PROJECT Finance for Mba 4

8/12/2019 PROJECT Finance for Mba 4

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RISK RETURN ANALYSIS

A PROJECT REPORT

Under the guidance Of

Mr. Prem Kumar

______________________________

Submitted by

PANKAJ ARORA

(Registration No: 51112116!

______________________________

in partial fulfillment o f the requirementfor the award of the degree

Of

MBA

IN

"#INAN$E %ANA&E%ENT'

&

Acknowledgement:Acknowledgment is the regards given to the peopleand organization who have helped you in completing the projectundertaken. Mainly it must consist of Acknowledgement towards theorganization you study and to the company where you have done yourproject followed by the people who have helped you in the process.

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PROJE$T REPORT

ON

RISK RETURN ANALYSIS AN$O%PARATI)E STUY O# RELIAN$E

%UTUAL #UN

(A *issertation s+,-itte* to .SIKKI% %ANIPAL

UNI)ERSITY/ In 0artia +i-ent o t3e re4+ire-ent or

*egree o %A (#inane!

Submitted by

Pankaj Arora

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ONA#IE $ERTI#I$ATE

This is to certify that the Report on Project Work tite! .Ris7 Ret+rn Ana8sis an*

$o-0arati9e St+*8 o Reiane %+t+a #+n*/ for Reiance "apita #sset $ana%eent

"opany 't!( is a )onafi!e recor! of the *ork !one )y

+tu!yin% in $aster of usiness #!inistration -thseester in .A% Inor-atis P9t Lt*

Instit+te o %anage-ent/, Ne* .ehi !urin% the year 2011/12(


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A$KNO;LE&E%ENT

I *ou! ike to epress y appreciation an! %ratitu!e to arious peope *ho hae share!

their aua)e tie an! a!e possi)e this project, throu%h their !irect or in!irect

cooperation(

$y first *or! of %ratitu!e is for Mr. Abhi!he" Sri#a!ta#a 3 Reations3i0

%anager($or0orate Sae!< RELIAN$E A%$< e3i y corporate %ui!e< for hiskin!

hep an! support an! his aua)e %ui!ance throu%hout y project(

I a aso thankfu to %s=%r >>>>>, y facuty %ui!e of .A% Ino-atis P9t

Lt*/, 14, 5, N(W(#( Punja)i a%h 6tn, "u) Roa!, Ne* .ehi, for his7her aua)e

%ui!ance( +he78e has hepe! e earn a)out the process, con!uctin% surey, anay9in% an!

presentin% the facts an! fi%ures(

I a aso thankfu to y respecte! facuties, !ear frien!s & coea%ues, *ho hae hepe! e

in eery possi)e *ays, supporte!e an! encoura%e! e to epore ne* !iensions(

%A ?T@SE%ESTER

-


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E$LARATION

I here )y !ecare that the project report entite!:

# Project Report on .Ris7 Ret+rn Ana8sis An* $o-0arati9e St+*8 O Reiane

%+t+a #+n*/ su)itte! in partia fufient of the re;uireent for the !e%ree of $aster of

usiness #!inistration to R6'I#N"6 "#PIT#' #++6T $#N#6$6NT "=$P#N is

y ori%ina *ork an! not su)itte! for the a*ar! of any other !e%ree, !ipoa, feo*ship,

or any other siiar tite or pri9es(

Nae: P#N?#J #R=R#

Pace: Ne* .ehi

.ate: 22/0@/2012

5


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TALE O# $ONTENT

+(No( Pa%e No(1 INTR=.A"TI=N 2@2 "=$P#N PR=BI'6 C =J6"TID6+ =B T86 +TA. 55

- "=$P6TIT=R+ =B R6'I#N"6$ATA#' BAN.

-0

5 R6+6#R"8 $6T8=.='= 5@@ .#T# #N#'+I+ #N.

INT6RPR6T#TI=NE5

E B6#TAR6+ & 6N6BIT+ E2C R6PR6+6NT PI6 "8#RT E44 BIN.IN+ #N. +A6+TI=N+ C0&C110 "=N"'A+I=N C2

11 'I$IT#TI=N 5C12 I'I=R#P8 C

@


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PRE#A$E

This is the a%e of technica up %ra!ation( Nothin% reains sae for a on% perio! eery thin%

chan%e *ith a certain span of tie( +o it is ust for eery or%ani9ation to put a )ir!s eye

ie* on itFs oer a functionin%(This report has )een prepare! !urin% practica trainin% of $aster of )usiness a!inistration

(%A! fro A% Ino-atis P9t Lt*< Instit+te o %anage-ent (The stu!ent of

$((#( essentiay re;uire! a practica trainin% of - to 5 *eeks in any or%ani9ation( It %ies

an opportunity to the stu!ent to test their ac;uire! kno*e!%e throu%h practica eperiences(

The successfu copetion of this project *as a uni;ue eperience for e )ecause )y isitin%

any pace an! interactin% arious person, I achiee! a )etter kno*e!%e a)out saes( The

eperience *hich I %aine! )y !oin% this project *as essentia at this turnin% point of y

carrier this project is )ein% su)itte! *hich content !etaie! anaysis of the research un!er

taken )y e(

The research proi!es an opportunity to the stu!ent to !eote his7her skis kno*e!%e an!

copetencies re;uire! !urin% the technica session(

The research has )een con!ucte! on the topic GRis7 Ret+rn Ana8sis An* $o-0arati9e

St+*8 O Reiane %+t+a #+n*H(

P'#"6/((

.#T6((

E


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EE$UTI)E SU%%ARY

The perforance eauation of utua fun! is a ita atter of concern to the fun! ana%ers,

inestors, an! researchers aike( The core copetence of the copany is to eet o)jectiesan! the nee!s of the inestors an! to proi!e optiu return for their risk( This stu!y tries to

fin! out the risk an! return aie! *ith the utua fun!s(

This project paper is se%ente! into three sections to epore the ink )et*een conentiona

su)jectie an! statistica approach of $utua Bun! anaysis( To start *ith, the first section

!eas *ith the intro!uctory part of the paper )y %iin% an oerie* of the $utua fun!

in!ustry an! copany profie(

This section aso taks a)out the theory of portfoio anaysis an! the !ifferent easures of

risk an! return use! for the coparison(

The secon! section !etais on the nee!, o)jectie, an! the iitations of the stu!y( It aso

!iscusses a)out the sources an! the perio! for the !ata coection( It aso !eas *ith the !ata

interpretation an! anaysis part *herein a the key easures reate! to risk an! return are

!one *ith the interpretation of the resuts(

In the thir! section, an attept is a!e to anay9e an! copare the perforance of the e;uity

utua fun!( Bor this purpose /aue, stan!ar! !eiation, an! risk a!juste! perforance

easures such as +harpe ratio, Treynor easure, Jenson #pha, an! Bea easure hae )eenuse!(

The portfoio anaysis of the seecte! fun! has )een !one )y the easure return for the

ho!in% perio!(

#t the en!, it iustrates the su%%estions an! fin!in%s )ase! on the anaysis !one in the

preious sections an! finay it !eas *ith concusion part(

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%UTUAL #UN O)ER)IE;

$utua fun! is an inestent copany that poos oney fro sa inestors an!

inests in a ariety of securities, such as stocks, )on!s an! oney arket instruents( $ostopen/en! $utua fun!s stan! rea!y to )uy )ack Kre!eeL its shares at their current net asset

aue, *hich !epen!s on the tota arket aue of the fun!Ms inestent portfoio at the

tie of re!eption( $ost open/en! $utua fun!s continuousy offer ne* shares to

inestors( It is aso kno*n as an open/en! inestent copany, to !ifferentiate it fro a

cose!/en! inestent copany(

$utua fun!s inest pooe! cash of any inestors to eet the fun!Ms state! inestent

o)jectie( $utua fun!s stan! rea!y to se an! re!ee their shares at any tie at the fun!Fs

current net asset aue: tota fun! assets !ii!e! )y shares outstan!in%(

4

IND6+T=

R

IND6+TT86IR$=N6

IND6+T IND#RI6T =B+T="?+7=N.+

$ATA#'BAN.+86$6+

$#R?6TKB'A"T

A#TI=N+L

PR=BIT7'=++ B=R$P=RTB='I= =BIND6+T$6NT

PR=BIT7'=++ BR=$IN.IDI.A#'


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In +ipe Wor!s, $utua fun! is a echanis for pooin% the resources )y issuin% units

to the inestors an! inestin% fun!s in securities in accor!ance *ith o)jecties as

!iscose! in offer !ocuent(Inestents in securities are sprea! across a *i!e cross/section of in!ustries an!

sectors an! thus the risk is re!uce!( .iersification re!uces the risk )ecause not a stocks

ay oe in the sae !irection in the sae proportion at the sae tie( $utua fun! issues

units t o the inestors in accor!ance *ith ;uantu of oney ineste! )y the(

Inestors of $utua fun! are kno*n as unit ho!ers( The profits or osses are share! )y the

inestors in proportion to their inestents( The $utua fun!s noray coe out *ith a

nu)er of schees *ith !ifferent inestent o)jecties *hich are aunche! fro tie to

tie(

In In!ia, # $utua fun! is re;uire! to )e re%istere! *ith +ecurities an! 6chan%e oa

r! of In!ia K+6IL *hich re%uates securities arkets )efore it can coect fun!s fro the

pu)ic(

In +hort , a $utua fun! is a coon poo of oney in to *hich inestors *ith

coon inestent o)jectie pace their contri)utions that are to )e ineste! in

accor!ance *ith the state ! inestent o)jectie of the schee( The inestent ana%er*ou! inest the oney coecte! fro the inestor in to assets that are !efine!7

peritte! )y the state! o)jectie of the schee( Bor eape, a n e;uity fun! *ou!

inest e;uity an! e;uity reate! instruents an! a !e)t fun! *ou! inest in )on!s,

!e)entures, %its etc( $utua fun! is a suita)e inestent for the coon a n a s it offers

an =porto unity to inest in a !iersifie!, professionay ana%e! )asket of securities at

a reatiey o* cost(

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@ISTORY O# %UTUAL #UNS (;ORL;IE!

When three oston securities eecuties pooe! their oney to%ether in 142- to create the

first utua fun!, they ha! no i!ea ho* popuar utua fun!s *ou! )ecoe(

The i!ea of pooin% oney to%ether for inestin% purposes starte! in 6urope in the i!/

1C00s( The first pooe! fun! in the A(+( *as create! in 1C4 for the facuty an! staff of

8arar! Aniersity( =n $arch 21st, 142- the first officia utua fun! *as )orn( It *as

cae! the $assachusetts Inestors Trust(

#fter one year, the $assachusetts Inestors Trust %re* fro 50,000 in assets in 142- to

42,000 in assets K*ith aroun! 200 shareho!ersL( In contrast, there are oer 10,000 utua

fun!s in the A(+( to!ay totain% aroun! E triion K*ith approiatey C iion in!ii!ua

inestorsL accor!in% to the Inestent "opany Institute(

The stock arket crash of 1424 so*e! the %ro*th of utua fun!s( In response to the stock

arket crash, "on%ress passe! the +ecurities #ct of 14 an! the +ecurities 6chan%e #ct of14-( These a*s re;uire that a fun! )e re%istere! *ith the +6" an! proi!e prospectie

inestors *ith a prospectus( The +6" KA(+( +ecurities an! 6chan%e "oissionL hepe!

create the Inestent "opany #ct of 14-0, *hich proi!es the %ui!eines that a fun!s

ust copy *ith to!ay(

With rene*e! confi!ence in the stock arket, utua fun!s )e%an to )osso( y the en! of

the 14@0s there *ere aroun! 2E0 fun!s *ith -C )iion in assets(

In 14E@, John "( o%e opene! the first retai in!e fun! cae! the Birst In!e Inestent

Trust( It is no* cae! the Dan%uar! 500 In!e fun!( In Noe)er of 2000 it )ecae the

ar%est utua fun! eer *ith 100 )iion in assets(

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@istor8 o In*ian %+t+a #+n* In*+str8

The history of $utua Bun!s in In!ia can )e )roa!y !ii!e! into - Phases:

1 #IRST P@ASE (1B6?C1BD!

The Anit Trust of In!ia KATIL *as esta)ishe! in the year 14@ )y passin% an

#ct in the Pariaent(

The ATI *as setup )y the Resere ank of In!ia KRIL an! functione! un!er

the Re%uatory an! #!inistratie contro of the RI(

The Birst schee in the history of utua fun!s *as ANIT +"86$6/@-,

*hich is popuary kno*n as A+/@-(

In 14EC, ATI *as !e/inke! fro RI( The In!ustria .eeopent ank ofIn!ia KI.IL took oer the Re%uatory an! #!inistratie contro(

#t the en! of the year 14CC, ATI ha! Rs(@,E007/ "rores of #ssets An!er

$ana%eent(

2 SE$ON P@ASE (1BDC1BB!

6ntry of Pu)ic +ector Bun!s(

In the year 14CE, pu)ic sector $utua Bun!s setup )y pu)ic sector )anks,'ife Insurance "orporation of In!ia K'I"L an! enera Insurance "orporation

of In!ia KI"L are cae in to eistence(

+tate ank of In!ia $utua Bun! *as the first non/ATI $utua Bun!( The

foo*in% are the non/ATI $utua Bun!s at initia sta%es(

+I $utua Bun! in June 14CE(

"an ank $utua Bun! in .ece)er 14CE(

'I" $utua Bun! in June 14C4(

Punja) Nationa ank $utua Bun! in #u%ust 14C4(

In!ian ank $utua Bun! in Noe)er 14C4(

ank of In!ia $utua Bun! in June 1440(

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I" $utua Bun! in .ece)er 1440(

ank of aro!a $utua Bun! in =cto)er 1442(

#t the en! of 144, the entire $utua Bun! In!ustry ha! #ssets un!er

$ana%eent of Rs(-E, 00-7/ "rores(

T@IR P@ASE (1BBC2FF!

6ntry of Priate +ector Bun!s / a *i!e choice to In!ian $utua Bun!

inestors(

In 144, the first $utua Bun! Re%uations cae into eistence, un!er *hich

a utua fun!s ecept ATI *ere to )e re%istere! an! %oerne!(

The 6rst*hie ?othari Pioneer Kno* er%e! *ith Brankin TepetonL *asthe first priate sector $utua Bun! Re%istere! in Juy 144(

In 144@, the 144 +ecurities 6chan%e oar! of In!ia K+6IL $utua Bun!s

Re%uations *ere su)stitute! )y a ore coprehensie an! reise! $utua

Bun! Re%uations(

The nu)er of $utua Bun! houses *ent on increasin%, *ith any forei%n

utua fun!s settin% up fun!s in In!ia(

In this tie, the $utua Bun! in!ustry has *itnesse! seera $er%ers

c;uisitions(

The ATI *ith Rs(--, 5-17/ "rores( =f #ssets An!er ana%eent *as *ay

ahea! of a other $utua Bun!s(

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The foo*in% *as the status at en! of Be)ruary 200:

N+-,er o s3e-es A-o+nt (in $rores!O0enCen*e* s3e-es 2

1

C2,@4

$oseCen*e* s3e-es 51 --4ETOTAL

2

D


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- "orporation of In!ia(

ATI is functionin% un!er an #!inistrator an!

un!er the Rues frae! )y

5 the oernent of In!ia an! !oes not coe

un!er the purie* of the

@ $utua Bun! Re%uations(

The ATI $utua Bun!s 'iite! is re%istere!

*ith +6I an! functions un!er

E the $utua Bun!s Re%uations(

With the )ifurcation of the 6rst*hie ATI, *ith

the settin% up of a ATI

C $utua Bun!, confirin% to the +6I $utua

Bun! Re%uations an! *ith

4 recent er%ers takin%

10

pace aon% !ifferent priate sector fun!s, the $utua Bun!

In!ustry has entere! its current phases of consoi!ation an!

%ro*th(

#t the en! of +epte)er 200-, there *ere 24

fun!s, *hich ana%e assets of

1 Rs(1, 5,10C7/ "rores un!er -21 !ifferentschees(

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#t the en! of $arch 200@, the status of $utua

fun! In!ustry *as:

No o s3e-es A-o+nt (in rores!

O0enCen*e* s3e-es -1

-

1,C5,444

$oseCen*e* s3e-es -@ E1,500

TOTAL ?6

F

2


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2

Proessio

na%anage-ent

Bun! ana%er un!er%oes throu%h arious research

*orks an! has )etter inestent ana%eent skis*hich ensure hi%her returns to the inestor than *hathe can ana%e on his o*n(

LessRis7

Inestors ac;uire a !iersifie! portfoio of securitieseen *ith a sa inestent in a $utua Bun!( Therisk in a !iersifie! portfoio is esser than inestin% inerey 2 or securities(

?

LoGTransat

ion$osts

.ue to the econoies of scae K)enefits of ar%erouesL, utua fun!s pay esser transaction costs(

These )enefits are passe! on to the inestors(

5Li4+i*it8

#n inestor ay not )e a)e to se soe of the shareshe! )y hi ery easiy an! ;uicky, *hereas units of autua fun! are far ore i;ui!(

6$3oieoS3e-es

$utua fun!s proi!e inestors *ith arious schees*ith !ifferent inestent o)jecties( Inestors hae theoption of inestin% in a schee hain% a correation)et*een its inestent o)jecties an! their o*nfinancia %oas( These schees further hae !ifferentpans7options

Trans0aren8

Bun!s proi!e inestors *ith up!ate! inforationpertainin% to the arkets an! the schees( # ateriafacts are !iscose! to inestors as re;uire! )y there%uator(

D#eHi,iit8

Inestors aso )enefit fro the conenience an!fei)iity offere! )y $utua Bun!s( Inestors cans*itch their ho!in%s fro a !e)t schee to an e;uityschee an! ice/ersa( =ption of systeatic Kat

re%uar interasL inestent an! *ith!ra*a is asooffere! to the inestors in ost open/en! schees(

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B Saet8

$utua Bun! in!ustry is part of a *e/re%uate!

inestent enironent *here the interests of theinestors are protecte! )y the re%uator( # fun!s arere%istere! *ith +6I an! copete transparency isforce!(

ISA)ANTA&E O# IN)ESTIN&

T@ROU&@ %UTUAL #UNS Ta,e:12

SNo

isa*9antage

Parti+ars

1

$osts$ontroNot int3e@an*s

o anIn9estor

Inestor has to pay inestent ana%eent fees an!fun! !istri)ution costs as a percenta%e of the aue ofhis inestents Kas on% as he ho!s the unitsL,

irrespectie of the perforance of the fun!(

2

No$+sto-ie*Portoios

The portfoio of securities in *hich a fun! inests is a!ecision taken )y the fun! ana%er( Inestors hae nori%ht to interfere in the !ecision akin% process of afun! ana%er, *hich soe inestors fin! as aconstraint in achiein% their financia o)jecties(

ii+

t8 inSeeting aS+ita,

$any inestors fin! it !ifficut to seect one option

fro the pethora of fun!s7schees7pans aaia)e(Bor this, they ay hae to take a!ice fro financiapanners in or!er to inest in the ri%ht fun! to achieetheir o)jecties(

1C


19/116

e #+n*S3e-e

SCHEMES OF MUTUAL

FUND

14


20/116

ASE ON T@EIRSTUR$TURE

=P6N 6N.6. BAN.+ "'=+6/6N.6. BAN.+

20

2( #+6. =N IND6+T$6NT


21/116

%UTUAL #UNS $AN E $LASSI#IE AS

#OLLO;:

ASE ON T@EIR STRU$TURE:

OPENCENE #UNS:

#n open/en! fun! is one that is aaia)e for su)scription a

throu%h the year( These !o not hae a fie! aturity(

Inestors can conenienty )uy an! se units at Net #sset

21

6OAIT BAN.+ #'#N"6. BAN.+

.6T BAN.+

.6DI.6N.

6OAIT

T86$#NTI"

+6"T=R BAN.

6OAIT

.6T

#RIT#6

B'=#TIN

B$P+BAN.

IN"=$6

AI'T BAN

'6OAI.

6'++

IN.6 BAN.+


22/116

Daue KQN#DQL reate! prices( The key feature of open/en!

schees is i;ui!ity(

$LOSECENE #UNS:

# cose!/en! fun! has a stipuate! aturity perio! *hich

%eneray ran%in% fro to 15 years( The fun! is open for

su)scription ony !urin% a specifie! perio!( Inestors can

inest in the schee at the tie of the initia pu)ic issue an!

thereafter they can )uy or se the units of the schee on the

stock echan%es *here they are iste!(

In or!er to proi!e an eit route to the inestors, soe cose/

en!e! fun!s %ie an option of sein% )ack the units to the

$utua Bun! throu%h perio!ic repurchase at N#D reate!

prices( +6I Re%uations stipuate that at east one of the t*o

eit routes is proi!e! to the inestor(

ASE ON T@EIR IN)EST%ENTOJE$TI)E:

EUITY #UNS: These fun!s inest in e;uities

an! e;uity reate! instruents( With fuctuatin% share

prices, such fun!s sho* oatie perforance, een

osses( 8o*eer, short ter fuctuations in the

arket, %eneray soothens out in the on% ter,

there)y offerin% hi%her returns at reatiey o*er

oatiity( #t the sae tie, such fun!s can yie!

%reat capita appreciation as, historicay, e;uities

22


23/116

hae outperfore! a asset casses in the on% ter(

8ence, inestent in e;uity fun!s shou! )econsi!ere! for a perio! of at east /5 years( It can )e

further cassifie! as:

1 INE #UNS/ In this case a key stock arket in!e,

ike +6 +ense or Nifty is tracke!( Their portfoio irrors

the )enchark in!e in ters of )oth coposition an!

in!ii!ua stock *ei%hta%es(

2 EUITY I)ERSI#IE #UNSC100 of the capitais ineste! in e;uities sprea!in% across !ifferent sectors an!

stocks(

I)IEN YIEL #UNSCit is siiar to the e;uity/

!iersifie! fun!s ecept that they inest in copanies

offerin% hi%h !ii!en! yie!s(

? T@E%ATI$ #UNSC Inest 100 of the assets in

sectors *hich are reate! throu%h soe thee(

e(%( /#n infrastructure fun! inests in po*er, construction,

ceents sectors etc(

5 SE$TOR #UNSC IND6+T 100 of the capita in a

specific sector( e(%( / # )ankin% sector fun! *i inest in

)ankin% stocks(

@(ELSS/ 6;uity 'inke! +ain% +chee proi!es ta )enefit

to the inestors(

ALAN$E #UN : Their inestent portfoio

incu!es )oth !e)t an! e;uity( #s a resut, on the risk/

2


24/116

return a!!er, they fa )et*een e;uity an! !e)t

fun!s( aance! fun!s are the i!ea utua fun!sehice for inestors *ho prefer sprea!in% their risk

across arious instruents( Boo*in% are )aance!

fun!s casses:

1 ETCORIENTE #UNS CInestent )eo* @5 in

e;uities(

2 EUITYCORIENTE #UNS CInest at east @5 in

e;uities, reainin% in !e)t(

ET #UN :They inest ony in !e)t instruents,

an! are a %oo! option for inestors aerse to i!ea of

takin% risk associate! *ith e;uities( Therefore, they

inest ecusiey in fie!/incoe instruents ike

)on!s, !e)entures, oernent of In!ia securitiesS

an! oney arket instruents such as certificates of

!eposit K".L, coercia paper K"PL an! caoney( Put your oney into any of these !e)t fun!s

!epen!in% on your inestent hori9on an! nee!s(

1 LIUI #UNSC These fun!s inest 100 in

oney arket instruents, a ar%e portion )ein%

ineste! in ca oney arket(

2 &ILT #UNS STC T86 inest 100 of theirportfoio in %oernent securities of an! T/)is(

2-


25/116

#LOATIN& RATE #UNS CInest in short/ter

!e)t papers( Boaters inest in !e)t instruents,*hich hae aria)e coupon rate(

? ARITRA&E #UNC They %enerate incoe

throu%h ar)itra%e opportunities !ue to iss/pricin%

)et*een cash arket an! !eriaties arket( Bun!s

are aocate! to e;uities, !eriaties an! oney

arkets( 8i%her proportion Karoun! E5L is put in

oney arkets, in the a)sence of ar)itra%eopportunities(

5 &ILT #UNS LTC They inest 100 of their

portfoio in on%/ter %oernent securities(

6 IN$O%E #UNS LTCTypicay, such fun!s inest

a ajor portion of the portfoio in on%/ter !e)t

papers(

%IPSC$onthy Incoe Pans hae an eposure of

E0/40 to !e)t an! an eposure of 10/0 to

e;uities(

D #%PSCfie! onthy pans inest in !e)t papers

*hose aturity is in ine *ith that of the fun!(

@O; ARE #UNS I##ERENT IN TER%S O#

T@EIR RISK PRO#ILE:

Ta,e:1

25


26/116

6;uity Bun!s 8i%h ee of return, )ut has a hi%h ee of risk too.e)t fun!s Returns coparatiey ess risky than e;uity fun!s'i;ui! an! $oney

$arket fun!s

Proi!e sta)e )ut o* ee of return

15 IN)EST%ENT STRATE&IES

1 SYSTE%ATI$ IN)EST%ENT PLAN: An!er this, a

fie! su is ineste! each onth on a fie! !ate of a onth(

Payent is a!e throu%h post/!ate! che;ues or !irect !e)it

faciities( The inestor %ets fe*er units *hen the N#D is

hi%h an! ore units *hen the N#D is o*( This is cae! as

the )enefit of Rupee "ost #era%in% KR"#L

2 SYSTE%ATI$ TRANS#ER PLAN: An!er this, an

inestor inest in !e)t/oriente! fun! an! %ie instructions to

transfer a fie! su, at a fie! intera, to an e;uity schee

of the sae utua fun!( SYSTE%ATI$ ;IT@RA;AL PLAN: if soeone

*ishes to *ith!ra* fro a utua fun! then he can *ith!ra*

a fie! aount each onth(

$.%. OR&A'(SAT(O' O) MUTUA* )U'+

2@


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#ig+re:1?

T@E STRU$TURE $ONSISTS O#:

SPONSOR

+ponsor is the person *ho actin% aone or in co)ination

*ith another )o!y corporate esta)ishes a utua fun!(

+ponsor ust contri)ute at east -0 of the net *orth of theInestent ana%e! an! eet the ei%i)iity criteria

prescri)e! un!er the +ecurities an! 6chan%e oar! of In!ia

K$utua Bun!L Re%uations, 144@( The sponsor is not

responsi)e or ia)e for any oss or shortfa resutin% fro

the operation of the +chees )eyon! the initia contri)ution

a!e )y it to*ar!s settin% up of the $utua Bun!(

TRUSTThe $utua Bun! is constitute! as a trust in accor!ance *ith

the proisions of the In!ian Trusts #ct, 1CC2 )y the +ponsor(

2E


28/116

The trust !ee! is re%istere! un!er the In!ian Re%istration

#ct, 140C(TRUSTEE

Trustee is usuay a copany Kcorporate )o!yL or a oar! of

Trustees K)o!y of in!ii!uasL( The ain responsi)iity of

the Trustee is to safe%uar! the interest of the unit ho!ers an!

ensure that the #$" functions in the interest of inestors

an! in accor!ance *ith the +ecurities an! 6chan%e oar! of

In!ia K$utua Bun!sL Re%uations, 144@, the proisions of

the Trust .ee! an! the =ffer .ocuents of the respectie

+chees( #t east 27r! !irectors of the Trustee are

in!epen!ent !irectors *ho are not associate! *ith the

+ponsor in any anner(

ASSET %ANA&E%ENT $O%PANY (A%$!

The #$" is appointe! )y the Trustee as the Inestent

$ana%er of the $utua Bun!( The #$" is re;uire! to )e

approe! )y the +ecurities an! 6chan%e oar! of In!iaK+6IL to act as an asset ana%eent copany of the

$utua Bun!( #t east 50 of the !irectors of the #$" are

in!epen!ent !irectors *ho are not associate! *ith the

+ponsor in any anner( The #$" ust hae a net *orth of

at east 10 cores at a ties(

RE&ISTRAR AN TRANS#ER A&ENTThe #$" if so authori9e! )y the Trust .ee! appoints the

Re%istrar an! Transfer #%ent to the $utua Bun!( The

2C


29/116

Re%istrar processes the appication for, re!eption

re;uests an! !ispatches account stateents to the unitho!ers( The Re%istrar an! Transfer a%ent aso han!es

counications *ith inestors an! up!ates inestor recor!s(

ASSET U'+ER MA'A&EME'T

Ta)e1(-#++6T AN.6R $#N#6$6NT =B T=P #$",+ as on Jun 30

!00"

$utua Bun! Nae No( of

schees

"orpus KRs("roresL

Reiance $utua Bun! 2@ 10C,2(@

8.B" $utua Bun! 202 EC,14E(40

I"I"I Pru!entia $utua Bun! 25 E0,1@4(-@

ATI $utua Bun! 20E @E,4EC(14

ira +un 'ife $utua Bun! 2C 5@,2C2(CE

+I $utua Bun! 10 -,0@1(0-

'I" $utua Bun! E0 2,-1-(42

?otak $ahin!ra $utua Bun! 12- 0,C(02

Brankin Tepeton $utua Bun! 141 25,-E2(C5

I.B" $utua Bun! 1@- 21,@E@(24

Tata $utua Bun! 1E5 21,222(C1

The %raph in!icates the %ro*th of assets oer the years(

24
http://www.mutualfundsindia.com/amc_snapshot.asp?amc_name=AM025http://www.mutualfundsindia.com/amc_snapshot.asp?amc_name=AM041http://www.mutualfundsindia.com/amc_snapshot.asp?amc_name=AM024http://www.mutualfundsindia.com/amc_snapshot.asp?amc_name=AM045http://www.mutualfundsindia.com/amc_snapshot.asp?amc_name=AM005http://www.mutualfundsindia.com/amc_snapshot.asp?amc_name=AM026http://www.mutualfundsindia.com/amc_snapshot.asp?amc_name=AM021http://www.mutualfundsindia.com/amc_snapshot.asp?amc_name=AM033http://www.mutualfundsindia.com/amc_snapshot.asp?amc_name=AM037http://www.mutualfundsindia.com/amc_snapshot.asp?amc_name=AM040http://www.mutualfundsindia.com/amc_snapshot.asp?amc_name=AM034http://www.mutualfundsindia.com/amc_snapshot.asp?amc_name=AM025http://www.mutualfundsindia.com/amc_snapshot.asp?amc_name=AM041http://www.mutualfundsindia.com/amc_snapshot.asp?amc_name=AM024http://www.mutualfundsindia.com/amc_snapshot.asp?amc_name=AM045http://www.mutualfundsindia.com/amc_snapshot.asp?amc_name=AM005http://www.mutualfundsindia.com/amc_snapshot.asp?amc_name=AM026http://www.mutualfundsindia.com/amc_snapshot.asp?amc_name=AM021http://www.mutualfundsindia.com/amc_snapshot.asp?amc_name=AM033http://www.mutualfundsindia.com/amc_snapshot.asp?amc_name=AM037http://www.mutualfundsindia.com/amc_snapshot.asp?amc_name=AM040http://www.mutualfundsindia.com/amc_snapshot.asp?amc_name=AM034


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#ig+re:15

0


31/116

ISTRIUTION $@ANNELS:

$utua fun!s posses a ery stron% !istri)ution channe so

that the utiate custoers !oesnFt face any !ifficuty in the

fina procureent( The arious parties inoe! in

!istri)ution of utua fun!s are:

1( IRE$T %ARKETIN& Y T@E A%$s: the fors

cou! )e o)taine! fro the #$"s !irecty( The inestors can

approach to the #$"s for the fors( soe of the top #$"s

of In!ia areS Reiance ,ira +unife, Tata, +I a%nu,

?otak $ahin!ra, 8.B", +un!ara, I"I"I, $irae #ssets,

"anara Ro)eco, 'otus In!ia, 'I", ATI etc( *hereas forei%n

#$"s incu!e: +tan!ar! "hartere!, Brankin Tepeton,Bi!eity, JP $or%an, 8+", .+P $eri 'ynch, etc(

2 ROKER= SU ROKER ARRAN&E%ENTS: the

#$"s can siutaneousy %o for )roker7su)/)roker to

popuari9e their fun!s( #$"s can enjoy the a!anta%e of

ar%e net*ork of these )rokers an! su) )rokers(

( INI)IUAL A&ENTS< ANKS< N#$: inestors

can procure the fun!s throu%h in!ii!ua a%ents, in!epen!ent)rokers, )anks an! seera non/ )ankin% financia

corporations too, *hicheer he fin!s conenient for hi(

1


32/116

INTROU$TION

The stocks hae risk, *hich coprises of either uni;ue risk

aso cae! as !iersifia)e risk or unsysteatic risk an!

arket risk aso cae! as non/!iersifia)e risk

=r systeatic( There are fe* pro)es, *hich reea the

necessity to anay9e the risk an! return of the $BFs( *e canneither pre!ict the risk inoe! nor the future perforance

of the stock( $any $BFs schees hae not perfore! *e

!ue to *hich inestor hae incurre! osses( The oeent of

+6/100 in!e !epen!s on the perforance of the

copanyFs stock( If a particuar in!ustry is not in a )ooin%

sta%e, then the stock of copanies reate! to that in!ustry

*ou! )e affecte!( ien the )ack%roun! of risk an!uncertainty a)out inestent in utua fun!, present stu!y

2


33/116

tries to fin! out risk return on Reiance utua fun! in

coparison *ith +6/100 in!e has )een un!er taken(There are a ot of inestent aenues aaia)e to!ay in the

financia arket for an inestor *ith an inest a)e surpus(

8e can inest in ank .eposits, "orporate .e)entures, an!

on!s *here there is o* risk )ut o* return( 8e ay inest

in +tock of copanies *here the risk is hi%h an! the returns

are aso proportionatey hi%h( The recent tren!s in the +tock

$arket hae sho*n that an aera%e retai inestor a*ays

ost *ith perio!ic )earish ten!s( Peope )e%an optin% for

portfoio ana%ers *ith epertise in stock arkets *ho

*ou! inest on their )ehaf( Thus *e ha! *eath

ana%eent serices proi!e! )y any institutions(

8o*eer they proe! too costy for a sa inestor( These

inestors hae foun! a %oo! sheter *ith the utua fun!s(

'ike ost !eeope! an! !eeopin% countries the utua

fun! cut has )een catchin% on in In!ia( The reasons for thisinterestin% occurrence are:

1( $utua fun!s ake it easy an! ess costy for inestors

to satisfy their nee! for capita %ro*th, incoe an!7or

incoe preseration(

2( $utua fun! )rin%s the )enefits of !iersification an!

oney ana%eent to the in!ii!ua inestor, proi!in% aopportunity for financia success that *as once aaia)e

ony to a seect fe*(


34/116

@ISTORY

Anit Trust of In!ia is the first $utua Bun! set up un!er a

separate act, ATI #ct in 14@, an! starte! its operations in

14@- *ith the issue of units un!er the schee A+/@-1( In

14EC ATI *as !einke! fro the RI an! In!ustria

.eeopent ank of In!ia KI.IL took oer the

Re%uatory an! a!inistratie contro in pace of RI(

In the year 14CE Pu)ic +ector )anks ike +tate ank of

In!ia, Punja) Nationa ank, In!ian ank, ank of In!ia,

an! ank of aro!a hae set up utua fun!s(

#part fro these a)oe entione! )anks 'ife Insurance

"orporation 'I"U an! enera Insurance "orporation I"U

too hae set up utua fun!( 'I" esta)ishe! its utua fun!in June 14C4(*hie I" ha! set up its utua fun! in

.ece)er 1440(The utua fun! in!ustry ha! assest un!er

ana%eent of Rs( -E,00- crores(

With the entry of Priate +ector Bun!s a ne* era has starte!

in $utua Bun! In!ustry e(%:/ Principa $utua Bun!(U

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35/116

%+t+a #+n* Reg+ations

The secon! is the ATI $utua Bun! 't!, sponsore! )y +I,

PN, = an! 'I"( It is re%istere! *ith +6I an! functions

un!er the $utua Bun! Re%uations( With the )ifurcation of

the erst*hie ATI *hich ha! in $arch 2000 ore than

Rs(E@,000 crores of assets un!er ana%eent an! *ith thesettin% up of a ATI $utua Bun!, conforin% to the +6I

$utua Bun! Re%uations, an! *ith recent er%ers takin%

pace aon% !ifferent priate sector fun!s, the utua fun!

in!ustry has entere! its current phase of consoi!ation an!

%ro*th( #s at the en! of +epte)er, 200-, there *ere 24

fun!s, *hich ana%e assets of Rs(1510C crores un!er -21

schees(

5


36/116

T80es o %+t+a #+n*s S3e-e in In*ia

Wi!e ariety of $utua Bun! +chees eist to cater to the

nee!s such as financia position, risk toerance an! return

epectations etc( The ta)e )eo* %ies an oerie* into the

eistin% types of schees in the In!ustry(

y +tructure

@


37/116

o =pen / 6n!e! +chees

o "ose / 6n!e! +cheeso Intera +chees

y Inestent =)jectie

o ro*th +chees

o Incoe +chees

o aance! +chees

o $oney $arket +chees

=ther +chees

o Ta +ain% +chees

o +pecia +chees

In!e +chees

+ector +pecfic

#eat+res reate* -+t+a +n*s

E
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Reiance *as the first fun! house to aunch sector

fun!s *ith fei)iity to inest in a ran%e of 0 to

100 in either e;uity or !e)t instruents(

$utua fun! inestents inke! to an #T$7!e)it

car! a Reiance innoation In!iaFs first on%/short

fun! coes fro Reiance $utua Bun! (

#s at 1st $ay 200C, ore than @(@ iion peope

ha! ineste! in Reiance $utua Bun!Sthe

inestents coprise! 1@ of the countryFs entire

utua fun!(

C


39/116

%UTUAL #UN $O%PANIES IN INIA

The concept of utua fun!s in In!ia !ates )ack to the year

14@( The era )et*een 14@ an! 14CE arke! the eistence

of ony one utua fun! copany in In!ia *ith Rs( @E)n

assets un!er ana%eent K#A$L, )y the en! of its

onopoy era, the Anit Trust of In!ia KATIL( y the en! of

the C0s !eca!e, fe* other utua fun! copanies in In!ia

took their position in utua fun! arket( The ne* entries of

utua fun! copanies in In!ia *ere +I $utua Bun!,

"anra )ank $utua Bun!, Punja) Nationa ank $utua

Bun!, In!ian ank $utua Bun!, ank of In!ia $utua Bun!(

The succee!in% !eca!e sho*e! a ne* hori9on in In!ian

utua fun! in!ustry( y the en! of 144, the tota #A$ of

the in!ustry *as Rs( -E0(0- )n( The priate sector fun!s

starte! penetratin% the fun! faiies( In the sae year the

first $utua Bun! Re%uations cae into eistence *ith re/re%isterin% a utua fun!s ecept ATI( The re%uations

*ere further %ien a reise! shape in 144@(

4


40/116

$O%PITITORS O# RELIAN$E %UTUAL

#UN

AN A%RO %UTUAL #UN

#N #$R= $utua Bun! *as setup on #pri 15, 200- *ith#N #$R= Trustee KIn!iaL Pt( 't!( #s the Trustee

"opany( The #$", #N #$R= #sset $ana%eent

-0


41/116

KIn!iaL 't!( *as incorporate! on Noe)er -, 200(

.eutsche ank # is the custo!ian of #N #$R= $utuaBun!(

IRLA SUN LI#E %UTUAL #UN

ira +un 'ife $utua Bun! is the joint enture of #!itya

ira roup an! +un 'ife Binancia( +un 'ife Binancia is a

%o)a or%ani9ation eoe! in 1CE1 an! is )ein% represente!

in "ana!a, the A+, the Phiippines, Japan, In!onesia an!

eru!a apart fro In!ia( ira +un 'ife $utua Bun!

foo*s a conseratie on%/ter approach to inestent(

Recenty it crosse! #A$ of Rs( 10,000 crores(

ANK O# AROA %UTUAL #UN (O %UTUAL

#UN!

ank of aro!a $utua Bun! or = $utua Bun! *as

setup on =cto)er 0, 1442 un!er the sponsorship of ank of

aro!a( = #sset $ana%eent "opany 'iite! is the

#$" of = $utua Bun! an! *as incorporate! on

Noe)er 5, 1442( .eutsche ank # is the custo!ian(

@#$ %UTUAL #UN

-1


42/116

8.B" $utua Bun! *as setup on June 0, 2000 *ith t*o

sponsorers naey 8ousin% .eeopent Binance"orporation 'iite! an! +tan!ar! 'ife Inestents 'iite!(

8+" $utua Bun! 8+" $utua Bun! *as setup on $ay

2E, 2002 *ith 8+" +ecurities an! "apita $arkets KIn!iaL

Priate 'iite! as the sponsor( oar! of Trustees, 8+"

$utua Bun! acts as the Trustee "opany of 8+" $utua

Bun!(

IN& )YSYA %UTUAL #UN

IN Dysya $utua Bun! *as setup on Be)ruary 11, 1444

*ith the sae nae! Trustee "opany( It is a joint enture

of Dysya an! IN( The #$", IN Inestent $ana%eent

KIn!iaL Pt( 't!( Was incorporate! on #pri @, 144C(

PRUENTIAL I$I$I %UTUAL #UN

The utua fun! of I"I"I is a joint enture *ith Pru!entia

Pc( of #erica, one of the ar%est ife insurance copanies

in the A+ of #( Pru!entia I"I"I $utua Bun! *as setup on

1th of =cto)er,144 *ith t*o sponsorers, Pru!entia Pc(

an! I"I"I 't!( The Trustee "opany fore! is Pru!entia

I"I"I Trust 't!( an! the #$" is Pru!entia I"I"I #sset$ana%eent "opany 'iite! Incorporate! on 22n! of

June, 144(

-2


43/116

SA@ARA %UTUAL #UN

+ahara $utua Bun! *as set up on Juy 1C, 144@ *ith +ahara

In!ia Binancia "orporation 't!( #s the sponsor( +ahara

#sset $ana%eent "opany Priate 'iite! incorporate!

on #u%ust 1, 1445 *orks as the #$" of +ahara $utua

Bun!( The pai!/up capita of the #$" stan!s at Rs 25(C

crore(

STATE ANK O# INIA %UTUAL #UN

+tate ank of In!ia $utua Bun! is the first ank sponsore!

$utua Bun! to aunch offshor fun!, the In!ia $a%nu Bun!

*ith a corpus of Rs( 225 cr( approiatey( To!ay it is the

ar%est ank sponsore! $utua Bun! in In!ia( They hae

area!y aunche! 5 +chees out of *hich 15 hae area!y

yie!e! han!soe returns to inestors( +tate ank of In!ia$utua Bun! has ore than Rs( 5,500 "rores as #A$( No*

-


44/116

it has an inestor )ase of oer C 'akhs sprea! oer 1C

schees(

TATA %UTUAL #UN

Tata $utua Bun! KT$BL is a Trust un!er the In!ian Trust

#ct, 1CC2( The sponsorers for Tata $utua Bun! are Tata

+ons 't!(, an! Tata Inestent "orporation 't!( The

inestent ana%er is Tata #sset $ana%eent 'iite! an!

its Tata Trustee "opany Pt( 'iite!( Tata #sset

$ana%eent 'iite!Ms is one of the fastest in the country

*ith ore than Rs( E,E0 crores Kas on #pri 0, 2005L of

#A$(

KOTAK %A@INRA %UTUAL #UN

?otak $ahin!ra #sset $ana%eent "opany K?$#$"L isa su)si!iary of ?$'( It is presenty hain% ore than 1,

44,C1C inestors in its arious schees( ?$#$" starte! its

operations in .ece)er 144C( ?otak $ahin!ra $utua Bun!

offers schees caterin% to inestors *ith aryin% risk /

return profies( It *as the first copany to aunch !e!icate!

%it schee inestin% ony in %oernent securities(

UNIT TRUST O# INIA %UTUAL #UN

--


45/116

ATI #sset $ana%eent "opany Priate 'iite!,

esta)ishe! in Jan 1-, 200, ana%es the ATI $utua Bun!*ith the support of ATI Trustee "opany Priate 'iite!(

ATI #sset $ana%eent(

STANAR $@ARTERE %UTUAL #UN

+tan!ar! "hartere! $utua Bun! *as set up on $arch 1,

2000 sponsore! )y +tan!ar! "hartere! ank( The Trustee is

+tan!ar! "hartere! Trustee "opany Pt( 't!( +tan!ar!

"hartere! #sset $ana%eent "opany Pt( 't!( is the

#$" *hich *as incorporate! *ith +6I on .ece)er

20,1444(

#RANKLIN TE%PLETON INIA %UTUAL #UN

The %roup, Brankin Tepeton Inestents is a "aifornia

KA+#L )ase! copany *ith a %o)a #A$ of A+ -04(2 )n(

Kas of #pri 0, 2005L( It is one of the ar%est financia

serices %roups in the *or!( Inestors can )uy or se the

$utua Bun! throu%h their financia a!isor or throu%h ai

or throu%h their *e)site( They hae =pen en! .iersifie!

6;uity schees, =pen en! +ector 6;uity schees, =pen en!8y)ri! schees, =pen en! Ta +ain% schees, =pen en!

-5


46/116

Incoe an! 'i;ui! schees, "ose! en! Incoe schees

an! =pen en! Bun! of Bun!s schees to offer(

%OR&AN STANLEY %UTUAL #UN INIA

$or%an +taney is a *or!*i!e financia serices copany

an! itFs ea!in% in the arket in securities, inestent

ana%eent an! cre!it serices( $or%an +taney Inestent

$ana%eent K$I+$L *as esta)ishe! in the year 14E5( It

proi!es custoi9e! asset ana%eent serices an!

pro!ucts to %oernents, corporations, pension fun!s an!

non/profit or%ani9ations( Its serices are aso eten!e! to

hi%h net *orth in!ii!uas an! retai inestors( In In!ia it is

kno*n as $or%an +taney Inestent $ana%eent Priate

'iite! K$+I$ In!iaL an! its #$" is $or%an +taney

$utua Bun! K$+$BL( This is the first cose en! !iersifie!

e;uity schee serin% the nee!s of In!ian retai inestorsfocusin% on a on%/ter capita appreciation(

ES$ORTS %UTUAL #UN

6scorts $utua Bun! *as setup on #pri 15, 144@ *ith6scorts Binance 'iite! as its sponsor( The Trustee

"opany is 6scorts Inestent Trust 'iite!( ItFs #$"

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*as incorporate! on .ece)er 1, 1445 *ith the nae

6scorts #sset $ana%eent 'iite!(

ALLIAN$E $APITAL %UTUAL #UN

#iance "apita $utua Bun! *as setup on .ece)er 0,

144- *ith #iance "apita $ana%eent "orp( of .ea*are

KA+#L as sponsore!( The Trustee is #"#$ Trust "opany

Pt( 't!( an! #$", the #iance "apita #sset $ana%eent

In!ia KPtL 't!( *ith the corporate office in $u)ai(

enchark $utua Bun!

enchark $utua Bun! *as setup on June 12, 2001 *ith

Niche Binancia +erices Pt( 't!( as the sponsore! an!

enchark Trustee "opany Pt( 't!( as the Trustee

"opany( Incorporate! on =cto)er 1@, 2000 an!

hea!;uartere! in $u)ai, enchark #sset $ana%eent

"opany Pt( 't!( is the #$"(

$ANANK %UTUAL #UN

"an)ank $utua Bun! *as setup on .ece)er 14, 14CE *ith

"anara ank actin% as the sponsor( "an)ank Inestent

$ana%eent +erices 't!( incorporate! on $arch 2, 144 is

the #$"( The "orporate =ffice of the #$" is in $u)ai(

$@OLA %UTUAL #UN

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"hoa $utua Bun! un!er the sponsorship of"hoaan!aa Inestent & Binance "opany 't!( *as

setup on January , 144E( "hoaan!aa Trustee "o( 't!(

is the Trustee "opany an! #$" is "hoaan!aa #$"

'iite!(

LI$ %UTUAL #UN

'ife Insurance "orporation of In!ia set up 'I" $utua Bun!

on 14th June 14C4( It contri)ute! Rs( 2 "rores to*ar!s the

corpus of the Bun!( 'I" $utua Bun! *as constitute! as a

Trust in accor!ance *ith the proisions of the In!ian Trust

#ct, 1CC2( ( The "opany starte! its )usiness on 24th #pri

144-( The Trustees of 'I" $utua Bun! hae appointe!Jeean ia +ahayo% #sset $ana%eent "opany 't! as

the Inestent $ana%ers for 'I" $utua Bun!(

&I$ %UTUAL #UN

I" $utua Bun!, sponsore! )y enera Insurance

"orporation of In!ia KI"L, a oernent of In!iaun!ertakin% an! the four Pu)ic +ector enera Insurance

"opanies , i9( Nationa Insurance "o( 't! KNI"L, The

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Ne* In!ia #ssurance "o( 't!( KNI#L, The =rienta

Insurance "o( 't! K=I"L an! Anite! In!ia Insurance "o('t!( KAIIL an! is constitute! as a Trust in accor!ance *ith

the proisions of the In!ian Trusts #ct, 1CC2( Buture of

$utua Bun!s in In!ia y .ece)er 200-, In!ian utua

fun! in!ustry reache! Rs 1, 50,5E crore( It is estiate! that

)y 2010 $arch/en!, the tota assets of a sche!ue!

coercia )anks shou! )e Rs -0, 40,000 crore( The annua

coposite rate of %ro*th is epecte! 1(- !urin% the rest

of the !eca!e( In the ast 5

years *e hae seen annua %ro*th rate of 4( #ccor!in% to

the current %ro*th rate, )y year 2010, utua fun! assets *i

)e !ou)e(

$O%PANY PRO#ILE O# RELIAN$E

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AOUT RELIAN$E $APITAL ASSET

%ANA&E%ENT LT

Reiance "apita #sset $ana%eent 'iite! K R"#$L,

a copany re%istere! un!er the "opanies #ct, 145@ *as

appointe! to act as the Inestent $ana%er of Reiance

$ATA#' BAN.( (

Reiance "apita #sset $ana%eent 'iite! KR"#$L *as

approe! as the #sset $ana%eent "opany for the $utua

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Bun! )y +6I i!e their etter no II$#RP712@-745 !ate!

June 0, 1445( The $utua Bun! has entere! into anInestent $ana%eent #%reeent KI$#L *ith R"#$

!ate! $ay 12, 1445 an! *as aen!e! on #u%ust 12, 144E in

ine *ith +6I K$utua Bun!sL Re%uations, 144@( Pursuant

to this I$#, R"#$ is authori9e! to act as Inestent

$ana%er of Reiance $utua Bun!( The net *orth of the

#sset $ana%eent "opany incu!in% preference shares as

on +epte)er 0, 200E is Rs(152(02 crores( Reiance $utua

Bun! has aunche! thirty/fie +chees ti !ate, naey:

QReiance $utua Bun! schees are ana%e! )y Reiance

"apita #sset $ana%eent 'iite!( # su)si!iary of

Reiance "apita 'iite!, *hich ho!s 4(E of the pai!/up

capita of R"#$, the )aance pai! up capita )ein% he! )y

inority shareho!ers(Q

Reiance "apita #sset $ana%eent 'iite! KR"#$L *as

approe! as the #sset $ana%eent "opany for the $utua

Bun! )y +6I i!e their etter no II$#RP712@-745 !ate!

June 0, 1445( The $utua Bun! has entere! into an

Inestent $ana%eent #%reeent KI$#L *ith R"#$

!ate! $ay 12, 1445 an! *as aen!e! on #u%ust 12, 144E in

ine *ith +6I K$utua Bun!sL Re%uations, 144@( Pursuantto this I$#, R"#$ is authori9e! to act as Inestent

$ana%er of Reiance $utua Bun!( The net*orth of the

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#sset $ana%eent "opany as on $arch 1, 200C is Rs

E04(4 crores( Reiance $utua Bun! has aunche! BortyThree +chees ti !ate, naey:

This %roup !oinates this key area in the financia sector(

This e%a )usiness houses sho* that it has assets un!er

ana%eent of Rs( 40,4C croreKA+ 22(E )iionL an! an

inestor )ase of oer@(@ iion

K+ource:***(afiin!ia(coL(ReianceFs utua fun!

schees are ana%e! )y Reiance "apita #sset

$ana%eent 'iite!KR"#$L, a su)si!iary of Reiance

"apita 'iite!, *hich ho!s 4(E of the pai!/up capita

of R"#$(

The copany notche! up a heathy %ro*th of Rs( 1@,5-

croreKA+ -(04 )iionLin assets un!er ana%eent in

Be)ruary200C an! hepe! prope the tota in!ustry/*i!e#A$ to Rs( 5@5,-54 crore KA+ 1-1(@ )iionLK+ource:

in!iainestents(coL( # sharp rise infie! aturity pans

KB$PsL an! coection ofRs( E000 crore KA+ 1(E5 )iionL

throu%h ne*foun! offers KNB=sL create! this sur%e( In #A

rankin%s, Reiance continues to )e in the nu)er one spot(

RELIAN$E %UTUAL #UN

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Reiance utua fun!, proote! )y the #ni .hiru)hai

#)ani K#.#L %roup, is one of the fastest %ro*in% utua

fun!s in In!ia hain% !ou)e! its assets oer the ast one

year( In $arch, 200@, the Reiance utua fun! eer%e! as

the ar%est priate sector fun! house in the country,

oertakin% Pru!entia I"I"I *hich has )een ho!in% that

position for any years(

The sponsor of the fun! is Reiance "apita 'iite!, the

financia serices ar of #.#( Reiance "apita #sset

$ana%eent 'iite!, a *hoy o*ne! su)si!iary of

Reiance "apita 'iite!, acts as the #$" to the fun!(

.irectors of the copany incu!e #ita)h Jhunjhun*aa, a

senior eecutie of #.#( #ita)h "hature!i is the

ana%in% !irector of the #$"(

#s of en! #u%ust 200@, Reiance utua fun! has Rs 2C,E5

crore of assets un!er ana%eent( Reiance 6;uity Bun!,

aunche! )y Reiance $B in eary 200@, is the ar%est utua

fin! schee in the country *ith a fun! si9e of oer Rs 5,500

crore(

8ere is a ist of utua fun!s of Reiance *hich incu!es.e)t7Incoe Bun!s , 6;uity Bun!s an! +ector +pecific

Bun!s(

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In*ias est Oering: Reiane %+t+a #+n*

Inestin% has )ecoe %o)a( To!ay, a ot of countries

are *akin% up to the reaity that in or!er to %ain financia

%ro*th, they ust encoura%e their citi9ens to not ony sae

)ut aso inest( $utua fun!s are fast )ecoin% the o!e of

inestent in the *or!(

In In!ia, a utua fun! copany cae! the Reiance $utua

Bun! is akin% *aes( Reiance is consi!ere! In!iaMs )est

*hen it coes to utua fun!s( Its inestors nu)er to -(@

)iion peope( Reiance "apita #sset $ana%eent 'iite!

ranks in the top of In!iaMs )ankin% copanies an! financia

sector in ters of net aue(

The #ni .hiru)hai #)ani roup o*ns ReianceS they are

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the fastest %ro*in% inestent copany in In!ia so far( To

eet the erratic !ean! of the financia arket, Reiance$utua Bun! !esi%ne! a !istinct portfoio that is sure to

pease potentia inestors( Reiance "apita #sset

$ana%eent 'iite! ana%es R$B(

)ision An*

%ission

Reiance $utua Bun! is so popuar )ecause it is inestor

focuse!( They sho* their !e!ication )y continuay !ishin%

out innoatie offerin%s an! unparaee! serice initiaties(

It is their %oa to )ecoe respecte! %o)ay for hepin%

peope achiee their financia !reas throu%h eceent

or%ani9ation %oernance an! custoer care( Reiance $utua

fun! *ants a hi%h perforance enironent that is %eare! at

akin% inestors happy(

R$B ais to !o )usiness a*fuy an! *ithout steppin% on

other peope( They *ant to )e a)e to create portfoios that

*i ensure the i;ui!ity of the inestent of peope in In!ia

as *e as a)roa!( Reiance $utua Bun! aso *ants to ake

sure that their shareho!ers reai9e reasona)e profit, )y

!epoyin% fun!s *isey( Takin% appropriate risks to reach thecopanyMs potentia is aso one of Reiance $utua Bun!Ms

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o)jecties(

)ISION STATE%ENT

To )e a %o)ay respecte! *eath creator *ith an ephasis

on custoer care an! a cuture of %oo! corporate %oernance

%ISSION STATE%ENT

To create an! nurture a *or!/cass, hi%h perforance

enironent aie! at !ei%htin% our custoers(

T80es o Reiane %+t+a #+n*s

1( Reiance ro*th Bun!

2( Reiance Dision Bun!

( Reiance ankin% Bun!

-( Reiance .i ersifie! Po*er +ector Bun!

5( Reiance Phara Bun!

@( Reiance $e!ia & 6ntertainent Bun!

E( Reiance NRI 6;uity Bun!

C( Reiance 6;uity opportunities Bun!

4( Reiance In!e Bun!

10(Reiance Ta +aer K6'++L Bun!

11(Reiance 6;uity Bun!12(Reiance 'on% Ter 6;uity Bun!

1(Reiance Re%uar +ain% Bun!

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There are t*o types of inestent in $utua Bun!s(

1) Lump Sum

2) Systematic Investment Plan(SIP)

LU%P SU% : In 'up su the inestent is ony one

ties that

is of Rs( 5,000( an! if the inestent is onthy then the

inestent *i )e @,0007/(

SYSTE%ATI$ IN)EST%ENT PLAN(SIP!: We hae

area!y entione! a)out +IPs in )rief in the preious pa%es

)ut no* %oin% into !etais, *e *i see ho* the po*er

of copoun!in% cou! )enefit us( In such case, eery

sa aountsineste! re%uary can %ro* su)stantiay(+IP %ies a cear picture of ho* an eary an! re%uar

inestent can hep the inestor in *eath creation( .ue to

its uniite! a!anta%es +IP cou! )e Re!efine! as Ga

etho!oo%y of fun! inestin% re%uary to )enefit re%uary

fro the stock arket oatiity( In the ater sections *e

*i see ho* returns %enerate! fro soe of the +IPs

hae outperfore! their )enchark( ut )efore oin% on

to that ets hae a ook at soe of the top perforin%

+IPs an! their return for 1 year:

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+chee #ount N#D N#D .ate Tota #ount

Reiance !iersifie! po*er sector retai 1000 @2(E-0757200C 1-52-(0E

Reiance re%uar sain%s e;uity 1000 22(20C 0757200C

15C-(4--

principa %o)a opportunities fun! 1000 1C(C@ 0757200C

1-2-E(E2C

.W+ inestent opportunities fun! 1000 5(1 0757200C

1E41(15E

= %ro*th fun! 1000 -2(1- 0757200C 1E@4(152

In the a)oe chart *e can see ho* if *e start inestin% Rs

1000 per onth then *hat return *eF %et for the tota

inestent of Rs( 12000( There is reiance !iersifie! po*er

sector retai %iin% the aiu returns of Rs( 252-(0E per

year *hich coes to 21 rou%hy( Net *e can see if

any)o!y *ou! hae un!ertaken the +IP in Principa

*ou! hae %ot returns of app( 1C( We can seereiance re%uar sain%s e;uity, .W+ inestent

opportunities an! = %ro*th fun! %iin% returns of

1(20, 1-(42, an! 1-(E- respectiey *hich is

%reater than any other onthy

inestent options( Thus *e can easiy ake out ho* +IP is

)eneficia for us( Its hasse free, it forces the inestors to

sae an! %et the into the ha)it of sain%( #so payin% asa aount of Rs( 1000 is easy an! conenient for the,

thus puttin% no pressure on their pockets( No* *e *i

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anay9e soe of the e;uity fun! +IP s of ira +unife

*ith +6 200 an! )ank fie! !eposits In a ta)uar foratas *e as %raphica(

RELIAN$E %UTUAL #UN S$@E%ES

EUITY=&RO;T@ S$@E%ES

The ai of %ro*th fun!s is to proi!e capita appreciation

oer the e!iu to on%/ ter( +uch schees noray

inest a ajor part of their corpus in e;uities( +uch fun!s

hae coparatiey hi%h risks( These schees proi!e

!ifferent options to the inestors ike !ii!en! option, capita

appreciation, etc( an! the inestors ay choose an option

!epen!in% on their preferences( The inestors ust in!icate

the option in the appication for( The utua fun!s aso

ao* the inestors to chan%e the options at a ater !ate(

ro*th schees are %oo! for inestors hain% a on%/ter

outook seekin% appreciation oer a perio! of tie(

ET=IN$O%ES$@E%ES

The ai of incoe fun!s is to proi!e re%uar an! stea!y

incoe to inestors( +uch schees %eneray inest in fie!

incoe securities such as )on!s, corporate !e)entures,

oernent securities an! oney arket instruents( +uch

fun!s are ess risky copare! to e;uity schees( Thesefun!s are not affecte! )ecause of fuctuations in e;uity

arkets( 8o*eer, opportunities of capita appreciation are

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aso iite! in such fun!s( The N#Ds of such fun!s are

affecte! )ecause of chan%e in interest rates in the country( Ifthe interest rates fa, N#Ds of such fun!s are ikey to

increase in the short run an! ice ersa( 8o*eer, on% ter

inestors ay not )other a)out these fuctuations(

SE$TOR SPE$I#I$ S$@E%ES

These are the fun!s7schees *hich inest in the securities of

ony those sectors or in!ustries as specifie! in the offer

!ocuents( e(%( Pharaceuticas, +oft*are, Bast $oin%

"onsuer oo!s KB$"L, Petroeu stocks, etc( The

returns in these fun!s are !epen!ent on the perforance of

the respectie sectors7in!ustries( Whie these fun!s ay %ie

hi%her returns, they are ore risky copare! to !iersifie!

fun!s( Inestors nee! to keep a *atch on the perforance of

those sectors7in!ustries an! ust eit at an appropriate tie(

They ay aso seek a!ice of an epert(

EUITY=&RO;T@ S$@E%ES

RELIAN$E NATURAL RESOUR$ES #UN :

K#n =pen 6n!e! 6;uity +cheeL The priary inestent

o)jectie of the schee is to seek to %enerate capita

appreciation & proi!e on%/ter %ro*th opportunities )y

inestin% in copanies principay en%a%e! in the !iscoery,!eeopent, pro!uction, or !istri)ution of natura resources

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an! the secon!ary o)jectie is to %enerate consistent returns

)y inestin% in !e)t an! oney arket securities(

RELIAN$E EUITY #UN :

K#n open/en!e! !iersifie! 6;uity +chee(L The priary

inestent o)jectie of the schee is to seek to %enerate

capita appreciation & proi!e on%/ter %ro*th

opportunities )y inestin% in a portfoio constitute! of e;uity

& e;uity reate! securities of top 100 copanies )y arket

capitai9ation & of copanies *hich are aaia)e in the

!eriaties se%ent fro tie to tie an! the secon!ary

o)jectie is to %enerate consistent returns )y inestin% in

!e)t an! oney arket securities(

RELIAN$E TA SA)ER (ELSS! #UN :

K#n =pen/en!e! 6;uity 'inke! +ain%s +chee(L The

priary o)jectie of the schee is to %enerate on%/tercapita appreciation fro a portfoio that is ineste!

pre!oinanty in e;uity an! e;uity reate! instruents(

RELIAN$E EUITY OPPORTUNITIES #UN :

K#n =pen/6n!e! .iersifie! 6;uity +chee(L The priary



opportunities )y inestin% in a portfoio constitute! of e;uity

securities & e;uity reate! securities an! the secon!ary


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RELIAN$E )ISION #UN :K#n =pen/en!e! 6;uity ro*th +chee(L The priary

inestent o)jectie of the +chee is to achiee on% ter

%ro*th of capita )y inestent in e;uity an! e;uity reate!

securities throu%h a research )ase! inestent approach(

RELIAN$E &RO;T@ #UN :

K#n =pen/en!e! 6;uity ro*th +chee(L The priary

inestent o)jectie of the +chee is to achiee on% ter

%ro*th of capita )y inestent in e;uity an! e;uity reate!

securities throu%h a research )ase! inestent approach(

RELIAN$E UANT PLUS #UN (#OR%ERLY

KNO;N AS RELIAN$E INE #UN! :

K#n =pen 6n!e! 6;uity +chee(L The inestent o)jectie

of the +chee is to %enerate capita appreciation throu%hinestent in e;uity an! e;uity reate! instruents( The

+chee *i seek to %enerate capita appreciation )y

inestin% in an actie portfoio of stocks seecte! fro + & P

"N Nifty on the )asis of a atheatica o!e(

RELIAN$E NRI EUITY #UN :

K#n open/en!e! .iersifie! 6;uity +chee(L The Priary

inestent o)jectie of the schee is to %enerate optia

returns )y inestin% in e;uity or e;uity reate! instruents

priariy !ra*n fro the "opanies in the +6 200 In!e(

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RELIAN$E RE&ULAR SA)IN&S #UN

K#n =pen/en!e! +chee(L 6;uity =ption: The priary

inestent o)jectie of this option is to seek capita

appreciation an!7or to %enerate consistent returns )y actiey

inestin% in 6;uity &6;uity/reate! +ecurities(

aance! =ption: The priary inestent o)jectie of thisoption is to %enerate consistent returns an! appreciation of

capita )y inestin% in i of securities coprisin% of e;uity,

e;uity reate! instruents & fie! incoe instruents(

RELIAN$E LON& TER% EUITY #UN:

K#n cose/en!e! .iersifie! 6;uity +chee(L The priary


on% ter capita appreciation & proi!e on%/ter %ro*thopportunities )y inestin% in a portfoio constitute! of e;uity

& e;uity reate! securities an! .eriaties an! the secon!ary



RELIAN$E EUITY A)ANTA&E #UN:

K#n open/en!e! .iersifie! 6;uity +chee(L The priary



opportunities )y inestin% in a portfoio pre!oinanty of

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e;uity & e;uity reate! instruents *ith inestents

%eneray in + & P "N Nifty stocks an! the secon!aryo)jectie is to %enerate consistent returns )y inestin% in


ET=LIUI S$@E%ES

RELIAN$E %ONT@LY IN$O%E PLAN :

K#n =pen 6n!e! Bun!( $onthy Incoe is not assure! & is

su)ject to the aaia)iity of !istri)uta)e surpus L The

Priary inestent o)jectie of the +chee is to %enerate

re%uar incoe in or!er to ake re%uar !ii!en! payents

to unitho!ers an! the secon!ary o)jectie is %ro*th of

capita(

RELIAN$E &ILT SE$URITIES #UN C S@ORT

TER% &ILT PLAN LON& TER% &ILT PLAN :

=pen/en!e! oernent +ecurities +cheeL The priary

o)jectie of the +chee is to %enerate =ptia cre!it risk/

free returns )y inestin% in a portfoio of securities issue!

an! %uarantee! )y the centra oernent an! +tate

oernent

RELIAN$E IN$O%E #UN :

K#n =pen/en!e! Incoe +cheeL The priary o)jectie ofthe schee is to %enerate optia returns consistent *ith

o!erate ees of risk( This incoe ay )e copeente!

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)y capita appreciation of the portfoio( #ccor!in%y,

inestents sha pre!oinanty )e a!e in .e)t & $oneyarket Instruents(

RELIAN$E %EIU% TER% #UN :

K#n =pen 6n! Incoe +chee *ith no assure! returns(L The

priary inestent o)jectie of the +chee is to %enerate

re%uar incoe in or!er to ake re%uar !ii!en! payents

to unitho!ers an! the secon!ary o)jectie is %ro*th of

capita

RELIAN$E S@ORT TER% #UN :

K#n =pen 6n! Incoe +cheeL The priary inestent

o)jectie of the schee is to %enerate sta)e returns for

inestors *ith a short inestent hori9on )y inestin% in

Bie! Incoe +ecurities of short ter aturity(

RELIAN$E LIUI #UN :

K=pen/en!e! 'i;ui! +cheeL( The priary inestent

o)jectie of the +chee is to %enerate optia returns

consistent *ith o!erate ees of risk an! hi%h i;ui!ity(

#ccor!in%y, inestents sha pre!oinanty )e a!e in

.e)t an! $oney $arket Instruents(

RELIAN$E #LOATIN& RATE #UN :

K#n =pen 6n! 'i;ui! +cheeL The priary o)jectie of the

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schee is to %enerate re%uar incoe throu%h inestent in a

portfoio coprisin% su)stantiay of Boatin% Rate .e)t+ecurities Kincu!in% foatin% rate securitise! !e)t an!

$oney $arket Instruents an! Bie! Rate .e)t Instruents

s*appe! for foatin% rate returnsL( The schee sha aso

inest in Bie! rate !e)t +ecurities Kincu!in% fie! rate

securitise! !e)t, $oney $arket Instruents an! Boatin%

Rate .e)t Instruents s*appe! for fie! returns

RELIAN$E NRI IN$O%E #UN :

K#n =pen/en!e! Incoe scheeL The priary inestent

o)jectie of the +chee is to %enerate optia returns

consistent *ith o!erate ees of risks( This incoe ay )e

copiente! )y capita appreciation of the portfoio(

#ccor!in%y, inestents sha pre!oinanty )e a!e in

!e)t Instruents(

RELIAN$E LIUIITY #UN :

K#n =pen / en!e! 'i;ui! +cheeL The inestent o)jectie

of the +chee is to %enerate optia returns consistent *ith

o!erate ees of risk an! hi%h i;ui!ity( #ccor!in%y,

inestents sha pre!oinanty )e a!e in .e)t an! $oney

$arket Instruents(

RELIAN$E INTER)AL #UN:

K# .e)t =riente! Intera +cheeL The priary inestent

@@


67/116

o)jectie of the schee is to seek to %enerate re%uar returns

an! %ro*th of capita )y inestin% in a !iersifie! portfoio

RELIAN$E LIUI PLUS #UN

K#n =pen/en!e! Incoe +chee(L The inestent o)jectie

of the +chee is to %enerate optia returns consistent *ith

o!erate ees of risk an! i;ui!ity )y inestin% in !e)t

securities an! oney arket securities(

RELIAN$E #IE @ORIMON #UN IK# cose! en!e! +cheeL The priary inestent o)jectie

of the schee is to seek to %enerate re%uar returns an!

%ro*th of capita )y inestin% in a !iersifie! portfoio(

RELIAN$E #IE @ORIMON #UN CII

K#n cose! en!e! +chee(L The priary inestent


an! %ro*th of capita )y inestin% in a !iersifie! portfoio(

RELIAN$E #IE @ORIMON #UN CIII

K#n "ose/en!e! Incoe +chee(L The priary inestent



RELIAN$E #IE TENOR #UN

K#n "ose/en!e! +chee(L The priary inestent o)jectieof the Pan is to seek to %enerate re%uar returns an! %ro*th

of capita )y inestin% in a !iersifie! portfoio(

@E


68/116

RELIAN$E #IE @ORIMON #UN CPLAN $

K#n cose! en!e! +chee(L The priary inestento)jectie of the schee is to seek to %enerate re%uar returns

an! %ro*th of capita )y inestin% in a !iersifie! portfoio(

RELIAN$E #IE @ORIMON #UN C I):




RELIAN$E #IE @ORIMON #UN C ):




of: /

"entra an! +tate oernent securities an!

=ther fie! incoe7 !e)t securities noray aturin% in ine

*ith the tie profie of the schee *ith the o)jectie

of iitin% interest rate oatiity

RELIAN$E #IE @ORIMON #UN C )I:




of: /"entra an! +tate oernent securities an!


@C


69/116

*ith the tie profie of the series *ith the o)jectie of

iitin% interest rate oatiity

RELIAN$E #IE @ORIMON #UN C )II:




of: /

"entra an! +tate oernent securities an!


*ith the tie profie of the series *ith the o)jectie of

iitin% interest rate oatiity(

SE$TOR SPE$I#I$ S$@E%ES

+ector Bun!s are speciaty fun!s that inest in stocks fain%

into a certain sector of the econoy( 8ere the portfoio is

!isperse! or sprea! across the stocks in that particuar sector(This type of schee is i!ea for inestors *ho hae area!y

a!e up their in! to confine risk an! return to a particuar

sector(

RELIAN$E ANKIN& #UN

Reiance $utua Bun! has an =pen/6n!e! ankin% +ector

+chee *hich has the priary inestent o)jectie to%enerate continuous returns )y actiey inestin% in e;uity 7

e;uity reate! or fie! incoe securities of )anks(

@4


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71/116

RELIAN$E &OL E$@AN&E TRAE #UN:

K#n open/en!e! o! 6chan%e Tra!e! Bun!L theinestent o)jectie is to seek to proi!e returns that cosey

correspon! to returns proi!e! )y price of %o! throu%h

inestent in physica o! Kan! o! reate! securities as

peritte! )y Re%uators fro tie to tieL( 8o*eer, the

perforance of the schee ay !iffer fro that of the

!oestic prices of o! !ue to epenses an! or other reate!

factors(

&RO;T@ O# RELIAN$E %UTUAL

#UN T@ROU&@ RE$O&NITION

&RO;T@ T@ROU&@ RE$O&NITION

E1


72/116

Reiance has erite! a series of a*ar!s an! reco%nitions for

eceence for )usinesses an! operations(

$ORPORATE RANKIN& AN RATIN&S:

Reiance feature! in the Bortune o)a 500 ist of VWor!Fs

'ar%est "orporationsF for the fourth consecutie year(

Ranke! 2@4th in 200E hain% oe! up E paces

fro the preious year(

Beature! as one of the *or!Fs Top 200 copanies in

ters of Profits(

#on% the top 25 ci)ers for t*o years in a ro*(

Beature! aon% top 50 copanies *ith the )i%%est

increase in Reenues(

Ranke! 2@th *ithin the refinin% in!ustry(

Reiance is ranke! 1C2n! in the BT o)a 500 Kup fro

preious yearFs 2C-th rankL(

PetroBe!, an ape hy!rocar)on in!ustry association,

conferre! the PetroBe! 200E a*ar!s in the cate%oriesof GRefinery of the earH an! G6poration &

Pro!uction / "opany of the earH(

E2


73/116

ran! Reiance *as conferre! the Gron9e #*ar!H at

The u99iest ran!s #*ar!s 200C, or%ani9e! )ya%encyfa;s

Institute of 6conoic +tu!ies conferre! the GA!yo%

RatnaH a*ar! in =cto)er 200E for contri)utions to

the in!ustry(

"hetech Boun!ation conferre! the G8a of BaeH

in Be)ruary 200C for sterin% contri)utions to thein!ustry(

"hetech Boun!ation conferre! the G=utstan!in%

#chieeent / =i Refinin%H for *ork at the

Jana%ar $anufacturin% .iision(

Petroeu Be!eration of In!ia conferre! the GRefinery of the

ear #*ar! / 200EH to Jana%ar $anufacturin% .iision

GThe Pastics 6port Prootion "ounci /

P'6"=AN"I' 6port #*ar!H in the cate%ory of

Pastic Poyers for the year 200@/200E *as a*ar!e!

to Reiance )ein% the ar%est eporter in this

cate%ory(

A;ARS O# T@E $O%PANYC

E


74/116

1Reiance "apita #sset $ana%eent 't!( *on the #sia#sset $ana%eent #*ar! 200E

2(Reiance "apita #sset $ana%eent 't!( *on the +ocia

& "orporate oernance #*ar! 200E

Reiance $utua Bun! has )een a*ar!e! the QN.TD

usiness 'ea!ership #*ar! 200EQ in the $utua Bun!

cate%ory(

-("N" TD1C / "RI+I' $utua Bun! of the ear #*ar!

for 200E

A$@IE)E%ENTS

In t*o successie joint sureys )y The 6conoic TiesF

ran! 6;uity an! #" Niesen, Reiance *as reco%ni9e! as

In!iaFs $ost Truste! $utua Bun!( The copany aso

*ake! a*ay *ith seen other schee pri9es 3 fie of the

)ein% outri%ht *inners 3 in the uf 200E 'ipper #*ar!s(

These incu!e! the Bun! 8ouse of the ear )y 'ipper ""

as *e as I"R# =nine an! the $ost Iproe! Bun! 8ouse

)y #sia #sset $ana%eent( It aso receie! the N.TD

usiness 'ea!ership #*ar! 200E in the utua fun!cate%ory an! runnersF up reco%nition as the est Bun! 8ouse

in the =utook $oney/N.TD Profit #*ar!s( In a!!ition, the

E-


75/116

copany receie! the coete! "N" We)1C enius of the

We) !istinction for the est $utua Bun! We)site in thecountry( R"#$ *as a*ar!e! the In!ia =nshore Bun! 8ouse

200C institute! )y the #sian Inestor a%a9ine( The

copany aso *on the In!ia 6;uities a*ar! in the 5/

yearPerforance cate%ory(

OJE$TI)ES O# T@E STUY

To create the a*areness of $utua Bun! aon%

peope an! %ettin% the opinion of peope re%ar!in%

$utua Bun!s(

To stu!y $utua Bun! In!ustry in In!ia(

To %ie an i!ea a)out the re%uations of utua

fun!s(

To %ie a )rief i!ea a)out the )enefits aaia)e fro

utua Bun! inestent(

To %ie an i!ea of !ifferent +chees proi!e! )y

Reiance $utua Bun!(

To stu!y the perforance of !ifferent schees of the

"opany( To stu!y the $onthy Returns *ith respect to their

enchark(

E5


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To anay9e reiance utua fun! strate%y a%ainst its

copetitor(

S$OPE O# T@E STUY:

The stu!y *as iite! to just fin!in% the risk an!

returns associate! *ith the schees(

The stu!y coers the si !ifferent schees proi!e!

)y Reiance $utua Bun!( #re as : 1L Reiance

ro*th Bun!/+6100 2LReiance 6;uity Bun!/+&P "N NIBT

LReiance 'i;ui! Bun!/"risi 'i;ui! Bun!

In!e

The stu!y coers the perio! of past t*o onth fro

June to Juy(

The stu!y coers ony the open/en!e! fun!s(

RESEAR$@ %ET@OOLO&Y

E@


77/116

Research in coon parance refers to a search for

kno*e!%e( =ne can aso !efine research as a

scientific an! systeatic search for pertinent

inforation on a specific topic(

%ET@O O# RESEAR$@ ESI&N TO E USE

UNER STUY IS:

ES$RIPTI)E RESEAR$@:

In this research an attept has )een a!e to anay9e the past

perforance of the Reiance $utua schees an! to kno*

the )enefits to the inestors( The stu!y is to )e !one on

!ifferent schees proi!e! )y the copany to kno* the

copanyFs perforance for the past fe* onths an! to kno*

the risk an! returns of the fun!s(%ET@OOLO&Y O# ATA $OLLE$TION:

In this project *ork priary an! secon!ary !ata has )een

use!:/

PRI%ARY ATA CThe priary !ata to )e seecte! is)ase! upon the response of the respon!ents to the

;uestionnaire !esi%ne!( Priary !ata coection heps inthe specific purpose of a!!ressin% the pro)e at han!(The priary !ata is coecte! in 2 *ays:

Ouestionnaire:

EE


78/116

+tructure! Ouestionnaire has )een fie! )y the respon!entsto anay9e its effectieness(

Persona Interie*s:.ata has )een coecte! fro the persona interie*s of thecorporate(

SE$ONARY ATA C+econ!ary !ata arecoecte! fro the foo*in% etho!s:/

1L Journas2L ooksL $a%a9ines-L Ne*s paper5L We)sites@L Bact sheets of arious utua fun!s

TOOLS TE$@NIUES USE #OR T@E STUY

eta: +tan!ar! !eiation #pha +harpe Ratio Treynor Ratio ar chart #era%e& Percenta%e etho!

$ON$EPTUAL ESI&N:

EC


79/116

+ape unit: +chees of Reiance $utua Bun!(+ape si9e: Bie years onthy Nas & 50persons(

LI%ITATIONS O# T@E STUY:

The stu!y *as iite! ony to Reiance $utua Bun!

schees(

=ny si schees hae )een taken for anaysis(

The stu!y *as iite! to the etent of just fin!in% the

risks an! returns of each schees of the fun!(

The tie constraint *as one of the ajor pro)es(

E4


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The stu!y is iite! to the !ifferent scheesaaia)e un!er the utua fun!s seecte!(

The stu!y is iite! to seecte! utua fun!schees(

The ack of inforation sources for the anaysis part(

RISK RETURN ANALYSIS O#

T@E S$@E%ES

C0


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# rationa inestor )efore inestin% his7her oney in stock

anaysis the risk associate! *ith the particuar stock( Theactua returns he receies fro the stock ay ary fro the

epecte! one an! thus an inestor is a*ays caution a)out the

rate of risk associate! *ith particuar stock( hence it )ecoes

ery essentia on the part of inestors to kno* the risk as the

har! earne! oney is )ein% ineste! *ith the ie* to %oo!

return on inestent(

Risk ainy consists of t*o coponents(

+ysteatic risk

unsysteatic risk

SYSTE%ATI$ RISK

The systeatic risk affects the entire arket( The econoic

con!itiona, poitica situation, socioo%ica chan%e affects

the entire arket in turn affectin% the copany an! een the

stock arket( These situations are uncontroa)e )ycorporate an! inesteors(

UNSYSTE%ATI$ RISK

The Ansysteatic risk is uni;ue to in!ustries( It !iffers fro

in!ustries to in!ustries( Ansysteatic risk stes fro

ana%eria inefficiency, technoo%ica chan%e in pro!uction

process, aaia)iity of ra* aterias, chan%e in the custoer

preference an! a)our pro)e( The nature an! a%nitu!e of

C1


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a)oe entione! factors !iffer fro in!ustry to in!ustry an!

copany to copany(

In %enera ie*, the risk for any inestor *ou! )e the

pro)a)y oss fro inestin% oney in any utua fun!()ut

*hen ook at the technica si!e of its, *e cant just say these

schees7 fun! carry risk *ithout any proof( They are certain

set foruas to say the percenta%e risk associate! *ith it(

There are certain toos or foruas use! to cacuate the risk

associate! *ith schees( These toos heps us to un!erstan!

the associate! *it the schees( These schees are copare!

*ith the )enchark +6 100

T@E TOOLS USE #OR $AL$ULATION

+tan!ar! !eiation

eta

#pha

+harpe ratio

Treynor ratio

ARIT@%ETI$ %EAN

#$XYy7N

Where yX returns of N#D aues

NX nu)er of o)seration

C2


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#era%e returns that can )e epecte! fro inestent( The

#rithetic returns is appropriate as a easure of a centraten!ency of a nu)er of returns cacuate! fro particuar

tie i(e( for 5 years(

RETURNS

Inestor *ants to aii9e epecte! retunes su)ject to their

toerance for risk( Returns are the otiatin% force an!

principa re*ar! in inestent process an! it is the key

etho! aaia)e to inestors in coparin% aternatie the

inestents( $easurin% the historica returns ao*s inestor

to access the ho* *e the stocks hae perfore!( Inestor

%et returns either in for of interest, !ii!en! or capita

appreciation( There are t*o ters, reai9e! ter an!

epecte! return( Reai9e! return earne! in past(

R6TARNXK "osin% price/openin% priceL 7openin%priceZ100

STANAR I)EATION

The +tan!ar! !eiation is easure of the aria)es aroun!

its ean or it is s;uare root of the su of the s;uare! root

!eiations fro the ean !ii!e! the nu)er of o)seration(

C


84/116

+(. is use! to easure the aria)iity of return i(e the a

easure of !ispersion( +(. is cacuate! as the s;uare root ofariation( In finance inestents oatiity(+(. is aso kno*

as historica oatiity an! its use! )y inestors as a %au%e

fro the aounte! of oatiity(

+(.X[Ky/L\ NWhere yX return of portfoio

Xaera%e return of portfoio

NX nu)er of onths

ETA: eta !escri)es the reationship )et*een the

securities return an! the in!e returns(

1 eta 1F

=ne percent chan%e in arket in!e returns causes eacty

one percent chan%e in the security return( It in!icates that the

security oes in tan!e *ith the arket(

1 eta F5

=ne percent chan%e in the arket in!e return causes 0(5

percent chan%e in the security return( The security is ess

oatie copare! to the arket(

1 eta 2F

C-


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=ne percent chan%e in the arket in!e return causes 2

percent chan%e in the security return( The security return isore oatie( When there is a !ecine of 10 in the arket

return, the security *ith )eta of 2 *ou! %ie a ne%atie

return of 20( The security *ith ore than 1 )eta aue is

consi!ere! to )e risky(

NE&ATI)E ETA

Ne%atie )eta aue in!icates that the security return oes

in the opposite !irection to the arket return( # security *ith

a ne%atie )eta of /1 *ou! proi!e a return of 10, if the

arket return !ecines )y 10 an! ice/ersa(

etaX NZYy/KYLKYyL

NZYKL\/KYL\

Where

NXNo of o)seration XTota of arket in!e aue

XTota of return to Na

ALP@A:

#pha represent the forecast of resi!ua return, *hich *e

consi!er the future return of any portfoio( #pha easures

the unsysteatic risk of a portfoio property )ecause theportfoio property aso consists of )oth resi!ua return an!

future epectation(

C5


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It is iportant to ree)er that the risk/free portfoio *ia*ays sho* a 9ero resi!ua return hence, any risk ess

security ike cash *i hae a*ays apha e;ua to 9ero( #

positie apha of 1(0 eans the fun! has outperfore! its

)enchark in!e )y 1 correspon!in%y, a siiar ne%atie

apha *ou! in!icate an un!erperforance of 1( #pha

in!icates that the stock return is in!epen!ent of the arket

return (# positie aue of apha is a heathy si%n( Positie

apha aues *ou! yie! profita)e return(

The Borua is use! to cacuate:/

#phaX/)etaKL

Where

/aera%e return to na return /aera%e return toarket in!e

S@ARPE RATIO

The perforance easure !eeope! )y Wiia sharpe is

referre! to as the sharpe ratio or the re*ar! to aria)iity

ration( It is the ratio of the re*ar! or risk to the aria)iity of

return or risk easure! )y the stan!ar! !eiation of return

the forua for cacuatin% sharpe ratio ay )e state! as:

C@


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+harpe ratioX Rp/Rf

+(.Where,

RpXReaise! return on the portfoio(

RfXRisk free rate of return(

+(.Xstan!ar! !eiation of portfoio return

+harpe perforance in!e %ies a sin%e aue to )e use! for

the perforance rankin% of arious fun! or portfoio( sharpe

in!e easures the risk preiu of the portfoio reatie to

the tota aount of risk in the portfoio( The risk preiu is

the !ifference )et*een the portfoioFs aera%e rate of return

an! the risk ess rate of return( The stan!ar!

.eiation of the portfoio in!icates the risk(

8i%her the aue of sharpe ratio )etter the fun! has

perfore!( +harpe ratio can )e use! to rank the !esira)iity

of fun! or portfoio( The fun! that has perfore! *e

copare! to other *i )e rank first than others(

Tre8nor ratio

The perforance easure )y jack( Treynor is referre! to as

Treynor ratio or re*ar! to oatiity ratio( It is the ratio of the

re*ar! or risk preiu to the oatiity of return as

easurin% )y the portfoio )eta( The forua for cacuatin%

Treynor ratio ay )e state! as:

Treynor ratioX Rp/Rf

eta

CE


88/116

Where:

RpX reai9e! return on the portfoioRfX risk free rate of return

etaXportfoio )eta(

ANALYSIS AN INTERPRETATION

1! RELIAN$E &RO;T@ #UN:en3-ar7 C1FF

RETURN 0F PORTFOLIO MARKET RETURN

DATE NAV Rp(! ("#! ("#!$ INDE% Rm(&! (&'%! &'

Jan 0# 3$."# !"$%.&$

'eb 0# 3#.# &.#(3( 0.3%)$$ 0.&3% !"!3."" *0.(#&) 0.#%#3 *&.&)

Mar 0# !(."" *!&.# *!!.3% #00 !"%%.3& &.$$(3$ !.0"$) *30.%

Apr 0# !".)3 %.#(3) #.3%)#$ !).)! 30!#.&$ &.")3!( 3."33$ &3.0

May 0# !#.#" *&$.!&$ *.$&" !3(.( !%#).!3 *&!.&!" &$(.&& &(!

Jun 0# !#.)) &.&333 *0.0(! 0.00# !#%&.&% *3.%#&( &3.33# *$.&3

Jul 0# !).3& ".3)"# ).&)$!% %%.") !(##.!! (.#((0$ #(.$&& (&.&

Aug 0# 3&.!3 &0.3&$ ".&0"&$ )!.") !()".0( &.!!)#) &.#0"$ &!.%

+ep 0# 3!."3 #.$$3# $.!3)!# &(."% !""(.0( (.$#(%) ##.%&( $0.#,ct 0# 30.$) *(.$$ *).%$#3 ($.($ 30!(."% &.030%( &.0%!3 *(.%%

-ov 0# 33.#! "."(3) ).(%)#! (%.)" 333".(# &0.!"( &0%.03 &0!

ec 0# 3#.$& #.%3)$ $.$33&" &".%# 3#)0.3$ (.!03)3 #&.)"# $0.%

TOTAL (.!3&$ &&0% TOTAL !&.%"3 $$0

#)*+, &.!0#! %)&*+, &."(!&

CC


89/116

0

#00

&000

!000

!#00

3000

3#00

$000

& ! 3 $ # % ( ) " &0 && &!

0

#

&0

!0

!#

30

3#

$0

inde/

-avs

ANALYSIS:The a)oe %raph sho*s the oeent of N#D of reiance

%ro*th fun! an! enchark in!e for the perio! fro Jan

2005 to .ec 2005( Bro the a)oe %raph *e can see there is

soe correation )et*een the oeent of )oth

ANALYSIS:The a)oe %raph sho*s the oeent of N#D of reiance

e;uity fun! an! enchark in!e for the perio! fro Jan

2005 to .ec 2005( Bro the a)oe %raph *e can see there is

soe correation )et*een the oeent of )oth

1! STANAR E)IATION:

C4


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S Q (8CY! N

6#R Ky/L\ y/L\7N +;uare root K+(.L200C 30).#))) 25(E15E 5(0E10

2004 (##.3$!" @2(4--5 E(4C0

2! ETA

N YC(!(Y!

NC(!

6T#6#R NZ KYL K YL NY\ KYL\ 200C @E1-(-C $#.!)3)# $3.$)&3( C2C0(@ 2050(@2 0(E@1E

2004 15121(-C *%!.3&%) *#$.0(0# 202-2(2C CC(C 0(E1C

! ALP@A

V YC(!

40


91/116

YEAR Y ]YC(!2FFD 3."#!)#! 0(E@1E $.&&%(&$ FD115

2FFB *$.#0#)) 0(E1C *#.&"30( CF56B

?! S@ARPE RATIO

SRR0CR=S

;3ereW

R0 ($osing Na9=o0ening Na9C1!1FF

+8#RP6R#TI=

6#R Rp Rf +. +R

200C #0."((0% E 5(0E10 C(@E22@5

2004 *3%.%$#) E(5 E(4C0 *#.#%$!(

5! TREYNOR RATIO

TRR0CR=

TR6N=RR#TI=

6#R R0 R TR

200C #0."((0% E 0(E@1E 5E(E5-

2004 *3%.%$#) E(5 0(E1C *%&.$#)(

41


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INTERPRETATION

In the year 2004 stan!ar! !eiation *as hi%h at the rate of

E(4C0 an! in the year 200C stan!ar! !eiation *as o* at

the rate of 5(0E10( in the year 200C is 0(E@1E *hich is hi%h

risk )ecause %reater than 1 in the year 2004 aue is

0(E1C it is ess risky copare! to year 200C ( In the year

200C sharpe in!e *as hi%her at the rate of C(@E22@5 an! in

the year 2004 sharpe in!e *as esser at the rate of 3

5(5@-2E( In t

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