A

PROJECT REPORT

ON

“EQUITY RESEARCH AND FUNDAMENTAL ANALYSIS WITH

REFERENCE TO OIL AND GAS SECTOR OF INDIA”

ASSETVILLA INSURANCE MARKETING LLP

A Summer Internship Project(SIP) done in

“FINANCE”

Submitted in partial fulfillment of the requirement for the award of degree of

Master of Management Studies (MMS) under the University of Mumbai

Submitted by

DEVAK SANJAY SHELAR

ROLL NO:2019MMS046
BATCH: 2019-2021
Under the guidance of
Prof. SAMEER SONAWANE
BharatiVidyapeeth’s
Institute of Management Studies& Research
Navi Mumbai
(i)
 ACKNOWLEDGEMENT
With regard to AssetVillaInsurance Marketing LLP., I would like to thank
each and everyone associated with this company for their help,support and
guidance whenever required.

My heartfelt gratitude is towards our industry guide Mr.

JayprakashMaurya, who devoted his valuable time for our assistance and
extended his technical support for this project.I would like to extend my gratitude
towards my mentor
Prof. SAMEER SONAWANEfor her excellent guidance throughout the project.I
take this opportunity to extend my gratitude towards our institute director
Dr.AnjaliKalse. Special thanks are reserved for BharatiVidyapeeth’s Institute of
Management Studies and Research for proving this wonderful opportunity to get
us acquainted with the corporate culture.

Devak Sanjay Shelar

(ii)
PLEASE PASTE HERE THE CERTIFICATE FROM THE COMPANY

(iii)
 CERTIFICATE
This is to certify that the Summer Internship Project (SIP) titled is“EQUITY
RESEARCH AND FUNDAMENTAL ANALYSIS OF OIL AND GAS
SECTOR OF INDIA” successfully done byMr.DevakShelar , BATCH: 2019-
2021, a student of BharatiVidyapeeth’s Institute of Management Studies and
Research, submitted in partial fulfillment of Master of Management Studies
under the University of Mumbaifrom15th May to15thJuly 2020 atAssetVilla
Insurance Marketing LLP.

Date :___________
_____________________
Prof. Sameer Sonawane Dr. Anjali Kalse
Project Guide I /c Director
BVIMSR BVIMSR

(iv)
 EXECUTIVE SUMMARY

This project report was created to compare the top performing mutual fund schemes with their
respective benchmarks. This project report is a summary of the internship and research work. A
mutual fund isa 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. A mutual fund's
portfolio is structured and maintained to match the investment objectives stated in its
prospectus.A benchmark is an unmanaged group of securities which are considered as a
'benchmark' to measure a fund's/stock's performance.
There are different types of mutual funds, based on asset class, debt mutual funds, equity mutual
funds, money market funds etc. This study focuses on equity linked saving schemes, sectoral
funds and thematic funds.
The mutual funds industry is a huge and rapidly growing field to which Indians are quickly
getting attracted. The total assets under management as on July 31,2019 was Rs.24,53,626 crore.
The major players of this industry are HDFC Asset Management Company, ICICI Prudential
Asset Management Company, Birla Sun Life Asset Management Company and Reliance mutual
Fund.
AssetVilla Insurance Marketing LLP. is an organization which deals with financial planning,
insurance planning, estate planning, wealth management and tax planning. It was established in
2016.Mr.JayprakashMaurya is the founder and the head of business development.
The research methodology is based on analytical research design. The secondary data which
supports this research was collected from books and websites. Cluster sampling technique was
used for this research.

The data interpretation is the understanding gained from the data gathered from the research. The
data processing tools used for this process are beta, Sharpe ratio, correlation and standard
deviation. Beta is a measure of risk, which is based on the Capital Asset Pricing Model.Standard
deviation is a measure of volatility of returns. Correlation is the measure of relation between the
mutual fund returns and the respective benchmarks. Sharpe ratiomeasures the risk premium of
the portfolio relative to the total amount of risk in the portfolio.Risk premium is the difference
between the portfolio’s average rate of return and the riskless rate of return.
We can conclude that the returnsobtained from Canara Robeco Equity Tax Saver hasthe least
value of standard deviation.This means that CanaraRobeco Equity Tax Saver has less deviation
in portfolio with average returns. Mirae Asset Tax Saver Fund has the highest value of beta. This
means that Mirae Asset Tax Saver Fund’s beta is aggressive as compared to other mutual funds.
For sector-based and thematic funds, Invesco India Infrastructure Fund is seen to have the least
standard deviation value. This means that Invesco India Infrastructure Fund has less deviation in
portfolio with average returns.Whereas DSP Natural Resources and New Energy
Fundhasthehighest value of beta which means it is aggressive compared to mutual fund schemes
of other companies.

(v)
TABLE OF CONTENTS
Chapter Particulars Page no.
No.
 Acknowledgement (i)
Certificates (ii),(iii)
Executive Summary (iv)
1 Introduction to the project
1.1 Concepts, Significance and Need of the study
1.2 Objectives of the study
1.3 Literature review
1.4 Introduction to the topic
1.5 Legal and regulatory aspects
2 Introduction to the industry
2.1 Overview of mutual fund industry
2.2 Major players in the industry, Competitor
Analysis,Market Share,Current Scenario
2.3 Future trends
3 Introduction to the company
3.1 Organizational profile
3.2 Description of the HR/Marketing/Finance/Operation
processes
3.3 Turnover,Market share etc., SWOT Analysis
4 Research methodology
4.1 Research design
4.2 Sources of data
4.3 Data collection Tools and techniques
4.4 Sample design
5 Data analysis and interpretation
6 Conclusions & suggestions
6.1 Findings
6.2 Suggestions
6.3 Limitations
6.4 Conclusion
7 Learning experience from the project
Annexure
8 Bibliography
Chapter1
Introduction to the
Project

1|Page
1.1Concepts of the study
EQUITY DERIVATIVES
Derivative is a contract or a product whose value is derived from value of some other
asset known as underlying. Derivatives are based on wide range of underlying assets.These inclu
de:

1.1.1 Types of mutual funds

Mutual funds can be categorized based on different attributes (like risk profile, asset class etc.).
Structural classification – open-ended funds, close-ended funds, and interval funds – is broad in
nature and the difference depends on how flexible is the purchase and sales of individual mutual
fund units.

 Open-Ended Fund
o An open-ended fund is a diversified portfolio of pooled investor money that can
issue an unlimited number of shares. The fund sponsor sells shares directly to
investors and redeems them as well. These shares are priced daily, based on their
current net asset value (NAV).Mutual funds, hedge funds, and exchange-traded
funds (ETFs) are types of open-ended funds. 
 Close-Ended Fund
o A close-ended fund is a portfolio of pooled assets that raises a fixed amount of
capital through an initial public offering (IPO) and then lists shares for trade on a
stock exchange.Like a mutual fund, a closed-end fund has a professional manager
overseeing the portfolio and actively buying and selling holding assets. Similar to
an exchange-traded fund, it trades like equity, as its price fluctuates throughout
the trading day. However, the close-ended fund is unique in that, after its IPO, the
fund's parent company issues no additional shares. Nor will the fund itself redeem
—buy back—shares. Instead, like individual stock shares, the fund can only be
bought or sold on the secondary market by investors.
 Interval Funds
o This has traits of both open-ended and closed-ended funds. Interval fundscan be
purchased or exited only at specific intervals (decided by the fund house) and are
closed the rest of the time. No transactions will be permitted for at least 2

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 years.This is suitable for those who want to save a lump sum for an immediate
goal (3-12 months).
 Equity Funds:Primarily investing in stocks, they also go by the name stock funds.
They invest the money amassed from investors from diverse backgrounds into shares of
different companies. 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.
Equity funds can be further classified into further sub categories.
 Small Cap Fund:-Investments are made in small companies which are new and less
stable in comparison to better established corporations, have greater potential to succeed
but also have a higher risk for going out of the business.
 Mid Cap Fund:-It lies between small and large cap with a market capitalization
ranging from Rs.50 billion to Rs.200 billion. Mid cap fund invests in the companies that
have some characteristics of the small cap funds but the risk involved is relatively lesser.
 Large Cap Fund:-Large Caps are a set of companies with market capitalization of
more than Rs.200 billion. These companies are usually among the largest in their sector,
well-established and tend to do very well across market cycles. Usually, these companies
are a part of Nifty 50 or Nifty Next 50 index.

 Multi –Cap Fund:-These are diversified mutual funds which can invest in stocks
across market capitalization. These funds resort to portfolio gyrations commensurate
with the market condition.These funds invest in stocks across market capitalization. That
is, their portfolio comprises of large cap, midcap and small cap stocks. They are
relatively less risky compared to a pure mid cap or a small cap fund and are suitable for
not-so-aggressive investors.
 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. They are suitable for passive investors looking for a small but regular
income (interest and capital appreciation) with minimal risks.
 Money Market Funds:Just as some investors trade stocks in the stock market, some
trade money in the money market,also known as capital market or cash market. It is
usually run by the government, banks or corporations by issuing money market securities
like bonds, T-bills, dated securities and certificate of deposits among others. The fund
manager invests your money and disburses regular dividends to you in return. If you opt
for a short-term plan (13 months max), the risk is relatively less.
 Hybrid/Balanced Funds:As the name implies, 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
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 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. It provides a
one-stop investment mix by investing in a mix of debt and equity instruments.

 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 plans
(albeit with possibly high returns) or are positive about the scheme. 

 Liquid Funds:Like Income Funds, this too belongs to the debt fund category as they
invest in debt instruments and money market with period of up to 91 days. The
maximumsum allowed to invest is Rs 1million. 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.

 Tax-saving Funds:Equity linked saving schemes (ELSS):-It invests at least 80% of

its total assets in equity and equity-related instruments. An ELSS comes with a statutory
lock-in period of 3 years and qualifies for a tax exemption under section 80C of Income
Tax Act. ELSS funds are subject to a long-term capital gain tax(LTCG) at 10%.
 Thematic fund:-It invests in stocks based on a particular theme.If the fund is built on
an infrastructure theme it might invest in equities of construction companies, cement
companies, steel companies and other companies that are related to the infrastructure
sector.
 Sectoralfund:- It is a fund that invests solely in businesses that operate in a particular
industry or sector of the economy. Sector funds are commonly structured as mutual
funds or exchange-traded funds (ETFs).
 Aggressive Growth Funds: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). Example, if the market shows a value
of beta =1, an aggressive growth fund will reflect a higher beta, say, 1.10 or above.
 Capital Protection Funds:-If protecting your principal is your priority, Capital
Protection Fundscan 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 at least 3 years (close-ended) to
safeguard your money and the returns are taxable.
 Fixed Maturity Funds:Investors choose as the FY ends to take advantage of triple
indexation, thereby bringing down tax burden. If uncomfortable with the debt market
trends and related risks, Fixed Maturity Plans (FMP) – investing in bonds, securities,
money market etc. present a great opportunity. As a close-ended plan, FMP functions on

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 a fixed maturity period, which could range from 1 month to 5 years (like FDs). The Fund
Manager makes sure to put the money in an investment with the same tenure, to reap
accrual interest at the time of FMP maturity.
 Pension Funds:Putting away a portion of your income in a chosen Pension Fund to
accrue over a long period to secure you and your family’s financial future after retiring
from regular employment – it can take care of most contingencies (like a medical
emergency or children’s wedding). Relying solely on savings to get through your golden
years is not recommended as savings (no matter how big) get used up. EPF is an
example, but there are many lucrative schemes offered by banks, insurance firms etc.
1.1.2 Stock market indices
The mutual fund schemes are compared against stock market indices such as CNX Nifty 50,
BSE India Infrastructure Index, S&P BSE 500 TRI, S&P BSE 100 TRI, Nifty 500 TRI.
1.1.2.1 Nifty 50
The NIFTY 50 index is National Stock Exchange of India's benchmark broad based stock market
index for the Indian equity market. Full form of NIFTY is National Stock Exchange Fifty. It
represents the weighted average of 50 Indian company stocks in 13 sectors and is one of the two
main stock indices used in India, the other being the BSE Sensex.Nifty is owned and managed
by India Index Services and Products (IISL), which is a wholly owned subsidiary of the NSE
Strategic Investment Corporation Limited. IISL had amarketing and licensing agreement
with Standard & Poor's for co-branding equity indices until 2013. The Nifty 50 was launched 1
April 1996, and is one of the many stock indices of Nifty.
NIFTY 50 Index has shaped up as a largest single financial product in India, with an ecosystem
comprising: exchange-traded funds(onshore and offshore), exchange-traded options at
the NSE in India, and futures and options abroad at the SGX. NIFTY 50 is the world's most
actively traded contract. WFE, IOMA and FIA surveys endorse NSE's leadership position.The
NIFTY 50 covers 12 sectors (as of 7 October 2017) of the Indian economy and offers investment
managers exposure to the Indian market in one portfolio. During 2008-12, NIFTY 50 Index
share of NSE market capitalisation fell from 65% to 29%due to the rise of sectoral indices like
NIFTY Bank, NIFTY IT, NIFTY Pharma, NIFTY SERV SECTOR, NIFTY Next 50, etc. The
NIFTY 50 Index gives 29.70% weightage to financial services, 0.73% weightage to industrial
manufacturing and nil weightage to agricultural sector.
1.1.3 CNX Nifty 500
The NIFTY 500 represents the top 500 companies based on full market capitalization and
average daily turnover from the eligible universe.It represents about 94% of the free float market
capitalization of the stocks listed on NSE as on March 31, 2016.The total traded value for the last
six months ending March 2016, of all Index constituents is approximately 87% of the traded
value of all stocks on NSE.
1.1.4 S&P BSE India Infrastructure Index

The S&P BSE India Infrastructure Index is designed to measure the performance of the top 30
Indian companies involved in infrastructure and related operations that meet investment capacity
requirements.
1.1.5 S&P BSE 100 TRI

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A broad-based index, the BSE-100 was formerly known as the BSE National index. This Index
has 1983-84 as the base year and was launched in 1989. In line with the shift of the BSE Indices
to the globally accepted Free-Float methodology, BSE-100 was shifted to Free-Float
methodology effective from April 5, 2004. The method of computation of Free-Float index and
determination of free-float factors is similar to the methodology for SENSEX.
The financial year 1983-84 has been chosen as the base year. The price stability during that year
and proximity to the index series were the main consideration for choice of 1983-84 as the base
year. The base value was fixed at 100 points.
1.1.2Significance of the study
This study was conducted to assess the performance of mutual funds with their respective
benchmarks. It delves deeper into the mechanism of mutual funds and tries to analyze the
concept of volatility and risk.
1.1.3 Need of the study
This project report concludes the third semester of the two year course of Master of Management
Studies. It was the manifestation of the work and research done at our summer internship.

1.2. Objectives of the study

 To understand the mechanism of equity mutual funds

 To compare the returns offered by schemes of different asset management companies.
 To compute the correlations between the mutual fund schemes and their respective
benchmarks.
 To compute the standard deviation,Sharpe ratio of the 1 year, 2 years, 3years, 5 years
returns.

1.3. Literature review

Opinion If you don’t have expertise, stay away from sectoral or thematicfunds

Livemint05 Aug 2019 ,VivekAgarwal

Thematic or sector-based funds are mutual funds that invest in a particular industry or sector or
around a theme. Some of these funds are investing in sectors such as technology, banking and
financial services, utilities, auto and auto ancillaries, real estate, and so on. They could also be
following a particular theme like consumption and investing in consumer goods, healthcare, and
financial services companies, among others.

According to the latest Securities and Exchange Board of India (SEBI) directives, a fund can be
deemed as thematic or sector-based if it invests at least 80% of its assets in that sector or theme.
These funds are considered high-risk investments as a majority of their investments are linked to
a particular sector. Any adverse impact on the sector due to change in the macro or micro
economy, changed business regulations or change in consumer behaviour or technology can in
hit investments. In other generic funds, since the investments are diversified, any adverse impact

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to a particular sector can be nullified by positive news on other sector allocations. This
diversification is not possible in sector-based or thematic funds.

Thats why, timing one’s entry and exit in these funds becomes quite important. The annualized
returns for five-year periods for Franklin India Technology Fund that was launched in 1998 (at
the peak of the tech boom), show a wide difference depending on the entry and exit timing. For
instance, in the five-year period between 1998 and 2003, the fund gave 26% annualized returns,
but between 2003 and 2008, another five-year period, it gave only 10%. However, timing the
market is very difficult, especially for retail investors.

But there are advantages of investing in such funds. The two biggest advantages of a sectoral
fund are that they allow investors to invest primarily in a sector that they are upbeat about or
which they feel is at the bottom of its business cycle. These investments, if timed correctly, can
lead to higher returns than diversified funds where the higher returns of investments in a specific
sector can be offset by the lower or negative returns of the other sector allocations. Many
investors use sector-based funds to invest in cyclical sectors which are at the bottom of their
business cycles. For example auto sector is considered a cyclical sector. An astute and patient
investor could invest in this sector through an auto sector fund to generate above-average returns
and book profits at the peak of the cycle.

The same fund mentioned above has given an annual return of more than 18% since its
inception. Rs. 100000 invested in this fund is now worth more than Rs.3.3million, which is a 33-
time appreciation in 21 years. At the same time, this fund from its peak in March 2000 gave
close to 10% annualized returns.

Since sector-based or thematic funds come with higher risks, investments in these must be done
only on the advice of experts or if the investors are experts themselves in understanding stocks
and stock markets. Some of the sectors are cyclical and hence understanding these cycles
becomes important as well. These business cycles can be short or long, depending on the specific
sector. As timing of these investments and redemption plays a very important role in the returns
being generated by such funds, a lot more careful analysis and planning is required before
investing. One can also adopt different strategies with these funds, some for long-term growth
(sunrise sectors/themes), some for medium-term tactical gains (cyclical/beaten down sectors) and
some for defensive strategies.However, I would not recommend more than 15% allocation of
your investments to these funds. This 15% could be divided among two-three sectors or themes.
You must remember that your other mutual fund holdings may also have some allocation to
these sectors. Making large allocations to these funds can be risky and should be avoided by
retail investors.Also, there are some sectors or themes that are coming in vogue or their business
cycles are on their way up. These cycles can fully play out and reach their peaks in the medium
term (three to five years) or can take even longer. Hence, not just knowledge of these cycles but
also patience in allowing the cycles to fully play out is important. Retail investors should seek
professional advice both at the time of entry and exit from these funds.

ELSS: Get more out of it

06 Apr 2019Revati Krishna

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Mumbai: The beginning of a financial year is a good time to plan your investment. It is also a
good time to put your money in investment basket and get tax benefit as well. One such product
is equity linked savings scheme (ELSS). ELSS is mutual fundinvestment, which also gives
you tax benefit. Here is how you can use it to work for you in terms of investment and taxation.
What is it?
An ELSSscheme invests in equity mutual fund. At least 65% of the corpus is invested in
equities. These funds are meant for long-term wealth creation by participating in equities and
should be able to deliver alpha (active returns) over the benchmark. According to Value
Research, currently around 37 asset management companies provide open-ended ELSS schemes
and six asset management companies provide close-ended ELSS schemes. the total number of
open-ended schemes in the market is 42 whereas the number of close-ended ELSS schemes in
the market is 28.As an investor, you can choose either the growth or the dividend options in
ELSS schemes. In growth schemes you will get a lump sum on redemption. In dividend option,
you will get regular dividends from the profit generated by the scheme.According to financial
planners, a growth-based ELSS scheme generally fares better than dividend-based ELSS
schemes. If you have a salary income and are not looking for regular income from your
investment, then you should opt for growth option. Also you cannot be certain that your scheme
will generate returns and the fund manager will declare a dividend.. If you invest in ELSS, you
can claim tax benefit under section 80C of the income tax Act for up to Rs.1.5 lakh.
Considering ELSS in your portfolio
There are a couple of parameters that you can keep in mind before zeroing down on a particular
ELSS scheme. Consistence in beating the benchmark, historical returns, the kind of underlying
assets they invest in, fund manager’s performance and expense ratio are some of the parameters
you should look at.

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Remember that ELSS has a three-year lock-in, hence, you can withdraw only after three years. If
the scheme continuously underperforms after the lock-in period, you can pull out from the ELSS
scheme. If you want to invest gain after pulling out for tax-saving purposes, then you can look at
a different ELSS scheme. For the same reason, when you are studying your scheme’s
performance and returns, it is essential to compare it with the performance of the peer schemes
and then analyse if it is underperforming or not.
It is difficult to compare ELSS with other taxsaving options because of the difference in the
nature of products. Let’s take the example of PPF. ELSS and PPF are inherently
differentproducts so who should invest in which product is completely contextual and depends
on your risk profile. If you are young and have more years of service ahead, you can put a major
portion of your tax saving investment in ELSS as equity investment can help in growth.

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1.4Introduction to the topic

1.4.1Significanceof mutual funds

The Association of Mutual Funds in India, a non-profit organisation serving the cause of mutual
funds has listed the following advantages to the investors in mutual funds.

 Professional management:-Experienced fund managers, supported by a research team,

select appropriate securities to the fund. Market forecasting is done effectively.

 Diversification:- Mutual funds invest in diverse securities and many industries. Hence, all
the eggs are not placed in a single basket. Through mutual funds, one can achieve
diversification of portfolio at a fraction of cost it normally it would take.

 Low cost of transaction:- Since the asset management companies handle the funds of
many people, the cost of brokerage and other costs are very low.

 Liquidity:- In an open-ended fund, the investor has the option to sell back the units of the
mutual fund to the asset management company at net asset value related price. In a close-
ended fund, he can sell the units on a stock exchange.

 Convenient administration:- Paperwork is reduced and a lot of time spent on researching

the securities is saved since the fund manager and his research team takes care of that
aspect.

 Excellent regulation:- All the asset management companies and their fund schemes are
registered with the SEBI. Their operations are continuously monitored.

 Variety of schemes:-Mutual fund companies have a variety of schemes which are tailor-
made for investors with little and through experience.

 Transparency:- A lot of transparency is maintained during the process, the returns

offered, the portfolio of derivatives in which they have invested, the qualifications of
fund managers, the exit load, the date of inception of the mutual fund scheme etc.

 Flexibility:-Most funds have systematic investment plans, systematic withdrawal plans,

systematic trigger plans etc. which offer a lot of flexibility to the investors in terms
ofinvestment amount and the duration for which it is invested.

1.4.2 Advantages of sectoral/thematic mutual funds & equity linked saving

schemes
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Sectoral funds are very attractive to some investors because they are capable of generating long
term capital appreciation. Over the past decade, the CAGR (Compound Annual Growth Rate)
return on mid and small-cap funds was 15%. In comparison, sectoral funds focusing on banking
and FMCG delivered returns up to 18%.

Under Section 80C, an investor can avail a tax benefit of up to Rs.46800 for an investment of
Rs.150000 in these tax-saving schemes.

Systematic Investment Plan (SIP) is an option where you invest a fixed amount in a mutual fund
scheme at regular intervals. For example, you can invest 1,000 in a mutual fund every month. It
is a disciplined investment plan and helps reducepropensity to market fluctuations. It is a
convenient tool that helps you preserve capital and also render significant wealth creation in the
long-run.
SIP investments can help you reach your financial goals by taking advantage of rupee cost
averaging, and growing your investments with compounded benefits.
 

1.5 Regulatory or Legal aspects of Mutual Funds

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The Government of India constituted Securities and Exchange Board of India,by an Act of
Parliament in 1992, the apex regulatory of all entities that either raise funds in the capital market
or invest in capital market securities such as shares and debenture listed in the stock exchanges.
Mutual funds have emerged as an important institutional investor in capital market securities.
Hence they come under the preview of SEBI. SEBI requires all mutual funds to be registered
with them. It issues guidelines for all mutual funds to be registered with them .It issues
guidelines for all mutual fund operations including where they can invest, what investment limits
and restrictions must be compiled with, how they should account for incomes and expenses, how
they should make disclosures of information to the investors and generally act in the interests of
investor protection. To protect the interests of the investors, SEBI formulates policies and
regulates the mutual funds. Mutual funds either promote by public or by private sector entities
including one promoted by foreign entities are governed by Regulations. SEBI approved Asset
Management Company(AMC) manages the funds by making investments in various types of
securities. Custodian registered with SEBI holds the securities of various schemes of the funds in
custody. According to SEBI Regulations, two-thirds of the directors of Trustee Company or
Board of Trustees must be independent.
With the increase in mutual fund players in India a need for mutual fund association in India was
generated to function as a non-profit organization.
Association of Mutual Funds in India(AMFI) was incorporated on 22nd August1995.
AMFI is an apex body of all Asset Management Companies(AMC) which have been registered
with SEBI. Till date, all the AMCs are that have launched mutual fund schemes are its members.
It functions under the supervision and guidelines of its Board of Directors.
Association of Mutual Funds India has raised the standard of the mutual fund industry to that of
a professional and healthy market upholding the highest ethics and morals. It has maintained the
principle of both protecting and promoting the interests of mutual funds as well as their mutual
funds as well as their unit holders.
The Association of Mutual Funds in India works with 44 registered AMCs of the country. It has
certain defined objectives which state the guidelines of its board of directors.The objectives are
as follows:
 To define and maintain high professional and ethical standards in all areas of operation of
mutual fund industry.
 To recommend and promote best business practices and code of conduct to be followed
by members and others engaged in the activities of mutual fund and asset management
including agencies connected or involved in the field of capital markets and financial
services.
 To interact with the Securities and Exchange Board of India (SEBI) and to represent to
SEBI on all matters concerning the mutual fund industry.
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  To represent to the Government, Reserve Bank of India and other bodies on all matters
relating to the Mutual Fund Industry.
 To undertake nationwide investor awareness programme so as to promote proper
understanding of the concept and working of mutual funds.
 To disseminate information on Mutual Fund Industry and to undertake studies and
research directly and/or in association with other bodies.
 To take regulate conduct of distributors including disciplinary actions (cancellation of
ARN) for violations of Code of Conduct.
 To protect the interest of investors/unit holders.
Regulator of mutual funds is SEBI.
Regulatory chairman of mutual funds in AMFI is Mr. Nimesh Shah.
Mr. KailashKulkarni is the vice-chairman of AMFI.
Today we have 44 Asset Management Companies (AMC) in existence.
Registrar and Transfer Agents(RTA) are the trusts or institutions that register and maintain
detailed records of the transactions of investors for the convenience of mutual fund
houses.Computer Age Management Services(CAMS),Karvy, Sundaram BNP Paribas Fund
Services are some registrars for mutual funds.

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 Chapter 2
Introduction to the Industry

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2.1Overview of the mutual fund industry
The mutual fund was born from a financial crisis that staggered Europe in the early 1770s.The
British East India Company had borrowed heavily during the preceding boom years to support
its ambitious colonial interests, particularly in North America where unrest would culminate in
revolution in a few short years.

As expenses increased and revenue from colonial adventures fell, the East India Company
sought a bailout in 1772 from the already-stressed British treasury. It was the “original too big to
fail corporation” and the repercussions were felt across the continent and indeed around the
world.At the same time, the Dutch were facing their own challenges, expanding and exploring
like the British and taking “copy-cat risks” in a pattern that has drawn parallels to the banking
crisis of 2008.

Against this backdrop, a Dutch merchant, Adriaan van Ketwich, had the foresight to pool money
from a number of subscribers to form an investment trust – the world’s first mutual fund – in
1774. The financial risk to the mainly small investors was spread by diversifying across a
number of European countries and the American colonies, where investments were backed by
income from plantations, an early version of today’s mortgage-backed securities.

Subscription to the closed-end fund, which Van Ketwich called “EendragtMaaktMagt” (“unity
creates strength”), was available to the public until all 2,000 units were purchased. After that,
participation in the fund was available only by buying shares from existing shareholders in the
open market. The fund’s prospectus required an annual accounting, which investors could view
if they requested. Two subsequent funds set up in the Netherlands increased the emphasis on
diversification to reduce risk, escalating their appeal to even smaller investors with minimal
capital.

Van Ketwich’s fund survived until 1824 but the vehicle he created is still a hallmark of personal
investing more than two centuries later with an estimated $27.86 trillion US in global assets in
July 2013. In Canada alone, mutual funds represent $1.43 trillion.

The early mutual funds spread were of the closed-end variety, issuing a fixed number of shares.
They spread from the Netherlands to England and France before heading to the U.S. in the
1890s.

The first modern-day mutual fund, Massachusetts Investors Trust, was created on March 21,
1924. It was the first mutual fund with an open-end capitalization, allowing for the continuous
15 | P a g e
issue and redemption of shares by the investment company. After just one year, the fund grew to
$392,000 in assets from $50,000. The fund went public in 1928 and eventually became known as
MFS Investment Management.

The mutual fund industry in India started in 1963 with the formation of Unit Trust of India
(UTI) at the initiative of the Reserve Bank of India (RBI) and the Government of India. The
objective then was to attract small investors and introduce them to market investments. Since
then, the history of mutual funds in India can be broadly divided into six distinct phases.

Phase I (1964-87): Growth of UTI

In 1963, UTI was established by an Act of Parliament. As it was the only entity offering mutual
funds in India, it had a monopoly. Operationally, UTI was set up by the Reserve Bank of India
(RBI), but was later delinked from the RBI. The first scheme, and for long one of the largest
launched by UTI, was Unit Scheme 1964.
Later in the 1970s and 80s, UTI started innovating and offering different schemes to suit the
needs of different classes of investors. Unit Linked Insurance Plan (ULIP) was launched in 1971.
The first Indian offshore fund, India Fund waslaunched in August 1986. In absolute terms, the
investible funds corpus of UTI was about Rs. 6 billion in 1984. By 1987-88, the assets under
management (AUM) of UTI had grown 10 times to Rs. 67 billion.

Phase II (1987-93): Entry of Public Sector Funds and Revolution of the

mutual funds industry

The year 1987 marked the entry of other public sector mutual funds. With the opening up of the
economy, many public sector banks and institutions were allowed to establish mutual funds. The
State Bank of India established the first non-UTI Mutual Fund, SBI Mutual Fund in November
1987. This was followed by Canbank Mutual Fund, LIC Mutual Fund, Indian Bank Mutual
Fund, Bank of India Mutual Fund, GIC Mutual Fund and PNB Mutual Fund. From 1987-88 to
1992-93, the AUM increased from Rs. 67 billion to Rs. 470.04 billion,i.e. it saw a growth of
nearly 600%. During this period, investors showed a marked interest in mutual funds, allocating
a larger part of their savings to investments in the funds.

Phase III (1993-96): Emergence of Private Funds

A new era in the mutual fund industry began in 1993 with the permission granted for the entry of
private sector funds. This gave the Indian investors a broader choice of 'fund families' and
16 | P a g e
increasing competition to the existing public sector funds. Quite significantly foreign fund
management companies were also allowed to operate mutual funds, most of them coming into
India through their joint ventures with Indian promoters.

The private funds have brought in with them latest product innovations, investment management
techniques and investor-servicing technologies. During the year 1993-94, five private sector fund
houses launched their schemes followed by six others in 1994-95.

Phase IV (1996-99): Growth and SEBI Regulation

Since 1996, the mutual fund industry scaled newer heights in terms of mobilization of funds and
number of players. Deregulation and liberalization of the Indian economy had introduced
competition and provided impetus to the growth of the industry.
A comprehensive set of regulations for all mutual funds operating in India was introduced with
SEBI (Mutual Fund) Regulations, 1996. These regulations set uniform standards for all funds.
Erstwhile UTI voluntarily adopted SEBI guidelines for its new schemes. Similarly, the budget of
the Union government in 1999 took a big step in exempting all mutual fund dividends from
income tax in the hands of the investors. During this phase, both SEBI and Association of
Mutual Funds of India (AMFI) launched Investor Awareness Program aimed at educating the
investors about investing through MFs.

Phase V (1999-2004): Emergence of a Large and Uniform Industry

The year 1999 marked the beginning of a new phase in the history of the mutual fund industry in
India, a phase of significant growth in terms of both amount mobilized from investors and assets
under management. In February 2003, the UTI Act was repealed. UTI no longer has a special
legal status as a trust established by an act of Parliament. Instead it has adopted the samestructure
as any other fund in India - a trust and an AMC.

UTI Mutual Fund is the present name of the erstwhile Unit Trust of India (UTI). While UTI
functioned under a separate law of the Indian Parliament earlier, UTI Mutual Fund is now under
the SEBI's (Mutual Funds) Regulations, 1996 like all other mutual funds in India.

The emergence of a uniform industry with the same structure, operations and regulations make it
easier for distributors and investors to deal with any fund house. Between 1999 and 2005 the size
of the industry has doubled in terms of AUM which has gone from above Rs. 680 billion to over
Rs. 1.5 trillion.

17 | P a g e
In a span of few years, mutual funds have emerged as bright prospect for securing one’s financial
wellbeing. Mutual Funds have not only contributed to the Indian growth story but have also
assisted families to partake in this success. Only 5% of the population is directly or indirectly
involved with mutual funds. As of July 31,2019 the total number of folios stood at 84.8million,
while the number of folios under Equity, Hybrid and Solution oriented schemes, wherein the
maximum investment is from retail segment stood at 76.2 million.This is 62nd consecutive
month witnessing rise in the no. of folios.The mutual fund industry was an untapped and
relatively unknown avenue for emerging investors with large disposable incomes, which is
rapidly changing.
Average Assets Under Management (AAUM) of Indian Mutual Fund Industry for the month of
July 2019 stood at Rs.25,81,026 crore. Assets Under Management (AUM) as on July 31, 2019
stood at Rs. 24,53,626crore.The AUM of the Indian MF Industry has grown from Rs. 7.22
trillion as on 31st July, 2009 to Rs.24.54 trillion as on 31st July, 2019, about 3 ½ fold increase in
a span of 10 years.The MF Industry’s AUM has grown from Rs.10.06 trillion as on 31st July,
2014 to Rs. 24.54 trillion as on 31st July, 2019, about 2 ½ fold increase in a span of 5 years.The
Industry’s AUM had crossed the milestone of Rs.10 Trillion (Rs.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 Rs.20 trillion (Rs.20 Lakh Crore) for the first time in August 2017. The
Industry AUM stood at ₹24.54 Trillion (Rs. 24.54 Lakh Crore) as on 31st July, 2019.The total
number of accounts (or folios as per mutual fund parlance) as on July 31, 2019 stood at 8.48
crore (84.8 million).
2.2 Major players in the industry
 With the AUM size of approximately Rs.3 lakh crore, ICICI Prudential Asset
Management Company Ltd. is the largest asset management company (AMC) in the
country. It is a joint venture between ICICI Bank in India and Prudential Plc, in UK. It
was started in 1993.Ms. ChandaKochhar is the Chairperson of this AMC. Apart from
mutual funds, the AMC also caters to Portfolio Management Services (PMS) and Real
Estate for investors.
 HDFC Mutual Fund is at the 2nd number by the size of AUM. With fund size of nearly ₹
3 lakh crore, it is one of the largest mutual fund companies or AMC in the country.
 HDFC Asset Management Company (AMC) was incorporated in 1999. It was approved
to act as AMC for HDFC Mutual Fund in 2000. MilindBarve is the Managing Director of
HDFC Mutual Fund.
 Formerly known as Birla Sun Life Asset Management Company, this fund house is the 3 rd

largest in terms of the AUM size.Presently it is known as Aditya Birla Sun Life (ABSL)
Asset Management Company Ltd. It is a joint venture between the Aditya Birla Group in
India and Sun Life Financial Inc of Canada. It was set up as a joint venture in 1994.With
Assets under Management of approximately ₹ 2.5 lakh crore, Reliance Mutual Fund is
one of India’s leading mutual fund companies.
 A part of Reliance Anil DhirubhaiAmbani (ADA) Group, Reliance Mutual Fund is one of
the fastest growing AMCs in India.Reliance Capital Limited (RCL) is the sponsor and
Reliance Capital Trustee Co. Limited is the trustee of Reliance Mutual Fund (RMF). It

18 | P a g e
 was registered on June 30, 1995. Reliance Mutual Fund was originally Reliance Capital
Mutual Fund and changed its name in 2004.
 SBI Funds Management Pvt Limited is a joint venture between the State Bank of India
(SBI) and financial services company Amundi, a European Asset Management company
in France. It was launched in 1987.Ms. AnuradhaRao is the Managing Director and
CEO.In 2013, SBI Fund Guru, an investor education initiative was launched.
 L&T Investment Management Limited is the Asset Management Company (AMC) for all
L&T Mutual Fund schemes. L&T Finance Holdings Limited (LTFH), a listed company,
is the sponsor for the AMC. It started its operations in 2010.
 Kotak Mahindra Mutual Fund is a part of the Kotak Group established in 1985 by Mr.
UdayKotak. Kotak Mahindra Asset Management Company (KMAMC) is the asset
manager for Kotak Mahindra Mutual Fund (KMMF). KMAMC started its operations in
1998.
 Franklin Templeton India office was set up in 1996 as Templeton Asset Management
India Pvt. Limited. This mutual fund has now set up by the name, Franklin Templeton
Asset Management (India) Pt Limited.
 DSP Mutual Fund, erstwhile DSP BlackRock Mutual Fund used to be a joint venture
between DSP Group and BlackRock, world’s largest investment management
firm.BlackRock exited the mutual fund business in May 2018.DSP Trustee Company
Private Ltd. is the trustee for the DSP Mutual Fund.
 Axis Mutual Fund had launched its first scheme in 2009. Mr. Chandresh Kumar Nigam is
the MD & CEO. Axis Bank Limited holds 74.99% in Axis Mutual Fund. The remaining
25% is held by Schroder Singapore Holdings Private Limited.

2.3 Future trends

The financial year gone by, FY19, has been a landmark one for the mutual funds industry as well
as investors. The re-categorization of schemes was implemented around the start of the year with
schemes moving into category buckets clearly defined by the Securities and Exchange Board of
India (SEBI). Around halfway through the year, problems in certain corporate groups and their
consequent debt defaults or downgrades shook the industry, particular debt funds which held
troubled papers. Interest rates rose sharply in the first two quarters of FY19, but moderated and
reversed in the last two, spurring a rally in long-duration funds, even as their credit risk peers
languished. In equity, large-cap funds put in a respectable performance even as mid- and small-
cap funds failed to deliver.
All in all, FY19 has been a complicated mixed bag for mutual fund investors. We cull out three
trends that emerged in the industry.
On the equity side, the Nifty and the Sensex led the pack, carrying exchange-traded funds (ETFs)
along. The S&P BSE Sensex gave a return of 17% in FY19, while the Nifty gave 15%. ETFs
tracking the Sensex gave 16-18%, while those following the Nifty gave 14-17%.
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Within actively-managed funds, HDFC Top 100 stole the show with a return of 17.16%,
followed by Axis Bluechip (14.53%) and Reliance Large Cap (14.29%). Despite the relatively
narrow universe SEBI chose for this category, the divergence between large-cap funds was large.
For example, HDFC Top 100 gave 17.16% and IDBI Top 100 just 4.10%.
Mid- and small-cap categories languished, clocking average losses of -1.18% and -7.72%,
respectively. However, in what re-establishes the importance of fund selection, there was huge
divergence in returns from funds within categories. Among mid-caps, Axis Midcap Fund gave
9.11%, while Baroda Midcap Fund -6.31%. In the small-cap category, Quant Small Cap Fund
gave 0.94% compared to -14.29% for Sundaram Small Cap Fund.
The FY began inauspiciously for long-duration funds which are more sensitive to interest rates
than accrual funds. Interest rates rose on the back of a rising rate cycle, higher crude oil prices
and tightening global liquidity. Oil prices began rising in mid-2017 and peaked at around $85 a
barrel (Brent crude) in October 2018. At the time, credit funds were seen as the safe haven in the
debt category. The picture reversed around September 2018, when the IL&FS crisis hit the
industry and spread to groups like Essel and DHFL.
Debt funds which had taken aggressive credit bets with these groups were hit hard by
downgrades or defaults. On the other hand, interest rates fell due to softening inflation rate,
pushing up returns on long duration funds.
However, returns varied significantly from scheme to scheme. In the credit risk category, for
instance, Franklin India Credit Risk Fund gave 8.51%, while Invesco India Credit Risk Fund
gave -3.11%.

Hybrid funds are supposed to combine the stability of debt with the growth potential of equities.
In FY19, they seemed to have combined the worst of both categories with their returns falling
below what either category has delivered.
Hybrid funds seem to have piled into mid- and small-cap stocks, much to their detriment. On the
debt side as well, they failed to capture the rally in government bonds. However, outliers remain.

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 Chapter 3
Introduction to the Company

21 | P a g e
3.1Organization’s profile

AssetVilla is a total service provider focused on clients and their end-to end needs advisory
services. The organization came into existence in the year 2016. With a thorough understanding
to fulfil financial goals of our esteemed clientele, the company has designed our offerings in
such a way that most of our client's requirement in the area of mutual fund, debt, insurance and
financial advisory services are fulfilled under a single umbrella. Our emphasis has always been
on quality and timely delivery of services. Our clients will reap the benefits of expert advice,
fact-based guidance and support from someone who genuinely cares for their growth.

As our focus has always been in all clientele level, we devise customized solutions for different
clients suiting their financial goals fulfils. Our esteemed client's financial goals fulfil are
paramount to us. The success of our clients is the biggest reward for us. We understand our
client's needs and develop solutions for them accordingly. Creativity and innovation are key
factors to everything we do. We encourage new ideas which help us address unique
opportunities. We believe in development of our self and continuously hone our skills, setting
higher targets of performance for ourselves. We are aware of the trust our clients place in us and
ensure that we do everything possible to raise our bar each time. It is because of this quality of
service we provide that we get loyalty and repeat business from our clients. We are a catalyst in
our client's growth. Providing customized solutions to our client's financial goals fulfil are
paramount to us, hence our mantra: “if our client's gratified, we gratified”.

VISION:-Our goal is to be the leader in every market we serve, to the benefit of our customers.

MISSION:-To help our customers achieve financial prosperity and peace of mind.

PRODUCTS:-Mutual funds, life insurance, health insurance, general insurance, fixed deposit,
term insurance, personal & home loans, real estate & property

SERVICES:-Financial planning, wealth management, insurance planning, tax planning, estate

planning.

Mr.JayprakashMaurya is the founder and head of business development. He graduated from

Regional Engineering College, Roorkee, Uttarakhand(erstwhile Uttar Pradesh) in the year 1998
as a Bachelor of Engineering in Electrical Engineering.

He is also associated with Tradebulls Financial Advisors LLP.He is passionate about spreading
financial literacy. He is a registered mutual fund distributor, an insurance advisor, a trader who
dabbles in the stock market.

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 CHAPTER 4
Research Methodology

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4.1Research Design
This study is based on analytical research design. It involves secondary data collected from
various books and websites. The sample size of five sector-based/thematic mutual fund schemes
and five tax saving mutual fund schemes were used for measuring their performance.
The major sources of secondary data were the uniform resource locators of
https://www.moneycontrol.com, https://www.valueresearchonline.com, and
https://www.economictimes.indiatimes.com.
4.2Data collection tools and techniques
The data collection tools employed were the tables of statistical returns of mutual fund schemes
and their benchmarks of 1year,2 years, 3 years, 5years and 10 years. The correlation and
standard deviation between the mutual fund schemes and their benchmarks, the Sharpe ratio and
beta were calculated.

4.3Sources of data
Secondary data was collected through websites and books.
4.3.1Websites
 www.investopedia.com
 www.amfiindia.in
 economictimes.indiatimes.com
 www.valueresearchonline.com
 www.bse.in
 www.nse.in
4.3.2 Books
 PunithavathyPandian, Security Analysis and Portfolio Management
 M.Y. Khan, P.K.Jain, Financial Management
 NISM Certification Examination Workbook V-A

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 Chapter 5
Data Interpretation

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5.1Sharpe Performance Index
It gives a single value to be used for the performance ranking of various funds or portfolios. It
measures the risk premium of the portfolio relative to the total amount of risk in the portfolio.
Risk premium is the difference between the portfolio’s average rate of return and the riskless rate
of return. The standard deviation of the portfolio indicates the risk. The index assigns the highest
values to the assets that have the best risk-adjusted average rate of return.Itis a very commonly
used measure of risk-adjusted returns. It is effectively the risk premium generated by assuming
per unit of risk. It can be only used for comparing the mutual fund schemes of the same category.
Sharpe ratio= (Rp-Rf)/Sigma

5.2Standard deviation
Standard deviation measures the fluctuations in periodic returns of a scheme in relation to its
average return. Mathematically, standard deviation is equal to the square root of variance. A high
standard deviation indicates greater volatility in the returns and a greater risk. Comparing the
standard deviation of a scheme with that of the benchmark and peer group funds gives the
investor a perspective of the risk in the scheme.

5.3 Systematic and non-systematic risk

Systematic risk is integral to investing in the market; it cannot be avoided. For example, risks
arising out of inflation, interest rates, political risks etc. This arises primarily from macro-
economic and political factors. This risk cannot be diversified away.
Non-systematic risk is also known as residual risk or diversifiable risk. It is unique to a
company; the non-systematic risk in an equity portfolio can be minimized by diversification
across companies.Types of unsystematic risk include a new competitor in the marketplace with
the potential to take significant market share from the company invested in, a regulatory
change (which could drive down company sales), a shift in management, and/or a product recall.
Since non-systematic risk can be diversified away, investors need to be compensated only for
systematic risk, according to CAPM. This risk is measured by its beta.
While calculating capital gains vis-à-vis the amount invested, standard deviation of return is used
as a measure of volatility. It can be represented as the Greek letter σ (sigma), as the Latin letter
“s,” or as Std (X), where X is a random variable.
A sectoral fund would invest in only the concerned sector. Therefore they select
sectoral/thematic indices such as S&P BSE Bankex, S&P BSE FMCG Index, Nifty
Infrastructure Index and Nifty Energy Index.Schemes that propose to invest in more number of
companies will prefer broader indices like S&P BSE 100/Nifty 100(based on 100 stocks),S&P
BSE 200/Nifty 200(based on 200 stocks) and S&P BSE 500/Nifty 500(based on 500 stocks).

5.4 Brief data of Equity Linked Saving Schemes

1.Principal Tax Savings Fund

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Fund manager:- P.V.K. Mohan
Launch date:- 02 January,2013
Assets under management:-Rs. 4065.2 million
Expense ratio:- 2.54%
Benchmark:-Nifty 500 TRI

2.Mirae Asset Tax Saver Fund

Fund manager:-NeeleshSurana
Launch date:- 28 December,2015
Assets under management:- Rs.22015.1 million
Expense ratio:- 2.4%
Benchmark:- Nifty 50

3.DSP Tax Saver Fund

Fund manager:-RohitSinghania
Launch date:-18 January,2007
Assets under management:-Rs.56.46 billion
Expense ratio:- 1.87%
Benchmark:- Nifty 500 TRI

4.CanaraRobeco Equity Tax Saver

27 | P a g e
Fund manager:-Cheenu Gupta, Krishna Sanghavi
Launch date:- 02 February,2009
Assets under management:- Rs.9.794 billion
Expense ratio:- 2.32%
Benchmark:- S&P BSE 100 TRI

5.ICICI Prudential Long Term Equity Fund

Fund manager:-SankaranNaren, Harish Bihani
Launch date:- 19 August 1999
Assets under management:- Rs.64.35 billion
Expense ratio:- 2.16%
Benchmark:- Nifty 500 TRI
5.5 Equity linked saving schemes and comparison tables with their
benchmarks

  1 Year 2 Years 3 Years 5 years

ICICI
Prudential 64.73% -26.54% -101.09% -5.82%
DSP 123.27% -119.64% -41.45% 80.36%
Canara
Robeco 200.36% 18.54% 7.27% 20.00%
Principal -182.91% -218.91% -25.82% 11.64%
Mirae
Asset 174.18% 1.09% 180.36% N/A

The Sharpe ratio for Mirae Asset Tax Saver Fund was the highest for 1 year. Among the two
year category, it was the highest for Canara Robeco Equity Tax Saver. For 3 years, the highest
value of Sharpe ratio was for Mirae Asset Tax Saver Fund. For 5 years, DSP Taxsaver Fund was
the highest.
28 | P a g e
 Respective benchmark

Standard
  1 Year 2 Years 3 Years 5 Years deviation
Nifty 50 8.88% 11.60% 14.38% 11.13% 0.027500545
Above we can see the stock market index Nifty 50 for comparison.

Equity linked saving schemes

Standard
  1 Year 2 Years 3 Years 5 Years deviation Correlation

ICICI Prudential 10.66% 10.87% 11.60% 10.97% 0.004 95.48%

DSP 12.27% 8.31% 13.24% 13.34% 0.024 12.44%

Canara Robeco 14.39% 12.11% 14.58% 11.68% 0.015 12.82%

Principal 3.85% 5.58% 13.67% 11.45% 0.047 81.14%

Mirae Asset 13.67% 11.63% 19.34% N/A 0.04 71.41%

Here, ICICI Prudential shows the least standard deviation as well as the highest correlation.The
standard deviation is the measure of volatility. Less the value of standard devation, more the
security is in line with the average returns. Correlation of mutual fund scheme with that of the
benchmark is very high, which means both the stock market and the mutual fund scheme move
in line with each other.

Sector-based/Thematic Funds

1. Invesco India Infrastructure Fund

Fund managers:-PranavGokhale, NeeleshDhamnaskar
Launch date:- 21 November 2007
Assets under management:-Rs. 413.8 million
Expense ratio:-2.51%
Benchmark:-S&P BSE India Infrastructure Index TRI

29 | P a g e
2.DSP Natural Resources and New Energy Fund
Fund managers:-RohitSinghania, Jay Kothari
Launch date:- 25 April 2008
Assets under management:- Rs.3897.7 million
Expense ratio:- 2.49%
Benchmark:-Nifty 50

3.Franklin Build India Fund

Fund managers:-AnandRadhakrishnan, RoshiJain,Srikesh Nair
Launch date:- 04 September,2009
Assets under management:- Rs.12.98 billion
Expense ratio:- 2.27%
Benchmark:-Nifty 50

4.Sundaram Rural and Consumption Fund

Fund managers:-S.Krishnakumar, S. Bharath
Launch date:- 15 May,2006
Assets under management:- Rs.23.47 billion
Expense ratio:- 2.12%
Benchmark:-Nifty 500 TRI

30 | P a g e
 5.Aditya Birla Sun Life India Gen Next Fund
Fund managers:-Anil Shah, ChanchalKhandelwal
Launch date:-05 August 2005
Assets under management:- Rs.10.64 billion
Expense ratio:- 2.59%
Bemchmark:- S&P BSE 500 TRI
Mutual Fund Schemes
Standard
    1 YEAR 2 YEARS 3 YEARS 5 YEARS deviation Correlation
Invesco -8.53% -1.99% 4.57% 5.73% 0.066 0.743
DSP -18.81% -9.12% 4.53% 8.90% 0.127 0.675
Franklin -10.20% -1.48% 4.65% 9.88% 0.086 0.621
Sundaram -13.77% -2.78% 4.82% 11.62% 0.109 0.615
Aditya Birla Sun Life   -6.96% 3.28% 8.15% 13.09% 0.086 0.642
Invesco India Infrastructure Fund shows the highest correlation with the Nifty 50 index. It means
that it is moving in sync with the stock market while DSP shows the least standard deviation.
This shows that the DSP Natural Resource and New Energy Fund has the most positive attributes
among the five and hence should be preferred for investments.
Sector-based/thematic mutual funds

Respective benchmark

Standard
  1 Year 2 Years 3 Years 5 Years deviation
Nifty 50 8.88% 11.60% 14.38% 11.13% 0.027500545

31 | P a g e
 CHAPTER 6
Conclusion and Suggestions

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6.1Findings
 Since the sectoral funds invest only in a specific sector, it is highly correlated to the
performance of the concerned sector.
 The entry into and the exit from this fund needs to be timed properly so that the investor
does not invest when the sector has peaked and exit when the sector performance is
below the expectations.
 Investment into a thematic mutual fund is more broad-based than a sectoral fund since it
invests into shares of the particular theme-based companies
 A thematic fund has the risk of concentration.
6.2Suggestions
The investors should know about the risks involved in these investments. The mutual fund
schemes should be marketed in such a manner that people would be drawn to such type of
investments. An investor should be able to grasp intuitively the definition of risk and returns.
The investor should be guided about whether he or she should invest in a particular mutual fund
scheme or not.
6.3 Limitations
 Historical data fails to predict future returns of mutual fund schemes.
 The statistical data taken for the study is very limited. Returns of five mutual fund
schemes of equity linked saving schemes and sectoral/thematic mutual funds is taken
against the Nifty 50 index.
6.4Conclusion
Thus we can conclude that ICICI Prudential and DSP Natural resource and New Energy Fund
are preferred for investment because of their low value of standard deviation and high correlation
with the stock market index of Nifty 50

33 | P a g e
 Chapter 7
Learning experience from the project

34 | P a g e
 7 Learning experience from the project
 The learning experience was very rewarding and thorough at AssetVilla Insurance
marketing LLP.
 The organization provides sevices like wealth management, estate planning, tax planning,
financial planning and insurance planning.
 Different aspects of finance like mutual funds, securities, foreign exchange, money
markets, capital markets, derivatives were taught and understood.
 This project helped me to understand the mechanisms of mutual funds, net asset value,
systematic and non systematic risks.
 Systematic risk is integral to investing in the market; it cannot be avoided. For example,
risks arising out of inflation, interest rates, political risks etc.
 This arises primarily from macro-economic and political factors. This risk cannot be
diversified away.
 Non-systematic risk is also known as residual risk or diversifiable risk. It is unique to a
company; the non-systematic risk in an equity portfolio can be minimized by
diversification across companies.
 Types of unsystematic risk include a new competitor in the marketplace with the
potential to take significant market share from the company invested in, a regulatory
change (which could drive down company sales), a shift in management, and/or a product
recall.


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 BIBLIOGRAPHY
 1.www.amfiindia.com
 www.investopedia.com
 3.www.moneycontrol.com
 4.www.wikipedia.com
 5. https://economictimes.indiatimes.com
 www.ific.ca
 7.www.cleartax.in
Books:
 PunithavathyPandian, Security Analysis and Portfolio Management
 M.Y. Khan, P.K.Jain, Financial Management
 NISM Certification Examination Workbook V-A

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 Questionnaire
1. Which type of mutual funds do you prefer?
Hybrid
Debt
Equities
2. What is the basic purpose of your investments?
Liquidity
Returns
Coverage of risk
Tax benefit
3. What kind of investor do you identify yourself as?
Aggressive
Conservative
Moderate
4. Which factors attracts you the most to invest in mutual funds?
Diversification
Ease and convenience
Requirement of small amount of funds
5. Are you aware of the tax deductions offered under Section 80C?
Yes
No

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