“ ULIPS v/s Mutual fund” as an I nvestment O ption among the Investors of Ludhiana

1. “ULIPS v/s Mutual fund” as an Investment Option among the Investors of Ludhiana Presented by- Maninder Vadhrah

2. Historical background of the group • It was established in 1865. • Aimed to finance the growing trade between Europe, India & China. • By 1880s, the bank was acting as banker to Hong Kong Government. • It is also participated in the management of British government accounts in China, Japan, Penang & Singapore.

3. Introduction to HSBC • HSBC is world’s local bank. • Headquarters in London. • HSBC’s international network comprises over 9500 offices in 76 countries & territories in Europe, the Asia-Pacific region, the Americas, the Middle East & Africa.

4. HSBC provides a comprehensive range of financial services like- • Personal financial services • Commercial Banking • Corporate Banking • Investment Banking

5. HSBC Group in India • It offers a full range of Banking & Financial Services to its over 2.8 million customers. • It has 47 branches & 170 ATMs across 26 cities. • It has over 34,000 employees in its Banking, Investment Banking & Capital Markets. • With Asset Management, 2 Global IT development centres & 6 Global resourcing operations in the country.

6. Sale of Stake in Investsmart to HSBC • HSBC acquired 29.36% stake in IL&FS InvestSmart Ltd. • HSBC acquired 43.85% of InvestSmart from E*TRADE Mauritius Ltd. • HSBC has accepted shares to Public shareholders equivalent to 20.65% of InvestSmart’s capital. • Thus, it has completed its acquisition of 93.86% of IL&FS for a consideration of US$296.4 million.

7. Vision & Mission Vision :To become the preferred long term financial partner to a wide base of customers whilst optimizing stakeholders value. Mission: To establish a base of 1 million satisfied customers by 2010. We will create this by being a responsible and trustworthy partner.

8. PRODUCT PROFILE All the products of IL&FS can be broadly divided into the following two categories: • Online Trading Products. • Advisory Services. • Other services.

9. Online Trading Product of IL&FS Investsmart Basically IL&FS Investsmart offers three types of products to its retail customers. • Smart Start • Smart Invest • Smart Trade

10. Advisory Services • Mutual fund advisory services. • Portfolio management services. • IPO Advisory and Distribution Services. • Insurance Advisory Services. • Investment Advisory services

11. Other Services • Online services. • Research and Financial Analysis. • Value added services.

12. Organisational Members • Mr. ManasijeMishra MD & CEO • Mr. AvdhootDeshpande Head - Equity and Capital Markets • Mr. Vipul Shah Head - NBFC • Mr. Dharmen shah Vice President - Institutional Equity • Mr. JaideepAnandSenior Vice President - Institutional Sales & Dealing • Mr. C. Diwakar Chief Information Officer • Mr. K. Venkatesh Head – Distribution

13. Organization Chart

14. SWOT ANALYSIS Strengths:- • Customization. • Expertise. • Unique Features. • Research Agency. • Extensive reach. • Brand image. • Competitive pricing. Weaknesses:- • Expensive Products. • Tedious Procedures. • Fund Transfer. • Attrition.

15. Continued………. Opportunities:- • Right Time to Investors to re-enter into market. • Huge untapped Markets. • Increasing number of Graduates. • Increase Tie-ups for Fund Transfer. Threats:- • Stiff Competition. • Increasing awareness of Mutual Funds & ULIPS.

16. RATIO ANALYSIS • Current Ratio

17. Quick Ratio

18. Return on Total Assets

19. Net Profit Ratio

20. Debt-Equity Ratio

21. Introduction to the ULIPs • Unit-linked insurance plans, popularly known as Ulips are life insurance policies which offer a mix of investment and insurance similar to traditional life insurance policies, but with one major difference. • Unlike traditional policies, in Ulips investment risk lies with the insured (i.e., policy holder) and not with the insurance company

22. Different types of charges under ULIPs • Premium Allocation Charge • Fund Management Charge (FMC) • Policy Administration Charge • Surrender Charge • Switching Charge • Mortality charge • Rider premium charge • Partial withdrawal charge

23. Working of ULIPs • ULIPs work on the lines of mutual funds. The premium paid by the client (less any charge) is used to buy units in various funds (aggressive, balanced or conservative) floated by the insurance companies. • Units are bought according to the plan chosen by the policyholder. On every additional premium, more units are allotted to his fund.

24. USP of ULIPS Insurance cover plus savings Multiple investment options Flexibility Works like an SIP Fund Switching Option

25. HURDLES OF ULIP No standardization Lack of Flexibility in Life cover Overstating the Yield Internally made Sales Illustration Not all Show the Benchmark Return Early exit Options Creeping Cost

26. Introduction to Mutual Funds • A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. • The money thus collected is then invested in capital market instruments such as shares, debentures and other securities.

27. J

28. Set up of Mutual fund

29. Types of Mutual Fund Scheme • By Structure • Open ended Scheme. • Close ended Scheme. • Interval Scheme. • By Investment Objective • Growth Scheme. • Income Scheme. • Balanced Scheme. • Money Market Scheme. • Other Schemes • Tax Saving Scheme. • Special Scheme.

30. Advantages of Investing in Mutual Funds • Diversification • Professional management • Liquidity • Convenience

31. Disadvantages of Investing in Mutual Funds • No Guarantees • Fees and commissions • Taxes • Management risk

32. Comparison between ULIPS and Mutual fund • Unit Linked Insurance Policies (ULIPs) as an investment avenue are closest to mutual funds in terms of their structure and functioning. • ULIPs can be termed as mutual fund scheme with a insurance component

33. Points of difference between ULIPs & Mutual fund • Objective • Cost • Investment Duration • Flexibility • Liquidity • Investment Objective • Tax Implication

34. Title “ULIPS v/s Mutual fund” as an investment option among the investors of Ludhiana

35. Objectives • To know the customers awareness about Ulips and Mutual Fund. • To compare the investment in ULIPS plan with the Mutual fund. • To study the degree of risk involved in both. • To analyze the future prospective of these investment option.

36. Research Methodology • Research Design: - Descriptive Research Design. • Data Collection: - Primary Research:- Questionnaires

37. Secondary Research: - Journals & Magazines. • Sampling Unit:- People of Ludhiana who are investing in ULIPs or Mutual fund • Sample Size:- 100.

38. Percentage of people who have invested in ULIPS, in Mutual fund and both

39. Annual income of the investors

40. Factors consider by investors before investing in ULIPS and Mutual fund

41. Information Sources helpful to the investor in making investment decision

42. Preference of investor regarding different types of funds

43. The reasons for investing in ULIPS 49 31 11 7 2 53 34 8 3 2 38 34 14 9 5 22 23 13 29 13

44. The reason for investing in Mutual Fund 24 26 8 21 16 48 39 5 6 2 32 28 7 24 9

45. Preference of ULIPS or mutual fund on the basis of following factors

46. Investment in ULIPS and Mutual fund by risk profile

47. Expected annual Return from both ULIPS and Mutual fund

48. Preferred tenure of investment for ULIPS and Mutual Fund

49. Awareness among peoples regarding the controversy of ULIPS

50. Preferred investment option for investing their money in future