Professional Documents
Culture Documents
A
PROJECT REPORT
ON
MANAGEMENT OF FINANCIAL SERVICES
SUBMITTED TO
PROF: SAMARJEET SEN
GUPTA
SUBMITTED BY
D.RAVI H2-23
(3rd SEMESTER)
SPECIALIZATION MARKETING + FINANCE
Note:
This project is solely for the study purpose and understanding. Results
may vary or not tally with the actual results.
ACKNOWLEDGEMENT
We are thankful to MR. Samarjeet sen gupta who has given this opportunity
for doing a project work on MUTUAL FUND. From this study we have
gathered knowledge of services which are provided by the mutual fund
houses and also find out which of the firm is having good service.
1) INTRODUCTION
Bonds
Bonds are basically the money which you lend to the government or a company,
and in return you can receive interest on your invested amount, which is back
over predetermined amounts of time. Bonds are considered to be the most
common lending investment traded on the market.
There are many other types of investments other than stocks and bonds
(including annuities, real estate, and precious metals), but the majority of
mutual funds invest in stocks and/or bonds.
Regulatory authorities
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. MF either promoted by public or by private
sector entities including one promoted by foreign entities is governed by these
Regulations.
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.
2) Mutual funds
Wide variety of Mutual Fund Schemes exists to cater to the needs such as
financial position, risk tolerance and return expectations etc. thus mutual funds
has Variety of flavors, Being a collection of many stocks, an investors can go for
picking a mutual fund might be easy. There are over hundreds of mutual funds
scheme to choose from
Interval Schemes are that scheme, which combines the features of open-ended
and close-ended schemes. The units may be traded on the stock exchange or may
be open for sale or redemption during pre-determined intervals at NAV related
prices
Equity investments are meant for a longer time horizon, thus Equity funds rank
high on the risk-return matrix
Income Funds: Invest a major portion into various debt instruments such
as bonds, corporate debentures and Government securities.
MIPs: Invests maximum of their total corpus in debt instruments while
they take minimum exposure in equities. It gets benefit of both equity and
debt market. These scheme ranks slightly high on the risk-return matrix
when compared with other debt schemes.
Short Term Plans (STPs): Meant for investment horizon for three to six
months. These funds primarily invest in short term papers like Certificate
of Deposits (CDs) and Commercial Papers (CPs). Some portion of the
corpus is also invested in corporate debentures.
Liquid Funds: Also known as Money Market Schemes, These funds
provides easy liquidity and preservation of capital. These schemes invest
in short-term instruments like Treasury Bills, inter-bank call money
market, CPs and CDs. These funds are meant for short-term cash
management of corporate houses and are meant for an investment
horizon of 1day to 3 months. These schemes rank low on risk-return
matrix and are considered to be the safest amongst all categories of
mutual funds.
iii) BALANCED FUND
As the name suggest they, are a mix of both equity and debt funds. They invest in
both equities and fixed income securities, which are in line with pre-defined
investment objective of the scheme. These schemes aim to provide investors with
the best of both the worlds. Equity part provides growth and the debt part
provides stability in returns
Sector scheme
These are the funds/schemes which invest in the securities of only those sectors
or industries as specified in the offer documents. E.g. Pharmaceuticals, Software,
Fast Moving Consumer Goods (FMCG), Petroleum stocks, etc. The returns in
these funds are dependent on the performance of the respective
sectors/industries. While these funds may give higher returns, they are more
risky compared to diversified funds. Investors need to keep a watch on the
performance of those sectors/industries and must exit at an appropriate time.
Types of return
There are three ways, where the total returns provided by mutual funds can be
enjoyed by investors:
Income is earned from dividends on stocks and interest on bonds. A fund pays
out nearly all income it receives over the year to fund owners in the form of a
distribution.
If the fund sells securities that have increased in price, the fund has a capital
gain. Most funds also pass on these gains to investors in a distribution.
If fund holdings increase in price but are not sold by the fund manager, the
fund's shares increase in price. You can then sell your mutual fund shares for a
profit. Funds will also usually give you a choice either to receive a check for
distributions or to reinvest the earnings and get more shares
Growth Plan: Under the Growth Plan, an investor realizes only the capital
appreciation on the investment (by an increase in NAV) and normally does not
get any income in the form of income distribution.
Re-investment Plan: Here the income distribution accrued on a mutual fund
scheme is automatically re-invested in purchasing additional units under the
scheme. In most cases mutual funds offer the investors an option of collecting
income distribution or re-invest in the same scheme at scheme NAV/NAV based
price.
market forces of supply and demand. The pricing system for stocks is based
solely on market sentiment.
Because mutual funds distribute virtually all their income and realized capital
gains to fund shareholders, a mutual fund's NAV is relatively unimportant in
gauging a fund's performance, which is best judged by its total return.
5) ADVANTAGE & DISADVANTAGE OF MUTUAL FUND.
Fund features
Type of scheme
Open ended
Nature
Equity
Option
Growth
Inception date
Feb24-1995
10
80 % as on march 30,2000
Minimum investment(rs)
5000/-
Purchase redemption
daily
nav
Daily
Entry load
0%
Exit load
-4.8
Mutual fund
Birla Sun Life Mutual Fund
Ahura Centre , 2nd Floor, A. 96/A-D,
Mahakali Caves Road, Andheri (E)
Mumbai
Tel.-56928000
Asset Management Company
Birla Sun Life Asset Management Company Ltd.
One India Bulls Centre , Tower 1, 17th Flr
841, Senapati Bapat Marg, Elphinstone Road
Mumbai - 400013 Tel.- 66928000
Registrar
Computer Age Management Services Private Limited
A&B, Lakshmi Bhavan
609, Anna Salai
Chennai
NAV
Latest nav
52 week high
52 week low
3 month
6 month
1 year
3 year
5year
Since
inception
-1.18
2.22
22.41
77.10
6.04
18.90
20.40
Risk
mean
-0.55
Standard deviation
5.51
beta
0.93
Portfolio
P/E
P/B
Dividend yielded
Large
Mid
small
NA AS ON NOV 2009
No of stocks
47
Expense ratio
2.32
Whats in?
Housing Development Finance Corporation Ltd.
Mahindra & Mahindra Ltd
Cipla Ltd
Tata Steel Ltd.
Whats out?
Hindustan Petroleum Corporation Ltd
Housing Development Finance Corporation Ltd
Indian Oil Corporation Ltd
Dharti Dredging
Asset allocation
Equity
Debt
96.62
0.0
3.38
equty
debt
cash & equivalent
OBJECTIVE
An open-end diversified equity fund that seeks to provide medium to long
term appreciation through investments primarily in Asian Companies /
sectors (excluding Japan) with long term potential across market
capitalization
Fund features
Type of scheme
Open ended
Nature
Equity
Option
Growth
Inception date
Jan 16,2008
10
NA
Minimum investment(rs)
5000/-
Purchase redemption
daily
nav
Daily
Entry load
0%
Exit load
1.62
Mutual fund
Franklin Templeton Mutual Fund
Level 4, Wockhardt Towers
Bandra Kurla Complex, Bandra (East).
Mumbai
Tel.-67519100
Asset Management Company
Franklin Templeton Asset Management (India) Pvt. Ltd.
Wockhardt Towers, 4th Floor,
Bandra Kurla Complex,
Mumbai - 400051 Tel.- 67519100
Registrar
Franklin Templetion Asset Managment (India) Pvt. Ltd.
Franklin Templetion Centre, no.7,
3rd Cross Street, Adyar
Chennai
Tel.-24407000
NAV
Latest nav
NA
52 week high
52 week low
3 month
6 month
1 year
3 year
5year
Since
inception
-0.61
-0.54
17.28
46.57
NA
NA
0.32
Risk
mean
-0.28
Standard deviation
4.11
beta
7.87
Portfolio
P/E
P/B
Dividend yielded
0.13
2,866.02
Large
Mid
small
NA AS ON NOV 2009
26.30
No of stocks
58
Expense ratio
2.30
Whats in?
HDFC Bank Ltd.
Great Eastern Shipping Company Ltd
Hyundai Engineering & Construction (South Korea)
Whats out?
Hankook Tire America Corp.
HDFC Bank Ltd
Oil & Natural Gas Corpn Ltd
KT&G Corp
Asset allocation
Equity
Debt
95.52
0.0
4.48
OBJECTIVE
Fund features
Type of scheme
Open ended
Nature
Equity
Option
Growth
Inception date
May 6,1999
10
NA
Minimum investment(rs)
5000/-
Purchase redemption
daily
nav
Daily
Entry load
0%
Exit load
2.8
Mutual fund
ING Mutual Fund
101 Windsor ,
1st Floor,Off C.S.T.Road, Santacruz E
Mumbai
Tel.-3982 7999
Asset Management Company
ING Investment Management (India) Pvt Ltd.
601/602,"Windsor", Off CST Road,
Kalina, Santacruz (E),
Nav
Latest nav
52 week high
52 week low
3 month
6 month
1 year
3 year
5year
Since
inception
1.09
3.51
21.97
69.34
7.74
21.51
Risk
mean
-0.54
Standard deviation
5.44
beta
0.92
Portfolio
P/E
P/B
Dividend yielded
1.77
90,863.16
Large
Mid
small
NA AS ON NOV 2009
No of stocks
41
Expense ratio
2.50
Whats in?
11.99
Whats out?
Reliance Communication Ventures Ltd.
JaiPrakash Associates Ltd.
Asset allocation
Equity
Debt
92.98
0.0
7.02
Open ended
Nature
Equity
Option
Growth
Inception date
Apr 3,2008
10
NA
Minimum investment(rs)
5000/-
Purchase redemption
daily
nav
Daily
Entry load
0%
Exit load
13.16
Mutual fund
NAV
Latest nav
2097.18
52 week high
52 week low
3 month
6 month
1 year
3 year
5year
Since
inception
1.53
11.05
37.49
93.84
NA
NA
15.09
Risk
mean
-0.47
Standard deviation
5.50
beta
0.93
Portfolio
P/E
P/B
Dividend yielded
0.75
53,415.21
Large
Mid
small
19.10
No of stocks
49
Expense ratio
2.48
Whats in?
Power Finance Corporation Ltd
I-Flex Solutions Limited
Cox & Kings Ltd.
Whats out?
Reliance
Infrastructure
Ltd.
Exide
Industries Ltd
Jindal Steel
and Power
Ltd.
Asset allocation
Equity
Debt
94.94
0.0
5.06
Fund features
Type of scheme
Open ended
Nature
Equity
Option
Growth
Inception date
Mar 28,2006
10
NA
Minimum investment(rs)
5000/-
Purchase redemption
daily
nav
Daily
Entry load
0%
Exit load
65.71
Mutual fund
NAV
Latest nav
4987.70
52 week high
52 week low
3 month
6 month
1 year
3 year
5year
Since
inception
-0.91
0.35
16.68
49.27
8.64
NA
11.09
Risk
mean
-0.40
Standard deviation
4.33
beta
0.73
Portfolio
P/E
P/B
Dividend yielded
0.72
76,849.00
Large
Mid
small
NA AS ON NOV 2009
34.07
No of stocks
21
Expense ratio
1.86
Whats in?
Bharat Heavy Electricals Ltd
Whats out?
Hindustan
Petroleum
Corporation
Ltd
Asset allocation
Equity
Debt
87.20
0.0
12.80
Comparative analysis
1) On the basis of FUND SCHEME.
Company
Birla
FRANKLIN ING Core
sunlife
ASIAN
Equity
advantage EQUITY
Fund
Morgan
Stanley A
Reliance
Equity
Fund
Type of
scheme
Open
ended
Open
ended
Open
ended
Open
ended
Open
ended
nature
Equity
Equity
Equity
Equity
Equity
option
Growth
Growth
Growth
Growth
Growth
Face Value
(Rs/Unit)
10
10
10
10
10
Fund Size in
Rs. Cr. (as on
nov 30, 2009)
405.44
416.45
58.44
131.67
2254.11
Last
Dividend
Declared
80 % as on
march
30,2000
NA
NA
NA
NA
Minimum
Investment
(Rs)
5000/-
5000/-
5000/-
5000/-
5000/-
Purchase
Daily
Redemptions
Daily
Daily
Daily
Daily
Daily
Daily
Daily
Daily
Daily
NAV
Calculation
Entry Load
0%
0%
0%
0%
0%
Exit Load
If
redeemed
between 0
days to 7
days exit
load is
0.5%
If
redeemed
between 0
year to 1
year exit
load is 1%
If
redeemed
between 0
days to
365 days
exit load is
1%
If
redeemed
between 0
year to 1
year exit
load is 1%
If
redeemed
between 0
year to 1
year exit
load is 1%
Increase or
decrease in
funds since
oct
30,2009(rs
crore)
-4.8
1.62
2.8
13.16
65.71
Findings
a) All funds are open ended, growth equity funds.
b) Fund size of RELIANCE MUTUAL fund is maximum.
c) Minimum requirement of fund for investment in any of the scheme is
5000/- Rs.
d) NAV is calculated on daily basis.
e) Exit load of BIRLA SUNLIFE ADVANTAGE fund is very low 0.5% for the
first week.
70
60
50
40
30
20
10
0
-10
f) Reliance mutual fund has the highest increase in funds since oct,2009.
g) All funds are showing positive growth but birla sunlife is showing
negative growth.
Birla
FRANKLIN
sunlife
ASIAN
advantage EQUITY
Latest NAV
146.80 as
on Dec ,
2009
Benchmark 16,719.83
Index - S&P as on dec
Nifty
18, 2009
ING Core
Equity
Fund
Morgan
Stanley A
Reliance
Equity
Fund
10.06 as on 33.14 as
on Dec
dec 18,
21, 2009
2009
12.72 as on 14.80 as on
dec 18,
dec 18,
2009
2009
NA
2097.18
4987.70
12.85 as
on dec 7,
2009
15.24 as
on dec 7,
2009
5.29 as on
mar 9,
2009
8.21 as on
mar 9,
2009
52 - Week
High
150.76 as
on dec 8,
2009
52 - Week
Low
66.01 as on 6.23 as on
mar 9,
mar 9,
2009
2009
8,809.14
as on Dec
21, 2009
10.29 as on 33.97 as
dec 7, 2009 on Dec
10, 2009
16.48 as
on Mar 9,
2009
250
200
150
52 - Week Low
100
52 - Week High
50
0
Birla
Franklin ING Core Morgan Reliance
sunlife
Asian
Equity Stanley A Equity
advantage Equity
Fund
Fund
findings:
1)Nav of birla sunlife fund has much fluctuation
2)RELIANCE mutual fund has less fluctuauion in NAV.
company
1
MONT
H
3
MONTH
S
6
MONTH
S
1
YEA
R
3
YEA
R
5
YEA
R
SINCE
INCEPTIO
N
Birla
sunlife
advantag
-1.18
2.22
22.41
77.10 6.04
18.9
20.40
FRANKLI
N ASIAN
EQUITY
-0.61
-0.54
17.28
46.57 NA
NA
0.32
ING Core
Equity
Fund
1.09
3.51
21.97
69.34 7.74
21.51 11.99
Morgan
Stanley A
1.53
11.05
37.49
93.84 NA
NA
15.09
Reliance
Equity
Fund
-0.91
0.35
16.68
49.27 8.64
NA
11.09
Findings:
a) For the 1 st month performance of birla sunlife advantage fund is much lower
1.18, the best performance is of Morgan Stanley 1.53.
b)For the initial time period of 3 months the lowest performer is FRANKLIN
ASIAN EQUITY -0.54, MORGAN STANLEY is still performing well as 11.05%.
c)The period of first year is of MORGAN STANLEY with 93.84% performance
d)Since inception the best performer of the above mutual funds is BIRLA
SUNLIFE MUTUAL ADVANTAGE.
100
80
60
20
0
1 MONTH
-20
3 MONTHS
6 MONTHS
1 YEAR
SINCE
INCEPTION
e)From the graph it is clear that the best performer of mutual fund is
MORGAN STANLEY.
company
Birla
FRANKLIN
sunlife
ASIAN
advantage EQUITY
ING Core
Equity
Fund
Morgan
Stanley A
Reliance
Equity
Fund
Mean
-0.55
-0.28
-0.54
-0.47
-0.40
Standard
deviation
5.51
4.11
5.44
5.50
4.33
Beta
0.93
7.87
0.92
0.93
0.73
9
8
7
6
5
4
3
2
1
0
-1
mean
Standard deviation
beta
Findings:
a) Max mean is of FRANKLIN ASIAN EQUITY, while min mean is of BIRLA
SUNLIFE ADVANTAGE.
b) Max standard deviation is of BIRLA SUNLIFE ADVANTAGE, Min S.D is of
FRANKLIN ASIAN EQUITY.
c) Max Beta is of FRANKLIN ASIAN EQUITY.
d)BIRLASUNLIFE , RELIANCE MUTUAL FUND, MORGANSTANLEY are less
volatile.
e) Standard deviation of all mutual funds is nearly same.
company
Birla
FRANKLIN
sunlife
ASIAN
advantage EQUITY
ING Core
Equity
Fund
Morgan
Stanley A
Reliance
Equity
Fund
P/E
26.43
2.14
30.65
24.29
29.56
P/B
4.36
0.86
4.73
4.53
3.99
Dividend
yield
0.87
0.13
1.77
0.75
0.72
Market
capital(in
Rs crore)
71,009.95
2,866.02
90,863.16
53,415.21
76,849.00
large
63.25
4.80
74.55
54.38
62.50
mid
33.28
4.97
18.43
34.28
13.27
small
NA
NA
NA
5.16 AS ON
NOV 2009
NA
26.30
26.59
19.10
34.07
Top 5
20.29
holding %
No of
stocks
47
58
41
49
21
Expense
ratio (%)
2.32
2.30
2.50
2.48
1.86
( P/E ratio, P/B ratio, market capital all are taken AS ON NOV 2009)
{p/e ratio= market value of share/ earning per share.
p/b ratio= stock price/ (total assets- intangible assets and liabilities.)}
10
5
0
Birla sunlife
advantage
No of stocks
60
50
40
30
No of stocks
20
10
0
Birla sunlife
Franklin
ING Core
advantage Asian Equity Equity Fund
Morgan
Stanley A
Reliance
Equity Fund
Findings:
a) P/E ratio of ING Core Equity Fund is maximum, while the minimum is of
FRANKLIN ASIAN EQUITY.
b) P/B ratio of ING Core Equity Fund is maximum, while the minimum is of
FRANKLIN ASIAN EQUITY.
c) MARKET CAPITAL OF ING Core Equity Fund is much higher 90,863.16
d) Expense ratio of all mutual funds is almost same.
e) Franklin has highest no of stocks.
Birla
FRANKLIN ING Core
sunlife
ASIAN
Equity
advantage EQUITY
Fund
Morgan
Stanley A
Reliance
Equity
Fund
Equity
96.62
95.52
92.98
94.94
87.20
Debt
0.0
0.0
0.0
0.0
0.0
4.48
7.02
5.06
12.80
Cash &
3.37
equivalent
60
debt
40
20
0
Birla sunlife Franklin Asian ING Core
advantage
Equity
Equity Fund
Morgan
Stanley A
Reliance
Equity Fund
findings
a)Mutual fund invests most of their investment in EQUITY.
b)There
There is no investment in DEBT.
c)Investment
Investment in cash & equivalent is very low.
key findings
1) The maximum return can be expected in BIRLASUNLIFE ADVANTAGE
fund.
2) Scheme performance of MORGANSTANLEY fund is good.
3) P/E ratio of morgan stanley, reliance mutual fund, birla sunlife is
good.
4) p/b ratio FRANKLIN FUND i very low it means it is undervalued.
7) Conclusion
A mutual fund brings together a group of people and invests their
money in stocks, bonds, and other securities.
The advantages of mutuals are professional management,
diversification ,economies sale, simplicity and liquidity.
The disadvantages of mutuals are high costs, over-diversification,
possible tax consequences, and the inability of management to
guarantee a superior return.
There are many, many types of mutual funds. You can classify funds
based on asset class, investing strategy, region, etc.
Mutual funds have lots of costs.
Costs can be broken down into ongoing fees (represented by
theexpense ratio) and transaction fees (loads)
The biggest problems with mutual funds are their costs and fees.
Mutual funds are easy to buy and sell. You can either buy them
directly from the fund company or through a third party.
Mutual fund ads can be very deceiving.
8) Bibliography
1) Www. Mutualfundindia.com
2) www.birlasunlife mutualfund.com
3) www.franklin funds.com
4) www.reliancemutualfund.com
5) www.morganstnleymutualfunds.com
6) www.google.com
7) www. Ing corefunds.com