Analysis of Portfolio of Mutual Funds

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Portfolio Management In Mutual Funds A Project On PORTFOLIO MANAGEMENT IN MUTUAL FUNDS In partial fulfillment of the requirement of two years full time Masters of Business Administration (MBA) Programme (2008-2010) Of Christ University Institute of Management, Bangalore-560029 SUBMITTED BY : AARNESH KARAMCHANDANI (08 PG 0122) UNDER THE GUIDANCE OF:

Transcript of Analysis of Portfolio of Mutual Funds

Page 1: Analysis of Portfolio of Mutual Funds

Portfolio Management In Mutual Funds

A

Project

On

PORTFOLIO MANAGEMENT IN MUTUAL

FUNDS

In partial fulfillment of the requirement of two years full time

Masters of Business Administration (MBA) Programme (2008-2010)

Of Christ University Institute of Management, Bangalore-560029

SUBMITTED BY :

AARNESH KARAMCHANDANI

(08PG0122)

UNDER THE GUIDANCE OF:

PROF. T.S. RAMACHANDRAN

C ONTENT

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CertificateDeclarationPrefaceAcknowledgementResearch MethodologyExecutive Summary

1 Introduction to Mutual Fund 2 Investors portfolio

2.1. Fixed Return Options2.2. Variable Return Options

3 Concept of mutual funds4 Types of mutual fundsBy structureBy investment objective

5 Different styles of Mutual Funds6 Process of Mutual Fund7 Net Asset Value (NAV)8 Companies in India9 Portfolio Management10 Portfolio Management Process11 Types of Investors

11.1. Portfolio for Cautious Investor11.2. Portfolio for Balance Investor11.3. Portfolio for Aggressive Investor

12 Measurement of Returns on Portfolios13 Scheme Portfolio

13.1. HDFC Equity Fund13.2. HDFC Core & Satellite Fund13.3. Reliance Growth fund13.4. Prudential ICICI Growth Fund13.5. DSP Tiger Fund13.6. Kotak Opportunity Fund

14 Conclusion15 Bibliography

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DECLARATION

I, hereby, declare that the Project titled “Portfolio

Management in Mutual Funds” is original to best to my knowledge

& has not published elsewhere. This is for the purpose of partial

fulfillment of Christ University Institute of Management requirement

for the award of the degree of Master of Business

Administration.

AARNESH KARAMCHANDANI

Date:

PREFACE

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Investing money where the risk is less has always been risky to decide. The

first factor, which an investor would like to see before investing, is risk factor.

Diversification of risk gave birth to the phenomenon called Mutual Fund.

We are preparing comprehensive report of Mutual Fund industry in India. The

basic idea of assignment of this project is to augment our knowledge about

the industry in its totality and appreciate the use of an integrated loom. It is

concerned the environmental issues and tribulations. This makes us more

conscious about Industry and its pose and makes us capable of analyzing

Industry’s position in the competitive market. This may also enhance our

logical abilities.

The Mutual Fund Industry is in the growing stage in India, which is evident

from the flood of mutual funds offered by the Banks, Financial Institutes &

Private Financial Companies.

There are various aspects, which have been studied in detail in the project

and have been added to this project report.

Hope this report would help one understand the mutual Industry of India in

detail.

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ACKNOWLEDGEMENT

I am indebted to a multitude of persons who have provided me with valuable

help during our endeavor of research. The project would not have seen the

illumination of the day without the efforts of the many who managed the show

in the wings. I am thankful to all people who have put in great efforts and gave

me guidance for the successful completion of the project.

I am indeed grateful to MR. PRASHANT UKANI (CLUSTER HEAD – B2B

BUSINESS, REGIONAL OFFICE, ANGEL BROKING LTD., RAJKOT) for

providing me the guidance, advice, constructive suggestions and faith in my

ability inspired to perform well who gave me a valuable opportunity of

involving our self in studying this project.

Preparing a project of this nature is an arduous task and I am fortunate

enough to get support from a large number of people to whom we shall

always remain grateful.

Finally, I thank all those who directly and indirectly contributed to this project.

AARNESH KARAMCHANDANI

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EXECUTIVE SUMMARY

As a part of my study curriculum it is necessary to conduct a grand project. It provides us an opportunity to understand the particular topic in depth and which leads to through to that topic. My topic for the grand project is titled as “Portfolio management in mutual funds performance” in which emphasis given to the study of different mutual funds in respect to the risk and return involved in it.

Since mutual funds are a relatively recent phenomenon in India, general public or investors don’t have clarity about this concept. As we have started witnessing the concept of more saving now being entrusted to the funds than to keeping it in banks. So it is very important to manage investor’s portfolio efficiently. By efficient we mean which reduces the risk of investor and increases return on the other hand.

This project is all about how to manage an investor’s portfolio in mutual fund. How to diversify the investments into different schemes of funds. To manage client’s portfolio efficiently we first need to understand the industry, current economic condition of the economy, investor’s behavior, their objective, risk apatite.

This report has divided into two phases. First phase covered investor’s portfolio part where we have included, Introduction of mutual funds, Indian mutual fund industry, Investment options available with individuals and at last techniques of managing a client’s portfolio in mutual funds.

Second phase of the report covered scheme’s portfolio part, where we have compared HDFC Equity Fund and HDFC Core & Satellite Fund with their competitors. It also included fund’s portfolio part where we have given information about the different funds available to investor for investment

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RESEARCH METHODOLOGY

Primary Objectives

The main objective of this study is doing an In-depth analysis of Mutual Fund portfolio by taking sample of funds and comparing it with it others

Secondary objectives

- to understand the portfolio management process in mutual fund- To know the effects of political, economical, social and technological

factors on Mutual Fund Industry in India.- Evaluating fund performance

Collection of data

For the complete study I required data of Mutual Fund and getting from the secondary data base.

Sources of the data collection will be,

(1) Internet(2) Various magazines/bulletins(3) News papers(4) Related books

Limitations

It is based on Secondary Data. Time Constraint Lack of resources

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INTRODUCTION

Economic liberalization and globalization of the Indian markets began in 1991.

This meant that the Indian consumers had access to imported goods which

resulted in fall of prices of domestic goods due to high competition. This also

meant that lower interest rates and more importantly transfer of risk from

government to the individuals, forcing them to protect their investments them

self.

Investors have variety of options for investments. Some of them are providing

fixed rate of returns are some of them provide variable rate of returns. Many

had investments with UTI, Company fixed deposits, and Bank fixed deposits

that were offering high returns that now they are starting falling after

globalization and liberalization.

There are some investors who are active. They are the ones who act promptly

and make educated, informed decisions about market. They done their own

research and understand the factors which may have effect on their

investments in future. On the other hand some investors who are

apprehensive and will take action only when they can see tangible merits on

the change.

As every individual is different, their objectives behind investments also differ

from person to person. Their objectives can for fixed return, capital

appreciation, tax planning or current income. The investment decision will

mainly depend upon the objective of investor. He or she needs to design their

portfolio according to their risk and return profile. The individual should start

by specifying investment goals. Once these goals are established, the

individual should be aware of the mechanics of investing and the environment

in which investment decision are made. These include the process by which

securities are issued and subsequently bought and sold, the regulations and

tax laws that have been enacted by various levels of government, and the

sources of information concerning investment that are available to the

individuals.

Designing a portfolio is not simple task. Ones individual has decided about the

type of investment then he or she needs to decide portfolio in that category.

There are various ways of maintaining portfolio of individual.

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Phase IInvestor’s Portfolio

What is an Investment?An investment is the use of capital to create more money through the acquisition of a security that promise the safety of the principal and generate a reasonable return.

Various Investment OptionsSavings form an important part of the economy of any nation. With the saving invested in various options available to the people, the money acts as the driver for growth of the country. Indian financial scene too presents a plethora of avenue to the investors. Though certainly not the best or deepest of markets in the world, it has reasonable options for an ordinary man to invest his savings.There are basically two kinds of investments. One that gives returns at fixed rate and other where the rate of return is depending upon the certain factors of the economy.

1. Fixed Return Options Post office monthly income scheme

Public provident fund

Bank fixed deposits

Government securities or gilts

RBI taxable bonds

Insurance

Company fixed deposits

Infrastructure bonds

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2. Variable Return Options Mutual Funds

Share and Stock market

1. Primary invested in equity (IPO)

2. Secondary market investment in equity

3. Derivative, Futures and Options

Gold

Real estate

Foreign exchange assets

3. UNIT LINKED INSURANCE PLANS1. ULIP capital secure fund.

2. ULIP balanced fund.

3. ULIP growth fund

4. ULIP equity fund

5. Pension capital secure fund

6. Pension balanced fund

7. Pension growth fund

1. Fixed Return Options

Under fixed return investments, investor will get fixed return on their investments. The rate of return is pre decided at the time of investment. Rate of return can be calculated on per annum basis or at completion of particular time period.

a. Post Office Monthly Income Scheme:

In this scheme an investment can be made by individuals in single or joint names maximum of Rs. 6 lakhs (Rs.3 lakhs per person) with an interest of 8% p.a. in a monthly income scheme. This will give you Rs. 4000/- per month if you invested the maximum amount. In addition, this investment will fetch you a taxable bonus of 10% on the deposit maturity (i.e. after 6 years)

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b. Other Post Office Scheme

Kisan Vikas Patra:

Money can be doubled in 8 years and 7 months. There is no upper limit on the amount that you invest. There are no tax benefits for the investments made under this scheme. The rate of interest works out to a compounded annual return of about 8.4%. There are no tax deductions at source and banks loans are available against Kisan Vikas Patra. Interest is paid at maturity and cannot be claimed prior to maturity.

Senior Citizen Savings Scheme (2004):

As per the 2004-2005 budgets, the Government has announced a new Senior Citizen Savings Scheme. It has been launched only through designated Post Offices from the 2nd August, 2004. it for the individuals who have attained the age of 60 years or above on the date of opening of an account or who have attained the age of 55 years or more but less than 60 years, and who have retired under Voluntary Retirement scheme or a Special Voluntary Retirement scheme on the date of opening of an account. The main feature of the scheme is that is carries an interest of 9% p.a. (taxable) on the deposits. Deposits can be a minimum of Rs. 1000 and maximum of Rs. 15 lakhs, to be held for a period of 5 years and extendable for further 3 years. It can also be prematurely withdrawn after one year with some deductions. Interest qualifies for deduction u/s 80L.

c. Public Provident Fund:

The rate of public provident fund is 8.5% p.a. currently. This is basically a long term investment opportunities (maturity 15 year) as the entire amount that is accumulated in this account can be withdrawn entirely only after 15 years. Partial withdrawal is allowed only after 5 years. Interest is exempt from income tax and contributions are eligible for tax deductions.

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d. Bank Fixed Deposits:

Bank fixed deposits yield will vary from bank to bank but they are more or less streamlined. The yields are currently in the region of 5.5% to 6.5% per annum for deposits ranging from 30 days to five years. All the schedule banks are covered by DICGC (Deposit Insurance and Credit Guarantee Corporation) which means that up to 1 lakh deposited in a bank per person is absolutely safe and insured even if the bank collapse.

HDFC Bank FD Interest Rate in % p.a.

7 days-14 days 3.515 days-29days 4.2530days-45days 4.2546days-60days 4.561days-90days 4.7591days-180days 56month 1 day-1 year

5.5

1 year 1 day-2 years

6

2 year1 day- 3 years

6.25

3 year 1 day- 5 years

6.25

5 year 1 day-8 years

6.5

e. Government Security or Gilts:

Government security and gilts are totally secure. Government bonds are issued by the government of India periodically. These are now available in the secondary market through satellite dealers and banks. They are known to yield 5% to 6% per annum. Interest exceeding Rs. 2500 is liable for TDS at 10.455%.

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f. RBI Taxable Bonds:

These are 8% saving bonds which are taxable. The maturity is after 6 years and there is no upper limit to investment is these bonds. The interest accrued on these bonds is taxable under the Income Tax Act, 1961.

Key Rates Current 1 Month ago1 yr G-sec 6.81% 6.72%5 yr G-sec 7.22% 6.96%10 yr G-sec 7.41% 7.31%5 yr AAA 8.25% 7.77%

g. Insurance:

There are several types of insurance policies available in the market today through various players. Life insurance is the most sought after cover life it also offer a tax benefit for the amount of premium paid in a particular year. Though insurance is considered as expenditure, it became an investment option.The insurance policies available in the market are either pure insurance or a combination of the three basic types of life insurance policies namely, Term, Whole and Endowment. Term assurance policy is purely protection policy with no investment elements. Whole life and Endowment policies are different as a payout is certain in these policies. A Whole life policy pays out on the death of the life assured, whenever that occurs and in Endowment policy pay will be on maturity date or earlier death. There is one more type of insurance policy is so popular these days is UNIT Link Insurance under which premium amount will be invested in to equity market via mutual fund investment.

h. Company Fixed Deposits:

Company fixed deposits was a highly popular investment vehicle in the past. In today’s changing scenario where the corporate world has access to cheaper funds from sources all over the world, the rate of interest offered by good companies make this a less attractive investment vehicle.

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i. Infrastructure Bonds:

An infrastructure bond is a tax saving bond that was innovated in order to provide funds for the development of the key infrastructure projects. Thus, investors in these bonds apart from the material benefits in term of tax saving, have the higher satisfaction of having contributed to the development of the country’s infrastructure. The rate of return on such bonds is between 5 to 5.5%. The bonds have lock in period of 3 years.

2. Variable Return Options

a. Mutual Funds:

A mutual fund is a company that pools the money of many investors to invest in a variety of different securities. Investment may be in stocks, bonds, debentures, money market or combination of these. These securities are professionally managed on the behalf of investor, by the fund manager.

b. Shares and the Stock Market:

An equity share is a certificate or a book entry that represents the single unit of ownership in a company or its business. They are sold either directly by the company or they can be acquired through broker from the stock market. By purchasing a share of a company, an individual gets a ownership rights, right to vote and share in the company’s future profits and losses.

Primary Market Investment in Equity (IPO)

The primary market is a place where the new offerings by companies are made as an Initial Public Offering (IPO) IPO’s are offering made by the company for the first time in the market. Such offers to the public can be at par or can be at premium.

Secondary Market Investment in Equity:

The stock exchange is a place where buyers and sellers meet to trade in shares in an organized manner. There are at present 26 recognized stock exchanges in the country and are governed by security board of India (SEBI).

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Derivative, Futures and Options:

Derivative is a contract/ product that has no independent value i.e. it derives its value from the underlying assets. Underlying assets can be securities, commodities, bullion, currency, livestock or any thing else. Through the use of derivative product, an investor can transfer the price by locking in asset prices.

c. Gold:

Of late, an inverse relationship between the dollar and gold has been in India. The lower the dollar goes, the higher is the gold prices. Why does this happen? The dollar is the international currency with nothing besides gold to challenge it. Besides being a commodity, gold is a universally accepted form of money. India is a net importer of gold. The domestic production is almost negligible and India is the highest consumer of gold in the world.

d. Real estate:

Investment in real estate or property is a good long term investment for well-heeled investors with a huge amount of money. Depending on the total resources at your disposal, you can invest a part of it in property.

e. Foreign Exchange Asset:

Till January 2004, Indian residents’ investors were not allowed by our exchange control rules to invest in foreign exchange assets.Recently, the reserve bank of India has allowed residents to invest overseas to the extent of an equivalent of US $ 25,000 per year. Now investor from India can take advantage of any attractive investment opportunity overseas.

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3. UNIT LINKED INSURANCE PLANS

Risks of investment in the Units of the Fund the Proposer / Life Assured

should be aware that the investment in the units is subject to the following

risks:

CashPlus is a Unit-Linked Insurance Policy (ULIP) and is different from

traditional products. Investments in ULIPs are subject to market risks. The

premium paid in Unit-Linked Life Insurance policies are subject to investments

risks associated with capital markets and debt markets; and the NAVs of the

units may fluctuate based on the performance of fund and factors influencing

the

Capital market; and the insured is responsible for his /her decisions. ICICI

Prudential Life Insurance Company Limited and CashPlus are only names of

the company and the policy respectively and do not in any way indicate the

quality of the policy, its future prospects or returns. The investment in the

Fund is subject to market and other risks and there can be no assurance that

the objectives of the Fund will be achieved. The fund does not offer a

guaranteed or assured return.

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CONCEPT OF MUTUAL FUNDS

A Mutual Fund is a body corporate that pools the savings of a number of

investors and invests the same in a variety of different financial instruments,

or securities. The income earned through these investments and the capital

appreciations realized by the scheme are shared by its unit holders in

proportion to the number of units owned by them. Mutual funds can thus be

considered as financial intermediaries in the investment business that collect

funds from the public and invest on behalf of the investors. The losses and

gains accrue to the investors only. The Investment objectives outlined by a

Mutual Fund in its prospectus are binding on the Mutual Fund scheme. The

investment objectives specify the class of securities a Mutual Fund can invest

in. Mutual Funds invest in various asset classes like equity, bonds,

debentures, commercial paper and government securities.

Mutual funds are commonly categorized by their general investment

objectives. Equity funds consist mainly of common stocks and are organized

primarily to achieve capital appreciation, or growth, rather than periodic

distribution of income. Bond funds, on the other hand, are composed

predominantly of corporate, Government, or municipal bonds and emphasize

regular income rather than growth. Income funds have the same objective as

bond funds but include Government National Mortgage Association securities,

Government securities, and common and preferred stocks as well as bonds.

Money market mutual funds consist of short-term instruments, such as

Government securities, bank CDs, and commercial paper. Short-term

municipal bond funds are composed predominantly of tax-exempt, short-term

municipal securities.

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Types of Mutual Funds

Mutual Fund schemes may be classified on the basis of its structure and its investments.

By Structure:

Open-End Funds:

Available for sale and repurchase at all times based on the net asset values

Unit capital of the fund is not fixed Fund size and its total investment go up if more new subscriptions come

in than redemptions and vice versa.

Close-End Funds:

One time sale of fixed number of units. Investors are not allowed to buy or redeem the units directly from the

funds. Some funds offer repurchase after a fixed period. Listed on stock exchange and investors can buy or sell units through

exchange. May be traded at a discount or premium to NAV based on investor’s perception about the funds future performance and other market factors.

A closed-end fund has a stipulated maturity period which generally ranging from 3 to 15 years. The fund is open for subscription only during a specified period. 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. In order to provide an exit route to the investors, some close-ended funds give an option of selling back the units to the Mutual Fund through periodic repurchase at NAV related prices. SEBI Regulations stipulate that at least one of the two exit routes is provided to the investor.

Interval Funds:

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Interval funds combine the features of open-ended and close-ended schemes. They are open for sale or redemption during pre-determined intervals at NAV related prices.

By Investment Objective:-

Money/Cash Market Funds:

Instruments having less then one year maturity;

Treasury bills issued by government

Certificates of deposit issued by governments

Commercial paper issued by companies

Inter bank call money

Aim to provide easy liquidity, preservation of capital and moderate

income.

Gilt Funds:

Securities maturity over a year;

Invested in government securities are called dated securities

Virtually zero risk of default it is backed by the government

It is more sensitive to market interest rates

Debt/Income Funds:

Investment in debt instruments issued not only by Government but also

by private companies, banks and financial institution and other entities

such as infrastructure companies.

Target low risk and stable income for investors.

Have higher price fluctuation as compared to money market funds due

to interest rate fluctuation.

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Have higher risk of default by borrowers as compared to Gilt funds.

Debt funds can be categorized further based on their risk profiles.

Carry both credit risk and interest rate risk.

Equity Funds:

Invest a major portion of their surplus in equity shares issued by cos,

acquired directly in initial public offering or through secondary market

and keep a part in cash to take care of redemption.

Risk is very high than debt funds but offer very high growth potential for

the capital.

It can be further categorized based on investment strategy.

It must have along term objectives.

Balanced Funds:

Has a portfolio of debt instrument, convertible securities, preference

and equity shares.

Almost equal proportion of debt/money market securities and equities.

Normally funds maintain a ratio of 55:45 or 60:40 some funds allocate

a flexible proportion based on market conditions.

Aim is to gain income, capital appreciation and preservation of capital.

Ideal for investors for a conservative and long term orientation.

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, a commission will be

payable. Typically entry and exit loads range from 1% to 2%. It could

be worth paying the load, if the fund has a good performance history.

No-Load Funds:

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A no-Load Fund is one that does not charge a commission for entry or

exit. That is, no commission is payable on purchase or sale of units in

the fund. The advantage of a no load fund is that the entire corpus is

put to work.

Other Schemes:-

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. Investments made in

Equity Linked Savings Schemes (ELSS) and pension Schemes are

allowed as deduction u/s 88 of the Income Tax Act, 1961. The Act also

provides opportunities to investors to save capital gains u/s 54EA by

investing in Mutual Funds, provided the capital asset has been sold

prior to April 1, 2000 and the amount is invested before September 30,

2000.

Special Schemes:-

Industry Specific Schemes

Industry Specific Schemes invest only in the industries specified in the

offer document. The investment of these funds is limited to specific

industries like InfoTech, FMCG and Pharmaceuticals etc.

Index Schemes

Index Funds attempt to replicate the performance of a particular index

such as the BSE Sense or the NSE 50

Sector Schemes

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Sector Funds are those, which invest exclusively in a specified industry

or a group of industries or various segments such as 'A' Group shares

or initial public offerings.

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Different styles of Mutual Funds

Different Mutual Funds have very different investing styles. These styles are a

function of the individuals managing the fund with the overall investment

objectives and policies of the organization acting as a constraint. These are

manifest in things like:-

Portfolio turnover – Buy and hold strategy versus frequent investment

changes.

Kind of investments made – small versus large companies, multi baggers

(investments which yield high gains) versus percentage players (investing in

shares which will give small gains in line with the market), high quality – low

yield bonds versus low quality – high yield bonds.

Asset allocations – Varying percentage of cash depending on aggressive

views on markets

The following examples serve to illustrate a few styles of equity fund

managers:

Some fund managers are passive value seekers and some are value

creators. The former type buys undervalued assets and patiently waits for the

market to discover the value. The latter aggressively promote the undervalued

stocks that they have bought.

Some fund managers restrict themselves to liquid stocks while some thrive on

illiquid stocks which offer themselves easily to large price changes.

Some fund managers are masters of the momentum game and seek to buy

stocks that are in market fancy. They attach lesser importance to

fundamentals and believe that a rising stock price and favorable momentum

indicators imply that fundamentals are changing. In effect, they are following

the philosophy, "The trend is my friend". Other fund managers go more by

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deep fundamental analysis completely ignoring price movements. They do not

mind price going down and are in fact happy to buy more.

Some fund managers are growth investors i.e. they buy stocks with a high P/E

using the forecasted growth to justify the high valuation. Others are value

investors who buy shares with low P/E or P/BV multiples - typically companies

rich with undervalued assets.

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Process of Mutual Fund

In the above graph shows how Mutual Fund works and how investor earns

money by investing in the Mutual Fund. Investors put their saving as an

investment in Mutual Fund. The Fund Manager who is a person who takes the

decisions where the money should be invested in securities according to the

scheme’s objective. Securities include Equities, Debentures, Govt. Securities,

Bonds, and Commercial Paper etc. These Securities generates returns to the

Fund Manager. The Fund Manager passes back return to the investor.

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NET ASSET VALUE (NAV)

The net asset value of the fund is the cumulative market value of the assets

fund net of its liabilities. In other words, if the fund is dissolved or liquidated,

by selling off all the assets in the fund, this is the amount that the

shareholders would collectively own. This gives rise to the concept of net

asset value per unit, which is the value, represented by the ownership of one

unit in the fund. It is calculated simply by dividing the net asset value of the

fund by the number of units. However, most people refer loosely to the NAV

per unit as NAV, ignoring the "per unit". We also abide by the same

convention.

Calculation of NAV

The most important part of the calculation is the valuation of the assets owned

by the fund. Once it is calculated, the NAV is simply the net value of assets

divided by the number of units outstanding. The detailed methodology for the

calculation of the asset value is given below.

Asset value is equal to

Sum of market value of shares/debentures

+ Liquid assets/cash held, if any

+ Dividends/interest accrued

Amount due on unpaid assets

Expenses accrued but not paid

Details on the above items

For liquid shares/debentures, valuation is done on the basis of the last or

closing market price on the principal exchange where the security is traded.

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For illiquid and unlisted and/or thinly traded shares/debentures, the value has

to be estimated. For shares, this could be the book value per share or an

estimated market price if suitable benchmarks are available. For debentures

and bonds, value is estimated on the basis of yields of comparable liquid

securities after adjusting for illiquidity. The value of fixed interest bearing

securities moves in a direction opposite to interest rate changes Valuation of

debentures and bonds is a big problem since most of them are unlisted and

thinly traded. This gives considerable leeway to the AMCs on valuation and

some of the AMCs are believed to take advantage of this and adopt flexible

valuation policies depending on the situation.

Interest is payable on debentures/bonds on a periodic basis say every 6

months. But, with every passing day, interest is said to be accrued, at the

daily interest rate, which is calculated by dividing the periodic interest

payment with the number of days in each period. Thus, accrued interest on a

particular day is equal to the daily interest rate multiplied by the number of

days since the last interest payment date.

Usually, dividends are proposed at the time of the Annual General meeting

and become due on the record date. There is a gap between the dates on

which it becomes due and the actual payment date. In the intermediate

period, it is deemed to be "accrued". Expenses including management fees,

custody charges etc. are calculated on a daily basis.

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COMPANIES IN INDIA

1. ABN AMRO Mutual Fund

2. Birla Sun Life Mutual Fund

3. Bank of Baroda Mutual Fund (BOB Mutual Fund)

4. HDFC Mutual Fund

5. HSBC Mutual Fund

6. ING Vysya Mutual Fund

7. Prudential ICICI Mutual Fund

8. Sahara Mutual Fund

9. State Bank of India Mutual Fund

10.Tata Mutual Fund

11.Kotak Mahindra Mutual Fund

12.Unit Trust of India Mutual Fund

13.Reliance Mutual Fund

14.Standard Chartered Mutual Fund

15.Franklin Templeton India Mutual Fund

16.Morgan Stanley Mutual Fund India

17.Escorts Mutual Fund

18.Alliance Capital Mutual Fund

19.Benchmark Mutual Fund

20.Canbank Mutual Fund

21.Chola Mutual Fund

22.GIC Mutual Fund

23.LIC Mutual Fund

24.Fidelity Mutual Fund

25. IL&FS Mutual Fund

26.DSP Merill lynch Mutual Fund

27.Sundaram Mutual Fund

28.Principal Mutual Fund

29.Taurus Mutual Fund

30.Deutsche Mutual fund

31. IDBI Investment Company Ltd.

32.Bank of India Mutual Fund

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PORTFOLIO MANAGEMENT

People have different investment objective and risk appetite so to get the

highest returns asset allocation through active portfolio management is the

key element.

Asset allocation is a method that determines how you divide your portfolio

among different investment instruments and provides you with the proper

blend of various asset classes.

It is based on the theory that the type or class of security you own equity, debt

or money market- is more important than the particular security itself. In other

words asset allocation is way to control risk in your portfolio. Different asset

class will react differently to market conditions like inflation, rising or falling

interest rates or a market segment coming into or falling out of favor.

Asset allocation is different from simple diversification. Suppose you diversify

your equity portfolio by investing in five or ten equity funds. You really have

not done much to control risk in your portfolio if all these funds come from only

one particular segment of the market say large cap stocks or mid cap stocks.

In case of an adverse reaction for that segment, all the funds will react

similarly means they will go down.

If you build your portfolio with various top performing growth funds without

really bothering to analyze their portfolio allocation, you may end up with over-

exposure to a particular segment. Another point you need to remember is that

growth funds are highly correlated- they tend to move in the same direction in

response to a given market force.

The advantage of asset allocation lies in achieves superior returns when

markets are down while minimizing the exposure of the portfolio to volatility. In

fact, asset allocation is based on certain dimensions that, when combined

tend to control the volatility while achieving targeted returns.

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Portfolio Management Process

Portfolio management is a complex activity, which may be broken down into the following steps:

1. Specification of investment objectives and constraints:

The typical objectives sought by an investor are current income, capital appreciation, safety, fixed returns on principal investment.

2. Choice of asset mix:

The most important decision in portfolio management is the asset mix decision. This is concerned with the proportions of “Stock” or “Units” of mutual fund or “Bond” in the portfolio. The appropriate mix of Stock and Bonds will depend upon the risk tolerance and investment horizon of the investor.

3. Formulation of portfolio strategy:

Once the certain asset mix has been chosen an appropriate portfolio strategy has to be decided out. Two broad portfolio choices are available An active portfolio management: it strive to earn superior risk adjusted returns by resorting to market timing, or sector rotation or security selection or some combination of these. A passive portfolio management involves holding a broadly diversified portfolio and maintaining a pre-determined level of risk exposure.

Designing a model Portfolio

There are certain objectives that should keep in mind while designing a portfolio these are:

Higher absolute rate of return and high real rate of return

Maximization current income

High post tax returns

Positive real return

Preservation of capital

Growth in capital

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For my study I am making three dummy portfolios for three different kinds of investors.

Types of Investor:

1. Cautious Investor: It’s kind of investor who is less bothers about high returns. He wants to lower down his risk profile and demand for fixed income on his investment. His main objective of investment is fixed returns with less risk.

2. Balanced Investor: It’s a kind of investor who is bothers about returns as well as risk. He wants moderate returns with moderate risk.

3. Aggressive Investor: It’s a kind of investor who is ready to take risk. He believes in high risk and high returns. So he only wants to invest in equity schemes.

I have made an assumption that each investor want to invest 5 Lakh Rs.

Portfolio for Cautious Investor

Investment Instrument Amount ReturnsKisan Vikas Patra 1,50,000 Rs. 8.4% p.a.PPF 70,000 Rs. 8.5% p.a.Bank Fixed Deposits 1,00,000 Rs. 6.5% p.a.NSC 80,000 Rs. 8.16% p.a.Post office monthly MIP 1,00,000 Rs. 8% p.a.TOTAL 5,00,000 Rs.

Logic behind selection of particular Instrument:

As investor does not want to take risk, he is satisfied with fixed return rather they are less than equity investment’s returns. So I took thus instrument which provides good return as well as secure also. All of these instruments will give him return around 8% annually.

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Portfolio for Balance Investor

Investment Instrument Amount ReturnsHDFC Prudence Fund 1,30,000 Rs. 54.2% p.a.Reliance Vision Fund 1,00,000 Rs. 78.3% p.a.Bank Fixed Deposits 1,00,000 Rs. 6.5% p.a.PPF 70,000 Rs. 8.5% p.a.Kisan Vikas Patra 1,00,000 Rs. 8.4% p.a.TOTAL 5,00,000 Rs.

Logic behind selection of particular Instrument:

As investor does not want to take high risk, he is satisfied with fixed return plus some equity exposure. But he wants some safety in equity exposure also. So I took thus instrument which provides good return as well as safety also. Fixed return instruments like PPF, Bank FD and kisan viaks patra will give him return around 8% annually and I suggest Balance kind of funds to him where he will have exposure of both equity as well as debts. HDFC prudence fund is best performing fund under balance scheme. To increase the ratio of equity in portfolio I suggested Reliance vision fund which is mainly based on large and mid cap companies.

Portfolio for Aggressive Investor

Investment Instrument Amount ReturnsHDFC Core & Satellite Fund 1,30,000 Rs. 83.56% p.a.Prudential ICICI Emerging Star Fund

90,000 Rs. 93.3% p.a.

Franklin Flexi Cap Fund 1,10,000 Rs. 86.25% p.a.Fidelity Equity Fund 80,000 Rs. 82.4% p.a.DSP Top 100 90,000 Rs. 79.28% p.a.TOTAL 5,00,000 Rs.

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Logic behind selection of particular Instrument :

As investor ready to take high risk, he is looking for high returns on his investment. I took thus instrument which provides good return. All of these instruments will give him return around 80% annually. Currently Mid cap companies will perform better than large cap companies so, I select more funds which are focusing on mid cap companies like HDFC, Franklin’s funds. To take the benefit of increasing Sensex I took DSP top 100.

MEASUREMENT OF RETURNS ON PORTFOLIOS

The realized rate of return will be calculated by

1. Time Weighted Rate of Return (TWROR)

It is calculated by using Dietz Algorithm

Ri= [(Pi-0.5Ci)/ (Po+0.5Ci)-1}*100

Po= Portfolio value at the beginning of the period

Pi= Portfolio value at the end of the period

Ci= Net contributions during time interval

Ri= Rate of Return for the time interval

a) Rate of return for cautious investor

Investment Instrument Amount ReturnsCurrent Value

Kisan Vikas Patra 1,50,000 Rs. 8.4% p.a. 1,62,600PPF 70,000 Rs. 8.5% p.a. 75,950Bank Fixed Deposits 1,00,000 Rs. 6.5% p.a. 1,06,500NSC 80,000 Rs. 8.16% p.a. 86,528Post office monthly MIP 1,00,000 Rs. 8% p.a. 1,08,000TOTAL 5,00,000 Rs. 5,39,578

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Time Weighted Rate of Return (TWROR)

Ri= [(Pi-0.5Ci)/ (Po+0.5Ci)-1}*100

= {(539578-0.5(0))/ (500000+0.5(0))-1}*100

= 7.91% p.a.

b) Rate of return for balance investor

Investment Instrument Amount Returns Current Value

HDFC Prudence Fund 1,30,000 Rs. 54.2% p.a. 2,00,460Reliance Vision Fund 1,00,000 Rs. 78.3% p.a. 1,78,300Bank Fixed Deposits 1,00,000 Rs. 6.5% p.a. 1,06,500PPF 70,000 Rs. 8.5% p.a. 75,950Kisan Vikas Patra 1,00,000 Rs. 8.4% p.a. 1,08,400TOTAL 5,00,000 Rs. 6,69,610

Time Weighted Rate of Return (TWROR)

Ri= [(Pi-0.5Ci)/ (Po+0.5Ci)-1}*100

= {(669610-0.5(0))/ (500000+0.5(0))-1}*100

= 33.92%p.a.

c) Rate of return for aggressive investor

Investment Instrument Amount Returns Current Value

HDFC Core & Satellite Fund 1,30,000 Rs.

83.56% p.a. 2,38,628

Prudential ICICI Emerging Star Fund

90,000 Rs. 93.3% p.a. 1,73,790

Franklin Flexi Cap Fund 1,10,000 Rs.

86.25% p.a. 2,04,875

Fidelity Equity Fund 80,000 Rs. 82.4% p.a. 1,45,920DSP Top 100 90,000 Rs. 79.28% p.a. 1,61,352TOTAL 5,00,000

Rs.9,24,565

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Time Weighted Rate of Return (TWROR)

Ri= [(Pi-0.5Ci)/ (Po+0.5Ci)-1}*100

= {(924565-0.5(0))/ (500000+0.5(0))-1}*100

= 84.91%p.a.

Phase IIScheme Portfolio

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Scheme Portfolio:

Like investors portfolio different scheme under mutual fund have different

portfolio. By scheme portfolio we mean portfolio or companies in which fund

manager invested the fund. The selection of companies depend upon many

issue which have great impact in current scenario as well as in near future.

Fund manager has to do lot of research before investing into particular script.

Before going into detail one should understand Sensex movement. Mutual

fund returns are based on Sensex. Their Net Asset Value is directly related to

Share market. The below table shown the Sensex change on monthly basis.

Means what is % change in Sensex during one month.

Sensex JourneyPercentage Changes at the End of the Day

Date Opening Closing Change Change in %30-Sep-08 8,672.66 8,634.48 -38 -0.43

3-Oct-08 8,662.99 8,697.65 35 0.4431-Oct-08 7,717.07 7,892.32 175 2.262-Nov-08 7,953.28 8,072.75 119 1.49

30-Nov-08 8,962.92 8,788.81 -174 -0.192-Dec-08 9,010.58 8,961.61 -49 -0.54

30-Dec-08 9,339.32 9,397.93 58 0.622-Jan-09 9,422.49 9,390.14 -32 -0.33

31-Jan-09 9,892.23 9,919.89 27 0.272-Feb-09 9,890.90 9,843.87 -47 -0.47

28-Feb-09 10,308.71 10,370.24 62 0.612-Mar-09 10,597.19 10,626.78 29 0.27

31-Mar-09 11,325.96 11,279.96 -46 -

0.41

Percentage Changes at the End of the Month

Date Opening ClosingChange In Closing

Prices Change in %

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30-Sep-08 8,672.66 8,634.48 Nil Nil

31-Oct-08 7,717.07 7,892.32 74

2

8.5930-Nov-08 8,962.92 8,788.81 896 11.3530-Dec-08 9,339.32 9,397.93 609 6.9231-Jan-09 9,892.23 9,919.89 522 5.5528-Feb-09 10,308.71 10,370.24 451 4.5431-Mar-09 11,325.96 11,279.96 909 8.76

Sensex has boomed with lots of ups and down from last year. It seems very fluctuating.

For my study purpose I have taken HDFC Equity Fund and HDFC Core & Satellite Fund. What is their portfolio means in which companies the fund manager invested the fund. How he has allocated funds among various industries as well as various companies. After studying both the fund’s

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portfolio I compare them with reliance Growth fund, Prudential ICICI Growth Fund, DSP Tiger Fund and Kotak Opportunity Fund. Comparison is based on per month returns and Sensex returns during the same period.

HDFC Equity Fund

Portfolio Top 10 Holdings For OctoberS. No. Company Industry % of NAV

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1Oil & Natural Gas Corporation Ltd. Oil 9.11

2 State Bank of India Banks 9.023 Infosys Technologies Ltd. Software 7.974 Satyam Computer Services Ltd. Software 7.68

5 Bharat Heavy Electricals Ltd.Industrial Capital Goods 7.25

6 Amtek Auto Ltd. Auto Ancillaries 6.057 Maruti Udyog Ltd. Auto Ancillaries 5.218 United Phosphorus Ltd. Pesticides 4.69

9 Crompton Greaves Ltd.Industrial Capital Goods 4.67

10 Mahindra & Mahindra Ltd. Auto 4.54    Top 10 Holdings 66.09    Others Equity Holdings 33.91    TOTAL 100

NAV Changed During the Month (GROWTH)Date NAV Change % Change1, Oct 2008 93.055    31, Oct 2008 88.295 -4.76 -5.11

Compare returns with Sensex MovementDate Closing Change % change

30-Sep-08

8,634.48    

31-Oct-08

7,892.32 -742 -8.59

HDFC Equity Fund

Portfolio Top 10 Holdings For DecemberS. No. Company Industry % of NAV

1Oil & Natural Gas Corporation Ltd. Oil 9.14

2 Infosys Technologies Ltd. Software 8.913 Tata Motors Ltd. Auto 8.67

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4 Satyam Computer Services Ltd. Software 7.725 State Bank of India Banks 5.19

6 Crompton Greaves Ltd.Industrial Capital Goods 4.87

7 Amtek Auto Ltd. Auto Ancillaries 4.768 Mahindra & Mahindra Ltd. Auto 4.45

9 Bharat Heavy Electricals Ltd.Industrial Capital Goods 4.44

10 Maruti Udyog Ltd. Auto Ancillaries 4.36    Top 10 Holdings 62.51    Others Equity Holdings 37.49    TOTAL 100

NAV Changed During the Month (GROWTH)Date NAV Change % Change1, Dec 2008 102.827    3o, Dec 2009 107.009 4.182 4.06

Compare returns with Sensex MovementDate Closing Change % change

30-Nov-08

8,788.81    

30-Dec-08

9,397.93 609 6.92

In the month of December Sensex has grown by 6.92% but fund’s return were only 4.06% which indicating towards lower performance of fund.

HDFC Equity Fund

How Fund's Portfolio effected Returns

October DecemberIndustry % Of Allocation Industry % Of AllocationSoftware 19.97 Software 20.14Industrial Capital Goods 13.73 Auto 17.48Auto 12.73 Industrial Capital Goods 13.77Banks 9.28 Oil 9.14

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Oil 9.11 Banks 7.73Auto Ancillaries 8.68 Auto Ancillaries 7.19Pesticides 4.69 Pesticides 3.98

Power 4.07Consumer Non Durables 3.27

Transportation 2.74 Transportation 3.15Petroleum Products 2.41 Metals 2.25Hardware 2.11 Gas 2.01Textile 1.92 Pharmaceuticals 1.63Metals 1.76 Hardware 1.5Pharmaceuticals 1.45 Textile 2.57Chemicals 0.88 Chemicals 0.82

Telecom-service 0.79Construction 0.21IT Consulting & Services 0.09

Oct-Dec Month Portfolio

IndustryChange

Software 0.17Auto 4.75Industry Capital Goods 0.04Oil 0.03Banks -1.55Auto Ancillaries -1.49Pesticides -0.71Consumer Non Durables 3.27Transportation 0.41Metals 0.51Gas 2.01Pharmaceuticals 0.18Hardware -0.61Textile 0.66Chemicals -0.06

Tata Motors Share Benefit

Date PriceChange

% Change

31, Oct 2008 472

31, dec2008639.5

5 167.55 35.49%

Fund manager added auto industry by taking Tata motors to 8.67 % which had no exposure in the month of October in the portfolio. During that time Tata Motors has grown from 472 to 639.55 Rs means 35.49% increase which

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fletched fund performance in to positive. So, fund manager decision of taking Tata Motors has proved right.

Amtek Share Benefit

Date PriceChange % Change

31, Oct 2008 273.731, dec2008 297 24 8.79%

Fund manager reduced Amtek exposure in the portfolio by 1.26 % which proved right because its share price rose only by 8.79% where Sensex was increasing at 19.2%.so Amtek performed lower than market so its good to sell this script from portfolio.

HDFC Equity FundPortfolio Top 10 Holdings For April

S. No. Company Industry % of NAV

1 Tata Motors Ltd. Auto 9.042 State Bank of India Banks 8.133 Infosys Technologies Ltd. Software 8.04

4Oil & Natural Gas Corporation Ltd. Oil 7.89

5 Satyam Computer Services Ltd. Software 7.44

6 Bharat Heavy Electricals Ltd.Industrial Capital Goods 5.55

7 Maruti Udyog Ltd. Auto Ancillaries 5.23

8 Crompton Greaves Ltd.Industrial Capital Goods 5.17

9 Siemens Ltd.Industrial Capital Goods 4.47

10 Amtek Auto Ltd. Auto Ancillaries 3.94    Top 10 Holdings 64.9    Others Equity Holdings 35.1    TOTAL 100

NAV Changed During the Month (GROWTH)

Date NAV Change % Change Beta

1, Aprl 2009 107.009     0.8830, Aprl 2009 132.31 29.30 23.64

0.88

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Compare returns with Sensex movement

Date Closing Change % change30 march

09 11329.05    31 april 09 14700.01 2677.96 23.64

Industry Wise AllocationApril May

Industry % Of Allocation Industry % Of AllocationSoftware 20.14 Software 22.03Auto 17.48 Auto 18.16Industry Capital Goods 13.77 Industry Capital Goods 15.35Oil 9.14 Banks 8.6Banks 7.73 Oil 7.89Auto Ancillaries 7.19 Auto Ancillaries 6.65

Pesticides 3.98Consumer Non Durables 3.94

Consumer Non Durables 3.27 Pesticides 3.93Transportation 3.15 Transportation 2.84Metals 2.25 Gas 2.1Gas 2.01 Metals  1.85Pharmaceuticals 1.63 Pharmaceuticals 1.42Hardware 1.5 Hardware 1.38Textile 2.57 Textile 2.04Chemicals 0.82 Chemicals 0.7

Telecom-service 0.79IT Consulting & Services 0.1

Construction 0.21    IT Consulting & Services 0.09

April-May Month PortfolioIndustry ChangeSoftware 1.89Auto 0.68Industry Capital Goods 1.58Oil -1.25

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Banks 0.87Auto Ancillaries -0.54Pesticides -0.05Consumer Non Durables 0.67Transportation -0.29Metals -0.4Gas 0.09Pharmaceuticals -0.19Hardware -0.12Textile -0.5Chemicals -0.12

Siemens Share BenefitDate Price Change % Change Beta

30, April 2009 3625.8

51.29

31, May 2009 4486 860.15 23.72 1.4

Add siemens to 4.47 which had no exposure in the month of December in the portfolio. During that time siemens has grown from 3625.85 to 4486 Rs means 23.72% increase which fletched fund performance at good rate.

HDFC Equity Fund

Portfolio Top 10 Holdings For FebruaryS. No. Company Industry % of NAV

1 Infosys Technologies Ltd. Software 8.78 2 State Bank of India Banks 7.923 Satyam Computer Services Ltd. Software 7.24

4 Bharat Heavy Electricals Ltd.Industrial Capital Goods 7.05

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5Oil & Natural Gas Corporation Ltd. Oil 6.58

6 Tata Motors Ltd. Auto 6.557 Maruti Udyog Ltd. Auto Ancillaries 6.04

8 ITC Ltd.Consumer Non Durables 5.97

9 Amtek Auto Ltd. Auto Ancillaries 5.48    Top 10 Holdings 61.61    Others Equity Holdings 38.39    TOTAL 100

NAV Changed During the Month (GROWTH)Date NAV Change % Change Beta

1, Feb 2009 113.063     0.8328, Feb 2009 116.844 3.781 3.344

0.83

Compare returns with Sensex MovementDate Closing Change % change

31-Jan-06 9236    

28-Feb-06 8800 436 -4.72

Industry Wise Allocation

January February

Industry

% Of Allocatio

n Industry

% Of Allocatio

nSoftware 22.03 Software 21.06Auto 18.16 Industry Capital Goods 17.32Industry Capital Goods 15.35 Auto 12.59Banks 8.6 Consumer Non Durables 10.16

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Oil 7.89 Auto Ancillaries 8.9Auto Ancillaries 6.65 Banks 7.92Consumer Non Durables 3.94 Oil 6.58Pesticides 3.93 Pesticides 3.7Transportation 2.84 Transportation 2.32Gas 2.1 Metals 1.78Metals   Pharmaceuticals 1.45Pharmaceuticals 1.42 Hardware 1.29Hardware 1.38 Textile 2.09Textile 2.04 Chemicals 0.67Chemicals 0.7 IT Consulting & Services 0.12IT Consulting & Services 0.1

Jan-Feb Month PortfolioIndustry ChangeSoftware -0.97Industry Capital Goods 1.97Auto -5.57Consumer Non Durables 6.22Auto Ancillaries 2.25Banks -0.68Oil -1.31Pesticides -0.23Transportation -0.62Metals -0.07Pharmaceuticals 0.03Hardware -0.09Textile 0.05Chemicals -0.03IT Consulting & Services 0.02

ITC Share Benefit

Date Price Change% Change

31, Jan 2006 154.828, Feb 2006 172.45 17.65 11.41

Add ITC to 5.97 which had no exposure in the month of January in the portfolio. During that time ITC has grown from 154.8 to 172.45 Rs means

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11.41% increase which is higher than Sensex 4.54% growth, this decision gave return at 3.44%.

Crompton Greaves Share Benefit

Date PriceChange

% Change

31, Jan 2006 906.3528, Feb 2006 892.45 -13.9 -1.53

Reduce share of Crompton Greaves which had less exposure in the month of February than January in the portfolio. During that time Crompton has felt from 906.35 to 892.45 Rs means 1.53% decrease. Due to this fund’s performance has not felt.

HDFC Equity Fund

Portfolio Top 10 Holdings For MarchSR. No. Company Industry % of NAV

1 Infosys Technologies Ltd. Software 8.722 State Bank of India Banks 7.883 ITC Ltd. Consumer Non Durables 7.814 Satyam Computer Services Ltd. Software 6.865 Tata Motors Ltd. Auto 5.876 Bharat Heavy Electricals Ltd. Industrial Capital Goods 5.717 Maruti Udyog Ltd. Auto Ancillaries 5.58 Crompton Greaves Ltd. Industrial Capital Goods 5.069 Siemens Ltd. Industrial Capital Goods 4.78

10 Amtek Auto Ltd. Auto Ancillaries 4.57    Top 10 Holdings 62.76    Others Equity Holdings 37.24    TOTAL 100

NAV Changed During the Month (GROWTH)

Date NAV Change % Change Beta

1, Mar 2009 116.844     0.88

31, Mar 2009 127.151 10.307 8.821 0.88

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Compare returns with Sensex Movement

Date Closing Change % change28-Feb-06 8800    

31-Mar-06 9568.14 768.14 8.73

Industry Wise Allocation

February MarchIndustry % Of Allocation Industry % Of AllocationSoftware 21.06 Software 18.09Industry Capital Goods 17.32 Industry Capital Goods 17.35

Auto 12.59Consumer Non Durables 12.46

Consumer Non Durables 10.16 Auto 11.37Auto Ancillaries 8.9 Banks 7.88Banks 7.92 Auto Ancillaries 7.67Oil 6.58 Oil 3.86Pesticides 3.7 Media & Entertainment 3.29Transportation 2.32 Pesticides 2.87Metals 1.78 Telecom- Services 2.65Pharmaceuticals 1.45 Metals 2.13Hardware 1.29 Transportation 1.86Textile 2.09 Hardware 1.81Chemicals 0.67 Textile 2.05IT Consulting & Services 0.12 Pharmaceuticals 1.09

Chemicals 0.87IT Consulting & Services 0.08

Feb-March Month PortfolioIndustry ChangeSoftware -2.97Industry Capital Goods 0.03Consumer Non Durables 2.3Auto -1.22Banks -0.04Auto Ancillaries -1.23Oil -2.72

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Media & Entertainment 3.29Pesticides -0.83Telecom- Services 2.65Metals 0.35Transportation -0.46Hardware 0.52Textile -0.04Pharmaceuticals -0.36Chemicals 0.2IT Consulting & Services -0.04

Crompton Greaves Share Benefit

Date Price Change% Change

28, Feb 2006 892.4531, March 2006 1049.3 156.85 17.57

Add share of Crompton Greaves which had less exposure in the month of February in the portfolio. During March Crompton has grown from 892.45 to 1049.3 Rs means 17.57% increase. So, these decision results in 8.4% return on fund.

Satyam Computer Share Benefit

Date Price Change% Change

28, Feb 2006 769.6531, March 2006 848.5 78.85 10.24

Satyam computer has grown at the rate of 10.24% which is 20% higher than Sensex growth in that time period.

Prudential ICICI Growth FundJanuary

S. No Companies Industry % of NAV1 Hindalco Industry Ltd. Non Ferrous Metals 5.432 Bharat Heavy Electricals Limited Industrial Capital Goods 4.163 Associated Cement Companies Ltd Cement 3.874 Oil & Natural Gas Company Ltd Oil 3.735 Grasim Industries Limited Cement 3.476 Reliance Industries Limited Petroleum Products 3.36

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7 Satyam Computer Services Ltd. Software 3.148 Jaiprakash Associates Ltd Construction 3.089 Mahindra & Mahindra Limited Auto 3.03

10 ITC Limited Consumer Non Durables 3

Industry Wise Allocation

NAV Changed During the Month (GROWTH)Date NAV Change % Change Beta

1, Jan 2009 68.7 0.9831, Jan 2009 70.42 1.72 2.5

0.98

In January, ICICI Growth Fund has given only 2.5% returns where HDFC Equity Fund has given 5.34% returns. So we can say that HDFC has performed better in January.

Reliance Industry Share Benefit

Date Price Change% Change

31, Dec 2008 897.8531, Jan 2009 713.9 -183.95 -20.4

In the month of January Reliance Industry’s share price has come down to 713.9 Rs which is 20.4% lesser than December price. ICICI has exposure of reliance industry in to portfolio which harms the fund’s overall returns.

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Jai Prakash Associate Share’s Benefit

Date Price Change% Change

31, Dec 2008 379.931, Jan 2009 408.25 28.35 7.46

ICICI has exposure of Jai Prakash Associates which has rose by 7.46% in January month. HDFC Mutual fund did not have Jai Prakash’s exposure in their portfolio.

Prudential ICICI Growth FundFebruary

S. No Companies Industry % of NAV

1 Bharat Heavy Electricals Limited Industrial Capital Goods 4.84

2 Jaiprakash Associates Ltd Construction 4.143 Reliance Industries Limited Petroleum Products 3.99

4 ITC Limited Consumer Non Durables 3.82

5 Grasim Industries Limited Cement 3.73

6Associated Cement Companies Ltd Cement 3.71

7 Bajaj Auto Limited Auto 3.688 Satyam Computer Services Ltd. Software 3.459 Mahindra & Mahindra Limited Auto 3.44

10 Oil & Natural Gas Company Ltd Oil  3.44

Industry Wise Allocation

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NAV Changed During the Month (GROWTH)Date NAV Change % Change Beta

1, Feb 2009 70.42 0.9628, Feb 2009 71.79 1.37 1.94

0.96

In February market has boomed by 4.54% where HDFC Equity fund has given 3.33% returns. So it has performed similar to market trend but ICICI Growth fund has given only 1.94% in same period. So, we can say that this fund has performed lower than market.

Prudential ICICI Growth FundMarch

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S. No Companies Industry % of NAV

1 Bharat Heavy Electricals Limited Industrial Capital Goods 4.84%

2 Reliance Industries Limited Petroleum Products 4.64%

3 Larsen & Toubro Limited Industrial Capital Goods 4.03%

4 ITC Limited Consumer Non Durables 3.91%

5 Siemens India Limited Industrial Capital Goods 3.82%

6 Bajaj Auto Limited Auto 3.52%

7Associated Cement Companies Ltd Cement 3.49%

8 Mahindra & Mahindra Limited Auto 3.32%9 Cipla Limited Pharmaceuticals 3.28%

10 Grasim Industries Limited Cement 3.17%

Industry Wise Allocation

NAV Changed During the Month (GROWTH)Date NAV Change % Change Beta

1, March 71.79 0.78

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200931, March 2009 80.94 9.15 12.74

0.78

ICICI Growth fund has grown up by 12.74% in March where HDFC Equity Fund has grown only by 8.8%

CIPLA Share’s Benefit

Date Price Change% Change

31, Dec 2008 552.1531, Jan 2009 662.25 110.1 19.94

ICICI has CIPLA script in their portfolio which has grown to 662.25 Rs. It has rose by 19.94% in March month. HDFC did not have CIPLA’s exposure. This script has the main reason behind ICICI better performance over HDFC.

Reliance Growth FundJanuary

S. No. Companies % of NAV

1Bharat Earth Movers Ltd. 4.96

2 Kirloskar Brothers 3.843 Crompton Greaves Ltd. 2.994 Hindustan Lever Ltd. 2.645 State Bank of India 2.586 Strides Arcolabs Ltd. 2.357 United Phosphorous 2.268 Jindal Saw Ltd. 2.29 Jaiprakash Associates 2.11

10 Reliance Industries Ltd. 2.08

Industry Wise AllocationS. No. Industry % Of Allocation

1Industry Capital Goods 10.44

2 Consumer Non 10.41

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Durable3 Industrial Products 9.344 Software 8.925 Banks 7.256 Pharmaceuticals 6.17 Ferrous Metals 5.168 Fertilizers 3.099 Chemicals 3.09

10 Construction 2.811 Auto Ancillaries 2.3312 Pesticides 2.2613 Petroleum Products 2.0814 Auto 2.0515 Telecom Services 1.86

Reliance Growth FundMarch

S. No. Companies % of NAV

1Bharat Earth Movers Ltd. 4.91

2 Reliance Industries Ltd. 4.63 Kirloskar Brothers 4.184 Bombay Dying Ltd. 2.665 Bank of Baroda 2.586 Crompton Greaves Ltd. 2.577 Jaiprakash Associates 2.318 Strides Arcolabs Ltd. 2.169 Jindal Saw Ltd. 2.1

10 JSW Steels Ltd. 2.04

Industry Wise Allocation

S. No. Industry % Of Allocation

1Industry Capital Goods 10.76

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2 Industrial Products 10.19

3Consumer Non Durable 8.37

4 Software 8.175 Pharmaceuticals 7.786 Banks 7.197 Ferrous Metals 6.988 Petroleum Products 5.959 Chemicals 4.55

10 Construction 3.1111 Fertilizers 2.7812 Telecom Services 2.5613 Auto 2.3414 Auto Ancillaries 2.1915 Pesticides 2.14

NAV Changed During the Month (GROWTH)

Date NAV Change % Change Beta

1, Mar 2009 207.15     0.87

31, Mar 2009 229.76 22.61 10.91 0.87

Reliance growth fund has given 10.91% returns to investors in the month of March where market has boomed by only 8.4%. In the same month HDFC Equity fund has given only 8.84 % returns.

Kirloskar Brother Share’s Benefit

Date Price Change% Change

28, Feb 2009 196.5531, Mar 2009 291.7 95.15 48.41

Kirloskar Brother Share price has risen from 196.55 to 291.7 Rs. This means 48.41% increase in March month. HDFC Mutual Fund had not this script into their portfolio.

Bombay Dyeing Share’s Benefit

Date Price Change% Change

28, Feb 2009 375.3531, Mar 2009 596 220.45 58.71

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Bombay Dyeing shares have grown by 58.71% where the overall Sensex has grown only by 8.76% Reliance has 4.18% exposure to this script.

JSW Steel Share’s Benefit

Date Price Change% Change

28, Feb 2009 205.131, Mar 2009 302.85 97.75 47.61

In the month of March JSW Steel has moved to 302.85 Rs which was 47.61% increase. Reliance has 2.04% exposure to this script.

HDFC Equity Fund

February

S. No. Company % of NAV

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1 Infosys Technologies Ltd. 8.782 State Bank of India 7.923 Satyam Computer Services Ltd. 7.244 Bharat Heavy Electricals Ltd. 7.055 Oil & Natural Gas Corporation Ltd. 6.586 Tata Motors Ltd. 6.557 Maruti Udyog Ltd. 6.048 ITC Ltd. 5.979 Amtek Auto Ltd. 5.48

10 Crompton Greaves Ltd. 4.811 Siemens Ltd. 4.2512 United Phosphorus Limited 3.713 Nestle India Ltd. 2.8714 Balkrishna Industry Ltd. 2.515 I-flex Solutions Limited 2.4216 Container Corporation of India Ltd. 2.3217 HCL Technology Ltd. 2.2918 ISMT Ltd. 1.78

19Dishman Pharmaceuticals & Chemicals 1.45

20 Britannia Industries Limited 1.3221 CMC Ltd. 1.2922 Larsen & Toubro Ltd. 1.2223 Indo Rama Synthetics (India) Limited 1.0624 Himatsinka Seilde Ltd. 1.0325 J K Industries Limited 0.9226 Savita Chemicals Limited 0.6727 Datamatics Technologies Limited 0.33

TOTAL 100

March

S. No. Company % of NAV

1 Infosys Technologies Ltd. 8.72

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2 State Bank of India 7.883 ITC Ltd. 7.814 Satyam Computer Services Ltd. 6.865 Tata Motors Ltd. 5.876 Bharat Heavy Electricals Ltd. 5.717 Maruti Udyog Ltd. 5.58 Crompton Greaves Ltd. 5.069 Siemens Ltd. 4.78

10 Amtek Auto Ltd. 4.5711 ONGC 3.8612 Zee Tele films Ltd. 3.2913 United Phosphorus Limited 2.8714 Nestle India Ltd. 2.7815 Bharti Tele-ventures Ltd. 2.6516 Balkrishna Industry Ltd. 2.3517 HCL Technology Ltd. 2.2518 ISMT Ltd. 2.1319 Hindustan Lever Ltd. 1.8720 Container Corporation of India Ltd. 1.8621 CMC Ltd. 1.8122 Larsen & Toubro Ltd. 1.823 Himatsinka Seilde Ltd. 1.15

24Disahman Pharmaceuticals & Chemicals 1.09

25 Indo Rama Synthetics (India) Limited 0.926 Savita Chemicals Limited 0.8727 J K Industries Limited 0.7528 Datamatics Technologies Limited 0.26

TOTAL 100

Change in Portfolio

Companies Change

United Phosphorus Limited -0.83Tata Motors Ltd. -0.68State Bank of India -0.04

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Siemens Ltd. 0.53Savita Chemicals Limited 0.2Satyam Computer Services Ltd. -0.38ONGC -2.72Nestle India Ltd. -0.09Maruti Udyog Ltd. -0.54Larsen & Toubro Ltd. 0.58J K Industries Limited -0.17ITC Ltd. 1.84ISMT Ltd. 0.35Infosys Technologies Ltd. -0.06Indo Rama Synthetics (india) Limited -0.16Himatsinka Seilde Ltd. 0.84HCL Tecnology Ltd. -1.14Disahman Pharmaceuticals & Chemicals 0.8Datamatics Technologies Limited 0.76Crompton Greaves Ltd. -4.54Container Corporation of India Ltd. 2.74CMC Ltd. 0.57Bharat Heavy Electricals Ltd. -5.24Balkrishna Industry Ltd. 0.15Amtek Auto Ltd. 0.23Zee Tele Films Ltd. 3.29Bharti Tele-ventures Ltd. 2.65Hindustan Lever Ltd. 1.87I-Flex Solution Ltd. -2.42Britannia Industry Ltd. -1.32

Zee Tele Films Share's Effect

Date Price Change% Change

28, Feb 2009 176.6    31, Mar 2009 239 62.4 35.33

Fund adds exposure of zee tele films into portfolio by 3.29 % which has increased by 35.33% during March. In the same time period market has boomed only by 8.76%.

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I- Flex Share's Effect

Date PriceChange

% Change

28, Feb 2009

1063.5

31, Mar 2009 1327 263.5 24.77

Fund eliminate I flex solution from its portfolio which has increased by 24.77% during March.

Hindustan Lever Ltd. Share's Effect

Date Price Change% Change

28, Feb 2009 243.731, Mar 2009 272 28.3 11.61

Fund added Hindustan Lever Ltd. into their portfolio which has risen by 11.61% during March.

ITC Ltd. Share's Effect

Date PriceChange

% Change

28, Feb 2009

172.45

31, Mar 2009

195.15 22.7 13.16

Fund added ITC Ltd. into portfolio which has risen 13.16% during March.

Crompton greaves Ltd. Share's Effect

Date PriceChange

% Change

28, Feb 2009 89231, Mar 2009

1049.5 157.5 17.61

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Fund reduces the share of Crompton from portfolio which has increased by 17.61% during March.

Core & Satellite Fund

Nature of scheme : Open ended growth scheme

Objective: To generate capital appreciation through equity investment in

companies whose shares are quoting at prices below their true value.

Fund Manager : Dhawal Mehta

Inception Date : September 17, 2004

Core & Satellite FundPortfolio Top 10 Holdings For October

S. No. Company Industry % To NAV1 State Bank of India Banks 8.83

2 Bharat Heavy Electricals Ltd.Industrial Capital Goods 7.95

3 Infosys Technologies Ltd. Software 7.734 Tata Motors Ltd. Auto 7.175 Satyam Computer Services Ltd. Software 6.34

6 ITC Ltd.Consumer Capital Goods 5.27

7 Crompton Greaves Ltd.Industrial Capital Goods 4.96

8 Hindalco Industries Ltd. Non- Ferrous Metals 4.749 United Phosphorus Ltd. Pesticides 4.22

10Hindustan Construction Company Ltd. Construction 4.07

    Top 10 Holdings 61.28    Others Equity Holdings 28.72    TOTAL 100

NAV Changed During the Month (GROWTH)

Date NAV Change % Change Beta

1, oct 2008 17.18     1.03

31, oct 2008 15.699 (-1.481) (-8.6) 1.03

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Compare returns with Sensex Movement

Date Closing Change % change30-Sep-08 8,634.48    

31-Oct-08 7,892.32 (-742)

(-8.59)

Core & Satellite Fund

Portfolio Top 10 Holdings For December

S. No. Company Industry% To NAV

1 Satyam Computer Services Ltd. Software 6.782 Bharat Heavy Electricals Ltd. Industrial Capital Goods 6.653 Tata Motors Ltd. Auto 6.334 State Bank of India Banks 6.215 Infosys Technologies Ltd. Software 5.56 Crompton Greaves Ltd. Industrial Capital Goods 5.357 Hindustan Construction Company Ltd. Construction 5.188 ITC Ltd. Consumer Non Durable 5.159 Hindalco Industries Ltd. Non- Ferrous Metals 4.14

10 Hindustan zinc Ltd. Non- Ferrous Metals 3.75    Top 10 Holdings 55.04    Others Equity Holdings 28.72    Total 100

NAV Changed During the Month (GROWTH)

Date NAV Change % Change Beta

1, Dec 2008 17.542     0.8730, Dec 2008 18.822 1.28 7.2

0.87

Compare returns with Sensex Movement

Date Closing Change % change30-Nov-

088,788.8

1    30-Dec- 9,397.9 609 6.92

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08 3

Industry Wise Allocation

October December

Industry % Of Allocation Industry% Of

AllocationIndustry Capital Goods 22.15 Industry Capital Goods 21.42Software 15.61 Software 14.03Banks 12.61 Auto Ancillaries 10.76Auto Ancillaries 11.12 Banks 9.75Non-Ferrous Metals 8.48 Non-Ferrous Metals 7.89Auto 7.17 Auto 6.33Pesticides 5.42 Construction 5.18Consumer Non Durable 5.27 Consumer Non Durable 5.15Construction 4.07 Pesticides 4.96Industrial Products 2.67 Industrial Products 2.94Chemicals 1.71 Chemicals 2.12Consumer Durables 1.29 Consumer Durables 1.43Power 0.53

Oct-Dec month portfolioIndustry ChangeIndustry Capital Goods -0.73Software -1.58Auto Ancillaries -0.36Banks -2.86Non-Ferrous Metals -0.59Auto -0.84Construction -0.5Consumer Non Durable 1.11Pesticides -0.12Industrial Products 0.27Chemicals 0.41Consumer Durables 0.14

Hindustan Construction Ltd. Share Benefit

Date Price Change % Change31, Oct 2008 853.85    31, Dec2008 127.2    

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Fund bought Hindustan Construction Ltd. shares.

Core & Satellite FundPortfolio Top 10 Holdings For January

S. No. Company Industry % To NAV1 Infosys Technologies Ltd. Software 8.942 Tata Motors Ltd. Auto 8.483 Bharat Heavy Electricals Ltd. Industrial Capital Goods 8.084 Satyam Computer Services Ltd. Software 6.445 Crompton Greaves Ltd. Industrial Capital Goods 5.986 State Bank of India Banks 5.697 ITC Ltd. Consumer Non Durable 5.268 Hindustan zinc Ltd. Non- Ferrous Metals 5.259 Hindalco Industries Ltd. Non- Ferrous Metals 4.79

10 United Phosphorus Ltd. Pesticides 3.91    Top 10 Holdings 62.82    Others Equity Holdings 37.18    Total 100

NAV Changed During the Month (GROWTH)

Date NAV Change % Change Beta

1, Jan 2009 18.822     0.9031, Jan 2009 20.609 1.78 9.49

0.90

Compare returns with Sensex movement

Date Closing Change % change30-Dec-

089,397.9

3    31-Jan-

099,919.8

9 522 5.55

Industry Wise Allocation

December JanuaryIndustry % Of Allocation Industry % Of Allocation

Industry Capital Goods 21.42Industry Capital Goods 24.12

Software 14.03 Software 16.99

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Auto Ancillaries 10.76 Non-Ferrous Metals 10.04Banks 9.75 Banks 9.73Non-Ferrous Metals 7.89 Auto Ancillaries 8.99Auto 6.33 Auto 8.48

Construction 5.18Consumer Non Durable 5.26

Consumer Non Durable 5.15 Pesticides 3.91Pesticides 4.96 Construction 3.73Industrial Products 2.94 Industrial Products 3.52Chemicals 2.12 Consumer Durables 1.43Consumer Durables 1.43 Chemicals 1.01

Dec-Jan month portfolioIndustry ChangeIndustry Capital Goods 2.7Software 2.96Non-Ferrous Metals 2.15Banks -0.02Auto Ancillaries -1.77Auto 2.15Consumer Non Durable 0.11Pesticides -1.05Construction -1.45Industrial Products 0.58Consumer Durables NilChemicals -1.11

Infosys Share effect

Date Price Change% Change

31, Dec2008 2979.4    31, Jan 2009 2880.3 -99.1  3.33

Fund has increased the share of Infosys in to portfolio by 3.5%. The share price of Infosys during that time period has failed down to 2880.3 Rs. Its 3.33% lower than the price in the beginning of January.

Core & Satellite Fund

Portfolio Top 10 Holdings For FebruaryS. No. Company Industry % To NAV

1 Bharat Heavy Electricals Ltd. Industrial Capital Goods 8.872 Tata Motors Ltd. Auto 8.743 Infosys Technologies Ltd. Software 8.53

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4 State Bank of India Banks 7.525 Satyam Computer Services Ltd. Software 6.456 Hindustan zinc Ltd. Non- Ferrous Metals 6.057 Crompton Greaves Ltd. Industrial Capital Goods 5.728 ITC Ltd. Consumer Non Durable 5.79 Hindalco Industries Ltd. Non- Ferrous Metals 4.22

10 Bharti Shipyard Ltd. Industrial Capital Goods 3.84    Top 10 Holdings 65.64    Others Equity Holdings 34.39    Total 100

NAV Changed During the Month (GROWTH)

Date NAV Change % Change Beta

1, Feb 2009 20.609     0.9128, Feb 2009 21.159 0.55 2.66

0.91

Compare returns with Sensex Movement

Date Closing Change

% Change

31-Jan-09 9,919.89    

28-Feb-09 8800 1119.89 -11.29

In February fund has given 2.66% returns on investment but in the same time Sensex has decreased by 4.54%. So, fund has performed higher than market trend.

Industry Wise Allocation

January FebruaryIndustry % Of Allocation Industry % Of AllocationIndustry Capital Goods 24.12 Industry Capital Goods 21.64Software 16.99 Software 16.63Non-Ferrous Metals 10.04 Banks 10.79Banks 9.73 Non-Ferrous Metals 10.27Auto Ancillaries 8.99 Auto Ancillaries 9.02

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Auto 8.48 Auto 8.74Consumer Non Durable 5.26 Consumer Non Durable 5.7Pesticides 3.91 Pesticides 3.78Construction 3.73 Construction 3.63Industrial Products 3.52 Industrial Products 3.51Consumer Durables 1.43 Power 2.62Chemicals 1.01 Consumer Durables 1.49

Chemicals 0.89

Jan-Feb month portfolio

Industry ChangeIndustry Capital Goods -2.48Software -0.36Banks 1.06Non-Ferrous Metals 0.23Auto Ancillaries 0.03Auto 0.26Consumer Non Durable 0.44Pesticides -0.13Construction -0.16Industrial Products -0.01Power 2.62Consumer Durables 0.06Chemicals -0.12

United Phosphorus Ltd. Share’s effect

Date Price Change% Change

31, Jan 2009 272    28, Feb 2009 270 2  0.07

Reduce the share of united phosphorus ltd. from portfolio. The share price of united has fall during February.

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Core & Satellite FundPortfolio Top 10 Holdings For March

S. No. Company Industry % To NAV1 Tata Motors Ltd. Auto 7.99

2 Bharat Heavy Electricals Ltd.Industrial Capital Goods 7.87

3 Infosys Technologies Ltd. Software 7.53

4 Crompton Greaves Ltd.Industrial Capital Goods 7.53

5 Hindustan zinc Ltd. Non- Ferrous Metals 7.346 State Bank of India Banks 6.95

7 ITC Ltd.Consumer Non Durable 6.62

8 Satyam Computer Services Ltd. Software 5.969 Hindalco Industries Ltd. Non- Ferrous Metals 4.29

10Hindustan Construction Company Ltd. Construction 3.84

    Top 10 Holdings 65.92    Others Equity Holdings 34.08    Total 100

NAV Changed During the Month (GROWTH)

Date NAV Change % Change Beta

1, Mar 2009 21.159     0.86

31, Mar 2009 23.82 2.661 12.57 0.86

Compare returns with Sensex Movement

Date Closing Change% change

28-Feb-06 8800    

31-Mar-06

11,279.96 2479.96 28.18

Industry Wise Allocation

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February MarchIndustry % Of Allocation Industry % Of AllocationIndustry Capital Goods 21.64 Industry Capital Goods 19.76Software 16.63 Software 15.12Banks 10.79 Non-Ferrous Metals 11.63Non-Ferrous Metals 10.27 Banks 10.62Auto Ancillaries 9.02 Auto Ancillaries 8.47Auto 8.74 Auto 7.99Consumer Non Durable 5.7 Consumer Non Durable 6.62Pesticides 3.78 Construction 3.84Construction 3.63 Power 3.16Industrial Products 3.51 Pesticides 3.15Power 2.62 Industrial Products 3Consumer Durables 1.49 Consumer Durables 1.51Chemicals 0.89 Chemicals 0.91

Feb-March month portfolioIndustry ChangeIndustry Capital Goods -1.88Software -1.51Non-Ferrous Metals 1.34Banks -0.18Auto Ancillaries -0.55Auto -0.75Consumer Non Durable 0.92Construction 0.21Power 0.54Pesticides -0.63Industrial Products -0.51Consumer Durables 0.02Chemicals 0.02

Bharti Shipyard Ltd. Share's effect

Date Price Change% Change

28, Feb 2009 383.85    31, March 2009 384.5 0.65  0.016

Reduce the share of Bharti ship yard in the month of March. The price of bhatri’s share has just increased by 0.016 % in March. Where the over all

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share market has boomed by 8.76%. in the same time fund increased the share of Crompton greaves in the portfolio which was boomed by 17.57%.

Portfolio as of January 31, 2009

DSP Merrill Lynch India T.I.G.E.R Fund Company Industry % to NAV

L&TIndustrial Capital Goods 4.79

Reliance Industries Petroleum Products 4.65

BHELIndustrial Capital Goods 4.64

ONGC Oil 3.05

SiemensIndustrial Capital Goods 2.95

ThermaxIndustrial Capital Goods 2.74

Grasim Industries Cement 2.67

Jyoti StructuresIndustrial Capital Goods 2.65

HDFC Finance 2.18Crompton Greaves

Industrial Capital Goods 2.15

NAV Changed During the Month (GROWTH)Date NAV Change % Change Beta

1, Jan 2009 21.5     1.6

31, Jan 2009 23.62 2.12 9.86

1.6

L&T share price      

Date Price Change% Change

1, Jan 2009 1825.65    31, Jan 2009 2172.1 346.45 18.97

DSP fund has given more returns than HDFC Core & Satellite fund. DSP has exposure of L&T which has grown by 18.97% during January. In January market has grown up only by 5.55%.

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Portfolio as of February 28, 2006DSP Merrill Lynch India T.I.G.E.R Fund

     Company Industry % to NAV

L&TIndustrial Capital Goods 4.29%

BHELIndustrial Capital Goods 4.25%

Reliance Industries Petroleum Products 3.74%Grasim Industries Cement 3.14%

SiemensIndustrial Capital Goods 2.99%

Bharati TeleVentures Telecom- Services 2.67%

ThermaxIndustrial Capital Goods 2.55%

ONGC Oil 2.27%HDFC Finance 2.19%

Jyoti StructuresIndustrial Capital Goods 2.14%

NAV Changed During the Month (GROWTH)

Date NAV Change % Change Beta

1, Feb 2009 23.62     1.78

28, Feb 2009 24.46 0.84 3.55

1.78

Grasim Industries share's price 

Date Price Change % Change1, Feb 2009 1454.25    28, Feb 2009 1742.6 288.35 19.82

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DSP has given 3.55% returns where HDFC has given only 2.55% returns in the month of February. DSP has exposure of Grasim Industry in their portfolio. Grasim has increased by 19.82% during February month.

Portfolio as of March 31, 2009 DSP Merrill Lynch India T.I.G.E.R Fund

   

Company Industry% to NAV

Reliance Industries Petroleum Products 5.87%Reliance Communications Telecom- Services 4.41%BHEL Industrial Capital Goods 4.28%Grasim Industries Cement 3.56%L&T Industrial Capital Goods 3.48%Bharati TeleVentures Telecom- Services 3.17%Siemens Industrial Capital Goods 2.82%Thermax Industrial Capital Goods 2.56%Jyoti Structures Industrial Capital Goods 2.26%Crompton Greaves Industrial Capital Goods 2.13%

NAV Changed During the Month (GROWTH)

Date NAV Change % Change Beta

1, Mar 2009 24.46     1.69

31, Mar 2009 27.36 2.9 11.85 1.69

Hindalco share's price

Date Price Change % change1, Mar 2009 75    31-Mar-09 182.7 107.7 143.6

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In March, DSP has given 11.85% returns where HDFC has given 12.54% returns. HDFC had Hindalco in their portfolio which has grown by 143.6% in March.

ICICI Dynamic Plan

January Portfolio

S. No. Companies % of NAV

1 Deccan Chronicle Holdings Ltd 7.18

2 Subex Systems Limited 4.02

3 Hindalco Industries Limited 3.89

4 E.I.D. Parry (India) Limited 3.49

5 State Bank of India 3.38

6 Bajaj Hindustan Limited 3.35

7 Reliance Industries Limited 3.18

8 Larsen & Toubro Limited 3.12

9Sterlite Industries (India) Limited 2.98

10 Grasim Industries Limited 2.98

Industry Wise Allocation

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NAV Changed During the Month (GROWTH)Date NAV Change % Change Beta

1, Jan 2009 42.68 0.9131, Jan 2009 44.51 1.83 4.28

0.91

Sterlite share's price

Date PriceChange

% change

1, Jan 2009

1074.75

31, Jan 2009

1363.45 288.75 26.86

Fund has 2.98% exposure of sterlite which has grown 26.86% in January month.

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ICICI Dynamic Plan February Portfolio

S. No. Companies % of NAV1 Deccan Chronicle Holdings Ltd 8.652 Jain Irrigation Systems Limited 4.53 Subex Systems Limited 4.014 E.I.D. Parry (India) Limited 3.655 Larsen & Toubro Limited 3.446 Grasim Industries Limited 3.347 Hindalco Industries Limited 3.218 Reliance Industries Limited 3.16

9Century Textiles & Industries Ltd 3.14

10 Amtek Ltd. 3.01

Industry Wise Allocation

NAV Changed During the Month (GROWTH)Date NAV Change % Change Beta

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1, Feb 2009 44.51 0.9828, Feb 2009 46.22 1.71 3.64

0.98

Century textile share's price Date Price Change % Change

1, Feb 2009 2.928, Feb 2009 2.9 Nil Nil

Dynamic plan has 3.14% exposure of this script which has grown by 0 % means its share price remained same during the month of February.

ICICI Dynamic Plan March Portfolio

S. No. Companies % of NAV1 Deccan Chronicle Holdings Ltd 7.312 Reliance Industries Limited 5.17

3Triveni Engineering & Industries Ltd 4.98

4 Jain Irrigation Systems Limited 3.895 Subex Systems Limited 3.76 Century Textiles & Industries Ltd 3.467 E.I.D. Parry (India) Limited 3.368 Tata Consultancy Services Limited 3.189 Grasim Industries Limited 2.97

10 Larsen & Toubro Limited 2.93

Industry Wise Allocation

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NAV Changed During the Month (GROWTH)Date NAV Change % Change Beta1, March 2009 46.22

0.95

31, March 2009 53.35 7.13 15.42

0.95

Triveni share's price

Date Price Change % change1, Mar 2009 76.95    

31-Mar-09125.9

5 49 64.47

Fund has increased triveni sharein portfolio to 4.98% which has grown by 64.47% during March.

Kotak Opportunity

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January

S. No. Companies Industry % of NAV1 National Aluminium Company Ltd Non - Ferrous Metals 6.66

2 Larsen And Toubro Ltd. Industrial Capital Goods 5.49

3 Jaiprakash Associates Ltd Construction 5.064 Punjab National Bank Banks 4.125 Satyam Computer Services Ltd. Software 3.596 Infosys Technologies Ltd. Software 3.57

7 Shree Renuka Sugars Ltd. Consumer Non Durables 3.5

8 Mahindra & Mahindra Ltd. Auto 3.38

9 Areva T and D India Ltd. Industrial Capital Goods 3.23

10 Alembic Ltd. Pharmaceuticals 3.11

Industry Wise Allocation

NAV Changed During the Month (GROWTH)

Date NAV Change % Change Beta

1, Jan 2009 20.45 1.2531, Jan 2009 22.021 1.571 7.68

1.25

Kotak Opportunity

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FebruaryS. No. Companies Industry % of NAV

1 Bajaj Auto Ltd. Auto 5.86

2 Larsen And Toubro Ltd. Industrial Capital Goods 5.31

3 Jaiprakash Associates Ltd Construction 4.534 Punjab National Bank Banks 4.515 Mahindra & Mahindra Ltd. Auto 4.236 Tata Steel Limited. Ferrous Metals 4.2

7 Areva T and D India Ltd.Industrial Capital Goods 3.47

8 Balrampur Chini Mills Ltd Consumer Non Durables 3.46

9Satyam Computer Services Ltd. Software 3.25

10 Jindal Steel & Power Ltd. Ferrous Metals 3.18

Industry Wise Allocation

NAV Changed During the Month (GROWTH)Date NAV Change % Change Beta

1, Feb 2009 22.021 1.12

28, Feb 2009 23.225 1.2 5.46 1.12

Kotak OpportunityMarch

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S. No. Companies Industry% of NAV

1 Jindal Steel & Power Ltd. Ferrous Metals 5.12 Tata Steel Limited. Ferrous Metals 4.643 National Aluminium Company Ltd Non - Ferrous Metals 4.384 Sterlite Industries (India) Ltd Non - Ferrous Metals 4.175 Satyam Computer Services Ltd. Software 3.936 Larsen And Toubro Ltd. Industrial Capital Goods 3.927 Maharashtra Seamless Ltd. Ferrous Metals 3.498 Ultratech Cement Ltd. Cement 3.379 Tata Chemicals Ltd. Fertilizers 3.27

10 Bajaj Auto Ltd. Auto 3.25

Industry Wise Allocation

NAV Changed During the Month (GROWTH)Date NAV Change % Change Beta1, March 2009 23.225

1.20

31, March 2009 25.89 2.66 11.47

1.20

CONCLUSION

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The performance of mutual funds in India in the initial phase was not even

closer to satisfactory level. People rarely understood, and of course investing

was out of question. But yes, some 24 million shareholders were accustomed

with guaranteed high returns by the beginning of liberalization of the industry

in 1992. This good record of UTI became marketing tool for new entrants. The

expectations of investors touched the sky in profitability factor. However,

people were miles away from the preparedness of risks factor after the

liberalization.

The annual composite rate of growth is expected 13.4% during the rest of the

decades. In the last 5 years we have seen annual growth rate of 9%.

According to the current growth rate, by year 2010, mutual fund assets will be

double.

The government is also helping in boosting mutual fund industry. Government

is emphasizing a lot on infrastructure development and social spending and

yet targeting a lower fiscal deficit. FIIs continued to be positive on emerging

markets in general and the Indian markets in particular. FIIs buying have

considerable portion in mutual funds buying.

Key Points:

Almost 100% growth in the last 6 years.(excepting 2008)

Our saving rate is over 30%, highest in the world. Only channel zing

these savings in mutual funds sector is required.

We have some 70 mutual funds which are much less than US having

more than 800. There is a big scope for expansion.

'B' and 'C' class cities are growing rapidly. Today most of the mutual

funds are concentrating on the 'A' class cities. Soon they will find scope

in the growing cities.

SEBI allowing the MFs to launch commodity mutual funds.

This year budget has increased the limit of investment in overseas

market by mutual funds to 33-35%.

During last financial year investment habit of India has increased by

25 % and it is expected to grow by 30 % this year.

RECOMMENDATIONS

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Portfolio Management In Mutual Funds

Studying the mutual fund industry I came to know that there are more then 700 types of funds available in the market. What I see that most of the fund managers who are investing in equity market are putting their funds into large cap funds which is of course more secure but it is giving less return to the investors. i thought of preparing my own portfolio by investing 25 percent in money market and the rest of the 75 percent in mid cap equity To provide investors with opportunities for long term growth in capital along with the liquidity of an open ended scheme by investing predominantly in a well diversified basket of equity stocks of companies and in debt and money market instruments.. The portfolio is mentioned below:-

EQUITYCompany Name % of Net AssetsMaharashtra Seamless Ltd 4.61 Infotech Enterprises Limited 4.33 Kesoram Industries Ltd 4.02 Gitanjali Gems Ltd. 3.18 KEC International Ltd. 3.08 Nagarjuna Construction Company Ltd 3.06 Thermax Limited 3.02 Pantaloon Retail (India) Ltd. Equity 2.89 Eastern Silk Industries Limited 2.81 3 i Infotech Limited. 2.68 Crompton Greaves Ltd 2.65 Welspun Gujarat Stahl Rohren Ltd 2.65 Hotel Leela Venture Ltd 2.51 Adlabs Films Limited 2.23 Mangalam Cement Ltd 2.19 Amtek Auto Ltd 2.17 KEI Industries 2.14 Elecon Engineering Company Ltd 2.09 India Cements Ltd 1.79 IVRCL Infrastructure & Projects Ltd. 1.67 Raymond Ltd 1.61 Opto Circuit Ltd. 1.52 SKF Bearings India Ltd 1.48 Crest Animation Studios Ltd 1.46 Ansal Properties & Industries Ltd 1.36 Gujarat Mineral Development Corporation Limited 1.3 Lupin Ltd. 0.97 Deepak Fertilizers & Petrochemicals Corp Ltd 0.93

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Portfolio Management In Mutual Funds

Usha Martin Ltd 0.93 RPG Transmission Ltd 0.86 Gujarat State Petronet Ltd. 0.78 Jagran Prakashan Ltd 0.75 Rajshree Sugars & Chemicals Ltd 0.66 Indo Asian Fuse Gear Ltd 0.65 Sri Adhikari Brothers Television Network Ltd 0.58 Global Vectra Helicorp Ltd 0.37 Sagar Cements Ltd 0.32 Bharati Shipyard 0.3 PVR Ltd. 0.3 K E C Infrastructure Ltd. 0.28 Dwarikesh Sugar Industries 0.26 Tanla Solutions Ltd 0.17 Mahindra Ugine Steel Company Ltd 0.16 Redington India Ltd. 0.15 Suryalakshmi Cotton Mills Ltd 0.15

Top Industry Allocation

Industry Allocation

Steel 8.35%Computers - Software & Education 7.18%Housing & Construction 6.09%Textiles 5.85%Diversified 5.63%Electricals & Electrical Equipments 5.44%Engineering & Industrial Machinery 5.11%Entertainment 4.57%Cement 4.30%Power Generation, Transmission & Equip 3.94%

Asset Allocation Equity Debt Money Market74.06 - 25.94

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MY LEARNING FROM PROJECT

I have learnt many things which I might not be able to learn under

class room training like looking at the stock market terminal and

analyzing the stocks and thereby deducing about their

performance and thus designing the portfolio on the basis of their

performances. I want to share some of experience or learning with

you.

First and the most important I learnt about Mutual Fund

Industry. Before this project I dint have much knowledge

about Mutual funds. But now I have good knowledge about

Mutual Funds.

I learnt about marketing elements also. How the companies,

banks and brokerage houses market their products in front of

customer in presence of competitor’s products.

I learnt about mutual funds as well as other products like

insurance, DMAT account, IPO, some of banking product

and transactions and some financial services offered by

Angel Broking Ltd.

I also learnt about the risk factor calculation of the mutual

funds, how the various broking firms calculate the risk factors

of various mutual funds.

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WEBOGRAPHY

hdfcfund.com google.com altavista.com investmart.com icicidirect.com amfiindia.com nseindia.com mutualfundsindia.com

BIBLIOGRAPHY

Book on “Portfolio Management” by ICFAI Press Magazine “AAG” by HDFC Bank, April issue. Business world