is a deemed sponsor under the
Securities and Exchange Board of India (Mutual Funds)Regulations, 1996.
The Trustee Company
Birla Sun Life Trustee Company Private Ltd. (BSLTC) is a company incorporated with
limited liability under the Companies Act, 1956. Under the Trust Deed dated December
16, 1994 BSLTC has been appointed as the Trustee forBirla Mutual Fund with Birla
Global Finance Ltd (since merged with Aditya Birla Nuvo Ltd.) as the Settlor. BSLTC is
ajoint venture between the Aditya Birla Group and the Sun Life Financial Services of
Canada Inc. (through its whollyownedsubsidiary Sun Life (India) AMC Investments
Inc.). Both the joint venture partners hold 50% of the equitycapital of BSLTC. Summary
of substantive provisions of the trust deed, which may be of material interest to
theUnitholders.
14
Financial Summary of Birla Global Finance Ltd. (Since merged with Aditya Birla
Nuvo Ltd.)
In Indian Rupees (Lakhs)
Financial Summary of Sun Life Financial Inc.
15
In Indian Rupees (Lakhs)
EarningPer Share
3.14 2.81
31.12.2003
31.12.2004
31.12.2005
2.81
Obligations of the Asset Management Company:
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1. The Asset Management Company shall take all reasonable steps and exercise due
diligence to ensure that the investment of funds pertaining to any schemes not contrary to
the provisions of the Regulations and the Trust Deed.
2. The Asset Management Company shall exercise due diligence and care in all its
investment decisions as would be exercised by other persons engaged in the same
business.
3. The Asset Management Company shall be responsible for the acts of commissions or
omissions by its employees or the persons whose services have been procured by the
Asset Management Company.
4. The Asset Management Company shall submit to the trustees Quarterly reports
of each year on its activities and the compliance with the Regulations.
5. The Trustees at the request of the Asset Management Company may terminate the
assignment of the Asset Management Company at any time. Provided that such
termination shall become effective only after the Trustees have accepted the termination
of assignment and communicated their decision in writing to the Asset Management
Company. Notwithstanding anything contained in any contract or agreement or
termination, the Asset Management Company or its directors or other officers shall not be
absolved of liability to the mutual fund for their acts of commission or omissions, while
holding such position or office.
6. An Asset Management Company shall not through any broker associated with the
sponsor, purchase or sell securities, which is average of 5% or more of the aggregate
purchases and sale of securities made by the mutual fund in all its schemes. Provided that
for the purpose of this sub-regulation, aggregate purchaseand sale of securities shall
exclude sale and distribution of units issued by the mutual fund. Provided further that the
aforesaid limit of 5% shall apply for a block of any three months.
7. The Asset Management Company shall not purchase or sell securities through any
broker [other than a broker referred to in clause 6 above] which is average of 5% or more
of the aggregate purchases and sale of securities made by the mutual fund in all its
schemes, unless the Asset Management Company has recorded in writing the justification
for exceeding the limit of 5% and reports of all such investments are sent to the Trustees
on a quarterly basis. Provided that the aforesaid limit of 5% shall apply for a block of
three months.
8. The Asset Management Company shall not utilise the services of the sponsor or any of
its associates, employees or their relatives, for the purpose of any securities transaction
and distribution and sale of securities. Provided that an Asset Management Company may
utilise such services if disclosure to that effect is made to the unit holders and the
brokerage or commission paid is also disclosed in the half yearly annual accounts of the
mutual fund. Provided further that the mutual funds shall disclose at the time of declaring
half yearly and yearly results
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a. Any underwriting obligations undertaken by the schemes of the mutual funds with
respect to the issue of securities of associate companies
b. devolvement, if any
c. subscription by the schemes in the issues lead managed by associate companies
d. subscription to any issue of equity or debt on private placement basis where the
sponsor or any of its associate companies has acted as arranger or manager.
9. The Asset Management Company shall file with the Trustees the details of transactions
in securities by the key personnel of the Asset Management Company in their own name
or on behalf of the Asset Management Company and shall also report to SEBI, as and
when required by SEBI.
10. In case the Asset Management Company enters into any securities transactions with
any of its associates a report to that effect shall be sent to the Trustees at its next meeting.
11. In case any company has invested more than 5 per cent of the net asset value of a
schemes, the investment made by that schemes or by any other schemes of the same
mutual fund in that company or its subsidiaries shall be brought to the notice of the
Trustees by the Asset Management Company and be disclosed in the half yearly and
annual accounts of the respective schemes with justification for such investment.
Provided the latter investment has been made within one year of the date of the former
investment calculated on either side.
12. The Asset Management Company shall file with the Trustees and SEBI -
a. detailed bio-data of all its Directors along with their interest in other companies
within fifteen days of their appointment; and
b. Any change in the interests of Directors every six months.
c. A quarterly report to the Trustees giving details and adequate justification about the
purchase and sale of the securities of the group companies of the sponsor or the Asset
Management Company as the case may be, by the mutual fund during the said quarter.
13. Each Director of the Asset Management Company shall file the details of his
transactions of dealing in securities with the Trustees on a quarterly basis in accordance
with guidelines issued by SEBI
14. The Asset Management Company shall not appoint any person as key personnel
who has been found guilty of any economic offence or involved in violation of securities
laws.
15. The Asset Management Company shall appoint registrars and share transfer agents
who are registered with the SEBI.
1.2 Industry profile:
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Mutual Funds Industry in India:
The origin of mutual fund industry in India is with the introduction of the concept of
mutual fund by UTI in the year 1963. Though the growth was slow, but it accelerated
from the year 1987 when non-UTI players entered the industry.
In the past decade, Indian mutual fund industry had seen a dramatic improvement, both
qualities wise as well as quantity wise. Before, the monopoly of the market had seen an
ending phase; the Assets under Management (AUM) were Rs. 67bn. The private sector
entry to the fund family raised the AUM to Rs. 470bn in March 1993 and till April 2004;
it reached the height of 1,540 bn.
Putting the AUM of the Indian Mutual Funds Industry into comparison, the total of it is
less than the deposits of SBI alone, constitute less than 11% of the total deposits held by
the Indian banking industry.
The main reason of its poor growth is that the mutual fund industry in India is new in the
country. Large sections of Indian investors are yet to be intellectual with the concept.
Hence, it is the prime responsibility of all mutual fund companies, to market the product
correctly abreast of selling.
Mutual fund set up:
A mutual fund is set up in the form of a trust, which has sponsor, trustees, asset
Management Company (AMC) and custodian. The trust is established by a sponsor or
more than one sponsor who is like promoter of a company. The trustees of the mutual
fund hold its property for the benefit of the unit holders. Asset Management Company
(AMC) approved by SEBI manages the funds by making investments in various types of
securities. Custodian, who is registered with SEBI, holds the securities of various
schemes of the fund in its custody. The trustees are vested with the general power of
superintendence and direction over AMC. They monitor the performance and compliance
of SEBI Regulations by the mutual fund.
SEBI Regulations require that at least two thirds of the directors of trustee company or
board of trustees must be independent i.e. they should not be associated with the
sponsors. Also, 50% of the directors of AMC must be independent. All mutual funds are
required to be registered with SEBI before they launch any scheme. However, Unit Trust
of India (UTI) is not registered with SEBI (as on January 15, 2002).
Evolution of Mutual Fund in India

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The mutual fund industry in India started in 1963 with the formation of Unit Trust
of India, at the initiative of the Government of India and Reserve Bank 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 crore of assets under management.
Second Phase - 1987-1993 (Entry of Public Sector Funds)
Entry of non-UTI mutual funds. SBI Mutual Fund was the first followed by Cañar 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 in 1989 and GIC in 1990. The end of 1993 marked Rs.47,004 crore as assets under
management.
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 crore. The Unit Trust of India with Rs.44,541 crore of assets under
management was way ahead of other mutual funds.
Fourth Phase - since February 2003
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This phase had bitter experience for UTI. It was bifurcated into two separate entities.
One is the Specified Undertaking of the Unit Trust of India with AUM of Rs.29,835 crore
(as on January 2003). The Specified Undertaking of Unit Trust of India, functioning
under an administrator and under the rules framed by Government of India and does not
come under the purview of the Mutual Fund Regulations.
The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is
registered with SEBI and functions under the Mutual Fund Regulations. With the
bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76,000 crore of
AUM and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual
Fund Regulations, and with recent mergers taking place among different private sector
funds, the mutual fund industry has entered its current phase of consolidation and growth.
As at the end of September, 2004, there were 29 funds, which manage assets of
Rs.153108 crore under 421 schemes.
Growth in Assets Under Management
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HOW LONG TO KEEP INVESTMENT TO GET
MAXIMUM RETURNS
22
Get desired returns technically open-ended funds you can withdraw your investments
even within a week, but to positive time frame is required are:
Fund Investors Expectation
Tax relief 96’ 3 year locking
Equity Fund 2 to 3 years
Income Plus 2 to 3 years
The above-mentioned returns in the table are indicative and not assured. All investments
in MUTUAL FUNDS are securities and are subject to market risk and the NAVs of the
schemes may go up and down depending upon the factors and forces affecting the
security market including the fluctuations in the internal rates. These are open-ended
scheme. The past performance of the MUTUAL FUNDS is not indicative of future
performance.
THE RISK RETURN GRAPHS FOR VARIOUS FUNDS
23
Sector Funds
R
E Equity Funds
T
U Balanced Funds
R
N Income Funds
S
Liquid Funds
RISKS
The above Graph shows the Risk and Returns generated by different Funds. Liquid Funds
are less Risky and also generate less Returns where as Sector Funds are more Risky but
generate more Returns by the example of above two Funds it is clear that Risk and
Returns are directly proportional to each other. Other Funds like Equity Funds, Balanced
Funds and Income Funds are also gives the same percentage of Returns as the Risk
involved.
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AWARDS AND RECOGNITION
“THE MUTUAL FUND HOUSE OF THE YEAR”

Awarded by CNBC TV 18- CRISIL of the Year 2007
CNBC TV18 - CRISIL Mutual Fund of the Year Awards for 2007
Mutual Fund of the Year

Birla Sun Life Mutual Fund
Total Fund Houses = 26
1 yr performance ended 31, Dec 2007
Emerging Equity Fund of the Year Birla Sun Life Frontline Equity Fund
Birla Infrastructure Fund – Growth Category: Large Cap oriented
1 yr performance ended 31 Dec, ‘07 Equity Fund
Total Schemes in Category = 14 1 yr performance ended 31 Dec, ‘07 Total
Schemes in Category = 22
25
Birla Sun Life Income Birla Sun Life Monthly Birla Sun Life Short
Income Term Fund
Fund
Category: Monthly Income Category: Income – Short
Category: Income Funds Plans – Conservative Term Funds
1 yr performance ended 1 yr performance ended 1 yr performance ended
31 Dec, ‘07 31 Dec, ‘07 31 Dec, ‘07
Total Schemes in Total Schemes in Total Schemes in
Category = 17 Category = 9 Category = 12
Lipper Fund Awards 2008
Birla Gilt Plus-Regular Birla Sun Life '95 Fund-

Plan-Growth Growth
Best Fund - Bond INR Best Fund - Mixed Asset
Government INR Aggressive
5 yrs performance ended 10 yrs performance ended
31 Dec, ‘07 31 Dec, ‘07
Total Schemes in Total Schemes in
Category = 35 Category = 6
ICRA Mutual Fund Awards 2008
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Birla Income Plus Birla Sun Life Short Term Fund
7-Star Gold Award – Debt: Long 7-Star Gold Award – Liquid Plus
Term 1 yr ended 31 Dec, ‘07
1 yr ended 31 Dec, ‘07 Total Schemes in Category = 26
Total Schemes in Category = 18
Lipper Fund Awards 2007
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Birla Sun Life '95 Fund Birla Gilt Plus - Regular Plan
Best Fund - Mixed Asset INR Aggressive Best Fund - Bond Indian Rupee -
10 - Year Performance ended Government
December 31, 2006 5 - Year Performance ended
Total Schemes in Category = 5 December 31, 2006
Total Schemes in Category = 28
Heritage:
Birla Sun Life Mutual Fund is a joint venture between the Aditya Birla Group and Sun
Life Financial Inc. of Canada. Birla Sun Life Mutual Fund offers a wide range of top
quality financial services solutions for resident and non-resident Indians.
The Aditya Birla Group

The Aditya Birla Group is one of India's largest business houses. Global in vision, rooted
its multiple stakeholders.
The Group's operations span 66 state of the art, straddling India, Thailand, Malaysia,
Indonesia, Egypt, Philippines, Canada, Australia and China.
A US $28 billion corporation with a market cap. of US $31.5 billion and in the League of
Fortune 500, the Aditya Birla Group is anchored by an extraordinary force of 100,000
employees, belonging to 25 different nationalities. Over 50 per cent of its revenues flow
from its operations across the world.
The Aditya Birla Group is a dominant player in all its areas of operations viz; Aluminum,
Copper, Cement, Viscose Staple Fibre, Carbon Black, Viscose Filament Yarn, Fertilizers,
Insulators, Sponge Iron, Chemicals, Branded Apparels, Insurance, Mutual Funds,
Software and Telecom. The Group has strategic joint ventures with global majors such as
Sun Life (Canada), AT&T (USA), the Tata Group and NGK Insulators (Japan), and has
28
ventured into the BPO sector with the acquisition of Transforms, a leading ITES/BPO
company.
Sun Life Financial

Sun Life Financial is a leading international financial services organization providing a
diverse range of wealth accumulation and protection products and services to individuals
and corporate customers. Chartered in 1865, Sun Life Financial and its partners today
have operations in key markets worldwide, including Canada, the United States, the
United Kingdom, Hong Kong, the Philippines, Japan, Indonesia, India, China and
Bermuda.
As of 30 June 2007, the Sun Life Financial group of companies had total assets under
management of CDN $ 435 billion.
Innovations
Birla Sun Life Mutual Fund was the first to launch

Birla Cash Plus, a liquid fund.
Birla Dividend Yield Plus which is a dividend yield fund
Birla Bond Index Fund (a debt index fund) which replicates the Crisil Composite Bond
Fund Index has been assigned AAAF rating by Crisil.
Investment Philosophy
Birla Sun Life Mutual Fund follows a long-term, fundamental research based approach to
investment. The approach is to identify companies, which have excellent credit-
worthiness and strong fundamentals. The fundamentals include the quality of the
company's management, sustainability of its business model and its competitive position,
amongst other factors. Birla Sun Life Asset Management Company (BSL-AMC) has one
of the largest team of research analysts in the industry, dedicated to tracking down the
best companies to invest in.
BSL-AMC will always strive to provide transparent, ethical and research-based
investments and wealth management services.
Product Offerings
Birla Sun Life Mutual Fund offers a range of investment options, which include
diversified and sector specific equity schemes, fund-of-fund schemes, hybrid and monthly
income funds, a wide range of debt and treasury products and offshore funds. BSL-AMC
also provides Private Wealth Management services.
29
Investment Objectives & Policies
The primary investment objective of the Scheme is to generate regular income so as to
make monthly and quarterly distributions to Unit holders and the secondary objective is
growth of capital. Income may be generated through receipt of coupon payments,
amortization of the discount on debt instruments, receipt of dividends or purchase and
sale of securities in the underlying portfolio. The Scheme will, under normal market
conditions, invest its net assets primarily in fixed income securities, money market
instruments, cash and cash equivalents. The Scheme will maintain a small exposure to the
equity market. All money market investments taken together shall not exceed 60% of the
total net assets of Birla Sun Life Monthly Income. Fixed-income and money market
securities includes but is not limited to Treasury bills, Government of India securities,
corporate debt, state and government -guaranteed bonds, public sector bonds, convertible
securities, commercial paper, certificates of deposit, discounted trade bills, asset backed
30
securities, financial institution and banking sector bonds and call money. Investments in
debt and money market instruments will be made in securities rated as investment grade
by at least one recognized rating agency. Investments in unrated securities will be made
with the prior approval of the Boards of Directors of the Trustee Company and the Asset
Management Company or a committee thereof. From time to time it is possible that the
portfolio may hold cash. The Scheme may also enter into repurchase and reverse
repurchase obligations in all securities held by it as per the guidelines and regulations
applicable to such transactions. Further, the Scheme intends to participate in securities
lending as permitted under the SEBI (MF) Regulations, 1996. For purpose of this Offer
Document equity securities include debt securities convertible into shares and rights or
warrants to purchase shares.
It is the intention of the Scheme to trade in the derivatives market in compliance with
SEBI (MF) Regulations, 1996.
Investments may be made in listed or unlisted instruments. Listed securities may be listed
on any of the recognized Indian stock exchanges including the National Stock Exchange
and the OTCEI. Investments may be made as secondary market purchases, initial public
offers, private placements, negotiated investments, rights offers, etc. The Mutual Fund
under this Scheme may invest in non-publicly offered debt securities (including
convertible securities).The investments may have tenors that could be short-term (i.e. less
than one year) or long-term (i.e. greater than one year).
The portion of the Scheme's portfolio invested in each type of security will vary in
accordance with economic conditions, interest rates, liquidity and other relevant
considerations, including the risks associated with each investment. The Scheme will, in
order to reduce the risks associated with any one security, utilize a variety of investments.
Performance will depend on the Asset Management Company's ability to assess
accurately and react to changing market conditions. While it is the intention of the
Scheme to maintain the maximum exposure guidelines provided in the table above there
may be instances when these percentages may be exceeded. Typically, this may occur
while the corpus is small thereby causing diversification issues.
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No more than 5% of the net assets of Birla Sun Life Monthly Income may be invested in
equity and equity-related securities that are not listed on any stock exchange (including
the OTCEI). Any such investments will only be made if the Asset Management Company
believes that such securities may be listed within a two year period. This policy,
however, is not applicable to the Scheme's acquisition of equity and equity related
securities in initial public offerings that at the time of acquisition are not yet either listed
or quoted on any stock exchange, but pursuant to the terms of such initial public offering
will be so listed. The Mutual Fund under this Scheme will not invest more than 15% of its
net assets in the debt (including non-publicly offered debt securities) and money market
securities of any one issuer, excluding call money. The Scheme will not
invest more than 25% of its net assets in the debt and money market securities of any one
industry. The 25% industry exposure limit will apply to investments made in securities
under the following classes: Corporate Debt, PSU Bonds, Commercial Paper and Asset
Backed Securities. The Trustee has the right, in its sole discretion, to limit
redemptions under certain circumstances, see section 7.8, Right to limit Redemptions.
Discuss About Four Products:

Birla Sun Life Tax Relief ‘96
There are various income tax saving investment options available under Section
80C of the Income Tax Act. Among them, Equity Linked Savings Schemes (ELSS) offer
an option of investing primarily in equity markets and thus the potential of generating
higher returns. 80C investments like ELSS provide the investor with the dual benefit of
Tax rebate under section 80C + long term wealth creation.
An open-ended equity linked saving scheme (ELSS) with the objective of long
term growth of capital through a portfolio with a target allocation of 80% equity and 20%
debt and money market securities.
Birla Sun Life Tax Relief '96 (BSLTR 96) is a fund which aims at achieving long
term growth of capital along with Income Tax benefits for investors under section 80C. It
follows a bottom-up approach to investing, where the emphasis is on identifying
companies in quality businesses with a strong competitive position and run by quality
management. Essentially the focus is on long term fundamentally driven values.
32
Performance
Fund Performance Comparison:

BIRLA SUN LIFE TAX RELIEF 96 – Since
1 Year 3 Years 5 Years
DIVIDEND Inception
BIRLA SUN LIFE TAX RELIEF 96 -
DIVIDEND -69.53% 9.57% 20.99% 46.07%
(NAV: Rs. 48.44)
BSE 200 -55.93% -0.74% 7.91% 10.22%
Inception - 29-Mar-1996.
Returns calculated for Growth option as on 6-Jan-2009.
Returns are CAGR for 1 year or more and absolute for less than 1 year.
Past performance may or may not be sustained in the future. Load has not been
considered for computation of returns.
SIP Performance Simulator

The below table simulates the values of Rs.1000 invested systematically in the
above scheme and its benchmark indices.
BIRLA SUN LIFE TAX RELIEF 96 – DIVIDEND

Value (Rs.) of SIP in Returns (%)
Total Birla Sun Birla Sun
Investment
Investment Life Tax Life Tax
Period BSE 200 BSE 200
(Rs.) Relief '96 Relief '96
* *
Since Inception 154000 580333.92 851250.94 21.68 25.24
Last 5 years 60000 131680.96 55115.52 32.88 0
Last 3 years 36000 52539.35 23143.23 27.36 0
Last 1 year 12000 12216.19 8719.78 3.84 0
Returns as on 6-Jan-2009. Inception Date: 29-Mar-1996.
33
Last monthly SIP installment date assumed to be the above date (or the previous day
when NAV was declared if the above day is not a working day). Returns are CAGR for 1
year or more and absolute for less than 1 year.
Past performance may or may not be sustained in the future. Load & taxes have not been
* CAGR Returns are computed after accounting for the cash flow by using the XIRR
method (investment internal rate of return)
Birla Sun Life Equity Fund
Birla Sun Life Equity Fund is a diversified equity fund enabling investors to
capitalize on the immense growth opportunities provided by the stock market while at the
same time minimizing the risk.
An open-ended growth scheme with the objective of long term growth of capital,
through a portfolio with a target allocation of 90% equity and 10% debt and money
market securities.
Significant portion of the scheme is invested in sectors with high growth

prospects. Additional focus is kept in identifying sunrise industries / concept stocks. The
large in-house research team is especially helpful in identifying such stocks. The fund
also takes medium-term bets on certain sectoral trends to ride on the growth momentum.
34
The Fund invests in a wide cross-section of sectors thereby offering adequate
diversification to investors.
Performance
Fund Performance Comparison:-
BIRLA SUN LIFE EQUITY FUND - Since
1 Year 3 Years 5 Years
GROWTH Inception
BIRLA SUN LIFE EQUITY FUND -
GROWTH -55.08% 3.02% 19.46% 29.09%
(NAV: Rs. 141.23)
BSE 200 -55.93% -0.74% 7.91% 13.88%
Inception - 27-Aug-1998.
SIP Performance Simulator
The below table simulates the values of Rs.1000 invested systematically in the above
scheme and its benchmark indices.
BIRLA SUN LIFE EQUITY FUND – GROWTH

Value (Rs.) of SIP in Returns (%)
Total Birla Sun Birla Sun
Investment
Investment Life Life
Period BSE 200 BSE 200
(Rs.) Equity Equity
Fund * Fund *
Since Inception 125000 252575.44 450973.66 13.08 23.76
Last 5 years 60000 61288.45 74451.94 0.86 8.79
Last 3 years 36000 26598.23 28592.15 0 0
Last 1 year 12000 8832.96 9462.41 0 0
Returns as on 6-Jan-2009. Inception Date: 27-Aug-1998.
35
Last monthly SIP installment date assumed to be the above date (or the previous day
when NAV was declared if the above day is not a working day). Returns are CAGR for 1
year or more and absolute for less than 1 year.
Past performance may or may not be sustained in the future. Load & taxes have not been
• CAGR Returns are computed after accounting for the cash flow by using the
XIRR method (investment internal rate of return)
Birla Sun Life Income Plus

Birla Sun Life Income Plus (BSLIP) is an open-ended debt scheme with the
objective to generate consistent income through superior yields on its investments at
moderate levels of risk through a diversified investment approach.
Performance
Fund Performance Comparison:
Since
BIRLA SUN LIFE INCOME PLUS - GROWTH 1 Year 3 Years 5 Years
Inception
BIRLA SUN LIFE INCOME PLUS - GROWTH
22.3% 13.67% 8.67% 11.53%
(NAV: Rs. 42.336)
CRISIL Composite Bond Fund Index NA NA NA NA
36
Inception - 21-Oct-1995.
CHAPTER-2: 2.1 About IFA

2.2 Qualification
2.3 Chart
2.1 About IFA
Individual financial adviser is professionals who offer individual advice on financial

matters to their clients and recommend suitable financial products from the whole of the
market. Typically an individual financial adviser will conduct a detail survey their
client’s financial position, preferences and objectives, this is known as ‘fact find’.
Adviser will give suitable judgment to his client which is benefit for him. Individual
Financial Adviser should be ARN card holder, which is giving by AMFI.
37
Paying for advice:
Traditionally IFAs have relied upon commission paid by product providers to pay for
their services. In recent years there has been a shift towards fee based advice as this is
perceived as fairer toward the client. However, due to under-capitalization in the advice
sector and consumer reluctance to pay for something they perceived as getting for free,
the transition to fee based advice has been slow and concentrated in the 'high net worth
sector'.
To encourage client's awareness of the cost of advice, and to stimulate a market in advice,
the FSA has introduced a new disclosure regime for advisers giving regulated investment
advice. Since July 2005 this regime insists that advisers who market themselves as
independent must offer the option of paying a fee for advice. The three main
remuneration options available are as follows:
• Commission: Traditionally the most common way to pay for advice is for the
IFA to receive a commission from the product provider. The amount of
commission must be disclosed, and some IFAs will rebate a portion of their
commission, particularly in Execution-Only cases. The amount of commission
and whether it is deducted from the amount you actually invest or is included in
the cost of the investment varies from product to product. The client pays for
commission from product charges so it does not represent 'free advice'. As well as
the initial commission, the adviser is likely to be also paid an annual "trail"
commission by the product provider. Not all products offer the same rate of trail
commission and therefore a potential conflict of interest may arise. The products
making the highest management charges usually offer the adviser the highest trail
commission.
• Fees: Less common than commission, all IFAs must offer the option of working
for a fee. Depending on the size and type of the investment, and the complexity of
the advice, this can work out cheaper than paying commission. Paying a fee for
advice is the best way to ensure that the advice is impartial and there is no
incentive for the IFA to recommend a product solution.
• Combination: It is also possible to pay a combination of fees and commission. In
this situation the IFA will rebate a proportion of the commission they would have
been due in a commission-only scenario.
There are strict requirements for the type and amount of payments to IFAs to be clearly
disclosed, so it would normally be quite easy to determine the cheapest option for a
particular investment.
38
2.2 Qualification:
For an IFA, he should be qualified by the examination of Association of mutual funds in

India (AMFI). There is no need of academic career. He should be knowledge about
financial product.
Strong math, analytical, and problem-solving skills are essential qualifications for
financial analysts. Good communication skills also are necessary, because these workers
must present complex financial concepts and strategies. Self-confidence, maturity, and
the ability to work independently are important as well. Financial analysts must be detail-
oriented, motivated to seek out obscure information, and familiar with the workings of
the economy, tax laws, and money markets. Financial analysts should also be very
comfortable with computers, as they are frequently used in doing work. Although much
of the software they use is proprietary, they must be comfortable working with
spreadsheets and statistical packages.
39
2.3 Chart:
No. of empanel distributor
Birla
Other AMC
Not Interest
It is the chart of adviser who were empanel with birla. Out of 100, 30% adviser has
empanelled with birla, 50% adviser has empanelled with other AMC, 20% advisers are
not interested to empanel.
CHAPTER-3:
3.1 Introductions
3.2 Scope of the study
3.3 Need of the study
3.4 Objective of the study
3.5 Fund Terminology
3.6 Fund Categories
40
3.1 Introduction
The project deals with the comparison of the fund performance of different private
mutual fund schemes and also the risk adjusted performance evaluation of selected
mutual fund schemes in India. In order to make the comparison the secondary data is
collected. A mutual fund is a trust that pools the savings of a number of investors who
shares 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 the capital appreciations realized are shared by its unit holders
in proportion to the number of units owned by them. Thus a mutual fund is the most
suitable investment for the common man as it offers an opportunity to invest in
diversified, professionally managed basket of securities at a relatively low cost.
I have been interested to know and understand the whole mutual fund industry and know
which kind of different mutual fund companies are dealing in the market. Now a day’s
most of the population of India investing their money for side income to fulfill their day
to day extra wants. For this kind of income source mutual fund investment is very much
beneficial, through this minimum 20 to 30% profit compulsory to gain. So it is a today’s
growing sector and lots of job opportunity is there. Even I don’t know the exact number
of the existing customer because each day new customers register there and company
provides lots of company’s mutual fund to the customer.
3.2 The scope of the study:
The study of Birla Sun Life Mutual Fund’s schemes, such as
a. Equity Orinted Schemes

b. Balanced Schemes
c. Debt Oriented Schemes
3.3 Need of the study:
The study first tries to understand the composition of the selected funds which determines
the scope of performance for the funds, followed by use of ratios that are relevant in
quantifying and understanding the risk and return relationships for each mutual fund
scheme under consideration. Then a comparative analysis of the mutual fund schemes is
done to see which fund has performed the best.
This study is significant to the company as it looks into the minute details that
differentiate the performances of funds of different companies with same theme or sector
under similar market conditions.
3.4 Objectives of the study:
41
The study aims at evaluating the performance of Mutual Fund schemes in terms of return
of the investments, risk associated with such investments and consistency or
predictability of the returns.
The main aim of study is to accomplish the following objectives
• To understand the procedure of working & getting the experience

of working in the company.
• To make people aware of Mutual fund its various schemes and benefit of it..
• To learn & observe all the activities done in Marketing Department.
• To notice the criteria of working.
• To analyses and innovate better idea of working.
• To find loopholes if any and present solution.
• To see the importance of Co-operation between the department and the way they
work.
3.5 Terminology:
What is Net Asset Value (NAV) of a scheme?
The performance of particular scheme of a mutual fund is denoted by Nav Asset

Value
Nav Asset Value is the market value of the securities held by a particular scheme. Since
market value of securities changes every day, the NAV of scheme also varies on day to
day basis. The NAV per unit is the market value of securities of a scheme divided by the
total number of units of the scheme on any particular date.
Market or Fair value of the investment in Securities Assets

+ Current Assets –Current Liabilities and provision
42
NAV Per unit =
No. of Unit s Outstanding under the scheme
What is a load or no-load Fund?
A Load Fund is one that charges a percentage of NAV for entry or exit . That is , each
time one buys or sells units in the fund, a charge will be payable . This charge is used by
the mutual fund for marketing and distribution expenses.
Example:- The NAV per unit is Rs.10, if the entry as well as exit load charged is 1%,
then the investors who buy would be required to pay Rs. 10.10 and those who offer their
units for repurchase to the mutual fund will get only Rs. 9.90 per unit .The investors
should take the loads into consideration while making investment as these affect their
yield / returns. However, the investors should also consider the performance track record
and service standards of the mutual fund which are more important .Efficient funds may
give higher returns in spite of loads.
A no-load fund is the one that does not charge for entry or exit. It means the investor can
enter the fund / scheme at NAV and no additional charge are payable on purchase or sale
of units.
What is a sales or repurchase / redemption price?
The price or NAV a unit holder is charged while investing in an open-ended

scheme is called sales price. It may include sales load, if applicable. Repurchase or
redemption price is the price or NAV at which an open-ended scheme purchase or
redeems its units form the unit holders. It may include exit load, if applicable.
3.6 Categories:
Today, client has a varied set of Mutual Fund categories to choose from
Below are listed the various Mutual Fund categories which an invetor can choose from,
depending his risk appetite and return they intent on generating.
► Sector Fund
43
► Diversified Equity Funds
► Tax Saving Funds
► Index Funds
► Balanced Schemes
► Income Funds
► Gilt Funds
► Fixed Term Plans
► Liquid Funds
CHAPTER-4:
MUTUAL FUND
4.1 Introduction
4.2 Types of mutual fund
4.3 Advantages and disadvantages of mutual fund
4.1 Introduction
A mutual fund is a form of collective investment. It is a pool of money collected from
various investors which is invested according to the stated investment objective. The fund
44
manager is the person who invests the money in different types of securities according to
the predetermined objectives. The portfolio of a mutual fund is decided taking into
consideration this investment objective. Mutual fund investors are like shareholders and
they own the fund. The income earned through these investments and the capital
appreciation realized by the scheme is shared by its unit holders in proportion to the
number of units owned by them. The value of the investments can go up or down,
changing the value of the investors holding. Mutual funds are one of the best investments
ever created because they are very cost efficient and very easy to invest in.
The investment in securities through mutual funds is spread across wide range of
industries and sectors and thus the risk is reduced. Diversification reduces the risk
because all stocks may not move in the same direction at the same time. Various fund
houses issue units to the investors in accordance with the quantum of money invested by
them. Investors of mutual funds are known as unit holders.
In India a mutual fund is required to be registered with Securities Exchange Board of

India [SEBI] which regulates the securities market.
The flow chart below describes broadly the working of a mutual fund:
Mutual Fund Operation Flow Chart
45
Types of mutual fund schemes:-
Wide varieties of Mutual Fund Schemes exist to cater to the needs such as financial
position, risk tolerance and return expectations etc. The table below gives an overview
into the existing types of schemes in the Industry.
Schemes according to Maturity Period:

A mutual fund scheme can be classified into open-ended scheme or close-ended scheme
depending on its maturity period.
Open-ended Fund/ Scheme:
An open-ended fund or scheme is one that is available for subscription and repurchase on
a continuous basis. These schemes do not have a fixed maturity period. Investors can
conveniently buy and sell units at Net Asset Value (NAV) related prices which are
declared on a daily basis. The key feature of open-ended schemes is liquidity.
Close-ended Fund/ Scheme:
A close-ended fund or scheme has a stipulated maturity period e.g. 5-7 years. The fund is
open for subscription only during a specified period at the time of launch of the scheme.
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 scheme on the stock exchanges where the units are listed.
In order to provide an exit route to 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 to
46
the investor i.e. either repurchase facility or through listing on stock exchanges. These
mutual funds schemes disclose NAV generally on weekly basis.
Schemes according to Investment Objective:
A scheme can also be classified as growth scheme, income scheme, or balanced scheme
considering its investment objective. Such schemes may be open-ended or close-ended
schemes as described earlier. Such schemes may be classified mainly as follows:
Growth / Equity Oriented Scheme:
The aim of growth funds is to provide capital appreciation over the medium to long- term.
Such schemes normally invest a major part of their corpus in equities. Such funds have
comparatively high risks. These schemes provide different options to the investors like
dividend option, capital appreciation, etc. and the investors may choose an option
depending on their preferences. The investors must indicate the option in the application
form. The mutual funds also allow the investors to change the options at a later date.
Growth schemes are good for investors having a long-term outlook seeking appreciation
over a period of time.
Income / Debt Oriented Scheme:
The aim of income funds is to provide regular and steady income to investors. Such
schemes generally invest in fixed income securities such as bonds, corporate debentures,
Government securities and money market instruments. Such funds are less risky
compared to equity schemes. These funds are not affected because of fluctuations in
equity markets. However, opportunities of capital appreciation are also limited in such
funds. The NAVs of such funds are affected because of change in interest rates in the
country. If the interest rates fall, NAVs of such funds are likely to increase in the short
run and vice versa. However, long term investors may not bother about these fluctuations.
Balanced Fund:
The aim of balanced funds is to provide both growth and regular income as such schemes
invest both in equities and fixed income securities in the proportion indicated in their
offer documents. These are appropriate for investors looking for moderate growth. They
generally invest 40-60% in equity and debt instruments. These funds are also affected
because of fluctuations in share prices in the stock markets. However, NAVs of such
funds are likely to be less volatile compared to pure equity funds.
Money Market or Liquid Fund:
These funds are also income funds and their aim is to provide easy liquidity, preservation
of capital and moderate income. These schemes invest exclusively in safer short-term
instruments such as treasury bills, certificates of deposit, commercial paper and inter-
bank call money, government securities, etc. Returns on these schemes fluctuate much
less compared to other funds. These funds are appropriate for corporate and individual
investors as a means to park their surplus funds for short periods.
Gilt Fund:
47
These funds invest exclusively in government securities. Government securities have no
default risk. NAVs of these schemes also fluctuate due to change in interest rates and
other economic factors as is the case with income or debt oriented schemes.
Sector specific funds/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 more risky compared to diversified funds. Investors need to
keep a watch on the performance of those sectors/industries and must exit at an
appropriate time. They may also seek advice of an expert.
Tax Saving Schemes:
These schemes offer tax rebates to the investors under specific provisions of the Income
Tax Act, 1961 as the Government offers tax incentives for investment in specified
avenues. e.g. Equity Linked Savings Schemes (ELSS). Pension schemes launched by the
mutual funds also offer tax benefits. These schemes are growth oriented and invest pre-
dominantly in equities. Their growth opportunities and risks associated are like any
equity-oriented scheme.
Assured return scheme:
Assured return schemes are those schemes that assure a specific return to the unitholders
irrespective of performance of the scheme.
A scheme cannot promise returns unless such returns are fully guaranteed by the sponsor
or AMC and this is required to be disclosed in the offer document.
Investors should carefully read the offer document whether return is assured for the entire
period of the scheme or only for a certain period. Some schemes assure returns one year
at a time and they review and change it at the beginning of the next year.
48
4.3 Advantages and drawback of mutual fund
Advantages of Mutual Funds:
Professional Management –
The primary advantage of funds (at least theoretically) is the professional management
of your money. Investors purchase funds because they do not have the time or the
expertise to manage their own portfolio. A mutual fund is a relatively inexpensive way
for a small investor to get a full-time manager to make and monitor investments.
Diversification –
By owning shares in a mutual fund instead of owning individual stocks or bonds, your
risk is spread out. The idea behind diversification is to invest in a large number of assets
so that a loss in any particular investment is minimized by gains in others. In other words,
the more stocks and bonds you own, the less any one of them can hurt you (think about
Enron). Large mutual funds typically own hundreds of different stocks in many different
industries. It wouldn't be possible for an investor to build this kind of a portfolio with a
49
small amount of money.
Economies of Scale –
Because a mutual fund buys and sells large amounts of securities at a time, its
transaction costs are lower than you as an individual would pay.
Liquidity –
Just like an individual stock, a mutual fund allows you to request that your shares be
converted into cash at any time.
Simplicity –
Buying a mutual fund is easy! Pretty well any bank has its own line of mutual
funds, and the minimum investment is small. Most companies also have automatic
purchase plans whereby as little as $100 can be invested on a monthly basis.
Drawback of Mutual Funds:
Professional Management-
Did you notice how we qualified the advantage of professional management with the
word "theoretically"? Many investors debate over whether or not the so-called
professionals are any better than you or I at picking stocks. Management is by no means
infallible, and, even if the fund loses money, the manager still takes his/her cut. We'll talk
about this in detail in a later section.
Costs –
Mutual funds don't exist solely to make your life easier--all funds are in it for a profit.
The mutual fund industry is masterful at burying costs under layers of jargon. These costs
are so complicated that in this tutorial we have devoted an entire section to the subject.
Dilution –
50
It's possible to have too much diversification (this is explained in our article
entitled "Are You Over-Diversified?"). Because funds have small holdings in so many
different companies, high returns from a few investments often don't make much
difference on the overall return. Dilution is also the result of a successful fund getting too
big. When money pours into funds that have had strong success, the manager often has
trouble finding a good investment for all the new money.
Taxes –
When making decisions about your money, fund managers don't consider your personal
tax situation. For example, when a fund manager sells a security, a capital-gain tax is
triggered, which affects how profitable the individual is from the sale. It might have been
more advantageous for the individual to defer the capital gains liability.
To protect the interest of the investors, SEBI formulates policies and regulates the mutual
funds. It notified regulations in 1993 (fully revised in 1996) and issues guidelines from
time to time. MF either promoted by public or by private sector entities including one
promoted by foreign entities is governed by these Regulations.
SEBI approved Asset Management Company (AMC) manages the funds by making
investments in various types of securities. Custodian, registered with SEBI, holds the
securities of various schemes of the fund in its custody. The general power of
superintendence and direction over AMC is vested with the trustees.
According to SEBI Regulations, two thirds of the directors of Trustee Company or board
of trustees must be independent. They should not be associated with the sponsors. 50% of
the directors of AMC must be independent. All mutual funds are required to be registered
with SEBI before they launch any scheme.
51
Increase of load more than the level mentioned in the offer document is applicable only to
prospective investments by the MFs. For original investments, the offer document has to
be amended to make investors aware of loads at the time of investments.
With the increase in mutual fund players in India, a need for mutual fund association in
India was generated to function as a non-profit organization. Association of Mutual
Funds in India (AMFI) was incorporated on 22nd August, 1995.
AMFI is an apex body of all Asset Management Companies (AMC) which has been
registered with SEBI. Till date all the AMCs are that have launched mutual fund schemes
are its members. It functions under the supervision and guidelines of its Board of
Directors.
Association of Mutual Funds India has brought down the Indian Mutual Fund Industry to
a professional and healthy market with ethical lines enhancing and maintaining standards.
It follows the principle of both protecting and promoting the interests of mutual funds as
well as their unit holders.
The objectives of Association of Mutual Funds in India
The Association of Mutual Funds of India works with 30 registered AMCs of the country.
It has certain defined objectives which juxtaposes the guidelines of its Board of Directors.
The objectives are as follows:
• This mutual fund association of India maintains high professional and ethical standards
in all areas of operation of the industry.
• It also recommends and promotes the top class business practices and code of conduct
which is followed by members and related people engaged in the activities of mutual fund
and asset management. The agencies who are by any means connected or involved in the
field of capital markets and financial services also involved in this code of conduct of the
association.
• AMFI interacts with SEBI and works according to SEBIs guidelines in the mutual fund
industry.
• Association of Mutual Fund of India do represent the Government of India, the Reserve
Bank of India and other related bodies on matters relating to the Mutual Fund Industry.
• It develops a team of well qualified and trained Agent distributors. It implements a

programme of training and certification for all intermediaries and other engaged in the
mutual fund industry.
52
• AMFI undertakes all India awareness programme for investors in order to promote
proper understanding of the concept and working of mutual funds.
• At last but not the least association of mutual fund of India also disseminate
information’s on Mutual Fund Industry and undertakes studies and research either
directly or in association with other bodies.
The sponsorers of Association of Mutual Funds in India
Bank Sponsored
• SBI Fund Management Ltd.

• BOB Asset Management Co. Ltd.
• Canbank Investment Management Services Ltd.
• UTI Asset Management Company Pvt. Ltd.
Institutions
• GIC Asset Management Co. Ltd.

• Jeevan Bima Sahayog Asset Management Co. Ltd.
Private Sector
Indian:-
• Benchmark Asset Management Co. Pvt. Ltd.

• Cholamandalam Asset Management Co. Ltd.
53
• Credit Capital Asset Management Co. Ltd.
• Escorts Asset Management Ltd.
• JM Financial Mutual Fund
• Kotak Mahindra Asset Management Co. Ltd.
• Reliance Capital Asset Management Ltd.
• Sahara Asset Management Co. Pvt. Ltd
• Sundaram Asset Management Company Ltd.
• Tata Asset Management Private Ltd.
Predominantly India Joint Ventures:-
• Birla Sun Life Asset Management Co. Ltd.

• DSP Merrill Lynch Fund Managers Limited
• HDFC Asset Management Company Ltd.
Predominantly Foreign Joint Ventures:-
• ABN AMRO Asset Management (I) Ltd.

• Alliance Capital Asset Management (India) Pvt. Ltd.
• Deutsche Asset Management (India) Pvt. Ltd.
• Fidelity Fund Management Private Limited
• Franklin Templeton Asset Mgmt. (India) Pvt. Ltd.
• HSBC Asset Management (India) Private Ltd.
• ING Investment Management (India) Pvt. Ltd.
• Morgan Stanley Investment Management Pvt. Ltd.
• Principal Asset Management Co. Pvt. Ltd.
• Prudential ICICI Asset Management Co. Ltd.
• Standard Chartered Asset Mgmt Co. Pvt. Ltd
Let us start the discussion of the performance of mutual funds in India from the day the
concept of mutual fund took birth in India. The year was 1963. Unit Trust of India invited
investors or rather to those who believed in savings, to park their money in UTI Mutual
Fund.
For 30 years it goaled without a single second player. Though the 1988 year saw some
new mutual fund companies, but UTI remained in a monopoly position.
The performance of mutual funds in India in the initial phase was not even closer to
satisfactory level. People rarely understood, and of course investing was out of question.
But yes, some 24 million shareholders was accustomed with guaranteed high returns by
the begining of liberalization of the industry in 1992. This good record of UTI became
marketing tool for new entrants. The expectations of investors touched the sky in
profitability factor. However, people were miles away from the preparedness of risks
factor after the liberalization.
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The Assets under Management of UTI was Rs. 67bn. by the end of 1987. Let me
concentrate about the performance of mutual funds in India through figures. From Rs.
67bn. the Assets Under Management rose to Rs. 470 bn. in March 1993 and the figure
had a three times higher performance by April 2004. It rose as high as Rs. 1,540bn.
The net asset value (NAV) of mutual funds in India declined when stock prices started
falling in the year 1992. Those days, the market regulations did not allow portfolio shifts
into alternative investments. There were rather no choices apart from holding the cash or
to further continue investing in shares. One more thing to be noted, since only closed-end
funds were floated in the market, the investors disinvested by selling at a loss in the
secondary market.
The performance of mutual funds in India suffered qualitatively. The 1992 stock market
scandals, the losses by disinvestments and of course the lack of transparent rules in the
where about rocked confidence among the investors. Partly owing to a relatively weak
stock market performance, mutual funds have not yet recovered, with funds trading at an
average discount of 10¬20 percent of their net asset value.
The supervisory authority adopted a set of measures to create a transparent and

competitive environment in mutual funds. Some of them were like relaxing investment
restrictions into the market, introduction of open-ended funds, and paving the gateway for
mutual funds to launch pension schemes.
The measure was taken to make mutual funds the key instrument for long-term saving.
The more the variety offered, the quantitative will be investors.
Objectives of Association of Mutual Funds in India:
The Association of Mutual Funds of India works with 30 registered AMCs of the
country. It has certain defined objectives, which juxtaposes the guidelines of its Board of
Directors. The objectives are as follows:
 This mutual fund association of India maintains high professional and ethical
standards in all areas of operation of the industry. It also recommends and
promotes the top class business practices and code of conduct which is followed
by members and related people engaged in the activities of mutual fund and asset
management. The agencies that are by any means connected or involved. In the
field of capital markets and financial services also involved in this code of
conduct of the association.
 AMFI interacts with SEBI and works according to SEBIs guidelines in the mutual
fund Industry.
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 Association of Mutual Fund in India does represent the Government of India, the
Reserve Bank of India and other related bodies on matters relating to the Mutual
Fund Industry.
 It develops a team of well qualified and trained Agent distributors. It implements

a program of training and certification for all intermediaries and other engaged in
the mutual fund industry.
 AMFI undertakes all India awareness programmed for investor’s in order to

promote proper understanding of the concepts and working of mutual funds.
 At last but not the least association of mutual fund of India also disseminate
information’s on Mutual Fund Industry and undertakes studies and research either
directly or in association with other bodies.
Regulatory Aspects:
Schemes of mutual funds:
• The Asset management company shall launch no schemes unless the trustees
approve such scheme and a copy of the offer has been filed with the Board.
• Every mutual fund shall along with the offer documents of each scheme pay filing
fees.
• The offer document shall contain disclosures which are adequate in order to
enable the investors to make informed investment decision including the
disclosure non maximum investments proposed to be made by the scheme in the
listed securities of the group companies of the sponsor. A close-ended scheme
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shall be fully redeemed at the end of the maturity period. “Unless a majority of the
unit holders otherwise decide for its rollover by passing a resolution”.
• The mutual fund and asset management company shall be liable to refund the
application money to the applicants:-
• If the mutual fund fails to receive the minimum subscription amount referred to in
clause (i) of sub- regulation.
• If the moneys received from the applicants for units are in excess of subscription
as referred to in clause (ii) of sub-regulation.
The asset management company shall issue to the applicant whose:
 Application has been accepted, unit certificates or a statement of accounts

 Specifying the number of units allotted to the applicant as soon as possible
 But not later than six weeks from the date of closure of the initial
 Subscription list and or from the date of receipt of the request from the unit
 Holders in any open ended scheme.
Rules Regarding Advertisement:
The offer document and advertisement materials shall not be misleading or contain any
statement or opinion, which are incorrect or false.
Investment objectives and valuation policies:
57
The price at which the units may be subscribed or sold the price at which such unit may at
any time be repurchased by the mutual fund shall be made available to the investors.
General Obligation:
 Every asset management company for each scheme shall keep and maintain
proper book of accounts, records and document, for each scheme so as to explain
its transaction and to disclose at any point of time the financial position of each
scheme and in particular give a true and fair view of the state of affairs of the fund
and intimate to the board the place where such books of accounts, records and
documents are maintained.
 The financial year for all the scheme shall end as of March 31 of each year. Every
mutual fund or the asset management company shall prepare in respect of each
financial year an annual report and annual statement of accounts of the schemes
and the fund as specified in Eleventh Schedule.
 Every mutual fund shall have the annual statement of accounts audited by an
auditor who is not in any way associated with the auditor of the asset management
company.
Procedure for Action In Case Of Default:
On and from the date of the suspension of the certificate or the approval, as the
case may be, the mutual fund, trustees or asset management company, during the period
of suspension and shall be subject to the direction of the Board with regard to any
records, documents, or securities that may be in its custody or control relating to its
activities as mutual funds, trustees or the asset management company.
Restrictions on Investments:
• A mutual fund scheme shall not invest more than 15% of its NAV in debt
instrument issued by a single issuer, which are rated not below investment grade
by a credit rating agency authorize to carry out such activity under the act. Such
58
investment limit may be extended to 20% of the NAV of the scheme with the
prior approval of the Board of Trustees and the Board of Asset Management
Company.
• A mutual fund Scheme shall not invest more than 10% of its NAV in unrated debt
instrument issued by a single issuer and the total investment in such instruments
shall not exceed 25% of the NAV of the Board of Trustees and the Board of Asset
management.
• No mutual funds under all its schemes should own more than 10% of any
company’s paid up capital carrying voting rights.
• Such transfers are done at the prevailing market price for quoted instrument on
spot basis.
• The securities so transferred shall be in conformity with the investment objectives

of the scheme to which such transfer has been made.
• A scheme may invest in another scheme under the same asset management
company or any other mutual fund without charging any fees, provided that
aggregated intercourse inter scheme investment made by all schemes under the
same management or in schemes under the management of any other asset
management company shall not exceed 5% of the net asset value of the mutual
fund.
The initial issue expenses in respect of any scheme may not exceed 6% of the funds
raised under that scheme.
• Every mutual fund shall buy and sell securities on the basis of deliveries and shall
in all cases of purchases, take delivery of relative securities and in all cases of
sale, deliver the securities and shall in no case put itself in a position whereby it
has to make short sale or carry forward transaction or engage in Badla finance.
• Every mutual fund shall get the securities purchased or transferred in the name of
the mutual fund on account of the concerned scheme, wherever investments are
intended to be of long-term nature.
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• Pending deployment of funds of a scheme a mutual fund can invest the funds of
the scheme in short term deposits of scheduled commercial banks.
• No mutual fund scheme shall make any investment in;
 Any unlisted security of an associate or group company of the sponsor or
 Any security issued by way of private placement by an associate or group

company of the sponsor.
 The listed securities of group companies of the sponsor which is in excess

of 30% of the net assets (of all the schemes of a mutual fund)
 No mutual fund scheme shall invest more than 105 of its NAV in the
equity shares or equity related instrument of any company. Provided that,
the limit of 10 percent shall not be applicable for investments in index
fund or sector or industry specific schemes.
 A Mutual fund scheme shall not invest more than 5% of its NAV in the
equity shares or equity related investments in case of open-ended schemes
and 10 % of its NAV in case of close ended schemes.
Some facts for the growth of mutual funds in India:
 100% growth in the last 6 years.
 Number of foreign AMC’s is in the queue to enter the Indian markets like Fidelity
Investments, US based, with over US$1trillion assets under management
worldwide.
 Our saving rate is over 23%, highest in the world. Only channelizing these
savings in mutual funds sector is required.
 We have approximately 29 mutual funds which is much less than US having more
than 800. There is a big scope for expansion.
60
 'B' and 'C' class cities are growing rapidly. Today most of the mutual funds are
concentrating on the 'A' class cities. Soon they will find scope in the growing
cities.
 Mutual fund can penetrate rural like the Indian insurance industry with simple and
limited products.
 SEBI allowing the MF's to launch commodity mutual funds.
CHAPTER-5: Problem Statement
Problem Statement:
Due to the falling Rate of Interest on Bank deposits, it is obvious that Investment in
Mutual Fund will grow in year to come. However lack of knowledge of Mutual Funds is
a hindering factor in expected growth of Mutual Funds Business. Under noted problems
are envisaged in this area
• Difficult in convincing people for investment.
• Difficult to change mind of the investor according to age and
61
Profession.
• Difficult to make an approach to investors.
• Difficult to take an appointment with professional people.

• Difficult to get the documents required for formalities from investors
• Difficult to overcome an impassionate person who wants return in less time.
• Difficult to follow up the people whose names are being stored in a data.
• Difficult to remove the fear of risk from the minds of investors.
• Difficult to understand them to invest this fund which is good for them.
• Difficult to solve their quires.
CHAPTER-6: Project Finding
Project Finding:
 There is a great potential for investment in Mutual Funds as people wants to save
for various future obligation.
 Since Rate of Interest on Bank deposit is falling people will be attracted towards
investments in Mutual Funds because of high rate of returns.
62
 Comparatively people of small towns are less aware of other investment avenues
viz Mutual Fund.
 People of young age group are ready to take risk and they can be targeted for
investment in Mutual Fund.
 Advertising can also play a major part as it has been seen that people buy mutual
fund looking at the brand name.
Recommendation:
• India is passing through a tremendous growth phase with an average growth rate
of 7-8% per annum. With this growth phase there is growth in each and every
sector, hence there is rush to by shares and equities. It is also a very good time for
mutual fund companies but it is advisable for them and their brokers that they
don’t just sell mutual funds but sell the right kind of scheme which is comfortable
to a person nature of taking risk and need,
• There is a general ignorance and questions about, what are mutual funds? What
are different schemes of mutual funds? How to invest in a mutual? And many
more. This thing should be handled by mutual fund companies and their brokers
to provide knowledge to their clients.
63
• It has been seen that there is a major increase in the percentage of young investors
who have large amount of disposable income with them and want to invest, these
types of prospective clients should be tapped at an early stage.
• Small towns, villages are still untapped and can also acts as an business area of
very huge potential.
• Now even co-operative society can invest up to 10% of their capital in mutual
funds which open the door to new and very important client base.
BIBLIOGRAPHY & REFERENCES

Web sites:
• www.principalindia.com
• www.moneycontrol.com
• www.amfi.com
• www.indiainfoline.com
• www.valueresearchonline.com
• www.sharekhan.com
• www.sebi.in.gov
• www.bseindia.com
• www.birlasunlife.com
• www.icicidirect.com
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BOOKS:
• AMFI ADVISORS MODULE
65

Birla Sun Life MF Project by Himanshu Sahu PGDFS

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A PROJECT REPORT ON

Acquisition of Individual Financial Adviser (IFA)

Himanshu Sekhar Sahu

SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR

DIPLOMA IN FINANCIAL SERVICES

UNDER THE GUIDANCE OF

Mr. Prasad V. Bhat

SINHGAD BUSINESS SCHOOL, PUNE CITY

Submitted in partial fulfillment of the requirement for the award of diploma

To University of Pune, India, is my original work.

Signature of the student

Mr. Himanshu Sekhar Sahu

Is approved and is acceptable in quality and form.

Internal Examiner External Examiner

Signature: __________ Signature: __________

Name: ________________ Name: ________________

This is to certify that the project report entitled

Submitted in partial fulfillment of the requirement for the award of diploma

Himanshu Sekhar Sahu

Guide’s name & signature

If words are considered symbol and tokens of acknowledgements then

Also my sincere thanks to the faculty Mrs.Charusila Mantri who has

Everlasting thanks to God and my Parents whose blessing made my effort

CHAPTER-1: 1.1 Company profile

CHAPTER-2: 2.1 About IFA

CHAPTER-3: 3.1 Introductions

CHAPTER-4: MUTUAL FUND

CHAPTER-5: Problem Statement

CHAPTER-6: Project Finding

Bibliography & Reference

1.1 Company profile:

BSL-AMC follows a long-term, fundamental research based approach to investment. The

Sun Life Financial Inc. is a leading financial services organization headquartered in

To consistently pursue investor's wealth optimization by:

Achieving superior and consistent investment results.

Creating a conducive environment to hone and retain talent.

Providing customer delight.

Institutionalizing systems-approach in all aspects of functioning.

Upholding highest standards of ethical values at all times.

Sun Life Financial Inc.

Sun Life Financial is a leading international financial services organization providing a

Fund Organization and Management

The Trustee Company

In Indian Rupees (Lakhs)

Financial Summary of Sun Life Financial Inc.

Obligations of the Asset Management Company:

1.2 Industry profile:

Mutual fund set up:

Evolution of Mutual Fund in India

First Phase - 1964-87

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

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

Fourth Phase - since February 2003

Growth in Assets Under Management

Fund Investors Expectation

Tax relief 96’ 3 year locking

Equity Fund 2 to 3 years

Income Plus 2 to 3 years

THE RISK RETURN GRAPHS FOR VARIOUS FUNDS

“THE MUTUAL FUND HOUSE OF THE YEAR”

Mutual Fund of the Year

Lipper Fund Awards 2008

Birla Gilt Plus-Regular Birla Sun Life '95 Fund-

Signature: Signature:

Name: Name: