research on customers necessitates specialized skills and sophisticated techniques

7/31/2019 research on customers necessitates specialized skills and sophisticated techniques.

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CHAPTER

1

INTRODUCTION

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INTRODUCTION

Marketing research is the systematic and objectives search for and analysis of

information relevant to the identification and solution of any problem in the field of

marketing.

With the increased complexities of business activity marketing research too

has been growing in complexity and it has emerged as a highly specialized function

of marketing Management. Today carrying out research relating to customers

necessitates specialized skills and sophisticated techniques.

Branding means giving a specified name to a product or group of product

from one seller. In financial sector branding can be done on the basis of performance,

track record and availability of distributors

In a specific sense, product awareness includes those activities that supplement both

personal meeting and advertising, and coordinate them and make them effective,

such as displays, shows, demonstrations and other non-recurrent efforts not in the

ordinary routine.

The project report aims to aware the people about mutual fund and creating a brand

of the company so that the market share of the company could improve. To suggest

the interested investors about the different schemes and NFO of the companyaccording to their risk appetite so that their money could increase at the requirement.

The Project was of significance to me as it helped me to get an insight into the

working of a Mutual Fund as well as the returns calculation.

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1.1 OBJECT OF THE PROJECT

It is required of a management student, to undertake a project to the

norms prescribed by the University of Pune for the accomplishment of MBA course.

It is peeps into the concerned area and scrutinizes & analyses the related works,

methods, problems and situations which surrounds the concern topic.

The report constitutes a part of M.B.A. examination to be evaluated. In

pursuance of said requirement, I under went my summer training for two months

period commencing on 26th May to 26th July at Franklin Templeton Investment,

Patna (Bihar

The topic for my project was to study Product awareness of Franklin

Templeton Investments as to find out the investment habits of common people and

to study all features ofNFO to aware the schemes in PSU Bank channel.

The project was entitled to me by the FT. Company gave the

questionnaire for survey to me.

I have tried to give my best to the project work & thus I am certain, may

believe, when a need arises tomorrow in whatsoever organization, I am with my bestexperience collected during my project work is going to be of immense help.

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1.2 SELECTION OF THE TOPIC

As per the norms laid down by the University of Pune for the partial

fulfillment of curriculum, I as a management student, need to undertake a project

work in an organization that caters to my interest and requirement of course.

PRODUCT AWARENESS

Product awareness that can communicate product concepts and help position the

product in customer mind

In other words, the customer should be able to identify or recall its whenever he or

she thinks of the product class. The term product awareness refers to what a product

or brand means to consumers and what they experience in purchasing and using it.

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1.3 OBJECTIVES OF THE STUDY

The project was undertaken at FRANKLIN TEMPLETON INVSTMENTS Patna

branch considering the following need

To study the investment habits of common people.

To know that which AMC is doing more Business through PSU Banking

channel.

To aware the product during NFO.

Awareness about FRANKLIN TEMPLETON INVESTMENT schemes

in PSU Banks.

I am sure that the project will definitely add value to the potential investor while

taking investment decisions by giving insight about the mutual funds.

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1.4 RESEARCH METHODOLOGY

Research Methodology:

Introduction:

Research methodology is a way to systematically solve the research problem.

Research is an art of scientific investigation and refers to a search for knowledge.

It can be also defined as scientific search for pertinent information specific topic.

It consists of several steps that need to be implemented in a sequential order for

achieving objectives of research effectively.

Marketing Research Process:

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Meaning of Research:

Research in common parlance refers to a search for knowledge. The Advanced

Learners Dictionary of Current English lays down the meaning of research as a

Careful investigation or inquiry especially through search for new facts in any

Branch of knowledge.

Research as a scientific and systematic search for pertinent Information on a

specific topic. In fact, research is an art of scientific Investigation.

Research is an academic activity and as such the term should be used in a

technical sense.

According to Clifford Woody research comprises defining and Redefining

problems, formulating hypothesis or suggested solutions; Collecting, organizing and

evaluating date; making deductions and Reaching conclusion; and at least carefully

testing the conclusions to determine whether they fit the formulating hypothesis.

According to Phillip Kotler, it is a systematic design, collection, Analysis of

data and relevant to a specific marketing situation facing the company.

According to American marketing association, it is the function which links

the customer and the marketer through information Used to identify and public to the

marketer through information used to identify and define marketing opportunity and

the problems; generate, redefine action; monitor marketing action; monitor

marketing performance and improve Understanding of marketing as a process.

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Objectives of Research:

To understand the concept, working, types, fund structure, constituents,

legal, and regulator environment of Mutual Funds.

To acquire knowledge on the fund distribution and sales practices,

accounting, valuation and taxation procedure of Mutual Funds.

To understand about Investment Management.

To learn about the investment products, principle of financial planning and

Investment Advisory.

To measure and evaluate Mutual Funds performance and also recommend

Strategies for investors.

To understand the SIP route of investment.

Data Source:

The research plan can call for gathering secondary data, primary data or both.

Secondary data is the data, which was collected for another purpose, and already

exist somewhere. Primary data is gathered for the specific purpose of for a specific

research project.

Secondary Data:

The secondary data means data that are already available i.e. they refer to the data

which have already been collected and segregated by someone else.

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Research Approaches:

The approach for this research was the data which was collected from the respective

fact sheets of the AMCs, various websites etc.

Data Compilation and Analysis:

After the data has been collected, it was tabulated and finding of the project were

presented followed by analysis and interpretation to reach certain conclusion.

Data Collection:

The data for the analysis is majorly collected by the primary research i.e. personal

interviewe&survey. The data for the study is also being collected by the research

reports (value research).The analysis is done from the study of the fact sheets of thefunds provided by Franklin Templeton research team in Patna and also from the fact

sheets of the AMCs .Magazines and newspapers where also used for the same.

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1.5 SCOPE OF THE STUDY

The scope of the project is limited to only mutual fund industry, awaring

people about different funds of FRANKLIN TEMPLETON INVESTMENT &

advising investors according to their ages, earnings, savings, and their risk taking

appetite. The different funds, which have been taken for study, can be classified as

Equity funds, Balanced funds, Debt funds & Liquid funds.

LIMITATIONS:

The project was undertaken at FRANKLIN TEMPLETON INVESTMENT. The data

is so confidential that there are certain limitations on getting the data and on

disclosing it.

Also the duration of two months for completion of the project is not sufficient

to cover all schemes.

This study is limited to only Patna city. Some of the respondents could have given

biased response when approached. Time being a constraint, only a limited area could

be covered.

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CHAPTER

2

INDUSTRY PROFILE

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INDUSTRY PROFILE

2.1 Concept of Mutual Fund

Mutual fund is a mechanism for pooling the resources by issuing units to the

investors and investing in securities in accordance with objectives as disclosed in

Offer document. Investments in securities are wide spread across a wide cross-

section of Industries and sectors thus risk is reduced. 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. The investors in proportion to their

investments share the profits or losses. Mutual Fund is required to be registered with

Securities and Exchange Board of India (SEBI).

Thus, a mutual fund is a collective investment process. An Asset Management

Company (AMC) collects many investors money. It invests this money in various

securities to generate returns for the investors. Investors get the net returns after

deducting the related expenses. If there is any loss, it would also be borne by the

investors. An Asset Management Company (AMC) manages the pool of money;

therefore, it is also an indirect form of investment for investors.

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2.2 Mutual Fund industry shares in GDP-THE GLOBALSCENARIO:

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Country %

Australia 87

USA 72

Brazil 30

UK 23

South Korea 21

India 6

Japan 5

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2.3ORGANISATION OF MUTUAL FUND

There are many entities involved and the diagram below illustrates the organizati

onal set up of a mutual fund

How does a Mutual Fund work?

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Organization of mutual fund

ADVANTAGES OF MUTUAL FUNDS

There are numerous benefits of investing in mutual funds and one of the keyreasons for its phenomenal success in the developed markets like US and UK is the

range of benefits they offer, which are unmatched by most other investment avenues.

We have explained the key benefits in this section. The benefits have been broadly

split into universal benefits, applicable to all schemes and benefits applicable

specifically to open-ended schemes.

Professional Management

Diversification

Convenient Administration

Return Potential

Low Costs

Liquidity

Transparency

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Flexibility

Choice of schemes

Tax benefits

Well regulated

Reduction in risk

Reduction of costs

DISADVANTAGES

While the benefits of investing through mutual funds far outweigh the disadvantages,

an investor and his advisor will do well to be aware of a few shortcomings of using

the mutual funds as investment vehicles.

No Control over Costs

No Tailor-made Portfolios

Managing a Portfolio of Funds

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2.4 HISTORY OF MUTUAL FUNDS IN INDIA

The mutual fund industry in India started in 1963 with the formation of Unit Trust of

India, at the initiative of the Reserve Bank and the Government of India. The

objective then was to attract the small investors and introduce them to market

investments. Since then, the history of mutual funds in India can be broadly divided

into three distinct phases.

1964-87 (Unit Trust of India)

In 1963, UTI was established by an Act of Parliament and given a monopoly.

Operationally. UTI was set up by the Reserve Bank of India, but was later de-linked

from the RBI The first, and still one of the largest schemes, launched by UTI was

Unit Scheme 1964. Over the years, US-64 attracted, and probably still has, the

largest number of investors in any single investment scheme. It was also at least

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partially the first open-end scheme in the country, now moving towards becoming

fully open end.

1987-1993 (Entry of Public Sector Funds)

1987 marked the entry of non-UTI, Public Sector mutual funds, bringing in

competition. With the opening up of the economy, many public sector banks and

financial institutions were allowed to establish mutual funds. The State Bank of India

established the first non-UTI mutual fund- SBI Mutual Fund - in November 1987.

This was followed by Can bank Mutual Fund (launched in December. 1987), LIC

Mutual Fund (1989). And Indian Bank Mutual Fund (1990) followed by Bank

of India Mutual Fund, GIC Mutual Fund and PNB Mutual Fund. These mutual funds

helped enlarge the investor community and the investible funds. From 1987 to! 92-

93, the fund industry expanded nearly seven times in terms of Assets under

Management,

1993-1996 (Emergence of Private Funds)

A new era in the mutual fund industry began with the permission granted for the

entry of private sector funds in 1993, giving the Indian investors a broader choice of

fund families and increasing competition for the existing public sector funds. Quite

significantly, foreign fund management companies were also allowed to operate

mutual funds, most of them coming into India through their joint ventures with

Indian promoters. These private funds have brought in with them the latest product

innovations, investment management techniques and investor servicing technology

that make the Indian mutual fund industry today a vibrant and growing financial

intermediary.

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1996 (SEBI Regulation for Mutual Funds)

The entire mutual fund industry in India, despite initial hiccups, has since scaled

new heights in terms of mobilization of funds and number of players. Deregulation

and liberalization of the Indian economy has introduced competition and provided

impetus to the growth of the industry. Finally, most investors- small or large - have

started shifting to wards-mutual funds as opposed to banks or direct market

investments.

More investor friendly regulatory measures have been taken both by SEBI to

protect the investor and by the Government to enhance investors returns through tax

benefits. A comprehensive set of regulations for all mutual funds operating in India

was introduced with SEBI (Mutual Fund) Regulations, 1996. These regulations set

uniform standards for all funds and will eventually be applied in full to Unit Trust of

India as well, even though IJTI is governed by its own UTI Act. In fact, UTI has

been voluntarily adopting SEBI guidelines for most of its schemes. Similarly, the

1999 Union Government Budget took a big step in exempting all mutual fund

dividends from income tax in the hands of investors. Both the 1996 regulations and

the 1999 Budget must be considered of historic importance, given their far-reaching

impact on the fund industry and investors.

1999 marks the beginning of a new phase in the history of the mutual fund industry

in India, a phase of significant growth in terms of both amounts mobilized from

investors and assets under management. Consider the growth in assets as seen in the

figures below:

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2.5 TYPES OF FUND

The different schemes and funds

There are wide varieties of Mutual Fund schemes that cater to investor needs,

whatever the age, financial position, risk tolerance and return expectations. The

mutual fund schemes can be classified according to both their investment objective

(like income, growth, tax saving) as well as the number of units (if these are

unlimited then the fund is an open-ended one while if there are limited units then the

fund is close-ended).

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Types of mutual fund schemes

By structure Open ended schemes

Close ended schemes

Interval schemes

By Investment Objectives Growth schemes

Income schemes

Balance schemes

Money market schemes

Other schemes

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Tax saving schemes

Special schemes

Index schemesSector specific schemes

Open-ended schemes

These funds are sold at the NAV based prices, generally calculated on every business

day. These schemes have unlimited capitalization, open-ended schemes do not have

a fixed maturity - i.e. there is no cap on the amount you can buy from the fund and

the unit capital can keep growing. These funds are not generally listed on any

exchange.

Open-ended funds are bringing in a revival of the mutual fund industry owing to

increased liquidity, transparency and performance in the new open-ended funds

promoted by the private sector and foreign players. Open-ended funds score over

close-ended ones on several counts. Some of these are listed below:

a) Any time exit option: The issuing company directly takes the responsibility of

providing an entry and an exit. This provides ready liquidity to the investors and

avoids reliance on transfer deeds, signature verifications and bad deliveries.

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b) Tax advantage: Though Budget 2004 proposals envisage a tax rate of 20.91 %

( Corporate investors) and 13.06875 %( Non-Corporate investors) on dividend

distribution made by the Debt funds, the funds continue to remain attractive

investment vehicles. In equity plans there is no distribution tax.

c) Any time entry option: An open-ended fund allows one to enter the fund at any

time and even to invest at regular intervals (a systematic investment plan).

The open ended funds offered by Franklin Templeton Mutual Fund are Liquid Plan,

Income Plan, Gilt-Treasury, Gilt-Investment, Balanced Fund, Growth Fund, Tax

Plan, FMCG Fund, Technology Fund, Monthly Income Plan, Child Care Plan, Power

and Short Term Plan

Close ended schemes

Schemes that have a stipulated maturity period, limited capitalization and the units

are listed on the stock exchange are called close-ended schemes.

These schemes have historically seen a lot of subscription. This popularity is

estimated to be on account of firstly, public sector MFs having floated a lot of close-

ended income schemes with guaranteed returns and secondly easy liquidity on

account of listing on the stock exchanges.

Classification according to investment objectives

Mutual funds have specific investment objectives such as growth of capital, safety of

principal, current income or tax-exempt income. In general mutual funds fall into

three general categories:

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Equity Funds invest in shares or equity of companies.

Fixed-Income funds invest in government or corporate securities that offer fixed

rates of return.

Balanced Funds invest in a combination of both stocks and bonds.

i) Growth Funds

These funds seek to provide growth of capital with secondary emphasis on dividend.

They invest in shares with a potential for growth and capital appreciation. Because

they invest in well-established companies where the company itself and the industry

in which it operates are thought to have good long-term growth potential, growth

funds provide low current income. Growth funds generally incur higher risks than

income funds in an effort to secure more pronounced growth.

These funds may invest in a broad range of industries or concentrate on one or more

industry sectors. Growth funds are suitable for investors who can afford to assume

the risk of potential loss in value of their investment in the hope of achieving

substantial and rapid gains.

They are not suitable for investors who must conserve their principal or who must

maximize current income.

ii) Growth and Income Funds

Growth and income funds seek long-term growth of capital as well as current

income. The investment strategies used to reach these goals vary among funds. Some

invest in a dual portfolio consisting of growth stocks and income stocks, or a

combination of growth stocks, stocks paying high dividends, preferred stocks,

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convertible securities or fixed-income securities such as corporate bonds and money

market instruments. Others may invest in growth stocks and earn current income by

selling covered call options on their portfolio stocks.

Growth and income funds have low to moderate stability of principal and moderate

potential for current income and growth. They are suitable for investors who can

assume some risk to achieve growth of capital but who also want to maintain a

moderate level of current income.

iii) Fixed-Income Funds

The goal of fixed income funds is to provide current income consistent with the

preservation of capital.

These funds invest in corporate bonds or government-backed mortgage securities

that have a fixed rate of return. Within the fixed-income category, funds vary greatly

in their stability of principal and in their dividend yields. High-yield funds, which

seek to maximize yield by investing in lower-rated bonds of longer maturities, entail

less stability of principal than fixed-income funds that invest in higher-rated but

lower-yielding securities.

Some fixed-income funds seek to minimize risk by investing exclusively in securities

whose timely payment of interest and principal is backed by the full faith and credit

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of the Indian Government. Fixed-income funds are suitable for investors who want to

maximize current income and who can assume a degree of capital risk in order to do

so.

iv) Balanced

The Balanced fund aims to provide both growth and income. These funds invest in

both shares and fixed income securities in the proportion indicated in their offer

documents. Ideal for investors who are looking for a combination of income and

moderate growth.

v) Money Market Funds/Liquid Funds

For the cautious investor, these funds provide a very high stability of principal while

seeking a moderate to high current income. They invest in highly liquid, virtually

risk-free, short-term debt securities of agencies of the Indian Government, banks and

corporations and Treasury Bills. Because of their short-term investments, money

market mutual funds are able to keep a virtually constant unit price; only the yield

fluctuates.

Therefore, they are an attractive alternative to bank accounts. With yields that are

generally competitive with - and usually higher than -- yields on bank savings

account, they offer several advantages. Money can be withdrawn any time without

penalty. Although not insured, money market funds invest only in highly liquid,

short-term, top-rated money market instruments.

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Money market funds are suitable for investors who want high stability of principal

and current income with immediate liquidity.

vi) Specialty/Sector Funds

These funds invest in securities of a specific industry or sector of the economy such

as health care, technology, leisure, utilities or precious metals. The funds enable

investors to diversify holdings among many companies within an industry, a more

conservative approach than investing directly in one particular company.

Sector funds offer the opportunity for sharp capital gains in cases where the fund's

industry is "in favor" but also entail the risk of capital losses when the industry is out

of favor. While sector funds restrict holdings to a particular industry, other specialty

funds such as index funds give investors a broadly diversified portfolio and attempt

to mirror the performance of various market averages.

Index funds generally buy shares in all the companies composing the BSE Sensex or

NSE Nifty or other broad stock market indices. They are not suitable

for investors who must conserve their principal or maximize current income.

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A summary is presented in the table below of the various funds and

their investment objectives.

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2.6 Mutual Fund Structure

The SEBI (Mutual Funds) Regulations 1993 define a mutual fund (MF) as a fund

established in the form of a trust by a sponsor to raise monies by the Trustees

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Scheme type TimeHorizon

RiskProfile

Typical Investment Pattern

Objective Open Close Equity(%)

Debt(%)

MoneyMarketInst./Others(%)

MoneyMarket

Yes No Short-Term

Low 0 0-20 80-100

Income Yes Yes Medium-Long

Term

Low toMedium

0 80-100

0-20

Growth Yes Yes LongTerm

High 80-100

0-20 0-20

Balanced Yes Yes Longterm

Mediumto high

0-60 0-40 0-20

TaxSaving

Yes Yes Longterm

High 80-100

80-100

0-20

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through the sale of units to the public under one or more schemes for investing in

securities in accordance with these regulations.

These regulations have since been replaced by the SEBI (Mutual Funds) Regulations,

1996. The structure indicated by the new regulations is indicated as under.

A mutual fund comprises four separate entities, namely sponsor, mutual fund trust,

AMC and custodian. The sponsor establishes the mutual fund and gets it registered

with SEBI.

The mutual fund needs to be constituted in the form of a trust and the instrument of

the trust should be in the form of a deed registered under the provisions of the IndianRegistration Act, 1908.

The sponsor is required to contribute at least 40% of the minimum net worth (Rs. 10

crore) of the asset management company. The board of trustees manages the MF and

the sponsor executes the trust deeds in favor of the trustees. It is the job of the MF

trustees to see that schemes floated and managed by the AMC appointed by the

trustees are in accordance with the trust deed and SEBI guidelines.

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Mutual fund structure

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vvEstablishes the MF as a trust registers theMF with SEBI

Mutual FundHolds unit-holders in MFenter into an agreement withsebi and ensure complience

Holds unit-holders in MF enter intoan agreement with SEBI and ensurecompliance

a

Provides registrar and transferservices

hhhh

32

Custodian

Registrar

Distributors

Sponsor Company(E.g. Franklin Templeton AssetMana ement

Provides the network of thedistribution of the schemes to theinvestors

Provides custodial services

AMC(E.g. Franklin Templeton AssetMana ement

Floats MF funds manages the fundas per SEBI guidelines and AMCa reements

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2.7 Risk Tolerance

The discussion on investment objectives would not be complete without a discussion

on the risks that investing in a mutual fund entails.

At the cornerstone of investing is the basic principle that the greater the risk you

take, the greater the potential reward. Remember that the value of all financial

investments will fluctuate.

Typically, risk is defined as short-term price variability. But on a long-term basis,

risk is the possibility that your accumulated real capital will be insufficient to meet

your financial goals.

And if you want to reach your financial goals, you must start with an honest

appraisal of your own personal comfort zone with regard to risk. Individual tolerance

for risk varies, creating a distinct "investment personality" for each investor. Some

investors can accept short-term volatility with ease, others with near panic. So

whether you consider your investment temperament to be conservative, moderate or

aggressive, you need to focus on how comfortable or uncomfortable you will be as

the value of your investment moves up or down.

Recognizing the type of investor you are will go a long way towards helping you

build a meaningful portfolio of investments that you can live with. Take the test

"Tolerance Questionnaire" to determine where your preferences lie.

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Figure showing risk Tolerance

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Managing Risk

Mutual funds offer incredible flexibility in managing investment risk. Diversificationand Automatic Investing (SIP) are two key techniques you can use to reduce your

investment risk considerably and reach your long-term financial goals.

Diversification

When you invest in one mutual fund, you instantly spread your risk over a number of

different companies. You can also diversify over several different kinds of securities

by investing in different mutual funds, further reducing your potential risk.

Diversification is a basic risk management tool that you will want to use throughout

your lifetime as you rebalance your portfolio to meet your changing needs and goals.

Investors, who are willing to maintain a mix of equity shares, bonds and money

market securities, have a greater chance of earning significantly higher returns overtime than those who invest in only the most conservative investments. Additionally,

a diversified approach to investing -- combining the growth potential of equities with

the higher income of bonds and the stability of money markets -- helps moderate

your risk and enhance your potential return.

Systematic Investment Plan (SIP)

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The Unit holders of the Scheme can benefit by investing specific Rupee amounts

periodically, for a continuous period. Mutual fund SIP allows the investors to invest

a fixed amount of Rupees every month or quarter for purchasing additional units of

the Scheme at NAV based prices.

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Here is an illustration using hypothetical figures indicating how the SIP can work for

investors: Suppose an investor Plan on a quarterly basis. Would like to invest Rs.1,

000 under the Systematic Investment

AmountInvested (Rs.)

PurchasePrice (Rs.)

No. of UnitsPurchased

InitialInvestment

1000 10 100

1 1000 8.20 121.95

2 1000 7.40 135.143 1000 6.10 163.93

4 1000 5.40 185.19

5 1000 6.00 166.67

6 1000 8.20 121.95

7 1000 9.25 108.11

8 1000 10.00 100.009 1000 11.25 88.89

10 1000 13.40 74.63

11 1000 14.40 69.44

TOTAL 12,000 - 1,435.90

Average unit cost Rs 12,000/1,435.9 = Rs 8.36

Average unit price 109.6/12 = Rs 9.13

Unit price at beginning of next quarter Rs 14.90

Market value of investment 1435.9 * 14.90= Rs 21,395/-

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The investor liquidates his units and gets back Rs 21,395/-

Using the SIP strategy the investor can reduce his average cost per unit. The investor

gets the advantage of getting more units when the market is turned down.

Types of Risks

All investments involve some form of risk. Even an insured bank account is subject

to the possibility that inflation will rise faster than your earnings, leaving you with

less real purchasing power than when you started (Rs. 1000 gets you less than it got

your father when he was your age). Consider these common types of risk and

evaluate them against potential rewards when you select an investment.

Market Risk

At times the prices or yields of all the securities in a particular market rise or fall due

to broad outside influences. When this happens, the stock prices of both an

outstanding, highly profitable company and a fledgling corporation may be affected.

This change in price is due to "market risk".

Inflation Risk

Sometimes referred to as "loss of purchasing power." Whenever inflation sprints

forward faster than the earnings on your investment, you run the risk that you'll

actually be able to buy less, not more. Inflation risk also occurs when prices rise

faster than your returns.

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Credit Risk

In short, how stable is the company or entity to which you lend your money when

you invest? How certain are you that it will be able to pay the interest you are

promised, or repay your principal when the investment matures?

Effect of loss of key professionals and inability to adapt

An industries' key asset is often the personnel who run the business i.e. intellectual

properties of the key employees of the respective companies. Given the ever-

changing complexion of few industries and the high obsolescence levels, availability

of qualified, trained and motivated personnel is very critical for the success of

industries in few sectors. It is, therefore, necessary to attract key personnel and also

to retain them to meet the changing environment and challenges the sector offers.

Failure or inability to attract/retain such qualified key personnel may impact the

prospects of the companies in the particular sector in which the fund invests.

Exchange Risk

A number of companies generate revenues in foreign currencies and may have

investments or expenses also denominated in foreign currencies. Changes in

exchange rates may, therefore, have a positive or negative impact on companies

which in turn would have an effect on the investment of the fund.

Investment Risk

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The sect oral fund schemes, investments will be predominantly in equities of select

companies in the particular sectors. Accordingly, the NAV of the schemes are linked

to the equity performance of such companies and may be more volatile than a more

diversified portfolio of equities.

Changes in the Government Policy

Changes in Government policy especially in regard to the tax benefits may impact

the business prospects of the companies leading to an impact on the investments

made by the

GROWTH IN ASSETS UNDER MANAGEMENT

I.M.R.T

Year Rs. In crores

Mar-65 25

Mar-87 4564

Mar-93 47000Jan-03 121805

Feb-03 87190

Mar-03 79464

Mar-04 139616

Mar-05 149554

Mar-06 231862

Mar-07 326388

Mar-08 505152

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The graph indicates the growth of assets over the years.

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WHAT IS NAV?

Net Asset Value of the fund is the cumulative market value of the assets of the

fund net of its liabilities. NAV per unit is simply the net value of assets dividend by

the number of units outstanding. Buying and selling into funds is done on the basis of

NAV- related prices

NAV is calculated as follows:

NAV = (Market value of the funds investments + Receivables + Accrued Income

Liabilities Accrued Expenses) / Number of outstanding units.

RECENT TRENDS IN MUTUAL FUNDS IN INDIA

The most important trend in the mutual fund industry is the aggressive expansion of

the foreign owned mutual fund companies and the decline of the companies floated

by nationalized banks and smaller private sector players. The highlight of recent

times has been the massive outflows faced by the Big Daddy of Indian mutual fund

industry, UTI. Though this has not pared down the enormous size of the fund, at least

the trend is to their discomfiture.

Many nationalized banks got into the mutual fund business in the early nineties and

got off to a good start due to the stock market boom prevailing then. These banks did

not really understand the mutual fund business and they just viewed it as another

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kind of banking activity. Few hired specialized staff and generally chose to transfer

staff from the parent organizations.

The performance of most of the schemes floated by these funds was not good.

Some schemes had offered guaranteed returns and their parent organizations had to

bail out these AMCs by paying large amounts of money as the difference betweenthe guaranteed and actual returns. The service levels were also very bad. Most of

these AMCs have not been able to retain staff, float new schemes etc. and it is

doubtful whether, barring a few exceptions, they have serious plans of continuing the

activity in a major way.

Today the Mutual Fund industry has 34 players with some 400 odd products that

cater to various segments of investors depending upon their risk appetite. The entry

of private players has improved service standards and brought in more choice for the

investors. Today, the Assets under Management in the industry have crossed Rs.

326388 crores. There was stagnation in this industry due to the fall in equity markets.

But the current revival of the markets and fall in the interest rates is

inducing people to invest more into equities. The performance of debt schemes has

enabled the funds to control the outflow of investments. If we look at the profile of

the

Mutual Fund industry as a whole, around 15% is equity investments and 85% are

spread over debt, G-Secs & money market instruments.

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2.8 The Indian Mutual Fund Industry

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U T P u b

J V s F o r I n d

P r i v

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1. Bank Sponsored

A. Joint Ventures Predominantly Indian

SBI Funds Management Private Limited

B. Others

BOB Asset Management Company Limited

Can bank Investment Management Services Limited

UTI Asset Management Company Private Limited.

2. Institutions

Jeevan Bima Sahayog Asset Management Company Limited

3. Private Sector

Indian

Benchmark Asset Management Company Private Limited.

Cholamandalam Asset Management Co. Ltd.

Credit Capital Asset Management Co. Ltd.

Escorts Asset Management Ltd.

J.M. Financial Asset Management Private Ltd.

Kodak Mahindra Asset Management Ltd.

Reliance Capital Asset Management Co. Ltd.

Sahara Asset Management Co. Private Ltd.

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Sundaram Asset Management Co. Ltd.

Tata Asset Management Ltd.

Joint Ventures Predominantly Indian

Birla Sun Life Asset Management Ltd.

DSP Merrill Lynch Fund Managers ltd.

HDFC Asset Management Co. Ltd.

Prudential ICICI Asset Management Co. Ltd.

Joint Ventures Predominantly Foreign.

ABN AMRO Asset Management (India) Ltd.

Deutsche Asset Management (India) Private Ltd.

Fidelity Fund Management Private Ltd.

Franklin Templeton Asset Management (India) Private Ltd.

HSBC Asset Management (India) Private Ltd.

ING Investment Management (India) Private Ltd.

Morgan Stanley Investment Management Private Ltd.

Principal PNB Asset Management Co Private Ltd.

Standard Chartered Asset Management Co. Private Ltd.

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CHAPTER

3

ORGANISATION OVERVIEW

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3.1 ORGANISATION OVERVIEW

In 1940, Sir John Templeton became controlling shareholder and president of

investment counseling company Templeton, Dobbrow and Vance Inc. (TDV).

John W. Galbraith became president of Securities Fund Investors, Inc. (SFI)

in 1974. In 1977, Mr. Galbraith acquired SFI from Sir John and began building the

broker/dealer network that distributes the open-end Templeton funds throughout the

United States.

In 1978, SFI moved its operations to St. Petersburg, Florida. In 1980, a subsidiary

of SFI registered as a transfer agent with the Securities and Exchange Commission

(SEC) and began providing transfer agency services to the open-end Templeton

funds.

Templeton Investment Counsel, LLC. Commenced business as an investment

adviser in Fort Lauderdale, Florida, in 1979. Initially, it built upon the international

securities analysis and research sources already established by Sir John Templeton.

Templeton Investment Counsel subsequently developed its own research capabilities

and began managing private and institutional accounts.

In January 1986, these companies, which had been operating in close association

with one another, were combined to form Templeton, Galbraith & Hansberger Ltd.

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In February 1986, the company made an initial public offering of Ordinary Shares on

the London Stock Exchange Since that time; Templeton has improved and expanded

both its investment management and its distribution capabilities. In addition to

domestic retail fund distribution, private accounts are solicited from pension funds

and institutions worldwide. Templeton is known for its global investment efforts

headed Jeff Everett, chief investment officer of Templeton Global Equity Group,

Gary Motyl, chief investment officer of Templeton Institutional Global Equities, as

well as its emerging markets endeavors led by Dr. J. Mark Mobius, president of

Templeton Asset Management Ltd.

Franklin Templeton Headqaters-San Mateo,CA

Worldwide

Assets under Management: US $ 574.4 billion (April '08), over 25 lakhs investor

accounts world-wide.

Extensive international presence and breadth of product line with offices in 29

countries, supported by over 450 investment professionals.

60 year of experience in global investing

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Offers more than 200 investment solutions under the Franklin, Templeton, Mutual

Series, Bissett, Fiduciary Trust and Darby names globally.

3.2Franklin Templeton India

Franklin Templeton's association with India dates back to more than a decade as an

investor. As part of the group's major thrust on investing in markets around the

world, the India office was set up in 1996 as Templeton Asset Management India

Pvt. Limited. It flagged off the mutual fund business with the launch of Templeton

India Growth Fund in September 1996, and since then the business has grown at a

steady pace.

A long-term commitment

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Since starting its operations in India, Franklin Templeton has invested a considerable

amount of time, effort and resources towards investor and distributor education, the

belief being - to be successful in the long term, the fundamentals need to be

corrected, at whatever cost! This has resulted in various advertising campaigns aimed

at educating investors, participation in seminars and distributor training programs.

Franklin Templeton has played a pivotal role in steering the industry to its current

stage, and as long term players, we continue to strive to achieve the objective of

'making mutual funds an investment of choice' for both individual and institutional

investors.

In July 2002, Franklin Templeton India acquired Pioneer ITI, another leading fund

house in India to create an organization with rich investment experience over market

cycles, one of the most comprehensive product portfolios, footprint across the

country and an in-house shareholder servicing function. The huge synergies thatexisted in the two organizations have helped the business grow at a rapid pace,

catapulting the company to among the top two fund houses in India.

Companys Vision

To be the premier global investment management organization by offering high

quality investment solutions, providing outstanding service and attracting, motivating

and retaining talented individuals.

India

One of the largest Mutual Funds with over Rs.24,510 crores

In assets. (as on April 08).

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Over 21 lakh shareholder accounts.

Healthy asset mix and great choice in equity and fixed-

income

Investment management style

Sizeable footprint in the country; presence in 33 cities.

Manages 4 equity funds with a track record of over 10 years.

Manages 3 of the 15 largest equity funds.

3.3 OBJECTIVES OF FRANKLIN TEMPLETON

INVESTMENTS

The principal objective of FRANKLIN TEMPLETON INVESTMENTS

was to reduce the risk that is always present in the share market and also to give the

investors a fair return than the banks. Today the investors do not have enough idea to

invest in the share market nor do they have the time to ponder over the working

principles of the share market. There are fund managers in every mutual fund

company to analyze the market and then invest on behalf of the investors.

So FRANKLIN TEMPLETON INVESTMENTS made the job of the

investors easy by investing on behalf of them. Thus the returns are high and the work

has also become very easy. It has provided a wide range of products, which are very

specific according to the needs of the investors

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3.4 PRODUCTS

Franklin Templeton Investments has a wide variety of products to cater to the needs

of different types of investors. The main products of Franklin Templeton Investments

can be said to consist of the following: -

OPEN END DIVERSIFIED EQUITY SCHEMES

Franklin India Blue-chip Fund (FIBCF)

Templeton India Growth Fund (TIGF)

Franklin India Prima Fund (FIPF)

Franklin India Prima plus (FIPP)

Franklin India Opportunities Fund (FIOF)

Templeton India Equity Income Fund (TIEIF)

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Franklin India Index Fund (FIIF)

Franklin India Flexi Cap Fund (FIFCF)

Franklin India High Growth Companies Fund (FIHGCF)

OPEN END SECTOR EQUITY SCHEMES

Franklin FMCG Fund (FFF)

Franklin Pharma Fund (FPF)

Franklin InfoTech Fund (FIF)

OPEN END TAX SAVINGSCHEMES

Franklin India Tax shield (FIT)

Franklin India Pension Plan (FIPP)

OPEN END INCOME AND LIQUID SCHEMES

Templeton India Income Fund (TIIF)

Templeton India Income Builder Account (TIIBA)

Templeton India Government Securities Fund (TGSF)

Templeton India Short-Term Income Fund (TISTIP)

Franklin India International Fund (FIIF)

FT India Monthly Income Plan (FTIMIP)

Templeton Monthly Income Plan (TMIP)

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OPEN END FUND OF FUNDS SCHEMES

FT India Life stage Fund of Funds (FTLF)

FT India Dynamic PE Ratio Fund of Funds (FTDPEF)

OPEN END HYBRID SCHEME

FT India Balanced Fund (FTIBF)

Templeton India Childrens Asset Plan (TICAP)

NFO

(New Fund Offer)

Franklin Templeton Fixed Tenure Fund

Initial Offer Opens on: June 20 2008

Initial Offer Closes on: July 31, 2008

Date of Allotment: August, 8, 2008

Offer of Units at Rs. 10 per Unit (plus applicable load) for cash during the New Fund

Offer Period and at NAV based prices upon re-opening.

Investment Objective

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A close end income fund that seeks to generate and reduce interest rate volatility,

through a portfolio of fixed income securities with a maturity profile generally in line

with the funds duration along with capital appreciation through equity exposure.

Asset Allocation Pattern

Types of Instruments Normal Allocation

Debt securities and money market

instrument#

(Min% - Max %)

70% - 100%

Equities and Equity Linked instrument 0% - 30%

Plans and Options

Growth Plan

Dividend Plan

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Payout Option

Minimum Application Amount

Purchase: - Rs.10000/- and any amount in multiple of Rs.1/-

Additional Purchase: - Rs.1000/- and any amount in multiple of Rs.1/-

Repurchase: - Rs.1000/- and any amount in multiple of Rs.1/-

Benchmark Index

25% S&P CNX 500+65% crisil composite Bond fund index+10% crisil liquid fund

index

Name of the Fund Manager(s)

Mr.Pallab Roy&Mr. Anand Radhakrishnan.

Name of the Trustee Company

Franklin Templeton Trustee Services Pvt. Ltd., a company set up under the

Companies Act 1956, and approved by SEBI to act as the trustee to the funds of

Franklin Templeton Mutual Fund.

Load Structure

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Entry: Nil;

Exit:On Redemption/Repurchase? Switch-out transactions before maturity of thefund asmentioned below.

Redemption period at the end of

(from the Date of Allotment)

As % of NAV

Up to 18 months

After 18 months but before 30months



After 54 months but beforematurity

3%

2.5%

2%

1%

0.5%

0%

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On maturity.

3.5 SOME OF MUTUAL FUND SCHEME

Franklin India Prima plus (FIPP)

Investment objective

An open ended growth scheme with an objective to provide growth of capital

plus regular dividend through a diversified portfolio of equities fixed incomesecurities and money market instruments

Highlights

DailyNAV

Choice: Growth Plan and Dividend Plan (Reinvestment & Payout options)

Low entry amount of Rs.5000

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Easy liquidity: transactions are processed within 4 working days normally

Convenience ofSystematic Investment Plan : the ideal way to accumulate wealthover the long term




Repurchase - Rs.1000/- and any amount in multiple of Rs.1/-

Load Structure

Entry: Rs.5 Crs: Nil;

Exit : Rs.5 Crs:1% (For redemption within 1 year of allotment

Systematic investment plan: minimum amount Rs. 500 per month

Franklin India Flexi Cap Fund (FIFCF)


An open ended growth scheme with an objective to provide medium to long

term capital appreciation as a primary objective and income as a secondary objective.

Highlights

DailyNAV



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Convenience ofSystematic Investment Plan: the ideal way to accumulate wealthover the long term





Load Structure


Exit : Rs.5 Crs:1% (For redemption within 1 year of allotment

Systematic investment plan: minimum amount Rs. 500 per month 12 month

Franklin India High Growth Companies Fund (FIHGCF)-

Investment Objective

Franklin India High Growth Companies Fund (FIHGCF) is an open-end diversifiedequity fund that seeks to achieve capital appreciation through investment in Indian

companies/sectors with high growth rate or potential.

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Asset Allocation Pattern

Types of Instruments NormalAllocation

Equity and Equity Linked Instruments

Debt securities and Money MarketInstruments

(Min% - Max%)

70% - 100%

0% - 30%

Plans and Options

Growth Plan

Dividend Plan

Payout Option

Reinvestment Option





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Benchmark Index

S&P CNX 500

Name of the Fund Manager(s)

K.N. Siva Subramanian and Anand Radhakrishnan

Name of the Trustee Company

Franklin Templeton Trustee Services Pvt. Ltd.,a company set up under the

Companies Act 1956, and approved by SEBI to act as the trustee to the funds of

Franklin Templeton Mutual Fund.

Load Structure


Exit : Rs.5 Crs:

1% (For redemption within 1 year of allotment)

Systematic Investment Plan

Rs.1000 or more for at least 12 months & all installments should be for the same

amount (Only through ECS/Direct debit)

Franklin India Prima Fund (FIPF)


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An open ended growth scheme with an objective to provide medium to long

term capital appreciation as a primary objective and income as a secondary objective

Highlights

DailyNAV




Convenience ofSystematic Investment Plan : the ideal way to accumulate wealth

over the long term

NRIs can invest on a fully repairable basis





Load Structure


Exit : Rs.5 Crs:

1% (For redemption within 1 year of allotment

Systematic investment plan: minimum amount Rs. 500 per month 12 month.

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I.M.R.T

PRESIDENT (LEADING INDIA)

SENIOR VICE PRESIDENT

SALES HEAD (COUNTRY)

VICE PRESIDENT

MANAGEMENT TRAINEE

BUSINESS DEVELOPMENT EXECUTIVE

BUSINESS DEVELOPMENT MANAGER (BRANCH LEVEL)

AREA SALES MANAGER

SENIOR MANAGER

BRANCH MANAGER (METRO)

REGIONAL SALES MANAGER

ASSISTANT VICE PRESIDENT

3.6 ORGANIZATION CHART

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CHAPTER

4

DATA ANALYSIS

&

PRESENTATION

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DATA ANALYSIS AND PRESENTATION

1) Market share acquired by different AMC (on the basis of Branchmanager opinion)

%

40

20

18

12

10

SBI RELIANCE FRANKLIN TEMPLETON KOTAK ICICI

Table No-1

I.M.R.T

Asset management

company

%

SBI 40

RELIANCE 20FRANKLIN TEMPLETON 18

KOTAK 12

ICICI 10

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Analysis:

The above chart show that the SBI has the largest market share among the

respective AMC.This is because customers have more faith in making investment in

PSU Banks. Second market share leader is reliance which is the immediate

competitor of Franklin Templeton.

2) Investment preference of customers.

Investment %

Bank FD 40

Insurance 30

Mutual fund 20

Equity 10

40

30

20

10

Bank FD Insurance Mutual fund Equity

Table No-2

Analysis:

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The above chart shows consumers prefer to invest in Bank FD rather than

other capital instruments.

Customers opinion

3) No of people interviewed at different Banks

Banks No of people

Bank of India 5

Union Bank Of India 25

United Bank Of India 5

Central Bank of India 10

Total 45

5

25

5

10

Bank of India Union Bank Of India

United Bank Of India Central Bank of India

Table No.3

Analysis:

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From the above data it can be said that maximum 52% of the people of Patna

were from Union Bank was interviewed

4) No of people aware about FT mutual fund in different Banks

I.M.R.T

Banks No of people

Bank of India 5

Union Bank Of India 25

United Bank Of India 5

Central Bank of India 10

Total 45

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5

25

5

10

Bank of India Union Bank Of India

United Bank Of India Central Bank of India

Table No.4

Analysis:

From the above data it can be said that maximum 25 out off 45 means around 52% of

people of Bank of India are aware about FT mutual fund.

5) Awareness of FT mutual fund in different age groups.

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10

20

5

5

5

60

Table-No.5

Analysis:-

From the above data it can be said that 20 people out off 45 were aware about

FT and in which youngsters (


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6) No of People interviewed belonging to various Professions.

I.M.R.T

Professions No of people

Government employees 20

Private sector employees 15

Professionals 10

Total 45

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20

15

10

Government employees Private sector employees Professionals

Table No.6

Analysis:

From the above data it can be said that no of people who interviewed,

more people 20 out off 45 (around 45%) were Government employees and the least

no of people were professionals.

.

7) No of people communicated through various activities

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120

80

Pamphlet Distribution Canopy set up

Table No. 8

Analysis:

From the above data it can be said that more people were from pamphlet distribution

.Another activity was canopy set up in different Banks

I.M.R.T

various Activity No of people

Pamphlet Distribution 120

Canopy set up 80

Total 200

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8) Level of satisfaction relating to service provided by PSU Banks

related to Franklin Templeton Mutual Fund.

20

15

10

1%to20% 21to61% 61&Above

Table No.9

Analysis:

I.M.R.T

Level of satisfaction No of people

1%to20% 20

21to61% 15

61&Above 10

Total 45

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From the above data we can see that many of the customers are not satisfied with the

service provided by PSU Banks.

9) Preference given to FTI funds by consumers.

Funds name Preferences

Franklin India primaplus

1

Franklin India flexi capfund

2

Franklin India highgrowth companies fund

3

Franklin India primafund

4

1

2

3

4

Franklin India prima plus

Franklin India flexi cap fund

Franklin India high growth companies f

Franklin India prima fund

Table No-10

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Analysis:

The above chart shows that FIPP fund is is being no-1 fund respective toothers funds provided by FTI

CHAPTER

5

CONCLUSION

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CONCLUSION

As we compare India with other countries we find that in service sector the share of

banking sector is more than life insurance and mutual funds, where as in other

country life insurance come first than mutual fund and the Banking sector.

As banking sector has the large customer base it is good to sale the mutual fund

product through Banks. They have the large customer base, which could be useful

for selling the FT mutual fund products.

The mutual fund industry in India has also increased in the recent years.

The performance of Franklin Templeton mutual fund is good. Franklin Templeton

awarded as the 10 best funds in India by Economy times.

PSU Banks has large customer base, which can be used to sell the FT product and

also be useful to satisfy the customer as the customer is getting all the products under

one roof.

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CHAPTER

6

OBSERVATIONS&

FINDINGS

Observation and finding:

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Mutual funds fetches fair returns over a longer period of time Sectoralequity funds

are more risky to invest than equity diversified funds as its allocation is restricted

only to one sector.

1) Mutual Fund is one option available for the investors to invest.

2) Mutual Funds are subject to market risk.

3) The evaluation of the mutual funds can be done by standard deviation, Sharpe

ratio, beta ratio, alpha ratio, r-squared ratio.

4) Every Mutual fund has an objective and so the selection of the option of mutual

fund is different for different for different investors baser on their risk appetite and

liquidity requirement.

There are some ground rules for the common man who wants to

enter this world of investments and start investing in mutual funds.

They are:

1) Start Early:

The sooner you invest, the more time will grow. If you delay, you will almost

certainly have to invest much to achieve a similar result.e.g. If you start investing

Rs.5000 a month on your 40th birthday, in 20years time you would have put aside

Rs.12 lakhs. If that investment grew by an average of 7% a year, it would be worth

Rs.25, 52,994 when you reach 60.

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If you started investing ten years earlier, your Rs.5000 each month would add up to

Rs.18 lakh over 30 years. Assuming the same average annual growth of 7%, you

would have Rs. 58, 82,545 on your 60th birthday- more than double the amount you

would have received if youd started ten years later! The bottom line- your

investments gain most from compounded interest when you have time on your side.

2) Keep some cash aside.

It is always a good idea to have some money in a depot account in case of

emergencies. Enough to cover three months living expenses is often a rough guide to

how much you need. And make sure you can withdraw it when you need to, without

penalties.

Reasons you might need your money at short notice:

Making a major purchase

Taking an unplanned holiday

Seeing you through an emergency such as hospitalization or job loss.

3) Ask yourself how much risk you can take.

There is no point having a stock market investment if you are going to lose sleep

every time share prices go through a rough patch. Its vital that you are realistic

about your appetite for risk- an Investment Advisor may be able to help you decide

how much risk you can tolerate.

4) Bear in mind inflation will eat into your savings:

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Returns on risk-free cash investment may sound respectable, but when you subtract

current inflation rate you may not be impressed. For significant long-term growth

you need to make your money work a little harder. For e.g.: If you have Rs. 10,000

in a saving account earning 3% interest each year, in 20 year time, your savings

would be worth Rs. 18,061. Thats return of just over 80%. However, of inflation is

about 7%, Rs. 18,061 would only be worth Rs. 4,668 in todays term.

5) Think carefully about how long you will be investing for:

Only look the stock market if you are prepared to put you money away for five or ten

years, or perhaps even longer. If you are likely to need your money any sooner, keep

it in a lower-risk investment so there is less chance of fall in value just before you

make a withdrawal.

6) Spread your money across a range of investments:

Its rarely a good idea to have all your eggs in one basket. Depending on your goals

and your attitude to risk, you will probably want to spread your money across

different types of investments- equities, bonds and cash. You may also want to

diversify within each of these categories. With equities, for example, a mutual will

invest your money in a variety of Companies but you may want to ensure you have a

range of the industry sectors too.

7) Invest regularly:

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Investing regularly can be a great way to build up a significant lump sum. You will

also benefit from what is known as rupee cost averaging. This means that, if you are

investing in a mutual fund, over the years will pay the average price for units, if the

market goes up, the units you already own will increase in value. If it goes down,

your next payment will buy more units.

8) Choose your funds carefully:

You should select investments on the basis of what is right for your personal

circumstances and goals. If you are deciding on a mutual fund to invest in, dont opt

for the one that is the flavor of the month, unless you are sure it will be right for your

needs in the years to come. And dont assume that all funds investing in Indian

equities are essentially the same- look at the details of what a fund invests in and

check if you are comfortable with its investment style and objective.

9) Remember that time not timing is the key to successful

investing:

When you are planning an invest, it can be tempting to wait for the market to reach a

low point. But how will you know when it happens? You run the risk of missing out

on the significant rises that often occur in the early days of an upward trend. It is said

that even experts cannot time the market With consistent success. It is better to

choose an investment that you feel confident about and take a long-term view, so that

you have time to ride out any ups and downs in the market.

10) Review your investments:

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A portfolio that is the right for you at one point in your life may not be quite so

suitable a few years later. Your investments need to adapt to changes in your

circumstances, such as getting married, having children or starting a business. Its

also a good idea to check that each of the funds in your portfolio is living up to your

expectations.

Regarding customers:

People are not much aware about the mutual fund. They dont have idea

about the investment pattern in mutual funds or any other securities.

They have more faith over LIC, UTI, Post Office, and Banks rather than

towards mutual fund or any such types of securities.

They have hesitation from taking risk.

They invest in insurance more comfortably than any other risk taking

securities.

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CHAPTER

7

SUGGESTIONS

SUGGESTION

Systematic Investment Plan (SIP):

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These require the investor to investor to invest a fixed to sum periodically, thereby

letting the investor save in a disciplined and the phased manner. The mode of the

investment could be through direct debit to the investors salary or bank account.

Such plans are also known as Systematic Investment Plan. Investors looking for

rupee cost averaging will generally opt for that offer this facility.

A modified version of SIP is the Voluntary Accumulation Plan (VAP) that allows the

investor flexibility with respect to the amount and frequency of investment. Note that

both SIP and VAP are only two optional ways of investing in a disciplined manner,

in open end funds. The difference is that in the SIP, the investor agrees as acontractual obligation to deep investing, whereas in case of the VAP, he is not

obliged to keep investing but has to impose voluntary self discipline.

Model Portfolio:

Following are the steps to create a model portfolio for the

investors:

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1) Develop long term goals:

Investors should clearly understand the returns and risks of various investments

avenues, and define their goals clearly, both in terms of time horizon and expectedreturns. This enables the creation of a portfolio that will serve these objectives.

2) Determine asset allocation:

Financial planners should help investors to allocate their funds into board assets

classes, based on their need growth, income and liquidity. This will enable an

understanding of how the various components of the model portfolio, can contribute

towards meeting the financial goals of investors.

3) Determine sector distribution:

Once the board allocations for growth, income and liquidity have been made,

investors have to choose the sector of the mutual fund industry, where they would

like to invest their funds. For e.g. liquidity needs can be met by investing in money

market funds. The exercise of allocating the available funds to various mutual fund

products is called sector distribution.

4) Select specific fund managers and their scheme:

If an investor chooses to allocate 20% of his funds for liquidity needs, and decided

that this money would go into liquid funds, the next step is to choose the fund

scheme in which to invest.

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Regarding branch office

Make personal contact with Branch manager so that they give more attention

towards Franklin Templeton.

Give time-to-time visit to the PSU Banks so that it gives additional impact on

Branch manager towards Franklin Templeton..

Give attractive incentives and bonanza to the customer relation executive,

different from others.

To make people more aware about mutual fund and Franklin Templeton., give

demonstration to the various Banks and other corporate offices.

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CHAPTER

8

APPENDIXES

QUESTIONNAIRE

FOR

PRODUCT AWARENESS

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NAME -: _ __ _ _ _ _ _ _ _ _ _ _ _ _ _ _

ADDRESS: _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

_ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

CONTACT NO. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

Q.1 Do you know about mutual funds?

a) Yes

b) No

Q 2 where you invest your money?

a) Banks

b) Post-office

c) Mutual funds

d) Others

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Q3) what % of your income you used to invest?

a) 10-20%

b) 20-40%

c) 40-50%

d) 50% & above.

Q4.) Have you ever invested in mutual fund?

a) Yes

b) No

Q 5) what is your expectations of return on investment?

a) Up to 10%

b) 10-20%

c) 20-30%

d) 30-40%

e) 40% above.

Q 6) Are you attached with FRANKLIN TEMPLETON

INVESTMENTS?

a) Yes

b) No

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Q 7) If you would have given complete freedom which kind of

investment you will choose?

a) Higher risk & higher gain.

b) No risk & small gain.

c) Low risk & high gain.

Q.8) Which AMC provides you better services and solution to your

Complains?

a) ICICI

b) HDFC

c) FTI

d) Others

Q9) what kind of client do you have?

a) Government Job

b) Private Job

c) Businessman

d) Others

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Q.10) on advertisement front how many points you would like to give

to FTI out of 10

BIBLIOGRAPHY

1) Value Research magazine

2) www.franklintempletonindia.com

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3) www.indiainfoline.com

4) www.amfiindia.com

5) Marketing Management by V.S. Ramaswamy & S. Namakumari

6) www.hdfcfund.com
http://www.amfiindia.com/http://www.amfiindia.com/

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