SUMMER TRAINING REPORT

IN

FINANCE

AT

ICICI PRUDENTIAL MUTUAL FUND

SUMMER PROJECT REPORT ON

“STUDY ON PERFORMANCE AND INVESTMENT ANALYSIS ON MUTUAL

FUNDS”

(20TH MAY-20TH JULY’19)

SUBMITTED TO

DEPARTMENT OF MANAGEMENT STUDIES

NATIONAL INSTITUTE OF TECHNOLOGY, SILCHAR, ASSAM

INDUSTRY MENTOR: SUBMITTED BY: MRINAL

NAYAK BISHAL PAUL (BRANCH
MANAGER) SCHOLAR ID:18-50-125

BATCH- 2018-20

1
 Department of Management Studies

National Institute of Technology, Silchar

Declaration

I, Bishal Paul, Scholar Id- 18-50-125 a full time bonafide student of Master of Business
Administration (MBA) Programme, Batch (2018-20) of Department of Management Studies,
National Institute of Technology Silchar, hereby certify that this summer training carried out by
me at ICICI Prudential Mutual Fund and the report submitted in partial fulfillment of the
requirements of the programme is an original work of mine under the guidance of the industry
mentor Ms. Kasturi Kalita and our branch manager Mr. Mrinal Nayak and is not based or
reproduced from any existing work of any other person or on any earlier work undertaken at any
other time or for any other purpose, and has not been submitted anywhere else at any time.

BISHAL PAUL
(Student's Signature)
Date:

2
 ACKNOWLEDGEMENT

Sometimes words fall short to show gratitude, the same happened with me during this project.
The immense help and support received from ICICI Prudential Mutual Fund overwhelmed me
during the project.

My sincere gratitude to Mr. Mrinal Nayak(Branch Manager) and Prof. Shivaji Bandyopadhyay
(Director, NIT Silchar) and Prof. Ashim Kumar Das (H.O.D, DOMS, NIT Silchar) for providing
me with an opportunity to work withICICI Prudential Mutual Fund.

I am highly indebted to the staff members of ICICI AMC who have provided me with the
necessary information and his valuable suggestions and comments on bringing out this report in
the best possible way.

This project would not be complete without thanking my college “NATIONAL INSTITUTE OF
TECHNOLOGY, SILCHAR” for giving me an opportunity to have an enriching experience in
terms of this project.

Last but not the least; my heartiest love for my parents and friends whose constant support,
helped me through this project.

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CONTENT

Chapter No Title Page No

1 Introduction 5

2 Industry Sector Profile 6-14

3 Company Profile 15-22

4 Department Details 23-27

5 Learning and value 28-30

Addition’s

6 Analysis of Mutual Funds 31-56

7 Recommendation & 57
Suggestions
8 Annexure 58-61

9 Bibliography 61

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 Chapter 1
INTRODUCTION
EXECUTIVE SUMMARY

My project for Summer Internship Period was “STUDY ON PERFORMANCE AND

INVESTMENT ANALYSIS OF MUTUAL FUNDS”. People feels that the mutual funds
investments are little bit insecure and risky than the other investment products due to volatile
nature of the market .Even after identifying the growth oriented companies and their securities
,the investments practices are also bit complicated ,making it a bit difficult task for the investors
to trade in all exchange. So that the investors choose to hold groups of securities rather than
single securities that offer the greater expected returns. They believe that a combination of
securities held together will give a beneficial result if they are grouped in manner to secure
higher return. That is why professional investment advice through portfolio management service
can help the investors to make an intelligent and informed choice between alternative investment
opportunities without the worry of post trading hassels.

I have tried to explain about the various types of investment with respect to
ICICI PRUDENTIAL Mutual Fund to the client’s in the company right from personal meeting,
and gathering of information from IFA’s and distributors.

In my study I have tried to analyse different investment funds and their rate return’s. I have done
the analysis of different investment product according to their rate of returns, safety and their
affordability for better understanding about the portfolio investment. Basically portfolio reduces
your investment risk by creating a diversified portfolio that includes enough different types or
other classes of securities so that at least some of them may produce strong returns.

So for the deep knowledge about the portfolio I have collected the primary data through the
questionnaire from the different people and tried to know about their different perception about
the investment product for their portfolio.

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 Chapter 2
Industrial Sector Profile
2.1 Introduction
Mutual Fund is one of the best options for the investor available in the market. A mutual
fund is a type of financial vehicle made up of a pool of money collected from many investors to
invest in securities such as stocks, bonds, money market instruments, and other assets. Mutual
funds are operated by professional money managers, who allocate the fund's assets and attempt
to produce capital gains or income for the fund's investors. Mutual funds invest in a vast number
of securities, and performance is usually tracked as the change in the total market cap of the
fund-derived by the aggregating performance of the underlying investments.

Mutual funds pool money from the investing public and use that money to buy other
securities, usually stocks and bonds. The value of the mutual fund company depends on the
performance of the securities it decides to buy. So, when you buy a unit or share of a mutual
fund, you are buying the performance of its portfolio or more precisely, a part of the portfolio's
value. Investing in a share of a mutual fund is different from investing in shares of stock. Unlike
stock, mutual fund shares do not give its holders any voting rights. That's why the price of a
mutual fund share is referred to as the net asset value (NAV) per share, sometimes expressed as
NAVPS. A fund's NAV is derived by dividing the total value of the securities in the portfolio by
the total amount of shares outstanding.

History of Mutual Fund in India:

The first company that dealt in mutual funds was the Unit Trust of India. It was set up in
1963 as a joint venture of the Reserve Bank of India and the Government of India. The objective
of the UTI was to guide small and uninformed investors who wanted to buy shares and other
financial products in larger firms. The UTI was a monopoly in those days. One of its mutual
fund products that ran for several years was the Unit Scheme 1964.

By the end of 1988, the mutual fund industry had acquired its own identity. From 1987, many

public sector banks had begun lobbying the government for starting their own mutual fund arms.

In November 1987, the first non-UTI Asset Management Fund was set up by the State Bank of

India. This AMC was quickly followed by the creation of other AMCs by banks like Canara

Bank, Indian Bank, Life Insurance Corporation, General Insurance Corporation, and Punjab

National Bank. This opening up of the mutual fund industry delivered the desired results. In

1993, the cumulative corpus of all the AMCs went up to a whopping Rs. 44,000 crores.

Observers of this industry say that in the second phase, not only the base of the industry
increased but also it encouraged investors to spend a higher percentage of their savings in mutual
funds. It was evident that the mutual fund industry in India was poised for higher growth.
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In the period 1991-1996, the Government of India had realized the importance of the

liberalization of the Indian economy. Financial sector reforms were the need of the hour. India
needed private sector participation for the rebuilding of the economy.

Keeping this in mind, the government opened up the mutual fund industry for the private players

as well. The foreign players welcomed this move and entered the Indian market in significant

numbers. In this period, 11 private players –in collaboration with foreign entities- launched their
Asset Management Funds.

Some of the top AMCs in the private sector were:

• ICICI Prudential AMC- This Company is a joint venture between ICICI Bank of India and
Prudential Plc of UK. It manages a corpus of INR 321524.71 crores and has an inventory of
more than 1400 schemes.

• HDFC Mutual Fund- Launched in the 1990s, the HDFC Mutual Fund manages more than 900
different kinds of funds.

• Kotak Mahindra Mutual Fund- This AMC has an asset base of more than Rs. 1,19,000 crores.
It is a joint venture of Kotak Financial Services and the Mahindra Group.

Concept of Mutual Fund

A mutual fund is a trust or a pool of investments by investors who share a common

financial goal. This pool is invested in several financial instruments such as shares, debt

instruments, bonds etc. by the company managing that trust. This company is called an Asset

Management Company. Returns so generated are later distributed among the members of the

pool in the ratio of their investments. The AMC invests its money in a manner that while the

returns are maximized, the risks are kept to a minimum level. In India, it is mandatory for

every Asset Management Firm to be registered with the Securities and Exchange Board of

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India (SEBI), a body that regulates all securities instruments.

Advantages of Mutual Fund

The advantages of investing in Mutual Funds are :

1) Professional Management

2) Diversification

3) Convenient Administration

4) Return Potential

5) Low costs

6) Liquidity

7) Transparency

8) Flexibility

9) Choices of scheme

10) Tax benefits

Different of mutual Funds

There are a variety of Mutual Funds schemes to your needs, whatever the age, financial
position, risk tolerance and return expectations. Mutual funds can be divided in the following
categories :

1. Based on Asset Class

a. Equity Funds
b. Debt Funds
c. Money Market Funds
d. Hybrid Funds
2. Based on Structure
a. Open-ended Funds
b. Closed-ended Funds
c. Interval Funds
3. Based on Investment Goals
a. Growth Funds
b. Income Funds
c. Liquid Funds
d. Tax-Saving Funds
4. Based on Risk

a. Very low Risks Funds

b. Low Risks Funds
c. Medium Risks
d. High Risks Funds

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5. Specialized Mutual fund

a. Index Funds
b. Fund of Funds
c. Emerging Market Funds
d. International / foriegn Funds
e. Global Funds
f. Real Estate Funds
g. Commodity-focused stock Funds
h. Market Neutral Funds
i. Leveraged Funds
j. Asset Allocation Funds
k. Gilt Funds
l. Exchange traded Funds

Based on Assets Class

a. Equity Funds: The returns or losses are determined by how these shares
perform (price-hikes or price-drops) in the stock market. As equity funds come
with a quick growth, the risk of losing money is comparatively higher.
b. Debt Funds: Debt funds invest in fixed-income securities like bonds, securities
and treasury bills – Fixed Maturity Plans (FMPs), Gilt Fund, Liquid Funds,
Short Term Plans, Long Term Bonds and Monthly Income Plans among others –
with fixed interest rate and maturity date.
c. Money Market Funds: A money market fund (also called a money market
mutual fund) is an open-ended mutual fund that invests in short-term debt
securities such as US Treasury bills and commercial paper. Money market
funds are widely (though not necessarily accurately) regarded as being as safe as
bank deposits yet providing a higher yield.
d. Hybrid Funds: Hybrid Funds (also go by the name Balanced Funds) is an
optimum mix of bonds and stocks, thereby bridging the gap between equity
funds and debt funds. The ratio can be variable or fixed. In short, it takes the
best of two mutual funds by distributing, say, 60% of assets in stocks and the
rest in bonds or vice versa. This is suitable for investors willing to take more
risks for ‘debt plus returns’ benefit rather than sticking to lower but steady
income schemes.

Based on Structure

a. Open Ended Funds: These funds don’t have any constraints in a time
period or number of units – an investor can trade funds at their convenience
and exit when they like at the current NAV (Net Asset Value).
b. Close Ended Funds: Here, the unit capital to invest is fixed beforehand,
and hence they cannot sell a more than a pre-agreed number of units.
c. to buy units. It has a specific maturity tenure and fund managers are open to
any fund size, however large.
d. Interval Funds: This has traits of both open-ended and closed-ended
funds. Interval funds can be purchased or exited only at specific intervals
and are closed the rest of the time. No transactions will be permitted for at
least 2 years. This is suitable for those who want to save a lump sum for an
immediate goal (3-12 months).

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Based on Investments Goal

a. Growth Funds: Growth funds usually put a huge portion in shares and
growth sectors, suitable for investors who have a surplus of idle money to
be distributed in riskier plan or are positive about the scheme.
b. Income Funds: This belongs to the family of debt mutual funds that
distribute their money in a mix of bonds, certificate of deposits and
securities among others. Income Funds have historically earned investors
better returns than deposits and are best suited for risk-averse individuals
from a 2-3 years perspective.
c. Liquid Funds: Like Income Funds, this too belongs to the debt fund
category as they invest in debt instruments and money market with a tenure
of up to 91 days. The maximum sum allowed to invest is Rs 10 lakhs. One
feature that differentiates Liquid Funds from other debt funds is how the
Net Asset Value is calculated – NAV of liquid funds are calculated for 365
days (including Sundays) while for others, only business days are
calculated.
d. Tax Savings Fund: ELSS or Equity Linked Saving Scheme is gaining
popularity as it serves investors the double benefit of building wealth as
well as save on taxes – all in the lowest lock-in period of only 3 years.
e. Aggressive Growth Fund: Slightly on the riskier side when choosing
where to invest in, Aggressive Growth Fund is designed to make steep
monetary gains. Though susceptible to market volatility, you may choose
one as per the beta (the tool to gauge the fund’s movement in comparison
with the market).
f. Capital Protection fund: If protecting your principal is your
priority, Capital Protection Funds can serve the purpose while earning
relatively smaller returns (12% at best). The fund manager invests a portion
of your money in bonds or CDs and the rest in equities. You will not incur
any loss. However, you need a least 3 years (closed-ended) to safeguard
your money and the returns are taxable.
g. Fixed Maturity Funds: Fixed Maturity Plans (FMP) – investing in bonds,
securities, money market etc. – present a great opportunity in bringing
down tax burden by bringing down tax indexation
h. Pension Funds: Pension Fund helps to secure you and your family’s
financial future after retiring from regular employment – it can take care of
most contingencies.

Based on Risks

a. Very Low Risks Funds: Liquid Funds and Ultra Short-term Funds (1
month to 1 year) are not risky at all, and understandably their returns are
low (6% at best). Investors choose this to fulfil their short-term financial
goals and to keep their money safe until then.
b. Low Risks Funds: These are the funds which are a combination of liquid,
ultra short term or arbitrage fund. Returns could be 6-8%, but the investors
are free to switch when valuations become more stable. They are less risky
in nature.
c. Medium Risks Funds: Here, the risk factor is of medium level as the fund
manager invests a portion in debt and the rest in equity funds. The NAV is
not that volatile, and the average returns could be 9-12%.
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 d. High Risks Funds: These are for the investors with no risk aversion and
aiming for huge returns in the form of interest and dividends, High-risk
Mutual Funds need active fund management. One can expect 15% returns,
though most high-risk funds generally provide 20% returns (and up to 30%
at best)

Specialized Mutual Funds

a. Sector Funds: These funds invest only in specific sectors with only a few
stocks, the risk factor is on the higher side. One must be constantly aware
of the various sector-related trends, and in case of any decline, just exit
immediately. However, sector funds also deliver great returns.
b. Index Funds: Suited best for passive investors, index funds put money in
an index. It is not managed by a fund manager. An index fund simply
identifies stocks and their corresponding ratio in the market index and put
the money in similar proportion in similar stocks.
c. Funds of Funds: A diversified mutual fund investment portfolio offers a slew
of benefits, and ‘Funds of Funds’ aka multi-manager mutual funds are made to
exploit this to the tilt – by putting their money in diverse fund categories. In
short, buying one fund that invests in many funds rather than investing in several
achieves diversification as well as saves on costs.
d. Emerging Market Funds: An emerging market fund is a fund that
invests the majority of its assets in securities from countries classified as
emerging.
e. International/ Foreign Funds: Foreign Mutual Funds can get investors
good returns even when the Indian Stock Markets do fare well. An
investor can employ a hybrid approach (say, 60% in domestic equities and
the rest in overseas funds) or a feeder approach (getting local funds to
place them in foreign stocks) or a theme-based allocation.
f. Global Funds: A global fund chiefly invests in markets worldwide, it also
includes investment in your home country.
g. Real Estate Funds: Real Estate Fund can be a perfect alternative as the
investor is only an indirect participant by putting their money in
established real estate companies/trusts rather than projects.
h. Commodity-focused Stock Funds: Commodity-focused stock funds give
a chance to dabble in multiple and diverse trades.
i. Market Neutral Funds: Market-neutral Funds meet the purpose (like a
hedge fund). With better risk-adaptability, these funds give high returns
and even small investors can outstrip the market without stretching the
portfolio limits.
j. Leveraged Funds: While a regular index fund moves in tandem with the
benchmark index, the returns of an inverse index fund shift in the opposite
direction. Simply put, it is nothing but selling your shares when the stock
goes down, only to buy them back at an even lesser cost.
k. Asset Allocation Funds: Combining debt, equity and even gold in an
optimum ratio, this is a greatly flexible fund. Based on a pre-set formula
or fund manager’s inferences on the basis of the current market
trends, Asset Allocation Funds can regulate the equity-debt distribution.
l. Gilt Funds: Gilt funds invest in fixed interest generating securities of the
state and central government.

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 m. Exchange traded Funds: It belongs to the Index Funds family and is
bought and sold on exchanges. Exchange-traded Funds have unlocked a
world of investment prospects, enabling investors to gain comprehensive
exposure to stock markets abroad as well as specialized sectors.

2.2 Different Companies in the Industry sector

Asset management companies in India are broadly categorised into three types; bank-
sponsored mutual funds, mutual fund institutions, and the private sector mutual funds. There are
total 42 asset management companies in India. 35 of these AMCs are part of the private sector.
All the asset management companies are part of Association of Mutual Funds in India (AMFI).
AMFI was incorporated in 1995 as a non-profit organisation of all the registered AMCs in India.

Different AMC operating in India are:

1. HDFC Asset Management Company

2. ICICI Prudential AMC Limited
3. SBI Funds Management Private Limited
4. Reliance Nippon Life Asset Management Limited
5. Aditya Birla Sun Life AMC Limited
6. UTI AMC Limited
7. Kotak Mahindra AMC Limited
8. Franklin Templeton Mutual Fund
9. DSP Blackrock Mutual Fund
10. Axis Mutual Fund
11. BOI AXA Managers Private Limited
12. Canara Robeco AMC Limited
13. Baroda Pioneer AMC Limited
14. IDBI Asset Management Limited
15. Union AMC Private Limited
16. UTI AMC Limited
17. LIC Mutual Fund Asset Management Limited
18. Edelweiss Asset Management Limited
19. Escorts Asset Management Limited
20. IIFL Asset Management Limited
21. Indiabulls AMC Limited
22. JM Financial Asset Management Limited
23. L&T Investmest Management Limited
24. Mahindra AMC Private Limited
25. Motilal Oswal AMC Limited
26. Essel Fund Management Company Limited
27. PPFAS Asset Management Private Limited
28. Quantum AMC Private Limited
29. Sahara AMC Private Limited
30. Shriram AMC Limited
31. Sunandaram AMC Limited
32. Tata Asset Management Limited
33. Taurus AMC Limited
34. BNP Paribas Asset Management Company Limited
35. Invesco Asset Management Private Limited
36. Mirae Asset Global Investment Private Limited

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 37. HSBC Asset Management Private Limited
38. Principal PNB AMC Private Limited
39. DHFL Pramerica Asset managers Private Limited
40. DSP Blackrock Investment Managers Private Limited
41. IDFC AMC Limited
42. Birla Sun Life AMC Limited

2.3 Top 10 Companies and Market Share of each companies in the

Market

Assets Under Management (Rs.Cr)

MUTUAL FUNDS Dec 2018 March 2019

HDFC Mutual Fund 334964 342291

ICICI Prudential Fund 307735 320793

SBI Mutual Fund 264353 283807

Aditya Birla Sun Life Mutual Fund 242344 246480

Reliance Mutual Fund 236256 233617

UTI Mutual Fund 157586 159694

Kotak Mahindra Mutual Fund 139427 150099

Franklin Templeton Mutual Fund 109525 118912

Axis Mutual Fund 81622 89720

DSP Blackrock Mutual Fund 79245 78363

2.4 Growth and Opportunities in industry sector

Future and Growth of Mutual Funds industry in India:

There is huge scope in the future for the expansion of mutual funds in India. A huge
number of foreign based assets management companies are venturing in Indian market. The
Securities and exchange Board of India has allowed the introduction of commodity mutual
funds. The emphasis is given on the effective corporate governance of Mutual Funds. The
country’s mutual fund industry has a huge growth potential as Indian households’ savings
amount to Rs 20-30 lakh crore. The Mutual Funds in India has the scope of penetrating into the
rural and semi urban areas. Financial Planners are introduced in the market which would provide
the people with better financial planning and investments.

Opportunities of Mutual Funds industry in India:

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 In any industries, innovation and improvements happen when the rules are changed.
Newer leaner operating structures will have to evolve which will entail the use technology that
helps an AMC retail end user with solution that enable transactions via mobile platforms or
online platforms. This will not only give greater direct access but will also help the AMC’s to
better understand investor behaviour and create the appropriate environment and products to
move towards long and healthy relationship towards investors.

As the industry evolves, outsourcing an increasing number of functions to reduce the

head count and increase efficiency might be the norm. All aspects of operating costs should be
examined for efficiencies.

Mutual Funds Emerging Challenges:

 Growth versus Governance- A right mix

 Administration and distribution
 Investor Education – A Driving Force on Financial Planning
 The Technological Backbone
 Diminishing Talent Pool
 Pressures on Margins
 Consolidation in the Industry
 Innovation and Product Diversification
 Increasing Trend on Outsourcing

2.5 Market Share of Mutual Funds in India Industry Sector

The country’s mutual fund industry has a huge growth potential as Indian households’
savings amount to Rs 20-30 lakh crore. In India asset base of Mutual Funds as a percent of GDP
is just 11 percent compared to the world average of 62 percent. India lags most major nations of
the world in terms of assets under management(AUM) of mutual funds as a percentage of gross
domestic product(GDP). Average Assets Under Management (AAUM) of Indian Mutual Fund
Industry for the month of June 2019 stood at ₹ 25,81,397 crore. Assets Under Management
(AUM) as on June 30, 2019 stood at ₹24,25,040 crore. The AUM of the Indian MF Industry has
grown from ₹ 5.83 trillion as on 30th June, 2009 to ₹24.25 trillion as on 30th June, 2019, more
than 4 fold increase in a span of 10 years. The MF Industry’s AUM has grown from ₹ 9.75
trillion as on 30th June, 2014 to ₹24.25 trillion as on 30th June, 2019, about 2 ½ fold increase in
a span of 5 years. The Industry’s AUM had crossed the milestone of ₹10 Trillion (₹10 Lakh
Crore) for the first time in May 2014 and in a short span of about three years, the AUM size had
increased more than two folds and crossed ₹ 20 trillion (₹20 Lakh Crore) for the first time in
August 2017. The Industry AUM stood at ₹24.25 Trillion (₹ 24.25 Lakh Crore) as on 30th June,
2019. The total number of accounts (or folios as per mutual fund parlance) as on June 30, 2019
stood at 8.38 crore (83.8 million), while the number of folios under Equity, Hybrid and Solution
Oriented Schemes, wherein the maximum investment is from retail segment stood at 7.56 crore
(75.6 million).

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 Chapter 3

COMPANY PROFILE
3.1 Review of the company

Name of the company: ICICI Prudential Mutual Fund

Address: Ground Floor, GS road, M Dewan Path, Ulubari, Guwahati, Assam-781007

Email: icici@pruamc.com

CORPORATE INFORMATION
ICICI PRUDENTIAL ASSET MANAGEMENT COMPANY LIMITED
CIN: U99999DL1993PLC054135

ICICI PRUDENTIAL TRUST LIMITED

CIN: U74899DL1993PLC054134
Contact us on for escalations

Customer Service
Toll Free Nos

 (i) 1800 222 999 (BSNL/MTNL)

 (ii) 1800 200 6666 (Other Service Providers)
Toll Free nos. timings

 8 am to 8 PM, Monday to Saturday

 9 am to 7 PM on Sunday
Overseas investors

 (i) +91-22-28586002
Email us for any service related request and queries

 enquiry@icicipruamc.com

 Headquarters : Mumbai, India

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3.2 Company Logo and Pictures

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3.3 Mission and vision of the company

Vision: To be the leading provider of financial services in India and a major global bank.

Mission: We will leverage our people, technology, speed and financial capital to:

 Be the banker of first choice for our customers by delivering high quality, world-class
products and services.
 Expand the frontiers of our business globally.
 Play a proactive role in the full realisation of India’s potential.
 Maintain a healthy financial profile and diversify our earnings across businesses and
geographies.
 Maintain high standards of government and ethics.
 Contribute positively to the various countries and markets in which we operate’
 Create value for our stakeholders.

3.4 History of the company

The AMC is a joint venture between ICICI bank in India and Prudential Plc, one of UK’s largest
players in the financial services sectors. It was established in 12 december 2000. With its
Corporate Office based in Bandra Kurla Complex, Mumbai, India the AMC has witnessed
substantial growth in scale; from 2 locations and 6 employees at the time of inception of the joint
venture in 1998, to a current strength of more than 1000 employees with around 120 locations
with an investor base of more than 1.9million investors.

ICICI Prudential Mutual Fund is the second largest asset management company (AMC) in India
as per average assets under management (AUM) as on 31st march 2019 with 321,281.17crores
just after HDFC Mutual Fund with total AUM of 342,524.71crores. It is one of the leading AMC
in the country focused on bridging the gap between savings and investments and creating long
term wealth for investors a range of simple and relevant investments solutions.

The AMC is a joint venture between ICICI Bank, a well known and trusted name in financial
services in India and Prudential Plc, one of the UK’s largest players in the financial services
sectors. Throughout these years of the joint venture, the company has forced a position of pre –
eminence in the Indian mutual fund industry.

3.5 Products and services

The AMC manages significant Assets under Management(AUM) in the Mutual fund segment
across asset classes. The AMC also caters to Portfolio Management Services and Real Estate
Division for investors, spread across the country , along with International Advisory Mandates
for clients across international markets.

Mutual Fund: The Mutual fund caters primarily to retail investors.

Portfolio Management Services: The PMS allow high net worth investors to invest in a more
concentrated portfolio aiming at higher returns. In the year 2000 ICICI Prudential AMC was the

17
first institutional participant to offer the service, and has now got a successful track record of
over 10 years.

Real Estate Business: The Real Estate division caters to high net worth investors and domestic
institutional investors, with ICICI Prudential AMC starting the Real Estate Investment Series
Portfolio in the year 2007.

3.6 Major competitors

A few of the competitors for ICICI Prudential Mutual Fund in the mutual fund sectors are
HDFC mutual fund , Reliance mutual fund, SBI mutual fund, Birla Sun Life mutual Fund & UTI
mutual fund.

HDFC Mutual Fund AMC is one of the top fund houses in India which offers a wide range
of mutual funds like equity, hybrid, and debt to cater to all types of investment needs of the
investors. It is the largest AMC in India currently with a AUM of 342291 Cr

Reliance Mutual fund is one of the top performing AMC in India. Reliance Mutual Fund (RMF)
is one of India's leading mutual funds, with Average Assets Under Management (AAUM) of Rs
2,22,575.73 Cr (April 2019 - June 2019 AUM) and 88.65 lakhs folios (as on June 30, 2019).
RMF which is one of the fastest growing mutual funds in India, offers investors a well-rounded
portfolio of products to meet varying investor requirements and has presence in 300 cities (as on
March 31, 2019) across the country. RMF constantly endeavours to launch innovative products
and customer service initiatives to increase value to investors.

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SBI Mutual Fund is a bank sponsored fund house with its corporate
headquarters in Mumbai, India. It is a joint venture between the State Bank of India, an Indian
multinational, Public Sector banking and financial services company and Amundi, a
European asset management company. It has a current AUM of 283807l Cr

Aditya Birla Sun Life AMC Limited (formerly known as Birla Sun Life Asset Management
Company Limited), the investment manager of Aditya Birla Sun Life Mutual Fund (formerly
known as Birla Sun Life Mutual Fund), is a joint venture between the Aditya Birla Group and
the Sun Life Financial Inc. of Canada. The joint venture brings together the Aditya Birla Group's
experience in the Indian market and Sun Life's global experience.
Established in 1994, Aditya Birla Sun Life Mutual Fund (ABSLMF), is co-sponsored by Aditya
Birla Capital Limited (ABCL) and Sun Life (India) AMC Investments Inc.

Having total domestic assets under management (AUM) of close to Rs.2423 billion for the
quarter ended December 31st, 2018, ABSLMF is one of the leading Fund Houses in India based
on domestic average AUM as published by the Association of Mutual Funds of India (AMFI).
ABSLMF has an impressive mix of reach, a wide range of product offerings across equity, debt,
balanced as well as structured asset classes and sound investment performance, and around 6.8
million investor folios as of December 31st, 2018.

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UTI Mutual Fund was carved out of the erstwhile Unit Trust of India (UTI) as
a SEBI registered mutual fund from 1 February 2003. The Unit Trust of India Act 1963 was
repealed, paving way for the bifurcation of UTI into – Specified Undertaking of Unit Trust of
India (SUUTI); and UTI Mutual Fund (UTIMF).
UTI Mutual Fund is promoted by the four of the largest Public Sector Financial Institutions as
sponsors, viz., State Bank of India, Life Insurance Corporation of India, Bank of
Baroda and Punjab National Bank with each of them holding an 18.24% stake in the paid up
capital of UTI AMC. It currently manages of 159694 Cr.

3.7 Market Share and the positions of the company in the market

ICICI Prudential Mutual Fund is the second largest asset management company (AMC) in India
as per average assets under management (AUM) as on 31st march 2019 with 321,281.17crores
just after HDFC Mutual Fund with total AUM of 342,524.71crores. HDFC mutual fund has
surpassed ICICI Prudential mutual fund to regain top position after two years as the largest asset
management company (AMC). In the last quarter of 2018 AUM under HDFC MF have risen
more than 9 percent when compared to the previous quarter. In the same period, AUM plunged
0.6 percent for ICICI Prudential MF. With AUM of Rs 2.64 lakh crore, SBI MF stands at the
third slot. Aditya Birla and Reliance MF follow next with Rs 2.42lakh crore and Rs 2.36lakh
crore, respectively.

3.8 Competitors in the markets

The top 10 competitors in ICICI Prudential Asset Management Company's competitive set are
BNP Paribas Mutual Fund, Reliance Mutual, SBI Mutual Fund, Sundaram Mutual,
HDFC Mutual Fund, Franklin Templeton Investments, IL& Fs Trust Company, SBI Mutual
Fund, IDBI Mutual and T. Rowe Price.

AUM sizes of the top 10 AMC’s of India are as follows:

Name of the AMC AUM (Rs. Cr)

HDFC Mutual Fund 342524.71

ICICI Prudential Mutual Fund 321281.17

SBI Mutual Fund 284123.64

Birla Sun Life Mutual Fund 246696.01

20
Reliance Mutual Fund 234292.54

UTI Mutual Fund 159694.23

Kotak Mahindra Mutual Fund 150271.25

Franklin Templeton Mutual Fund 119932.80

Axis Mutual Fund 89767.72

DSP Mutual Fund 78362.72

Top AMC’s of NE India:

AMC AUM (Rs. Cr)

SBI Mutual Fund 4664

Reliance Mutual Fund 1455

Aditya Birla Sun Life Mutual Fund 924

ICICI Prudential Mutual Fund 907

HDFC Mutual Fund 766

Mutual fund players' total assets under management (AUM) from the North East have grown
65.76 per cent in a year to Rs 14,454 Cr. as of August this year, spurred by aggressive marketing
and awareness campaigns by the industry. The cumulative AUM from the seven NE states of
Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Tripura and the
Himalayan state of Sikkim rose to Rs 14,454 cr., according to the AMFI data.

Among the Seven Sisters, as the NE states are popularly known, the largest state Assam has
emerged at top with the highest AUM of Rs 8,960 cr. up from Rs 5,025 cr. a year ago. It is
followed by Meghalaya (Rs 1,700 cr.), Tripura (Rs 1,007 cr.) and Sikkim (Rs 984 cr.). The fifth
largest AMC SBI Mutual Fund has emerged as the largest player in the region in the AUM
sweepstake with an AUM of Rs 4,664 cr., followed by Reliance Mutual Fund - Rs 1,455 cr.,
according to the AMFI data. The other AMCs that have made it big in the region include Aditya
Birla Sun Life (Rs 924 crore), ICICI Prudential (Rs 907 cr.) and HDFC (Rs 766 cr.).

3.9 SWOT Analysis of ICICI Prudential Mutual Fund

Strength:

1) Company’s Brand Name

2) Fund Performance

3) Strong channel partner network

4) Highly trustable

4) Very Innovative
21
5) Aggressive

6) Efficient service centre

7) Strong customer base

Weakness:

1) Services

2) Lack of awareness of the funds among the investors and the agents

3) Weak support system

4) Sometimes it fails to give personal attentions to customer queries

Opportunities:

1) Educational institutions

2) Small and medium enterprises

3) Households

4) International Funds

Threats:

1) Increased competitions

2) Services

3) Recent volatility in market

4) More redemption because of recent volatile markets.

22
 CHAPTER 4

DEPARTMENT DETAILS

4.1 Organizational chart showing different departments:

Management Team

Management
 Mr. Nimesh Shah- Managing Director & CEO
 Mr. B Ramakrishna - EVP & CFO
 Mr. Amar Shah - Head of Retail and Institutional Business
 Mr. Vikas Singhvi, Head Operations & Technology
 Mr. Amit Bhosale - Head of Risk Management
 Mr. Abhijit Shah - Head Marketing, Digital & Customer Experience
 Mr. Vivek Sridharan - Head of Institutional Business
 Mr. Aniruddha Chaudhuri – Head Retail Business
 Mr. Suresh Subramanian – Head Operations
 Mr. Nikhil Bhende - Head Human Resources
 Ms.Supriya Sapre - Head Compliance
 Mr. Adil Bakhshi - Head Public Relations & Communication
 Mr. Lalit Popli - Head Information Technology
Investment Management
 Mr. S. Naren - Executive Director & Chief Investment Officer
 Mr. Rahul Goswami - Chief Investment Officer– Fixed Income
 Mr. Rahul Rai - Head of Real Estate Business
 Mr. Mrinal Singh - Deputy CIO- Equity
Board of Directors: Asset Management Company
 Mr. C. R. Muralidharan
 Mr . Suresh Kumar
 Ms. Lakshmi Venkatachalam
 Mr. Ved Prakash Chaturvedi
 Mr. Dilip Karnik
 Mr. Anup Bagchi
 Mr. Sandeep Batra
 Mr. Seck Wai Kwong
 Mr. Nimesh Shah
 Mr. S. Naren - Executive Director & Chief Investment Officer
Directors of the Trustee Company
 Mr . Vinod Dhall
 Mr. Jyotin Mehta
 Mr. Ranganayakulu Jagarlamudi
 Mr. Lakshman Kumar Mylavarapu
 Mr. Pramod Rao

ORGANIZATIONAL STRUCTURE OF ICICI PR UDENTIAL LIFE

INSURANCE CO. LTD

23
 CEO

HEAD
OFFICE

BRANCH
OFFICE

BRANCH MANAGER

SALES MANAGER CHANNEL ANNUAL MAINTENANCE

KEY ACCOUNTS MANAGER
CONTARCT MANAGER

SALES SALES EXECUTIVE -4 SERVICE ENGINEER -4

EXECUT
IVE -4

24
 TELE CALLER -5

4.2 Snapshot of different departments:

25
4.3 Specify the area in which training has been taken:

The training has been taken in sales and marketing in ICICI PRUDENTIAL MUTUAL FUND.
4.4 Roles and responsibilities of that particular area.

Sales and Marketing department: The AMC basically has two departments viz. Sales and
marketing and the operations department. I did my study and intern in the sales and marketing
department.

Roles:

26
Suggesting the best fund : The main role of this department is to suggest the most suitable fund
to the agents and the investors. It involves the funds which is both beneficial for the company
and the investors.

Marketing of the funds: The funds need to be marketed in such a way that the investors and
the general people gets aware about the fund.

Handling the IFA’s, distributors, general clients etc: The Relationship Managers (RMs)
creates awareness about their products to the people and are said targets to do so.

Payment of commission: The RM’s decide the payment of commission ranges to the different
levels of distributors and IFA’s.

4.5 Detailing of each and every work performed by them.

Act as an agent: A relationship manager acts as its agent of an investor and represents his
clients to invest in mutual funds. The main role of RM is to maintain good relationships with
clients so that the business can maximize the value of those relationships. Resolve any customer
complaints in a prompt and professional manner.
Identification of key investors: One of the role of Relationship Manager is find out key
investors for the company. Identify key contacts at potential client companies to establish and
foster a relationship.
Paid on commission: Individual distributors are paid commission according to their AUM
sizes in the market and also their contacts and experience in the market. Commissions and fees
vary.
4.6 Highlight the training method adopted during training:

 During my internship, I was made aware of the workings of the company i.e. theoretical
knowledge and later I was instructed to perform certain tasks like creating awareness
about the mutual funds and the products offered by the company.
 I was asked to accompany the RM’s through which I was able to visit many distributors
and investors from which i was able to gather knowledge about the industry.

27
 Chapter 5
Learning’s and Value Addition
5.1 Learning’s and Value Addition during training
a) On the first day of joining ICICI Prudential AMC as an intern, I was introduced to our branch
manager Mr. Mrinal Nayak who gave an overview of the company, its area of working and the
tasks which I was going to perform during the period of internship.

b) On the first day, I was asked to study about the terms related to mutual fund industry or which
the AMC uses from a book which was introduced by the National Institutes of Securities
Markets (NISM).

c) The book helped me to know about the terms related to the industry. It also helped me to
know the basic knowledge about the functioning of stocks, shares, investors market, AUM’s,
securities etc. The book also helps the interested persons who wants to apply for the NISM
certifications.

d) I was also asked to study the flagship of my company to know about the funds and was asked
if possible explain to some interested persons or clients. They introduced to me some of their
funds and their schemes and their performance and returns.

e) During the period of the training I accompanied one of our Relationship Manager who
introduced me to the IFA’s. During the time I met nearly 60 IFA’s , distributors and clients.
Sometimes I was asked to visit the clients on my own.

f) Next I was asked by my mentor Miss Kasturi Kalita, to study about some other AMC’s and
their top performing funds and to compare with ICICI Prudential top performing funds.

g) I also got the chances to visit some financial institutions with my mentor and also attended
some presentations presented by my mentor in those institutes.

h) I was also introduced to the IPRU TOUCH app, which is introduced by ICICI Prudential so
that the investors or the clients can be directly benefitted and such that they can have a look on
their accounts or investments without the help of a third party.

i) In the penultimate week of my internship I was asked to create awareness about the funds of
the company to the general peoples. A make shift canopy was done near the Noonmati IOCL
area and I was asked to give a brief description about mutual funds, SIP and some of the funds to
the interested peoples. In this programme I was helped by some of the IFA’s to whom I shall be
always grateful to.

j) My seniors also conducted some knowledge session which helped to a lot to know about the
current market situations and how to deal with the possibilities.

5.2 OBJECTIVES OF THE PROJECT

1) To gain knowledge and skills required to compete in the corporate sector

28
2) To understand and have a overview in the financial market

3) To understand how an Asset Management Company works

4) To understand the financial planning and investment in the financial market

5) To determine the most suited fund to be invested according to the situations

6) To know more about the mutual funds and its investments area

7) To know the mutual fund performance in the present market

8) To get insight knowledge about mutual funds

9) To know whether the people are happy towards their investments

10) To know people behaviour regarding risk factor involved in mutual Fund

5.3 CHALLENGES FACED DURING THE COURSE OF INTERNSHIP

1) As a fresher it was always a very difficult task to understand the working culture of an
organization in the initial stage

2) A complete different working environment

3) Sometimes the clients were very rigid and were not ready to understand

4) Locations of some of the clients were in a distant place

5) Had to contact with some stern distributors

6) Sometimes the clients showed their arrogant towards us

7) During the days of the makeshift canopy, had to deal with some very arrogant and
uninterested customers.

8) Sometimes it was hard to understand about the workings at one go

5.4 USEFULLNESS OF THE TRAINING

1) Helped me to gain a lot of confidence

2) I tried to groom myself in the conversation and confidence area

3) Meet different peoples having different ideas, humour, knowledge, skills which in return
helped me a lot about the market

4) Tried to know about the working style of the AMC’s

5) Helped me a lot in gaining idea about Mutual Fund industry

29
6) Gave a practical exposure

7) Helped in learning how to deal with different clients

8) Got to learn about how all the different departments work

9) Client Relationship Management

5.4 RESEARCH METHODOLOGY

Research refers to search for knowledge. One can also define research as a scientific and
systematic search for pertinent information on a specific topic. It is an art of scientific
investigation. It is the way to systematically solve a problem. By the following method I have
collected my data for my project:

a) Primary Data: I visited IFA’s and many other distributors and clients to gather the data
directly. I was also able to meet direct customers when I was given a 5 days training in a make
shift canopy in the market.

b) Secondary Data: Secondary data were collected from the company website and the NISM
website.

30
 CHAPTER 6:

ANALYSIS OF MUTUAL FUND

What is Mutual Fund Analysis?

Mutual fund analysis typically consists of a very basic analysis of the fund's strategy (growth or
value), median market cap, rolling returns, standard deviation and perhaps a breakdown of its
portfolio by sector, region and so on. As investors, we often settle for statistical results without
questioning the underlying drivers of those results, which in many cases can reveal some very
interesting details.

There are a number of attractive mutual funds and fund managers that have performed very
well over both long-term and short-term horizons. Sometimes, performance can be attributable
to a mutual fund manager's superior stock-picking abilities and/or asset allocation decisions. In
this article, we'll summarize how to analyze a mutual fund's portfolio and determine whether
there are specific performance drivers.

Portfolio Analysis

All mutual funds have a stated investment mandate that specifies whether the fund will invest in
large companies or small companies, and whether those companies
exhibit growth or value characteristics. It is assumed that the mutual fund manager will adhere to
the stated investment objective. It's a good start to understand the fund's specific investment
mandate, but there is more to fund performance that can only be revealed by digging a bit deeper
into the fund's portfolio over time.

Sector Weights

Sometimes fund managers will gravitate toward certain sectors either because they have deeper
experience within those sectors, or the characteristics they look for in companies force them into
certain industries. A reliance on a particular sector may leave a manager with limited
possibilities if they have not broadened their investment net.

To determine a fund's sector weight, we must either use analytical software or sources like
Yahoo or MSN. Regardless of how the information is obtained, the investor must compare the
fund to its relevant indexes to determine where the fund manager increased or decreased their
allocation to specific sectors relative to the index. This analysis will shed light on the manager's
over/underexposure to specific indexes (relative to the index) in order to gain additional insight
on the fund manager's tendencies or performance drivers.

The analysis can be as simple as listing the fund and relevant indexes side by side with a
breakdown by sector. For example, for a large-cap manager, the simplest way to determine
sector reliance is to place the fund's sector breakdown next to both the S&P 500/Citigroup
Growth Index and the S&P 500/Citigroup Value Index. Both of these indexes exhibit unique
sector breakdowns because certain sectors routinely fall into the value category, while others fall
into the growth category. Technology, known more as a growth sector, will have a higher weight
in the S&P/Citigroup Growth Index than in the S&P 500/Citigroup Value Index. Industrials, on
the other hand, known as a value sector, will have a higher weight in the S&P 500/Citigroup
Value Index than in the S&P 500/Citigroup Growth Index. A comparison of the fund relative to

31
 the sector breakdown of these two indexes will indicate whether the fund is in line with its stated
mandate and reveal any over or under allocations to a specific sector.

Attribution Analysis

There are fund managers who claim to have a top-down approach and others that claim to have
a bottom-up approach to stock-picking. Top-down indicates that a fund manager evaluates the
economic environment to identify global trends, and then determines which regions or sectors
will benefit from these trends. The fund manager will then look for specific companies within
those regions or sectors that are attractive.

A bottom-up approach, on the other hand, ignores, for the most part, macroeconomic factors
when searching for companies to invest in. A manager that employs a bottom-up methodology
will filter the entire universe of companies based on certain criteria, such as valuation, earnings,
size, growth or a variety of combinations of these types of factors. They then perform
rigorous due diligenceon the companies that pass through each phase of the filtering process.

In order to determine whether a fund manager is actually adding any value to performance based
on asset allocation or stock picking, an investor needs to complete an attribution analysis that
determines a fund's performance driven by asset allocation versus performance driven by stock
selection. Attribution analysis, for example, can reveal that a manager has placed incorrect bets
on sectors but has picked the best stocks within each sector. Using this example, this manager
should have a bottom-up approach. If the manager's mandate describes a top-down
methodology, this might be a cause for concern because we've discovered that the fund manager
has done a poor job of asset allocation (top-down).

Analysing of Mutual Funds

1. Analyze Mutual Fund Performance. If you are going to analyze historical returns, you need to do
it right. ...
2. Look for a Low Turnover Ratio: The turnover of a fund represents the percentage of the fund's
holdings that have been replaced during the previous year. ...
3. Find Tax-Efficient Funds for Taxable Accounts.

Mutual Fund Analysis: What to Analyze

While most mutual funds claim to have processes in place for selection of instruments, what
most cannot avoid is a preference bias and a style of investing. Since this may affect the choices
you make for your portfolio, it is essential that you select funds which have an acceptable style
and thesis.

Varieties of tools and analyses essentials for analysis of funds:

Using Appropriate Benchmarks

The first piece of information to analyze with mutual fund performance is the fund’s returns
compared to an appropriate benchmark. If you notice that one of your funds had a divergent
value from others in a given time frame, this is no indication that the declining fund should be
removed from your portfolio. This requires the funds to be clustered in similar categories
irrespective of what the fund says and understanding whether that benchmark or cluster is where
you wish to invest.

32
Focus on Mid to Long Term Performance
Investing is a marathon, not a race; it should be boring, not exciting. Strong performance is not
sustainable and in mutual funds, one prefers what is called consistent performance and not
superlative.
Just as some fund managers are bound to have a bad year from time to time, fund managers are
also bound to do better in certain economic environments, and hence extended time frames of up
to three years, better than others. For example, perhaps a fund manager has a solid conservative
investment philosophy that leads to higher relative performance during poor economic
conditions but lower relative performance in good economic conditions.
Considering the fact that fund management styles come in and out of favor and the fact that
market conditions are constantly changing, it is wise to judge a fund manager’s skills, and hence
a particular mutual fund’s performance, by looking at time periods that span across differing
economic environments.

Common time periods for mutual fund performance available to investors include the 1-year, 3-
year, 5-year and 10-year returns.

Manager Tenure
Manager tenure must be analyzed simultaneously with fund performance. Keep in mind that a
strong 5-year return, for example, means nothing if the fund manager has been at the helm for
only 1 year.

The Greeks

While other factors listed above are more or less subjective, there are simple mathematical tools
that one should use for analysis of funds
a) Alpha – Alpha is a measure of performance on a risk-adjusted basis. Alpha takes the volatility
(price risk) of a mutual fund and compares its risk-adjusted performance to a benchmark index.
The excess return of the fund relative to the return of the benchmark index is a fund’s alpha. In
other words, Alpha tells you if the fund manager is worth what you pay him. – a positive Alpha
is good, negative Alpha is bad.
b)Beta – Beta is a measure of the volatility, or systematic risk, of a security or a portfolio in
comparison to the market as a whole. Beta is calculated using regression analysis, and you can
think of beta as the tendency of a security’s returns to respond to swings in the market- in other
words, Beta is an expression of how volatile an investment is compared to the overall market.
c) Correlation – Correlation simply describes how two things are similar or dissimilar to each
other. Specifically how two investments move in relation to each other, how tightly they are
linked or opposed- so when you are looking for predictability or desired behavior you look at
funds with strong correlation to the preferred index or benchmarks
R-squared (R2) is an advanced statistical measure that investors can use to determine a particular
investment’s correlation with (similarity to) a given benchmark. For example, an R-squared of
100 indicates that all movements of a fund can be explained by movements in the index.
d)Sharpe Ratio

This ratio shows the return per unit of the total risk taken by the scheme. Higher than category
average Sharpe ratio indicates that the fund manager was able to generate higher return per unit
of total risk.

e)Treynor’s Ratio
This ratio indicates the return per unit market risk—also known as systemic risk—taken by the
scheme.Higher than category average Treynor’s ratio indicates that the fund manager was able to
generate higher return per unit of systemic or market risk.
33
Expense Ratio
Mutual funds do not run themselves. They need to be managed and this management is not free!
The expenses to operate a mutual fund determine returns especially over long periods of time.
Never buy a mutual fund with expense ratios higher than these especially when selecting debt
funds!
Number of Holdings
Typically, if a fund only has 20 or 30 holdings, volatility and risk can be significantly high
because there are fewer holdings with a larger impact on the performance of the mutual fund.
Conversely, if a fund has 60 or 70 holdings, it is so large that its performance is likely to be
similar to an index, such as the Nifty. In this case, an investor may as well just buy one of the
best index funds rather than hold a large-cap stock fund with the entire basket of the Nifty!
Turnover Ratio
The Turnover Ratio of a mutual fund is a measurement that expresses the percentage of a
particular fund’s holdings that have been replaced (turned over) during the previous year. A low
turnover ratio indicates a buy and hold strategy for actively-managed mutual funds but it is
naturally inherent to passively-managed funds, such as index funds and Exchange Traded Funds
(ETFs). In general, and all other things being equal, a fund with higher relative turnover will
have higher trading costs (Expense Ratio) and higher tax costs, than a fund with lower turnover.
In summary, lower turnover generally translates into higher net returns.
Style Drift
Style drift is a lesser-known potential problem for mutual funds, especially actively managed
funds, where the fund manager sells out of one type of asset class and buys more of another type
that may not have been part of the original objective of the fund. For example, a large-cap stock
mutual fund may “drift” toward the mid-cap style if the manager sees more opportunities in
smaller capitalization areas.
When doing your research, be sure to look at the history of the fund’s style.

Credit Rating

All debt papers that the fund invests in are rated by agencies according to their risk profile.
While government securities are totally risk free, corporate papers are rated from AAA (highest
safety) to D (default). High rating indicates that the fund is taking lower credit risk. Since
investors go for debt investment to reduce risk, they should avoid schemes with too many low
quality papers.

Things to analyse in Mutual Funds

1. Expense Ratio
Mutual funds do not run themselves. They need to be managed and this management is
not free! The expenses to operate a mutual fund can be as involved as a corporation. But
all you need to know is that higher expenses do not always translate into higher mutual
fund returns. In fact, lower expenses usually translate into higher returns, especially over
long periods of time.
But what expense ratio is high? Which is best? When doing your research, keep in
mind average expense ratios for mutual funds. Here are a few examples:
Large-Cap Stock Funds: 1.25%
Mid-Cap Stock Funds: 1.35%
Small-Cap Stock Funds: 1.40%
Foreign Stock Funds: 1.50%
S&P 500 Index Funds: 0.15%
Bond Funds: 0.90%
Never buy a mutual fund with expense ratios higher than these! Notice that the average
34
 expenses change by fund category. The fundamental reason for this is that research costs
for portfolio management are higher for certain niche areas, such as small-cap stocks and
foreign stocks, where information is not as readily available compared to large domestic
companies. Also, index funds are passively managed. Therefore costs can be kept
extremely low.

2.Manager Tenure (for Actively-Managed Funds)

Manager Tenure refers to the amount of time, usually measured in years, a mutual fund
manager or management team has been managing a particular mutual fund.
Manager tenure is most important to know when investing in actively-managed mutual
funds. Managers of actively managed funds are actively trying to outperform a particular
benchmark, such as the S&P 500; whereas the manager of a passively-managed fund is only
investing in the same securities as the benchmark.
When looking at a mutual fund's historical performance , be sure to confirm the manager or
management team has been managing the fund for the time frame you are reviewing. For
example, if you are attracted to the 5-year return of a mutual fund but the manager tenure is
only one year, the 5-year return is not meaningful in making the decision to buy this fund.

3. Number of Holdings
A mutual fund's holdings represent the securities (stocks or bonds) held in the fund. All of
the underlying holdings combine to form a single portfolio. Imagine a bucket filled with
rocks. The bucket is the mutual fund and each rock is a single stock or bond holding. The
sum of all rocks (stocks or bonds) equals the total number of holdings.
In general, mutual funds have an ideal range for the total number of holdings and this range
depends on the category or type of fund. For example, index funds and some bond funds are
expected to have a large number of holdings, often in the hundreds or even thousands of
stocks or bonds. For most other funds, there are disadvantages to having too few or too many
holdings.
Typically, if a fund only has 20 or 30 holdings, volatility and risk can be significantly high
because there are fewer holdings with a larger impact on the performance of the mutual fund.
Conversely, if a fund has 400 or 500 holdings, it is so large that its performance is likely to
be similar to an index, such as the S&P 500. In this case, an investor may as well just buy
one of the best S&P 500 index funds rather than hold a large-cap stock fund with hundreds
of holdings.
The fund with very little holdings is like the small boat at sea that can move quickly but is
also vulnerable to the occasional large waves. However, the fund with too many holdings is
so big it may not be harmed as much by shifting waters but it can't move away from a glacier
that can rip its hull and sink like the Titanic.
Look for a fund with at least 50 holdings but less than 200. This may assure the "just right"
size that is not too small or too large. Remember the apples-to-apples rule and look at the
averages for a given category of mutual fund. If the fund you are analyzing is much lower or
higher in the total number of holdings than its respective category average, you may want to
dig deeper to see if this fund is good for you.
Also, you will want to see if the fund you are analyzing fits with the other funds in your
portfolio. A fund with only 20 holdings can be risky on its own, but it may work as one part
of a diversified mix of mutual funds within your own portfolio.

4. Long-Term Performance
When researching and analyzing investments, especially mutual funds, it is best to look at
long-term performance, which can be considered a period of 10 or more years. However,
"long-term" is often loosely used in reference to periods that are not short-term, such as one
year or less. This is because 1-year periods do not reveal enough information about a mutual
35
fund's performance or a fund manager's ability to manage an investment portfolio through a
full market cycle, which includes recessionary periods as well as growth and it includes
a bull market and bear market. A full market cycle is usually 3 to 5 years. This is why it is
important to analyze performance for the 3-year, 5-year and 10-year returns of a mutual
fund. You want to know how the fund did through both the ups and the downs of the market.
Often a long-term investor employs a buy and hold strategy, where mutual funds are selected
and purchased but not significantly changed for up to several years or more. This strategy
has also been affectionately labeled the lazy portfolio strategy.
A long-term investor can afford to take more market risk with their investments. Therefore,
if they don't mind taking a high relative risk, they may choose to build an aggressive
portfolio of mutual funds.

5. Turnover Ratio
The Turnover Ratio of a mutual fund is a measurement that expresses the percentage of a
particular fund's holdings that have been replaced (turned over) during the previous year. For
example, if a mutual fund invests in 100 different stocks and 50 of them are replaced during
one year, the turnover ratio would be 50%.
A low turnover ratio indicates a buy and hold strategy for actively-managed mutual funds but
it is naturally inherent to passively-managed funds, such as index funds and Exchange
Traded Funds (ETFs). In general, and all other things being equal, a fund with higher relative
turnover will have higher trading costs (Expense Ratio) and higher tax costs, than a fund
with lower turnover. In summary, lower turnover generally translates into higher net
returns.
Some mutual fund types or categories of funds such as bond funds and small-cap stock
funds will naturally have high relative turnover (up to 100% or more) while other fund types,
such as index funds, will have lower relative turnover (less than 10%) compared to other
fund categories.
Generally, for all types of mutual funds, a low turnover ratio is less than 20% to 30% and a
high turnover is above 50%. The best way to determine ideal turnover for a given mutual
fund type is to make an "apples to apples" comparison to other funds in the same category
average. For example, if the average small-cap stock fund has a turnover ratio of 90%, you
may choose to seek small-cap funds with turnovers significantly below that average mark.

6. Tax Efficiency (Taxable Accounts)

This research data point is only for research funds that will be placed into a taxable
brokerage account (not a tax-deferred account, such as an IRA or 401k). Mutual fund
investors are often confused and surprised when they receive a 1099 form that says they had
income from dividends or that they received capital gains distributions.
The basic mistake here is a simple oversight: Mutual fund investors often overlook how their
funds are invested. For example, mutual funds that pay dividends (and hence generate
taxable dividend income to the investor) are investing in companies that pay dividends. If the
mutual fund investor is unaware of the underlying holdings of a mutual fund, they may be
surprised by dividends or capital gains that are passed on to the investor by the mutual fund.
In other words, the mutual fund can generate dividends and capital gains that are taxable
without knowledge of the investor.

The basic lesson here is to place funds that generate taxes in a tax-deferred account so you
get to keep more of your money growing. If you have accounts that are not tax-deferred,
such as a regular individual brokerage account, you should use mutual funds that are tax-
efficient.
A mutual fund is said to be tax efficient if it is taxed at a lower rate relative to other mutual
funds. Tax-efficient funds will generate lower relative levels of dividends and/or capital
36
gains compared to the average mutual fund. Conversely, a fund that is not tax efficient
generates dividends and/or capital gains at a higher relative rate than other mutual funds.
Tax-efficient funds generate little or no dividends or capital gains. Therefore, you will want
to find mutual fund types that match this style if you want to minimize taxes in a regular
brokerage account (and if your investment objective is growth - not income). First, you can
eliminate the funds that are typically least efficient.
Mutual funds investing in large companies, such as large-cap stock funds, typically produce
higher relative dividends because large companies often pass some of their profits along to
investors in the form of dividends. Bond funds naturally produce income from interest
received from the underlying bond holdings, so they are not tax-efficient either. You also
need to be cautious of actively-managed mutual funds because they are trying to "beat the
market" by buying and selling stocks or bonds. So they can generate excessive capital gains
compared to passively-managed funds.
Therefore, the funds that are tax-efficient are generally ones that are growth-oriented, such as
small-cap stock funds, and funds that are passively managed, such as index
funds and Exchange Traded Funds (ETFs).
The most basic way to know if a fund is tax-efficient or not tax-efficient is by looking at the
fund's stated objective. For example, a "Growth" objective implies that the fund will hold
stocks of companies that are growing. These companies typically reinvest their profits back
into the company - to grow it. If a company wants to grow, they won't pay dividends to
investors - they'll reinvest their profits into the company. Therefore a mutual fund with a
growth objective is more tax-efficient because the companies in which the fund invests are
paying little or no dividends.
Also, index funds and ETFs are tax-efficient because of the passive nature of the funds are
such that there is little or no turnover (buying and selling of stocks) that can generate taxes
for the investor.
A more direct and reliable way to know if a fund is tax-efficient is to use an online research
tool, such as Morningstar, that provides basic tax-efficiency ratings or "tax-adjusted returns"
compared to other funds. You will want to look for tax-adjusted returns that are close to the
"pre-tax returns." This indicates that the investor's net return has not been eroded away by
taxes.
The ultimate objective for the wise investor is to keep taxes to a minimum because taxes are
a drag on the overall returns of the mutual fund portfolio. However, there are a few
alternative exceptions to this overall rule. If the investor only has tax-deferred accounts, such
as IRAs, 401(k)s and/or annuities, there is no concern about tax-efficiency because there are
no current taxes owed while holding the funds in one or all of these account types. However,
if the investor has only taxable brokerage accounts, they may try to concentrate on holding
only index funds and ETFs.

7. Mutual Fund Category

When researching for funds, it is important to know which fund type or category you need
to begin or complete your portfolio.
Mutual funds are organized into categories by asset class (stocks, bonds, and cash) and then
further categorized by style, objective or strategy. Learning how mutual funds are
categorized helps an investor learn how to choose the best funds for asset allocation and
diversification purposes. For example, there are stock mutual funds, bond mutual funds, and
money market mutual funds. Stock and bond funds, as primary fund types, have dozens of
sub-categories that further describe the investment style of the fund.
Stock funds are first categorized by style in terms of the average market capitalization (size
of a business or corporation equal to the share price times the number of outstanding shares):
The types of bond funds and how they are categorized may be best understood by revisiting
the basics of bonds. Bonds are essentially IOUs issued by entities, such as the US
37
 Government or corporations, and bond mutual funds are primarily categorized by those
entities who want to borrow money by issuing bonds:

8. Style Drift
Style drift is a lesser-known potential problem for mutual funds, especially actively managed
funds, where the fund manager sells out of one type of security and buys more of another
type that may not have been part of the original objective of the fund. For example, a large-
cap stock mutual fund may "drift" toward the mid-cap style if the manager sees more
opportunities in smaller capitalization areas.
When doing your research, be sure to look at the history of the fund's style. Morningstar does
a good job of providing this information.

9. R-Squared
R-squared (R2) is an advanced statistical measure that investors can use to determine a
particular investment's correlation with (similarity to) a given benchmark. Beginners do not
need to know this at first but it is good to know. R2 reflects the percentage of a fund’s
movements that can be explained by movements in its benchmark index. For example, an R-
squared of 100 indicates that all movements of a fund can be explained by movements in the
index.
In different words, the benchmark is an index, such as the S&P 500, that is given a value of
100. A particular fund's R-squared can be considered a comparison that reveals how similar
the fund performs to the index. If for example, the fund's R-squared is 97, it means that 97%
of the fund's movements (ups and downs in performance) are explained by movements in the
index.
R-squared can help investors in choosing the best funds by planning the diversification of
their portfolio of funds. For example, an investor who already holds an S&P 500 Index fund
or another fund with a high R-squared to the S&P 500, will want to find a fund with a lower
correlation (lower R-squared) to be sure they are building a portfolio of diversified mutual
funds.
R-squared can also be useful in reviewing existing funds in a portfolio to be sure their style
has not "drifted" toward that of the benchmark. For example, a mid-cap stock fund can grow
in size and the fund manager may increasingly buy large-cap stocks over time. Eventually,
what was originally a mid-cap stock fund when you bought it is now a fund that resembles
your S&P 500 Index fund.

10. Fund Overlap

When adding new funds, be sure you are not investing in an area that you already have in
your portfolio. Overlap occurs when an investor owns two or more mutual funds that hold
similar securities. For a simple example, if an investor owns two stock mutual funds and they
both invest in many of the same stocks, the similarities create an effect of reducing the
benefits of diversification by increasing exposure to those same stocks -- an unwanted
increase in market risk.
Imagine a Venn diagram with two circles, each representing a mutual fund, overlapping in
the center. As an investor, you don't want too much of an intersection between the circles--
you want the least amount of overlap possible. For example, try not to have more than one
large-cap stock or index fund, one foreign stock fund, one small-cap stock fund, one bond
fund, and so on.
If you prefer to have several funds, or you have a 401(k) plan with limited choices, you can
detect fund overlap by looking on one of the best research sites for analyzing mutual
funds and look at R-squared (R2).

Things to ignore while analysing Mutual Funds

38
1. Net Asset Value (NAV): Common mistakes beginning investors make is to confuse price
with value and to confuse price with Net Asset Value (NAV). The NAV of a mutual fund is not
its price but rather a total value of the securities in the fund minus liabilities, divided by shares
outstanding. For practical purposes, however, NAV can be considered "a price." However, a
higher price does not indicate a higher value and a lower price does not indicate a poor value or
a bargain. Bottom line: Ignore NAV; it has nothing to do with the value or potential of the
mutual fund itself.

2. Short term Performance: Most mutual fund investors should ignore short-term performance
when doing their research because most mutual funds are not suitable for short investing periods;
they are designed for intermediate to long-term (3 to 10 years or more) investment objectives.
Short-term, with regard to investing, generally refers to a period less than 3 years. This is also
generally true for categorizing investors as well as bond securities. In fact, many investment
securities, including stocks, mutual funds, and some bonds and bond mutual funds, are not
suitable for investment periods less than 3 years.
For example, if an investment adviser asks questions to gauge your risk tolerance, they are
seeking to determine what investment types are suitable for you and your investment objectives.
Therefore, if you tell the adviser your investment objective is to save for a vacation you are
planning to take 2 years from now, you would be categorized as a short-term investor. Therefore
short-term investment types would be ideal for this savings goal.
Bonds and bond funds are categorized as short-term if the respective maturity (or more
accurately what is called duration)is between 1 and 3.5 years.
When researching and analyzing investments, especially actively-managed mutual funds, a 1-
year period does not provide any reliable insight into a particular fund's prospects for performing
well in the future. This is because 1-year periods do not reveal enough information about a fund
manager's ability to manage an investment portfolio through a full market cycle, which includes
recessionary periods as well as growth and it includes a bull market and bear market.
A full market cycle is usually 3 to 5 years. This is why it is important to analyze performance for
the 3-year, 5-year and 10-year returns of a mutual fund. You want to know how the fund did
through both the ups and the downs of the market. Therefore, the short-term (less than 3 years) is
not a consideration when researching mutual funds for long-term investing.

3. Manager tenure (for index fund): Yes, your memory is correct: It is wise to analyze
manager tenure when researching actively-managed mutual funds, which makes perfect sense.
However, it makes no sense to analyze manager tenure for index funds.
Index funds are passively managed, which means they are not designed to "beat the
market;" they are designed to match a benchmark index, such as the S&P 500. Therefore the
fund manager is not really a manager; they are simply buying and selling securities to copy
something that already exists.

How to analyse the performance of a Mutual Fund Scheme?

Nobody knows your investment goals better than you. That is why it is recommended that you
do your investment research on your own, without depending on anybody. The advent of the
digital age has opened a world of information, which helps you analyze all the mutual funds in
the market and select ones that suit your preferences. However, analyzing the performance of
mutual funds is more than just about browsing through daily NAVs and past returns. Here are
some useful tips to consider:

39
Compare the scheme with benchmark

Each mutual fund scheme has an index used as a benchmark to measure performance. Since
2012, SEBI has made it mandatory for all fund houses to declare a benchmark index in the offer
document. There are various benchmarks such as BSE 200, Sensex, Nifty, CNX Midcap, etc. If
the returns on your mutual fund scheme is higher than the benchmark, then it is performing well
and vice versa. So, if the mutual fund scheme invests in large cap funds, then the benchmark is
most likely to be Nifty. Now, make sure that you measure the scheme performance against its
benchmark over a period of longer time frame, or else you may not get the right perspective. It
would be a good idea to study the data for three, five and ten year period. If the scheme is
performing inconsistently, it is an indication to exit.

Compare the scheme with other funds of same category

You can never compare apples and oranges even though both of them are fruits. Similarly, you
cannot compare the performance of large-cap funds with small-cap funds or banking funds with
pharma funds. So, apart from evaluating the performance of the mutual fund scheme against its
benchmark, you should also look at the category average returns.

See the total return

The total return on mutual fund investment is a combined total of increase/decrease in NAV and
dividend earned over a period of time. Evaluating the total return will give you a fair idea about
the potential performance.

Study the risk-adjusted return

The mutual fund scheme is said to be performing well when it gives better returns than its peers
for the same kind of risk taken. This is called risk-adjusted return. Risk adjusted returns can be
measured by looking at ratios such as Sharpe and Treynor. All schemes publish such ratios
periodically. Schemes in the same category scoring better on these ratios should be considered
superior.

Study the rolling return

Rolling returns consider the performance of mutual funds on every day, week or pre-defined
period. Usually the performance of the fund in the short-term is affected by the performance of
some sectors or volatility of the market. Rolling returns will tell you whether the said fund is
subject to fluctuations in a short period or is performing consistently.

Check the portfolio diversification

Keep track of the portfolio history of the mutual fund scheme you have invested in. Ideally, you
should do this every three to six months to know that the scheme is not biased towards a
particular stock or sector and is in sync with your risk profile and as mandated in the offer. You
can get the portfolio history on the websites of fund houses or mutual fund trackers.

Study the ratios

There are a number of ratios such as standard deviation, sharpe, alpha, beta, expense and a few
more to measure the risk associated with mutual funds. It is advisable to compare the ratio on the

40
mutual fund scheme you have invested in vis-a-vis its peers. This way, you will not only analyze
the ‘return’ component, but also measure the ‘risk’ or volatility of the scheme

GRAPHICAL ANALYSIS OF THE STUDY

\
My research was carried in the city of Guwahati only. The sample size was 70. My sample
mostly included the Independent Financial Advisors (IFA’s), distributors, agents and a small
amount of direct or potential clients which I interacted during the course of marketing or the
canopy service organized by my institute.

1) Age Groups

Age

3%
12%

20%
18-24
25-31
25% 32-38
39-45
45 & above

40%

Fig 1: Figure showing the age group in the market

INTERPRETATION:

From this graph we can conclude that there are all age group people but majority is between 32
to 38 and 25 to 31 years. This groups people are ready to take risk in Mutual Funds and other
securities more than the other age group people. That is why they have selected mutual fund and
securities in their portfolio. This can be justified with a logic that the younger generation can
take the risk to get the return from the stocks and mutual fund.

41
2) Gender

Gender

35%
Male
Female

65%

Fig 2: Figure showing the percentage of male and female in this study

INTERPRETATION:

From this graph we can conclude that males invest more on Mutual funds than the Females.

3) Current employment Status

Status

5%

20%
40% Employed
Self Employed
Retired
Student

35%

Fig 3: figure showing the employment status of the people

42
INTERPRETATON: From the figure we can see that the peoples who are employed are more
interested in investing the mutual funds followed by the self employed and than the peoples who
are retired

4) Qualifications

Qualifications

5%
20%
15%
HSLC
HSSLC
Graduate

20% Post Graduate

Any Other

40%

Fig 4: figure showing the educational qualification of the respondents

INTERPRETATION:

From the above graph we can conclude that most of the respondents were graduate . They have
good knowledge about all the investment modes for their portfolio and they all are ready to take
risk in future. There are also 20 percent people who have only 10+2 but it’s a very good thing
that they a keen interest to invest in mutual funds.

43
5) Marital Status

Marital Status

Married
45%
Unmarried

55%

Fig 5: Figure showing the marital status of the respondents

INTERPRETATION:
The above figure showing the marital status of the person. In this graph there are 55
percent people are unmarried and 45 person are married. We can conclude that the
unmarried person are thinking about their future and their upcoming generation.

6) Annual Income

Income

5%

25% 15%
Below 1,00,0000
1,00,000-3,00,000
3,00,000-5,00,000
5,00,000-7,00,000
25% 7,00,000 and above

30%

Fig 6: Figure showing the annual income of the respondents

44
INTERPRETATION: From the above graph we can conclude that there are around 5
percent whose income is less than 100000. These people invest less than the rest of the
income slab people. There are 15 percent people from the income slab of 100000 to
300000 , around 25 percent people from the income slab of 300000 to 500000, 30
percent people are between 500000 to 700000 income slab and so on. Mostly the income
slab people invest in mutual funds. The investing parameter of the clients depends on
their income level. The high income people like to invest mostly in lump sum while the
person with low income basically goes with SIP’s.

7) Investment on Mutual Funds

Investment

40% Yes
No

60%

Fig 7: Figure showing the percentage of people investing in mutual funds

INTERPRETATION: Since I have collected my data mostly from the IFA’s and very a
bit less from self approaching , so we can see that a high number are interested in
investing in mutual funds. From the figure we can see that 60% people have already
invested in mutual funds from my data and upon that 40% many are keen to invest in
mutual funds.

45
8) Different Investment Avenue

Avenues

10%

5%
30% Bank Deposit
Fixed Deposit
Mutual Funds
20% Equities
Commodities

20%

Fig 8: Showing the percentage of people investing in different parameters

INTERPRETATION: From the chart we can see that people like to invest mostly on
Bank Deposit then followed by fixed deposit and than in mutual funds as people are
getting more knowledge on it.

9) Different sources utilized for investment

Sources

5%

Own savings
30%
Borrowings
Inherited property
60% Others

5%

Fig 9: Showing the sources of funds

46
INTERPRETATION: From this chart we can see that people mostly invest from their
savings or from their inherited property rather than other sources.

10) Investment objectives

Objectives

25%
30%
Future security
Asset accumulation
Regular returns
Tax benefits

15%
30%

Fig 10: Percentage showing investment objectives

INTERPRETATION: From the chart we can see that people are very keen to secure their
future. Regular returns and tax benefits also play an important role in the mind of the
people for which they tend to invest for future.

11) Why choose Mutual Funds?

Reasons

5%

25%
20% Tax benefits
Fund diversification
Better Returns
Taking risks

20% Others

30%

Fig 11: Showing the reasons to why people choose mutual funds

47
INTERPRETATION: According to my study people prefer mutual funds as it gives
better returns keeping in view if it is kept for long term. People also go for tax benefits
and fund diversification and so they invest in mutual funds. Now-a-days the present
generation people tries to take risk because of the better fund diversification in context to
earlier times.

12) Securities preference

Preference

40% Long term

Short term

60%

Fig 12: Percentage showing preference of securities

INTERPRETATION: The study shows that now-a-days people like to invest more on
long term securities i.e which are more than 12months rather than investing in short term
securities i.e less than 12months. The reason behind this is that they want to take risk and
which can fetch a better return in contrast to a minimal return in a short term securities.

48
12) Better or safer investment

Mode

10%
20%

Equities
Mutual Funds
30% Post office savings

20% Fixed deposits

Others

20%

Fig 13: Percentage showing better investment avenue

INTERPRETATION: The study shows that now-a-days people tends to invest more on
mutual funds rather than investing in other portfolios as the return on investment is much
more than other avenues.

14) Factor influencing investing decisions.

Factors

20%

40% Liquidity
High return
10%
Risk involved
Others

30%

Fig 14: Showing the percentage of factors which influence decisions

49
INTERPRETATION: The study shows that people invest in mutual funds mainly
because of the liquidity. Since they can withdraw their investment except for those funds
which are close ended.

15) Percentage of investment from total income

Investment

30%

Less thanthan 5%

35% 5%-10%
10-15%
1.2 More than 15%

20%

Fig 15: Percentage showing the investment from savings

INTERPRETATION: The study shows that people now-a-days are investing more on
mutual funds than they use to do earlier.

16) Best option for their portfolio.

Option

15%

35%
Mutual Fund
Bonds

25% Fixed Deposits

Others

25%

Fig 16: Percentage showing the best option for the portfolios

50
INTERPRETATION: Since my study was based mainly on the data and informations
collected from IFA’s and distributors and a small numbers of direct customers so I found
out that people are more interested in investing in mutual funds followed by bonds and
fixed deposits.

17) AMC Preference

Preference of AMC

20% 18%

HDFC
ICICI
SBI
12%
20% Axis
Any others

30%

Fig 18: Percentage showing the preferences of AMC

INTERPRETATION: Even though HDFC and ICICI Prudential are the two largest
AMC’s in India, but my study was confined to Guwahati only. So I found out that the
investors prefer SBI AMC to other AMC. Also SBI AMC has the largest AUM of 4664cr
as of 2018 in NE India which is much more than the rest AMC’s.

51
18) Factors for choosing to invest in ICICI Prudential Mutual Fund

Factors

14% 17%
Brand Value
Better Returns
12%
Less Risk
15%
Tax Benefits
Liquidity
14%
Portfolio Diversifications

26%

Fig 18: Factors or reason for choosing ICICI Prudential AMC for investment

INTERPRETATION: From my data and study I found out that the main reason for
choosing ICICI Prudential AMC is that because of the risk factor. Since it is one of the
largest AMC in the country, even if the market crashes it has less effect than the rest of
the AMC. Then comes the brand value followed by liquidity, tax benefits, better returns
and portfolio diversification.

19) Best fund to invest in ICICI Prudential Mutual Fund

Best Fund

15%
25%
Small Cap
Mid Cap
Large Cap
25%
Equity
15%
Debt

20%

Fig 19: Percentage showing the investments in specified type of funds

52
INTERPRETATION: Since these days the young generation people i.e between the age
of 20 to 35 years are more focussed in investing in mutual funds. So they choose small or
mid cap funds, as they give high returns on a long term basis and are subject to more
risks as compared to large or equity funds which are mainly preferred by aged investors
who does not want to make much risks and just a decent return is sufficient for them.

20) Best fund to invest in ICICI Prudential by investors.

Fund Name

20%

35% Bluechip Fund

Asset Allocator Fund
Balance advantage Fund
18% NFO's
Others

10%
17%

Fig 20: Showing the percentage of investors preferring specific funds

INTERPRETATION: Blue chip Fund is the best fund offered by ICICI Prudential
Mutual Fund. The returns are not higher compared to some other funds in the AMC but
all other factors should also be kept in mind .The performance of this fund is among the
top 5 funds of all the AMC’s in India. So as such investors prefer these funds in lieu of
other funds keeping in mind the performance level, risk factor, return, liquidity etc. Other
funds includes the sector based fund , equity fund, hybrid funds etc.

53
21) Funds recommended by IFA’s in case of ICICI Prudential

Fund recommended by IFA's

18%
25% Blue chip fund
Bond Fund
Equity Saving Fund
13%
Value Discovery Fund

15% Multicap Fund

Others
17%
12%

Fig 21: Showing the different types of funds recommended by IFA’s in case of ICICI
prudential AMC

INTERPRETATION: Since people tends to take less risk so the IFA’s basically suggest
the Blue chip fund for investment as return is also good and the performance of the fund
is among the best in India.

22) Specific funds recommended by the IFA’s from different AMC’s

Specific funds recommended by IFA's

22%
26%
ICICI Prudential Blue chip fund
Axis Blue chip fund
SBI Blue chip fund
Mirae Asset large cap fund
19%
16% Others

17%

Fig 22: Showing the different types of specific funds recommended by the IFA’s from
different AMC’s

54
INTERPRETATION: The funds mentioned above are basically all the top notched funds based
on their performance level being offered by the AMC’s of India. According to my study IFA’s
recommend all fund with same level of enthusiasm to the investors as all the above mentioned
funds performs well in the markets. The other funds include SBI Magnum, L&T India Value
Fund, Axis Focused Fund etc which had also shown a great performance in the market.

CONCLUSION:

From the above all the data and findings, we can conclude that most of the investors maintain
their portfolio with both modern and traditional approach of the investment. The young people
take more risk than the other age group people. They are mostly investing their saving in the
modern approach of the investment rather than the tradition approach. Because they understand
the power of compounding in the modern approach. But we can’t deny that other age group
people don’t take interest in the investment in modern approach but there number is less than the
younger generation people (age- 18 to 35).

Most of the people go with the mutual fund , fixed deposit

and the commodity for their portfolio. this are the main priority for their portfolio. But they also
invest in bond , equity and debt. Because people knows that the mutual fund gives the high
return in 5 years and the risk is less as compare than the equity but fixed deposit gives the less
return but consistent return than the MF but the risk is less. After that we found that people
knows the back support of the losses of other securities. Its means they all are suggesting that the
investment in different securities is far better than the investment in single securities.

RECOMMENDATION:

Those investors who have better knowledge of Mutual Funds they can start investing in SIP’s
which are of low risks. Because it needs some knowledge- like regular updates of the markets in
which you want to invests , the previous trends of the companies and markets etc. Because those
people who are able to take some risk , they should take risk in the mutual funds . Through
investmenta people can earn more than any of the security. Another recommendation for those
person who have not any modern approach in their portfolio , they start investing in mutual fund
because MF is safe and gives the better return and also try to gather some knowledge about
equity.

55
Difference between practical exposure and theoretical work.

Theoretical Work:
In theoretical work I was provided with flagship and NISM book, which helped me to gain
knowledge about mutual funds which was somewhat incomplete without practical experience.
Though books we were able to understand the working of ICICI PRUDENTIAL company but to
know it more we needed practical exposure.
Practical Exposure:
 I was able to meet many IFA’s and distributors with our relationship managers.
Sometimes I was asked to go alone to the calls.
 I got a chance to interact with direct customers when I was asked to go alone to a make
shift canopy in local area of Guwahati. Their I directly tried to pitch the customers for
investing in Mutual funds
 There were also a few interactive sessions held in our office which helped me a lot gather
about how an AMC works.

56
 Chapter 7
Recommendations & Suggestions

6.1 The suggestions which you would like to give to company related to:
 Working as an intern in ICICI PRUDENTIAL Mutual Fund, infelt that ICICI can go for
Promotional activities for gaining more market share.
 ICICI should maintain its brokerage.
 Company should try to provide wider range of services
 Company should pay more attention on customer satisfaction.
 More and more emphasis must be given on the research and development.
 Proper training and up to date knowledge of every financial product should be given to
every employee of ICICI so that they can give their best performance to the clients.

57
 Chapter 8

Annexure
1. Email address

2. What is your age group?

o 18-24
o 25-31
o 32-38
o 39-45
o 45 and above

3. What is your gender?

o Male
o Female
o Others

4. What is your current employment status?

o Employed
o Self Employed
o Retired
o Student

5. What is your highest qualification?

o HSLC
o HSSLC
o Graduate
o Post Graduate
o Any other qualifications

6. Marital status?

o Married
o Unmarried

7. Your annual income?

o Below Rs 1,00,000
o Rs 1,00,000- Rs 3,00,000
o Rs 3,00,000- Rs 5,00,000
58
 o Rs 5,00,000- Rs 7,00,000
o Rs 7,00,000 and above

8. Do you invest in mutual funds?

o Yes
o No

9. What are your different investment avenues?

o Bank Deposit
o Fixed Deposit
o Post Office Savings
o Commodities (Gold, Silver etc)
o Mutual Funds
o Equities

10. What are the different sources utilized for investment?

o Own Savings
o Borrowings
o Inherited property
o Others

11. What are your investment objectives?

o Future security
o Asset accumulation
o Regular returns
o Tax Benefits

12. Why do you choose Mutual Funds?

o Tax benefits
o Fund Diversification
o Better Returns
o Taking Risks
o Others

13. Which type of securities do you prefer to invest?

o Long term (more than 12 months)

o Short term (less than 12 months)

14. Which is safer investment?

o Equities
o Mutual funds
o Post Office Savings
o Fixed Deposits

59
 o Others

15. Select one factor influencing your investment decision.

o Liquidity
o High return
o Risk involved
o Others

16. Percentage of Investment from total income.

o Less than 5%
o 5% -10%
o 10% -15%
o More than 15%

17. Best option for your portfolio-

o Mutual funds
o Bonds
o Fixed deposits
o Others

18. Which AMC you prefer to invest in mutual funds?

o HDFC
o ICICI Prudential
o SBI
o Axis
o Any others

19. If you choose ICICI Prudential, what factors do you focus on before investing?

o Brand value
o Better returns
o Less risk
o Tax benefits
o Liquidity
o Portfolio diversification

20. What is the best type of fund you found out to invest in ICICI Prudential Mutual Fund?

o Small cap
o Mid cap
o Large cap
o Equity fund
o Debt fund

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21. What is the best fund you found out to invest in ICICI Prudential Mutual Fund?

o Blue chip Fund

o Asset Allocator Fund
o Balance Advantage Fund
o NFO’s
o Others

22. As an IFA which fund you would like to advice to the investors, in case of ICICI Prudential
Mutual Funds? (Optional only for IFA’s only)

o Blue chip Fund

o Bond Fund
o Equity Savings Fund
o Value Discovery Fund
o Multicap Fund
o Others

23. As an IFA which fund you would recommend to the investors? (Optional for IFA’s only)

o ICICI Prudential Blue chip Fund

o Axis Blue chip fund
o SBI Blue chip Fund
o Mirae Asset Large cap fund
o Others

Chapter 9

Bibliography

1) https://amfiindia.com/indian-mutual

2) https://www.moneycontrol.com/markets/global-indices/

3) https://www.icicipruamc.com

4) https://www.bankbazaar.com/mutual-fund/mutual-fund-industry-in-india.html

5) https://economictimes.indiatimes.com/markets

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