A

INTERNSHIP PROJECT REPORT

ON

VARIOUS INVESTMENT ALTERNATIVES- MUTUAL FUND- ITS

TYPES, SIP, NAV CALCULATIONS-
PICK FIVE DIFFERENT MUTUAL FUND AND THEIR 5 YEAR
PERFORMANCES

SUBMITTED BY: SUBMITTED TO:

NANDINI HANS CORIZO INTERNSHIP
(FINANCE)
 ACKNOWLEGEMENT

I would like to express my sincere appreciation and gratitude to all those who have contributed to
the completion of this report. Without their valuable support, expertise, and collaboration, this
achievement would not have been possible.

First and foremost, I would like to thank my mentor for providing guidance and valuable insights
throughout the entire process. Their expertise and feedback have been instrumental in shaping
the content and structure of this report.

Furthermore, I would like to acknowledge the individuals and organizations who provided
assistance, resources, and access to relevant information. Their cooperation and willingness to
share their expertise were invaluable in enhancing the accuracy and relevance of the report.
 Table of the Content
1. Summary
2. Introduction
3. Alternative Investment Fund
What are Alternative Investment Funds
5. Types of Alternative Investment
6. What are a Mutual funds?
How are mutual funds priced?
How are returns calculated for mutual funds.
7. Types of mutual fund
8. Systematic investment plan (SIP) What is
SIP?
Working of SIP
Types of SIPS
9. How to calculate NAV of mutual fund. The NAV
of mutual fund
Calculate NAV
10. Five different mutual fund and their 5 years performance
 Summary
This reading provides a comprehensive introduction to alternative investments. Some key
points of the reading are as follows:

Alternative investments are supplemental strategies to traditional long-only positions in

stocks, bonds, and cash. Alternative investments include investments in five main
categories: hedge funds, private capital, natural resources, real estate, and infrastructure.
Alternative investment strategies are typically active, return-seeking strategies that also often
have risk characteristics different from those of traditional long-only investments.
Private Capital is a broad term for funding provided to companies that is sourced from neither
the public equity nor debt markets. Capital that is provided in the form of equity investments
is called private equity, whereas capital that is provided as a loan or other form of debt is called
private debt.
Introduction
In this section, we explain what alternative investments are and why assets under management in
alternative investments have grown in recent decades. We also explain how alternative
investments differ from traditional investments, and we examine their perceived investment
merit. We conclude this section with a brief overview of the various categories of alternative
investments; these categories will be explored further in later sections.

* Alternative investments often have many of the following characteristics:

* Narrow specialization of the investment managers
* Relatively low correlation of returns with those of traditional investments.
* Less regulation and less transparency than traditional investments
* Limited historical risk and return data.
* Unique legal and tax considerations.
* Higher fees, often including performance or incentive fees Concentrated
portfolios.
Alternative Investment Funds
Alternative investment funds are alternate options for traditional investment (stocks,
bonds, and cash). The alternative investment offers an 11-13% return to retail investors
and these alternative investment funds in India offer returns that are way better than
traditional investments.
These are effective investment options that include a wide range of investment options and are
not linked to the stock market or even the bond market. Investors can invest in alternative
investment funds to diversify their investments.
Also, it acts as an asset hedge. Investors who belong to HNI (high net worth individuals),
family offices, and rich retirees use AIF funds to earn passive income and regular income.
In this article, we are going to learn about what are alternative investment funds in India, the
types of alternative investment funds in India.

What are Alternative Investment Funds?

Alternative investment funds refer to funds that include hedge funds, venture capital, private
equity, angel funds, real estate, commodities, collectibles, structured products, etc. Alternative
investment funds are an alternative to traditional investment options (stocks, bonds, and cash).
Investors can invest in AIF funds to diversify their investment and get benefits. Generally,
investors having high net worth, retail investors, and individuals prefer to invest in AIF
funds. However, they cannot be bought and sold easily unlike conventional investments.
The government is working to make these alternative investment funds a lot more
transparent.
Types of Investment Alternatives
SEBI has categorized Alternative Investment Funds into 3 categories:

Category 1: These funds invest in SMEs, start-ups, and new economically viable
businesses with high growth potential.

1. Venture Capital Fund

New-age entrepreneurial firms that require large financing during their initial days can
approach VCF. VCF can help them in overcoming the financial crunch. These funds invest in
start-ups with high growth prospects. HNIs investing in VCFs adopt a high-risk, high-return
strategy while allocating their resources.
These invest in budding start-ups and are called angel investors. They bring early business
management experience with them. These funds invest in those start-ups that do not receive
funding from VCF. The minimum investment by each angel investor is Rs 25 lakh.

2. Angel Fund
These invest in budding start-ups and are called angel investors. They bring early business
management experience with them. These funds invest in those start-ups that do not receive
funding from VCF. The minimum investment by each angel investor is Rs 25 lakh.

3. Infrastructure Fund
This fund invests in infrastructure companies, i.e., those involved in railway construction, port
construction, etc. Investors who are bullish on infrastructure development invest their money in
these funds.

4. Social Venture Fund

Funds investing in a socially responsible business are social venture funds. They are a kind of
philanthropic investment but have a scope of generating decent returns for investors.
Category 2

5. Private Equity Fund

A private equity fund invests in unlisted private companies. It is difficult for unlisted
companies to raise funds by issuing equity and debt instruments. Usually, these funds come
with a lock-in period which ranges from 4 to 7 years.

6. Debt Fund
This fund primarily invests in debt securities of unlisted companies. Usually, such companies
follow good corporate governance models and have high growth potential. They have a low
credit rating, which makes them a risky option for conservative investors. As per SEBI
guidelines, money accumulated by debt funds cannot be used to give loans.

7. Fund of Fund
Such funds invest in other Alternative Investment Funds. They do not have their investment
portfolio but focus on investing in different AIFs.

Category 3

8. Private Investment in Public Equity Fund

A PIPE invests in shares of publicly traded companies. They acquire shares at a discounted
price. Investment through PIPE is more convenient than going for a secondary issue owing to
less paperwork and administration.
9. Hedge Fund
Hedge Fund pool money from accredited investors and institutions. These funds invest in
both domestic and international debt and equity markets. They adopt an aggressive
investment strategy to generate returns for investors.
However, hedge funds are expensive as fund managers can charge an asset management fee of
2% or more. They can also levy 20% of the returns generated as their fees.
What Is a Mutual Fund?
A mutual fund is a financial vehicle that pools assets from shareholders to invest in securities
like stocks, bonds, money market instruments, and other assets.
Mutual funds are operated by professional money managers, who allocate the fund's assets
and attempt to produce capital gains or income for the fund's investors.
A mutual fund's portfolio is structured and maintained to match the investment objectives
stated in its prospectus.
Mutual funds give small or individual investors access to professionally managed portfolios of
equities, bonds, and other securities. Each shareholder, therefore, participates proportionally in
the gains or losses of the fund.
Mutual funds invest in a vast number of securities, and performance is usually tracked as the
change in the total market cap of the fund— derived by the aggregating performance of the
underlying investments.
Most mutual funds are part of larger investment companies such as Fidelity Investments,
Vanguard, T. Rowe Price, and Oppenheimer.
A mutual fund has a fund manager, sometimes called its investment adviser, who is legally
obligated to work in the best interest of mutual fund shareholders.

How Are Mutual Funds Priced?

The value of the mutual fund depends on the performance of the securities in which it invests.
When buying a unit or share of a mutual
fund, an investor is buying the performance of its portfolio or, more precisely, a part of the
portfolio's value.
Investing in a share of a mutual fund is different from investing in shares of stock. Unlike
stock, mutual fund shares do not give their holders any voting rights.
A share of a mutual fund represents investments in many different stocks or other securities.
The price of a mutual fund share is referred to as the net asset value (NAV) per share, sometimes
expressed as NAVPS.
A fund's NAV is derived by dividing the total value of the securities in the portfolio by the
total amount of shares outstanding.
Outstanding shares are those held by all shareholders, institutional investors, and company
officers or insiders.

How Are Returns Calculated for Mutual Funds?

When an investor buys Apple stock, they are buying partial ownership or a share of the
company. Similarly, a mutual fund investor is buying partial ownership of the mutual fund and
its assets.
Investors typically earn a return from a mutual fund in three ways, usually on a quarterly or
annual basis:
1. Income is earned from dividends on stocks and interest on bonds held in the fund's
portfolio and pays out nearly all of the income it receives over the year to fund owners in
the form of a distribution.
2. If the fund sells securities that have increased in price, the fund realizes a capital gain,
which most funds also pass on to investors in a distribution.

3. When the fund's shares increase in price, you can then sell your mutual fund shares for
a profit in the market.
Types of Mutual Funds
There are several types of mutual funds available for investment, though most mutual funds
fall into one of four main categories which include stock funds, money market funds, bond
funds, and target- date funds.

1. Stock Funds
As the name implies, this fund invests principally in equity or stocks. Within this group are
various subcategories. Some equity funds are named for the size of the companies they
invest in: small-, mid-, or large-cap. Others are named by their investment approach:
aggressive growth, income-oriented, value, and others.
Equity funds are also categorized by whether they invest in domestic (U.S.) stocks or foreign
equities.
To understand the universe of equity funds is to use a style box, an example of which is below.
Funds can be classified based on both the size of the companies, their market caps, and the
growth prospects of the invested stocks. The term value fund refers to a style of investing
that looks for high- quality, low-growth companies that are out of favor with the market.
These companies are characterized by low price-to-earnings (P/E) ratios, low price-to-book
(P/B) ratios, and high dividend yields.

2. Bond Funds
A mutual fund that generates a minimum return is part of the fixed income category. A fixed-
income mutual fund focuses on investments that pay a set rate of return, such as government
bonds, corporate bonds, or other debt instruments.
The fund portfolio generates interest income, which is passed on to the shareholders.
Sometimes referred to as bond funds, these funds are often actively managed and seek to buy
relatively undervalued bonds in order to sell them at a profit.
These mutual funds are likely to pay higher returns and bond funds aren't without risk.
For example, a fund specializing in high-yield junk bonds is much riskier than a fund that
invests in government securities.

3. Index Funds
Index Funds invest in stocks that correspond with a major market index such as the S&P
500 or the Dow Jones Industrial Average (DJIA).
This strategy requires less research from analysts and advisors, so there are fewer expenses
passed on to shareholders and these funds are often designed with cost-sensitive investors in
mind.
4. Balanced Funds
Balanced funds invest in a hybrid of asset classes, whether stocks, bonds, money market
instruments, or alternative investments.

The objective of this fund, known as an asset allocation fund, is to reduce the risk of
exposure across asset classes.
Some funds are defined with a specific allocation strategy that is fixed, so the investor can
have a predictable exposure to various asset classes.
Other funds follow a strategy for dynamic allocation percentages to meet various investor
objectives.
This may include responding to market conditions, business cycle changes, or the
changing phases of the investor's own life.

5. Money Market Funds

The money market consists of safe, risk-free, short-term debt instruments, mostly government
Treasury bills. An investor will not earn substantial returns, but the principal is guaranteed.
A typical return is a little more than the amount earned in a regular checking or savings account
and a little less than the average certificate of deposit (CD).

6. Income Funds
Income funds are named for their purpose: to provide current income on a steady basis.
These funds invest primarily in government and high-quality corporate debt, holding
these bonds until maturity to provide interest streams.
While fund holdings may appreciate, the primary objective of these funds is to provide steady
cash flow to investors.
As such, the audience for these funds consists of conservative investors and retirees.
7. International/Global Funds
An international fund, or foreign fund, invests only in assets located outside an investor's
home country. Global funds, however, can invest anywhere around the world.
Their volatility often depends on the unique country's economy and political risks.
However, these funds can be part of a well-balanced portfolio by increasing diversification,
since the returns in foreign countries may be uncorrelated with returns at home.

8. Specialty Funds
Sector funds are targeted strategy funds aimed at specific sectors of the economy, such as
financial, technology, or healthcare.
Sector funds can be extremely volatile since the stocks in a given sector tend to be highly
correlated with each other.

Systematic investment plan

Introduction
A systematic investment plan (SIP) is good tool that retail investors can utilize to optimize
their investment strategy. SIP is nothing but a simple method of investing a fixed sum of
money in a specific investment scheme. On a regular basis, for a pre-determined period of
time. A recurring deposit with the post office or a recurring deposit with a bank also a SIP.
Systematic investment plan was already famous and proven in mutual fund context but now
SIP has also come directly into equity stocks which is essentially individual stocks. Equity
SIP is a new facility through which you can buy a script for a regular interval over a period of
time for specified amount or for a specified quantity.
Investing in mutual funds is not everybody’s cup of tea. Being dependent on factors such as a
fluctuating stock market and risking your hard-earned money for a measly profit does not
really help. If you are a disciplined investor however, and are interested in mutual funds, then the
equity systematic investment plan (SIP) would work well for you.
SIP requires you to invest a particular amount in a specific mutual fund scheme. In
comparison, it functions must be like a recurring deposit. You can plan a savings scheme for
yourself and commit a particular sum of money each month on a pre-fixed date to the
scheme. You can begin with as low as Rs 500 in ELSS (equity linked saving schemes)
schemes and move on to Rs 1000 a month for other diversified schemes. SIP follows a simple
mantra – buy when high and sell when low. This is a simple way to win in the stock market.
However, the market needs to be timed well and this will take some time to figure out for the
novice or busy player. That’s where SIP with its monthly pay scheme comes into the picture.
Putting in a sum of money each month will ensure that you have something in when the market
is high, and when it is low securing your position in an unstable market.

WHAT IS SYSTEMATIC INVESTMENT PLAN

A systematic investment plan (SIP) is a vehicle offered by mutual funds to help investors save
regularly. It is just like a recurring deposit with the post office or bank where you put in a small
amount every month. The difference here is that the amount is invested in a mutual fund.
Systematic investment plan (SIP) is a method of investing in mutual funds wherein an investor
chooses a mutual fund scheme and invests the fixed amount his choice at fixed intervals.
SIP investment plan is about investing a small amount over time rather than investing a
onetime huge amount resulting in a higher return.
SIP mainly helps us to get addicted to an investment principal Income.
- savings = expenditure, instead of following the principle of Income – expenditure =savings.

SIP helps investors to overcome the problem of ‘when’ to invest in the equity markets as
irrespective of the state of the market an investor is always invested in. SIP takes away the
decision-making and converts it into a mechanized one. The lowering of risk, by entering at
different time periods, however, has the disadvantage of “averaging” out returns.
Working of SIP
Let us take an example to understand how an SIP works. Suppose „X‟ decides to invest in
mutual fund through SIP. He commits making a monthly investment of Rs 1000 for a period
of twelve months (starting 1st January 2006) in a fund named „ABC‟. The payment can be
made by issuing twelve post-dated cheques of Rs 1000 each or through ECS facility (if
available).
DATE MONTHLY INVESTMENT NAV NO.OF UNITS
1-January Rs 1000 46.29 21.603

1-Febrary Rs 1000 48.08 20.799

1-March Rs 1000 52.78 18.947

1-April Rs 1000 56.36 17.743

1-May Rs 1000 58.42 17.117

1-June Rs 1000 56.42 17.724

1-July Rs 1000 62.14 16.093

1-August Rs 1000 67.58 14.797

1-September Rs 1000 71.7 13.947

1-October Rs 1000 76.19 13.125

1-November Rs 1000 83.97 11.909

1-December Rs 1000 89.92 11.121

Summary
Monthly investment: 1000 Period of
investment: 12 months

Total amount invested: Rs12000.

Total number of units credited to ‘X’: 194.925 Average cost/unit: Rs
61.5621
Types of systematic investment plan
(1) Top-up SIP

This SIP allows you to increase your investment amount periodically giving you the flexibility
to invest when you have a higher income or available amount to be invested. This also helps in
making the most out of the investments by investing in the best and high performing funds at
regular intervals.
(2) Flexible SIP
As the name suggests this SIP plan carries flexibility of amount you want to invest.an investor
can increase or decrease the amount to be invested as per his own cash flow needs are
preferences.
(3) Perpetual SIP
This SIP plan allows you to carry on the investments without an end to the mandate date.
Generally, an SIP carries an end date after 1 year, 3 year or 5 years of investment. The
investor can, hence, withdraw the amount invested whenever he wishes or as per his
financial goals.

How To Calculate NAV of Mutual Fund

You can calculate the NAV of a mutual fund by dividing the total net assets of the fund by the
total number of units issued to investors.

When it comes to investing, certain terms have special significance. For mutual fund
investors, net asset value (NAV) is one such term. Whenever you attempt to buy or sell mutual
fund units, this acronym comes up.
In simple terms, NAV is the per-unit market value of a mutual fund. Read on to find out how
to calculate the NAV of a mutual fund and more.

THE NAV OF MUTUAL FUNDS

Mutual funds pool the money collected from investors and reinvest it on their behalf in the
securities market. NAV is the per-unit market value of all the securities held by a mutual fund
scheme. If you are a mutual fund investor, the fund assigns units to you based on the amount
you invest.

CALCULATE NAV
We calculate the NAV of a mutual fund by dividing the total net assets by the total number of
units issued. To get the total net assets of a fund, subtract any liabilities from the current value
of the mutual fund’s assets and then divide the figure by the total number of units outstanding.
The resulting figure is the NAV of the mutual fund.
So, the mathematical formula for NAV is:
Assets – Debits / Number of outstanding units = Net asset value (NAV)
The NAV of a mutual fund is always calculated at the end of the market day. This is because
the market value of securities changes on a daily basis. Hence, the NAV of a mutual fund also
changes daily.
Example 1
Suppose the market value of the securities of a mutual fund scheme is Rs 500 lakh. The mutual
fund issues 10 lakh units of Rs 10 each to its investors. So, the NAV per unit of the fund is
Rs 50.
FIVE DIFFERENT MUTUAL FUND AND THEIR 5 YEAR
PERFORMANCE

Returns have always been the basic benchmark for investors while picking an investment.
These indicate how much the fund has lost or gained during a particular investment duration.

Here’s a list of 5 Mutual Funds that would triple your money in just 5 years.

Reliance Small Cap Fund

This is a small cap equity oriented mutual fund launched on January 1, 2013. It is a fund with
high risk and has given a return of 28.87% since its launch.

This fund has given a stellar 39.3% YoY return in the last 5 years.
So, if you would have invested ₹10,00,000 in this fund 5 years back, your money would value at
₹52,45,121 currently.

Duration Return
1 Year 13.1%
3 Year 24.1%
5 Year 39.3%

HDFC Small Cap Fund – Direct – Growth

This is a small cap equity oriented mutual fund launched on January 1, 2013. It is a fund with
moderately high risk and has given a return of 21.41% since its launch.
This fund has given a 26.1% YoY return in the last 5 years.
So, if you would have invested ₹10,00,000 in this fund 5 years back, your money would be
valued at ₹31,88,419 currently.

Duration Return
1 Year 23.4%
3 years 25.0%
5 years 26.1%

Invesco India Multi-Cap Fund – Direct – Growth

This is a multi-cap equity oriented mutual fund launched on January 1, 2013. It is a fund with
moderately high risk and has given a return of 21.70% since its launch.
This fund has given a brilliant 28.4% YoY return in the last 5 years. So, if you would have
invested ₹10,00,000 in this fund 5 years back, your money would value to ₹34,89,998,
currently.

Duration Return
1 Year 9.3%
3 Year 15.9%
5 Year 28.4%

Mirae Asset Emerging Blue-chip Fund – Direct – Growth

This is a large and mid-cap equity oriented mutual fund launched on January 1, 2013. It is a
fund with moderately high risk and has given a return of 26.62% since its launch.

This fund has given an exceptional 34.2% YoY return in the last 5 years.
So, if you would have invested ₹10,00,000 in this fund 5 years back, your money would value
at ₹43,52,738, currently.

Duration Return
1 Year 7.3%
3 Year 21.2%
5 Year 34.2%

Principal Emerging Blue-chip Fund – Direct – Growth

This is a large and mid- cap equity oriented mutual fund launched on January 1, 2013. It is a
fund with moderately high risk and has given a return of 26.62% since its launch.

This fund has given an excellent 31.1% YoY return in the last 5 years.

So, if you would have invested ₹10,00,000 in this fund 5 years back, your money would value
₹38,72,696 currently.

Duration Return
1 Year 7.7%
3 Year 19.9%
5 Year 31.1%
Thank you