ACKNOWLEDGEMENT

The completion of any task depends upon the co-operation, coordination

and consolidated efforts of several resources of knowledge, energy, time
and above all the proper guidance of the experienced. Therefore I
approached this matter of acknowledgement through these lines trying
my best to give full credit where it deserves.

I wish to express my gratitude to those who generously helped me to

compile this project with their knowledge and expertise. Firstly, I owe a
great debt to ……………., Chief Manager UTI Mutual Fund. Who were
responsible for making this project possible.

They have given me the opportunity to choose this topic and the
necessary guidelines regarding the project to track first hand information
and supporting me in the completion of the project successfully, as well
as insulating a belief in me which was essential for the completion of this
project. The learning during the project was of immense importance &
invaluable.
 INDEX

Sr. No. Subject Page No.

1. Executive Summary 5
2. UTI MF- An Introduction 6
3. Subsidiaries 7
4. Mutual Fund Assets Type 8
5. Vision and Mission 9
6. History 9
7. Mutual Fund- An Introduction 18
8. Corporate Profile 20
9. Rights of Unit holder 24
10. Organizational structure of MF 25
11. Awards 27
12. Different Investment Plan 28
13. Types of Mutual Fund 29
14. Products of UTI 34
15. SIP Returns 42
16. Key Terms 47
17. Area of Study 48
18. Consumer Buying Behaviour- An Introduction 56
19. Research Methodology 61
20. Data Analyses and Interpretation 65
21. Key Findings 73
22. Conclusion 74
23. Learning 75
24. Recommendations 75
25. Questionnaire 77
 Executive Summary

UTI Mutual Fund is among one of the largest financial Institution. It is

doing its business by continuously delivering a differentiated product and
services that provide high business value in return.

The main objectives are

• To know the awareness of mutual fund amongst the investor

• To know the investors knowledge and perceptions about mutual
fund.
• To know the investor priority level between different criteria of
investment like safety level, returns, liquidity, tax benefits and
maturity etc. of investment.
• Find out reason for choice of mutual fund as an investment avenue.

Savings form an important part of the economy of any nation. With

savings invested in various Assets available to the people like Gold, Debt
market, Insurance, Mutual funds, Equity, Bank deposit etc the money acts
as the driver for growth of the country. Indian financial sector avails
multiple avenues to the investors. A basic principle of investing is that the
investment avenue must match the investor's risk profile. Young investors
have an edge over others on account of their age. In other words, a
young age investor has a big ratio of disposable income. Now, India is
seen as one of the best and deepest of markets in the world. It has huge
potential growth rate in mutual fund and different financial instruments to
provide reasonable options for an ordinary man to invest his savings and
diversify the risk.

This report will seek to cover all the fundamental aspects relating to
various investments Asset classes which are available for the investors in
India. This report will also tell us the customer perception about different
investment instruments which are available. In this report, Researcher
comparing the various investment options with their growth, returns,
risks etc.

UTI Mutual Fund- An Introduction

UTI AMC is one of the best Asset Management Company in India.

Recently, Mr. U. K. Sinha has awarded as a best CEO of the year 2009
and Mr. Jaideep Bhattacharya has awarded as best Marketing Personality
of the year 2009.

UTI AMC is a company incorporated under companies act 1956.

In UTI AMC the investment agreement is executed between UTI Trustee
Company Ltd and UTI AMC on December 9 2002 UTI AMC was registered
by SEBI to act as Asset Management Company for UTI Mutual Fund vide
its letter of January 2003.

The paid up capital of UTI AMC has been subscribed equally by four
sponsors: State Bank of India, Life Insurance Corporation of India, Bank
of Baroda and Punjab National Bank. UTIAMC, apart from managing the
schemes of UTI Mutual Fund, also manages the schemes
transferred/migrated from the erstwhile Unit Trust of India, in accordance
with the provisions of the Investment Management Agreement, the Trust
Deed, and the SEBI (Mutual Funds) Regulations.
Current AUM of UTI Mutual Fund is Rs.78, 617 Crores* as on 31st
May 2010 (source: http://www.amfiindia.com/)
Subsidiaries

UTI Venture

UTI Venture is leading private equity firm. Focused on growth capital,

they propel the ambitions of passionate Indian entrepreneurs, while
unlocking superior returns for our investors. Our demonstrated track
record of successful investments, led by an experienced management
team, positions our funds among top performers in India.

UTI International Ltd

UTI International Ltd (UTI IL) is a 100% subsidiary of UTI Asset

Management Company Ltd. (UTI AMC). UTI AMC is the largest retail
Asset Management Company in India with more than 9 million
investor accounts and Assets under Management of close to US$
9.5bn (September 30, 2008). UTI International Ltd. is responsible for
all international business activities of UTI AMC. The Assets under
Management (AUM) of UTI International Ltd stands at USD 615 mn as on
September 30, 2008.

UTI RSL (Retirement Solutions Limited)

UTI RSL has been set up to carry out the operations as Pension Fund as
directed by the Board of Trustees of the New Pension System Trust, set
up under the Indian Trust Act, 1882, and to undertake wholesale asset
management as prescribed by the Government.

Worldwide Mutual Fund Assets by type of fund:

If we see the worldwide Mutual fund Assets by the type of fund for the
third quarter in 2008, then it is seen that the major investments were in
equities i.e. 40% of the total investments.

Source: Investment Company Institute

Worldwide Mutual Fund Assets by Region:

By region, 55 percent of worldwide assets were in the Americas in the

third quarter of 2008, 34 percent were in Europe and 11 percent in Africa
and Asia/Pacific.
Vision:

“To be the most preferred Mutual Fund.”

Mission:

 The most trusted brand, admired by all stakeholders

 The largest and most efficient money manager with global presence
 The best in class customer service provider
 The most preferred employer
 The most innovative and best wealth creator
 A socially responsible organisation known for best corporate
governance

History:

The formation of Unit Trust of India marked the evolution of the

Indian mutual fund industry in the year 1963. The primary objective at
that time was to attract the small investors and it was made possible
through the collective efforts of the Government of India and the Reserve
Bank of India. Unit Trust of India enjoyed complete monopoly when it
was established in the year 1963 by an act of Parliament. UTI was set up
by the Reserve Bank of India and it continued to operate under the
regulatory control of the RBI until the two were de-linked in 1978 and the
entire control was transferred in the hands of Industrial Development
Bank of India (IDBI). UTI launched its first scheme in 1964, named as
Unit Scheme 1964 (US-64), which attracted the largest number of
investors in any single investment scheme over the years.

The history of mutual fund industry in India can be better understood

divided into following phases:
Phase 1. Establishment and Growth of Unit Trust of India - 1964-
87
Unit Trust of India enjoyed complete monopoly when it was established in
the year 1963 by an act of Parliament. UTI was set up by the Reserve
Bank of India and it continued to operate under the regulatory control of
the RBI until the two were de-linked in 1978 and the entire control was
transferred in the hands of Industrial Development Bank of India (IDBI).
UTI launched its first scheme in 1964, named as Unit Scheme 1964 (US-
64), which attracted the largest number of investors in any single
investment scheme over the years.

UTI launched more innovative schemes in 1970s and 80s to suit the
needs of different investors. It launched ULIP in 1971, six more schemes
between 1981-84, Children's Gift Growth Fund and India Fund (India's
first offshore fund) in 1986, Mastershare (India’s first equity diversified
scheme) in 1987 and Monthly Income Schemes (offering assured returns)
during 1990s. By the end of 1987, UTI's assets under management grew
ten times to Rs 6700 crores.

Phase II. Entry of Public Sector Funds - 1987-1993

The Indian mutual fund industry witnessed a number of public sector
players entering the market in the year 1987. In November 1987, SBI
Mutual Fund from the State Bank of India became the first non-UTI
mutual fund in India. SBI Mutual Fund was later followed by Canbank
Mutual Fund, LIC Mutual Fund, Indian Bank Mutual Fund, Bank of India
Mutual Fund, GIC Mutual Fund and PNB Mutual Fund. By 1993, the assets
under management of the industry increased seven times to Rs. 47,004
crores. However, UTI remained to be the leader with about 80% market
share.
 Assets Under Mobilisation as % of
1992-93 Amount Mobilised
Management gross Domestic Savings

UTI 11,057 38,247 5.2%

Public Sector 1,964 8,757 0.9%

Total 13,021 47,004 6.1%

Phase III. Emergence of Private Sector Funds - 1993-96

The permission given to private sector funds including foreign fund
management companies (most of them entering through joint ventures
with Indian promoters) to enter the mutual fund industry in 1993,
provided a wide range of choice to investors and more competition in the
industry. Private funds introduced innovative products, investment
techniques and investor-servicing technology. By 1994-95, about 11
private sector funds had launched their schemes.

Phase IV. Growth and SEBI Regulation - 1996-2004

The mutual fund industry witnessed robust growth and stricter regulation
from the SEBI after the year 1996. The mobilisation of funds and the
number of players operating in the industry reached new heights as
investors started showing more interest in mutual funds.

Investors' interests were safeguarded by SEBI and the Government

offered tax benefits to the investors in order to encourage them. SEBI
(Mutual Funds) Regulations, 1996 was introduced by SEBI that set
uniform standards for all mutual funds in India. The Union Budget in 1999
exempted all dividend incomes in the hands of investors from income tax.
Various Investor Awareness Programmes were launched during this
phase, both by SEBI and AMFI, with an objective to educate investors and
make them informed about the mutual fund industry.
In February 2003, the UTI Act was repealed and UTI was stripped of its
Special legal status as a trust formed by an Act of Parliament. The
primary objective behind this was to bring all mutual fund players on the
same level. UTI was re-organised into two parts:
1. The Specified Undertaking,
2. The UTI Mutual Fund Presently Unit Trust of India operates under the
name of UTI Mutual Fund and its past schemes (like US-64, Assured
Return Schemes) are being gradually wound up. However, UTI Mutual
Fund is still the largest player in the industry. In 1999, there was a
significant growth in mobilisation of funds from investors and assets
under management which is supported by the following data:

GROSS FUND MOBILISATION (RS. CRORES)

PUBLIC PRIVATE
FROM TO UTI TOTAL
SECTOR SECTOR

01-April-98 31-March-99 11,679 1,732 7,966 21,377

01-April-99 31-March-00 13,536 4,039 42,173 59,748

01-April-00 31-March-01 12,413 6,192 74,352 92,957

01-April-01 31-March-02 4,643 13,613 1,46,267 1,64,523

01-April-02 31-Jan-03 5,505 22,923 2,20,551 2,48,979

01-Feb.-03 31-March-03 * 7,259* 58,435 65,694

01-April-03 31-March-04 - 68,558 5,21,632 5,90,190

01-April-04 31-March-05 - 1,03,246 7,36,416 8,39,662

01-April-05 31-March-06 - 1,83,446 9,14,712 10,98,158

ASSETS UNDER MANAGEMENT (RS. CRORES)

PUBLIC PRIVATE
AS ON UTI TOTAL
SECTOR SECTOR
 31-March-99 53,320 8,292 6,860 68,472

Phase V. Growth and Consolidation - 2004 Onwards

The industry has also witnessed several mergers and acquisitions
recently, examples of which are acquisition of schemes of Alliance Mutual
Fund by Birla Sun Life, Sun F&C Mutual Fund and PNB Mutual Fund by
Principal Mutual Fund. Simultaneously, more international mutual fund
players have entered India like Fidelity, Franklin Templeton Mutual Fund
etc. There were 29 funds as at the end of March 2006. This is a
continuing phase of growth of the industry through consolidation and
entry of new international and private sector players.
 I) GLOBAL SCENARIO

Some basic facts:

In US, every third household is a mutual fund investor.

In US, the MF Industry size is about 67% of the US GDP whereas the
Indian MF Industry is just 6% of our GDP.

In US, MF assets are 1.5 times the bank deposit.

In India the bank deposits are about 10.50 times the MF assets.

In India for the past 3 years it has been seen that nearly 2,500 crore is
being transferred from bank deposits to Mutual funds on a yearly basis.

75% of the core customer bases of mutual funds in the top 50-broking
firms in the U.S. are expected to trade on-line by 2004.

On- line trading is a great idea to reduce management expenses from the
current 2 % of total assets to about 0.75 % of the total assets and as we
start using advanced technology in this industry this cost will further cut
down the administration cost.

Internationally, on-line investing continues its meteoric rise. Many have

debated about the success of e- commerce and its breakthroughs, but it
is true that this aspect of technology could and will change the way
financial sectors function. However, mutual funds cannot be left far
behind. They have realized the potential of the Internet and are equipping
themselves to perform better.

In fact in advanced countries like the U.S.A, mutual funds buy- sell
transactions have already begun on the net, while in India the Net is used
as a source of Information and also net is used for transaction purpose is
on the initial stage but is catching up quickly with all dealing in this
industry as it helps in reducing administrative cost.
Such changes could facilitate easy access, lower intermediation costs and
better services for all. A research agency that specializes in internet
technology estimates that over the next four years Mutual Fund Assets
traded on- line will grow ten folds from $ 128 billion to $ 1,227 billion;
whereas equity assets traded on-line will increase during the period from
$ 246 billion to $ 1,561 billion. This will increase the share of mutual
funds from 34% to 40% during the period.

Such increases in volumes are expected to bring about large changes in

the way Mutual Funds conduct their business.

Here are some of the basic changes that have taken place since the
advent of the Net.

Lower Costs: Distribution of funds will fall in the online trading regime
by 2003. Mutual funds could bring down their administrative costs to
0.75% if trading is done on- line. As per SEBI regulations, bond funds can
charge a maximum of 2.25% and equity funds can charge 2.5% as
administrative fees. Therefore if the administrative costs are low, the
benefits are passed down and hence Mutual Funds are able to attract
more investors and increase their asset base.

Better advice: Mutual funds could provide better advice to their

investors through the Net rather than through the traditional investment
routes where there is an additional channel to deal with the Brokers.
Direct dealing with the fund could help the investor with their financial
planning.

In India, brokers could get more Net savvy than investors and could help
the investors with the knowledge through get from the Net.

New investors would prefer online: Mutual funds can target investors who
are young individuals and who are Net savvy, since servicing them would
be easier on the Net.
India has around 1.6 million net users who are prime target for these
funds and this could just be the beginning. The Internet users are going
to increase dramatically and mutual funds are going to be the best
beneficiary. With smaller administrative costs more funds would be
mobilized .A fund manager must be ready to tackle the volatility and will
have to maintain sufficient amount of investments which are high liquidity
and low yielding investments to honour redemption.

Net based advertisements: There will be more sites involved in ads and
promotion of mutual funds. In the U.S. sites like AOL offer detailed
research and financial details about the functioning of different funds and
their performance statistics a is witnessing a genesis in this area.

Future Scenario:

The asset base will continue to grow at an annual rate of about 30 to 35

% over the next few years as investor’s shift their assets from banks and
other traditional avenues. Some of the older public and private sector
players will either close shop or be taken over.

Out of ten public sector players five will sell out, close down or merge
with stronger players in three to four years. In the private sector this
trend has already started with two mergers and one takeover. Here too
some of them will down their shutters in the near future to come.

But this does not mean there is no room for other players. The market
will witness a flurry of new players entering the arena. There will be a
large number of offers from various asset management companies in the
time to come. Some big names like Fidelity, Principal, Old Mutual etc. are
looking at Indian market seriously. One important reason for it is that
most major players already have presence here and hence these big
names would hardly like to get left behind.
In the U.S. most mutual funds concentrate only on financial funds like
equity and debt. Some like real estate funds and commodity funds also
take an exposure to physical assets. The latter type of funds are preferred
by Corporate’s who want to hedge their exposure to the commodities they
deal with.

For instance, a cable manufacturer who needs 100 tons of Copper in the
month of January could buy an equivalent amount of copper by investing
in a copper fund. For Example, Permanent Portfolio Fund, a conservative
U.S. based fund invests a fixed percentage of it’s corpus in Gold, Silver,
Swiss francs, specific stocks on various bourses around the world, short –
term and long-term U.S. treasuries etc.

In U.S.A. apart from bullion funds there are copper funds, precious metal
funds and real estate funds (investing in real estate and other related
assets as well.).In India, the Canada based Dundee mutual fund is
planning to launch gold and a real estate fund before the year-end.

In developed countries like the U.S.A there are funds to satisfy

everybody’s requirement, but in India only the tip of the iceberg has been
explored. In the near future India too will concentrate on financial as well
as physical funds.

The mutual fund industry is awaiting the introduction of DERIVATIVES in

the country as this would enable it to hedge its risk and this in turn would
be reflected in its Net Asset Value (NAV).

SEBI is working out the norms for enabling the existing mutual fund
schemes to trade in Derivatives. Importantly, many market players have
called on the Regulator to initiate the process immediately, so that the
mutual funds can implement the changes that are required to trade in
Derivatives.
Assets Under Management:

UTIAMC presently manages a corpus of over Rs.78, 617 Crores* as

on 31st May 2010. UTI Mutual Fund has a track record of managing a
variety of schemes catering to the needs of every class of citizens. It has
a nationwide network consisting 143 UTI Financial Centres (UFCs) and
UTI International offices in London, Dubai and Bahrain.

(Source: http://www.amfiindia.com/)

Mutual Fund- An Introduction

Securities Exchange Board of India (SEBI) is the regulatory body for all
the mutual funds. All the mutual funds must get registered with SEBI.
A mutual fund is a professionally managed type of collective investment
scheme that pools money from many investors and invests it
in stocks, bonds, short-term money market instruments, and/or
other securities. The mutual fund will have a fund
manager that trades the pooled money on a regular basis. The net
proceeds or losses are then typically distributed to the investors annually.

Since 1940, there have been three basic types of investment

companies in the United States: open-end funds, also known in the U.S.
as mutual funds; unit investment trusts (UITs); and closed-end funds.
Similar funds also operate in Canada. However, in the rest of the
world, mutual fund is used as a generic term for various types of
collective investment vehicles, such as unit trusts, open-ended
investment companies (OEICs), unitized insurance funds, and
undertakings for collective investments in transferable securities (UCITS).

A mutual fund may be either an open-end or a closed-end fund.

An open-end mutual fund does not have a set number of shares; it may
be considered as a fluid capital stock. The number of shares changes as
investors buys or sell their shares. Investors are able to buy and sell their
shares of the company at any time for a market price. However the open-
end market price is influenced greatly by the fund managers. On the
other hand, closed-end mutual fund has a fixed number of shares and the
value of the shares fluctuates with the market. But with close-end funds,
the fund manager has less influence because the price of the underlining
owned securities has greater influence.

Mutual Fund Global Overview

Mutual fund assets worldwide decreased 12.1 percent to $21.66 trillion at

the end of the third quarter of 2008. Net cash flow to all funds was
negative in the third quarter with $218 billion in outflows, the first
worldwide outflow recorded since the third quarter of 2002. The decline in
assets reported in U.S. dollars was exacerbated by strengthening of the dollar.
Long-term funds had net outflows of $246 billion in the third quarter,
after registering net inflows of $73 billion in the second quarter. All
categories of long-term funds experienced outflows. Year-to-date, equity
funds have had $254 billion in outflows, bond funds have had $39 billion
in outflows, and balanced/mixed funds have had $24 billion in outflows.
Money market funds experienced net inflows of $28 billion in the third
quarter, compared with outflows of $70 billion in the second quarter of
2008. Year-to-date money market funds have had $444 billion of net
inflows. MFs records Rs. 83081 crore net inflow in FY 2009-10.

Investment Philosophy

UTI Mutual Fund’s investment philosophy is to deliver consistent and

stable returns in the medium to long term with a fairly lower volatility of
fund returns compared to the broad market. It believes in having a
balanced and well-diversified portfolio for all the funds and a rigorous in-
house research based approach to all its investments. It is committed to
adopt and maintain good fund management practices and a process
based investment management.

UTI Mutual Fund follows an investment approach of giving as equal an

importance to asset allocation and sartorial allocation, as is given to
security selection while managing any fund. It combines top-down and
bottom-up approaches to enable the portfolios/funds to adapt to different
market conditions so as to prevent missing an investment opportunity.

Corporate Profile:

UTI Mutual Fund has a track record of managing a variety of schemes

catering to the needs of every class of citizens. It has a nationwide
network consisting 114 UTI Financial Centers (UFCs) and UTI
International offices in London, Dubai and Bahrain. With a view to reach
to common investors at district level, 1 satellite office has also been
opened.

UTIAMC has a well-qualified, professional fund management team, which

has been fully empowered to manage funds with greater efficiency and
accountability in the sole interest of the unit holders. The fund managers
are ably supported by a strong in-house securities research department.
To ensure investors’ interests, a risk management department is also in
operation.
Benefits of investing in Mutual Funds:

There are several benefits from investing in a Mutual Fund:

 Small investments: Mutual funds help you to reap the benefit of

returns by a portfolio spread across a wide spectrum of companies
with small investments.

 Professional Fund Management: Professionals having

considerable expertise, experience and resources manage the pool
of money collected by a mutual fund. They thoroughly analyse the
markets and economy to pick good investment opportunities.

 Spreading Risk: An investor with limited funds might be able to

invest in only one or two stocks/bonds, thus increasing his or her
risk. However, a mutual fund will spread its risk by investing a
number of sound stocks or bonds. A fund normally invests in
companies across a wide range of industries, so the risk is
diversified.

 Transparency: Mutual Funds regularly provide investors with

information on the value of their investments. Mutual Funds also
provide complete portfolio disclosure of the investments made by
various schemes and also the proportion invested in each asset
type.

 Choice: The large amount of Mutual Funds offer the investor a wide
variety to choose from. An investor can pick up a scheme depending
upon his risk/ return profile.
  Regulations: All the mutual funds are registered with SEBI and
they function within the provisions of strict regulation designed to
protect the interests of the investor.

 Flexibility: Through features such as Systematic Investment Plans

(SIP), Systematic Withdrawal Plans (SWP) and dividend
reinvestment plans, you can systematically invest or withdraw funds
according to your needs and convenience.

 Return Potential: Over a medium to long term, Mutual Funds

have the potential to provide a higher return as they invest in a
diversified basket of selected securities.

 Diversification: Mutual Funds invest in a number of companies

across a broad cross section of industries and sectors. This
diversification reduces the risk because seldom do all stocks decline
at the same time and in the same proportion. You achieve this
diversification through a Mutual Fund with far less money than you
can do on your own.

Limitation of Mutual Fund:

 Entry and exit costs: Mutual Funds are a victim of their own
success. When a large body like a fund invests in shares, the
concentrated buying or selling often results in adverse price
movements i.e. at the time of buying, the fund ends up paying a
higher price and while selling it realizes a lower price. For obvious
reasons, this problem is even more severe for funds investing in
small capitalization stocks. However, given the large size of the
debt market, excluding UTI, most debt funds do not face this
problem.
 Waiting time before investment: It takes time for a Mutual
Fund to invest money. Since it is difficult to invest all funds in one
day, there is dome money waiting to be invested. Further, there
may be a time lag before investment opportunities are identified.
This ensures that the fund under performs the index. For open-
ended funds, there is the added problem of perpetually keeping
some money in liquid assets to meet redemption. The problem of
impracticability of quick investments is likely to be reduced to some
extent with the introduction of index futures.

 Fund management costs: The costs of the fund management

process are deducted from the fund. This includes marketing and
initial costs deducted at the time of entry itself, called “load”. Then
there is the annual asset management fee and expenses, together
called the expense ratio. Usually, the former is not counted while
measuring performance, while the later is. A standard 2% expense
ratio means that, everything else being equal, the Fund manager
under performs the benchmark index by an equal amount.

 Cost of churning: The portfolio of a fund does not remain

constant. The extent to which the portfolio changes is a function of
the style of the individual fund manager. It is also dependent on
the volatility of the fund size i.e. whether the fund constantly
receives fresh subscriptions and redemption. Such portfolio
changes have associated costs of brokerage, custody fees, and
registration fees etc. that lowers the portfolio return
commensurately.
  Change of index composition: The indices keep changing over
the world to reflect changing market conditions. There is an
inherent survivorship bias in this process, with the bad stocks
weeded out and replaced by emerging blue chips. This is a severe
problem in India with the Sensex having been changes twice in the
last five years, with each change being quite substantial. Another
reasons for change index composition is Mergers & Acquisitions. The
weight age of the shares of a particular company in the index
changes if it acquires a large company not a part of the index.

Rights of Unit holders:

As a unitholder in a Mutual Fund scheme coming under the SEBI (Mutual

Funds) Regulations, you are entitled to:

 Receive unit certificates or statements of accounts confirming your

title within 30 days from the date of closure of the subscription
under open-ended schemes or within 6 weeks from the date your
request for a unit certificate is received by the Mutual Fund.
 Receive information about the investment policies, investment
objectives, financial position and general affairs of the scheme.
 Receive dividend within 30 days of their declaration and receive the
redemption or repurchase proceeds within 10 working days from
the date of redemption or repurchase.
 Vote in accordance with the Regulations to:
 Change the Asset Management Company.
 Wind up the schemes.
 Receive communication from the Trustees about change in the
fundamental attributes of any scheme or any other changes which
would modify the scheme and affect the interest of the unitholders
 and to have option to exit at prevailing Net Asset Value without any
exit load in such cases.
 Inspect the documents of the Mutual Funds specified in the
scheme’s offer document.

In addition to your rights, you can expect the following from Mutual
Funds:
 To publish their NAV, in accordance with the regulations: daily, in
case of open-ended schemes and once a week, in case of close-
ended schemes.
 To disclose your schemes’ entire portfolio twice a year, unaudited
financial results half yearly and audited annual accounts once a
year. In addition many mutual funds send out newsletters
periodically.
 To adhere to a Code of Ethics which require that investment
decisions are taken in the best interest of the unitholders.
Organizational Structure of Mutual Fund Industry:

Unit
Holders

Sponsors

Trustees AMC

Mutual Fund Transfer Agent

Custodian

SEBI

Mutual fund is set up in the form of a trust, which has sponsor, trustees,
Asset Management Company (AMC) and a custodian.

The trust is established by a sponsor or more than one sponsor who is like
a promoter of a company. A mutual fund in India is constituted in the
form of a public Trust created under the Indian Trusts Act, 1882. The
sponsor forms the Trust and registers it with SEBI. The fund sponsor acts
as the settler of the Trust, contributing to its initial capital and appoints a
trustee to hold the assets of the Trust for the benefit of the unit – holders,
who are the beneficiaries of the Trust. The fund then invites investors to
contribute their money in the common pool, by subscribing to ‘units’
issued by various schemes established by the Trust as evidence of their
beneficial interest in the fund. Thus, a mutual fund is just a ‘pass through’
vehicle. Most of the funds in India are managed by the Board of Trustees,
which is an independent body and acts as protector of the unit – holders
interests. At least, 50 per cent of the trustees shall be independent
trustees (who are not associated with an associate, subsidiary, or sponsor
in any manner). The trustees shall be accountable for and be the
custodian of funds/property of respective scheme.
The trustees of the mutual fund hold its property for the benefit of the
unit-holders. The AMC, approved by SEBI, manages the funds by making
investments in various types of securities.

The 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.

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

Regulations, to have a sound track record, a reputation of fairness and
integrity in all his business transactions. Additionally, the sponsor should
contribute at least 40% to the net worth of the AMC. However, if any
person holds 40% or more of the net worth of an AMC shall be deemed to
be a sponsor and will be required to fulfil the eligibility criteria specified in
the Mutual Fund Regulations. The sponsor or any of its directors or the
principal officer employed by the mutual fund should not be guilty of
fraud, not be convicted of an offence involving moral turpitude or should
have not been found guilty of any economic offence.
Awards

UTI MF CNBC Award 2009.

UTI Mutual Fund sweeps ICRA mutual fund Award 2009.

UTI MF wins the Best Debt Fund House Award.

Golden Peacock Innovative Product/Service Award-2008.

Loyalty Awards – 2009.

Lipper Fund Awards09-UTI Mahila Unit-5 yrs.

Lipper Fund Awards09-UTI Mahila Unit-3 yrs.

Reader’s Digest Trusted Brand 2008.

Lipper Fund Awards - Gulf 2008.

Top Performing Infrastructure Fund - Income.

Brand loyalty Awards 2008.

Four ICRA 7 Star Gold Award.

Four ICRA 5 Star Award.

ICRA Mutual Fund Award 2007.

Lipper Fund Awards 2007.

CRISIL-CNBC-TV18-Mutual Fund of the year Award 2007.

ICRA Mutual Fund Award 2006.

Lipper Fund Awards.

CNBC-TV18-BNP Par-ibas Mutual Fund of the year Award 2006.

CNBC-TV18-BNP Par-ibas Mutual Fund of the year Award 2004

ICRA online Mutual Fund Award: UTI NIFTY INDEX FUND won the award
for the year 2004.

CNBC India Mutual Fund of the Year Award 2003.

UTI Nifty Index Fund wins Gold at ICRA Online 2005.

UTI Dynamic Equity Fund wins Silver at ICRA Online 2005.

UTI Growth Value Fund has been ranked by CRISIL 2004.

What are the different investment plans that Mutual

Funds offer?

The term ’investment plans’ generally refers to the services that the funds
provide to investors offering different ways to invest or reinvest. The
different investment plans are an important consideration in the
investment decision, because they determine the flexibility available to
the investor.

Some of the investment plans offered by mutual funds in India are:

Growth Plan and Dividend Plan

A growth plan is a plan under a scheme wherein the returns from
investments are reinvested and very few income distributions, if any, are
made. The investor thus only realizes capital appreciation on the
investment. Under the dividend plan, income is distributed from time to
time. This plan is ideal to those investors requiring regular income.

Dividend Reinvestment Plan

Dividend plans of schemes carry an additional option for reinvestment of
income distribution. This is referred to as the dividend reinvestment plan.
Under this plan, dividends declared by a fund are reinvested in the
scheme on behalf of the investor, thus increasing the number of units
held by the investors.

Types of Mutual Fund:

The objectives of Mutual Funds are to provide continues liquidity and

higher yields with high degree of safety to investor. Based on these
objectives, different types of Mutual Fund schemes have evolved.

Open Ended Schemes:

Open-ended schemes do not have a fixed maturity period. Investors can

buy or sell units at NAV-related prices from and to the mutual fund on
any business day. These schemes have unlimited capitalization, open-
ended schemes do not have a fixed maturity, there is no cap on the
amount investors can buy from the fund and the unit capital can keep
growing. These funds are not generally listed on any exchange.

Open-ended schemes are preferred for their liquidity. Such funds can
issue and redeem units any time during the life of a scheme. Hence, unit
capital of open-ended funds can fluctuate on a daily basis.

The advantages of open-ended funds over close-ended are as follows:

Any time exit option, the issuing company directly takes the responsibility
of providing an entry and an exit. This provides ready liquidity to the
investors and avoids reliance on transfer deeds, signature verifications
and bad deliveries. Any time entry option, an open-ended fund allows one
to enter the fund at any time and even to invest at regular intervals.
Close Ended Schemes:

Close-ended schemes have fixed maturity periods. Investors can buy into
these funds during the period when these funds are open in the initial
issue. After that such scheme cannot issue new units except in case of
bonus or rights issue. However, after the initial issue, investors can buy
or sell units of the scheme on the stock exchanges where they are listed.
The market price of the units could vary from the NAV of the scheme due
to demand and supply factors, investors’ expectations and other market
factors.

Interval Scheme:

Interval Scheme combines the features of open-ended and close-ended

schemes. They are open for sale or redemption during predetermined
intervals at NAV-related prices.

Portfolio Classification:

Income/ Debt Funds

These funds are low risk-low return funds, where in the investments are
made in income bearing instruments such as bonds, debentures,
government securities, commercial papers etc. The share prices of these
funds tend to be more stable in value and are best suitable for regular
income investment goals, provided minimum investment period is more
than one year. The leading examples are monthly income funds of UTI,
Prudential ICICI Income Plan, JM Income, Alliance Liquid Fund etc.

Growth/Equity Funds
These funds are high risk-high return funds, wherein major chunk of
investment goes in equity shares of companies. The NAV of such funds
keep fluctuating, but the potential to earn in such funds is higher provided
they are invested with long-term (more than 5 years) financial goals. The
leading examples of such funds are, Kothari Pioneer Prima Fund,
Prudential ICICI Equity Fund, Birla Sun Life Fund, etc.

Balanced Funds

These funds invest in both, equity shares and income bearing

instruments. The idea is to reduce volatility of fund, while providing some
upside for capital appreciation. In all, it is a combination of income and
growth funds more return – more risk than income funds and less return
– less risk than growth funds. They are best suited for people looking for
a combination for capital appreciation and regular income and best time –
span for such investments is more than 3 years. The examples are
PRUICICI Balanced Fund, IDBI-PRINCIPAL Balanced Fund, and IDBI-
PRINCIPAL Child Benefit Fund etc.

Money Market Mutual Funds

These funds invest in highly liquid instruments such as certificate of

deposits and short-term bonds. They have emerged as an alternative for
savings and short-term fixed deposit accounts. They are best suited for
capital preservation investment objectives, where time-span is least.
Geographical Classification

Domestic Funds

Funds which mobilize resources from a particular geographical locality like

a country or region are domestic funds. The market is limited and
confined to the boundaries of a nation in which the fund operates. They
can invest only in the securities which are issued and traded in the
domestic financial markets.

OTHER CLASSIFICATION

Sector Funds

Sector funds primarily invest in companies of a particular sector/ industry

such as information technology, pharmaceuticals, FMCGs etc. These
types of funds are subject to more risk as the performance of funds
depends on the performance of the industry as a whole and also because
the diversification of risk is reduced. Also with the new rule of
government not allowing investing more than 10% in a particular
company, is a big problem as the number of companies are not very large
and at the same time all of them are not very successful. It is best suited
to people willing to take high risk.

Tax Saving Funds (ELSS)

These funds offer tax rebate to the investor along wit capital growth and
steady returns. An Equity United Savings Scheme is available wherein
investments are made primarily in stocks. The investment can be made
any time, but it gets lock-in for a period of 3 years and in return tax
rebate @ 20% is obtained if investments exceed Rs.1, 00,000. Another
such scheme is pension scheme, wherein tax rebate @ 20% can be
obtained for investment up to Rs.60, 000.

Special Funds

Special purpose funds are those funds that target a specific customer
segments, such as children, women, retired people etc. Making their fund
oriented towards the need of the group they are targeting.

Gilt Funds

These funds are sort of government funds wherein the investments are
made in debt instruments of the government, which carry no risk of non-
payment of interest as the RBI manages the payment of interest and
principal on the instruments. These funds are best suited to the regular
income and long-term investment objectives. The time-span matters a
lot as there are chances of price volatility, which may lead to possibility of
loss of principal invested, if invested for short-term. Examples are
PRUICICI Gilt Fund, IDBI-PRINCIPAL Government Securities Fund etc.

Index Funds

Index funds invest only in stocks of a particular index such as BSE, S&P
CNX 500 etc. The principle is to duplicate performance of these widely
followed indexes while keeping trading and other costs to a minimum.
The returns in case of such funds depend on the index’s performance. It
is best suited to the investors who are satisfied with the returns of an
index.
Products of UTI AMC

Equity Fund Category

 Diversified Funds

UTI Master Share: An equity fund aiming to provide benefit of capital

appreciation and income distribution through investing in equity.

UTI Master Plus Unit Scheme: Capital appreciation through

investments in equities and equity related instruments, convertible
debentures, derivate in India and also in overseas markets.

UTI Equity Fund: It is open ended equity scheme with an objective of

investing at least 80% of its funds in equity and equity related instrument
with medium to high risk profile and upto 20% in debt and money market
instruments with low to medium risk profile.

UTI Contra Fund: To provide long term capital appreciation/ dividend

distribution through investments in listed equities & equity related
instruments. The fund offers an impact of non-rational investors that are
currently undervalued because of emotional & behavioural patterns
present in the stock market.

UTI Wealth Builder: The objective of the scheme is to achieve long

term investing predominantly in a diversified portfolio of equity related
instruments.

UTI Top 100: The fund aims to provide long term capital appreciation/
dividend predominantly in equity and equity related instruments of top
100 by market capitalisation.

 Speciality/ Theme Based Fund

UTI Infrastructure Fund: An open-ended equity fund with the objective
to provide capital appreciation through investing in the stocks of the
companies engaged in the sectors like Metals, Building materials, oil and
gas, power, chemicals, engineering etc. The fund will invest in the stocks
of the companies which from part of infrastructure industries.

UTI Dividend Yield Fund: An open-ended equity scheme. It aims to

provide medium to long term capital gains and/or dividend distribution by
investing predominantly in equity and equity related instruments, which
offer high dividend yield.

UTI Services Industries Fund: An open-ended fund which invests in

the equities of the services sector companies of the country. One of the
growth sector fund aiming to provide growth of capital over a period of
time as well as to make income distribution by investing the funds in
stocks of companies engaged in service sector such as banking, finance,
insurances, education, training, telecom, travel, entertainment etc.

UTI Master Value Fund: An open ended equity fund investing in stocks
which are currently undervalued to their future earning potential and
carry medium risk profile to provide Capital appreciation.

UTI Mid Cap Fund: An open ended fund with the objective to provide
‘Capital Appreciation’ by investing primarily in mid cap stocks.

UTI Leadership Equity Fund: The scheme seeks to generate capital

appreciation and/ or income distribution by investing the funds in stocks
that are ‘Leader” in their respective industries/ sectors/ sub sectors.

UTI MNC Fund: The investments of funds under the scheme will be
predominantly in stocks of multinational corporations and other Liquid
stocks.

UTI Opportunities Fund: The scheme seeks to generate capital

appreciation and/ or income distribution by investing the funds of the
scheme in the equity shares and equity related instruments. The focus of
the scheme is to capitalise on opportunities arising in the market by
responding to the dynamically changing Indian economy by moving its
investments amongst different sectors as prevailing trends change.

UTI Wealth Builder Fund Ser- II: To achieve long term capital
appreciation by investing predominantly in a diversified portfolio of equity
and equity related instruments along with investments in GOLD ETF’s and
Debt and Money Market Instruments.

 Sector Funds: These funds invest primarily in equity shares of

companies in a particular business sector or industry. These
funds are targeted at investors who are bullish or fancy the
prospects of a particular sector.

UTI Banking Sector Fund: open ended fund with the objective to
provide ‘Capital Appreciation through investment in stocks of companies/
institutions engaged in the banking and financial services activities.

UTI Energy Fund: Investment will be made in stocks of these companies

engaged in the following areas: .(a) Petro sector, (b) Power Generation
Companies, (c) Energy Storage Companies, (d) Companies which makes
parts for energy generation, (e) Consulting and Finance Companies.

UTI Pharma and Health Care Fund: An open-ended fund which

exclusively invest in the equities of the Pharma and Healthcare sector
companies.

UTI Transportation and Logistics Fund: An open-ended Equity fund

with the objective to provide Capital appreciation through investment in
the stocks of the companies engaged in the Transportation and Logistics
sector.
  Tax Planning Funds

UTI Equity Tax Saving Plan: An open ended fund investing a minimum
of 80% in equity and related instruments. It aims at enabling members to
avail tax rebate under section 80C of the IT act and provide them with the
benefit of growth.

UTI Spread Fund: The investment objective of the scheme is to provide

capital appreciation and dividend distribution through arbitrage
opportunities arising out of price differences between the cash and
derivative market by investing predominantly in equity and related
securities, derivatives and the balance portion in debt securities.

2. Index Fund Category: These funds invest in the same pattern as

popular market indices like S&P CNX Nifty or CNX Midcap 200. The
money collected from the investors is invested only in the stocks,
which represent the index.

UTI Master Index Fund: The principle investment objective of the

scheme is to invest in securities of companies comprising the SENSEX and
endeavour to achieve return equivalent to SENSEX by passive investment.

UTI Nifty Index Fund: The principle investment objective of the scheme
is to invest in stock of companies comprising the Nifty and endeavour to
achieve return equivalent to Nifty by passive investment.

UTI Sunder: Investment objective of the fund is to endeavour to provide

returns that, before expenses, closely track the performance and yield of
basket of securities underlying S&P CNX Nifty Index.

3. Asset Fund Category

UTI Variable Investment Scheme: This is an open-ended scheme
aiming to make dividend distribution periodically. The scheme will, as part
of the investment objective take a contrarian outlook on the equities.

4. Balanced Fund Category: These funds invest both in equity

shares and fixed-income-bearing instruments (debt) in some
proportion. They provide a steady return and reduce the volatility of
the fund while providing some upside for capital appreciation. They
are ideal for medium to long-term investors who are willing to take
moderate risks.

UTI Balanced Fund: The scheme aims to invest in a portfolio of

equity/equity related securities and fixed income securities with a view to
generating regular income together with capital appreciation.

UTI Unit linked Insurance Plan: Investment objectives of the scheme

are primarily to provide return through growth inters NAV or through
dividend distribution and reinvestment thereof.

UTI CRTS: Investment objectives of the scheme are the primarily provide
regular income to unit holders of the scheme.

UTI Children Career Balanced Plan: Funds collected under the plan will
be invested in equities, convertible and nonconvertible debentures/ bonds
of companies/ corporates etc. and others capital and money market
instrument subject to the condition that (1) non less than 60% of the
funds will be invested in debt instruments of law to medium profile having
a rating of A+ and above or equivalent at the time of investment and (2)
not more than 40% of the funds in equities and related instruments.

UTI Retirement Benefit Pension Plan: Investment objective and

policies of the scheme are primarily to provide pension in the form of
periodical income / cash flow to the unit holders to the extent of
redemption value of their holding after they complete 58 years of age.

UTI Mahila Unit Scheme: Investment objectives of the scheme is to

invest in portfolio of equity/ equity related securities and debt and money
market instrument with a view to generating reasonable income with
moderate capital appreciation.

UTI CCP Advantage Fund: Equity and related instruments minimum-

70% to 100%, debt and money market instruments including securitized
debt* minimum- 0% to maximum 30%* investment in securitized debt
will not normally exceed 20% of the net assets of the scheme.

UTI Monthly Income Scheme: An open-ended debt oriented scheme

with no assured returns. The scheme aims at distributing income, if any,
periodically.

UTI MIS Advantage Plan: The investment objective of the scheme is to

generate regular income through investment in fixed income securities
and capital appreciation/ dividend income through investment of a portion
of a net asset of the scheme in equity and related instruments so as to
endeavour to make periodic income distribution to unit holders.

5. Income Fund Category: These funds invest predominantly in

high-rated fixed-income-bearing instruments like bonds,
debentures, government securities, commercial paper and other
money market instruments. They are best suited for the medium to
long-term investors who are averse to risk and seek capital
preservation. They provide a regular income to the investor.

UTI Bond Fund: The scheme will retain the flexibility to invest in the
entire range of debt and money market instruments. The flexibility is
being retained to adjust the portfolio in response to a change in the risk
to return equation for asset classes under investment, with a view to
maintain risks within manageable risks limits.

UTI Treasury Advantage Fund: The scheme will endeavour to generate

an attractive return for its investors consistent with capital preservation
and liquidity by investing in a portfolio of quality debt securities, money
market instruments and structured obligations.

UTI G-Sec Investment Plan- STP: The investment objective of the

scheme is to generate credit risk- free return by way of income or growth
by investing in central Government securities, treasury bills, call money
and repos.

UTI Gilt Advantage Fund: To generate credit risk-free return through

investment in sovereign securities issued by the central Government
and/or a State Government and/or any security unconditionally
guaranteed by the central Government and/or a State government for
repayment of principle and interest.

UTI Short Term Income Fund: To Generate Steady and Reasonable

income, with low risk and high level of liquidity from a portfolio of money
market securities and high quality debt.

UTI Floating Rate Fund: The investment objective of the scheme is to

generate regular income though investment in a portfolio comprising
substantially a floating rate debt/ money market instruments, fixed rate
debt/ money market instrument swapped for floating rate returns.

UTI G-Sec STP: The investment objective of the scheme is to generate

credit risk-free return by way of income or growth by investing in Central
Government securities, treasury bills, call money and repos.

6. Liquid Fund Category: These funds invest in highly liquid money

market instruments. The period of investment could be as short as
a day. They provide easy liquidity. They have emerged as an
alternative for savings and short-term fixed deposit accounts with
 comparatively higher returns. These funds are ideal for corporate,
institutional investors and business houses that invest their funds
for very short periods.

UTI Money Market Fund: To provide highest possible current income

consistent with preservation of capital and providing liquidity from
investing in a diversified portfolio of short term money market securities.

UTI Liquid Fund Cash Plan: The investment objective of the scheme is
to generate steady and reasonable income, with low risk and high level of
liquidity from a portfolio of money market securities and high quality
debt.
SIP (Systematic Investment Plan):

SIP is an investment program that allows you to contribute a fixed

amount (as low as Rs.1000) in mutual funds at regular intervals.

Build your future: To meet largest expenses of your life like marriages,
education or a house you need to start investing early. Save a small
amount every month/quarter and look forward to a bright future.

Relax and accumulate wealth: With SIP you don’t require investing a
huge sum of money and start with an amount as little as Rs. 500. You can
accumulate wealth over long-term.

Reduce risk: For efficient participation in this highly volatile market,

SIP helps you average out your cost by generating superior returns in the
long run. It reduces risk associated with lump sum investments.

Enjoy the ease: Set yourself free from cumbersome paperwork. Just
identify the amount and scheme you wish to invest in and then choose
from options like Auto Debit/ECS. The amount will automatically get
debited on a date of your choice. You can also give monthly/quarterly
post-dated cheques for the amount you wish to invest.
SIP Returns of two months:

 SIP return for April:

1 yr. 3 yr 5 yr
Investment
Scheme Name 12000 36000 60000
Amount
Diversified
Investment
UTI Opportunities 14588 51520
Value
Fund
Yield (%) 42.39% 24.73%

Investment
UTI Master Value 16638 54361 97546
Value
Fund
Yield (%) 78.85% 28.70% 19.52%
Investment
16534 52034 89318
UTI Midcap Fund Value
Yield (%) 76.96% 25.46% 15.92%
Investment
UTI Dividend Yield 15328 53049
Value
Fund
Yield (%) 55.30% 26.88%
Investment
14769 49079 93720
UTI Equity Fund Value
Yield (%) 45.52% 21.21% 17.88%
Investment
Service Industries 15168 45332 82462
Value
Fund
Yield (%) 52.47% 15.56% 12.68%
Investment
UTI Leadership 14140 43300
Value
Fund
Yield (%) 34.75% 12.37%
 Investment
14469 46395 90491
UTI Mastershare Value
Yield (%) 40.36% 17.20% 16.45%
Investment
UTI Infrastructure 13950 42673 88421
Value
Fund
Yield (%) 31.54% 11.37% 15.51%
Sectoral Fund
Investment
UTI Banking 15596 53929 108710
Value
Sector Fund
Yield (%) 60.03% 28.10% 24.00%
Investment
UTI Transportation 16556 58119 93374
Value
& Logistics Fund
Yield (%) 77.35% 33.73% 17.73%
Investment
15436 51582 93414
UTI MNC Fund Value
Yield (%) 57.20% 24.82% 17.75%

SIP returns are worked out assuming investment of Rs. 1000/- every
month at NAV per unit of the scheme as on the first working day of the
respective time periods. The loads have not been taken into account.
  SIP returns for May:

1 yr. 3 yr 5 yr
Investment
Scheme Name 12000 36000 60000
Amount
Diversified
Investment
UTI Opportunities 13946 51423
Value
Fund
Yield (%) 31.72% 24.66%

Investment
UTI Master Value 16213 56670 101637
Value
Fund
Yield (%) 71.75% 31.90% 21.25%
Investment
15895 53754 91975
UTI Midcap Fund Value
Yield (%) 65.96% 27.93% 17.14%
Investment
UTI Dividend Yield 14728 53133
Value
Fund
Yield (%) 45.18% 27.07%
Investment
14039 48769 92815
UTI Equity Fund Value
Yield (%) 33.30% 20.81% 17.51%
Investment
Service Industries 14554 46317 83578
Value
Fund
Yield (%) 42.15% 17.12% 13.24%
Investment
13441 43011
UTI Leadership Fund Value
Yield (%) 23.25% 11.94%
Investment
13764 45881 89165
UTI Mastershare Value
Yield (%) 28.65% 16.45% 15.87%
 Investment
UTI Infrastructure 13230 42070 86217
Value
Fund
Yield (%) 19.74% 10.42% 14.50%
Sectoral Fund
Investment
UTI Banking Sector 15222 55771 112542
Value
Fund
Yield (%) 53.88% 30.69% 25.49%
Investment
UTI Transportation & 15834 59642 95606
Value
Logistics Fund
Yield (%) 64.84% 35.81% 18.73%
Investment
148981 52325 94456
UTI MNC Fund Value
Yield (%) 49.63% 25.94% 18.23%
SIP returns are worked out assuming investment of Rs. 1000/- every
month at NAV per unit of the scheme as on the first working day of the
respective time periods. The loads have not been taken into account.

(Reference: From the Factsheet by UTI)

Key terms:

NAV: NAV or Net Asset Value of the fund is the cumulative market value
of the assets of the fund net of its liabilities. NAV per unit is simply the
net value of assets divided by the number of units outstanding. Buying
and selling into funds is done on the basis of NAV-related prices.
The NAV of a mutual fund are required to be published in newspapers.
The NAV of an open end scheme should be disclosed on a daily basis and
the NAV of a close end scheme should be disclosed at least on a weekly
basis.

Exit/Entry load: Is a charge collected by a scheme when it sells the

units is exit load. Is a charge collected by a scheme when it buys back the
units from the unit holders is entry load

Open/Close Ended: Whenever investor invest in any open ended

scheme then he can make entry and exit at any time but in close ended
scheme he can exit at the time of maturity.

Sales Price: Is the price you pay when you invest in a scheme, also
called Offer Price. It may include a sales load.

Re-purchase Price: Is the price at which units under open-ended

schemes are repurchased by the Mutual Fund. Such prices are NAV
related.
Area of Study:

There are so many schemes were introduced by UTI AMC, due to

time constraints we have only focused on following schemes.

Equity Funds Category

Features Master Top 100 Fund Dividend Master Value
Share Yield Fund Fund
Objective An equity The fund aims An open-ended An open
fund aiming to provide long equity scheme. ended equity
to provide term capital It aims to fund investing
benefit of appreciation/ provide in stocks
capital dividend medium to long which are
appreciation predominantly term capital currently
and income in equity and gains and/or undervalued
distribution equity related dividend to their future
through instruments of distribution by earning
investing in top 100 by investing potential and
equity. market predominantly carry medium
capitalisation. in equity and risk profile to
equity related provide
instruments, Capital
which offer appreciation.
high dividend
yield.

Asset Equity Equity Equity 100% in

allocation Minimum Minimum 65% Minimum 65% equity
70% and and Debt and Debt
Debt maximum 35% maximum 35%
maximum
30%
Min. invest Rs. 5000/- Rs. 5000/- Rs. 5000/- Rs. 5000/-
Amt.
Exit Load Within year Within year 1% Within year 1% Within year
1% after after that Nil after that Nil 1% after that
that Nil Nil
Plans/Opti Dividend Dividend Dividend Dividend
ons Growth Growth Growth Growth
SIP Yes Yes Yes Yes
SWP
Trigger Yes Yes Yes Yes
Fund Size 2,275 804 1,794 420
(Rs. In Cr)
Expense 1.81% 2.33% 2.09% 1.63%
Ratio
Equity Funds Category
Features Mid Cap Opportunity Wealth Banking
Fund Fund Builder Fund Sector Fund
Ser. 2
Objective An open The scheme To achieve long An open
ended fund seeks to term capital ended fund
with the generate appreciation by with the
objective to capital investing objective to
provide appreciation predominantly provide
‘Capital and/ or income in a diversified ‘Capital
Appreciation distribution by portfolio of Appreciation
’ by investing the equity and through
investing funds of the equity related investment in
primarily in scheme in the instruments stocks of
mid caps equity shares along with companies/
stocks. and equity investments in institutions
related GOLD ETF’s and engaged in
instruments. Debt and Money the banking
 The focus of Market and financial
the scheme is Instruments. services
to capitalise on activities.
opportunities
arising in the
market by
responding to
the dynamically
changing
Indian
economy by
moving its
investments
amongst
different
sectors as
prevailing
trends change.

Asset Equity Equity Equity 65% and 90% Equity

allocation Minimum Minimum 90% Debt 35% or
90% and and Debt Gold ETF 35%
Debt maximum 10%
maximum
10%
Min. invest Rs. 5000/- Rs. 5000/- Rs. 5000/- Rs. 5000/-
Amt.
Exit Load Within year Within year 1% Within year 1% Within year
1% after after that Nil after that Nil 1% after that
that Nil Nil
Plans/Optio Dividend Dividend Dividend Dividend
ns Growth Growth Growth Growth
SIP Yes Yes Yes Yes
SWP
Trigger Yes Yes Yes Yes
Fund Size 307 1,293 501 123
(Rs. In Cr)
Expense 2.40% 2.32% 2.37% 2.50%
Ratio

Balanced Funds Category

Features CCP Children Unit Linked Retirement

Advantage Career Insurance Plan Benefit
Fund Balanced (ULIP) Pension
Plan Fund
Objective Equity and Funds collected Investment Investment
related under the plan objectives of the objective and
instruments will be invested scheme are policies of the
minimum- in equities, primarily to scheme are
70% to convertible and provide return primarily to
100%, debt nonconvertible through growth provide
and money debentures/ inters NAV or pension in the
market bonds of through dividend form of
instruments companies/ distribution and periodical
including corporates etc. reinvestment income / cash
securitized and others thereof. flow to the
debt* capital and unit holders to
minimum- money market the extent of
0% to instrument redemption
maximum subject to the value of their
 30%* condition that holding after
investment (1) non less they complete
in than 60% of 58 years of
securitized the funds will age.
debt will be invested in
not debt
normally instruments of
exceed law to medium
20% of the profile having a
net assets rating of A+
of the and above or
scheme. equivalent at
the time of
investment and
(2) not more
than 40% of
the funds in
equities and
related
instruments.

Asset Equity Equity Equity Minimum Not more than

allocation Minimum Minimum 40% 40% and Debt 40% in Equity
70% and and Debt maximum 60%
Debt maximum 60%
maximum
30%
Min. invest Rs. 1000/- Rs. 1000/- Target amount Rs. 500/- to
Amt. enhance to gain Rs.
15,00,000/- and 10000/-
min 15000/-
Exit Load 4% < 1yr 3% < 2yr 2% for 5% < 1yr
 3% >= 1yr 2% >= 2yr & premature 3% >= 1yr &
& < 3yr < 4yr withdrawal < 3yr
1% >= 3yr 1% >= 4yr & 1% >= 3yr &
& < 5yr < 5yr < 5yr
Plans/Opti Income Scholarship 10yr Plan/ 15yr
ons Growth Growth Plan
SIP Yes Yes Yes Yes
SWP Yes
Trigger
Fund Size 45.31 2,729.53 2,915.45 610.39
(Rs. In Cr)
Expense 1.40% 1.64% 1.65% 1.47%
Ratio

Income Funds Category

Features Short Tern Treasury Advantage Floating Rate
Income Fund Fund Fund
Objective To Generate Steady The scheme will The investment
and Reasonable endeavour to generate objective of the
income, with low an attractive return scheme is to
risk and high level for its investors generate regular
of liquidity from a consistent with capital income though
portfolio of money preservation and investment in a
market securities liquidity by investing portfolio
and high quality in a portfolio of quality comprising
debt. debt securities, money substantially a
market instruments floating rate
and structured debt/ money
obligations. market
instruments,
fixed rate debt/
 money market
instrument
swapped for
floating rate
returns.

Asset Equity Minimum 100% in Debt Fixed Debt 35%

allocation 65% and Debt and Floating Rate
maximum 35% Debt 65 to 100%
Min. invest Rs. 30000/- Rs. 100000/- Rs. 5000/-
Amt.
Exit Load 1% redeemed Nil 0.75% redeemed
before 90 day within 3 days
Plans/Opti Income Growth and LTP and Growth Dividend Growth
ons STP Dividend Bonus
SIP Yes Yes
SWP
Trigger
Fund Size 1,371.08 29,129.52 4,965.60
(Rs. In Cr)
Expense 0.26% 0.35% 0.20%
Ratio

Liquid Funds Category

Features Money Market Fund Liquid Fund Cash Plan

Objective To provide highest possible The investment objective of
current income consistent the scheme is to generate
with preservation of capital steady and reasonable
and providing liquidity income, with low risk and
from investing in a high level of liquidity from a
 diversified portfolio of portfolio of money market
short term money market securities and high quality
securities. debt.

Asset allocation 100% debt and money Equity Minimum 65% and
market Debt maximum 35%
Min. invest Amt. Rs. 10000/- Cash Plan-
Rs. 1,00,000/-
Exit Load Nil Nil
Plans/Options Dividend Growth Income Growth and CP
SIP
SWP
Trigger
Fund Size (Rs. In 1,270.95 5,716.92
Cr)
Expense Ratio 0.20% 0.26%
Consumer Buying Behaviour- An Introduction

Consumer is God, Consumer is always right, Consumer is the

most important guest in our premises — these are some of the phrases
that have been in use since the advent of business. Earlier, the market
used to be small and limited to a few manufacturers and consumers, but
as it expanded beyond geographical boundaries, sellers as well as buyers
increased several folds. The free market has led to cutthroat competition
among the manufacturers who are trying to capture as much market
share as possible.

Almost all major companies, whether in telecommunication,

banking, credit card, finance or IT, have realized the importance of
consumer and are therefore trying to retain their loyalty. Organizations
are now, just not only selling product or services, but also expanding their
operations to understand their consumer’s demographic profile, buying
behaviour and preferences in order to build long-lasting relationship.

According to Phillip Kotler,

“Consumer Buying Behaviour refers to the behaviour of ultimate
user of the product”.

“The decision processes and acts of final household consumers

associated with evaluating, buying, consuming, and discarding products
for personal consumption.”

“An analysis of the consumer’s behaviour in terms of consumer

consumption patterns, consumer preferences, consumer motivation,
consumer buying process and shopping behaviour is very much helpful to
formulate a firm’s marketing strategy. “
Objectives of studying Consumer Buying Behaviour:

 Buyers’ reactions to a firms marketing strategy has a great impact

on the firms’ success.
 The marketing concept stresses that a firm should create a
Marketing Mix (MM) that satisfies (gives utility to) customers,
therefore need to analyse the what, where, when and how
consumers buy.
 Marketers can better predict how consumers will respond to
marketing strategies.

The study of consumers helps firms and organizations improve their

marketing strategies by understanding issues such as how

 The psychology of how consumers think, feel, reason, and

select between different alternatives (e.g., brands, products);
 The psychology of how the consumer is influenced by his or
her environment (e.g., culture, family, signs, media);
 The behaviour of consumers while shopping or making other
marketing decisions;
 Limitations in consumer knowledge or information processing
abilities influence decisions and marketing outcome;
 How consumer motivation and decision strategies differ
between products that differ in their level of importance or
interest that they entail for the consumer; and
 How marketers can adapt and improve their marketing
campaigns and marketing strategies to more effectively reach
the consumer.

Understanding these issues helps us adapt our strategies by taking the

consumer into consideration. For example, by understanding that a
number of different messages compete for our potential customers’
attention, we learn that to be effective, advertisements must usually be
repeated extensively. We also learn that consumers will sometimes be
persuaded more by logical arguments, but at other times will be
persuaded more by emotional or symbolic appeals. By understanding the
consumer, we will be able to make a more informed decision as to which
strategy to employ.

So the ultimate objective of a business firm is to create a consumer who

is said to be pivot around which the entire business of a firm revolves.
Thus the marketing concept is consumer oriented and the emphasis is
more on the consumer rather than on the product. The essence of
modern marketing lies in building of profit along with creating meaningful
value satisfaction for the costumers, whose needs and desires have to be
coordinated with the set of products and production programmes.
Therefore, marketing success an enterprise depends as its ability to
create a community of satisfied consumers. All the business activities
should be carried out in ways which are directed towards the satisfaction
of the consumer needs.

The marketing concept is consumer oriented and the emphasis is more

on the consumer rather than on the product. The essence of modern
marketing lies in building of profit along with creating meaningful value
satisfaction for the costumers, whose needs and desires have to be
coordinated with the set of products and production programmes.
Therefore, marketing success an enterprise depends as its ability to
create a community of satisfied consumers.

All the business activities should be carried out in ways which are
directed towards the satisfaction of the consumer needs. Consumer
behaviour is affected by a host of variables ranging from personal,
professional needs, attitudes and values, personality characteristics,
social economic and cultural background, age, gender, professional status
to social influences of various kinds exerted a family, friends, colleagues,
and society as a whole. The combination of these factors help the
consumer in decision making further Psychological factors that as
individual consumer needs, motivations, perceptions attitudes, the
learning process personality characteristics are the similarities, which
operate across the different types of people and influence their behaviour.

Marketing starts with the consumers and ends with the consumer.
Satisfaction of the consumers becomes the most important goal of a
business enterprise. The effort to ensure consumer satisfaction lies in
understanding the consumer, his likes dislikes, his expectations and
motivation.

Buying Behaviour is the decision processes and acts of people involved in

buying and using products.

Consumer Buying Behaviour refers to the buying behaviour of the

ultimate consumer. A firm needs to analyze buying behaviour for:

 Buyers’ reactions to a firms marketing strategy has a great

impact on the firms’ success.
 The marketing concept stresses that a firm should create a
Marketing Mix (MM) that satisfies (gives utility to) customers,
therefore need to analyze the what, where, when and how
consumers buy.

Marketers can better predict how consumers will respond to marketing

strategies.
 The Investor Prospective Towards Various Assets

ASSET Investment Risk Investment

Objective Tolerance Horizon
Equity Capital High Long
Appreciation
Mutual Fund Capital Moderate Long
Appreciation
Bank Deposit Income Generally Flexible all Terms
Flexible Low

PPF Income Low Long

Gold Inflation Hedge Low Long

Life Insurance Risk Cover Low Long

This table shows investors prospective towards Assets like Equity, Mutual
Fund, Bank Deposit, PPF, Gold and Life Insurance. From this table it is
clearly understand the Investment objective, Risk tolerance & Time
horizon for different Asset Classes.
RESEARCH METHODOLOGY

Research is a systematic activity carried out in the pursuit of truth, which

is a purposive investigation. It is a way of finding new ways of looking a
familiar thing in order to explore ways of changing it. It is an activity that
extends, corrects and verifies knowledge. It includes introduction of the
study, objectives, benefits & limitations of the project.

Over here researcher has applied exploratory research which will take into
consideration the following points.

 A review of pertinent literature.

 An experience survey.

 An analysis of insight stimulating cases

Advantage:

 It does not have formal or rigid design.

 It aims at generating new ideas.

 It helps in assessing the feasibility of further study.

 It attempts to see what is there rather than predicting the same.

Limitations:

 It is a pilot studies thus usually an ill structured.

 It is not specific in nature.

Research Objectives:

Primary Objective:

 To know the Consumer behaviour of investors towards Mutual

Funds.

Secondary Objectives:

 To know people’s awareness about various schemes for investment

in Mutual Fund.
 To know the investors knowledge and perceptions about mutual
fund.
 To know the investor priority level between different criteria of
investment like safety level, returns, liquidity, tax benefits and
maturity etc. of investment.
 Find out reason for choice of mutual fund as an investment avenue.
 To identify the social factors that affect investors’ buying behaviour
in Ahmedabad.
 To measure the satisfaction level of investors regarding various
parameters for investment in Mutual fund.
 Find out reason for choice of mutual fund as an investment avenue.

METHODOLOGY- The science dealing with principles of procedure in

research and study.

 Various investment options have been selected like Mutual Fund,

Gold, Bank Deposits, Post Office Savings and Insurance.

 Various parameters taken for comparison

 Risks
  Time Horizon

 Return on Investment

 Liquidity

Type of Data

 Primary Data:

Utilizing the information from the Secondary data, questionnaire

was prepared to study the investors’ behaviour. Primary data
were collected directly from the respondents to solve the problem.

 Secondary Data:

Secondary data were collected from many sources like books,

websites and company’s report.

Research Approach:

Survey method was adopted to gather the primary data. This survey
included face-to-face interview with respondents.

Sampling Plan

Target population: Investor who invests money into various investment

options.

Sampling Element: High Net worth Investors (HNI) and middle class
retail investors.
Sampling technique: The sampling technique used for sampling is:

 Random sampling.

 Quantitative Sampling.

 Convenience sampling

Sample size: The sample size of the study is around 60 respondents.

Area of Survey: Ahmedabad

The main statistical tools used for the collection and analyses of
data in this project are:

 Questionnaire
 Pie Charts
 Bar Diagrams
Data Analysis and Interpretation:

Data analysis will be done through graphical method and using SPSS
software and Chi square test, where questionnaire will be analyzed and
various test will be performed on it to reach to the final conclusion. Result
will be given on the basis of the descriptive statistical technique.

Limitations:

 As we limited time span so it is not possible to cover each & every

detail of the topic.

 Company uses various software’s which have certain financial

information and I as a trainee cannot access them.

 As the samples are taken randomly and population size of

Ahmedabad is large, sample errors are inevitable.

 The study will heavily depend on primary data which will be

collected from public at large; hence the authenticity of data can be
a limitation.

1. Age Group:

Frequency Per cent

18 years - 30 years 9 15

31 years - 40 years 30 50

41 years - 50 years 9 15

Above 50 years 12 20
 50 Frequency
50
Per cent
40
30
30
20
20 15 15
12
9 9
10

0
18 years - 30 31 years - 40 41 years - 50 Above 50 years
years years years

From the questionnaire we got different age groups. From the above
chart, it can be derived that most of the investors are in the age group of
31 to 40. The reason being, they have enough money to invest in risky
market because they have job and they are well settled. This would help
us to know to whom we have to target.

2. Business or Job/service

Frequency Per cent

Business 6 10

Job 54 90
 90
100
80
54
60 Frequency
40 Per cent
6 10
20
0
Business Job

Most of the people, who are interested in investment, have jobs and we
met very few business class people who are likely to invest in market.
Through this we come to know that we should target on investor who is in
job.

3. Annual Income

Frequency Per Cent

Up to 2 lac 6 10

2 lac to 5 lac 39 65

Above 5 lac 15 25

65
70
60
50 39
40 Frequency
25
30 Per Cent
15
20 10
6
10
0
Up to 2 lac 2 lac to 5 lac Above 5 lac
As per income status, most of the investors belong to income group of 2
lac to 5 lac. From this we come to know that investors belong to income
group 2 lac to 5 lac invests more than above 5 lac.

4. Where do you invest?

Frequency Per Cent

Bank Deposit 12 20

Share Market 24 40

Mutual Fund 15 25

Others 9 15

40
40

30 24 25
20
20 15 15 Frequency
12
9 Per Cent
10

0
Bank Share Mutual Fund Others
Deposit Market
From the above table we have come to know that the preference of the
different investment of the investor while investing their money that is
bonds & insurance products are most important investment avenue for
the investors. Than after money market instrument and equity share are
important for the investors.

Most of the investors like to invest in share market. As per above chart,
about 40% investor invest in share market. The size of the world stock
market was estimated at about $36.6 trillion US at the beginning of
October 2009. Participants in the stock market range from small
individual stock to large hedge fund traders, who can be based
anywhere. That’s reason why more people invest in stock market.

5. Are you regular investor?

Frequency Per cent

Yes 42 70

No 18 30

80 70

60 42
Frequency
40 30
18 Per cent
20

0
Yes No
Most of the investors choose to make safe investments for the long-term,
but have to rely on stock tips from friends or rumors doing rounds of the
stock market. Most investors try to time the market and often get unduly
influenced by market rumors and tips and end up making losses on
investments that lack rationale. We concluded from the data that about
70% people we met are regular investor and only 30% investors invest
occasionally.

6. Do you want to invest in Mutual Fund?

Frequency Per cent

Yes 27 45

No 33 55

55
60
45
50
40 33
27 Frequency
30
Per cent
20
10
0
Yes No

From the above table we have come to know criteria’s considered while
investing in MF by the investors that is finance planner advice and the
AMC image are most important criteria’s for the investors while investing
in mutual fund. Than after fund performance and tax incentive are
important.
From the surveys which we have done, we have come to know that the
people who want to invest in mutual fund are less than the people who
want to invest in other money market instruments. The major challenge is
that how we can convert their investments from other money market
instruments towards mutual fund.

7. Are you aware about all the features of Mutual Fund?

Frequency Per cent

Yes 36 60

No 24 40

60
60

50
40
36
40
Frequency
30 24
Per cent
20

10

0
Yes No

The investor who knew about mutual fund intensely is 60% and others
are not aware about mutual fund schemes and mutual fund as a system.

8. Would you like to have information on Mutual Fund?

 Frequency Per cent
Yes 24 40
No 36 60

60
60
50 40
36
40
Frequency
30 24
Per cent
20
10
0
Yes No

As above, there are 40% people are not aware about mutual fund and
60% are aware of the mutual fund. From that 40% people only 8% want
to have full information.

From the survey, we come to know the purpose to investing in MF is that

low risk and collective investments are most important purpose of the
investor for the investing in mutual fund. Than after return potential and
advantage of professional management are important while investing in
mutual fund.
 9. What do you consider during making any investment?

Frequency
Transparency 27

Liquidity 18

Returns 30

Tax Saving 18

Regular Income 25

Risk 18

30
30 27
25
25

20 18 18 18

15

10 Frequency
5

From the above table we have come to know that the important criteria
considered by most of the investors more about the returns and focus
equally on regular income and transparency. So there should such
schemes which provide them what they actually want or they consider
while investing. This helps us to know that to what scheme does investor
is looking for. These also help us to easily crack the deal.
 Key Findings

This training program has played a significant role in understanding the

Consumer Behavior. It help to know about the preferences of investors it
give them knowledge about the different investment options available for
investment.

Our Key findings are as follows:

 69 % people are aware of the mutual fund.
 Convenience and risk are most important criteria considered by the
investor while investing their money.
 Tax benefit and safety of the investment are most important
objective of the investors.
 48% have shown interest to invest in mutual fund.
 Income fund & specialized fund are most important for the investing
in mutual fund.
 66% people have income level of Rs. 50,000- Rs.10000/-
 In this current scenario Mutual Funds & Bank deposits become the
most preferred investment option.
 Now a day’s investors want to invest their money for long term
prospective to reach their financial goal and maximizing wealth.
 Yield and return is the most important preference at the time of
investment.
 Age group & Income is the most important factor in determining the
risk capacity of individual
Concluding Observation:

The present study looks at customer expectation levels in a mutual fund

product. This kind of customer orientation is necessary in a market like
India where the market is turning competitive due to large number of
players with varied financial muscle powers and expertise of
reinvestment. The small investors purchase behaviour does not have a
high level of coherence due to the influence of different purchase factors.
The buying intent of a mutual fund product by a small investor can be due
to multiple reasons depending upon customers risk return trade off. Due
to the reduction in the bank interest rates and high degree of volatility in
Indian stock market, investors are looking for an alternative for their
small time investments which will provide them a higher return and also
safety to their investments. The bond market is also passing through a
recession due to its interest parity with bank instruments. So mutual
funds offer the best alternative to the small investors in India. A prudent
product design by adding the features expected by investors and spelt out
in this research will make the new mutual fund products attractive for the
Indian investors. The factors identified in the study provide key
information inputs regarding investor’s preferences and priorities that will
guide future mutual fund product managers in designing attractive mutual
fund products for the Indian market.
Learning:

 Convenience & risk are most important criteria considered by the

investor while investing their money.
 Tax benefit and safety of the investment are most important
objective of the investors.
 Investors are concerned about the returns.
 MF is good investment tool because of several benefits like
Professional Management, Risk Reduction, Flexibility, Transparency
and Low Transaction Cost.
 As Mutual Fund provides more returns than PPF, Post, Bonds, Fixed
Deposit, and Equity in Long Term so more investors are diverted
towards it.
 Age group & Income is the most important factor in determining the
risk capacity of individual

Recommendations:

 Most of the investors belong to age category of 30 to 40, so there is

huge market available for new and young investor. Fresher are not
able to make huge investment at once so there should be one
scheme, especially for the new comer.
 Income group of 2 lac to 5 lac is making more investment than
others, so there is scope and market for mutual fund in this market.
 About 70% of investors are regular investors, so there is need to
catch that market as well.
 Mutual Fund, the concept is widely known, but many people are still
unaware about various schemes of mutual fund, increasing
awareness is also very important thing.
 There is a need to introduce very aggressive scheme which can give
maximum returns to investor as they are more concern about
return, transparency and regular income than risk and liquidity.
 References

Websites:

 www.amfiindia.com
 www.utimf.com
 www.mutualfundindia.com
 www.mutualfunds.about.com
 www.utiamc.com

PDF’s:

 Mutual Fund Investors Guide

 Trainer Note AMFI

Books:

 Fact sheet of UTI mutual fund

 Understanding Mutual Fund- Sunita Abraham & Uma Shashikant.