A Project Report on Mf Pavan

ACKNOWLEDGEMENT

I would take this opportunity to thank all the people for having helped me with this

project right from its inception. The writing of this project has been one of the significant

academic challenges I have faced and without the support, patience, and guidance of the people

involved, this task would not have been completed. It is to them I owe my deepest gratitude.

It gives me immense pleasure in presenting this project report on "COMPARATIVE

ANALYSIS OF MUTUAL FUNDS". It has been my privilege to have a team of project guide

who have assisted me from the commencement of this project. The success of this project is a

result of sheer hard work, and determination put in by me with the help of my project guide. I

hereby take this opportunity to add a special note of thanks for Mr. V.KIRAN KUMAR, who

motivated me till the completion of the project.

I would also like to thank IIPM Management for having given me this opportunity to

indulge in this project. I would like to thank everyone who was directly or indirectly involved in

this project.

SOMA PAVAN KUMAR

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UNDERTAKING

I hereby profess that this internship report entitled "A Comparative Analysis Of

Mutual Funds" composed for partial fulfillment of the requirement for the degree of Master of

Business Administration, is my original work and has not been presented for the award of any

other Degree/Diploma or any other similarities of any other University/Institution.

SOMA PAVAN KUMAR

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INDEX

SR.NO. TOPICS PAGE NO

1. EXECUTIVE SUMMARY 4

2. INDUSTRY PROFILE 6

3. INTRODUCTION TO THE TOPIC 9

4. THEORETICAL OVERVIEW 12

5. AIM OF THE PROJECT 27

6. HYPOTHESIS 28

7. ANALYSIS 30

8. CONCLUSION 41

9. RECOMMENDATIONS 42

10. BIBLOGRAPHY 43

11. ANNEXURES 44

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EXECUTIVE SUMMARY

In few years Mutual Fund has emerged as a tool for ensuring one’s financial well being.

Mutual Funds have not only contributed to the India growth story but have also helped families

tap into the success of Indian Industry. As information and awareness is rising more and more

people are enjoying the benefits of investing in mutual funds. The main reason the number of

retail mutual fund investors remains small is that nine in ten people with incomes in India do not

know that mutual funds exist. But once people are aware of mutual fund investment

opportunities, the number who decide to invest in mutual funds increases to as many as one in

five people. The trick for converting a person with no knowledge of mutual funds to a new

Mutual Fund customer is to understand which of the potential investors are more likely to buy

mutual funds and to use the right arguments in the sales process that customers will accept as

important and relevant to their decision.

The analysis and suggestions presented in this Project Report is based on market research

on the saving and investment practices of the investors and preferences of the investors for

investment in Mutual Funds. This Report will help to know about the investors’ Preferences in

Mutual Fund such as,

Their preference of any particular Asset Management Company (AMC)

Which type of Product they prefer

Which Option (Growth or Dividend) they prefer

Which Investment Strategy they follow (Systematic Investment Plan or One time Plan).

This Project as a whole can be divided into two parts.

The first part gives an insight about Mutual Fund and its various aspects, the Company

Profile, Objectives of the study, Research Methodology. One can have a brief knowledge about

Mutual Fund and its basics through the Project.

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The second part of the Project consists of data and its analysis collected through survey

done on sample size. For the collection of Primary data, questionnaire is prepared and surveyed

on sample size. The maximum knowledge is gained from CD Equisearch pvt. Ltd. and also from

the AMC (HDFC or ICICI Prudential) in Hyderabad. The study is also done about the products

and strategies of other AMCs in Hyderabad to know why people prefer to invest in those AMCs.

This Project covers the topic “THE COMPARATIVE ANALYSIS OF MUTUAL FUNDS.”

The data collected has been well organized and presented.

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COMPANY PROFILE

CD EQUISEARCH PVT LTD

ABOUT CD EQUISEARCH

CD Equisearch is one of the leading brokerage houses with a strong presence in the

institution and HNI broking segment

With over 30 years of experience, one could be sure of the best in class research, operations,

backend support and above all, a name which inspires trust. At CD Equisearch, the emphasis

is on transparent and clean dealings. This has earned it the goodwill. This quality has stood

the test of time and has helped it secure business from all quarters.

At CD Equisearch, business is conducted by building long term relationships with the clients

and associates by laying emphasis on ethical and clean dealings. Here, people practice the

gentle art of finance with professionalism, skill and transparency.

Continued growth which is so essential in today’s fast paced and ever changing capital

market has been a constant feature at CD Equisearch. With an eye on the future and in

keeping with the changing times, CD Equisearch has earned the investor's goodwill over the

years.

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After having a track record of servicing Institutions and HNIs for over 3 decades, CD is

planning to foray into the growing retail segment in a big way. It has a plan to expand across

the geography with a wide network of its regional offices, branches, franchisees and sub-

brokers. It would be offering a complete basket in financial services. It is aiming to be one

amongst the top ten broking houses in India by 2014.

MISSION & VISION

CD Equisearch is passionate about providing friendly customer services on the greens of the

investing world. Following the highest standards of ethics is entrenched in the DNA of CD

Equisearch.

At CD Equisearch, the selection and recommendations of wealth creating opportunities are

primarily based on the 3C principle:

1. Conservation of capital

2. Consistent growth in value of investment over a period of time

3. Continual cash inflow through handsome dividends

GUIDING PRINCIPLESCD Equisearch believes that being on par in terms of price and quality only satisfies the

customer. It is the customized service, which delights. The core values, which drive CD

Equisearch to exceed customer service expectations, are:

TRUST

TRANSPARENCY

THOUGHT LEADERSHIP

CD believes that abiding by these values for over more than the past three decades has helped

it earn the goodwill that it enjoys today.

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CD GROUP

CD Equisearch Pvt Ltd

Capital Market Services

Institutional Equity Services

Retail Financial Products

Private & Premier Client Group Services

Financial Planning Group Services

CD Commosearch Pvt Ltd

Commodity Broking Services

MCX and NCDEX Exchanges

CD Equifinance Pvt Ltd

Providing Loans Against Shares (LAS)

IPO / FPO Financing

CD Equiholding Pvt Ltd

Distribution of Third Party Products

SERVICES PROVIDED

Private Wealth Management

Institutional Equities

Private & Premier Client Group

Retail Client Group

Financial Planning Group

NRI Services

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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 invested by the fund manager in different

types of securities depending upon the objective of the scheme.

These could range from shares to debentures to money market instruments. The income earned

through these investments and the capital appreciation realized by the scheme are shared by its

unit holders in proportion to the number of units owned by them (pro rata).

Thus a Mutual Fund is the most suitable investment for the common man as it offers an

opportunity to invest in a diversified, professionally managed portfolio at a relatively low cost.

Anybody with an investible surplus of as little as a few thousand rupees can invest in Mutual

Funds.

Each Mutual Fund scheme has a defined investment objective and strategy mutual fund is

the ideal investment vehicle for today’s complex and modern financial scenario. Markets for

equity shares, bonds and other fixed income instruments, real estate, derivatives and other assets

have become mature and information driven. Price changes in these assets are driven by global

events occurring in faraway places.

A typical individual is unlikely to have the knowledge, skills, inclination and time to keep

track of events, understand their implications and act speedily. An individual also finds it

difficult to keep track of ownership of his assets, investments, brokerage dues and bank

transactions etc.

Draft offer document is to be prepared at the time of launching the fund. Typically, it pre

specifies the investment objectives of the fund, the risk associated, the costs involved in the

process and the broad rules for entry into and exit from the fund and other areas of operation. In

India, as in most countries, these sponsors need approval from a regulator, SEBI (Securities

exchange Board of India) in our case. SEBI looks at track records of the sponsor and its financial

strength in granting approval to the fund for commencing operations.

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A sponsor then hires an asset management company to invest the funds according to the

investment objective. It also hires another entity to be the custodian of the assets of the fund and

perhaps a third one to handle registry work for the unit holders (subscribers) of the fund.

In the Indian context, the sponsors promote the Asset Management Company also, in

which it holds a majority stake. In many cases a sponsor can hold a 100% stake in the Asset

Management Company (AMC). E.g. Birla Global Finance is the sponsor of the Birla Sun Life

Asset Management Company Ltd., which has floated different mutual funds schemes and also

acts as an asset manager for the funds collected under the schemes.

Development of the Global Mutual Funds Industry

Structural changes in the global economic environment have, over the year, led to the

emerged of a strong market economy and facilitated the growth of the mutual fund industry,

particularly since the 1980s’. A market economy depends more on growth led by the stock

market than by bank finance. Since the mutual fund industry is a strong pillar of the stock market

system, it got a boost with the emergence of a strong market economy. Mutual funds found

increasing acceptance also because they have the capacity to absorb the instability and

uncertainties that characterize the stock market system. The rise in inflation, reduction in real

interest and growing complexities in the market provide tremendous opportunities to mutual

funds. For these reasons, mutual fund industry began to thrive well particularly during the 1990s’

in not only the developed countries, but the newly industrialized and developing countries as

well.

The immediate boos to mutual fund, however, was provided by the prolonged economic

boom in the US, which fuelled dynamic growth in the stock market, and consequently in the

mutual fund industry. In India too, the growth of the stock market in the early 1990s, gave rise to

unprecedented growth in the mutual fund industry.

Growth was unprecedented in the 1990s, with the total increasing from US$4156451 million in

1993 to US$7651618 million in 1998. While the assets of the U.S. and non-U.S. mutual funds

were 49.8% and 51.2%, respectively, in 1993 they amounted to 63.9% and 36.1% respectively.

During the same period, the assets of open ended mutual funds worldwide grew by 17% p.a. The

growth of asset of non US mutual funds, however was much lower.

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In terms of the open ended mutual fund investment companies worldwide, with an

unprecedented rise from 24474 in 1993 to 35424 in 1996. However the number decline

marginally to 31570 in 1998.

The rising trend continued in the US though, with the number increasing from 4537 in 1993 to

6254 in 1996 and to 7248 in 1998. commensurately, the share of US increased from 18.5% to

77%.

The top five countries in terms of the open ended mutual funds in 1998 US, France, Japan,

Spain, and UK.

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THEORETICAL BACKGROUND

ORIGIN OF MUTUAL FUND INVESTING:- When three Boston Securities executives pooled their money together in 1924 to create

the first mutual fund, they have no idea how popular mutual funds would become. The idea of

pooling money for investing purposes started in Europe in mid 1800s. The first pooled in the US

was created in 1893 for the faculty and staff of Harvard University. On March 21st, 1924 the

first official mutual fund was born. It was called the Massachusetts Investors Trust. After one

year the Massachusetts Investor Trust grew from $ 50000 in assets to 3, 92,000 in assets (with

around 200 share holders). In contrast there are more than 10000 mutual funds in US today

totaling around $7 trillion (with approximately 83 million individual investors) according to the

Investment Company Institute.

Concept of 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. The income earned through these investments

and the capital appreciation realized are shared by its unit holders in proportion to the number of

units owned by them. Thus a Mutual Fund is the most suitable investment for the common man

as it offers an opportunity to invest in a diversified, professionally managed basket of securities

at a relatively low cost. The flow chart below describes broadly the working of a mutual fund:

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Organization of Mutual Funds in India:- There are many entities involved and the diagram below illustrates the organizational set

up of a mutual fund:

Organization of a Mutual Fund

A Mutual Fund is set up in the form of trust, which has sponsor, trustees, asset management

company (AMC), and custodian. The trust is established by sponsor or more than one sponsor

who is like a promoter of company. The trustee of mutual fund holds its property for the benefit

of unit holders. Asset Management Company (AMC) approved by SEBI manages the funds by

making investments in various types of securities. Custodian, who registered with SEBI, holds

the securities of the fund in its custody. The trustees are vested with the general power of

superintendence and direction over AMC. They monitor the performance and compliance of

SEBI regulations by mutual fund.

SEBI regulations required that at least two thirds of the directors of trustee company or board of

trustees must be independent i.e. they should not be associated with sponsors. Also, 50% of the

directors of the AMC must be independent. All mutual funds are required to be registered with

SEBI before they launch their schemes.

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Mutual Funds Industry in India:- The origin of mutual fund industry in India is with the introduction of the concept of

mutual fund by UTI in the year 1963. Though the growth was slow, but it accelerated from the

year 1987 when non-UTI players entered the industry.

In the past decade, Indian mutual fund industry had seen dramatic improvements, both

quality wise as well as quantity wise. Before, the monopoly of the market had seen an ending

phase; the Assets Under Management (AUM) was Rs. 67bn. The private sector entry to the fund

family raised the AUM to Rs. 470 bn in March 1993 and till April 2004; it reached the height of

1,540 bn.

Putting the AUM of the Indian Mutual Funds Industry into comparison, the total of it is

less than the deposits of SBI alone, constitute less than 11% of the total deposits held by the

Indian banking industry.

The main reason of its poor growth is that the mutual fund industry in India is new in the

country. Large sections of Indian investors are yet to be intellectuated with the concept. Hence, it

is the prime responsibility of all mutual fund companies, to market the product correctly abreast

of selling.

The mutual fund industry can be broadly put into four phases according to the

development of the sector. Each phase is briefly described as under.

Types of Mutual FundsMutual fund schemes may be classified on the basis of its structure and its investment objective.

By Structure:

Open-ended Funds

An open-end fund is one that is available for subscription all through the year. These do not have

a fixed maturity. Investors can conveniently buy and sell units at Net Asset Value ("NAV")

related prices. The key feature of open-end schemes is liquidity.

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Closed-ended Funds

A closed-end fund has a stipulated maturity period which generally ranging from 3 to 15 years.

The fund is open for subscription only during a specified period. Investors can invest in the

scheme at the time of the initial public issue and thereafter they can buy or sell the units of the

scheme on the stock exchanges where they are listed. In order to provide an exit route to the

investors, some close-ended funds give an option of selling back the units to the Mutual Fund

through periodic repurchase at NAV related prices. SEBI Regulations stipulate that at least one

of the two exit routes is provided to the investor.

Interval Funds

Interval funds combine the features of open-ended and close-ended schemes. They are open for

sale or redemption during pre-determined intervals at NAV related prices.

By Investment Objective:Growth Funds:

The aim of growth funds is to provide capital appreciation over the medium to long- term. Such

schemes normally invest a majority of their corpus in equities. It has been proven that returns

from stocks, have outperformed most other kind of investments held over the long term. Growth

schemes are ideal for investors having a long-term outlook seeking growth over a period of time.

Income Funds:

The aim of income funds is to provide regular and steady income to investors. Such schemes

generally invest in fixed income securities such as bonds, corporate debentures and Government

securities. Income Funds are ideal for capital stability and regular income.

Balanced Funds:

The aim of balanced funds is to provide both growth and regular income. Such schemes

periodically distribute a part of their earning and invest both in equities and fixed income

securities in the proportion indicated in their offer documents. In a rising stock market, the NAV

of these schemes may not normally keep pace, or fall equally when the market falls. These are

ideal for investors looking for a combination of income and moderate growth.

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Money Market Funds

The aim of money market funds is to provide easy liquidity, preservation of Capital and

moderate income. These schemes generally invest in safer short-term instruments such as

treasury bills, certificates of deposit, commercial paper and interbank call money. Returns on

these schemes may fluctuate depending upon the interest rates prevailing in the market. These

are ideal for Corporate and individual investors as a means to park their surplus funds for short

periods.

Load Funds:

A Load Fund is one that charges a commission for entry or exit. That is, each time you buy or

sell units in the fund, a commission will be payable. Typically entry and exit loads range from

1% to 2%. It could be worth paying the load, if the fund has a good performance history.

No-Load Funds:

A No-Load Fund is one that does not charge a commission for entry or exit. That is, no

commission is payable on purchase or sale of units in the fund. The advantage of a no load fund

is that the entire corpus is put to work.

Other Schemes:

Tax Saving Schemes:

These schemes offer tax rebates to the investors under specific provisions of the Indian Income

Tax laws as the Government offers tax incentives for investment in specified avenues

Investments made in Equity Linked Savings Schemes (ELSS) and Pension Schemes are allowed

as deduction u/s 88 of the Income Tax Act, 1961. The Act also provides opportunities to

investors to save capital gains u/s 54EA and 54EB by investing in Mutual Funds, provided the

capital asset has been sold prior to April 1, 2000 and the amount is invested before September

30, 2000.

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Special Schemes:

Industry Specific Schemes:

Industry Specific Schemes invest only in the industries specified in the offer document.The

investment of these funds is limited specific industries like InfoTech, FMCG, Pharmaceuticals

etc.

Index Schemes:

Index Funds attempt to replicate the performance of a particular index such as the BSE Sensex or

the NSE 50.

Sectoral Schemes:

Sectoral Funds are those, which invest exclusively in a specified industry or a group of industries

or various segments such as 'A' Group shares or initial public offerings.

Advantages of Mutual Funds:The advantages of investing in a Mutual Fund are:

Diversification: The best mutual funds design their portfolios so individual investments

will react differently to the same economic conditions. For example, economic conditions

like a rise in interest rates may cause certain securities in a diversified portfolio to decrease in

value. Other securities in the portfolio will respond to the same economic conditions by

increasing in value. When a portfolio is balanced in this way, the value of the overall

portfolio should gradually increase over time, even if some securities lose value.

Professional Management: Most mutual funds pay topflight professionals to manage

their investments. These managers decide what securities the fund will buy and sell.

Regulatory oversight: Mutual funds are subject to many government regulations that

protect investors from fraud.

Liquidity: It's easy to get your money out of a mutual fund. Write a check, make a call,

and you've got the cash.

Convenience: You can usually buy mutual fund shares by mail, phone, or over the

Internet.

Low cost: Mutual fund expenses are often no more than 1.5 percent of your investment.

Expenses for Index Funds are less than that, because index funds are not actively managed.

Instead, they automatically buy stock in companies that are listed on a specific index

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Phases of mutual funds

First Phase - 1964-87:- Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up

by the Reserve Bank of India and functioned under the Regulatory and administrative control of

the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial

Development Bank of India (IDBI) took over the regulatory and administrative control in place

of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had

Rs.6,700 crores of assets under management.

Second Phase - 1987-1993 (Entry of Public Sector Funds)

Entry of non-UTI mutual funds. SBI Mutual Fund was the first followed by Canbank

Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund

(Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC in 1989 and GIC

in 1990. The end of 1993 marked Rs.47,004 as assets under management.

Third Phase - 1993-2003 (Entry of Private Sector Funds) With the entry of private sector funds in 1993, a new era started in the Indian mutual

fund industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the

year in which the first Mutual Fund Regulations came into being, under which all mutual funds,

except UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged with

Franklin Templeton) was the first private sector mutual fund registered in July 1993.

The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive

and revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI

(Mutual Fund) Regulations 1996. The number of mutual fund houses went on increasing, with

many foreign mutual funds setting up funds in India and also the industry has witnessed several

mergers and acquisitions. As at the end of January 2003, there were 33 mutual funds with total

assets of Rs. 1, 21,805 crores. The Unit Trust of India with Rs.44, 541 crores of assets under

management was way ahead of other mutual funds.

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Fourth Phase - since February 2003 This phase had bitter experience for UTI. It was bifurcated into two separate entities.

One is the Specified Undertaking of the Unit Trust of India with AUM of Rs.29,835 crores (as

on January 2003). The Specified Undertaking of Unit Trust of India, functioning under an

administrator and under the rules framed by Government of India and does not come under the

purview of the Mutual Fund Regulations. The second is the UTI Mutual Fund Ltd, sponsored by

SBI, PNB, BOB and LIC. It is registered with SEBI and functions under the Mutual Fund

Regulations. With the bifurcation of the erstwhile UTI which had in March 2000 more than

Rs.76,000 crores of AUM and with the setting up of a UTI Mutual Fund, conforming to the SEBI

Mutual Fund Regulations, and with recent mergers taking place among different private sector

funds, the mutual fund industry has entered its current phase of consolidation and growth.

Performance of Mutual Funds in India:-

Let us start the discussion of the performance of mutual funds in India from the day the concept

of mutual fund took birth in India. The year was 1963. Unit Trust of India invited investors or

rather to those who believed in savings, to park their money in UTI Mutual Fund.

For 30 years there was not a single second player. Though the 1988 year saw some new mutual

fund companies, but UTI remained in a monopoly position.

The performance of mutual funds in India in the initial phase was not even closer to satisfactory

level. People rarely understood, and of course investing was out of question. But yes, some 24

million shareholders were accustomed with guaranteed high returns by the beginning of

liberalization of the industry in 1992. This good record of UTI became marketing tool for new

entrants. The expectations of investors touched the sky in profitability factor. However, people

were miles away from the preparedness of risks factor after the liberalization.

The Assets Under Management of UTI was Rs. 67bn. by the end of 1987. Let me concentrate

about the performance of mutual funds in India through figures. From Rs. 67bn. the Assets

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Under Management rose to Rs. 470 bn. in March 1993 and the figure had a three times higher

performance by April 2004. It rose as high as Rs. 1,540bn.

The net asset value (NAV) of mutual funds in India declined when stock prices started falling in

the year 1992. Those days, the market regulations did not allow portfolio shifts into alternative

investments. There was rather no choice apart from holding the cash or to further continue

investing in shares. One more thing to be noted, since only closed-end funds were floated in the

market, the investors disinvested by selling at a loss in the secondary market.

The performance of mutual funds in India suffered qualitatively. The 1992 stock market scandal,

the losses by disinvestments and of course the lack of transparent rules in the whereabouts

rocked confidence among the investors. Partly owing to a relatively weak stock market

performance, mutual funds have not yet recovered, with funds trading at an average discount of

1020 percent of their net asset value.

The supervisory authority adopted a set of measures to create a transparent and competitive

environment in mutual funds. Some of them were like relaxing investment restrictions into the

market, introduction of open-ended funds, and paving the gateway for mutual funds to launch

pension schemes.

The measure was taken to make mutual funds the key instrument for long-term saving. The more

the variety offered, the quantitative will be investors.

At last to mention, as long as mutual fund companies are performing with lower risks and higher

profitability within a short span of time, more and more people will be inclined to invest until

and unless they are fully educated with the dos and don’ts of mutual funds.

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LIMITATION OF MUTUAL FUND INVESTMENT

1. No Control Over Cost:

An Investor in mutual fund has no control over the overall costs of investing. He pays an

investment management fee (which is a percentage of his investments) as long as he remains

invested in fund, whether the fund value is rising or declining. He also has to pay fund

distribution costs, which he would not incur in direct investing. However this only means that

there is a cost to obtain the benefits of mutual fund services. This cost is often less than the cost

of direct investing.

2. No Tailor-Made Portfolios:

Investing through mutual funds means delegation of the decision of portfolio composition

to the fund managers. The very high net worth individuals or large corporate investors may find

this to be a constraint in achieving their objectives. However, most mutual funds help investors

overcome this constraint by offering large no. of schemes within the same fund.

3. Managing A Portfolio Of Funds:

Availability of large no. of funds can actually mean too much choice for the investors. He

may again need advice on how to select a fund to achieve his objectives. AMFI has taken

initiative in this regard by starting a training and certification program for prospective Mutual

Fund Advisors. SEBI has made this certification compulsory for every mutual fund advisor

interested in selling mutual fund.

a. Taxes: During a typical year, most actively managed mutual funds sell anywhere from

20 to 70 percent of the securities in their portfolios. If your fund makes a profit on its sales, you

will pay taxes on the income you receive, even if you reinvest the money you made

b. Cost of Churn: The portfolio of fund does not remain constant. The extent to which

the portfolio changes is a function of the style of the individual fund manager i.e. whether

he is a buy and hold type of manager or one who aggressively churns the fund. It is also

dependent on the volatility of the fund size i.e. whether the fund constantly receives fresh

subscriptions and redemptions. Such portfolio changes have associated costs of

brokerage, custody fees etc. that lowers the portfolio return commensurately.

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MUTUAL FUND BEST PRCTICES THE PRACTICE OF “RESTFUL”Risk- Reward Relationship:

A clear and direct relationship of risk with reward has to be developed and the concept instilled

in the mind of the investor, and this is the basis of all classification of Mutual Fund.

Ease of Business:

The business of Mutual Fund is not an easy one. It is easy only for the ones who have either been

in the business for a long time, or for the people, institutions which have been in the investment

space for a long time and are willing to experiment and learn from their mistake, and can be

flexible.

Service:

The service provision ought to be flawless, for after all, Mutual Fund is a service, and the only

way the number of customers can be increased and the existing ones retained is by providing a

higher level of service, thereby increasing customer satisfaction.

Trust / Transparency:

A high level of transparency has to be built into the system of processes and investments in

Mutual Fund. This is of vital importance as the terms “Transparency” and “Trust”, in the case of

Mutual Funds is synonyms. Trust in the firm would come only with transparency. And with

Trust would come more business.

Fairness to Investors:

This, of course, is an offshoot of the previous point that we made. No business can survive unless

it is fair to the customer. However, what is important here is that it has to be made evidently

clear that the firm is actually being fair to its customers. Modesty doesn’t help, and this has to be

told to your customers so that they actually notice.

Utility:

The objective of the investment have to be always kept in mind while marketing Mutual Fund,

for if there is a deviation, its utility is lost, or the customers remain unsatisfied.

Liquidity:

This has again and again highlighted, for it the basic premise that most investors invest in Mutual

Fund only because of the high level of liquidity. There has to be a good market development for

your issue, so that there is a ready market available for them.

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MAJOR MUTUAL FUND COMPANIES IN INDIAABN AMRO MUTUAL FUND

ABN AMRO Mutual Fund was setup on April 15, 2004 with ABN AMRO Trustee (India) Pvt.

Ltd. as the Trustee Company. The AMC, ABN AMRO Asset Management (India) Ltd. was

incorporated on November 4, 2003. Deutsche Bank A G is the custodian of ABN AMRO Mutual

Fund.

BIRLA SUN LIFE MUTUAL FUND

Birla Sun Life Mutual Fund is the joint venture of Aditya Birla Group and Sun Life Financial.

Sun Life Financial is a global organization evolved in 1871 and is being represented in Canada,

the US, the Philippines, Japan, Indonesia and Bermuda apart from India. Birla Sun life Mutual

Fund follows a conservative long-term approach to investment. Recently it crossed a AUM of

Rs.10,000 crores.

BANK OF BARODA MUTUAL FUND

Bank of Baroda Mutual Fund or BOB Mutual Fund was setup on October 30,1992 under the

sponsorship of Bank of Baroda. BOB Assets Management Company Limited is the AUM of

BOB Mutual Fund and was incorporated on November 5, 1992. Deutsche Bank AG is the

custodian.

HDFC MUTUAL FUND

HDFC Mutual Fund was setup on June 30, 2000 with two sponsors namely Housing

Development Finance Corporation Limited and Standard Life Investments Limited.

ING VYSYA MUTUAL FUND

ING Vysya Mutual Fund was setup on February 11, 1999 with the same named Trustee

Company. It is a joint venture of Vysya and ING. The AMC, ING Investment Management

(India) Pvt. Ltd. was incorporated on April 6, 1998.

PRUDENTIAL ICICI MUTUAL FUND

The mutual fund of ICICI is a joint venture with Prudential Plc. Of America, one of the largest

life insurance companies in the US of A. Prudential ICICI Mutual Fund was setup on 13

October, 1993 with two sponsors, Prudential Plc. and the AMC is Prudential ICICI Asset

Management Company Limited incorporated on 22 June, 1993.

Page 23

SAHARA MUTUAL FUND

Sahara Mutual Fund was setup on July 18, 1996 with Sahara India financial Corporation Ltd. as

the sponsor. Sahara Assets Management Company Private Limited incorporated on August 31,

1995 works as the AMC of Sahara Mutual Fund. The paid up capital of the AMC stands at

Rs.25.8 crore.

STATE BANK OF INDIA MUTUAL FUND

State Bank of India Mutual Fund is the first Bank sponsored Mutual Fund to launch offshore

fund, the India Magnum Fund with a corpus of Rs.225 crore approximately. Today it is the

largest Bank sponsored Mutual Fund in India. They already launched 35 schemes out of which

15 have already yield handsome returns to investors. State Bank of India Mutual Fund has more

than Rs.5,500 crores as AUM. Now it has an investor base of over 8 lakhs spread over 18

schemes.

TATA MUTUAL FUND

TATA Mutual Fund is a Trust under the Indian Trust Act, 1882. the sponsors for Tata Mutual

Fund are Tata Sons Ltd., and Tata Investment Corporation Ltd. The investment manager is Tata

management Limited is one of the fastest in the country with more than Rs.7,703 Crore(as on

2005) of AUM.

KOTAK MAHINDRA ASSTE MANAGEMENT COMPANY

Kotak Mahindra Asset Management Company is a subsidiary of KMBL. It is presently having

more than 1, 99,818 investors in its various schemes. KMAMC stared its operations in December

1998. Kotak Mahindra Mutual Fund offers schemes catering to investors with varying risk return

profiles. It was the first company to launch to dedicated gilt scheme investing only in

government securities.

UNIT TRUST OF INDIA MUTUAL FUND

UTI Asset Management Company Private Limited, established in Jan 24, 2003 manages the UTI

Mutual Fund with the support of UTI Trustee Company Private Limited. UTI Asset Management

Company presently manages a corpus of over Rs.20,000 crore. The sponsors of UTI Mutual

Fund are Bank of Baroda, Punjab National Bank,

State Bank of India, and Life Insurance Corporation of India. The schemes of UTI

Mutual Fund is Liquid Funds, assets Management Funds, Index Funds and Balanced

Funds.

Page 24

RELIANCE MUTUAL FUND

Reliance Mutual Fund was established as trust under Indian Trusts Act, 1882.The sponsor of

RMF is Reliance Capital Limited and Reliance Capital Trustee Co. Limited is the Trustee. It was

registered on June 30, 1995 as Reliance Mutual Fund which was changed on March 11, 2004.

Reliance Mutual Fund was formed for launching of various schemes under which, units are

issued to the public with a view to contribute to the capital market and to provide investors the

opportunities to make investments in diversified securities.

STANDARD CHARTERED MUTUAL FUND

Standard Chartered Mutual Fund was setup on March 13, 2000 sponsored by Standard Chartered

Bank. The Trustee is Standard Chartered Trustee Company Pvt. Ltd. Standard Chartered Asset

Management Company Pvt. Ltd is the AMC which was incorporated with SEBI on December

20, 1999.

FRANKLIN TEMPLETON MUTUAL FUND

The group, Franklin Templeton investment is a California based company with a global AUM of

US $409.2(as on 2005). It is one of the largest financial service group in the world. Investors can

buy or sell the Mutual Fund through their financial advisor or through mail or through their

website. They have open end Diversified Equity schemes, Open end Sector Equity schemes,

Open end Hybrid schemes, Open end tax saving schemes, Open end income and liquid schemes,

Closed end Income schemes and Open end Fund of Funds schemes to offer.

MORGAN STANLEY MUTUAL FUND

Morgan Stanley is a world wide financial services company and its leading in the market in

securities, investment management and credit services. Morgan Stanley investment management

was established in the year 1975. it provides customized asset management services and products

to governments, corporations, pension funds and nonprofit organizations. Its services are also

extending to high net worth individuals and retail investors. In India it is known as Morgan

Stanley investment management Private Ltd. and its AMC is Morgan Stanley Mutual Fund. This

is the first closed end diversified equity scheme serving the needs of Indian retail investors

focusing on the long term capital appreciation.

Page 25

ESCORT MUTUAL FUNDS

Escort Mutual Funds was set up on April 15th, 1996 with Escorts Finance Ltd. as its sponsor.

The Trustee Company is Escorts Investments Trust Ltd.. its AMC was incorporated on Dec1st,

95 with the name Escorts Asset Management Ltd.

ALLAINCE CAPITAL MUTUAL FUND

Allaince Capital Mutual Fund was set up on December 30, 1994 with Alliance Capital

Management Corp. of Delaware (USA) as sponsor. The Trustee is ACAM Trust Company Pvt.

Ltd. and AMC, the Alliance Capital Asset Management India Pvt. Ltd. with the corporate office

in Mumbai.

BENCHMARK MUTUAL FUND

Benchmark Mutual Fund was setup on June 12, 2001 with Niche Financial Services Pvt. Ltd. as

the sponsor and Benchmark Trustee Company Pvt. Ltd. as the trustee Company. incorporated on

October 16, 2000 and headquartered in Mumbai, Benchmark Assets Management Company Pvt.

Ltd. is the AMC.

CAN BANK MUTUAL FUND

Can Bank Mutual Fund was setup on December 19, 1987 with Canara Bank acting as the

sponsor. Canara bank investment Management Service Ltd. incorporated on March 2, 1993 is the

AMC. The Corporate Office of the AMC is in Mumbai.

CHOLA MUTUAL FUND

Chola Mutual Fund under the sponsorship of Cholamandalam Investment & Finance Company

Ltd. was setup on January 3, 1997. Cholamandalam Trustee Co. Ltd. Is the Trustee Company

and AMC is Cholamandalam AMC Limited.

LIC MUTUAL FUND

Life Insurance Corporation setup LIC Mutual Fund on 19th June 1989 in India. It contributed

Rs.2 crore towards the corpus of the Fund. LIC Mutual Fund was constituted as a trust in

accordance with the provisions of the Indian trust Act, 1882. The Company started its business

on 29th April 1994. The Trustees of LIC Mutual Fund have appointed Jeevan Bima Sahayog

Asset Management Company Ltd. as the Investment Managers for mutual fund.

Page 26

AIM OF THE PROJECT

To evaluate investment performance of selected mutual funds in terms of risk and

return.

Also to analyze the performance of mutual fund schemes on the basis of various

parameters.

Primarily to understand the basic concepts of Mutual fund and its benefits as

an investment avenue.

Secondly, to compare and evaluate the performance of different schemes of mutual

fund companies on the basis of risk, return and volatility.

Page 27

HYPOTHESIS

WHY SHOULD INVESTORS INVEST IN MUTUAL FUND?An investor avails of the service of experienced and skilled professionals who are backed by a

dedicated of companies and selects suitable investments to achieve the objectives of the schemes.

Mutual funds invest in a number of companies across a broad cross- section of industries and

sectors. This diversification reduces the risk because seldom do all the stocks decline at the same

time and in the same proportion. The investors achieve this diversification through a mutual fund

with far less money than you can do on our own. Investing in a mutual fund reduces paperwork

and helps an investor avoid many problems such as bad deliveries, delayed payments and

unnecessary follow.

Net Asset Value (NAV)

The net asset value of the fund is the cumulative market value of the assets fund net of its

liabilities. In other words, if the fund is dissolved or liquidated, by selling off all the assets in the

fund, this is the amount that the shareholders would collectively own. This gives rise to the

concept of net asset value per unit, which is the value, represented by the ownership of one unit

in the fund. It is calculated simply by dividing the net asset value of the fund by the number of

units. However, most people refer loosely to the NAV per unit as NAV, ignoring the "per unit".

We also abide by the same convention.

Calculation of NAV

The most important part of the calculation is the valuation of the assets owned by the fund. Once

it is calculated, the NAV is simply the net value of assets divided by the number of units

outstanding. The detailed methodology for the calculation of the asset value is given below.

Asset value is equal to Sum of market value of shares/debentures

+ Liquid assets/cash held, if any

+ Dividends/interest accrued

Amount due on unpaid assets

Expenses accrued but not paid

Page 28

COMPARATIVE STUDY OF MUTUAL FUNDS ON THE BASES OF

ALPHA, BETA AND STANDARD DEVIATION

ALPHA:-

Measures how much if any of the extra risk helped the fund outperform its corresponding

benchmark. Using beta, alpha's computation compares the fund's performance to that of the

benchmark's risk-adjusted returns and establishes if the fund's returns outperformed the market's,

given the same amount of risk. For example, if a fund has an alpha of 1, it means that the fund

outperformed the benchmark by 1%. Negative alphas are bad in that they indicate that the fund

under performed for the amount of extra, fund-specific risk that the fund's investors undertook.

BETA :-

Beta is useful statistical measure, which determines the volatility, or risk, of a fund in

comparison to that of its index or benchmark. A fund with a beta very close to 1 means the fund's

performance closely matches the index or benchmark. A beta greater than 1 indicates greater

volatility than the overall market, and a beta less than 1 indicates less volatility than the

benchmark.

STANDARD DEVIATION :-

The standard deviation essentially reports a fund's volatility, which indicates the tendency of the

returns to rise or fall drastically in a short period of time. A security that is volatile is also

considered higher risk because its performance may change quickly in either direction at any

moment. The standard deviation of a fund measures this risk by measuring the degree to which

the fund fluctuates in relation to its mean return.

Page 29

ANALYSIS

SENSEX RETURNS:

MONTH SENSEX RETURNS

February 0.112

March 0.016

April -0.005

CALCULATION OF RETURNS ON MUTUAL FUND SCHEMES:

BALANCE FUND:

ICICI PRUDENTIAL FUND (GROWTH)

HDFC BALANCED FUND (GROWTH)

UTI BALANCED FUND (GROWTH)

Page 30

ICICI PRUDENTIAL FUND (GROWTH):

NAV Date % change

NAV Date % change NAV Date % change

1-Feb-12 0.00846 1-Mar-12 -0.004099 2-Apr-12 0.0061562-Feb-12 0.00645 2-Mar-12 -0.000412 3-Apr-12 0.0077503-Feb-12 0.00577 5-Mar-12 -0.006383 4-Apr-12 -0.0016196-Feb-12 0.01083 6-Mar-12 -0.002694 9-Apr-12 -0.0083117-Feb-12 -0.0019 7-Mar-12 -0.003117 10-Apr-12 0.0022498-Feb-12 0.00379 9-Mar-12 0.010629 11-Apr-12 -0.0006129-Feb-12 0.00713 12-Mar-12 0.002887 12-Apr-12 0.003061

10-Feb-12 0.00562 13-Mar-12 0.005552 13-Apr-12 -0.01159713-Feb-12 0.00414 14-Mar-12 0.002863 16-Apr-12 0.00349914-Feb-12 0.00247 15-Mar-12 -0.007137 17-Apr-12 0.00697415-Feb-12 0.01193 16-Mar-12 -0.005340 18-Apr-12 0.00835216-Feb-12 0.00203 19-Mar-12 -0.001652 19-Apr-12 -0.00040417-Feb-12 0.00385 20-Mar-12 0.001241 20-Apr-12 -0.00444621-Feb-12 0.00222 21-Mar-12 0.008676 23-Apr-12 -0.00812022-Feb-12 -0.0117 22-Mar-12 -0.013516 24-Apr-12 0.00143323-Feb-12 -0.0045 23-Mar-12 0.006851 25-Apr-12 -0.00224824-Feb-12 -0.0057 26-Mar-12 -0.011546 26-Apr-12 -0.00409727-Feb-12 -0.0138 27-Mar-12 0.00563228-Feb-12 0.01359 28-Mar-12 -0.00663829-Feb-12 0.00619 29-Mar-12 0.001044

30-Mar-12 0.016479

Total Returns 0.056856 Total Returns -0.000678 Total Returns -0.001980Average returns 0.002843

Average returns -0.000032


Page 31

HDFC BALANCED FUND (GROWTH):

Date Percentage Return Date Percentage

Return Date Percentage Return

1-Feb-12 0.001659 1-Mar-12 -0.005794219 2-Apr-12 0.0044484752-Feb-12 0.006830724 2-Mar-12 0.002241534 3-Apr-12 0.0083976363-Feb-12 0.005070433 5-Mar-12 -0.008774043 4-Apr-12 -0.0044594596-Feb-12 0.009237055 6-Mar-12 -0.004998611 9-Apr-12 -0.0096206057-Feb-12 -0.000158409 7-Mar-12 0.000593078 10-Apr-12 0.0012506648-Feb-12 0.007657642 9-Mar-12 0.015097103 11-Apr-12 -0.0030628669-Feb-12 0.004122919 12-Mar-12 0.004946074 12-Apr-12 0.00746614510-Feb-12 0.003932008 13-Mar-12 0.008202885 13-Apr-12 -0.00764932413-Feb-12 0.00426321 14-Mar-12 0.001864533 16-Apr-12 0.01028343814-Feb-12 0.0071097 15-Mar-12 -0.008340947 17-Apr-12 0.00499592215-Feb-12 0.014992889 16-Mar-12 -0.008496409 18-Apr-12 0.00243481816-Feb-12 -0.001941387 19-Mar-12 -0.008431558 19-Apr-12 0.00067469617-Feb-12 0.003281406 20-Mar-12 0.00373102 20-Apr-12 -0.00529278921-Feb-12 0.005563517 21-Mar-12 0.015698479 23-Apr-12 -0.01016742422-Feb-12 -0.021493839 22-Mar-12 -0.015932457 24-Apr-12 0.0022255723-Feb-12 -0.001130853 23-Mar-12 0.007628174 25-Apr-12 -0.00341635124-Feb-12 -0.004013929 26-Mar-12 -0.011467221 26-Apr-12 -0.00231394227-Feb-12 -0.020770542 27-Mar-12 0.0034210328-Feb-12 0.022143272 28-Mar-12 -0.00683603929-Feb-12 0.003751118 29-Mar-12 0.00078415

30-Mar-12 0.017673074

Total Returns 0.050105932 Total Returns 0.002810 Total Returns -0.003805Average returns 0.002505297

Average returns 0.000134


Page 32

UTI BALANCED FUND (GROWTH):



1-Feb-12 0.00725 1-Mar-12 -0.00845 2-Apr-12 0.003742-Feb-12 0.00666 2-Mar-12 0.00142 3-Apr-12 0.006423-Feb-12 0.00820 5-Mar-12 -0.00787 4-Apr-12 -0.002176-Feb-12 0.00787 6-Mar-12 -0.00663 9-Apr-12 -0.011767-Feb-12 -0.00247 7-Mar-12 -0.00092 10-Apr-12 -0.000268-Feb-12 0.00352 9-Mar-12 0.01559 11-Apr-12 -0.004279-Feb-12 0.00572 12-Mar-12 0.00400 12-Apr-12 0.0059710-Feb-12 0.00013 13-Mar-12 0.00809 13-Apr-12 -0.0071013-Feb-12 -0.00078 14-Mar-12 0.00433 16-Apr-12 0.0020814-Feb-12 0.00259 15-Mar-12 -0.00850 17-Apr-12 0.0097315-Feb-12 0.01510 16-Mar-12 -0.00793 18-Apr-12 0.0019316-Feb-12 0.00420 19-Mar-12 -0.00658 19-Apr-12 0.0037217-Feb-12 0.00608 20-Mar-12 0.00325 20-Apr-12 -0.0028121-Feb-12 0.00579 21-Mar-12 0.01178 23-Apr-12 -0.0119222-Feb-12 -0.01927 22-Mar-12 -0.01689 24-Apr-12 0.0033723-Feb-12 -0.00204 23-Mar-12 0.00481 25-Apr-12 -0.0059524-Feb-12 -0.00435 26-Mar-12 -0.01127 26-Apr-12 -0.0024727-Feb-12 -0.01888 27-Mar-12 0.00472 28-Feb-12 0.01387 28-Mar-12 -0.00482 29-Feb-12 0.00787 29-Mar-12 -0.00039

30-Mar-12 0.01743

Total 0.04708 Total -0.00483 Total -0.01174Average Returns 0.0023538

Average Returns -0.000239


Page 33


Month Sensex Return

ICICI X Y X*Y X*X Y*Y

FEBRUARY 0.112 0.002843 0.071 0.002 0.00014 0.005041 0.000004MARCH 0.016 -0.000032 -0.025 -0.001 0.00002 0.000625 0.000001APRIL -0.005 -0.000116 -0.046 -0.001 0.00005 0.002116 0.000001

TOTAL 0.123 0.002694051 0.00021 0.007782 0.000006MEAN 0.041 0.000898017

BETA 0.0267 ALPHA -0.00019787

STANDARD DEVIATION 0.000006

MonthSensex Return HDFC X Y X*Y X*X Y*Y

FEBRUARY 0.112 0.002505 0.071 0.002 0.00012 0.00504 0.000004MARCH 0.016 0.000134 -0.025 -0.001 0.00002 0.00063 0.0000005APRIL -0.005 -0.000224 -0.046 -0.001 0.00005 0.00212 0.000001

TOTAL 0.123 0.002415 0.00018 0.00778 0.000006MEAN 0.041 0.000805

BETA 0.023751 ALPHA -0.00017


Page 34

Month Sensex Return

UTI Balanced

X Y X*Y X*X Y*Y

February 0.112 0.00235 0.071 0.002 0.000133 0.00504 0.0000035March 0.016 -0.00023 -0.025 -0.001 0.000018 0.00063 0.0000005April -0.005 -0.00069 -0.046 -0.001

0.0000540.00212 0.0000014

TOTAL 0.123 0.0014331 0.000205 0.00778 0.000005MEAN 0.041 0.0004777

BETA 0.026296884 ALPHA -0.000600


SCHEMES BETA ALPHA S.D.

PRU ICICI 0.0267 -0.00019 0.000006

HDFC 0.0237 -0.00017 0.000006

UTI 0.0262 -0.00060 0.000005

INTERPRETATION:

BETA:

This indicates that ICICI Schemes in balance fund has given return with par with SENSEX.

After which comes the UTI Balanced Fund.

Alpha:

Alpha of HDFC is the highest, this indicate that with the given risk the fund has given good

return.

Standard Deviation:

Standard Deviation indicates volatility in the performance. From the Balance Fund, it indicates

that HDFC and ICICI have equal volatility in its portfolio. But UTI Fund has less volatility than

the other two funds.

Page 35

EQUITY FUND:ICICI EQUITY FUND (GROWTH)

HDFC EQUITY FUND (GROWTH)

UTI EQUITY FUND (GROWTH)

ICICI EQUITY FUND (GROWTH)



1-Feb-12 0.0099 1-Mar-12 -0.0080 2-Apr-12 0.00302-Feb-12 0.0091 2-Mar-12 0.0020 3-Apr-12 0.00673-Feb-12 0.0076 5-Mar-12 -0.0120 4-Apr-12 -0.00706-Feb-12 0.0072 6-Mar-12 -0.0100 9-Apr-12 -0.01007-Feb-12 -0.0050 7-Mar-12 -0.0030 10-Apr-12 -0.00108-Feb-12 0.0057 9-Mar-12 0.0170 11-Apr-12 -0.00509-Feb-12 0.0094 12-Mar-12 0.0027 12-Apr-12 0.004910-Feb-12 -0.0020 13-Mar-12 0.0118 13-Apr-12 -0.009013-Feb-12 0.0019 14-Mar-12 0.0037 16-Apr-12 -0.004014-Feb-12 0.0019 15-Mar-12 -0.0110 17-Apr-12 0.008215-Feb-12 0.0153 16-Mar-12 -0.0050 18-Apr-12 0.002616-Feb-12 -0.0010 19-Mar-12 -0.0040 19-Apr-12 0.003617-Feb-12 0.0046 20-Mar-12 0.0012 20-Apr-12 -0.003021-Feb-12 0.0083 21-Mar-12 0.0111 23-Apr-12 -0.015022-Feb-12 -0.0180 22-Mar-12 -0.0160 24-Apr-12 -0.000223-Feb-12 -0.0040 23-Mar-12 0.0087 25-Apr-12 -0.003024-Feb-12 -0.0010 26-Mar-12 -0.0160 26-Apr-12 -0.004027-Feb-12 -0.0210 27-Mar-12 0.006628-Feb-12 0.0183 28-Mar-12 -0.006029-Feb-12 0.0107 29-Mar-12 -0.0005

30-Mar-12 0.0196




Page 36

HDFC EQUITY FUND (GROWTH)

Date Percentage Return Date Percentage Return Date Percentage Return1-Feb-12 0.00936 1-Mar-12 -0.00879 2-Apr-12 0.006192-Feb-12 0.01001 2-Mar-12 0.00481 3-Apr-12 0.010603-Feb-12 0.00863 5-Mar-12 -0.01515 4-Apr-12 -0.006586-Feb-12 0.01046 6-Mar-12 -0.01011 9-Apr-12 -0.019877-Feb-12 -0.00724 7-Mar-12 -0.00006 10-Apr-12 0.000328-Feb-12 0.00818 9-Mar-12 0.02108 11-Apr-12 -0.005709-Feb-12 0.00666 12-Mar-12 0.00667 12-Apr-12 0.00957

10-Feb-12 0.00221 13-Mar-12 0.01332 13-Apr-12 -0.0089613-Feb-12 0.00056 14-Mar-12 0.00620 16-Apr-12 0.0083414-Feb-12 0.00603 15-Mar-12 -0.01310 17-Apr-12 0.0124715-Feb-12 0.02244 16-Mar-12 -0.01428 18-Apr-12 0.0015516-Feb-12 -0.00025 19-Mar-12 -0.01276 19-Apr-12 0.0031117-Feb-12 0.00790 20-Mar-12 0.00437 20-Apr-12 -0.0064321-Feb-12 0.00650 21-Mar-12 0.01873 23-Apr-12 -0.0210322-Feb-12 -0.03047 22-Mar-12 -0.02409 24-Apr-12 0.0062223-Feb-12 -0.00326 23-Mar-12 0.00792 25-Apr-12 -0.0038424-Feb-12 -0.00483 26-Mar-12 -0.01796 26-Apr-12 -0.0035527-Feb-12 -0.02548 27-Mar-12 0.0083328-Feb-12 0.02847 28-Mar-12 -0.0094129-Feb-12 0.00798 29-Mar-12 -0.00034

30-Mar-12 0.02565




Page 37

UTI EQUITY FUND (GROWTH)



1-Feb-12 0.00725 1-Mar-12 -0.00845 2-Apr-12 0.003742-Feb-12 0.00666 2-Mar-12 0.00142 3-Apr-12 0.006423-Feb-12 0.00820 5-Mar-12 -0.00787 4-Apr-12 -0.002176-Feb-12 0.00787 6-Mar-12 -0.00663 9-Apr-12 -0.011767-Feb-12 -0.00247 7-Mar-12 -0.00092 10-Apr-12 -0.000268-Feb-12 0.00352 9-Mar-12 0.01559 11-Apr-12 -0.004279-Feb-12 0.00572 12-Mar-12 0.00400 12-Apr-12 0.0059710-Feb-12 0.00013 13-Mar-12 0.00809 13-Apr-12 -0.0071013-Feb-12 -0.00078 14-Mar-12 0.00433 16-Apr-12 0.0020814-Feb-12 0.00259 15-Mar-12 -0.00850 17-Apr-12 0.0097315-Feb-12 0.01510 16-Mar-12 -0.00793 18-Apr-12 0.0019316-Feb-12 0.00420 19-Mar-12 -0.00658 19-Apr-12 0.0037217-Feb-12 0.00608 20-Mar-12 0.00325 20-Apr-12 -0.0028121-Feb-12 0.00579 21-Mar-12 0.01178 23-Apr-12 -0.0119222-Feb-12 -0.01927 22-Mar-12 -0.01689 24-Apr-12 0.0033723-Feb-12 -0.00204 23-Mar-12 0.00481 25-Apr-12 -0.0059524-Feb-12 -0.00435 26-Mar-12 -0.01127 26-Apr-12 -0.0024727-Feb-12 -0.01888 27-Mar-12 0.00472 28-Feb-12 0.01387 28-Mar-12 -0.00482 29-Feb-12 0.00787 29-Mar-12 -0.00039

30-Mar-12 0.01743




Page 38


Month Sensex Return

ICICI EQUITY X Y X*Y X*X Y*Y

February 0.112 0.002895 0.112 0.003 0.000324 0.012544 0.0000084March 0.016 -0.000338 0.016 0.000 -0.000005 0.000256 0.0000001April -0.005 -0.0018941 -0.005 -0.002 0.000009 0.000025 0.0000036

TOTAL 0.123 0.0006628 0.000328 0.012825 0.000012MEAN 0.041 0.0002209

BETA 0.025598524 ALPHA -0.000829


Month Sensex Return

HDFC EQUITY

X Y X*Y X*X Y*Y

February 0.112 0.00319 0.112 0.003 0.000358 0.012544 0.0000102March 0.016 -0.00043 0.016 0.000 -0.000007 0.000256 0.0000002April -0.005 -0.00104 -0.005 -0.001 0.000005 0.000025 0.0000011

TOTAL 0.123 0.0017315 0.000356 0.012825 0.000011MEAN 0.041 0.0005772

BETA 0.027758482 ALPHA -0.000561


Page 39

Month Sensex Return

UTI Equity X Y X*Y X*X Y*Y

February

0.112 0.00264 0.071 0.002 0.000146 0.00504 0.0000042

March 0.016 -0.00004 -0.025 -0.001 0.000016 0.00063 0.0000004April -0.005 -0.00084 -0.046 -0.001

0.0000660.00212 0.0000020

TOTAL 0.123 0.0017535 0.000227 0.00778 0.000007MEAN 0.041 0.0005845

BETA 0.029184532 ALPHA -0.000612


SCHEMES BETA ALPHA S.D.

PRU ICICI 0.0255 -0.00082 0.000012

HDFC 0.0277 -0.00050 0.000011

UTI 0.0291 -0.00061 0.000007

INTERPRETATIONBETA:

Beta of UTI Equity Scheme is the highest, this indicate that the risk Profile of UTI Mutual Fund

for Equity schemes is more. Next riskiest Fund is HDFC and then ICICI Prudential.

ALPHA:

The highest return is given by HDFC Equity Fund. After which comes UTI Equity Fund.

STANDARD DEVIATION:

ICICI Prudential Equity Fund has shown more deviation in its Movement. Therefore this fund

has shown more volatility in its performance. UTI Equity Fund has shown less deviation.

For investors who invest in Equity Fund for getting more returns as compared to other schemes,

therefore in order to get more returns they have to take more risks.

Page 40

CONCLUSION

We should note that a mutual fund is a trust that pools the money of several investors and

manages investments on behalf. The fund collects this money from investors through various

schemes. Each scheme is differentiated by its objectives of investments or in other words a

broadly defined purpose of how the collected money is going to be involved.

Investors invest in mutual fund due to following advantages: they have professional

management, diversification, convenient administration, return potential, low cost, liquidity.

By comparing the above mentioned schemes, I came to know the risk and return relation

between the specified schemes. Therefore investors before investing in any Mutual Fund

schemes they should study the risk and return relation. And if the risk and returns match with

their planning, then only the investors should go for Mutual Fund schemes.

So the future of mutual funds in India is bright, because it meets investor s needs perfectly. This

will give boost to Indian investors and will attract foreign investors also. It will lead to the

growth of strong institutional framework that can support the capital markets in the long run.

Page 41

RECOMMENDATIONSRemember to pack the following investment gems in your luggage as you set forth on your

financial journey. These guideposts reinforce and expand the key points covered throughout

Building Your Mutual Fund Portfolio.

Diversify for investment success: Develop a solid plan based on your age, time horizon,

liquidity needs, income and risk tolerance. Stick with it until your circumstances change.

Periodically rebalance your holdings to your original asset allocation benchmark: By doing

this, you will wind up selling shares in expensive funds and reinvesting in cheaper ones.

Invest as much as you can in stock funds: As a rough rule, try to hold a percentage at least

equal to “100 minus your age” in stocks. Senior citizens might consider 110 minus their ages to

avoid growing too conservative.

Don’t hop from fund to fund: Traders often lag the long-range returns of the stock & bonds

markets.

Set your sights on building wealth slowly: Get rich quick schemes often backfire. People who

amass fortunes through speculation frequently also learn how it feels to get poor quickly.

Keep it simple: Basic investment plans often work best on the quest for wealth.

Avoid gimmicks: Don’t invest in anything you don’t understand. Pain vanilla funds survive the

test of time better than faddish peers that make use of derivatives and other arcane strategies.

Do your home work before starting out: Never buy or sell Mutual Funds solely on the basis of

tips. If a suggestion seems to have merit, do your own analysis.

Focus on risk, return and cost when evaluating funds: Keep in mind that a fund’s risk and

expenses are easier to predict than its return.

Judge past performance with a grain of salt: Historic returns don’t always predict future

results, especially if a fund’s management or investment style has changed recently.

Don’t neglect the prospectus: You’ll find the guts of this document in the “financial -

highlights”. Look for past expense rations, portfolio turnovers, total annual returns and year to

year changes in assets.

Consider hiring a stockbroker or financial planner if you need help with

Your portfolio: Just make sure the individual is competent and will your needs. The more you

understand about investment risks, return and costs, better you can evaluate the kind of jobs your

advisor is doing.

Page 42

BIBLIOGRAPHY:

www.cdequisearch.com

www.moneycontrol.com

www.amfiindia.com

www.mutualfunds.com

www.icicidirect.com

www.hdfcfund.com

www.valueresearchonline.com

www.investopedia.com

www.utimf.com

www.icicipruamc.com

Page 43

http://www.icicipruamc.com/

http://www.utimf.com/

http://www.investopedia.com/

http://www.valueresearchonline.com/

http://www.hdfcfund.com/

http://www.icicidirect.com/

http://www.cdequisearch.com/

ANNEXURES

ANNEXURE-I: Questionnaire designed to analyze Risk Profile of the Investor

The Risk Analyzer takes you through a series of scientifically designed multiple choice questions to understand your risk taking capacity and behavior and thereby arrive at an assessment of your risk profile. 1 Your age is :

Under 3030 – 4041 – 5051 – 6060 or over

2 Your current annual take-home income is :

Under Rs.100,000between Rs.100,000 and Re.200,000between Rs.200,000 and Re.500,000between Rs.500,000 and Re.10,00,000over Rs.10,00,000

3 The number of years you have until retirement is :

3 years or less3 to 5 years5 to 10 years10 to 15 years15 years or more

4 Your present job or business is :

Is not dependableIs relatively secureIs securedoesn't matter as you already have enough wealthdoesn't matter as you can easily find an equally good new job/career

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5 What is your expectation of how your future earnings would be :It would far outpace inflationIt would be somewhat ahead of inflationIt would keep pace with inflationIt may not be able to keep pace with inflation

6 How would you describe yourself as a risk-taker?

CarelessWilling to take risks for higher returnsCan take calculated riskslow risk taking capabilityextremely averse to risk

7 How good is your knowledge of finance?

I'm an expert in the field of financeI'm proficient in financeI don't know much about finance but I keep myself updated about the developments through newspapers, journals, TV, etc.Limited to knowing things like how the stock market or certain select script is / are movingI'm totally zero as far as knowledge of finance is concerned

8 If you lose your job or stop working today, how long do you think your savings can support you

less than 3 months3 - 6 months6 months to 1 year1 - 3 yearsMore than 3 years

9 If you had Rs.50,000 to invest, which of the following choices would you make ?

Put the money in Bank Fixed Deposit and BondsInvest the money in Mutual FundsInvest the money in SharesInvest in a combination of the above with higher proportion of Bank FDs and BondsInvest in a combination of the above with higher proportion of Mutual Funds and shares

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10 You have a market tip on the price appreciation of a certain scrip, you :Immediately invest in the scripInvest if you feel that the source of the tip is an experienced / expert market playerDo some enquiry and analysis and then decideWant to invest but are generally unable to take a decision in such casesYou don't rely on such tips or totally ignore it

11 You are on a TV game show and you win Rs.10,000. You have a choice to keep the money or risk it to win a higher amount. You :

Are happy with the Rs.10,000 that you've earned

Risk the Rs.10,000 on a 50% chance of winning Rs.30,000

Risk the Rs.10,000 on a 25% chance of winning Rs.75,000

Risk the Rs.10,000 on a 10% chance of winning Rs.1,00,000

12 Which one of the following best describes your feeling immediately after making an investment, you :

Are not bothered - its just another investment for you

Are satisfied and content with the decision

Are not very sure whether you made the right decision

Are worried

Generally regret your decision

13 The stock market has dropped 25% and a share that you own also dropped 25%, but the market expects the share to go up again. What would you do ?

Sell all the shares

Sell some of them

Buy more of them

Keep all of them as you expect the price to reach the earlier level

Keep all of them as you are afraid of booking a loss

14 You have a substantial sum of money spare for about 6 months after which you need this sum to

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repay a loan, this sum is currently not invested anywhere. You would: keep the money in your Bank Fixed Deposit or Open ended Debt Mutual Funds

invest the money in Open ended Equity Oriented Mutual Fund

invest the money in Equity Shares

loan the money at market rates to businessmen

invest the money in a combination of above

15 You are financially responsible for (exclude dependants who can be supported by your spouse's income)

only yourself.

1 person besides yourself

2 to 3 persons besides yourself

4 to 5 persons besides yourself

more than 5 persons besides yourself

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ANNXURE-II: KNOW YOUR CUSTOMER NORMS FOR MUTUAL FUND

COMPANY

Know Your Customer (KYC) norms for Mutual Funds

Prevention of Money Laundering Act, 2002 (PMLA) came into effect from July 1, 2005 and

consequently SEBI mandated that all intermediaries (which includes Mutual Funds) should

formulate and implement a proper policy framework as per the guidelines on anti money

laundering measures and also adopt a Know your Customer (KYC) Policy. Your attention is

drawn to the addenda dated August 31, 2006, December 29, 2006, September 17, 2010,

December 10, 2010 and December 29,, 2011 issued by Asset Management Company Limited

(AMC) on PMLA.

Effective January 01, 2011 KYC compliance was made mandatory for all categories of

investors irrespective of the amount invested for the following transactions:

New / Additional Purchases

Switch Transactions,

New SIP/ STP/ Flex STP/ Flex Index/ DTP registrations.

Any SIP/STP/Trigger related products launched subsequently

Who all need to be KYC Compliant?

Any individual(s) or non-individual(s)

Guardian investing on behalf of minor.

Constituted as Power of Attorney (PoA) holder(s), in case of investments through PoA.

If an individual becomes an Investor due to an operation of law, e.g., transmission of units

upon death of an investor, the claimant / person(s) entering the Register of unit holders of the

Fund will be required to be KYC compliant before such transfer can take place.

NEW KYC Norms

SEBI vide Circular No. MIRSD/SE/Cir-21/2011 dated October 5, 2011, SEBI (KYC

Registration Agency) Regulations, 2011 and Circular No. MIRSD/ Cir-26/ 2011 dated December

23, 2011 has introduced the concept of KYC Registration Agency (KRA) for the purposes of a

unified KYC in the securities market.

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KRA shall send a letter to the investor within 10 working days of the receipt of the

initial/updated KYC documents from the Mutual Fund, confirming the details thereof. The KYC

done with us will be valid for all the SEBI registered intermediaries viz. Mutual Funds, Portfolio

Managers, Depository Participants, Stock Brokers, Venture Capital Funds, Collective Investment

Schemes, etc. Apart from KYC, it is mandatory for intermediaries including mutual funds to

carry out In-Person Verification (IPV) of all its new investors. The IPV carried out by any SEBI

registered intermediary can be relied upon by the Mutual Fund. AMFI certified distributors who

are KYD compliant are authorized to undertake the IPV for Mutual Fund investors. Further, in

case of any applications received directly (i.e. without being routed through the distributors)

from the investors, the Mutual Fund may rely upon the IPV (on the KYC Application Form)

performed by the scheduled commercial banks.

Procedure for KYC compliance

Investors (both individuals and non-individuals) intending to invest must meet certain mandatory

requirements in terms of establishing their proper identity and address. Applicants (including

new/ existing Unit-holders) will have to submit the following documents:

KYC Application Form duly completed by each applicant including joint Unit-holders

Documents evidencing Proof of Identity and Proof of Address*

* List of requisite KYC documents for individuals and non-individuals is mentioned in the

revised KYC Application Form.

These documents can be submitted at our Investor Service Centres (ISCs) and other

Intermediaries of KRA's as mandated by SEBI. Upon receipt and verification of the above

documents, a KYC acknowledgement will be issued to each applicant. Investor(s) must note

That KYC compliance is mandatory at the time of submission of each subscription request with

the designated Official Points of Acceptance.

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Important points to note for Investors :

1. Applications/transactions request will not be processed if the KYC requirements as applicable

on the date of investment are not complied.

2. Investors/ unit holders should further note that the above KYC norms may undergo changes

from time-to-time. Hence, investors/unit holders are requested to apprise themselves about KYC

applicability before submitting their applications/transactions.

ADDENDUM to the Statement of Additional Information/Key Information

Memorandum(s) of HDFC Mutual Fund

REVISION IN KNOW YOUR CUSTOMER (KYC) PROCEDURE

Pursuant to SEBI Circular No. MIRSD/ Cir-26/ 2011 dated December 23, 2011, SEBI (KYC

Registration Agency) Regulations, 2011 and SEBI Circular No. MIRSD/SE/Cir-21/2011 dated

October 5, 2011, regarding uniformity in the Know Your Customer (KYC) process in the

securities market and development of a mechanism for centralization of the KYC records to

avoid duplication of KYC Process across the intermediaries in the securities market, the

following changes were made to SAI/KIM of the Schemes:

1. SEBI has introduced a common KYC Application Form for all the SEBI registered

intermediaries viz. Mutual Funds, Portfolio Managers, Depository Participants, Stock Brokers,

Venture Capital Funds, Collective Investment Schemes, etc. New Investors are therefore

requested to use the common KYC Application Form and carry out the KYC process including

In-Person Verification (IPV) with any SEBI registered intermediaries including mutual funds.

The KYC Application Forms are also available on the websites of AMC companies.

2. The Mutual Fund shall perform the initial KYC of its new investors and may undertake

enhanced KYC measures commensurate with the risk profile of its investors. The Mutual Fund

shall upload the details of the investors on the system of the KYC Registration Agency (KRA).

Registrar & Transfer Agent (RTA) of the Mutual Fund may also undertake the KYC of the

investors on behalf of the Mutual Fund. KRA shall send a letter to the investor within 10

working days of the receipt of the initial/updated KYC documents from the Mutual Fund,

confirming the details thereof.

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3. Once the investor has done KYC with a SEBI registered intermediary, the investor need not

undergo the same process again with another intermediary including mutual funds. However, the

Mutual Fund reserves the right to carry out fresh KYC of the investor.

4. It is mandatory for intermediaries including mutual funds to carry out In-Person Verification

(IPV) of its new investors from the Effective Date. The IPV carried out by any SEBI registered

intermediary can be relied upon by the Mutual Fund.

5. Existing KYC compliant investors of the Mutual Fund can continue to invest as per the current

practice. However, existing investors are also urged to comply with the new KYC requirements

including IPV as mandated by SEBI.

This addendum shall form an integral part of the SAI / KIM(s) of Scheme(s) of HDFC Mutual

Fund as amended from time to time.

This Addendum is dated December 29, 2011

Risk Factors: All mutual funds and securities investments are subject to market risks and there

can be no assurance that the Scheme’s objectives will be achieved and the NAV of the Scheme

may go up or down depending upon the factors and forces affecting the securities market. Past

performance of the Sponsors and their affiliates / AMC / Mutual Fund and its Scheme(s) do not

indicate the future performance of the Scheme of the Mutual Fund. Please read the Scheme

Information Document and Statement of Additional Information before investing.

Page 51

A Project Report on Mf Pavan

Documents

soma pavan

sun life financial

capital appreciation

kyc registration

private sector

common financial

reliance mutual

sahara mutual