A MINOR PROJECT REPORT ON

“MUTUAL FUND INVESTMENTS”

SUBMITTED IN PARTIAL FULFILLMENT FOR THE AWARD OF THE

DEGREE

BACHELOR OF BUSINESS ADMINISTRATION (BBA)

(2021-2024)

Submitted by:

Submitted to: CHIRAG TAPARIA

04921401721
MR. PROMOD PANDEY

JAGANNATH INTERNATIONAL MANAGEMENT SCHOOL

Vasant Kunj, Delhi-110070
 CERTIFICATE

Certified that the project report on "MUTUAL FUND INVESTMENTS” is

the bonafide work of “CHIRAG TAPARIA, 04921401721”, of Guru Gobind
Singh Indraprastha University, Delhi pursuing BBA (2021-24) from Jagannath
International Management School, New Delhi - 110070.
The work has been done under my supervision during the second semester.

Date:

PROMOD PANDEY
JIMS

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 ACKNOWLEDGEMENT

I have taken efforts in this project. However, it would not have been possible
without the kind support and help of many individuals and organizations. I
would like to extend my sincere thanks to all of them.

I am heartily thankful to my institute Jagannath International Management

School (JIMS) for allowing me to undertake this project.

I would like to express my thanks of gratitude to Dr. Ravi K Dhar, Director,

JIMS for their support and guidance.

I would also like to express my special thanks of gratitude to my guide Sir

Promod Pandey JIMS for his valuable help and guidance, and for the
encouragement, he had given me in completing this project.

I would also like to thank my parents and friends who helped me a lot in
finishing this project within the limited time. I am making this project not only
for marks but to also increase my knowledge.
Thanks again to all who helped me.

CHIRAG TAPARIA

04921401721

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 STUDENT’S DECLARATION

I CHIRAG TAPARIA hereby declare that the project report entitled

MUTUAL FUND INVESTMENTS submitted by me to Jagannath
International Management School, Vasant Kunj, Delhi in partial fulfilment of
the requirement for the award of the degree of BACHELORS IN BUSINESS
ADMINISTRATION is a record of Bonafede project work carried out by me
under the guidance of Sir Promod Pandey. I further declare that the work
reported in this project has not been submitted and will not be submitted, either
in part or in full, for the award of any degree or diploma in this institute or any
other institute or university.

CHIRAG
TAPARIA

04921401721

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 TABLE OF CONTENTS
Certificate 2

Acknowledgement 3

Student’s Declaration 4

Executive Summary 6

1. INTRODUCTION 7- 13

1.1. OVERVIEW OF INDUSTRY 8-9

1.2. PROFILE OF ORGANISATION 9-13

2. OBJECTIVES AND METHODOLOGY

2.1. SIGNIFICANCE

2.2. OBJECTIVES

2.3. SCOPE OF THE STUDY

2.4. METHODOLOGY

3. CONCEPTUAL DISCUSSION

4. DATA ANALYSIS

5. FINDINGS AND RECOMMENDATIONS

6. CONCLUSION

7. BIBLIOGRAPHY

ANNEXURE

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 EXECUTIVE SUMMARY

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 CHAPTER 1
INTRODUCTION

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1. INTRODUCTION
1.1. OVERVIEW OF INDUSTRY
A Mutual fund is a financial intermediary which acts as an instrument of investment. It
collects funds from different investors to a common pool of investible funds and then invests
these funds in a wide variety of investment opportunities.
The mutual funds employ professional experts and investment consultants to conduct
investment analysis and then select the portfolio of securities where funds are to be invested.

HISTORY OF MUTUAL FUNDS

The Mutual fund industry started in 1963 with the information of Unit Trust of India, at the
initiative of the Government of India and Reserve Bank of India. The history of mutual funds
in India can be broadly divided into four distinct phases:
FIRST PHASE (1964-1987)
Unit Trust of India (UTI) was established in 1963, was set up by the RBI and functioned
under the Regulatory and administrative control of the RBI. 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. At the end of 1988, UTI had Rs. 6700 crores of assets
under management.
SECOND PHASE- ENTRY OF PUBLIC SECTOR FUNDS (1978-1993)
1987 marked the entry of non-UTI, public sector mutual funds set up by public sector banks
and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India
(GIC). SBI Mutual Fund was the first non-UTI mutual fund established in June 1987. At the
end of 1993, the mutual fund industry had assets under the management of Rs. 47,004 crores.
THIRD PHASE- ENTRY OF PRIVATE SECTOR FUNDS (1993-2003)
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. The industry now
functions under the SEBI (Mutual Fund) Regulations 1996. The number of mutual funds
houses went on increasing, with many foreign mutual funds in India. As of the end of January
2003, there were 33 mutual funds with total assets of Rs. 1, 21,805 crores.
FOURTH PHASE- SINCE FEBRUARY 2003

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In February 2003, following the repeal of UTI was bifurcated into two separate entities. One
is the Specified Undertaking of UTI with assets under management of Rs. 29,835 crores. The
Specified Undertaking of UTI, functions under the rules framed by the Government of India
and does not come under the purview of Mutual Fund Regulations.
The second is in the UTI Mutual Fund, sponsored by SBI, PNB, BOB and LIC. It is
registered with SEBI and functions under the Mutual Fund Regulations. With the bifurcation
of the UTI which had more than Rs. 76,000 crores of assets, in March 2000, under
management and with recent mergers taking place among different private sector funds, the
mutual fund industry has entered its current phase of consolidation and growth.

1.2. PROFILE OF THE COMPANY

A Mutual fund is a financial intermediary which acts as an instrument of investment. It

collects funds from different investors to a common pool of investible funds and then invests
these funds in a wide variety of investment opportunities.
Small investors, who are unable to participate in the capital market can access the stock
market through the medium of mutual funds which can manage their funds for better returns.
The mutual funds employ professional experts and investment consultants to conduct
investment analysis and then select the portfolio of securities where funds are to be invested.
CUSTODIAN
Before the establishment of SEBI, UTI was created to bring savings from the household to
industries and protect the interests of the investors. However, with the growth of
industrialization, there was a need to amend the initial mutual fund regulations. This
eventually paved way for the establishment of SEBI. Because of the involvement of
transactions, the regulations came under the purview of other regulatory authorities as well.
Currently, all the mutual fund regulations are controlled by the following entities:

1. SEBI
No mutual fund can be launched unless the scheme is registered with SEBI. The
Securities Exchange Board of India (Mutual Fund) Regulations 1996, is the Bible
under which all the mutual funds are regulated. The mutual fund regulations are
amended from time to time to bring in consonance with the ever-increasing needs of
investors in light of their protection. Further, SEBI Regulations are universal to bring
greater transparency, stability, and a common governing structure. The registration
process involves numerous disclosures, to provide precise information about the facts

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 of the mutual fund. A mutual fund scheme can be launched only when SEBI is
satisfied with the parameters such as the integrity of the Asset Management Company
(‘AMC’), infrastructure, net worth as specified under regulation etc. After reviewing
all the filters, the mutual funds are registered under SEBI, thus minimizing the risk of
fraud or misuse of funds.
2. Ministry of finance
The Ministry of Finance is the body that helps both the SEBI and RBI in formulating
the policies for mutual fund regulations. SEBI and RBI are quasi-legislative bodies
and have limited lawmaking power. Hence, they both require the MOF to legislate on
certain critical matters. Ministry of Finance through their notifications or circulars,
regulate the mutual funds and aid in protecting the investors.
3. Income Tax Regulations
These mutual fund regulations deal with the income or liquidation of an investment in
mutual fund units. As part of the source of revenue generation for the government,
these regulations are very thorough and pinpoint in their application. Stuff like
Securities Transaction Tax or Capital Gain Tax or Tax Deducted at Source are a part
of these regulations. These mutual fund regulations help investors in their tax
planning regime, and since tax-saving mutual funds have a lock-in period, it
eventually paves way for a longer investment period.
4. RBI

Although RBI is the apex body in banking governance, it has a major role in framing
the mutual fund regulations. All the money market instruments such as treasury bills,
certificates of deposits, call and notice money etc., are governed by the RBI. Therefore,
any mutual fund scheme that invests in the money market instruments requires to be
registered under the RBI. The Reserve Bank of India also plays a direct and vital role in
foreign investment in India.
5. Association of Mutual Funds of India
It is a Non-Profit Organization, established to protect the interests of investors
creating more awareness about investment. The Association of Mutual Fund of India
is a collaboration of the Asset Management Companies registered under SEBI. AMFI
works to formulate mutual fund regulation policies and for maintaining ethical and
healthy standards of operation of schemes. It acts as a link between the mutual fund
industry and the regulators.

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 6. Investors Association

As the name suggests these entities can govern without any government regulations. The
stock exchanges are a prime example of SRO. The stock exchange is governed by SEBI.
However, they implement their regulations in addition to the SEBI regulations, to which the
mutual fund schemes have to adhere. Depository Participants also play a part in SRO and
govern the Demat accounts.
REGULATIONS

• Transparency:
Without transparency, it’s like investing blindly, without any idea about the returns.
Transparency is the foundation of mutual funds regulations, as it involves strict adherence to
the disclosure of information. These disclosures include information such as the net worth of
the scheme maker, profile of directors/ managers, previous track record etc. Thus,
transparency gives all the necessary information to the regulatory body, which in return
decides the viability of the scheme and gives its consent.

• Confidence:
To put it simply, if there aren't any regulators, there won't be any investors. When we search
the school for our kids, we make sure that our kids are safe; the same goes for our money.
Regulators bring confidence to the minds of investors. This confidence is essential to attract
investors not just domestically but across the globe.

• Stability:
Mutual fund regulations help in making informed decisions. Since investments always pertain
to future cash flows, planning is essential and this planning can only be successful if there is
stability in the management of mutual funds. Mutual fund regulations ensure that the fund
remains committed to offering maximum benefit to the investors.

• Industrialization:
Every industry, be it manufacturing or service, requires funds from an external source to
grow. Mutual funds cater to a major part of such requirements. An economy flourishes when
the household savings are injected into it. However, these household savings are mainly
attracted towards bank fixed deposits and other secured assets thus, adjusting on minimal

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returns. Since the inception of mutual fund regulations, the trend has changed, and it has had
a positive impact on the growth of the economy and industrialization.

RETURN PATTERN

Mutual funds are professionally managed by experts responsible for allocating assets to
generate capital gains or profits for their investors. The amount of return generated is
dependent on the mutual funds' performance. Different types of returns are often considered
while assessing a mutual fund.

1) Absolute Return
The absolute return refers to the investment growth achieved in terms of percentage
irrespective of the investment tenure. The growth is expressed in absolute terms and
not in relative or comparative terms. The absolute returns are generally used while
calculating mutual fund returns for a tenure of less than a year.
2) Annualized Return
Annualized return refers to the return received by the investor annually. Annualized
return or CAGR (Compounded Annual Growth Rate) also considers the effect of the
compounded interest rate. Annualized returns are useful in cases where you wish to
compare different mutual funds with different tenures. It gives a better picture of
different mutual funds even when they are traded for different periods.
CAGR = ((Current NAV value/Purchase NAV value) ^ (1/number of years)) – 1]*100
3) Total Return
The total return of a mutual fund refers to the fund's overall gain, including any
interest, dividend, distributions, and capital appreciation over a period. It is a
significant measure to gauge a mutual fund's performance since it reflects the bigger
picture and not just captures the price changes.
Total Returns = [(Capital Gains+dividend)/total investment] * 100
4) Point to Point Return
The annual return generated by a mutual fund between two points in time is referred
to as point-to-point returns.
5) Trailing Return
Trailing returns are the returns generated over a specific period ending today.
For Example: - If today’s NAV is Rs 50, which was Rs 30 two years back, then the
trailing return for the last 2 years will be 28.8% as per the formula which is
Total Returns = (Current NAV/NAV at the starting period) ^ (1/Trailing Period)-1

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 6) Rolling Return
Rolling Returns are annualized returns over a period, which may be daily, weekly or
monthly until the last day of the duration.  It serves as an effective measure for
analyzing a mutual fund's performance since it is not biased for any specific period
and provides a clearer picture to an investor.

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 CHAPTER 2
OBJECTIVES AND METHODOLOGY

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2. OBJECTIVES AND METHODOLOGY

2.1. OBJECTIVES--------------------------------------------------------------
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2.2. SCOPE OF THE

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 CHAPTER 3
DATA ANALYSIS

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3. DATA
ANALYSIS--------------------------------------------------------------
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 CHAPTER 4

FINDINGS AND RECOMMENDATIONS

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4. FINDINGS AND RECOMMENDATIONS

Findings:------------------------------------------------------------------------------------
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Recommendations:------------------------------------------------------------------------
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 CHAPTER 5

CONCLUSION

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5. CONCLUSION
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 CHAPTER 6

BIBLIOGRAPHY

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6. BIBLIOGRAPHY

 www.google.com
 www.moneycontrol.com

 www.quora.com
 www.orowealth.com
 Adityabirlacapital.com


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