Comparative Analysis of Close Ended Mutual Fund on the Basis of Return

8/3/2019 Comparative Analysis of Close Ended Mutual Fund on the Basis of Return

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AA

Project ReportProject Report

OnOn

Comparative analysis of close endedComparative analysis of close endedmutual fund on the basis of return,mutual fund on the basis of return, risk & NAV for portfolio of Sundramrisk & NAV for portfolio of Sundram

bsp, Dsp black rock & Religarebsp, Dsp black rock & Religare mutual fund with movement in Niftymutual fund with movement in NiftyIndex on NSE for last eight QuartersIndex on NSE for last eight Quarters ending on june,2009 (A Case Studyending on june,2009 (A Case Study

of Stock Holding Corporation Ofof Stock Holding Corporation OfIndia LTD., Karnal)India LTD., Karnal)

Conducted at:Conducted at:

STOCK HOLDING CORPORATION OF INDIA LTD.

KARNAL

Submitted toSubmitted to::Kurukshetra University, KurukshetraKurukshetra University, Kurukshetra

In the partial fulfillment of the Requirement forIn the partial fulfillment of the Requirement for

the course ofthe course of

Masters in Business AdministrationMasters in Business Administration

Under Supervision of: Submitted By:MS. Shaili gupta VISHAL LUTHRA(Faculty) ROLL NO: 1116/08TIMT, Ynr MBA-Final

________________________________________


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DECLARATION

DECLARATION

This is to certify that I, vishal luthra the student of Tilak Raj Chadha

Institute Of Management & Tecnology (Timt) Institute of Management

studying in M.B.A. (IInd Sem.) Class Roll no.1116/08 & Univ. Roll No.-

has undergone summer training in STOCK HOLDING

CORPORATION OF INDIA LIMITED (SHCIL), for six weeks and have

submitted a project on the title Comparative analysis of close ended

mutual fund on the basis of return, risk & NAV for portfolio of Sundram

bsp, Dsp black rock & Religare mutual fund with movement in Nifty Index

on NSE for last eight Quarters ending on june,2009 as assigned by the

Company, for partial fulfillment of Degree of Master of Business

Administration (M.B.A.) to Kurukshetra University, Kurukshetra.

I solemnly declared that the work done by me is original and no copy

of it has been submit to any other Universities for award of any other degree

or on similar title and topic.

Tilak Raj Chadha Institute Of Management & Technology,(TIMT)M.L.N. Educational Complex, Yamuna Nagar-135001 (Haryana) India,Phone Numbers: 01732-220103, 234010, 234110, Fax: -91-1732-234110

Hostel: 01732-254848(Girls), 01732-221170(Boys)

E-mail: [email protected] Website: www.timt.ac.in
mailto:[email protected]://www.timt.ac.in/mailto:[email protected]://www.timt.ac.in/


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PREFACE

Project work is a part of our curriculum that gives us the

knowledge about the practical work in any organization and makes

are stand in an organization. This also helps to understand &

correlate the theoretical concepts better which remains uncovered

in the classrooms. I have prepared this report in the process of my

postgraduate diploma in business management.


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ACKNOWLEDGEMENT

Today after completing my training I feel a lot more relieved. But when I look

back I still remember the first day of my training. I was very much excited and a

bit nervous. I would never have had completed it if the staff members of the

personnel department had not helped me. I wish to express my humble thanks

towards all of them. First of all I would like to thank the supreme power, the

almighty God who is obviously the one who has always guided me to work on the

right path of life. Without his grace this would never come to be today's reality.

Next to him I would like to convey my sincere thanks to the management of Stock

holding Company of India Ltd, karnal for providing me ample opportunity to work

in this esteemed organization. I am deeply indebted to Dr. Vikas Daryal (Director)

for their valuable contribution during the academic session.

I also want to pay my sincere regards to Mr.vikas Gupta branch manager and

vikram jeet senior executive, karnal who guided me for the entire training and help

me to get acquaintance with various practical aspects of finance prevailing in the

industry.

Vishal luthra


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EXECUTIVE SUMMARY

Mutual fund is a mechanism for pooling the resources by issuing units to the

investors and investing funds in securities in accordance with objectives as

disclosed in offer document. Investments in securities are spread across a wide

cross-section of industries and sectors and thus the risk is reduced. Diversification

reduces the risk because all stocks may not move in the same direction in the same

proportion at the same time.

Mutual fund issues units to the investors in accordance with

quantum of money invested by them. Investors of mutual funds are known as unit

holders. The profits or losses are shared by the investors in proportion to their

investments. The mutual funds normally come out with a number of schemes with

different investment objectives, which are launched from time to time.

Mutual funds provide the vehicle for small investors to invest in financial market.

So it is very necessary for an investor to evaluate the performance of a mutual

fund before investing into it.

The present study is based on the past performance of various

open ended equity mutual funds scheme. The analytical tools such as Standard

Deviation, Alpha, Beta has been show the risk and return of the portfolio &

correlation between the fund return & market return has been used to show the

investment pattern in mutual fund industry.

At last, the study is helpful for an investor to evaluate his

existing portfolio as well as to take the decision regarding further investment.

CONTENTS


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Introduction

Profile of the study

Concept of mutual fund

History of Indian mutual fund industry

Why invest through a mutual fund

Association of mutual funds of India (AMFI)

SEBI code of conduct for intermediaries of mutual funds

Types of fund

life cycle of different investor

Names of AMC

Justification of study

Objectives of study

Literature Review

Research Methodology and Analytical Tools

Sampling &Sampling Design

Analytical Tools

Statistical Tools

Data Collection

Hypothesis Testing (T- test)

Limitations of Study

Results & Discussions/Findings

Recommendations

Bibliography

Annexure


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COMPANY BACKGROUND


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Introduction to the Company

Stock Holding Corporation of India Ltd. (SHCIL) was incorporated at the special

initiative of the Government of India as a Public Limited Company in 1986. It has been

jointly promoted and owned by the All India Banks and Financial Institutions, viz., LIC,

GIC and its subsidiaries, ICICI Bank, UTI, IDBI, IFCI and IIBI, all leaders in their fields

of business.

SHCIL began by offering custodial and post trading services, adding depository services

and other services to its portfolio over a period of time.

SHCIL has established itself in India as a one-stop solution provider in the Financial

Services domain.

SHCIL maintains dedicated communication channels, well connected to Client

institutions, Stock Exchanges, Clearing houses and Depositories, thus maintaining

process & quality leadership.

As a custodian entrusted with sizeable assets, SHCIL is continuously leveraging its scale

and capabilities to help its clients mitigate risk and optimise efficiencies with greater

control.

VISION


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To be a global major in providing complete investment solutions, with relentless focus on

investor care, through superior efficiency and complete transparency.

APPROACH

VALUE FOR INVESTORS TRUST:SHCIL values the trust reposed in by theclients and is committed to uphold it at all cost.

INTEGRITY AND HONESTY: Integrity, honesty and transparency are theunderlying principles in all our dealings.

PERSONALISZED ATTENTION: The most valued asset is our relationshipwith the clients, which has been built over years by giving personalized attention.

NETWORK WHICH WORKS: SHCIL has a vast network extending to 200+cities/towns ensuring easy accessibility, convenience and hassle free trading experience

RESEARCH BASED ADVISORY SERVICES:SHCIL offers proactive andtimely world class research based advice and guidance to its clients to enable them to

take informed decisions.

CoreValuesof SHCIL

1. Safety & Efficiency of Operations is a hallmark of SHCIL

2. Professionalism & Integrity

3. Customer First

4. Relationship building

5. Commitment to Quality irrespectiveof asset size


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COREVALUES


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SERVICESPROVIDEDBYTHECOMPANY

Financial Institutions

Mutual Funds

Banks (Nationalised, Scheduled, Public Sector, Private Sector,Co-operative,

Foreign)

Insurance Companies

foreign Institutional Investors

Corporates

Venture Capital Companies

Foreign Venture Capital Companies

PF Trusts

Clearing and Settlement services

Post tradingservices

SHCIL has specially trained personnel handling thousands of trade instructions involving

large values on sophisticated systems using digital signature on STP (Straight Through

Processing) systems, ensuring smooth trade confirmations to Stock Exchanges.Physical Custody (Vault) Services

SHCIL has extensive Vault capacity with state-of-the-art technology . This includes

tracking with bar-coding techniques. Certificates are held in customised, fire resistant

Modular Sliding Storage Units, with automated location tracking, and Logs with tight

security

Institutionaldpservices

Depositories, viz. NSDL (National Securities Depository Ltd.) and CDSL (Central

SHCIL has installed dedicated DPMs (Depository Participant Modules) on both the

Depository Services (India) Ltd).


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Client Relationship Management

Every Institutional client is assigned to an experienced Client Relationship Manager who

assists in resolving special issues relating to the client.

Over and above the services offered we have a premium offering called ADVAIT, an

integrated, web-based, online reporting system which provides a single window access to

institutional reports with enhanced security features

Derivatives Processing (Custodian & Clearing)

Mutual Fund Distribution utilizing our Pan-India presence with more than 150 centers in

A, B, C class cities and towns of India.

SHCIL PRODUCTS


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ADD SHARESUse the dematerialized shares in your account as a collateral to get you a loan.

EQUIBUY

Purchase shares now without coordinating with brokers or worrying about your

settlement obligation at the exchange.

FUND INVEST

Invest in a wide range of Mutual Funds schemes.

GOI BONDS

Subscribe to Relief Bonds issued by the GOI and hold them in the electronic mode with

SHCIL, RBI authorized intermediary.

INSURANCE

Corporate Agent of Life Insurance Corporation for Life Insurance products and New

India Assurance for Non-Life Insurance products.

STOCK DIRECTHelps you combine your buy and sell of shares, your settlement and fund transfer all at

one go.

OurFinancials


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We are a zero-debt financially sound company with healthy reserves. We have a

consistent dividend-paying track record.

Highly Authenticated Research Team

SHCIL is having a high tech in-house research wing equipped with highly experienced

personnel & latest technical tools to give right advice at the right time to its clients.

The research based advisory support is forwarded to the clients in the following ways:

Weekly research magazine Wise Money distributed to clients

Research Based SMS support to clients for equities.

Live interactive chat rooms with the market experts during trading hours.

Fundamental Research reports sent to clients.

Daily market update reports sent through E-mails twice daily (morning mantra

and evening buzzer).

Investor awareness seminars conducted across the country on a regular basis.

SHCIL as one Stop Solution for financial Services.

SHCILs core competence in Custodial business spans 18 years, with a dedicated pool of

trained and experienced professionals working literally round the clock using state-of-art

computer systems and world class technology.

SHCIL maintains dedicated communication channels, well connected to Client

institutions, Stock Exchanges, Clearing houses and Depositories, thus maintaining

process & quality leadership.


and capabilities to help its clients mitigate risk and optimize efficiencies with greater

control. It is also Providers of one of the best trading platforms in terms of speed,

convenience and risk management to trade inNSE, BSE, F&O, NCDEX, and MCX &

DGCX.

Accolades and Certifications


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Citation and Medal from Smithsonian Institute, Washington D.C, U.S.A. for " Visionary

and Innovative use of Technology in Finance, Banking and Insurance Industry". First

South Asian Corporate to receive this.

Computer Society of India Award for best IT usage in the Country

Our software processes have been assessed at SEI CMM Level 3.

Accepted industry leader and pioneer in Custodial Systems.

Our Technology

Comprehensive business solutions adept in handling high volume time critical

transactions within a secured environment.

Zero error approach towards delivery of products and services

Single window view of business and up-to date information

Oracle database currently of 1.6 Terabytes size (and growing) managed by

competent IT personnel with domain expertise.

Data mirroring using cluster technology and fibre optic connection as part of

Disaster Management Plan

Network Security using Firewall, Proxy, Intrusion Detection System(IDS) and

Intrusion Prevention System (IPS)

Internet products with built in PKI features.

Dedicated communication channels with built-in redundancies in connectivity to

Client Institutions, Stock Exchanges, Clearing houses and Depositories

Why SHCIL?


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Why you would choose SHCIL as a preferred Service Provider

Well integrated front and back office, paper and electronic systems. A focused

Client Relation Team to manage your needs & queries. A single point contact for

your comfort.

In-house capability to address all IT needs in terms of software development,

maintenance, back office processing, database administration, network

maintenance, backups and disaster recovery.

Multilevel security is maintained in software, applications and guards to access to

various data, client and internal reports.

Expertise in running processes utilizing digital signatures.

Regular Audits internal and external, by SEBI, Depositories, Clients and

compliance to rules and regulations.

Constant review and benchmarking of processes to ensure adherence to global

best practices.

Insurance cover with international re-insurance.

Full Confidentiality of business operations.

Achievements

SHCIL began by offering custodial and post trading services, adding depository services

and other services to its portfolio over a period of time.SHCIL has established itself in

India as a one-stop solution provider in the Financial Services domain.

ISO 9001:2000 certified DP for both shares and commodities

SHCILs core competence in Custodial business spans 18 years, with a dedicated pool of

trained and experienced professionals working literally round the clock using state-of-art

computer systems and world class technologySHCIL maintains dedicated communication

channels, well connected to Client institutions, Stock Exchanges, Clearing houses and

Depositories, thus maintaining process & quality leadership.


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and capabilities to help its clients mitigate risk and optimize efficiencies with greater

control.

Our Depository Participant services address your individual investment needs. With a

parentage of leading financial institutions and insurance majors and a proven track record

in the Custodian business, we have reiterated our past success by establishing ourselves

as the first ever and largest Depository Participant in India.

SHCIL's long-standing association with Clearing Members has enabled it to develop

services based on an understanding of their working and their requirement for timely and

accurate information. We currently offer Depository services to more than 680 clearing

members of various exchanges connected with NSDL and CDSL. Our Customer Care

lines answer all your DP queries while the Interactive Voice Response (IVR) system

gives you information on your account and other valuable data like CC calendar details,

tariff, ISIN information, etc. via telephone, fax and e-mail.

Everyone wants to be rich and wealthy. But to amass wealth and make it grow, it is

necessary for one to invest wisely. Then SMC Global became long and exciting journey.

Where service of a knowledgeable and trustworthy guide is invaluable and imperative to

make journey easier and more enjoyable. Mutual Funds became a part of the company

three years before i.e. from July 2005. The company has grown radically in the mutual

fund industry and has able to get a noticeable position.


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Founders and Promoters

Stock Holding Corporation of India Ltd. (SHCIL) was incorporated at the special

initiative of the Government of India as a Public Limited Company in 1986. It has been

jointly promoted and owned by the All India Banks and Financial Institutions, viz., LIC,

GIC and its subsidiaries, ICICI Bank, UTI, IDBI, IFCI and IIBI, all leaders in their fields

of business.

SHCIL began by offering custodial and post trading

services, adding depository services and other services to its portfolio over a period of

time.SHCIL has established itself in India as a one-stop solution provider in the Financial

Services domain.SHCIL has a network of 190 branches spread across the countryproviding services at your doorstep. Please select your state to locate the nearest branch

address and contact details. Call up any of our nearest branch for information on Products

and Services.


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Theory without practice is sterile,

Practice without theory is blind

MUTUAL FUND

A mutual fund is a trust that pools the savings of a number of investors with common

financial goals. The collected money is invested in various instruments like debentures,

shares, etc. The income generated from these instruments and the capital appreciation is

shared by the investors in proportion to the number of units owned by them.

Mutual fund is a mechanism for pooling the resources by issuing units to the investorsand investing funds in securities in accordance with objectives as disclosed in offer

document. Investments in securities are spread across a wide cross-section of industries

and sectors and thus the risk is reduced. Diversification reduces the risk because all

stocks may not move in the same direction in the same proportion at the same time.

Mutual fund issues units to the investors in accordance with quantum of money invested

by them. Investors of mutual funds are known as unit holders. The profits or losses are

shared by the investors in proportion to their investments. The mutual funds normally

come out with a number of schemes with different investment objectives, which are

launched from time to time.

Unit Trust of India (UTI) was the first mutual fund set up in India in the year1963. In

early 1990s, Government allowed public sector banks and institutions to set up mutual

funds. SEBI formulates policies and regulates the mutual funds to protect the interest of

the investors. All mutual funds whether promoted by public sector or private sector

entities including those promoted by foreign entities are governed by the same set of

Regulation


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A mutual fund is set up in the form of a trust, which has sponsor, trustees, Asset

Management Company (AMC) and custodian. The trust is established by a sponsor

or more than one sponsor who is like promoter of a company. The trustees of the

mutual fund hold its property for the benefit of the unit holders. Asset Management

Company (AMC) approved by SEBI manages the funds by making investments in

various types securities.

Mutual fund operation flow chart:--

Investors

Pool their

Passed back to money with

Returns Fund Manager

Securities

Custodian, who is registered with SEBI, holds the securities of various schemes of the

fund in its custody. The trustees are vested with the general power of superintendence

and direction over AMC. They monitor the performance and compliance of SEBI

Regulations by the mutual fund.

The performance of a particular scheme of a mutual fund is denoted by Net Asset Value

(NAV). In simple words, Net Asset Value is the market value of the securities held by the


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scheme. Since market value of securities changes every day, NAV of a scheme also

varies on day-to-day basis. The NAV per unit is the market value of securities of a

scheme divided by the total number of units of the scheme on any particular date. For

example, if the market value of securities of a mutual fund scheme is Rs 200 lakhs and

the mutual fund has issued 10 lakhs units of Rs. 10 each to the investors, then the NAV

per unit of the fund is Rs.20. NAV is required to be disclosed by the mutual funds on a

regular basis - daily or weekly - depending on the type of scheme.

CONCEPT

A Mutual Fund is a trust that pools the savings of a number of investors who share acommon financial goal. The money thus collected is then invested in capital market

instruments such as shares, debentures and other securities. The income earned through

these investments and the capital appreciations realized are shared by its unit holders in

proportion to the number of units owned by them. Thus a Mutual Fund is the most

suitable investment for the common man as it offers an opportunity to invest in a

diversified, professionally managed basket of securities at a relatively low cost. The flow

chart below describes broadly the working of a mutual fund:


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HISTORY OF INDIAN MUTUAL FUNDINDUSTRY

The mutual fund industry in India started in 1963 with the formation of Unit Trust of

India, at the initiative of the Government of India and Reserve Bank the. The history ofmutual funds in India can be broadly divided into four distinct phases

First Phase 1964-87


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Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up

by the Reserve Bank of India and functioned under the Regulatory and administrative

control of the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the

Industrial Development Bank of India (IDBI) took over the regulatory and administrative

control in place of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the

end of 1988 UTI had Rs.6,700 crores of assets under management.

Second Phase 1987-1993 (Entry of Public Sector Funds)

1987 marked the entry of non- UTI, public sector mutual funds set up by public sector

banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation

of India (GIC). SBI Mutual Fund was the first non- UTI Mutual Fund established in June

1987 followed by Can bank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund

(Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda

Mutual Fund (Oct 92). LIC established its mutual fund in June 1989 while GIC had set

up its mutual fund in December 1990.

At the end of 1993, the mutual fund industry had assets under management of Rs.47,004

crores.

Third Phase 1993-2003 (Entry of Private Sector Funds)

With the entry of private sector funds in 1993, a new era started in the Indian mutual fund

industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the

year in which the first Mutual Fund Regulations came into being, under which all mutual

funds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer

(now merged with Franklin Templeton) was the first private sector mutual fund registered

in July 1993.

The 1993 SEBI (Mutual Fund) Regulations were substituted by a more

comprehensive and revised Mutual Fund Regulations in 1996. The industry now

functions under the SEBI (Mutual Fund) Regulations 1996.


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The number of mutual fund houses went on increasing, with many foreign mutual funds

setting up funds in India and also the industry has witnessed several mergers and

acquisitions. As at the end of January 2003, there were 33 mutual funds with total assets

of Rs.1,21,805 crores. The Unit Trust of India with Rs.44,541 crores of assets under

management was way ahead of other mutual funds.

Fourth Phase since February 2003

In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was

bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust

of India with assets under management of Rs.29, 835 crores as at the end of January

2003, representing broadly, the assets of US 64 scheme, assured return and certain other

schemes. The Specified Undertaking of Unit Trust of India, functioning under an

administrator and under the rules framed by Government of India and does not come

under the purview of the Mutual Fund Regulations.

The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is

registered with SEBI and functions under the Mutual Fund Regulations. With the

bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76,000 crores of

assets under management and with the setting up of a UTI Mutual Fund, conforming to

the SEBI Mutual Fund Regulations, and with recent mergers taking place among

different private sector funds, the mutual fund industry has entered its current phase of

consolidation and growth. As at the end of September, 2004, there were 29 funds, which

manage assets of Rs.153108 crores under 421 schemes.

Structure of the Indian mutual fund industry

The Indian mutual fund industry is dominated by the Unit Trust of India, which has a

total corpus of Rs700bn collected from more than 20 million investors. The UTI has

many funds/schemes in all categories i.e. equity, balanced, income etc with some being

open-ended and some being closed-ended. The Unit Scheme 1964 commonly referred to

as US 64, which is a balanced fund, is the biggest scheme with a corpus of about


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Rs200bn. Most of its investors believe that the UTI is government owned and controlled,

which, while legally incorrect, is true for all practical purposes.

The second largest category of mutual funds is the ones floated by nationalized banks.

Can bank Asset Management floated by Canara Bank and SBI Funds Management

floated by the State Bank of India are the largest of these. GIC AMC floated by General

Insurance Corporation and Jeevan Bima Sahayog AMC floated by the LIC are some of

the other prominent ones.


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The structure indicated by the new regulations is indicated as under:

A Mutual Fund Company of four separate entities, namely Sponsor, Trustee, AMC

(Asset Management Company) and Custodian.

SponsorThe sponsor is the promoter of the Mutual Fund and gets it registered with SEBI.Sponsor

appoints the trustees, custodians and the AMC with prior approval of SEBI, and in

accordance with SEBI regulations. The sponsor is required to contribute at least 40% of

the minimum net worth (Rs. 10 crore) of the Asset Management Company.

Trustee

In India, Mutual Funds are organized as trusts. The trust is created by sponsor, who isctually the entity interested in creating the Mutual Fund Business. The Mutual und, which

is a trust, is managed by a by a trust company or a Board of trustees.


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The Provisions of the Indian trust Act govern board of trustees and trust companies.

If the Trustee is a Company; it is also subject to the provisions of the Indian Companies

Act. The sponsor executes and registers a trust deed in favor of the trustees. SEBI

Regulations stipulate that the trustees are fully responsible for the compliance of theMutual Funds with SEBI regulations, and for the protection of the interest of the Mutual

Fund investors.

Asset Management Company

The trustees, on the advice of the sponsors, usually appoint the AMC. The trust deed

authorizes the trustees to appoint the AMC. The AMC is usually a private limited

company, in which the sponsors and their associates or joint venture partners are

shareholders. The AMC has to be a SEBI registered entity, and should have a minimum

net worth of Rs.10 crore. The trustees sign an investment agreement with the AMC,

which spells out the functions of the AMC. Though the trust is the Mutual Fund, the

AMC is its operational face. The AMC structures the Mutual Fund products, markets

them and mobilizes the funds of the investors, according to the mandate they receive

from the trustees. The fee is defined as a percentage of the funds managed by the AMC.

Against this fee, the AMC will bear all its operational expenses. Resultant profits wouldbe available for distribution to the sponsors.


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AMCs can be of following types:

AMCs owned by Banks.

AMCs owned by Financial Institutions.

AMC s owned by Indian Private Sector Companies.

AMCs owned by Foreign Institutional Investors.

AMCs owned by Indian & Foreign Sponsors.

Custodians

Custodians are responsible for the securities held in the Mutual Funds portfolio. They

ensure that securities that are bought are delivered and transferred to the books of the

Mutual Funds, and that Funds are paid out when a Mutual Fund buys securities.

Custodians also track corporate actions like bonus issues, right offers, offer for sale, buy

back & open offers for acquisitions.

Why invest through a Mutual Fund

Affordability: Mutual funds allow you to start with small investments. For example,

if you want to buy a portfolio of blue chips of modest size, you should at least have a few


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lakhs of rupees. A mutual fund gives you the same portfolio for meager investment of Rs

1,000-5,000. A mutual fund can do that because it collects money from many people and

it has a large corpus.

Professional management: The major advantage of investing in a mutual fund is

that you get a professional money manager for a small fee. You can leave the investment

decisions to him and only have to monitor the performance of the fund at regular

intervals.

Diversification: Considered the essential tool in risk management, Mutual Funds makes

it possible for even small investors to diversify their portfolio. A mutual fund can

effectively diversify its portfolio because of the large corpus. However, a small investor

cannot have a well-diversified portfolio because it calls for large investment. For

example, a modest portfolio of 10 blue-chip stocks calls for a few a few thousands.

Convenience: Mutual funds offer tailor-made solutions like systematic investment

plans and systematic withdrawal plans to investors, which is very convenient to investors.

Investors also do not have to worry about the investment decisions or they do not have to

deal with their brokerage or depository, etc. for buying or selling of securities. Mutual

funds also offer specialized schemes like retirement plan, childrens plan, industry

specific schemes, etc. to suit personal preference of investors. These schemes also help

small investors with asset allocation of their corpus. It also saves a lot of paper work.

Cost effectiveness: A small investor will find that a mutual fund route is a cost

effective method. AMC fee is normally 2.5% and they also save a lot of Transaction costs

as they get concession from brokerages. Also, they get the service of a financial

professional for a very small fee. If they were to seek a financial advisor's help directly,

they may end up pay more. Also, the size of the corpus should be large to get the service

of investment experts, who offer portfolio management.

Liquidity: You can liquidate your investments anytime you want. Most mutual funds

dispatch checks for redemption proceeds within two or three working days. You also do


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not have to pay any penal interest in most cases. However, some schemes charge an exit

load.

Tax breaks: You do not have to pay any taxes on dividends issued by mutual funds.

You also have the advantage of capital gains taxation. Tax-saving schemes and pension

schemes give you the added advantage of benefits under Section 88. Investments up to Rs

10,000 in them qualify for tax rebate.

Transparency: Mutual funds offer daily NAVs of schemes, which help you to

monitor your investments on a regular basis. They also send quarterly newsletters, which

give details of the portfolio, performance of schemes against various benchmarks, etc.

They are also well regulated and SEBI monitors their actions closely.

DISADVANTAGES

Costs Despite Negative Returns

Investors must pay sales charges, annual fees, and other expenses (which we'll

discuss below) regardless of how the fund performs. And, depending on the timing of

their investment, investors may also have to pay taxes on any capital gains

distribution they receive even if the fund went on to perform poorly after they

bought shares.

Lack of Control

Investors typically cannot ascertain the exact make-up of a fund's portfolio at any

given time, nor can they directly influence which securities the fund manager buys

and sells or the timing of those trades.


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Price Uncertainty

With an individual stock, you can obtain real-time (or close to real-time) pricing

information with relative ease by checking financial websites or by calling your

broker. You can also monitor how a stock's price changes from hour to hour or even

second to second. By contrast, with a mutual fund, the price at which you purchase or

redeem shares will typically depend on the fund's NAV, which the fund might not

calculate until many hours after you've placed your order. In general, mutual funds

must calculate their NAV at least once every business day, typically after the major

U.S. exchanges close.

Association of Mutual Funds of India (AMFI)

With the Increase in Mutual und players in India, a need for Mutual fund association was

generated to function as a non-profit organization. Association of Mutual Fund of India

(AMFI) was incorporated on 22nd August 1995.


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AMFI is governed by a board of directors elected from Mutual Funds and its headed by

a full time chairman.

AMFI is not a registered SRO (Self Regulatory Organization), and therefore can only

issue guidelines to members. It cannot enforce regulation. However, in order to enable

orderly growth of the industry, and bring about uniformity and standards in practice, most

members tend to abide by the guidelines.

Objectives of AMFI

To define and maintain high professional and ethical standards in all areas of

operation of Mutual fund industry.

To recommend and promote best business practices and code of conduct to be

followed by members and others engaged in the activities of mutual fund and

asset management including agencies connected or involved in the field of capital

markets and financial services.

To interact with the Securities and Exchange Board of India (SEBI) and to

represent to SEBI on all matters concerning the mutual fund industry.

To represent to the Government, Reserve Bank of India and other bodies on all

matters relating to the Mutual Fund Industry.

To develop a cadre of well-trained Agent distributors and to implement aprogramme of training and certification for all intermediaries and other engaged

in the industry.

To undertake nation wide investor awareness programme so as to promote proper

understanding of the concept and working of mutual funds.

To disseminate information on Mutual Fund Industry and to undertake studies and

research directly and/or in association with other bodies.

SEBI Code of Conduct for Intermediaries of Mutual

Funds

Take necessary steps to ensure that the clients' interest is protected


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Adhere to SEBI Mutual Fund Regulations and guidelines related to selling,

distribution and advertising practices. Be fully conversant with the key provisions

of the offer document as well as the operational requirements of various schemes.

Provide full and latest information of schemes to investors in the form of offer

documents, performance reports, fact sheets, portfolio disclosures and brochures,

and recommend schemes appropriate for the client's situation and needs.

Highlight risk factors of each scheme, avoid misrepresentation and

exaggeration, and urge investors to go through offer documents/key information

memorandum before deciding to make investments.

Disclose all material information related to the schemes/plans while canvassing

for business.

Abstain from indicating or assuring returns in any type of scheme, unless the

offer document is explicit in this regard.

Maintain necessary infrastructure to support the AMCs in maintaining high

service standards to investors, and ensure that critical operations such as forwarding

forms and cheques to AMCs/Registrars and dispatch of statement of account and

redemption cheques to investors are done within the time frame prescribed in the

offer document and SEBI Mutual Fund Regulations.

Avoid colluding with clients in faulty business practices such as bouncing

cheques, wrong claiming of dividend/redemption cheques, etc.

Avoid commission driven malpractices such as:

(a) recommending inappropriate products solely because the intermediary is getting

higher commissions there from.

(b) Encouraging over transacting and churning of mutual fund investments

to earn higher commissions, even if they mean higher transaction costs and

tax for investors.

Avoid making negative statements about any AMC or scheme and ensure that

comparisons if any are made with similar and comparable products.


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Ensure that all investor related statutory communications (such as changes in

fundamental attributes, exit/entry load, exit options, and other material

aspects) are sent to investors reliably and on time.

Maintain confidentiality of all investor deals and transactions.

When marketing various schemes, remember that a client's interest and

suitability to their financial needs is paramount, and that extra commission or

incentive earned should never form the basis for recommending a scheme to

the client.

Intermediaries will not rebate commission back to investors and avoid

attracting clients through temptation of rebate/gifts etc.

A focus on financial planning and advisory services ensures correct selling,

and also reduces the trend towards investors asking for pass back of

commission.

All employees engaged in sales and marketing should obtain AMFI

certification. Employees in other functional areas should also be encouraged

to obtain the same certification


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Choice offered by a Mutual Fund to the Investor

Mutual Funds are investment portfolios that invest in financial market instruments. These

portfolios are created by pooling investor contributions, usually denominated in units.

There are a variety of ways in which Mutual Funds are created, to cater to the varied risk

and return requirements of investors. Depending on the investment portfolios that are

created, and the segments of the various markets in which funds are invested, there is

choices of funds to investor.

Mutual Funds can offer further Generic choices to the Investors interms of:

Nature of participation: Open or Closed ended Nature of Income distribution: Dividend, Growth, and Re-investment of

dividends.

Open-ended Funds/Schemes

These funds are sold at the NAV based prices, generally calculated on every business

day. These schemes have unlimited capitalization, Open-ended schemes do not have a

fixed maturity, i.e. there is no cap on the amount you can buy from the fund and the unit

capital can keep growing. These funds are not generally listed on any exchange.

Open-ended funds are bringing in a revival of the Mutual Fund industry, owing to

increased liquidity, transparency and performance in the new Open-ended funds

prompted by the private sector and foreign players.

Close-ended Funds/Schemes

Schemes that have stipulated maturity period, limited capitalization and the units are

listed on the stock exchange are called Closed-ended schemes. These schemes have

historically scene a lot of subscription. This popularity is estimated to be on account of

firstly, public sector Mutual Funds having floated a lot of Closed-ended income schemes


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with guaranteed returns and secondly easy liquidity on account of listed on the stock

exchanges.

Dividend OptionInvestors, who choose a dividend option on their investments, will receive dividend from

the Mutual Fund, as and when dividends are declared. Dividends are paid in the form of

warrants, or are directly credited to the investors bank account.

In a normal dividend plan, periodicity of dividend is left to the Fund Managers, who may

pay annual or an interim dividend. Fund Managers decide the time of the payouts.

Mutual Funds provide investors the option of receiving dividends at pre-determined

frequencies, which can vary from daily, weekly, monthly, quarterly, half yearly and

annually. The NAV of these investors holding will vary with changes in the value of the

portfolio.

Growth Option

Investors who do not require periodic income distributions can choose the Growth

Option, where the incomes earned are retained in the investment portfolio, and allowed to

grow, rather than being distributed to the investors. Investors with longer-term

investment horizons, and limited requirements for income, choose this option The

returned to the investor who chooses a Growth option is the rate at which his initial

investment has grown over the period for which he has invested in the Fund.

Re-investment Option

Mutual Funds also provide option to investors in the form of Re-investment. Investors

Re-invest the dividends that are declared by the Mutual fund, back into the Fund itself, atNAV that is prevalent at the time of Re-investment. In this option, the number of units

held by the investor will change with every Re-investment. The value of the units will be

similar to that under the dividend option.


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Types of Fund


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Classification on the Basis of Structure

Open-ended Funds

An open-end fund is one that is available for subscription all through the year. These do

not have a fixed maturity. Investors can conveniently buy and sell units at Net Asset

Value ("NAV") related prices. The key feature of open-end schemes is liquidity.

Closed-ended Funds

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

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

Growth Funds

The aim of growth funds is to provide capital appreciation over the medium to long-

term. Such schemes normally invest a majority of their corpus/amount in equities. It has

been proven that returns from stocks, have out performed most other kind of investments

held over the long term. Growth schemes are ideal for investors having a long-term

outlook seeking growth over a period of time.


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Income Funds

The aim of income funds is to provide regular and steady income to investors. Such

schemes generally invest in fixed income securities such as bonds, corporate debentures

and Government securities. Income Funds are ideal for capital stability and regular

income.

Balanced Funds

The aim of balanced funds is to provide both growth and regular income. Such schemes

periodically distribute a part of their earning and invest both in equities and fixed income

securities in the proportion indicated in their offer documents. In a rising stock market,

the NAV of these schemes may not normally keep pace, or fall equally when the market

falls. These are ideal for investors looking for a combination of income and moderate

growth.

Money Market Funds

The aim of money market funds is to provide easy liquidity, preservation of capital and

moderate income. These schemes generally invest in safer short-term instruments such as

treasury bills, certificates of deposit, commercial paper and inter-bank call money.

Returns on these schemes may fluctuate depending upon the interest rates prevailing in

the market. These are ideal for Corporate and individual investors as a means to park

their surplus funds for short periods.

Speciality / Sectoral funds

These funds invest in securities of a specific industry or sector of the economy such as

health care, technology, leisure, utilities or precious metals. The fund enables investors to

diversify holdings among many companies with in an industry, a more conservative

approach then investing directly in one particular company.


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Sector fund offers the opportunity for sharp capital gains in cases where the funds

industry is in Favor but also in entailed the risk of capital losses when the industries out

of favor. While Sector funds restrict holdings tom a particular industry, other specialty

funds such as Index funds gives investors a broadly diversify portfolio and attempt to

mirror the performance of various market averages, Index Funds generally buy share in

all the companies composing the BSE Sensex or NSE Nifty or other stock market indices.

Load or No-Load Funds

A Load Fund is one that charges a percentage of NAV for entry or exit. That is, each

time one buys or sells units in the Funds, a charge will be payable. This charge is used by

the Mutual fund for marketing and distribution expenses. Suppose the NAV per unit is

Rs.10. if the entry as well as exit load charged is 1 %, then the investors who buy would

be required to pay Rs.10.10 and those who offer the units for repurchase to the Mutual

Fund will get only Rs.9.90 per unit. The investor should take the loads into consideration

while making investment as these affect their yields/returns. However, the investor

should also consider the performance track record and service standards of the Mutual

Funds, which are more important. Efficient funds may give higher returns in spite of

Loads.

A No-Load Fund is one that does not charge for entry or exit. It means investors can

enter the fund/scheme at NAV and no additional charges are payable on purchase or sale

of units.


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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 and 54EB 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

Sensex or the NSE 50.

Sectoral Schemes

Sectoral 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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Life cycle of mutual fund

Life CycleStage

Financial Needs Ability toInvest

Choice ofInvestmentProducts

ChildhoodStage

Taken care of byparents

Investmentof

Gifts

Long Term

YoungUnmarried

Immediate &Short Term

Limited dueto higherSpending

Liquid plans &Short termInvestment.

Some exposure toEquity and

Pension products.

YoungMarried

Short&Immediate term

Housing &Insurance

Needs.Consumer

financial need.

Limited dueto

Higherspending.Cash flow

requirements are

also limited

Medium to Longterm

Investments. Abilityto

take risks fixedIncome, insurance &

Equity products.

YoungMarried

withChildren

Medium To Longterm

Needs. ChildrensEducation.Housing &Consumer

financeHousing.

Limited,FinancialPlanning

needsare highest

asthis stage is

idealfor

discipliningSpending &

Savingregularly

Medium to Longterm

Investments. Abilityto

take risks. Portfolioof

Products, for growth&

long term


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Married witholder

Children

Medium termneeds forChildrens

education andmarriage. Need

for pension,Insurance &

Medical cover.

Highersavingratios

recommended.

Requirementfor

intermittentcash

flows higher.

Medium termInvestment with high

Liquidity needs.Portfolio of products

including equity,

debt & Pension plans

Post Family /Pre-

retirementstage

Ensuringadequate Incometo pressure the

standard ofliving, Postretirement

AdequateIncome

& Savings.

MaximumInvestment

in Pension products.

RetirementStage

Short to Mediumterm

LowerSaving,Ratios,Higher CashFlow

Medium termInvestments.Preference for liquid&Income Pro


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Some of the AMCs operating currently are:


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Justification of Study

Name of the AMC Nature of ownership

Alliance Capital Asset Management (I) Private Limited Private foreign

Birla Sun Life Asset Management Company Limited Private IndianBank of Baroda Asset Management Company Limited Banks

Bank of India Asset Management Company Limited Banks

Can bank Investment Management Services Limited Banks

Cholamandalam Cazenove Asset Management Company Limited Private foreign

Dundee Asset Management Company Limited Private foreign

DSP Merrill Lynch Asset Management Company Limited Private foreign

Escorts Asset Management Limited Private Indian

First India Asset Management Limited Private Indian

GIC Asset Management Company Limited Institutions

IDBI Investment Management Company Limited Institutions

Indfund Management Limited Banks

ING Investment Asset Management Company Private Limited Private foreign

J M Capital Management Limited Private Indian

Jardine Fleming (I) Asset Management Limited Private foreign

Kotak Mahindra Asset Management Company Limited Private Indian

Kothari Pioneer Asset Management Company Limited Private Indian

Jeevan Bima Sahayog Asset Management Company Limited Institutions

Morgan Stanley Asset Management Company Private Limited Private foreign

Punjab National Bank Asset Management Company Limited Banks

Reliance Capital Asset Management Company Limited Private Indian

State Bank of India Funds Management Limited BanksShriram Asset Management Company Limited Private Indian

Sun F and C Asset Management (I) Private Limited Private foreign

Sundaram Newton Asset Management Company Limited Private foreign


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Every one wants to invest in the Stock Market. In order to directly investing in the Stock

market there is a need of high amount of money for the purpose of construct a portfolio

and also good knowledge about the stock market otherwise there can be chances of

losses. Generally very few people have big amount of capital and good knowledge of

Stock market to overcome this problem Mutual fund was introduced.

People prefer to invest through Mutual funds because in this they get the facility of

Low investment is possible

Professionally managed portfolio

Facility of portfolio even with the small amount of investment

Diversification

I have undertaken Close ended Equity Dividend Mutual fund topic. So as to analysis the

reasons for buying and selling of those stocks even when these fund are not listed on

stock exchange & to know the various income generated by the fund after the investment.


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OBJCTIVES OF THE STUDY

Main objectives:

To analyses the performance of SUNDRAM BSP, DSB BLACK ROCK, RELIGARE

mutual fund with different analytical tools.

Sub objectives:1. To know about the various types of close ended equity fund Schemes and

Different players working in Indian Market.

2. To analyze the various advantage and disadvantage related with the investment in

the stock market.

3. To analyze the guideline given to the fund houses regarding to the investment

4. To analyze the various rights available with the investor

5. To analyses the performance of DSP Black Rock, Sundaram BSP, Religaremutual fund with different analytical tools in comparison with nifty return

6. To analyze what could be the different steps in investing the money in the mutual

fund.

.


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Literature Review

The literature review includes the academic books, journals, internet access, magazines

etc.

ICFAI reader1- Mutual fund distribution channel- In this I gathered the

information about the various parties involved in mutual fund transaction. It

guided me to know about the growth of the various schemes of Mutual Fund over

the last few years.

Economic & political weekly2 April-2006 It helped me to know about the

trends of mutual fund industry. Some data regarding this has been taken from it.

Gupta S.P.3. The information regarding the statistical tools and their

limitations in different fields the research is given in this section. This section

explains why to use correlation and what are the situations in which correlation

can be used, and what does correlation means.

Schaums: Statistical Methods4- Sultan Chand Publication The information

regarding the statistical tools and their limitations in different fields the research is

given in this section. This section explains why to use trend analysis and what are

the situations in which correlation can be used, and what does correlation means.

Fisher & Jordan5: Security Analysis & Portfolio management-this book has

been used to calculate the indices on which basis the ranking has been given.

Pandian Punitawathy6: Security Analysis & portfolio management: This

book helped in understanding the concept of different indices for portfolio

evaluation.

Beri G.C.7- Marketing Research 3rd edition: This book helped in

understanding the different research designs and analytical tools used here.

Kothari C.R.8 The information regarding the basics of research and research

methodology , what are the different types of research designs, what is problem


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statement, what are the sources of data collection and what are the methods of

data collection is given in this section

Pandey I.M.9-Financial Management by Vikas Publishing House the concept

of mutual funds & various schemes have been studied from this book.

Srivastva10: Management of Indian Financial Institutions-Himalaya

Publishing House 6th edition. Introduction of mutual funds, their advantages,

disadvantages and various types have been taken from it.

Indian journal of commerce11-jun, 2006: In this article they shows the

growth of the mutual fund in India is given

Southern Economist12 Sep.2006: In this the performance of the mutual fund

was given.

Journal of finance13-feb, 2006: In this the various schemes offered by the

mutual fund houses were given.

Facts for you14-jan, 2006: In the information about the risk and return was

given.

The Management Accountant15 - April 2005: In this article related to the

benefit related to the mutual fund as comparison to the fixed deposits in he Banks

was given.

Southern Economist16 - December 15, 2005: In this the portfolio of the

different Mutual fund houses was given.

SEBI Bulletin 17 July, 2005: In the Asset Management of the different

mutual fund houses was given.

Charter financial analysis18-jan, 2007: In this information about the various

Analytical tools was given

Journal of finance19-dec, 2005: In this the fund size of the different Mutual

fund was given.

ICFAI reader20-july2006, Feb 2006: In this information about the Entry and

Exit load was given.


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Websites visited:

http://www.amfiindia.com/showhtml.asp?page=aboutusa-This site explained the

information regarding various mutual funds and its growth in past years.

www.mutualfundsindia/navreports.jspb It provided me the data

regarding various parties involved in mutual funds and

investment pattern of public and private sector mutual funds

http://www.amfiindia.com/navtypereport.asp#Type10c Data regarding NAVs on

different dates has been taken from this site.

www.financeindiamart.comd- Different expert comments have

been extracted & the mechanism of mutual funds has been

taken from this site

.http://www.hdfcfund.com/navcorner/index.jspe This site

provided information regarding managing of funds by the

investors and investment criteria in different funds

http://www.tatamutualfund.com/aboutus/index.jspf--- This site

provided information regarding Tata mutual fund such as history

of Tata mutual fund, portfolio etc

http://www.utimutualfund.com/aboutus/index.jspg-- This site

provided information regarding UTI Mutual fund such as history,

portfolio, board of director etc

http://www.valuereserachonline.com/history/ index.jsp-- This site

provided information regarding nifty index. This site provided

past year of return nift.
http://www.amfiindia.com/showhtml.asp?page=aboutushttp://www.mutualfundsindia.com/http://www.mutualfundsindia.com/http://www.mutualfundsindia.com/http://www.amfiindia.com/navtypereport.asp#Type10http://www.financeindiamart.com/http://www.hdfcfund.com/navcorner/index.jsphttp://www.tatamutualfund.com/aboutus/index.jspf---http://www.tatamutualfund.com/aboutus/index.jspf---http://www.tatamutualfund.com/aboutus/index.jspf---http://www.utimutualfund.com/aboutus/index.jspg--http://www.utimutualfund.com/aboutus/index.jspg--http://www.utimutualfund.com/aboutus/index.jspg--http://www.amfiindia.com/showhtml.asp?page=aboutushttp://www.mutualfundsindia.com/http://www.amfiindia.com/navtypereport.asp#Type10http://www.financeindiamart.com/http://www.hdfcfund.com/navcorner/index.jsphttp://www.tatamutualfund.com/aboutus/index.jspf---http://www.utimutualfund.com/aboutus/index.jspg--


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Sundaram BNP Paribas AssetManagement Co Ltd.

Sundaram Asset Management Company Limited is a public limited company

incorporated under the Companies Act, 1956 with a paid up capital of Rs. 15

crores. It is a wholly owned subsidiary of Sundaram Finance Limited. It has been

appointed Investment Manager vide Investment Management Agreement (IMA)

dated August 24, 1996 executed between the trustees and the AMC. Sundaram

Finance Limited is the Sponsor for the Mutual Fund and Sundaram Finance

Trustee Company Ltd. is the trustee.

No. of schemes 43

No. of schemes including options 160

Equity Schemes 31

Debt Schemes 106Short term debt Schemes 14

Equity & Debt 5

Money Market 0

Gilt Fund 2


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Corpus under management

Rs.14794.08 Crs. as on Aug 31, 2009

Key Personnel

D.N. Ghosh (Chairman)

T.P. Raman (CEO)

T S Sritharan (Hd of Operation),

P.Sundararajan(Compliance

Officer)

S.Balasubramanian (IRO)

Dr. Ashoke Bijapurkar (Director),

Mr. T.N. AnantharamaIyer

(Director)

.

Fund Managers

Satish Ramanathan

Dheeraj Singh

K Ramkumar

J. Venkatesan

Mr. S Krishnakumar

N Prasad, Rahul Pal

Srividhya Rajesh


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DSP Black Rock InvestmentManagers Pvt. Ltd.

DSP BlackRock Investment Managers Ltd. is the investment manager to DSP

BlackRock Mutual Fund. The philosophy of DSP BlackRock Investment

Managers Ltd. has been grounded in the belief that experienced investment

professionals, using a disciplined process and sophisticated analytical tools, can

consistently add value to client portfolios. DSP BlackRock Investment Managers

Ltd. takes a three dimensional approach to the management of the organization,

incorporating functional, product and regional elements in support of clients goals.

The functional dimension looks at the company s operations by specific task, such

as portfolio management, account management or operations. The product

dimension brings together the cross-disciplinary expertise critical to managing

client assets in each class. Finally, the regional aspect of the company s model

recognizes the unique, geography-specific needs of clients as well as the

importance of local regulatory issues.

No. of schemes 25


Equity Schemes 25

Debt Schemes 44

Short term debt Schemes 12

Equity & Debt 2

Money Market 0

Gilt Fund 6


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Corpus under management Rs.15902.556 Crs. as on Sep 30, 2009

Key Personnel

S. Naganath (President & CIO),

Anup Maheshwari (head equities and

corporate strategy),

Dhawal Dalal (Senior VP and Head-

Fixed income),

Apoorva Shah (Senior VP and fund

manager),

Ramamoorthy Rajagopal (CAO)

Fund Managers

Aniruddha NahaAnup Maheshwari

Aseem Gupta

Dhawal DalalMayana Sobti Rajani


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Religare Asset ManagementCompany Limited

Religare Asset Management is promoted by the Religare Group, one of the leading

integrated financial services groups in India. The businesses of the Religare Group

extend across three key verticals; the Retail, Institutional and Wealth spectrums,

catering to a diverse and wide base of clients. Religare, with its pan India and

global footprint, offers a diverse bouquet of investment offerings and financial

services.

No. of schemes

23


Equity Schemes 26

Debt Schemes 38

Short term debt Schemes 11

Equity & Debt 0

Money Market 0

Gilt Fund 11

Corpus under managementRs.8618.52 Crs. as on Apr 30, 2009

Key PersonnelMr Saurabh Nanavati (CEO),

Mr Ketan Ugrankar (COO)

Mr Suresh Jakhotiya (Comp)

Mr. Surinder Singh Negi (ISO),

Ashish Nigam (Hd FI),

Vetri Subramanium( Hd Eq).


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Fund ManagersMr. Pradeep Kumar

Ashish Nigam

Mr. Vetri Subramaniam

Mr. Vinay Paharia

Nitish Sikand

Umesh Sharma


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RESEARCH METHODOLOGY

Research is commonly refers to the search for knowledge. It is the scientific and

systematic search for pertinent information on a specific topic. In fact research is an art of

scientific investigation.

As by Clifford Woody: -Research comprises of defining and redefining the problems,

formulating hypothesis or suggesting solutions, collecting, organizing and evaluating the

data, making deductions and reading the conclusion and at last carefully testing the

conclusion to determine whether they fit formulated hypothesis.

INTERPRETATION

ANALYSIS OF DATA

COLLECTION OF DATA

EXTENSIVE LITERATURE SURVEY

FORMULATION OF RESEARCH PROBLEM

RECOMMENDATION


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RESEARCH DESIGN

A research design is the arrangement of conditions for collection and analysis of data in a

manner that aims to combine relevance to the research purpose with economy in

procedure.

The research design with help to answer the following questions:

Why the study is being made?

From where the data needed could be collected?

What time is required for the study to be competed & how much material is

needed?

What will be the technique for data collections?

How the data can be analyzed?

Research Design can be categorized as:

TYPES OF RESEARCH

DESIGN

EXPLORATORY

RESEARCHDESIGN

DESCRIPTIVE

&DIAGNOSTIC

RESEARCH DESIGN

EXPERIMENTAL

RESEARCH DESIGN


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Research design in study: -

In the study I will apply descriptive research design. As descriptive research

design is the description of state of affairs, as it exists at present. In this type of

research the researcher has no control over the variables, he can only report what

ahs happened or what is happening.

DATA COLLECTION

After the research problem has been identified and selected the next step is to

gather the requisite data. While deciding about the method of data collection to be

used for the researcher should keep in mind two types of data VIZ. primary and

secondary

.

Data has been collected from secondary source.

The secondary data as it has always been important for the completion of any

report provides a reliable, suitable, adequate and specific knowledge. The standard

cost reports, working sheets provide the knowledge and information regarding the

relevant subjects.

TYPES OF DATA

PRIMARY

DATASECONDRY

DATA


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ANALYTICAL TOOLS

MEASURE FOR SHARPE'S PORTFOLIOS PERFORMANCE

The Sharpe's index measures the risk premium of the portfolio relative to the total

amount of risk in portfolio. The Sharpe's index is measured as:

S = rP rf/ pWhere,

S = Sharpe's Index

rp= Average monthly return of fund. rf= risk free return *.

* Risk free return (rf) is taken as 7.73% per annum

TREYNOR'S PERFORMANCE MEASURES FOR PORTFOLIOS

Jack Trey nor, as measures by portfolio beta coefficients put an index of portfolio

performance that is based on systematic risk, forward. It is used to rank the interest

performance of different assets. It is a risk - adjusted rate of return measure than is

calculated by dividing the assets risk premium by their beta coefficient.

Tn =rP rf/ pWhere

Tn = Treynor's index

rp = average return on portfolio

rf = risk free return

p = beta coefficient of portfolio.


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JENSEN MEASURE

The Sharpe and Treynor index models provide measures for ranking the relative

performance of various portfolios on a risk-adjusted basis according to Jensen

equilibrium average return on a portfolio would be a benchmark. Equilibrium average

return of the portfolio by the market with respect to systematic risk to portfolio should

earn with the systematic return.

Rp = + (rm - rf ) pWhere,

Rp= average return of the portfolio.

rf = risk free return

rm= average market return

= A measure of systematic

= Y-X

If the alpha is positive, the portfolio has performed better and if alpha is negative it

has not shown performance up to the benchmark, i.e. the market Index.

Standard Deviation: It is used to measure the variation in the individual return from

the average expected return over a certain period. Standard deviation is used in the

concept of risk of a portfolio of investment. Higher the Standard Deviation means a

greater fluctuation in expected return.

= (Y- Y)

N

Where, Y = fund returnBeta: Beta measures the systematic risk and show how price of security respond to

the market foresees. It is calculated by relating the return on security with return for

market.

= n XY ( x y) / n x (x)Where,

X =index return

Y = fund return


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Alpha: It measures the stock unsystematic return and it is average return independent

of market return. It is calculated by comparing the funds actual performance with the

risk adjusted expected return.

= Y-XWhere,

X =index return

Y = fund return

PERFORMANCE EVALUATION OF DSB BLACK ROCK [ Equity Fund (D)

X(nifty) (X) Y(return) (Y) XY y y

-13.44 180.63 -26.25 689.06 352.8 -34.38 1181.98

30.47 928.42 22.65 513.02 690.14 14.52 210.8

14.48 209.6 17.01 292.41 247.60 8.88 78.85

3.47 12.04 8.24 67.89 28.51 .11 .012

-8.47 71.74 -4.25 18.06 35.99 -12.38 153.2

22.71 515.74 14.24 202.77 323.39 6.11 37.33

19.76 390.45 25.44 647.19 502.69 17.37 301.71

14.74 217.26 7.45 55.50 109.81 -.68 .46

X=86.93

(X) =2526.37

Y =65.09 (Y)=2486.69

XY=2305.44

y=0 y=1964.34

Table : analysis of sundram mutual fund

y=Y-YX =index returnY = fund return

n= no. of years

1 Beta

= n XY ( x y) / n x (x)

= 8*2305.44-86.93*65.09/8*2526.37-(86.93)=1.01

2 Standard Deviation

= y

n Where

Y =65.09/8

= 8-13


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= 1964.34/8= 15.66

3 Alpha = Y-X

Y =28.01/8= 3.5

X =35.05/8

= 4.38

= 3.5-1.08*4.38= -1-23

4 Sharpe's index

S = RP Rf/ p

rf= 6.75%

p = 22.61RP= 3.5

Sp= 3.50-6.75/22.61= -.14

5 TREYNOR

Tn = rP rf/

p

= 1.08rf= 6.75%

RP= 3.5

Tn= 3.50-6.75/1.08= -3

6 JENSEN

Rp = + (rm - rf ) p

= 1.08rf= 6.75%

= -1.23rm = 4.38

Rp= -1.23+(4.38-6.75)*1/08=-3.78


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PERFORMANCE EVALUATION OF SUNDRAM BSP Equity Fund


-13.44 180.63 -20.40 416.16 268.26 -23.58 556.01

30.47 928.42 17.57 308.70 156.37 14.39 207.0714.48 209.6 9.82 96.43 141.89 6.64 44.08

3.47 12.04 8.38 70.22 45.41 5.2 27.04

-8.47 71.74 -1.8 3.24 4.86 -4.98 24.04

22.71 515.74 8.23 67.73 119.33 5.05 25.50

19.76 390.45 10.05 101 52.56 6.87 47.19

14.74 217.26 -6.35 40.32 14.60 -9.53 90.82

X=86.93

(X) =2526.37

Y =25.5 (Y)=1103.08

XY=803.27

0 y=1022.51

Table : analysis of DSB equity fundy=Y-Y

X =index returnY = fund return

n= no. of years

1. Beta = n XY ( x y) / n x (x)

= 8*803.27-25.5*86.93/8*30.17-(30.17) = 1.11.


= y

N

Where

Y =25.5/8= 3.18

= 1022.51/8= 3.99

3 Alpha = Y-XY =65.09/8

= 8.13X =86.96/8

= 10.86

= 8.13-1.01*10.86


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= -2.83

4 Sharpe's index

S = RP Rf/ p

rf= 6.75%

p = 15.66RP= 8.13

Sp= 8.13-6.75/15.66

= .08

5 TREYNOR

Tn = rP rf/ p

= 1.01rf= 6.75%

RP= 8.13

Tn= 8.13-6.75/1.01

= 1.36

6 JENSEN

Rp = + (rm - rf ) p

= 1.01rf= 6.75%

= -2.83rm = 10.86

Rp= -2.83+(10.86-6.75)1.01

= 1.32


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PERFORMANCE EVALUATION OF RELIGARE Fund


-13.44 180.63 -26.36 694.84 520.34 -30.81 949.25

30.47 928.42 25.12 631.01 815.64 20.67 429.24

14.48 209.6 18.24 332.69 172.36 13.79 190.16

3.47 12.04 18.46 340.77 507.09 14.01 196.28

-8.47 71.74 -6.76 45.69 32.04 -11.21 125.66

22.71 515.74 12.60 158.76 245.32 7.61 57.91

19.76 390.45 13.16 173.18 71.98 8.71 75.86

14.74 217.26 -18.85 355.32 424.87 -23.3 542.89X=86.93

(X) =2526.37

Y =35.61 (Y)=2732.26

XY=2789.64

0 y=2567.25

Table : analysis of RELIGARE mutual fundy=Y-Y

X =index return

Y = fund returnn= no. of years

1 Beta

= n XY ( x y) / n x (x)

= 2789.64*8-(87.93*35.61)/8*86.93-(86.93) = .87


= y

n

Where

Y =35.61/8

= 4.45 = 2567.25/8

= 17.91

3 Alpha = Y-X


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Y =35.61/8

= 4.45

X =86.93/8= 10.08

= 4.45-(-.87*5.91)

= -.69

4 Sharpe's index

S = RP Rf/ p

rf= 6.75%

p = 17.91

RP= 4.45

Sp= 4.45-6.75/17.91= -12.8

5 TREYNOR

Tn = rP rf/ p

= .87rf= 6.75%

RP= 4.45

Tn= 4.45-6.75/.87

= -2.646 JENSEN

Rp = + (rm - rf ) p

= .87rf= 6.75%

= -.69

rm = 5.91

Rp= -.69+(5.91-6.75).87= -1.42


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Comparison of SUNDRAM,DSB,RELIGARE Equity Mutualfund schemes

1. Analysis of Fund On The Bases Of Sharpe's Index

MUTUAL FUND SHARPE'S INDEXDSB BLACK ROCK -1.4

SUNDRAM BSP 0.8

RELIGARE -12.8

Table 13: SHARPES index table

Chart 3: Sharpe's Index analysis

INTERPRETATION:

Sharpe shows the risk adjusted return. Higher the Sharpe Index better the fund. In this

case SUNDRAM Equity Fund has the maximum value i.e...8 in comparison to other

fund i.e.DSB Equity Fund and RELIGARE Fund. So we can say that the SUNDRAM

Equity Fund is the best fund amongst the three funds.

2.Analysis Of Mutual Fund On The Bases Of Treynor's Index

MUTUAL FUND TREYNOR'S INDEXDSB BLACK ROCK -.3

SUNDRAM BSP 1.36

RELIGARE -2.64

SHARPE'S INDEX

-1.40.8

-12.8

0

DSB

Equity

Fund (D)

S.BSP

Equity

Fund (D)

RELIGARE

Equity

PE Fund

NAV

SHARPE'S

INDEX


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Table 14: TREYNORS Index table

Chart 4: Treynor's Index analysis

INTERPRETATION

This shows the risk adjusted return. In this case SUNDRAM Equity Fund

(D) have the maximum i.e. 1.36 index value in comparison to the other two

i.e. DSB Equity Fund and RELIGARE Equity Fund. So we can say that the

UTI Equity Fund is the best fund as it provides the maximum risk premium

in comparison to the other two funds

3. Analysis Of Fund On The Bases Of Jensen's Index

MUTUAL FUND JENSEN'S INDEXUTI Equity Fund (D) 21.1

HDFC Equity Fund (D) 28.26

Tata Equity PE Fund 38.84

TREYNOR INDEX

-.3

1.36

-2.64

0

DSB

Equity

Fund (D)

S.BSP

Equity

Fund (D)

RELIGARE

Equity

PE Fund

NAV

TREYNOR

INDEX

JENSEN INDEX

-3.78 -1.42

1.32

DSB

Equity

Fund

RELIGARE

Equity

Fund

Sundram

Equity

Fund

NA

V

JENSENINDEX


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Chart : Jensen's Index analysis

INTERPRETATION

This shows the risk adjusted return. In this case sundran Equity Fund have

the maximum i.e. 1.36index value in comparison to the other two i.e. DSB

Equity Fund and RELIGARE Equity Fund Fund. So we can say that the

SUNDRAM Equity is the best fund as it provides the maximum risk

premium in comparison to the other two funds

Comparative Analysis of Close Ended Mutual Fund on the Basis of Return

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