FINANCE PROJECT

“A REPORT ON COMPARATIVE ANALYSIS OF FIVE LEADING

MUTUAL FUND COMPANIES IN INDIA “

BY GROUP – S016

GROUP MEMBERS:

1) MD IFTEKHAR
2) TILAK KESHRI
3) KULSUM AFRIN
4) ASHA SHARMA
5) ZEESHAAN IQMAR AHMED

SPECIALIZATION – FINANCE & MARKETING

BATCH – PGP/SS/2009-11.

PROJECT MENTOR – DR. ANANYA GHOSH

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 CERTFICATE OF APPROVAL

The following Report titled "Comparative Analysis of 5 Leading Mutual Fund Companies in
India" is hereby approved as a certified study in management carried out and presented in a
manner satisfactory to warrant its acceptance as a prerequisite for the award of MBA for which
it has been submitted. It is understood that by this approval the undersigned do not necessarily
endorse or approve any statement made, opinion expressed or conclusion drawn therein but
approve the Project Report only for the purpose it is submitted.

Name Signature

Faculty Examiner Dr.Ananya Ghosh ___________________

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 DECLARATION

We, Group No. S016, bonafide student of IIPM KOLKATA, hereby declare that this Project
titled “Comparative Analysis of 5 Leading Mutual Fund Companies in India” submitted by
me to IIPM KOLKATA is in partial fulfillment of requirements of MBA carried out by me
under the guidance of Dr. Ananya Ghosh. The information provided here are true to the best of
my knowledge and belief.

Signature

Place: KOLKATA

Date: 16/12/2010

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 ACKNOWLEDGEMENT

This project study is the outcome of a lot of contribution and motivation of Dr. Ananya Ghosh at
IIPM, KOLKATA. We sincerely acknowledge and thank all those people who are instrumental
in supporting, assisting and guiding me in preparing this report.

We are highly thankful to our mentor who has guided us all through our tenure of Project
Trimester.

Last but not the least, we are hugely indebted to all, our colleagues, friends, parent and relatives
who have supplemented our study and work with their priceless inputs.

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 TABLE OF CONTENT

 EXECUTIVE SUMMARY.
 BACKGROUND OF STUDY (INDUSTRY TRENDS AND COMPANY
PROFILE).
 OBJECTIVES OF THE STUDY.
 LIMITATIONS OF THE STUDY.
 RESEARCH DESIGN & METHODOLOGY.
 FINDINGS - DATA ANALYSIS AND INTERPRETATION.
 CONCLUSION.
 RECOMMENDATIONS AND SUGGESTIONS.
 BIBLIOGRAPHY
 ANNEXURE

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 EXECUTIVE SUMMARY

As a part of our study curriculum it is necessary to conduct a project in finance specialization. It

provide us an opportunity to understand the particular topic in depth and which leads to through
to that topic. Our topic for the project is titled as “Comparative Analysis of 5 Leading Mutual
Fund Companies in India in which emphasis given to the study of different mutual funds in
respect to the NAV’s performance, growth and customer perception in it.

Total Investment scenario is changing, in past people were not interested in investment because
there were no good options available for investment. Now there are many options available for
investment like life Insurance, Mutual fund, Equity market, Real estate, etc.
Presently one of the attractive option for investment available is Mutual Fund. Mutual Funds are
providing good returns. So while investing people tend more to words mutual fund as they are
providing more returns than Insurance and bank deposits also, with a good investment portfolio.
Mutual fund companies are providing more liquidity.

Since mutual funds are a relatively recent phenomenon in India, general public or investors
don’t have clarity about this concept. As we have started witnessing the concept of more saving
now being entrusted to the funds than to keeping it in banks. So it is very important to manage
investor’s investment objective and perception efficiently. By efficient we mean which reduces
the risk of investor and increases return on the other hand.

This report has divided into two phases. First phase covered investor’s background of the study,
Introduction of mutual funds, Indian Mutual Fund industry, past trend and present growth as
well as future opportunities in the Mutual Fund Industry. Investment options available with
individuals in Mutual Funds and at last techniques of managing a client’s investment pattern in
mutual funds.

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Second phase of the report covered different schemes of the five selected Mutual Fund where we
have compared Mutual Fund of HDFC, SBI, Birla Sun Life, Prudential ICICI and TATA with
its NAVs performance and growth and investors perceptions of these funds and their preference
for investment with their investment objectives is identified through questionnaire survey.

At the end we have identified future growth and opportunities available in Mutual Fund Industry
and some recommendation to the prospective investor for investing in Mutual Fund for better
return and growth.

BACKGROUND OF THE STUDY

MUTUAL FUND – AN INTRODUCTION

CONCEPT

A Mutual Fund is a trust that pools the savings of a number of investors who share a common
financial goal. The money thus collected is then invested in capital market instruments such as
shares, debentures and other securities. The income earned through these investments and the
capital appreciation realised are shared by its unit holders in proportion to the number of units
owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it
offers an opportunity to invest in a diversified, professionally managed basket of securities at a
relatively low cost. The flow chart below describes broadly the working of a mutual fund:

In the above graph shows how Mutual Fund works and how investor earns money by investing
in the Mutual Fund. Investors put their saving as an investment in Mutual Fund. The Fund
Manager who is a person who takes the decisions where the money should be invested in

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securities according to the scheme’s objective. Securities include Equities, Debentures, Govt.
Securities, Bonds, and Commercial Paper etc. These Securities generates returns to the Fund
Manager. The Fund Manager passes back return to the investor.

ORGANISATION OF A MUTUAL FUND

There are many entities involved and the diagram below illustrates the organizational set up of a
mutual fund:

TYPES OF MUTUAL FUND SCHEMES

Wide varieties of Mutual Fund Schemes exist to cater to the needs such as financial position,
risk tolerance and return expectations etc. Below gives an overview into the existing types of
schemes in the Industry :

➢ By Structure:

Open-End Funds:
 Available for sale and repurchase at all times based on the net asset values.
 Unit capital of the fund is not fixed.
 Fund size and its total investment go up if more new subscriptions come in than

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 redemptions and vice versa.

Close-End Funds:
 One time sale of fixed number of units.
 Investors are not allowed to buy or redeem the units directly from the funds. Some funds
offer repurchase after a fixed period.
 Listed on stock exchange and investors can buy or sell units through exchange. May be
traded at a discount or premium to NAV based on investor’s perception about the funds
future performance and other market factors.
 A closed-end fund has a stipulated maturity period which generally ranging from 3 to 15
years. The fund is open for subscription only during a specified period. Investors can
invest in the scheme at the time of the initial public issue and thereafter they can buy or
sell the units of the scheme on the stock exchanges where they are listed. In order to
provide an exit route to the investors, some close-ended funds give an option of selling
back the units to the Mutual Fund through periodic repurchase at NAV related prices.
SEBI Regulations stipulate that at least one of the two exit routes is provided to the
investor.

Interval Funds:
Interval funds combine the features of open-ended and close-ended schemes. They are open for
sale or redemption during pre-determined intervals at NAV related prices.

➢ By Investment Objective:-
Growth and Income Schemes :
Growth and Income funds are mutual funds that are a mix between income (bond) funds and
growth (stock) funds. These funds split their holdings between bonds and stocks to try to give
investors stable income through bonds as well as growth through stocks. These funds perform
pretty well but because they hold a large amount of bonds, they are probably better for investors
who are less willing to take risk or those who are nearing their financial goal (such as
retirement).

Balanced Funds :

 Has a portfolio of debt instrument, convertible securities, preference and equity shares.
 Almost equal proportion of debt/money market securities and equities. Normally funds
maintain a ratio of 55:45 or 60:40 some funds allocate a flexible proportion based on
market conditions.
 Aim is to gain income, capital appreciation and preservation of capital.
 Ideal for investors for a conservative and long term orientation.

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Money/Cash Market Funds :

Instruments having less than one year maturity -

 Treasury bills issued by government

 Certificates of deposit issued by governments
 Commercial paper issued by companies
 Inter bank call money
 Aim to provide easy liquidity, preservation of capital and moderate income.

➢ Other Schemes :

Tax saving Schemes

These schemes offer tax rebates to the investors under specific provisions of the Indian Income
Tax laws as the Government offers tax incentives for investment in specified avenues.
Investments made in Equity Linked Savings Schemes (ELSS) and pension Schemes are allowed
as deduction u/s 88 of the Income Tax Act, 1961. The Act also provides opportunities to
investors to save capital gains u/s 54EA by investing in Mutual Funds, provided the capital asset
has been sold prior to April 1, 2000 and the amount is invested before September 30, 2000.

Special Schemes:-

Industry Specific Schemes

Industry Specific Schemes invest only in the industries specified in the offer document. The
investment of these funds is limited to specific industries like InfoTech, FMCG and
Pharmaceuticals etc.

Index Schemes
Index Funds attempt to replicate the performance of a particular index such as the BSE Sense or
the NSE 50 Portfolio Management In Mutual Funds

Sector Schemes
Sector Funds are those, which invest exclusively in a specified industry or a group of industries
or various segments such as 'A' Group shares or initial public offerings.

HISTORY OF THE INDIAN MUTUAL FUND INDUSTRY

The mutual fund industry in India started in 1963 with the formation of Unit Trust of India, at

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the initiative of the Government of India and Reserve Bank of India. The history of mutual
funds in India can be broadly divided into four distinct phases.

First Phase – 1964-87

Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up by the
Reserve Bank of India and functioned under the Regulatory and administrative control of the
Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial
Development Bank of India (IDBI) took over the regulatory and administrative control in place
of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had
Rs.6,700 crores of assets under management.

Second Phase – 1987-1993 (Entry of Public Sector Funds)

1987 marked the entry of non- UTI, public sector mutual funds set up by public sector banks
and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India
(GIC). SBI Mutual Fund was the first non- UTI Mutual Fund established in June 1987 followed
by Canbank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank
Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC
established its mutual fund in June 1989 while GIC had set up its mutual fund in December
1990.

At the end of 1993, the mutual fund industry had assets under management of Rs.47,004 crores.

Third Phase – 1993-2003 (Entry of Private Sector Funds)

With the entry of private sector funds in 1993, a new era started in the Indian mutual fund
industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year in
which the first Mutual Fund Regulations came into being, under which all mutual funds, except
UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged with
Franklin Templeton) was the first private sector mutual fund registered in July 1993.

The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and
revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI (Mutual
Fund) Regulations 1996.

The number of mutual fund houses went on increasing, with many foreign mutual funds setting
up funds in India and also the industry has witnessed several mergers and acquisitions. As at the
end of January 2003, there were 33 mutual funds with total assets of Rs. 1,21,805 crores. The
Unit Trust of India with Rs.44,541 crores of assets under management was way ahead of other

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mutual funds.

Fourth Phase – since February 2003

In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated
into two separate entities. One is the Specified Undertaking of the Unit Trust of India with
assets under management of Rs.29,835 crores as at the end of January 2003, representing
broadly, the assets of US 64 scheme, assured return and certain other schemes. The Specified
Undertaking of Unit Trust of India, functioning under an administrator and under the rules
framed by Government of India and does not come under the purview of the Mutual Fund
Regulations.

The second is the UTI Mutual Fund, sponsored by SBI, PNB, BOB and LIC. It is registered
with SEBI and functions under the Mutual Fund Regulations. With the bifurcation of the
erstwhile UTI which had in March 2000 more than Rs.76,000 crores of assets under
management and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual
Fund Regulations, and with recent mergers taking place among different private sector funds,
the mutual fund industry has entered its current phase of consolidation and growth.

The graph indicates the growth of assets over the years.

Regulatory body for Mutual Fund in India :

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Mutual Funds in India are governed by the SEBI (Mutual Fund) Regulations 1996 as amended
from time to time. All the mutual funds must get registered with SEBI.

The only exception is the UTI, since it is a corporation formed under a separate Act of
Parliament.
It is mandatory to have a three tier structure :-

Sponsor - The Sponsor is the promoter and he appoints the Trustees

Trustee - who are responsible to the investors of the fund.
Asset Management Company - AMC is the business face of the mutual fund as it manages all
the affairs of the fund.

AMFI
Association of Mutual Funds in India (AMFI) incorporated in Aug 1995 is the Umbrella body of
all the mutual fund registered with SEBI. It is non profit organization committed to developed
the Indian mutual fund industry on professional, healthy & ethical lines & to enhance and
maintain standards in all areas with a view to protecting & promoting the interests of Mutual
Funds and their unit holders.

COMPANIES IN INDIA IN MUTUAL FUND INDUSTRY.

1. ABN AMRO Mutual Fund

2. Birla Sun Life Mutual Fund
3. Bank of Baroda Mutual Fund (BOB Mutual Fund)
4. HDFC Mutual Fund
5. HSBC Mutual Fund
6. ING Vysya Mutual Fund
7. Prudential ICICI Mutual Fund
8. Sahara Mutual Fund
9. State Bank of India Mutual Fund
10. Tata Mutual Fund
11.Kotak Mahindra Mutual Fund
12. Unit Trust of India Mutual Fund
13.Reliance Mutual Fund
14.Standard Chartered Mutual Fund
15. Franklin Templeton India Mutual Fund
16. Morgan Stanley Mutual Fund India

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17.Escorts Mutual Fund
18. Alliance Capital Mutual Fund
19.Benchmark Mutual Fund
20.Canbank Mutual Fund
21.Chola Mutual Fund
22.GIC Mutual Fund
23.LIC Mutual Fund
24.Fidelity Mutual Fund
25.IL&FS Mutual Fund
26.DSP Merill lynch Mutual Fund
27.Sundaram Mutual Fund
28.Principal Mutual Fund
29.Taurus Mutual Fund
30.Deutsche Mutual fund
31.IDBI Investment Company Ltd.
32. Bank of India Mutual Fund

For the comparative analysis we have selected the five leading Mutual Companies of India and
the brief profile of the those companies are given below :

1) Birla Sun Life Mutual Fund

Birla Sun Life Mutual Fund is the joint venture of Aditya Birla Group and Sun Life
Financial. Sun Life Financial is a global organization evolved in 1871 and is being
represented in Canada, the US, the Philippines, Japan, Indonesia and Bermuda apart
from India. Birla Sun Life Mutual Fund follows a conservative long-term approach to
investment. Recently it crossed AUM of Rs. 10,000 crores.

2) HDFC Mutual Fund

HDFC Mutual Fund was setup on June 30, 2000 with two sponsors namely Housing
Development Finance Corporation Limited and Standard Life Investments Limited.

3) State Bank of India Mutual Fund

State Bank of India Mutual Fund is the first Bank sponsored Mutual Fund to launch
offshore fund, the India Magnum Fund with a corpus of Rs. 225 cr. approximately.
Today it is the largest Bank sponsored Mutual Fund in India. They have already
launched 35 Schemes out of which 15 have already yielded handsome returns to

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 investors. State Bank of India Mutual Fund has more than Rs. 5,500 Crores as AUM.
Now it has an investor base of over 8 Lakhs spread over 18 schemes.

4) Tata Mutual Fund

Tata Mutual Fund (TMF) is a Trust under the Indian Trust Act, 1882. The sponsors for
Tata Mutual Fund are Tata Sons Ltd., and Tata Investment Corporation Ltd. The
investment manager is Tata Asset Management Limited and its Tata Trustee Company
Pvt. Limited. Tata Asset Management Limited's is one of the fastest in the country with
more than Rs. 7,703 crores (as on April 30, 2005) of AUM.

5) Prudential ICICI Mutual Fund

The mutual fund of ICICI is a joint venture with Prudential Plc. of America, one of the
largest life insurance companies in the USA. Prudential ICICI Mutual Fund was setup on
13th of October, 1993 with two sponsors, Prudential Plc. and ICICI Ltd. The Trustee
Company formed is Prudential ICICI Trust Ltd. and the AMC is Prudential ICICI Asset
Management Company Limited incorporated on 22nd of June, 1993.

➢ Objective of the study

Primary Objectives:

 The main objective of this study is to do an In-depth analysis of the Indian Mutual Fund
Industry by taking sample of funds of different mutual fund companies and comparing it
with others.

Secondary Objectives:

 To study the concept of Mutual fund and its various types.

 To study the history and growth of the Indian Mutual Fund Industry.
 To explore the recent developments in the mutual funds in India
 To discuss about the market trends of Mutual Fund investment.
 To give an idea of the different types of mutual fund schemes available in India.
 To give a brief idea about the benefits available from Mutual Fund investment.
 To observe the fund management process of mutual funds.
 To give an idea about the regulations of mutual funds.
 To study some of the mutual fund schemes and analyse them with comparative analysis.
 To evaluate the overall performance, growth and return of the selected funds.
 To understand the investor’s preference about the mutual fund.

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  To analyse the future prospect of the Indian Mutual Fund Industry.
 To make necessary recommendations as applicable.

➢ Limitations of the study:

 The study is conducted only in Kolkata.

 The time constraint was one of the major problems because of which the sample size is
limited to only 150 respondents for primary research.
 The study is limited to selected mutual fund schemes.

RESEARCH DESIGN AND METHODOLOGY

Methodology Adopted

Methodology basically means the selection of the various methods and techniques in the
research-conducted. The various steps include:

1. Selection of Sample
2. Application of various tools and techniques to obtain relevant information related to the case.
3. Collection of relevant data
4. Analysis and interpretation of data
5. Generation of final report

Collection of data

The data is collected both from the primary and secondary sources.

Primary Source

• Questionnaire Survey.

Secondary Source

• Internet

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 • Newspapers

This project will give an insight view of mutual fund schemes of the above selected five leading
Mutual Fund Companies in India so as to differentiate the positive and negative aspects of each
company in respect to their:

 Asset size (NAVs)

 Existing schemes
 Investors’ preference
 Future prospects

Defining Net Assets Value

The net asset value or NAV of a mutual fund is the price your fund pays you per share when you
sell shares.
When investors purchase a mutual fund, they own a piece of an investment portfolio. They
share in the gains, losses, and expenses in proportion to the amount they have invested in the
fund. In other words, if the fund is dissolved or liquidated, by selling off all the assets in the
fund, this is the amount that the shareholders would collectively own. This gives rise to the
concept of net asset value per unit, which is the value, represented by the ownership of one unit
in the fund.

Calculating NAV: At the close of every trading day, a mutual fund company adds up the value
of all the securities in its portfolio and subtracts its expenses (e.g., management fees,
administrative expenses, advertising costs). The balance is divided by the number of shares
owned by shareholders to arrive at the dollar value of one share of the mutual fund.

For example - A fund is valued at INR 52,500,000 (total assets minus expenses). There are
3,500,000 outstanding shares owned by investors. INR 52,500,000 divided by 3,500,000 shares
equals an NAV of INR 15 per share.

Existing Schemes of selected Mutual Funds

In the table below given the list of all the existing schemes of the five selected Mutual Funds
along with their average NAVs for the comparision purpose.

Average NAVs is calculated for each type of fund by adding the value of NAVs of all the funds
belonging to same category and diving it by number of funds in the same category.

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For example: Average NAVs of Birla Sun Life Open Ended Income Fund.

= Sum of value of all NAVs of Birla Sun Life Open Ended Income Fund

Total number of Birla Sun Life Open Ended Income Fund

= 13.57567123

FINDINGS
AVERAGE NAVs
Average NAVs
Open Ended Birla Sun HDFC ICICI SBI TATA
Funds Life
Income 13.57567123 13.1393108 10.8111231 10.8036 209.468447
7 6 9
Growth 36.02286393 89.8163823 27.228304 29.4083028 32.2743540
5 6 5
Balanced 123.3375 66.8065 24.7542666 41.86 42.678
7
Liquid 13.39082105 13.3675714 121.713059 12.47745 1203.47178
3 3 1
Gilt 15.5067 14.13365 18.1083571 12.2813916 8.21891538
4 7 5
ELSS 43.0525 127.9985 87.945 55.66 49.3426
Floating Rate 11.194 13.22635 N.A 12.25758 11.5046846
2
Domestic 28.83236667 N.A 24.98586 N.A N.A
Gold ETFs N.A 1933.4449 1951.0649 1924.5885 N.A
Other ETFs N.A N.A 210.5275 N.A N.A

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 Average NAVs
Close Ended Birla Sun HDFC ICICI SBI TATA
Funds Life
Income 10.06786391 6.674789873 10.59741505 10.33121157 2.277398052
Growth 13.1554 14.72575 14.98714286 N.A 8.58335
Balanced N.A N.A N.A N.A 6.179575
Liquid N.A N.A N.A N.A N.A
Gilt N.A N.A N.A N.A N.A
ELSS 207.78 N.A 12.92 13.34 17.85966667
Floating Rate N.A N.A N.A N.A N.A
Domestic N.A N.A N.A N.A N.A
Gold ETFs N.A N.A N.A N.A N.A
Other ETFs N.A N.A N.A N.A N.A

The comparison of the funds is done using the Bar graphs and thus arriving at a conclusion using
those graphs.

OPEN ENDED FUNDS

Income
Open Ended Birla Sun HDFC ICICI SBI TATA
Funds Life
Avg NAVs 13.57567123 13.1393108 10.8111231 10.80 209.468447
7 6 36 9

Analysis and Interpretation:

• It can be seen that Open Ended Income Fund of TATA has the highest average NAVs
compare to all other four funds in this category in the market indicate that this fund has
the highest value in terms of its fund size and has better performance in the market and
this is because it has some of Ex-dividend and Cum dividend fund of highest NAVs so
the average NAVs rses.
• Where as the all other four funds have almost same average NAVs.

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 Growth
Open Ended Birla Sun HDFC SBIICICI TATA
Funds Life
Avg NAVs 36.0228639 89.8163823 27.22830 29.4083028 32.2743540
3 5 4 6 5

Analysis and Interpretation:

• Here we see that Open Ended Growth Fund of HDFC has the highest average NAVs
compare to all the other four funds. This fund performs better in this category as it has
the highest average NAV, where as other four funds in the same category have almost
same average NAVs.

Balanced
Open Ended Birla Sun Life HDFC ICICI SBI TATA
Funds
Avg NAVs 123.3375 66.8065 24.75426667 41.86 42.678

Analysis and Interpretation:

Here Open Ended Balanced fund of Birla Sun Life has the highest average NAVs compare to all
other four funds in the same catgeory. It has very less number of funds in this category and with
good NAVs it lead to highest average NAVs and it is performing better in this category.

The second best performing is HDFC followed by TATA and SBI funds and least performer
among all five is ICICI Prudential fund with the lowest average NAVs.

Liquid
Open Ended Birla Sun HDFC ICICI SBI TATA
Funds Life
Avg NAVs 13.3908210 13.3675714 121.713059 12.4774 1203.47178
5 3 3 5 1

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Analysis and Interpretation:

• Open Ended Liquid fund of TATA has the highest average NAVs compare to all other
funds in this category indicating greater penetration of this fund in the market with good
brand of TATA.
• Where as the Funds with the lowest average NAVs are HDFC, SBI and Birla Sun Life
among the above five funds.

Gilt
Open Ended Birla Sun HDFC ICICI SBI TATA
Funds Life
Avg NAVs 15.5067 14.1336 18.1083571 12.2813916 8.21891538
5 4 7 5

Analysis and Interpretation:

• Here all the funds has more or less same average NAVs but at top list is Prudential ICiCI
fund and at bottom TATA fund.

ELSS
Open Ended Birla Sun Life HDFC ICICI SBI TATA
Funds
Avg NAVs 43.0525 127.9985 87.945 55.66 49.3426

Analysis and Interpreation:

• In this category HDFC fund preferred the best with highest average NAVs compare to
other four funds, where as second best performer is Prudential ICICI fund and the other
considered to be same with their almost same average NAVs.

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 Floating Rate
Open Ended Birla Sun Life HDFC ICI SBI TATA
Funds CI
Avg NAVs 11.194 13.22635 0 12.25758 11.50468462

Analysis and Interpretation:

• It is found that Prudential ICICI fund has the nil average NAVs as these it does not have
any fund in this category, where as other four funds have more or less same average
NAVs.

Domestic
Open Ended Birla Sun Life HDFC ICICI SBI TATA
Funds
Avg NAVs 28.83236667 0 24.98586 0 0

Analysis and Interpretation:

• In this category Birla Sun Life and Prudential ICICI are the two top performing funds but
the other three funds have zero average NAVs as these does not have any fund in this
category.

Gold ETFs
Open Ended Birla Sun Life HDFC ICICI SBI TAT
Funds A
Avg NAVs 0 1933.4449 1951.0649 1924.5885 0

Analysis and Interpretation:

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 • It is found that this is a very top performing category which prove from its highest
average NAVs of HDFC, Prudential ICICI and SBI mutual funds but the other two
TATA and Birla Sun Life does not have any funds in this category.

Other ETFs
Open Ended Birla Sun Life HDFC ICICI SBI TATA
Funds
Avg NAVs 0 0 210.5275 0 0

Analysis and Interpretation:

• In this category only Prudential ICICI has its funds and other does not have any funds at
all.

CLOSE ENDED FUNDS

Income
Close Ended Birla Sun HDFC ICICI SBI TATA
Funds Life
Avg NAVs 10.067863 6.6747898 10.597415 10.331211 2.2773980
91 73 05 57 52

Analysis and Interpretation:

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 • Close Ended Income funds of Birla Sun Life, Prudential ICICI and SBI are being
preferred most by the investors which shows from average NAVs but least preferred is
TATA in this category as it has lowest average NAVs.

Growth
Close Ended Birla Sun Life HDFC ICICI S TATA
Funds BI
Avg NAVs 13.1554 14.72575 14.98714286 0 8.58335

Analysis and Interpretation:

• In this category only SBI does not have any funds but the other four funds have almost
same average NAVs which indcate that thses four funds perform well in the market.

Balanced
Close Ended Birla Sun Life HDFC ICICI SBI TATA
Funds
Avg NAVs 0 0 0 0 6.179575

Analysis and Interpretation:

• In this category only TATA has its fund but the other four does not have any funds.

ELSS
Close Ended Birla Sun Life HDFC ICICI SBI TATA
Funds
Avg NAVs 207.78 0 12.92 13.34 17.85966667

Analysis and Interpretation:

• In this category the top performing fund is Birla Sun Life with the highest average NAVs
compared to other four funds but HDFC does not any funds in this category.

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 QUESTIONNAIRE SURVEY AND ANALYSIS

ANALYSIS OF DATA COLLECTION

SAMPLE SIZE OF POPULATION:-
According to the data collection method adopted, the sample size of the population is 150.
Thus, N=150
After collecting the data the following facts were found out:-

1) Are you aware of Mutual Fund Investment ?

Awareness Yes No Total

No of respondents 120 30 150

Analysis and Interpretation:

• Out of the total sample size of 150 respondents it has been found that 120 people are
aware of Mutual funds and the rest 30 people have no idea about the Mutual Funds
investment, so the further analysis and interpretation are based on the response given by
those 120 respondents. So the new Sample size of population becomes (N) = 120.

1) Gender of the respondents :

Gender Male Female Total
No of respondents 88 32 120

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Analysis and Interpretation:

• It has been found that out of 120 respondents, 88 respondents are male and 32
respondents are female who invest in the financial market. The reason for this is only
because more number of male are the money earner in the society as compared to
female.

1) Age of the respondents :

Age 18-25yrs 26-35yrs 36-45yrs More than 45 yrs Total

No of respondents 12 26 47 35 120

Analysis and Interpretation:

• It has been found that maximum number of people who belong to the age group of (36-
45)yrs are 47 and age more 45yrs are 35, are more interested in the financial market
because they have the surplus fund in their hand to invest in the financial market.
• Whereas slightly less number of people belong to age group of (26-35)yrs are 26 who are
in the growth stage of their earning and very less number of people in the age group of
(18-25)yrs are 12, who are in the starting stage of their earning, invest in the market.
• So the financial products need to be design in such a way that it should meet the
requirements and potential of different people belonging to different age groups.

1) Monthly income level of the respondents :

Income Level 15000-30000 31000-60000 61000-1 lac More than 1 Lac Total
No of respondents 33 45 28 14 120

Analysis and Interpretation:

• Maximum number of people who belong to the monthly income level of Rs(31000-
60000) are 45, who invest heavily in the financial market followed by 33 people and 28
people of monthly income level of Rs(15000-30000) and Rs(31000-60000) respectively.

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 • Whereas less number of people who has monthly income level more than Rs. 1 lac are
14, who invest in the financial market. The reason for this is people with higher income
are more interested in business, real estate and commodities.

1) Preference of respondents for investment :

Investment Bank Insuranc Mutual Real Estate Shares Commodities Total
Options Deposit e Fund
No of respondents 10 27 28 8 32 15 120

Analysis and Interpretation:

• It has been found that maximum number of people prefer investing in shares and Mutual
funds as they are more aggressive investors who would like to take risk and earn
maximum return.
• Quite good number of people 27 out of 120 prefer Insurance for investment which shows
that they are more conservative, take less risk. They generally prefer future benefit plan
like Retirement plan, financial requirement for their children education purpose etc.
• 15 out of 120 people prefer investing in commodities like Gold as it more safer form of
investment.
• 10 out 120 prefer bank deposit as they want regular flow of income with minor bank
interest.
• And 8 out 120 prefer real estate for investment as they want long term growth for their
wealth.
The above analysis shows the investment behaviour and preference of the respondents.

1) Do respondents invest in Mutual fund ?

Investment Details Yes No Total

No of respondents 87 33 120

Analysis and Interpretation:

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 • It has been found that maximum number of respondents that is 87 out of 120 do really
invest in Mutual Funds. These respondents consider Mutual Funds as good form of
investment which can add value to their portfolio and thus maximize their wealth.
• Only 33 respondents out of 120 do not prefer at all Mutual Funds for investment in their
portfolio of assets.
• It can be further interpreted that those who do not prefer Mutual Fund for investment at
all, is because of unawareness of its benefits, so the fund manager need to market it
properly to attract all those untapped prospects.

1) Objective of respondents for investment :

Objectives Regular Income Growth Liquidit Speculatio Tax Total
y n Savings
No of 34 12 19 25 30 120
respondents

Analysis and Interpretation:

• It has been found that 34 out of 120 respondents have objective of regular income
through their investment so they go for bank deposit and stock market investment for
short term gain.
• 30 out of 120 respondents have objectives of tax saving so they prefer tax saving plan
like Insurance.
• 25 and 19 out of 120 respondents respectively are more risky, so they prefer investing in
shares or stock market related securities for speculation purpose and for easy liquidity.
• Whereas 12 out 120 respondents have the objective of growth from their investment in
the long term so they invest in real estate or long term growth related fund or securities.
The above analysis shows the objectives of the respondents and by analyzing their objective
Mutual Funds can be designed to meet their requirements.

1) Which type of Mutual Fund do respondents prefer?

Type Open Ended Close Ended Total

No of respondents 53 67 120

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Analysis and Interpretation:

• Here 67 out of 120 respondents prefer Close Ended Mutual Funds as they invest for long
term benefits.
• Whereas 53 out of 120 respondents prefer Open Ended Mutual Funds as they invest for
short term benefits and quick return.
• Therefore it seems more or less an equal proportion of preference among investors, so
the fund has to be designed in keeping the preference of these investors.

1) Rank the following Mutual Fund in (1-5) rating on the basis of your preference for
investment?

Ranking of Birla Sun HDFC ICICI SBI TATA Total

Funds Life Prudential
Rank 1 20 35 30 16 19 120
Rank 2 25 15 38 28 14 120
Rank 3 37 22 29 14 18 120
Rank 4 25 30 28 26 11 120
Rank 5 40 22 17 26 15 120

Analysis and Interpretation:

• In rank 1 position it is found that HDFC Mutual Fund been the most favourite of the
investors with maximum preference of 35 respondents followed by ICICI Prudential and
Birla Sun Life Fund with preference of 30 and 20 respondents respectively.
• In rank 2 position it is seen that ICICI Prudential is preferred most by 38 respondents
followed by SBI and Birla Sun Life by 28 and 25 respondents respectively.
• In rank 3 position we see Birla Sun Life is preferred most by 37 respondents followed by
ICICI Prudential and HDFC by 29 and 22 respondents respectively.
• In rank 4 position except TATA Fund all the other four funds are preferred mostly by the
respondents.
• In rank 5 position Birla Sun Life is preferred most by 40 respondents whereas other four
funds got more or less equal preference by the respondents.

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Thus it can be interpreted that the above ranking preference given by the respondents/investors
on the basis of their satisfaction level with those funds, so it shows that most of the investors are
satisfied with HDFC Mutual Fund and the least satisfied with TATA Mutual Fund.

1) Respondents feedback/view point about Mutual Fund :

Analysis and Interpretation:

• From the questionnaire survey we have found that most of the respondents who invest in
Mutual Funds are very much satisfied with their return on investment and the growth in
their Net Asset Value (NAV) of Fund , that is the overall wealth maximization from their
investment.
• They considered it to be very safe investment, good return, greater liquidity, can be used
for long term financial planning and satisfied their basic need from investment that it is
source of regular income.
• And those who do not invest in mutual fund at all is only because of unawareness of its
benefits or they considered it to be very risky.
Thus it can be concluded that the fund manager must take into consideration of all these factors
and design funds accordingly as well as the marketing of these funds in a proper manner is very
important to spread the awareness of its benefits.

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 CONCLUSION

The future of primary market is growing at a very high pace. Taking this thing into
consideration, there are lots of opportunities for the Mutual Funds Munds to tap the golden
opportunities from the Indian market.
There is little awareness about mutual fund in India; people have accepted it as a one of the
major investment avenue. Mutual funds will become one of the sought after investment avenues.
As far as the other investment products are concerned, they have a ready market. The only thing,
which it needs to focus on, is that it should have a strong network so that prompt services and
availability of forms is made available to the investor at a short notice, and if it keeps the
traditional base for marketing in India, which is a price sensitive market, we can say that Mutual
Funds has a great future ahead.
The performance of mutual funds in India in the initial phase was not even closer to satisfactory
level. People rarely understood, and of course investing was out of question. But yes, some 24
million shareholders were accustomed with guaranteed high returns by the beginning of
liberalization of the industry in 1992. This good record of UTI became marketing tool for new
entrants. The expectations of investors touched the sky in profitability factor. However, people
were miles away from the preparedness of risks factor after the liberalization.
The Future of Mutual Funds In India is quite bright. Mutual Funds are one of the most popular
forms of investments as these funds are diversification, professional management, and liquidity.
Industry AUM is likely to continue to grow in the range of 15 to 25 percent from the period
2010 to 2015.

The government is also helping in boosting mutual fund industry. Government is emphasizing a
lot on infrastructure development and social spending and yet targeting a lower fiscal deficit.
FIIs continued to be positive on emerging markets in general and the Indian markets in
particular. FIIs buying have considerable portion in mutual funds buying.
In the event of a quick economic revival and positive reinforcement of growth drivers identified,
KPMG in India is of the view that the Indian Mutual Fund industry may grow at the rate of 22-

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25 percent in the period from 2010 to 2015, resulting in AUM of INR 16,000 to 18,000 billion
in 2015.

Key growth drivers for this scenario include:

• Increased retail investor participation with a preference for mutual funds over other asset
classes perceived to be more risky. This could result in the fulfilment of growing financial
aspirations, enabled by rising disposable incomes and increased financial savings.

• Innovations in distribution driven by increasein the number of certified IFAs and banks selling
mutual Funds focusing on Tier 2 and Tier 3 town.

• Increase in institutional participation triggered by rising corporate revenues with increased

economic activity.

Retail Segment

• Increased focus on growing investor awareness and increasing financial literacy is expected,
resulting in an increase in the contribution of the retail segment to the industry AUM in the
range of 46-48 percent by 2015, from 36 percent as of 2008 as mentioned earlier.

• Domestic players expected to tap the overseas markets to grow their AUM through alliances
with global players.

• HNIs and Mass Affluent segments may dominate the retail segment.

• Average holding period for mutual funds and average ticket size of investments in mutual
funds likely to remain unchanged.

Institutional Segment

• Institutional segment likely to witness the emergence of a new category of SMEs seeking
advice on managing their funds.

Market focus

• Greater participation expected from Tier 2 cities and Tier 3towns, including rural centres.

Banks

The public sector network of nationalised banks and post offices likely to increase their focus on
the distribution of mutual funds.

• Entry of public sector banks as mutual fund manufacturers expected to increase their focus on
mutual fund distribution.

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• Private banks providing financial advice to HNIs expected to marginally increase their market
share.

Other channels

• India likely to witness the entry of global fund super-markets enabled by regulatory changes.

• Cooperative sector, though beset with internal administrative issues, likely to emerge as
another channel which should be tapped by Mutual Funds.

• Tapping the large network of NGOs, recognised by local authorities to interact and reach out to
the lower middle class and poorer segments of population to increase mutual fund penetration.

• Distributors likely to explore the possibility of innovations such as a common online platform
and the usage of debit and credit cards for transactions.

Key Points:

• Almost 100% growth in the last 6 years.(excepting 2008)

• In India saving rate is over 30%, highest in the world. Only channel zing these savings in
mutual funds sector is required.
• Indian market has some 70 mutual funds which are much less than US having more than
800. So there is a big scope for expansion.
• 'B' and 'C' class cities are growing rapidly. Today most of the mutual funds are
concentrating on the 'A' class cities. Soon they will find scope in the growing cities.
• SEBI allowing the MFs to launch commodity mutual funds.
• This year budget has increased the limit of investment in overseas market by mutual
funds to 33-35%.
• During last financial year investment habit of India has increased by 25 % and it is
expected to grow by 30 % this year.

SUGGESTIONS & RECOMMENDATIONS

THE GROUND RULES OF MUTUAL FUND INVESTING

1. Assess yourself: Self-assessment of one’s needs; expectations and risk profile is of
prime importance failing which; one will make more mistakes in putting money in right
places than otherwise.
2. Try to understand where the money is going: One can lose substantially if one picks
the wrong kind of mutual fund. In order to avoid any confusion it is better to go through
the literature such as offer document and fact sheets that mutual fund companies provide
on their funds.

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3. Don't rush in picking funds, think first: One first has to decide what he wants the
money for and it is this investment goal that should be the guiding light for all
investments done. It is thus important to know the risks associated with the fund and
align it with the quantum of risk one is willing to take. One should take a look at the
portfolio of the funds for the purpose. Excessive exposure to any specific sector should
be avoided, as it will only add to the risk of the entire portfolio.
4. Invest. Don’t speculate: A common investor is limited in the degree of risk that he is
willing to take. It is thus of key importance that there is thought given to the process of
investment and to the time horizon of the intended investment. One should abstain from
speculating which in other words would mean getting out of one fund and investing in
another with the intention of making quick money
5. Don’t put all the eggs in one basket: This old age rule is of utmost importance. No
matter what the risk profile of a person is, it is always advisable to diversify the risks
associated. So putting one’s money in different asset classes is generally the best option
as it averages the risks in each category.
6. Do your homework: It is important for all investors to research the avenues available to
them irrespective of the investor category they belong to. This is important because an
informed investor is in a better decision to make right decisions. Having identified the
risks associated with the investment is important and so one should try to know all
aspects associated with it. Asking the intermediaries is one of the ways to take care of the
problem.
7. Keep track of your investments: It is very important is to keep track of your investment
as the way they are performing in the market. If the market is beginning to enter a
bearish phase, then investors of equity too will benefit by switching to debt funds as the
losses can be minimized. One can always switch back to equity if the equity market
starts to show some buoyancy.
8. Know when to sell your mutual funds: Knowing when to exit a fund too is of utmost
importance. One should book profits immediately when enough has been earned i.e. the
initial expectation from the fund has been met with. Other factors like non-performance,
hike in fee charged and change in any basic attribute of the fund etc. are some of the
reasons for to exit.

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 BIBLIOGRAPHY

Web References:

www.amfiindia.com

www.mutualfundsindia.com

www.indiacatalog.com

www.wikipedia.org

KPMG Report

News paper Reference:

The Times of India

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 ANNEXTURE

QUESTIONNAIRE
(FOR INDIVIDUAL INVESTORS)
QUESTIONNAIRE FOR MUTUAL FUND
1) Are you aware of Mutual Fund Investment?
a) Yes b) No

1) Gender :
a) Male b) Female

1) Your Age :
a) 18-25 yrs b)26-35 yrs c) 36-45 yrs d)More than 45 yrs.

1) Your monthly income level :

a) 15000-30000 b) 31000-60000 c) 61000-1lac d) More than 1 lac.

1) Your preference for investment :

a) Bank Deposit b) Insurance c) Mutual Fund d) Real Estate e) Shares f) Commodity.

1) Do you invest in Mutual fund?

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a) Yes b) No

1) Your objective for investment :

a) Regular income b) Growth c) Liquidity d) Speculation e) Tax-
savings.

1) Which type of Mutual Fund do you prefer?

a) Open ended b) Close ended

1) Rank the following Mutual Fund in (1-5) rating on the basis of your preference for investment?
a) Birla Sun Life b) HDFC c) ICICI Prudential d) SBI e) TATA

1) Your feedback/view point about Mutual Fund :

HAVE A GOOD DAY

THANK YOU.

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