Comparative Analysis of Mutual Fund With India Infoline by Nikita Chinchane_new

8/4/2019 Comparative Analysis of Mutual Fund With India Infoline by Nikita Chinchane_new

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A PROJECT REPORT

ON

COMPARATIVE ANALYSIS OF MUTUAL FUND ON THE

BASIS OF ALPHA, BETA, AND STANDARD DEVIATION

FOR

INDIA INFOLINE, PUNE

BY

NIKITA BHARAT CHINCHANE

MBA Semester III

Project Guide

Prof. VAISHAMPAYAN


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In Partial Fulfillment of the Requirements of the

Two-Year Full-Time PGPM Programme

of the

SMVIM

(St. Mira Vishwakarma Institute Of Management)

Pune

AY: 2007-08

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ACKNOWLEDGEMENT

I take this opportunity to express my deepest gratitude to all those people,

without those spontaneous support, guidance, encouragement and understanding, this

project would never had reached completion.

It was my privilege to work with India Infoline Ltd. I am indebted to Kamlesh

Tiwari (Branch Manager), Chetan Singh Rajpurohit (Sales Manager) who acted as

philosopher and guide through all the stages of completion of the project.

Mere words of gratitude will never suffice to their valuable guidance, patience

and faith shown in my work.

I would also like to avail this opportunity to express my sincere thanks and

profound gratitude to my project guide Prof (Vaishamparan), whose valuable

knowledge and guidance have me complete this project successfully.

I acknowledge the timely help extended by all my colleagues and all the

unmentioned names from the concerned field.


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INDEX

Sr.No. TOPIC Page no.

1 EXECUTIVE SUMMARY4

2 RESEARCH OBJECTIVE 4

3 SCOPE OF PROJECT 5

4 RESEARCH METHODOLGY 5

5 FINDINGS AND ANALYSIS 6

6 LIMITATIONS 6

7 ABOUT INDIA INFOLINE 7

8 INTRODUCTION OF MUTUAL FUND 12

9 COMPARISON OF MUTUAL FUND 37

10 CONCLUSION

11 BIBLIOGRAPHY


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Executive Summary

The project has been carried out at India Infolin e Ltd with the title

Comparative Analysis of Mutual Fund on the basis o f Alpha, Beta and Standard

Deviation.

The main function of having analysis of Mutual fund is to pinpoint the strong

points and weaknesses of mutual fund schemes.

For this I have taken the following parameters:

Analyzing Mutual Fund using:-

1. Alpha: - I came to know how particulars Mutual Fund schemes performed

related to what it was expected to do.

2. Beta:- By comparing Mutual Fund on the basis of beta we come to know how

volatile a particular Mutual Fund as related to stock market is.

3. Standard Deviation:- The standard deviation of a fund measures this risk by

measuring the degree to which the fund fluctuates in relation to its mean return.

4. Schemes selected for project:-

Equity Diversified

Balanced Fund

Debt fund

Liquid fund


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RESEARCH OBJECTIVE:

To evaluate investment performance of selected mutual funds in terms of risk

and return. Also to analyze the performance of mutual fund schemes on the basis of

various parameters. Primarily to understand the basic concepts of Mutual fund and its

benefits as an investment avenue.

Secondly, to compare and evaluate the performance of different schemes of mutual

fund companies on the basis of risk, return and volatility

SCOPE OF PROJECT:

The Schemes were categorized and selected on evaluating their performance and

relative risk. The scope of the project is mainly concentrated on the different categories

of the mutual funds such as equity schemes, debt funds, balanced funds and liquid fund.

RESEARCH METHODOLGY:

Research Methodology is a very organized and systematic medium through which a

particular case or problem can be solved. It is analytical, descriptive and quantitative

research where the comparison between the different mutual fund schemes is made on the

basis of risk, volatility and return.


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FINDINGS AND ANALYSIS:

The collection of information is based on the secondary probe. The information

has been collected through various books, and internet.

An attempt has been made to evaluate the performance of the selected mutual

fund schemes. Performance of mutual fund schemes has been evaluated by using the

following performance measures

a) Risk

b) Standard Deviation.

c) Beta

LIMITATIONS:

To get an insight in the process of risk and return and deployment of funds by

fund manager is difficult.

The project is unable to analyse each and every scheme of mutual funds to

create awarness about risk and return. The risk and return of mutual fund schemes

can change according to the market conditions


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ABOUT THE COMPANY

INDIA INFOLINE:

INDIA INFOLINE is a one-stop financial services shop, most respected

for quality of its advice, personalized service and cutting-edge technology.

VISION is to be the most respected company in the financ ial services space.

India Infoline Ltd:

India Infoline Ltd is listed on both the leading stock exchanges in India, viz. the

Stock Exchange, Mumbai (BSE) and the National Stock Exchange (NSE). The India

Infoline group, comprising the holding company, India Infoline Ltd and its subsidiaries,

straddles the entire financial services space with offerings ranging from Equity

research, Equities and derivatives trading, Commodities trading, Portfolio Management

Services, Mutual Funds, Life Insurance, Fixed deposits, GoI bonds and other small

savings instruments to loan products and Investment banking. India Infoline also owns

and manages the websites, www.indiainfoline.com and www.5paisa.com .


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India Info line Ltd, being a listed entity, is regulated by SEBI (Securities and

Exchange Board of India). It undertakes equities research which is acknowledged by

none other than Forbes as 'Best of the Web' and 'a must read for investors in Asia'.

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India Infoline's research is available not just over the internet but also on international

wire services like Bloomberg , Thomson First Call and Internet Securities where it is

amongst the most read Indian brokers.

Its various subsidiaries are in different lines of business and hence are governed

by different regulators.

Geographical presence

IIL has pan-India presence across 94 cities. It started off with major branches in

metros and now it is focusing on Tier II and III cities. In Q1-FY07 the company opened

56 branches, taking the total number of branches to 233 branches. Almost 50%of the

revenue comes from centers in Maharashtra and Delhi.

Followed by other regions.


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Investment Highlights

Strong growth in Industry volumes and rising retail participation Average daily

volumes in the equity markets (cash and derivative combined) have increased by

72%from to Rs.167bn in FY 05 to Rs.288bn in FY 06.With the economy growing at 7-

8% a mounting per capita income and growing BPO culture, there is a new class of

young investors, which are moving towards the equity market.

IIL is majorly present in the retail segment. With the rising income levels, risk- taking

ability of people and the confidence in the India Inc, participation from the retail crowd

is increasing y-o-y. IIL is aggressively increasing its presence by opening branches in


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different cities. In FY QI-07, they roll out 56 new branches and acquired 25000 new

customers. And it expects them to have 350 and 430 branches by FY 08 respectively.


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The subsidiaries of India Info line Ltd are:

India Infoline Securities Pvt Ltd:

India Infoline Securities Pvt Ltd is a 100% subsidiary of India Infoline Ltd, which is

engaged in the businesses of Equities broking and Portfolio Management Services. It holds

memberships of both the leading stock exchanges of India viz. the Stock Exchange,

Mumbai (BSE) and the National Stock Exchange (NSE). It offers broking services in the

Cash and Derivatives segments of the NSE as well as the Cash segment of the BSE.

India Infoline Commodities Pvt Ltd:

India Infoline Commodities Pvt Ltd is a 100% subsidiary of India Infoline Ltd,

which is engaged in the business of commodities broking. They have memberships with

the MCX and NCDEX, two leading Indian commodities exchanges, and has recently

acquired membership of DGCX.

India Infoline Distribution Co Ltd (IILD):

India Infoline Distribution Co Ltd is a 100% subsidiary of India Infoline Ltd and

is engaged in the business of distribution of Mutual Funds, IPOs, Fixed Deposits and

other small savings products. It is one of the largest 'vendor-independent' distribution

houses and has a wide pan-India footprint of over 232 branches coupled with a huge

number of 'feet-on-street', which help source and service customers across the length and

breadth of India.

Mortgages & Loans:

IILD has also entered the business of distribution of mortgages and loan products

during the year 2005-2006.


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India Infoline Insurance Services Ltd:

India Infoline Insurance Services Ltd is also a 100% subsidiary of India Infoline

Ltd and is a registered Corporate Agent with the Insurance Regulatory and

Development Authority (IRDA). It is the largest Corporate Agent for ICICI Prudential

Life Insurance Co Ltd, which is India's largest private Life Insurance Company.

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India Infoline Investment Services Ltd:

India Infoline Investment Service Ltd is also a 100% subsidiary of India Infoline

Ltd. It has an NBFC licence from the Reserve Bank of India (RBI) and offers margin-

funding facility to the broking customers.

Management of India infoline:

Mr. Nirmal Jain

Nirmal Jain is the founder and Chairman of India Info line Ltd. He holds an

MBA degree from IIM Ahmedabad, and is a Chartered Accountant and a Cost

Accountant. He has had an impeccable professional and academic track record. He then

joined hands with two local brokers to set up their equity research division Inquire, in

1994. His work set new standards for equity research in India. In 1995, he founded his

own independent financial research company, now known as India Info line Ltd.

Mr. R Venkataraman

Venkataraman is the co-promoter and Executive Director of India Infoline Ltd.

He holds a B.Tech degree in Electronics and Electrical Communications Engineering

from IIT Kharagpur and an MBA degree from IIM Bangalore. He has held senior

managerial positions in various divisions of ICICI Limited, including ICICI Securities

Limited, their investment banking joint venture with J P Morgan of USA and with

BZW and Taib Capital Corporation Limited. He has also held the position of Assistant

Vice President with G E Capital Services India Limited in their private equity division.

The Board of Directors

Apart from Nirmal Jain and R Venkataraman, the Board of Directors of India

Infoline comprises:


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Mr Sat Pal Khattar (Non Executive Director)

Mr Sanjiv Ahuja (Independent Director)

Mr Nilesh Vikamsey (Independent Director)

Mr Kranti Sinha (Independent Director)

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INTRODUCTION TO MUTUAL FUND

A Mutual Fund is a trust that pools the savings of a number of investors who

share a common financial goal. The money thus collected is invested by the fund

manager in different types of securities depending upon the objective of the scheme.

These could range from shares to debentures to money market instruments. The income

earned through these investments and the capital appreciation realized by the scheme are

shared by its unit holders in proportion to the number of units owned by them (pro rata).


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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 portfolio at arelatively low cost. Anybody with an investible surplus of as little as a few thousand

rupees can invest in Mutual Funds.

Each Mutual Fund scheme has a defined investment objective and strategy

mutual fund is the ideal investment vehicle for todays complex and modern financial

scenario. Markets for equity shares, bonds and other fixed income instruments, realestate, derivatives and other assets have become mature and information driven. Price

changes in these assets are driven by global events occurring in faraway places.

A typical individual is unlikely to have the knowledge, skills, inclination and time to

keep track of events, understand their implications and act speedily. An individual also

finds it difficult to keep track of ownership of his assets, investments, brokerage dues

and bank transactions etc.

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Draft offer document is to be prepared at the time of launching the fund.

Typically, it pre specifies the investment objectives of the fund, the risk associated, the

costs involved in the process and the broad rules for entry into and exit from the fund

and other areas of operation. In India, as in most countries, these sponsors need

approval from a regulator, SEBI (Securities exchange Board of India) in our case. SEBI

looks at track records of the sponsor and its financial strength in granting approval to

the fund for commencing operations.

A sponsor then hires an asset management company to invest the funds

according to the investment objective. It also hires another entity to be the custodian of

the assets of the fund and perhaps a third one to handle registry work for the unit

holders (subscribers) of the fund.

In the Indian context, the sponsors promote the Asset Management Company

also, in which it holds a majority stake. In many cases a sponsor can hold a 100% stake

in the Asset Management Company (AMC). E.g. Birla Global Finance is the sponsor of

the Birla Sun Life Asset Management Company Ltd., which has floated different

mutual funds schemes and also acts as an asset manager for the funds collected under

the schemes.


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ORGANIZATION OF A MUTUAL FUND

There are many entities involved and the diagram below illustrates

the organizational set up of a mutual fund

Organization of a Mutual Fund

A Mutual Fund is set up in the form of trust, which has sponsor, trustees,

asset management company (AMC), and custodian. The trust is established by

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

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

Management Company (AMC) approved by SEBI manages the funds by making

investments in various types of securities. Custodian, who registered with SEBI,

holds the securities 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 mutual fund.

SEBI regulations required that at least two thirds of the directors of


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trustee company or board of trustees must be independent i.e. they should not be

associated with sponsors. Also, 50% of the directors of the AMC must be

independent. All mutual funds are required to be registered with SEBI before

they launch their schemes.

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MAJOR MUTUAL FUND COMPANIES IN INDIA

ABN AMRO MUTUAL FUND

ABN AMRO Mutual Fund was setup on April 15, 2004 with ABN AMRO

Trustee(India) Pvt. Ltd. as the Trustee Company. The AMC, ABN AMRO Asset

Management (India) Ltd. was incorporated on November 4, 2003. Deutsche Bank A G

is the custodian of ABN AMRO Mutual Fund.

BIRLA SUN LIFE MUTUAL FUND

Birla Sun Life Mutual Fund is the joint venture of Aditya Birla Group and Sun

Life Financial. Sun Life Financial is a global organization evolved in 1871 and is being

represented in Canada, the US, the Philippines, Japan, Indonesia and Bermuda apart

from India. Birla Sun life Mutual Fund follows a conservative long-term approach to

investment. Recently it crossed a AUM of

Rs.10, 000 crores.

BANK OF BARODA MUTUAL FUND

Bank of Baroda Mutual Fund or BOB Mutual Fund was setup on October 30,

1992 under the sponsorship of Bank of Baroda. BOB Assets Management Company

Limited is the AUM of BOB Mutual Fund and was incorporated on November 5, 1992.

Deutsche Bank AG is the custodian.

HDFC MUTUAL FUND

HDFC Mutual Fund was setup on June 30, 2000 with two sponsors namely


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Housing Development Finance Corporation Limited and Standard Life Investments

Limited.

ING VYSYA MUTUAL FUND

ING Yysya Mutual Fund was setup on February 11, 1999 with the same named Trustee

Company. It is a joint venture of Vysya and ING. The AMC, ING Investment

Management (India) Pvt. Ltd. was on corporaed on April 6, 1998.

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PRUDENTIAL ICICI MUTUAL FUND

The mutual fund of ICICI is a joint venture with Prudential Plc. Of America,

one of the largest life insurance companies in the US of A. Prudential ICICI Mutual

Fund was setup on 13 October, 1993 with two sponsors, Prudential Plc. and the AMC is

Prudential ICICI Asset Management Company Limited incorporated on 22 June, 1993.

SAHARA MUTUAL FUND

Sahara Mutual Fund was setup on July 18, 1996 with Sahara India financial

Corporation Ltd. as the sponsor. Sahara Assets Management Company Private Limited

incorporated on August 31, 1995 works as the AMC of Sahara Mutual Fund. The paid

up capital of the AMC stands at Rs.25.8 crore.

STATE BANK OF INDIA MUTUAL FUND

State Bank of India Mutual Fund is the first Bank sponsored Mutual Fund to

launch offshore fund, the India Magnum Fund with a corpus of Rs.225 crore

approximately. Today it is the largest Bank sponsored Mutual Fund in India. They

already launched 35 schemes out of which 15 have already yield handsome returns to

investors. State Bank of India Mutual Fund has more than Rs.5, 500 crores as AUM.

Now it has an investor base of over 8 lakhs spread over 18 schemes.

TATA MUTUAL FUND

TATA Mutual Fund is a Trust under the Indian Trust Act, 1882. the sponsors for

Tata Mutual Fund are Tata Sons Ltd., and Tata Investment Corporation Ltd. the

investment manger is Tata management Limited is one of the fastest in the country with

more than Rs.7,703 Crore(as on 2005) of AUM.

KOTAK MAHINDRA ASSTE MANAGEMENT COMPANY


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Kotak Mahindra Asset Management Company is a subsidiary of KMBL. It is

presently having more than 1, 99,818 investors in its various schemes. KMAMC stared

its operations in December 1998. Kotak Mahindra Mutual Fund offers schemes catering

to investors with varying risk return profiles. It was the first company to launch to

dedicated gilt scheme investing only in government securities.

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UNIT TRUST OF INDIA MUTUAL FUND

UTI Asset Management Company Private Limited, established in Jan 24, 2003

manages the UTI Mutual Fund with the support of UTI Trustee Company Private

Limited. UTI Asset Management Company presently manages a corpus of over Rs.20,

000 crore. The sponsors of UTI Mutual Fund are Bank of Baroda, Punjab National

Bank, State Bank of India, and Life Insurance Corporation of India. The schemes of

UTI Mutual Fund are Liquid Funds, assets Management Funds, Index Funds and

Balanced Funds.

RELIANCE MUTUAL FUND

Reliance Mutual Fund was established as trust under Indian Trusts Act,

1882.The sponsor of RMF is Reliance Capital Limited and Reliance Capital Trustee

Co. Limited is the Trustee. It was registered on June 30, 1995 as Reliance Mutual Fund

which was changed on March 11, 2004. Reliance Mutual Fund was formed for

launching of various schemes under which, units are issued to the public with a view to

contribute to the capital market and to provide investors the opportunities to make

investments in diversified securities.

STANDARD CHARTERED MUTUAL FUND

Standard Chartered Mutual Fund was setup on March 13, 2000 sponsored by

Standard Chartered Bank. The Trustee is Standard Chartered Trustee Company Pvt.

Ltd. Standard Chartered Asset Management Company Pvt. Ltd is the AMC which was

incorporated with SEBI on December 20, 1999.

FRANKLIN TEMPLETON MUTUAL FUND


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The group, Franklin Templeton investment is a California based company with a

global AUM of US $409.2(as on 2005). It is one of the largest financial service group

in the world. Investors can buy or sell the Mutual Fund through their financial advisor

or through mail or through their website. They have open end Diversified Equity

schemes, Open end Sector Equity schemes, Open end Hybrid schemes, Open end tax

saving schemes, Open end income and liquid schemes, Closed end Income schemes and

Open end Fund of Funds schemes to offer.

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MORGAN STANLEY MUTUAL FUND

Morgan Stanley is a world wide financial services company and its leading in

the market in securities, investment management and credit services. Morgan Stanley

investment management was established in the year 1975. it provides customized asset

management services and products to governments, corporations, pension funds and

non profit organizations. Its services are also extending to high net worth individuals

and retail investors. In India it is known as Morgan Stanley investment management

Private Ltd. and its AMC is Morgan Stanley Mutual Fund. This is the first closed end

diversified equity scheme serving the needs of Indian retail investors focusing on the

long term capital appreciation.

ESCORT MUTUAL FUNDS

Escort Mutual Funds was set up on April 15 th, 1996 with Escorts Finance Ltd. as its

sponsor. The Trustee Company is Escorts Investments Trust Ltd.. its AMC was

incorporated on Dec1st, 95 with the name Escorts Asset Management Ltd.

ALLAINCE CAPITAL MUTUAL FUND

Allaince Capital Mutual Fund was set up on December 30, 1994 with Alliance

Capital Management Corp. of Delaware (USA) as sponsor. The Trustee is ACAM Trust

Company Pvt. Ltd. and AMC, the Alliance Capital Asset Management India Pvt. Ltd.

with the corporate office in Mumbai.

BENCHMARK MUTUAL FUND

Benchmark Mutual Fund was setup on June 12, 2001 with Niche Financial


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Services Pvt. Ltd. as the sponsor and Benchmark Trustee Company Pvt. Ltd. as the

trustee Company. incorporated on October 16, 2000 and headquartered in Mumbai,

Benchmark Assets Management Company Pvt. Ltd. is the AMC.

CAN BANK MUTUAL FUND

Can Bank Mutual Fund was setup on December 19, 1987 with Canara Bank

acting as the sponsor. Canara bank investment Management Service Ltd. incorporated

on March 2, 1993 is the AMC. The Corporate Office of the AMC is in Mumbai.

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CHOLA MUTUAL FUND

Chola Mutual Fund under the sponsorship of Cholamandalam Investment &

Finance Company Ltd. was setup on January 3, 1997. Cholamandalam Trustee Co. Ltd.

is the Trustee Company and AMC is Cholamandalam AMC Limited.

LIC MUTUAL FUND

Life Insurance Corporation on India setup LIC Mutual Fund on 19th June 1989.

It contributed Rs.2 crore towards the corpus of the Fund. LIC Mutual Fund was

constituted as a trust in accordance with the provisions of the Indian trust Act, 1882.

The Company started its bsiness on 29th April 1994. The Trustees of LIC Mutual Fund

have appointed Jeevan Bima Sahayog Asset Management Company Ltd. as the

Investment Managers for mutual fund.

GIC MUTUAL FUND

GIC Mutual Fund, sponsored by General Insurance Corporation of India, a

government of India undertaking and the four Public Sector General Insurance

Companies, viz. National Insurance Co. Ltd, the New India Assurance Co. Ltd. the

Oriental Insurance Co. Ltd and United India Insurance Co. Ltd and is constituted as a

Trust in Accordance with the provisions of the Indian Trusts Act, 1882.


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Types of Mutual Funds

Mutual fund schemes may be classified on the basis of its structure and its

investment objective.

By 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 NetAsset 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 thereafterthey 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.


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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 in equities. It has

been proven that returns from stocks, have outperformed 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.

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.


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No-Load Funds:

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.

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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, 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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BENEFITS OF MUTUAL FUND INVESTMENT

Professional Management:

Mutual Funds provide the services of experienced and skilled professionals,

backed by a dedicated investment research team that analyses the performance and

prospects of companies and selects suitable investments to achieve the objectives of the

scheme.

Diversification:

Mutual Funds invest in a number of companies across a broad cross-section of

industries and sectors. This diversification reduces the risk because seldom do all stocks

decline at the same time and in the same proportion. You achieve this diversification

through a Mutual Fund with far less money than you can do on your own.

Convenient Administration:

Investing in a Mutual Fund reduces paperwork and helps you avoid many

problems such as bad deliveries, delayed payments and follow up with brokers and

companies. Mutual Funds save your time and make investing easy and convenient.

Return Potential:

Over a medium to long-term, Mutual Funds have the potential to provide a

higher return as they invest in a diversified basket of selected securities.

Low Costs:

Mutual Funds are a relatively less expensive way to invest compared to directly

investing in the capital markets because the benefits of scale in brokerage, custodial and


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other fees translate into lower costs for investors.

Liquidity:

In open-end schemes, the investor gets the money back promptly at net asset

value related prices from the Mutual Fund. In closed-end schemes, the units can be sold

on a stock exchange at the prevailing market price or the investor can avail of the

facility of direct repurchase at NAV related prices by the Mutual Fund.

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Transparency:

You get regular information on the value of your investment in addition to

disclosure on the specific investments made by your scheme, the proportion invested in

each class of assets and the fund manager's investment strategy and outlook.

Flexibility:

Through features such as regular investment plans, regular withdrawal plans and

dividend reinvestment plans, you can systematically invest or withdraw funds

according to your needs and convenience.

Affordability

Investors individually may lack sufficient funds to invest in high-grade stocks.

A mutual fund because of its large corpus allows even a small investor to take the

benefit of its investment strategy.

Choice of Schemes

Mutual Funds offer a family of schemes to suit your varying needs over a

lifetime.

Well Regulated

All Mutual Funds are registered with SEBI and they function within the

provisions of strict regulations designed to protect the interests of investors. The

operations of Mutual Funds are regularly monitored by SEBI.


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LIMITATION OF MUTUAL FUND INVESTMENT

1. No Control Over Cost:

An Investor in mutual fund has no control over the overall costs of investing. He

pays an investment management fee (which is a percentage of his investments) as long

as he remains invested in fund, whether the fund value is rising or declining. He also

has to pay fund distribution costs, which he would not incur in direct investing.

However this only means that there is a cost to obtain the benefits of mutual

fund services. This cost is often less than the cost of direct investing.

2. No Tailor-Made Portfolios:

Investing through mutual funds means delegation of the decision of portfolio

composition to the fund managers. The very high net worth individuals or large

corporate investors may find this to be a constraint in achieving their objectives.

However, most mutual funds help investors overcome this constraint by offering

large no. of schemes within the same fund.

3. Managing A Portfolio Of Funds:

Availability of large no. of funds can actually mean too much choice for the

investors. He may again need advice on how to select a fund to achieve his objectives.

AMFI has taken initiative in this regard by starting a training and certification

program for prospective Mutual Fund Advisors. SEBI has made this certification


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compulsory for every mutual fund advisor interested in selling mutual fund.

a. Taxes:

During a typical year, most actively managed mutual funds sell anywhere from 20

to 70 percent of the securities in their portfolios. If your fund makes a profit on its sales,

you will pay taxes on the income you receive, even if you reinvest the money you made.

b. Cost of Churn:

The portfolio of fund does not remain constant. The extent to which the portfoliochanges is a function of the style of the individual fund manager i.e. whether he is a buy

and hold type of manager or one who aggressively churns the fund. It is also dependent

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on the volatility of the fund size i.e. whether the fund constantly receives fresh

subscriptions and redemptions. Such portfolio changes have associated costs of

brokerage, custody fees etc. that lowers the portfolio return commensurately.


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26


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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


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Mutual Funds in India (1964-2000)

The end of millennium marks 36 years of existence of mutual funds in this

country. The ride through these 36 years is not been smooth. Investor opinion is still

divided. While some are for mutual funds others are against it.

UTI commenced its operations from July 1964 .The impetus for establishing a

formal institution came from the desire to increase the propensity of the middle and

lower groups to save and to invest. UTI came into existence during a period marked by

great political and economic uncertainty in India. With war on the borders and

economic turmoil that depressed the financial market, entrepreneurs were hesitant to

enter capital market.

UTI commenced its operations from July 1964 "with a view to encouraging

savings and investment and participation in the income, profits and gains accruing to

the Corporation from the acquisition, holding, management and disposal of securities."

Different provisions of the UTI Act laid down the structure of management, scope of

business, powers and functions of the Trust as well as accounting, disclosures and

regulatory requirements for the Trust.

The opening up of the asset management business to private sector in 1993 saw

international players like Morgan Stanley, Jardine Fleming, JP Morgan, George Soros

and Capital International along with the host of domestic players join the party. But for

the equity funds, the period of 1994-96 was one of the worst in the history of Indian

Mutual Funds.

1999-2000 Year of the funds

Mutual funds have been around for a long period of time to be precise for 36 yrs

but the year 1999 saw immense future potential and developments in this sector. This

year signaled the year of resurgence of mutual funds and the regaining of investor

confidence in these MFs. This time around all the participants are involved in the

revival of the funds the AMCs, the unit holders, the other related parties. However the


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sole factor that gave lifr to the revival of the funds was the Union Budget. The budget

brought about a large number of changes in one stroke. An insight of the Union Budget

on mutual funds taxation benefits is provided later.

It provided centrestage to the mutual funds, made them more attractive and

provides acceptability among the investors. The Union Budget exempted mutual fund

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dividend given out by equity-oriented schemes from tax, both at the hands of the

investor as well as the mutual fund. No longer were the mutual funds interested in

selling the concept of mutual funds they wanted to talk business which would mean to

increase asset base, and to get asset base and investor base they had to be fully armed

with a whole lot of schemes for every investor .So new schemes for new IPOs were

inevitable. The quest to attract investors extended beyond just new schemes. The funds

started to regulate themselves and were all out on winning the trust and confidence of

the investors under the aegis of the Association of Mutual Funds of India (AMFI)

One cam say that the industry is moving from infancy to adolescence, the

industry is maturing and the investors and funds are frankly and openly discussing

difficulties opportunities and compulsions.

Future Scenario

The asset base will continue to grow at an annual rate of about 30 to 35 % over

the next few years as investors shift their assets from banks and other traditional

avenues. Some of the older public and private sector players will either close shop or be

taken over.

Out of ten public sector players five will sell out, close down or merge with

stronger players in three to four years. In the private sector this trend has already started

with two mergers and one takeover. Here too some of them will down their shutters in

the near future to come.

But this does not mean there is no room for other players. The market willwitness a flurry of new players entering the arena. There will be a large number of

offers from various asset management companies in the time to come. Some big names

like Fidelity, Principal, Old Mutual etc. are looking at Indian market seriously. One

important reason for it is that most major players already have presence here and hence

these big names would hardly like to get left behind.

The mutual fund industry is awaiting the introduction of derivatives in India as


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this would enable it to hedge its risk and this in turn would be reflected in its Net Asset

Value (NAV).

SEBI is working out the norms for enabling the existing mutual fund schemes to

trade in derivatives. Importantly, many market players have called on the Regulator to

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initiate the process immediately, so that the mutual funds can implement the changes that

are required to trade in Derivatives.

GROWTH IN ASSETS UNDER MANAGEMENT


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RECENT TRENDS IN MUTUAL FUND INDUSTRY

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The most important trend in the mutual fund industry is the aggressive expansion of

the foreign owned mutual fund companies and the decline of the companies floated by

nationalized banks and smaller private sector players. Many nationalized banks got into the

mutual fund business in the early nineties and got off to a good start due to the stock market

boom prevailing then. These banks did not really understand the mutual fund business and

they just viewed it as another kind of banking activity.

Few hired specialized staff and generally chose to transfer staff from the parent

organizations. The performance of most of the schemes floated by these funds was not

good. Some schemes had offered guaranteed returns and their parent organizations had

to bail out these AMCs by paying large amounts of money as the difference between

the guaranteed and actual returns. The service levels were also very bad.

Most of these AMCs have not been able to retain staff, float new schemes etc. and it is

doubtful whether, barring a few exceptions, they have serious plans of continuing the

activity in a major way. The experience of some of the AMCs floated by private sector

Indian companies was also very similar. They quickly realized that the AMC business

is a business, which makes money in the long term and requires deep-pocketed support

in the intermediate years.

Some have sold out to foreign owned companies, some have merged with others

and there is general restructuring going on. The foreign owned companies have deep

pockets and have come in here with the expectation of a long haul. They can be

credited with introducing many new practices such as new product innovation, sharp

improvement in service standards and disclosure, usage of technology, broker education

and support etc. In fact, they have forced the industry to upgrade itself and service

levels of organizations like UTI have improved dramatically in the last few years in

response to the competition provided by these.


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31


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WHY SHOULD INVESTORS INVEST IN MUTUAL FUND?

An investor avails of the service of experienced and skilled professionals who

are backed by a dedicated of companies and selects suitable investments to achieve the

objectives of the schemes.

Mutual funds invest in a number of companies across a broad cross- section of

industries and sectors. This diversification reduces the risk because seldom do

all the stocks decline at the same time and in the same proportion. The investorsachieve this diversification through a mutual fund with far less money than you

can do on our own.

Investing in a mutual fund reduces paperwork and helps an investor avoid many

problems such as bad deliveries, delayed payments and unnecessary follow.


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32


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EMERGING ISSUES IN MUTUAL FUND

Rating of Mutual Fund Schemes:

Total returns has been the criteria for measuring the performance of mutual

fund. Therefore, CRISIL has development a composite performance ranking which

measures performance for each of the open- ended schemes. According to CRISIL, this

measures is applicable only to those schemes, which are at least two years old and

disclose 100% of their portfolios.

Changes in Mutual Fund due to the Advent of Net:

As per SEBI regulations, bond funds and equity funds can charge a maximum of

2.25% and 2.5% as administrative fees, respectively. Mutual Funds could bring down

their administrative costs to 0.75%, if trading is done online and consequently improves

the return potential of their schemes. Mutual Funds could provide better advise or

servise to their investors through the Net.

New Norms on NPA Classification:

The Malegan committee has made important recommendations regarding norms

on classification of NPAs in debt securities and norms for valuation of liquid securities

in a mutual fund schemes. The committee has recommended that debt securities held by

mutual fund in their portfolio can be classified as NPA, if the principal or interest is not

received for six months. The mutual funds will have to disclose the NPAs to unit

holders in a half-yearly basis.

INFLUENCE OF TECHNOLOGY:


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A majority of the mutual fund have their own websites providing basic

information relating to the schemes. Mutual Fund have begun to use electronic fund

transfer method top remit their dividends and redemption proceeds. However, the most

significant influence of technology is seen in servicing investors. So technology can

bridge the gap between investor education and products positioning.

PRODUCT INNOVATION:

Product innovation is an emerging feature in the mutual fund industry in India.

Most of the products offered by mutual fund can be divided among three classes of cash

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funds, income funds and equity funds. The year 2002 was different in that the products

offered were far more innovative. Templeton India launched a debt fund that would

invest predominantly in floating rate bonds.

INDICES FOR MUTUAL FUNDS:

The AMFI has recently launched four indices for gilt funds and another set of

indices for balanced funds, bond funds, monthly income plans and liquid funds. The

indices, which have been developed and will be maintained by ICICI securities and

finance companied and CRISIL.com, respectively, will be mandated for use by mutual

funds to enable the comparison of performance.

FUNDS OF FUNDS:

The SEBI may soon permit mutual funds to float a new category of funds called

funds of funds, which will invest in other mutual fund schemes. These scheme will

enable people to invest in different mutual funds schemes through a single find.


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MUTUAL FUND BEST PRCTICES

THE PRACTICE OF RESTFUL

Risk- Reward Relationship:

A clear and direct relationship of risk with reward has to be developed and the

concept instilled in the mind of the investor, and this is the basis of all classification of

Mutual Fund.

Ease of Business:

The business of Mutual Fund is not an easy one. It is easy only for the ones who

have either been in the business for a long time, or for the people, institutions which

have been in the investment space for a long time and are willing to experiment and

learn from their mistake, and can be flexible.

Service:

The service provision ought to be flawless, for after all, Mutual Fund is a

service, and the only way the number of customers can be increased and the existing

ones retained is by providing a higher level of service, thereby increasing customer

satisfaction.

Trust / Transparency:

A high level of transparency has to be built into the system of processes and

investments in Mutual Fund. This is of vital importance as the terms Transparency

and Trust, in the case of Mutual Funds is synonyms. T rust in the firm would come

only with transparency. And with Trust would come more business.


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Fairness to Investors:

This, of course, is an offshoot of the previous point that we made. No business can

survive unless it is fair to the customer. However, what is important here is that it has to be

made evidently clear that the firm is actually being fair to its customers. Modesty doesnt

help, and this has to be told to your customers so that they actually notice.

Utility:

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The objective of the investment have to be always kept in mind while marketing

Mutual Fund, for if there is a deviation, its utility is lost, or the customers remain

unsatisfied.

Liquidity:

This has again and again highlighted, for it the basic premise that most investors

invest in Mutual Fund only because of the high level of liquidity. There has to be a good

market development for your issue, so that there is a ready market available for them.


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COMPARATIVE STUDY OF MUTUAL FUNDS ON THE BASES OF ALPHA,

BETA AND STANDARD DEVIATION

ALPHA:-

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Measures how much if any of the extra risk helped the fund outperform its

corresponding benchmark. Using beta, alpha's computation compares the fund's

performance to that of the benchmark's risk-adjusted returns and establishes if the fund's

returns outperformed the market's, given the same amount of risk. For example, if a

fund has an alpha of 1, it means that the fund outperformed the benchmark by 1%.

Negative alphas are bad in that they indicate that the fund under performed for the

amount of extra, fund-specific risk that the fund's investors undertook.

BETA :-

Beta is useful statistical measure, which determines the volatility, or risk, of a

fund in comparison to that of its index or benchmark. A fund with a beta very close to 1

means the fund's performance closely matches the index or benchmark. A beta greater

than 1 indicates greater volatility than the overall market, and a beta less than 1

indicates less volatility than the benchmark.

STANDARD DEVIATION :-

The standard deviation essentially reports a fund's volatility, which indicates the

tendency of the returns to rise or fall drastically in a short period of time. A security that

is volatile is also considered higher risk because its performance may change quickly in

either direction at any moment. The standard deviation of a fund measures this risk by

measuring the degree to which the fund fluctuates in relation to its mean return.


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SENSEX RETURNS:

MONTHSENSEXRETURNS

March -0.14

April 0.14

May 0.02

June -0.17

July 0.11

CALCULATION OF RETURNS ON MUTUAL FUND SCHEMES:

BALANCE FUND:

TATA BALANCED FUND (GROWTH)

PRU ICICI FUND (GROWTH)

HDFC PRUDENCE FUND (GROWTH)


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MAGNUM BALANCE FUND (GROWTH)

JM BALANCED FUND (GROWTH)

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TATA BALANCED FUND

DATE NAV DATE NAV DATE NAV DATE NAV DATE NAV

RETURN RETURN RETURN RETURN

RETUR

N

(%) (%) (%) (%) (%)

1-Mar -1.30% 2-Apr -1.94 3-May 1.16% 1-Jun 0.09% 2-Jul 0.34%

2-Mar -3.23% 3-Apr 0.74% 4-May -0.39% 4-Jun -0.49% 3-Jul 0.74%

5-Mar 1.10% 4-Apr 1.06% 7-May -0.23% 5-Jun 0.62% 4-Jul 0.17%

6-Mar 1.10% 5-Apr 0.55% 8-May -0.44% 6-Jun -1.10% 5-Jul -0.27%

7-Mar -0.91% 9-Apr 1.64% 9-May 0.07% 7-Jun -0.09% 6-Jul 0.52%

8-Mar 2.36% 10-Apr 0.28% 10-May 0.01% 8-Jun -0.59% 9-Jul 0.45%

9-Mar -0.84% 11-Apr 0.50% 11-May 0.26% 11-Jun -0.22% 10-Jul -0.39%

12-Mar 0.80% 12-Apr -0.13% 14-May 0.83% 12-Jun -0.11% 11-Jul 0.14%


14-Mar -1.96% 16-Apr 1.74% 16-May 1.19% 14-Jun 1.18% 13-Jul 0.83%

16-Mar -0.60% 17-Apr -0.47% 17-May 0.83% 15-Jun 0.04% 16-Jul 0.17%


20-Mar 0.24% 19-Apr 0.06% 21-May 0.59% 19-Jun 1.11% 19-Jul 0.83%



23-Mar 0.31% 24-Apr 0.81% 24-May -0.62% 22-Jun -0.23% 24-Jul 0.14%

26-Mar -0.41% 25-Apr 0.16% 25-May 0.55% 25-Jun 0.31% 25-Jul -0.75%

28-Mar -1.17% 26-Arp -0.13% 28-May 0.37% 26-Jun 0.48% 26-Jul -0.09%


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27-Apr -0.78% 29-May 0.71% 27-Jun -0.31% 27-Jul 2.66%

30-Apr 0.61% 30-May -0.47% 28-Jun 0.29% 30-Jul 0.01%

31-May 0.79% 29-Jun 0.95% 31-Jul 1.67%

TOTAL 0.44% TOTAL -1.85% TOTAL 5.20% TOTAL 2.68% TOTAL 8.67%

Avg. Avg. - Avg. Avg. Avg.

RETURNS 0.02% RETURNS 0.092325 RETURNS 0.25% RETURNS 0.13% RETURNS 0.41%

39


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PRU ICICI BALANCED FUND



RETUR

N

(%) (%) (%) (%) (%)

1-Mar 1.05% 2-Apr -1.92% 3-May 1.03% 1-Jun 0.16% 2-Jul 0.02%

2-Mar -1.66 3-Apr 0.80% 4-May -0.74% 4-Jun -0.60% 3-Jul 0.90%

5-Mar -3.23% 4-Apr 0.64% 7-May -0.34% 5-Jun 0.55% 4-Jul -0.22%








16-Mar 0.00% 17-Apr -0.66% 17-May 0.79% 15-Jun 0.03% 16-Jul -0.21%



21-Mar 0.70% 20-Apr 1.24% 22-May 0.06% 20-Jun 0.78% 20-Jul 0%




28-Mar -1.31% 26-Apr -0.23% 28-May 0.83% 26-Jun 0.36% 26-Jul -0.18%

27-Apr -1.33% 29-May 0.55% 27-Jun -0.17% 27-Jul -2.70%

30-Apr 0.03% 30-May -0.79% 28-Jun 0.19% 30-Jul -0.24%

31-May 0.41% 29-Jun 0.85% 31-Jul 1.61%


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TOTAL -0.20% TOTAL 4.84% TOTAL 4.50% TOTAL 0.69% TOTAL 1.90%

Avg. Avg. Avg. Avg. Avg.

RETURNS 0.25% RETURNS 0.24% RETURNS 0.21% RETURNS 0.03% RETURNS 0.09%

40


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HDFC PRUDENCE FUND


RETURN RETURN RETURN RETURN RETURN

(%) (%) (%) (%) (%)








12-Mar 0.66% 12-Apr -0.47% 14-May 1.37% 12-Jun -0.66% 11-Jul -0.06%








26-Mar -0.31% 24-Apr 0.24% 24-May -0.85% 22-Jun -0.32% 24-Jul -0.07%


26-Apr -0.26% 28-May 1.21% 26-Jun 0.37% 26-Jul 0.19%


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27-Apr -0.41% 29-May 0.33% 27-Jun 0.11% 27-Jul -1.49%

30-Apr 0.81% 30-May -0.42% 28-Jun -0.09% 30-Jul -0.04%

31-May 0.88% 29-Jun 0.71% 31-Jul 1.73%


Avg. -0.22% Avg. 0.31% Avg. 0.22% Avg. 0.15% Avg. 0.21%

RETURNS RETURNS RETURNS RETURNS RETURNS

41


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MAGNUM BALANCE FUND



RETUR

N

(%) (%) (%) (%) (%)



5-Mar -2.64% 4-Apr 0.88% 7-May -0.31% 5-Jun 0.05% 4-Jul 0.08%









19-Mar 1.46% 18-Apr 0.60% 18-May 0.33% 18-Jun 0.00% 17-Jul -0.53%






-1.12% 26-Apr -0.39% 28-May 0.27% 26-Jun 0.35% 26-Jul 0.08%

27-Apr -1.16% 29-May 0.99% 27-Jun -0.11% 27-Jul -2.54%

30-Apr 0.51% 30-May -0.27% 28-Jun 0.26% 30-Jul 0.31%


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31-May 0.19% 29-Jun 0.92% 31-Jul 1.34%



RETURNS -0.04% RETURNS 0.32% RETURNS 0.23% RETURNS 0.08% RETURNS 0.14%

42


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JM BALANCED FUND


RETURN RETURN RETURN RETURNRETURN

(%) (%) (%) (%) (%)

-






-






-



-



-


23-Mar 0.04% 24-Apr 0.50% 24-May -0.70% 22-Jun 0.41% 24-Jul -0.24%


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-


-

27-Apr 1.02% 29-May 0.66% 27-Jun 0.59% 27-Jul -3.04%

30-Apr 0.69% 30-May -0.90% 28-Jun 1.11% 30-Jul 1.35%

31-May 1.69% 29-Jun -0.16% 31-Jul 1.35%




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Sensex (Sm-Sm)* (Sm-mean)* (Mm-mean)*

Month

Return

s tata bal (Sm-mean) (Mm-mean) (Mm-Mm) (Sm-mean) (Mm-mean)

March -0.14 0.02 -0.132 -0.1240 0.016368 0.0004 0.015376

April 0.14 -0.09 0.148 -0.2340 -0.034632 0.0081 0.054756

May 0.02 0.25 0.028 0.1060 0.002968 0.0625 0.011236

June -0.17 0.13 -0.162 -0.0140 0.002268 0.0169 0.000196

July 0.11 0.41 0.118 0.2660 0.031388 0.1681 0.070756

TOTAL -0.04 0.72 0.01836 0.256 0.030525

mean -0.008 0.144

BET

A 0.01836/ 0.08028 ALPHA 0.1458296

0.2286996 Standard Deviation 0.030525


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PRU

Month sensex returns ICICI (Sm-mean) (Tm-mean) (Sm-Sm)*(Tm-Tm) (Tm-mean)*(tm-mean) (Tm-mean)*(tm-mean)

March -0.14 0.25 -0.132 0.086 -0.011352 0.007396 0.007396

April 0.14 0.24 0.148 0.076 0.011248 0.005776 0.005776

May 0.02 0.21 0.028 0.046 0.001288 0.002116 0.002116

June -0.17 0.03 -0.162 -0.134 0.021708 0.017956 0.017956

July 0.11 0.09 0.118 -0.074 -0.008732 0.005476 0.005476

TOTA

L -0.04 0.82 0.01416

MEAN -0.008 0.164

BET

A 0.01416/ 0.08028

ALPH

A 0.174


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MAG (Mm-

Month sensex returns BAL (Sm-mean) mean) (Sm-Sm)*(Tm-Tm) (Tm-mean)*(tm-mean)

March -0.14 -0.04 -0.132 -0.186 -0.186 0.034596

April 0.14 0.32 0.148 0.174 0.174 0.030276

May 0.02 0.23 0.028 0.084 0.084 0.007056

June -0.17 0.08 -0.162 -0.066 -0.066 0.004356

July 0.11 0.14 0.118 -0.006 -0.006 0.013924

TOTAL -0.04 0.73 0.012

MEAN -0.008 0.146

BETA 0.012/ 0.08028 ALPHA 0.1522422



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sense

x HDFC (Sm- (Mm- (Sm-Sm)*(Tm- (Tm-mean)*(tm-

Month

return

s Pru mean) mean) Tm) mean)

March -0.14 -0.22 -0.132 -0.354 0.046728 0.125316

April 0.14 0.31 0.148 0.176 0.026048 0.030976

May 0.02 0.22 0.028 0.086 0.002408 0.007396

June -0.17 0.15 -0.162 0.016 -0.002592 0.000256

July 0.11 0.21 0.118 0.076 0.008968 0.005776

TOTAL -0.04 0.67 0.08156

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MEA

N -0.008 0.134

BETA 0.08156/

0.08028 ALPHA 0.142127554


(Mm-

Month sensex returns JM BAL (Sm-mean) mean) (Sm-Sm)*(Tm-Tm) (Tm-mean)*(tm-mean)

March -0.14 -0.02 -0.132 -0.228 0.030096 0.017424

April 0.14 0.36 0.148 0.152 0.022496 0.021904

May 0.02 0.25 0.028 0.042 0.001176 0.000784

June -0.17 0.05 -0.162 -0.158 0.025596 0.026244

July 0.11 0.4 0.118 0.192 0.022656 0.013924

TOTAL -0.04 1.04 0.10202

MEAN -0.008 0.208

BET

A 0.10202/ 0.08028 ALPHA 0.218166418

1.270802192

Standard

Deviation 0.0185

SCHEMES BETA ALPHA

S.D

.

TATA 0.2286996 0.146 0.031

PRU ICICI 0.174 0.165 0.006

HDFC 1.314365517 0.142 0.0524


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MAG BAL 0.132383266 0.152 0.0137

JM BAL 1.24 0.218 0.0185

INTERPRETATION:

BETA:

This indicates that HDFC Schemes in balance fund has given return with par

with SENSEX. The highest volatility shown in balance fund is by JM Morgan Balance

fund. And the least volatility is been shown by Magnum Balance Fund.

Alpha:

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Alpha of JM Morgan is the higgest, this indicate that with the given risk the

fund has given good return. It indicate that JM Morgan strategy is that, it takes

comparatively more risk but at the same time it gives good return. The less return is

given by TATA Balance Fund.

Standard Deviation:

Standard Deviation indicate volatility in the performance. From the Balance

Fund it indicates that HDFC has high volatility in its portfolio.

Investors who do not want to take much risk normally go for Balanced Funds.in

Balance Fund also investors who are risk averse can go for Pru ICICI as has less beta

that is it is less volatile but at the same time it is giving good returns.


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EQUITY FUND:

DSP ML Equity Fund

Reliance Vision Fund

Magnum Multicap Fund

Birla Midcap Fund

Franklin India Opportunities Fund


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48


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EQUITY DIVERSIFIED

DSP ML Equity Fund


RETURN RETURN RETURN RETURNRETUR

N

(%) (%) (%) (%) (%)

-



5-Mar -4.45% 4-Apr 1.23% 7-May -0.09% 5-Jun 0.59% 4-Jul 0.14%





-




-



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-

19-Mar 1.27% 18-Apr 0.23% 18-May 0.10% 18-Jun -0.58% 17-Jul -0.93%






-


-

27-Apr 1.48% 29-May 0.97% 27-Jun -0.34% 27-Jul -3.88%

30-Apr 0.96% 30-May -0.54% 28-Jun 0.44% 30-Jul 0.79%

31-May 0.72% 29-Jun 1.01% 31-Jul 1.46%




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Reliance Vision Fund - (G)


RETUR

N RETURN RETURN RETURN

RETUR

N

(%) (%) (%) (%) (%)

-








-




-


19-Mar 1.52% 18-Apr 0.35% 18-May -0.26% 18-Jun 0.24% 17-Jul -0.71%






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-

27-Apr 1.41% 29-May 0.96% 27-Jun -0.27% 27-Jul -2.42%

30-Apr 1.00% 30-May -0.52% 28-Jun 0.70% 30-Jul 0.19%

31-May 1.02% 29-Jun 0.71% 31-Jul 1.54%




50


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Magnum Multicap Fund (G)


RETUR RETUR RETUR RETUR

NRETURN N N N

(%) (%) (%) (%) (%)








12-Mar 0.57% 12-Apr -0.82% 14-May 1.72% 12-Jun -0.19% 11-Jul -0.12%



16-Mar -1.15% 17-Apr -0.85% 17-May 0.64% 15-Jun 0.39% 16-Jul -0.41%






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27-Apr -1.47% 29-May 0.69% 27-Jun -0.75% 27-Jul -3.40%

30-Apr 0.32% 30-May -1.61% 28-Jun 0.19% 30-Jul 0.00%

31-May 1.07% 29-Jun 1.25% 31-Jul 2.09%



RETURN -0.01% RETURN 0.37% RETURN 0.17% RETURN 0.05% RETURN 0.28%

S S S S S

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105/165


106/165



22-Mar 1.29% 23-Apr -0.16% 23-May -0.48% 21-Jun 0.62% 23-Jul 0.55%




27-Apr -0.68% 29-May 0.35% 27-Jun 0.00% 27-Jul -2.74%

30-Apr 0.88% 30-May -0.41% 28-Jun 0.66% 30-Jul 0.60%

31-May 1.11% 29-Jun 0.95% 31-Jul 1.44%


Avg. -0.23% Avg. 0.52% Avg. 0.46% Avg. 0.17% Avg. 0.37%

RETURNS RETURNS RETURNS RETURNS RETURNS

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Franklin India Opportunities Fund - (G)



RETUR

N

(%) (%) (%) (%) (%)



5-Mar -4.53% 4-Apr -0.17% 7-May -0.55% 5-Jun 0.27% 4-Jul 0.13%








16-Mar -0.52% 17-Apr -1.12% 17-May 1.03% 15-Jun -0.18% 16-Jul 0.63%




22-Mar 1.17% 23-Apr -0.09% 23-May -0.79% 21-Jun 0.34% 23-Jul 1.04%




108/165


27-Apr -1.42% 29-May 1.06% 27-Jun -0.53% 27-Jul -4.39%

30-Apr -0.04% 30-May -0.56% 28-Jun 0.74% 30-Jul 0.54%

31-May 0.64% 29-Jun 0.37% 31-Jul 1.68%




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EQUITY DIVERSIFIED

DSP (Sm-

sensex ML (Sm- (Dm- Sm)*(Tm-(Sm-mean)*(Sm- (Tm-

mean)*(tm-

Month returns Eq mean) mean) Tm) mean) mean)

March -0.14 -0.07 -0.132 -0.302 0.039864 0.017424 0.091204

April 0.14 0.45 0.148 0.218 0.032264 0.021904 0.047524

May 0.02 0.46 0.028 0.228 0.006384 0.000784 0.051984

June -0.17 0.14 -0.162 -0.092 0.014904 0.026244 0.008464

July 0.11 0.18 0.118 -0.052 -0.006136 0.013924 0.002704

TOTAL -0.04 1.16 0.08728

MEAN -0.008 0.232


110/165

BET

A 0.08728/ 0.08028 ALPHA 0.241


sense

x (Sm- (Rm- (Sm-Sm)*(Tm- (Tm-mean)*(tm-

Month

return

s Rel VIS mean) mean) Tm) mean)

March -0.14 -0.13 -0.132 -0.372 0.049104 0.138384

April 0.14 0.49 0.148 0.248 0.036704 0.061504

May 0.02 0.41 0.028 0.168 0.004704 0.028224

June -0.17 0.17 -0.162 -0.072 0.011664 0.005184

July 0.11 0.27 0.118 0.028 0.003304 0.000784

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TOTAL -0.04 1.21 0.10548

MEAN -0.008 0.242

BETA 0.10548/0.08028 ALPHA 0.2525


(Mm-

Month sensex returns Mag Mul (Sm-mean) mean) (Sm-Sm)*(Tm-Tm) (Tm-mean)*(tm-mean)

March -0.14 -0.01 -0.132 -0.182 0.024024 0.033124

April 0.14 0.37 0.148 0.198 0.029304 0.039204

May 0.02 0.17 0.028 -0.002 -0.000056 0.00

June -0.17 0.05 -0.162 -0.122 0.019764 0.014884

July 0.11 0.28 0.118 0.108 0.012744 0.011664

0.016095686

TOTAL -0.04 0.86 0.18466

MEAN -0.008 0.172

BETA 0.08578/ 0.08028 ALPHA 0.181


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sensex Birla (Sm- (Bm- (Sm-Sm)*(Tm- (Tm-mean)*(tm-

Monthreturns Mid mean) mean) Tm) mean)

March -0.14 -0.23 -0.132 -0.488 0.064416 0.017424

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April 0.14 0.52 0.148 0.262 0.038776 0.021904

May 0.02 0.46 0.028 0.202 0.005656 0.000784

June -0.17 0.17 -0.162 -0.088 0.014256 0.026244

July 0.11 0.37 0.118 0.112 0.013216 0.013924

TOTAL -0.04 1.29 0.13632

MEAN -0.008 0.258

BETA 0.13632/0.08028 ALPHA 0.272

1.698056801

Standard

Deviation 0.0952

sensex Fran Ind (Sm- (Bm- (Sm-Sm)*(Tm- (Tm-mean)*(tm-

Month returns Opp mean) mean) Tm) mean)

March -0.14 -0.03 -0.132 -0.31 0.04092 0.0961

April 0.14 0.41 0.148 0.13 0.01924 0.0169

May 0.02 0.73 0.028 0.45 0.0126 0.2025

June -0.17 0.14 -0.162 -0.14 0.02268 0.0196

July 0.11 0.15 0.118 -0.13 -0.01534 0.0169

TOTA

L -0.04 1.4 0.0801

MEAN -0.008 0.28

BETA 0.0801/0.08028 ALPHA 0.288



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SCHEMES BETA ALPHA

S.D

.

DSP ML Eq 1.09 0.241

0.03

6

Rel VIS 1.31 0.252

0.05

7

Mag Mul 1.07 0.181

0.01

6

Birla Mid 1.698 0.272

0.09

5

Fran Ind

Opp 0.998 0.2880.087

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INTERPRETATION

BETA:

Beta of Birla Midcap Equity Scheme is the highest, this indicate that the risk

Comparative Analysis of Mutual Fund With India Infoline by Nikita Chinchane_new

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