A Project Report On

Comparative Analysis Of Mutual Funds Schemes

AT
KARVY STOCK BROCKING LIMITED
Project submitted i !"rti"# $u#$i##met $or t%e "&"rd o$ t%e De'ree o$
MASTER OF BUSINESS ADMINISTRATION
By
V.P. SHALINI JAISWAL
Reg.No. 10EH1E0003
Under the esteemed guidance of
Mr. M. Dowlath Ahammad MBA, M.Phil, Ph.!"
DEPARTMENT O( B)SINESS MANAGEMENT
KOTTAM COLLEGE OF ENGINEERING
A!!"l"at#d to JNT$ A%a%ta&'r(
Ch"%%at#)'r' V(* Kall'r M(* K'r%ool D"+t
,-.- / ,-.,

KOTTAM COLL! OF "!#"R#"!
$Approved %y A#CT and Affiliated to &"T'A( Anantapur)
Chinnate*ur $v)( KALL'R $M)( K'R"OOL $+#ST) , -./0./

De!t*o$ Busiess M""'emet
CERTIFICATE
This is to certify that the Project Report titled COMPARATIVE ANALYSIS O
M!T!AL !N" SC#EMES$ %as carried o&t 'y V(P S#ALINI )AIS*AL of Re+d(No
,-E#,E---. This is s&'/itted i0 partial f&lfil/e0t for the a%ard of the "e+ree of
Master of 1&si0ess Ad/i0istratio0 2M1A3 of )a%aharlal Nehr& Tech0olo+ical
!0i4ersity5 A0a0tap&r d&ri0+ the acade/ic year 6-,, 7 6-,6(
Si+0at&re of the S&per4isor Si+0at&re of the
#O"
Si1nature of 2ternal 2aminer
Date:
Place: Chinnatekuru
DECLARATION
I hereby declare that this Project Report titled Comparative Analysis Of Mutual Funds
Schemes submitted by me to the Department of Business Management, Kottam College of
Engineering, is a bonafide work undertaken by me and it is not submitted to any other University or
Institution for the award of any degree/diploma/certificate or published any time before.
Name and Address of the Student Signature of the Student
34P4 Shalini &ais5al(
64"o7 89.:/;0(
Santhosh "a1ar(
Kurnool4
Date:
CERTI(ICATE
This is to certify that the Project Report titled Comparative Analysis Of
Mutual Fund Schemes submitted in partial fulfillment for the award of the
Degree of Master of Business Administration (MBA) was carried out by V.P.
Shalini Jaiswal under my guidance. This has not been submitted to any other
ni!ersity or "nstitution for the award of any degree#diploma#certificate.
Signature of the Super!isor

Date:
Place: Chinnatekuru.
ABSTRACT
This Project e2amines the relationship %et5een performance and ris* e2posure for
mutual funds4 #t aims to find out the performance of mutual funds and to ma*e ri1ht
investment decision for ma2imi<ation of returns and minimi<ation of ris*4 And it also
e2plains the %asic characteristics and types of mutual funds4
=hile analy<in1 or interpretation of data( statistical techni>ues li*e ?eta( Standard
deviation( Sharpe ratio( Treynor ratio( &ensen ratio have %een used4
Finally( the findin1s and su11estions 5ere 1iven to the investors %ased upon the
data collected( 5hich in turn help them to ta*e 5ise decisions to increase returns and
reduce the ris* %y ma*in1 suita%le investment4
The findin1s are consistent and atleast some investors are sophisticated enou1h to
reco1ni<e the ris* level of funds and adjust their learnin1 and investments accordin1ly 4
ACKNO+LEDGEMENT
# 5ould li*e to than* KARVY STOCK BROKING LIMITED( for 1ivin1 me
the opportunity to underta*e project 5or* in their or1ani<ation4 # 5ould li*e e2press my
sincere than*s to all the employees of KARVY STOCK BROKING LIMITED( for
providin1 the necessary information and also constant 1uidance durin1 project 5or*4
# am 1rateful to Mr*R",i Kum"r( trainin1 coordinator "t KARVY STOCK
BROKING LIMLTED( for 1uidin1 me to 5or* on the project titled -Com!"r"ti,e
A"#.sis O$ Mutu"# (ud Sc%emes/*
# 5ould li*e to than* Sri* TVS* Aru Murt%.0 Principal( for his assistance and
support4
# am than*ful to Mr* M* Do&#"t% A%"mm"d ( faculty and 1uide for his valua%le
1uidance throu1hout this project 5or*4
CONTENTS
C1APTER 23
#ntroduction
"eed of the Study @
O%jectives of the Study @
Research Methodolo1y .:
Limitations of the Study .0
C1APTER 24
Revie5 of Literature .A
C1APTER 25
#ndustry Profile .B
Company Profile 0-
C1APTER 26
+ata Analysis and #nterpretation 8A
C1APTER 27
Findin1s -B
Su11estions -/
Conclusions -@
BIBLIOGRAP1Y C.
CHAPTER 1
INTRODUCTION
INTROD)CTION O( M)T)AL ()ND
A mutual fund is a form of collective investment4 #t is a pool of money collected
from various investors 5hich is invested accordin1 to the stated investment
o%jective4 The fund mana1er is the person 5ho invests the money in different
types of securities accordin1 to the predetermined o%jectives4 The portfolio of a
mutual fund is decided ta*in1 into consideration this investment o%jective4 Mutual
fund investors are li*e shareholders and they o5n the fund4 The income earned
throu1h these investments and the capital appreciation reali<ed %y the scheme is
shared %y its unit holders in proportion to the num%er of units o5ned %y them4
The value of the investments can 1o up or do5n( chan1in1 the value of the
investors holdin14 Mutual funds are one of %est investments created %ecause they
are very cost efficient and very easy to invest
Source7 5554amfiindia4com

The investment in securities throu1h mutual funds is spread across 5ide ran1e of
industries and sectors and thus the ris* is reduced4 +iversification reduces the ris*
%ecause all stoc*s may not move in the same direction at the same time4 3arious fund
houses issue units to the investors in accordance 5ith the >uantum of money invested %y
them4 #nvestors of mutual funds are *no5n as unit holders4
#n #ndia a mutual fund is re>uired to %e re1istered 5ith Securities 2chan1e ?oard
of #ndia DS?#E 5hich re1ulates the securities mar*et4
MEANING8
Mutual fund is an in investment that pools to1ether funds from investors and
invest the money in stoc*s( %onds( short ,term money9mar*et instruments( or other
securities4An investor can participate in the mutual funds %y %uyin1 the units of the fund4
A diversified pool of assets( 5here the funds have %een invested ( %ac*s each unit4
Securities 1ive small investors access to a 5ell diversified portfolio of e>uities(
%onds and other securities4 The main appeal of mutual fund is that smaller investors can
receive the same e2pertise and purchasin1 po5er as the lar1e institutions4 #nvestors 5ho
%uy Mutual fund need only %e concerned 5ith the >uality and lon1 term performance of
the fund4
DE(INITIONS8
The S?#( .@@0 defines a Mutual Fund as 7 FA fund esta%lished in the form of a
Trust %y a sponsor to raise monies %y the trustees throu1h the sale of units to the pu%lic
under one to more schemes9for investin1 in securities in accordance 5ith these
re1ulations4G
Accordin1 to the a%ove definition( a mutual fund in #ndia can raise resources
throu1h sale of units to the pu%lic4 #t can %e set up in the form of a Trust under the #ndian
Trust Act4
Characteristics of a Mutual Fund
#nvestors purchase mutual funds shares from the fund itself $or throu1h a
%ro*er)(%ut are not a%le to purchase the shares from other investors on a
secondary mar*et4
Professional mana1ers mana1e the affairs for a fee4
The funds are invested in a portfolio of mar*eta%le
Securities( reflectin1 the investment o%jective4
The investment portfolios of mutual fund typically mana1ed %y separate entities
*no5n as F#nvestment AdvisersG4
The o5nership is in the hands of the investors 5ho have pooled in their funds4
ADVANTAGES O( M)T)AL ()ND
Pro$essio"# M""'emet
Mutual Funds provide the services of e2perienced and s*illed professionals(
%ac*ed %y a dedicated investment research team that analyses the performance and
prospects of companies and selects suita%le investments to achieve the o%jectives of the
scheme4
Di,ersi$ic"tio
Mutual Funds invest in a num%er of companies across a %road cross9section of
industries and sectors4 This diversification reduces the ris* %ecause seldom do all stoc*s
decline at the same time and in the same proportion4
Hou achieve this diversification throu1h a Mutual Fund 5ith far less money than
you can do on your o5n4
Co,eiet Admiistr"tio
#nvestin1 in a Mutual Fund reduces paper5or* and helps you avoid many
pro%lems such as %ad deliveries( delayed payments and follo5 up 5ith %ro*ers and
companies4 Mutual Funds save your time and ma*e investin1 easy and convenient4
Retur Poteti"#
Over a medium to lon19term( Mutual Funds have the potential to provide a hi1her
return as they invest in a diversified %as*et of selected securities4
Lo& Costs
Mutual Funds are a relatively less e2pensive 5ay to invest compared to directly
investin1 in the capital mar*ets %ecause the %enefits of scale in %ro*era1e( custodial and
other fees translate into lo5er costs for investors4
Li9uidit.
#n open9end schemes( the investor 1ets the money %ac* promptly at net asset
value related prices from the Mutual Fund4 #n closed9end schemes( the units can %e sold
on a stoc* e2chan1e at the prevailin1 mar*et price or the investor can avail of the facility
of direct repurchase at "A3 related prices %y the Mutual Fund4
Tr"s!"rec.
Hou 1et re1ular information on the value of your investment in addition to disclosure on
the specific investments made %y your scheme( the proportion invested in each class of
assets and the fund mana1erIs investment strate1y and outloo*4
(#e:ibi#it.
Throu1h features such as re1ular investment plans( re1ular 5ithdra5al plans and
dividend reinvestment plans( you can systematically invest or 5ithdra5 funds accordin1
to your needs and convenience4
A$$ord"bi#it.
#nvestors individually may lac* sufficient funds to invest in hi1h91rade stoc*s4 A mutual
fund %ecause of its lar1e corpus allo5s even a small investor to ta*e the %enefit of its
investment strate1y4
C%oice o$ Sc%emes
Mutual Funds offer a family of schemes to suit your varyin1 needs over a lifetime4
+e## Re'u#"ted
All Mutual Funds are re1istered 5ith S?# and they function 5ithin the provisions of
strict re1ulations desi1ned to protect the interests of investors4 The operations of Mutual
Funds are re1ularly monitored %y S?#4
DISADVANTAGES O( M)T)AL ()ND
Costs Des!ite Ne'"ti,e Returs
#nvestors must pay sales char1es( annual fees( and other e2penses $5hich 5eIll
discuss %elo5) re1ardless of ho5 the fund performs4 And( dependin1 on the timin1 of
their investment( investors may also have to pay ta2es on any capital 1ains distri%ution
they receive even if the fund 5ent on to perform poorly after they %ou1ht shares4
L"c; o$ Cotro#
#nvestors typically cannot ascertain the e2act ma*e9up of a fundIs portfolio at any
1iven time( nor can they directly influence 5hich securities the fund mana1er %uys and
sells or the timin1 of those trades4
Price )cert"it.
=ith an individual stoc*( you can o%tain real9time $or close to real9time) pricin1
information 5ith relative ease %y chec*in1 financial 5e%sites or %y callin1 your %ro*er4
Hou can also monitor ho5 a stoc*Is price chan1es from hour to hour or even second to
second4 ?y contrast( 5ith a mutual fund( the price at 5hich you purchase or redeem
shares 5ill typically depend on the fundIs "Ay( 5hich the fund mi1ht not calculate until
many hours after youIve placed your order4 #n 1eneral( mutual funds must calculate their
"A3 at least once every %usiness day( typically after the major '4S4 e2chan1es close4
ORGANIZATION OF A MUTUAL FUND
There are many entities involved and the dia1ram %elo5 illustrates the
or1ani<ational set up of mutual fund#
$%UR&E # '''.amfiinda.com
A Mutual Fund in #ndia is constituted in the form of trust created under the #ndian
Trusts Act4 .//04 The fund sponsor acts as Settler of the trust( contri%utin1 to its initial
capital and appoints a Trustee to hold the assets of the trusts for the %enefit of the unit
holders( 5ho are the %eneficiaries of the Trust4 'nder the #ndian Trusts Act( the Trust or
the fund has no independent le1al capacity itself( rather it is the Trustee or Trustees 5ho
have the le1al capacity and therefore all acts in relation to the trust are ta*en on its %ehalf
%y the trustees4 The trustees hold the unit holderIs money in a fiduciary capacity that is
the money %elon1s to the unit holders and it is entrusted to the fund for the purpose of
investment4 The fund sponsor can %e compared to a promoter of a company4
The Asset Mana1ement Company is appointed to act as the investment mana1er of the
trust under the ?oard supervision and direction of the Trustees4 The sponsor appoints the
AMC 5hich 5ould in the name of the Trust( float and then marria1e the different
investment scheme as per S?# 1uidelines4
)it 1o#der8
The individual 5ho invest money in the mutual fund 5ith an aim of 1ettin1
returns4 The Mutual fund allots him num%er of units %ased on his investment and the
value of the unit4
S!osor8
A Sponsor means any%ody corporate 5ho( actin1 alone or in com%ination 5ith
another %ody corporate( esta%lished a mutual fund after completin1 the formalities
prescri%ed in the S?#Is Mutual Funds Re1ulations4 The Sponsor should have a sound
trac* record and 1eneral reputation of fairness and inte1rity in all his %usiness
transactions4
Trustee8
Trustee means the ?oard of Trustees or the Trustee Company 5ho hold the
property of the Mutual Fund in trust for the %enefit of the unit holder4
Asset M""'emet Com!".8
A Company formed and re1istered under the Companies Act( .@-C and 5hich has
o%tained the approval of S?# to function as an Asset Mana1ement Company may %e
appointed %y the sponsor of the mutual fund as such4
Custodi" "d De!ositories8
Custodian is a person appointed for safe *eepin1 of the securities4 Mutual Funds
deals in %uyin1 and sellin1 of lar1e num%er of securities4 AMC appoints a custodian for
safe *eepin1 of these securities and for participatin1 in clearin1 system on its %ehalf4 #n
case of demateriali<ed securities( holdin1s 5ill %e held %y +epository throu1h a
+epository Participant4
Tr"s$er A'ets8
6e is responsi%le for issuin1 and redeemin1 units of mutual funds4 6e prepares
transfer documents and update investor records4
SEBI8
Securities and 2chan1e ?oard of #ndia is the re1ulator 5hich is responsi%le for
re1ulatin1 the 5or*in1 of different %odies or individual dealin1 in Securities mar*et and
projectin1 the interest of #nvestors4
NEED (OR T1E ST)DY8
The study first tries to understand the composition of the selected funds 5hich
determines the scope of performance for the funds( follo5ed %y use of ratios that are
relevant in >uantifyin1 and understandin1 the ris* and return relationships for each
mutual fund scheme under consideration4 Then a comparative analysis of the mutual fund
schemes is done to see 5hich fund has performed the %est4
This study is si1nificant to the company as it loo*s into the minute details that
differentiate the performances of funds of different companies 5ith same theme or sector
under similar mar*et conditions4 This 5ould help the company to develop4
OB<ECTIVE O( T1E ST)DY
To understand the Functions of an Asset Mana1ement Company
To understand the performances of various schemes usin1 various tools to
measure the performances4
To measure and compare the performance of selected mutual fund schemes of
different mutual fund companies4
To compare and analy<e the ris* and return of different mutual fund schemes4
To study different types of funds and its %enefits4
SCOPE O( ST)DY 7
The study 5as carried out for a period of 8: days( in 5hich the main focus 5as to
follo5 the performance of the different9different mutual fund companies and assent
mana1ement companies4 Since different companies come out 5ith similar themes in the
same season( it %ecomes crucial for the company to constantly perform 5ell so as to
survive the competition and provide ma2imum capital appreciation or return as the case
may %e4 Other than the mar*et the performance of the fund depends on the *ind of stoc*
chosen %y the fund mana1ers of the company4
The analysis is done on the performance of funds 5ith the same theme or sector
and reason out 5hy a fund performs %etter than the others in the lot
RESEARC1 MET1ODOLOGY
D"t" co##ectio8
Prim"r. D"t"8
The primary data study of this study is interaction 5ith the %ranch inchar1e of
the company4
Secod"r. d"t"
The secondary data includes 7
Pu%lished material and annual reports of mutual fund companies
Other pu%lished material of mutual funds4
Research %ased online portals4
'npu%lished sources also4
S"m!#e Pro$i#e8
The sample re>uired for the study has %een selected throu1h random samplin1 method
from the availa%le list of mutual fund schemes in the mar*et4 ?roadly the sample of C
mutual fund schemes includes e>uity funds( de%t funds and %alanced funds4
The study has ta*en three %road cate1ories of funds
>uity Funds
+e%t funds
?alanced fund
E9uit. (uds8
.4?#RLA S'" L#F J'#TH F'"+
04'T# J'#TH F'"+
Debt (uds8
.4S?# MA!"'M #"COM F'"+
046+FC 6#!6 #"TRST F'"+
B"#"ced (uds8
.4KOTAK ?AL"C+ F'"+
04#C#C# PR'+"T#AL ?ALA"C+ F'"+
Limit"tios o$ t%e Stud.8
The present study has the follo5in1 limitations
The study has %een restricted to only a fe5 schemes4 $>uity(de%t(%alanced)
The data is analy<ed for a limited period of 8 years4
The study is entirely %ased on secondary data collected from the 5e%site4
1YPOT1ESIS
6i1her the mar*et return causes hi1her fund flo54
fficient Mutual fund Mana1ers are 5ith effective investment strate1y4
LITERAT)RE REVIE+
Literature on mutual fund performance evaluation is enormous4 A fe5 research
studies that have influenced the preparation of this paper su%stantially are discussed in
this section4 Sharpe( =illiam F4 $.@CC) su11ested a measure for the evaluation of
portfolio performance4 +ra5in1 on results o%tained in the field of portfolio analysis(
economist &ac* L4 Treynor has su11ested a ne5 predictor of mutual fund performance(
one that differs from virtually all those used previously %y incorporatin1 the volatility of
a fundKs return in a simple yet meanin1ful manner4
Michael C4 &ensen $.@CB) derived a ris*9adjusted measure of portfolio
performance $&ensenIs alpha) that estimates ho5 much a mana1erIs forecastin1 a%ility
contri%utes to fundIs returns4 As indicated %y Statman $0:::)( the e S+AR of a fund
portfolio is the e2cess return of the portfolio over the return of the %enchmar* inde2(
5here the portfolio is levera1ed to have the %enchmar* inde2Is standard deviation4
S4"arayan Rao ( et4 al4( evaluated performance of #ndian mutual funds in a %ear mar*et
throu1h relative performance inde2( ris*9return analysis( TreynorIs ratio( SharpeIs ratio(
SharpeIs measure ( &ensenIs measure( and FamaIs measure4 The study used 0C@ open9
ended schemes $out of total schemes of A88) for computin1 relative performance inde24
Then after e2cludin1 funds 5hose returns are less than ris*9free returns( -/ schemes are
finally used for further analysis4 The results of performance measures su11est that most
of mutual fund schemes in the sample of -/ 5ere a%le to satisfy investorIs e2pectations
%y 1ivin1 e2cess returns over e2pected returns %ased on %oth premium for systematic ris*
and total ris*4
?ijan Roy( et4 al4( conducted an empirical study on conditional performance of
#ndian mutual funds4 This paper uses a techni>ue called conditional performance
evaluation on a sample of ei1hty9nine #ndian mutual fund schemes 4This paper measures
the performance of various mutual funds 5ith %oth unconditional and conditional form of
CAPM( Treynor9 Ma<uy model and 6enri*sson9Merton model4
The effect of incorporatin1 la11ed information varia%les into the evaluation of
mutual fund mana1ersI performance is e2amined in the #ndian conte2t4 The results
su11est that the use of conditionin1 la11ed information varia%les improves the
performance of mutual fund schemes( causin1 alphas to shift to5ards ri1ht and reducin1
the num%er of ne1ative timin1 coefficients4 Mishra( et al4( $0::0) measured mutual fund
performance usin1 lo5er partial moment4 #n this paper( measures of evaluatin1 portfolio
performance %ased on lo5er partial moment are developed4
Ris* from the lo5er partial moment is measured %y ta*in1 into account only those
states in 5hich return is %elo5 a pre9specified Ftar1et rateG li*e ris*9free rate4 Kshama
Fernandes$0::8) evaluated inde2 fund implementation in #ndia4 #n this paper( trac*in1
error of inde2 funds in #ndia is measured 4The consistency and level of trac*in1 errors
o%tained %y some 5ell9run inde2 fund su11ests that it is possi%le to attain lo5 levels of
trac*in1 error under #ndian conditions4 At the same time( there do seem to %e periods
5here certain inde2 funds appear to depart from the discipline of inde2ation4 K4
Pendara*i et al studied construction of mutual fund portfolios( developed a multi9criteria
methodolo1y and applied it to the !ree* mar*et of e>uity mutual funds4 The
methodolo1y is %ased on the com%ination of discrete and continuous multi9criteria
decision aid methods for mutual fund selection and composition4 'TA+#S multi9criteria
decision aid method is employed in order to develop mutual fundIs performance models4
!oal pro1rammin1 model is employed to determine proportion of selected mutual funds
in the final portfolios4
?ro5n and !oet<mann $.@@-) e2plored e>uity mutual fund data and found clear
evidence of relative ris*9adjusted performance persistenceL ho5ever( the persistence 5as
mostly due to funds that la1 the SMP -::( depends upon the time period o%served and is
correlated across mana1ers
Sharpe $.@CC) loo*ed at the performance of open9end mutual funds and found that to a
major e2tent the capital mar*et is hi1hly efficient( %ut there is some evidence of
persistence in performance4 &ensen $.@C/) evaluated the performance of mutual funds in
the period .@A-,.@CA and found no evidence of mana1er s*ill4
CHAPTER 3
INDUSTRY &
COMPANY PROFILE
IND)STRY PRO(ILE8 M)T)AL ()NDS8
Mutual funds 1o %ac* to the times of the 1yptians and Phoenicians 5hen they sold
shares in caravans and vessels to spread the ris* of these ventures4 The forei1n and
colonial 1overnment Trust of London of ./C/ is considered to %e the fore9runner of the
modern concept of mutual funds4 The 'SA is( ho5ever( considered to %e the Mecca of
modern mutual funds4 ?y the early 9 .@8:s >uite a lar1e num%er of close 9 ended mutual
funds 5ere in operation in the '4S4A4 Much latter in .@-A( the committee on finance for
the private sector recommended mo%ili<ation of savin1s of the middle class investors
throu1h unit trusts4 Finally in &uly .@CA( the concept too* root in #ndia 5hen 'nit Trust
of #ndia 5as set up4
INDIAN M)T)AL ()ND IND)STRY
The end of millennium mar*s 8C years of e2istence of mutual funds in this
country4 The ride throu1h these 8C years is not %een smooth4 #nvestor opinion is still
divided4 =hile some are for mutual funds others are a1ainst it4
'T# commenced its operations from &uly .@CA 4The impetus for esta%lishin1 a
formal institution came from the desire to increase the propensity of the middle and lo5er
1roups to save and to invest4 'T# came into e2istence durin1 a period mar*ed %y 1reat
political and economic uncertainty in #ndia4 =ith 5ar on the %orders and economic
turmoil that depressed the financial mar*et( entrepreneurs 5ere hesitant to enter capital
mar*et4
The already e2istin1 companies found it difficult to raise fresh capital( as
investors did not respond ade>uately to ne5 issues4 arnest efforts 5ere re>uired to
canali<e savin1s of the community into productive uses in order to speed up the process
of industrial 1ro5th4
'T# commenced its operations from &uly .@CA N5ith a vie5 to encoura1in1
savin1s and investment and participation in the income( profits and 1ains accruin1 to the
Corporation from the ac>uisition( holdin1( mana1ement and disposal of securities4N
+ifferent provisions of the 'T# Act laid do5n the structure of mana1ement( scope of
%usiness( po5ers and functions of the Trust as 5ell as accountin1( disclosures and
re1ulatory re>uirements for the Trust4
One thin1 is certain , the fund industry is here to stay4 The industry 5as one9
entity sho5 till .@/C 5hen the 'T# monopoly 5as %ro*en 5hen S?# and Can %an*
mutual fund entered the arena4 This 5as follo5ed %y the entry of others li*e ?O#( L#C(
!#C( etc4 sponsored %y pu%lic sector %an*s4 Startin1 5ith an asset %ase of Rs4 0- crore in
.@CA the industry has 1ro5n at a compounded avera1e 1ro5th rate of 0BO to its current
si<e of Rs4@:::: crore4
The period .@/C9.@@8 can %e termed as the period of pu%lic sector mutual funds
$PMFs)4 From one player in .@/- the num%er increased to / in .@@84 The party did not
last lon14 =hen the private sector made its de%ut in .@@89@A( the stoc* mar*et 5as
%oomin14
The openin1s up of asset mana1ement %usiness to private sector in .@@8 sa5
international players li*e Mor1an Stanley( &ardine Flemin1( &P Mor1an( !eor1e Soros
and Capital #nternational alon1 5ith the host of domestic players join the party4 ?ut for
the e>uity funds( the period of .@@A9@C 5as one of the 5orst in the history of #ndian
Mutual Funds4
3=== > YEAR O( T1E ()NDS
Mutual funds have %een around for a lon1 period of time to %e precise for 8C yrs
%ut the year .@@@ sa5 immense future potential and developments in this sector4 This
year si1naled the year of resur1ence of mutual funds and the re1ainin1 of investor
confidence in these MFIs4 This time around all the participants are involved in the revival
of the funds the AMCIs( the unit holders( the other related parties4 6o5ever the sole
factor that 1ave lifer to the revival of the funds 5as the 'nion ?ud1et4 The %ud1et
%rou1ht a%out a lar1e num%er of chan1es in one stro*e4 An insi1ht of the 'nion ?ud1et
on mutual funds ta2ation %enefits is provided later4
#t provided centre sta1e to the mutual funds( made them more attractive and
provides accepta%ility amon1 the investors4 The 'nion ?ud1et e2empted mutual fund
dividend 1iven out %y e>uity9oriented schemes from ta2( %oth at the hands of the investor
as 5ell as the mutual fund4 "o lon1er 5ere the mutual funds interested in sellin1 the
concept of mutual funds they 5anted to tal* %usiness 5hich 5ould mean to increase asset
%ase( and to 1et asset %ase and investor %ase they had to %e fully armed 5ith a 5hole lot
of schemes for every investor 4So ne5 schemes for ne5 #POIs 5ere inevita%le4 The >uest
to attract investors e2tended %eyond just ne5 schemes4 The funds started to re1ulate
themselves and 5ere all out on 5innin1 the trust and confidence of the investors under
the ae1is of the Association of Mutual Funds of #ndia $AMF#)
(irst P%"se > 3=?62@A8
'nit Trust of #ndia $'T#) 5as esta%lished on .@C8 %y an Act of Parliament4 #t 5as
set up %y the Reserve ?an* of #ndia and functioned under the Re1ulatory and
administrative control of the Reserve ?an* of #ndia4 #n .@B/ 'T# 5as de9lin*ed from the
R?# and the #ndustrial +evelopment ?an* of #ndia $#+?#) too* over the re1ulatory and
administrative control in place of R?#4 The first scheme launched %y 'T# 5as 'nit
Scheme .@CA4 At the end of .@// 'T# had Rs4C(B:: crores of assets under mana1ement4
Secod P%"se > 3=@A23==5 BEtr. o$ Pub#ic Sector (udsC8
.@/B mar*ed the entry of non9 'T#( pu%lic sector mutual funds set up %y pu%lic
sector %an*s and Life #nsurance Corporation of #ndia $L#C) and !eneral #nsurance
Corporation of #ndia $!#C)4 S?# Mutual Fund 5as the first non9 'T# Mutual Fund
esta%lished in &une .@/B follo5ed %y Can%an* Mutual Fund $+ec /B)( Punja% "ational
?an* Mutual Fund $Au1 /@)( #ndian ?an* Mutual Fund $"ov /@)( ?an* of #ndia $&un @:)(
?an* of ?aroda Mutual Fund $Oct @0)4 L#C esta%lished its mutual fund in &une .@/@
5hile !#C had set up its mutual fund in +ecem%er .@@:
At the end of .@@8( the mutual fund industry had assets under mana1ement of Rs4AB( ::A
crores4
T%ird P%"se > 3==524DD5 BEtr. o$ Pri,"te Sector (udsC8
=ith the entry of private sector funds in .@@8( a ne5 era started in the #ndian
mutual fund industry( 1ivin1 the #ndian investors a 5ider choice of fund families4 Also(
.@@8 5as the year in 5hich the first Mutual Fund Re1ulations came into %ein1( under
5hich all mutual funds( e2cept 'T# 5ere to %e re1istered and 1overned4 The erst5hile
Kothari Pioneer $no5 mer1ed 5ith Fran*lin Templeton) 5as the first private sector
mutual fund re1istered in &uly .@@84 The .@@8 S?# $Mutual Fund) Re1ulations 5ere
su%stituted %y a more comprehensive and revised Mutual Fund Re1ulations in .@@C4 The
industry no5 functions under the S?# $Mutual Fund) Re1ulations .@@C4 The num%er of
mutual fund houses 5ent on increasin1( 5ith many forei1n mutual funds settin1 up funds
in #ndia and also the industry has 5itnessed several mer1ers and ac>uisitions4 As at the
end of &anuary 0::8( there 5ere 88 mutual funds 5ith total assets of Rs4 .(0.(/:- crores4
The 'nit Trust of #ndia 5ith Rs4AA(-A. crores of assets under mana1ement 5as 5ay
ahead of other mutual funds4
(ourt% P%"se > sice (ebru"r. 4DD5 I (ebru"r. 4DD58
Follo5in1 the repeal of the 'nit Trust of #ndia Act .@C8 'T# 5as %ifurcated into
t5o separate entities4 One is the Specified 'nderta*in1 of the 'nit Trust of #ndia 5ith
assets under mana1ement of Rs40@( /8- crores as at the end of &anuary 0::8( representin1
%roadly( the assets of 'S CA scheme( assured return and certain other schemes4 The
Specified 'nderta*in1 of 'nit Trust of #ndia( functionin1 under an administrator and
under the rules framed %y !overnment of #ndia and does not come under the purvie5 of
the Mutual Fund Re1ulations4 The second is the 'T# Mutual Fund Ltd( sponsored %y
S?#( P"?( ?O? and L#C4 #t is re1istered 5ith S?# and functions under the Mutual Fund
Re1ulations4 =ith the %ifurcation of the erst5hile 'T# 5hich had in March 0::: more
than Rs4BC(::: crores of assets under mana1ement and 5ith the settin1 up of a 'T#
Mutual Fund( conformin1 to the S?# Mutual Fund Re1ulations( and 5ith recent mer1ers
ta*in1 place amon1 different private sector funds( the mutual fund industry has entered its
current phase of consolidation and 1ro5th4 As at the end of Septem%er( 0::A( there 5ere
0@ funds( 5hich mana1e assets of Rs4.-8.:/ crores under A0. schemes4
T.!es o$ Mutu"# (uds8
Mutual fund schemes may %e classified on the %asis of its structure and its investment
o%jective4
B. Structure8
O!e2ed (uds7
An open9end fund is one that is availa%le for su%scription all throu1h the year4
These do not have a fi2ed maturity4 #nvestors can conveniently %uy and sell units at "et
Asset 3alue $N"A3N) related prices4 The *ey feature of open9end schemes is li>uidity4
C#osed2ed (uds7
A closed9end fund has a stipulated maturity period 5hich 1enerally ran1in1 from
8 to .- years4 The fund is open for su%scription only durin1 a specified period4 #nvestors
can invest in the scheme at the time of the initial pu%lic issue and thereafter they can %uy
or sell the units of the scheme on the stoc* e2chan1es 5here they are listed4 #n order to
provide an e2it route to the investors( some close9ended funds 1ive an option of sellin1
%ac* the units to the Mutual Fund throu1h periodic repurchase at "A3 related prices4
S?# Re1ulations stipulate that at least one of the t5o e2it routes is provided to the
investor4
Iter,"# (uds7
#nterval funds com%ine the features of open9ended and close9ended schemes4
They are open for sale or redemption durin1 pre9determined intervals at "A3 related
prices4
B. I,estmet Objecti,e8
Gro&t% (uds7
The aim of 1ro5th funds is to provide capital appreciation over the medium to
lon1 term4 Such schemes normally invest a majority of their corpus in e>uities4 #t has
%een proved that returns from stoc*s( have outperformed most other *ind of investments
held over the lon1 term4 !ro5th schemes are ideal for investors havin1 a lon19term
outloo* see*in1 1ro5th over a period of time4
Icome (uds8
The aim of income funds is to provide re1ular and steady income to investors4
Such schemes 1enerally invest in fi2ed income securities such as %onds( corporate
de%entures and !overnment securities4 #ncome Funds are ideal for capital sta%ility and
re1ular income4
B"#"ced (uds7
The aim of %alanced funds is to provide %oth 1ro5th and re1ular income4 Such
schemes periodically distri%ute a part of their earnin1 and invest %oth in e>uities and
fi2ed income securities in the proportion indicated in their offer documents4 #n a risin1
stoc* mar*et( the "A3 of these schemes may not normally *eep pace( or fall e>ually
5hen the mar*et falls4 These are ideal for investors loo*in1 for a com%ination of income
and moderate 1ro5th4
Moe. M"r;et (uds7
The aim of money mar*et funds is to provide easy li>uidity( preservation of
capital and moderate income4 These schemes 1enerally invest in safer short9term
instruments such as treasury %ills( certificates of deposit( commercial paper and inter9
%an* call money4 Returns on these schemes may fluctuate dependin1 upon the interest
rates prevailin1 in the mar*et4
These are ideal for Corporate and individual investors as a means to par* their surplus
funds for short periods4
Ot%er Sc%emes8
T": S",i' Sc%emes7
These schemes offer ta2 re%ates to the investors under specific provisions of the
#ndian #ncome Ta2 la5s as the !overnment offers ta2 incentives for investment in
specified avenues4 #nvestments made in >uity Lin*ed Savin1s Schemes $LSS) and
Pension Schemes are allo5ed as deduction u;s // of the #ncome Ta2 Act( .@C.4 The Act
also provides opportunities to investors to save capital 1ains u;s -AA and -A? %y
investin1 in Mutual Funds4
Idustr. S!eci$ic Sc%emes 7
#ndustry Specific Schemes invest only in the industries specified in the offer
document4 The investment of these funds is limited to specific industries li*e #nfotech(
FMC!( and Pharmaceuticals etc4
Ide: Sc%emes8
#nde2 Funds attempt to replicate the performance of a particular inde2 such as the
?S Sense2 or the "S -:
Sector"# Sc%emes8
Sectoral Funds are those( 5hich invest( e2clusively in a specified sector4 This
could %e an industry or a 1roup of industries or various se1ments such as KAK !roup
shares or initial pu%lic offerin1s4
RISKS ASSOCIATED +IT1 M)T)AL ()NDS
#nvestin1 in mutual funds( as 5ith any security( does not come 5ithout ris*4 One
of the most %asic economic principles is that ris* and re5ard are directly correlated4 #n
other 5ords( the 1reater the potential ris* the 1reater the potential return4 The types of
ris* commonly associated 5ith mutual funds are7
M"r;et ris;8
Mar*et ris* relates to the mar*et value of a security in the future4 Mar*et prices
fluctuate and are suscepti%le to economic and financial trends( supply and demand( and
many other factors that cannot %e precisely predicted or controlled4
Po#itic"# ris;8
Chan1es in the ta2 la5s( trade re1ulations( administrated prices( etc are some of
the many political factors that create mar*et ris*4 Althou1h collectively( as citi<ens( 5e
have indirect control throu1h the po5er of our vote individually( as investors( 5e have
virtually no control4
I$#"tio ris;8
#nterest rate ris* relates to futures chan1es in interest rates4 For instance( if an
investor invests in a lon1 , term de%t mutual fund scheme and interest rates increase( the
"A3 of the scheme 5ill fall %ecause the scheme 5ill %e end up holdin1 de%t offerin1
lo5er interest rates4
Busiess ris;8
?usiness ris* is the uncertainty concernin1 the future e2istence( sta%ility( and
profita%ility of the issuer of the security4 ?usiness ris* is inherent in all %usiness ventures4
The future financial sta%ility of a company cannot %e predicted or 1uaranteed( nor can the
price of its securities4 Adverse chan1es in %usiness circumstances 5ill reduce the mar*et
price of the companyIs e>uity resultin1 in proportionate fall in the "A3 of the mutual
fund scheme( 5hich has invested in the e>uity of such a company4
Ecoomic ris;8
conomic ris* involves uncertainty in the economy( 5hich( in turn( can have an
adverse effect on a companyIs %usiness4 For instance( if monsoons fail in a year( e>uity
stoc*s of a1riculture , %ased companies 5ill fall and "A3Is of mutual funds( 5hich have
invested in such stoc*s( 5ill fall proportionately.

COMPANY PRO(ILE
INTROD)CTION ABO)T KARVY
The term -KARVY/ is derived from the initial letters of its founders ,
K 2 Mr* Kuttumb" R"o
A 2 Mr* Aj". Kum"r
R 2 Mr* R"m";ris%"
V 2 Mr* V"id.""t%"
Y 2 Mr* Yu'"d%"r
These five ener1etic and dynamic Chartered Accountants started Karvy in .@B- as Karvy
and Company4 Audit and Ta2ation activity 5as underta*en4#nitial Cash #nflo5 of Rs4
8:(:::;9 each 5as contri%uted as Capital of the Company4

T1 E KARVY CREDO
OUR CLIENTS.OUR FOCUS.
Clients are the reason for our %ein14
Personali<ed service( professional care( pro9activeness is the values that help us
nurture endurin1 relationships 5ith our clients4
RESPECT FOR THE INDIVIDUAL.
ach and every individual is an essential %uildin1 %loc* of our or1ani<ation4
=e are the *iln that hones individuals to perfection4 ?e they our employees(
shareholders or investors4 =e do so %y upholdin1 their di1nity M pride( inculcatin1 trust
and achievin1 a sensitive %alance of their professional and personal lives4
TEAM WORK.
"one of us is more important than all of us4
ach team mem%er is the face of Karvy4 To1ether 5e offer diverse services 5ith
speed( accuracy and >uality to deliver only one product7 e2cellence4 Transparency( co9
operation( invalua%le individual contri%utions for a collective 1oal( and respectin1
individual uni>ueness 5ithin a corporate 5hole( are ho5 5e deliver4
OVERVIE+
KAR3H( is a premier inte1rated financial services provider( and ran*ed amon1 the
top five in the country in all its %usiness se1ments( services over .C million individual
investors in various capacities( and provides investor services to over 8:: corporate(
comprisin1 the 5ho is 5ho of Corporate #ndia4 KAR3H covers the entire spectrum of
financial services such as Stoc* %ro*in1( +epository Participants( +istri%ution of
financial products 9 mutual funds( %onds( fi2ed deposit( e>uities( #nsurance ?ro*in1(
Commodities ?ro*in1( Personal Finance Advisory Services( Merchant ?an*in1 M
Corporate Finance( placement of e>uity( #POIs( amon1 others4 Karvy has a professional
mana1ement team and ran*s amon1 the %est in technolo1y( operations and research of
various industrial se1ments4
Our Stoc* ?ro*in1 services are 5idely net5or*ed across #ndia( 5ith the num%er
of our tradin1 terminals providin1 retail stoc* %ro*in1 facilities4 Our services have
increasin1ly offered customer oriented convenience( 5hich 5e provide to a spectrum of
investors( hi1h net 5orth or other5ise( 5ith e>ual dedication and competence4 =e offer
tradin1 on a vast platformL "ational Stoc* 2chan1e( ?om%ay Stoc* 2chan1e and
6ydera%ad Stoc* 2chan1e4 More importantly( 5e ma*e tradin1 safe to the ma2imum
possi%le e2tent( %y accountin1 for several ris* factors and plannin1 accordin1ly4 =e offer
services that are %eyond just a medium for %uyin1 and sellin1 stoc*s and shares4 #nstead
5e provide services( 5hich are multi dimensional and multi9focused in their scope4
E)ALITY POLICY
To achieve and retain leadership( Karvy shall aim for complete customer satisfaction( %y
com%inin1 its human and technolo1ical resources( to provide superior >uality financial
services4 #n the process( Karvy 5ill strive to e2ceed CustomerKs e2pectations4
E)ALITY OB<ECTIVES
As per the Juality Policy( Karvy 5ill7
?uild in9house processes that 5ill ensure transparent and harmonious
relationships 5ith its clients and investors to provide hi1h >uality of services4
sta%lish a partner relationship 5ith its investor service a1ents and vendors
that 5ill help in *eepin1 up its commitments to the customers4
Provide hi1h >uality of 5or* life for all its employees and e>uip them 5ith
ade>uate *no5led1e M s*ills so as to respond to customerKs needs4
Continue to uphold the values of honesty M inte1rity and strive to esta%lish
unparalleled standards in %usiness ethics4
Strive to %e a relia%le source of value9added financial products and services
and constantly 1uide the individuals and institutions in ma*in1 a judicious
choice of same4
Strive to *eep all sta*e9holders $shareholders( clients( investors( employees(
suppliers and re1ulatory authorities) proud and satisfied4
AC1IEVEMENTS
Amon1 the top - stoc* %ro*ers in #ndia $AO of "S volumes)
#ndiaKs "o4 . Re1istrar M Securities Transfer A1ents
Amon1 the to top 8 +epository Participants
Lar1est "et5or* of ?ranches M ?usiness Associates
#SO @::0 certified operations %y +"3
Amon1 top .: #nvestment %an*ers
Lar1est +istri%utor of Financial Products
Adjud1ed as one of the top -: #T uses in #ndia %y M#S Asia
Full Fled1ed #T driven operations

3#S#O" 0:.:
0ra%1h#+
Plan for ta*in1 the net5or* to B-: %ranches %y &une 0::@
Stoc* ?ro*in1
.:O P share in cash mar*ets
F M O dou%le the cash volumes $around CO)
Activate ?S so as to reach -O share
+epository services
To reach the "o4. position
Loo* at over .0 lace accounts %y 0:.:
Mutual Fund distri%ution
To achieve over 0-:(::: applications per month
Achieve over Rs4 .:(::: cr of e>uity assets under advise
volve into 1ettin1 trail revenues to cover %ranch %asic costs
#nstitutional des*
Reach top .: institutional %ro*ers in the country
Ma2imi<e earnin1s for each relationship %uilt %oth domestic and
international
Research
volve as a top research house for Mid cap securities
Position as a Q*no5led1e driven %ro*erI
PC! des*
volve PC! into a PMS platform
Merchant ?an*in1
volve into top - merchant %an*ers in the country to
!ain e2pertise corporate finance and MMA
Real estate investment insurance
To achieve .O share of the mar*et $8lacpolicies)
Commodities
To reach at least -O mar*et share
Provide from all %ranches
sta%lish speciali<ed commodity %ranches 5here necessary
#nternational %ranches
- more %ranches
To contri%ute .:O of our overall revenues
Mar1in fundin1
Over Rs40(::: cr4 Of corpus
Provide #PO fundin1 %oth for retail and 6"# cate1ory
0-O of the revenues throu1h this %usiness Service delivery
All #ndia call center
#nternet %ased service delivery , %ro*in1( MF( #PO etc4
ffective use of SMS and other touch points
Customer relationship mana1ement
Trainin1
!et over /:O of the team minimum dou%le >ualified
#nte1rate
Continuous trainin1 , over .-: hour per year trainin1 for every individual
#PO distri%ution
Reach 0-O volume and .-O value
"e5 initiatives ; %usiness line
Commence 8 ne5 %usiness lines as part of diversification strate1y
Mi#estoes
KARVY M)T)AL ()ND SERVICES
Mutual funds have servin1s for every%ody4 =hichever type of investor you are( you 5ill
surely 1et a mutual fund meetin1 your re>uirements4 ?ut investin1 in mutual funds is no
childIs play therefore *arvy mutual fund advisory services is there to 1uide in each and
every step of investment in mutual funds so that the dream of 5ealth creation doesnIt
turns into ni1htmares4 #ts offerin1s includes7 products of all the 88 major AMCs( research
report a%out all the e2istin1 funds as 5ell as "FOs( customi<ed mutual fund portfolios
desi1ned for individual as 5ell as institutional customers( it not only desi1n the portfolios
rather it offers continuous portfolio revision too dependin1 on chan1in1 mar*et outloo*
and evolvin1 trends( it further 1ives access to its online consolidated portfolio statement4
Thus *arvy 5ith its various offerin1s ma*es the investor feel safe inthis dynamic
environment of the #ndian financial mar*et4
Karvy Computer share mutual fund services offers investors services( distri%utor services
and client services4 #t can %e said that *arvy is dedicated to5ards providin1 >ualityservice
to all these three facets of the investment process4 Karvy %ein1 an intermediary is 5ell
re1istered 5ith the Association of Mutual Funds of #ndia $AMF#)4 KAR3H has 1ot the
re1istration no DAR" ::./E for mutual funds( 5hich is mentionedon every form4 After
the procurement of forms from various AMCs( the forms are passed on to its various
<onal and %ranch offices $as per their re>uirements) and then further processin1 is done
either directly or throu1h su%9%ro*ers4
Karvy operates throu1h its su%9 %ro*ers( associates and its e2cellent pool of o5n direct
employees4 The employees are offered salary %y *arvy 5hereas the su%9 %ro*ers and
associates 1et certain commission4 Karvy has B: %ranches and 8 franchisees in the eastern
re1ion4 All the 5or* of mutual funds is re1ulated from Rash%ehari avenue %ranch( an
e2tension of the &+R %ranch4 The main source of earnin1 for KAR3H is the %ro*era1e
offered %y the various AMCs *no5n as pay9in4 The amount offered may vary from AMC
to AMC4 Also( the franchisees have to pay a certain amount every month4 "o5 *arvy
also pay a certain amount to the su% %ro*ers and associates *no5n as pay9out4 The payout
is decided accordin1 to the procurement done %y them4
Products "d Ser,ices
?ac*ed %y a predominantly service oriented culture and also capitalisin1 on its
e2perience of handlin1 a variety of customers( they offer a plethora of financial products
throu1h their retail arm , KAR3H9T6 F#"APOL#S4 The %usiness of distri%ution of
financial products includes Pu%lic #ssue of %onds( e>uity shares( fi2ed deposits of
corporate( distri%ution of units of various Mutual Funds( a %as*et of lia%ility products
comprisin1 personal loans( car loans( housin1 loans and loans a1ainst shares and as the
sunrise mar*et of #nsurance products4 Apart from these products( NThe FinapolisN also
offers personal ta2 plannin1 advice( share %ro*in1 and demat services4 All these products
reach the ultimate customer throu1h their 5ide spread net5or* of %ranches and retail
outlets4
TOOLS )SED (OR DATA ANALYSIS
Too#s F Met%ods8
Retur
A return is a measurement of ho5 much an investment has increased or decreased
in value over any 1iven time period4 #n particular( an annual return is the percenta1e %y
5hich it increased or decreased over any t5elve9month period4
(ormu#"7
$P.9p:)
P:
St"d"rd De,i"tio8
The de1ree that a sin1le value in a 1roup of values varies from the mean $avera1e)
of the distri%ution4 Standard deviation is a statistical measure that uses past performance
of an investment or portfolio to determine the potential ran1e of future performance and
assess the pro%a%ility of that performance4 Standard deviations can %e calculated for an
individual security or for the entire portfolio
Bet"8
#t descri%es the relationship %et5een the stoc*Is return and the inde2 returns4 The %eta
value may %e interpreted in the follo5in1 manner( Qa .O chan1e in "ifty inde2 5ould
cause a .4:A0O $%eta) chan1e in the particular fund4 #t is the slope of characteristic
re1ression line4
#t si1nifies that a fund 5ith a %eta of more than . 5ill rise more than the mar*et and also
fall more than mar*et4 Thus( if one li*es to %eat the mar*et on the upside( it is %est to
invest in a hi1h9%eta fund4 ?ut one must *eep in mind that such a fund 5ill also fall more
than the mar*et on the 5ay do5n4 So( over an entire cycle( returns may not %e much
hi1her than the mar*et4
Similarly( a lo59%eta fund 5ill rise less than the mar*et on the 5ay up and lose less on
the 5ay do5n4 =hen safety of investment is important( a fund 5ith a %eta of less than
one is a %etter option4 Such a fund may not 1ain more than the mar*et on the upside( %ut
it 5ill protect returns %etter 5hen mar*et falls
= nxy (x)( y)
nx
2
(x)
2
=here(
n , "um%er of days
2 , Returns of the inde2
y , Returns of the fund
Tre.orGs R"tio8
The Treynor Ratio( named after &ac* L4 Treynor( one of the fathers of modern
portfolio theory( helps analy<e returns in relation to the mar*et ris* of the fund4 The
Ratio( also *no5n as the re5ard9to9volatility ratio( provides a measure of performance
adjusted for mar*et ris*4 6i1her the Treynor Ratio( the %etter the performance under
analysis4
#t is a ratio that helps the portfolio mana1ers to determine the e2cess return 1enerated as
the difference %et5een the fundIs return and the ris* free return4 The e2cess return to %eta
ratio measures the additional return on a fund per unit of systematic ris*4 Ran*in1 of the
funds is done %ased on this ratio4
T = R RFR

=here(
R , Return on investment4
RFR , Ris* Free Return
S%"r!eGs R"tio8
SharpeIs ratio is similar to treynorIs ratio the difference %ein1( instead of %eta
here 5e ta*e standard deviation4 As standard deviation represents the total ris*
e2perienced %y the fund( it reflects the returns 1enerated %y underta*in1 all possi%le ris*s4
A hi1her SharpeIs ratio is %etter as it represents a hi1her return 1enerated per unit of ris*4
S = R RFR

<ese R"tio B<RC8
A ris*9adjusted performance measure that represents the avera1e return on a
portfolio over and a%ove that predicted %y the capital asset pricin1 model $CAPM)( 1iven
the portfolioKs %eta and the avera1e mar*et return4 This is the portfolioKs alpha4 #n fact( the
concept is sometimes referred to as N&ensenKs alpha4N

R


&ensen Ratio $&R) S 99999999999999999

(
CALC)LATION O( NAV
The most important part of the calculation is the valuation of the assets o5ned %y
the fund4 Once its is calculated( the "A3 is simply the net value of assets divided %y the
num%er of units outstandin14 The detailed methodolo1y for the calculation of the asset
value is 1iven %elo54
Asset value S Sum of mar*et value of shares;de%entures
Pli>uid assets;cash held( if any
Pdividend;interest accrued
Amount due on unpaid assets 2penses accrued %ut not paid
Det"i#s o t%e "bo,e items8
For li>uid shares;de%entures( valuation is done on the %asis of the last or closin1
mar*et price on the principal e2chan1e 5here the security is traded4
For li>uid and unlisted and;or thinly traded shares;de%entures( the value has to %e
estimated4 For shares( this could %e the %oo* value per share or an estimated mar*et price4
#f suita%le %enchmar*s are availa%le4 Fore de%entures and %onds( value is estimated on
the %asis of yields of compara%le li>uid securities after adjustin1 for illi>uidity4
The value of fi2ed interest %earin1 securities moves in a direction opposite to
interest rate chan1es valuation of de%entures and %onds is a %i1 pro%lem since most of
them are unlisted and thinly traded4 This 1ives considera%le lee5ay to the AMCIs on
valuation and some of the AMCIs are %elieved to ta*e advanta1e of this and adopt
fle2i%le valuation policies dependin1 on the situation4
#nterest is paya%le on de%entures;%onds on periodic %asis say every C months4 ?ut(
5ith every passin1 day( interest is said to %e accrued( at the daily interest rate( 5hich is
calculated %y dividin1 the periodic interest payment 5ith the num%er of days in each
period4
Thus( accrued interest on a particular day is e>ual to the daily interest rate
multiplied %y the num%er of days since the last interest payment date4
'sually( dividends are proposed at the time of annual 1eneral meetin1 and
%ecome due on the record date4 There is a 1ap %et5een the dates on 5hich it %ecomes due
and the actual payment date4 #n the immediate period( it is deemed to %e FAccruedG4
2penses includin1 mana1ement fees( custody char1es etc4 are calculated on daily %asis4
E9uit. (uds8
BIRLA S)N LI(E EE)ITY ()ND8
I,estmet Objecti,e8
An open9ended 1ro5th scheme 5ith the o%jective of lon1 term 1ro5th of capital( throu1h
a portfolio 5ith a tar1et allocation of @:O e>uity and .:O de%t and money mar*et
securities4
ASSET ALLOCATION
EE)ITY =7*?A
DEBT 6*55
MONEY MARKET 2
I,estmet I$orm"tio
Fund type Open9nded
#nvestment Plan !ro5th
Asset Si<e $Rs cr) BA@4@C
Min 4#nvestment Rs -(:::
Last +ividend "4A4
#nception +ate
A'! 0B(.@@/
Bir#" Su #i$e E9uit. (ud > Gro&t%
Dat# SFP
CNH
NI(TY
R#t'r%
2(
23 R#t'r%
4(
43 24 4546 4546(3
01)!ec)
0*
+,*+.-
01).an)
0-
3033./
0
13.0,, 110.1+ 13./ 11-.0- 110.0*/ 3.++3 10.3*1
01)A2r)
0-
30,0.3
0
0.**, 0.1*/ )1 /- ),.+0+ )
11.11
1
+-0.0/-
03)No3)
0-
/0,3.- /-.13 +/13.1
0
10., 0110.3
,
311/.++ ,0./+
3
/+*0.1,
*
0/).an)
10
0+3+.+ 1/.,/3 +1/./1
1
1, +0, +3/.+** 0.*+0
3
33.-01
01)A2r)
10
0+-0.0 1.11/ 1.+/ 0.0 0.+0 0.001 )-.,11 -3.,//
01)No3)
10
,111.0
0
10.,3+ +//.30
-
1,.0 +1+.+0 +01.-+ ,.3+3 3-.--
03).an)
11
,101., 0.,0/ 0./+1 )3.+ 10.+/ )+.0-+ )
13.31
11*.*//
1
01)A2r)
11
0*+,.0
0
)0.3*/ +*.-*1 )-.- -*.01 03.3 )
+0.01
1
/03.*00
01)No3)
11
0+01.-
0
)-.101 -0.0*+ )10.3 10,.0- 100./30 )
+0./1
1
/1-.301
4otal 1-.-- 31,-.1
,
-1., ,,*,.1
,
/0+*.+,
3
010/./*
1
CALC)LATION O( ABOVE TABLE
Bet" A#$" St"d"rd
De,i"tio
S%"r!e r"tio BSRC Tre.or
R"tio
BTR
<ese
R"tio
B<RC
3*73D 25*464 47*4?? D*D4? D*66@ 24*36A
Note BI %",e t";e R( bec%m"r; =*7 t%e $i:ed de!osit o$ b"; iterest0 t%e d".s
dur"tio is 5 .e"rC
)TI E9uit. (ud > Gro&t%8
#nvestin1 at least /:O of its funds in e>uity and e>uity related instrument 5ith
medium to hi1h ris* profile and up to 0:O in de%t and money mar*et instruments 5ith
lo5 to medium ris* profile4
ASSET ALLOCATION
EE)ITY @DI
DEBT 4DI
MONEY MARKET 2
I,estmet I$orm"tio
Fund type Open9nded
#nvestment Plan !ro5th
Asset Si<e $Rs cr) .@A048A
Min 4#nvestment Rs -(:::
Last +ividend "4A4
#nception +ate
May ./(.@@0
)TI E9uit. (ud > Gro&t%
Dat#
SFP CNH
NI(TY
R#t'r%2
(
23 R#t'r%4
(
43 24 4546 4546(3
:.9+ec9
:/
0C/04@:
:.9&an9
:@
8:884A- .84:CC .B:4B0 @4- @:40- .0A4.0B 9:4/8 :4C//@
:.9Apr9
:@
8:C:48- :4//C :4B/A :4:: :4:: :4:: 9.:488 .:C4B/:/
:89"ov9
:@
A-C84@ A@4.8 0A.84B- C:4. 8C.04:. 0@-04B.8 A@4CB 0ACB4.:/
:A9&an9
.:
-08040 .A4CA8 0.A4A.B .A40 0:.4CA 0:B4@8 84/B .A4@BC
:.9Apr9
.:
-0@:4- .4..A .40A 9.40 .4AA 9.488C 9..4-8 .804@A
:.9"ov9
.:
C..B4-- .-4C80 0AA48-@ 0.4. AA-40. 80@4/8 .:4BB ..-4@@
:89&an9
..
C.-B4C :4C-A :4A0B :40 :4:A :4.8:/ 9.:4.8 .:04C.C
:.9Apr9
..
-/0C4:- 9-48/A 0/4@/B 9-4/ 884CA 84.00B 9.C4.8 0C:4.BC
:.9"ov9
..
-0-B4@- 9@4B-. @-4:/0 9-4. 0C4:. A@4B8 9.-4A 08/4:/A
Total B@4@@ 8.C@4BC @8 AA.:40A 8C@A48- 8A8@40/C
CALC)LATION O( ABOVE TABLE
Bet" A#$" St"d"rd
De,i"tio
S%"r!e r"tio BSRC Tre.or
R"tio
BTR
<ese
R"tio
B<RC
3*3?? D*D4= 3=*76@ D*D64 D*A36 2D*D46

Note BI %",e t";e R( bec%m"r; =*7 t%e $i:ed de!osit o$ b"; iterest0 t%e d".s
dur"tio is 5 .e"rC
Debt (ud
SBI M"'um Icome (ud8
I,estmet Objecti,e8
To provide the investors an opportunity to earn( in accordance 5ith their
re>uirements throu1h capital 1ains or throu1h re1ular dividends( returns that 5ould %e
hi1her than the returns offered %y compara%le investment avenues throu1h investment in
de%t M money mar*et securities4
ASSET ALLOCATION
EE)ITY A?*AAI
DEBT 4*A3I
MONEY MARKET 4D*74I
I,estmet I$orm"tio
Fund type Open9nded
#nvestment Plan !ro5th
Asset Si<e $Rs cr) -:4B8
Min 4#nvestment Rs 0(:::
Last +ividend "4A4
#nception +ate
"O3 8:(.@@/
Dat# SFP
CNH
NI(TY
R#t'r%2( 23 R#t'r%
4(
43 24 4546 4546(3
01)!ec)0* +,*+.-
01).an)0- 3033./
0
13.0,, 110.1+ 13./ 11-.0- 110.0*/ 3.++3 10.3*1
01)A2r)0- 30,0.3
0
0.**, 0.1*/ )1 /- ),.+0+ )
11.111
+-0.0/-
03)No3)0- /0,3.- /-.13 +/13.1
0
10., 0110.3
,
311/.++ ,0./+3 /+*0.1,
*
0/).an)10 0+3+.+ 1/.,/3 +1/./1
1
1, +0, +3/.+** 0.*+03 33.-01
01)A2r)10 0+-0.0 1.11/ 1.+/ 0.0 0.+0 0.001 )-.,11 -3.,//
01)No3)10 ,111.0
0
10.,3+ +//.30
-
1,.0 +1+.+0 +01.-+ ,.3+3 3-.--
03).an)11 ,101., 0.,0/ 0./+1 )3.+ 10.+/ )+.0-+ )
13.311
11*.*//
01)A2r)11 0*+,.0
0
)0.3*/ +*.-*1 )-.- -*.01 03.3 )
+0.011
/03.*00
01)No3)11 0+01.- )-.101 -0.0*+ )10.3 10,.0- 100./30 ) /1-.301
0 +0./11
4otal 1-.-- 31,-.1
,
-1., ,,*,.1
,
/0+*.+,3 010/./*
1
CALC)LATION O( ABOVE TABLE
Bet" A#$" St"d"rd
De,i"tio
S%"r!e r"tio BSRC Tre.or
R"tio
BTR
<ese
R"tio
B<RC
3*73D 25*464 47*4?? D*D4? D*66@ 24*36A

Note BI %",e t";e R( bec%m"r; =*7 t%e $i:ed de!osit o$ b"; iterest0 t%e d".s
dur"tio is 5 .e"rC
1D(C 1IG1 INTEREST ()ND8
I,estmet Objecti,e8
To 1enerate income %y investin1 in a ran1e of de%t and money mar*et instruments
of various maturity dates 5ith a vie5 to ma2imi<e income 5hile maintainin1 the
optimum %alance of yield( safety and li>uidity
ASSET ALLOCATION
EE)ITY 2
DEBT @4*57
MONEY MARKET ?*=5
I,estmet I$orm"tio
Fund type Open9nded
#nvestment Plan !ro5th
Asset Si<e $Rs cr) @@4C8
Min 4#nvestment Rs -(:::
Last +ividend "4A4
#nception +ate
MARC60B(.@@B
Dat# SFP
CNH
NI(TY
R#t'r%2( 23 R#t'r%
4(
43 24 4546 4546(3
01)!ec)0* +,*+.-
01).an)0- 3033./
0
13.0,, 110.1+ 3./ 11.0, //./+/ 0.-,1 0.-30
01)A2r)0- 30,0.3
0
0.**, 0.1*/ 1+.0 10,.+0 11.010 10.0,1 101.3//
03)No3)0- /0,3.- /-.13 +/13.1
0
)0.- 3/.*1 )+*-.*,1 )*.333 ,-./3*
0/).an)10 0+3+.+ 1/.,/3 +1/./1
1
3./ 11.0, /-.1*+ 0.-,1 0.-30
01)A2r)10 0+-0.0 1.11/ 1.+/ 0.- 0.*1 1.00+ )1.033 +.300
01)No3)10 ,111.0
0
10.,3+ +//.30
-
3.1 -.,1 /*./0 0.,,1 0.///
03).an)11 ,101., 0.,0/ 0./+1 1.3 1.,- 0.*00 )1.133 1.+*3
01)A2r)11 0*+,.0
0
)0.3*/ +*.-*1 1.1 +.*- )-.10+ )0.133 0.031
01)No3)11 0+01.-
0
)-.101 -0.0*+ 1.0 +.+0 )1/.,+, )0.-33 0.*10
4otal 1-.-- 31,-.1 +1.- +31./3 )10*.0,+ 11*.13,
,
CALC)LATION O( ABOVE TABLE
Bet" A#$" St"d"rd
De,i"tio
S%"r!e r"tio BSRC Tre.or
R"tio
BTR
<ese
R"tio
B<RC
D*A4D 25*=?7 6*66 23*7=3 2=*@37 7*7D?

Note BI %",e t";e R( bec%m"r; =*7 t%e $i:ed de!osit o$ b"; iterest0 t%e d".s
dur"tio is 5 .e"rC
BALANCED ()ND
KOTAK BALANCED ()ND8
I,estmet Objecti,e8
To achieve 1ro5th %y investin1 in e>uity M e>uity related instruments( %alanced
5ith income 1eneration %y investin1 in de%t M money #nvestment mar*et instruments4
ASSET ALLOCATION
EE)ITY ??*7@
DEBT 35*A6
MONEY MARKET 2
I,estmet I$orm"tio
Fund type Open9nded
#nvestment Plan !ro5th
Asset Si<e $Rs cr) A84/B
Min 4#nvestment Rs -(:::
Last +ividend "4A4
#nception +ate
"O3 0@(.@@@
KOTAK BALANCED ()ND
Dat#
SFP
CNH
NI(TY
R#t'r%2( 23 R#t'r%
4(
43 24 4546 4546(3
01)!ec)0* +,*+.-
01).an)0- 3033./
0
13.0,, 110.1+ 1., 01.1, --.301 1.31* 1.*-*
01)A2r)0- 30,0.3
0
0.**, 0.1*/ )3.1 13.,- )3.+1* )-.-++ -*.//
03)No3)0- /0,3.- /-.13 +/13.1
0
/0.0 1,/0.+
0
1-*-.1,0 3/.+1* 111/.-*
1
0/).an)10 0+3+.+ 1/.,/3 +1/./1
1
11., 13/.0, 1,-.*0* 0.31* +*.-++
01)A2r)10 0+-0.0 1.11/ 1.+/ 0.+ 0./0 0.+++ ),.0++ 3,.+,
01)No3)10 ,111.0
0
10.,3+ +//.30
-
1/.+ +10.,/ ++1.-1/ 1.-1* ,3.,/
03).an)11 ,101., 0.,0/ 0./+1 )+.3 0.+- )1.00/+ )*.0++ 1+.,+
01)A2r)11 0*+,.0
0
)0.3*/ +*.-*1 )3.1 13.,- 1-.-+0 )-.-++ -*.//,
01)No3)11 0+01.- )-.101 -0.0*+ )*./ 10.0, -+1.1// ) +13.*0+
0 1/.,++
4otal 1-.-- 31,-.1
,
0, +131./
*
3/+3./0 11*-.00
-
CALC)LATION O( ABOVE TABLE
Bet" A#$" St"d"rd
De,i"tio
S%"r!e r"tio BSRC Tre.or
R"tio
BTR
<ese
R"tio
B<RC
3*3@= 26*566 36*D=@ 2D*454 24*A7? 25*?75

Note BI %",e t";e R( bec%m"r; =*7 t%e $i:ed de!osit o$ b"; iterest0 t%e d".s
dur"tio is 5 .e"rC
ICICI PR)DENTIAL BALANCED ()ND8
#nvestin1 at least C@48/ Oof its funds in e>uity and e>uity related instrument 5ith
medium to hi1h ris* profile and up to 0B4B-O in de%t and money mar*et instruments 5ith
lo5 to medium ris* profile.
ASSET ALLOCATION
EE)ITY ?=*5@
DEBT 4A*A7
MONEY MARKET 2
I,estmet I$orm"tio
Fund type Open9nded
#nvestment Plan !ro5th
Asset Si<e $Rs cr) 80-40.
Min 4#nvestment Rs -(:::
Last +ividend "4A4
#nception +ate
OCT B(.@@@
ICICI PR)DENTIAL BALANCED ()ND8
Dat#
SFP
CNH
NI(TY
R#t'r%2( 23 R#t'r%
4(
43 24 4546 4546(3
01)!ec)0* +,*+.-
01).an)0- 3033./
0
13.0,, 110.1+ 1+./ 103.1, 1,+0.1*/ /.+/0 1*.0+0
01)A2r)0- 30,0.3
0
0.**, 0.1*/ )1.* 3.+/ )1.0-/ )-.-00 --.10+
03)No3)0- /0,3.- /-.13 +/13.1
0
3,.* 130/.+
/
1*01.-*/ +*.,/0 *+0.03,
0/).an)10 0+3+.+ 1/.,/3 +1/./1
1
10.0 110.+0 103.101 +.3/0 0./--
01)A2r)10 0+-0.0 1.11/ 1.+/ 3.3 10.*- 3.,1, )/.*00 +3.011
01)No3)10 ,111.0
0
10.,3+ +//.30
-
1/.0 +10.+0 ++,.,,/ ,.3/0 /0.+0-
03).an)11 ,101., 0.,0/ 0./+1 )0.1 0.01 )0.0,0/ )*.+00 ,*.1/0
01)A2r)11 0*+,.0
0
)0.3*/ +*.-*1 )+./ 0.1, 1+.-+1 )
10.000
111./0*
01)No3)11 0+01.- )-.101 -0.0*+ 0.+ 0.0/ )1.-00 )1.-00 ,3.+*+
0
4otal 1-.-- 31,-.1
,
13./ 1*/*./
/
3*+1.010 1+/-.*+
+
CALC)LATION O( ABOVE TABLE
Bet" A#$" St"d"rd
De,i"tio
S%"r!e r"tio BSRC Tre.or
R"tio
BTR
<ese
R"tio
B<RC
3*4@@ 25*4=3 33*A@6 2D*336 23*D66 24*777

Note BI %",e t";e R( bec%m"r; =*7 t%e $i:ed de!osit o$ b"; iterest0 t%e d".s
dur"tio is 5 .e"rC
COMPARISION ON OVERALL SIH M)T)AL ()NDS
F'"+ "AM Sharpe
Ratio
Ran* &ensen
Ratio
Ran* Treynor
Ratio
Ran*
?irla Sun Life >uity
Fund
:4:0C 0
TT
904.AB A
TTTT
:4AA/ 0
TT
'T# >uity Fund :4:A0 .
T
9:4:0A 8
TTT
:4B.A .
T
S?# Ma1num #ncome Fund 904:BA C
TTTTT
T
0B4:: .
T
9.C04:A. C
TTTTTT
6+FC 6i1h #nterest Fund 9.4-@. -
TTTTT
-4-:C 0
TT
9@4/.- -
TTTTT
KOTAK ?alanced Fund 9:4..A 8
TTT
904--- -
TTTTT
9A4:AA A
TTTT
#C#C# Prudential ?alanced 9:4080 A 984C-8 C 904B-C 8
Fund TTTT TTTTTT TTT
I$ereces
For all the si2 funds(three types of ratios are calculated and ran*ed accordin1ly4
Accordin1 to Sharpe Ratio and Treynors Ratio 'T# J'#TH F'"+ is ran*ed
first and ?#RLA S'" L#F J'#TH F'"+ is ran*ed second4
#n &ensen Ratio S?# MA!"'M #"COM F'"+ ran*ed first and 6+FC 6#!6
#"TRST F'"+ ran*ed second4
CHAPTER 5
FINDINGS
SUGGESTIONS
CONCLUSION
(INDINGS
There is more volatility in the "#FTH #"+U4
J'#TH fund sho5ed a 1ood performance and 1ave ma2imum return 5ith
minimum ris*4
+?T F'"+ and ?ALA"C+ F'"+ sho5ed a poor performance durin1 the
previous years4
Comparin1 the overall returns and ris* of all the funds 'T# J'#TH F'"+ and
?#RLA S'" L#F J'#TH F'"+ are favora%le to invest4
#n case of ?ALA"C+ Fund( the mar*et is not performin1 sound %alanced
schemes also 1ave ne1ative returns4All the funds sho5n poor performance due to
the overall mar*et indices4
Mutual funds provide the various %enefits to the investor( such as Li>udity(
3ariety of schemes( fle2i%ility of s5itchin1 and ta2 savin1s4
S)GGESTIONS

The study has made an attempt to prove that mere returns of a fund or the past
performance is not 1ood enou1h to ma*e a sound decision on future investments4
There is a need to understand various availa%le tools of comparative analysis and
their si1nificance in ma*in1 an investment decision4
The tools help in analy<in1 the consistency of performance of the funds over a
period of time4
#t is advisa%le to prefer those funds 5hich ma2imi<e the return and minimi<e the
ris*4
#nvestor should evaluate the ris* and return of the mutual fund %efore investin14

CONCL)SION
The project says that the investment has to ta*e to those funds 5hich are doin1
5ell in the mar*et4 The fund returns should %e hi1h 5hen compared to the other other
fund and inde2 returns4 The investor has to *no5 the o%jective of the investment( so
accordin1 to it he has to 1o for the investment4
Some companies 1ive more returns 5ith more ris* and some other funds 5ill
1ive moderate returns 5ith moderate ris*4 The investor has to *eep the funds for a lon1
period of time( and also the investor has to *no5 the restriction over the AMF# re1ulation
on the funds( the e2penditure ratio and the ta2es 5hich are loaded on the funds4
BIBLIOGRAP1Y
BOOK RE(ERENCE
Security Analysis and Portfolio Mana1ement ( Punithavathy Pandian( p1 7.-:(A.04
Financial Mana1ement (Prasanna Chandra ( TATA MC !ra5 6ill( -
th
edition ( p17
.0@(.AA(.C0(.CC(-804
Fundamentals of #nvestment ( !ordon( Ale2ander ( =illiam F4 Sharpe(8
rd
edition (p17
-@/(-@@
?er*( &4 ?4 and !reen( R4 C4 $0::A)( Mutual fund flo5s and performance in rational
mar*ets( &ournal of Political
conomy ..0$C)( .0C@,.0@-
Websites
5554mutualfundsindia4com
5554moneycontrol4com
5554AMF#india4com
5554s%imf4com
DECLARATION
I hereby declare that this Project Report titled Comparative Analysis Of Mutual Funds
Schemes submitted by me to the Department of Business Management, Kottam College of
Engineering, is a bonafide work undertaken by me and it is not submitted to any other University or
Institution for the award of any degree/diploma/certificate or published any time before.
Name and Address of the Student Signature of the Student
34P4 Shalini &ais5al(
64"o7 89.:/;0(
Santhosh "a1ar(
Kurnool4
Date:
CERTI(ICATE
This is to certify that the Project Report titled Comparative Analysis Of
Mutual Fund Schemes submitted in partial fulfillment for the award of the
Degree of Master of Business Administration (MBA) was carried out by V.P.
Shalini Jaiswal under my guidance. This has not been submitted to any other
ni!ersity or "nstitution for the award of any degree#diploma#certificate.
Signature of the Super!isor

Date:
Place: Chinnatekuru.
ABSTRACT
This Project e2amines the relationship %et5een performance and ris* e2posure for
mutual funds4 #t aims to find out the performance of mutual funds and to ma*e ri1ht
investment decision for ma2imi<ation of returns and minimi<ation of ris*4 And it also
e2plains the %asic characteristics and types of mutual funds4
=hile analy<in1 or interpretation of data( statistical techni>ues li*e ?eta( Standard
deviation( Sharpe ratio( Treynor ratio( &ensen ratio have %een used4
Finally( the findin1s and su11estions 5ere 1iven to the investors %ased upon the
data collected( 5hich in turn help them to ta*e 5ise decisions to increase returns and
reduce the ris* %y ma*in1 suita%le investment4
The findin1s are consistent and atleast some investors are sophisticated enou1h to
reco1ni<e the ris* level of funds and adjust their learnin1 and investments accordin1ly 4
ACKNO+LEDGEMENT
# 5ould li*e to than* KARVY STOCK BROKING LIMITED( for 1ivin1 me
the opportunity to underta*e project 5or* in their or1ani<ation4 # 5ould li*e e2press my
sincere than*s to all the employees of KARVY STOCK BROKING LIMITED( for
providin1 the necessary information and also constant 1uidance durin1 project 5or*4
# am 1rateful to Mr*R",i Kum"r( trainin1 coordinator "t KARVY STOCK
BROKING LIMLTED( for 1uidin1 me to 5or* on the project titled -Com!"r"ti,e
A"#.sis O$ Mutu"# (ud Sc%emes/*
# 5ould li*e to than* Sri* TVS* Aru Murt%.0 Principal( for his assistance and
support4
# am than*ful to Mr* M* Do&#"t% A%"mm"d ( faculty and 1uide for his valua%le
1uidance throu1hout this project 5or*4
CONTENTS
C1APTER 23
#ntroduction
"eed of the Study @
O%jectives of the Study @
Research Methodolo1y .:
Limitations of the Study .0
C1APTER 24
Revie5 of Literature .A
C1APTER 25
#ndustry Profile .B
Company Profile 0-
C1APTER 26
+ata Analysis and #nterpretation 8A
C1APTER 27
Findin1s -B
Su11estions -/
Conclusions -@
BIBLIOGRAP1Y C.
CHAPTER 1
INTRODUCTION
INTROD)CTION O( M)T)AL ()ND
A mutual fund is a form of collective investment4 #t is a pool of money collected
from various investors 5hich is invested accordin1 to the stated investment
o%jective4 The fund mana1er is the person 5ho invests the money in different
types of securities accordin1 to the predetermined o%jectives4 The portfolio of a
mutual fund is decided ta*in1 into consideration this investment o%jective4 Mutual
fund investors are li*e shareholders and they o5n the fund4 The income earned
throu1h these investments and the capital appreciation reali<ed %y the scheme is
shared %y its unit holders in proportion to the num%er of units o5ned %y them4
The value of the investments can 1o up or do5n( chan1in1 the value of the
investors holdin14 Mutual funds are one of %est investments created %ecause they
are very cost efficient and very easy to invest
Source7 5554amfiindia4com

The investment in securities throu1h mutual funds is spread across 5ide ran1e of
industries and sectors and thus the ris* is reduced4 +iversification reduces the ris*
%ecause all stoc*s may not move in the same direction at the same time4 3arious fund
houses issue units to the investors in accordance 5ith the >uantum of money invested %y
them4 #nvestors of mutual funds are *no5n as unit holders4
#n #ndia a mutual fund is re>uired to %e re1istered 5ith Securities 2chan1e ?oard
of #ndia DS?#E 5hich re1ulates the securities mar*et4
MEANING8
Mutual fund is an in investment that pools to1ether funds from investors and
invest the money in stoc*s( %onds( short ,term money9mar*et instruments( or other
securities4An investor can participate in the mutual funds %y %uyin1 the units of the fund4
A diversified pool of assets( 5here the funds have %een invested ( %ac*s each unit4
Securities 1ive small investors access to a 5ell diversified portfolio of e>uities(
%onds and other securities4 The main appeal of mutual fund is that smaller investors can
receive the same e2pertise and purchasin1 po5er as the lar1e institutions4 #nvestors 5ho
%uy Mutual fund need only %e concerned 5ith the >uality and lon1 term performance of
the fund4
DE(INITIONS8
The S?#( .@@0 defines a Mutual Fund as 7 FA fund esta%lished in the form of a
Trust %y a sponsor to raise monies %y the trustees throu1h the sale of units to the pu%lic
under one to more schemes9for investin1 in securities in accordance 5ith these
re1ulations4G
Accordin1 to the a%ove definition( a mutual fund in #ndia can raise resources
throu1h sale of units to the pu%lic4 #t can %e set up in the form of a Trust under the #ndian
Trust Act4
Characteristics of a Mutual Fund
#nvestors purchase mutual funds shares from the fund itself $or throu1h a
%ro*er)(%ut are not a%le to purchase the shares from other investors on a
secondary mar*et4
Professional mana1ers mana1e the affairs for a fee4
The funds are invested in a portfolio of mar*eta%le
Securities( reflectin1 the investment o%jective4
The investment portfolios of mutual fund typically mana1ed %y separate entities
*no5n as F#nvestment AdvisersG4
The o5nership is in the hands of the investors 5ho have pooled in their funds4

ADVANTAGES O( M)T)AL ()ND
Pro$essio"# M""'emet
Mutual Funds provide the services of e2perienced and s*illed professionals(
%ac*ed %y a dedicated investment research team that analyses the performance and
prospects of companies and selects suita%le investments to achieve the o%jectives of the
scheme4
Di,ersi$ic"tio
Mutual Funds invest in a num%er of companies across a %road cross9section of
industries and sectors4 This diversification reduces the ris* %ecause seldom do all stoc*s
decline at the same time and in the same proportion4 Hou achieve this diversification
throu1h a Mutual Fund 5ith far less money than you can do on your o5n4
Co,eiet Admiistr"tio
#nvestin1 in a Mutual Fund reduces paper5or* and helps you avoid many
pro%lems such as %ad deliveries( delayed payments and follo5 up 5ith %ro*ers and
companies4 Mutual Funds save your time and ma*e investin1 easy and convenient4
Retur Poteti"#
Over a medium to lon19term( Mutual Funds have the potential to provide a hi1her
return as they invest in a diversified %as*et of selected securities4
Lo& Costs
Mutual Funds are a relatively less e2pensive 5ay to invest compared to directly
investin1 in the capital mar*ets %ecause the %enefits of scale in %ro*era1e( custodial and
other fees translate into lo5er costs for investors4
Li9uidit.
#n open9end schemes( the investor 1ets the money %ac* promptly at net asset
value related prices from the Mutual Fund4 #n closed9end schemes( the units can %e sold
on a stoc* e2chan1e at the prevailin1 mar*et price or the investor can avail of the facility
of direct repurchase at "A3 related prices %y the Mutual Fund4
Tr"s!"rec.
Hou 1et re1ular information on the value of your investment in addition to disclosure on
the specific investments made %y your scheme( the proportion invested in each class of
assets and the fund mana1erIs investment strate1y and outloo*4
(#e:ibi#it.
Throu1h features such as re1ular investment plans( re1ular 5ithdra5al plans and
dividend reinvestment plans( you can systematically invest or 5ithdra5 funds accordin1
to your needs and convenience4
A$$ord"bi#it.
#nvestors individually may lac* sufficient funds to invest in hi1h91rade stoc*s4 A mutual
fund %ecause of its lar1e corpus allo5s even a small investor to ta*e the %enefit of its
investment strate1y4
C%oice o$ Sc%emes
Mutual Funds offer a family of schemes to suit your varyin1 needs over a lifetime4
+e## Re'u#"ted
All Mutual Funds are re1istered 5ith S?# and they function 5ithin the provisions of
strict re1ulations desi1ned to protect the interests of investors4 The operations of Mutual
Funds are re1ularly monitored %y S?#4
DISADVANTAGES O( M)T)AL ()ND
Costs Des!ite Ne'"ti,e Returs
#nvestors must pay sales char1es( annual fees( and other e2penses $5hich 5eIll
discuss %elo5) re1ardless of ho5 the fund performs4 And( dependin1 on the timin1 of
their investment( investors may also have to pay ta2es on any capital 1ains distri%ution
they receive even if the fund 5ent on to perform poorly after they %ou1ht shares4
L"c; o$ Cotro#
#nvestors typically cannot ascertain the e2act ma*e9up of a fundIs portfolio at any
1iven time( nor can they directly influence 5hich securities the fund mana1er %uys and
sells or the timin1 of those trades4
Price )cert"it.
=ith an individual stoc*( you can o%tain real9time $or close to real9time) pricin1
information 5ith relative ease %y chec*in1 financial 5e%sites or %y callin1 your %ro*er4
Hou can also monitor ho5 a stoc*Is price chan1es from hour to hour or even second to
second4 ?y contrast( 5ith a mutual fund( the price at 5hich you purchase or redeem
shares 5ill typically depend on the fundIs "Ay( 5hich the fund mi1ht not calculate until
many hours after youIve placed your order4 #n 1eneral( mutual funds must calculate their
"A3 at least once every %usiness day( typically after the major '4S4 e2chan1es close4
ORGANIZATION OF A MUTUAL FUND
There are many entities involved and the dia1ram %elo5 illustrates the
or1ani<ational set up of mutual fund#
$%UR&E # '''.amfiinda.com
A Mutual Fund in #ndia is constituted in the form of trust created under the #ndian
Trusts Act4 .//04 The fund sponsor acts as Settler of the trust( contri%utin1 to its initial
capital and appoints a Trustee to hold the assets of the trusts for the %enefit of the unit
holders( 5ho are the %eneficiaries of the Trust4 'nder the #ndian Trusts Act( the Trust or
the fund has no independent le1al capacity itself( rather it is the Trustee or Trustees 5ho
have the le1al capacity and therefore all acts in relation to the trust are ta*en on its %ehalf
%y the trustees4 The trustees hold the unit holderIs money in a fiduciary capacity that is
the money %elon1s to the unit holders and it is entrusted to the fund for the purpose of
investment4 The fund sponsor can %e compared to a promoter of a company4 The Asset
Mana1ement Company is appointed to act as the investment mana1er of the trust under
the ?oard supervision and direction of the Trustees4 The sponsor appoints the AMC
5hich 5ould in the name of the Trust( float and then marria1e the different investment
scheme as per S?# 1uidelines4
)it 1o#der8
The individual 5ho invest money in the mutual fund 5ith an aim of 1ettin1
returns4 The Mutual fund allots him num%er of units %ased on his investment and the
value of the unit4
S!osor8
A Sponsor means any%ody corporate 5ho( actin1 alone or in com%ination 5ith
another %ody corporate( esta%lished a mutual fund after completin1 the formalities
prescri%ed in the S?#Is Mutual Funds Re1ulations4 The Sponsor should have a sound
trac* record and 1eneral reputation of fairness and inte1rity in all his %usiness
transactions4
Trustee8
Trustee means the ?oard of Trustees or the Trustee Company 5ho hold the
property of the Mutual Fund in trust for the %enefit of the unit holder4
Asset M""'emet Com!".8
A Company formed and re1istered under the Companies Act( .@-C and 5hich has
o%tained the approval of S?# to function as an Asset Mana1ement Company may %e
appointed %y the sponsor of the mutual fund as such4
Custodi" "d De!ositories8
Custodian is a person appointed for safe *eepin1 of the securities4 Mutual Funds
deals in %uyin1 and sellin1 of lar1e num%er of securities4 AMC appoints a custodian for
safe *eepin1 of these securities and for participatin1 in clearin1 system on its %ehalf4 #n
case of demateriali<ed securities( holdin1s 5ill %e held %y +epository throu1h a
+epository Participant4
Tr"s$er A'ets8
6e is responsi%le for issuin1 and redeemin1 units of mutual funds4 6e prepares
transfer documents and update investor records4
SEBI8
Securities and 2chan1e ?oard of #ndia is the re1ulator 5hich is responsi%le for
re1ulatin1 the 5or*in1 of different %odies or individual dealin1 in Securities mar*et and
projectin1 the interest of #nvestors4
NEED (OR T1E ST)DY8
The study first tries to understand the composition of the selected funds 5hich
determines the scope of performance for the funds( follo5ed %y use of ratios that are
relevant in >uantifyin1 and understandin1 the ris* and return relationships for each
mutual fund scheme under consideration4 Then a comparative analysis of the mutual fund
schemes is done to see 5hich fund has performed the %est4
This study is si1nificant to the company as it loo*s into the minute details that
differentiate the performances of funds of different companies 5ith same theme or sector
under similar mar*et conditions4 This 5ould help the company to develop4
OB<ECTIVE O( T1E ST)DY
To understand the Functions of an Asset Mana1ement Company
To understand the performances of various schemes usin1 various tools to
measure the performances4
To measure and compare the performance of selected mutual fund schemes of
different mutual fund companies4
To compare and analy<e the ris* and return of different mutual fund schemes4
To study different types of funds and its %enefits4
SCOPE O( ST)DY 7
The study 5as carried out for a period of 8: days( in 5hich the main focus 5as to
follo5 the performance of the different9different mutual fund companies and assent
mana1ement companies4 Since different companies come out 5ith similar themes in the
same season( it %ecomes crucial for the company to constantly perform 5ell so as to
survive the competition and provide ma2imum capital appreciation or return as the case
may %e4 Other than the mar*et the performance of the fund depends on the *ind of stoc*
chosen %y the fund mana1ers of the company4
The analysis is done on the performance of funds 5ith the same theme or sector
and reason out 5hy a fund performs %etter than the others in the lot
RESEARC1 MET1ODOLOGY
D"t" co##ectio8
Prim"r. D"t"8
The primary data study of this study is interaction 5ith the %ranch inchar1e of
the company4
Secod"r. d"t"
The secondary data includes 7
Pu%lished material and annual reports of mutual fund companies
Other pu%lished material of mutual funds4
Research %ased online portals4
'npu%lished sources also4
S"m!#e Pro$i#e8
The sample re>uired for the study has %een selected throu1h random samplin1 method
from the availa%le list of mutual fund schemes in the mar*et4 ?roadly the sample of C
mutual fund schemes includes e>uity funds( de%t funds and %alanced funds4
The study has ta*en three %road cate1ories of funds
>uity Funds
+e%t funds
?alanced fund
E9uit. (uds8
.4?#RLA S'" L#F J'#TH F'"+
04'T# J'#TH F'"+
Debt (uds8
.4S?# MA!"'M #"COM F'"+
046+FC 6#!6 #"TRST F'"+
B"#"ced (uds8
.4KOTAK ?AL"C+ F'"+
04#C#C# PR'+"T#AL ?ALA"C+ F'"+
Limit"tios o$ t%e Stud.8
The present study has the follo5in1 limitations
The study has %een restricted to only a fe5 schemes4 $>uity(de%t(%alanced)
The data is analy<ed for a limited period of 8 years4
The study is entirely %ased on secondary data collected from the 5e%site4
1YPOT1ESIS
6i1her the mar*et return causes hi1her fund flo54
fficient Mutual fund Mana1ers are 5ith effective investment strate1y4
LITERAT)RE REVIE+
Literature on mutual fund performance evaluation is enormous4 A fe5 research
studies that have influenced the preparation of this paper su%stantially are discussed in
this section4 Sharpe( =illiam F4 $.@CC) su11ested a measure for the evaluation of
portfolio performance4 +ra5in1 on results o%tained in the field of portfolio analysis(
economist &ac* L4 Treynor has su11ested a ne5 predictor of mutual fund performance(
one that differs from virtually all those used previously %y incorporatin1 the volatility of
a fundKs return in a simple yet meanin1ful manner4
Michael C4 &ensen $.@CB) derived a ris*9adjusted measure of portfolio
performance $&ensenIs alpha) that estimates ho5 much a mana1erIs forecastin1 a%ility
contri%utes to fundIs returns4 As indicated %y Statman $0:::)( the e S+AR of a fund
portfolio is the e2cess return of the portfolio over the return of the %enchmar* inde2(
5here the portfolio is levera1ed to have the %enchmar* inde2Is standard deviation4
S4"arayan Rao ( et4 al4( evaluated performance of #ndian mutual funds in a %ear
mar*et throu1h relative performance inde2( ris*9return analysis( TreynorIs ratio( SharpeIs
ratio( SharpeIs measure ( &ensenIs measure( and FamaIs measure4 The study used 0C@
open9ended schemes $out of total schemes of A88) for computin1 relative performance
inde24 Then after e2cludin1 funds 5hose returns are less than ris*9free returns( -/
schemes are finally used for further analysis4 The results of performance measures
su11est that most of mutual fund schemes in the sample of -/ 5ere a%le to satisfy
investorIs e2pectations %y 1ivin1 e2cess returns over e2pected returns %ased on %oth
premium for systematic ris* and total ris*4
?ijan Roy( et4 al4( conducted an empirical study on conditional performance of
#ndian mutual funds4 This paper uses a techni>ue called conditional performance
evaluation on a sample of ei1hty9nine #ndian mutual fund schemes 4This paper measures
the performance of various mutual funds 5ith %oth unconditional and conditional form of
CAPM( Treynor9 Ma<uy model and 6enri*sson9Merton model4 The effect of
incorporatin1 la11ed information varia%les into the evaluation of mutual fund mana1ersI
performance is e2amined in the #ndian conte2t4 The results su11est that the use of
conditionin1 la11ed information varia%les improves the performance of mutual fund
schemes( causin1 alphas to shift to5ards ri1ht and reducin1 the num%er of ne1ative
timin1 coefficients4 Mishra( et al4( $0::0) measured mutual fund performance usin1 lo5er
partial moment4 #n this paper( measures of evaluatin1 portfolio performance %ased on
lo5er partial moment are developed4
Ris* from the lo5er partial moment is measured %y ta*in1 into account only those
states in 5hich return is %elo5 a pre9specified Ftar1et rateG li*e ris*9free rate4 Kshama
Fernandes$0::8) evaluated inde2 fund implementation in #ndia4 #n this paper( trac*in1
error of inde2 funds in #ndia is measured 4The consistency and level of trac*in1 errors
o%tained %y some 5ell9run inde2 fund su11ests that it is possi%le to attain lo5 levels of
trac*in1 error under #ndian conditions4 At the same time( there do seem to %e periods
5here certain inde2 funds appear to depart from the discipline of inde2ation4 K4
Pendara*i et al studied construction of mutual fund portfolios( developed a multi9criteria
methodolo1y and applied it to the !ree* mar*et of e>uity mutual funds4 The
methodolo1y is %ased on the com%ination of discrete and continuous multi9criteria
decision aid methods for mutual fund selection and composition4 'TA+#S multi9criteria
decision aid method is employed in order to develop mutual fundIs performance models4
!oal pro1rammin1 model is employed to determine proportion of selected mutual funds
in the final portfolios4
?ro5n and !oet<mann $.@@-) e2plored e>uity mutual fund data and found clear
evidence of relative ris*9adjusted performance persistenceL ho5ever( the persistence 5as
mostly due to funds that la1 the SMP -::( depends upon the time period o%served and is
correlated across mana1ers
Sharpe $.@CC) loo*ed at the performance of open9end mutual funds and found that to a
major e2tent the capital mar*et is hi1hly efficient( %ut there is some evidence of
persistence in performance4 &ensen $.@C/) evaluated the performance of mutual funds in
the period .@A-,.@CA and found no evidence of mana1er s*ill
CHAPTER 3
INDUSTRY &
COMPANY PROFILE
IND)STRY PRO(ILE8 M)T)AL ()NDS8
Mutual funds 1o %ac* to the times of the 1yptians and Phoenicians 5hen they sold
shares in caravans and vessels to spread the ris* of these ventures4 The forei1n and
colonial 1overnment Trust of London of ./C/ is considered to %e the fore9runner of the
modern concept of mutual funds4 The 'SA is( ho5ever( considered to %e the Mecca of
modern mutual funds4 ?y the early 9 .@8:s >uite a lar1e num%er of close 9 ended mutual
funds 5ere in operation in the '4S4A4 Much latter in .@-A( the committee on finance for
the private sector recommended mo%ili<ation of savin1s of the middle class investors
throu1h unit trusts4 Finally in &uly .@CA( the concept too* root in #ndia 5hen 'nit Trust
of #ndia 5as set up4
INDIAN M)T)AL ()ND IND)STRY
The end of millennium mar*s 8C years of e2istence of mutual funds in this
country4 The ride throu1h these 8C years is not %een smooth4 #nvestor opinion is still
divided4 =hile some are for mutual funds others are a1ainst it4
'T# commenced its operations from &uly .@CA 4The impetus for esta%lishin1 a
formal institution came from the desire to increase the propensity of the middle and lo5er
1roups to save and to invest4 'T# came into e2istence durin1 a period mar*ed %y 1reat
political and economic uncertainty in #ndia4 =ith 5ar on the %orders and economic
turmoil that depressed the financial mar*et( entrepreneurs 5ere hesitant to enter capital
mar*et4
The already e2istin1 companies found it difficult to raise fresh capital( as
investors did not respond ade>uately to ne5 issues4 arnest efforts 5ere re>uired to
canali<e savin1s of the community into productive uses in order to speed up the process
of industrial 1ro5th4
'T# commenced its operations from &uly .@CA N5ith a vie5 to encoura1in1
savin1s and investment and participation in the income( profits and 1ains accruin1 to the
Corporation from the ac>uisition( holdin1( mana1ement and disposal of securities4N
+ifferent provisions of the 'T# Act laid do5n the structure of mana1ement( scope of
%usiness( po5ers and functions of the Trust as 5ell as accountin1( disclosures and
re1ulatory re>uirements for the Trust4
One thin1 is certain , the fund industry is here to stay4 The industry 5as one9
entity sho5 till .@/C 5hen the 'T# monopoly 5as %ro*en 5hen S?# and Can %an*
mutual fund entered the arena4 This 5as follo5ed %y the entry of others li*e ?O#( L#C(
!#C( etc4 sponsored %y pu%lic sector %an*s4 Startin1 5ith an asset %ase of Rs4 0- crore in
.@CA the industry has 1ro5n at a compounded avera1e 1ro5th rate of 0BO to its current
si<e of Rs4@:::: crore4
The period .@/C9.@@8 can %e termed as the period of pu%lic sector mutual funds
$PMFs)4 From one player in .@/- the num%er increased to / in .@@84 The party did not
last lon14 =hen the private sector made its de%ut in .@@89@A( the stoc* mar*et 5as
%oomin14
The openin1s up of asset mana1ement %usiness to private sector in .@@8 sa5
international players li*e Mor1an Stanley( &ardine Flemin1( &P Mor1an( !eor1e Soros
and Capital #nternational alon1 5ith the host of domestic players join the party4 ?ut for
the e>uity funds( the period of .@@A9@C 5as one of the 5orst in the history of #ndian
Mutual Funds4
3=== > YEAR O( T1E ()NDS
Mutual funds have %een around for a lon1 period of time to %e precise for 8C yrs
%ut the year .@@@ sa5 immense future potential and developments in this sector4 This
year si1naled the year of resur1ence of mutual funds and the re1ainin1 of investor
confidence in these MFIs4 This time around all the participants are involved in the revival
of the funds the AMCIs( the unit holders( the other related parties4 6o5ever the sole
factor that 1ave lifer to the revival of the funds 5as the 'nion ?ud1et4 The %ud1et
%rou1ht a%out a lar1e num%er of chan1es in one stro*e4 An insi1ht of the 'nion ?ud1et
on mutual funds ta2ation %enefits is provided later4
#t provided centre sta1e to the mutual funds( made them more attractive and
provides accepta%ility amon1 the investors4 The 'nion ?ud1et e2empted mutual fund
dividend 1iven out %y e>uity9oriented schemes from ta2( %oth at the hands of the investor
as 5ell as the mutual fund4 "o lon1er 5ere the mutual funds interested in sellin1 the
concept of mutual funds they 5anted to tal* %usiness 5hich 5ould mean to increase asset
%ase( and to 1et asset %ase and investor %ase they had to %e fully armed 5ith a 5hole lot
of schemes for every investor 4So ne5 schemes for ne5 #POIs 5ere inevita%le4 The >uest
to attract investors e2tended %eyond just ne5 schemes4 The funds started to re1ulate
themselves and 5ere all out on 5innin1 the trust and confidence of the investors under
the ae1is of the Association of Mutual Funds of #ndia $AMF#)
(irst P%"se > 3=?62@A8
'nit Trust of #ndia $'T#) 5as esta%lished on .@C8 %y an Act of Parliament4 #t 5as
set up %y the Reserve ?an* of #ndia and functioned under the Re1ulatory and
administrative control of the Reserve ?an* of #ndia4 #n .@B/ 'T# 5as de9lin*ed from the
R?# and the #ndustrial +evelopment ?an* of #ndia $#+?#) too* over the re1ulatory and
administrative control in place of R?#4 The first scheme launched %y 'T# 5as 'nit
Scheme .@CA4 At the end of .@// 'T# had Rs4C(B:: crores of assets under mana1ement4
Secod P%"se > 3=@A23==5 BEtr. o$ Pub#ic Sector (udsC8
.@/B mar*ed the entry of non9 'T#( pu%lic sector mutual funds set up %y pu%lic
sector %an*s and Life #nsurance Corporation of #ndia $L#C) and !eneral #nsurance
Corporation of #ndia $!#C)4 S?# Mutual Fund 5as the first non9 'T# Mutual Fund
esta%lished in &une .@/B follo5ed %y Can%an* Mutual Fund $+ec /B)( Punja% "ational
?an* Mutual Fund $Au1 /@)( #ndian ?an* Mutual Fund $"ov /@)( ?an* of #ndia $&un @:)(
?an* of ?aroda Mutual Fund $Oct @0)4 L#C esta%lished its mutual fund in &une .@/@
5hile !#C had set up its mutual fund in +ecem%er .@@:
At the end of .@@8( the mutual fund industry had assets under mana1ement of Rs4AB( ::A
crores4
T%ird P%"se > 3==524DD5 BEtr. o$ Pri,"te Sector (udsC8
=ith the entry of private sector funds in .@@8( a ne5 era started in the #ndian
mutual fund industry( 1ivin1 the #ndian investors a 5ider choice of fund families4 Also(
.@@8 5as the year in 5hich the first Mutual Fund Re1ulations came into %ein1( under
5hich all mutual funds( e2cept 'T# 5ere to %e re1istered and 1overned4 The erst5hile
Kothari Pioneer $no5 mer1ed 5ith Fran*lin Templeton) 5as the first private sector
mutual fund re1istered in &uly .@@84 The .@@8 S?# $Mutual Fund) Re1ulations 5ere
su%stituted %y a more comprehensive and revised Mutual Fund Re1ulations in .@@C4 The
industry no5 functions under the S?# $Mutual Fund) Re1ulations .@@C4 The num%er of
mutual fund houses 5ent on increasin1( 5ith many forei1n mutual funds settin1 up funds
in #ndia and also the industry has 5itnessed several mer1ers and ac>uisitions4 As at the
end of &anuary 0::8( there 5ere 88 mutual funds 5ith total assets of Rs4 .(0.(/:- crores4
The 'nit Trust of #ndia 5ith Rs4AA(-A. crores of assets under mana1ement 5as 5ay
ahead of other mutual funds4
(ourt% P%"se > sice (ebru"r. 4DD5 I (ebru"r. 4DD58
Follo5in1 the repeal of the 'nit Trust of #ndia Act .@C8 'T# 5as %ifurcated into
t5o separate entities4 One is the Specified 'nderta*in1 of the 'nit Trust of #ndia 5ith
assets under mana1ement of Rs40@( /8- crores as at the end of &anuary 0::8( representin1
%roadly( the assets of 'S CA scheme( assured return and certain other schemes4 The
Specified 'nderta*in1 of 'nit Trust of #ndia( functionin1 under an administrator and
under the rules framed %y !overnment of #ndia and does not come under the purvie5 of
the Mutual Fund Re1ulations4 The second is the 'T# Mutual Fund Ltd( sponsored %y
S?#( P"?( ?O? and L#C4 #t is re1istered 5ith S?# and functions under the Mutual Fund
Re1ulations4 =ith the %ifurcation of the erst5hile 'T# 5hich had in March 0::: more
than Rs4BC(::: crores of assets under mana1ement and 5ith the settin1 up of a 'T#
Mutual Fund( conformin1 to the S?# Mutual Fund Re1ulations( and 5ith recent mer1ers
ta*in1 place amon1 different private sector funds( the mutual fund industry has entered its
current phase of consolidation and 1ro5th4 As at the end of Septem%er( 0::A( there 5ere
0@ funds( 5hich mana1e assets of Rs4.-8.:/ crores under A0. schemes4
T.!es o$ Mutu"# (uds8
Mutual fund schemes may %e classified on the %asis of its structure and its investment
o%jective4
B. Structure8
O!e2ed (uds7
An open9end fund is one that is availa%le for su%scription all throu1h the year4
These do not have a fi2ed maturity4 #nvestors can conveniently %uy and sell units at "et
Asset 3alue $N"A3N) related prices4 The *ey feature of open9end schemes is li>uidity4
C#osed2ed (uds7
A closed9end fund has a stipulated maturity period 5hich 1enerally ran1in1 from
8 to .- years4 The fund is open for su%scription only durin1 a specified period4 #nvestors
can invest in the scheme at the time of the initial pu%lic issue and thereafter they can %uy
or sell the units of the scheme on the stoc* e2chan1es 5here they are listed4 #n order to
provide an e2it route to the investors( some close9ended funds 1ive an option of sellin1
%ac* the units to the Mutual Fund throu1h periodic repurchase at "A3 related prices4
S?# Re1ulations stipulate that at least one of the t5o e2it routes is provided to the
investor4
Iter,"# (uds7
#nterval funds com%ine the features of open9ended and close9ended schemes4
They are open for sale or redemption durin1 pre9determined intervals at "A3 related
prices4
B. I,estmet Objecti,e8
Gro&t% (uds7
The aim of 1ro5th funds is to provide capital appreciation over the medium to
lon1 term4 Such schemes normally invest a majority of their corpus in e>uities4 #t has
%een proved that returns from stoc*s( have outperformed most other *ind of investments
held over the lon1 term4 !ro5th schemes are ideal for investors havin1 a lon19term
outloo* see*in1 1ro5th over a period of time4
Icome (uds8
The aim of income funds is to provide re1ular and steady income to investors4
Such schemes 1enerally invest in fi2ed income securities such as %onds( corporate
de%entures and !overnment securities4 #ncome Funds are ideal for capital sta%ility and
re1ular income4
B"#"ced (uds7
The aim of %alanced funds is to provide %oth 1ro5th and re1ular income4 Such
schemes periodically distri%ute a part of their earnin1 and invest %oth in e>uities and
fi2ed income securities in the proportion indicated in their offer documents4 #n a risin1
stoc* mar*et( the "A3 of these schemes may not normally *eep pace( or fall e>ually
5hen the mar*et falls4 These are ideal for investors loo*in1 for a com%ination of income
and moderate 1ro5th4
Moe. M"r;et (uds7
The aim of money mar*et funds is to provide easy li>uidity( preservation of
capital and moderate income4 These schemes 1enerally invest in safer short9term
instruments such as treasury %ills( certificates of deposit( commercial paper and inter9
%an* call money4 Returns on these schemes may fluctuate dependin1 upon the interest
rates prevailin1 in the mar*et4
These are ideal for Corporate and individual investors as a means to par* their surplus
funds for short periods4
Ot%er Sc%emes8
T": S",i' Sc%emes7
These schemes offer ta2 re%ates to the investors under specific provisions of the
#ndian #ncome Ta2 la5s as the !overnment offers ta2 incentives for investment in
specified avenues4 #nvestments made in >uity Lin*ed Savin1s Schemes $LSS) and
Pension Schemes are allo5ed as deduction u;s // of the #ncome Ta2 Act( .@C.4 The Act
also provides opportunities to investors to save capital 1ains u;s -AA and -A? %y
investin1 in Mutual Funds4
Idustr. S!eci$ic Sc%emes 7
#ndustry Specific Schemes invest only in the industries specified in the offer
document4 The investment of these funds is limited to specific industries li*e #nfotech(
FMC!( and Pharmaceuticals etc4
Ide: Sc%emes8
#nde2 Funds attempt to replicate the performance of a particular inde2 such as the
?S Sense2 or the "S -:
Sector"# Sc%emes8
Sectoral Funds are those( 5hich invest( e2clusively in a specified sector4 This
could %e an industry or a 1roup of industries or various se1ments such as KAK !roup
shares or initial pu%lic offerin1s4
RISKS ASSOCIATED +IT1 M)T)AL ()NDS
#nvestin1 in mutual funds( as 5ith any security( does not come 5ithout ris*4 One
of the most %asic economic principles is that ris* and re5ard are directly correlated4 #n
other 5ords( the 1reater the potential ris* the 1reater the potential return4 The types of
ris* commonly associated 5ith mutual funds are7
M"r;et ris;8
Mar*et ris* relates to the mar*et value of a security in the future4 Mar*et prices
fluctuate and are suscepti%le to economic and financial trends( supply and demand( and
many other factors that cannot %e precisely predicted or controlled4
Po#itic"# ris;8
Chan1es in the ta2 la5s( trade re1ulations( administrated prices( etc are some of
the many political factors that create mar*et ris*4 Althou1h collectively( as citi<ens( 5e
have indirect control throu1h the po5er of our vote individually( as investors( 5e have
virtually no control4
I$#"tio ris;8
#nterest rate ris* relates to futures chan1es in interest rates4 For instance( if an
investor invests in a lon1 , term de%t mutual fund scheme and interest rates increase( the
"A3 of the scheme 5ill fall %ecause the scheme 5ill %e end up holdin1 de%t offerin1
lo5er interest rates4
Busiess ris;8
?usiness ris* is the uncertainty concernin1 the future e2istence( sta%ility( and
profita%ility of the issuer of the security4 ?usiness ris* is inherent in all %usiness ventures4
The future financial sta%ility of a company cannot %e predicted or 1uaranteed( nor can the
price of its securities4 Adverse chan1es in %usiness circumstances 5ill reduce the mar*et
price of the companyIs e>uity resultin1 in proportionate fall in the "A3 of the mutual
fund scheme( 5hich has invested in the e>uity of such a company4
Ecoomic ris;8
conomic ris* involves uncertainty in the economy( 5hich( in turn( can have an
adverse effect on a companyIs %usiness4 For instance( if monsoons fail in a year( e>uity
stoc*s of a1riculture , %ased companies 5ill fall and "A3Is of mutual funds( 5hich have
invested in such stoc*s( 5ill fall proportionately.

COMPANY PRO(ILE
INTROD)CTION ABO)T KARVY
The term -KARVY/ is derived from the initial letters of its founders ,
K 2 Mr* Kuttumb" R"o
A 2 Mr* Aj". Kum"r
R 2 Mr* R"m";ris%"
V 2 Mr* V"id.""t%"
Y 2 Mr* Yu'"d%"r
These five ener1etic and dynamic Chartered Accountants started Karvy in .@B- as Karvy
and Company4 Audit and Ta2ation activity 5as underta*en4#nitial Cash #nflo5 of Rs4
8:(:::;9 each 5as contri%uted as Capital of the Company4

T1 E KARVY CREDO
OUR CLIENTS.OUR FOCUS.
Clients are the reason for our %ein14
Personali<ed service( professional care( pro9activeness is the values that help us
nurture endurin1 relationships 5ith our clients4
RESPECT FOR THE INDIVIDUAL.
ach and every individual is an essential %uildin1 %loc* of our or1ani<ation4
=e are the *iln that hones individuals to perfection4 ?e they our employees(
shareholders or investors4 =e do so %y upholdin1 their di1nity M pride( inculcatin1 trust
and achievin1 a sensitive %alance of their professional and personal lives4
TEAM WORK.
"one of us is more important than all of us4
ach team mem%er is the face of Karvy4 To1ether 5e offer diverse services 5ith
speed( accuracy and >uality to deliver only one product7 e2cellence4 Transparency( co9
operation( invalua%le individual contri%utions for a collective 1oal( and respectin1
individual uni>ueness 5ithin a corporate 5hole( are ho5 5e deliver4
OVERVIE+
KAR3H( is a premier inte1rated financial services provider( and ran*ed amon1 the
top five in the country in all its %usiness se1ments( services over .C million individual
investors in various capacities( and provides investor services to over 8:: corporate(
comprisin1 the 5ho is 5ho of Corporate #ndia4 KAR3H covers the entire spectrum of
financial services such as Stoc* %ro*in1( +epository Participants( +istri%ution of
financial products 9 mutual funds( %onds( fi2ed deposit( e>uities( #nsurance ?ro*in1(
Commodities ?ro*in1( Personal Finance Advisory Services( Merchant ?an*in1 M
Corporate Finance( placement of e>uity( #POIs( amon1 others4 Karvy has a professional
mana1ement team and ran*s amon1 the %est in technolo1y( operations and research of
various industrial se1ments4
Our Stoc* ?ro*in1 services are 5idely net5or*ed across #ndia( 5ith the num%er
of our tradin1 terminals providin1 retail stoc* %ro*in1 facilities4 Our services have
increasin1ly offered customer oriented convenience( 5hich 5e provide to a spectrum of
investors( hi1h net 5orth or other5ise( 5ith e>ual dedication and competence4 =e offer
tradin1 on a vast platformL "ational Stoc* 2chan1e( ?om%ay Stoc* 2chan1e and
6ydera%ad Stoc* 2chan1e4 More importantly( 5e ma*e tradin1 safe to the ma2imum
possi%le e2tent( %y accountin1 for several ris* factors and plannin1 accordin1ly4 =e offer
services that are %eyond just a medium for %uyin1 and sellin1 stoc*s and shares4 #nstead
5e provide services( 5hich are multi dimensional and multi9focused in their scope4
E)ALITY POLICY
To achieve and retain leadership( Karvy shall aim for complete customer satisfaction( %y
com%inin1 its human and technolo1ical resources( to provide superior >uality financial
services4 #n the process( Karvy 5ill strive to e2ceed CustomerKs e2pectations4


E)ALITY OB<ECTIVES
As per the Juality Policy( Karvy 5ill7
?uild in9house processes that 5ill ensure transparent and harmonious
relationships 5ith its clients and investors to provide hi1h >uality of services4
sta%lish a partner relationship 5ith its investor service a1ents and vendors
that 5ill help in *eepin1 up its commitments to the customers4
Provide hi1h >uality of 5or* life for all its employees and e>uip them 5ith
ade>uate *no5led1e M s*ills so as to respond to customerKs needs4
Continue to uphold the values of honesty M inte1rity and strive to esta%lish
unparalleled standards in %usiness ethics4
Strive to %e a relia%le source of value9added financial products and services
and constantly 1uide the individuals and institutions in ma*in1 a judicious
choice of same4
Strive to *eep all sta*e9holders $shareholders( clients( investors( employees(
suppliers and re1ulatory authorities) proud and satisfied4
AC1IEVEMENTS
Amon1 the top - stoc* %ro*ers in #ndia $AO of "S volumes)
#ndiaKs "o4 . Re1istrar M Securities Transfer A1ents
Amon1 the to top 8 +epository Participants
Lar1est "et5or* of ?ranches M ?usiness Associates
#SO @::0 certified operations %y +"3
Amon1 top .: #nvestment %an*ers
Lar1est +istri%utor of Financial Products
Adjud1ed as one of the top -: #T uses in #ndia %y M#S Asia
Full Fled1ed #T driven operations

3#S#O" 0:.:
0ra%1h#+
Plan for ta*in1 the net5or* to B-: %ranches %y &une 0::@
Stoc* ?ro*in1
.:O P share in cash mar*ets
F M O dou%le the cash volumes $around CO)
Activate ?S so as to reach -O share
+epository services
To reach the "o4. position
Loo* at over .0 lace accounts %y 0:.:
Mutual Fund distri%ution
To achieve over 0-:(::: applications per month
Achieve over Rs4 .:(::: cr of e>uity assets under advise
volve into 1ettin1 trail revenues to cover %ranch %asic costs
#nstitutional des*
Reach top .: institutional %ro*ers in the country
Ma2imi<e earnin1s for each relationship %uilt %oth domestic and
international
Research
volve as a top research house for Mid cap securities
Position as a Q*no5led1e driven %ro*erI
PC! des*
volve PC! into a PMS platform
Merchant ?an*in1
volve into top - merchant %an*ers in the country to
!ain e2pertise corporate finance and MMA
Real estate investment insurance
To achieve .O share of the mar*et $8lacpolicies)
Commodities
To reach at least -O mar*et share
Provide from all %ranches
sta%lish speciali<ed commodity %ranches 5here necessary
#nternational %ranches
- more %ranches
To contri%ute .:O of our overall revenues
Mar1in fundin1
Over Rs40(::: cr4 Of corpus
Provide #PO fundin1 %oth for retail and 6"# cate1ory
0-O of the revenues throu1h this %usiness Service delivery
All #ndia call center
#nternet %ased service delivery , %ro*in1( MF( #PO etc4
ffective use of SMS and other touch points
Customer relationship mana1ement
Trainin1
!et over /:O of the team minimum dou%le >ualified
#nte1rate
Continuous trainin1 , over .-: hour per year trainin1 for every individual
#PO distri%ution
Reach 0-O volume and .-O value
"e5 initiatives ; %usiness line
Commence 8 ne5 %usiness lines as part of diversification strate1y
Mi#estoes
KARVY M)T)AL ()ND SERVICES
Mutual funds have servin1s for every%ody4 =hichever type of investor you are( you 5ill
surely 1et a mutual fund meetin1 your re>uirements4 ?ut investin1 in mutual funds is no
childIs play therefore *arvy mutual fund advisory services is there to 1uide in each and
every step of investment in mutual funds so that the dream of 5ealth creation doesnIt
turns into ni1htmares4 #ts offerin1s includes7 products of all the 88 major AMCs( research
report a%out all the e2istin1 funds as 5ell as "FOs( customi<ed mutual fund portfolios
desi1ned for individual as 5ell as institutional customers( it not only desi1n the portfolios
rather it offers continuous portfolio revision too dependin1 on chan1in1 mar*et outloo*
and evolvin1 trends( it further 1ives access to its online consolidated portfolio statement4
Thus *arvy 5ith its various offerin1s ma*es the investor feel safe inthis dynamic
environment of the #ndian financial mar*et4
Karvy Computer share mutual fund services offers investors services( distri%utor services
and client services4 #t can %e said that *arvy is dedicated to5ards providin1 >ualityservice
to all these three facets of the investment process4 Karvy %ein1 an intermediary is 5ell
re1istered 5ith the Association of Mutual Funds of #ndia $AMF#)4 KAR3H has 1ot the
re1istration no DAR" ::./E for mutual funds( 5hich is mentionedon every form4 After
the procurement of forms from various AMCs( the forms are passed on to its various
<onal and %ranch offices $as per their re>uirements) and then further processin1 is done
either directly or throu1h su%9%ro*ers4
Karvy operates throu1h its su%9 %ro*ers( associates and its e2cellent pool of o5n direct
employees4 The employees are offered salary %y *arvy 5hereas the su%9 %ro*ers and
associates 1et certain commission4 Karvy has B: %ranches and 8 franchisees in the eastern
re1ion4 All the 5or* of mutual funds is re1ulated from Rash%ehari avenue %ranch( an
e2tension of the &+R %ranch4 The main source of earnin1 for KAR3H is the %ro*era1e
offered %y the various AMCs *no5n as pay9in4 The amount offered may vary from AMC
to AMC4 Also( the franchisees have to pay a certain amount every month4 "o5 *arvy
also pay a certain amount to the su% %ro*ers and associates *no5n as pay9out4 The payout
is decided accordin1 to the procurement done %y them4
Products "d Ser,ices
?ac*ed %y a predominantly service oriented culture and also capitalisin1 on its
e2perience of handlin1 a variety of customers( they offer a plethora of financial products
throu1h their retail arm , KAR3H9T6 F#"APOL#S4 The %usiness of distri%ution of
financial products includes Pu%lic #ssue of %onds( e>uity shares( fi2ed deposits of
corporate( distri%ution of units of various Mutual Funds( a %as*et of lia%ility products
comprisin1 personal loans( car loans( housin1 loans and loans a1ainst shares and as the
sunrise mar*et of #nsurance products4 Apart from these products( NThe FinapolisN also
offers personal ta2 plannin1 advice( share %ro*in1 and demat services4 All these products
reach the ultimate customer throu1h their 5ide spread net5or* of %ranches and retail
outlets4
TOOLS )SED (OR DATA ANALYSIS
Too#s F Met%ods8
Retur
A return is a measurement of ho5 much an investment has increased or decreased
in value over any 1iven time period4 #n particular( an annual return is the percenta1e %y
5hich it increased or decreased over any t5elve9month period4
(ormu#"7
$P.9p:)
P:
St"d"rd De,i"tio8
The de1ree that a sin1le value in a 1roup of values varies from the mean $avera1e)
of the distri%ution4 Standard deviation is a statistical measure that uses past performance
of an investment or portfolio to determine the potential ran1e of future performance and
assess the pro%a%ility of that performance4 Standard deviations can %e calculated for an
individual security or for the entire portfolio
Bet"8
#t descri%es the relationship %et5een the stoc*Is return and the inde2 returns4 The %eta
value may %e interpreted in the follo5in1 manner( Qa .O chan1e in "ifty inde2 5ould
cause a .4:A0O $%eta) chan1e in the particular fund4 #t is the slope of characteristic
re1ression line4
#t si1nifies that a fund 5ith a %eta of more than . 5ill rise more than the mar*et and also
fall more than mar*et4 Thus( if one li*es to %eat the mar*et on the upside( it is %est to
invest in a hi1h9%eta fund4 ?ut one must *eep in mind that such a fund 5ill also fall more
than the mar*et on the 5ay do5n4 So( over an entire cycle( returns may not %e much
hi1her than the mar*et4
Similarly( a lo59%eta fund 5ill rise less than the mar*et on the 5ay up and lose less on
the 5ay do5n4 =hen safety of investment is important( a fund 5ith a %eta of less than
one is a %etter option4 Such a fund may not 1ain more than the mar*et on the upside( %ut
it 5ill protect returns %etter 5hen mar*et falls
= nxy (x)( y)
nx
2
(x)
2
=here(
n , "um%er of days
2 , Returns of the inde2
y , Returns of the fund
Tre.orGs R"tio8
The Treynor Ratio( named after &ac* L4 Treynor( one of the fathers of modern
portfolio theory( helps analy<e returns in relation to the mar*et ris* of the fund4 The
Ratio( also *no5n as the re5ard9to9volatility ratio( provides a measure of performance
adjusted for mar*et ris*4 6i1her the Treynor Ratio( the %etter the performance under
analysis4
#t is a ratio that helps the portfolio mana1ers to determine the e2cess return 1enerated as
the difference %et5een the fundIs return and the ris* free return4 The e2cess return to %eta
ratio measures the additional return on a fund per unit of systematic ris*4 Ran*in1 of the
funds is done %ased on this ratio4
T = R RFR

=here(
R , Return on investment4
RFR , Ris* Free Return
S%"r!eGs R"tio8
SharpeIs ratio is similar to treynorIs ratio the difference %ein1( instead of %eta
here 5e ta*e standard deviation4 As standard deviation represents the total ris*
e2perienced %y the fund( it reflects the returns 1enerated %y underta*in1 all possi%le ris*s4
A hi1her SharpeIs ratio is %etter as it represents a hi1her return 1enerated per unit of ris*4
S = R RFR

<ese R"tio B<RC8
A ris*9adjusted performance measure that represents the avera1e return on a
portfolio over and a%ove that predicted %y the capital asset pricin1 model $CAPM)( 1iven
the portfolioKs %eta and the avera1e mar*et return4 This is the portfolioKs alpha4 #n fact( the
concept is sometimes referred to as N&ensenKs alpha4N

R


&ensen Ratio $&R) S 99999999999999999

(
CALC)LATION O( NAV
The most important part of the calculation is the valuation of the assets o5ned %y
the fund4 Once its is calculated( the "A3 is simply the net value of assets divided %y the
num%er of units outstandin14 The detailed methodolo1y for the calculation of the asset
value is 1iven %elo54
Asset value S Sum of mar*et value of shares;de%entures
Pli>uid assets;cash held( if any
Pdividend;interest accrued
Amount due on unpaid assets 2penses accrued %ut not paid
Det"i#s o t%e "bo,e items8
For li>uid shares;de%entures( valuation is done on the %asis of the last or closin1
mar*et price on the principal e2chan1e 5here the security is traded4
For li>uid and unlisted and;or thinly traded shares;de%entures( the value has to %e
estimated4 For shares( this could %e the %oo* value per share or an estimated mar*et price4
#f suita%le %enchmar*s are availa%le4 Fore de%entures and %onds( value is estimated on
the %asis of yields of compara%le li>uid securities after adjustin1 for illi>uidity4
The value of fi2ed interest %earin1 securities moves in a direction opposite to
interest rate chan1es valuation of de%entures and %onds is a %i1 pro%lem since most of
them are unlisted and thinly traded4 This 1ives considera%le lee5ay to the AMCIs on
valuation and some of the AMCIs are %elieved to ta*e advanta1e of this and adopt
fle2i%le valuation policies dependin1 on the situation4
#nterest is paya%le on de%entures;%onds on periodic %asis say every C months4 ?ut(
5ith every passin1 day( interest is said to %e accrued( at the daily interest rate( 5hich is
calculated %y dividin1 the periodic interest payment 5ith the num%er of days in each
period4
Thus( accrued interest on a particular day is e>ual to the daily interest rate
multiplied %y the num%er of days since the last interest payment date4
'sually( dividends are proposed at the time of annual 1eneral meetin1 and
%ecome due on the record date4 There is a 1ap %et5een the dates on 5hich it %ecomes due
and the actual payment date4 #n the immediate period( it is deemed to %e FAccruedG4
2penses includin1 mana1ement fees( custody char1es etc4 are calculated on daily %asis4
E9uit. (uds8
BIRLA S)N LI(E EE)ITY ()ND8
I,estmet Objecti,e8
An open9ended 1ro5th scheme 5ith the o%jective of lon1 term 1ro5th of capital( throu1h
a portfolio 5ith a tar1et allocation of @:O e>uity and .:O de%t and money mar*et
securities4
ASSET ALLOCATION
EE)ITY =7*?A
DEBT 6*55
MONEY MARKET 2
I,estmet I$orm"tio
Fund type Open9nded
#nvestment Plan !ro5th
Asset Si<e $Rs cr) BA@4@C
Min 4#nvestment Rs -(:::
Last +ividend "4A4
#nception +ate
A'! 0B(.@@/
Bir#" Su #i$e E9uit. (ud > Gro&t%
Dat# SFP
CNH
NI(TY
R#t'r%
2(
23 R#t'r%
4(
43 24 4546 4546(3
01)!ec)
0*
+,*+.-
01).an)
0-
3033./
0
13.0,, 110.1+ 13./ 11-.0- 110.0*/ 3.++3 10.3*1
01)A2r)
0-
30,0.3
0
0.**, 0.1*/ )1 /- ),.+0+ )
11.11
1
+-0.0/-
03)No3)
0-
/0,3.- /-.13 +/13.1
0
10., 0110.3
,
311/.++ ,0./+
3
/+*0.1,
*
0/).an)
10
0+3+.+ 1/.,/3 +1/./1
1
1, +0, +3/.+** 0.*+0
3
33.-01
01)A2r)
10
0+-0.0 1.11/ 1.+/ 0.0 0.+0 0.001 )-.,11 -3.,//
01)No3)
10
,111.0
0
10.,3+ +//.30
-
1,.0 +1+.+0 +01.-+ ,.3+3 3-.--
03).an)
11
,101., 0.,0/ 0./+1 )3.+ 10.+/ )+.0-+ )
13.31
1
11*.*//
01)A2r)
11
0*+,.0
0
)0.3*/ +*.-*1 )-.- -*.01 03.3 )
+0.01
1
/03.*00
01)No3)
11
0+01.-
0
)-.101 -0.0*+ )10.3 10,.0- 100./30 )
+0./1
1
/1-.301
4otal 1-.-- 31,-.1
,
-1., ,,*,.1
,
/0+*.+,
3
010/./*
1
CALC)LATION O( ABOVE TABLE
Bet" A#$" St"d"rd
De,i"tio
S%"r!e r"tio BSRC Tre.or
R"tio
BTR
<ese
R"tio
B<RC
3*73D 25*464 47*4?? D*D4? D*66@ 24*36A

Note BI %",e t";e R( bec%m"r; =*7 t%e $i:ed de!osit o$ b"; iterest0 t%e d".s
dur"tio is 5 .e"rC
)TI E9uit. (ud > Gro&t%8
#nvestin1 at least /:O of its funds in e>uity and e>uity related instrument 5ith
medium to hi1h ris* profile and up to 0:O in de%t and money mar*et instruments 5ith
lo5 to medium ris* profile4
ASSET ALLOCATION
EE)ITY @DI
DEBT 4DI
MONEY MARKET 2
I,estmet I$orm"tio
Fund type Open9nded
#nvestment Plan !ro5th
Asset Si<e $Rs cr) .@A048A
Min 4#nvestment Rs -(:::
Last +ividend "4A4
#nception +ate
May ./(.@@0
)TI E9uit. (ud > Gro&t%
Dat#
SFP CNH
NI(TY
R#t'r%2
(
23 R#t'r%4
(
43 24 4546 4546(3
:.9+ec9
:/
0C/04@:
:.9&an9
:@
8:884A- .84:CC .B:4B0 @4- @:40- .0A4.0B 9:4/8 :4C//@
:.9Apr9
:@
8:C:48- :4//C :4B/A :4:: :4:: :4:: 9.:488 .:C4B/:/
:89"ov9
:@
A-C84@ A@4.8 0A.84B- C:4. 8C.04:. 0@-04B.8 A@4CB 0ACB4.:/
:A9&an9
.:
-08040 .A4CA8 0.A4A.B .A40 0:.4CA 0:B4@8 84/B .A4@BC
:.9Apr9
.:
-0@:4- .4..A .40A 9.40 .4AA 9.488C 9..4-8 .804@A
:.9"ov9 C..B4-- .-4C80 0AA48-@ 0.4. AA-40. 80@4/8 .:4BB ..-4@@
.:
:89&an9
..
C.-B4C :4C-A :4A0B :40 :4:A :4.8:/ 9.:4.8 .:04C.C
:.9Apr9
..
-/0C4:- 9-48/A 0/4@/B 9-4/ 884CA 84.00B 9.C4.8 0C:4.BC
:.9"ov9
..
-0-B4@- 9@4B-. @-4:/0 9-4. 0C4:. A@4B8 9.-4A 08/4:/A
Total B@4@@ 8.C@4BC @8 AA.:40A 8C@A48- 8A8@40/C
CALC)LATION O( ABOVE TABLE
Bet" A#$" St"d"rd
De,i"tio
S%"r!e r"tio BSRC Tre.or
R"tio
BTR
<ese
R"tio
B<RC
3*3?? D*D4= 3=*76@ D*D64 D*A36 2D*D46

Note BI %",e t";e R( bec%m"r; =*7 t%e $i:ed de!osit o$ b"; iterest0 t%e d".s
dur"tio is 5 .e"rC
Debt (ud
SBI M"'um Icome (ud8
I,estmet Objecti,e8
To provide the investors an opportunity to earn( in accordance 5ith their
re>uirements throu1h capital 1ains or throu1h re1ular dividends( returns that 5ould %e
hi1her than the returns offered %y compara%le investment avenues throu1h investment in
de%t M money mar*et securities4
ASSET ALLOCATION
EE)ITY A?*AAI
DEBT 4*A3I
MONEY MARKET 4D*74I
I,estmet I$orm"tio
Fund type Open9nded
#nvestment Plan !ro5th
Asset Si<e $Rs cr) -:4B8
Min 4#nvestment Rs 0(:::
Last +ividend "4A4
#nception +ate
"O3 8:(.@@/
Dat# SFP
CNH
NI(TY
R#t'r%2( 23 R#t'r%
4(
43 24 4546 4546(3
01)!ec)0* +,*+.-
01).an)0- 3033./
0
13.0,, 110.1+ 13./ 11-.0- 110.0*/ 3.++3 10.3*1
01)A2r)0- 30,0.3
0
0.**, 0.1*/ )1 /- ),.+0+ )
11.111
+-0.0/-
03)No3)0- /0,3.- /-.13 +/13.1
0
10., 0110.3
,
311/.++ ,0./+3 /+*0.1,
*
0/).an)10 0+3+.+ 1/.,/3 +1/./1
1
1, +0, +3/.+** 0.*+03 33.-01
01)A2r)10 0+-0.0 1.11/ 1.+/ 0.0 0.+0 0.001 )-.,11 -3.,//
01)No3)10 ,111.0
0
10.,3+ +//.30
-
1,.0 +1+.+0 +01.-+ ,.3+3 3-.--
03).an)11 ,101., 0.,0/ 0./+1 )3.+ 10.+/ )+.0-+ )
13.311
11*.*//
01)A2r)11 0*+,.0
0
)0.3*/ +*.-*1 )-.- -*.01 03.3 )
+0.011
/03.*00
01)No3)11 0+01.-
0
)-.101 -0.0*+ )10.3 10,.0- 100./30 )
+0./11
/1-.301
4otal 1-.-- 31,-.1
,
-1., ,,*,.1
,
/0+*.+,3 010/./*
1
CALC)LATION O( ABOVE TABLE
Bet" A#$" St"d"rd
De,i"tio
S%"r!e r"tio BSRC Tre.or
R"tio
BTR
<ese
R"tio
B<RC
3*73D 25*464 47*4?? D*D4? D*66@ 24*36A

Note BI %",e t";e R( bec%m"r; =*7 t%e $i:ed de!osit o$ b"; iterest0 t%e d".s
dur"tio is 5 .e"rC
1D(C 1IG1 INTEREST ()ND8
I,estmet Objecti,e8
To 1enerate income %y investin1 in a ran1e of de%t and money mar*et instruments
of various maturity dates 5ith a vie5 to ma2imi<e income 5hile maintainin1 the
optimum %alance of yield( safety and li>uidity
ASSET ALLOCATION
EE)ITY 2
DEBT @4*57
MONEY MARKET ?*=5
I,estmet I$orm"tio
Fund type Open9nded
#nvestment Plan !ro5th
Asset Si<e $Rs cr) @@4C8
Min 4#nvestment Rs -(:::
Last +ividend "4A4
#nception +ate
MARC60B(.@@B
Dat# SFP
CNH
NI(TY
R#t'r%2( 23 R#t'r%
4(
43 24 4546 4546(3
01)!ec)0* +,*+.-
01).an)0- 3033./
0
13.0,, 110.1+ 3./ 11.0, //./+/ 0.-,1 0.-30
01)A2r)0- 30,0.3
0
0.**, 0.1*/ 1+.0 10,.+0 11.010 10.0,1 101.3//
03)No3)0- /0,3.- /-.13 +/13.1
0
)0.- 3/.*1 )+*-.*,1 )*.333 ,-./3*
0/).an)10 0+3+.+ 1/.,/3 +1/./1
1
3./ 11.0, /-.1*+ 0.-,1 0.-30
01)A2r)10 0+-0.0 1.11/ 1.+/ 0.- 0.*1 1.00+ )1.033 +.300
01)No3)10 ,111.0
0
10.,3+ +//.30
-
3.1 -.,1 /*./0 0.,,1 0.///
03).an)11 ,101., 0.,0/ 0./+1 1.3 1.,- 0.*00 )1.133 1.+*3
01)A2r)11 0*+,.0
0
)0.3*/ +*.-*1 1.1 +.*- )-.10+ )0.133 0.031
01)No3)11 0+01.-
0
)-.101 -0.0*+ 1.0 +.+0 )1/.,+, )0.-33 0.*10
4otal 1-.-- 31,-.1
,
+1.- +31./3 )10*.0,+ 11*.13,
CALC)LATION O( ABOVE TABLE
Bet" A#$" St"d"rd
De,i"tio
S%"r!e r"tio BSRC Tre.or
R"tio
BTR
<ese
R"tio
B<RC
D*A4D 25*=?7 6*66 23*7=3 2=*@37 7*7D?

Note BI %",e t";e R( bec%m"r; =*7 t%e $i:ed de!osit o$ b"; iterest0 t%e d".s
dur"tio is 5 .e"rC
BALANCED ()ND
KOTAK BALANCED ()ND8
I,estmet Objecti,e8
To achieve 1ro5th %y investin1 in e>uity M e>uity related instruments( %alanced
5ith income 1eneration %y investin1 in de%t M money #nvestment mar*et instruments4
ASSET ALLOCATION
EE)ITY ??*7@
DEBT 35*A6
MONEY MARKET 2
I,estmet I$orm"tio
Fund type Open9nded
#nvestment Plan !ro5th
Asset Si<e $Rs cr) A84/B
Min 4#nvestment Rs -(:::
Last +ividend "4A4
#nception +ate
"O3 0@(.@@@
KOTAK BALANCED ()ND
Dat#
SFP
CNH
NI(TY
R#t'r%2( 23 R#t'r%
4(
43 24 4546 4546(3
01)!ec)0* +,*+.-
01).an)0- 3033./
0
13.0,, 110.1+ 1., 01.1, --.301 1.31* 1.*-*
01)A2r)0- 30,0.3
0
0.**, 0.1*/ )3.1 13.,- )3.+1* )-.-++ -*.//
03)No3)0- /0,3.- /-.13 +/13.1
0
/0.0 1,/0.+
0
1-*-.1,0 3/.+1* 111/.-*
1
0/).an)10 0+3+.+ 1/.,/3 +1/./1
1
11., 13/.0, 1,-.*0* 0.31* +*.-++
01)A2r)10 0+-0.0 1.11/ 1.+/ 0.+ 0./0 0.+++ ),.0++ 3,.+,
01)No3)10 ,111.0
0
10.,3+ +//.30
-
1/.+ +10.,/ ++1.-1/ 1.-1* ,3.,/
03).an)11 ,101., 0.,0/ 0./+1 )+.3 0.+- )1.00/+ )*.0++ 1+.,+
01)A2r)11 0*+,.0
0
)0.3*/ +*.-*1 )3.1 13.,- 1-.-+0 )-.-++ -*.//,
01)No3)11 0+01.-
0
)-.101 -0.0*+ )*./ 10.0, -+1.1// )
1/.,++
+13.*0+
4otal 1-.-- 31,-.1
,
0, +131./
*
3/+3./0 11*-.00
-
CALC)LATION O( ABOVE TABLE
Bet" A#$" St"d"rd
De,i"tio
S%"r!e r"tio BSRC Tre.or
R"tio
BTR
<ese
R"tio
B<RC
3*3@= 26*566 36*D=@ 2D*454 24*A7? 25*?75

Note BI %",e t";e R( bec%m"r; =*7 t%e $i:ed de!osit o$ b"; iterest0 t%e d".s
dur"tio is 5 .e"rC
ICICI PR)DENTIAL BALANCED ()ND8
#nvestin1 at least C@48/ Oof its funds in e>uity and e>uity related instrument 5ith
medium to hi1h ris* profile and up to 0B4B-O in de%t and money mar*et instruments 5ith
lo5 to medium ris* profile.
ASSET ALLOCATION
EE)ITY ?=*5@
DEBT 4A*A7
MONEY MARKET 2
I,estmet I$orm"tio
Fund type Open9nded
#nvestment Plan !ro5th
Asset Si<e $Rs cr) 80-40.
Min 4#nvestment Rs -(:::
Last +ividend "4A4
#nception +ate
OCT B(.@@@
ICICI PR)DENTIAL BALANCED ()ND8
Dat#
SFP
CNH
NI(TY
R#t'r%2( 23 R#t'r%
4(
43 24 4546 4546(3
01)!ec)0* +,*+.-
01).an)0- 3033./
0
13.0,, 110.1+ 1+./ 103.1, 1,+0.1*/ /.+/0 1*.0+0
01)A2r)0- 30,0.3
0
0.**, 0.1*/ )1.* 3.+/ )1.0-/ )-.-00 --.10+
03)No3)0- /0,3.- /-.13 +/13.1
0
3,.* 130/.+
/
1*01.-*/ +*.,/0 *+0.03,
0/).an)10 0+3+.+ 1/.,/3 +1/./1
1
10.0 110.+0 103.101 +.3/0 0./--
01)A2r)10 0+-0.0 1.11/ 1.+/ 3.3 10.*- 3.,1, )/.*00 +3.011
01)No3)10 ,111.0
0
10.,3+ +//.30
-
1/.0 +10.+0 ++,.,,/ ,.3/0 /0.+0-
03).an)11 ,101., 0.,0/ 0./+1 )0.1 0.01 )0.0,0/ )*.+00 ,*.1/0
01)A2r)11 0*+,.0
0
)0.3*/ +*.-*1 )+./ 0.1, 1+.-+1 )
10.000
111./0*
01)No3)11 0+01.-
0
)-.101 -0.0*+ 0.+ 0.0/ )1.-00 )1.-00 ,3.+*+
4otal 1-.-- 31,-.1
,
13./ 1*/*./
/
3*+1.010 1+/-.*+
+
CALC)LATION O( ABOVE TABLE
Bet" A#$" St"d"rd
De,i"tio
S%"r!e r"tio BSRC Tre.or
R"tio
BTR
<ese
R"tio
B<RC
3*4@@ 25*4=3 33*A@6 2D*336 23*D66 24*777

Note BI %",e t";e R( bec%m"r; =*7 t%e $i:ed de!osit o$ b"; iterest0 t%e d".s
dur"tio is 5 .e"rC
COMPARISION ON OVERALL SIH M)T)AL ()NDS
F'"+ "AM Sharpe
Ratio
Ran* &ensen
Ratio
Ran* Treynor
Ratio
Ran*
?irla Sun Life >uity
Fund
:4:0C 0
TT
904.AB A
TTTT
:4AA/ 0
TT
'T# >uity Fund :4:A0 .
T
9:4:0A 8
TTT
:4B.A .
T
S?# Ma1num #ncome Fund 904:BA C
TTTTT
T
0B4:: .
T
9.C04:A. C
TTTTTT
6+FC 6i1h #nterest Fund 9.4-@. -
TTTTT
-4-:C 0
TT
9@4/.- -
TTTTT
KOTAK ?alanced Fund 9:4..A 8
TTT
904--- -
TTTTT
9A4:AA A
TTTT
#C#C# Prudential ?alanced
Fund
9:4080 A
TTTT
984C-8 C
TTTTTT
904B-C 8
TTT
I$ereces
For all the si2 funds(three types of ratios are calculated and ran*ed accordin1ly4
Accordin1 to Sharpe Ratio and Treynors Ratio 'T# J'#TH F'"+ is ran*ed
first and ?#RLA S'" L#F J'#TH F'"+ is ran*ed second4
#n &ensen Ratio S?# MA!"'M #"COM F'"+ ran*ed first and 6+FC 6#!6
#"TRST F'"+ ran*ed second4
CHAPTER 5
FINDINGS
SUGGESTIONS
CONCLUSION
(INDINGS
There is more volatility in the "#FTH #"+U4
J'#TH fund sho5ed a 1ood performance and 1ave ma2imum return 5ith
minimum ris*4
+?T F'"+ and ?ALA"C+ F'"+ sho5ed a poor performance durin1 the
previous years4
Comparin1 the overall returns and ris* of all the funds 'T# J'#TH F'"+ and
?#RLA S'" L#F J'#TH F'"+ are favora%le to invest4
#n case of ?ALA"C+ Fund( the mar*et is not performin1 sound %alanced
schemes also 1ave ne1ative returns4All the funds sho5n poor performance due to
the overall mar*et indices4
Mutual funds provide the various %enefits to the investor( such as Li>udity(
3ariety of schemes( fle2i%ility of s5itchin1 and ta2 savin1s4
S)GGESTIONS

The study has made an attempt to prove that mere returns of a fund or the past
performance is not 1ood enou1h to ma*e a sound decision on future investments4
There is a need to understand various availa%le tools of comparative analysis and
their si1nificance in ma*in1 an investment decision4
The tools help in analy<in1 the consistency of performance of the funds over a
period of time4
#t is advisa%le to prefer those funds 5hich ma2imi<e the return and minimi<e the
ris*4
#nvestor should evaluate the ris* and return of the mutual fund %efore investin14

CONCL)SION
The project says that the investment has to ta*e to those funds 5hich are doin1
5ell in the mar*et4 The fund returns should %e hi1h 5hen compared to the other other
fund and inde2 returns4 The investor has to *no5 the o%jective of the investment( so
accordin1 to it he has to 1o for the investment4
Some companies 1ive more returns 5ith more ris* and some other funds 5ill
1ive moderate returns 5ith moderate ris*4 The investor has to *eep the funds for a lon1
period of time( and also the investor has to *no5 the restriction over the AMF# re1ulation
on the funds( the e2penditure ratio and the ta2es 5hich are loaded on the funds4
BIBLIOGRAP1Y
BOOK RE(ERENCE
Security Analysis and Portfolio Mana1ement ( Punithavathy Pandian( p1 7.-:(A.04
Financial Mana1ement (Prasanna Chandra ( TATA MC !ra5 6ill( -
th
edition ( p17
.0@(.AA(.C0(.CC(-804
Fundamentals of #nvestment ( !ordon( Ale2ander ( =illiam F4 Sharpe(8
rd
edition (p17
-@/(-@@
?er*( &4 ?4 and !reen( R4 C4 $0::A)( Mutual fund flo5s and performance in rational
mar*ets( &ournal of Political
conomy ..0$C)( .0C@,.0@-
Websites
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