PROJECT REPORT ON

MUTUAL FUNDS W.R.T

EQUITY FUNDS
AT MOTHILAL OSWAL, HYDERABAD

ABSTRACT: An investment is a commitment of funds made with the

expectation of some return in the form of capital appreciation. Different investment avenues
are available to the investors such as fixed deposits, insurance, post office savings/ national
savings certificate, gold/e-gold, bonds, public provident fund (PPF), real estate, shares,
commodities, etc. Mutual fund is one of the important investment vehicle that offer good
investment prospects to the investors. Mutual fund is a trust that pools the savings of various
individuals by issuing units to them and then invests it in various securities such as shares,
debentures and bonds as per the stated objectives of the scheme. Further, this investment
avenue offers several benefits to the investors as diversification, professional fund
management, liquidity, transparency etc. Today a wide variety of mutual fund schemes are
available for the investors such as Open-ended, Close-ended, Interval, Growth, Income,
Balanced, Equity Linked Saving Schemes (ELSS) and Exchange Traded Funds (ETF), etc.
These schemes are catering to the investors’ needs, risk and return tolerance. In spite of the
wide variety of mutual fund schemes available and large potential investors’ base, Indian
mutual fund industry is still lacking far behind in terms of total assets with respect to other
developed nations as it manages only 0.5 percent of the total mutual fund assets worldwide.
The swift growth of Indian mutual fund industry and low investors base necessitates the
investigation of some crucial issues of the performance of mutual fund schemes in terms of
their efficiency. It is of paramount importance for policy makers, governing bodies and mutual
fund companies to analyse that how many Indian mutual fund schemes have been performing
efficiently. The present study adds to the existing literature by studying the performance of
mutual funds in India in terms of their efficiency. Data Envelopment analysis (DEA) has been
employed by taking Sharpe ratio and Jensen’s Alpha as outputs and load status, expense ratio,
minimum initial investment required and risk associated with the mutual fund scheme in terms
of beta as inputs. It has been found that a large number of mutual fund schemes have been
performing inefficiently. Also, the reason for the inefficient performance by the mutual fund
schemes and various means for improving their efficiency have been identified and presented.
This study also analyses the performance efficiency of equity, income, balance and ELSS
mutual fund schemes. It has also been found that, when analyzed separately within their xi
investment styles, efficiency of mutual fund schemes is much better as compared to when all
the mutual fund schemes have been analyzed together.
 Contents
Executive summary

Chapter I
 objective
 Scope
 Limitation

Chapter II
 Introduction
 Company Profile
 Product profile

Chapter III
Review Of Literature
Research Methodology
Chapter IV
Mutual funds
(Description & Classification)

Chapter V

 Equity Mutual Funds And Its Performance

 H ow To Select an Equity diversified Fund
 Data Analysis and Interpretation
 Findings
 Conclusion

Annexure

Biliography
Chapter – 1

 OBJEC TIVES

 SCOPE

 LIMITA TIONS
 Introduction

Mutual fund is a trust that pools the savings of a number of investors who share a common
financial goal. This pool of mo ney is invested in accordance with a stated ob jective. The joint
ownership of the fund is thus “ Mutual”, i.e. the fund belongs to all investors. The money thus
collected is then invested in capital market instruments such as shares, debentures and other
securities. The income earned t hrough these investments and the capital appr eciations realized
are shared by its unit holders in p roportion the number of units owned by them.

Thus a Mutual F und is the most suitable investment for the co mmon man as it
offers an opportunity to invest A Mutual Fund is an investment tool that allows small investors
access to a well-diversified portfolio of equities, bonds and other securities. Each shareholder
participates in the gain or loss o f the fund. Units are issued and can be redeemed as needed. The
funds Net Asset value (NAV) is determined each day.

Equity diversified mutual funds are also known as stock mutual funds. Equ ity
mutual funds invest pooled amounts of mon ey in the stocks of public companies. Stock s
represent part ownership, or equity diversified, in compa nies, and the aim of stock ownership is
to see the value of the companies increase over time. Stocks are often categorized by their
market capitalization (or caps), and can be classified in three basic sizes: small, medium, and
large. Ma ny mutual funds invest primarily in companies of one of these sizes and are thus
classified as large-cap, mid-cap or small-cap funds.

Equity diversified fund managers employ different styles of stock picking when
they make investment decisions for their p ortfolios. Some fund managers use a value approach
to stocks, searching for stocks that are un dervalued when compared to other similar co
mpanies. Another approach to picking is to look primarily at growth, trying to find stocks that
are growing faster than their competitors, or the market as a whole. Some managers buy both
kinds of stocks, building a portfolio of both gro wth and value stocks. Since equity diversified
funds invest in stocks, they have the potential to generate more returns. On the other hand they
carry greater risks too.
 Though still now the financial crisis is going on except the past week, the stock
market had a bad time going on, the equity diversified mutual funds are continuously giving
more and more returns to the customers. So the equity diversified funds are on the peak now. As
mutual funds are slowly and steadily becoming the most preferable investment now a day, t he
preference for
equity diversified funds is growing.

Instead of market downside, more and more people are now investing; new
investors are entering the market. Household saving contribute about 75 to 80 percent to the
level of national savings. From about 10 percent saving of GDP in 1950, domestic savings
have increased to 27.40 perce nt of GDP in 2004-2005. During these five decades, the level of
GDP has grown substantially a nd with that, the level of savings too has grown in absolute and
relative terms. The level of sa vings can be stepped up to 30 percent or eve n more of GDP,
provided investors are assure d of a reasonable real rate of return and are offered adequate fiscal
incentives .Mutual fun ds, especially the equity diversified funds will one of t he leaders in the
investment market.

OBJECTIVES

The overall objectives of this project are as under:

 To know marke t status of equity diversified funds.

 To know perfor mance of equity diversified funds.

 To know the ca use of choosing equity diversified funds.

 To know how e quity funds work.

 To know the be st equity diversified fund available in the market.

 To undergo through the Summer Training for the partial fulfillm ent of the PGDM
program of BCCM, Hyderabad.
 Scope

All the fingers of a hand are not the same. People differ from each other upon their
income, expenditure, savi ng habits, environment, etc. Their req uirement also
differs from each other as per the above factors. Due to this the financial
requirement and ability to get the investment requirement differ from person to
person so the financial mar ket especially the Mutual Fund market caters to a vast
area from each of these aspe cts stated above.

This project is based on the Equity diversified funds, which is a

brief analysis on the equity diversified or growth mutual funds. As the project
repor t is fully based on secondary data and it can be used to have the exact figure
of investment in Mutual Funds, especially in equity diversified funds. Also the
report can be us ed for decision making by knowing the opinion of customer, the
management can take decision accordingly. The proper an alysis on the equity
diversified funds and the past p erformance of these funds will help the lay man to
take decision for investing in mu tual funds and maximizing the percentage of
equity diversified funds in his portfolio.
 RE SEARCH METHODOLOGY

Reasearch Design

Research design of my project is analytical

Sources of data

The data which I have collected are from secondary sources from the industry p
rofile, different journals, books and different we bsites written above.
 Limitations

I. There is vast information about mutual funds, which ca nnot be

given at a time in the report.
II. Some comparis ons cannot be done due to the nature of the funds.
III. New funds are entering the market and booming, so thei r past records
cannot be give n for their non-existence in the market.
IV. As mutual fund s performance is calculated by comparing the
current records with its past performances of a long period (1 yr .,3
yr.,5 yr,) one cannot do r esearch by giving only current data.
CHAPTER-III

 INTRO DUCTION

 COMPA NY PROFILE

 PRODUCT PROFILE
 CHAPTER-II
REVIEW OF LITERATURE

To give a complete shape of project report, the researcher have given through the following
books, journals and websites about which I have given detail below.

REVIEW OF LITERATURE Mutual funds attracted the interests of academicians, researchers

and financial analysts mostly since 1986. A number of articles have been published in financial
dailies like economic times, business line and financial express, periodicals like capital market,
Business India etc., and in professional and research journals. Literature Review on performance
evaluation of mutual fund is enormous. Various studies have been carried out in India and abroad
to evaluate the performance of mutual funds schemes from time to time. A few research studies
that have influenced substantially in preparing the thesis are discussed below in this chapter. 2.1
Review of Literature Jack Treynor (1965) developed a methodology for performance evaluation
of a mutual fund that is referred to as reward to volatility measure, which is defined as average
excess return on the portfolio. This is followed by Sharpe (1966) reward to variability measure,
which is average excess return on the portfolio divided by the standard deviation of the portfolio.
Sharpe (1966) developed a composite measure of performance evaluation and imported superior
performance of 11 funds out of 34 during the period 1944-63. Michael C. Jensen (1967)
conducted an empirical study of mutual funds in the period of 1954-64 for 115 mutual funds. The
results indicate that these funds are not able to predict security prices well enough to 30
outperform a buy the market and hold policy. The study ignored the gross management expenses
to be free. There was very little evidence that any individual fund was able to do significantly
better than which investors expected from mere random chance. Jensen (1968) developed a
classic study; an absolute measure of performance based upon the Capital Asset Pricing Model
and reported that mutual funds did not appear to achieve abnormal performance when transaction
costs were taken into account. Carlsen (1970) evaluated the risk-adjusted performance and
emphasized that the conclusions drawn from calculations of return depend on the time period,
type of fund and the choice of benchmark. Carlsen essentially recalculated the Jensen and Shape
results using annual data for 82 common stock funds over the 1948-67 periods. The results
contradicted both Sharpe and Jensen measures. Fama (1972) developed a methodology for
evaluating investment performance of managed portfolios and suggested that the overall
performance could be broken down into several components. John McDonald (1974) examined
the relationship between the stated fund objectives and their risks and return attributes. The study
concludes that, on an average the fund managers appeared to keep their portfolios within the
stated risk. Some funds in the lower risk group possessed higher risk than funds in the most risky
group. James R.F. Guy (1978) evaluated the risk-adjusted performance of UK investment trusts
through the application of Sharpe and Jensen measures. The study concludes that no trust had
exhibited superior performance compared to the London Stock Exchange Index. 31 Henriksson
(1984) reported that mutual fund managers were not able to follow an investment strategy that
successfully times the return on the market portfolio.
Again Henriksson (1984) conclude there is strong evidence that the funds market risk exposures
change in response to the market indicated. But the fund managers were not successful in timing
the market. Grinblatt and Titman (1989) concludes that some mutual funds consistently realize
abnormal returns by systematically picking stocks that realize positive excess returns. Richard A.
Ippolito (1989) concluded that mutual funds on an aggregate offer superior returns. But expenses
and load charges offset them. This characterizes the efficient market hypothesis. Ariff and
Johnson (1990) made an important study in Singapore and found that the performance of
Singapore unit trusts spread around the market performance with approximately half of the funds
performing below the market and another half performing above the market on a risk-adjusted
basis. Cole and IP (1993) investigated the performance of Australian equity trusts. The study
found evidence that portfolio managers were unable to earn overall positive excess risk-adjusted
returns. Vincent A. Warther(1995) in the article entitled “aggregate mutual fund flows and
security returns” concluded that aggregate security returns are highly correlated with concurrent
unexpected cash flows into MFs but unrelated to concurrent expected flows. The study resulted
in an unexpected flow equal to 1 percent of total stock fund assets corresponds to a 5.7 percent
increase in stock price index. Fund flows are correlated with the returns of 32 the securities held
by the funds, but not the returns of other types of securities. The study found an evidence of
positive relation between flows and subsequent returns and evidence of a negative relation
between returns & subsequent flows. Bansal’s book (1996) “mutual fund management &
working” included a descriptive study of concept of mutual funds, Management of mutual funds,
accounting & disclosure standards, Mutual fund schemes etc. Sujit sudhakar and Amrit pal singh
(1996) of Gawahati University studied the “Investment in Equity and Mutual Funds”. The study
attempted to highlight the investment decision vis. – a vis. (1) income earning (2) capital
appreciation and (3) tax benefits. The largest population of the survey was mainly urban
investing in corporate scrip’s and mutual funds. The period chosen was 1992-94. It is gathered
that the major investors of mutual funds are salaried & self employed people. This was
presumably due to tax concessions. The self employed professionally qualified practicing
persons have a higher investible surplus and they could take the risk of investing in stock market.
It was found that investors are very much conscious of diversification of their portfolios and they
preferred combination of mutual funds and equity shares. Another noteworthy finding is that
majority of the investors have become, interested in capital Market instruments only after
1985.Further 80 percent of the respondents have preferred either UTI & SBI mutual fund
schemes. Other mutual funds have not proved to be hit among the investing public in that part of
the country. Another important finding was that middle class investors being first generation
investors tend to hold their portfolio of comparatively longer period for tax benefits and capital
appreciation. 33 Sadhak’s book (1997) “Mutual funds in India, Marketing strategies and
investment practices” is highly analytical & thought provoking. Much research has gone into
writing of this book and hence highly useful to researchers. An attempt is made of the first time
in presenting Marketing strategies of Mutual funds. Verma’s book (1997) ‘Guide to mutual funds
& Investment portfolios of Indian mutual funds with some statistical data guidelines to the
investors in selection of schemes etc. National Council of Applied Economic Research (NCAER)
“Urban Saving survey” noticed that irrespective of occupation followed and educational level
and age attained, households in each group thought saving for the future was desirable. It was
found that desire to make provision for emergencies were a very important motive for saving for
old age. It is found out from the survey ‘Survey of Indian Investors’ conducted by NCEAR
(2000) and the regulatory authority SEBI, reported that Safety and liquidity were the primary
considerations which had determined the choice of an investment asset. In this paper NCAER
found out the Factors which influence individual the investment decision, is the difference in the
perception of Investors in the investing process on the basis of Age and the difference in
perception of the Investors on the basis of Gender. K. Pendaraki (2001) et al. studied
construction of mutual fund portfolios, developed a multi- criteria methodology and applied it to
the Greek market of equity mutual funds. The methodology is based on the combination of
discrete and continuous multi-criteria decision aid methods for mutual fund selection and
composition. UTADIS multi-criteria decision aid method is employed in order to develop mutual
fund’s performance 34 models. Goal programming model is employed to determine proportion
of selected mutual funds in the final portfolios.
Michael K. Berkowitz and Yehuda Katouritz (2002) in their paper examined the relationship
between the fees changes by mutual funds and their performance. The work distinguished
between high & low quality funds and sheds some additional light on the growing controversy
concerning the role of independent directors as monitors of the fee setting practices written the
funds. They found that for high quality managers, there is a positive relationship between fees &
performance. In contrast for lower Quality Managers, there is a negative relationship between
fees and performance. The authors believed this reflects the incentive for poor managers to
extract shorter benefits from investors as the likelihood of survival is lower for poor performing
managers. The results were consistent with the notion that the independent directors whose
responsibility is to safeguard the interest of shareholders may not be effective in doing so.
S.Narayan Rao (2003) et. al., evaluated performance of Indian mutual funds in a bear market
through relative performance index, riskreturn analysis, Treynor’s ratio, Sharpe’s ratio, Jensen’s
measure, and Fama’s measure. The study used 269 open-ended schemes (out of total schemes of
433) for computing relative performance index. Then after excluding funds whose returns are
less than risk-free returns, 58 schemes are finally used for further analysis. The results of
performance measures suggest that most of mutual fund schemes in the sample of 58 were able
to satisfy investor’s expectations by giving excess returns over expected returns based on both
premium for systematic risk and total risk

BOOK

“INVESTMENT” by BODIE, MARCUS,PITABAS MOHANTY

 Findings : To know ao ut the investments done in the market

JOURNALS & REPORTS

“PORTFOLIO OR GANSIER” OF ICFAI UNIVERSITY PRESS

Findings: Current k nowledge about mutual fund and equity
diversified market

“INVESTORS IN DIA” OF MOTILAL OSWAL SECURITIES

Findings: All infor mation about investment instruments

ECONOMIC TIMES

AMFI(BASIC MODULE)

Findings: complete knowledge about mutual funds

WEBSITES

www.mutufundsindia.com
www.amfiindia.com

www.mfea.com

Findings: complete k nowledge about mutual funds

www.sebigov.in
 Findings: Security Exchange Board of india’s home website ,which gives knowledge
about both mutual fu nds and equity diversified market

www.nse.com

Findings: To find out whether these funds are performing better or not with

Comparison to the benchmarks

www.bajajcapital.com

findings: Investors switch between different funds at diff erent times,and

dyanamically manag e their portfolio in order to achieve high returns. This task of
managing the mutual funds portfolio is done on their behalf by fund of funds.

CHAPTER-III
INDUSTRY PROFILE
Following diagram gives the structure of Indian Financial System:
FINANCIAL MARKET

Financial markets are helpful to provide liquidity in the system and for smooth functioning of
the system. These markets are the centers that provide facilities for buying and selling of financial
claims and services. The financial markets match the demands of investment with the supply of
capital from various sources.

According to functional basis financial markets are classified into two types.

They are:

 Money markets (short-term)

 Capital markets (long-term)
According to institutional basis again classified in to two types. They are

 Organized financial market

 Non-organized financial market.

The organized market comprises of official market represented by recognized institutions, bank
and government (SEBI) registered/controlled activities and intermediaries. The unorganized market
is composed of indigenous bankers, moneylenders, individual professional and non-professionals.

MONEY MARKET:
Money market is a place where we can raise short-term capital.

Again the money market is classified in to

 Inter bank call money market

 Bill market and
 Bank loan market Etc.
 E.g.; treasury bills, commercial papers, CD's etc.

CAPITAL MARKET:

Capital market is a place where we can raise long-term capital.

Again the capital market is classified in to two types and they are

 Primary market and

 Secondary market.
E.g.: Shares, Debentures, and Loans etc.

PRIMARY MARKET:

Primary market is generally referred to the market of new issues or market for mobilization of
resources by the companies and government undertakings, for new projects as also for expansion,
modernization, addition, diversification and up gradation. Primary market is also referred to as New
Issue Market. Primary market operations include new issues of shares by new and existing
companies, further and right issues to existing shareholders, public offers, and issue of debt
instruments such as debentures, bonds, etc.

The primary market is regulated by the Securities and Exchange Board of India (SEBI a
government regulated authority).

Function:

The main services of the primary market are origination, underwriting, and distribution.
Origination deals with the origin of the new issue. Underwriting contract make the shares
predictable and remove the element of uncertainty in the subscription. Distribution refers to the sale
of securities to the investors.

The following are the market intermediaries associated with the market:

1.Merchant banker/book building lead manager

2.Registrar and transfer agent
3.Underwriter/broker to the issue
4.Adviser to the issue
5.Banker to the issue
6.Depository
7.Depository participant.

Investors’ protection in the primary market:

To ensure healthy growth of primary market, the investing public should be protected. The term
investor protection has a wider meaning in the primary market. The principal ingredients of
investors’ protection are:

 Provision of all the relevant information

 Provision of accurate information and
 Transparent allotment procedures without any bias.

SECONDARY MARKET
The primary market deals with the new issues of securities. Outstanding securities are traded in
the secondary market, which is commonly known as stock market or stock exchange. “The
secondary market is a market where scrip’s are traded”. It is a market place which provides liquidity
to the scrip’s issued in the primary market. Thus, the growth of secondary market depends on the
primary market. More the number of companies entering the primary market, the greater are the
volume of trade at the secondary market. Trading activities in the secondary market are done
through the recognized stock exchanges which are 23 in number including Over The Counter
Exchange of India (OTCE), National Stock Exchange of India and Interconnected Stock Exchange of
India.

Secondary market operations involve buying and selling of securities on the stock exchange
through its members. The companies hitting the primary market are mandatory to list their shares
on one or more stock exchanges in India. Listing of scrip’s provides liquidity and offers an
opportunity to the investors to buy or sell the scrip’s.

The following are the intermediaries in the secondary market:

1. Broker/member of stock exchange – buyers broker and sellers broker

2. Portfolio Manager
3. Investment advisor
4. Share transfer agent
5. Depository
6. Depository participants.

STOCK MARKETS IN INDIA:

Stock exchanges are the perfect type of market for securities whether of government and semi-
govt bodies or other public bodies as also for shares and debentures issued by the joint-stock
companies. In the stock market, purchases and sales of shares are affected in conditions of free
competition. Government securities are traded outside the trading ring in the form of over the
 counter sales or purchase. The bargains that are struck in the trading ring by the members of the
stock exchanges are at the fairest prices determined by the basic laws of supply and demand.

Definition of a stock exchange:

“Stock exchange means any body or individuals whether incorporated or not, constituted for the
purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities.”
The securities include:

 Shares of public company.

 Government securities,Bonds

History of Stock Exchanges:

The only stock exchanges operating in the 19 th century were those of Mumbai setup in 1875
and Ahmedabad set up in 1894. These were organized as voluntary non-profit-marking associations
of brokers to regulate and protect their interests. Before the control on securities under the
constitution in 1950, it was a state subject and the Bombay securities contracts (control) act of 1925
used to regulate trading in securities. Under this act, the Mumbai stock exchange was recognized in
1927 and Ahmedabad in 1937. During the war boom, a number of stock exchanges were organized.
Soon after it became a central subject, central legislation was proposed and a committee headed by
A.D.Gorwala went into the bill for securities regulation. On the basis of the committee’s
recommendations and public discussion, the securities contract (regulation) act became law in 1956.

Functions of Stock Exchanges:

Stock exchanges provide liquidity to the listed companies. By giving quotations to the listed
companies, they help trading and raise funds from the market. Over the hundred and twenty years
during which the stock exchanges have existed in this country and through their medium, the
central and state government have raised crores of rupees by floating public loans. Municipal
corporations, trust and local bodies have obtained from the public their financial requirements, and
industry, trade and commerce- the backbone of the country’s economy-have secured capital of
crores or rupees through the issue of stocks, shares and debentures for financing their day-to-day
activities, organizing new ventures and completing projects of expansion, diversification and
modernization. By obtaining the listing and trading facilities, public investment is increased and
companies

were able to raise more funds. The quoted companies with wide public interest have
enjoyed some benefits and assets valuation has become easier for tax and other purposes.

Various Stock Exchanges in India:

At present there are 23 stock exchanges recognized under the securities contracts (regulation), Act,
1956. Those are:

Ahmedabad Stock Exchange Association Ltd.

Bangalore Stock Exchange

Bhubaneshwar Stock Exchange Association

Calcutta Stock Exchange

Cochin Stock Exchange Ltd.

Coimbatore Stock Exchange

Delhi Stock Exchange Association

Guwahati Stock Exchange Ltd

Hyderabad Stock Exchange Ltd.

 Jaipur Stock Exchange Ltd

Kanara Stock Exchange Ltd

Ludhiana Stock Exchange Association Ltd

Madras Stock Exchange

Madhya Pradesh Stock Exchange Ltd.

Magadh Stock Exchange Limited

Meerut Stock Exchange Ltd.

Mumbai Stock Exchange

National Stock Exchange of India

OTC Exchange of India

Pune Stock Exchange

Uttar Pradesh Stock Exchange Association

Vadodara Stock Exchange Ltd.

Out of these major stock exchanges were:

NSE(NATIONAL STOCK EXCHANGE):

The National Stock Exchange of India Limited has genesis in the report of the High Powered
Study Group on Establishment of New Stock Exchanges, which recommended promotion of a
National Stock Exchange by financial institutions (FI’s) to provide access to investors from all across
the country on an equal footing. Based on the recommendations, NSE was promoted by leading
Financial Institutions at the behest of the Government of India and was incorporated in November
1992 as a tax-paying company unlike other stock exchanges in the country. On its recognition as a
stock exchange under the Securities Contracts (Regulation) Act, 1956 in April 1993, NSE commenced
operations in the Wholesale Debt Market (WDM) segment in June 1994. The Capital Market
 (Equities) segment commenced operations in November 1994 and operations in Derivatives segment
commenced in June 2000 NSE's mission is setting the agenda for change in the securities markets in
India. The NSE was set-up with the main objectives of:

 Establishing a nation-wide trading facility for equities and debt instruments.

 Ensuring equal access to investors all over the country through an appropriate communication
network.

 Providing a fair, efficient and transparent securities market to investors using electronic trading
systems.

 Enabling shorter settlement cycles and book entry settlements systems, and

 Meeting the current international standards of securities markets.

The standards set by NSE in terms of market practices and technology, have become industry
benchmarks and are being emulated by other market participants. NSE is more than a mere
market facilitator. It's that force which is guiding the industry towards new horizons and
greater opportunities.

BSE(BOMBAY STOCK EXCHANGE):

The Stock Exchange, Mumbai, popularly known as "BSE" was established in 1875 as
"The Native Share and Stock Brokers Association". It is the oldest one in Asia, even older
than the Tokyo Stock Exchange, which was established in 1878. It is a voluntary non-profit
making Association of Persons (AOP) and is currently engaged in the process of converting
itself into demutualised and corporate entity. It has evolved over the years into its present
status as the premier Stock Exchange in the country. It is the first Stock Exchange in the
Country to have obtained permanent recognition in 1956 from the Govt. of India under the
Securities Contracts (Regulation) Act 1956.The Exchange, while providing an efficient and
transparent market for trading in securities, debt and derivatives upholds the interests of the
investors and ensures redresses of their grievances whether against the companies or its own
member-brokers. It also strives to educate and enlighten the investors by conducting investor
education programmers and making available to them necessary informative inputs.
 A Governing Board having 20 directors is the apex body, which decides the policies and
regulates the affairs of the Exchange. The Governing Board consists of 9 elected directors,
who are from the broking community (one third of them retire ever year by rotation), three
SEBI nominees, six public representatives and an Executive Director & Chief Executive
Officer and a Chief Operating Officer.

The Executive Director as the Chief Executive Officer is responsible for the day-to-day
administration of the Exchange and the Chief Operating Officer and other Heads of
Department assist him.

The Exchange has inserted new Rule No.126 A in its Rules, Byelaws pertaining to
constitution of the Executive Committee of the Exchange. Accordingly, an Executive
Committee, consisting of three elected directors, three SEBI nominees or public
representatives, Executive Director & CEO and Chief Operating Officer has been constituted.
The Committee considers judicial & quasi matters in which the Governing Board has powers
as an Appellate Authority, matters regarding annulment of transactions, admission,
continuance and suspension of member-brokers, declaration of a member-broker as defaulter,
norms, procedures and other matters relating to arbitration, fees, deposits, margins and other
monies payable by the member-brokers to the Exchange, etc.

Regulatory Frame Work Of Stock Exchange

A comprehensive legal framework was provided by the “Securities Contract
Regulation Act, 1956” and “Securities Exchange Board of India 1952”. Three tier regulatory structure
comprising

 Ministry of finance
 The Securities And Exchange Board of India
 Governing bond

Members of the stock exchange:

 The securities contract regulation act 1956 has provided uniform regulation for the
admission of members in the stock exchanges. The qualifications for becoming a member of a
recognized stock exchange are given below:

 The minimum age prescribed for the members is 21 years.

 He should be an Indian citizen.
 He should be neither a bankrupt nor compound with the creditors.
 He should not be convicted for fraud or dishonesty.
 He should not be engaged in any other business connected with a company.
 He should not be a defaulter of any other stock exchange.
 The minimum required education is a pass in 12 th standard examination.

STOCK EXCHANGE BOARD OF INDIA (SEBI)

The securities and exchange board of India was constituted in 1988 under a resolution of
government of India. It was later made statutory body by the SEBI act 1992.according to this act, the
SEBI shall constitute of a chairman and four other members appointed by the central government.

With the coming into effect of the securities and exchange board of India act, 1992 some of the
powers and functions exercised by the central government, in respect of the regulation of stock
exchange were transferred to the SEBI.

OBJECTIVES AND FUNCTIONS OF SEBI

 To protect the interest of investors in securities.

 Regulating the business in stock exchanges and any other securities market.
 Registering and regulating the working of intermediaries associated with securities market as
well as working of mutual funds.

 Promoting and regulating self-regulatory organizations.

 Prohibiting insider trading in securities.

 Regulating substantial acquisition of shares and take over of companies.

 Performing such functions and exercising such powers under the provisions of capital issues
(control) act, 1947and the securities to it by the central government.

SEBI GUIDELINES TO SECONDARY MARKETS: (STOCK EXCHANGES):

 Board of Directors of Stock Exchange has to be reconstituted so as to include non-members,

public representatives and government representatives to the extent of 50% of total number of
members.

 Capital adequacy norms have been laid down for the members of various stock exchanges
depending upon their turnover of trade and other factors.

 All recognized stock exchanges will have to inform about transactions within 24 hrs.

TYPES OF ORDERS:
 Buy and sell orders placed with members of the stock exchange by the investors. The orders are
of different types.

Limit orders:

Orders are limited by a fixed price. E.g. ‘buy Reliance Petroleum at Rs.50.’Here, the order has
clearly indicated the price at which it has to be bought and the investor is not willing to give more
than Rs.50.

Best rate order:

Here, the buyer or seller gives the freedom to the broker to execute the order at the best
possible rate quoted on the particular date for buying. It may be lowest rate for buying and highest
rate for selling.

Discretionary order:

The investor gives the range of price for purchase and sale. The broker can use his discretion to
buy within the specified limit. Generally the approximation price is fixed. The order stands as this
“buy BRC 100 shares around Rs.40”.

Stop loss order:

The orders are given to limit the loss due to unfavorable price movement in the market. A
particular limit is given for waiting. If the price falls below the limit, the broker is authorized to sell
the shares to prevent further loss. E.g. Sell BRC limited at Rs.24, stop loss at Rs.22.

Buying and selling shares:

 To buy and sell the shares the investor has to locate register broker or sub broker who render
prompt and efficient service to him. The order to buy or sell specifying the number of shares of the
company of investors’ choice is placed with the broker. The order may be of any type. After receiving
the order the broker tries to execute the order in his computer terminal. Once matching order is
found, the order is executed. The broker then delivers the contract note to the investor. It gives the
details regarding the name of the company, number of shares bought, price, brokerage, and the date
of delivery of share. In this physical trading form, once the broker gets the share certificate through
the clearing houses he delivers the share certificate along with transfer deed to the investor. The
investor has to fill the transfer deed and stamp it. The stamp duty is one of the percentage
considerations, the investor should lodge the share certificate and transfer deed to the register or
transfer agent of the company. If it is bought in the DEMAT form, the broker has to give a matching
instruction to his depository participant to transfer shares bought to the investors account. The
investor should be account holder in any of the depository participant. In the case of sale of shares
on receiving payment from the purchasing broker, the broker effects the payment to the investor.

Share groups:

The scrips traded on the BSE have been classified into ‘A’,’B1’,’B2’,’C’,’F’ and ‘Z’ groups. The ‘A’
group represents those, which are in the carry forward system. The ‘F’ group represents the debt
market segment (fixed income securities). The Z group scrips are of the blacklisted companies. The
‘C’ group covers the odd lot securities in ‘A’, ‘B1’&’B2’ groups.

COMAPNY PROFILE
 Mr. Motilal Oswal

Chairman and Managing Director

Mr. Motilal Oswal is the promoter of Motilal

Oswal Securities Ltd. He is a member of Institute of Chartered Accountants of
India and started the business along with the co-promoter Mr. Raamdeo Agarwal
in 1987.Business Administration is his forte, Honesty, transparency and client
goodwill form the core of his business practice.

“Service is required in everything, in research, in execution and in settlement. It is

going to be the key to survival. If you give good service and value to your clients, it
ill translates into good business.”

This has been a strong belief of Mr. Motilal Oswal and he has not only practiced it
himself but also made efforts to inculcate similar values in the employees of the
organization.

He had been elected as a Director of BSE and joined its governing board in 1998.
He is currently a member of various committees of CDSIL and SEBI. He is currently
a member of the NSE committee for F&O.
Mr. Raamdeo Agrawal

Joint Managing Director

Mr. Raamdeo Agrawal is the man behind the strong research capabilities at
Motilal Oswal Financial Services Ltd. He is an Associate of Institute of Chartered
Accountants of India and also a member of the National Committee on Capital
Markets of the Confederation of Indian Industry.

Mr. Agrawal specialises in equity research. He has been authoring the annual
Motilal Oswal Wealth Creation Study since its inception in 1996. In 1986, he wrote
the book ‘Corporate Numbers Game’, along with co-author, Mr. Ram K Piparia. He
has also featured on 'Wizards of Dalal Street on CNBC TV 18'.

Mr. Agrawal has received the "Rashtriya Samman Patra" awarded by the
Government of India for being amongst the highest Income Tax payers in the
country for a period of 5 years from FY95–FY99.

Mr. Navin Agrawal

Director Mr. Navin Agarwal is on the Board of Motilal Oswal Financial Services
Limited. He is a member of Institute of Chartered Accountants of India, Institute of
Cost & Works Accountants of India, and Institute of Company Secretaries of India.
He heads the Institutional Broking business and has been instrumental in building
a market leading position with domestic and foreign institutional investors. Under
his leadership, the firm has been rated as The Best Indian Brokerage House by Asia
money 2005. Leveraging on the dominant positioning in institutional business, he
has also been instrumental in building an Institutional Derivatives business when
derivative products were introduced in the Indian markets. Here again, a market
leading position has been established by MOSL.
Mr.AshutoshMaheshwari
CEO – MOIAPL

Mr. Ashutosh Maheshvari holds a bachelor's degree in technology (Chemical

Engineering) from the Indian Institute of Technology, Kharagpur. He has also done
his Masters in Business Administration from University of Delhi.

Prior to joining our Company, he was the Executive Director with Rabo India
Finance Private Limited.

Mr. Maheshvari has 13 years of experience in the financial

sector and has held various senior positions. Previously, he
has worked with CRISIL and ICI India Limited.
Mr.Vishal Tulsyan
CEO - MOPEAPL

Mr. Vishal Tulsyan holds a bachelor's degree in commerce from St. Xaviers College,
Kolkata University, and is a professionally qualified Chartered Accountant from
The Institute of Chartered Accountants of India. He is an all-India rank holder in
Chartered Accountancy.

Prior to joining MOFSL, Mr. Tulsyan was Director, Corporate Finance with Rabo
India Finance Private Limited, a subsidiary of Rabo bank International. He has over
10 years of experience in corporate finance and has held various senior positions.

Previously, he worked with SBI Capital Markets Limited, Mumbai and ANZ Grind
lays Bank Limited, Kolkata
Mr.Rajat Rajgarhia
Director – Research

Mr. Rajat Rajgarhia started his career with his family run broking business in
equities.

Post completing his CA and MBA, he joined Indiainfoline for a short stint in the
research function. He joined Motilal Oswal in 2001 as a research analyst.

Mr. Rajgarhia then went on to head the research team and now has been
associated with MOSL for over 7 years.
Mr. Rajesh Dharamshi

Director - Institutional Trading

Mr. Rajesh Dharamshi started his career with Hemendra R Sheth (Member of BSE
& NSE) and went on to a very long stint with group. He was Head of Institution of
HRS from 2000-2002.

He than moved on as Sr. VP - Institution Sales Equity & Derivatives for Refco (Now
MF Global).Mr.Dharamshi joined Motilal Oswal as Head of Institutional Derivatives
in 2003.

He currently heads Institutional Trading (Cash & Derivatives) at MOSL. He is also a

Director on the board of Motilal Oswal Commodities Broker Pvt Ltd & Motilal
Oswal Capital Markets Pvt Ltd.
Mr.JayeshParekh
Director - Institutional Sales

Mr. Jayesh Parekh began his career with ICICI as a management trainee after
securing ranks in Intermediate and Final exams of Chartered Accountancy. After
ICICI, he joined Anand Rathi group and worked in different functions including
corporate advisory and equity research. Post Anand Rathi Securities, he joined
SMIFS Securities and worked for 5 years as head of research.

Mr. Parekh joined Motilal Oswal in 2003. He was rated #1 sales person for India in
the Asia Money Brokers poll for 2 consecutive years in 2006 and 2007. Mr. Parekh
is Head of Institution Sales for MOSL
Mr.ManishShah
AssociateDirector,
BusinessStrategyand
Product Development

Mr. Manish Shah is a graduate from the Institute of Cost and Work Accountants of
India and a Certified Financial Analyst from the Institute of Chartered Financial
Analysts of India.

Mr. Shah had a brief stint with a proprietary firm KG Vora in 1991, where he was
involved in developing the IPO Business. In June 1992, he joined Info -Invest
Group as Research Analyst and later was responsible for developing the
Institutional and Retail business. He then worked as a manager at Mafatlal
Securities Ltd from July 1995.

Mr. Shah joined MOSL in 1999. He currently heads the Equity business and is also
responsible for Business Strategy and Product Development.
Mr.NitinRakesh
CEO, Asset Management Business

Mr. Nitin Rakesh has over 13 years of experience in the Financial Services industry.
His last role was as the CEO and Executive Director of State Street Syntel Services,
the JV between State Street Bank (NYSE: STT) & Syntel (NASD: SYNT). In addition,
he has held various positions in organizations such as TCG Investments and Unit
Trust of India (UTI Mutual Fund). Mr. Rakesh is a B.E. (Computers), Delhi College of
Engineering & an MBA (Finance), NMIMS, Mumbai.

Mr. Rakesh heads the Asset Management Business.

Strong Management Team:-

The organization finds its strength in its team of young, talented and confident
individuals. Qualified professionals carry out different functions under the able
leadership of its promoters, Mr. Motilal Oswal and Mr. Raamdeo Agrawal. Our
talented pool of people comprises qualified and experienced professionals with an
established track record. We believe that our management's entrepreneurial
spirit, strong technical expertise, leadership skills, insight into market/customer
needs provide us with a competitive strength which will help us implement our
business strategies.

Training & Manpower Development:-

MOSL conducts various training and development programs regularly to enhance

the capabilities of its team. As much as 5% of the salary bill is spent on such
programs, which is amongst the highest for a broking organization in India. MOSt
is truly a learning organization with lead being taken by the Directors, who
regularly participate in top management learning programs like Strategic
Management Program at Indian School of Business, Hyderabad, Strategy Summits
with Management Gurus like Tom Peters and Dr. Lester Thurow, Dean, Sloan
School of Management, (MIT) and Brand Management Seminar by Al Ries etc.
Focus on Research:-

Research is the solid foundation on which Motilal Oswal Securities advice is based.
Almost 10% of revenue is invested on equity research and we hire and train the
best resources to become advisors. At present we have 22 equity analysts
researching over 27 sectors. From a fundamental, technical and derivatives
research perspective; Motilal Oswal's research reports have received wide
coverage in the media (over a 1000 mentions last year). Our consistent efforts
towards quality equity research have reflected in an increase in the ratings and
rankings across various categories in the Asia Money Brokers Poll over the years.

Our unique Wealth Creation Study, authored by Mr. Raamdeo Agrawal, Managing
Director, is now in its 13th year. Investors keenly await this annual study for the
wealth of information it has on the companies that created wealth during the
preceding five years.

Awards and Accolades:-

Motilal Oswal Financial Services has received many accolades in the year gone
by. Some of them are:

 Rated ‘Best Overall Country Research’ for a Local Brokerage in the 2007 Asia
Money Brokers poll
 Rated India’s top broking house in terms of total number of trading
terminals by the Dun & Bradstreet survey
 Rated ‘Outstanding Commodity Broking House-2007’ by Globoil India
 Ranked second best for Customer Responsiveness in the Financial Sector at
the Avaya Global Connect Customer Responsiveness awards

MOSL & SUBSIDERIES COMPANIIES

 Motilal Oswal Financial Services Ltd.

3rd Floor, Hoechst House,
Nariman Point, Mumbai - 400 021.
Board: + 91 – 022 - 39825500/ 39825540.
Fax: + 91 – 022 - 22823499

 Motilal Oswal Securities Ltd. – Wealth Management

3rd Floor, Hoechst House,

Nariman Point, Mumbai - 400 021.
Board: + 91 – 022 - 39825500.
Fax: + 91- 022- 22823499.

 Motilal Oswal Securities Ltd. - Institutional Equity

4th Floor, Hoechst House,
Nariman Point, Mumbai - 400 021.
Board: + 91 – 022 - 39825550
Fax: + 91 – 022 - 22883821 / 22885038.

 Motilal Oswal Private Equity Advisors Pvt. Ltd.

3rd Floor, Hoechst House,
Nariman Point, Mumbai - 400 021.
Board : + 91–022-39825500/39825540.
Fax : +91–022-22823499.

 Motilal Oswal Investment Advisors Pvt. Ltd.

112/113, 11th Floor, Bajaj Bhawan,
Nariman Point, Mumbai - 400 021.
Board : + 91 – 022 - 39804380
Fax: + 91 – 022 - 39804315.

 Motilal Oswal Commodities Broker Pvt. Ltd.

81/82, Bajaj Bhawan,

Nariman Point, Mumbai - 400 021.
Board: + 91 – 022 - 39804200/ 01
Fax: + 91 – 022 - 22816161.
 SERVICES PROVIDING BY MOSL
MOSL’S businesses and primary products and services are:

 Wealth Management
 Broking & Distribution
 Commodity Broking
 Portfolio Management Services
 Fixed Deposits and Bonds
 Institutional Equities
 Private Equity
 Investment Banking Services and
 Principal Strategies

Wealth Management:-
Financial planning for individual, family and business wealth creation and
management needs. These are provided to customers through our Wealth
Management service called ‘Purple’

Broking & Distribution Services:-

 Equity (cash and derivatives)
 Commodity Broking
 Portfolio Management Services
 Distribution of financial products
 Financing
 Depository Services
 IPO distribution
We offer these services through our branches, Business Partner locations, the
internet and mobile channels. We also have strategic tie-ups with State Bank of
India and IDBI Bank to offer our online trading platform to its customers.

Commodity Broking:-

Through Motilal Oswal Commodities Broker (P) Ltd our fully owned subsidiary; we
provide commodity trading facilities and related products and services on MCX
and NCDEX. Besides access to the best of research in the form of Daily
Fundamentals & Technical Reports on highly traded commodities, our clients also
get access to our exclusive Customized Trading Advice on both the trading
platforms. We offer these services through our branches, Business Partner
locations, the internet and mobile channels

Portfolio Management Services :-

Motilal Oswal Portfolio Management Services offer a range of investments

solutions through discretionary services. We at Motilal Oswal have helped create
wealth for our customers through our Portfolio Management Services. Our
knowledge of the markets together with our understanding of our customers and
their risk profiles has helped us design a range of portfolio offerings for our clients.
These include the Value Strategy, Bulls Eye Strategy, Trillion Dollar Opportunity
Strategy and Focused Strategy Series I. As of March 31st, 2009, the Assets Under
Management of our various portfolio schemes stood at Rs.4.77 bn.
Motilal Oswal group has applied to the regulatory bodies for a license to operate
as a Domestic Asset Management Company (Mutual Fund) and we expect to
begin operations soon.

Fixed Deposits and Bonds:-

Motilal Oswal group has worked on fixed deposits and bonds which have issued
by the various companies. Such fixed deposits and bonds have used by the
companies to fulfill their capital needs only. Motilal Oswal Securities Ltd. has
offered safety and securities of the investment, invested by he investors.Anybody
can enter/ exit in/from the fixed deposit and bonds schemes.

Institutional Equities:-

We offer equity broking services in the cash and derivative segments to

institutional clients in India and overseas. These clients include companies, mutual
funds, banks, financial institutions, insurance companies, and FIIs. As at March
31st, 2009, we were empanelled with over 300 institutional clients including 200
FIIs. We service these clients through dedicated sales teams across different time
zones.
Investment Banking:-

We offer financial advisory services relating to mergers and acquisitions (domestic

and cross-border), divestitures, restructurings and spin-offs through Motilal Oswal
Investment Advisors Private Ltd. (MOIAPL)

We also offer capital raising and other investment banking services such as the
management of public offerings, private placements (including qualified
institutional placements), rights issues, share buybacks, open offers/delistings and
syndication of debt and equity.

MOIAPL has closed 23 transactions in 2015-16 worth US$ 1.8 billion and had 18
mandates in hand as at March 31, 2016.

Private Equity:-

In 2006, our private equity subsidiary, Motilal Oswal Private Equity Advisors
Private Ltd (MOPEAPL) was appointed as the investment manager and advisor to a
private equity fund, India Business Excellence Fund, which was launched with a
target of raising US$100 mn. The fund is aimed at providing growth capital to
small and medium enterprises in India, with investments typically in the range of
US$3 mn to US$7 mn.
MOPEAPL will manage and advise the fund and other private equity funds, which
may be raised in the future. In its final closing, in December 2007, the fund
obtained commitments of US$125 mn (Rs.4, 875 mn) from investors in India and
overseas. The Fund has deployed/ committed $ 58 mn across 8 deals.
MOPEAPL has recently launched an INR 750 crores domestic Real Estate Private
Equity Fund called “India Realty Excellence Fund” sponsored by Motilal Oswal
Financial Services Ltd.

Principal Strategies Group:-

For effective management of treasury operations and to capitalize on market

opportunities, the Group has set up a 30 member team which would be
responsible for effective deployment of funds into different trading and arbitrage
strategies.

Chapter-IV

 MUTUAL FUNDS (Description & Classification)

Mutual funds

Mutual Fund is an instrument of investing money. Nowadays, bank rates have fa llen down and
are generally below the inflation rate. Therefore, keeping large amounts of mone y in bank is not
a wise option, as in real terms th e value of money decreases over a period of time.

One of the options is to invest the money in stock market. But a common investor is
not informed and competent enough to understand the intricacies of stock market. This is where
mutual funds come to the rescue.
 A mutual fund is a group of investors operating through a fu nd manager to purchase
a diverse portfolio of s tocks or bonds. Mutual funds are highly cost eff icient and very easy to
invest in. By pooling money together in a mutual fund, investors can purchase stocks or bonds
with much lower trading c osts than if they tried to do it on their own. Mutual fund issues units
to the investors in accordance with quantum of money invested by the m. Investors of mutual
funds are known as “Unitholders”.

The profits or losses are shared by the investors in proportion to the ir investments.
The mutual funds normally co me out with a number of schemes with different investment
objectives, which are launched from time to time. A mutual fund is required to be registered with
Securities and Exchange B oard of India (SEBI) which regulates securities markets before it can
collect funds from the public.

Investments may be in stocks, bonds, money market securities or so me combination

of these. Those securities are professionally & efficiently managed on behalf of the shareholders,
and each investor holds a pro rata share of the portfolio -- entitle d to any profits when the
securities are s old, but subject to any losses in value as well.

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

allows a group of investors to pool their money together with a predetermi ned investment
objective. The mutual fund will have a fund manager who is responsible for investing the
gathered money into specific se curities (stocks or bonds). When you invest in a mutual fund,
you are buying units or porti ons of the mutual fund and thus on investi ng becomes a
shareholder or unit holder of the fund. The investors profit and loss are determ ined as per the
units of mutual funds they hold as per the NAVs.

NAV = Total value of the fund……………….

No. of shares c urrently issued and outstanding
History of the Indian mut ual fund industry:

The government of India set up Unit Trust of India in 1963 by an act on parliament. UTI
functioned under the regulatory and administrative control of the Reserve B ank of India till
1978. The Industrial Development Bank of India took over the regulatory an d administrative
control that year. The first schem e launched by UTI was Unit Scheme 1964 or t he infamous
Unit 64. The second phase of the mu tual fund industry began with the public sector banks and
Life Insurance Corporation of India a nd General Insurance Corporation of India sett ing up their
own mutual funds in 1987. Finally, in 1993 Kothari Pioneer (now merged with Fra nklin
Templeton) became the first private sector mutual fund to start operations in the country. A host
of private sector as well as foreign funds set up shop after that. In 1996, a comprehensive and
revised Mutual Fund regulation was put in place. The industry now functions under Se bi
(Mutual Fund)
regulations, 1996.

The industry faced its toughest challenge when the US 64 fiasco shattered t he confidence of
investors. However, in 2003, th e government bifurcated the erstwhile UTI. One entity manages
the assets of US 64 and some ass ured return schemes. The other is a regular mutual fund
working under the Sebi regulations. Thanks to the boom in the stock market, UTI managed to
clean up its act and continue to enjoy the confidence of several investors. The whole indust ry
also came out of the controversy without any m ajor setbacks.

C ategories of mutual funds:

Mutual funds can be classified a s follow:

Based on their structure:

Open-ended funds: Investors can buy and sell the units from the fund, at any point of
time.

Close-ended funds: Thes e funds raise money from investors only once. T herefore, after the
offer period, fresh inv estments can not be made into the fund. If the fund is listed on a stocks
exchange the units can be traded like stocks (E.g., Morgan Stanle y Growth Fund). Recently,
most of the New Fund Offers of close-ended funds provided li quidity window on a periodic
basis such a s monthly or weekly. Redemption of units can be made during

specified intervals. Therefore, such funds have relatively low liquidity.

Debt fund: They invest only in debt instruments, and are a good option for investors averse to
idea of taking risk associated with equities. Therefore, they invest exclusively in fixed-income
instruments like bonds, deben tures, Government of India securities; and money market
instruments such as certificates of deposit (CD), commercial paper (CP) and call money. Put
your money into any of these de bt funds depending on your investment horizon and needs.

i) Liquid funds- These funds invest 100% in money market instruments, a large portion being
invested in call money market.

ii)Gilt funds ST- They invest 10 0% of their portfolio in government securities of and T-bills.

iii)Floating rate funds - Invest in short-term debt papers. Floaters invest in debt instruments
which have variable coupon rate.

iv)Arbitrage fund- They genera te income through arbitrage opportunities due to mis-pricing
between cash market and derivatives market. Funds are allocated to equities, derivatives and
money markets. Higher proportion (around 75%) is put in money markets, in the absence of
arbitrage opportunities.

v)Gilt funds LT- They invest 10 0% of their portfolio in long-term government s ecurities.

vi) Income funds LT- Typically, such funds invest a major portion of the portfolio in long-term
debt papers.

vii) MIPs- Monthly Income Pla ns have an exposure of 70%-90% to debt an d an exposure of
10%-30% to equities.

viii)FMPs- fixed monthly plans invest in debt papers whose maturity is in lin e with that of the
fund.
 Risk v/s. return:

Working of mutual fund

 EQUITY DIVERSIFIED MU TUAL FUNDS AND ITS PERFORMA
NCE
 HOW TO SE LECT AN EQUITY DIVERSIFIED FUND
 DATA ANAL YSIS AND INTERPRETATION
 FINDINGS
 CONCLUSION

Equity diversified funds

Equity diversified mutual funds are also known as stock mutual funds. Equity diversified
mutual fu nds invest pooled amounts of money in the sto cks of public companies. Stock
funds can be distinguished by several properties. Funds ma y have a specific style, for
example, value o r growth Stocks represent part ownership, or equity diversified, in
companies, and the aim of stock owne rship is to see the value of the companies increase
over time. Stocks are often categorized by their market capitalization (or caps), and c an be
classified in three basic sizes: small, me dium, and large. Many mutual funds invest
primarily in companies of one of these sizes and a re thus classified as large-cap, mid-cap
or sm all-cap funds. Funds which involve some com ponent of stock picking are said to be
actively managed, whereas index funds try as well as p ossible to mirror specific stock
market indices

Equity diversified fund managers employ different styles of stock picking when they make
investment decisions for their portfolios. Some fund managers use a value approach to
stocks, searching for stocks that are undervalued when compared to other similar
companies. Another approach to picking is to look primarily at growth, trying to find
stocks that are gro wing faster than their competitors, or the market as a whole. Some
managers buy both kinds of stocks, building a portfolio of both growth an d value stocks.
Since equity diversified funds invest in stocks, they have the potential to generate more ret
urns. On the other hand they carry greater risks too.

Fund assets are typically mainly in stock, with some amount of cash, which is generally
quite small, as opposed to bonds, notes, or other securities. The objective of an eq uity fund
is long-term growth through capital gains, although historically dividends hav e also been
 an important source of total retu rn. Specific equity diversified funds may focus on a
certain sector of the market or may be geared towa rd a certain level of risk.
Equ ity funds are of following types –
Index funds -

Index funds invest in securities to mirror a market index, such as the S&P 500.
An index fund buys and sells sec urities in a manner that mirrors the compositio n of the
selected index. The fund's performa nce tracks the underlying index's performance.
Turnover of securities in an index fund's portfolio is minimal. As a result, an index fund
generally has lower management costs than other types of fund Index Funds replicate the
portfolio of a particular index such as the BSE Sensitive index, S&P NSE 50 index (Nifty),
etc these schemes invest in the securi ties in the same weight age comprising of an index.
NAVs of such schemes would rise or fall in accordance with the rise or fall in the index,
though not exactly by the same percentage due to some factors known as “ tracking error”
in technical terms. Necessary disclosures in this regard are made in the offer document of
the mutual fund scheme. There are also excha nge traded index funds launched by the
mutual funds, which are traded on the stock exchanges.
 TOP 10 OPEN ENDED INDEX FUNDS

Rank Scheme Nam e Date NAV Last 1 2 Since

(Rs.) Mont hs Inception

1 HDFC Index Fund - Se nsex Plus Jun 18 , 2016 161.71 -1.29 26.26
Plan
2 ICICI Prudential Index Fund Jun 18 , 2016 39.47 -4.86 20.65

3 LIC MF Index Fund - Sensex Jun 18 , 2016 25.51 -6.5 16.4

Advantage Plan - Grow th

Birla Sun Life

4 Index F und - Jun 18 , 2016 42.56 -7.19 23.92
Growth
5 ING Nifty Plus Fund - Growth Jun 18 , 2016 21.21 -7.34 15.18

Franklin India
6 Index Fund - NSE Jun 18 , 2016 33.48 -7.38 19.37
Nifty Plan - Growth

7 HDFC Index Fund - Nifty Plan Jun 18 , 2016 37.74 -7.38 20.58

8 Franklin India Index Fund - BSE Jun 18 , 2016 40.04 -7.51 19.16
Sensex Plan - Growth

Canara Robeco
9 Nifty I ndex - Jun 18 , 2016 22.62 -7.52 18.98
Growth
10 UTI Nifty Fund - Grow th Jun 18 , 2016 26.67 -7.65 11.06

Growth funds - A gro wth fund invests in the stocks of companies that are growing rapidly.
Growth companies tend to reinvest all or most of their profits for research and development
rather than pay dividends. Growth funds are focused on generating capital gains rather than
income.
Growth funds are t hose mutual funds that aim to achieve capita l appreciation by
investing in growth stocks . They focus on those companies, which are experiencing
significant earnings or revenue growth, rather than companies that pay out dividends. Growth
funds tend to look for the f astest-growing companies in the market. Gro wth managers are
willing to take more risk and pay a premium for their stocks in an effort to b uild a portfolio of
companies with above-average earnings momentum or pric e appreciation.
 In India, growth fun ds became popular after the tremendous gro wth of the Indian
companies during the post economic reforms period. The rapid growth o f Indian industry
attracted investors’ money t o sectors of high growth and as a result growt h funds came into
being.

Objective of Growth Funds

The objective of growth fund s is to achieve capital appreciation by in stocks of those

companies, which are registering significant earnings or revenue growth. Gr owth funds
offer tremendous opportunities for growth, when the financial market is bullish.

In general, growth funds are more volatile than other types of funds, rising m ore than
other funds in bull markets and falling more in bear markets. Only aggressive investors, or
those with enough time to make up for short-term market losses, should buy these funds.

Dividend Yield Funds or Value Funds -

This is a fund that invests in "value" stocks. Companies rated as value

stocks usually are older, established businesses that pay dividends. In this types of mutual
fund, the co. gives part of it p rofit to mutual fund holders, which is called dividend.
Thematic funds –
Thematic funds identify them es based on global trends or unique criteria as part of their
stock picking guidelines. Some fun ds may focus on just one major theme as the backbone
for their investment process. DWS Global Themes Equity diversified Fund and DBS Shenton
Global Opportunities Fund are exam ple of global equity diversified funds that have explicit
global themes.

A thematic fund invests in a single theme, but there are several sectors within it, maybe as
many as 12-15 sectors, so it’s pretty diversified in that sense. The theme is n ot just one or two
sectors, rather a broader opportunity encompassing several sectors. For instance, the
outsourcing opportunity is not restricted to technology; it includes manufactu ring and pharma
among other sectors. The capital goods and infrastructure theme includes sev eral sectors.
 Sectoral Funds –
These are the funds/schemes w hich invest in the securities of only those sector s 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 compare d to diversified funds. Investors need to keep a watch on the
performance of those sectors/i ndustries and must exit at an appropriate time.
TOP10 OP ENENDED SECTORAL EQUITY DIVERSIFIED FUNDS

Rank Scheme Na me Date NAV Last 12 Since

(Rs.) Mon ths Inception

1 Reliance Banking Fun d - Growth Jun 18 , 2016 58.58 17.22 33.82

UTI Thematic
2 Bankin g Sector Jun 18 , 2016 26.11 15.02 19.94
Fund - Growth
3 UTI Thematic Transp ortation Jun 18 , 2016 14.83 7.3 9 7.75
and Logistics Fund - Growth

4 Sahara Infrastructure Fund - Jun 18 , 2016 14.06 5.7 9 11.2

Variable Pricing - Gr owth
5 Sahara Infrastructure Fund - Jun 18 , 2016 13.75 5.0 1 10.43
Fixed Pricing - Growth

6 Taurus Infrastructur e Fund - Jun 18 , 2016 10.86 4.1 2 3.67

Growth
7 Reliance Pharma Fund - Growth Jun 18 , 2016 25.34 3.0 6 20.26

8 Reliance Diversified P ower Sector Jun 18 , 2016 59.12 1.5 4 -12.86

Fund - Institutional - Growth

9 Reliance Diversified P ower Sector Jun 18 , 2016 60.45 1.4 42.16

Fund - Growth

10 UTI MNC Fund - Gro wth Jun 18 , 2016 34.79 1.1 6 13.14
 Diversified Equity diversified F unds –

A mutual fund scheme that achieves the benefits of diversification by inves ting in the
stocks of companies across a large n umber of sectors. As a result, it minimizes the risk
of exposure
to a single company or sector . Diversified equity diversified fund is a fund, that seeks
to invest only on equities, except for a very small portion in liquid money market
securities, b ut is not focused on any one or few sectors or shares, may be termed a
diversified equity diversified fun d. While exposed to all equity diversified price risk
divers ified equity diversified fund seek to reduce the sector or stock specific risk
through diversification. They have mainly market risk expose. Such general p roposal
proposes but diversified funds are clearly at the lower risk level than the growth funds

TOP10 OPEN- ENDED DIVERSIFIED EQUITY

DIVERSIFIED FUNDS

Rank Scheme Na me Date NAV Last 12 Since

(Rs.) Mont hs Inception
1 Sundaram BNP Paribas Financial Jun 18 , 12.66 26.04 25.94
Services Opportunities Fund - 2016
Retails - Growth
2 Sundaram BNP Paribas Media & Jun 18 , 12.02 20.06 20.06
Entert Opportunities Fund - Retails 2016
- Growth
3 JM Mid Cap Fund - G rowth Jun 18 , 19.51 11.93 14.38
2016
4 Birla Sun Life Dividen d Yield Plus - Jun 18 , 50.55 10.13 29.27
Growth 2016
5 UTI Opportunities Fun d - Growth Jun 18 , 18.56 8.41 17.11
2016
ICICI Prudential Focused Equity
6 diversified Jun 18 , 10.6 6.64 5.59
Fund - Institutional I - Growth 2016
7 Sahara Growth Fund - Growth Jun 18 , 63.42 6.18 31.14
2016
Benchmark Equity diversified An d
8 Derivative Jun 18 , 11.18 6.12 7.06
Opportunities Fund - G rowth 2016
9 HDFC Top 200 - Growth Jun 18 , 138.98 5.82 23.22
2016
 ICICI Prudential Focused Equity
10 diversified Jun 18 , 10.49 5.64 4.57
Fund - Retail - Growth 2016

ELSS – Equity diversified Linked Savin g Scheme provides tax benefit to the investors.
They operate like any other growth fund ( and that’s why are as risky). However, as
investor in these
schemes gets an income-tax rebate of 20 per cent (for a maximum of Rs 10,0 00) under
section 88. Essentially an in centive for the investor ( who is otherwise inve sting in fixed-
income instruments like the Public Provident Fund primarily for saving tax on his or her
annual salary or business income) a chance to participate in capital appreciation that can be
delivered by investing in eq uity shares. That’s also why these schemes also come with a
three-year lock- in period. Also while other tax planning schemes guarantee returns, an
ELSS offers no such assuran ce.

TOP10 OPENENDED ELSS(TAX) FUNDS

 Growth
Rank Scheme9 Name
Fran Jun 18 , 25.59
klin 2016
Indi
1 Sahara Taxgain - Growth Jun 18 , 142.11
a 2016
Taxs
2 Sundaram h Jun 18 , 10.25
BNP Pari ield - 2016
bas Gro
wth Jun 18 , 11.12
Taxsaver -
2016
(Open
Ended Jun 18 , 13.74
Fund ) - 10 Franklin 2016
Growth India Index Tax
Fund Jun 18 , 138.88
3 Relia 2016
nce
Tax Jun 18 ,
Save 2016
r F
und
-
Gro
wth
4 Taurus Taxshield - G rowth

5 HDFC
Taxsaver -
Growth
6 HSBC
Tax
Saver Eq
uity
Fund -
Growth

7 Religare Tax
Plan - G rowth
8 Fidelity
Tax
Advanta
ge Fund
-
 Date NAV Last 1 2 Since
(Rs.) Months Inception

Jun 18 , 24.87 3.86 27.72

2016

Jun 18 , 32.77 0.92 16.38

2016

Jun 18 , 13.8 0.06 9.14

2016
H ow to Select an Equity diversified Fund
Compare a fund with its peers:

One of the basic fundamental of benchmarking is to evaluate funds with in th e same category.
For example, if you are evaluating the performance of a thematic fund, say IT based fund,
then you should compare its performance with another similar IT based fu nd. Comparing it
with banking sector fund for e xample will not give the correct picture. Comparing a fund
over stock market cycle (boom and bust) will give investors a good idea about h ow the fund
has fared.

Compare returns against those of the benchmark index:

Every fund mentions a bench mark index in the Offer Document. It can be BS E 100, BSE
200, Nifty or any other index. The benchmark index serves as a guidepost f or both the fund
manager and the investor. Compare how the fund has fared against the benc hmark index over
a period of 3-5 years. The fun ds that have outperformed their benchmark indices during stock
market volatility must be given a close look.

Compare against the fund's o wn performance:

Apart from comparing a fund with its peers and benchmark index, investor s should evaluate
its historical performance. B y evaluating a fund against its own historical p erformance, you
can get an idea about consistent performers.

Current scenario of equity diversified funds

With stock markets reigning at its all time high, Equity diversified is the buzzword these
days. All kinds of investors without caring a damn about their risk profiles are looking at
investing in equities and / or equity diversified funds. Large corporate houses too have been
lured by the equity diversified mania. As a result of this, M utual Funds are raking in huge
monies in the eq uity segment.

The total AUM of the industry stood at Rs.164674.07 c rores as on June

2014. Out of this Rs. 42,461 crores representing almost 26% was in the equity diversified
segment. This is an increase of over 80% in the last one year. The mutual fund with hig hest
equity diversified funds under management is UTI MF, having almost Rs. 7,800 crores in its
kitty. Among the private sector players, Franklin Tem pleton is at the top with an equity
diversified corpus of R s. 6637.4 crores. HDFC MF comes next with Rs. 4559.24 crores in its
equity diversified segment. The five top funds in this category account for 58 % of the total
equity diversified funds in the mutual funds industry. True to the general perception about
mutual funds that they are a means of diversifyi ng across stocks, the diversified equity
diversified scheme as had the highest corpus with over 80% of the funds in equities among
the top 5 players below.

100
80
60
40
20
0
DIVERSIFIED TAX PLANNING INDEX SECTOR

Over the last six months the equity diversified corpus of the industry swelled by more than
Rs. 12,000 crores. In this the diversified schemes and tax planning schemes saw rise of about
Rs. 12,650 crores and Rs. 232.2 crores respectively. But there was a fall in the corp us of
index and sectoral schemes. Major gainers in the equity diversified segment over last 6
months re mained Reliance MF, which mopped up Rs. 1 888 crores. Franklin closely followed
at Rs. 18 09 crores. HDFC Mutual Fund was at a distant third place growing by Rs. 1435
crores and Tata MFs equity diversified corpus inflated by Rs. 1151 c rores. But the major
factor helping in this gro wth remained the New Fund Offer made by each of these AMCs.

So diversified equity diversified funds ha s the better preference than the other equity
diversified fun ds because of its diversification of stocks and ELSS schemes are giving better
return due to their locking system of 3 years as long term investments.
 Yearly return of equity diversified mutual funds sector wise(Table-1)

SECT ORS 2014 2015

AUTO
UTI TRANSPORTATION AND LOGISTICS 17.37 49.39
JM AUTO SECTOR 0.97 59.17
BANK
RELIANCE BANKING RETAIL 66.49 39.32
UTI BANKING SECTOR RE G 76.95 46.32
JM FINANCIAL SERVICES SECTOR 95.11 58.18
FMC G
ICICI PRUDENTIAL FMCG 42.75 27.43
MAGNUM FMCG 28.38 33.03
FRANKLIN FMCG 23.03 45.38
INDEX FUNDS
TATA INDEX SENSEX B 0 0.06
ICICI PRUDENTIAL INDEX RETAIL 46.63 50.39
UTI SUNDER 46.65 50.77
ICICI PRUDENTIAL SPICE 46.78 51.49
FRANKLIN INDIA INDEX NSE NIFTY 52.22 52.11
PRINCIPAL INDEX 53.62 52.42
LICMF INDEX NIFTY 54.79 52.73
MAGNUM INDEX 56.46 53.26
HDFC INDEX NIFTY 65.34 53.49
UTI NIFTY INDEX 52.21 51.99
CANARA ROBECO NIFTY INDEX 49.48 51.50

INTERPRETATION:-The above table shows return of sector-wise mutual funds in 2014 and
2015. In auto sector, both of the funds gives better return in 2015 than 20 07. This effect is
done due to the upside of t he automobile market in 2015. But the auto mobile sectorised
mutual funds have given bett er result in comparison to its return in the equity diversified
market. In case of the banking sectors, rn 20 07 was the more profitable than 2015, both in the
equity diversified sector and in the mutual fund industry. The banking sector faced a heavy
loss in 2014. That’s why it affected the banking funds. E xcept the Allahabad Bank, no bank
gave bette r return than the previous year. In case of the FMCG sector equity diversified
funds, one fund have give n better result in 2015 and the other two funds had comparatively
less return than 2014.And the index funds are depended on the index - SENSEX & NIFTY ,
and the stock market is vol atile in its nature, some earned better return and others earned poor
return.
Return of equity diversified fund s monthly, quarterly, half-yearly, yearly and
in 3 years

th
Funds,w hich gave good return as on 18 june 2016

(Table-2)
 Perf
Sc orm
he anc
m e in
e diff
N ere
a nt
m tim
e e
peri
DBS ods(
Chol IN
a %)
Midc
ap 1 M th % 3 Mths %
Fund 10.74 75.78
-
Gro
wth
JM Basic Fund - Growth 9 .42 102.98 60.21 -37.34 6.14

JM Mid Cap Fund - Growth 10.70 70.54 76.56 11.93 6.81

JM Small & Mid-Cap Fund - 13.53 81.23 26.87 -58.12 N/A
Regular - Growth
Principal Junior Cap Fund - 8 .90 91.77 68.49 -0.21 11.10
Growth
Sahara Midcap Fund - 12.38 80.73 54.21 -7.75 12.29
Growth
SBI Magnum Midcap Fund - 13.88 88.41 58.50 -24.90 4.65
Growth
SBI Magnum Sector 14.94 89.94 55.77 -21.58 4.05
Umbrella - Emerging
Businesses - Growth
Sundaram BNP paribas capex 9.26 81.24 50.01 -9.83 16.04
opportunities fund- Growth

Taurus Infrastructure Fund - 16.15 108.5 77.74 4.12 N/A

Growth

INTERPRETATION

The Table-2 is showing the best equity diversified funds return as per 1 month,3 months,
6 months, 1 year and 3 years. From the above fu nds, TAURUS INFRASTRUCTURE
FUND-GROWTH has thebest return in 1 month, 3 month s, and 6 months. In 1 year, JM
MIDCAP FUN D-GROWTH and in 3 years, SUNDARAM BNP PARIBAS CAPEX
OPPORTUNITIES FUND-G ROWTH are the best performer. But from overall point of
view, all midcap funds have given the good return and all good performers are the
growth funds.

So, it is clear that mi d-cap funds and growth funds are the good performers in the
mutual fund field. Also the mid cap cos are performing well in the recession time, they are also
the good performers in mutual fund.

EQUI TY FUNDS GIVING BAD RETURN

 Table-3

SCHEMES 1 month 3 months 6 months 1 year 3 years

HDFC Arbitrage Fund - IP - 0.19 1.17 3.08 7.36 N/A

Growth
HDFC Arbitrage Fund - Retail - 0.18 1.11 2.95 7.10 N/A
Growth

ICICI Prudential Equity

diversified & 1.07 1.23 3.10 6.58 N/A
Derivatives Fund - I O - IP -
Growth
ICICI Prudential Equity
diversified & 1.08 1.08 2.86 6.26 N/A
Derivatives Fund - I O - Retail -
Growth
IDFC Arbitrage Fund - Plan A 0.42 0.61 1.97 5.41 N/A
(Regular) - Growth

The above table shows the equity diversified funds, which gave bad return. Two of th e above
table are arbitrage funds and the other two are derivatives fund. As derivatives are related to the
anticipation, and the security market is in the recession period, these funds are giving more and
less return.
 EQUITY DIVERSIFIED FUNDS SECTOR WISE RETURN IN %

PHARMA SECTOR

Table-4

SCHEMES 1 month 3 months 6 months 1 year 3 years

Franklin Pharma Fund - 11.12 42.97 38.25 -0.77 8.98
Growth
Reliance Pharma Fund - 13.81 44.99 32.24 3.06 18.47
Growth
SBI Magnum Sector Umbrella 15.41 57.21 37.54 -22.95 -4.85
- Pharma - Growth
UTI Growth Sector Fund - 7.24 27.85 19.89 -12.93 5.85
Pharma and Healthcare -
Growth

INTERPRETATION –

In pharma sector, in 1 month an d 3 months SBI MAGNUM UMBRELLA has the best return, in
6 months, FRANKLIN PHARMA FUND has the best return. But in lon g term periods,
RELIANCE PHARMA FUND is the best. Pharma sector is the only sector , which is giving
always a reasonable return to its customers, even in the recession period. B oth in the share
market and equity diversified funds, it is not a looser. This sector is a trusted sector for
investment. Ranbaxy, Dr.Reddy’s are giving reasonable return always in spite of slowdown. This
also affect the pharma sector equity diversified funds.
 INFOTECH SECTOR

Table-5

SCHEMES 1 month 3 month 6 month 1 yea r 3 years

Birla Sun Life New 5.47 56.75 32.50 -26.23 2.05

Millennium - Growth
DSP BlackRock 10.19 53.89 32.36 -26.03 12.26
Technology.com Fund - Reg -
Growth
Franklin Infotech Fund - 10.96 45.48 38.58 -21.53 -2.13
Growth
ICICI Prudential Technology 13.81 52.07 37.17 -32.36 -0.67
Fund - Growth
Kotak Tech Fund 5.54 43.03 33.59 -25.09 -6.25
Tata Life Sciences and 14.07 61.03 57.79 -2.47 9.32
Technology Fund - Appr

INTERPRETATION –

Here, in 1month, 3 months, 6 months and in 1 year performance, the TATA LIFE SCINCES
AND TECHNOLOGY FUNDS-APPR has the best return and in 3 years, DS P BLACKROCK
TECHNOLOGY.COM FUND has the best return. As here given returns are the returns of the
top performers of these sectors, it shows that this sector is not giving better return in
comparison with other sectors.
 BANKING AND FINANCIAL SERVICES SECTOR

Table-6

SCHEMES 1 month 3 months 6 months 1 year 3 years

JM Financial Services Sector -0.10 44.15 1.23 -32.52 N/A
Fund - Growth
Reliance Banking Fund - -1.87 79.19 42.54 17.22 32.49
Growth
Reliance Banking Fund - IP - -1.87 79.19 42.54 N/A N/A
Growth
Religare Banking Fund - 0.51 65.97 29.63 N/A N/A
Growth
Sahara Banking and Financial 0.42 86.82 72.72 N/A N/A
Services Fund - Growth
Sundaram BNP Paribas -2.61 82.03 37.53 26.04 N/A
Financial Services
Opportunities Fund - Ret -
Growth

INTERPRETATION

In one month, return of all are be low 1. In 3 months and 6 months SAHARA BA NKING AND
FINANCIAL SERVICES FUND has the highest return . In 1 year, SUNDARA M BNP
PARIBAS FINANCIAL SERVICES FUND is the best and in 3 years, there exis ts only the
RELIANCE BANKING FUND and it also gave good return 32.49%. So, overa lly SAHARA
BANKING AND FINANCIAL SERVICES FUND is the better scheme in bank ing and financial
service sector. This sector is goi ng in loss now. No bank except Allahabad Bank gave better
result in 2015. Though SBI and s ome other banks have given reasonable return 2 009, banking
sector funds are still giving negative return. Here it can be seen that in 3 month return ,they have
given good result, but in one month, their return is poor, because currently fall of banking
stocks. So current return are below 1.
 I NFRASTRUCTURE SECTOR

Table-7

SCHEMES 1 month 3 months 6 months 1 year 3 years

AIG Infrastructure and 5.97 63.95 44.65 -9.41 N/A
Economic Reform Fund - IP -
Growth
Birla Sun Life Infrastructure 3.31 69.27 48.95 -4.20 14.97
Fund - Plan A - Growth
Canara Robeco Infrastructure 1.43 66.90 53.76 -3.68 18.60
Fund - Growth
ICICI Prudential Banking and 0.62 71.00 37.17 N/A N/A
Financial Services Fund -
Retail - Growth
ICICI Prudential FMCG - 7.86 22.64 14.76 -21.80 4.94
Growth
ICICI Prudential Infrastructure 0.39 46.45 34.85 -6.38 N/A
Fund - FII Growth
ICICI Prudential Infrastructure 0.34 46.17 34.40 -7.08 25.00
Fund - Growth
Sahara Infrastructure Fund - 6.95 63.56 51.78 5.79 19.76
Variable Pricing - Growth
Taurus Infrastructure Fund - 16.15 108.05 77.74 4.12 N/A
Growth
Tata Infrastructure Fund - 2.82 59.97 41.26 -12.19 17.83
Growth

INTERPRETATION

As per the above table, TAURU S IFRASTRUCTURE FUND is the leader, whic h is giving the
best return, but in long term periods (1 year and 3 years), SAHARA INFRASTR UCTURE
FUND is the best player. The infrastructure sector has the growth period now and it is the sector,
which is giving the best return in the equity diversified funds. Infrastructure funds are also the
leaders in the overall equity diversified funds. AMCs are now introducing more and more NFOs
in this sector.
 TAX SAVING SCHEMES

Table-8

SCHEMES 1 month 3 months 6 months 1 yea r 3 years

Bharti AXA Tax Advantage 2.07 66.16 N/A N/A N/A

Fund - Eco - Growth
Bharti AXA Tax Advantage 2.07 66.05 N/A N/A N/A
Fund - Reg - Growth
Birla Sun Life Tax Plan - 4.53 53.01 37.30 -12.71 N/A
Growth
Birla Sun Life Tax Relief 96 - 2.15 67.43 48.35 -10.13 N/A
Growth
Canara Robeco Equity
diversified 1.82 68.61 N/A N/A N/A
Taxsaver - Growth
DBS Chola Taxsaver Fund - 5.15 70.93 49.42 -9.70 5.81
Growth
ICICI Prudential Taxplan - 7.48 61.05 46.06 -12.52 7.01
Growth
ING Tax Saving Fund - 7.81 60.49 45.31 -25.03 1.34
Growth
JM Tax Gain Fund - Growth 7.94 55.17 33.08 -35.34 N/A
Sahara Taxgain - Growth 6.81 58.82 42.78 3.86 16.76

INTERPRETATION

This table shows the tax saving schemes return. In 1 month, ING TAX SAVING FUND is the
best return giver. In 3 months and 6 months, DBS CHOLA TAXSAVER is the b est player. But
in long term period both in 1 year and 3 years, the SAHARA TAXGAIN GROW TH FUND is
the fund which gave the highest return. Though most of them are the new comers in the market,
but SAHARA TAXGAIN is the best player in the tax saver schemes.
 CHAPTER-V
FINDINGS & SUGGESTIONS

Equity diversified funds are the funds having both high risk
and high return. Pure equity diversified funds are volatile in
nature.

Growth equity diversified funds are giving good return .

Mid cap equity diversified funds are also giving good return.

Sectoral equity diversified funds hav e also high risk – high return and they can
be volatile as the share market.

Though equity diversified funds have risks, they are still giving better return and
also the preference of the mutual fund holder s.

In 2014 and 2015, Divers ified equity diversified funds were the best preferences,
bu t now it is the equity diversified funds has the bette r market.
 CONCLUSION

The Mutual fund industry is on uprising moment. It have a good prospect in our
country. Due to the pure volatility in the stock market, people are now looking for the
mutual fund market for their big investments. As share market has high risk high return,
and people are looking for better return but with safety, they choose mutual funds and
mainly the equity diversified funds those are giving better return in the market. As
People have better knowledge about the share markets, they are choosing equity
diversified funds for their investment, but I have done my research in an analytical
view, that’s why I m presented the analysis for what people should choose the equity
funds for their investments. The NFOs are entering the market, mainly based on the
infrastructure sectored funds. The equity diversified funds are the only market, in
which more and more types of funds can be created as per the situations. Now global
funds, which contains the investment in foreign are a new concept of equity diversified
funds though equity diversified funds are not always affected by the stock market, but it
can be affected by its volatility. So, the investors should have better knowledge about
the portfolio of the funds before investing in it. It is no doubt that equity diversified
funds have a bright future in Indian Investment Market and it is now is in the way of
the excellence.
 BIBLIOGRAPHY

To prepare my report I hav e taken the help of some websites & book

s. These are :

www.mfea.com

www.mutualfundindia.com

www.amfiindia.com

www.sebigov.in

“INVESTMENT” BY BODDI, KANE, MARCUS,PITABAS MOH ANTY

INVESTMENT ANALYSI S & PORTFOLIO MANAGEMENT” B

Y PRASANNA CHANDRA.