A Summer Internship Project Report

on
‘‘Sales Of Mutual Fund’’
Edufund Pvt Ltd.
By
Aniket Kumar Tiwary
PGDM- (Marketing)
Batch (2022-2024)
Under the guidance of Dr. Akhtar Ali Sayyed
Submitted to
Ramachandran International Institute of Management
In partial fulfilment of the requirement for the award of
degree of
post graduate diploma in management (PGDM)

Ramachandran International Institute of Management

Behind Crystal Honda Showroom, Uttam Nagar,

Pune, Maharashtra 411021

1
 ACKNOWLEDGEMENT

Before we get into thick of things, I would like to add a few words of appreciation
for the people who have been a part of this project right from its inception. The
writing of this project has been one of the significant academic challenges I have
faced and without the support, patience, and guidance of the people involved, this
task would not have been completed. It is to them I owe my deepest gratitude.
It gives me immense pleasure in presenting this project report on "SALES OF
MUTUAL FUND". It has been my privilege to have a team of project guide who
have assisted me from the commencement of this project. The success of this
project is a result of sheer hard work, and determination put in by me with the help
of my project guide Dr. Akhtar Ali Sayyed. I also take this opportunity to add a
special note of thanks for Dr. Shravasti Jain who undertook to act as my mentor
despite her many other academic and professional commitments. Her wisdom,
knowledge, and commitment to the highest standards inspired and motivated me.
Without her insight, support, and energy, this project wouldn't have kick-started
and neither would have reached fruitfulness.
I also feel heartiest sense of obligation to my seniors, who helped me in collection
of data & resource material & also in its processing as well as in drafting
manuscript. The project is dedicated to all those people, who helped me while
doing this project.

2
 DECLARATION

I hereby declare that the project work entitled Sales Of Mutual Fund submitted by
me for the summer internship during the post graduate program PGDM
(Marketing) to RIIM, Pune is my original work and has not been submitted earlier
either to RIIM, Pune or any other institute/body for the fulfillment of the
requirements of any other course of study. I also declare that no chapter of this
project is copied, either in whole or in part from any other document. Some
references have been taken from books, internet and other learning sources, which
are duly mentioned in the bibliography section.

Signature:
Student Name :Aniket Kumar Tiwary. .

Date:

3
 CERTIFICATE

This is to certify that Mr. ANIKEWT TIWARI is a bona-fide student of this

Institute enrolled for the PGDM Course.

He has successfully completed his Summer Project titled SALES OF MUTUAL

FUND

At ( EDUFUND PVT LTD ,PUNE ) for partial fulfillment of Post Graduate

Diploma in Management at Ramachandran International Institute of
Management

We wish him good luck and best wishes for a bright future.

Internal Project Guide External Project Guide

4
INTERNSHIP CERTIFICATE

5
 Table of Contents INDEX

PAGE
SRNO. TOPICS
No
1. Need for The Study 07
2. Objective 08
3. Limitation 09
4. Executive Summery 10
5. About Mutual Fund 12
6. Weekly Report- Schedule – 1 15
7. Schedule – 2 16
8. Schedule – 3 17
9. Schedule – 4 18
10. Schedule – 5 19
11. Schedule – 6 20
12. Introduction of Mutual Fund 22
13. Why Select Mutual Fund? 23
14. Return Risk Market 24
15. Advantage of Mutual Fund 25
16. Disadvantage of Investing through Mutual Fund 28
17. Types of Mutual Fund Scheme in India 30
18. Net Asset Value 37
19. Working of Mutual Fund 41
20. Market Share 46
21. My Experience & Learning in Company 48
22. Conclusion 49
23. Bibliography 50

6
 NEED FOR THE STUDY

The main purpose of doing this project was to know about mutual fund and its
functioning. This helps to know in details about mutual fund industry right from its
inception stage, growth and future prospects.
It also helps in understanding different schemes of mutual funds. Because my study
depends upon prominent funds in India and their schemes like equity, income,
balance as well as the returns associated with those schemes.
The project study was done to ascertain the asset allocation, entry load, exit load,
associated with the mutual funds. Ultimately this would help in understanding the
benefits of mutual funds to investors.

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 OBJECTIVE

➢ To give an idea about the benefits from Mutual Fund investment.

➢ To give an idea of the types of schemes available.
➢ To discuss about the market trends of Mutual Fund investment.
➢ To study some of the mutual fund schemes.
➢ To study Mutual Fund Distribution Channels.

➢ Explore the recent developments in the mutual funds in India.

➢ To give an idea about the regulations of mutual funds.

8
 LIMITATIONS

• The lack of information sources for the analysis part.

• Though I tried to collect some primary data but they were too inadequate for
the purposes of the study.
• Time and money are critical factors limiting this study.
• The data provided by the prospects may not be 100% correct as they too
have their limitations.

9
 EXECUTIVE SUMMERY

A mutual fund is a scheme in which several people invest their money for a
common financial cause. The collected money invests in the capital market and the
money, which they earned, is divided based on the number of units, which they
hold.

The mutual fund industry started in India in a small way with the UTI Act creating
what was effectively a small savings division within the RBI. Over a period of 25
years this grew fairly successfully and gave investors a good return, and therefore in
1989, as the next logical step, public sector banks and financial institutions were
allowed to float mutual funds and their success emboldened the government to allow
the private sector to foray into this area.

The advantages of mutual fund are professional management, diversification,

economies of scale, simplicity, and liquidity.
The disadvantages of mutual fund are high costs, over-diversification, possible tax
consequences, and the inability of management to guarantee a superior return.

The biggest problems with mutual funds are their costs and fees it include Purchase
fee, Redemption fee, Exchange fee, Management fee, Account fee & Transaction
Costs. There are some loads which add to the cost of mutual fund. Load is a type of
commission depending on the type of funds.

10
Mutual funds are easy to buy and sell. You can either buy them directly from the
fund company or through a third party. Before investing in any funds one should
consider some factor like objective, risk, Fund Manager’s and scheme track record,
Cost factor etc.

Responsibilities as a Sales Intern:

• Generate new leads and continually increase volume of sales.

• Meet and exceed sales goals.
• Participating in weekly meetings.
• Build rapport and develop relationships with potential clients.
• Meet with clients and present the company’s services.
• Help promote the company’s services through social media.
• Data Calling.
• Making Promotional Videos.
• Client Visit with Seniors.

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 ABOUT EDUFUND PVT LTD.

Edufund understand that pursuing primary education or higher studies from top
schools, colleges, and universities in India or abroad can be your dream for your child
which requires financial support. Edufund is a platform that's designed to assist
Indian parents like you in planning and saving for your child's education. Our
platform seamlessly guides you in estimating potential educational expenses and
offers valuable input from financial and educational counselors. We are equipped to
assist you in investigating scholarship programs, and diverse investment options such
as mutual funds and SIP, and ensuring your readiness to facilitate your child's
academic pursuit. Trust Edufund to be your reliable partner on your child’s
educational journey.
Overview:
Education costs are increasing quicker than household inflation in many countries,
causing many students to compromise on the education they deserve. We are
changing that. We are India’s first investment app dedicated to helping Indian
parents save and invest for their children's education costs.

Website:
https://www.Edufund.in
Phone:
+91 7600730860 Phone number is +91 7600730860
Industry:
Financial Services
Company size:
11-50 employees
58 on LinkedIn Includes members with current employer listed as Edufund,
including part-time roles.

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Founded:
2020
Specialties:
Mutual Funds, US Market, Education Loan, Digital Gold, Investment
Advisory, Education Planning, Investment Planning, and Counselling.

How many investors does Edufund have?

• Edufund has total 19 investors.

• 8 are institutional investors including AngelList and 7 others.
• 11 are Angel investors including Arjun Ravi Sheth and 10 others.

List of Edufund's institutional investors.

• MassMutual Ventures, located in Boston (United States), made their first

investment in Edufund on May 04, 2023 in its Seed round.
• DSP Mutual Fund, located in Mumbai (India), made their first investment
in Edufund on May 04, 2023 in its Seed round.
• Anchorage Capital Partners, located in Sydney (Australia), made their first
investment in Edufund on Dec 29, 2021 in its Seed round.
• ViewTrade, located in Boca Raton (United States), made their first investment
in Edufund on Nov 18, 2020 in its Seed round.
• AngelList, located in San Francisco (United States), made their first investment
in Edufund on Mar 15, 2021 in its Seed round.

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The Edufund dream:

With the cost of higher education rising at twice the rate of inflation (Yikes!) a

quality education only gets more expensive by the day. Edufund’s mission is

to help every Indian parent plan their child’s education journey smartly and pay for

it smartly too! - either by saving for the expenses the right way or borrowing the

funds smartly.

Services:

Edufund can help you invest, save and plan for your child’s education needs. It allows
you to customize your plan, and invest in tools like mutual funds, US stocks, ETFs,
and digital gold to diversify your investments.
It sets long-term and short-term goals for parents and children to save up time and
help them achieve their goals. Edufund also helps you with education loans and
connects you with the best loan partners in India and USA.

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 Weekly Reports

Schedule 1

In the first week I was brief about the company by my guide Mr.Bhagirath
Chaudhary. He taught me about the history of the company, what are the various
product and services provided by Edufund Pvt Ltd.
He also taught me about the various plans offered for opening a demat account. Mr.

Bhagirath taught me about trading and investing. Then I was taught about the cold

calling format.

I was then given a target by Mr. Bhagirath to open 40 Accounts and done mandate

by the end of the internship period.

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Schedule 2

The second week was more of field work than office work. I was sent out with my
senior to meet existing and new clients. I visit places such as Baner, Bavdhan,
Viman Nagar etc. to obtain signatures of interested clients. It was a very good
experience explaining to the client about the Mutual Fund, how it works, and so on.

❖ People who lie under the age group of 28-45 have more experience and
are more interested in investing in Mutual Funds.
❖ There was a lot of lack of awareness or ignorance.
❖ Generally, People employed in Private sectors and Businessman are more
likely to invest in Mutual Funds, than other people working in other
professions.
❖ Generally investors whose monthly income is above Rs. 30001-50000 are
more likely to invest their income in Mutual Fund, to preserve their
savings of at least more than 20%.
❖ People generally like to save their savings in Mutual Fund, Fixed
Deposits and Savings Account.
❖ Many people came to know about Mutual Fund from Financial Advisors,
Advertisement as well as from their Peer group, and they generally invest
in the Mutual Fund by taking advices from their Legal Advisors.
❖ Investors generally like to invest in Large Cap Companies like Reliance,
SBI, etc. to minimize their risk.
❖ The most popular medium of investing in Mutual Fund is through SIP
and moreover people like to invest in Equity Fund though it is a risky
game.
❖ The main Objective of most of the Investors is to preserve their Income.

16
Schedule 3

The third week had more of Office work than field work. Detailed Information
about the company was given to me, and I was given time to sit in the office and
work on my project. The manager of the branch told me to make feedback calls and
Data Calling to the customers and to get references for them. I made more than
2500 calls encountered various kinds of people. While making these calls I found
out how important these feedback calls are. Most of the customers were unhappy
with the fact that they had not receive more of these calls. I was able to help solve
their queries. Some of the customers were very disappointed with the services
provided by the agents from Edufund. I was also sent to White field to an existing
customer’s house to open a new account.

17
Schedule 4

In this week I mostly sitting in the office and gathering more information for my
project. I had also gone to meet a few customers in Pune and I was able to open 12
demat accounts. My project was on Mutual Funds.
The first introduction of a mutual fund in India occurred in 1963, when the

Government of India launched Unit Trust of India (UTI). Until 1987, UTI enjoyed

a monopoly in the Indian mutual fund market. Then a host of other government-

controlled Indian financial companies came up with their own funds. These

included State Bank of India, Canara Bank, and Punjab National Bank. This market

was made open to private players in 1993, as a result of the historic constitutional

amendments brought forward by the then Congress-led government under the

existing regime of Liberalization, Privatization and Globalization (LPG). The first

private sector fund to operate in India was Kothari Pioneer, which later merged

with Franklin Templeton.

A mutual fund is a common pool of money into which investors place their
contributions that are to be invested in accordance with a stated objective. The
ownership of the fund is thus joint or “mutual”; the fund belongs to all investors. A
single investor’s ownership of the fund is in the same proportion as the amount of
the contribution made by him or her bears to the total amount of the fund.
Mutual Funds are trusts, which accept savings from investors and invest the same

in diversified financial instruments in terms of objectives set out in the trusts deed

18
with the view to reduce the risk and maximize the income and capital appreciation

for distribution for the members.

Schedule 5

This is the second last week of our internship in which I learn more about Mutual
Fund Market. Apart from hat I learn about online trading through trade tiger, web
page & Edufund pro applications. It was a very new experience. Then I gathered
more information regarding mutual funds.
The risk return trade-off indicates that if investor is willing to take higher risk then
correspondingly he can expect higher returns and vice versa if he pertains to lower
risk instruments, which would be satisfied by lower returns. For example, if an
investors opt for bank FD, which provide moderate return with minimal risk. But
as he moves ahead to invest in capital protected funds and the profit-bonds that
give out more return which is slightly higher as compared to the bank deposits but
the risk involved also increases in the same proportion. Thus investors choose
mutual funds as their primary means of investing, as Mutual funds provide
professional management, diversification, convenience and liquidity.
That doesn’t mean mutual fund investments risk free.
This is because the money that is pooled in are not invested only in debts funds
which are less riskier but are also invested in the stock markets which involves a
higher risk but can expect higher returns. Hedge fund involves a very high risk
since it is mostly traded in the derivatives market which is considered very volatile.

19
Schedule 6

In the last week I targeting to complete my target of account opening and will try to
continue and gain knowledge about Mutual Funds and IPO’s specifically. I am still
trying to get the required data from Edufund Ltd. for the completion of the project.
In last week I completed my project about mutual fund and gathered following
information.
Financial experts believe that the future of Mutual Funds in India will be very
bright. It has been estimated that by March-end of 2023, the mutual fund industry
of India will reach Rs 40,90,000 crore, taking into account the total assets of the
Indian commercial banks. In the coming 10 years the annual composite growth rate
is expected to go up by 13.4%.

• 100% growth in the last 6 years.

• Number of foreign AMC's are 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 45 mutual funds companies with different schemes
which is much less than US having more than 800. There is a big scope for
expansion.
• '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.

20
 • Mutual fund can penetrate rurals like the Indian insurance industry with
simple and limited products.
• SEBI allowing the MF's to launch commodity mutual funds.
• Emphasis on better corporate governance.
• Trying to curb the late trading practices.
• Introduction of Financial Planners who can provide need based advice.

Looking at the past developments and combining it with the current trends it can be
concluded that the future of Mutual Funds in India has lot of positive things to
offer to its investors.
Mutual Funds now represent perhaps most appropriate investment opportunity for
most investors. As financial markets become more sophisticated and complex,
investors need a financial intermediary who provides the required knowledge and
professional expertise on successful investing. As the investor always try to
maximize the returns and minimize the risk. Mutual fund satisfies these
requirements by providing attractive returns with affordable risks. The fund
industry has already overtaken the banking industry, more funds being under
mutual fund management than deposited with banks. With the emergence of tough
competition in this sector mutual funds are launching a variety of schemes which
caters to the requirement of the particular class of investors. Risk takers for getting
capital appreciation should invest in growth, equity schemes. Investors who are in
need of regular income should invest in income plans.

21
 INTRODUCTION OF MUTUAL FUND

The first introduction of a mutual fund in India occurred in 1963, when the

Government of India launched Unit Trust of India (UTI). Until 1987, UTI enjoyed

a monopoly in the Indian mutual fund market. Then a host of other government-

controlled Indian financial companies came up with their own funds. These

included State Bank of India, Canara Bank, and Punjab National Bank. This market

was made open to private players in 1993, as a result of the historic constitutional

amendments brought forward by the then Congress-led government under the

existing regime of Liberalization, Privatization and Globalization (LPG). The first

private sector fund to operate in India was Kothari Pioneer, which later merged

with Franklin Templeton.

CONCEPT OF MUTUAL FUND

A mutual fund is a common pool of money into which investors place their
contributions that are to be invested in accordance with a stated objective. The
ownership of the fund is thus joint or “mutual”; the fund belongs to all investors. A
single investor’s ownership of the fund is in the same proportion as the amount of
the contribution made by him or her bears to the total amount of the fund.

22
Mutual Funds are trusts, which accept savings from investors and invest the same
in diversified financial instruments in terms of objectives set out in the trusts deed
with the view to reduce the risk and maximize the income and capital appreciation
for distribution for the members. A Mutual Fund is a corporation and the fund
manager’s interest is to professionally manage the funds provided by the investors
and provide a return on them after deducting reasonable management fees.

Why Select Mutual Fund?

The risk return trade-off indicates that if investor is willing to take higher risk then
correspondingly he can expect higher returns and vise versa if he pertains to lower
risk instruments, which would be satisfied by lower returns. For example, if an
investors opt for bank FD, which provide moderate return with minimal risk. But
as he moves ahead to invest in capital protected funds and the profit-bonds that
give out more return which is slightly higher as compared to the bank deposits but
the risk involved also increases in the same proportion.
Thus investors choose mutual funds as their primary means of investing, as Mutual
funds provide professional management, diversification, convenience and liquidity.
That doesn’t mean mutual fund investments risk free.
This is because the money that is pooled in are not invested only in debts funds
which are less riskier but are also invested in the stock markets which involves a
higher risk but can expect higher returns. Hedge fund involves a very high risk
since it is mostly traded in the derivatives market which is considered very volatile.

23
 RETURN RISK MATRIX

HIGHIER RISK HIGHER RISK

MODERATE RETURNS HIGHIER RETURNS

Venture
Equity
Capital

Bank FD Mutual
Funds
Postal
Savings
LOWER RISK LOWER RISK
LOWER RETURNS HIGIER RETURNS

The graph indicates the growth of assets under management over the years.
GROWTH IN ASSETS UNDER MANAGEMENT

(Source:www.amfiindia.co
m)

24
 ADVANTAGES OF MUTUAL FUNDS

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

1. Portfolio Diversification:

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

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

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

4. Reduction Of Transaction Costs:

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

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

6. Convenience And Flexibility:

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

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

8. Choice of Schemes:
Mutual Funds offer a family of schemes to suit your varying needs over a lifetime.

9. Well Regulated:
All Mutual Funds are registered with SEBI and they function within the provisions
of strict regulations designed to protect the interests of investors. The operations of
Mutual Funds are regularly monitored by SEBI.

10. Transparency:
You get regular information on the value of your investment in addition to
disclosure on the specific investments made by your scheme, the proportion
invested in each class of assets and the fund manager's investment strategy and
outlook.

27
DISADVANTAGES OF INVESTING THROUGH MUTUAL FUNDS

1. No Control Over Costs:

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

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

3. Managing A Portfolio Of Funds:

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

28
4. The Wisdom Of Professional Management:
That's right, this is not an advantage. The average mutual fund manager is no better
at picking stocks than the average nonprofessional, but charges fees.

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

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

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

29
 TYPES OF MUTUAL FUNDS SCHEMES IN INDIA

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

30
BY STRUCTURE

1. Open - Ended Schemes:

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

2. Close - Ended Schemes:

A closed-end fund has a stipulated maturity period which generally ranging from 3
to 15 years. The fund is open for subscription only during a specified period.
Investors can invest in the scheme at the time of the initial public issue and
thereafter they can buy or sell the units of the scheme on the stock exchanges
where they 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 the investor.

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

31
BY NATURE

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

• Diversified Equity Funds

• Mid-Cap Funds
• Sector Specific Funds
• Tax Savings Funds (ELSS)

Equity investments are meant for a longer time horizon, thus Equity funds rank
high on the riskreturn matrix.

2. Debt Funds:
The objective of these Funds is to invest in debt papers. Government authorities,
private companies, banks and financial institutions are some of the major issuers of
debt papers. By investing in debt instruments, these funds ensure low risk and
provide stable income to the investors. Debt funds are further classified as:
• Gilt Funds: Invest their corpus in securities issued by Government,
popularly known as Government of India debt papers. These Funds carry
zero Default risk but are associated with Interest Rate risk. These schemes
are safer as they invest in papers backed by Government.

32
 • Income Funds: Invest a major portion into various debt instruments such as
bonds, corporate debentures and Government securities.

• MIPs: Invests maximum of their total corpus in debt instruments while they
take minimum exposure in equities. It gets benefit of both equity and debt
market. These scheme ranks slightly high on the risk-return matrix when
compared with other debt schemes.
• Short Term Plans (STPs): Meant for investment horizon for three to six
months. These funds primarily invest in short term papers like Certificate of
Deposits (CDs) and Commercial Papers (CPs). Some portion of the corpus is
also invested in corporate debentures.

• Liquid Funds: Also known as Money Market Schemes, These funds

provides easy liquidity and preservation of capital. These schemes invest in
short-term instruments like Treasury Bills, inter-bank call money market,
CPs and CDs. These funds are meant for short-term cash management of
corporate houses and are meant for an investment horizon of 1day to 3
months. These schemes rank low on risk-return matrix and are considered to
be the safest amongst all categories of mutual funds.

3. Balanced Funds:
As the name suggest they, are a mix of both equity and debt funds. They invest in
both equities and fixed income securities, which are in line with pre-defined
investment objective of the scheme. These schemes aim to provide investors with
the best of both the worlds. Equity part provides growth and the debt part provides
stability in returns.

33
Further the mutual funds can be broadly classified on the basis of investment
parameter viz, Each category of funds is backed by an investment philosophy,
which is pre-defined in the objectives of the fund. The investor can align his own
investment needs with the funds objective and invest accordingly.

BY INVESTMENT OBJECTIVE

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

Income Schemes:
Income Schemes are also known as debt schemes. The aim of these schemes is to
provide regular and steady income to investors. These schemes generally invest in
fixed income securities such as bonds and corporate debentures. Capital
appreciation in such schemes may be limited.
Balanced Schemes:
Balanced Schemes aim to provide both growth and income by periodically
distributing a part of the income and capital gains they earn. These schemes invest
in both shares and fixed income securities, in the proportion indicated in their offer
documents (normally 50:50).

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

Load Funds:
A Load Fund is one that charges a commission for entry or exit. That is, each time
you buy or sell units in the fund, a commission will be payable. Typically entry and
exit loads range from 1% to 2%. It could be worth paying the load, if the fund has a
good performance history.

No-Load Funds:
A No-Load Fund is one that does not charge a commission for entry or exit. That
is, no commission is payable on purchase or sale of units in the fund. The
advantage of a no load fund is that the entire corpus is put to work.

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 OTHER SCHEMES

Tax Saving Schemes:

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

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

Sector Specific Schemes:

These are the funds/schemes which invest in the securities of only those sectors or
industries as specified in the offer documents. e.g. Pharmaceuticals, Software, Fast
Moving Consumer Goods (FMCG), Petroleum stocks, etc. The returns in these
funds are dependent on the performance of the respective sectors/industries. While
these funds may give higher returns, they are 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.

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 NET ASSET VALUE (NAV)

Since each owner is a part owner of a mutual fund, it is necessary to establish the
value of his part. In other words, each share or unit that an investor holds needs to
be assigned a value. Since the units held by investor evidence the ownership of the
fund’s assets, the value of the total assets of the fund when divided by the total
number of units issued by the mutual fund gives us the value of one unit. This is
generally called the Net Asset Value (NAV) of one unit or one share. The value of
an investor’s part ownership is thus determined by the NAV of the number of units
held.

Calculation of NAV:
Let us see an example. If the value of a fund’s assets stands at Rs. 100 and it has 10
investors who have bought 10 units each, the total numbers of units issued are 100,
and the value of one unit is Rs. 10.00 (1000/100). If a single investor in fact owns 3
units, the value of his ownership of the fund will be Rs. 30.00(1000/100*3). Note
that the value of the fund’s investments will keep fluctuating with the market-price
movements, causing the Net Asset Value also to fluctuate.
For example, if the value of our fund’s asset increased from Rs. 1000 to 1200, the
value of our investors holding of 3 units will now be (1200/100*3) Rs. 36. The
investment value can go up or down, depending on the markets value of the fund’s
assets.

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 SELECTION PARAMETERS FOR MUTUAL FUND

Your objective:
The first point to note before investing in a fund is to find out whether your
objective matches with the scheme. It is necessary, as any conflict would directly
affect your prospective returns. Similarly, you should pick schemes that meet your
specific needs. Examples: pension plans, children’s plans, sector-specific schemes,
etc.

Your risk capacity and capability:

This dictates the choice of schemes. Those with no risk tolerance should go for
debt schemes, as they are relatively safer. Aggressive investors can go for equity
investments. Investors that are even more aggressive can try schemes that invest in
specific industry or sectors.

Fund Manager’s and scheme track record:

Since you are giving your hard earned money to someone to manage it, it is
imperative that he manages it well. It is also essential that the fund house you
choose has excellent track record. It also should be professional and maintain high
transparency in operations. Look at the performance of the scheme against relevant
market benchmarks and its competitors. Look at the performance of a longer
period, as it will give you how the scheme fared in different market conditions.

Cost factor:
Though the AMC fee is regulated, you should look at the expense ratio of the fund
before investing. This is because the money is deducted from your investments. A

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higher entry load or exit load also will eat into your returns. A higher expense ratio
can be justified only by superlative returns. It is very crucial in a debt fund, as it
will devour a few percentages from your modest returns.

MUTUAL FUNDS DISTRIBUTION CHANNELS

Investors have varied investment objectives and can be classified as aggressive,
moderate and conservative, depending on their risk profile. For each of these
categories, asset management companies (AMCs) devise different types of fund
schemes, and it is important for investors to buy those that match their investment
goals.
Funds are bought and sold through distribution channels, which play a significant
role in explaining to the investors the various schemes available, their investment
style, costs and expenses. There are two types of distribution channels-direct and
indirect. In case of the former, the investors buy units directly from the fund AMC,
whereas indirect channels include the involvement of agents. Let us consider these
distribution channels in detail.

Direct channel

This is good for investors who do not need the advisory services of agents and are
well-versed with the fundamentals of the fund industry. The channel provides the
benefit of low cost, which significantly enhances the returns in the long run.

Indirect channel

This channel is widely prevalent in the fund industry. It involves the use of agents,
who act as intermediaries between the fund and the investor. These agents are not
exclusive for mutual funds and can deal in multiple financial instruments. They
have an in-depth knowledge about the functioning of financial instruments and are
in a position to act as financial advisers. Here are some of the players in the
indirect distribution channels.

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 a) Independent financial advisers (IFA):
These are individuals trained by AMCs for selling their products. Some IFAs
are professionally qualified CFPs (certified financial planners). They help
investors in choosing the right fund schemes and assist them in financial
planning. IFAs manage their costs through the commissions that they earn by
selling funds.

b) Organized distributors:
They are the backbone of the indirect distribution channel. They have the
infrastructure and resources for managing administrative paperwork, purchases
and redemptions. These distributors cater to the diverse nature of the investor
community and the vast geographic spread of the country by establishing
offices in rural and semi urban locations.

c) Banks:
They use their network to sell mutual funds. Their existing customer base
serves as a captive prospective investor base for marketing funds. Banks also
handle wealth management for their clients and manage portfolios where
mutual funds are one of the asset classes. The players in the indirect channel
assist investors in buying and redeeming fund units.

They try to understand the risk profile of investors and suggest fund schemes that
best suits their objectives. The indirect channel should be preferred over the direct
channel when investors want to seek expert advice on the risk-return mix or need
help in understanding the features of the financial securities in which the fund
invests as well as other important attributes of mutual funds, such as benchmarking
and tax treatment.

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 WORKING OF MUTUAL FUNDS

The mutual fund collects money directly or through brokers from investors. The
money is invested in various instruments depending on the objective of the scheme.
The income generated by selling securities or capital appreciation of these
securities is passed on to the investors in proportion to their investment in the
scheme. The investments are divided into units and the value of the units will be
reflected in Net Asset Value or NAV of the unit. NAV is the market value of the
assets of the scheme minus its liabilities. The per unit NAV is the net asset value of
the scheme divided by the number of units outstanding on the valuation date.
Mutual fund companies provide daily net asset value of their schemes to their
investors. NAV is important, as it will determine the price at which you buy or
redeem the units of a scheme. Depending on the load structure of the scheme, you
have to pay entry or exit load.

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 REGULATORY STRUCTURE OF MUTUAL FUNDS IN INDIA

The structure of mutual funds in India is guided by the SEBI. Regulations,

1996.These regulations make it mandatory for mutual fund to have three structures
of sponsor trustee and asset Management Company. The sponsor of the mutual
fund and appoints the trustees. The trustees are responsible to the investors in
mutual fund and appoint the AMC for managing the investment portfolio. The
AMC is the business face of the mutual fund, as it manages all the affairs of the
mutual fund. The AMC and the mutual fund have to be registered with SEBI.

MUTUAL FUNDS IN INDIA

In 1963, the day the concept of Mutual Fund took birth in India. 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 were accustomed with guaranteed
high returns by the beginning 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 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 was rather no choice 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 scandal, the losses by disinvestments and of course the lack of transparent
rules in the whereabouts 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 1020 percent of their net asset value.
The securities and Exchange Board of India (SEBI) came out with comprehensive
regulation in 1993 which defined the structure of Mutual Fund and Asset
Management Companies for the first time.
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.
Several private sectors Mutual Funds were launched in 1993 and 1994. The share
of the private players has risen rapidly since then. Currently there are 34 Mutual
Fund organizations in India managing 1,02,000 crores.
At last to mention, as long as mutual fund companies are performing with lower
risks and higher profitability within a short span of time, more and more people

43
will be inclined to invest until and unless they are fully educated with the dos and
don’ts of mutual funds.
Mutual fund industry has seen a lot of changes in past few years with multinational
companies coming into the country, bringing in their professional expertise in
managing funds worldwide. In the past few months there has been a consolidation
phase going on in the mutual fund industry in India. Now investors have a wide
range of Schemes to choose from depending on their individual profiles.

MUTUAL FUND COMPANIES IN INDIA

The concept of mutual funds in India dates back to the year 1963. The era between
1963 and 1987 marked the existence of only one mutual fund company in India
with Rs. 67bn assets under management (AUM), by the end of its monopoly era,
the Unit Trust of India (UTI). By the end of the 80s decade, few other mutual fund
companies in India took their position in mutual fund market.
The new entries of mutual fund companies in India were SBI Mutual Fund,
Canbank Mutual Fund, Punjab National Bank Mutual Fund, Indian Bank Mutual
Fund, Bank of India Mutual Fund.
The succeeding decade showed a new horizon in Indian mutual fund industry. By
the end of 1993, the total AUM of the industry was Rs. 470.04 bn. The private
sector funds started penetrating the fund families. In the same year the first Mutual
Fund Regulations came into existance with re-registering all mutual funds except
UTI. The regulations were further given a revised shape in 1996.

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Kothari Pioneer was the first private sector mutual fund company in India which
has now merged with Franklin Templeton. Just after ten years with private sector
players penetration, the total assets rose up to Rs. 1218.05 bn. Today there are 33
mutual fund companies in India.

Top 10 Mutual Funds in India 2023

In this article, we have summarized the top mutual funds by picking one from each of
the categories, so as to suit the risk appetite and investment goals of most of the
investors.

• ICICI Prudential Focused Bluechip Equity Fund

• Aditya Birla Sun Life Small & Midcap Fund
• Tata Equity PE Fund
• HDFC Monthly Income Plan – MTP
• L&T Tax Advantage Fund
• SBI Nifty Index Fund
• Kotak Corporate Bond Fund
• Canara Robeco Gilt PGS
• DSP BlackRock Balanced Fund
• Axis Liquid Fund

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 Market Share

FUTURE PROSPECT OF MUTUAL FUNDS IN INDIA

Financial experts believe that the future of Mutual Funds in India will be very bright.
It has been estimated that by March-end of 2018, the mutual fund industry of India
will reach Rs 40,90,000 crore, taking into account the total assets of the Indian
commercial banks. In the coming 10 years the annual composite growth rate is
expected to go up by 13.4%.

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 • 100% growth in the last 6 years.
• Number of foreign AMC's are 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 45 mutual funds companies with different schemes
which is much less than US having more than 800. There is a big scope for
expansion.
• '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 rurals like the Indian insurance industry with
simple and limited products.
• SEBI allowing the MF's to launch commodity mutual funds.
• Emphasis on better corporate governance.
• Trying to curb the late trading practices.
• Introduction of Financial Planners who can provide need based advice.

Looking at the past developments and combining it with the current trends it can be
concluded that the future of Mutual Funds in India has lot of positive things to offer
to its investors.

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 My Experience

. Nice Experience

. Good place for freshers

. Supportive members

. Good atmosphere to work at.

. Friendly & adaptable

My Learning in the Company

I have learned a lot of things when I worked in Edufund as an intern. Before I

joined Edufund I had very less knowledge about Mutual Fund and how it
functions.

I learned how important being punctual to the office was. Interning at Edufund
gave me an experience of working in a very friendly work environment. All the
employees treated me as one of the employees and not as an intern or a
studentGenerate new leads and continually increase volume of sales.

• Selling Skills.
• Participating in weekly meetings.
• Build rapport and develop relationships with potential clients.
• Meeting & Greeting.
• Help promote the company’s services through social media.
• Data Calling.
• Brand Promotion.

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 CONCLUSION

Mutual Funds now represent perhaps most appropriate investment opportunity for
most investors. As financial markets become more sophisticated and complex,
investors need a financial intermediary who provides the required knowledge and
professional expertise on successful investing. As the investor always try to
maximize the returns and minimize the risk. Mutual fund satisfies these
requirements by providing attractive returns with affordable risks. The fund
industry has already overtaken the banking industry, more funds being under
mutual fund management than deposited with banks. With the emergence of tough
competition in this sector mutual funds are launching a variety of schemes which
caters to the requirement of the particular class of investors. Risk takers for getting
capital appreciation should invest in growth, equity schemes. Investors who are in
need of regular income should invest in income plans.

The stock market has been rising for over three years now. This in turn has not only
protected the money invested in funds but has also to helped grow these
investments.

This has also instilled greater confidence among fund investors who are investing
more into the market through the MF route than ever before.

Reliance India mutual funds provide major benefits to a common man who wants
to make his life better than previous.

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The mutual fund industry as a whole gets less than 2 per cent of household savings
against the 46 per cent that go into bank deposits. Some fund managers say this
only indicates the sector's potential. "If mutual funds succeed in chipping away
at bank deposits, even a triple digit growth is possible over the next few years.

BIBLIOGRAPHY

www.google.com
http://www.slideshare.net/hemanthcrpatna/a-project-report-on-comparative-study-
of-mutualfunds-in-india

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