Professional Documents
Culture Documents
FOR EXAMPLE:
If the market value of the assets of a fund is Rs. 100,000
The total number of units issued to the investors is equal to 10,000.
Then the NAV of this scheme = (A)/(B), i.e. 100,000/10,000 or 10.00
Now if an investor 'X' owns 5 units of this scheme
Then his total contribution to the fund is Rs. 50 (i.e. Number of units held multiplied by
the NAV of the scheme).
Therefore, the investments in Mutual Funds is not risk free, but a good managed Fund
can give you regular and higher returns than when you can get from fixed deposits of a
bank etc.
3
Investors purchase mutual fund shares from the fund itself (or through a broker
for the fund) instead of from other investors on a secondary market, such as the
New York Stock Exchange or NASDAQ Stock Market.
The price that investors pay for mutual fund shares is the fund's per share net
asset value (NAV) plus any shareholder fees that the fund imposes at the time of
purchase (such as sales loads).
Mutual fund shares are "redeemable," meaning investors can sell their shares
back to the fund (or to a broker acting for the fund).
Mutual funds generally create and sell new shares to accommodate new
investors. In other words, they sell their shares on a continuous basis, although
some funds stop selling when, for example, they become too large.
The investment portfolios of mutual funds typically are managed by separate
entities known as "investment advisers" that are registered with the SEC.
LIC in 1989 and GIC in 1990. The end of 1993 marked Rs.47,004 as assets under
management.
The AMC seeks to multiply the invested money in the fund in line with the scheme's
investment objective. It should have a networth of at least Rs 10 crore. The AMC is a
key player in the MF game and does everything to make the most of your investment. It
launches new schemes, manages them, and employs the fund management team,
including the fund manager. The sponsor appoints the AMC and the trustees review its
operations.
• CUSTODIAN.
An MF needs to store and record transactions, for which it relies on banks or financial
institutions that are designated custodians. The custodian maintains custody of the
securities in which the scheme invests (as distinct from the registrar who tracks the
investment by investors in the scheme).The custodian also follows up on various
corporate actions, such as rights, bonus and dividends declared by investor companies.
• R&T AGENTS
Registrars and transfer agents (R&T agents) handle all paperwork involving investor
servicing. Their services include processing initial public offerings, dispatch of
certificates, account statements, annual reports and dividend warrants.
March the most active month for the mutual fund industry in India. May of year 2005
was considered the most active month when mutual funds were net buyers of worth
Rs.3,334.99 crores.
DO MORE READING.
Visit the library or buy some specialized books on mutual fund investing that will build
on what you have learned from this unit. Some useful references are: Mutual Funds for
Dummies by Eric Tyson, (For Dummies, 2007), Morningstar Guide to Mutual Funds:
Five-Star Strategies for Success (Wiley, 2007) and Common Sense on Mutual Funds:
New Imperatives for the Investor by John C. Bogle (Wiley, 2000).
SHAREHOLDER REPORTS
A mutual fund also must provide shareholders with annual and semi-annual reports
within 60 days after the end of the fund's fiscal year and 60 days after the fund's fiscal
mid-year. These reports contain a variety of updated financial information, a list of the
fund's portfolio securities, and other information.
PAST PERFORMANCE
A fund's past performance is not as important as you might think. Advertisements,
rankings, and ratings often emphasize how well a fund has performed in the past. But
9
studies show that the future is often different. This year's "number one" fund can easily
become next year's below average fund.
These ratios represent the annual fees that mutual funds charge and include
management fees, administrative costs, distribution fees and some operating expenses.
If possible, these fees should be under one percent annually.
REVIEW PERIODICALLY
After you have selected your mutual fund, set up a regular review schedule—generally
at the end of the year—to ensure its performance remains consistent with your
investment objectives and level of investment risk. Look at a fund's track record and
portfolio. Don't obsess over a mutual fund's double-digit return. Review the fund
company's prospectus before investing. You'll learn the goals and its strategy for
achieving them. Seek the advice of an accountant and/or a tax expert regarding the
implications of your investment before you buy. Who Can Help
An investor must mention clearly his name, address, number of units applied for and
such other information as required in the application form. He must give his bank
11
Mutual funds face risks based on the investments they hold. The risk return trade-off
indicates that if investor is willing to take higher risk then correspondingly he can
expect higher returns and vise versa if he pertains to lower risk instruments, which
would be satisfied by lower returns. For example, if an investors opt for bank FD,
which provide moderate return with minimal risk. But as he moves ahead to invest in
capital protected funds and the profit-bonds that give out more return which is slightly
higher as compared to the bank deposits but the risk involved also increases in the same
proportion.
The dividend distributed by both debt funds and equity funds is tax-free in investor’s
hands. In case of EQUITY FUNDS, no dividend distribution tax is payable by the
mutual fund. However, in the case of DEBT FUNDS, the mutual fund has to pay a
Dividend Distribution Tax (12.5 % Surcharge @10% + education cess ( @2% on
Income Tax and surcharge) + secondary and higher education cess ( @1% on Income
Tax and surcharge i.e 14.1625% ) on the amount of dividend distributed to individuals
and HUFs and for other than Equity Oriented Funds ( except Money Market & Liquid
funds ) it is ( 20% + Surcharge @10% + education cess ( @2% on Income Tax and
surcharge) + secondary and higher education cess ( @1% on Income Tax and surcharge
i.e 22.66%.
In the case of short term capital gains (profits that accrue from the sale of
units within one year from the date of purchase) earned on the sale of EQUITY
FUNDS, tax is applicable as 15%+ applicable Surcharge + education cess ( @2% on
Income tax and surcharge) + secondary and higher education cess ( @1% on income
tax & surcharge) , subject to STT. Short term capital gains on DEBT FUNDS attract tax
at the personal income tax rate applicable to assessee and for FIIs it is 30%+ applicable
Surcharge + education cess ( @2% on Income tax and surcharge) + secondary and
higher education cess ( @1% on income tax & surcharge)
Long term capital gains (profits that accrue from the sale of units after one
year from the date of purchase) earned on the sale of EQUITY FUNDS are tax free in
hands of Investor. In case of DEBT FUNDS, long term capital gains computed as
( 10% without cost Inflation index benefit or 20% with cost inflation index benefit
whichever is lower + applicable Surcharge + education cess ( @ 2% on Income tax
and surcharge) + secondary and higher education cess ( @ 1% on Income Tax and
surcharge) to Investor and for Foreign Institutional Investors it is. (10 % + applicable
Surcharge + education cess ( @2% on Income Tax and surcharge) + secondary and
higher education cess ( @1% on Income Tax and surcharge).
14
PROFESSIONAL MANAGEMENT
COSTFUL
DILUTION
TAXES
LACK OF CONTROL
PRICE UNCERTAINTY
COSTS DESPITE NEGATIVE RETURNS
COSTS CONTROL NOT IN THE HANDS OF AN INVESTOR-
NO CUSTOMIZED PORTFOLIOS
15
Mutual funds in India are regulated by two following regulatory bodies. These
governing make rules and to make it‘s functioning smooth so that care can be taken of
all the parties involve in the industry. To protect the interest of the investors, SEBI
formulates policies and regulates the mutual funds. It notified regulations in 1993 (fully
revised in 1996) and issues guidelines from time to time.SEBI approved Asset
Management Company (AMC) manages the funds by making investments in various
types of securities. Custodian, registered with SEBI, holds the securities of various
schemes of the fund in its custody
INDIA
ESTABLISHMENT
In 1988 the Securities and Exchange Board of India (SEBI) was established by the
Government of India through an executive resolution, and was subsequently upgraded
as a fully autonomous body (a statutory Board) in the year 1992 with the passing of the
Securities and Exchange Board of India Act (SEBI Act) on 30th January 1992. The
basic objectives of the Board were identified as:
PREAMBLE
[ACT NO. 15 OF 1992]
The Preamble of the Securities and Exchange Board of India describes the basic
functions of the Securities and Exchange Board of India as:
16
“…..to protect the interests of investors in securities and to promote the development
of, and to regulate the securities market and for matters connected therewith or
incidental thereto”
The revised regulations embodied far reaching changes in the regulation and
functioning of mutual funds. The revised regulations provide for:
(AMFI)
With the increase in mutual fund players in India, a need for mutual fund association in
India was generated to function as a non-profit organization. Association of Mutual
Funds in India (AMFI) was incorporated on 22nd August, 1995.AMFI is an apex body
of all Asset Management Companies (AMC) which has been registered with SEBI. Till
date all the AMCs are that have launched mutual fund schemes are its members
ASSOCIATION OF MUTUAL FUNDS IN INDIA
706-708, Balarama
17
Bandra-Kurla Complex
Bandra (East)
Mumbai - 400 051.
Tel No. : 26590382 / 26590206 / 26590243 / 26590246
FAX No. : 26590235 / 26590209
AMFI Website: http://www.amfiindia.com/
The business of State Bank of Patiala has grown manifold since its establishment.
Recent records say that State Bank of Patiala is networked by its 830 service outlets.
There are as many as 750 branches of SBP, spread across the major cities of India, out
of which, the majority of branches are located in its home State, Haryana, Himachal
Pradesh, Rajasthan, Jammu & Kashmir, Delhi and Chandigarh. The Bank provides
easy access to money to its customers through its ATMs spread over 16 states of India.
Govt. Business
CONTACT
EQUITY SCHEMES
The investments of these schemes will predominantly be in the stock markets and
endeavor will be to provide investors the opportunity to benefit from the higher returns
which stock markets can provide. However they are also exposed to the volatility and
attendant risks of stock markets and hence should be chosen only by such investors
who have high risk taking capacities and are willing to think long term.
• Magnum COMMA Fund
• Magnum Equity Fund
• Magnum Global Fund
• Magnum Index Fund
• Magnum MidCap Fund
• Magnum Multicap Fund
• Magnum Multiplier Plus 1993
• Magnum NRI Investment Fund - FlexiAsset Plan
• Magnum Sector Funds Umbrella
MSFU - Emerging Businesses Fund
MSFU - IT Fund
MSFU - Pharma Fund
MSFU - Contra Fund
MSFU - FMCG Fund
• SBI Arbitrage Opportunities Fund
• SBI Blue chip Fund
20
DEBT SCHEMES
Debt Funds invest only in debt instruments such as Corporate Bonds, Government
Securities and Money Market instruments. The expected returns from debt funds would
be lower. Such investments are advisable for the risk-averse investor and as a part of
the investment portfolio for other investors.
BALANCED SCHEMES
Magnum Balanced Fund invests in a mix of equity and debt investments. Hence they
are less risky than equity funds, but at the same time provide commensurately lower
returns. They provide a good investment opportunity to investors who do not wish to be
completely exposed to equity markets, but is looking for higher returns than those
provided by debt funds.
AWARDS
SBI Mutual Fund (SBIMF) has been the proud recipient of the following awards
ICRA Online Award - 8 times,
CNBC TV 18 Crisil Award 2006 - 4 Awards,
The Lipper Award (Year 2005-2006)
CNBC TV 18 Crisil Mutual Fund of the Year Award 2007 and 5 Awards for our
schemes.
2009
22
2008
2007
23
2006
24
CHAPTER IV - PERFORMANCE
EVALUATION OF ELSS FUNDS IN
INDIA
Scope of the study is limited only to ELSS schemes. And moreover only those ELSS
schemes of various AMC’ s are taken in this study which are among top 7 in The
AUM as on 30 June 2009 and which are having a track record of 5 years.
The investor would naturally be interested in knowing that which scheme is better for
him. He would have to make intelligent decision that which funds to choose so that he
25
can get a good return on his investment. So to help the investor in choosing the right
fund by evaluating all the criteria is the motto of this study.
RESEARCH METHODOLOGY:
DATA COLLECTION
As because of the lack of time, only secondary data is taken for this study and on the
basis of this data all evaluation work has been done.
BETA
Beta is a fairly commonly used measure of risk. It basically indicates the level of
volatility associated with the fund as compared to the benchmark. A beta that is greater
than one means that the fund is more volatile than the benchmark, while a beta of less
than one means that the fund is less volatile than the index.
STANDARD DEVIATION
Standard Deviation allows you to evaluate the volatility of the funds. The Standard
Deviation of a fund measures this risk by measuring the degree to which the fund
fluctuates in relation to its mean return, the average return of a fund over a period of
time.
SHARPE RATIO
Sharpe ratio indicates the quality of returns. It shows the return given by fund per unit
of risk it takes. It measures fund performance in terms of total risk. The Sharpe ratio
measures the return of a mutual fund compared to the risk free rate of return. The risk
free rate of return is the 91-day t-bill rate.
26
R- SQUARED
R squared that measures the correlation. The R-squared of a fund advises investor if the
beta of a mutual fund is measured against an appropriate benchmark. R-squared values
range between 0 and 1, where 0 represents no correlation and 1 represents full
correlation. If a fund’s beta has an R-squared value that is close to 1, the beta of the
fund should be trusted. On the other hand, an R-squared value that is less than 0.5
indicates that the beta is not particularly useful because the fund is being compared
against an inappropriate benchmark.
ALPHA
Alpha is the difference between the returns one would expect from a fund, given its
beta, and the return it actually produces. An alpha of 1.0 means the fund produces a
return 1% higher than its beta would predict. An alpha of -1.0 means the fund produces
a return 1% lower.
As because of lack of time I have not calculated the various risk adjusted measures
and returns of the various ELSS schemes. Rather I have taken the secondary data so
this study relies on the accuracy of data. Secondly only those schemes of various
AMC’S are taken which are among top 7 in the AUM as on 30 June 2009. Because of
it, many other ELSS funds are not evaluated.
systematic investment plans (SIP). The dividends earned in this scheme ELSS are tax
free. The returns at the maturity period are also tax free.
ELSS is the best option for investors who are looking with a time frame
of 3-5 years. The short term weakness in the market will glide down and will earn the
investor with better returns in the long run. The performance and the ability of the
stocks in the long run can never be beaten with any other financial instruments. The
ELSS beats mostly all the equity based mutual fund schemes. The minimum investment
that can be made on ELSS is Rs.500 and multiples of it. The fund should be allotted to
the investors to those who have applied with the prescribed form before March 31
every year. From the date of allotment the fund should be hold for three years. On the
completion of the three years the investor gets the option to tender the units for
repurchase.
In the case with the death of the investor the nominee will be able to
withdraw the investment only after a period of one year from the allotment date. ELSS
units are transferable, pledged, or assigned after the lock in period of three years. A
statement of accounts or certificate of investment will be acknowledged by the fund to
the investor. The fund will be terminated at the close of the tenth year from the year of
allotment of units.
The funds will also ensure that the funds of the plan are invested to the
extent of 80% in the specified securities. The funds should make sure that the
investments should be made within a period of six months from the date of closure of
the plan every year. The pending investments would be utilized in short term money
markets or other liquid instruments. After the completion of three years with a fund
they should make sure that they hold 20% of net assets of the plan in short term money
instruments and others which would enable them to redeem the investments for those
unit holders who wish to tender the units for repurchase. ELSS is one of the best
options and an excellent mode of investments.
In short we can say Equity Linked Saving Scheme is an open-ended
equity growth scheme that is offered by mutual funds in line with existing ELSS
guidelines. The investments under this type of scheme are subject to a lock-in period of
3 years and, as per the Finance Act 2005, are allowed the benefit of income deduction
up to Rs. 1,00,000. ELSS offers the benefits of tax saving and capital gains.
FEATURES
Individuals, Hindu Undivided Families (HUFs) and companies.
The units can be easily transferred by filling out a transfer form.
Nomination facility is available with ELSS.
A maximum investment of Rs 10,000 to claim an income tax rebate of 20 %
28
ADVANTAGES OF ELSS
• Lock-in for three years prevents unnecessary withdrawals and allows your
money to grow over a period of time
• Investments in equity over a long-term delivers better returns than that of other
savings instruments and similar to other equity schemes
• Tax savings and high returns
• Long term investment in equities gives better returns than any other
investment instrument.
• It gives tax benefits
• Gives the flexibility to invest small amounts through a Systematic Investment
Plan (SIP)
TAX BENEFITS:
Dividends from mutual funds are fully exempt from income tax under Section 10(33).
Equity funds (schemes that invest 50 per cent of their funds in equity) are also exempt
from dividend tax. ELSSs offer under section 88 tax rebate on investments up to Rs
10,000 in a financial year. The difference between the selling price and the cost price is
taxable as capital gains in the year of sale, at 10 per cent or 20 per cent, depending on
whether or not you claim indexation benefits.
PLUSES
• Possibility of high returns
• Lock-in period of only three years
• Easy transfer
• Low tax incidence (10 per cent) on redemption
• Efficient service, especially in the case of private mutual funds
MINUSES
• High risk
• Difficult to choose the right fund (But not if you use the services of the
Matchmaker!
29
Lets assume you invest Rs. 1 lakh this year in an ELSS scheme and you are in the
highest taxbracket.
Invested Amount = Rs. 1,00,000/-
Income Tax saved = Rs. 30,000 (30% tax slab)
Net amount Invested = Rs. 70,000/- (I have deducted the 30,000 because you get it
back up front after your investment as income tax benefit and you effectively
invested only Rs. 70,000)
Let us assume your equity investment grows at the rate of 15% per annum.
Investment value at the end of the First year = 1,15,000/-
Investment value at the end of the Second year = 1,32,250/-
Investment value at the end of the Third year = 1,52,087/-
30
Assuming you encashed your investment at the end of the 3rd year you will get Rs.
1,52,087/-
Profit you realized = Rs. 82,087/- (You invested only Rs. 70000 effectively remember
the tax saved)
Profit percentage = 117% (For 3 years together)
RETURNS % PER YEAR = 39%
A Returns of 39% per annum is something we cannot expect in any other form of
investment. Thus ELSS schemes make one of the best investment options.
One of the best ways to invest in ELSS is to save and invest on a regular basis. A
Systematic Investment Plan (SIP) in ELSS gives the best combination of investments
available to investors. The minimum investment in an ELSS through the SIP route can
be as small as Rs 500.
SIP helps an investor take advantage of the fluctuations in the stock
markets by rupee cost averaging. Rupee cost averaging can be explained with the help
of the following example. If Rs 1,000 is invested a month at a price of Rs 20 a unit, the
investor will have bought 50 units (1,000/20). But at a price of Rs 10 per unit, he will
have bought 100 units (1000/10). Investing a fixed sum regularly means averaging out
the cost, as the investor gets fewer units when the price goes up and more when the
price goes down. An SIP ensures that an investor buys more when the markets are
falling and less when it's peaking. But if an investor backs out when the markets are
falling, he won't be buying and this will not get him to average his price, the primary
reason behind the success of investing through the SIP route.
When markets are falling, it's psychologically difficult for an investor to
enter. On the other hand, when the market is at a peak, a lot of investors enter the
market. Due to this, the investor ends up buying high and selling low. So, it's very
important to continue with the SIP even when the markets are falling.
In the current volatile market, starting an SIP would be beneficial to an investor as he
can take the benefit of highs as well as the lows and can average out his purchases.
31
WHY SIP?
A. BETA
B. STANDARD DEVIATION
C. SHARPE RATIO
D. R-SQUARED
E. ALPHAS
beta would be grossly inadequate. A beta that is greater than one means that the fund is
more volatile than the benchmark, while a beta of less than one means that the fund is
less volatile than the index. A fund with a beta very close to 1 means the fund’s
performance closely matches the index or benchmark. If, for example, a fund has a beta
of 1.03 in relation to the BSE Sensex, the fund has been moving 3% more than the
index. Therefore, if the BSE Sensex increased 10% the fund would be expected to
increase 10.30%.
Investors expecting the market to be bullish may choose funds exhibiting high
betas, which increase investors’ chances of beating the market. If the investor expects
the market to be bearish in the near future, the funds that have betas less than 1 are a
good choice because they would be expected to decline less in value than the index.
INTERPRETATION:-
According to beta the best ELSS fund is HDFC LT ADVANTAGE FUND
SBI MAGNUM TAX GAIN is at 4th place and at last is BIRLA SUN LIFE TAX
RELIEF 96
Standard Deviation allows you to evaluate the volatility of the funds. Put differently it
allows you to measure the consistency of he returns. Volatility is often a direct indicator
of the risk taken by the fund. The Standard Deviation of a fund measures this risk by
measuring the degree to which the fund fluctuates in relation to its mean return, the
average return of a fund over a period of time. A security that is volatile is also
considered higher risk because its performance may change quickly in either direction
at any moment. A fund that has a consistent four-year return of 3%, for example, would
have a mean, or average, of 3%. The Standard Deviations for this fund would then be
zero because the fund’s return in any given year does not differ formats four-tear mean
of 3%. On the other hand, a fund that in each of the last four years returned- 5%,
17%,2% and 30% will have mean return of 11%.The fund Will also exhibit a high
standard deviation because each year the return of the fund differs from the mean
33
return This fund is therefore more risky because it fluctuates widely between negative
and positive returns within a short period.
INTERPRETATION:-
According to Standard Deviation the best ELSS fund is UTI EQUITY TAX SAVINGS,
SBI MAGNUM TAX GAIN is at 4th place and at last is BIRLA SUN LIFE TAX
RELIEF 96
William Sharpe created a metric for fund performance, which enables the ranking of
funds on risk-adjusted return basis. This measure is based on the comparison of “excess
return” per unit of risk, risk being measured by standard deviation. Excess return is
defined as the actual return of the fund less risk free rate. Higher the Sharpe ratio, better
the fund. Sharpe ratio indicates the quality of returns. It shows the return given by fund
per unit of risk it takes. It measures fund performance in terms of total risk. The Sharpe
ratio measures the return of a mutual fund compared to the risk free rate of return. The
risk free rate of return is the 91-day t-bill rate. This should be similar to money market
returns. Often this ratio is used to determine if a mutual fund is able to beat the money
market. The Trimark Select Growth Fund has a Sharpe ratio over the last 5 years of
0.57. The recent range of Sharpe Ratios for global equity funds went from as low a –
1.11 to a high of 0.94. A positive Sharpe ratio means the fund did better on a risk
adjusted basis than the 91-day t-bill rate. In other words, the higher the Sharpe ratio, the
better. The Sharpe ratio tells you about history but it does not tell you anything about
the future. Just because a fund has a positive Sharpe ratio for the last 5 years does not
mean it will outperform money market instruments for the next 5 years.
34
INTERPRETATION: -
According to Sharpe Ratio the best ELSS fund is SBI MAGNUM TAX GAIN and at
last place is LIC MF TAX PLAN
The success of Beta is dependent on the correlation of a fund to its benchmark or its
index. Thus whilst considering the beta of any security, you should also consider
another statistic-R squared that measures the correlation. The R-squared of a fund
advises investor if the beta of a mutual fund is measured against an appropriate
benchmark. Measuring the correlation of a fund’s movements to that of an index, R-
squared describes the level of association between the fund’s volatility and market risk,
more specifically, the degree to which a fund’s volatility is a result of the day-to-day
fluctuations experienced by the overall market.
R-squared values range between 0 and 1, where 0 represents no correlation and 1
represents full correlation. If a fund’s beta has an R-squared value that is close to 1, the
beta of the fund should be trusted. On the other hand, an R-squared value that is less
than 0.5 indicates that the beta is not particularly useful because the fund is being
compared against an inappropriate benchmark
INTERPRETATION:-
According to R- Squared the best ELSS fund are three funds i.e. SBI MAGNUM TAX
GAIN, LIC MF TAX PLAN, UTI EQUITY TAX SAVINGS and at last is ICICI
PRUDENTIAL TAX PLAN.
Alpha is the difference between the returns one would expect from a fund, given its
beta, and the return it actually produces. An alpha of 1.0 means the fund produces a
return 1% higher than its beta would predict. An alpha of -1.0 means the fund produces
a return 1% lower. If a fund returns more than its beta then it has a positive alpha and if
it return less, then it has a negative alpha. Once the beta of a fund is known, alpha
compares the fund’s performance to that of the benchmark’s risk-adjusted returns. It
allows you to ascertain if the fund’s return outperformed the market, given the same
amount of risk.
The higher a fund’s risk level, the greater the returns it must generate in order to
produce a high alpha. Normally one would like to see a positive alpha for all of the
funds you own. But a high alpha does not means a fund is doing a bad job nor is the
vice versa true. Because alpha measures the out-performance relative to beta. So the
limitations that apply to beta would also apply to alpha. Alpha can be used to directly
measure the value added or subtracted by a fund’s manager.
• The assumption that market risk, as measured by beta, is the only risk measure
necessary;
• The strength of the fund’s correlation to a chosen benchmark such as the BSE
Sensex or the Nifty
INTERPRETATION: -
According to ALPHAS the best ELSS fund is SBI MAGNUM TAX GAIN and at last
place is LIC MF TAX PLAN
A. 1 YEAR RETURN
B. 2 YEAR RETURN
C. 3 YEAR RETURN
D. 5 YEAR RETURN
E. AUM
INTERPRETATION:-
According to 1 YEAR RETURNS the best ELSS fund is HDFC TAX SAVER, SBI
MAGNUM TAX GAIN is at 4th place and at last is UTI EQUITY TAX SAVINGS
INTERPRETATION:-
According to 2 year returns basis the best ELSS fund is HDFC TAX SAVER, SBI
MAGNUM TAX GAIN is at 3rd place at last is BIRLA TAX PLAN.
INTERPRETATION:-
According to 3 YEAR RETURNS the best ELSS fund is SBI MAGNUM TAX GAIN
and at last place is LIC MF TAX PLAN
(SOURCE: VALUERESEARCHONLINE.COM)
INTERPRETATION:-
According to 5 year returns the best ELSS Fund is SBI MAGNUM TAX GAIN and at
last place is LIC MF TAX PLAN
INTERPRETATION:-
According to AUM the best ELSS fund is SBI MAGNUM TAX GAIN and at last place
is LIC MF TAX PLAN.
CHAPTER V- ANALYSIS AND
FINDINGS
NIL
EXIT LOAD
NAME OF HOLDING % NET ASSETS
TOP 5 HODINGS
RELIANCE INDUSTRIES 6.84
LARSEN & TOUBRO 6.43
RELIANCE INFRASTRUCTURE 4.91
INFOSYS TECHNOLOGIES 4.73
JINDAL STEEL & POWER 4.34
FINANCIAL 24.23
ENERGY 17.46
METALS 10.38
ENGINEERING 10.18
TECHNOLOGY 7.30
RETURNS
(AS ON 30 JUNE 2009)
NIL
EXIT LOAD
ENERGY 20.51
SERVICES 10.56
METALS 9.95
CONSTRUCTION 8.80
ENGINEERING 8.67
BENCHMARK SENSEX
RETURNS
(As on 30 JUNE 2009)
FINANCIAL 16.55
FMCG 12.95
ENGINEERING 11.71
AUTOMOBILE 6.21
TECHNOLOGY 6.18
BENCHMARK SENSEX
RETURNS
(AS ON 30 JUNE 2009)
FINANCIAL 19.79
HEALTH CARE 11.04
ENERGY 9.42
TECHNOLOGY 9.31
FMCG 8.52
RETURNS
(AS ON 30 JUNE 2009)
ENERGY 16.56
TECHNOLOGY 12.42
ENGINEERING 11.44
HEALTH CARE 10.34
FINANCIAL 9.79
RETURNS
(AS ON 30 JUNE 2009)
FINANCIAL 24.42
ENERGY 19.91
COMMUNICATION 13.94
DIVERSIFIED 13.31
METALS 12.11
BENCHMARK SENSEX
RETURNS
(AS ON 30 JUNE 2009)
LAUNCH DATE
MARCH 1993
FUND MANAGER
JAYESH SHROFF
MIN INVESTMENT AMOUNT
RS 500
ENTRY LOAD 2.25% FOR INVESTMENTS BELOW RS 5 CRORE
EXIT LOAD
NIL
TOP 5 HODINGS NAME OF HOLDING % NET ASSETS
RETURNS
(AS ON 30 JUNE 2009)
So the above are the different schemes which are coming out as best ELSS schemes in
the different criteria. But SBI MAGNUM TAX GAIN SCHEME 1993 is the best ELSS
scheme as it has topped in the six criteria’s which are chosen for the purpose of
evaluation.
INTRODUCTION
There are a lot of investment avenues available today in the financial market for an
investor with an invest able surplus. He can invest in Bank Deposits, Corporate
Debentures, and Bonds where there is low risk but low return. He may invest in Stock
of companies where the risk is high and the returns are also proportionately high. The
recent trends in the Stock Market have shown that an average retail investor always lost
with periodic bearish tends. People began opting for portfolio managers with expertise
51
in stock markets who would invest on their behalf. Thus we had wealth management
services provided by many institutions. However they proved too costly for a small
investor. These investors have found a good shelter with the mutual funds. Mutual fund
industry has seen a lot of changes in past few years with multinational companies
coming into the country, bringing in their professional expertise in managing funds
worldwide. In the past few months there has been a consolidation phase going on in the
mutual fund industry in India. Now investors have a wide range of Schemes to choose
from depending on their individual profiles.
My study gives an overview of mutual funds – definition, types, benefits,
risks, limitations, history of mutual funds in India, latest trends, global scenarios. I have
analyzed a few prominent mutual funds schemes and have given my findings.
The main purpose of doing this project was to know about mutual fund and its
functioning. This helps to know in details about mutual fund industry right from its
inception stage, growth and future prospects.
It also helps in understanding different schemes of mutual funds like equity, income,
balance as well as the returns associated with those schemes.. Because my study
depends upon equity linked saving schemes and the performance evaluation of ELSS.
The project study was done 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.
In my project the scope is limited to some prominent mutual funds in the mutual fund
industry. I analyzed the funds depending on their schemes like equity, income, balance.
But there is so many other schemes in mutual fund industry like specialized (banking,
infrastructure, pharmacy) funds, index funds etc.
My study is mainly concentrated on equity schemes, the returns, in income
schemes the rating of CRISIL, ICRA and other credit rating agencies.
OBJECTIVE
To give a brief idea about the benefits available from Mutual Fund investment
To give an idea of the types of schemes available.
To discuss about the market trends of Mutual Fund investment.
To study some of the mutual fund schemes and analyze them
Observe the fund management process of mutual funds
Explore the recent developments in the mutual funds in India
To give an idea about the regulations of mutual funds
52
METHODOLOGY
To achieve the objective of studying the stock market data has been collected.
Research methodology carried for this study is from secondary data. The secondary
information is mostly taken from websites, books, journals, etc.
LIMITATIONS
REFERENCE BOOKS:
BIBLIOGRAPHY
www.amfiindia.com
www.sebi.gov.in
www.sbimf.com
www.mutualfundsindia.com
53
www.valueresearchonline.com
www.utimf.com
www.hdfcmf.com
www.birlamf.com
www.licmf.com
www.icicimf.com