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ANALYSIS OF INDIAN MUTUAL FUND

INDUSTRY

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ACKNOWLEDGEMENT

The ideal way to commence documenting this project would be to extend myprofound gratitude to everyone who encouraged me and guided me throughoutthis project.

I wish to extend my sincere gratitude to Dr. Nitin Chaturvedi for providing mewith all the facilities to carry on this research work efficiently

I owe my gratitude to my family and friends for their encouragement and co-operation from the start of the project unto the end.

Thanking you,

Subhashini Sharma

MBA 4th sem

Roll NO.0811570048

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DECLARATION

I here by declare that the dissertation entitled FINANCIAL SECTOR

REFORMS ININDIA submitted in the fulfillment for the requirement of the

master of business administration from ADVANCE INSTITUTE OF

MANAGEMENT GHAZIABAD is my original work and not submitted for

the award of any other degree /diploma /fellowship or other similar title or

prizes..

S UBHASHINI SHARMA

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EXECUTIVE SUMMARY

Investment Advisory is one of the growing and respected fields. It is quite vastin scope as there are a lot of investment avenues available in the present worldlike Equities, Derivatives, Insurance, Real Estate, Bank Deposits, and MutualFunds etc and in each segment there are again a lot of options to investment.For example, taking equities, there are as many as 500+ stocks available inBSE and NSE. There are many-reputed AMC which are handling the

investments of public successfully. This field requires an in depth knowledgeabout market, dynamism, economy related parameters etc. Through thistraining; I tried to build my knowledge base, so that I can perform well whenactually on the job of investment advising.

In this report, I will first give the overview of Indian Mutual fund Industry.Now, investors are more cautious before investing their money into any mutualfund scheme as they fear losses. I was given portfolio of various clients ofIL&FS INVESTSMART LIMITED, which clearly depicted that all theschemes were going into losses. We had to recommend them better schemes onthe basis of various parameters.

Also, I have done scheme comparison of top mutual funds in each fund class toknow the best options available to investors and used analytical tools tomeasure risk in a portfolio.

Other than that the real servings come when one moves ahead. Apart fromsecondary data analysis, I have done primary data analysis: i.e. Study ofinvestment pattern of general public among mutual funds and the conclusionsays that most of the people are unaware of mutual funds, their types etc. Alsoduring the survey, I came to know that general public is optimistic that marketcondition will improve soon and they also thought that this is the right time toinvest as prices are at all time lows.

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TABLE OF CONTENTS

Acknowledgment

Executive summary

Title Page no.

COMPANY PROFILE 11

OVERVIEW OF INDIAN MUTUAL FUND INDUSTRY

a. INTRODUCTION 15

b. MUTUAL FUNDS SHARE IN GROSS SAVINGS 15

c. MUTUAL FUND TYPE WISE AUM SHARE 17

d. AUM SIZE IN 2009 17

e. FUTURE OF MUTUAL FUNDS IN INDIA 17CONSUMER PERCEPTION TOWARDS MUTUAL FUNDS

. a. RESEARCHMETHODOLOGY 19

b..RESEARCH DESIGN 19

c. DATA COLLECTION METHOD 20

d. SAMPLING 20

e. ANALYSING OF SURVEY 21

PORTFOLIO ANALYSIS OF MAHINDRA FINANCECLIENTS..30

ANALYTICAL TOOLS FOR EVALUATING RISK

a. SELECTION OFAPPROPRIATECOMPANY....45

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b .GRAPHICAL REPRESENTATION

c. PORTFOLIO SELECTION

PORTFOLIO MANAGEMENT SERVICES

ANALYSIS OF TOP 15 MUTUAL FUND SCHEMES

COMPARISION BETWEEN MUTUAL FUND SCHEMES

COMPARITIVE ANALYSIS BETWEEN MUTUAL FUND, FIXEDDEPOSIT, GOVERNMENT SECURITIES

IMPLICATION OF GLOBAL CRISIS ON MUTUAL FUND

INDUSTRY RECENT DEVELOPMENTS IN INDUSTRYFINDINGS LIMITATION& CONCLUSION

ANNEXURE

REFRENCES

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LIST OF TABLES AND FIGURES

Tables:

S.No. Topic Page No.

1. Proportion of grosshousehold savings infinancial assets

15

2. AUM size in 2009 17

3. No. of people invest 21

4. Why people do not invest? 22

5. Awareness regardingmutual fund

23

6. Basic Purpose of investment 24

7. Preferred time horizon for investment

25

8. Help of professional beforeinvesting

26

9. Purpose of investing in

mutual fund

27

10. Most preferred options 28

11. Portfolio of variousinvestors

31

12. Daily closing price of SBIstock

44

13. Daily closing price of PNBstock

44

14. Top 15 mutual funds inIndia

55

15. Comparision of investmentproducts: ByNature ofInvestment and performance

78-79

Figures:

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S.No. Topic Page No.

1. Mutual fund type wiseAUM share

16

2. No. of people invest 21

3. Why people do notinvest?

22

4. Awareness regardingmutual fund

23

5. Basic Purpose of

investment

24

6. Preferred time horizonfor investment

25

7. Help of professionalbefore investing

26

8. Purpose of investing inmutual fund

27

9. Most preferred options 28

10 Line chart for dailyclosing price of SBIstock

46

11 Line chart for dailyclosing price of PNBstock

47

12. AMCs leaders in IndianPMS market

51

13. Mutual fund & other investment productsrisk/return profile

80

14. AUM as % of GDP 82

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COMPANY PROFILE

IL&FS INVESTSMART LIMITED

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Infrastructure Leasing & Financial Services Limited (IL&FS) is one of India'sleading infrastructure development and finance companies.

The Central Bank of India (CBI), Housing Development Finance CorporationLimited (HDFC) and Unit Trust of India (UTI) promoted IL&FS. Over theyears, IL&FS has broad-based its shareholding and inducted Institutionalshareholders including State Bank of India, Life Insurance Corporation ofIndia, ORIX Corporation - Japan and Abu Dhabi Investment Authority.

IL&FS has a distinct mandate - catalyzing the development of infrastructure inthe country. The organization has focused on the commercialization anddevelopment of infrastructure projects and creation of value added financialservices.

From concept to execution, IL&FS houses the expertise to provide thecomplete array of services necessary for successful project completion:visioning, documentation, development, finance, management, technology andexecution.

SECTORS: -

Organizationally, the IL&FS Group has evolved along routes perfectlyconfigured to business requirements. Technical support and service groups

provide specialized expertise. Project development and sectoral companieshouse the ability to seed initiatives and carry them through to completion.Strong core skills - key to successful project development and project financingacross sectors - have been developed within the Group. These have aidedIL&FS in spreading its expertise across a variety of sectors, nationwide

Transportation

Area Development

Cluster Development

Finance

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Power

Ports

Water and Waste Water

Urban Infrastructure

Environment

Education

Tourism

IL&FS Investsmart Limited (IIL) was the group company of IL&FS, whichis now taken over (93.86% stake) by The HSBC bank (The Hong Kong andShanghai Banking Corporation Ltd).

IL&FS Investsmart limited is one of Indias leading financial servicesorganizations providing individuals and corporate with customized financialmanagement solutions.

At IIL, believe in "Realizing your goals together". One will find - a trustedinvestment partner to help and work towards achieving their financial goals.Their institutional expertise, combined with a thorough understanding of thefinancial markets results in appropriate investment solutions for investors.

Their strong team of Relationship Managers, Customer Service Executives,Advisory Managers and Research Analysts, offers efficient execution backed

by in-depth research, knowledge and expertise to customers across the country.

With a pan-India presence of over 300 offices, IIL is geared to meet allinvestment needs through a office near at everyone.

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VISION: - To become the preferred long-term financial partner to a wide baseof customers whilst optimizing stakeholders value.

MISION: - To establish a base of 1 million satisfied customers by 2010.Wewill create this by being a responsible and trustworthy partner.

PRODUCT PORTFOLIO: -

At IL&FS INVESTSMART LIMITED they have a wide range of products andservices, with something to suit everyones needs. Company also has a group

of experts providing investment advice, surveying available market productsand choosing the most suitable for customers needs.

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Mutual Funds

In India, mutual fund industry started late as compared to other parts of world

like U.S.A and Europe. Starting with UTI in 1964, there has been the entry of

other public sector companies since 1993 following the financial crisis.

After the emergence of private players in this field, mutual fund industry in

India has seen the growth rate of 18 per cent by the year end 2008 with total

assets under management (AUM) of Rs 5.1 trillion. Income and growth

schemes made up for majority of Assets Under Management (AUM) in the

country. At about 84 per cent (as on March 31, 2008), private sector Asset

Management Companies account for majority of mutual fund sales in India.

Table 1: Proportion of gross household savings in financial assets

Per cent2001-

02

2002-

03

2003

-04

2004-

05

2005

-06

2006

-07

2007

-08

2008

-09

Cash 6.3 9.7 8.9 10.5 8.5 8.7 8.6 10.9

Deposits 41 39.4 40.9 41.6 37.2 47.1 55.3 54.0

Mutual funds 1.3 1.8 1.3 1.2 0.4 3.6 5.2 7.4

Claims ongovernment

15.7 17.9 17.4 20.2 24.5 14.65.3 (3.5)

Insurance 13.6 14.2 16.1 13.5 15.7 14 14.9 16.8

Provident andpension funds

19.3 16.1 15 14.1 13 10.59.2 7.8

Other shares anddebentures

2.8 0.9 0.4 (1.1) 0.7 1.51.5 6.6

Total 100 100 100 100 100 100 100 100

Source: RBI

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In India, the penetration of mutual funds per household is very low. As

seen from the table, only a small proportion of Indian households savings gets

channelized into financial instruments. For instance in the year 2004-2005,

only 12 per cent of the total savings was in the financial instruments out of

which only 0.4 per cent was invested in mutual funds. The savings in the form

of mutual funds in the year 2006-2007 of 5.2 per cent is still very low. But this

indicates the huge potential for increase in penetration and growth over long

term. Another trend, which can be seen from this table is that, every year out of

gross household savings in financial assets proportion of Mutual Funds haveincreased. From 1.3% in the year 2000-01 to 7.4% in 2007-2008 investments in

mutual funds have seen an increasing trend. Deposits are still the most

preferred investment option.

Figure 1:

Mutual fund type wise AUM share Number of schemes

0%

20%

40%

60%

80%

100%

2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

Income Equity Balanced Liquid Others

0

200

400

600

800

1000

2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

Income Equity Balanced Liquid Others

Source: AMFI

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During 2001-02 and 2007-08, equity and liquid mutual funds have witnessed a

compounded growth of around 49 per cent. The overall AUM has also shown

strong growth of around 30 per cent during the said period. This can be

explained by the increase in equity index as well as the higher penetration of

mutual funds due to aggressive strategies by the Indian private players. Further,

income funds grew at a CAGR of 25 per cent during 2001-02 and 2007-08.

The contribution of income and equity funds has undergone a change since

2005-06. From 2001-02 and 2005-06, due to the decreasing interest rate

scenario, the share of income funds was witnessing a downward trend.

However, since 2005-06, with the northward movement of interest rates,

income funds have grown at a CAGR of 91 per cent. The increase in the

contribution of income funds in the overall AUM has also been due to

increasing cash surplus with the business houses owing to good corporate

performance. On the contrary, equity funds have shown a comparatively slowergrowth of 30 per cent during 2005-06 and 2007-08.

Table 2: AUM size in 2009

Months AUM

Mar-09 $348.2 billion

Apr-09 $367.5 billion

May-09 $391.3 billion

Future of Mutual Funds in India

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In India it is expected to be very bright. It has been estimated that by March-

end of 2010, the mutual fund industry of India will reach Rs. 40,90,000 crore.

In the next 10 years the annual composite growth rate is expected to rise by

13.4 per cent. Since the last 5 years, the growth rate was recorded as 9 per cent

annually. Based on the current rate of growth, it can be anticipated that the

mutual fund assets will be doubled by 2010. The past developments and the

current trends throw light on the positive potential that mutual funds would

offer to investors.

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RESEARCH METHODOLOGY

RESEARCH METHODOLOGY OBJECTIVES: -

Objectives of my project are:

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To study the Awareness level in general public regarding Mutual funds

through questionnaire analysis.

To find out the purpose of investment.

To study the general investment criteria of people.

To find out time period for which an investor invests

Portfolio analysis of IL&FS Investsmart clients.

To know the worth of mutual funds they are holding at presentcompare to the time they invested on that mutual fund.

Analytical tools for evaluating risk attached to a particular stock in the

market

For the selection of a particular company by calculating coefficient

of variation

Increasing trend of Portfolio Management Services and how it is

beneficial.

Analysis of top 15 mutual funds in India

To know better mutual fund scheme on the basis of different

benchmarks.

Implication of current global crisis on Indian mutual fund industry

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What are the new developments and innovations in the mutual fund

industry?

RESEARCH DESIGN

A research design is the master plan or model for the conduct of formalinvestigation and survey. It is a specification of methods and procedures foracquiring the information needs for solving the problem. It decides the sourceof information and methods for gathering the data. A questionnaire and otherforms are tested to use the collection of data. A sampling design is to beselected. Since research design is simply the framework of plan for a study, it

should be used as a guide in collecting and analyzing the data. It requires aclear specification of the who, what, when, where, why, & the way (the 6 Ws)of the research.

The 6 Ws are:

a) Who: Who should be considered for the research?

All categories of people are considered for research.

b) What: What information should be obtained from the respondent?

What is the awareness level of the respondent regarding mutualfunds?

c) When: When should the information be obtained from the respondent?

First of all direct approach to respondent and if they are busy thentake appointment.

d) Where: Where should the respondents be contacted to obtain the requiredinformation?

-At the business place of the respondent.

- At the residence of the respondent.

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e) Why: Why are we obtaining the information from the respondents?

To know Investment behavior of respondent and check Awareness of

Mutual Fund.

f) Way: In what way we are going to obtain the information from therespondents?

Personal Interview Method/Questionnaire

DATA COLLECTION METHOD

In this research, I have used Primary Data & Secondary Data

Primary Data are the first hand data collected by us by filling thequestionnaire from

the respondents. It is more reliable, fresh and accurate.

Secondary Data are the data collected for some purpose other than the problem at hand. I have collected secondary data from magazines,newspapers, periodicals and Internet. It is less reliable and secured data ascompared to primary data.

SAMPLING

-Sample size-100

-Elements- General Public.

-Sampling Units- Business place/ Markets

-Extent- Delhi, Ghaziabad (Netaji Subhash Place, Pitampura, Rajnagar DistrictCenter)

-Research Instrument-Questionnaire

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RESPONSE RATE

The response rate was average. As we had a questionnaire asking for thefinancial Information of the respondent, most of the people hesitated to providethe required Information. Also the questionnaire contained some financialterms that were technical in nature, which resulted into reduced response rate. Ihave visited nearly 100 potential respondents, out of which only 85 gave

proper response. Hence,

Response Rate =85/100

= 85%

ANALYSIS OF THE STUDY

1) NO. OF PEOPLE INVESTS

This is very important to know that how many people do investments amongall respondents. Some people not in position to do investment because of somereason, like they re-invest in their own unit, working on expansion plans, or

they do not have enough surpluses for investment.

Table 3 : showing how many people Invests:

OPTION NO OF

RESPONDENTS

PERCENTAGE %

INVESTS 60 70.58DONOT INVESTS 25 29.42

TOTAL 85 100

Figure 2: The following chart shows the pictorial view of the above statisticaldata:

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INTERPRETATION Here we can find that, maximum No. of respondents do investments (Approx70%).

The people who do not invest have some reason. Lets see what the reasonsfor what they do not invest are.

2) WHY PEOPLE DO NOT INVEST?

People are not able to make investments because they working on theirexpansion plans, some of them re-invest their surplus in their own unit and

some do not have enough surpluses to make investment. Following table showsthat for what reason people do not invest.

Table 4: showing why people do not invest

REASONS NO OF

RESPONDENTS

PERCENTAGE %

WORKING ON 9 36

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EXPANSION PLANS

REINVEST IN THEIROWN UNIT

9 36

DONOT HAVESURPLUS MONEY

7 28

TOTAL 25 100

Figure 3: The following chart shows the pictorial view of the above statisticaldata:

INTERPRETATION:

From the above figure, we can say that 36% of the respondents are workingon expansion plans.

From the above figure, we can say that 36% of the respondents arereinvesting their surpluses in their own unit.

From the above figure, we can say that 28% of the respondents do not haveenough surplus to make an investment/

3) AWARNESS REGARDING MUTAL FUNDS

One of the main objectives of the survey was to find out the awareness level ofthe people regarding mutual funds and to check whether investors know this

investment option or not.

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Table 5: showing Awareness level regarding Mutual funds:

OPTIONS NO OF

RESPONDENTS

PERCENTAGE%

AWARE OFMUTUAL FUNDS

34 40

NOT AWARE OF 51 60

TOTAL 85 100

Figure 4: The following Bar graph shows the pictorial view of the above

statistical data

INTERPRETATION:

In India, fixed deposits are quite popular among investors. Survey findingsreveal that only 40 per cent respondents are aware of mutual funds as aninvestment option. Based on the surveys findings, the company assigned thetask to increase the awareness level regarding mutual funds among the

prospective investors .I meet various investors and explained the benefits ofinvesting in mutual fund.

4) BASIC PURPOSE OF INVESTMENT

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One of the objectives of survey was to analyze the investment behavior of therespondents. So it is important to know, why people invests. To know thereasons for which an investor invests.

Table 6:

OPTIONS NO OFRESPONDENTS

PERCENTAGE%

TAX SAVING 13 15.29

SAFETY 15 17.65

INCOME 16 18.82

GROWTH 41 48.24

TOTAL 85 100

Figure 5: The following pie chart shows the pictorial view of the above

statistical data:

INTERPRETATION:

Growth in long term is the most important objective of investment according tothe research. However people are concerned about the uncertain future too dueto lackluster performance of Indian capital market in recent times and

investment for safety against such uncertainties is the second most important

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objective of investment. Tax saving, extra money for investment are amongother things for which the investor makes investments.

5) PREFERRED TIME HORIZON FOR INVESTMENT

Different investment options are available for the people who want to invest indifferent time horizons. If any investor wants to invest for a short term andwants his/her investment highly liquid, investing in FDs or closed endedMutual Funds is quite risky.

Table7: showing preferred time horizon for investment:

OPTIONS NO OF

RESPONDENTS

PERCENTAGE%

SHORT TERMINVESTOR

30 35.30

LONG TERMINVESTOR

17 20

MEDIUM TERMINVESTOR

38 44.70

TOTAL 85 100

Figure 6: The following pie chart shows the pictorial view of the abovestatistical data:

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INTERPRETATION:

Most of the respondents i.e. 35.3 per cent stated their preference to invest forless than a year. On the other hand, only 20 per cent respondents showedinterest in investing for more than 5 years. According to UTI MF's Chairman UK Sinha: The mutual funds industry is sitting on a volcano as 75-80 per centof its assets are short-term while it resorts to long-term lending to corporate,creating an asset-liability mismatch.

6) HELP OF PROFESSIONALS BEFORE INVESTING

Investment in Banks, Post office or govt. securities is quite safe but they do notgenerate good returns. Investment in Equities, Derivatives, commodities andreal estate is too risky for those who cannot understand it or have not enoughresources (time and money) to do proper research. There are so many

consultants and professionals who do it for their clients.

Table 8: showing help of professionals taken by investor:

OPTIONS NO OF

RESPONDENTS

PERCENTAGE%

DONOT TAKEPROFESSIONALADVICE

56 65.88

TAKE

PROFESSIONAL

29 35.12

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ADVICE

TOTAL 210 100

Figure 7: The following pie chart shows the pictorial view of the abovestatistical data:

INTERPRETATION:

Only 34.3 per cent of respondents take professional advice while the other 65.8per cent of the respondents believe on their own capabilities. One importantfact was that almost 90 per cent of respondents who are taking professionaladvice were satisfied with their consultant. 25.7 per cent of respondents calltheir friends for help while doing investment. This might be due the fact thatthey considered their consultant as their friends.

7) PURPOSE OF INVESTING IN MUTUAL FUNDS

Respondents were asked to state the main reasons for investing in mutualfunds. In mutual funds, investors portfolio is not only exposed in equities butalso to debt. Here are some options to find the purpose of the investor ininvesting in mutual funds.

Table 9: Table showing purpose of investing in mutual funds:

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OPTIONS NO OF

RESPONDENTS

PERCENTAGE%

PROFESSIONALMANAGEMENT

17 20

REDUCTION INTRANSACTION COST

10 11.76

DIVERSIFICATION 36 42.36

REDUCTION IN RISK 22 25.88

TOTAL 85 100


statistical data:

INTERPRETATION:

Out of the surveyed people 42 per cent of the respondents invested in mutualfunds to get the benefit of diversification. Second choice of the investors is tosafeguard them from the stock market volatility which essentially meansreduction in risk by investing in diversified funds available in the market.Around 25 per cent of the people invested because of reduction in risk.

8) MOST PREFERRED OPTION

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In Growth option, return to the investor is the rate at which his initialinvestments have grown over the period for which he has invested in the fund.In Dividend payout investors receive dividends from the mutual fund as andwhen such dividends are declared in the form of warrants, or are directly

credited to the investors bank accounts. In Dividend re-investment, investorsre-invest the dividends that are declared by the mutual fund, back to into thefund itself, at NAV that is prevalent at the time of re-investment.

Table10: showing most preferred option:

OPTIONS NO OF

RESPONDENTS

PERCENTAGE%

DIVIDENDPAYOUT 12 14.11

DIVIDENDREINVESTMENT

25 29.42

GROWTH 48 56.47

TOTAL 85 100


statistical data:

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INTERPRETATION:

Seeing the current market situation more than 50 per cent of the respondentsprefer growth option. Reasons cited by the prospective investors for this optionis NAV growth. Dividend payout was the least preferred option as only 14 percent respondents preferred it.

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PORTFOLIO

ANALYSISOF

IL&FS INVESTSMART

CLEINTS

Portfolio management:

Everyone in the world always think:

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WE WORK SO HARD TO EARN MONEY

BUT

DOES OUR MONEY WORK JUST AS HARD FOR US

The dilemma of the quote is that does money ever work? Yes, if we do the

financial planning our money works for us in a way, which help us to achieve

desired goals. Financial planning is a process in which we assess where we are

now, what we may need in the future and what we must do to reach our goals.

Table 11: Following are the portfolios of various investors that have been

assigned by the company.

NAME FUNDS IN PORTFOLIO

TARUN GUPTARELIANCE REGULAR SAVINGSFUND(EQUITY)

HARPREETSINGH JM BASIC FUND-GROWTH

ASHOKKHANNA RELIANCE REGULAR SAVINGFUND(GROWTH)

SUNITAUPDHYAY KOTAK OPPORTUNITEIS FUND(GROWTH)

PREETPALSINGH

DWS INVESTMENT OPPORUNITY FUND-DIVIDEND

SANJEEVSOOD

KOTAK OPPORTUNITEIS FUND, RELAINCEDIVERSIFIED POWER SECTOR FUND G

SONIA GUPTA PRINCIPAL TAX SAVINGS FUND

ARJUN MEHTARELIANCE REGULAR SAVINGSFUND(EQUITY)

PAWANKUMAR RELIANCE NATURAL RESOURCE FUND

KULBHUSHAN KOTAK OPPORUNITIES FUND-GROWTH

PARAMETERS ON WHICH FUNDS PERFORMANCE WILL BEEVALUATED

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SHARPE RATIO

COMPARISION OF FUNDS 3 YEAR with BENCHMARK RETURN

COMPARISION OF FUNDS RETURN with top rated funds of same

fund class.

1) TARUN GUPTA

Tarun Gupta has undertaken a SIP Of RELIANCE REGULAR SAVINGFUND-EQUITY-GROWTH started from 26 March 2008. He has taken a .SIPamounting Rs1000.Net assets value of the fund on 26 March was Rs22.3304.Current NAV of fund is Rs11.9796.Till now he has invested Rs11000in the fund having 643 units. Present value of his portfolio stands atRs7709.08.He has suffered a negative return of around 37.62 per cent.

RELIANCE REGULAR SAVING This fundcomes under Equity diversifiedfund class.The scheme aims to generate consistent returns by actively investingin equity or equity related securities. It will invest at least 80 per cent of itsassets in equity and equity related securities. Up to 20 per cent of its assets will

be invested in debt and money market instruments with an average maturity of5 to10 years Launched in the middle of the bull run, this fund has deliveredimpressively. This portfolio of 37 stocks is diversified across sectors what isworth noting is the consistent increase in allocation to cash. From 6.19 per centFebruary 2009, it is moved to 26.56 per cent in June to add new funds in the

portfolio.

FUND (EQUITY)

Going by its Style Analysis fund has invested in growth opportunity in largecapitalization companies. Market Capitalization (%) of Portfolio: LargeCap-52.31%,SmallCap-10.72%, MidCap-36.96%

BENCHMARK=BSE 100 INDEX

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SHARPE RATIO

The Sharpe ratio is used to characterize how well the return of an asset

compensates the investor for the risk taken. When examining theinvestment performance of assets with smoothing of return the Sharpe

ratio should be derived from the performance of the underlying assets

rather than the fund returns. Sharpe ratio is often used to rank the

performance of portfolio. Higher the sharp ratio better it is as the asset

with the higher Sharpe ratio gives more return for the same risk.

SHARPE RATIO %

RELIANCE REGULAR

SAVING FUND

.19

BIRLA SUN LIFEDIVIDEND YEILD FUND

-0.20

DSP BLACK ROCK Top 100

EQUITY FUND

0.12

FUNDS RETURN WITH BENCHMARK RETURN

Return for fund as well as for benchmark has been taken for 3 years

Per cent 2007 2008 2009

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FUNDRETURNS

56.0 93.0 (54.6)

BSE 100INDEX

48.9 37.0 (5.1)

FUND'S RETURN WITH TOP RATED FUND WITH SAME

ASSEST ALLOCATION

These two funds have been chosen for the comparisons as they belong to

same fund class with identical assets allocation of around 70-80 per cent

invested in equity and 10-20 per cent in debt.

.

CONSIDERING ALL PARAMETERS I WOULD SUGGEST Mr. Tarun

Gupta should hold this fund. As comparing its Sharpe ratio and its returnwith other funds and benchmark return it is giving better return to the

investor expect for the year 2008. As already mention this fund has been

launched in the middle of Bull Run, still in this bearish market its return has

not exhausted. MOREOVER this fund is a large & mid cap fund and

considering the current market situation its a safe bet toinvest in large cap

or mid cap fund. So, he should continue his investment in this fund.

NAME 2009 2008 2007

RELIANCEREGULAR SAVINGFUND

(54.6)

93.0 56.0

BIRLA SUN LIFEDIVIDEND YEILDFUND

(44.4)

56.9 10.5

DSP BLACK ROCKTop 100 EQUITYFUND

(45.5)

64.9 46.6

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2.HARPREET SINGH

PORTFOLIO DETAILS DATA

TYPE OF INVESTMENT SIP

FUND NAME JM BASIC FUND

TRANSACTION DATE 17 JUNE 2009

AMOUNT INVESTEDTILL DATE Rs,5000

CURRENT VALUEOF

INVESTMENT Rs. 3018.26CURRENT NAV Rs7.410

NO OF UNITS 407.317

PROFIT & LOSS (1980)

The scheme aims to invest in energy and petrochemical sector. It shall have the

mandate to invest in Oil & Gas, Petrochemicals, Power Generation &Distribution, and Electrical Equipment Supplier. Portfolio consists of 21

Stocks. No entry load but an exit load of 2.25 per cent is levied if redeemed

within 1 year.Net Assets allocation: Equity 87.4%, Debt 0.0%, Others 12.6%.

FUND'S RETURN WITH TOP RATED FUNDS & SHARPE RATIO

BOTH these funds have been taken keeping in mind the assets allocation

within the fund. As it is clearly seen that entire amount of JM BASIC

FUND is invested in equitys or kept as cash. No amount is invested in

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debts. Likewise Tata Life Sciences & Technology Fund and Birla Sun

Life Buy India Fund have not invested in debts.

NAME 2009 2008 2007

SHARPE

RATIO

JM BASICFUND -75.71111.44 43.09 -0.36

BIRLA SUN LIFE BUY INDIA FUND -49.72 38.71 26.53 -0.38

TATALIFESCIENCE&TECHNOLOGY FUND -51.29 17.89 42.92 -0.41

Considering above mentioned parameters investor should not continue

with this fund as it is given a negative return of around 75 per cent highest

among other mentioned funds. Going buy its risk grade it is a risky fund

and its return grade is also low. This fund is basically a small cap and

seeing the volatility in equity markets its not safe to remain investedin small cap companies.

3.ASHOK KHANNA

Ashok Khanna has undertaken a SIP of RELIANCE REGULAR SAVING

FUND-EQUITY-GROWTH started from 5 June 2008.He has taken a .SIP

amounting Rs1000.Net assets value of the fund on 5 June 2008 was

RS21.7579.Current NAV of fund is Rs11.9796.Till now he has invested

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Rs9000 in the fund having 553 units. Present value of his portfolio stands at

Rs6634.66.He has suffered a negative return of around 33.49 per cent.

RELIANCE REGULAR SAVING FUND (EQUITY)

This fundcomes under Equity diversified fund class.The scheme aims to

generate consistent returns by actively investing in equity or equity related

securities. It will invest at least 80 per cent of its assets in equity and equity

related securities.

FUND'S RETURN WITH TOP RATED FUND WITH SAME ASSEST

ALLOCATION & SHARPE RATIO & BENCHMARK PERFORMANCE

NAME 2009 2008 2007

SHARPE

RATIO

RELIANCE REGULARSAVING FUND -54.61 92.98 55.95

0.19

BIRLA SUN LIFE

DIVIDEND YEILD

FUND -44.44 56.87 10.46

0.12

DSPBLACK ROCK Top

100 EQUITY FUND -45.54 64.93 46.6

-0.20

BSE 100 INDEX -5.1 37.0 48.9

CONSIDERING ALL PARAMETERS I WOULD SUGGEST Mr. ASHOK

KHANNA should hold this fund. As comparing its Sharpe ratio and its

return with other funds and benchmark return it is giving better return to the

investor expect for the year 2008. As already mention this fund has been

launched in the middle of Bull Run, still in this bearish market its return has

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not exhausted. MOREOVER this fund is a large & mid cap fund and

considering the current market situation its a safe bet to invest in large cap

or mid cap fund. So, he should continue his investment in this fund.

4.SUNITA UPADYAY


TYPE OF INVESTMENT SIP

FUND NAME

KOTAK

OPPORUNITIESFUND

TRANSACTION DATE 11 JUNE 2009

AMOUNT INVESTEDTILL DATE Rs.7000

CURRENT VALUE OFINVESTMENT Rs. 5393.8

CURRENT NAV Rs20.926

NO OF UNITS 256.756PROFIT & LOSS (1608)

KOTAK OPPORTUNITIES FUND

The scheme aims to invest in a mix of large and mid cap stocks across sectors

based on performance and potential of companies within the sectors.Asset

Allocation: Equity79.5%, Debt8.62%, Others11.87%.

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Fund Class: Equity diversified

BENCHMARK INDEX=S&P CNX 500

FUND NAME

SHARPE

RATIO

(Returns)

2009 2008 2007

KOTAK OPPORUNITIES FUND -0.06 -56.77 91.01 38.7

UTI DIVIDEND YEILD FUND 0.02 -44.44 70.56 20.65

DSPBLACKROPTOP100EQUITYFUND 0.12 -45.54 64.93 46.6

S&P CNX 500 (BENCHMARKINDEX) - -7.7 35 42

Going by the facts investor should not invest further in this fund. Its Sharpe

ratio is the lowest one as compared to other funds. In the year 2009 fund gives

negative return of 57 percent highest as compared to benchmark and other

funds.

5.PREET PAL SINGH


TYPE OF INVESTMENT LUMPSUM PAYMENT

FUND NAME DWSINVESTMENTOPPORTUNITYFUND

TRANSACTION DATE 16 JULY 2009

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NO OF UNITS 237.192

AMOUNT INVESTEDTILL DATE Rs.5000

CURRENT VALUE OF

INVESTMENT Rs. 3391.85CURRENT NAV Rs14.13

LAST DIVIDEND PAID Rs.2.75(FEB-10-2006)

PROFIT & LOSS (1608)

DWS INVESTMENT OPPORTUNITY FUND

The scheme aims to generate capital appreciation on the portfolio over a long

term by actively investing in different asset classes as per market conditions.

Over the past year, the top five holdings accounted for around 23 per cent

while the number of stocks has averaged at 36.BENCHMARK

INDEX=SENSEX.

Asset Class %

EQUITY 77.33

CASH 22.69

DEBT N.A

FUND NAME

SHARPE

RATIO

(Returns)200

9 2008 2007

DWSINVESTMENTOPPORTUNITYFUND (D) 0.11 -54.9 89.2 46.2

BIRLA SUNLIFE DIVIDEND YEILDFUND -0.2 -49.72 38.71 26.53

DSPBLACKROPTOP100EQUITY 0.12 -45.54 64.93 46.6

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FUND

SENSEX- 30.28 35 71

Fund is giving satisfactory returns. SHARPE ratio is at a comfortable level

compared to its other fund. Investor should continue with its holdings.

6.SANJEEV SOOD

Sanjeev Sood has taken a SIP of Rs.1000 of KOTAK OPPORTUNITY FUND

and invested Rs20000 in RELIANCE DIVERSIFIED POWER SECTOR

FUND

PORTFOLIO

TRANS.

DATE

AMTINVEST

ED

CURRENT

VALUE

CURRE

NT NAV

NO

OFUNIT

S

KOTAK OPP.FUND17-06-2009 8000 6195.52 20.926

296.068

RELIANCEDIVERSIFIED POWER SECTORFUND

17-06-2009 20000 18504.35 37.7546

326.022

RELIANCE DIVERSIFIED POWER SECTOR FUND

The primary investment objective of the scheme is to seek to generate

continuous returns by actively investing in equity and equity related or fixed

income securities of power and other associated companies. STYLE

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ANALYSIS (LARGE CAP GROWTH OPTION): LargeCap-57.23%,

MidCap-42.78%, SmallCap-0%.BENCHMARK= INDIA POWER INDEX

Asset Class %EQUITY 45.28

OTHERS 10.49

CASH 44.23

FUND NAME

SHARP

ERATIO (RETURNS)2009 2008 2007

RELIANCE POWERSETOR FUND 0.36 -50.7 122.6 58.8

UTI SERVICESINDUSTRIES FUND (G) -0.4 -59.64 47.65 34.46

UTI ENERGY FUND -0.16 -58.1 46.9 11.3INDIA POWER INDEX - 53.7 -2 -

Investor should change his portfolio. As comparing both the funds with their

respective indexes and funds with same assets allocation it is found that the

funds has performed better but comparing it with its index it is clearly shown

that index is giving positive return and fund is giving negative return.

Regarding other fund Kotak Opp. Fund investor should hold it for some time.

7. SONIA GUPTA


TYPE OF INVESTMENT LUMPSUM PAYMENT

FUND NAME PRINCIPALTAXSAVER

TRANSACTION DATE 20 /6 /2009

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AMOUNT INVESTEDTILL DATE Rs,5000

CURRENT VALUE OFINVESTMENT Rs2176.19

CURRENT NAV Rs37.4NO OF UNITS 58.187

PROFIT/LOSS (2824)

PRINCIPAL TAX SAVER: The fund seeks to build a high quality growth

oriented portfolio to provide long term capital appreciation through investment

primarily in equities STYLE ANALYSIS (LARGE CAP GROWTH

OPTION): LargeCap-69.14%, MidCap-12.85%, SmallCap-16.16%.

BENCHMARK= BSE 2OO INDEX,Fund Class = Equity Tax savings

Asset Class per cent

EQUITY 87.21

DEBT N.ACASH 12.79

FUND NAME

RETURNS

2009 2008 2007

SHARPE

RATIO

PRINCIPAL TAX SAVER -64.8 80.81 43.36 -0.25

FIDELITYTAXADVANTAGE -50.2 57 23.4 -0.14

RELIANCETAXSAVERFUND -52.8 40.9 33.4 -0.32

BSE 200 -6.0 36.4 45.52-

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Every investor invests some amount of his savings for tax benefits. In case of

Sonia Gupta, the fund is given her negative return. On the other hand fund of

same asset allocation has performed better than this fund .Besides this, fund

has not performed better than its benchmark. Sharpe ratio is also on the lower

side. Considering these parameters she should shift her investment to other

above-mentioned fund.

8. ARJUN MEHTA

PORTFOLIO

DETAILS

TYPE OFINVESTMENT SIP

FUND NAMERELIANCEREGULARSAVINGFUND

TRANSACTION DATE 16/6/2009

AMOUNT INVESTED

TILL DATE Rs 9000CURRENT VALUE OFINVESTMENT Rs6801.52


NO OF UNITS 555.253

PROFIT/LOSS (2199)

RELIANCE REGULAR SAVING FUND (EQUITY)

This fund comes under Equity diversified fund class.The scheme aims to

generate consistent returns by actively investing in equity or equity related

securities. It will invest at least 80 per cent of its assets in equity and equity

related securities.

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FUND'S RETURN WITH TOP RATED FUND WITH SAME ASSEST

ALLOCATION & SHARPE RATIO & BENCHMARK PERFORMANCE

NAME 2009 2008 2007

SHARPE

RATIO

RELIANCE REGULARSAVING FUND -54.61 92.98 55.95

0.19

BIRLA SUN LIFE

DIVIDEND YEILD

FUND -44.44 56.87 10.46

0.12

DSPBLACK ROCK Top

100 EQUITY FUND -45.54 64.93 46.6

-0.20

BSE 100 INDEX -5.1 37.0 48.9

CONSIDERING ALL PARAMETERS I WOULD SUGGEST Mr. TARUN

GUPTA should hold this fund.

9. PAWAN KUMAR

PORTFOLIO

DETAILS

TYPE OFINVESTMENT SIP

FUND NAMERELIANCENATURALRESOURCEFUND

TRANSACTION DATE 30-SEP-2009

AMOUNT INVESTED Rs 5000

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TILL DATE

CURRENT VALUE OFINVESTMENT Rs4410.6


NO OF UNITS 776.459PROFIT/LOSS (590)

The primary objective of the scheme is to generate capital appreciation &

provide long-term growth opportunities by investing in companies principally

engaged in the discovery, development, production, or distribution of natural

resource. Fund class: Equity diversified.

Asset Class %

EQUITY 59.78

OVERSEAS 2.89

DEBT 34.11

INTERNATIONAL

EQUITY SHARES3.22

FUND NAME

SHARPE

RATIO (RETURNS)2008RELIANCE NATURALRESOURCE FUND -0.2371 -39.8

BSE 200 INDEX - -6

The AMC IN THE year 2008, seeing its performance for one year it is giving a

negative return of 39 per cent .As the fund has been launched in the bullish

market it will take time to get positive returns from the fund has incepted THIS

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FUND. Moreover fund has also an overseas exposure of around 2.89 per cent

along with international equity shares. Investor should wait at this moment and

stick to the fund.

10.KULBHUSHAN SACHDEVA

PORTFOLIO DETAILS

TYPE OF INVESTMENT LUMPSUM PAYMENTFUND NAME KOTAKOPPOURNITIESFUND

AMOUNT INVESTED TILL DATE Rs 10000

CURRENTVALUEOFINVESTMENT Rs5321.82

CURRENT NAV Rs20.57

NO OF UNITS 258.705

PROFIT/LOSS 4678

FUNDS SHARPE RATIO %

KOTAK OPPOURNITIES

FUND -0.06

UTI DIVIDEND YEILD FUND 0.02DSP BLACKROCK TOP100

EQUITY FUND 0.12FUNDS RETURN WITH BENCHMARK RETURN

Return for fund as well as for benchmark has been taken for 3 years

IN PERCENTAGE 2007 2008 2009

FUNDS RETURNS -56.77 91.01 38.7

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S&P CNX 500 -7.7 35 42FUNDS RETURN WITH TOP RATED FUND WITH SAME ASSEST

ALLOCATION.

FUND NAME 2008 2007 2006

KOTAK OPPOURNITIESUND -56.77 91.01 38.7

UTI DIVIDEND YEILD

UND -44.44 70.56 20.65

DSP BLACKROCK

OP100 EQUITY FUND -45.54 64.93 46.6

Going by the facts investor should not invest further in this fund. Its Sharpe

ratio is the lowest one as compared to other funds. In the year 2008 fund gives

negative return of 57 per cent highest Negative return as compared to

benchmark and other fund.

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ANALYTICAL TOOLS

FOR

EVALUATING RISK

Investment in Stock Market and Portfolio Selection

Table 12: Daily Closing Prices (in Rs) of Stocks for STATE BANK OF

INDIAfrom 25th march, 2009 to 10th dece, 2009

1049.95 1217.90 1217.90 1267.35 1829.55

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Coefficient of variation of closing prices of SBI = 100.

MEAN

DS

Where, S.D is the standard deviation

Standard Deviation =

Mean =

N

x

n

i

i=1 where ix is the thi price

N is the total number of number of observations

x Is the average daily price

Coefficient of variation of closing prices of SBI=

= 19.83

Coefficient of variation of closing prices of PNB =

= 17.15

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It is observed that the coefficient of variation of the daily closing prices of PNBis lower than that of SBI, which implies that the prices of PNB are more stableand consistent than those of SBI. Further since the credibility of a company isdirectly associated with its stock prices, it can be inferred that PNB is more

reliable for investments.

Hence, a rational investor should prefer PNB.

(B) Graphical Representation

The following line charts can be used to represent the stock prices of SBI

and PNB.Line charts can display continuous data over time, set against a commonscale, and are therefore ideal for showing trends over time. The line chartsusually plot the daily closing prices of a share. The belief in the technicalanalysis as an investment decision tool is because of specific patternsemerging out of such plots.

Figure 10: Line chart for daily stock prices of SBI:

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It is observed that the daily stock prices of SBI have fluctuated over theperiod within the range of Rs. 1022.35 and Rs.1906.90It is also evident thatthe mean price of the SBI stock is Rs1427.25

Figure 11: Line chart for daily stock prices of PNB:

It is evident from the above chart that the daily stock prices have variedbetween Rs.398.10 and Rs.689.4. We also observe that the average priceover a span of 50 days is Rs 543.19.

The market price is information by itself and reflects the expectations ofinvestors in the capital market. However we observed that the respective linegraphs of both the companies show almost similar variations over the time

period with a little difference in the average prices. Thus for the complete

analysis and selection of the optimal shares of the appropriate companywould also involve the use of mathematical tools such as coefficient ofvariation which measures the relative variation in terms of standarddeviation and arithmetic mean. From the previous observations it has beencomputed that the variation in the daily stock prices of SBI is less than thatof PNB.

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From the above data it is observed that the coefficient of variation of

portfolio I & II ARE the least, it implies that these are more consistent, more

uniform, more stable and more homogeneous in terms of risk. Thus a

rational investor will tend to select that portfolio that gives the lowest risk.

PORTFOLIO

ARITHMETIC

MEAN

STANDARD

DEVIATION

COEFFICIENTOF

VARIATION

I 360 105.42 0.29

II 426.3 103.56 0.24

III 514.70 382.22 0.74

IV 600 591.22 0.98

V 815 730.56 0.89

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PORTFOLIO MANAGEMENT SERVICES

(A Threat to Mutual Fund Industry)

Over the last few years, the Indian economy has seen strong economic growthof over 8 per cent. As a result of the flourishing economy and the boom acrossall the asset classes, a substantial change is being witnessed in the profile of theIndian population with a larger number of households getting added to thecategory of high net worth households (HNHs). The challenge to wealthmanagers, however, is to match financial advice with changing personalcircumstances based in principle on sound planning, expert advice and goodnavigation skills.

Investors having a high proportion in the traditional asset class should beexplained that the real returns are negative in case of high inflation scenarioand high investment in traditional asset classes. The investor should be madeaware that the amount thus invested is losing its value rather than appreciating.Investor education is the key to the continuing development of the Indianwealth management market. Many wealthy Indian households do not yet havethe necessary financial sophistication or understanding of risk anddiversification. Financial education is therefore, absolutely essential to avoidover concentration in any one asset class.

Wealth management encompasses wide array of services such as portfoliomanagement services (PMS) and advisory function to help invest in derivatives

private equity, structured products, mutual funds, real estate, secondarymarket / IPOs etc. The major proportion of wealth management in India isPMS. PMS essentially comprises of a basket of stocks, bonds or even mutualfunds that are made to fit the investors personal investment goals and risk

preferences in return for a fee. This service is basically for HNHs whoseearnings are high, but don't have the time or inclination to manage it

AMC (Asset management companies) are the leaders in the Indian PMS

market with a share of around 75 per cent. This can be partly explained by the

recent entry of the brokerages in this segment. Additionally, the trust that the

AMCs have built over the years has resulted in more HNHs confiding in them

rather than the brokerages. Further, the HNHs typically feel that AMCs have

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the required competence and the knowledge to manage their wealth as they are

in the business of managing wealth in the form of mutual funds.

PMS to give competition to mutual funds going forward

The total AUM of the mutual fund industry stood at around Rs 5 trillion in

2007-08. And, the PMS market is around 11.1 per cent of the mutual fund

investment by the HNHs which is pegged at around Rs 906 billion of AUM.

PMS market in India can register strong growth if the portfolio managers

can educate and convince the investors in HNHs to shift a portion of their

investment in mutual funds to PMS. Portfolio managers have to network

with the HNIs to explain the advantages PMS has over the mutual fund

investment.

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ANALYSIS OF TOP 15 MUTUAL

FUNDS IN INDIA

Table 14: Analysis of top 15 mutual funds in terms of returns over the last

one year as on

10 th dece,2009

Rank Scheme Name

NAV

(Rs.)

Last 12

Months

returns

(%) Nature

Expense

ratio

Minimum

Investment

(Rs)

1 ICICI Prudential GiltFund Investment Plan -

17.9467 39.0366 Gilt 1.10% 5000

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PF Option - Growth

2 Kotak PSU Bank ETF260.

5652 34.6931 ETF 0.65% 10000

3

PSU Bank Benchmark

Exchange TradedScheme 259.2327 34.0731 ETF 0.75% 10000

4

Sundaram BNP ParibasFinancial Gilt ServicesOpportunities Fund -Retails Growth

13.2114 32.0135 Gilt 2.41% 5000

5JM G Sec Regular Plan

Growth28.8

452 31.1128 Gilt 2.25% 5000

6

Canara Robeco Income

Scheme Growth

18.8

858 30.5666 Debt 2.05% 5000

7Escorts Gilt Plan Growth

20.1777 29.8286 Gilt 1.50% 1000

8

ICICI Prudential GiltFund Investment Plan Growth

31.4788 29.287 Gilt 1.50% 5000

9

ING OptiMix AssetAllocator MultiManager Gilt Scheme Growth

17.0637 26.8469 Gilt 0.75% 5000

10Reliance MonthlyIncome Plan Growth 17.995 25.5144 Debt 2.00% 10000

11

DSP BlackRock G SecPlan A Long Duration Growth

31.098 25.1716 Gilt 1.22% 5000

12Reliance Banking Fund

Growth59.6

881 23.7572 Equity 2.18% 5000

13

Templeton IndiaGovernment Securities -Long Term Plan Growth

22.6073 23.6669 Gilt 1.40% 10000

14IDFC Small & MidcapEquity Fund Growth

11.4264 23.4719 Equity 2.30% 5000

15 Bank BeES733.

9447 733.9447 ETF 0.50% 10000

SOURCE:MUTUALFUNDSINDIA.COM

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The Expense ratio of the top 15 funds ranges from 0.50 per cent to 2.30 per

cent, with average of around 1.4 per cent. Most of the funds have Rs 5000 as

minimum investment.

RETURN ANALYSIS

Out of the top 15 funds as on 10th dece 2009, 8 are gilt funds. This clearlyhighlights the dominance of the gilt funds in term of returns in the last oneyear. This can be attributed to the lackluster performance of the capitalmarkets, which resulted in investors moving towards a perceived safe heaven gilt funds.

Investors largely stayed away from gilt funds in the last few years, as theReserve Bank of India raised interest rates to control inflation. But over the lastone year, as interest rates have started to fall, the popularity of gilt funds hasreturned. When interest rates decline, bond yields also decline; as a result,already issued bonds would start trading at higher prices so that their yieldsmatch the current yields in the market. The extent of this inverse relationship ismore accentuated in the case of long-term debt. Therefore, portfolios of long-term bond funds and gilt funds that are predominantly invested in long-termcorporate debt and gilts will see a faster rise in net asset values, translating intosuperior returns. In the past one year, while equity investors lost nearly 50 percent of their asset value from the peak, most gilt funds have given a return of15 per cent or more. While the category average for one-year returns by top giltfunds is 23 per cent, some of the top performers such as ICICI Prudential GiltFund and Canara Robeco Income Scheme have given returns in excess of 30

per cent in the past one year.

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COMPARISON

BETWEEN

MUTUAL FUND SCHEMES

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ANALYSIS OF TOP PERFORMING MUTUAL FUNDS

EQUITY LINK SAVING SCHEME (ELSS)

EQUITY DIVERSIFIED FUNDS

DEBT FUNDS

GILT FUNDS

TOP PERFORMING ELSS FUNDS IN INDIA

Tax-saving funds are the ideal way for very small investors to invest in equity.The tax an investor saves is an attractive padding for the investment gains thathe'll get and the mandated lock-in period enforces one of the best things that aninvestor can have a long term perspective. Equity linked saving schemes(ELSS) are open-ended schemes that give -

An opportunity of growth from investments in equity markets

Tax benefits

Insurance cover

1) TAURUS TAXSHIELD - GROWTH

Taurus Tax Shield is an Open-ended Equity Linked Savings Scheme that offers

you tax savings as well as the potential to grow. Taurus Tax Shield aims togive your investments the potential growth of equities while giving you theadded advantage of tax savings under section 80C and insurance cover. NAVof fund is 27.07%

Investment Objective:

Taurus Tax Shield seeks long term capital growth through investments acrossall market capitalizations, including small, mid and large cap stocks. The fund

aims to be predominantly invested in equity and equity related securities.

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BENCHMARK: BSE 200 INDEX

Asset Allocation

RISK- RETURN

OVERVIEW:

RISK-

RETURN %

EXPENSERATIO 2.50

SHARPE

RATIO -0.15BETA 0.73

PORTFOLIO SUMMARY

Top 5 Holdings

Stock INSTRU

MENTS

Percentage

of Net

RETURN

S%

CLASS %

EQUITY 87.04

DEBT 0.00

CASH &EQUIVALEN

T 12.96

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Assets

BHARTI AIRTELLTD EQUITY 3.43 20.09

RELIANCEINDUSTRIESLTD EQUITY 2.74 22.90

RELIANCECOMMUNICATIONS VENTURESLTD EQUITY 2.32 32.39

ITC LTD EQUITY 2.30 21.26

NTPC LTD EQUITY 2.11 21.66

SECTOR ALLOCATION %

BANKS 6.70

COMPUTERS-SOFTWARE 6.54

CURRENTASSETS 12.97

HOUSING 7.70

OIL&GAS,PETROLEUM 8.12

STOCKS AND SECTORS ANALYSIS

Based on the past one year data, Equity Tax Saving Schemes have

generated the negative return of 26.4%.All the Equity based funds like

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Equity Diversified, Equity Technology, Equity Banking and Equity Index

are giving negative returns.

Above mentioned are the top 5 holdings of the Taurus tax shield fund

with Reliance communications ventures limited generating highest

return of 32.39%. This stock has not only outperformed the Sensex but

the funds benchmark (BSE 200) also. This fund has total market

capitalization (Rs. In crores) 48,851.24

Mr. Prasanna pathak, fund manager of Tauraus Tax Shield Advantage has

included new funds like

Taurus Short Term Bond Fund SI growth

Bharat Earth Movers Ltd

Dlf Limited

Aditya Birla Nuvo Limited

Some funds have been excluded like-

Jai Prakash associates Ltd

Gas Authority of India Ltd

Suzlon Energy Ltd

Larsen & Toubro Ltd

2) SBI TAX ADVANTAGE FUND SERIES1- GROWTH

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The scheme aims to generate capital appreciation over a period of ten years byinvesting in equities of companies across large, mid and small marketcapitalization, along with income tax benefit. NAV of fund is 9.85.

BENCHMARK: BSE 100 INDEX

ASSET ALLOCATION

RISK- RETURN

OVERVIEW:

RISK-

RETURN %

EXPENSE

RATIO 2.50

SHARPERATIO -0.28

BETA 0.16

PORTFOLIO SUMMARY

Top 5 Holdings

Stock

INSTRU

MENTS

Percentage

of Net

Assets

RETURN

S%

RELIANCEINDUSTRIES

LTD EQUITY 5.81 22.90

CLASS %

EQUITY 90.00

DEBT 0.00

CASH &EQUIVALENT 10.00

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LARSEN &TUBRO LTD EQUITY 4.04 30.42

ITC LTD EQUITY 3.71 21.26


INFOSYSTECHNOLOGIESLTD EQUITY 3.46 16.07

SECTOR ALLOCATION %OIL & GAS,PETROLEUM& REFINERY 12.20

BANKS 11.91

CURRENTASSETS 10.00

ENGINEERING 6.74

ELECTRICALS 6.12


Above mentioned are the top 5 holdings of the Taurus tax shield fund

with Larsen & Tubro Ltd generating highest return of 30.42%. This

fund has total market capitalization (Rs. In crores) 68726.64

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EXPENSERATIO 2.50

SHARPERATIO -0.13

BETA 1.01

PORTFOLIO SUMMARY

Top 5 Holdings

Stock

INSTRU

MENTS

Percentage

of Net

Assets

RETURN

S%

RELIANCEINDUSTRIESLTD EQUITY 19.82 22.90


NTPC EQUITY 6.68 21.66

STATE BANK OFINDIA EQUITY 6.47 13.01

HDFC BANK LTD EQUITY 6.40 27.33

SECTOR ALLOCATION %

BANKS 15.32

POWER

GENERATION 14.53

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OIL &GAS,PETROLEUM 13.71

HOUSING,CONSTRUCTION 7.83

COMPUTERS -SOFTWARE 7.78


This fund has the highest Sharpe Ratio amongst the all the above funds,

meaning it generates higher returns for every unit of risk taken.

Fund has kept 20% of the amount as cash which means Fund manager

will actively add new funds in the portfolio.

HDFC Bank Ltd has given the highest return of 27.33% in top 5 holding.

Relaiance Industries Ltd is the second best performing stock.

Risk Profile & Sutability :

This fund has a lock in period of three years due to which an

investor will not be able to redeem his money before three years.

An investor with a high risk appetite and those who intend to save

tax through ELSS can look forward to invest in this fund.

Mr. Anant Deep Katare, fund manager of DBS Chola Tax Saver Fund -Growth has included new funds like

Piramaml healthcare Ltd

Finacial Technologies

Pantaloon Retail (India) Ltd.

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Ultratech Cement Ltd.


JSW Steel Ltd.

Sterlite Industries (India) Ltd.

Reliance capital Ltd.

TOP PERFORMING EQUITY DIVERSIFIED FUNDS IN INDIA

Diversified equity funds are ideal for forming the core of every long-terminvestors portfolio. They capture the gains made by a broad range of stockswhile shielding their portfolios from the worst of the volatility that the marketsface periodically.

1.) PRINCIPAL JUNIOR CAP FUND - GROWTH

This scheme seeks to provide capital appreciation in the form of dividend byinvesting in the equity and equity related instruments within the marketcapitalization range of the companies. It has NAV of Rs. 15.12

BENCHMARK: CNX NIFTY JUNIOR

Asset Allocation

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CLASS %

EQUITY 97.68

CASH/CALL 2.32

DEBT 0.00

RISK- RETURN OVERVIEW:

RISK-RETURN %

EXPENSERATIO 2.50

SHARPERATIO -0.13

BETA 0.95

PORTFOLIO SUMMARY

Top 5 Holdings

Stock

INSTRU

MENTS

Percentage

of Net

Assets

RETURN

S%

ORIENTAL EQUITY 6.36 4.66

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PAPERS &INDUSTRIESLTD

LUPIN LTD EQUITY 6.26 22.70

INFRASTRUCTUREDEVELOPMENTFINANCECOMPANY LTD EQUITY 5.19 21.93

AXIS BANK LTD EQUITY 4.86 15.51

BANK OFBARODA EQUITY 4.75 7.49

SECTOR ALLOCATION %

BANKS 19.83

COMPUTERS- SOFTWARE 10.02

FINANCE 8.70

STEEL 6.51

PAPER 6.50


Based on the past one year data, Equity diversified funds

have generated the negative return of around 30%.

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Stock

INSTRU

MENTS

Percentage

of Net

Assets

RETURN

S%

FEDERAL BANKLTD EQUITY 6.47 8.44


PANTALOONRETAIL (INDIA)LTD EQUITY 4.59 42.77

TVS MOTOR COMPANY EQUITY 4.47 19.00

ORIENT PAPER& INDUSTRIESLTD EQUITY 4.29 4.66

SECTOR ALLOCATION %

TEXTILES 12.83

MISCELLANEOUS 10.15

BANKS 8.99

OIL & GAS 8.17

CEMENT 7.50


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Pantaloon retail (India) Ltd giving the highest return of 42.77% and

Bharti Airtel Ltd with 21% return. Both stocks have performed better

than the Sensex and Benchmark index of the fund.

Based on the past one year data, Equity diversified funds have generated

the negative return of around 30%.

Mr. Pankaj Tibrewal, fund manager of Principal Emerging Bluechip fund

- Growthhas included new funds like

TVS Motor Company

Corporation Bank

Power finance Corporation Ltd

Mclead russel India Ltd


JSW Steel Ltd

Bank of Baroda

Wipro Ltd

JaiPrakash associates Ltd

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3) JM MID CAP FUND - GROWTH:

This scheme seeks to generate long term capital growth at a controlled level of

risk by predominantly investing in Mid Cap Companies. NAV is Rs.19.81.

BENCHMARK: CNX MID CAP

ASSET ALLOCATION

CLASS %

EQUITY 51.82

CASH/CALL 48.18

DEBT 0.00

RISK- RETURN OVERVIEW

RISK-

RETURN %

EXPENSERATIO 2.50

SHARPERATIO -0.10

BETA 0.94

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PORTFOLIO SUMMARY

Top 5 Holdings

StockINSTRUMENTS

Percentage

of NetAssets

RETURNS%

MAHINDRA &MAHINDRA LTD EQUITY 15.34 22.77

HERO HONDAMOTORS LTD EQUITY 11.38 20.89

TATA MOTORSLTD EQUITY 10.55 19.17

MARUTISUZUKI INDIALTD EQUITY 9.07 25.40

BAJAJAUTOLTD EQUITY 8.86 22.67

SECTOR ALLOCATION %

CURRENTASSETS 48.18

AUTO & AUTO

ANCILLIARIES 32.31

RUBBER &TYRES 7.06

STEEL 3.84

FINANCE 3.32

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Fund has kept 20% of the amount as cash, which means Fund manager

will actively add, new funds in the portfolio.

Fund has failed to give positive Sharpe ratio as higher it is better it is

.Beta measures the volatility of the stock in comparison to market index.

BSL pure value fund has beta of less than 1 that signifies that fund is lessvolatile than market index.

Mr. Sanjay Kumar Chhabaria, fund manager of JM Mid Cap fund -

Growthhas included new funds like

Amara Raja Batteries Ltd.

Exide Industries Ltd.

Escorts Ltd

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TOP PERFORMING DEBT FUNDS IN INDIA

The performance of equities in the recent past has left many investors stunned

as Indias benchmark Index, Sensex has come down from 21,000 in the monthof January, 2008 to the levels of 9000 10000 at the end of the 2008.Manyinvestors lost their money who had invested in equities. Now every investorwould be seeking optimal returns as well as a sense of security for their capitaland the answer lies with the fixed income instruments, mainly debt funds. Theyare less risky than equities. No doubt equities come with handsome returns buton the other hand, the risk and volatility of equities are the negative sides ofinvesting in equities, which is not there in the Debt funds.

Debt funds are those funds, which invest in debt papers which is issued byGovernment authorities, private companies, banks and financial institutions.Debt Funds are further classified as:

Gilt Funds

Income Funds

MIPs

Short term Plans (STPs)

Liquid Funds

NAME* OBJECTIVE BENCHMARK ASSETALLOCATION% PORTFOLIO

ICICI

PRUDENTIAL

SMART FUND

SERIES C 24

MONTHS

RETAIL

GROWTH

- INVEST INSHORT TERMAND MEDIUMTERM DEBTINSTRUMENTS

CRISIL BFI DEBT-96.64,

EQUITY-0.00

CASH-3.36

CURRENT ASSETS,BANKS, FINANCESECTOR

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ICICI

PRUDENTIAL

SMART FUND

SERIES D 24

MONTHS

RETAIL

GROWTH

-FIXED ANDFLOATINGPAYOUTS

CRISIL BFI DEBT-94.99

CASH-5.01

EQUITY-0.00

CURRENT ASSETS,BANKS, FINANCESECTOR

ICICI

PRUDENTIAL

SMART FUND

SERIES F 24

MONTHS

RETAIL

GROWTH

-FIXED ANDFLOATINGPAYOUTS

CRISIL FBI DEBT-97.12

EQUITY-0.00

CASH-2.88

BANKS,CHEMICALS,CURRENTASSETS, FINANCE

*DENOTES ALL SCHEMES COMES UNDER GROWTH OPTION


NAME

EXPENSE

RATIO

BETA SHARPE

RATIO

RETURN

CANARA REBECOINCOME FUND

2.08 4.77 .57 31.55

ICICI PRU INCOMEFUND

1.66 11.85 0.25 23.59

RELIANCE MIPFUND

0.80 1.15 0.21 19.53

TOP PERFORMING GILT FUNDS IN INDIA

As mentioned earlier, out of the top 15 mutual funds as on 11th June 2009, 8 are

gilt funds. Gilt mutual funds have been able to give stupendous returns in the

last year because of the RBIs expansionary monetary policy and the CRR,

SLR and the repo cuts announced in the last six months. With inflation

reaching double-digit figures in August 2008, RBI announced a host of

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measures to ease the liquidity situation in the Indian economy. This led to a

softening interest rate scenario with yield of 10-year government securities, or

gilts, declining rapidly to a low of 5.2 per cent from about 9.4 per cent (the

years high) in July 2008. This unexpected reversal in interest rates triggered a

sharp rally in the price of gilts as these are inversely related.

1.ICICI PRUDENTIAL GILT FUND TREASURY PLAN- GROWTH:

The main objective of this scheme is to generate returns through investments

made in Gilts.

BENCHMARK INDEX: I Sec SI- BEX

ASSET ALLOCATION

RISK- RETURN

OVERVIEW

RISK-

RETURN

%

EXPENSERATIO

1.10

SHARPERATIO 0.43

BETA 1.09

PORTFOLIO SUMMARY

Top 5 Holdings

CLASS %

EQUITY 0.00

DEBT 95.64


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Stock

INSTRU

MENTS

Percentage

of Net

Assets

RETURN

S%

GOISECURITIES 28.33 NA



GOI

SECURITI

ES 9.82 NA


SECTOR ALLOCATION %

CURRENTASSETS 4.36

SECURITIES 95.64

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STOCK AND SECTOR ANALYSIS

This is a pure debt fund which essentially liquid and carry no credit risk.

It enables exposure to a pure government security portfolio.

This fund facilitates participation in the wholesale market for government

debt, even for smaller ticket.

1.ING GILT FUND GROWTH

This scheme seeks to generate a relatively risk free return by investing in

soverign securities.

It has NAV of Rs. 15.57

BENCHMARK INDEX: I Sec Composite Index

ASSET ALLOCATION

CLASS %

EQUITY 0.00

DEBT 65.24


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RISK-

RETURN %EXPENSE

RATIO 1.10

SHARPERATIO 0.43

BETA 1.09

PORTFOLIO SUMMARY

Top Holdings

Stock

INSTRU

MENTS

Percentage

of Net

Assets

RETURN

S%

GOISECURITI

ES 57.96 NA

CBLOCURRENTASSETS 30.93 NA


SECTOR ALLOCATION %

CURRENTASSETS 34.76

SECURITIES 65.24

STOCKS AND SECTOR ANALYSIS

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This Fund has always outperformed its benchmark index and

continuously increasing also.

It has a large market capitalization and Fund has kept more than 30% of

the amount as cash which means Fund manager will actively add new

funds in the portfolio.

1) BIRLA SUNLIFE GOVERNMENT SECURITIES FUND - LONG

TERM GROWTH

This scheme will invest only in Govt Securities with the exception of

investments made in the call money market. Secondary objective of this

scheme is capital appreciaton. It has NAV of Rs. 24.53

BENCHMARK INDEX: I Sec Li BEX

ASSET ALLOCATION


CLASS %

EQUITY 0.00

DEBT 0.00

CASH &

EQUIVALENT 100.00

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RISK-

RETURN %

EXPENSERATIO 1.50

SHARPERATIO 0.30

BETA 0.35

PORTFOLIO SUMMARY

Top Holdings

Stock

INSTRU

MENTS

Percentage

of Net

Assets

RETURN

S%

CASH

CURRENT

ASSETS 54.92 NA


SECTOR ALLOCATION %

CURRENTASSETS 100.00

STOCKS AND SECTOR ANALYSIS

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This Fund has short maturity period with a high credit quality.

In the past 1 year, it has given a return of 22.96%

FUNDS ANALYSIS

Beta Ratio If we now look at the parameter on which the fund has been

evaluated we will find the Beta value of Ing Gilt fund Growth and

ICICI Prudential Gilt Fund Treasury Plan- Growth

to be highest. This shows that this fund has been investing in moreaggressive assets and which also implies that assets are more risky than

the market portfolio. It also further implies that there exists a more

amount of non-diversifiable risk attached to this fund.

Expense Ratio indicates the annual expenses of the funds, including the

management fee, administrative cost, divided by the fund under

management. Lower it is better it is for the investor. It indicates how

efficiently fund manager is utilizing the Funds money. Seeing these three

funds there is not huge difference between their Expense Ratio. It ranges

between 2.0-2.4%, which is an acceptable limit.

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a wide variety of funds to suit his risk tolerance, investment horizon &investment objective.

Table 16:

Instruments InvestmentObjective

RiskTolerance

InvestmentHorizon

Equity CapitalAppreciation

High Long Term

FI Bonds Income Low Medium-Long Term

CorporateDebentures Income High-Medium-Low

Medium-Long Term

CompanyFixedDeposits

Income High-Medium-Low

Medium

BankDeposits

Income GenerallyLow

Flexible-AllTimes

PPF Income Low Long Term

LifeInsurance

Risk Cover Low Long Term

Gold InflationHedge

Low Long Term

Real Estate InflationHedge

Low Long Term

MutualFunds

CapitalGrowth,Income

High-Medium-Low

Flexible-AllTimes

Figure 13: MUTUAL FUND & OTHER INVESTMENT PRODUCTS

RISK/RETURN PROFILE

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Equity

Mutual funds

Bank fixed

deposits

Postal savings

LOW HIGHReturn

Risk

HIGH

LOW

SOURCE:RBI

Comparing the different investment options availiable with the investor it is

found that more risker an investment option is,more profitable it is.In case of

Equities,they are more volatile than any other investment option but at the

same giving high returns also.As seen from the above mentioned graph, it is

clearly shown that equities are giving higher returns.But every investor has

different risk appetite.Many investors wants safety of their investments with

moderate/low returns.For them, Bank Fixed Deposits/ Term Deposits,

Government Securities ,Postal Savings are better options. Seen from the graph

postal savings have lowest risk capacity with returns also on lower side. In a

Fixed Deposit Account, a certain sum of money is deposited in the bank for a

specified time period with a fixed rate of interest. The rate of interest for Bank

Fixed Deposits depends on the maturity period).

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IMPLICATION OFCURRENT

GLOBAL CRISIS ON

MUTUAL FUND INDUSTRY

Figure 14: AUM AS % OF GDP

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The current economic crisis in the US has originated in the indiscreminate

lending of housing loans in the countrys sup-prime mortgage market. Sub-

prime lending has resulted in high levels of defaults. The banks were laying

huge bets with each other over loans and assets. Complex transactions were

designed to move risk and disguise the sliding value of assets. As the investors

are risk averse, they realized the situation, losses occurred, and the market as a

whole plummeted. This led to a deep credit crunch in the US, the effect of

which was felt across the globe losses occurred, and the market as a whole

plummeted. This led to a deep credit crunch in the US, the effect of which wasfelt across the globe.

I mpact on mutual fund industry:

The current turmoil in the global markets, quite expectedly, marks an inflexion

point in the Indian markets as well. In what has been a pattern by now, after

every crisis the industry pulls up its socks even as the regulator goes about

correcting the structural inefficiencies in the system? This time is no exception.

The technology bubble of 2000-01 was a lesson in the need for better portfolio

diversification. The downturn at that time had highlighted the deficiencies in

the risk management practices of Mutual Funds. The crisis had then led toMutual Fund companies implementing strict risk management systems on the

basis of the guidelines issued by the Securities and Exchange Board of India

(SEBI). This time round, the ongoing upheaval is expected to encourage Asset

Management Companies (AMCs) improve their disclosures and risk

management practices and prompt greater diversification of investor base so

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that bulk redemption may be averted and retail investor protection measures

can be strengthened further.

NO. POSITIVE EFFECTS NEGATIVE

EFFECTS

1) . Bank investment inMFs jumps over eighttimes

SIP investors in MFshit the most by equitiesdrop.

2) MFs Slowly emerging

from FII dominance.

Mutual fund houses lost

36798.58 crore inFY2009

3) MFs offer top-ups tobring back investors

Market downturn driesup ELSS dividend

payouts.

4) MFs identify promisingsectors for nextrecovery.

No monthly incomefrom the monthlyincome plans.

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RECENT

DEVELPOMENTS IN INDUSTRY

1) UTI Mutual Fund appoints Dabbawalas as Relationship Managers(www.mutualfundsindia.com)

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UTI Mutual Fund has reduced their advertisement budgets by about 30-40%,

as a result of which they had to seek a less expensive yet innovative method to

communicate. They would now be communicating their schemes through the

strength of 5,000-odd dabbawalas in Mumbai. The dabbawalas would be

appointed as relationship managers for the new wealth builder fund which

includes the benefits of both equity and gold. The strategy been taken by UTI

Mutual Fund is now to target the retail investors through such direct

promotions.

2) A Shariah-compliant ETF from Benchmark, 17/02/2009

(www.valueresearchonline.com)

India's first ever Shariah-compliant mutual fund has finally hit the markets. In a

bid to provide innovative products to the Indian investors, Benchmark Mutual

Fund has launched the Shariah Benchmark Exchange Traded Scheme, an open-

ended ETF. The fund will track the S&P CNX Nifty Shariah Index, a variant ofthe Nifty index. As per Shariah rules, the following sectors would be excluded

from investment - Pork, Alcohol, Gambling, Financials, Advertising & Media,

Pornography, Tobacco and Trading of Gold and Silver as cash on deferred

basis

3) The Global Trend (www.moneycontrol.com)

A news report in the London press recently stated that cash-strapped Western

companies are considering issuing Islamic bonds to tap investors in the Middle

East. But it is certainly not new. Shariah investing is quite popular in the West.

In 2007, British retailer Tesco issued its first sukuk -- or Islamic-compliant

debt --in 2007 for its Malaysian unit. Back in 2006, bankers from Merrill

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Lynch (London) and Bemo Securities (Beirut) wrapped a $166 million sale of

debt like certificates for natural gas producer East Cameron Gas (Houston).

The certificates were believed to be the first shariah-compliant securitized

market financing of U.S. assets and were structured so that Islamic investors

effectively get a fixed rate of return while considering themselves owners of

the underlying assets.

4) Exit rush haunts mutual funds investing abroad(www.economictimes.com)

Persistent downturn in global equities has put India-based international funds

on a sticky wicket. While net asset values (NAVs) of most funds in this

category fell over 50% from their peak levels, assets under management

(AUM) of a few schemes shrunk 60-70% as a result of the market meltdown.

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FINDINGS,

LIMITATION,CONCLUSION&SUGGESTION

FINDINGS: -

Penetration of mutual funds per household has increased with the passage

of time.

From 1.3% in the year 2000-01 it has increased to 7.4% in 2008-2009.

Although people started investing in mutual fund but after the entire

analysis of survey and questionnaires it has been found that:

Lack of knowledge is the main reason why people do not invest inmutual funds.

Factors considered for investment is majorly growth and safety.

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Majority of the investors are preferred to invest for medium term only .

Majority of mutual fund investors is not even aware of the name of thescheme in which they have invested.

For investors, if mutual funds offer steady returns and minimization ofrisk, they may consider investing in them.

Many investors do not prefer to take Professional Advice.

Analytical tools for evaluating risk by taking:

50 days stock prices of SBI and PNB, it has been found that coeffecient

of variation of PNB is Lower than SBI which implies prices of PNB are

more stable, consistent and homogenous in terms of risk.

Increasing trend of portfolio management services

It is found that major proportion of wealth management in India is PMS

which is basically for HNHs whose earnings are high.

After looking at top mutual funds, it is found that:

Beta value of Ing Gilt fund Growth and ICICI Prudential Gilt Fund

Treasury Plan- Growth to be highest. This shows that this fund has been

investing in more aggressive assets and which also implies that assets aremore risky than the market portfolio. It also further implies that there

exists a more amount of non-diversifiable risk attached to this fund.

Expense Ratio indicates the annual expenses of the funds, including the

management fee, administrative cost, divided by the fund under

management. Lower it is better it is for the investor. It indicates howefficiently fund manager is utilizing the Funds money. Seeing these three

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funds there is not huge difference between their Expense Ratio. It ranges

between 2.0-2.4%, which is an acceptable limit.

After comparing the different investment options availiable with theinvestor it is found that more risker an investment option is,more

profitable it is.In case of Equities,they are more volatile than any other

investment option but at the same giving high returns also.

LIMITATIONS OF SURVEY:

Limited area of study: Our survey is confined only to Delhi & Ghaziabad.

Sample size will be limited so it might be possible that in study all type ofinvestors or people are not covered.

Limited span of study: All the findings and suggestions will be based on the

current market situation which is dynamic in nature.

Indian stock market is semi-efficient market, where sentiments play a majorrole in price; hence 100% accurate predictions cannot be made about itsfuture path.

CONCLUSION:

After the entire analysis of survey and questionnaires it has been found that:

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Majority of the people is not aware of mutual funds as an investment option.

Majority of people invests.

for non-investors there are two dominant reasons: working on expansion

plan and reinvestment in their own unit.

Factors considered for investment is majorly growth and safety.

Majority of the investors are preferred to invest for medium term only .

Lack of knowledge is the main reason why people do not invest in mutualfunds.

Majority of mutual fund investors is not even aware of the name of the

scheme in which they have invested.

For investors, if mutual funds offer steady returns and minimization of risk,they may consider investing in them.

Many investors do not prefer to take Professional Advice.

ANNEXURE

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QUESTIONNAIRE

NAME- AGE-GENDER-

CONTACT- OCCUPATION-

Q.1.Do you invest?

a. Yes

b. No

Q.2.Why people do not invest?

a. Working on expansion plan

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b. Re-invest in their own unit

c. Do not have enough surpluses

Q.3 Are you Aware of Mutual Funds?

a. Yes

b. No

Q.4.What is the basic purpose of investment?

a. Tax Saving

b. Safety

c. Income

d. Growth

Q.5. What is your investment horizonwhen will you like to use yourinvested money?

a. Long term investor

b. Short term investor

c. Medium term investor

Q.6. Do you take any professional a

Subhi Final

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