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“MUTUAL FUND”

PROJECT REPORT

ON

MANAGEMENT OF FINANCIAL SERVICES

SUBMITTED TOWARDS PARTIAL FULFILLMENT

OF

POSTGRADUATE PROGRAMME IN MANAGEMENT

SUBMITTED TO SUBMITTED BY
PROF: SAMARJEET SEN D.RAVI H2-23
GUPTA
(3rd SEMESTER)
SPECIALIZATION –MARKETING + FINANCE

EASTERN INSTITUTE FOR INTEGRATED LEARNING IN MANAGEMENT


GILANDER HOUSE
Note:

This project is solely for the study purpose and understanding. Results
may vary or not tally with the actual results.
ACKNOWLEDGEMENT

We are thankful to MR. Samarjeet sen gupta who has given this opportunity
for doing a project work on “MUTUAL FUND”. From this study we have
gathered knowledge of services which are provided by the mutual fund
houses and also find out which of the firm is having good service.
1) INTRODUCTION

Mutual funds works in the area of stocks and bonds.

Stocks

Stocks represent shares of ownership in a public company. Examples of public


companies include Reliance, ONGC and Infosys. Stocks are considered to be the
most common owned investment traded on the market.

Bonds

Bonds are basically the money which you lend to the government or a company,
and in return you can receive interest on your invested amount, which is back
over predetermined amounts of time. Bonds are considered to be the most
common lending investment traded on the market.
There are many other types of investments other than stocks and bonds
(including annuities, real estate, and precious metals), but the majority of
mutual funds invest in stocks and/or bonds.

Regulatory authorities

To protect the interest of the investors, SEBI formulates policies and regulates
the mutual funds. It notified regulations in 1993 (fully revised in 1996) and
issues guidelines from time to time. MF either promoted by public or by private
sector entities including one promoted by foreign entities is governed by these
Regulations.

SEBI approved Asset Management Company (AMC) manages the funds by


making investments in various types of securities. Custodian, registered with
SEBI, holds the securities of various schemes of the fund in its custody.
According to SEBI Regulations, two thirds of the directors of Trustee Company
or board of trustees must be independent.
The Association of Mutual Funds in India (AMFI) reassures the investors in units
of mutual funds that the mutual funds function within the strict regulatory
framework. Its objective is to increase public awareness of the mutual fund
industry.

AMFI also is engaged in upgrading professional standards and in promoting


best industry practices in diverse areas such as valuation, disclosure,
transparency etc.

2) Mutual funds

What is mutual fund?

A mutual fund is just the connecting bridge or a financial intermediary that


allows a group of investors to pool their money together with a predetermined
investment objective. The mutual fund will have a fund manager who is
responsible for investing the gathered money into specific securities (stocks or
bonds). When anyone invest in a mutual fund, the person is buying units or
portions of the mutual fund and thus on investing becomes a shareholder or unit
holder of the fund. Mutual funds are considered as one of the best available
investments as compare to others they are very cost efficient and also easy to
invest in, thus by pooling money together in a mutual fund, investors can
purchase stocks or bonds with much lower trading costs than if they tried to do
it on their own. But the biggest advantage to mutual funds is diversification, by
minimizing risk & maximizing returns

Types of mutual fund


Wide variety of Mutual Fund Schemes exists to cater to the needs such as
financial position, risk tolerance and return expectations etc. thus mutual funds
has Variety of flavors, Being a collection of many stocks, an investors can go for
picking a mutual fund might be easy. There are over hundreds of mutual funds
scheme to choose from

Mutual fund category: BY STRUCTURE

i) Open ended scheme

An open-end fund is one that is available for subscription all through the year.
These do not have a fixed maturity. Investors can conveniently buy and sell units
at Net Asset Value ("NAV") related prices. The key feature of open-end schemes
is liquidity

ii)Close ended scheme

These schemes have a pre-specified maturity period. One can invest directly in
the scheme at the time of the initial issue. Depending on the structure of the
scheme there are two exit options available to an investor after the initial offer
period closes. Investors can transact (buy or sell) the units of the scheme on the
stock exchanges where they are listed. The market price at the stock exchanges
could vary from the net asset value (NAV) of the scheme on account of demand
and supply situation, expectations of unit holder and other market factors.
Alternatively some close-ended schemes provide an additional option of selling
the units directly to the Mutual Fund through periodic repurchase at the
schemes NAV; however one cannot buy units and can only sell units during the
liquidity window. SEBI Regulations ensure that at least one of the two exit
routes is provided to the investor

iii) INTERVAL SCHEMES


Interval Schemes are that scheme, which combines the features of open-ended
and close-ended schemes. The units may be traded on the stock exchange or may
be open for sale or redemption during pre-determined intervals at NAV related
prices

Mutual fund category: BY NATURE

i) EQUITY FUND

These funds invest a maximum part of their corpus into equities holdings. The
structure of the fund may vary different for different schemes and the fund
manager’s outlook on different stocks. The Equity Funds are sub-classified
depending upon their investment objective, as follows:

• Diversified Equity Funds


• Mid-Cap Funds
• Sector Specific Funds
• Tax Savings Funds (ELSS)

Equity investments are meant for a longer time horizon, thus Equity funds rank
high on the risk-return matrix

ii) DEBT FUNDS

The objective of these Funds is to invest in debt papers. Government authorities,


private companies, banks and financial institutions are some of the major
issuers of debt papers. By investing in debt instruments, these funds ensure low
risk and provide stable income to the investors. Debt funds are further classified
as:

 Gilt Funds: Invest their corpus in securities issued by Government,


popularly known as Government of India debt papers. These Funds carry
zero Default risk but are associated with Interest Rate risk. These schemes
are safer as they invest in papers backed by Government.
 Income Funds: Invest a major portion into various debt instruments such
as bonds, corporate debentures and Government securities.
 MIPs: Invests maximum of their total corpus in debt instruments while
they take minimum exposure in equities. It gets benefit of both equity and
debt market. These scheme ranks slightly high on the risk-return matrix
when compared with other debt schemes.
 Short Term Plans (STPs): Meant for investment horizon for three to six
months. These funds primarily invest in short term papers like Certificate
of Deposits (CDs) and Commercial Papers (CPs). Some portion of the
corpus is also invested in corporate debentures.
 Liquid Funds: Also known as Money Market Schemes, These funds
provides easy liquidity and preservation of capital. These schemes invest
in short-term instruments like Treasury Bills, inter-bank call money
market, CPs and CDs. These funds are meant for short-term cash
management of corporate houses and are meant for an investment
horizon of 1day to 3 months. These schemes rank low on risk-return
matrix and are considered to be the safest amongst all categories of
mutual funds.

iii) BALANCED FUND

As the name suggest they, are a mix of both equity and debt funds. They invest in
both equities and fixed income securities, which are in line with pre-defined
investment objective of the scheme. These schemes aim to provide investors with
the best of both the worlds. Equity part provides growth and the debt part
provides stability in returns

Further the mutual funds can be broadly classified on the basis of


investment parameter viz,
Each category of funds is backed by an investment philosophy, which is pre-
defined in the objectives of the fund. The investor can align his own investment
needs with the funds objective and invest accordingly.
 Mutual fund By investment objective

Growth Schemes: Growth Schemes are also known as equity schemes. The aim
of these schemes is to provide capital appreciation over medium to long term.
These schemes normally invest a major part of their fund in equities and are
willing to bear short-term decline in value for possible future appreciation.

Income Schemes: Income Schemes are also known as debt schemes. The aim of
these schemes is to provide regular and steady income to investors. These
schemes generally invest in fixed income securities such as bonds and corporate
debentures. Capital appreciation in such schemes may be limited.

Balanced Schemes: Balanced Schemes aim to provide both growth and income
by periodically distributing a part of the income and capital gains they earn.
These schemes invest in both shares and fixed income securities, in the
proportion indicated in their offer documents (normally 50:50).

Money Market Schemes: Money Market Schemes aim to provide easy liquidity,
preservation of capital and moderate income. These schemes generally invest in
safer, short-term instruments, such as treasury bills, certificates of deposit,
commercial paper and inter-bank call money.

Other scheme

Tax scheme

Tax-saving schemes offer tax rebates to the investors under tax laws prescribed
from time to time. Under Sec.88 of the Income Tax Act, contributions made to
any Equity Linked Savings Scheme (ELSS) are eligible for rebate.

Index scheme

Index schemes attempt to replicate the performance of a particular index such


as the BSE Sensex or the NSE 50. The portfolio of these schemes will consist of
only those stocks that constitute the index. The percentage of each stock to the
total holding will be identical to the stocks index weightage. And hence, the
returns from such schemes would be more or less equivalent to those of the
Index.
Sector scheme

These are the funds/schemes which invest in the securities of only those sectors
or industries as specified in the offer documents. E.g. Pharmaceuticals, Software,
Fast Moving Consumer Goods (FMCG), Petroleum stocks, etc. The returns in
these funds are dependent on the performance of the respective
sectors/industries. While these funds may give higher returns, they are more
risky compared to diversified funds. Investors need to keep a watch on the
performance of those sectors/industries and must exit at an appropriate time.

Types of return

There are three ways, where the total returns provided by mutual funds can be
enjoyed by investors:

Income is earned from dividends on stocks and interest on bonds. A fund pays
out nearly all income it receives over the year to fund owners in the form of a
distribution.

If the fund sells securities that have increased in price, the fund has a capital
gain. Most funds also pass on these gains to investors in a distribution.

If fund holdings increase in price but are not sold by the fund manager, the
fund's shares increase in price. You can then sell your mutual fund shares for a
profit. Funds will also usually give you a choice either to receive a check for
distributions or to reinvest the earnings and get more shares

3) Different plans that Mutual fund offers?

Dividend Plan: Under the Dividend Plan, the fund distributes a substantial part
of the surplus to investors in the form of dividend (income distribution).
Growth Plan: Under the Growth Plan, an investor realizes only the capital
appreciation on the investment (by an increase in NAV) and normally does not
get any income in the form of income distribution.

Re-investment Plan: Here the income distribution accrued on a mutual fund


scheme is automatically re-invested in purchasing additional units under the
scheme. In most cases mutual funds offer the investors an option of collecting
income distribution or re-invest in the same scheme at scheme NAV/NAV based
price.

4) What is a mutual fund's NAV?

Net asset value (NAV) represents a fund's per share market value. This is the
price at which investors buy ("bid price") fund shares from a fund company and
sell them ("redemption price") to a fund company. It is derived by dividing the
total value of all the cash and securities in a fund's portfolio, less any liabilities,
by the number of shares outstanding. An NAV computation is undertaken once
at the end of each trading day based on the closing market prices of the
portfolio's securities.

For example, if a fund has assets of $50 million and liabilities of $10 million, it
would have a NAV of $40 million.

This number is important to investors, because it is from NAV that the price per
unit of a fund is calculated. By dividing the NAV of a fund by the number of
outstanding units, you are left with the price per unit. In our example, if the fund
had 4 million shares outstanding, the price-per-share value would be $40 million
divided by 4 million, which equals $10.

This pricing system for the trading of shares in a mutual fund differs
significantly from that of common stock issued by a company listed on a stock
exchange. In this instance, a company issues a finite number of shares through
an initial public offering (IPO), and possibly subsequent additional offerings,
which then trade in the secondary market. In this market, stock prices are set by
market forces of supply and demand. The pricing system for stocks is based
solely on market sentiment.

Because mutual funds distribute virtually all their income and realized capital
gains to fund shareholders, a mutual fund's NAV is relatively unimportant in
gauging a fund's performance, which is best judged by its total return.

5) ADVANTAGE & DISADVANTAGE OF MUTUAL FUND.

Advantage of mutual funds.

1. Professional Management - The basic advantage of funds is that, they are


professional managed, by well qualified professional. Investors purchase funds
because they do not have the time or the expertise to manage their own
portfolio. A mutual fund is considered to be relatively less expensive way to make
and monitor their investments

2. Diversification - Purchasing units in a mutual fund instead of buying


individual stocks or bonds, the investors risk is spread out and minimized up to
certain extent. The idea behind diversification is to invest in a large number of
assets so that a loss in any particular investment is minimized by gains in others.

3. Economies of Scale - Mutual fund buy and sell large amounts of securities at
a time, thus help to reducing transaction costs, and help to bring down the
average cost of the unit for their investors.

4. Liquidity - Just like an individual stock, mutual fund also allows investors to
liquidate their holdings as and when they want.

5. Simplicity - Investments in mutual fund is considered to be easy, compare to


other available instruments in the market, and the minimum investment is
small. Most AMC also have automatic purchase plans whereby as little as Rs.
2000, where SIP start with just Rs.50 per month basis.
Disadvantages of Investing Mutual Funds:

1.Professional Management- Some funds doesn’t perform in neither the


market, as their management is not dynamic enough to explore the available
opportunity in the market, thus many investors debate over whether or not the
so-called professionals are any better than mutual fund or investor himself, for
picking up stocks.

2. Costs – The biggest source of AMC income, is generally from the entry & exit
load which they charge from an investors, at the time of purchase. The mutual
fund industries are thus charging extra cost under layers of jargon

3. Dilution - Because funds have small holdings across different companies, high
returns from a few investments often don't make much difference on the overall
return. Dilution is also the result of a successful fund getting too big. When
money pours into funds that have had strong success, the manager often has
trouble finding a good investment for all the new money.

4. Taxes - when making decisions about your money, fund managers don't
consider your personal tax situation. For example, when a fund manager sells a
security, a capital-gain tax is triggered, which affects how profitable the
individual is from the sale. It might have been more advantageous for the
individual to defer the capital gains liability.
6) MUTUAL FUND CHOOSEN FOR STUDY

BIRLA SUNLIFE MUTUAL FUND

BIRLA SUN LIFE ADVANTAGE FUND – GROWTH

Birla Sun Life ADVANTAGE Fund is a diversified equity fund enabling


investors to capitalize on the immense growth opportunities provided by the
stock market while at the same time minimizing the risk.

Launched in Feb 24, 1995, the fund is an open-ended growth scheme with a
LARGE CAP theme.

 OBJECTIVE

Aims to achieve long term growth of capital at relatively moderate levels of


risk through a diversified research based investment approach.

 Fund features

Type of scheme Open ended

Nature Equity

Option Growth
Inception date Feb24-1995

Face value( rs/unit) 10

Fund size in (rs crore) 405.44 as on nov 30, 2009

Last dividend declared 80 % as on march 30,2000

Minimum investment(rs) 5000/-

Purchase redemption daily

nav Daily

Entry load 0%

Exit load If redeemed between 0 days to 7


days exit load is 0.5%

Increase or decrease in fund size as -4.8


on oct 30,2009(in rs crore)

Mutual fund

Birla Sun Life Mutual Fund


Ahura Centre , 2nd Floor, A. 96/A-D,
Mahakali Caves Road, Andheri (E)
Mumbai
Tel.-56928000

Asset Management Company

Birla Sun Life Asset Management Company Ltd.


One India Bulls Centre , Tower 1, 17th Flr
841, Senapati Bapat Marg, Elphinstone Road
Mumbai - 400013 Tel.- 66928000
Registrar
Computer Age Management Services Private Limited
A&B, Lakshmi Bhavan
609, Anna Salai
Chennai

NAV
Latest nav 146.80 as on dec 2009

Bench mark index-bse sensex 16,719.83 as on dec 18, 2009

52 week high 150.76 as on dec 8, 2009

52 week low 66.01 as on mar 9, 2009

 Risk and return

Scheme performance as on dec 18,2009

1 month 3 month 6 month 1 year 3 year 5year Since


inception

-1.18 2.22 22.41 77.10 6.04 18.90 20.40

 Risk
mean -0.55

Standard deviation 5.51

beta 0.93

 Portfolio

P/E 26.43 AS ON NOV 2009

P/B 4.36 AS ON NOV 2009

Dividend yielded 0.87 as on Nov - 2009

Market capital(Rs in crore) 71,009.95 as on Nov - 2009

Large 63.25 AS ON NOV 2009

Mid 33.28 AS ON NOV 2009

small NA AS ON NOV 2009

Top 5 holding percentage 20.29 AS ON NOV 2009

No of stocks 47

Expense ratio 2.32

 What’s in?

Housing Development Finance Corporation Ltd.


Mahindra & Mahindra Ltd
Cipla Ltd
Tata Steel Ltd.
 What’s out?

Hindustan Petroleum Corporation Ltd


Housing Development Finance Corporation Ltd
Indian Oil Corporation Ltd
Dharti Dredging

 Asset allocation

Equity Debt Cash & equivalent

96.62 0.0 3.38

equty
debt
cash & equivalent
7) MUTUAL FUNDS CHOOSEN FOR COMPARISION

i)FRANKLIN ASIAN EQUITY FUND – GROWTH

 OBJECTIVE

An open-end diversified equity fund that seeks to provide medium to long


term appreciation through investments primarily in Asian Companies /
sectors (excluding Japan) with long term potential across market
capitalization

 Fund features

Type of scheme Open ended

Nature Equity

Option Growth

Inception date Jan 16,2008

Face value( rs/unit) 10

Fund size in (rs crore) 416.45 as on nov 30, 2009

Last dividend declared NA


Minimum investment(rs) 5000/-

Purchase redemption daily

nav Daily

Entry load 0%

Exit load If redeemed between 0 year to 1


year exit load is 1%

Increase or decrease in fund size as 1.62


on oct 30,2009(in rs crore)

Mutual fund

Franklin Templeton Mutual Fund


Level 4, Wockhardt Towers
Bandra Kurla Complex, Bandra (East).
Mumbai
Tel.-67519100

Asset Management Company

Franklin Templeton Asset Management (India) Pvt. Ltd.


Wockhardt Towers, 4th Floor,
Bandra Kurla Complex,
Mumbai - 400051 Tel.- 67519100

Registrar
Franklin Templetion Asset Managment (India) Pvt. Ltd.
Franklin Templetion Centre, no.7,
3rd Cross Street, Adyar
Chennai
Tel.-24407000
 NAV

Latest nav 10.06 as on dec 18, 2009

Bench mark index-bse sensex NA

52 week high 10.29 as on dec 7, 2009

52 week low 6.23 as on mar 9, 2009

 Risk and return

Scheme performance as on dec 18, 2009

1 month 3 month 6 month 1 year 3 year 5year Since


inception

-0.61 -0.54 17.28 46.57 NA NA 0.32

 Risk
mean -0.28

Standard deviation 4.11

beta 7.87

 Portfolio

P/E 2.14 AS ON NOV 2009

P/B 0.86 AS ON NOV 2009

Dividend yielded 0.13

Market capital(Rs in crore) 2,866.02

Large 4.80 AS ON NOV 2009

Mid 4.97 AS ON NOV 2009

small NA AS ON NOV 2009

Top 5 holding percentage 26.30

No of stocks 58

Expense ratio 2.30

 What’s in?

HDFC Bank Ltd.


Great Eastern Shipping Company Ltd
Hyundai Engineering & Construction (South Korea)
 What’s out?

Hankook Tire America Corp.


HDFC Bank Ltd
Oil & Natural Gas Corpn Ltd
KT&G Corp

 Asset allocation

Equity Debt Cash & equivalent

95.52 0.0 4.48

ii) ING CORE EQUITY FUND – GROWTH

 OBJECTIVE

Seeks to provide long term capital appreciation by investing pre


pre-- dominantly
in a portfolio of high quality equity and equity related securities

 Fund features

Type of scheme Open ended

Nature Equity
Option Growth

Inception date May 6,1999

Face value( rs/unit) 10

Fund size in (rs crore) 58.44 as on nov 30, 2009

Last dividend declared NA

Minimum investment(rs) 5000/-

Purchase redemption daily

nav Daily

Entry load 0%

Exit load If redeemed between 0 days to 365


days exit load is 1%

Increase or decrease in fund size as 2.8


on oct 30,2009(in rs crore)

Mutual fund

ING Mutual Fund


101 Windsor ,
1st Floor,Off C.S.T.Road, Santacruz E
Mumbai
Tel.-3982 7999

Asset Management Company

ING Investment Management (India) Pvt Ltd.


601/602,"Windsor", Off CST Road,
Kalina, Santacruz (E),
Mumbai - 400098 Tel.- 40827999

Registrar
Computer Age Management Services Private Limited
A&B, Lakshmi Bhavan
609, Anna Salai
Chennai

 Nav

Latest nav 33.14 as on Dec 21, 2009

Bench mark index-bse sensex 8,809.14 as on Dec 21, 2009

52 week high 33.97 as on Dec 10, 2009

52 week low 16.48 as on Mar 9, 2009

 Risk and return

Scheme performance as on dec 18, 2009

1 month 3 month 6 month 1 year 3 year 5year Since


inception
1.09 3.51 21.97 69.34 7.74 21.51 11.99

 Risk

mean -0.54

Standard deviation 5.44

beta 0.92

 Portfolio

P/E 30.65 AS ON NOV 2009

P/B 4.73 AS ON NOV 2009

Dividend yielded 1.77

Market capital(Rs in crore) 90,863.16

Large 74.55 AS ON NOV 2009

Mid 18.43 AS ON NOV 2009

small NA AS ON NOV 2009

Top 5 holding percentage 26.59 AS ON NOV 2009

No of stocks 41

Expense ratio 2.50

 What’s in?
Maruti Suzuki India Ltd
Financial Technologies

 What’s out?

Reliance Communication Ventures Ltd.


JaiPrakash Associates Ltd.

 Asset allocation

Equity Debt Cash & equivalent

92.98 0.0 7.02

iii) MORGAN STANLEY A.C.E FUND - GROWTH

 OBJECTIVE

The investment objective of the scheme is to generate long


long-term
term capital
growth from an actively managed portfolio of equity and equity
equity-related
related
securities including equity derivatives.

 Fund features

Type of scheme Open ended

Nature Equity
Option Growth

Inception date Apr 3,2008

Face value( rs/unit) 10

Fund size in (rs crore) 131.67 as on nov 30, 2009

Last dividend declared NA

Minimum investment(rs) 5000/-

Purchase redemption daily

nav Daily

Entry load 0%

Exit load If redeemed between 0 year to 1


year exit load is 1%

Increase or decrease in fund size as 13.16


on oct 30,2009(in rs crore)

Mutual fund

Morgan Stanley Mutual Fund


Forbes Building, 5th Floor,
Charanjit Rai Marg,
Mumbai
Tel.-2209 7045 ,22096600

Asset Management Company


Morgan Stanley Asset Management (I) Pvt. Ltd.
Office No. 201, 2nd Floor,
DBS House, Prescott Street, Fort,
Mumbai - 400001 Tel.- 40779226 ,40779227

Registrar
Karvy Computershare Pvt. Ltd.
21, Avenue 4,
Street No 1, Banjara Hills
Hyderbad

 NAV

Latest nav 12.72 as on dec 18, 2009

Bench mark index-bse sensex 2097.18

52 week high 12.85 as on dec 7, 2009

52 week low 5.29 as on mar 9, 2009

 Risk and return

Scheme performance as on dec 18, 2009

1 month 3 month 6 month 1 year 3 year 5year Since


inception

1.53 11.05 37.49 93.84 NA NA 15.09


 Risk

mean -0.47

Standard deviation 5.50

beta 0.93

 Portfolio

P/E 24.29 AS ON NOV 2009

P/B 4.53 AS ON NOV 2009

Dividend yielded 0.75

Market capital(Rs in crore) 53,415.21

Large 54.38 AS ON NOV 2009

Mid 34.28 AS ON NOV 2009

small 5.16 AS ON NOV 2009

Top 5 holding percentage 19.10

No of stocks 49

Expense ratio 2.48


 What’s in?

Power Finance Corporation Ltd


I-Flex Solutions Limited
Cox & Kings Ltd.

 What’s out?

Reliance
Infrastructure
Ltd.
Exide
Industries Ltd
Jindal Steel
and Power
Ltd.

 Asset allocation

Equity Debt Cash & equivalent

94.94 0.0 5.06


iv) Reliance mutual fund

 OBJECTIVE

The primary investment objective of the scheme is to seek to generate capital


appreciation & provide long-term growth opportunities by investing in a
portfolio constituted of equity & equity related securities of top 100
companies by market capitalization & of companies which are available in the
derivatives segment from time to time and the secondary objective is to
generate consistent returns by investing in debt and money market securities.

 Fund features

Type of scheme Open ended

Nature Equity

Option Growth

Inception date Mar 28,2006

Face value( rs/unit) 10

Fund size in (rs crore) 2254.11 as on nov 30, 2009

Last dividend declared NA

Minimum investment(rs) 5000/-

Purchase redemption daily

nav Daily

Entry load 0%
Exit load If redeemed between 0 year to 1
year exit load is 1%

Increase or decrease in fund size as 65.71


on oct 30,2009(in rs crore)

Mutual fund

Reliance Mutual Fund


Kamala Mills Compound, Trade World, B - Wing
7th Floor, Senapati Bapat Marg, Lower parel (West)
Mumbai
Tel.-30414800
Asset Management Company
Reliance Capital Asset Management Ltd.
11th & 12th Flr One India Bull Centre, Tower 1
841 Senapati Bapat Marg, Elphinstone Rd
Mumbai - 400013 Tel.- 30414800 ,30301111

Registrar
Karvy Computershare Pvt. Ltd.
21, Avenue 4,
Street No 1, Banjara Hills
Hyderbad

 NAV

Latest nav 14.80 as on dec 18, 2009

Bench mark index-bse sensex 4987.70

52 week high 15.24 as on dec 7, 2009


52 week low 8.21 as on mar 9, 2009

 Risk and return

Scheme performance as on dec 18, 2009

1 month 3 month 6 month 1 year 3 year 5year Since


inception

-0.91 0.35 16.68 49.27 8.64 NA 11.09

 Risk

mean -0.40

Standard deviation 4.33

beta 0.73

 Portfolio

P/E 29.56 AS ON NOV 2009

P/B 3.99 AS ON NOV 2009


Dividend yielded 0.72

Market capital(Rs in crore) 76,849.00

Large 62.50 AS ON NOV 2009

Mid 13.27 AS ON NOV 2009

small NA AS ON NOV 2009

Top 5 holding percentage 34.07

No of stocks 21

Expense ratio 1.86

 What’s in?

Bharat Heavy Electricals Ltd

 What’s out?

Hindustan
Petroleum
Corporation
Ltd
 Asset allocation

Equity Debt Cash & equivalent

87.20 0.0 12.80


Comparative analysis of different mutual funds
Comparative analysis

1) On the basis of FUND SCHEME.

Company Birla FRANKLIN ING Core Morgan Reliance


sunlife ASIAN Equity Stanley A Equity
advantage EQUITY Fund Fund

Type of Open Open Open Open Open


scheme ended ended ended ended ended

nature Equity Equity Equity Equity Equity

option Growth Growth Growth Growth Growth

Face Value 10 10 10 10 10
(Rs/Unit)

Fund Size in 405.44 416.45 58.44 131.67 2254.11


Rs. Cr. (as on
nov 30, 2009)

Last 80 % as on NA NA NA NA
Dividend march
Declared 30,2000

Minimum 5000/- 5000/- 5000/- 5000/- 5000/-


Investment
(Rs)

Purchase Daily Daily Daily Daily Daily


Redemptions

NAV Daily Daily Daily Daily Daily


Calculation

Entry Load 0% 0% 0% 0% 0%

Exit Load If If If If If
redeemed redeemed redeemed redeemed redeemed
between 0 between 0 between 0 between 0 between 0
days to 7 year to 1 days to year to 1 year to 1
days exit year exit 365 days year exit year exit
load is load is 1% exit load is load is 1% load is 1%
0.5% 1%

Increase or -4.8 1.62 2.8 13.16 65.71


decrease in
funds since
oct
30,2009(rs
crore)

Findings

a) All funds are open ended, growth equity funds.


b) Fund size of RELIANCE MUTUAL fund is maximum.
c) Minimum requirement of fund for investment in any of the scheme is
5000/- Rs.
d) NAV is calculated on daily basis.
e) Exit load of BIRLA SUNLIFE ADVANTAGE fund is very low 0.5% for the
first week.
70
60
50
40
30
20
10 Increase or decrease in funds
since oct 30,2009(rs crore)
0
-10

f) Reliance mutual fund has the highest increase in funds since oct,2009.
g) All funds are showing positive growth but birla sunlife is showing
negative growth.
2) On the basis of NAV

company Birla FRANKLIN ING Core Morgan Reliance


sunlife ASIAN Equity Stanley A Equity
advantage EQUITY Fund Fund

Latest NAV 146.80 as 10.06 as on 33.14 as 12.72 as on 14.80 as on


on Dec , dec 18, on Dec dec 18, dec 18,
2009 2009 21, 2009 2009 2009

Benchmark 16,719.83 NA 8,809.14 2097.18 4987.70


Index - S&P as on dec as on Dec
Nifty 18, 2009 21, 2009

52 - Week 150.76 as 10.29 as on 33.97 as 12.85 as 15.24 as


High on dec 8, dec 7, 2009 on Dec on dec 7, on dec 7,
2009 10, 2009 2009 2009

52 - Week 66.01 as on 6.23 as on 16.48 as 5.29 as on 8.21 as on


Low mar 9, mar 9, on Mar 9, mar 9, mar 9,
2009 2009 2009 2009 2009
250

200

150

100 52 - Week Low


52 - Week High
50

0
Birla Franklin ING Core Morgan Reliance
sunlife Asian Equity Stanley A Equity
advantage Equity Fund Fund

findings:

1)Nav of birla sunlife fund has much fluctuation

2)RELIANCE mutual fund has less fluctuauion in NAV.


3) On the basis of Risk & return

SCHEME PERFORMANCE (%) AS ON DEC 18, 2009

company 1 3 6 1 3 5 SINCE
MONT MONTH MONTH YEA YEA YEA INCEPTIO
H S S R R R N

Birla -1.18 2.22 22.41 77.10 6.04 18.9 20.40


sunlife
advantag

FRANKLI -0.61 -0.54 17.28 46.57 NA NA 0.32


N ASIAN
EQUITY

ING Core 1.09 3.51 21.97 69.34 7.74 21.51 11.99


Equity
Fund

Morgan 1.53 11.05 37.49 93.84 NA NA 15.09


Stanley A

Reliance -0.91 0.35 16.68 49.27 8.64 NA 11.09


Equity
Fund
Findings:

a) For the 1 st month performance of birla sunlife advantage fund is much lower
– 1.18, the best performance is of Morgan Stanley 1.53.

b)For the initial time period of 3 months the lowest performer is FRANKLIN
ASIAN EQUITY -0.54, MORGAN STANLEY is still performing well as 11.05%.

c)The period of first year is of MORGAN STANLEY with 93.84% performance

d)Since inception the best performer of the above mutual funds is BIRLA
SUNLIFE MUTUAL ADVANTAGE.

100

80

60 Birla sunlife advantage


Franklin Asian Equity
40 ING Core Equity Fund
Morgan Stanley A
20 Reliance Equity Fund

0
1 MONTH 3 MONTHS 6 MONTHS 1 YEAR SINCE
INCEPTION
-20

e)From the graph it is clear that the best performer of mutual fund is
MORGAN STANLEY.
f)The second good performer is BIRLA SUNLIFE ADVANTAGE MUTUAL FUND.

g)Franklin Asian equity fund is the lowest performer of all.

4) On the basis of Risk

company Birla FRANKLIN ING Core Morgan Reliance


sunlife ASIAN Equity Stanley A Equity
advantage EQUITY Fund Fund

Mean -0.55 -0.28 -0.54 -0.47 -0.40

Standard 5.51 4.11 5.44 5.50 4.33


deviation

Beta 0.93 7.87 0.92 0.93 0.73

9
8
7
6
5
4
3 mean
2
1 Standard deviation
0 beta
-1
Findings:

a) Max mean is of FRANKLIN ASIAN EQUITY, while min mean is of BIRLA


SUNLIFE ADVANTAGE.

b) Max standard deviation is of BIRLA SUNLIFE ADVANTAGE, Min S.D is of


FRANKLIN ASIAN EQUITY.

c) Max “Beta” is of FRANKLIN ASIAN EQUITY.

d)BIRLASUNLIFE , RELIANCE MUTUAL FUND, MORGANSTANLEY are less


volatile.

e) Standard deviation of all mutual funds is nearly same.

5)On the basis of Portfolio:

company Birla FRANKLIN ING Core Morgan Reliance


sunlife ASIAN Equity Stanley A Equity
advantage EQUITY Fund Fund

P/E 26.43 2.14 30.65 24.29 29.56

P/B 4.36 0.86 4.73 4.53 3.99


Dividend 0.87 0.13 1.77 0.75 0.72
yield

Market 71,009.95 2,866.02 90,863.16 53,415.21 76,849.00


capital(in
Rs crore)

large 63.25 4.80 74.55 54.38 62.50

mid 33.28 4.97 18.43 34.28 13.27

small NA NA NA 5.16 AS ON NA
NOV 2009

Top 5 20.29 26.30 26.59 19.10 34.07


holding %

No of 47 58 41 49 21
stocks

Expense 2.32 2.30 2.50 2.48 1.86


ratio (%)

( P/E ratio, P/B ratio, market capital all are taken AS ON NOV 2009)

{p/e ratio= market value of share/ earning per share.

p/b ratio= stock price/ (total assets- intangible assets and liabilities.)}
Graph on p/e & p/b ratio

35

30

25

20
P/E
15

10 P/B

0
Birla sunlife Franklin Asian ING Core Equity Morgan Stanley Reliance Equity
advantage Equity Fund A Fund

Graph on no of stocks each fund has.

No of stocks

60

50

40

30
No of stocks
20

10

0
Birla sunlife Franklin ING Core Morgan Reliance
advantage Asian Equity Equity Fund Stanley A Equity Fund
Findings:

a) P/E ratio of ING Core Equity Fund is maximum, while the minimum is of
FRANKLIN ASIAN EQUITY.

b) P/B ratio of ING Core Equity Fund is maximum, while the minimum is of
FRANKLIN ASIAN EQUITY.

c) MARKET CAPITAL OF ING Core Equity Fund is much higher 90,863.16

d) Expense ratio of all mutual funds is almost same.

e) Franklin has highest no of stocks.

6) On the basis of Asset allocation (%)

Company Birla FRANKLIN ING Core Morgan Reliance


sunlife ASIAN Equity Stanley A Equity
advantage EQUITY Fund Fund

Equity 96.62 95.52 92.98 94.94 87.20

Debt 0.0 0.0 0.0 0.0 0.0

Cash & 3.37 4.48 7.02 5.06 12.80


equivalent
Graph for asset allocation investment.

120

100

80

60 equity
debt
40 Cash & equivalent

20

0
Birla sunlife Franklin Asian ING Core Morgan Reliance
advantage Equity Equity Fund Stanley A Equity Fund

findings

a)Mutual fund invests most of their investment in EQUITY.

b)There
There is no investment in DEBT.

c)Investment
Investment in cash & equivalent is very low.
key findings

1) The maximum return can be expected in BIRLASUNLIFE ADVANTAGE


fund.

2) Scheme performance of MORGANSTANLEY fund is good.

3) P/E ratio of morgan stanley, reliance mutual fund, birla sunlife is


good.

4) p/b ratio FRANKLIN FUND i very low it means it is undervalued.


7) Conclusion

A mutual fund brings together a group of people and invests their


money in stocks, bonds, and other securities.
The advantages of mutuals are professional management,
diversification ,economies sale, simplicity and liquidity.
The disadvantages of mutuals are high costs, over-diversification,
possible tax consequences, and the inability of management to
guarantee a superior return.
There are many, many types of mutual funds. You can classify funds
based on asset class, investing strategy, region, etc.
Mutual funds have lots of costs.
Costs can be broken down into ongoing fees (represented by
theexpense ratio) and transaction fees (loads)
The biggest problems with mutual funds are their costs and fees.
Mutual funds are easy to buy and sell. You can either buy them
directly from the fund company or through a third party.
Mutual fund ads can be very deceiving.

8) Bibliography

1) Www. Mutualfundindia.com
2) www.birlasunlife mutualfund.com
3) www.franklin funds.com
4) www.reliancemutualfund.com
5) www.morganstnleymutualfunds.com
6) www.google.com
7) www. Ing corefunds.com