A STUDY ON PERFORMANCE OF

BALANCED MUTUAL FUNDS

SUBMITTED IN PARTIAL FULFILLMENT OF AWARD OF

DEGREE OF MASTER OF BUSINESS ADMINISTRATION

SCHOOL OF MANAGEMENT STUDIES, JNTUH

UNDER THE GUIDANCE OF
Dr. D. RAGHUNATHA REDDY

SUBMITTED BY
NAAYAKOTI LAKSHMI
17031E0020
 Mutual Funds
Mutual fund is a mechanism for pooling the resources by issuing units
to the investors and investing funds in securities in accordance with
objectives as disclosed in offer document
Investments in securities are spread across a wide cross-section of
industries and sectors and thus the risk is reduced. Diversification reduces
the risk because all stocks may not move in the same direction in the same
proportion at the same time. Mutual fund issues units to the investors in
accordance with quantum of money invested by them. Investors of mutual
funds are known as unit holders.

A mutual fund is set up in the form of a trust, which has sponsor, trustees,
Asset Management Company (AMC) and custodian. The trust is
established by a sponsor or more than one sponsor who is like promoter
of a company. The trustees of the mutual fund hold its property for the
benefit of the unit holders. Asset Management Company (AMC)
approved by SEBI manages the funds by making investments in various
types of securities. Custodian, who is registered with SEBI, holds the
securities of various schemes of the fund in its custody. The trustees are
vested with the general power of superintendence and direction over
AMC. They monitor the performance and compliance of SEBI
Regulations by the mutual fund.
You can make money from a mutual fund in three ways:
1) Income is earned from dividends on stocks and interest on
bonds.
2) If the fund sells securities that have increased in price, the fund
has a capital gain.
3) If fund holdings increase in price but are not sold by the fund
manager, the fund's shares increase in price. You can then sell
your mutual fund shares for a profit.

TYPES OF MUTUAL FUNDS:

 Need for the study:
1. Mutual funds are dynamic financial intuitions which play crucial role
in an economy by mobilizing savings and investing them in the capital
market.

2. The activities of Mutual funds have both short-term and long-term

impact on the savings in the capital market and the national economy.

3. To banking at the same time they also compete with banks and other
financial intuitions.

4. India is one of the few countries to day maintain a study growth rate
is domestic savings.

Scope of the study:

The study is limited to the analysis made on Balanced mutual fund
schemes offered by asset management companies in India. Each
scheme is calculated in term of their risk and return using different
performance measurement theories. Column charts are used to reflect
the portfolio risk and return. Based on the results of the analysis, the
best performing mutual fund scheme is to be decided and
recommended.
 Objectives of the study:
 To explain briefly about the mutual fund industry.
 To study the risk factors involved in mutual funds.
 To study the performance indices that can be used for mutual fund
comparison
 To study and compare the risk and return associated with 5
Balanced mutual fund schemes of different Asset management
companies.
 To describe briefly about the investment strategies in mutual
funds.

Limitations of the study:

 Mostly the data is related to the secondary data.
 To collect the primary data from the company is difficult task and
it is a confidential matter to the company.
 The product is restricted to only mutual funds.
 The data is only limited to financial performance of the mutual
funds.
 The comparison for the financial performance of the company is
taken only for 5 years.
 Data collection:

SECONDARY DATA

Secondary data is taken as a basis of analysis in this research.

Secondary data includes sources such as websites, documents and
brochures, etc.
The reference period for the data is taken from July 2014 to July 2019.

SAMPLE COLLECTION:
The schemes selected in this study are randomly taken from top 10
Balanced mutual funds whose Assets under management are above
5000 crores in rupees and based on their performance in past five years
from mutualfundindia.com.
Selection criteria 1 : Return % over past 5 years
Selection criteria 2 : AUM > 5000 crores in rupees

Tools used for analysis:

The most important and widely used measures of performance are:
 The Treynor Measure
 The Sharpe Measure
The statistical tools to be used for the analysis are:
Percentages
Average
 BALANCED MUTUAL FUNDS:

A balanced fund is a mutual fund that contains a stock component, a

bond component and sometimes a money market component in a single
portfolio. Generally, these funds stick to a relatively fixed mix of stocks
and bonds; their holdings are balanced between equity and debt, their
objective between growth and income. Hence, their name "balanced."
Balanced funds are geared toward investors who are looking for a
mixture of safety, income, and modest capital appreciation.

Advantages and Disadvantages of Balanced Funds

Because balanced funds rarely have to change their mix of stocks and
bonds, they tend to have lower total expense ratios. Moreover, because
they automatically spread an investor's money across a variety of types
of stocks, they minimize the risk of selecting the wrong stocks or
sectors. Finally, balanced funds allow investors to withdraw money
periodically without upsetting the asset allocation.
Pros
 diversified, constantly rebalanced portfolio
 low expense ratios
 little volatility
 low-risk
Cons
 pre-set asset allocations
 unsuited to tax-shielding strategies
 "the usual suspects" investments
 safe but stodgy returns
 BALANCED FUNDS TO BE STUDIED IN
THIS RESEARCH:
1. ICICI PRUDENTIAL EQUITY & DEBT FUND
Investment Objective: To generate long term capital appreciation and current
income from a portfolio that is invested in equity and equity related securities as
well as in fixed income securities.

Fund Type Entry Load Average Asset Size (Rs

cr.)

Open Ended Nil 25914.10

Investment Plan Exit Load Minimum Investment

(Rs.)

Growth If redeemed bet. 0 Year to 1 Year; Exit Load is 5000

1%

Launch Date Fund Manager Last Dividend

03-11-1999 S Naren,Manish Banthia,Atul Patel 0.00

Benchmark Email / Website Bonus

CRISIL Hybrid 35+65 - Aggressive enquiry@icicipruamc.com /

Index www.icicipruamc.com

AMC Name

ICICI Prudential Asset Management Company Ltd.

2. SBI EQUITY HYBRID FUND :

Investment Objective: To provide investors long-term capital

appreciation along with the liquidity of an open - ended scheme by
investing in a mix of debt and equity. The scheme will invest in a
diversified portfolio of equities of high growth companies and balance
the risk through investing the rest in fixed income securities

Fund Type Entry Load Average Asset Size

(Rs cr.)

Open Ended Nil 28413.29

Investment Plan Exit Load Minimum

Investment (Rs.)

Growth If redeemed bet. 0 Month to 12 Month; 1000

Exit Load is 1%

Launch Date Fund Manager Last Dividend

09-10-1995 Rama Iyer Srinivasan,Dinesh Ahuja 20.00

Benchmark Email / Website Bonus

CRISIL Hybrid 35+65 - partnerforlife@sbimf.com / 0

Aggressive Index www.sbimf.com

AMC Name

SBI Funds Management Private Ltd.

3. L&T HYBRID EQUITY FUND:

Fund Type Entry Load Average Asset Size

(Rs cr.)

Open Ended Nil 9671.88

Investment Plan Exit Load Minimum

Investment (Rs.)

Growth If redeemed bet. 0 Year to 1 Year; Exit 5000

Load is 1%

Launch Date Fund Manager Last Dividend

07-02-2011 Soumendra Nath Lahiri,Shriram 0.00

Ramanathan,Karan Desai

Benchmark Email / Website Bonus

S&P BSE 200 TRI, CRISIL Short Term ltmf@lntmf.com / www.lntmf.com

Bond Fund Index

AMC Name

L&T Investment Management Ltd

Investment Objective: To seek to generate long-term capital appreciation from

a diversified portfolio of predominantly equity and equity related securities and
to generate reasonable returns through a portfolio of debt and money market
instruments to help generating funds in the long term to save for the cost of
children’s education.
4. DSP Equity & Bond Fund
Investment Objective: The primary investment objective of the Scheme, seeking to generate
long term capital appreciation and current income from a portfolio constituted of equity and
equity related securities as well as fixed income securities (debt and money market securities).

Fund Type Entry Load Average Asset

Size (Rs cr.)

Open Ended Nil 6285.44

Investment Exit Load Minimum

Plan Investment
(Rs.)

Growth If redeemed bet. 0 Month to 500

12 Month; Exit Load is 1%
Launch Date Fund Manager Last Dividend

27-05-1999 Vikram Chopra,Atul Bhole 0.00

Benchmark Email / Website Bonus

CRISIL service@dspblackrock.com /
Hybrid 35+65 www.dspblackrock.com
- Aggressive
Index*
AMC Name
DSP Investment Managers Pvt. Ltd.
5.Aditya Birla Sun Life Equity Hybrid 95 Fund

Investment Objective: The objective of the scheme is to generate long

term growth of capital and current income, through a portfolio
investing in equity, debt and money market securities. The secondary
objective is income generation and distribution of dividend.

Fund Type Entry Load Average Asset

Size (Rs cr.)

Open Ended Nil 13033.11

Investment Plan Exit Load Minimum

Investment
(Rs.)

Growth If redeemed bet. 0 Day to 365 Day; Exit 100

Load is 1%

Launch Date Fund Manager Last Dividend

10-02-1995 Mahesh Patil,Pranay Sinha,Dhaval 0.00

Shah

Benchmark Email / Website Bonus

CRISIL Hybrid 35+65 - connect@birlasunlife.com /

Aggressive Index* www.birlasunlife.com

AMC Name

Aditya Birla Sun Life Asset Management Company Ltd.