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1A STUDY OF RISK AND RETURN OF MUTUAL FUND

IN INDIA

EXECUTIVE SUMMARY

In the current economic scenario interest rates are falling and fluctuation

in the share market has put investors in confusion. One finds it difficult to take

decision on investment. This is primarily, because of investments are risky in

nature and investors have to consider various factors before investing in

investment avenues.

These factors include risk, return, and volatility of shares and liquidity. The

main objective investment in mutual fund schemes is to analyze the performance

of mutual funds by using risk and return as a parameter.

Historical data were taken for calculating risk and return. Analysis has

done on percentage method for mutual fund schemes. Compare to equities

mutual funds is less risky with stable returns and mutual funds give the investor a

diversified portfolio. Those who have well knowledge in equity market they can

go for equity investments rather that investing in mutual funds because no control

on the expenses made by the fund manager.

The study will guide the new investor who wants to invest in equity and

mutual fund schemes by providing knowledge about how to measure the risk and

return of particular scrip or mutual fund scheme. The study recommends new

investors to go for mutual funds rather than equities, because of high risk and

market instability.

R.V.INSTITUTE OF MANAGEMENT


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INTRODUCTION

PART-A: ABOUT THE MUTUAL FUND

History of Indian Mutual Funds industry

The history of Indian mutual fund industry can be classified into four

phases.

1] First Phase : 1964-1987: Initiative taken by UTI.

2] Second Phase : 1987-1993: Entry of public sector (LIC, GIC etc).

3] Third Phase : 1993-2003: Entry of private sector

4] Fourth Phase : 2003 onwards.

First Phase

The Mutual Fund industry in India started in 1963 with formation

of Unit Trust of India (UTI) initiated by the Government of India and

The Reserve Bank of India In 1978, UTI was de-linked from the RBI

and the industrial Development Bank of India [IDBI] took over the

regulatory and administrative control instead of RBI.

The first scheme launched by UTI was Unit Scheme 1964. At

the end of 1998, UTI had Asset Management of Rs. 6700 cr.



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Second Phase:

The year1987 marked the entry of non-UTI, public sector

mutual funds set up by public sector banks and Life Insurance

Company (LIC) and General Insurance Company of India (GIC).

SBI Mutual Fund was the first non-UTI Mutual Fundestablished in June 1987

Canara bank Mutual Fund December 1987)

Punjab National Bank Mutual Fund August 1989

India Bank Mutual Fund November 1989

Bank of India Mutual Fund June 1990

Bank of Baroda Mutual Fund October 1992 LIC established its mutual fund in June 1989

while GIC set up its mutual fund in December 1990.

At the end of 1993, the mutual fund industry had Assets

under Management of Rs. 47,000 cr.



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Third Phase

The entry of private sector funds in 1993, A new era started in

the India was Mutual Fund industry, providing Indian investors with a

wider choice of investment alternatives

Also, 1993 was the year in which the first Mutual Fund

Regulations came into being under which all mutual funds, except

UTI were to be registered and governed by the SEBI MUTUAL FUND

ACT 1992.

Franklin Templeton was the first private sector mutual fund registered

in 1993.

The 1992 SEBI MUTUAL FUND Regulations were substituted

by a more comprehensive and revised Mutual Fund Regulations in

1996. The industry now works under the SEBI MUTUAL FUND ACT

1996.



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Fourth Phase:

In February 2003, following the repeal of Unit Trust of

India with Assets Under Management of Rs. 29835 cr as at the end of

January 2003, representing broadly the assets of US-64 Scheme,

assured return and certain other schemes. It does not come under

the purview of the Mutual Fund Regulations.

The second is UTI Mutual Fund sponsored by SBI, PNB, BOB

and LIC. It is registered with SEBI and works under the Mutual FundRegulations.

At the end of March, 2006 the Assets Under Management were

Rs.2, 31,513 cr.



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GROWTH OF ASSET MANAGEMENT COMPANY



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For the individual investor

mutual funds provide the benefit of having someone else

manage your investments, take care of record keeping for youraccount, and diversify the investment into many different securities

that are available in the primary market and secondary market.

Today, minimum investment requirements on many funds are

low enough that even the smallest investor can get started in mutual

funds.

A mutual fund, by its very nature, is diversified -- its assets are

invested in many different securities. Beyond that, there are many

different types of mutual funds with different objectives and levels of

growth potential, chances to diversify the investment



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Strengths of Mutual Fund

Mutual Funds provide several benefits to investors. They are

The concept is based on Drops make an Ocean. So, it is a

mutual act for common benefit.

It is Professionally Managed.

There is flexibility of portfolio diversification.

There is diversification of risk as it contains small investors in

one hand and investment in basket of blue chip companies, gilt-

edged securities, bonds, debt instruments or indices.

It can be easily convert into liquidity.

The entry and exit load is nominal. The administration

expenses are also economical.

The MUTUAL FUND is tax efficient, as in the year 1999 the

government has fully exempted the dividends of Mutual fund

units in the hands of investors from tax obligations.

Various investment options are available in the hands of

investors, which may cater to their specific needs, Re-

investment option, dividend option, investment pattern such as

equity, debt, or balanced funds etc.



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Weaknesses of Mutual Fund

As it is the case with other investment vehicles, Mutual

fund are not free from certain weakness

It has no tailor-made schemes to suit to each individual retail

investor.

No guarantee of returns on investment

No control over costs.

It has the drawback of the problem of managing large

corpus.

Volatility of return depends on market conditions, which is

subject to frequent market volatility.

Mostly investment period is medium-term to long-term where

expected return is more. Money Market Mutual Fundsscheme is for short period where return is not lucrative and

the instruments are less in number.



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What is a Mutual fund?

A mutual fund basically pools the money of investors, who share

some common financial objective. This money is invested in capital

market instruments like shares, debentures and other securities and

also in other investible avenues such as real estate, commodities etc.

Income thus earned and the capital appreciation realised, are shared

by its unit holders (investors) in proportion to the number of units

owned by them.

Benefits of mutual funds

1. Sets the investor free from four main constraints

A] Convenience and Knowledge: The investor need not gothrough the tedious task of research and stock selection and neednot track the market to manage the portfolio.

B] Time: Frees one from spending his precious time to trackhis portfolio everyday.

C] Complexity: Frees from the complexity involved in equity

and debt markets.

2. Diversification: Investing in mutual funds enable a well-

diversified portfolio, with a very small amount of investment.

Diversification across various securities lowers the risk associatedwith investment.



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3. Higher risk-adjusted returns: Majority of equity funds have

outperformed indices while other avenues like fixed deposits, post-

office schemes etc. have delivered lower returns

4. Professional management: Investors purchase funds because

they do not have time or expertise to manage their own portfolio. A

mutual fund is relatively an inexpensive way for a small investor to

get a full-time manager to create and monitor his portfolio.

5. Low entry barrier: Any investor can invest in mutual funds. He

need not open a broking or a demat account to invest in mutual

funds. Further, investment can be made in mutual funds with an

amount as low as Rs. 500

6. Liquidity: Easy and fast redemption leads to high liquidity. Also,

one can enter and exit the fund (open-ended) depending on his

discretion.

7. Transparency: The transparency levels are very high in this

industry. Investors can view his fund's NAV on a daily basis. Also

industry. Investors can view his fund's NAV on a daily basis. Also,

majority of the funds disclose their portfolio holdings on a monthly

basis.



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8. Tax-saving: Mutual funds are exempted from capital gains

arising out of portfolio churning. If an investor shifts his holdings,

he will have to pay these taxes. Thus, mutual funds are a cost-

efficient way of portfolio management. Also, there are ELSS funds

(tax saving funds) which help availing the benefit of tax-saving u/s

80C. As compared to other tax saving avenues, they have lowest

lock-in period and also offer higher return potential

9. Innovative schemes to suit unique needs of different

investors: There are schemes that offer international

diversification to reduce the geographical risk. There are derivative

funds which adopt various derivative strategies to gain from the

either side movement of the market. Capital protection funds offer

a unique feature of capital protection coupled with market linked

returns.



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Disadvantages of Mutual Fund

Some of the drawbacks associated with mutual funds.

1. No Insurance

Mutual funds, although regulated by the government,

are not insured against losses. The Federal Deposit Insurance

Corporation (FDIC) only insures against certain losses at banks,

credit unions, and savings and loans, not mutual funds. That means

that despite the risk-reducing diversification benefits provided by

mutual funds, losses can occur, and it is possible (although extremely

unlikely) that you could even lose your entire investment.

2. Dilution

Although diversification reduces the amount of risk involved in

investing in mutual funds,

For example, if a single security held by a mutual fund doubles

in value, the mutual fund itself would not double in value because that

security is only one small part of the fund's holdings. By holding a

large number of different investments, mutual funds tend to do neither

exceptionally well nor exceptionally poor

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3. Fees and Expenses

Most mutual funds charge management and operating fees

that pay for the fund's management expenses (usually around 1.0%

to 1.5% peryear).

4. Poor Performance

Returns on a mutual fund are by no means guaranteed. In fact,

on average, around 75% of all mutual funds fail to beat the major

market indexes, like the S&P 500, and a growing number of critics

now question whether or not professional money managers have

better stock-picking capabilities than the average investor.

5. Loss of Control

The managers of mutual funds make all of the decisions about

which securities to buy and sell and when to do so. This can make it

difficult for you when trying to manage your portfolio.

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6. Trading Limitations

Although mutual funds are highly liquid in general, most mutual

funds (called open-ended funds) cannot be bought or sold in the

middle of the trading day. You can only buy and sell them at the end

of the day, after they have calculated the current value of their

holdings.

7. Size

Some mutual funds are too big to find enough good

investments. This is especially true of funds that focus on small

companies, given that there are strict rules about how much of a

single company a fund may own. If a mutual fund has $5 billion to

invest and is only able to invest an average of $50 million in each,

then it needs to find at least 100 such companies to invest in; as a

result, the fund might be forced to lower its standards when selecting

companies to invest in.

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8. Inefficiency of Cash Reserves

Mutual funds usually maintain large cash reserves as

protection against a large number of simultaneous withdrawals.

Although this provides investors with liquidity, it means that some of

the fund's money is invested in cash instead of assets, which tends to

lower the investor's potential return.

9. Different Types

However, there are over 10,000 mutual funds in operation, and

these funds vary greatly according to investment objective, size,

strategy, and style. Mutual funds are available for virtually every

investment strategy (e.g. value, growth), every sector and every

country or a region of the world. There will be a difficulty in selecting

the best mutual fund scheme

CATEGORIES OF MUTUAL FUNDS

Introduction

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In terms of ease with which investors can enter and exit funds, mutualfunds are broadly divided into two classes:

Open-ended funds: Investors can buy and sell the units fromthe fund, at any point of time.

Close-ended funds: These funds raise money from investorsonly once. Therefore, after the offer period, fresh investmentscan not be made into the fund. If the fund is listed on a stocksexchange the units can be traded like stocks (E.g., MorganStanley Growth Fund). Recently, most of the New Fund Offers

of close-ended funds provided liquidity window on a periodicbasis such as monthly or weekly. Redemption of units can bemade during specified intervals. Therefore, such funds haverelatively low liquidity.

There are various classes of mutual funds dependingupon the nature of investments. Here are three broad classes fromwhich one can choose to invest, depending upon his risk-returnprofile.

Equity funds

Balanced funds

Debt funds



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Equity funds

These funds invest in equities and equity related instruments. Withfluctuating share prices, such funds show volatile performance, evenlosses. However, short term fluctuations in the market, generallysmoothens out in the long term, thereby offering higher returns atrelatively lower volatility. At the same time, such funds can yield greatcapital appreciation as, historically, equities have outperformed allasset classes in the long term. Hence, investment in equity fundsshould be considered for a period of at least 3-5 years



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Fund classification based on capitalisation focus

There are also funds based on capitalisation which invest incompanies falling within a certain segment of market capitalization.Based on capitalization, equity funds can be placed on the risk returngrid as shown below

Balanced funds



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Their investment portfolio includes both debt and equity. As a result,on the risk-return ladder, they fall between equity and debt funds.Balanced funds are the ideal mutual funds vehicle for investors whoprefer spreading their risk across various instruments. Following arebalanced funds classes:

Debt-oriented funds

Equity-oriented funds

Debt FundsThey invest only in debt instruments, and are a good option forinvestors averse to idea of taking risk associated with equities.Therefore, they invest exclusively in fixed-income instruments likebonds, debentures, Government of India securities; and moneymarket instruments such as certificates of deposit (CD), commercialpaper (CP) and call money. Put your money into any of these debtfunds depending on your investment horizon and needs.

MIPs

Arbitrage Funds

FMPs

Arbitrage Funds

Income Funds

Floating rate funds

Gilt funds

Risk-return grid



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ST : Short term ; LT : Long term.

Notes:Arbitrage funds here include funds which do not indulge in shorting(selling futures without holding the stock) and do not have nakedequity positions. They can have upto 50% (as per previous SEBIregulation) or 80% (as per latest SEBI regulation) allocation to equityand equity related instruments.The risk-return profile of FMPs depend upon prevailing interest ratescenario, duration of the scheme and outlook on interest rates.

Fund of fundsAfund of funds is a mutual fund scheme that invests primarily in

other schemes of the same mutual fund or other mutual funds.Hence, it is a step ahead of mutual fund in the sense that while amutual fund keeps a track of the stocks it invests, a fund of fundkeeps track of the mutual funds it invests and hence manages theportfolio on behalf of investors. Such funds are treated as a debt-oriented fund for tax purposes.

Advantages1. Convenience

Investors switch between different funds at different times, anddynamically manage their portfolio in an endeavour to achievehigh risk-adjusted returns. This task of managing the mutualfunds portfolio is done on their behalf by fund of funds.

Instead of having different account statements for differentfunds, investing in a fund of fund offers the convenience ofhaving a single consolidated account statement, while stillmaintaining a diversified portfolio across various schemes.

2. Flexibility



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Investors can spread their money across different

strategies/managers. An investor may not be able to sell off when markets fall in the

direct stock market. A fund of fund can easily switch from onefund to another

3. Cost factor

For an investor, who actively manages his portfolio, cost of execution

and tax impact on short term switches could be a constraint. In sucha case, investment in a fund of fund could prove to be an efficientroute

Disadvantages

1. Fee structure

Expense fees on fund of funds are typically higher than

those on regular funds because investors have to bearexpenses for the main fund of fund and other funds it investsinto.

2. Stock-wise portfolio tracking

Since a fund of funds buys many different funds whichfurther invest in many different stocks, it is possible for thefund of funds to own the same stock through severaldifferent funds. Thus, it may be difficult for an individualinvestor to keep a track of the overall stock holdings.



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Risk-return profile

Its position in the risk-return grid depends on its allocation toequity and debts funds.

Advantages

1: Limit the downside risk

Derivatives are generally used for hedging purpose so thatthey can limit the downside risk of equities. Hence this fundwill be suitable in a falling market.

2: Higher potential in generating returns

It can offer higher return through short or long positions. Butthis involves high risk.



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Rating of Mutual Fund Schemes

Mutual Fund schemes are periodically evaluated by

independent institutions. CRISIL, Value Research India, and

economic Times are three such institutions whose rankings or

evaluations are currently very popular.

CRISIL

Credit rating and Information Services of India Limited carries

out Composite performance Rankings that cover all open-ended

schemes that disclose their entire portfolio composition and have

NAV information for at least two years.

It currently ranks schemes in five categories

1) Equity Schemes

2) Debt Schemes

3) Gilt Schemes

4) Balanced Schemes

5) Liquid Schemes.

Its ranking is based on four criteria, they are

a) risk-adjusted return of the schemes NAV,

b) diversification of the portfolio,

c) liquidity,

d) asset size



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PART-B: ABOUT THE TOPIC

Any rational investor, before investing his or her ingestible

wealth in the stock, analyses the risk associated with the particular

stock. The actual return he receives from a stock may vary from his

expected return and the risk is expressed in terms of variability of

return. The down side risk may be caused by several factors, either

common to all stocks [or] specific to a particular stock. Investor in

general would like to analyze the risk factors and a through

knowledge of the risk helps him to plan his portfolio in such a manner

so as to minimize the risk associated with the investment.

Definition of Risk

The dictionary meaning of risk is the possibility of loss or injury;

the degree or probability of such loss. In risk, the probable outcomes

of all the possible events are listed. Once the events are listed

subjectively, the derived probabilities can be assigned to the entire

possible events.



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Types of Risk:

Risk consists of two components

1) The systematic risk

2) The unsystematic risk

Systematic Risk

The systematic risk affects the entire market. Often we read inthe newspaper that the stock market is in the bear or the bull grip.

This indicates that the entire market is moving in a particular direction

either downward or upward. The economic conditions, political

situations and the sociological changes affect the security market.

The recession in the economy affects the profit prospect of the

industry and the stock market.

The 1998 recession experienced by developed and developing

countries have affected the stock markets all over the world. The

South East Asian crisis has affected the stock market world wide.

There factors are beyond the control of the corporate and the

investor. They cannot be entirely avoided by the investor. It drives

home the point that the systematic risk is unavoidable.



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The systematic risk is further sub-divided into

Market Risk

Interest Rate Risk

Purchasing Power Risk

Market Risk

Market risk as that portion of total variability of return caused by

the alternating forces of bull and bear markets. When the security

index moves upward haltingly for a significant period of time, it is

known as bull market. In the bull market, the index moves from a low

level to the peak.

Bear market is just a reverse to the bull market; the index declines

haltingly from the peak to a market low point called through for a

significant period of time. During the bull and bear market more than

80% of the securities prices rise or fall along with the stock market

indices.



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Interest Rate Risk

Interest rate risk is the variation in the single period rates of

return caused by the fluctuations in the market interest rate. Most

commonly interest rate risk affects the price of bonds, debentures

and stocks. The fluctuations in the interest rates are caused by the

changes in the government monetary policy and the changes that

occur in the interest rates of treasury bills and the government bonds.The bonds issued by the government and quasi-government are

considered to be risk free.

Purchasing Power Risk

Variations in the returns are caused also by the loss of

purchasing power of currency. Inflation is the reason behind the lossof purchasing power. The level of inflation proceeds faster than the

increase in capital value. Purchasing power risk is the probable loss

in the purchasing power of the returns to be received. The rise in

price penalizes the returns to the investor, and every potential rise in

price is a risk to the investor.



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UnsystematicRisk

As already mentioned, unsystematic risk is unique and peculiar

to a firm or an industry. Unsystematic risk stems from managerial

inefficiency, technological change in the production process,

availability of raw material, changes in the consumer preference, and

labor problems. The nature and magnitude of the above mentioned

factors differ from industry to industry, and company to company.They have to be analyzed separately for each industry and firm. The

changes in the consumer preference affect the consumer products

like television sets, washing machines, refrigerators, etc.

unsystematic risk can be classified into

Business risk

Financial risk

Business Risk

Business risk is that portion of the unsystematic risk caused by

the operating environment of the business. Business risk arises from

the inability of a firm to maintain its competitive edge and the growth

or stability of the earnings. Variation that occurs in the operating

environment as reflected on the operation income and expected

dividends.



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Financial Risk

It refers to the variability of the income to the equity capital due

to the debt capital. Financial risk in a company is associated with the

capital structure of the company. Capital structure of the company

consists of equity funds and borrowed funds. The presence of debt

and preference capital results in a commitment of paying interest or

per fixed rate of dividend. The interest payment affects the paymentsthat are due to the equity investors.

Measurement of Risk

The risk associated with a single asset is assessed from both a

behavior and a quantitative/statistical point of view. The behavioral

view of risk can be obtained by using: Sensitivity analysis

Probability distribution

Sensitivity Analysis

It is a behavior approach to assess risk using number of possible

returns estimates to obtain a sense of the variability among

outcomes.



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Probability Distribution

It is a model that relates probabilities to the associated

outcomes based on the rerun the expected value of the return can be

computed the expected rate of return is the weighted average of all

possible returns multiplied by their respective probabilities.

The statistical measure of risk of an asset/security is

Standard deviation

Coefficient of variation

Standard Deviation

Risk refers to the dispersion of returns around expected values.

The most common statistical measure of risk of an asset is the

standard deviation from the mean/expected values of return. It

represents the square root of the average squared deviation of the

individual returns from the expected returns.

Co-efficient of Variation

It is a measure of relative dispersion used in comparing the riskof assets with differing expected values. The co-efficient of variation

is computed by dividing the for an asset by its expected value.



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Return

Investment decisions are influenced by various motives. Some

people invest in a business to acquire control and enjoy the prestige

associated with it. Some people invest in expensive yachts and

famous villas to display their wealth. Most investors, however, are

largely guided by the pecuniary motive of earning a return on their

investment.

For earning returns investors have to almost invariably bear

some risk. In general, risk and return go hand in hand. While

investors like returns they abhor risk. Investment decisions, therefore,

involve a tradeoff between risk and return. Since risk and return are

central to investment decisions.

Meaning of Return

Return is the primary motivation force that drives investment. It

represents the reward for undertaking investment. Since the game of

investing is about returns (after allowing for risk), measurement of

realized (historical) returns is necessary to assess how well the

investment manager has done. In addition, historical returns are oftenused as an important input in estimating future (prospective) returns.



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Components of Return

The return of an investment consists of two components.

Current Return

The first component that often comes to mind when one is

thinking about return is the periodic cash flow (income), such as

dividend or interest, generated by the investment. Current return is

measured as the periodic income in relation to the beginning price of

the investment.

Capital Return

The second component of return is reflected in the price

change called the capital return it is simple the price appreciation (or

depreciation) divided by the beginning price of the asset. For assets

like equity stocks, the capital return predominates.



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Measuring Historical Return

The total return on an investment for a given period is:

Cash payment received during the period + price change

over the Price of the investment at the beginning Period

All items are measured in rupees. The rupee cash payment

received during the period may be positive may be positive zero. The

rupee price change over the period is simply the difference between

the ending price and the beginning price. This can be positive

(ending price exceeds the beginning price) or zero (ending price

equals the beginning price) or negative (ending price is less then the

beginning price) in formal terms

R( )

E B

B

C P P

P

+ =

Where R = total return over the period

C = cash payment received during the periodPE = ending price of the investment

PB= beginning price



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Return Relative

Often it is necessary to measure returns in a slightly different

manner. This is particularly true when a cumulative wealth index or a

geometric mean has to be calculated, because in such calculations

negative returns cannot be used. The concept of return relative is

used in such cases. The return relative is defined as:

Return relative=E

B

C P

P

+



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RESEARCH DESIGN

1. Title of the Study

A study on Risk and Return towards Mutual Fund

2. Statement of the Problem

In the current economic scenario interest rates are falling and

fluctuation in the share market has put investors in confusion. One

finds it difficult to take decision on investment. This is primarily,

because investments are risky in nature and investors have to

consider various factors before investing in investment avenues.

Therefore the study aims to create awareness about mutual fund

schemes in form their risk, return & liquidity among the investors.

3. Objectives of the Study

Saving money is not enough. Each of us also need to invest

ones savings intelligently in order to have enough money available

for funding the higher education of ones children, for buying a house,

or for ones own golden years. But the rapidly growing number of

investment avenues often led to confusion. Objectives of the study

are to provide information to individual investors regarding their risk,

and choosing the best investment options to match their goals and

attitude to risk.



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1. To find out Mutual Fund Schemes in respect of their risk, return and

liquidity.

2. Analyzing the performance of mutual fund schemes.

3. Objective is to provide information to investors how to invest their hard

money most profitably in mutual funds schemes.

4. Objective is to provide information to investors how to adjust their

investment portfolio with changes in their life and volatile market situation.

5. Provide information about pros and cons of investing in Mutual Funds

6. To offer valuable suggestions on the basis of findings

4. Scope of the Study

The project has been done at, which primarily deals with equity,

derivatives, mutual funds, portfolio management and insurance for

managing the portfolio of its clients.

The study is limited to mutual fund schemes in respect of their

risk, return and liquidity. The study covers 4 randomly selected

mutual fund schemes out of mutual fund industry in India. The

analysis is strictly based on unit price information. Other company

performance indicators are not considered. It focuses on every day

net asset value prices during the period from 1st Jan, 2007 to 31st

Mar, 2007.



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5.Methodology of the Study

Keeping the objective in mind the study was based on the Net

Asset Value of one month market data of schemes. The data used

are the first hand information collected with newspaper and online

trading .the second hand information also contains the net asset

value of the schemes through companies websites

The whole study can be termed as comparative study. It is also

a desk research hence, there is no field work and collection of

primary date for this research except information provided by fortune

advisory services the business partner of Reliance Money which

constantly prepares a wealth management plan for its clients and

constantly updates its clients portfolio.

The study centers on mutual fund schemes in respect of their

risk, return and liquidity. However, with the objective and scope of the

study in mind, it was decided to base the study on return series of

selected mutual fund schemes.

Daily unit prices of the selected schemes were collected from

historical data. In order to know liquidity, at least three months daily

data was decided to be necessary. The reference period is from 1st

Jan, 2007 to 31st Mar, 2007.



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Research Technique

The quality of research output and the validity of its findings

depend upon appropriateness of the sampling design selected for the

study. It was needed to apply inferential statistical analysis; hence

probability sampling was chosen to be essential.

The study is relating to the risk and return if mutual fund scheme.

Therefore the Random Sampling was used.

Research Instruments

For analysis of the scheme value the risk and return

formulas was used for one month data.

Source of Data

Primary data

The data has collected with observation of net asset value of

each scheme and with online trading.



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Secondary data

The data has collected from

Company websites

Magazines and journals

Internet and stock brokers

Limitations of the Study

The study is limited to some selected mutual fund schemes

The data which relates to three months because of limited

time

The information is not available at a proper time

Investments in securities are subject to market risks and

include price fluctuation risks



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OVER VIEW OF THE CHAPTER SCHEMES

CHAPTER-1

This chapter gives the broad area about the history of Indian

mutual fund industry, growth of asset under management, strengths

and weakness of mutual fund, advantages and disadvantages of

mutual fund to investors and rating of mutual fund schemes. The

subject gives the broad area about the historical return and risk

profile about the particular schemes and the parameters which

measures the historical return and risk.

Chapter-2

This chapter describes the title of the study, the problem

statement which describes the objectives and scope to study the

topic. This research tells the methodology how the sample size has

been taken to study and technique used to find the solution for the

problem.

Chapter-3

This chapter gives the profile of the chairman, corporate

governance of the company, investment approach, investment

options, and risk factor which is associated for investment in portfolio.



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Chapter-4

This chapter gives the monthly risk and return of each selected

mutual fund scheme out of five mutual fund schemes. Based on the

above calculations the table and graph shows three months risk

return of each selected mutual fund schemes and inference for the

analysis.

Chapter-5This chapter shows the findings based on the above

calculations, suggestions for the findings and conclusion for the

whole study.



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COMPANY PROFILE

RELIANCE MONEY ANIL DHIRUBHAI AMBANI Group

Chairman's Profile

Regarded as one of the foremost corporate leaders of

contemporary India, Anil Dhirubhai Ambani is the Chairman of all the

listed Group companies Reliance Communications, Reliance

Capital, Reliance Energy and Reliance Natural Resources Ltd.



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He is also Chairman of the Board of Governors of Dhirubhai

Ambani Institute of Information and Communication Technology,

Gandhi Nagar, Gujarat.

Till recently, he also held the post of Vice Chairman and

Managing Director of Reliance Industries Limited (RIL), Indias largest

private sector enterprise.

Anil D Ambani joined Reliance in 1983 as Co-Chief Executive

Officer, and was centrally involved in every aspect of the companys

management over the next 22 years.

He is credited with having pioneered a number of path-breaking

financial innovations in the Indian capital markets. He spearheaded

the countrys first forays into the overseas capital markets with

international public offerings of global depositary receipts,

convertibles and bonds. Starting in 1991, he directed Reliance

Industries in its efforts to rise over US$ 2 billion. He also steered the

100-year Yankee bond issue for the company in January 1997.



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He is a member of

Wharton Board of Overseers, The Wharton School, USA

Central Advisory Committee, Central Electricity Regulatory

Commission

Board of Governors, Indian Institute of Management,

Ahmedabad

Board of Governors Indian Institute of Technology, Kanpur

In June 2004, he was elected for a six-year term as an

independent member of the Rajya Sabha, Upper House of Indias

Parliament a position he chose to resign voluntarily on March 25,

2006.

Awards and Achievements:

Conferred the CEO of the Year 2004 in the Platts Global

Energy Awards

Rated as one of Indias Most Admired CEOs for the sixth

consecutive year in the Business Barons TNS Mode opinion

poll, 2004



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Conferred The Entrepreneur of the Decade Award by the

Bombay Management Association, October 2002

Awarded the First Wharton Indian Alumni Award by the

Wharton India Economic Forum (WIEF) in recognition of his

contribution to the establishment of Reliance as a global leader

in many of its business areas, December 2001

Selected by Asiaweek magazine for its list of Leaders of the

Millennium in Business and Finance and was introduced as the

only new hero in Business and Finance from India, June 1999

Corporate Governance

Organizations, like individuals, depend for their survival,

sustenance and growth on the support and goodwill of the

communities of which they are an integral part, and must pay back

this generosity in every way they can.

This ethical standpoint, derived from the vision of their founder,

lies at the heart of the CSR philosophy of the Reliance ADA Group.

While they strongly believe that their primary obligation or duty

as corporate entities is to their shareholders they are just as mindfulof the fact that this imperative does not exist in isolation; it is part of a

much larger compact which they have with their entire body of



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stakeholders: From employees, customers and vendors to business

partners, eco-system, local communities, and society at large.

They evaluate and assess each critical business decision or

choice from the point of view of diverse stakeholder interest, driven

by the need to minimize risk and to pro-actively address long-term

social, economic and environmental costs and concerns.

For them, being socially responsible is not an occasional act of

charity or that one-time token financial contribution to the local

school, hospital or environmental NGO. It is an ongoing year-round

commitment, which is integrated into the very core of our business

objectives and strategy.

Because they believe that there is no contradiction between

doing well and doing right. Indeed, doing right is a necessarycondition for doing well.

Investment Approach

The heart of their approach

An important fact of their approach is their constant endeavor to

consistently generate absolute returns by pursuing a robust and

disciplined investment process.



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They strive to build a concentrated portfolio by including certain

select stocks that meet their set benchmarks. While their bottom-up

approach enables them to concentrate on identifying competitive

growth companies, using cash as a strategic investment tool allows

them to grab attractive opportunities arising in the dynamic market

environment.

Thus, they work towards creating reasonably concentrated

portfolios of what they believe are compelling opportunities.

Investment Process

They understand that having a discretionary control of customer

portfolio is a privileged position that requires a great degree of

expertise and care

. Each investment decision is taken after an in-depth

understanding of the opportunity through intensive in-house research.

Their team scans a large universe of stocks with a special focus

on under-researched or undiscovered opportunities. They interact

extensively with the managements of diverse companies in a

multitude of sectors to understand emerging business strategies and

trends. This process allows them to filter the most compelling

opportunities from the universe.



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Investment Options

Varied Investment Options:

Equities as an asset class provide a wide spectrum of

opportunities, though not all of them are tapped at all times. Their

three different product options are an endeavor to unearth these very

opportunities across market segments. To create personalized

portfolios as per customer specific needs

Absolute Freedom

A highly flexible investment option that exploits opportunities

across the broad market spectrum. The option pursues an aggressive

approach to portfolio construction and allocates assets judiciously

among large-cap, mid-cap and small-cap stocks.

Large-Caps

A relatively protective investment option with investments

predominantly in large caps stocks. This ensures liquidity and

lower impact costs leading to a more stable portfolio.



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Mid-Caps/Small-Caps

A relatively aggressive option that helps to harness the

potential of companies in the mid-cap/small-cap segment. This

option attempts to discover companies with the potential of both

earnings and multiples to rise.

Risk Factor

Investments in securities are subject to market risks and include

price fluctuation risks. There are no assurances or guarantees

that the objectives of any of the Schemes will be achieved. The

investments may not be suited to all categories of investors.

The past performance of the Portfolio Manager in any

Scheme/option is not indicative of the future performance in the

same Scheme/option or in any other scheme /option either

existing or that may be offered. There is no assurance that past

performances indicated in earlier Schemes/options will be

repeated. Investors are not being offered any guaranteed or

indicative returns through any of the Schemes.

The names of the Schemes/option do not in any manner

indicate their prospects or returns. The performance in the

equity Schemes/options may be adversely affected by the



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performance of individual companies changes in the market

place and industry specific and macro economic factors.

Technology stocks and some of the investments in niche

sectors run the risk of volatility, high valuation, obsolescence

and low liquidity.

Risk attached with the use of derivatives. The portfolio manager

may use derivative products as may be permitted by SEBI from

time to time. As and when the schemes trade in the derivatives

market there are risk factors and issues concerning the use of

derivatives that investors should understand.

Derivative products are specialized instruments that require

investment techniques and risk analyses different from those

associated with stocks and bonds. The use of a derivativerequires an understanding not only of the underlying instrument

but also of the derivative itself. Derivatives require maintenance

of adequate controls to monitor the transactions entered into,

the ability to assess the risk that a derivative adds to the

portfolio and other related capabilities.

In the case of stock lending, risks relate to the defaults fromcounterparties with regard to securities lent and the corporate

benefits accruing thereon, inadequacy of the collateral and



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settlement risks. The Portfolio Manager is not responsible or

liable for any loss resulting from the operations of the

schemes/options.

The Portfolio Manager may invest in the shares, units of mutual

funds, debt, deposits and other financial instruments of group

companies.

Reliance Money

Reliance Money is the electronic transaction platform

associated with Reliance Capital; one of Indias leading and fastest

growing private sector financial services companies, ranked amongst

the top 3 private sector financial services and banking companies, in

terms of net worth. Reliance Capital is a part of the Reliance- Anil

Dhirubhai Ambani Group.

Reliance money provides a comprehensive platform, offering

an investment avenue for a wide range of asset classes. Its endeavor

is to change the way India transacts in financial markets and avails

financial services.



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Reliance Money offers a single window facility. Enabling you to

access, amongst others, Equity, Equity and Commodities Derivatives,

Offshore Investment, IPOs, Mutual Funds, Life Insurance and

General Insurance products.

Reliance Money is the most cost-effective, convenient and

secures way to transact in a wide range of financial products and

services.

The highlights of Reliance Moneys offering are

Cost-effective

The fee charged by the affiliates of Reliance Money, through

whom the transactions can be placed, is among the lowest charged in

the present scenario. As an introductory offer, pay a flat fee of just

Rs. 500/- valid for 2 months or specified transactional value.

Convenience

You have the flexibility to access Reliance Money services in

multiple ways: through the Internet, Transaction Kiosks, Call and

Transact or seek assistance through out Business Partners.



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Security

Reliance Money provides secure access through an electronic

token that flashes a unique security number every 32 seconds (and

ensures that the number used for the earlier transaction is discarded).

This number works as a third level password that keeps your account

extra safe.

Single window for multiple products

Reliance Money through its affiliates/partners facilitatestransactions in Equity, Equity and Commodity Derivatives, Offshore

Investments, Mutual Funds, IPOs, Life Insurance and General

Insurance products.

3 in 1 integrated access

Reliance Money offers integrated access to your banking,

trading and demat account. We can transact without the hassle of

writing cheques



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PROFILE OF SELECTED MUTUAL FUND

1. Birla Sun Life Mutual Fund

Birla Sun Life Asset Management Company Ltd. (BSLAMC),

the investment managers of Birla Mutual Fund, is a joint venture

between the Aditya Birla Group and the Sun Life Financial Services

Inc. of Canada. The joint venture brings together the Aditya Birla

Groups' experience in the Indian market and Sun Life's global

experience.

Since its inception in 1994, Birla Mutual Fund has emerged as

one of India's leading Mutual Funds with over Rs. 16,500 crores * of

assets under management and an investor base in excess of 8 lakhs.

The fund offers a range of investment options, which include

diversified and sector specific equity schemes, fund of fund schemes,

hybrid and monthly income funds, a wide range of debt and treasury

products and offshore funds.

BSLAMC is the first asset management company in India to be

awarded the coveted ISO 9001:2000 certification by DNV,

Netherlands. BSLAMC also provides private Wealth Management

services.



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BSLAMC follows a long-term, fundamental research based

approach to investment. The approach is to identify companies,

which have excellent growth prospects and strong fundamentals. The

fundamentals include the quality of the companys management,

sustainability of its business model and its competitive position,

amongst other factors. Birla Sun Life Asset Management Company

has one of the largest team of research analysts in the industry,

dedicated to tracking down the best companies to invest in.

2. UTI Mutual Fund



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UTI Mutual Fund is managed by UTI Asset

Management Company Private Limited (Estb: Jan 14, 2003) who has

been appointed by the UTI Trustee Company Private Limited for

managing the schemes of UTI Mutual Fund and the schemes

transferred / migrated from UTI Mutual fund.

The UTI Asset Management Company has its registered office

at: UTI Tower, Grouund-Block, Bandra - Kurla Complex, Bandra

(East), Mumbai - 400 051 will provide professionally managed backoffice support for all business services of UTI Mutual Fund (excluding

fund management) in accordance with the provisions of the

Investment Management Agreement, the Trust Deed, the SEBI

(Mutual Funds) Regulations and the objectives of the schemes.

State-of-the-art systems and communications are in place to ensure a

seamless flow across the various activities undertaken by UTI AMC.

UTI AMC is a registered portfolio manager under the SEBI

(Portfolio Managers) Regulations, 1993 on February 3 2004, for

undertaking portfolio management services and also acts as the

manager and marketer to offshore funds through its 100 %

subsidiary, UTI International Limited, registered in Guernsey,

Channel Islands.

UTI Mutual Fund has come into existence with effect from 1st



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February 2003. UTI Asset Management Company presently manages

a corpus of over Rs. 34500 Crore.

UTI Mutual Fund has a track record of managing a

variety of schemes catering to the needs of every class of citizenry. It

has a nationwide network consisting 70 UTI Financial Centers (UFCs)

and UTI International offices in London, Dubai and Bahrain. With a

view to reach to common investors at district level, 4 satellite offices

have also been opened in select towns and districts. It has a well-qualified, professional fund management team, who has been highly

empowered to manage funds with greater efficiency and

accountability in the sole interest of unit holders. The fund managers

are also ably supported with a strong in-house equity research

department. To ensure better management of funds, a risk

management department is also in operation.

It has reset and upgraded transparency standards for the mutual

funds industry. All the branches, UFCs and registrar offices are

connected on a robust IT network to ensure cost-effective quick and

efficient service. All these have evolved UTI Mutual Fund to position

as a dynamic, responsive, restructured, efficient, and transparent and

SEBI compliant entity.

3.LIC Mutual Fund



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Life Insurance Corporation of India set up LIC Mutual Fund

on 19th June 1989 and contributed Rs. 2 Crores towards the corpus

of the Fund. LIC Mutual Fund was constituted as a Trust in

accordance with the provisions of the Indian Trust Act, 1882. The

settler is not responsible for the management of the Trust. The settler

is also not responsible or liable for any loss or shortfall resulting in

any of the schemes of LIC Mutual Fund

The Trustees of the LIC Mutual Fund have exclusive ownershipof Trust Fund and are vested with general power of superintendence,

discretion and management of the affairs of the Trust. LIC Mutual

Fund Asset Management Company Ltd. was formed on 20th April

1994 in compliance with the Securities and Exchange Board of India

(Mutual Funds) Regulations, 1993. The Company commenced

business on 29th April 1994. The Trustees of LIC Mutual Fund have

appointed LIC Mutual Fund Asset Management Company Ltd. as the

Investment Managers for LIC Mutual Fund. The Trustees are

responsible for appointing a Custodian. The Trustees should also

ensure that the activities of the Trust and the Asset Management

Company are in accordance with the Trust Deed and the SEBI

Mutual Fund Regulations as amended from time to time. The

Trustees have also to report periodically to SEBI on the functioning of

the Fund.



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4.HDFC MUTUAL FUND

HDFC Asset Management Company Ltd (AMC) wasincorporated under the Companies Act, 1956, on December 10,1999, and was approved to act as an Asset Management Companyfor the HDFC Mutual Fund by SEBI vide its letter dated June 30,2000.

The registered office of the AMC is situated at RamonHouse, 3rd Floor, H.T. Parekh Marg, 169, Backbay Reclamation,Churchgate, Mumbai - 400 020.

In terms of the Investment Management Agreement, the Trustee hasappointed the AMC to manage the Mutual Fund.

The present equity shareholding pattern of the AMC is as follows :

Particulars % of the paid upequity capital

Housing Development FinanceCorporation Limited

60

Standard Life Investments Limited 40

Zurich Insurance Company (ZIC), the Sponsor of Zurich IndiaMutual Fund, following a review of its overall strategy, had decided todivest its Asset Management business in India. The AMC hadentered into an agreement with ZIC to acquire the said business,subject to necessary regulatory approvals.

On obtaining the regulatory approvals, The Schemes of

Zurich India Mutual Fund have migrated to HDFC Mutual Fund onJune 19, 2003. These Schemes have been renamed



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DATA ANALYSIS AND INTERPRETATION

CALUCLATION OF RISK AND RETURN OF MUTUAL FUND SCHEMS

1. BIRLA SUN LIFE MUTUAL FUND

1.1 Table showing the Risk and Return of Equity Fund (Dividend option) for

the Month of JULY-2007

Date NAV Returns (%)R R

R R

2

2-July-2007 58.443-July-2007 59.05 1.04 0.97 0.954-July-2007 58.89 -0.27 -0.34 0.125-July-2007 58.59 -0.51 -0.58 0.346-July-2007 58.1 -0.84 -0.91 0.829-July-2007 57.47 -1.08 -1.15 1.3310-July-2007 56.93 -0.94 -1.01 1.0211-July-2007 57.53 1.05 0.98 0.9712-July-2007 58.22 1.20 1.13 1.2813-July-2007 58.55 0.57 0.50 0.25

16-July-2007 58.7 0.26 0.19 0.0317-July-2007 59.12 0.72 0.65 0.4218-July-2007 59.67 0.93 0.86 0.7419-July-2007 59.37 -0.50 -0.57 0.3320-July-2007 59.63 0.44 0.37 0.1423-July-2007 58.8 -1.39 -1.46 2.1424-July-2007 59.18 0.65 0.58 0.3325-July-2007 59.63 0.76 0.69 0.4826-July-2007 59.59 -0.07 -0.14 0.0227-July-2007 59.2 -0.65 -0.72 0.52

Total 1.35 12.21



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The Fund Return

1

n

i

Ri

Rn

==

=1.35

0.07%19

=

The Standard Deviation

=

2

1

1

n

i

Ri R

n

=

=12.21

19 1

=

0.82%



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1.2 Table showing the Risk and Return of Equity Fund Dividend Option for

the Month of AUGUST-2007


R R

2

1-Aug-2007 59.622-Aug-2007 60.4 1.31 1.82 3.313-Aug-2007 60.51 0.18 0.69 0.486-Aug-2007 60.22 -0.48 0.03 0.007-Aug-2007 60.74 0.86 1.37 1.898-Aug-2007 60.6 -0.23 0.28 0.089-Aug-2007 59.42 -1.95 -1.44 2.0710-Aug-2007 57.23 -3.69 -3.18 10.0813-Aug-2007 56.96 -0.47 0.04 0.0014-Aug-2007 57.06 0.18 0.69 0.4716-Aug-2007 58.44 2.42 2.93 8.5817-Aug-2007 58.56 0.21 0.72 0.5120-Aug-2007 58.27 -0.50 0.01 0.00

21-Aug-2007 57.94 -0.57 -0.06 0.0022-Aug-2007 57.44 -0.86 -0.35 0.1223-Aug-2007 56.34 -1.92 -1.41 1.9727-Aug-2007 56.73 0.69 1.20 1.4528-Aug-2007 56.57 -0.28 0.23 0.0529-Aug-2007 54.3 -4.01 -3.50 12.27

Total -9.10 43.33



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The Fund Return The Standard Deviation

1

n

i

Ri

Rn

==

=2

1

1

n

i

Ri R

n

=

=9.10

0.51%

18

= = 43.33

18 1

= 1.60%



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1.3 Table showing the Risk and Return of Equity Fund (Dividend Option) for

the Month of SEPTEMBER -2007


R R

2

3-Sep-2007 54.984-Sep-2007 54.45 -0.96 -0.93 0.875-Sep-2007 52.35 -3.86 -3.83 14.646-Sep-2007 52.56 0.40 0.43 0.197-Sep-2007 51.84 -1.37 -1.34 1.8010-Sep-2007 53.18 2.58 2.61 6.8411-Sep-2007 52.96 -0.41 -0.38 0.1512-Sep-2007 53.05 0.17 0.20 0.0413-Sep-2007 53.64 1.11 1.14 1.30

14-Sep-2007 52.63 -1.88 -1.85 3.4317-Sep-2007 52.8 0.32 0.35 0.1218-Sep-2007 52.18 -1.17 -1.14 1.3119-Sep-2007 52.79 1.17 1.20 1.4420-Sep-2007 53.27 0.91 0.94 0.8821-Sep-2007 53.75 0.90 0.93 0.8724-Sep-2007 54.78 1.92 1.95 3.7925-Sep-2007 55.26 0.88 0.91 0.8226-Sep-2007 54.93 -0.60 -0.57 0.3227-sep-2007 54.12 -1.47 -1.44 2.0928-Sep-2007 54.21 0.17 0.20 0.0429-Sep-2007 54.52 0.57 0.60 0.36

Total -0.63 41.30



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1

n

i

Ri

Rn

== =

2

1

1

n

i

Ri R

n

=

=0.63

0.03%20

= = 41.30

20 1=

1.47%



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1.4 Table showing the Risk and Return of Equity Fund (Growth Option) for

the month of JULY2007

Date NAV Returns(%)R R

R R

2

2-July-2007 11.13-July-2007 11.22 1.08 1.01 1.024-July-2007 11.19 -0.27 -0.34 0.115-July-2007 11.13 -0.54 -0.61 0.376-July-2007 11.03 -0.90 -0.97 0.949-July-2007 10.91 -1.09 -1.16 1.3410-July-2007 10.81 -0.92 -0.99 0.9711-July-2007 10.92 1.02 0.95 0.9012-July-2007 11.05 1.19 1.12 1.2613-July-2007 11.12 0.63 0.56 0.3216-July-2007 11.15 0.27 0.20 0.0417-July-2007 11.23 0.72 0.65 0.4218-July-2007 11.33 0.89 0.82 0.6719-July-2007 11.28 -0.44 -0.51 0.2620-July-2007 11.33 0.44 0.37 0.1423-July-2007 11.17 -1.41 -1.48 2.20

24-July-2007 11.24 0.63 0.56 0.3125-July-2007 11.32 0.71 0.64 0.4126-July-2007 11.32 0.00 -0.07 0.0027-July-2007 11.24 -0.71 -0.78 0.60

Total 1.32 12.29


1

n

i

Ri

Rn

== =

2

1

1

n

i

Ri R

n

=

=1.32

0.07%19

= = 12.2919 1

=

0.83%



71/121


IN INDIA

1.5 Table showing the Risk and Return of Equity Fund (Growth Option) fjor

the Month of AUG-2007


R R

2

1-Aug-2007 11.322-Aug-2007 11.47 1.33 1.83 3.333-Aug-2007 11.49 0.17 0.67 0.456-Aug-2007 11.44 -0.44 0.06 0.00

7-Aug-2007 11.53 0.79 1.29 1.668-Aug-2007 11.51 -0.17 0.33 0.119-Aug-2007 11.28 -2.00 -1.50 2.2410-Aug-2007 10.87 -3.63 -3.13 9.8313-Aug-2007 10.82 -0.46 0.04 0.0014-Aug-2007 10.83 0.09 0.59 0.3516-Aug-2007 11.1 2.49 2.99 8.9617-Aug-2007 11.12 0.18 0.68 0.4620-Aug-2007 11.06 -0.54 -0.04 0.0021-Aug-2007 11 -0.54 -0.04 0.0022-Aug-2007 10.91 -0.82 -0.32 0.10

23-Aug-2007 10.7 -1.92 -1.42 2.0327-Aug-2007 10.77 0.65 1.15 1.3328-Aug-2007 10.74 -0.28 0.22 0.0529-Aug-2007 10.31 -4.00 -3.50 12.28

Total -9.10 43.19



72/121


IN INDIA


1

n

i

Ri

Rn

== =

2

1

1

n

i

Ri R

n

=

=9.10

0.51%18

= = 43.19

18 1=

1.59%



73/121


IN INDIA

1.6 Table showing the Risk and Return of Equity Fund (Growth Option) forthe Month of SEP-2007


R R

2

3-Sep-2007 10.44 - - -4-Sep-2007 10.34 -0.96 -0.93 0.865-Sep-2007 9.94 -3.87 -3.84 14.736-Sep-2007 9.98 0.40 0.43 0.197-Sep-2007 9.84 -1.40 -1.37 1.8810-Sep-2007 10.1 2.64 2.67 7.1411-Sep-2007 10.06 -0.40 -0.37 0.1312-Sep-2007 10.07 0.10 0.13 0.0213-Sep-2007 10.19 1.19 1.22 1.4914-Sep-2007 9.99 -1.96 -1.93 3.7417-Sep-2007 10.02 0.30 0.33 0.1118-Sep-2007 9.91 -1.10 -1.07 1.1419-Sep-2007 10.02 1.11 1.14 1.3020-Sep-2007 10.12 1.00 1.03 1.0621-Sep-2007 10.21 0.89 0.92 0.8524-Sep-2007 10.4 1.86 1.89 3.58

25-Sep-2007 10.49 0.87 0.90 0.8026-Sep-2007 10.43 -0.57 -0.54 0.2927-sep-2007 10.28 -1.44 -1.41 1.9828-Sep-2007 10.29 0.10 0.13 0.0229-Sep-2007 10.35 0.58 0.61 0.38

Total -0.66 41.68


1

n

i

Ri

Rn

== =

2

1

1

n

i

Ri R

n

=

=0.66

0.03%20

= =

41.68

20 1=

1.48%



74/121


IN INDIA

2. HDFC MUTUAL FUND

2.1 Table showing the Risk and Return of Equity Fund (Dividend Option)

for the Month of JULY-2007


R R

2

2-July-2007 43.973-July-2007 44.2 0.53 0.38 0.154-July-2007 44.1 -0.22 -0.22 0.055-July-2007 44 -0.23 -0.23 0.056-July-2007 43.49 -1.17 -1.32 1.73

9-July-2007 43.2 -0.66 -0.81 0.6610-July-2007 42.86 -0.78 -0.93 0.8711-July-2007 43.59 1.69 1.54 2.3812-July-2007 44.44 1.96 1.81 3.2713-July-2007 44.94 1.12 0.97 0.9516-July-2007 45.08 0.32 0.17 0.0317-July-2007 45.45 0.82 0.67 0.4418-July-2007 45.6 0.32 0.17 0.0319-July-2007 45.26 -0.74 -0.89 0.8020-July-2007 45.33 0.17 0.02 0.0023-July-2007 44.98 -0.78 -0.93 0.87

24-July-2007 45.17 0.42 0.27 0.0725-July-2007 45.55 0.85 0.70 0.5026-July-2007 45.36 -0.43 -0.58 0.3327-July-2007 45.19 -0.37 -0.52 0.27

Total 2.82 13.44


1

n

i

Ri

R

n

== =

2

1

1

n

i

Ri R

n

=

=2.82

0.15%19

= = 13.4419 1

=

0.86%



75/121


IN INDIA

2.2 Table showing the Risk and Return of Equity Fund (Dividend Option) forthe Month of AUG-2007


R R

2

1-Aug-2007 45.4992-Aug-2007 45.871 0.82 1.23 1.513-Aug-2007 46.141 0.59 1.00 1.006-Aug-2007 46.112 -0.06 0.35 0.127-Aug-2007 46.374 0.57 0.98 0.968-Aug-2007 46.26 -0.25 0.16 0.039-Aug-2007 45.91 -0.76 -0.35 0.1210-Aug-2007 44.916 -2.17 -1.76 3.0813-Aug-2007 44.628 -0.64 -0.23 0.0514-Aug-2007 44.579 -0.11 0.30 0.0916-Aug-2007 45.73 2.58 2.99 8.9517-Aug-2007 45.757 0.06 0.47 0.2220-Aug-2007 45.261 -1.08 -0.67 0.4521-Aug-2007 45.031 -0.51 -0.10 0.0122-Aug-2007 44.469 -1.25 -0.84 0.7023-Aug-2007 43.459 -2.27 -1.86 3.46

27-Aug-2007 43.548 0.20 0.61 0.3828-Aug-2007 43.415 -0.31 0.10 0.0129-Aug-2007 42.16 -2.89 -2.48 6.15

Total -7.47 27.3



76/121


IN INDIA


1

n

i

Ri

Rn

== =

2

1

1

n

i

Ri R

n

=

=7.47

0.42%18

= =

27.30

18 1=

1.27%



77/121


IN INDIA

2.3 Table showing the Risk and Return of Equity Fund (Dividend Option) forthe Month of SEP-2007


R R

2

3-Sep-2007 42.894-Sep-2007 41.95 -2.19 -1.55 2.415-Sep-2007 40.22 -4.12 -3.48 12.106-Sep-2007 40.86 1.58 2.22 4.927-Sep-2007 40.35 -1.24 -0.60 0.3610-Sep-2007 36.4 -9.80 -9.16 83.9311-Sep-2007 36.22 -0.48 0.16 0.0312-Sep-2007 36.58 0.99 1.63 2.6413-Sep-2007 36.86 0.77 1.41 1.9814-Sep-2007 35.89 -2.65 -2.01 4.0217-Sep-2007 36.18 0.82 1.46 2.1418-Sep-2007 35.86 -0.88 -0.24 0.0619-Sep-2007 36.29 1.19 1.83 3.3420-Sep-2007 36.59 0.82 1.46 2.1321-Sep-2007 37.08 1.36 2.00 3.9824-Sep-2007 37.85 2.06 2.70 7.31

25-Sep-2007 37.84 -0.03 0.61 0.3726-Sep-2007 37.52 -0.85 -0.21 0.0427-sep-2007 36.81 -1.89 -1.25 1.5628-Sep-2007 37.06 0.68 1.32 1.7429-Sep-2007 37.42 0.98 1.62 2.64

Total -12.87 137.70


1

n

i

Ri

Rn

== =

2

1

1

n

i

Ri R

n

=

=12.87

0.64%20

= =

137.70

20 1=

2.70%



78/121


IN INDIA

2.4 Table showing the Risk and Return of Equity Fund (Growth Option) for



R R

2

2-July-2007 147.293-July-2007 148.07 0.53 0.38 0.154-July-2007 147.74 -0.22 -0.37 0.145-July-2007 147.4 -0.23 -0.38 0.15

6-July-2007 145.68 -1.17 -1.32 1.749-July-2007 144.72 -0.66 -0.81 0.6610-July-2007 143.58 -0.78 -0.93 0.8711-July-2007 146.01 1.69 1.54 2.3812-July-2007 148.87 1.96 1.81 3.2713-July-2007 150.55 1.12 0.97 0.9516-July-2007 151.02 0.32 0.17 0.0317-July-2007 152.25 0.82 0.67 0.4418-July-2007 152.74 0.32 0.17 0.0319-July-2007 151.61 -0.74 -0.89 0.8020-July-2007 151.86 0.17 0.02 0.00

23-July-2007 150.67 -0.78 -0.93 0.8724-July-2007 151.3 0.42 0.27 0.0725-July-2007 152.6 0.85 0.70 0.5026-July-2007 151.95 -0.43 -0.58 0.3327-July-2007 151.4 -0.36 -0.51 0.26

Total 2.82 13.62


1

n

i

Ri

Rn

== =

2

1

1

n

i

Ri R

n

=

=2.82

0.15%19

= = 13.6219 1

=

0.89%



79/121


IN INDIA

2.5 Table showing the Risk and Return of Equity Fund (Growth Option) forthe Month of AUG-2007

Date NAV Return (%)R R

R R

2

1-Aug-2007 152.42-Aug-2007 153.7 0.82 1.24 1.533-Aug-2007 154.6 0.59 1.01 1.026-Aug-2007 154.5 -0.06 0.36 0.137-Aug-2007 155.3 0.57 0.99 0.988-Aug-2007 155 -0.25 0.17 0.039-Aug-2007 153.8 -0.76 -0.34 0.1110-Aug-2007 150.5 -2.17 -1.75 3.0513-Aug-2007 149.5 -0.64 -0.22 0.0514-Aug-2007 149.3 -0.11 0.31 0.1016-Aug-2007 153.2 2.58 3.00 9.0117-Aug-2007 153.3 0.06 0.48 0.2320-Aug-2007 151.6 -1.08 -0.66 0.4421-Aug-2007 150.8 -0.51 -0.09 0.0122-Aug-2007 149 -1.25 -0.83 0.6923-Aug-2007 145.6 -2.27 -1.85 3.43

27-Aug-2007 145.9 0.21 0.63 0.3928-Aug-2007 145.4 -0.31 0.11 0.0129-Aug-2007 141.2 -2.89 -2.47 6.10

Total -7.47 27.30


1

n

i

Ri

Rn

== =

2

1

1

n

i

Ri R

n

=

=7.47

0.42%18

= =

27.30

18 1=

1.27%



80/121


IN INDIA

2.6 Table showing the Risk and Return of Equity Fund (Growth Option ) for

the of SEP-2007


R R

2

3-Sep-2007 143.684-Sep-2007 140.53 -2.19 -2.17 4.725-Sep-2007 134.74 -4.12 -4.10 16.816-Sep-2007 136.86 1.58 1.60 2.55

7-Sep-2007 135.17 -1.24 -1.22 1.4810-Sep-2007 138.69 2.60 2.62 6.8911-Sep-2007 138.03 -0.47 -0.45 0.2112-Sep-2007 139.39 0.99 1.01 1.0113-Sep-2007 140.46 0.77 0.79 0.6214-Sep-2007 136.75 -2.64 -2.62 6.8917-Sep-2007 137.87 0.82 0.84 0.7118-Sep-2007 136.66 -0.88 -0.86 0.7419-Sep-2007 138.28 1.19 1.21 1.4620-Sep-2007 139.42 0.82 0.84 0.7121-Sep-2007 141.3 1.35 1.37 1.89

24-Sep-2007 144.22 2.06 2.08 4.3425-Sep-2007 144.18 -0.03 -0.01 0.0026-Sep-2007 142.96 -0.85 -0.83 0.6827-sep-2007 140.26 -1.89 -1.87 3.4928-Sep-2007 141.21 0.68 0.70 0.4929-Sep-2007 142.6 0.98 1.00 1.01

Total -0.46 56.67


1

n

i

Ri

Rn

=

=

=

2

1

1

n

i

Ri R

n

=

=0.64

0.02%20

= = 56.67

20 1=

1.73%



81/121


IN INDIA

3 LIC MUTUAL FUND3.1 Table showing the Risk and Return of Equity Fund (Dividend Option) for


Date NAV Returns(%)R R

R R

2

2-July-2007 11.953-July-2007 12.02 0.58 0.43 0.194-July-2007 11.97 -0.41 -0.56 0.315-July-2007 11.98 0.07 -0.08 0.01

6-July-2007 11.86 -1.01 -1.16 1.359-July-2007 11.73 -1.04 -1.19 1.4110-July-2007 11.59 -1.19 -1.34 1.7911-July-2007 11.85 2.23 2.08 4.3412-July-2007 12.14 2.45 2.30 5.3013-July-2007 12.33 1.54 1.39 1.9416-July-2007 12.37 0.30 0.15 0.0217-July-2007 12.56 1.55 1.40 1.9718-July-2007 12.55 -0.11 -0.26 0.0719-July-2007 12.38 -1.34 -1.49 2.2220-July-2007 12.36 -0.13 -0.28 0.0823-July-2007 12.22 -1.10 -1.25 1.5624-July-2007 12.3 0.61 0.46 0.2125-July-2007 12.47 1.42 1.27 1.6226-July-2007 12.48 0.07 -0.08 0.0127-July-2007 12.28 -1.67 -1.82 3.30

Total 2.84 27.70


1

n

i

Ri

R

n

== =

2

1

1

n

i

Ri R

n

=

=2.84

0.15%19

= = 27.70 1.24%19 1

=



82/121


IN INDIA

3.2 Table showing the Risk and Return of LIC Equity Fund (Dividend

Option) for the Month of AUG-2007


R R

2

1-Aug-2007 11.9492-Aug-2007 12.018 0.58 0.32 0.103-Aug-2007 11.969 -0.41 -0.67 0.456-Aug-2007 11.977 0.07 -0.19 0.04

7-Aug-2007 11.856 -1.01 -1.27 1.628-Aug-2007 11.733 -1.04 -1.30 1.699-Aug-2007 11.594 -1.19 -1.45 2.0910-Aug-2007 11.853 2.23 1.97 3.8913-Aug-2007 12.143 2.45 2.19 4.8114-Aug-2007 12.331 1.54 1.28 1.6516-Aug-2007 12.368 0.30 0.04 0.0017-Aug-2007 12.56 1.55 1.29 1.6720-Aug-2007 12.545 -0.11 -0.37 0.1421-Aug-2007 12.377 -1.34 -1.60 2.5622-Aug-2007 12.361 -0.13 -0.39 0.15

23-Aug-2007 12.225 -1.10 -1.36 1.8527-Aug-2007 12.3 0.61 0.35 0.1228-Aug-2007 12.475 1.42 1.16 1.36

Total 4.44 24.19


1

n

i

Ri

Rn

== =

2

1

1

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