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Introduction to Portfolio Management

Investing in securities such as shares, debentures, and bonds is profitable as well as exciting. It is indeed rewarding, but involves a great deal of risk and calls for scientific knowledge as well artistic skill. In such investments both rationale and emotional responses are involved. Investing in financial securities is now considered to be one of the best avenues for investing one savings while it is acknowledged to be one of the best avenues for investing one saving while it is acknowledged to be one of the most risky avenues of investment. “It is rare to find investors investing their entire savings in a single security. Instead, they tend to invest in a group of securities. Such a group of securities is called portfolio”. Creation of a portfolio helps to reduce risk, without sacrificing returns. Portfolio management deals with the analysis of individual securities as well as with the theory and practice of optimally combining securities into portfolios. An investor who understands the fundamental principles and analytical aspects of portfolio management has a better chance of success.

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Portfolio Management
An investor considering investment in securities is faced with the problem of choosing from among a large number of securities and how to allocate his funds over this group of securities. Again he is faced with problem of deciding which securities to hold and how much to invest in each. The risk and return characteristics of portfolios. The investor tries to choose the optimal portfolio taking into consideration the risk return characteristics of all possible portfolios.

As the risk return characteristics of individual securities as well as portfolios also change. This calls for periodic review and revision of investment portfolios of investors.

An investor invests his funds in a portfolio expecting to get good returns consistent with the risk that he has to bear. The return realized from the portfolio has to be measured and the performance of the portfolio has to be evaluated.

It is evident that rational investment activity involves creation of an investment portfolio. Portfolio management comprises all the processes involved in the creation and maintenance of an investment portfolio. It deals specifically with the security analysis, portfolio analysis, portfolio selection, portfolio revision & portfolio evaluation. Portfolio management makes use of analytical techniques of analysis and conceptual theories regarding rational allocation of funds. Portfolio management is a complex process which tries to make investment activity more rewarding and less risky.

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cc 4 .co. In the capital market. Safety of principle and asset mix Usually.Selection of Portfolio The selection of portfolio depends upon the objectives of the investor. The selection of portfolio under different objectives are dealt subsequently Objectives and asset mix If the main objective is getting adequate amount of current income. the risk adverse investors are very particular about the stability of principal. Property of Project Guru. Capital appreciation and Asset Mix It means that value of the investment made increases over the year. The debt may be included to minimize risk and to get tax exemption. Investment in real estate can give faster capital appreciation but the problem is of liquidity. Proportion varies according to individual preference. The proportion of equity varies from 60 to 100 % and that of debt from 0 to 40 %.projectguru. www. Generally old people are more sensitive towards safety. Growth of income and asset mix Here the investor requires a certain percentage of growth as the income from the capital he has invested. sixty percent of the investment is made in debt instruments and remaining in equity. the value of the shares is much higher than the original issue price.

The main advantage of diversification is that the unsystematic risk is minimized. more return. So while making a portfolio the investor must judge the risk taking capability and the returns desired.co.Risk and return analysis The traditional approach of portfolio building has some basic assumptions. Diversification Once the asset mix is determined and risk – return relationship is analyzed the next step is to diversify the portfolio. But the rule of the game is that more risk. www. Property of Project Guru. An investor wants higher returns at the lower risk.cc 5 .projectguru.

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In the early years of the century analyst used financial statements to find the value of the securities. A booklet entitled ―The Anatomy of the Railroad‖ was published by Thomas F. This method later on was known as Technical Analysis. Woodlock in 1900. Dow. The first to be analyzed using this was Railroad Securities of the USA.projectguru. Many factors have contributed to the existence and development of the concept. www.cc 7 . It evolved during 1900-1902 when Charles H.Evolution of Portfolio Management Portfolio management is essentially a systematic method of maintaining one‘s investment efficiently. John Moody in his book ―The Art of wall Street Investing‖. although most of the writers adopted different ways to publish there data. the founder of the Dow Jones and Co.co. Property of Project Guru. As the time progressed this method became very important in the investment field. strongly supported the use of financial ratios to know the worth of the investment. The advocates of technical analysis believed that stock prices movement is ordered and systematic and the definite pattern could be identified. The other major method adopted was the study of stock price movement with the help of price charts. There investment strategy was build around the identification of the trend and pattern in the stock price movement. presented his view in the series of editorials in the Wall Street Journal in USA. They generally advocated the use of different ratios for this purpose. The proposed type of analysis later on became the ―common-size‖ analysis.

They are considered as pioneers of security analysis as a discipline. Investment was not a wide spread activity. As a result the investments market became safer place to invest and the people in different income group started investing.Another prominent author who supported the technical analysis was Ralph N. Elliot who published a book in the year 1938 titled ―The Wave Principle‖. There research work was considered first work in the field of security analysis and acted as the base for further study. but a cake of few rich people. They published a book ―Security Analysis‖ in 1934. The phase was of professionalism. Finally the daring speculative ventures of investors were declared illegal in the US by the Securities Act of 1934. His pioneering work on portfolio management was described in his article in the Journal of Finance in the year 1952 and subsequent books published later on. he concluded that the market movement was quite orderly and followed a pattern of waves. www. First phase is known as Speculative Phase. Investment management was an art and needed skills. The process is speculative in nature. The foundation of modern portfolio theory was laid by Markowitz. establishing standard practices and generating a good public image. The result of this was the stock exchange crash in the year 1929. During this period the research work of Benjamin Graham and David L.cc 8 . Price manipulation was resorted to by the investors. Francis the development of investment management can be traced chronologically through three different phases.co. His theory is known as Elliot Wave Theory. Third phase was known as the scientific phase. Second phase began in the year 1930. Investors began to analyze the security before investing. which was highly sought after.projectguru. According to J. Property of Project Guru.C. After analyzing 75 years data of share price. During this time period pools and corners were used for manipulation. After coming up of the Securities Act. the investment industry began the process of upgrading its ethics. Dood was widely publicized and publicly acclaimed.

If we talk of the present the last two phases of Professionalism and Scientific Analysis are currently advancing simultaneously with investment in various financial instruments becoming safer. Property of Project Guru. The work of Markowitz was extended by the William Sharpe. For his work he won the Noble Prize for Economics in the year 1990.projectguru. He showed how the risk can be minimized through proper diversification of investment which required the creation of the portfolio. www. with proper knowledge to each and every investor.cc 9 .He tried to quantify the risk. He provided technical tools for the analysis and selection of optimal portfolio.co. John Linter and Jan Mossin through the development of the Capital Asset Pricing Model (CAPM).

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With this development investment in securities has gained considerable momentum Along with the spread of the securities investment way among Indian investors have changed due to the development of the quantitative techniques. The theories and concepts relating to portfolio management now find there way in the front pages of the financial newspapers and magazines. Professional portfolio management. It ensures that the stock market is free from fraud. Portfolio management is now a common term and is widely practiced in INDIA.cc 11 . individual investors and big brokers. with rapid computerization. This reform process has made the Indian industry efficient.co.projectguru. A large number of mutual funds have come up in the market since 1987. but the time has changed now.Role of Portfolio Management There was a time when portfolio management was an exotic term. www. The Securities Exchange Board of India (SEBI) is a regulatory body in INDIA. backed by research is now being adopted by mutual funds. better infrastructure and customer services. In early 90‘s India embarked on a program of economic liberalization and globalization. increased market transparency. A practice which is beyond the reach of the small investor. investment consultants. with high participation of private players. Property of Project Guru. closer integration and higher volume. The markets are dominated by large institutional investors with their diversified portfolios. and of course the main objective is to ensure that the investor‘s money is safe.

With the advent of computers the whole process of portfolio management has become quite easy. The computer can absorb large volumes of data, perform the computations accurately and quickly give out the results in any desired form. Moreover simulation, artificial intelligence etc provides means of testing alternative solutions.

The trend towards liberalization and globalization of the economy has promoted free flow of capital across international borders. Portfolio not only now include domestic securities but foreign too. So financial investments can‘t be reaped without proper management.

Another significant development in the field of investment management is the introduction to Derivatives with the availability of Options and Futures. This has broadened the scope of investment management.

Investment is no longer a simple process. It requires a scientific knowledge, a systematic approach and also professional expertise. Portfolio management is the only way through which an investor can get good returns, while minimizing risk at the same time.

So portfolio management objectives can be stated as: -

Risk minimization. Safeguarding capital. Capital Appreciation. Choosing optimal mix of securities. Keeping track on performance.

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WHAT IS MUTUAL FUND??

A mutual fund is a form of collective investment that pools money from many investors and invests the money in stocks, bonds, short-term money market instruments, and/or other securities.

Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is invested by the fund manager in different types of securities depending upon the objective of the scheme. These could range from shares to debentures to money market instruments. The income earned through these investments and the capital appreciation realized by the scheme is 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 portfolio at a relatively low cost. The small savings of all the investors are put together to increase the buying power and hire a professional manager to invest and monitor the money. Anybody with an investible surplus of as little as a few thousand rupees can invest in Mutual Funds. Each Mutual Fund scheme has a defined investment objective and strategy.

The flow chart below describes broadly the working of a mutual fund.

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An open-end mutual fund does not have a set number of shares. in proportion to the amount of money invested. the earnings (dividends. On the other hand. Diversification reduces the risk because all stocks may not move in the same direction in the same proportion at the same time. The number of shares changes as investors buys or sell their shares. www.co. capital gains or loses) of the mutual fund are distributed to the investors. Property of Project Guru. These corporations receive dividends on the shares that they hold and realize capital gains or losses on their securities traded. the fund manager has less influence because the price of the underlining owned securities has greater influence Mutual fund is a mechanism for pooling the resources by issuing units to the investors and investing funds in securities in accordance with objectives as disclosed in offer document. However the openend market price is influenced greatly by the fund managers. Investors purchase shares in the mutual fund as if it was an individual security. But with close-end funds. closedend mutual fund has a fixed number of shares and the value of the shares fluctuates with the market. Investors are able to buy and sell their shares of the company at any time for a market price. Investments in securities are spread across a wide cross-section of industries and sectors and thus the risk is reduced.projectguru. A mutual fund may be either an open-end or a closed-end fund. After paying operating costs. it may be considered as a fluid capital stock.A mutual fund is a managed group of owned securities of several corporations.cc 15 .

if the market value of securities of a mutual fund scheme is Rs 200 lakhs and the mutual fund has issued 10 lakhs units of Rs. Custodian. The trust is established by a sponsor or more than one sponsor who is like promoter of a company. Asset Management Company (AMC) approved by SEBI manages the funds by making investments in various types of securities. SEBI formulates policies and regulates the mutual funds to protect the interest of the investors. The trustees are vested with the general power of superintendence and direction over AMC. A mutual fund is set up in the form of a trust. The NAV per unit is the market value of securities of a scheme divided by the total number of units of the scheme on any particular date. The mutual funds normally come out with a number of schemes with different investment objectives. For example. In early 1990s. The profits or losses are shared by the investors in proportion to their investments.projectguru. who is registered with SEBI. 10 each to the investors. The trustees of the mutual fund hold its property for the benefit of the unit holders. The concept of mutual fund originated in Belgium by the ―Society Generale de Belgique” in the year 1822. Investors of mutual funds are known as unit holders. which has sponsor. In simple words. then the NAV Property of Project Guru. Government allowed public sector banks and institutions to set up mutual funds.cc 16 . Net Asset Value is the market value of the securities held by the scheme. trustees. Asset Management Company (AMC) and custodian.co. NAV of a scheme also varies on day-to-day basis. www. They monitor the performance and compliance of SEBI Regulations by the mutual fund. which are launched from time to time. The performance of a particular scheme of a mutual fund is denoted by Net Asset Value (NAV). Unit Trust of India was the first mutual fund set up in India in the year 1963. Since market value of securities changes every day.Mutual fund issues units to the investors in accordance with quantum of money invested by them. All mutual funds whether promoted by public sector or private sector entities including those promoted by foreign entities are governed by the same set of Regulations. holds the securities of various schemes of the fund in its custody.

depending on the type of scheme.daily or weekly .projectguru. NAV is required to be disclosed by the mutual funds on a regular basis .co.20.per unit of the fund is Rs. www.cc 17 . Property of Project Guru.

The term Mutual fund is the common name for an open-end investment company. the investment management company sponsoring the fund issues new shares to investors and buys back shares from investors wishing to leave the fund. www. Being open-ended means that at the end of every day.cc 18 . These do not have a fixed maturity. Property of Project Guru.TYPES OF MUTUAL FUNDS SCHEMES Mutual fund schemes may be classified on the basis of its structure and its investment objective-: A) By Structure 1) Open-ended Fund An open-end fund is one that is available for subscription all through the year. The key feature of open-end schemes is liquidity.co.projectguru. Investors can conveniently buy and sell units at Net Asset Value ("NAV") related prices.

co. 5-7 years. The fund is open for subscription only during a specified period. A close-ended fund or scheme has a stipulated maturity period e. The fund is open for subscription only during a specified period at the time of launch of the scheme.projectguru. Such schemes normally invest a majority of their corpus in equities. SEBI Regulations stipulate that at least one of the two exit routes is provided to the investor.g. It has been proved Property of Project Guru. In order to provide an exit route to the investors. 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. B) By Investment Objective 1) Growth Funds The aim of growth funds is to provide capital appreciation over the medium to long term. They are open for sale or redemption during pre-determined intervals at NAV related prices. 3) Interval Funds Interval funds combine the features of open-ended and close-ended schemes.2) Closed-end Funds A closed-end fund has a stipulated maturity period which generally ranging from 3 to 15 years. www. 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. some close-ended funds give an option of selling back the units to the Mutual Fund through periodic repurchase at NAV related prices.cc 19 .

3) Balanced Funds The aim of balanced funds is to provide both growth and regular income. 2) Income Funds The aim of income funds is to provide regular and steady income to investors. short-term investments issued by the U. preservation of capital and moderate income.projectguru. Such schemes periodically distribute a part of their earning and invest both in equities and fixed income securities in the proportion indicated in their offer documents. By law. Money market funds have relatively low risks.S. Such schemes generally invest in fixed income securities such as bonds. corporate debentures and Government securities. Growth schemes are ideal for investors for a period of time. www. U. or fall equally when the market falls. compared to other mutual funds (and most other investments). These are ideal for investors looking for a combination of income and moderate growth. and state and local governments. 4) Money Market Funds The aim of money market funds is to provide easy liquidity. Returns on these schemes may fluctuate depending upon the interest rates prevailing in the market. have outperformed most other kind of investments held over the long term. Income Funds are ideal for capital stability and regular income. Money market funds try to keep their Property of Project Guru.S. corporations. These schemes generally invest in safer short-term instruments such as treasury bills. In a rising stock market. certificates of deposit. government. they can invest in only certain high-quality. commercial paper and inter-bank call money.cc 20 . the NAV of these schemes may not normally keep pace.that returns from stocks.co.

cc 21 .net asset value (NAV) — which represents the value of one share in a fund — at a stable $1. Investor losses have been rare.00 if the fund's investments perform poorly. www. but they are possible. That's why "inflation risks" — the risk that inflation will outpace and erode investment returns over time — can be a potential concern for investors in money market funds. and historically the returns for money market funds have been lower than for either bond or stock funds. Money market funds pay dividends that generally reflect short-term interest rates.00 per share.co. But the NAV may fall below $1.projectguru. Property of Project Guru.

The history of mutual funds in India can be broadly divided into four distinct phases Property of Project Guru. www. at the initiative of the Government of India and Reserve Bank the.projectguru.HISTORY OF INDIAN MUTUAL FUND INDUSTRY The mutual fund industry in India started in 1963 with the formation of Unit Trust of India.co.cc 22 .

except UTI were to be registered and governed. Second Phase – 1987-1993 (Entry of Public Sector Funds) 1987 marked the entry of non. 004 crores Third Phase – 1993-2003 (Entry of Private Sector Funds) With the entry of private sector funds in 1993.6. the mutual fund industry had assets under management of Rs.UTI. SBI Mutual Fund was the first non.UTI Mutual Fund established in June 1987 followed by Can bank Mutual Fund (Dec 87). The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised Mutual Fund Regulations in 1996.projectguru.47. 1993 was the year in which the first Mutual Fund Regulations came into being. a new era started in the Indian mutual fund industry. with many foreign mutual funds setting up funds in India and also the industry has witnessed several mergers and Property of Project Guru. LIC established its mutual fund in June 1989 while GIC had set up its mutual fund in December 1990 At the end of 1993. public sector mutual funds set up by public sector banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC). Bank of Baroda Mutual Fund (Oct 92). Punjab National Bank Mutual Fund (Aug 89). Bank of India (Jun 90). Indian Bank Mutual Fund (Nov 89). At the end of 1988 UTI had Rs. under which all mutual funds. It was set up by the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank of India.cc 23 .First Phase – 1964-87 Unit Trust of India (UTI) was established on 1963 by an Act of Parliament.co. The first scheme launched by UTI was Unit Scheme 1964. 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 erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993. giving the Indian investors a wider choice of fund families. Also. www. 700 crores of assets under management. The industry now functions under the SEBI (Mutual Fund) Regulations 1996 The number of mutual fund houses went on increasing.

One is the Specified Undertaking of the Unit Trust of India with assets under management of Rs. there were 29 funds. With the bifurcation of the erstwhile UTI which had in March 2000 more than Rs. The Unit Trust of India with Rs.76. www.acquisitions. BOB and LIC. It is registered with SEBI and functions under the Mutual Fund Regulations. 1. The second is the UTI Mutual Fund Ltd.29. 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. 21. conforming to the SEBI Mutual Fund Regulations.cc 24 . which manage assets of Rs. the mutual fund industry has entered its current phase of consolidation and growth. GROWTH IN ASSETS UNDER MANAGEMENT Property of Project Guru. there were 33 mutual funds with total assets of Rs. As at the end of January 2003. following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated into two separate entities. The Specified Undertaking of Unit Trust of India. assured return and certain other schemes.805 crores. 000 crores of assets under management and with the setting up of a UTI Mutual Fund. 835 crores as at the end of January 2003. the assets of US 64 scheme. sponsored by SBI.co. and with recent mergers taking place among different private sector funds. As at the end of September. 2004.projectguru. representing broadly. 541 crores of assets under management was way ahead of other mutual fund Fourth Phase – since February 2003 In February 2003.153108 crores under 421 schemes. PNB.44.

cc 25 .projectguru.ORGANISATION OF MUTUAL FUND There are many entities involved and the diagram below illustrates the organizational set up of a mutual fund: Property of Project Guru.co. www.

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47 14235.69 -3.21 13181.90 12752.38 12985.94 Debt (Rs in Crores) Gross Sales 11492. www.43 7843.70 9631.55 Gross Sales 1864.55 Property of Project Guru.90 8266.47 7633.65 10314.cc 27 .67 6800.64 7716. May 2006.08 7774.67 44597.96 2764.43 5023.46 12675.97 12700.98 -3795.23 86133.91 10452.99 4784.76 15893. November 2006.55 49933.89 8425.98 2660.83 63169.54 9947. July 2006.65 7584.78 12098.75 16987.05 -1342.24 7929.58 10345.47 18345.46 7682.55 2403.projectguru. January 2007. October 2006.29 36801.06 3287.74 129676.42 34059.18 8851.94 6334.28 12878. September 2006.83 12971.60 12697.02 14302.42 22700.72 13512.88 -2066.Trends in Transactions on Stock Exchanges by Mutual Funds (since January 2000) Equity (Rs in Crores) Gross Purchase 11070.17 73003.24 4427.08 93110.23 -274.44 13296.88 7612.91 448.14 9005.60 119696.41 2384. February 2007.25 100435.22 12604.21 4316. April 2000 -March 2001.58 45045.19 20142.62 16169.co.07 9820.22 9591.41 40469.14 4568.54 15982.29 8488.96 15386.59 35355.44 1339.70 1307.68 22624.March '07) Net Purchase/ Gross Sales Purchase -421.50 6961.46 109804.00 Net Purchase/ Sales 900. December 2006.93 62186.73 1328. August 2006.63 143043.09 3844.64 46663.95 -81.83 1627.43 11643.98 Time Jan 2000-March 2000.16 2669. April 2001-March 2002.23 9944.89 36663.41 5328.65 -2766.17 33583.05 -723.01 2124.62 10351.92 6256.71 426.36 -1976.18 45199.56 7893.04 11554.06 8906.11 14520.15 8427.20 3120. June 2006.52 7552.49 10959.99 16587.51 -24.70 10830. April 2002-March 2003 April 2003-March 2004 April 2004-March 2005 April 2005-March 2006 April 2006. March 2007 (upto 10th) Total (April '06 .86 9979.41 11853.54 17375.91 11227.

24 272.12 845.76 533.74 19.81 08.0 Total 3844.Trends in Transactions on Stock Exchanges by Mutual Funds Equity (Rs in crores) Debt (Rs in crores) Gross Net Gross Net Transactio Purchase Gross Purchase Purchase Gross Purchase n Date s Sales s / Sales s Sales s/ Sales 01.63 8 2124.80 796.00 0.00 4.68 347.92 -29.74 -34.6 2660.64 02.86 4784.42 06.24 166.00 0.76 -379.76 282.53 243.07 0.03.60 07.56 690.co.15 591.03.53 -4.07 482.23 617.07 528.54 433.03.07 442.73 389.44 1148.50 524.32 238.03.99 -39.02 -384.cc 28 .55 Property of Project Guru.93 904.14 981.projectguru.07 767.03.57 -125. www.07 338.27 327.34 867.18 411.07 707.03.38 541.92 8.03.20 717.50 05.74 0 -723.95 407.53 4568.53 10.10 68.07 578.00 0.03.54 460.58 09.25 567.

cc 29 . The reduction in fiscal deficit is also a positive step and the government will also increase spending on education by 34%. The market was around 200 points down after the markets opened for the day. and on the other side the global market saw major meltdown with the Asian market were beaten the most. The budget had a few shockers when the dividend distribution tax was hiked. as well as education.projectguru. Property of Project Guru. www. Markets have seen a major correction over the last few trading sessions. On 28 th the markets was hit hard from both sides. internally as well as externally. whose fundamental message was for overall growth of the economy and a positive emphasis to be put on agricultural and rural development. compared with the last year. which will certainly give a long term boost to the growth of the economy. The Indian markets could not sustain the beating it got from both ends and saw the maximum decline witnessed in the last eight months. Chinese markets alone lost around 9% over the day.Union Budget 2007-08 & the Mutual Fund Industry The 2007-08 budget presented by the Finance Minister was also a low impact budget.co.

www. in the next trading day when markets realized that MAT can be used as a deferred tax asset by IT companies post FY 2010 to offset taxes. The DDT for the money market and liquid mutual funds has been proposed to be brought at par at 25%. The Indian Mutual Fund industry also suffered on announcement of the hike in dividend distribution tax. The announcement of MAT of 11. Secondly. and to some extent IT services also got hit.co. but saw some recovery. FM also allowed delivery based short selling for institutional participants. In India. because of bringing both the sector under MAT. Another proposal put up by the Finance Minister was for Mutual Funds to play a bigger role in infrastructure development by launching and operating dedicated infrastructure funds which would directly invest into core sector projects. Now after this particular proposal Mutual Funds can directly invest into infrastructure projects. Hence the impact is not severe as was thought on the budget day. The Indian Mutual Fund industry already have schemes which are sector specific and invest into infrastructure sector through equities.3 % on IT companies was misinterpreted by the market on the budget day. till recently only the retail investors Property of Project Guru.projectguru. by responding in negative. Mostly in all developed countries short selling is allowed. Currently the rate is 12. Secondly SEZs are still MAT free. Among the major sectors Cement is clearly the most hit. The FM said that this was being done to restrict the arbitrage opportunities used by these schemes.But the announcement of the FM to hike dividend distribution tax saw another fall of more than 300 points which the markets was not able to recover till the end of the day.5% for retail investor and 23% for institutional investors.cc 30 . as per Finance Minister FBT on ESOP is still under notification.

co. increased savings and building of manpower capabilities. The managers will have to register themselves with the Central Excise department and have to pay service tax. A few more schemes invest partially abroad.projectguru. FM has proposed to bring the asset management services offered by individuals under the service tax bracket. On a whole. the Budget will sustain high economic growth through larger investments. Along with FII.cc 31 .were allowed to enjoy this.8 lakh per annum. Currently the industry has quite a few mutual fund schemes which invest dedicatedly abroad. if their service fee is more than Rs. www. The individuals who provide investment fund management advisory services will now have to pay service tax. To summarize. Property of Project Guru. Along with the above the FM also proposed for the retail investor to invest abroad through Mutual Funds. Mutual Fund houses are also allowed for delivery based short selling. the budget other than the DDT hike for the liquid and the money market mutual funds and the infrastructure funds didn‘t have much in store for the Mutual Fund industry.

projectguru.cc 32 . www.co.Property of Project Guru.

for instance. stock. By law. there do exist real estate investment trusts. Stock funds. However. and policies are found in the prospectus. and mutual funds are allowed to hold shares in REITs.projectguru. investment-grade corporate bonds). who forecasts the future performance of investments appropriate for the fund and chooses the ones which he or she believes will most closely match the fund's stated investment objective. These restrictions. which may hire or fire fund managers. or maturity of the bonds (short or long term). mutual funds cannot invest in commodities and their derivatives or in real estate. but there are hundreds of sub-categories.cc 33 . Bond funds can vary according to risk (high yield or junk bonds. can invest primarily in the shares of a particular industry. corporations.co. such as technology or utilities. www. or primarily foreign securities (international funds). A mutual fund may restrict itself in other ways. Most mutual funds' investment portfolios are continually adjusted under the supervision of a professional manager. or REITs. or municipalities). The most common are cash. Property of Project Guru. permissions. and bonds. A mutual fund is administered through a parent management company. which invest solely in real estate or mortgages. Both stock and bond funds can invest in primarily US securities (domestic funds). These are known as sector funds. which every open-end mutual fund must make available to a potential investor before accepting his or her money. both US and foreign securities (global funds). type of issuers (government agencies.USAGE OF MUTUAL FUND Mutual funds can invest in many different kinds of securities.

You achieve this diversification through a Mutual Fund with far less money than you can do on your own.  Diversification Mutual Funds invest in a number of companies across a broad cross-section of industries and sectors.Mutual funds are subject to a special set of regulatory. the type of income they earn is often unchanged as it passes through to the shareholders. Mutual fund distributions of tax-free municipal bond income are also tax-free to the shareholder. Unlike most other types of business entities. accounting. This diversification reduces the risk because seldom do all stocks decline at the same time and in the same proportion. Taxable distributions can either be ordinary income or capital gains.cc 34 . depending on how the fund earned it.projectguru. www. Also. and tax rules.co.  Convenient Administration Property of Project Guru. backed by a dedicated investment research team that analyses the performance and prospects of companies and selects suitable investments to achieve the objectives of the scheme. they are not taxed on their income as long as they distribute substantially all of it to their shareholders. ADVANTAGES AND DISADVANTAGES OF MUTUAL FUND ADVANTAGES  Professional Management Mutual Funds provide the services of experienced and skilled professionals.

the units can be sold on a stock exchange at the prevailing market price or the investor can avail of the facility of direct repurchase at NAV related prices by the Mutual Fund. Mutual Funds save your time and make investing easy and convenient.  Liquidity In open-end schemes.projectguru.  Low Costs Mutual Funds are a relatively less expensive way to invest compared to directly investing in the capital markets because the benefits of scale in brokerage.  Transparency You get regular information on the value of your investment in addition to disclosure on the specific investments made by your scheme. www. custodial and other fees translate into lower costs for investors. delayed payments and follow up with brokers and companies.cc 35 .  Return Potential Over a medium to long-term.Investing in a Mutual Fund reduces paperwork and helps you avoid many problems such as bad deliveries. Mutual Funds have the potential to provide a higher return as they invest in a diversified basket of selected securities. the proportion invested in each class of assets and the fund manager's investment strategy and outlook. the investor gets the money back promptly at net asset value related prices from the Mutual Fund. In closed-end schemes.co. Property of Project Guru.

cc 36 .co. www. Property of Project Guru.  Well Regulated All Mutual Funds are registered with SEBI and they function within the provisions of strict regulations designed to protect the interests of investors. A mutual fund because of its large corpus allows even a small investor to take the benefit of its investment strategy. Flexibility Through features such as regular investment plans. you can systematically invest or withdraw funds according to your needs and convenience. The operations of Mutual Funds are regularly monitored by SEBI. regular withdrawal plans and dividend reinvestment plans.  Choice of Schemes Mutual Funds offer a family of schemes to suit your varying needs over a lifetime.projectguru.  Affordability Investors individually may lack sufficient funds to invest in high-grade stocks.

 Lack of Control Investors typically cannot ascertain the exact make-up of a fund's portfolio at any given time. nor can they directly influence which securities the fund manager buys and sells or the timing of those trades. with a mutual fund.S.co. you can obtain real-time (or close to real-time) pricing information with relative ease by checking financial websites or by calling your broker. typically after the major U. www. annual fees. mutual funds must calculate their NAV at least once every business day.cc 37 . exchanges close. depending on the timing of their investment. the price at which you purchase or redeem shares will typically depend on the fund's NAV.projectguru. By contrast. You can also monitor how a stock's price changes from hour to hour — or even second to second. Property of Project Guru.  Price Uncertainty With an individual stock.DISADVANTAGES  Costs Despite Negative Returns Investors must pay sales charges. And. which the fund might not calculate until many hours after you've placed your order. In general. investors may also have to pay taxes on any capital gains distribution they receive — even if the fund went on to perform poorly after they bought shares. and other expenses (which we'll discuss below) regardless of how the fund performs.

based on your age.cc 38 . You can begin by defining your investment objectives and needs which could be regular income.Choose the right Mutual Fund Property of Project Guru.Identify your Investment needs Your financial goals will vary. lifestyle. and level of income and expenses among many other factors. Step Two . family commitments. the first step is to assess your needs.co.projectguru. financial independence.HOW TO INVEST IN MUTUAL FUND?? Step One . Therefore. buying a home or finance a wedding or educate your children or a combination of all these needs. www. the quantum of risk you are willing to take and your cash flow requirements.

This is called rupee cost averaging and is a disciplined investment strategy followed by investors all over the world. www. Step Five.co.Select the ideal mix of Schemes Investing in just one Mutual Fund scheme may not meet all your investment needs. By investing a fixed sum each month.projectguru. you buy fewer units when the price is higher and more units when the price is low. the dividend yield and the degree of transparency as reflected in the frequency and quality of their communications. The power of compounding Property of Project Guru. You may consider investing in a combination of schemes to achieve your specific goals. You can also avail the systematic investment plan facility offered by many open end funds. For selecting the right scheme as per your specific requirements.cc 39 .Start early It is desirable to start investing early and stick to a regular investment plan.The important thing is to choose the right mutual fund scheme which suits your requirements. say every month.Invest regularly The best approach is to invest a fixed amount at specific intervals. thus bringing down your average cost per unit. Step Three . If you start now. Step Four . you will make more than if you wait and invest later. Some factors to evaluate before choosing a particular Mutual Fund are the track record of the performance of the fund over the last few years in relation to the appropriate yardstick and similar funds in the same category. Other factors could be the portfolio allocation. The offer document of the scheme tells you its objectives and provides supplementary details like the track record of other schemes managed by the same Fund Manager.

investment objectives. www.projectguru. growth oriented or income seeking RIGHTS OF A MUTUAL FUND UNIT HOLDER A unit holder in a Mutual Fund scheme governed by the SEBI (Mutual Funds) Regulations is entitled to: 1) Receive unit certificates or statements of accounts confirming the title within 6 weeks from the date of closure of the subscription or within 6 weeks from the date of request for a unit certificate is received by the Mutual Fund.whether starting a career or retiring. 2) Receive information about the investment policies.The final step All you need to do now is to for online application forms of various mutual fund schemes and start investing.lets you earn income on income and your money multiplies at a compounded rate of return. financial position and general affairs of the scheme. You may reap the rewards in the years to come.co. Step Six . Mutual Funds are suitable for every kind of investor .cc 40 . conservative or risk taking. Property of Project Guru.

co.cc 41 . 5). annual fee or wrap fee does very little for an investor other than insure that they will pay an advisor a commission for as many years as their relationship exists.3) Receive dividend within 42 days of their declaration and receive the redemption or repurchase proceeds within 10 days from the date of redemption or repurchase. Inspect the documents of the Mutual Funds specified in the scheme's offer document.5 percent of the amount invested in a fund. www. over long periods of time. 4) Vote in accordance with the Regulations to: Approve or disapprove any change in the fundamental investment policies of the scheme. most have not returned as much as an index fund would. an upfront or deferred fee as high as 8. There are also other criticisms levied against mutual funds as a consequence of the first criticism.  Wind up the schemes.  Change the Asset Management Company. Firstly. The dissenting unit holder has a right to redeem the investment.projectguru. some critics do not believe that this should be charged on a percentage basis instead of a flat fee basis. which are likely to modify the scheme or affect the interest of the unit holder. A so-called flat fee. One critique covers the concept of the sales load. It helps Property of Project Guru. CRITICISM OF MUTUAL FUNDS The primary criticism of actively managed mutual funds comes from the historical fact that.

the harder it is to invest.cc 42 . Fund companies typically make money by charging a management fee of anywhere between 0. Many investors believe however that the larger the pool of money one works with. Thus a fund company can be focused on attracting new customers. instead of limiting its assets. as the new investors adding money to the fund would also cause the assets of the fund to increase. hurting its existing investors' performance. Other practices of mutual funds have been criticized from time to time.an advisor create predictable (and since most investments trend upwards) increasing income flow.co. More recent criticisms have focused on the fund managers accepting extravagant gifts in exchange for trading stocks through certain investment banks. it also could motivate the fund to focus on attracting more and more new investors. the advice given seemingly would be bad advice.5-2. Thus the harder it becomes for the mutual fund to perform well. www. Although theoretically this could motivate them to cause the fund to perform well. such as the salary for the manager. but yet visibly attracting money. non-gifting investment bank would charge Property of Project Guru.5 percent of the funds total assets. since a well performing fund would cause the amount invested in the fund to rise and thus increasing the fee earned. Mutual funds are also seen by some to have a systemic conflict of interest with regards to their size. Secondly this payment for advice and other services seems dubious to these critics because with so many mutual funds underperforming. Thus it can be more profitable to the fund to try and allow it to grow as large as possible. such as funds allowing market timing. A great deal of the funds costs are flat and fixed costs. who presumably overcharge the fund compared to what another.projectguru.

Call Money bank deposits Property of Project Guru.3 weeks current accounts or short-term Papers. www. Those who park of their funds in 2 days .TABLE OF MUTUAL FUND SCHEMES Mutual Fund Type Liquidity Money Market Moderate Income Reservation of Capital + Negligible + Objective Risk Investment Portfolio Treasury Certificate Deposits.projectguru.co. Commercial Who invest should Investment horizon Bills.cc 43 .

projectguru.co. Shortterm Government term) securities. Bond Funds Regular (Floating Income . Corporate Bonds Salaried conservative investors Aggressive High Risk Stocks investors with 3 years plus & Salaried conservative investors & More than 9 12 Rate Risk months Government securities 12 months & more Equity Funds Long-term Capital Appreciation To generate that NAV varies Portfolio indices long term out look.Longterm) Gilt Funds Security Income & Interest Rate Risk Predominantly Credit Risk Debentures. 3 years plus returns performance etc of respective indices Balanced Growth Funds Regular & Capital Balanced ratio of Moderate and debt Aggressive & 2 years plus Market Risk equity Property of Project Guru.Shortterm Funds (Floating shortLiquidity Moderate Income + Little Interest Rate Call Money.cc 44 . NIFTY Aggressive investors. www. Those surplus short-term funds with Commercial Papers. Treasury 3 weeks 3 months Bills. returns Index Funds are commensurate with with index like BSE. & Interest Government securities. CDs.

co.projectguru. It is calculated as Total market value of the assets or securities – liabilities in the portfolio of the fund Property of Project Guru.cc 45 . www.Income and Interest funds Risk to ensure higher returns at lower risk FREQUENTLY USED TERMS Net Asset Value (NAV) Net Asset Value is the market value of the assets of the scheme minus its liabilities. Per unit NAV is the net asset value of the scheme divided by the number of units outstanding on the Valuation Date.

Redemption Price It is the price at which open-ended schemes repurchase their units and close-ended schemes redeem their units on maturity. 5 Crore.co.25% and is charged if the investment is redeemed before six months from the date of investment in a mutual fund. Schemes that do not charge a load are called ‗No Load‘ schemes. Sales Load It is a charge collected by a scheme when it sells the units. It is 2.Number of fund‘s units (shares) outstanding Sale Price It is the price you pay when you invest in a scheme. www. Repurchase Price It is the price at which a close-ended scheme repurchases its units and it may include a back-end load. This is also called Bid Price. 2 Crores.projectguru. It may include a sales load.cc 46 . Property of Project Guru. 2 Crore to Rs.25% for subscription below Rs. Repurchase or „Back-end‟ Load It is a charge collected by a scheme when it buys back the units from the unit holders. Also called as ‗Front-end‘ load. 5 Crore and nil above Rs. 1. It is also called as Offer Price. Such prices are NAV related.25% for Rs. However the load structure varies from company to company. Generally it is 2.

www.co.Property of Project Guru.projectguru.cc 47 .

RESEARCH METHODOLOGY RESEARCH:- Property of Project Guru. www.co.cc 48 .projectguru.

observation. we not only talk of the research methods but also the comparison of the logic behind the method we use in the context of our research study and explain why we are using a particular method and why not others. In common parlance. When we talk about research methodology. it refers to a scientific and systematic search for pertinent information on a specific topic.Research is a voyage of discovery.  To compare the return of a mutual fund using different investment ways. RESEARCH METHOD:- Research methods may be understood as all those method / techniques that are used by the researcher during the course of studying his research problem. RESEARCH METHODOLOGY:- Research methodology is a way to solve the problem scientifically and systematically. Research Objectives  To compare performance of different mutual funds in last 1 year. comparison and experiment. Property of Project Guru.co. In this we study the various steps that are generally adopted by researcher in studying his research problem along with the logic behind them.projectguru. It is the pursuit of truth with the help of study. a movement from unknown to known. www.cc 49 .  To develop a new investment way in mutual funds.

cc 50 .co. METHOD OF DATA COLLECTION: - The study made in use secondary sources. SAMPLING DESIGN: - A sample design is a definite plan for obtaining a sample from a given population .  To understand the concept and importance of Mutual Fund & Portfolio Management in today‘s scenario. www. To compare the different portfolios being maintained by selected mutual funds.. SECONDARY DATA COLLECTION: Secondary data have been collected from various Books and websites. RESEARCH DESIGN: - A research design is the arrangement of conditions for collection and analysis of data in a manner that aims to combine relevance to the research purpose with economy in procedure. The research design used in my study is basically exploratory in nature.projectguru.It refers to the technique or the procedure the researcher would adopt in selecting items for Property of Project Guru.

SAMPL E SIZE: Nine ANALYSIS OF DATA: - The data after collection has to be processed and analyzed with the outline laid for the purpose at the time of developing the research plan. classification and tabulation of collected data so that they are amenable to analysis. coding.projectguru. graphs. After that interpretations are drawn and finally. The term analysis refer to the computation of certain measures along with searching for patterns of relationship that exist among data groups . pie charts etc are used. This is essential for a scientific study and for insuring that we have all relevant data for making contemplated comparison and analysis. I hope the study will be interesting for a layman.cc 51 . the size of the sample. a list of suggestions and recommendations is put forward.the sample i. a good experience for the teacher and a key for the industrial pioneers in understanding and facing challenges. www.To analyze the data percentages. Property of Project Guru.co. Technically speaking processing implies editing.e. Judgment sampling has been adopted to select the Mutual Funds.

www.Introduction to the Topic Property of Project Guru.co.projectguru.cc 52 .

The whole study will be carried out in a manner like firstly different mutual funds will be selected. Using some calculations performance will be compared. www.co. Further returns of different investing ways will be compared in the same mutual fund like One Time Investment. Further study would be done to find out that can we develop a new way of investing in them and if yes than what the pre requisite for its implementation. The Mutual Funds under study are as follows: SBI MAGNUM CONTRA RELIANCE GROWTH FUND FRANKLIN INDIA PRIMA FUND HDFC EQUITY FUND DSPML OPPORTUNITIES FUND KOTAK BOND REGULAR FUND JM INCOME FUND LIC MF BOND UTI BOND Property of Project Guru.cc 53 . Than there NAV‘s will be noted from 1 st February 2006 to 31st January 2007.projectguru. Using the Fact Sheet of the selected mutual fund minute details of each will be studied. In it 9 mutual funds have been selected and there performance is compared in last 1 year starting from 1 st February 2006 to 31st January 2007. Systematic Investment Plan.The topic of study is “Comparative Analysis of Different Mutual Funds and Investing Ways”. For this there Net Asset Values is used and portfolio maintained is studied.

cc 54 .projectguru.SBI MUTUAL FUND Property of Project Guru.co. www.

It also contains a large cash component of Rs 120 Crore. Magnum Contra-G Property of Project Guru. It is the top wealth creator for the year 2006-07. along with its successful bet on banking stocks has helped the fund out perform the category. The fund has mainly shifted its focus to large cap space. Society General Asset Management Fund The fund takes contrarian call on the markets. www.37%.cc Fund Rating 55 . This prudence.co.projectguru. which amounts to about 10% of its portfolio.Incorporated 29 JUNE 1987 Ownership Public Ownership Pattern Foreign . It has given compounded annual returns of 67% in past 5 years against the category average of 46%. Domestic-63% Sponsor State Bank of India.

47 Launch Date July 1999 3-Year 57.40 Type Open End 1-Year 13.15 52-Week Low 25.89 3.08 -8.60 37.cc 56 .91 (06/02/07) Year to Date -7.17 6.78 (28/02/07) Returns upto 1 year are absolute and over 1 year are annualized.448.projectguru.18 Risk Grade Below Average 5-Year 53.65 -8.49 Fund Category Equity: Diversified 3-Month -0.90 Return Grade High Return Since Launch 32. www.02 (14/06/06) 1-Month -9.78 Property of Project Guru. Benchmark BSE 100 Relative Performance (Fund Vs Category Average) Portfolio Security Praj Industries Reliance Industries Hindustan Zinc Instrument % Net Assets Equity Equity Equity 4.58 -- Net Assets (Cr) 1.97 4.63 (12/03/07) Trailing Returns As on 12 Mar 2007 Fund Category 52-Week High 39.co.83 -1.66 33.Current Stats & Profile Latest NAV 34.

97 2.09 1.81 1.36 1.42 4.8 1.31 3.73 3.84 2. www.31 1. Kansai Nerolac Paints Torrent Pharmaceuticals India Infoline C C L Products (I) Cummins India T V S Motor Co. Esab India Federal Bank Sundaram Fasteners Ruchi Soya Inds.88 2. Ashok Leyland Merck Ltd.95 4.24 Property of Project Guru.86 1.26 1.61 2.co.cc 57 .Mahindra & Mahindra Jai Prakash Associates Aditya Birla Nuvo India Cements F A G Bearings India Jai Prakash Associates Motor Industries Co.19 4.1 2.48 2.1 3. Sesa Goa Raymond Indraprastha Gas Infotech Enterprises Ansal Prop & Infra TIL Ciba Speciality Chemicals Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity 3.47 5. Motor Industries Co.63 4.53 2.49 7.27 1.projectguru.85 2.72 1.

projectguru.61 12.Top Sectors in Portfolio Basic/Engineering Diversified Health Care Construction Automobile FMCG Services Chemicals Financial Services Technology Metals & Metal Products Textiles Energy 15.83 Sector Property of Project Guru.34 3.67 13. www.37 11.cc 58 .62 12.77 2.53 4.21 % Coposition Composition of Various Sectors 18 16 14 12 10 8 6 4 2 0 Services Financial Services Health Care Basic/Engineerin Automobile Metals & Metal Energy Composition of Various Sectors 1.co.72 10.8 1.13 5.6 5.

RELIANCE MUTUAL FUND Incorporated 30 June 1995 Ownership Private Ownership Pattern Foreign . 1995. Limited (RCTCL). as the Trustee. 1882 with Reliance Capital Limited (RCL). as the Settlor/Sponsor and Reliance Capital Trustee Co.projectguru. www.0%. The name of Reliance Capital Mutual Fund has been changed to Reliance Mutual Fund effective from March 2004. Domestic-100% Sponsor Reliance Capital Ltd About Reliance Mutual Fund Reliance Mutual Fund (RMF) was established as a trust under the Indian Trusts Act.co.cc 59 . Reliance Mutual Fund was formed to launch various schemes under which units are issued to the Public with a view to contribute to the capital market and to provide investors the opportunities to make investments in diversified securities. Property of Project Guru. RMF has been registered with the Securities & Exchange Board of India (SEBI) vide registration number MF/022/95/1 dated June 30.

which move with economic and GDP growth. 1995 Rs 3214. RELIANCE GROWTH FUND It is a mid cap fund with around 75% in mid cap and a maximum of 25% in large caps. FUND DATA Structure Inception Date Corpus Minimum Investment Fund Manager Open-ended Equity Growth Scheme October 8. Large cap exposure gives fund tremendous liquidity but not in bearish time. Sunil Singhania Property of Project Guru. It invests nearly in 60 stocks with a bottom up approach. It is also one of the wealth creators in the year 2006-07. looking at companies that are scalable in sectors with growth and management passion to grow.e. Last year return of this fund is 34.cc 60 .projectguru.000 Mr. 2007) Rs 5. www.22%.The main objectives of the Trust are: To carry on the activity of a Mutual Fund as may be permitted at law and formulate and devise various collective Schemes of savings and investments for people in India and abroad and also ensure liquidity of investments for the Unit holders. infrastructure. textile & cement. 5.co. In top holdings.3% of the assets are invested in Reliance Industries.06 crore (January 31. To deploy Funds thus raised so as to help the Unit holders earn reasonable returns on their savings and To take such steps as may be necessary from time to time to realize the effects without any limitation. It uses opportunistic style of investment i. The fund also invests across sectors such as steel.

projectguru.84 2.82 1.74 3.Entry Load Exit Load Benchmark SPECIAL FEATURE INVESTMENT OBJECTIVE <2cr .77 1. www.15 2. PORTFOLIO OF RELIANCE GROWTH FUND Holdings Equities JSW Steels Ltd Reliance Industries Ltd Bharat Earth Movers Ltd Jindal Saw Ltd Divis Laboratories Ltd Jaiprakash Associates Northgate Technologies Ltd Gujarat State Fertilizers & Chemicals Ltd Cambridge Solutions Ltd Adani Enterprises Ltd Bombay Dyeing & Mfg Company Ltd Bank Of Baroda Escort India Ltd Jain Irrigation Systems Ltd Strides Arcolabs Ltd Lupin Ltd HCL Technologies Ltd State Bank Of India Greaves Cotton Ltd Dena Bank Weightage (%) 87.25 %.87 1.93 3.89 1.94 1.44 2.25%.87 4.03 2.Nil Nil BSE 100 Index Reliance Any Time Money Card To achieve long-term growth of capital by investing in Equity and equity related securities through a researchBased investment approach.co.> _5cr .55 2.55 Property of Project Guru.1.22 2.93 1.51 3.2.94 1.cc 61 . >_2cr<5cr .63 2.03 1.61 1.

Cash & Other Receivables Grand Total 1.81 9.11 1.40 1.34 1.40 1.06 1.52 1.19 1.cc 62 .02 1.projectguru. www.39 1.72 8.co.89 Property of Project Guru.00 SECTOR ALLOCATION Industry Ferrous Metals Industrial Capital Goods Software Pharmaceuticals % Allocation 10.17 1.24 1.45 1.13 100.29 1.02 14.38 1.08 6.16 1.47 1.45 1.26 1.03 1.AIA Engineering Ltd United Phosphorous Ltd Jindal Steel & Power Ltd Crompton Greaves Ltd Maharashtra Seamless Ltd Radico Khaitan Ltd Gujarat Mineral Development Corporation Bharati Shipyard Ltd Orient Paper & Industries Ltd Shivvani Oil And Gas Exploration Allcargo Global Logistics Ltd NIIT Technologies Ltd Mahanagar Telephone Nigam Ltd Bharat Petroleum Corp Ltd Gammon India Ltd Tamilnadu Newsprint Ltd GHCL Ltd Hexaware Technologies Ltd Tata Motors Educomp Solutions Ltd Equity < 1% Of Corpus Derivatives.11 12.

2006 Monday. 2006 Net Asset Value 201.2 218. July 03. February 01. 2006 Tuesday.19 1.34 1.47 1. April 03. 2006 Monday. www.co. 2006 Monday.cc 63 .03 1.26 1.22 229. 2006 Friday. June 01.68 215.72 2.75 251.54 3.projectguru.Services Paper Textiles – Cotton 5.11 199. August 01.11 0.55 2.93 2. 2006 Wednesday.39 1.97 Net Asset Value Date Wednesday.12 Property of Project Guru.39 2.51 193. 2006 Thursday.Banks Petroleum Products Chemicals Construction Auto Industrial Products Fertilizers Consumer Non Durables Auto Ancillaries Information Technology Trading Pesticides Minerals/Mining Cement Oil Transportation Telecom .53 4.94 3.11 4.18 210.14 3. May 01. March 01.27 5.29 1. September 01.

05 FRANKLIN INDIA PRIMA FUND Fund FRANKLIN India Prima Fund is a 12 year old diversified equity fund with a specific focus on mid/small cap stocks from India‘s emerging businesses. www.418 Crore. December 01.12 lakh.e. The corpus of the fund is Rs 2.47 250. The fund holds around 40 stocks in its portfolio.projectguru. If Rs.56%. It is also one of the wealth creator funds. 2007 234.84 in 2006. Last year return of this fund is 20. 2006 Wednesday. The fund holds about Rs 172 Crore as cash. The main feature of the fund is that it hasn‘t seen heavy redemption pressures throughout its 12 years. with the top 10 holdings accounting for 43. neither pure growth nor value addition. 1.95 in 2001 to Rs. Fund Style Property of Project Guru. November 01. 2006 Friday.Tuesday. 174.000 is invested every month for last five years than there present value would have been Rs 2. This style is chosen keeping in mind that different styles tend to out perform in different market conditions. January 02. October 03. The investment approach is style-agnostic i. 2006 Tuesday.co.23 261.78 270.04% of its net assets. Its NAV shoot up from Rs 19.cc 64 .

08 -8.583.55 (14/06/06) 1-Month -11.90 Return Grade Above Average Return Since Launch 24. www.18 Risk Grade Average 5-Year 48.47 Launch Date November 1993 3-Year 35.67% 43.90% 26.76 -8.40 Type Open End 1-Year -2.17 (12/03/07) As on 12 Mar 2007 Fund Category 52-Week High 220.52 6.78 -1.projectguru.Fund Facts Asset Allocation Portfolio Concentration Equity 94% Debt Other 0% 6% Top 3 sectors Top 5 holdings Top 10 holdings 41.cc 65 .51 -- Net Assets (Cr) 1.98 33.15 52-Week Low 139. Benchmark S&P CNX 500 Relative Performance (Fund Vs Category Average) Property of Project Guru.12 37.49 Fund Category Equity: Diversified 3-Month -6.62 (28/02/07) Returns upto 1 year are absolute and over 1 year are annualised.04% Fund Rating Franklin India Prima-G Current Stats & Profile Trailing Returns Latest NAV 184.co.51 (16/01/07) Year to Date -14.

1 3. Ipca Laboratories Kansai Nerolac Paints Torrent Pharmaceuticals India Infoline C C L Products (I) Cummins India T V S Motor Co.09 1.63 4.47 5.42 4.31 3.8 1.27 1.81 1. Sesa Goa Raymond Indraprastha Gas Infotech Enterprises Ansal Prop & Infra TIL Ciba Chemicals Speciality Instrument % Net Assets Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity 7.projectguru.24 Property of Project Guru.72 1.19 4. Esab India Federal Bank Sundaram Fasteners Ruchi Soya Inds. www. Ashok Leyland Merck Ltd.84 2.88 2.85 2.1 2.86 1.Portfolio Stock Aditya Birla Nuvo India Cements F A G Bearings India Jai Prakash Associates Motor Industries Co.36 1.97 2.co.53 2.26 Equity 1.95 4.cc 66 .61 2.31 1.48 2.

2006 Net Asset Value 179. 2006 Thursday. 2006 Monday. 2006 Monday.co. March 01. February 01.cc 67 Metals & Metal Products Chemicals Textiles FMCG .8 1.61 160. August 01. 2006 Monday.21 Sector Net Asset Value Date Wednesday.6 5.61 12.67 Diversified Health Care Construction Automobile FMCG Services Chemicals 13. 2006 Tuesday.72 2. June 01.56 201.75 209.9 162.62 12.Top Holdings in Portfolio % Sector Composition 18 16 14 12 10 8 6 4 2 0 Basic/Engineering % Composition % Composition Basic/Engineering 15.37 11. April 03.27 173.48 Property of Project Guru. www.34 Diversified Services Financial Services Health Care Construction Technology Automobile Financial Services 3.77 Technology Metals & Metal Products Textiles 1.74 185. July 03. May 01.projectguru.53 4.13 5. 2006 Wednesday.

October 03. but in long term. 2006 Wednesday.98 209. The fund doesn‘t offer good returns in 1-2 years.0%.04 185.8 196. 2007 176.71 HDFC MUTUAL FUND Incorporated Ownership Ownership Pattern 30 June 2000 Private Foreign . the fund will hold on to it. December 01. The fund is also known for quick sector move. Last year return of this fund is 31% nearly.cc 68 . So even if a sector don‘t perform well now. Property of Project Guru. 2006 Tuesday.co.Friday. January 02. Top 5 stocks account for 35-40%.88 216. It is also the wealth creator fund. The fund is not having large portfolio with number of stocks between 30– 40. Domestic-100% Sponsor Housing Development Finance Corporation Ltd.projectguru. 2006 Friday. but has potential to perform in future. September 01. November 01. www. The funds investment policy is to buy quality and sustainable businesses at a reasonable price. 2006 Tuesday. Fund Speak The main feature of this fund is that it has beaten its category for eight consecutive years.

843.69 Property of Project Guru.23 4. Lakhs) In % to NAV EQUITY RELATED & EQUITY Lanco Infratech Ltd Subtotal Engineering 48.10 80.854.955.119 125.707 117.84 4.23 87.602 2. Pharmaceuticals Software Industrial Capital Bharat Heavy Electricals Ltd.563. Goods Telecom Bharti Airtel Ltd.60 2.37 6.60 5.30 1. State Bank of India Reliance Industries Ltd.742.004.000 140.000 1.59 125.000 1. Infosys Technologies Ltd.87 1.co.17 5.000 2.Portfolio Name of Instrument Industry + Quantity Market/ Fair Value (Rs. www.81 4.635. Goods Banks Petroleum 700.59 0.000 140.55 310. Services Industrial Capital Crompton Greaves Ltd.33 (a) Listed / awaiting listing on Stock Exchanges Divis Laboratories Ltd.33 0.88 6.projectguru.cc 69 .

Products Apollo Tyres Ltd. Sun Pharmaceutical Industries Ltd. Pharmaceuticals Consumer ITC Ltd. Durables Consumer Kansai Nerolac Paints Ltd. Durables Industrial Capital Thermax Ltd. Oil & Natural Gas Oil Auto Ancillaries Cement Consumer Hindustan Lever Ltd. Satyam Computer Services Ltd. Hindustan Corporation Ltd. Tata Motors Ltd. Aditya Birla Nuvo Ltd. Birla Corporation Ltd. Software Petroleum Petroleum Products Auto Textile Products Cement 325,000 110,000 75,928 224,964 1,174,66 ISMT Ltd. Hanung Toys & Textiles Ltd Solar Explosives Ltd. Eimco Elecon (India) Ltd. Voltamp Transformers Ltd Phoenix Lamps Ltd. Metals Textile Products Chemicals Engineering Power Auto Ancillaries 8 519,066 424,937 145,072 75,890 308,766 811.70 670.37 590.45 507.10 452.61 389.82 2.12 1.75 1.54 1.32 1.18 1.02 915.85 890.07 881.83 825.84 2.39 2.32 2.30 2.16 240,000 1,102.80 2.88 Durables Non 500,000 1,176.00 3.07 172,500 112,000 47,500 1,487.55 1,367.02 1,321.90 3.88 3.57 3.45 Goods 416,969 1,588.23 4.15 Non 186,000 1,589.93 4.15 Non 900,000 1,665.90 4.35 164,531 1,670.24 4.36 Auto Ancillaries 472,796 1,726.18 4.51

Corporation Ltd. Sundaram Clayton Ltd. Grasim Industries Ltd.

Property of Project Guru, www.projectguru.co.cc

70

Global Vectra Helicorp Ltd Chennai Corporation Ltd. Great Eastern Shipping

Transportation

159,810

256.26

0.67

Petroleum Petroleum Products 98,859 218.23 0.57

Company Ltd.

Transportation Consumer Non

96,000

209.81

0.55

EID Parry (India) Ltd. Great Offshore Ltd. Subtotal Total

Durables Transportation

144,640 24,000

201.92 145.41 37,262.16 37,387.75

0.53 0.38 97.27 97.60

MONEY MARKET INSTRUMENTS Reverse Repos Subtotal Total OTHERS Net Current Assets Net Assets 42.14 38,303.44 0.12 100.00 873.55 873.55 873.55 2.28 2.28 2.28

Top Holding

Sectoral Industrial Capital Goods Consumer Non Durables Pharmaceuticals Software Auto Ancillaries Petroleum Products Cement Telecom - Services Banks

Assets(%) 14.22 12.10 11.24 9.57 9.10 7.51 5.61 5.10 4.81

Property of Project Guru, www.projectguru.co.cc

71

Textile Products Oil Auto Metals Engineering Transportation Chemicals Power Money Instruments/Net Receivables Market

4.05 3.88 2.32
% Assets

Assets(%) 16.00 14.00 12.00 10.00 8.00 6.00 4.00 2.00 0.00
Industrial Capital Goods Pharmaceuticals Auto Ancillaries Transportation Oil Metals Banks Cement Power

2.12 1.65 1.60 1.54 1.18

2.40

Sector

Net Asset Value Date Wednesday, February 01, 2006 Wednesday, March 01, 2006 Monday, April 03, 2006 Monday, May 01, 2006 Thursday, June 01, 2006 Monday, July 03, 2006 Tuesday, August 01, 2006 Friday, September 01, 2006 Tuesday, October 03, 2006 Wednesday, November 01, 2006 Friday, December 01, 2006 Tuesday, January 02, 2007 Net Asset Value 112.483 119.495 130.819 134.053 112.237 114.59 115.648 128.063 132.634 140.191 147.937 147.286

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Its fund managers are Mr.000/- Subsequent Purchase . The fund has constantly figured in the top 25% of its category. Anup Maheshwari and Mr. FMCG.co. Soumendra Lahiri.4%.projectguru.Rs. The portfolio is highly diversified. If a sector isn‘t performing the fund believes in buy and hold strategy.Rs. Technology stock is the favourite. It is also a wealth creator fund. Type of Scheme: Options available: Open ended growth scheme Growth Dividend Payout Reinvest Minimum amount: Application First Purchase . The funds mandate is to move around promising sectors. There is no mid and small cap stock in the portfolio as the exposure doesn‘t typically exceeds 30%. 1.000/Entry Load:  For Regular investments Property of Project Guru. 5.DSP Merrill Lynch Opportunities Fund Fund The fund maintains a complicated portfolio. Last year return of this fund is 36.cc 73 . www. but fund also has automobiles. metals and engineering.

25% : For investments < Rs 5.Subscription 3:00 PM Property of Project Guru.0 crs  For SIP investments 1% Exit Load: Contingent Deferred NIL  For SIP investments 1. it is anticipated that the asset allocation shall be as follows: Indicative Asset Allocation Instrument Equity and equity-related Indicative Allocation (% of Corpus) 80% .cc 74 . www.100% Risk Profile securities Fixed income securities Medium to High (debt* and money market 0% .25% : If investment is redeemed before the completion of 2 years Nil : If investment is redeemed on or after the completion of 2 years Sales Charge (CDSC): Under normal circumstances.0 crs Nil : For investments >= Rs 5.2.co. HIGHLIGHTS Cut Off Time .projectguru.20% securities) Low to Medium *Debt securities/instruments are deemed to include securitised debts.

seeking to generate long term capital appreciation and whose secondary objective is income generation and the distribution of dividend from a Portfolio constituted of equity and equity related securities concentrating on the Investment Focus of the Scheme. 2000/. Monthly and Quarterly Options available Rs.cc 75 .20%.Switching Redemption cheques issued^ Systematic Investment Plan (SIP) Minimum Investment for SIP Systematic Withdrawal Plan (SWP) Minimum Withdrawal for SWP Systematic Transfer Plan (STP) Minimum Transfer for STP 3:00 PM 3:00 PM Normally within 3 Business Days of the receipt of redemption request Monthly and Quarterly Options available Rs.co.100% Fixed Income securities (Debt* & Money market securities): 0% . ASSET ALLOCATION Equity & Equity related securities: 80% . Monthly and Quarterly Options available Rs.Cut Off Time -Redemption Cut Off Time . 1. Debt securities/ instruments are deemed to include securitised debts Property of Project Guru.000/Weekly.projectguru.2006) Weekly. 1000/- INVESTMENT OBJECTIVE An Open Ended growth Scheme.(Effective November 15. www.

420.04 3.35% 2.42 3.553.projectguru.42 4.502.74% 2.39% 2.632.98 4. In lakhs) % to Net Assets EQUITY & EQUITY RELATED (a) Listed / awaiting listing on the stock exchanges 1 Reliance Industries Petroleum Products 2 L&T Industrial Capital Goods 3 Infosys Technologies Software 4 Tata Consultancy Services Software 5 Reliance Communication 6 Grasim Industries Cement 7 Bharti Televentures Telecom .189.59 2.20% 2.105.30% 9 Zee Entertainment Media & Entertainment 4.92 3.44 5.228.78% 3.06% 1.75% 2.03 4.061. www.03 3.76% 2.73% 3.73% 2.279.88% 2.67% 2.621.86% Property of Project Guru.972.Portfolio Sr.23 2.53 10 Satyam Computer Services Software 11 Aditya Birla Nuvo Textile Products 12 Tata Motors Auto 13 Jaiprakash Industries Construction 14 Crompton Greaves Industrial Capital Goods 15 Deccan Chronicle Holdings Media & Entertainment 16 BHEL Industrial Capital Goods 17 State Bank of India Banks 18 ITC Consumer Non Durables 19 Sterlite Industries Non .51% 2.Services 8 ONGC Oil 6.095.066. Name of the Instrument Industry Market Value (Rs.No.Ferrous Metals 3.09 5.556.68 3.763.37 3.93 4.277.33 3.26% 3.37 4.49 4.cc 76 .17% 2.11% 2.21 3.338.14% 2.co.072.736.

198.70% 0.97 1.73% 0.56 32 Wire and Wireless Media & Entertainment 1.46% 1.02 2.18 1.55 33 Voltas Consumer Durables 34 Lanco Infratech Engineering 35 HCL Technologies Software 36 Hindustan Construction Construction 37 Karur Vysya Bank Banks 38 United Phosphorus Pesticides 39 BPCL Petroleum Products 40 ACC Cement 41 Tech Mahindra Software 42 Birla Corporation Cement 1.20 Century Textiles Cement 21 Gujarat Ambuja Cements Cement 22 Mahindra & Mahindra Auto 23 ICICI Bank Banks 2.051.98% 0.05% 0.81% 1.35 1.74% 0.784.559.754.60 1.10 30 Bharat Electronics Industrial Capital Goods1.59 1.11 43 Jindal Saw Pipes Industrial Capital Goods 1.cc 77 .82 1.689.194.66 1.72% 0.25 27 MphasiS BFL Software 28 Ansal Properties Construction 29 Siemens Industrial Capital Goods 1.41 1.13 1.81% 0.83 25 TV 18 Media & Entertainment 2.627.623.Ferrous Metals 48 IPCL Petroleum Products 49 Bombay Dyeing Chemicals 1.68% 1.167.36 26 Hindustan Lever Consumer Non Durables 2.307.16% 1.39 1.245.32 44 Cipla Pharmaceuticals 45 IOC Petroleum Products 46 SAIL Ferrous Metals 47 Hindalco Non .503.09 2.18% 1.20% 1.84 31 Amtek Auto Auto Ancillaries 1.71% 0.199.961.756.075.035.23 1.85% 1.78% 0.68% 24 Dr.88% 0.09% 1.48 1.79% 1.26% 1.projectguru.85% 0.70 1.84% 0.32% 1.463.56 1.087.95 1.374.51 1.009. Reddy‘s Laboratories Pharmaceuticals 2.722.268.03 2.92 Property of Project Guru.995.co.80% 0.094.047.34% 1.92% 0.21 1.09% 1.880.37% 1.162.48% 1.657. www.

21% 0.97 315.32 622.13 869.41 776.Rights Banks 67 Sesa Goa Ferrous Metals 68 I-Flex Solutions Software 69 Centurion Bank of Punjab Banks 70 Bajaj Auto Auto 71 Maruti Udyog Auto 72 Voltamp Transformers Industrial Capital Goods 73 Network18 Media & Entertainment Total DERIVATIVES 74 ICICI Feb 2007 Banks 75 BHEL Feb 2007 Industrial Capital Goods 949.62% 0.67 690.39% 0. www.38% 540.43% 0.42% Property of Project Guru.24 114.05% 94.46% 0.87% 0.63% 0.90 140.58% 0.50 Graphite India Industrial Products 51 Colgate Consumer Non Durables 52 Hexaware Technologies Software 53 GE Shipping Transportation 54 Mcleod Russell Consumer Non Durables 55 NRB Bearings Industrial Products 56 Sun TV Media & Entertainment 57 Pantaloon Retail Retailing 58 B L Kashyap & Sons Construction 59 HPCL Petroleum Products 60 Hindalco Rights Non .44 755.51% 0.71 601.70 284.co.82 717.44 741.19% 0.50% 0.64% 0.08% 78.43 0.43 918.10 277.44% 0.36% 0.26 567.16 0.51% 0.16 291.40% 0.056.22 274.82 752.293.62 936.52 0.61 652.52% 0.Ferrous Metals 61 DCM Shriram Consolidated Fertilisers 62 Financial Technologies Software 63 Mastek Software 64 Nestle Consumer Non Durables 65 Bannari Amman Sugar Consumer Non Durables 66 Karur Vysya Bank .77 634.cc 78 .18% 0.29 764.51% 0.48% 0.20% 0.27 0.11 579.11% 1.19% 0.projectguru.

projectguru.cc 79 .46 347.03 2.17 5.15 NON 5.76 Bharti Feb 2007 Telecom . www.765.92 2.11 7.77 4.84 & 8.72 230.00% Major Holdings Sector MEDIA ENTERTAINMENT CEMENT PETROLEUM PRODUCTS BANKS TELECOM .23% 4.74 2.35 5.03 6.000.55 7.06 148.SERVICES CONSUMER DURABLES CONSTRUCTION AUTO NON METALS OIL TEXTILE PRODUCTS PHARMACEUTICALS AUTO ANCILLARIES INDUSTRIAL FERROUS 3.34% 6.21 1.Services 77 Century Textiles Feb 2007 Cement Total MONEY MARKET INSTRUMENTS Cash & Equivalent CBLO / Reverse Repo Investments Net Receivables / (Payables) Total Grand Total 315.15 4.55% 100.9 % Assets Property of Project Guru.21% -0.51 2.co.18 1.60 6.821.16% 1.28 0.417.31% 0.

93 0. www.86 56.58% and Retailing has a share of 0. May 01.co. March 01.09 0.84 42. 2006 Wednesday. 2006 Tuesday. 2006 Thursday. July 03. 2006 Friday.71 43.68 0. 2006 Monday.35 % Assets % Assets 16 14 12 10 8 6 4 2 0 TELECOM PETROLEUM MEDIA & CONSTRUCTION TEXTILE CHEMICALS CONSUMER NON .44 4.44 43. June 01. 2006 Tuesday.projectguru. 2006 Monday.66 44.51 51. October 03. September 01.2 49. April 03. 2006 Friday.cc 80 INDUSTRIAL RETAILING AUTO FERROUS CASH & . February 01. January 02. August 01.51% in the portfolio.88 0.809 Property of Project Guru.09 ENGINEERING FERROUS METALS PESTICIDES CHEMICALS FERTILISERS CASH & EQUIVALENT SOFTWARE INDUSTRIAL CAPITAL GOODS 11.12 47. 2006 Tuesday. 2006 Monday. 2007 Net Asset Value 41. Net Asset Value Date Wednesday.27 52.4 49.37 55.FERROUS Sector Transportation has a share of 0. December 01.55 14. November 01. 2006 Wednesday.PRODUCTS CONSUMER DURABLES 1.98 1.

2. From commercial banking.co. to stock broking. www. the group caters to the financial needs of individuals and corporates.0%.projectguru. Domestic-100% Sponsor Kotak Mahindra Finance Ltd Corpus Ideal Investment Horizon Fund Manager Rs.KOTAK MAHINDRA MUTUAL FUND Incorporated 23 June 1998 Ownership Private Ownership Pattern Foreign . to mutual funds.cc 81 . representative offices and Property of Project Guru. to investment banking. The group has a net worth of around Rs.900 crore and employs around 8.38 Crore 1-2 year Mr. Ritesh Jain Kotak Mahindra is one of India's leading financial institutions. franchisees. to life insurance.800 employees across its various businesses servicing around 2 million customer accounts through a distribution network of branches. 52. offering complete financial solutions that encompass every sphere of life.

Fund This fund has generated a decent income for its investors with reasonably low level of volatility. Kotak Mahindra Asset Management Company Limited (KMAMC).satellite offices across 282 cities and towns in India and offices in New York. Property of Project Guru. even when the Sensex was down. It is the fourth best performing income fund in past six months based on returns. The portfolio of the scheme consists of debt and money market instruments. is the Asset Manager for Kotak Mahindra Mutual Fund (KMMF). a wholly owned subsidiary of KMBL. KMMF offers schemes catering to investors with varying risk . The fund is income generator. It is to be noted that NAV of this fund never fell down. 60-70% of its portfolio consists of high yield assets such as bonds. The balance is employed in riskier government securities.cc 82 . Emphasis on high yield portfolio has kept the fund‘s volatility low. KMAMC started operations in December 1998 and has over 4 Lac investors in various schemes. commercial paper. the G-Sec component is normally maintained between 30-50% and it generally doesn‘t invest in corporate bonds with less than AA rating. Last year return of this fund is 7%.co.projectguru. www. Dubai and Mauritius. corporate deposits and securitised debts. London. Risk management is most important for this fund.return profiles and was the first fund house in the country to launch a dedicated gilt scheme investing only in government securities. The investment strategy is to invest across wide maturity horizons and different kind of issuers in debt market.

2006 Wednesday.501 Property of Project Guru. September 01. June 01.5166 18. 2006 Friday.0739 19. 2007 Net Asset Value 18. 2006 Monday.704 18.2803 18.co. 2006 Wednesday. April 03.Net Asset Value Date Wednesday. July 03. January 02. August 01.3392 18. 2006 Thursday. October 03. 2006 Monday.projectguru. 2006 Friday. 2006 Tuesday.3916 19. www.2249 18.1858 19.9008 19.cc 83 .6115 18. March 01. 2006 Monday.4542 18. November 01. 2006 Tuesday. December 01. 2006 Tuesday. February 01. May 01.

co.Portfolio Property of Project Guru. www.projectguru.cc 84 .

JM INCOME FUND Property of Project Guru.cc 85 .co. www.projectguru.

JM has also been instrumental in educating a burgeoning and prospering middle Property of Project Guru. Financial and Investment Consultancy Services was founded on September 15.projectguru. the JM Group has played a stellar and multi-faceted role in the development of India's capital markets. ranked by assets managed. The Group's origins can be traced back to the 1950s when the Kampani family began to get involved in India's then nascent capital markets. they are among the top most mutual funds in the country.Inception Fund Manager Bench Mark Index Corpus Investment Objective 1st April. Apart from helping companies raise finance. JM Financial Mutual Fund is one of India's first private sector mutual funds-an integral part of the first wave that commenced operations in 1993-94. J. Under the leadership of Chairman Nimesh N. and enjoy a superior performance record.co. 1973. To generate stable long term returns with low risk strategy and capital appreciation/ accretion through investment in debt instruments and related securities besides preservation of capital. Kampani.cc 86 . Dwijendra Srivastava CRISIL COMPOSITE BOND FUND INDEX Rs 26.58 Crore.M. 1995 Mr. www. Today.

www. Liquidity Risk. The portfolio basically includes corporate bonds. broking. they must provide a safe haven for their investments. In 1999. g-sec investments. Today. Property of Project Guru. The fund is in medium risk-return segment.class about the advantages of investing in blue chip companies..6% and five year return of 7. JM Financial Asset Management Private Limited. is not a part of this joint venture. Financial and Investment Consultancy Services Pvt.cc 87 . impeccable research.7%. and Reinvestment Risk. Fund The fund has given a one year return of 2.6% of total assets. Sponsored by J.projectguru. the Asset Management Company of JM Financial Mutual Fund. money market instruments.M. JM Financial Asset Management Private Limited started operations in December 1994 with a simultaneous launch of three funds-JM Liquid Fund (now JM Income Fund). they commenced a joint venture with Morgan Stanley Dean Witter. and strong systems of managing risk scientifically.e. judicious fund management. and co-sponsored by JM Financial Ltd. The top 5 holdings account for 55. fixed income and retail distribution. The fund is income generator. The net assets are mainly invested in AAA rated instruments. The major risks associated are Interest Rate Risk. Their mission is to manage risk effectively while generating top quartile returns across all product categories. that today spans investment banking. Last year return of this fund is 3%. JM Equity Fund and JM balanced Fund. they consider the relative value and the spread offered by the paper in a maturity bucket instead of just the absolute yield. Nearly 25% of total assets are held as cash. JM Financial Mutual Fund offers a bouquet of funds that caters to the diverse needs of both its institutional and individual investors. They believe that to cultivate investor loyalty.co. They are focused on helping their investors realize their investment goals through prudent advice. The philosophy behind investment is that invest in papers that offers value to the investor i.. Ltd.

projectguru.co.cc 88 . www.Portfolio Property of Project Guru.

Net Assets Value

Date Wednesday, February 01, 2006 Wednesday, March 01, 2006 Monday, April 03, 2006 Monday, May 01, 2006 Thursday, June 01, 2006 Monday, July 03, 2006 Tuesday, August 01, 2006 Friday, September 01, 2006 Tuesday, October 03, 2006 Wednesday, November 01, 2006 Friday, December 01, 2006 Tuesday, January 02, 2007

Net Asset Value 27.7296 27.6479 27.7041 27.8435 27.9194 27.8875 27.9256 28.1315 28.2684 28.3517 28.437 28.5386

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UTI BOND FUND

UTI Mutual Fund is managed by UTI Asset Management Company Private Limited who has been appointed by the UTI Trustee Company Private Limited for managing the schemes of UTI Mutual Fund and the schemes transferred / migrated from UTI Mutual Fund.

The UTI Asset Management Company has its registered office at : UTI Tower, Gn Block, Bandra - Kurla Complex, Bandra (East), Mumbai - 400 051 will provide professionally managed back office support for all business services of UTI Mutual Fund (excluding fund management) in accordance with the provisions of the Investment Management Agreement, the Trust Deed, the SEBI (Mutual Funds) Regulations and the objectives of the schemes. State-of-the-art systems and communications are in place to ensure a seamless flow across the various activities undertaken by UTI AMC.

UTI AMC is a registered portfolio manager under the SEBI (Portfolio Managers) Regulations, 1993 on February 3 2004, for undertaking portfolio management services and also acts as the manager and marketer to offshore funds through its 100 % subsidiary, UTI International Limited, registered in Guernsey, Channel Islands.

UTI Mutual Fund has come into existence with effect from 1st February 2003. UTI Asset Management Company presently manages a corpus of over Rs. 34500 Crore.

UTI Mutual Fund has a track record of managing a variety of schemes catering to the
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needs of every class of citizenry. It has a nationwide network consisting 70 UTI Financial Centers (UFCs) and UTI International offices in London, Dubai and Bahrain. With a view to reach to common investors at district level, 4 satellite offices have also been opened in select towns and districts. It has a well-qualified, professional fund management team, who has been highly empowered to manage funds with greater efficiency and accountability in the sole interest of unit holders. The fund managers are also ably supported with a strong in-house equity research department. To ensure better management of funds, a risk management department is also in operation.

It has reset and upgraded transparency standards for the mutual funds industry. All the branches, UFCs and registrar offices are connected on a robust IT network to ensure costeffective quick and efficient service. All these have evolved UTI Mutual Fund to position as a dynamic, responsive, restructured, efficient, and transparent and SEBI compliant entity.

Fund

It is a income scheme with relatively low volatility and stable returns. Time horizon of investment is medium. Investing way being conservative, so a portfolio of Corporate Bonds and g-sec is made. The fund has seen a slow but sure growth in NAV. The fund avoids extreme swings in either maturity or duration. It has a corpus of Rs. 388.98 Crore. The top 10 holdings has major share of corporate bonds than g-sec. nearly 61.7% holding is of AAA rated bonds. Emphasis is on adding value through multiple, diversified strategies combined with volatility analytics, and adjustment to traditional variables such as sector, coupon & quality of companies. The average maturity of its portfolio is 3 years. Its fund manager is Mr. Amandeep Chopra. Last year return of this fund is 4.7%.

Portfolio
NAME OF THE INSTRUMENT Debt Instruments QUANTITY MARKETVALUE % TO NAV

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45 530.co.78 11532. MATURING 18/02/2009 NCD 6.59% RESERVE BANK OF INDIA MATURING 23/03/2015 C D KOTAK MAHINDRA BANK LTD.69 1.69 6703.25% LIC HOUSING FINANCE LTD.98 7.69 24629.64 3205.27 1452.85% HDFC LTD.71 8.12 2.25 13096.74 3.78% POWER FINANCE CORPORATION LTD. MATURING 12/09/2009 PTC 11. MATURING 14/05/2008 PTC 0% TATA MOTORS LTD.21 3. MATURING 01/05/2007 TOTAL:(b) Unlisted TOTAL:Debt Instruments Others GSEC 7.44% RESERVE BANK OF INDIA MATURING 23/03/2012 TOTAL: 300 20 150 100 200 100 1000000 50 3 30 3001.LT MATURING 10/08/2009 NCD 8.48 9. MATURING 21/12/2007 GSEC 7.8 299. MATURING 08/06/2007 NCD 8.71% INDIAN RAILWAYS FIN CORPN LTD.86% UTI BANK LTD.72 299.46 976.96 0.25% LIC HOUSING FINANCE LTD.06 1484.15 2.96 2.projectguru.03 1004. MATURING 23/08/2010 PTC 8. MATURING 23/04/2007 NCD 8.22% STANDARD CHARTERED BANK MATURING 15/07/2013 PTC 0% ICICI BANK LTD MATURING 07/02/2009 NCD 11.2 3.75% CITIBANK N.17 7.35 928. MATURING 13/02/2008 NCD 8.21 686.19 364. MATURING 10/08/2009 NCD 8.8479% ICICI BANK LTD MATURING 22/10/2009 NCD 6.55 4.48 3.64 3.45 Property of Project Guru.22% STANDARD CHARTERED BANK MATURING 15/05/2014 PTC 11.19 1.64 1079.96 250 25 15 15 10 100 1000000 900000 20 5 500000 500000 511000 167000 25 20 7 2500 2366.8 986. www.27 4.02 4.cc 92 .45% HDFC LTD.98 380.A.35 1.61 769.58% INDUSTRIAL DEVELOPMENT BANK OF INDIA LIMITED.34 * * * 150000000 100000000 85000000 1450.7% HINDALCO INDUSTRIES LTD.05% HONGKONG & SHANGHAI BANKING CORP.63 0.(a) Listed/awaiting listing on Stock Exchanges NCDR 7.6 0.65% CITIFINANCIAL CONSUMER FINANCE INDIA LTD. MATURING 15/03/2007 NCD 9.52 0.22% STANDARD CHARTERED BANK MATURING 15/04/2013 PTC 11. MATURING 05/08/2008 NCDR 7.45 3.22% STANDARD CHARTERED BANK MATURING 15/02/2014 PTC 11.82 736.73 594.18 1.98% INDIAN RAILWAYS FIN CORPN LTD.08 3498.64 0.03 536.22% STANDARD CHARTERED BANK MATURING 15/10/2014 PTC 11. MATURING 31/01/2010 PTC 11.64 NET CURRENT ASSETS C P EXIM BANK MATURING 12/07/2007 TOTAL: TOTAL:Others - 0 80000000 2729. MATURING 25/07/2012 NCD 6% TATA TEA LTD. MATURING 31/03/2007 TOTAL:(a) Listed/awaiting listing on Stock Exchanges (b) Unlisted NCDR 6.71 2.21 1. MATURING 01/06/2007 PTC 10.41 369.8 1001.58% TATA SONS LTD.79 106. MATURING 11/12/2016 NCD 14. MATURING 01/04/2007 PTC 11.63 2.71 1.03 826.75% RELIANCE INDUSTRIES LTD.85% LIC HOUSING FINANCE LTD.39 500.54 1090.23 2278.16 0.75% CITICORP FINANCE INDIA LTD. MATURING 14/01/2008 NCD 13.9 1.22% STANDARD CHARTERED BANK MATURING 15/06/2014 PTC 11.58 7.

February 01.3934 21. 2006 Tuesday. www. January 02.9533 21.8577 20.2952 21. 2006 Thursday. 2006 Tuesday. July 03. 2006 Tuesday.579 20. 2006 Monday. March 01. 2006 Friday.5554 Property of Project Guru. 2006 Wednesday. August 01. September 01.6422 20.5851 20. 2006 Monday.88 Net Asset Value Date Wednesday. June 01.projectguru. October 03. November 01.cc 93 .7818 20.TOTAL:UTI-Bond Fund 31332. May 01. April 03.529 21. 2006 Friday. 2007 Net Asset Value 20.1273 21. December 01.co.8763 20. 2006 Wednesday. 2006 Monday.

LIC Mutual Fund Bond Life Insurance Corporation of India set up LIC Mutual Fund on 19th June 1989 and contributed Rs.cc 94 . 1882.projectguru. The Company commenced business on 29th April 1994. The Trustees are responsible for appointing a Custodian. 1993. 2 Crores towards the corpus of the Fund. discretion and management of the affairs of the Trust. The Trustees have also to report periodically to SEBI on the functioning of the Fund. www. LIC Mutal Fund Asset Management Company Ltd. LIC Mutual Fund was constituted as a Trust in accordance with the provisions of the Indian Trust Act. Property of Project Guru.co. The Settlor is not responsible for the management of the Trust. as the Investment Managers for LIC Mutual Fund. The Settlor is also not responsible or liable for any loss or shortfall resulting in any of the schemes of LIC Mutual Fund. The Trustees of LIC Mutual Fund have appointed LIC Mutual Fund Asset Management Company Ltd. The Trustees should also ensure that the activities of the Trust and the Asset Management Company are in accordance with the Trust Deed and the SEBI Mutual Fund Regulations as amended from time to time. The Trustees of the LIC Mutual Fund have exclusive ownership of Trust Fund and are vested with general power of superintendence. was formed on 20th April 1994 in compliance with the Securities and Exchange Board of India (Mutual Funds) Regulations.

projectguru.The investors under the schemes can obtain a copy of the Trust Deed. In its portfolio 24. February 01. April 03. Last year return of this fund is 4. 2006 Friday.0122 19. August 01.0542 19.882 19.34%.3% holding is of AA. The average maturity of its portfolio is 1. The annual average return is 7.7%. 2006 Monday. 2006 Tuesday.3877 19.43%. 2006 Wednesday. 2006 Friday. June 01.3 years.4% of its net assets as corporate bonds. the text of the concerned Scheme as also a copy of the Annual Report.5848 19. September 01.& AA+ bonds. November 01.75% in comparison to the category average of 7. 2006 Monday.1114 19. December 01.6944 19.3326 19. 2006 Monday. October 03.2687 19. July 03.co. 2006 Thursday. www. This is due to high exposure to corporate bonds. March 01. 2006 Tuesday.7949 19. 2006 Wednesday. Fund Life Insurance Corporation Mutual Fund Bond is one of the consistent performers in the income category fund. on a written request made to the LIC Mutual Fund Asset Management Company Ltd. May 01.cc 95 . In August 2006 it was having 87.6-7. It is the only income fund that doesn‘t give exposure to government security. Ten year yield of the fund is nearly 7. Net Assets Value Date Wednesday.9989 Property of Project Guru. 2006 Net Asset Value 19.

794.74 1.67 4.59 4.839.02 50 50 5 515.cc 96 .209.95 2.86 128.57 3.29 AAA(FSO) 100 AA+ 100 AAA(SO) 3 AAA(SO) 14 294.Tuesday.7 500 493.000.55 370 SUNDARAM FINANCE Finance FINOLEX INDUSTRIES Chemicals AAGOVT.1 16.65 4.Bonds/Debentures Listed / Awaiting Listing on Stock Exchanges I C I C I BANK TISCO ACC Banks Ferrous Metals Cement AAA AAA AA+ AA+ 1800 1.23 17.58 491.00 1. 2006 19.000. January 02.30 1.44 1650000 1.8549 Portfolio Debt Instruments . www.co.79 4.2 SECURITIES Finance Property of Project Guru. SECURITIES Govt Securities Sovereign 500000 P1+ 37 RABO INDIA FINANCE Finance Privately placed / Unlisted JSW STEEL DSP ML CAPITAL KOTAK PRIME Securitised Debt INDIAN RETAIL ABS TRUST ASSET Finance MAHINDRA Ferrous Metals Finance Finance AA- 2200000 1.00 11.projectguru.29 9.24 9.

59 Property of Project Guru.64 1.121.cc 97 .83 100 Net Assets I C I C I BANK 1.43 9.57 10.79 16.758.67 JSW STEEL DSP ML CAPITAL KOTAK MAHINDRA PRIME INDIAN RETAIL ABS TRUST ASSET SECURITIES TRUST Cash 'n' Call.29 11.TRUST Total: Money Market & Net Receivables/Payables Cash 'n' Call. SECURITIES RABO INDIA FINANCE 9.projectguru.24 4.64 10.44 4.43 10.74 9.29 10. Current Assets & Receivables 3.43 17.co. Current Assets & Receivables Total: Scheme Total: Graphical Representation of the Portfolio 1.637.65 4.1 TIS CO ACC SUNDARAM FINANCE FINOLEX INDUSTRIES GOVT.2 2. www.19 89.57 4.121.

www.cc 98 .projectguru.co.Property of Project Guru.

www. Than the number of units that the investor will get is as follows: - Total Investment Rs 12. An entry load of 2. At the date of investment let the NAV of the fund be Rs 12/.projectguru. Depending upon the Net Asset Value (NAV) of the fund units are allotted to the investor.000/NAV Rs 12/- Property of Project Guru.co.only. These are: One Time Investment Systematic Investment Plan (SIP) Let us discuss each. The minimum amount that must be invested in such a way is Rs. 5.Different Investing ways in Mutual Fund There are basically two ways to invest in a Mutual Fund. One time investment In this way of investment investor pays the entire investment amount in one time only.in one time only in Reliance Equity Fund. Let an investor wants to invest Rs 12.per unit.cc 99 .000/.000/.25% (nearly every fund charges) has to be paid by the investor. Let us understand it with the help of an example.

and the investment will be made regularly.27/Units actually purchased by investor = Rs 12. Therefore. The minimum amount that must be invested in such a way is Rs. you can either give post-dated cheques or ECS instruction. This way of investment is recommended for those investors who are sensitive because "emotions" may make the investor susceptible to "mistakes in timings of his purchases and sales". Rs 500/. www. An SIP allows you to buy units on a given date each month. An investor can invest any amount in multiple of 5. However with this way of investment the investor might loose future opportunities as available in SIP due to fluctuations in Sensex. you may need to do it on 4 different dates. if you wish to invest Rs 100.000 / Rs 12.cc 100 .25% (Present Day NAV)] i. 6.a month at least continuously for one year.projectguru.25% Effective NAV that investor will get [Present Day NAV + 2.25% (nearly every fund charges) has to be paid by the investor every month.e.Entry Load 2. In this way of investment investor pays the entire investment amount over a time period generally 1 year.000/only i. Let us understand it with the help of an example. Depending upon the Net Asset Value (NAV) of the fund units are allotted to the investor. Once you have decided on the amount you want to invest every month and the mutual fund scheme in which you want to invest.000 per month.co.e. regularly. Property of Project Guru.25*12)/100 = Rs 12. 12 + (2. Systematic Investment Plan (SIP) SIP is a method of investing a fixed sum. It is very similar to regular saving schemes like a recurring deposit.27 = 978 Units. SIPs generally start at minimum amounts of Rs 500 per month and the upper limit for using an ECS is Rs 25000 per instruction. so that you can implement an investment / saving plan for yourself. Entry load of 2. in a mutual fund.

27 = 81.e. In the same way investor will invest Rs 1000/.50 Units. At the date of investment let the NAV of the fund be Rs 12/.25% Effective NAV that investor will get [Present Day NAV + 2.50)/100 = Rs 12.Let an investor wants to invest Rs 12. quarterly.000/Investment on 1st January (Monday) 2004 Rs 1.e.78/Units actually purchased by investor = Rs 1. Property of Project Guru.in SIP in Reliance Equity Fund on 1st January.every month continuously for next 10 months.74 units. The main advantage in SIP is that if Sensex is down on the day of investment than previous day investor will get more units as NAV will also fall generally.50 + 78. 12. 2004. www.25*12)/100 = Rs 12. So in the month of February the total units holded by the investor are 81.projectguru. 12 + (2.cc 101 . Depending upon the NAV every month investor will get units after deducting the entry load. Now let NAV on 1st February (Wednesday) be Rs 12.50 Entry Load 2.25% (Present Day NAV)] i. The investor can invest using SIP every month.27/Units actually purchased by investor = Rs 1.24 Units. It is to be noted that Investor can do additional purchase any time both in One time investment as well as SIP.co.25*12.24 = 159.000 / Rs 12. half yearly.50 + (2.000/.per unit.000/(Total Investment / Number of months) NAV Rs 12/Entry Load 2.000 / Rs 12. Than the number of units that the investor will get is as follows: - Total Investment Rs 12.25% (Present Day NAV)] i.25% Effective NAV that investor will get [Present Day NAV + 2.78 = 78.

co.projectguru. But there are certain drawbacks: Property of Project Guru. as it really forces you to buy low. typically mutual funds.e. how much your portfolio shall be worth any given time. and you decide to increase your portfolio by a certain sum per month. year. and sell high.) The value of your portfolio will of course fluctuate according the movements of the markets.cc 102 . (I. This investment way is not practiced till time. semester..Value Averaging as an Investment way An investment strategy designed to reduce volatility in which securities. www. There might even be times when you will have to withdraw moneys when markets make a big jump up.. and thus will you have to put in more money every month. you start with a sum X to start with. when the markets drop (to keep up with your projected growth) or less when the markets rise.) you decide in the beginning. are purchased at regular intervals in amounts which increase when the market drops and decrease when the market rises Instead of simply adding X-amount into your portfolio every month (week. This all seems logic in an academic sense.

Something that is filled with rough guesswork at best of times. change of lifestyle.cc 103 .The administration of such a portfolio amounts to a fair-sized Excel sheet. and needs careful attention at regular intervals. 2006 = Rs 201. and then work out how much you have to save every month.000/NAV as on Feb 1. Total Investment = Rs 12.25% (NAV of the day) = Rs 4. Comparison of returns from a fund in same time period using different investment ways Assumptions 1 There is no withdrawals from the selected funds from 1 st February. Fund: RELIANCE GROWTH FUND Investment Way Lump sum.53 Property of Project Guru..projectguru. But even this number can be nothing short of arbitrary.18 Entry load @ 2. 2007 by the investor. Of course can you say: I will need X amount when I'm 45 in order to retire early. As John Mayard said: Markets can remain irrational longer than you can remain solvent. Many people in their accumulation phase would be hard put to suddenly even out ones portfolio after a 20% market decline. 2006 to 2nd January. health. as there are factors like: Inflation. 2 Units are issued to the investor as soon as he made the investment.co.. www. One will have to make a calculation of how much a portfolio will have to grow every month. live expectation. development of social security.

23 261.68 215. 2006 November 01. 2006 March 01.18 210.5 Rs 22.54 4.70 = 58.86 4.5 Rs 22.5 Rs 22.5 Rs 22.06 Calculations Investment per month = Rs 1.05 = 15752 1 year return = [(15752-12000)*100]/ 12000 = 31.000/Load @ 2.90 3.65 4.co.47 250.5 Rs 22. 2006 August 01.75 251. 2006 October 03.33 = Rs 205.90 5.53 = Rs 205.5 Rs 22. Average Price = Total of NAV‘s in which investment is made / number of times investment made = 201.73 3. 2006 December 01.3 Investment Load@2.70/- Investment Way SIP Date February 01.05 Units Value = 58.2 218. 2006 May 01.000 / 205.33 * 270.88 4.25 3. 2006 July 03.18 + 4.17 3.78 270.51 193.cc 104 . www.Effective NAV = 201.5 Rs 22.projectguru.5 Units 4.25% Rs 1000 Rs 1000 Rs 1000 Rs 1000 Rs 1000 Rs 1000 Rs 1000 Rs 1000 Rs 1000 Rs 1000 Rs 1000 Rs 1000 Rs 12.5 Rs 22.= Rs 22. 2007 Total NAV 201. 2006 January 02.62 52.22 229.12 234.5 Rs 22.11 199.5/- Property of Project Guru.000/.5 Rs 22.27%.05 2735.33 NAV as on Jan 2.000 Rs 22.70 Units Got = 12. 2006 September 01.25% on Rs 1. 2006 June 01.5 Rs 22.06 4.18 / 1 = Rs 201. 2007 = Rs 270.18/Average Cost = Total Investment / Units Purchased = 12000 / 58. 2006 April 03.5 4.

000/Load @ 2. 2006 = Rs 201. Average Price = 2735.5/NAV on 1st Feb.5/- Investment Way Value Averaging Here our objective is that in 1 st month the value of our investment should be Rs 1. 2006 on NAV Rs 201. Calculations Investment per month = Rs 1.059/Return = [(14059 – 12000)* 100]/12000 = 17.15%.71/Units Purchased = 4.co.05 = Rs 14.000/and in 2nd month it should be Rs 2.94/Average Cost = 120000 / 52.25% on Feb 01.000/-. Similarly in the beginning of 12 th month it should be Rs 12.86.06 = Rs 230.06 * 270.cc 105 .53/Effective value at which unit will be purchased = Rs 205.18 = Rs 4.Effective value at which unit will be purchased = Rs 977.000/-.86 In the same way units purchased for the next 11 months has been calculated. 2007 Total Units Purchased = 52.projectguru.18/Units Purchased = 4. On 2nd Jan. Now On March 01.3 / 12 = Rs 227.05/Investment Value = 52.06 NAV = Rs 270. 2006 Property of Project Guru. www.

Rs 1.co.000.95/Units Purchased = 979 / 214.55 = 9. Returns Value of the investment as on January 02.021 = Rs 979/Now Load @ 2.22 = Rs 4. In the same way we will calculate the investment require to be made in next ten months.86 Current Value = NAV* Total Units Holded = 210.25%) Made + NAV (Rs) (Rs) February 01.projectguru.73/Effective value at which unit will be purchased = Rs 214.88%. It is being assumed that Entry Load will be charged every month like in case of SIP. www.41.86 = Rs 1021/Since we are in second month of investment so as per the rules we want our investment to be of value Rs 2.18 -------- 205.94/Average Cost = 9914 / 44.3 / 12 = Rs 227.86 Property of Project Guru.71 1000 4.86 + 4.985/Total Investment Made = Rs 9914/One year return = [(11985-9914)* 100]/9914 = 20.38 = Rs 223.000/-.95 = 4.NAV = Rs 210.22/Units Holded = 4.55 So Total Units Holded in 2 nd Month = 4. Thus Investment Required = Rs 2. Average Price = 2735. 2006 on NAV Rs 210.cc 106 . 2007 = 44. 2006 201.25% on March 01.38/- Date NAV (Rs) Current Load Value (Rs) Investment Units Got (2.22 * 4.38 * 270.05 = Rs 11.

11 199.05 2735.12 979 838 733 1595 1395 1220 128 404 406 550 666 9914 4.34 219.05 2.67 276.25 6.March 01. 2006 April 03.6345/- Investment Way SIP Property of Project Guru.96 = Rs 18.85 7.58 2. 2007 Total 210. www. 2006 October 03.projectguru. Total Investment = Rs 12.22 229.65%. 2007 = Rs 19.55 223 240 255.86 267.6345 Units Got = 12.000 / 18.57 2.2249/Average Cost = Total Investment / Units Purchased = 12000 / 643. 2006 September 01. 2006 November 01.2249 / 1 = Rs 18.3 1021 2162 3267 3405 4605 5780 7872 8596 9594 10450 11334 214. 2006 June 01.47 250. 2006 August 01.501 Units Value = 12558 1 year return = [(12558-12000)*100]/ 12000 = 4.co.95 234.2 218.95 204 197.4096 Effective NAV = Rs 18.23 261. 2006 January 02. 2006 December 01.78 270.96 NAV as on Jan 2.000/NAV as on Feb 1. 2006 July 03.57 1.cc 107 .38 Kotak Mahindra Investment Way Lump sum.9 257.12 234.17 0. 2006 May 01.41 44. 2006 = Rs 18. Average Price = Total of NAV‘s in which investment is made / number of times investment made = 18.51 193.55 3.2249 Entry load @ 2.68 215.68 1.84 6.6345 = 643.75 251.25% (NAV of the day) = Rs .

5 Rs 22.5 Rs 22.79 52.Date February 01.6345 18.20 Investment Made (Rs) Units Got Property of Project Guru.7653 Average Cost = Rs 19.18 53. 2006 March 01.501 225.2803 18. 2006 October 03.2249 18.0739 19.3392 18.1858 19.1892 Investment Way Value Averaging Date NAV (Rs) Current Value (Rs) Load (2.5 Rs 22.24 50.5 Rs 22.3392 18.5166 18.6115 18.5 Rs 22.35 Using the same way and method as used in calculation of return of Reliance using SIP we will find that One year return = 1.4542 18.26 51.4542 --------980 1984 2996 18. 2006 May 01.5 Rs 22. 2006 January 02. www.projectguru.9008 19.2803 18.94 50.25%) + NAV (Rs) February 01.97 52. 2006 November 01. 2006 June 01.co.25% Units Rs 1000 Rs 1000 Rs 1000 Rs 1000 Rs 1000 Rs 1000 Rs 1000 Rs 1000 Rs 1000 Rs 1000 Rs 1000 Rs 1000 Rs 22. 2006 September 01.12 625.3916 19.57 54. 2006 August 01.5 Rs 22.5 53. 2007 Total NAV 18.5 Rs 22.8694 1000 1020 1016 1004 53.5 Rs 22.63 54.7518 18. 2006 March 01.2249 18.1838 Investment Load@2.63 53.40 50. 2006 December 01.704 18.625% Average Price = Rs 18.5 Rs 22.30 52.47 53. 2006 July 03.52 52.71 51.5 Rs 22.cc 108 . 2006 May 01.6916 18. 2006 April 03. 2006 April 03. 2006 18.

34 52. 2007 Total 18.503 19.co.05 48.0739 19.7653 Average Cost = Rs 19. 2006 July 03.6175 19.10 48. 2006 December 01.326 19.June 01.1248 19.704 18.projectguru.73% Average Price = Rs 18.09 614.1858 19.0302 19.92 49.9398 1010 996 993 948 948 968 914 959 11776 53. 2006 September 01.6115 18. www.60 49. 2006 January 02.17 Property of Project Guru.828 19.cc 109 .29 Using the same way and method as used in calculation of return of Reliance using Value Averaging we will find that One year return = 1. 2006 October 03.9008 19.501 225. 2006 November 01.9332 19.3916 19.1838 3990 5004 6007 7052 8052 9032 10086 11041 18.33 51.34 46. 2006 August 01.5166 18.

it would be desirable to review the various aspects of the present study.co. who after completing his long and arduous journey reaches his destination and looks back upon the area covered by him for recalling the important landmarks and experiences he came across.FINDINGS Like a traveler. an attempt is made to summarize its major findings and suggestions on the basis of forgoing chapters. similarly.projectguru. www.cc 110 . So prior to winding up this study. Property of Project Guru.

Some people viewed that Sensex growth was valuated higher. Telecom. Oil. www. NAV of all the equity related funds fell down in June. 4. The rise in the level of margin trading was very high. It proves the principal of high risk. Maintaining cash also enables them to invest in any lucrative instrument as it comes. 3. 5. FII‘s were net sellers in emerging markets to book profits. This putted lot of impact as infrastructure development is in Boom in INDIA. Infrastructure.Findings: - 1. The one year equity related funds is higher than other funds. high return. Property of Project Guru. July. All the Equity related funds invested in high growth.co. BSE Metal Index lost 22 per cent. Many reports were issued which criticized the growth shown by Sensex. It was speculated by experts that Sensex may touch 9000 mark.projectguru. The main reasons for Sensex fall were found to be: The interest rate hike in the US by the Federal Reserve Bank. However those funds which invested in safer instruments like Bonds. Industry feared more tax brackets. current high importance sectors Like Energy. IT. Auto etc. Government Securities there NAV were not much affected.cc 111 . International Crude Oil Prices were rising. 2. so a lot of emerging markets pulled back. Markets in US and Japan were attracting liquidity and inflation scare was also there. To maintain liquidity all the mutual funds have cash holdings of nearly 10% out of there total assets. and August 2006 due to Fall in the Sensex.

projectguru.only. Property of Project Guru. However HDFC Mutual Fund gave one year return of nearly 34%.co. Total number of instruments in its portfolio is 77. Average Price which a investor has to pay to invest in a mutual fund was found to be less in one time investment than opting for SIP or Value Averaging (if available). Average Price. As we have seen in the calculations at one time investor was investing Rs. 1596/.cc 112 . This is one of the reasons why its one year returns are more. One year return in One time investment was found to be more than in Value Averaging investment way. whose average cost was further less than that associated with SIP. Average Cost in one time investment was found to be less in comparison to other investing ways. which was further high than one year return using SIP. Average Price which an investor has to pay to invest in a mutual fund was found to be equal in SIP and Value Averaging. with number of instruments in its portfolio close to 60. 8. 11.and at other Rs 158/. www. More number of securities only complexes the portfolio management. As the NAV increases.4%. 7. 10. 12. 9. Average Cost associated with a mutual fund was found to be least in one time investment than Value Averaging. 13. the number of units which an investor gets decreases and viceversa. To practically implement value averaging the minimum amount condition like in SIP has to be eliminated. So it‘s important what instrument we include in portfolio rather than the number of securities. DSP Merrill Lynch Mutual Fund gave one year return of 36.6.

Property of Project Guru. Growth fund option gives investors good returns as well as capital appreciation.projectguru.co.14.cc 113 . www.

Property of Project Guru.co.Suggestions 1. Best time to invest in stock market is when it is down because with same investment money he will get more value.projectguru.cc 114 . Mutual Fund is the best way to enter into market particularly for those investors who want good returns with minimum risk as fund of mutual funds is handled by an expert. www. 2.

To get good returns investor must invest considering the time horizon of at least two to three years. Those investors who are risk averse must invest in open ended funds because he can look at the past performance of the fund under consideration. www. Portfolio management is a difficult task. Property of Project Guru. so he must choose the fund in which investment is to be made by clearly understanding the little aspects associated with it. 4. Individual investors must also choose a basket of securities instead of making investment in only one or two instruments.projectguru. 6. 8. 9. 5. 7. So fund managers must choose optimal number of securities which meets the objectives of fund. so that even if one instruments return is negative other instruments return can compensate that. Diversification of portfolio is must as it will reduce the unsystematic risk and give the return an edge. Since there are large number of mutual funds in which an investor can invest. This will help him in getting good returns.cc 115 .co. Mutual Fund Companies must devise fund considering the end investor in mind.3.

projectguru.Limitations The researcher was inexperienced.cc 116 .co. www. Property of Project Guru.

The portfolio being actually maintained under different market conditions in last one year couldn‘t be ascertained. The portfolio being maintained by different funds changes with market conditions.cc 117 .co. As. The portfolio published by the various Asset Management Companies might not be the real one. if it would be so than any individual can invest in the manner similar to portfolio of funds. www. Property of Project Guru. The actual hurdles in making value averaging as an investment way in portfolio couldn‘t be found. The objective of including a particular sector in the portfolio by the fund manager couldn‘t be known. To develop a new way of investment lot of calculations needs to be done.The scope of the study was very wide as there are hundreds of mutual funds of different types but only few have been studied. but here only few has been done.projectguru.

cc 118 .co.Conclusion Property of Project Guru.projectguru. www.

So he must do his homework very clearly. As mutual fund investments are taken. While choosing the fund it is also very necessary that he chose funds investing in different sectors. Selecting a fund is not an easy task. care by expert fund managers so chances of making a loss in the investment are very less. the NAV of all the equity related funds fell down. risk taking capability. Further they should insure that they make investment in basket of instruments as this will give those advantages of various sectors. Equity related funds give more returns.Thus on the whole it can be concluded that there is no conclusive evidence which suggest that performance of mutual fund scheme portfolio is superior to others.co. But the returns are very less in comparison to other instruments. But while investing they must consider there investment objectives. Government Bonds…. A lot of research has to be done onto it.gives investor the assured return with nearly no risk. but the risk associated is also very high. Each investment alternative has its own strengths and weaknesses. Property of Project Guru. It would be clearer from the fact that when Sensex was down in the middle of 2006. Right now practical application of investing in mutual fund by using Value Averaging appears to be difficult. expected returns. Depending upon these they must choose the instrument in which they should invest. In last we can conclude that those investors who wish to get good returns with minimum risk they must invest in mutual funds. So if an investor wants to get good returns with minimum risk he must invest in basket of securities. But it is for sure performance of the most of the funds in better.cc 119 . Mutual Funds are probably the best investment tool for those persons who don‘t know the basics of Stock Market but wish to invest in it. But if it is applied than by investing a small amount an investor will be able to get good returns in comparison to SIP. www.projectguru. at the same time minimize the risk. On the other hand investing in safer instruments like Bank Deposits.

cc 120 .co. www.projectguru.BIBLIOGRAPHY Property of Project Guru.

dspmlmutualfund.amfiindia.com www.com www.com www.com www.com Books Verma.utimf.com www.cc 121 . Punithavathy.com www.Websites www.com www.franklintempletonindia.com www.com www. Pandian. Kothari. ―Research Methodology‖.. ―Security Analysis and Portfolio Management‖.hdfcfund.reliancemutual.com www. C.com www. 2nd Reprint.jmmutual.C. Property of Project Guru.projectguru. 2nd Edition.co.sbimf. Dr J. ―Mutual Funds & Investment Portfolio‖.kotakmutual.valueresearchindia..mutualfundindia. New Age International Publishers. Vikas Publications. 2005. www. Bharat Publications.licmutual.R.

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