ABSTRACT
A Mutual Fund is a trust that pools the savings of a number of
investors who share a common financial goal. The money thus
collected is invested by the fund manager in different types of
securities depending upon the objective of the scheme. These could
range from shares to debentures to money market instruments. The
income earned through these investments and the capital
appreciations realized by the scheme are shared by its unit holders
in proportion to the number of units owned by them (pro rata). Thus
a Mutual Fund is the most suitable investment for the common man as
it offers an opportunity to invest in a diversified, professionally
managed portfolio at a relatively low cost. Anybody with an
investible surplus of as little as a few thousand rupees can invest
in Mutual Funds. Each Mutual Fund scheme has a defined investment
objective and strategy.
Mutual Funds now represent perhaps most appropriate investment
opportunity for most investors. As financial markets become more
sophisticated and complex, investors need a financial intermediary
who provides the required knowledge and professional expertise on
successful investing. As the investor always try to maximize the
returns and minimize the risk. Mutual fund satisfies these
requirements by providing attractive returns with affordable
risks.
The basic purpose of the study is to give broad idea on Mutual
Funds and analyze various schemes to highlight the diversified
investment that Mutual Fund offers to its investors. Through this
study one can understand how to invest in Mutual Funds and turn the
raw investment into ripen fruits by taking wise decisions, taking
the risk factors into account.
The Study covers the basic meaning, concept, structure and the
organization of the Mutual Funds. The Study is restricted to
explain only the returns provided by the Mutual Funds from various
schemesINDEXS.No:
CONTENTS
PAGE NO.
1. INTRODUCTION
1-7 Objectives of the Study
Need of the Study
Scope of the Study
Methodology of the Study Limitation of the Study2. Review of
Literature
8-453. COMPANY PROFILE
46-564. DATA ANALYSIS AND
INTERPRETATION
57-705. FINDINGS& SUGGESTION
71-736. CONCLUSION
74-757. BIBLIOGRAPHY
76CHAPTER I
INTRODUCTION INTRODUCTION TO MUTUAL FUNDMutual fund is a
mechanism for pooling the resources by issuing units to the
investors and investing funds in securities in accordance with
objectives as disclosed in offer document.
Investments in securities are spread across a wide cross-section
of industries and sectors and thus the risk is reduced.
Diversification reduces the risk because all stocks may not move in
the same direction in the same proportion at the same time. Mutual
fund issues units to the investors in accordance with quantum of
money invested by them. Investors of mutual funds are known as unit
holders.
The profits or losses are shared by the investors in proportion
to their investments. The mutual funds normally come out with a
number of schemes with different investment objectives which are
launched from time to time. A mutual fund is required to be
registered with Securities and Exchange Board of India (SEBI) which
regulates securities markets before it can collect funds from the
public.
A mutual fund is set up in the form of a trust, which has
sponsor, trustees, asset Management Company (AMC) and custodian.
The trust is established by a sponsor or more than one sponsor who
is like promoter of a company. The trustees of the mutual fund hold
its property for the benefit of the unit holders. Asset Management
Company (AMC) approved by SEBI manages the funds by making
investments in various types of securities. Custodian, who is
registered with SEBI, holds the securities of various schemes of
the fund in its custody. The trustees are vested with the general
power of superintendence and direction over AMC. They monitor the
performance and compliance of SEBI Regulations by the mutual
fund.
OBJECTIVES
MAIN OBJECTIVE:
A study on comparative analysis of mutual funds in Kotak Mutual
Fund schemes, are effecting on the financial performance of the
company.
ANCILLARY OBJECTIVES:
To know the different mutual fund schemes in KOTAK mutual
Fund.
To know the concept of Mutual funds.
To know how the KOTAK Mutual funds are participating in the
stock market.
To know how the KOTAK Mutual funds are effecting on the overall
performance of the KOTAK Company
To know the final conclusions on mutual funds.NEED OF THE
STUDYThe primary objective of doing this project is to know about
mutual funds and its functioning with special reference to SBI
Mutual Funds. This project helps us to know in detail about mutual
fund industry right from its inception stage, growth and future
prospects. It also helps in understanding different schemes of
mutual funds. The study is focused on SBI mutual funds and their
schemes like equity, income, balance as well as the returns
associated with those schemes.
The project study tries to ascertain the asset allocation, entry
load, exit load, associated with the mutual funds. Ultimately this
would help in understanding the benefits of mutual funds to
investors.SCOPE OF THE STUDY:The study is limited to the analysis
made on two major types of schemes offered by six banks. Each
scheme is calculated in term of their risk and return using
different performance measurement theories. The reasons for such
performance in immediately analyzed in the commentary. Column
charts are used to reflect the portfolio risk and
return.METHODOLOGY:Meaning of research: The method and technique
that are used for conducting the research. Research methodology is
a systemic way of solving research problem this methodology
includes all the stages of research such as research process,
research design, sampling design, data collection, data analysis,
data interpretation and data presentation.
Research Process: - This is the process of conducting entire
research in such away to solve the research problem. It includes
identification of problem conducting the research and
interpretation of the data and reporting.
To test the Different Mutual fund Schemes and its effect on the
Business with reference to the KOTAK Mutual Funds.
Research design: - It indicates a design of research problem and
research process
1. Information collected from the Questionnaire to the KOTAK
Mutual Fund Hyderabad branch.2. I collect all the Financial
Statements from the KOTAK Mutual fund websites.Data collection:-The
objective of the present study can be accomplished by conducting a
systematic research to know the effect of KOTAK Mutual Fund Schemes
on the Business.
1. Primary data The information presented in the report is
primary data, i.e. the data Collected from the KOTAK MONEY through
the Questionnaire.
2. Secondary data Secondary data is taken from
Website
KOTAK Journals
Security Analysis (sem-3)
Brocuhers Tools for data analysis:- To analyse the information
(or) data collected form Branch Manager and various financial
Statements the following tools are used:
1. Percentages
2. Averages
3. Range
4. Graphs
5. Bar ChartLIMITATIONS Mostly the data is related to the
secondary data.
To collect the primary data from the company is difficult task
and it is a confidential matter to the company.
The product is restricted to only mutual funds.
The data is only limited to financial performance of the mutual
funds.
The collected primary data is only from the one branch head of
Hyderabad.
The comparison for the financial performance of the company is
taken only for 3 years.
CHAPTER-II
LITERATURE REVIEWDEFINITION:Mutual fund is the pool up savings
of small investors to raise funds called mutual funds. Mutual funds
are invested in diversified portfolio to spread risk. While it
opens an investment channel to small investors, it reduces risks,
improves liquidity and results in stable returns and better capital
appreciation in the long run.
CONCEPT
A Mutual Fund is a trust that pools the savings of a number of
investors who share a common financial goal. The money thus
collected is then invested in capital market instruments such as
shares, debentures and other securities. The income earned through
these investments and the capital appreciation realized are shared
by its unit holders in proportion to the number of units owned by
them. Thus a Mutual Fund is the most suitable investment for the
common man as it offers an opportunity to invest in a diversified,
professionally managed basket of securities at a relatively low
cost. The flow chart below describes broadly the working of a
mutual fund:
Mutual fund in India
Unit Trust of India was the first mutual fund set up in India in
the year 1963. In early 1990s, Government allowed public sector
banks and institutions to set up mutual funds.
In the year 1992, Securities and exchange Board of India (SEBI)
Act was passed. The objectives of SEBI are to protect the interest
of investors in securities and to promote the development of and to
regulate the securities market.
As far as mutual funds are concerned, SEBI formulates policies
and regulates the mutual funds to protect the interest of the
investors. SEBI notified regulations for the mutual funds in 1993.
Thereafter, mutual funds sponsored by private sector entities were
allowed to enter the capital market. The regulations were fully
revised in 1996 and have been amended thereafter from time to time.
SEBI has also issued guidelines to the mutual funds from time to
time to protect the interests of investors.
All mutual funds whether promoted by public sector or private
sector entities including those promoted by foreign entities are
governed by the same set of Regulations. There is no distinction in
regulatory requirements for these mutual funds and all are subject
to monitoring and inspections by SEBI. The risks associated with
the schemes launched by the mutual funds sponsored by these
entities are of similar type
You can make money from a mutual fund in three ways:1) Income is
earned from dividends on stocks and interest on bonds.
2) If the fund sells securities that have increased in price,
the fund has a capital gain.
3) If fund holdings increase in price but are not sold by the
fund manager, the fund's shares increase in price. You can then
sell your mutual fund shares for a profitAdvantages of Mutual
Funds:
Professional Management - The primary advantage of funds is the
professional management of your money. Investors purchase funds
because they do not have the time or the expertise to manage their
own portfolios. A mutual fund is a relatively inexpensive way for a
small investor to get a full-time manager to make and monitor
investments.
Diversification - By owning shares in a mutual fund instead of
owning individual stocks or bonds, your risk is spread out. The
idea behind diversification is to invest in a large number of
assets so that a loss in any particular investment is minimized by
gains in others.
Economies of Scale - Because a mutual fund buys and sells large
amounts of securities at a time, its transaction costs are lower
than what an individual would pay for securities transactions.
Liquidity - Just like an individual stock, a mutual fund allows
you to request that your shares be converted into cash at any
time.
Simplicity Minimum investment is small.
Disadvantages:
Dilution - It's possible to have too much diversification.
Because funds have small holdings in so many different companies,
high returns from a few investments often don't make much
difference on the overall return. Taxes - When making decisions
about your money, fund managers don't consider your personal tax
situation. MUTUAL FUNDMutual fund is a trust that pools money from
a group of investors (sharing common financial goals) and invest
the money thus collected into asset classes that match the stated
investment objectives of the scheme. Since the stated investment
objective of a mutual fund scheme generally forms the basis for an
investor's decision to contribute money to the pool, a mutual fund
can not deviate from its stated objectives at any point of
time.
Every Mutual Fund is managed by a fund manager, who using his
investment management skills and necessary research works ensures
much better return than what an investor can manage on his own. The
capital appreciation and other incomes earned from these
investments are passed on to the investors (also known as unit
holders) in proportion of the number of units they own.
When an investor subscribes for the units of a mutual fund, he
becomes part owner of the assets of the fund in the same proportion
as his contribution amount put up with the corpus (the total amount
of the fund). Mutual Fund investor is also known as a mutual fund
shareholder or a unit holder.
Any change in the value of the investments made into capital
market instruments (such as shares, debentures etc) is reflected in
the Net Asset Value (NAV) of the scheme. NAV is defined as the
market value of the Mutual Fund scheme's assets net of its
liabilities. NAV of a scheme is calculated by dividing the market
value of scheme's assets by the total number of units issued to the
investors.
For example:
A. If the market value of the assets of a fund is Rs.
100,000
B. The total number of units issued to the investors is equal to
10,000.
C. Then the NAV of this scheme = (A)/(B), i.e. 100,000/10,000 or
10.00
D. Now if an investor 'X' owns 5 units of this scheme
E. Then his total contribution to the fund is Rs. 50 (i.e.
Number of units held multiplied by the NAV of the scheme)ADVANTAGES
OF MUTUAL FUND
1. Portfolio Diversification Mutual Funds invest in a
well-diversified portfolio of securities which enables investor to
hold a diversified investment portfolio (whether the amount of
investment is big or small).2. Professional Management Fund manager
undergoes through various research works and has better investment
management skills which ensure higher returns to the investor than
what he can manage on his own.3. Less RiskInvestors acquire a
diversified portfolio of securities even with a small investment in
a Mutual Fund. The risk in a diversified portfolio is lesser than
investing in merely 2 or 3 securities.4. Low Transaction Costs Due
to the economies of scale (benefits of larger volumes), mutual
funds pay lesser transaction costs. These benefits are passed on to
the investors.5. Liquidity An investor may not be able to sell some
of the shares held by him very easily and quickly, whereas units of
a mutual fund are far more liquid.6. Choice of Schemes Mutual funds
provide investors with various schemes with different investment
objectives. Investors have the option of investing in a scheme
having a correlation between its investment objectives and their
own financial goals. These schemes further have different
plans/optionsDISADVANTAGES OF MUTUAL FUND1.Costs Control Not in the
Hands of an Investor Investor has to pay investment management fees
and fund distribution costs as a percentage of the value of his
investments (as long as he holds the units), irrespective of the
performance of the fund.
2. No Customized Portfolios The portfolio of securities in which
a fund invests is a decision taken by the fund manager. Investors
have no right to interfere in the decision making process of a fund
manager, which some investors find as a constraint in achieving
their financial objectives.
3. Difficulty in Selecting a Suitable Fund Scheme Many investors
find it difficult to select one option from the plethora of
funds/schemes/plans available. For this, they may have to take
advice from financial planners in order to invest in the right fund
to achieve their objectives.
TYPES OF MUTUAL FUNDSGeneral Classification of Mutual
FundsOpen-end Funds / Closed-end FundsOpen-end FundsFunds that can
sell and purchase units at any point in time are classified as
Open-end Funds. The fund size (corpus) of an open-end fund is
variable (keeps changing) because of continuous selling (to
investors) and repurchases (from the investors) by the fund. An
open-end fund is not required to keep selling new units to the
investors at all times but is required to always repurchase, when
an investor wants to sell his units. The NAV of an open-end fund is
calculated every day.
Closed-end Funds
Funds that can sell a fixed number of units only during the New
Fund Offer (NFO) period are known as Closed-end Funds. The corpus
of a Closed-end Fund remains unchanged at all times. After the
closure of the offer, buying and redemption of units by the
investors directly from the Funds is not allowed. However, to
protect the interests of the investors, SEBI provides investors
with two avenues to liquidate their positions:1. Closed-end Funds
are listed on the stock exchanges where investors can buy/sell
units from/to each other. The trading is generally done at a
discount to the NAV of the scheme. The NAV of a closed-end fund is
computed on a weekly basis (updated every Thursday).
2. Closed-end Funds may also offer "buy-back of units" to the
unit holders. In this case, the corpus of the Fund and its
outstanding units do get changed.Load Funds/no-load funds
0Load Funds
Mutual Funds incur various expenses on marketing, distribution,
advertising, portfolio churning, fund managers salary etc. Many
funds recover these expenses from the investors in the form of
load. These funds are known as Load Funds. A load fund may impose
following types of loads on the investors: Entry Load Also known as
Front-end load, it refers to the load charged to an investor at the
time of his entry into a scheme. Entry load is deducted from the
investors contribution amount to the fund.
Exit Load Also known as Back-end load, these charges are imposed
on an investor when he redeems his units (exits from the scheme).
Exit load is deducted from the redemption proceeds to an outgoing
investor.
Deferred Load Deferred load is charged to the scheme over a
period of time.
Contingent Deferred Sales Charge (CDSS) In some schemes, the
percentage of exit load reduces as the investor stays longer with
the fund. This type of load is known as Contingent Deferred Sales
Charge.
No-load Funds
All those funds that do not charge any of the above mentioned
loads are known as No-load Funds.
Tax-exempt Funds/ Non-Tax-exempt FundsTax-exempt Funds
Funds that invest in securities free from tax are known as
Tax-exempt Funds. All open-end equity oriented funds are exempt
from distribution tax (tax for distributing income to investors).
Long term capital gains and dividend income in the hands of
investors are tax-free.
Non-Tax-exempt Funds
Funds that invest in taxable securities are known as
Non-Tax-exempt Funds. In India, all funds, except open-end equity
oriented funds are liable to pay tax on distribution income.
Profits arising out of sale of units by an investor within 12
months of purchase are categorized as short-term capital gains,
which are taxable. Sale of units of an equity oriented fund is
subject to Securities Transaction Tax (STT). STT is deducted from
the redemption proceeds to an investor
BROAD MUTUAL FUND TYPES
1. Equity Funds
Equity funds are considered to be the more risky funds as
compared to other fund types, but they also provide higher returns
than other funds. It is advisable that an investor looking to
invest in an equity fund should invest for long term i.e. for 3
years or more. There are different types of equity funds each
falling into different risk bracket. In the order of decreasing
risk level, there are following types of equity funds:
Aggressive Growth Funds - In Aggressive Growth Funds, fund
managers aspire for maximum capital appreciation and invest in less
researched shares of speculative nature. Because of these
speculative investments Aggressive Growth Funds become more
volatile and thus, are prone to higher risk than other equity
funds.
a. Growth Funds - Growth Funds also invest for capital
appreciation (with time horizon of 3 to 5 years) but they are
different from Aggressive Growth Funds in the sense that they
invest in companies that are expected to outperform the market in
the future. Without entirely adopting speculative strategies,
Growth Funds invest in those companies that are expected to post
above average earnings in the future. b. Specialty Funds -
Specialty Funds have stated criteria for investments and their
portfolio comprises of only those companies that meet their
criteria. Criteria for some specialty funds could be to invest/not
to invest in particular regions/companies. Speciality funds are
concentrated and thus, are comparatively riskier than diversified
funds. There are following types of specialty funds:
1. Sector Funds: Equity funds that invest in a particular
sector/industry of the market are known as Sector Funds. The
exposure of these funds is limited to a particular sector (say
Information Technology, Auto, Banking, Pharmaceuticals or Fast
Moving Consumer Goods) which is why they are more risky than equity
funds that invest in multiple sectors.
2. Foreign Securities Funds: Foreign Securities Equity Funds
have the option to invest in one or more foreign companies. Foreign
securities funds achieve international diversification and hence
they are less risky than sector funds. However, foreign securities
funds are exposed to foreign exchange rate risk and country
risk.
3. Mid-Cap or Small-Cap Funds: Funds that invest in companies
having lower market capitalization than large capitalization
companies are called Mid-Cap or Small-Cap Funds. Market
capitalization of Mid-Cap companies is less than that of big, blue
chip companies (less than Rs. 2500 crores but more than Rs. 500
crores) and Small-Cap companies have market capitalization of less
than Rs. 500 crores. Market Capitalization of a company can be
calculated by multiplying the market price of the company's share
by the total number of its outstanding shares in the market. The
shares of Mid-Cap or Small-Cap Companies are not as liquid as of
Large-Cap Companies which gives rise to volatility in share prices
of these companies and consequently, investment gets risky.
4. Diversified Equity Funds - Except for a small portion of
investment in liquid money market, diversified equity funds invest
mainly in equities without any concentration on a particular
sector(s). These funds are well diversified and reduce
sector-specific or company-specific risk. However, like all other
funds diversified equity funds too are exposed to equity market
risk. One prominent type of diversified equity fund in India is
Equity Linked Savings Schemes (ELSS). As per the mandate, a minimum
of 90% of investments by ELSS should be in equities at all times.
ELSS investors are eligible to claim deduction from taxable income
(up to Rs 1 lakh) at the time of filing the income tax return. ELSS
usually has a lock-in period and in case of any redemption by the
investor before the expiry of the lock-in period makes him liable
to pay income tax on such income(s) for which he may have received
any tax exemption(s) in the past.
Equity Index Funds - Equity Index Funds have the objective to
match the performance of a specific stock market index. The
portfolio of these funds comprises of the same companies that form
the index and is constituted in the same proportion as the index.
Equity index funds that follow broad indices (like S&P CNX
Nifty, Sensex) are less risky than equity index funds that follow
narrow sectoral indices (like BSEBANKEX or CNX Bank Index etc).
Narrow indices are less diversified and therefore, are more
risky.
2.Debt/IncomeFundsFunds that invest in medium to long-term debt
instruments issued by private companies, banks, financial
institutions, governments and other entities belonging to various
sectors (like infrastructure companies etc.) are known as Debt /
Income Funds. Debt funds are low risk profile funds that seek to
generate fixed current income (and not capital appreciation) to
investors. In order to ensure regular income to investors, debt (or
income) funds distribute large fraction of their surplus to
investors. Although debt securities are generally less risky than
equities, they are subject to credit risk (risk of default) by the
issuer at the time of interest or principal payment. To minimize
the risk of default, debt funds usually invest in securities from
issuers who are rated by credit rating agencies and are considered
to be of "Investment Grade". a. Diversified Debt Funds - Debt funds
that invest in all securities issued by entities belonging to all
sectors of the market are known as diversified debt funds. The best
feature of diversified debt funds is that investments are properly
diversified into all sectors which results in risk reduction. Any
loss incurred, on account of default by a debt issuer, is shared by
all investors which further reduces risk for an individual
investor.
b. Focused Debt Funds* - Unlike diversified debt funds, focused
debt funds are narrow focus funds that are confined to investments
in selective debt securities, issued by companies of a specific
sector or industry or origin. Some examples of focused debt funds
are sector, specialized and offshore debt funds, funds that invest
only in Tax Free Infrastructure or Municipal Bonds. Because of
their narrow orientation, focused debt funds are more risky as
compared to diversified debt funds. Although not yet available in
India, these funds are conceivable and may be offered to investors
very soon.
c. Assured Return Funds - Although it is not necessary that a
fund will meet its objectives or provide assured returns to
investors, but there can be funds that come with a lock-in period
and offer assurance of annual returns to investors during the
lock-in period. Any shortfall in returns is suffered by the
sponsors or the Asset Management Companies (AMCs). These funds are
generally debt funds and provide investors with a low-risk
investment opportunity. However, the security of investments
depends upon the net worth of the guarantor (whose name is
specified in advance on the offer document). To safeguard the
interests of investors, SEBI permits only those funds to offer
assured return schemes whose sponsors have adequate net-worth to
guarantee returns in the future. In the past, UTI had offered
assured return schemes (i.e. Monthly Income Plans of UTI) that
assured specified returns to investors in the future. d. Fixed Term
Plan Series Fixed Term Plan Series usually are closed-end schemes
having short term maturity period (of less than one year) that
offer a series of plans and issue units to investors at regular
intervals. Unlike closed-end funds, fixed term plans are not listed
on the exchanges. Fixed term plan series usually invest in debt /
income schemes and target short-term investors. The objective of
fixed term plan schemes is to gratify investors by generating some
expected returns in a short period. 3.Also known as Government
Securities in India, Gilt Funds invest in government papers (named
dated securities) having medium to long term maturity period.
Issued by the Government of India, these investments have little
credit risk (risk of default) and provide safety of principal to
the investors. However, like all debt funds, gilt funds too are
exposed to interest rate risk. Interest rates and prices of debt
securities are inversely related and any change in the interest
rates results in a change in the NAV of debt/gilt funds in an
opposite direction.
4. Money Market/Liquid FundsMoney market / liquid funds invest
in short-term (maturing within one year) interest bearing debt
instruments. These securities are highly liquid and provide safety
of investment, thus making money market / liquid funds the safest
investment option when compared with other mutual fund types.
However, even money market / liquid funds are exposed to the
interest rate risk. The typical investment options for liquid funds
include Treasury Bills (issued by governments), Commercial papers
(issued by companies) and Certificates of Deposit (issued by
banks).
5.HybridFunds As the name suggests, hybrid funds are those funds
whose portfolio includes a blend of equities, debts and money
market securities. Hybrid funds have an equal proportion of debt
and equity in their portfolio. There are following types of hybrid
funds in India:
a.Balanced Funds The portfolio of balanced funds includes assets
like debt securities, convertible securities, and equity and
preference shares held in a relatively equal proportion. The
objectives of balanced funds are to reward investors with a regular
income, moderate capital appreciation and at the same time
minimizing the risk of capital erosion. Balanced funds are
appropriate for conservative investors having a long term
investment horizon. b.Growth-and-Income Funds Funds that combine
features of growth funds and income funds are known as
Growth-and-Income Funds. These funds invest in companies having
potential for capital appreciation andthose known for issuing high
dividends. The level of risks involved in these funds is lower than
growth funds and higher than income funds.
6. Commodity FundsThose funds that focus on investing in
different commodities (like metals, food grains, crude oil etc.) or
commodity companies or commodity futures contracts are termed as
Commodity Funds. A commodity fund that invests in a single
commodity or a group of commodities is a specialized commodity fund
and a commodity fund that invests in all available commodities is a
diversified commodity fund and bears less risk than a specialized
commodity fund. Precious Metals Fund and Gold Funds (that invest in
gold, gold futures or shares of gold mines) are common examples of
commodity funds.
7. Real Estate FundsFunds that invest directly in real estate or
lend to real estate developers or invest in shares/securitized
assets of housing finance companies, are known as Specialized Real
Estate Funds. The objective of these funds may be to generate
regular income for investors or capital appreciation.
8. ExchangeTradedFunds (ETF)
Exchange Traded Funds provide investors with combined benefits
of a closed-end and an open-end mutual fund. Exchange Traded Funds
follow stock market indices and are traded on stock exchanges like
a single stock at index linked prices. The biggest advantage
offered by these funds is that they offer diversification,
flexibility of holding a single share (tradable at index linked
prices) at the same time. Recently introduced in India, these funds
are quite popular abroad.
9. Fund of Funds
Mutual funds that do not invest in financial or physical assets,
but do invest in other mutual fund schemes offered by different
AMCs, are known as Fund of Funds. Fund of Funds maintain a
portfolio comprising of units of other mutual fund schemes, just
like conventional mutual funds maintain a portfolio comprising of
equity/debt/money market instruments or non financial assets. Fund
of Funds provide investors with an added advantage of diversifying
into different mutual fund schemes with even a small amount of
investment, which further helps in diversification of risks.
However, the expenses of Fund of Funds are quite high on account of
compounding expenses of investments into different mutual fund
schemes.
Risk Hierarchy of Different Mutual Funds
Thus, different mutual fund schemes are exposed to different
levels of risk and investors should know the level of risks
associated with these schemes before investing. The graphical
representation hereunder provides a clearer picture of the
relationship between mutual funds and levels of risk associated
with these funds:
MUTUAL FUND STRUCTURE
The SEBI (Mutual Funds) Regulations 1993 define a mutual fund
(MF) as a fund established in the form of a trust by a sponsor to
raise monies by the Trustees through the sale of units to the
public under one or more schemes for in vesting in securities in
accordance with these regulations.
These regulations have since been replaced by the SEBI (Mutual
Funds) Regulations, 1996. The structure indicated by the new
regulations is indicated as under.
A mutual fund comprises four separate entitles, namely sponsor,
mutual fund trust, AMC and custodian. The sponsor establishes the
mutual fund and gets its registered with SEBI.
The mutual fund needs to be constituted in the form of a trust
and the instrument of the trust should be in the form of a deed
registered under the provisions of the Indian Registration Act,
1908.
The sponsor is required to contribute at lease 40% of the
minimum net worth (Rs.10 crore) of the asset management company.
The board of trustees manages the MF and the sponsor executes the
trust deeds in favour of the trustees. It is the job of the MF
trustees to see that schemes floated and managed by the AMC
appointed by the trustees are in accordance with the trust deed and
SEBI guidelines.
MUTUAL FUND STRUCTURE
STATE BANK OF INDIA
State Bank of India is the first Bank sponsored Mutual Fund to
launch offshore fund, the India Magnum Fund with a corpus of Rs.
225 cr. approximately. Today it is the largest Bank sponsored
Mutual Fund in India. They have already launched 35 Schemes out of
which 15 have already yielded handsome returns to investors. State
Bank of India Mutual Fund has more than Rs. 5,500 Crores as AUM.
Now it has an investor base of over 8 lakhs. Spread over
18schemesUNIT TRUST OF INDIA (UTI)
UTI, the first bank to begin operations as new private banks in
1994 after the Government of India allowed new private banks to be
established. UTI Bank was jointly promoted by the Administrator of
the specified undertaking of the Unit Trust of India (UTI-I), Life
Insurance Corporation of India (LIC) and General Insurance
Corporation Ltd. Also with associates viz. National Insurance
Company Ltd., the New India Assurance Company, The Oriental
Insurance Corporation and United Insurance Company LtdUTI Bank in
India today is capitalized with Rs. 232.86 Crores with 47.50%
public holding other than promoters. It has more than 200 branch
offices and Extension Counters in the country with over 1250 UTI
Bank ATM proving to be one of the largest ATM networks in the
country. UTI Bank India commits to adopt the best industry
practices internationally to achieve excellence. UTI Bank has
strengths in retail as well as corporate banking.
By the end of December 2005, UTI Bank in India had over 2.7
million debit cards. This is the first bank in India to offer the
AT PAR Cheque facility, without any charges, to all its Savings
Bank customers in all the places across the country where it has
presence.
The latest offerings of the bank along with Dollar variant is
the Euro and Pound Sterling variants of the International Travel
Currency Card. The Travel Currency Card is a signature based
pre-paid travel card which enables travellers global access to
their money in local currency of the visiting country in a safe and
convenient way.
Stock Exchange where the shares of UTI Bank are listed:
Stock ExchangeCode No. ISIN No.
AhmedabadCode No. 63134
MumbaiCode No. 532215 A Group
NSECode No. UTIBANKEQ
OTCEICode No. Permitted Security
NSDLISIN No. INE238A01026
CDSLISIN No. INE238A01026
Share Capital of UTI Bank
Authorized Share Capital: Rs. 300 Crores
Paid Up Share Capital: Rs. 232.86 Crores
Declared Rate of Interests by UTI Bank
Year 1998-99 - 10% (Pro-rata)
Year 1999-00 - 12%
Year 2000-01 - 15%
Year 2001-02 - 20%
Year 2003-03 - 22%
Year 2004-04 - 25%
UTI Mutual Fund is managed by UTI Asset Management Company
Private Limited (Estb: Jan 14, 2004) 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,
Gn Block, Bandra - Kurla Complex, Bandra (East), Mumbai - 400
051 will provide professionally managed back office 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 2005, 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 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.
HSBC
HSBC is the largest bank in Hong Kong and second largest group
in the world after Citicorp. Before moving its headquarter to
London in 1990, it was headquartered in Hong Kong. HSBC India is
having branches in Ahmedabad, Bangalore, Chennai, Chandigarh,
Coimbatore, Gurgaon, Hyderabad, Jaipur, Kochi, Kolkata, Ludhiana,
Mumbai, New Delhi, Noida, Pune, Thane, Trivandrum and
Visakhapatnam.
HSBC NRI centers are located in Asia-Pacific, the Middle East,
Europe and North America. HSBC NRI centres provide full range of
personal and private banking products in India and overseas. HSBC
Internet banking adds to the services of HSBC India abroad.
HSBC India, along with HSBC Investment product and HSBC
Insurance, it offers international Gold Card and Classic Credit
Cards from VISA and MasterCard and debit cards from Visa. HSBC in
India gives 24 hour banking services, extensive network of ATMs,
integrated Call Centre and also HSBC e-banking.
HSBC Bank India Fact File
The HSBC Group develops and applies advanced technology to the
efficient and convenient delivery of banking and related financial
services. HSBC Bank India provides the following:
Self-service banking with over 150 in-branch and off-branch ATMs
and 24-hour phone banking.
Trade and corporate banking services with real-time access to a
centralised information database
Instantaneous inter-city transactions through online connections
between all branches
ICICI BANK
ICICI Limited was established in 1955 by the World Bank, the
Government of India and the Indian Industry, for the promotion of
industrial development in India by giving project and corporate
finance to the industries in India.
ICICI Bank has grown from a development bank to a financial
conglomerate and has become one of the largest public financial
institutions in India. ICICI Bank has financed all the major
sectors of the economy, covering 6,848 companies and 16,851
projects. As of March 31, 2000, ICICI had disbursed a total of Rs.
1, 13,070 crores, since inception.
ICICI Bank Fact Files
Total assets: Rs.146, 214 crore (December 31, 2005)Network
: 530 branchesATMs
: Over 1,880Abroad Subsidiaries : United Kingdom and
CanadaAbroad branches
: Singapore and BahrainRepresentative offices : United States,
China, United Arab Emirates, Bangladesh and
South Africa.
ABN AMROProfile
ABN AMRO is an international bank with European roots. We have a
clear focus on consumer and commercial clients in our local markets
and focus globally on select multinational corporations and
financial institutions, as well as private clients. Our business
mix gives us a competitive edge in our chosen markets and client
segments. Our strategy is built on leveraging our advantages as a
Group to create the best value for ? and with ? our clients.
We are active in four principal customer segments: Personal
Banking, Private Banking, Business and Commercial and Corporate and
Institutional.
Although we serve a broad range of clients, our strategic focus
is on the mid-market segment. This is the client area where we have
a strong and distinctive competitive advantage and where we feel we
can be most profitable in the future.
The ABNAMRO Corporate Values and Business Principles provide the
framework within which we carry out our operations.
In brief...
ABNAMRO is a prominent international bank, our history going
back to 1824. ABNAMRO ranks eighth in Europe and 12th in the world
based on total assets, with more than 4,000 branches in 53
countries, a staff of more than 99,000 full-time equivalents and
total assets of EUR 1,120.1bln (as at 1November2011).
Organisation We implement our strategy through a number of
Business Units (BUs). These units are responsible for managing a
distinct region, client segment or product segment, while also
sharing expertise and operational excellence across the Group. We
have five regional Client BUs: the Netherlands, Europe, North
America, Latin America and Asia. These BUs serve about 20 million
consumer clients and small to larger businesses worldwide. We have
two global Client BUs to serve clients with. The BUPrivate Clients
provides private banking services to wealthy individuals and
families and has EUR150 bln in Assets under Administration (as at
July2010). The BUGlobal Clients serves our 550 multinational
clients.
We have three Product BUs: Global Markets, Asset Management and
Transaction Banking.
Global Markets develops products for our commercial clients
across the globe.
Transaction Banking is our product organisation covering all
payments and trade in the bank for our retail, private client, and
commercial markets.
Asset Management, which is one of the world's leading asset
managers, operates from over 20 locations worldwide and manages
EUR211 bln worth (as at July2011) of assets for private investors
and institutional clients.
Services Services was established to create cost savings through
consolidation and standardisation. It focuses on further exploiting
new market solutions for support services with the aim to achieve
better products and services for our clients at lower costs.
Group Functions
Group Functions collaborates with the BUs in maximising client
and shareholder value. Its basic functions are governance
(facilitating the implementation of Managing Board policy
throughout the bank), standard and policy setting (setting the
parameters that the BUs work within), and sharing expertise across
the company.
Segments To provide all our clients with even better products
and services, we also have a cross-BU Consumer Client Segment and a
cross-BU Commercial Client Segment. These segments focus on
aligning the Client BUs with the Product BUs, sharing best
practices and exchanging winning formulas across the Group in order
to deliver high-quality solutions to our client bases across the
world
Corporate ValuesOur Corporate Values provide the foundation for
the bank's BusinessPrinciples. The bank formulated these Corporate
Values in 1997.
Our values and principles also help us on our journey to
sustainable development. By living according our defined Corporate
Values and Business Principles we can meet the needs of our
organization and stakeholders today, thus protecting, sustaining
and enhancing human, natural and financial capital for the future.
Read more about ABNAMRO and sustainable development.
Integrity: Above all, we are committed to integrity in all that
we do, always, everywhere.
Teamwork: It is the essence of our ability to succeed as a
trusted preferred supplier of financial solutions to our clients.
Our overriding loyalty is to the good of the whole organization. We
learn from each other and share our skills and resources across
organizational boundaries for our clients' benefit and our own.
Respect: We respect every individual. We draw strength from
equal opportunity and diversity, at the same time supporting
personal growth and development. We value and we all benefit from
the entrepreneurial spirit of each individual.
Professionalism: We are committed to the highest standards of
professionalism, we pursue innovation, we deploy imagination, we
are open to new ideas and we act decisively and consistently. We
are determined to deliver outstanding quality so that our
relationships with our clients will be long lasting and close.
Business Principles
A compass to guide us on our journey
ABN AMRO is an ambitious institution, committed to continuous
improvement in everything we do. Our success depends on excellent
performance and a solid reputation. Transparency and dialogue are
of crucial importance in all our relationships if we are to
maintain our reputation as a respectable and reliable
institution.
Based on our four Corporate Values, we have formulated Business
Principles to guide all our employees in their daily work. Defining
them clarifies what we stand for and unites us as a group.
These Business Principles are:
We are the heart of our organization
We pursue excellence
We aim to maximize long-term shareholder value
We manage risk prudently and professionally
We strive to provide excellent service
We build our business on confidentiality
We assess business partners on their standards
We are a responsible institution and a good corporate
citizen
We respect human rights and the environment
We are accountable for our actions and open about them
Business Principles alone are not the answer to every problem,
but they do challenge us to translate their spirit into our daily
practice and shift our horizons beyond short-term profit to
long-term value creation through sustainable development.
Performance Measures of Mutual Funds
The most important and widely used measures of performance
are:
The Treynor Measure
The Sharpe Measure
Jenson Model
Fama Model
The Trevnor Measure
Developed by Jack Treynor, this performance measure evaluates
funds on the basis of Treynor's Index. This Index is a ratio of
return generated by the fund over and above risk free rate of
return (generally taken to be the return on securities backed by
the government, as there is no credit risk associated), during a
given period and systematic risk associated with it (beta).
Symbolically, it can be represented as:
Treynor's index (Ti) = (Ri - Rf)/Bi
Where, Ri represents return on fund, Rf is risk free rate of
return and Hi is beta of the fund.
All risk-averse investors would like to maximize this value.
While a high and positive Treynor's Index shows a superior
risk-adjusted performance of a fund, a low and negative Treynor's
Index is an indication of unfavorable performance.
The Sharpe Measure
In this model, performance of a fund is evaluated on the basis
of Sharpe Ratio, which is a ratio of returns generated by the fund
over and above risk free rate of return and the total risk
associated with it. According to Sharpe, it is the total risk of
the fund that the investors are concerned about. So, the model
evaluates funds on the basis of reward per unit of total risk.
Symbolically, it can be written as:
Sharpe Index (Si) = (Ri Rf)/Si
Where, Si is standard deviation of the fund.
While a high and positive Sharpe Ratio shows a superior
risk-adjusted performance of a fund, a low and negative Sharpe
Ratio is an indication of unfavorable performance. Comparison of
Sharpe and Treynor Sharpe and Treynor measures are similar in a
way, since they both divide the risk premium by a numerical risk
measure. The total risk is appropriate when we are evaluating the
risk return relationship for well diversified portfolios. On the
other hand, the systematic risk is the relevant measure of risk
when we are evaluating less than fully diversified portfolios or
individual stocks. For a well-diversified portfolio the total risk
is equal to systematic risk. Rankings based on total risk (Sharpe
measure) and systematic risk (Treynor measure) should be identical
for a well-diversified portfolio,as the total risk is reduced to
systematic risk. Therefore, a poorly diversified fund that ranks
higher on Treynor measure, compared with another fund that is
highly diversified, will rank lower on Sharpe Measure.
Jenson Model
Jensons model proposes another risk adjusted performance
measure.
This measure was developed by Michael Jenson and is sometimes
referred to as the Differential Return Method. This measure
involves evaluation of the returns that the fund has generated vs.
the returns actually expected out of the fund given the level of
its systematic risk. The surplus between the two returns is called
Alpha, which measures the performance of a fund compared with the
actual returns over the period. Required return of a fund at a
given level of risk (Bi) can be calculated as:
Ri = Rf+ Bi (Rm Rf)
Where, Rm is average market return during the given period.
After calculating it alpha can be obtained by subtracting required
return from the actual return of the fund.
Higher alpha represents superior performance of the fund and
vice versa. Limitation of this model is that it considers only
systematic risk not the entire risk associated with the fund and an
ordinary investor can not mitigate unsystematic risk, as his
knowledge of market is primitive.
Fama Model The Eugene Fama model is an extension of Jenson
model. This model compares the performance, measured in terms of
returns, of a fund with the required return commensurate with the
total risk associated with it. The difference between these two is
taken as a measure of the performance of the fund and is called net
selectivity.
The net selectivity represents the stock selection skill of the
fund manager, as it is the excess return over and above the return
required to compensate for the total risk taken by the fund
manager. Higher value of which indicates that fund manager has
earned returns well above the return commensurate with the level of
risk taken by him.
Required return can be calculated as: Ri = Rf + Si/Sm*(Rm
Rf)
Where, Sm is standard deviation of market returns. The net
selectivity is then calculated by subtracting this required return
from the actual return of the fund. Among the above performance
measures, two models namely, Treynor measure and Jenson model use
systematic risk based on the premise that the unsystematic risk is
diversifiable. These models are suitable for large investors like
institutional investors with high risk taking capacities as they do
not face paucity of funds and can invest in a number of options to
dilute some risks. For them, a portfolio can be spread across a
number of stocks and sectors. However, Sharpe measure and Fama
model that consider the entire risk associated with fund are
suitable for small investors, as the ordinary investor lacks the
necessary skill and resources to diversified. Moreover, the
selection of the fund on the basis of superior stock selection
ability of the fund manager will also help in safeguarding the
money invested to a great extent. The investment in funds that have
generated big returns at higher levels of risks leaves the money
all the more prone to risks of all kinds that may exceed the
individual investors risk appetite.LIST OF AMCS
Kotak mutual funds
ABN AMRO Mutual fund
Birla Mutual fund
Deutsche Mutual fund
DSP Merrill Lynch Mutual fund
Franklin Templeton Mutual fund
HDFC Mutual fund
HSBC Mutual fund
ING Vysya Mutual fund
JM Financial Mutual fund
Kotak Mahindra Mutual fund
LIC Mutual fund
Morgan Stanley Mutual fund
Principal Mutual fund
Prudential KOTAK Mutual fund
Reliance Mutual fund
SBI Mutual fund
Sundaram Mutual fund
TATA Mutual fund
Unit Trust of India Mutual fund
UTI Mutual fund
LIST OF SCHEMES IN PRUKOTAKOpen-Ended Schemes
Prudential KOTAK Aggressive Plan - Dividend
Prudential KOTAK Aggressive Plan - Growth
Prudential KOTAK Balanced Plan -Dividend
Prudential KOTAK Balanced Plan -Growth
Prudential KOTAK Discovery Fund Institutional option -1
Prudential KOTAK Dynamic Plan - Dividend
Prudential KOTAK Dynamic Plan - Growth
Prudential KOTAK Dynamic Plan Institutional option-1
Prudential KOTAK Emerging Star - Dividend
Prudential KOTAK Emerging Star - Growth
Prudential KOTAK Emerging Star Institutional option-1
Prudential KOTAK FMCG Fund - Dividend
Prudential KOTAK FMCG Fund -Growth
Prudential KOTAK Flexible income plan Daily Dividend
Prudential KOTAK Flexible income plan Monthly Dividend
Prudential KOTAK Floating rate plan A - Dividend
Prudential KOTAK Floating rate plan B - Growth
Prudential KOTAK Gilt Fund - Investment plan -Dividend
Prudential KOTAK Gilt Fund - Investment plan -GrowthPrudential
KOTAK Growth plan - Dividend
Prudential KOTAK Growth plan - Growth
Prudential KOTAK Income multiplier fund Dividend
Prudential KOTAK Income multiplier fund - Growth
Prudential KOTAK Income plan - Dividend
Prudential KOTAK Income plan - Growth
Prudential KOTAK Index Fund
Prudential KOTAK Infrastructure Fund Dividend
Prudential KOTAK Infrastructure Fund Growth
Prudential KOTAK Liquidity Institutional plan - Growth
Prudential KOTAK Liquidity Institutional plus plan Dividend
Prudential KOTAK Liquid plan Dividend
Prudential KOTAK Liquid plan Growth
Prudential KOTAK Liquid super Institutional plan Growth
Prudential KOTAK Long term plan Dividend
Prudential KOTAK MIP cumulative
Prudential KOTAK Power - Dividend
Prudential KOTAK Power - Growth
Prudential KOTAK Services industries Fund Dividend
Prudential KOTAK Services industries Fund Growth
Prudential KOTAK Tax plan Dividend
Prudential KOTAK Tax plan-Growth
Prudential KOTAK Technology Fund Dividend
Prudential KOTAK Technology Fund Growth
Prudential KOTAK Very Aggressive plan Growth
Prudential KOTAK Very Cautious plan - Dividend
IN PRUKOTAK MANY SCHEMES ARE AVAILABLE MORE SCHEMES, LIKE
OPEN ENDED, CLOSED-ENDED, REDEEMED SCHEMES.
BUT HERE SELECTED TWO SCHEMES ONLY FROM OPEN-ENDED.
TYPES OF MUTUAL FUND SEHEMES
BY STRUCTURE
Open-Ended Schemes
Close-Ended Schemes
Interval Schemes
BY INVESTMENT OBJECTIVE
Growth Schemes
Income Schemes
Balanced Schemes
Money Market Schemes
OTHER SCHEMES
Tax saving Schemes
Special Schemes
Index Schemes
Sector Specific Schemes
Mutual fund schemes may be classified on the basis of its
structure and its investment objective.
By Structure:
Open-ended funds
An open ended fund is one that is available for subscription all
through the year. These do not have a fixed maturity. Investors can
conveniently buy and sell units at Net Asset Value (NAV) related
prices. The key feature of open-end schemes is liquidity.
Closed-ended funds
A closed end fund has a stipulated maturity period which
generally ranging from 3 to 15 years. The fund is open for
subscription only during a specific period. Investors can invest in
the scheme at the time of the initial public issue and thereafter
they can buy or sell the units of the scheme on the stock exchanges
where they are listed.Interval funds
These combine the features of open-ended and closed-ended
schemes. They are open for sale or redemption during pre-determined
intervals at NAV related prices.By Investment Objective:
Growth funds
The aim of growth funds is to provide capital appreciation over
the medium to long-term. Such schemes normally invest the majority
of their corpus in equities. It has been proven that returns from
stocks, have outperformed most other kind of investments held over
the long term. Growth schemes are ideal for investors having a
long-term outlook seeking growth over a period of time.Income
fundsThe aim of income funds is to provide regular and steady
income to investors. Such schemes generally invest in fixed income
securities such as bonds, corporate debentures and government
securities. Income funds are ideal for capital stability and
regular income.
Balanced funds
The aim of balanced funds is to provide both growth and regular
income. Such schemes periodically distribute a part of their
earning and investment both in equities and fixed income securities
in the proportion indicated in their offer documents. In a rising
stock market, the NAV of these schemes may not normally keep pace,
or fall equally when the market falls. These are ideal for
investors looking for a combination of income and moderate
growth.Money market fundFor over 30 years, money market funds have
treated investors well. Money market funds have been around for 30
years and are a very popular place for investors to park their
money.Money market funds are a type of mutual fund that invests in
short-term (less than a year) debt securities of agencies of the
U.S. Government, banks and corporations and U.S. Treasury Bills.
They are fixed at $1 per share and only the yield fluctuates.
Load Funds
A load fund is one that charges a commission for entry of exit.
That is, each time you buy or sell units in the fund, a commission
will be payable. Typically entry exit loads range from 1% to 2%. It
could be corpus is put to work.
No-Load Funds
A No-Load fund is one that does not charge a commission for
entry or exit. That is, no commission is payable on purchase or
sale of units in the fund. The advantage of a No-Load fund is that
the entire corpus is put to work.
Other Schemes:Tax saving Schemes:These schemes offer tax rebates
to the investor under specific provisions of the Indian income tax
laws as the Government offers tax incentives for investment in
Equity Linked Saving Scheme (ELSS) and Pension Schemes are allowed
as deduction u/s 88 of the Income Tax Act. The Act also provide
opportunities to investors to save capital gains u/s 54EA and 54EB
by investing in Mutual funds, provided the capital asset has been
sold to April 1,2000 and the amount is invested before September
30,2000.
Special Schemes:Industry Specific SchemesIndustry Specific
Schemes invest in the industries specified in the offer document.
The investment of these funds is limited to specific like Info
Tech, FMCG, and Pharmaceuticals etc.Index Schemes:
Index Funds attempt to replicate the performance of a particular
index such as the BSE sensex or the NSE. SECTORAL SCHEMES:Sectoral
funds are those, which invest exclusively in a specified industry
or a group of industries or various segments such as A Group shares
or initial public offerings.
FREQUENTLY USED TERMS
Net Asset Value (NAV)
Net Asset Value is the market value of the assets of the scheme
minus its liabilities. The per unit NAV is the net asset value of
the scheme divided by the number of units outstanding on the
Valuation Date.
Is the price at which a close-ended scheme repurchases its units
and it may include a back-end load. This is also called Bid
Price.
Redemption Price
Is the price at which open-ended schemes repurchase their units
and close-ended schemes redeem their units on maturity. Such prices
are NAV related.
Sales Load
Is a charge collected by a scheme when it sells the units. Also
called, Front-end load. Schemes that do not charge a load are
called No Load schemes.
Repurchase or Back-end Load
Is a charge collected by a scheme when it buys back the units
from the unit holders.
CHAPTER -IIICOMPANY PROFILE
Kotak Mahindra Bank
TypePublic
Traded asBSE:500247NSE:KOTAKBANK
IndustryFinancial service
Founded1985 (as Kotak Mahindra Finance Ltd)
HeadquartersMumbai, India
Key peopleUday Kotak (Vice Chairman) & (MD)
ProductsDeposit accounts, Loans, Investment services, Business
banking solutions, Treasury and Fixed income products etc.
Website www.kotak.com
Kotak Mahindra Bank (BSE:500247, NSE:KOTAKBANK) is an Indian
financial service firm established in 1985. It was previously known
as Kotak Mahindra Finance Limited, a non-banking financial company.
In February 2004, Kotak Mahindra Finance Ltd, the group's flagship
company was given the license to carry on banking business by the
Reserve Bank of India (RBI). Kotak Mahindra Finance Ltd. is the
first company in the Indian banking history to convert to a bank.
Today it has more than 20,000 employees and Rs. 10,000 crore in
revenue.[2]Mr. Uday Kotak is Executive Vice Chairman & Managing
Director of Kotak Mahindra Bank Ltd. In July 2012 Mr. C. Jayaram
and Mr. Dipak Gupta, whole time directors of the Bank, were
appointed the Joint Managing Directors of Kotak Mahindra Bank. Dr.
Shankar Acharya is the chairman of board of Directors in the
company. The Bank has its registered office at Nariman Bhavan,
Nariman Point, Mumbai.
History
It bought stressed assets from a number of banks, at full loan
value of Rs 1,000 crore in 2006.[3] In January 2012, the bank
reported a 32% rise in net profit to Rs188 crore for the quarter
ended December 2011 against Rs. 142 crore the corresponding quarter
last year.[4] Kotak Mahindra bank also reached the top 100 most
trusted brands of India in The Brand Trust Report published by
Trust Research Advisory in 2012.The group specializes in offering
top class financial services catering to every segment of the
industry. The various group companies include.
Kotak Mahindra Capital Limited
Kotak Mahindra Securities Limited
Kotak Mahindra Inc
Kotak Mahindra (International) Limited
Global Investments Opportunities Fund Limited
Kotak Mahindra(UK) Limited Kotak Securities Limited
Kotak Mahindra Old Mutual Life Insurance Company Limited
Kotak Mahindra Asset Management Company Limited
Kotak Mahindra Trustee Company Limited
Kotak Mahindra Investments Limited
Kotak Forex Brokerage Limited
Kotak Mahindra Private-Equity Trustee Limited
Group Structure
BOARD OF DIRECTORS Dr. Shankar Acharya, Non-Executive Part-time
Chairman
Dr. Shankar Acharya, (66 years) B.A. (Hons.) from Oxford
University and Ph.D. (Economics) from Harvard University, has
considerable experience in various fields of economics and finance.
He is a Honorary Professor at the Indian Council for Research on
International Economic Relations (ICRIER) and a Board Member of
ICRIER and the Administrative Staff College of India (ASCI). He was
Chief Economic Adviser, Ministry of Finance, Member, Securities and
Exchange Board of India (SEBI) and Member, Twelfth Finance
Commission. He has held several senior positions in the World Bank,
including Director of World Development Report (1979) and Research
Adviser. He was re-appointed as the Non-Executive Chairman of the
Bank at the Annual General Meeting held on 28th July 2010 for a
period of three years with effect from 20th July 2010. He is on the
Board of Eros International Media Ltd. and The South Asia Institute
for Research and Policy (Private) Limited, Sri Lanka. Dr. Acharya
is the Chairman of the Audit Committee of the Bank, Member of the
Audit Committee of Eros International Media Limited and the
Chairman of the Shareholders Grievance/Investors Relations
Committee of Eros International Media Ltd.Mr. Uday Kotak, Executive
Vice-Chairman and Managing Director
Mr. Uday Kotak, (53 years) holds a Bachelors degree in Commerce
and an MBA from Jamnalal Bajaj Institute of Management Studies,
Mumbai. He is the Executive Vice-Chairman and Managing Director of
the Bank and its principal founder and promoter. Under Mr. Kotaks
leadership, over the past 26 years, Kotak Mahindra group
established a prominent presence in every area of financial
services from stock broking, investment banking, car finance, life
insurance and mutual funds. Mr. Kotak is the recipient of several
prestigious awards. He is a member of the Government of Indias high
level committee on Financing Infrastructure, the Primary Market
Advisory Committee of SEBI, Member of the Board of Governors of
Indian Council for Research on International Economic Relations,
National Institute of Securities Markets and National Council of
CII and Chairman of the CII Capital Markets Committee. He is also a
Governing Member of the Mahindra United World College of India.
Mr. C. Jayaram, Joint Managing Director
Mr. C. Jayaram, (56 years) B. A. (Economics), PGDM-IIM, Kolkata,
is Joint Managing Director of the Bank and is currently in charge
of the Wealth Management Business of the Kotak Group. He also
oversees the international subsidiaries and the alternate asset
management business of the group. He has varied experience of over
34 years in many areas of finance and business and was earlier the
Managing Director of Kotak Securities Limited. He has been with the
Kotak Group for 22 years and has been instrumental in building a
number of new businesses at Kotak Group. Prior to joining the Kotak
Group, he was with Overseas Sanmar Financial Ltd.
Mr. Dipak Gupta, Joint Managing Director
Mr. Dipak Gupta, (51 years) B.E. (Electronics), PGDM-IIM,
Ahmedabad, is the Joint Managing Director of the Bank and has over
26 years of experience in the financial services sector, 20 years
of which have been with the Kotak Group. He is responsible for
Group HR, administration, infrastructure, operations and IT. He is
also responsible for asset reconstruction business of the Bank. Mr.
Dipak Gupta was responsible for leading the Kotak Groups
initiatives into the banking arena. He was the Executive Director
of Kotak Mahindra Prime Limited. Prior to joining the Kotak Group,
he was with A. F. Ferguson & Company for approximately six
years.
Mr. Asim Ghosh
Mr. Asim Ghosh, (64 years) is a B.Tech, IIT Delhi and MBA from
the Wharton School, University of Pennsylvania. Mr. Ghosh commenced
his career in consumer goods marketing with Procter & Gamble in
the U.S. and Canada and worked subsequently with Rothmans
International as a Senior Vice President of one of Canadas major
breweries. He moved to Asia in 1989 as CEO of the Frito Lay (Pepsi
Foods) start up in India. Thereafter, he was in executive positions
with Hutchison in Hong Kong and India for 16 years. He continued as
the CEO of Vodafone Essar Limited till 31st March 2010 and as a
Non-Executive Director till 9th February 2011. He is also on the
Board of Husky Energy Inc., other Husky Group Companies and some
Hutchison Whampoa Group Companies.
Dr. Sudipto Mundle
Dr. Sudipto Mundle, (63 years) graduated from St. Stephen
College, and has a Ph.D. in Economics from the Delhi School of
Economics. He was a Director in the Strategy & Policy
Department, Asian Development Bank, and also India Chief Economist
at ADBs India Resident Mission. He was appointed as a Director of
the Bank with effect from 21st July 2011. He is a Partner Director
of The Governance Group, Singapore; an Emeritus Professor &
Member, Board of Governors, National Institute of Public Finance
and Policy; Member, Board of Governors of Institute of Economic
Growth; Member, Monetary Policy Technical Advisory Committee,
Reserve Bank of India; Member, National Statistical Commission,
Government of India; and President of PREETI Foundation. In his
earlier career Dr. Mundle was Economic Advisor in the Ministry of
Finance, Govt. of India; and Reserve Bank of India Chair Professor
at the National Institute of Public Finance and Policy. He has also
served in other academic institutions including the Indian
Institute of Management, Ahmedabad and Centre for Development
Studies, Trivandrum. He was a Fulbright Scholar at Yale University,
USA; and had visiting assignments at Cambridge University, UK;
Institute of Social Studies, Netherlands; and Japan Foundation,
Japan.Mr. Prakash Apte
Mr. Prakash Apte, (58 years)B.E. (Mechanical), is presently the
Chairman of Syngenta India Limited, one of the leading agri
business companies in India. Mr. Apte, in a career spanning over 35
years has considerable experience in various areas of management
and business leadership. During more than 15 years of very
successful leadership experience in agri business, he has gained
varied knowledge in various aspects of Indian Agri Sector and has
been involved with many initiatives for technology, knowledge and
skills up gradation in this sector, which is so vital for Indias
food security. He was instrumental in setting up the Syngenta
Foundation India which focuses on providing knowledge and support
for adopting scientific growing systems to resource poor farmers
and enabling their access to market. He is a Director of Syngenta
Foundation India and Kotak Mahindra Old Mutual Life Insurance
Limited. Mr. Apte is a member of Audit Committee of Syngenta India
Limited.
Mr. Amit Desai
Mr. Amit Desai, (53 years) B.Com, LLB, is an eminent
professional with 31 years of experience. He is also on the Board
of Kotak Mahindra Trustee Company Limited and Terra DeKM India Pvt.
Ltd. Mr. Desai was a member of Audit Committee of Kotak Mahindra
Trustee Company Limited till 26th April 2013.
Mr. Narendra P. Sarda
Mr. N.P. Sarda, (66 years) B.Com, F.C.A., is a Chartered
Accountant for more than 40 years. He is a former partner of M/s.
DeloitteHaskin & Sells, Chartered Accountants, the past
President of the Institute of Chartered Accountants of India (in
1993) and was a public representative Director of the Stock
Exchange, Mumbai (BSE).
YEARMILESTONE
1986Kotak Mahindra Finance Limited starts the activity of Bill
Discounting
1987Kotak Mahindra Finance Limited enters the Lease and Hire
Purchase market
1990The Auto Finance division is started
1991The Investment Banking Division is started. Takes over
FICOM, one of India's largest financial retail marketing
networks
1992Enters the Funds Syndication sector
1995Brokerage and Distribution businesses incorporated into a
separate company - Kotak Securities. Investment Banking division
incorporated into a separate company - Kotak Mahindra Capital
Company
1996The Auto Finance Business is hived off into a separate
company -Kotak Mahindra Prime Limited (formerly known as Kotak
Mahindra Primus Limited). Kotak Mahindra takes a significant stake
in Ford Credit Kotak Mahindra Limited, for financing Ford vehicles.
The launch of Matrix Information Services Limited marks the Group's
entry into information distribution.
1998Enters the mutual fund market with the launch of Kotak
Mahindra Asset Management Company.
2000Kotak Mahindra ties up with Old Mutual plc. for the Life
Insurance business.
2000Kotak Securities launches its on-line broking site (now
www.kotaksecurities.com). Commencement of private equity activity
through setting up of Kotak Mahindra Venture Capital Fund.
2001Matrix sold to Friday Corporation
2001Launches Insurance Services
2004Kotak Mahindra Finance Ltd. converts to a commercial bank -
the first Indian company to do so.
2005Launches India Growth Fund, a private equity fund.
2006Kotak Group realigns joint venture in Ford Credit; Buys
Kotak Mahindra Prime (formerly known as Kotak Mahindra Primus
Limited) and sells Ford credit Mahindra.
2006Launches a real estate fund
2007Bought the 25% stake held by Goldman Sachs in Kotak Mahindra
Capital Company and Securities
2009Launched a Pension Fund under the New Pension System
2010Kotak Mahindra Bank Ltd. Opened a representative office in
Dubai
Entered Ahmedabad Commodity Exchange as anchor investor
2011Ahmedabad Derivatives and Commodities Exchange, a Kotak
anchored enterprise, became operational as a national commodity
exchange.
2012Kotak Mahindra Bank Ltd entered into a Business Cooperation
arrangement with CIMB Group Sdn Bhd, Malaysia.
Awards
Recent achievements
At Kotak Mahindra Group we take a client-centric view and
constantly innovate to provide you with the best of services and
infrastructure. We have regularly received accolades that stand
testimony to our success in this endeavour. Some of our recent
achievements are:
BANKING
ICAI AwardExcellence in Financial Reporting under Category 1 -
Banking Sector for the year ending 31st March, 2011 AsiamoneyBest
Local Cash Management Bank 2011 IDG IndiaKotak won the CIO 100 'The
Agile 100' award 2011 IDRBTBanking Technology Excellence Awards
Best Bank Award in IT Framework and Governance Among Other Banks' -
2010Banking Technology Award for IT Governance and Value Delivery,
2009 IR Global RankingsBest Corporate Governance Practices - Ranked
among the top 5 companies in Asia Pacific, 2010 FinanceAsiaBest
Private Bank in India, for Wealth Management business, 2010 Kotak
Royal Signature Credit CardWas chosen "Product of the Year" in a
survey conducted by Nielsen in 2010 IBA Banking Technology
AwardsBest Customer Relationship Achievement - Winner 2009 &
2010Best overall winner, 2008Best IT Team of the Year, 4 years in a
row from 2007 to 2010Best IT Security Policies & Practices,
2008 EuromoneyBest Private Banking Services (overall), 2010 Emerson
Uptime Champion AwardsTechnology Senate Emerson Uptime Championship
Award in the BFSI category, 2009WEALTH MANAGEMENT
FinanceAsiaBest Private Bank India - FinanceAsia
2011MISCELLANEOUS
Best Local Trade Bank in India The UK based Trade &
Forfaiting Review awarded Kotak Mahindra Bank Ltd. the Bronze Award
in the category of Best Local Trade Bank in India at the TFR Awards
2012.
LACP Vision Awards 2011 for Annual Report 2011-11Platinum Award
- Best among Banking Category, APAC Gold Award - Most Creative
Report, APAC Ranked No. 21 among Top 50 Reports, APAC Ranked No. 87
among the World's Top 100 Annual Reports
Businessworld'Most Valuable CEO' overall, 2011 awarded to Mr.
Uday Kotak, Executive Vice Chairman & Managing Director
CNBCTV 18'Best Performing CFO in the Banking/Financial Services
sector by CNBCTV 18 CFO Awards 2011 awarded to Mr. Jaimin Bhatt
GIREM GIREM awarded Kotak Realty Funds Group, the "Investor of
the Year" Award for 2010 IBA Banking Technology Awards Best Use of
Business Intelligence - up, 2009Best Enterprise Risk Management -
Runner up, 2009 The Great Places to Work Institute, IndiaBest
Workplaces in India, 2009 Hewitt10th Best Employer in India, 2008,
2009 & 2010 Financial Insights Innovation AwardBest Innovation
in Enterprise Security Management in the Asia Pacific Region, 2010
Frost & SullivanBest Passenger Vehicle Finance Company in
India, 2007 CNBC TV 18Indian Business Leader of the Year, 2009
awarded to Uday Kotak, Executive Vice Chairman & Managing
Director
INTERNATIONAL ASSET MANAGEMENT
Global Investor (Editorial Award) Asian Asset Manager of the
Year, 2010ASSET MANAGEMENT
ICRA Mutual Fund Awards 2010 Kotak Liquid (Regular Plan) -
Ranked as a Seven Star Fund for its 1 year performance Kotak Flexi
Debt Fund - Ranked as a Five Star Fund for its 1 year performance
Kotak Flexi Debt Fund - Ranked as a Five Star Fund for its 3 year
performance Kotak 30 - Ranked as a Five Star Fund for its 3 year
performance
INVESTMENT BANKING
FinanceAsiaBest Investment Bank in India, 2011Best Equity House
in India, 2011Best Broker in India, 2011 AsiamoneyBest Domestic
Equity House, 2011Best Local Brokerage in the Asiamoney Brokers
Poll 2011 Global FinanceBest Investment Bank in India, 2011
Euromoney Real Estate PollBest Bank for Equity Finance in India,
2011 Asset Asian AwardsBest Domestic Investment Bank, 2011
FinanceAsia Country Awards for AchievementBest Investment Bank in
India, 2007, 2008, 2009, 2010 & 2011 Best Equity House in
India, 2009 & 2011 Asiamoney Best Domestic Bank AwardsBest
Domestic Equity House, 2009, 2010 & 2011 IFR AsiaIndia Equity
House of the Year, 2009 Global FinanceBest Investment Bank in
India, 2009, 2010 & 2011
Asset Asian AwardsBest Domestic Investment Bank, 2007, 2008,
2009 & 2010SECURITIES
FinanceAsiaBest Broker in India - 2011 CNBC Financial Advisor
AwardsBest Performing Equity Broker, 2009 & 2010 Asiamoney
Brokers PollBest Local Brokerage, 2007, 2008, 2009 & 2010 Best
Analyst in India Sanjeev Prasad, 2006, 2007, 2008, 2009 & 2010
FinanceAsia Country Awards for AchievementBest Broker in India,
2007, 2010 & 2011 Thomson Extel Surveys AwardsIndia's Leading
Equity House, 2008
SuperBrands Council of IndiaBusiness Superbrand India,
2009CHAPTER IV
DATA ANALYSIS & INTERPRETATIONNAV History Historical value
for a period of
5-Nov-2013 to 28-Jan-2014
SBI MUTUAL FUND
Magnum Equity Fund Growth & Dividend
DATEDIVIDEND GROWTH
05-Nov-201342.1442.17
12-Nov-201335.5740.47
19-Nov-201337.8443.06
26-Nov-201338.3343.61
03-Dec-201339.3144.73
10-Dec-201340.0645.58
17-Dec-201338.8044.15
24-Dec-201339.6845.15
31-Dec-201341.5247.24
07-Jan-201442.5148.36
14-Jan-201441.4647.17
21-Jan-201433.7443.24
28-Jan-201434.8939.70
1SBI MAGNUM EQUITY FUND Dividend & Growth
INTERPRETATION:
The above graph indicates that the Equity Fund - Growth and
Dividend from the 1st week of Dec is almost performing same but in
2nd week of Jan the performance of Growth has drastically changed
when compared to Dividends, and again the performance showed is
similar in rest of the weeks. Because of declaring Dividends
frequently, the performance of Dividend always shows less when
compared with others.
NAV History Historical value for a period of
5-Nov-2013 to 28-Jan-2014
UTI MUTUL FUND
UTI Equity Fund Growth & Dividend
DATEDIVIDENDGROWTH
05-Nov-201341.4244.89
12-Nov-201339.8843.22
19-Nov-201342.0945.60
26-Nov-201340.8044.21
03-Dec-201341.6345.11
10-Dec-201341.3045.20
17-Dec-201341.8545.36
24-Dec-201342.7346.31
31-Dec-201344.3048.02
07-Jan-201445.6849.51
14-Jan-201444.9148.68
21-Jan-201438.3041.50
28-Jan-201439.1042.39
UTI EQUITY FUND Dividend & Growth
INTERPRETATION:
From the above graph we can observe that Growth is showing more
performance than Dividends. In the month of Feb we can see that
Growth has fallen down in the last week and raised in first week
and the Dividend has also raised in the 1st week of Feb. Because of
declaring Dividends frequently, the performance of Dividend always
shows less when compared with othersNAV History Historical value
for a period of
5-Nov-2013 to 28-Jan-2014
HSBC MUTUAL FUND
HSBC Equity Fund Growth & Dividend
DATEDIVIDENDGROWTH
05-Nov-201344.25106.75
12-Nov-201342.82103.31
19-Nov-201345.02108.62
26-Nov-201343.96106.06
03-Dec-201345.27109.22
10-Dec-201346.10111.23
17-Dec-201345.20109.06
24-Dec-201346.12111.27
31-Dec-201347.68114.92
07-Jan-201448.95118.11
14-Jan-201448.40116.78
21-Jan-201441.49100.10
28-Jan-201442.67102.96
HSBC EQUITY FUND Dividend & Growth
INTERPRETATION:
The above graph there is little fluctuations in the values of
Dividends and Growth. But here we can see that Growth is again
performing well. It showed a less performance in the last week and
Dividend showed similar performance in all the weeks. Because of
declaring Dividends frequently, the performance of Dividend always
shows less when compared with others.
NAV History Historical value for a period of
5-Nov-2013 to 28-Jan-2014
ICICI PRUDENTIAL MUTUAL FUND
ICICI EMERGING STAR FUND Growth & Dividend
DATE DIVIDENDGROWTH
05-Nov-201324.1336.87
12-Nov-201323.6336.10
19-Nov-201325.8639.51
26-Nov-201325.1438.42
03-Dec-201326.0539.80
10-Dec-201327.8542.56
17-Dec-201328.0741.95
24-Dec-201328.0642.88
31-Dec-201330.1946.12
07-Jan-201431.1447.58
14-Jan-201429.6245.26
21-Jan-201423.2538.30
28-Jan-201423.5538.80
ICICI ICICI EQUITY FUND Dividend & Growth
INTERPRETATION:
From the above graph it indicates that the Growth and Dividend
are performing similar but in the month of Feb both of them have
declined .It had drastically fallen in the month of the Feb. From
the 1st week of Dec to 1st week of Feb both have increased and the
performance showed is well. Because of declaring Dividends
frequently, the performance of Dividend always shows less when
compared with others.
NAV History Historical value for a period of
ABN AMRO MUTUAL FUND
ABN AMRO Equity Fund Growth & Dividend
DATEDIVIDENDGROWTH
05-Nov-201322.4841.10
12-Nov-201321.6739.62
19-Nov-201323.0042.04
26-Nov-201322.2440.64
03-Dec-201323.0442.12
10-Dec-201323.7843.46
17-Dec-201323.2642.52
24-Dec-201317.6143.46
31-Dec-201318.5445.76
07-Jan-201419.3347.71
14-Jan-201418.7546.28
21-Jan-201415.2037.52
28-Jan-201415.5538.41
ABN AMRO EQUITY FUND Dividend & Growth
INTERPRETATION:
In this you can see that right from the starting month Growth is
showing good performance compare to Dividends. There are some
fluctuations in growth, but in dividends the values shown are
almost constant. Because of declaring Dividends frequently, the
performance of Dividend always shows less when compared with
others.
NAV History Historical NAV for a Period from 1-Dec-2013 to
28-Jan-2014NATIONAL BANKSCOPERATE BANKS
S B IUTIHSBCICICIABN AMRO
DATEDividendGrowthDividendGrowthDividendGrowthDividendGrowthDividendGrowth
5/11/201342.1442.1741.4244.8944.25106.7524.1336.8722.4841.10
12/11/201335.5740.4739.8843.2242.82103.3123.6336.1021.6739.62
19/11/201337.8443.0642.0845.6045.02108.6225.8639.5123.0042.04
26/11/201338.3343.6140.8044.2143.96106.0625.1438.4222.2440.64
3/12/201339.3144.7341.6345.1145.27109.2226.0539.8023.0442.12
10/12/201340.0645.5841.3045.2046.10111.2327.8542.5623.7843.46
17/12/201338.8044.1541.8545.3645.20109.0628.0741.9523.2642.52
24/12/201339.6845.1542.7346.3146.12111.2728.0642.8817.6143.46
31/12/201341.5247.2444.3048.0247.68114.9230.1946.1218.5445.76
7/1/201442.5148.3645.6849.5148.95118.1131.1447.5819.3347.71
14/01/201441.4647.1744.9148.6848.40116.7829.6245.2618.7546.28
21/01/201433.7443.2438.3041.5041.49100.1023.2538.3015.2037.52
28/01/201434.8939.7039.1042.3942.67102.9623.5538.8015.5538.41
INTERPETATION
Dividend of ABN AMRO is less compare to the dividend of
HSBC.
HSBC growth is large compared to SBI growth.
PERFORMANCE CHART OF DIVEDEND AND GROUTHINTERPRETATION:
The above graph clearly indicates the overall performance of
Equity Fund-Dividend and Growth of all the banks taken into
consideration. In SBI, from the 1st week of Dec both are almost
performing same but in 2nd week of Jan the performance of Growth
has drastically changed when compared to Dividends, and again the
performance showed is similar in rest of the weeks. In UTI, we can
observe that Growth is showing more performance than Dividends. In
the month of Feb we can see that Growth has fallen down in the last
week and raised in first week and the Dividend has also raised in
the 1st week of Feb. In HSBC, there are little fluctuations in the
values of Dividends and Growth. But here we can see that Growth is
again performing well. It showed a less performance in the last
week and Dividend showed similar performance in all the weeks. In
ICICI it indicates that the Growth and Dividend are performing
similar but in the month of Feb both of them have declined
.It had drastically fallen in the month of the Feb. From the 1st
week of Dec to 1st week of Feb both have increased and the
performance showed is well. In HDFC, right from the starting month
Growth is showing good performance compare to Dividends. There are
some fluctuations in Growth, but in dividends the values shown are
almost constant. Because of declaring Dividends frequently, the
performance of Dividend always shows less when compared with
others.
From the above graph it clearly indicates that the HDFC bank is
showing excellent performance when compared to other Banks. The
Corporate Banking sectors are showing good performance than
nationalized Banking sectors.
CHAPTER-V
FINDING & SUGGESTIONSFINDINGS:
1. From the table 1 (i.e.) SBI bank we can see that both
Dividend and Growth are similar to each other .where as growth has
been increased in the 2nd week of Jan with a value of 29.64%.
2. In UTI bank table we can see that growth has performed well
when compared to dividends. There was a slight fluctuation in the
values of dividends and growth.
3. When we see corporate banks (i e) HDFC the performance of
Growth is very good when compared to Dividends. This bank has been
shown a positive performance when compared to other banks were it
is good for investing in this bank.
4. When we see ICICI bank both the Dividends and Growth are
equal or similar to each other there is no change in them. In the
month of Feb it raised in the first week but it had a drastic fall
in all the following weeks.
5. When we see HSBC bank here again growth has been performed
well when we compare to dividends. This increase in the value has
been reached to certain extent and it has been declined in last
week of Feb.
SUGGESTIONS:
1. If we compare Nationalized and Corporate banks we can see
that corporate banks have performed well during these 3 months.
2. Nationalized banks performed well up to certain extent and it
values were declining further. This decline may cause due to
declaration of any dividends in those banks and so it was showing
low values.
3. In Nationalized banks we can see internally in Dividends SBI
bank has performed well and if wee see Growth UTI bank has
performed well.
4. In corporate banks we can see internally in Dividends and
Growth HDFC bank has performed relatively well when compare to
other banks. Both the values are high in this bank. It had reached
to a maximum height.
5. So its better for investors to invest in corporate sectors
rather than investing in Nationalized sector which gives them
maximum number of return for their investment.CONCLUSION:1.
Corporate sectors provide good services if we see through customer
point of view. They are very caring to their customers.
2. With the increase in infrastructure, technology, introduction
of various schemes and services, online trading its clear that any
one wants to invest will surely invest in corporate banks.
3. Now u can see most of them are opening their account in
corporate banks instead of nationalized banks this is due to extra
benefit & services which they are getting from that sector.
TIPS FOR MUTUAL FUND INVESTORS:
These are the few exact as regards investment in MFs taken from
the book with Marketing for the 90s given by the Wall Street. Check
your letter of offer of funds prospectus to guard yourselves
against any hidden fees.
Ensue that the funds track record is the same as that of the
current management.
Avoid mutual funds that charge exit fees at the back end door
(fees charged by MF from the unit holders at the time to redemption
of the units).
Buy the funds with no sale charged loads. (A load is a charge by
the fund when investor buys it is called the entry load or when he
sells is called the exit load).
If the charge is heavy by the mutual fund to discourage the
