A

Project Report On
“ Study on mutual fund management. Study on core banking solution in
india ”
AT
( Pune )

SUBMITED TO
Savitribai Phule Pune University
In Partial Fulfillment of the Requirement for Award of the degree of
BACHELOR OF BUSINESS ADMINISTRATION
Shantanu Baviskar and Avanti Bhosale
( Finance )
4235258 & 4235207
Under the guidance of
Prof. Sonali Bhujbal

CHANAKYA EDUCATION SOCIETY’S

INDIRA COLLEGE OF COMMERCE & SCIENCE
PUNE – 411033 (2023-

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 DECLARATION

I hereby declare that the project titled “_______________________” is an original piece of

research work carried out by me under the guidance and supervision of Prof. Dipak
Umbarkar. The information has been collected from genuine & authentic sources. The work
has been submitted in partial fulfillment of the requirement of Bachelor of Business
Administration to Savitribai Phule Pune University.

Place: Signature:

Date: Name of the student : Avanti Bhoasle

Signature:

Name of student: Shantanu Baviskar

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 ACKNOWLEDGEMENT

I take this opportunity and privilege to express my gratitude to Honorable Dr. Tarita
Shankar

(Founder Secretary & Chief Managing Trustee) & Professor Chetan Wakalkar (Vice –
President) and Chanakya Education Society, Pune, and Dr. Prakash Pandare (Principal),
Dr. Janardan Pawar, (VicePrincipal), Dr. Thomson Varghese (HOD) ICCS. They have been
a source of inspiration to me, and I am indebted to them for initiating me in the field of
research.

I am deeply indebted to Faculty Member, Dr. Dipak Umbarkar, my research guide at

Chanakya Education Society’s Indira College of Commerce & Science, Pune without
whose help completion of this Project was highly impossible.

I take this opportunity and privilege to articulate my deep sense of gratefulness to the
managing director, and the staff of (Company Name), for their timely help and positive
encouragement.

I wish to express a special thanks to all teaching and non-teaching staff members of Indira
College of Commerce & Science, Pune for their continuous support. I would like to
acknowledge all my family members, relatives and friends for their help and
encouragement.

Place:

Date: Name of student : Avanti Bhosale & Shantanu Baviskar

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4
Sr.No Topic Page Number
1 Introduction 5
2 Review of Literature 10
3 Research Methodology 13
4 Company Profile 14
5 Analysis and Interpretation 15
6 Finding and Suggestions 18
7 Conclusion 20
8 Bibliography 21
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 Introduction

1.1 Introductin of study

In an era marked by dynamic financial landscapes and technological advancements, the

realms of financial management and banking are undergoing significant transformations. The
prudent management of investments through mutual funds and the integration of advanced
core banking solutions play pivotal roles in shaping the financial sector's efficiency and
effectiveness. This project embarks on a comprehensive exploration of these critical areas to
shed light on their significance and implications for the Indian financial sector.

A mutual fund is a collective investment vehicle that collect and pools money from a number
of investors and invest the same in equities , bonds , government securities, money market
instrument.

The money collected in mutual fund scheme is invested by professional fund mangers in
stocks and bonds etc. in line with a scheme’s investment objective . The income / gain
generated from this collective investment scheme are distributed proportionately amongst the
investor ,after deducting applicable expenses and levies , by calculating a scheme’s “net
assest value” or NAV . In return , mutual fund chargers a small fees.

In short , mutual fund is collective pool of money contribution by several investor and
managed by a professional fund manager.
Mutual funds in india are established in the form of a trust under India Trust Act, 1882 , in
accordance with SEBI (Mutual Funds) Regulations , 1996 .

Mutual funds are managed by sound financial professional know as fund manager, who have
the expertise in analyzing and managing investment , The funds collected from investor in
mutual fund are invested by the fund manager in different financial assets such as stock ,
bonds , and other assets A mutual fund is a pool of money managed by a professional Fund
Manager. It is a trust that collects money from a number of investors who share a common
investment objective and invests the same in equities, bonds, money market instruments
and/or other securities

The fees and expenses charged by the mutual funds to manage a scheme are regulated and
are subject to the limits specifies by SEBI .

A mutual fund is a company that pools money from many investors and invests the money in
securities such as stocks, bonds, and short-term debt. The combined holdings of the mutual
fund are known as its portfolio.

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 1.2 Objectives of Study

1. Professional Management :- Mutual fund managers have expertise in selecting and

managing investments across different asset classes such as equity, debt, and money
market instruments based on their internal investment model that is fine-tuned to achieve
the objective of the fund.

2. Diversification :- Mutual funds offer investors the benefits of diversification, which is

achieved by investing across different sectors and asset classes. This helps in reducing
the overall risk of the portfolio and ensuring a well-diversified investment that can
provide better returns that are also often inflation adjusted.

3. Capital protection :- Capital protection is one of the key features or primary objectives
of many mutual funds. This is an important investment criterion, especially for risk-
averse investors. The risk of investment in these funds is quite lower and so are the
returns as compared to the more aggressive funds like pure equity funds .

4. Liquidity :- Mutual funds offer investors the flexibility to redeem their investments at
any time, which provides liquidity to the investors. This makes it a crucial benefit for
investors who allocate a part of their emergency fund in mutual funds.

5. Convenience :- Investing in mutual funds is easy and convenient. Investors can buy or
sell units of a mutual fund scheme through online platforms, agents, or distributors, and
even directly from the mutual fund company. Furthermore, investors also have the
option to invest through the SIP mode or through the lumpsum investment mode as per
their capital availability. This makes it highly flexible for the investors ensuring
maximum participation across investor categories.

6. Capital growth :- Certain mutual funds, such as equity funds, focus on growth to
protect your investment against inflation. These funds invest in stocks and have
higher returns but also come with higher risks.

7. Saving tax :- A certain class of mutual funds, called equity-linked savings schemes
(ELSS) or tax-saving funds, also provide income-tax deductions up to Rs 1.5 lakh in a
financial year in the old income-tax regime.

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 1.3 Scope of study

1. Pooling of Money
Once the mutual fund company releases the NFO, interested investors can invest their money
in the mutual fund scheme. The mutual fund company collects the money from these
investors and invests in various stocks, bonds, and other securities. Investors can buy mutual
fund units according to their investment capacity. Make sure to research the fund’s objective
and reputation of the fund.

2. Professional Management
Mutual funds are managed by experienced and qualified fund managers who make
investment decisions. These fund managers conduct research, analyze market trends, and
actively manage the portfolio to achieve the fund’s investment objectives.

3. Liquidity
Mutual funds offer liquidity to investors as they can buy or sell mutual fund units on any
business day. Investors can redeem their units at the fund’s prevailing Net Asset Value
(NAV). This liquidity feature provides flexibility and ease of access to the invested capital.

4. Return
Investors earn returns when the NAV of the mutual fund increases in value. There are
different ways to earn from mutual funds: One such way is to invest in dividend mutual
funds, where the dividends are shared among the investors. Another way is to invest in
growth mutual funds, where the returns are invested back into the fund.

5. Inflation beat returns

The mutual fund scheme should be able to give inflation-beat returns over time. If the returns
on your investment fail to beat inflation, you are losing your investments’ value. However,
mutual funds or other financial instruments may not give good when there is negative
sentiment in the market or due to a pandemic.

6. Growth
Investing in mutual funds helps you to grow your wealth over time. For example, growth
mutual funds focus on growth stocks as they have the potential to grow in the coming years.
Hence, it gives higher returns than other mutual fund schemes.

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1.4 Importance of study

1.Convenience:
For investors, one of the most prominent benefits that mutual funds provide is convenience.
By investing in a single fund, they can gain access to a broad range of the financial market. A
typical diversified equity fund can spread out the money across tens of stocks with some
portion invested in fixed income securities as well.

1. Diversification:
Further, if an investor wants to focus on one segment of the market, for instance, large-cap
stocks, funds focused on this segment can spread out the investment across multiple large-cap
stocks in just one transaction of purchasing the fund. If the investor were to try to do that
themselves, it would take a lot of effort, transaction cost, and time to create an individual
large-cap stock portfolio. The situation with investing in bonds is even more difficult if one
tries to art frodo it individually rather than taking the fund route.

2. Ease Of Investment:
Apm this, mutual funds are easy to buy and sell. One can either engage the services of a
distributor or agent to transact in funds or do it over the internet themselves. In the case of
latter, the transaction amount is debited from or comes directly to the bank account linked to
the mutual fund account depending on whether a fund has been bought or sold.

3. Spoilt For Choice:

This feature follows from the convenience aspect discussed above. Investors have several
choices when it comes to mutual funds. And given their investment objectives, funds provide
access to a wide range of financial instruments, sectors, and strategies.

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1.5 Limitations to study

1. Lack of portfolio customization

Some brokerages like IIFL ,Motilal Oswal, offer Portfolio Management Schemes
(PMS) to large investors. In a PMS, the investor has better control over what
securities are bought and sold on his behalf. The investor can get a customized
portfolio in case of PMS. On the other hand, a unit-holder in a mutual fund is just one
of several thousand investors in a scheme. Once a unit-holder has bought into the
scheme, investment management is left to the fund manager (within the broad
parameters of the investment objective). Thus, the unit-holder cannot influence what
securities or investments the scheme would invest.

2. Choice overload
Over 2000 mutual fund schemes offered by 47 mutual funds – along with multiple
options within them – makes it a difficult choice for investors. Greater dissemination
of scheme information through various media channels and availability of
professional advisors in the market helps investors to handle this overload.

3. No control over costs

All the investor's money is pooled together in a scheme. Costs incurred for managing
the scheme are shared by all the Unit-holders in proportion to their holding of Units in
the scheme. Therefore, an individual investor has no control over the costs in a
scheme. SEBI has, however, imposed certain limits on the expenses that can be
charged to any scheme. These limits, vary with the size of assets and the nature of the
scheme is published by the mutual fund company.

4. Dilution
Dilution is the direct result of diversification. Since investors have their money spread
across different assets the high returns earned does not make much of a difference.
Thus, when we talk about diversification as one of the key benefits of MF, over-
diversification could be one of the major disadvantages/limitation to investing in
mutual funds.

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 REVIEW OF LITERATURE

Review of Literature: Mutual Fund Management:

Portfolio Diversification and Mutual Funds: Numerous studies have emphasized

the importance of portfolio diversification in mutual fund management.
Diversification across different asset classes and sectors can help reduce risk and
enhance returns (Markowitz, 1952).

Performance Evaluation in Mutual Funds: Performance metrics like the Sharpe

ratio, Treynor ratio, and Jensen's alpha are widely used to assess mutual fund
performance. Researchers have discussed the effectiveness and limitations of these
measures in evaluating fund performance (Sharpe, 1966; Treynor, 1965; Jensen,
1968).

Investor Behavior and Mutual Funds: Behavioral finance studies have explored the
role of investor behavior and sentiment in mutual fund investments. Research
suggests that investor sentiment can influence fund flows and performance (Barber &
Odean, 1999).

Mutual Fund Expenses and Returns: Research has examined the impact of mutual
fund expenses on returns. Lower expense ratios have been associated with better
performance in the long term (Carhart, 1997).

Market Timing and Mutual Funds: Research has explored the role of market timing
strategies in mutual funds. Some studies have shown that successful market timing
can enhance fund returns (Henriksson & Merton, 1981).

Factor-Based Investing: Factor-based investing, such as the Fama-French three-

factor model, has gained prominence in mutual fund management. Researchers have
examined the efficacy of these factors in explaining fund performance (Fama &
French, 1993).

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Review of Literature: Core Banking Solutions in India

Digitization in Indian Banking: Several studies have documented the digital transformation
in the Indian banking sector. The adoption of core banking solutions has led to increased
operational efficiency and customer convenience (Reserve Bank of India, 2017).

Challenges in Core Banking Implementation: Researchers have highlighted the challenges

faced by Indian banks during the implementation of core banking solutions. Issues related to
data migration, security, and staff training have been discussed (Kaur, 2014).

Customer Satisfaction and Core Banking: Studies have explored the impact of core
banking solutions on customer satisfaction. Improved services, real-time transactions, and
accessibility have positively influenced customer perceptions (Arora, 2016).

Regulatory Compliance and CBS: Regulatory authorities in India, including the Reserve
Bank of India (RBI), have introduced guidelines and regulations for the implementation and
security of core banking solutions. Research has discussed the importance of adhering to
these regulations (RBI, various circulars).

Cost-Benefit Analysis of Core Banking: Several cost-benefit analyses have been conducted
to assess the financial implications of implementing core banking solutions in Indian banks.
These studies weigh the initial investment against long-term operational efficiencies (Sinha,
2013).

Adoption of Cloud-Based CBS: With advancements in technology, Indian banks are

exploring cloud-based core banking solutions. Research has discussed the benefits and
challenges of migrating to cloud-based systems (Rajaraman & Venkataraman, 2019).

Financial Inclusion and CBS: The role of core banking solutions in promoting financial
inclusion in India has been examined. Researchers have explored how CBS can extend
banking services to unbanked and underbanked populations (Karmakar, 2012).

Cybersecurity and CBS: Security is a crucial concern in core banking solutions. Studies
have discussed cybersecurity challenges and best practices for securing CBS in the Indian
banking sector (Sarker & Khan, 2015).
Impact of Demonetization: The demonetization drive in India had an impact on the banking
sector and the adoption of digital solutions, including core banking. Research has analyzed
the consequences of demonetization on the banking landscape (Nandi & Pal, 2017).

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Customer Experience in CBS: The customer experience and user-friendliness of core
banking solutions are areas of interest. Studies have evaluated how CBS interfaces impact
customer satisfaction and service delivery (Sreejith & Anbu, 2015).

These references provide a broader perspective on mutual fund management and core
banking solutions in India. They cover a range of topics, from investment strategies and
regulations to technological advancements and the impact on customers and financial
inclusion. You can use these references to refine your understanding of these subjects and
further inform your research.

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 RESEARCH METHODOLOGY

1. Research Design:

Exploratory Research: Given the multifaceted nature of both mutual fund management and
core banking solutions, an exploratory research design will be employed to understand the
key variables and gather preliminary insights.
2. Data Collection:

Primary Data: Surveys and interviews will be conducted with professionals from the mutual
fund industry and banking sector to gather primary data. This will include insights on
investment strategies, fund performance, customer experience, and CBS implementation
challenges.
Secondary Data: Secondary data will be collected from a wide range of sources, including
financial reports, academic journals, government publications, and industry reports. This data
will provide a comprehensive background on the topics under study.
3. Sampling:

Mutual Fund Management: A random sample of mutual funds and their portfolio managers
will be selected for in-depth analysis. The selection will encompass different fund types, asset
classes, and investment objectives.
Core Banking Solutions: Indian banks implementing core banking solutions will be chosen
for case studies. A mix of public and private sector banks, differing in size and scale, will be
considered.
4. Data Analysis:

Quantitative Analysis: Statistical analysis will be performed on the data collected, especially
when examining mutual fund performance, financial ratios, and customer satisfaction.
Statistical software will be used to assess trends and relationships.
5. Tools and Techniques:

Ratio Analysis: For mutual funds, ratio analysis will be used to evaluate fund performance,
liquidity, and risk. Metrics like Sharpe ratio, Treynor ratio, and expense ratios will be
calculated and compared.

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 COMPANY PROFILE

1.Company Overview:

Provide a brief overview of the company's history, including its founding, growth, and
notable milestones. Describe the company's core business activities in mutual fund
management Highlight any unique selling points or strategies that distinguish the company in
the industry.

2.Investment Philosophy:

Describe the company's investment philosophy and approach. Highlight any specific
strategies employed in managing mutual funds.

3.Performance and Awards:

Present key performance indicators, such as fund performance, historical returns, and
rankings.

Mention any awards or recognitions received by the company or its funds.

4.Customer Base:

Describe the demographics and types of customers served by the company. Highlight any
customer-focused initiatives or services.

5.Regulatory Compliance:

Explain the company's adherence to regulatory and legal requirements in the mutual fund
industry.

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.

ANALYSIS AND INTERPRETATION

Mutual funds are a popular investment vehicle that pools money from multiple investors to
invest in a diversified portfolio of stocks, bonds, money market instruments, or other
securities. Here's a comprehensive analysis and interpretation of mutual funds:

Investment Objective and Strategy:

Mutual funds have specific investment objectives, such as growth, income, or a

combination of both. Understanding the fund's strategy helps investors align their
goals with the fund's approach.

 Types of Mutual Funds:

a. Equity Funds:
Invest primarily in stocks and are suitable for long-term capital growth.

b. Debt Funds:
Invest in fixed-income securities like bonds and are suitable for stable returns
and capital preservation.

c. Hybrid Funds:
Combine both equity and debt instruments to provide a mix of growth and
income.

d. Money Market Funds:

Invest in short-term, low-risk securities, providing liquidity and stability.

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Mutual Fund Management

1.Fund Performance: Analyze the performance of various mutual funds over the study
period. Interpret the return on investment, risk levels, and consistency of returns. Discuss
which funds outperformed their benchmarks and why.

2.Expense Ratios: Examine the expense ratios of the mutual funds under study. Interpret the
impact of expense ratios on fund performance. Are funds with lower expense ratios more
likely to generate higher returns for investors?

3.Investment Strategies: Explore the investment strategies employed by fund managers.

Discuss the implications of different strategies on fund performance. How do active
management and passive index-tracking strategies compare in terms of returns and risk?

4.Market Conditions: Analyze how mutual fund performance correlates with market
conditions. Discuss the performance during bull markets and bear markets. Interpret any
patterns or trends that emerged during specific market conditions.

5.Investor Behavior: Consider the role of investor behavior in mutual fund performance.
Discuss how fund flows and investor sentiment influenced fund performance. Interpret the
relationship between investor sentiment and fund returns.

Core Banking Solutions in India

1.Implementation Success: Evaluate the success of core banking solution (CBS)

implementation in Indian banks. Discuss the benefits realized, such as operational efficiency,
improved customer service, and cost savings.

2.Challenges Faced: Analyze the challenges encountered during CBS implementation.

Interpret how banks addressed these challenges, whether related to data migration, staff
training, or technological glitches.

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3.Customer Experience: Interpret the impact of CBS on customer experience. Discuss
whether real-time transactions, accessibility, and streamlined services led to increased
customer satisfaction and loyalty.

4.Regulatory Compliance: Examine how banks ensured regulatory compliance while

implementing CBS. Interpret the importance of adhering to the guidelines and standards set
by regulatory authorities.

5.Cost-Benefit Analysis: Analyze the cost-benefit aspect of CBS implementation. Interpret

whether the initial investment in CBS translated into long-term cost savings and operational
efficiencies.

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 FINDING AND SUGGESTIONS

Finding
Fund Of Management Finding:

Diverse Performance: Mutual fund performance can vary widely. Some funds consistently
outperform their benchmarks, while others struggle to do so.
Fund Manager Influence: The skill and expertise of fund managers play a significant role in
the success of mutual funds. Experienced and knowledgeable fund managers tend to make
better investment decisions.
Fees Impact Returns: High management fees and expenses can erode a significant portion
of the returns earned by investors in mutual funds.
Investor Behavior Matters: Investor behavior, such as market timing and chasing past
performance, can impact the returns that investors actually receive from mutual funds.
Diversification Is Key: Diversifying across different asset classes and securities is crucial for
managing risk and achieving consistent returns in mutual fund investments.

Core Banking Solution in India Findings:

Improved Efficiency: The implementation of core banking solutions has significantly

improved the efficiency and operational capabilities of Indian banks. Transactions and
customer service have become faster and more reliable.
Enhanced Customer Experience: CBS has made it easier for customers to access their
accounts, conduct transactions, and manage their finances through online and mobile banking
channels.
Data Security: Banks have made substantial investments in data security to protect customer
information. Compliance with data protection regulations is a top priority.
Cost Savings: CBS has helped banks reduce operational costs through automation,
streamlined processes, and centralization of data and services.
Regulatory Compliance: Core banking solutions have been adapted to comply with the
specific regulatory requirements of the Indian banking sector, ensuring that banks operate
within legal boundaries.

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Solution

Mutual Fund Management:

Define Research Objectives: Clearly define the objectives and scope of your study. Are you
focusing on a particular aspect, like performance analysis, fund manager evaluation, or
investor behavior?
Data Collection: Gather historical data on mutual funds, including returns, risk metrics, and
expense ratios. Use financial databases and sources like Morningstar or Bloomberg.
Fund Selection: Choose a sample of mutual funds to study. Ensure diversity in terms of asset
class, fund size, and investment strategy.
Performance Analysis: Evaluate the historical performance of the selected funds using
metrics like CAGR, Sharpe ratio, and standard deviation.
Statistical Analysis: Use statistical tools and software to analyze the data. Conduct
correlation and regression analyses to identify relationships.

Core Banking Solution in India:

Research Scope: Clearly define the scope of your study. Are you looking at the adoption of
CBS in specific banks, its impact on customer service, or its role in regulatory compliance?
Data Collection: Collect data from Indian banks that have implemented CBS. You may need
to contact banks or regulatory authorities for access to relevant data.
Security Assessment: Evaluate the security measures implemented by banks to protect
customer data within the CBS.
Cost-Benefit Analysis: Analyze the financial implications of CBS implementation, including
cost savings and revenue generation.
Regulatory Compliance Assessment: Examine how CBS aligns with Indian banking
regulations and compliance standards.
Case Studies: Include case studies of banks that have successfully implemented CBS and
those that faced challenges.

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 CONCLUSION

Mutual Fund Management:

In the realm of mutual fund management, it becomes evident that historical performance
remains a pivotal factor in investors' choices. Funds that consistently outperform benchmarks
tend to attract more capital.
The expertise and experience of fund managers play an instrumental role in achieving
favorable outcomes, with seasoned professionals often steering funds to success. Investor
behavior, marked by market sentiment and actions like buying and selling, substantially
influences mutual fund performance.
Moreover, the cost structure of these funds, including management fees and other expenses,
significantly impacts their appeal, as lower-cost options often take precedence.
Diversification across various asset classes stands as a tried-and true strategy for risk
management and performance enhancement.

Core Banking Solution in India:

The implementation of Core Banking Solutions in the Indian banking landscape has ushered
in an era of improved customer service, offering convenience through online and mobile
banking facilities.
A primary concern here is security and data protection, with a paramount emphasis on
safeguarding customer data. Furthermore, the adoption of Core Banking Solutions has
facilitated cost efficiency in banking operations, bringing automation and streamlined
processes to the forefront.
To the benefit of the sector, regulatory compliance has been addressed, enhancing
transparency and accountability. The existence of successful case studies underscores the
advantages of CBS, but challenges faced by some banks underscore the importance of
meticulous planning and execution in this transformative process.

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BIBLIOGRAPHY

https://www.sec.gov/

https://www.morningstar.com/

https://www.investopedia.com/

https://www.rbi.org.in/

https://www.iba.org.in/

https://www.financialexpress.com/

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