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INTRODUCTION

A mutual fund is a professionally managed type of collective investment


scheme that pools money from many investors and invests it in stocks, bonds, short-
term money market instruments and other securities. Mutual funds have a fund
manager who invests the money on behalf of the investors by buying / selling stocks,
bonds etc. management team. Another reason why investors prefer mutual funds is
because mutual funds offer diversification.
An investor’s money is invested by the mutual fund in a variety of shares, bonds
and other securities thus diversifying the investors portfolio across different
companies and sectors. This diversification helps in reducing the overall risk of the
portfolio. It is also less expensive to invest in a mutual fund since the minimum
investment amount in mutual fund units is fairly low (Rs. 500 or so). With Rs. 500 an
investor may be able to buy only a few stocks and not get the Currently, the
worldwide value of all mutual funds totals more than $US 26 trillion. There are
various investment avenues available to an investor such as real estate, bank deposits,
post office deposits, shares, debentures, bonds etc.
A mutual fund is one more type of investment avenue available to investors.
There are many reasons why investors prefer mutual funds. Buying shares directly
from the market is one way of investing. But this requires spending time to find out
the performance of the company whose share is being purchased, understanding the
future business prospects of the company, finding out the track record of the
promoters and the dividend, bonus issue history of the company etc.
An informed investor needs to do research before investing. However, many
investors find it cumbersome and time consuming to pore over so much of
information, get access to so much of details before investing in the shares. Investors
therefore prefer the mutual fund route. They invest in a mutual fund scheme which in
turn takes the responsibility of investing in stocks and shares after due analysis and
research. The investor need not bother with researching hundreds of stocks. It leaves
it to the mutual fund and it’s professional fund desired diversification. These are some
of the reasons why mutual funds have gained in popularity over the years.
Indians have been traditionally savers and invested money in traditional savings
instruments such as bank deposits. Against this background, if we 6 look at
approximately Rs. 7 lakh crores 1 which Indian Mutual Funds are managing, then it is

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no mean an achievement. A country traditionally putting money in safe, risk-free
investments like Bank FDs, Post Office and Life Insurance, has started to invest in
stocks, bonds and shares – thanks to the mutual fund industry.
However, there is still a lot to be done. The Rs. 7 Lakh crores stated above,
includes investments by the corporate sector as well. Going by various reports, not
more than 5% of household savings are chanellised into the markets, either directly or
through the mutual fund route. Not all parts of the country are contributing equally
into the mutual fund corpus. 8 cities account for over 60% of the total assets under
management in mutual funds. These are issues which need to be addressed jointly by
all concerned with the mutual fund industry. Market dynamics are making industry
players to look at smaller cities to increase penetration.
Competition is ensuring that costs incurred in managing the funds are kept low
and fund houses are trying to give more value for money by increasing operational
efficiencies and cutting expenses. As of today there are around 40 Mutual Funds in
the country. Together they offer around 1051 schemes2 to the investor. Many more
mutual funds are expected to enter India in the next few years.
All these developments will lead to far more participation by the retail investor
and ample of job opportunities for young Indians in the mutual fund industry. This
module is designed to meet the requirements of both the investor as well as the
industry professionals, mainly those proposing to enter the mutual fund industry and
therefore require a foundation in the subject. Investors need to understand the nuances
of mutual funds, the workings of various schemes before they invest, since their
money is being invested in risky assets like stocks/ bonds (bonds also carry risk). The
language of the module is kept simple and the explanation is peppered with ‘concept
clarifiers’ and examples. Let us now try and understand the characteristics of mutual
funds in India and the different types of mutual fund schemes available in the market.

MUTUAL FUNDS STRUCTURE IN INDIA


For anybody to become well aware about mutual funds, it is imperative for
him or her to know the structure of a mutual fund. We will start our understanding by
looking at the mutual fund structure in brief. Mutual Funds in India follow a 3-tier
structure. There is a Sponsor (the First tier), who thinks of starting a mutual fund. The
Sponsor approaches the Securities & Exchange Board of India (SEBI), which is the
market regulator and also the regulator for mutual funds. Not everyone can start a

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mutual fund. SEBI checks whether the person is of integrity, whether he has enough
experience in the financial sector, his networth etc. Once SEBI is convinced, the
sponsor creates a Public Trust (the Second tier) as per the Indian Trusts Act, 1882.
Trusts have no legal identity in India and cannot enter into contracts, hence the
Trustees are the people authorized to act on behalf of the Trust. Contracts are entname
of the Trustees. Once the Trust is created, it is registered with SEBI after which this
trust is known as the mutual fund. It is important to understand the difference between
the Sponsor and the Trust. They are two separate entities. Sponsor is not the Trust; i.e.
Sponsor is not the Mutual Fund. It is the Trust which is the Mutual Fund. The
Trustees role is not to manage the money. Their job is only to see, whether the money
is being managed as per stated objectives. Trustees may be seen as the internal
regulators of a mutual fund.

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NEED OF THE STUDY
The mutual fund industry growing globally and new products are emerging
in the market with all captivating promises of providing high return it has become
difficult for the investors to choose the best fund for their need or in other words to
find out a fund which will give maximum return for the minimum risk. therefore they
turn to their financial adviser to get precise direct investment. Hence the company
asked to me prepares a model, which will facilitate them to analyze the fund and to
have reasonable estimation for the fund performance.

The main purpose of doing this project was to know about mutual fund and
its functioning. This helps to know in details about mutual fund industry right from its
inception stage, growth, and future prospects.

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SCOPE OF THE STUDY
A big boom has been witnessed in mutual fund industry in recent times. A
large number of new players have entered the market and trying to gain market share
in this rapidly improving market. The research has been carried on in Vijayawada. I
survey on my topic “ Analysis of Risk and Return in mutual fund industry”.

Total area covered in this study is analysis on Risk and Return of the mutual
fund industry by knowing the investment preference by the investors in various types
of segments and also covered data analysis like selection of different schemes
which are best in terms of return and to check the measures of Risk and Return
from the schemes.

The study will help to know the preferences of the clients in selecting the asset
management company. Portfolio made of investment and option for getting return and
so on they prefer. This study will further help the company to make its further
planning and strategy.

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OBJECTIVES OF THE STUDY

1. To study the types of mutual fund transactions and the process at;

2. To study measures of Risk & Return associated with mutual fund investments;

3. To examine the different schemes & method to select a better scheme of an


AMC;

4. To analyze the risk appetite & investors performance while investing between
EQUITY & DEBT;

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METHODOLOGY
This research was conducted during my summer internship program; the location
chosen was Vijayawada branch office. Research was undertaken under by me and
also with the help of my manager at our office with a sample size of 50(male 27 &
female 23) in the form of general and expert opinion.
General opinion was taken as investor on risk appetite of the mutual fund industry and
there analysis with the help of a brief questionnaire asking some of the details
regarding the mutual fund. The research provided an interesting insight in to
awareness about the mutual fund, The differences in age groups, occupation, income
levels, risk taking ability of individual investment options preferred etc…
USING FORMULAS:
% of annual return =current value – previous value*100
previous value
standard deviation = stdev(current value to last value)
RISK ADJUSTED TO THE RETURN:
sharp ratio = rmf – rf /standard deviation
risk free return = 7%(always)
Research Plan : To analyze investor preferences for mutual fund investments
 Occupation
 Age group
 Period of investment preferences
 Investment option (through risks)
 Their expected returns

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LIMITATIONS OF THE STUDY

 Some of the persons were not responsive.

 Possibility of error in data collection, because many of investors may have not
given actual answers of my questionnaire.

 Some respondents were reluctant to divulge personal information which can


affect the validity of all responses.

 The research is confined to a certain part of Vijayawada.

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CHAPTER – 2
 INDUSTRY ANALYSIS

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INDUSTRY ANALYSIS
Indian Mutual Fund Industry
While the Indian mutual fund industry has registered a six-fold increase
in AUM over the last 10 years, it is yet to emerge as the preferred investment
choice for retail investors in India.
More than 50 years have gone by since UTI started its first sale in July
1964,and we believe that in the next few years, the industry will perform closer to the
original mandate of encouraging and mobilizing savings of small investors. The
confluence of emerging technology and enabling regulation will facilitate the industry
to broaden and deepen its reach amongst retail investors.
• Evaluation of e-commerce platforms to sell mutual funds is currently underway,
and a positive outcome will help unlock the buying power of the 400 mn Internet
users and 1 bn mobile phone users in India.
• Financial inclusion has received a fillip with the JAM number trinity (Jan
Dhan,Aadhar& Mobile), and opening of 192 mn Jan Dhan accounts in 15 months
with a deposit base of Rs 27,000 crore. This builds the case for evaluating adoption
of a similar model and cross-selling opportunities.
• More clarity on E-KYC and its subsequent adoption will aid the penetration amongst
the hitherto un-served segment;
• The recently approved payment banks, with permission to sell third-party
mutual fund products are expected to improve the reach.
In the context of improving the financial literacy and awareness among retail
investors, AMCs have conducted around 60,000 investor awareness programmes in
the past 60-odd months across 500 cities in India, and have reached out to 1.8 mn
participants. This is an ongoing initiative and is expected to improve the low
penetration of mutual funds in the Indian market. With individual investors relying
heavily on distributors for purchase of mutual funds, AMCs will continue their focus
on distribution network along with an emphasis on increasing sale of direct plans.

We believe that these enablers will help the industry to increase its customer base in a
cost-effective manner from 42 mn retail accounts and increase their ticket size.While
these measures will enable customer acquisition, AMCs need to focus on retaining
customers through sale of simpler products, demonstrating better fund performance.

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INDUSTRY OVERVIEW
Player profile
More than 40 Asset Management Companies [AMC] have set up their
operations since the liberalization of the Indian economy in 1993. Currently, 44
AMCs are operating in India and these comprise private sector companies, joint
ventures (including those with foreign entities), bank-sponsored, etc. The industry has
a tiered structure with the top 7 AMCs having 70% of the industry Asset under
Management [AUM].
Customer segments
Institutional investors currently hold 54% of assets with individual investors
increasing their share from 45% to 46% in the last one year (source: AMFI). The
institutional investor group comprises corporates (85%) as well as Indian and foreign
institutions and banks.
The number of investor accounts had hit a low of 39.5 mn in March 2014
compared to levels of 48 mn witnessed in 2009. There has been a recovery in the last
one year, and the figure increased to 42.8 mn by June 2015. 99% of such accounts are
individual investor accounts, which include both retail and High Networth Individual
[HNI] investors (ticket size greater than Rs 5 lakh).
Buying behaviour
The two segments of individual and institutional customers reflect significant
differences in the nature and rationale of their buy, usage of distribution channel,place
of origination of sale and ticket size.
The choice of asset reflects the difference in investment objectives of the two
customer segments – capital protection and return optimization for the institutional
investor vis-à-vis long-term growth for a retail investor. With institutional
investors located in Top-15 cities , these cities continue to form the core
catchment area for fund collection for the industry. Focused outreach programmes
by AMCs has led Beyond-15 towns [B15] increasing their proportion in asset
collection to 16% as on September 2015.
Acquisition of individual investors has typically been done through the
distributor network, and around 60% of total assets are garnered through this route.
The two client segments with their separate preferences for different types of schemes
demonstrate varied preference for direct plans vis-à-vis those sold through
distributors. With non-equity oriented schemes purchased primarily by institutional

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investors, the proportion of direct purchase is 60% for these schemes. AMFI data for
September 2015 reveal that investment for 11% of retail investors and 15% of HNI
investors was through the direct route. Variations in ticket size are noticeable across
different scheme types and customer segments, and this impacts the operating
model of the AMCs.
The investment objective of different customer segments is reflected in the
differences in the average holding period between equity and non-equity
schemes. Equity assets have a longer holding period, as individual investors
investing in these schemes have a longer-term perspective to realize their growth
objectives. The product portfolio as well as customer acquisition and retention
strategy of the different AMCs reflect their target segments, as there are
significant differences in product preferences and buying patterns across the
segments.
Customer engagement
AMCs have initiated multi-pronged measures to engage with customers from
different socio-economic tiers to widen their base and increase ticket size. The District
Adoption Programme[DAP] and the Investor Awareness Programme [IAP] done by
each AMC are aimed at improving awareness about mutual funds in locations that
have nil or minimal penetration of mutual funds. AMCs have held 6,600 IAP across
250 cities covering 0.26 mn participants in the first six months of the current fiscal
year. Approximately 60,000 IAP have been held across 500 cities between May 2010
to October 2015 and 1.8 mn participants have attended these programmes.
AMCs are deploying technology to engage with existing and potential
customers in urban and semi-urban areas as most are regular Internet users. Apart
from improving the ease of use of their websites, AMCs are using WhatsApp,
Facebook and other social media services to reach out to prospects and customers.
There exist a range of mobile apps for tracking and transacting portfolios, where some
even offer a WhatsApp integration of such applications. Using social media channels
to communicate and leveraging technology to invest, redeem and switch funds using
mobile phone apps would help attract a new segment of customers, especially
the burgeoning pool of young working population. With HNIs being a key
customer segment, many AMCs and foreign banks undertake tailored programmes
to increase their engagement with this segment.
The adoption of the industry-wide goal of improving retail participation has led

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to the market witnessing multiple outreach initiatives. While some of the

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massoutreach initiatives are similar across the different AMCs, others are customized
to offer a differentiated experience to their customer base.
We believe that there are certain game-changers in the offing, which will
provide a fillip to this process and lead to the growth and increasing maturity of the
individual investor segment.
INDUSTRY TRENDS
Growth in global AUM
AUM of world-wide mutual funds and exchange-traded funds [ETF] stood at
$33.4 trillion at year-end 2014, with more than 80% of the assets held across USA
and Europe. Mature markets of USA and Europe have demonstrated lower CAGR
for the 5-year period starting from the beginning of this decade. Higher growth in India
represents the latent potential of the Indian market which can be tapped to improve
the penetration of the mutual fund industry in India.
While the average AUM to GDP ratio stands at 7% for India and is
considerably lower than the global figure, there is a wide variation across the different
districts of India. A SEBI study (2013) reveals that key districts with high volume of
fund collection have a figure of around 30%, comparable to the global estimate.
However, other districts have figures as low as 2%, highlighting the geographic
concentration in the domestic AUM build-up.
Demand drivers in global markets
Retail investors hold 89% of mutual fund assets in USA, and they rely on
these funds to meet their long-term financial objectives especially building
their retirement corpus and education savings. 94% of such households hold mutual
fund shares inside employer-sponsored retirement accounts, Individual Retirement
Accounts and other tax deferred accounts.
Survey shows that from 2005 onwards, 68% of individuals have made their
first purchase in mutual funds in employee-sponsored retirement plans. 90 mn retail
investors have holdings in mutual funds, which imply that 43% of all US households
owned mutual funds in 2014.68% of US retail investors hold more than half of their
financial assets in mutual funds, with $103,000 being the median value of mutual
fund assets (source: ICF 2015).
Institutional clients’ share of AUM in the European mutual fund market rose
from 69% in 2007 to 74% in 2013. Institutional clients comprise primarily insurance
companies (39% of AUM) and pension funds (33% of AUM), and they rely on the

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expertise of the fund managers to manage the contributions collected from their
members. Households contribute a significant share of the institutional client segment
through their ownership of unit-linked products offered by insurance companies, and
pension schemes offered by both insurers and pension funds. Households are also
engaging in higher purchase of mutual funds from 2013 onwards, and these purchases
are made either from third-party distributors or through the internet (source: EFAMA
2015).
More than 50% of US mutual fund assets are in equity funds and this is
congruent with the long-term investment perspective for the retail investors. The
picture is different in the European market where bond assets comprise the single
largest holding at 43% of AUM. The ability of US and European funds to have a
strong retail customer base presents the Indian industry with pointers on increasing
their reach in the retail market.
Key trends in the domestic market
The Indian mutual fund market has witnessed varying trends in fund inflow
during the last decade. The aftermath of the global credit crisis had led to continuous
outflows for the next four-five years. The situation reversed in the last fiscal with net
positive inflow, which while lower than the 2008 levels is a welcome sign for the
industry, especially the growth in equity schemes.
While equity investment in Indian capital markets by FIIs has gone up
from Rs 850 bn in FY14 to Rs 1100 bn in FY15, their level of participation in
Indian mutual funds has remained largely unchanged. With access to increasing
investible surplus, the HNI segment has significantly increased its participation in
the Indian mutual funds, especially in the equity schemes
The increase is more significant in the equity segment where their folio count
has more than doubled over 24 months. As their average ticket size is Rs 2 mn, this
customer category has had a significant impact on the growth of equity schemes.
The other trend visible over the last two years has been the declining trend
in issuance of NFO. This has been partly due to the regulators’ direction to
rationalize and consolidate mutual fund schemes with similar objectives. The
requirement from the regulator to demonstrate the differentiation in investment
style and attributes of a potential new fund has also impacted the pace of approvals.
Furthermore, as the product suite of some of the asset management companies has
neared completion, the hectic pace of NFOs has slowed.

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The requirement of disclosing the details and number of funds’ managed
by each fund manager has also led to more circumspection before each new fund
launch. In the last decade, average of total expense ratio (TER) charged by the
AMCs to investors under each fund category has remained range bound. The only
significant exception was dynamic funds where TER has doubled. Typically fund
houses charge the highest TER for balanced funds and the least for liquid funds.
While AMCs need to pass on their costs to investors to stay viable in their
business, it is imperative that some restraint is used to ensure investor returns are not
unduly eroded. SEBI has capped total expense ratio (TER) for actively managed
equity and debt funds. For debt funds, the expense ratio allowed is 0.25 percentage
points lower than equity funds. If AMCs are able to channelize funds from B15 cities
they are allowed to charge additional TER of upto 30 bps on their average weekly net
assets. As the mutual fund industry matures, theTER will emerge as a key contender
in an investors’ choice of funds. Deeper investor awareness will be a precursor to any
regulatory leeway towards market determined expense ratios.
Industry-level changes
The post-credit crisis period led to increased regulatory scrutiny in all
countries, including India. The recent SEBI directives and initiatives in the mutual
fund space can be categorized into three broad clusters:
A. Protecting the interests of investors by
a. Introducing higher disclosures by AMC to promote transparency;
b. Implementing changes in commission structure to prevent mis-selling;
c. Merger of me-too schemes and denying approval to NFO issuances that
do not comply with this norm;
d. Introducing easy-to-understand riskometer info graphics in
product brochures.
• The ‘riskometer’ with five levels of risks – low, moderately low,
moderate, moderately high, and high. This replaces the colour coding
method, which had only three levels - low, medium, and high.
B. Lowering cost and increasing reach by
a. Incentivizing the sale of direct plans through differentiated TER for areas
other than T15;
b. Issuance of consolidated accounts statement;
c. Launch of MF utility portal and allowing investors to trade through a

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Common Account Number;
C. Safeguarding the health of the industry by
a. Mandating a compulsory increase in the capital base of AMCs from Rs
100 mn to Rs 500 mn by 2017;
b. Assessing the fixed costs of AMCs by proposing to analyze compensation details,
of fund managers and senior management.
• Presently, mutual funds can spend a maximum of 2.5% of the AUM
as expenses, which they recover from investors;
c. Conducting regular stress tests.
These initiatives have had a significant impact on the industry in terms of
collections, customer acquisition, distributor network, product portfolio, etc.
The other key change being witnessed is the M&A activity, with as many as 10
M&A
in the last six – seven years. Some of the key triggers are –
1. Exit of non-serious and smaller players in the context of the SEBI directive to
increase capital base and the larger players viewing this is an opportunity to expand
through inorganic growth;
2. New entrants with a bullish outlook on India have adopted the M&A route as a
quicker way to scale up operations;
3. Low profitability increased the vulnerability of smaller players.
Some of the recent M&A activities are represented in the infographic, and we expect
to see more of this in the near future.
PERFORMANCE ANALYSIS
While the popularity of the mutual fund industry can be attributed to growing
investor awareness, success of investor education campaigns, and an investorcentric
regulatory regime, the most crucial factor that will decide the future course of the
industry is its performance.
As of September 2015, the 10-year average return generated by Indian mutual
funds across all fund types and asset classes is around 10.2%. Equity-oriented
schemes have returned 13.8% and debt schemes, 7.9%.
Equity-oriented schemes
The success of this category is crucial for attracting individual investors
as
83% of the asset pool for equity funds comes from them (Retail + HNI). As of
September 2015, the average ticket size in equity schemes is Rs. 0.12 mn and the
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main investment objective is to generate superior returns.

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Mutual funds enjoy an especially important status in channelizing household
savings to the capital market, where a lay investor is at a disadvantage in making
informed investment decisions. This source of funds from the capital market is
essential both from the perspective of meeting the need for funds, as also for efficient
price discovery,which a larger pool of funds brings to the secondary market.
From an investor’s perspective, over a long term investment horizon, equity
funds in India have managed to generate positive real returns, after adjusting for
inflation. At the same time, traditional asset classes such as gold and real estate
have struggled with generating inflation adjusted returns.
where the active style of investment management has not justified the
expenses charged for such fund management, this has led to some consolidation in the
types of schemes managed within an asset management company, albeit at the
behest of the regulator. Furthermore, funds which aim to diversify across
economies, i.e. global funds have met with limited traction, as performance has
been disappointing relative to domestic diversified funds. Currency fluctuations,
as well as the better performance of Indian equities have meant that global
funds are yet to achieve reasonable share of assets managed.
Debt-oriented schemes
The industry has met with limited success in attracting retail investors to the
debt fund category. Institutions looking for liquidity management are the primary
investors within this category.A case for dynamically managed fixed income funds
has emerged with the changes in interest rates in the current economic environment.
Since the start of 2015, RBI has cut interest rates six times, totaling 125 bps.As a
result, in the last one year, dynamic bond funds have fetched 10%-12% returns, higher
than conventional long-term or short-term bond funds.
However, there is a large range of returns delivered by dynamic bond funds
and the volatility in interest rates hasbeen both, an opportunity and a challenge for
fund managers. This performance trend is evident within the Gilt fund category as
well, and there has been a revival of investor interest in such funds, with a wide
range of underperformance and high performance.
Liquid and other short-term funds have served their purpose of liquidity
management in the last 10 years.The category sees the lowest participation
from individual investors, at just 8% of AUM as of September 2015, as retail
investors continue to prefer bank deposits. There is considerable fund flow

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across these

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categories within the short-term, in line with the dynamic shifts of the yield curve at
the shorter-end. In the recent past there has been significant alpha generated by fixed
income plans, however, given the close-ended nature of these funds, the price of
higher performance comes with a price of illiquidity.At the short and medium end
of the yield curve there have emerged a few new products such as credit
opportunity funds. The success of such funds is entirely dependent on a deepening
bond market, as investors and fund managers look for newer sources of generating
alpha. GROWTH DRIVERS
Apart from registering AUM growth, the last few years has seen the industry
demonstrate growth on other fronts including increase in individual investors, serving
hitherto un-served markets, etc. Interplay across three critical factors has
culminated in this increase, with the key growth drivers being:
a. Improvement in key economic parameters
An improvement in the economic environment over the last 3-4 years has
helped all categories of mutual fund investors to increase their investment in mutual
funds.Increase in personal income fuelled by growth in GDP has led to an
improvement in the surplus available for household saving. Indian households saving
pattern has for the first time in 15 years shown a decline in savings in physical assets,
and the same has been channelized to financial assets.While Indian households have
always shown a preference for bank and nonbank deposits, FY15 household financial
savings data reveal a declining trend in bank and bank-deposits, yet again for the first
time in 15 years.
Indian markets have demonstrated a high correlation between market
performance and equity inflows. Improving stock market performance in the
last 24-30 months has resulted in stronger equity inflows which is visible in the
growth of demat accounts over the last 12-18 months as well as rise in equity assets of
mutual funds.The rise in household savings, as well as the shift away from physical
assets to financial assets and the subsequent substitution from bank deposits to equity,
mutual funds, insurance, etc augurs well for the industry. Analysis of historical data
reveals that equity mutual funds have outperformed other asset classes in the long-
run.
b. Aligning product, promotion and distribution
Awareness creation and growing emphasis by AMCs on advising individuals
to invest through the SIP route appear to have yielded results. The SIP count

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increased from 6.2 million in March 2014 to 7.3 million over the 12-month period.
Larger number of SIPs from B15 reflects the efficacy of IAP as well as the higher
commission paid to distributors for B15 sales. The average value of SIP has also
increased from Rs 2000 to Rs 2600.
c. Regulatory and technology enablers
Using technology to sell direct plans through mobile apps as well as launch of
the MF Utility portal has made sale possible on a 24*7 basis and made the presence of
an intermediary redundant. Acceptance of E-KYC by some AMCs and using
technology to do the In-Person Verification has also made the transactions easier. An
increase in GDP as well as good stock market performance over the last two –three
years provided investors and especially retail investors with an opportunity to use
mutual funds to create wealth.
The shift in preference from traditional savings channels to mutual funds and
other assets has been made possible due to the awareness building exercises
undertaken by the AMCs, demographic shift in customer base as well as availability
of products that match the needs of the customers. This has been accentuated by
the roll-out and subsequent customer adoption of initiatives that leveraged technology
and the interplay amongst all these factors helped in the growth of the industry.
THE ROAD AHEAD
The industry has utilized the last couple of years productively in capacity
building initiatives by augmenting its technology platform as well as awareness
building programmes and thus creating markets where none existed earlier.
Technology can be put to dual use – both for acquiring customers and meeting
compliance requirements in a cost-effective and time-efficient manner.
These new customers are expected to be more from the individual investor
segment with higher preference for equity schemes, which will have a positive impact
on the profitability. The game changers are expected to supplement this trend further.
1. The demographic shift towards a younger workforce that is more aligned with
technology will provide the industry with a larger customer base;
2. The expected growth of HNIs augurs well for the industry, especially in the context
of the ticket size of their investment and preference for equity;
3. If e-commerce platforms are allowed to sell mutual funds coupled with simpler e-
KYC process, this would open up a larger market for mutual funds;
4. Replicating the model adopted for Jan Dhan savings accounts as well as

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using the payment banks to sell mutual funds, could lead to further increase in the
customer base;
5. Using analytics and data-driven models would help to retain and mine the
customers better;
6. Deploying technology to build gamification models for customer engagement
would resonate better with the young and technologically savvy customer base.
US retail investors and the country’s investment framework have helped the
US mutual fund industry to emerge as the global leader. The fruition of the game
changers would also enable the transformation of the Indian mutual fund industry to
operating model that is more focused on the individual investor, and thereby enable
it to move towards its goal of Rs 20 trillion profitable AUM by 2020.

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CHAPTER-3
COMPANY ANALYSIS

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COMPANY PROFILE

ANGEL BROKING LIMITED:

Angel Broking started its operations in 1987 and has its headquarters in
Mumbai, the commercial capital of India. Angel Broking is involved in the businesses
such as equity trading, portfolio management services, commodities, mutual
funds, IPO, Life Insurance, Investment Advisory and Depository Services. Angel
Broking has more than 5,500 terminals in around 400 branches across India.
Angel Broking is an Indian Stock Broking firm established in 1987.The
company is a member of the Bombay Stock Exchange (BSE), National Stock
Exchange (NSE), National Commodity & Derivatives Exchange Limited (NCDEX)
and Multi Commodity Exchange of India Limited (MCX). It is a depository
participant with Central Depository Services Limited (CDSL). The company has
8500+ sub-brokers and franchisee outlets in more than 850 cities across India.
The company Angel Broking provides financial services to retail clients.Their
services include online stock broking, depository services, commodity trading and
investment advisory services. Wealth management solutions such as personal loans
and insurance are also delivered by this company. In 2006, the company started its
Portfolio Management Services (PMS), IPOs business and Mutual Funds Distribution
(MFD) arm. The company publishes research reports on areas related to investment
broking.
History:
Entrepreneur Dinesh Thakkar started his business in 1987 with a capital of
Five Lakhs Indian Rupees and lost half of the money within eight months. In 1989, he
started off again as a sub-broker. Later, Angel Broking was incorporated as a wealth
management, retail and corporate broking firm in December, 1997. In November
1998, Angel Capital and Debt Market Ltd. gained membership of National Stock
Exchange as a legal entity. The company opened its commodity broking Division in
April, 2004. In November 2007, Birla Sun Life Insurance joined hands with Angel
Broking for distribution of its insurance products In 2007. the World Bank arm
International Finance Corporation bought 18% stake in Angel Broking.

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PRODUCTS:
Angel Broking offers products such as Angel Eye, Angel SpeedPro, Angel
Trade and Angel Swift for online trading. Angel Eye is a browser trading application;
SpeedPro is a trading platform application; Angel Trade offers an online trading
platform for share investors, while Swift consists of a trading app for small devices.

Type Private

Industry Stock Broker and Financial services

Headquarters Mumbai, India

Dinesh Thakkar
Key people
(Chairman & Managing Director)

Equity Trading
Commodities
Portfolio Management Services
Mutual funds
Services
Life insurance
IPO
Depository Services
Investment Advisory

Angel Commodities Broking Pvt. Ltd.


Angel Fincap Pvt. Ltd.
Subsidiaries
Angel Financial Advisors Pvt. Ltd.
Angel Securities Ltd.

Website www.angelbroking.com

THE COMPANY
We are a leading stock broking and wealth management firm, headquartered in
India. We operate on a unique retail focussed stock trading model that provides
revolutionary trading platforms and expertise to a diversified client base. Founded in
1987, we have expanded across all major cities in India.

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The Angel Group is a member of the Bombay Stock Exchange (BSE),
National Stock Exchange (NSE) and the two leading Commodity Exchanges in the
country: NCDEX & MCX. We are also registered as a Depository Participant with
CDSL.
OUR STORY
Angel Broking's tryst with excellence in customer relations began in 1987.
Today, Angel has emerged as one of the most respected stock broking and Wealth
Management Companies in India. With its unique retail focused stock trading
business model, Angel is committed to providing ‘Real Value for Money’ to all its
clients.
ATTENTION INVESTORS
"Prevent Unauthorised transactions in your Trading/Demat Account. Update
your mobile numbers/email IDs with your stock brokers/Depository Participant.
Receive alerts/information of your transaction/all debit and other important
transactions in your Trading/ Demat Account directly from Exchange/CDSL at the
end of the day. Issued in the interest of investors."
"KYC is one time exercise while dealing in securities markets - once KYC is
done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you
need not undergo the same process again when you approach another intermediary."
"No need to issue cheques by investors while subscribing to IPO. Just write the bank
account number and sign in the application form to authorise your bank to make
payment in case of allotment. No worries for refund as the money remains in
investor's account."
"Investment in Securities Market/Commodity Market is subject to Market
Risk.""It has come to our notice that some unauthorized SMSes are being circulated
in the name of Angel Broking inducing clients to invest in scrips not recommended by
Angel. Angel Broking does not send any unsolicited SMS. Investors are cautioned
against such unauthorized SMSes/Emails from unknown sources and requested not to
rely on such SMSes or emails. Clients are advised to verify the genuinity of the source
before initiating any trades in the said scrips. Angel Broking shall not be liable
whatsoever for any losses incurred for trading done based on calls from such
unauthorized sources."

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VISION
To provide best value for money to investors through innovative products,
trading/investment strategies, state-of-the-art technology and personalized services.
CRM POLICY: CUSTOMER IS KING
“A customer is the most important visitor on our premises. He is not
dependent on us, but we are dependent on him. He is not an interruption in our work.
He is the purpose of it. He is not an outsider in our business. He is part of it. We are
not doing him a favour by serving him. He is doing us a favour by giving us an
opportunity to do so.” - Mahatma Gandhi
OUR MOTTO
To have complete harmony between quality in process and continuous
improvement to deliver exceptional service that will delight our Customers and
Clients.
BUSINESS PHILOSOPY
Ethical practices & transparency in all our dealings Customer’s interest above
our own Always deliver what we promise Effective cost management
Mr. Dinesh Thakkar
MANAGING DIRECTOR
The Angel Group of Companies was brought to life by Mr. Dinesh Thakkar.
He ventured into stock trading with an intention to raise capital for his own
independent enterprise. However, he recognised the opportunity offered by the stock
market to serve individual investors. Thus, India’s first retail-focused stock-broking
house was established in 1987. Under his leadership, Angel became the first broking
house to embrace new technology for faster, more effective and affordable services to
retail investors.
Mr. Thakkar is valued for his understanding of the economy and the stock-
market. The print and electronic media often seek his views on the market trend as
well as investment strategies.
Mr. Lalit Thakkar
DIRECTOR
Mr. Lalit Thakkar is the motivating force behind Angel’s highly acclaimed
Research team. He’s been a part of the senior management team since the Angel
Group’s inception.

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His technical and fundamental outlook has provided impetus to Angel’s
Market Research team. Research-based & personalized advisory services are Angel’s
forte, and Mr. Lalit Thakkar has undoubtedly been the brain behind it.
When it comes to analyzing the market, Mr. Lalit Thakkar is truly a genius. His
hands-on experience and fundamental knowledge of the market can predict the market
trend early. His views on the market trend are often quoted in the print and electronic
media.
Mr. Vinay Agrawal
CHIEF EXECUTIVE OFFICER
Mr. Agrawal brings with him over 15 years of rich experience spanning across
BFSI domain. A Chartered Accountant by profession, he has meticulously developed
his expertise in the broking industry covering multiple facets such as finance &
operations, business development, product development and e-broking.
With an intuitive understanding of the financial markets and a strong business
insight, Mr. Agrawal has rapidly risen within the Angel Group. His ingenuity in
developing successful strategies, strong analytical ability, and dedication to the
organization have helped him to become the first CEO of the company.
KEY MANAGEMENT TEAM
Mr. Gagan Singla
CHIEF MARKETING OFFICER
Mr. Gagan Singla has done his B.Tech (Computer Science) from IIT Delhi
and MBA from IIM, Lucknow.
Overall, Gagan has over 12 years of experience across analytics, consulting
and marketing. He has been instrumental in delivering analytics-driven
transformations in multiple industry sectors including banks, insurance, eCommerce,
AMCs and public sector across multiple geographies including US, UK, Europe,
Malaysia, India & Canada. In the last couple of years, In the last couple of
Years,Gagan has taken over leadership roles in digital marketing to drive business
growth in the new digital age.
Gagan has co-authored multiple research publications in the areas of Graph
Theory and Data Mining including American Mathematical Society in the US. He is
an occasional speaker at Universities and Forums on digital marketing and analytics

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including University of California at Berkeley, Indiana University - Kelley School of
Business and University of Notre Dame - Mendoza School of Business.
Mr. Ketan Shah
ASSOCIATE DIRECTOR: IT & B2B BUSINESS
Mr. Shah has over 18 years of rich industry experience, and has been
involved in various aspects of Business Operations in the past.
IT is a strategic function at Angel. And Mr. Ketan Shah is involved in the designing
of Angel’s IT policies and Strategies. Mr. Shah leads all IT-related activities from
planning and budgeting to implementation and maintenance.
With his strong business understanding and process knowledge, Mr. Shah is
also handling Business Development of B2B Channel at Angel. He is responsible to
formulate strategies for complete B2B business operations and also takes care of
developing new business proposition for the vertical.
Mr. Naveen Mathur
ASSOCIATE DIRECTOR: RESEARCH & ADVISORY
A CFA of 1997, Mr. Mathur holds a Post Graduation degree in Financial
Management and Business Finance. He brings with him over 14 years of
experience in the financial markets
He had been associated with Religare Commodities, Karvy Consultants and
with BLB Ltd in the past. He has been involved in several management activities,
treasury operations, corporate and strategic planning, research activities in Futures
and Options markets in his past assignments.
Mr. Mathur is a regular speaker on all the prominent financial news channels.
Mr. Santanu Syam
CHIEF OPERATING OFFICER
Mr. Syam brings with him over 18 years of experience in the field of
Transaction Banking, Wholesale Banking, Treasury Banking, Consumer Banking and
CBS. He started his career with ANZ Grindlays Bank and he was also associated with
Standard Chartered Bank in India as Director Transactional Banking.
Mr. Syam followed up his Engineering degree with an MBA. He has also attended
Banking & Technology seminars organised by SCB Singapore, BSE India & Euro
Finance.

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Mr. Subhash Menon
CHIEF - HUMAN RESOURCE & LEARNING
Mr. Subhash Menon, Chief Human Resource & Learning.
Mr. Menon has an extensive experience of 18 years in Strategic HR
Planning, Talent Acquisition, Training, Leadership Development, Change
Management, Performance Management, Compensation Program and Employee
Engagement Initiatives
Mr. Menon holds a Masters degree in Human resource Development from Narsee
Monjee Institute of Management.
Mr. Vineet Agrawal
CHIEF FINANCIAL OFFICER
Mr. Vineet Agrawal, Chief Financial Officer.
Overall, Vineet has over 19 years of extensive experience across
manufacturing, telecommunications and infrastructure solutions industries. He has
been a part of the Executive Leadership teams with the companies where he has
contributed in delivering excellence in the areas of Strategic Planning, Corporate
Finance, Taxation, Treasury, Forex, Corporate Secretarial regulatory & compliance,
Operations, Commercial and controlling functions across geographies.
Mr.Agrawal is an accredited Chartered Accountant, Cost & Management Accountant
and Company Secretary.

MILESTONES
Our journey over the years
DECEMBER, 1997
Angel Broking Ltd. incorporated as a wealth management, retail and corporate
broking firm
NOVEMBER, 1998
Angel Capital and Debt Market Ltd. incorporated as a member of NSE
MARCH, 2002
Angel Broking develops web-enabled back office software to maximize its
operational efficiency
NOVEMBER, 2002
Angel Broking successfully conducts its first Investor Seminar to increase investor
awareness

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APRIL, 2003
Angel Broking publishes its first research report
APRIL, 2004
Angel Broking expands its basket of services by establishing the Commodity Broking
division
SEPTEMBER, 2004
Angel Broking launches Online Trading Platform facilitating easy and hassle-free
trading for its customers
OCTOBER, 2005
Angel Broking wins the prestigious ‘Major Volume Driver’ Award by BSE for 2004-
MARCH, 2006
Angel Broking on expansion drive crosses 1,00,000 mark in unique trading accounts
JULY, 2006
Angel Broking launches Portfolio Management Services (PMS)
SEPTEMBER, 2006
Angel Broking commences distribution of Mutual Funds and IPOs
OCTOBER, 2006
Angel Broking bags the coveted ‘Major Volume Driver’ Award by BSE for 2005-
DECEMBER, 2006
Angel Broking expands its network by creating 2500 business associates
MARCH, 2007
Angel Broking crosses the benchmark of 2,00,000 unique trading accounts
NOVEMBER, 2007
Angel Broking wins the honoured ‘Major Volume Driver’ Award by BSE for 2006-
NOVEMBER, 2007
Angel Broking augments its business with introduction of Insurance Distribution in
alliance with Birla Sun Life
NOVEMBER, 2008
Angel Broking wins the esteemed ‘Major Volume Driver’ Award by BSE for 2007-
AUGUST, 2008
Angel Broking crosses 5,00,000 mark in unique trading accounts
MAY, 2009
Angel Broking wins two prestigious awards for 'Broking House with Largest Distribution
Network' and 'Best Retail Broking House' at Dun & Bradstreet Equity Broking Awards

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OCTOBER, 2009
Angel Broking bags the coveted ‘Major Volume Driver’ Award by BSE for 2008-09
NOVEMBER, 2010
Angel Broking bags the coveted ‘Major Volume Driver’ Award by BSE for 2009-10
MARCH, 2011
Awarded the 'Best in Contribution Investor Education & Category Enhancement of
the year' and 'Best Commodity Research of the year'
OCTOBER, 2011
Angel Broking bagged the Dun & Bradstreet Equity Broking Awards 2011 for 'Best
Retail Broking House' and 'Fastest Growing Equity Broking House' (Large Firms) at
Dun & Bradstreet Equity Broking Awards 2011
OCTOBER, 2013
Angel Broking was awarded the BSE-IPF D&B Equity Broking Award for 'Best
Retail Equity Broking House' 2013
OCTOBER, 2013
Angel Broking was awarded the 'Broking House with the Largest Distribution
Network', 2013
OCTOBER, 2013
Angel Broking is awarded the 'Top performer in equity segment' of the year - BSE.
OCTOBER, 2014
Angel Broking was awarded the 'Broking House with the Largest Distribution
Network', 2014
OCTOBER, 2014
Angel Broking was awarded the Top Three Client Traded Members in Equity - BSE
OCTOBER, 2014
Angel Broking was awarded the Top Ten Performing Members in New Client
Enrollments - NSE
OCTOBER, 2015
Angel Broking was awarded the 'Top Performer in Equity Segment' of the year - BSE.
OCTOBER, 2015
Angel Broking was awarded the D&B Equity Broking Award for 'Best Equity
Broking House' 2015
MARCH, 2016
Angel Broking was awarded the Top Performing Member in Currency Futures - NSE
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CHAPTER-4
THEORETICAL FRAME WORK

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MANAGES INVESTOR’S MONEY
This is the role of the Asset Management Company (the Third tier). Trustees
appoint the Asset Management Company (AMC), to manage investor’s money. The
AMC in return charges a fee for the services provided and this fee is borne by the
investors as it is deducted from the money collected from them. The AMC’s Board of
Directors must have at least 50% of Directors who are independent directors. The
AMC has to be approved by SEBI.
The AMC functions under the supervision of it’s Board of Directors, and also
under the direction of the Trustees and SEBI. It is the AMC, which in the name of the
Trust, floats new schemes and manage these schemes by buying and selling
securities. In order to do this the AMC needs to follow all rules and regulations
prescribed by SEBI and as per the Investment Management Agreement it signs with
the Trustees. If any fund manager, analyst intends to buy/ sell some securities, the
permission of the Compliance Officer is a must. A compliance Officer is one
ofthe most important persons in the AMC. Whenever the fund intends to launch a
new scheme, the AMC has to submit a Draft Offer Document to SEBI. This
draft offer document, after getting SEBI approval becomes the offer document of the
scheme.
The Offer Document (OD) is a legal document and investors rely upon the
information provided in the OD for investing in the mutual fund scheme. The
Compliance Officer has to sign the Due Diligence Certificate in the OD. This
certificate says that all the information provided inside the OD is true and correct.
This ensures that there is accountability and somebody is responsible for the
OD. In case there is no compliance officer, then senior executives like CEO,
Chairman of the AMC has to sign the due diligence certificate. The certificate ensures
that the AMC takes responsibility of the OD and its contents.
CUSTODIAN
A custodian’s role is safe keeping of physical securities and also keeping a tab
on the corporate actions like rights, bonus and dividends declared by the companies in
which the fund has invested. The Custodian is appointed by the Board of Trustees.
The custodian also participates in a clearing and settlement system through approved
depository companies on behalf of mutual funds, in case of dematerialized securities.

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In India today, securities (and units of mutual funds) are no longer held in physical
form but mostly in dematerialized form with the Depositories. The holdings are held
in the Depository through Depository Participants (DPs). Only the physical securities
are held by the Custodian. The deliveries and receipt of units of a mutual fund are
done by the custodian or a depository participant at the instruction of the AMC and
under the overall direction and responsibility of the Trustees. Regulations provide that
the Sponsor and the Custodian must be separate entities.
ROLE OF THE AMC
The role of the AMC is to manage investor’s money on a day to day basis.
Thus it is imperative that people with the highest integrity are involved with this
activity. The AMC cannot deal with a single broker beyond a certain limit of
transactions. The AMC cannot act as a Trustee for some other Mutual Fund. The
responsibility of preparing the OD lies with the AMC. Appointments of
intermediaries like independent financial advisors (IFAs), national and regional
distributors, banks, etc. is also done by the AMC. Finally, it is the AMC which is
responsible for the acts of its employees and service providers. As can be seen, it is
the AMC that does all the operations.
All activities by the AMC are done under the name of the Trust, i.e. the mutual
fund. The AMC charges a fee for providing its services. SEBI has prescribed limits
for this. This fee is borne by the investor as the fee is charged to the scheme, assets.
An important point to note here is that this fee is included in the overall expenses
permitted by SEBI. There is a maximum limit to the amount that can bein fact, the fee
is charged as a percentage of the scheme’s netassets. An important point to note here
is that this fee is included in the overall expenses permitted by SEBI. There is a
maximum limit to the amount that can be charged as expense to the scheme, and this
fee has to be within that limit. Thus regulations ensure that beyond a certain limit,
investor’s money is not used for meeting expenses.
NEW FUND OFFER
3 – tier structure is in place, the AMC launches new schemes, under the
name of the Trust, after getting approval from the Trustees and SEBI. The launch of a
new scheme is known as a New Fund Offer (NFO). We see NFOs hitting
markets regularly. It is like an invitation to the investors to put their money into
the mutual fund scheme by subscribing to its units. When a scheme is launched, the
distributors
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talk to potential investors and collect money from them by way of cheques or demand
drafts. Mutual funds cannot accept cash. (Mutual funds units can also be purchased
on-line through a number of intermediaries who offer on-investor reads the Offer
Document (OD) carefully to understand the risks associated with the scheme.
ROLE OF A REGISTRAR AND TRANSFER AGREEMENT
Registrars and Transfer Agents (RTAs) perform the important role of
maintaining investor records. All the New Fund Offer (NFO) forms, redemption
forms (i.e. when an investor wants to exit from a scheme, it requests for redemption)
go to the RTA’s office where the information is converted from physical to electronic
form. How many units will the investor get, at what price, what is the applicable
NAV, how much money will he get in case of redemption, exit loads, folio number,
etc. is all taken care of by the RTA.
PROCEDURE FOR INVESTING IN AN NFO
The investor has to fill a form, which is available with the distributor. The
investor must read the Offer Document (OD) before investing in a mutual fund
scheme. In case the investor does not read the OD, he must read the Key Information
Memorandum (KIM), which is available with the application form. Investors have the
right to ask for the KIM/ OD from the distributor. Once the form is filled and the
cheque is given to the distributor, he forwards both these documents to the RTA.
The RTA after capturing all the information from the application form into the
system, sends the form to a location where all the forms are stored and the cheque is
sent to the bank where the mutual fund has an account. After the cheque is cleared,
the RTA then creates units for the investor. The same process is followed in case an
investor intends to invest in a scheme, whose units are available for subscription on an
on-going basis, even after the NFO period is over.
INVESTOR’S RIGHTS & OBLIGATIONS
MUTUAL FUND PRODUCTS AND FEATURES
EQUITY FUNDS A variety of schemes are offered by mutual funds. It is
critical for investors to know the features of these products, before money is invested
in them. Let us first understand what are Open Ended and Close Ended funds.

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OPEN ENDED AND CLOSE ENDED FUNDS
Equity Funds (or any Mutual Fund scheme for that matter) can either be open
ended or close ended. An open ended scheme allows the investor to enter and exit at
his convenience, anytime (except under certain conditions) whereas a close
ended scheme restricts the freedom of entry and exit. Whenever a new fund is
launched by an AMC, it is known as New Fund Offer (NFO). Units are offered to
investors at the par value of Rs. 10/ unit. In case of open ended schemes, investors
can buy the units even after the NFO period is over.
Thus, when the fund sells units, the investor buys the units from the fund and
when the investor wishes to redeem the units, the fund repurchases the units from the
investor. This can be done even after the NFO has closed. The buy / sell of units takes
place at the Net Asset Value (NAV) declared by the fund. The freedom to invest after
the NFO period is over is not there in close ended schemes. Investors have to
invest only during the NFO period; i.e. as long as the NFO is on or the scheme is open
for subscription. Once the NFO closes, new investors cannot enter, nor can
existing investors exit, till the term of the scheme comes to an end.
However, in order to provide entry and exit option, close ended mutual funds
list their schemes on stock exchanges. This provides an opportunity for investors to
buy and sell the units from each other. This is just like buying / selling shares on the
stock exchange. This is done through a stock broker. The outstanding units of the fund
does not increase in this case since the fund is itself not selling any units. Sometimes,
close ended funds also offer ‘buy-back of fund shares / units”, thus offering another
avenue for investors to exit the fund. Therefore, regulations drafted in India permit
investors in close ended funds to exit even before the term is over.
EQUITY FUNDS
Salient Features These are by far the most widely known category of funds
though they account for broadly 40% of the industry’s assets, while the remaining
60% is contributed by debt oriented funds. Equity funds essentially invest the
investor’s money in equity shares of companies. Fund managers try and identify
companies with good future prospects and invest in the shares of such companies.
They generally are considered as having the highest levels of risks (equity share
prices can fluctuate a lot), and hence, they also offer the probability of maximum
returns.

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However, High Risk, High Return should not be understood as “If I take high
risk I will get high returns”. Nobody is guaranteeing higher returns if one takes high
risk by investing in equity funds, hence it must be understood that “If I take high risk,
I may get high returns or I may also incur losses”.

EQUITY FUND DEFINITION


Equity Funds are defined as those funds which have at least 65% of their
Average Weekly Net Assets invested in Indian Equities. This is important from
taxation point of view, as funds investing 100% in international equities are also
equity funds from the investors’ asset allocation point of view, but the tax laws do not
recognise these funds as Equity Funds and hence investors have to pay tax on the
Long Term Capital Gains made from such investments (which they do not have to in
case of equity funds which have at least 65% of their Average Weekly Net Assets
invested in Indian Equities). Equity Funds come in various flavours and the industry
keeps innovating to make products available for all types of investors.
Relatively safer types of Equity Funds include Index Funds and diversified
Large Cap Funds, while the riskier varieties are the Sector Funds. However, since
equities as an asset class are risky, there is no guaranteeing returns for any type of
fund. International Funds, Gold Funds (not to be confused with Gold ETF) and Fund
of Funds are some of the different types of funds, which are designed for different
types of investor preferences. .
INDEX FUND
Equity Schemes come in many variants and thus can be segregated according
to their risk levels. At the lowest end of the equity funds risk – return matrix come the
index funds while at the highest end come the sectoral schemes or specialty schemes.
These schemes are the riskiest amongst all types’ schemes as well. However, since
equities as an asset class are risky, there is no guaranteeing returns for any type of
fund. Index Funds invest in stocks comprising indices, such as the Nifty 50, which is a
broad based index comprising 50 stocks.
There can be funds on other indices which have a large number of stocks
such as the CNX Midcap 100 or S&P CNX 500. Here the investment is spread
across a large number of stocks. In India today we find many index funds based on
the Nifty
50 index, which comprises large, liquid and blue chip 50 stocks. The objective of a
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typical Index Fund states – ‘This Fund will invest in stocks comprising the Nifty and
in the same proportion as in the index’. The fund manager will not indulge in research
and stock selection, but passively invest in the Nifty 50 scrips only, i.e. 50 stocks
which form part of Nifty 50, in proportion to their market capitalisation.
Due to this, index funds are known as passively managed funds. Such passive
approach also translates into lower costs as well as returns which closely tracks the
benchmark index return (i.e. Nifty 50 for an index fund based on Nifty 50). Index
funds never attempt to beat the index returns, their objective is always to mirror
the index returns as closely as possible. The difference between the returns generated
by the benchmark index and the Index Fund is known as tracking error.
Thus there will be a difference between the returns of the scheme and the
index. There may be a difference in returns due to cash position held by the fund
manager. This will lead to investor’s money not being allocated exactly as per the
index but only very close to the index.
If the index’s portfolio composition changes, it will require some time for the
fund manager to exit the earlier stock and replace it with the new entrant in the index.
These and other reasons like dividend accrued but not distributed, accrued expenses
etc. all result in returns of the scheme being different from those delivered by the
underlying index. This difference is captured by Tracking Error.
As is obvious, this should be as low as possible. The fund with the least
Tracking Error will be the one which investors would prefer since it is the fund
tracking the index closely. Tracking Error is also function of the scheme expenses.
Lower the expenses, lower the Tracking Error. Hence an index fund with low expense
ratio, generally has a low Tracking Error.
DIVERSIFIED LARGE CAP FUNDS
Another category of equity funds is the diversified large cap funds. These are
funds which restrict their stock selection to the large cap stocks – typically the top 100
or 200 stocks with highest market capitalization and liquidity. It is generally
perceived that large cap stocks are those which have sound businesses, strong
management, globally competitive products and are quick to respond to market
dynamics. Therefore, diversified large cap funds are considered as stable and safe.
However, since equities as an asset class are risky, there is no guaranteeing
returns for any type of fund. These funds are actively managed funds unlike the index

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funds which are passively managed, In an actively managed fund the fund manager
pores over data and information, researches the company, the economy, analyses
market trends, 18 takes into account government policies on different sectors and then
selects the stock to invest. This is called as active management. A point to be noted
here is that anything other than an index funds are actively managed funds and they
generally have higher expenses as compared to index funds. In this case, the fund
manager has the choice to invest in stocks beyond the index. Thus, active decision
making comes in. Any scheme which is involved in active decision making is
incurring higher expenses and may also be assuming higher risks.
This is mainly because as the stock selection universe increases from index
stocks to largecaps to midcaps and finally to smallcaps, the risk levels associated with
each category increases above the previous category. The logical conclusion from
this is that actively managed funds should also deliver higher returns than the index, as
investors must be compensated for higher risks. But this is not always so. Studies
have shown that a majority of actively managed funds are unable to beat the index
returns on a consistent basis year after year.
Secondly, there is no guaranteeing which actively managed fund will beat the
index in a given year. Index funds therefore have grown exponentially in some
countries due to the inconsistency of returns of actively managed funds.
MIDCAP FUNDS
After largecap funds come the midcap funds, which invest in stocks belonging
to the mid cap segment of the market. Many of these midcaps are said to be the
‘emerging bluechips’ or ‘tomorrow’s largecaps’. There can be actively managed or
passively managed mid cap funds. There are indices such as the CNX Midcap index
which tracks the midcap segment of the markets and there are some passively
managed index funds investing in the CNX Midcap companies.
SECTORAL FUNDS
Funds that invest in stocks from a single sector or related sectors are called
Sectoral funds. Examples of such funds are IT Funds, Pharma Funds, Infrastructure
Funds, etc. Regulations do not permit funds to invest over 10% of their Net Asset
Value in a single company. This is to ensure that schemes are diversified enough and
investors are not subjected to undue risk.

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This regulation is relaxed for sectoral funds and index funds. There are many
other types of schemes available in our country, and there are still many products and
variants that have yet to enter our markets. While it is beyond the scope of this
curriculum to discuss all types in detail, 19 there is one emerging type of scheme,
namely Exchange Traded Funds or ETFs, which is discussed in detail in the next
section.
OTHER EQUITY SCHEMES
Arbitrage Funds These invest simultaneously in the cash and the derivatives
market and take advantage of the price differential of a stock and derivatives by
taking opposite positions in the two markets (for e.g. stock and stock futures).

MULTICAP FUNDS
These funds can, theoretically, have a smallcap portfolio today and a largecap
portfolio tomorrow. The fund manager has total freedom to invest in any stock from
any sector.
QUANT FUNDS
A typical description of this type of scheme is that ‘The system is the fund
manager’, i.e. there are some predefined conditions based upon rigorous backtesting
entered into the system and as and when the system throws ‘buy’ and ‘sell’ calls, the
scheme enters, and/ or exits those stocks.
P/ E RATIO FUND
A fund which invests in stocks based upon their P/E ratios. Thus when a stock
is trading at a historically low P/E multiple, the fund will buy the stock, and when the
P/E ratio is at the upper end of the band, the scheme will sell. Concept Clarifier – P/ E
Ratio P/ E Ratio stands for Price Earnings Ratio. It is also known as Price Earnings
multiple.
This is a ratio of the current market price (CMP) of a share to its earning per
share (EPS). Thus if a company has issued 100 cr. shares and the profit after tax; i.e.
the net profit of the company is Rs. 2000 cr., then the EPS for this company will be
2000/ 100 = Rs. 20. If this company’s share’s CMP is Rs. 200, then the P/E ratio will
be 200/20 = 10x. The unit of P/E Ratio is ‘times’. In the above example we say that
the P/E Ratio is 10 times; i.e. the price (CMP) of the company’s share is 10 times its
EPS.

46
46
GROWTH SCHEMES
Growth schemes invest in those stocks of those companies whose profits are
expected to grow at a higher than average rate. For example, telecom sector is a
growth sector because many people in India still do not own a phone – so as they buy
more and more cell phones, the profits of telecom companies will increase. Similarly,
infrastructure; we do not have well connected roads all over the country, neither do
we have best of ports or airports.
For our country to move forward, this infrastructure has to be of world class.
Hence companies in these sectors may potentially grow at a relatively faster
pace. Growth schemes will invest in stocks of such companies. Concept Clarifier –
Growth and Value Investing Investment approaches can be broadly classified into
Growth based and Value Based. While Growth investing refers to investing in fast
growing companies, Value investing approach is based upon the premise that a stock/
sector is currently undervalued and the market will eventually realize its true value. So,
a value investor will buy such a stock/ sector today and wait for the price to move up.
When that happens, the Value investor will exit and search for another
undervalued opportunity. Hence in Growth investing, it is the growth momentum that
the investor looks for, whereas in Value investing, the investor looks for the mismatch
between the current market price and the true value of the investment.
Contra Funds can be said to be following a Value investing approach. For
example, when interest rates rise, people defer their purchases as the cost of
borrowing increases. This affects banks, housing and auto sectors and the stocks of
these companies come down. A Value fund manager will opine that as and when
interest rates come down these stocks will go up again; hence he will buy these stocks
today, when nobody wants to own them. Thus he will be taking a contrarian call.
The risk in Growth investing is that if growth momentum of the company goes
down slightly, then the stock’s price can go down rather fast, while in Value
investing, the risk is that the investor may have to wait for a really long time before
the market values the investment correctly.

47
47
NET ASSET VALUE
Net Assets of a scheme is that figure which is arrived at after deducting all
scheme liabilities from its asset. NAV is calculated by dividing the value of Net
Assets by the outstanding number of Units. Concept Clarifier – NAV Assets Rs. Crs.
Liabilities Rs. Crs. Shares 345 Unit Capital 300 Debentures 23 Reserves & Surplus
85.7 Money Market Instruments 12 Accrued Income 2.3 Accrued 1.5 23 Expenditure
Other Current Assets 1.2 Other Current Liabilities 0.5 Deferred Revenue Expenditure
4.2 387.7 387.7 Units Issued (Cr.) 30 Face Value (Rs.) 10 Net Assets (Rs.)
385.7
NAV (Rs.) 12.86 All Figures in Rs. Cr The above table shows a typical scheme
balance sheet.
Investments are entered under the assets column. Adding all assets gives the
total of Rs. 387.7 cr. From this if we deduct the liabilities of Rs. 2 cr. i.e. Accrued
Expenditure and Other Current Liabilities, we get Rs. 385.7 cr as Net Assets of the
scheme. The scheme has issued 30 crs. units @ Rs. 10 each during the NFO. This
translates in Rs. 300 crs. being garnered by the scheme then. This is represented by
Unit Capital in the Balance Sheet. Thus, as of now, the net assets worth Rs. 385.7
cr are to be divided amongst 30 crs. units. This means the scheme has a Net Asset
Value or NAV of Rs. 12.86.
The important point that the investor must focus here is that the Rs. 300 crs.
garnered by the scheme has increased to Rs. 387 crs., which translates into a 29.23%
gain, whereas, the return for the investor is 28.57% (12.86-10/ 10 = 28.57%). Concept
Clarifier – Fund Fact Sheet Investors must read the Offer Document (OD) before
investing. If not the OD, at least the Key Information Memorandum (KIM), which has
to be provided with the application form. After an investor has entered into a scheme,
he must monitor his investments regularly. This can be achieved by going through the
Fund Fact Sheet.
This is a monthly document which all mutual funds have to publish. This
document gives all details as regards the AUMs of all its schemes, top holdings in
all the portfolios of all the schemes, loads, minimum investment, performance over
1, 3,
5 years and also since launch, comparison of scheme’s performance with the
benchmark index (most mutual fund schemes compare their performance with a
benchmark index such as the Nifty 50) over the same time periods, fund managers

48
48
outlook, portfolio 24 composition, expense ratio, portfolio turnover, risk adjusted

49
49
returns, equity/ debt split for schemes, YTM for debt portfolios and other information
which the mutual fund considers important from the investor’s decision making point
of view. In a nutshell, the fund fact sheet is the document which investors must read,
understand and keep themselves updated with.
EXPENSE RATIO
Among other things that an investor must look at before finalising a scheme, is
that he must check out the Expense Ratio. Concept Clarifier – Expense Ratio Expense
Ratio is defined as the ratio of expenses incurred by a scheme to its Average Weekly
Net Assets. It means how much of investors money is going for expenses and how
much is getting invested. This ratio should be as low as possible.
Assume that a scheme has average weekly net assets of Rs 100 cr. and the
scheme incurs Rs. 1 cr as annual expenses, then the expense ratio would be 1/ 100 =
1%. In case this scheme’s expense ratio is comparable to or better than its peers then
this scheme would qualify as a good investment, based on this parameter only. If this
scheme performs well and its AUM increases to Rs. 150 cr in the next year whereas
its annual expenses increase to Rs. 2 cr, then its expense would be 2/ 150 = 1.33%. It
is not enough to compare a scheme’s expense ratio with peers. The scheme’s expense
ratio must be tracked over different time periods. Ideally as net assets increase, the
expense ratio of a scheme should come down.
PORTFOLIO TURNOVER
Fund managers keep churning their portfolio depending upon their outlook
for the market, sector or company. This churning can be done very frequently or may
be done after sufficient time gaps.
There is no rule which governs this and it is the mandate of the scheme and the
fund managers’ outlook and style that determine the churning. However, what is
important to understand is that a very high churning frequency will lead to higher
trading and transaction costs, which may eat into investor returns. Portfolio Turnover
is 25 the ratio which helps us to find how aggressively the portfolio is being churned.
While churning increases the costs, it does not have any impact on the Expense Ratio,
as transaction costs are not considered while calculating expense ratio. Transaction
costs are included in the buying & selling price of the scrip by way of brokerage,
STT, cess, etc.

50
50
CHAPTER – 5
DATA ANALYSIS

50
50
Table 1: Nifty performance in 2013
change in % of change in
Date Nifty
nifty nifty
Jan-13 5506 - -
Feb-13 5333 -173 -3.14
Mar-13 5834 501 9.38
Apr-13 5750 -84 -1.44
May-13 5473 -276 -4.81
Jun-13 5647 174 3.18
Jul-13 5482 -165 -2.93
Aug-13 5001 -481 -8.77
Sep-13 4943 -58 -1.15
Oct-13 5327 383 7.76
Nov-13 4832 -495 -9.28
Dec-13 4624 -208 -4.30

annual return -882 -16.01


mean -80.15 -1.46
S.D 6.03
variance 36.31
sharp ratio -3.82

51
Graph:

% of change in nifty
15.00

10.00

5.00

0.00 % of change in nifty


-

May-13
Mar-13

Oct-13
Nov-13
Jun-13
Jul-13

Sep-13
Aug-13

Dec-13
Feb-13

Apr-13
-5.00

-10.00

-15.00

Interpretation:
For the year 2013 CNX NIFTY declined by -16.01 % or -822 , Mean is -1.46 % or
-80.15. Out of 12 month NIFTY declined for 9 months & maximum loss is
-9.28% which is in the month of November. Out of 12 months NIFTY growth for 3
months & maximum profit is 9.38 % which is in the month of March. In the year
2013 the risk
adjusted return by using sharp ratio is -3.82.

52
Table 2: Nifty performance in 2014

Change in % Change in
Date NIFTY NIFTY NIFTY
Dec-13 4624 - -
Jan-14 5199 575 12.43
Feb-14 5385 186 3.58
Mar-14 5296 -90 -1.66
Apr-14 5248 -47 -0.9
May-14 4924 -324 -6.17
Jun-14 5279 355 7.2
Jul-14 5229 -50 -0.95
Aug-14 5259 30 0.56
Sep-14 5703 445 8.46
Oct-14 5620 -84 -1.47
Nov-14 5880 260 4.63
Dec-14 5905 25 0.43

Annual 1281 27.7


Mean 106.73 2.31
S.D 5.23
Variance 27.31
Sharp ratio 3.96

53
Graph:

% Change in NIFTY
15.00

10.00

5.00
% Change in NIFTY
0.00

May-14

Aug-14

Oct-14
Nov-14
Mar-14
Apr-14

Jul-14

Sep-14
Jan-14

Jun-14

Dec-14
Feb-14

-5.00

-10.00

Interpretation:
For the year 2014 CNX NIFTY declined by 27.70 % or 1281 , Mean is 2.31
% or 106.73 .Out of 12 month NIFTY declined for 5 months & maximum loss is -
6.17% which is in the month of May. Out of 12 months NIFTY growth for 7 months
& maximum profit is 12.43 % which is in the month of January. In the year 2014
the risk adjusted return by using sharp ratio is -3.96.

54
54
Table 3: Nifty performance in 2015
DATA NIFTY CHANGE IN %CHANGE IN
Dec-14 5905
Jan-15 6035 129.65 2.20
Feb-15 5693 -341.70 -5.66
Mar-15 5683 -10.50 -0.18
Apr-15 5930 247.65 4.36
May-15 5986 55.75 0.94
Jun-15 5842 -143.75 -2.40
Jul-15 5742 -100.20 -1.72
Aug-15 5472 -270.20 -4.71
Sep-15 5735 263.50 4.82
Oct-15 6299 563.85 9.83
Nov-15 6176 -123.05 -1.95
Dec-15 6304 127.90 2.07

ANNUAL 398.90 6.76


MEAN 33.24 0.56
S.D 4.38
VARIANCE 19.16
SHARP -0.06

Graph:

Interpretation:
For the year 2015 CNX NIFTY declined by 6.76% or 398.9 , Mean is 0.56% or
33.24 .Out of 12 month NIFTY declined for 6 months & maximum loss is -5.66%
which is in the month of February .Out of 12 months NIFTY growth for 6 months &
maximum profit is 9.83% which is in the month of November. In the year 2015

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55
the risk adjusted return by using sharp ratio is -0.06.

56
56
Table 4:Nifty performance in 2016
DATA NIFTY CHANGE IN %CHANGE IN

Dec-15 6304 - -

Jan-16 6090 -214.50 -3.40

Feb-16 6277 187.45 3.08

Mar-16 6704 427.25 6.81

Apr-16 6696 -7.80 -0.12

May-16 7230 533.55 7.97

Jun-16 7611 381.40 5.28

Jul-16 7721 109.95 1.44

Aug-16 7954 233.05 3.02

Sep-16 7965 10.45 0.13

Oct-16 8322 357.40 4.49

Nov-16 8588 266.05 3.20

Dec-16 8283 -305.55 -3.56

ANNUAL 1978.70 31.39


MEAN 164.89 2.62
S.D 3.64
VARIANCE 13.28
SHARP 6.69

56
Graph:
%CHANGE IN NIFTY
10.00

5.00

%CHANGE IN NIFTY
0.00

May-16
Feb-16

Jun-16
Jul-16

Sep-16

Nov-16
Jan-16

Mar-16
Apr-16

Aug-16

Dec-16
Oct-16
-5.00

Interpretation:
For the year 2016 CNX NIFTY declined by 31.39% or 1978.7 , Mean is
2.62% or 164.89.Out of 12 month NIFTY declined for 3 months & maximum loss is -
3.58% which is in the month of December. Out of 12 months NIFTY growth for 9
months & maximum profit is 7.97% which is in the month of May. In the year 2016
the risk adjusted return by using sharp ratio is 0.09.

57
Table 5: Nifty performance in 2017
DATA NIFTY change in nifty % change in nifty
Dec-16 8283 -
Jan-17 8809 526 6.35
Feb-17 8845 36 0.41
Mar-17 8491 -354 -4.00
Apr-17 8182 -310 -3.65
May-17 8434 252 3.08
Jun-17 8369 -65 -0.77
Jul-17 8533 164 1.96
Aug-17 7971 -562 -6.58
Sep-17 7949 -22 -0.28
Oct-17 8066 117 1.47
Nov-17 7935 -131 -1.62
Dec-17 7946 11 0.14

Annual return -336 -4.06


Mean -28.03 -0.34
S.D 3.45
VARIANCE 11.90
SHARP RATIO -3.21

58
GRAPH:

% change in nifty
10.00

5.00

0.00 % change in nifty

May-17

Oct-17
Nov-17
Jan-17

Apr-17

Jun-17
Jul-17
Aug-17
Sep-17

Dec-17
Feb-17
Mar-17

-5.00

-10.00

Interpretation:
For the year 2017 CNX NIFTY declined by -4.06% or -336 , Mean is -
0.34% or -28.03 .Out of 12 month NIFTY declined for 6 months & maximum loss is
-6.58% which is in the month of August .Out of 12 months NIFTY growth for 6
months & maximum profit is 6.35% which is in the month of January. In the
year 2017 the risk adjusted return by using sharp ratio is -3.12.

59
59
Table 6: Nifty performance in 2018
DATA NIFTY Change in nifty % of change in nifty
Dec-17 7946
Jan-18 7564 -383 -4.82
Feb-18 6987 -577 -7.62
Mar-18 7738 751 10.75
Apr-18 7850 111 1.44
May-18 8160 310 3.95
Jun-18 8288 128 1.56
Jul-18 8328 41 0.49

Annual 382 4.81


Mean 54.57 0.69
S.D 5.95
variance 35.43
sharp ratio -0.37

Graph:

Interpretation:
For the year 2018 CNX NIFTY declined by 4.81% or 382 , Mean is -0.69%
or 54.57.Out of 12 month NIFTY declined for 2 months & maximum loss is -7.62%
which is in the month of February .Out of 12 months NIFTY growth for 5 months &
maximum profit is 10.75% which is in the month of March. In the year 2018 the
risk adjusted return by using sharp ratio is -0.37.
60
60
Table 1: SBI blue chip fund in 2013
DATA NAV CHANGE IN % OF NAV
JAN -2011 15.9
FEB 13.86 -2.04 -12.830
MAR 13.83 -0.03 -0.216
APR 14.84 1.01 7.303
MAY 14.52 -0.32 -2.156
JUN 14.34 -0.18 -1.240
JUL 14.42 0.08 0.558
AUG 14.2 -0.22 -1.526
SEP 13.14 -1.06 -7.465
OCT 12.6 -0.54 -4.110
NOV 13.3 0.7 5.556
DEC 12.69 -0.61 -4.586

ANNUAL RETURN -3.21 -20.189

MEAN -0.292 -1.835

SD 5.589

VARIANCE 31.233
SHARP RATIO -4.865

61
Graph:

% OF NAV
10

0
% OF NAV
-5

-10

-15

Interpretation:
For the year 2013 annual return of NAV declined by -% 3.21or -20.189 ,
Mean is -0.292% or -1.835%.Out of 12 month NAV declined for 2 months &
maximum loss is -12.830% which is in the month of February .Out of 12 months
NAV growth for 5 months & maximum profit is 7.303% . which is in the month of
March. In the year 2013 the risk adjusted return by using sharp ratio is -4.865.

62
Table 2: SBI blue chip fund in 2014
DATA NAV VALUE CHANGE IN NAV %OF NAV
DEC 12.69
JAN 11.98 -0.71 -5.595
FEB 13.3 1.32 11.018
MAR 13.72 0.42 3.158
APR 13.91 0.19 1.385
MAY 13.76 -0.15 -1.078
JUN 12.97 -0.79 -5.741
-JUL 14.02 1.05 8.096
AUG 14.2 0.18 1.284
SEP 14.47 0.27 1.901
OCT 15.55 1.08 7.464
NOV 15.58 0.03 0.193
DEC 16.32 0.74 4.750

ANNUAL RETURN 3.63 28.605

MEAN 0.303 2.384

SD 5.115

VARIANCE 26.166
SHARP RATIO 4.224

63
GRAPH:

%OF NAV
15

10

5
%OF NAV
0

-5

-10

Interpretation:
For the year 2014 Annual return of NAV declined by 3.63% or
28.605% , Mean is 0.303% or 2.384.Out of 12 month NAV declined for 2 months &
maximum loss is -5.595% which is in the month of February .Out of 12 months
NIFTY growth for 5 months & maximum profit is 11.018% which is in the month of
March. In the year 2014 the risk adjusted return by using sharp ratio is 4.224.

64
Table 3: : SBI blue chip fund in 2015
DATA NAV VALUE CHANGE IN NAV % OF NAV
DEC 16.32
JAN 16.72 0.400 2.451
FEB 16.86 0.140 0.837
MAR 16.2152 -0.645 -3.824
APR 16.1828 -0.032 -0.200
MAY 16.8712 0.688 4.254
JUN 16.6526 -0.219 -1.296
JUL 16.3659 -0.287 -1.722
AUG 15.7812 -0.585 -3.573
SEP 15.2545 -0.527 -3.338
OCT 16.0911 0.837 5.484
NOV 17.5069 1.416 8.799
DEC 17.4406 -0.066 -0.379

ANNUAL 1.121 6.866

MEAN 0.093 0.572

SD 3.942

VARIANCE 15.543
SHARP RATIO -0.034

65
Graph:

% OF NAV
10
8
6
4
2 % OF NAV
0
-2

JUN

NOV
DEC

AUG
FEB

DEC
MAR
APR
MAY

OCT
JAN

JUL

SEP
-4
-6

Interpretation:
For the year 2015 Annual return of NAV declined by 1.121% or 6.866% ,
Mean is 0.093% or 0.572%.Out of 12 month NAV declined for 2 months &
maximum loss is -3.338% which is in the month of February .Out of 12 months NAV
growth for 5 months & maximum profit is 8.799% which is in the month of March.
In the year 2015 the risk adjusted return by using sharp ratio is -0.034.

66
Table 4: SBI blue chip fund in 2016

DATA NAV VALUE CHANGE IN NAV % OF NAV


DEC 17.4406
JAN 17.8696 0.429 2.460
FEB 17.3839 -0.486 -2.718
MAR 18.0534 0.669 3.851
APR 19.1285 1.075 5.955
MAY 19.2202 0.092 0.479
JUN 21.2372 2.017 10.494
JUL 22.701 1.464 6.893
AUG 22.7767 0.076 0.333
SEP 24.2775 1.501 6.589
OCT 24.5756 0.298 1.228
NOV 25.5927 1.017 4.139
DEC 26.4931 0.900 3.518

ANNUAL RETURN 9.053 51.905

MEAN 0.754 4.325

SD 3.573

VARIANCE 12.770
SHARP RATIO 12.566

67
Graph:

% OF NAV
15

10

5 % OF NAV

-5

Interpretation:

For the year 2016 Annual return of NAV declined by 9.053% or 51.905% ,
Mean is 0.754% or 4.325%.Out of 12 month NAV declined for 2 months &
maximum loss is -2.718% which is in the month of February .Out of 12 months NAV
growth for 5 months & maximum profit is 10.494% which is in the month of
March. In the year 2016 the risk adjusted return by using sharp ratio is 12.566.

68
Table 5: SBI blue chip fund in 2017

DATA NAV VALUE CHANGE IN NAV %OF NAV


DEC 26.4931
JAN 26.3727 -0.120 -0.454
FEB 27.9849 1.612 6.113
MAR 28.9439 0.959 3.427
APR 28.7025 -0.241 -0.834
MAY 27.8273 -0.875 -3.049
JUN 28.1687 0.341 1.227
JUL 28.7171 0.548 1.947
AUG 29.4024 0.685 2.386
SEP 27.2988 -2.104 -7.155
OCT 27.8575 0.559 2.047
NOV 28.2484 0.391 1.403
DEC 28.2421 -0.006 -0.022

ANNUAL RETURN 1.749 6.602

MEAN 0.146 0.550

SD 3.351

VARIANCE 11.229
SHARP RATIO -0.119

69
Graph:

%OF NAV
10

0 %OF NAV

-5

-10

Interpretation:

For the year 2017 Annual return of NAV declined by 10749% or 60602% ,
Mean is 0.146% or 0.550%.Out of 12 month NAV declined for 2 months &
maximum loss is -7.155% which is in the month of February .Out of 12 months NAV
growth for 5 months & maximum profit is 6.113% which is in the month of March.
In the year 2017 the risk adjusted return by using sharp ratio is -0.119.

70
Table 6: SBI blue chip fund in 2018
DATA NAV VALUE CHANGE IN NAV % OF NAV
DEC 28.2421
JAN 28.5397 0.2976 1.05
FEB 27.4077 -1.132 -3.97
MAR 26.5034 -0.9043 -3.30
APR 27.8246 1.3212 4.99
MAY 28.7182 0.8936 3.21
JUN 29.8894 1.1712 4.08
JUL 30.3748 0.4854 1.62

ANNUAL RETURN 2.1327 7.551

MEAN 0.304 1.078

SD 3.505

VARIANCE 12.287
SHARP RATIO 0.157

71
Graph:

% OF NAV
6

0 % OF NAV

-2 DEC JAN FEB MAR APR MAY JUN JUL

-4

-6

Interpretation:

For the year 2018 Annual return of NAV declined by 2.132% or 7.551% ,
Mean is 0.304% or 1.078%.Out of 12 month NIFTY declined for 2 months &
maximum loss is -3.97% which is in the month of February .Out of 12 months
NIFTY growth for 5 months & maximum profit is 4.99% which is in the month of
March. In the year 2018 the risk adjusted return by using sharp ratio is 0.157.

72
Table 1:Birla sun life top 100 performance in 2013

Date Birla sun life top100 change in NAV %change in NAV


Jan-11 24.401
Feb-11 21.8093 -2.59 -10.62
Mar-11 21.9513 0.14 0.65
Apr-11 23.4465 1.50 6.81
May-11 22.9813 -0.47 -1.98
Jun-11 22.8025 -0.18 -0.78
Jul-11 23.0397 0.24 1.04
Aug-11 22.8826 -0.16 -0.68
Sep-11 21.0741 -1.81 -7.90
Oct-11 20.361 -0.71 -3.38
Nov-11 21.4352 1.07 5.28
Dec-11 20.2547 -1.18 -5.51

annual return -4.15 -16.99


Mean -0.35 -1.42
S.D 5.21
varience 27.13
sharp ratio -4.61

73
Graph:

%change in NAV
10

0
%change in NAV
May-13
Feb-13

Sep-13

Nov-13
Jan-13

Mar-13
Apr-13

Jun-13
Jul-13
Aug-13

Dec-13
Oct-13
-5

-10

-15

Interpretation:

For the year 2013 Annual return of NAV declined by -4.15% or -16.99% ,
Mean is -0.35% or -1.42%.Out of 12 month NAV declined for 2 months & maximum
loss is -10.62% which is in the month of February .Out of 12 months NAV growth for
5 months & maximum profit is 6.81% which is in the month of April. In the year
2013 the risk adjusted return by using sharp ratio is -4.61.

74
Table 2: Birla sun life top 100 performance in 2014
Date birla sunlife top100 change in %change in
Dec-13 20.2547
Jan-14 19.0237 -1.23 -6.08
Feb-14 21.4193 2.40 12.59
Mar-14 21.9813 0.56 2.62
Apr-14 22.2179 0.24 1.08
May-14 21.9288 -0.29 -1.30
Jun-14 20.4802 -1.45 -6.61
Jul-14 22.2245 1.74 8.52
Aug-14 22.3519 0.13 0.57
Sep-14 22.3546 0.00 0.01
Oct-14 24.4335 2.08 9.30
Nov-14 24.1675 -0.27 -1.09
Dec-14 25.4801 1.31 5.43

annual return 6.46 33.94


Mean 0.54 2.83
S.D 5.93
Varience 35.15
sharp ratio 4.54

75
Graph:

%change in NAV
15

10

5
%change in NAV
0
May-14
Jan-14

Jul-14

Nov-14
Feb-14
Mar-14

Aug-14
Sep-14
Apr-14

Jun-14

Dec-14
Oct-14
-5

-10

Interpretation:

For the year 2014 Annual return of NAV declined by 6.46% or 33.94% ,
Mean is 0.54% or 2.83%.Out of 12 month NAV declined for 2 months & maximum
loss is -6.61% which is in the month of June .Out of 12 months NAV growth for 5
months & maximum profit is 12.59% which is in the month of February. In the
year 2014 the risk adjusted return by using sharp ratio is 4.54.

76
Table 3: Birla sun life top 100 performance in 2015

Date Birla sun life top100 NAV change in NAV %change in NAV

Dec-14 25.4801

Jan-15 26.2274 0.75 2.93

Feb-15 26.1783 -0.05 -0.19

Mar-15 24.6802 -1.50 -5.72

Apr-15 24.4116 -0.27 -1.09

May-15 25.629 1.22 4.99

Jun-15 25.2095 -0.42 -1.64

Jul-15 25.0448 -0.16 -0.65

Aug-15 24.0738 -0.97 -3.88

Sep-15 24.0071 -0.07 -0.28

Oct-15 25.1905 1.18 4.93

Nov-15 27.7134 2.52 10.02

Dec-15 27.6283 -0.09 -0.31

annual return 1.40 5.34

Mean 0.12 0.45

S.D 4.30

varience 18.5

sharp ratio -0.39

77
Graph:

%change in NAV
15

10

5
%change in NAV
0

-5
May-15
Mar-15

Jul-15

Nov-15
Feb-15

Sep-15
Jan-15

Jun-15

Aug-15

Dec-15
Apr-15

Oct-15
-10

Interpretation:

For the year 2015 Annual return of NAV declined by 1.40% or 5.34% ,
Mean is 0.12% or 0.45%.Out of 12 month NA declined for 2 months & maximum
loss is -5.72% which is in the month of March .Out of 12 months NAV growth for 5
months & maximum profit is 10.02% which is in the month of November. In
the year 2015 the risk adjusted return by using sharp ratio is -0.39.

78
Table 4: Birla sun life top 100 performance in 2016

Date Birla sun life top100 change in %change in


Dec-15 27.6283
Jan-16 28.3611 0.73 2.65
Feb-16 26.939 -1.42 -5.01
Mar-16 28.0969 1.16 4.30
Apr-16 30.5468 2.45 8.72
May-16 30.798 0.25 0.82
Jun-16 35.4323 4.63 15.05
Jul-16 37.2135 1.78 5.03
Aug-16 36.4706 -0.74 -2.00
Sep-16 38.6607 2.19 6.01
Oct-16 38.5572 -0.10 -0.27
Nov-16 40.687 2.13 5.52
Dec-16 42.5288 1.84 4.53

annual 14.17 49.95


Mean 1.18 4.16
S.D 5.21
varience 27.17
sharp ratio 8.24

79
Graph:

%change in NAV
20
15
10
5 %change in NAV
0
May-16

Jul-16

Nov-16
Mar-16
Jan-16
Feb-16

Aug-16
Sep-16
Apr-16

Jun-16

Dec-16
Oct-16
-5
-10

Interpretation:

For the year 2016 Annual return of NAV declined by 14.17% or 49.95% ,
Mean is 1.18% or 4.16%.Out of 12 month NAV declined for 2 months & maximum
loss is -5.01% which is in the month of February .Out of 12 months NAV growth for
5 months & maximum profit is 15.05% which is in the month of January. In the year
2016 the risk adjusted return by using sharp ratio is 8.24.

80
Table 5:2015 birla sun life top 100 performance in 2017

birla sunlife top100 change in %change in


Date NAV NAV NAV
Dec-16 42.5288
Jan-17 42.289 -0.24 -0.56
Feb-17 44.5164 2.23 5.27
Mar-17 45.1419 0.63 1.41
Apr-17 43.5587 -1.58 -3.51
May-17 42.5472 -1.01 -2.32
Jun-17 42.9923 0.45 1.05
Jul-17 43.281 0.29 0.67
Aug-17 44.8211 1.54 3.56
Sep-17 41.0676 -3.75 -8.37
Oct-17 42.0866 1.02 2.48
Nov-17 42.697 0.61 1.45
Dec-17 42.3687 -0.33 -0.77

annual return 0.08 0.19


Mean 0.01 0.02
S.D 3.58
Varience 12.81
sharp ratio -1.90

81
Graph:

%change in NAV
15

10

5
%change in NAV
0
May-17
Jan-17
Feb-17

Aug-17
Sep-17
Apr-17

Jun-17

Nov-17
Dec-17
Mar-75

Jul-17

Oct-17
-5

-10

Interpretation:

For the year 2017 Annual return of NAV declined by 0.08% or 0.19% , Mean is
0.01% or 0.02%.Out of 12 month NAV declined for 2 months & maximum loss is -
2.32% which is in the month of March .Out of 12 months NAV growth for 5 months
& maximum profit is 5.27% which is in the month of February. In the year 2017
the risk adjusted return by using sharp ratio is -1.90.

82
Table 6 : Birla sun life in 2018

Year NAV Change in % Change in


Dec-17 475.68
Jan-18 477.46 1.78 0.37
Feb-18 450.57 -26.89 -5.63
Mar-18 427.05 -23.52 -5.22
Apr-18 463.81 36.76 8.61
May-18 481.02 17.21 3.71
Jun-18 492.71 11.69 2.43
Jul-18 511.37 18.66 3.79
Annual 35.69 7.50
Mean 5.10 1.07
Standard 5.13
Variance 26.32
Sharpe Ratio 0.10
Risk free 7%

83
Graph:

Interpretation
For the year 2018 Birla sun life equity fund increased by 35.69 or
7.50%, Mean is 5.10 or 1.07% out of 7 months. birla sun life equity fund declined for
2 months& maximum loss is -26.89 which is in the month of February and increased
for 5 months maximum profit is 36.76 which is in the month of April. Risk which is
represented with standard deviation is 5.13%,variance is 26.32%.Return which is
represented with sharpe ratio is 0.10%.
Table 1:Reliance top 200 performance in 2013

CHANGE IN % OF
DATE NAV VALUE NAV NAV
JAN 14.0177
FEB 12.509 -1.509 -10.763
MAR 12.6162 0.107 0.857
APRIL 13.2095 0.593 4.703
MAY 13.1335 -0.076 -0.575
JUNE 12.9266 -0.207 -1.575
JULY 13.0213 0.095 0.733
AUG 12.8043 -0.217 -1.667
SEP 11.6088 -1.196 -9.337
OCT 11.2167 -0.392 -3.378
NOV 11.9153 0.699 6.228
DEC 11.0788 -0.837 -7.020

ANNUAL RETURN -2.939 -20.966

MEAN -0.267 -1.906

STANDARD 5.369

VARIANCE 28.829

SHARP RATIO -5.208

85
Graph :

% OF NAV
10

0
% OF NAV
-5

-10

-15

Interpretation:
For the year 2013 Annual return of NAV declined by -2.939% or -20.966%
, Mean is -0.267% or -1.906%.Out of 12 month NAV declined for 2 months &
maximum loss is -10.763% which is in the month of February .Out of 12 months
NAV growth for 5 months & maximum profit is 6.228% which is in the month of
November. In the year 2013 the risk adjusted return by using sharp ratio is
-5.208.

86
Table 2: Reliance top 200 performance in 2014

DATE NAV VALUE CHANGE IN % OF NAV


DEC 11.0788
JAN 10.3117 -0.767 -6.924
FEB 11.7829 1.471 14.267
MAR 12.3204 0.538 4.562
APRIL 12.4722 0.152 1.232
MAY 12.3933 -0.079 -0.633
JUNE 11.6254 -0.768 -6.196
JULY 12.5586 0.933 8.027
AUG 12.5289 -0.030 -0.236
SEP 12.5947 0.066 0.525
OCT 13.8064 1.212 9.621
NOV 13.7232 -0.083 -0.603
DEC 14.252 0.529 3.853

ANNUAL RETURN 3.173 28.642

MEAN 0.264 2.387

STANDARD 6.195

VARIANCE 38.378

SHARP RATIO 3.493

87
Graph:

% OF NAV 2014
20

15

10

5 % OF NAV
0

NOV
FEB
MAR

MAY
JUNE

OCT
JAN

APRIL

SEP
DEC

AUG

DEC
JULY
-5

-10

Interpretation:

For the year 2014 Annual return of NAV declined by -3.173% or 28.642% ,
Mean is 0.264% or 2.387%.Out of 12 month NAV declined for 2 months &
maximum loss is -6.924% which is in the month of January .Out of 12 months NAV
growth for 5 months & maximum profit is 14.267% which is in the month of
February. In the year 2014 the risk adjusted return by using sharp ratio is 3.493.

88
Table 3: Reliance top 200 performance in 2015

DATE NAV VALUE CHANGE IN % OF NAV


DEC 14.252
JAN 14.5817 0.330 2.313
FEB 14.5473 -0.034 -0.236
MAR 13.8015 -0.746 -5.127
APRIL 13.6096 -0.192 -1.390
MAY 14.1978 0.588 4.322
JUNE 13.7993 -0.399 -2.807
JULY 13.5615 -0.238 -1.723
AUG 12.716 -0.846 -6.235
SEP 12.7378 0.022 0.171
OCT 13.2059 0.468 3.675
NOV 14.3483 1.142 8.651
DEC 14.3549 0.007 0.046

ANNUAL RETURN 0.103 0.722

MEAN 0.009 0.060

STANDARD 4.158

VARIANCE 17.287

SHARP RATIO -1.510

89
Graph:

% OF NAV
10

0 % OF NAV

APRIL

NOV
DEC

FEB

DEC
MAR

MAY
JUNE

OCT
JAN

SEP
AUG
JULY
-5

-10

Interpretation:

For the year 2015 Annual return of NAV declined by 0.103% or 0.722% ,
Mean is 0.009% or 0.060%.Out of 12 month NAV declined for 2 months &
maximum loss is -6.235% which is in the month of August. Out of 12 months NIFTY
growth for 5 months & maximum profit is 8.651% which is in the month of
November .In the year 2015 the risk adjusted return by using sharp ratio is -1.510.

90
Table 4: Reliance top 200 performance in 2016

DATE NAV VALUE CHANGE IN % OF NAV


DEC 14.3549
JAN 15.0654 0.711 4.950
FEB 14.3478 -0.718 -4.763
MAR 14.993 0.645 4.497
APRIL 16.266 1.273 8.491
MAY 16.2626 -0.003 -0.021
JUNE 18.7104 2.448 15.052
JULY 20.0364 1.326 7.087
AUG 19.5271 -0.509 -2.542
SEP 20.9633 1.436 7.355
OCT 21.0413 0.078 0.372
NOV 22.4281 1.387 6.591
DEC 23.7117 1.284 5.723

ANNUAL RETURN 9.357 65.182

MEAN 0.780 5.432

STANDARD 5.401

VARIANCE 29.175

SHARP RATIO 10.772

91
Graph:
% OF NAV
20
15

10

5 % OF NAV
0

MAY
JAN

APRIL

SEP

NOV
AUG
FEB
MAR

JUNE
JULY

OCT
DEC

DEC
-5
-10

Interpretation:

For the year 2016 Annual return of NAV declined by 9.357% or 65.182% ,
Mean is 0.780% or 5.432%.Out of 12 month NAV declined for 2 months &
maximum loss is -4.765% which is in the month of February .Out of 12 months NAV
growth for 5 months & maximum profit is 15.052% which is in the month of June.
In the year 2016 the risk adjusted return by using sharp ratio is 10.772.

92
Table 5: Reliance top 200 performance in 2017
DATE NAV VALUE CHANGE IN % OF
DCC 23.7117
JAN_17 23.3396 -0.37 -1.57
FEB_17 24.7652 1.43 6.11
MAR_17 25.4481 0.68 2.76
APRIL_17 24.6092 -0.84 -3.30
MAY_17 23.9233 -0.69 -2.79
JUNE_17 24.1573 0.23 0.98
JULY_17 24.2772 0.12 0.50
AUG_17 24.9396 0.66 2.73
SEP_17 23.0598 -1.88 -7.54
OCT_17 23.0176 -0.04 -0.18
NOV_17 23.554 0.54 2.33
DEC_17 23.6549 0.10 0.43

ANNUALRETURN -0.06 -0.24


-0.02
MEAN -0.005

SD 3.53
VARIANCE 12.46
SHARP RATIO -2.05

93
Graph:

% OF NAV
10

0 % OF NAV

APRIL_17
MAR_17

JUNE_17

DEC_17
DCC

FEB_17

MAY_17

SEP_17
OCT_17
JAN_17

JULY_17

NOV_17
AUG_17
-5

-10

Interpretation:

For the year 2017 Annual return of NAV declined by -0.06% or -0.24% ,
Mean is -0.005% or -0.02%.Out of 12 month NAV declined for 2 months &
maximum loss is -7.54% which is in the month of September .Out of 12 months NAV
growth for 5 months & maximum profit is 6.11% which is in the month of
February. In the year 2017 the risk adjusted return by using sharp ratio is -2.05.

94
Table 6: Reliance top 200 performance in 2018
DATE NAV VALUE CHANGE IN % OF NAV
DEC 23.6549
Jan-18 23.6664 0.01 0.05
Feb-18 21.847 -1.82 -7.69
Mar-18 20.5211 -1.33 -6.07
Apr-18 22.2396 1.72 8.37
May-18 22.1124 -0.13 -0.57
Jun-18 22.8973 0.78 3.55
july_18 23.9077 1.01 4.41

ANNUAL RETURN 0.25 1.07

MEAN 0.04 0.15

STANDARD 5.743
VARIANCE 32.977
SHARP RATIO -1.033

95
Graph:

% OF NAV
10

0 % OF NAV
DEC JAN FEB MAR APR MAY JUNE JULY
-5

-10

Interpretation:

For the year 2018 Annual return of NAV declined by 0.25% or 1.07% ,
Mean is 0.04% or 0.15%.Out of 12 month NAV declined for 2 months & maximum
loss is -7.69% which is in the month of February .Out of 12 months NAV growth for
5 months & maximum profit is 4.41% which is in the month of July. In the year
2018 the risk adjusted return by using sharp ratio is -1.033.

96
96
Comparison different companies and nifty values
Table 1:2013
SBI BLUE RELIANCE BIRLA SUN
DATE NIFTY
CHIP FUND TOP 200 LIFE
JAN -

FEB -12.830 -10.763 -10.62 -3.14

MAR -0.216 0.857 0.65 9.38

APR 7.303 4.703 6.81 -1.44

MAY -2.156 -0.575 -1.98 -4.81

JUNE -1.240 -1.575 -0.78 3.18

JULY 0.558 0.733 1.04 -2.93

AUG -1.526 -1.667 -0.68 -8.77

SEP -7.465 -9.337 -7.90 -1.15

OCT -4.110 -3.378 -3.38 7.76

NOV 5.556 6.228 5.28 -9.28

DEC -4.586 -7.020 -5.51 -4.30


Graph:

15.000

10.000
5.000 SBI BLUE CHIP FUND
RELIANCE TOP 200
0.000
BIRLA SUN LIFE TOP 100

AUG
MAY
JUNE

NOV
DEC
MAR
APR

JULY

OCT
SEP
FEB
-5.000
NIFTY -

-10.000

-15.000

Interpretation:
For the year 2013 the comparison of different companies with nifty then the
NAV value of annual return maximize in nifty 9.38 which in the year of march and
minimize in Reliance top 200 -9.337 which is in the year of September.
Table 2:2014
DATE SBI BLUE RELIANCE BIRLA SUN LIFE NIFTY
DEC -
JAN -5.595 -6.924 -6.08 12.43
FEB 11.018 14.267 12.59 3.58
MAR 3.158 4.562 2.62 -1.66
APR 1.385 1.232 1.08 -0.90
MAY -1.078 -0.633 -1.30 -6.17
JUNE -5.741 -6.196 -6.61 7.20
JULY 8.096 8.027 8.52 -0.95
AUG 1.284 -0.236 0.57 0.56
SEP 1.901 0.525 0.01 8.46
OCT 7.464 9.621 9.30 -1.47
NOV 0.193 -0.603 -1.09 4.63
DEC 4.750 3.853 5.43 0.43

Graph:
20.000

15.000

10.000 SBI BLUE CHIP FUND


RELIANCE TOP 200
5.000
BIRLA SUN LIFE TOP 100
0.000 NIFTY -
AUG
APR
MAY

JULY

OCT
SEP

NOV
FEB

DEC
MAR

JUNE
JAN

-5.000

-10.000

Interpretation:
For the year 2014 the comparison of different companies with nifty then the
NAV value of annual return maximize in Reliance top 200 14.26 which in the year of
February and minimize in Birla sun life -6.61 which is in the year of January.
Table 3:2015
DATE SBI BLUE RELIANCE BIRLA SUN LIFE NIFTY
DEC
JAN 2.451 2.313 2.93 2.20
FEB 0.837 -0.236 -0.19 -5.66
MAR -3.824 -5.127 -5.72 -0.18
APR -0.200 -1.390 -1.09 4.36
MAY 4.254 4.322 4.99 0.94
JUNE -1.296 -2.807 -1.64 -2.40
JULY -1.722 -1.723 -0.65 -1.72
AUG -3.573 -6.235 -3.88 -4.71
SEP -3.338 0.171 -0.28 4.82
OCT 5.484 3.675 4.93 9.83
NOV 8.799 8.651 10.02 -1.95
DEC -0.379 0.046 -0.31 2.07

Graph:
12
10
8
6 SBI BLUE CHIP FUND
4
RELIANCE TOP 200
2
BIRLA SUN LIFE TOP 100
0
-2 NIFTY
JULY

NOV
FEB
MAR
APR
MAY
JUNE

OCT
JAN

SEP
DEC

AUG

DEC

-4
-6
-8

Interpretation:
For the year 2015 the comparison of different companies with nifty then the
NAV value of annual return maximize in Birla sun life which is in the year of
November and minimize in Reliance top 200 -6.235 which is in the year of August.

100
100
Table 4:2016
DATE SBI BLUE RELIANCE BIRLA SUN NIFTY
DEC
JAN 2.460 4.950 2.65 -3.40
FEB -2.718 -4.763 -5.01 3.08
MAR 3.851 4.497 4.30 6.81
APR 5.955 8.491 8.72 -0.12
MAY 0.479 -0.021 0.82 7.97
JUNE 10.494 15.052 15.05 5.28
JULY 6.893 7.087 5.03 1.44
AUG 0.333 -2.542 -2.00 3.02
SEP 6.589 7.355 6.01 0.13
OCT 1.228 0.372 -0.27 4.49
NOV 4.139 6.591 5.52 3.20
DEC 3.518 5.723 4.53 -3.56

Graph:
20

15

10 SBI BLUE CHIP FUND


RELIANCE TOP 200
5
BIRLA SUN LIFE TOP 100
0 NIFTY
JULY

NOV
DEC

FEB

DEC
MAR
APR
MAY
JUNE

OCT
JAN

SEP
AUG

-5

-10

Interpretation:
For the year 2016 the comparison of different companies with nifty then the
NAV value of annual return maximize in Reliance top 200 and Birla sun life is 15.05
which is in the month of June and minimize in Birla sun life -5.01 which is in the
month of February.

101
101
Table 5:2017
DATE SBI BLUE RELIANCE BIRLA SUN NIFTY
DEC
JAN -0.454 -1.57 -0.56 6.35
FEB 6.113 6.11 5.27 0.41
MAR 3.427 2.76 1.41 -4.00
APR -0.834 -3.30 -3.51 -3.65
MAY -3.049 -2.79 -2.32 3.08
JUNE 1.227 0.98 1.05 -0.77
JULY 1.947 0.50 0.67 1.96
AUG 2.386 2.73 3.56 -6.58
SEP -7.155 -7.54 -8.37 -0.28
OCT 2.047 -0.18 2.48 1.47
NOV 1.403 2.33 1.45 -1.62
DEC -0.022 0.43 -0.77 0.14

Graph:
8
6
4
2 SBI BLUE CHIP FUND
0 RELIANCE TOP 200
MAY
JAN

SEP

NOV
AUG
FEB

DEC
MAR
APR

JUNE
JULY

OCT
DEC

-2 BIRLA SUN LIFE TOP 100


-4 NIFTY
-6
-8
-10

Interpretation:
For the year 2017 the comparison of different companies with nifty then the
NAV value of annual return maximize in SBI Blue ship Fund and Reliance top 200 is
6.11 which in the month of February and minimize in Birla sun life is -8.37 which is
in the month of September.

102
102
Table 6:2018
% OF NAV IN
DATE SBI BLUE RELIANCE BIRLA SUN NIFTY
DEC
JAN 1.053746003 0.04861572 0.37 -4.82
FEB -3.966404692 -7.687692256 -5.63 -7.62
MAR -3.299437749 -6.069025495 -5.22 10.75
APR 4.98502079 8.37430742 8.61 1.44
MAY 3.211546617 -0.571952733 3.71 3.95
JUNE 4.07825003 3.549592084 2.43 1.56
JULY 1.623987099 4.412747354 3.79 0.49

GRAPH:

SBI BLUE CHIP FUND

RELIANCE TOP 200

BIRLA SUN LIFE TOP


100
NIFTY

INTERPRETATION:

For the year 2018 the comparison of different companies with nifty then the NAV value of annual return
maximize in nifty is 10.75 which in the month of march and minimize in Reliance top 200 is-7.68 which
is in the month of February.
CHAPTER – 6
 FINDINGS
 SUGGESSIONS
 CONCLUSION
 BIBLIOGRAPHY
FINDINGS

 It was found that most of them choose to be conservative and less aggressive
in nature while investing in the mutual fund schemes.

 People generally like to save their savings in fixed deposits and savings
account as there was very less risk.
 The most popular medium of investing in mutual funds is through SIP and
moreover people like so invest in equity fund through it is a risky.
 It was found that out of total samples of investors are more conservative than
female as they prefer less risky .schemes most of the times.
 The satisfaction level between the investors both male and female while
investing in to mutual funds was almost equal i.e., very rare differences.
 It was also found that PG qualified investor were more in number when
compared to UG qualified investors. This shows people are taking risk
when they are experienced in well terms.
 Age group of 24-40 were also very conservative and less aggressive kind of
investors as they invest into medium type of companies which shows they
don’t want to take much risk with them.
 When asked about the reason for selecting the respective product for investing
then the preference given by the investor was secure and safe point of
investment.
 According to the ratings given by the investors to the mutual funds schemes it
was found that most of the female investors had more knowledge about the
varieties in schemes of the mutual funds as compared to the make investors.
SUGGESSIONS OF THE STUDY

 As it has been found from the above findings that mutual funds are providing
better returns and gaining its importance in the finance industry. Therefore, the
mutual funds companies in India should make vice decisions while making
investment and provide more benefits to investors.
 As many investors get fooled by some mutual funds companies which gives
false promises to investors for investing their money in their mutual funds so
government should make strict rules for all the mutual funds companies in
order to safeguard the investment of all investors.
 The charges should be reduced to minimized and also the lock in period factor
should be minimized which will attract more investors from the market.
 Key features of mutual funds should be mentioned in the advertisement.
Features like diversification systematic investment plans (SIP),Tax benefits
should be mentioned in the advertisements otherwise, people will see mutual
funds as normal shares in which we invest money.
 Many fund times themselves have provided assurances regarding restitution
for losses so share holders i.e., reassuring, However, these promises have been
short on specifies indicating how those losses will be measured and how the
compensation will be provided.
 Mutual funds should use appropriate and simple names for the schemes ,
which match the features of the schemes ,so that the investors are not confused
and not feel cheated after investing.
CONCLUSION
The Indian mutual fund industry has transformed totally for good
since last decade and has shown growth and potential. Through the asset under
management and number of schemes has increased significantly but if its yet
to be a household product and needs so cover the retail segment effectively
moreover there are still many remote and potential are as which lack the
required knowledge and infrastructure of mutual funds.
Mutual fund is an excellent product offering great flexibility and
liquidity. which can be tailored to suit any investors objective and it is
affordable for the all people of different income levels and saving habits.
mutual fund now represent perhaps most appropriate investment opportunity
for most investors As financial markets become more sophisticated and
complex. Investors need a financial intermediary. Who provides the required
knowledge and professional expertise an successful investing. As the investor
always try to maximize the returns and minimize the risk. mutual funds
satisfies these requirements by providing attractive returns with affordable
risk. The fund industry has already over taken the banking industry, more
funds being under mutual funds management than deposited with banks. with
the emergence of tough competition in this sector mutual fund are launching a
variety of schemes which caries to the requirement of the particular class of
investors. Risk takers for getting capital appreciation should in growth. equity
schemes investors who are in need of regular income should invest in income
plans.
The stock market has also been rising for over three years now. This
in turn has not only protected the money invested in funds but has also to help
grow these investments this has also instilled greater confidence among fund
investors who are investing more into the market through the mutual funds
route than ever before.
After doing study it is concluded that yes mutual funds are much
better investment option but as feature is uncertain so no one can give a sure
guarantee of good returns no matter whether it is equities or a mutual funds.
BIBLIOGRAPHY

REFERENCE BOOKS:

• An Introduction to trading in the financial markets, R. Tee Williams, Academic Press.


• Investment analysis and securities management- S Kevin.
• Prasanna Chandra, Financial Management – Theory and Practice, Tata McGraw Hill.
• M.Y.Khan, Financial services, Tata McGraw Hill.
• Bhalla. V.K., Management of Financial Services, Anmol Publications.
• David G.Luenberger, Investment science, Oxford.

WEBSITES:
 www.moneycontrol.com
 www.amfiindia.com
 www.valuesresearchindia.com
 www.personalnf.com
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