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BLACKBOOK PROJECT ON

ANALYSIS OF investment products OF IN INDIA

Submitted In Partial Fulfillment Of The Requirement For Bachelor In
Management Studies (Finance)

PREPARED BY: [Link]

BMS (FINANCE)
ROLL NO. 81

UNDER THE GUIADENCE OF

PROF: SURAJ WADHWA

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 INDEX
COMPARATIVE ANALYSIS OF INVESTMENT PRODUCTS IN INDIA

SR NO.
CHAPTERS PAGE NO.

INTRODUCTION TO INVESTMENTS

DEFINATION OF INVESTMENT

REASONS OF INVESTMENT

OBJECTIVES OF PROJECT

PRODUCTS TO INVESTMENTS

SAMPLING DESIGN

FINDINGS

RECOMMENDATIONS

SUGGESTION

CONCLUSION

BIBLOGRAPHY

ANEXXURE

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 LATE SHRI VISHNU WAMAN THAKUR CHARITABLE TRUSTS
BHASKAR WAMAN THAKUR COLLEGE OF SCIENCE,
YASHVANT KESHAV PATIL COLLEGE OF COMMERCE,
VIDHYA DAYANAND PATIL COLLEGE OF ARTS

COMPARATIVE ANALYSIS OF INVESTMENT PRODUCTS IN INDIA

PROJECT SUBMITTED TO

UNIVERSITY OF MUMBAI

BY

SURNAME, FIRST NAME, FATHERS NAME

ROLL NO. _____81________
[Link] SEM. V EXAMINATION SEAT NO. ________

GUIDED BY:

PROF. _SURAJ WADHWA

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 DECLARATION

I hereby declare that the Project titled COMPARATIVE ANALYSIS OF

INVESTMENT PRODUCTS IN INDIA is an original work prepared by me and
is being submitted to the University of Mumbai in partial fulfillment of BMS
Degree for the academic year 2016-17.

To the best of my knowledge, this Project Report has not been submitted earlier to
this University or to any other Affiliated College for the fulfillment of BMS Degree.
The contents of the Project are not copied from any other source such as Internet,
Earlier Projects, Text books etc.

Signature of the Student:

Name of the Student: SHETTY BHAGYESH BHASKAR

Roll No.:

TYBMS Sem. V Examination Seat No.:

Place: Virar

Date:

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 INTRODUCTION TO INVESTMENT

To invest is to allocate money (or sometimes another resource, such as time) in the expectation of some
benefit in the future.

In finance, the expected future benefit from investment is called a return (to investment). The return may
consist of capital gain and/or investment income, include in dividend, interest, rental income etc. The
economic return to an investment is the appropriately discounted value of the future returns to the
investment.

Investment generally results in acquiring an assets, also called an investment. If the asset is available at a
price worth investing, it is normally expected either to generate income, or to appreciate in value, so that
it can be sold at a higher price (or both).

Investors generally expect higher returns from riskers investments. Financial assets range from low-risk,
low-return investments, such as high-grade government bonds, to those with higher risk and higher
expected commensurate reward, such as emerging markets stock investments.

Investors, particularly novices, are often advised to adopt an investment

strategy and diversify their portfolio. Diversification has the statistical effect of reducing overall risk.

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The act of committing money or capital to an endeavor with the expectation of obtaining an additional
income or profit.

It's actually pretty simple: investing means putting your money to work for you. Essentially, it's a
different way to think about how to make money. Growing up, most of us were taught that you can earn
an income only by getting a job and working. And that's exactly what most of us do. There's one big
problem with this: if you want more money, you have to work more hours. However, there is a limit to
how many hours a day we can work, not to mention the fact that having a bunch of money is no fun if we
don't have the leisure time to enjoy it

You can't create a duplicate of yourself to increase your working time, so instead, you need to send an
extension of yourself - your money - to work. That way, while you are putting in hours for your employer,
or even mowing your lawn, sleeping, reading the paper or socializing with friends, you can also be
earning money elsewhere. Quite simply, making your money work for you maximizes your earning
potential whether or not you receive a raise, decide to work overtime or look for a higher-paying job.

There are many different ways you can go about making an investment. This includes putting money
into stocks, bonds, mutual funds, or real estate (among many other things), or starting your own business.
Sometimes people refer to these options as "investment vehicles," which is just another way of saying "a
way to invest." Each of these vehicles has positives and negatives, which we'll discuss in a later section of
this tutorial. The point is that it doesn't matter which method you choose for investing your money, the
goal is always to put your money to work so it earns you an additional profit. Even though this is a simple
idea, it's the most important concept for you to understand

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 DEFINATION OF INVESTMENT
What is an 'Investment'

An investment is an asset or item that is purchased with the hope that it will generate income or will
appreciate in the future. In an economic sense, an investment is the purchase of goods that are not
consumed today but are used in the future to create wealth. In finance, an investment is a monetary asset
purchased with the idea that the asset will provide income in the future or will be sold at a higher price
for a profit.

!--break--The term "investment" can be used to refer to any mechanism used for the purpose of
generating future income. In the financial sense, this includes the purchase of bonds, stocks or real
estate property. Additionally, the constructed building or other facility used to produce goods can be seen
as an investment. The production of goods required to produce other goods may also be seen as investing.

Taking an action in the hopes of raising future revenue can also be an investment. Choosing to pursue
additional education can be considered an investment, as the goal is to increase knowledge and improve
skills in the hopes of producing more income.

Investments and Speculation

Speculation is a separate activity from making an investment. Investing involves the purchase of assets
with the intent of holding them for the long-term, while speculation involves attempting to capitalize on
market inefficiencies for short-term profit. Ownership is generally not a goal of speculators, while
investors often look to build the number of assets in their portfolios over time.

Although speculators are often making informed decisions, speculation cannot usually be categorized as
traditional investing. Speculation is generally considered higher risk than traditional investing, though
this can vary depending on the type of investment involved.

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 REASONS OF INVESTMENT
One of the most compelling reasons for you to invest is the prospect of not having to work your entire
life! Bottom line, there are only two ways to make money: by working and/or by having your assets work
for you.

If you keep your money in your back pocket instead of investing it, your money doesn't work for you and
you will never have more money than what you save. By investing your money, you are getting your
money to generate more money by earning interest on what you put away or by buying and selling assets
that increase in value.

It really doesn't matter how you do it. Whether you invest in stocks, bonds, mutual
funds, options and futures, precious metals, real estate, your own small business , or any combination
thereof, the objective is the same: to make investments that will generate more cash for you in the future.
As they say, "Money isn't everything, but happiness alone can't keep out the rain."

Whether your goal is to send your kids to college or to retire on a yacht in the Mediterranean, investing is
essential to getting you where you want to be.

Here are some articles that will help you on your way: Basic Investment Objectives, Ten Tips For The
Successful Long-Term Investor and Ten Books Every Investor Should Read.

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 OBJECTIVEOF OF THE PROJECT

To understand all about different investment avenues available in India.

To find out how the investors get information about the various financial instrument

To find out how the investor wants to invest i.e. on his own or through a broker.

To find out the saving habits of the different customers and the amount they invest in various financial
instruments.

In which type of financial instrument they like to invest.

How long they prefer to keep their money invested.

What is the return that they expect from the investment?

What are the various factors that they consider before investing?

To find out the risk profile of the investor.

To give a recommendation to the investors that where they should invest.

To give a suggestion to the company where its funds lack in the market & how it should be rectified.

After all as a management trainee I will try to get some valuable knowledge from my seniors in the
organization as well as from my faculty guide which will help me in the future.

To evaluate the consumer attitude towards saving and decision making regarding investments.

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 PRODUCTS OF INVESTMENT
Best Investment Options, Plans in India

Conservative Investment Options

1) Public Provident Fund PPF2

Well this was a no-brainer. If you belong to the salaried class or are a small business owner, you should
consider the PPF as your first option. You do not need to explore other options before you consider this.

Public Provident Fund offers almost 99% security being operated by the government. You already would
know the benefits of PPF like

Minimum investment of Rs.500 and maximum investment of Rs.1,00,000(if youre considering tax
deduction under 80C)
Tax free interest and maturity amount
One of best interest among fixed income products 8.7% p.a in 2014
Free from creditors, loan sharks and court attachments

There is practically no disadvantage in PPF investments. If you have any remaining benefit under 80c
after paying term insurance & children tuition fee you should definitely invest remaining in PPF. You can
use a PPF or an EPF (Employee Provident Fund) to add fixed income to your portfolio and maintain
stability.

Tip: The best investment option if youre in high tax bracket. Gives you total savings of 11% which is the
best if youre in 30% tax bracket. Do not consider other investment options like stocks until you have
maxed out your 80C with term insurance, PPF if youre retail investor. PPF is so far the best low risk
long term investment in India.
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Definitely read: For complete details on PPF, check out Public Provident Fund -PPF

2) National Savings Certificate (NSC)

NSC is a popular choice among rural Indians. The minimum investment is Rs.100 and one has option to
choose 5 or 10 year period. The current interest is 8.5% for 5 years and 8.8% for 10 years.

Just like PPF, the Indian government fixes the interest rate for NSC each [Link] recent issues of NSC
are NSC VIII(available for deduction under 80C) and NSC IX.

However, one needs to pay interest on interest earned from National Savings Certificate. The section
80TTA removed the tax benefits of interest from NSC. Thats why we advocate to make use of PPF
instead of NSC.

Tip: Re-invest the interest from NSC to get 80C benefit. For eg., you receive Rs 8,800 as interest from Rs
1 lakh investment in NSC. Instead of withdrawing and paying tax, you can allow it to accumulate and
show this 8,800 as re-investment next year and claim tax deduction under 80C .Cool, isnt it?

Check out the Indian post link for details: NSC through Indian post

3) Senior Citizen Savings Scheme (SCSS)

Probably the best investment option plan if youre above 60 years. The rate of interest for Senior Citizen
Savings Scheme is nearly 9.2% now. Usually the interest is around 1% above the 10 year government
securities yield.

So for eg., if the 10 year yield is 8% in a year, the SCSS interest will be 9% give or take 10 basis points.

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Pro:

High interest rate

Tax saving under 80C
Provided liquidity as interest is paid quarterly

Cons:

15 lakh maximum investment limit

Interest is taxable
Tax saving limited to Rs 1 lakh
Some bank FDs offer higher returns for Senior Citizens

4) Money Market Funds

Money Market Funds are ideal as short-term investments options. These also called Liquid funds. As the
name suggests, liquidity is the primary motto. These offer slightly higher returns than Savings Accounts.2

The returns range from 5.5 to 9% based on the period and risk category. Liquid funds are fairly safe
investments as they invest in fixed income securities of governments and corporates.

Money market funds are one of largest pie of mutual fund industry. ICICI Pru Liquid Plan and HDFC
Liquid Fund are some of best liquid funds to consider for investment in India

Tip: If you have surplus money for 2-10 months, then consider investing in a money market fund. Earns
better interest than Savings Bank Account. The withdrawal money is usually credited the next day or
two. Also look for liquid funds with total assets managed more than Rs.300 crores

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Related Wikipedia article: Money Market Funds

5) Bank Fixed Deposits (FDs)

A Term Deposit or bank fixed deposit as its often called is a good choice if your investment period is 6-24
months. It is very common and simple product which does not need much explanation. Also the rules
vary from one bank to another. Typically, smaller banks offer higher interest [Link] minimum
investment period is 30 days.

Pros:

Easy availability and ease of operation/withdrawal

Good interest rate
Safety of capital

Cons:

Usually early withdrawal has a penalty

Lesser interest compared to Corporate Deposits

Tip: Private Sector Banks typically pay lesser interest. So better interest can be earned by investing in
Public Sector Banks especially medium-sized banks.

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 Source: [Link]

6) Sukanya Samriddhi Yojana

Sukanya Samriddhi Yojana is a must-have investment option in my opinion if youre risk averse.

It is with sole aim of saving for your daughters long term future whether it is for marriage or education
purpose.

Some salient features of this investment product is the high interest rate @ 9.2 % in 2015 (may change in
future). This shows the importance of the products in governments scheme of things.

You can invest as less as Rs. 1000 in a year. The investment plan period is maximum of 21 years from date
of opening or marriage date whichever is first.

You can open maximum 2 accounts one for each daughter. You can check more details from our detailed
post below

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7) National Pension System

National Pension System(NPS) has got way more attractive than it was earlier and become one of best
investment options now. Broadly, all individuals between age of 18 to 60 can join the NPS.

You get tax benefit for investment up to Rs 50,000 under section 80 CCD(1B) in addition to Rs 1.5lakhs
under section 80C.

The investments are regulated by PFRDA and hence considered a safe investment option. You can choose
the percentage exposure you want to equity.

The minimum investment is Rs.500 per month and fund management charge is very low at 0.01%.
Another long term safe investment for conservative investors.

8) Atal Pension Yojana

Atal Pension Yojana is a recent investment option launched by Modi government. Here any Indian
between 18-40 years can join the scheme.

The government will contribute 50% of your contribution for 5 years or Rs 1000. Whichever is lower is
applicable.

But this government contribution is only for non income tax payers. If you want monthly pension of Rs
5000, then your monthly contribution starting from age 20 years is Rs 250 approx.

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This is safe investment option for lower income people for long term investments. You cannot withdraw
before attaining 60 years unless exceptional scenario.

TYPES OF INVESTMENT OPTIONS AVAILABLE

IN THE MARKET

Mutual Funds

Bond/IPOs

Insurance
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Fixed Deposits

Govt. Securities

Real Estate\

Commodities

The Investments Products Mentioned Above Are Few Of The Investment T echniqes In The Market
Which Are Popular Amongst The Investors Prospective!

SAMPLING DESIGN

Sampling Area : MUMBAI city

Sample Population : above 15,000

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Sample Size : 100

METHODS

The method used in the research (survey) is of probability types we are unaware about the results.

It can be either of the side. It is area of MUMBAI city under which we have to conducted research.

The research is based on Convenience Method s. and the taken sample from to various stock broking
company.

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 RESEARCH DESIGN

Research : Descriptive & Objective

Data Source : Primary data

Research Method : Survey Method

Research Technique : Questionnaire

Type of Questionnaire : Structured

Type of Questions : Closed & Open ended Questions

No of Questions : 15

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 FINDINGS

This is probably the most important question of the questionnaire; the result of this question is that most
of the

people think of (RISK TAKING ABILITY) because it is the most crucial constraint.

Next comes is the facilities given to them under the funds and also the ROI (return on investment).

There are other factors also like time duration of their investment and Company reputation in the
market.

WE by analyzing the investment market in Mumbai with the help of the sample size and the static and
diagrams we came to the conclusion of better investments products ,

With the help of these information we can classify the rankings of the most preferable investments in the
market.

In these analysis we got the risk factors which should be taken into consideration before any investments
in the products.

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 RECOMMENDATIONS

Mutual Funds can also be offered as they have high risk profile.

Company should take initiative to get demat account of these customers.

The age group of 41-50 years, investors are from the 15,000-20,000 Rs disposable income group.
Investor in this group are invested in

Insurance sector, the primary focus of these investors are retirement and time horizon is likely to be 6-9
years.

This is also good potential group for the retirement plan in ULIPs. Fixed deposits can be a good option
for them.

In the survey there were lot of people who were in the age group of above 60. For this group of people
the company can target

Fixed deposits which gives continues return like monthly interests so that they can keep on getting
returns.

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 SUGGESTIONS

Return on Investment is must but the risk also should be minimizing at the same time.

No one loves to lose his hard earned money therefore it should be invested in safer place.

Services are must for them and therefore the company must also concentrate on this aspect.

Good advisory services, secrecy of the data given to the company as well as every people must treated as
they all are equal i.e. no biasness.

Charges of the services provided to them should be reasonable and viable.

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 ANNEXTURE

In this project the people or the sample size which have been selected for the collection of the information
has been asked some of the questions mentioned below:

1} DO YOU KNOW ABOUT THE FOLLOWING FINANCIAL INSTRUMENT?

2} HOW DO YOU GET INFORMATION REGARDING THESE FINANCIAL INSTRUMENTS?

3} RATINGS OF INVESTMENT OPTIONS AS PER THE CUSTOMERS PREFERENCE?

4} DO YOU INVEST IN FINANCIAL INSTRUMENTS?

5} WHERE DO YOU INVEST YOUR SAVINGS?

6} WHAT ARE THE FACTORS WHICH YOU CONSIDER WHILE INVESTING IN ANY
FINANCIAL INSTRUMENTS?

7}

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