Kunal Agrawal BBA 5th Semester, September (08-11) ISB & M, Kolkata.


Sr. No. 1 2 3 4 5 6 7 8 9 10 11 12 Acknowledgement Abstract Introduction Introduction to the company (UTI) Research Methodology Fact and Findings SWOT Conclusion Recommendations Bibliography Abbreviation Glossary Title 3 4 5 22 25 27 33 34 35 36 37 38 Page



I take the privilege of conveying my heartiest gratitude to all those, who directly or indirectly enable me to complete my Project. I express my immense sense of gratitude to Mr. Vivek Sharma (Channel Relationship Manager PSU Banks, UTI MF Kolkata) and Prof. Arunava Mukherjee for their encouraging guidance, keen interest and valuable advice in the critical evaluation of my Project. I am also thankful to them for providing me with the overall systematic approach and encouraging inspiration to overcome problems and complete such a stupendous work. I am also obliged to all the other staff members for their kind co-operation.


different costs incurred in mutual fund. A detailed study has been done of the different mutual fund companies based on their past performance. advantages and disadvantages of schemes. In the given report it also mentions the mechanisms of the mutual funds which are generally used by most of the mutual fund companies.e. code of conduct of schemes. debentures and bonds and many other securities which are more risky in comparison to mutual funds scheme. Birla Sun Life and many others. 4 . preference.ABSTRACT In the given report. what are the benefits availed by the investors to invest in UTI mutual funds in comparison to other mutual funds such as HDFC. that includes different types of schemes. In the given context of UTI mutual funds taken into consideration i. it explains what are the benefits enjoyed by investors by investing their savings in different Mutual Funds schemes rather to invest in other securities such as equity. methods of calculation of net asset value and restrictions and many other things.

professionally managed portfolio at a relatively low cost. brokerage dues and bank transactions etc. The costs of hiring these professionals per investor are very low. Price changes in these assets are driven by global events occurring every day. A mutual fund is the answer to all these situations.research. Markets for equity shares. inclination and time to keep track of events. The securities could be further subdivided into technology securities. there are thousands of firms offering tens of thousands of mutual funds with different investment objectives. investments. understand their implications and act speedily. mutual funds gained popularity only after the Second World War.INTRODUCTION OVERVIEW OF INDIAN MUTUAL FUND INDUSTRY A Mutual Fund is a trust that collects the savings of a number of investors who share a common financial goal and pools it together to create a larger resource of money. investments and transaction processing. real estate. Each Mutual Fund scheme has a defined investment objective and strategy. It will be very difficult. skills. even as little as a few thousand rupees can invest in Mutual Funds. the mutual fund vehicle exploits economies of scale in all three areas . The money thus collected is invested by the fund manager in different types of securities depending upon the objective of the scheme. These could range from shares to debentures to money market instruments. A mutual fund is thus the ideal investment vehicle for today s complex and modern financial scenario. in-fact every minute in faraway places. Globally. in-fact next to impossible for an ordinary individual to have the knowledge. It appoints professionally qualified and experienced staff that manages each of these functions on a full time basis. In effect. The team undertakes this in the most professional manner. The income earned through these investments and the capital appreciation realized by the scheme are shared by its unit holders Proportionately i. mutual funds collectively manage almost as much as or more money as compared to banks. Today. debentures. In fact. on the basis of the number of units owned by them (pro rata). An individual also finds it difficult to keep track of ownership of his assets.e. derivatives and other assets have reached their maturity and are driven by latest up-to-date information. FMCG securities etc. bonds and other fixed income instruments. pharmaceutical securities. 5 . Anybody with any surplus money that can be invested. as the pool of money invested is large. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified. While the concept of individuals coming together to invest money collectively is not new. the mutual fund in its present form is a 20th century phenomenon.

Therefore. However. For mutual funds to grow. that permitted the private sector to start with mutual funds operations. Though past performance alone cannot be indicative of future performance. good mutual fund companies over are known by their AMCs and this fame is directly linked to their superior stock selection skills. One industry that has undergone the most dramatic transformation in the post liberalization era of the nineties is the financial services industry and in particular. Finally. it is.INDUSTRY PROFILE Mutual Fund industry today. Factors such as investment strategy and management style are qualitative. the mutual funds industry. but the funds record is an important indicator too. is one of the most preferred investment avenues in India. with a plethora of schemes to choose from. 6 . with about 34 players and more than five hundred Schemes. In other words. there is a need to correctly assess the past performance of different mutual funds. These were later replaced by the SEBI Mutual Fund Regulations. 1996. AMCs must be held accountable for their selection of stocks. the only quantitative way to judge how good a fund is at present. the retail investor Faces problems in selecting funds. frankly. the Securities and Exchange Board of India (SEBI) came up with comprehensive mutual regulations. Worldwide. in 1993. UTI remained the monopoly player in the mutual fund sector until 1987. there must be some performance indicator that will reveal the quality of stock selection of various AMCs. when public sector banks and insurance companies were permitted to enter the fray. There has been a paradigm change in the quality and quantity of product and service offerings.

Different types of Mutual Fund Schemes 7 .

Such funds have comparatively high risks. some close-ended funds give an option of selling back the units to the mutual fund through periodic repurchase at NAV related prices. etc. Growth schemes are good for investors having a long-term outlook seeking appreciation over a period of time. either repurchase facility or through listing on stock exchanges. These schemes provide different options to the investors like dividend option.term. or balanced scheme considering its investment objective. Such funds are less risky compared to 8 . and the investors may choose an option depending on their preferences. Government securities and money market instruments. · Income / Debt Oriented Scheme The aim of income funds is to provide regular and steady income to investors. The investors must indicate the option in the application form.Schemes according to Maturity Period: A mutual fund scheme can be classified into open-ended scheme or close-ended scheme depending on its maturity period. SEBI Regulations stipulate that at least one of the two exit routes is provided to the investor i. 5-7 years. Investors can conveniently buy and sell units at Net Asset Value (NAV) related prices which are declared on a daily basis. Such schemes may be open-ended or close-ended schemes as described earlier. These mutual funds schemes disclose NAV generally on weekly basis. The key feature of open-end schemes is liquidity. Schemes according to Investment Objective: A scheme can also be classified as growth scheme. These schemes do not have a fixed maturity period. In order to provide an exit route to the investors.g.e. · Close-ended Fund/ Scheme A close-ended fund or scheme has a stipulated maturity period e. Such schemes may be classified mainly as follows: · Growth / Equity Oriented Scheme The aim of growth funds is to provide capital appreciation over the medium to long. income scheme. Capital appreciation. Investors can invest in the scheme at the time of the initial public issue and thereafter they can buy or sell the units of the scheme on the stock exchanges where the units are listed. Such schemes normally invest a major part of their corpus in equities. The mutual funds also allow the investors to change the options at a later date. The fund is open for subscription only during a specified period at the time of launch of the scheme. corporate debentures. Such schemes generally invest in fixed income securities such as bonds. · Open-ended Fund/ Scheme An open-ended fund or scheme is one that is available for subscription and repurchase on a continuous basis.

S&P NSE 50 index (Nifty). NAVs of such schemes would rise or fall in accordance with the rise or fall in the index. · Gilt Fund These funds invest exclusively in government securities. though not exactly by the same percentage due to some factors known as "tracking error" in technical terms. NAVs of these schemes also fluctuate due to change in interest rates and other economic factors as is the case with income or debt oriented schemes. etc. preservation of capital and moderate income. Investors need to keep a watch on 9 . etc. These funds are appropriate for corporate and individual investors as a means to park their surplus funds for short periods. Infrastructure. They generally invest 40-60% in equity and debt instruments. e. These funds are also affected because of fluctuations in share prices in the stock markets. However. If the interest rates fall. The NAVs of such funds are affected because of change in interest rates in the country. These are appropriate for investors looking for moderate growth.equity schemes. · Balanced Fund The aim of balanced funds is to provide both growth and regular income as such schemes invest both in equities and fixed income securities in the proportion indicated in their offer documents. commercial paper and inter-bank call money. opportunities of capital appreciation are also limited in such funds. However. Petroleum stocks.g. Fast Moving Consumer Goods (FMCG). NAVs of such funds are likely to be less volatile compared to pure equity funds. they are more risky compared to diversified funds. Software. Pharmaceuticals. These funds are not affected because of fluctuations in equity markets. While these funds may give higher returns. · Sector specific funds These are the funds/schemes which invest in the securities of only those sectors or industries as specified in the offer documents. government securities. NAVs of such funds are likely to increase in the short run and vice versa. long term investors may not bother about these fluctuations. The returns in these funds are dependent on the performance of the respective sectors/industries. etc. · Money Market or Liquid Fund These funds are also income funds and their aim is to provide easy liquidity. These schemes invest in the securities in the same weightage comprising of an index. certificates of deposit. These schemes invest exclusively in safer short-term instruments such as treasury bills. · Index Funds Index Funds replicate the portfolio of a particular index such as the BSE Sensitive index. However. Necessary disclosures in this regard are made in the offer document of the mutual fund scheme. There are also exchange traded index funds launched by the mutual funds which are traded on the stock exchanges. Government securities have no default risk. Returns on these schemes fluctuate much less compared to other funds.

Risk hierarchy of Different Mutual Funds 10 . Their growth opportunities and risks associated are like any equity-oriented schemes. · Tax Saving Schemes These schemes offer tax rebates to the investors under specific provisions of the Income Tax Act. ULIP schemes also offer tax benefits. They may also seek advice of an expert.g. Equity Linked Savings Schemes (ELSS). These schemes are growth oriented and invest predominantly in equities. 1961 as the Government offers tax incentives for investment in specified avenues. e. Pension schemes launched by the mutual funds also offer tax benefits.the performance of those sectors/industries and must exit at an appropriate time.

UTI still remains a formidable force to reckon with. the new generations of private funds which have gained substantial mass are now seen flexing their muscles. In spite of the stiff competition and losing market share. The collection in the first half of the financial year 1999-2000 matches the whole of 1998-99. Product innovation is now passe with the game shifting to performance delivery in fund management as well as service. by their selection criteria for stocks have forced corporate governance on the industry. while others have decided to close shop by either selling off or merging with others. Funds have shifted their focus to the recession free sectors like pharmaceuticals. Many investors are realizing that investments in savings accounts are as good as locking up their deposits in a closet.604. 11 . The coming few years will show that the traditional saving avenues are losing out in the current scenario. a system of risk-reward has been created where the corporate sector is more transparent then before. The fund mobilization trend by mutual funds in the current year indicates that money is going to mutual funds in a big way. Last six years have been the most turbulent as well as exiting ones for the industry. registrars and transfer agents.40 crore in the case of public sector funds.MARKET TRENDS Alone UTI with just one scheme in 1964 now competes with as many as 400 odd products and 34 players in the market. While UTI has always been a dominant player on the bourses as well as the debt markets. Fund managers. New players have come in. In the current year mobilization till now have exceeded Rs300bn. 7819. which averaged at less than Rs100bn per annum over five-year period spanning 1993-98 doubled to Rs210bn in 1998.34 crore during the first nine months of the year as against a net inflow of Rs. Those directly associated with the fund management industry like distributors. The power shift towards mutual funds has become obvious. Funds collection. By rewarding honest and transparent management with higher valuations.99. The industry is also having a profound impact on financial markets. Total collection for the current financial year ending March 2000 is expected to reach Rs450bn. What is particularly noteworthy is that bulk of the mobilization has been by the private sector mutual funds rather than public sector mutual funds. FMCG and technology sector. and even the regulators have become more mature and responsible. Mutual funds are now also competing with commercial banks in the race for retail investor s savings and corporate float money. Funds performances are 22 improving. Indeed private MFs saw a net inflow of Rs.

· India is at the first stage of a revolution that has already peaked in the U. The Financial Express September 99) This is forcing a large number of banks to adopt the concept of narrow banking wherein the deposits are 23 kept in Gilts and some other assets. which improves liquidity and reduces risk. The basic fact lies that banks cannot be ignored and they will not close down completely. boasts of an Asset base that is much higher than its bank deposits. mutual fund assets are not even 10% of the bank deposits. In India. REGULATORY ASPECTS Schemes of a Mutual Fund: y The asset management company shall launch no scheme unless the trustees approve such scheme and a copy of the offer document has been filed with the Board.S. The offer document shall contain disclosures which are adequate in order to enable the investors to make informed investment decision including the disclosure on maximum investments proposed to be made by the scheme in the listed securities of the group companies of the sponsor The mutual fund and asset Management Company shall be liable to refund the application money to the applicants If the mutual fund fails to receive the minimum subscription amount referred to in clause (a) of sub-regulation (1) If the moneys received from the applicants for units are in excess of subscription as referred to in clause (b) of sub-regulation (1). Their role as intermediaries cannot be ignored. but this trend is beginning to change. The U. Every mutual fund shall along with the offer document of each scheme pay filing fees. unit certificates or a statement of accounts specifying the number of units allotted to the applicant as soon as possible but not later than six weeks from the date of closure of the initial subscription list and or from the date of receipt of the request from the unit holders in any open ended scheme.S. Recent figures indicate that in the first quarter of the current fiscal year mutual fund assets went up by 115% whereas bank deposits rose by only 17%. The asset management company shall issue to the applicant whose application has been accepted. (Source: Think tank. y y y y y y 12 .

trustee or asset management company. y y Procedure for Action In Case Of Default: On and from the date of the suspension of the certificate or the approval. records and documents. documents. which are incorrect or false. which are rated not below investment grade by a credit rating agency authorized to carry out such activity under the Act.Rules Regarding Advertisement: y y y The offer document and advertisement materials shall not be misleading or contain any statement or opinion. Restrictions on Investments: y A mutual fund scheme shall not invest more than 15% of its NAV in debt instruments issued by a single issuer. y A mutual fund scheme shall not invest more than 10% of its NAV in un rated debt instruments issued by a single issuer and the total investment in such instruments shall not exceed 25% of the NAV of the scheme. Every mutual fund shall have the annual statement of accounts audited by an auditor who is not in any way associated with the auditor of the asset management company. General Obligations: y Every asset management company for each scheme shall keep and maintain proper books of accounts. as the case may be. 13 . the mutual fund. Such investment limit may be extended to 20% of the NAV of the scheme with the prior approval of the Board of Trustees and the Board of asset Management Company. Investment Objectives and Valuation Policies: The price at which the units may be subscribed or sold and the price at which such units may at any time be repurchased by the mutual fund shall be made available to the investors. during the period of suspension. trustees or asset management company. y No mutual fund under all its schemes should own more than ten per cent of any company's paid up capital carrying voting rights. records and documents are maintained. or securities that may be in its custody or control. relating to its activities as mutual fund. The financial year for all the schemes shall end as of March 31 of each year. All such investments shall be made with the prior approval of the Board of Trustees and the Board of asset Management Company. trustees or asset Management Company. for each scheme so as to explain its transactions and to disclose at any point of time the financial position of each scheme and in particular give a true and fair view of the state of affairs of the fund and intimate to the Board the place where such books of accounts. and shall be subject to the directions of the Board with regard to any records. shall cease to carry on any activity as a mutual fund.

y y y y y y y y y y y y y Such transfers are done at the prevailing market price for quoted instruments on spot basis. Every mutual fund shall buy and sell securities on the basis of deliveries and shall in all cases of purchases. wherever investments are intended to be of long-term nature. Every mutual fund shall. the limit of 10 per cent shall not be applicable for investments in index fund or sector or industry specific scheme. A scheme may invest in another scheme under the same asset management company or any other mutual fund without charging any fees. take delivery of relative securities and in all cases of sale. get the securities purchased or transferred in the name of the mutual fund on account of the concerned scheme. No mutual fund scheme shall make any investment in. or Any security issued by way of private placement by an associate or group company of the sponsor. Provided that. Any unlisted security of an associate or group company of the sponsor. The securities so transferred shall be in conformity with the investment objective of the scheme to which such transfer has been made. Pending deployment of funds of a scheme in securities in terms of investment objectives of the scheme a mutual fund can invest the funds of the scheme in short term deposits of scheduled commercial banks. deliver the securities and shall in no case put itself in a position whereby it has to make short sale or carry forward transaction or engage in badla finance. The initial issue expenses in respect of any scheme may not exceed six per cent of the funds raised under that scheme. 14 . or The listed securities of group companies of the sponsor which is in excess of 30% of the net assets [of all the schemes of a mutual fund] No mutual fund scheme shall invest more than 10 per cent of its NAV in the equity shares or equity related instruments of any company. provided that aggregate inter scheme investment made by all schemes under the same management or in schemes under the management of any other asset management company shall not exceed 5% of the net asset value of the mutual fund. A mutual fund scheme shall not invest more than 5% of its NAV in the equity shares or equity related investments in case of open-ended scheme and 10% of its NAV in case of close-ended scheme.

the sponsors promote the Asset Management Company also. Typically. SEBI (Securities exchange Board of India) in our case. · It also hires another entity to be the custodian of the assets of the fund and perhaps a third one to handle registry work for the unit holders (subscribers) of the fund. the costs involved in the process and the broad rules for entry into and exit from the fund and other areas of operation. in which it holds a majority stake. it pre specifies the investment objectives of the fund.How Mutual Fund Industry Works The working of Mutual Funds can be briefly stated in the form of the points below: · A draft offer document is prepared at the time of launching the fund. 15 . these sponsors need approval from a regulator. In the Indian context. as in most countries. the risk associated. · A sponsor then hires an asset management company to invest the funds according to the investment objective. SEBI looks at track records of the sponsor and its financial strength in granting approval to the fund for commencing operations. In India. In many cases a sponsor can hold a 100% stake in the Asset Management Company (AMC).

In other words. It is calculated simply by dividing the net asset value of the fund by the number of units. if any + Dividends/interest accrued Amount due on unpaid assets Expenses accrued but not paid Asset Management Company (AMC): An Asset Management Company or AMC is the investment manager of the respective trust. in line with the objectives of respective schemes. by selling off all the assets in the fund. ignoring the "per unit". a mutual fund is assessed on the basis of its net asset value . as explained below. Asset value is equal to Sum of market value of shares/debentures + Liquid assets/cash held. this is the amount that the shareholders would collectively own. most people refer loosely to the NAV per unit as NAV.Financial Aspects of Mutual Fund Net Asset Value: Before venturing into the market related functional aspects of Mutual funds. Just as a business is evaluated by the level of its profits. it is important to understand the evaluation criteria of these funds. represented by the ownership of one unit in the fund. The net asset value of the fund is the cumulative market value of the assets fund net of its liabilities. Load: The charge collected by a Mutual Fund from an investor for selling the units or investing in it. The detailed methodology for the calculation of the asset value is given below. which is entitled to invest in different securities on behalf of unit holders. This gives rise to the concept of net asset value per unit. However. which is the value. We also abide by the same convention. the NAV is simply the net value of assets divided by the number of units outstanding. Calculation of NAV The most important part of the calculation is the valuation of the assets owned by the fund. if the fund is dissolved or liquidated. Once it is calculated. 16 .

But smaller companies can often offer more growth potential. Rupee Cost Averaging does not guarantee a profit or protect against a loss. The best idea is probably to have a mix of funds that gives an exposure to large-cap. small or tiny. midsize and small companies. in order to determine how much the market is currently willing to pay for a share of the company's earnings. quarterly or semiannual or annual basis to redeem a fixed number of units Price/Earnings Ratio: Abbreviated as P/E Ratio or P/E. Rupee Cost Averaging can smooth out the market's ups and downs and reduce the risk of investing in volatile markets. By size we mean a company's value on the stock market: the number of shares it has outstanding multiplied by the share price. BY MARKET CAPITALISATION Market capitalization: Stock Funds are often grouped by the size of the companies they invest in big. The beauty of the plan is that as the market falls the number of units purchased by the investor increases as the purchases are linked to the NAV. usually from the last four quarters (known as the Trailing P/E Ratio). Systematic Withdrawal Plan: The unit holder may set up a Systematic Withdrawal Plan on a monthly. y Big companies tend to be less risky than small companies. Exit load: An Exit load or Back-end load or Repurchase load is a charge that is collected at the time of redeeming or for transfer between schemes (switch). In and of itself. the P/E Ratio tells very little. Sometimes referred to as the "multiple. This concept is called Rupee Cost Averaging." Calculated by dividing the stock's current price by the company's current annual earnings per share.Entry load: When a charge is collected at the time of entering into the scheme it is called an Entry load or Front-end load or Sales load. or to the market in general. but can be usefully compared to the P/E Ratios of other companies in the same industry. The entry load percentage is added to the NAV at the time of allotment. or to the company's own historical P/E Ratios. Systematic Investment Plan: Systematic Investment Plan is normally offered by many open-ended mutual funds in order to encourage regular investments. but sometimes from the estimates of the earnings expected in the next four quarters (the Projected P/E ratio). The exit load percentage is deducted from the NAV at the time of redemption or transfer between schemes. This is known as market capitalization. or from the sum of the last two actual quarters and the estimates of the next two quarters. This plan allows an investor to purchase additional units of the Scheme by investing fixed amount of rupees every month/quarter. 17 .

This is usually mentioned in the fact sheets for the investor's benefit. E. HSBC Equity Fund for instance. Companies below this threshold were categorized as mid/small caps. Different fund houses define `Sizable' differently. which have a sizable market capitalization. this level varies from fund house to fund house. HDFC Top 200 Fund. So we are contending with a relatively unknown entity here.500 crores). Franklin India Bluechip Fund. Sundaram Mutual Fund defines mid caps as stocks with a market capitalization of less than Rs 18 bn. Sundaram Select Mid Cap fund are some examples of mid cap funds.: Franklin India Prima Fund.g. y Investments in mid caps are a riskier proposition as compared to investments in large cap funds. E. y Investing in large caps is a lower risk-lower return proposition (vis-à-vis mid cap stocks). emerging companies with small capitalizations.g. For instance.Sundaram Mutual Fund defined small caps as stocks with a market capitalization of less than Rs 2 bn. a mid cap stock could well graduate to a large cap over the years giving the investor a significant return on his investment. Magnum Global Fund. y However. invest predominantly in large caps. However. that means we can expect smaller returns but stable returns. 18 . BSE (BSE Mid Cap 200) and S&P CNX (S&P CNX Mid Cap 200) have designed their own indices for mid cap stocks. Usually. the risk-return trade-off is much higher vis-a-vis large caps and mid caps. in its IPO (Franklin Flexi Cap). In fact. c) Small Cap Funds: Small cap funds invest in companies with a smaller market capitalization. b) Mid Cap Funds: These funds invest in companies that have a lower market capitalization than the large caps. Templeton defined large caps as companies with a market capitalization in excess of Rs 15 bn (Rs 1. Kotak Mid-Cap. information on small caps is not easily available so these companies are underresearched or maybe not researched at all. a) Large Cap Funds: Large cap funds invest their assets primarily in companies. y Small cap companies in most cases are just evolving. investing in small cap funds is fraught with considerable risk. Again. (Sundaram SMILE) .y A fund's market capitalization will indicate whether the fund emphasizes the stocks of blue-chip companies with large market capitalizations. because such companies are usually widely researched and information is widely available. as with mid caps. As with large caps.: Kotak 30. or something in between. y Large-cap funds are less volatile than funds that invest in smaller companies. For instance.

More conservative "value" managers will look for companies that have been beaten down temporarily by the stock market. Tata Equity Opportunities and Principal Resurgent India Fund. these funds are positioned between large caps and mid caps. which sector is driving growth at a given time or which market segment (market capitalization) is witnessing the latest rally. taking high risks in hopes of high rewards. 19 . Aggressive small-cap managers will buy hot growth and technology companies.y The volatility of the fund often depends on the aggressiveness of the manager. d) Multi/Flexi-Cap Funds: Just about every second mutual fund IPO these days is a multi/flexi cap fund. This helps in keeping the portfolio relatively diversified and mitigate risks. Currently this is a niche segment as there is no fund investing purely in small cap stocks. y But generally. y The fund manager has the mandate to shift across market capitalizations depending on the growth opportunity. Some multi cap funds include . y This is generally dictated by the market happenings i. Sundaram SMILE is probably the first small cap fund of its kind.DSP ML Opportunities. there's a ceiling on how far the fund manager can go in particular market segment or sector.e. In terms of risk-return trade-off.

Japan.MAJOR PLAYERS IN THE INDIAN MF INDUSTRY ABNAMRO Mutual Fund ABN AMRO Mutual Fund was setup on April 15. one of the largest life insurance companies in the US of A. was incorporated on April 6. Ltd. ING Investment Management (India) Pvt. 1999 with the same named Trustee Company. as the sponsor. The Trustee Company formed is Prudential ICICI Trust Ltd. 1993. and ICICI Ltd. Birla Sun Life Mutual Fund follows a conservative long-term approach to investment. Deutsche Bank A G is the custodian of ABN AMRO Mutual Fund. as the Trustee Company. 2002 with HSBC Securities and Capital Markets (India) Private Limited as the sponsor. ING Vysya Mutual Fund ING Vysya Mutual Fund was setup on February 11. The AMC. HDFC Mutual Fund HDFC Mutual Fund was setup on June 30. Indonesia and Bermuda apart from India. Birla Sun Life Mutual Fund Birla Sun Life Mutual Fund is the joint venture of Aditya Birla Group and Sun Life Financial. And the AMC is Prudential ICICI Asset Management Company Limited incorporated on 22nd of June. Ltd. The paid-up capital of the AMC stands at Rs 25. 1996 with Sahara India Financial Corporation Ltd. Recently it crossed AUM of Rs. 2004 with ABN AMRO Trustee (India) Pvt. Board of Trustees. Sun Life Financial is a golbal organisation evolved in 1871 and is being represented in Canada. 1995 works as the AMC of Sahara Mutual Fund. Prudential ICICI Mutual Fund was setup on 13th of October. the Philippines.000 crores. 1998. HSBC Mutual Fund acts as the Trustee Company of HSBC Mutual Fund. Prudential Plc. 10. 20 . of America.8 crore. Sahara Mutual Fund Sahara Mutual Fund was set up on July 18. 2003. ABN AMRO Asset Management (India) Ltd. 2000 with two sponsorers namely Housing Development Finance Corporation Limited and Standard Life Investments Limited. was incorporated on November 4. 1993 with two sponsers. Sahara Asset Management Company Private Limited incorporated on August 31. It is a joint venture of Vysya and ING. HSBC Mutual Fund HSBC Mutual Fund was setup on May 27. Prudential ICICI Mutual Fund The mutual fund of ICICI is a joint venture with Prudential Plc. The AMC. the US.

Income Funds. Asset Management Funds. Reliance Mutual Fund Reliance Mutual Fund (RMF) was established as trust under Indian Trusts Act. Limited. The schemes of UTI Mutual Fund are Liquid Funds. approximately.State Bank of India Mutual Fund State Bank of India Mutual Fund is the first Bank sponsored Mutual Fund to launch offshor fund. is the AMC which was incorporated with SEBI on December 20. UTI Mutual Fund UTI Asset Management Company Private Limited.20000 Crore. UTI Asset Management Company presently manages a corpus of over Rs. Limited is the Trustee. 5.. 225 cr. Escorts Mutual Fund Escorts Mutual Fund was setup on April 15. Equity Funds and Balance Funds. 1996 with Excorts Finance Limited as its sponsor. 1995 as Reliance Capital Mutual Fund which was changed on March 11. They have already launched 35 Schemes out of which 15 have already yielded handsome returns to investors. Now it has an investor base of over 8 Lakhs spread over 18 schemes. 2000 sponsored by Standard Chartered Bank.1999. Standard Chartered Asset Management Company Pvt. the India Magnum Fund with a corpus of Rs. The investment manager is Tata Asset Management Limited and its Tata Trustee Company Pvt. 1882. Ltd. and Life Insurance Corporation of India (LIC). Tata Mutual Fund Tata Mutual Fund (TMF) is a Trust under the Indian Trust Act. The sponsorers of UTI Mutual Fund are Bank of Baroda (BOB). State Bank of India (SBI). State Bank of India Mutual Fund has more than Rs. 2004. Today it is the largest Bank sponsored Mutual Fund in India. The Trustee is Standard Chartered Trustee Company Pvt. 2005) of AUM. 1882. 1995 with the name Escorts Asset Management Limited.500 Crores as AUM. Ltd. established in Jan 14. The Trustee Company is Escorts Investment Trust Limited. Index Funds.703 crores (as on April 30. 7. Its AMC was incorporated on December 1. It was registered on June 30. Punjab National Bank (PNB). 21 . Standard Chartered Mutual Fund Standard Chartered Mutual Fund was set up on March 13. and Tata Investment Corporation Ltd. The sponsor of RMF is Reliance Capital Limited and Reliance Capital Trustee Co. The sponsorers for Tata Mutual Fund are Tata Sons Ltd. 2003. Tata Asset Management Limited's is one of the fastest in the country with more than Rs. manages the UTI Mutual Fund with the support of UTI Trustee Company Privete Limited. Reliance Mutual Fund was formed for launching of various schemes under which units are issued to the Public with a view to contribute to the capital market and to provide investors the opportunities to make investments in diversified securities.

UTI International Ltd.. and acts as manager to offshore funds and markets these offshore funds abroad. Channel Islands. The AMC apart from managing the schemes of UTI Mutual Fund will also manage the schemes transferred/migrated from the erstwhile Unit Trust of India. 2 Crores towards the corpus of the Fund. for undertaking portfolio management services. 22 . in accordance with the provisions of the Investment Management Agreement. the SEBI (Mutual Funds) Regulations and the objectives of the schemes. a 100 % subsidiary of UTI AMC. the Trust Deed. LIC Mutual Fund was constituted as a Trust in accordance with the provisions of the Indian Trust Act.LIC Mutual Fund Life Insurance Corporation of India set up LIC Mutual Fund on 19th June 1989. UTI AMC has been registered as a portfolio manager under the SEBI (Portfolio Managers) Regulations. The Trustees of LIC Mutual Fund have appointed Jeevan Bima Sahayog Asset Management Company Ltd as the Investment Managers for LIC Mutual Fund. 1993 on February 3 2004. UTI International Ltd. ( UTI AMC ) of India and Shinsei Bank Limited ( Shinsei Bank ) of Japan have signed a joint venture agreement to set up UTI International (Singapore) Pte Limited ( The Company ). 1882. viz. Systems are in place to ensure that bank and securities accounts are segregated and there is no conflict of interest between the various activities undertaken by UTI AMC. (Guernsey based) a 100% subsidiary of UTI Asset Management Company Ltd. State Bank of India. It contributed Rs. The Company started its business on 29th April 1994. UTI AMC has entered into a service agreement with the Administrator of the Specified Undertaking of The Unit Trust of India to provide back office support for business processes but specifically excluding the making of decisions for the sale and purchase for assets of the Specified Undertaking. . Bank of Baroda and Punjab National Bank. LIC of India. registered in Guernsey. The paid up capital of the UTIAMC has been subscribed equally by the four sponsors. INTRODUCTION TO THE COMPANY (UTI) UTI ASSET MANAGEMENT COMPANY INTRODUCTION UTI Asset Management Company Limited has been appointed as the Asset Management Company of the UTI Mutual Fund by the Trustee in terms of Investment Management Agreement dated December 9. 2002 executed between UTI Trustee Company Limited and UTI Asset Management Company Limited.

It has a nationwide network consisting 144 UTI Financial Centres (UFCs).To make UTI Mutual Fund: The most trusted brand. All these have evolved UTI transparent SEBI compliant entity. 3 satellite offices have also been opened in select towns and districts. Vision To be the most Preferred Mutual Fund Mission . who has been highly empowered to manage funds with greater efficiency and accountability in the sole interest of unit holders.109 Chief agents and UTI International offices in London. The fund managers are also ably supported with a strong in-house securities research department. With a view to reach to common investors at district level. Besides structuring investment products for customers in the region. the Company will also manage funds investing in other jurisdictions. Reliability UTIMF has consistently reset and upgraded transparency standards. We have a well-qualified. All the branches. Dubai and Bahrain.UTI International is set up with the vision to engage in Investment Management and Distribution of financial products in the South East Asian region. professional fund management team. a risk management department is also in operation. UFCs and registrar offices are connected on a robust IT network to ensure cost-effective quick and efficient service. admired by the stakeholders The largest and most efficient money manager with global presence The best in class customer service provider The most preferred employer The most innovative and best wealth creator A socially responsible organization known for best corporate governance 23 . UTI Mutual Fund has a track record of managing a variety of schemes catering to the needs of every class of citizenry.340 Chief representative offices.617 Crores as on 30th May' 2010 . Assets under Management UTI Asset Management Company presently manages a corpus of over Rs. To ensure better management of funds. The company will also launch and manage structured investment products to cater to the Japan South-East Asia corridor. 78.

UTI Mutual Fund follows an investment approach of giving as equal an importance to asset allocation and sectoral allocation. as is given to security selection while managing any fund. It believes in having a balanced and well diversified portfolio for all the funds and a rigorous in-house research based approach to all its investments. UTI Mutual Fund aims to consistently remain in the top quartile vis-a-vis the funds in the peer group. It combines top-down and bottom-up approaches to enable the portfolios/funds to adapt to different market conditions so as to prevent missing an investment opportunity. In terms of its funds performance. It is committed to adopt and maintain good fund management practices and a process based investment management.Investment Philosophy UTI Mutual Fund s investment philosophy is to deliver consistent and stable returns in the medium to long term with a fairly lower volatility of fund returns compared to the broad market. Equity Funds Category: y y y y y y y y y y y y y y y y y y y y y y y UTI Master share Fund UTI Master Plus Fund UTI EQUITY FUND UTI CONTRA FUND UTI WEALTH BUILDER FUND UTI INFRASTRUCTURE FUND UTI DIVIDEND YIELD FUND UTI SERVICE INDUSTRIES FUND UTI MASTER VALUE UNIT PLAN UTI MID CAP FUND UTI LEADERSHIP FUND UTI MNC FUND UTI OPPORTUNITIES FUND UTI SOFTWARE FUND UTI ENERGY FUND UTI PHARMA & HEALTHCARE FUND UTI EQUITY TAX SAVINGS PLAN UTI LONG TERM ADVANTAGE FUND UTI MASTER INDEX FUND UTI NIFTY INDEX FUND UTI SUNDER UTI-BALANCED FUND UTI-CHILDREN CAREER BOND PLAN (BALANCED) 24 .

when.2 DURATION OF THE PROJECT The study was carried out for a period of Six Weeks. The second is to provide the reader similar detailed knowledge 3. Decision regarding what.RESEARCH METHODOLOGY Research Methodology is a way to systematically solve the research problem. 25 . how much. In fact.A course is an effort made to study activities in UTI MUTUAL FUNDS with special emphasis on products of the company and THE ANALYSIS OF MUTUAL FUNDS IN INDIA. it constitutes the blueprint for the collection. It may be understood as a science of studying how research is done scientifically. 17thJune to 30thJuly 3. where. time and money. It is emerging as one of the most lucrative investment options.1 TITLE OF THE STUDY The project undertaken by me as a part of my M.3 OBJECTIVE OF THE STUDY · The Mutual Fund Industry is fast gaining popularity in today s unpredictable financial scenario. · This document has been designed to serve a two-fold purpose. by what means concerning an inquiry or a research study constitute a research design. measurement and analysis of data.4 RESEARCH DESIGN Research design is an arrangement of conditions for collection and analysis of data in a manner that aims to combine relevance to the purpose with economy in procedure. Once the research project is identified and defined clearly the next stage is to design the research.alpha. The primary objective of the project is to gain detailed insight into this Industry. The first. which is also the main objective of the project. When we talk of research methodology we not only talk of research methods but also consider the logic behind the methods we use in the context of the research study and why we are not using other methods so that research results are capable of being evaluated either by the researcher himself or by others 3. the research design is the conceptual structure within which research is conducted. · The second objective of the research was to do the comparative analysis of different types of mutual fund with uti mutual funds with the help of various tools like beta. 3.B. and sharpe ratio. is to reflect our understanding of this industry. The research design provides a complete guideline for analysis the data. Research design is needed because the smooth sailing of the various research operations thereby making research as efficient as possible yielding maximal information with minimal expenditure of efforts.

Those among the popular are:y Descriptive research y Experimental research y Exploratory research This research is exploratory in nature . The latter has been used to understand the theoretical aspects. 3. Tabulation and Analysis of Data The data collected the tabulated analyzed and pertinent findings were extracted.6 SCOPE OF THE STUDY · I have tried to systematically and objectively look into all-important aspects. Which could give us clearer picture of the subject.TYPES OF RESEARCH There are several types of researches. Books and Printed Material provided by UTI Mf. though limited. simple statistical techniques such as percentages.I shall be collected data from various secondary sources. 3. to major the performance of all mutual funds companies in the industry and to what extent each factor is responsible for the same. I have also collected certain data by consulting various employees of UTI Mutual Fund.. has helped us give first hand information on company and investor sentiments. which can be manipulated or exaggerated by the company (Window dressing). but very few are popular. mainly from Internet. this constraint led to inability to cover the whole data. The time was not enough to know in detail about the factors. Most of the data about the companies are collected from the concerned Companies Website or directly through the Concerned Companies. this is discussed under the heading tabulation and analysis of data. SAMPLE SIZE AND METHOD OF SELECTING SAMPLE Sources of Data For the purpose of my study I have collected secondary data. were used to arrive at the final results instead of more complicated techniques. I have used secondary data source approach to arrive at the objectives of the study. and Journals. The raw data was converted into tables which were used to draw important inferences with the help of simple observations.7 LIMITATIONS OF THE STUDY: The major constraint faced by me in making the project was time. were not willing to provide adequate information about the Mutual funds schemes. Also in some cases the companies contacted. 26 . · Strategic importance has been given to both current and past trends and we have tried to correlate both in a manner to gain maximum insight. A combination of primary and secondary data has been used. The former.

it means that the returns in the stock are highly correlated to the benchmark index. provides useful statistical information. A fund with a beta greater than 1 is considered more volatile than the market.98 Reliance Vision 0. =n XY-( X) ( Y)/n X2-( X)2 where n=number of items Y=Dependent variable scores (funds return) X=Independent variable scores (bse 100 index returns) COMPARATIVE ANALYSIS (returns compared with bse100 index returns) UTI equity fund 0. If the beta of the stock is 1. and a fund with a beta less than 1 means less volatile.89 Beta 27 .FACTS AND FINDINGS COMPARATIVE ANALYSIS OF MUTUAL FUNDS BETA A Beta is a measure of risk that. when applied to investment portfolios.91 ICICI pru gowth 0. It compares a mutual fund's volatility with that of a benchmark.91 HDFC top 200 0.

27 28 . The measure `Alpha' indicates the value added by a fund manager. =( Y/n).ANALYSIS AND INTERPRETATION y Most mainstream equity funds have Betas in the range of . Especially conservative stock funds may register Betas as low as . If the reinvesting is badly managed.75. the mid-cap and large cap betas also different.73 PRU ICICI GROWTH 0. Large cap betas are more towards market beta which implies that these funds have been more stable unlike mid cap betas which are more volatile.5%. Then. While analyzing performance. which has a very high beta. the returns may not be superior. y y ALPHA Alpha is a financial term describing that part of an investor's return that is due to the skills of the investment manager. despite a lower beta. their values might be expected to fall -7.05 (fairly close to the 1.( X/n) where ( Y/n)= Mean value of the dependent variable score(funds return) ( X/n)= Mean value of the independent variable score(bse 100 returns) COMPARATIVE ANALYSIS: A fund manager who reduces risks by booking profits has also to be careful in reinvesting.00 Beta represented by the market in the aggregate). Alpha can provide a deeper perspective on the performance of equity schemes to a mutual fund investor. which implies that the fund is very volatile. as distinct from the return of the market as a whole. We can see that the betas of nearly all the funds are similar apart from the beta of PruICICI Growth. UTI EQUITY FUND VISION 1. or in other words the added value the manager achieved over and above the result of the market.65 RELIANCE 2.28 HDFC TOP 200 1.5%. meaning that in a -10% market decline.25 might see their values fall by -12. the performance may be flat. Aggressive funds with Betas of 1.85 to 1. and how much due to the manager's ability to select stocks. An important point to be considered is that with different objectives. Value Added by Fund Manager (or alpha) indicates the return that is not attributable to the market. we would like to know how much of the return was attributable to the market as a whole.

meanwhile the beta of this fund is the maximum. this is the value added (or subtracted) by the fund manager's investment decisions.e 2. y In the large cap funds. This can be attributed to the high churning of funds done by the fund manager. y The lowest alpha is of Pru-ICICI Growth being 0.ANALYSIS AND INTERPRETATION y Alpha can be seen as a measure of a fund manager's performance.Top-down approach. in the mid cap funds also the alpha of reliance growth is the maximum which can be attributed to the above reasons.27. the mid cap funds were performing quite well as compared to large cap funds.g. One reason could also be that in this time period when the study was done. y In this context. e. y Another trend is that overall the alpha of mid-cap funds is higher as compared to large cap funds. E.65.Bottom-up approach. y Again. This is what the fund has earned over and above (or under) what it was expected to earn.g.Herein the investments are done in fundamentally sound companies. Franklin India Bluechip. and thereafter-strong companies are chosen in these sectors. Thus. SECTOR ALLOCATION The division of an investment portfolio among major sectors usually to diversify the risk. HSBC Equity .Herein firstly the sectors are chosen. 29 . two approaches can be followed: . it can be see that the alpha of the Reliance Vision is highest i.

and is a measure of the dispersion of the scheme's return around its average return. The higher is the value. Depending on the objective of the mutual fund. HDFC Equity Fund is a very concentrated fund.35 RELIANCE 7.27 PRU ICICI GROWTH 7. the Net Asset Value (NAV).y y PORTFOLIO CONCENTRATION: This refers to the concentration of the allocation in top few sectors. UTI EQUITY FUND Standard Deviation 6. it tells about the volatility of the scheme. It is calculated by using returns of the scheme i. Meanwhile Reliance Growth is a very diversified fund Funds exposure to different kinds of sectors is another parameter on which the different mutual funds can be compared. Standard Deviation is a measure of scattering of the values about the average (mean) value. the more volatile are the returns and vice versa.44 30 . However reliance has a very different stock allocation investing in automobile and heavy engineering sectors. Lately most funds have increased their exposure to banking sector stocks. It tells us how much the values have deviated from the mean of the values. Most funds have adequate exposure to technology stocks. the fund could be concentrated or diversified. COMPARATIVE ANALYSIS When used in relation to mutual funds. STANDARD DEVIATION The total risk of a given fund is measured in terms of standard deviation of returns of the fund.91 HDFC TOP 200 7.e.

reliance vision falls in the category of high risk and high return. y Meanwhile the standard deviation of the uti equity fund is the lowest.ANALYSIS AND INTERPRETATION Mid Cap Funds y The standard deviation is more in mid cap funds. worked by Nobel Laureate Bill Sharpe. tries to quantify how a fund performs relative to the risk it takes. Symbolically it is written as: 31 . It is a ratio of returns generated by the fund over and above risk free rate of return and the total risk associated with it (standard deviation). SHARPE RATIO Sharpe ratio. y In the large cap funds the highest standard deviation is of reliance vision. This shows that mid cap funds are more volatile as compared to large cap funds. this fund is considered as one of the most stable returns giving fund.

g. 32 .54 HDFC TOP 200 0.51 RELIANCE 0. SI= Sharpe Index Ri = Return on the fund Rf = risk free rate of return (e. sharpe ratip is lowest which means it gives lowest returns compare to other funds. y For hdfc top 200.Where.58 ANALYSIS AND INTERPRETATION y Sharpe ratio for reliance vision is highest compare to uti equity fund. a 90 day T-Bill) s = Standard Deviation UTI EQUITY FUND Sharpe Ratio 0.54 PRU ICICI GROWTH 0. hdfc top 200 and pru icici growth which shows that reliance vision mutual funds will give better returns than other tree mutual fund schemes.

A large majority of mutual fund companies don t come close to beating market averages like the S&P 500. risk of fraud is very less. 2. Threats to the Mutual Funds: 1. Very high transparency. Lack of flexibility.SWOT SWOT ANALYSIS OF MUTUAL FUNDS Strengths of Mutual Funds are: 1.if the time horizon of the investor is more than 15 years. You can easily make monthly contributions. In other words you get instant diversification . 3.5% of Indian savings is invested in mutual funds. 4. The fund industry has introduced the best products and services. For every kind of profile (ie conservative. It allows small investors to invest in market cheaply and efficiently. 3. 33 . Mutual funds are currently not allowed to invest in real estate. Theoretically because of his/her experience and knowledge you should receive above average returns. 6. MF making investments in property should be allowed. Also the brokers say (banks) get higher brokerage if an investor invests in ULIP rather than MF S. 2. 2. and delivered superlative performances. ULIP becomes a threat to fund industry. Therefore there is a large potential for the fund industry to mobilize the savings of people into investments in MF s. One of the biggest ills plaguing the fund industry today is called late trading. 2. 4. Only . A professional manager is the one managing the money. You get to own several companies no matter how much you decide to invest. Expense ratio is charged separately ie you pay management fee no matter if the fund makes you money or not. moderately aggressive. Weaknesses of Mutual Funds are: 1. aggressive) there are investment options available. Government is making necessary efforts. ULIP (Unit Linked Investment Plan). The deal is to offer preferential treatment to large investors by offering them backdated net asset values (NAVs). Load is charged irrespective of the performance of the fund. 5. 7. Opportunities for Mutual Funds: 1.

00 per unit (Rs.00 per unit. purchase of house etc. They all expect the market to go up by Diwali (Indian festival) and New Years and also expect consumer awareness and interest to improve. · The outlook for the Mutual Fund Industry as predicted by the representatives of the companies that I visited is very bright. This is the right strategy and Mutual Fund companies are trying to create this awareness among consumers. Withdrawals are correspondingly done in boom times as maximum return is achieved. On the contrary. This is because this gets them the benefit of writing off their capital gains as follows1. they prefer to go for equity based funds as it is seen that in the long period. · Business Investors invest a lot in the end of June when Mutual Funds are close to declaring dividends.CONCLUSION · Retail Investors prefer to invest in debt-based funds when they invest for short periods and are looking for steady returns. 16. This money is either from their capital gains or for some specific purpose in the future like their child s education. · In India. 5. 4. The business buys the Mutual Fund units at this price and dividends are declared say Rs. 2. 4.00 at time of purchase. All this would result in major increase in their collections and of the industry as a whole. 16. equity funds out-perform debt funds. Also a large number of new companies and schemes are soon going to be launched which will increase the variety for consumers and also improve the quality of services offered due to the increase in competition. 20. the NAV per unit is Rs. when they invest for long periods. which can be used by them to write off their capital profits. marriage. Efforts are being made by them to increase awareness and services offered by them.00 dividend declared).00 Rs. Say the NAV per unit of the Mutual Fund is Rs. Then after the cool off period when the Mutual Fund opens. the trend is that investors invest when there is a boom in the stock market and withdraw their holdings in times of slump. 4. This is absolutely contrary to how the system works abroad as there investments take place in the slump period when greater units can be purchased with same amount of money.00 per unit and claims capital looses to the tune of Rs. 34 .00 per unit. 4. This actually is not a capital loss as that amount has already been reimbursed to the unit holder in terms of dividends. The business then sells off the units at Rs. 3. 20.

reliability and authenticity in their functioning. 2) There is need for better marketing of Mutual Funds and specifically target investors who invest in stock markets and small investors who prefer banks for their investments and create awareness amongst them about investing in Mutual Funds. a large number of new companies and schemes are soon going to be launched which will increase the variety for investor and will lead to increase in competition. 35 . liquidity. 6) The capital market has been growing by leaps and bounds. as it is seen from the analysis that most of the investors are not confident of the safety and security of their investments in Mutual Funds especially after the UTI Scam in India. Thus the stock market in India is on the right track and there will be major improvements in the near future This expansion will act as an impediment to the small investors who either has the option to play the market or to have the knowledge to keep pace with the corporate information of thousands of companies. It is also recommended that Asset Management Companies (MF Companies) focus on building a relationship of trust and commitment with the investors. Their mutual funds will form a favorable alternative provided there is transparency. 3) It is recommended that the Asset Management Companies (AMC) more specifically UTI should come up with new Mutual Fund schemes which focus on security of money. They should concentrate more on building up investor s confidence. 4) It is strongly recommended that Asset Management Companies (MF Companies) specifically UTI provide reliable and more true and transparent information to the investors as the investor is ready to invest in Mutual Funds only if they are given more reliable information.RECOMMENDATIONS 1) The future investment in mutual funds depends heavily on the availability of funds. 5) In the near future. better rate of return. In the industry and This stresses the need to improve the quality of services offered and improve individual fund performance. profitability.

Bibliography · · UTI Intranet site · Fact Sheet of UTI MF 36 .in · · · · ·

Securities and Exchange Board of India .Mutual Funds UTIMFs AMC NAV SEBI OEMFs CEMFs ETFs .Income Oriented Schemes .SEBI(mutual fund) regulations.ABBREVIATION MFs .Open ended mutual funds .Growth oriented Schemes SEBI(MF)R.Asset management company .1996 TDR .Exchange Traded Funds MMMFs .Close ended mutual funds .1996 .Unit Trust of India Mutual Funds .Trust deed regulations 37 .Net Asset Value .Money Market Mutual Funds IOS GOS .

In other words. if the fund is dissolved or liquidated. Tax saving schemes . 5-7 years. preservation of capital and moderate income.An open-ended fund or scheme is one that is available for subscription and repurchase on a continuous basis. e. in line with the objectives of respective schemes.An Asset Management Company or AMC is the investment manager of the respective trust. Close ended Mutual fund . 38 .GLOSSARY Mutual Fund . NAV . which is entitled to invest in different securities on behalf of unit holders.g. The fund is open for subscription only during a specified period at the time of launch of the scheme.These funds are also income funds and their aim is to provide easy liquidity.A close-ended fund or scheme has a stipulated maturity period e. Money market mutual fund .The net asset value of the fund is the cumulative market value of the assets fund net of its liabilities.These schemes offer tax rebates to the investors under specific provisions of the Income Tax Act. Equity Linked Savings Schemes (ELSS). Open ended mutual funds .A Mutual Fund is a trust that collects the savings of a number of investors who share a common financial goal and pools it together to create a larger resource of money. AMC . by selling off all the assets in the fund. 1961 as the Government offers tax incentives for investment in specified avenues. this is the amount that the shareholders would collectively own.g.