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TABLE OF CONTENTS:

1. Acknowledgement
2. Preface
3. Student’s Declaration
4. Objective
5. Proposed Methodology
6. Background of
a. Standard Chartered
b. Standard Chartered AMC
7. Mutual Fund
a. Introduction
b. Characteristics of MF
c. About MF Industry
d. Regulatory Structure of MF in India
e. Concept & Role of MF
f. Types of MF Schemes
g. Major Mutual Funds in India
h. 5 Easy steps to Invest in Mutual Fund
i. 5 Pointers to Measure the Performance MF
j. Tax rules for Mutual Fund Investors
k. Advantages & Disadvantages of MF
8. Who can invest in MF in India
9. Comparison of Investment Products
10.5 Common Mistakes of MF Investors
11.Data Interpretation of Investors
12. Products or Schemes offered by Standard Chartered AMC
13.comparison of top 10 open ended MF’s on 5 parameters
14.Beta calculation of S C Premier & S C Classic Funds
15.Snap-shot comparison sheet
16. Suggestion on the basis of life stages
17.Risk factors in MF
18.Bibliography

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ACKNOWLEDGEMENT

Success comes only after an effort, encouragement and constant guidance.


On completion of this project I would like to thank Mr. Amit Srivastava (Area sales
manager) and Mr. Ankit Samariya (sales officer) for their valuable guidance during the
course of this project and also helped me in the marketing of proposed three open ended
equity funds Viz: 1) STANDARD CHARTERED CLASSIC EQUITY 2) STANDARD
CHARTERED PREMIER EQUITY 3) STANDARD CHARTERED IMPERIAL
EQUITY as well as for giving me the opportunity to work for the company. Also I would
like to thank all the other staff members for their co-operation and guidance that helped
me in completing the project.

I would also like to thank all the Faculty members of Badruka Institute
of Foreign Trade, Hyderabad for their continuous support and motivation.

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PREFACE

Mutual Funds are going to be amongst the most exciting players in the years to
come. Fund managers of well oiled operations and their clients are in for a terrific
experience.

The question in everybody’s mind however is, “When?” When will investor’s
interest in Mutual Funds will really pick up? When the infatuations of the small investors
with primary will markets end? And when will the mutual fund gain the type of clout in
the stock market that their counterparts in the United States of America enjoy.

The Indian investor, believes in playing the market on his own, and will continue
to do so till the time his perception changes- which they undoubtedly will. Financial
institutions and mutual funds, leaving the small investor with no other option except the
mutual fund to put his savings in., will ultimately dominate the markets but for this to
happen, industry will have to be patient and prove that it can prove investors with better
returns than the markets. Plus they will have to make their operations much more
transparent and investor friendly. Well if we look at the trend and the figure of last one
year number it seems the shift has started to happen towards mutual fund shifting the
trend.

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STUDENT’S DECLARATION

I here by declare that Summer Training Report submitted as a


requirement of fulfillment of my MPIB course is my original work and not
submitted for the award of any other degree, diploma, fellowship or other
similar title or prizes.

Rohit Dwivedi

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OBJECTIVE

The objective of this project is to suggest the customers to invest in mutual fund on the
basis of their ages by comparing the top 10 open ended funds which are the market
leaders in the mutual fund industry.

The project would also reveal that which AMC is the market leader and
will facilitate in getting the better understanding from the investor side. This would help
Standard Chartered AMC in making marketing strategies which would help eliminate the
shortcomings and become the market leader in all the perspectives.

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Proposed Methodology

For the accomplishment of this project following steps are recommended:

STEP 1: UNDERSTANDING the product and detail study of the concept mutual funds.

STEP 2: This step is comprises of meeting with investors along with the Standard
Chartered employees.

STEP 3: Finally analyzing and interpreting the collected data and preparing the final
report.

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BACKGROUND OF STANDARD CHARTERED

The Standard Chartered Group was formed in 1969 through a merger of two banks: The
Standard Bank of British South Africa founded in 1863, and the Chartered Bank of India,
Australia and China, founded in 1853.

Both companies were keen to capitalise on the huge expansion of trade and to earn the
handsome profits to be made from financing the movement of goods from Europe to the
East and to Africa.

Standard Chartered has a history of over 150 years in banking and operates in many of
the world's fastest-growing markets with an extensive global network of over 1,400
branches (including subsidiaries, associates and joint ventures) in over 50 countries in the
Asia Pacific Region, South Asia, the Middle East, Africa, the United Kingdom and the
Americas.

As one of the world's most international banks, Standard Chartered employs almost
60,000 people, representing over 100 nationalities, worldwide. This diversity lies at the
heart of the Bank's values and supports the Bank's growth as the world increasingly
becomes one market.

With strong organic growth supported by strategic alliances and acquisitions and driven
by its strengths in the balance and diversity of its business, products, geography and
people, Standard Chartered is well positioned in the emerging trade corridors of Asia,
Africa and the Middle East.

Standard Chartered derives over 90 per cent of profits from Asia, Africa and the Middle
East. Serving both Consumer and Wholesale Banking customers worldwide, the Bank
combines deep local knowledge with global capability to offer a wide range of innovative
products and services as well as award-winning solutions.

Trusted across its network for its standard of governance and corporate responsibility,
Standard Chartered takes a long term view of the consequences of its actions to ensure
that the Bank builds a sustainable business through social inclusion, environmental
protection and good governance.

Standard Chartered is also committed to all its stakeholders by living its values in its
approach towards managing its people, exceeding expectations of its customers, making a
difference in communities and working with regulators.

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Establishment of Standard Chartered Bank around the world
Country Year Established Country Year Established
United Kingdom 1853 Australia 1964
China, India, Sri Lanka 1858 Mexico, Oman 1968
Hong Kong, Singapore 1859 Peru 1973
Indonesia, Pakistan 1863 Jersey 1978
Philippines 1872 Brazil 1979
Malaysia 1875 Venezuela 1980
Falkland Islands,
Japan 1880 1983
Macau
Zimbabwe 1892 Taiwan 1985
The Gambia, Sierra
1894 Cameroon 1986
Leone, Thailand
Ghana 1896 Nepal 1987
Botswana 1897 Vietnam 1990
Cambodia, South
USA 1902 1992
Africa
Bangladesh 1905 Iran 1993
Zambia 1906 Colombia 1995
Kenya 1911 Laos, Argentina 1996
Uganda 1912 Nigeria 1999
Tanzania 1917 Lebanon 2000
Bahrain 1920 Cote d’Ivoire 2001
Jordan 1925 Mauritius 2002
Korea 1929 Turkey 2003
Qatar 1950 Afghanistan 2004
Brunei, UAE 1958

STANDARD CHARTERD AMC


Standard Chartered Mutual Fund is well-established fund house and is sponsored by the
Standard Chartered Group. SCMF were among the first to launch an active management
debt fund-the Dynamic Bond Fund - that had the capability to mimic a cash fund or an
income fund depending on market situations. The Short term and Medium term funds that
were uniquely positioned at various points along the interest rate curve with the sole
objective of maximizing value to investors with different investment time horizons.

SCMF manage our schemes through well-researched and thoroughly tested processes like
the 3 D Factor (For debt funds and helps us in predicting interest rate movements) and the
Equity Circle process.

SCMF also pioneered several service initiatives that helped increase transactional ease. It
was the first mutual fund to initiate:

1) Across the counter redemptions for all classes of investors in liquid funds,

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2) One Call Free number 1800226622 accessible across 153 cities

3) Phone transact service wherein investors can redeem without having any
Personal Identification Number

Standard Chartered Mutual Fund currently manages assets in excess of Rs. 13400
crores ( USD 2.9 Billion ) and has touched the lives of more than lakhs of investors
residing in more than 1000 Indian towns.

AMC is managing currently 3 open ended funds viz:

1) Standard Chartered Classic Equity Fund (Launched at 9 Aug 2005):

A) How the money is invested under this fund:

a) Money is invested in a diversified portfolio of companies.

b) The money is invested across sectors of the economy and various markets caps to
take advantage of the opportunities that exist in time.

c) There is strict limit on sectors and companies to ensure a truly diversidied


investment.

B) Fund Strategies:

a) Sector Rotation: To take advantage of growth opportunities in various sectors of the


economy.

b)Theme Selection: To take advantage of various macroeconomic themes that play out
in ways that enhances corporate profitability eg. Infrastructure, consumption etc.

c)Market capitalization: Investing in companies having a large/mid/small cap to


enhance or protect returns depending on market conditions.

d) Stock selection: Investing in companies on the basis of AMC’s in-house research,


in order to get an edge on market knowledge.

C) For whom is this fund relevant:

For conservative investors who have a 2-3 year horizon.

D) Benchmark: BSE 200 Index

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2) Standard Chartered Imperial Equity Fund(Launched at 16 Mar 2006):

A) How the money is invested under this fund :

a) Money is invested in a portfolio of high quality, well known Indian companies.

b) The money is invested in companies that are well recognized, have a proven track
record, strong brands, low financial risk etc.

c)These companies show the promise of exhibiting high growth outside the Indian
shores and establish themselves as global players.

B) Fund Strategies :

a)Globalisation: Indian Companies which have cross the country’s boundries to be


significant players in the global landscape.

b) Domestic demand: Take advantage of the high growth opportunities that domestic
demand offers in the backdrop of high GDP growth rates for India.

c) Emerging sectors: Take advantage of opportunities that a growing economy


provides by way of emergence of new sectors of prominence eg.Retailing, aviation,
telecom etc.

C) For whom is this fund relevant:

For conservative investors who have a 1-3 year horizon.

D) Benchmark: BSE 200 Index.

3) Standard Chartered Premier Equity Fund(Launched at 25 Sep 2005):

A) How the money is invested under this fund :

a) The fund has a bias towards a portfolio of companies which are going to undergo
transformatonal changes in their business prospectus.

b) The money is invested in companies that are at an early stage in their life-cycle and
are at the start of a period of high growth and profitability.

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c)The investments will attempt to capture shifts in the business environment with
regard to new business opportunities, new technologies, new trends etc.

B) Fund strategies:

a)AMC rely on in-house primary research of companies in this portfolio.This requires


meeting up with top management, employees, dealers, trade bodies etc.

b)The independent mindset to pick-up specific stocks on the basis of large amounts of
homework makes this fund unique and reflects AMC’s belief and expertise.

C) Could there be risks associated with such a fund:

Where there is the prospect of great wealth to be made there is also the reality of risk.

D) For whom is this fund relevant:

For investors who have a 3-5 year horizon a long term plan and the discipline to stay
by it.

E) Benchmark: BSE 200 Index

INTRODUCTION

What is Mutual Fund ?


A mutual fund is a form of collective investment that pools money from many investors
and invests their money in stocks, bonds, short-term money market instruments, other
securities etc. In a mutual fund, the fund manager trades the fund's underlying securities,
realizing capital gains or losses, and collects the the dividend or interest income. The
investment proceeds are then passed along to the individual investors.

A mutual fund is created when investor put their money together. It is therefore a pool of
the investor’s funds.

The term mutual means that investors contribute to the pool and also benefit from the
pool. There are no other claimants to funds. The pool of funds help mutually by investors
is the mutual fund.

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A mutual fund business is to invest the funds thus collected according to the wishes of the
investors who created the pool the invested appoints professional investment mangers, to
mange their funds.

IMPORTANT CHARACTERISTICS OF THE MUTUAL FUND

1. A mutual fund actually belongs to the investors who have pooled their funds.
The ownership of the mutual fund is in the hand of the investor

2. A mutual fund is managed by investment professional and other service


providers who earn a fee for their services from the fund

3. The pool of funds is invested in a portfolio of marketable investments. The


value of the portfolio is update every day.

4. The investor’s share in the fund is denominated by “UNIT”. The value of the
unit changes with changes in the portfolio value every day the value of the unit
of investment is called as the Net Assets Value or NAV.

5. The investment portfolio of the fund is created according to the stated


investment objectives of the fund.

About Mutual Fund Industry

Mutual Funds are financial intermediaries which pool the savings of numerous
individuals and invest the money, thus related in a diversified portfolio of securities,
including equity, bonds debentures and other money market instruments, thus spreading
and reducing risk. The objective of mutual fund is to maximize the return to the investor
who participates in equity indirectly through mutual funds.

Even though the mutual fund industry grown in asset value from Rs.7000 Crores to
2,00,000/- Crores today, this is just the tip of the iceberg. According to most Fund
Managers, the real boom is yet to come.

The sum of Rs.2,00,000/- Crores represents just 3% - 4%


of the total market capitalization of 25,00,000 Crore. This compares poorly with the US,
where the mutual funds have nearly $ 6.8 billion of market capitalization of roughly
Rs.70000 Crore, barely 3% - 4% of total market capitalization.

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This is not expected, because mutual fund history in India, which dates back to
1964, when the first open-ended mutual fund scheme Unit-64 was launched by Unit Trust
of India, is still dominated by it. The focus initially was income earning securities, with
only 20 % of the Corpus going into equity. The early 80’s saw other schemes like the
growing income, fixed income, and monthly income being introduced by the UTI. But it
was only in 1986 that the first pure Growth equity scheme Master share was launched.

1989-90 was another landmark year in the history of mutual funds. For the fist
time, the monopoly of UTI over the industry was broken. The government allowed public
sector banks and insurance companies to enter this sector to bring in some competition.
But it was only in 1993, when the private sector was given the green signal to float
mutual funds, that excitement and competition came. Not only did the Government
allowed Indian companies to float mutual funds, it even allowed foreign funds to set in
shop in India and float funds. Thus, in one stroke, this sector was truly privatized.

Today there are about 12-14 private players in the market including foreign funds
such as Morgan Stanley, besides the nine public sector players and UTI. Together, these
funds have mobilized around Rs.6500 Crore from the market. The collections could have
been better, had not the public sector funds been busy complying with the SEBI
guidelines pertaining to the formation of asset management companies etc.

But the best is yet to come. A number of companies have plans to float mutual
funds at various stages of implementation. Some of the major names which are likely to
come to the market are Tata Sons in collaboration with Kleinwort Benson, ITC Classic
with Thread needle UR, Oppenheimer of US, plus a host of others. And according to
conservative guesstimates, mutual funds are set to collect over Rs.10000 Crore from the
market this year.

The reason for such confidence is that with SEBI firm about the small investor
taking the mutual fund route to investments in the stock market, and the regulatory
changes making it much more difficult to get allotments in primary markets, small
investors will not be left with many opportunities.

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Regulatory Structure of Mutual Fund in India

The structure of mutual fund in India is governed by SEBI (MUTUAL FUND)


regulations 1996. These regulations make it mandatory for mutual funds to have a three-
tier structure of SPONSOR-TRUSTEE-ASSET MANAGEMENT COMPANY (AMC).

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Concept and role of Mutual Fund

A Mutual Fund is common pool of money into which Investor place their
contributions that are to be invested in accordance with a stated objective. The ownership
of the Fund is thus joint or “mutual”; the fund belongings to all investors.
A single investor’s ownership of the fund is in the same proportion as the amount
of the contribution made by him or her bears to the total amount of the fund.

A Mutual fund uses the money collected from investors to buy those assets, which
are specifically permitted by its stated investment objective. Thus, an Equity Fund would
buy mainly Equity assets-ordinary shares, preference shares, warrants etc. A bond fund
would mainly buy debt instruments such as debentures, bonds or government securities.
It is these assets, which are owned by the investors in the same proportions as there
contribution bears to the total contribution of all investors put together.

When an investor subscribes to a mutual fund, he or she buys a part of these assets or
the pool of funds that are outstanding at that time. It’s no different from buying
“shares” of a joint stock company, in which case the purchase makes the investor a
part owner of the company and its assets. In fact, in the USA, a Mutual fund is
constituted as an investment company and an investor “buys into the fund”, meaning
he buys the shares of the fund. In India, a mutual fund is constituted as a Trust and the
investor subscribes to the “units “ issued by the fund, which is where the term unit
Trust comes from.

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Types of Mutual Funds Schemes

Schemes floated by the various mutual funds are essentially of two types, namely open-
ended and close-ended. The basic characteristics of these two types of mutual fund
schemes are given below:

OPEN ENDED SCHEMES:

Open-ended schemes are available for subscription all the year round excluding the
period of book-closing. They may or may not have a specified redemption period. The
sale and repurchase prices are fixed by the mutual fund concerned from time to time.
Repurchases are generally allowed al specified rated.

Each open-ended scheme must have a minimum corpus of Rs.50 crore. In case the fund
manager is not able to raise this amount at the time of issue, or 60 % of the targeted
amount whichever is higher, the entire subscription must be returned to the investor.

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CLOSE-ENDED SCHEMES

These are open for subscription only during a specified period. Generally the redemption
dates are also specified when the investor can redeem their units. The duration of this
scheme varies: normally it is 5-7 years. Repurchase during the intervening period may or
may not be allowed. Some of the schemes though have a repurchase facility after a
certain period. Many of these schemes are listed in stock exchanges, except for some of
the close-ended income schemes .

Equity Oriented Schemes :


These schemes, also commonly called Growth Schemes, seek to invest a majority of their
funds in equities and a small portion in money market instruments. Such schemes have
the potential to deliver superior returns over the long term. However, because they invest
in equities, these schemes are exposed to fluctuations in value especially in the short
term.

Equity schemes are hence not suitable for investors seeking regular income or needing
to use their investments in the short-term. They are ideal for investors who have a
long-term investment horizon. The NAV prices of equity fund fluctuates with market
value of the underlying stock which are influenced by external factors such as social,
political as well as economic. HDFC Growth Fund, HDFC Tax saver and HDFC
Index Fund are examples of equity schemes.

Debt Based Schemes: These schemes, also commonly called Income Schemes, invest in
debt securities such as corporate bonds, debentures and government securities. The prices
of these schemes tend to be more stable compared with equity schemes and most of the
returns to the investors are generated through dividends or steady capital appreciation.
These schemes are ideal for conservative investors or those not in a position to take
higher equity risks, such as retired individuals. However, as compared to the money
market schemes they do have a higher price fluctuation risk and compared to a Gilt fund
they have a higher credit risk.

 INCOME SCHEMES : These schemes provide returns in the form


of dividends. The returns may be cumulative or non-cumulative on a monthly,
quarterly, or yearly basis. Mutual Funds carry market risks and are prohibited
by SEBI from declaring any guaranteed rate of returns. The money under such
schemes are predominantly invested in fixed income securities like debentures,
bonds, Government securities etc.

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 Liquid Income Schemes: Similar to the Income scheme but with a
shorter maturity than Income schemes. An example of this scheme is the
HDFC Liquid Fund.

 Money Market Schemes: These schemes invest in short term


instruments such as commercial paper (“CP”), certificates of deposit (“CD”),
treasury bills (“T-Bill”) and overnight money (“Call”). The schemes are the
least volatile of all the types of schemes because of their investments in money
market instrument with short-term maturities. These schemes have become
popular with institutional investors and high net worth individuals having
short-term surplus funds.

Gilt Funds: This scheme primarily invests in Government Debt. Hence the investor
usually does not have to worry about credit risk since Government Debt is generally
credit risk free. HDFC Gilt Fund is an example of such a scheme.

HYBRID SCHEMES :

These schemes are commonly known as balanced schemes. These schemes invest
in both equities as well as debt. By investing in a mix of this nature, balanced schemes
seek to attain the objective of income and moderate capital appreciation and are ideal for
investors with a conservative, long-term orientation. HDFC Balanced Fund and HDFC
Children’s Gift Fund are examples of hybrid schemes.

Interval Schemes: These schemes combine the features of open-ended and closed-ended
schemes. They may be traded on the stock exchange or may be open for sale or
redemption during pre-determined intervals at NAV based prices.

From the investments point of view the existing schemes can be further divided into 4
major categories :

1. GROWTH SCHEMES : These are usually close-ended schemes. The aim of such
schemes is to provide capital appreciation to their investors and accordingly a
substantial part of the Corpus is invested in equities an convertible debentures.
Such schemes are usually listed in the major stock exchanges and the capital

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2. appreciation is reflected in their market value i.e. NAV. They may or may not
declare dividends even though the declaration of annual dividends represents the
health of a scheme.
3. EQUITY-LINKED SCHEMES (ELSS) : These are popularly known as tax-
planning schemes . They are essentially close-ended growth schemes in nature.
They are floated by almost all the public sector mutual funds in the last quarter of
each financial year, some of the essential characteristics are :
a. Investment up to a ceiling of Rs.1,00,000/ come under Section 80C of the
Income Tax Act.
b. Repurchase is allowed after a specified period- usually 3 years.
c. During the lock-in period of 3 years their units cannot be traded, pledged or
transferred.

VALUE-ADDED SCHEMES : they are in addition to the growth/income schemes.


Some of the mutual funds schemes have provision for ‘value addition’. This is usually
in the nature of personal insurance cover for accidents, etc. GIC Mutual Fund was the
first to introduce this concept.

Major Mutual Fund Companies in India


1) ABN AMRO Mutual Fund

2) Birla Sun Life Mutual Fund

3) Bank of Baroda Mutual Fund

4) HDFC Mutual Fund

5) HSBC Mutual Fund

6) ING Vysya Mutual Fund

7) Prudential ICICI Mutual Fund

8) Sahara Mutual Fund

9) State Bank of India Mutual Fund

10) TATA Mutual Fund

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11) Kotak Mahindra Mutual Fund

12) UTI Mutual Fund

13) Reliance Mutual Fund

14) Standard Chartered Mutual Fund

15) Franklin Templeton India Mutual Fund

16) Morgan Stanley Mutual Fund India

17) Escorts Mutual Fund

18 Alliance Capital Mutual Fund

19) Benchmark Mutual Fund

20) Canbank Mutual Fund

21) Chola Mutual Fund

22) LIC Mutual Fund

23) GIC Mutual Fund

5 Easy Steps to Invest in Mutual Funds

1) Search: “Where to look for if we want to invest in MF”

a) Contacting an Investment advisor in a bank or a brokerage house or an Independent


Financial Advisor is the first step to gathering information.

b) Mutual funds units can also be bought over the Internet.

c) Mutual funds are much like any other product, in that there are manufacturers who
provide the product and there are dealers who sell them.

2) Evaluation: “Evaluation: choosing the right mutual fund for you


As an investor one may

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a) for the short term or long term want to invest

b) want regular income or growth

c) want to target lower risk or higher returns

d) be convinced of a particular sector and want to invest in it

3) Purchase:
a) Systematic Investment Plan (SIP): Allows you to save a part of your income
regularly. Also used to reduce risk when investing in schemes targeting aggressive
growth.

b) Systematic Withdrawal Plan (SWP): Allows you to withdraw a part of your


investment regularly. Used when you want to withdraw your investment for a specific
regular payment, like insurance premium payments of monthly/quarterly frequency.

c) Automatic debit: Saves the hassle of writing a cheque when making an investment.
Your account is debited automatically for the amount invested.

d) Dividend Plan :

A) Dividend Payout: Under this plan investor can redeem his/her dividend at specific
times.

B) Dividend Reinvestment: Under this plan investor’s dividend is reinvested back to it’s
principal amount which therefore increase the number of units investor is holding.

e) Growth: Under this plan income generated from investment will put back to it’s
invested amount which therefore increases the value of each unit customer is holding.

4) Post Purchase Monitoring:


Once you have invested in an ongoing fund, expect a period of two to three days before
you receive an account statement on the address mentioned by you in your application
form.

a) The Account Statement

Your account statement indicates your current holding in the scheme that you have
invested.

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b) The transaction slip: The transaction slip at the end of the account statement can be
used for additional purchases, redemptions or to intimate the mutual fund on any change
in bank mandates/address.

c) NAV: The NAVs of all the open-ended schemes are published at the fund's website,
financial newspapers and AMFI (Association of Mutual Funds) web-site
www.amfiindia.com.

5) EXIT:
Every AMC advice that every investor should monitor the his/her units NAV periodically
but AMC also recommend their unit holders to not get swayed by short term
considerations in deciding their exit.

Redemption: In case of open ended funds investor can redeem his/her invested amount.
Most funds take 1-3 days to credit your account with your redemption proceeds.

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5 Pointers to Measure Mutual Fund Performance

MEASURES DESCRIPTION IDEAL RANGE

STANDARD Standard Deviation allows to evaluate Should be near to it’s mean


DEVIATION the volatility of the fund. The return.
standard deviation of a fund
measures this risk by measuring the
degree to which the fund fluctuates in
relation to its mean return.
BETA Beta > 1 = high risky
Beta is a fairly commonly used Beta = 1 = Avg
measure of risk. It basically indicates Beta <1 = Low Risky
the level of volatility associated with
the fund as compared to the
benchmark.

R-SQUARE R- square measures the correlation of R-squared values range


a fund’s movement to that of an between 0 and 1, where 0
index. R-squared describes the level represents no correlation and
of association between the fund's 1 represents full correlation.
volatility and market risk.

ALPHA Alpha is the difference between the Alpha is positive = returns


returns one would expect from a of stock are better then
fund, given its beta, and the return it market returns.
actually produces. It also measures Alpha is negative = returns
the unsystematic risk . of stock are worst then
market.
Alpha is zero = returns are
same as market.
SHARPE RATIO
Sharpe Ratio= Fund return in excess
The higher the Sharpe ratio,
of risk free return/ Standard
the better a funds returns
deviation of Fund. Sharpe ratios are
relative to the amount of risk
ideal for comparing funds that have a
taken.
mixed asset classes.

Tax Rules For Mutual Fund Investors*

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As per the Finance Bill 2007
Equity schemes Other schemes Dividend income Dividend distribution tax

Short Long Short Long TDS All Schemes Equity Liquid Other
Term Term Term Term Schem Schemes Schemes
Capita Capital Capital Capita es
l Gains Gain Gains l Gain

Resident 10% NIL AS PER 10% NIL TAX FREE NIL 28.32% 14.16%
Individual SLAB (20% (25% (12.5%
/ HUF with +10%surc +10%surc
indexa harge+edu harge+3%
tion) cation education
cess) cess)

Partnership 10% NIL 30% 10% NIL TAX FREE NIL 28.32% 22.66%
Firms (20% (25% (20%
with +10%surc +10%
indexa harge+edu surcharge
tion) cation +3%
cess) education
cess)
AOP/BOI 10% NIL AS PER 10% NIL TAX FREE NIL 28.32% 22.66%
SLAB (20% (25% (20%
with +10%surc +10%
indexa harge+edu surcharge
tion) cation +3%
cess) education
cess)
Domestic 10% NIL 30% 10% NIL TAX FREE NIL 28.32% 22.66%
Companies (20% (25% (20%
with +10%surc +10%
indexa harge+edu surcharge
tion) cation +3%
cess) education
cess)
NRIs 10% NIL AS PER 10% STCG- TAX FREE NIL 28.32% 14.16%
SLAB (20% 30%L (25% (12.5%
with TCG- +10%surc +10%surc
indexa 20%Af harge+edu harge+3%
tion) ter cation education
providi cess) cess)
ng for
indexa
t

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ADVANTAGES OF MUTUAL FUNDS:

POINTS:

 Portfolio Diversification – Mutual Funds normally invest in a well-diversified


portfolio or securities where the investor can hold a diversified investment
portfolio even with a small amount of investment.

 Professional Management – The investors does not have the skills and the
resources of their own to succeed in today’s fast moving, global and sophisticated
markets. Thereby they benefits from the professional management skills brought in
by the fund in the management of investor’s portfolio.

Diversification of Risk- Since the investor acquires a diversified portfolio, it reduces a


risk of loss as compared to investing directly in one or two shares or debentures or other
instruments. While investing in a pool of funds with other investors any loss, on one or
two securities is also shared with other investors. This risk reduction is one

 of the most important benefits of a collective investment vehicle like the mutual
fund.

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 Reduction of Transaction Costs –When going through a fund the investor has the
benefit of economies of scale, funds pay lesser cost because of larger volumes, and
this benefit is passed onto its investors.

 Liquidity- Investment in a mutual fund is more liquid as an investor can liquidate


the investment, by selling the unit to the fund if open-end, or selling them in a
market if the fund is close-end and collect funds at the end of the period specified
by the mutual fund or the stock market.

 Convenience and Flexibility – Mutual Fund management companies offer many


investor services where in the investor can easily transfer their holdings from one
scheme to the other, get updated market information, and so on.

DISADVANTAGES OF MUTUAL FUNDS:

 No Control over cost – An investor in Mutual Funds has no control over the
overall cost investing as he pays investment management fees as long as he
remains with the fund. He also pays fund distribution costs, which he would not
incur in direct investing.

 No Tailor-made Portfolios –Investors who invest on their own can build their
own portfolios whereas investing through funds involves delegating this decision
to the fund managers.

 Managing portfolio of fund- Availability of the large number of funds can


actually mean too much choice for the investor wherein he needs an advice on
selecting a fund to achieve his objectives, to suit the situation when he selects
individual shares or bonds to invest in.

Who Can Invest In Mutual Funds In India?

Mutual funds in India are open to investment by:

a) Residents including
1) Resident Indian Individuals
2) Indian Companies

26
3) Indian Trusts/Charitable Institutions
4) Banks
5) Non-Banking Finance Companies
6) Insurance Companies
7) Provident Funds

b) Non Residents including


1) Non-Resident Indians, and
2) Overseas Corporate Bodies (OCBs) and

c) Foreign entities, viz;


1) Foreign Institutional Investors (FIIs) registered with SEBI.

Foreign citizens/ entities are however not allowed to invest in


Mutual funds in India.

27
Comparison of Investment products:
Investor tends to constantly compare one form of investment with another
Investors certainly look for the best returns for different option. However, to determine
which option is better, the comparison should be made in terms of other benefits that the
investor ought to look for in any investment.

Investment Returns Risk Investment Liquidity


Objective Tolerance Horizon
Equity Capital High High Long term High
appreciation
FI Bonds Income Moderate Low Med-long Moderate

Corporate Income Moderate High Med Low


Debentures
Corporate Income Moderate High Med Low
FDs
Bank Income Low Generally Flexible High
Deposits low
PPF Income Moderate Low Long term Moderate

Life Risk cover Low Low Long term Low


Insurance
Gold Inflation Moderate Low Long term Moderate
hedge
Real Estate Inflation High Low Long term Low
hedge
Mutual Capital High High Flexible High
Funds growth &
Income

28
THE FIVE MOST COMMON MISTAKES MUTUAL FUND
INVESTORS MAKE

 Failing to stay invested for a longer period

 Worrying about portfolio turnover or dividends it pays

 Being affected by new in the market when you’re supposed to be investing for the
long term

 Selling out during bad markets

 Being impatient and losing confidence too soon.

INVESTORS THINK LONG TERM BUT ACT SHORT


TERM…..

“Time in the market is more important than timing the


market”

29
Data Interpretation of Investors:
 From the given analysis we see that 75% of the investors do not deal in Mutual
funds but they still believe in the traditional mode of investment, which means
there still exists a high degree of Mutual Fund un-awareness among the people.
Therefore focus should be on Investors education.

 There is a great diversity in the pattern of investment , majority of people who are
mostly the business class people invest for long term as they look for the high
returns and long term capital appreciation. These people have great capacity to take
risk they are called as Risk Takers , while rest invest for short term which mostly
comprise of service class people who go for regular/Monthly income plans i.e.
short term benefits.

 Customers who are aware of the market situations perfectly find it futile to invest
through bank and generally had brokers who refund part of the commission to
them.

30
STANDARD CHARTERD EQUITY FUNDS LOAD
STRUCTURE

FUND NAME LUM SUM LOADS SIP MIN. SIP LOAD


MIN. AMNT AMNT STRUCTURE

SC CLASSIC Rs.5000.00 Entry Load- Rs. 1000.00 Entry load-NIL


EQUITY FUND 2.25% Min:6 mnths Exit Load- 1%
FLEXI CAP Exit Load-NIL For 1 year

SC IMPERIAL Rs.5000.00 Entry Load- Rs. 1000.00 Entry load-NIL


EQUITY FUND 2.25% Min:6 mnths Exit Load- 1%
LARGE CAP Exit Load-1% For 1 year
For 1 year

SC PREMIER Rs.25000.00 Entry Load- Rs. 2000.00 Entry load-


EQUITY FUND 2.25% Min:6 mnths
GROWTH Exit Load-1% 2.25%
FUND For 1 year Exit Load- 1%
For 1 year

31
PRODUCTS/SCHEMS OFFERED BY STAN-C (AMC):

1) Grindlays Super Saver Income Fund- Short Term Plan(GSSIF-ST)


2) Grindlays Super Saver Income Fund- Medium Term Plan(GSSIF-MT)
3) Grindlays Cash Fund (GCF)
4) Grindlays Government Securities Fund- Investment Plan(GGSF-IP)
5) Grindlays Government Securities Fund- Short Term Plan(GGSF-ST)
6) Grindlays Government Securities Fund- PF Plan(GGSF-PF)
7) Grindlays Dynamic Bond Fund(GDBF)
8) Grindlays Floating Rate Fund-Short Term Plan (GFRF-ST)
9) Grindlays Floating Rate Fund- Long Term Plan(GFRF-LT)
10) Standard Chartered All Seasons Bond Fund(SCASBF)
11) Standard Chartered Classic Equity Fund(SCCEF)
12) Standard Chartered Premier Equity Fund(SCPEF)
13) Standard Chartered Imperial Equity Fund(SCIEF)
14) Standard Chartered Enterprise Euity Fund(SCEEF)
15) Standard Chartered Arbitrage Fund(SCAF)
16) Standard Chartered Liquidity Manager(SCLM)
17) Standard Chartered Liquidity Manager Plus(SCLMP)

32
SWOT ANALYSIS OF STANDARD CHARTERED VIZ-A-VIZ
OTHER FUND HOUSES

Strengths: Weakness:

⇒ Brand image. ⇒ Inability to fully cover the


⇒ Image of an Ethical player. outstation market
⇒ Brand Reach ⇒ Lack of manpower.
⇒ Prompt service provider. ⇒ Overshadowing of Home
⇒ Good relationship with Loans.
distributors
⇒ Efficient Sales Staff
⇒ Fair understanding of
market
and competition.

Opportunity: Threats:

⇒ Unexplored/ outstation ⇒ Substitute products like


market. bank
⇒ Target export segment FDs, RDs etc.
aggressively ⇒ New entrants

RISK FACTORS
• Mutual Funds and Securities investment are subject to market risks and there can
be assurance or guarantee that the scheme objectives will be achieved.

• As with any investment in securities, the Net Asset Value of Unit issued under the
Scheme may go up or down depending on the various factors and farces affecting
the capital markets.

33
• Past performance of the Sponsors and their affiliates / AMC / Mutual Fund and its
scheme do not indicate the future performance of the schemes of the Mutual Fund.

• The Sponsors are not responsible or liable for any loss or shortfall resulting from
the operations of the scheme beyond the contribution of Rs 1 lakh each made by
them towards the corpus of the Mutual Fund.

As per SEBI circular ref. SEBI/IMD/CIR No. 10/22701/03 dated December 12, 2003
read with circular ref SEBI/IMD/CIR NO. 1/42529/05 dared June 14, 2005, it is specified
inter alias that each portfolio under a scheme should have a minimum of 20 investors and
no single investor should account for more than 25% of the corpus of such portfolio.

34
INVESTMENT COMPARISON SHEET

FUND NAME EXP. FRONT BCK END MIN INITIAL PORTFOLIO TENURE(YRS)
RATIO % END LOAD% INVESTMENT MANAGER
LOAD% (Rs)

ABN AMRO 2. 24 2. 25 0 5000 PRATEEK 1


OPPORTUNITIES MANAGER

FRANKLIN INDIA 1. 91 2. 25 0 5000 K N SIVA 14


PRIMA SUBRAMANIAM

HDFC PRUDENCE 1. 89 2. 25 0 5000 PRASHANT 13


JAIN

HDFC TOP 200 1. 93 2. 25 0 5000 PRASHANT 5


JAIN

ICICI PRU 2. 26 2. 25 0 5000 DEVEN SANGOI 2


SERVICE
INDUSTRY

RELIANCE 1. 84 2. 25 0 5000 SUNIL 3


GROWTH SINGHANIA

S C CLASSIC 2. 24 2. 25 0 5000 AJAY BODKE 1


EQUITY

S C PREMIER 2. 38 2. 25 0 25000 KENNETH 1


EQUITY ANDRADE

SUNDARAM BNP 1. 98 2. 25 0 5000 N PRASAD NA


PARIBAS SELECT
MIDCAP

TATA EQUITY 2. 26 2. 25 0 5000 M VENUGOPAL 1


OPPORTUNITIES

35
INVESTMENT GRAPH

INVESTMENT COMPARISON
EXPENSE RATIO & LOAD

3
2.5
2 Expense Ratio %
1.5
1 Front End Load %
0.5
0
ICICI Pru
HDFC Top

Reliance
Prudence
Franklin India

S C Premier
Service

S C Classic
opportunities

BNP Paribas
TATA Equity
Opportunities
ABN AMRO

Growth
HDFC

Sundaram
Equity

Equity
200
Prima

TOP 10 FUNDS

DESCRIPTON:

1) High expense ratio means it will affect the returns negatively.


2) Long Tenure means Fund is more trusted.

STATEMENT:

On the basis of above description we can state that STANDARD CHARTERED


PREMIER EQUITY FUND has high expense ratio (2.38) and small tenure.While
FRANKLIN INDIA PRIMA and HDFC PRUDENCE has low expense ratio and long
tenure.

36
PORTFOLIO COMPARISON SHEET

FUND NAME P/E MARKET TURNOVER ASSETS(Rs.Cr) TOP 5


RATIO CAP(Rs. Cr) HOLDINGS (%)

ABN AMRO 41.48 8522. 42 NA 352. 5 24. 81


OPPORTUNITIES

FRANKLIN INDIA 28. 29 2612. 97 155. 02 1596. 14 27. 62


PRIMA

HDFC PRUDENCE 31. 94 4779. 55 158. 68 2522. 49 22. 98

HDFC TOP 200 31. 22 26766. 24 80. 86 1971. 01 25. 72

ICICI PRU 35.09 4742. 92 NA 615. 51 18. 99


SERVICE
INDUSTRY

RELIANCE 29.78 5360. 18 61.75 3923. 9 18. 95


GROWTH

S C CLASSIC 31. 24 20811. 72 NA 365. 1 27. 63


EQUITY

S C PREMIER 43. 53 1821. 59 NA 254. 27 23. 08


EQUITY

SUNDARAM BNP 36. 99 2363. 59 5.11 2151. 51 13. 54


PARIBAS SELECT
MIDCAP

TATA EQUITY 34. 34 6207. 35 2.24 465. 04 21. 89


OPPORTUNITIES

37
MARKET CAP & ASSETS P/E RATIO

0
10
20
30
40
50
ABN AMRO

0
5000
10000
15000
20000
25000
30000
opportunities
ABN AMRO
Franklin India
Franklin India Prima

HDFC
HDFC Prudence

HDFC Top HDFC Top


200
ICICI Pru ICICI Pru
Service
Reliance
Reliance
Growth

TOP 10 FUNDS
S C Classic
TOP 10 FUNDS

S C Classic
S C Premier Equity

S C Premier
PORTFLIOCOMPARISON

Sundaram Equity
P OR TFOLIO C OMPAR ISON
TATA Equity Sundaram
BNP Paribas
PORTFOLIO (P/E RATIO) COMPARISON GRAPH

TATA Equity
Opportunities

Assets (Rs. Cr)


PORTFOLIO (MARKET CAP/ASSETS) COMPARISON GRAPH
P/E Ratio

M arket Cap(Rs. Cr)

38
DESCRIPTON:

1) High P/E ratio means Fund is very actively manage.


2) Large Market Capitalization reveals Organization’s strong position in the market as
well as Organization’s long term growth.
3) Large Assets reveals Organization’s strong financial position and Shareholders
Security.

STATEMENT:
On the basis of above mentioned description we can state that STATNDARD
CHARTERED PREMIER EQUITY FUND has highest P/E ratio but small Market Cap
and Assets.While HDFC PRUDENCE has high P/E ratio, moderate Market Cap and
largest Assets whereas ABN AMRO OPPORTUNITIES has high P/E ratio, largest
Market Cap and low Assets.

39
PERFORMANCE COMPARISON SHEET

FUND NAME 1-MNTH 1-MNTH 6-MNTH 6-MNTH 1-YEAR 1-YEAR


RETURN(%) RANK RETURN(%) RANK RETURN(%) RANK

ABN AMRO 16. 56 10/176 23. 47 4/164 70. 58 4/161


OPPORTUNITIES

FRANKLIN INDIA 12. 19 52/176 8. 31 132/162 46. 68 76/161


PRIMA

HDFC PRUDENCE 7. 23 18/176 10. 53 14/32 42. 78 3/161

HDFC TOP 200 8. 46 150/176 11. 24 103/164 43. 16 95/161

ICICI PRU 9. 29 130/176 14. 91 51/164 81. 64 3/161


SERVICE
INDUSTRY

RELIANCE 12. 63 43/176 18. 19 24/164 60. 82 21/161


GROWTH

S C CLASSIC 12. 1 59/176 14. 21 58/164 44. 87 84/161


EQUITY

S C PREMIER 15. 1 18/176 31. 55 2/164 83. 87 2/161


EQUITY

SUNDARAM BNP 11. 79 64/176 9.17 124/164 38. 84 117/161


PARIBAS SELECT
MIDCAP

TATA EQUITY 11. 57 68/176 16. 56 35/164 51. 59 52/161


OPPORTUNITIES

40
PERFORMANCE (RETURNS) COMPARISON GRAPH

A B N A M R O opportunities
P E R F O R M AN C E C O M P AR IS O N
F rank lin India P rim a
90
80
70 H D F C P rudenc e
60
RETURNS

50 H D F C Top 200
40
30
20 ICIC I P ru S ervic e Indus try
10
0 R elianc e G row th
1-M onth 6-M onth 1-Y ear Return(% )
R eturn(% ) Return(% ) S C Clas s ic E quity
T IM E P ER IO D(IN M O N T H S /YEA R )
S C P rem ier E quity

DESCRIPTION: S undaram B N P P aribas S elec t


M idc ap
1) High returns shows Organization’s high competitiveness & performance

2) High rank shows it’s strong position among it’s competitor’s

41
STATEMENT:

On the basis of returns :

RETURNS ORGANIZATION

1-MONTH HIGH ABN AMRO OPPORTUNITIES

6-MONTH HIGH STANDARD CHARTERED PREMIER


EQUITY

1- YEAR HIGH STANDARD CHARTERED PREMIER


EQUITY

STANDARD CHARTERED PREMIER EQUITY has both 6 months and 1-year high
returns. While ABN AMRO OPPORTUNITIES has a 1-month high returns.

42
RISK & VOLATILITY COMPARISON SHEET

FUND NAME FUND RISK STANDARD SHARPE BETA ALPHA R-SQUARE


GRADE DEVIATION RATIO

ABN AMRO NOT RATED NA NA NA NA NA


OPPORTUNITIES

FRANKLIN INDIA ABOVE 6. 22 0. 5 O. 76 1. 03 0. 48


PRIMA AVG

HDFC PRUDENCE LOW 3. 68 O. 76 0. 86 1. 47 0. 63

HDFC TOP 200 LOW 5. 39 0. 59 0. 91 0. 67 0. 92

ICICI PRU NOT RATED NA NA NA NA NA


SERVICE
INDUSTRY

RELIANCE AVG 6. 28 0.64 0. 83 1.73 0. 57


GROWTH

S C CLASSIC NOT RATED NA NA 0.92 3.40 NA


EQUITY

S C PREMIER NOT RATED NA NA 0.82 5.63 NA


EQUITY

SUNDARAM BNP LOW 5.7 0. 72 0. 69 2.18 0. 48


PARIBAS SELECT
MIDCAP

TATA EQUITY ABOVE 6.27 0. 54 0. 97 0. 73 0. 78


OPPORTUNITIES AVG

43
STATEMENT:

Because of Non-Availability of figures for some Funds we cannot give any comment
under this parameter. However on the basis of available data we can conclude that
FRANKLIN INDIA PRIMA & TATA EQUITY OPPORTUNITIES are little risky funds.

44
NAV COMPARISON SHEET

FUND NAME NAV AS ON 52 AS ON 52 WEEKS LOW AS ON


WEEKS
HIGH

ABN AMRO 26. 51 JULY 13, 07 26. 51 JULY 13, 07 14. 06 19-jul-06
OPPORTUNITIES

FRANKLIN INDIA 236. 04 JULY 13, 07 236. 04 JULY 13, 07 149. 47 24-jul-06
PRIMA

HDFC PRUDENCE 128. 14 JULY 13, 07 128. 14 JULY 13, 07 85. 88 19-jul-06

HDFC TOP 200 124. 89 JULY 13, 07 124. 89 JULY 13, 07 81. 59 19-jul-06

ICICI PRU 18. 11 JULY 13, 07 18. 11 JULY 13, 07 9. 38 19-jul-06


SERVICE
INDUSTRY

RELIANCE 324. 04 JULY 13, 07 324. 04 JULY 13, 07 183. 75 24-jul-06


GROWTH

S C CLASSIC 18. 17 JULY 13, 07 18. 17 JULY 13, 07 11. 51 21-jul-06


EQUITY

S C PREMIER 17. 72 JULY 13, 07 17. 72 JULY 13, 07 9. 06 24-jul-06


EQUITY

SUNDARAM BNP 103. 32 JULY 13, 07 103. 32 JULY 13, 07 68. 98 24-jul-06
PARIBAS SELECT
MIDCAP

TATA EQUITY 69. 55 JULY 13, 07 69. 55 JULY 13, 07 41. 86 24-jul-06
OPPORTUNITIES

45
NAV ( 52 WEEKS H/L) COMPARISON GRAPH

NAV COMPARISON
NAV(52 WEEKS H/L)

350
300
250
200 52 Weeks High
150 52 Weeks Low
100
50
0 ICICI Pru
Franklin India

HDFC Top

S C Premier
Prudence

Reliance
opportunities

S C Classic

BNP Paribas
TATA Equity
Opportunities
Service
ABN AMRO

Growth

Sundaram
HDFC

Equity

Equity
200
Prima

TOP 10 FUNDS

DESCRIPTION:

NAV: Net Asset Value shows the per unit value of a mutual fund unit that an investor is
holding. High/Low NAV shows that by how much amount the invested amount is
appreciated or depreciated.

STATEMENT:

On the basis of above description we can state that RELIANCE GROWTH has the
highest all time high (52 weeks high) NAV 324.04

While STANDARDCHARTERED PREMIER EQUITY has the all time low (52 weeks
low) NAV 9.06

46
A) CO-VARIANCE =

1) Σ (Ra-Ra (bar))*(Rj-Rj(bar))/n-1 = 3.863

2) Σ (Rm-Rm (bar)*(Rj-Rj(bar))/n-1 = 4.347

B) VARIANCE (σ2 ) =

(Rj-Rj (bar)2 )
Σ= = 4.703
n-1

C) BETA (β) = COVARIANCE

VARIANCE

1) STANDARD CHARTERED PREMIER EQUITY FUND (β) = 0.821

2) STANDARD CHARTERED CLASSIC EQUITY FUND (β) = 0.924

D) ALPHA (α) =

1) STANDARD CHARTERED PREMIER EQUITY FUND


Ra (bar) – β * Rj (bar) = 5.639

2) STANDARD CHARTERED CLASSIC EQUITY FUND


Rm (bar) – β * Rj (bar) = 3.400

E) STANDARD DEVIATION (σ) =

(σ) = SQUARE ROOT OF VARIANCE = 2.168

47
FUND NAME VARIANCE CO-VARIANCE STANDARD BETA ALPHA
DEVIATION

S C PREMIER 3.863 0.821 5.639


EQUITY FUND

S C CLASSIC 4.347 0.924 3.400


EQUITY FUND

BENCHMARK 4.703 2.168


BSE-200

STATEMENT:

On the basis of above table we can state that S C Premier Equity & S C Classic Equity
fund are less risky in comparison to their benchmark index BSE-200 as their Beta values
are less then 1 as well as they also have better returns then benchmark index as their
Alpha values are positive.

48
SNAP-SHOT(ALL 5 PARAMETERS) COMPARISON SHEET

1) HT-highest on parameter,

2) H-high on parameter,

3) A-avg on parameter

4) L-low on parameter ,

5) LT- lowest on parameter,

6) NR-not rated

7)*-better then others,

8) #-worst then others,

9) $-best on the parameter

49
PARAMETERS ABN FR.IND HDFC HDFC ICICI REL. S C SC SND. TATA. REMARKS
AMRO PRIMA PRU. TOP SERV. GRW. CLASS. PRE. MID EQU.
OPP. 200 EQU. EQU. CAP. OPP.

INVESTMENT H L L L A LT H HT A H *(FR,HDFC,
(EXP.RATIO) REL)
#(S C PRE)

PORTFOLIO H LT A A H L A HT H H $(S C PRE)


(P/E RATIO) *(ABN,ICICI
SND,TATA)
#(FR.IND)

PRFMNCE H L L L H A A HT LT A $(S C PRE)


(1-yr. *(ABN,ICICI)
RETURNS) #(SND BNP)

RISK & NR A L L NR A A A L A *(ALL LOW


VOLATILITY RISK
(RISK GRADE) GRADE
FUNDS)

NET ASSET L H A A L HT L L A L $(RELGRW)


VALUE *(FR.IND)
(52-WEEKS
HG)

50
GENERAL CATEGORY COMPARISON SHEET

FUND NAME LAUNCH DATE CATEGORY RATING

ABN AMRO OPP. MAR-05 Equity: Diversified NOT RATED

FRANKIN INDIA NOV-93 Equity: Diversified

HDFC PRUDENCE JAN-94 Hybrid:Equity:


Oriented

HDFC TOP 100 SEP-96 Equity: Diversified

ICICI PRU.SERV NOV-05 Equity: Diversified NOT RATED

RELIANCE OCT-95 Equity: Diversified


GROWTH

S C CLASSIC JUL-05 Equity: Diversified NOT RATED

S C PREMIER SEP-05 Equity: Diversified NOT RATED

SND BNP SELECT JUL-02 Equity: Diversified


MID CAP

TATA EQUI. MAR-03 Equity: Diversified


OPP.

51
SUGGESTION ON THE BASIS OF LIFE STAGES.

In a general perspective there are 3 basic motives behind holding the cash :

1) Speculative

2) Precautionary

3) Transactional

After the intense market survey on mutual fund investment is done we have bifurcated
people in 2 segments. We have done bifurcation mainly on the basis of life stages. After
survey we found that people at the age range of 25 years to 40 years who come under the
income bracket of Rs. 15000 to Rs. 30000 per month have more risk appetite and they
can easily take huge risk because of their speculative behavior then to the people who are
at the age range of 55 years and above and come under the same income bracket
(however people on this edge of their life cycle are mostly depend either on their family
members or on pension or on their lifetime savings or investments for e.g Life Insurance,
Post Office savings, Bank savings account, house rent, FD’s etc.) have less risk
appetite . They don’t want to take high risk on their hard earned money and are happy
with investments if it is giving conservative returns but secure their principal amount.

Also people at the age of 55 and above are in great need of cash in hand because at this
age most of them are done with their investments. Therefore they are more interested in
investments which can get them sufficient cash at regular intervals.

In general people at the age range of 25 years to 35 years are very speculative, and
because they are earning regular income so they don’t need to hold much cash in need,
they can also afford their daily expenses very easily. Therefore they are more interested
in investments which are little more risky but can get them handsome returns. As people
at this age have huge future needs for e.g having their own home and so they also more
interested in long term investments.

Hence on the basis of this survey and analysis we have done above we recommend
following funds to these 2 segments of investors.

52
SUGGESTED FUNDS FOR BOTH SEGMENTS OF INVESTORS

INVESTORS ABN FR.INDIA HDFC HDFC ICICI REL SC SC SND. TATA


AMRO PRIMA PRU. TOP PRU. GRW. CLAS. PRE. BNP. EQU.
OPP. 200 SERV. EQU EQU. SELECT OPP.
MID
CAP
BETWEEN
25y. TO 35y       

55y &
ABOVE    

53
RISK FACTORS

• Mutual Funds and Securities investment are subject to market risks and there can
be assurance or guarantee that the scheme objectives will be achieved.

• As with any investment in securities, the Net Asset Value of Unit issued under the
Scheme may go up or down depending on the various factors and farces affecting
the capital markets.

• Past performance of the Sponsors and their affiliates / AMC / Mutual Fund and its
scheme do not indicate the future performance of the schemes of the Mutual Fund.

• The Sponsors are not responsible or liable for any loss or shortfall resulting from
the operations of the scheme beyond the contribution of Rs 1 lakh each made by
them towards the corpus of the Mutual Fund.

54
BIBLIOGRAPHY

1. Fact and Figures collected by STANDARD CHARTERED


(AMC).

2. Pamphlets collected from STANDARD CHARTERED (AMC).

3. WWW.VALUERESEARCHONLINE.COM

4.Presentation by STANDARD CHARTERED (AMC).

55