a project report on need of financial advisor for mutual fund
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2011-12
SUBMITTED TO
RAJIV KAPOOR SIR
A PROJECT REPORT
ON
“NEED OF FINANCIAL ADVISOR IN MUTUAL FUND”
TABLE OF CONTENT
S.No. PARTICULAR PAGE NO.
1 Acknowledgement 3
2 Declaration 4
3 Certificate 5
4 Executive summary 6
5 Introduction 8
6 Company profile 17
7 Objectives and scope 37
8 Research methodology 399 Data analysis and interpretation 4310 Findings and conclusions 5511 Suggestions & recommendations 57
12 Bibliography 59
RIBS,BHILAI Page 2
ACKNOWLEDGEMENT
It is my proud privilege to express my sincere gratitude to all those who
helped me directly or indirectly in completion of this project report.
I am greatly thankful to Mr. DIVYADITYA KOTHARI (Director RIBS) and
MR. RAJIV KAPOOR (Dean RIBS) for his support, guidance and valuable
suggestion by which this work has been completed effectively and efficiently.
I also very thankful to Mr. PRASOON JAIN(Cluster head of RMF),MISS
AMRITA SHAHI (RM OF RMF)Mr. AKASH MAHAKALKAR (RM OF
RMF) and all other reliance mutual fund relationship managers whose
continuous cooperation throughout the study was fabulous . Their charismatic
attitude made this study joyful and interesting.
HABIB-UR-REHMAN
3rd SEM .MBA (FINANCE)
RENAISSANCE INDRA BUSINESS SCHOOL,
Bhilai.(CG)
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DECLERATION
I “HABIB-UR-REHMAN” student of “ Renaissance Indra Business
School Bhilai (C.G)” hereby declare that this project “Need Of Financial
Adviser In Mutual Fund” is original task performed by me under the able
guidance of MR.DIVYADITYA KOTHARI SIR , MR.RAJEEV
KAPOOR SIR(DEAN) , ALL FACULTIES OF RIBS AND Mr.
PRASOON JAIN (Cluster head of RMF),MISS AMRITA SHAHI (RM OF
RMF)Mr. AKASH MAHAKALKAR (RM OF RMF).
This is after undergoing training program in partial fulfillment of MBA
degree. And I also declare that this has not been submitted by any other student.
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CERTIFICATE
This is to certify that Mr. HABIB-UR-RAHMAN has successfully
completed the summer training in partial fulfillment of requirement for the
award of PGP Degree prescribed by the RENAISSANCE INDRA BUSINESS
SCHOOL, Bhilai.
This report is the record of authentic work carried out by the student
during the academic year 2011-2012
Mr. PRASOON JAIN
(Cluster head of RMF),
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Executive summaryI started my training from 1st of august 2011 the concept of my topic is to know how important is the role of financial advisor in mutual fund .At very first day we just given classroom training there we learned about the mutual fund from the day fifth we were in the market.
In few years Mutual Fund has emerged for ensuring one of the best return tools. Mutual Funds have not only contributed to the India growth story but have also helped families to achieve their success of Indian Industry. As information and awareness is rising more and more people are enjoying the benefits of investing in mutual funds. The main reason the number of retail mutual fund investors remains small is that nine in ten people with incomes in India do not know that mutual funds exist, but once people are aware of mutual fund investment opportunities, the number who decide to invest in mutual funds increases to as many as one in five people. The trick for converting a person with no knowledge of mutual funds to a new Mutual Fund customer is to understand which of the potential investors are more likely to buy mutual funds and to use the right things in the sales process that customers will accept as important and relevant to their decision. There is popular saying’’ sold only that attributes which consumer want’’.
The topic of the project has been given by project guide Ms. AMRITA SHAHI (relationship manager) reliance mutual fund, Raipur branch. As per our discussion the topic has been found very important as far as in reliance mutual fund. So being a summer trainee of reliance mutual fund Raipur branch, it was a great opportunity for me to take up this topic as a challenge, because the result of this project or survey will be very much beneficial for me as well as company too. They will get to know about their strength and they will know that how much of market they have captured.
I used to go out to the market for selling interaction the products of the reliance and Due to this I grab great experience to communicate with different types of customers, which was really good experience and will help me in my future course of life. The major part of my training is I went to business people, doctor’s and many more. . During the selling I found some difficulties like the customers had no time or they were too busy with their works and in most of the cases they were not available at their places.
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This Project gave me a great learning experience and at the same time it gave me enough scope to implement my analytical ability. The analysis and advice presented in this Project Report is based on market research on the saving and investment practices of the investors and preferences of the investors for investment in Mutual Funds. This Report will help to know about the investors’ Preferences in Mutual Fund means why they prefer any particular Asset Management Company (AMC), Which type of Product they prefer, Which Option (Growth or Dividend) they prefer or Which Investment Strategy they follow (Systematic Investment Plan or One time Plan).
It was great opportunity that we attended 2 training program the name of such are LDGM (LOST DUTHMAN GOLD MINE) program conducted by reliance national training head MIHIR SHAH in this program we experienced how to increase ROI(return on investment. This program especially designed for bankers we took part into that as a provisionary concept they used in program was mind blowing.
It was our great pleasure that we also attended training programmed of debt that was basically designed for IFA (institute of financial advisor) in this session we learned money market instrument and debt composition funds.
There is one thing that I have found that the peoples working at reliance mutual fund are very much helpful in all areas. Every time they came to me and told me that they are available at any time for us for anything, which really boost me and motivated me towards my goal and objectives. The culture of reliance mutual fund is very much friendly and cool to work there. The boss or cluster head as well as Branch relationship manager together play a vital role to boost their colleagues.
INTRODUCTION TO MUTUAL FUNDRIBS,BHILAI Page 7
Mutual fund is a trust that pools the savings of a number of investors
who share a common financial goal. This pool of money is invested in
accordance with a stated objective. The joint ownership of the fund is thus
“Mutual”, i.e. the fund belongs to all investors. The money thus collected
is then invested in capital market instruments such as shares, debentures
and other securities. The income earned through these investments and the
capital appreciations realized are shared by its unit holders in proportion
the number of units owned by them. Thus a Mutual Fund is the most
suitable investment for the common man as it offers an opportunity to
invest in a diversified, professionally managed basket of securities at a
relatively low cost. A Mutual Fund is an investment tool that allows small
investors access to a well-diversified portfolio of equities, bonds and other
securities. Each shareholder participates in the gain or loss of the fund.
Units are issued and can be redeemed as needed. The fund’s Net Asset
value (NAV) is determined each day.
Investments in securities are spread across a wide cross-section of
industries and sectors and thus the risk is reduced. Diversification reduces
the risk because all stocks may not move in the same direction in the same
proportion at the same time. Mutual fund issues units to the investors in
accordance with quantum of money invested by them. Investors of mutual
funds are known as unit holders.
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When an investor subscribes for the units of a mutual fund, he becomes part owner of the assets of the fund in the same proportion as his contribution amount put up with the corpus (the total amount of the fund). Mutual Fund investor is also known as a mutual fund shareholder or a unit holder.Any change in the value of the investments made into capital market instruments (such as shares, debentures etc) is reflected in the Net Asset Value (NAV) of the scheme. NAV is defined as the market value of the Mutual Fund scheme's assets net of its liabilities. NAV of a scheme is calculated by dividing the market value of scheme's assets by the total number of units issued to the investors.
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ADVANTAGES OF MUTUAL FUND
Portfolio Diversification
Professional management
Reduction / Diversification of Risk
Liquidity
Flexibility & Convenience
Reduction in Transaction cost
Safety of regulated environment
Choice of schemes
Transparency
DISADVANTAGE OF MUTUAL FUND
No control over Cost in the Hands of an Investor
No tailor-made Portfolios
Managing a Portfolio Funds
Difficulty in selecting a Suitable Fund Scheme
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HISTORY OF MUTUAL FUND IN INDIA
The mutual fund industry in India started in 1963 with the formation of Unit Trust of India, at the initiative of the Government of India and Reserve Bank. Though the growth was slow, but it accelerated from the year 1987 when non-UTI players entered the Industry.
In the past decade, Indian mutual fund industry had seen a dramatic improvement, both qualities wise as well as quantity wise. Before, the monopoly of the market had seen an ending phase; the Assets Under Management (AUM) was Rs67 billion. The private sector entry to the fund family raised the Amount to Rs. 470 billion in March 1993 and till April 2004; it reached the height if Rs. 1540 billion.
The Mutual Fund Industry is obviously growing at a tremendous space with the mutual fund industry can be broadly put into four phases according to the development of the sector. Each phase is briefly described as under.
First Phase – 1964-87
Unit Trust of India (UTI) was established on 1963 by an Act of Parliament by the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial Development Bank of India (IDBI) took over the regulatory and administrative control in place of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6,700 crores of assets under management.
Second Phase – 1987-1993 (Entry of Public Sector Funds)
1987 marked the entry of non- UTI, public sector mutual funds set up by public sector banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC). SBI Mutual Fund was the first non- UTI Mutual Fund established in
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June 1987 followed by Can bank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC established its mutual fund in June 1989 while GIC had set up its mutual fund in December 1990.At the end of 1993, the mutual fund industry had assets under management of Rs.47,004 crores.
Third Phase – 1993-2003 (Entry of Private Sector Funds)
1993 was the year in which the first Mutual Fund Regulations came into being, under which all mutual funds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993.
The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI (Mutual Fund) Regulations 1996. As at the end of January 2003, there were 33 mutual funds with total assets of Rs. 1,21,805 crores.
Fourth Phase – since February 2003
In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust of India with assets under management of Rs.29,835 crores as at the end of January 2003, representing broadly, the assets of US 64 scheme, assured return and certain other schemes
The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is registered with SEBI and functions under the Mutual Fund Regulations. consolidation and growth. As at the end of September, 2004, there were 29 funds, which manage assets of Rs.153108 crs under 421 schemes
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CLASSIFICATION OF MUTUAL FUND
Mutual funds can be classified as follow :
Based on their structure:
Open-ended funds: Investors can buy and sell the units from the fund, at any point of time.
Close-ended funds: These funds raise money from investors only once. Therefore, after the offer period, fresh investments can not be made into the fund. If the fund is listed on a stocks exchange the units can be traded like stocks (E.g., Morgan Stanley Growth Fund). Recently, most of the New Fund Offers of close-ended funds provided liquidity window on a periodic basis such as monthly or weekly. Redemption of units can be made during specified intervals. Therefore, such funds have relatively low liquidity.
Based on their investment objective:Equity funds: These funds invest in equities and equity related instruments. With fluctuating share prices, such funds show volatile performance, even losses. However, short term fluctuations in the market, generally smoothens out in the long term, thereby offering higher returns at relatively lower volatility. At the same time, such funds can yield great capital appreciation as, historically, equities have outperformed all asset classes in the long term. Hence, investment in equity funds should be considered for a period of at least 3-5 years. It can be further classified as:
i) Index funds- In this case a key stock market index, like BSE Sensex or Nifty is tracked. Their portfolio mirrors the benchmark index both in terms of composition and individual stock weightings.
ii) Equity diversified funds- 100% of the capital is invested in equities spreading across different sectors and stocks.
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iii|) Dividend yield funds- it is similar to the equity diversified funds except that they invest in companies offering high dividend yields.
iv) Thematic funds- Invest 100% of the assets in sectors which are related through some theme.e.g. -An infrastructure fund invests in power, construction, cements sectors etc.
v) Sector funds- Invest 100% of the capital in a specific sector. e.g. - A banking sector fund will invest in banking stocks.
vi) ELSS- Equity Linked Saving Scheme provides tax benefit to the investors.
Balanced fund: Their investment portfolio includes both debt and equity. As a result, on the risk-return ladder, they fall between equity and debt funds. Balanced funds are the ideal mutual funds vehicle for investors who prefer spreading their risk across various instruments. Following are balanced funds classes:
i) Debt-oriented funds -Investment below 65% in equities.
ii) Equity-oriented funds -Invest at least 65% in equities, remaining in debt.
Debt fund: They invest only in debt instruments, and are a good option for investors averse to idea of taking risk associated with equities. Therefore, they invest exclusively in fixed-income instruments like bonds, debentures, Government of India securities; and money market instruments such as certificates of deposit (CD), commercial paper (CP) and call money. Put your money into any of these debt funds depending on your investment horizon and needs.
i) Liquid funds- These funds invest 100% in money market instruments, a large portion being invested in call money market.
ii) Gilt funds ST- They invest 100% of their portfolio in government securities of and T-bills.
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iii) Floating rate funds - Invest in short-term debt papers. Floaters invest in debt instruments which have variable coupon rate.
iv) Arbitrage fund- They generate income through arbitrage opportunities due to mis-pricing between cash market and derivatives market. Funds are allocated to equities, derivatives and money markets. Higher proportion (around 75%) is put in money markets, in the absence of arbitrage opportunities.
v) Gilt funds LT- They invest 100% of their portfolio in long-term government securities.
vi) Income funds LT- Typically, such funds invest a major portion of the portfolio in long-term debt papers.
vii) MIPs- Monthly Income Plans have an exposure of 70%-90% to debt and an exposure of 10%-30% to equities.
viii) FMPs- fixed monthly plans invest in debt papers whose maturity is in line with that of the fund.
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INVESTMENT STRATEGIES
1. Systematic Investment Plan:
Under this a fixed sum is invested each month on a fixed date of a month. Payment is made through post dated cheques or direct auto debit facilities. The investor gets fewer units when the NAV is high and more units when the NAV is low. This is called as the benefit of Rupee Cost Averaging (RCA)
2. Systematic Transfer Plan:
Under this an investor invests in debt oriented fund and gives instructions to transfer a fixed sum, at a fixed interval, to an equity scheme of the same mutual fund.
3. Systematic Withdrawal Plan:
If someone wishes to withdraw from a mutual fund then he can withdraw a fixed amount each month
RISK AND RETURN ANALYSIS OF VARIOUS FUNDS
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COMPANY PROFILE
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COMPANY PROFIE:-
Reliance Capital Limited (RCL) was incorporated in year 1986 at
Ahmadabad in Gujarat as Reliance Capital & Maharashtra, in 2006.
In 2006, Reliance Capital Ventures Limited merged with RCL and with
this merger the shareholder base of RCL rose from 0.15 million Finance Trust
Limited. The name RCL came into effect from January 5, 1995. In 2002, RCL
shifted its registered office to Jamnagar in Gujarat before it finally moved to
Mumbai in shareholders to 1.3 million.
RCL entered the Capital Market with a maiden public issue in 1990 and
in subsequent years further tapped the capital market through rights issue and
public issues. The equity shares were initially listed on the Ahmadabad Stock
Exchange and The Stock Exchange Mumbai. Presently the shares are listed on
The Stock Exchange Mumbai and the National Stock Exchange of India.
RCL was accredited a Category 1 Merchant banker by the Securities
Exchange Board of India (SEBI). It had lead managed/co-managed 15 issues of
an aggregate value of Rs. 400 crore and had underwritten 33 issues for an
aggregate value of Rs.550 crore. All these companies were listed on various
exchanges.
RCL obtained its registration as a Non-banking Finance Company
(NBFC) in December 1998. In view of the regulatory requirements RCL
surrendered its Merchant Banking License.
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TOP MANAGEMENT PROFILE
TOP MANAGEMENT PROFILE
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Reliance Capital is anchored by a team of experienced and committed
visionaries who are dedicated towards scaling the company to greater
heights through innovation and excellence; thereby creating value for all
our stakeholders.
Amit Bapna (Chief Financial Officer, Reliance Capital)
Arun Hariharan (President, Quality and Knowledge Management, Reliance Capital)
K. Achuthan (Chief People Officer, Reliance Capital)
K. V. Srinivasan (Chief Executive Officer, Reliance Commercial Finance)
Madhusudan Kela (Chief Investment Strategist, Reliance Capital)
Malay Ghosh (Executive Director & President, Reliance Life Insurance Company)
Rajnikant Patel (President and Chief Executive Officer, Reliance Spot Exchange)
Sam Ghosh (Chief Executive Officer, Reliance Capital)
Sandeep Phanasgaonkar (Chief Technology Officer, Reliance Capital)
Sanjay Jain (Chief Marketing Officer, Reliance Capital)
Sundeep Sikka (Chief Executive Officer, Reliance Capital Asset Management)
Vijay Pawar (Executive Director & Chief Executive Officer, Reliance General Insurance)
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V. R. Mohan (Company Secretary, Reliance Capital)
Vision
Reliance Capital's vision is that:
By 2012, it will be a company that is known as:
"And most trusted financial services company in India and in the
emerging markets".
In doing so, the company expects to reach the following targets by
2012:
1. 50 million customers.
2. 75,000 employees
3. A profit after tax of Rs. 5,000 crore for that financial year.
4. A valuation of Rs. 100,000 crore for the company and its
subsidiary businesses.
In achieving this vision, the company will be both customer-centric
and innovation-driven.
Reliance Capital Ltd. is one of India’s leading and fastest growing
private sector financial
Services companies, and ranks among the top 3 private sector
financial services and banking companies, in terms of net worth.
Reliance Capital Ltd. has interests in asset management,
Life and general insurance, private equity and proprietary
investments, stock broking and other financial services
RIBS,BHILAI Page 21
RELIANCE MUTUAL FUND PRODUCTS
A)EQUITY
B)DEBT
C)GOLD
A)EQUITY-
The aim of growth funds is to provide capital appreciation over the
medium to long- term. Such schemes normally invest a major part
of their corpus in equities. Such funds have comparatively high
risks. These schemes provide different options to the investors like
dividend option, capital appreciation, etc. and the investors may
choose an option depending on their preferences. The investors
must indicate the option in the application form. The mutual funds
also allow the investors to change the options at a later date.
Growth schemes are good for investors having a long-term outlook
seeking appreciation over a period of time.
TYPES OF EQUITY FUND
1 Diversified large cap 5 Diversified
theme base
2 Diversified mid and small cap 6 Sector fund
3 Index fund 7 Arbitrage
4 Banking fund 8Tax saver
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9 Balanced
fund
1)DIVERSIFIED LARGE CAP FUNDS -:
(A) Reliance Quant Plus Fund: -
A Moderate Large-cap Oriented Fund. It is actively managed
Quant based fund focusing on constituents of S&P CNX Nifty
Index. It is this fund is suitable for those investors who are seeking
capital appreciation and growth vis-à-vis the benchmark index in
all market conditions by investing in a concentrated active
portfolio of frontline stocks which is constructed on the basis of a
mathematical model. The fund can be viewed as an additional asset
allocation option by the investors.
(B) Reliance Top 200 Fund:-
A Conservative Large cap Oriented Fund. The Scheme will invest
in equity or equity related instruments of companies whose market
capitalization is within the range of highest & lowest market
capitalization of BSE 200 Index. The selection of the companies
will be done so as to capture the growth in the Indian economy.
The fund will be focusing on companies having good liquidity in
the stock market.
(C) Reliance NRI Equity Fund: -
A Conservative Large cap Oriented Fund. It is an exclusive
offering for NRIs having a large cap oriented portfolio with focus
on stable companies. It is reliance NRI Equity Fund is suitable for
NRI investors who are seeking exposure to diversified equity space
to participate in the strong trajectory of India growth story.
RIBS,BHILAI Page 23
(D) Reliance Equity Fund: -
A Moderate Large-cap Oriented Fund. It is large-cap Fund that
aims to capitalize on long and short opportunities. It is a useful
product in every investors portfolio as it intends to reduce volatility
and reduce downside risks by using innovative P/E based
hedging/shorting strategies
(E) Reliance Vision Fund: -
A Moderate Large-cap Oriented Fund. It is large-cap fund with a
small. exposure to mid cap stocks. It is the fund is ideal for those
investors who are
Reliance Long Term Equity Fund:-
An Aggressive Mid cap and small-cap Oriented Fund. It is poised
to Take Benefits of Opportunities in Mid Caps and Small Caps. It
is ideal for those investors who want to capitalize on opportunities
in small and mid cap space with a long term investment horizon of
RIBS,BHILAI Page 24
2 DIVERSIFIED MID AND SMALL CAP
Reliance Growth Fund:-
A Moderate Mid cap Oriented Fund. It is mid-cap Fund with small exposure
to large cap stocks. It is the fund is ideal for those investors who are seeking
a higher exposure to mid-cap s tocks for capital appreciation & growth and
considerably lower exposure to debt markets for consistent return.
more than 3 years.
Reliance Small Cap Fund:-
A Very Aggressive small- cap oriented fund. It is a relatively high
risk/high return oriented fund which shall predominantly invest in
small cap companies/stocks with an objective to maximize the
returns and at the same time trying to minimize the risk by
reasonable diversification. Small Cap stocks for the purpose of the
Fund, are stocks whose market capitalization is in between the
highest and lowest market capitalization of companies on BSE
Small Cap Index at the time of investment. Reliance Small Cap
Fund will be a vital part of an investor's core portfolio that aims to
create an alpha for his/her investments.
3 INDEX FUND -
Reliance Index Fund Sensex Plan:
A Conservative Large Cap Oriented Index Linked Fund. It is
passively managed fund which aims to mirror BSE SENSEX so as
to commensurate with the performance of the underlying Index,
subject to tracking errors. It is ideal for those investors who would
like to participate in the India growth story by investing in well-
diversified portfolio of well large cap company.
4 BANKING EXCHANGE TRADED FUND-:
Reliance Banking Exchange Traded Fund: -
The investment objective of Reliance Banking Exchange Traded
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Fund (RBETF) is to provide returns that, before expenses, closely
correspond to the total returns of the securities as represented the
CNX Bank Index. However, the performance of Scheme may
differ from that of the underlying index due to tracking error.
5 THEME BASE-:
Reliance Infrastructure Fund: -
A Moderate Multi cap Oriented Fund. It is the fund aims to invest
in companies operating & listed in India engaged in infrastructure
& infrastructure related activities. It follows a multi cap strategy
with a medium to long term investment horizon. It is a product for
those investors who want to take exposure in India's infrastructure
growth story with a medium to long term investment horizon.
Reliance Natural Resources Fund: -
An Aggressive Large Cap Oriented Fund. It is large cap oriented
fund that allows the investor to participate in Indian and Global
stocks of issuers in natural resources industries. The fund does not
invest in natural resources themselves. It is the fund is ideal for
those investors who want to invest in those sectors which are
scarcely available in Indian & Global Markets
6 SECTOR-:
Reliance Banking Fund: -
A Moderate Multi cap Oriented Fund. It is the fund aims to
generate consistent returns by investing in equity / equity related or
fixed income securities of companies belonging to the Banking
Sector. The fund follows an active strategy of management with
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endeavor to generate alpha and outperform the Banking Index.
Reliance Diversified Power Sector Fund: -
A Moderate Multi cap Oriented Fund. It is the fund focuses on
companies related to power sector. It provides opportunity to
diversify within the sector, with focused approach and flexibility to
invest in power distribution, transmission and generation related
companies.
Reliance Media Entertainment Fund: -
A Moderate Multi cap Oriented Fund. It is a sector specific fund
which focuses on investing in companies related to media &
entertainment sector.
Reliance Pharma Fund:-
A Moderate Multi cap Oriented Fund. It is a dynamic asset
allocation sector fund which aims to generate consistent returns by
investing in all important segments of the pharmaceutical industry.
7 TAX SAVER-:
Reliance Tax Saver (ELSS) Fund: -
An Aggressive Large cap Mid Cap Oriented Fund. It is the fund is
an open ended equity linked savings scheme which gives dual
advantage of tax savings & growth potential. It is a large cap
orientated fund which aims to have a mix of minimum 50%
exposure to top 100 companies by market capitalization and high
quality mid cap companies. It is this fund is ideal offering for
investors who are seeking exposure to equity to participate in the
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India Story and the Indian markets in the diversified equity space
as well as who want to take advantage of the tax benefit availed
under Section 80C of Income Tax Act 1961.
Reliance Equity Linked Saving Fund Series 1:-
(A 10 year close-ended Equity Linked Savings Scheme) The
primary objective of the scheme is to generate long-term capital
appreciation from a portfolio that is invested predominantly in
equities along with income tax benefit.
8.R ELIANCE ARBITRAGE ADVANTAGE FUND: -
A Conservative Arbitrage Fund. It is the fund aims to generate
income through arbitrage opportunities arising out of pricing
mismatch in a security between cash and derivative segment and
with derivatives segment along with investments in debt securities
and money market instruments. It is reliance Arbitrage Advantage
Fund would prove to be an apt product for those investors who
want to remain conservative and invest in relatively less risky
portfolio.
BALANCE
Reliance Regular Savings Fund - Balanced Plan: -
A Conservative Large & Mid cap Oriented Fund A hybrid equity
oriented portfolio focusing on well managed, high quality large cap
stocks as well as mid cap stocks Ideal for those investors who have
a balanced approach towards risk taking ability
DEBT
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The aim of income funds is to provide regular and steady income
to investors. Such schemes generally invest in fixed income
securities such as bonds, corporate debentures, Government
securities and money market instruments. Such funds are less risky
compared to equity schemes. These funds are not affected because
of fluctuations in equity markets. However, opportunities of capital
appreciation are also limited in such funds. The NAVs of such
funds are affected because of change in interest rates in the
country. If the interest rates fall, NAVs of such funds are likely to
increase in the short run and vice versa. However, long term
investors may not bother about these fluctuations
ULTRA SHORT TERM-:
Reliance Money Manager Fund: -
This fund belongs to the family of ultra short term debt funds with
very low exposure to MTM instruments. The fund is managed with
a relatively conservative approach to credit risk and duration as
compared to Reliance Medium Term Fund & Reliance Floating
Rate Fund - Short Term Plan. As a result of having a higher credit
profile and a low MTM component, the returns may be less
volatile than Reliance Medium Term Fund & Reliance Floating
Rate Fund - Short Term Plan. The fund portfolio is designed to
generate a moderate yield pick up over liquid funds and is suitable
for investors with investment between 1 week to 1 month. It is
suitable for investors with investment between 1 week to 1 month.
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Reliance Medium Term Fund: -
This fund belongs to the family of ultra short term debt funds,
with moderate exposure to MTM assets. The portfolio is positioned
at the shorter end of the yield curve but has a leeway to take
marginal exposure to securities upto 1 year maturity in case value
is identified at that part of the curve. This fund can marginally
enhance the credit risk profile of the portfolio to enhance returns.
The NAV of the fund may be a little more volatile than a liquid
fund because of a higher MTM component in the fund. The fund is
suitable for investors with an investment horizon of 1 month or
more. It is suitable for investors with an investment horizon of 1
month or more.
Reliance Floating Rate Fund Short Term Plan:-
The fund belongs to the category of Ultra Short Term Funds. A
significant portion of the fund is mandated to invest in a
combination of debt securities, money market instruments and
floating rate instruments with a maturity profile of three months
and upto 2 years. This fund may have a slightly more aggressive
credit and duration profile compared to Reliance Money Manager
fund and Reliance Medium Term Fund and therefore would be
suitable for investors with minimum 3 months holding period. It is
suitable for investors with minimum 3 months holding period
SHORT TERM FUND
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Reliance Dynamic Bond Fund:-
The fund has a dynamic asset allocation structure enabling
complete flexibility in investment in debt instruments which may
include investments in corporate and PSU bonds, Government
Securities, money market instruments, securitized debt etc of
varying tenors and the quantum of investments in any of the above
mentioned categories is also flexible. Therefore, the fund intends
to take medium term calls on interest rates and take significant bets
on the same. A significant portion of the fund’s pie shall be
invested in higher rate corporate bonds, money market instruments
and gilts. Credit call, if at all, will be taken on low duration
securities. It is
suitable for investors with minimum 6 months holding period
Reliance Short Term Fund:-
The fund belongs to the family of income funds. It is suitable for
investors with short to medium term investment horizon of 6 – 9
months and medium appetite for risk. The fund predominantly
invests in various debt instruments like Government and Corporate
bonds, Securitized Debt, Money Market Instruments etc and
normally maintains a moderate maturity of the portfolio between
1- 2 years. It is suitable for investors with short to medium term
investment horizon of 6 – 9monthsmedium appetite for risk
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RELIANCE DUAL ADVANTAGE FIXED TENURE FUND-PLAN J:
Reliance Monthly Income Plan: -
This is a hybrid fund with a marginal allocation to equity which
may go up to maximum 20%. This is ideal for a predominantly
fixed income investor with a marginal appetite for equity risk .The
investment horizon in this fund should typically be 2 years or more
so that the long term benefit of having a marginal exposure to
equity pays off. The fund intends to offer a predominantly fixed
income investor the power of equity along with the stability of
debt. It is suitable for investors with 2 years holding period
Reliance Liquid Fund - Cash Plan:
This fund also belongs to the family of Liquid Funds. The fund is
managed with a relatively conservative approach to credit risk as
compared to other liquid funds. Large part of the portfolio will be
invested in the banks/financial institution space to achieve this
objective. The fund is suitable to park very short term investment
surplus fora duration ranging from a day to a month. It is suitable
to park very short term investment surplus for a duration ranging
from a day to a week.
Reliance Liquid Fund - Treasury Plan: -
This fund belongs to the family of Liquid Funds. It is targeted
towards varied investor categories like retail/SMEs/HNIs due to
which the minimum investment amount in the fund is Rs 5000.
Since the fund is targeted towards a diverse investor base, the
AUM of the fund is relatively more stable in nature. This is
RIBS,BHILAI Page 32
reflected in its portfolio wherein there is a relatively lower
allocation to relative cash and cash like instruments. Also because
of a more diversified investor base, the marketing expenses on an
average are slightly higher than Reliance Liquidity Fund resulting
in relatively higher expense charged. It is meant for short term cash
management & is suitable investors with investment horizon
between 1 day to 1 month.
Reliance Liquidity Fund:
The fund belongs to the family of Liquid Funds. It is designed to
handle extremely large ticket size investments with the minimum
application amount being Rs. 5 crore. Since the fund is meant for
large ticket size investors, therefore, on an average maintains low
total expense ratio resulting from low marketing expense. The
portfolio endeavors to maintain a larger proportion of assets in
liquid, cash and near cash instruments to handle the possibility of
larger volatility in a smooth manner. It is meant for short term cash
management for corporates & is suitable investors with investment
horizon between 1 day to 1 mont
LONG TERM
Reliance Regular Savings Fund Debt Option: -
This fund belongs to the family of income funds. This fund is
positioned towards the retail/HNI/SME kind of fixed income
investors. The fund has a limit on the amount that the investor can
invest in a month. The fund basically seeks to benefit from any
opportunity available in the debt market space at different points in
RIBS,BHILAI Page 33
time. Therefore, this fund invests based on short to medium term
interest rate view and shape of the yield curve.It typically
maintains a moderate duration between 1 - 2 years and invests in
well researched credits/ structures for yield enhancement. The fund
is intended towards ensuring that the investors have a healthy
holding period return over1 - 2 years. It is suitable for investors
with 1-2 years holding period
Reliance Income Fund: -
This fund belongs to the family of income funds. It is suitable for
investors with medium to longer term investment horizon of 12
months and more and medium to high appetite for risk. Income
funds mainly invest in debt securities of varying maturity periods,
i.e. both in short term and long term debt instruments like
Government and Corporate bonds, Securitized Debt, Money
Market Instruments etc, depending on the fund manager’s view of
the market .Suitable for investors with medium to longer term
investment horizon of 12 months and more and medium to high
appetite for risk
Reliance Gilt Securities Fund:-
This fund belongs to the family of Gilt Funds. It predominantly
invests in a portfolio comprising of securities issued and
guaranteed by the Central Government and State Government,
hence has a higher credit profile. It has a very low credit risk
profile. However, it can run extremely long durations and
therefore, have a higher interest rate risk profile. It is suitable for
investors with an investment horizon of 12 months and longer who
RIBS,BHILAI Page 34
have a positive view on falling interest rates. Suitable for investors
with an investment horizon of 12 months and longer who have a
positive view on falling interest rates.
GOLD
Gold is seen as a symbol of security and a sign of prosperity.
Indian consumers consider gold jewellery as an investment and are
well aware of gold’s benefits as a store of value. Gold is also
recognized as a form of money in India, a tradable liquid asset. It is
one of the foundation assets for Indian households and a means to
accumulate wealth from a long term perspective. Gold investment
has been in the culture of Indian tradition and has been on rise
amongst the modern investors as well due to the financial
uncertainty and inflationary pressures.
Reliance Gold Exchange Traded Fund:
(An open-ended Gold Exchange Traded Fund) The investment
objective is to seek to provide returns that closely correspond to
returns provided by price of gold through investment in physical
Gold (and Gold related securities as permitted by Regulators from
time to time). However, the performance of the scheme may differ
from that of the domestic prices of Gold due to expenses and or
other related factors
Reliance Gold Savings Fund:-
Gold is seen as a symbol of security and a sign of prosperity.
Indian consumers consider gold jewellery as an investment and are
well aware of gold’s benefits as a store of value. Gold is also
RIBS,BHILAI Page 35
recognized as a form of money in India, a tradable liquid asset.
TOP TEN PLAYERS OF MUTUAL FUND
RIBS,BHILAI Page 36
TOP TEN PLAYERS OF MUTUAL FUND
NAME OF COMPANY AUM (IN CRS.)
MARKET CAPITALISATION
(IN %)Reliance Mutual Fund 101,259 14%
HDFC Mutual Fund 92,033 12.38%
ICICI Prudential Mutual Fund 79,759 10.72%
UTI Mutual Fund 69,105 9.28%
Birla Sun Life Mutual Fund 67,475 9.07%
SBI Mutual Fund 47,874 6.44%
Franklin Templeton Mutual Fund 34,729 4.67%
Kotak Mahindra Mutual Fund 33,994 4.57%
RIBS,BHILAI Page 37
Tata Mutual Fund 25,006 3.36%
Sundaram Mutual Fund 14,541 1.97%
Religare Mutual Fund 11,342 1.52%
Other Mutual fund company 108,306 15%
OBJECTIVES
OF
STUDY
RIBS,BHILAI Page 38
RIBS,BHILAI Page 39
RIBS,BHILAI Page 40
OBJECTIVES OF STUDY
1) To find out the awareness of customers regarding mutual fund.
2) To find out the preferences of consumer in choosing different schemes.
3) To know why one choose to invest in mutual fund.
4) To know preferences regarding portfolio.
5) To find out most preferred channel of selling.
RESEARCH METHODOLOGY
The research methodology helps to build the project on the basis of data
collected. I have collected the data which has helped me to frame the project
through primary and secondary data.
Primary data collection was given more importance since it
is related to the factor in attitude studies. One of the most importance of primary
research is that it helps in identifying the problem, collecting, analyzing the
required information data and providing an alternative solution to the
problem .It also helps in collecting the vital information that is required by the
top management to assist them for the better decision making both day to day
decision and critical ones.
Data sources –:
Data are collected through primary and secondary data.
PRIMARY DATA:
RIBS,BHILAI Page 41
In this case, I had discussion with the company guide and senior
colleagues to gather the information related to my project work and then I
approached the customers of Reliance Money.
During my project not only the primary data helped me but I have to take
help of the secondary data.
Secondary Data:
In this case, I have referred to various books, magazines, company
brochure, net etc. To extract the information that was needed for my
project.
Sampling:
Sampling procedure:
The sample was selected of them who are the customers/visitors of
“UNITED BANK OF INDIA MALVIYA ROAD BRANCH,
ORIENTAL BANK OF COMMERCE COLLECTORATE
BRANCH ,OBC BANK MEDICAL COLLEGE BRANCH,
BANK OF INDIA PACHPEDI NAKA BRANCH”, of RAIPUR
irrespective of them It was also collected through personal visits to
persons, by formal and informal talks and through filling up the
questionnaire prepared..
Sample size:
RIBS,BHILAI Page 42
The sample size of my project is limited to 100 people only. Out of
which only 55 people had invested in Mutual Fund. Other 45
people did not have invested in Mutual Fund.
LIMITATION OF THE STUDY
1 This study is limited to only schemes of mutual fund.
2 This study is restricted to Raipur city only.
3 The study is limited up to the mutual funds operating in India.
4 Possibility of data collection because may have not given actual information.
5 The sample size of my project is limited to 100 people only. Out of which only 55 people had invested in Mutual Fund. Other 45 people did not have investment in Mutual Fund.
RIBS,BHILAI Page 43
DATA ANALYSIS AND
INTERPRETATION
RIBS,BHILAI Page 44
Q1 AGE DITRIBUTION OF INVESTORS?
Age Group <= 30 31-35 36-40 41-45 46-50 50<
No. of
Investors
10 15 30 20 15 10
RIBS,BHILAI Page 45
10
15
30
20
15
10
AGE DISTRIBUTION
up to 3031-3536-4041-4546-50above 50
INTERPRITATION-: According to this chart out of 100 Mutual Fund investors of Raipur the most are in the age group of 36-40 yrs. i.e. 30%, the second most investors are in the age group of 41-45yrs i.e. 20% and the least investors are in the age group of below 30 yrs.
Q.2 Do you aware of the term mutual fund ?
RIBS,BHILAI Page 46
A) YES B) NO
30%
60%
10%
RESPONDENT RESPONSE
YESNOCAN'T SAY
INTERPRETATION-:
According to the above chart it can be concluded that out of 100 people 60% people are not aware of the term mutual fund only 30% people aware of it.
Q.3 INFORMATION YOU GOT FROM?
Source of information No. of Respondents
RIBS,BHILAI Page 47
Advertisement 5%
colleague 15%
Banks 55%
Financial Advisors 25%
ADVERTISEMENT5%
PEER GROUP15%
BANK55%
FINANCIAL ADVISOR25%
SOURCES OF INFORMATION
INTERPRETATION-:
Above chart is showing how the mutual fund investor came to know about mutual out of 100 people 55% came to know from bank25% from the financial advisor 15%from colleague and only 5% from advertisement
Q.4 Respondents current investment in Mutual Fund
RIBS,BHILAI Page 48
Response No. of Respondents
YES 25
NO 75
Total 100
united ban
k of in
dia
oriental
bank o
f commerc
e (med
ical co
llege
branch
)
bank o
f india
oriental
bank o
f commerc
e(colle
ctorat
e bran
ch05
10152025
noyes
INTERPRETATION-:
The above data is showing current investor investment in mutual fund of 4 different banks United Bank of India , Oriental Bank of Commerce medical college branch, Bank of India, oriental bank of commerce collectorate branch out of 100 people of different bank only 25 respondents are have current investment in mutual fund.
Q.5. Reason for not invested in Mutual Fund
RIBS,BHILAI Page 49
Reason No. of Respondents
Not Aware 75
Higher Risk 5
Not any Specific
Reason
10
NOT AWARE 83%
HIGHER RISK6%
NOT ANY SPECIFIC REASON11%
REASON FOR NOT INVESTMENT
INTERPRETATION-:
Out of 90 people, who have not invested in Mutual Fund, 75% are not aware of Mutual Fund, 5% said there is likely to be higher risk and 10% do not have any specific reason.
Q.6 Do you aware of mutual fund schemes?
A)YES B)NO
RIBS,BHILAI Page 50
RESPONSE NO. OF RESPONDENTS
YES 26NO 74
26
74
RESPONSE
YESNO
INTERPRETATION-:
Out of 100 people 74 are not fully aware of mutual fund schemes only 26% are aware of that.
Q.7Do you know about option and plan in mutual fund?
A) YES B) NO
RIBS,BHILAI Page 51
43
57
RESPONSE
YESNO
INTERPRETATION-:
out of 25 people who have invested in mutual fund 57% are not
aware of option and plan under mutual fund but 43% are aware of it.
Q.8Monthly Family Income of the Investors of RAIPUR.
Income Group No. of Investors
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Below-10,000 7
10,001-20,000 15
20,001-30,000 30
30,001-40,000 23
Above-40,000 25
below 10,000 10,001 -20,000 20,001-30,000 30,001-40,000 above 40,0000
5
10
15
20
25
30
35
RESPONSE
\
INTERPRETATION-:
In the Income Group of the investors of Raipur , out of 100 investors, 30% investors that is the maximum investors are in the monthly income group Rs. 20,001 to Rs. 30,000, Second one i.e. 25% investors are in the monthly income group of more than Rs. 40,000 and the minimum investors i.e.7% are in the monthly income group of below Rs. 10,000
Q.9Preferred Portfolios by the Investors
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EQUITY24%
DEBT15%
BALANCE17%
GOLD45%
RESPOSE
INTERPRETATION-:
out of 100people 45% people prefer to invest in gold saving fund17% prefer in balance fund 15% prefer in debt and 25% n equity
Q.10Total no. of avenues of investment you know?
A) FD
B) RD
RIBS,BHILAI Page 54
Portfolio No. of Investors
Equity 25
Debt 15
Balanced
Gold
17
46
C) SAVING A/C
D) INSURANCE
E) REAL ESTATE
F) MUTUAL FUND
G) INVESTMENTS IN CAPITAL MARKET
H) INVESTMENT IN MONEY MARKET
I) GOLD AND SILVER
J) IF OTHERS SPECIFY……………………………………….
93%
90%
94%
80%64%
45%
40%
30%
65% 10%
INVESTOR RESPONSE
FIXED DEPOSIT RECURRING DEPOSITSAVING A/C DEPOSIT INSURANCEREAL ESTATE MUTUAL FUNDINVESTMENTS IN CAPITAL MARKET
INVESTMENTS IN MONEY MARKET
GOLD AND SILVER ANY OTHER
INTERPRETATION-:Above showing avenues of investment people know 93% people know about F.D .90% know R.D. 94% know about saving account 80% know about insurance 64% know about real estate only 30% know about the mutual fund.
Q.11Which feature of the investment attracts you most?
A) Risk Diversification
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B) Max. return with max. risk
C) Min.risk with min. return
D) Moderate risk with moderate return.
45
26
20
19
RESPONSE
RISK DIVERSIFICATIONMAX.RETURN WITH MAX. RISKMIN.RISK WITH MIN. RETURNMODERATE RISK WITH MOD-ERATE RETURN
INTERPRETATION-:
Above data showing the feature that investors consider while investing 45% consider risk diversification factor 26% consider max. return with max. risk 20% consider min. risk with min. return factor while 19% consider moderate with moderate.
FINDINGS AND CONCLUSION
RIBS,BHILAI Page 56
In Raipur the investors in the Age Group of 36-40 years were
more in numbers. The second most Investors were in the age
group of 41-45 years and the least were in the age group of
below 30 years.
In family Income group, between Rs. 20,001- 30,000 were
more in numbers, the second most were in the Income group
between Rs.30,000-40,000 and the least were in the group of
below Rs. 10,000.
About all the Respondents had a Saving A/c in Bank, 76%
Invested in Fixed Deposits, Only26% Respondents invested in
Mutual fund.
Mostly Respondents preferred High Return while investment,
the second most preferred Low Risk then liquidity and the
least preferred Trust.
Only 30% Respondents were aware about Mutual fund and
its operations and 60% were not.
Among 100 Respondents only 26% had invested in Mutual
Fund and 74% did not have invested in Mutual fund.
Most of the Investors had invested in LIC and preferred to
invest in that due to security.
RIBS,BHILAI Page 57
Out of 26 investors of RMF 41% have invested due to its
association with the Brand RELIANCE, 29% Invested because
of Advisor’s Advice and 30% due to better return.
Most of the investors who did not invested in RMF due to not
Aware of RMF, the second most due to risks.
For Future investment the maximum Respondents preferred
Reliance Mutual Fund, the second most preferred ICICI
Prudential, SBIMF has been preferred after them.
25% Investors preferred to Invest through Financial Advisors,
15% from their colleagues and 55% through Bank.
15% preferred One Time Investment and 85% preferred SIP
out of both type of Mode of Investment.
The most preferred Portfolio was GOLD, the second most
was EQUITY and the least preferred Portfolio was Debt
portfolio.
Maximum Number of Investors Preferred Growth Option for
returns.
RIBS,BHILAI Page 58
SUGGESTIONS AND RECOMMENDATION
The most vital problem spotted is of ignorance. Investors
should be made aware of the benefits. Nobody will invest
until and unless he is fully convinced. Investors should be
made to realize that what they are losing by not investing.
Mutual funds offer lots of benefit which no other single
option could offer. But most of the people are not even
aware of what actually a mutual fund is? They only see it as
just another investment option. So the advisors should try
to change their mindsets. The advisors should target for
more and more young investors. Young investors as well as
persons at the height of their career would like to go for
advisors due to lack of expertise and time.
Reliance Mutual Fund needs to give the training of the
Individual Financial Advisors(bankers) about the
Fund/Scheme and its objective, because they are the main
source to influence the investors.
RIBS,BHILAI Page 59
Before making any investment Financial Advisors should first
enquire about the risk tolerance of the investors/customers,
their need and time (how long they want to invest). By
considering these three things they can take the customers
into consideration.
Younger people aged under 35 will be a key new customer
group into the future, so making greater efforts with
younger customers who show some interest in investing
should pay off.
Customers with graduate level education are easier to sell
and there is a large untapped market there. To succeed
however, advisors must provide sound advice and high
quality.
Systematic Investment Plan (SIP) is one the innovative
products launched by Assets Management companies in
the industry. SIP is easy for monthly salaried person as it
provides the facility of do the investment in EMI. Though
most of the prospects and potential investors are not aware
about the SIP. There is a large scope for the companies to
tap the salaried persons.
RIBS,BHILAI Page 60
BIBLIOGRAPHY
www.reliancemutualfund.com
www.moneycontrol.com
WWW.AMFIINDIA.COM
WWW.ONLINERESEARCHONLINE.COM
NEWS PAPERS
OUTLOOK MONEY
TELEVISION CHANNEL (CNBC AAWAJ)
MUTUAL FUND HAND BOOK
FACT SHEET AND STATEMENT
RIBS,BHILAI Page 61
RIBS,BHILAI Page 62
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