A Project Report On Study of Performance

A Project Report
On
“Study of Performance of Mutual Fund Schemes (Equity Fund)”
For
“DAWNAY DAY AV INDIA ADVISORY PVT LTD”
By,
“Mr. ARUN KUMAR SINGH”
Under the guidance of
“Prof. Mayur Punde”
Submitted to
“University of Pune”
In partial fulfillment of the requirement for the award of the degree of
Master of Business Administration (MBA)
Through
AISSMS Institute of Management (MBA)
Pune - 411001
ACKNOWLEDGEMENT
A project will be never successful with out the assistance and guidance
from appropriate persons. So now it is the right time to express me
sincere gratitude to all those who are helping me to complete this
project.
I express m y sincere thanks to Mr. Abhay Khandelwal giving me
an opportunit y to do project in Downey Day India Advisory Pvt Ltd.
I express m y sincere thanks to m y company guide Mr. Rajiv Ranjan
team leader and Mr. Sameer Khairat y Senior Relationship Manager.
I also thanks to Mr. Satish, and Mr. Vikas Mishra for their valuable
guidance.
I whole heartedl y thanks to m y facult y guide Prof. Mayur Punde
sir, who is giving me valuable suggestions for completing my project
in right way.
Mr. Arun Kumar Singh

CERTIFICATE
This is to certify that Mr. Arun Kumar Singh .has completed the
Summer Project Titled “Study of Performance of Mu tual Fund
Schemes (Equity Fund)”to m y satisfaction and as per the requirements
of the Two Year Full-Time MBA Programme.
Project Guide Director
(Prof. Mayur Punde) (Dr. Sanjay Pat ankar)
Date:
ii
INDEX
Sr. No. Title Page No.
I. ACKNOWLEDGEMENT I
1. EXECUTIVE SUMMARY 2
2. COMPANY PROFILE 4
3. OBJECTIVES OF THE STUDY 12
4. THEORETICAL BACKGROUND 13
5. RESEARCH METHODOLOGY 25
8. DATA ANLYSIS 26
9. FINDINGS 47
10 CONCLUSIONS 53
11. LIMITATIONS 54
12 BIBLIOGRAPHY 55
iii
EXECUTIVE SUMMARY
Right from its existence, Banks, whether nationalize or corporate, always
dominated others, in case of public investments or retail investments. But in past few
years due to various reasons like continuously falling of interest rates, various scams
etc. investors will have to look for various other investments avenues that will give
them better returns with minimization of risks. Here Mutual Funds Industry has very
important role to play in providing alternate investment avenue to entire gamut of
investors in scientific and professional manner.
Indian Mutual Fund Industry has been definitely maturing over the period. In
four decades of its existence in India Mutual Funds have gone through various
structural changes and gained prominent position in Financial Industry. Because of
easy of investments, professional management and diversification more and more
investors are gaining confidence in Mutual Funds. Even government policies like
abolishment of long term capital benefit taxes added advantage to growth of Mutual
Funds. This is all the way is leading to pool of more and more money from retail
investors into the Mutual Funds.
So I carried out project in performance appraisal of some Mutual Fund
Schemes and watch there Portfolios for the period of two months starting from 1st
June 2016 to 31st July 2016 to understand Mutual Funds, Mutual Fund Industry,
analyze the trend in Mutual Funds, what has been the performance so far and mapping
various methods of Client prospecting and servicing, what are the factors that attracts
the investors to invest in Mutual Funds over other investment avenues.
2
The project study focused on increasing brand awareness at retail level clients
and various activities that results in brand awareness among the same. This project
also consists of generating and getting clients, generating database and after sales
services to retain client and make them happy investor.
While analyzing trend, I tried to map how Asset Under Management (AUM)
varied over the period with BSE-Sensex to facilitate feature projections. It has been
done separately for Equity Schemes, Income Schemes, Balanced Schemes and Liquid
Schemes.
3
COMPANY PROFILE
DAWNAY DAY AV INDIA ADVISORY PVT LTD
TABLE OF CONTENTS
AN OVERVIEW …………………………………………………………………..
ABOUT DAWNAY DAY …………………………………………………………
ABOUT DAWNAY DAY AV ……………………………………………………
RANGE OF SERVICES ………..…………………………………………………
STOCK BROKING ……………………………………………………………
INSURANCE …………………………………………………………………
MUTUA L FUNDS ……………………………………………………………
ONLINE STOCK BROKING ……………………………….………………………
ADVANTAGES OF DAWNAY DAY AV SECURITIES …………………………
4
Dawnay Day AV India Advisory Pvt. Ltd. – An Overview
Dawnay, Day International is co-owned by Guy Naggar and Peter Klimt, each
of whom has more than three decades of experience in creating value for clients in
international financial markets. Alok Vajpayee has more than twenty years of
experience building financial services businesses around the globe.
Dawnay Day AV is an innovative financial services provider and advisory firm,
formed through a joint venture between Dawnay, Day International and Alok
Vajpayee.
With an unrelenting focus on twin values of Integrity and “Client First"
Policy, Dawnay Day AV provides advisory services to individuals and institutional
clients in India and abroad.
Company’s mission is to forge strong, sustained relationships with clients by
creating value for them. We do this by gaining a thorough insight into a client’s
financial needs and objectives. Attuned to the fact that no two clients are the same,
companies approach to investing underscores the need for personalized solutions in
today’s financial markets.
In providing services to clients, company take the fiduciary trust they place in
very seriously. By strictly adhering to company’s core values, company ensure that
processes, risk management systems, and staffing are concentrated solely on
preserving and increasing clients’ hard earned capital within a transparent and
controlled investment process.
5
About Dawnay Day
Dawnay, Day was originally established as an issuing house in 1928 in London,
England. Dawnay, Day was acquired by its current owners, Guy Naggar and Peter
Klimt in the early 1980’s. Currently, The Dawnay, Day Group conducts business in
three broad spheres of operation - Property Investments, Principal Investments and
Financial Services. The Firm has gross assets in excess $3 billion and a net worth that
is greater than $1 billion.
The Firm’s jointly owned Financial Services companies include corporate and
structured finance companies, asset management companies, securities brokerage
companies, and property-related advisory services.
Working through subsidiary companies and affiliates, firm deliver high-quality,
specialized investment and advisory services to individuals and institutional clients in
Europe, Middle East, and India.
Property Investments
At the Dawnay, Day Group, long-term stability and asset strength comes from
company’s diversified commercial property portfolio. The portfolio is actively
managed and comprises more than 400 commercial properties, which are located
around the UK and Continental Europe. A majority of these properties are held
through Dawnay, Day Properties Ltd. or Starlight Investments Ltd., firm’s two major
UK holding companies.
6
The companies specialize in contra-cyclical purchases and sales. Acquisitions
have included substantial mixed-portfolios, shopping complexes, city-centre and
suburban offices, “high-street” shops, retail warehouses and leisure-use properties.
In addition to firm’s commercial property portfolio, Dawnay, Day also manages
the Puma Property Fund. The fund has a value of £123M and is made up of UK
property assets..
Asset Management Companies
In addition to company’s Property Investments business, The Dawnay, Day
Group also offers an extensive array of asset management products through
company’s various subsidiary and joint venture companies both in the UK and
abroad.
 Dawnay, Day Principal Investment
 Dawnay, Day Global Investments
 Dawnay, Day Corporate Finance
 Dawnay, Day Structured Finance
 Olympia Capital Management
 Dawnay, Day Quantum
 Dawnay, Day Property Finance Group
 Dawnay, Day Lockhart
 mc2 Capital Management
 Dawnay, Day India Hotels
7
About Dawnay Day AV
Dawnay Day AV Securities Private Limited is a full-service financial services
provider and advisory firm. By establishing deep relationships with clients and taking
time to understand their individual needs, we have quickly created an impact across
several businesses.
We intend to offer companies clients access to a range of traditional and
alternative investment opportunities - relying on a mix of local and global capabilities
- including direct equity through online trading portal, private equity, real estate,
insurance, and corporate finance. In concert with company’s parent company,
Dawnay, Day International, we are able to provide services in an advisory capacity to
Non Resident investors and Foreign Institutional Investors.
Company deliver State-of-the-art Tools, excellent Customer Care, Affordable
Pricing and Innovative Technology so investor can follow there own path. Need based
solutions, which are what companies Product Bouquet is all about.
Equity: At Dawnay Day AV, investor can place online trades for virtually any
stock listed on NSE & BSE. Dawnay Day AV offers plenty of powerful ways to place
stock orders along with the trading tools and services that help investor move quickly
and conveniently. Ways to trade stock
1.) Delivery based Trading: Place delivery based orders for all stocks listed on
NSE & BSE.
2.) Intra-day Trading: Execute Margin Orders for select group of stocks listed
on NSE& BSC.
8
2.) SSRS: Sell "Settlement Receivable shares" on T+1 Basis.
Derivative: With a Derivative-approved Dawnay Day AV account, investor can
pursue a wide range of Futures & Options trading strategies with speed and ease. We
deliver the support, information and structure that quickly lets investor spot potential
opportunities and act on them fast
Customer Service & Other Value Added Services: In company’s continuous
endeavour to offer best of the class services to companies esteemed customer, we are
glad to provide Depository and Trading Account details on Net at
www.ddavsecurities.com with host of features as well.
Range of Services
Stock Broking
It is an undisputed fact that the stock market is unpredictable and yet enjoys a
high success rate as a wealth management and wealth accumulation option. The
difference between unpredictability and a safety anchor in the market is provided by
in-depth knowledge of market functioning and changing trends, planning with
foresight and choosing options with care. This is what we provide in company’s Stock
Broking services.
Insurance
At Dawnay Day AV India Advisors Pvt. Ltd., we provide both life and non-life
insurance products to retail individuals, high net-worth clients and corporates. With
the opening up of the insurance sector and with a large number of private players in
the business, we are in a position to provide tailor made policies for different
segments of customers. In company’s journey to emerge as a personal finance
9
advisor, we will be better positioned to leverage company’s relationships with the
product providers and place the requirements of company’s customers appropriately
with the product providers. With Indian markets seeing a sea change, both in terms of
investment pattern and attitude of investors, insurance is no more seen as only a tax
saving product but also as an investment product. By setting up a separate entity, we
would be positioned to provide the best of the products available in this business to
company’s customers.
Mutual Funds
Since its inception, Dawnay Day AV has demonstrated a dedication coupled
with dynamism that has inspired trust from various segments – corporates,
government bodies and individuals. Dawnay Day AV has since been performing a
pivotal role as the intermediary – the interface – between these players.
With Mutual Funds emerging as a distinct asset class, Dawnay Day AV has
made a strategic choice to leverage the power of latest technology to provide a cutting
edge to its services. We, today, service most of the asset management companies
(AMC’s). Mutual fund services have been undergoing a sea change in the Indian
market place and asset management companies are finding their niche in delivering
unique products and service offerings.
Going forward, we shall strive to create new products and services, which would
address the needs of the end customer.
10
Advantages of Dawnay Day AV Securities
 Member of NSE, BSE
 Personalized Services
 Backed by Powerful Research
 Facility to put orders through live screen
 Call N Trade Service
 Alerts
 Trading Workshops & seminars
 Latest Technology implemented
 Powerful Risk-Management system
 NSE (Cash & F&O), BSE (Cash) on the same screen
 Secure Transaction authentication based model
 Online reports and contract notes
 Online transfer and withdrawal of funds
 Tie-up with major banks for Funds Transfer
 Competitive brokerage.
11
OBJECTIVES OF THE STUDY
1) Study of mutual funds Schemes – Equity and Growth Fund
2) Study of performance of mutual funds schemes.
3) suggest the schemes which are out performers and laggards
12
THEORETICAL BACKGROUND
Investment Options:
Savings form an important part of the economy of any nation. With the savings
invested in various options available to the people, the money acts as the driver for
growth of the country. Indian financial scene too presents a plethora of avenues to the
investors. Though certainly not the best or deepest of markets in the world, it has
reasonable options for an ordinary man to invest his savings.
Let us examine several of them:
1. Banks
2. Post Office schemes
3. Company Fixed Deposits
4. Mutual fund
5. Real Estate
6. Commodity:
7. Investment in Capital Market
WHAT IS A MUTUAL FUND?
A Mutual Fund is a trust that pools the savings of a Number of investors who share a
common financial Goal. Anybody with an investible surplus of as little as a few
thousand rupees can invest in Mutual Funds.
In mutual fund many investors contribute to form a common pool of money.
This pool of money is invested in accordance with stated objective. The ownership of
fund is thus joint or mutual; fund belongs to all investor’s ownership of fund is in the
same proportion as the amount of contribution made by him bears to the total amount
of fund.
13
A mutual fund uses the money collected from investor to buy those assets which are
specially permitted by its stated investment objective. Thus a growth fund would buy
mainly equity assets- ordinary shares preference shares, warrants, etc. An income
fund would mainly buy debt instruments such as debentures and bonds. The fund’s
assets are owned by the investor in same proportion as there contribution bears to total
contributions to all investors put together. Appreciation or reduction in value of
investments is reflected in net asset value (NAV) of the concerned scheme, which is
declared by the fund from time to time. Mutual fund schemes are managed by
respective Asset Management Companies (AMC). Different business groups/
financial institutions/ banks have sponsored these AMCs, either alone or in
collaboration with reputed international firms. Several international funds like
Alliance and Templeton are also operating independently in India. Many more
international Mutual Fund giants are expected to come into Indian markets in the near
future. The benefits on offer are many with good post-tax returns and reasonable
safety being the all mark that we normally associate with them.
Several parties are involved in the organization and Operation of a mutual fund,
including:
Mutual Fund Manager: Establishes one or more mutual funds, markets them and
oversees their general administration.
Portfolio Adviser: The professional money manager appointed by the Mutual Fund
Manager to direct the fund s investments. The Mutual Fund Manager also often acts
as the Portfolio Adviser.
14
Principal Distributor: Coordinates the sale of the fund to investors, either directly or
through a network of registered dealers.
Custodian: The bank or trust company appointed by the Mutual Fund Manager to
hold all of the securities owned by the fund.
Transfer Agent and Registrar: The group responsible for maintaining a list of all
investors in the fund.
Auditor: The independent accountants retained by the Mutual Fund Manager to audit
each year, and report on the financial statements of the fund.
Trustee: The entity that has title to the securities owned by the fund (when the fund is
organized as a trust, instead of as a corporation) on behalf of the unit holder.
CONCEPT OF MUTUAL FUNDS
A Mutual Fund is a trust that pools the savings of a number of investors who share a
common financial goal. The money thus collected is then invested in capital market
instruments such as shares, debentures and other securities. The income earned
through these investments and the capital appreciations realized are shared by its unit
holders in proportion to the number of units owned by them. Thus a Mutual Fund is
the most suitable investment for the common man as it offers an opportunity to invest
in a diversified, professionally managed basket of securities at a relatively low cost.
15
Objectives of a Mutual Fund
The objectives sought to be achieved by mutual funds as follows:
 To provide an opportunity for lower income groups to acquire property
without difficulty in the form of shares .
 To cater mainly to the need of individual investors whose means are small.
 To manage investors’ portfolios in a manner provides regular income, growth,
safety, liquidity & diversification. Enforcement
ORGANIZATION OF A MUTUAL FUND

There are many entities involved and the diagram below illustrates the
organizational set up of a mutual fund
16
Organization of a Mutual Fund
A Mutual Fund is set up in the form of trust, which has sponsor, trustees, asset
management company (AMC), and custodian. The trust is established by sponsor or
more than one sponsor who is like a promoter of company. The trustee of mutual fund
holds its property for the benefit of unit holders. Asset Management Company
(AMC) approved by SEBI manages the funds by making investments in various types
of securities. Custodian, who registered with SEBI, holds the securities of the fund in
its custody. The trustees are vested with the general power of superintendence and
direction over AMC. They monitor the performance and compliance of SEBI
regulations by mutual fund.
SEBI regulations required that at least two thirds of the directors of trustee
company or board of trustees must be independent i.e. they should not be associated
with sponsors. Also, 50% of the directors of the AMC must be independent. All
mutual funds are required to be registered with SEBI before they launch their
schemes.
17
Types of Mutual Funds
Open-end fund:-
The term mutual fund is the common name for an open-end investment company.
Being open-ended means that, at the end of every day, the fund issues new shares to
investors and buys back shares from investors wishing to leave the fund.
Mutual funds may be legally structured as corporations or business trusts but in either
instance are classed as open-end investment companies by the SEC.
. Close-Ended Schemes
Schemes that have a stipulated maturity period (ranging from 3 to 15 years) are called
close-ended schemes. Investor can invest directly in the scheme at the time of the
initial issue and thereafter they can buy or sell the units of the scheme on the stock
exchanges where they are listed. The market price at the stock exchange could vary
from the scheme's NAV on account of demand and supply situation, Unit holders'
expectations and other market factors.
One of the characteristics of the close-ended schemes is that they are generally traded
at a discount to NAV but closer to maturity, the discount narrows. Some close-ended
schemes give an additional option of selling units directly to the Mutual Fund through
periodic repurchase at NAV related prices. SEBI Regulations ensure that at least one
of the two exit routes is provided to the investor.
Exchange-traded funds:-
A relatively recent innovation, the exchange-traded fund or ETF, is often structured as
an open-end investment company. ETFs combine characteristics of both mutual funds
and closed-end funds. ETFs are traded throughout the day on a stock exchange, just
18
like closed-end funds, but at prices generally approximating the ETF's net asset value.
Most ETFs are index funds and track stock market indexes. Shares are issued or
redeemed by institutional investors in large blocks (typically of 50,000). Most
investors purchase and sell shares through brokers in market transactions. Because the
institutional investors normally purchase and redeem in kind transactions, ETFs are
more efficient than traditional mutual funds (which are continuously issuing and
redeeming securities and, to effect such transactions, continually buying and selling
securities and maintaining liquidity positions) and therefore tend to have lower
expenses.
Bond Funds:-
Bond fund provide fixed return for those who desire safety. The savings of investors
are invested in varies kinds of bond in which investment is made primarily with the
investment objective of safety. Bond funds are more liquid, diversified and
conservative investment with modest capital gains. Price of bond mutual funds
fluctuates with changing interest rates. In India, Mutual Funds income is tax exempt
& as such no such classified Mutual Funds have come to exist as in the USA where
tax-free income in municipal bond funds or other fixed income bearing securities is an
attractive investment.
Stock Funds:-
Stock fund are establish for those who are willing to accept significant risk in hope of
very high returns. These are called common stock funds. The assets held in fund are
entirely common stock of diversified list of Industrial Corporation. These are further
classified as ‘growth fund’ which assumes high risk to obtain stock to expected to
19
yield high return. When these funds are invested in stocks which play consistently
high dividend like blue chip companies, then it is known as income fund.
Equity funds:-
Equity funds, which consist mainly of stock investments, are the most common type
of mutual fund. Equity funds hold 50 percent of all amounts invested in mutual funds
in the United States. Often equity funds focus investments on particular strategies and
certain types of issuers.
Index Funds and Active Managed Funds:-
An index fund maintains investments in companies that are part of major stock (or
bond) indices, such as the S&P 500, while an actively managed fund attempts to
outperform a relevant index through superior stock-picking techniques. The assets of
an index fund are managed to closely approximate the performance of a particular
published index. Since the composition of an index changes infrequently, an index
fund manager makes fewer trades, on average, than does an active fund manager. For
this reason, index funds generally have lower trading expenses than actively managed
funds, and typically incur fewer short-term capital gains which must be passed on to
shareholders.
Income Funds:-
Income fund is established to maximize the current income to investors. There are two
aspects of income fund via, low investment risk generating constant income & high
investment risk generating maximum income. Investment is made in varies
combinations of high yielding common stock and bonds with the view to extract
income on regular basis with safety of principal amount of investment. Conservative
investment strategy dominates the income funds with modest amount risk
20
Money market fund:-
Money market funds are used in short term liquid assets like certificate of deposits or
commercial papers and for them capital is raised by selling of share of investing
public at a price equal to assets value of the then existing shares outstanding plus a
loading fee or service charge. This is known as high liquid assets funds with very low
risk and virtually no capital loss. Interest income fluctuates because of volatile interest
rates, but investor get better yield than available on passbook saving account.
Specialized Funds:-
Specialized mutual funds envisage specializing investment in securities of firm of
certain industries or specific income producing securities. Such funds carry more risk
for lack of diversification approach.
Leveraged Funds:-
Leveraged Funds or borrowed funds are used in order to increase the size of value of
portfolio and benefit the shares holders by gain exceeding the cost of the borrowed
funds. Such funds are speculative and risky investments like short sales to take
advantages of declining market to realize gains in portfolio short sales.
Balanced Funds:-
Where assets are judicious mixture of industrial stocks and bonds. With a view to
embrace modest risk of investment and secure reasonable rate of return the funds
employed in high grade common stock with 25%-40% investment in conservative
fixed income securities like debentures, bonds and preference share
Growth Funds:-
Growth funds have the principal objective of capital appreciation of the investment
over a period of time. The investment is made in equity stock which has above
21
average growth potential. This is high risk investment fund with high capital gain
potential and low current income assurance.
Funds of funds:-
Funds of funds (FoF) are mutual funds which invest in other underlying mutual funds
(i.e., they are funds comprised of other funds). The funds at the underlying level are
typically funds which an investor can invest in individually. A fund of funds will
typically charge a management fee which is smaller than that of a normal fund
because it is considered a fee charged for asset allocation services. The fees charged
at the underlying fund level do not pass through the statement of operations, but are
usually disclosed in the fund's annual report, prospectus, or statement of additional
information. The fund should be evaluated on the combination of the fund-level
expenses and underlying fund expenses, as these both reduce the return to the
investor.
Hedge funds:-
Hedge funds in the United States are pooled investment funds with loose SEC
regulation and should not be confused with mutual funds. Some hedge fund managers
are required to register with SEC as investment advisers under the Investment
Advisers Act. The Act does not require an adviser to follow or avoid any particular
investment strategies, nor does it require or prohibit specific investments. Hedge
funds typically charge a management fee of 1% or more, plus ”performance fee” of
20% of the hedge fund’s profits. There may be a "lock-up" period, during which an
investor cannot cash in shares. A variation of the hedge strategy is the 130-30 fund for
individual investors.
22
The advantages of investing in a Mutual Fund are:
1. Professional Management: Investor avail of the services of experienced and
skilled professionals who are backed by a dedicated investment research team which
analyses the performance and prospects of companies and selects suitable investments
to achieve the objectives of the scheme.
2. Affordability:
With many mutual funds, investor can begin buying units with a relatively small
amount of money (e.g., Rs 5000 for the initial purchase). Some mutual funds also let
investor buy more units on a regular basis with even smaller installments (e.g., Rs 500
per month).
3. Diversification: Mutual Funds invest in a number of companies across a broad
cross-section of industries and sectors. This diversification reduces the risk because
seldom do all stocks decline at the same time and in the same proportion. Investor
achieves this diversification through a Mutual Fund with far less money than they can
do on there own.
4. Convenient Administration: Investing in a Mutual Fund reduces paperwork and
helps investor avoid many problems such as bad deliveries, delayed payments and
unnecessary follow up with brokers and companies. Mutual Funds save investor’s
time and make investing easy and convenient.
5. Return Potential: Over a medium to long-term, Mutual Funds have the potential
to provide a higher return as they invest in a diversified basket of selected securities.
6. Low Costs: Mutual Funds are a relatively less expensive way to invest compared
to directly investing in the capital markets because the benefits of scale in brokerage,
custodial and other fees translate into lower costs for investors.
23
7. Liquidity: In open-ended schemes, investor can get there money back promptly at
net asset value related prices from the Mutual Fund itself. With close-ended schemes,
investor can sell there units on a stock exchange at the prevailing market price or avail
of the facility of direct repurchase at NAV related prices which some close-ended and
interval schemes offer them periodically.
8. Transparency: Investor get regular information on the value of there investment in
addition to disclosure on the specific investments made by there scheme, the
proportion invested in each class of assets and the fund manager's investment strategy
and outlook.
9. Flexibility: Through features such as regular investment plans, regular withdrawal
plans and dividend reinvestment plans, investor can systematically invest or withdraw
funds according to there needs and convenience.
10. Choice of Schemes: Mutual Funds offer a family of schemes to suit investor’s
varying needs over a lifetime.
11. Well Regulated: All Mutual Funds are registered with SEBI and they function
within the provisions of strict regulations designed to protect the interests of
'investors. The operations of Mutual Funds are regularly monitored by SEBI.
12. Performance Monitoring: The value of most mutual funds is reported daily in
the financial press and on many internet sites, allowing investor to continually
monitor the performance of there investment.
24
RESEARCH METHODOLGY:
Research Methodology is a very organized and systematic medium through
which a particular case or problem can be solved. It is analytical, descriptive and
quantitative research where the comparison between the different mutual fund
schemes is made on the basis of risk, volatility and return.
It is a step-by-step logical process, which involves:
 Defining a problem
There are many mutual funds schemes in market. It is very difficult to study all
these schemes at a time within two months (Project Period). So it is necessary to
select some schemes for performance measurement.
 Laying the objectives of the research
To find out some appropriate Mutual fund schemes for analysis.
 Sources of data
Office survey, Internet and Secondary data.
25
DATA ANALYSIS
Mutual Fund Companies in India
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.
Kothari Pioneer was the first private sector mutual fund company in India which has
now merged with Franklin Templeton. Just after ten years with private sector player’s
penetration, the total assets rose up to Rs. 1218.05 bn. Today there are 33 mutual fund
companies in India.
Major Mutual Fund Companies in India
Birla Sun Life Mutual Fund
HDFC Mutual Fund
Kotak Mahindra Mutual Fund
Reliance Mutual Fund
26
Survey Result:-
Investment Behavior of people According to age

AGE
Up to 35 Above 45
35-45 Yrs. Total
Yrs. Yrs.
RISK
STRUCTURE
Low 21 34 84 139
Medium 54 77 72 203
High 103 84 43 230
178 195 199 572
27
Type of investment made by people :
Type of
No of people Percentages
Investment
Banks 600 100 %
PPF 524 87. 33 %
Postal Schemes 123 20.50 %
Mutual Funds 279 46.50 %
Insurances 358 59.66 %
Stock Market 297 49.50 %
Real-Estate 473 78.83 %
Gold 528 88.00 %
Commodity Market 97 16.16 %
Investment Analysis
120
Banks
100
PPF
80 Postal Schemes
% of people
Mutual Funds
60
Insurances
40
Stock Market
20 Real-Estate
Gold
0
Commodity Market
Type of investment
28
Study of three schemes of each of these Mutual Funds:
A} AMC:- HDFC ASSET MANAGEMENT CO. LTD
Mutual Fund: - HDFC Mutual Fund
Setup Date: - Jun-30-2000
Sponsor:-Housing Development Finance Corporation Limited, Standard Life
Investments Limited.
Trustee:-HDFC Trustee Company Limited
Chairman:-Mr. Deepak Parekh
Chief Executive Officer / MD:-Mr. Milind Barve (Managing Director)
Chief Investment Officer:- Mr. Prashant Jain
Compliance Officer:- Mr. Yezdi Khariwala
Investor Service Officer:- Mr. John Mathews
Assets under management:- Rs. 53858.63 crore as on July-1-2016
There are many fund schemes by Kotak Mahindra Mutual Fund. I selected
three of these schemes viz.
Schemes Names
1. HDFC Growth-g
2. HDFC equity diversified fund- growth
3. HDFC top 200 fund – growth
29
1) HDFC Growth-G
Fund Objective:-
The scheme is aimed at generating long-term capital appreciation by investing
80-100 per cent of its assets in equity and equity-related instruments. Exposure to debt
and money market instruments would be around 20 % of the corpus.
Asset Allocation
As on
% Net Assets
01/07/16
Equity 92.14
Debt 0.48
Others 7.38
Modern Portfolio Stat Volatility Measures
R-Square 0.93 Mean 27.09
Alpha 4.70 Standard 26.13

Deviation
Beta 0.91 Sharpe Ratio 0.84
Average Mkt Cap (Rs Cr) 22,766.00

Market Capitalization % of Portfolio
Giant 46.00
Large 11.85
Mid 34.52
Small 7.16
Tiny --
30
Relative Performance (Fund Vs Category Average)
2) HDFC EQUITY FUND-(Growth)

Fund Objective:-
The scheme seeks to provide long-term capital appreciation by predominantly
investing in high growth companies
Asset Allocation
As on 01/07/16 % Net Assets
Equity 98.38
Debt 0.27
Others 1.35

Standard
Alpha 2.08 25.65
Deviation

Giant 25.83
Large 16.61
Mid 50.75
Small 6.20
Tiny --
31
3) HDFC TOP 200 FUND-(Growth)

Fund Objective:-
The scheme seeks capital appreciation and would invest up to 90 per cent in
equity and the remaining in debt instruments. Also, the stocks would be drawn from
the companies in the BSE 200 Index as well as 200 largest capitalized companies in
India.
Asset Allocation
Equity 97.02
Debt 0.00
Others 2.98

R-Square 0.97 Mean 2713
Standard
Alpha 4.85 25.49
Deviation

Giant 45.22
Large 21.41
Mid 32.81
Small 0.57
Tiny --
32
B} AMC:- BIRLA SUN LIFE ASSET MANAGEMENT COMPANY

LTD.
Mutual Fund:- Birla Sun Life Mutual Fund
Setup Date:- Dec-23-1994
Sponsor:- Aditya Birla Nuvo Limited, Sun Life (India) AMC Investments Inc.
Trustee:- Birla Sun Life Trustee Company Private Limited
Chairman:- Mr. Donald Stewart
Chief Executive Officer / MD:- Mr. Anil Kumar
Chief Investment Officer:- Mr. A. Balasubramanian
Compliance Officer:- Mr. Rajiv Joshi
Investor Service Officer:- Mrs. Molly Kapoor
There are many fund schemes by Kotak Mahindra Mutual Fund. I selected three
of these schemes viz.
33
Scheme Name:
1. Birla Sun Life Buy India (G)
2. Birla Sun Life Equity Fund (G)
3. Birla SL Gilt Plus-Liquid (G)
1) Birla Sun Life Buy India (G)
Fund Objective:-
The scheme primarily seeks capital growth, with a secondary objective
of income generation with focus on consumer and health care sectors
Asset Allocation
Equity 98.27
Debt 0.00
Others 1.73

Alpha -6.22 Standard 24.20
Deviation

Giant 14.79
Large 25.77
Mid 28.97
Small 30.47
Tiny --
34
2) Birla Sun Life Equity Fund (G)
Fund Objective:-
The fund seeks long-term growth of capital and regular income
through 90% investment in equities and 10% in debt and money market portfolio.
Asset Allocation
Equity 83.08
Debt 11.29
Others 5.63

Deviation
35
Giant 50.45
Large 25.65
Mid 22.44
Small 1.45
Tiny --
3) Birla SL Gilt Plus-Liquid (G)
Fund Objective:-
The scheme seeks to generate income and capital appreciation through
investments in government securities and T-Bills with short to medium term residual
maturities.
Asset Allocation

Equity 0.00
Debt 0.00
Others 100.00
36

Standard
Alpha 1.16 0.78
Deviation
Beta -0.06 Sharpe Ratio 1.34
Average Maturity 0.00 yrs.
Average Credit Rating Cash
Average Yield to Maturity (%) --
No of Holdings 1
37
C} AMC KOTAK MAHINDRA ASSET MGMT CO. LTD.
Mutual Fund:- Kotak Mahindra Mutual Fund
Setup:- Date Jun-23-1998
Sponsor:- Kotak Mahindra Bank Limited
Trustee:- Kotak Mahindra Trustee Co. Limited
Chairman:- Mr. Uday Kotak
Chief Executive Officer / MD:- Mr. Sandesh Kirkire
Chief Investment Officer:-
Compliance Officer:- Mr. V. R. Narasimhan
Investor Service Officer:- Mr. R. Chandrasekaran
There are many fund schemes by Kotak Mahindra Mutual Fund. I selected three of
these schemes viz
Scheme Name
1) Kotak 30 (G)
2) Kotak Equity FOF-G
3) Kotak Opportunities Fund (G)
1) Kotak 30 (G)
Fund Objective:-
The scheme seeks capital appreciation, through investments in equities. The
fund portfolio would generally comprise of around 30 companies which may go
upto 39 companies. These companies may or may not be the same which
constitute the Sensex or Nifty.
38
Asset Allocation
Equity 89.75
Debt 4.95
Others 5.30
R-Squared 0.94 Mean 26.46

Deviation

Giant 62.31
Large 23.88
Mid 11.60
Small 0.82
Tiny --
Investment Valuation Stock Portfolio
Portfolio P/B Ratio 4.53
Portfolio P/E Ratio 24.86
39
2) Kotak Equity FOF-G
Fund Objective:-
To invest predominantly in a basket of open-ended diversified equity schemes
across all mutual fund houses in India
Asset Allocation
Equity 99.35
Debt 0.00
Others 0.65

Alpha -1.75 Standard 26.12
Deviation
40
3) Kotak Opportunities Fund (G)
Fund Objective:-
The scheme aims to invest in a mix of large and mid cap stocks across
sectors based on performance and potential of companies within the sectors.
Asset Allocation
Equity 88.64
Debt 5.07
Others 6.29

Standard
Alpha 2.73 30.76
Deviation

Giant 42.35
Large 26.01
Mid 29.87
Small 1.78
Tiny --
41
D} AMC RELIANCE CAPITAL ASSET MANAGEMENT LTD.
Mutual Fund:- Reliance Mutual Fund
Setup Date :-Jun-30-1995
Sponsor:- Reliance Capital Limited
Trustee:- Reliance Capital Trustee Co. Ltd.
Chairman:-Mr. Anand Jain
Chief Executive Officer / MD:- Mr. Vikrant Gugnani
Chief Investment Officer:- Mr. K Rajagopal
Compliance Officer:- Mr. Balkrishna Kini
Investor Service Officer:- Mr. Milind Nesarikar
Assets under management:-Rs. 88616.46 crore as on July-1-2016

There are many fund schemes by Reliance AMC but I choose following three
for analysis.
Scheme Name
1. Reliance Equity Opportunities-(G)
2. Reliance RSF - Equity
3. Reliance Growth Fund - (G)
1) Reliance Equity Opportunities-G
Fund Objective:-
The scheme aims to invest in stocks across those sectors and industries where
India’s strong inherent potential is increasingly becoming visible to the world, which
are driving our economy and whose fundamental future growth is influenced by
ongoing economic reforms, FDI inflows and infrastructural changes.
42
Asset Allocation
Equity 89.04
Debt 0.00
Others 10.96
Modern Portfolio Stat

Volatility Measures

Standard
Alpha -3.48 28.93
Deviation

Giant 22.65
Large 13.93
Mid 43.33
Small 20.09
Tiny --
43
2) Reliance Regular Savings Equity
Fund Objective:-
The scheme aims to generate consistent returns by actively investing in equity
or equity related securities. It will invest at least 80 per cent of its assets in equity and
equity related securities. Up to 20 per cent of its assets will be invested in debt and
money market instruments with an average maturity of 5 to10 years.
Asset Allocation
Equity 75.80
Debt 0.00
Others 24.20

Alpha Standard
5.98 31.90
Deviation
Beta
0.92 Sharpe Ratio 0.73

Giant 31.90
Large 6.62
Mid 40.95
Small 20.54
Tiny --
44
4) Reliance Growth Fund - (G)
Fund Objective:-
The scheme aims at long term growth of capital through research based
investment approach. The funds will be invested in Equity and equity related
instruments, and there will be an exposure to debt and money market instruments
also.
Asset Allocation
Equity 71.36
Debt 0.00
Others 28.64
Modern Portfolio Stat

Volatility Measures
R-Square 085 Mean 25.85

Standard
Alpha 2.35 29.08
Deviation
45
Giant 15.65
Large 23.09
Mid 52.15
Small 9.11
Tiny --
46
FINDINGS
The collection of information is based on the secondary probe. The information has
been collected through various books, and internet.
An attempt has been made to evaluate the performance of the selected mutual
fund schemes. Performance of mutual fund schemes has been evaluated by using the
following performance measures.
When I look for a mutual fund investment (mostly actively managed funds), not only
I am concerned with a fund’s past performance and costs, but its risk factors as well.
Before getting into the details, let’s first see how risk is defined in finance.
According to Investopedia, risk is the chance of an investment’s actual return will be
different than expected. This includes the possibility of losing some or all of the
original investment. It is usually measured by calculating the standard deviation of the
historical returns or average returns of a specific investment. A fundamental idea in
finance is the relationship between risk and return. The greater the amount of risk that
an investor is willing to take on, the greater the potential return. The reason for this is
that investors need to be compensated for taking on additional risk.
For each fund, Morningstar offers two sets of data to help investors get a sense of the
risk of owning a particular fund (enter a fund symbol to get a quote, then click “Risk
Measures”):
47
Basis for the comparisons:-
 Mean
 Standard Deviation
 R-Square
 Beta
 Alpha
In this part, I will mainly discuss mean, standard deviation, beta, R-square, and alpha
and how to use these measurements to assess an investment’s risk.
What they are
Simply speaking, MEAN is the mathematical average of a set of data. If, for
example, a stock XYZ’s annual return in the past three years are 10%, 5% and 15%,
respectively, then the arithmetic mean of the stock’s return is 10%, the average 10%,
5% and 15%. Once the mean is known, we can calculate stock XYZ’s STANDARD
DEVIATION, which measures the dispersion of the stock’s annual returns (i.e., 10%,
5% and 15%) from the mean expected return (10%). Therefore, the further away an
equity’s annual return from the mean, the higher the standard deviation. In finance,
standard deviation is used to gauge equity’s volatility, whether the equity is a stock or
a mutual fund.
During the recent market sell-off, the majority of stocks followed the
movement of the general market and turned lower; the only difference among stocks
is the extent of the downturn as compared to the benchmark. The risk that a stock
tends to go along with the general market is captured by BETA, also known as
systematic risk (or market risk), which measure how an individual stock or fund reacts
to the general market fluctuations. By definition, a benchmark (or index) has a beta of
1.00 and the beta of equity is relative to this value. If the movement of a stock or fund
can be completely explained by the movements of the general market, then this stock
or fund will have an R-SQUARE of 100. According to Morningstar, R-squared,
represented by a percentage number ranging from 0 to 100, characterizes equity’s
movement against a benchmark. An R-squared that equals to 100 means all the
equity’s movements are in-line with the benchmark.
48
With the Greek letter beta, investors can have a sense of how sensitive equity
is in relation to the broad market. If investors decide to take on a higher risk by
investing in a volatile equity that carries a larger beta, then in theory, they should be
rewarded with a higher than average return. The difference between the realized
return and the average expected return is measured by another Greek letter ALPHA.
A positive alpha indicates that the equity exceeds its expectations against the
respective benchmark.
Comparison between Schemes in HDFC on following basis:

R- Standard
Fund Name Mean Alpha Beta
square Deviation
HDFC Growth-g 27.09 0.93 4.70 0.91 26.31
HDFC equity 24.35 0.95 2.08 0.90 25.65

diversified fund- g
HDFC top 200 fund 27.13 0.96 4.85 0.90 25.49

–g
Suggestions based on comparison:
When we compare the Modern Portfolio Statistics means R-square, Beta and Alpha it
is found that R-square and Beta are very close to benchmark but Alpha is much vary
than expectation but it is positive it means these funds are statistically good for
investment. When we compare Mean v/s Standard Deviation they are very close to
each other, hence these fund’ benchmarks are followed by funds performance.
49
Comparison between Schemes in Birla sun life on following
basis :
Fund Name Mean R- Alpha Beta Standard

square Deviation
Birla Sun Life 13.44 0.77 -6.22 0.77 24.20
Buy India (G)
Birla Sun Life 25.81 0.95 4.91 0.87 24.73
Equity Fund (G)
Birla SL Gilt 6.27 6.27 1.66 -0.06 0.78
Plus-Liquid (G)
Suggestion based on comparison:
is found that R-square and Beta are not close to the benchmark also Alpha is much
vary than expectation, it is negative in case of Birla Sun Life Buy India (g) it means
these funds are not good for investment. When we compare Mean v/s Standard
Deviation they are also showing different fingers, hence these fund’ benchmarks are
not by funds. Hence poor performance by fund.
50
Comparison between Schemes in Kotak on following basis :

square Deviation
Kotak 30 (G) 26.46 0.94 3.13 0.96 27.23
Kotak Equity FOF- 20.76 0.94 -1.75 0.92 26.12

G
Kotak Opportunities 27.63 0.88 2.73 1.04 30.76

Fund (G)
is found that R-square and Beta are very close to benchmark but Alpha of Kotak
Equity FOF-G fund is negative it means these funds are statistically good Except of
Kotak Equity FOF -G fund. When we compare Mean v/s Standard Deviation they are
very close to each other, hence these fund’ benchmarks are followed by funds
performance.
51
Comparison between Schemes in Reliance on following basis:

square Deviation
Reliance Equity 20.21 0.87 -3.48 0.98 28.93

Opportunities-(G)
Reliance RSF - 28.46 0.63 5.98 0.92 31.90

Equity
Reliance Growth 25.84 0.85 2.35 0.97 29.08

Fund - (G)
is found that Beta is very close to benchmark but R-square is much vary than
expectation, it is not close to 100%. Alpha is negative in case of Reliance Equity Opp.
(G); it means these funds are not statistically good for investment. When we compare
Mean v/s Standard Deviation they are not close to each other, hence these fund’
benchmarks are not followed by funds performance. There is risk if invested in these
Funds.
52
CONCLUSIONS
After studying & analyzing different mutual fund schemes the following conclusions
can be made:
1. Winning with stocks means performing at least as well as a major market index
over the long haul. If one can sidestep the common investor mistakes, then one has
taken the first and biggest step in the right direction.
2. Diversified stock portfolios have offered superior long term inflation protection.
Equities are especially important today with people living longer and retiring early.
3. To understand stock funds, one needs to be familiar with the characteristics of the
different types of companies they hold.
4. Portfolio managers have done a fairly good job in generating positive returns. It
may lead to gain investors confidence. Thus over all good performance of the funds is
a sign of development in new era in capital market.
5. On the basis of the analysis the performance of the schemes during the study period
can be concluded to be good.
6. Those who want to eliminate the risk element but still want to reap a better then it
would be advisable to go for debt or arbitrage schemes which ensure both safety and
returns.
7. So the future of mutual funds in India is bright, because it meets investor s needs
perfectly.
8. This will give boost to Indian investors and will attract foreign investors also. It
will lead to the growth of strong institutional framework that can support the capital
markets in the long run.
53
LIMITATIONS
The project is unable to analyze each and every scheme of mutual funds to
create awareness about risk and return.
Different fund managers adopt different strategies to improve performance.
Usually there is a tendency among investors to ignore the consistency of returns
over a period of time rather they focus on absolute returns generated in the short term
It is very difficult to enter into mutual fund business without knowing knowledge
of share market, because share market is very volatile in nature.
54
BIBLIOGRAPHY
Books:-
1) Investment Analysis and Portfolio Management – Prasanna Chandra
Third addition
2) Securities Analysis and Portfolio Management – A. V. Avadhani
Second Addition
Web Sites:-
1) www.moneycontrol.com
2) www.valueresearchonline.com
3) www.mutualfundindia.com
4) www.investopedia.com
5) www.amfiindia.com
55
56

A Project Report On Study of Performance

Uploaded by

Copyright:

Available Formats

A Project Report On Study of Performance

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

A Project Report On Study of Performance

Uploaded by

Copyright:

Available Formats

A Project Report

“Study of Performance of Mutual Fund Schemes (Equity Fund)”

“DAWNAY DAY AV INDIA ADVISORY PVT LTD”

“Mr. ARUN KUMAR SINGH”

Under the guidance of

“Prof. Mayur Punde”

In partial fulfillment of the requirement for the award of the degree of

Master of Business Administration (MBA)

AISSMS Institute of Management (MBA)

from appropriate persons. So now it is the right time to express me

sincere gratitude to all those who are helping me to complete this

I express m y sincere thanks to Mr. Abhay Khandelwal giving me

an opportunit y to do project in Downey Day India Advisory Pvt Ltd.

I express m y sincere thanks to m y company guide Mr. Rajiv Ranjan

team leader and Mr. Sameer Khairat y Senior Relationship Manager.

I whole heartedl y thanks to m y facult y guide Prof. Mayur Punde

sir, who is giving me valuable suggestions for completing my project

Mr. Arun Kumar Singh

Summer Project Titled “Study of Performance of Mu tual Fund

Schemes (Equity Fund)”to m y satisfaction and as per the requirements

of the Two Year Full-Time MBA Programme.

Project Guide Director

(Prof. Mayur Punde) (Dr. Sanjay Pat ankar)

Sr. No. Title Page No.

3. OBJECTIVES OF THE STUDY 12

Right from its existence, Banks, whether nationalize or corporate, always

important role to play in providing alternate investment avenue to entire gamut of

investors in scientific and professional manner.

structural changes and gained prominent position in Financial Industry. Because of

easy of investments, professional management and diversification more and more

investors into the Mutual Funds.

So I carried out project in performance appraisal of some Mutual Fund

the investors to invest in Mutual Funds over other investment avenues.

services to retain client and make them happy investor.

DAWNAY DAY AV INDIA ADVISORY PVT LTD

ABOUT DAWNAY DAY …………………………………………………………

ABOUT DAWNAY DAY AV ……………………………………………………

RANGE OF SERVICES ………..…………………………………………………

STOCK BROKING ……………………………………………………………

MUTUA L FUNDS ……………………………………………………………

ONLINE STOCK BROKING ……………………………….………………………

ADVANTAGES OF DAWNAY DAY AV SECURITIES …………………………

experience building financial services businesses around the globe.

Dawnay Day AV is an innovative financial services provider and advisory firm,

With an unrelenting focus on twin values of Integrity and “Client First"

Policy, Dawnay Day AV provides advisory services to individuals and institutional

clients in India and abroad.

Company’s mission is to forge strong, sustained relationships with clients by

companies approach to investing underscores the need for personalized solutions in

today’s financial markets.

processes, risk management systems, and staffing are concentrated solely on

controlled investment process.

Dawnay, Day was originally established as an issuing house in 1928 in London,

three broad spheres of operation - Property Investments, Principal Investments and

is greater than $1 billion.

structured finance companies, asset management companies, securities brokerage

companies, and property-related advisory services.

Working through subsidiary companies and affiliates, firm deliver high-quality,