Professional Documents
Culture Documents
Comparitive Analysis of Mutual Funds With Equity Shares Project Report
Comparitive Analysis of Mutual Funds With Equity Shares Project Report
CHAPTER – I INTRODUCTION
1. Karvy – Overview
2. Karvy – Early days
3. Karvy – Alliances
4. Milestone
5. Achievements
6. Quality policy & objectives
7. Karvy – stock broking limited
1. Conclusions
2. Suggestions
CHAPTER – VI BIBILOGRAPHY
1
CHAPTER –1
INTRODUCTION
2
INTRODUCTION ON MUTUAL FUNDS
3
A mutual fund is a trust that pools the savings of a number of
investors who share a common financial goal. The money thus collected
is invested by the fund manager in different types of securities depending
upon the objective of the scheme. This could range from shares to
debentures to money market instruments. The income earned through
these investments and the capital appreciations realized by the scheme
are shared by its unit holders in proportion to the number of units owned
by them.
Thus mutual fund is the most suitable investment for the common
man as it offers the opportunity to invest in a diversified professionally
managed portfolio at a relatively low cost. Any body with an investible
surplus of as little as a few thousand rupees can invest in mutual funds.
As investment vehicles go, mutual funds are unique being the only
ones to operate on the principle of pooling resources. The element of
novelty extends to their working also in the kind of investment exposures
they offer, the terms they use, the norms for pricing they follow, and lots
more. These character traits will unravel through the course of this book.
4
Life makes many demands of us. There’s so much to indulge in and
deal with. At work or at home. With family, friends or self. Woven into
these threats is the inescapable truth that money is a means to many an
end. A house in the sub-urbs, good education for the kids, a set of four
wheels to zip around and early retirement. The ends might differ but the
means – at least one of them – to reach them remain the same: money.
Earned wisely, saved regularly, and invested smartly.
People say that they don’t have the discipline, they don’t
understand investing, especially the stock market. They don’t have time
and don’t really care. Well they should, even if just a little. After all it’s
their money and their life and it helps to have their saving working for
you. They don’t need to get neck – deep in to their personal finances, but
the least they can do, and should do, is get a fix on the big picture.
Explore and understand what they want from their investments, and
leave the rest to the money managers: mutual funds. These investment
vehicles don’t demand them to have a deep understanding of financial
matters; they don’t even demand oodles of your time.
5
OBJECTIVES OF THE STUDY
6) To know how various schemes effect mutual fund investment and its
performance taking past records.
6
SCOPE OF THE STUDY
1) The study covers the concept and details of mutual funds and
introduction on equity, derivatives and index.
2) The study also includes returns of equity, mutual funds and relative
index of different sectors.
4) The project report covers the study of Net Asset Value (NAV) of mutual
funds in different sectors.
5) The analysis part includes the Net Asset Value (NAV) charts which
gives the clear picture of the present value of the mutual fund
company.
7
APPLICATION OF THE STUDY
5) The study enables the readers to assess the Net Asset Value (NAV) by
seeing the charts.
8
METHODOLOGY OF THE STUDY
9
c) Identification of sources from where the information can be
available.
d) Selection of appropriate information i.e. collection method.
10
TOOLS USED FOR ANALYSIS
TABULATION
11
1) Bar diagrams: Bar diagrams are used specifically for categorical data
or series. They consist of the group of equidistant rectangles, one for
each group or category of data in which the values of magnitudes are
represented by length or height of rectangles.
COMPARATIVE STUDY
12
LIMITATIONS
3) Due to limitation of time all sectors are not studied, only selected
sectors have been studied.
4) Data for mutual funds available on website is day to day basis data.
Data is updated daily. Hence the data is available as on 31 march
2006.
13
CHAPTER – 2
COMPARATIVE STUDY ON MUTUAL FUNDS
AND OTHER INVESTMENT SCHEMES
14
The concept of “Mutual fund” is a new feature in the cap of Indian
capital market but not to international market. The concept of mutual
fund spread to USA in the beginning of 20 th century and three mutual
fund companies were started in 1924. Mutual funds have been
successfully working in the USA and some western countries. These
funds have been useful in filling the gap between the demand and supply
of capital in the market. A mutual fund motivates small and big investors
to entrust their savings to it so that these are professionally employed in
sharing good return. A large number of investors have small savings with
them. They can at the most buy shares of one or two companies. When
small savings are pooled and entrusted to mutual fund then these can be
used to buy blue chips where regular returns and capital appreciation
are ensured.
15
As per mutual fund book published by investment company institute of
US,“Mutual fund is a financial service organization that receives money
from shareholders, invest it, earns return on it, attempt to make it grow
and agree to pay the shareholder cash on demand for the current value of
investment”
16
HISTORY OF MUTUAL FUND INDUSTRY
17
THIRD PHASE – 1993-2003 (Entry of Private Sector Funds) With
the entry of private sector funds in 1993, a new era started in the Indian
mutual fund industry, giving the Indian investors a wider choice of fund
families. Also, 1993 was the year in which the first Mutual Fund
Regulations came into being, under which all mutual funds, except UTI
were to be registered and governed. The erstwhile Kothari Pioneer (now
merged with
Franklin Templeton) was the first private sector mutual fund registered
in July 1993. The 1993 SEBI (Mutual Fund) Regulations were
substituted by a more comprehensive and revised Mutual Fund
Regulations in 1996. The industry now functions under the SEBI (Mutual
Fund) Regulations 1996. The number of mutual fund houses went on
increasing, with many foreign mutual funds setting up funds in India
and also the industry has witnessed several mergers and acquisitions. As
at the end of January 2003, there were 33 mutual funds with total assets
of Rs. 1,21,805 crores. The Unit Trust of India with Rs.44,541 crores of
assets under management was way ahead of other mutual funds.
18
March 2000 more than Rs.76,000 crores of assets under management
and with the setting up of a UTI Mutual Fund, conforming to the SEBI
Mutual Fund Regulations, and with recent mergers taking place among
different private sector funds, the mutual fund industry has entered its
current phase of consolidation and growth. As at the end of September,
2004, there were 29 funds, which manage assets of Rs.153108 crores
under 421 schemes. The graph indicates the growth of assets over the
years.
19
GROWTH IN ASSETS UNDER MANAGEMENT
ZZZ
Note:
Erstwhile UTI was bifurcated into UTI Mutual Fund and the Specified
Undertaking of the Unit Trust of India effective from February 2003. The
Assets under management of the Specified Undertaking of the Unit Trust
of India has therefore been excluded from the total assets of the industry
as a whole from February 2003 onwards.
20
CONCEPT OF MUTUAL FUND
21
ORGANISATION OF A MUTUAL FUND
There are many entities involved and the diagram below illustrates
the organisational set up of a mutual fund:
22
Individual stocks may carry greater potential for growth, but
$5,000 isn't a lot to invest and if you put it all in one stock, you risk
everything if it performs poorly. And, brokers and investment advisors
can offer you advice and money management, but at a price -- you pay
for their services, which reduces further the amount you have available
to invest.
23
A mutual fund, by its very nature, is diversified -- its assets are
invested in many different securities. Beyond that, there are many
different types of mutual funds with different objectives and levels of
growth potential, furthering your chances to diversify.
The price measured per unit is called the Net asset value NAV of
the unit. Just as a share or a bond is brought at a price, a mutual fund
is bought and sold at its NAV. If for example u were to invest Rs.10000 in
a scheme when its NAV is Rs.10 you will be
24
A scheme’s NAV is a dynamic figure. The market value of the
scheme’s portfolio changes from day to day as prices of shares and bonds
move up or down. The number of units outstanding also changes, as new
investors come into the scheme and old ones leave. If the NAV of your
schemes rises from Rs.10 to Rs.11 over a period of time, your scheme is
said to have generated a return of 10 percent. Similarly if its Net NAV
falls form Rs.10 to Rs. 9, it is said to have lost 10 percent. Fund houses
have to calculate and disclose, the NAVs of their schemes daily. Fund
NAVs can be easily looked up. While the general dailies give a random
listing of schemes, the financial papers are more exhaustive in their
coverage. When invested in a scheme, its NAV is the figure to track, as it
quantifies your returns, and your purchase price will be based on it.
Random listing of schemes, the financial papers random listing
25
In general mutual funds fall into these general categories:
Equity Funds
26
pronounced growth. These funds may
invest in a broad range of industries or
concentrate on one or more industry
sectors. Some use borrowing, short-selling,
options and other speculative strategies to
leverage their results.
Growth Funds
What they invest Generally invest in stocks for growth rather than
in:
current income.
27
investors but not investors who are unable to assume
risk or who are dependent on maximizing current
income from their investments.
International/Global Funds
What they invest International funds seek growth through investments
in:
in companies outside the United States. Global funds
seek growth by investing in securities around the
world, including the United States. Both provide
investors with another opportunity to diversify their
mutual fund portfolio, since foreign markets do not
always move in the same direction as the U.S.
28
timeframe and risk profile. Because most
international and global funds are considered to be
aggressive growth funds or growth funds, investors
must be willing to assume the risk of potential loss in
value in the hope of achieving substantial gains. They
are not suitable for investors who must conserve their
principal or maximize current income.
Growth and Income Funds
What they invest in: Growth and income funds seek long-term
growth of capital as well as current income.
The investment strategies used to reach
these goals vary among funds
What they invest The goal of fixed income funds is to provide high
in:
current income consistent with the preservation of
capital. Growth of capital is of secondary importance
Income funds that invest primarily in common stocks
29
are classified as equity income funds (see next
listing). Those that invest primarily in bonds and
preferred stocks are classified as fixed-income funds.
These funds invest in corporate bonds or government-
backed mortgage securities that have a fixed rate of
return.
Since bond prices fluctuate with changing interest
rates, there is some risk involved despite the fund's
conservative nature. When interest rates rise, the
market price of fixed-income securities declines and
so will the value of the income funds' investments.
Conversely, in periods of declining interest rates, the
value of fixed-income funds will rise and investors will
enjoy capital appreciation as well as income
Fixed-income funds offer a higher level of current
income than money market funds, but a lower
stability of principal. They are generally more stable
in price than funds that invest in stocks. Within the
fixed-income category, funds vary greatly in their
stability of principal and in their dividend yields.
High-yield funds, which seek to maximize yield by
investing in lower-rated bonds of longer maturities,
entail less stability of principal than fixed-income
funds that invest in higher-rated but lower-yielding
securities.
Some fixed-income funds seek to minimize risk by
investing exclusively in securities whose timely
payment of interest and principal is backed by the full
faith and credit of the U.S. Government. These
include securities issued by the U.S. Treasury, the
Government National Mortgage Association ("Ginnie
Mae" securities), the Federal National Mortgage
Association ("Fannie Maes") and Federal Home Loan
Mortgage Corporation ("Freddie Macs"). All are backed
30
by pools of mortgages.
Suitable for: Fixed-income funds are suitable for investors who
want to maximize current income and who can
assume a degree of capital risk in order to do so.
Again, carefully read the prospectus to learn if a
fund's investment policy with respect to yield and risk
coincides with your own objectives.
What they invest Equity income funds seek high current yield by
in:
investing primarily in equity securities of companies
which pay high dividends. Unlike interest payments
on bonds, dividends on equity securities can change
as companies raise or lower their dividends. Since
yield-oriented stocks are more volatile than
comparably rated fixed-income securities, equity
income funds offer less stability of principal than
fixed-income funds. Balanced funds are more evenly
invested in equities and income securities.
Suitable for: Balanced and equity income funds are suitable for
conservative investors who want high current yield
with some growth.
What they invest For the cautious investor, these funds provide a very
in:
high stability of principal while seeking a moderate to
high current income. They invest in highly-liquid,
virtually risk-free, short-term debt securities of
agencies of the U.S. Government, banks and
corporations and U.S. Treasury Bills. They have no
31
potential for capital appreciation.
Suitable for:
Money market funds are suitable for conservative
investors who want high stability of principal and
moderate current income with immediate liquidity.
32
Municipal Bond Funds
What they invest "Muni" bond funds provide higher tax-exempt income
in: than tax-exempt money market funds by investing in
longer-maturity (and often lower-rated) securities,
which generally offer higher yields than the short-
term, high-rated securities in which tax-exempt
money market funds invest
Municipal bond funds vary greatly in the quality and
maturity of the municipal bonds they invest in. The
longer the maturity, the higher the yield. Also, the
lower the credit rating of the issuer, the greater the
risk and the higher the yield
While municipal bond funds generally provide lower
yields than income funds with debt obligations of
similar maturities and ratings, for an investor in a
high marginal tax bracket the after-tax yields of
municipal bond funds will be higher. The price and
yield of municipal bond funds will fluctuate
moderately with interest rates. As interest rates
decline, the value of principal increases while yield
decreases; as rates increase, bond prices decline but
yields increase.
Suitable for: Suitable for investors in medium to higher tax
brackets who want current income free from federal
income tax.
What they invest These bond funds provide the investor with an even
in: greater tax advantage by investing in municipal
bonds of a single state. Triple tax-exempt funds are
exempt from income tax in a specific city. Thus they
33
generate income exempt from not only federal income
tax but also from state and/or city income tax for
residents of those jurisdictions. Like all bond funds,
the value of the shares will fluctuate with interest
rates, as will the current yield. Also, the stability of
principal and yield levels vary with the quality and
maturity length of the bonds in which the funds
invest. Lack of geographic diversification increases
credit risk of these funds compared with national
funds.
Suitable for: These funds are suitable for investors in medium to
high tax brackets in high tax states who want income
with maximum exemption from taxes.
Specialty/Sector Funds
34
but also entail the risk of capital losses when the
industry is out of favor
While sector funds restrict holdings to a particular
industry, other specialty funds such as index funds
give investors a broadly-diversified portfolio and
attempt to mirror the performance of various market
averages. Index funds generally buy shares in all the
companies composing the S&P 500 Stock Index or
other broad stock market indices
Asset allocation funds move funds among a variety of
markets and instruments in response to the fund
manager's view of relative market prospects. They are
broadly diversified and sometimes have higher
management fees since there may be a variety of
securities in the portfolio. These funds are suitable for
investors who can tolerate a moderate to high degree
of risk, are seeking capital appreciation and to whom
dividend income is secondary in importance. And
whatever the instruments, social responsibility funds
apply moral and ethical as well as economic
principles in the selection of securities.
Suitable for: Specialty funds are suitable for investors seeking to
invest in a particular industry who can monitor
industry performance regularly and alter investment
strategies accordingly. Investors must be willing to
assume the risk of potential loss in value of their
investment in the hope of achieving substantial gains.
They are not suitable for investors who must conserve
their principal or maximize current income.
35
1) Professional Investment Management: By pooling the funds of
thousands of investors, mutual funds provide full-time, high-level
professional management that few individual investors can afford to
obtain independently. Such management is vital to achieving results
in today's complex markets. Your fund managers' interests are tied to
yours, because their compensation is based not on sales
commissions, but on how well the fund performs. These managers
have instantaneous access to crucial market information and are able
to execute trades on the largest and most cost-effective scale. In short,
managing investments is a full-time job for professionals.
4) Convenience and Flexibility: You own just one security rather than
many, yet enjoy the benefits of a diversified portfolio and a wide range
of services. Fund managers decide what securities to trade, clip the
bond coupons, collect the interest payments and see that your
dividends on portfolio securities are received and your rights
exercised. It's easy to purchase and redeem mutual fund shares,
either directly online or with a phone call.
36
information about your fund account. Or a phone call puts you in
touch with a trained investment specialist at a mutual fund company
who can provide information you can use to make your own
investment choices, assist you with buying and selling your fund
shares, and answer questions about your account status.
7) Total Liquidity, Easy Withdrawal: You can easily redeem your shares
anytime you need cash by letter, telephone, bank wire or check,
depending on the fund. Your proceeds are usually available within a
day or two.
8) Life Cycle Planning: With no-load mutual funds, you can link your
investment plans to future individual and family needs -- and make
changes as your life cycles change. You can invest in growth funds for
future college tuition needs, then move to income funds for
retirement, and adjust your investments as your needs change
throughout your life. With no-load funds, there are no commissions to
pay when you change your investments.
37
10) Investor Information: Shareholders receive regular reports from the
funds, including details of transactions on a year-to-date basis. The
current net asset value of your shares (the price at which you may
purchase or redeem them) appears in the mutual fund price listings of
daily newspapers. You can also obtain pricing and performance
results for the all mutual funds at this site, or it can be obtained by
phone from the fund.
12) Dividend Options: You can receive all dividend payments in cash.
Or you can have them reinvested in the fund free of charge, in which
case the dividends are automatically compounded. This can make a
significant contribution to your long-term investment results. With
some funds you can elect to have your dividends from income paid in
cash and your capital gains distributions reinvested.
13) Automatic Direct Deposit: You can usually arrange to have regular,
third-party payments -- such as Social Security or pension checks --
deposited directly into your fund account. This puts your money to
work immediately, without waiting to clear your checking account,
and it saves you from worrying about checks being lost in the mail.
15) Safekeeping: When you own shares in a mutual fund, you own
securities in many companies without having to worry about keeping
stock certificates in safe deposit boxes or sending them by registered
mail. You don't even have to worry about handling the mutual fund
38
stock certificates; the fund maintains your account on its books and
sends you periodic statements keeping track of all your transactions.
16) Retirement and College Plans: Mutual funds are well suited to
Individual Retirement Accounts and most funds offer IRA-approved
prototype and master plans for individual retirement accounts (IRAs)
and Keogh, 403(b), SEP-IRA and 401(k) retirement plans. Funds also
make it easy to invest -- for college, children or other long-term goals.
Many offer special investment products or programs tailored
specifically for investments for children and college.
17) Online Services: The internet provides a fast, convenient way for
investors to access financial information. A host of services are
available to the online investor including direct access to no-load
companies.
18) Sweep Accounts: With many funds, if you choose not to reinvest
your stock or bond fund dividends, you can arrange to have them
swept into your money market fund automatically. You get all the
advantages of both accounts with no extra effort.
20) Margin: Some mutual fund shares are marginable. You may buy
them on margin or use them as collateral to borrow money from your
bank or broker. Call your fund company for details.
MARKET TRENDS
39
Alone UTI with just one scheme in 1964, now competes with as
many as 400 odd products and 34 players in the market. In spite of the
stiff competition and losing market share, UTI still remains a formidable
force to reckon with.
Last six years have been the most turbulent as well as exiting ones
for the industry. New players have come in, while others have decided to
close shop by either selling off or merging with others. Product innovation
is now passé with the game shifting to performance delivery in fund
management as well as service. Those directly associated with the fund
management industry like distributors, registrars and transfer agents,
and even the regulators have become more mature and responsible.
Funds have shifted their focus to the recession free sectors like
pharmaceuticals, FMCG and technology sector. Funds performances are
improving. Funds collection, which averaged at less than Rs100bn per
annum over five-year period spanning 1993-98 doubled to Rs210bn in
1998-99. In the current year mobilization till now have exceeded
Rs300bn. Total collection for the current financial year ending March
2000 is expected to reach Rs450bn.
40
What is particularly noteworthy is that bulk of the mobilization has
been by the private sector mutual funds rather than public sector mutual
funds. Indeed private MFs saw a net inflow of Rs. 7819.34 crore during
the first nine months of the year as against a net inflow of Rs.604.40
crore in the case of public sector funds.
year indicates that money is going to mutual funds in a big way. The
collection in the first half of the financial year 1999-2000 matches the
whole of 1998-99.
41
COMPARISON OF BANKS, MUTUAL FUNDS, EQUITY & DERIVATIVES
42
RECENT TRENDS IN MUTUAL FUND INDUSTRY
The most important trend in the mutual fund industry is the
aggressive expansion of the foreign owned mutual fund companies and
the decline of the companies floated by nationalized banks and smaller
private sector players.
Many nationalized banks got into the mutual fund business in the
early nineties and got off to a good start due to the stock market boom
prevailing then. These banks did not really understand the mutual fund
business and they just viewed it as another kind of banking activity. Few
hired specialized staff and generally chose to transfer staff from the
parent organizations. The performance of most of the schemes floated by
these funds was not good. Some schemes had offered guaranteed returns
and their parent organizations had to bail out these AMCs by paying
large amounts of money as the difference between the guaranteed and
actual returns. The service levels were also very bad. Most of these AMCs
have not been able to retain staff, float new schemes etc. and it is
doubtful whether, barring a few exceptions, they have serious plans of
continuing the activity in a major way.
43
The foreign owned companies have deep pockets and have come in
here with the expectation of a long haul. They can be credited with
introducing many new practices such as new product innovation, sharp
improvement in service standards and disclosure, usage of technology,
broker education and support etc.
In fact, they have forced the industry to upgrade itself and service
levels of organizations like UTI have improved dramatically in the last few
years in response to the competition provided by these.
44
appreciation
Fixed Income Both high-
High
dividend- High to Low to
Current Very Low
Equity paying stocks Very High Moderate
Income
Income and bonds
Current
General
Income & Money
Money Moderate
Protection market None Very Low
Market to High
of instruments
Funds
Principal
Tax-Free
Short-term
Income & Tax-Exempt
municipal Moderate
Protection Money None Low
notes and to High
of Market
bonds
Principal
U.S.Treasury
Current
U.S. and agency
Income &
Government issues Moderate
Maximum None Low
Money guaranteed to High
Safety of
Market by the U.S.
Principal
Government
FUTURE SCENARIO
The asset base will continue to grow at an annual rate of about 30
to 35 % over the next few years as investor’s shift their assets from banks
and other traditional avenues. Some of the older public and private
sector players will either close shop or be taken over.
Out of ten public sector players five will sell out, close down or
merge with stronger players in three to four years. In the private sector
this trend has already started with two mergers and one takeover. Here
too some of them will down their shutters in the near future to come.
But this does not mean there is no room for other players. The
market will witness a flurry of new players entering the arena. There will
be a large number of offers from various asset management companies in
the time to come. Some big names like Fidelity, Principal, and Old
Mutual etc. are looking at Indian market seriously. One important reason
45
for it is that most major players already have presence here and hence
these big names would hardly like to get left behind.
SEBI is working out the norms for enabling the existing mutual
fund schemes to trade in derivatives. Importantly, many market players
have called on the Regulator to initiate the process immediately, so that
the mutual funds can implement the changes that are required to trade
in Derivatives.
46
3) Confused market situation: probably the introduction and
implementation of new regulatory norms has contributed in some
measure to market sluggishness, as the emerging market was,
initially, not able to respond to the regulatory objectives.
47
education especially aimed at investors in rural and semi-urban
areas. However this has been mostly neglected in India.
48
INTRODUCTION ON EQUITY SHARES
Equity is a term commonly used to describe the ordinary share
capital of the business. Ordinary share in the equity capital of the
business entitle the holders to all distributed profits after the holders of
debentures and preference shares have been paid. Ordinary shares are
issued to the owners of the company. It is important to understand the
market values of company’s shares have little relationship to their
nominal or face value. The market value of the company share is
determined by the price another investor is prepared to pay for them. In
the case of publicly quoted companied, this is reflected in the market
value of the ordinary shares traded on the stock exchange. In case of
privately owned companies, where there is unlikely to be much trading in
shares, market value is often determined when the business is sold or
when the minority share holding is valued for taxation purpose.
49
company being created or newly created). When the investment is in
infant companies it is refer to as venture capital investing and is
generally understood to be higher risk than investment in listing, going
concern situations.
ON INDEX INTRODUCTION
Stock market talk is everywhere, from T.V and radio, to the
newspapers and the web. But what does it mean? When people say that
“the market turned a great performance today”. “What is the market
anyway?”
As it turns out, when most people talk about “the market” they are
actually referring to an index. With the growing importance of the stock
market in our society the names of indexes such as S & P 500, NIFTY,
and SENSEX have become part of our every vocabulary.
Indexes are great tools for telling us what direction the market is
taking, what trends are prevailing. “An index is a number use to
represent the changes in a set of values between a base time period and
another time period” A stock index is number that helps you measure the
levels of the market. Most stock indexes attempt to be proxies for the
market they exist in. returns on the index are thus supposed to represent
the returns on the market i.e the returns that u could get if u had the
entire market in your portfolio.
50
CHAPTER – 3
COMPANY PROFILE
51
COMPANY PROFILE
OVERVIEW
Karvy is a premier integrated financial services provider, and
ranked among the top five in the country in all its business segments,
services over 16 million individual investors in various capacities, and
provides investor services to over 300 corporate, comprising the who is
who of Corporate India. Karvy covers the entire spectrum of financial
services such as Stock broking, Depository Participants, Distribution of
financial products - mutual funds, bonds, fixed deposit, equities,
Insurance Broking, Commodities Broking, Personal Finance Advisory
Services, Merchant Banking & Corporate Finance, placement of equity,
IPO’s, among others. Karvy has a professional management team and
ranks among the best in technology, operations and research of various
industrial segments.
The birth of Karvy was on a modest scale in 1981. It began with the
vision and enterprise of a small group of practicing Chartered
Accountants who founded the flagship company Karvy Consultants
Limited. We started with consulting and financial accounting
automation, and carved inroads into the field of registry and share
accounting by 1985. Since then, we have utilized our experience and
superlative expertise to go from strength to strength…to better our
services, to provide new ones, to innovate, diversify and in the process,
evolved Karvy as one of India’s premier integrated financial service
enterprise.
52
Thus over the last 20 years Karvy has traveled the success route,
towards building a reputation as an integrated financial services
provider, offering a wide spectrum of services. And we have made this
journey by taking the route of quality service, path Breaking innovations
in service, versatility in service and finally…totality in service.
Our highly qualified manpower, cutting-edge technology, comprehensive
infrastructure and total customer-focus has secured for us the position
of an emerging financial services giant enjoying the confidence and
support of an enviable clientele across diverse fields in the financial
world.
KARVY - CREDO
53
RESPECT FOR INDIVIDUAL
TEAM WORK
RESPONSIBLE CITIZENSHIP
54
INEGRITY
KARVY ALLIANCES
Karvy Computer share Private Limited is a 50:50 joint venture of
Karvy Consultants Limited and Computer share Limited, Australia.
Computer share Limited is world's largest -- and only global -- share
registry, and a leading financial market services provider to the global
securities industry.
55
MILESTONE
ACHIEVEMENTS
Among the top 5 stock brokers in India (4% of NSE volumes)
56
Adjudged as one of the top 50 IT uses in India by MIS Asia
QUALITY POLICY
To achieve and retain leadership, Karvy shall aim for complete
customer satisfaction, by combining its human and technological
resources, to provide superior quality financial services. In the process,
Karvy will strive to exceed Customer's expectations.
QUALITY OBJECTIVES
As per the Quality Policy, Karvy will:
customers.
Provide high quality of work life for all its employees and equip them
needs.
57
Use state-of-the art information technology in developing new and
58
It is an undisputed fact that the stock market is unpredictable and
yet enjoys a high success rate as a wealth management and wealth
accumulation option. The difference between unpredictability and a
safety anchor in the market is provided by in-depth knowledge of market
functioning and changing trends, planning with foresight and choosing
one option with care. This is what we provide in our Stock Broking
services.
We offer services that are beyond just a medium for buying and
selling stocks and shares. Instead we provide services which are multi
dimensional and multi-focused in their scope. There are several
advantages in utilizing our Stock Broking services, which are the reasons
why it is one of the best in the country.
59
The Finapolis & rdquo;, which analyzes the latest stock market
trends and takes a close look at the various investment options, and
products available in the market, while a weekly report, called & ldquo;
Karvy Bazaar Baatein & rdquo;, keeps you more informed on the
immediate trends in the stock market. In addition, our specific industry
reports give comprehensive information on various industries. Besides
this, we also offer special portfolio analysis packages that provide daily
technical advice on scrip for successful portfolio management and
provide customized advisory services to help you make the right financial
moves that are specifically suited to your portfolio.
Our Stock Broking services are widely networked across India, with
the number of our trading terminals providing retail stock broking
facilities. Our services have increasingly offered customer oriented
convenience, which we provide to a spectrum of investors, high-net worth
or otherwise, with equal dedication and competence. But true to our
spirit, this success is not our final destination, but just a platform to
launch further enhanced quality services to provide you the latest in
convenient, customer-friendly stock management.
Over the years we have ensured that the trust of our customers is
our biggest returns. Factors such as our success in the Electronic
custody business has helped build on our tradition of trust even more.
Consequentially our retail client base expanded very fast.
60
To empower the investor further we have made serious efforts to
ensure that our research calls are disseminated systematically to all our
stock broking clients through various delivery channels like email, chat,
SMS, phone calls etc.
Our foray into commodities broking has been path breaking and
we are in the process of converting existing traders in commodities into
the more organized mainstream of trading in commodity futures, both as
a trading and risk hedging mechanism.
DEPOSITORY SERVICES
61
and the latest technological expertise allocated exclusively to our demat
division including technological enhancements like SPEED-e; make our
response time quick and our delivery impeccable. A wide national
network makes our efficiencies accessible to all.
62
Our monthly magazine, Finapolis, provides up-dated market
information on market trends, investment options, opinions etc. Thus
empowering the investor to base every financial move on rational thought
and prudent analysis and embark on the path to wealth creation.
ADVISORY SERVICES
Under our retail brand ‘Karvy – the Finapolis', we deliver advisory
services to a cross-section of customers. The service is backed by a team
of dedicated and expert professionals with varied experience and
background in handling investment portfolios. They are continually
engaged in designing the right investment portfolio for each customer
according to individual needs and budget considerations with a
comprehensive support system that focuses on trading customers'
portfolios and providing valuable inputs, monitoring and managing the
portfolio through varied technological initiatives.
63
For this purpose we offer a comprehensive and personalized service
that encompasses planning and protection of finances, planning of
business needs and retirement needs and a host of other services, all
provided on a one-to-one basis.
CHAPTER – 4
ANALYSIS & INTERPRETATION
64
ANALYSIS & INTERPRETATION
PREFACE
65
know the position of Mutual Funds in the market in long term and short
term period. The period of 3 months and 6 months is taken as short term
and period of 1 year is taken as long term period. The comparison of
aggregate Mutual Funds and Equities is shown in Table.
(TABLE :4.1)
RETURNS OF FMCG SECTOR EQUITIES & MUTUAL FUNDS
Absolute returns %
NAME 3 6 MONTHS 1 YEAR
MONTHS
Franklin FMCG Fund 15.12 -9.9 55.20
Pru ICICI FMCG 0.57 0.30 0.12
Fund
Magnum FMCG Fund 0.21 0.04 0.10
Hind Lever ltd Equity 0.84 0.95 0.84
Dabur equity -0.82 0.38 0.01
Colgate Equity 0.72 0.48 0.79
Britannia Equity 0.0019 0.08 0.0013
Tata tea Equity 0.014 0.05 0.06
RETURNS OF EQUITIES
66
67
68
(TABLE :4.1A)
ABSOLUTE RETURNS IN %
NAME 3 MONTHS 6 MONTHS 1 YEAR
FMCG SECTOR 0.15 0.10 0.55
MUTUAL
FUNDS
FMCG SECTOR 0.023 0.019 0.017
EQUITIES
RELATIVE TO 594.13 1476.18 1725.89
SENSEX
RELATIVE TO 6561.00 9965.46 9830.72
NIFTY
69
FMCG Mutual Funds includes Franklin FMCG Fund, Prudential ICICI
FMCG Fund and Magnum FMCG fund.
FMCG Equities includes Hindustan lever ltd, Dabur, Colgate, Tata Tea
and Britannia
70
ABSOLUTE RETURNS OF INDEX
(ANALYSIS)
In FMCG Equities from Table and Bar Diagram we can see that
Hindlever gives maximum Returns then any other Equities. The
next comes Colgate and TataTea which gives almost the same
71
Returns. Tata tea Equities shows good Returns only in long term
period Whereas Dabur gives Negative Returns in short term
period..
72
negative for example in Dabur Equity, but in Mutual Funds we can
see negative Returns but compare to equities mutual funds are risk
minimising.
ABSOLUTE RETURS %
NAME 3MONTHS 6MONTH 1 YEAR
S
Franklin Pharma Fund 0.07 0.05 0.46
Magnum Pharma Fund 0.29 -0.74 -0.02
UTI Pharma & health fund 0.08 0.01 0.27
Dr Reddy’s Equity 0.083 0.072 0.062
Ranbaxy Equity 0.027 0.027 0.042
Orchid equity 0.013 -0.012 0.010
Cipla equity 0.025 0.029 0.26
Sun Pharma Equity 0.022 0.024 0.030
(BAR DIAGRAM)
RETURNS OF MUTUAL FUNDS
73
(BAR DIAGRAM)
RETURNS OF MUTUAL FUNDS
74
75
(TABLE :4.4A)
ABSOLUTE RETURNS IN %
NAME 3 MONTHS 6 MONTHS 1 YEAR
PHARMA 0.44 0.80 0.75
MUTUAL
FUNDS
PHARMA 0.17 0.16 0.40
EQUITIES
RELATIVE TO 594.13 1476.18 1725.89
SENSEX
RELATIVE TO 6561.00 9965.46 9830.72
NIFTY
76
(LINE DIAGRAM 4.4)
77
ABSOLUTE RETURNS OF MUTUAL FUNDS, EQUITIES & INDEX
78
(ANALYSIS)
Pharma Sector fund, as, we can see clearly that all Mutual Funds
performance in long term period and short term period is very
good.
From Table we can also see that Dr Reddy’s Equity, Sun Pharma
Equity and Ranbaxy & cipla equit also performs well. But we can
also notice that Pharma Sector Equity such as orchid gives
negative Returns in the period of 6months . In the same way equity
also gives very poor Returns during the study period.
79
As relative Sensex and Nifty grows in the Market, Pharma Sector
Mutual Funds also shows upward trend but Equities does not
show any upward trend in long term period as we can clearly
observe in the Line Diagram showing Comparison between Mutual
Funds, Equities, Sensex and Nifty.
80
CHAPTER - 5
CONCLUSIONS & SUGGESTIONS
months.
81
In pharma sector sbi mutual fund shows negative returns both in
months.
82
CHAPTER - 6
BIBILIOGRAPHY
I. TEXT BOOK
1. Security Analysis Portfolio Management
Donald Fisher
Ronald A Jordan
2. Mutual Fund In India
H.Sadhak
83
www.bseindia.com
III. MAGAINES
Business India
Business World
84