A

PROJECT REPORT

ON

“ STUDY OF MUTUAL FUNDS IN

MAHINDRA FINANCE”

A PROJECT SUMBITTED TO
UNIVERSITY OF MUMBAI FOR PARTIAL COMPLETION
OF THE DEGREE OF BACHELOR IN
COMMERCE (ACCOUNTING AND FINANCE)
BY
MR. HRITIL SUNIL DESHMUKH
UNDER THE GUIDANCE OF
PROF. PRAVAR SHARMA

RAMSHETH THAKUR COLLEGE OF COMMERCE AND

SCIENCE, PLOT NO -1 ,SEC -33, KHARGHAR-410210
NAVI MUMBAI
APRIL-2020

1
 ACKNOWLEDGEMENT
To list who all have helped me is difficult because they are so numerous and the
depth is so enormous.

I would like to acknowledge the following as being channels and fresh dimensions
in the completion of this project.

I take this opportunity to thank the University of Mumbai for giving me chance to
do this project.

I would like to thank my principal, DR. S.T.GADADE for providing the necessary
facilities required for completion of this project.

I take this opportunity to thank our coordinator MR. PRAVAR SHARMA for her
moral suooort and guidance.

I would also like to express my sincere gratitude towards my project guide MR.
PRAVAR SHARMA whose guidance and care made for project successful.

I would like to thank my COLLEGE LIBRARY for having provided various

reference books and magazines related to my project.

Lastly I would like to thank each and every person who directly or indirectly
helped me in the completion of the project especially my parents and peer who
supported me throughout my project

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 CERTIFICATE

This is to certify that MR. HRITIK SUNIL DESHMUKH has worked and duly
completed her project work for the degree of Bachelor in commerce ( Accounting
and Finance) under the faculty of commerce in the subject is entitled “ STUD OF
MUTUAL FUNDS IN MAHINDRA FINANCE” Under my supervision

I further certify that the entire work has been done by the learner under my
guidance and that no part of it has been submitted previously for any Degree or
Diploma of any university. It is her own work and facts reported by her personal
findings and investigations

Name and signature of

Guiding Teacher

Seal of the

College

Date of Submission

3
 DECLARATION

I the undersigned MR. HRITIK SUNIL DESHMUKH here by, declare that the
work embodied in this project work titled “ STUDY OF MUTUAL FUNDS IN
MAHINDRA FINANCE” forms my own contribution to the research work
carried out under the guidance of Prof. Pravar Sharma is a result of my own
research work and has not been previously submitted to any other University for
any other Degree to this or any other University.

Whenever reference has been made to previous works of others, it has been clearly
indicated as much as included in the bibliography.

I, hereby further declare that all information of this document has been obtained
and presented in accordance with academic rules and ethical conduct.

MR. HRITIK SUNIL DESHMUKH

Certified by

PROF. PRAVAR SHARMA

4
SR NO. CHAPTER PAGE NO

1 INTRODUCTION
• Introduction to the mutual fund 3
• History of mutual funds
• Advantages/Disadvantage 6
• Types of mutual funds 11-12
13
2 AIMS AND OBJECTIVES 26

3 MAHINDRA FINANCE 27

4 RESEARCH/METHODOLOGY
• scope of study 32
• concept and significance of study 33
• Limitations of study
• primary / secondary objective 34
35
5 Review of Literature 39

6 Data analysis, interpretation

And presentation
7 HYPOTHESIS

8 Suggestions and
recommendation
9 Conclusion

10 Bibliography

11 Annexure

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 CHAPTER 1
INTRODUCTION

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 INTRODUCTION:

What do you mean by mutual fund?

Introduction A mutual fund is a financial intermediary that pools the savings of investors for
collective investment in a diversified portfolio of securities. A fund is “mutual” as all of its returns,
minus its expenses, are shared by the fund’s investors. The Securities and Exchange Board of India
(Mutual Funds) Regulations, 1996 defines a mutual fund as a ‘a fund established in the form of a
trust to raise money through the sale of units to the public or a section of the public under one or
more schemes for investing in securities, including money market instruments’. According to the
above definition, a mutual fund in India can raise resources through sale of units to the public. It
can be set up in the form of a Trust under the Indian Trust Act. The definition has been further
extended by allowing mutual funds to diversify their activities in the following areas: · Portfolio
management services · Management of offshore funds · Providing advice to offshore funds ·
Management of pension or provident funds · Management of venture capital funds · Management
of money market funds · Management of real estate funds A mutual fund serves as a link between
the investor and the securities market by mobilizing savings from the investors and investing them
in the securities market to generate returns. Thus, a mutual fund is akin to portfolio management
services (PMS). Although, both are conceptually same, they are different from each other.
Portfolio management services are offered to high net worth individuals; taking into account their
risk profile, their investments are managed separately. In the case of mutual funds, savings of small
investors are pooled under a scheme and the returns are distributed in the same proportion in which
the investments are made by the investors/unit-holders. Mutual fund is a collective savings scheme.
Mutual funds play an important role in mobilizing the savings of small investors and channelizing
the same for productive ventures in the Indian economy.

investors

FUND
securites MANAGER

RETURN

7
CONCEPT OF MUTUAL FUND:

The concept of Mutual Funds emerged on the concept of leverage… Now what is leverage? You
might ask Leverage in simple terms is borrowing to increase your profits or increased
concentration of funds for higher returns. For example, you know that price of a share is going to
increase from 100 to 150 so you could either invest the 100 you have and earn 150 and be happy
or you could go to a bank and borrow 900 at 10% interest for a short term. Now you have 1000 so
you can now buy 10 shares of the same company and earn 1500 after this you'll still have to pay
back your loan so you pay to bank 990 (principal + interest) and your left with 510 which is
significantly large as compared to the 150 in the earlier alternative.

Mutual Funds make use of this concept. For e.g.: The value of a share is Rs. 50000 like MRF now
as a retail investor you cannot afford to buy this share but you can buy a unit of a mutual fund that
has MRF in its portfolio. So now the value of the unit you own is directly affected by the stock
itself so a significantly low investment can give you ownership in many companies. Besides this
it's not possible for you to predict the market as a novice but these mutual funds are managed by
experienced professionals who know what they're doing. Which helps to reduce your risk? Another
advantage of mutual funds is that not just you but many people around the country will invest in
this funds so a large pool of money is created thereby maximizing returns.

As the name suggests, a ‘mutual fund’ is an investment vehicle that allows several investors to
pool their resources in order to purchase stocks, bonds and other securities.

These collective funds (referred to as Assets under Management or AUM) are then invested by an
expert fund manager appointed by a mutual fund company (called Asset Management Company
or AMC).

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Why select Mutual Fund?

1. MFs are managed by professional fund managers, responsible for making wise investments
according to market movements and trend analysis.

2. MFs allow you to invest your savings across a variety of securities and diversify your assets
according to your objectives, and risk tolerance.

3. MFs provide investors the freedom to earn on their personal savings. Investments can be as
less as Rs. 500.

4. MFs offer relatively high liquidity.

5. Certain mutual fund investments are tax efficient. For example, domestic equity mutual funds
investors do not need to pay capital gains tax if they remain invested for a period of above 1
year.

Mutual funds allow investors to pool in their money for a diversified selection of securities,
managed by a professional fund manager. It offers an array of innovative products like fund of
funds, exchange-traded funds, Fixed Maturity Plans, Sectorial Funds and many more.

Generally, an investor would look at, inter alia, the following factors while shortlisting funds:

• Past performance;
• Category (large cap, small and mid-cap, etc.);
• Comparison with other schemes.
However, usually this exercise is carried out only at the time of investing in the fund and is not
continued once the investment has been made. In this article, we wish to highlight why it is
important to monitor fund performance at least once a year if not on a regular basis. Especially, it

9
becomes really important to identify and understand if there are any significant changes in the
fundamental structure of the fund and how it is managed.

HISTORY OF INDIAN MUTUAL FUND INDUSTRY:

EARLIER HISTORY:

The history of mutual funds dates back to 19th century Europe, in particular, Great Britain. Robert
Fleming set up in 1868 the first investment trust called Foreign and Colonial Trust which promised
to manage the finances of the moneyed classes of Scotland by spreading the investment over a
number of different stocks. This investment trust and other investment trusts which were
subsequently set up in Britain and the US, resembled today’s close-ended mutual funds.

The first mutual fund in the US, Massachusetts Investors’ Trust, was setup in March 1924. This
was the first open-ended mutual fund. The stock market crash in 1929, the Great Depression, and
the outbreak of the Second World War slackened the pace of growth of the mutual fund industry.
Innovations in products and services increased the popularity of mutual funds in the 1950s and
1960s. The first international stock mutual fund was introduced in the US in 1940. In 1976, the
first tax-exempt municipal bond funds emerged and in 1979, the first money market mutual funds
were created. The latest additions are the international bond fund in 1986 and arm funds in 1990.
This industry witnessed substantial growth in the eighties and nineties when there was a significant
increase in the number of mutual funds, schemes, assets, and shareholders. In the US, the mutual
fund industry registered a tenfold growth in the eighties (1980-89) only, with 25% of the household
sector’s investment in financial assets made through them. Fund assets increased from less than
$150 billion in 1980 to over $4 trillion by the end of 1997. Since 1996, mutual fund assets have
exceeded bank deposits. The mutual fund industry and the banking industry virtually rival each
other in size.

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 Growth of Mutual Funds in India:
The Indian mutual fund industry has evolved over distinct stages. The growth of the mutual fund
industry in India can be divided into four phases:

{Phase I (1964-87), Phase II (1987-92), Phase III (1992-97), and Phase IV (beyond 1997).}

Phase I: The mutual fund concept was introduced in India with the setting up of UTI in 1963.
The Unit Trust of India (UTI) was the first mutual fund set up under the UTI Act, 1963, a special
act of the Parliament. It became operational in 1964 with a major objective of mobilizing savings
through the sale of units and investing them in corporate securities for maximizing yield and capital
appreciation. This phase commenced with the launch of Unit Scheme 1964 (US-64) the first open-
ended and the most popular scheme. UTI’s investible funds, at market value (and including the
book value of fixed assets) grew from Rs 49 crore in1965 to Rs 219 crore in 1970-71 to Rs 1,126
crore in 1980-81 and further to Rs 5,068 crore by June 1987. Its investor base had also grown to
about 2 million investors. It launched innovative schemes during this phase. Its fund family
included five income-oriented, open-ended schemes, which were sold largely through its agent
network built up over the years. Master share, the equity growth fund launched in 1986, proved to
be a grand marketing success. Master share was the first real close-ended scheme floated by UTI.
It launched India Fund in 1986-the first Indian offshore fund for overseas investors, which was
listed on the London Stock Exchange (LSE). UTI maintained its monopoly and experienced a
consistent growth till 1987.

Phase II: The second phase witnessed the entry of mutual fund companies sponsored by
nationalized banks and insurance companies. In 1987, SBI Mutual Fund and Can bank Mutual
Fund were set up as trusts under the Indian Trust Act, 1882. In 1988, UTI floated another offshore
fund, namely, The India Growth Fund which was listed on the New York Stock Exchange (NYSB).
By 1990, the two nationalized insurance giants, LIC and GIC, and nationalized banks, namely,
Indian Bank, Bank of India, and Punjab National Bank had started operations of wholly-owned
mutual fund subsidiaries. The assured return types of schemes floated by the mutual funds during
this phase were perceived to be another banking product offered by the arms of sponsor banks. In
October 1989, the first regulatory guidelines were issued by the Reserve Bank of India, but they
were applicable only to the mutual funds sponsored by FIIs. Subsequently, the Government of
India issued comprehensive guidelines in June 1990 covering all ‘mutual funds. These guidelines
emphasized compulsory registration with SEBI and an arm’s length relationship be maintained
between the sponsor and asset management company (AMC). With the entry of public sector
funds, there was a tremendous growth in the size of the mutual fund industry with investible funds,
at market value, increasing to Rs 53,462 crore and the number of investors increasing to over 23
million. The buoyant equity markets in 1991-92 and tax benefits under equity-linked savings
schemes enhanced the attractiveness of equity funds.

Phase III: The year 1993 marked a turning point in the history of mutual funds in India. Tile
Securities and Exchange Board of India (SEBI) issued the Mutual Fund Regulations in January
1993. SEBI notified regulations bringing all mutual funds except UTI under a common regulatory
framework. Private domestic and foreign players were allowed entry in the mutual fund industry.
Kothari group of companies, in joint venture with Pioneer, a US fund company, set up the first

11
private mutual fund the Kothari Pioneer Mutual Fund, in 1993. Kothari Pioneer introduced the
first open-ended fund Prima in 1993. Several other private sector mutual funds were set up during
this phase. UTI launched a new scheme, Master-gain, in May 1992, which was a phenomenal
success with a subscription of Rs 4,700 crore from 631akh applicants. The industry’s investible
funds at market value increased to Rs 78,655 crore and the number of investor accounts increased
to 50 million. However, the year 1995 was the beginning of the sluggish phase of the mutual fund
industry. During 1995 and 1996, unit holders saw erosion in the value of their investments due to
a decline in the NA V s of the equity funds. Moreover, the service quality of mutual funds declined
due to a rapid growth in the number of investor accounts, and the inadequacy of service
infrastructure. A lack of performance of the public sector funds and miserable failure of foreign
funds like Morgan Stanley eroded the confidence of investors in fund managers. Investor’s
perception about mutual funds gradually turned negative. Mutual funds found it increasingly
difficult to raise money. The average annual sales declined from about Rs 13,000. Crore in 1991-
94 to about Rs 9,000 crore in 1995 and 1996.

Phase IV: During this phase, the flow of funds into the kitty of mutual funds sharply increased.
This significant growth was aided by a more positive sentiment in the capital market, significant
tax benefits, and improvement in the quality of investor service. Investible funds, at market value,
of the industry rose by June 2000 to over Rs 1, 10,000 crore with UTI having 68% of the market
share. During 1999-2000 sales mobilization reached a record level of Rs 73,000 crore as against
Rs 31,420 crore in the preceding year. This trend was, however, sharply reversed in 2000-01. The
UTI dropped a bombshell on the investing public by disclosing the NAV of US-64-its flagship
scheme as on December 28, 2000, just at Rs 5.81 as against the face value of Rs 10 and the last
sale price of Rs 14.50.

The disclosure of NAV of the country’s largest mutual fund scheme was the biggest shock of the
year to investors. Crumbling global equity markets, a sluggish economy coupled with bad
investment decisions made life tough for big funds across the world in 2001-02. The effect of these
problems was felt strongly in India also. Pioneer m, JP Morgan and Newton Investment
Management pulled out from the Indian market. Bank of India MF liquidated all its schemes in
2002. The Indian mutual fund industry has stagnated at around Rs 1, 00,000core assets since 2000-
01. This stagnation is partly a result of stagnated equity markets and the indifferent performance
by players. As against this, the aggregate deposits of Scheduled Commercial Banks (SCBs) as on
May 3, 2002, stood at Rs 11,86,468 crore. Mutual funds assets under management (AUM) form
just around 10% of deposits of SCBs. The Unit Trust of India is losing out to other private sector
players. While there has been an increase in AUM by around 11% during the year 2002, UTI on
the contrary has lost more than 11% in AUM. The private sector mutual funds have benefited the
most from the debacle ofUS-64 of UTI. The AUM of this sector grew by around- 60% for the year
ending March 2002

Major Mutual Fund Companies in India:

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AXIS MUTUAL FUND

BIRLA SUN LIFE MUTUAL FUND

BANK OF INDIA INVESTMENT MANAGER

CANARA ROBECO MUTUAL FUND

DPS MUTUAL FUND

HDFC MUTUAL FUND

ICICI PRUDENTIAL MUTUAL FUND

IDBI MUTUAL FUNDS

IDFC MUTUAL FUND

KOTAK MUTUAL FUND

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L&T MUTUAL FUND

MIRAE ASSET MUTUAL FUND

MOTILAL OSWAL MUTUAL FUND

PPFAS MUTUAL FUND

PRAMERICA MUTUAL FUNDS

PRINCIPAL MUTUAL FUND

QUANTUM MUTUAL FUND

RELIANCE MUTUAL FUNDS

SBI MUTUAL FUND

UTI MUTUAL FUND

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 ORGANISATION STRUCUTRE OF MUTUAL FUND:

Advantages of mutual fund:

• Professional management:
Mutual funds have experienced and professionally trained managers who will keep an eye on them
at all times.

• Liquidity:
When we decide that we don’t want to invest in a mutual fundanymore, we can easily get out.
We just have to instruct our financial advisor or broker to sell, and that’s it. After a few days, we’ll
get our funds back. Thus, it’s obvious that mutual funds are much easier to liquidate, unlike
individual stocks.

• Diversification:
One of the most important things about investing is that we should always pay attention to
diversification. Luckily, that’s easy with mutual funds. We only need to make one investment, and
instantly, we’ll become shareholders of stocks from a variety of corporations. Moreover, mutual
funds deal with all sorts of securities, including cash, commodities stocks, and bonds. Thus, even
if one stock plummets, there are others we can rely on.

• The perfect investment:

15
What’s great about mutual funds is that we can easily find just the perfect investment for ourselves.
If we do our research well, we can find a mutual fund that will match both our investment horizon
and our risk tolerance.

Disadvantages of Mutual funds:

• High fees:
Some studies have shown that higher fees can indicate a lower performance. Thus, mutual funds
can also be a gamble as well, as their fees get paid first. Moreover, their fees are quite high, as
mutual funds have to pay marketing expenses and salaries.

• Multiple fees:
If we decide to invest in mutual funds, we have to be aware of the fact that they’ll charge us for
more than just the regular fees. If we want to redeem our money, we’ll have to pay a fee. Moreover,
there’s also the operating expense, which is a percentage of the total operating cost of the fund.
We’ll usually pay the operating fee on a yearly basis, which could significantly reduce our
returns.

• Wasting money:
Investors can sometimes withdraw their mutual funds, which means that these funds need to have
cash available at all times. However, we cannot collect interest on cash. Thus, it’s better just to
keep the cash in our bank accounts. Otherwise, it’s just wasted.

• The locked-in clause:

Some mutual funds will allow us to go in and out whenever we want. However, there are those that
lock us in for a decent amount of time — anywhere from five to seven years. So if we want to get out
a bit earlier, we’ll have to pay a fee

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 TYPES OF MUTUAL FUNDS

Different types of Mutual Funds:

Mutual funds can be classified based on following parameters:

1) The type of assets they manage – Equity, Bonds, Cash, Real-Estate etc.,

2) The time range of the funds – Close & Open ended. Even Interval funds

Classifications of mutual funds based on assets

1. Equity mutual funds:

Equity mutual funds are funds which collect funds from investors and make long term
investments in equity/stocks. While in short term they can be risky, equity mutual funds give the
best possible returns in long term. Most of the funds known to Indian investor community belong
to equity mutual funds. They can be be further classified based on their operation/benefits

▪ Diversified equity – They predominantly invest in stocks from different size of

companies from different sectors. They are good because they give diversification of
underlying assets held by the fund. They invest in wide range of stocks -from small market-
cap stocks like Nucleus Software to ultra-large companies like Reliance, ITC etc., HDFC
Top200 fund, IDFC Premier Equity fund all belong to this category of Diversified Equity
funds

▪ Index mutual funds – Index mutual funds are for the conservative investors. They have
the risk of stock markets alone. As the name indicates, they invest in the entire capitalization
of the index. Most of the time, Index funds are passively managed ie., there is no constant
buying and selling. This translates to low fund management charges and peace of mind for
investor. If you’re skeptical about abilities of all fund managers, then get yourself an Index
fund.

▪ Sectorial/Thematic funds–Sectorial funds typically invest in one sector. There is variety

of sectorial funds like Banking, IT, Infrastructure, Commodities etc., Sectorial funds carry
higher risk-reward ratio compared to Index or diversified funds. They become popular
during boom periods. Remember the boom of 2006-07 when every fund house was selling
Infrastructure funds as the next big thing? Try to stay away from sector funds if you’re a
low risk investor.

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▪ Tax saving mutual funds – Tax saving mutual funds are ELSS funds which have tax
benefits under section 80C. The government encourages tax saving schemes to get Indians
exposed to equity. You can get a maximum of Rs. 1 lakh as deduction. HDFC Tax Saver,
ICICI Pru Tax plan are tax saving mutual funds belonging to this category.

2) Debt/Income mutual funds

Debt mutual funds invest in Corporate deposits, government securities, debentures and other
fixed income products. They are primarily based on interest from these instruments. The returns
are comparatively lower than equity funds. But the risks are also lower and are preferred by low
risk investors

3) Balanced mutual funds

Balanced mutual funds invest in debt and equity in some pre-determined proportions. This
percentage is disclosed at the time of investment. Balanced funds are ideal for investors who
want to combine debt and equity in same mutual fund. They reduce the equity when its goes
beyond stipulated percentage of fund value and vice-versa when it goes below.

4) REIT – Real Estate Funds

Real Estate trusts (REIT) are funds that invest in Real estate on behalf of investors. Have you
ever longed that you can’t invest in real estate as it’s too costly. Welcome to REITs. These funds
collect money and buy real estate which they sell for a profit. Sometimes they also own and rent
them for long term lease. The mode of operation differs among funds. These funds are not
popular in India much now. However, we can expect them to gain popularity in future.

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5) Gold ETFs
Gold ETFs cannot be strictly called mutual funds. They invest in gold and each unit in an ETF
represents one gram. They securely save gold in lockers on behalf of investors and investors are
credited with units in their demat accounts. These units are traded in the NSE/BSE. They have
great advantage of easy maintenance, exempt from wealth tax and are ideal for portfolio
diversification.

6) Liquid mutual Funds

Liquid funds are funds that invest in treasury bills, certificate of deposits and deposits with low
time frame. They ensure that the corpus is available as cash to investors at short notice. They
have no lock-in period and returned around 9%per annum last year. These are best place to
invest money instead of savings deposit as they’re extremely liquid. They’re among the higher
assets under management for fund houses in short-term.

Classification of mutual funds based on time frame:

The entire asset based funds listed above, either fall into the open-funded or close-ended
category. Let us see what they are…

1) Open Ended mutual funds

Open Ended mutual funds are funds that do not have an end date (atleast hypothetically). Users
can invest in the funds and withdraw money as they desire at market prices. Most of diversified
funds tend to be Open-ended so that they can provide liquidity to investors.

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2) Close Ended mutual funds
Closed Ended funds typically furnish the fund end date at initial launch itself. They typically
operate to take benefit of any momentum in the market. That’s reason why they were invented
but not sure if that’s happening . So for example, if a close ended fund with 5 years launches in
2011, they have to close the fund and return to investors by 2016. But many funds convert them
to open ended to cover sub-optimal performance. That’s another reason why we ask investors to
avoid close ended funds. However you can consider below options

▪ Fixed Maturity Plans – These are close ended debt schemes that invest in debt and money
market instruments. They are much like fixed deposits except that return may vary little.
They are called fixed maturity because just like bonds, the asset is held for a certain period
till maturity. They have low expense ratio.

▪ Capital Protection Funds – A capital protection fund is a hybrid fund. They typically
invest 70-80%in debt and the rest in equities. As name indicates the main goal is capital
protection and not returns. Ideal for the low risk investor. Over the last 3 years, these funds
on an average have managed 6.2% returns per annum.

Performance
Evaluation
Effective investment
decision in Mutual
funds

Mutual fund

Herding

20
 CONCEPTUAL FRAMEWORK

Theoretical Framework

Performance evaluation:

Mutual fund investment has lot of changes in the recent past, and investors mentality and their
expectation are changing in the present scenario. Investor’s preference towards return, risk varies
often. The investor should compare the risks and returns before investing in a particular fund. For
this, he should get the advice from experts and consultants and distributors of mutual fund
schemes. The investors can invest in the mutual fund and can be to get more benefits. Periodically
checking up on how the mutual fund is doing is important, and there are lots of measures that the
investor can use to perform the checking. A funds track record may be the single most important
factor that an investor checks before opting for a mutual fund product. Hence evaluating funds is
important before investing. But it is becoming increasingly important for investors to take note of
other parameters too, while deciding between mutual funds. Of course, investors need to weigh
the savings on expenses against the performance record before choosing a fund. Over the past
decades mutual funds have grown intensely in popularity and have experienced a considerable
growth rate. Mutual funds are popular because they make it easy for small investors to invest their
money in a diversified pool of securities. As the mutual fund industry has evolved over the years,

21
there have arisen many questions about the nature of operations and characteristics of these funds.
Thus the fund evaluation process helps the investors to know more about the funds and its
performance.

Risk Adjusted Return:

Risk-adjusted return defines an investment's return by measuring how much risk is involved in
producing that return, which is generally expressed as a number or rating. Risk-adjusted returns
are applied to individual securities, investment funds and portfolios.

BENCHMARK:

A benchmark is a standard against which the performance of a mutual fund can be measured. Since
2012, SEBI made it mandatory for fund houses to declare a benchmark index. This benchmark is
independent and is based on the objectives of your fund. Most large-cap oriented equity funds
benchmark themselves against the Sensex or the Nifty. Other benchmarks are CNX Midcap, CNX
Small cap, S&P BSE 200, etc. Hence, an investor in an equity mutual fund benchmarked against
the CNX Midcap.

Relative performance with PEERS:

Relative performance with the peers is yardsticks of the effectiveness of your mutual fund of the
same category mutual fund actively try to top the ranking of the fund universe. Intended towards
a higher return for the determined period of value learning the relative peer performance is
recommended.

Quality of stock in the portfolio:

Quality of stock in the portfolio is reflected in its ability to drive superior return on capital invested
for a specified period of time. It is wise to check the industry leadership position of the mutual
fund. Quality of the stock in the portfolio would reflect in return hence in the performance.
Qualitative of the stock in the portfolio would reflect in return hence in the performance.
Qualitative statistic and historical performance of mutual funds would help evaluating the
performance.

Track record and competence of the fund’s managers:

Your mutual fund is an important person who makes investment decision and stock selection in
the portfolio. Understand your fund manager’s competence according to their fund management

22
knowledge and ability. Your fund manager past performance would be a good parameter to track
their record and could turn to be of a great value for your investment.

Tax benefit on ICICI prudential MUTUAL FUND schemes:

Mahindra finance Prudential Asset Management Company Ltd. is a leading asset management
company (AMC) in the country focused on bridging the gap between savings & investments and
creating long term wealth for investors through a range of simple and relevant investment
solutions....

The AMC is a joint venture between Mahindra Finance Bank, a well-known and trusted name in
financial services in India and Prudential Plc, one of UK’s largest players in the financial
services sectors. Throughout these years of the joint venture, the company has forged a position
of pre-eminence in the Indian Mutual Fund industry.

The AMC manages significant Assets under Management (AUM) in the mutual fund segment.
The AMC also caters to Portfolio Management Services for investors, spread across the country,
along with International Advisory Mandates for clients across international markets in asset
classes like Debt, Equity and Real Estate.

The AMC has witnessed substantial growth in scale; from 2 locations and 6 employees at the
inception of the joint venture in 1998, to a current strength of 2125 employees with a reach
across over 300 locations reaching out to an investor base of more than 4 million investors (As
on December 31, 2018). The company’s growth momentum has been exponential and it has
always focused on increasing accessibility for its investors.

Driven by an entirely investor centric approach, the organization today is a suitable mix of
investment expertise, resource bandwidth and process orientation. The AMC endeavors to
simplify its investor’s journey to meet their financial goals, and give a good investor experience
through innovation, consistency and sustained risk adjusted performance.

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Mutual Fund

Mahindra Finance Prudential Mutual Fund (the Fund) offers a wide range of retail and corporate
investment solutions across various asset classes - Equity, Fixed Income and Gold.

The Fund House has continuously aimed to provide investors with financial solutions to aid them
in achieving their lifecycle objectives. It has constantly been on the forefront of innovation and
has introduced various products aligned to meet customer needs, leading to a well-diversified
portfolio of around 47 mutual fund products, across equity and debt. The success of the various
endeavors is evident in the mutual fund investor base which has witnessed tremendous growth
over the years. As of March 31, 2018, the investor base for the AMC stood at 3 million customers.

Mahindra Finance Prudential Mutual Fund gained investor trust by managing funds as per its
investment objectives and have been able to deliver superior risk adjusted returns. The consistent
long term performance was achieved on the strength of fundamentals, process driven investment
approach with enough flexibility for the fund managers to manage their funds in their respective
unique style and insight.

24
The fund house over the last 20 years has emerged as a leading investment solution provider in
India and has always aimed to fulfill its fiduciary responsibility of managing investor's wealth with
prudence and due diligence.

Companies details:

Key Information

Mutual Fund MAHINDRA FINANCE Prudential Mutual Fund

Setup Date Oct-13-1993
Incorporation Date Jun-22-1993
Sponsor Prudential Plc and MAHINDRA Bank Ltd.
Trustee MAHINDRA Prudential Trust Ltd.
Chairman Ms. Chanda Kochhar
CEO / MD Mr. Nimesh Shah
CIO Mr. S Naren
Compliance Officer Ms. Supriya Sapre
Investor Service Officer Mr. Yatin Suvarna
Assets Managed Rs. 307735.44 crore (Dec-31-2018)

Other Details

Auditors M/s S. R. Batliboi & Co. LLP

Custodians Citibank N.A. / Deutsche Bank A.G / HDFC Bank Limited / HSBC

Registrars Computer Age Management Services Private Limited

Address One BKC, A-Wing, 13th Floor, Bandra Kurla Complex Mumbai
400051
Telephone Nos. 022-26525000

Fax Nos. 022-26528100

E-mail enquiry@icicipruamc.com

25
Factors determining the tax status of mutual funds

The capital gains tax on mutual fund withdrawals is based on the factors as below;

1. Residential Status
2. Fund Type (whether the fund is an Equity-oriented fund (or) a Non-Equity
Oriented Fund)
3. Holding Period (Duration of your investment)

1. Residential Status & Mutual Funds Taxation

The capital gains tax rates are determined based on the residential status of an individual /
investor. Residential status can be either ‘Resident Indian’ or ‘Non-Resident India” (NRI).

2. Type of Funds & Mutual Funds Taxation

26
What are Equity-oriented Mutual Funds? – MF schemes that invest at least 65% of
its fund corpus into equity and equity related instruments are known as equity mutual funds.
Examples are: Large cap, Mid-cap, Balanced funds (equity oriented), Sector funds etc.,

What are Non-Equity Mutual Funds? – MF schemes that hold less than 65% of their portfolio in
equities and equity related instruments are known as Non-Equity Funds / Debt funds. Examples
are: Liquid Mutual funds, Money Market funds, Gold funds, Infrastructure debt funds, Balanced
funds (Debt oriented) etc.

3. Period of Holding & Capital Gains on Mutual Funds

Capital gains on Mutual funds could be either long term capital gains or short term capital gains,
depending on your investment horizon.

• Long Term Capital Gains

• If you make a gain / profit on your investment in a Equity Mutual Fund scheme that
you have held for over 1 year, it will be classified as Long Term Capital Gain.
• If you make a gain / profit on your investment in a Non-Equity Mutual Fund
scheme (or in a Debt Fund) that you have held for over 3 years, it will be classified
as Long Term Capital Gain.

Short Term Capital Gains

• If you’re holding in a Equity mutual fund scheme is less than 1 year i.e. if you
withdraw your mutual fund units before 1 year, after making a profit, then the profit
will be considered as Short Term Capital Gain.
• If you make a gain / profit on your Debt fund (or other than equity oriented
schemes) that you have held for less than 36 months (3 years), it will be treated as
Short Term Capital Gain

27
28
 CHAPTER 2: AIMS AND OBJECTIVES OF THE STUDY

●To have a better understanding of mutual funds _its working ,its structure, types
of mutual funds and history of mutual funds.

●To understand the benefits of investing in mutual funds.

●To study about risk factors involved in the mutual funds and how to analyze it .

●To study the factors considered while investing in mutual funds

29
CHAPTER 3: HYPOTHISES

30
1= positive: Mutual funds has not performed better than market and PMS

negative : Mutual funds has performed better than market and PMS

2=positive: There is no relationship between market and mutual funds

Negative: There is relationship between market and mutual funds

3= positive: Mahindra finance mutual funds is not better than HDFC mutual funds

negative: Mahindra finance mutual fund is better than HDFC mutual funds

4=positive: Mahindra finance mutual fund is not more beneficial compare HDFC
mutual funds

negative: Mahindra finance mutual fund is more beneficial compare to HDFC

mutual funds

31
CHAPTER 4- MAHINDRA FINANCE LTD

Mahindra & Mahindra Financial Services Limited (MMFSL) is a Rural NBFC

headquartered in Mumbai, India.[2] It is amongst the top tractor financer in India and
offers a wide range of financial products to address varied customer
requirements.[3] The NBFC has 1000+ offices spread across 1 in every 3 villages
across India with a total of more than 4.7 Million customers till date.

Mahindra & Mahindra Financial Services

Limited.

Type Public company

Traded as NSE: M&MFIN

BSE: 532720

Industry NBFC

Founded 1991

Headquarters Mumbai, India

Area served India

Key people Ramesh Iyer, Vice Chairman &

President Mahindra Financial
Service Sector

Products Financial services

Revenue ₹49,5300 million (FY'16)[1]

32
 Total assets ₹31,6650.72 million (FY'17)

Total equity ₹1,1270.1 million (FY'17)

Number of 35,000+ (FY'18)

employees

Parent Mahindra & Mahindra

Subsidiaries Mahindra Insurance Brokers

Limited
Mahindra Rural Housing Finance
Mahindra Asset Management
Company

Website MahindraFinance.com

Mahindra Finance started on 1 January 1991, as Maxi Motors Financial Services

Limited.[4]They received the certificate of commencement of business on 19 February
1991. On 3 November 1992, Mahindra Finance changed their name to Mahindra &
Mahindra Financial Services Limited.[5]Mahindra Finance is registered with the Reserve
Bank of India as an asset finance, deposit taking NBFC.
In 1993 it commenced financing M & M Utility vehicles and in 1995 started its first
branch outside Mumbai, in Jaipur. Began financing Non M & M vehicles in 2002 and got
into the business of financing of commercial vehicles and construction equipment in
2009. 2011 was the year in which they had a joint venture with Rabobank subsidiary for
tractor financing in the US and consolidated the product portfolio by introducing small
and medium enterprises (SME) financing.[6]

Products and services

● Vehicle financing
Vehicle Financing: Auto and utility vehicles, tractors, cars, commercial vehicles and
construction equipment.

33
Pre-owned vehicle financing: Loans for pre-owned cars, multi-utility vehicles, tractors and
commercial vehicle.

● SME financing
Loans for varied purposes like project finance, equipment finance and working capital
finance.[8]
● Housing finance
Finances rural and semi-urban population to build self-sustaining houses, pukka houses
and ensure their upliftment in society.

● Insurance broking
Insurance solutions to retail customers as well as corporations through our [who?]subsidiary
Mahindra Insurance Brokers Limited
Asset management company (mutual fund)
Launched in June 2016, it offers mutual fund products, whose NAV is around 1000 INR. The
MAMC started with an AUM of 1200 Million INR.

● Mutual fund distribution

Advises clients on investing money through AMFI certified professionals under the brand
Mahindra Finance Fin smart
Fixed deposits
The MMFSL Fixed Deposit has a CRISIL rating of 'FAAA', indicating a high level of
safety.[citation needed]

34
Mahindra Insurance Brokers Limited
In FY 2012-13, the insurance broking subsidiary, Mahindra Insurance Brokers Limited
(MIBL) crossed the 8,00,000 mark in terms of the policies served. The company's total
policies, at the end of 2012-13, stood at 8,39,408 for both life and non-life retail
business lines. It reached a total of Rs. 600 Crores gross premium. The income increased
by 85 per cent from Rs. 46.6 Crores in 2011-12 to Rs. 86.3 Crores in 2012-13. During the
year, MIBL entered into a strategic partnership with investments, world's largest investor
in insurance for the underserved.[11]Through its subsidiary company, Inclusion
Resources Private Limited, Leapfrog invested Rs. 80.4 Crores for a 15 per cent
shareholding in MIBL. Mahindra finance launched online insurance aggregator
Paybima[12]. Paybima is the online portal of Mahindra Insurance Brokers Ltd.

35
Mahindra Rural Housing Finance Limited
3 stood at Rs. 222.3 Crores, against Rs. 11.9 Crores in the previous year. The outstanding
loan portfolio, as on 31 March 2013, stood at Rs. 879.5 Crores.[13]

Mahindra Business and Consulting Services Private Limited

Mahindra Finance's wholly owned subsidiary, Mahindra Business & Consulting Services
Private Limited (MBCSPL), provides staffing services primarily to Mahindra Finance. It
also serves the subsidiaries (MIBL and MRHFL) and parent company (Mahindra &
Mahindra Limited). During the year, MBCSPL deputed 8,098 employees to these
companies. The Profit after Tax increased from Rs. 7.1 Lacs in 2011-12 to Rs. 173.8 Lacs
in 2012-13.[14] and also turnover

SCHEMES PROVIDED BY MAHINDRA FINANCE

36
Mahindra Asset Management Co. Ltd.
Schemes Managed see cover page >>

Scheme Name Rating Download Category Latest 1 yr Assets

NAV Returns (Rs. cr.)
(%)

MMF Badhat Yojana - DP (D) Not N.A. Multi Cap Fund 11.34 5.6 14.33
Ranked

MMF Badhat Yojana - DP (G) Not N.A. Multi Cap Fund 11.34 5.3 14.33
Ranked

MMF Badhat Yojana - RP (D) Not N.A. Multi Cap Fund 10.68 3.6 269.97
Ranked

MMF Badhat Yojana - RP (G) Not N.A. Multi Cap Fund 10.68 3.5 269.97
Ranked

MMF Bal Vikas Yojana - DP Aggressive Hybrid

Not N.A. 0.00 --
(D) Fund
Ranked

MMF Bal Vikas Yojana - DP Aggressive Hybrid

Not N.A. 0.00 --
(G) Fund
Ranked

MMF Bal Vikas Yojana - RP Aggressive Hybrid

Not N.A. 0.00 --
(D) Fund
Ranked

MMF Bal Vikas Yojana - RP Aggressive Hybrid

Not N.A. 0.00 --
(G) Fund
Ranked

Mahindra Credit Risk Yojana

N.A. Credit Risk Fund 11.34 9.2 59.61
- DP (DD) Rank 2

Mahindra Credit Risk Yojana

N.A. Credit Risk Fund 11.34 9.2 59.61
- DP (G) Rank 2

Mahindra Credit Risk Yojana

N.A. Credit Risk Fund 10.93 5.2 59.61
- DP (QD) Rank 2

Mahindra Credit Risk Yojana

N.A. Credit Risk Fund 11.15 8.0 100.74
- RP (DD) Rank 2

Mahindra Credit Risk Yojana

N.A. Credit Risk Fund 11.15 8.0 100.74
- RP (G) Rank 2

37
 Mahindra Credit Risk Yojana
N.A. Credit Risk Fund 10.74 4.0 100.74
- RP (QD) Rank 2

Aggressive Hybrid
Mahindra HENY - DP (D) Not N.A. 10.65 -- 1.36
Fund
Ranked

Aggressive Hybrid
Mahindra HENY - DP (G) Not N.A. 10.65 -- 1.36
Fund
Ranked

Aggressive Hybrid
Mahindra HENY - RP (D) Not N.A. 10.53 -- 64.96
Fund
Ranked

Aggressive Hybrid
Mahindra HENY - RP (G) Not N.A. 10.53 -- 64.96
Fund
Ranked

Ultra Short Duration

Mahindra LDBY- DP (D) N.A. 0.00 --
Rank 3 Fund

Mahindra LDBY- DP (G) N.A. Low Duration Fund 1,261.97 8.7 153.02
Rank 3

Mahindra LDBY- DP (MD)

Awards and recognitions

• BITS – Winner of Nasscom IT User Awards, 2012 Organized by NASSCOM[18]
• Winner of Golden Peacock HR Excellence Awards Organized by Institute of Directors[19]
• Silver Award for Best Corporate Website Organized by ABCI Awards in 2012 ( Association of
Business Communicators of India)[20]
• Silver Award for Best Corporate Website [21]
• Ranked 10th in the Dun & Bradstreet's India's Top 500 Companies 2012

38
FEATURES AND BENEFITS FOR EMPLOYEES
INVESTMENT IN MAHINDRA FINANCE
• The MMFSL fixed deposit has a CRISIL rating of ‘FAAA’ which indicates high
level of safety

• 0.25% additional interest rate for senior citizen for Samrudhhi fixed deposit

• 0.35% additional interest rate for all group of mahindra employees and their
relatives

39
INVESTMENT IS SAFE IN MAHINDRA
FINANCE
Mahindra Finance, India’s leading rural finance company, is an NBFC whose FDs have become
attractive among a section of investors because of higher interest rates. As per the company, its
fixed deposits have a Crisil rating of ‘FAAA’, which indicates a high level of safety. Moreover,
people investing in the company’s FDs are provided with a free accidental death insurance
coverage of Rs 1 lakh for a year.

Anyone willing to invest in Mahindra Finance FDs can do so either offline or online. Interestingly,
investors are eligible for 0.25% higher interest rates, if they prefer to invest online. Currently you
can earn up to 8.75% by investing online.

Mahindra Finance, in fact, offers two types of fixed deposits – Dhanvruddhi (online) and
Samruddhi (offline). And both the schemes are available in two options – Cumulative as well as
Non-cumulative. In the ‘Non cumulative scheme’ interest is payable on a half-yearly basis, while
in the ‘Cumulative deposit scheme’, interest is payable along with the principal at the time of
maturity.

Samruddhi Fixed Deposits offer 0.25% additional interest rate for senior citizens, and 0.35%
additional interest rate for all Mahindra group company employees & employees’ relatives. In
Dhanvruddhi deposits, senior citizens are entitled for 0.10% additional interest rate.

40
 CHAPTER- 5
RESERCH METHODOLOGY

41
A] SCOPE OF THE STUDY
The study of mutual funds has wider scope. Mutual funds is a professionally
managed form of collective investment that pools money form any investors and
invest in it stocks, bonds, short-term money market instruments and other
securities. Dividend distributed on tax free mutual funds schemes is also tax free
for the unit holders of mutual funds. Taxable distribution can be either ordinary
income or capital schemes which are equity schemes, debt and hybrid schemes.

42
B] CONCEPT AND THE SIGNIFICANCE OF THE STUDY

Mutual fund is mechanism for pooling the resources by issuing units the investors
and investing funds in securities in accordance with objectives as disclosed in offer
document. Investments in securities are spread across a wide cross-section of
industries and sectors and thus the risk is deducted. Diversification reduces the risk
because all stocks may not move in the same direction in the same proportion at
the same time. Mutual funds have proven to be safe investments and hence, it is
important to let individuals familiarize with relevant information about mutual
funds.

This project consists a description of the Mutual Funds industry in brief. It

discusses about the different types of Mutual funds available and the factors to he
taken into consideration. For the selection and evaluation performance of mutual
funds

43
C] LIMITAIONS OF THE STUDY

● The time is the main constraint so limited period of time is spent on this study

● The main study only takes into consideration there returns provided by the funds

● The support from the management side

44
 Research Methodology
Research methodology is the methodology for collecting all sorts of information and data
pertaining to the subject in questions. The objective is to examine all the issues involve and
conduct in situational analysis. The methodology includes the overall research design sampling
procedure and fieldwork done and finally the analysis procedure. The methodology used in the
study consisted of sample survey using primary data. The primary data has been collected with
the help of questionnaires.

RESEARCH DESIGN:
Research design specifies the method and procedure for collection of requisites information and
its measurement and analysis to arrive and certain meaningful conclusion at the end of the
proposed study.

We conducted this research this research with the help of questionnaires and from the initial
stages, to the final designing of questionnaires we conducted our research through descriptive
research design.

Primary Objectives:
• To create awareness among the customers of Mahindra finance about various mutual
fund schemes and their benefits.
• To understand the concept of mutual fund.
• To analysis the growth path of mutual fund sector in India to know why one has invested
or not invested in preferred mutual fund.
Secondary objective:
• To get a general feedback from the customers about Mahindra finance mutual fund
investment and the online portal.
• To make customers understand that it is always better to invest or purchase mutual fund
online than offline.
• To make customers friendly with the website of Mahindramutualfund.com

45
 OBJECTIVE TO STUDY:

➢ The main objective of this project is the following:

➢ To identify the consumers perception about mutual fund.

➢ To understand the functions of an asset management company.

➢ To know the preference for the portfolio.

➢ The objective is to study and analyze the awareness level of investors of mutual
fund.

➢ To measure the satisfaction level of investors regarding mutual fund

Sample design:

Primary data : Through Questionnaires

Secondary data : Through Internet, Journals, Newspaper
Research Instrument : Structured Questionnaires

46
 SOME TAX SAVING SCHEAMS OF MAHINDRA FINANCE MUTUAL
FUND

MAHINDRA FINANCE Pru Regular Saving Funds (G)

Category : Hybrid - Conservative Hybrid

Fund
Funds India Rating : *****
Current NAV (Rs.) : 42.17
Type : Open ended
Benchmark : NIFTY 50 Hybrid Composite
Debt 15:85 Index
Performance (CAGR %)

1 Year 3 Year 5 Year

7.72 10.91 11.50

MAHINDRA FINANCE Pru Regular Saving fund (OD)

Category :Hybrid - Conservative

Hybrid Fund
Funds India Rating :*****
Current NAV (Rs.) :11.45
Type :Open ended
Benchmark :NIFTY 50 Hybrid
Composite Debt 15:85
Index
Performance (CAGR %)

1 Year 3 Year 5 Year

5.96 7.95 8.65

47
MAHINDRA FINANCE Pru Equity Savings Fund(G)

Category : Hybrid - Equity Savings

Funds India Rating : ****
Current NAV (Rs.) : 13.56
Type : Open ended
Benchmark : NIFTY 50 Equity Savings Index

Performance (CAGR %)

1 Year 3 Year 5 Year

5.55 9.79

MAHINDRA FINANCE Pru Equity Savings Fund(MDP)

Category : Hybrid - Equity Savings

Funds India Rating : ******
Current NAV (Rs.) : 10.92
Type : Open ended
Benchmark : NIFTY 50 Equity Savings Index

Performance (CAGR %)

1 Year 3 Year 5 Year

4.67 9.46

48
 CHAPTER - 6
REVIEW OF LITERATURE

49
 : REVIEW OF LITERATURE:

Literature on mutual fund performance evaluation is enormous. A few research studies that have
influenced the preparation of this paper substantially are discussed in this section.

➢ Sharpe; William F. (1966) suggested a measure for the evaluation of portfolio

performance. Drawing on results obtained in the field of portfolio analysis,
economist Jack L. Treynor has suggested a new predictor of mutual fund performance,
one that differs from virtually all those used previously by incorporating the
volatility of a fund's return in a simple yet meaningful manner.

➢ Michael C. Jensen (1967) derived a risk-adjusted measure of portfolio

performance (Jensen’s alpha) that estimates how much a manager’s forecasting ability
contributes to fund’s returns. As indicated by Stat man (2000), the e SDAR of a fund
portfolio is the excess return of the portfolio over the return of the benchmark index, where
the portfolio is leveraged to have the benchmark index’s standard deviations

➢ .Narayan Rao, et. al., evaluated performance of Indian mutual funds in a bear market
throughr e l a t i v e p e r f o r m a n c e i n d e x , r i s k -
r e t u r n a n a l y s i s , T r e y n o r ’ s r a t i o , S h a r p e ’ s r a t i o , S h a r p e ’ s measure ,
Jensen’s measure, and Fame’s measure. The study used 269 open-ended schemes (out of
total schemes of 433) for computing relative performance index. Then after excluding
funds whose returns are less than risk-free returns, 58 schemes are finally used for further
analysis. The results of performance measures suggest that most of mutual fund schemes
in the sample of 58were able to satisfy investor’s expectations by giving excess returns
over expected returns based on both premium for systematic risk and total risk

➢ . Bijan Roy, ET. al., conducted an empirical study on conditional performance

of Indian mutual funds. This paper uses a technique called conditional
performance evaluation on a sample of eighty-nine Indian mutual fund schemes
.This paper measures the performance of various mutual funds with both unconditional and
conditional
form of CAPM, Treynor- Mazuy model and Henriksson-
M e r t o n m o d e l . T h e e f f e c t o f incorporating lagged information va
r i a b l e s i n t o t h e e v a l u a t i o n o f m u t u a l f u n d m a n a g e r s ’ performance is
examined in the Indian context. The results suggest that the use of conditioning lagged
information variables improves the performance of mutual fund schemes, causing alphas
to shift towards right and reducing the number of negative timing coefficients.

➢ Mishra, et al.,(2002) measured mutual fund performance using lower partial moment. In
this paper, measures of evaluating portfolio performance based on lower partial moment
are developed. Risk from the lower partial moment is measured by taking into
account only those states in which return is below a pre-specified “target
➢ rate” like risk-free rate. Kshama Fernandez (2003) evaluated index fund implementation
in India. In this paper, tracking error of index funds in India is measured. The

50
 consistency and level of tracking errors obtained by some well-run index fund suggests
that it is possible to attain low levels of tracking error under Indian conditions.
At the same time, there do seem to be periods where certain index funds appear
to depart from the discipline of indexation. K. Pendaraki et al. studied construction of
mutual fund portfolios, developed a multi-
criteria methodology and applied it to the Greek market of eq
u i t y m u t u a l f u n d s . T h e methodology is based on the combination of discrete and
continuous multi-criteria decision aid methods for mutual fund selection and composition.
UTADIS multi-criteria decision aid methods employed in order to develop mutual fund’s
performance models. Goal programming model is employed to determine proportion of
selected mutual funds in the final portfolios

▪ As the mutual fund industry has developed rapidly over the past 20 years, there has
concomitantly evolved a rich plausible academic literature consisting of numerous topics.
One of the most frequently addressed topics in the current literature is that of mutual fund
performance.
▪ While earlier studies lay emphasis on the straightforward performance measures and
benchmarking, this focus on performance dimension seems to have changed from
performance-based studies to style-based studies which also present information regarding
persistence in fund performance, fund characteristics, behavioral patterns, stock-picking
and timing abilities of managers. Following this shift of emphasis, the methods applied and
the data employed by other papers have changed too.
▪ This study therefore aims to build on the current literature by assessing all these relevant
studies. It further complements the literature by evaluating studies in terms of five distinct
dimensions, namely “Questions Addressed by Author(s), Method(s) Adopted, Data
Employed, Key Findings, and Contribution to the extant literature and Critique”.
▪ Consequently, this study satisfies the need to synthesize the key contributions that have
recently been made on the history of mutual funds by other papers. Having investigated
the recently evolving body of the literature on the respective topics, the common findings
are as follows;

a. Small-cap funds generally outperform large-cap funds and large-cap funds possess more
style consistency than do the mid/small-cap funds. Growth funds play a dominant role in
the late 1990s, whereas value funds are very common before and after this period.

b. There are no clear persistent patterns found and even if there are, it is generally due to luck
rather than skill.

c. Actively managed funds generally underperform passive strategies and there is very little
evidence of fund managers with timing/picking abilities.

d) Low expense ratios are related to superior performance and fund flows are found to be
positively related to advertising and distribution fees. Female managers participate in excessive
trading and are more risk-averse compared to their male counterparts.

51
MAHINDRA FINANCE LTD

452.55 -10.55 -2.28%

11 Mar, 15:44:41

Volume 330,877

Prev Close 463.10

Day's H/L (Rs) 469.70 - 450.00

52wk H/L (Rs) 703.80 - 444.60

Mkt Cap (Rs Cr) 56,261.02

VS

BAJAJ FINANCE LTD

8,250.60 +41.60 +0.51%
11 Mar, 15:49:13

Volume 18,837

Prev Close 8,209.00

Day's H/L (Rs) 8,398.25 - 8,135.35

52wk H/L (Rs) 10,297.00 - 6,555.00

Mkt Cap (Rs Cr) 131,267.05

52
 CHAPTER- 7
DATA ANAYLSIS, INTERPRETATION
AND PRESENTATION

53
 : DATA ANYALYSIS AND INTERPRETATION:

Q1: Rate the mutual fund schemes on the scale of 1 to 5?

Rating No of Respondents

5 25

4 10

NO.OF Respondents

5 4

71
29%
5%5
5
71%

54
Q2: Are you interested to invest in mutual fund through
mahindramutualfunds.com?

Interested Respondents

Yes 17

No 10

Respondent

Yes No

16%

84%

55
Q3: Are you investing in mutual fund through any distributor?

Interest Respondents

Yes 13

No 27

Respondent

Yes No

20%

80%

56
 FINDING

Interpretation and Findings:

• The study revealed that good past performance, tax benefits, knowledge of the
investors, rating of fund, advises given by brokers and agents market conditions all
these factors influenced the investors to select mutual fund as their investment mode.

• The study revealed that inflation and deflation in the market, current political situations,
family commitments, non-fulfillment of financial goals are the factors which
influenced the investors to withdraw from the mutual funds hence to reduce the
withdrawal of the loyal investors need to work on the factors that influences them to
do and search for an alternative schemes which overcomes these negative aspects.

• The study concludes that the Modern investors are a mature and adequately groomed
person. In spite of the phenomenal growth in the security market and quality initial
public offerings in the market the individual investors prefer investments according to
their risk preference.

• The findings of the study revealed that product quality (performance of the fund) and
brand name were the primary factors influencing the investment decision of the mutual
fund investor. Still so many investors are not fully aware of the modes of investments
in mutual funds even they are not aware of their rights, features, past performance
records, involvement of risk in the schemes, profile of fund managers, investment
objectives, portfolio compositions of the schemes etc.

• The study revealed that good past performance, tax benefits, knowledge of the
investors, rating of fund, advises given by brokers and agents market conditions all
these factors influenced the investors to select mutual fund as their investment mode.

• The study revealed that inflation and deflation in the market, current political situations,
family commitments, non-fulfillments of financial goals are the factors which
influenced the investors to withdraw from the mutual funds.

• This study is of great use to government and management companies to as to see the
exploitation of small investors who are the most needed reservoir of capital to flourish
in the investment pattern.

• There is minimal research work done on the selected topic with reference to factors
influencing to invest and withdraw from mutual fund in the time frame of 1974 to 2013.
Further research conducted in this area i.e. in the area of perception of mutual
supportive piece of work for academic and research fraternity as well as asset
management companies to in mutual fund schemes.

57
 CHAPTER-8
SUGGESTION AND RECOMMENDATION

58
 : Suggestion and recommendation:

• Younger people aged fewer than 35 will be a key new customer group into
the future, so making greater efforts with younger customers who show some
interest in investing should pay off.

• Customers with graduate level education are easier to sell to and there is a large
untapped market there. To succeed however, advisors must provide sound advice and
high quality.

• Mahindra finance Securities’ should provide proper guidance it its customers about

• Mutual fund thought seminars or other way of interpretation.

• There should be one department which will call customer once in a month and notice
their problem or their complaints so there would not be any communication gap.

• At the time of opening Mahindra finance Securities’ can offer one tutorial class about
mutual fund or about investments plains so there would not be any lack of knowledge in
customers mind.

• Mahindra finance Securities can send details about investment decision to its customers
through e-mail or SMS.

• Investors should be made aware of the benefits.

• Mutual fund should target on investors from the age group of 26-35 and having
government services, private jobs, business, etc.

59
CHAPTER-9
CONCLUSION

60
There are many types of mutual funds, we can classify funds based on asset class, investing
strategy, region, etc. Mutual Funds have lots of costs, mutual funds are suitable for all age of
investors , businessman ,salary persons, etc.

By comparing the above mentioned asset under management, I Came to know that the asset under
management value of Mahindra finance is better than all finance

• A mutual fund brings together a large group of people and invests their aggregated money
in stocks, bonds, and other securities.

• The advantages of mutual funds are professional management, diversification, economies

of scale, and wide range of offerings.

• The disadvantages of mutual are high costs, over-diversification, possible tax

consequences, liquidity concerns, and the inability of management to guarantee a superior
return.

• There are many, many types of mutual funds. You can classify funds based on asset class,
investing strategy, region, etc.

• Mutual funds have expenses that can be broken down generally into ongoing fees
(represented by the expense ratio) and transaction fees (loads).

• Some funds carry no broker fee, known as no-load mutual funds.

• One of the biggest problems with mutual funds is their costs and fees.

• Mutual funds are easy to buy and sell. You can either buy them directly from the fund
company or through a third party.

• Comparing fund returns across a number of metrics is important, such as over time,
compared to its benchmark, and compared to other funds in its peer group.

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CHAPTER- 10
BIBLOGRAPHY

62
 : BIBLOGRAPHY:

Magazines:

• Business World- The Mutual Fund Industry

Websites:

• https://html2-f.scribdassets.com/2i7cf87ruo149wu9/images/103-bea0bc8870.png

• http://www.sharekhan.com/

• www.amfi.com

• www.mutualfundindia.com

• www.investopedia.comý

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CHAPTER-11
ANNEXURE

64
 ANNEXURE

Questionnaire:

Q1: Rate the mutual fund schemes on the scale of 1 to 5?

o 1

o 2

o 3

o 4

o 5

Q2: Are you interested to invest in mutual fund through

mahindramutualfunds.com?

o YES
o NO

Q3: Are you investing in mutual fund through any distributor?

o YES
o NO

Q4: Any suggestion/feedback

65