Return Generated Form MF and Its IPO

8/14/2019 Return Generated Form MF and Its IPO

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Mutual Funds are among the hottest favorites withall types of investors. Investing in mutual fundsranks among one of the preferred ways of creatingwealth over the long term. In fact, mutual fundsrepresent the hands-off approach to entering theequity market. There are a wide variety of mutualfunds that are viable investment avenues to meet awide variety of financial goals. This section explainsthe various aspects of Mutual Fund


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A

PROJECTON

Return generated from Mutual fund and Return generated from Mutual fund and Return generated from Mutual fund and Return generated from Mutual fund and IPO IPO IPO IPO

FOR THE SESSION

2007-2008

IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF DEGREE OF

Bachelor of Business Administration

Submitted To: Submitted To: Submitted To: Submitted To: Submitted By: Submitted By: Submitted By: Submitted By: Prof. A.S. Khalsa RAVIRAJ DUBEY


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PREFACE

The research provides an opportunity to a student to demonstrate application of his /

her knowledge, skill and competencies required during the technical session. Research

also helps the student to devote his / her skill to analyze the problem to suggestalternative solutions, to evaluate them and to provide feasible recommendations on the

provided data.

The research is on the topic of RETURN GENERATED FROM MUTUAL FUND AND IPO OF THE

BANKING SECTOR . Although I have tried my level best to prepare this report an error free

report every effort has been made to offer the most authenticate position with accuracy.


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CHAPTER 1:- CONCEPTUAL OVERVIEW .

1.1 Introduction to the Topic.

CHAPTER 2:- RESEARCH AND METHODOLOGY

2.1 Objective of the Study.

2.2 Method

2.3 Significance

2.4 Hypothesis

2.5 Limitations

CHAPTER 3:- CONCEPT OF MUTUAL FUND

3.1 Mutual fund meaning

3.2 A brief history of mutual fund in India

3.3 Types of mutual fund

3.4 Advantage of mutual fund

3.5 Disadvantage of mutual funds

3.6 Picking of mutual fund

CHAPTER 4:- CONCEPT OF IPO

4.1 Introduction of IPOs

4.2 Why Do Companies Offer IPOs

4.3 How to make IPOs

CHAPTER 5:- CASE STUDY

5.1 Introduction to the Mutual Fund Company& IPO (NSE) release of the aboveCompanies last 3 Year in same period

5.2 Introduction of Mutual Fund Scheme

5.3 Data Analysis

CHAPTER 6:- FINDINGS


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CHAPTER 1


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Return generated from Mutual Fund & Initial PublicOffering

Conceptual Overview:-

Mutual Fund:-Mutual Fund is a investment company that pools money from shareholders and invests

in a variety of securities, such as stocks, bonds and money market instruments. Most

open-end mutual funds stand ready to buy back (redeem) its shares at their current net

asset value, which depends on the total market value of the fund's investment portfolio

at the time of redemption. Most open-end mutual funds continuously offer new shares toinvestors

IPO Initial Public Offering

As you can see, the road to an IPO is a long and complicated one. You may have noticed that

individual investors aren't involved until the very end. This is because small investors aren't the

target market. They don't have the cash and, therefore, hold little interest for the underwriters.

If underwriters think an IPO will be successful, they'll usually pad the pockets of their favourite

institutional client with shares at the IPO price. The only way for you to get shares (known as anIPO allocation) is to have an account with one of the investment banks that is part of the

underwriting syndicate. But don't expect to open an account with Rs.1, 000 and be showered

with an allocation. You need to be a frequently trading client with a large account to get in on a

hot IPO.

Bottom line, your chances of getting early shares in an IPO are slim to none unless you're on

the inside. If you do get shares, it's probably because nobody else wants them. Granted, there

are exceptions to every rule and it would be incorrect for us to say that it's impossible. Just keepin mind that the probability isn't high if you are a small investor

Public issues can be classified into Initial Public offerings and further public offerings. In a public

offering, the issuer makes an offer for new investors to enter its shareholding family. The issuer

company makes detailed disclosures as per the DIP guidelines in its offer document and offers

it for subscription. Initial Public Offering (IPO ) is when an unlisted company makes either a

fresh issue of securities or an offer for sale of its existing securities or both for the first time tothe public. This paves way for listing and trading of the issuers securities.


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OBJECTIVES

1) To Study of Return generated from various mutual fund and IPO

2) To Know various scheme of mutual fund

SIGNIFICANCE: -

The significance of this study of mutual fund helps us to know various Investment

options. With specific mutual fund offer several advantages over investing in

individual stock including diversification and professional management.

IPO based on the companys goodwill. IPO helps to raise the fund to invest inproject to stimulate growth and if successful to increase the value per share of

the company.

RESEARCH METHODOLOGY: -

The return of the last three year of the company which is equity diversifies and

comparison of the companys mutual fund and IPO to be made generated to

various IPO. The sample of three IPO to concern of the same period

LIMITATIONS: -

Period, Scheme to make conclude to different Inferences


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3.1 MEANING OF THE MUTUAL FUND A mutual fund is a common pool of money into which investor place their conurbation that are to

be invested in accordance with stated objectives. The ownership o the fund is thus joint or

mutual the fund belong to all investors. A single investor ownership of the fund is in the same

proportion as the amount of the contribution made by him or her bear to the total amount of the

fund.

A mutual fund uses the money collected from investor to those assets which are

specifically permitted by it stated investment objective. Thus equity would buy mainly equity

assets ordinary shares preferences share, warrants etc. A bond fund would mainly buy debt

instrument such as debenture, bond, or government securities. It is this asset which is owned by

the investor in the same proportion as their contribution bear to the total contribution of al

investors put together.When an investors subscribes to a mutual fund. He or she buys a part of the

assets or the pool of funds that are outsourcing at that time.

It is no different from buying share of a joint stock company in which case the purchase makes

the investor a part owner of the company and its assets. In fact in the U.S. A. a mutual fund is

constituted as an investment company and an investor buy into the fund meaning he buy the

shares of the fund.

In India mutual fund is constituted as a trust and the investor subscribes to the

units issued by the fund which is where the term unit trust comes from. However whether theinvestor gets fund share or units is only a matter of legal distinction in any case. Mutual fund

shareholder assets throughout this workbook we have used the term unit holder to denote the

mutual fund investor in line with the common Indian usage of the term. The term unit holder

includes the mutual fund account. A units-holder includes the mutual fund account-holder or

closed and fund share-holder.

A unit holder in UTI US-64 share is the same as a UTI master share holder or an

investor in all an alliance or DSP Merrill luchor prudential ICICI or TATA or TEMPTON or SBI or

any other fund managers open-end or closed-end scheme.

Since each owner is a part owner of a mutual fund, it is necessary to establish the value of his

part. In other word each share or unit that an investor holds need to be assigned a value since

the units held by an investor evidence the owner ship of the funds assets the value of total

assets of the fund when divided by the total number of units issued by the mutual fund gives us

the value of on a units.

This is generally called the NAV (NET ASSETS VALUE) of one unit or one share.

The value of an investors part ownership is thus determined by NAV of the number of unit held.

Lets us see an example. If the value of a funds assets stand at Rs 1000 and it has 10 investors


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who have brought 10 units each, the total number of units issued is 100, and the value one units

is Rs 10.00 (1000/100). If a single investor in fact owns 3 units the value of ownership of the

fund will be Rs 30.00 (1000/100*3) units. Not that the value of the funds investment will keep

fluctuating with the market price movement causing the Net Assets Value also to fluctuated.

For example if the value of our assets increased from Rs 1000 to 1200 , the

value of our investors holding of 3 units will be (1200/1000*3) Rs 36.

The investment value can go up or down depending on the market value of the fund is assts.

Understanding Mutual Funds

Mutual fund is a trust that pools money from a group of investors (sharing common financial

goals) and invest the money thus collected into asset classes that match the stated investment

objectives of the scheme. Since the stated investment objectives of a mutual fund schemegenerally form the basis for an investor's decision to contribute money to the pool, a mutual fund

can not deviate from its stated objectives at any point of time.

Every Mutual Fund is managed by a fund manager, who using his investment management

skills and necessary research works ensures much better return than what an investor can

manage on his own. The capital appreciation and other incomes earned from these investments

are passed on to the investors (also known as unit holders) in proportion of the number of units

they own.


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When an investor subscribes for the units of a mutual fund, he becomes part owner of the

assets of the fund in the same proportion as his contribution amount put up with the corpus (thetotal amount of the fund). Mutual Fund investor is also known as a mutual fund shareholder or a

Concept of Mutual Fund

Many investor with commonfinancial objectives pool their money

Investors, on a proportionate basis, get mutualfund units for the sum contributed to the pool

The money collected from investors is invested intoshares, debentures and other securities by the fund

The fund manager realizes gains or losses, and collectsdividend or interest income

Any capital gains or losses from such investments arepassed on to the investors in proportion of the number of


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3.3 TYPES OF MUTUAL FUNDSGeneral Classification of Mutual Funds

1. Open-end Funds/Closed-end Funds

Open-end Fund :-

Funds that can sell and purchase units at any point in time are classified as

Open-end Funds. The fund size (corpus) of an open-end fund is variable (keeps

changing) because of continuous selling (to investors) and repurchases (from the

investors) by the fund. An open-end fund is not required to keep selling new units

to the investors at all times but is required to always repurchase, when an

investor wants to sell his units. The NAV of an open-end fund is calculated every

day.

Closed-end Funds

Funds that can sell a fixed number of units only during the New Fund Offer

(NFO) period are known as Closed-end Funds. The corpus of a Closed-end Fund

remains unchanged at all times. After the closure of the offer, buying and

redemption of units by the investors directly from the Funds is not allowed.

However, to protect the interests of the investors, SEBI provides investors with

two avenues to liquidate their positions:

Closed-end Funds are listed on the stock exchanges where investors can buy/sell units from/toeach other. The trading is generally done at a discount to the NAV of the scheme. The NAV of a

closed-end fund is computed on a weekly basis (updated every Thursday).

Closed-end Funds may also offer "buy-back of units" to the unit holders. In this case, the corpus

of the Fund and its outstanding units do get changed.

2. Load Funds/No Load Fund

Load Funds:

Mutual Funds incur various expenses on marketing, distribution, advertising,portfolio churning, fund manager's salary etc. Many funds recover these

expenses from the investors in the form of load. These funds are known as Load

Funds. A load fund may impose following types of loads on the investors:

Entry Load - Also known as Front-end load, it refers to the load charged to an investor at the

time of his entry into a scheme. Entry load is deducted from the investor's contribution amount

to the fund.

Exit Load - Also known as Back-end load, these charges are imposed on an investor when he

redeems his units (exits from the scheme). Exit load is deducted from the redemption proceeds

to an outgoing investor.


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Deferred Load - Deferred load is charged to the scheme over a period of time.

Contingent Deferred Sales Charge (CDSC) - In some schemes, the percentage of exit load

reduces as the investor stays longer with the fund. This type of load is known as Contingent

Deferred Sales Charge.

No-load Funds

All those funds that do not charge any of the above mentioned loads are known

as No-load Funds.

3. Tax-exempt Funds /Non Tax exempt Funds

Tax-exempt Funds:

Funds that invest in securities free from tax are known as Tax-exempt Funds. All

open-end equity oriented funds are exempt from distribution tax (tax for

distributing income to investors). Long term capital gains and dividend income in

the hands of investors are tax-free.

Non-Tax-exempt Funds

Funds that invest in taxable securities are known as Non-Tax-exempt Funds. In

India, all funds, except open-end equity oriented funds are liable to pay tax on

distribution income. Profits arising out of sale of units by an investor within 12

months of purchase are categorized as short-term capital gains, which are

taxable. Sale of units of an equity oriented fund is subject to Securities

Transaction Tax (STT). STT is deducted from the redemption proceeds to an

investor


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1. Equity Funds

Equity funds are considered to be the more risky funds as compared to other fund types,

but they also provide higher returns than other funds. It is advisable that an investor

looking to invest in an equity fund should invest for long term i.e. for 3 years or more.

There are different types of equity funds each falling into different risk bracket. In the

order of decreasing risk level, there are following types of equity funds:

a. Aggressive Growth Funds - In Aggressive Growth Funds, fund managers

aspire for maximum capital appreciation and invest in less researched shares ofspeculative nature. Because of these speculative investments Aggressive

Growth Funds become more volatile and thus, are prone to higher risk than other

equity funds.

b. Growth Funds - Growth Funds also invest for capital appreciation (with time

horizon of 3 to 5 years) but they are different from Aggressive Growth Funds in

the sense that they invest in companies that are expected to outperform the

market in the future. Without entirely adopting speculative strategies, Growth


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Funds invest in those companies that are expected to post above average

earnings in the future.

c. Speciality Funds - Speciality Funds have stated criteria for investments and

their portfolio comprises of only those companies that meet their criteria. Criteria

for some speciality funds could be to invest/not to invest in particular

regions/companies. Speciality funds are concentrated and thus, are

comparatively riskier than diversified funds.. There are following types of

speciality funds:

i. Sector Funds : Equity funds that invest in a particular

sector/industry of the market are known as Sector Funds. The

exposure of these funds is limited to a particular sector (say

Information Technology, Auto, Banking, Pharmaceuticals or Fast

Moving Consumer Goods) which is why they are more risky than

equity funds that invest in multiple sectors.

ii. Foreign Securities Funds : Foreign Securities Equity Funds have

the option to invest in one or more foreign companies. Foreign

securities funds achieve international diversification and hence they

are less risky than sector funds. However, foreign securities funds

are exposed to foreign exchange rate risk and country risk.

iii. Mid-Cap or Small-Cap Funds : Funds that invest in companies

having lower market capitalization than large capitalization

companies are called Mid-Cap or Small-Cap Funds. Market

capitalization of Mid-Cap companies is less than that of big, blue

chip companies (less than Rs. 2500 crores but more than Rs. 500

crores) and Small-Cap companies have market capitalization of less

than Rs. 500 crores. Market Capitalization of a company can be

calculated by multiplying the market price of the company's share bythe total number of its outstanding shares in the market. The shares

of Mid-Cap or Small-Cap Companies are not as liquid as of Large-

Cap Companies which gives rise to volatility in share prices of these

companies and consequently, investment gets risky.

iv. Option Income Funds*: While not yet available in India, Option

Income Funds write options on a large fraction of their portfolio.

Proper use of options can help to reduce volatility, which is

otherwise considered as a risky instrument. These funds invest in


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big, high dividend yielding companies, and then sell options against

their stock positions, which generate stable income for investors.

d. Diversified Equity Funds - Except for a small portion of investment in liquid

money market, diversified equity funds invest mainly in equities without any

concentration on a particular sector(s). These funds are well diversified and

reduce sector-specific or company-specific risk. However, like all other funds

diversified equity funds too are exposed to equity market risk. One prominent

type of diversified equity fund in India is Equity Linked Savings Schemes (ELSS).

As per the mandate, a minimum of 90% of investments by ELSS should be in

equities at all times. ELSS investors are eligible to claim deduction from taxable

income (up to Rs 1 lakh) at the time of filing the income tax return. ELSS usually

has a lock-in period and in case of any redemption by the investor before the

expiry of the lock-in period makes him liable to pay income tax on such income(s)

for which he may have received any tax exemption(s) in the past.

e. Equity Index Funds - Equity Index Funds have the objective to match the

performance of a specific stock market index. The portfolio of these funds

comprises of the same companies that form the index and is constituted in the

same proportion as the index. Equity index funds that follow broad indices (like

S&P CNX Nifty, Sensex) are less risky than equity index funds that follow narrow

sectoral indices (like BSEBANKEX or CNX Bank Index etc). Narrow indices are

less diversified and therefore, are more risky.

f. Value Funds - Value Funds invest in those companies that have sound

fundamentals and whose share prices are currently under-valued. The portfolio

of these funds comprises of shares that are trading at a low Price to Earnings

Ratio (Market Price per Share / Earning per Share) and a low Market to Book

Value (Fundamental Value) Ratio. Value Funds may select companies from

diversified sectors and are exposed to lower risk level as compared to growth

funds or speciality funds. Value stocks are generally from cyclical industries

(such as cement, steel, sugar etc.) which make them volatile in the short-term.

Therefore, it is advisable to invest in Value funds with a long-term time horizon as

risk in the long term, to a large extent, is reduced.

g. Equity Income or Dividend Yield Funds - The objective of Equity Income or

Dividend Yield Equity Funds is to generate high recurring income and steady


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capital appreciation for investors by investing in those companies which issue

high dividends (such as Power or Utility companies whose share prices fluctuate

comparatively lesser than other companies' share prices). Equity Income or

Dividend Yield Equity Funds are generally exposed to the lowest risk level as

compared to other equity fund

2. Debt / Income Funds

Funds that invest in medium to long-term debt instruments issued by private companies, banks,

financial institutions, governments and other entities belonging to various sectors (like

infrastructure companies etc.) are known as Debt / Income Funds. Debt funds are low risk

profile funds that seek to generate fixed current income (and not capital appreciation) to

investors. In order to ensure regular income to investors, debt (or income) funds distribute large

fraction of their surplus to investors. Although debt securities are generally less risky than

equities, they are subject to credit risk (risk of default) by the issuer at the time of interest or

principal payment. To minimize the risk of default, debt funds usually invest in securities from

issuers who are rated by credit rating agencies and are considered to be of "Investment Grade".

Debt funds that target high returns are more risky. Based on different investment objectives,

there can be following types of debt funds:

a. Diversified Debt Funds - Debt funds that invest in all securities issued by entities

belonging to all sectors of the market are known as diversified debt funds. The best

feature of diversified debt funds is that investments are properly diversified into all

sectors which results in risk reduction. Any loss incurred, on account of default by a debt

issuer, is shared by all investors which further reduces risk for an individual investor.

b. Focused Debt Funds* - Unlike diversified debt funds, focused debt funds are narrow

focus funds that are confined to investments in selective debt securities, issued by

companies of a specific sector or industry or origin. Some examples of focused debt

funds are sector, specialized and offshore debt funds, funds that invest only in Tax FreeInfrastructure or Municipal Bonds. Because of their narrow orientation, focused debt

funds are more risky as compared to diversified debt funds. Although not yet available in

India, these funds are conceivable and may be offered to investors very soon.

c. High Yield Debt funds - As we now understand that risk of default is present in all debt

funds, and therefore, debt funds generally try to minimize the risk of default by investing

in securities issued by only those borrowers who are considered to be of "investment

grade". But, High Yield Debt Funds adopt a different strategy and prefer securities

issued by those issuers who are considered to be of "below investment grade". The


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motive behind adopting this sort of risky strategy is to earn higher interest returns from

these issuers. These funds are more volatile and bear higher default risk, although they

may earn at times higher returns for investors.

d. Assured Return Funds - Although it is not necessary that a fund will meet its objectives

or provide assured returns to investors, but there can be funds that come with a lock-in

period and offer assurance of annual returns to investors during the lock-in period. Any

shortfall in returns is suffered by the sponsors or the Asset Management Companies

(AMCs). These funds are generally debt funds and provide investors with a low-risk

investment opportunity. However, the security of investments depends upon the net

worth of the guarantor (whose name is specified in advance on the offer document). To

safeguard the interests of investors, SEBI permits only those funds to offer assured

return schemes whose sponsors have adequate net-worth to guarantee returns in the

future. In the past, UTI had offered assured return schemes (i.e. Monthly Income Plans

of UTI) that assured specified returns to investors in the future. UTI was not able to fulfil

its promises and faced large shortfalls in returns. Eventually, government had to

intervene and took over UTI's payment obligations on itself. Currently, no AMC in India

offers assured return schemes to investors, though possible.

e. Fixed Term Plan Series - Fixed Term Plan Series usually are closed-end schemes

having short term maturity period (of less than one year) that offer a series of plans and

issue units to investors at regular intervals. Unlike closed-end funds, fixed term plans are

not listed on the exchanges. Fixed term plan series usually invest in debt / income

schemes and target short-term investors. The objective of fixed term plan schemes is to

gratify investors by generating some expected returns in a short period.

3. Gilt Funds

Also known as Government Securities in India, Gilt Funds invest in government papers (named

dated securities) having medium to long term maturity period. Issued by the Government ofIndia, these investments have little credit risk (risk of default) and provide safety of principal to

the investors. However, like all debt funds, gilt funds too are exposed to interest rate risk.

Interest rates and prices of debt securities are inversely related and any change in the interest

rates results in a change in the NAV of debt/gilt funds in an opposite direction.

4. Money Market / Liquid Funds

Money market / liquid funds invest in short-term (maturing within one year) interest bearing debt

instruments. These securities are highly liquid and provide safety of investment, thus makingmoney market / liquid funds the safest investment option when compared with other mutual fund


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types. However, even money market / liquid funds are exposed to the interest rate risk. The

typical investment options for liquid funds include Treasury Bills (issued by governments),

Commercial papers (issued by companies) and Certificates of Deposit (issued by banks).

5. Hybrid Funds

As the name suggests, hybrid funds are those funds whose portfolio includes a blend of

equities, debts and money market securities. Hybrid funds have an equal proportion of debt and

equity in their portfolio. There are following types of hybrid funds in India:

a. Balanced Funds - The portfolio of balanced funds include assets like debt securities,

convertible securities, and equity and preference shares held in a relatively equal

proportion. The objectives of balanced funds are to reward investors with a regular

income, moderate capital appreciation and at the same time minimizing the risk of

capital erosion. Balanced funds are appropriate for conservative investors having a long

term investment horizon.

b. Growth-and-Income Funds - Funds that combine features of growth funds and income

funds are known as Growth-and-Income Funds. These funds invest in companies having

potential for capital appreciation and those known for issuing high dividends. The level of

risks involved in these funds is lower than growth funds and higher than income funds.

c. Asset Allocation Funds - Mutual funds may invest in financial assets like equity, debt,

money market or non-financial (physical) assets like real estate, commodities etc.. Asset

allocation funds adopt a variable asset allocation strategy that allows fund managers to

switch over from one asset class to another at any time depending upon their outlook for

specific markets. In other words, fund managers may switch over to equity if they expect

equity market to provide good returns and switch over to debt if they expect debt market

to provide better returns. It should be noted that switching over from one asset class to

another is a decision taken by the fund manager on the basis of his own judgment and

understanding of specific markets, and therefore, the success of these funds depends

upon the skill of a fund manager in anticipating market trends.

6. Commodity Funds-

Those funds that focus on investing in different commodities (like metals, food grains, crude oil

etc.) or commodity companies or commodity futures contracts are termed as Commodity Funds.

A commodity fund that invests in a single commodity or a group of commodities is a specialized

commodity fund and a commodity fund that invests in all available commodities is a diversified

commodity fund and bears less risk than a specialized commodity fund. "Precious Metals Fund"and Gold Funds (that invest in gold, gold futures or shares of gold mines) are common


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examples of commodity funds.

7. Real Estate Funds

Funds that invest directly in real estate or lend to real estate developers or invest in

shares/securitized assets of housing finance companies, are known as Specialized Real Estate

Funds. The objective of these funds may be to generate regular income for investors or capital

appreciation.

8. Exchange Traded Funds (ETF)

Exchange Traded Funds provide investors with combined benefits of a closed-end and an

open-end mutual fund. Exchange Traded Funds follow stock market indices and are traded on

stock exchanges like a single stock at index linked prices. The biggest advantage offered by

these funds is that they offer diversification, flexibility of holding a single share (tradable at index

linked prices) at the same time. Recently introduced in India, these funds are quite popular

abroad.

9. Fund of Funds

Mutual funds that do not invest in financial or physical assets, but do invest in other mutual fund

schemes offered by different AMCs, are known as Fund of Funds. Fund of Funds maintain a

portfolio comprising of units of other mutual fund schemes, just like conventional mutual funds

maintain a portfolio comprising of equity/debt/money market instruments or non financial assets.

Fund of Funds provide investors with an added advantage of diversifying into different mutual

fund schemes with even a small amount of investment, which further helps in diversification of

risks. However, the expenses of Fund of Funds are quite high on account of compounding

expenses of investments into different mutual fund schemes.


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3.4 Advantages of Mutual Funds

Since their creation, mutual funds have been a popular investment vehicle for investors. Their

simplicities along with other attributes provide great benefit to investors with limited knowledge,

time, or money. To help you decide whether mutual funds are best for you and your situation,

we are going to look at some reasons why you might want to consider investing in mutual funds.

1. Diversification

One rule of investing that both large and small investors should follow is asset

diversification. Used to manage risk, diversification involves the mixing of investments

within a portfolio. For example, by choosing to buy stocks in the retail sector and

offsetting them with stocks in the industrial sector, you can reduce the impact of the

performance of any one security on your entire portfolio. To achieve a truly diversified

portfolio, you may have to buy stocks with different capitalizations from different

industries and bonds having varying maturities from different issuers. For the individual

investor this can be quite costly.

By purchasing mutual funds, you are provided with the immediate benefit of instant

diversification and asset allocation without the large amounts of cash needed to create

individual portfolios. One caveat (beware), however, is that simply purchasing onemutual fund might not give you adequate diversification - check to see if the fund is

sector or industry specific. For example, investing in an oil and energy mutual fund might

spread your money over fifty companies, but if energy prices fall, your portfolio will likely

suffer.

2. Economies of Scale

The easiest way to understand an economy of scale is by thinking about volume

discounts: in many stores the more of one product you buy, the cheaper that productbecomes. For example, when you buy a dozen donuts, the price per donut is usually

cheaper than buying a single one. This occurs also in the purchase and sale of

securities. If you buy only one security at a time, the transaction fees will be relatively

large.

Mutual funds are able to take advantage of their buying and selling size and thereby

reduce transaction costs for investors. When you buy a mutual fund, you are able to

diversify without the numerous commission charges. Imagine if you had to buy the 10-20stocks needed for diversification. The commission charges alone would eat up a good


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chunk of your savings. Add to this the fact that you would have to pay more transaction

fees every time you wanted to modify your portfolio - as you can see the costs begin to

add up. Mutual funds are able to make transactions on a much larger scale

3. Divisibility

Many investors don't have the exact sums of money to buy round lots of securities. One

to two hundred dollars is usually not enough to buy a round lot of a stock, especially

after deducting commissions. Investors can purchase mutual funds in smaller

denominations, ranging from Rs100 to Rs1000 minimums. So, rather than having to wait

until you have enough money to buy higher-cost investments, you can get in right away

with mutual funds. This leads us to the next advantage.

4. Liquidity

Another advantage of mutual funds is the ability to get in and out with relative ease. You

can sell mutual funds at any time as they are as liquid as regular stocks. Both the

liquidity and smaller denominations of mutual funds provide mutual fund investors the

ability to make periodic investments through monthly purchase plans while taking

advantage of Rupee -cost averaging.

5. Professional Management

When you buy a mutual fund, you are also choosing a professional money manager.

This manager will use the money that you invest to buy and sell stocks that he or she

has carefully researched. Therefore, rather than having to research thoroughly every

investment before you decide to buy or sell, you have a mutual fund's money manager

to handle it for you.

As with any investment, there are risks involved in buying mutual funds. These

investment vehicles can experience market fluctuations and sometimes provide returns

below the overall market. Also, the advantages gained from mutual funds are not free:many of them carry loads, annual expense fees and penalties for early withdrawal. In the

next article we will take a closer look at some of these drawbacks so you can decide if

mutual funds are right for you.


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3.5 Disadvantages of Mutual Funds

Like many investments, mutual funds offer advantages and disadvantages, which are important

for you to consider and understand before you decide to buy. Here we explore some of thedrawbacks of mutual funds.

1. Fluctuating Returns

Mutual funds are like many other investments without a guarante ed return. There is

always the possibility that the value of your mutual fund will depreciate. Unlike fixed -

income products, such as bonds and Treasury bills, mutual funds experience price

fluctuations along with the stocks that make up the fund. When deciding on a particular

fund to buy, you need to research the risks involved - just because a professional manager is looking after the fund, that doesn't mean the performance will be stellar.

2. Diversification?

Although diversification is one of the keys to successful investing, many mutual fund

investors tend to over diversify. The idea of diversification is to reduce the risks

associated with holding a single security; over diversification (also known as

diversification) occurs when investors acquire many funds that are highly related and so

don't get the risk reducing benefits of diversification.At the other extreme, just because you own mutual funds doesn't mean you are

automatically diversified. For example, a fund that invests only in a particular industry or

region is still relatively risky.

3. Cash, Cash and More Cash

As you know already, mutual funds pool money from thousands of investors, so

everyday investors are putting money into the fund as well as withdrawing investments.To maintain liquidity and the capacity to accommodate withdrawals, funds typically have

to keep a large portion of their portfolio as cash. Having ample cash is great for liquidity,

but money sitting around as cash is not working for you and thus is not very

advantageous

4. Costs

Mutual funds provide investors with professional management; however, it comes at a

cost. Funds will typically have a range of different fees that reduce the overall payout. Inmutual funds the fees are classified into two categories: shareholder fees and annual


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fund-operating fees.

The shareholder fees, in the forms of loads and redemption fees, are paid directly by

shareholders purchasing or selling the funds. The annual fund operating fees are

charged as an annual percentage - usually ranging from 1-3%. These fees are assessed

to mutual fund investors regardless of the performance of the fund. As you can imagine,

in years when the fund doesn't make money these fees only magnify losses.

5. Misleading Advertisements

The misleading advertisements of different funds can guide investors down the wrong

path. Some funds may be incorrectly labelled as growth funds, while others are

classified as small -cap or income. The SEC requires funds to have at least 80% of

assets in the particular type of investment implied in their names. The remaining assetsare under the discretion solely of the fund manager.

The different categories that qualify for the required 80% of the assets, however, may be

vague and wide-ranging. A fund can therefore manipulate prospective investors by using

names that are attractive and misleading. Instead of labeling itself a small cap, a fund

may be sold

under the heading growth fund.

6. Evaluating Funds

Another disadvantage of mutual funds is the difficulty they pose for investors interested in

researching and evaluating the different funds. Unlike stocks, mutual funds do not offer

investors the opportunity to compare the P/E ratio, sales growth, earnings per share, etc. A

mutual fund's net asset value gives investors the total value of the fund's portfolio less liabilities,

but how do you know if one fund is better than another?

Furthermore, advertisements, rankings and ratings issued by fund companies only describe

past performance. Always note that mutual fund descriptions/advertisements always include the

tagline "past results are not indicative of future returns". Be sure not to pick funds only because

they have performed well in the past - yesterday's big winners may be today's big losers.

ConclusionWhen you buy any investment, it's important to understand both the good and bad points. If the

advantages that the investment offers outweigh its disadvantages, it's quite possible that mutual

funds are something to consider. Whether you decide in favour or against mutual funds, the

probability of a successful portfolio increases dramatically when you do your homework.


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3.7 Mutual Funds: Picking A Mutual Fund

Buying and Selling

You can buy some mutual funds (no-load) by contacting the fund companies directly. Other

funds are sold through brokers, banks, financial planners, or insurance agents. If you buythrough a third party there is a good chance they'll hit you with a sales charge (load).

That being said, more and more funds can be purchased through no-transaction fee programs

that offer funds of many companies. Sometimes referred to as a "fund super market," this

service lets you consolidate your holdings and record keeping, and it still allows you to buy

funds without sales charges from many different companies. Popular examples are Schwab's

OneSource, Vanguard's Fund Access, and Fidelity's Funds Network. Many large brokerages

have similar offerings.

Selling a fund is as easy as purchasing one. All mutual funds will redeem (buy back) yourshares on any business day. In the United States, companies must send you the payment

within seven days.

The Value of Your Fund

Net asset value (NAV), which is a fund's assets minus liabilities, is the value of a mutual fund.

NAV per share is the value of one share in the mutual fund, and it is the number that is quoted

in newspapers. You can basically just think of NAV per share as the price of a mutual fund. It

fluctuate everyday as fund holdings and shares outstanding change.

When you buy shares, you pay the current NAV per share plus any sales front-end load. When

you sell your shares, the fund will pay you NAV less any back-end load.


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IPO Basics: Introduction

The term initial public offering (IPO) slipped into everyday speech during the tech bull market of

the late 1990s. Back then, it seemed you couldn't go a day without hearing about a dozen new

dotcom millionaires in Silicon Valley who were cashing in on their latest IPO. The phenomenon

spawned the term siliconaire, which described the dotcom entrepreneurs in their early 20s and

30s who suddenly found themselves living large on the proceeds from their internet companies'

IPOs.

So, what is an IPO anyway? How did everybody get so rich so fast? And, most importantly, is it possible for mere mortals like us to get in on an IPO?

All these questions and more will be answered in this tutorial.

Tracking stocks appear when a large company spins off one of its divisions into a separate

entity. The rationale behind the creation of tracking stocks is that individual divisions of a

company will be worth more separately than as part of the company as a whole.

From the company's perspective, there are many advantages to issuing a tracking stock. The

company gets to retain control over the subsidiary but all revenues and expenses of the division

are separated from the parent company's financial statements and attributed to the tracking

stock. This is often done to separate a high-growth division with large losses from the financial

statements of the parent company. Most importantly, if the tracking stock rockets up, the parent

company can make acquisitions with the subsidiary's stock instead of cash.

While a tracking stock may be spun off in an IPO, it's not the same as the IPO of a private

company going public. This is because tracking stocks usually have no voting rights, and often

there is no separate board of directors looking after the rights of the tracking stock. It's like

you're a second-class shareholder! This doesn't mean that a tracking stock can't be a good

investment. Just keep in mind that a tracking stock isn't a normal IPO.

Why Go Public?

Going public raises cash, and usually a lot of it. Being publicly traded also opens many

financial doors:


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Because of the increased scrutiny, public companies can usually get better rates

when they issue debt. As long as there is market demand, a public company can always issue more stock.

Thus, mergers and acquisitions are easier to do because stock can be issued as part

of the deal.

Trading in the open markets means liquidity. This makes it possible to implement things like

employee stock ownership plans , which help to attract top talent.

Being on a major stock exchange carries a considerable amount of prestige. In the past, only

private companies with strong fundamentals could qualify for an IPO and it wasn't easy to get

listed.

The internet boom changed all this. Firms no longer needed strong financials and a solid history

to go public. Instead, IPOs were done by smaller start ups seeking to expand their businesses.

There's nothing wrong with wanting to expand, but most of these firms had never made a profit

and didn't plan on being profitable any time soon. Founded on venture capital funding, they

spent like Texans trying to generate enough excitement to make it to the market before burning

through all their cash. In cases like this, companies might be suspected of doing an IPO just to

make the founders rich. This is known as an exit strategy, implying that there's no desire to stick

around and create value for shareholders. The IPO then becomes the end of the road rather

than the beginning.

How can this happen? Remember: an IPO is just selling stock. It's all about the sales job. If you

can convince people to buy stock in your company, you can raise a lot of money.

Why Do Companies Offer IPOs?In general, companies offer IPOs in order to raise money that they need for business expansion

and new business opportunities. By offering shares to investors, a company stands to bring in alot of money. They can then use this money to grow their business. The more their business

grows, in turn, the higher the share prices grow and the more money is generated by investors

purchasing shares. Unlike business loans, which need to be repaid with interest, IPOs do not

have this disadvantage. It is investors who take the risk -- although also a potential gain --

buying shares. If the company loses money and they will not have to repay their investors,

although investors in general demand high accountability from a company they are buying

stocks from.

Many companies simply see offering IPOs as the next stage in business growth. Since public


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companies often enjoy larger profits and can draw on a larger capital base than private

businesses, IPOs seem like the logical way to grow a company for many CEOs.

Who Can Join the IPO Program?

Public investors can purchase IPOs through their regular investment channels, although theywill need to act fast to take advantage of the initial low IPO costs. Businesses can take

advantage of IPOs simply by offering public shares on the market. To do this, they require a

corporate lawyer, transparent business and financial practices, and an investment banker. They

also need a medium -- usually a stock exchange -- to actually sell the shares. Most businesses

additionally hire marketers or someone who can advertise or market the stock.

What are the Benefits of IPOs?For businesses, stocks and shares are a fast way to raise revenue for business expansion and

growth. They also can take a business to the next level. By becoming a publicly traded

company a business can take advantage of new, larger opportunities and can start working

towards incorporation and even worldwide expansion. IPO gives a company fast access to

public capital. Even though public offering can be costly and time consuming, the tradeoffs are

very appealing to companies. IPOs are also a relatively low risk for businesses and have the

potential for huge gains and for huge opportunities. The more investors wish to invest in a

company, the more the company stands to or from IPOs and other stock offerings.

For the investor, IPOs are attractive mainly because they may be undervalued. Initially, to make

IPOs more attractive, many companies will offer their initial public offering at a low rate. This

helps to encourage investors, and investors will often buy IPOs, thinking that the new company

or the newly public company will be the next big thing with a huge profit margin. As prices grow

and demand for the IPOs grows, early investors stand to make a lot of profit -- and very quickly.

If you hope to invest in companies, understanding the answer to the question what is an IPO? is

essential to your success. An initial public offering, the first time a company offers shares to the

general public, is a great way to start building profit. Since IPOs are in some cases undervalued

they can often be sold with it a short period for good profit

How to make an IPO?

To make an IPO, a company has to file a prospectus with the Securities and Exchange Board

of India (SEBI) stating the purpose of raising the money and disclosing other details of the


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company and its directors.

Once it is approved by SEBI, the company files the prospectus with the registrar of the company

to initiate the process of IPO. According to SEBI norms, a minimum of 30% of any IPO is

reserved for retail investors those who are applying for shares worth less than Rs 1,00,000.

The shares are allotted on a pro-rata basis among applicants. That means, if the retail investor

portion of the IPO is oversubscribed by two times, every applicant will get half of the number of

shares he applied for.

For large investors, whose application size is more than Rs 1,00,000 each, there is a minimum

reservation of 10%. In this category too, shares are allotted on a pro-rata basis.

How is the offer price fixed?

The offer price for shares in a public offer can be fixed before the issue. It can also be

discovered through gauging the demand in the market for shares at various price points. Thesecond method is called the book-building route.

In this, the issue manager fixes a price-band rather than a single price for the IPO and asks

investors to bid for shares in that price range.

The price band is fixed on the basis of the fundamentals of the company, the performance of

share prices of other companies in the same sector on bourses and market survey conducted

by issue managers.

IPO Basics: Getting In On an IPO

The Underwriting Process

Getting a piece of a hot IPO is very difficult, if not impossible. To understand why, we need to

know how an IPO is done, a process known as underwriting.

When a company wants to go public, the first thing it does is hire an investment bank. A

company could theoretically sell its shares on its own, but realistically, an investment bank is

required - it's just the way Wall Street works. Underwriting is the process of raising money by

either debt or equity (in this case we are referring to equity). You can think of underwriters as

middlemen between companies and the investing public. The biggest underwriters are Goldman

Sachs, Merrill Lynch, Credit Suisse First Boston, Lehman Brothers and Morgan Stanley.

The company and the investment bank will first meet to negotiate the deal. Items usually


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discussed include the amount of money a company will raise, the type of securities to be issued

and all the details in the underwriting agreement. The deal can be structured in a variety of

ways. For example, in a firm commitment, the underwriter guarantees that a certain amount will

be raised by buying the entire offer and then reselling to the public. In a best efforts agreement,

however, the underwriter sells securities for the company but doesn't guarantee the amount

rose. Also, investment banks are hesitant to shoulder all the risk of an offering. Instead, they

form a syndicate of underwriters. One underwriter leads the syndicate and the others sell a part

of the issue.

Once all sides agree to a deal, the investment bank puts together a registration statement to be

filed with the SEBI. This document contains information about the offering as well as company

info such as financial statements, management background, any legal problems, where the

money is to be used and insider holdings. The SEBI then requires a cooling off period, in which

they investigate and make sure all material information has been disclosed. Once the SEBI

approves the offering, a date (the effective date) is set when the stock will be offered to the

public.

During the cooling off period the underwriter puts together what is known as the red herring.

This is an initial prospectus containing all the information about the company except for the offerprice and the effective date, which aren't known at that time. With the red herring in hand, the

underwriter and company attempt to hype and build up interest for the issue. They go on a road

show - also known as the "dog and pony show" - where the big institutional investors are

courted.

As the effective date approaches, the underwriter and company sit down and decide on the

price. This isn't an easy decision: it depends on the company, the success of the road show

and, most importantly, current market conditions. Of course, it's in both parties' interest to get asmuch as possible.

Finally, the securities are sold on the stock market and the money is collected from investors.


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5.1 INTRODUCTION OF THE COMPANY

STATE BANK OF INDIA : - State Bank of India (SBI) (LSE:SBID) is government-owned and is

the largest bank in India. If one measures by the number of branch offices, SBI is the second

largest bank in the world. It traces its ancestry back to the Bank of Calcutta, which was

established in 1806; this makes SBI the oldest commercial bank in the Indian subcontinent. SBI

provides various domestic, international and NRI products and services, through its vast

network in India and overseas. With an asset base of $126 billion and its reach, it is a regional

banking behemoth.

In recent years the bank has focused on three priorities, first, reducing its huge staff through

Golden handshake schemes known as the Voluntary Retirement Scheme, which saw many of

its best and brightest defect to the private sector, second, computerizing its operations and

third, trying to change the attitude of its largely rude staff through a programme aptly named

'Parivartan' or 'change'. On the whole, the Bank has been successful in the first two initiatives

but has failed in the third.

ICICI BANK :- ICICI Bank (BSE: ICICI) (formerly Industrial Credit and Investment Corporation

of India) is India's largest private sector bank in market capitalization and second largest overall

in terms of assets. ICICI Bank has total assets of about USD 79 Billion (end-Mar 2007), a

network of over 950 branches and offices, about 3600 ATMs, and 24 million customers (as of

end July 2007). ICICI Bank offers a wide range of banking products and financial services to

corporate and retail customers through a variety of delivery channels and through its specialised

subsidiaries and affiliates in the areas of investment banking, life and non-life insurance,

venture capital and asset management. ICICI Bank's equity shares are listed in India on stock

exchanges at Kolkata and Vadodara, the Stock Exchange, Mumbai and the National Stock

Exchange of India Limited and its ADRs are listed on the New York Stock Exchange (NYSE).

KOTAK MAHINDRA BANK:- Established in 1985, The Kotak Mahindra group has long been

one of India's most reputed financial organizations, offering complete financial solutions. From

commercial banking, to stock broking, to mutual funds, to life insurance, to investment banking,

the group caters to the financial needs of individuals and corporate. It was previously known as

the Kotak Mahindra Finance Limited, a non-banking financial organization. In February 2003,

Kotak Mahindra Finance Ltd, the group's flagship company was given the license to carry on

banking business by the Reserve Bank of India (RBI). Kotak Mahindra Finance Ltd. is the first

company in the Indian banking history to convert to a bank.


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The bank is headed by Mr. K.M. Gherda as Chairman and Mr. Uday Kotak as Executive Vice

Chairman & Managing Director. Dr. Shankar Acharya is the chairman of board of Directors in

the company

The Bank has its registered office at Nariman Bhavan, Nariman Point , Mumbai

5.2 INTRODUCTION OF FUND SCHEME

EQUITY DIVERSIFY

These funds diversify their portfolio evenly across stocks and industry sectors. The returns

from them tend to be moderately high over a long-term horizon but since the prices of equity

shares fluctuate on the stock markets, the net asset value is subject to these fluctuations. These

funds suit investors who have moderate risk appetite. In a diversified fund, the risk of down-side

is mitigated by the breadth of variety of stocks in the portfolio.. Since the portfolio is diversified,

the under-performance in some stocks or sectors in which the fund has invested is balanced by

the superior performance of other stocks or sectors.

SBI MUTUAL FUND SCHEME:-

Mutual Fund SBI Mutual Fund

Scheme Name Magnum Equity Fund - Dividend

Objective of Scheme

an open ended equity scheme, the objective of the scheme is to

provide the investor long-term capital appreciation by investing in

high growth companies along with the liquidity of an open-ended

scheme through investments primarily in equities and the balance

in debt and money market instruments.

Scheme Type Open Ended

Scheme Category Growth

Launch Date 29-Oct-1993

Minimum Subscription

Amount 1000


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Entry Load (From Date: Sep 01, 2007)

Investment Amount (Rs.) Entry Load

(%)

From To 0.00 49,999,999.00 2.25%

50,000,000.00 0.00 0.00%

Exit Load (From Date: Sep 01, 2007)

No. of

days ofInvestment

Investment Amount

(Rs.)

Exit

Load(%)

From To From To

0 6 0.00 49,999,999.00 1.00%

0 0 50,000,000.00 0.00 0.00%

ICICI PRUDENTIAL FUND:-

Mutual Fund ICICI Prudential Mutual Fund

Scheme Name Pru ICICI Growth Fund- Dividend

Objective of Scheme


provide the investor long-term capital appreciation by investing inhigh growth companies along with the liquidity of an open-ended





Launch Date Jun 04, 1998


Amount 1000


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Entry Load (From Date: Mar 03, 2008)

Investment Amount (Rs.) Entry Load(%)

From To

0.00 49,999,999.00 0.00% 0.00 49,999,999.00 0.00% 0.00 49,999,999.00 0.00% 50,000,000.00 0.00 0.00%

KOTAK MAHINDRA BANK:-

Mutual Fund Kotak Manhindra Mutual Fund

Scheme Name Kotak 30 - Dividend

Objective of Scheme


provide the investor long-term capital appreciation by investing in

high growth companies along with the liquidity of an open-ended





Launch Date Dec 11, 1998


Amount 1000

Entry Load (From Date: Apr 01, 2007)

Investment Amount (Rs.) Entry Load(%)

From To

0.00 0.00 2.25%

Exit Load (From Date: Apr 01, 2007)

No. of days ofInvestment

Investment Amount(Rs.)

ExitLoad(%)

From To From To

0 0 0.00 0.00 0.00%


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4.3 DATA ANAYLSIS

As per this Analysis and finding the all scheme and their IPO in the same period and

their calculation is:

MUTUAL FUND SCHEME (ICICI GROWTH FUND (G))

YEAR

AVERAGE RETURN STANDARD DEVIATION COFFICIENT OFVARIENCE

IQTR

IIQTR

IIIQTR

IVQTR

IQTR

IIQTR

IIIQTR

IVQTR

IQTR

IIQTR

IIIQTR

IVQTR

2005

2006

2007

ICICI GROWTH FUND (G)


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MUTUAL FUND SCHEME(ICICI GROWTH FUND (D))YEA

R

AVERAGE RETURN STANDARD DEVIATION COFFICIENT OF

VARIENCEIQTR

IIQTR

IIIQTR

IVQTR

IQTR

IIQTR

IIIQTR

IVQTR

I QTR IIQTR

IIIQTR

IVQTR

2005

2006

2007

! "# $ %&! "# $ %&! "# $ %&! "# $ %&

Average return of ICICI GROWTH FUND (D) is inconsistence and their variance


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''''YEAR


IQT

R

IIQT

R

IIIQTR

IVQTR

IQT

R

IIQTR

IIIQTR

IVQTR

IQTR

IIQTR

IIIQTR

IVQTR

2005

2006

2007

IPO OF ICICI BANK


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SBI MANGUM GLOBAL FUND (G)YEAR


I

QTR

II

QTR

III

QTR

IV

QTR

I

QTR

II

QTR

III

QTR

IV

QTR

I QTR II

QTR

III

QTR

IV

QTR

2005

2006

2007

SBI MANGUM GLOBAL FUND (G)


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((((YEAR


IQT

R

IIQT

R

IIIQTR

IVQTR

IQT

R

IIQTR

IIIQTR

IVQTR

IQTR

IIQTR

IIIQTR

IVQTR

2005

2006

2007

SBI MANGUM EQUITY FUND (D)


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YEAR


IQTR

IIQTR

IIIQTR IVQTR IQTR

IIQTR IIIQTR IVQTR IQTR IIQTR IIIQTR IVQTR

2005

2006

2007

IPO OF SBI


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KOTAK 30 (D)YEAR

AVERAGE RETURN STANDARD DEVIATION COFFICIENT OF VARIENCE

IQT

R

IIQT

R

IIIQTR

IVQTR

IQT

R

IIQTR

IIIQTR

IVQTR

IQTR

IIQTR

IIIQTR

IVQTR

2005

2006

2007

'%" ) *'%" ) *'%" ) *'%" ) *


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' '' '' '' ' ****

YEAR AVERAGE RETURN STANDARD DEVIATION COFFICIENT OFVARIENCE

IQTR

IIQTR

IIIQTR

IVQTR

IQTR

IIQTR

IIIQTR

IVQTR

I QTR IIQTR

IIIQTR

IVQTR

2005

2006

2007

'%" )'%" )'%" )'%" ) **** !!!!

INTERPRETATION:-Average return of KOTAK 30 (G) in 2005 is good and after that in 2006 was low but in 2007average NAV was higher than 2006.


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' ' '' ' '' ' '' ' 'YEAR


IQTR

IIQTR

IIIQTR

IVQTR

IQTR

IIQTR

IIIQTR

IVQTR

IQTR

IIQTR

IIIQTR

IVQTR

2005

2006

2007

'%" ) + $) ,-%'%" ) + $) ,-%'%" ) + $) ,-%'%" ) + $) ,-%

! " # #$ " !% & ! ' &

# $ !" ( # ! " #!# In 2006 the average return of the KOTAK 30 (D) increased respectively in quartly andafter that in 2007 was good all the over the year.


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... .

,$/,$!0,$/,$!0,$/,$!0,$/,$!0


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As per this Analysis all the Mutual funds scheme and their IPO in the sameperiod and their calculation is:

i) Average Returnii) Standard Deviationiii) Coefficient of Variance

After the study of the Banking sector such as State bank of India, Kotak Mahindra Bankand ICICI Bank as well as their IPO in the last three year from 2005 to 2007 in the sameperiod through statistical tools and in this project found that:-

Mutual fund scheme is ICICI growth fund (D) & ICICI growth fund(G)of average return is increase in respectively in year whereas their

coefficient of standard deviation high and low in a respectively year.

If the variance is more in a particular year that means the fund

scheme is inconsistent and fluctuation is more.

In the case of SBI mutual fund scheme and the IPO such as SBIglobal fund (G) is more return than SBI equity fund (G). The main

thing is noticed that the coefficient of standard deviation is less

varied in the respectively year thats by the return of Global fund

(G) is more than Global equity fund (G). Whereas as for as their

IPO is decreased in respectively year.

Average return of KOTAK 30 (G) in 2005 is good and after that in2006 was low but in 2007 average NAV was higher than 2006.Whereas the concern about the IPO of Kotak is more over theperiod.

In the all case we found that growth fund scheme of any class is asgood as all other scheme dividend scheme.

IPO of Kotak is more consistent over the period than SBI and ICICI.


52/65

BIBLOGRAPHI AMFI Text book Mutual fund book

WEBSITE: www.indiainfoline.com www.nseindia.com www.mutualfundsindia.com www.usectrade.com


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1111 2222


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ANAXURE:

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55/65

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57/65

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58/65

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59/65

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60/65

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61/65

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62/65

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64/65

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VARIOUS MUTUAL FUND SCHEME

Snapshot of Mutual Fund Schemes Mutual Fund

Type Objective RiskInvestment

Portfolio Who should invest Investment horizon

Money

Market

Liquidity +Moderate Income

+ Reservation ofCapital

Negligible

Treasury Bills,Certificate of

Deposits,

CommercialPapers, CallMoney

Those who parktheir funds in current

accounts or short-term bank deposits

2 days - 3 weeks

Short-termFunds

(Floating -short-term)

Liquidity +Moderate Income

Little InterestRate

Call Money,Commercial

Papers,Treasury Bills,

CDs, Short-termGovernment

securities.

Those with surplusshort-term funds

3 weeks -3 months

Bond Funds

(Floating -

Long-term)

Regular IncomeCredit Risk &Interest Rate

Risk

PredominantlyDebentures,Government

securities,Corporate Bonds

Salaried &conservative

investorsMore than 9 - 12 months

Gilt Funds Security &IncomeInterest Rate

RiskGovernment

securities

Salaried &conservative

investors12 months & more

EquityFunds

Long-term CapitalAppreciation High Risk Stocks

Aggressiveinvestors with long

term out look.3 years plus

Index Funds

To generatereturns that arecommensuratewith returns of

respective indices

NAV varieswith index

performance

Portfolio indiceslike BSE, NIFTY

etc

Aggressiveinvestors. 3 years plus

BalancedFunds

Growth & RegularIncome

Capital MarketRisk and

Interest RateRisk

Balanced ratio of

equity and debtfunds to ensureigher returns at

lower risk

Moderate &Aggressive 2 years plus

InvestmentObjecti e

Investmenthori on

Ideal Instruments

Return Generated Form MF and Its IPO

Documents

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