CAMPARATIVE STUDY OF TATA,ICICI AND HDFC MUTUAL FUNDS (1).doc

CHAPTER-1

A

PROJECT REPORT ON

A COMPARATIVE STUDY OF TATA MUTUAL FUND WITH ICICI AND HDFC MUTUAL FUNDS IN

TATA Asset Management Ltd

ABSTRACT

A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. The income earned through these investments and the capital appreciation realized 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. The flow chart below describes broadly the working of mutual funds.

Mutual fund is a mechanism for pooling the resources by issuing units to the investors and investing funds in securities in accordance with objectives as disclosed in offer document.

Investments in securities are spread across a wide cross-section of industries and sectors and thus the risk is reduced. Diversification reduces the risk because all stocks may not move in the same direction in the same proportion at the same time. Mutual fund issues units to the investors in accordance with quantum of money invested by them. Investors of mutual funds are known as unit holders.

CONTENTSS.NOCONTENTSPAGENO

1CHAPTER-I

INTRODUTION

OBJECTIVES OF THE STUDY

ADVANTAGESSCOPE OF THE STUDY RESEARCH & METHODS

MEANS OF DATA -COLLECTION

1-24

2CHAPTER-II

COMPANY PROFILE

25-43

3CHAPTER-III

REVIEW OF LITERATURE

44-47

4CHAPTER-IV

DATA ANALYSIS & INTERPRETATION

48-78

5CHAPTER-VFINDING

SUGGESTIONS

CONCLUSION

79-81

6CHAPTER-VIBIBILOGRAPHY

82-82

CHAPTER-I

INTRODUTION OBJECTIVES OF THE STUDY

NEEDS OF THE STUDY

SCOPE OF THE STUDY

RESEARCH & METHODSINTRODUCTIONMany mutual funds in India are competing with one another. Every mutual fund in India has its own fund schemes to cover their customer. It gives a healthy competition and wealthy product to their customers. To cover the customer and mobilize the funds in the market every mutual fund company or Asset Management Company comes with a new scheme. A Mutual Fund is a TRUST that pools the savings of a number of investors who share a common financial goal. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. The income earned through these investments and the capital appreciation realized 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 a common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost. The flowchart below describes broadly the working of Mutual Funds. .

Mutual fund is a mechanism for pooling the resources by issuing units to the investors and investing funds in securities in accordance with objectives as disclosed in offer document.

Investments in securities are spread across a wide cross-section of industries and sectors and thus the risk is reduced. Diversification reduces the risk because all stocks may not move in the same direction in the same proportion at the same time. Mutual fund issues units to the investors in accordance with quantum of money invested by them. Investors of mutual funds are known as unit holders.

The investors in proportion to their investments share the profits or losses. The mutual funds normally come out with a number of schemes with different investment objectives that are launched from time to time. A mutual fund is required to be registered with Securities and Exchange Board of India (SEBI), which regulates securities markets before it can collect funds from the public.

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.

TATA Mutual fund offering various funds that are in the category of equity, debt and government securities. Of this total category, the researcher has giving, which funds are doing better and which are giving high returns. The study also concentrated on the new fund of the TATA Mutual Fund called SIP Fund.

CONCEPTS

Types of Mutual fund schemes

Wide variety of Mutual Fund Schemes exists to cater to the needs such as financial position, risk tolerance and return expectations etc. The table below gives an overview into the existing types of schemes in the Industry.

By Structure

1. Open-Ended schemes

2. Close-Ended schemes

3. Interval scheme1. Open-ended fund/schemes : An open - ended scheme is available for subscription and repurchase on a continuous basis. These schemes do not have a fixed maturity period. The key feature of open-ended scheme is liquidity.2. Closed - ended fund/schemes A close-ended scheme has a stipulated maturity period e.g.: 5-7 years. The fund is open for subscription only during a specific period at the time of launch of scheme. Investors can invest in the scheme at the time of the initial public issue and there after they can buy or sell the units of the scheme on the Stock Exchanges where the units are listed.Schemes according investment objective

A scheme can also be classified as Growth Scheme, Income Scheme, and Balanced Scheme considering its investment objective.

1. Growth scheme

The aim of growth scheme is to provide capital appreciation over the medium to long term. Such schemes normally invest major part in equity and have high risks. It provides different options to the investors like Divided option, Capital appreciation, etc, and the investor may choose an option depending on their preferences. It is good for investors having a long-term outlook seeking appreciation over a period of time.

2. Income scheme / Debt Funds

The aim of income scheme is to provide regular and steady income to investors. Such schemes generally invest in fixed Income Securities such as Bonds, Corporate Debentures, Government Securities and Money Market Instruments. Such funds are less risky when compared to equity schemes.3. Balanced fund

The aim of balanced funds is to provide both growth and regular income as such schemes invest both in equities and fixed income securities in the proportion indicated in their offer document. These are appropriate for investors looking for moderate growth. It is affected because of fluctuations in share prices in the stock market.

4. Liquid Fund

These funds are also income funds and their aim is to provide easy liquidity, preservation of capital and moderate income. These schemes invest exclusively in safer short-term instrument such as Treasury Bills, Certificate of Deposits, Commercial Paper and Inter-Bank Call Money, Government Securities etc.

5. Gilt Fund

These funds invest exclusively in government securities. Government securities have no default risk. NAVS of these schemes also fluctuate due to change in interest rates and other economic factors as in the case with income or debt oriented schemes.

6. Sector Specific Funds / schemes

These are the funds/ schemes, which invest in the securities of only those sectors or industries as specified in the offer document. E.g., Pharmaceuticals, Software, Fast Moving Consumer Goods (FMCG) etc. While these funds may give higher returns, they are more risky compared to diversified funds.7. Tax saving schemes

These schemes offer tax rebates to the investors under specific provision of the Income Tax Act, 1961 as the government offers tax incentives for investment in specified avenues e.g. Equity Linked Saving Scheme (ELSS).

Frequently Used TermsNet Asset Value Net Asset Value is the market value of the assets of the scheme minus its liabilities. Per unit NAV is the net asset value of the scheme divided by the number of units outstanding on the Valuation Date.Sale Price

It is the price you pay when you invest in a scheme. Also called Offer Price. It may include a sales load.

Repurchase Price

It is the price at which a close-ended scheme repurchases its units and it may include a back-end load. This is also called Bid Price.Redemption Price

It is the price at which open-ended schemes repurchase their units and close-ended schemes redeem their units on maturity. Such prices are NAV related.

Sales Load

It is a charge collected by a scheme when it sells the units. Also called, Front-end load. Schemes that do not charge a load are called No Load schemes.

Repurchase or Back-End Load

Its a charge collected by a scheme when it buys back the units from the unit holders.

CHOOSING A SCHEME

The investor must read the offer document of the mutual fund schemes very carefully. They may also look into the past track record of performance of the schemes or other schemes of the same MF. They may also compare the performance with other schemes having similar investment objectives. Though past performance of a scheme is not an indicator of its future performance and good performance in the past may or may not be sustained in the future, this is one of the important factors for making investment decision.The following tools are used to calculate the Return, Mean, Standard deviation, Covariance and the Beta.

RETURN (R) = End value beginning value

Beginning value

MEAN: X

= Sum of all values

No. Of valuesSTANDARD DEVIATION:\ = Square root of {sum of (X -x)} NCOVARIANCE:

= SUM OF (RX-RX) (RY-RY) NBETA:

= COVARIANCE MARKET VARIANCE ADVANTAGES OF MUTUALFUNDS:The advantages of investing in a Mutual Fund are:

1. Professional Management.

2. Diversification.

3. Convenient Administration.

4. Return Potential.

5. Low Costs.

6. Liquidity.

7. Transparency.

8. Flexibility.

9. Tax benefit.

10. Well regulated.

INVESTMENT OBJECTIVE IN TATA MUTUAL FUNDS

TATA Equity Opportunity Fund

The objective is to focus on capitalizing on opportunities offered by equity market from time to time with a proactive fund management strategy.

TATA Select Equity Fund

The investment objective of the scheme would be to provide capital appreciation and / or dividend distribution by investing predominantly in a well-diversified portfolio of companies that have a relatively high dividend yield.

TATA Pure Equity Fund

To generate long term capital appreciation by investing in equity and equity related securities of Indian companies that are perceived to be potential growth stories.

TATA Infrastructure Fund

To generate long term capital appreciation in investing predominantly in companies with potential long term value from expected investments in Infrastructure oriented sectors.

TATA Growth Fund

The investment objective of the scheme would be to provide capital appreciation and / or dividend distribution by investing in companies from a maximum of six sectors, depending upon their growth prospects and valuation at any given point in time.

TATA Tax Savings Fund

The objective of the Scheme is to build a high quality growth oriented portfolio to provide to long-term capital gains to the investors. The Scheme aims at providing return through capital appreciation over the life of the Scheme.

TATA Balanced Fund

The objective is to provide periodic returns and capital appreciation through a judicious mix of equity and debt instruments, while simultaneously aiming to minimize capital erosion.

TATA Young Citizen Fund

The objective of the Scheme is to aim at helping parents/guardians/well wishers to save for financial needs of growing childrens and aim of giving lump sum capital growth to the beneficiary at the end of the chosen target period.

TATA Life Sciences and Technology Fund

The objective of this fund is to invest in fast growing; intellectual property driven new economy sectors which having the potential of creating long term values.

TATA Index Fund

The objective is to invest in securities that comprise S&P CNX Nifty in the same proportion so as to attain results commensurate with the Nifty.TATA Equity P/E Fund

This particular fund invests in at least 70% of its net assets in stocks with P/E ratio is less than of the BSE Sensex.

TATA Income Fund

The objective of the Scheme is to generate regular income and capital appreciation through investment in debt and related securities. And this fund is conservative income fund with exposure to high quality corporate debt.TATA Monthly income fund

The objectives of the schemes is to generate a conservative managed open ended monthly income fund with equity component not exceed with 10% of net assets.

TATA Floating Rate Fund

To generate income consistent with the prudent risk from a portfolio comprising substantially of floating rate debt instruments, fixed rate debt instruments swapped for floating rate return, and also fixed rate instruments and money market instruments.

TATA Liquidity Fund

The objective of the Scheme is to provide investors with a high level of income from short-term investments. The Scheme will focus on preserving the investors capital and liquidity. Investments will be made in money market and in investment grade debt instruments.TATA Gilt Securities Fund

The generate risk free return and provide medium to long term capital gains and income distribution to its unit holders while at all times and emphasizing the capital reservation.

TATA Contra Fund

To provide income distribution and /or medium to long term capital gains while at all times emphasizing the importance of capital appreciation.Investment Objective

The investment objective of the scheme is to provide capital appreciation and/or income in the form of dividend by investing predominantly in the equity and equity related instruments of the companies within the market capitalization range of the companies comprising CNX Nifty Junior Index. Of this, at least 51% will be invested in the equity and equity related instruments of the companies that comprise the CNX Nifty Junior Index. Up to 35% of net asset5s will be invested in the stocks of companies with the market capitalization below Rs.2000 crore as on the date of investment.

For Large Caps representative Indices are

BSE Sensex

S&P CNX Nifty

CNX Nifty Junior

CNX Nifty Junior is the select choice for large cap stocks.

CNX Nifty Junior Index

It is an index made up of 50 stocks after S&P CNX Nifty.

Stocks are filtered for liquidity.

Represents the next rung of 50 liquid stocks after Nifty.

Nifty and Nifty Junior are disjoint sets.

Quite a few stocks have been promoted from Nifty junior to Nifty from time to time.Mid Cap Stock

The Mid Cap stock represent smaller sized companies operating in growth sectors where the potential for upside is immense. These stocks have reasonable valuations with above-average earnings growth potential. With improving corporate governance and greater transparency in its management these stocks are expected to sustain their growth in stock prices at decent levels in future too.Investment options:1. Growth option

2. Dividend option

Pay-out

Re-investment1. Growth option

Under this option, ordinarily no dividend shall be declared. All income earned and profits realized in respect of a Unit issued under the option will continue to remain invested until repurchase and shall be deemed to have remained invested in the option itself, which will be reflected in the NAV.

2. Dividend option Under this option, the income and profits realized will distribute by way of dividend. The undistributed portion of the income will remain in the option and be reflected in the NAV, on an ongoing basis. Under the Reinvestment facility, the dividend will be automatically reinvested in the units of the Scheme. Under the Payout facility, the dividends so declared/distributed would be paid out to the unit holders.Liquidity

Repurchase at NAV based prices on all business days.

Facility to move from/to other open ended Schemes of the fund and inters se between Growth option and Dividend option.

Transparency

Announcement of NAV on all Business Days.

Portfolio disclosure every six months.

Systematic Investment Plan

Systematic Investment Plan (SIP) is available for planned and regular investments. Under SIP, unit holders can benefit by investing specified rupee amounts periodically for a continuous period. This concept is called Rupee Cost

Averaging. This program allows unit holders to save a fixed amount of rupees every month/quarterly by purchasing additional units of the Scheme.

Investment Pattern

Type of InstrumentMin. % of Net AssetsMax. % of Net AssetsRisk Profile

(a)Equity and equity related instruments of the companies within the market capitalization range of the companies comprising CNX Nifty Junior Index65%100%High

(b)Out of the above (a), equity and equity related instruments of companies that comprise CNX Nifty Junior Index51%100%High

(c)Equity and equity related instruments of the companies with the market capitalization below Rs.2000 crore as on the date of investment0%35%High

(d)

Money Market Instruments0%30%Low to Medium

The Ground Rules of Mutual Fund Investing

Moses gave to his followers 10 commandments that were to be followed till eternity. The world of investments too has several ground rules meant for investors who are novices in their own right and wish to enter the myriad world of investments. These come in handy for there is every possibility of losing what one has if due care is not taken.

1. Assess yourself Self-assessment of ones needs; expectations and risk profile is of prime importance failing which; one will make more mistakes in putting money in right places than otherwise. One should identify the degree of risk bearing capacity one has and also clearly state the expectations from the investments. Irrational expectations will only bring pain.2. Try to understand where the money is going It is important to identify the nature of investment and to know if one is compatible with the investment. One can lose substantially if one picks the wrong kind of mutual fund. In order to avoid any confusion it is better to go through the literature such as offer document and fact sheets that mutual fund companies provide on their funds.3. Don't rush in picking funds, think first One first has to decide what he wants the money for and it is this investment goal that should be the guiding light for all investments done. It is thus important to know the risks associated with the fund and align it With the quantum of risk one is willing to take. One should take a look at the portfolio of the funds for the purpose. Excessive exposure to any specific sector should be avoided, as it will only add to the risk of the entire portfolio. Mutual funds invest with a certain ideology such as the "Value Principle" or "Growth Philosophy". Both have their share of critics but both philosophies work for investors of different kinds. Identifying the proposed investment philosophy of the fund will give an insight into the kind of risks that it shall be taking in future.4. Invest. Dont speculate A common investor is limited in the degree of risk that he is willing to take. It is thus of key importance that there is thought given to the process of investment and to the time horizon of the intended investment. One should abstain from speculating which in other words would mean getting out of one fund and investing in another with the intention of making quick money. One would do well to remember that nobody could perfectly time the market so staying invested is the best option unless there are compelling reasons to exit.Dont put all the eggs in one basket This old age adage is of utmost importance. No matter what the risk profile of a person is, it is always advisable to diversify the risks associated. So putting ones money in different asset classes is generally the best option as it averages the risks in each category. Thus, even Investors of equity should be judicious and invest some portion of the investment in debt. Diversification even in any particular asset class (such as equity, debt) is good. Not all fund managers have the same acumen of fund management and with identification of the best man being a tough task; it is good to place money in the hands of several fund managers. This might reduce the maximum return possible, but will also reduce the risks

5. Be regular Investing should be a habit and not an exercise undertaken at ones wishes, if one has to really benefit from them. As we said earlier, since it is extremely difficult to know when to enter or exit the market, it is important to beat the market by being systematic. The basic philosophy of Rupee cost averaging would suggest that if one invests regularly through the ups and downs of the market, he would stand a better chance of generating more returns than the market for the entire duration. The SIPs (Systematic Investment Plans) offered by all funds helps in being systematic. All that one needs to do is to give post-dated cheques to the fund and thereafter one will not be harried later. The Automatic investment Plans offered by some funds goes a step further, as the amount can be directly/electronically transferred from the account of the investor.

Do your homework

It is important for all investors to research the avenues available to them irrespective of the investor category they belong to. This is important because an informed investor is in a better decision to make right decisions. Having identified the risks associated with the investment is important and so one should try to know all aspects associated with it. Asking the intermediaries is one of the ways to take care of the problem.

6. Find the right funds

Finding funds that do not charge many fees is of importance, as the fee charged ultimately goes from the pocket of the investor. This is even more important for debt funds as the returns from these funds are not much. Funds that charge more will reduce the yield to the investor. Finding the right funds is important and one should also use these funds for tax efficiency. Investors of equity should keep in mind that all dividends are currently tax-free in India and so their tax liabilities can be reduced if the dividend payout option is used. Investors of debt will be charged a tax on dividend distribution and so can easily avoid the payout options.7. Keep track of your investments

Finding the right fund is important but even more important is to keep track of the way they are performing in the market. If the market is beginning to enter a bearish phase, then investors of equity too will benefit by switching to debt funds as the losses can be minimized. One

Can always switch back to equity if the equity market starts to show some buoyancy.8. Know when to sell your mutual funds

Knowing when to exit a fund too is of utmost importance. One should book profits immediately when enough has been earned i.e. the initial expectation from the fund has been met with. Other factors like non-performance, hike in fee charged and change in any basic attribute of the fund etc. are some of the reasons for to exit. For more on it, read "When to say goodbye to your mutual fund."

Investments in mutual funds too are not risk-free and so investments warrant some caution and careful attention of the investor. Investing in mutual funds can be a dicey business for People who do not remember to follow these rules diligently, as people are likely to commit mistakes by being ignorant or adventurous enough to take risks more than what they can absorb. This is the reason why people would do well to remember these rules before they set out to invest their hard-earned money.RESEARCH METHODOLOGY

Comparative analysis of the existing funds in the TATA Mutual Funds by assessing the performance, features, risk and returns and direct interaction with the Individual customers of TATA Mutual fund, Distributors and Individual Institutions.

Research objectivesPrimary objective:

To study the performance TATA MUTUALFUND in comparison with HDFC and ICICI PRUDENTIAL MUTUALFUNDS.

Secondary objective:

To know the performance and features of various schemes of the TATA Mutual Funds.

Research design

Descriptive Research Determining the relationship between low or more variables.

It is well structured.

It is more economical.

The researcher has no control.

It needs less time. Sources of data

Primary data:

The primary data are collected from the company

Secondary data:

The secondary data are collected from the Individual customers of TATA Mutual fund, Distributors, individual Institutions and websites.

Research Instrument:The data are collected from the completed Offer Document, Fact Sheets, Application, which talks about the new scheme and Internet.

Limitations of the study

The period of study is limited to two month.

The study is conducted in short period, due to which the study may not be detailed in all aspects. The study is limited only to be the analysis of different schemes and its suitability to different investors according to their risk-taking ability.

The study is based on secondary data available from monthly fact sheets, web sites, offer documents, magazines and newspapers etc. as primary data was not accessible.

The study is limited by the detailed study of various schemes.

CHAPTER-II

COMPANY PROFILE

COMPANY PROFILE

Tata Asset Management Limited, having Rs. 38741.01 crores (as on February 24, 2010) of assets under management. At Tata Asset Management Ltd., we are committed to providing you with consistent investment performance, world-class service and a comprehensive product range to take care of all your investment requirements. They offer a wide range of investment products for institutional and individual investors. So, whoever you are and whatever your investments needs are, they will provide you with the optimal investment solution.

The Tata Asset Management philosophy is centered on seeking consistent, long-term results. When you choose to invest with Tata Mutual Fund, you get the benefits of financial planning.

Tata Asset Management aims at overall excellence, within the framework of transparent and rigorous risk controls. They constantly benchmark our efforts against these tenets of performance.Consistency We consistently strive to deliver results through our value based investing methodology, keeping alive the belief of the late doyen of the Tata Group, Mr. JRD Tata, that money received from the people should go back to them several times over.

Flexibility

Tata Mutual Fund offers investors a broad range of managed investment products in various asset classes and risk parameters, within operational flexibility to suit their varied investment needs.

Stability

Our commitment to the highest quality of service and integrity are the foundation upon which clients can build their trust with us.

ServiceWe offer a wide range of services to assist the investor in his financial planning experience with us. Our services are designed keeping the needs of our investors in focus, affording them a smooth and hassle free financial planning process.Leadership with Trust

At the Tata Group our purpose is to improve the quality of life of the communities we serve. We do this through leadership in sectors of national economic significance, to which the Group brings a unique set of capabilities. This requires us to grow aggressively in focused areas of business.

Our heritage of returning to society what we earn evokes trust among consumers, employees, shareholders and the community. This heritage is being continuously enriched by the formalization of the high standards of behavior expected from employees and companies.

The Tata name is a unique asset representing leadership with trust. Leveraging this asset to enhance Group synergy and becoming globally competitive is the route to sustained growth and long-term success.Tata Five Core Values:

The Tata Group has always sought to be a value-driven organization. These values continue to direct the Group's growth and businesses. The five core Tata values underpinning the way we do business are: Integrity:

We must conduct our business fairly, with honesty and transparency. Everything we do must stand the test of public scrutiny. Understanding: We must be caring, show respect, compassion and humanity for our colleagues and customers around the world, and always work for the benefit of the communities we serve.

Excellence:

We must constantly strive to achieve the highest possible standards in our day-to-day work and in the quality of the goods and services we provide services.

Unity: We must work cohesively with our colleagues across the Group and with our customers and partners around the world, building strong relationships based on tolerance, understanding and mutual cooperation. Responsibility:

We must continue to be responsible, sensitive to the countries, communities and environments in which we work, always ensuring that what comes from the people goes back to the people many times over. Products:

At Tata Asset Management Company, they believe that your investment needs depend on personal and financial goals. Identifying your financial goals is the key to achieving the big things in your life, be it your child's education or a carefree and comfortable retired life. After identifying and defining your financial goals, you now need to plan for each of them in an organized and a professional way. Investment experts around the world advise instruments like equity funds and stocks for long-term (more than 5 years), income funds for medium-term and liquid funds for short-term needs.

The investment matrix here depicts the entire available variety of investment options. Those at the top provide for a greater opportunity for long-term capital growth while those at the bottom take care of current income and preservation of capital. Tata Mutual Fund offers a wide range of funds for different investment instruments designed to cater to your individual profile and life-stage. Equity Products

Tata Pure Equity Fund (TPEF)

Tata Tax Saving Fund (TTSF)

Tata Select Equity Fund (TSEF)

Tata Life Sciences & Technology Fund (TLSTF)

Tata Equity Opportunities Fund (TEOF)

Tata Index Fund (TIXF)

Tata Growth Fund (TGF)

Tata Equity P/E Fund (TEPEF)

Tata Dividend Yield Fund (TDYF)

Tata Infrastructure Fund (TIF)

Tata Service Industries Fund (TSIF)

Tata Mid Cap Fund (TMCF)

Tata Contra Fund (TCF)

Tata Tax Advantage Fund 1

Tata Equity Management Fund

Tata Capital Builder FundBalanced Products

Tata Balanced Fund (TBF)

Tata Young Citizens' Fund (TYCF)

Tata SIP Fund Scheme

Debt Products

Tata Short Term Bond Fund (TSTBF)

Tata Gilt Securities Fund (TGSF)

Tata Income Fund (TIF)

Tata Income Plus Fund (TIPF)

Tata Fixed Horizon Fund

Tata Fixed Horizon Fund Series 1 Tata Fixed Horizon Fund Series 2 Tata Fixed Horizon Fund Series 3 Tata Fixed Horizon Fund Series 5 Tata Fixed Horizon Fund Series 6 Tata Fixed Horizon Fund Series 7 Tata Fixed Horizon Fund Series 8 Tata Fixed Horizon Fund Series 9 Tata Monthly Income Fund (TMIF)

Tata Dynamic Bond Fund (TDBF)

Tata Floating Rate Fund (TFRF)

Tata Liquid Fund (TLF)

Tata MIP Plus Fund (TMPF)

Tata Floater Fund (TFF)

Tata Liquidity Management Fund (TLMF)

TYPES OF MUTUAL FUNDS Getting a handle on whats under the hood helps you become a better investor and put together a more successful portfolio. To do this one must know the different types of funds that cater to investors needs, what ever the age, financial position, risk tolerance and return expectations. The mutual fund schemes can be classified on the following basis:

Schemes according to Maturity Period:

Open-Ended Fund/SchemeAn Open-Ended Scheme or fund is one that is available for subscription and repurchase on a continuous basis. These schemes do not have a fixed maturity period. Investors can conveniently buy and sell units at Net Asset Value (NAV) related prices which are declared on a daily basis. The key feature of open-end schemes is liquidity. Close-Ended Fund/SchemeA Close-ended fund or scheme has a stipulated maturity period e.g. 5-7 years. The fund is open for subscription only during a specified period at the time of launch of the scheme. Investors can invest in the scheme at the time of the initial public issue and thereafter they can buy or sell the units of the scheme on the stock exchanges where the units are listed. In order to provide an exit route to the investors, some close-ended funds give an option of selling back the units to the mutual fund through periodic repurchase at NAV related prices. SEBI Regulations stipulate that at least one of the two exit routes is provided to the investor i.e. either repurchase facility or through listing on stock exchanges. These mutual funds schemes disclose NAV generally on weekly basis.

Schemes according to Investment Objective:

It is belief that individuals differ in their investment needs based on personal financial goals. It is recommended that you should, at the very beginning identify your own financial goals, be it planning for your childrens education or a comfortable retired life. After defining these, you need to plan for them in an organized manner and look at investments that help achieve these goals. Investment experts recommend that growth investments such as equity funds and stocks are a good choice for long term needs (five years or more), income funds for medium-term needs and liquid funds for short-term requirements.

A scheme can also be classified as growth scheme, income scheme, or balanced scheme considering its investment objective. Such schemes may be open-ended or close-ended schemes as described earlier. Such schemes may be classified mainly as follows:

Growth/Equity Oriented SchemesThe aim of growth funds is to provide capital appreciation over the medium to long-term. Such schemes normally invest a major part of their corpus in equities. Such funds have comparatively high risks. These schemes provide different options to the investors like dividend option depending on their preferences. The investors must indicate the option in the application form. The mutual funds also allow the investors to change the options at a later date. Growth schemes are good for investors having a long-term outlook seeking appreciation over a period of time.

Income/Debt Oriented Schemes

The aim of income funds is to provide regular and steady income to investors. Such schemes generally invest in fixed income securities such as bonds, corporate debentures, Government securities and money market instruments. Such funds are less risky compared to equity schemes. These funds are not affected because of fluctuations in equity markets. However, opportunities of capital appreciation are also limited in such funds. The NAVs of such funds are affected because of change in interest rates in the country. If the interest rates fall, NAVs of such funds are likely to increase in the short run and vice versa. However, long term investors may not bother about these fluctuations.

Other Schemes:

Guilt Funds

These funds invest exclusively in government securities. Government securities have no default risk. NAVs of these schemes also fluctuate due to change in interest rates and other economic factors as is the case with income or debt oriented schemes. Index Funds

Index funds replicate the portfolio of a particular index such as the BSE Sensitive index, S&P NSE 50 index (Nifty), etc. These schemes invest in the securities in the same weight age comprising of an index. NAVs of such schemes would rise or fall in accordance with the rise or fall in the index, though not exactly by the same percentage due to some factors known as tracking error in technical terms. Necessary disclosures in this regard are made in the offer document of the mutual fund scheme.

There are also exchange traded index funds launched by the mutual funds which are traded on the stock exchanges.

Sector Specific Fund/Scheme

These are the funds/schemes which invest in the securities of only those sectors or industries as specified in the offer documents e.g. Pharmaceuticals, Software, Fast Moving Consumer Goods (FMCG), Petroleum stocks, etc. The returns in these funds are dependent on the performance of the respective sectors/industries. While these funds may give higher returns, they are more likely compared to diversified funds. Investors need to keep a watch on the performance of those sectors/industries and must exit at an appropriate time. They may also seek advice of an expert. Tax Saving Schemes

These schemes offer tax rebates to the investors under specific provisions of the Income Tax Act, 1961 as the Government offers tax incentives for investment in specified avenues. e.g. Equity Linked Savings Schemes (ELSS). Pension schemes launched by the mutual funds also offer tax benefits. These schemes are growth oriented and invest pre-dominantly in equities. Their growth opportunities and risks associated are like any equity oriented scheme.

Leveraged Funds

Leveraged Funds or borrowed funds are used in order to increase the size of the value of the portfolio and benefit the shareholders by gains exceeding the cost of the borrowed funds. Such funds are used in speculative and risky investments like short sale to take advantage of declining market to realize gains in the portfolio short sales. Load or Non Load Fund

A Load Fund is one that charges a percentage of NAV for entry or exit. That is, each time one buys or sells units in the fund, a charge will be payable. This charge is used by the mutual fund for marketing and distribution expenses. Suppose the NAV per unit is Rs. 10. If the entry as well as exit load charges is 1%, then the investors who buy would be required to pay Rs. 10.10 and those who offer their units for repurchase to the mutual fund will get only Rs. 9.90 per unit. The investors should take the loads into consideration while making investment as these affect their yields/returns. However, the investors should also consider the performance track record and service standards of the mutual fund which are more important. Efficient funds may give higher returns in spite of funds.A no-load is one that does not charge for entry or exit. It means the investors can enter the fund/scheme at NAV and no additional charges are payable on purchase or sale of units COST INVOLVED IN MUTUAL FUNDSAh that all-important question what kind of hole will it burn in your pocket! Well, there are a few charges involved, but if you think of all the bother theyre saving you and the money that you stand to earn, you wont mind paying up.

In addition to what are called loads (explained below), a mutual fund also charges asset management fees and certain other expenses. These charges compensate the fund for the expenses it incurs in managing assets, processing transactions and paying brokerages. For instance, every redemption request involves not only administrative processing costs but also other costs associated with raising money to pay off the outgoing investor.

However, itll please you to know that theres nothing arbitrary about these charges. For example, regulations stipulate that the difference between the repurchase and the resale price cannot exceed 7% of same price, and that recurring expenses cannot exceed 2.5% of average weekly net assets. The recurring expenses limit is even lower for schemes with a size exceeding Rs. 100 crores in net assets. So if ever you get the feeling that youre being fleeced dont, because theres somebody making sure that all is fair and square.

Loads

Dont look at these as a burden; just think of them as tolls you pay on the highway to big money.

Entry Load/ Sale LoadThis is the charge imposed at the time you enter a fund as an investor. You pay for the value of the units plus an additional charge. That additional charged is termed entry/sale load. Funds usually charge an entry load ranging between 1.00% and 2.00%.

For e.g. Let us assume an investor invests Rs. 10,000/- and the current NAV is Rs. 13/-. If the entry lo9ad levied is 1.00%, the price at which the investor invests is Rs. 13.13 per unit. The investor receives 10,000/13.13 = 761.6146 units. (Notes that units are allotted to an investor based on the amount invested and not on the basis of no. of units purchased).

Exit Load / Repurchase LoadThe opposite of the above! This is what you cough up at the time of your exit from the scheme. Operationally, therefore, what you get back from the mutual fund will be the value of the units minus the exit charge. Exit loads vary between 0.25% and 2.00%.

Let us now assume that the same investor decides to redeem his 761.6146 units. Let us alos assume that the NAV is Rs 15/- and the exit load is 0.50%. therefore the redemption price per unit works out to Rs. 14.925. The investor therefore receives 761.6146 X 14.925 = Rs. 11367.10. Contingent Deferred Sales Charge

A mutual fund may not want to charge an exit load in all cases. But it will still need to recover the expenses incurred on the promotion and distribution of a scheme. What it does then is impose a charge based on the time of withdrawal. Thus, a fund that prefers long-term investors may stipulate that the exit charge will keep reducing with the increasing duration of investment. Such a charge is called Contingent Deferred Sales Charge (CDSC). The asset management company is entitled to levy a CDSC for redemption during the first four years after purchase, not exceeding 4% of the redemption proceeds in the first year, 3% in the second year, 2% in the third year and 1% in the forth year. In order to charge a CDSC, the scheme has to be a no-load scheme as per the regulations laid down by SEBI.

Switchover / Exchange FeeThis is what you pay if you decide to switch your investment from one scheme of the fund to another scheme from the same fund family. Some Mutual Funds provide the investor with an option to shift his investment from one scheme to another within that fund. For this option the fund may levy a switching fee. Switching allows the investor to alter the allocation of their investment among the scheme in order to meet their changed investment needs, risk profiles or changing circumstances during their lifetime.

Recurring Expenses

Apart from Loads mutual funds also charge some other expenses, such as:

Investment Management & Advisory FeesAs the name suggests, this is meant to remunerate the asset management company for managing the investors money.

Trustees FeesThese are fees payable to the trustees for managing the trust.

Custodian Fees

These are paid by the fund to its custodians, the organization which handles the possessing of the securities invested in by the fund.

Registrar and Transfer Agents Charges

The fees payable to the registrar and the transfer agents for handling all formalities related to the transfer of units and other related operations.

Apart form these there are some other expenses such as Broker/Dealer Remuneration, Audit Fees, Cost of Funds Transfer, Cost of providing a/c statements, Cost of Statutory Advertisement.Types of Risks Market Risk:

There are times when the price of securities in a particular market rise or fall due to acertain outside influencing factors. This could affect large as well as small businesses.

Inflation Risk:Very often investors that follows the conservative approach consider those investments that seek to preserve their capital. These types of investments however may not protect against inflation. Inflation is nothing but loss of purchasing power. When inflation grows faster than earnings on an investment, one may be able to buy less. One is exposed to inflation risks when prices rise faster than ones income.

Credit Risk:The ability of a company to repay investors money or to make interest payments determines the credit risk that investors face.

Interest Rate Risk:

Interest rates are not predictable and can adversely affect the prices of stocks and bonds. For instance, when interest rise, bonds prices fall and vice-versa

CHAPTER-III REVIEW OF LITERATURE

REVIEW OF LITERATURE TITLE: MUTUAL FUND AND TAXATION

Authors Dr. Somesh kumar shukla

Dr. Shobhit

The paper tries to analyze tax benefits issues with respect to mutual fund from the point of view of companies and investors.

To day there are around 34 mutual funds with approximately 500 products classified under a dozen generic heads. The total invest able funds of the industry grew from Rs 24 crore in 1994 to more than Rs 1,20,000 crore in 2002 here on effort is being made to study the various tax aspects relating to mutual funds in India.

It is known that tax rate for long term capital gains is lower than Tax on dividends. Some funds operating pure equity growth schemes have been declaring annual dividends; we should be distributed as capital appreciation, consequently put investors to great disadvantage.

Further it is also advisable that, their should be exemption from tax on dividends as to avoid double taxation, steps should be also taken to make mutual fund an ideal investors. Vehicle as mutual fund promote growth, along with capital appreciation which in turn helps in the development of the economy.The findings of review are as follows:

A mutual fund has been conferred total tax exemption from income tax on all its income provided it is a recognized fund. i.e. SEBI Act 1993.

The income received by the investors of mutual fund is taxable in their hand as dividend unless these are capital redemption.

Payment against investment made in units of any mutual fund specified U/S 10(23D).of the income tax Act 1961.

Payment against investment in units of UTI.

Income distribution from mutual funds is not free from TDS Provisions. A mutual fund has to deduct TDS where the income distribution exceeds Rs. 2500 in a financial year.

NOTE: INDIAN JOURNAL OF ACCOUNTING

TITLE: MANAGEMENT OF RISK AND RETURN

Authors: Mrs. martina R Noronha

The Present Study is an attempt to examine the investment performance of mutual funds of the various (18)debt based schemes of three AMC with the help of ratios and various statistical measure for three years(January 2006 to febrauary2009).This study has been conducted with a view to develop insights of for comparing the performance of different funds.

The Present Study compares 18 debt based sachems of three AMC on the basis of calculation of ratios and various statistical measure for three years(January 2006 to February 2009).The companies selected are Templeton AMC,HDFC AMC and Prudential ICICI AMC.

Income funds in the short terms can not generate higher returns because of the constant interplay between interest rates and bond prices. But in the long run, over a period of the three years are more, an investors gets on advantage of return. Investors who want to earn higher return and less risk can go for short term plans. While those seeking higher returns from debt fund should go in for floating rate funds. Investors seeking security should go infer liquid funds while those ready to take risk can go in-for GLIT funds. The alpha looks at excess returns over the

index while the beta looks at excess risk over the index. Betas and Alphas go hand in hand, An ideal fund as low beta and a high alpha.

The findings of review are as follows: Among income funds, the performance HDFC income fund was a better than temple ton India income fund and prudential ICICI income-LT.

An examination of monthly income plan revealed that prudential ICICI income-LT, temple ton India income fund and HDFC MIP-LT gave returns in 2006-07,2007-08,2008-09 however the market out performed the funds.

In case of short term plans the performance of Templeton short term plans was good in the year 2005-06,2006-07 but declined the year 2007-08.But HDFC 2008-09 year STP and Negative returns.

In case of floating rate fund, Templeton floating rate income gave good return in 2006-09 but HDFC and ICICI were Negatives in all three years

On analyzing the liquid funds it can be seen that only prudential ICICI Institutional and growth fund gave good returns others are negative performance.

NOTE: INDIAN JOURNAL OF ACCOUNTING

CHAPTER-IV

DATA ANALYSIS & INTERPRETATIONDATA ANALYSIS & INTERPRETATIONSTABLE 1

THE MINIMUM INVESTMENTS OF THE FUNDS

FUNDSMINIMUM INVESTMENT

(In Rs.)

TEOF5000

TPEF5000

TSEF5000

TLSTF500

TTSF5000

TGF5000

TEPEF5000

TISF5000

TIXF5000

TBF5000

TYCF500

TLF10000

TCF5000

TFRF10000

INFERENCE

Most of the funds are having the minimum investment of Rs.5000 as they are related to equity-diversified funds. The tax saving funds having Rs.500 as it minimum investment since they are saving the tax under the section 80C (2) of the Income Tax Act 1961.

CHART 1

THE MINIMUM INVESTMENTS OF THE FUNDS (IN Rs.)

TABLE 2

ASSETS UNDER MANAGEMENT OF VARIOUS FUNDS AS ON JANUARY 2013FUNDSASSETS UNDER MANAGEMENT (In Lacs)

TEOF31822.92

TPEF19937.9

TSEF7684.84

TLSTF2747.53

TTSF14985.05

TGF11071.19

TEPEF7873.29

TISF97195.49

TIXF502.21

TBF10721.84

TYCF16469.66

TLF358764.49

TCF8207.07

TFRF257450.06

INFERENCE

In equity diversified fund, TATA MUTUAL FUND is performing well as it assets under management is Rs.1243880 lacs. The debt funds are performing well as its asset under management is showing. This shows, in overall assets under management Liquid Option fund is doing well.

CHART 2

ASSETS UNDER MANAGEMENT OF VARIOUS FUNDS AS ON JANUARY 2013(IN Rs.)

COMPARISION OF TATA MUTUAL FUNDS WITH HDFC AND ICICI MUTUAL FUND TABLE 3

THE CATEGORY OF THE FUNDS

FundsCategory of Funds

1Tata balanced fundEquity and Debt

HDFC balanced fundEquity and Debt

ICICI prudential balanced fundEquity and Debt

2Tata Index fund-nifty AEquity Diversified

HDFC index nifty planEquity Diversified

ICICI Prudential Index fundEquity Diversified

3Tata tax saving fundEquity Diversified

HDFC tax saverEquity Diversified

ICICI Prudential tax planEquity Diversified

4Tata growth fundEquity Diversified

HDFC Growth fundEquity Diversified

ICICI Prudential growth planEquity Diversified

5Tata gilt securities fundGilt

HDFC gilt long term planGilt

ICICI Prudential gilt invt planGilt

6Tata contra fundEquity Diversified

HDFC premier multicap fundEquity Diversified

ICICI Prudential blended plan-BDebt

7Tata monthly income fundEquity and Debt

HDFC monthly income plan short termEquity and Debt

ICICI Prudential monthly income planEquity and Debt

8Tata income fundDebt

HDFC income fundDebt

ICICI Prudential income planDebt

9Tata liquid fundDebt

HDFC liquid fundDebt

ICICI Prudential liquid fundDebt

10Tata young citizens fundEquity and Debt

HDFC childrens gift investment planEquity and Debt

ICICI Prudential child care study planEquity and Debt

11Tata floating rate fund-sh instDebt

HDFC floating rate income short term planDebt

ICICI Prudential LT floating rate-ADebt

12Tata short term bond fundDebt

HDFC short term planDebt

ICICI Prudential short term planDebt

CHART 3THE CATEGORY OF THE FUNDS

INFERENCE:

By observing above table and chart we can say that most funds of the asset management company are invested in equity diversification. Next to the debt funds and after the management is invest the money in the equity related funds and very less in guilt funds.TABLE 4

1 YEAR RETURNS OF TATA, HDFC AND ICICI MUTUAL FUNDS (IN %) AS ON 27 JANUARY 201\3NOFund Name1 YR RETURNS

1Tata balanced fund31.12

HDFC balanced fund13.41

ICICI prudential balanced fund18.29

2Tata Index fund-nifty A25.58

HDFC index nifty plan25.02

ICICI Prudential Index fund28.01

3Tata tax saving fund24.33

HDFC tax saver25.80

ICICI Prudential tax plan5.85

4Tata growth fund36.74

HDFC Growth fund39.85

ICICI Prudential growth plan25.50

5Tata gilt securities fund6.01

HDFC gilt long term plan4.67

ICICI Prudential gilt invt plan10.11

6Tata contra fund7.01

HDFC premier multicap fund27.70

ICICI Prudential blended plan-B8.43

7Tata monthly income fund8.32

HDFC monthly income plan short term6.46

ICICI Prudential monthly income plan9.42

8Tata income fund6.32

HDFC income fund4.99

ICICI Prudential income plan7.71

9Tata liquid fund7.64

HDFC liquid fund7.60

ICICI Prudential liquid fund7.63

10Tata young citizens fund19.29

HDFC childrens gift investment plan17.53

ICICI Prudential child care study plan14.66

11Tata floating rate fund-sh inst8.10

HDFC floating rate income short term plan7.87

ICICI Prudential LT floating rate-A7.44

12Tata short term bond fund9.39

HDFC short term plan7.83

ICICI Prudential short term plan8.51

CHART 4

1 YEAR RETURNS OF TATA, HDFC AND ICICI MUTUAL FUND

TABLE 5 3 YEAR RETURNS OF TATA, HDFC AND ICICI MUTUAL FUND (IN %) AS ON 27 JANUARY 2013NOFund Name3 YR RETURNS








HDFC tax saver51.61








6Tata contra fundNil

HDFC premier multicap fundNil

ICICI Prudential blended plan-BNil


HDFC monthly income plan short term8.50











11Tata floating rate fund-sh instNil

HDFC floating rate income short term plan6.39

ICICI Prudential LT floating rate-ANil




CHART 5

3 YEAR RETURNS OF TATA, HDFC AND ICICI MUTUAL FUND

TABLE 6 5 YEAR RETURNS OF TATA, HDFC AND ICICI MUTUAL FUNDS (IN %) AS ON 27 JANUARY 2013NOFund Name5 YR RETURNS




2Tata Index fund-nifty ANil




HDFC tax saver53.45








Tata contra fundNil

HDFC premier multicap fundNil

ICICI Prudential blended plan-BNil


HDFC monthly income plan short termNil











11Tata floating rate fund-sh instNil

HDFC floating rate income short term planNil

ICICI Prudential LT floating rate-ANil


CHART 6

5-YEAR RETURNS OF TATA, HDFC AND ICICI MUTUAL FUND

INFERENCE:

By observing 1, 3 and 5 year returns of TATA, HDFC, ICICI mutual funds we can say that in 12 schemes, which are selected, TATA is doing well in 5 schemes rather than HDFC and ICICI. The schemes are TATA Balanced Fund, Tata Liquid Fund, Tata Young Citizens Fund, Tata floating Rate Fund and Tata short Term Bond Fund.

HDFC is doing well in 3 schemes they are HDFC Tax Saver, HDFC Growth Fund, and HDFC Premier MultiCap Fund.

ICICI is doing well in 4 schemes. They are ICICI Index Fund, ICICI GILT securities Fund, ICICI Monthly Income Plan and ICICI Income Fund.

If we see over all performance of all funds we can say TATA is doing well.

Investors will consider the returns and risk primarily for investing. We can say

The returns of TATA are extremely good by observing above tables and charts.

Tata is also performing well in other schemes, which are mentioned below. TABLE 7

ONE-YEAR RETURN OF OTHER SCHEMES OF TATA MUTUAL FUND (IN %)No. Fund name 1 year returns

1 Tata infrastructure fund 46.56

2 Tata equity opportunities fund 34.21

3 Tata equity P/E fund 43.24

4 Tata life sciences & technology fund 17.21

5Tata pure equity fund 31.33

6Tata select equity fund 38.25

7Tata service industries fund 34.71

CHART 7

-YEAR RETURN OF OTHER SCHEMES OF TATA MUTUAL FUND (in %)

INFERENCE:

As shown in the above table TATA is doing well in other schemes also like TISF, TEOF, TEPEF, TLSTF, TPEF, TSEF, and TSIF.

All of them Tata Infrastructure Fund is doing extremely well.

TABLE 8

RISK GRADE OF THE FUNDS5-High 4-Above average

3-Average 2-below average

1-Low

NoFund nameRisk grade

1Tata balanced fund3

HDFC balanced fund4

ICICI prudential balanced fund3

2Tata Index fund-nifty A3

HDFC index nifty plan3

ICICI Prudential Index fund4

3Tata tax saving fund3

HDFC tax saver1

ICICI Prudential tax plan4

4Tata growth fund4

HDFC Growth fund2

ICICI Prudential growth plan3

5Tata gilt securities fund4

HDFC gilt long term plan4

ICICI Prudential gilt invt plan4

6Tata contra fundNot rated

HDFC premier multicap fundNot rated

ICICI Prudential blended plan-BNot rated

7Tata monthly income fund2

HDFC monthly income plan short term3

ICICI Prudential monthly income plan3

8Tata income fund3

HDFC income fund5

ICICI Prudential income plan5

9Tata liquid fund1

HDFC liquid fund3

ICICI Prudential liquid fund3

10Tata young citizens fund4

HDFC childrens gift investment plan3

ICICI Prudential child care study plan3

11Tata floating rate fund-sh inst2

HDFC floating rate income short term plan3

ICICI Prudential LT floating rate-A2

12Tata short term bond fund2

HDFC short term plan3

ICICI Prudential short term plan2

CHART 8

THE RISK GRADE OF THE FUNDS

INFERENCE

Hdfc balanced fund, ICICI Prudential Index fund, Tata growth fund, Tata gilt securities fund, Hdfc gilt long term plan, ICICI Prudential gilt invt plan, Tata young citizens funds are having risk above average Tata balanced fund, ICICI prudential balanced fund, Tata Index fund-nifty A, Hdfc index nifty plan, Tata tax saving fund, ICICI Prudential growth plan, Hdfc monthly income plan short term, ICICI Prudential monthly income plan, Tata income fund, Hdfc liquid fund, ICICI Prudential liquid fund, Hdfc childrens gift investment plan, ICICI Prudential child care study plan, Hdfc floating rate income short term plan, Hdfc short term plan. These plans are having avg risk and others are having below avg and low risk.

By observing above table we can say that HDFC Income fund, icici prudential Income fund have high risk.

TABLE 9

NAVS OF FUNDS AS ON 27 JANUARY 2013noFund Namenavs



ICICI prudential balanced plan35.89


HDFC index fund- nifty plan41.54



HDFC tax saver156.61







ICICI Prudential gilt fund-invt23.41

6Tata contra fund11.47

HDFC premier multicap fund20.17

ICICI Prudential blended plan-B11.72


HDFC mf monthly income plan short term13.27





9Tata liquid fund (retail invt plan)1788.93




HDFC childrens gift fund-investment26.84


11Tata floating rate fund-sh inst12.10

HDFC Floating Rate Income Fund-Short Term Plan13.02

ICICI Prudential LT floating rate-A11.89




CHART 9 THE NAVS HISTORY OF THE FUNDS

INFERENCE:

The NAVS detail shown in the table is value of the asset under the particular scheme.

TABLE 10

RISK ANALYSIS OF SCHMES

NO FUND NAMESDBetaExpense ratio %

1Tata balanced fund4.361.02 2.32

HDFC balanced fund3.991.002.21

ICICI prudential balanced plan4.111.032.18

2Tata Index fund-nifty A5.751.011.44

HDFC index fund- nifty plan5.340.941.50

ICICI Prudential Index fund5.620.991.25

3Tata tax saving fund6.140.872.45

HDFC tax saver6.200.932.14

ICICI Prudential tax plan7.270.932.22

4Tata growth fund6.190.842.44

HDFC Growth fund5.730.902.32

ICICI Prudential growth plan5.860.992.30

5Tata gilt securities fund0.310.451.60

HDFC gilt long term plan0.280.421.60

ICICI Prudential gilt fund-invt0.410.601.15

6Tata contra fundNil Nil 2.15

HDFC premier multicap fundNil Nil 2.09

ICICI Prudential blended plan-B0.13Nil 1.50

7Tata monthly income fund0.370.232.00

HDFC mf monthly income plan short term0.530.192.07

ICICI Prudential monthly income plan0.520.231.94

8Tata income fund0.170.122.16

HDFC income fund0.260.252.11

ICICI Prudential income plan0.320.352.06

9Tata liquid fund (retail invt plan)0.02Nil 0.21

HDFC liquid fund0.02Nil 0.34

ICICI Prudential liquid fund0.02Nil 0.90

10Tata young citizens fund2.870.642.32

HDFC childrens gift fund-investment3.780.942.21

ICICI Prudential child care study plan1.690.421.50

11Tata floating rate fund-sh inst0.020.11Nil

HDFC Floating Rate Income Fund-Short Term Plan0.020.120.24

ICICI Prudential LT floating rate-A0.020.031.25

12Tata short term bond fund0.08Nil 0.79

HDFC short term plan0.08Nil 0.50

ICICI Prudential short term plan0.07Nil 1.10

STANDARD DEVIATION Standard deviation is measure of the dispersion of a set of data from its mean. The more spread apart the data is, the higher the deviation. In finance, standard deviation is applied to the annual rate of return of an investment to measure the investment's volatility (risk).

A volatile stock would have a high standard deviation. In mutual funds, the standard deviation tells us how much the return on the fund is deviating from the expected normal returns.

BETA:

A measure of the volatility, or systematic risk,of a security or a portfolio in comparison to the market as a whole. It is also known as "beta coefficient".

Beta is calculated using regression analysis, and you can think of beta as the tendency of a security's returns to respond to swings in the market.A beta of 1 indicates that the security's price will move with the market. A beta of less than 1 means that the security will be less volatile than the market.A beta of greater than 1 indicates that the security's price will be more volatile than the market.EXPENCE RATIO: A measure ofwhat it costs aninvestment company to operatea mutualfund. An expense ratio is determined through an annualcalculation,wherea fund's operating expensesare divided by the average dollar value of its assets under management. Operating expenses are taken out of a fund's assets and lower the return to a fund's investors. Also known as "management expense ratio" (MER).

Fund operating expenses vary widely depending on the type of fund. The largest component of operating expense is the fee paid to a fund's investment Manager/advisor. Other costs include recordkeeping, custodial services, taxes, legal expenses, and accounting and auditing fees. Curiously, a fund's trading activity - the buying and selling of portfolio securities -is not included in the calculation of the expense ratio.INFERENCE:

In all the above funds in most of the cases the beta is less than one, which is good indicator as the beta is non- diversifiable risk. TATA is performing quietly well as it bears the lower risk and gives more returns. HDFC and ICICI also bear the considerable portion of risk in accordance with the market. But few schemes like TATA balanced fund the beta is more than 1, but its returns are also high compared with other companies.

Standard deviation measures the dispersion around the expected value. It can be diversified, as it is the firm specific risk.

CHAPTER-V

FINDING

SUGGESTIONS

CONCLUSIONFINDINGS By considering the returns, risk grades, beta and others we can conclude the following things

The assets under management show that most of the investors prefer the equity funds because the one-year returns of the funds are also better in equity-oriented fund.

The risks and returns depend upon the performance of the stock market. The government securities give less return, as the risk is low.

When we look at the returns of various schemes of TATA, HDFC and ICICI, TATA is performing well, compared with other companies. People are willing to take risk as they get returns that are well accomplished by TATA, considering TATA-balanced fund. TATA also offers various schemes which contain high, medium and low risk According to the expense ratio of TATA is also low when compared to others TATA gives healthy competition to other competitors TATA offers all types of schemes like equity, debt, and liquid. Quality is very higher than other company products. Customers easily understand about their products through online also. TATA MUTUAL FUND provides prompt services to the customer and keeps customer happy.

If the customer wants to know about the products, the structure of the web site also very helpful to the customer. For easy understanding of TATA MUTUAL FUND schemes, TATA has separate wed site www.tatamutualfund.com. It enables customers to understand easily.

Easy documentation. SUGGESSTIONS1. The Tata mutual fund company should concentrate in sector-oriented funds as the sector fund is doing well in the market. .

2. The Tata mutual fund company should give proper guidance to the bank managers about their funds for selling the funds through the banks.

3.It should also concentrate on gilt securities which give diversified government bonds, commercial papers, treasury bills which are owned by Central State government.

4. In an era of modern technology, Tata Mutual Fund Company should utilize them, to create awareness through advertisement.

CONCLUSION

TATA Mutual Fund Company is involved in the field of Mutual fund industry from 1982. This particular company is doing well in the market, as it is the sponsor and trustee of TATA TRUSTEE COMPANY PRIVATE LIMITED. It funds are giving better return to its investor. This study reveals the past performance of the funds.

An analysis has been made by way of using different charts and tables. On the basis of the analysis findings are drawn, in order to give suitable feedback to TATA Mutual Fund Company. The analysis its resultant findings and suggestions made through this study may give benefit to TATA Mutual Fund Company.

The study is very useful for me to study the mutual fund industry and TATA Mutual Funds schemes.

I hope that with the help of this experience makes me to develop in the practical world. It is giving more confidence to me and gaining the knowledge about the products and various functional areas in the company. These funds are going get better performance in the market if things have to going well.

CHAPTER-VI BIOLOGRAPHYBIBLIOGRAPHY

Books:

Amfi workbook

----- D.C.Anjoria

Research Methodology

----- K.L.KothariNewspaper:Business standard

Business line

The Economic Times

Websites :www.amfiindia.comwww.tatamutualfund.comwww.valueresearchonline.comFact sheet January & February 2011Offer Document of TATA MUTUAL FUND

Gilt

Debt

Equity and

Debt

Equity

Category of Funds

14

12

10

8

6

4

2

0

From this Segment,

Get the stocks with higher stability

From this Segment,

Get the stocks with higher growth potential

Potential for higher growth

Inherently Stable Stocks

Large Caps

Mid Caps

PAGE

_1408557768.xlsChart1

50005000500050005005000500050005000500050010000500010000

TEOF

TPEF

TSEF

TLSTF

TTSF

TGF

TEPEF

TIF

TIXF

TBF

TYCF

TLF

TCF

TFRF

Sheet1

FUNDSMINIMUM INVESTMENT (In Rs.)

TEOF5000

TPEF5000

TSEF5000

TLSTF5000

TTSF500

TGF5000

TEPEF5000

TIF5000

TIXF5000

TBF5000

TYCF500

TLF10000

TCF5000

TFRF10000

Date post:	19-Nov-2015
Category:	Documents
Upload:	ravikumarreddyt
View:	37 times
Download:	9 times

CAMPARATIVE STUDY OF TATA,ICICI AND HDFC MUTUAL FUNDS (1).doc

Documents