Mutual Fund Comparision Analysis

8/20/2019 Mutual Fund Comparision Analysis

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A REPORT ON

“MUTUAL FUND COMPARISION ANALYSIS”

IN

NETWORTH STOCK BROKING LIMITED

Project work submitted in partial fulfillment of the requirements for the

Award of degree in

MASTER OF BUSINESS ADMINISTRATION

Submitted by

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DECLARATION

I here by declare that, the project “Mutual Fund Co!a"#$on Anal%$#$” is original and

one that has been carried out by me as a student of M!A, " NETWORTH STOCK

BROKING LIMITED# and submitted for the partial requirement for the award of degree of “

MASTER OF BUSINESS ADMINSTRATION” for the academic year It has not submitted

else where for the award of any degree or diploma of any institute or uni$ersity in partial or full

%ate&Place&

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ACKNOWLEDGEMENT

I take the opportunity to e(press my deep and sincere gratitude to the management of

NETWORTH STOCK BROKING LIMITED for their gesture of allowing me to undertake

this project and its $arious employees who lent me their hand towards the completion of this

study

)he co*operation I recei$ed from the wide cross*section of employee of NETWORTH

makes it difficult to style out indi$iduals for acknowledgement

+owe$er, I am particularly indebted to &&&&&&&&&&&, manager for allowing me to carry outmy project work in the organiation and for apprising me of the situation with necessary

background and helping me to complete this project work

I am also thankful to our college principal &&&&&&&&&&&&&&&& and ************************

pro$iding their guidance to complete this project work

-ast, but not least, I thank my family members, my friends and classmates, who ha$e

done as they could to help me finish the project on time

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CERTIFICATE FROM PRINCIPAL

CERTIFICATE

)his is to certify that Ms N bearing /oll 0o '()*+C,'(' student of our college

studying M!A final has successfully completed her project work entitled “MUTUAL FUND

COMPARISON ANALYSIS” in NETWOTH STOCK BROKING LTD- and made a

presentation in the seminar organied on )his project is submitted in partial

fulfillment for the award of Masters %egree in !usiness Administration

PRINCIPAL

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C."t#/#0at. /"o t1. !"o2.0t 3u#d.

Asst Professor

%epartment 3f !usiness Management

)his is to certify that the project report entitled “MUTUAL FUND COMARISON

ANALYSIS” submitted by in partial fulfillment for the award of masters of !usiness

Administration

)his is record of bonafide work done by her under my guidance and super$ision

Place &

%ate&

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CONTENTS PAGE

CHAPTER& I

• Introduction of Mutual 5unds

• +istory of Mutual 5unds

• Structure of Mutual 5unds

• 3bjecti$es of the study

• Methodology of the study

• -imitations of the study

CHAPTER& II

• Profile of the organiation

CHAPTER& III

• About AM5I 6Association of Mutual 5unds in India7

• /ole and concepts

• )ypes and objecti$es

•

/isk associated with mutual funds

CHAPTER&I4

• 8alculation of 0A9

• Selection of Mutual 5und company

• Selection of Mutual 5und schemes

• 8omparison of Mutual fund schemes

CHAPTER&4

• 8onclusions : suggestions

• !ibliography

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8+AP) 35 M=)=A- 5=0%S

• S)/=8)=/< 35 M=)=A- 5=0%S

• 3!?

• !


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INTRODUCTION TO MUTUAL FUNDS

MUTUAL FUND

A Mutual 5und is a form of collecti$e in$estment that pools money from manyin$estors and in$ests their money in stocks, bonds, short*term money market instruments, and or

other securities In a Mutual fund, the fund manager trades the fundBs underlying securities,

realiing capital gains or losses, and collects the di$idend or interest income

%efinitions&

Mutual 5und is a non*depository, non*banking financial intermediary which acts asimportant $ehicle for bringing wealth holders and deficit units together

Indirectly

"Mutual funds are also suitable for those in$estors who do not ha$e knowledge of capital market and by in$esting through a mutual fund it can make use of knowledge of

specialied people which the mutual fund employees#

C PIERCE5 6AMES-L

)he origin of the Indian mutual fund industry can be traced back to 1D;2 when the Indian

@o$ernment, with a $iew to augment small sa$ings within the country and to channelise thesesa$ings to the capital markets, set up the =nit )rust of India 6=)I7 )he =)I was setup under a

specific statute, the =nit )rust of India Act, 1D;. )he =nit )rust of India launched its first open*

ended equity scheme called =nit ;2 in the year 1D;2, which turned out to be one of the most

popular mutual fund schemes in the country In 1DE, the go$ernment permitted other publicsector banks and insurance companies to promote mutual fund schemes Pursuant to this

rela(ation, si( public sector banks and two insurance companies $i -ife Insurance 8orporationof India and @eneral Insurance 8orporation of India launched mutual fund schemes in the

country

S.0u"#t#.$ E701an3. Boa"d o/ Ind#a 6S

fund industry )his pro$ed to be a boon for the mutual fund industry and since then se$eral

mutual funds ha$e been set up by the pri$ate sector as well as the joint sector Fothari Pioneer Mutual fund became the first from the pri$ate sector to establish a mutual fund in association

with a foreign fund Since then se$eral pri$ate sector companies ha$e established their own fundsin the country, making mutual fund industry one of the most followed sector by critics andin$estors alike )he share of pri$ate sector mutual funds too has gone up rapidly

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In the period between 1D;. and 1DEE, when the =)I was the sole player in the industry, theassets under management grew to about /s; billion In the second phase between 1DEE*1DD2,

when public sector banks and insurance companies were allowed to launch mutual fund schemes,the total assets in the mutual fund industry grew to about /s;1G billion with the total number of

schemes increasing to 1; by the end of 1DD2 )he third phase of the mutual fund industry,

which commenced in 1DD2, witnessed e(ponential growth of the industry, with the ad$ent of pri$ate players therein As on May .1, 'GG2, the total assets under management stood at /s142G

billion and the total number of schemes stood at .DD

%uring the last three and a half decades, =)I has been a dominant player in the mutual

fund industry )he total assets under the management of the =)I as on September .G, 'GG' wereto the tune of /s22' billion, which amount to almost 21H of the total assets under managementin the domestic mutual fund industry =)I has witnessed some erosion of assets pursuant to the

last yearBs crisis arising on account of its =nit ;2 scheme, the scheme with largest amount of

assets under management )his was the first scheme launched by the =)I with a significantequity e(posure and the returns of which was not linked to the market )his resulted in a payment

crisis when the stock markets crashed during the last two years, which resulted in some degree of

loss of in$estorsB confidence in =)I leading to erosion of its assets under management )his period also ga$e opportunity to the pri$ate players to demonstrate better returns thereby

capturing a significant market share

hate$er may ha$e happened to mutual funds in the past and whate$er one is

seeing now, mutual funds are here to stay as long as they can deli$er the aspirations of their

in$estors 3ne must not forget that India is a large nation with a population of more than 1 billion people and the potential continues to be huge +owe$er, to be fair mutual fund managers should

also stri$e to impro$e their performance and not blame the $agaries of the market all the times

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HISTORY OF MUTUAL FUNDS

Glo8al

)he definition of a mutual fund is a form of collecti$e in$estment that pools money from

many in$estors and in$ests their money in stocks, bonds, short*term money market instruments,andJor other securities In a mutual fund, the fund manager trades the fundBs underlying

securities, realiing capital gains or losses, and collects the di$idend or interest income )he

in$estment proceeds are then passed along to the indi$idual in$estors )he $alue of a share of themutual fund, known as the net asset $alue per share 60A97, is calculated daily based on the total

$alue of the fund di$ided by the number of shares currently issued and outstanding

-egally known as an "open*end company# under the In$estment 8ompany Act of 1D2G 6the

primary regulatory statute go$erning in$estment companies7, a mutual fund is one of three basic

types of in$estment companies a$ailable in the =nited States 3utside of the =nited States 6withthe e(ception of 8anada, which follows the =S model7, mutual fund is a generic term for

$arious types of collecti$e in$estment $ehicle In the =nited Fingdom and western


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Ind#an

)he mutual fund industry in India started in 1D;. with the formation of =nit )rust of

India, at the initiati$e of the @o$ernment of India and /eser$e !ank the )he history of mutualfunds in India can be broadly di$ided into four distinct phases

F#"$t P1a$. 9 ,:*;&


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)he number of mutual fund houses went on increasing, with many foreign mutual funds

setting up funds in India and also the industry has witnessed se$eral mergers and acquisitions As

at the end of ?anuary 'GG., there were .. mutual funds with total assets of /s 1,'1,EG4 crores)he =nit )rust of India with /s22,421 crores of assets under management was way ahead of

other mutual funds

Fou"t1 P1a$. 9 $#n0. F.8"ua"% )''=

In 5ebruary 'GG., following the repeal of the =nit )rust of India Act 1D;. =)I was

bifurcated into two separate entities 3ne is the Specified =ndertaking of the =nit )rust of Indiawith assets under management of /s'D,E.4 crores as at the end of ?anuary 'GG., representing

broadly, the assets of =S ;2 scheme, assured return and certain other schemes )he Specified

=ndertaking of =nit )rust of India, functioning under an administrator and under the rulesframed by @o$ernment of India and does not come under the pur$iew of the Mutual 5und

/egulations

)he second is the =)I Mutual 5und -td, sponsored by S!I, P0!, !3! and -I8It is registered with S

of the erstwhile =)I which had in March 'GGG more than /s;, GGG crores of assets under

management and with the setting up of a =)I Mutual 5und, conforming to the S

mutual fund industry has entered its current phase of consolidation and growth As at the end of

September, 'GG2, there were 'D funds, which manage assets of /s14.1GE crores under 2'1Schemes

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FUND BASICS

A Mutual 5und is a trust that pools the sa$ings of a number of in$estors who share a

common financial goal )he money thus collected is in$ested by the fund manager in different

types of securities depending upon the objecti$e of the scheme )hese could range from shares todebentures to money market instruments )he income earned through these in$estments and the

capital appreciation realied by the scheme is shared by its unit holders in proportion to the

number of units owned by them )hus a Mutual 5und is the most suitable in$estment for thecommon man as it offers an opportunity to in$est in a di$ersified, professionally managed

portfolio a relati$ely low cost )he small sa$ings of all the in$estors are put together to increase

the buying power and hire a professional manager to in$est and monitor the money Anybodywith an in$isible surplus of as little as a few thousand rupees can in$est in Mutual 5unds


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A mutual fund is set up in the form of a trust, which has Sponsor, )rustees, AssetManagement 8ompany 6AM87 and a 8ustodian )he trust is established by a sponsor or more

than one sponsor who is like a promoter of a company )he trustees of the mutual fund hold its

property for the benefit of the unit*holders )he AM8, appro$ed by S

holds the securities of $arious schemes of the fund in its custody )he trustees are $ested with thegeneral power of superintendence and direction o$er AM8 )hey monitor the performance and

compliance of S

A typical mutual fund structure in India can be graphically represented as

5ollows&

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SPONSOR>

Sponsor is the person who acting alone or in combination with another body corporate

establishes a mutual fund Sponsor must contribute at least 2GH of the net worth of thein$estment Managed and meet the eligibility criteria prescribed under the Securities and

)he Mutual 5und is constituted as a trust in accordance with the pro$isions of the Indian

)rusts Act, 1EE' by the Sponsor )he trust deed is registered under the Indian /egistration Act,1DGE

TRUSTEE>

)rustee is usually a company 6corporate body7 or a !oard of )rustees 6body of indi$iduals7 )he main responsibility of the )rustee is to safeguard the interest of the unit holders

and join together to ensure that the AM8 functions in the interest of in$estors and in accordance

with the Securities and


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• )he AM8 should ha$e and must at all times maintain, a minimum net worth of /s1G

8rores

• )he board of directors of such AM8 has at least 4GH directors, who are not Associates of

or associated in any manner with, the sponsor or any of its Subsidiaries or the trustees

• )he 8hairman of the AM8 is not a trustee of any mutual fund

In addition to the abo$e eligibility criteria and other on going compliance

requirements laid down in the Mutual 5und /egulations, the AM8 is required to obser$e the

following restrictions in its normal course of business Any director of the AM8 cannot holdoffice of a director in another AM8 unless such person is an independent director and the

appro$al of the board of the AM8 of which such person is a director, has been obtainedK the

AM8 shall not act as a trustee of any mutual fundK the AM8 cannot undertake any other businessacti$ities e(cept acti$ities in the nature of portfolio management ser$ices, management and

ad$isory ser$ices to offshore funds, pension funds, pro$ident funds, $enture capital funds,management of insurance funds, financial consultancy and e(change of research on commercial

basis if any of such acti$ities are not in conflict with the acti$ities of the mutual fund

CUSTODIAN>

)he mutual fund is required, under the Mutual 5und /egulations, to appoint a

custodian to carry out the custodial ser$ices for the schemes of the fund 3nly institutions with

substantial organiational strength, ser$ice capability in terms of computeriation, and other infrastructure facilities are appro$ed to act as custodians )he custodian must be totally de*linked

from the AM8 and must be registered with S

India 68ustodian of Securities7 @uidelines, 1DD;, any person proposing to carry on the businessas a custodian of securities must register with the S

eligibility criteria Additionally, a custodian in which the sponsor or its associates holds 4GH or

more of the $oting rights of the share capital of the custodian or where 4GH or more of the

directors of the custodian represent the interest of the sponsor or its associates cannot act ascustodian for a mutual fund constituted by the same sponsor or any of its associate or subsidiary

company

TRANSFER AGENTS>

)ransfer agents are responsible for issuing and redeeming units of the mutual fund and pro$ide other related ser$ices such as preparation of transfer documents and updating in$estor

records A fund may choose to carry out this acti$ity in*house and charge the scheme for the

ser$ice at a competiti$e market rate here an outside )ransfer Agent is used, the fund in$estor will find the agent to be an important interface to deal with, since all of the in$estor ser$ices that

a fund pro$ides 6besides the in$estment management7 are going to be dependent on the transfer

agent

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DISTRIBUTORS>

Mutual funds operate as collecti$e in$estment $ehicles, on the principle of accumulatingfunds from a large number of in$estors and then in$esting on a big scale 5or a fund to sell units

across a wide retail base of indi$idual in$estors, an established network of distribution agents isessential

6AM8Bs usually appoint %istributors or brokers, who sell units on behalf of the fund

Some funds e$en require that all transactions be routed through such brokers A sponsor or an

associate 6or in some cases, an employee7 may act as a distributor for the AM8 with which he or she is associated, only if adequate disclosure of such in$ol$ement and the brokerageJcommission

paid is made to unit*holders A broker usually acts on behalf of se$eral mutual funds

simultaneously and may ha$e se$eral sub*brokers under him for the purpose of distribution of units

In India, besides brokers, independent indi$iduals are appointed as "agents# for the purpose of selling the fund schemes to in$estors )hese agents are not brokers in a formal sense

and do not belong to any stock e(change or, organied self regulatory body of brokers

hile indi$iduals constitute the largest segment in the category of mutual fund"distributors#, other distributors include banks, 0on !anking 5inance 8ompanies, and corporate

It is important to note here that all mutual fund distributors * from indi$idual agentsto large banks * ser$e as much, if not more than, as in$estment ad$isors as fund salespersons In

fact, most in$estors look to the agents as ad$isors and in other countries the agents are called

"financial ad$isors# )his is an important function and de$eloped countries like the*=SA

require that the financial ad$isors be suitably trained in the ad$isory function and role )hey aree$en required to pass a specifically designated e(amination, before being allowed to sell fund

products to in$estors hether required by regulation or not, knowledge of financial ad$isoryfunction is essential for fund agents

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OB6ECTI4ES OF THE STUDY

• )o analye the 8oncepts and parameters of Mutual 5unds

• )o gi$e a brief idea about the benefits a$ailable for Mutual 5unds

In$estment

• )o gi$e an idea of the types of schemes a$ailable

• )o discuss about the Market trends of the Mutual 5und In$estment

• )o study some of the prominent Mutual 5und 8ompanies schemes : its

8omparison analysis

METHODOLOGY OF THE STUDY

)he Primary data as e(pressed abo$e was collected through 0etworth Stock !roking

-imited, in course of inter$iewing through attending classes

)he Secondary data was pro$ided for the study through the company literature business

Magaines, !roachers, 5act Sheets : %ifferent 8ompany ebsites played a major role incollection of data

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BENEFITS OF MUTUAL FUNDS

P"o/.$$#onal Mana3..nt>

Lualified in$estment professionals who to ma(imie returns and minimie risk monitor in$estorBs money hen you buy in to a mutual fund, you are handing your money to anin$estment professional that has e(perience in making in$estment decisions It is the fund

managerBs job 6a7 find the best securities for the fund, gi$en the fundBs stated in$estment

objecti$esK and 6b7 keep track of in$estments and changes in market conditions and adjust the

mi( of portfolio, as and when required

Po"t/ol#o D#?."$#/#0at#on>

)he nuclear weapon in your arsenal for your fight against risk It simply means that you

must spread your in$estment across different securities 6stocks, bonds, money market

instruments, real estate etc7 and different sectors 6auto, te(tile, information technology etc7 thiskind of di$ersification may add to the stability of your returns 5or e(ample during one period of

time equities might under perform but bonds and money market instruments might do well

enough to offset the effect of a slump in the equity markets Similarly the information technologysector might be faring poorly but the auto and te(tile sectors might do well and may protect your

principal in$estment as well as help you meet your return objecti$es

D#?."$#/#0at#on o/ R#$@>

hen an in$estor in$ests directly, all the risk of the potential loss is his own, whether he

places a deposit with a company or a bank, or buys a share or debenture on his own or in anyother form hile in$esting in a pool of funds shared with other in$estors, the potential losses are

also shared with other in$estors )his risk reduction is one of the most important benefits of a

collecti$e in$estment $ehicle like the mutual fund

Con?.n#.nt Ad#n#$t"at#on>

In$esting in a Mutual 5und reduces paperwork and helps to a$oid many problems such as

bad deli$eries, delayed payments and unnecessary follow up with brokers and companies

Mutual 5unds sa$e time and make in$esting easy and con$enient

R.tu"n Pot.nt#al>

3$er a medium to long*term, Mutual 5unds ha$e the potential to pro$ide a higher return

as they in$est in a di$ersified basket of selected securities

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A//o"da8#l#t% and Lo Co$t$>

A mutual fund in$ests in a portfolio of assets, ie bonds, shares, etc depending upon thein$estment objecti$e of the scheme An in$estor can buy in to portfolio of equities, which would

otherwise be e(tremely e(pensi$e In open*ended schemes, In$estors can get their money back promptly at net asset $alue

related prices from the Mutual 5und itself ith close*ended schemes, they can sell their units on

a stock e(change at the pre$ailing market price or a$ail of the facility of direct repurchase at 0A9 related prices which some close*ended and inter$al schemes offer periodically

T"an$!a".n0%&

In$estors get regular information on the $alue of their in$estment in addition to disclosure

on the specific in$estments made by the scheme, the proportion in$ested in each class of assetsand the fund managerBs in$estment strategy and outlook )his le$el of transparency were the

in$estor him self sees the underling assets bought with his money is unmatched by any other financial instrument )hus the in$estor is in the know of the quality of portfolio and can in$est

further or redeem depending on the kind of portfolio that has been constructed by the in$estment

manager

Fl.7#8#l#t%>

)hrough features such as regular in$estment plans, regular withdrawal plans and di$idend

rein$estment plans, In$estors can systematically in$est or withdraw funds according to their needs and con$enience

C1o#0. o/ S01..$>

Mutual funds offer a tremendous $ariety of schemes )his $ariety is beneficial in two

ways, first it offers different types of schemes to with different needs and risk appetites&

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secondly, it offers an opportunity to an in$estor to in$est sums across a $ariety of schemes, bothdebt and equity 5or e(ample an in$estor can in$est his money in a growth fund 6equity scheme7

and income fund 6debt scheme7 depending on his risk appetite and thus create a balanced

portfolio easily or just buy a balanced scheme

Ta7 B.n./#t$>

In general, in$estors pay ta( on a year*to year basis So if they were to an income and

then re*in$est the income, what they would re*in$est is the amount that is a$ailable after paying

ta( Mutual fund schemes, on the other hand, do not pay a ta( on their income So the same

earning in a mutual fund scheme could facilitate a higher re*in$estment

W.ll R.3ulat.d>

All Mutual 5unds are registered with S

strict regulations designed to protect the interests of in$estors )he operations of Mutual 5undsare regularly monitored by S

LIMITATIONS TIONS OF MUTUAL FUNDS

No Cont"ol o?." 0o$t$>

An in$estor in a mutual fund has no control o$er the o$erall cost of in$esting +e paysin$estment management fees as long as he remains with the fund, albeit in return for the

professional management and research 5ees are usually payable as a percentage of the $alue of

his in$estments, whether the fund $alue is rising or declining

No Ta#lo"&ad. Po"t/ol#o$>

In$estors who in$est on their own can build their own portfolios of shares, bonds and

other securities In$esting through funds means he delegates this decision to the fund managers

)he $ery high net worth indi$iduals or large corporate in$estors may find this to be a constraintin achie$ing their objecti$es

Mana3#n3 a !o"t/ol#o o/ /und$>

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A$ailability of a large number of funds can actually mean too much choice for thein$estor +e may again need ad$ice on how to select a fund to achie$e his objecti$e, quite similar

to the situation when has to select indi$idual shares or bonds to in$est in

CHAPTER& II

PROFILE OF THE ORGANISATION

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ABOUT THE NETWORTH


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NETWORTH TEAM OF EPERTS

3wing to the $ision and e(pertise of our team of e(perts, 0etworth has

established itself as one of the premier financial ser$ices organiation in India 0etworth

professionals form the backbone of the organiation, pooling together their e(pertise from topfinancial ser$ice and broking houses

A strong team of professionalBs e(perienced and qualified pool of human resources drawnfrom top financial ser$ice : broking houses form the back bone of our sieable infrastructure

+ighly technology oriented, the companyBs scalability of operations and the highest le$el of

ser$ice standards has ensured rapid growth in the number of locations : the clients ser$iced in a

$ery short span of time

S-P 6AIN

C1a#"an Mana3#n3 D#".0to"

)he primary force behind the founding and the listing of 0etworth Stock !roking -td, SP ?ain has propelled the

company forward 5rom its $ery origins ith o$er 12

years of


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segments +e has pre$iously orked with Far$y Stock !roking -td

RA6 BHANDARI

D#".0to" and H.ad D.al#n3

Mr /aj !handari has o$er E years of 8apitalMarket e(perience at 0S!- +is e(pertise Includes

dealing and ser$icing the institutional And retail

segments

SATHYAN RA6AN

D#".0to" H.ad&$al.$

ith o$er a decade in the industry and e(perience in

$arious capacities, Mr Sathyan /ajan brings to 0S!-

insights from the length And breathe of the financial

sector +e has Pre$iously worked with Far$y Stock !roking -td, one of the largest retail networks in the

8ountry, and was responsible for establishing the

companyBs o$erseas network +is transition fromresearch to sales marked a Significant step in his career

GIRISH 4 DE4

D#".0to" COO

3$er the span of 12 years, Mr @irish %e$ has acquired

an in*depth knowledge of the8apital and 8ommodities

Market +is e(perience co$ers a wide spectrum, ranging

from Arbitrage : 8lient dealing across se$erale(changes and client categories to setting up operations,

including those of a 5oreign !rokerage and one of the

first major e*broking $entures in the country +e has ledthe entire operations of full*scale financial ser$ices

intermediaries including compliance, e*business,

distribution of non*equity products and book*building

IP3 acti$ities, and has majorily contributed inde$eloping a technology*sustained infrastructure that

supports a range of financial products : ser$ices

6- GOPAL KRISHNAN

4#0. P".$#d.nt Sout1."n R.3#on H.ad

Mr ? @opalBs 14 years of 8apital Market e(perience

is replete with the distinguished leadership roles he has played in the organiations he was in$ol$ed with At

Anush Shares : Securities P$t -td, where he ser$ed for

1' years, he was the +ead of 3perations +e has alsoheaded the finance, trading : settlement operations at

Far$y Stock !roking -td, where he worked for . years

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CHAPTER& III

• About AM5I 6Association of Mutual 5unds in India7

• /ole and concepts

• )ypes and objecti$es

• /isk associated with mutual funds

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ASSOCIATION OF MUTUAL FUNDS IN INDIA AMFI-

Association of Mutual 5unds in India 6AM5I7 is an ape( body of asset management

companies of the Mutual 5und registered in India It was incorporated on the August ''nd 1DD4

as a non*profit making organiation It is dedicated to de$eloping the Indian Mutual 5undindustry on professional, healthy : ethical lines : to enhance and maintain standards in all areas

with a $iew to protecting : promoting the interests of Mutual 5unds : their unit holders

OB6ECTI4ES>

• )o recommend : implement healthy business practices, ethical code of conduct, standard

principles : practices to be followed by the members of the company : others engaged

in the acti$ities of Mutual 5unds : Asset Management including agencies connected or in$ol$ed in the field of capital Markets : financial Ser$ices

• )o promote high standards of commercial honor : encourage : promote among

members : others the obser$ance of securities laws including regulations : directi$esissued by Securities : the best of interest of the in$esting public

• )o help in setting up professional standards for pro$iding efficient ser$ices : establishing

standard practices for Mutual 5und : Asset Management acti$ities

• )o bring about better co*ordination in the field of Mutual 5unds : Asset Management

Industry

• )o promote : de$elop sound, progressi$e : dynamic principles, practices : con$entions

in the acti$ities of Mutual 5und : Asset Management

• )o render assistance : pro$ide common ser$ices : utilities to the persons engaged in the

field of Mutual 5unds : Asset Management

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ROLE OF MUTUAL FUND

Mutual Fund$ F#nan0#al Ma"@.t>

In the process of de$elopment Indian mutual funds ha$e emerged as strong financial

intermediaries : are playing a $ery important role in bringing stability to the financial system :

efficiency to resource allocation Mutual 5unds ha$e opened new $istas to in$estors : imparteda much*needed liquidity to the system In the process they ha$e challenged the hitherto role of

commercial banks in the financial market : national economy

Mutual Fund Ca!#tal Ma"@.t>

)he acti$e in$ol$ement of Mutual 5unds in promoting economic de$elopment can be

seen not only in terms of their participation in the sa$ings market but also in their dominant

presence in the money : capital market A de$eloped financial market is critical to o$eralleconomic de$elopment, : Mutual 5unds play an acti$e role in promoting a healthy capital

market )he asset holding pattern of mutual funds in the =SA indicates the dominant role of

Mutual 5unds in the capital market : money market More o$er they ha$e also rendered critical

support to securities mortgage loans : municipal bond market in the =SA In the =SA, Mutual5unds pro$ide $ery acti$e support to the secondary market in terms of purchase of securities

In$estorBs preferences pattern in India has undergone a tremendous change during recenttimes, along with the changes in the share of financial assets in the total annual sa$ings Indian

in$estors ha$e mo$ed towards more liquid : growth oriented trade able instruments likeBssharesJdebentures : units of Mutual 5unds )he shift is asset holding pattern of in$estors has

been significantly influenced by the OequityB : OunitB culture while the holders of company shares

: debentures are concentrated in the urban areas, smallJmedium in$estors in the semi*urban :

rural areas are tending towards Mutual 5unds Mutual 5unds in India ha$e certainly createdawareness among in$estors about equity oriented in$estments : its benefits

'E


29/61

CONCEPT OF MUTUAL FUND

A Mutual 5und is a trust that pools the sa$ings of a number of in$estors who share acommon financial goal )he money thus collected is then in$ested in capital market instruments

such as shares, debentures and other securities )he income earned through these in$estmentsand the capital appreciation realised are shared by its unit holders in proportion to the number of

units owned by them )hus a Mutual 5und is the most suitable in$estment for the common man

as it offers an opportunity to in$est in a di$ersified, professionally managed basket of securitiesat a relati$ely low cost )he flow chart below describes broadly the working of a mutual fund

Mutual fund is a mechanism for pooling the resources by issuing units to the in$estorsand in$esting funds in securities in accordance with objecti$es as disclosed in offer document

In$estments in securities are spread across a wide cross*section of industries and sectorsand thus the risk is reduced %i$ersification reduces the risk because all stocks may not mo$e in

the same direction in the same proportion at the same time Mutual fund issues units to the

in$estors in accordance with quantum of money in$ested by them In$estors of mutual funds are

known as unit holders

)he profits or losses are shared by the in$estors in proportion to their in$estments )he

mutual funds normally come out with a number of schemes with different in$estment objecti$eswhich are launched from time to time A mutual fund is required to be registered with Securities

and funds from the public

'D


30/61

A mutual fund is set up in the form of a trust, which has sponsor, trustees, assetManagement 8ompany 6AM87 and custodian )he trust is established by a sponsor or more than

one sponsor who is like promoter of a company )he trustees of the mutual fund hold its property

for the benefit of the unit holders Asset Management 8ompany 6AM87 appro$ed by S

registered with S

monitor the performance and compliance of S

S

4GH of the directors of AM8 must be independent All mutual funds are required to be registered

with S

TYPES OF MUTUAL FUND SCHEMES

)here are a wide $ariety of Mutual 5und schemes that cater to in$estors need, whate$er your age, financial position, risk tolerance and return e(pectations hether as the foundation of

your in$estment program or as a supplement, Mutual 5und schemes can help you meet your

financial goals

!y Structure Schemes can be classified into . types

OPEN&ENDED SCHEMES>

)hese do not ha$e a fi(ed maturity In$estors deal directly with the Mutual 5und for their in$estments and redemptions )he key feature is liquidity )hey can con$eniently buy and sell

their units at 0et Asset 9alue 6"0A9#7 related prices

CLOSE&ENDED SCHEMES>

Schemes that ha$e a stipulated maturity period 6ranging from ' to 14 years7 are calledclose*ended schemes In$estors can in$est directly in the scheme at the time of the initial issue

and thereafter they can buy or sell the units of the scheme on the stock e(changes where they are

listed )he market price at the stock e(change could $ary from the schemeBs 0A9 on account of

demand and supply situation, unit holdersB e(pectations and other market factors 3ne of thecharacteristics of the close*ended schemes is that they are generally traded at a discount to 0A9K

but closer to maturity, the discount narrows Some close*ended schemes gi$e them an additional

option of selling their units directly to the Mutual 5und through periodic repurchase at 0A9related prices S

in$estor

INTER4AL SCHEMES>

)hese combine the features of open*ended and close* ended schemes )hey may be tradedon the stock e(change or may be open for sale or redemption during predetermined inter$als at

0A9 related prices

.G


31/61

BY IN4ESTMENT OB6ECTI4E

G"ot1Eu#t% S01..$>

Aim to pro$ide capital appreciation o$er the medium to long term )hese schemesnormally in$est a majority of their funds in equities and are willing to bear short* term decline in

$alue for possible future appreciation )hese schemes are not for in$estors seeking regular income or needing their money back in the short*term

In0o. S01..$>

Aim to pro$ide regular and steady income to in$estors )hese schemes generally in$est in

fi(ed income securities such as bonds and corporate debentures 8apital appreciation in suchschemes may be limited

Balan0.d S01..$>

Aim to pro$ide both growth and income by periodically distributing a part of the income

and capital gains they earn )hey in$est in both shares and fi(ed income securities in the

proportion indicated in their offer documents In a rising stock market, the 0A9 of these schemesmay not normally keep pace, or fall equally when the market falls

Mon.% Ma"@.t S01..$>

Aim to pro$ide easy liquidity, preser$ation of capital and moderate income )heseschemes generally in$est in safer, short*term instruments, such as treasury bills, certificates of

deposit, commercial paper and inter* bank call money /eturns on these schemes may fluctuate,

depending upon the interest rates pre$ailing in the market

Ta7 Sa?#n3 S01..$>

)hese schemes offer ta( rebates to the in$estors under ta( laws as prescribed from time to

time )his is made possible because the @o$ernment offers ta( incenti$es for in$estment inspecified a$enues 5or e(ample,


32/61

RISKS OF IN4ESTING IN MUTUAL FUNDS

R#$@>


33/61

CHAPTER&I4

• 8alculation of 0A9

• Selection of Mutual 5und company

• Selection of Mutual 5und schemes

• 8omparison of Mutual fund schemes

..


34/61

CALCULATION OF NA4

Anal%$#$ and .?aluat#on o/ t1. $01..$

)he basic tool to e$aluate the e(act worth of fund is 0et Asset 9alue 60A97 0A9 re$eals

the intrinsic worth of a fund on a continuous basis It is the market $alue of the mutual fundsunit Mutual funds are like babbles you sit ask and watch them grow Mutual funds too require

careful monitoring does your fund declare its 0et Asset 9alue and portfolio regularlyQ

1 Is it nimble*footed to spot opportunity to enter a stock and e(it at the first hit of troubleQ

' Are you subsidiing the redemption run on your fundQ

. %o you know the changes in the e(it policyQ

2 +a$e the sponsors informed you that the fund is up for salesQ

If stock markets are risks, in$esting in mutual funds is no childBs play !ut no need to panic help is just a click away

At last, you can sleep soundly !ecause you know how your money is being put to useand watch it grows just like you baby

)he term 0A9 used by mutual funds, master shares and other in$estment trust to indicate

the net tangible assets $alue of each share on a particular date It can also means the total market price of all the shares held by a mutual funds less any liabilities di$ided by total number of

outstanding shares with e$ery change in share price, the 0A9 of mutual funds shares changes

It is computed by the formulae gi$en below&

0A9RAssets * liabilities J 0o of units outstanding

More specifically it will be

0A9 R 69alue of in$estment /ecei$able Accrued incomes 3ther 8urrent Asset7 * 6-iability Accrued e(penses7 J 0o of units outstanding

.2


35/61

Simply stated, 0A9 represents the fair $alue of units in a mutual fund =sually the fundunits at the time of application are sold at public offering price 6P3P7 )he difference between

0A9 and P3P is the sales charges reco$ered by the Asset Management company from the

scheme to co$er cost of raising funds on a continuous basis )he P3P is generally calculated asfollows&

P3P R 0A9 J 1 * Sales charge

E7a!l.>

!/ fund has /s 4GGGGGG worth Assets and /s 14, GG,GGG liabilities with a share capitalof -acks di$ided into G equity shares pf /s 1G each hat is the 0A9Q

0A9 R )otal Assets * )otal -iabilities J 0o of equity shares

)otal Assets 4GGGGGG

)otal -iabilities 14GGGGG

0o of Shares 3utstanding&

R Scheme sie J 5ace $alue of shares

R , GG,GGGJ1G

R G,GGG

0A9 R 4G, GG,GGG*14, GG,GGGJG,GGG

0A9R /s 4G per share

.4


36/61

FREUENTLY USED TERMS

N.t A$$.t NA4>

0et Asset $alue is the market $alue of assets of the scheme minus its liabilities )he per unit 0A9 is the net asset $alue of the scheme di$ide by the number of units 3utstanding

$aluation date 0et assets of scheme

0A9R *****************************************

0umber of units outstanding

)he price you pay when you in$est in a scheme Also called offer price It may Include a

sale load

R.!u"01a$. P"#0.>

Is the price at which a close*ended scheme repurchases its unit and it may include a back*

end load )his is also called !id Price

R.d.!t#on P"#0.>

Is the price at which a open*ended schemes repurchases their units and closed endedschemes redeem their units on a maturity Such prices are 0A9 related

Sal.$ Load Ent"% Load>

Is a charge collected by a scheme when it sells the unitsQ Also called O5rontedB load

Schemes that do not charge a load are called O03 -oadB schemes

R.!u"01a$. 01a$. Ba0@&EndJ E7#t Load>

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

.;


37/61

SELECTION OF MUTUAL FUND COMPANY

UNIT TRUST OF INDIA UTI

ASSET MANAGEMENT COMPANY PRI4ATE LIMITED

=)I Mutual 5und is managed by =)I Asset Management 8ompany Pri$ate -imited

6

International -imited, registered in @uernsey, 8hannel Islands

=)I Mutual 5und has come into e(istence with effect from 1st 5ebruary 'GG. =)I Asset

Management 8ompany presently manages a corpus of o$er /s .24GG 8rore

=)I Mutual 5und has a track record of managing a $ariety of schemes catering to theneeds of e$ery class of citienry It has a nationwide network consisting G =)I 5inancial

8enters 6=58s7 and =)I International offices in -ondon, %ubai and !ahrain ith a $iew to

reach to common in$estors at district le$el, 2 satellite offices ha$e also been opened in selecttowns 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 )he fund managers are also ably supported with a strong in*house equity researchdepartment )o 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, =58s and registrar offices are connected on a robust I) network to ensure cost*effecti$e quick and efficient ser$ice All these ha$e e$ol$ed =)I Mutual 5und to position as adynamic, responsi$e, restructured, efficient, and transparent and S

.


38/61

BIRLA SUN LIFE

ASSET MANAGEMENT COMPANY LTD- BSLAMC5

)he in$estment managers of !irla Mutual 5und, is a joint $enture between the Aditya

!irla @roup and the Sun -ife 5inancial Ser$ices Inc of 8anada )he joint $enture bringstogether the Aditya !irla @roupsB e(perience in the Indian market and Sun -ifeBs global

e(perience

Since its inception in 1DD2, !irla Mutual 5und has emerged as one of IndiaBs leading

Mutual 5unds with o$er /s 1;,4GG crores T of assets under management and an in$estor base in

e(cess of E lakhs )he fund offers a range of in$estment options, which include di$ersified andsector specific equity schemes, fund of fund schemes, hybrid and monthly income funds, a wide

range of debt and treasury products and offshore funds

!S-AM8 is the first asset management company in India to be awarded the co$eted IS3

DGG1&'GGG certification by %09, 0etherlands !S-AM8 also pro$ides pri$ate ealth

Management ser$ices

!S-AM8 follows a long*term, fundamental research based approach to in$estment )he

approach is to identify companies, which ha$e e(cellent growth prospects and strong

fundamentals )he fundamentals include the quality of the companyBs management,sustainability of its business model and its competiti$e position, amongst other factors !irla Sun

-ife Asset Management 8ompany has one of the largest team of research analysts in the industry,

dedicated to tracking down the best companies to in$est in

!irla Sun -ife AM8 stri$es to pro$ide transparent, ethical and research*based

in$estments and wealth management ser$ices

.E


39/61

SELECTION OF SCHEMES

UTI SCHEMES

,- UTI& O!!o"tun#t#.$ Fund >

)his scheme seeks to generate capital appreciation andJor income distribution by

in$esting the funds of the scheme in equity shares and equity*related instruments

)- UTI&Bond Fund>

3pen*end 1GGH pure debt fund, which in$ests in rated corporate debt papers and

go$ernment securities with relati$ely low risk and easy liquidity

=- UTI&Balan0.d Fund>

An open*ended balance fund in$esting between 2GH to ;GH in equality related securities

and the balance in debt 6fi(ed income securities7 with a $iew to generate regular income together with capital appreciation

BSL SCHEMES

,- B#"la Ind#a O!!o"tun#t#.$ Fund >

Is an open*ended scheme that in$ests in foreign e(change earning companiesQ !I35 aims toidentify companies that seek to utilie IndiaBs low cost and high quality resources to ser$ice the

needs of global customers )he scheme, thus, allows in$estors to participate in IndiaBs emergingglobal outsourcing theme and seeks inno$ati$e ways of in$esting in only certain types of

companies and sectors that ha$e years of consistent growth ahead of them

)- B#"la Sun L#/. S1o"t T." Fund >

A scheme with an in$estment objecti$e to generate optimal returns with high liquidity

through acti$e management of the portfolio by in$esting in high quality %ebt and Money MarketInstruments

=- B#"la Balan0. >

!irla !alance strikes a balance between the growth that equity offers and the safety that debt

pro$ides, thus seeking to ma(imie returns on your in$estments at moderate le$els of risk


40/61

SCHEMES DETAILS

UTI&OPPORTUNITIES FUND>&

)ype 3f Scheme & 3pen


41/61

UTI&BOND FUND>&



42/61

UTI& BALANCED FUND>&



43/61

BIRLA INDIA OPPORTUNITIES FUND>&

)ype 3f Scheme & An 3pen ended @rowth Scheme

%ate 3f Inception & '*%ec*1DDD

Scheme 3bjecti$e & )o achie$e superior long*term growth of capital byin$esting in shares of companies that do one or more of

the following& 1 -e$erage IndiaBs intellectual capital for

pro$iding ser$ices, research and creati$e inputs ' Seek to usecurrent and impending changes in patent laws Jimport tariffs J

quotas to supply goods and ser$ices .-e$erage IndiaBs lower

labour costs for pro$iding ser$ices and manufactured goods 2-e$erage IndiaBs large population of


44/61

BIRLA DYNAMIC BOND FUND>&

)ype 3f Scheme & 3pen ended income scheme

%ate 3f Inception & 0o$ember ', 'GG2

Scheme 3bjecti$e & )he objecti$e of the scheme is to generate optimal

/eturns with high liquidity through acti$e managementof the portfolio by in$esting in +igh Luality %ebt and

Money Market Instruments

Asset Allocation & G *1GGH in @o$ernment Securities, 8orporate !onds, 8ashJliquid

instruments including money market instruments : short term debt

papers upto a maturity of 1 >ear

Minsub amt & /s4,GGGJ* and in multiples of /e 1J* thereafter

Min addl in$est & /s1,GGGJ* and in multiples of /e 1J* thereafter


45/61

BIRLA BALANCE>&

)ype 3f Scheme & An 3pen ended !alanced Scheme

%ate 3f Inception & 1'*3ct*1DDD

Scheme 3bjecti$e & )o balance income requirement with growth of capital

through balance mi( of in$estment in equity and debt at

relati$ely moderate le$els of risk through a di$ersifiedresearch based in$estment approach

Asset Allocation & 4G * 4H in equity and equity related instrument'4 * 4GH in debt and money market instruments

Min sub amt & /s4,GGGJ* and in multiples of /e 1J* thereafter

Min addl in$est & /s1,GGGJ* and in multiples of /e 1J* thereafter


46/61

COMPARISON OF MUTUAL FUND SCHEMES

METHODS OF E4ALUATION OF MUTUAL FUND SCHEMES>

)he following methods are used to identify the performance of the portfolio

1 Sharpe model

' )reynorBs model

. ?ensenBs Inde( model

,- SHARPE MODEL>

It depends on total risk rate of the portfolio/eturn of the security compared with risk free

rate of return and the e(cess return of security is treated as premium or reweard to the

in$estor)he risk of the premium is calculated by comparing portfolio risk rate If there is no premium Sharpe inde( shows negati$e $alue6*7In such a case the portfolio is not treated as

efficient portfolio

SharpeBs ratio6Sp7 R rp * rf J Wp

here,

Sp R Sharpe measure

rp R /eturn of the portfolio

rf R risk free rate of return

Wp R Portfolio standard de$iation

)he major ad$antage this method is that it uses the $olatility of the portfolio return

instead of measuring the $olatility against a benchmark 6ie, inde(7 )his method is also called

"/eward to 9ariability "method Portfolio with higher SharpeBs measure is preferred

2;


47/61

)- TREYNORJS MODEL >

It is another method to measure the portfolio performance, where systematic risk is usedinstead of total risk It is also called "/eward to $olatility#

)reynor ratio 6)p7 R rp * rf J Xp

here,

)p R )reynorBs portfolio performance model


rf R /isk free rate of return

Xp R Portfolio beta

+igher the $alue of the )reynorBs measure, the better is the portfolio performance

=- 6ENSENJS INDE MODEL&

?ensenBs measure is an absolute measure of performance, adjusted for risk It assesses the

portfolio managerBs predicti$e ability )he objecti$e is to calculate the return that should be

e(pected for the fund at a gi$en le$el of risk using 8APM model and comparing it with theactual return realied o$er the period

?ensen /atio 6?p7 R rp Y rp Xp 6rm rf7 Z

here,

?p R ?ensenBs inde( performance model


rf R /isk free rate of return

Xp R Portfolio beta

rm R return on market

Positi$e ?ensenBs measure indicates that superior performance of the fund is due tosuperior predicti$e ability of the fund manager

0egati$e ?ensenBs measure indicates that poor performance of the fund is due to poor

predicti$e ability of the fund manager

)he higher the ratio, the better the performance

2


48/61

UTI OPPORTUNITES FUND

months Uti(nav) BSe200 UTT (X) X X2 BSE (Y) Y Y2 XY

may 15.71 1467.84

jne 12.82 1247.!2 "18.4 16.64818 277.162 "14.!8 15.#6 2#5.!2!6 255.7161 j$y 12.45 1278.05 "2.8! 1.1#8182 1.2!5458 2.41 "2.04 4.1616 "2.#218!

a%st 12.25 127#.!! "1.61 "0.14182 0.020112 "0.#2 0.6! 0.4761 "0.0!785

se&tem'e 1#.#2 1411.2 8.7# "10.4818 10!.8685 10.77"

10.#! 107.!521 108.!061

oto'e 14.04 148!.46 5.41 "7.16182 51.2!164 5.55 "5.17 26.728! #7.0266

novem'e 14.14 158!.88 0.71 "2.46182 6.06054! 6.74 "6.#7 40.576! 15.68178

*eem'e 14.2 1655.52 0.42 "2.17182 4.7167!4 4.1# "#.75 14.0625 8.144#18

janay 14.05 166!.5! "1.06 "0.6!182 0.478612 0.85 "0.47 0.220! 0.#25155

+e'ay 14.48 1711.74 #.06 "4.81182 2#.15#5! 2.52 "2.15 4.6225 10.#4541

mah 1#.28 1564.4! "8.2! 6.5#8182 42.74782 "8.6 8.!7 80.460! 58.6474!

a&ai$ 12.57 1487.1# "5.#5 #.5!8182 12.!46!1 "4.!4 5.#2 28.#024 1!.142##

Tota$ 16#.#1 17846.81 "1!.27 0 52!.742 4.1# 0 54#.4!44 511.5155

,vea%e"

1.75182 48.158#6 0.#75455 4!.40858

'eta 0.!67

- 0.08

S/ 6.!# 7.0#

2E

0

200

400

600

800

1000

1200

1400

1600

1800

1 2 # 4 5 6 7 8 ! 10 11 12 1#

Uti(nav)

BSe200


49/61

0

200

400

600

800

10001200

1400

1600

1800

1 2 # 4 5 6 7 8 ! 10 11 12

BS (av)

BSE200

BIRLA INDIA OPPORTUNITES FUND

onths BS (av) BSE200 BS(X) X X3BSE(Y) Y Y3 XY

ay 48.#5 1467.84

ne 41.05 1247.!2 "15.1 15.#5818 2#5.87#7 "14.!8 15.#6 2#5.!2!6 2#5.!017$y #!.62 1278.05 "#.48 #.7#8182 1#.!74 2.41 "2.04 4.1616 "7.6258!

,%st 40 127#.!! 0.!6 "0.70182 0.4!254! "0.#2 0.6! 0.4761 "0.48425

Se&tem'e 4#.81 1411.2 !.5# "!.27182 85.!6661 10.77"

10.#! 107.!521 !6.##41!

to'e 45.28 148!.46 #.#6 "#.10182 !.621276 5.55 "5.17 26.728! 16.0#64

ovem'e 4!.1! 158!.88 8.64 "8.#8182 70.25488 6.74 "6.#7 40.576! 5#.#!218

/eem'e 51.46 1655.52 4.61 "4.#5182 18.!#8#2 4.1# "#.75 14.0625 16.#1!#2

anay 5#.2 166!.5! #.#8 "#.12182 !.74574! 0.85 "0.47 0.220! 1.467255

e'ay 54.54 1711.74 2.52 "2.26182 5.115821 2.52 "2.15 4.6225 4.862!0!

ah 51.47 1564.4! "5.6# 5.888182 #4.6706! "8.6 8.!7 80.460! 52.816!!

,&i$ 48.41 1487.1# "5.!5 6.208182 #8.54152 "4.!4 5.#2 28.#024 ##.0275#

Tota$ 566.#8 17846.81 2.84 0 52#.1!52 4.1# 0 54#.4!44 502.048#

,vea%e 0.258182 4!.40858

Beta 0.0!6

- 0.08

S/ 6.8! 7.0#

2D


50/61

UTI BALANCE FUND

T BS (,) BSE 200BS(X) X X3 BSE (Y) Y Y3 XY

,Y 5#.!2 1467.84

UE 47.1 1247.!2 "12.62 12.#1 151.5#61 "14.!8 15.#6 2#5.!2!6 18!.0816

UY 47.05 1278.05 0.7 "0.2# 0.052! 2.41 "2.04 4.1616 0.46!2

,U9UST 47.06 127#.!! 0.78 "0.#6 0.12!6 "0.#2 0.6! 0.4761 "0.2484

SE:TEBE- 50.4! 1411.2 6.!! "7.6# 58.216! 10.77"

10.#! 107.!521 7!.2757

;TBE- 5#.14 148!.46 5.4 "5.5! #1.2481 5.55 "5.17 26.728! 28.!00#

EBE- 55.25 158!.88 5.16 "4.#! 1!.2721 6.74 "6.#7 40.576! 27.!64#

/E;EBE- 55.!2 1655.52 2.62 "1.55 2.4025 4.1# "#.75 14.0625 5.8125

,U,-Y 56.28 166!.5! 0.04 "0.!8 0.!604 0.85 "0.47 0.220! 0.4606

EB-U,-Y 56.64 1711.74 0.5# "0.!8 0.!604 2.52 "2.15 4.6225 2.107

,-; 52.18 1564.4! "4.16 7.54 56.8516 "8.6 8.!8 80.6404 67.70!2

,:- 51.07 1487.1# "1.!! 1.7! #.2041 "4.!4 5.#1 28.1!61 !.504!

TT, 626.1 17846.81 #.45 0 #24.8#47 4.1# 0 54#.5676 411.0#6!

,E-,9E

BET, 0.754

- 0.08

S/ 5.4# 7.0#

4G

0

200

400

600

800

1000

12001400

1600

1800

1 2 # 4 5 6 7 8 ! 10 11 12 1# 14 15

BS (,)

BSE 200


51/61

BIRLA BALANCE FUND

T BS (,) BSE 200 BS

(X) X X3 BSE (Y) Y Y3 XY

,Y 26.14 1467.84

UE 22.84 1247.!2 "12.62 12.!4 167.44#6 "14.!8 15.#6 2#5.!2!6 1!8.7584UY 2# 1278.05 0.7 "0.#! 0.1521 2.41 "2.04 4.1616 0.7!56

,U9UST 2#.18 127#.!! 0.78 "0.47 0.220! "0.#2 0.6! 0.4761 "0.#24#

SE:TEBE- 24.8 1411.2 6.!! "6.67 44.488! 10.77"

10.#! 107.!521 6!.#01#

;TBE- 26.14 148!.46 5.4 "5.0! 25.!081 5.55 "5.17 26.728! 26.#15#

EBE- 27.4! 158!.88 5.16 "4.85 2#.5225 6.74 "6.#7 40.576! #0.8!45

/E;EBE- 28.21 1655.52 2.62 "2.# 5.2! 4.1# "#.75 14.0625 8.625

,U,-Y 28.22 166!.5! 0.04 0.28 0.0784 0.85 "0.47 0.220! "0.1#16

EB-U,-Y 28.#7 1711.74 0.5# "0.22 0.0484 2.52 "2.15 4.6225 0.47#

,-; 27.1! 1564.4! "4.16 4.47 1!.!80! "8.6 8.!8 80.6404 40.1406

,:- 26.65 1487.1# "1.!! 2.# 5.2! "4.!4 5.#1 28.1!61 12.21#

TT, #12.2# 17846.81 #.45 0 2!2.42#8 4.1# 0 54#.5676 #87.0608

,E-,9E

BET, 0.712

- 0.08

S/ 5.16 7.0#

41

0

200

400

600

800

1000

1200

1400

1600

1800

1 2 # 4 5 6 7 8 ! 10 11 12 1# 14

BS (,)

BSE 200


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UTI BOND FUND

TS UT (,) #64 T B UT (X) X X3 #64 (Y) Y Y3 XY

,Y 15.71 5.74UE 12.82 5.74 0.2! 0.08 0.0064 0 1.!8 #.!204 0.1584

UY 12.45 5.74 0.1 0.27 0.072! 0 1.!8 #.!204 0.5#46

,U9UST 12.25 5.74 0.#8 "0.01 0.0001 0 1.!8 #.!204 "0.01!8

SE:TEBE- 1#.#2 5.74 0.81 "0.44 0.1!#6 0 1.!8 #.!204 "0.8712

;TBE- 14.04 5.74 0.8 "0.44 0.1!#6 0 1.!8 #.!204 "0.8712

EBE- 14.14 5.74 0.56 "0.1! 0.0#61 0 1.!8 #.!204 "0.#762

/E;EBE- 14.2 6.!! 0.7 "0.## 0.108! 21.78"

1!.8 #!2.04 6.5#4

,U,-Y 14.05 6.!! "0.05 "0.42 0.1764 0 1.!8 #.!204 "0.8#16

EB-U,-Y 14.48 6.!! 0.28 0.0! 0.0081 0 1.!8 #.!204 0.1782

,-; 1#.28 6.!! "0.28 0.65 0.4225 0 1.!8 #.!204 1.287

,:- 12.57 6.!! 0.46 "0.0! 0.0081 0 1.!8 #.!204 "0.1782

TT, 16#.#1 75.1# 4.05 1.2267 21.78 4#1.244 5.544

,E-,9E 0.#68181818 0.111518 1.!8 #!.204

BET, 0.016

- 0.05

S/ 0.## 6.26

4'

0

2

4

6

8

10

12

14

16

18

1 2 # 4 5 6 7 8 ! 10 11 12 1# 14

UT (,)

#64 T B


53/61

BIRLA DYANMIC BOND FUND

T BS

(,)#64T.B

BS (X) X X3 #64 (Y) Y Y3 XY

,Y 10.81 5.74UE 10.85 5.74 0.#7 0.15 0.0225 0 1.!8 #.!204 0.2!7

UY 10.!1 5.74 0.55 "0.0# 0.000! 0 1.!8 #.!204 "0.05!4

,U9UST 10.!7 5.74 0.55 "0.0# 0.000! 0 1.!8 #.!204 "0.05!4

SE:TEBE- 11.0# 5.74 0.55 "0.02 0.0004 0 1.!8 #.!204 "0.0#!6

;TBE- 11.12 5.74 0.82 "0.2! 0.0841 0 1.!8 #.!204 "0.5742

EBE- 11.1! 5.74 0.6# "0.1 0.01 0 1.!8 #.!204 "0.1!8

/E;EBE- 11.28 6.!! 0.8 "0.28 0.0784 21.78 "1!.8 #!2.04 5.544

,U,-Y 11.#1 6.!! 0.27 0.26 0.0676 0 1.!8 #.!204 0.5148

EB-U,-Y 11.#5 6.!! 0.#5 0.17 0.028! 0 1.!8 #.!204 0.##66

,-; 11.#5 6.!! 0 0.52 0.2704 0 1.!8 #.!204 1.02!6

,:- 11.45 6.!! 0.88 "0.#5 0.1225 0 1.!8 #.!204 "0.6!#

TT, 1##.62 75.1# 5.77 0 0.6866 21.78 0 4#1.244 6.0!84

,E-,9E 0.52 0.06 1.!8 #!.1!

BET, 0.014

- 0.05

S/ 0.24 6.26

4.

0

2

4

6

8

10

12

14

1 2 # 4 5 6 7 8 ! 10 11 12 1# 14

BS (,)

#64 T.B


54/61

CALCULATIONS OF EUITY FUNDS

METHODSUTI BIRLA

CALCULATION RESULT CALCULATION RESULT

SHARPE 6*14*GGE7;D. *G';2 6G';*GGE;ED G'2E

TREYNOR 6*14*GGE7

GD;*1E..

6G'; *GGE7

GGD; G4.

6ENSEN*14 * Y*14

GD; 6G.E*GGE7Z1DE2

G';*YG'DGGD;

6G.E*GGE7Z*G122

INTERPRETATION>

!irla India 3pportunities 5und is better compared to =)I

3pportunities 5und while considering a$erages of these funds

42


55/61

CALCULATIONS OF BALANCE FUNDS

METHODSUTI BIRLA


SHARPE 6*G.2*GGE742. *GG 6G.1*GGE741; GG22

TREYNOR 6*G.2*GGE7

G42*G44

6G.1*GGE7

G1'G.'.

6ENSEN*G.2*YG.2G42

6G.E*GGE7ZG;;E

G.1*YG.1G1'

6G.E*GGE7ZG'12

INTERPRETATION>

!irla in balance fund is good compared to =)I !alance fund while

considering a$erages of these funds

44


56/61

CALCULATIONS OF DEBT FUNDS

METHODSUTI BIRLA


SHARPE 6*G.*GG47G.. GD;D 6G4'*GG47G'2 1D4E

TREYNOR 6*G.*GG47

GG1;'G

6G4'*GG47

GG12..4

6ENSEN*G.*YG.GG1;

61DE*GG47ZG.4

G4'*YG4'GG12

61DE*GG47ZGG'

INTERPRETATION>

!irla %ynamic !ond 5und is good compared to =)I !ond 5und while

considering a$erages of these funds

4;

<

<

<

<

<

<

<

n


57/61

RECOMMENDATONS AND SUGESSTIONS TO IN4ESTORS>

• Make clearly defined goals 6should be in practical and simple manner7

• Prioritie the goals 6classify the goals which are immediate and which are for a later date7

• 5ind out the cost to attain the goals

• Prepare the cash statements 6if you ha$e an idea of what are cash out flows and cash

inflows7

•


58/61

Su33.$t#on$ to utual /und #n?.$to"$>

)hese are the few e(act as regards in$estment in M5Bs taken from the book with

"marketing for the DGBs gi$en by the wall street#

• 8heck your letter of offer funds prospectus to guard yoursel$es against any hidden fees

• • 8heck funds performance in bear as well as bull market

• @uard fund risk by checking its portfolio for di$ersification $olatility

4E


59/61

CONCLUSION

It can be concluded that the mutual fund are better in$estment option In$esting in

portfolio of mutual funds can minimie the risk )he market is growing day by day and websites

pro$ide the in$estors with much information In$esting has easier with the introduction of

technology )hrough the public is interested in better in$estment in mutual funds )his has to be

o$ercome

It can also say that it is suitable to people from all backgrounds and all age groups

)his project is helpful for both in$estors and the importance of in$esting in mutual funds

as this gi$es awareness about the mutual fond companies

4D


60/61

;G


61/61

BIBLIOGRAPHY

W.8$#t.$>

• wwwamfiindiacom

• wwwmoneyporecom

• wwwmoneycontrolcom

• wwwmyiriscom

• wwwindiainfolinecom

• wwwutimfcom

• wwwbirlasunlifecom

• wwwin$estor guidecom

Boo@$>• Security Analysis And Portfolio Management

[ 5isher : ?ordan
http://www.amfiindia.com/http://www.moneypore.com/http://www.moneycontrol.com/http://www.myiris.com/http://www.indiainfoline.com/http://www.utimf.com/http://www.birlasunlife.com/http://www.investor/http://www.moneypore.com/http://www.moneycontrol.com/http://www.myiris.com/http://www.indiainfoline.com/http://www.utimf.com/http://www.birlasunlife.com/http://www.investor/http://www.amfiindia.com/

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Mutual Fund Comparision Analysis

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