This action might not be possible to undo. Are you sure you want to continue?
Introduction to Portfolio Management
Investing in securities such as shares, debentures, and bonds is profitable as well as exciting. It is indeed rewarding, but involves a great deal of risk and calls for scientific knowledge as well artistic skill. In such investments both rationale and emotional responses are involved. Investing in financial securities is now considered to be one of the best avenues for investing one savings while it is acknowledged to be one of the best avenues for investing one saving while it is acknowledged to be one of the most risky avenues of investment. “It is rare to find investors investing their entire savings in a single security. Instead, they tend to invest in a group of securities. Such a group of securities is called portfolio”. Creation of a portfolio helps to reduce risk, without sacrificing returns. Portfolio management deals with the analysis of individual securities as well as with the theory and practice of optimally combining securities into portfolios. An investor who understands the fundamental principles and analytical aspects of portfolio management has a better chance of success.
An investor considering investment in securities is faced with the problem of choosing from among a large number of securities and how to allocate his funds over this group of securities. Again he is faced with problem of deciding which securities to hold and how much to invest in each. The risk and return characteristics of portfolios. The investor tries to choose the optimal portfolio taking into consideration the risk return characteristics of all possible portfolios. As the risk return characteristics of individual securities as well as portfolios also change. This calls for periodic review and revision of investment portfolios of investors. An investor invests his funds in a portfolio expecting to get good returns consistent with the risk that he has to bear. The return realized from the portfolio has to be measured and the performance of the portfolio has to be evaluated. It is evident that rational investment activity involves creation of an investment portfolio. Portfolio management comprises all the processes involved in the creation and maintenance of an investment portfolio. It deals specifically with the security analysis, portfolio analysis, portfolio selection, portfolio revision & portfolio evaluation. Portfolio management makes use of analytical techniques of analysis and conceptual theories regarding rational allocation of funds. Portfolio management is a complex process which tries to make investment activity more rewarding and less risky.
Generally old people are more sensitive towards safety. The selection of portfolio under different objectives are dealt subsequently Objectives and asset mix If the main objective is getting adequate amount of current income. sixty percent of the investment is made in debt instruments and remaining in equity.Selection of Portfolio The selection of portfolio depends upon the objectives of the investor. Growth of income and asset mix Here the investor requires a certain percentage of growth as the income from the capital he has invested. Capital appreciation and Asset Mix It means that value of the investment made increases over the year. Investment in real estate can give faster capital appreciation but the problem is of liquidity. The debt may be included to minimize risk and to get tax exemption. Safety of principle and asset mix Usually. The proportion of equity varies from 60 to 100 % and that of debt from 0 to 40 %. In the capital market. . the value of the shares is much higher than the original issue price. the risk adverse investors are very particular about the stability of principal. Proportion varies according to individual preference.
Diversification Once the asset mix is determined and risk – return relationship is analyzed the next step is to diversify the portfolio. .Risk and return analysis The traditional approach of portfolio building has some basic assumptions. more return. An investor wants higher returns at the lower risk. The main advantage of diversification is that the unsystematic risk is minimized. So while making a portfolio the investor must judge the risk taking capability and the returns desired. But the rule of the game is that more risk.
They generally advocated the use of different ratios for this purpose. The other major method adopted was the study of stock price movement with the help of price charts. although most of the writers adopted different ways to publish there data. Wo odlock in 1900. John Moody in his bo ok ―The Art of wall Street Investing‖. strongly su p p orted the use of financial ratios to know the worth of the investment. Many factors have contributed to the existence and development of . Dow. There investment strategy was build around is essentially a systematic method of maintainin g one‘s efficiently. In the early years of the century analyst used financial statements to find the value of the securities. It evolved during 1900-1902 when Charles H. This method later on was known as Technical Analysis. the founder of the Dow Jones and Co.Evolution of Portf olio M anagement Portfolio management in vestment the concept. A bo oklet entitled ―Th e Anatomy of the R ailroad ‖ was pub lished b y Thomas F. As the time progressed this method became very important in the investment field. The proposed type of analysis later on became the ―common-size‖ analysis. presented his view in the series of editorials in the Wall Street Journal in USA. The first to be analyzed using this was Railroad Securities of the USA. The advocates of technical analysis believed that stock prices movement is ordered and systematic and the definite pattern could be identified.
the identification of the trend and pattern in the stock price movement. .
The foundation of modern portfolio theory was laid by Markowitz. His theory is known as Elliot Wave Theory. which was highly sought after. Investment management was an art and needed skills. As a result the investments market became safer place to invest and the people in different income group started investing. Francis the development of investment management can be traced chronologically through three different phases. Dood was widely publicized and publcly acclaimed. Elliot who pu bilshed a bo ok in the ye ar 1 9 3 8titled ―The Wave Principle‖. The phase was of professionalism. i Analysis‖ in They published a bo ok ―Security 1934. Second phase began in the year 1930. There research work was considered first work in the field of security analysis and acted as the base for further study. After coming up of the Securities Act. Third phase was known as the scientific phase. The result of this was the stock exchange crash in the year 1929. During this time period pools and corners were used for manipulation. First phase is known as Speculative Phase. During this period the research work of Benjamin Graham and David L. Investors began to analyze the security before investing. His pioneering work on portfolio management was described in his article in the Journal of Finance in the year 1952 and subsequent . Price manipulation was resorted to by the investors. but a cake of few rich people. According to J. They are considered as pioneers of security analysis as a discipline. Investment was not a wide spread activity. the investment industry began the process of upgrading its ethics. Finally the daring speculative ventures of investors were declared illegal in the US by the Securities Act of 1934. After analyzing 7 5 years data of share price.C. establishing standard practices and generating a good public image. The process is speculative in nature. he concluded that the market movement was quite orderly and followed a pattern of waves.Another prominent author who supported the technical analysis was Ralph N.
books published later on. .
with proper knowledge to each and every investor. He provided technical tools for the analysis and selection of optimal portfolio.He tried to quantify the risk. For his work he won the Noble Prize for Economics in the year 1990. He showed how the risk can be minimized through proper diversification of investment which required the creation of the portfolio. The work of Markowitz was extended by the William Sharpe. . John Linter and Jan Mossin through the development of the Capital Asset Pricing Model (CAPM). If we talk of the present the last two phases of Professionalism and Scientific Analysis are currently advancing simultaneously with investment in various financial instruments becoming safer.
With this development investment in securities has gained considerable momentum . Portfolio management is now a common term and is widely practiced in INDIA. with high participation of private players. The markets are dominated by large institutional investors with their diversified portfolios. with rapid computerization. The theories and concepts relating to portfolio management now find there way in the front pages of the financial newspapers and magazines. This reform process has made the Indian industry efficient. A practice which is beyond the reach of the small investor. A large number of mutual funds have come up in the market since 1987. In early 90‘s India embarked on a program of e conom ic liberalization and globalization. increased market transparency. better infrastructure and customer services. but the time has changed now.Role of Portfolio Management There was a time when portfolio management was an exotic term. closer integration and higher volume.
Professional portfolio management. investment consultants. The Securities Exchange Board of India (SEBI) is a regulatory body in INDIA. It ensures that the stock market is free from fraud. . individual investors and big brokers. and of course the main objective is to ensure that the investor‘s money is safe. backed by research is now being adopted by mutual funds.Along with the spread of the securities investment way among Indian investors have changed due to the development of the quantitative techniques.
Safeguarding capital. So financial investments can‘t be reaped withou t proper management. Another significant development in the field of investment management is the results in any desired form.With the advent of computers the whole process of portfolio management has become quite easy. The trend towards liberalization and globalization of the economy has promoted free flow of capital across international borders. Portfolio management is the only way through which an investor can get good returns. Investment is no longer a simple process. It requires a scientific knowledge. This has broadened the scope of investment management. The computer can absorb large volumes of data. while minimizing risk at the same time. Capital Appreciation. Keeping track on performance. . a systematic approach and also professional expertise. Moreover simulation. perform the computations accurately and quickly give out solutions. Choosing optimal mix of securities. Portfolio not only now include domestic securities but foreign too. So portfolio management objectives can be stated as: - Risk minimization. artificial intelligence etc provides means of testing alternative the introduction to Derivatives with the availability of Options and Futures.
The income earned through these investments and the capital appreciation realized by the scheme is shared by its unit holders in proportion to the number of units owned by them. The small savings of all the investors are put together to increase the buying power and hire a professional manager to invest and monitor the money. These could range from shares to debentures to money market instruments. Each Mutual Fund scheme has a defined investment objective and strategy. . The flow chart below describes broadly the working of a mutual fund. The money thus collected is invested by the fund manager in different types of securities depending upon the objective of the scheme. Anybody with an investible surplus of as little as a few thousand rupees can invest in Mutual Funds.WHAT IS MUTUAL FUND?? A mutual fund is a form of collective investment that pools money from many investors and invests the money in stocks. Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. bonds. professionally managed portfolio at a relatively low cost. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified. short-term money market instruments. and/or other securities.
A mutual fund is a managed group of owned securities of several corporatio ns. However the open. the fund manager has less influence because the price of the underlining owned securities has greater influence 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. closed. in proportion to the amount of money invested. the earnings (dividends. Diversification reduces the risk because all stocks may not move in the same direction in the same . These corporations receive dividends on the shares that they hold and realize capital gains or losses on their securities traded. it may be considered as a fluid capital stock. After paying operating costs. Investors are able to buy and sell their shares of the company at any time for a market price. An open-end mutual fund does not have a set number of shares. Investors purchase shares in the mutual fund as if it was an individual security. Investments in securities are spread across a wide crosssection of industries and sectors and thus the risk is reduced. The number of shares changes as investors buys or sell their shares.end market price is influenced greatly by the fund managers. But with close-end funds. A mutual fund may be either an open-end or a closed-end fund.end mutual fund has a fixed number of shares and the value of the shares fluctuates with the market. capital gains or loses) of the mutual fund are distributed to the investors. On the other hand.
.proportion at the same time.
Mutual fund issues units to the investors in accordance with quantum of money invested by them. Government allowed public sector banks and institutions to set up mutual funds. In simple words. Net Asset Value is the market value of the securities held by the scheme. They monitor the performance and compliance of SEBI Regulations by the mutual fund. The profits or losses are shared by the investors in proportion to their investments. Asset Management Company (AMC) and custodian. For example. The mutual funds normally come out with a number of schemes with different investment objectives. Asset Management Company (AMC) approved by SEBI manages the funds by making investments in various types of securities. Investors of mutual funds are known as unit holders. 10 each to the investors. A mutual fund is set up in the form of a trust. if the market value of securities of a mutual fund scheme is Rs 200 lakhs and the mutual fund has issued 10 lakhs units of Rs. The trustees of the mutual fund hold its property for the benefit of the unit holders. which are launched from time to time. The NAV per unit is the market value of securities of a scheme divided by the total number of units of the scheme on any particular date. holds the securities of various schemes of the fund in its custody. Unit Trust of India was the first mutual fund set up in India in the year 1963. NAV of a scheme also varies on day-to-day basis. The concept of mutual fund originated in Belgium by the ―Society Generale de Belgique” in the year 1822. In early 1990s. who is registered with SEBI. which has sponsor. then the NAV . Since market value of securities changes every day. trustees. SEBI formulates policies and regulates the mutual funds to protect the interest of the investors. The trust is established by a sponsor or more than one sponsor who is like promoter of a company. Custodian. The performance of a particular scheme of a mutual fund is denoted by Net Asset Value (NAV). The trustees are vested with the general power of superintendence and direction over AMC. All mutual funds whether promoted by public sector or private sector entities including those promoted by foreign entities are governed by the same set of Regulations.
daily or weekly .20. .depending on the type of scheme. NAV is required to be disclosed by the mutual funds on a regular basis .per unit of the fund is Rs.
TYPES OF MUTUAL FUNDS SCHEMES Mutual fund schemes may be classified on the basis of its structure and its investment objective-: A) By Structure 1) Open-ended Fund .
Being open-ended means that at the end of every day. the investment management company sponsoring the fund issues new shares to investors and buys back shares from investors wishing to leave the fund.An open-end fund is one that is available for subscription all through the year. These do not have a fixed maturity. . Investors can conveniently buy and sell units at Net Asset Value ("NAV") related prices. The term Mutual fund is the common name for an open-end investment company. The key feature of open-end schemes is liquidity.
5-7 years.2) Closed-end Funds A closed-end fund has a stipulated maturity period which generally ranging from 3 to 15 years. 3) Interval Funds Interval funds combine the features of open-ended and close-ended schemes. Such schemes normally invest a majority of their corpus in equities.g. The fund is open for subscription only during a specified period. A close-ended fund or scheme has a stipulated maturity period e. Investors can invest in the scheme at the time of the initial public issue and thereafter they can buy or sell the units of the scheme on the stock exchanges where they are listed. They are open for sale or redemption during pre-determined intervals at NAV related prices. SEBI Regulations stipulate that at least one of the two exit routes is provided to the investor. Investors can invest in the scheme at the time of the initial public issue and thereafter they can buy or sell the units of the scheme on the stock exchanges. It has been proved . The fund is open for subscription only during a specified period at the time of launch of the scheme. some close-ended funds give an option of selling back the units to the Mutual Fund through periodic repurchase at NAV related prices. In order to provide an exit route to the investors. B) By Investment Objective 1) Growth Funds The aim of growth funds is to provide capital appreciation over the medium to long term.
By law. corporate debentures and Government securities. 2) Income Funds The aim of income funds is to provide regular and steady income to investors.that returns from stocks. Money market funds have relatively low risks. These are ideal for investors looking for a combination of income and moderate growth. Growth schemes are ideal for investors for a period of time. 3) Funds Balanced The aim of balanced funds is to provide both growth and regular income. certificates of deposit. Money market funds try to keep their . commercial paper and inter-bank call money. Income Funds are ideal for capital stability and regular income. Returns on these schemes may fluctuate depending upon the interest rates prevailing in the market. the NAV of these schemes may not normally keep pace. compared to other mutual funds (and most other investments). U. corporations. short-term investments issued by the U. 4) Money Market Funds The aim of money market funds is to provide easy liquidity. or fall equally when the market falls. government.S. preservation of capital and moderate income. Such schemes periodically distribute a part of their earning and invest both in equities and fixed income securities in the proportion indicated in their offer documents. they can invest in only certain high-quality. Such schemes generally invest in fixed income securities such as bonds. and state and local governments. These schemes generally invest in safer short-term instruments such as treasury bills. have outperformed most other kind of investments held over the long term. In a rising stock market.S.
That's why "inflation risks" — the risk that inflation will outpace and erode investment returns over time — can be a potential concern for investors in money market funds.net asset value (NAV) — which represents the value of one share in a fund — at a stable $1. Investor losses have been rare. But the NAV may fall below $1. Money market funds pay dividends that generally reflect short-term interest rates. but they are possible.00 per share. and historically the returns for money market funds have been lower than for either bond or stock funds. .00 if the fund's investments perform poorly.
HISTORY OF INDIAN MUTUAL FUND INDUSTRY The mutual fund industry in India started in 1963 with the formation of Unit Trust of India. at the initiative of the Government of India and Reserve Bank the. The history of mutual funds in India can be broadly divided into four distinct phases .
except UTI were to be registered and governed.First Phase – 196487 Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. the mutual fund industry had assets under management of Rs. under which all mutual funds. 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. Second Phase – 1987-1993 (Entry of Public Sector Funds) 1987 marked the entry of non. The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised Mutual Fund Regulations in 1996. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993. Bank of India (Jun 90). The first scheme launched by UTI was Unit Scheme 1964. with many foreign mutual . Punjab National Bank Mutual Fund (Aug 89).6. At the end of 1988 UTI had Rs. SBI Mutual Fund was the first non. a new era started in the Indian mutual fund industry. Indian Bank Mutual Fund (Nov 89). It was set up by the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank of India.UTI. public sector mutual funds set up by public sector banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC). 1993 was the year in which the first Mutual Fund Regulations came into being.UTI Mutual Fund established in June 1987 followed by Can bank Mutual Fund (Dec 87). The industry now functions under the SEBI (Mutual Fund) Regulations 1996 The number of mutual fund houses went on increasing. 700 crores of assets under management. giving the Indian investors a wider choice of fund families. Bank of Baroda Mutual Fund (Oct 92).47. Also. LIC established its mutual fund in June 1989 while GIC had set up its mutual fund in December 1990 At the end of 1993. 004 crores Third Phase – 1993-2003 (Entry of Private Sector Funds) With the entry of private sector funds in 1993.
funds setting up funds in India and also the industry has witnessed several mergers and .
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. there were 29 funds. The Specified Undertaking of Unit Trust of India.29. the mutual fund industry has entered its current phase of consolidation and growth. The second is the UTI Mutual Fund Ltd. assured return and certain other schemes.acquisitions. 1.153108 crores under 421 schemes. and with recent mergers taking place among different private sector funds. 835 crores as at the end of January 2003. The Unit Trust of India with Rs. there were 33 mutual funds with total assets of Rs. As at the end of September. representing broadly.805 crores. 541 crores of assets under management was way ahead of other mutual fund Fourth Phase – since February 2003 In February 2003. conforming to the SEBI Mutual Fund Regulations. GROWTH IN ASSETS UNDER MANAGEMENT . It is registered with SEBI and functions under the Mutual Fund Regulations.44. sponsored by SBI. BOB and LIC.76. 2004. With the bifurcation of the erstwhile UTI which had in March 2000 more than Rs. the assets of US 64 scheme. 21. which manage assets of Rs. 000 crores of assets under management and with the setting up of a UTI Mutual Fund. As at the end of January 2003. PNB. following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated into two separate entities. One is the Specified Undertaking of t he Unit Trust of India with assets under management of Rs.
ORGANISATION OF MUTUAL FUND There are many entities involved and the diagram below illustrates the organizational set up of a mutual fund: .
August 2006.18 45199.20 3120.21 13181.73 1328.09 3844.95 -81. October 2006.70 1307.62 16169.88 -2066.08 7774.44 13296.00 Net Purchase / Sales 900.98 Gross Purchase 11070.46 7682.83 12971.36 -1976.05 -723.55 2403.56 7893. June 2006.96 Gross Purchase 2764.63 143043.91 448.86 9979.97 12700.98 -3795. February 2007.47 7633.43 5023.23 86133.83 63169.59 35355.46 109804. September 2006.72 13512.23 -274.91 10452.42 22700.98 2660. March 2007 (upto 10th) Total (April '06 .74 129676.65 10314.49 10959.41 11853.50 6961.06 3287.29 8488. April 2000 -March 2001.Trends in Transactions on Stock Exchanges by Mutual Funds ( s i nc e January 2000) Equity (Rs in Crores) Time Jan 2000-March 2000.15 8427.91 11227.16 2669.99 16587.75 16987.47 14235.22 9591.62 10351.58 10345.99 4784.67 6800.54 9947.51 -24.94 6334.54 17375.65 7584.24 4427.76 15893.68 22624.60 119696.11 14520.07 9820.05 -1342.78 12098.46 12675.93 62186.23 9944.47 18345.90 12752.83 1627.52 7552.March '07) Debt (Rs in Crores) Gross Sales 11492.06 8906.54 15982.41 2384.42 34059.92 6256.55 .14 9005.19 20142. December 2006.21 4316.01 2124.43 7843.08 93110. May 2006.17 73003.65 -2766.94 Net Purchase / Sales -421. July 2006.14 4568. November 2006.69 -3.25 100435.89 8425.22 12604.55 Gross Sales 1864.64 46663.67 44597.55 49933.96 15386.70 9631.04 11554.44 1339.58 45045.28 12878. April 2001-March 2002. January 2007.02 14302.89 36663.70 10830.88 7612.24 7929.18 8851.29 36801. April 2002-March 2003 April 2003-March 2004 April 2004-March 2005 April 2005-March 2006 April 2006.41 5328.90 8266.43 11643.64 7716.17 33583.41 40469.71 426.38 12985.60 12697.
03.80 796.24 166.03.03.07 07.68 0.23 617.44 338.00 0.03.54 433.55 .07 10.53 2660.76 482.50 524.63 8 2124.15 591.27 327.07 09.76 282.14 528.86 Debt (Rs in crores) Gross Net Purchas Gross Purchas es Sales e s/ Sales 845.03.56 578.00 4568.74 -34.20 717.60 690.93 904.53 243.95 407.00 4.53 -4.02 -384.53 0.74 19.07 06.10 68.34 867.07 02.07 05.Trends in Transactions on Stock Exchanges by Mutual Funds Transacti o n Date 01.57 -125.58 347.50 981.07 08.07 Total Equity (Rs in crores) Gross Net Purchas Gross Purchas es Sales es/ Sales 767.76 -379.73 389.99 -39.64 238.32 707.54 460.42 1148.0 4784.00 0.24 272.81 533.18 411.03.74 0 -723.92 -29.6 3844.25 567.38 541.92 8.03.03.12 442.
as well as education. internally as well as externally.Union Budget 2007-08 & the Mutual Fund Industry The 2007-08 budget presented by the Finance Minister was also a low impact budget. Chinese markets alone lost around 9% over the day. The reduction in fiscal deficit is also a positive step and the government will also increase spending on education by 34%. Markets have seen a major correction over the last few trading sessions. The budget had a few shockers when the dividend distribution tax was hiked. On 28 th the markets was hit hard from both sides. compared with the last year. The Indian markets could not sustain the beating it got from both ends and saw the maximum decline witnessed in . and on the other side the global market saw major meltdown with the Asian market were beaten the most. which will certainly give a long term boost to the growth of the economy. whose fundamental message was for overall growth of the economy and a positive emphasis to be put on agricultural and rural development.
. The market was around 200 points down after the markets opened for the day.the last eight months.
as per Finance Minister FBT on ESOP is still under notification. The Indian Mutual Fund industry already have schemes which are sector specific and invest into infrastructure sector through equities. The announcement of MAT of 11. The DDT for the money market and liquid mutual funds has been proposed to be brought at par at 25%. Now after this particular Funds can directly invest into infrastructure projects. Secondly. because of bringing both the sector under MAT. Secondly SEZs are still MAT free. but saw some recovery. and to some extent IT services also got hit. FM also allowed delivery based short selling for institutional participants. Another proposal put up by the Finance Minister was for Mutual Funds to play a bigger role in infrastructure development by launching and operating dedicated infrastructure funds which would directly invest into core sector projects. The FM said that this was being done to restrict the arbitrage opportunities used by these schemes. In India. The Indian Mutual Fund industry also suffered on announcement of the hike in dividend distribution tax. Among the major sectors Cement is clearly the most hit.3 % on IT companies was misinterpreted by the market on the budget day. in the next trading day when markets realized that MAT can be used as a deferred tax asset by IT companies post FY 2010 to offset taxes.5% for retail investor and 23% for institutional investors. Currently the rate is 12.But the announcement of the FM to hike dividend distribution tax saw another fall of more than 300 points which the markets was not able to recover till the end of the day. Mostly in all developed countries short selling is allowed. till recently only the retail investors proposal Mutual . by responding in negative. Hence the impact is not severe as was thought on the budget day.
Along with FII. Currently the industry has quite a few mutual fund schemes which invest dedicatedly abroad.8 lakh per annum. The individuals who provide investment fund management advisory services will now have to pay service tax. FM has proposed to bring the asset management services offered by individuals under the service tax bracket. The managers will have to register themselves with the Central Excise department and have to pay service tax. the budget other than the DDT hike for the liquid and the money market mutual funds and the infrastructure funds didn‘t have much in store for the Mutual Fun d industry. On a whole. increased savings and building of manpower capabilities. Mutual Fund houses are also allowed for delivery based short selling. if their service fee is more than Rs.were allowed to enjoy this. . To summarize. the Budget will sustain high economic growth through larger investments. Along with the above the FM also proposed for the retail investor to invest abroad through Mutual Funds. A few more schemes invest partially abroad.
which every open-end mutual fund must make available to a potential investor before accepting his or her money. These restrictions. The most common are cash. or maturity of the bonds (short or long term). These are known as sector funds. Most mutual funds' investment portfolios are continually adjusted under the supervision of a professional manager. and bonds. for instance. which invest solely in real estate or mortgages. stock. corporations. such as technology or utilities. who forecasts the future performance of investments appropriate for the fund and chooses the ones which he or she believes will most closely match the fund's stated investment managers. and policies are found in the prospectus. can invest primarily in the shares of a particular industry. but there are hundreds of sub-categories. A mutual fund is administered through a parent management company. both US and foreign securities (global funds). Both stock and bond funds can invest in primarily US securities (domestic funds). objective. investment-grade corporate bonds). Stock funds. and mutual funds are allowed to hold shares in REITs. there do exist real estate investment trusts.USAGE OF MUTUAL FUND Mutual funds can invest in many different kinds of securities. Bond funds can vary according to risk (high yield or junk bonds. or REITs. By law. type of issuers (government agencies. permissions. However. which may hire or fire fund . or primarily foreign securities (int ernational funds). or municipalities). mutual funds cannot invest in commodities and their derivatives or in real estate. A mutual fund may restrict itself in other ways.
depending on how the fund earned it. Mutual fund distributions of tax-free municipal bond income are also tax-free to the shareholder. ADVANTAGES AND DISADVANTAGES OF MUTUAL FUND ADVANTAGES Professional Management Mutual Funds provide the services of experienced and skilled professionals. Diversification Mutual Funds invest in a number of companies across a broad cross-section of industries and sectors. Unlike most other types of business entities. Taxable distributions can either be ordinary income or capital gains. the type of income they earn is often unchanged as it passes through to the shareholders. proportion. they are not taxed on their income as long as they distribute substantially all of it to their shareholders. This diversification reduces the risk because seldom do all stocks decline at the same time and in the same own.Mutual funds are subject to a special set of regulatory. You achieve this diversification through a Mutual Fund with far less money than you can do on your Convenient Administration . accounting. backed by a dedicated investment research team that analyses the performance and prospects of companies and selects suitable investments to achieve the objectives of the scheme. and tax rules. Also.
the investor gets the money back promptly at net asset value related prices from the Mutual Fund. Low Costs Mutual Funds are a relatively less expensive way to invest compared to directly investing in the capital markets because the benefits of scale in brokerage. Return Potential Over a medium to long-term. the proportion invested in each class of assets and the fund manager's investment strategy and outlook. delayed payments and follow up with brokers and companies. In closed-end schemes. Mutual Funds have the potential to provide a higher return as they invest in a diversified basket of selected securities. Liquidity In open-end schemes. the units can be sold on a stock exchange at the prevailing market price or the investor can avail of t he facility of direct repurchase at NAV related prices by the Mutual Fund. Transparency You get regular information on the value of your investment in addition to disclosure on the specific investments made by your scheme.Investing in a Mutual Fund reduces paperwork and helps you avoid many problems such as bad deliveries. . custodial and other fees translate into lower costs for investors. Mutual Funds save your time and make investing easy and convenient.
regular withdrawal plans and dividend reinvestment plans. . Flexibility Through features such as regular investment plans. A mutual fund because of its large corpus allows even a small investor to take the benefit of its investment strategy. Choice of Schemes Mutual Funds offer a family of schemes to suit your varying needs over a lifetime. Well Regulated All Mutual Funds are registered with SEBI and they function within the provisions of strict regulations designed to protect the interests of investors. Affordability Investors individually may lack sufficient funds to invest in high-grade stocks. you can systematically invest or withdraw funds according to yo ur needs and convenience. The operations of Mutual Funds are regularly monitored by SEBI.
Costs Despite Negative Returns Investors must pay sales charges, annual fees, and other expenses (which we'll discuss below) regardless of how the fund performs. And, depending on the timing of their investment, investors may also have to pay taxes on any capital gains distribution they receive — even if the fund went on to perform poorly after they bought shares.
Lack of Control Investors typically cannot ascertain the exact make-up of a fund's portfolio at any given time, nor can they directly influence which securities the fund manager buys and sells or the timing of those trades.
Price Uncertainty With an individual stock, you can obtain real-time (or close to real-time) pricing information with relative ease by checking financial websites or by calling your broker. You can also monitor how a stock's price changes from hour to hour — or even second to second. By contrast, with a mutual fund, the price at which you purchase or redeem shares will typically depend on the fund's NAV, which the fund might not calculate until many hours after you've placed your order. In general, mutual funds must calculate their NAV at least once every business day, typically after the major U.S. exchanges close.
HOW TO INVEST IN MUTUAL FUND??
Step One - Identify your Investment needs
Your financial goals will vary, based on your age, lifestyle, financial independence, family commitments, and level of income and expenses among many other factors. Therefore, the first step is to assess your needs. You can begin by defining your investment objectives and needs which could be regular income, buying a home or finance a wedding or educate your children or a combination of all these needs, the quantum of risk you are willing to take and your cash flow requirements.
Step Two - Choose the right Mutual Fund
thus bringing down your average cost per unit. Some factors to evaluate before choosing a particular Mutual Fund are the track record of the performance of the fund over the last few years in relation to the appropriate yardstick and similar funds in the same category. By investing a fixed sum each month. Step Four regularly Invest The best approach is to invest a fixed amount at specific intervals. you buy fewer units when the price is higher and more units when the price is low. The offer document of the scheme tells you its objectives and provides supplementary details like the track record of other schemes managed by the same Fund Manager. Step Three . You may consider investing in a combination of schemes to achieve your specific goals. The power of compounding .Select the ideal mix of Schemes Investing in just one Mutual Fund scheme may not meet all your investment needs. the dividend yield and the degree of transparency as reflected in the frequency and quality of their communications. Other factors could be the portfolio allocation. If you start now. say every month. you will make more than if you wait and invest later. For selecting the right scheme as per your specific requirements. Step early Five- Start It is desirable to start investing early and stick to a regular investment plan. You can also avail the systematic investment plan facility offered by many open end funds.The important thing is to choose the right mutual fund scheme which suits your requirements. This is called rupee cost averaging and is a disciplined investment strategy followed by investors all over the world.
2) Receive information about the investment policies. . financial position and general affairs of the scheme. You may reap the rewards in the years to come. growth oriented or income seeking RIGHTS OF A MUTUAL FUND UNIT HOLDER A unit holder in a Mutual Fund scheme governed by the SEBI (Mutual Funds) Regulations is entitled to: 1) Receive unit certificates or statements of accounts confirming the title within 6 weeks from the date of closure of the subscription or within 6 weeks from the date of request for a unit certificate is received by the Mutual Fund.whether starting a career or retiring.lets you earn income on income and your money multiplies at a compounded rate of return.The final step All you need to do now is to for online application forms of various mutual fund schemes and start investing. conservative or risk taking. Mutual Funds are suitable for every kind of investor . investment objectives. Step Six .
5 percent of the amount invested in a fund. There are also other criticisms levied against mutual funds as a consequence of the first criticism. 5). 4) Vote in accordance with the Regulations to: Approve or disapprove any change in the fundamental investment policies of the scheme. an upfront or deferred fee as high as 8. CRITICISM OF MUTUAL FUNDS The primary criticism of actively managed mutual funds comes from the historical fact that. A so -called flat fee.3) Receive dividend within 42 days of their declaration and receive the redemption or repurchase proceeds within 10 days from the date of redemption or repurchase. Firstly. annual fee or wrap fee does very little for an investor other than . The dissenting unit holder has a right to redeem the investment. Change the Asset Management Company. Inspect the documents of the Mutual Funds specified in the scheme's offer document. which are likely to modify the scheme or affect the interest of the unit holder. Wind up the schemes. One critique covers the concept of the sales load. some critics do not believe that this should be charged on a percentage basis instead of a flat fee basis. over long periods of time. most have not returned as much as an index fund would.
insure that they will pay an advisor a commission for as many years as their relationship exists. It helps .
the harder it is to invest.5 percent of the funds total assets. Other practices of mutual funds have been criticized from time to time. Thus it can be more profitable to the fund to try and allow it to grow as large as possible. it also could motivate the fund to focus on attracting more and more new investors. such as funds allowing market timing.5-2. as the new investors adding money to the fund would also cause the assets of the fund t o increase. such as the salary for the manager. but yet visibly attracting money. Fund companies typically make money by charging a management fee of anywhere between 0. hurting its existing investors' performance. Thus a fund company can be focused on attracting new customers. since a well performing fund would cause the amount invested in the fund to rise and thus increasing the fee earned. Many investors believe however that the larger the pool of money one works with. Thus the harder it becomes for the mutual fund to perform well. Although theoretically this could motivate them to cause the fund to perform well.an advisor create predictable (and since most investments trend upwards) increasing income flow. A great deal of the funds costs are flat and fixed costs. non-gifting investment bank would charge . More recent criticisms have focused on the fund manager s accepting extravagant gifts in exchange for trading stocks through certain investment banks. instead of limiting its assets. the advice given seemingly would be bad advice. who presumably overcharge the fund compared to what another. Mutual funds are also seen by some to have a systemic conflict of interest with regards to their size. Secondly this payment for advice and other services seems dubious to these critics because with so many mutual funds underperforming.
Call term + Objective Risk Investment Portfolio Who should invest Investmen t horizon Treasury Certificate Bills. Those park their of who 2 days 3 weeks funds in current accounts shortbank or .TABLE OF MUTUAL FUND SCHEMES Mutua l Fund Type Liquidity Money Market Moderate Income Reservation of Capital + Negligible Deposits. Commercial Papers.
CDs. High Risk Stocks Security Credit Risk & Interest Rate Risk Liquidity Moderate Income + Little Interes t Rate Call Money. Shortterm Predominantly Debentures. 3 years plus look. Corporate Bonds Interest Rate Risk Governmen t securities Salaried conservative investors Aggressive investors Salaried conservative investors & More than 9 12 & months 12 months & more Those with surplus short-term funds 3 weeks 3 months 3 years with long plus term out . Commercial Papers. Government securities.Shortterm Funds (Floatin g shortterm) Bond Funds Regular (Floatin Income g LongGilt Funds & Income Equity Funds Long-term Capital Appreciatio n To generate Index Funds returns that are commensurat e with returns of Balance Growth d Funds & Regular index performanc e Capital Market Risk Balanced ratio of equity debt and & Aggressive Moderate 2 years plus NAV varies Portfolio with indices like NIFTY etc Aggressiv BSE. e investors. Treasury Bills.
Income and Interest Risk funds to ensure higher returns at lower risk FREQUENTLY USED TERMS Net Asset Value (NAV) Net Asset Value is the market value of the assets of the scheme minus its liabilities. Per unit NAV is the net asset value of the scheme divided by the number of units outstanding on the Valuation Date. It is calculated as Total market value of the assets or securities – liabilities in the portfolio of the fund .
25% for Rs. 2 Crores. It may include a sales load.25% and is charged if the investment is redeemed before six months from the date of investment in a mutual fund. Repurchase or „Back-end‟ Load It is a charge collected by a scheme when it buys back the units from the unit holders. 1. Redemption Price It is the price at which open-ended schemes repurchase their units and close-ended schemes redeem their units on maturity. However the load structure varies from company to company. This is also called Bid Price. Repurchase Price It is the price at which a close-ended scheme repurchases its units and it may include a back-end load. It is also called as Offer Price. 2 Crore to Rs.Number of fund‘s units (shares) outstanding Sale Price It is the price you pay when you invest in a scheme. It is 2. Such prices are NAV related.25% for subscription below Rs. Also called as ‗Front-end‘ load . Generally it is 2. . 5 Crore. Schemes that do not charg e a load are called ‗No Load‘ schemes. Sales Load It is a charge collected by a scheme when it sells the units. 5 Crore and nil above Rs.
RESEARCH METHODOLOGY RESEARCH:- .
To compare the return of a mutual fund using different investment ways. it refers to a scientific and systematic search for pertinent information on a specific topic. . RESEARCH METHODOLOGY:- Research methodology is a way to solve the problem scientifically and systematically. Research Objectives To compare performance of different mutual funds in last 1 year. we not only talk of the research methods but also the comparison of the logic behind the method we use in the context of our research study and explain why we are using a particular method and why not others. In this we study the various steps that are generally adopted by researcher in studying his research problem along with the logic behind them.Research is a voyage of discovery. a movement from unknown to known. In common parlance. When we talk about research methodology. To develop a new investment way in mutual funds. observation. It is the pursuit of truth with the help of study. RESEARCH METHOD:- Research methods may be understood as all those method / techniques that are used by the researcher during the course of studying his research problem. comparison and experiment.
SECONDARY DATA COLLECTION: Secondary data have been collected from various Books and websites. METHOD OF DATA COLLECTION: - The study made in use secondary sources. RESEARCH DESIGN: - A research design is the arrangement of conditions for collection and analysis of data in a manner that aims to combine relevance to the research purpose with economy in procedure. To compare the different portfolios being maintained by selected mutual funds. To understand the concept and importance of Mutual Fund & Portfolio Management in today‘s scenario.It refers to the technique or the procedure the researcher would adopt in selecting items for . SAMPLING DESIGN: - A sample design is a definite plan for obtaining a sample from a given population .. The research design used in my study is basically exploratory in nature.
a good experience for the teacher and a key for the industrial pioneers in understanding and facing challenges. pie charts etc are used. Judgment sampling has been adopted to select the Mutual Funds. This is essential for a scientific study and for insuring that we have all relevant data for compariso n and analysis. After that interpretations are drawn and finally.the sample i. The term analysis refer to the computation of certain measures along with searching for patterns of relationship that exist among data groups .To analyze the data percentages.e. the size of the sample. Technically speaking processing implies editing. making contemplated . I hope the study will be interesting for a layman. a list of suggestions and recommendations is put forward. graphs. SAMPL E SIZE: Nine ANALYSIS OF DATA: - The data after collection has to be processed and analyzed with the outline laid for the purpose at the time of developing the research plan. classification and tabulation of collected data so that they are amenable to analysis. coding.
Introduction to the Topic .
Systematic Investment Plan. Further returns of different investing ways will be compared in the same mutual fund like One Time Investment. Using some calculations performance will be compared. For this there Net Asset Values is used and portfolio maintained is studied. Further study would be done to find out that can we develop a new way of investing in them and if yes than what the pre requisite for its implementation. The whole study will be carried out in a manner like firstly different mutual funds will be selected. In it 9 mutual funds have been selected and there performance is compared in last 1 year starting from 1 February 2006 to 31 January 2007. Than there NAV‘s will b e no ted from 1 February 2006 to 31 January 2007.The topic of study is “Comparative Analysis of Different Mutual Funds and Investing Ways”. Using the Fact Sheet of the selected mutual fund minute details of each will be studied. The Mutual Funds under study are as follows: SBI MAGNUM CONTRA RELIANCE GROWTH FUND FRANKLIN INDIA PRIMA FUND HDFC EQUITY FUND DSPML OPPORTUNITIES FUND KOTAK BOND REGULAR FUND JM INCOME FUND LIC MF BOND st st st st .
UTI BOND .
SBI MUTUAL FUND .
It is the top wealth creator for the year 2006-07. It has given compounded annual returns of 67% in past 5 years against the category average of 46%. Domestic-63% Sponsor Society State Bank of India. The fund has mainly shifted its focus to large cap space. This prudence. along with its successful bet on banking stocks has helped the fund out perform the category. It also contains a large cash component of Rs 120 Crore. which amounts to about 10% of its portfolio.Incorporated Ownership Ownership Pattern 29 JUNE 1987 Public Foreign . General Asset Management Fund The fund takes contrarian call on the markets. .37%.
Magnum Contra-G Fund Rating .
40 6.1 8 37.83 13.15 8.89 3.9 0 Net Assets (Cr) (28/02/07) 1.4 7 33.91 (06/02/07) 25.08 -0.02 (14/06/06) Equity: Diversified Open End July 1999 Below Average Year to Date 1-Month 3-Month 1-Year 3-Year 5-Year -7. Benchmark BSE 100 Relative Performance (Fund Vs Category Average) Portfolio Security Praj Industries Reliance Industries Hindustan Zinc Instrument % Net Assets Equity Equity Equity 4.97 4.Current Stats & Profile Latest NAV 34.78 Returns upto 1 year are absolute and over 1 year are annualized.17 57.66 53.78 .60 8.65 -9.49 1.63 (12/03/07) Trailing Returns As on 12 Mar 2007 Fund Categor y 52-W eek High 52-W eek Low Fund Category Type Launch Date Risk Grade 39.448.
09 1.26 1.81 1.8 1. Ashok Leyland Merck Ltd.1 3. Motor Industries Co.95 4.97 2.63 4.61 2.Mahindra & Mahindra Jai Prakash Associates Aditya Birla Nuvo India Cements F A G Bearings India Jai Prakash Associates Motor Industries Co.88 2. Kansai Nerolac Paints Torrent Pharmaceuticals India Infoline C C L Products (I) Cummins India T V S Motor Co.19 4.53 2.84 2.48 2.24 Basic/Engineering .1 2.42 4.85 2.72 1. Esab India Federal Bank Sundaram Fasteners Ruchi Soya Inds. Sesa Goa Raymond Indraprastha Gas Infotech Enterprises Ansal Prop & Infra TIL Ciba Speciality Chemicals Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity 3.47 5.31 1.49 7.73 3.27 1.36 1.31 3.86 1.
21 Metals & Metal Products 1.13 FMCG 5.53 Basic/Engineerin Financial Service % Coposition Health Care Automobil Services Energy Comp osition of Vario us Sectors Secto r .Comp osition of Vario us Sectors 18 16 14 12 10 8 6 4 2 0 Financial Services 3.61 Health Care 12.77 Technology 2.62 Construction 12.83 Metals & Metal Diversified 13.8 Textiles 1.6 Services 5.37 Automobile Top Sectors in Portfolio 11.72 Energy 10.
. as the Settlor/Sponsor and Reliance Capital Trustee Co. The name of Reliance Capital Mutual Fund has been changed to Reliance Mutual Fund effective from March 2004. Limited (RCTCL). as the Trustee.RELIANCE MUTUAL FUND Incorporated Ownership Ownership Pattern 30 June 1995 Private Foreign . Reliance Mutual Fund was formed to launch various schemes under which units are issued to the Public with a view to contribute to the capital market and to provide investors the opportunities to make investments in diversified securities. 1995. RMF has been registered with the Securities & Exchange Board of India (SEBI) vide registration number MF/022/95/1 dated June 30. 1882 with Reliance Capital Limited (RCL).0%. Domestic-100% Sponsor About Reliance Mutual Fund Reliance Capital Ltd Reliance Mutual Fund (RMF) was established as a trust under the Indian Trusts Act.
The main objectives of the Trust are: To carry on the activity of a Mutual Fund as may be permitted at law and formulate and devise various collective Schemes of savings and also ensure liquidity of investments for people in India and abroad and investments for the Unit holders; To deploy Funds thus raised so as to help the Unit holders earn reasonable returns on their savings and To take such steps as may be necessary from time to time to realize the effects without any limitation.
RELIANCE GROWTH FUND It is a mid cap fund with around 75% in mid cap and a maximum of 25% in large caps. Large cap exposure gives fund tremendous liquidity but not in bearish time. It uses opportunistic style of investment i.e. looking at companies that are scalable in sectors with growth and management passion to grow. It invests nearly in 60 stocks with a bottom up approach. In top holdings, 5.3% of the assets are invested in Reliance Industries. The fund also invests across sectors such as steel, infrastructure, textile & cement, which move with economic and GDP growth. It is also one of the wealth creators in the year 2006-07. Last year return of this fund is 34.22%. FUND DATA Structure Scheme Inception Date Corpus Minimum Investment Fund Manager Open-ended Equity Growth
October 8, 1995 Rs 3214.06 crore (January 31, 2007) Rs 5,000 Mr. Sunil Singhania
Entry Load Exit Load Benchmark SPECIAL FEATURE INVESTMENT OBJECTIVE
<2cr - 2.25%; >_2cr<5cr - 1.25 %;> _5cr - Nil Nil BSE 100 Index Reliance Any Time Money Card To achieve long-term growth of capital by investing in Equity and equity related securities through a research- Based investment approach.
PORTFOLIO OF RELIANCE GROWTH FUND Holdings Equities JSW Steels Ltd Reliance Industries Ltd Bharat Earth Movers Ltd Jindal Saw Ltd Divis Laboratories Ltd Jaiprakash Associates Northgate Technologies Ltd Gujarat State Fertilizers & Chemicals Ltd Cambridge Solutions Ltd Adani Enterprises Ltd Bombay Dyeing & Mfg Company Ltd Bank Of Baroda Escort India Ltd Jain Irrigation Systems Ltd Strides Arcolabs Ltd Lupin Ltd HCL Technologies Ltd State Bank Of India Greaves Cotton Ltd Dena Bank Weightage (%) 87.87 4.51 3.93 3.74 3.44 2.84 2.63 2.55 2.22 2.15 2.03 2.03 1.94 1.94 1.93 1.89 1.87 1.82 1.77 1.61 1.55
AIA Engineering Ltd United Phosphorous Ltd Jindal Steel & Power Ltd Crompton Greaves Ltd Maharashtra Seamless Ltd Radico Khaitan Ltd Gujarat Mineral Development Corporation Bharati Shipyard Ltd Orient Paper & Industries Ltd Shivvani Oil And Gas Exploration Allcargo Global Logistics Ltd NIIT Technologies Ltd Mahanagar Telephone Nigam Ltd Bharat Petroleum Corp Ltd Gammon India Ltd Tamilnadu Newsprint Ltd GHCL Ltd Hexaware Technologies Ltd Tata Motors Educomp Solutions Ltd Equity < 1% Of Corpus Derivatives, Cash & Other Receivables Grand Total SECTOR ALLOCATION Industry Ferrous Metals Industrial Capital Goods Software Pharmaceuticals
1.52 1.47 1.45 1.45 1.40 1.40 1.39 1.38 1.34 1.29 1.26 1.24 1.19 1.17 1.16 1.11 1.06 1.03 1.02 1.02 14.11 12.13 100.00
% Allocation 10.81 9.72 8.08 6.89
11 199.39 1.Services Paper Textiles – Cotton 5.22 229. February 01.39 2. 2006 Net Asset Value 201.55 2.51 193. 2006 Thursday.94 3. 2006 Wednesday. August 01.2 218.72 2.93 2.68 215.47 1.75 251. May 01. June 01.29 1.03 1. 2006 Monday.18 210.97 Net Asset Value Date Wednesday.12 .11 0.14 3. 2006 Tuesday. July 03. 2006 Friday.27 5.54 3.Banks Petroleum Products Chemicals Construction Auto Industrial Products Fertilizers Consumer Non Durables Auto Ancillaries Information Technology Trading Pesticides Minerals/Mining Cement Oil Transportation Telecom . 2006 Monday.19 1.11 4. April 03.53 4. September 01.26 1.34 1. 2006 Monday. March 01.
Its NAV shoot up from Rs 19.e.95 in 2001 to Rs. December 01. October 03. The fund holds about Rs 172 Crore as cash.Tuesday.47 250.04% of its net assets.78 270. 2007 234. 2006 Wednesday.23 261. 174. neither pure growth nor value addition.56%.4 1 8 Crore. It is also one of the wealth creator funds. The fund holds around 40 stocks in its portfolio. The corpus of the fund is Rs 2. Fund Style . 2006 Friday. If Rs. Last year return of this fund is 20. 1. 2006 Tuesday.05 FRANKLIN INDIA PRIMA FUND Fund FRANKLIN India Prima Fund is a 12 year old diversified equity fund with a specific focus on mid/small cap stocks from India‘s emergin g businesses. The in vestment approach is style-agnostic i. January 02.000 is invested every month for last five years than there present value would have been Rs 2. The main fe ature of the fund is that it hasn‘t seen heavy redemption pressures throughout its 12 years. This style is chosen keeping in mind that different styles tend to out perform in different market conditions.12 lakh. with the top 10 holdings accounting for 43.84 in 2006. November 01.
51 Year to Date -14.12 37.49 Equity: 3-Month -6.18 Average 5-Year 48.76 -8.08 -8.17 As on 12 Mar 2007 Fund Category 220.47 November 3-Year 35.40 Open 1-Year -2.62 Returns upto 1 year are absolute and over 1 year are annualised.67 % 43.583.78 -1.Fund Facts Asset Allo cat ion Equity 94% Debt Other 0% 6% Portfo lio Concentration Top 3 sectors Top 5 holdings Top 10 holdings 41.52 6.55 1-Month -11.90 % 26.04 % Rating Fund Franklin India Prima-G Current Stats & Profile Trailing Returns Latest NAV (12/03/07) 52-W eek High (16/01/07) 52-W eek Low (14/06/06) Fund Category Diversified Type End Launch Date 1993 Risk Grade 184.90 Return Grade Average Net Assets (Cr) (28/02/07) Above Return Since Launch 24.15 139. Benchmark S&P CNX 500 Relative Performance (Fund Vs Category Average) .51 -- 1.98 33.
47 Equity 5.42 4. Ashok Leyland Merck Ltd.24 Instrument % Net Assets Equity 7.8 1.31 3.72 1.48 2.95 4.1 2.31 1.27 1.85 2.53 2.26 Sector . Ipca Laboratories Kansai Nerolac Paints Torrent Pharmaceuticals India Infoline C C L Products (I) Cummins India T V S Motor Co.84 2.88 2.19 Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity 4. Esab India Federal Bank Sundaram Fasteners Ruchi Soya Inds. Sesa Goa Raymond Indraprastha Gas Infotech Enterprises Ansal Prop & Infra TIL Ciba Speciality Equity 1.81 1.Portfolio Stock Aditya Birla Nuvo India Cements F A G Bearings India Jai Prakash Associates Motor Industries Co.09 1.86 1.61 2.97 2.63 4.1 3.36 1.
72 % Composition Basic/Engineering Health Care Constructio Diversified Financial Services Metals & Metal Products Automobile Technology Services % Comp osition 18 16 14 12 10 8 6 4 2 0 Secto r Net Asset Value Date Wednesday. February 01. April 03.34 Financial Services 3. 2006 Tuesday.56 201. 2006 Monday.62 Construction Top Holdings in Portfolio 12.21 1. March 01.9 162.13 FMCG 5. 2006 Thursday. July 03. 2006 Monday.61 Health Care 12.75 209.6 Services 5.74 185.8 Textiles 1.48 Chemicals Textiles FMCG . May 01.% Composition 15. 2006 Monday. August 01. 2006 Net Asset Value 179.27 173. 2006 Wednesday.37 Automobile 11.67 Diversified 13. June 01.61 160.77 Technology Metals & Metal Products 2.53 Chemicals 4.
2006 Wednesday. but in long term. November 01. 2006 Tuesday. 117. The main feature of this fund is that it has beaten its category for eight consecutive Software years. bu t has potential to perform in future.602 Top 5 stocks account for2. October 03. 2006 Friday.98 209. Domestic-100% Housing Development Finance Corporation Divis Laboratories Ltd.69 well now . Goods .04 185. the fund will hold on to it. 30 June 2000 Private Foreign .635.0%. Bharti Airtel Ltd. The fund is not having large portfolio with number of stocks between 30– 40. January 02.60 Fund Speak 6.707 2.Friday. September 01. 2006 Tuesday.88 Infosys Technologies Ltd. The Industrial fund is also known for quick sector move.88 216. It is also the wealth creator fund.71 HDFC MUTUAL FUND Incorporated Ownership Ownership Pattern Sponsor Ltd.37The funds investment policy is to buy quality and 35-40%.563. 2007 176. December 01. So even if a sector don‘t perform 6. Pharmaceuticals 87. Bharat Heavy Electricals Ltd. Last year return of this fund is 31% nearly.8 196. The fund doesn‘t offer good returns in 1Capital 2 years. sustainable businesses at a re asonable price.
23 4.843.23 5.000 1.119 125.55 Quantity Market/ Fair Value (Rs.000 Engineering 1.84 Name of Instrument State Bank of India Industry + Banks 140. Goods Portfolio 700.742.33 (a) Listed / awaiting listing on Stock Exchanges .854.955.81 Reliance Industries Ltd.004.60 1.30 4. Lakhs) In % to NAV EQUITY RELATED & Lanco Infratech Ltd Subtotal 48.000 310.000 1.33 0.Telecom Services 80. EQUITY Petroleum 140.59 0.17 5.10 Industrial Capital Crompton Greaves Ltd.87 4.59 125.000 2.
Voltamp Transformers Ltd Phoenix Lamps Ltd.83 825. Tata Motors Ltd.0 2 Software Petroleum 240.000 47.072 75.500 1.18 4.24 Auto Ancillaries 472.367.90 3.5 4 1.1 2 1. Grasim Industries Ltd.88 3.487.Products Apollo Tyres Ltd. Products Auto Textile Products Cement Metals Textile Products Chemicals Engineering Power Auto Ancillaries 325.500 112. Hindustan Petroleum Corporation Ltd.928 224. Birla Corporation Ltd.000 1.88 Durables Non 500.000 1.35 .3 2 2. Sundaram Clayton Ltd.589.82 915. Pharmaceuticals Consumer ITC Ltd.15 Non 900.7 5 1.02 1.1 8 1.3 6 4. Oil & Natural Gas Oil Auto Ancillaries Cement Consumer Hindustan Lever Ltd.726.588.93 4. Kansai Nerolac Paints Ltd.1 6 2.665.45 Corporation Ltd.00 3.37 590.90 164.174.45 507.000 110.670. ISMT Ltd.61 389.55 1.80 2. Hanung Toys & Textiles Ltd Solar Explosives Ltd.10 452.70 670.23 4.000 1.531 1. Eimco Elecon (India) Ltd.964 1.066 424.57 3.3 0 2.3 9 2.890 308.000 1.07 881.5 1 4. Satyam Computer Services Ltd.796 1.15 Non 186.102.000 75.3 2 1. Sun Pharmaceutical Industries Ltd. Thermax Ltd.176. Durables Consumer Durables Industrial Capital Goods 416.66 8 519.07 172.766 811.84 2.321. Aditya Birla Nuvo Ltd.85 890.937 145.969 1.
Great Eastern Shipping Company Ltd.10 7.38 97.0 0 Petroleum Petroleum MONEY MARKET INSTRUMENTS Reverse Repos Subtotal Total OTHERS Net Current Assets Net Assets Top Holding Sectoral Industrial Capital Goods Consumer Non Durables Pharmaceuticals Software Auto Ancillaries Petroleum Products Cement Telecom .387.44 0.28 0.60 2.55 42.28 2.859 96.16 37.92 145.28 2.000 144.61 5.67 0.14 38.303.Services Banks Assets(% ) 14.810 98.75 873.53 0.27 97.51 5. Great Offshore Ltd.24 9.640 24.81 201.55 873.000 256.55 0.57 0.23 209.55 873.81 Textile Products . Subtotal Total Transportation Products Transportation Consumer Durables Transportation Non 159.41 37.10 11.Global Vectra Helicorp Ltd Chennai Corporation Ltd.57 9. EID Parry (India) Ltd.22 12.10 4.262.12 100.26 218.
2006 Friday. 2006 Tuesday.88 Auto 2. September 01.32 Metals 2. 2006 Monday.18 Net Asset Value 2. April 03. 2006 Monday. January 02. October 03.237 114.937 147.Industrial Capital Goods Pharmaceuticals Auto Ancillarie % Assets Oil 3.191 147. 2006 Wednesday. August 01.00 6. 2006 Friday. 2006 Tuesday.59 115. 2006 Wednesday.00 4.063 132.483 119. 2007 Net Asset Value 112.819 134. 2006 Thursday. 1 200 . July 03. November 01. May 01. March 01.00 Banks Secto r Market 1.40 Date Wednesday.286 Power . 2006 Tuesday.60 Chemicals 1. February 01. June 01. 1 000 .495 130.00 2.634 140. 1 400 .54 Power Money Instruments/Net Receivables As s ts(%) e Cement Metals Oil Transportation 1 600 .053 112.65 Transportation 1.648 128.00 0.12 Engineering 1. 2006 Monday. 8. December 01.
DSP Merrill Lynch Opportunities Fund
Fund The fund maintains a complicated portfolio. The fund has constantly figured in the top 25% of its category. The funds mandate is to move around promising sectors. The portfolio is highly diversified. Technology stock is the favourite, but fund also has au tomob iles, FMCG, metals and engineering . If a sector isn‘t perform in g the fun d believes in buy and hold strategy. There is no mid and small cap stock in the portfolio as the exposure doesn‘t Anup typic ally exce e s 30%. Its fund managers are Mr. d
Maheshwari and Mr. Soumendra Lahiri. It is also a wealth creator fund. Last year return of this fund is 36.4%. Type of Scheme: Options available: Open ended growth scheme Growth Dividend Payout Reinvest Minimum amount: Application First Purchase - Rs. 5,000/-
Subsequent Purchase - Rs. Entry Load:
For Regular investments
2.25% : For investments < Rs 5.0 crs Nil : For investments >= Rs 5.0 crs
For SIP investments 1%
Exit Load: Contingent Deferred Sales Charge (CDSC):
For SIP investments 1.25% : If investment is redeemed before the completion of 2 years Nil : If investment is redeemed on or after the completion of 2 years
Under normal circumstances, it is anticipated that the asset allocation shall be as follows: Indicative Asset Allocation Instrumen t Equity and related securities Fixed income securities equityIndicative Allocation (% of Corpus) 80% - 100% Medium to High Risk Profile
0% - 20%
Low to Medium
(debt* and money market securities) *Debt securities/instruments are deemed to include securitised debts.
HIGHLIGHTS Cut Off Time .Subscription 3:00 PM .
000/Weekly.Cut Off Time -Redemption Cut Off Time . 1. seeking to generate long term capital appreciation and whose secondary objective is income generation and the distribution of dividend from a Portfolio constituted of equity and equity related securities concentrating on the Investment Focus of the Scheme.2006) Weekly. ASSET ALLOCATION Equity & Equity related securities: 80% . Monthly and Quarterly Options Systematic Transfer Plan (STP) Minimum Transfer for STP available Rs.Switching Redemption cheques issued^ Systematic Investment Plan (SIP) Minimum Investment for SIP Systematic Withdrawal Plan (SWP) Minimum Withdrawal for SWP 3:00 PM 3:00 PM Normally within 3 Business Days of the receipt of redemption request Monthly and Quarterly Options available Rs. Monthly and Quarterly Options available Rs. 2000/.100% Fixed Income securities (Debt* & Money market securities): 0% 20%.(Effective November 15. 1000/- INVESTMENT OBJECTIVE An Open Ended growth Scheme. Debt securities/ instruments are deemed to include securitised debts 16 BHEL Industrial Capital Goods .
09 5.Ferrous Metals 2.67% 2.03 2.No.095.Services 8 ONGC Oil 10 Satyam Computer Services Software 11 Aditya Birla Nuvo Textile Products 12 Tata Motors Auto 13 Jaiprakash Industries Construction 14 Crompton Greaves Industrial Capital Goods 15 Deccan Chronicle Holdings Media & Entertainment 3.632.75% 2.59 4.68 3.51% 2.37 3.06% 19 Sterlite Industries Non .502. 3.42 3.553.338.73% 3.98 4.621.228.736.556.78% 3.74% 2.37 4.53 .189.061.23 2.Portfolio Sr.105.44 5.972.277.73% 2.066.49 4.26% 3.420.20% 6.76% 2.11% 2.86% Name of the Instrument Industry Market Value (Rs.33 1.03 4.42 2.21 3.04 2.39% 2.072.35% 2. In lakhs) % to Net Assets EQUITY & EQUITY RELATED (a) Listed / awaiting listing on the stock exchanges 1 Reliance Industries Petroleum Products 2 L&T Industrial Capital Goods 3 Infosys Technologies Software 4 Tata Consultancy Services Software 5 Reliance Communication 6 Grasim Industries Cement 7 Bharti Televentures Telecom .279.93 4.88% 2.17% 17 State Bank of India Banks 3.30% 9 Zee Entertainment Media & Entertainment 4.92 3.763.14% 18 ITC Consumer Non Durables 3.
68 % .689.70 1.09 2.559.85 % 0.754.18% 1.98 % 0.84 1.307.03 2.32 1.71 % 0.20 Century Textiles Cement 21 Gujarat Ambuja Cements Cement 22 Mahindra & Mahindra Auto 23 ICICI Bank Banks 2 4 Dr.85 % 1.194.094.39 1.66 1.961.268.18 2.657.880.09 % 1. Reddy‘s Laboratories Pharmaceuticals 25 TV 18 Media & Entertainment 26 Hindustan Lever Consumer Non Durables 27 MphasiS BFL Software 28 Ansal Properties Construction 29 Siemens Industrial Capital Goods 31 Amtek Auto Auto Ancillaries 32 Wire and Wireless Media & Entertainment 33 Voltas Consumer Durables 34 Lanco Infratech Engineering 35 HCL Technologies Software 36 Hindustan Construction Construction 37 Karur Vysya Bank Banks 38 United Phosphorus Pesticides 39 BPCL Petroleum Products 40 ACC Cement 41 Tech Mahindra Software 42 Birla Corporation Cement 43 Jindal Saw Pipes Industrial Capital Goods 44 Cipla Pharmaceuticals 45 IOC Petroleum Products 46 SAIL Ferrous Metals 47 Hindalco Non .60 1.02 2.167.047.21 1.56 1.035.88 % 0.051.59 1.79 % 1.56 1.23 1.92 30 Bharat Electronics Industrial Capital Goods1.95 1.463.10 1.26 % 1.84 % 0.36 2.11 1.087.81 % 0.82 1.1 9 8 3 .13 1.627.009.623.20% 1.075.41 1.995.32 % 1.48 % 1.80 % 0.05 % 0.756.55 1.16 % 1.35 1.97 1.722.46 % 1.78 % 0.72 % 0.09 % 1.245.70 % 0.199.34 % 1.374.68 % 1.48 1.8 2.74 % 0.51 1.162.25 1.503.784.92 % 0.81 % 1.Ferrous Metals 48 IPCL Petroleum Products 49 Bombay Dyeing Chemicals 2.73 % 0.37 % 1.
18% 0.05% 94.97 315.70 284.20% 0.43 1.Ferrous Metals 61 DCM Shriram Consolidated Fertilisers 62 Financial Technologies Software 63 Mastek Software 64 Nestle Consumer Non Durables 65 Bannari Amman Sugar Consumer Non Durables 66 Karur Vysya Bank .48% 0.52% 0.29 764.44 741.90 140.50% 0.08% 0.82 717.62 936.40% 0.51% 0.21% 0.16 291.056.26 567.13 869.39% 0.22 274.Rights Banks 67 Sesa Goa Ferrous Metals 68 I-Flex Solutions Software 69 Centurion Bank of Punjab Banks 70 Bajaj Auto Auto 71 Maruti Udyog Auto 72 Voltamp Transformers Industrial Capital Goods 73 Network18 Media & Entertainment Total DERIVATIVES 74 ICICI Feb 2007 Banks 75 BHEL Feb 2007 Industrial Capital Goods 949.87% 0.41 776.61 652.11 579.46% 0.24 114.27 540.67 690.10 277.77 634.63% 0.19% 0.19% 0.82 752.42% .50 Graphite India Industrial Products 51 Colgate Consumer Non Durables 52 Hexaware Technologies Software 53 GE Shipping Transportation 54 Mcleod Russell Consumer Non Durables 55 NRB Bearings Industrial Products 56 Sun TV Media & Entertainment 57 Pantaloon Retail Retailing 58 B L Kashyap & Sons Construction 59 HPCL Petroleum Products 60 Hindalco Rights Non .293.38% 0.51% 0.32 622.51% 0.52 78.11 % 0.43 918.44% 0.36% 0.71 601.58% 0.64% 0.62% 0.16 0.43% 0.44 755.
03 6.16% 1.000.72 230.21% -0.1 5 4.9 % Assets 315.1 8 1.92 2.55% 100.17 5.5 7.7 4 2.417.1 5 NON 5.23% 4.765.31% 0.11 7.Services 77 Century Textiles Feb 2007 Cement Total MONEY MARKET INSTRUMENTS Cash & Equivalent CBLO / Reverse Repo Investments Net Receivables / (Payables) Total Grand Total Major Holdings Sector MEDIA ENTERTAINMENT CEMENT PETROLEUM PRODUCTS BANKS TELECOM .76 Bharti Feb 2007 Telecom .34% 6.2 1 1.SERVICES CONSUMER DURABLES CONSTRUCTION AUTO NON METALS OIL TEXTILE PRODUCTS PHARMACEUTICALS AUTO ANCILLARIES INDUSTRIAL FERROUS 3.5 1 2.821.84 & 8.28 0.60 6.3 5 5.00 % .06 148.77 4.0 3 2.46 347.
51 51. February 01.2 49.93 PESTICIDES 0.44 CASH & EQUIVALENT 4.FERROUS % As sets Secto r Transportation has a share of 0. March 01. 2006 Thursday. 2006 Tuesday. August 01.09 ENGINEERING 1. 2007 Net Asset Value 41.12 47. 2006 Monday. October 03. 2006 Monday.68 FERTILISERS 0. 2006 Tuesday.88 CHEMICALS 0.55 SOFTWARE INDUSTRIALCAPITAL GOODS 14.84 42.51% in the portfolio. Net Asset Value Date Wednesday.71 43. 2006 Wednesday.4 49.09 FERROUS METALS 0.98 PETROLEUM TELECOM - TEXTILE AUTO PRODUCTS CONSTRUCTION NON . 2006 Monday.35 11.% Assets MEDIA & CONSUMER DURABLES 1.44 43.66 44. May 01. September 01. November 01. July 03.27 52. April 03.86 56. 2006 Wednesday. December 01. 2006 Friday. 2006 Tuesday.37 55. 2006 Friday.58% and Retailing has a share of 0. June 01.809 INDUSTRIAL RETAILING CASH & 16 14 12 10 8 6 4 2 0 CHEMICALS CONSUMER FERROUS . January 02.
to mutual funds. The group has a net worth of around Rs. 52. to life insurance.800 employees across its various businesses servicing around 2 million customer accounts through a distribution network of branches.38 Crore 1-2 year Mr. to stock broking. representative offices and . Domestic-100% Sponsor Corpus Ideal Investment Horizon Fund Manager Kotak Mahindra is one of Kotak Mahindra Finance Ltd Rs. to investment banking.900 crore and employs around 8. offering complete financial solutions that encompass every sphere of life. franchisees.0%. Ritesh Jain India's leading financial institutions.KOTAK MAHINDRA MUTUAL FUND Incorporated 23 June 1998 Ownership Private Ownership Pattern Foreign . From commercial banking.2. the group caters to the financial needs of individuals and corporates.
The balance is employed in riskier government securities. is the Asset Manager for Kotak Mahindra Mutual Fund (KMMF). The investment strategy is to invest across wide maturity horizons and different component is normally maintained between 30-50% and it generally doesn‘t invest in corporate bond s with less than AA rating. London. corporate deposits and securitised debts. The fund is income generator. Emphasis on high yield portfolio has kept the fund‘s volatility low . kind of issuers in debt market. Last year return of this fund is 7%. even when the Sensex was down. Fund This fund has generated a decent income for its investors with reasonably low level of volatility. KMAMC started operations in December 1998 and has over 4 Lac investors in various schemes.satellite offices across 282 cities and towns in India and offices in New York. Risk management is most important for this fund. KMMF offers schemes catering to investors with varying risk return profiles and was the first fund house in the country to launch a dedicated gilt scheme investing only in government securities. Kotak Mahindra Asset Management Company Limited (KMAMC). the G-Sec . The portfolio of the scheme consists of debt and money market instruments. a wholly owned subsidiary of KMBL. It is to be noted that NAV of this fund never fell down. 60-70% of its portfolio consists of high yield assets such as bonds. Dubai and Mauritius. commercial paper. It is the fourth best performin g income fund in past six months based on returns.
November 01. 2006 Tuesday.5166 18. February 01. June 01.0739 19. 2006 Monday. 2006 Monday.2803 18. 2006 Tuesday.3916 19. 2006 Wednesday.704 18. 2006 Tuesday.2249 18. July 03.501 . August 01.9008 19. 2006 Friday.3392 18. October 03. September 01.Net Asset Value Date Wednesday. 2006 Monday. April 03. 2006 Friday. May 01.6115 18.4542 18. 2007 Net Asset Value 18. December 01. January 02. 2006 Thursday. March 01. 2006 Wednesday.1858 19.
JM INCOME FUND .
Today. st To generate stable long term returns with low risk strategy and capital appreciation/ accretion through investment in debt instruments and related securities besides preservation of capital.M. they are among the top most mutual funds in the country. J. Financial and . The Group's origins can be traced back to the 1950s when the Kampani family began to get involved in India's then nascent capital markets. JM Financial Mutual Fund is one of India's first private sector mutual funds-an integral part of the first wave that commenced operations in 1993-94.Inception Fund Manager Bench Mark Index Corpus Investment Objective 1 April. and enjoy a superior performance record. ranked by assets managed. Dwijendra Srivastava CRISIL COMPOSITE BOND FUND INDEX Rs 26.58 Crore. 1995 Mr.
Apart from helping companies raise finance. 1973. JM has also been instrumental in educating a burgeoning and prospering middle .Investment Consultancy Services was founded on September 15. Kampani. Under the leadership of Chairman Nimesh N. the JM Group has played a stellar and multi-faceted role in the development of India's capital markets.
is not a part of this joint venture. The fund is income generator. g-sec investments. Last year return of this fund is 3%.. Liquidity Risk. The major risks associated are Interest Rate Risk. The net assets are mainly invested in AAA rated instruments.e. they must provide a safe haven for their investments. Fund The fund has given a one year return of 2. and strong systems of managing risk scientifically. JM Financial Asset Management Private Limited started operations in December 1994 with a simultaneous launch of three funds-JM Liquid Fund (now JM Income Fund). Ltd. JM Financial Mutual Fund offers a bouquet of funds that caters to the diverse needs of both its institutional and individual investors. JM Equity Fund and JM balanced Fund. that today spans investment banking. Today.6% and five year return of 7. The portfolio basically includes corporate bonds. They believe that to cultivate investor loyalty. The philosophy behind investment is that invest in papers that offers value to the investor i. Their mission is to manage risk effectively while generating top quartile returns across all product categories.6% of total assets.class about the advantages of investing in blue chip companies. broking. judicious fund management. Financial and Investment Consultancy Services Pvt. The fund is in medium risk-return segment. the Asset Management Company of JM Financial Mutual Fund. Nearly 25% of total assets are held as cash. They are focused on helping their investors realize their investment goals through prudent advice. and co-sponsored by JM Financial Ltd. and Reinvestment Risk.M. In 1999.7%. . they consider the relative value and the spread offered by the paper in a maturity bucket instead of just the absolute yield. JM Financial Asset Management Private Limited. money market instruments. fixed income and retail distribution.. impeccable research. they commenced a joint venture with Morgan Stanley Dean Witter. Sponsored by J. The top 5 holdings account fo r 55.
March 01. 2006 Wednesday.6479 27.437 28.Net Assets Value Date Wednesday.5386 . October 03. 2006 Tuesday. 2006 Friday. May 01. February 01.3517 28.9194 27. January 02. 2006 Tuesday. June 01.1315 28.7041 27. August 01. December 01. 2006 Friday.2684 28. 2006 Monday. 2007 Net Asset Value 27. 2006 Tuesday.9256 28.8875 27. April 03. November 01. 2006 Thursday.8435 27. July 03. 2006 Monday. September 01. 2006 Wednesday.7296 27. 2006 Monday.
Guernsey. Gn Block. Mumbai . for undertaking portfolio registered in management services and also acts as the manager and marketer to offshore funds through its 100 % subsidiary. . The UTI Asset Management Company has its registered office at : UTI Tower. 1993 on February 3 2004.Kurla Complex. UTI International Limited.UTI BOND FUND UTI Mutual Fund is managed by UTI Asset Management Company Private Limited who has been appointed by the UTI Trustee Company Private Limited for managing the schemes of UTI Mutual Fund and the schemes transferred / migrated from UTI Mutual Fund. the SEBI (Mutual Funds) Regulations and the objectives of the schemes. UTI AMC is a registered portfolio manager under the SEBI (Portfolio Managers) Regulations. Bandra . Channel Islands. Bandra (East). State-of-the-art systems and communications are in place to ensure a seamless flow across the various activities undertaken by UTI AMC. the Trust Deed.400 051 will provide professionally managed back office support for all business services of UTI Mutual Fund (excluding fund management) in accordance with the provisions of the Investment Management Agreement.
34500 Crore. UTI Asset Management Company presently manages a corpus of over Rs. UTI Mutual Fund catering to the has a track record of managing a variety of schemes .UTI Mutual Fund has come into existence with effect from 1st February 2003.
effective quick and efficient service. It has a nationwide network consisting 70 UTI Financial Centers (UFCs) and UTI International offices in London. The fund managers are also ably supported with a strong in-house equity research department. All the branches.needs of every class of citizenry. who has been highly empowered to manage funds with greater efficiency and accountability in the sole interest of unit holders. Dubai and has a wellBahrain. It has a corpus of Rs. professional fund management team.7%. UFCs and registrar offices are connected on a robust IT network to ensure cost. To ensure better management management department is of funds. coupon & quality of companies. efficient. Portfolio NAME OF THE INSTRUMENT Debt Instruments QUANTITY MARKET . responsive. so a portfolio of Corporate Bonds and g-sec is made. The fund has seen a slow but sure growth in NAV. diversified strategies combined with volatility analytics. With a view to reach to common investors at district level.98 Crore. The average maturity of its portfolio is 3 years. The fund avoids extreme swings in either maturity or duration. Time horizon of investment is medium. nearly 61. All these have evolved UTI Mutual Fund to position as a dynamic. Emphasis is on adding value through multiple. 4 satellite offices have also been opened in select towns and districts. Its fund manager is Mr. also a risk in operation. Last year return of this fund is 4. It qualified. and transparent and SEBI compliant entity.VALUE % TO NAV . It has reset and upgraded transparency standards for the mutual funds industry. Amandeep Chopra. and adjustment to traditional variables such as sector. restructured. 388. The top 10 holdings has major share of corporate bonds than g-sec.7% holding is of AAA rated bonds. Investing way being conservative. Fund It is a income scheme with relatively low volatility and stable returns.
64 1079.06 1484.55 4. MATURING 08/06/2007 NCD 8.45 3.22% STANDARD CHARTERED BANK MATURING 15/07/2013 PTC 0% ICICI BANK LTD MATURING 07/02/2009 NCD 11.17 7.8479% ICICI BANK LTD MATURING 22/10/2009 NCD 6.6 0.98 7.8 1001.64 3205.9 1. MATURING 01/04/2007 PTC 11.03 1004.19 364.22% STANDARD CHARTERED BANK MATURING 15/05/2014 PTC 11.08 3498.22% STANDARD CHARTERED BANK MATURING 15/06/2014 PTC 11.15 2.85% HDFC LTD.03 826.35 928.23 2278. MATURING 14/01/2008 NCD 13.74 3.72 299.58% INDUSTRIAL DEVELOPMENT BANK OF INDIA LIMITED.75% CITICORP FINANCE INDIA LTD.(a) Listed/awaiting listing on Stock Exchanges NCDR 7.22% STANDARD CHARTERED BANK MATURING 15/04/2013 PTC 11.41 369.71 1.25% LIC HOUSING FINANCE LTD.59% RESERVE BANK OF INDIA MATURING 23/03/2015 C D KOTAK MAHINDRA BANK LTD.45 .58% TATA SONS LTD. MATURING 23/08/2010 PTC 8.64 3.75% RELIANCE INDUSTRIES LTD.73 594.48 3.22% STANDARD CHARTERED BANK MATURING 15/10/2014 PTC 11.69 6703.85% LIC HOUSING FINANCE LTD.03 536.71 8. MATURING 31/03/2007 TOTAL:(a) Listed/awaiting listing on Stock Exchanges (b) Unlisted NCDR 6.8 299.58 7.2 3.8 986. MATURING 11/12/2016 NCD 14.78 11532.25% LIC HOUSING FINANCE LTD.05% HONGKONG & SHANGHAI BANKING CORP.34 * * * 150000000 100000000 85000000 1450.96 250 25 15 15 10 100 1000000 900000 20 5 500000 500000 511000 167000 25 20 7 2500 2366. MATURING 14/05/2008 PTC 0% TATA MOTORS LTD. MATURING 13/02/2008 NCD 8.44% RESERVE BANK OF INDIA MATURING 23/03/2012 TOTAL: 300 20 150 100 200 100 1000000 50 3 30 3001.A. MATURING 23/04/2007 NCD 8.71 2.27 1452.12 2.16 0.78% POWER FINANCE CORPORATION LTD.96 0.75% CITIBANK N.02 4.63 0.19 1.35 1. MATURING 18/02/2009 NCD 6.25 13096. MATURING 31/01/2010 PTC 11.86% UTI BANK LTD. MATURING 15/03/2007 NCD 9.LT MATURING 10/08/2009 NCD 8.7% HINDALCO INDUSTRIES LTD.48 9.61 769.98 380.82 736.21 1.64 NET CURRENT ASSETS C P EXIM BANK MATURING 12/07/2007 TOTAL: TOTAL:Others - 0 80000000 2729. MATURING 21/12/2007 GSEC 7. MATURING 05/08/2008 NCDR 7.45% HDFC LTD. MATURING 01/05/2007 TOTAL:(b) Unlisted TOTAL:Debt Instruments Others GSEC 7. MATURING 10/08/2009 NCD 8.45 530.21 3.69 24629. MATURING 25/07/2012 NCD 6% TATA TEA LTD.21 686.54 1090.63 2.52 0.71% INDIAN RAILWAYS FIN CORPN LTD.39 500.96 2.65% CITIFINANCIAL CONSUMER FINANCE INDIA LTD.27 4.64 0.79 106.69 1.22% STANDARD CHARTERED BANK MATURING 15/02/2014 PTC 11.98% INDIAN RAILWAYS FIN CORPN LTD. MATURING 12/09/2009 PTC 11.18 1. MATURING 01/06/2007 PTC 10.46 976.
2006 Wednesday. 2006 Tuesday. 2007 Net Asset Value 20.3934 21. December 01. February 01. March 01. June 01. October 03.8577 20. 2006 Friday. May 01.7818 20.88 Net Asset Value Date Wednesday. January 02.6422 20.1273 21. 2006 Thursday.8763 20.529 21.2952 21. 2006 Friday. 2006 Monday.5851 20.5554 . 2006 Tuesday. August 01. September 01. July 03. 2006 Monday.TOTAL:UTI-Bond Fund 31332. 2006 Tuesday. November 01. 2006 Wednesday.9533 21. April 03. 2006 Monday.579 20.
The Settlor is also not responsible or liable for any loss or shortfall resulting schemes of LIC Mutual Fund. The Trustees of LIC Mutual Fund have appointed LIC Mutual Fund Asset Management Company Ltd.LIC Mutual Fund Bond Life Insurance Corporation of India set up LIC Mutual Fund on 19th June 1989 and contributed Rs. The Trustees should also ensure that the activities of the Trust and the Asset Management Company are in accordance with the Trust Deed and the SEBI Mutual Fund Regulations as amended from time to time. as the Investment Managers for LIC Mutual Fund. LIC Mutal Fund Asset Management Company Ltd. The Settlor is not responsible for the management of the Trust. in any of the . discretion and management of the affairs of the Trust. 1882. 1993. The Company commenced business on 29th April 1994. was formed on 20th April 1994 in compliance with the Securities and Exchange Board of India (Mutual Funds) Regulations. 2 Crores towards the corpus of the Fund. The Trustees of the LIC Mutual Fund have exclusive ownership of Trust Fund and are vested with general power of superintendence. The Trustees have also to report periodically to SEBI on the functioning of the Fund. The Trustees are responsible for appointing a Custodian. LIC Mutual Fund was constituted as a Trust in accordance with the provisions of the Indian Trust Act.
Last year return of this fund is 4.7%. 2006 Thursday. July 03.6-7. 2006 Tuesday. April 03. In August 2006 it was having 87. November 01.9989 . 2006 Monday. 2006 Monday. August 01.The investors under the schemes can obtain a copy of the Trust Deed. This is due to high exposure to corporate bonds. Ten year yield of the fund is nearly 7.0122 19. 2006 Monday.3 years. September 01.882 19.& AA+ bonds. March 01.0542 19. The annual average return is 7.3877 19. June 01. In its portfolio 24. on a written request made to the LIC Mutual Fund Asset Management Company Ltd. Fund Life Insurance Corporation Mutual Fund Bond is one of the consistent performers in the income category fund.6944 19. 2006 Wednesday. 2006 Wednesday. It is the only income fund that doesn‘t giv e exposure to government security. 2006 Tuesday.2687 19.43%. Net Assets Value Date Wednesday. December 01.7949 19.4% of its net assets as corporate bonds.34%. 2006 Friday. February 01.1114 19. 2006 Friday.5848 19.3326 19. May 01.75% in comparison to the category average of 7.3% holding is of AA. 2006 Net Asset Value 19. the text of the concerned Scheme as also a copy of the Annual Report. The average maturity of its portfolio is 1. October 03.
209.1 16.8549 Portfolio Debt Instruments .55 4.02 ACC AA+ AA+ 50 50 5 515. 2006 19.839.79 4.86 2.00 9. January 02.000.59 4.000.67 1650000 1.65 4.29 AAA(SO) 3 294.29 1.74 .7 500 493.Tuesday. SECURITIES Sovereign 500000 RABO INDIA FINANCE Finance Privately placed / Unlisted JSW STEEL DSP ML CAPITAL KOTAK PRIME Securitised Debt INDIAN RETAIL ABS Finance TRUST MAHINDRA Ferrou s Metals Finance Finance P1+ 37 370 3.23 17.30 11.58 491.00 9.794.57 SUNDARAM FINANCE Finance Govt Securitie s FINOLEX INDUSTRIES Chemicals AAGOVT.Bonds/Debentures Listed / Awaiting Listing on Stock Exchanges I C I C I BANK TISCO Banks Ferrous Metal s Cement AAA AAA 1800 1.44 AA- 2200000 1.24 AAA(FSO) 100 AA+ 100 1.
2 .ASSET SECURITIES Finance AAA(SO) 14 128.95 1.
121.5 9 S ECUR ITIES RABO INDIA FINANCE JSW STE EL DSP ML CA PITAL KOTAK MAHINDR A PRIME INDIAN RETAIL ABS TR UST ASSET S ECUR ITIES TRUST Cash 'n' Call.64 10.43 9.637.43 17.758.5 7 4.29 10.1 BANK T I S CO A CC SUND ARAM FINAN CE FINOLEX INDU STRIES GOVT. 9.121.6 7 3.7 9 16.2 2. Current Assets & Receivables 4.24 4.83 100 1.43 10.TRUST Total: Money Market & Net Receivables/Payables Cash 'n' Call.74 9.64 10.65 .57 Net As sets ICICI 1.19 89. Current Assets & Receivables Total: Scheme Total: Graphical Representation of the Portfolio 1.4 4 4.29 11.
Different Investing ways in Mutual Fund
There are basically two ways to invest in a Mutual Fund. These are: One Time Investment Systematic Investment Plan (SIP) Let us discuss each. One time investment In this way of investment investor pays the entire investment amount in one time only. The minimum amount that must be invested in such a way is Rs. 5,000/- only. An entry load of 2.25% (nearly every fund charges) has to be paid by the investor. Depending upon the Net Asset Value (NAV) of the fund units are allotted to the
investor. Let us understand it with the help of an example. Let an investor wants to invest Rs 12,000/- in one time only in Reliance Equity Fund. At the date of investment let the NAV of the fund be Rs 12/- per unit. Than the number of units that the investor will get is as follows: Total Investment Rs 12,000/NAV Rs 12/-
Entry Load 2.25% Effective NAV that investor will get [Present Day NAV + 2.25% (Present Day NAV)] i.e. 12 + (2.25*12)/100 = Rs 12.27/Units actually purchased by investor = Rs 12,000 / Rs 12.27 = 978 Units. This way of investment is recommended for those investors who are sensitive because "emotions" may make the investor susceptible to "mistakes in timings of his purchases and sales". However with this way of investment the investor might loose future opportunities as available in SIP due to fluctuations in Sensex.
Systematic Investment Plan (SIP) SIP is a method of investing a fixed sum, regularly, in a mutual fund. It is very similar to regular saving schemes like a recurring deposit. An SIP allows you to buy units on a given date each month, so that you can implement an investment / saving plan for yourself. Once you have decided on the amount you want to invest every month and the mutual fund scheme in which you want to invest, you can either give post-dated cheques or ECS instruction, and the investment will be made regularly. SIPs generally start at minimum amounts of Rs 500 per month and the upper limit for using an ECS is Rs 25000 per instruction. Therefore, if you wish to invest Rs 100,000 per month, you may need to do it on 4 different dates. In this way of investment investor pays the entire investment amount over a time period generally 1 year. The minimum amount that must be invested in such a way is Rs. 6,000/- only i.e. Rs 500/- a month at least continuously for one year. An investor can invest any amount in multiple of 5. Entry load of 2.25% (nearly every fund charges) has to be paid by the investor every month. Depending upon the Net Asset Value (NAV) of the fund units are allotted to the investor. Let us understand it with the help of
an example. .
e.25% Effective NAV that investor will get [Present Day NAV + 2.50 Units. The main advantage in SIP is that if Sensex is down on the day of investment than previous day investor will get more units as NAV will also fall generally. st .50 Entry Load 2.000/Investment on 1 January (Monday) 2004 Rs 1. At the date of investment let the NAV of the fund be Rs 12/.25*12. quarterly.27/Units actually purchased by investor = Rs 1. the number of units that the investor will get is as follows: Total Investment Rs 12. 12.25% (Present Day NAV)] i.000/.50 + (2.50 + 78.50)/100 = Rs 12.every month continuously for next 10 months. It is to be noted that Investor can do additional purchase any t ime both in One time investment as well as SIP. half yearly. So in the month of February the total units holded by the investor are 81.e.25*12)/100 = Rs 12.per unit. 12 + (2. Depending upon the NAV every month investor will get units after deducting the entry load. In the same way investor will invest Rs 1000/.78 = 78.27 = 81.74 units. The investor can invest using SIP every month.78/Units actually purchased by investor = Rs 1.(Total Investment / Number of months) NAV Rs 12/Entry Load 2.24 = 159.24 Units.000/.000 / Rs 12.25% st st 2004. Than Effective NAV that investor will get [Present Day NAV + 2. Now let NAV on 1 February (Wednesday) be Rs 12.25% (Present Day NAV)] i.Let an investor wants to invest Rs 12.000 / Rs 12.in SIP in Reliance Equity Fund on 1 January.
as it really forces you to buy low. typically mutual funds.) you decide in the beginning. This all seems logic in an academic sense. are purchased at regular intervals in amounts which increase when the market drops and decrease when the market rises Instead of simply adding X-amount into your portfolio every month (week.Value Averaging as an Investment way An investment strategy designed to reduce volatility in which securities.. and you decide to increase your portfolio by a certain sum per month. how much your portfolio shall be worth any given time. This investment way is not practiced till time. There might even be times when you will have to withdraw moneys when markets make a big jump up. semester. year. (I. and thus will you have to put in more money every month. you start with a sum X to start with.e. and sell high.) The value of your portfolio will of course fluctuate according the movements of the markets. when the markets drop (to keep up with your projected growth) or less when the markets rise.. But there are certain drawbacks: .
and needs careful attention at regular intervals. change of lifestyle. live expectation. But even this number can be nothing short of arbitrary. 2006 = Rs 201. As John Mayard said: Markets can remain irrational longer than you can remain solvent. Something that is filled with rough guesswork at best of times. Of course can you say: I will need X amount when I'm 45 in order to retire early.18 . 2006 to 2 January.000/NAV as on Feb 1.. development of social security.The administration of such a portfolio amounts to a fair-sized Excel sheet.. Comparison of returns from a fund in same time period using different investment ways Assumptions 1 There is no withdrawals from the selected funds from 1 February. and then work out how much you have to save every month. One will have to make a calculation of how much a portfolio will have to grow every month. health. st nd Fund: - RELIANCE GROWTH FUND Investment Way Lump sum. as there are factors like: Inflation. Total Investment = Rs 12. 2007 by the investor. 2 Units are issued to the investor as soon as he made the investment. Many people in their accumulation phase would be hard put to suddenly even out ones portfolio after a 20% market decline.
Entry load @ 2.53 .25% (NAV of the day) = Rs 4.
18 / 1 = Rs 201.18 + 4.53 = Rs 205.5 Rs 22.17 3. Average Price = Total of NAV‘s in which investment is mad e / number of times investment mad e = 201.5 Rs 22. 2006 January 02.47 250.33 * 270. 2006 June 01.06 4.= Rs 22. 2007 Total Calculations Investment per month = Rs 1.5 Rs 22.000/.25% Rs 1000 Rs 1000 Rs 1000 Rs 1000 Rs 1000 Rs 1000 Rs 1000 Rs 1000 Rs 1000 Rs 1000 Rs 1000 Rs 1000 Rs 22.33 = Rs 205.Effective NAV = 201.27%.25 3. 2006 May 01.11 199.5 Rs 22.65 4.70 = 58.5 Rs 22.2 218.000 / 205.5 Rs 22.5 4. 2006 April 03.5/NAV 201.75 251. 2006 July 03.5 Rs 22. 2006 September 01. 2006 December 01.23 261.33 NAV as on Jan 2.78 270.05 = 15752 1 year return = [(15752-12000)*100]/ 12000 = 31.5 Units 4.5 Rs 22. 2006 October 03.06 2735.5 Rs 22.000 . 2006 August 01.88 4.000/Load @ 2.90 3.5 Rs 22.70 Units Got = 12.86 4.68 215.12 234.05 Units Value = 58.54 4. 2007 = Rs 270.22 229. 2006 March 01.25% on Rs 1.18/Average Cost = Total Investment / Units Purchased = 12000 / 58.73 3.3 Rs 12.70/Investment Way SIP Date February 01.90 5.5 Rs 22.62 52.18 210. 2006 November 01.51 193.05 Investment Load@2.
Average Price = 2735.06 = Rs 230.94/Average Cost = 120000 / 52.5/Investment Way Value Averaging Here our objective is that in 1 1.18 = Rs 4.71/Units Purchased = 4.06 NAV = Rs 270.53/Effective value at which unit will be purchased = Rs 205.86 In the same way units purchased for the next 11 months has been calculated.and in 2 nd st nd st month the value of our investment should be Rs th month it should be Rs 2.18/Units Purchased = 4.059/Return = [(14059 – 12000)* 100]/12000 = 17. Now On March 01. 2006 = Rs 201.NAV on 1 Feb. 2006 .25% on Feb 01.000/-. Calculations Investment per month = Rs 1.3 / 12 = Rs 227.000/-. On 2 Jan.06 * 270.15%. Similarly in the beginning of 12 month it should be Rs 12.86. 2007 Total Units Purchased = 52.05 = Rs 14.5/.000/.000/Load @ 2. 2006 on NAV Rs 201.Effective value at which unit will be purchased = Rs 977.05/Investment Value = 52.
NAV = Rs 210.Rs 1. It is being assumed that Entry Load will be charged every month like in case of SIP.95/Units Purchased = 979 / 214.86 .021 = Rs 979/.73/Effective value at which unit will be purchased = Rs 214.Now Load @ 2.95 = 4. Returns Value of the investment as on January 02.22 = Rs 4.55 = 9. Average Price = 2735.25%) Made February 01.25% on March 01.86 Current Value = NAV* Total Units Holded = 210.38/nd Date NAV (Rs) Current Load Value (Rs) + NA V Investment Units Got (Rs) (2. In the same way we will calculate the investment require to be made in next ten months.55 So Total Units Holded in 2 Month = 4.88%.94/Average Cost = 9914 / 44.000/-.41. Thus Investment Required = Rs 2.18 -------- (Rs) 205.22/Units Holded = 4.38 * 270.86 = Rs 1021/Since we are in second month of investment so as per the rules we want our investment to be of value Rs 2. 2007 = 44.22 * 4.86 + 4.38 = Rs 223. 2006 201.05 = Rs 11. 2006 on NAV Rs 210.000.3 / 12 = Rs 227.Total Investment Made = Rs 9914/One year return = [(11985-9914)* 100]/9914 = 20.71 1000 4.985/.
47 250. 2006 June 01.6345/Investment Way SIP .95 204 197. 2006 May 01.58 2.67 276. 2006 January 02.84 6.95 234.68 1.23 261. 2006 November 01.96 = Rs 18.2 218.22 229.41 44.25% (NAV of the day) = Rs .38 Kotak Mahindra Investment Way Lump sum. 2006 July 03.12 979 838 733 1595 1395 1220 128 404 406 550 666 9914 4. 2006 December 01. 2006 August 01. 2006 April 03.96 NAV as on Jan 2.55 223 240 255.4096 Effective NAV = Rs 18.12 234.75 251.17 0.57 1. Average Price = Total of NAV‘s in which investment is mad e / number of times investment mad e = 18.501 Units Value = 12558 1 year return = [(12558-12000)*100]/ 12000 = 4.57 2.85 7.11 199. 2007 Total 210.000 / 18.55 3. 2007 = Rs 19. 2006 = Rs 18.86 267.6345 = 643.05 2735.78 270.000/NAV as on Feb 1.2249 Entry load @ 2.65%. 2006 September 01.2249 / 1 = Rs 18.05 2. Total Investment = Rs 12.51 193.2249/Average Cost = Total Investment / Units Purchased = 12000 / 643.34 219.3 1021 2162 3267 3405 4605 5780 7872 8596 9594 10450 11334 214. 2006 October 03.25 6.68 215.March 01.6345 Units Got = 12.9 257.
2006 April 03.2803 18.4542 --------980 1984 2996 (Rs) 18. 2007 Total we will find that NAV 18.1892 Investment Way Value Averaging Date NAV (Rs) Current Value (Rs) Load (2.94 50.71 51. 2006 March 01.40 50. 2006 18.5 Rs 22.47 53.63 53.35 Using the same way and method as used in calculation of return of Reliance using SIP One year return = 1. 2006 October 03.5 Rs 22.97 52.8694 1000 1020 1016 1004 53. 2006 November 01.5 Rs 22.2803 18. 2006 December 01.30 52. 2006 June 01.5 Rs 22.6916 18.2249 18.1858 19.25% Units Rs 1000 Rs 1000 Rs 1000 Rs 1000 Rs 1000 Rs 1000 Rs 1000 Rs 1000 Rs 1000 Rs 1000 Rs 1000 Rs 1000 Rs 22.6345 18.9008 19.704 18.7653 Average Cost = Rs 19. 2006 May 01.Date February 01.79 52.2249 18.18 53.3916 19.26 51.625% Average Price = Rs 18.3392 18.7518 18.0739 19.5166 18. 2006 April 03.25%) + NA V February 01. 2006 January 02.57 54.24 50.5 Rs 22. 2006 August 01.6115 18. 2006 July 03.20 Investment Made (Rs) Units Got .4542 18.3392 18. 2006 May 01. 2006 September 01.5 Rs 22.5 Rs 22.5 Rs 22.63 54.1838 Investment Load@2.5 Rs 22. 2006 March 01.52 52.12 625.5 53.5 Rs 22.5 Rs 22.501 225.
501 225.9332 19.326 19.9398 1010 996 993 948 948 968 914 959 11776 53.9008 19. 2007 Total 18. 2006 December 01. 2006 November 01.503 19.704 18.5166 18. 2006 September 01.05 48.June 01.0302 19.33 51.34 52.34 46.1248 19.6175 19.7653 Average Cost = Rs 19.10 48.29 Using the same way and method as used in calculation of return of Reliance using Value Averaging we will find that One year return = 1.0739 19.09 614.73% Average Price = Rs 18.60 49.92 49.828 19.1838 3990 5004 6007 7052 8052 9032 10086 11041 18.6115 18.1858 19. 2006 August 01. 2006 July 03. 2006 January 02.3916 19. 2006 October 03.17 .
similarly. So prior to winding up this study.FINDINGS Like a traveler. an attempt is made to summarize its major findings and suggestions on the basis of forgoing chapters. it would be desirable to review the various aspects of the present study. who after completing his long and arduous journey reaches his destination and looks back upon the area covered by him for recalling the important landmarks and experiences he came across. .
BSE Metal Index lost 22 per cent. NAV of all the equity related funds fell down in June. Maintaining cash also enables them to invest in any lucrative instrument as it comes. Government Securities there NAV were not much affected. IT. Industry feared more tax brackets. The rise in the level of margin trading was very high. However those funds which invested in safer instruments like Bonds. It was speculated by experts that Sensex may touch 9000 mark. 4. This putted lot of impact as infrastructure development is in Boom in INDIA. FII‘s were net sellers in emerging markets to book profits. International Crude Oil Prices were rising. Markets in US and Japan were attracting liquidity and inflation scare was also there. Some people viewed that Sensex growth was valuated higher. . so a lot of emerging markets pulled back. Telecom. To maintain liquidity all the mutual funds have cash holdings of nearly 10% out of there total assets. 2. Infrastructure. and August 2006 due to Fall in the Sensex. Auto etc. July. Oil. 3. current high importance sectors Like Energy. Many reports were issued which criticized the growth shown by Sensex.Findings: 1. All the Equity related funds invested in high growth. The main reasons for Sensex fall were found to be: The interest rate hike in the US by the Federal Reserve Bank.
5. . The one year equity related funds is higher than other funds. It proves the principal of high risk. high return.
6. More number of securities management. 10.4%. Total number of instruments in its portfolio is 77. This is one of the reasons why its one year returns are more. As the NAV increases. Average Cost associated with a mutual fund was found to be least in one time investment than Value Averaging. 13. which was further high than one year return using . Average Cost in one time investment was found to be less in comparison to other investing ways. However HDFC Mutual Fund gave one year return of nearly 34%.only. with number of instruments in its portfolio close to 6 0 . 8.and at other Rs 158/. only complexes the portfolio 7. 12. the number of units which an investor gets decreases and vice. whose average cost was further less than that associated with SIP. 1596/. 9. Average Price. So it‘s important what instrument we include in portfolio rather than the number of securities. Average Price which a investor has to pay to invest in a mutual fund was found to be less in one time investment than opting for SIP or Value Averaging (if available). 11. DSP Merrill Lynch Mutual Fund gave one year return of 36. To practically implement value averaging the minimum amount condition like in SIP has to be eliminated. Average Price which an investor has to pay to invest in a mutual fund was found to be equal in SIP and Value Averaging.versa. As we have seen in the calculations at one time investor was investing Rs. One year return in One time investment was found to be more than in Value Averaging investment way.
.14. Growth fund option gives investors good returns as well as capital appreciation.
. 2. Mutual Fund is the best way to enter into market particularly for those investors who want good returns with minimum risk as fund of mutual funds is handled by an expert. Best time to invest in stock market is when it is down because with same investment money he will get more value.Suggestions 1.
8. so that even if one instruments return is negative other instruments return can compensate that. 7. To get good returns investor must invest considering the time horizon of at least two to three years. Diversification of portfolio is must as it will reduce the unsystematic risk and give the return an edge. . Individual investors must also choose a basket of securities instead of making investment in only one or two instruments. Portfolio management is a difficult task. This will help him in getting good returns.3. 6. So fund managers must choose optimal number of securities which meets the objectives of fund. Mutual Fund Companies must devise fund considering the end investor in mind. Since there are large number of mutual funds in which an investor can invest. Those investors who are risk averse must invest in open ended funds because he can look at the past performance of the fund under consideration. 5. so he must choose the fund in which investment is to be made by clearly understanding the little aspects associated with it. 9. 4.
The researcher was inexperienced. .
As. To develop a new way of investment lot of calculations needs to be done. The actual hurdles in making value averaging as an investment way in portfolio couldn‘t be found . The portfolio published by the various Asset Management Companies might not be the real one. if it would be so than any individual can invest in the manner similar to portfolio of funds. but here only few has been done. The objective of including a particular sector in the portfolio by the fund manager couldn‘t be known. portfolio being maintained by different funds changes with market conditions.The scope of the study was very wide as there are hundreds of mutual funds of different types but only few have been studied. The portfolio being actually maintained under different . The market conditions in last one ye ar couldn‘t be ascertained .
care by expert fund managers so chances of making a loss in the investment are very less.gives in vesto r the assured return with ne arly no risk. So if an investor wants to get good returns with minimum risk he must invest in basket of securities. expected returns. Equity related funds give more returns. But if it is applied than by investing a small amount an investor will be able to get good returns in comparison to SIP. Further they should insure that they make investment in basket of instruments as this will give those advantages of various sectors. It would be clearer from the fact that when Sensex was down in the middle of 2006. the NAV of all the equity related funds fell down. Mutual Funds are probab ly the best in vestment tool for those persons who don‘t know the basics of Stock Market but wish to invest in it. On the other hand investing in safer instruments like Bank Deposits. at the same time minimize the risk. Government Bonds…. So he must do his homework very clearly. . but the risk associated is also very high. While choosing the fund it is also very necessary that he chose funds investing in different sectors. But while investing they must consider there investment objectives.Thus on the whole it can be concluded that there is no conclusive evidence which suggest that performance of mutual fund scheme portfolio is superior to others. But it is for sure performance of the most of the funds in better. A lot of research has to be done onto it. Bu t the returns are very less in comparison to other instruments. risk taking capability. Right now practical application of investing in mutual fund by using Value Averaging appears to be difficult. Depending upon these they must choose the instrument in which they should invest. Each investment alternative has its own strengths and weaknesses. Selecting a fund is not an easy task. As mutual fund investments are taken. In last we can conclude that those investors who wish to get good returns with minimum risk they must invest in mutual funds.
i nd 2 Edition.hdfcfund.com www.com www.com www.com www. .co m Book s Verma.utimf.jmmutual.com www.licmutual.reliancemutual.com www.com www.franklintempletonindia.kotakmutual.com www.amfiindia.Websites www.mutualfundindia.C.com www.dspmlmutualfund.sbimf. Bharat Pu b lcations.. Dr J. ―Mutual Funds & Investment Portfolio‖.com www.valueresearchindia.com www.
―Securi ty Analys is and Portfol io Manag ement‖ .R. Kothar i. New Age Interna tional Pub lish ers. nd 2 Reprin t.Pandia n. Vikas Publica tions. C. Punith avathy. ―Rese arch Metho dolo gy ‖. 2005. ..