A REPORT ON

“MUTUAL FUND INDUSTRYANALYSIS & RECENT TRENDS”

By: Rishabh Luthra ICFAI Business School Hyderabad 07BS3428
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Kotak Mahindra Asset Management Company Limited

A REPORT ON “MUTUAL FUND INDUSTRYANALYSIS & RECENT TRENDS” By:
Rishabh Luthra ICFAI Business School 07BS3428

A report submitted in partial fulfillment of the requirement of MBA Program Submitted to:
Dr. Vijay Laxmi Faculty Member
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ICFAI Business School, Hyderabad AND Mr. Adheer Awasthi Relationship Executive Kotak Mahindra Asset Management Company Limited

ACKNOWLEDGEMENT
The success behind the completion of any good job is the support and the joint team effort of a number of people. There are many persons, whose help & cooperation, made this project successful. My deepest sense of gratitude, profound respect and sincere thanks to Dr. Vijay Laxmi (Faculty Member-ICFAI Business School, Hyderabad) my project guide, for her valuable assistance, keen interest and constant motivation at each step of my project and for spending her precious time. It would not have been possible for me to reach this stage of the project without her support & guidance. My special thanks to Mr. Adheer Awasthi (Relationship ExecutiveKotak Mahindra Asset Management Co. Ltd.), my company guide who has been there for me throughout this entire project. He always had the answers to my queries, be it regarding any concept related to mutual funds. His warmth support, practical guidance and easy explanations not only regarding the project matters but others too add to the success of my project. His continuous interaction and support made it possible for the successful completion of the project.

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I would also like to thank my parents and my friends for all their time-totime assistance. Last but not the least I would like to thank God because without his divine grace nothing would have been possible.

TABLE OF CONTENTS
Page No. Acknowledgements……………………………………………………... 3 List of Illustrations……………………………………………………... 6 Abstract………………………………………………………………… 7
1.

Introduction a. Purpose…………………………………………………… 8 b. Objective………………………………………………...... 8 c. Proposed Methodology………………………………....... 9 d. Limitations of the Project………………………………… 9

1. About Mutual Funds a. Concept of Mutual Funds………………………………... 10 b. Advantages of Mutual Funds…………………………..... 13 c. Disadvantages of Mutual Funds…………………………. 15 1. Mutual Fund Industry a. Phases of Growth………………………………………… 16 b. Major Mutual Fund Companies………………………......18
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c. d. e.

Players in the Industry…………………………………… 23 Types of Mutual Fund…………………………………… 24 Advertisement of Mutual Funds……………………….... 29

1. Distribution Model a. Multi-Channel Distribution Model……………………… 31 b. Distribution Channels………………………………….... 32 c. Challenges in Distribution……………………………….. 33 d. Curbing Unethical Practices……………………………... 34 e. Spreading Mutual Fund Culture………………………… 35

1. Terms associated with Mutual Funds a. Offer Document………………………………………….. 36 b. Net Asset Value………………………………………….. 39 c. Pricing Of Units………………………………………….. 40 d. Investment Plans…………………………………………. 42 e. Tax Provisions…………………………………………… 44 f. Restriction on Investment……………………………….. 46 g. Asset Allocation Principles……………………………… 48 1. Measuring & Evaluating Mutual Fund Performance a. Measurement of Mutual Fund Performance……………... 56 b. Recent Trends in Mutual Fund Industry…………………..63 i)Impact on Mutual Funds of the Union Budget………… 67 c. Fund Analysis i)Equity Based Fund…………………………………………………. 73 ii) Debt Based Fund………………………………… 76 iii) ELSS Tax Saver………………………………… 79 iv) Monthly Income Plans………………………….. 82
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v) Cash Funds………………………………………. 85
1. 2. 3. 4.

Conclusion……………………………………………………….. 88 Recommendations……………………………………………….. 89 Appendices……………………………………………………….. 91 Reference….……………………………………………………... 116

TABLE OF ILLUSTRATIONS
1. 2. 3. 4. 5. 6. 7. 8. 9.

Working of Mutual Funds……………………………………… 12 Structure of Mutual Funds……………………………………... 24 Mutual Fund Classification…………………………………….. 24 Multi-Channel Distribution Model……………………………… 31 Investor Earning Opportunities…..…………………………….. 37 Expenses charged by AMC………………………………………. 41 Investor in Different Phases…………………………………….. 49 Portfolio Model (By Jacobs)…………………………………….. 50 Wealth Cycle Classification……………………………………… 51 By Nature of Investment………………………………….. 52 b. By Performance……………………………………………. 53 Risk-Return Grid………………………………………………… 54
a.

10.Comparison of Investment Products

1.

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. 57 b. a buoyant domestic economy coupled with a booming stock market has been one of the major drivers of the growth in recent times particularly in the last five-year.565 Crores in Jan 2000 to Rs.98 Crores by April 2008.1.5.. thanks to increased effort by SEBI to improve market surveillance and protect investor’s interests. c. according to the Association of Mutual Funds in India (AMFI). Another significant factor facilitating this growth has been a conducive regulatory regime.601. First and foremost.. 70 a. Sharpe Ratio……………………………………………… 60 Fund Analysis (On the basis of NAV)…………………………. d. Different Funds which are compared…………………………. 59 d. Diagrams showing 1.01. 85 ABSTRACT If size is the measure of dominance. 2. Equity Fund Scheme……………………………………… 73 Debt Fund Scheme……………………………………….67. such as making dividend tax free in the hands of investors have also provided strong impetus to the growth.2. incentives. Bank v/s Mutual Fund…………………………………………… 55 Beta………………………………………………………. With the total Asset Under Management (AUM) increasing from Rs. then the Indian mutual fund industry can now boast on that. 3. R Squared…………………………………………………. 76 ELSS Tax Saver Scheme………………………………… 79 Monthly Income Plans…………………………………… 82 Cash Funds………………………………………………. 7|Page . b. 71 Calculation showing Mutual Fund Performance a. It has indeed come a long way from being a single player. 58 c. Further. single scheme (US-64) industry to having 34 players and more than 480 schemes. What has driven the growth? Numbers of factors have contributed to the surge in the industry’s growth.. 3. e. Treynor Ratio……………………………………………. the industry’s growth has been nothing but exceptional.

its present scenario. load and schemes and also it covers the different phases of growth of mutual fund industry. Cash Funds & ELSS Tax Saver Schemes. In the end mutual fund analysis have been done on the basis of Standard Deviation. To do a comparative analysis of five major Mutual Funds of India namely ➢ Kotak Mutual Fund ➢ HDFC Mutual Fund ➢ UTI Mutual Fund ➢ Reliance Mutual Fund ➢ Prudential ICICI Mutual Fund Objective of the Project 8|Page . R Squared. the different types of mutual funds on the basis of structure. Debt based Funds. It also throws some light on major mutual fund companies in India. factor’s that help in calculating the mutual fund performance. Alpha. Monthly Income Plans. Starting with basic concept of mutual fund and its advantages it would give detail about the growth of mutual fund industry in India. Beta. investment.This research covers various aspect of mutual funds industry in India. the various investment plans. Then it covers the calculation of NAV. INTRODUCTION Purpose of the project This project provides better understanding to the reader by giving insights on Indian Mutual Fund Industry through comparative analysis of different Asset Management Companies and their schemes in India. Treynor Ratio & Sharpe Ratio on various schemes like Equity based Funds.

on the basis of past and present the industry has been analyzed and based on which future outlook has been projected. Curbing Unethical Practices iv. ii. Distribution models. R Squared. iii.Growth trends SECTION II focuses on the distribution Channel used by different AMC in order to sell their schemes. ➢ To understand the risk profile of the customer ➢ To know the awareness of investors about schemes provided by various AMCs Proposed Methodology In broader perspective the whole project can be divided into three sections. ii. Challenges in distribution. Alpha. iii.For every problem there is a research.Size of Industry iv. Spreading Mutual Fund Culture 9|Page . This section also tries to cover i. As all the researches are based on some and my study is also based upon some objective and these are as follows: ➢ To give a holistic and a comprehensive view of mutual fund industry in India ➢ Comparative study of returns given by various AMC Mutual funds on the basis of 6 parameters like Standard Deviation. Treynor Ratio & Sharpe Ratio. Concept of Mutual Funds and its Advantages. This section covers following things: i. Beta.Types of Mutual Funds. Under SECTION I.

10 | P a g e . R Squared. ➢ Reliability of the sources could also be limitation for the project. would like to invest with the common and logical motive of growing money by getting returns on the investments. Limitations ➢ The analysis is completely based on the past performance and not confirms the future performance. The performance of the Mutual Funds is evaluated on the basis of Standard Deviation. Finally on the basis of findings and observation suitable recommendations will be given. ➢ The research is based on secondary data collected from other sources like magazines. i. newspapers and websites etc. One can invest money either where you can get assured returns & hence the risk is low but returns also are low compared to the high risk investments.e. This section covers the following things: i. Recent Trends in the Mutual Fund industry iii. Impact on Mutual Funds of the Union Budget. ii. There are various avenues to park money towards fulfillment of your objective of return on investment. Beta. Alpha.Section III focuses on the different tools used to measure & evaluate the performance of different Mutual Funds. savings. Treynor Ratio & Sharpe Ratio. ABOUT MUTUAL FUNDS CONCEPT Individuals or institutions when have surplus money.

1218.e. The succeeding decade showed a new horizon in Indian mutual fund industry. 470. Punjab National Bank Mutual Fund. the total AUM of the industry was Rs. Hence the concept of mutual fund has evolved to manage the funds i. 11 | P a g e . Kothari Pioneer was the first private sector mutual fund company in India which has now merged with Franklin Templeton. Canbank Mutual Fund.05 bn. The regulations were further given a revised shape in 1996. few other mutual fund companies in India took their position in mutual fund market. Today there are 34 mutual fund companies in India. 67bn assets under management (AUM).The other way is through investing in shares i.04 bn. fund managers will be taking decisions to maximize the investor’s returns. job or business. The concept of mutual funds in India dates back to the year 1963. The private sector funds started penetrating the fund families. Bank of India Mutual Fund. equity market. In the same year the first Mutual Fund Regulations came into existence with reregistering all mutual funds except UTI.e. on behalf of the investor. By the end of 1993. To get good returns one really needs to understand the economy and performance of companies where you are investing money. For a common man it may be cumbersome while managing own profession. Generally the returns on equity investments are higher than debt investment but risk also is higher. the total assets rose up to Rs. Just after ten years with private sector player penetration. Indian Bank Mutual Fund. by the end of its monopoly era. the Unit Trust of India (UTI). The new entries of mutual fund companies in India were SBI Mutual Fund. By the end of the 80s decade. The era between 1963 and 1987 marked the existence of only one mutual fund company in India with Rs.

Diversification reduces the risk because all stocks may not move in the same direction in the same proportion at the same time.A Mutual fund is a common pool of money into which investors place their contributions that are to be invested in accordance with a stated objective. . whether the investor gets funds shares or units is only a matter of legal distinction. he or she buys a part of the assets or the pool of funds that are outstanding at that time. which are specifically permitted by its stated investment objective. which are owned by the investors in the proportion of their investments. Mutual funds normally come out with a number of schemes with different investments objectives which are launched from time to time. It is these assets. In any case. The profits and losses are shared by the investors in proportion to their investments. in which case the purchase makes the investor a part owner of the company and its assets. However. A unit holder in Unit 12 | P a g e . Mutual funds issues units to the investors in accordance with quantum of money invested by them. in the USA. When an investor subscribes to a mutual fund. It is no different from buying “shares” of a joint stock company. A mutual fund is required to be registered with Securities and Exchange Board of India which regulates securities markets before it can collect funds from public. the fund belongs to all investors. A single investor’s ownership of the fund is in the same proportion as the amount of the contribution made by him bears to the total amount of the fund. bonds. The term unit-holder includes the mutual fund account-holder or closed-end fund shareholder. a mutual fund id constituted as a trust an investor subscribes to the “units” issued by the fund. a mutual fund is constituted as an investment company and an investor “buys in to the fund” meaning he buys the shares of the fund. an equity fund would buy mainly equity assets-ordinary shares. Thus. The ownership of the fund is thus joint or “mutual”. A mutual fund uses the money collected from investors to buy those assets. warrants. a bond fund would mainly buy debt instruments. preference shares. etc. In fact. which is where the term Unit Trust comes from. or government securities. a mutual fund shareholder or unit holder is a part owner of the fund’s assets. Investors of Mutual funds are known as Unit Holders. In India. such as debentures. Investments in securities are spread across a wide cross-section of industries and sectors and thus the risk is reduced.

The value of an investor’s part ownership is the determined by the NAV of the number of units held. if the value of our funds assets increased from Rs 1000 to Rs 1200. Example: If the value of a fund’s assets stands at Rs 1000 and it has 10 investors who have bought 10 units each. it is because of the many advantages they have over other forma and avenues of 13 | P a g e . The flow chart below describes broadly the working of a mutual fund: SOURCE: AMFI Advantages of Mutual Funds If mutual funds are emerging as the favorite investment vehicle. depending on the market value of the fund’s assets.Trust of India US-64 scheme is the same as a UTI Master shareholder or an investor in an alliance Each share or unit that an investor holds needs to be assigned a value. causing the NAV also fluctuate. the value of his ownership of the fund will be Rs 30 (1000/100*3). The investment value can go up and down. This is generally called the Net Asset Value (NAV) of one unit or one share. the value of our investors holding of 3 units (1200/100*3) Rs 36. Note that the value of the fund’s investments will keep fluctuating with the market price movements. If a single investor in fact owns 3 units. Since the units held by investor evidence the ownership of the assets. the value of the total assets of the fund when divided by the total number of units issued by the mutual fund gives us the value of one unit. and the value of one unit is Rs 10 (1000/100). the total numbers of units issued are 100. For example.

given the fund's stated investment objectives.investing. It is the Fund Manager's job to (a) find the best securities for the fund.). the investor gets the money back promptly at net asset value related prices from the Mutual Fund. fixed deposits etc. particularly for the investor who has limited resources available in terms of capital and ability to carry out detailed research and market monitoring. In closed-end schemes. real estate. and (b) keep track of investments and changes in market conditions and adjust the mix of the portfolio. money market instruments. as and when required. The following are the major benefits offered by mutual funds to all investors: i) Portfolio Diversification Mutual Funds spread the investment across different securities (stocks. ii) Convenient Administration Investing in a Mutual Fund reduces paperwork and helps you avoid many problems such as bad deliveries. information technology etc. The investment professional has experience in making investment decisions. iii) Professional Management Qualified investment professionals who seek to maximize returns and minimize risk monitor investor's money. textile.) by investing in a number of companies across a broad cross-section of industries and sectors (auto. This kind of a diversification may add to the stability of your returns and reduces the risk with far less money than you can do on your own. bonds. iv) Liquidity In open-end schemes. the units 14 | P a g e . delayed payments and follow up with brokers and companies. 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.

secondly. including income from Units of the Mutual Fund. Units of the schemes are not subject to Wealth-Tax and GiftTax.000 from the Total Income will be admissible in respect of income from investments specified in Section 80L. it offers different types of schemes to investors with different needs and risk appetites. This variety is beneficial in two ways: first. A mutual fund because of its large corpus allows even a small investor to take the benefit of its investment strategy. v) Affordability Investors individually may lack sufficient funds to invest in high-grade stocks. 9. Disadvantages of Mutual Funds 15 | P a g e . it offers an opportunity to an investor to invest sums across a variety of schemes. is unmatched by any other financial instrument. both debt and equity. where the investor himself sees the underlying assets bought with his money. viii) Transparency Open-ended mutual funds disclose their Net Asset Value (NAV) daily and the entire portfolio monthly. vi) Variety Mutual funds offer a tremendous variety of schemes. This level of transparency. vii) Tax Benefits In case of Individuals and Hindu Undivided Families a deduction up to Rs.can be sold on a stock exchange at the prevailing market price or the investor can avail of the facility of direct repurchase at NAV related prices by the Mutual Fund.

However this constraint can be overcome to some extent by offering families of schemes to investor. iii) Managing a Portfolio of Funds Availability of a large number of options from mutual funds can actually mean too much choice for the investor. Fees are usually payable as a percentage of the value of his investments. i) No Tailor-made-Portfolios Investing through funds means. whether the fund value is rising or declining. which he would not incur in direct investment. the investor delegates the decision of investing through which securities to fund manager. 16 | P a g e . The very high-networth individuals or large corporates may find this as a constraint in achieving their objectives. The investor also pays the fund distribution cost.While the benefits of investing through mutual funds far outweigh the disadvantages. He may again need advice on how to select a fund to achieve his objectives. within the same fund. an investor and his advisor will do well to be aware of few shortcomings of using the mutual fund as an investment vehicle. ii) No control over costs Investor pays the investment management fees as long as he remains within the fund.

MUTUAL FUND INDUSTRY The Phases of Growth The Indian mutual industry has come a long way since the inception of UTI in 1963. Bank of India Mutual Fund in June 1990 and Bank of Baroda Mutual Fund in Oct 1992. It remained the only mutual fund player in the country till 1987. holding. The first non mutual fund was the SBI Mutual Fund established in June 1987. ii) Second Phase (1987-1993) – Enter Public sector Mutual Funds Public sector mutual funds set up by public sector banks. management and disposal of securities. the total asset of the industry grew to about Rs. Life insurance Corporation of India (LIC) and the General insurance Corporation of India (GIC) entered in the market in 1987.” In short. which mark its transition from a period when UTI ruled the roost to a period of competition and increased awareness among investors. During this period.67bn. the evolution of the industry can be classified broadly into four phases. UTI started its operation in July 1964 “with a view to encouraging savings and investments and participation in income.According to AMFI. UTI witnessed a slow and steady growth over the 1970s and the 1980s and by the end of 1988 it had an AUM of Rs. followed by Canbank Mutual Fund in December 1987. India Bank Mutual Fund in Nov 1989.500 cr as on March 31. It still continues to be the largest player in the domestic mutual fund industry with an AUM of Rs. 2008. it was set up by Indian government with a view to augment small savings in the country and to channelize these savings to the capital markets. 23. profits and gains accruing to the corporation from acquisition. LIC set up its mutual Fund in Jun e 1989 while GIC established its Mutual Fund in Dec 1990. Punjab National Bank Mutual Fund in August 1989. 610bn 17 | P a g e . i) First Phase (1964-87) – UTI all the way This phase begin with the inception of the Unit Trust of India (UTI).

JP Morgan. 2003 increased to $ 34. The total AUM by the end of Jan 31. The phase also signaled the intensification of competition. Kothari Pioneer Mutual Fund was the first private sector fund to establish in association with the foreign fund. This was done in the wake of the sever payment crisis that UTI suffered on account of its assured return schemes of US-64 that finally resulted in an adverse impact on the India capital markets. offering a wide variety of schemes to investors. 18 | P a g e . of India and the UTI Mutual Fund Ltd. Both domestic and foreign players entered the market. US-64 was the first scheme launched by UTI with a significant equity exposure and the returns of which were not linked to the market.260mn in March 1995 with a CAGR of 6. which is still under the Govt. iii) Third Phase of (1993-2003) – Private players enter the scene This phase marked the entry of private sector funds. the industry has overcome that shock and is hoped to have learnt its lesson. However.92%. iv) Fourth Phase (since Feb 2003)– UTI’s restructuring and beyond In Feb 2003 UTI ACT 1963 was replaced and UTI was bifurcated into two separate entities: Specified undertaking of Unit Trust of India. George Soros and Capital International entering the market.with the total number of schemes increasing to about 167 by the end of 1994. Jardine Fleming.927mn from $23. Private players like Morgan Stanley.

established in Jan 14. iii) Unit Trust of India Mutual Fund UTI Asset Management Company Private Limited. Kotak Mahindra Mutual Fund offers schemes catering to investors with varying risk . and was approved to act as an Asset Management Company for the HDFC Mutual Fund by SEBI vide its letter dated June 30. State Bank of India (SBI). manages the UTI Mutual Fund with the support of UTI Trustee Company Private Limited.99. HDFC Mutual Fund was setup with two sponsors namely Housing Development Finance Corporation Limited and Standard Life Investments Limited. and Life Insurance Corporation of India (LIC). 2003. on December 10. of America. Income Funds.800 investors in its various schemes. Asset Management Funds. UTI Asset Management Company presently manages a corpus of over Rs. It was the first company to launch dedicated gilt scheme investing only in government securities. iv) Prudential ICICI Mutual Fund The mutual fund of ICICI is a joint venture with Prudential Plc.Major Mutual Fund Companies in India: i) Kotak Mahindra Mutual Fund Kotak Mahindra Asset Management Company (KMAMC) is a subsidiary of Kotak Mahindra Bank Limited (KMBL). KMAMC started its operations in December 1998. 1999. Index Funds. ii) HDFC Mutual Fund HDFC Asset Management Company Ltd (AMC) was incorporated under the Companies Act. 2000. Equity Funds and Balance Funds.20000 Crores.return profiles. 19 | P a g e . It is presently having more than 1. The sponsors of UTI Mutual Fund are Bank of Baroda (BOB). Punjab National Bank (PNB). 1956. The schemes of UTI Mutual Fund are Liquid Funds.

20 | P a g e . vii) Birla Sun Life Mutual Fund Birla Sun Life Mutual Fund is the joint venture of Aditya Birla Group and Sun Life Financial. 2004. was incorporated on November 4. 1992.000 crores. Prudential Plc. Sun Life Financial is a global organization evolved in 1871 and is being represented in Canada. The Trustee Company formed is Prudential ICICI Trust Ltd. 1995 as Reliance Capital Mutual Fund which was changed on March 11. the US. Limited is the Trustee. 1882. The AMC. the Philippines. v) Reliance Mutual Fund Reliance Mutual Fund (RMF) was established as trust under Indian Trusts Act. and the AMC is Prudential ICICI Asset Management Company Limited incorporated on 22nd of June. Deutsche Bank AG is the custodian of ABN AMRO Mutual Fund. 2004 with ABN AMRO Trustee (India) Pvt. 1992 under the sponsorship of Bank of Baroda. Ltd. Recently it crossed AUM of Rs. vi) ABN AMRO Mutual Fund ABN AMRO Mutual Fund was setup on April 15. Birla Sun Life Mutual Fund follows a conservative long-term approach to investment. Reliance Mutual Fund was formed for launching of various schemes under which units are issued to the Public with a view to contribute to the capital market and to provide investors the opportunities to make investments in diversified securities.one of the largest life insurance companies in the US of A. Deutsche Bank AG is the custodian. 2003. as the Trustee Company. The sponsor of RMF is Reliance Capital Limited and Reliance Capital Trustee Co. 1993. Japan. 1993 with two sponsors. Indonesia and Bermuda apart from India. Prudential ICICI Mutual Fund was setup on 13th of October. 10. It was registered on June 30. viii) Bank of Baroda Mutual Fund (BOB Mutual Fund) Bank of Baroda Mutual Fund or BOB Mutual Fund was setup on October 30. and ICICI Ltd. BOB Asset Management Company Limited is the AMC of BOB Mutual Fund and was incorporated on November 5. ABN AMRO Asset Management (India) Ltd.

State Bank of India Mutual Fund has more than Rs. xii) State Bank of India Mutual Fund State Bank of India Mutual Fund is the first Bank sponsored Mutual Fund to launch offshore fund. xi) Sahara Mutual Fund Sahara Mutual Fund was set up on July 18.500 Crores as AUM. 1882. approximately. Now it has an investor base of over 8 Lakhs spread over 18 schemes. the India Magnum Fund with a corpus of Rs. 21 | P a g e . 1999 with the same named Trustee Company. Tata Asset Management Limited's is one of the fastest in the country with more than Rs. as the sponsor. Ltd. and Tata Investment Corporation Ltd. 225 cr.. 1996 with Sahara India Financial Corporation Ltd.8 crore.ix) HSBC Mutual Fund HSBC Mutual Fund was setup on May 27. The paid-up capital of the AMC stands at Rs 25. The investment manager is Tata Asset Management Limited and Tata Trustee Company Pvt.703 Crores (on April 30. 1998. was incorporated on April 6. Sahara Asset Management Company Private Limited incorporated on August 31. The sponsors for Tata Mutual Fund are Tata Sons Ltd. 2005). 2002 with HSBC Securities and Capital Markets (India) Private Limited as the sponsor. ING Investment Management Pvt. 5. It is a joint venture of Vysya & ING. Today it is the largest Bank sponsored Mutual Fund in India. They have already launched 35 Schemes out of which 15 have already yielded handsome returns to investors. 1995 works as the AMC of Sahara Mutual Fund. The AMC. Ltd. 7. x) ING Vysya Mutual Fund ING Vysya Mutual Fund was setup on February 11. xiii) Tata Mutual Fund Tata Mutual Fund (TMF) is a Trust under the Indian Trust Act.

2 bn. Open end Sector Equity schemes. 1995 with the name Escorts Asset Management Limited. Open end Income and Liquid schemes. In India it is known as Morgan Stanley Investment Management Private Limited (MSIM India) and its AMC is Morgan Stanley Mutual Fund (MSMF).xiv) Standard Chartered Mutual Fund Standard Chartered Mutual Fund was set up on March 13. Investors can buy or sell the Mutual Fund through their financial advisor or through mail or through their website. Closed end Income schemes and Open end Fund of Funds schemes to offer. Standard Chartered Asset Management Company Pvt. 1996 with Escorts Finance Limited as its sponsor. 2000 sponsored by Standard Chartered Bank. pension funds and non-profit organizations. The Trustee Company is Escorts Investment Trust Limited. 2005). Open end Tax Saving schemes. investment management and credit services. 1999. It provides customized asset management services and products to governments. Its services are also extended to high net worth individuals and retail investors. Open end Hybrid schemes. Ltd. Franklin Templeton Investments is a California (USA) based company with a global AUM of US$ 409. Morgan Stanley Investment Management (MISM) was established in the year 1975. xv) Franklin Templeton India Mutual Fund The group. corporations. The Trustee is Standard Chartered Trustee Company Pvt. 22 | P a g e . Its AMC was incorporated on December 1. xvi) Morgan Stanley Mutual Fund India Morgan Stanley is a worldwide financial services company and its leading in the market in securities. Ltd. xvii) Escorts Mutual Fund Escorts Mutual Fund was setup on April 15. is the AMC which was incorporated with SEBI on December 20. It is one of the largest financial services groups in the world. They have Open end Diversified Equity schemes. (as of April 30.

with the corporate office in Mumbai. The Trustees of LIC Mutual Fund have appointed Jeevan Bima Sahayog Asset Management Company Ltd as the Investment Managers for LIC Mutual Fund. (NIA). viz. (UII) and is constituted as a Trust in accordance with the provisions of the Indian Trusts Act. Ltd (OIC) and United India Insurance Co. xxi) GIC Mutual Fund GIC Mutual Fund. of Delaware (USA) as sponsor. 23 | P a g e . 1882. The Trustee is ACAM Trust Company Pvt.xviii) Alliance Capital Mutual Fund Alliance Capital Mutual Fund was setup on December 30. Ltd. Cholamandalam Trustee Co. 1997. xx) LIC Mutual Fund Life Insurance Corporation of India set up LIC Mutual Fund on 19th June 1989. the Alliance Capital Asset Management India Private Ltd. Ltd. National Insurance Co. 2 Crores towards the corpus of the Fund. 1994 with Alliance Capital Management Corp. . and AMC. a Government of India undertaking and the four Public Sector General Insurance Companies. LIC Mutual Fund was constituted as a Trust in accordance with the provisions of the Indian Trust Act. The New India Assurance Co. Ltd. Ltd. The Company started its business on 29th April 1994. was setup on January 3. sponsored by General Insurance Corporation of India (GIC). is the Trustee Company and AMC is Cholamandalam AMC Limited. Ltd (NIC). xix) Chola Mutual Fund Chola Mutual Fund under the sponsorship of Cholamandalam Investment & Finance Company Ltd. 1882. It contributed Rs. The Oriental Insurance Co.

SEBI has laid down the rules and regulations regarding the obligations of the entities involves in a mutual fund. investments and valuation. Asset Management Company (AMC) Its role is highly significant in the mutual funds operation. conduct and operations of mutual funds.banking finance companies and foreign institutional investors. Intermediaries 24 | P a g e . private sector companies.The Players in the Mutual Fund Industry The players in the Indian Mutual Funds Industry are similar to some extent to the players in other financial services industry. its establishment and launch of different schemes. they invest the investors money in various securities after proper research and analysis. financial institutions.e. They are the fund managers i. They also look after the administrative functions of a mutual fund for which they charge management fee. The players are as follows: SEBI The Securities Exchange Board of India (SEBI) is the regulatory authority for all the mutual funds sponsored by the public/private sector banks. non. financial reporting.

brokers. The intermediaries include brokers. Types of Mutual Funds There are many types of mutual funds available to the investor. investor grievance. HUF. sub. and investment houses. The mutual fund investor mainly includes individual.They act as a link between the mutual fund companies and the investors. The other intermediary. Investors Investors subscribe to the units issued by the mutual funds in the hope of getting a return commensurate with the risk involved. Structure of a Mutual Fund 25 | P a g e . etc. corporate and trusts.registrar and transfer agents perform activities. 2000. SEBI protects the interest of the investors through the guidelines laid down under SEBI (Disclosure and Investor Protection) Guidelines. The registrar also performs other activities such as dividend payment. which are associated with maintaining records concerning units already issued or to be issued by the company. However. these different types of funds can be grouped into certain classifications for better understanding.

Investors can conveniently buy and sell units at Net Asset Value (NAV) related prices. the unit 26 | P a g e .SOURCE: http://amfiindia. Hence.com Mutual Fund Classification SOURCE: http://amfiindia.com ➢ By Structure i) Open-ended Funds An open-end fund is one that is available for subscription all through the year. These do not have a fixed maturity.

In order to provide an exit route to the investors. Such schemes thus offer very high liquidity to investors and are becoming increasingly popular in India. Closed-ended schemes are usually more illiquid as compared to open-ended schemes and hence trade at a discount to the NAV. some close-ended funds give an option of selling back the units to the Mutual Fund through periodic repurchase at NAV related prices. ii) Closed-ended Funds A closed-end fund has a stipulated maturity period which generally ranging from 3 to 15 years. an open-ended fund rarely denies to its investor the facility to redeem existing units. The fund is open for subscription only during a specified period. and may stop issuing further subscription to new investors. 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. Please note that an open-ended fund is NOT obliged to keep selling/issuing new units at all times. This discount tends towards the NAV closer to the maturity date of the scheme. ➢ By Investment Objective i) Growth Funds The aim of growth funds is to provide capital appreciation over the medium to long. Such schemes normally invest a majority of their corpus in 27 | P a g e . SEBI Regulations stipulate that at least one of the two exit routes is provided to the investor. They may be traded on the stock exchange or may be open for sale or redemption during pre-determined intervals at NAV based prices. On the other hand. iii) Interval Funds Interval funds combine the features of open-ended and close-ended schemes.term.capital of the schemes keeps changing each day.

or fall equally when the market falls. preservation of capital and moderate income. These are ideal for Corporate and individual investors as a means to park their surplus funds for short periods. ii) Income Funds The aim of income funds is to provide regular and steady income to investors. Such schemes generally invest in fixed income securities such as bonds. certificates of deposit. iv) Money Market Funds The aim of money market funds is to provide easy liquidity. Growth schemes are ideal for investors having a long-term outlook seeking growth over a period of time. commercial paper and inter-bank call money. In a rising stock market. the NAV of these schemes may not normally keep pace. 28 | P a g e . Income Funds are ideal for capital stability and regular income. These are ideal for investors looking for a combination of income and moderate growth. iii) Balanced Funds The aim of balanced funds is to provide both growth and regular income. have outperformed most other kind of investments held over the long term. corporate debentures and Government securities. Such schemes periodically distribute a part of their earning and invest both in equities and fixed income securities in the proportion indicated in their offer documents. v) Gilt Fund These funds invest exclusively in government securities. It has been proven that returns from stocks. These schemes generally invest in safer shortterm instruments such as treasury bills. NAVs of these schemes also fluctuate due to change in interest rates and economic factors as is the case with income or debt oriented schemes. Returns on these schemes may fluctuate depending upon the interest rates prevailing in the market. Government securities have no default risk.equities.

These schemes invest in the securities in the same weight age comprising of an index.vi) Index Funds Index Funds replicate the portfolio of a particular index such as the BSE sensitive index. ➢ Other Schemes i) Tax Saving Schemes These schemes offer tax rebates to the investors under specific provisions of the Indian Income Tax laws as the Government offers tax incentives for investment in specified avenues. ➢ On the basis of Load i) Load Funds A Load Fund is one that charges a commission for entry or exit. That is. each time you buy or sell units in the fund. NAV’s of such schemes would rise or fall in accordance with the rise or fall in the index. Typically entry and exit loads range from 1% to 2%. S&P NSE 50 index(Nifty). The Act also provides opportunities to investors to save capital gains u/s 54EA and 54EB by investing in Mutual 29 | P a g e . The advantage of a no load fund is that the entire corpus is put to work. There are also exchange traded index funds launched by the mutual funds which are traded on the stock exchanges. no commission is payable on purchase or sale of units in the fund. That is. if the fund has a good performance history. 1961. Necessary disclosure in this regard is made in the offer document of the mutual fund scheme. a commission will be payable. ii) No-Load Funds A No-Load Fund is one that does not charge a commission for entry or exit. though not exactly by the same percentage due to some factors known as “Tracking Error” in technical terms. Investments made in Equity Linked Savings Schemes (ELSS) and Pension Schemes are allowed as deduction u/s 88 of the Income Tax Act. It could be worth paying the load.

Fast Moving Consumers goods (FMCG). 2000. ii) Industry Specific Schemes Industry Specific Schemes invest only in the industries specified in the offer document. software. In these funds or schemes the investor invests in the securities of only those sectors or industries which are specified in the offer documents. FMCG. iii) Sectoral Schemes Sectoral Funds are those. etc. Pharmaceuticals. While these funds may give higher returns. provided the capital asset has been sold prior to April 1. Advertisements of Mutual Funds ➢ Advertisements through Hoardings/Posters 30 | P a g e . E. 2000 and the amount is invested before September 30. and Pharmaceuticals etc. petroleum stocks. The investment of these funds is limited to specific industries like InfoTech. They may seek an advice of an expert. they are more risky compared to the diversified funds.Funds. the return on these funds is dependent on the performance of the respective sector/industries. which invest exclusively in a specified industry or a group of industries or various segments such as 'A' Group shares or initial public offerings. Investors need to keep a watch on the performance of these sectors and must exit at an appropriate time.g.

read the offer document carefully before investing” The above statement shall be displayed in black letters of at least 8 inches height or covering 10% of the display area on white blackboard. etc. Considering that the investors get very little time to read the advertisements through hoardings/posters.It is essential for the investors to read the Offer Documents & Risk Factors before investing in the mutual funds scheme to take well informed investment decisions. during the same time periods. while passing by. it is clarified that such advertisements may carry only the following statement apart from copy of advertisement: “Mutual Fund investments are subject to market risks. etc. a statement “Mutual Fund investments are subject to market risks. ➢ Advertisements through Audio-Visual Media Advertisements through audio-visual media like television. The compliance officers shall ensure that he statement appearing in such advertisements are in legible font. in a clearly legible fontsize covering at least 80% of the total screen space and accompanied by a voice-over reiteration. ➢ Performance Advertisements • Disclosure of Benchmarks in Advertisements: All performance advertisements disclosing return statistics shall mention the returns on the benchmark indices. The remaining 20% space can be used for the name of the mutual fund or logo or name of scheme. read the offer document carefully before investing” shall be displayed on the screen for at least 2 seconds. • Performance of Money Market Schemes: The investors in cash/liquid/money market schemes have short investment horizon therefore the mutual funds while advertising simple annualized returns of such schemes based on a period of 30 days can also advertise simple annualize returns based on 15 days period. 31 | P a g e .

the mutual funds shall disclose in the offer document as well as in the advertisements that the investors are bearing the recurring expenses of the scheme in addition to the expenses of other schemes in which Fund of Fund’s scheme makes investment. in the main body of the advertisement. it shall be disclosed that after the payment of dividend. this should also be disclosed. the NAV will fall to the extent of the payout and distribution taxes (if applicable). 32 | P a g e . if distribution taxes are excluded while calculating the returns.• • Impact of Distribution Taxes: While advertising returns by assuming reinvestment of dividends. Pay-out of Dividends: While advertising pay-out dividends. ➢ Fund of Fund’s Advertisement In case of Fund of Fund’s scheme.

Distribution Model AMC IFAs Banks Direct Sales Brokers Tied Agency Internet Institutional Brokers Large Corporate Corporate HNW Customer Retail Customer Customer Segments 33 | P a g e .

Increasing commoditization and growing needs of the customers are forcing players to shift to solution based models from production based ones. providing advisory services and customizing need-based solution Relationship plays a vital role while selling mutual fund products. BAJAJ Capital. the role of distribution channel remains critical as it helps stave off competition by maintaining relationships. In addition mutual fund AMCs are also using banks and Non –Banking Financial AMCs (NBFC) as distribution channels to leverage their reach and huge client base.Multi . So they take shelter in third-party distribution AMCs like KARVY. To control increasing operational costs. However mutual fund players have to bear splurging marketing expenses to push their product against others. product innovation or development has become a necessity for mutual fund players to stay ahead. However it is difficult for AMCs to manage and monitor large agent force. Agents advise the customer on the kind of product that caters to the needs of the client. which comprises of a brokers. These AMCs in turn.Channel Distribution Distribution Channels In highly competitive environment. AMCs are opting for the service s of large distributors to sell their products by leveraging their value chain. An agent is essential channel between investors and mutual fund products. In either model. sub brokers and agents. To unload their work. appoint their agents to sell the MF to AMCs products. the companies bear a huge market expense in the form of higher commission to lure investors. UTI is distributing its offerings through 34 | P a g e . and Integrated Enterprises etc.

The post office is also used as a channel of Distribution by mutual funds AMCs. Corporation Bank. the post office plays a vital role because its offices are distributed through the country. As most of the investors are still not aware how it functions. delay 35 | P a g e .Leveraging Expert (SMILE). given the fact that the post office has the largest network then many other institution or bank in the country. besides. The contribution of direct marketing to the total sales is miniscule. restrict its use on large scale.selected branches of Indian Bank. they are also appointing sales personnel to meet investors. They sometime feel that it is a costly affair. Mutual fund industry is also using the internet to distribute their products because of the cost advantages and increased communication. According to the Securities Market Infrastructure. Educating investors about the advantages of investing in mutual fund s compared to risk-free savings instrument is a big task for the industry. the transaction cost of establishing contact centers. the fact is that internet has its limits in providing customized advice to individuals. As far as retail penetration is concerned. educate them and sell their products. assured return ➢ Delay (in Liquidity) ➢ Tardy inter-city payment system ➢ Transaction cost of establishing contact centers It has been a big challenge for the Mutual Fund Industry. Challenges in Distribution ➢ Lack of awareness ➢ Risk aversion ➢ Extensive availability of the central govt. but the cost burden is huge. However. Bank of India an Allahabad Bank.

However. where it can be 3-5 days or more. Allotment of units Net Asset Value (NAVs) is done before realization of funds. is a making the process fast and reducing delay in fund transfer across cities. A major reason for this is high cost of developing retail infrastructure. There is also a regulatory entanglement in fund realization. namely high net worth investors and persuade them to over invest. assured return on small products are restricting the competition as well as penetration of wide variety of mutual fund products. the client’s concern and his needs 36 | P a g e . As of now.Time Gross settlement System (RTGS). except in liquid and money market schemes. particularly in the smaller towns where investors are not willing to take risk. mutual fund investments are confined to the metros. So.in fund transfer and tardy inter-city payment system are the major impediments. So enhancing the reach through the existing distribution model will require more investments. tier 1 and 2 cities (about 50 cities). technological advancements of remittance instruments such as Electronic clearing Services (ECS). AMCs are wooing the distributors by offering more commission to push their products. scaling up the operation by increasing investment in other cities doesn’t seem feasible. In the hope of getting more incentives. This poses a great challenge for the industry to realize its potential. Such hassle could prevent investors from investing in mutual funds. Electronic Funds Transfer (FT) and Real. Curbing unethical practices The industry faces challenge to control certain practices. these problems are being resolved with appointment of registrars to meet the time-lines of recording the transactions. The extensive availability of the central govt. distributors may opt for unfair practices like false projections to sell unsuitable products. However. In addition. Such delay is quite pervasive in smaller towns. motivate the investors to shift from one fund to another.

To achieve its growth. Such regulations are required to be more effective to stop such unethical practices. should properly regulate and monitor the regulation so that a favorable climate can be created. The govt. 37 | P a g e . So there is a need to focus on rural penetration for future growth. service and innovation to realize its potential. making it penetration of 6. Spreading the Mutual Fund Culture Though the Indian Mutual Fund industry has a huge potential.5% for equity and 2. To curb such unethical practices. Regulations should be tightened to curb unethical practices. flexibility. The industry should focus on product innovation and maintain transparency. According to Chairman of AMFI there are about 180 million households in India. educating the customer about the mutual funds as a saving vehicle will be critical. industry will have to focus on its reach in the retail segment.7% in the urban areas 13.8 millions invest in mutual funds.8%. the Association of Mutual Funds in India (AMFI) has prescribed that agents/distributors must have AMFI certification. More efforts are required from the regulators and the industry to manage the wealth of individuals to further propel the growth of the industry by popularizing the use of mutual funds. it is yet to be realized.should be pf prime importance while selling. They should also develop a comprehensive risk management system so that it can induce more investment. And to control the huge market expenses the authority has prescribed that the commission rates also shouldn’t be more than mutual fund’s expense limit of 2. To realize its growth potential.7% of the households invest in mutual funds.25 % for debt. of which just 11. in rural areas this percentage is just 3.

until amended. 38 | P a g e . But. SEBI requires the offer document of the open-end fund to be revised every two years. as the units are normally not re-purchasable for investors. Offer Document issued by mutual funds serve the same purpose of inviting investors and giving them the information about the new fund offer. The offer document of the closed-end fund is issued only once at the time of issue. the open-end fund could issue and repurchase units on an ongoing basis. they are required to formulate the details of the schemes and register it with SEBI before announcing the scheme and inviting the investors to subscribe to the fund. This means that the offer document of the open-end funds is valid for all the time.Offer Document When an AMC or a Fund Sponsor wishes to launch a new mutual fund scheme. though it will be first issued at the time of launch of the scheme. Launch of a new mutual fund scheme is called a New Fund Offer (NFO). Options Offered to Investors: ➢ Dividend Option: The investor can choose to receive a part of the profits of the mutual fund at some intervals before their redemption. The document containing the details of the new fund offer that the AMC or the Sponsor prepares and circulates to the prospective investors is called the Offer Document.

Investor Earning Opportunities: Dividend Payout Dividend Change in NAV Yes Yes Dividend Reinvestment Yes Yes Growth Option No Yes Lock-in Period Options: Mutual funds usually do not have lock-in periods.This option is Dividend Option. Investors who choose dividend option can again have 2 sub options: • Dividend Payout Option: Investors who choose the dividend payout option on their investments will receive dividends as and when such dividends are declared by the scheme. at a NAV that is prevalent immediately after the declaration of dividend or the NAV at the time of re-investment. they would sell a part of their units. • Dividend Re-investment Option: Investors who opt for the dividend reinvestment option do not take the amount of dividend out of the scheme. This is Growth Option. ➢ Growth Option: The investors who do not want to receive any part of profits of the mutual fund before its redemption. They re-invest the dividends that are declared by the mutual funds back into the mutual funds itself. Dividends are paid out to the investors in the form of warrants or are directly credited to the investor’s bank account. Whenever they need to get some money or profits back. 39 | P a g e . This NAV is known as ex-div NAV. during which investors cannot exit the fund. Rather they want to retain the profits made in the pool and want their returns to grow by being compounded. Mutual funds may create products with lock-in periods.

In respect of valid applications received after 3 p. same day’s closing NAV shall be applicable. by the Mutual Fund. ➢ Some specific funds scheme can be designed to have a minimum period of investment.Repurchase information can be found in the offer document.m. mutual funds can. the investor is required to stay invested for a period of 3 years. with notice to the investors through a national daily. Example: Investments in special “Equity Linked Savings Scheme” are eligible for tax rebates.m. In respect of valid applications received after 3 p. In extra-ordinary situations. In order to enjoy the tax rebate. impose temporary lock-in periods. Investors have to check the offer document to see if the mutual fund has sought such a right for itself. the closing NAV of the next business day shall be applicable.m. by the Mutual Fund. There are 2 normal situations when investors are restricted from exiting the fund: ➢ An open-ended fund may announce an initial offer period. during which time it will only sell units. by the Mutual Fund. the closing NAV of the next business day shall be applicable. same day’s closing NAV shall be applicable. • Redemption: In respect of valid applications received upto 3 p. There may be no repurchase during that period. ➢ Liquid funds • Purchases: 40 | P a g e .m. Regulations regarding Cutoff Timings: ➢ All funds except liquid funds • Purchases: In respect of valid applications received upto 3 p. by the Mutual Fund. The fund will announce a date from which further sales and repurchases will take place.

m. the day on which NAV is calculated by a fund is known as the Valuation Date. in respect of any application received after 1 p. In respect of valid applications received after 10:00 a. However. Net Asset Value Net Asset Value (NAV) represents a fund's per share market value. NAV: Net Assets of the Scheme/ Number of Units Outstanding Or (Market Value of Investment + Receivables + Other Accrued Income + Other Assets – Accrued Expenses – Other Payables – Other Liabilities) / Number of Units Outstanding on the Valuation Date For the purpose of NAV calculation. less any liabilities. NAV of all schemes must be calculated and published at least every Wednesday for Closed-end schemes and daily for Open-end schemes. It is derived by dividing the total value of all the cash and securities in a fund's portfolio. previous day’s closing NAV shall be applicable.m.m. closing NAV of the day immediately before the day on which funds are available for utilization by the fund shall be applicable. This is the price at which investors buy (bid price) fund shares from a fund company and sell them (redemption price) to a fund company. same day’s NAV shall be applicable. by the Mutual Fund and the funds are available for utilization by the fund on the same day. by the number of shares outstanding. closing NAV of the same day shall be applied.by the Mutual Fund. An NAV computation is undertaken once at the end of each trading day based on the closing market prices of the portfolio's securities. The day’s NAV must be 41 | P a g e .In respect of valid applications. by the Mutual Fund. • Redemption In respect of valid applications received upto 10:00 a.

the fund may not repurchase the investor’s units at the same price as NAV. SEBI requires that fund must ensure that repurchase price is not lower than 93% of NAV (95% in the case of a closed-end fund). The fund’s NAV is affected by these 4 factors: • Purchase & Sale of investment securities • Valuation of all investment securities held • Other assets & liabilities • Units sold or redeemed Pricing Of Units Although NAV per unit defines the fair value of the investor’s holding in the fund. Also. The Sale price is NAV + Entry Load and the Repurchase price is NAV – Exit Load. This applies to both Open-end & Closed-end schemes. the difference between the repurchase price and the sale price of the unit is not permitted to exceed 7% of the sale price.m. the fund may sell new units at a price that is different from the NAV. that day. There can be entry or exit loads. Sale Price: Applicable NAV * (1 + Entry Load) Repurchase Price: Applicable NAV * (1 – Exit Load) Fees & Expenses: An AMC may charge the scheme with Investment Management & Advisory Fees that are fully disclosed in the offer document subject to the following limits: 42 | P a g e .posted on AMFI website by 8:00 p. but the sale price cannot be higher than 107% of NAV. On the other side.

300 Crores of daily or average weekly net assets On the balance of daily or average weekly net assets 2.25% 2. ➢ Initial Issue Expenses of launching schemes (not to exceed 6% of initial resources raised under the scheme) Total Expenses: Total Expenses charged by the AMC to a scheme.➢ ➢ 1.5% 2. the AMC may charge an additional management fee up to 1% of weekly average net assets outstanding in the accounting year.5% 43 | P a g e .300 Crores of daily or average weekly net assets On the balance of daily or average weekly net assets 2.100 Crores of weekly average net assets outstanding in the accounting year.100 Crores of daily or average weekly net assets On the next Rs.75% For Bond Funds: On the first Rs.300 Crores of daily or average weekly net assets On the next Rs.25% of the first Rs.25% 2.0% 1.0% 1. are subject to the following limits: On the first Rs.75% 1. For no load schemes.100 Crores of daily or average weekly net assets On the next Rs.300 Crores of daily or average weekly net assets On the next Rs. excluding issue or redemption expenses but including investment management & advisory fees.100 Crores. Initial Issue Expenses ➢ Initial Issue Expenses will be permitted for Closed Ended Scheme only and such scheme will not charge entry load. and @ 1% of weekly average net assets in excess of Rs.

making transfers to different schemes within the same fund family. Systematic Investment Plan (SIP): 44 | P a g e • . the investment plan offered by a fund allows the investors freedom with respect to investing one time or at regular intervals. Also.Investment Plans The term “investment plans” generally refers to the portfolio flexibility that the funds to investors offering different ways to invest or reinvest. These are some of the investment plans offered by mutual funds in India: • Automatic Reinvestment Plans (ARP): Many funds offer 2 options under the same scheme.the Dividend Option & the Growth Option. because they determine the level of flexibility available to the investor. The ARP allows the investor to reinvest the amount of dividends or other distributions made by the fund in the same fund & receive additional units. or receiving income at specified intervals or accumulating distributions. The different investment plans are an important consideration in the investment decision. instead of receiving them in cash.

The investor is usually required to maintain a minimum balance in his fund account under this plan. and as investment in units of the scheme into which the transfer is made. A modified version of SIP is the Voluntary Accumulation Plan (VAP) that allows the investor flexibility with respect to the amount and frequency of investment. Systematic Transfer Plan (STP): These plans allow the investor to transfer on a periodic basis a specified amount from one scheme to another with the same fund family. thereby providing the same benefit as regular income. A transfer will be treated as redemption of units from the scheme from which the transfer is made.meaning two schemes managed by the same AMC and belonging to the same mutual fund. The investor must withdraw a specific minimum amount with the facility to have withdrawal amounts sent to his residence by a cheque or credited directly into the bank account. thereby letting the investor save in a disciplined and phased manner. The amount withdrawn is treated as redemption of units at the applicable NAV as specified in the offer document. • Systematic Withdrawal Plan (SWP): Such plans allows the investor to make systematic withdrawals from his fund investment account on a periodic basis. • 45 | P a g e . The investor is usually required to maintain a minimum balance in his fund account under this plan for which the transfer is made. Such redemption or investment will be at the applicable NAV for the respective schemes as specified in the offer document.These require the investor to invest a fixed sum periodically. The mode of investment could be though direct debit to the investor’s salary or bank account.

2%) will be the tax in the hands of the fund. income distributed to unit-holders by a closed-end or debt fund is liable to a dividend distribution tax at a rate stipulated by the Government. ➢ Dividend Distribution Tax is payable by the fund on its distributions and out of its income.100. the investor pays indirectly since the fund’s NAV and the value his investment will come down by the amount of tax paid by the fund.100. 1996 is fully exempt from tax under section 10 (23D) of the IT act. While the investor will get Rs. ➢ However.20 (Tax Rate 10. Rs. the fund will have Rs. The 46 | P a g e .10.10.Tax Provisions ➢ Income earned by any mutual fund registered with SEBI (Mutual Fund) Regulation.20 less to invest. This tax is not applicable to distributions made by open-end-equity-oriented funds (funds with more than 50% of their portfolio in Equity). Example: If a closed-end or a debt fund declares a dividend distribution of Rs.

this is an adequate approximation. Since Sharpe Ratio is a measure of risk-adjusted returns. Important Points: ➢ Don't just look at the NAV. then there will be greater fluctuations in NAV. a low Standard Deviation is good. This ratio looks at both. Generally. and delivers a single measure that is proportional to the risk adjusted returns. ➢ Standard Deviation Standard Deviation is a measure of how much the actual performance of a fund over a period of time deviates from the average performance.What is risk? Risk can be defined as the potential for harm. what is actually being talked about is volatility. past volatility is taken as an indicator of future risk and for the task of evaluating a mutual fund. returns and risk. How risk is measured? There are 2 ways in which you can determine how risky a fund is. Volatility is nothing but the fluctuation of the Net Asset Value (price of a unit of a fund). If there is high volatility. ➢ Sharpe Ratio The Sharpe Ratio of a fund measures whether the returns that a fund delivered were commensurate with the kind of volatility it exhibited. Since Standard Deviation is a measure of risk. But when anyone analyzing mutual funds uses this term. also look at the risks-returns 47 | P a g e . a high Sharpe Ratio is good.

don’t just look at the NAV also consider the risks-returns of the fund. the fund with the 3-star rating has a higher NAV (109. ICICI Prudential Liquid Fund has a 4-star rating while ICICI Prudential Growth Fund has a 3-star rating. 48 | P a g e . HDFC Top 200.47 while UTI Infrastructure has an NAV of 36.60 This does not necessarily mean that HDFC Top 200 is offering a higher risk since the return is higher.22 & NAV of Kotak Opportunities is 40. while Kotak Opportunities took an average risk to get the high returns.Kotak 30 has 3 stars & Kotak Opportunities has 4 stars. However. Kotak 30 took a below average risk and delivered an above average return. In fact. the NAV of Kotak 30 is 90.73). That does not mean that their NAV is approximately the same. according to the ratings.48 However. All it means is that you will get a good return without putting your money at too much risk. So. ➢ Higher rating does not mean better returns A fund with more stars does not indicate a higher return when compared with the rest. ➢ Higher rating does not mean more risk HDFC Top 200 has an NAV of 140. In fact. fund houses go for schemes that invest in stocks of mining companies. a 5-star fund has an average risk. Recent Trends in the Mutual Fund Industry ➢ Funds betting on Natural Resources • Since Indian regulations do not permit mutual funds to invest directly in commodities. a 5-star fund has a low risk while UTI Infrastructure.08) than the one with the 4star rating (11.

This helps mitigate any risk arising from volatility or improve the fund’s returns in a boom. shopping malls. Tata AMC and HSBC MF. • STP is definitely going to gain ground as aspirations. Investors need to be adequately informed about it. There are two funds from ING and one each from Mirae Asset Management. However. possibilities and opportunities increase among the youth. mobile content 49 | P a g e . ➢ Mutual Fund industry to tap Entertainment space • To cash the bullish growth of the entertainment & media industry in the country financial institutions are rolling out a slew of mutual funds focusing on these spaces. JP Morgan AMC launched Optimiser Systematic transfer plan. are set to hit the market. STP is yet to be promoted in India to its full extent. STP offers an investor the security of a liquid fund while trying to enhance returns by investing a part of the funds in equity. weekly. as per documents filed with the stock market regulator SEBI. wherein investors can invest a lump sum in JP Morgan India Liquid Fund or JP Morgan India Liquid Plus Fund through STP.• At least five funds. fund managers feel. ➢ Systematic Transfer Plans lower Volatility Risk • Systematic Transfer Plan (STP) helps in reaching the financial goals by investing a fixed sum in the chosen fund for a pre-determined number of installments. an investor can match his risk appetite with that of the equity scheme. keen on investing in natural resources. Thus. • Most fund houses are already offering this STP facility to investors. • Many of the funds will cover a wide range of areas within the entertainment arena such as retail. monthly or quarterly) from this fund to any of the existing equity schemes managed by JP Morgan Mutual Fund. An amount predetermined by the investor would be transferred periodically (daily. In the first week of May.

while fund houses with lower corpus can only attract investors by showing good performance. but firms with a strong brand presence definitely has a competitive advantage. Brand-building exercises are mostly taken up by foreign players and big industrial houses which have deep pockets.40 Crores. lifestyle beyond the conventional media like television.providers. film. BlackstoneEenadu and Adlabs-ADAG (Anil Dhirubhai Ambani Group). Reliance Mutual Fund has topped the chart with an AAUM of Rs 96. • Fund mobilisation trend in mutual funds space suggests that brand play an important role in helping fund houses attract investors initially although in the long term it boils down to the performance of the schemes. Walt Disney. • Global media giants like Viacom. to 50 | P a g e ➢ • . Compared to the last month.98 Crores. • Country's MF industry holds immense potential for the existing as well as the new players entering or those envisaging an entry into the space. ➢ • • Mutual Fund Industry’s AUM advances by 7.33% to Rs.386. BBC. Reliance MF offers life insurance cover through SIP investment Reliance MF has introduced a scheme to encourage investors to save and invest regularly through Systematic Investment Plan (SIP). The industry has already witnessed deals such as Walt Disney-UTV.33% in April The asset base of the industry has grown by 7. 567601. April has been great for the mutual fund industry as 28 AMCs out of 34 posted positive growth in their AAUM. ICICI Prudential MF and UTI MF continue to be at the second and third position respectively. ➢ Brand name works for Mutual Funds • A brand image is very important for mutual funds and investors base their decisions on known and dependable brands. print advertising and multiplex. J C Decaux and Astro are already in the country or looking at it.

including Rs 34000 Crores in equity schemes and Rs 66800 Crores in debt funds.000 and in multiples of Rs 1. 2008.• ensure that investors achieve their financial objective even in the unfortunate event of death before completing the SIP tenure as the balance amount towards the SIP installments remaining unpaid shall be made good from the life insurance cover. The company has 51 | P a g e . Kotak Mahindra Mutual Fund launches Sensex ETF • Kotak Mahindra Asset Management Company has announced the launch of an exchange traded fund which will focus on the stocks that comprise the BSE SENSEX. The units will be listed on BSE to provide liquidity through secondary market. ➢ ➢ • • Reliance Mutual Fund achieves a milestone Reliance Mutual Fund.000. The minimum investment amount during the New Fund Offer is Rs 10. the total Assets Under Management (AUM) of the fund was Rs 100812 Crores. On April 30. ➢ ICICI Prudential AMC Step towards Transparency • ICICI Prudential AMC has taken a pioneering step towards transparency and investors right to information. owned by Anil Ambani controlled Reliance Capital. 2008 till May 16. has achieved the coveted milestone by notching up Rs 1 trillion of assets under its management this April. The cost of life insurance premium will be borne by the AMC. • Kotak Mahindra Asset Management Company has announced the launch of an exchange traded fund which will focus on the stocks that comprise the BSE SENSEX. The nominee would be able to continue investing in the scheme without having to make any further contribution. Each unit of the Kotak Sensex ETF will be approximately equal to 1/100th of the value of BSE SENSEX. Reliance Mutual Fund is the first mutual fund in India to cross this mark. • The fund is open for subscription from May 07.

150.NIL 52 | P a g e . underlying asset class. • The fact sheet will provide details of obligators.disclosed the complete details on the securitizations and pass through certificates across all its fixed income funds on a consolidated basis in its April’ 08 Fact sheet. Impact on Mutual Fund Industry of the Union Budget ➢ Easing in Income Tax slabs • Threshold limit of Income Tax exemption for individuals rose as follows Up to Rs. rating etc on a consolidated basis across the entire fixed income portfolio which will play a key role in aiding investors gain complete insight of their investment and evaluate the credit quality of their portfolio.000 .

000 .300. • At the same time since the short term capital gains tax is still lower than the income tax slabs of typical capital market investors.500.001 to Rs. it is not expected to cause too many investors to turn away from mutual funds. ➢ Incentives for equities should be continued and the status quo on long-term capital gain tax and STT should be maintained. ➢ Section 80 C deduction for tax saving should be raised from the current limit of Rs 1 lakh and Equity Linked Saving Schemes from mutual funds should be given the benefit of the same.150.001 and above .10% Rs.300.30% Impact • This is expected to increase the disposable income in the hands of the individuals to some extent which could translate into increased retail investments in mutual funds.500.000 .20% Rs. ➢ Increase in Short Term Capital Gain Tax • Short Term Capital Gains Tax rose from 10% to 15% Impact • Since long term capital gains tax has been left unchanged.Rs. ➢ Know your Customer (KYC) Compliance for Mutual Funds 53 | P a g e . this hike in short term capital gains tax could encourage long-term investments which augur well to the development of the concept of “long term” in the Indian Mutual Fund industry. which is conspicuous by its absence but which is coveted by the fund industry given the greater flexibility that this provides in fund’s management.001 to Rs.

all applicants will now have to submit their PAN card copy (which serves as Proof of Identity (PoI)) and Proof of Address (PoA) only once to the designated Point of Service (PoS) centers spread across the country. ➢ Service Taxes realigned for ULIP’s • Asset management services provided under Unit Linked Insurance Plans (ULIPs) would be brought on par with asset management 54 | P a g e .• KYC is an acronym for “Know your Client”. SEBI has prescribed certain requirements relating to KYC norms for Financial Institutions and Financial Intermediaries including Mutual Funds to ‘know’ their clients. the PoS issues KYC acknowledgement letter that needs to be submitted along with the mutual fund investments. In this regard. ➢ Norms for dedicated infrastructure funds should be finalized regarding which announcement was made in last Union Budget. has made it mandatory for all Mutual Funds to comply with the ‘Know Your Client’ (KYC) norms of the applicants desirous of subscribing to their ‘units’. • As a result. Applicant must be KYC compliant while investing with any SEBI registered Mutual Fund. it has been mandated to create the necessary infrastructure in order to handle the KYC on behalf of the Mutual Fund Industry. a term commonly used for Client Identification Process. ➢ Dividend distribution taxes on Money Market Mutual Funds which was increased last year should be brought back to earlier levels. • The provisions of The Prevention of Money Laundering Act. 2002 (PMLA). After confirming the credentials of the investor. This would be in the form of verification of identity and address. financial status. ➢ Existing open-ended equity schemes of mutual fund industry should be included for the purpose of tax savings wherein a lock-in period of three years can be introduced in separate plan of same schemes. occupation and such other personal information.

64 45.31 44.G.R. Impact • The competitiveness of mutual funds vis-à-vis ULIPs in the investment basket of investors is expected to increase somewhat. FUND ANALYSIS (On the basis of NAV) Fund DSPML T. • Services provided by stock/commodity exchanges and clearing houses would also be brought under the service tax net.E. • Transactional expense levels of mutual funds are expected to go up marginally on account of their exposure to stock and commodity exchange which are expected to pass on the service tax.80 55 | P a g e .I. Reg Tata Infrastructure Magnum Contra Category Equity: Diversified Equity: Diversified Equity: Diversified Rating 3 Year Return 45. But clarity on what would define services here and on what amount the service tax would be levied is awaited.services provided under mutual funds as regards chargeability to service tax.

.06 39.39 42..65 38.47 44.10 43.37 29.. 2008) Funds which have been compared are: ➢ Kotak Category Equity Fund Scheme Debt Fund Scheme Fund Kotak 30 – Growth Kotak Bond Short Term 56 | P a g e . DWS Investment Opportunity DSPML Equity Fund ICICI Prudential Dynamic Kotak 30 DSPML Top 100 Equity Reg Magnum Equity Equity: Diversified Equity: Diversified Equity: Diversified Equity: Diversified Equity: Diversified Equity: Diversified Equity: Diversified Hybrid: Equity-oriented Hybrid: Equity-oriented Hybrid: Equity-oriented Debt: Medium-term Debt: Medium-term Debt: Medium-term Equity: Diversified Equity: Diversified Equity: Diversified Equity: Diversified Equity: Diversified Equity: Diversified Equity: Diversified 43.93 31.23 Source: http://amfiindia.18 43.27 8.69 42.Kotak Opportunities UTI Infrastructure Magnum Multiplier Plus Reliance Growth Sundaram BNP Paribas Select Midcap Reg HDFC Top 200 BoB Growth Principal Child Benefit Magnum Balanced HDFC Prudence Birla Sun Life Income ICICI Prudential Long-.55 42.68 42.72 43.05 42.86 44.54 7.00 41.55 36.37 7.com (on 8th May. Kotak Flexi Debt Sundaram BNP Paribas S..

Growth HDFC MIP.MIS UTI Liquid Cash Instrument ➢ ICICI Category Equity Fund Scheme Debt Fund Scheme ELSS Tax Saver Monthly Income Plan Cash Fund Fund ICICI Prudential Dynamic Growth ICICI Prudential Short Term ICICI Prudential Tax Plan ICICI Prudential MIP ICICI Prudential Liquid Plan- 57 | P a g e .Short Term HDFC Liquid ➢ UTI Category Equity Fund Scheme Debt Fund Scheme ELSS Tax Saver Monthly Income Plan Cash Fund Fund UTI Equity Fund.ELSS Tax Saver Monthly Income Plan Cash Fund ➢ HDFC Category Equity Fund Scheme Debt Fund Scheme ELSS Tax Saver Monthly Income Plan Cash Fund Kotak Tax Saver Scheme – Growth Kotak Income Plus Kotak Liquid Instrument Fund HDFC Equity Fund.Growth UTI Short Term Income Regular UTI ETSP.Growth UTI.Growth HDFC HI Short Term HDFC Tax Saver Scheme.

Growth UTI Equity Fund. Kotak 30.Growth Reliance Growth Standard Sharpe Treynor Beta Deviation Ratio Ratio 25.98 Kotak 58 | P a g e .09 .Growth HDFC Equity Fund.39 3. 5. 3.96 R Square . 4.88 Alpha 4.➢ Reliance Category Equity Fund Scheme Debt Fund Scheme ELSS Tax Saver Monthly Income Plan Cash Fund Fund Reliance Growth Reliance Short Term Reliance Tax Saver Reliance MIP Reliance Liquid Cash Equity Fund Scheme 1.48 1. 2.Growth ICICI Prudential Dynamic Plan.

87 . As the desired level of Beta is low so that the fund return is stable but this is contradiction statement because beta shows the volatility of the stock or fund lower beta means that funds returns are stable but in today’s competitive world there is a quote “Higher the risk higher the return” if we go by this we need to have a high value of beta.61) which suggest that these funds are stable in their returns .98 .92 .77 .28 7.13 1.74 Note: The data is collected on 8th May.76 2.10 27.88 .95 2. UTI stands out with rank 1 (23.78 4.29 2.91 .61 23.06) & following UTI is HDFC (23.93 1.43 1.06 1. this also depends upon the risk appetitive of the investor if he is aggressive investor he would want his fund beta to be high but the case is entirely different in case of risk averse investor but as these funds are managed by professionals so we would be giving 1st rank to that fund which has lowest beta value .34 1.65 2. In this case also ICICI Prudential Dynamic Plan has lowest beta (.06 25.HDFC UTI ICICI Reliance 23. 2008 Findings Standard Deviation 4 2 1 3 5 Sharpe Ratio 2 3 5 1 4 Treynor Ratio 1 3 4 5 2 Beta 4 3 2 1 5 R Square 3 1 2 4 5 Alpha 2 4 5 1 3 Total 16 16 19 15 24 Kotak HDFC UTI ICICI Reliance Analysis The analysis suggests that in case of standard deviation which is desired to be low so that the fund can perform better.97 .89 .87) among these funds 59 | P a g e .75 -3.

higher R Square means a well diversified portfolio. This is because they are based solely on quantitative measures. which help investors to earn safe returns.39). HDFC Equity Growth fund has the maximum R Square (. Sharpe ratio represents this trade-off between risk and returns. So. But the analysis can’t be done on these three parameters.43) stands out clear with 1st rank. followed by Kotak 30 Growth fund (1. Further. in these two ratios higher value is preferred for the fund selection. As we have to do the analysis we have to take one stand so in this case. Both the Treynor Ratio and the Sharpe Ratio provide measures for ranking the relative performance of various portfolios. A higher Sharpe ratio is therefore better as it represents a higher return generated per unit of risk. So. on a risk-adjusted basis. according to me 1st rank should be given to that beta value which is lowest.Growth (. Diversification can be measured with the help of coefficient of diversification (R Square). In the case of Sharpe ratio ICICI Prudential Growth fund (1.89). But beta of 1 is preferable because of the returns it is considered safe for the value of 1 in this analysis almost most of the funds have beta of less than 1 which means that these funds are managed in keeping the people risk at a manageable level. So. Standard deviation measures total risk and this is the case with a single portfolio so we have also considered ratios which are quite important for mutual funds analysis like Sharpe ratio & Treynor ratio. If two funds have same beta value then R-square value is used with the beta which show how reliable the beta number is higher R-square value is preferred. one of the important advantages of the mutual fund is that the investor can enjoy the benefits of diversification of portfolio. 60 | P a g e . well diversified portfolio diversifies the risk of the portfolio.which is followed by UTI Equity Fund.92) followed by UTI Equity Growth fund (.88). Also. Sharpe ratio provides an unbiased look into fund's performance.

Reliance Short Term Standard Sharpe Treynor Deviation Ratio Ratio Kotak . It stands at 3rd position in Standard Deviation after UTI Equity Growth fund & HDFC Equity Growth fund and last when Treynor ratio is considered.27 61 | P a g e .97). Kotak 30 Growth fund (3. Debt Fund Scheme 1.59 5. Thus. ICICI Prudential Dynamic Growth Plan is the best Equity Fund when compared with rest of the Equity funds. ICICI Prudential Dynamic Growth Plan (7. Though R Square is not so convincing which means that the fund is not so diversified.30 3.98).48 R Square Alpha . ICICI Prudential Short Term 5. When Alpha is considered. If the alpha is positive the fund has performed better and if the alpha is negative the fund has not performed upto the benchmark. Beta & Sharpe ratio is concerned.09) value is higher so it has been given the 1st rank among the others which is followed by Reliance Equity fund (2. HDFC HI Short Term 3.In case of Treynor ratio. It is the best fund as far as Alpha.42 Beta . Kotak Bond Short Term 2.55 2. ICICI Prudential Dynamic Growth Plan is the best Equity fund for the investor for investment purpose.78) is the best followed by Kotak-30 Growth fund (4. Alpha indicates the superior performance of the fund. UTI Short Term Income Regular 4. But when we combine all the 6 parameters which are considered to measure the performance of a Mutual Fund.

54) which suggest that these funds are stable in their returns & also are less risky.44 .01 2. But beta of 1 is preferable 62 | P a g e .85 3.11 UTI .HDFC .52 7.46 . 2008 .53 2.59 2.42 . this also depends upon the risk appetitive of the investor if he is aggressive investor he would want his fund beta to be high but the case is entirely different in case of risk averse investor but as these funds are managed by professionals so we would be giving 1st rank to that fund which has lowest beta value .72 Findings Standard Deviation Kotak 3 HDFC 1 UTI 4 ICICI 5 Reliance 2 Sharpe Ratio 3 1 5 4 2 Treynor Ratio 1 2 4 5 3 Beta 3 1 4 5 2 R Square 2 3 4 5 1 Alpha 3 1 5 4 2 Total 15 9 26 28 12 Analysis The analysis suggests that in case of standard deviation which is desired to be low so that the fund can perform better.46).45 2.95 .52) & following HDFC HI is Reliance Short Term fund (.55 2. In this case also HDFC HI Short Term has lowest beta (.56 Reliance .62 .42) among these funds which is followed by Reliance Short Term fund (.66 2.51 .49 .77 1. HDFC HI Short Term stands out with rank 1 (. As the desired level of Beta is low so that the fund return is stable but this is contradiction statement because beta shows the volatility of the stock or fund lower beta means that funds returns are stable but in today’s competitive world there is a quote “Higher the risk higher the return” if we go by this we need to have a high value of beta.10 3.54 .87 ICICI .98 th Note: The data is collected on 8 May.54 6.

55). Sharpe ratio represents this trade-off between risk and returns. So. So. well diversified portfolio diversifies the risk of the portfolio. As we have to do the analysis we have to take one stand so in this case. Also. Sharpe ratio provides an unbiased look into fund's performance.because of the returns it is considered safe for the value of 1 in this analysis almost most of the funds have beta of less than 1 which means that these funds are managed in keeping the people risk at a manageable level. In the case of Sharpe ratio HDFC HI Short Term fund (7. A higher Sharpe ratio is therefore better as it represents a higher return generated per unit of risk. Standard deviation measures total risk and this is the case with a single portfolio so we have also considered ratios which are quite important for mutual funds analysis like Sharpe ratio & Treynor ratio. Both the Treynor Ratio and the Sharpe Ratio provide measures for ranking the relative performance of various portfolios. higher R Square means a well diversified portfolio.55).54). followed by Reliance Short Term fund (6. which help investors to earn safe returns. But the analysis can’t be done on these three parameters. one of the important advantages of the mutual fund is that the investor can enjoy the benefits of diversification of portfolio. on a risk-adjusted basis.10) stands out clear with 1st rank.59) followed by Kotak Bond Short Term (. So. Diversification can be measured with the help of coefficient of diversification (R Square). HDFC HI Short term fund is on the 3rd place (. 63 | P a g e . Reliance Short Term fund has the maximum R Square (. Further. according to me 1st rank should be given to that beta value which is lowest. If two funds have same beta value then R-square value is used with the beta which show how reliable the beta number is higher R-square value is preferred. in these two ratios higher value is preferred for the fund selection. This is because they are based solely on quantitative measures.

Alpha indicates the superior performance of the fund. HDFC HI Short Term fund (2. The fund is a good performer as it has the highest Alpha. When Alpha is considered. Thus. if a person wants to invest in Debt for a short term then he can go in for HDFC HI Short Term fund. It has the smallest Standard Deviation & also the smallest Beta when compared with all the funds. This shows the fund is less risky and will give good returns to its investors.Growth UTI ETSP. Kotak Tax Saver Scheme.11). ELSS Tax Saver Fund 1. 3.In case of Treynor ratio.95) is the best followed by Reliance Short Term fund (2. this fund stands at the 3rd position after Kotak Bond Short Term & Reliance Short Term. So. If the alpha is positive the fund has performed better and if the alpha is negative the fund has not performed upto the benchmark. Kotak Bond Short Term fund (3. HDFC HI Short Term fund is the best Debt fund when compared with the other funds of Kotak. ICICI. This shows that the fund is less diversified.42) value is higher so it has been given the 1st rank among the others which is followed by HDFC HI Short Term fund (3. 5.72). The fund is the best performer as far as Sharpe ratio is concerned and is the 2nd best when Treynor ratio is considered.Growth HDFC Tax Saver Scheme.Growth ICICI Prudential Tax Plan Reliance Tax Saver 64 | P a g e . When taken R Square into consideration. 4. 2. UTI & Reliance.

5 1 3.92 .80 1.65 25.54 .49 29.04 -5.03 R Square Alpha .84 .55 -3.Growth fund (25.5 19 26 Kotak HDFC UTI ICICI Reliance Analysis The analysis suggests that in case of standard deviation which is desired to be low so that the fund can perform better.05 .96 .86 .22) which suggest that these funds are stable in their returns & also are less risky.78 . As the desired level of Beta is low so that the fund return is stable but this is contradiction statement because beta shows the volatility of the stock or fund lower beta means that funds returns are stable but in today’s competitive world there is a quote “Higher the risk higher the return” if we go by this we need to have a high value of beta.76 1.90 .41 1.66 .Standard Sharpe Deviation Ratio Kotak HDFC UTI ICICI Reliance 25.62 Beta . this also depends upon the risk appetitive of the investor if he is aggressive investor he would want his 65 | P a g e .11 -4.22 24.5 2 5 R Square 3 2 1 4 5 Alpha 3 1 5 2 4 Total 22.91 .61 -4.32 Note: The data is collected on 8th May. 2008 Findings Standard Deviation 3 2 1 5 4 Sharpe Ratio 5 1 2 3 4 Treynor Ratio 5 2 1 3 4 Beta 3.96 .86 Treynor Ratio 1.Growth fund stands out with rank 1 (24.49) followed by HDFC Tax Saver Scheme.94 1.5 9 13.02 27.94 1.93 1.11 -7. UTI ETSP.

Further.94). UTI ETSPGrowth fund has the maximum R Square (. If two funds have same beta value then R-square value is used with the beta which show how reliable the beta number is higher R-square value is preferred. well diversified portfolio diversifies the risk of the portfolio.86) followed by HDFC Tax Saver Scheme. Diversification can be measured with the help of coefficient of diversification (R Square). A higher Sharpe ratio is therefore better as it represents a higher return generated per unit of risk. Sharpe ratio represents this trade-off between risk and returns. But beta of 1 is preferable because of the returns it is considered safe for the value of 1 in this analysis almost most of the funds have beta of less than 1 which means that these funds are managed in keeping the people risk at a manageable level. In this case also HDFC Tax Saver Scheme Fund has lowest beta (. higher R Square means a well diversified portfolio. which help investors to earn safe returns and in this case beta is approximately equal to 1.92) among these funds which is followed by ICICI Prudential Tax Plan (. Sharpe ratio provides an unbiased look into fund's performance. This is because they are based solely on quantitative measures. Also. Standard deviation measures total risk and this is the case with a single portfolio so we have also considered ratios which are quite important for mutual funds analysis like Sharpe ratio & Treynor ratio. one of the important advantages of the mutual fund is that the investor can enjoy the benefits of diversification of portfolio. So.fund beta to be high but the case is entirely different in case of risk averse investor but as these funds are managed by professionals so we would be giving 1st rank to that fund which has lowest beta value . Both the Treynor Ratio and the Sharpe Ratio provide measures for ranking the 66 | P a g e .Growth Fund (. As we have to do the analysis we have to take one stand so in this case. according to me 1st rank should be given to that beta value which is lowest.84) But the analysis can’t be done on these three parameters. So.

90). UTI ETSP Growth fund (1. Though all the funds are showing a negative figure when alpha is compared but again it is the best as far as these 5 funds are compared.relative performance of various portfolios. HDFC Tax Saver Scheme is the best Tax Saver Fund. HDFC MIP. an HDFC Tax Saver Scheme.Growth fund (1. if we keep all the 6 parameters in mind the investor should be advised to invest in HDFC Tax Saver Scheme.93).11) is the best followed by ICICI Prudential Tax Plan (-4. In case of Sharpe Ratio. So. Monthly Income Plans (MIP) 1. But. it is the just the opposite of Sharpe Ratio. in these two ratios higher value is preferred for the fund selection.94) value is higher so it has been given the 1st rank among the others which is followed by HDFC Tax Saver Scheme fund (1. So. UTI.05) stand out clear with 1st rank.MIS 67 | P a g e . when compared among these 5 funds HDFC Tax Saver Scheme (-3.Short Term 3.91) & just next is ICICI Prudential Tax Plan (. If the alpha is positive the fund has performed better and if the alpha is negative the fund has not performed upto the benchmark. In case of Treynor ratio. It is again the best when we consider the Sharpe Ratio. When Alpha is considered. Kotak Income Plus 2. Thus. on a risk-adjusted basis. all the funds have a negative figure which means that all the funds are not performing good. followed by UTI ETSP Growth fund (.04). It stands 2nd in case of Standard Deviation after UTI ETSP Growth Fund and is the best fund when Beta is compared followed by ICICI Prudential Tax Plan. As far as R Square is considered it stands at 2nd position after UTI ETSP Growth Fund. Alpha indicates the superior performance of the fund.

71 3.22 .18) & following UTI is HDFC (4.63 .67 2.65 4.20 .55 .25 4.63 2.24) which suggest that these funds are stable in their returns.18 4. 2008 4.97 3.24 4.70 1.07 .76 . ICICI Prudential MIP 5.69 .03 .18 .04 2.28 HDFC UTI ICICI Treynor Ratio Beta R Square Alpha Reliance Note: The data is collected on 8th May.81 .15 .47 -.4.50 -.02 Findings Standard Deviation Kotak HDFC UTI ICICI Reliance Sharpe Ratio Treynor Ratio Beta R Square Alpha Total 5 2 1 3 4 3 4 1 2 5 2 5 3 1 4 4 2 5 3 1 3 1 5 2 4 2 5 3 1 4 19 19 18 12 22 Analysis The analysis suggests that in case of standard deviation which is desired to be low so that the fund can perform better.13 2. this also depends upon the 68 | P a g e . As the desired level of Beta is low so that the fund return is stable but this is contradiction statement because beta shows the volatility of the stock or fund lower beta means that funds returns are stable but in today’s competitive world there is a quote “Higher the risk higher the return” if we go by this we need to have a high value of beta. UTI stands out with rank 1 (4.34 3.17 .48 5. Reliance MIP Standard Sharpe Deviation Ratio Kotak 5.71 .

In this case also Reliance MIP has lowest beta (. If two funds have same beta value then R-square value is used with the beta which show how reliable the beta number is higher R-square value is preferred. higher R Square means a well diversified portfolio.87) among these funds which is followed by HDFC MIP. But beta of 1 is preferable because of the returns it is considered safe for the value of 1 in this analysis almost most of the funds have beta of less than 1 which means that these funds are managed in keeping the people risk at a manageable level. which help investors to earn safe returns.81) followed by ICICI Prudential MIP fund (.risk appetitive of the investor if he is aggressive investor he would want his fund beta to be high but the case is entirely different in case of risk averse investor but as these funds are managed by professionals so we would be giving 1st rank to that fund which has lowest beta value .88). Further. Diversification can be measured with the help of coefficient of diversification (R Square). This is because they are based solely on quantitative measures. As we have to do the analysis we have to take one stand so in this case. But the analysis can’t be done on these two parameters. A higher Sharpe ratio is therefore better as it represents a higher return generated per unit of risk. Standard deviation measures total risk and this is the case with a single portfolio so we have also considered ratios which are quite important for mutual funds analysis like Sharpe ratio & Treynor ratio. according to me 1st rank should be given to that beta value which is lowest. Also.Short term (. Sharpe ratio provides an unbiased look into fund's performance. So. Both the 69 | P a g e . HDFC MIPshort Term fund has the maximum R Square (. Sharpe ratio represents this trade-off between risk and returns. one of the important advantages of the mutual fund is that the investor can enjoy the benefits of diversification of portfolio. well diversified portfolio diversifies the risk of the portfolio.71). So.

13) is the best fund followed by Kotak Income Plus (2. ICICI Prudential MIP (4. Alpha indicates the superior performance of the fund. It is 2nd best in Sharpe ratio after UTI MIS and it is the best in Treynor ratio followed by Kotak Income plus. It is also 3rd as far as beta of the fund is considered after Reliance MIP & HDFC MIP. In case of Treynor ratio. Cash Funds 1. Kotak Liquid Instrument 2. So. HDFC MIP & Reliance MIP have negative Sharpe ratio. ICICI Prudential MIP should be considered by the investors.71) value is higher so it has been given the 1st rank among the others which is followed by Kotak Income Plus fund (4. ICICI Prudential MIP is recommended to the investors.04). in these two ratios higher value is preferred for the fund selection. Also ICICI Prudential MIP is the best fund when Alpha is considered.Treynor Ratio and the Sharpe Ratio provide measures for ranking the relative performance of various portfolios.Short Term. UTI Liquid Cash Instrument 70 | P a g e .76) stands out clear with 1st rank.34) in the third place. HDFC Liquid 3.Short Term fund as this fund is 2md best in both Standard Deviation & Beta. But. after considering all the 6 parameters ICICI Prudential MIP is the best fund.47). In the case of Sharpe ratio UTI MIP fund (. followed by ICICI Prudential MIP fund (. But. if the investor wants to take less risk then he can go in for HDFC MIP.70) & UTI MIS (2. If the alpha is positive the fund has performed better and if the alpha is negative the fund has not performed upto the benchmark. ICICI is the 3rd highest in standard deviation after UTI MIS fund and HDFC MIP fund. on a risk-adjusted basis. In case of Alpha ICICI MIP (3.

13 .14 .98 .91 1.15 16.24 1.78 121.12 17.98 1.5 5 12 14.91 UTI ICICI Treynor Ratio Beta R Square Alpha Reliance Note: The data is collected on 8th May.09 .40 15.15 .14) which suggest that these funds are stable in their returns. As the desired level of Beta is low so that the fund return is stable but this is contradiction statement because beta shows the volatility of the stock or fund lower beta means that funds returns are stable but in today’s competitive world there is a quote “Higher the risk higher the return” if we 71 | P a g e .12) & ICICI Prudential Liquid (.66 157.5 29 Analysis The analysis suggests that in case of standard deviation which is desired to be low so that the fund can perform better.23 152.10 .44 169. 2008 .33 .17 1.5 2 5 1 2 3 4 5 1 3 4 2 5 2 3 1 4 5 3 2 5 1 4 4 1 2.20 .23 . HDFC Liquid & UTI Liquid Cash Instrument shares the 3rd position as they both have the same standard deviation.4.84 2.03 Findings Standard Deviation Kotak HDFC UTI ICICI Reliance Sharpe Ratio Treynor Ratio Beta R Square Alpha Total 1 3. Kotak Liquid Instrument stands out with rank 1 (.5 3. ICICI Prudential Liquid 5.20 HDFC .89 154. Reliance Liquid Cash Standard Sharpe Deviation Ratio Kotak .5 2.79 .38 16.30 .10 .15 .5 19 15.

which help investors to earn safe returns. But in this case. But beta of 1 is preferable because of the returns it is considered safe for the value of 1 in this analysis almost most of the funds have beta of less than 1 which means that these funds are managed in keeping the people risk at a manageable level. Also.33) followed by HDFC Liquid fund (. In this case also UTI Liquid Cash Instrument has lowest beta (. beta of all the funds is much below than 1. ICICI Liquid Cash Instrument fund has the maximum R Square (. Sharpe ratio provides an unbiased look into fund's performance. Sharpe ratio represents this trade-off between risk and returns. Further. well diversified portfolio diversifies the risk of the portfolio. If two funds have same beta value then R-square value is used with the beta which show how reliable the beta number is higher R-square value is preferred.23). So.10). So.09) among these funds which is followed by Kotak Liquid Instrument (. But the analysis can’t be done on these two parameters. according to me 1st rank should be given to that beta value which is lowest. Diversification can be measured with the help of coefficient of diversification (R Square). higher R Square means a well diversified portfolio. As we have to do the analysis we have to take one stand so in this case. Standard deviation measures total risk and this is the case with a single portfolio so we have also considered ratios which are quite important for mutual funds analysis like Sharpe ratio & Treynor ratio. this also depends upon the risk appetitive of the investor if he is aggressive investor he would want his fund beta to be high but the case is entirely different in case of risk averse investor but as these funds are managed by professionals so we would be giving 1st rank to that fund which has lowest beta value .go by this we need to have a high value of beta. one of the important advantages of the mutual fund is that the investor can enjoy the benefits of diversification of portfolio. A higher Sharpe ratio is therefore better as it represents a higher return generated per unit of risk. 72 | P a g e .

09). Though it is the 3rd best in R Square i. Alpha indicates the superior performance of the fund. followed by HDFC Liquid fund (16.24) followed by UTI Liquid Cash Instrument (1. If the alpha is positive the fund has performed better and if the alpha is negative the fund has not performed upto the benchmark. on a risk-adjusted basis. Kotak Liquid Instrument has the highest ratio. Kotak Liquid Instrument fund (169. the risk is least as compared to all other mutual funds. Kotak Liquid instrument fund is the best Cash Fund when compared with rest of the cash funds.98) & ICICI Prudential Liquid fund (1. Keeping in mind all the 6 parameters.10) and UTI Liquid Cash instrument has of (.78).98) each. Kotak Liquid Instrument fund is recommended to all the investors as it has the least standard deviation i. Both the Treynor Ratio and the Sharpe Ratio provide measures for ranking the relative performance of various portfolios. When compared the Sharpe ratio & the Treynor ratio. CONCLUSION 73 | P a g e . it is less diversified as compared to ICICI Prudential Liquid & HDFC Liquid.e. in these two ratios higher value is preferred for the fund selection. In the case of Sharpe ratio Kotak Liquid Instrument fund (17. So.89) value is higher so it has been given the 1st rank among the others which is followed by ICICI Prudential Liquid fund (157. Beta is also 2nd lowest just after UTI Liquid Cash Instrument and is also very close as it has the beta of (. When Alpha is considered.This is because they are based solely on quantitative measures.20) stands out clear with 1st rank. In case of Treynor ratio. HDFC Liquid fund (2.e.91).

ELSS Tax Saving. risk-taking investors would do well.After analyzing the mutual funds under 5 categories like Equity based. Category Equity Fund Scheme Debt Fund Scheme ELSS Tax Saver Monthly Income Plan Cash Fund Fund ICICI Prudential Dynamic Plan. RECOMMENDATIONS 74 | P a g e . Beta.Short Term HDFC Tax Saver Scheme ICICI Prudential MIP Kotak Liquid Instrument So. Monthly Income Plans & Cash funds under 6 parameters like Standard deviation. R Squared. No fund is the best in all the categories.E. I have come to a conclusion that there are different funds which are performing best under different categories.I. who hold a larger portion of their portfolio in actively managed diversified equity funds. Alpha. Treynor Ratio & Sharpe Ratio. fund is the best fund with a NAV of 45.72 of the past 3 years.G. Debt based. Investors have added to their portfolios well-managed diversified equity funds with proven track records over longer time frames.Growth HDFC HI.R. it can be seen that ICICI Prudential is the best in Equity Fund Scheme & Monthly Income Plan but HDFC is the best in Debt Fund Scheme & ELSS Tax Saver Scheme. Kotak is the best in Cash Fund & when the NAV of past 3 years is compared T.64 and among these 5 funds Kotak Opportunities is the best fund with an NAV of 43. On the basis of the performance of diversified equity funds and how domestic markets are placed.

Also have a look at the Standard Deviation. risk is reduced and the investor will get excellent profit. mid-cap funds and a balanced fund. and then invest in it. Beta. a marketing device 75 | P a g e . then he may go for SIP (Systematic Investment Plan) method. The latter would provide the debt component and reduce the portfolio's downside risk. However. R Squared. • Investor can also plan like one mutual fund of diversified equity plan.➢ Diversify • One should diversify the investments between a few funds (the actual number depends entirely on the amount of investment). This strategy ensures that the portfolio is not dependent on the performance of one single fund. second mutual fund of balanced type and third one you can plan of debt type etc. is irrelevant while selecting the fund as it is the percentage gain or loss that matters. Only judging a fund by its NAV. ➢ New Fund Offer (NFO). dividend etc. Consider well rated large-cap funds. ➢ Don’t just judge a fund by its NAV • Never judge a fund on the basis of its NAV. one needs to avoid over-diversification as that would achieve nothing. In this manner the money will get diversified. A risk adverse investor should avoid investing in the Sectoral funds. the mutual fund has declared. If the investor has chosen equity or stock market related mutual fund. Alpha. • Also look for past returns. • For Example: Rs 20. Treynor & Sharpe Ratios & also its performance in the bear and the bull phase.000 per month. it would be wise to opt for a maximum of three funds.

These schemes are launched because they are easy avenues to capture management fees and increase the fund house's asset base. It is important for investors to understand that NFOs are merely marketing devices. but with new peppy names flaunted to attract investors.• • AMC’s use NFOs to create excitement and push their funds. APPENDICES 76 | P a g e . There are a number of existing funds that have proved their mettle and investors should opt for them because they have a track record. These schemes are usually just clones of existing schemes.

30.➢ Kotak Kotak 30. 0 to 49999999 then Entry load is 2. and that these companies may or may not be the same which constitute the BSE Sensitive Index or NSE Fifty (S&P CNX Nifty) Index. Exit load is 1%. 2001 Declared Minimum Investment (Rs) Purchase Redemptions NAV Calculation Entry Load Exit Load 5000 Daily Daily Amount Bet. Expense ratio(%) 2. and Amount greater than 50000000 then Entry load is 0%. 1998 10 Fund Manager SIP STP SWP Krishna Sanghvi. Sanjib Guha .Growth Objective The investment objective of the scheme is to generate capital appreciation from a portfolio of predominantly equity and equity related securities. 0 Months to 6 Months. 684.07 as on Apr Cr.26 Fund Size in Rs. If redeemed bet. 77 | P a g e .25%. 2008 Last Dividend 10 % as on Dec 31.24 Portfolio Turnover Ratio(%) 131. Review and rebalancing will be conducted if the investment in companies exceed above 39. The portfolio will generally comprise of equity and equity related instruments of around 30companies which may go up to 39 companies. Type of Scheme Nature Option Inception Date Face Value (Rs/Unit) Open Ended Equity Growth Dec 22.

257. 30. 2002 10 Fund Manager SIP STP SWP Deepak Agrawal Expense ratio(%) 0. Exit Load is 0%. 2008 Last Dividend NA Declared Minimum Investment (Rs) Purchase Redemptions NAV Calculation Entry Load Exit Load 5000 Daily Daily Entry Load is 0%.60 Portfolio Turnover Ratio(%) NA Fund Size in Rs. Type of Scheme Nature Option Inception Date Face Value (Rs/Unit) Open Ended Debt Growth Apr 25.73 as on Apr Cr. 78 | P a g e .Kotak Bond Short Term Objective The objective of the Plan is to provide reasonable returns and high level of liquidity by investing in debt instruments and money market instruments so as to spread the risk across different kinds of issuers in the debt markets.

Growth Objective The investment objective of the scheme is to generate long term capital appreciation from a diversified portfolio of equity and equity related securities and enable investors to avail the income tax rebate. 79 | P a g e . & Amount greater than 50000000 then Entry load is 0%.31 Fund Size in Rs. If redeemed after 0 Year. 463. 30. 2008 Last Dividend NA Declared Minimum Investment (Rs) Purchase Redemptions NAV Calculation Entry Load Exit Load 500 Daily Daily Amount Bet. 2005 10 Fund Manager SIP STP SWP Krishna Sanghvi Expense ratio(%) 2. as permitted from time to time.25%. Exit Load is 0%.48 as on Apr Cr. Type of Scheme Nature Option Inception Date Face Value (Rs/Unit) Open Ended Equity Growth Oct 25. 0 to 49999999 then Entry load is 2.31 Portfolio Turnover Ratio(%) 84. Exit load is 0%.Kotak Tax Saver Scheme.

2003 10 Fund Manager SIP STP SWP Ritesh Jain. Sanjib Guha Fund Size in Rs.Kotak Income Plus Objective To enhance returns over a portfolio of debt instruments with a moderate exposure in equity and equity related instruments. 28. 80 | P a g e . and Amount Bet. If redeemed bet.22 Portfolio Turnover Ratio(%) NA Last Dividend NA Declared Minimum Investment (Rs) Purchase Redemptions NAV Calculation Entry Load Exit Load 5000 Daily Daily Entry Load is 0%. 2008 Expense ratio(%) 2. 0 Year to 1 Year. Krishna Sanghvi. Type of Scheme Nature Option Inception Date Face Value (Rs/Unit) Open Ended Debt Growth Nov 14.95 as on Apr Cr. 30. 0 to 2500000 then Exit load is 1%.

commercial paper. money market instruments such as treasury bills. 0.72 NA Fund Size in Rs. Government Securities.02 as Cr. 81 | P a g e . 2008 Last Dividend NA Declared Minimum Investment (Rs) Purchase Redemptions NAV Calculation Entry Load Exit Load 10000000 Daily Daily Entry Load is 0%. debentures. Type of Scheme Nature Option Inception Date Face Value (Rs/Unit) Open Ended Short Term Debt Growth Mar 12. Apr 30. 4475. including repos in permitted securities of different maturities so as to spread the risk across different kinds of issuers in the debt markets. Exit Load is 0%. certificate of deposit. Deepak Agrawal. 2003 10 on Fund Manager SIP STP SWP Expense Ratio(%) Portfolio Turnover Ratio(%) Ritesh Jain.Kotak Liquid Instrument Objective Aims to provide reasonable returns and high level of liquidity by investing in debt instruments such as bonds.

➢ HDFC
HDFC Income Fund- Growth Objective Aims at providing capital appreciation through investments predominantly in equity oriented securities

Type of Scheme Nature Option Inception Date Face Value (Rs/Unit)

Open Ended Equity Growth Dec 24, 1994 10 on

Fund Manager SIP STP SWP

Prashant Jain

Expense ratio(%) 1.82 Portfolio Turnover Ratio(%) 56.62

Fund Size in Rs. 4243.96 as Cr. Apr 30, 2008 Last Dividend NA Declared Minimum Investment (Rs) Purchase Redemptions NAV Calculation Entry Load Exit Load 5000 Daily Daily

Amount Bet. 0 to 49999999 then Entry load is 2.25%. & Amount greater than 50000000 then Entry load is 0%. Exit Load is 0%.

82 | P a g e

HDFC HI Short Term Objective Seeks to generate income with a view to maximize income while maintaining the optimum balance of Yield , Safety and Liquidity.

Type of Scheme Nature Option Inception Date Face Value (Rs/Unit)

Open Ended Debt Growth Feb 6, 2002 10

Fund Manager SIP STP SWP

Shabbir Kapasi

Expense ratio(%) 0.40 Portfolio Turnover Ratio(%) NA

Fund Size in Rs. 199.35 as on Apr Cr. 30, 2008 Last Dividend NA Declared Minimum Investment (Rs) Purchase Redemptions NAV Calculation Entry Load Exit Load 1000 Daily Daily Entry Load is 0%. Exit Load is 0%.

83 | P a g e

HDFC Tax Saver Scheme Objective The fund plans to provide tax benefits along with capital appreciation

Type of Scheme Nature Option Inception Date Face Value (Rs/Unit)

Open Ended Equity Growth Mar 31, 1996 10 on

Fund Manager SIP STP SWP

Vinay R Kulkarni

Expense ratio(%) 2.02 Portfolio Turnover Ratio(%) 50.91

Fund Size in Rs. 1416.85 as Cr. Apr 30, 2008

Last Dividend 210 % as on Apr 4, 2000 Declared Minimum Investment (Rs) Purchase Redemptions NAV Calculation Entry Load Exit Load 500 Daily Daily Amount Bet. 0 to 49999999 then Entry load is 2.25%. & Amount greater than 50000000 then Entry load is 0%. Exit Load is 0%.

84 | P a g e

5%. Type of Scheme Nature Option Inception Date Face Value (Rs/Unit) Open Ended Debt Growth Dec 8.HDFC Monthly Income Plan . 30.13 Portfolio Turnover Ratio(%) NA Fund Size in Rs. The Secondary objective of the scheme is to generate long term capital appreciation by investing a portion of the Scheme’s assets in equity and equity related instruments. If redeemed bet. If redeemed bet.25%. 0 Months to 3 Months. and Amount greater than 1000001 then Exit load is 0. 0 to 1000000 then Exit load is 0. 2003 10 Fund Manager SIP STP SWP Shobhit Mehrotra Vinay R Kulkarni Expense ratio(%) 2. 117. 0 Months to 6 Months.Short Term Objective The primary objective of the Scheme is to generate regular returns through investment primarily in Debt and Money Market Instruments. and Amount Bet. 2008 Last Dividend NA Declared Minimum Investment (Rs) Purchase Redemptions NAV Calculation Entry Load Exit Load 5000 Daily Daily Entry Load is 0%.1 as on Apr Cr. 85 | P a g e .

2000 10 on Fund Manager SIP STP SWP Shobhit Mehrotra Expense ratio(%) 0.HDFC Liquid Objective The primary objective of the Scheme is to enhance income consistent with a high level of liquidity. 2008 Last Dividend NA Declared Minimum Investment (Rs) Purchase Redemptions NAV Calculation Entry Load Exit Load 10000 Daily Daily Entry Load is 0%. 5078.26 as Cr. through a judicious portfolio mix comprising of money market and debt instruments. Type of Scheme Nature Option Inception Date Face Value (Rs/Unit) Open Ended Short Term Debt Growth Oct 17. Apr 30. 86 | P a g e .55 Portfolio Turnover Ratio(%) NA Fund Size in Rs. Exit Load is 0%.

2008 51. Apr 30. 0 to 19999999 then Exit load is 1%. 0 to 19999999 then Entry load is 2. and Amount Bet.31 Last Dividend 20 % as on Jun 10. 1992 10 on Fund Manager SIP STP SWP Expense Ratio(%) Portfolio Turnover Ratio(%) Anoop Bhaskar 1.51 as Cr. If redeemed bet. 0 Days to 180 Days.54 Fund Size in Rs. 0 Days to 87 | P a g e . and Amount greater than 20000000 then Entry load is 0%.➢ UTI UTI Equity Fund Objective The principal investment objective is to provide long term capital appreciation through investment in the securities market in India. 2005 Declared Minimum Investment (Rs) Purchase Redemptions NAV Calculation Entry Load Exit Load 2000 Daily Daily Amount Bet. If redeemed bet. Type of Scheme Nature Option Inception Date Face Value (Rs/Unit) Open Ended Equity Growth Apr 20.25%. 1762.

0 Days to 15 Days. Type of Scheme Nature Option Inception Date Face Value (Rs/Unit) Open Ended Debt Growth Aug 27. 30.57 as on Apr Cr.75%. and Amount greater than 20000000 then Exit load is 0. Exit load is 0. 618.Income Regular Objective The scheme aims to generate steady and reasonable income. UTI Short Term. If redeemed bet. 2008 Last Dividend NA Declared Minimum Investment (Rs) Purchase Redemptions NAV Calculation Entry Load Exit Load 10000000 Daily Daily Entry Load is 0%. 88 | P a g e . with low risk and high level of liquidity from a portfolio of money market securities and high quality debt.67 Portfolio Turnover Ratio(%) NA Fund Size in Rs.5%.180 Days. 2007 10 Fund Manager SIP STP SWP Amit Jain Expense ratio(%) 0.

89 | P a g e .linked securities.89 as on Apr Cr.Growth Objective Aims at providing investors the opportunity to participate in the reasonable growth in the value of investments in equities and equity .UTI ETSP. 2008 Last Dividend 20 % as on Nov 30. over a period of time. in addition to tax benefits Type of Scheme Nature Option Inception Date Face Value (Rs/Unit) Open Ended Equity Growth Dec 15. Exit Load is 0%.39 Fund Size in Rs. 0 to 19999999 then Entry load is 2. 1999 10 Fund Manager SIP STP SWP Swati Kulkarni Expense ratio(%) 2. and Amount greater than 20000000 then Entry load is 0%. 352.33 Portfolio Turnover Ratio(%) 38. 2004 Declared Minimum Investment (Rs) Purchase Redemptions NAV Calculation Entry Load Exit Load 500 Daily Daily Amount Bet. 30.25%.

0 to 999999 then Exit load is 0. Type of Scheme Nature Option Inception Date Face Value (Rs/Unit) Open Ended Debt Growth Oct 11.5%. and Amount greater than 1000000 then Exit load is 0%. and Amount Bet. 90 | P a g e .31 Fund Size in Rs.08 as on Apr Cr. 2002 10 Fund Manager SIP STP SWP Amandeep Chopra Expense ratio(%) 1. 2008 Last Dividend NA Declared Minimum Investment (Rs) Purchase Redemptions NAV Calculation Entry Load Exit Load 1000 Daily Daily Entry Load is 0%.UTI Monthly Income Scheme Objective The scheme aims at distributing income periodically. 0 Days to 180 Days. If redeemed bet.40 Portfolio Turnover Ratio(%) 32. 30. 144.

2003 Fund Manager SIP STP SWP Amandeep Chopra Face Value 1000 (Rs/Unit) Fund Size in Rs. 30.24 Portfolio Turnover Ratio(%) NA Last Dividend NA Declared Minimum Investment (Rs) Purchase Redemptions NAV Calculation Entry Load Exit Load 100000 Daily Daily Entry Load is 0%. ➢ ICICI Prudential 91 | P a g e .77 as on Apr Cr. with low risk and high level of liquidity from a portfolio of money market securities and high quality debt. Type of Scheme Nature Option Inception Date Open Ended Short Term Debt Growth Jun 24. 2008 Expense ratio(%) 0. Exit Load is 0%. 10929.UTI Liquid Cash Instrument Objective The scheme aims to generate steady and reasonable income.

and Amount greater than 50000000 then Exit load is 0%.5%. For defensive considerations.25%. 2008 Last Dividend NA Declared Minimum Investment (Rs) Purchase Redemptions NAV Calculation Entry Load 5000 Daily Daily Amount Bet. 0 to 49999999 then Exit load is 1%.ICICI Prudential Dynamic Plan. Amit Expense ratio(%) 1. 0 Months to 6 Months.78 as Cr. Type of Scheme Nature Option Inception Date Face Value (Rs/Unit) Open Ended Equity Growth Oct 18. Apr 30. and Amount greater than 50000000 then Entry load is 0%. Mehta . the Scheme may invest in debt. If redeemed bet.90 Portfolio Turnover Ratio(%) 225 Fund Size in Rs. If redeemed bet. 1895. 6 Months Exit Load to 12 Months. money market instruments and derivatives. 0 to 49999999 then Exit load is 0. ICICI Prudential Short Term Objective 92 | P a g e . and Amount Bet. 0 to 49999999 then Entry load is 2. and Amount Bet. 2002 10 on Fund Manager SIP STP SWP S Naren.Growth Objective Seeks to generate capital appreciation by actively investing in equity and equity related securities.

Type of Scheme Nature Option Inception Date Face Value (Rs/Unit) Open Ended Debt Growth Feb 23. Amit Mehta . 403. Fund Manager SIP STP SWP Expense Ratio(%) Portfolio Turnover Ratio(%) 0. 2008 NA Last Dividend NA Declared Minimum Investment (Rs) Purchase Redemptions NAV Calculation Entry Load Exit Load 25000 Daily Daily Entry Load is 0%. Exit Load is 0%.Aims to generate income through investments in a basket of debt and money market instruments with a view to provide reasonable returns with low interest risks. 30.12 as on Apr Cr.80 Fund Size in Rs. ICICI Prudential Tax Plan Objective The scheme seeks to generate long term capital appreciation from a portfolio that is Invested predominantly in equity and equity related securities 93 | P a g e . 2003 10 Chaitanya Pande.

1999 10 Fund Manager SIP STP SWP S Naren.25%.95 as on Apr Cr. 2008 Last Dividend NA Declared Minimum Investment (Rs) Purchase Redemptions NAV Calculation Entry Load Exit Load 500 Daily Daily Amount Bet. 94 | P a g e .11 Portfolio Turnover Ratio(%) 187 Fund Size in Rs. 0 to 49999999 then Entry load is 2.Type of Scheme Nature Option Inception Date Face Value (Rs/Unit) Open Ended Equity Growth Aug 9. 30. Mehta Amit Expense ratio(%) 2. and Amount greater than 50000000 then Entry load is 0%. ICICI Prudential Monthly Income Plan Objective The primary investment objective of the scheme is to generate regular income and secondary objective is to generate capital appreciation. Exit Load is 0%. 891.

2000 10 Fund Manager SIP STP SWP Prashant Kothari.95 Portfolio Turnover Ratio(%) 42 Last Dividend NA Declared Minimum Investment (Rs) Purchase Redemptions NAV Calculation Entry Load Exit Load 5000 Daily Daily Entry Load is 0%. 2008 Expense ratio(%) 1. ICICI Prudential Liquid Objective Aims to generate steady and consistent returns from a basket of high quality liquid debt instruments. 30. 0 to 1000000 then Exit load is 0. and Amount greater than 1000001 then Exit load is 0%. 95 | P a g e .5%. and Amount Bet. Rahul Goswami.01 as on Apr Cr. Amit Mehta Fund Size in Rs. 356.Type of Scheme Nature Option Inception Date Face Value (Rs/Unit) Open Ended Debt Growth Oct 14. If redeemed bet. 0 Months to 6 Months.

Type of Scheme Nature Option Inception Date Face Value (Rs/Unit) Open Ended Short Term Debt Growth Feb 23. 2008 Last Dividend NA Declared Minimum Investment (Rs) Purchase Redemptions NAV Calculation Entry Load Exit Load 10000000 Daily Daily Entry Load is 0%.25 Portfolio Turnover Ratio(%) NA Fund Size in Rs. ➢ Reliance Reliance Growth Objective Seeks to provide Long Term Capital Appreciation 96 | P a g e . 2003 10 Fund Manager SIP STP SWP Chaitanya Pande. Amit Mehta Expense ratio(%) 0. 18912. Apr 30.28 as on Cr. Exit Load is 0%.

Exit Load Reliance Short Term Objective It aims to generate stable returns for investors with a short-term investment horizon by investing in fixed income securities of a short-term maturity. and Amount greater than 50000000 then Entry load is 0%. 0 to 19999999 then Entry load is 2.89 as Cr.25%.Type of Scheme Nature Option Inception Date Face Value (Rs/Unit) Open Ended Equity Growth Oct 7.25%. 0 to 49999999 then Exit load is 1%. Apr 30. 0 Year to 1 Year. 1995 10 on Fund Manager SIP STP SWP Sunil Singhania Expense ratio(%) 1. 2008 Last Dividend NA Declared Minimum Investment (Rs) Purchase Redemptions NAV Calculation 5000 Daily Daily Entry Load Amount Bet. If redeemed bet.81 Portfolio Turnover Ratio(%) 50 Fund Size in Rs. 97 | P a g e . 5369. and Amount Bet. 20000000 to 49999999 then Entry load is 1. and Amount Bet. and Amount greater than 50000000 then Exit load is 0%.

2002 10 Fund Manager SIP STP SWP Prashant Pimple Expense ratio(%) 0.65 Portfolio Turnover Ratio(%) NA Fund Size in Rs. Reliance Tax Saver Objective The primary objective of the scheme is to generate long-term capital appreciation from a portfolio that is invested predominantly in equity and equity related instruments. 2008 Last Dividend NA Declared Minimum Investment (Rs) Purchase Redemptions NAV Calculation Entry Load Exit Load 50000 Daily Daily Entry Load is 0%. Exit Load is 0%. 602.Type of Scheme Nature Option Inception Date Face Value (Rs/Unit) Open Ended Debt Growth Dec 17. 30.7 as on Apr Cr. 98 | P a g e .

and Amount greater than 50000000 then Entry load is 0%.Type of Scheme Nature Option Inception Date Face Value (Rs/Unit) Open Ended Equity Growth Aug 23. Exit Load is 0%.25%.25%.89 Portfolio Turnover Ratio(%) 98 Fund Size in Rs. 20000000 to 49999999 then Entry load is 1. 2008 Last Dividend NA Declared Minimum Investment (Rs) Purchase Redemptions NAV Calculation 500 Daily Daily Entry Load Amount Bet. 0 to 19999999 then Entry load is 2. 2005 10 on Fund Manager SIP STP SWP Ashwani Kumar Expense ratio(%) 1. Exit Load Reliance Monthly Income Plan Objective The primary objective of the scheme is to generate regular income in order to make regular dividend payments to unit holders with the secondary objective of growth in capital 99 | P a g e .74 as Cr. Apr 30. and Amount Bet. 2009.

If redeemed bet. If redeemed bet. and Amount Bet.6%. and Amount Bet.Type of Scheme Nature Option Inception Date Face Value (Rs/Unit) Open Ended Debt Growth Dec 29. and Amount Bet. 0 to 2500000 then Exit load is 0. 30. If redeemed bet.25%.56 as on Apr Cr.99 Portfolio Turnover Ratio(%) NA Fund Size in Rs.1%. 3 Months to 6 Months.5%. 9 Months to 12 Months. Exit Load Reliance Liquid Cash Objective To generate optimal returns consistent with moderate levels of risk and high liquidity. 2003 10 Fund Manager SIP STP SWP Ashwani Kumar Prashant Pimple Expense ratio(%) 1. 0 to 2500000 then Exit load is 0. 0 Days to 7 Days. and Amount Bet.75%. 250. 0 to 2500000 then Exit load is 0. If redeemed bet. 100 | P a g e . 6 Months to 9 Months. 2008 Last Dividend NA Declared Minimum Investment (Rs) Purchase Redemptions NAV Calculation Entry Load 10000 Daily Daily Entry Load is 0%. 0 Months to 3 Months. and Amount greater than 2500001 then Exit load is 0. 0 to 2500000 then Exit load is 0.

com http://valueresearchonline. References: http://amfiindia. 2008 Last Dividend NA Declared Minimum Investment (Rs) Purchase Redemptions NAV Calculation Entry Load Exit Load 25000 Daily Daily Entry Load is 0%. 30.com http://investopedia.Type of Scheme Nature Option Inception Date Face Value (Rs/Unit) Open Ended Short Term Debt Growth Dec 4. 2001 10 Fund Manager SIP STP SWP Amit Tripathy Expense ratio(%) 0.11 as on Apr Cr.com http://mutualfundindia. 66.com • AMFI Workbook • • • • 101 | P a g e .40 Portfolio Turnover Ratio(%) NA Fund Size in Rs. Exit Load is 0%.

133–157. The persistence of risk adjusted mutual fund performance. Blake. 1995.: Asset Allocation: Management style and Performance Measurement. and Christopher R. • 102 | P a g e . Business Line) • Magazines ( Business World) • Lynch.TREYNOR J. 1965/1 • SHARPE W. Volume 50 (2). Winter 1992 • Newspapers ( Economic Times . Martin J. \Performance Persistence. Goetzmann. (2002). Harvard Business Review. and D. Musto. The Journal of Portfolio Management. Gruber.. and William N. • Elton." Journal of Finance. Stephen J. “How Investors Interpret Past Fund Returns” • Brown. Edwin J. 679-698. A. pp. Journal of Business 69. 1996.: How to Rate Management of Investment Funds.

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