Indu finance

CHAPTER 1

INTRODUCTION

1.1INDUSTRY PROFILE

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:

Mutual Fund Operation Flow Chart

1

1.1.1 ORGANIZATION OF A MUTUAL FUND

There are many entities involved and the diagram below

illustrates the organizational set up of a mutual fund:

1.1.2 ADVANTAGES OF MUTUAL FUNDS

Professional Management

Diversification

Convenient Administration

Return Potential

Low Costs

Liquidity

Transparency

Flexibility

Choice of schemes

2

Tax benefits

Well regulated

1.1.3 TYPES OF MUTUAL FUND SCHEMES

Wide variety of Mutual Fund Schemes exists to cater to the needs such as

financial position, risk tolerance and return expectations etc. The table below gives an

overview into the existing types of schemes in the Industry.

3

1.1.4 TERMS USED IN MUTUAL FUND

Net Asset Value (NAV)

Net Asset Value is the market value of the assets of the scheme minus its liabilities.

The per unit NAV is the net asset value of the scheme divided by the number of units

outstanding on the Valuation Date.

Sale Price

Is the price we pay when we invest in a scheme. Also called Offer

Price. It may include a sales load.

Repurchase Price

Is the price at which a close-ended scheme repurchases its units and it

may include a back-end load. This is also called Bid Price.

Redemption Price

Is the price at which open-ended schemes repurchase their units and

close-ended schemes redeem their units on maturity. Such prices are NAV

related.

Sales Load

4

Is a charge collected by a scheme when it sells the units. Also called,

‘Front-end’ load. Schemes that do not charge a load are called ‘No Load’

schemes.

Repurchase or ‘Back-end’ Load

Is a charge collected by a scheme when it buys back the units from the

unit holders.

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1.2 COMPANY PROFILE

KRISH FINANCE, is a premier integrated financial services

provider. Krish finance has a professional management team and ranks

among the best in technology, operations and research of various industrial

segments.

The group of professionals founded the parent company in 2002 and

today it has evolved as integrated financial service company of repute,

offering various financial services to suit every requirement/ need by

investors. By virtue of its access to million of Indian share holders, in

addition to companies banks and financial institutions. Krish finance has

been in the process built up a positive reputation with regulatory authorities

and other government agencies emphasis on the following factors has been

instrumental in helping them attain the leadership in the financial service

sector.

Financial services provided by Krish finance:

1. Stock broking

2. Depository Participants

3. Distribution of financial products

o Mutual funds,

o Bonds,

o Fixed deposit,

o Equities,

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4. Insurance Broking

5. Commodities Broking

6. Personal Finance Advisory Services

7. Merchant Banking & Corporate Finance

8. Placement of equity

9. IPO’s

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Quality Policy

To achieve and retain leadership, Krish finance shall aim for complete

customer satisfaction, by combining its human and technological resources,

to provide superior quality financial services. In the process, Krish finance

will strive to exceed Customer's expectations.

Quality Objectives:

1. Build in-house processes that will ensure transparent and harmonious

relationships with its clients and investors to provide high quality of

services.

2. Establish a partner relationship with its investor service agents and

vendors that will help in keeping up its commitments to the

customers.

3. Provide high quality of work life for all its employees and equip them

with adequate knowledge & skills so as to respond to customer's

needs.

4. Continue to uphold the values of honesty & integrity and strive to

establish unparalleled standards in business ethics.

5. Use state-of-the art information technology in developing new and

innovative financial products and services to meet the changing needs

of investors and clients.

6. Strive to be a reliable source of value-added financial products and

services and constantly guide the individuals and institutions in

making a judicious choice of it.

7. Strives to keep all stake-holders (shareholders, clients, investors,

employees, suppliers and regulatory authorities) proud and satisfied.

8

CHAPTER II

STATEMENT OF THE PROBLEM, SCOPE OF THE STUDY,

OBJECTIVES, LIMITATIONS AND METHODOLOGY OF THE

STUDY

2.1 STATEMENT OF THE PROBLEM

Mutual funds pool the funds of small investor and invest it in the

securities. As the investors do not know in which portfolio the fund

managers will go investment, the performance such as the risk and the return

associated with each fund type will only affect the investor. Here the risk

associated with each type will vary, hence the return will also vary. Since the

investors are investing based on the scheme category such as private or

public sector funds.

Costs are the biggest problems with mutual funds. These costs eat into

our return and they are the main reason why the majority of funds reason

why the majority of funds end up with sub par performance. Some cities of

the industry say that mutual funds companies get away with the fees they

charges only the average investors does not understand what he/she is

paying for: fees can be broken allow into two categories.

1. On going yearly fees to keep is invested in the fund.

2. Transaction fees paid when we buy or sell shares in a fund.

9

2.2 SCOPE OF THE STUDY

This study was undertaken with the existing mutual funds in the

websites. These funds are already used by the researcher for the analysis.

This study covers various schemes for analysis. They are Escorts

mutual fund, GIC mutual fund, JM mutual fund, Kotak mutual fund, ING

Vysya mutual fund, Taurus mutual fund, Reliance mutual fund.

2.3 OBJECTIVES OF THE STUDY

The analysis on the performance of private and public sector mutual

funds is made with

2.3.1 Primary Objective

To compare the public sector and private sector mutual fund

performance.

2.3.2 Secondary Objectives

1. To evaluate the performance of the funds based on market risk.

2. To increase returns on the portfolio through successful prediction of

future securing prices.

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3. To protect a company’s current earnings from competitive pressure

through economic moat.

4. To provide a steady cash flow to investors.

5. To evaluate the performance of the funds based on total risk.

11

2.4 LIMITATIONS OF THE STUDY

Analysis and interpretation is only based on the open - end

schemes.

Dividend schemes were not taken into consideration in this study.

This study considers the period between 2008-2010 and before and

after this period were not taken into consideration.

The analysis and interpretation of the fund is based only on the

past performance.

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2.5 METHODOLOGY OF THE STUDY

The present study was conducted at Krish finance Private Limited

using the secondary data. The main sources of secondary data are obtained

from company websites. Informal discussions were made with the industry

staff. During the course of discussions the staff expresses their opinions

regarding the funds.

2.5.1 Data collection method

Secondary data were used for analyses such as (NAV) and

performance of various schemes of the asset management companies.

The net asset value (NAV) of the funds were collected from various

websites. The benchmark indices were collected from the respective

company’s fact sheets and also from the company’s common application

forms.

2.5.2 Research design

"Analytic", it is important to clearly identify the objectives of the study (preferably identifying the specific parameters to be measured – see Rothman and Greenland) and the rationale (i.e., the case for conducting the research). There are innumerable decisions, judgments, and compromises that must be made during the design, conduct, analysis, and interpretation of a study, and the principal guideposts for making them are the study objectives and rationale. For example, if the objective is to test hypotheses,

13

2.6 TOOLS USED FOR ANALYSIS

Sharpe, Treynor and Jensen Method

Portfolio performance was measured mostly in terms of returns in

early days, though there was an awareness of the concept of risk, which was

difficult to quantify. Risk could not be incorporated in evaluation, as there

was no measures that combined both return and risk. Returns on portfolios

performance are Sharpe Ratio, Treynor measure and Jensen measure. These

are absolute measure of portfolio performance that can be used to rank

different portfolios.

2.6.1 RETURN

For each mutual fund scheme under study, the monthly returns are

computed as:

2.6.2 AVERAGE

I = 1,2,3 …………….. n

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2.6.3 RISK

Standard deviation : Measurement of Total Risk

Financial analysts and statisticians prefer to use a quantitative risk

surrogate called the clash of returns, denoted by I.

The standard deviation and he variance are equally acceptable and

equivalent quantitative measures of an asset’s total risk. The variance and

standard deviation are computed from logarithmic monthly returns.

2.6.4 BETA

Measurement of Systematic Risk

To obtain the measure of systematic risk (Beta) of the mutual fund

scheme, Market Model is applied.

15

2.6.5 RISK-LESS ASSET

By definition, a risk less asset has zero variability of returns. If an

investor buys an asset at the beginning of the holding period with the known

terminal value, such type of asset can be called as risk-less or risk free asset.

Government securities and nationalized bank deposits fall under this

category. As the government securities are not easily available to the

common man, we take the nationalized bank deposits as the risk free asset

and the interest rate on such deposits are considered as risk free return.

2.6.6 SHARPE RATIO

This is a measure of risk-adjusted return on a portfolio. It is a ratio of

excess return to the standard deviation of portfolio returns. An implicit

assumption of the Sharpe ratio is that the portfolio is not combined with

other risky portfolios. It is relevant for performance evaluation when

comparing mutually exclusive portfolios.

The Sharpe measure follows his earlier work on capital asset pricing

model (CAPM) dealing specifically with capital market line (CML).

The Sharpe measure of performance denoted by S is given by

16

Where,

Ri = the average rate of return on portfolio ‘i’ during a specified time

period.

Rf = the average rate of return on a risk free investment during the same period

17

2.6.7 TREYNOR MEASURE

This is also a measure of risk-adjusted return on a portfolio. It is a

ratio of excess return to the systematic risk () of the portfolio. It is relevant

for performance measurement when evaluating portfolios separately or in

combination with other portfolios. A high treynor measure indicated a

favourable relationship between risk and return on the portfolio.

Sharpe Ratio and Treynor measure give the same results in the case of

highly diversified portfolios as the total risk of portfolios approaches that of

a market portfolio.

Where,

Ri = the average rate of return on portfolio ‘i' during a specified time

period.

Rf = the average rate return on a risk free investment during the same

period.

= the slope of the fun’s characteristic line during that time period (this

indicates portfolio’s relative volatility with respect to market portfolio).

18

A larger ‘T’ value indicates a better portfolio performance for all

investors regardless of their risk performances. The numerator of this ratio

(Ri-Rf) is the risk premium and the denominator is a measure of market risk.

The Treynor measure is risk premium per unit of systematic risk.

19

2.6.8 JENSEN’S ALPHA

This is the difference between a fund’s actual return and the return on

a benchmark portfolio with the same systematic risk () of the portfolio

whose performance is being valuated. It measures the ability of active fund

management to earn returns in excess of the reward for market risk. We can

infer meaningful results if it is used to compare two portfolios with similar

betas.

Jensen’s measure is also based on capital asset pricing model. CAPM

estimates the expected return on any security or portfolio by the following

expression:

E (Ri) = Rf + i [E(Rm-Rf)

Where,

E (Ri) = expected return on security or portfolio I

Rf = Risk free return

I = Systematic risk (beta) of security

E (Rm) = expected return on the market portfolio I

Jensen’s alpha () is defined as:

Ri – Rf = I + I (Rm-Rf) + I

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The value of ‘aj’ suggests whether the portfolio manager possesses

superior (inferior) market timing and stock selection skills. A positive () is

an indication of superior fund management ability.

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CHAPTER III

REVIEW OF LITERATURE

We cannot find only project on the comparison of the various types of

funds. But a related project is found, the fund families being rated on their

performance. This study was done by value research.

3.1 METHODOLOGY OF THE STUDY

Methodology is a way to systematically solve the research problem. It

explains the various steps that are generally adopted by the researcher in

studying the research problems along with the logic behind it.

3.2 RESULTS OF THE STUDY

The rating scores of a fund house majority of whose funds are un-

rated may not depict the complete story.

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EQ Dbt Hybrid ST

Escort Growth plan 12 - - 17

Escort income bond 6 4 13 6

Escort Income Plan 14 19 - 17

GIC Growth Plus II 22 21 14 1

Escort Tax Plan 10 10 - 21

GIC DMAT - 20 - 5

Taurus star share 5 3 6 12

LIC MF Equity Fund 11 1 7 -

LIC Bond Fund 4 5 1 7

LIC MF Govt. Security Fund 16 25 8 24

Escort Balanced Fund 2 9 2 23

Kotak Gilt Fund - 22 - 14

GIC Opportunity Fund 23 23 17 3

GIC Fortune 94 19 11 4 18

JM Equity Fund 15 2 5 8

Kotak Bond Fund 21 16 10 4

ING Financial 9 6 15 9

JM Balanced Fund 8 8 9 19

JM Basic Fund 1 14 - 16

Kotak Tech 20 24 - 2

Kotak MNC 18 15 16 11

LIC - MF Growth Fund - 17 - 22

Reliance Retail Plan Fund 3 7 3 20

23

It concusses, that Reliance Equity fund is performing well, and Escort

mutual fund is doing good in case of debt funds is performing well in hybrid

funds. In short term funds, LIC mutual funds performance is good.

24

CHAPTER IV

DATA ANALYSIS AND INTERPRETATION

Table 4.1

Escorts Growth Plan

Month2008 2009 2010

Return Index Return Index Return Index

Jan 2.654 3.645 1.615 4.986 12.003 3.187

Feb 2.624 0.637269 3.212 2.078 8.251 2.290

Mar 5.967 7.78365 6.712 3.636 7.997 2.355

Apr 2.476 3.91725 0.984 0.386 5.707 7.890

May 6.078 9.293456 12.282 16.583 10.699 8.805

Jun 7.791 11.55789 0.757 0.081 3.067 5.426

Jul 4.644 5.869298 7.607 5.973 10.888 5.262

Aug 10.761 13.31084 3.626 0.128 6.665 2.756

Sep 3.140 3.696144 5.150 6.963 3.895 7.624

Oct 15.648 9.291876 0.870 0.390 10.739 10.198

Nov 1.329 1.621901 6.262 9.221 7.754 12.835

Dec 9.519 14.45042 10.559 7.039 7.382 4.974

S.D 6.22 6.33 6.23

Beta 0.772 0.842 0.401

Sharpe 5.26 0.01 0.34

Treynor 7.64 0.05 5.62

25

Jensen 0.36 3.75 5.72

Correlatio

n 0.91 0.93 0.08

26

INTERPRETATION

In Sharpe method, the Escorts Growth plan 2008 Portfolio has

higher return than other portfolio. That means the company performs better

fund in the year 2008.

In Treynor’s method, the Portfolio of 2008 has higher return than

other portfolio.

In Jensen’s method, the Portfolio of 2010 has higher return than

other portfolio.

It is known from the correlation that the relationship between the

Escorts Growth plan stock return and stock market index return is high in

2009.

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Table 4.2

Escorts Income Bond

Month2008 2009 2010


Jan 0.054 1.368 2.584 1.165 2.039 0.232

Feb 0.843 0.361 0.370 0.003 0.462 0.375

Mar 3.040 0.198 0.445 0.507 1.401 0.363

Apr 1.699 0.856 1.030 0.164 2.427 0.372

May 2.594 1.304 1.419 0.068 4.369 0.361

Jun 5.574 0.744 1.205 0.701 0.779 0.418

Jul 0.091 0.274 0.066 1.423 2.977 0.728

Aug 2.508 1.394 1.402 0.697 1.555 0.960

Sep 0.704 1.775 3.221 0.355 0.057 0.279

Oct 0.157 0.134 1.404 1.138 3.226 0.444

Nov 4.202 0.405 2.102 0.135 1.736 0.765

Dec 3.586 0.391 7.761 0.230 1.762 0.450

S.D 2.38 2.77 2.31

Beta 0.302 0.725 2.582

Sharpe 3.39 6.41 16.21

Treynor 7.17 6.28 2.16

Jensen 0.32 5.01 14.95

Correlation 0.08 0.19 0.40

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INTERPRETATION

In Sharpe method, the Escorts Income Bond 2010 Portfolio has

higher return than other portfolio. That means the company performs better

fund in the year 2010.


other portfolio.


other portfolio.


stock return and stock market index return is high in 2010.

29

Table 4.3

Escorts Income Plan

Month2008 2009 2010


Jan 0.803 5.299 0.228 5.360 0.391 2.714

Feb 0.464 0.768 0.666 1.769 0.566 2.107

Mar 1.205 7.617 0.865 4.361 0.400 2.339

Apr 1.579 5.105 0.363 1.294 0.374 7.987

May 1.044 7.300 0.275 16.024 0.416 8.911

Jun 0.612 11.722 0.127 0.153 0.324 6.374

Jul 0.580 4.878 0.174 6.187 0.214 4.539

Aug 0.490 13.448 0.448 0.445 0.328 2.873

Sep 0.546 2.991 0.147 6.729 0.402 8.133

Oct 0.502 9.505 0.232 0.662 0.353 9.852

Nov 0.856 0.849 0.526 8.958 0.427 11.124

Dec 1.324 13.398 0.435 6.037 0.110 5.098

S.D 0.37 0.27 0.11

Beta 0.018 0.005 0.001

Sharpe 0.83 0.86 0.88

Treynor 3.47 1.44 6.90

Jensen 0.94 0.37 0.36


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INTERPRETATION

In Sharpe method, 2010 Portfolio has higher return than other

portfolio. That means the company performs better fund in the year 2010.


other portfolio.


other portfolio.



31

Table 4.4

Escorts Tax Plan

Month2008 2009 2010


Jan 3.762 5.299 1.491 5.360 1.206 2.714

Feb 4.959 0.768 4.517 1.769 5.135 2.107

Mar 5.904 7.617 5.714 4.361 5.792 2.339

Apr 2.851 5.105 0.306 1.294 6.441 7.987

May 6.628 7.300 16.432 16.024 6.963 8.911

Jun 8.696 11.722 1.583 0.153 4.078 6.374

Jul 5.421 4.878 6.676 6.187 7.712 4.539

Aug 12.412 13.448 2.581 0.445 5.382 2.873

Sep 2.413 2.991 3.226 6.729 9.789 8.133

Oct 15.191 9.505 0.003 0.662 9.193 9.852

Nov 1.357 0.849 5.595 8.958 7.888 11.124

Dec 15.060 13.398 8.143 6.037 4.595 5.098

S.D 7.10 6.61 6.57

Beta 0.907 0.908 0.803

Sharpe 5.35 0.45 2.41

Treynor 4.90 3.21 1.12

Jensen 0.39 4.62 2.81


32

INTERPRETATION




other portfolio.


other portfolio.



33

Table 4.5

Escort Balanced Fund

Month2008 2009 2010


Jan 1.7970 8.452 4.370 4.078 4.400 2.962

Feb 3.1779 2.164 0.618 5.298 0.630 5.863

Mar 4.6906 5.747 6.015 0.835 6.004 5.221

Apr 1.2131 2.214 0.519 4.073 0.506 4.998

May 4.3139 8.495 11.183 0.488 11.274 1.886

Jun 5.9484 3.237 0.758 3.418 0.681 2.893

Jul 4.0678 6.972 5.820 0.615 5.829 4.094

Aug 11.1112 4.914 3.787 9.794 3.690 5.674

Sep 3.9788 2.368 7.027 0.602 6.951 4.945

Oct 11.5740 4.665 6.503 2.153 6.891 1.206

Nov 0.3638 1.396 5.650 3.488 5.547 1.583

Dec 12.4841 3.523 4.569 3.235 5.050 0.425

S.D 5.56 5.83 5.90

Beta 0.639 0.181 0.134

Sharpe 4.95 1.60 1.06

Treynor 33.19 35.74 28.57

Jensen 7.83 0.94 0.96


34

INTERPRETATION




other portfolio.


other portfolio.



35

Table 4.6

GIC Growth Plus II

Month2008 2009 2010


Jan 3.083 3.609 7.934 6.600 7.754 3.624

Feb 0.889 0.680 2.785 2.796 3.846 2.952

Mar 2.857 7.917 3.027 1.799 0.308 2.155

Apr 1.715 1.274 4.771 1.096 4.719 6.462

May 3.959 14.863 8.956 17.108 7.888 8.235

Jun 8.238 10.303 2.961 0.032 10.253 3.685

Jul 7.394 4.983 0.917 7.027 1.096 6.016

Aug 7.742 16.419 4.495 1.695 2.783 4.253

Sep 0.148 1.489 3.050 6.877 3.032 6.083

Oct 5.048 6.653 1.576 0.250 1.735 10.074

Nov 2.282 3.428 5.739 9.440 5.609 10.625

Dec 10.740 16.617 7.265 8.814 6.851 4.991

S.D 4.67 5.26 5.53

Beta 0.512 0.590 0.186

Sharpe 3.48 0.22 0.03

Treynor 52.18 2.62 1.09

Jensen 0.21 2.76 0.43


36

INTERPRETATION




other portfolio.


other portfolio.



37

Table 4.7

GIC DMAT

Month2008 2009 2010


Jan 2.284 3.645 1.179 4.986 0.181 3.187

Feb 0.774 0.637 2.058 2.078 2.110 2.290

Mar 3.585 7.784 2.536 3.636 6.184 2.355

Apr 0.265 3.917 0.483 0.386 3.761 7.890

May 6.842 9.293 11.983 16.583 8.612 8.805

Jun 8.712 11.558 2.596 0.081 4.666 5.426

Jul 6.208 5.869 2.115 5.973 9.572 5.262

Aug 10.267 13.311 1.698 0.128 2.618 2.756

Sep 1.332 3.696 5.034 6.963 10.151 7.624

Oct 15.543 9.292 2.609 0.390 2.499 10.198

Nov 1.031 1.622 7.543 9.221 2.521 12.835

Dec 11.695 14.450 9.007 7.039 2.510 4.974

S.D 6.16 5.52 5.56

Beta 0.753 0.690 0.428

Sharpe 5.18 0.21 0.93

Treynor 48.06 1.99 14.25

Jensen 0.11 3.41 0.86


38

INTERPRETATION




other portfolio.


other portfolio.



39

Table 4.8

GIC Fortune 94

Month2008 2009 2010


Jan 2.384 0.465 8.144 1.030 2.803 0.340

Feb 0.142 0.459 0.357 0.056 5.689 0.408

Mar 6.553 0.288 0.554 0.098 1.681 0.442

Apr 1.064 0.646 0.334 0.299 2.105 0.440

May 14.941 0.817 15.275 0.302 8.621 0.297

Jun 10.831 0.728 4.341 0.266 1.385 0.297

Jul 5.011 0.328 0.749 0.210 6.337 0.748

Aug 11.966 0.699 1.706 0.352 4.193 0.918

Sep 1.692 1.720 5.716 0.241 5.209 0.283

Oct 8.303 0.474 0.341 0.621 0.680 0.575

Nov 7.635 0.190 12.349 0.209 0.401 0.367

Dec 17.408 0.255 7.310 0.359 0.683 0.375

S.D 7.30 7.09 3.99

Beta 0.348 1.904 0.179

Sharpe 6.00 3.12 18.20

Treynor 6.76 0.50 28.03

Jensen 7.87 10.39 2.75


40

INTERPRETATION




other portfolio.


other portfolio.



41

Table 4.9

LIC MF Equity Fund

Month2008 2009 2010


Jan 1.210 5.299 4.011 5.360 2.219 2.714

Feb 2.853 0.768 6.131 1.769 5.212 2.107

Mar 4.515 7.617 3.590 4.361 0.431 2.339

Apr 0.138 5.105 1.590 1.294 2.278 7.987

May 8.642 7.300 14.867 16.024 7.738 8.911

Jun 8.657 11.722 0.154 0.153 5.173 6.374

Jul 7.471 4.878 5.387 6.187 3.419 4.539

Aug 14.590 13.448 3.024 0.445 9.789 2.873

Sep 2.857 2.991 5.000 6.729 3.393 8.133

Oct 11.459 9.505 0.455 0.662 9.727 9.852

Nov 4.180 0.849 5.416 8.958 10.068 11.124

Dec 13.379 13.398 8.815 6.037 3.930 5.098

S.D 5.98 6.36 5.70

Beta 0.781 0.881 0.747

Sharpe 4.70 0.40 2.35

Treynor 42.68 2.95 19.97

Jensen 1.09 4.08 1.58


42

INTERPRETATION




other portfolio.


other portfolio.



43

Table 4.10

LIC MF Bond Fund

Month

2008 2009 2010


Jan 0.995 1.368 0.211 1.165 2.262 0.232

Feb 0.737 0.361 0.075 0.003 1.530 0.375

Mar 0.723 0.198 1.306 0.507 1.577 0.363

Apr 1.742 0.856 0.255 0.164 3.512 0.372

May 1.382 1.304 0.598 0.068 0.055 0.361

Jun 0.358 0.744 1.143 0.701 4.548 0.418

Jul 0.430 0.274 0.191 1.423 0.397 0.728

Aug 1.247 1.394 0.131 0.697 1.698 0.960

Sep 0.774 1.775 0.191 0.355 0.223 0.279

Oct 0.238 0.134 0.376 1.138 0.338 0.444

Nov 0.218 0.405 0.398 0.135 5.121 0.765

Dec 1.183 0.391 0.210 0.230 0.211 0.450

S.D 0.84 0.60 2.54

Beta 0.234 0.052 2.768

Sharpe 5.68 8.26 16.74

Treynor 12.52 13.47 2.08

Jensen 0.87 0.30 1.67


44

45

INTERPRETATION




other portfolio.


other portfolio.



46

Table 4.11

LIC MF Govt. Securities Fund

Month

2008 2009 2010


Jan 1.552 0.864 0.324 0.524 0.984 0.244

Feb 0.019 0.022 0.384 0.343 0.883 0.316

Mar 1.474 0.284 1.300 0.018 0.311 0.298

Apr 1.874 0.674 0.307 0.314 1.216 0.441

May 1.888 0.688 0.813 0.094 1.117 0.425

Jun 0.826 0.555 0.738 0.120 0.563 0.468

Jul 1.033 0.219 0.025 0.279 0.538 0.421

Aug 2.050 0.574 0.253 0.060 0.321 0.464

Sep 1.073 0.723 0.237 0.391 0.354 0.313

Oct 0.006 0.288 1.954 0.807 0.538 0.444

Nov 0.806 0.433 0.481 0.060 0.669 0.478

Dec 2.054 0.143 1.077 0.054 0.563 0.438

S.D 1.34 0.87 0.59

Beta 0.307 1.739 0.855

Sharpe 14.71 34.96 46.07

Treynor 12.38 5.65 10.27

Jensen 1.24 10.11 5.52


47

INTERPRETATION




other portfolio.


other portfolio.



48

Table 4.12

LIC MF Growth Fund

Month

2008 2009 2010


Jan 4.071 0.864 1.386 0.524 2.716 0.244

Feb 1.107 0.022 3.382 0.343 1.761 0.316

Mar 4.509 0.284 0.080 0.018 3.633 0.298

Apr 3.579 0.674 3.143 0.314 5.468 0.441

May 13.099 0.688 15.491 0.094 3.980 0.425

Jun 7.974 0.555 0.447 0.120 0.419 0.468

Jul 12.389 0.219 3.957 0.279 9.916 0.421

Aug 15.199 0.574 1.090 0.060 5.542 0.464

Sep 4.611 0.723 4.998 0.391 2.834 0.313

Oct 11.827 0.288 1.394 0.807 9.906 0.444

Nov 0.715 0.433 7.651 0.060 8.627 0.478

Dec 11.447 0.143 7.678 0.054 5.672 0.438

S.D 7.02 5.99 5.93

Beta 1.183 0.496 7.805

Sharpe 22.64 11.65 13.44

Treynor 4.95 6.60 3.33

Jensen 12.92 1.36 14.71


49

50

INTERPRETATION




other portfolio.


other portfolio.



51

Table 4.13

ING Financial

Month

2008 2009 2010


Jan 7.642 0.936 6.660 2.129 2.242 0.555

Feb 0.963 0.004 7.621 1.016 2.750 0.773

Mar 7.854 0.412 5.000 0.345 1.581 0.683

Apr 12.254 0.722 2.279 0.297 2.778 0.328

May 1.365 1.822 15.085 0.385 11.111 0.278

Jun 11.960 0.970 1.095 1.072 2.215 0.554

Jul 2.530 0.634 4.272 1.815 9.406 1.270

Aug 7.407 1.409 3.145 0.356 6.220 1.530

Sep 4.948 2.004 5.966 0.475 1.145 1.553

Oct 9.789 2.269 0.662 1.335 7.203 0.779

Nov 2.305 1.043 9.201 0.109 8.422 1.094

Dec 10.972 1.237 12.340 0.216 7.834 0.635

S.D 7.87 7.61 5.72

Beta 0.471 1.500 1.724

52

Sharpe 0.18 2.40 10.89

Treynor 0.40 1.63 4.63

Jensen 0.90 10.34 7.24


53

INTERPRETATION




other portfolio.


other portfolio.



54

Table 4.14

Kotak Gilt

Month

2008 2009 2010


Jan 0.261 1.498 0.242 5.138 0.194 0.679

Feb 0.422 0.588 0.278 1.451 1.545 0.709

Mar 0.528 0.594 0.370 2.699 0.321 0.907

Apr 0.731 1.082 0.183 0.044 0.191 0.439

May 0.392 2.815 0.190 0.112 0.190 0.355

Jun 0.309 1.164 1.940 1.703 1.879 0.035

Jul 0.416 0.954 1.641 3.652 1.645 1.879

Aug 0.506 2.044 0.191 1.515 0.192 3.481

Sep 0.368 3.066 0.191 1.515 0.190 3.376

Oct 0.238 0.728 0.194 1.812 0.194 0.801

Nov 0.244 2.055 0.197 0.069 0.194 2.140

Dec 0.234 0.973 0.191 0.235 0.379 0.490

S.D 0.15 0.62 0.84

Beta 0.034 0.121 0.016

Sharpe 3.49 2.19 3.53

Treynor 15.23 9.54 5.68

Jensen 0.18 1.20 0.24


55

INTERPRETATION




other portfolio.


other portfolio.



56

Table 4.15

Kotak Opportunities

Month

2008 2009 2010


Jan 1.078 3.609 1.270 6.600 0.511 3.624

Feb 0.817 0.680 2.113 2.796 3.189 2.952

Mar 2.228 7.917 1.598 1.799 4.592 2.155

Apr 0.670 1.274 0.308 1.096 2.978 6.462

May 4.623 14.863 7.579 17.108 2.625 8.235

Jun 3.993 10.303 0.815 0.032 0.759 3.685

Jul 2.682 4.983 2.934 7.027 2.260 6.016

Aug 3.993 16.419 1.080 1.695 2.196 4.253

Sep 1.885 1.489 1.854 6.877 3.571 6.083

Oct 6.038 6.653 0.596 0.250 6.358 10.074

Nov 0.051 3.428 3.361 9.440 3.148 10.625

Dec 9.683 16.617 5.017 8.814 3.051 4.991

S.D 3.40 3.21 3.40

Beta 0.368 0.418 0.486

Sharpe 2.31 0.09 0.93

Treynor 18.11 1.45 11.42

Jensen 0.31 1.93 2.34


57

INTERPRETATION




other portfolio.


other portfolio.



58

Table 4.16

Kotak Bond Fund

Month

2008 2009 2010


Jan 0.939 1.368 0.231 1.165 0.386 0.232

Feb 0.312 0.361 0.027 0.003 0.550 0.375

Mar 0.464 0.198 1.258 0.507 0.288 0.363

Apr 1.736 0.856 0.133 0.164 0.189 0.372

May 1.460 1.304 0.729 0.068 0.916 0.361

Jun 0.380 0.744 1.124 0.701 0.440 0.418

Jul 0.754 0.274 0.344 1.423 0.635 0.728

Aug 1.584 1.394 0.079 0.697 0.292 0.960

Sep 0.965 1.775 0.234 0.355 0.317 0.279

Oct 0.295 0.134 0.162 1.138 0.389 0.444

Nov 0.512 0.405 0.050 0.135 0.384 0.765

Dec 1.382 0.391 1.030 0.230 0.308 0.450

S.D 0.92 0.65 0.31

Beta 0.509 0.009 0.381

Sharpe 2.42 8.30 11.32

Treynor 3.05 19.19 10.22

Jensen 2.48 0.04 1.89


59

INTERPRETATION




other portfolio.


other portfolio.



60

Table 4.17

Kotak Tech

Month

2008 2009 2010


Jan 9.393 0.465 8.995 1.030 2.099 0.340

Feb 1.079 0.459 0.504 0.056 4.502 0.408

Mar 8.729 0.288 7.499 0.098 1.809 0.442

Apr 14.926 0.646 2.249 0.299 12.888 0.440

May 1.853 0.817 0.585 0.302 14.537 0.297

Jun 11.157 0.728 2.115 0.266 5.168 0.297

Jul 4.774 0.328 6.637 0.210 1.509 0.748

Aug 7.270 0.699 4.740 0.352 6.403 0.918

Sep 17.595 1.720 4.768 0.241 2.783 0.283

Oct 1.523 0.474 5.090 0.621 5.941 0.575

Nov 5.933 0.190 8.946 0.209 7.713 0.367

Dec 6.553 0.255 0.576 0.359 9.229 0.375

S.D 9.31 5.37 7.32

Beta 10.282 4.014 3.539

Sharpe 9.07 5.95 7.26

Treynor 6.06 4.26 5.48

Jensen 59.20 25.17 23.39


61

INTERPRETATION




other portfolio.


other portfolio.

It is known from the correlation that the relationship between the stock

return and stock market index return is high in 2008.

62

Table 4.18

Kotak MNC

Month

2008 2009 2010


Jan 2.729 3.609 9.812 6.600 0.739 3.624

Feb 0.471 0.680 4.875 2.796 19.191 2.952

Mar 7.951 7.917 1.556 1.799 0.745 2.155

Apr 5.388 1.274 4.179 1.096 3.413 6.462

May 13.788 14.863 10.335 17.108 8.640 8.235

Jun 4.853 10.303 4.037 0.032 1.717 3.685

Jul 7.394 4.983 3.862 7.027 6.025 6.016

Aug 8.780 16.419 6.923 1.695 8.649 4.253

Sep 4.943 1.489 8.460 6.877 0.446 6.083

Oct 5.718 6.653 0.398 0.250 6.832 10.074

Nov 7.770 3.428 6.983 9.440 10.886 10.625

Dec 18.635 16.617 8.152 8.814 6.365 4.991

S.D 7.67 6.44 8.30

Beta 0.814 0.781 0.576

63

Sharpe 5.93 0.73 1.38

Treynor 55.91 6.64 14.29

Jensen 0.12 2.44 2.21


64

INTERPRETATION




other portfolio.


other portfolio.



65

Table 4.19

JM Equity Fund

Month

2008 2009 2010


Jan 1.210 5.299 4.011 5.360 2.219 2.714

Feb 2.853 0.768 6.131 1.769 5.212 2.107

Mar 4.515 7.617 3.590 4.361 0.431 2.339

Apr 0.138 5.105 3.446 1.294 2.278 7.987

May 8.642 7.300 14.867 16.024 7.738 8.911

Jun 8.657 11.722 0.154 -0.153 5.173 6.374

Jul 7.471 4.878 5.387 6.187 3.419 4.539

Aug 14.590 13.448 3.024 0.445 9.789 2.873

Sep 2.857 2.991 5.000 6.729 3.393 8.133

Oct 11.459 9.505 0.455 0.662 9.727 9.852

Nov 4.180 0.849 5.416 8.958 10.068 11.124

Dec 13.379 13.398 8.815 6.037 3.930 5.098

S.D 5.98 6.40 5.70

Beta 0.781 0.875 0.747

66

Sharpe 4.70 0.38 2.35

Treynor 42.68 2.81 19.97

Jensen 1.09 3.89 1.58


67

INTERPRETATION




other portfolio.


other portfolio.



68

Table 4.20

JM Balanced Fund

Month

2008 2009 2010


Jan 2.226 8.452 3.519 4.078 2.306 2.962

Feb 1.105 2.164 3.170 5.298 2.431 5.863

Mar 3.961 5.747 1.301 0.835 1.760 5.221

Apr 0.631 2.214 0.345 4.073 2.754 4.998

May 6.946 8.495 10.193 0.488 3.777 1.886

Jun 5.377 3.237 0.484 3.418 1.665 2.893

Jul 5.824 6.972 3.920 0.615 3.481 4.094

Aug 5.071 4.914 1.382 9.794 5.480 5.674

Sep 34.058 2.368 3.258 0.602 3.269 4.945

Oct 6.063 4.665 0.173 2.153 6.977 1.206

Nov 2.468 1.396 4.041 3.488 8.402 1.583

Dec 21.589 3.523 5.998 3.235 3.119 0.425

S.D 12.65 4.31 4.20

Beta 1.426 0.083 0.238

Sharpe 8.15 1.36 0.13

Treynor 24.48 66.43 1.99

Jensen 10.79 1.08 0.08


69

INTERPRETATION




other portfolio.


other portfolio.



70

Table 4.21

JM Basic Fund

Month

2008 2009 2010


Jan 3.941 3.645 17.542 4.986 7.759 3.187

Feb 4.936 0.637 2.941 2.078 1.382 2.290

Mar 30.000 7.784 6.255 3.636 4.541 2.355

Apr 1.472 3.917 1.408 0.386 4.631 7.890

May 13.281 9.293 19.508 16.583 3.603 8.805

Jun 8.236 11.558 1.762 -0.081 0.749 5.426

Jul 4.889 5.869 8.082 5.973 0.472 5.262

Aug 17.305 13.311 2.075 0.128 4.757 2.756

Sep 6.038 3.696 3.946 6.963 7.143 7.624

Oct 0.736 9.292 2.000 0.390 9.136 10.198

Nov 15.195 1.622 3.114 9.221 12.156 12.835

Dec 7.205 14.450 3.584 7.039 2.893 4.974

S.D 12.90 8.40 6.24

Beta 1.351 0.982 0.817

Sharpe 8.77 0.44 2.17

Treynor 45.38 2.98 17.48

Jensen 8.11 8.32 4.36


71

INTERPRETATION




other portfolio.


other portfolio.



72

Table 4.22

Taurus Star Share

Month

2008 2009 2010


Jan 3.934 3.645 10.184 4.986 5.172 3.187

Feb 0.333 0.637 6.648 2.078 13.901 2.290

Mar 10.265 7.784 7.082 3.636 2.683 2.355

Apr 4.936 3.917 3.153 0.386 4.569 7.890

May 12.132 9.293 5.487 16.583 10.268 8.805

Jun 14.352 11.558 6.290 0.081 3.073 5.426

Jul 2.838 5.869 9.357 5.973 12.000 5.262

Aug 17.318 13.311 14.184 0.128 16.955 2.756

Sep 0.657 3.696 6.376 6.963 0.039 7.624

Oct 9.189 9.292 0.216 0.390 12.187 10.198

Nov 10.572 1.622 6.938 9.221 14.493 12.835

Dec 10.445 14.450 16.040 7.039 7.227 4.974

S.D 8.22 8.62 9.63

Beta 0.938 0.830 0.995

73

Sharpe 6.64 0.23 3.35

Treynor 49.47 1.89 22.15

Jensen 0.01 2.08 1.96


74

INTERPRETATION




other portfolio.


other portfolio.



75

Table 4.23

Reliance Retail Plan Fund

Month

2008 2009 2010


Jan 1.294 5.299 0.298 5.360 0.556 2.714

Feb 0.441 0.768 0.044 1.769 0.787 2.107

Mar 0.982 7.617 1.506 4.361 0.502 2.339

Apr 1.682 5.105 0.512 1.294 0.271 7.987

May 1.378 7.300 0.700 16.024 0.860 8.911

Jun 0.437 11.722 1.353 0.153 0.626 6.374

Jul 0.840 4.878 0.313 6.187 0.488 4.539

Aug 1.559 13.448 0.573 0.445 0.246 2.873

Sep 1.097 2.991 0.474 6.729 0.302 8.133

Oct 0.342 9.505 0.282 0.662 0.231 9.852

Nov 0.471 0.849 0.367 8.958 0.354 11.124

Dec 1.610 13.398 0.692 6.037 0.189 5.098

S.D 1.02 0.75 0.22

Beta 0.080 0.027 0.010

Sharpe 0.27 0.88 0.82

Treynor 24.40 13.45 54.11

Jensen 0.08 0.06 0.39


76

INTERPRETATION




other portfolio.


other portfolio.



77

CHAPTER V

FINDINGS, SUGGESTIONS AND CONCLUSION

5.1 FINDINGS

1. The ability of the portfolio manager to minimize the amount of

insurable risk.

2. Incase of Security fund LIC MF govt. security fund showed increase

in performance based on both sharpe ratio under the period of

analysis.

3. Incase of mutual plan Reliance retail plan showed increase in

performance based on both treynor ratio under the period of analysis.

4. Investors treat their holdings like rented goods.

5. Most of the investors ignore the long – term periods.

6. Economic moat prevents competitors from stealing market share.

7. Bond / income fund is to provide a steady cashflow to investors.

78

5.2 SUGGESTIONS

1. Investors should know about the basic elements of mutual fund.

2. Investors should choose their risk level and according to that they

have to choose the funds.

3. Investors should analyze the company performance and then invest

the funds.

4. Investors should know the market trends.

5. Investors should wait for the long - term returns.

6. Effects of differential degrees of risk on the return of the portfolios

must be taken into account.

79

5.3 CONCLUSION

It can be easily concluded that most of the fund returns can be

attributed to the market that were in direct correlation with the market. But

in the sample of 23 funds considered for this study one fund; it perform as

the market and for this fund the return generated can be attributed to the

market

Mutual funds are funds that pool the money of several investors to

invest in equity or debt markets. Mutual Funds could be Equity funds, Debt

funds or balanced funds. Funds are selected on quantitative parameters like

derivatives, risk adjusted returns, and market analysis of fund performance

and investment styles through regular interactions due diligence processes

with fund managers.

80

Indu finance

Economy & Finance

types of mutual fund

industry profilea mutual

financial position

financial servicesector

financial institutions

mutual fundnet asset

various financial services

openended schemes