Mutual Fund Project

EXECUTIVE SUMMARY Investment is a sensitive concept, any investor whether professional or individual needs to be very careful while investing
and getting decent return. Stock markets which gives good returns in the long run does also has huge amount of risk, it is challenging task for professionals to get the expected rate of return from their investments. Individual investors who invest their hard earned money in equities burn their fingers due to lack of conceptual knowledge. Some investors who are risk averse go for Mutual Funds. So, it is very important to check whether Mutual Funds yield the expected returns to the investors, it is obvious as this pint of that a question strikes to our mind as to why only some Mutual Funds give good returns than other Mutual Fund Companies. The point is what makes the successful Mutual Fund Companies to give comparatively. There may be many factors which contribute for yielding returns. The following are many factors which may have contributed higher returns. 1. Less fees and expenses. 2. Conservative (less risk fund Manager) 3. Use of hedging techniques 4. Fund managers prediction or forecasting of securities movement ability.
So in the above context the first point seems to be more appropriate answer to the question us to why only some Mutual Fund Companies give higher returns. The Study was conducted to compare the performance of Diversified Equity Funds Return with their Benchmarks, SENSEX and Nifty. The summer project entitled Evaluation of Mutual Fund Schemes conducted at Sharekhan Ltd., RT Nagar, Bengaluru. Has a basic objective of studying the organization to understand the structure of Mutual Fund.
PG DEPARTMENT OF MANAGEMENT STUDIES, ATRIA INSTITUTE OF TECHNOLOGY, BANGALORE.
The project has been classified as follows-
Chapter 2:- General Introduction to Mutual Funds, which includes Concept, Structure, Working, Performance, AMC, AMIF, Benefits, Risk and Drawbacks. Chapter 3:- Company Profile. Chapter 4:- Research Design includes Problem, Objectives, Scope and Limitation of the Study. Chapter 5:- Methodology of the Study. Chapter 6:- It includes data Analysis and Interpretation. Chapter 7:- It includes Findings, Suggestions and Conclusions of the Study.
GENERAL INTRODUCTION MUTUAL FUNDS

INTRODUCTION Mutual Funds are for everyone. Around the world, millions of investors invest in Mutual offer. A mutual fund is type of investment vehicle where investors pool their money in order to allow each investor participate in a portfolio of securities. The individual investor doesn't actually own each security but instead, he owns shares of the mutual fund. The main benefit of a mutual fund is that it provides a way for the investor to achieve diversification in his investments without having to invest a lot of money. The first mutual fund was the Massachusetts Investors Trust introduced in 1924. At the end of its first year, the fund had 200 investors with $63,600 in assets. At the end of 1995, the fund grew to 73,500 investors with assets totaling $1.8 billion! Now there are over 7000 different mutual funds available to choose from. Different investment avenues are available to investors. Mutual funds also offer good investment opportunities to the investors. Like all investments, they also carry certain risks. The investors should compare the risks and expected yields after adjustment of tax on various instruments while taking investment decisions. The investors may seek advice from experts and consultants including agents and distributors of mutual funds schemes while making investment decisions. With an objective to make the investors aware of functioning of mutual funds, an attempt has been made to provide information in question-answer format that may help the investors in taking investment decisions. Funds because of their safety, ease of investing and the many advantages they
Over the past decade, American investors increasingly have turned to mutual funds to save for retirement and other financial goals. Mutual funds can offer the advantages of diversification and professional management. But, as with other investment choices, investing in mutual funds involves risk. And fees and taxes will diminish a fund's returns. It pays to understand both the upsides and the downsides of mutual fund investing and how to choose products that match your goals and tolerance for risk.
MUTUAL FUND CHART A mutual fund is a company that pools money from many investors and invests the money in stocks, bonds, short-term money-market instruments, other securities or assets, or some combination of these investments. The combined holdings the mutual fund owns are known as its portfolio. Each share represents an investor's proportionate ownership of the fund's holdings and the income those holdings generate.
A mutual fund, also called an investment company, is an investment vehicle which pools the money of many investors. The fund's manager uses the money collected to purchase securities such as stocks and bonds. The securities purchased are referred to as the fund's portfolio. A mutual fund's portfolio is managed by a professional money manager. The manager's business is to choose securities, which are best, suited for the portfolio. Be
aware, however, that even a professional money manager cannot insure against a loss of principal. When you give your money to a mutual fund, you receive shares of the fund in return. Each share represents an interest in the fund's portfolio. The value of your mutual fund shares will rise and fall depending upon the performance of the securities in the portfolio. Like a shareholder in a corporation, you will receive a proportional share of income and interest generated by the portfolio. You can receive these distributions either in cash or as additional shares of the fund. As a shareholder, you also have certain shareholder voting rights. CONCEPT OF MUTUAL FUNDS The concept of mutual funds in India dates back to the year 1963. The era between 1963 and 1987 marked the existence of only one mutual fund company in India with Rs. 67bn assets under management (AUM), by the end of its monopoly era, the Unit Trust of India (UTI). By the end of the 80s decade, few other mutual fund companies in India took their position in mutual fund market. The new entries of mutual fund companies in India were SBI Mutual Fund, Canbank Mutual Fund, Punjab National Bank Mutual Fund, Indian Bank Mutual Fund, Bank of Baroda Mutual Fund. MUTUAL FUND OPERATION FLOW CHART
Characteristics of mutual funds include the following:

Investors purchase mutual fund shares from the fund itself instead of from other investors on a secondary market, such as the New York Stock Exchange or NASDAQ Stock Market. The price that investors pay for mutual fund shares is the funds per share net asset value (NAV) plus any shareholder fees that the fund imposes at the time of purchase. Mutual fund shares are "redeemable," meaning investors can sell their shares back to the fund. Mutual funds generally create and sell new shares to accommodate new investors. In other words, they sell their shares on a continuous basis, although some funds stop selling when, for example, they become too large. The investment portfolios of mutual funds typically are managed by separate entities known as "investment advisers" that are registered with the SEC. The flow chart below describes broadly the working of a mutual fund: A Mutual Fund is a trust that pools the savings of a number of investors who share common financial goal; investments may be in shares, debt securities, money market securities or a combination of these. Those securities are professionally managed on behalf of the unit-holders, and each investor holds a pro-rata share of the portfolio i.e. entitled to any profits when the securities are sold, but subject to any losses in value as well. The income earned through these investments and the capital appreciation realized is 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. How does a Mutual fund work? Share Market Source: ET 500
MUTUAL FUNDS IN INDIA In India, the Mutual Fund Industry has been monopolized by the Unit Trust of India ever since 1963. Now, the commercial banks like the Sate Bank of India, Canara Bank, Indian Bank, Bank of India and the Punjab National Bank have entered in to the field. To add to the list are the LIC of India and the private sector banks and other financial institutions. These institutions have successfully launched a variety of schemes to meet the diverse needs of millions of small investors. The Unit Trust of India has introduced huge portfolio of schemes like Unit 64, Mastergain, and Mastershare etc. It is the countrys largest mutual fund company with over 25 million investors and a corpus exceeding Rs.55,000 crores, accounting for nearly 10% of the countrys stock market capitalization. The total corpus of the 13 other mutual funds in the country is less than Rs.15,000 crore. The SBI fund has a corpus of Rs.2925 crore deployed in its 16 schemes servicing over 2.5 million shareholders. On the whole, as on 30/9/95 there were nearly 25 mutual funds offering 80 different schemes and serving nearly 60 million investors. There are also mutual funds with investments sourced abroad called offshore funds. They have been established for attracting NRI investments to the capital market in India. The India Fund Unit scheme 1986 traded in the London Stock Exchange and the India Fund Unit Scheme 1988 traded in the New York Stock Exchange were floated by the Unit Trust of India and the India Magnum Fund was floated by the State Bank of India. As
preset, there are 16 different offshare Indian funds which have brought about $2.7billion to the Indian market. Besides the above, the LIC and the GIC have also entered into the market. Again many private organization have entered into the field. Most of the schemes have declared a dividend ranging between 13.5% and 17%. In most of the cases it is around 14% only. The recent trend in the mutual fund industry is to go for tie up arrangements with foreign collaborators. We find Tatas tying up with Kleinworth Benson; GIC with George Soros; Credit Capital with Lazard Brothers; Kothari with Pioneer; ICICI with JP Morgan; 20th Century with Morgan and so on. institution. The private sector which entered the arena in 1993 is concentrating on the primary market. It is so because, investments in new share fetch appreciation between 30 and 1500 per cent in a very short period. Promoters too give preferential treatment to mutual funds because it reduces their marketing cost. Again, they go for fund-participation in a venture even before it goes public. They see potential for immense appreciation in unlisted securities which intent to go to public with a short period of one year. In India, Mutual funds have been preferred as an avenue for investment by the household savers only from 1990s. the sales of units of UTI which were Rs.890 crores in 1985-86 rose to Rs.4100 crores in 1990-91 and Rs.9500 crores in 1993-94. the public sector mutual funds wee able to collect Rs 3800 crores I 1990-91. However, they could collect only R. 400 crores in 1993-94. the private sector mutual funds mobilized Rs.17 crores in 1993-94. On the whole, the mutual fund industry was able to mobilize approximately Rs. 1200 crores in 1993-94, which amounts to 8% of the gross domestic householding savings in the country. It is a good going indeed. However, the rate of growth is comparatively slow an not very satisfactory. Today mutual funds have started playing a positive role in the countrys saving revolution. The growth of mutual funds business can be witnessed from the following figure. Of course, these tie-ups would bring in new perspective, systems and technology and this very foreign tag may add credit to the
year 2000 2001 2002 2003 2004 13313 20208 35766 68414
US $ Millions Bought
US $ Millions Redeemed 9189 18224 34206 67502 118126
128302
Source: Financial Markets and Services By Gordon.Natarajan History Of Mutual Funds In India And Role Of SEBI In Mutual Funds Industry Unit Trust of India was the first mutual fund set up in India in the year 1963. In early 1990s, Government allowed public sector banks and institutions to set up mutual funds. In the year 1992, Securities and exchange Board of India (SEBI) Act was passed. The objectives of SEBI are to protect the interest of investors in securities and to promote the development of and to regulate the securities market. As far as mutual funds are concerned, SEBI formulates policies and regulates the mutual funds to protect the interest of the investors. SEBI notified regulations for the mutual funds in 1993. Thereafter, mutual funds sponsored by private sector entities were allowed to enter the capital market. The regulations were fully revised in 1996 and have
been amended thereafter from time to time. SEBI has also issued guidelines to the mutual funds from time to time to protect the interests of investors. All mutual funds whether promoted by public sector or private sector entities including those promoted by foreign entities are governed by the same set of Regulations. There is no distinction in regulatory requirements for these mutual funds and all are subject to monitoring and inspections by SEBI. The risks associated with the schemes launched by the mutual funds sponsored by these entities are of similar type.
There are four 4 phases according to the development of sector First Phase 1964-1987
1964 to 1987: - 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 cores of asset
Second Phase 1987-1993 (Entry of Public Sector Funds)
1987 marked the entry of non- UTI, public sector mutual funds set up by public sector banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC).
SBI Mutual Fund was the first non- UTI Mutual Fund established in June 1987 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 established its mutual fund in June 1989 while GIC had set up its mutual fund in December 1990.
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At the end of 1993, the mutual fund industry had assets under management of Rs.47,004 crores.
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.
Fourth Phase since February 2003
In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust of India with assets under management of Rs.29,835 crores as at the end of January 2003, representing broadly, the assets of US 64 scheme, assured return and certain other schemes.
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
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With the bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76,000 crores of assets under management 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.
MUTUAL FUND STRUCTURE
The structure consists of 1. Sponsor Sponsor is the person who acting alone or in combination with another body corporate establishes a mutual fund. Sponsor must contribute atleast 40% of the networth of the Investment Manged and meet the eligibility criteria prescribed under the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996.The Sponsor is not responsible or liable for any loss or shortfall resulting from the operation of the Schemes beyond the initial contribution made by it towards setting up of the Mutual Fund. 2. Trust
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The Mutual Fund is constituted as a trust in accordance with the provisions of the Indian Trusts Act, 1882 by the Sponsor. The trust deed is registered under the Indian Registration Act, 1908. 3. Trustee Trustee is usually a company (corporate body) or a Board of Trustees (body of individuals). The main responsibility of the Trustee is to safeguard the interest of the unit holders and inter alia ensure that the AMC functions in the interest of investors and in accordance with the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, the provisions of the Trust Deed and the Offer Documents of the respective Schemes. Atleast 2/3rd directors of the Trustee are independent directors who are not associated with the Sponsor in any manner. 4. Registrar and Transfer Agent The AMC if so authorised by the Trust Deed appoints the Registrar and Transfer Agent to the Mutual Fund. The Registrar processes the application form, redemption requests and dispatches account statements to the unit holders. The Registrar and Transfer agent also handles communications with investors and updates investor records. Asset Management Company (AMC) The AMC is appointed by the Trustee as the Investment Manager of the Mutual Fund. The AMC is required to be approved by the Securities and Exchange Board of India (SEBI) to act as an asset management company of the Mutual Fund. Atleast 50% of the directors of the AMC are independent directors who are not associated with the Sponsor in any manner. The AMC must have a net worth of atleast 10 crore at all times. Asset Management Companies in India The management of a client's investments by a financial services company, usually an investment bank. The company will invest on behalf of its clients and give them access to a wide range of traditional and alternative product offerings that would not be to the average investor. Some of the asset management companies 1. UTI Mutual Fund. 2. Reliance Mutual Fund.
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3. SBI Mutual Fund. 4. LIC Mutual Fund. 5. GIC Mutual Fund. 6. Tata Mutual Fund. 7. Birla Sunlife Mutual Fund. 8. Canbank Mutual Fund. 9. HDFC Mutual Fund. 10. Bank of Baroda Mutual Fund. 11. Chola Mutual Fund. 12. Benchmark Mutual Fund. 13. Kotak Mahindra Mutual Fund. 14. Sahara Mutual Fund. 15. Sundram Mutual Fund Assets under management An asset under management is the amount of clients' funds that a financial sector company such as a fund manager is responsible for managing. This is a measure of the size of the business. It is often used to value fund managers, particularly when assessing takeovers, or the possibility of takeovers. The value of a fund manager is also affected by other factors, most importantly the type of funds as this affects the level of fees. Active funds charge far more than index trackers (charges in both cases are usually a percentage of the assets managed). Hedge funds have more complex fee structures and it is usual for them to charge a (high) percentage of any gains. Changes in assets under management can reflect both inflows and outflows of funds (i.e. clients investing or withdrawing investments) and gains and losses in the value of the assets. In order to understand underlying trends it is important to break down the changes in order to see whether the changes are due to gains or loss of clients funds (fund inflows and outflows) or investment gains and losses. GROWTH IN ASSETS UNDER MANAGEMENT PHASES GROWTH PHASES GROWTH
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(in crores) I (Mar 1965) II (Mar 1987) III(Mar 1993) IV(Mar 2003) 25 IV(Mar 2004) 4,564 IV(Mar 2005) 47,000 IV(Mar 2006) 79,464 IV(Mar 2007)
(in crores) 1,39,616 1,49,554 2,31,862 3,58,377
Fund Classification Here are some of the general categories of mutual funds. Bond Funds:- Bond mutual funds are pooled amounts of money invested in bonds. Bonds are IOUs, or debt, issued by companies or by governments. A purchaser of a bond is lending money to the issuer, and will usually collect some regular interest payments until the money is returned. Usually the amount of interest paid (the coupon) is fixed at a set percentage of the amount invested; thus, bonds are called "fixed-income" investments. Balanced Funds:- Balanced funds mix some stocks and some bonds. A typical balanced fund might contain about 50-65% stocks and hold the rest of shareholder's money in bonds. It is important to know the distribution of stocks to
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bonds in a specific balanced fund to understand the risks and rewards inherent in that fund. General Equity (Stock) Funds:- Stock or equity mutual funds are pooled amounts of money that are invested in stocks. Stocks represent part ownership, or equity, in corporations, and the goal of stock ownership is to see the value of the companies increase over time. Stocks are often categorized by their market capitalization (or caps), and can be classified in three basic sizes: small, medium, and large. International/Global Funds:- International funds invest in companies whose homes are beyond the fair shores of this great nation. Global funds invest in both U.S. and international-based companies. In general, international and global funds are more volatile than domestic funds. Sector Funds:- Sector funds invest in one particular sector of the economy: technology; financial, computers, the Internet, llamas. Sector funds can be extremely volatile, since the broad market will find certain sectors very attractive and very unattractive - often in rapid succession.
Performance of Mutual Funds in India

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. From Rs. 67bn. the Assets 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
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falling in the year 1992. Those days, the market regulations did not allow portfolio shifts into alternative investments. There were rather no choices apart from holding the cash or to further continue investing in shares. 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 donts of mutual funds. The major players in the Indian Mutual Fund Industry are: ABN AMRO Mutual Fund:- It is (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 organisation 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 AUM of Rs. 10,000 crores.
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BANK OF BARODA Mutual Fund (BOB 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 Asset Management Company Limited is the AMC 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 sponsorers namely Housing Development Finance Corporation Limited and Standard Life Investments Limited.
HSBC Mutual Fund:- HSBC Mutual Fund was setup on May 27, 2002 with HSBC Securities and Capital Markets (India) Private Limited as the sponsor. Board of Trustees, HSBC Mutual Fund acts as the Trustee Company of HSBC Mutual Fund. 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 13th of October, 1993 with two sponsorers, Prudential Plc. and ICICI Ltd. The Trustee Company formed is Prudential ICICI Trust Ltd. and the AMC is Prudential ICICI Asset Management Company Limited Incorporated on 22nd of June, 1993. SAHARA Mutual Fund: - Sahara Mutual Fund was set up on July 18, 1996 with Sahara India Financial Corporation Ltd. as the sponsor. Sahara Asset 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 cr. approximately. Today it is the largest Bank sponsored Mutual Fund in
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India. They have already launched 35 Schemes out of which 15 have already yielded 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 (TMF) is a Trust under the Indian Trust Act, 1882. The sponsorers for Tata Mutual Fund are Tata Sons Ltd., and Tata Investment Corporation Ltd. The investment manager is Tata Asset Management Limited and its Tata Trustee Company Pvt. Limited. Tata Asset Management Limited is one of the fastest in the country with more than Rs. 7,703 crores (as on April 30, 2005) of AUM. KOTAK MAHINDRA Mutual Fund:- Kotak Mahindra Asset Management Company (KMAMC) is a subsidiary of KMBL. It is presently having more than 1,99,818 investors in its various schemes. KMAMC started 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 dedicated guilt scheme investing only in government securities. AXIS (Unit Trust of India) Mutual Fund: - UTI Asset Management Company Private Limited, established in Jan 14, 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.20000 Crore. The sponsorers of UTI Mutual Fund are Bank of Baroda (BOB), Punjab National Bank (PNB), State Bank of India (SBI), and Life Insurance Corporation of India (LIC). The schemes of UTI Mutual Fund are Liquid Funds, Income Funds, Asset Management Funds, Index Funds, Equity Funds and Balance Funds. RELIANCE Mutual Fund: - Reliance Mutual Fund (RMF) 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 Capital 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 set up on March 13, 2000 sponsored by Standard Chartered Bank. The Trustee is Standard
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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 INDIA Mutual Fund:- The group, Franklin Templeton Investments is a California (USA) based company with a global AUM of US$ 409.2 bn. (as of April 30, 2005). It is one of the largest financial services groups 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 India:- Morgan Stanley is a worldwide financial services company and its leading in the market in securities, investment management and credit services. Morgan Stanley Investment Management (MISM) was established in the year 1975. It provides customized asset management services and products to governments, corporations, pension funds and non-profit organizations. Its services are also extended to high net worth individuals and retail investors. In India it is known as Morgan Stanley Investment Management Private Limited (MSIM India) and its AMC is Morgan Stanley Mutual Fund (MSMF). This is the first close end diversified equity scheme serving the needs of Indian retail investors focusing on a long-term capital appreciation. ESCORTS Mutual Fund: - Escorts Mutual Fund was setup on April 15, 1996 with Escorts Finance Limited as its sponsor. The Trustee Company is Escorts Investment Trust Limited. Its AMC was incorporated on December 1, 1995 with the name Escorts Asset Management Limited. ALLIANCE CAPITAL Mutual Fund:- Alliance Capital Mutual Fund was setup on December 30, 1994 with Alliance Capital Management Corp. of Delaware (USA) as sponsored. The Trustee is ACAM Trust Company Pvt. Ltd. and AMC, the Alliance Capital Asset Management India (Pvt) Ltd. with the corporate office in Mumbai.
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BENCHMARK Mutual Fund:- Benchmark Mutual Fund was setup on June 12, 2001 with Niche Financial Services Pvt. Ltd. as the sponsorers and Benchmark Trustee Company Pvt. Ltd. as the Trustee Company. Incorporated on October 16, 2000 and headquartered in Mumbai, Benchmark Asset Management Company Pvt. Ltd. is the AMC. CANBANK Mutual Fund:- Canbank Mutual Fund was setup on December 19, 1987 with Canara Bank acting as the sponsor. Canbank Investment Management Services 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 of India set up LIC Mutual Fund on 19th June 1989. It contributed Rs. 2 Crores 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 LIC Mutual Fund. GIC Mutual Fund:- GIC Mutual Fund, sponsored by General Insurance Corporation of India (GIC), a Government of India undertaking and the four Public Sector General Insurance Companies, viz. National Insurance Co. Ltd (NIC), The New India Assurance Co. Ltd. (NIA), The Oriental Insurance Co. Ltd (OIC) and United India Insurance Co. Ltd. (UII) and is constituted as a Trust in accordance with the provisions of the Indian Trusts Act, 1882. Some facts for the growth of mutual funds in India :

100% growth in the last 6 years. Number of foreign AMC's are in the que to enter the Indian markets like Fidelity Investments, US based, with over US$1trillion assets under management worldwide.
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Our saving rate is over 23%, highest in the world. Only channelizing these savings in mutual funds sector is required. We have approximately 29 mutual funds which is much less than US having more than 800. There is a big scope for expansion. 'B' and 'C' class cities are growing rapidly. Today most of the mutual funds are concentrating on the 'A' class cities. Soon they will find scope in the growing cities. Mutual fund can penetrate rurals like the Indian insurance industry with simple and limited products. SEBI allowing the MF's to launch commodity mutual funds. Emphasis on better corporate governance. Trying to curb the late trading practices. Introduction of Financial Planners who can provide need based advice
TYPES OF MUTUAL FUND SCHEMES :
Investment Objective Schemes can be classified by way of their stated investment objective such as Growth Fund, Balanced Fund, Income Fund etc Equity Oriented Schemes These schemes, also commonly called Growth Schemes, seek to invest a majority of their funds in equities and a small portion in money market instruments. Such schemes have the potential to deliver superior returns over the long term. However, because they
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invest in equities, these schemes are exposed to fluctuations in value especially in the short term. Equity schemes are hence not suitable for investors seeking regular income or needing to use their investments in the short-term. They are ideal for investors who have a long-term investment horizon. The NAV prices of equity fund fluctuates with market value of the underlying stock which are influenced by external factors such as social, political as well as economic. HDFC Growth Fund, HDFC Tax Plan 2000 and HDFC Index Fund are examples of equity schemes.
General Purpose: The investment objectives of general-purpose equity schemes do not restrict them to invest in specific industries or sectors. They thus have a diversified portfolio of companies across a large spectrum of industries. While they are exposed to equity price risks, diversified general-purpose equity funds seek to reduce the sector or stock specific risks through diversification. They mainly have market risk exposure. HDFC Growth Fund is a general-purpose equity scheme. Sector Specific: These schemes restrict their investing to one or more pre-defined sectors, e.g. technology sector. Since they depend upon the performance of select sectors only, these
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schemes are inherently more risky than general-purpose schemes. They are suited for informed investors who wish to take a view and risk on the concerned sector. Special Schemes : Index schemes The primary purpose of an Index is to serve as a measure of the performance of the market as a whole, or a specific sector of the market. An Index also serves as a relevant benchmark to evaluate the performance of mutual funds. Some investors are interested in investing in the market in general rather than investing in any specific fund. Such investors are happy to receive the returns posted by the markets. As it is not practical to invest in each and every stock in the market in proportion to its size, these investors are comfortable investing in a fund that they believe is a good representative of the entire market. Index Funds are launched and managed for such investors. An example to such a fund is the HDFC Index Fund Tax Saving schemes : Investors (individuals and Hindu Undivided Families (HUFs)) are being encouraged to invest in equity markets through Equity Linked Savings Scheme (ELSS) by offering them a tax rebate. Units purchased cannot be assigned / transferred/ pledged / redeemed / switched out until completion of 3 years from the date of allotment of the respective Units. The Scheme is subject to Securities & Exchange Board of India (Mutual Funds) Regulations, 1996 and the notifications issued by the Ministry of Finance (Department of Economic Affairs), Government of India regarding ELSS. Subject to such conditions and limitations, as prescribed under Section 88 of the Incometax Act, 1961, subscriptions to the Units not exceeding Rs.10, 000 would be eligible to a deduction, from income tax, of an amount equal to 20% of the amount subscribed. HDFC Tax Plan 2000 is such a fund. Debt Based Schemes These schemes, also commonly called Income Schemes, invest in debt securities such as corporate bonds, debentures and government securities. The prices of these schemes tend to be more stable compared with equity schemes and most of the returns to the investors are generated through dividends or steady capital appreciation. These schemes
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are ideal for conservative investors or those not in a position to take higher equity risks, such as retired individuals. However, as compared to the money market schemes they do have a higher price fluctuation risk and compared to a Gilt fund they have a higher credit risk.
Income Schemes:
These schemes invest in money markets, bonds and debentures of corporates with medium and long-term maturities. These schemes primarily target current income instead of capital appreciation. They therefore distribute a substantial part of their distributable surplus to the investor by way of dividend distribution. Such schemes usually declare quarterly dividends and are suitable for conservative investors who have medium to long term investment horizon and are looking for regular income through dividend or steady capital appreciation. HDFC Income Fund, HDFC Short Term Plan and HDFC Fixed Investment Plans are examples of bond schemes. Liquid Income Schemes: Similar to the Income scheme but with a shorter maturity than Income schemes. An example of this scheme is the HDFC Liquid Fund.
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Money Market Schemes:
These schemes invest in short term instruments such as commercial paper (CP), certificates of deposit (CD), treasury bills (T-Bill) and overnight money (Call). The schemes are the least volatile of all the types of schemes because of their investments in money market instrument with short-term maturities. These schemes have become popular with institutional investors and high networth individuals having short-term surplus funds Gilt Funds : This scheme primarily invests in Government Debt. Hence the investor usually does not have to worry about credit risk since Government Debt is generally credit risk free. HDFC Gilt Fund is an example of such a scheme. Hybrid Schemes :
These schemes are commonly known as balanced schemes. These schemes invest in both equities as well as debt. By investing in a mix of this nature, balanced schemes seek to attain the objective of income and moderate capital appreciation and are ideal for investors with a conservative, long-term orientation. HDFC Balanced Fund and HDFC Childrens Gift Fund are examples of hybrid schemes.
Constitution Schemes can be classified as Closed-ended or Open-ended depending upon whether they give the investor the option to redeem at any time (open-ended) or whether the investor has to wait till maturity of the scheme. Open ended Schemes:
The units offered by these schemes are available for sale and repurchase on any business day at NAV based prices. Hence, the unit capital of the schemes keeps changing each day. Such schemes thus offer very high liquidity to investors and are becoming increasingly popular in India. Please note that an open-ended fund is NOT obliged to keep selling/issuing new units at all times, and may stop issuing further subscription to new investors. On the other hand, an open-ended fund rarely denies to its investor the facility to redeem existing units.
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Closed ended Schemes:
The unit capital of a close-ended product is fixed as it makes a one-time sale of fixed number of units. These schemes are launched with an initial public offer (IPO) with a stated maturity period after which the units are fully redeemed at NAV linked prices. In the interim, investors can buy or sell units on the stock exchanges where they are listed. Unlike open-ended schemes, the unit capital in closed-ended schemes usually remains unchanged. After an initial closed period, the scheme may offer direct repurchase facility to the investors. Closed-ended schemes are usually more illiquid as compared to open-ended schemes and hence trade at a discount to the NAV. This discount tends towards the NAV closer to the maturity date of the scheme. Interval Schemes: These schemes combine the features of open-ended and closed-ended schemes. They may be traded on the stock exchange or may be open for sale or redemption during pre-determined intervals at NAV based prices. Association of Mutual Funds in India (AMFI) With the increase in mutual fund players in India, a need for mutual fund association in India was generated to function as a non-profit organisation. Association of Mutual Funds in India (AMFI) was incorporated on 22nd August, 1995.
AMFI is an apex body of all Asset Management Companies (AMC) which has been registered with SEBI. Till date all the AMCs are that have launched mutual fund schemes are its members. It functions under the supervision and guidelines of its Board of Directors. Association of Mutual Funds India has brought down the Indian Mutual Fund Industry to a professional and healthy market with ethical lines enhancing and maintaining standards. It follows the principle of both protecting and promoting the interests of mutual funds as well as their unit holders. The objectives of Association of Mutual Funds in India The Association of Mutual Funds of India works with 30 registered AMCs of the
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country. It has certain defined objectives which juxtaposes the guidelines of its Board of Directors. The objectives are as follows:
This mutual fund association of India maintains a high professional and ethical standards in all areas of operation of the industry. It also recommends and promotes the top class business practices and code of conduct which is followed by members and related people engaged in the activities of mutual fund and asset management. The agencies who are by any means connected or involved in the field of capital markets and financial services also involved in this code of conduct of the association.
AMFI interacts with SEBI and works according to SEBIs guidelines in the mutual fund industry. Association of Mutual Fund of India does represent the Government of India, the Reserve Bank of India and other related bodies on matters relating to the Mutual Fund Industry.
It develops a team of well qualified and trained Agent distributors. It implements a programme of training and certification for all intermediaries and other engaged in the mutual fund industry.
AMFI undertakes all India awareness programme for investors in order to promote proper understanding of the concept and working of mutual funds. At last but not the least association of mutual fund of India also disseminate information on Mutual Fund Industry and undertakes studies and research either directly or in association with other bodies.
RISKS Mutual Funds are not free from risks. It is so because basically the Mutual Funds also invest their funds in the stock market on shares which are volatile in nature and are not risk free. Hence, the following risks are inherent in their dealings.
1)
Risks: certain
Market In risks
general, there are
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associated with every kind of investment on shares. They are called market risks. These market risks can be reduced but cannot be completely eliminated even by a good investment management. The prices of shares are subject to wide price fluctuations depending upon market conditions over which nobody has a control. Moreover, every economy has to pass through a cycle-Boom, Recession, Slump and Recovery. The phase of the business cycle affects the market conditions to a larger extent.
2) Scheme Risks: - There are certain risks inherent in the scheme itself. It all depends
upon the nature of the scheme. For instance, in a pure growth scheme, risks are greater. It is obvious because if one expects more return as in the case of a growth scheme, one has to take more risks.
3) Investment Risk: - whether the Mutual Fund makes money in shares or loses
depends upon the investment expertise of the Asset Management Company. If the investment advice goes wrong, the Fund has to suffer a lot. The investment expertise of various funds are different and it is reflected on the returns which they offer to investors.
4) Business Risk: - The corpus of a Mutual Fund might have been invested in a
companys shares. If the business of that company suffers any set back, it cannot declare any dividend. It may even go to the extent of winding up its business. Though the mutual fund can withstand such a risk, its income paying capacity is affected.
5) Political Risks: - Successive Governments bring with them fancy new economic
ideologies and policies. It is often said that many economic decisions are politically motivated. Changes in Government bring in the risk of uncertainty which every player in the financial service industry has to face. So mutual funds are no exception to it. Source: Financial Markets and Services By Gordon.Natarajan Benefits of Mutual Funds
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There are numerous benefits of investing in mutual funds and one of the key reasons for its phenomenal success in the developed markets like US and UK is the range of benefits they offer, which are unmatched by most other investment avenues. We have explained the key benefits in this section. The benefits have been broadly split into universal benefits, applicable to all schemes, and benefits applicable specifically to openended schemes. Universal benefits: Affordability: A mutual fund invests in a portfolio of assets, i.e. bonds, shares, etc. depending upon the investment objective of the scheme. An investor can buy in to a portfolio of equities, which would otherwise be extremely expensive. Each unit holder thus gets an exposure to such portfolios with an investment as modest as Rs.500/-. This amount today would get you less than quarter of an Infosys share! Thus it would be affordable for an investor to build a portfolio of investments through a mutual fund rather than investing directly in the stock market. Diversification: The nuclear weapon in your arsenal for your fight against Risk. It simply means that you must spread your investment across different securities (stocks, bonds, money market instruments, real estate, fixed deposits etc.) and different sectors (auto, textile, information technology etc.). This kind of a diversification may add to the stability of your returns, for example during one period of time equities might underperform but bonds and money market instruments might do well enough to offset the effect of a slump in the equity markets. Similarly the information technology sector might be faring poorly but the auto and textile sectors might do well and may protect your principal investment as well as help you meet your return objectives.
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Variety: Mutual funds offer a tremendous variety of schemes. This variety is beneficial in two ways: first, it offers different types of schemes to investors with different needs and risk appetites; secondly, it offers an opportunity to an investor to invest sums across a variety of schemes, both debt and equity. For example, an investor can invest his money in a Growth Fund (equity scheme) and Income Fund (debt scheme) depending on his risk appetite and thus create a balanced portfolio easily or simply just buy a Balanced Scheme. Professional Management: Qualified investment professionals who seek to maximise returns and minimize risk monitor investor's money. When you buy in to a mutual fund, you are handing your money to an investment professional who has experience in making investment decisions. It is the Fund Manager's job to (a) find the best securities for the fund, given the fund's stated investment objectives; and (b) keep track of investments and changes in market conditions and adjust the mix of the portfolio, as and when required. Tax Benefits: Any income distributed after March 31, 2002 will be subject to tax in the assessment of all Unit holders. However, as a measure of concession to Unit holders of open-ended equity-oriented funds, income distributions for the year ending March 31, 2003, will be taxed at a concessional rate of 10.5%. In case of Individuals and Hindu Undivided Families a deduction upto Rs. 9,000 from the Total Income will be admissible in respect of income from investments specified in Section 80L, including income from Units of the Mutual Fund. Units of the schemes are not subject to Wealth-Tax and Gift-Tax. Regulations: Securities Exchange Board of India (SEBI), the mutual funds regulator has clearly defined rules, which govern mutual funds. These rules relate to the formation, administration and management of mutual funds and also prescribe disclosure and accounting requirements. Such a high level of regulation seeks to protect the interest of investors. Drawbacks of Mutual Funds: Mutual funds have their drawbacks and may not be for everyone:
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No Guarantees: No investment is risk free. If the entire stock market declines in
value, the value of mutual fund shares will go down as well, no matter how balanced the portfolio. Investors encounter fewer risks when they invest in mutual funds than when they buy and sell stocks on their own. However, anyone who invests through a mutual fund runs the risk of losing money.
Fees and commissions: All funds charge administrative fees to cover their day-to-
day expenses. Some funds also charge sales commissions or "loads" to compensate brokers, financial consultants, or financial planners. Even if you don't use a broker or other financial adviser, you will pay a sales commission if you buy shares in a Load Fund.
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.
Management risk: When you invest in a mutual fund, you depend on the fund's
manager to make the right decisions regarding the fund's portfolio. If the manager does not perform as well as you had hoped, you might not make as much money on your investment as you expected. Of course, if you invest in Index Funds, you forego management risk, because these funds do not employ managers.
COMPANY PROFILE
Sharekhan, Indias leading stockbroker is the retail arm of SSKI. Sharekhan is an equity focused organization tracing its lineage to SSKI, a veteran equities solutions company with over 8 decades of experience in the Indian Stock markets. Sharekhan runs Indias largest chain of shares shops with around 250 outlets in 113 cities and a presence on internet through www.sharekhan.com, Indias premier online trading destination; they
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reach out to customers like no one else. Sharekhan is investors Friendly Neighbourhood Stock Broker. ShareKhan is an online trading facility founded in 1999-2000 with a focus on equities, derivatives and commodities brokerage execution on the National Stock Exchange of India Ltd. (NSE), Bombay Stock Exchange Ltd. (BSE), National Commodity and Derivatives Exchange India (NCDEX) and Multi Commodity Exchange of India Ltd. (MCX). Sharekhan offers investors trade execution facilities on the BSE and the NSE, for cash as well as derivatives, depository services and most importantly, investment advice tempered by 80 years of research and broking experience. To ensure that investors trading experience with Sharekhan is fast secure and hassle free, it offers a suite of products and services, providing investor with a multi-channel access to the stock markets. Sharekhan is the founder member of two major commodity exchanges, Multy Commodity Exchange of India (MCX) and National Commodity and Derivative Exchange(NCDEX) and offering trading facilities for the commodities. Sharekhan Ltd provides trade execution services through multiple channels - an Internet platform, telephone and retail outlets and is present in 280 cities through a network of 640 locations. SSKI (S.S. Kantilal Ishwarlal Securities Pvt. Ltd.) SSKI Group also comprises Institutional broking and Corporate Finance. While the Institutional broking division caters to the largest domestic and foreign institutional investors, the corporate finance division focuses on the niche areas such as infrastructure, telecom and media. SSKI holds a sizeable portion of the market in each of these segments. As the forerunner of investment research in the Indian Market, SSKI provide the best research coverage amongst broking houses in India. Their research team is rated as one of the best in the country, voted four time as the top domestic brokerage house by Asia money Survey. Services providing by Sharekhan
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Trade anywhere However, if investors prefer the convenience of trading from wherever they are, investors can get a classic trading account from sharekhan and enjoy the freedom that comes with it. Investors can place orders even after the trading hours, and the orders are queued up to be executed as soon as the market opens. Sharekhan.com, the winner of several prestigious awards, has been the most preferred destination for online trading ever since its launch. Dial-n-trade Dial-n-trade is an exclusive service available to all sharekhan customers for trading in shares via the Telephone.
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Online trading Online trading product that brings the power of your brokers terminal to your PC. It provides on a single screen streaming quotes, online tic-by-tic charts, instant order placement and trade confirmations cash market. It is ideal for active traders and jobbers who transact frequently during days trading session to capitalize on intra-day price movements. Depository services Sharekhan offers investors the convenience of a broker-DP. It will help investors to meet their pay-in obligations on time thereby reducing the possibility of auctions. Sharekhan understand investors need for flexibility thats why they accept late instructions without any extra charge. They execute the instruction immediately on receiving it. Investors can view their updated account statement on Internet. Depository services offer demat services to individual and corporate investors. They have a team of professionals and the latest technological expertise dedicated exclusively to their demat department. Investors can avail of Demat, Repurchase, Pledge, Transmission facilities at every branch and business partners outlets. Sharekhans outlets offers the following Services: online BSE and NSE executions (through BOLT & NEAT terminals) Free access to investment advice from Sharekhan's Research team Sharekhan Value Line (a monthly publication with reviews of recommendations, stocks to watch out for etc) Daily research reports and market review (High Noon & Eagle Eye) Pre-market Report (Morning Cuppa) Daily trading calls based on Technical Analysis Cool trading products (Daring Derivatives and Market Strategy) Personalised Advice Live Market Information Depository Services: Demat & Remat Transactions Derivatives Trading (Futures and Options)
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Commodities Trading
PRODUCTS IN SHAREKHAN Speed trade Sharekhan presents Speed Trade, internet based trading software that allows investors to Buy/sell shares in instant, allowing investors to capitalize on intra-day price movements. Speed Trade is a state of the art web trading product ideal for active traders and jobbers who transact frequently during a says trading session to capitalize on intra-day price movements. Speed trade gives active traders and jobbers the edge with real time access to the market. Speed trade Attractions: Online streaming quotes. Sell against receivables facility. Advanced charting tools. Simple order entry at the click of a mouse. Lightning fast order an trade execution and confirmation.
Speed Trade Plus: Speed Trade Plus has all the benefits that Speed Trade is having, with an additional power investors can trade Derivatives. Classic Account This account allows the client to trade through sharekhan website and is suitable for the retail investor who is risk averse and hence prefer to invest in stocks or who does not trade too frequently. This trading account can be linked with the bank account like HDFC Bank, Citi Bank, UTI Bank and IDBI Bank. Which facilitate in online transfer of funds.
STATEMENT OF THE PROBLEM

36
Evaluation
of Mutual Fund Equity Schemes with their Net Asset Value and
Portfolio of different Asset Management Companies. OBJECTIVES To study Mutual Fund Industry in India. To compare the performance of different Mutual Funds To study the different schemes provided by the esteemed organization. To study the NAV(Net Asset Value) of different leading Companies in India. To compare the Equity Funds with the SENSEX, NIFTY and its Benchmark. It also attempts to find out the working of MF,, organization of MF, types of MF, drawbacks, major players advantages(benefit), disadvantage and about Sharekhan Ltd. SCOPE OF THE STUDY The study is mainly concerned about the evaluation various Mutual Funds on the basis of comparing NAV with SENSEX, NIFTY, and Benchmarak. In this study, the researcher has limited funds to the few well performed funds in the Diversified Equity Schemes which are dealt in the Sharekhan Ltd., LIMITATIONS OF THE STUDY Only 8 equity funds of different companies were compared and analysed. The study was limited to the extent of just evaluation of Mutual Fund equity schemes. The study covers only the open ended fund The study does not cover the other schemes. NEED FOR THE STUDY The evaluation of Mutual Fund equity schemes of different leading companies is useful to know the performance of schemes and it helps the investors to invest in Mutual Fund schemes either equity, bebt or balanced. The performance of different schemes however helps the prospective investors to choose the best schemes objectives. which suit its
37
METHODOLOGY OF THE STUDY Research Design: Relevant data were collected from the local institutions and analysis of the data was done keeping the objectives as the basis. Analysis part of the project includes both theoretical aspects and practical aspects. Practical aspects pertain to current trends in the stock market. Location of the Study: the study was conducted at in the Mutual Fund distribution centre i.e. Sharekhan Ltd., R.T Nagar, Bengaluru-32. Duration of the Study: The duration of the study is 6 weeks. DATA COLLECTION: The study is based on collection of both primary data and secondary data. Primary data is collected through the direct personnel interview with the Branch Manager and workers. Secondary data is collected from Brochure, Journals, Fact Sheet, News Papers and Websites.
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DIFFERENT FUNDS RETURN (NAV)
COMPANY NAME ABNAMRO EQUITY FUND (DIV) BIRLA EQUTIY FUND (GTH) HDFC EQUITY FUND (DIV) RELLANCE EQUITY FUND (BONUS) SAHARA MIDCAP FUND (GTH) SBI BLUE CHIP FUND (DIV) TATA EQUITY MGT FUND (GROWTH) UTI GROWTH AND VALUE FUND 2005 16.25 9.89 98.85 8.94 14.50 18.69 7.23 19.00
Year 2006 2007 2008 19.74 27.52 36.92 10.21 11.10 14.18 107.1 147.2 189.91 9 10.15 15.22 25.54 10.51 17.55 9 11.77 18.18 36.63 11.34 20.23 15.53 26.57 45.67 12.55 16.14
ABN AMRO Equity Fund-Dividend Objective : To generate regular returns through investment primarily in Debt and Money Market Instruments. The secondary objective of the Scheme is to generate long-term capital appreciation by investing a portion of the Scheme's assets in equity and equity related securities. Structure: Open Ended Income Scheme. Monthly Income is not assured and is subject to the availability of distributable surplus. Inception Date: September 03, 2004 Plans and Options under the Plan: Growth Option, Monthly Dividend Option and Quarterly Dividend Option. Both the Dividend Options offer Dividend Payout and Dividend Re-investment facilities. Face Value (Rs/Unit): Rs. 10 Minimum Investment: Growth Option: A minimum of Rs. 5,000 per application and in multiples of Re. 1 thereafter. Monthly Dividend Option and Quarterly Dividend Option: A minimum of Rs. 20,000 per application and in multiples of Re. 1 thereafter. Entry Load: Nil. Exit Load: Nil. Scheme Code AB002 Scheme Name ABN AMRO Date Jan 30, NAV (Rs.) 36.92 Performance % as on Jan 30, 2008 91 Days 182 Days 1 Year -8.96 15.94 32.88 39
Equity Fund Dividend
2008
PORTFOLIO AS ON DEC 31, 2007
40
EQUITY* Company Name Instrument No. of Shares Reliance Industries Ltd Reliance Energy Ltd JaiPrakash Associates Ltd. Reliance Capital Ltd Indiabulls Financial Services Mundra Port & Special Economic Zone Ltd NTPC Limited. Grasim Industries Ltd UTI Bank Ltd Aditya Birla Nuvo Limited. Gas Authority Of India Ltd Asian Electronics Ltd Jindal Steel and Power Ltd. State Bank of India Northgate Technologies Ltd. Oil & Natural Gas Corpn Ltd Reliance Communication Ventures Ltd. Alstom Projects India Ltd. Indiabulls Real Estate Cairn India Ltd. Infrastructure Development Finance company Indian Oil Corporation Ltd Bharat Petroleum Corporation Ltd Mahindra & Mahindra Ltd Television Eighteen India Ltd Kirloskar Electric Company Ltd Equity Equity Equity Equity Equity 60000 90001 54000 84001 120000 4.77 4.71 4.65 4.50 4.26 2.11 2.08 2.06 1.99 1.88 41 Equity Equity Equity Equity 60000 68470 216000 210002 6.04 6.02 5.56 4.80 2.67 2.66 2.45 2.12 Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity 300000 19500 72249 33000 120000 134999 4200 27000 105630 51000 80999 .53 7.14 6.99 6.63 6.52 6.47 6.47 6.40 6.34 6.31 6.05 3.32 3.15 3.09 2.93 2.88 2.86 2.86 2.83 2.8 2.79 2.67 Equity Equity Equity Equity Equity Equity 45000 43500 210001 33000 78000 60000 Market Value (Rs. in crores) 12.97 9.29 8.97 8.54 7.64 7.61 % of Net Assets 5.73 4.1 3.96 3.77 3.37 3.36
YEAR 2005 2006 2007 2008
Fund Return 16.25 19.74 27.52 36.92
Sensex 89.124 77.32 42.45 105.25
Nifty 91.06 81.6 36.44 58.95
Benchmark(BSE30) 94.48 93.29 33.9 66.63
Interpretation: The table and graph shows that ABN AMRO Equity Fund has performed well during the four year. The fund is giving constant growth when compared to Sensex, Nifty and Benchmark.
Birla Equity Plan-Growth Objective : To achieve long term growth of capital at relatively moderate levels of risk through a diversified research based investment approach. Structure : Open Ended Equity Scheme Inception Date : February 24, 1995
42
Plans and Options under the Plan : Dividend and Growth Option. Face Value (Rs/Unit): Rs. 10 Minimum Investment : Rs.5000. Entry Load : 2.25% for amount < 5 crores. Nil, for amount > 5 crore. Exit Load : Nil. Scheme Code BM180 Scheme Name Birla Equity Plan - Growth Date Jan 30, 2008 NAV (Rs.) 14.1 8 Performance % as on Jan 30, 2008 91 Days 182 Days 1 Year -5.66 10.44 25.19
PORTFOLIO AS ON DEC 31, 2007 Company Name Instrument EQUITY No. of Shares ABB Ltd TRF Ltd Gammon India Ltd Welspun Gujarat Stahl Rohren Ltd Goodyear India Ltd Reliance Communication Ventures Ltd. Aditya Birla Nuvo Limited. Infrastructure Development Finance company Kirloskar Oil Engines Ltd Arvind Mills Ltd Maruti Udyog Ltd Automobile Corporation Of Goa Ltd Tata Power Company Ltd Bharat Bijlee Ltd Equity Equity Equity Equity Equity Equity 330387 626346 56745 136447 35021 13929 5.72 5.67 5.64 5.49 5.15 4.98 2.92 2.9 2.88 2.81 2.63 2.55 43 Equity Equity 30124 259886 6.05 5.94 3.09 3.03 Equity Equity Equity Equity Equity Equity 68765 48632 121290 150049 334022 82511 Market Value (Rs. in crores) 10.40 8.93 7.23 6.85 6.20 6.16 % of Net Assets 5.31 4.56 3.69 3.5 3.17 3.15
Sterlite Industries (India) Ltd Bharti Airtel Ltd Zee Entertainment Enterprises Ltd Tata Chemicals Ltd Mundra Port & Special Economic Zone Ltd Indian Bank Mphasis BFL Ltd. Dishman Pharmaceuticals & Chemicals Ruchi Soya Industries Ltd NTPC Limited. Indian Overseas Bank Federal Bank Ltd Taj GVK Hotels Asian Hotels Ltd Gujarat Gas Company Ltd Sesa Goa Ltd Sundaram Clayton Ltd Pantaloon Retail (India) Ltd. Reliance Industries Ltd HDFC Bank Ltd Tata Steel Ltd. Grasim Industries Ltd Tata Tea Ltd Bharat Earth Movers Ltd JMC Projects (India) Ltd State Bank of India Bharat Petroleum Corporation Ltd Balaji Telefilms Ltd Power Finance Corporation Ltd Sun Pharmaceuticals Industries Ltd Satyam Computer
Equity Equity Equity Equity Equity Equity Equity Equity
40000 39926 120459 94897 30719 52279 126142 104870
4.14 3.98 3.94 3.92 3.90 3.89 3.89 3.88
2.11 2.03 2.01 2 1.99 1.99 1.99 1.98
Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity
240036 139526 188500 100089 182405 38726 90879 7993 34741 35148 9994 16488 29981 7478 29940 15112 47606 9999 44991 67553 81642 16873 44716
3.78 3.50 3.37 3.36 3.24 3.20 3.11 3.05 3.00 2.92 2.88 2.85 2.80 2.74 2.72 2.55 2.38 2.37 2.36 2.34 2.15 2.03 2.02
1.93 1.79 1.72 1.72 1.66 1.63 1.59 1.56 1.53 1.49 1.47 1.46 1.43 1.4 1.39 1.3 1.22 1.21 1.2 1.2 1.1 1.04 1.03 44
Services Ltd Tata Motors Ltd Pfizer Ltd Federal Bank Ltd Britannia Industries Ltd
Equity Equity Rights Equity
25007 20556 830
1.86 1.66 0.86 0.12
0.95 0.85 0.44 0.06
Company Name Cash Fund Return Sensex Nifty Benchmark
OTHERS Instrument Market Value Cash 2005 9.89 89.12 92.06 94.48 (Rs. in crores) 4.5762 2006 2007 10.21 11.10 77.32 81.6 93.29 42.45 36.44 33.9
% of Net Assets 2.34 2008 14.18 105.25 58.95 66.63
Interpretation: It is seen from the table and graph that Birla Sunlife Opportunity Fund outperformed during the year 2008 with a return of 14.18% .The fund has well performed compared to its Benchmark in 2003-04 and 2005-06. HDFC Equity Fund-Dividend Objective : To achieve capital appreciation in the long term by investing primarily in equity oriented securities. Structure : Open-ended Growth Scheme
45
Inception Date : February 01, 1994 Plans and Options under the Plan : Growth & Dividend Option. Face Value (Rs/Unit): Rs. 10 Minimum Investment : For new investors: Rs.5000 and in multiples of Rs.100 thereafter. For existing investors: Rs. 1000 and in multiples of Rs. 100 thereafter. Entry Load : For investments below Rs. 5 crores, Entry load is 2.25%. For Investments of Rs. 5 crores and above, Entry Load is Nil. Exit Load : Nil. Scheme Code ZI001 HDFC Equity Fund - Dividend Jan 30, 2008 PORTFOLIO AS ON DEC 31, 2007 Company Name ICICI BANK LTD. Reliance Industries Ltd Crompton Greaves Ltd Suzlon Energy Ltd. State Bank of India Zee Entertainment Enterprises Ltd Divis Laboratories Limited Amtek Auto Ltd Larsen & Equity Equity 4800000 410000 204.34 170.86 3.72 3.11 46 Equity 1170860 219.67 4 Equity Equity Equity Equity Equity Equity 4000000 925000 6475000 1265000 1000000 15197358 Instrument EQUITY* No. of Shares Market Value (Rs. in crores) 495.48 266.65 254.73 245.01 237.12 222.64 % of Net Assets 9.02 4.86 4.64 4.46 4.32 4.05 Scheme Name Date NAV (Rs.) 189.9 1 91 Days -8.77 Performance % as on Jan 30, 2008 182 Days 12.97 1 Year 25.33
Toubro Limited United Phosphorus Limited (New) Dr Reddys Laboratories Ltd Dishman Pharmaceuticals & Chemicals CMC Ltd Bank of Baroda Sun Pharmaceuticals Industries Ltd HT Media Limited. Oil & Natural Gas Corpn Ltd Bharat Petroleum Corporation Ltd Britannia Industries Ltd Bharat Electronics Ltd AIA Engineering Limited. Biocon Ltd. Glaxo Smithkline Consumer Ltd ITC Ltd Maruti Udyog Ltd Videsh Sanchar Nigam Ltd Nestle India Ltd Infosys
Equity
4476092
156.19
2.84
Equity
2045551
149.80
2.73
Equity
3926513
145.24
2.64
Equity Equity Equity
1000000 3000000 1047243
138.02 137.88 126.06
2.51 2.51 2.3
4810409 1000000 2325000
123.77 123.70 121.75
2.25 2.25 2.22
809046 563021 701239
119.21 118.81 117.46
2.17 2.16 2.14
Equity Equity
1773927 1382663
102.39 102.34
1.86 1.86
Equity Equity Equity Equity Equity
4700000 959826 1242746 632000 500000
98.44 95.45 95.00 94.79 88.50
1.79 1.74 1.73 1.73 1.61
47
Technologies Ltd Siemens Ltd Jagran Prakashan Ltd ISMT Ltd. Balkrishna Industries Ltd Himatsingka Seide Ltd Exide Industries Ltd Pidilite Industries Ltd Bharat Heavy Electricals Ltd TV Today Network Ltd Asian Paints (India) Ltd Brigade Enterprises Ltd Television Eighteen India Ltd Savita Chemicals Ltd Indo Rama Synthetics (India) Ltd Motherson Sumi Systems Ltd Bharti Airtel Ltd Cipla Ltd Federal Bank Ltd BGR Energy Systems Ltd. Equity Equity Equity Equity 300000 1250000 278388 38635 29.89 26.58 9.34 1.85 0.54 0.48 0.17 0.03 Equity 2601042 29.95 0.55 Equity Equity 812563 4638229 31.82 30.43 0.58 0.55 Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity 436000 998534 5962399 945640 5206277 7466666 2700762 202085 2513588 348566 963543 670000 82.42 79.63 78.94 70.36 63.26 54.78 52.56 52.34 46.85 38.33 37.58 35.86 1.5 1.45 1.44 1.28 1.15 1 0.96 0.95 0.85 0.7 0.68 0.65
48
Company Name Reverse Repo Current Assets
OTHERS Instrument Market Value Reverse repo Current Assets (Rs. in crores) 63.0094 4.3174
% of Net Assets 1.15 0.08
Fund Return Sensex Nifty Benchmark (NSE 500)
2005 98.85 89.124 91.06 94.48
2006 107.19 77.32 81.6 93.29
2007 147.29 42.45 36.44 33.9
2008 189.91 105.25 58.95 66.63
Interpretation: It is seen from the table and graph the fund has high correlated. The fund has given a good return during the year 2007-2008. The investor should sell the security. Reliance Equity Fund-Growth Objective : Reliance Equity Fund aims to achieve long-term growth of capital by investment in equity and equity related securities through a research based investment approach. Structure : Open-ended Equity Growth Scheme Inception Date : October 07, 1995
49
Plans and Options under the Plan : Dividend, Growth, Bonus. Face Value (Rs/Unit): Rs. 10 Minimum Investment : Rs.5000. Entry Load : For Subscription below Rs. 2 crores : 2.25%. For subscription of Rs. 2 crs & above and below Rs 5 crores:1.25%. For Subscription of Rs 5 crores & above - Nil Exit Load: Nil. Scheme Code RC213 Scheme Name Reliance Equity Fund - Bonus Date Jan 30, 2008 NAV (Rs.) 15.53 Performance % as on Jan 30, 2008 91 Days 182 Days 1 Year -4.78 18.10 31.18
PORTFOLIO AS ON DEC 31, 2007 Company Name EQUITY* Instrument No. of Shares Punj Lloyd Ltd. Reliance Industries Ltd Reliance Communication Ventures Ltd. Reliance Energy Ltd JaiPrakash Associates Ltd. Grasim Industries Ltd Divis Laboratories Limited Mahanagar Telephone Nigam Ltd HCL Technologies Ltd. Bank of Baroda Zee Entertainment Enterprises Ltd State Bank of India Oil & Natural Gas Corpn Ltd Maruti Udyog Ltd Punjab National Bank New Delhi Television Ranbaxy Laboratories Ltd ICICI BANK LTD. Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity 7255583 1043502 3445957 1198133 5864957 625336 1167016 8052948 4258834 3000003 3984374 531874 1017816 1133983 1524736 1976377 2102802 572249 Market Value (Rs. in crores) 402.94 300.81 257.21 255.86 250.52 229.01 218.94 154.94 140.39 137.88 130.31 126.12 125.90 112.77 101.32 91.47 89.47 70.88 % of Net Assets 10.94 8.17 6.98 6.95 6.8 6.22 5.94 4.21 3.81 3.74 3.54 3.42 3.42 3.06 2.75 2.48 2.43 1.92
50
Pantaloon Retail (India) Ltd. Equity 722801 60.00 1.63 Other Equities Equity 17.10 0.46 * No. of shares shown above may have been calculated on the basis of percentage of net assets and market values taking NSE closing prices and not necessarily declared by fund house. OTHERS Instrument Market Value Cash (Rs. in crores) 410.045
Company Name Cash
% of Net Assets 11.13
Fund Return 2005 2006 2007 2008 10.15 10 11.77 15.53
Sensex 89.124 77.32 42.45 105.25
Nifty 91.06 81.6 36.44 58.95
Benchmark (BSE 100) 94.48 93.29 33.9 66.63
Interpretation: The table and graph shows that the Reliance Growth Fund has been outperformed during the holding period. The fund has giving good return to the investors continuously. The investor can hold the security for long run.
51
Sahara Midcap Fund-Growth Objective : Sahara Gilt Fund aims to generate credit risk free return and thus provide medium to long term capital gains with income distribution along with capital gains tax relief to its Unit holders, at all times emphasizing the importance of capital preservation. Structure : Open-ended Gilt Fund Inception Date : October 27, 2005 Plans and Options under the Plan : Growth, Dividend Face Value (Rs/Unit): Rs. 10 Minimum Investment : Rs. 5000. Entry Load : Nil. Exit Load : For subscription < 10 lakhs: 0.50%, if redeemed before 6 months. For subscription >= 10 lakhs & < 5 crore: 1.25%, if redeemed before 1 year. For subscription > =5 crore: Nil
Scheme Code FI013 Scheme Name Sahara Midcap Fund - Growth Date Jan 30, 2008 PORTFOLIO AS ON DEC 31, 2007 Company Name Instrument EQUITY* No. of Shares Market Value (Rs. in Tata Chemicals Ltd Crompton Greaves Ltd Core Projects & Technologies Ltd Voltas Ltd Koutons Retail India Ltd SKF Bearings India Ltd Monnet Ispat & Energy Ltd Rashtriya Chemicals & Fertilizers Ltd Reliance Energy Ltd Geojit Financial Servics Ltd. Jindal Saw Ltd. Welspun Gujarat Stahl Rohren Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity 11000 11000 10000 17000 4100 9000 6000 30000 1500 37000 2800 6500 crores) 0.45 0.43 0.43 0.42 0.41 0.41 0.36 0.35 0.32 0.31 0.30 0.30 % of Net Assets 3.4 3.24 3.19 3.14 3.09 3.08 2.7 2.65 2.4 2.33 2.26 2.22 NAV (Rs.) 26.57 Performance % as on Jan 30, 2008 91 Days 182 Days 1 Year 7.67 23.66 42.41
52
Ltd Finolex Industries Ltd State Bank of India Dishman Pharmaceuticals & Chemicals Country Club (India) Ltd Take Solutions Ltd Sujan Towers Akruti Nirman Ltd Rajesh Exports Ltd Reliance Capital Ltd Gujarat Alkalies & Chemicals Ltd Glenmark Pharmaceuticals Ltd. Kotak Mahindra Bank Ltd. Infrastructure Development Finance company Mangalore Chemicals & Fertilizers Ltd Gitanjali Gems Ltd. Bank Of India Nitin Fire Protection Ind Ltd Bata India Ltd Gujarat NRE Coke Ltd Chowgule Steamships Ltd Sterlite Industries (India) Ltd ING Vysya Bank Ltd Usha Martin Ltd Deepak Fertilizers & Petrochemicals Corp Ltd Sesa Goa Ltd Thermax Limited Bank of Baroda Electrosteel Castings Ltd Gateway Distriparks MICO Bartronics India Ltd. Ballarpur Industries Ltd Atlas Copco (India) Ltd Blue Star Ltd HEG Ltd Coromandel Fertilisers Ltd Aditya Birla Nuvo Limited. McNally Bharat Engineering Corporation Union Bank Of India Ltd Bharati Shipyard Centurion Bank of Punjab Limited.
Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity
24000 1200 7500 3000 2200 14000 2200 2900 1000 10000 4000 1800 10000 49853 5000 6000 3500 7592 16000 22000 2000 6500 15000 11500 500 2300 4000 20000 11000 350 7001 10000 1200 3321 3059 13000 800 5000 7000 1700 22000
0.29 0.28 0.28 0.28 0.28 0.27 0.26 0.26 0.26 0.25 0.24 0.23 0.23 0.22 0.22 0.22 0.22 0.22 0.21 0.21 0.21 0.20 0.20 0.19 0.19 0.19 0.18 0.18 0.18 0.18 0.17 0.17 0.17 0.17 0.16 0.16 0.16 0.15 0.14 0.13 0.13
2.14 2.13 2.08 2.07 2.06 2.06 1.97 1.97 1.94 1.88 1.78 1.75 1.71 1.66 1.65 1.64 1.64 1.63 1.59 1.56 1.55 1.53 1.52 1.46 1.43 1.41 1.38 1.36 1.35 1.35 1.3 1.3 1.27 1.25 1.23 1.22 1.2 1.14 1.08 0.98 0.97
53
Fag Bearings India Limited Equity 1875 0.13 0.96 Jindal Stainless Ltd. Equity 5000 0.12 0.88 * No. of shares shown above may have been calculated on the basis of percentage of net assets and market values taking NSE closing prices and not necessarily declared by fund house. OTHERS Instrument Market Value (Rs. Current Assets in crores) 0.0339
Company Name Current Assets
Fund Return 2005 2006 2007 2008 14.895 15.22 18.18 26.57
Sensex 89.124 77.32 42.45 105.25
Nifty 91.06 81.6 36.44 58.95
Benchmark(NSE 50) 94.48 93.29 33.9 66.63
54
SBI Magnum Blue Chip Fund Objective : The objective of the scheme would be to provide investors with opportunities for long-term growth in capital through an active management of investments in a diversified basket of equity stocks of companies whose market capitalization is atleast equal to or more than the least market capitalised stock of BSE 100 Index. Structure : Open-ended Equity Scheme Inception Date : December 23, 2005 Plans and Options under the Plan : Growth & Dividend Option Face Value (Rs/Unit): Rs 10 Minimum Investment : Rs. 5000 Entry Load : For investments below Rs. 5 crores, Entry load is 2.25%. For Investments of Rs. 5 crores and above, Entry Load is Nil. Exit Load : If redeemed before 6 Months; and Amount less than 5 crores, Exit load is 1%. For Amount greater than 5 crore , Exit load is Nil.
Scheme Code SB122 Scheme Name SBI Magnum Bluechip Fund Dividend Jan 30, 2008 Date NAV (Rs.) 45.67 Performance % as on Jan 30, 2008 91 Days 182 1 Year -10.13 Days 11.89 17.27
PORTFOLIO AS ON DEC 31, 2007 Company Name Instrument EQUITY* No. of Shares Market Value (Rs. in JaiPrakash Associates Ltd. ICICI BANK LTD. Equity Equity 2597548 619146 crores) 110.95 76.69 % of Net Assets 7.06 4.88
55
Crompton Greaves Ltd Reliance Industries Ltd Thermax Limited State Bank of India Sterlite Industries (India) Ltd Infrastructure Development Finance company Indian Oil Corporation Ltd Mahindra & Mahindra Ltd Reliance Communication Ventures Ltd. Gas Authority Of India Ltd Century Textiles & Industries Ltd Oil & Natural Gas Corpn Ltd Bharat Heavy Electricals Ltd ITC Ltd Tata Consultancy Services Ltd. Satyam Computer Services Ltd Grasim Industries Ltd Tata Steel Ltd. Maruti Udyog Ltd Tata Power Company Ltd United Phosphorus Limited (New) DLF Limited Wockhardt Limited Hindustan Construction Company Ltd Housing Development Finance Corporation Ltd Dr Reddys Laboratories Ltd Ranbaxy Laboratories Ltd Container Corporation Of India Ltd Associated Cement Companies Ltd Bharati Tele - Ventures Zee Entertainment Enterprises Ltd Hindalco Industries Ltd Aventis Pharma India Ltd. Indian Hotels Co Ltd Hindustan Lever Ltd Pfizer Ltd Patni Computer Systems Ltd. Mundra Port & Special Economic Zone Ltd Tata Steel Ltd.
Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Preference
1729788 235518 815439 258491 578639 2392970 670192 601688 686413 930927 387018 359562 160208 1965894 367589 796226 97413 376348 352403 208469 878235 269273 608939 1077123 85740 336938 576188 115018 199363 190849 581447 848520 154018 1083176 573090 146059 340417 35921
68.05 67.89 66.79 61.29 59.88 54.69 53.28 51.86 51.23 50.61 45.26 44.48 41.49 41.18 39.60 35.99 35.68 35.20 35.05 30.65 30.65 28.92 25.46 25.15 24.67 24.67 24.52 22.16 20.43 19.02 19.02 18.23 17.92 17.29 12.26 11.79 11.32 4.56 2.04
4.33 4.32 4.25 3.9 3.81 3.48 3.39 3.3 3.26 3.22 2.88 2.83 2.64 2.62 2.52 2.29 2.27 2.24 2.23 1.95 1.95 1.84 1.62 1.6 1.57 1.57 1.56 1.41 1.3 1.21 1.21 1.16 1.14 1.1 0.78 0.75 0.72 0.29 0.13
56
Shares Company Name Current Assets OTHERS Instrument Market Value Current Assets (Rs. in crores) 53.5912 % of Net Assets 3.41
2005 Fund Return Sensex Nifty Benchmark (BSE 200) 18.69 89.124 34.6 94.48 25.54 77.32 31.6 93.29
2006
2007 36.63 42.45 36.44 33.9
2008 45.67 105.25 39.94 39.69
10 2 10 0 8 0 6 0 4 0 2 0 0 20 05 20 06 20 07 20 08
F dR rn un etu S s en ex Nifty B c a en hm rk
Interpretation: It is seen from the table and graph the fund has giving continuous return. TATA EQUITY MANAGEMENT FUND-GROWTH Objective : To generate long term capital appreciation by investing in a diversified portfolio of equity and equity related security of large, mid and small cap companies. Structure : Open-Ended Equity Fund Inception Date : March 07, 2006 Plans and Options under the Plan : Growth Option, Dividend Option.
57
Face Value (Rs/Unit): 10 Rs/Unit Minimum Investment : Rs. 5000 Entry Load : Nil for amount > 5 crore. 2.25% for amount < 5 crore Exit Load : If redeemed before 3 months and amount greater than 5 crore, Exit Load is 1%.
Scheme Code TA179 Tata Equity Management Fund Growth PORTFOLIO AS ON MAR 31, 2007 Jan 30, 2008 12.55 Scheme Name Date NAV (Rs.) Performance % as on Jan 30, 2008 91 182 Days 1 Year Days -6.09 NA 12.1
58
Company Name Reliance Industries Ltd Bharti Airtel Ltd Infosys Technologies Ltd Oil & Natural Gas Corpn Ltd Siemens Ltd Hindustan Lever Ltd Bharat Heavy Electricals Ltd Satyam Computer Services Ltd HCL Technologies Ltd. Wipro Ltd Maruti Udyog Ltd Larsen & Toubro Limited ABB Ltd State Bank of India Colgate-Palmolive (India) Ltd NTPC Limited. Zee Entertainment Enterprises Ltd ITC Ltd Steel Authority of India Ltd Dr Reddys Laboratories Ltd Mahindra & Mahindra Ltd HDFC Bank Ltd Ranbaxy Laboratories Ltd Indian Hotels Co Ltd Punjab National Bank Reliance Communication Ventures Ltd. Gujarat State Fertilizers & Chemicals Ltd Bharat Earth Movers Ltd Tata Motors Ltd Glaxo Smithkline Pharmaceuticals Ltd Tech Mahindra Ltd. Century Textiles & Industries Ltd Hindustan Petroleum Corporation Ltd Dish TV India Ltd Indian Overseas Bank Shanthi Gears Ltd Videsh Sanchar Nigam Ltd Kesoram Industries Ltd
Instrument Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity
EQUITY* No. of Shares 129800 230000 85400 170000 113912 582401 52576 238600 382958 195000 132402 60000 26000 92752 271850 554378 300000 413000 509659 79500 72000 58255 150000 330000 92246 100000 232355 36900 51900 32500 25000 59000 125000 172500 293790 339546 50000 48380
Market Value (Rs. in crores) 17.76 17.55 17.19 14.93 12.42 11.95 11.89 11.22 11.15 10.89 10.85 9.71 9.23 9.21 9.04 8.30 7.52 6.21 5.82 5.78 5.62 5.53 5.29 4.80 4.35 4.20 4.06 4.00 3.78 3.63 3.57 3.22 3.08 3.08 3.03 2.08 2.01 1.66
% of Net Assets 4.58 4.53 4.44 3.85 3.21 3.09 3.07 2.9 2.88 2.81 2.8 2.51 2.38 2.38 2.33 2.14 1.94 1.6 1.5 1.49 1.45 1.43 1.37 1.24 1.12 1.08 1.05 1.03 0.97 0.94 0.92 0.83 0.8 0.79 0.78 0.54 0.52 0.43
59
Kirloskar Brothers Ltd Wire and Wireless India Ltd. Crompton Greaves Ltd Fag Bearings India Limited Balrampur Chini Mills Ltd IVRCL Infrastructure & Projects Ltd. Jindal Steel and Power Ltd. Zee News Limited Idea Cellular Limited Vivimed Labs Limited Power Finance Corporation Ltd C & C Construction Ltd Company Name Repo Cash ICICI BANK LTD.
Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity
45000 150000 60079 19437 111013 25000 2432 135630 47467 26206 42099
1.63 1.33 1.20 1.19 0.73 0.73 0.58 0.53 0.45 0.45 0.44
0.42 0.34 0.31 0.31 0.19 0.19 0.15 0.14 0.12 0.12 0.11 0.04 % of Net Assets 10.31 9.7 3.85
9771 0.17 OTHERS Instrument Market Value (Rs. in crores) 39.9255 37.5645 14.92
Repo Cash Money Market
Fund Return 2005 2006 2007 2008 7.5 10.51 11.34 12.55
Sensex 89.124 77.32 42.45 105.25
Nifty 91.06 81.6 36.44 58.95
Benchmark (NSE 50) 94.48 93.29 33.9 66.63
60
Interpretation: The table and graph shows that the fund is giving good return from the last 4 years. Sensex much correlated with its Nifty. The fund is well managed during both in long and in short run. UTI Growth and Value Fund Objective: To seek capital appreciation through opportunities arising out of listed growth and undervalued stocks. Structure: Open Ended Equity Fund Inception Date : October 28, 1999 Plans and Options under the Plan : Bonus Plan, Annual Dividend Plan, Growth Plan, Semi-Annual Dividend Plan. Face Value (Rs/Unit): Rs. 10 Minimum Investment: Rs. 5,000/Entry Load: Nil for investments made after 10.10.2004 and amount >=Rs 2 crore. Entry load 0.5% for investments made after 10.10.2004 and amount >= Rs 25 lakhs and amount < 2 crore. Entry load 2.25% for investments made after 10.10.2004 and amount < Rs 25 lakhs. Exit Load: Nil.
Scheme Code UT193 Scheme Name UTI Equity Fund Dividend Date Jan 30, 2008 NAV (Rs.) 38.44 Performance % as on Jan 30, 2008 91 Days 182 Days 1 Year -6.06 16.56 24.33
PORTFOLIO AS ON 31ST DEC, 2007

Company Name Instrument DEBT Rating No. of Debentures UTI Bank Ltd FD Market Value (Rs. in crores) 10.00 Percentage of Net Assets 0.47
Company Name Reliance Industries Ltd UTI Bank Ltd
Instrument Equity Equity
EQUITY* No. of Shares 474229 975000
Market Value (Rs. in crores) 136.71 94.62
% of Net Assets 6.48 4.49
61
ITC Ltd Tata Power Company Ltd Reliance Communication Ventures Ltd. Nestle India Ltd NTPC Limited. MICO State Bank of India Shoppers Stop Ltd Mahindra & Mahindra Ltd ICICI BANK LTD. Larsen & Toubro Limited Bharati Tele - Ventures Glaxo Smithkline Consumer Ltd India Cements Ltd Housing Development Finance Corporation Ltd Grasim Industries Ltd Tata Tea Ltd Suzlon Energy Ltd. KEC International Ltd. Satyam Computer Services Ltd Tube Investments of India Ltd Vysya Bank Ltd Bajaj Auto Ltd HDFC Bank Ltd Trent Ltd Tata Consultancy Services Ltd. Sesa Goa Ltd Gas Authority Of India Ltd Tata Steel Ltd. Bharat Forge Ltd Infosys Technologies Ltd Reliance Energy Ltd Sterlite Industries (India) Ltd Housing Development & Infrastructure Ltd Gujarat IndPower Co Ltd Ranbaxy Laboratories Ltd Shree Cement Ltd Associated Cement Companies Ltd ABB Ltd Gujarat Mineral Development Corporation
Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity
4500000 600048 1100000 525067 2975000 140925 294000 1221971 756927 524471 152000 500000 630785 1500000 152080 112001 421468 195200 446827 800973 3801065 1050891 123269 180000 344701 245958 66500 445000 246000 570696 110000 90000 180800 170000 1346871 380114 118955 149755 100245 288750
94.25 88.21 82.10 78.75 74.64 72.50 69.71 67.88 65.24 64.97 63.34 49.82 46.69 46.52 43.76 41.02 38.25 37.81 36.51 36.20 33.54 32.98 32.39 31.12 27.00 26.50 25.41 24.19 23.01 20.21 19.47 19.22 18.71 18.30 18.01 16.17 15.95 15.35 15.16 14.99
4.47 4.18 3.89 3.73 3.54 3.44 3.31 3.22 3.09 3.08 3 2.36 2.21 2.21 2.08 1.95 1.81 1.79 1.73 1.72 1.59 1.56 1.54 1.48 1.28 1.26 1.2 1.15 1.09 0.96 0.92 0.91 0.89 0.87 0.85 0.77 0.76 0.73 0.72 0.71
62
Limited Bharat Heavy Electricals Ltd Century Textiles & Industries Ltd Punj Lloyd Ltd. Simplex Infrastructures Ltd. PVR Ltd. Apollo Tyres Ltd Jindal Steel and Power Ltd. Power Grid Corporation of India Ltd Welspun India Ltd Radico-Khaitan Ltd Nava Bharat Ventures Ltd DLF Limited Kotak Mahindra Bank Ltd. Mundra Port & Special Economic Zone Ltd Biocon Ltd. Shipping Corporation of India Ltd Areva T and D India Ltd. Bharat Earth Movers Ltd Tata Steel Ltd. Tata Steel Ltd. Ispat Industries Ltd
Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Rights Preference Shares Warrants
45500 100000 196000 165200 300000 1750000 6000 595061 726155 427204 240838 55000 44227 38725 77089 119459 14069 20010 40000 180000 85114
11.78 11.70 10.88 10.73 10.31 9.42 9.24 8.57 7.52 7.50 6.90 5.91 5.73 4.91 4.45 3.84 3.38 3.38 2.09 0.20 0.00
0.56 0.55 0.52 0.51 0.49 0.45 0.44 0.41 0.36 0.36 0.33 0.28 0.27 0.23 0.21 0.18 0.16 0.16 0.1 0.01 NA
Company Name Current Assets
OTHERS Instrument Market Value Current Assets (Rs. in crores) 83.2108
Fund Return 2005 2006 2007 2008 19 17.55 20.23 16.14
Sensex 89.124 77.32 42.45 105.25
Nifty 91.06 81.6 36.44 58.95
Benchmark (BSE 100) 94.48 93.29 33.9 66.63
63
Interpretation: The table and graph shows that the fund has performed well in the year 2005 and 2007 but in the year 2006 and 2008 there is less return.
64
FINDINGS The analysis of 8 Diversified Equity Mutual Funds based on their Net Asset Value return for a 4 years holding period shows thatDuring the 4 years holding period all Mutual Funds has been performed well by giving continuous highest return to the investor due to the Good corporate results, significant foreign inflows and increased economic activity were the main drivers in the late year market recovery that saw the Sensex reached 20,000 and again falls down to 17,000 due capital trading imbalance The highest NAV was given by ABN AMRO, HDFC, Sahara, SBI in 30th Jan 2008 with a return of 36.92,189.91, 26.57 and 45.67 respectively.
65
CONCLUSION:
It brings together a group of people and invests their money in stocks, bonds, and other securities. According to the analysis all Selected Mutual Funds are the well performed funds so the investor can think about the investment in these funds. The advantage of Mutuals are professional management, diversification, economies of scale, simplicity and liquidity. The disadvantages of Mutuals are high costs, over diversification, possible tax consequences and the inability of management to guarantee a superior return. Mutual funds are easy to buy and sell. Investor may loss either buy them directly from the fund company or through a third party. The awareness about the Mutual Fund is being increasing every day more number of investing in the Mutual Funds in India, today it is one of the safest investment in the country.
The scope of development Mutual Fund industry is very wide in India because it only caters to the need of the individual investors but also to institutional investors. One thing is for sure the Mutual Fund industry is here to stay for years.
92% of people are not aware of Mutual Fund. 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.
There are two types of Mutual Funds, Load Funds and No load funds. Load funds usually involves a sales chares. Keep in mind that just because a fund has a load, it does not guarantee a good performance. There are many No load Mutual Funds that are great performance and equally there are many load Mutual Funds that are great performance.
Most of the people in the India are not aware of Mutual Funds, therefore it leads to minimum investment in Mutual Funds. When compare to developed Nations like USA, 800 companies are working and they are all leading Asset Management Companies. But in India only 33 Asset Management Companies are working.
66
SUGGESTIONS: Mutual Fund Asset Management Companys is required to take more awareness in not only metros and cities but also in remote areas to induce the investor who invest in capital market. Mutual Fund Companies should target upon the insurance agents to sell their product which helps them to grow easily. Investors should evaluate past performance, look for stability and although past performance is no guarantee of future performance, it is a useful way to assess how well or badly a fund has performed in comparison to its stated objectives. The mutual fund Asset Management Companies should educate and give awareness about the concept of Mutual Funds to the investors. As majority of the investors in India are not aware of Mutual Funds is benefits over other investment. Therefore it leads to minimum investment in Mutual Funds.
67
REFERENCE Financial Markets and Services All About Mutual Fund Business Line Newspaper. Economic Times Newspaper. Sharekhan Broachers www.sharekhan.com www.amfiindia.com www.indian mutual funds.com www. Moneycontrol.com By- Gordon. Natarajan
By- Bruce Jacobs.
68
WEEKLY REPORT Name of the Organization Name of the student USN Name of the Institution : : : :
WEEKS 1.
PERIOD 24/12/2007 to 29/12/2007
ACTIVITY Collection of Primary Data about the Evaluation of Mutual Fund Schemes Collection of Secondary Data Designed Research Methodology Analysis of Data Analysis and interpretation Finalizing the report and approving the draft.
31/12/2007 to 05/01/2008 07/01/2008 to 12/01/2008 14/01/2008 to 18/012008 21/01/2008 to 25/01/2008 28/01/2008 to 02/02/2008
69

Mutual Fund Project

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EXECUTIVE SUMMARY Investment is a sensitive concept, any investor whether professional or individual needs to be very careful while investing

PG DEPARTMENT OF MANAGEMENT STUDIES, ATRIA INSTITUTE OF TECHNOLOGY, BANGALORE.

The project has been classified as follows-

PG DEPARTMENT OF MANAGEMENT STUDIES, ATRIA INSTITUTE OF TECHNOLOGY, BANGALORE.

GENERAL INTRODUCTION MUTUAL FUNDS

PG DEPARTMENT OF MANAGEMENT STUDIES, ATRIA INSTITUTE OF TECHNOLOGY, BANGALORE.

PG DEPARTMENT OF MANAGEMENT STUDIES, ATRIA INSTITUTE OF TECHNOLOGY, BANGALORE.

Characteristics of mutual funds include the following:

PG DEPARTMENT OF MANAGEMENT STUDIES, ATRIA INSTITUTE OF TECHNOLOGY, BANGALORE.

PG DEPARTMENT OF MANAGEMENT STUDIES, ATRIA INSTITUTE OF TECHNOLOGY, BANGALORE.

PG DEPARTMENT OF MANAGEMENT STUDIES, ATRIA INSTITUTE OF TECHNOLOGY, BANGALORE.

US $ Millions Redeemed 9189 18224 34206 67502 118126

PG DEPARTMENT OF MANAGEMENT STUDIES, ATRIA INSTITUTE OF TECHNOLOGY, BANGALORE.

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

PG DEPARTMENT OF MANAGEMENT STUDIES, ATRIA INSTITUTE OF TECHNOLOGY, BANGALORE.

Third Phase 1993-2003 (Entry of Private Sector Funds)

Fourth Phase since February 2003

PG DEPARTMENT OF MANAGEMENT STUDIES, ATRIA INSTITUTE OF TECHNOLOGY, BANGALORE.

MUTUAL FUND STRUCTURE

PG DEPARTMENT OF MANAGEMENT STUDIES, ATRIA INSTITUTE OF TECHNOLOGY, BANGALORE.

PG DEPARTMENT OF MANAGEMENT STUDIES, ATRIA INSTITUTE OF TECHNOLOGY, BANGALORE.

PG DEPARTMENT OF MANAGEMENT STUDIES, ATRIA INSTITUTE OF TECHNOLOGY, BANGALORE.

(in crores) 1,39,616 1,49,554 2,31,862 3,58,377

PG DEPARTMENT OF MANAGEMENT STUDIES, ATRIA INSTITUTE OF TECHNOLOGY, BANGALORE.

Performance of Mutual Funds in India

PG DEPARTMENT OF MANAGEMENT STUDIES, ATRIA INSTITUTE OF TECHNOLOGY, BANGALORE.

PG DEPARTMENT OF MANAGEMENT STUDIES, ATRIA INSTITUTE OF TECHNOLOGY, BANGALORE.

PG DEPARTMENT OF MANAGEMENT STUDIES, ATRIA INSTITUTE OF TECHNOLOGY, BANGALORE.

PG DEPARTMENT OF MANAGEMENT STUDIES, ATRIA INSTITUTE OF TECHNOLOGY, BANGALORE.

PG DEPARTMENT OF MANAGEMENT STUDIES, ATRIA INSTITUTE OF TECHNOLOGY, BANGALORE.

PG DEPARTMENT OF MANAGEMENT STUDIES, ATRIA INSTITUTE OF TECHNOLOGY, BANGALORE.

TYPES OF MUTUAL FUND SCHEMES :

PG DEPARTMENT OF MANAGEMENT STUDIES, ATRIA INSTITUTE OF TECHNOLOGY, BANGALORE.

PG DEPARTMENT OF MANAGEMENT STUDIES, ATRIA INSTITUTE OF TECHNOLOGY, BANGALORE.

Money Market Schemes:

Closed ended Schemes:

general, there are

PG DEPARTMENT OF MANAGEMENT STUDIES, ATRIA INSTITUTE OF TECHNOLOGY, BANGALORE.

PG DEPARTMENT OF MANAGEMENT STUDIES, ATRIA INSTITUTE OF TECHNOLOGY, BANGALORE.

PG DEPARTMENT OF MANAGEMENT STUDIES, ATRIA INSTITUTE OF TECHNOLOGY, BANGALORE.

PG DEPARTMENT OF MANAGEMENT STUDIES, ATRIA INSTITUTE OF TECHNOLOGY, BANGALORE.

No Guarantees: No investment is risk free. If the entire stock market declines in

PG DEPARTMENT OF MANAGEMENT STUDIES, ATRIA INSTITUTE OF TECHNOLOGY, BANGALORE.

PG DEPARTMENT OF MANAGEMENT STUDIES, ATRIA INSTITUTE OF TECHNOLOGY, BANGALORE.

PG DEPARTMENT OF MANAGEMENT STUDIES, ATRIA INSTITUTE OF TECHNOLOGY, BANGALORE.

PG DEPARTMENT OF MANAGEMENT STUDIES, ATRIA INSTITUTE OF TECHNOLOGY, BANGALORE.

STATEMENT OF THE PROBLEM

PG DEPARTMENT OF MANAGEMENT STUDIES, ATRIA INSTITUTE OF TECHNOLOGY, BANGALORE.

PG DEPARTMENT OF MANAGEMENT STUDIES, ATRIA INSTITUTE OF TECHNOLOGY, BANGALORE.

DIFFERENT FUNDS RETURN (NAV)

PG DEPARTMENT OF MANAGEMENT STUDIES, ATRIA INSTITUTE OF TECHNOLOGY, BANGALORE.

Equity Fund Dividend

PORTFOLIO AS ON DEC 31, 2007

PG DEPARTMENT OF MANAGEMENT STUDIES, ATRIA INSTITUTE OF TECHNOLOGY, BANGALORE.

PG DEPARTMENT OF MANAGEMENT STUDIES, ATRIA INSTITUTE OF TECHNOLOGY, BANGALORE.

YEAR 2005 2006 2007 2008

Fund Return 16.25 19.74 27.52 36.92

Sensex 89.124 77.32 42.45 105.25