Dissertation Report ON A Comparative Study of Asset Management Companies

DISSERTATION REPORT
ON
A COMPARATIVE STUDY OF ASSET
MANAGEMENT COMPANIES
SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT

OF THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION
OF
UTTARAKHAND TECHNICAL UNIVERSITY, DEHRADUN
SUBMITTED BY: SUBMITTED TO:

SHWETA BHANDARI Mr. VISHAL SAGAR
MB07026 ASST. PROFESSOR
INSTITUTE OF MANAGEMENT STUDIES-DEHRADUN

SESSION 2007-2009
Institute Of Management Studies, Dehradun 1

CERTIFICATE
I have the pleasure in certifying that Miss. SHWETA BHANDARI is a

bonafide student of IV Semester of the Master’s Degree in Business
Administration of Institute of Management Studies, Dehradun under University
Roll No. 07140500091
She has completed her project work entitled A COMPARATIVE STUDY OF

ASSET MANAGEMENT COMPANIES under my guidance.
I certify that this is her original effort & has not been copied from any other
source. This project has also not been submitted in any other University for the
purpose of award of any Degree.
This project fulfils the requirement of the curriculum prescribed by Uttarakhand

Technical University, Dehradun, for the said course. I recommend this project
work for evaluation & consideration for the award of Degree to the student.
Signature :
Name of the Guide : Asst. Prof. Vishal Sagar
Date :

ACKNOWLEDGEMENT
The pleasure that follows the successful completion of an assignment would remain
incomplete without a word of gratitude for the people without whose cooperation the
achievement would have remained a distant dream. So I would like to extend my
immense indebt ness to all of them who have guided and motivated me throughout my
research project. I sincerely thank to all of them for their valuable contribution without
which this project report would have not reached its goals.
I would like to extend my thanks to “Asst. Prof. Vishal Sagar” (H.O.D. and my
project guide) and to all my faculty members in management department for giving me
valuable suggestions and advice in preparing my project report.
Shweta Bhandari,
I.M.S., Dehradun.

PREFACE
This dissertation report has been prepared towards the partial fulfillment of the degree
of MBA (Master of Business Administration) from UTTRAKHAND TECHNICAL
UNIVERSITY, Dehradun. I have done my study on “A Comparative Study Of Asset
Management Companies ”.
Under this topic, an effort has been made to study the comparison between different
Asset Management Companies available in India , so that a rational investor can take
appropriate steps while investing his money in various financial instruments
Mutual Funds are fast becoming a preferred investment option for the investors. Mutual
Funds offer several features that make them a powerful and convenient wealth creation
vehicle worthy of consideration. An investor can invest his money in different ways in
mutual funds such as diversified portfolio, liquidity, tax savings etc.
The Indian Mutual Fund industry has started opening many of the exciting
opportunities to the investors. Investors are now looking towards equity linked
investment options.
Thus a Mutual Fund is the most suitable investment for the common man as it
offers an opportunity to invest in a diversified, professionally managed basket of
securities at a relatively low cost.

TABLE OF CONTENTS
PAGE NO.
1. CERTIFICATE 1
2. ACKNOWLEDGEMENT 2
3. PREFACE 3
4. OBJECTIVE OF THE STUDY 5
5. INTRODUCTION OF MUTUAL FUND 7
6. RESEARCH METHODOLOGY 49
7. DATA ANALYSIS AND INTERPRETATION 55
8. OBSERVATIONS 76
9. LIMITATIONS OF THE STUDY 78
10. SUGGESTIONS AND CONCLUSIONS 80
11. BIBLIOGRAPHY 84

OBJECTIVES OF THE STUDY

OBJECTIVES OF THE STUDY
The main objectives of the project undertaken were:

• To know about the concept of mutual funds, their functioning, advantages and
disadvantages, and organization of mutual funds.
• To compare different Asset Management Companies of India as an investment
alternative
• To create awareness about Mutual Funds and to know the preference pattern of
the investors.
• To compare the schemes based on Sharpe’s ratio, Treynor’s ratio, β Co-
efficient, Returns and show which scheme is best for the investor based on his
risk profile.

INTRODUCTION OF
MUTUAL FUND

MUTUAL FUNDS – CONCEPT
A Mutual Fund is a trust that pools the savings of a number of investors who share a
common financial goal. The money thus collected is then invested in capital market
instruments such as shares, debentures and other securities. The income earned through
these investments and the capital appreciation realized are shared by its unit holders in
proportion to the number of units owned by them. Thus a Mutual Fund is the most
suitable investment for the common man as it offers an opportunity to invest in a
diversified, professionally managed basket of securities at a relatively low cost. The flow
chart below describes broadly the working of a mutual fund:
Mutual Fund Operation Flow Chart

Mutual funds are conceived as institutions for providing small investors with avenues of
investments in the capital market. Since small investors generally do not have adequate
time, knowledge, experience and resources for directly accessing the capital market, they
have to rely on an intermediary, which undertakes informed investment decisions and
provides consequential benefits of professional expertise. The reason increasing
popularity of mutual funds is their ability to bring down the transaction costs. The
advantages for the investors are reduction in risk, expert professional management,
diversified portfolios, liquidity of investment and tax benefits. By pooling their assets
through mutual funds, investors achieve economies of scale. The interests of the investors
are protected by the SEBI, which acts as a watchdog. Mutual funds are governed by the
SEBI (Mutual Funds) Regulations, 1993.

WHY MUTUAL FUNDS?
Mutual Funds are becoming a very popular form of investment characterized by many
advantages that they share with other forms of investments and what they possess
uniquely themselves. The primary objectives of an investment proposal would fit into one
or combination of the two broad categories, i.e., Income and Capital gains. How mutual
fund is expected to be over and above an individual in achieving the two said objectives,
is what attracts investors to opt for mutual funds. Mutual fund route offers several
important advantages:-
i. Diversification: A proven principle of sound investment is that of diversification

which is the idea of not putting all your eggs in one basket. By investing in many
companies the mutual funds can protect themselves from unexpected drop in values of
some shares. The small investors can’t achieve wide diversification on his own because
of many reasons, mainly funds at his disposal. Mutual funds on the other hand, pool
funds of lakhs of investors and thus can participate in a large basket of shares of many
different companies. Majority of people consider diversification as the major strength of
mutual funds.

ii. Expertise Supervision: Making investments is not a full time assignment of
investors. So they hardly have a professional attitude towards their investment. When
investors buy mutual fund scheme, an essential benefit one acquires is expert
management of the money he puts in the fund. The professional fund managers who
supervise fund’s portfolio take desirable decisions viz., what scrips are to be bought, what
investments are to be sold and more appropriate decision as to timings of such buy and
sell. They have extensive research facilities at their disposal, can spend full time to
investigate and can give the fund a constant supervision. The performance of mutual fund
schemes, of course, depends on the quality of fund managers employed.
iii. Liquidity of Investment: A distinct advantage of a mutual fund over other

investments is that there is always a market for its unit/ shares. Moreover, Securities and
Exchange Board of India (SEBI) requires the mutual funds in India have to ensure
liquidity. Mutual funds units can either be sold in the share market as SEBI has made it
obligatory for closed-ended schemes to list themselves on stock exchanges. For open-
ended schemes investors can always approach the fund for repurchase at net asset value
(NAV) of the scheme. Such repurchase price and NAV is advertised in newspaper for the
convenience of investors.
iv. Reduced risks: Risk in investment is as to recovery of the principal amount and as
to return on it. Mutual fund investments on both fronts provide a comfortable situation
for investors. The expert supervision, diversification and liquidity of units ensured in
mutual funds reduces the risks. Investors are no longer expected to come to grief by
falling prey to misleading and motivating ‘headline’ leads and tips, if they invest in
mutual funds.
v. Safety of Investment: Besides depending on the expert supervision of fund

managers, the legislation in a country (like SEBI in India) also provides for the safety of
investments. Mutual funds have to broadly follow the laid down provisions for their

regulations, SEBI acts as a watchdog and attempts whole heatedly to safeguard investors
interests.
vi. Tax Shelter: Depending on the scheme of mutual funds, tax shelter is also
available. As per the Union Budget-2003, income earned through dividends from mutual
funds is 100% tax-free at the hands of the investors.
vii. Minimize Operating Costs: Mutual funds having large invisible funds at their
disposal avail economies of scale. The brokerage fee or trading commission may be
reduced substantially. The reduced operating costs obviously increases the income
available for investors.
Investing in securities through mutual funds has many advantages like – option to
reinvest dividends, strong possibility of capital appreciation, regular returns, etc.
Mutual funds are also relevant in national interest. The test of their economic efficiency
as financial intermediary lies in the extent to which they are able to mobilize additional
savings and channeling to more productive sectors of the economy.

HISTORY OF MUTUAL FUNDS IN INDIA
The origin of mutual fund industry in India is with the introduction of the concept of
mutual fund by UTI in the year 1963.The objective then was to attract the small
investors and introduce them to market investment. Though the growth was slow, but
it accelerated from the year 1987 when non-UTI players entered the industry
In the past decade, Indian mutual fund industry had seen dramatic improvements,
both quality wise as well as quantity wise. Before, the monopoly of the market had
seen an ending phase,: the Assets under Management (AUM) were Rs. 67bn. The
private sector entry to the fund family raised the AUM to Rs. 470 bn in March 1993
and till April 2004; it reached the height of 1,540 bn. Putting the AUM of the Indian
Mutual Funds Industry into comparison, the total of it is less than the deposits of SBI
alone, constitute less than 11% of the total deposits held by the Indian banking
industry.
The main reason of its poor growth is that the mutual fund industry in India is new in
the country. Large sections of Indian investors are yet to be intellectuated with the
concept. Hence, it is the prime responsibility of all mutual fund companies, to market
the product correctly abreast of selling.
The mutual fund industry can be broadly put into four phases according to the
development of the sector. Each phase is briefly described as under:
First Phase - 1964-87(Unit Trust of India)
Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was
setup by the Reserve Bank of India and functioned under the Regulatory and
administrative control of the Reserve Bank of India. In 1978 UTI was de-linked from
the RBI and the Industrial Development Bank of India (IDBI) took over the
regulatory and administrative control in place of RBI. The first scheme launched by
UTI was Unit Scheme 1964. Over the years, US-64 attracted, and probably still has,

the largest number of investors in any single investment scheme. Later in 1970 and
80’s, UTI started innovating and offering different schemes to suit the needs of
different classes of investors. Until 1980’s, UTI’s operations in these stock market
often determined the direction of market movements. At the end of 1988 UTI had
Rs.6, 700 crores of assets under management.
Second Phase -1987-1993 (Entryof Public Sector Funds)
1987 marked the entry of non-UTI, Public Sector mutual funds, bringing in
competition. With the opening up of the economy, many public sector banks and
financial institutions were allowed to establish mutual funds. SBI Mutual Fund was
the first followed by Can bank Mutual Fund (Dec 87), Punjab National Bank Mutual
Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of
Baroda Mutual Fund (Oct 92). LIC in 1989 and GIC in 1990. These mutual funds
helped enlarge the investor community and the investible fund. The end of 1993
marked Rs. 47,004 as assets under management.
Third Phase - 1993-2003 (Entry of Private Sector Funds)
With the entry of private sector funds in 1993; a new era started in the Indian mutual
fund industry; giving the Indian investors a wider choice of fund families. Also; 1993
was the year in which the first Mutual Fund Regulations came into being; under
which all mutual funds, except UTI were to be registered and governed. The
erstwhile· Kothari Pioneer (now merged with Franklin Templeton) was the first
private sector mutual fund registered in July 1993.

The 1993 SEBI (Mutual Fund) Regulations were substituted by a more
comprehensive and revised Mutual Fund Regulations in 1996. The industry now
functions under the SEBI (Mutual Fund) Regulations 1996.
The number of mutual fund houses went on increasing; with many foreign mutual
funds setting up funds in India and also the industry has witnessed several mergers
and acquisitions. As at the end of January 2003, there were 33 mutual funds with
total assets of Rs. 1, 21,805 crores. The Unit Trust of India with Rs.44, 541 crores of
assets under management was way ahead of other mutual funds.
Fourth Phase - since February 2003
This phase had bitter experience for UTI. It was bifurcated into two separate
entities. One is the Specified Undertaking of the Unit Trust of India with AUM of
Rs.29, 835 crores (as on January 2003). The Specified Undertaking of Unit Trust of
India, Functioning under an administrator and under the rules framed by
Government of India and does not come under the purview of the Mutual Fund
Regulations.
The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB; BOB and LIC. It is
registered with SEBI and functions under the Mutual Fund Regulations. With the
bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76,000
crores of AUM and with the setting up of a UTI Mutual Fund, conforming to the
SEBI Mutual Fund Regulations, and with recent mergers taking place among
different private sector funds, the mutual fund industry has entered its current phase
of consolidation and growth. As .at the end of September, 2004, there were 29 funds,
which manage assets of Rs.153108 crores under 421 schemes

GROWTH IN ASSETS UNDER MANAGEMENT

TYPES OF MUTUAL FUND SCHEMES IN INDIA
Wide variety of Mutual Fund Schemes exists to cater to the needs such as financial
position, risk tolerance and return expectations etc. The table below gives an
overview into the existing types of schemes in the Industry.
• By Structure
ο Open - Ended Schemes
ο Close - Ended Schemes
ο Interval Schemes
• By Investment Objective
ο Growth Schemes
ο Income Schemes
ο Balanced Schemes
ο Money Market Schemes
• Other Schemes
ο Tax Saving Schemes
ο Special Schemes
ο Index Schemes
ο Sector Specific Schemes

Types of Mutual Funds
By Structure:
A mutual fund scheme can be classified into open-ended or closed-ended scheme

depending on its maturity period.
1.Open-ended Fund/Scheme:
The units offered by these schemes are available for sale and repurchase on any
business day at NAV based prices. Hence, the unit capital of the schemes keeps
changing each day. Such schemes thus offer very high liquidity to investors and are
becoming increasingly popular in India.
2.Close-ended Fund/Scheme :
The unit capital of a close-ended product is fixed as it makes a one-time sale of fixed
number of units. These schemes are launched with an initial public offer (IPO) with
stated maturity period after which the units are fully redeemed at NAV linked prices.
In the interim, investors can buy or sell units on the stock exchanges where they are
listed. Unlike open-ended schemes, the unit capital in closed-ended schemes usually
remains unchanged. After an initial closed period, the scheme may offer direct
repurchase facility to the investors. Closed-ended schemes are usually more illiquid

as compared to open- ended schemes and hence trade at a discount to the NAV. This
discount tends towards the NAV closer to the maturity date of the scheme.
Schemes according to Investment objective:
A scheme can also be classified as growth scheme, income scheme, or balanced

scheme considering its investment objective. Such schemes may be open-ended or
close-ended schemes as described earlier. Such schemes may be classified as follows:
1.Growth Oriented Schemes :
The aim of growth funds is to provide capital appreciation over the medium to long-
term .such schemes normally invest a major part of their corpus in equities. Such
funds have comparatively high risks. These schemes provide different options to the
investors like dividend option, capital appreciation, etc. and the investors may choose
an option depending on their preferences.
The investors must indicate the option in the application form. The mutual funds also
allow the investors to change the option at a later date. Growth schemes are good for
investors having a long term outlook seeking appreciation over a period of time.
2. Income/Debt oriented Scheme :
The aim of income funds is to provide regular and steady income to investors. Such
schemes generally invest in fixed income securities such as bonds, corporate debentures,
government securities and money market instruments. Such funds are less risky

compared to equity schemes. These funds are not affected because of fluctuations in
equity markets. However, opportunities of capital appreciation are also limited in such
funds. The NAVs of such funds are affected because of change in interest rates in the
country. If the interest rates fall, NAVs of such funds are likely to increase in the short
run and vice-versa. However, long –term investors may not bother about these
fluctuations.
3. 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. These are appropriate for investors looking for moderate growth. They
generally invest 40-60% in equity and debt instruments. These funds are also affected
because of fluctuations in share prices in the stock markets. However, NAVs of such
funds are likely to be less volatile compared to pure equity funds.
4.Money Market or Liquid Fund:
These funds are also income funds and their aim is to provide easy liquidity, preservation
of capital and moderate income. These schemes invest exclusively in safer short-term
instruments such as treasury bills, certificates of deposit, commercial paper and inter-
bank call money , government securities, etc. Returns on these schemes fluctuate much
less compared to other funds. These funds are appropriate for corporate and individual
investors as a means to park their surplus funds for short periods.
Other Schemes:
1. Tax Saving Fund:
These schemes offer tax rebates to the investors under specific provisions of the Income
Tax Act, 1961 as the government offers tax incentives for investment in specified

avenues. E.g. Equity linked savings schemes (ELSS). Pension schemes launched by the
mutual funds also offer tax benefits. These schemes are growth oriented and invest pre-
dominantly in equities. Their growth opportunities and risks associated are like any
equity-oriented scheme.
2.Special schemes:
a. Index funds:
Index funds replicate the portfolio of a particular index such as the BSE sensitive index,
S&P NSE 50 index (Nifty), etc. These schemes invest in the securities in the same weight
age comprising of an index. NAVs of such schemes would rise or fall in accordance with
the rise or fall in the index, though not exactly by the same percentage due to some
factors known as “tracking error” in technical terms. Necessary disclosures in this regard
are made in the offer document of the mutual fund scheme.
b. Sector Specific Schemes:
These are the funds/schemes which invest in the securities of only those sectors or
industries as specified in the offer documents. E.g. : pharmaceuticals, software, FMCG,
petroleum stocks, etc. The returns in these funds are dependent on the performance of the
respective sectors/industries. While these funds may give higher returns, they are more
risky compared to diversified funds. Investors need to keep a watch on the performance
of those sectors/industries and must exit at an appropriate time. They may also seek
advice of an expert.

INNOVATIVE FUNDS IN MUTUAL FUND
INDUSTRY
The Indian mutual fund industry has come up with various innovative types of funds
which were previously not allowed in the Indian capital market. These changes has
brought the Indian mutual funds industry at par with the international practices where are
many innovative types of mutual funds:-
1. Exchange-traded funds
A relatively new innovation, the exchange traded fund (ETF), is often formulated as an
open-end investment company. ETFs combine characteristics of both mutual funds and
closed-end funds. An ETF usually tracks a stock index (see Index funds). Shares are
issued or redeemed by institutional investors in large blocks (typically of 50,000).
Investors typically purchase shares in small quantities through brokers at a small
premium or discount to the net asset value; this is how the institutional investor makes its
profit. Because the institutional investors handle the majority of trades, ETFs are more
efficient than traditional mutual funds (which are continuously issuing new securities and
redeeming old ones, keeping detailed records of such issuance and redemption
transactions, and, to effect such transactions, continually buying and selling securities and
maintaining liquidity position) and therefore tend to have lower expenses. ETFs are
traded throughout the day on a stock exchange, just like closed-end funds.
Exchange traded funds are also valuable for foreign investors who are often able to buy
and sell securities traded on a stock market.

2. Funds of funds
Funds of funds (FoF) are mutual funds which invest in other underlying mutual funds
(i.e., they are funds comprised of other funds). The funds at the underlying level are
typically funds which an investor can invest in individually. A fund of funds will
typically charge a management fee which is smaller than that of a normal fund because it
is considered a fee charged for asset allocation services. The fees charged at the
underlying fund level do not pass through the statement of operations, but are usually
disclosed in the fund's annual report, prospectus, or statement of additional information.
The fund should be evaluated on the combination of the fund-level expenses and
underlying fund expenses, as these both reduce the return to the investor.
Most FoFs invest in affiliated funds (i.e., mutual funds managed by the same advisor),
although some invest in funds managed by other (unaffiliated) advisors. The cost
associated with investing in an unaffiliated underlying fund is most often higher than
investing in an affiliated underlying because of the investment management research
involved in investing in fund advised by a different advisor. Recently, FoFs have been
classified into those that are actively managed (in which the investment advisor
reallocates frequently among the underlying funds in order to adjust to changing market
conditions) and those that are passively managed (the investment advisor allocates assets
on the basis of on an allocation model which is rebalanced on a regular basis).
The design of FoFs is structured in such a way as to provide a ready mix of mutual funds
for investors who are unable to or unwilling to determine their own asset allocation
model. Fund companies such as TIAA-CREF, Vanguard, and Fidelity have also entered
this market to provide investors with these options and take the "guess work" out of
selecting funds. The allocation mixes usually vary by the time the investor would like to
retire: 2020, 2030, 2050, etc. The more distant the target retirement date, the more
aggressive the asset mix.

3. Hedge funds
Hedge funds are pooled investment funds with loose SEC regulation and should not be
confused with mutual funds. Certain hedge funds are required to register with SEC as
[11]
investment advisers under the Investment Advisers Act. The Act does not require an
adviser to follow or avoid any particular investment strategies, nor does it require or
prohibit specific investments. Hedge funds typically charge a management fee of 1% or
more, plus a "performance fee" of 20% of the hedge fund's profits. There may be a "lock-
up" period, during which an investor cannot cash in shares.
4. Commodities Fund
This is also a major step towards the development of the Indian mutual funds industry.
The State Bank of India (SBI) is the first mutual fund which would have the exposure in
shares of those companies which deal in the business of commodities. The issue was
open from 4th July to 25th july,2005.

ADVANTAGES OF MUTUAL FUNDS
The advantages of investing in a Mutual Fund are:
• Diversification
The best mutual funds design their portfolios so individual investments will react
differently to the same economic conditions. For example, economic conditions like
a rise in interest rates may cause certain securities in a diversified portfolio to
decrease in value. Other securities in the portfolio will respond to the same economic
conditions by increasing in value. When a portfolio is balanced in this way, the value
of the overall portfolio should gradually increase over time, even if some securities
lose value.
• Professional Management
One of the primary benefits of mutual funds is that an investor has access to professional
management. A good investment manager is certainly worth the fees you will pay. Good
mutual fund managers with an excellent research team can do a better job of monitoring
the companies they have chosen to invest in than you can, unless you have time to spend
on researching the companies you select for your portfolio. That is because Mutual funds
hire full-time, high-level investment professionals. Funds can afford to do so as they
manage large pools of money. The managers have real-time access to crucial market
information and are able to execute trades on the largest and most cost-effective scale.
When you buy a mutual fund, the primary asset you are buying is the manager, who will
be controlling which assets are chosen to meet the funds' stated investment objectives.

• Regulatory oversight
Mutual funds are subject to many government regulations that protect investors
from fraud.
• Liquidity
It's easy to get your money out of a mutual fund. Write a check, make a call, and
you1ve got the cash. In open-ended schemes, you can get your money back promptly at
net asset value related prices from the mutual fund itself.
• Convenience
Investing in mutual funds has it’s own convenience. While you own just one security
rather than many, you still enjoy the benefits of a diversified portfolio and a wide range
of services. Fund managers decide what securities to trade, collect the interest payments
and see that your dividends on portfolio securities are received and your rights exercised.
It also uses the services of a high quality custodian and registrar. Another big advantage
is that you can move your funds easily from one fund to another within a mutual fund
family. This allows you to easily rebalance your portfolio to respond to significant fund
management or economic changes.
• Low Cost
Mutual fund expenses are often no more than 15 percent of your investment.
Expenses for Index Funds are less than that, because index funds are not actively
managed. Instead, they automatically buy stock in companies that are listed on a
specific index.

• Transparency
Regulations for mutual funds have made the industry very transparent. You can track the
investments that have been made on you behalf and the specific investments made by the
mutual fund scheme to see where your money is going. In addition to this, you get regular
information on the value of your investment.
• Variety
There is no shortage of variety when investing in mutual funds. You can find a mutual
fund that matches just about any investing strategy you select. There are funds that focus
on blue-chip stocks, technology stocks, bonds or a mix of stocks and bonds. The greatest
challenge can be sorting through the variety and picking the best for you.

DRAWBACKS OF MUTUAL FUNDS
Mutual funds have their drawbacks and may not be for everyone:
• No Guarantees
No investment is risk free. If the entire stock market declines in value, the value of
mutual fund shares will go down as well, no matter how balanced the portfolio.
Investors encounter fewer risks when they invest in mutual funds than when they
buy and sell stocks on their own. However, anyone who invests through a mutual
fund runs the risk of losing money.
• Fees and commissions
All funds charge administrative fees to cover their day-to-day expenses. Some
funds also charge sales commissions or "loads" to compensate brokers, financial
consultants, or financial planners. Even if you don't use a broker or other financial
adviser, you will pay a sales commission if you buy shares in a Load Fund.
• Management risk
When you invest in a mutual fund, you depend on the fund's manager to make the
right decisions regarding the fund's portfolio. If the manager does not perform
as well as you had hoped, you might not make as much money on your
investment as you expected. Of course, if you invest in Index Funds, you forego
management risk, because these funds do not employ managers. Pan cards and
mutual funds to go hand in hand

FUNDS SRUCTURE AND IT’S CONSTITUENTS
LEGAL STRUCTURE OF MUTUAL FUNDS
Mutual funds have a unique structure not shared with other entities such as companies or
firms. It is important for the employees and agents to be aware of the special nature of
this structure, because it determines the rights and responsibilities of the fund’s
constituents i.e. sponsors , trustees, custodians, transfer agents and of course, the fund
and asset management company(AMC). It also drives the inter-relationship between
these constituents.
MUTUAL FUNDS STRUCTURE IN INDIA
India has a legal framework within which mutual funds must6 be constituted. In India
open and close ended funds operate under the same regulatory structure, and are
constituted along one unique structure as “UNIT TRUSTS’.
A mutual fund in India is allowed to issue open and close ended schemes under a
common legal structure. Mutual funds in India are laid down under SEBI regulations,
1996.

There are many entities involved and the diagram below illustrates the organizational set
up of a mutual fund:
Organization of Mutual Fund
Source: amfiindia.com
1. SPONSOR
Sponsor of the mutual fund is just like the entrepreneur who takes the risk of starting the
business. Sponsor can be an individual, company or another form of organization. There
are three criteria for the sponsors, which are as follows:
a) Three years profitability in the business which they are doing.
b) Five years track record of the business.
c) 40 % of the net worth of the mutual funds should come from the sponsor.

2. Asset Management Company(AMC)
The Asset Management Company is the core part of the mutual fund as the Chief
Investment Officer of the AMC will make all the investment decisions. The net worth of
the AMC at all the times should be Rs.10 crores. The success or failures of the fund in
generating returns for the investors depend to a very large extent on the skills and
knowledge of the fund manager.
3. Trustee:
Trustees are those individuals who are appointed by the sponsor and have credit
worthiness in the market. The trustees of the mutual fund hold its property for the benefit
of the unit holders; they do not directly manage the portfolio of securities. For this they
appoint the AMC with the prior approval of SEBI. They see to it that the interests of the
mutual fund investors are protected and that the working of the mutual fund is done in
lines with the rules and regulations of the mutual fund industry.
Rights of Trustees:
1. The trustees appoint the AMC with the prior approval of SEBI.
2. They also approve each of the schemes floated by the AMC.
3. They have the right to request any necessary information from the AMC
concerning the operations of various schemes managed by AMC to ensure that the
AMC is in compliance with the trust deed and the regulation.
4. The trustees may take remedial action if they believe that the funds are not being

conducted in accordance with SEBI regulations.
4. Custodian and Depositories:
Mutual funds are in the business of buying and selling of securities in large volumes.
Handling these securities in terms of physical delivery and eventual safekeeping is
therefore a specialized activity. The custodian is appointed by the Board of Trustees
for safekeeping of physical securities or participating in any clearing system through
approved depository companies on behalf of mutual fund in case of dematerialized
securities. A custodian must fulfill its responsibilities in accordance with its
agreement with the mutual fund. The custodian should be an entity independent of the
sponsors and is required to be registered with SEBI.
Now the Indian capital markets are moving away from having physical certificates for
securities, to ownership of these securities in dematerialized form with a depository.
Thus, a Mutual fund‘s dematerialized securities holdings will be held by a depository
through a depository participant. A fund’s physical securities will continue to be held
by the custodian. Thus’ deliveries of a fund’s securities are given or received by a
custodian or a depository participant, at the instruction of the AMC, although under
the overall direction and responsibility of the trustees.
5. Transfer Agents:
Transfer agents are responsible for issuing and redeeming units of the mutual fund
and provide other related services such as preparation of transfer documents and
updating investor records. A fund may choose to carry out this activity in-house and
charge the scheme for the service at a competitive market rate. Where an outside
transfer agent is used, the fund investor will find the agent to be an important
interface to deal with, since all of the investor services that a fund provides are going
to be dependant on the transfer agent.

6. Distributors:
For a fund to sell units across a wide retail base of individual investors, an established
network of distribution agents is essential. AMC usually appoint Distributors or
agents or brokers, who sell units on behalf of the fund.

ASSET MANAGEMENT COMPANY
An Asset Management Company is an investment management firm that invests the

pooled funds of retail investors in securities in line with the stated investment objectives.
For a fee, the investment company provides more diversification, liquidity, and
professional management consulting service than is normally available to individual
investors.
The diversification of portfolio is done by investing in such securities which are inversely
correlated to each other. They collect money from investors by way of floating various
mutual fund schemes.
ASSET MANAGEMENT COMPANIES IN INDIA
The concept of mutual funds in India dates back to the year 1963. The era between 1963
and 1987 marked the existence of only one mutual fund company in India with Rs. 67bn
assets under management (AUM), by the end of its monopoly era, the Unit Trust of India
(UTI). By the end of the 80s decade, few other mutual fund companies in India took their
position in mutual fund market.
The new entries of mutual fund companies in India were SBI Mutual Fund, Can bank
Mutual Fund, Punjab National Bank Mutual Fund, Indian Bank Mutual Fund, Bank of
India Mutual Fund.
The succeeding decade showed a new horizon in Indian mutual fund industry. By the end
of 1993, the total AUM of the industry was Rs. 470.04 bn. The private sector funds
started penetrating the fund families. In the same year the first Mutual Fund Regulations
came into existence with re-registering all mutual funds except UTI. The regulations
were further given a revised shape in 1996.

Kothari Pioneer was the first private sector mutual fund company in India which has now
merged with Franklin Templeton. Just after ten years with private sector players
penetration, the total assets rose up to Rs. 1218.05 bn. Today there are 33 mutual fund
companies in India.
Leading Mutual Funds in India:
Birla Sun Life Mutual fund
Birla mutual fund is a joint venture between Aditya Birla group and sun life financial
services of Canada. Sun life financial is a global organization, evolved in 1871 and is
being represented in Canada, the US, the Phillipines, Japan, Indonesia and Bermuda apart
from India. The fund has managed to show a steady performance in the various schemes
of the funds.
Franklin Templeton Mutual fund
The group Franklin Templeton investments is a California based company. Worldwide

Franklin Templeton investments is one of the largest financial services with nearly $500
billion as assets under management globally. The fund house has established its position
in the Indian mutual fund industry
HDFC mutual fund

HDFC mutual fund was set up on June 30, 2000 with two sponsors namely housing
development finance corporation limited and standard life investments limited. The fund
has been a steady performer in the Indian mutual fund industry and has grown to among
the top 5 players in the sector. The fund has a portfolio of strong performing schemes

which includes those launched by the fund itself along with those acquired on the merger
of Zurich Mutual Fund with itself some time ago.
HSBC mutual fund
HSBC mutual fund was set up on may 27, 2002 with HSBC securities and capital
markets (India) Private limited as the sponsor.
Kotak Mutual fund
Kotak mutual fund is part of the Kotak Mahindra group. Kotak Mahindra Asset
Management Company started its operations in December 1998. The fund started off
with strength on the debt side of the business with its launch of various schemes. It was
the first company to launch dedicated gilt scheme investing only in government
securities. It has now established itself even on the equity side with a strong performance
by its schemes.
Reliance Mutual Fund
Reliance mutual fund was established as trust under Indian trusts act, 1882. Reliance
Mutual fund ,which is a part of Anil Dhirubhai Ambani group, has been witnessing a
rapid climb up the asset charts in the last one year. The sponsor of reliance mutual fund is
reliance capital limited. It was registered on june 30th, 1995 as reliance capital mutual
fund which was changed on march 11, 2004. This is now a leading fund on the equity
side and it is a wholly owned subsidiary of reliance capital, which makes it an important
player and component in the entire fund management fund management industry.

State bank of India mutual fund
SBI mutual fund is one of the old funds set up by public sector banks during their foray
into the mutual fund business and in recent years the fund has slowly clawed back into
contention as one of the leading mutual funds in India. This is a joint venture between the
state bank of India and societe generale asset management, one of the world’s leading
fund management companies. SBI mutual fund is the first bank sponsored mutual fund to
launch offshore fund, the India magnum fund with a corpus of Rs. 225 crore
approximately.today it is the largest bank sponsored mutual fund in India.
Tata mutual fund
Tata mutual fund is a trust under the Indian trusts act, 1882. The sponsors for Tata mutual
fund are Tata sons ltd and Tata investment corporation limited. There have been a lot of
new launches by the fund in the last few years.
Unit trust of India mutual fund
UTI asset management company private limited, established in Jan 14,2003. The
sponsors of UTI mutual fund are bank of Baroda, Punjab national bank, state bank of
India and life insurance corporation of India.
ICICI Prudential mutual fund

The mutual fund of ICICI is a leading private sector mutual fund that has made rapid
progress in the last few years. ICICI prudential mutual fund has the parentage of
prudential plc, which is one of the large players in the insurance and fund management
sectors in the UK along with ICICI bank.
ICICI prudential has traditionally been a strong player on the debt side and all its
schemes have received quite a good response from investors. At the same time a steady
and strong performance of its equity schemes over the past few years has also witnessed a
long list of investors queuing up to put their money in the fund.
ABN AMRO Mutual fund
ABN AMRO Mutual Fund was setup on April 15, 2004 with ABN AMRO Trustee
(India) Pvt. Ltd. as the Trustee Company. The AMC, ABN AMRO Asset Management
(India) Ltd. was incorporated on November 4, 2003. Deutsche Bank A G is the custodian
of ABN AMRO Mutual Fund.
Bank of Baroda Mutual Fund (BOB Mutual Fund)
Bank of Baroda Mutual Fund or BOB Mutual Fund was setup on October 30, 1992 under
the sponsorship of Bank of Baroda. BOB Asset Management Company Limited is the
AMC of BOB Mutual Fund and was incorporated on November 5, 1992. Deutsche Bank
AG is the custodian.
ING Vysya Mutual Fund

ING Vysya Mutual Fund was setup on February 11, 1999 with the same named Trustee
Company. It is a joint venture of Vysya and ING. The AMC, ING Investment
Management (India) Pvt. Ltd. was incorporated on April 6, 1998.
Sahara Mutual Fund
Sahara Mutual Fund was set up on July 18, 1996 with Sahara India Financial Corporation
Ltd. as the sponsor. Sahara Asset Management Company Private Limited incorporated on
August 31, 1995 works as the AMC of Sahara Mutual Fund. The paid-up capital of the
AMC stands at Rs 25.8 crore.
Standard Chartered Mutual Fund
Standard Chartered Mutual Fund was set up on March 13, 2000 sponsored by Standard
Chartered Bank. The Trustee is Standard Chartered Trustee Company Pvt. Ltd. Standard
Chartered Asset Management Company Pvt. Ltd. is the AMC which was incorporated
with SEBI on December 20,1999.
Morgan Stanley Mutual Fund India
Morgan Stanley is a worldwide financial services company and its leading in the market
in securities, investmenty management and credit services. Morgan Stanley Investment
Management (MISM) was established in the year 1975. It provides customized asset
management services and products to governments, corporations, pension funds and non-
profit organisations. Its services are also extended to high net worth individuals and retail
investors. In India it is known as Morgan Stanley Investment Management Private
Limited (MSIM India) and its AMC is Morgan Stanley Mutual Fund (MSMF). This is the

first close end diversified equity scheme serving the needs of Indian retail investors
focussing on a long-term capital appreciation.
Escorts Mutual Fund
Escorts Mutual Fund was setup on April 15, 1996 with Escorts Finance Limited as its
sponsor. The Trustee Company is Escorts Investment Trust Limited. Its AMC was
incorporated on December 1, 1995 with the name Escorts Asset Management Limited.
Alliance Capital Mutual Fund
Alliance Capital Mutual Fund was setup on December 30, 1994 with Alliance Capital
Management Corp. of Delaware (USA) as sponsor The Trustee is ACAM Trust Company
Pvt. Ltd. and AMC, the Alliance Capital Asset Management India (Pvt) Ltd. with the
corporate office in Mumbai.
Benchmark Mutual Fund
Benchmark Mutual Fund was setup on June 12, 2001 with Niche Financial Services Pvt.
Ltd. as the sponsor and Benchmark Trustee Company Pvt. Ltd. as the Trustee Company.
Incorporated on October 16, 2000 and headquartered in Mumbai, Benchmark Asset
Management Company Pvt. Ltd. is the AMC.
Canbank Mutual Fund

Canbank Mutual Fund was setup on December 19, 1987 with Canara Bank acting as the
sponsor. Canbank Investment Management Services Ltd. incorporated on March 2, 1993
is the AMC. The Corporate Office of the AMC is in Mumbai.
Chola Mutual Fund
Chola Mutual Fund under the sponsorship of Cholamandalam Investment & Finance
Company Ltd. was setup on January 3, 1997. Cholamandalam Trustee Co. Ltd. is the
Trustee Company and AMC is Cholamandalam AMC Limited.
LIC Mutual Fund
Life Insurance Corporation of India set up LIC Mutual Fund on 19th June 1989. It
contributed Rs. 2 Crores towards the corpus of the Fund. LIC Mutual Fund was
constituted as a Trust in accordance with the provisions of the Indian Trust Act, 1882. .
The Company started its business on 29th April 1994. The Trustees of LIC Mutual Fund
have appointed Jeevan Bima Sahayog Asset Management Company Ltd as the
Investment Managers for LIC Mutual Fund.
GIC Mutual Fund
GIC Mutual Fund, sponsored by General Insurance Corporation of India (GIC), a

Government of India undertaking and the four Public Sector General Insurance
Companies, viz. National Insurance Co. Ltd (NIC), The New India Assurance Co. Ltd.
(NIA), The Oriental Insurance Co. Ltd (OIC) and United India Insurance Co. Ltd. (UII)

and is constituted as a Trust in accordance with the provisions of the Indian Trusts Act,
1882.
PERFORMANCE MEASURES OF MUTUAL FUNDS
Mutual Fund industry today, with about 30 players and more than six hundred schemes,
is one of the most preferred investment avenues in India. However, with a plethora of
schemes to choose from, the retail investor faces problems in selecting funds. Factors
such as investment strategy and management style are qualitative, but the funds record
is an important indicator too.
Though past performance alone cannot be indicative of future performance, it is,
frankly, the only quantitative way to judge how good a fund is at present. Therefore,
there is a need to correctly assess the past performance of different Mutual Funds.
Worldwide, good Mutual Fund companies over are known by their AMC’s and this
fame is directly linked to their superior stock selection skills.
For Mutual Funds to grow, AMC’s must be held accountable for their selection of
stocks. In other words, there must be some performance indicator that will reveal the
quality of stock selection of various AMC’s.
Return alone should not be considered as the basis of measurement of the performance
of a Mutual Fund scheme, it should also include the risk taken by the fund manager
because different funds will have different levels of risk attached to them. Risk
associated with a fund, in a general, can be defined as Variability or fluctuations in the
returns generated by it. The higher the fluctuations in the returns of a fund during a
given period, higher will be the risk associated with it. These fluctuations in the returns
generated by a fund are resultant of two guiding forces. First, general market

fluctuations, which affect all the securities, present in the market, called Market risk or
Systematic risk and second, fluctuations due to specific securities present in the
portfolio of the fund, called Unsystematic risk. The Total Risk of a given fund is sum of
these two and is measured in terms of standard deviation of returns of the fund.
Systematic risk, on the other hand, is measured in terms of Beta, which represents
fluctuations in the NAV of the fund vis-à-vis market. The more responsive the NAV of
a Mutual Fund is to the changes in the market; higher will be its beta. Beta is calculated
by relating the returns on a Mutual Fund with the returns in the market. While
Unsystematic risk can be diversified through investments in a number of instruments,
systematic risk cannot. By using the risk return relationship, we try to assess the
competitive strength of the Mutual Funds one another in a better way. In order to
determine the risk-adjusted returns of investment portfolios, several eminent authors
have worked since 1960s to develop composite performance indices to evaluate a
portfolio by comparing alternative portfolios within a particular risk class.
The most important and widely used measures of performance are:

• The Treynor’Measure
• The Sharpe Measure
• Jenson Model
• Fama Model
1) The Treynor Measure:-
Developed by Jack Treynor, this performance measure evaluates funds on the basis of
Treynor's Index.
This Index is a ratio of return generated by the fund over and above risk free rate of
return (generally taken to be the return on securities backed by the government, as there
is no credit risk associated), during a given period and systematic risk associated with it
(beta). Symbolically, it can be represented as:

Treynor's Index (Ti) = (Ri - Rf)/Bi.
Where,
Ri represents return on fund,
Rf is risk free rate of return, and
Bi is beta of the fund.
All risk-averse investors would like to maximize this value. While a high and positive
Treynor's Index shows a superior risk-adjusted performance of a fund, a low and
negative Treynor's Index is an indication of unfavorable performance.
2) The Sharpe Measure :-
In this model, performance of a fund is evaluated on the basis of Sharpe Ratio, which is
a ratio of returns generated by the fund over and above risk free rate of return and the
total risk associated with it.
According to Sharpe, it is the total risk of the fund that the investors are concerned
about. So, the model evaluates funds on the basis of reward per unit of total risk.
Symbolically, it can be written as:
Sharpe Index (Si) = (Ri - Rf)/Si
Where,
Si is standard deviation of the fund,
Ri represents return on fund, and
Rf is risk free rate of return.
While a high and positive Sharpe Ratio shows a superior risk-adjusted performance of a
fund, a low and negative Sharpe Ratio is an indication of unfavorable performance.

Comparison of Sharpe and Treynor
Sharpe and Treynor measures are similar in a way, since they both divide the risk
premium by a numerical risk measure. The total risk is appropriate when we are
evaluating the risk return relationship for well-diversified portfolios. On the other hand,
the systematic risk is the relevant measure of risk when we are evaluating less than
fully diversified portfolios or individual stocks. For a well-diversified portfolio the total
risk is equal to systematic risk. Rankings based on total risk (Sharpe measure) and
systematic risk (Treynor measure) should be identical for a well-diversified portfolio,
as the total risk is reduced to systematic risk. Therefore, a poorly diversified fund that
ranks higher on Treynor measure, compared with another fund that is highly
diversified, will rank lower on Sharpe Measure.
3) Jenson Model:-
Jenson's model proposes another risk adjusted performance measure. This measure was
developed by Michael Jenson and is sometimes referred to as the differential Return
Method. This measure involves evaluation of the returns that the fund has generated vs.
the returns actually expected out of the fund1 given the level of its systematic risk. The
surplus between the two returns is called Alpha, which measures the performance of a
fund compared with the actual returns over the period. Required return of a fund at a
given level of risk (Bi) can be calculated as:
Ri = Rf + Bi (Rm - Rf)
Where,
Ri represents return on fund, and
Rm is average market return during the given period,
Rf is risk free rate of return, and
Bi is Beta deviation of the fund.

After calculating it, Alpha can be obtained by subtracting required return from
the actual return of the fund.
Higher alpha represents superior performance of the fund and vice versa. Limitation of
this model is that it considers only systematic risk not the entire risk associated with the
fund and an ordinary investor cannot mitigate unsystematic risk, as his knowledge of
market is primitive.
4) Fama Model:-
The Eugene Fama model is an extension of Jenson model. This model compares the
performance, measured in terms of returns, of a fund with the required return
commensurate with the total risk associated with it. The difference between these two is
taken as a measure of the performance of the fund and is called Net Selectivity.
The Net Selectivity represents the stock selection skill of the fund manager, as it is the
excess returns over and above the return required to compensate for the total risk taken
by the fund manager. Higher value of which indicates that fund manager has earned
returns well above the return commensurate with the level of risk taken by him.
Required return can be calculated as: Ri = Rf + Si/Sm*(Rm - Rf)
Where,
Sm is standard deviation of market returns,
Rm is average market return during the given period, and
Rf is risk free rate of return.
The Net Selectivity is then calculated by subtracting this required return from
the actual return of the fund.

Among the above performance measures, two models namely, Treynor measure and
Jenson model use Systematic risk is based on the premise that the Unsystematic risk is
diversifiable. These models are suitable for large investors like institutional investors
with high risk taking capacities as they do not face paucity of funds and can invest in a
number of options to dilute some risks. For them, a portfolio can be spread across a
number of stocks and sectors. However, Sharpe measure and Fama model that consider
the entire risk associated with fund are suitable for small investors, as the ordinary
investor lacks the necessary skill and resources to diversify. Moreover, the selection of
the fund on the basis of superior stock selection ability of the fund manager will also
help in safeguarding the money invested to a great extent. The investment in funds that
have generated big returns at higher levels of risks leaves the money all the more prone
to risks of all kinds that may exceed the individual investors' risk appetite.

RESEARCH METHODOLOGY

RESEARCH METHODOLOGY
The Methodology involves randomly selecting Open-Ended equity schemes of different

fund houses of the country. The data collected for this project is basically from two
sources, they are:-
1. Primary sources: The monthly fact sheets of different fund houses and research
reports from banks.
2. Secondary sources: Collection of data from Internet and Books.
HYPOTHESIS
The Hypothesis of the study involves Comparison between:

1. Kotak Opportunities fund.
2. Reliance Equity Opportunities fund.
3. Franklin India Flexi fund.

4. HDFC Core & satellite fund.
5. HSBC India Opportunities fund.
NEED OF THE STUDY:
The project’s idea is to project Mutual Fund as a better avenue for investment on a
long-term or short-term basis. Mutual Fund is a productive package for a lay-investor
with limited finances, this project creates an awareness that the Mutual Fund is a
worthy investment practice. Mutual Fund is a globally proven instrument. Mutual
Funds are ”Unit Trust” as it is called in some parts of the world has a long and
successful history, of late Mutual Funds have become a hot favorite of millions of
people all over the world.
The driving force of Mutual Funds is the ‘safety of the principal’ guaranteed, plus the
added advantage of capital appreciation together with the income earned in the form of
interest or dividend. The various schemes of Mutual Funds provide the investor with a
wide range of investment options according to his risk bearing capacities and interest
besides; they also give handy return to the investor. Mutual Funds offers an investor to
invest even a small amount of money, each Mutual Fund has a defined investment
objective and strategy. Mutual Funds schemes are managed by respective asset
managed companies sponsored by financial institutions, banks, private companies or
international firms. A Mutual Fund is the ideal investment vehicle for today’s complex
and modern financial scenario.
The study is basically made to analyze the various open-ended equity schemes of
different Asset Management Companies to highlight the diversity of investment that
Mutual Fund offer. Thus, through the study one would understand how a common man
could fruitfully convert a pittance into great penny by wisely investing into the right
scheme according to his risk taking abilities.

SCOPE:
The study here has been limited to analyse open-ended equity Growth schemes of
different Asset Management Companies namely Kotak Mahindra Mutual Fund,
Reliance Mutual Fund, HDFC Mutual Fund, Franklin Templeton Mutual Fund,
HSBC Mutual Fundseach scheme is analysed according to its performance against the
other, based on factors like Sharpe’s Ratio, Treynor’s Ratio, β (Beta) Co-efficient,
Returns.
OBJECTIVES:
1. To project Mutual Fund as the ‘productive avenue’ for investing activities.

2. To show the wide range of investment options available in Mutual Funds by
explaining its various schemes.
3. To compare the schemes based on Sharpe’s ratio, Treynor’s ratio, β Co-
efficient, Returns and show which scheme is best for the investor based on his
risk profile.
4. To help an investor make a right choice of investment, while considering the
inherent risk factors.
To understand the recent trends in Mutual Funds world.
The comparison between these schemes is made based on the following factors
A) Sharpe’s Ratio
B) Treynor’s Ratio
C) β (Beta) co-efficient.
D) Returns

A) The Sharpe’s Measure:-
In this model, performance of a fund is evaluated on the basis of Sharpe Ratio, which is
a ratio of returns generated by the fund over and above risk free rate of return and the
total risk associated with it.
According to Sharpe, it is the total risk of the fund that the investors are concerned
about. So, the model evaluates funds on the basis of reward per unit of total risk.
Symbolically, it can be written as:
Sharpe Index (Si) = (Ri - Rf)/Si

Where,
Si is Standard Deviation of the fund.
While a high and positive Sharpe Ratio shows a superior risk-adjusted performance of a
fund, a low and negative Sharpe Ratio is an indication of unfavorable performance.
B) The Treynor Measure:-
Developed by Jack Treynor, this performance measure evaluates funds on the basis of
Treynor's Index.
This Index is a ratio of return generated by the fund over and above risk free rate of
return (generally taken to be the return on securities backed by the government, as there
is no credit risk associated), during a given period and systematic risk associated with it
(beta). Symbolically, it can be represented as:
Treynor's Index (Ti) = (Ri - Rf)/Bi.
Where,

Rf is risk free rate of return,
and Bi is beta of the fund.
All risk-averse investors would like to maximize this value. While a high and positive
Treynor's Index shows a superior risk-adjusted performance of a fund, a low and
negative Treynor's Index is an indication of unfavorable performance.
C) β (Beta) Co-efficient:-
Systematic risk is measured in terms of Beta, which represents fluctuations in the NAV
of the fund vis-à-vis market. The more responsive the NAV of a Mutual Fund is to the
changes in the market; higher will be its beta. Beta is calculated by relating the returns
on a Mutual Fund with the returns in the market. While unsystematic risk can be
diversified through investments in a number of instruments, systematic risk cannot. By
using the risk return relationship, we try to assess the competitive strength of the
Mutual Funds vis-à-vis one another in a better way.
β (Beta) is calculated as N (Σ XY) – Σ XΣ Y
N (Σ X2) – (Σ X) 2
D) Returns:- Returns for the last one-year of different schemes are taken for the
comparison and analysis part.

DATA ANALYSIS AND
INTERPRETATIONS

DATA ANALYSIS& INTERPRETATIONS:
Note: All the data used for analysis is taken up to the period 28-febuary-2006
KOTAK OPPORTUNITIES FUND
• Kotak opportunities is a open-ended equity Growth scheme.

• Kotak opportunities is a diversified aggressive equity scheme
• The fund has portfolio turnover ratio.
• The fund manager is optimistic on the markets in the long term and expects good
returns from the same.
• The fund manager is of the opinion that the market may not fall due to the abundent
liquidity in the system.However the fund managers sees high oil prices a big concern
in the global markets.
• The fund has invested into equities to the tune of 94.45% of the total portfolio.

RELIANCE EQUITY OPPORTUNITIES FUND:
• Reliance Equity Opportunities Fund is an Open-Ended Equity Scheme.

• Reliance Equity Opportunities Fund is an aggressive diversified equity scheme
• Reliance Equity Opportunities is to seek to generate capital appreciation and provide
long term growth opportunities by investing in a portfolio constituted of equity
securities and equity related securities.
• The fund has a high portfolio turnover ratio.
• It has Instrument type such as Equity & Equity related Instruments and Debt &
Money Market Instruments.
HDFC Core and Satellite Fund
• HDFC Core and Satellite Fund is an Open-Ended Equity Scheme.

• HDFC Core and Satellite Fund is an diversified equity scheme
• The Scheme may seek investment opportunity in the ADR / GDR / Foreign Equity
and Debt Securities, in accordance with guidelines stipulated in this regard by SEBI
and RBI from time to time.
• The net assets of the Scheme will be invested primarily in equity and equity related
instruments in a portfolio comprising of 'Core' group of companies and 'Satellite'
group of companies.
• The 'Satellite' group will comprise of predominantly small-mid cap companies that
offer higher potential returns but at the same time carry higher risk
FRANKLIN INDIA FLEXI CAP EQUITY FUND

• Franklin india flexi cap Fund is an Open-Ended Equity Scheme.
• Franklin india flexi cap Fund is an aggressive diversified equity scheme
• It is an investment avenue that has the potential to provide steady returns and capital
appreciation over a five-year period through a mix of fixed income and equity
instruments.
• It has a investment team has a rich experience of investing in both equity and fixed
income instrument that has translated in to a good investment performance from its
hybrid scheme
HSBC India opportunities Fund
• HSBC India Opportunities Fund is an Open-Ended Equity Scheme.

• It is a scheme seeking long term capital growth through investments across all
market capitalizations, including small, mid and large cap stocks.
• The investment is to seek aggressive growth by focussing on mid cap companies in
addition to investments in large cap stocks.
• The fund aims to be predominantly invested in equity and equity related securities
KOTAK OPPORTUNITIES FUND

Fund Manager: (Mr. Anand Shah)
OBJECTIVE:-
To generate capital appreciation from a diversified portfolio of equity and equity
related securities Kotak Opportunities is a diversified equity scheme, with a flexible
investing style. It will invest in sectors, which our Fund Manager believes would
outperform others in the short to medium-term. Kotak Opportunities’ speciality lies in

giving the Fund Manager flexibility to act based on his views on the market; and in
allowing him to invest higher concentrations in sectors he believes will outperform
others.
As markets evolve and grow, new opportunities for growth keep emerging. Kotak
Opportunities would endeavour to capture these opportunities to generate wealth for its
investors.
♦ KOTAK OPPORTUNITIES FUND PERFORMANCE:-

(X
(Rm- (Rp- -Xbar
YEAR Rp Rm Rf Rf) Rf) X2 XY ) D2
X Y D
LAST 1
MONTH 5.92 2.84 4.25 -1.41 1.67 1.98 -2.35 -20.11 404.71
LAST 3 13.1
MONTHS 24.61 1 4.25 8.86 20.36 78.49 180.38 -9.847 96.97
LAST 6 30.1 25.8
MONTHS 34.42 4 4.25 9 30.17 670.29 781.10 25.89 670.29
Since 45.9 41.4
Inception 78.17 9 4.5 9 73.67 1721.42 3056.56 22.78 519.04
74.8 125.8
TOTAL 3 7 2472.19 4015.70 18.70 1691.02
Where,
Rp - Portfolio Return- Kotak opportunities

Rm - Market Return-Fund’s bench mark- S& P CNX 500
Rf - Risk free rate of return.
• CALCULATION OF ARTHMETIC MEAN:-

=Σ X/N
= 74.83/ 4
= 18.70
• CALCULATION OF STANDARD DEVIATION (σ ):-
= √ Σ (X-Xbar) 2 / N
= √1691.02/4
=√422.75
=20.56
• CALCULATION OF BETA CO-EFFICIENT:-
= N (Σ XY) – Σ XΣ Y
N (Σ X2) – (Σ X) 2
= 4(5208.85) – (90.35)(126.21)
4(4117.22) – (90.35) 2
= 4(4015.70)-(74.83)-(125.87)
4(2472.19)-(74.83) 2
= 16062.8-9418.85
9888.76-5599
= 6643.95
4289.76
=1.54
• CALCULATION OF SHARPE’S RATIO:-
= Rp-Rf / σ
=125.87 /20.56
= 6.12
• CALCULATION OF TREYNOR’S RATIO:-

= Rp-Rf / β
= 125.87/1.54
= 87.73/100
=0.8173
GRAPH SHOWING KOTAK OPPORTUNITIES FUND

PERFORMANCE:-
K O T A K O P P O R T U N IT IE S
7 8. 1 7
4 5. 9 9
RETURNS
3 4 . 42
30 .1 4
24 .6 1
1 3 .1 1
5 .9 2 4.5
2 .8 4 4 .2 5 4.2 5 4 . 25
L A S T 1 M O N TH LA S T 3 M O N TH S L A S T 6 M O N TH S S IN C E IN C E P TIO N 0 9
S E P TE M B E R -2 00 4
K O TA K O P P O R TU N ITIE
S &S P C N X-5 0 0R f

Interpretation:-
• Last I Month : It reveals that Kotak Opportunities Returns are 5.92

As compare to Funds Benchmark Returns are 2.84, and
The Risk Free Rate is common for next 9 months. (i.e., 4.25%)
• Last III Months: It reveals that Kotak Opportunities Returns are 24.61
• Last VI Months: It reveals that Kotak Opportunities Returns are 34.42
• Since Inception: It reveals that Kotak Opportunities Returns are 78.17,
There is a slight Increase in Risk Free Rate by 0.25% (i.e., 4.5%)

compare to last 9 Months.
HDFC CORE& SATELLITE FUND:
Objective:-
The objective of the scheme is to generate capital appreciation through equity
investment in companies whose shares are quoting at prices below their true value.
♦ HDFC CORE& SATELLITE FUND PERFORMANCE:-

(Rm- (Rp- (X
YEAR Rp Rm Rf Rf) Rf) X2 XY -Xbar) D2
X Y D
LAST 1.15 3.72 4.25 -0.53 -3.1 0.2809 1.643 - 432.3280563
1MONTH 20.792

5
-
LAST 3 16.4 13.8 12.2 10.692
MONTHS 6 2 4.25 9.57 1 91.5849 116.8497 5 114.3295563
LAST 26.8 31.3
6MONTHS 35.6 31.1 4.25 5 5 720.9225 841.7475 26.85 720.9225
Since 69.6 49.6 45.1 65.1 2039.425 2941.722 24.897
Inception 4 6 4.5 6 4 6 4 5 619.8855063
81.0 105. 2852.213 3901.962 20.262
TOTAL 5 6 9 6 5 1887.465619
Where,
Rp - Portfolio Return-HDFC core & Satellite Fund
Rm - Market Return-Fund’s benchmark-BSE-200

=Σ X/N
= 81.05/4
= 20.26
• CALCULATION OF STANDARD DEVIATION (σ):-
= √ Σ (X-Xbar)2 / N
= √1887.4/4
= √471.75
=21.71
• CALCULATION OF BETA CO-EFFICIENT:-
N (Σ X2) – (Σ X) 2
= 4(3901.9) –(81.05)(105.6)
4(4026) – (89.75) 2
= 15607.5-8558.8

11408.8-6569.1
=7048.7
4839
=1.45

=Rp-Rf-/ σ
=105.6/21.71
=4.86

= Rp-Rf/β
= 105.6/1.45
= 72.82/100
=0.7282
GRAPH SHOWING HDFC CORE& SATELLITE FUND

PERFORMANCE:-

H D F C C o re & S a te llite F u n d P e r fo rm a n c e
80
69.64
70
60
4 9 .6 6
50
RETURNS
40 3 5 .6
31.1
30
20 1 6 .4 6
13.82
10
3 .7 2 4 .2 5 4.25 4 .2 5 4.5
1.15
0
L A S T 1 M O N TH L A S T 3 M O N TH S L A S T 6 M O N TH S S IN C E IN C E P T IO N 1 7 S E P TE M B E R -
2004
Rp Rm Rf
Interpretation:
• Last I Month : It reveals that HDFC Core & Satellite Fund Returns are 1.15
as compare to Funds Benchmark Returns are 3.72, and The Risk
Free Rate is common for next 9 months. (i.e., 4.25%)
• Last III Months: It reveals that HDFC Core & Satellite Fund Returns are 16.46
as compare to Funds Benchmark Returns are 13.82, and The
Risk Free Rate is common for next 6 months. (i.e., 4.25%)
• Last VI Months: It reveals that HDFC Core & Satellite Fund Returns are 35.6,
as compare to Funds Benchmark Returns are 31.1 and The Risk
Free Rate is common for next 3 months. (i.e., 4.25%)
• Since Inception: It reveals that HDFC Core & Satellite Fund Returns are 69.64,
as compare to Funds Benchmark Returns are 49.66, and There is
a slight increase in Risk Free Rate by 0.25%(4.5%) compare to
last 9 Months.
RELIANCE EQUITY OPPORTUNITIES FUND:

Investment Objective:
The primary investment objective of the scheme is to seek to generate capital

appreciation & provide long-term growth opportunities by investing in a portfolio
constituted of equity securities & equity related securities and the secondary
objective is to generate consistent returns by investing in debt and money market
securities.
♦ RELIANCE EQUITY OPPORTUNITIES FUND PERFORMANCE:-
(Rm- (Rp- (X
YEAR Rp Rm Rf Rf) Rf) X2 XY -Xbar) D2
X Y D
LAST 1
MONTH 2.4 3.72 4.25 -0.53 -1.85 0.2809 0.9805 -20.935 438.274225
LAST 3 16.2 13.8 11.9
MONTHS 2 2 4.25 9.57 7 91.5849 114.5529 9.57 91.5849
LAST 6 29.4 25.2
MONTHS 6 31.1 4.25 26.85 1 720.9225 676.8885 6.445 41.538025
Since 54.9 50.2 50.4 2091.232 2308.907
Inception 9 3 4.5 45.73 9 9 7 45.73 2091.2329
85.8 2904.021 3101.329
TOTAL 81.62 2 2 6 40.81 2662.63005
Where,
Rp - Portfolio Return-Reliance equity opportunities fund
Rm - Market Return-Fund’s Benchmark BSE-500

=Σ X/N

= 81.62/ 4
= 20.40
= √ Σ (X-Xbar)2 / N
= √2662.63/4
= √665.65
=25.80
• CALCULATION OF BETA CO-EFFICIENT;-
N (Σ X2) – (Σ X) 2
= 4(3101.32) – (81.62)(85.82)
4(2904.02) – (81.62) 2
= 12405-7002.91
11616-6661.82
=5402.09
4954.18
=1.09
= Rp-Rf/ σ
=85.82
25.23
=7.29
= Rp-Rf/β
= 85.82/1.47
= 37.32/100
=0.37
GRAPH SHOWING RELIANCE EQUITY OPPORTUNITIES
FUND PERFORMANCE:-

R E L IA N C E E Q U IT Y O P P O R T U N IT IE S F U N D
5 4 .9 9
50.23
3 1 .1
29.46
RETURNS
1 6 .2 2
13.82
3 .7 2 4 . 2 5 4 .2 5 4 .2 5 4 .5
2.4
L A S T 1 M O N TH L A S T 3 M O N TH S L A S T 6 M O N TH S S IN C E IN C E P TIO N 3 1 M A R C H
2005
R E L IA N C EB S E -1 0 0 R f
Interpretation:-
• Last I Month: It reveals that Reliance Equity Opportunities Fund

Returns are 2.4 as compare to Funds Benchmark Returns Are
3.72, and The Risk Free Rate is common for next 9 months. (i.e.,
4.25%)
• Last III Months: It reveals that Reliance Equity Opportunities
Fund Returns are 16.22 as compare to Funds Benchmark Returns
are 13.82, and The Risk Free Rate is common for next 6 months.
(i.e., 4.25%)
• Last VI Months: It reveals that Reliance Equity Opportunities
Fund Returns are 29.46 as compare to Funds Benchmark Returns
are 31.1 and The Risk Free Rate is common for next 3 months.
(i.e., 4.25%)
• Since Inception: It reveals that Reliance Equity Opportunities Fund Returns
are 54.99, as compare to Funds Benchmark returns are 50.23, and
There is a slight increase in Risk Free Rate by 0.25%(4.5%)
compare to last 9 months.

FRANKLIN INDIA FLEXI CAP EQUITY FUND
Fund Managers: (Mr. K N Siva Subramanian & R Sukumar Rajah)
Investment objective:
Stocks of companies are usually categorized as large-cap, midcap, and small-cap

depending on their market capitalization. History has demonstrated that these categories
tend to perform differently through economic and market cycles. For example, mid or
small cap stocks could move up sharply during a certain time period while large cap
stocks remain range bound and vice versa. On the other hand, large-cap stocks tend to be
less volatile than mid & small-cap stocks on account of factors such as size, market
leadership..etc. Moreover, such periods of out performance are typically followed by a
consolidation phase and a possible reversal of the situation. In order to derive optimal
returns from the stock markets, investments need to be diversified and have flexibility to
shift allocations across market caps.
Designed to help you achieve this with a single investment is Franklin India Flexi Cap
Fund (FIFCF). An open-end diversified equity fund, FIFCF seeks to provide medium to
long-term capital appreciation by investing in stocks across the entire market
capitalization range.

♦ FRANKLIN INDIA FLEXI CAP FUND PEFORMANCE:-
(X
(Rm- (Rp- -Xbar
YEAR Rp Rm Rf Rf) Rf) X2 XY ) D2
X Y D
-
4.2 - 0.28 20.93
LAST 1MONTH 3.47 3.72 5 -0.53 0.78 1 0.4134 5 438.274225
LAST 3 16.4 13.8 4.2 91.5
MONTHS 9 2 5 9.57 12.2 8 117.1368 10.1 102.01
LAST 6 36.5 4.2 720.
MONTHS 8 31.1 5 26.9 32.3 9 868.0605 17.28 298.5984
SINCE
INCEPTION 50.2
March 2, 2005 61.8 3 4.5 45.7 57.3 2091 2620.329 18.88 356.4544
3605.939 25.32
TOTAL 81.6 101 2904 7 5 1195.337025
Where,
Rp - Portfolio Return-Franklin flexi cap fund
Rm - Market Return-Fund’s Benchmarks S&P CNX-500
CALCULATION OF ARTHMETIC MEAN:-

=Σ X/N
= 81.6/ 4
= 20.4
CALCULATION OF STANDARD DEVIATION (σ):-
= √ Σ (X-Xbar)2 / N
= √1195/4
= √298.75

= 17.28
CALCULATION OF BETA CO-EFFICIENT;-

N (Σ X2) – (Σ X) 2
= 4(3605) – (81.6)(101)
4(2904) – (2904) 2
= 14420-8241.6
11616-8433
=6178.4
3183
=1.94
CALCULATION OF SHARPE’S RATIO:-
= Rp-Rf/ σ
=101
17.28
=5.84
CALCULATION OF TREYNOR’S RATIO:-
= Rp-Rf/β
=101/1.94
= 52.06/100 or 0.52

GRAPH SHOWING FRANKLIN INDIA FLEXI CAP FUND
PERFORMANCE:-
F ra n k lin in d ia fle x i c a p fu n d
70
61.8
60
5 0 .2 3
50
40 3 6 . 58
RETURNS
31.1
30
20 1 6.49
1 3 . 82
10
3.47 3.72 4 . 25 4.2 5 4 .2 5 4 .5
0
L A S T 1 M O N TH L A S T 3 M O N TH S L A S T 6 M O N TH S S IN C E IN C E P TIO N M a rc h 2 , 2 0 0 5
Rp Rm Rf
Interpretation:
• Last I Month : It reveals that Franklin India flexi Cap Fund Returns are 3.47 as
compare to Funds Benchmark Returns are 2.8, and The Risk Free
Rate is common for next 9 months. (i.e., 4.25%)
• Last III Months: It reveals that Franklin India flexi Cap Fund Returns are
14.49 as compare to Funds Benchmark Returns are 13.11, and
• Last VI Months: It reveals that Birla Sun-life Equity Opportunities Fund
Returns are 36.58 as compare to Funds Benchmark Returns are

30.14 and The Risk Free Rate is common for next 3 months. (i.e.,
4.25%)
• Since Inception: It reveals that Birla Sun-life Equity Opportunities Fund
Returns are 61.8, as compare to Funds Benchmark Returns are
47.75 and There is a slight Increase in Risk Free Rate by
0.25%(4.5%) compare to last 9 months.
HSBC INDIA OPPORTUNITIES FUND
Fund Manager: (Mr.Sanjiv Duggal)
Investment objective:
The fund is an open-ended equity scheme seeking long term capital growth through
investments across all market capitalizations, including small, mid and large cap
stocks. The fund will endeavour to invest in large cap companies as well as identify
mid stocks, which have the potential to become blue chip large cap stocks over
time. The investment style is to seek aggressive growth by focussing on mid cap
companies in addition to investments in large cap stocks. This fund aims to be
predominantly invested in equity and equity related securities. However, it could
move a significant portion of its assets towards fixed income securities if the fund
becomes negative on negative on equity markets.

♦ HSBC INDIA OPPORTUNITIES FUND PEFORMANCE:-
(X
(Rm (Rp- -Xbar
YEAR Rp Rm Rf -Rf) Rf) X2 XY ) D2
X Y D
-
LAST 1 19.69 387.89302
MONTH -0.57 2.81 4.25 -1.44 -4.82 2.0736 6.9408 5 5
LAST 3
MONTH 12.4 13.4
S 5 5 4.25 9.2 8.2 84.64 75.44 9.15 83.7225
LAST 6
MONTH 27.6 28.1 23.8 23.4
S 7 3 4.25 8 2 570.2544 559.2696 13.67 186.8689
Since 48.6 45.8 41.3 44.1 1712.304 1825.685
Inception 2 8 4.5 8 2 4 6 11.58 134.0964
73.0 70.9 2369.272 14.70 792.58082
TOTAL 2 2 4 2467.336 5 5
Where,
Rp - Portfolio Return-
Rm - Market Return,

=Σ X/N
= 73.02/ 4
= 18.25

= √ Σ (X-Xbar)2 / N
= √792.58/4
= √198.14
=14.07
• CALCULATION OF BETA CO-EFFICIENT;-
N (Σ X2) – (Σ X) 2
= 4(2467.33) – (73.02)(70.92)
4(2369.27) – (73.02) 2
= 9869.32-5178.57
9477.08-5331.92
=4690.75
4145.18
=1.13
= Rp-Rf/ σ
=70.92
14.07
=5.04
• CALCULATION OF TREYNOR’S RATIO: -
= Rp-Rf/β
=70.92/1.13
= 62.76/100
=0.62

GRAPH SHOWING HSBC INDIA OPPORTUNITIES FUND
PEFORMANCE:-
H S B C IN D IA O P P O R T U N IT IE S
60
4 8.62
50 45 .8 8
40
30 27 .6 728 .13
RETURNS
20
12 .4 51 3. 45
10
4 .25 4 .25 4.2 5 4 .5
2.8 1
0
1 /1 /1 900 -0.5 7 90 0
1/2/1 1/3 /1 90 0 1 /4 /19 00 1 /5 /19 00 1/6 /1 90 0
-10
H S B C B S E -5 00 R f
Interpretation
• Last I Month : It reveals that HSBC India Opportunities Fund Returns are
-0.57 as compare to Funds Benchmark Returns are 2.81, and The
Risk Free Rate is common for next 9 months. (i.e., 4.25%).
• Last III Months: It reveals that HSBC India Opportunities Fund Returns are
12.45as compare to Funds Benchmark Returns are 13.45, and
The Risk Free Rate is common for next 6 months. (i.e., 4.25%).
• Last VI Months: It reveals that that HSBC India Opportunities Fund
Returns
are 27.87 as compare to Funds Benchmark Returns are 28.13
and The Risk Free Rate is common for next 3 months. (i.e.,
4.25%)
• Since Inception: It reveals that HSBC India Opportunities Fund Returns
are 48.82, as compare to Funds Benchmark returns are 45.82, and

There is a slight Increase in Risk Free Rate by 0.25 % (4.5%)
compare to last 9 months
OBSERVATIONS

OBSERVATIONS
Observations are made from the data analysis.
The following observations are drawn from the analysis of schemes:
KOTAK FRANKLIN RELIANCE HDFC HSBC

OPPORTUNIT INDIA EQUITY CORE & INDIA
IES FLEXI OPPORTUN SATELLI OPPORT
FUND CAP FUND ITIES TE -
FUND FUND UNITIES
FUND
5.92 3.47 2.4 1.15 -0.57
Monthly return’s
Sharpe’s Ratio 6.12 5.84 7.29 4.86 5.04
Treynor’s Ratio 0.81 0.52 0.37 0.72 0.62
Co-efficient (β ) 1.54 1.94 1.09 1.45 1.13
Std.Deviation (σ ) 20.56 17.28 25.80 21.71 14.07

LIMITATIONS OF THE STUDY

LIMITATIONS OF THE STUDY
1. The study is limited only to the analysis of different schemes and its suitability
to different investors according to their risk-taking ability.
2. The study is based on secondary data available from monthly fact sheets,
websites and other books, as primary data was not accessible.
3. The study is limited by the detailed study of various schemes of Five Asset
Management Company.

SUGGESTIONS AND
CONCLUSIONS

SUGGESTIONS
• The Asset Management Company must design the portfolio in such a way, to
increase the returns.
• The Asset Management Company must design the portfolio in such a way, to lessen
the risk that is common in the market.
• The Asset Management Company must dedicate itself, because it motivates the
investors and potential investors to invest in Mutual Funds.
• The Asset Management Company must manage the Fund efficiently and with
dedication to earn the goodwill of the public.
• The Asset Management Company must make the most advantageous use of print
and electronic media in order to motivate the investors and potential investors to
invest in Mutual Funds.

CONCLUSIONS
After interpreting the above data the following conclusions have been made
Kotak Opportunities Fund:
• It is a diversified aggressive equity fund.

• It is a open-ended equity scheme
• Since the β ratio is high it implies the risk is high
• As the returns are more in Kotak Opportunities compare to other Four AMC’s
• It is suitable for investors looking for medium risk and moderate returns with in a
time period of 1-3 years.
Franklin India Flexi Cap Fund:
• It is a diversified equity fund.

• In Franklin the returns are more compare to other Three AMC’s (HDFC,
RELIANCE, HSBC)
Reliance Equity Opportunities Growth Fund:

• In Reliance Equity Opportunities the returns are medium compare to other AMC’s

HDFC Core & Satellite Fund:

• In HDFC the returns are low compare to other AMC’s
• It is a value based fund
• It is a low risky fund
HSBC India Opportunities Fund:-

• In HSBC the returns are lesser than other AMC’s
• It is a low risky fund

BIBLIOGRAPHY

BIBLIOGRAPHY
Layman’s Guide to Mutual Funds By “OUTLOOK”

Mutual Funds Primer By “ECONOMIC TIMES”
www.amfiindia.com
www.kotakmutual.com
www.reliancemutual.com


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DISSERTATION REPORT

A COMPARATIVE STUDY OF ASSET

SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT

SUBMITTED BY: SUBMITTED TO:

INSTITUTE OF MANAGEMENT STUDIES-DEHRADUN

Institute Of Management Studies, Dehradun 1

I have the pleasure in certifying that Miss. SHWETA BHANDARI is a

She has completed her project work entitled A COMPARATIVE STUDY OF

This project fulfils the requirement of the curriculum prescribed by Uttarakhand

Institute Of Management Studies, Dehradun 2

Institute Of Management Studies, Dehradun 3

Institute Of Management Studies, Dehradun 4

4. OBJECTIVE OF THE STUDY 5

5. INTRODUCTION OF MUTUAL FUND 7

7. DATA ANALYSIS AND INTERPRETATION 55

9. LIMITATIONS OF THE STUDY 78

10. SUGGESTIONS AND CONCLUSIONS 80

Institute Of Management Studies, Dehradun 5

Institute Of Management Studies, Dehradun 6

The main objectives of the project undertaken were:

Institute Of Management Studies, Dehradun 7

Institute Of Management Studies, Dehradun 8

Mutual Fund Operation Flow Chart

Institute Of Management Studies, Dehradun 9

Institute Of Management Studies, Dehradun 10

i. Diversification: A proven principle of sound investment is that of diversification

Institute Of Management Studies, Dehradun 13

iii. Liquidity of Investment: A distinct advantage of a mutual fund over other

v. Safety of Investment: Besides depending on the expert supervision of fund

Institute Of Management Studies, Dehradun 14

Institute Of Management Studies, Dehradun 15

First Phase - 1964-87(Unit Trust of India)

Institute Of Management Studies, Dehradun 16

Second Phase -1987-1993 (Entryof Public Sector Funds)

Third Phase - 1993-2003 (Entry of Private Sector Funds)

Institute Of Management Studies, Dehradun 17

Fourth Phase - since February 2003

Institute Of Management Studies, Dehradun 18

Institute Of Management Studies, Dehradun 19

Institute Of Management Studies, Dehradun 20

A mutual fund scheme can be classified into open-ended or closed-ended scheme

Institute Of Management Studies, Dehradun 21

Schemes according to Investment objective:

A scheme can also be classified as growth scheme, income scheme, or balanced

1.Growth Oriented Schemes :

2. Income/Debt oriented Scheme :

Institute Of Management Studies, Dehradun 22

4.Money Market or Liquid Fund:

1. Tax Saving Fund:

Institute Of Management Studies, Dehradun 23

b. Sector Specific Schemes:

Institute Of Management Studies, Dehradun 24

Institute Of Management Studies, Dehradun 25

Institute Of Management Studies, Dehradun 26

Institute Of Management Studies, Dehradun 27

The advantages of investing in a Mutual Fund are:

Institute Of Management Studies, Dehradun 28

Institute Of Management Studies, Dehradun 29

Institute Of Management Studies, Dehradun 30

• Fees and commissions

Institute Of Management Studies, Dehradun 31

LEGAL STRUCTURE OF MUTUAL FUNDS