Performane Evaluation of Mutual Funds

PERFORMANCE ANALYSIS OF DIFFERENT MUTUAL FUND
COMPANYS BY USING PORTFOLIO EVALUATION TECHNICS

REPORT SUBMITTED IN PARTIAL FULFILLMENT OF MASTER
DEGREE
BY
Sruti Suar(0906286019)
Srusti Academy Of Management Page 1
PREFACE
Finance & its functions are the part of economic activity. Finance is very
essentially
needed for all types of organizations viz; small, medium, large-scale
industries &
service sector. Hence the role of finance manager & the subject finance
accounting
gained maximum importance. Liberalization, globalization & privatization
created new challengers to entrepreneur & corporate in carrying they’re
day to day activities. So,“finance is regarded as the life blood of a
business organization.”
Master of Business Administrator is professional course which develop a

new body of knowledge & skill set & make as available for those seeking
challenging carriers.
The goal of the Summer Training is to give a corporate exposure to the

students as well as to give them an opportunity to apply theory into the
practice. The real business problems are drastically different from class-
room case solving. Summer Project aims to providing little insight into
working of an organization to a management trainee.
Among every stage of knowledge being inculcated in students, practical

training in the corporate world plays a significant role in exhibiting and
pruning their capabilities.
The purpose behind writing a report is to put in to works the practical

training that is
imparted into me that gives a better and a clear understanding of the
experience I got.
“PERFORMANCE ANALYSIS OF DIFFERENT MUTUAL FUND

COMPANYS BY USING PORTFOLIO EVALUATION TECHNICS”
ACKNOWLEDGEMENT
In pursuit of an MBA degree, summer internship is a critical component of
the entire
process. ‘INDIA INFOLINE’ has given me the opportunity to gain
invaluable experience under the guidance of Mr. Sibajee Meher(Regional
Manager,Acharaya Vihar,BBSR). Their continuous support and valuable in
hand experience provided me with the conceptual understanding and
practical approach needed to work efficiently for this project.
I would like to pay my regards and sincere thanks to my in charge Prof.
Mr. N.S Nanda(H.O.D , MBA) for Stimulating suggestions and
encouragement helped me in all the time of my internship.
Last but not the least; I also would like to thank the entire staff of IIFL and
all my friends and colleagues who helped whenever I faced any difficult
situation.
I hope this report, reflecting my learning in the past six weeks, is as

beneficial to the organization as it had been to me.
Again, I sincerely thank all of them.
SRUTI SUAR
DECLARATION
I, Ms. Sruti Suar hereby declare that this project report is the record of
authentic work carried out by me during the period from 26th april 2010 to
13th aug 2010 and has not been submitted to any other University or
Institute for the award of any degree.
Signature
Name of the Student
Date
GUIDE CERTIFICATE
This is to certify that Ms. Sruti Suar of Srusti Academy Of Management,

bearing Regd no: 0906286019 has successfully completed the project
work titled “Performance Analysis Of Different Mutual Fund
Companies By using Portfolio Evaluation Technics” in partial
fulfilment of requirement for the completion of MBA course as prescribed
by Biju Pattnaik University Of Technology, Rourkela,Orissa.
This project report is the record of authentic work carried out by her
during the period from 26th april 2010 to 13th aug 2010.
She has worked under my guidance.
Signature
Name
Project Guide (Internal)
Date:
Counter signed by
Signature
Name
Vice-Principal
Date:
CHAPTER OUTLINE
While preparing this project report I got the knowledge about various
aspects regarding financial decisions made in organisation like “INDIA
INFOLINE” the business world.
My project is divided into 5 chapters & they are given as under.
1. Chapter 1 deals with introduction of the mutual fund, need, objective &
scope, methodology used and the limitations of the study.
2. Chapter 2 states the mutual fund industry profile and company profile.
3. Chapter 3 deals with review of literature.
4. Chapter 4 basically states the Analysis and interpretation of the Mutual
Funds.
5. Chapter 5 deals with the use of findings, conclusion, Suggestions.
CONTENTS:
CHAPTER : I
BACKGROUND OF THE STUDY
Today there are plenty of investment avenues open. Some of them
include banks deposits, bonds, stocks, mutual fund investments and
corporate debentures. Investors may invest money in banks, bonds and
corporate debentures where the risk is low and so are the returns. On the
contrary, stocks of companies have high risk but the returns are also
proportionately high.
The recent trends since last year clearly suggest that the average
investors have lost money in equities. People have now started opting for
portfolio managers who have the expertise in stock markets. There are
many institutions in India which provide wealth management services. An
average investor has found refuge with the mutual funds.
There have been a lot of changes in the mutual fund industry in past few
years. Lots of multinational companies have bought their professional
expertise to manage funds worldwide. In the past few months there has
been consolidation going on in the mutual fund industry.
In India now offer a wide range of schemes to choose.
Mutual funds are turned to be the most preferred choice worldwide for
both small and big investors due to their numerous advantages. It's all
about long term financial planning. These benefits mainly include
diversification, professional management, potential of returns, efficiency
and easy to use.
Mutual fund investments carry low risk because of their diversified nature.
It is important to understand the benefits of mutual funds before investing
the money you really care about.
The size of Indian mutual fund industry has grown in recent few years.
India can now boast of having dominance in this industry. The total Asset
Under Management popularly known as AUM has increased from Rs.1, 01,
565 crores in January 2000 to Rs.5, 67, 601.98 crores in April 2008.
According to the Association of Mutual Funds in India, the growth of

mutual fund industry has been exceptional. This industry has indeed come
a very long way with only 40 players in the market and more than 500
schemes.
One of the major factors contributing to the growth of this industry has
been the booming stock market with an optimistic domestic economy.
Second most important reason for this growth is a favorable regulatory
regime which has been enforced by SEBI. This regulatory board has
improved the market surveillance to protect the investor's interest.
NAV is directly proportionately to the bearish trends of the market. Top
mutual funds also suffer because of the fluctuations in the market. The
pooled money is invested in shares, debentures and treasury bills and
thus has high risk involved.
Indian mutual funds however reveal this multi-dimensional avenue and all
the intricacies in a highly fashionable manner. It provides a lot of scope to
understand the scenario and make some thoughtful investments for
decent returns.
In order to invest in the best mutual funds, it is important to perform a

comparative study. It is important to study about the returns given by
AMC Mutual Funds and perform a comparative analysis. Remember, every
problem has several researches involved in it, each backed by study.
Some of the top mutual funds in India are:

 Reliance Mutual Fund
 UTI Mutual Fund
 HDFC Mutual Fund
 Prudential ICICI Mutual Fund
 SBI Mutual fund
 DSP BlackRock Mutual Fund
 Franklin Templeton Mutual fund
OBJECTIVES OF THE STUDY

1. To know the awareness among the potential investors about the
various products and services offered by IIFL.
2. To know the awareness of mutual fund among the people.
3. To measure the performance of various mutual fund companies by

using portfolio evaluation techniques such as Sharpe ratio,
4. To see the interest of people in investing in mutual fund.
5. To know the investment behaviour of investors in mutual fund

according to the different age group.
METHODOLOGY OF THE STUDY
Methodology basically means the selection of the various methods and
techniques in the research-conducted. The various steps includes: -
1. Selection of a representative sample from the general population, which
depicts the characteristics of the complete population.
2. Application of various tools and techniques to obtain relevant
information related to a case.
3. Collection of relevant data.
4. Analysis and interpretation of the data.
5. Generation of a final report.
RESEARCH DESIGN
There are 40 mutual fund houses currently operating in India.
For the purpose of the research, I have selected top 10 fund houses, from
that I have chosen 5 mutual fund houses as mentioned under:
 SBI Mutual Fund
 Reliance
 HDFC mutual fund
 Franklin Templeton
 DSP Blackrock mutual fund
The following methodology is adopted for evaluation of performance of

these selected companies.
Step1: Selection of few well-performing schemes of Big Fund Houses of

India.
Step2: Collection of data i.e. NAVs of 1yr for each scheme of mutual Funds
dated from 1st sept 2009 to 1st sept 2010.
Step3: Calculation of different ratios.
Step3: Analyses ratios and their relevance for evaluating these funds.
Step4: Generation of a project report.
DATA COLLECTION
Data can be collected through the primary sources as well as
through the secondary souses.
The primary data collection was the most important part of the project.
This includes
collecting the information through field research. For collecting
information, a personal interview was conducted with the help of
questionnaire and the required information was collected for the
respondents.
The secondary data collection includes collection of data through

secondary sources like from magazines, news papers, internet etc. The
NAVs of each scheme was collected from internet.
DATA ANALYSIS
After collecting the data, data is to be analyzed. The findings and the
analysis have been mentioned further in the report.
LIMITATIONS OF THE STUDY

 Limited information through secondary research report is basic
hindrance in
finding out the true results related to investments in mutual fund
schemes by an investor.
 Sample size is limited to 100 only thus sample size does not
adequately represent the national market.
 Market is very demography.
 Limited time was another constraint.
 Extreme variability in MARKET.
 Unawareness among investors is next in the line. The investor does
not
want to invest in Mutual Funds because of the myth that investment
in these
funds lead to insensitive returns. They think that market is highly
volatile and will not be able to give him the secured returns.
 The investor also does not want to invest because of the greater risk
attached with equity. Rather, he wants to invest in a fixed
instrument from where he may be able to get secured returns
instead of having unasserted returns.
CHAPTER : II
COMPANY PROFILE:
The IIFL (India Infoline) group, comprising the holding company, India
Infoline Ltd (NSE: INDIAINFO, BSE: 532636) and its subsidiaries, is one of
the leading players in the Indian financial services space. IIFL offers advice
and execution platform for the entire range of financial services covering
products ranging from Equities and derivatives, Commodities, Wealth
management, Asset management, Insurance, Fixed deposits, Loans,
Investment Banking, GoI bonds and other small savings instruments. IIFL
recently received an in-principle approval for Securities Trading and
Clearing memberships from Singapore Exchange (SGX) paving the way for
IIFL to become the first Indian brokerage to get a membership of the SGX.
IIFL also received membership of the Colombo Stock Exchange becoming
the first foreign broker to enter Sri Lanka. IIFL owns and manages the
website, www.indiainfoline.com, which is one of India’s leading online
destinations for personal finance, stock markets, economy and business
and also www.5paisa.com.
A network of over 2,500 business locations spread over more than 500
cities and towns across India facilitates the smooth acquisition and
servicing of a large customer base. All offices are connected with the
corporate office in Mumbai with cutting edge networking technology. The
group caters to a customer base of about a million customers, over a
variety of mediums viz. online, over the phone and at each branches.
IIFL has been awarded the ‘Best Broker, India’ by FinanceAsia and the
‘Most improved brokerage, India’ in the AsiaMoney polls. India Infoline
was also adjudged as ‘Fastest Growing Equity Broking House - Large
firms’ by Dun & Bradstreet. A forerunner in the field of equity research,
IIFL’s research is acknowledged by none other than Forbes as ‘Best of
the Web’ and ‘…a must read for investors in Asia’. Our research is
available not just over the Internet but also on international wire services
like Bloomberg, Thomson First Call and Internet Securities where it is
amongst one of the most read Indian brokers.
Vision
“Our vision is to be the most respected company in the financial services
space.”
Mission
“To become a full-fledged financial services company known for its quality
of advice, personalized services and cutting edge technology.”
Management Team
R Venkataraman
Nirmal Jain Nilesh Vikamsey Sat Pal Khattar
Executive
Chairman, Independent , Non Executive ,
Director, India Infoline Moneyline credit
Managing Director Director Director
Investment
Service
India Infoline
India Infoline
Marketing &
Housing Finance
Services
India Infoline India Infoline
Commodities Distribution
Mr.Kranti Sinha Mr Arun K. Purvar VenkatSubrama
Corporation
Independen Independent
India Infoline nian
Director, Director, chartered
Media & Research
Accountant
Services
INDIA INFOLINE
LTD.
(NSE: India Infoline India Infoline

INDIAINFO, (Asia) Pte Insurance services
BSE: 532636
Bloomberg: IIFL India Infoline
IN) India Infoline
wealth India Infoline
Management Insurance Brokers
CORPORATE STRUCTURE
India Infoline
Realty
India Infoline
Capital
India Infoline
Venture
(Corporate Overview – India Infoline Ltd.)
• The above chart does not cover all group companies
India Infoline refers to India Infoline Ltd and its group companies.
• India Infoline Media and Research Services Limited

• India Infoline Commodities Limited
• India Infoline Marketing & Services
• India Infoline Investment Services Limited
• IIFL (Asia) Pte Limited
• India Infoline.com Distribution Services Ltd.
• Money Tree Consultancy Services
 India Infoline Media and Research Services Limited: The content
services represent a strong support that drives the broking, commodities,
mutual fund and portfolio management services businesses. Revenue
generation is through the sale of content to financial and media houses,
Indian as well as global.
 India Infoline Commodities Limited. India Infoline Commodities Pvt

Limited is engaged in the business of commodities broking. Their
experience in securities broking empowered them with the requisite skills
and technologies to allow them to offer commodities broking as a contra-
cyclical alternative to equities broking. They enjoy memberships with the
MCX and NCDEX, two leading Indian commodities exchanges, and recently
acquired membership of DGCX.
 India Infoline Marketing & Services: India Infoline Marketing and

Services Limited is the holding company of India Infoline Insurance
Services Limited and India Infoline Insurance Brokers Limited.
a) India Infoline Insurance Services Limited is a registered

Corporate Agent with the Insurance Regulatory and Development
Authority (IRDA). It is the largest Corporate Agent for ICICI
Prudential Life Insurance Co Limited, which is India's largest private
Life Insurance Company. India Infoline was the first corporate
agent to get licensed by IRDA in early 2001.
b) India Infoline Insurance Brokers Limited is a newly formed

subsidiary which will carry out the business of Insurance broking.
We have applied to IRDA for the insurance broking licence and the
clearance for the same is awaited. Post the grant of license, we
propose to also commence the general insurance distribution
business.
 India Infoline Investment Services Limited: Consolidated

shareholdings of all the subsidiary companies engaged in loans and
financing activities under one subsidiary. Recently, Orient Global, a
Singapore-based investment institution invested USD 76.7 million for a
22.5% stake in India Infoline Investment Services. This will help focused
expansion and capital raising in the said subsidiaries for various lending
businesses like loans against securities, SME financing, distribution of
retail loan products, consumer finance business and housing finance
business. India Infoline Investment Services Private Limited consists of the
following step-down subsidiaries.
a) India Infoline Distribution Company Limited (distribution of retail

loan products)
b) Moneyline Credit Limited (consumer finance)
c) India Infoline Housing Finance Limited (housing finance)
 IIFL (Asia) Pte Limited: IIFL (Asia) Pte Limited is wholly owned
subsidiary which has been incorporated in Singapore to pursue financial
sector activities in other Asian markets. Further to obtaining the necessary
regulatory approvals, the company has been initially capitalized at 1
million Singapore dollars.
 India Infoline.com Distribution Services Ltd.

They have developed a retail distribution infrastructure (Investor Points) to
support online presence. This network, spread over 60 locations, is
engaged in the distribution of financial products including fixed deposits,
GoI Relief bonds, insurance, mutual funds and IPO's.
 Money Tree Consultancy Services

(MTCS) Is a group company of India Infoline Ltd., focusing distribution on
Home Loans, Personal Loans, Credit Cards and Non – Life Insurance. MTCS
extends the distribution reach of financial services providers by using
alternate channels like the Internet, telephone, wireless, sales force and
events.
History & Milestones
1995
Commenced operations as an Equity Research firm on 18 October

1995 as Probity Research and Services.
1997
Launched research products of leading Indian companies, key

sectors and the economy Client included leading FIIs, banks and
companies.
1999
Launched www.indiainfoline.com.
2000
Launched online trading through www.5paisa.com on july. Started

distribution of life insurance on december and mutual fund on april.
2001
Became a depository participant of NSDL in September 2001.
2003
Launched proprietary trading platform Trader Terminal for retail

customers.
2004
Acquired commodities broking license (march).

Launched Portfolio Management Service(august).
2005
Maiden IPO and listed on NSE, BSE on may 17th
2006
Acquired membership of DGCX

Launches exclusive SMS Value Added Services.
Enters into strategic agreement with Saraswat Bank
Launches stock trading on cell phones
2007
Commenced institutional equities business under IIFL

Formed Singapore subsidiary, IIFL (Asia) Pte Ltd
2008
Launched IIFL Wealth

Transitioned to insurance broking model.
2009
Acquired registration for Housing Finance.

SEBI in-principle approval for Mutual Fund.
Obtained Venture Capital license.
Large firms’ in India by Dun & Bradstreet.
2010
Received in-principle approval for membership of the Singapore

Stock Exchange.
Received membership of the Colombo Stock Exchange.
PRODUCT OFFERINGS:-
 Direct Equity and F & O Trading

Providing in-house research based advice on selected stocks
 Structured Products
Advise on Portfolio management Services.
 Portfolio Management Services
Products that offer our clients unique risk-reward equations that are
customised to their investment objectives
 Mutual Funds Advisory
Research based recommendations on Top Picks in Mutual Funds
 Insurance Advisory
• Life & General Insurance Advisory
• Advise on Investment in Real Estate through Fund structure
 Real Estate Funds
Advise on Investment in Real Estate through Fund structure
 Art Funds
Advise on Investment in Art through Fund structure.
 Bullion Trading
Bullion buying and selling
 IPO Funding
Advising and facilitating financing on select IPOs based on our in-
house research
 Loan Against Securities (Margin Funding )
Provide Overdraft facility against collateral of Shares/ MF units
 LAS Series (Term Loans)
Provide Term Loan facility against collateral of Shares/ MF units
 Promoter Funding
Provide Term Loan facility against collateral of Shares
 ESOP Funding
Provide Term Loan/ Overdraft facility against collateral of Shares to
be allotted to Employees.
SERVICES OFFERINGS:
 Online BSE and NSE executions.

 Free access to invest advice from IndiaInfoline’s Research team.
 Daily Research Reports and Market Review (Market Mantra).
 Pre Market Report (Market Mantra by inserting proper dates).
 Daily trading calls based on Technical Analysis.
 Personalized Advice
 Live Market Information.
 Depository Services: De-mat and Re-mat Transactions.
 Derivatives Trading.
 Commodities Trading.
 IPO’S & Mutual Funds Distribution.
 Internet- based Online Trading(TT-Manager).
COMPETITORS:-
 Sharekhan.
 Angel broking.
 Motilal Oswal.
 Karvy share broking.
 ICICI Direct.
SWOT ANALYSIS
Strengths Weaknesses
• Original research. • Lack of a banking arm to

• Integrated technology platform. complete
• “One Stop” shop. the bank-broker-depository
• Pan - India distribution network. chain.
• “India Infoline.com” and • Insignificant presence in
“5paisa.com” have developed institutional segment.
into brands.
Opportunities Threats
• Changing demographics with • Economic slowdown.

higher disposable income and • Volatile movement in indices
increasingly complex financial and
instruments will drive demand events like May 17, 2004.
for • Stock markets falls will have a
investment advisory services. cascading effect on our mutual
fund mobilization.
• Rapid penetration of Internet • Increase/decrease in interest
and rates
computers means that can affect our debt/ income fund
technology mobilizations.
enabled financial services will • Future changes in personal
gain taxation rules can impact
market share. insurance sales.
• Increasing competition from
large and particularly foreign
players
CHAPTER : III
INTRODUCTION TO MUTUAL FUNDS
Mutual fund is a buzz in the market these days. The mutual fund industry
is burgeoning, it is completely untapped market. Only 5% of total potential
of this industry has been grabbed. Hence this industry has a lot of
opportunities in it. That’s why it is so much interactive.
As Indian economy is growing at the rate of 8% per annum, we can see its
effect in all areas. The Indian stock market and companies have become
lucrative for foreign
investors. More and more fund is pouring in our country. This is increasing
liquidity in
the market and hence increasing the money in the hands of people and
thus investment. As the future prospects for Indian companies are bright,
they have lots of opportunities to expand their business worldwide, the
investment in Indian companies.
A Mutual Fund is a trust that pools the savings of a number of
investors who share a common financial goal. The money thus
collected is invested by the fund manager in different types of
securities depending upon the objective of the scheme.
These could range from shares to debentures to money market
instruments. The income earned through these investments and the
capital appreciations realized by the scheme are shared by its unit holders
in proportion to the number of units owned by them (prorata). Thus a
Mutual Fund is the most suitable investment for the common man as it
offers an opportunity to invest in a diversified, professionally managed
portfolio at a relatively low cost. Anybody with an investible surplus of as
little as a few thousand rupees can invest in Mutual Funds. Each Mutual
Fund scheme has a defined investment objective and strategy.
A mutual fund is the ideal investment vehicle for today’s complex
and modern financial scenario. Markets for equity shares, bonds and
other fixed income instruments, real estate, derivatives and other assets
have become mature and information driven. Price changes in these
assets are driven by global events occurring in faraway places. A typical
individual is unlikely to have the knowledge, skills, inclination and time to
keep track of events, understand their implications and act speedily. An
individual also finds it difficult to keep track of ownership of his assets,
investments, brokerage dues and bank transactions etc.
A mutual fund is the answer to all these situations. It appoints

professionally qualified
and experienced staff that manages each of these functions on a full time
basis. The
large pool of money collected in the fund allows it to hire such staff at a
very low cost to each investor. In effect, the mutual fund vehicle exploits
economies of scale in all three areas - research, investments and
transaction processing. While the concept of
individuals coming together to invest money collectively is not new, the
mutual fund in its present form is a 20th century phenomenon. In fact,
mutual funds gained popularity only after the Second World War. Globally,
there are thousands of firms offering tens of thousands of mutual funds
with different investment objectives. Today, mutual funds collectively
manage almost as much as or more money as compared to banks.
A draft offer document is to be prepared at the time of launching the fund.
Typically, it pre specifies the investment objectives of the fund, the risk
associated, the costs involved in the process and the broad rules for entry
into and exit from the fund and other areas of operation. In India, as in
most countries, these sponsors need approval from a regulator, SEBI
(Securities exchange Board of India) in our case. SEBI looks at track
records of the sponsor and its financial strength in granting approval to
the fund for commencing operations.
A sponsor then hires an asset management company to invest the funds
according to the investment objective. It also hires another entity to be
the custodian of the assets of the fund and perhaps a third one to handle
registry work for the unit holders (subscribers) of the fund.
In the Indian context, the sponsors promote the Asset Management
Company also, in which it holds a majority stake. In many cases a sponsor
can hold a 100% stake in the Asset Management Company (AMC). E.g.
Birla Global Finance is the sponsor of the Birla Sun Life Asset Management
Company Ltd., which has floated different mutual funds schemes and also
acts as an asset manager for the funds collected under the schemes.
WHAT IS A MUTUAL FUND?
A Mutual Fund is a trust that pools the savings of a number of investors

who share a
common financial goal. It offers an opportunity to invest in a diversified,
professionally managed basket of securities at a relatively low cost. The
flow chart below describes broadly the working of a mutual fund.
Investment Financial Market Earnings and

Appeciation
Professional fund
Management
Management fees Mutual Fund
Pooling savings
Small Investors
Returns
Organization of a Mutual Fund

A mutual fund is set up in the form of a trust, which has sponsor, trustees,
asset management company (AMC) and custodian.
Sponsor: The sponsor initiates the idea to set up a mutual fund. It could be
a registered company, scheduled bank or financial institution. A sponsor
has to satisfy certain conditions, such as on capital, track record(atleast
five year’s operation in financial services), default-free dealings and a
general reputation of fairness.
Trust/ Board of Trustees: The Sponsor appoints the Trustees. Trustees

hold the responsibility towards unit holders by protecting their interests.
Trustees checks the market schemes, and secure necessary approvals.
They check if the AMC’s investments are within defined limits, whether the
fund’s assets are protected, and also ensure the unit holders get their due
returns.
TYPES OF MUTUAL FUND SCHEMES

Mutual fund schemes may be classified on the basis of its structure and its
By Structure:
Open-ended Funds:
An open-end fund is one that is available for subscription all through the
year. These do not have a fixed maturity. Investors can conveniently buy
and sell units at Net Asset Value ("NAV") related prices. The key feature of
open-end schemes is liquidity.
Closed ended Funds:
A closed-end fund has a stipulated maturity period which generally

ranging from 3 to 15 years. The fund is open for subscription only during a
specified period. Investors can invest in the scheme at the time of the
initial public issue and thereafter they can buy or sell the units of the
scheme on the stock exchanges where they are listed. In order to provide
an exit route to the investors, some close-ended funds give an option of
selling back the units to the Mutual Fund through periodic repurchase at
NAV related prices. SEBI Regulations stipulate that at least one of the two
exit routes is provided to the investor.
Interval Funds:
Interval funds combine the features of open-ended and close-ended

schemes. They are open for sale or redemption during pre-determined
intervals at NAV related prices.
By Investment Objective
Growth Funds:
The aim of growth funds is to provide capital appreciation over the

medium to long term. Such schemes normally invest a majority of their
corpus in equities. It has been proved that returns from stocks, have
outperformed most other kind of investments held over the long term.
Growth schemes are ideal for investors having a long term outlook
seeking growth over a period of time.
Income Funds:
The aim of income funds is to provide regular and steady income to

investors. Such
schemes generally invest in fixed income securities such as bonds,
corporate debentures and Government securities. Income Funds are ideal
for capital stability and regular income.
Balanced Fund:
The aim of balanced funds is to provide both growth and regular income.
Such schemes periodically distribute a part of their earning and invest
both in equities and fixed income securities in the proportion indicated in
their offer documents. In a rising stock market, the NAV of these schemes
may not normally keep pace, or fall equally when the market falls. These
are ideal for investors looking for a combination of income and moderate
growth.
MoneyMarketFunds:
The aim of money market funds is to provide easy liquidity, preservation

of capital and moderate income. These schemes generally invest in safer
short-term instruments such as treasury bills, certificates of deposit,
commercial paper and inter-bank call money.
Returns on these schemes may fluctuate depending upon the interest
rates prevailing in the market. These are ideal for Corporate and individual
investors as a means to park their surplus funds for short periods.
Other Schemes
Tax Saving Schemes:
These schemes offer tax rebates to the investors under specific provisions
of the Indian Income Tax laws as the Government offers tax incentives for
investment in specified avenues. Investments made in Equity Linked
Savings Schemes (ELSS) and Pension Schemes are allowed as deduction
u/s 88 of the Income Tax Act, 1961. The Act also provides opportunities to
investors to save capital gains u/s 54EA and 54EB by investing in Mutual
Funds.
Special Schemes
• Industry Specific Schemes
Industry Specific Schemes invest only in the industries specified in the

offer document. The investment of these funds is limited to specific
industries like InfoTech, FMCG, and Pharmaceuticals etc.
• Index Schemes
Index Funds attempt to replicate the performance of a particular index

such as the BSE Sensex or the NSE 50
• Sectoral Schemes
Sectoral Funds are those which invest exclusively in a specified sector.

This could be an industry or a group of industries or various segments
such as 'A' Group shares or initial public offerings
BENEFITS OF MUTUAL FUNDS
Professional Management
Mutual Funds provide the services of experienced and skilled
professionals, backed by a dedicated investment research team that
analyses the performance and prospects of companies and selects
suitable investments to achieve the objectives of the scheme.
Diversification
Mutual Funds invest in a number of companies across a broad cross –
section of industries and sectors. This diversification reduces the risk
because seldom do
all stocks decline at the same time and in the same proportion. You
achieve this
diversification through a Mutual Fund with far less money than you can do
on your own.
Affordability
A mutual fund invests in a portfolio of assets, i.e. bonds, shares etc.
depending upon the investment objective of the scheme. An investor can
buy into a portfolio of equities, which would otherwise be extremely
expensive.
Tax Benefits
Any income distributed after March 31, 2002 will be subject to tax in the
assessment of all unit-holders. However, as a measure of concession to
Unit holders of open – ended and equity – oriented funds, income
distributions for the year ending March 31, 2003, will be taxed at a
concessional rate of 10%.
Return Potential
Over a medium to long – term, mutual funds have the potential to provide
a higher
return as they invest in a diversified basket of selected securities.
Low Costs
Investing in the capital markets because the benefits of scale in
brokerage, mutual funds are a relatively less expensive way to invest
compared to directly custodial and other fees translate into lower costs for
investors.
Liquidity
In open – ended schemes, the investor gets the money back promptly at
MAV related prices from the mutual fund. In closed – ended schemes, the
units can be sold on a stock exchange at the prevailing market price or
the investor can avail of the facility of direct repurchase at NAV related
prices by the mutual fund.
Transparency
You get regular information on the value of your investment in addition to
disclosure on the specific investments made by your scheme, the
proportion invested in each class of assets and the fund manager’s
investment strategy and outlook.
Flexibility
Through features such as regular investment plans, regular withdrawal
plans and
dividend reinvestment plans, you can systematically invest or withdraw
funds according to your needs and convenience.
Well Regulated
All mutual funds are registered with SEBI and they function within the
provisions of
strict regulations designed to protect the interests of investors.
Tax breaks
Last but not the least, mutual funds offer significant tax advantages.
Dividends
distributed by them are tax-free in the hands of the investor.
They also give you the advantages of capital gains taxation. If you hold
units beyond one year, you get the benefits of indexation. Simply put,
indexation benefits increase your purchase cost by a certain portion,
depending upon the yearly cost-inflation index (which is calculated to
account for rising inflation), thereby reducing the gap between your actual
purchase cost and selling price. This reduces your tax liability.
No assured returns and no protection of capital

If you are planning to go with a mutual fund, this must be your mantra:
mutual funds do not offer assured returns and carry risk. For instance,
unlike bank deposits, your
investment in a mutual fund can fall in value. In addition, mutual funds are
not insured or guaranteed by any government body (unlike a bank
deposit, where up to Rs 1 lakh per bank is insured by the Deposit and
Credit Insurance Corporation, a subsidiary of the Reserve Bank of India).
There are strict norms for any fund that assures returns and it is now
compulsory for
funds to establish that they have resources to back such assurances. This
is because most closed-end funds that assured returns in the early-
nineties failed to stick to their assurances made at the time of launch,
resulting in losses to investors.
Restrictive gains
Diversification helps, if risk minimization is your objective. However, the
lack of investment focus also means you gain less than if you had invested
directly in a
single security.
DISADVANTAGES OF MUTUAL FUNDS
There are certainly some benefits to mutual fund investing, but you should
also be aware of the drawbacks associated with mutual funds.
No Insurance: Mutual funds, although regulated by the government, are

not insured against losses. The Federal Deposit Insurance Corporation
(FDIC) only insures against certain losses at banks, credit unions, and
savings and loans, not mutual funds. That means that despite the
riskreducing diversification benefits provided by mutual funds, losses can
occur, and it is possible (although extremely unlikely) that you could even
lose your entire investment.
Dilution: Although diversification reduces the amount of risk involved in

investing in mutual funds, it can also be a disadvantage due to dilution.
For
example, if a single security held by a mutual fund doubles in value, the
mutual
fund itself would not double in value because that security is only one
small part
of the fund's holdings. By holding a large number of different investments,
mutual funds tend to do neither exceptionally well nor exceptionally
poorly.
Fees and Expenses: Most mutual funds charge management and

operating fees
that pay for the fund's management expenses (usually around 1.0% to
1.5% per
year). In addition, some mutual funds charge high sales commissions,
12b-1
fees, and redemption fees. And some funds buy and trade shares so often
that the
transaction costs add up significantly. Some of these expenses are
charged on an
ongoing basis, unlike stock investments, for which a commission is paid
only
when you buy and sell .
Poor Performance: Returns on a mutual fund are by no means

guaranteed. In
fact, on average, around 75% of all mutual funds fail to beat the major
market
indexes, like the S&P 500, and a growing number of critics now question
whether or not professional money managers have better stock-picking
capabilities than the average investor.
Loss of Control: The managers of mutual funds make all of the decisions
about
which securities to buy and sell and when to do so. This can make it
difficult for you when trying to manage your portfolio. For example, the
tax
consequences of a decision by the manager to buy or sell an asset at a
certain
time might not be optimal for you. You also should remember that you are
trusting someone else with your money when you invest in a mutual fund.
Trading Limitations: Although mutual funds are highly liquid in general,

most
mutual funds (called open-ended funds) cannot be bought or sold in the
middle
of the trading day. You can only buy and sell them at the end of the day,
after
they've calculated the current value of their holdings.
Size: Some mutual funds are too big to find enough good investments.
This is
especially true of funds that focus on small companies, given that there
are strict
rules about how much of a single company a fund may own. If a mutual
fund has
$5 billion to invest and is only able to invest an average of $50 million in
each,
then it needs to find at least 100 such companies to invest in; as a result,
the fund
might be forced to lower its standards when selecting companies to invest
in.
Inefficiency of Cash Reserves: Mutual funds usually maintain large

cash
reserves as protection against a large number of simultaneous
withdrawals.
Although this provides investors with liquidity, it means that some of the
fund's
money is invested in cash instead of assets, which tends to lower the
investor's
potential return.
CHAPTER : IV
DATA ANALYSIS AND INTERPRETATION
POPULATION:-
According to the data collection method adopted, the size of the
population is 100.
Thus, N=100
After collecting the data the following facts were found out:-
Out of the 100 people the following percentage composition were
interested in the
following products:-
• MUTUAL FUNDS -44%

• SHARE/BONDS- 23%
• LIFE INSURANCE-17%
• REAL ESTATE-6%
• COMMODITIES-8%
• OTHERS-2%
ANALYSIS OF THE PREFERENCES OF THE RESPONDENTS:-

The data collected above shows that approximately 65% of people are
aware of the
market in general and 44% are aware of Mutual Funds in particular. Thus
further
analysis is made on the basis of data collected; which categories of people
are more
aware and inclined towards Mutual Fund. Therefore, further analysis
ismade as below.
Analysis according to Age:
From above charts it can be easily be inferred that people aged between
31-40 preferred mutual funds most because of many factors, but mainly
due to stability in their earnings and career, responsibility towards family
etc. Also, we found that only 1 respondent is female in pilot study, so we
will see to what number it will go because this number will give us a rough
idea about mutual fund awareness among women in particular and
financial awareness in general.
Analysis according to ACADEMIC QUALIFICATION
Majority of respondents are graduates, therefore it remains to be seen
that to what extent post graduates and professional have interest in
mutual funds.
Analysis according to MARITAL STATUS:
Majority of respondents are married (70%), therefore it remains to be seen

that how many young and unmarried investors have preference towards
mutual funds.
Analysis according to OCCUPATION:
Majority of respondents are salaried. They have have their occupation as a
professional be it Relationship Mangers, Insurance agents, Independent
Financial Advisors (IFAs) etc. mainly due to their high level of awareness
about financial products. About 31% respondents are self employed. They
are mainly retired person, businessman etc.
Analysis according to INCOME:
From above chart it can be easily inferred that majority of respondents are
from
3,00,000-5,00,000 range, therefore its remain to be seen that how many
are from less than 3 lakh category because here lies the opportunity for
AMCs to generate huge volumes by offering innovative funds. About 20%
of respondents having income level more than 5 lanks investing in mutual
fund.
FINANCIAL BEHAVIOUR OF THE RESPONDENTS:
INVESTMENT OBJECTIVES:
Among given options including “others” category majority of respondents
prefer good return as their primary objective of investment.
CHANNELS USED BY RESPONDENTS FOR INVESTING:
From the study it can easily be inferred that majority of

respondents(70%) now invest directly in mutual funds especially after
SEBI guidelines came recently that says there will not be any ENTRY LOAD
for investors investing in mutual fund schemes directly.
PREFERABLE ROUTE TO INVESTING IN MUTUAL FUNDS:
As above chart clearly explains that majority of respondents (57%) take
self decision once they start investing in mutual funds. Only 13 % of
respondents take help of
Brokers/Advisors when it comes to final decision of investing.
PERFORMANCE EVALUATION:
The main objective of evaluating the performance of different mutual fund

firms is to know where the MF houses stand in comparison to other Asset
Management Companies (AMCs) as per different criterion.
The following are the different catagories under which the funds are
evaluated,
• GROWTH FUND
• DIVIDEND FUND
• EQUITY FUND
• DEBT FUND
INTRA FIRM EVALUATION:
Intra firm evaluation is required not only for investors but also for
Advisor’s point of view. It is required for the following reason,
• To make intelligent decisions on whether the investor should

continue with the investment or not.
• The investors need the basic knowledge of fund evaluation to judge

the performance of the funds.
• The potential investors would expect the advisor to give them a

proper advice on which funds have good performance.
• In order to compare different funds, the advisor must have the

correct knowledge and appropriate measures of evaluating the fund
performance
Performance Evaluation of GROWTH FUNDS:
RANKING ACCORDING TO DIFFERENT MEASURES
RANK1 RANK 2 RANK 3 RANK 4
STANDARD HDFC income HDFC MIP-LT HDFC index HDFC Top
DEVIATION fund Fund fund sensex 200 fund
plan
SHARPE HDFC income HDFC index HDFC MIP-LT HDFC Top
RATIO fund fund sensex Fund 200 fund
plan
JENSEN – HDFC income HDFC MIP-LT HDFC index HDFC Top
ALPHA fund Fund fund sensex 200 fund
plan
TREYNOR HDFC Top 200 HDFC income HDFC index HDFC MIP-LT
RATIO fund fund fund sensex Fund
plan
 The primary measure of risk i.e. Standard Deviation is highest for
HDFC top 200 which means it is the most risky fund in the category.
Second is HDFC index fund sensex plan having Standard Deviation
as 85.11.Fund having lowest Standard Deviation is HDFC income
fund, 5.79 as Standard Deviation.
 Sharpe ratio, which means returns per unit of risk that a fund is
able to generate. Therefore, higher the ratio the better it is.
Accordingly, HDFC income fund is the best fund among the growth
category. The sharpe ratio is more for HDFC index fund sensex plan
next to HDFC income fund i.e 1.6 so it the second best fund
according to the sharpe ratio. HDFC MIP-LT Fund is having sharpe
ratioas 1.37 which is slightly less from HDFC index fund sensex plan,
hence it is the third best fund in the growth category. And HDFC Top
200 fund is having sharpe ratio as 0.97 hence the performance is
low in the last one.
 HDFC income fund is having highest Treynor Ratio as 173.31

which means it will enjoy a premium when the markets are bullish
and will be affected negatively when the markets are bearish. When
the markets are more volatile, schemes with high Treynor ratio are
highly affected. HDFC MIP-LT Fund are not affected more when the
markets are more volatile, because the treynor ratio is minimum in
this group as it is only 14.84.
 HDFC income fund is having highest Jensen- alpha measure means it

is the best fund among the funds. Jensen's alpha (or Jensen's
Performance Index, ex-post alpha) is used to determine the
abnormal return of a security or portfolio of securities over the
theoretical expected return. hence the high it is, the better it is.
HDFC Top 200 fund is having lowest value hence placed in rank 5.
STANDARD DEVIATION Reliance LT- Reliance Reliance Reliance
Equity fund Regular Equity Growth fund
saving fund Linked
Saving fund
SHARPE RATIO Reliance Reliance LT- Reliance Reliance
Regular Equity fund Growth Equity Linked
saving fund fund Saving fund
JENSEN – ALPHA Reliance LT- Reliance Reliance Reliance
Equity fund Growth fund Regular Equity Linked
saving fund Saving fund
TREYNOR RATIO Reliance Reliance Reliance Reliance
Growth fund Regular LT-Equity Equity Linked
saving fund fund Saving fund
 In Reliance fund Group Standard Deviation is highest for Reliance

Growth fund which means it is the most risky fund in the category.
Second is Reliance Equity Linked Saving fund having Standard
Deviation as 17.08.Fund having lowest Standard Deviation is
Reliance LT-Equity fund which means lowest risk is associated with this
fund.
Accordingly, Reliance Regular saving fund is the best fund among the
growth category. The sharpe ratio is more for Reliance LT-Equity fund
next to Reliance Regular saving fund. So it the second best fund
according to the sharpe ratio. Reliance Growth fund is having sharpe
ratio as 0.66 , hence it is the third best fund in the growth category.
And Reliance Equity Linked Saving fund is having sharpe ratio as 0.38
hence the performance is low in the last one.
 Reliance Growth fund is having highest Treynor Ratio as 407.84

highly affected. Reliance Equity Linked Saving funds are not affected
more when the markets are more volatile, because the treynor ratio
ia minimum in this group as it is only 6.64.
 Reliance LT-Equity fund is having highest Jensen- alpha measure

means it is the best fund among the funds. Jensen's alpha (or
Jensen's Performance Index, ex-post alpha) is used to
determine the abnormal return of a security or portfolio of securities
over the theoretical expected return. hence the high it is, the better
it is. Reliance Equity Linked Saving fund is having lowest value hence
placed in rank 5.
RANK1 RANK 2
STANDARD DEVIATION Govt security Fund Equity Fund- Inst. Fund
SHARPE RATIO Govt security Fund Equity Fund- Inst. Fund
JENSEN – ALPHA Govt security Fund Equity Fund- Inst. Fund
TREYNOR RATIO Govt security Fund Equity Fund- Inst. Fund
Here, in the DSP BlackRock fund house, Govt Security Fund is less risky
than Equity Fund- Institutional Plan. And also this fund is affected more,
when the market is more volatile as it has the highest treynor ratio as
25.34.the sharpe ratio is also more for Govt security Fund and also a better
fund than Equity Fund- Inst. Fundbecause its sharpe ratio is 2.82. and also
provides more return.
RANK1 RANK 2
STANDARD DEVIATION Blue Chip Fund Balanced Fund
SHARPE RATIO Balanced Fund Blue Chip Fund
JENSEN – ALPHA Balanced Fund Blue Chip Fund
TREYNOR RATIO Balanced Fund Blue Chip Fund
In SBI Fund house, between Blue chip fund and Balanced Fund in Growth
category fund, Blue Chip Fund is less riskier than that of Balanced Fund.
but Balanced Fund
is affected more, when the market is more volatile as it has the highest
treynor ratio as 15915.38. the sharpe ratio is also more for Balanced Fund
and also a better fund than Blue Chip Fund because its sharpe ratio is 1.31.And is
able to provide high return as compared to Blue Chip Fund.
ANALYSIS OF DIVIDEND FUNDS:
RANK1 RANK 2 RANK 3
STANDARD DEVIATION Bond fund Balanced Fund Floating Rate
Fund
SHARPE RATIO Floating Rate Bond fund Balanced Fund
Fund
JENSEN – ALPHA Floating Rate Bond fund Balanced Fund
Fund
TREYNOR RATIO Floating Rate Balanced Fund Bond fund
Fund
In the performance evaluation of DSP Blackrock fund house, the primary

risk is higher for Floating rate Fund and Lowest for bond Fund, Which
means Bond Fund is having less risk. Here floating Rate Fund is better
than the other two funds as it has the highest Sharpe ratio. Floating Rate
Fund is having high Jensen alpha measure i.e 1001.25 hence able to
provide more return.
STANDARD DEVIATION Templeton Templeton Templeton FT Build India
India MIP- India Govt. India Equity Fund
monthly Security Fund- Income Fund
Dividend PF Plan
SHARPE RATIO Templeton Templeton Templeton FT Build India
India MIP- India Govt. India Equity Fund
monthly Security Fund- Income Fund
Dividend PF Plan
JENSEN – ALPHA Templeton Templeton Templeton FT Build India
India Govt. India MIP- India Equity Fund
Security Fund- monthly Income Fund
PF Plan Dividend
TREYNOR RATIO Templeton Templeton Templeton FT Build India
India Govt. India Equity India MIP- Fund
Security Fund- Income Fund monthly
PF Plan Dividend
 In the performance evaluation of Franklin Templeton Fund house,

the primary risk i.e the standard deviation is highest for FT Build
India fund and lowest for Templeton India MIP-monthly Dividend.
That means that FT Build India Fund is having high risk than that of
other funds. Templeton India Equity Income Fund is less risky than
that of FT Build India Fund and Templeton India Govt. Security Fund-
PF Plan is lesser riskier than the two funds mentioned above. From
the graph it can be clear that among the four funds Templeton India
MIP-monthly Dividend is having less risk associated with it.
Accordingly, Reliance Regular saving fund is the best fund among the
growth category. The sharpe ratio is more for Reliance LT-Equity fund
next to Reliance Regular saving fund. So it the second best fund
according to the sharpe ratio. Reliance Growth fund is having sharpe
ratio as 0.66 , hence it is the third best fund in the growth category.
And Reliance Equity Linked Saving fund is having sharpe ratio as 0.38
 Templeton India Govt. Security Fund- PF Plan is having highest Treynor

Ratio as 116142.8 which means it will enjoy a premium when the
markets are bullish and will be affected negatively when the
markets are bearish. When the markets are more volatile, schemes
with high Treynor ratio are highly affected. FT Build India Fund,
Templeton India MIP-monthly Dividend funds are not affected more
when the markets are more volatile, because the treynor ratio is
minimum in this group as it is only 5822.22 and 11314.29
accordingly.
 Templeton India Govt. Security Fund- PF Plan is having highest Jensen-

alpha measure means it is the best fund among the funds. Jensen's
alpha (or Jensen's Performance Index, ex-post alpha) is used
to determine the abnormal return of a security or portfolio of
securities over the theoretical expected return. hence the high it is,
the better it is. FT Build India Fund is having lowest value hence
placed in rank 5.
RANK1 RANK 2 RANK 3
STANDARD DEVIATION Magnum Multicap Magnum Midcap Magnum Fund
Fund Fund Umbrella
Emerging
Business
SHARPE RATIO Magnum Multicap Magnum Midcap Magnum Fund
Fund Fund Umbrella
Emerging
Business
JENSEN – ALPHA Magnum Multicap Magnum Midcap Magnum Fund
Fund Fund Umbrella
Emerging
Business
TREYNOR RATIO Magnum Midcap Magnum Fund Magnum
Fund Umbrella Emerging Multicap Fund
Business
In the performance evaluation of SBI Fund house, the primary risk i.e the
standard deviation is highest for Magnum Fund Umbrella Emerging Business
and lowest for Magnum Multicap Fund. That means that Magnum Multicap Fund
is having less risk. This fund is one of the best fund in this group as all measures
are high for this fund.
INTERFIRM ANALYSIS: GROWTH FUNDS

RANK1 RANK 2 RANK 3 RANK 4 RANK 5
STANDARD Reliance LT- DSP Templeton HDFC SBI
DEVIATION Equity Fund Blackrock India Income Bluechip
Govt. Children’s Fund Fund
Security Asset Plan
Fund
SHARPE DSP HDFC Reliance LT- Templeton SBI
RATIO Blackrock Income Fund Equity Fund India Bluechip
Govt. Children’s Fund
Security Asset Plan
Fund
JENSEN – HDFC Templeton DSP Reliance SBI
ALPHA Income Fund India Blackrock LT- Equity Bluechip
Children’s Govt. Fund Fund
Asset Plan Security
Fund
TREYNOR DSP HDFC Reliance LT- SBI Templeton
RATIO Blackrock Income Fund Equity Fund Bluechip India
Govt. Fund Children’s
Security Asset Plan
Fund
 From the graph it can be clearly stated that the lowest risky fund is
Reliance LT- Equity Fund as the primary risk i.e the standard deviation is
lowest in case of Reliance LT- Equity Fund that is 2.5. The highest risky
fund is SBI Bluechip Fund in where the standard deviation is 8.2. In
between those two fund, the funds are having standard deviation as 3.5 in
DSP Blackrock Govt. Security Fund, 4.5 in Templeton India Children’s Asset
Plan, 5.79 in HDFC Income Fund.
 DSP Blackrock Govt. Security Fund is having highest Sharpe ratio i.e 2.82
hence is the best fund as Sharpe ratio is high, which means returns
per unit of risk that a fund is able to generate. Therefore, higher the
ratio the better it is. The sharpe ratio is minimum for SBI Bluechip
Fund i.e 0.93.
 DSP Blackrock Govt. Security Fund is having highest Treynor Ratio as

64250 which means it will enjoy a premium when the markets are
bullish and will be affected negatively when the markets are
bearish. When the markets are more volatile, schemes with high
Treynor ratio are highly affected. SBI Bluechip Fund, Templeton India
Children’s Asset Plan are not affected more when the markets are
more volatile, because the treynor ratio is minimum in this group as
it is only 15320 and 14865.2 accordingly.
 HDFC Income Fund is having highest Jensen- alpha measure means it

is the best fund among the funds. Jensen's alpha (or Jensen's
theoretical expected return. hence the high it is, the better it is. SBI
Bluechip Fund is having lowest value hence placed in rank 5. Reliance
LT- Equity Fund is placed in the position of rank 4, DSP Blackrock Govt.
Security Fund in rank3 and Templeton India Children’s Asset Plan in rank 2
according to the measure.
DIVIDEND FUNDS
RANK 1 RANK 2 RANK 3 RANK 4 RANK 5
STANDAR FT MIP- DSP SBI HDFC Reliance
D Monthly BlackRock magnum Growth Vision Fund
DEVIATION Dividend Bond Fund multicap Fund
SHARPE FT MIP- DSP Reliance SBI HDFC
RATIO Monthly BlackRock Vision Fund magnum Growth
Dividend Bond Fund multicap Fund
JENSEN – Reliance HDFC Growth SBI FT MIP- DSP
ALPHA Vision Fund Fund magnum Monthly BlackRock
multicap Dividend Bond Fund
TREYNOR DSP FT MIP- Reliance SBI HDFC
RATIO BlackRock Monthly Vision Fund magnum Growth
Bond Fund Dividend multicap Fund
 In Dividend category of funds, the lowest risky fund is FT MIP-

Monthly Dividend Fund where the standard deviation is 0.96. the
highest risky fund fund is Reliance Vision Fund where the standard
deviation is 27.72. HDFC Growth Fund is less riskier than Reliance Vision
Fund, the standard deviation is 23.02. Between DSP BlackRock Bond Fund
and SBI magnum multicap, the less risky fund is DSP BlackRock Bond Fund
as the standard deviation of former is 1.65 where as the latter is 8.67.
 In this group, according to the sharpe ratio the better fund is FT MIP-
Monthly Dividend whose sharpe ratio is maximum i.e 5.55. HDFC Growth
Fund is having minimum ratio hence ranked to 5.
 DSP BlackRock Bond Fund is having highest Treynor Ratio as 476000
highly affected. SBI magnum multicap, HDFC Growth Fund are not
affected more when the markets are more volatile, because the
treynor ratio is minimum in this group as it is only 15657.14 and
3914.69 accordingly.
 Reliance Vision Fund is having highest Jensen- alpha measure means

it is the best fund among the funds. Jensen's alpha (or Jensen's
theoretical expected return. hence the high it is, the better it is. DSP
BlackRock Bond Fund is having lowest value hence placed in rank 5.
FT MIP- Monthly Dividend is placed in the position of rank 4, SBI magnum
multicap in rank3 and HDFC Growth Fund in rank 2 according to the
measure.
EQUITY FUND:
RANK1 RANK 2 RANK 3
STANDARD Reliance LT SBI Magnum DSP BlackRock Equity
DEVIATION Equity Fund Multicap Fund
SHARPE RATIO Reliance LT SBI Magnum DSP BlackRock Equity
Equity Fund Multicap Fund
JENSEN – ALPHA Reliance LT SBI Magnum DSP BlackRock Equity
TREYNOR RATIO Reliance LT SBI Magnum DSP BlackRock Equity
From the above graphs it can be clearly stated the fund having low
risk is Reliance LT Equity Fund and high for DSP BlackRock Equity Fund.
According to Sharpe ratio the better fund is also Reliance LT Equity Fund
and it is also affected more when the markets are volatile. And also able to
give high return as the jensen’s alplha value is more for it as compared to
other funds in the equity category.
DEBT FUND

STANDARD DEVIATION Templeton HDFC Income Templeton HDFC MIP_LT
India MIP- fund India Equity Plan
Monthly Income
Dividend Fund
SHARPE RATIO Templeton HDFC Income HDFC Templeton
India MIP- fund MIP_LT Plan India Equity
Monthly Income Fund
Dividend
JENSEN – ALPHA Templeton HDFC Income HDFC Templeton
India MIP- fund MIP_LT Plan India Equity
Monthly Income Fund
Dividend
TREYNOR RATIO HDFC Income HDFC MIP_LT Templeton Templeton
fund Plan India Equity India MIP-
Income Monthly
Fund Dividend
 In the Debt category of funds, the lowest risky fund is Templeton

India MIP- Monthly Dividend and the highest one is HDFC MIP_LT Plan. The
standard deviation is 0.96 for thr former and 10.79 for the latter one.
Between HDFC Income fund and Templeton India Equity Income Fund, the
fund having less risk is HDFC Income fund as 5.79.
Accordingly, Templeton India MIP- Monthly Dividend is the best fund
among the debt catagory. The sharpe ratio is more for HDFC Income
fund next to Templeton India MIP- Monthly Dividend. So it is the second
best fund according to the sharpe ratio. HDFC MIP_LT Plan is having
sharpe ratio as 1.37 , hence it is the third best fund in this category.
And Templeton India Equity Income Fund is having sharpe ratio as 0.76
 HDFC Income fund is affected more when the market is volatile as it has
the highest Treynor ratio as compared to other funds in this fund house.
Templeton India MIP- Monthly Dividend is having less ratio hence is not
affected more when the market is volatile. Likewise the oter two funds i.e
HDFC MIP_LT Plan and Templeton India Equity Income Fund is affected
according to the market volatility.
 Templeton India MIP- Monthly Dividend is having highest Jensen- alpha

measure means it is the best fund among the funds. Jensen's
alpha (or Jensen's Performance Index, ex-post alpha) is used
to determine the abnormal return of a security or portfolio of
securities over the theoretical expected return. hence the high it is,
the better it is. Templeton India Equity Income Fund is having lowest
value hence placed in rank 4. HDFC MIP_LT Plan is placed in the position
of rank 3 and HDFC Income fund in rank 2 according to the measure.
CHAPTER : V
SUGGESTIONS & RECOMMENDATIONS

THE GROUND RULES OF MUTUAL FUND INVESTING
The following are the 10 commandments that were to be followed till
eternity. The
world of investments too has several ground rules meant for investors
who are novices in their own right and wish to enter the myriad world of
investments. These come in handy for there is every possibility of losing
what one has if due care is not taken.
1. Assess yourself: Self-assessment of one’s needs; expectations and
risk profile is
of prime importance failing which; one will make more mistakes in putting
money in right places than otherwise. Irrational expectations will only
bring pain.
2. Try to understand where the money is going: One can lose

substantially if one
picks the wrong kind of mutual fund. In order to avoid any confusion it is
better to go through the literature such as offer document and fact sheets
that mutual fund companies provide on their funds.
3. Don't rush in picking funds, think first: one first has to decide
what he wants
the money for and it is this investment goal that should be the guiding
light for all investments done. It is thus important to know the risks
associated with the fund and align it with the quantum of risk one is
willing to take. One should takea look at the portfolio of the funds for the
purpose. Excessive exposure to any specific sector should be avoided, as
it will only add to the risk of the entire portfolio.
4. Invest. Don’t speculate: A common investor is limited in the degree

of risk that
he is willing to take. It is thus of key importance that there is thought
given to the
process of investment and to the time horizon of the intended investment.
One should abstain from speculating which in other words would mean
getting out of one fund and investing in another with the intention of
making quick money
5. Don’t put all the eggs in one basket: This old age adage is of
utmost importance. No matter what the risk profile of a person is, it is
always advisable to diversify the risks associated. So putting one’s money
in different asset classes is generally the best option as it averages the
risks in each category.
6. Be regular: Investing should be a habit and not an exercise

undertaken at one’s
wishes, if one has to really benefit from them. As we said earlier, since it is
extremely difficult to know when to enter or exit the market, it is
important to beat the market by being systematic. The SIPs (Systematic
Investment Plans) offered by all funds helps in being systematic. All that
one needs to do is to give post-dated cheques to the fund and thereafter
one will not be harried later.
7. Do your homework: It is important for all investors to research the

avenues available to them irrespective of the investor category they
belong to. This is important because an informed investor is in a better
decision to make right decisions. Having identified the risks associated
with the investment is important
and so one should try to know all aspects associated with it. Asking the
intermediaries is one of the ways to take care of the problem.
8. Find the right funds: Finding funds that do not charge much fees is of
importance, as the fee charged ultimately goes from the pocket of the
investor.
This is even more important for debt funds as the returns from these
funds are not much. Funds that charge more will reduce the yield to the
investor. Finding the right funds is important and one should also use
these funds for tax efficiency.
9. Keep track of your investments: Finding the right fund is important

but even more important is to keep track of the way they are performing
in the market. If the market is beginning to enter a bearish phase, then
investors of equity too will benefit by switching to debt funds as the losses
can be minimized. One can always switch back to equity if the equity
market starts to show some buoyancy.
10.Know when to sell your mutual funds: Knowing when to exit a fund
too is of utmost importance. One should book profits immediately when
enough has been
earned i.e. the initial expectation from the fund has been met with. Other
factors like non-performance, hike in fee charged and change in any basic
attribute of the fund etc. are some of the reasons for to exit.
WHEN TO SELL YOUR MUTUAL FUND

While there are many investment consultants, some by profession, some
self-professed, who suggest on when to invest in a particular avenue,
there is a certain paucity of people who talk of when to exit. Here are
some situations when the investor should consider withdrawing their
investments from the funds.
Fund is not performing

This reason for selling, although valid in certain conditions, is where most
investors
make a mistake. When calculating performance one shouldn’t look at too
short a
period and make a mistake by comparing apples to oranges. One should
compare the returns posted by his fund with that of the peers across
various horizons such as 1- year, 3-year and above. A short-term view can
often lead to committing hara-kiri, as it doesn’t present the full picture. If
it has underperformed the average of its peers in all cases, then it sure is
one of the better reasons to exit from the fund.
A change in life stage
Investments are done with a certain objective in mind and life stages are
often a
determining factor of what a person needs. A young man can afford to
take more
risks than a person nearing his retirement can. In such cases, it pays to
withdraw
money from the equity investments made earlier and put them in safer,
more
conservative debt funds that offer stable returns without compromising on
risk.
So a change in life stages would be one such reason to consider switching
into a
fund that matches with one’s needs.
A major change in any basic attribute of the fund

When the fund changes any basic attribute as mentioned by it in its offer
documents, the investors have a choice of getting out of it. Even SEBI has
provided for an exit route being made available to the investors. Changes
like a change in Asset Management Company or in investment style of
fund or change of structure say from closed-end to open-end etc. are good
enough reasons for an investor to consider switching or exiting from it as
they are certainly likely to affect the fund in a major way.
Fund doesn’t comply with its objective

One of the important parameters in the selection of the fund is alignment
of the
risk profiles of the investor and fund. The objective of the fund says a lot
about
how the fund plans to invest. If the objective is not being complied with, it
is one
of the exit points worth considering.
The Fund’s Expense Ratio Rises

A small rise in an expense ratio is not a big deal, however a significant rise
can
result in substantial reduction of yields and so it would be better to exit
the fund.
In the case of bond funds or money market funds, it is highly unlikely that
the fund can increase its returns enough to justify an increase in the
fund's expenses.
The Fund Manager has changed

a simple change of fund managers, in itself, is not enough reason to sell a
fund on a
short-term basis. If it is a passively managed fund (index fund), then one
has little to
no reason to worry. However, if it is an actively managed fund, then has to
keep the
eyes open on the new manager.
Enough has been earned

However, nothing is as important as to rein the horses in time. The
primary principle behind safety of investment is to take risks that can be
tolerated. The principle also is specific on the expectations that the
investor must have from any investment. Just as it is important to set
realistic targets that one hopes to achieve from the investment, it is also
important to exit when target as expected has been achieved irrespective
of the fact that it might be generating better returns in a short-term.
Waiting longer might not prove beneficial, as one need not be lucky all the
time.
BIBLIOGRAPHY
ANNEXURE
KEEP INVESTING AND KEEP SMILING
Personal Details
NAME: ............................................................................
ADDRESS: .................................................................
..................................................................
..................................................................
Mb No: .................................... E-MAIL: ............................................................
SEX: M F AGE: BELOW 30 31- 40
41- 50 ABOVE 50
ACADEMIC QUALIFICATION: GRADUATE POST GRADUATE

PROFESSIONAL OTHER
MARITAL STATUS: MARRIED UNMARRIED
OCCUPATION: SALARIED SELF EMPLOYED
ANNUAL INCOME: LESS THAN 1,00,000 1,00,001 – 3,00,000
3,00,001 – 5,00,000 ABOVE 5,00,000
1. Do you have any knowledge in share market?
i) Partial ii) complete iii) nil
2. Do you have any D-mat & trading A/C?
i) Yes ii) no
3. In which company you have D-mat & trading A/C?
i) Sharekhan ii) karvy
ii) Indiainfoline iv) Motilal oswal v) other
4. Do u save?
i) Yes ii) no
5. Where do u save?
i) Bank ii) post office iii) mutual fund
ii) Share/ debenture v) gold vi) other
6. If mutual fund, in which company?
i. HDFC Mutual Fund
ii. SBI Mutual Fund
iii. Reliance Mutual Fund
iv. DSP BlackRock Mutual Fund
v. Franklin Templeton Mutual Fund
vi. Other .........................................................
7. What is the scheme?
i. Equity ii. debt iii. balanced
8. How much u invested?
i.0 – 5,000 ii.5,000 – 10,000
iii.10,000 – 20,000 iv.20,000 above
9. Why do u invest in mutual fund?
a)Safety b) Good Return

c) Tax Benefit f)Others(Please
Specify………………………………………)
10. Through which channels do you invest in Mutual fund?
a) Directly b) Through Brokers
11. What is the preferable route to Mutual Fund Investing?
(a)Friend’s Suggestion (b) Newspapers/Magazines

(c) Self Decision (d) Television
(e)Brokers/Agents (f) others (Please Specify------------------------)
12. How much return u have expected?
(a) 0 – 5% (b)5% - 15% (c)above 15%
13. Which scheme u prefer for further investment?
(a)SIP (b) Traditional investment
14. Would u like to switch over your company?
(a) Yes (b) no
15. In which company would u like to do investment?
a) HDFC Mutual Fund
b) SBI Mutual Fund
c) Reliance Mutual Fund
d) DSP BlackRock Mutual Fund
e) Franklin Templeton Mutual Fund

Performane Evaluation of Mutual Funds

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PERFORMANCE ANALYSIS OF DIFFERENT MUTUAL FUND

COMPANYS BY USING PORTFOLIO EVALUATION TECHNICS

Master of Business Administrator is professional course which develop a

The goal of the Summer Training is to give a corporate exposure to the

Among every stage of knowledge being inculcated in students, practical

The purpose behind writing a report is to put in to works the practical

“PERFORMANCE ANALYSIS OF DIFFERENT MUTUAL FUND

I hope this report, reflecting my learning in the past six weeks, is as

This is to certify that Ms. Sruti Suar of Srusti Academy Of Management,

In India now offer a wide range of schemes to choose.

According to the Association of Mutual Funds in India, the growth of

In order to invest in the best mutual funds, it is important to perform a

Some of the top mutual funds in India are:

OBJECTIVES OF THE STUDY

2. To know the awareness of mutual fund among the people.

3. To measure the performance of various mutual fund companies by

4. To see the interest of people in investing in mutual fund.

5. To know the investment behaviour of investors in mutual fund

The following methodology is adopted for evaluation of performance of

Step1: Selection of few well-performing schemes of Big Fund Houses of

The secondary data collection includes collection of data through

LIMITATIONS OF THE STUDY

(NSE: India Infoline India Infoline

• The above chart does not cover all group companies

• India Infoline Media and Research Services Limited

 India Infoline Commodities Limited. India Infoline Commodities Pvt

 India Infoline Marketing & Services: India Infoline Marketing and

a) India Infoline Insurance Services Limited is a registered

b) India Infoline Insurance Brokers Limited is a newly formed

 India Infoline Investment Services Limited: Consolidated

a) India Infoline Distribution Company Limited (distribution of retail

 India Infoline.com Distribution Services Ltd.

 Money Tree Consultancy Services

History & Milestones

Commenced operations as an Equity Research firm on 18 October

Launched research products of leading Indian companies, key

Launched online trading through www.5paisa.com on july. Started

Launched proprietary trading platform Trader Terminal for retail

Acquired commodities broking license (march).

Maiden IPO and listed on NSE, BSE on may 17th

Acquired membership of DGCX

Commenced institutional equities business under IIFL

Launched IIFL Wealth

Acquired registration for Housing Finance.

Received in-principle approval for membership of the Singapore

 Direct Equity and F & O Trading

 Online BSE and NSE executions.

• Original research. • Lack of a banking arm to

• Changing demographics with • Economic slowdown.

A mutual fund is the answer to all these situations. It appoints

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

Investment Financial Market Earnings and

Organization of a Mutual Fund

Trust/ Board of Trustees: The Sponsor appoints the Trustees. Trustees

TYPES OF MUTUAL FUND SCHEMES

A closed-end fund has a stipulated maturity period which generally

Interval funds combine the features of open-ended and close-ended

The aim of growth funds is to provide capital appreciation over the

The aim of income funds is to provide regular and steady income to

The aim of money market funds is to provide easy liquidity, preservation

Tax Saving Schemes:

• Industry Specific Schemes