CONTENTS

Chapter-1- Introduction

(A) Company profile- HDFC AMC LTD. 1

(B) Introduction to project 8
(C) Introduction to mutual funds 9

Meaning
 Types 11
 Mutual fund industry in India 22
(A) History 22
(B) No. Of AMC’S in India 26
 Performance of mutual funds in India 32
 Association of Mutual Funds in India.(AMFI) 35
 Benefits of mutual funds 39
 Drawbacks of mutual funds 42
 Future of mutual funds in India 43
Chapter-2- Objective of study 44
Chapter-3- Research methodology 45
Chapter-4- Comparative Analysis 48
Chapter-5- Inferences drawn 99
Chapter-6- Swot Analysis 104
Chapter-7- Conclusion 105
Chapter-8- Questionnaire 106
Chapter-9- Bibliography 109

(A) INTRODUCTION TO PROJECT-

The name of the project is comparative Analysis of Performance and portfolio of Selected
mutual Fund and Investment Pattern of Investor in India. Analysis is being done at HDFC
MUTUAL FUNDS CHANDIGARH.

A MUTUAL FUND is an investment company designed to pool the funds of smaller

investors and place them under professional management. A mutual fund allows small
investors to diversify their portfolios. When a mutual fund is formed, it issues a prospectus
detailing its intended investment strategy, and it is not permitted to deviate from that strategy
without public disclosure. A mutual fund prospectus also details the fees investors will be
charged, which can be substantial. In the US, a mutual fund is regulated by the SEC. A mutual
fund may invest in stocks, bonds, options, futures, currencies, and commodities. Although any
specific mutual fund is required to follow a specific investing strategy, the range of strategies
available is wide. A mutual fund such as an index fund may attempt to replicate market or
sector index. A mutual fund may specialize in large-cap, small-cap or even micro-cap stocks.
Investors seeking regular income can invest in a mutual fund that specializes in government
bonds or, for the more aggressive corporate debt.

For comparative analysis of performance of mutual funds in India I have taken 4 INDIAN
AMC’S EQUITY MUTUL FUND SCHEMES. These are

1. HDFC Equity Fund

2. FIDELITY Equity Fund
3. RELIANCE Vision Fund
4. FRANKLIN INDIA Blue Chip Fund

For comparing the performance of these mutual fund schemes, I have used four different
financial ratios, which generally depicts risk and return relationship, concerned with these
funds then performance will be deduced by interpreting the result of the ratios that which fund
is performing well on the financial basis.

(B) INTRODUCTION TO MUTUAL FUNDS-

MUTUAL FUNDS

A MUTUAL FUND is simply a financial intermediary that allows a group of investors to pool
their money together with a predetermined investment objective. The mutual fund will have a
fund manager who is responsible for investing the pooled money into specific securities
(usually stocks or bonds). When you invest in a mutual fund, you are buying shares (or
portions) of the mutual fund and become a shareholder of the fund. Mutual funds are one of
the best investments ever created because they are very cost efficient and very easy to invest
in (you don't have to figure out which stocks or bonds to buy). If you would like to know the
history of mutual funds,

By pooling money together in a mutual fund, investors can purchase stocks or bonds with
much lower trading costs than if they tried to do it on their own. But the biggest advantage to
mutual funds is diversification.

Diversification is the idea of spreading out your money across many different types of
investments. When one investment is down another might be up. Choosing to diversify your
investment holdings reduces your risk tremendously.

The most basic level of diversification is to buy multiple stocks rather than just one stock.
Mutual funds are set up to buy many stocks (even hundreds or thousands). Beyond that, you
can diversify even more by purchasing different kinds of stocks, then adding bonds, then
international, and so on. It could take you weeks to buy all these investments, but if you
purchased a few mutual funds you could be done in a few hours because mutual funds
automatically diversify in a predetermined category of investments (i.e. - growth companies,
low-grade corporate bond )
A MUTUAL FUND is an investment company designed to pool the funds of smaller
investors and place them under professional management. A mutual fund allows small
investors to diversify their portfolios. When a mutual fund is formed, it issues a prospectus
detailing its intended investment strategy, and it is not permitted to deviate from that strategy
without public disclosure. A mutual fund prospectus also details the fees investors will be
charged, which can be substantial. In the US, a mutual fund is regulated by the SEC. A mutual
fund may invest in stocks, bonds, options, futures, currencies, and/or commodities. Although
any specific mutual fund is required to follow a specific investing strategy, the range of
strategies available is wide. A mutual fund such as an index fund may attempt to replicate
market or sector index. A mutual fund may specialize in large-cap, small-cap or even micro-
cap stocks. Investors seeking regular income can invest in a mutual fund that specializes in
government bonds or, for the more aggressive, corporate debt.

STOCKS

Stocks represent shares of ownership in a public company. Examples of public companies

include IBM, Microsoft, Ford, Coca-Cola, and General Motors etc. Stocks are the most
common ownership investment traded on the market.

BONDS

Bonds are basically a chance for you to lend your money to the government or a company.
You can receive interest and your principle back over predetermined amounts of time. Bonds
are the most common lending investment traded on the market.

There are many other types of investments other than stocks and bonds (including annuities,
real estate, and precious metals), but the majority of mutual funds invest in stocks and/or
bonds.

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

In the working of mutual fund, there are following steps-

1. First of all, Asset Management Company issues new fund offer.
2. Interested investors invest the money with fund manager.
3. Then fund manager invests the money in different profitable securities.
4. Then securities generate returns.
5. These returns are passed back to investors.
Returns are given to investors according to the units given to them which is determined
according to the investment made by them in the mutual funds.
ORGANIZATION OF MUTUAL FUND-

For organization of mutual fund there is a set criterion which has to be opted.
There are many entities involved and the diagram below illustrates the organizational set up
of a mutual fund:
SPONSORS
The sponsor establishes the mutual fund and gets it registered with SEBI. The mutual fund
needs to be constituted in the form of a trust and the instrument of the trust should be in the
form of a deed registered under the provisions of the Indian Registration Act, 1908. The
sponsor is required to contribute at least 40% of the minimum net worth (Rs. 10 crore) of the
asset management company. The board of trustees manages the MF and the sponsor executes
the trust deeds in favor of the trustees. It is the job of the MF trustees to see that schemes
floated and managed by the AMC appointed by the trustees are in accordance with the trust
deed and SEBI guidelines.

ASSET MANAGEMENT COMPANY

The sponsor also appoints the asset management company (AMC) for the investment and
administrative functions. The AMC does the research, the managers the corpus of the fund. It
launches the various schemes of the fund, manages them, and then liquidates them at the end
of their term. It also takes care of the other administrative work of the fund. It receives an
annual management fee from the fund for its services.

BOARD OF TRUSTEES

The board of trustees is responsible for protecting the investor’s interests. Under the SEBI
regulation 1996, trustee means a person who holds the property of the mutual fund in trust, for
the benefit of the unit holders. The word “trustee” can be used to denote board of trustees. In
case a trustee company governs the trust, it can be used to denote either the trustee company
or its directors.

CUSTODIANS

The custodians are appointed by the sponsor to look after the transfer and storage of
securities. Only a registered custodian under the SEBI Regulation can act as a custodian of a
mutual fund. The functions of custodian a cover a wider range of services like safe keeping of
securities bid settlement, corporate action, and transfer agent. In addition, they may be
contracted to perform administrative functions like fund accounting, cash management and
other similar functions
TYPES OF MUTUAL FUNDS SCHEMES-

Wide variety of Mutual Fund Schemes exists to cater to the needs such as financial position,
risk tolerance and return expectations etc. The table below gives an overview into the existing
types of schemes in the Industry.

Equity / Growth Fund

Invest primarily in equity Liquid Funds
and equity related Provide high level of liquidity
instruments. by investing in money market
and debt instruments.
Children's Gift Fund
Children's Gift Fund Debt/ Income Fund
Invest in money market and
debt instruments and provide
optimum balance of yield, ...

Fixed Maturity Plan

Invest primarily in Debt /
Money Market Instruments
and Government Securities...
Mutual Fund Schemes

1. By Structure

 Open - Ended Schemes

 Close - Ended Schemes
 Interval Schemes

2. By Investment Objective

 Growth Schemes
 Income Schemes
 Balanced Schemes
 Money Market Schemes

3. Other Schemes

 Tax Saving Schemes

 Special Schemes
 Index Schemes
 Sector specific schemes

CLOSED ENDED MUTUAL FUND

A closed-end mutual fund has a set number of shares issued to the public through an initial
public offering. These funds have a stipulated maturity period generally ranging from 3 to 15
years.

The fund is open for subscription only during a specified period. 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. nice underwritten, closed-end funds
trade on stock exchanges like stocks or bonds. The market price of closed-end funds is
determined by supply and demand and not by net-asset value (NAV), as is the case in open-
end funds. Usually closed mutual funds trade at discounts to their underlying asset value.

OPEN ENDED MUTUAL FUND

An open-end mutual fund is a fund that does not have a set number of shares. It continues to
sell shares to investors and will buy back shares when investors wish to sell. Units are bought
and sold at their current net asset value.

Open-end funds keep some portion of their assets in short-term and money market securities
to provide available funds for redemptions. A large portion of most open mutual funds is
invested in highly liquid securities, which enables the fund to raise money by selling
securities at prices very close to those used for valuations.

LARGE CAP FUNDS

Large cap funds are those mutual funds, which seek capital appreciation by investing
primarily in stocks of large blue chip companies with above-average prospects for earnings
growth.

Different mutual funds have different criteria for classifying companies as large cap.
Generally, companies with a market capitalization in excess of Rs. 1000 crore are known
large cap companies. Investing in large caps is a lower risk-lower return proposition (vis-à-vis
mid cap stocks), because such companies are usually widely researched and information is
widely available.

MID CAP FUNDS

Mid cap funds are those mutual funds, which invest in small / medium sized companies. As
there is no standard definition classifying companies as small or medium, each mutual fund
has its own classification for small and medium sized companies. Generally, companies with
a market capitalization of up to Rs.500 crores are classified as small. Those companies that
have a market capitalization between Rs. 500 crores and Rs. 1,000 crores are classified as
medium sized.

Big investors like mutual funds and Foreign Institutional Investors are increasingly investing
in mid caps nowadays because the price of large caps has increased substantially. Small / mid
sized companies tend to be under researched thus they present an opportunity to invest in a
company that is yet to be identified by the market. Such companies offer higher growth
potential going forward and therefore an opportunity But mid cap funds are very volatile and
tend to fall like a pack of cards in bad times. So, caution should be exercised while investing
in mid cap mutual funds.

EQUITY MUTUAL FUNDS

Equity mutual funds are also known as stock mutual funds. Equity mutual funds invest pooled
amounts of money in the stocks of public companies.

Stocks represent part ownership, or equity, in companies, and the aim of stock ownership is to
see the value of the companies increase over time. Stocks are often categorized by their
market capitalization (or caps), and can be classified in three basic sizes: small, medium, and
large. Many mutual funds invest primarily in companies of one of these sizes and are thus
classified as large-cap, mid-cap or small-cap funds. Equity fund managers employ different
styles of stock picking when they make investment decisions for their portfolios. Some fund
managers use a value approach to stocks, searching for stocks that are undervalued when
compared to other, similar companies. Another approach to picking is to look primarily at
growth, trying to find stocks that are growing faster than their competitors, or the market as a
whole. Some managers buy both kinds of stocks, building a portfolio of both growth and
value stocks.
BALANCED FUND

Balanced fund is also known as hybrid fund. It is a type of mutual fund that buys a
combination of common stock, preferred stock, bonds, and short-term bonds, to provide both
income and capital appreciation while avoiding excessive risk.
Balanced funds provide investor with an option of single mutual fund that combines both
growth and income objectives, by investing in both stocks (for growth) and bonds (for
income). Such diversified holdings ensure that these funds will manage downturns in the
stock market without too much of a loss. But on the flip side, balanced funds will usually
increase less than an all-stock fund during a bull market

GROWTH FUNDS

Growth funds are those mutual funds that aim to achieve capital appreciation by investing in
growth stocks. They focus on those companies, which are experiencing significant earnings or
revenue growth, rather than companies that pay out dividends.

Growth funds tend to look for the fastest-growing companies in the market. Growth managers
are willing to take more risk and pay a premium for their stocks in an effort to build a
portfolio of companies with above-average earnings momentum or price appreciation.In
general, growth funds are more volatile than other types of funds, rising more than other funds
in bull markets and falling more in bear markets. Only aggressive investors, or those with
enough time to make up for short-term market losses, should buy these funds.

NO-LOAD MUTUAL FUNDS

Mutual funds can be classified into two types - Load mutual funds and No-Load mutual
funds. Load funds are those funds that charge commission at the time of purchase or
redemption. They can be further subdivided into (1) Front-end load funds and (2) Back-end
load funds. Front-end load funds charge commission at the time of purchase and back-end
load funds charge commission at the time of redemption.
On the other hand, no-load funds are those funds that can be purchased without commission.
No load funds have several advantages over load funds. Firstly, funds with loads, on average,
consistently under perform no-load funds when the load is taken into consideration in
performance calculations. Secondly, loads understate the real commission charged because
they reduce the total amount being invested. Finally, when a load fund is held over a long
time period, the effect of the load, if paid up front, is not diminished because if the money
paid for the load had invested, as in a no-load fund, it would have been compounding over the
whole time period.

EXCHANGE TRADED FUNDS

Exchange Traded Funds (ETFs) represent a basket of securities that are traded on an
exchange. An exchange traded fund is similar to an index fund in that it will primarily invest
in the securities of companies that are included in a selected market index. An ETF will invest
in either all of the securities or a representative sample of the securities included in the index.
The investment objective of an ETF is to achieve the same return as a particular market index.

Exchange traded funds rely on an arbitrage mechanism to keep the prices at which they trade
roughly in line with the net asset values of their underlying portfolios.

VALUE FUNDS

Value funds are those mutual funds that tend to focus on safety rather than growth, and often
choose investments providing dividends as well as capital appreciation. They invest in
companies that the market has overlooked, and stocks that have fallen out of favour with
mainstream investors, either due to changing investor preferences, a poor quarterly earnings
report, or hard times in a particular industry.

Value stocks are often mature companies that have stopped growing and that use their
earnings to pay dividends. Thus value funds produce current income (from the dividends) as
well as long-term growth (from capital appreciation once the stocks become popular again).
They tend to have more conservative and less volatile returns than growth funds.

MONEY MARKET MUTUAL FUNDS

A money market fund is a mutual fund that invests solely in money market instruments.
Money market instruments are forms of debt that mature in less than one year and are very
liquid. Treasury bills make up the bulk of the money market instruments. Securities in the
money market are relatively risk-free.

Money market funds are generally the safest and most secure of mutual fund investments. The
goal of a money-market fund is to preserve principal while yielding a modest return. Money-
market mutual fund is akin to a high-yield bank account but is not entirely risk free. When
investing in a money-market fund, attention should be paid to the interest rate that is being
offered.

INTERNATIONAL MUTUAL FUNDS

International mutual funds are those funds that invest in non-domestic securities markets
throughout the world. Investing in international markets provides greater portfolio
diversification and let you capitalize on some of the world's best opportunities. If investments
are chosen carefully, international mutual fund may be profitable when some markets are
rising and others are declining.

However, fund managers need to keep close watch on foreign currencies and world markets
as profitable investments in a rising market can lose money if the foreign currency rises
against the dollar

SECTOR MUTUAL FUNDS

Sector mutual funds are those mutual funds that restrict their investments to a particular
segment or sector of the economy. These funds concentrate on one industry such as
infrastructure, heath care, utilities, pharmaceuticals etc. The idea is to allow investors to place
bets on specific industries or sectors, which have strong growth potential.

These funds tend to be more volatile than funds holding a diversified portfolio of securities in
many industries. Such concentrated portfolios can produce tremendous gains or losses,
depending on whether the chosen sector is in or out of favour.

INDEX FUNDS

An index fund is a type of mutual fund that builds its portfolio by buying stock in all the
companies of a particular index and thereby reproducing the performance of an entire section
of the market. The most popular index of stock index funds is the Standard & Poor's 500. An
S&P 500 stock index fund owns 500 stocks-all the companies that are included in the index.

Investing in an index fund is a form of passive investing. Passive investing has two big
advantages over active investing. First, a passive stock market mutual fund is much cheaper to
run than an active fund. Second, a majority of mutual funds fail to beat broad indexes such as
the S&P.

FUND OF FUNDS

A fund of funds is a type of mutual fund that invests in other mutual funds. Just as a mutual
fund invests in a number of different securities, a fund of funds holds shares of many different
mutual funds. Fund of funds are designed to achieve greater diversification than traditional
mutual funds. But on the flipside, expense fees on fund of funds are typically higher than
those on regular funds because they include part of the expense fees charged by the
underlying funds.
MUTUAL FUND INDUSTRY IN INDIA

(A) HISTORY

GLOBAL HISTORY- Introduced in Belgium in 1822. This form of investment soon

spread to Great Britain and France. Mutual funds became popular in the United States in the
1920s and continue to be popular since the 1930s, especially open-end mutual funds. Mutual
funds experienced a period of tremendous growth after World War II, especially in the 1980s
and 1990s.

HISTORY OF MUTUAL FUND INDUSTRY IN INDIA-

The origin of mutual fund industry in India is with the introduction of the concept of mutual
fund by UTI in the year 1963. Though the growth was slow, but it accelerated from the year
1987 when non-UTI players entered the industry. UTI remained the only fund till the
government allowed public sector banks to start mutual funds in 1987. Major PSU banks like
SBI, Canara Bank, Indian Bank and Punjab National Bank started offering their products.
Insurance giants LIC and GIC also started their own mutual fund subsidiaries. They were all
reasonably successful as equity investments gained popularity during the bull market of the
early nineties.

In the past decade, Indian mutual fund industry had seen dramatic improvements, both quality
wise as well as quantity wise. Before, the monopoly of the market had seen an ending phase;
the Assets under Management (AUM) were Rs. 67bn. The private sector entry to the fund
family raised the AUM to Rs. 470 ban in March 1993 and till Putting the AUM of the Indian
Mutual Funds Industry into comparison, the total of it is less than the deposits of SBI alone,
constitute less than 11% of the total deposits held by the Indian banking industry.
The main reason of its poor growth is that the mutual fund industry in India is new in the
country. Large sections of Indian investors are yet to be intellectuated with the con
April 2004; it reached the height of 1,540 ban Putting the AUM of the Indian Mutual Funds
Industry into comparison, the total of it is less than the deposits of SBI alone, constitute less
than.
11% of the total deposits held by the Indian banking industry.

The main reason of its poor growth is that the mutual fund industry in India is new in the
country. Large sections of Indian investors are yet to be intellectuated with the concept.
Hence, it is the prime responsibility of all mutual fund companies, to market the product
correctly abreast of selling. Private sector players were allowed into the industry in 1993 after
SEBI was established as the market regulator. A host of private banks and international fund
houses started their operations and investors could chose from many innovative products.
SEBI brought out comprehensive guidelines for establishment and management of mutual
funds in 1996.

In 2003, the Unit Trust of India, which was not under SEBI regulation, was split into two
parts, UTI Mutual Fund (UTI MF) and a specified undertaking of UTI or UTI-I. UTI MF was
brought under SEBI regulations while UTI-I was kept under direct government control since
its schemes offered guaranteed returns.

From just Rs.25 crore under management in 1965, the total funds managed by the mutual fund
industry stood at over Rs.2,91,000 crore as of September 2006. The industry has matured very
fast over the last few years with a large number of players and diverse product

The mutual fund industry can be broadly put into four phases according to the development of
the sector. Each phase is briefly described as under.
PHASES-FIRST PHASE 1964-87

Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up by
the Reserve Bank of India and functioned under the Regulatory and administrative control of
the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial
Development Bank of India (IDBI) took over the regulatory and administrative control in
place of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the end of 1988
UTI had Rs.6,700 crores of assets under management.

SECOND PHASE - 1987-1993 (ENTRY OF PUBLIC SECTOR

FUNDS)

Entry of non-UTI mutual funds. SBI Mutual Fund was the first followed by Can bank Mutual
Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov
89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC in 1989 and GIC in
1990. The end of 1993 marked Rs.47,004 as assets under management.

THIRD PHASE - 1993-2003 (ENTRY OF PRIVATE SECTOR

FUNDS)

With the entry of private sector funds in 1993, a new era started in the Indian mutual fund
industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year
in which the first Mutual Fund Regulations came into being, under which all mutual funds,
except UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged
with Franklin Templeton) was the first private sector mutual fund registered in July 1993.

The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and
revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI
(Mutual Fund) Regulations 1996.

The number of mutual fund houses went on increasing, with many foreign mutual funds
setting up funds in India and also the industry has witnessed several mergers and acquisitions.
As at the end of January 2003, there were 33 mutual funds with total assets of Rs. 1,21,805
crores. The Unit Trust of India with Rs.44,541 crores of assets under management was way
ahead of other mutual funds.

FOURTH PHASE - SINCE FEBRUARY 2003

This phase had bitter experience for UTI. It was bifurcated into two separate entities. One is
the Specified Undertaking of the Unit Trust of India with AUM of Rs.29,835 crores (as on
January 2003). The Specified Undertaking of Unit Trust of India, functioning under an
administrator and under the rules framed by Government of India and does not come under
the purview of the Mutual Fund Regulations

Private sector players were allowed into the industry in 1993 after SEBI was established as
the market regulator. A host of private banks and international fund houses started their
operations and investors could chose from many innovative products. SEBI brought out
comprehensive guidelines for establishment and management of mutual funds in 1996.

In 2003, the Unit Trust of India, which was not under SEBI regulation, was split into two
parts, UTI Mutual Fund (UTI MF) and a specified undertaking of UTI or UTI-I. UTI MF was
brought under SEBI regulations while UTI-I was kept under direct government control since
its schemes offered guaranteed returns.

From just Rs.25 crore under management in 1965, the total funds managed by the mutual fund
industry stood at over Rs.2,91,000 crore as of September 2006.
(B) NO. OF AMC’S IN INDIA

 ABN Amro Asset Management co. Ltd.

 Benchmark Asset Management co. Ltd.

 Birla Asset Management co. Ltd

 BOB Asset Management co. Ltd

 Canbank Asset Management co. Ltd

 Chola Asset Management co. Ltd

 Deutsche Asset Management co. Ltd

 DSP Asset Management co. Ltd

 Escorts Asset Management co. Ltd

 Fidelity Asset Management co. Ltd

 Franklin Templeton Investments

 HDFC Asset Management co. Ltd

 HSBC Asset Management co. Ltd

 ING Vysya Asset Management co. Ltd

 JM Financial Asset Management co. Ltd

 Kotak Mahindra Asset Management co. Ltd

 LIC Asset Management co. Ltd

 Morgan Stanley Asset Management co. Ltd

 Principal Asset Management co. Ltd

  Prudential ICICI Asset Management co. Ltd

 Reliance Asset Management co. Ltd

 Sahara Asset Management co. Ltd

 SBI Asset Management co. Ltd

 Standard Chartered Asset Management co. Ltd

 Sundaram Asset Management co. Ltd

 Tata Asset Management co. Ltd

 Taurus Asset Management co. Ltd

 UTI Asset Management co. Ltd

THE MAJOR MUTUAL FUND HOUSES IN INDIA ARE:

HDFC MUTUAL FUND

HDFC Mutual Fund has been one of the best performing funds in recent years. The sponsors
of the fund are housing finance major HDFC and British investment company Standard Life

Investments. The paid up capital of the AMC is Rs. 25.161 crore.

Standard Life is one of the better known investment companies in the UK. The company
offers pension fund management, money market funds and private equity among other
products. The Standard Life group has a history of over 175 years and has over $190 billion in
assets under management globally.

The trustee of the fund is HDFC Trustee Company Limited, a subsidiary of HDFC Limited.
The chairman of the board of trustees is Anil Kumar Hirjee, vice chairman of Bombay
Burmah Trading Corporation. Other members of the board include Keki Mistry of HDFC and
James Aird of Standard Life.
The AMC, HDFC Asset Management Company Limited, is owned between HDFC and
Standard Life with HDFC holding slightly more than 50 per cent of the shares. The board of
directors has among its members Alexander Crombie of Standard Life, former head of Kodak
India H Dhanrajgir, former head of BASF India P M Thampi, and Renu S Karnad of HDFC.
The management of the AMC is headed by Milind Barve, managing director.

In 2003, HDFC Asset Management Company took over the asset management business of
Zurich India Mutual Fund. Subsequently, all the schemes of Zurich Mutual Fund in India had
been transferred to HDFC Mutual Fund and renamed as HDFC schemes

PRUDENTIAL ICICI

Prudential ICICI is the largest private sector mutual fund in the country with assets of over
Rs.43,281 crore under management as of February 2007. The sponsors of the fund are
Prudential Plc, one of the largest insurance companies in Europe, and ICICI Bank, the second
largest Indian bank.

Prudential group has assets of over $300 billion under management globally. Apart from the
main insurance operations, the group also owns fund management firm M&G and internet
bank Egg.

In all, 55 per cent of the asset management company, Prudential ICICI Asset Management
Company, is held by Prudential Plc and the balance by ICICI Bank. There are reports that
ICICI Bank is trying to acquire a 6 per cent stake in the AMC from Prudential and gain
majority control.

FRANKLIN TEMPLETON

One of the largest and most high profile mutual funds in the country, Franklin Templeton has
over Rs.22,102 crore under management as of February 2007. The sponsor of the fund is
Templeton International.
 Templeton is one of the largest mutual funds globally. Its parent company Franklin
Resources and Subsidiaries have over $400 billion under management.

The trustee of the fund is Franklin Templeton Trustee Services Private Limited. The board of
directors of the trustee includes Gregory McGowan and Stephen Dover of Templeton and
Bharat Doshi of the Mahindra group.

Franklin Templeton Asset Management Private Limited acts as the fund manager. A majority of
75 per cent of the asset management company's equity is held by Templeton and the balance by
the Raheja group. The board of directors of the company has Gregory Johnson, president of
Franklin Templeton USA as its chairman. Deepak Satwalekar of HDFC and Rajan Raheja are
the other prominent members.

The fund management is headed by Mark Mobius, who is also a director of the AMC. Rated as
one of the best fund managers in the world, Mark Mobius is probably the best known emerging
markets fund manager.

DSP MERRILL LYNCH

One of the more prominent private mutual funds in the country, DSP Merrill Lynch has over
Rs.13,638 crore under its management as of February 2007. The sponsor of the fund is DSP
Merrill Lynch Limited, one of India's largest investment bankers. DSP Merrill Lynch is a joint
venture between domestic stock brokerage DSP and Merrill Lynch. The US financial services
major Merrill Lynch holds 40 per cent stake in the joint venture.

Merrill Lynch is one of the largest investment banks in the world and ranks 53rd on the Fortune
500 list of largest American companies with revenues of over $32 billion. The company is one
of the best known names on Wall Street and has assets of over $500 billion under its
management worldwide.

DSP Merrill Lynch Trustee Company Private Limited is the trustee of the fund and is owned
between Merrill Lynch, DSP Merrill Lynch and Hemendra Kothari of DSP.
FIDELITY INDIA

A recent entrant into the Indian mutual fund industry, Fidelity launched its first domestic fund
in April this year. However, Fidelity has been managing India specific funds for overseas
investors for over 10 years now. Its exposure to Indian markets through such funds stands at
over $2.5 billion at present, which makes Fidelity one of the largest FIIs investing in the
country.

Globally, Fidelity is the grand daddy of all mutual funds with assets of over $1.2 trillion under
management. In the US alone it has over $850 billion under management and accounts for 3
to 5 per cent of the daily trading volumes on the New York stock exchange. Privately owned
Fidelity is the best known brand in the fund management business and its flagship fund
Magellan is probably the best known fund among American investors.

The sponsor of the fund is Fidelity International Investment Advisors. The trustee is Fidelity
Trustee Company Private limited and has Ann Stock of Fidelity Investments and former
TRAI chairman Justice S S Sodhi on its board among others.

The AMC of the fund is Fidelity Fund Management Private Limited. Simon Haslam of
Fidelity International, former Castrol India CEO Ramesh Savoor and former CEO of Bank of
America Arun Duggal are among the directors of the company. Fidelity International
Investment Advisors holds 75 per cent stake in the AMC. Arun Mehra, who was earlier with
Fidelity UK, heads fund management.

As of February 2007, Fidelity India had over Rs.5,671 crore under its management.
TATA MUTUAL FUND

Promoted by the Tata group, Tata MF is one of the better known private sector funds in the
country. The fund has over Rs.14,198 crore under its management as of February 2007. The
sponsors of the fund are Tata Sons Limited and Tata Investment Corporation Limited.

The trustee of the fund is Tata Trustee Company Private Limited. The board of trustees is
headed by former HLL chief S M Data as chairman. J N Godrej of Godrej & Boyce and Ishaat
Hussain of Tata Sons are also on the board of trustees. Tata Sons and Tata Investment
Corporation hold equal stakes in the trustee company.

The AMC, Tata Asset Management Limited, has F K Karavana of Tata Sons as its chairman.
Other directors include A R Gandhi of Tata Sons and former executive director of IMF, S S
Marathe. The management of the AMC is headed by Ved Prakash Chaturvedi, managing
director. Tata Sons holds a majority stake in the AMC with the balance being held by Tata
Investment Corporation.

Fund management of equity schemes is headed by S Sankaranarayanan and that of debt funds
by Murthy Nagarajan.

UTI MUTUAL FUND

The most experienced player in the Indian mutual fund industry, UTI was almost a generic
term for mutual fund schemes till the sector opened up. However, the fund house disappointed
most of its investors for a long period starting mid-nineties. From the verge of a collapse, the
government bailed out the fund before restructuring it. After the restructuring, the fund has
recovered some of its stature helped equally by professional management and a booming
market.
The fund's sponsors are public sector financial giants like Life Insurance Corporation, SBI,
Bank of Baroda and Punjab National Bank. The sponsors hold equal stakes in the asset
management company, UTI Asset Management Company Private Limited. The asset
management company has R H Patil, the former managing director of the National Stock
Exchange, as its chairman. The current SEBI chairman M Damodaran was his predecessor.

The fund management team is headed by A K Sridhar, chief investment officer. The company
employs four different registrars for its various schemes. Associate company UTI Technology
Consultants and Karvy Computershare act as registrars and transfer agents for majority of the
schemes. Citibank, HDFC Bank and Stock Holding Corporation are the fund's cu stodians.

PERFORMANCE OF MUTUAL FUNDS IN INDIA

The year was 1963. Unit Trust of India invited investors or rather to those who believed in
savings, F to park their money in UTI Mutual Fund or 30 years it goaled without a single
second player. Though the 1988 year saw some new mutual fund companies, but UTI
remained in a monopoly position.

The performance of mutual funds in India in the initial phase was not even closer to
satisfactory level. People rarely understood, and of course investing was out of question. But
yes, some 24 million shareholders was accustomed with guaranteed high returns by the
begining of liberalization of the industry in 1992. This good record of UTI became marketing
tool for new entrants. The expectations of investors touched the sky in profitability factor.
However, people were miles away from the praparedness of risks factor after the
liberalization.

The Assets Under Management of UTI was Rs. 67bn. by the end of 1987. Let me concentrate
about the performance of mutual funds in India through figures. From Rs. 67bn. the Assets
Under Management rose to Rs. 470 bn. in March 1993 and the figure had a three times higher
performance by April 2004. It rose as high as Rs. 1,540bn. The net asset value (NAV) of
mutual funds in India declined when stock prices started falling in the year 1992. Those days,
the market regulations did not allow portfolio shifts into alternative investments. There were
rather no choice apart from holding the cash or to further continue investing in shares. One
more thing to be noted, since only closed-end funds were floated in the market, the investors
disinvested by selling at a loss in the secondary market.
The performance of mutual funds in India suffered qualitatively. The 1992 stock market
scandal, the losses by disinvestments and of course the lack of transparent rules in the where
about rocked confidence among the investors. Partly owing to a relatively weak stock market
performance, mutual funds have not yet recovered, with funds trading at an average discount
of 1020 percent of their net asset value.
The supervisory authority adopted a set of measures to create a transparent and competitve
environment in mutual funds. Some of them were like relaxing investment restrictions into the
market, introduction of open-ended funds, and paving the gateway for mutual funds to launch
pension schemes. The measure was taken to make mutual funds the key instrument for long-
term saving. The more the variety offered, the quantitative will be investors.

At last to mention, as long as mutual fund companies are performing with lower risks and
higher profitability within a short span of time, more and more people will be inclined to
invest until and unless they are fully educated with the dos and donts of mutual funds. The
year 1993 was a remarkable turning point in the Indian Mutual Fund industry.

The stock investment scenario till then was restricted to UTI (Unit Trust of India) and public
sector. This year marked the entry of private sector mutual funds, giving the Indian investors a
wider choice of selecting mutual funds. From then on, the graph of mutual fund players has
been on the rise with many foreign mutual funds also setting up funds in India. The industry
has also witnessed several mergers and acquisitions proving it advantageous to the Indian
investors. Are mutual funds emerging as preferred investment option? Are they safe and will
your money be secured with them? Before proceeding to answer these questions, a look at the
February 2006, Indian bull market scenario is worth a mention

For the first time ever, stock market indices in India are at a record high. The Bombay Stock
Exchange closed above the 10,000-mark for the first time ever, an ecstatic event in the history
of the Stock exchange. Market savvy Indian investors have been busy transacting across
sectors such as banking automobile, sugar, consumer durable, fast moving consumer goods
(FMCG) and pharmaceutical scripts. And, the Union Finance Minister, Mr.P.Chidambaram,
has responded positively and advised investors to take informed decisions or invest through
mutual funds.

Mutual funds are not considered any more as obscure investment opportunities. The mutual
funds assets have registered an annual growth rate of 9% over the past 5 years. Considering
the current trend and the relative positive response of the Indian economy, a much bigger
jump is on the anvil.

With the Sensex on a scorching bull rally, many investors prefer to trade on stocks
themselves. Mutual funds are more balanced since they diversify over a large number of
stocks and sectors. In the rally of 2000, it was noticed that mutual funds did better than the
stocks mainly due to prudent fund management based on the virtues of diversification

Different Indian mutual funds allow investors various solutions ranging from retirement
planning and buying a house to planning for child's education or marriage. Tax-wise stocks
and mutual funds work similarly since long-term capital gains from both stocks and equity-
oriented mutual funds are tax-free.

Well, what are the charges, fees and expenses associated with investing in Indian mutual
funds? At the time of entry into a mutual fund, you have to pay an additional charge or entry
load along with the value of units purchased

When you exit from the scheme, you will get back the value of the units less the exit load
charges. If you want to switch from one type of mutual fund investment to another, you will
be required to pay the exchange fees. Advisory fees, broker fees, audit fees and registrar fees
are some of the other recurring expenditures that would be charged to you. These expenses
involve administrative and other running costs.

In India, SEBI (The Securities and Exchange Board of India) is the regulating authority that
SEBI formulates policies and regulates the mutual funds to protect the interest of the Indian
investors.
ASSOCIATION OF MUTUAL FUNDS IN INDIA (AMFI)

With the increase in mutual fund players in India, a need for mutual fund association in India
was generated to function as a non-profit organization. Association of Mutual Funds in India
(AMFI) was incorporated on 22nd August, 1995.

AMFI is an apex body of all Asset Management Companies (AMC) which has been

registered with SEBI. Till date all the AMCs are that have launched mutual fund schemes are
its members. It functions under the supervision and guidelines of its Board of Directors

Association of Mutual Funds India has brought down the Indian Mutual Fund Industry to a
professional and healthy market with ethical lines enhancing and maintaining standards. It
follows the principle of both protecting and promoting the interests of mutual funds as well as
their unit holders.

THE OBJECTIVES OF ASSOCIATION OF MUTUAL FUNDS

IN INDIA

The Association of Mutual Funds of India works with 30 registered AMCs of the country. It
has certain defined objectives which juxtaposes the guidelines of its Board of Directors. The
objectives are as follows:

This mutual fund association of India maintains a high professional and ethical standards in
all areas of operation of the industry.

It also recommends and promotes the top class business practices and code of conduct which
is followed by members and related people engaged in the activities of mutual fund and asset
management. The agencies who are by any means connected or involved in the field of capital
markets and financial services also involved in this code of conduct of the association.

AMFI interacts with SEBI and works according to SEBIs guidelines in the mutual fund
industry.

Association of Mutual Fund of India do represent the Government of India, the Reserve Bank
of India and other related bodies on matters relating to the Mutual Fund Industry.

It develops a team of well qualified and trained Agent distributors. It implements a

programme of training and certification for all intermediaries and other engaged in the mutual
fund industry.

AMFI undertakes all India awarness programme for investors inorder to promote proper
understanding of the concept and working of mutual funds.

At last but not the least association of mutual fund of India also disseminate informations on
Mutual Fund Industry and undertakes studies and research either directly or in association
with other bodies.

THE SPONSORERS OF ASSOCIATION OF MUTUAL FUNDS

IN INDIA

BANK SPONSORED

1.SBI Fund Management Ltd.

2.BOB Asset Management Co. Ltd.

3.Canbank Investment Management Services Ltd.

4.UTI Asset Management Company Pvt. Ltd

5.Institutions
6. GIC Asset Management Co. Ltd.

7. Jeevan Bima Sahayog Asset Management Co. Ltd.

PRIVATE SECTOR INDIAN:-

(a) BenchMark Asset Management Co. Pvt. Ltd.

(b) Cholamandalam Asset Management Co. Ltd.

© Credit Capital Asset Management Co. Ltd.

(d) Escorts Asset Management Ltd.

(e) JM Financial Mutual Fund

(f) Kotak Mahindra Asset Management Co. Ltd.

(g) Reliance Capital Asset Management Ltd.

(h) Sahara Asset Management Co. Pvt. Ltd

(i)_Sundaram Asset Management Company Ltd.

(j)Tata Asset Management Private Ltd.

PREDOMINANTLY INDIA JOINT VENTURES:-

1.Birla Sun Life Asset Management Co. Ltd.

2.DSP Merrill Lynch Fund Managers Limited

3.HDFC Asset Management Company Ltd.

PREDOMINANTLY FOREIGN JOINT VENTURES:-

1. ABN AMRO Asset Management (I) Ltd.

2. Alliance Capital Asset Management (India) Pvt. Ltd.

3.Deutsche Asset Management (India) Pvt. Ltd.

4.Fidelity Fund Management Private Limited

5.Franklin Templeton Asset Mgmt. (India) Pvt. Ltd.

6.HSBC Asset Management (India) Private Ltd.

7.ING Investment Management (India) Pvt. Ltd.

8.Morgan Stanley Investment Management Pvt. Ltd.

9.Principal Asset Management Co. Pvt. Ltd.

10.Prudential ICICI Asset Management Co. Ltd.

11.Standard Chartered Asset Mgmt Co. Pvt. Ltd.

ASSOCIATION OF MUTUAL FUNDS IN INDIA

PUBLICATIONS

AMFI publices mainly two types of bulletin. One is on the monthly basis and the other is
quarterly. These publications are of great support for the investors to get intimation of the
knowhow of their parked money.

BENEFITS OF MUTUAL FUNDS-

There are numerous benefits of investing in mutual funds and one of the key reasons for its
phenomenal success in the developed markets like US and UK is the range of benefits they
offer, which are unmatched by most other investment avenues. We have explained the key
benefits in this section. The benefits have been broadly split into universal benefits, applicable
to all schemes, and benefits applicable specifically to open-ended schemes.

UNIVERSAL BENEFITS

AFFORDABILITY
A mutual fund invests in a portfolio of assets, i.e. bonds, shares, etc. depending upon the
investment objective of the scheme. An investor can buy in to a portfolio of equities, which
would otherwise be extremely expensive. Each unit holder thus gets an exposure to such
portfolios with an investment as modest as Rs.500/-. This amount today would get you less
than quarter of an Infosys share! Thus it would be affordable for an investor to build a
portfolio of investments through a mutual fund rather than investing directly in the stock
market.

DIVERSIFICATION

The nuclear weapon in your arsenal for your fight against Risk. It simply means that you must
spread your investment across different securities (stocks, bonds, money market instruments,
real estate, fixed deposits etc.) and different sectors (auto, textile, information technology
etc.). This kind of a diversification may add to the stability of your returns, for example
during one period of time equities might underperform but bonds and money market
instruments might do well enough to offset the effect of a slump in the equity markets.
Similarly the information technology sector might be faring poorly but the auto and textile
sectors might do well and may protect your principal investment as well as help you meet
your return objectives

VARIETY

Mutual funds offer a tremendous variety of schemes. This variety is beneficial in two ways:
first, it offers different types of schemes to investors with different needs and risk appetites;
secondly, it offers an opportunity to an investor to invest sums across a variety of schemes,
both debt and equity. For example, an investor can invest his money in a Growth Fund (equity
scheme) and Income Fund (debt scheme) depending on his risk appetite and thus create a
balanced portfolio easily or simply just buy a Balanced Scheme.

PROFESSIONAL MANAGEMENT
Qualified investment professionals who seek to maximise returns and minimise risk monitor
investor's money. When you buy in to a mutual fund, you are handing your money to an
investment professional who has experience in making investment decisions. It is the Fund
Manager's job to (a) find the best securities for the fund, given the fund's stated investment
objectives; and (b) keep track of investments and changes in market conditions and adjust the
mix of the portfolio, as and when required.

TAX BENEFITS- Any income distributed after March 31,2002 will be subject to tax
in the assessment of all Unit holders. However, as a measure of concession to Unit holders of
open-ended equity-oriented funds, income distributions for the year ending March 31, 2003,
will be taxed at a concessional rate of 10.5%. In case of Individuals and Hindu Undivided
Families a deduction upto Rs. 9,000 from the Total Income will be admissible in respect of
income from investments specified in Section 80L, including income from Units of the
Mutual Fund. Units of the schemes are not subject to Wealth-Tax and Gift-Tax.

REGULATIONS

Securities Exchange Board of India (SEBI), the mutual funds regulator has clearly defined
rules, which govern mutual funds. These rules relate to the formation, administration and
management of mutual funds and also prescribe disclosure and accounting requirements. Such
a high level of regulation seeks to protect the interest of investors.

BENEFITS OF OPEN-ENDED SCHEMES

LIQUIDITY

In open-ended mutual funds, you can redeem all or part of your units any time you wish.
Some schemes do have a lock-in period where an investor cannot return the units until the
completion of such a lock-in period.

CONVENIENCE- An investor can purchase or sell fund units directly from a fund,
through a broker or a financial planner. The investor may opt for a Systematic Investment
Plan (“SIP”) or a Systematic Withdrawal Advantage Plan (“SWAP”). In addition to this an
investor receives account statements and portfolios of the schemes.

FLEXIBILITY - Mutual Funds offering multiple schemes allow investors to switch

easily between various schemes. This flexibility gives the investor a convenient way to
change the mix of his portfolio over time

TRANSPARENCY

Open-ended mutual funds disclose their Net Asset Value (“NAV”) daily and the entire
portfolio monthly. This level of transparency, where the investor himself sees the underlying
assets bought with his money, is unmatched by any other financial instrument. Thus the
investor is in the know of the quality of the portfolio and can invest further or redeem
depending on the kind of the portfolio that has been constructed by the investment manager.

DRAWBACKS OF MUTUAL FUNDS

Mutual funds have their drawbacks and may not be for everyone:

NO GUARANTEES:

No investment is risk free. If the entire stock market declines in value, the value of mutual
fund shares will go down as well, no matter how balanced the portfolio. Investors encounter
fewer risks when they invest in mutual funds than when they buy and sell stocks on their own.
However, anyone who invests through a mutual fund runs the risk of losing money.

FEES AND COMMISSIONS:

All funds charge administrative fees to cover their day-to-day expenses. Some funds also
charge sales commissions or "loads" to compensate brokers, financial consultants, or financial
planners. Even if you don't use a broker or other financial adviser, you will pay a sales
commission if you buy shares in a Load Fund.
TAXES:

During a typical year, most actively managed mutual funds sell anywhere from 20 to 70
percent of the securities in their portfolios. If your fund makes a profit on its sales, you will
pay taxes on the income you receive, even if you reinvest the money you made.

MANAGEMENT RISK:

When you invest in a mutual fund, you depend on the fund's manager to make the right
decisions regarding the fund's portfolio. If the manager does not perform as well as you had
hoped, you might not make as much money on your investment as you expected. Of course, if
you invest in Index Funds, you forego management risk, because these funds do not employ
managers.

FUTURE OF MUTUAL FUNDS IN INDIA

December 2008, Indian mutual fund industry reached Rs 2,50,537 crore. It is estimated that
by 2010 March-end, the total assets of all scheduled commercial Banks should be Rs
40,90,000 crore.

The annual composite rate of growth is expected 13.4% during the rest of the decade. In the
last 5 Years we have seen annual growth rate of 9%. According to the current growth rate, by
year 2010, mutual fund assets will be double.

Number of foreign AMC's are in the queue to enter the Indian markets like Fidelity
Investments, US based, with over US$1trillion assets under management worldwide. our
saving rate is over 23%, highest in the world. Only channelizing these savings in mutual funds
sector is required.

we have approximately 29 mutual funds which is much less than US having more than 800.
There is a big scope for expansion and 'C' class cities are growing rapidly. Today most of the
mutual funds are concentrating on the 'C’class cities. Soon they will find scope in the growing
cities.
Mutual fund can penetrate rural like the Indian insurance industry with simple and limited
product. SEBI allowing the MF's to launch commodity mutual fundse,emphasis on better
corporate governance trying to curb the late trading practices. Introduction of Financial
Planners who can provide need based advice.

CHAPTER-2

OBJECTIVE OF THE STUDY

This project has been made to study about mutual funds, so the purpose of study includes
following objectives-

1. To understand the concept and working of mutual funds.

2. To compare and analyze the performance of selected mutual fund schemes on the basis of
risk and past returns.

3. To know the investment pattern of investor in mutual funds.

The schemes names are-

 Hdfc Equity Fund- Growth

 Fidelity Equity Fund- Growth
 Reliance Vision Fund- Growth
 Franklin India Blue Chip Fund- Growth

The ratios used for comparison on the basis of risk are-

 Beta ratio
 Sharpe ratio
 Treynor ratio
  Alpha ratio

CHAPTER-3

RESEARCH METHODOLOGY

Research- “Research comprises defining and redefining problems ,formulating

hypothesis or suggested solutions, collecting, organizing and evaluating data; making
deductions and reaching conclusions; and at last carefully testing the conclusions to
determine whether they fit the formulating hypothesis”.
-clifford woody

Research methodology has many dimensions. It includes not only research methods but also
consists the logic behind the methods used in the context of the study and explains why only a
particular method of technique had been used so that search lend themselves to proper
evaluation. Thus in a way it is a written game plan for concluding research. Therefore in order
to solve our research problem, it is necessary to design a research methodology for the
problem as the same may differ from problem to problem.

RESEARCH DESIGN- Research design is the conceptual structure within which

the research is conducted. Its function is to provide for the collection of relevant evidence
with minimum expenditure of effort, time and money. But how this can be achieved depends
on the research purpose,
Research design is of mainly three types-
1. Exploratory research
2. Descriptive research
3. Experimental research

Exploratory Research- It focuses on the discovery of ideas and is generally based on

primary data. It is preliminary investigation which does not have a rigid design. This is because
a researcher engaged in exploratory study may have to focus as a result of new ideas and
relationship among the variables.
Descriptive Research- This kind of research is concerned with describing the
characteristics of a particular individual or of a group. In this kind of research primary and
secondary both type of data is used. As my project is comparative analysis of performance of
mutual fund schemes on the basis of past data about NAV’S and PAST RETURNS. I have
collected data from secondary sources. So my research study is based on “Descriptive
Research Design”.

Experimental research- This is also called hypothesis-testing research. In it the

researcher tests the hypothesis of causal relationship between variables.

Data collection- The objectives of the project are such that secondary data is required to
achieve them. So secondary data was used for the project. The mode of collecting secondary
data are magazines, books, newspapers, and websites company’s brochures.
So my project contains the “Descriptive Research Design”. So data is taken from secondary
sources.
Methodology for Customer Survey

Target Population: All customers of HDFC Bank.

Survey Frame: I chose HDFC Banks to conduct my survey.

Sampling Element: Individuals.

Sample Size: 250 customers.

Sample Area: Sector-46 and Sector- 35 Chandigarh and Sohana (Mohali).

Type of data used: Primary data.

Tools Used: Questionnaire

Gender: Males and Females

Age: 25 years to 70 years.

CHAPTER-4

CUSTOMER’S ANALYSIS AND INTERPRETATION

1. Do you make investment?

This question was asked to know how much percentage of people makes investments in
financial products.

This figure represents that 89% of 250 i.e. 223 people make investments in financial
products such as bank, equity, mutual funds, etc.

2. What kind of investment do you make?

This question is asked to find out the investment patterns of people in financial products.
 Investment Avenues No. of Respondents Percentage (%)
(Out of 223)
Bank 45 18
Govt. Securities/Debts 35 14
Insurance 59 23.6
Mutual Fund 81 32.4
Equity 46 18.4
Real Estate 24 10.81

depicts that 18% of the respondents save their money in saving accounts, 14% invest in Govt.
Securities/Debts like FDs, Post Savings etc., 23.6% of the respondents buy insurance for their
safety, 32.4% invest in Mfs, 18.4% in Equities and only 10.81% people invest in Real Estate.

3. From last how many years are you doing investment?

The table depicts that 13% people are investing from less than 2 years and 29% people are
investing from last 3-5 years, and majority of the people i.e. 35% of the people are investing
since last 5-10 years and remaining 23% of people are investing from last more than 10 years.
4. What is your main investment objective?

This question is to find out the criteria of respondents behind investment.

From the figure it can be see that out of sample size of 223 people, 52% of the respondents
have returns as their main investment consideration because everybody wants good income on
their saved income, 34% respondents save their money for the purpose of tax saving so that
they can pay less tax to the government and only 9% look safety perspective. Majority of the
people main consideration of investment is returns, they want higher returns on their
investment.

5. Time Horizon of investments:

This question is to find out whether people think for short term or for long term.
 The above figure shows that 62% of the respondents think for long term i.e. above 5 years,
18% respondents invest for middle term i.e. 1-5 years and only 20% respondents save their
money for short term i.e. up to 1 year.
6. How much return are you getting?

Less than 10%-20% 20%-30% More than

10% 30%
(a) Bank ========
(b) Government Securities/Debts ========
(c) Insurance =======
(d) Mutual funds ======= =======
(e) Equity =======
(f) Real Estate ========

The above pie diagram shows that 17% respondents are getting returns less than 10% due
to saving accounts, 44% of the respondents between 10%-20% per annum due to their
insurance policies,24% respondents who invested in equities or in mutual funds get
between 20%-30% returns and only 15% respondents get very good returns that is more
than 30%. The people invested in Equity, Mutual Funds and Real Estates get good returns
due to the boom in these sectors.

7. How much risk are you ready to assume in following?

This question was asked to find out the risk appetite of people.
(a) Bank
(b) Government securities/Debts
(c) Insurance
(d) Mutual funds
(d) Equity
(e) Real Estate
The above diagram shows that 11% respondents don’t want to take risk at all, 39%
respondents are ready to take moderate returns, 34% invest their money at low risk and only
11% respondents have high risk appetite to get high returns.

8. Have you ever invested in HDFC Mutual Funds?

The above diagram depicts that 148 people out of 180 i.e. 82% people who does investment in
mutual funds are known to the HDFC Mutual Funds and they have been investing in this
company and only 18% i.e. 32 out of 180 people have never invested in HDFC Mutual Funds.

9. In which plan of HDFC Mutual Funds, are you doing investment?

(a)Equity
(i) Mid-cap
(ii) Tax-saver
(iii) Small-cap
(iv) Any other
(1) Top 200
(b) Debt
 (c) Liquid Funds

In the above diagram, maximum people i.e. 70 out of 148 people (47%) wants more returns in
a short period or they prioritize returns as their main investment consideration, Next main
consideration for people for investment is to save tax, 58 people out of 148 i.e. 39% of people
wants to save tax or wants to get tax rebate from govt. Only 4 people or just 3% people invest
in small-cap and 11% people invest in other plans other than tax-saver or mid-cap like Top
200 which is a large-cap, less risky and good for longer period.

10. In HDFC Mutual Funds, in which plan have you opted?

Looking at the above diagram, we can find out that majority of the people go for SIP
(Systematic Investment Plan) and these people do not want to take risk and mostly are
middle-class people. Rest 46% of the remaining people opt the lump sum payment plan as
they want more returns on their investment.
11. Why have you choose SIP for doing investment?

In the above diagram, we find that majority of the people (56% i.e. 45 out of 80 people) go for
the option of monthly saving, 31% people i.e. 25 of them wants to reduce the risk of
fluctuating market and rest 13% wants to do SIP for long term purpose.

12. Why have you opted lump sum for doing investment?

In the above diagram it is shown the preference of the people regarding investment in lump
sum plan and it is found that majority of the people (60% i.e. 41 out of 68 people) invest for
the purpose of getting higher returns, they give first preference of investing in lump sum plan
to getting higher returns and they give preference to the fluctuating market or arbitrage i.e.
buying in lower market and selling in higher market (30% i.e. 20 people) and lastly they want
to invest for short period (only7 out of 68 people). As they earn profit or get returns maximum
returns they sell the fund.
13. Are you doing investment in any other company mutual funds?

1. Reliance
2. Tata
3. Kotak Mahindra
4. Sundaram BNP
5. SBI
6. Fidelity

14. In which plan are you doing investment?

According to the diagram, maximum people (108 out of 180 people) want to do tax-
saving. They want to get tax rebate under Section 80 C up to Rs. One lakh and wants to
get dividend tax-free so they invest in tax-saver plan. Rest 40% i.e. 72 out of 180 people
invest in Mid-cap as these days Mid-cap is a good option to invest.

15. Is HDFC products better than any other company’s products? If Yes
how and which product?

Top 200
1. More returns
2. Award-winning product
3. Declared maximum dividend i.e. 85% in last financial year
4. Best Diversified Scheme
5. 5 star plan, given by value research team

TAX-SAVER
1. Given 50%-60% dividend consequently in past 4 years.
2. Investing in blue chip companies
3. More returns
4. Prioritize in banking sector
5. 4 star plan, given by value research team.
GROWTH FUND
1. Invest in top 30 companies
2. Award-winning product
3. Declared maximum dividend i.e. 85% in last financial year

16. What you expect from the HDFC Mutual funds?

(a) Good returns

(b) Monthly statements
(c) High dividend
(d) Safety
(e) Tax-rebate
(f) Liquidity
(g) Security

DEMOGRAPHICS

➢ Age (in years) : - Age was divided into five categories i.e.

o 20-25
o 25-30
o 30-35
o 35-40
o Above 40

Figure: Age Group

Out of total sample of 250 people, 10 are in the category of 20-25, 36 falls in the category of
25-30, 65 people are in the age group of 30-35 years, 86 falls in the category of 35-40 and rest
53 are above 40 years of age.
 ➢ Occupation :

o Business
o Service

In the sample, the occupation of people shows that 47% i.e. 118 are from Business class and
53% i.e. 132 people are salaried people.

➢ Income :

o Less than Rs.100000

o Between Rs.100000- Rs.250000
o Between Rs.250000- Rs.500000
o Above Rs.500000

48% respondents are having an annual income between Rs. 2.5 Lacs and Rs. 5 Lacs, 35%
respondents are having an annual income between Rs. 1 Lac and Rs. 2.5 Lacs, 10%
respondents are earning above Rs. 5 Lacs and only 7% are in the category of below 1 Lac.
Observations

Some people consider stock trading as a type of gambling and some do trading as a hobby.

People don’t have enough knowledge about trading and they are scared off from stock market.

People who had lost their money in Harshad Mehta’s scam do not want to invest again in
equity.

People, who are into the Real Estate business, are not interested in equity at all because they
think that investment in Real Estate is much safer and giver good returns than investment in
stock market.

COMPARATIVE ANALYSIS
The project contains the study of comparative analysis of performance of selected mutual
fund schemes in India. Project includes the equity diversified schemes of 4 AMC’S. These
four schemes are-

1 .HDFC Equity Fund

2. Fidelity Equity Fund
3. Reliance Vision Fund
4. Franklin India Blue Chip Fund
For doing comparison we have taken past years returns and reached the result regarding the
performance of the funds.

ON THE BASIS OF PAST YEARS RETURNS OF FUNDS

Details of terms used in the following table-
NAV- The performance of a particular scheme of a mutual fund is denoted by Net Asset
Value (NAV). Mutual funds invest the money collected from the investors in securities
markets. In simple words, Net Asset Value is the market value of the securities held by the
scheme. Since market value of securities changes every day, NAV of a scheme also varies on
day to day basis. 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. For example, 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. 10 each to the investors, then the NAV per unit of the fund is Rs.20. NAV is
required to be disclosed by the mutual funds on a regular basis-daily or weekly - depending
on the type of scheme.

Formula of calculating NAV- Market value of total assets of funds

Total no. of units issued to investors.

Compounded Annual Growth Rate (CAGR)- Refers to the

year over year growth rate of an investment over a specific period of time. Calculated by
taking the nth root of the total percentage growth rate where n is the number of years in the
period being considered.

Formula for CAGR = (1+r/100)n

Here in the table, NAV means “Net Asset Value” and “CAGR” means Compounded Annual
Growth Rate.

Table of compounded annual growth rate

Scheme NAV Incepti CAGR CAGR CAGR CAGR CAGR
name on date 1 year 3year 5year 10Yea July
s r 2008
HDFC Equity 168.74 1Jan1995 47.82 51.38 50.98 37.15 25.76

Fund

Reliance 215.51 10Aug1995 56.88 53.04 54.57 32.68 29.7

Vision Fund
Franklin 147.75 12Jan1993 46.24 44.59 47.19 35.85 28.75

IndiaBlue
Chip Fund
Fidelity 24.67 19April 60..39 NA NA NA 50.77

Equity Fund 2005

1. In the past one year, Fidelity Equity Fund has given highest returns.
2. In the past three years, Reliance Vision Fund has given highest returns.
3. In the past five years also, Reliance Vision Fund has given highest returns.
4. In the past 10 years, HDFC Equity Fund has performed well.
5. Since inception, fidelity equity fund has highest Compounded annual growth
returns. So Fidelity Equity Fund and Reliance Vision Fund are performing
well in the market and growing at a rapid pace.

ON THE BASIS OF RISK FACTOR INVOLVED IN THEM-

Risk and Return go hand n hand n investments and finance. One can’t talk about returns
without talking about risk, because investment decisions always involve a trade off between
risk and return. Risk can be defined as the chance that the actual outcome from an investment
will differ from the expected income this means that the more variable the possible outcomes
that can occur, the greater the risk.
For determining the risk-return relationship of the funds following four technical ratios have
been used which depict which fund has performed well in the market despite the risk factor
involved in them:
Ratios-
1.Beta ratio
2.Sharpe ratio
3.Treynor ratio
4 Alpha ratio

Formulas used-

1. Beta ratio-

Formula of BETA = COVARIANCE(X,Y)

VARIANCE OF Y
Where X = Annualized Return of Fund
Y = Annualized Return of Market Index

2. Sharpe ratio-

Sharpe ratio- Mean of the fund- Assured return (risk free return)
Standard deviation
(Risk= variability of returns=standard deviation)

3. Treynor ratio-
Treynor ratio- Mean of the fund- Assured return (risk free return)
Beta of portfolio

4. Alpha ratio-
Alpha ratio – Mean of fund – (Beta * Mean of benchmark index)

Beta ratio-

A measure of the volatility or systematic risk, of a security or a portfolio in comparison to

the market as a whole. Also known as "beta coefficient".

Beta is calculated using regression analysis, and you can think of beta as the tendency of a
security's returns to respond to swings in the market. A beta of 1 indicates that the security's
price will move with the market. A beta of less than 1 means that the security will be less
volatile than the market. A beta of greater than 1 indicates that the security's price will be
more volatile than the market. For example, if a stock's beta is 1.2, it's theoretically 20% more
volatile than the market. Many utilities stocks have a beta of less than 1. Conversely, most
high-tech Nasdaq-based stocks have a beta of greater than 1, offering the possibility of a
higher rate of return, but also posing more risk.

Sharpe ratio-

The Sharpe Ratio is a measure of the risk-adjusted return of an investment. It was derived by
Prof. William Sharpe, now at of Stanford University who was one of three economists who
received the Nobel Prize in Economics in 1990 for their contributions to what is now called
"Modern Portfolio Theory.” He introduced a measure for the performance of mutual funds
And proposed the term reward-to-variability ratio to describe it

The calculation is pretty straightforward. You invest money in some investment. You then
calculate the value of your investment account (including the initial investment plus the
profit/loss) periodically, say for example, every month. You then calculate the percentage
return in each month. It doesn't matter what kind of investment. It could be simply buying
and holding a single stock, or trading several different commodities with several different
trading systems. All that matters is the account value at the end of each month.
Then calculate the average monthly return over some number of months, say for example, 24
months, by averaging the returns for the 24 months. You also calculate the standard deviation
of the monthly returns over the same period.

Then annualize the numbers by:

Multiplying the average monthly return by 12

Multiplying the standard deviation of the monthly returns by the square root of 12.

You also need a number for the "risk-free return" which is the annualized return currently
available on "risk-free" investments. This is usually assumed to be the return on a 90-day T-
Bill which is now about 5% per year.

You now calculate the "Excess return" which is the annualized return achieved by your
investment in excess of the risk-free rate of return available. This is the extra return you
receive by assuming some risk. (Risk is measured by the standard deviation of the returns,
which is actually the "variability" of the returns.)

Excess_return = Annualized_annual_return - Risk_free_return

Then you calculate the Sharpe Ratio as follows:

Sharpe = Excess_return / Annualized_standard_deviation_of_returns

which gives you the Sharpe Ratio of the past returns over the past 24 months.

This is pretty straightforward when you invest in stocks or mutual funds not using margin. If
you use margin or invest in futures contracts, it is a little more complicated. An example
below will illustrate this.

Mutual Funds
If the investment was in buying and holding a mutual fund, you will get a number between
about 0.5 and 3. They say that a Sharpe Ratio of over 1.0 is "pretty good". Outstanding funds
achieve something over 2.0.

Trading Systems
If you are "investing" in a system for trading, you still measure the value of your account with
the profit/loss resulting from the trades. You are, in effect sampling the value of the equity
curve (plus the initial investment as defined above). An example will clarify this.
As above, a Sharpe Ratio of a system of over 2.0 is considered very good. Sharpe Ratios
above 3.0 are outstanding. (The Sharpe Ratio reported by services such as Future Truth are
calculated in some other way and get other numbers.)

Treynor ratio-
A ratio developed by Jack Treynor that measures returns earned in excess of that which could
have been earned on a risk less investment per each unit of market risk.

The Treynor ratio is calculated as: (Average Return of the Portfolio - Average Return of the
Risk-Free Rate) / Beta of the Portfolio.
In other words, the Treynor ratio is a risk-adjusted measure of return based on systematic risk.
It is similar to the Sharpe ratio, with the difference being that the Treynor ratio uses beta as
the measurement of volatility.
Also known as the "reward-to-volatility ratio".

Alpha ratio-
1. A measure of performance on a risk-adjusted basis. Alpha takes the volatility (price risk) of
a mutual fund and compares its risk-adjusted performance to a benchmark index. The excess
return of the fund relative to the return of the benchmark index is a fund's alpha.
2. The abnormal rate of return on a security or portfolio in excess of what would be predicted
by an equilibrium model like the capital asset pricing model (CAPM).

1. Alpha is one of five technical risk ratios; the others are beta, standard deviation, R-squared,
and the Sharpe ratio. These are all statistical measurements used in modern portfolio theory
(MPT). All of these indicators are intended to help investors determine the risk-reward profile
of a mutual fund. Simply stated, alpha is often considered to represent the value that a
portfolio manager adds to or subtracts from a fund's return.

A positive alpha of 1.0 means the fund has outperformed its benchmark index by 1%.
Correspondingly, a similar negative alpha would indicate an underperformance
of 1%.
2. If a CAPM analysis estimates that a portfolio should earn 10% based on the risk of the
portfolio but the portfolio actually earns 15%, the portfolio's alpha would be 5%. This 5% is
the excess return over what was predicted in the CAPM model.

Schemes are-
1. HDFC Equity Fund- Growth
Fact sheet -
Objective
Aims at providing capital appreciation through investments predominantly in equity oriented
securities

Scheme Performance (%) as on Jul 16 , 2008

14 days 1 month 3 months 1 year 3 yrs * Inception*
3.04 7.36 15.11 49.14 53.37 25.29
 Top 10 Holdings as on Jun 30, 2008
Portfolio – Top 10 Holdings (as on june 30, 2008)
Company Industry % to NAV
Equity & Equity Related
Reliance Industries Ltd. Petroleum Products 7.93
ITC Ltd. Consumer Non6.54
Durables
State Bank of India Banks 5.23
Divi?s Laboratories Ltd. Pharmaceuticals 4.84
ICICI Bank Ltd. Banks 4.08
Bharti Airtel Ltd. Telecom – Services 4.04
Housing Development Finance Corporation Ltd.$ Finance 3.89

Bharat Heavy Electricals Ltd. Industrial Capital3.66

Goods
Biocon Ltd. Pharmaceuticals 3.12
Sun Pharmaceutical Industries Ltd. Pharmaceuticals 2.97
Total of Top Ten Equity Holdings 46.30
Total Equity Related Holdings 86.18
Other Current Assets (Including Reverse Repos' / CBLO) 13.82
Grand Total 100.00
Net Assets (Rs. In Lakhs) 97580.44

Portfolio Holdings
Returns
HDFC Growth (NAV as at evaluation date,62.813
Fund Rs. Per unit)
Date Period NAV Returns(%) $$ ^ Benchmark
Returns(%)#
March 30, 2008 Last 427 days 45.461 31.83** 21.49**
November 30, Last Six months (18274.895 -16.13* -15.22*
2007 days)
May 30, 2007 Last 1 Year (36652.3840 19.85** 13.87**
days)
May 30, 2005 Last 3 Years (109625.332 35.31** 35.02**
days)
May 30, 2003 Last 5 Years (18279.583 45.59** 38.8**
days)
May 29, 1998 Last 10 Years (3654N.A N.A. 16.09**
days)
September 11, Since Inception (281810.000 26.87** 17.6**
2000 days)

* Absolute Returns ** Compounded Annualised Returns # SENSEX

~ Due to an over all sharp rise in the stock prices
^ Past performance may or may not be sustained in the future

Portfolio As On Jun 30, 2008

Fund Size as on Jun 30, 2008 - Fund Size ( Rs. in crores) 4516.6

Asset Allocation as on Jun 30, 2008 -

Equity 98.09%
Debt 0.66%
Other 1.25%

portfolio diversification

equity debt
others

Equity

Company Name Instrument No. of Shares Market Value % of Net

(Rs. in crores) Assets
Crompton
Equity 9500000 240.73 5.33
Greaves Ltd
Larsen & Toubro
Equity 1074811 236.2435 5.23
Limited
Amtek Auto Ltd Equity 5000000 204.175 4.52
Reliance
Equity 1150000 195.5633 4.33
Industries Ltd
Punj Lloyd Ltd Equity 7416975 190.8388 4.23
Bharat Heavy Equity 1199800 184.5112 4.09
Electricals Ltd
Infosys
Equity 843479 162.7113 3.6
Technologies Ltd
State Bank of
Equity 1032490 157.5373 3.49
India
CMC Ltd Equity 1244984 148.3336 3.28
Divis Laboratories
Equity 250972 146.8312 3.25
Limited
Bharti Airtel Ltd Equity 1740000 145.4553 3.22
Sun
Pharmaceuticals Equity 1344068 137.8342 3.05
Industries Ltd
Bank of Baroda Equity 5000000 135.125 2.99
Oil & Natural Gas
Equity 1474200 133.4962 2.96
Corpn Ltd
United
Phosphorus Equity 4251092 132.379 2.93
Limited (New)
Siemens Ltd Equity 915000 127.5647 2.82
Zee Entertainment
Equity 4000000 118.92 2.63
Enterprises Ltd
Hindustan
Petroleum Equity 4375741 118.4294 2.62
Corporation Ltd
HT Media
Equity 4594629 108.7089 2.41
Limited.
Nestle India Ltd Equity 927625 107.5999 2.38
Tata Consultancy
Equity 900000 103.4415 2.29
Services Ltd.
Bharat Electronics
Equity 563021 103.0948 2.28
Ltd
AIA Engineering
Equity 582177 102.3962 2.27
Limited.
Wipro Ltd Equity 1600000 82.952 1.84
Glaxo Smithkline
Equity 1287176 74.3666 1.65
Consumer Ltd
Dishman
Pharmaceuticals Equity 2331574 71.2529 1.58
& Chemicals
Biocon Ltd. Equity 1595271 70.2557 1.56
ISMT Ltd. Equity 7430000 68.2074 1.51
Himatsingka
Equity 4950245 57.7199 1.28
Seide Ltd
Balkrishna
Equity 945640 57.6651 1.28
Industries Ltd
Reliance
Equity 5000000 55.55 1.23
Petroleum Ltd
Exide Industries
Equity 10140000 48.9762 1.08
Ltd
ICICI BANK
Equity 483895 46.2337 1.02
LTD.
Britannia
Equity 280878 44.2509 0.98
Industries Ltd
Infotech
Enterprises Equity 851531 33.8271 0.75
Limited
Jagran Prakashan
Equity 662436 31.7439 0.7
Ltd
Television
Eighteen India Equity 335000 30.1869 0.67
Ltd
HDFC Mutual
MF Equity 18818452 30.0105 0.66
Fund
Pidilite Industries
Equity 2397672 29.3115 0.65
Ltd
J K Industries Ltd Equity 2195326 29.2747 0.65
TV Today
Equity 2000000 28.77 0.64
Network Ltd
ASC Enterprises
Equity 2500000 26.675 0.59
Ltd
Indo Rama Equity 4638229 22.7273 0.5
Synthetics (India)
Ltd
Sun Pharma
Advance Research Equity 1344068 21.8223 0.48
Co Ltd
Savita Chemicals
Equity 812563 21.0738 0.47
Ltd
Shoppers Stop Ltd Equity 342642 20.0206 0.44
Motherson Sumi
Equity 1286511 15.6247 0.35
Systems Ltd

OTHERS

Market Value (Rs.

Name Instrument % of Net Assets
in crores)
Clearing Corporation
Money Market 82.7898 1.83
of India Ltd.
Current Assets Current Assets -26.6088 -0.59

Table for calculating ratios-

HDFC Equity Fund (Growth Option) –

DATE purchase DATE Redemption NAV ANNUALISED

NAV of fund RETURN
1/5/2006 65.484 1/5/2007 134.053 104.7110745
1/6/2006 71.78 1/6/2007 112.327 56.48787963
1/7/2006 74.338 1/7/2007 114.59 54.14727327
1/8/2006 80.94 1/8/2007 115.648 42.88114653
1/9/200 85.992 1/9/2007 128.063 48.92431854
1/10/2006 94.324 1/10/2007 132.634 40.6153259
1/11/2006 89.329 1/11/2007 140.191 56.93783654
1/12/2006 100.945 1/12/2007 147.937 46.55208282
1/1/2007 107.188 1/1/2008 147.286 37.40903833
1/2/2007 112.483 1/2/2008 152.415 35.50047563
1/3/2007 119.495 1/3/2008 143.676 20.23599314
1/4/2007 130.819 1/4/2008 136.747 4.531451853
Mean 45.744
SD 23.017
Variance 529.772
Covariance 412.914

BENCHMARK- S&P CNX-500

DATE Index DATE Index Annualised Return

1/5/2006 1695.25 1/5/2007 3100.7 82.91
1/6/2006 1838.45 1/6/2007 2548.35 38.61
1/7/2006 1912.35 1/7/2007 2577.2 34.77
1/8/2006 2039.6 1/8/2007 2559.65 25.50
1/9/2006 2143.6 1/9/2007 2828.3 31.94
1/10/2006 2299.45 1/10/2007 2985 29.81
1/11/2006 2084.65 1/11/2007 3130.45 50.17
1/12/2006 2342.3 1/12/2007 3318.9 41.69
1/1/2007 2464.25 1/1/2008 3323.1 34.85
1/2/2007 2560.55 1/2/2008 3432 34.033
1/3/2007 2698.6 1/3/2008 3147.5 16.63
1/4/2007 2974.1 1/4/2008 3008.75 1.17
Mean 35.174
SD 18.691
Variance 349.341

Ratios calculated

Beta Ratio - 1.182

Sharpe Ratio - 1.748
Treynor Ratio – 34.048
Alpha Ratio - 4.170

2. Fidelity equity fund- Growth Factsheet

Objective- To generate long-term capital growth from a diversified portfolio of
predominantly equity and equity-related securities.

Scheme Performance (%) as on Jul 26 , 2008-

14 days 1 month 3 months 1 year 3 yrs * Inception*
2.53 6.78 14.83 67.99 NA 52.98

Top 10 Holdings as on May 31, 2008

Company Nature Value (Cr.) %

Reliance Industries Ltd EQ 152.58 5.28
Bharati Tele - Ventures EQ 127.21 4.4
Bharat Heavy Electricals Ltd EQ 110.73 3.83
State Bank of India EQ 107.23 3.71
Infosys Technologies Ltd EQ 102.22 3.54
ICICI BANK LTD. EQ 94.44 3.27
Tata Consultancy Services Ltd. EQ 85.1 2.94
Larsen & Toubro Limited EQ 80.86 2.8
Cipla Ltd EQ 69.99 2.42
Bank of Baroda EQ 65.31 2.26

Asset Allocation as on May 31, 2008

Equity Debt Money Market

96.16 0 3.84

Fund information-
Type of Scheme Open Ended

Nature of Scheme Equity

NAV 25.419 As On Jul 26, 2008

Inception Date Apr 19, 2005

Face Value(Rs/Unit) 10

Fund Size (Rs. in crores) 2989.2549 on Jun 29, 2008

Increase/Decrease (Rs. In crores) 98.181(since May 31, 200)

Minimum Investment (Rs) 5000

Purchase Redemptions Daily

NAV Calculation Daily

Entry Load Amount Bet. 0 to 49999999 then Entry

Load is 2.25% and amount greater than rs.5,00,000 then
entry load is 0%.

Exit Load Exit load is 1%.

Top Industry Allocation as on May 31, 2008

Banks 17.202%
Diversified 17.0982%
Computers - Software & Education 14.0135%
Pharmaceuticals 7.4767%
Electricals & Electrical Equipments 5.6582%
Oil & Gas, Petroleum & Refinery 4.8271%
Entertainment 4.6937%
Telecom 4.6794%
Auto & Auto ancilliaries 4.3711%
Engineering & Industrial Machinery 3.5491%

Portfolio As On May 31, 2008

Fund Size as on Jun 29, 2008

Fund Size ( Rs. in crores) 2989.25

Asset Allocation as on May 31, 2008

Equity 96.16%
Debt 0%
Others 3.84%
 portfolio diversification

equity debt others

Equity

Market Value % of Net

Company Name Instrument No. of Shares
(Rs. in crores) Assets
Reliance
Equity 867507 152.5771 5.28
Industries Ltd
Bharati Tele –
Equity 1497867 127.2064 4.4
Ventures
Bharat Heavy
Equity 791414 110.7267 3.83
Electricals Ltd
State Bank of
Equity 792129 107.2265 3.71
India
Infosys
Equity 531449 102.2242 3.54
Technologies Ltd
ICICI BANK
Equity 1027518 94.4443 3.27
LTD.
Tata Consultancy
Equity 704296 85.1036 2.94
Services Ltd.
Larsen & Toubro
Equity 402316 80.8615 2.8
Limited
Cipla Ltd Equity 3218860 69.9941 2.42
Bank of Baroda Equity 2368973 65.3126 2.26
Punjab National
Equity 1170390 62.7153 2.17
Bank
Grasim Industries
Equity 238921 59.7374 2.07
Ltd
Kotak Mahindra
Equity 993123 56.8364 1.97
Bank Ltd.
Aditya Birla Nuvo
Equity 399249 55.9547 1.94
Limited.
Zee Entertainment Equity 1755403 55.0582 1.9
Deccan Chronicle
Equity 2596088 54.388 1.88
Holdings Ltd
Hindustan Lever
Equity 2622283 53.3372 1.84
Ltd
Satyam Computer
Equity 1077179 50.6166 1.75
Services Ltd
Everest Kanto
Equity 452878 48.7931 1.69
Cylinder Ltd.

Dr Reddys
Equity 739328 47.8456 1.65
Laboratories Ltd

Ess Dee
Equity 1085258 45.2715 1.57
Aluminium Ltd
HDFC Bank Ltd Equity 391061 44.8782 1.55
Gas Authority Of
Equity 1350195 41.2282 1.43
India Ltd
UTI Bank Ltd Equity 708800 40.7525 1.41
Financial
Equity 180560 40.4933 1.4
Technologies
Crompton
Equity 1641095 40.3545 1.4
Greaves Ltd
Jagran Prakashan
Equity 861289 40.0026 1.38
Ltd
Television
Equity 438465 36.9231 1.28
Eighteen India Ltd
Reliance
Equity 3681709 36.9091 1.28
Petroleum Ltd
Tata Motors Ltd Equity 470945 35.5893 1.23
Max India Ltd Equity 1364750 33.9959 1.18
Network Eighteen
Equity 657362.4 32.6709 1.13
Fincap Ltd
ONGC Equity 348773 32.1673 1.11
Aurobindo
Equity 465119 31.8351 1.1
Pharma Ltd.
Gujarat
Flourochemicals Equity 467308 29.2511 1.01
Ltd
HCL technologies
Equity 848958 29.2254 1.01
ltd.
Raymond Ltd Equity 829675 27.1096 0.94
NIIT Ltd Equity 293500 25.3892 0.88
ING Vysya Bank
Equity 965130 25.1561 0.87
Ltd
Motherson Sumi
Equity 1972630 24.4606 0.85
Systems Ltd
SKF Bearings
Equity 524946 23.9874 0.83
India Ltd
C M C Ltd Equity 199556 23.7661 0.82
Gujarat Ambuja
Equity 2066127 23.4299 0.81
Cements Ltd
JSW Steel
Equity 386300 23.3731 0.81
Limited.
Lupin Ltd. Equity 328307 23.3525 0.81

NTPC Limited. Equity 1424059 22.5713 0.78

Pantaloo(India) Equity 496607 21.4038 0.74
HT Media
Equity 945915 20.8622 0.72
Limited.
Bharat Earth
Equity 199201 20.7956 0.72
Movers Ltd
Power Finance
Equity 1273246 20.2064 0.7
Corporation Ltd
ITC Ltd Equity 1160555 19.0099 0.66
McNally Bharat Equity 923233 17.9615 0.62
Engineering
Corporation
Marico Industries
Equity 2963470 17.0251 0.59
Ltd
Bajaj Auto Ltd Equity 74763 16.6318 0.58
Radico-Khaitan
Equity 1121210 15.9716 0.55
Ltd
Nucleus Software
Equity 156306 15.6517 0.54
Exports Ltd
KEC International
Equity 292646 15.3507 0.53
Ltd.
Dish TV India Ltd Equity 1128934.875 15.1842 0.53
Texmaco Ltd Equity 154297 15.0571 0.52
Eicher Motors Ltd Equity 443543 14.8831 0.51
Hindustan
Construction Equity 1496661 14.3904 0.5
Company Ltd
Infrastructure
Leasing &
Equity 643145 13.7762 0.48
Financial Services
LTD
Sintex Industries
Equity 606529 13.7227 0.47
Ltd
Emco Ltd (Emco
Equity 150852 12.5004 0.43
Transformers Ltd)
MRF Ltd Equity 30000 12.4257 0.43
Aventis Pharma
Equity 85316 11.2715 0.39
India Ltd.
TVS Motor
Equity 1650498 10.819 0.37
Company
Suven Life
Equity 2380544 8.4985 0.29
Science Ltd.
Container
Corporation Of Equity 36075 8.2383 0.28
India Ltd
Idea Cellular
Equity 641830 8.0774 0.28
Limited
Wire and Wireless Equity 1035352.5 7.672 0.27
India Ltd.
Shoppers Stop Ltd Equity 119902 7.2391 0.25
V I P Industries
Equity 483156 4.718 0.16
Ltd
McDowell
Equity 90858.4 2.1329 0.07
Holdings

Others
Market Value (Rs.
Name Instrument % of Net Assets
in crores)

Cash Cash 111.1341 3.84

Table for calculating ratios-

Fidelity Equity Fund (Growth Option) –

DATE purchase NAV DATE Redemption NAV ANNUALISED

of fund RETURN
1/5/2006 10.029 1/5/2007 18.74 86.86

1/6/2006 10.311 1/6/2007 15.783 53.07

1/7/2006 11.013 1/7/2007 15.136 37.44

1/8/2006 11.981 1/8/2007 15.523 29.56

1/9/2006 12.659 1/9/2007 17.177 35.69

1/10/2006 13.564 1/10/2007 18.317 35.04

1/11/2006 12.399 1/11/2007 19.335 55.94

1/12/2006 13.857 1/12/2007 20.946 51.16

1/1/2007 14.488 1/1/2008 21.055 45.33

1/2/2007 15.163 1/2/2008 21.804 43.80

1/4/2007 18.283 1/4/2008 19.743 7.99
MEAN 42.308

SD 18.501

VARIANCE 342.358

COVARIANCE 340.528

BENCHMARK-BSE200
DATE Index DATE Index ANNUALISED
RETURN
1/5/2006 824.62 1/5/2007 1521.68 84.53
1/6/2006 890.25 1/6/2007 1247.92 40.18
1/7/2006 926.4 1/7/2007 1278.05 37.96
1/8/2006 984.62 1/8/2007 1273.99 29.39
1/9/2006 1020.29 1/9/2007 1411.2 38.31
1/10/2006 1108.83 1/10/2007 1489.46 34.33
1/11/2006 1007.59 1/11/2007 1569.1 55.73
1/12/2006 1132.92 1/12/2007 1665.53 47.01
1/1/2007 1187.26 1/1/2008 1669.59 40.63
1/2/2007 1240.72 1/2/2008 1711.74 37.96
1/3/200 1318.85 1/3/2008 1564.49 18.63
1/4/2007 1446.09 1/4/2008 1487.13 2.84
MEAN 38.96
SD 18.84
VARIANCE 355.06

Ratios calculated-
Beta Ratio – 0.959

Sharpe Ratio – 1.989

Treynor Ratio – 38.379

Alpha Ratio - 4.946

3. Reliance Vision fund - Growth
Factsheet –
Objective- Seeks to provide long term capital appreciation primarily investing in growth
oriented stocks.

Scheme Performance (%) as on Jul 26 , 2008

14 days 1 month 3 months 1 year 3 yrs * Inception*
1.66 7.75 19.66 61.84 53.73 29.97

Top 10 Holdings as on Jun 29, 2008-

Company Nature Value (Cr.) %

Divis Laboratories Limited EQ 263.27 8.48
Larsen & Toubro Limited EQ 175.84 5.67
Reliance Industries Ltd EQ 173.89 5.6
Infosys Technologies Ltd EQ 173.61 5.59
Alstom Projects India Ltd. EQ 144.23 4.65
Reliance Communication. EQ 139.71 4.5
Siemens Ltd EQ 139.54 4.5
Other Equities EQ 115.18 3.71
HDFC Bank Ltd EQ 114.68 3.7
JaiPrakash Associates Ltd. EQ 111.15 3.58

Asset Allocation as on Jun 29, 2008–

Equity Debt Money Market
86.4 0 13.6
Fund Information-

Type of Scheme Open Ended

Nature of Scheme Equity

Inception Date Oct 7, 1995

Face Value(Rs/Unit) 10
Net Asset Value (Rs/Unit) 220.86 on july2007-2008

Fund Size (Rs. in crores) 3103.37 on Jun 29, 2008

Increase/Decrease since May 31, 2007 (Rs. 133

in crores)
Minimum Investment (Rs) 5000

Purchase Redemptions Daily

NAV Calculation Daily

Fund Manager Kunj Bansal

Entry Load Amount Bet. 0 to 19999999 then Entry load

is 2.25%. and Amount Bet. 20000000 to
49999999 then Entry load is 1.25%. and
Amount greater than 50000000 then Entry
load is 0%. If redeemed bet. 0 Months to 6
Months; and Amount Bet. 0 to 49999999
then Exit load is 1%. If redeemed bet. 6
Exit Load Months to 12 Months; and Amount Bet. 0 to
49999999 then Exit load is 0.5%. and
Amount greater than 50000000 then Exit
load is 0%.

Top Industry Allocation as on Jun 29, 2008-

Diversified 14.2423%
Computers - Software & Education 10.3082%
Pharmaceuticals 8.4834%
Auto & Auto ancilliaries 6.4516%
Power Generation, Transmission & Equip 5.889%
Banks 5.4907%
Telecom 4.5019%
Electronics 4.4962%
Miscellaneous 3.7114%
Housing & Construction 3.5816%

Portfolio As On Jun 29, 2008

Fund Size as onJun 29, 2008

Fund Size ( Rs. in crores) 3103.37

Asset Allocation as on Jun 29, 2008

Equity 86.4%
Debt 0%
Others 13.6%
 portfolio diversification

equity debt
others

EQUITY
Market Value % of Net
Company Name Instrument No. of Shares
(Rs. in crores) Assets
Divis
Laboratories Equity 450000 263.2726 8.48
Limited
Larsen & Toubro
Equity 800000 175.8401 5.67
Limited
Reliance
Equity 1022559 173.8913 5.6
Industries Ltd
Infosys
Equity 900000 173.6146 5.59
Technologies Ltd
Alstom Projects
Equity 1788623 144.2345 4.65
India Ltd.
Reliance
Communication Equity 2700001 139.7116 4.5
Ventures Ltd.
Siemens Ltd Equity 1000861 139.5351 4.5
HDFC Bank Ltd Equity 1000000 114.675 3.7
JaiPrakash
Equity 1500001 111.15 3.58
Associates Ltd.
Grasim
Equity 350000 92.26 2.97
Industries Ltd
Tata Consultancy Equity 755443 86.8269 2.8
Television
Eighteen India Equity 925501 83.3969 2.69
Ltd
Maruti Udyog
Equity 1000000 74.415 2.4
Ltd
Indian Hotels Co
Equity 4825002 72.8093 2.35
Ltd
Cummins India
Equity 2000001 67.99 2.19
Ltd
Tata Motors Ltd Equity 1000000 67.02 2.16
Network
Eighteen Fincap Equity 1154332 59.4597 1.92
Ltd
Automotive
Equity 1200000 58.782 1.89
Axles Ltd
State Bank of
Equity 365187 55.7203 1.8
India
Hindustan
Petroleum Equity 2000001 54.13 1.74
Corporation Ltd
Gujarat State
Fertilizers & Equity 3007425 53.066 1.71
Chemicals Ltd
Tata Tea Ltd Equity 563353 48.2878 1.56
ITC Ltd Equity 3043841 47.0882 1.52
Bharat Forge Ltd Equity 1495965 46.1505 1.49
Apollo Tyres Ltd Equity 1400001 44.695 1.44
Gujarat Ambuja
Equity 3500997 43.5874 1.4
Cements Ltd
Reliance Energy
Equity 627858 38.5222 1.24
Ltd
Deccan Aviation
Equity 2599614 35.7447 1.15
Ltd.
Table For Calculating Ratios-
Reliance Vision Fund- (Growth option)

DATE purchase DATE Redemption NAV ANNUALISED

NAV of fund RETURN
1/5/2006 86.09 1/5/2007 171.6 99.33
1/6/2006 92.05 1/6/2007 136.11 47.87
1/7/2006 92.23 1/7/2007 137.64 49.24
1/8/2006 100.41 1/8/2007 138.71 38.14
1/9/2006 105.54 1/9/2007 152.2 44.21
1/10/2006 114.32 1/10/2007 234.47 105.09
1/11/2006 107.47 1/11/2007 172.67 60.67
1/12/2006 120.08 1/12/2007 178.48 48.63
1/1/2007 126.56 1/1/2007 184.85 46.06
1/2/2007 132.87 1/2/2008 186.17 40.11
1/3/2007 141.83 1/3/2008 173.56 22.37
1/4/2007 160.34 1/4/2008 163.04 1.68
Mean 50.284
SD 27.347
Variance 747.835
Covariance 403.060

Benchmark-BSE100
DATE Index DATE Index ANNUALISED
RETURN
1/5/2006 3332.31 1/5/2007 6344.04 90.38
1/6/2006 3611.25 1/6/2007 5210.33 44.28
1/7/2006 3822.89 1/7/2007 5415.86 41.67
1/8/2006 4090.31 1/8/2007 5418.86 32.48
1/9/2006 4218.18 1/9/200 5983.43 41.85
1/10/2006 4610.17 1/10/2007 6295.82 36.56
1/11/2006 4191.1 1/11/2007 6639.14 58.41
1/12/2006 4731.96 1/12/2007 7018.37 48.32
1/1/2007 4951.69 1/1/2008 7059.84 42.57
1/2/2007 5182.28 1/2/2008 7233.71 39.59
1/3/2007 5523.69 1/3/2008 6614.12 19.74
1/4/2007 6046.49 1/4/2008 6287.69 3.99
Mean 41.65
SD 19.83
Variance 393.36

Ratios calculated-
Beta Ratio - 1.0247

Sharpe Ratio - 1.638

Treynor Ratio – 43.707

Alpha Ratio – 7.604

4. Franklin India Blue Chip Fund-Factsheet-Objective-

Aims to achieve a high degree of capital appreciation through investments in well-established,

large size blue chip companies.

Scheme Performance (%) as on Jul 16 , 2008

14 days 1 month 3 months 1 year 3 yrs * Inception*
4.52 10.14 16.41 47.56 46.13 28.66

Top 10 Holdings as on Jun 29, 2008

Company Nature Value (Cr.) %
Reliance Industries Ltd EQ 170.03 6.68
Grasim Industries Ltd EQ 155.6 6.12
Bharati Tele - Ventures EQ 147.12 5.78
Infosys Technologies Ltd EQ 141.79 5.57
Kotak Mahindra Bank Ltd. EQ 134.5 5.29
Larsen & Toubro Limited EQ 120.78 4.75
Siemens Ltd EQ 116.27 4.57
Aditya Birla Nuvo Limited. EQ 113.87 4.48
BHEL EQ 107.68 4.23
HDFC Ltd EQ 101.51 3.99

Asset Allocation as on Jun 29, 2008 –

Equity Debt Money Market
95.41 0 4.59

Fund Information

Type of Scheme Open Ended

Nature of Scheme Equity

Inception Date Nov 30, 1993

Face Value(Rs/Unit 10

Net Asset Value (Rs/Unit) 149.1463 As On Jul 16, 2008

Fund Size (Rs. in crores) 2544.3445 on Jun 29, 2008

Increase/Decrease since May 31, 2007 (Rs. -28.7

in crores)
Previous Name Pioneer ITI Bluechip - Growth
Minimum Investment (Rs) 5000

Purchase Redemptions Daily

NAV Calculation Daily

Fund Manager K. N. Siva Subramanian

Entry Load Entry Load is 2.25%.

Exit Load Exit Load is 0%.

Last Dividend Declared 1:1 Bonus / Rights On Mar 24, 2000

Top Industry Allocation as on Jun 29, 2008

Diversified 24.1323%
Banks 11.5145%
Computers - Software & Education 9.8214%
Telecom 8.926%
Auto & Auto ancilliaries 7.4254%
Finance 6.6915%
Electricals & Electrical Equipments 6.3025%
Entertainment 4.7096%
Electronics 4.5699%
Tobacco & Pan Masala 3.4605%

Portfolio as on Jun 29, 2008

Fund Size as on Jun 29, 2008
Fund Size ( Rs. in crores) 2544.34
Asset Allocation as on Jun 29, 2008
Equity 95.41%
Debt 0%
Others 4.59

portfolio diversification

equity debt others

EQUITY

Company Name Instrument No. of Shares Market Value % of Net

(Rs. in crores) Assets
Reliance
Equity 1000000 170.03 6.68
Industries Ltd
Grasim
Equity 589837 155.5961 6.12
Industries Ltd
Bharati Tele –
Equity 1759892 147.1182 5.78
Ventures
Infosys
Equity 734944 141.7854 5.57
Technologies Ltd
Kotak Mahindra
Equity 2000000 134.5 5.29
Bank Ltd.
Larsen & Toubro
Equity 550000 120.7827 4.75
Limited
Siemens Ltd Equity 832729 116.274 4.57
Aditya Birla
Equity 850000 113.8702 4.48
Nuvo Limited.
Bharat Heavy
Equity 700000 107.6775 4.23
Electricals Ltd
Housing
Development
Equity 500000 101.51 3.99
Finance
Corporation Ltd
Zee
Entertainment Equity 3260416 96.9811 3.81
Enterprises Ltd
ITC Ltd Equity 5691412 88.0461 3.46
ICICI BANK
Equity 800000 76.424 3
LTD.
Maruti Udyog
Equity 1000000 74.31 2.92
Ltd
Infrastructure
Development Equity 5227676 68.7439 2.7
Finance company
Cummins India
Equity 1902806 64.6859 2.54
Ltd
MICO Equity 141376 63.364 2.49
Tata Consultancy
Equity 500000 57.4625 2.26
Services Ltd.
HDFC Bank Ltd Equity 500000 57.205 2.25
Dr Reddys
Equity 820874 53.8452 2.12
Laboratories Ltd
Hindustan Lever
Equity 2845042 53.7286 2.11
Ltd
ABB Ltd Equity 480955 52.679 2.07
Tata Motors Ltd Equity 765281 51.2547 2.01
Satyam
Computer Equity 1083721 50.6423 1.99
Services Ltd
Reliance Equity 800000 41.364 1.63
Communication
Ventures Ltd.
Idea Cellular
Equity 3100000 38.626 1.52
Limited
Indian Hotels Co
Equity 1805591 27.1922 1.07
Ltd
Cipla Ltd Equity 1187249 24.7482 0.97
Dish TV India
Equity 2139204 22.8467 0.9
Ltd
Nestle India Ltd Equity 160000 18.5592 0.73
State Bank of
Equity 100000 15.253 0.6
India
Asian Paints
Equity 135000 10.9478 0.43
Limited
Canara Bank Ltd Equity 220000 5.9323 0.23

Table for calculating ratios-

Franklin India Blue Chip Fund- Growth

DATE Purchase DATE Redemption NAV ANNUALISED
NAV of fund RETURN

1/5/2006 1/5/2007
60.13 121.08 101.3637
1/6/2006 1/6/2007
63.8 98.22 53.94984
1/7/2006 1/7/2007
67.8 100.88 48.79056
1/8/2006 1/8/2007
73.18 101.39 38.54878
1/9/2006 1/9/2007
77.57 111.75 44.06343
1/10/2006 1/10/2007
83.91 116.9 39.31593
1/11/2006 1/11/2007
77.89 125.01 60.49557
1/12/2006 1/12/2007
87.46 130.49 49.19963
1/1/2007 1/1/2008
90.68 132.85 46.50419
1/2/2007 1/2/2008
96.51 135.42 40.31707
1/3/2007 1/3/2008
104.26 123.16 18.12776
1/4/2007 1/4/2008
114.84 118.0375 2.784309
Mean
45.288
SD
22.604
Variance
510.947
Covariance
458.238

BENCHMARK –BSE SENSEX

DATE Index DATE Index ANNUALISED

RETURN
1/5/2006 6195.15 1/5/2007 12218.78 97.23
1/6/2006 6729.9 1/6/2007 10071.42 49.65
1/7/2006 7210.77 1/7/2007 10695.26 48.32
1/8/2006 7669.45 1/8/2007 10751.66 40.19
1/9/2006 7876.15 1/9/2007 11778.02 49.54
1/10/2006 8697.65 1/10/2007 12366.39 42.18
1/11/2006 7944.1 1/11/2007 13033.04 64.06
1/12/2006 8944.78 1/12/2007 13844.78 54.78
1/1/2007 9390.14 1/1/2008 13942.24 48.48
1/2/2007 9859.26 1/2/2008 14267.18 44.71
1/3/2007 10565.47 1/3/2008 13159.55 24.55
1/4/2007 11564.36 1/4/2008 12455.37 7.70
Mean 47.62
SD 20.43
Variance 417.54

Ratios calculated-
Beta ratio- 1.097

Sharpe ratio- 1.760

Treynor ratio- 36.255

Alpha ratio - -6.969

CHAPTER 5

INFERENCES DRAWN
Table Containing Ratios For Drawing Inferences

Fund name Beta ratio Sharpe ratio Treynor ratio Alpha ratio
HDFC Equity 1.182 1.748 34.048 4.170
Fund
Fidelity Equity 0.959 1.989 38.379 4.946
Fund
Reliance Vision 1.025 1.638 43.707 7.604
Fund
Franklin India 1.097 1.760 36.255 -6.969
Bluechip Fund

INFERENCES
ACCORDING TO BETA RATIO – Beta measures the relative risk
associated with any individual portfolio as measured in relation to market portfolio.
Lower the Beta, lesser the volatility and risk.
A beta of 1 indicates that the security's price will move with the market. A beta of less than 1
means that the security will be less volatile than the market. A beta of greater than 1 indicates
that the security's price will be more volatile than the market.
In the above chart Fidelity Equity Fund has lowest Beta .It means that Fidelity Equity Fund is
less volatile in comparison to other funds .

Beta Ratio

1.4
1.2
1
0.8
HDFC Equity Fund Fidelity Equity Fund Reliance Vision Fund
0.6
Franklin India Blue Chip Fund
0.4
0.2
percentages

0
BETA RATIO

According to Sharpe ratio- The Sharpe Ratio is a measure of the risk-adjusted

return of an investment and it is a measure for the performance of mutual funds and it is also
called reward-to-variability ratio .
Higher the ratio, better the fund performance.
A Sharpe Ratio of a system of over 2.0 is considered very good.
Sharpe Ratios above 3.0 are outstanding.
So from the ratios calculated, Fidelity Equity Fund has higher sharpe ratio with lowest
standard deviation means with less risk.

Sharpe Ratio

2.5

2
HDFC Equity Fund Fidelity Equity Fund Reliance Vision Fund
Franklin India Blue Chip Fund
1.5
percentage

0.5

0
Sharpe Ratio

According to Treynor ratio- The Treynor ratio is a risk-adjusted measure of

return based on systematic risk. It is similar to the Sharpe ratio, with the difference being that
the Treynor ratio uses beta as the measurement of volatility.it measures returns earned in
excess of that which could have been earned on a riskless investment per each unit of market
risk.
Higher the Treynor Ratio,better the fund’performance.
So Reliance Vision fund has the highest treynor ratio in comparison to other funds.
 Treynor ratio

50
45
40
35 HDFC Equity Fund Fidelity Equity Fund Reliance Vision Fund
30 Franklin India Blue Chip Fund
25
20
percentage

15
10
5
0
Treynor Ratio

According to Alpha ratio- Alpha takes the volatility (price risk) of a mutual fund
and compares its risk-adjusted performance to a benchmark index. The excess return of the
fund relative to the return of the benchmark index is a fund's alpha.
A positive alpha of 1.0 means the fund has outperformed its benchmark index by 1%.
Correspondingly, a similar negative alpha would indicate an underperformance
of 1%.
Higher the alpha ratio,better the fund’s performance
Reliance Vision Fund has highest alpha ratio. So this fund has outperformed it’s benchmark’s
index by 7.6%. but franklin India blue chip fund has a negative alpha so this fund is not
performing well.
 Alpha Ratio

10
8
6
4 HDFC Equity Fund Fidelity Equity Fund Reliance Vision Fund
2 Franklin India Blue Chip Fund
0
percentage

-2
-4
-6
-8 Alpha Ratio
CHAPTER-6
SWOT ANALYSIS OF HDFC AMC VIZ-A-VIZ OTHER FUND
HOUSES

Strengths: Weakness:

Brand image. Inability to fully cover the

outstation market
Image of an Ethical player.
Lack of manpower.
Brand Reach
 Overshadowing of Home
Prompt service provider.
Loans.
Good relationship with
distributors
Efficient Sales Staff
Fair understanding of market
and competition.

Opportunity: Threats:

Unexplored/ outstation Substitute products like bank

market. FDs, RDs etc.
Target export segment New entrants
aggressively
CHAPTER-7
CONCLUSION
Mutual fund industry is on growth now a days. People are becoming more interested in
purchasing mutual funds because they find it less risky and more beneficial compared to
direct equity investment.

In this project, comparison have been done on the basis of technical ratios which depict risk-
return relationship and by analyzing past years returns of the funds. By analyzing the ratios it
has been found out that Fidelity Equity Fund and reliance vision fund is less risky and also
giving fair returns.

HDFC Equity Fund had performed above average and given consistent returns year over year.
Number of foreign AMC's are in the queue to enter the Indian markets.we have approximately
29 mutual funds which is much less than US. There is a big scope for expansion. Mutual fund
can penetrate rural like the Indian insurance industry with simple and limited products.
CHAPTER-8
COMPARATIVE STUDY OF THE PRODUCTS OF HDFC
AMC WITH ITS COMPETITORS

NAME:
NAME OF THE COMPANY:
DESIGNATION IN THE COMPANY:
CONTACT NO:

1. What is your age?

(a) 20-25 (b) 25-30 (c) 30-35 (d) 35-40 (e) Above 40

2. What is your annual income?

(a) Less than Rs.100000
(b) Between Rs.100000- Rs.250000
(c) Between Rs.250000- Rs.500000
(d) Above Rs.500000

3. From last how many years are you doing investment?

(a) Less than 2 years
(b) 3-5 years
(c) 5-10 years
(d) More than 10 years

4. What kind of investment do you make? (You can tick more than one)
(a) Bank
(b) Government Securities/Debts
(c) Insurance
(d) Mutual funds
(d) Equity
(e) Real Estate
(f) Others (please specify)

5. What is your main investment objective?

Ranking (1 to 10)
(a) Safety
(b) Tax saving
(c) Returns
(d) Capital appreciation
6. For what time period do you do investment?
(a) Short term (Up to 1 year)
(b) Middle term (1-5 years)
(c) Long term (Above 5 years)

7. How much return are you getting?

(a) Bank
(b) Government Securities/Debts
(c) Insurance
(d) Mutual funds
(d) Equity
(e) Real Estate

8. How much risk are you ready to assume in following?

(a) Bank
(b) Government Securities/Debts
(c) Insurance
(d) Mutual funds
(d) Equity
(e) Real Estate

9. Have you ever invested in HDFC Mutual Funds?

(a) Yes (b) No

10. In which plan of HDFC, are you doing investment?

(a)Equity
(i) Mid-cap
(ii) Tax-saver
(iii) Small-cap
(iv) Any other
(b) Debt
(c) Liquid Fund

11. In HDFC Mutual Funds, in which plan have you opted?

(a) SIP (Systematic Investment Plan)
(b) Lump sum

12. Why have you choose SIP for doing investment?

(a) Long term purpose
(b) Monthly saving
(c) To reduce risk of fluctuating market
(d) Any other
13. Why have you opted lump sum for doing investment?
(a) Short period investment
(b) Greater returns
(c) To take the advantage of arbitrage (buying in lower market and selling in
higher market)

14. Are you doing investment in any other company mutual funds?

15. In which plan are you doing investment?

16. Is HDFC products better than any other company’s products? If Yes how and
which product?

17. What you expect from the HDFC Mutual funds?

(a) Good returns
(b) Monthly statements
(c) High dividend
(d) Safety
(e) Tax-rebate
(f) Liquidity
(g) Any other
CHAPTER-9
BIBLIOGRAPHY

1. Books on mutual fund- AMFI publications, Investment Analysis and Portfolio

Management by Prasanna Chandra.
2. Journals- ICFAI Publications- Overview on Mutual Funds.
3. Newspapers- The Economic Times, Business Standard.
4. Internet sites
a) www.Google.com
b) www.mutualfundsindia.com
c) www.amfi.com
d) www.valueresarchonline.com
e) www.investopedia.com
f) www.wikipedia.com
g) www.answers.com
h) www.hdfcfund.com
i) www.nribanks.com
j) www.mutualfunds.about.com/cs/history/a/fundhistory.htm
5. Mutual fund insight magazine