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“MUTUAL FUND” WITH SPECIAL REFERENCE TO
KARVY (HYDERABAD) (Submitted in Partial Fulfillment of the Award of the Degree
MASTER OF BUSINESS ADMINISTRATION
H.T NO: 112G1E00A5
Under The Guidance Of Mrs. ANNAPURNA M.B.A (ASST.PROF) DEPARTMENT OF MANAGEMENT STUDIES ANANTHA LAKSHMI INSTITUTE OF SCIENCE&TECHNOLOGY (AFFILIATED TO JNT UNIVERSITY) ANANTAPUR DIST 2011-2013
DECLARATION I here declare that the project report entitled A STUDY ON “MUTUAL FUND”” has been prepared by me in partial fulfillment of the requirements for the award of the degree of “MASTER OF BUSINESS ADMINISTRATION” I also declare that this project work is a result of my effort and it has not been submitted to any other university for the award of any degree or diploma. PLACE: DATE:
H.T NO: 112G1E00A5
With a profound sense of thankfulness, I acknowledge my indebtedness to my company guide Mr. SATHISH (RELATIONSHIP MANAGER) Faculty guide Mrs Mrs. ANNAPURNA
valuable guidance, timely suggestions and constant encouragement. Their insightful criticisms and patience throughout the duration of this project have been instrumental in allowing this project to be completed. My sincere thanks are to the name of Director, Mr. RAMESH NAIDU (M.A) (P.hd)., name of HOD NAGA PRABHAKAR (M.com, M.B.A) and all the staff members of Department of management studies, ANANTHA LAKSHMI INSTITUTE OF SCIENCE&TECHNOLOGY,For their consistent guidance in my project work. Their continual support and careful attention to the details involved in producing a document of this nature are very much appreciated.
H.T NO: 112G1E00A5
CONTENTS CH. CHAPTER -1 INTRODUCTION OBJECTIVES OF THE STUDY NEED &IMPORTANT OF THE STUDY SCOPE OF THE STUDY RESEARCH METHODOLOGY LIMITATIONS OF THE STUDY CHAPTER -2 PURTICULARS PAGE NO. REVIEW OF LETERATURE CHAPTER -3 INDUSTRY PROFILE COMPANY PROFILE CHAPTER-4 ANALYSIS & INTERRETATION OF THE STUDY CHAPTER -5 FINDINGS SUGGESTIONS CONCLUSIONS CHAPTER-6 BIBLIOGRAPHY APPENDIX CHAPTER-7 . NO.
CHAPTER -1 INTRODUCTION .
Anybody with an investible surplus of as little as a few thousand rupees can invest in mutual fund . A Draft offer documents is to be prepared for launching a fund. That means that. Thus. As you probably know. that’s where the understanding of fund ends. its common knowledge that investing in mutual fund is (or at least should be) better than simply letting cash waste away in a saving account but for most people. in the United States alone. professional fund managers. mutual funds have become extremely popular over the last couple of decades what was once just another obscure instrument is now part of daily lives. investing means buying mutual funds After all. . professionally managed basket of securities at a relatively low cost. acting on behalf of the Mutual Fund. the cost involved in the process and the broad rules for entry into and exit from funds and others areas of operation. it specifies the investment objectives of the fund. Typically.INTRODUCTION SEBI (Mutual Fund) Regulations 1993 defines Mutual Fund as “a fund established in the form of a trust by a sponsor to raise money by the trustees through the sale of units to the public under one or more schemes for investing securities in accordance with these regulations” The rationale behind a mutual fund is that there a large number of investors who lack the time and or the skills to manage their money. the risk associated. trillions of dollars alone are invested in mutual fund. In fact.Each mutual fund scheme has defined investment objective and strategy. manage the investments (investor’s money) for their benefit in return for a management fee. The organization that manages the investment is called the Asset Management Company (AMC). Hence. a Mutual Fund is the most suitable investment for the common person as it offers an opportunity to invest in a diversified. too many people. More than 80 million people or one half of the household in America invest in mutual funds.
Mutual fund is a mechanism for pooling the resources by issuing unit to the investors and investing funds in securities in accordance with the objective as disclosed in offer document. A mutual fund is nothing more than a collective stock and /or bonds. Investment in securities is spread across a wide section of industry and sector and the risk is reduced. SEBI (Mutual Fund) Regulations. Mutual funds in India are constituted in the form of a Public Trust created under The Indian Trusts Act. In India. Mutual fund issues units to the investors in accordance with quantum of money invested by them. 1996 regulates the structure of mutual funds. which regulates securities markets before it can collect fund from the public. bonds and other securities Each investors owns shares which represent a portion of holding of the fund. Diversification reduces the risk because all stock may or may not move in the same direction in the same proportion to their proportion at the same time. The mutual fund usually comes out with a number of schemes with different investment objectives which are launched from time to time. Investor of mutual are called unit holders. 1882. A mutual fund is required to be registered with the SEBI. You can think of a mutual fund as a company that brings together a group of people and invests their money in stock. .The profit or losses are shared by the investors in proportion to their investment.
ADVANTAGES OF MUTUAL FUND . he becomes part owner of the assets of the fund in the same proportion as his contribution amount put up with the also known as a mutual (the total amount of the fund). Mutual fund issues units to the investors in accordance with quantum of money invested by them. The funds Net Asset value (NAV) is determined each day. The income earned through these investments and the capital appreciations realized are shared by its unit holders in proportion the number of units owned by them. The money thus collected is then invested in capital market instruments such as shares. This pool of money is invested in accordance with a stated objective. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified. Any change in the value of the investments made into capital market instruments (such as shares.e. debentures and other securities. Each shareholder participates in the gain or loss of the fund. Diversification reduces the risk because all stocks may not move in the same direction in the same proportion at the same time. NAV of a scheme is calculated by dividing the market value of scheme's assets by the total number of units issued to the investors. Investors of mutual funds are known as unit holders. Units are issued and can be redeemed as needed. the fund belongs to all investors. A Mutual Fund is an investment tool that allows small investors access to a well-diversified portfolio of equities. When an investor subscribes for the units of a mutual fund. professionally managed basket of securities at a relatively low cost. debentures etc) is reflected in the Net Asset Value (NAV) of the scheme. NAV is defined as the market value of the Mutual Fund scheme's assets net of its liabilities.Mutual fund is a trust that pools the savings of a number of investors who share a common financial goal. i. The joint ownership of the fund is thus “Mutual”. Investments in securities are spread across a wide cross-section of industries and sectors and thus the risk is reduced. bonds and other securities. Mutual Fund investor is fund shareholder or a unit holder.
.• • • • • • • • • Portfolio Diversification Professional management Reduction / Diversification of Risk Liquidity Flexibility & Convenience Reduction in Transaction cost Safety of regulated environment Choice of schemes Transparency.
The private sector entry to the fund family raised the Aum to Rs. The Mutual Fund Industry is obviously growing at a tremendous space with the mutual fund industry can be broadly put into four phases according to the development of the sector. Before. 1540 billion. Though the growth was slow.700 crores of assets under management. 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. In the past decade. it reached the height if Rs.HISTORY OF THE INDIAN MUTUAL FUND INDUSTRY The mutual fund industry in India started in 1963 with the formation of Unit Trust of India. First Phase – 1964-87 Unit Trust of India (UTI) was established on 1963 by an Act of Parliament by the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank of India. the monopoly of the market had seen an ending phase. 470 billion in March 1993 and till April 2004. both qualities wise as well as quantity wise. Each phase is briefly described as under. The first scheme launched by UTI was Unit Scheme 1964. the Assets Under Management (AUM) was Rs67 billion. At the end of 1988 UTI had Rs. . but it accelerated from the year 1987 when non-UTI players entered the Industry.6. at the initiative of the Government of India and Reserve Bank. Indian mutual fund industry had seen a dramatic improvement.
Bank of India (Jun 90). Bank of Baroda Mutual Fund (Oct 92). there were 33 mutual funds with total assets of Rs. except UTI were to be registered and governed. under which all mutual funds. the mutual fund industry had assets under management of Rs. . Third Phase – 1993-2003 (Entry of Private Sector Funds) 1993 was the year in which the first Mutual Fund Regulations came into being.At the end of 1993.47. public sector mutual funds set up by public sector banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC). SBI Mutual Fund was the first non. 1.805 crores.004 crores. As at the end of January 2003. LIC established its mutual fund in June 1989 while GIC had set up its mutual fund in December 1990. The industry now functions under the SEBI (Mutual Fund) Regulations 1996. The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised Mutual Fund Regulations in 1996. Punjab National Bank Mutual Fund (Aug 89).Second Phase – 1987-1993 (Entry of Public Sector Funds) 1987 marked the entry of non. Indian Bank Mutual Fund (Nov 89).UTI. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993.UTI Mutual Fund established in June 1987 followed by Canbank Mutual Fund (Dec 87).21.
The UTI has many fund /schemes in all categories i. following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated into two separate entities.29. representing broadly. is the biggest scheme with a corpus of about Rs 200bn URI was floated by financial institution and is governed by a special act of the parliament.Fourth Phase – since February 2003 In February 2003. which manage assets of Rs. is true for all practical purposes. It is registered with SEBI and functions under the Mutual Fund Regulations. One is the Specified Undertaking of the Unit Trust of India with assets under management of Rs. The United Scheme 1964 commonly referred to as US64. GIC AMC floated by General Insurance Corporation and Jeevan Bima Sahayog AMC floated by the LIC are some of the prominent . balanced. Most of its investors believe that the UTI is government owned and controlled.835 crores as at the end of January 2003. consolidation and growth. the assets of US 64 scheme. sponsored by SBI. which. equity. BOB and LIC. PNB. while legally incorrect. The second largest categories of mutual funds are the ones floated by nationalized banks. Can bank Asset management floated by Canara Bank and SBI Funds Management floated by the State Bank of India are the largest of these.153118 crores under 421 schemes.e. assured return and certain other schemes The second is the UTI Mutual Fund Ltd. As at the end of September. 2004. there were 29 funds. Structure of the Indian mutual fund industry: The Indian mutual fund industry is dominated by the Unit Trust of India and which has a total corpus of Rs 700bn collected from more than 20 million investors . income etc with some being open ended and some being closed ended. which is a balanced fund.
. The aggregate corpus of funds managed by this category of AMC’s is about Rs 150 billion The third largest categories of the mutual funds are the once floated by the private sector and by the foreign asset management companies. The service level was also bad. Some schemes had offered guaranteed returns and their patent organization had to bail out these AMCs by paying large amount of money the difference between the guaranteed and actual returns. Few hired specialized staff and generally choose to transfer staff from the parent organization.ones. They quickly realized that the AMCs business is a business. which makes money in the long term and requires deep pocketed support in the intermediate years. Most of these AMCs have not been able to retain staffs. and it is doubtful whether barring a few expectations. Many nationalized banks got into the mutual fund business in the early nineties and go off to a good start due to the stock market boom prevailing then. Recent trends in the mutual fund industry: The most important in the mutual fund industry is the aggressive expansion of the foreign owned mutual fund companies and the decline of the companies floated by the nationalized bank and smaller private sector players. float. Some have sold out to foreign owned companies. These banks did not really understand the mutual fund business and they just viewed it as another kind of banking activity. they have serious plans of continuing the activity in a major way. The experience of some of the AMCs floated by private sector Indian companies was also very similar. The largest of these are Prudential ICICI AMC and Birla SUN LIFE AMC. and new schemes etc. The aggregate corpus of the asset managed by this category of AMC s is in excess of Rs 250bn. some have merged with the others and there is general restructuring going on.
many market players have called on the Regulator to initiate the process immediately. . Importantly. Some big names like Fidelity. Future scenario: The asset base will continue to grow at an annual rate of about 30 to 35% over the next few years as investor’s shift their asset from banks and other traditional avenues. they have forced the industry to upgrade itself and service levels of the organization like UTI have improved dramatically in the last few years in response to the competition provided by these. Principal and Old Mutual etc. usage of technology. But this does not mean there is no room for other players. The mutual fund industry is awaiting the derivation in India as this would enable it to hedge its risk and this in turn would be reflected in its Net Asset Value (NAV). In fact. There will be a large number of offers from various asset management companies in times to come. In the private sector this trend has already started with two mergers and one takeover. sharp improvement in the service standards and disclosure.Out of ten public sectors players five will sell out. They can be credited with introducing many new practices such as new product innovation.The foreign owned companies have deep pockets and have come in here with the expectation of a long haul. so that the mutual funds can implement the changes that are required to trade in derivates. Here too some of them will down their shutter in the near future to come. Some of the older public and private sector players will either close or be taken over. broker education etc. SEBI is working out the norms for enabling the existing mutual fund scheme to trade in derivatives. close down or merge with strong players in three to four years. The market will witness a flurry of new players entering the area. are looking at Indian market seriously.
The objectives of SEBI are – to protect the interest of investors in securities. Therefore. from time to time SEBI has also issued guidelines to the mutual fund from time to time to protect the interest of the investors. Thereafter mutual fund sponsored by private sector entities were allowed to enter the capital market. . SEBI notified regulation for mutual funds in 1993. The risks associated with the scheme launched by mutual funds sponsored by these entities are of similar type. As far as mutual are concerned.Role of SEBI in mutual fund: In the year 1992 SEBI act was passed. to promote the development of. There is no distinction in regulatory requirement of the mutual fund and all are subject to monitoring and inspecting by SEBI. The regulations were fully revised in 1996 and been amended. 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 regulation. and to regulate the securities market. SEBI formulates policies and regulation the mutual fund to protect the interest of the investors.
CATEGORIES OF MUTUAL FUND: .
It can be further classified as: . investment in equity funds should be considered for a period of at least 3-5 years. With fluctuating share prices. Redemption of units can be made during specified intervals.g. Based on their investment objective: Equity funds: These funds invest in equities and equity related instruments. However. Morgan Stanley Growth Fund). At the same time. Therefore. short term fluctuations in the market. even losses. If the fund is listed on a stocks exchange the units can be traded like stocks (E. fresh investments can not be made into the fund..Mutual funds can be classified as follow : Based on their structure: Open-ended funds: Investors can buy and sell the units from the fund. Recently. at any point of • time. such funds can yield great capital appreciation as. such funds have relatively low liquidity. thereby offering higher returns at relatively lower volatility. historically. most of the New Fund Offers of close-ended funds provided liquidity window on a periodic basis such as monthly or weekly. after the offer period. Therefore. Hence. • Close-ended funds: These funds raise money from investors only once. such funds show volatile performance. equities have outperformed all asset classes in the long term. generally smoothens out in the long term.
Balanced fund: Their investment portfolio includes both debt and equity.In this case a key stock market index. iii|) Dividend yield funds. e. they fall between equity and debt funds. remaining in debt. e. . -An infrastructure fund invests in power. Following are balanced funds classes: i) Debt-oriented funds -Investment below 65% in equities. As a result.Invest 110% of the capital in a specific sector.g. ii) Equity-oriented funds -Invest at least 65% in equities. construction.Invest 110% of the assets in sectors which are related through some theme. v) Sector funds.g.110% of the capital is invested in equities spreading across different sectors and stocks. Their portfolio mirrors the benchmark index both in terms of composition and individual stock weightages.A banking sector fund will invest in banking stocks. ii) Equity diversified funds. . on the risk-return ladder. Balanced funds are the ideal mutual funds vehicle for investors who prefer spreading their risk across various instruments.it is similar to the equity diversified funds except that they invest in companies offering high dividend yields.Equity Linked Saving Scheme provides tax benefit to the investors. like BSE Sensex or Nifty is tracked. vi) ELSS. cements sectors etc.i) Index funds. iv) Thematic funds.
and are a good option for investors averse to idea of taking risk associated with equities. Floaters invest in debt instruments which have variable coupon rate. Government of India securities. vii) MIPs. vi) Income funds LT. such funds invest a major portion of the portfolio in long-term debt papers.They generate income through arbitrage opportunities due to mis-pricing between cash market and derivatives market. they invest exclusively in fixed-income instruments like bonds. a large portion being invested in call money market. . Therefore. viii) FMPs. v) Gilt funds LT. commercial paper (CP) and call money.They invest 110% of their portfolio in long-term government securities.Typically. iv) Arbitrage fund. iii) Floating rate funds . derivatives and money markets. ii) Gilt funds ST.Invest in short-term debt papers.They invest 110% of their portfolio in government securities of and T-bills. Put your money into any of these debt funds depending on your investment horizon and needs. Funds are allocated to equities. in the absence of arbitrage opportunities. i) Liquid funds.These funds invest 110% in money market instruments. debentures. and money market instruments such as certificates of deposit (CD).fixed monthly plans invest in debt papers whose maturity is in line with that of the fund.Monthly Income Plans have an exposure of 70%-90% to debt and an exposure of 11%-30% to equities. Higher proportion (around 75%) is put in money markets.Debt fund: They invest only in debt instruments.
3. The investor gets fewer units when the NAV is high and more units when the NAV is low. This is called as the benefit of Rupee Cost Averaging (RCA) 2. Systematic Transfer Plan: under this an investor invest in debt oriented fund and give instructions to transfer a fixed sum. . Systematic Withdrawal Plan: if someone wishes to withdraw from a mutual fund then he can withdraw a fixed amount each month. to an equity scheme of the same mutual fund. Payment is made through post dated cheques or direct debit facilities.INVESTMENT STRATEGIES: 1. at a fixed interval. Systematic Investment Plan: under this a fixed sum is invested each month on a fixed date of a month.
RETURN: .RISK V/S.
Jeevan Bima Sahayog Asset Management Co. Ltd. 7. Cholamandalam Asset Management Co. SBI Funds Management Private Ltd. BOB Asset Management Co. Credit Capital Asset Management Co. Private Ltd. Private Sector 1. 4. Bank Sponsored 1. 3. Ltd. 6. Financial Asset Management Private Ltd. Ltd. Sahara Asset Management Co. J. Indian 1. Others 1. 5. M. Institutions 1. . Private Ltd 9. 2. 3. Ltd. Joint Ventures . Joint Ventures . Private Ltd. Ltd. Canbank Investment Management Services Ltd. 10. 3. Sundaram Asset Management Co. Tata Asset Management Ltd. Ltd. Birla Sun Life Asset Management Co. 8. 2. Escorts Asset Management Ltd. UTI Asset Management Co.MAJOR PLAYERS 1. 2. Reliance Capital Asset Management Ltd.Predominantly Indian 1. 2. Benchmark Asset Management Co.Predominantly Indian 1. 2. Ltd. Kotak Mahindra Asset Management Co.
ABN AMRO Asset Management (India) Ltd. 4. 3. Indian Trust/Charitable Institutions.2. Mutual funds in India are open to investment by 1) Residents including: a) b) c) Resident Indian Individuals. 9. Joint Ventures . 3. 3. Prudential ICICI Asset Management Co. Fidelity Fund Management Private Ltd. 8. 4. HDFC Asset Management Co. DSP Merrill Lynch Fund Managers Ltd. Franklin Templeton Asset Management (India) Private Ltd.Predominantly Foreign 1. Standard Chartered Asset Management Co. Principal Pnb Asset Management Co. . HSBC Asset Management (India) Private Ltd. Private Ltd Who can invest? Who can invest in Mutual Funds in India: First of all. distributors need to be aware of who mutual fund units. Deutsche Asset Management (India) Private Ltd. Indian Companies/Partnership Firms. 5. 2. Private Ltd. Ltd. 7. ING Investment Management (India) Private Ltd. Morgan Stanley Investment Management Private Ltd. 6. Ltd.
d) e) f) g) h) Banks/Financial Institutions. Non-Banking Finance Companies. viz. Insurance Companies. 2) Non-Residents including: Non-Resident Indians. • • Foreign Institutional Investors(FII) registered with SEBI. Mutual funds. . Foreign citizens/ entities are not allowed to invest in mutual funds in India. Overseas Corporate Bodies (OCBs) and • • 3) Foreign entities. Provident funds. and Persons of Indian Origin.
2. .OBJECTIVES OF THE STUDY 1. 4. To find out what should do to boost Mutual Fund Industry. To know why one has invested or not invested in Mutual fund To find out the most preferred channel. To know the Preferences for the portfolios. 3. To find out the Preferences of the investors for Asset Management Company. 5.
mode of investment. This project report may help the company to make further planning and strategy.SCOPE OF THE STUDY A big boom has been witnessed in Mutual Fund Industry in recent times. . The research was carried on in Aurangabad. I surveyed on my Project Topic “A study of Mutual Fund Industry ” on the visiting to individual & government offices employee. option for getting return and so on they prefer. portfolio. I had been sent at one of the branch of KARVY where I completed my Project work. The study will help to know the interest & preferences of the customers. which company. A large number of new players have entered the market and trying to gain market share in this rapidly improving market.
The secondary data has been collected through various journals and websites.RESEARCH METHODOLOGY This report is based on primary as well secondary data. irrespective of them being investors or not or availing the services or not. Research has been done by primary data collection. analyzing the required information data and providing an alternative solution to the problem . One of the most important users of research methodology is that it helps in identifying the problem. however primary data collection was given more importance since it is overhearing factor in attitude studies. collecting. Sampling: Sampling procedure: The sample was selected of them who are the Businessman/govt. and primary data has been collected by interacting with various people. Duration of Study: The study was carried out for a period of two months. It was also collected through personal visits to persons. . Data sources: Research is totally based on primary data. Secondary data can be used only for the reference.It also helps in collecting the vital information that is required by the top management to assist them for the better decision making both day to day decision and critical ones. employee. The data has been analyzed by using mathematical/Statistical tool. by formal and informal talks and through filling up the questionnaire prepared. from 7th June to 30th July 2012.
Out of which only 11 people had invested in Mutual Fund. * Rising inflation could reduce savings and investments . Other 90 people did not have invested in Mutual Fund. Sample design: Data has been presented with the help of bar graph. Sample size: The sample size of my project is limited to 110 people only. line graphs etc.
The sample size may not adequately represent the whole market.LIMITATION: Some of the persons were not so responsive. Possibility of error in data collection because many of investors may have not given actual answers of my questionnaire. Dept. & part of KARVY . The research is confined to a certain Govt. Some respondents were reluctant to divulge personal information which can affect the validity of all responses.
CHAPTER-3 INDUSTRY &COMPANY PROFILE .
000 cores handled by the BSE and NSE together there is a much greater scope for online trading.com etc. This will help us understand what processes and strategies competitors’ have adopted to attract and retain investors and satisfy their investments needs. motilaloswal.INDUSTRY PROFILE INDUSTRY PROFILE The Indian trader is being fancied by the democratized world of online trading or also known as ebroking. graphs. In the non-stop. and tables Screen for the best investments to fit our individual goals and requirements Trade stocks as easily and quickly as professional traders Calculate retirement needs based on various scenarios Regularly monitor portfolios and make necessary changes quickly and almost effortlessly Control the routing of individual trades for the best possible price and execution .com. we are able to Obtain investment news around the clock Check quotes on exchanges all over the world – day or night Easily compare one investment to another via numerous ratios. sharekhan. With only a mere share of 11% online trading a combined gross turnover of around Rs. 24 hours a day.RBI made regulation that it is mandatory for company to store at least 7 year financial and transactional data. but has done a very important amount of progress in the past years and the future of online trading is bright. Connectivity related issue was perhaps the most important technological factor. Resolved between the Department of Telecommunications (Dot) and the Finance Ministry around 1998 and after that soon came the online trading portals like IL&FS invest smart. charts. in India online trading has not still grasped the market .com. The various players who’s offering and facilities is different according to the individual investors. seven days a week world of investing. ICICIDirect. 12000-13. The regular and attractive advertisements in the print media and electronic media have added to this fancy world But as we compare to the Western countries. That is why many new companies are coming into this form of business structure and the existing companies are changing to this new format besides offline and other traditional forms of business.
support large amounts of data traffic. and have a very large nationwide network. The trading volume in year 2000 was huge with the average daily turnover in the capital markets .Even many years after the launch of the first online brokerage firm. However. INDIAN EXCHANGES: NSE and BSE The NSE and BSE are among the largest exchanges in the country handling very large daily trading volumes. there remain a large contingent of individual investors who still pick up the phone and call their stock broker to buy and sell investments. every year a growing number of investors are placing their trades using online brokers.
THE NETWORK DESIGN Any online exchange should always be-on. safe.17 lakh.M Shenoy tells that the basic design objective of NSE was to provide fair. equal and transparent access across all NSE nationwide locations and to provide connectivity to the trading members as soon as possible.000 trades per day in the derivatives segment and there were around 13. redundant and should have adequate backup & recovery processes. At BSE the average daily turnover in 2001-2002 (April-March) was Rs 1244. first level and second level password. RECOMMENDATIONS OF SEBI The SEBI has also played an important role in the issue of the guidelines regarding online trading so that the chances of fraud and misrepresentation are minimized.Segment at NSE is around Rs 2300 crore and in the derivatives segment. .The user id. secure. The average daily traffic volume was around one million trades per day in the capital markets segment and around 50. The brokers must maintain adequate back-up systems and data storage capacity which must be checked by the stock exchanges.000 registered users in both segments and an average of around 9500 users is logged in at a time.11 crore and the number of average daily trades was Rs 5. automatic expiry of passwords at the end of a reasonable period. The Vice President of NSE-IT G.justifiability and reliability of data .The stock brokers which are being registered with Securities Exchange Board of India (SEBI) will have to apply to stock exchanges for a formal permission. around Rs 1300 crore. The following conditions must be fulfilled The online trading company must have a minimum net worth of Rs 50 lakh The encryption technology should be there in the system used by the brokers to ensure the provision for confidentiality .security .
Ticker/quote/order book displayed on the web site of the broker should display the time stamp as well as the source of such information. To determine the risk associated with the clients the brokers must have the have sufficient verifiable information about clients and the stock exchange must ensure it. The web site of the broker providing the online trading facility should contain information rules and regulations affecting client broker relationship. etc meant for investor protection. The limits must be predefined by the broker on the exposure and turnover of each client. An e-mail should be sent to he investor for the confirmation of his Order or trade. payment and delivery obligations etc. The better client and the broker relationship to be maintained. A separate working group has been set up to look into the surveillance and enforcement-related issues arising due to Internet-based securities trading. To ensure the authenticity and accuracy of data a certification agency must be appointed using the certification technologies when notified by the government or the SEBI. general anti-fraud provisions (SEBI . they will have to show the zero balance of every customer’s account at the end of every 3 month The minimum qualification must be laid down by the stock exchange to ensure that the persons hired by the brokers must have the proper qualification regarding trading so as to guide the clients and he can communicate regarding trading instructions. It should also provide and display prominently hyper link to the web site/page on the web site of the relevant stock exchange(s) displaying rules/ regulations/circulars. Cross trades of the clients will not be allowed with each other to the brokers using Internet-based systems for routing client order and all orders must be offered to the market for matching. The limits of trading and exposure provided to the client must be set on system-based control and brokers and exchanges must ensure it. The system should inform the clients client the reports on margin requirements. arbitration rules. The system of broker should be such that it is capable of assessing the risk of the client as soon as the order comes in. However. The clients must be taken into an agreement stating about all the obligations and rights including the minimum service standards to be maintained by the service provider broker for services specified by SEBI/exchanges for Internet-based trading from time to time. As per the regulations the Contract Notes must be issued to clients within 24 hours of the trade execution. investor protection rules.SEBI has recently announced that to reduce the fraud cases each and every broking house has to give back the full amount of customer after each three month.
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2) Bombay Stock Exchange (BSE). planning with foresight and choosing one's options with care. There are several advantages in utilizing our Stock Broking services. It creates a plethora of opportunities for the customer by opening up investment vistas backed by research-based advisory services. Instead we provide services which are multi dimensional and multi-focused in their scope. KARVY Stock Broking Limited is a member of: 1) National Stock Exchange (NSE) . Here.COMPANY PROFILE KARVY Stock Broking Limited. one of the cornerstones of the Karvy edifice. growth knows no limits and success recognizes no boundaries. growth knows no limits and success recognizes no boundaries. one of the cornerstones of the KARVY edifice. This is what we provide in our Stock Broking services. flows freely towards attaining diverse goals of the customer through varied services. Creating a plethora of opportunities for the customer by opening up investment vistas backed by research-based advisory services. Helping the customer create waves in his portfolio and empowering the investor completely is the ultimate goal. The difference between unpredictability and a safety anchor in the market is provided by in-depth knowledge of market functioning and changing trends. Here. which are the reasons why it is one of the best in the country. Stock Broking Services It is an undisputed fact that the stock market is unpredictable and yet enjoys a high success rate as a wealth management and wealth accumulation option. Helping the customer create waves in his portfolio and empowering the investor completely is the ultimate goal. flows freely towards attaining diverse goals of the customer through varied services. . 3) MCX Stock Exchange(MCX-SX) Karvy Stock Broking Limited. We offer services that are beyond just a medium for buying and selling stocks and shares.
with the number of our trading terminals providing retail stock broking facilities. . constant feedback and sound advisory facilities. we make trading safe to the maximum possible extent. market analysis and market predictions. and products available in the market.We offer trading on a vast platform National Stock Exchange and Bombay Stock Exchange. Our services have increasingly offered customer oriented convenience. comprising of technical analysts as well as fundamental specialists. which we provide to a spectrum of investors. which analyzes the latest stock market trends and takes a close look at the various investment options. through daily reports delivered thrice daily . where market scenario for the day is predicted. the final report for the day. where the market forecast for the rest of the day is given and The Post-session Report. To add to this repository of information. we also offer special portfolio analysis packages that provide daily technical advice on scrips for successful portfolio management and provide customized advisory services to help you make the right financial moves that are specifically suited to your portfolio. our specific industry reports give comprehensive information on various industries. by accounting for several risk factors and planning accordingly. Our highly skilled research team. secure result-oriented information on market trends. In addition. Our Stock Broking services are widely networked across India. The Pre-session Report. called "Karvy Bazaar Baatein". with equal dedication and competence. while a weekly report. timed to arrive during lunch break . This crucial information is given as a constant feedback to our customers. More importantly. We are assisted in this task by our in-depth research. keeps you more informed on the immediate trends in the stock market. we publish a monthly magazine "Karvy The Finapolis". The Mid-session Report. high-networth or otherwise. Besides this. where the market and the report itself is reviewed.
but just a platform to launch further enhanced quality services to provide you the latest in convenient. The onset of the technology revolution in financial services Industry saw the emergence of Karvy as an electronic custodian registered with National Securities Depository Ltd (NSDL) and Central Securities Depository Ltd (CSDL) in 1998. In the future. Consequentially our retail client base expanded very fast. we are a powerful medium for trading and settlement of dematerialized shares. we have enhanced our manpower and revitalized our knowledge base with enhances focus on Futures and Options as well as the commodities business. SMS. chat. customer-friendly stock management. We have established live DPMs. this success is not our final destination. Karvy set standards enabling further comfort to the investor by promoting paperless trading across the country and emerged as the top 3 Depository Participants in the country in terms of customer serviced. Our foray into commodities broking has been path breaking and we are in the process of converting existing traders in commodities into the more organized mainstream of trading in commodity futures. Internet access to accounts and an easier transaction process in order to offer more . Offering a wide trading platform with a dual membership at both NSDL and CDSL. both as a trading and risk hedging mechanism. our focus will be on the emerging businesses and to meet this objective. Over the years we have ensured that the trust of our customers is our biggest returns. Factors such as our success in the Electronic custody business has helped build on our tradition of trust even more.But true to our spirit. To empower the investor further we have made serious efforts to ensure that our research calls are disseminated systematically to all our stock broking clients through various delivery channels like email. phone calls etc.
Karvy . make our response time quick and our delivery impeccable. investment options. Our monthly magazine. With our wide portfolio offerings. The investment planning for each customer is done with an unbiased attitude so that the service is truly customized. A 1600 team of highly qualified and dedicated professionals drawn from the best of academic and professional backgrounds are committed to maintaining high levels of client service delivery. To further tap the immense growth potential in the capital markets we enhanced the scope of our retail brand. both find this service very satisfactory. The paradigm shift from pure selling to knowledge based selling drives the business today. .the Finapolis . Judicious planning that is customized to meet the future needs of the customer deliver a service that is exemplary. A team of professional and the latest technological expertise allocated exclusively to our demat division including technological enhancements like SPEED-e. Here we understand the customer needs and lifestyle in the context of present earnings and provide adequate advisory services that will necessarily help in creating wealth. besides being established as the leading procurer in all public issues. Finapolis.convenience to individual and corporate investors. The edge that we have over competition is our portfolio of offerings and our professional expertise. opinions etc. Thus empowering the investor to base every financial move on rational thought and prudent analysis and embark on the path to wealth creation. provides up-dated market information on market trends. This has propelled us to a position among the top distributors for equity and debt issues with an estimated market share of 15% in terms of applications mobilized. thereby providing planning and advisory services to the mass affluent. we occupy all segments in the retail financial services industry. A wide national network makes our efficiencies accessible to all. The market-savvy and the ignorant investors.
trends. Another venture towards being investor-friendly is the circulation of a monthly magazine called "Karvy . This is made possible by the expertise we have gained in the business over the years. The service is backed by a team of dedicated and expert professionals with varied experience and background in handling investment portfolios.thefinapolis.com This specialized division was set up to cater to the high net worth individuals and institutional clients keeping in mind that they require a different kind of financial planning and management that will augment not just existing finances but their life-style as well. They are continually engaged in designing the right investment portfolio for each customer according to individual needs and budget considerations with a comprehensive support system that focuses on trading customers' portfolios and providing valuable inputs. we deliver advisory services to a cross-section of customers. Covering the latest of market news. We aim at helping you create the optimum website which will offer your rival and competition websites the competition they need. . planning of business needs and retirement needs and a host of other services.Under our retail brand "Karvy – the Finapolis". monitoring and managing the portfolio through varied technological initiatives. www. For this purpose we offer a comprehensive and personalized service that encompasses planning and protection of finances. investment schemes and research-based opinions from experts in various financial fields. all provided on a one-to-one basis. Here we follow a hardnosed business approach with the soft touch of dedicated customer care and personalized attention.the Finapolis". VISION&MISION We are a company that has a mission to provide you with the best of web design and development services.
To ensure that you get the website that you want. Our vision lies in satisfying all your web development needs so that your company gets the identity it deserves in the corporate and internet world. the tools we use and the software that is used in creating your website. but we can also give you a web design proposal that will surely fit the fixed budget that you specify. sound. it is not surprising that we seldom get unhappy and unsatisfied customers. brochure and logo designing and flash presentation services. We don?t just forget you after creating your website. With so much of experience in our hands. animation. web. We know the importance of a fully functional website. we work with you. 24 hours a day. we can help you with software development. All this is made possible with our mission and vision to provide you with the best web designing services possible on the internet . We take pride in having provided our services to so many webmasters during the span of our company. from anywhere in the world with our efficient after sales services. custom graphics. blending all your thoughts and wants in your website design. Not only do we have a competent staff to provide you with graphic. Emphasis is always placed on creating a website that is not only great in visual appeal. To help you create a website that you are comfortable with. simple text images and other forms in your website. This is why we ensure that we provide 24 hours service to websites created for anyone. e-commerce. is also user friendly. structure and corporate identity.Our vision is made possible through the technical knowledge we know and use. you can not only choose from the various packages we have to offer you. 7 days a week. It is based on your concept that our staff uses their skills and ideas in implementing flash.
S.Com.. Ramakrishna 18 Relationships KARVY Stock Broking Limited Meka Yugandhar B. Fca 14 Relationships Karvy Consultants Limited Sudhir Variyar 4 Relationships Multiples Alternate Asset Management Private Limited Jimmy Mahtani 23 Relationships Sharekhan Limited Board Relationships 57 58 61 -- .Name C. Parthasarathy 29 Relationships Karvy Consultants Limited M.
CHAPTER-4 Data Analysis & Interpretation .
12.4199% − 3.60 S t = 0.12.1947 .15 12.28 11.12.4938 6.55% 9.5559 -6.5647 11.2370 -3.19 .1804 18.104.22.16840 0. Birla Sun Life Tax Plan (Growth) Month Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-11 Feb-11 Mar-11 Net Assets Value 7.85 AVERAGE RETURN Monthly Return 21.1.42 .12 12.65 .65 8.24 .66 .12 .3167 7.4199 % Calculation of Sharpe Index: Sharpe Index = Portfolio average return .44 .87 12.44 11.66 11.19 12.15 .12.3184 23.11.28 .12.0000 6.13 .11.11.44 11.24 12.87 .5944 -0.2862 5.42 11.1471 -5.12.Risk free rate of return Standard Deviation S t= St = Rp − R f σp 5.44 .11.
Interpretation of the Funds Performance Particular Birla Sun Life Equity Fund-Growth Birla Sun Life Income Fund -Growth Birla Sun Life Tax Plan (Growth) Average Return 6.00% 2.259 0.235 -3.00% 6.1947 Rank I III II Averag eReturn 8.00% 1.00% 3.8383 % 0.00% 0.00% 4.4199 % Sharpe Index Ratio 0.00% BirlaSun Life Equity Fund-Growth BirlaSun Life Income Fund -Growth BirlaSun Life Tax Plan (Growth) .00% 7.00% 5.4806 % 5.
one of India's leading financial institutions that offer financial solutions ranging from commercial banking. 34. Kotak Mahindra mutual fund was the first fund house in the country to launch a dedicated gilt scheme investing only in government securities. a wholly owned subsidiary of Kotak Mahindra Bank. as on May 31. Kotak Mahindra Asset Management Company Limited. Alroy Lobo (Chief Strategist & Global Head Equities Asset Mgmt). Chandrasekaran (IRO) For Performance Comparison we take three Mutual Fund Schemes of Company: . R. Sandeep Kamath (Compliance). Sandesh Kirkire (CEO).Kotak Mahindra Mutual Fund The fund is promoted by Kotak Mahindra Bank. of schemes No. chief executive officer.2375 Crs. 2011 Key Personnel: Uday S Kotak (Chairman). The company is headed by Uday Kotak of Kotak Bank as chairman and the fund management function is headed by Sandesh Kirkire. V R Narasimhan (CCO). Krishnan (COO. of schemes including options Equity Schemes Debt Schemes Short term debt Schemes Equity & Debt Money Market Gilt Fund 50 119 22 74 8 1 0 7 Corpus Under Management: Rs.36776. is the asset manager for Kotak Mahindra mutual fund. R. Kotak Mahindra mutual fund launched its schemes in December 1998 and today manages assets of 4. No. life insurance and investment banking.504 investors in various schemes. stock broking.
77 .32.27.134 .0000 22.214.171.12438 33.362 .8960 AVERAGE RETURN 5.5319 6.30. Kotak Equity-FOF-Growth Month Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-11 Feb-11 Mar-11 Net Assets Value 18.2190 .3017 -3.755 .5249 3.Risk free rate of return Standard Deviation S t= St = Rp − R f σp 126.96.36.19960 33.134 30.77 20.76 27.134 .7743 Calculation of Sharpe Index: Sharpe Index = Portfolio average return .354 .6543 -0.8790 9.354 34.55% 10.134 30.7127% Monthly Return 11.34.9911 .3444 5.362 188.8.131.520 33.516 27.76 .9911 32.2144 .5145 0.2560 .709% − 3.06 S t = 0.2190 31.34.1150 . Kotak Equity-FOF-Growth Kotak Income Plus-(Growth) Kotak Tax Saver-Scheme-Growth 1.3936 -3.33.6357 -0.516 .
55% 1.1237 14.13.6471 14.0794 4.736 .13.9080 -0.14.6684 0.14.5153 14.14.736 .2136% − 3.6629 13.2771 .5597 .1455 0.8357 .5597 14.8342 -0.13.7521 1.2136% Calculation of Sharpe Index: Sharpe Index = Portfolio average return .5702 184.108.40.206.14.5250 -0.2771 14.4634 .0000 0.14.1651 .1237 .8148 AVERAGE RETURN Monthly Return 2.1651 14.5702 .6471 14.5153 .5066 0.59 S t = −1.0721 1.Risk free rate of return Standard Deviation S t= St = Rp − R f σp 1.1237 14.1237 . Kotak Income Plus-Growth Month Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-11 Feb-11 Mar-11 Net Assets Value 12.7907 1.14.736 13.1126 13.1126 .5249 3.
9270 .98 .06 .15.894 .4802 11.Risk free rate of return Standard Deviation S t= St = Rp − R f σp 5.7608 0. Kotak Tax Saver Scheme-Growth Month Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-11 Feb-11 Mar-11 Net Assets Value 9.894 14.85 15.1637 Interpretation of the Funds Performance Particular Average Sharp Index Rank .789 .14.1180 AVERAGE RETURN (in %age) Monthly Return 9.2031 5.14.122 .3.8111 .9270 220.127.116.11.447 13.2257 7.55% 11.2461 8.14.5903 3.9.447 .918 .918 15.98 9.8111 15.9475 -0.789 13.8753 -6.9111% Calculation of Sharpe Index: Sharpe Index = Portfolio average return .1663 -2.66 S t = 0.06 16.85 .894 18.104.22.16894 -4.0000 6.15.894 .675 .4058 38.675 16.911% − 3.17.
2144 .1637 I III II .2136 % 5.4634 0.1.7127 % 1.Kotak Equity-FOFGrowth Kotak Income Plus(Growth) Kotak Tax SaverScheme-Growth Return 5.9111 % Ratio 0.
Escorts Mutual Fund usually offers open ended schemes and the fund category is Equity. of schemes No. Jagveer Singh Fauzdar . farm machinery.195.Escorts Mutual Fund Escorts Mutual Fund is promoted by the business conglomerate Escorts group. Escorts Asset Management Limited acts as the AMC to the mutual fund. as on May 31. two wheelers. No. Sanjay Arora (CIO).75 Crs. Sanjeev Sharma. Fund Managers: Mr. The fund is a member of the Escort Group of Companies. 2011 Key Personnel: Rajan Nanda (Chairman & MD). of schemes including options Equity Schemes Debt Schemes Short term debt Schemes Equity & Debt Money Market Gilt Fund 13 30 13 7 4 4 0 2 Corpus Under Management: Rs. auto ancillary products and financial Services. Lalit K Khanna (CEO & Compliance). Mohini Sharma (IRO). Mr. . which deals with a number of high growth industries like construction and material handling equipment.balanced fund.
6330 .7441 65.7149 .0813 -3.6330 36.65.252 S t = 0.64.60.1133 6.0000 3.3232 22.214.171.12482 55.7857 -3.2423 0.7351 60.63.210 .3247 -2.3323 8.8682 .8155 .9001 .64.9001 56.4480 64.7149 60.0134 63.2204 55.897% − 3.55% 15.7351 .5782 .60.70.8682 64.0134 .3673 126.96.36.1998 6.7441 .4480 . Escorts Growth Plan (Growth) Month Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-11 Feb-11 Mar-11 Net Assets Value 34.3673 .6156 6.56.1250 AVERAGE RETURN Monthly Return 5.Risk free rate of return Standard Deviation S t= St = Rp − R f σp 6.7149 .7149 60.For Performance Comparison we take three Mutual Fund Schemes of Company Escorts Growth Plan (Growth) Escorts Income Plan (Growth) Escorts Tax Plan (Growth) 1.8970% Calculation of Sharpe Index: Sharpe Index = Portfolio average return .8369 -1.
9170 28.1160 .6167 % Calculation of Sharpe Index: Sharpe Index = Portfolio average return . Escorts Income Plan (Growth) Month Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-11 Feb-11 Mar-11 Net Assets Value 27.2081 28.1160 28.8838 -1.1535 .1160 .6167 − 3.9170 .0088 .1649 0.29.2294 1.28.1188 -0.28.289 .6815 0.Risk free rate of return Standard Deviation S t= St = Rp − R f σp 0.1730 .28.9679 .28.2023 0.2.0088 188.8.131.5220 .7860 0.28.1757 0.55% 1.28.9679 28.8613 27.29.4620 28.0567 .3370 28.4411 1.7775 -0.0000 0.1730 28.2065 AVERAGE RETURN Monthly Return 3.4831 -0.28.2081 .28 S t = −2.29.0567 29.1160 28.8613 .3370 .
7992 -2.1727 % Calculation of Sharpe Index: .0000 4.4635 5.8758 6.9839 .42.8570 .6067 .8944 .9711 184.108.40.20691 45.3687 44.0808 3.9259 -3.6629 38.38.1172 37.6245 41.8570 42.0285 35.1556 .9713 6.27.2905 27.1924 220.127.116.11.40.8891 .6067 42.6629 .8944 40.8944 .3606 AVERAGE RETURN Monthly Return 18.104.22.1682 .2905 .37.42.3132 -3.7717 0.6245 .1556 44. Escorts Income Plan (Growth) Month Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-11 Feb-11 Mar-11 Net Assets Value 25.8944 40.3687 .
6167 % Sharp Index Ratio 0.211 -2.1727 − 3.289 Rank I III .155 Interpretation of the Funds Performance Particular Escorts Growth Plan (Growth) Escorts Income Plan (Growth) Average Return 6.Sharpe Index = Portfolio average return .Risk free rate of return Standard Deviation S t= St = Rp − R f σp 5.449 S t = 0.55% 10.8970 % 0.
.119 crore under management as of Aug 2006.155 II ICICI Prudential Mutual Fund Prudential ICICI Mutual Fund is the largest private sector mutual fund in India with assets of over Rs.1727 % 0. Prudential Plc holds 55 per cent of the asset management company and the balance by ICICI Bank. Prudential ICICI Asset Management Company Limited. The asset management company.34.Escorts Tax Plan (Growth) 5. India's premier financial institution. Europe's leading insurance company and ICICI Bank. is a joint venture between Prudential Plc.
79.(Growth Option) ICICI Prudential Tax Plan-(Growth Option) 1.94 . Kamaljeet Saini (IRO) For Performance Comparison we take three Mutual Fund Schemes of Company ICICI Prudential Growth Plan-(Growth Option) ICICI Prudential Income Plan. Supriya Sapre (Compliance). of schemes including options Equity Schemes Debt Schemes Short term debt Schemes Equity & Debt Money Market Gilt Fund 98 317 59 213 23 4 0 7 Corpus Under Management: Rs. ICICI Prudential Growth Plan-(Growth Option) Month Apr-12 May-12 Net Assets Value 72.73 79. Chanda Kochhar (Chairman). of schemes No.No.99. 2012 Key Personnel: Ms. Nimesh Shah (CEO & CIO).72 Monthly Return 9.0721 .68324.3120 25. as on May 29.73 .057017781 Crs.
67 .3110 1. ICICI Prudential Income Plan.1351 -0.0718 29.41 .22.214.171.124.2732 .0718 .0000 8.116.5627 .1288 -4.3743 .2732 29.2486 6.4577 .3743 29.2732 29.29.2732 .4126 0.125.116.41 98.8727% Calculation of Sharpe Index: Sharpe Index = Portfolio average return .9287 -5.96 .7341 .Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-11 Feb-11 Mar-11 99.55% 8.117.01 .29.29.4018 29.8727% − 3.(Growth Option) Month Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Net Assets Value 27.39.67 .67 117.39 116.17 .36 118.8912 4.4676 3.67 117.3454 0.4849 6.36 .4374 0.118.4018 .189 S t = 0.2147 -1.Risk free rate of return Standard Deviation S t= St = Rp − R f σp 4.5396 Monthly Return 6.29.1541 0.0000 0.72 .01 123.67 116.1615 126.96.36.19937 9.111.02 AVERAGE RETURN -1.4577 29.17 111.96 116.117.67 .
9950 29.4060 -0.488 .6522 % AVERAGE RETURN Calculation of Sharpe Index: Sharpe Index = Portfolio average return .6198 0.8737 29.7611 29.7617 -0.5477 0.8737 29.0600 29.Nov-12 Dec-12 Jan-11 Feb-11 Mar-11 29.7801 0.9472 S t = −1.9950 29.9240 1.55% 1.6522% − 3.0600 29.5396 30.Risk free rate of return Standard Deviation S t= St = Rp − R f σp 0.7611 - 30.
84 63.110.88 .63 .8304 7.113.02 85.2363 33.0000 7.85.47 120.118.3804 .2940 -1.88 .110.(Growth Option) Month Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-11 Feb-11 Mar-11 Net Assets Value 56.120.63 110.Risk free rate of return Standard Deviation S t= St = Rp − R f σp 7.1239 17.85.7027 7.29 188.8.131.52 .69 .97 .97 117.3121 1.88 118.116.3379% − 3.55% 9.121.3375 5.5560 6.0797 0.9567 S t = 0.55 .95 85.55 113.63.69 121.63 .02 .63 110.29 .1767 1.34 AVERAGE RETURN Monthly Return 12.1686 -2.3. ICICI Prudential Tax Plan.95 .84 .3379 % Calculation of Sharpe Index: Sharpe Index = Portfolio average return .
1615 -1.e.8724 % 0. 40%.3804 Rank II III I Interpretation: According to this chart out of 11 Mutual Fund investors of Auranagabad the most are in the age group of 31-35 yrs.Interpretation of the Funds Performance Particular ICICI Prudential Growth Plan(Growth Option) ICICI Prudential Income Plan(Growth Option) ICICI Prudential Tax Plan(Growth Option) Average Return 4. Occupation of the investors of Aurangabad. the second most investors are in the age group of 36-40yrs i.e.3379 % Sharpe Index Ratio 0. . 30% and the least investors are in the age group of below 46-50 yrs. i. 2.6522 % 7.488 0.
0% are in Agriculture and 11% are in others. Employees. . Service Business 3 4 2 0 Agriculture 1 Others Occupation of the customers Interpretation: In Occupation group out of 11 investors. Service Pvt.Occupation Govt. Service Pvt. Employees. 30% are Govt. 5 No. of Investors 4 3 2 1 0 Govt. Service Business Agriculture Others No. 20% are Businessman. of Investors 3 4 2 0 1 . 40% are Pvt.
(3) Investors invested in different kind of investments of Aurangabad. Priority of Investments Saving A/C Fixed deposits Insurance Mutual Fund RD Real Estate No. of Respondents % 98 50 99 11 45 35 p riority of in vestm en t 3 5 R D 1 0 Insura nce 5 0 S a vingA/c 0 2 0 4 0 6 0 8 0 9 8 1 0 0 1 2 0 9 9 4 5 No.of Respondents% .
43% in RD and 21.6% in Real Estate. 51. Educational Qualification of investors of Aurangabad. 98 % people have invested in Saving A/c. Educational Qualification Graduate/ Post Graduate Under Graduate Others Total Number of Investors 5 2 3 120 . 91. 11% in Mutual Fund.6% in Insurance.Interpretation: From the above graph it can be inferred that out of 200 people.6% in Fixed Deposits. 4.
4. 20% are Under Graduate and 30% are others (under HSC).30% 50% 20% Graduate/Post Graduate Others Under Graduate Interpretation: Out of 120 Mutual Fund investors 50% of the investors in Aurangabad are Graduate/Post Graduate. Preference of factors while investing .
Factors (a) Liquidity (b) Low Risk (c) High Return (d) Trust No. of Respondents 11 31 40 19 19% 10% 31% 40% L iquidity L owRisk H ig hReturn T rust Interpretation: .
of Investors 30 14 11 20 16 6 4 Others K otak Nam e of AMC IC IC I Prudential R eliance H D F C UTI S BIMF 0 4 6 16 20 10 14 30 5 10 15 20 25 30 No. 40% People prefer to invest where there is High Return. of Inves tors . 11% prefer easy Liquidity and 19% prefer Trust Preference of Investors for future investment in Mutual Fund Name of AMC SBIMF UTI HDFC Reliance ICICI Prudential Kotak Others No. 31% prefer to invest where there is Low Risk.Out of 110 People.
42% know about Mutual fund Through Financial Advisor.Interpretation: Out of 110 investors. Out of 110 Respondents. Source of information for customers about Mutual Fund Source of information Advertisement Peer Group Bank Financial Advisors No. 30 % through Bank. of Respondents 13 25 30 42 5 0 No. 16% in ICICI Prudential. . 30% in SBIMF. 6% in Kotak. of R espondents 4 0 3 0 2 0 1 0 0 Advertis em ent P eer Group 1 3 2 5 3 0 B a nk 4 2 F ina nc ia l Advisors S ource of Inform a tion Interpretation: From the above chart it can be inferred that the Financial Advisor is the most important source of information about Mutual Fund. 25% through Peer Group and 13% through Advertisement. 16% in UTI and 11% in HDFC Mutual Fund. 4% in Others. 20% prefer to invest in Reliance.
Findings and Conclusion .
Only 61% Respondents were aware about Mutual fund and its operations and 39% were not. Out of 90 Respondents 61% were not aware of Mutual Fund. In Occupation group most of the Investors were Private employees. 98% Invested in Fixed Deposits. Among 110 Respondents only 11% had invested in Mutual Fund and 40% did not have invested in Mutual fund. The second most Investors were in the age group of 41-45 years and the least were in the age group of below 45-50 years. Among 110 Respondents only 11% had invested in Mutual Fund.. Mostly Respondents preferred High Return while investment.50% Invested in insurance.Findings In Aurangabad in the Age Group of 36-40 years were more in numbers. employees About all the Respondents had a Saving A/c in Bank. Only 99% Respondents invested in Mutual fund 11%. the second most preferred Reliance . 39% told there is not any specific reason for not invested in Mutual Fund. the second most preferred Low Risk then trust and the least preferred Liquidity. the second most Investors were Govt. . ICICI Prudential has been preferred after them. For Future investment the maximum Respondents preferred SBI Mutual Fund.
Most of the Investors had invested in SBI or Reliance Mutual Fund, ICICI Prudential has also good Brand Position among investors. 60% Investors preferred to Invest through Financial Advisors, 30% through AMC (means Direct Investment) and 11% through Bank.
Running successful Mutual Funds requires complete understanding of the peculiarities of the Indian Stock Market and also the psyche of the small investors. This study has made an attempt to understand the financial behavior of Mutual Fund investors in connection with the preferences of Brand (AMC), Products, Channels etc. I observed that many of people have fear of Mutual Fund. They think their money will not be secure in Mutual Fund. They need the knowledge of Mutual Fund and its related terms. Many of people do not have invested in mutual fund due to lack of awareness although they have money to invest. As the awareness and income is growing the number of mutual fund investors are also growing. “Brand” plays important role for the investment. People invest in those Companies where they have faith or they are well known with them. There are many AMCs in Aurangabad but only some are performing well due to Brand awareness. Some AMCs are not performing well although some of the schemes of them are giving good return because of not awareness about Brand. Reliance, UTI, SBIMF, ICICI Prudential etc. they are well known Brand, they are performing well and their Assets Under Management is larger than others whose Brand name are not well known like Principle, Sunderam, etc. Distribution channels are also important for the investment in mutual fund. Financial Advisors are the most preferred channel for the investment in mutual fund. They can change investors’ mind from one investment option to others. Many of investors directly invest their money through AMC because they do not have to pay entry load. Only those people invest directly who know well about mutual fund and its operations and those have time.
Suggestions and Recommendations
The most vital problem spotted is of ignorance. Investors should be made aware of the
benefits. Nobody will invest until and unless he is fully convinced. Investors should be made to realize that ignorance is no longer bliss and what they are losing by not investing. Mutual funds offer a lot of benefit which no other single option could offer. But most of
the people are not even aware of what actually a mutual fund is? They only see it as just another
Though most of the prospects and potential investors are not aware about the SIP. their need and time (how long they want to invest). So the advisors should try to change their mindsets. By considering these three things they can take the customers into consideration. SIP is easy for monthly salaried person as it provides the facility of do the investment in EMI. Before making any investment Financial Advisors should first enquire about the risk tolerance of the investors/customers. Systematic Investment Plan (SIP) is one the innovative products launched by Assets Management companies very recently in the industry. Mutual Fund Company needs to give the training of the Individual Financial Advisors about the Fund/Scheme and its objective. Young investors as well as persons at the height of their career would like to go for advisors due to lack of expertise and time. . because they are the main source to influence the investors.investment option. There is a large scope for the companies to tap the salaried persons.. so making greater efforts with younger customers who show some interest in investing should pay off. Younger people aged under 35 will be a key new customer group into the future. The advisors should target for more and more young investors.
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