36097230 Mutual Funds Complete Project Report

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A Summer Training Project Report

On

PERFORMANCECOMPARISON OF

DIFFERENT MUTUAL

FUNDS

An Internship Report submitted in the partial fulfillment of the

requirement for the degree of

MASTER OF BUSINESS ADMINISTRATION

(2009-2011)

UNDER THE GUIDANCE OF: - SUBMITTED BY: -

Rohit Pal Singh Kavita Singh

(Co-ordinator) 097609

DAYALBAGH EDUCATIONAL INSTITUTE, FACULTY OF

SOCIAL SCIENCE, AGRA.


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ACKNOWLEDGEMENT

With limitless humility, I would like to praise and thank God, the Supreme and the merciful,

who blessed me with all the favorable circumstances to go through this project.

I am highly grateful to my project coordinator, Mr. Rohit Pal Singh for all his guidance and

support during the course of this training. I am indebted to all the staff members of ICICI

Prudential who were always ready to help me.

I wish to express my profound gratitude to Dr. K.Santi Swarup, Deptt. Of Management,

Faculty of Social Sciences for his learned guidance, constant encouragement and valuable

suggestions.

I am highly obliged to my parents, brother and sister. I am also indebted to my venerable

relatives and friends whose love and affection has played a vital role during the course of this

training.

-Kavita Singh


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CONTENTS

ACKNOWLEDGEMENT ............................................................................................................................. 2

OBJECTIVES OF THE STUDY ..................................................................................................................... 4

COMPANYS PROFILE .............................................................................................................................. 5

INTRODUCTION ....................................................................................................................................... 8

MUTUAL FUND INDUSTRY ...................................................................................................................... 8

HISTORY OF MUTUAL FUND INDUSTRY ................................................................................................ 10

WHAT IS A MUTUAL FUND? .................................................................................................................. 14

MUTUAL FUNDS STRUCTURE ................................................................................................................ 16

TYPES OF MUTUAL FUNDS .................................................................................................................... 26

BENEFITS OF INVESTING THROUGH A MUTUAL FUND ......................................................................... 34

DISADVANTAGES OF MUTUAL FUND .................................................................................................... 35

PERFORMANCE MEASURES OF MUTUAL FUNDS.................................................................................. 36

PERFORMANCE COMPARISON OF MUTUAL FUNDS OF FIVE COMPANIES ........................................... 40

CALCULATION OF RISK FREE RATE OF RETURN .................................................................................... 42

Birla Sun Life Mutual Fund .................................................................................................................... 43

Kotak Mahindra Mutual Fund ............................................................................................................... 48

Escorts Mutual Fund ............................................................................................................................. 53

ICICI Prudential Mutual Fund ................................................................................................................ 59

Reliance Mutual Fund ........................................................................................................................... 66

DATA ANALYSIS AND INTERPRETATION ................................................................................................ 78

CROSS TABULATION .............................................................................................................................. 90

RESULTS AND FINDINGS ........................................................................................................................ 95

SUGGESTIONS ....................................................................................................................................... 96

CONCLUSIONS ....................................................................................................................................... 97

REFERENCES .......................................................................................................................................... 98

APPENDIX .............................................................................................................................................. 99


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OBJECTIVES OF THE STUDY

The objectives of the study is to analyses, in detail the growth pattern of mutual fund

industry in India and to evaluate performance of different schemes floated by most preferred

mutual funds in public fund in public and private sector.

The main objectives of this project are:-

To study about the Mutual Funds in India

To study the various Mutual Funds schemes in India.

To study about the risk factors involved in the Mutual Funds and How to analyze it?

To study the performance indices that can be used for mutual fund comparison.

To compare mutual funds of selected five companies on the basis of their return and

Sharpe Index.

To study the people in which age and income group prefer mutual funds over otherinvestment options.


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COMPANYS PROFILE

ICICI Prudential Asset Management Company enjoys the strong parentage of Prudential plc,

one of UK's largest players in the insurance & fund management sectors and ICICI Bank, a

well-known and trusted name in financial services in India.

ICICI Prudential Asset Management Company, in a span of just over eight years, has forged

a position of pre-eminence in the Indian Mutual Fund industry as one of the largest asset

management companies in the country with average assets under management of Rs.

83,069.89 Crore (as of April 30, 2010).

The Company manages a comprehensive range of schemes to meet the varying investment

needs of its investors spread across 230 cities in the country.

At inceptionMay 1998 As on April 30, 2010Average Assets Under Management Rs. 160 Crores Rs. 83069.89 Crores

Number of Funds Managed 2 40

Sponsors

Securities and Exchange Board of India, vide its letter no. MFD/PM/567/02 dated June 4,2002, has accorded its approval in recognizing ICICI Bank Ltd. as a co-sponsor consequentto the merger of ICICI Ltd. with ICICI Bank Ltd.

ICICI Bank is India's second-largest bank with total assets of Rs. 3,997.95 billion (US$ 100billion) at March 31, 2008 and profit after tax of Rs. 41.58 billion for the year ended March31, 2008. ICICI Bank is second amongst all the companies listed on the Indian stockexchanges in terms of free float market capitalization Free float holding excludes allpromoter holdings, strategic investments and cross holdings among public sector entities.

The Bank has a network of about 1,308 branches and 3,950 ATMs in India and presence in18 countries. ICICI Bank offers a wide range of banking products and financial services tocorporate and retail customers through a variety of delivery channels and through itsspecialised subsidiaries and affiliates in the areas of investment banking, life and non-lifeinsurance, venture capital and asset management.

The Bank currently has subsidiaries in the United Kingdom, Russia and Canada, branches inUnites States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai InternationalFinance Centre and representative offices in United Arab Emirates, China, South Africa,Bangladesh, Thailand, Malaysia and Indonesia. Our UK subsidiary has established branchesin Belgium and Germany.
http://www.icicipruamc.com/http://www.icicipruamc.com/


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ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the NationalStock Exchange of India Limited and its American Depositary Receipts (ADRs) are listed onthe New York Stock Exchange (NYSE). (Source: Overview at www.icicibank.com).

Headquartered in London, Prudential plc and its affiliated companies together constitute oneof the world's leading financial services groups. Prudential provides insurance and financialservices in a number of markets around the world, including in Asia, the US, the UK, Europeand the Middle East.

Founded in 1848, the company has 249 billion in funds under management (as of 31December 2008) and more than 21 million customers worldwide. Prudential has been writinglife insurance in the United Kingdom for 160 years and has had the largest long-term fund in

the United Kingdom, for over a century. In the United Kingdom, Prudential is a leadingretirement savings and income solutions and life assurance provider. M&G is Prudential'sfund management business in the United Kingdom and Europe, with almost 140 billion infunds under management (as of 31 December 2008).

In the United States, Jackson National Life, which we acquired in 1986, is one of the largestlife insurance companies providing retirement savings and income solutions. In Asia,Prudential is the leading Europe-based life insurer in terms of market coverage and number oftop three ranking positions. It is also one of the largest and most successful fund managers inAsia with more top five market rankings than any other regional player.

Today, Prudential has life insurance and fund management operations spanning 13 diversemarkets in Asia. Prudential plc is incorporated and with its principal place of business in theUnited Kingdom. It is not affiliated in any manner with Prudential Financial, Inc., a companywhose principal place of business is in the United States.

VALUES AT ICICI PRUDENTIAL

Every member of the ICICI Prudential team is committed to 5 core values:

Integrity Customer First

Boundaryless

Ownership

Passion.


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MANAGEMENT TEAM

Mr. Nimesh ShahManaging Director and Chief Executive Officer

Mr. Kalyan Prasath

Head - Information Technology Mr. Hemant Agarwal

HeadOperations

Mr. Nimesh ShahManaging Director and Chief Executive Officer

Mr. Nilesh ShahDeputy Managing Director

Ms. Shashi SinghHead- Channel Strategy

Mr. Ashish Kakkar

Head - Human Resources Mr. B. Ramakrishna

Chief Financial Officer

Mr. Krishna Prasad TumuluriHeadInternational Business

FUND MANAGERS

Mr. S. Naren

Mr. Chaitanya Pandey

BOARD OF DIRECTORS

Asset Management Company

Ms. Chanda KoccharChairperson

Mr. Dileep Choksi

Mr. Barry Stowe

Mr. N S Kannan

Dr. ( Mrs.) Swati A. Piramal Mr. Nimesh Shah

Mr. Vikram B. Trivedi

Mr. Nilesh Shah

Mr. Vijay Thacker
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INTRODUCTION

MUTUAL FUND INDUSTRY

The mutual fund industry in India is one of the emerging industries in India. Today, the

Indian mutual fund industry has 40 players. The number of public sector players has reduced

from 11 to 5. The public sector has gradually receded into the background, passing on a large

chunk of market share to private sector players.

The Association of Mutual Funds in India (AMFI) is the industry body set up to facilitate the

growth of the Indian mutual fund industry. It plays a pro-active role in identifying steps that

need to be taken to protect investors and promote the mutual fund sector.

It is noteworthy that AMFI is not a Self-Regulatory Organisation (SRO) and its

recommendations are not binding on the industry participants. By its very nature, AMFI has

an advisors or a counsellors role in the mutual fund industry. Its recommendations become

mandatory if and only if the Securities and Exchange Board of India (SEBI) incorporates

them into the regulatory framework it stipulates for mutual funds.

The Indian mutual fund industry follows a 3-tier structure as shown below:


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1. Sponsors

They are the individuals who think of starting a mutual fund. The Sponsor approaches SEBI,

the market regulator and also the regulator for mutual funds. Not everyone can start a mutual

fund. SEBI will grant a permission to start a mutual fund only to a person of integrity, withsignificant experience in the financial sector and a certain minimum net worth. These are just

some of the factors that come into play.

2. Trust

Once SEBI is satisfied with the credentials and eligibility of the proposed Sponsors, the

Sponsors then establish a Trust under the Indian Trust Act 1882. Trusts have no legal identityin India and thus cannot enter into contracts. Hence the Trustees are the individuals

authorized to act on behalf of the Trust. Contracts are entered into in the name of the

Trustees. Once the Trust is created, it is registered with SEBI, after which point, this Trust is

known as the mutual fund.

3. Asset Management Company (AMC)

The Trustees appoint the AMC, which is established as a legal entity, to manage the

investors (unit holders) money. In return for this money management on behalf of the

mutual fund, the AMC is paid a fee for the services provided. This fee is to be borne by

the investors and is deducted from the money collected from them.

The AMC has to be approved by SEBI and it functions under the supervision of its Board of

Directors, and also under the direction of the Trustees and the regulatory framework

established by SEBI. It is the AMC, which in the name of the Trust, that floats new schemes

and manages these schemes by buying and selling securities.


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HISTORY OF MUTUAL FUND INDUSTRY

The mutual fund industry started in 1963 with the formation of the Unit Trust of India which

was the initiative of the Government of India and the Reserve Bank of India.

The history of mutual funds in India can be broadly classified into four distinct phases : -

First Phase : 19641987

An Act of Parliament established Unit Trust of India(UTI) on 1963. It was set up by the

Reserve Bank of India and functioned under the Regulatory and administrative control of the

RBI. In 1978, UTI was delinked from RBI and the IDBI took over the regulatory and

administrative control in place of RBI. The first scheme launched by UTI was Unit Scheme,

1964. At the end of 1988 UTI had Rs. 6700 crores of AUM.

Second Phase : 19871993 (Entry of Public Sector Funds)

In 1987, it was the entry of non-UTI, public sector mutual funds setup by public sector banks

and the Life Insurance Corporation of India (LIC) and General Insurance Corporation of

India (GIC). SBI Mutual Fund was the first non-UTI Mutual Fund established in June,1987.

11,057 38,247 5.2%

1,964 8,757 0.9%

13,021 47,004 6.1%

Third Phase : 19932003 (Entry of Private Sector Funds)

With the entry of the private sector funds in 1993, a new era started in the Indian Mutual

Fund Industry, giving the investors a wider choice of fund families. Also, 1993 was the year

in which first Mutual Fund Regulations came into being, under which all mutual funds,

except UTI were to be registered and governed. The erstwhile Kothari Pioneer ( now merged


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with Franklin Templeton) was the first private sector mutual fund registered in July 1993.

The industry now functions under SEBI Regulations, 1996. At the end of January 2003, there

were 33 mutual funds with total assets of Rs. 1,21,805 crores. The UTI with Rs. 44,541

crores of AUM was way ahead of other mutual funds.

Fourth PhaseSince February 2003

In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was

bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust of

India with assets under management of Rs.29, 835 crores as at the end of January 2003,

representing broadly, the assets of US 64 scheme, assured return and certain other schemes.

Growth in Assets under Management

The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is

registered with SEBI and functions under the Mutual Fund Regulations.

The Assets under Management(AUM) have grown at a rapid pace over the past few years at a

CAGR of 35% for the past few years at a CAGR of 35 percent for the five- year period from

31 March, 2005 to 31 March, 2009. Over the 10-year period from 1999 to 2009

encompassing varied economic cycles, the industry grew at 22% CAGR.

This growth was despite two falls in the AUM the first being after year 2001 due to dotcom

bubble burst and the second in 2008, consequent to the global economic crisis.


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AUM Base and Growth Relative To the Global Industry

India has been amongst the fastest growing markets for mutual funds since 2004 in the five-

year period from 2004 to 2008 (as of December) the Indian mutual fund industry grew at 29

percent CAGR as against the global average of 4 percent . Over this period, the mutual fund

industry in mature markets like the US and France grew at 4 percent, while some of the

emerging markets viz. China and Brazil exceeded the growth witnessed in the Indian market.

AUM to GDP Ratio

The ratio of AUM to Indias GDP , gradually increased from 6 percentin 2005 to 11 percent

in 2009. Despite this however, this continues to be significantly lower than the ratio in

developed countries, where the AUM accounts for 20-70 percent of the GDP.


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WHAT IS AN INVESTMENT?

In finance, the purchase of a financial product or other item ofvalue with an expectation of

favorable future returns. In general terms, investment means the use money in the hope of

making more money.

There are three fundamentals of investment : -

Safety

Liquidity

Return

INVESTMENT AVENUES

Fixed Return Options Variable Return Options

1. Post Office2. Public Provident Fund3. Bank Fixed Deposits4. Government Securities or Gilts5. RBI Taxable Bonds6. Insurance7. Company Debentures8. Company Fixed Deposits

9. InfrastructureBonds

1. Mutual Funds2. Shares and Stock Markets3. Gold & Silver4. Property5. Foreign Exchange

Investments

Debt Insurance Equity

Small

Savings

RBI

Bonds

Primary

Market

Secondary

Market

PPF

Post Office
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WHAT IS A MUTUAL FUND?

A mutual fund is a legal vehicle that enables a collective group of individuals to:

i. Pool their surplus funds and collectively invest in instruments / assets for a common

investment objective.

ii. Optimize the knowledge and experience of a fund manager, a capacity that

individually they may not have.

iii. Benefit from the economies of scale which size enables and is not available on an

individual basis. Investing in a mutual fund is like an investment made by a

collective.


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An individual as a single investor is likely to have lesser amount of money at disposal than

say, a group of friends put together. Now, lets assume that this group of individuals is a

novice in investing and so the group turns over the pooled funds to an expert to make their

money work for them. This is what a professional Asset Management Company does for

mutual funds. The AMC invests the investors money on their behalf into various assets

towards a common investment objective.

Hence, technically speaking, a mutual fund is an investment vehicle which pools investors

money and invests the same for and on behalf of investors, into stocks, bonds, money marketinstruments and other assets. The money is received by the AMC with a promise that it will

be invested in a particular manner by a professional manager (commonly known as fund

managers). The fund managers are expected to honor this promise. The SEBI and the Board

of Trustees ensure that this actually happens.

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

assets of the fund in the same proportion as his contribution amount put up with the corpus

(the total amount of the fund). Mutual Fund investor is also known as a mutual fund

shareholder or a unit holder.

Any change in the value of the investments made into capital market instruments (such as

shares, debentures etc.) is reflected in the Net Asset Value (NAV) of the scheme. NAV is

defined as the market value of the Mutual Fund scheme's assets net of its liabilities. NAV of a

scheme is calculated by dividing the market value of scheme's assets by the total number of

units issued to the investors.

For example:

A. If the market value of the assets of a fund is Rs. 100,000

B. The total number of units issued to the investors is equal to 10,000.

C. Then the NAV of this scheme = (A)/(B), i.e. 100,000/10,000 or 10.00

D. Now if an investor 'X' owns 5 units of this scheme

E. Then his total contribution to the fund is Rs. 50 (i.e. Number of units held multiplied

by the NAV of the scheme).


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MUTUAL FUNDS STRUCTURE

TheSEBI(Mutual Funds) Regulations 1993 define a mutual fund (MF) as a fund established

in the form of a trust by a sponsor to raise monies by the Trustees through the sale of units to

the public under one or more schemes for investing in securities in accordance with these

regulations.

These regulations have since been replaced by the SEBI (Mutual Funds) Regulations, 1996.

The structure indicated by the new regulations is indicated as under. A mutual fund

comprises four separate entities, namely sponsor, mutual fund trust, AMC and custodian. The

sponsor establishes the mutual fund and gets it registered with SEBI.

The mutual fund needs to be constituted in the form of a trust and the instrument of the trust

should be in the form of a deed registered under the provisions of the Indian Registration Act,

1908.

The Custodian maintains the custody of the securities in which the scheme invests. It also

keeps a tab on corporate actions such as rights, bonus and dividends declared by the

companies in which the fund has invested. The Custodian is appointed by the Board of
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Trustees. The Custodian also participates in a clearing and settlement system through

approved depository companies on behalf of mutual funds, in case of dematerialized

securities.

The sponsor is required to contribute at least 40% of the minimum net worth (Rs. 10 crore)

of the asset management company. The board of trustees manages the MF and the sponsor

executes the trust deeds in favour of the trustees. It is the job of the MF trustees to see that

schemes floated and managed by the AMC appointed by the trustees are in accordance with

the trust deed and SEBI guidelines

TYPES OF RETURN

There are three ways, where the total returns provided by mutual funds can be enjoyed by

investors:

1. Income is earned from dividends on stocks and interest on bonds. A fund pays out

nearly all income it receives over the year to fund owners in the form of a distribution.

2. If the fund sells securities that have increased in price, the fund has a capital gain.

Most funds also pass on these gains to investors in a distribution.

3. If fund holdings increase in price but are not sold by the fund manager, the fund's

shares increase in price. You can then sell your mutual fund shares for a profit. Funds

will also usually give you a choice either to receive a check for distributions or to

reinvest the earnings and get more shares.


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INDICATORS OF INVESTMENT RISK

There are five main indicators of investment risk that apply to the analysis of stocks, bonds

and mutual fund portfolios. They are alpha,beta,r-squared, standard deviation and the

Sharpe ratio.These statistical measures are historical predictors of investment risk/volatility

and are all major components ofmodern portfolio theory (MPT).

The MPT is a standard financial and academic methodology used for assessing the

performance of equity, fixed-income and mutual fund investments by comparing them to

market benchmarks.

All of these risk measurements are intended to help investors determine the risk-

reward parameters of their investments. In this article, we'll give a brief explanation

of each of these commonly used indicators.
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UNDERSTANDING AND MANAGING RISK

All investments whether in shares, debentures or deposits involve risk: share value may go

down depending upon the performance of the company, the industry, state of capital markets

and the economy; generally, however, longer the term, lesser the risk; companies may default

in payment of interest/principal on their debentures/bonds/deposits; the rate of interest on an

investment may fall short of the rate of inflation reducing the purchasing power.

While risk cannot be eliminated, skillful management can minimize risk. Mutual Funds help

to reduce risk through diversification and professional management. The experience and

expertise of Mutual Fund managers in selecting fundamentally sound securities and timing

their purchases and sales help them to build a diversified portfolio that minimize risk and

maximizes returns.

The risk return trade-off indicates that if investor is willing to take higher risk then

correspondingly he can expect higher returns and vice versa if he pertains to lower risk

instruments, which would be satisfied by lower returns. For example, if an investors opt for

bank FD, which provide moderate return with minimal risk. But as he moves ahead to invest

in capital protected funds and the profit-bonds that give out more return which is slightly

higher as compared to the bank deposits but the risk involved also increases in the same

proportion.

Thus investors choose mutual funds as their primary means of investing, as Mutual funds

provide professional management, diversification, convenience and liquidity. That doesnt

mean mutual fund investments risk free. This is because the money that is pooled in are not

invested only in debts funds which are less riskier but are also invested in the stock markets

which involves a higher risk but can expect higher returns.


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RISKS ASSOCIATED WITH MUTUAL FUNDS

At the cornerstone of investing is the basic principle that the greater the risk you take, the

greater the potential reward. Remember that the value of all financial investments will

fluctuate.

Individual tolerance for risk varies, creating a distinct "investment personality" for each

investor. Some investors can accept short-term volatility with ease, others with near panic. So

whether you consider your investment temperament to be conservative, moderate or

aggressive, you need to focus on how comfortable or uncomfortable you will be as the value

of your investment moves up or down.

Managing Risks

Mutual funds offer incredible flexibility in managing investment risk. Diversification and

Automatic Investing (SIP) are two key techniques you can use to reduce your investment risk

considerably and reach your long-term financial goals.

Diversification

When you invest in one mutual fund, you instantly spread your risk over a number of

different companies. You can also diversify over several different kinds of securities by

investing in different mutual funds, further reducing your potential risk.

Diversification is a basic risk management tool that you will want to use throughout your

lifetime as you rebalance your portfolio to meet your changing needs and goals. Investors,

who are willing to maintain a mix of equity shares, bonds and money market securities have a

greater chance of earning significantly higher returns over time than those who invest in only

the most conservative investments.

Additionally, a diversified approach to investing -- combining the growth potential of equities

with the higher income of bonds and the stability of money markets -- helps moderate your

risk and enhance your potential return.

Systematic Investment Plan (SIP)

The Unitholders of the Scheme can benefit by investing specific Rupee amounts periodically,for a continuous period. Mutual fund SIP allows the investors to invest a fixed amount of


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Rupees every month or quarter for purchasing additional units of the Scheme at NAV based

prices.

Here is an illustration using hypothetical figures indicating how the SIP can work for

investors:

Suppose an investor would like to invest Rs.1,000 under the Systematic Investment Plan on a

quarterly basis.

Amount Invested (Rs.) Purchase Price (Rs.) No. of UnitsPurchased

InitialInvestment

1000 10 100

1 1000 8.20 121.952 1000 7.40 135.14

3 1000 6.10 163.93

4 1000 5.40 185.19

5 1000 6.00 166.67

6 1000 8.20 121.95

7 1000 9.25 108.11

8 1000 10.00 100.00

9 1000 11.25 88.89

10 1000 13.40 74.63

11 1000 14.40 69.44TOTAL 12,000 - 1,435.90

Average unit cost Rs 12,000/1,435.9 = Rs 8.36

Average unit price 109.6/12 = Rs 9.13

Unit price at beginning of next quarter Rs 14.90

Market value of investment 1435.9 * 14.90= Rs 21,395/-

The investor liquidates his units and gets back Rs 21,395/-

Using the SIP strategy the investor can reduce his average cost per unit. The investor gets theadvantage of getting more units when the market is turned down.


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TYPES OF RISKS

All investments involve some form of risk. Even an insured bank account is subject to the

possibility that inflation will rise faster than your earnings, leaving you with less real

purchasing power than when you started (Rs. 1000 gets you less than it got your father when

he was your age).

Consider these common types of risk and evaluate them against potential rewards when you

select an investment.

Market Risk

At times the prices or yields of all the securities in a particular market rise or fall due to broad

outside influences. When this happens, the stock prices of both an outstanding, highlyprofitable company and a fledgling corporation may be affected. This change in price is due

to "market risk".

Inflation Risk

Sometimes referred to as "loss of purchasing power." Whenever inflation sprints forward

faster than the earnings on your investment, you run the risk that you'll actually be able to

buy less, not more. Inflation risk also occurs when prices rise faster than your returns.


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Credit Risk

In short, how stable is the company or entity to which you lend your money when you invest?

How certain are you that it will be able to pay the interest you are promised, or repay your

principal when the investment matures?

Interest Rate Risk

Changing interest rates affect both equities and bonds in many ways. Investors are reminded

that "predicting" which way rates will go is rarely successful. A diversified portfolio can help

in offseting these changes.

Exchange Risk

A number of companies generate revenues in foreign currencies and may have investments or

expenses also denominated in foreign currencies. Changes in exchange rates may, therefore,

have a positive or negative impact on companies which in turn would have an effect on the

investment of the fund.

Investment Risk

The sectoral fund schemes, investments will be predominantly in equities of select companies

in the particular sectors. Accordingly, the NAV of the schemes are linked to the equity

performance of such companies and may be more volatile than a more diversified portfolio of

equities.

Changes in Government Policy

Changes in Government policy especially in regard to the tax benefits may impact the

business prospects of the companies leading to an impact on the investments made by the

fund.


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REGULATORY AUTHORITIES

To protect the interest of the investors, SEBI formulates policies and regulates the mutual

funds. It notified regulations in 1993 (fully revised in 1996) and issues guidelines from time

to time. MF either promoted by public or by private sector entities including one promoted by

foreign entities is governed by these Regulations. SEBI approved Asset Management

Company (AMC) manages the funds by making investments in various types of securities.

Custodian, registered with SEBI, holds the securities of various schemes of the fund in its

custody.

According to SEBI Regulations, two thirds of the directors of Trustee Company or board of

trustees must be independent. The Association of Mutual Funds in India (AMFI) reassures

the investors in units of mutual funds that the mutual funds function within the strict

regulatory framework. Its objective is to increase public awareness of the mutual fund

industry. AMFI also is engaged in upgrading professional standards and in promoting best

industry practices in diverse areas such as valuation, disclosure, transparency etc.


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MUTUAL FUNDS IN INDIA

1) ABN AMRO Mutual Fund

2) Benchmark Mutual Fund

3) Birla Sun Life Mutual Fund

4) Bharti AXA Mutual Fund

5) BOB Mutual Fund

6) Canara Robero Mutual Fund

7) DBS Chola Mutual Fund

8) Deutsche Mutual Fund

9) DSP BlackRock Mutual Fund

10) Escorts Mutual Fund

11) Fidelity Mutual Fund

12) Fortis ( ABN ) Mutual Fund

13) Franklin Templeton Mutual Fund

14) HDFC Mutual Fund

15) HSBC Mutual Fund

16) ING Vysya Mutual Fund

17) JM Financial Mutual Fund

18) Kotak Mahindra Mutual Fund

19) LIC Mutual Fund

20) Principal Mutual Fund

21) ICICI Prudential Mutual Fund

22) Reliance Mutual Fund

23) Sahara Mutual Fund

24) SBI Mutual Fund

25) Standard Chartered Mutual Fund

26) Sundaram Mutual Fund

27) Tata Mutual Fund

28) Taurus Mutual Fund

29) UTI Mutual Fund
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TYPES OF MUTUAL FUNDS

There are wide variety of Mutual Fund schemes that cater to investor needs, whatever the

age, financial position, risk tolerance and return expectations. The mutual fund schemes canbe classified according to both their investment objective (like income, growth, tax saving) as

well as the number of units (if these are unlimited then the fund is an open-ended one while if

there are limited units then the fund is close-ended).

Open-ended schemes

These funds are sold at the NAV based prices, generally calculated on every business day.

These schemes have unlimited capitalization, open-ended schemes do not have a fixed

maturity - i.e. there is no cap on the amount you can buy from the fund and the unit capitalcan keep growing. These funds are not generally listed on any exchange.

Open-ended funds are bringing in a revival of the mutual fund industry owing to increased

liquidity, transparency and performance in the new open-ended funds promoted by the

private sector and foreign players. Open-ended funds score over close-ended ones on several

counts. Some of these are listed below:


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a) Any time exit option : The issuing company directly takes the responsibility of providing

an entry and an exit. This provides ready liquidity to the investors and avoids reliance on

transfer deeds, signature verifications and bad deliveries.

b) Tax advantage : Though Budget 2004 proposals envisage a tax rate of 20.91%(Corporate

investors) and 13.06875% (Non-Corporate investors) on dividend distribution made by the

Debt funds, the funds continue to remain attractive investment vehicles. In equity plans there

is no distribution tax.

c) Any time entry option : An open-ended fund allows one to enter the fund at any time and

even to invest at regular intervals(a systematic investment plan).

The open ended funds offered by ICICI Prudential Mutual Fund are

Liquid Plan Income Plan

Gilt-Treasury

Gilt-Investment

Balanced Fund

Growth Fund

Tax Plan

FMCG Fund

Technology Fund

Monthly Income Plan

Child Care Plan

Power and Short Term Plan

Close ended schemes

Schemes that have a stipulated maturity period, limited capitalization and the units are listed

on the stock exchange are called close-ended schemes.

These schemes have historically seen a lot of subscription. This popularity is estimated to be

on account of firstly, public sector MFs having floated a lot of close-ended income schemes

with guaranteed returns and secondly easy liquidity on account of listing on the stock

exchanges.
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The closed-ended fund managed by ICICI Prudential Mutual Fund is ICICI Premier.

Classification according to investment objectives

Objectives

Mutual funds have specific investment objectives such as growth of capital, safety of

principal, current income or tax-exempt income. In general mutual funds fall into three

general categories:

Equity Funds invest in shares or equity of companies.

Fixed-Income funds invest in government or corporate securities that offer fixed rates

of return.

Balanced Funds invest in a combination of both stocks and bonds.

i) Growth Funds

These funds seek to provide growth of capital with secondary emphasis on dividend. They

invest in shares with a potential for growth and capital appreciation. Because they invest in

well-established companies where the company itself and the industry in which it operates

are thought to have good long-term growth potential, growth funds provide low current

income. Growth funds generally incur higher risks than income funds in an effort to secure

more pronounced growth.

These funds may invest in a broad range of industries or concentrate on one or more industry

sectors. Growth funds are suitable for investors who can afford to assume the risk of potential

loss in value of their investment in the hope of achieving substantial and rapid gains.

They are not suitable for investors who must conserve their principal or who must maximize

current income.

ii) Growth and Income Funds

Growth and income funds seek long-term growth of capital as well as current income. The

investment strategies used to reach these goals vary among funds. Some invest in a dual

portfolio consisting of growth stocks and income stocks, or a combination of growth stocks,

stocks paying high dividends, preferred stocks, convertible securities or fixed-income


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securities such as corporate bonds and money market instruments. Others may invest in

growth stocks and earn current income by selling covered call options on their portfolio

stocks. Growth and income funds have low to moderate stability of principal and moderate

potential for current income and growth. They are suitable for investors who can assume

some risk to achieve growth of capital but who also want to maintain a moderate level of

current income.

iii) Fixed-Income Funds

The goal of fixed income funds is to provide current income consistent with the preservation

of capital. These funds invest in corporate bonds or government-backed mortgage securities

that have a fixed rate of return. Within the fixed-income category, funds vary greatly in theirstability of principal and in their dividend yields. High-yield funds, which seek to maximize

yield by investing in lower-rated bonds of longer maturities, entail less stability of principal

than fixed-income funds that invest in higher-rated but lower-yielding securities.

Low Risk High


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Some fixed-income funds seek to minimize risk by investing exclusively in securities whose

timely payment of interest and principal is backed by the full faith and credit of the Indian

Government. Fixed-income funds are suitable for investors who want to maximize current

income and who can assume a degree of capital risk in order to do so.

iv) Balanced Fund

The Balanced fund aims to provide both growth and income. These funds invest in both

shares and fixed income securities in the proportion indicated in their offer documents. Ideal

for investors who are looking for a combination of income and moderate growth.

v) Money Market Funds/Liquid Funds

For the cautious investor, these funds provide a very high stability of principal while seeking

a moderate to high current income. They invest in highly liquid, virtually risk-free, short-term

debt securities of agencies of the Indian Government, banks and corporations and Treasury

Bills. Because of their short-term investments, money market mutual funds are able to keep a

virtually constant unit price; only the yield fluctuates.

Therefore, they are an attractive alternative to bank accounts. With yields that are generally

competitive with - and usually higher than -- yields on bank savings account, they offer

several advantages. Money can be withdrawn any time without penalty. Although not

insured, money market funds invest only in highly liquid, short-term, top-rated money market

instruments.

Money market funds are suitable for investors who want high stability of principal and

current income with immediate liquidity.

vi) Specialty/Sector Funds

These funds invest in securities of a specific industry or sector of the economy such as health

care, technology, leisure, utilities or precious metals. The funds enable investors to diversify

holdings among many companies within an industry, a more conservative approach than

investing directly in one particular company.


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Sector funds offer the opportunity for sharp capital gains in cases where the fund's industry is

"in favor" but also entail the risk of capital losses when the industry is out of favor. While

sector funds restrict holdings to a particular industry, other specialty funds such as index

funds give investors a broadly diversified portfolio and attempt to mirror the performance of

various market averages.

Index funds generally buy shares in all the companies composing the BSE Sensex or NSE

Nifty or other broad stock market indices. They are not suitable for investors who must

conserve their principal or maximize current income.

A summary is presented in the table below of the various funds and their investment

objectives.


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Comparison with Other Investment

Avenues

Investment

AvenuesLiquidity Safety Returns Volatility

TAX

BENEFIT

CONVENIENCE

Fixed Deposits Low Low Moderate Low No Moderate

Equity sharesModerate

to highLow Uncertain High No Moderate

Co.Debenture Low Moderate Moderate Moderate No Low

Co. Deposit Low Moderate Low Low No Low

Life Insurance Low High Low Low Yes Moderate

Mutual Funds

(Open ended)

High Moderate Moderate High No High

Mutual Funds

(close ended )

High Moderate Moderate High Yes High

RBI Bonds Moderate High Moderate Low Yes Moderate

Bank Fixed

DepositHigh High Low Low No High

PPF Low High Moderate Low Yes Moderate

Post Office High High Good Low Yes Moderate

NSC Low High Moderate Low Yes Moderate

Gold High High Moderate Moderate No High

Infrastructure

Bonds Moderate High Moderate Low No Low

Real Estate Low Moderate Variable High Yes High

Public sec. & FII

BondsModerate High Moderate Moderate No High

National Savings

CertificateLow High Moderate Low Yes Moderate


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Comparison between FD, Bonds and Mutual Fund Features

Characteristics FD's Bonds Mutual Funds

Accessibility Low Low High

Tenor Fixed(medium) Fixed(Long) No Lock-in

Min. Investment Rs.1000 Rs.5000 Rs.5000

Tax Benefits None 80L, 88 Dividend Tax-Free

Liquidity Low Very Low Very High

Convenience Medium Tedious Very High

Transparency None None Very High

Funds differ in terms of their risk profile

Equity Funds High Level of Return, but has a high level of risk too

Debt Funds Returns comparatively less risky than equity funds

Liquid and Money MarketFunds

Provide stable but low level of return


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BENEFITS OF INVESTING THROUGH A MUTUAL FUND

A mutual fund is an entity that pools the money of many investors -- its unit-holders -- to

invest in different securities. Investments may be in shares, debt securities, money market

securities or a combination of these. Those securities are professionally managed on behalf of

the unit-holders, and each investor holds a pro-rata share of the portfolio i.e. entitled to any

profits when the securities are sold, but subject to any losses in value as well.

i) Professional investment management

Mutual funds hire full-time, high-level investment professionals. Funds can afford to do so as

they manage large pools of money. The managers have real-time access to crucial marketinformation and are able to execute trades on the largest and most cost-effective scale.

ii) Diversification

Mutual funds invest in a broad range of securities. This limits investment risk by reducing the

effect of a possible decline in the value of any one security. Mutual fund unit-holders can

benefit from diversification techniques usually available only to investors wealthy enough to

buy significant positions in a wide variety of securities.

iii) Low Cost

A mutual fund let's you participate in a diversified portfolio for as little as Rs.5,000/-, and

sometimes less. And with a no-load fund, you pay little or no sales charges to own them.

iv) Convenience and Flexibility

You own just one security rather than many, yet enjoy the benefits of a diversified portfolio

and a wide range of services. Fund managers decide what securities to trade, collect the

interest payments and see that your dividends on portfolio securities are received and your

rights exercised. It also uses the services of a high quality custodian and registrar in order to

make sure that your convenience remains at the top of our mind.

v) Personal Service


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One call puts you in touch with a specialist who can provide you with information you can

use to make your own investment choices. They will provide you personal assistance in

buying and selling your fund units, provide fund information and answer questions about

your account status.

vi)Liquidity

In open-ended schemes, you can get your money back promptly at net asset value related

prices from the mutual fund itself.

vii) Transparency

You get regular information on the value of your investment in addition to disclosure on the

specific investments made by the mutual fund scheme.

DISADVANTAGES OF MUTUAL FUND

1. Costs Control Not in the Hands of an Investor: Investor has to pay investment

management fees and fund distribution costs as a percentage of the value of his

investments, irrespective of the performance of the fund.

2. No Customized Portfolios: The portfolio of securities in which a fund invests is a

decision taken by the fund manager. Investors have no right to interfere in the

decision making process of a fund manager, which some investors find as a constraint

in achieving their financial objectives.

3. Difficulty in Selecting a Suitable Fund Scheme: Many investors find it difficult to

select one option from the plethora of funds/schemes/plans available.


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PERFORMANCE MEASURES OF MUTUAL FUNDS

Return alone should not be considered as the basis of measurement of the performance of a

mutual fund scheme, it should also include the risk taken by the fund manager because

different funds will have different levels of risk attached to them. Risk associated with a fund,

in a general, can be defined as variability or fluctuations in the returns generated by it. The

higher the fluctuations in the returns of a fund during a given period, higher will be the risk

associated with it. These fluctuations in the returns generated by a fund are resultant of two

guiding forces. First, general market fluctuations, which affect all the securities present in the

market, called market risk or systematic risk and second, fluctuations due to specific

securities present in the portfolio of the fund, called unsystematic risk.

The Total Risk of a given fund is sum of these two and is measured in terms of standard

deviation of returns of the fund. Systematic risk, on the other hand, is measured in terms of

Beta, which represents fluctuations in the NAV of the fund vis--vis market. The more

responsive the NAV of a mutual fund is to the changes in the market; higher will be its beta.

Beta is calculated by relating the returns on a mutual fund with the returns in the market.

While unsystematic risk can be diversified through investments in a number of instruments,

systematic risk cannot. By using the risk return relationship, we try to assess the competitive

strength of the mutual funds vis--vis one another in a better way.

In order to determine the risk-adjusted returns of investment portfolios, several eminent

authors have worked since 1960s to develop composite performance indices to evaluate a

portfolio by comparing alternative portfolios within a particular risk class. The most

important and widely used measures of performance are:

The Treynor Measure

The Sharpe Measure

Jenson Model


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Fama Model

The Treynor Measure

Developed by Jack Treynor, this performance measure evaluates funds on the basis of

Treynor's Index. This Index is a ratio of return generated by the fund over and above risk free

rate of return (generally taken to be the return on securities backed by the government, as

there is no credit risk associated), during a given period and systematic risk associated with it

(beta). Symbolically, it can be represented as:

Treynor's Index (Ti) = (Ri - Rf)/Bi.

Where, Ri represents return on fund, Rfis risk free rate of return and Biis beta of the fund.

All risk-averse investors would like to maximize this value. While a high and positive

Treynor's Index shows a superior risk-adjusted performance of a fund, a low and negative

Treynor's Index is an indication of unfavorable performance.

The Sharpe Measure

In this model, performance of a fund is evaluated on the basis of Sharpe Ratio, which is a

ratio of returns generated by the fund over and above risk free rate of return and the total risk

associated with it. According to Sharpe, it is the total risk of the fund that the investors are

concerned about. So, the model evaluates funds on the basis of reward per unit of total risk.

Symbolically, it can be written as:

Sharpe Index (Si) = (Ri - Rf)/Si

Where, Si is standard deviation of the fund.

While a high and positive Sharpe Ratio shows a superior risk-adjusted performance of a fund,

a low and negative Sharpe Ratio is an indication of unfavorable performance.

Comparison of Sharpe and Treynor


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Sharpe and Treynor measures are similar in a way, since they both divide the risk premium

by a numerical risk measure. The total risk is appropriate when we are evaluating the risk

return relationship for well-diversified portfolios. On the other hand, the systematic risk is the

relevant measure of risk when we are evaluating less than fully diversified portfolios or

individual stocks. For a well-diversified portfolio the total risk is equal to systematic risk.

Rankings based on total risk (Sharpe measure) and systematic risk (Treynor measure) should

be identical for a well-diversified portfolio, as the total risk is reduced to systematic risk.

Therefore, a poorly diversified fund that ranks higher on Treynor measure, compared with

another fund that is highly diversified, will rank lower on Sharpe Measure.

Jenson Model

Jenson's model proposes another risk adjusted performance measure. This measure was

developed by Michael Jenson and is sometimes referred to as the Differential Return Method.

This measure involves evaluation of the returns that the fund has generated vs. the returns

actually expected out of the fund given the level of its systematic risk. The surplus between

the two returns is called Alpha, which measures the performance of a fund compared with the

actual returns over the period. Required return of a fund at a given level of risk (Bi) can be

calculated as: Ri = Rf + Bi (Rm - Rf)

Where, Rm is average market return during the given period. After calculating it, alpha can

be obtained by subtracting required return from the actual return of the fund.

Higher alpha represents superior performance of the fund and vice versa. Limitation of this

model is that it considers only systematic risk not the entire risk associated with the fund and

an ordinary investor can not mitigate unsystematic risk, as his knowledge of market is

primitive.

Fama Model

The Eugene Fama model is an extension of Jenson model. This model compares the

performance, measured in terms of returns, of a fund with the required return commensurate

with the total risk associated with it. The difference between these two is taken as a measure

of the performance of the fund and is called net selectivity.


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The net selectivity represents the stock selection skill of the fund manager, as it is the excess

return over and above the return required to compensate for the total risk taken by the fund

manager. Higher value of which indicates that fund manager has earned returns well above

the return commensurate with the level of risk taken by him.

Required return can be calculated as: Ri = Rf + Si/Sm*(Rm - Rf)

Where, Sm is standard deviation of market returns. The net selectivity is then calculated by

subtracting this required return from the actual return of the fund.

Among the above performance measures, two models namely, Treynor measure and Jenson

model use systematic risk based on the premise that the unsystematic risk is diversifiable.

These models are suitable for large investors like institutional investors with high risk taking

capacities as they do not face paucity of funds and can invest in a number of options to dilute

some risks. For them, a portfolio can be spread across a number of stocks and sectors.

However, Sharpe measure and Fama model that consider the entire risk associated with fund

are suitable for small investors, as the ordinary investor lacks the necessary skill and

resources to diversified. Moreover, the selection of the fund on the basis of superior stock

selection ability of the fund manager will also help in safeguarding the money invested to a

great extent.


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PERFORMANCE COMPARISON OF MUTUAL FUNDS OF FIVE COMPANIES

RESEARCH METHODOLOGY

Research is an organized enquiry designed and carried out to provide information for solving

a problem.

Research methodology is a way to systematically solve the research problem. It may be

understood as a science of studying how research is done scientifically.

DATA COLLECTION

The task of data collection begins after a research problem has been defined. While

deciding about the method of data collection to be used for the study, the researcher shouldkeep in mind two types of data viz, primary and secondary.

NAV and corresponding returns of 5 Mutual Funds Schemes:

In this study, we have selected the 5 mutual fund companies. Following is the NAV and

corresponding return of last 1 year starting from 1st April, 2009 to 31st March, 2010. The

funds are chosen randomly from the available means.

Primary data may be described as those data that have been observed and recorded by the

researchers for the first time to their knowledge. Primary data can be classified into two

types:

Data classified by their nature.

Data classified according to function.

Primary data can be collected through several methods. Some of the

important ones are:


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i. Observation method

ii. Interview method

Secondary data are collected from various websites as well as books, newspapers, research

papers.

TECHNIQUES USED IN THIS STUDY

In this study, we have used various statistics tools like descriptive statistics, percentage,

indices available, etc. for analyzing, interpreting and comparison of different mutual fund

schemes. The Sharpe Index Model is also used to analyze the performance evaluation and

ranking for the difference mutual funds schemes in India.

SCOPE OF THE STUDY:

The 5 most preferred public and private sector mutual funds schemes have been taken for the

study. These public and private mutual funds schemes were studies during the period of 1st

April, 2009 to 31st

March, 2010.

LIMITATIONS OF THE STUDY:

Due to shortage of time and money, we selected only 5 mutual funds schemes which include

public and private mutual funds. The data was collected for analysis from 1 April, 2009 to 1

April, 2010. My study is based on the limited 5 mutual funds schemes only which affect theresults of the study.


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CALCULATION OF RISK FREE RATE OF RETURN

For Calculating Risk free rate of returns the average monthly yields on 91-day government of

India treasury bills.

Here, 91-DAY GOVERNMENT OF INDIA TREASURYBILLS are used as a risk-

free asset, and they pay a fixed rate of interest and have exceptionally

lowdefaultrisk.

The risk-free asset has zero variance in returns (hence is risk-free); it is also

uncorrelated with any other asset (by definition: since its variance is zero).

As a result, when it is combined with any other asset, or portfolio of assets, the

change in return and also in riskis linear.

Source:- www.rbi.com

Month Yield

Apr-09 3.81

May-09 3.25

Jun-09 3.34

Jul-09 3.22

Aug-09 3.34

Sep-09 3.33

Oct-09 3.23

Nov-09 3.27

Dec-09 3.54

Jan-10 3.85

Feb-10 4.11

Mar-10 4.33

Yields on 91-Day Government of India Treasury

Therefore, the average yield = 3.55% is the risk free rate of return
http://en.wikipedia.org/wiki/Default_(finance)http://en.wikipedia.org/wiki/Default_(finance)http://en.wikipedia.org/wiki/Default_(finance)http://en.wikipedia.org/wiki/Default_(finance)


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Birla Sun Life Mutual Fund

Birla Sun Life Asset Management Company Limited, the investment manager of Birla

Sunlife Mutual Fund, is a joint venture between the Aditya Birla Group and Sun Life

Financial Services, leading international financial services organization.

Established in 1994, Birla Sunlife AMC provides investors a range of 18 investment options,

which include diversified and sector specific equity schemes, a wide range of debt and

treasury products, and two offshore funds.

Both the sponsors have equal stakes in the AMC. In recognition to its high quality investment

products, Birla Sun Life Asset Management Company became India's first asset management

company to be awarded the coveted ISO 9001:2000 certification by DNV Netherlands.

No. of schemes 71

No. of schemes including options 219

Gilt Fund 16Equity Schemes 64

Debt Schemes 106

Short term debt Schemes 17

Equity & Debt 10

Money Market 0

Corpus Under Management: Rs.49983.17 Crs. as on Feb 28, 2009


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Key Personnel: Mr. Donald Stewart (Chairman), A Balasubramanian (CEO), Ashok

Suvarna (COO), Abhay Palnitkar (CFO), Sanjay Singal (CMO), Bhavdeep Bhatt (Head

Products).

For Performance Comparison we take three Mutual Fund Schemes of

Company:

Birla Sun Life Equity Fund (Growth)

Birla Sun Life Income Fund (Growth)

Birla Sun Life Tax Plan (Growth)

The Monthly NAV & Returns of above three Mutual Fund Schemes as Follows:-

1. Birla Sun Life Equity Fund (Growth)

Month Net Assets Value Monthly Return

Apr-09 123.90 - 183.76 48.3132

May-09 183.76 - 195.43 6.3507

Jun-09 195.43 - 194.66 -0.394

Jul-09 194.66 - 216.34 11.1374

Aug-09 216.34 - 216.34 0

Sep-09 216.34 - 231.95 7.2155

Oct-09 231.95 - 223.08 -3.8241

Nov-09 223.08 - 239.77 7.4816

Dec-09 239.77 - 252.08 5.1341

Jan-10 252.08 - 241.77 -4.09

Feb-10 241.77 - 237.14 -1.915

Mar-10 237.14 - 252.91 6.6501

Calculation of Sharpe Index:

AVERAGE RETURN 6.84%


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Sharpe Index = Portfolio average return - Risk free rate of return

Standard Deviation

2. Birla Sun Life Income Fund (Growth)


Apr-09 32.0807 - 31.9038 -0.5514

May-09 31.9038 - 32.3045 1.2560

Jun-09 32.3045 - 33.0633 2.3489

Jul-09 33.0633 - 32.8129 -0.7573

Aug-09 32.8129 - 33.0589 0.7497

Sep-09 33.0589 - 33.3736 0.9519

Oct-09 33.3736 - 33.9135 1.6177

Nov-09 33.9135 - 33.7813 -0.3898

Dec-09 33.7813 - 33.8415 0.1782

Jan-10 33.8415 - 33.7849 -0.1673

Feb-10 33.7849 - 33.7849 0.0000

Mar-10 33.7849 - 33.9643 0.5310

AVERAGE RETURN0.4806 %



Standard Deviation

235.0

39.13

%55.3%84.6

t

t

p

fp

t

S

S

RR

S

259.3

942.0

%55.3%48.0

t

t

p

fp

t

S

S

RRS


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3. Birla Sun Life Tax Plan (Growth)


Apr-09 7.13 - 8.65 21.3184

May-09 8.65 - 10.66 23.2370

Jun-09 10.66 - 10.28 -3.5647

Jul-09 10.28 - 11.44 11.2840

Aug-09 11.44 - 11.44 0.0000

Sep-09 11.44 - 12.19 6.5559

Oct-09 12.19 - 11.42 -6.3167

Nov-09 11.42 - 12.24 7.1804

Dec-09 12.24 - 12.87 5.1471

Jan-10 12.87 - 12.15 -5.5944

Feb-10 12.15 - 12.09 -0.4938

Mar-10 12.09 - 12.85 6.2862

AVERAGE RETURN 5.4199 %



Standard Deviation

1947.0

60.9

%55.3%4199.5

t

t

p

fp

t

S

S

RRS


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Interpretation of the Funds Performance

Particular

Birla Sun Life Equity Fund-Growth 6.8383 % 0.235 I

Birla Sun Life Income Fund -Growth 0.4806 % -3.259 III

Birla Sun Life Tax Plan (Growth) 5.4199 % 0.1947 II

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%6.00%

7.00%

8.00%

Birla Sun L ife Equity

Fund-Growth

Birla Sun Life Income

Fund -Growth

Birla Sun Life Tax Plan

(Growth)

Average Return


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Kotak Mahindra Mutual Fund

The fund is promoted by Kotak Mahindra Bank, one of India's leading financial institutions

that offer financial solutions ranging from commercial banking, stock broking, life insurance

and investment banking. Kotak Mahindra Asset Management Company Limited, a wholly

owned subsidiary of Kotak Mahindra Bank, is the asset manager for Kotak Mahindra mutual

fund.

The company is headed by Uday Kotak of Kotak Bank as chairman and the fund

management function is headed by Sandesh Kirkire, chief executive officer. Kotak

Mahindra mutual fund launched its schemes in December 1998 and today manages assets of

4, 34,504 investors in various schemes. Kotak Mahindra mutual fund was the first fund house

in the country to launch a dedicated gilt scheme investing only in government securities.

No. of schemes 50


Equity Schemes 22

Debt Schemes 74


Equity & Debt 1


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Corpus Under Management: Rs.36776.2375 Crs. as on May 31, 2010

Key Personnel: Uday S Kotak (Chairman), Sandesh Kirkire (CEO), Alroy Lobo (Chief

Strategist & Global Head Equities Asset Mgmt), V R Narasimhan (CCO), R. Krishnan

(COO, Sandeep Kamath (Compliance), R. Chandrasekaran (IRO)

For Performance Comparison we take three Mutual Fund Schemes of

Company:

Kotak Equity-FOF-Growth

Kotak Income Plus-(Growth)

Kotak Tax Saver-Scheme-Growth

1. Kotak Equity-FOF-Growth


Apr-09 18.755 - 20.77 10.7438

May-09 20.77 - 27.76 33.6543

Jun-09 27.76 - 27.516 -0.8790

Jul-09 27.516 - 30.134 9.5145

Money Market 0

Gilt Fund 7


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Aug-09 30.134 - 30.134 0.0000

Sep-09 30.134 - 32.362 7.3936

Oct-09 32.362 - 31.2190 -3.5319

Nov-09 31.2190 - 33.2560 6.5249

Dec-09 33.2560 - 34.354 3.3017

Jan-10 34.354 - 33.1050 -3.6357

Feb-10 33.1050 - 32.9910 -0.3444

Mar-10 32.9910 - 34.8960 5.7743

AVERAGE RETURN

5.7097%



Standard Deviation

2. Kotak Income Plus-Growth


Apr-09 12.8357 - 13.1026 2.0794

May-09 13.1026 - 13.736 4.8342

Jun-09 13.736 - 13.6629 -0.5249

Jul-09 13.736 - 14.0937 3.1455

Aug-09 14.0937 - 14.0937 0.0000

Sep-09 14.0937 - 14.1651 0.5066

Oct-09 14.1651 - 14.2771 0.7907

Nov-09 14.2771 - 14.5153 1.6684

Dec-09 14.5153 - 14.6471 0.9080

Jan-10 14.6471 - 14.5702 -0.5250

Feb-10 14.5702 - 14.5597 -0.0721

Mar-10 14.5597 - 14.8148 1.7521


2144.0

06.10

%55.3%709.5

t

t

p

fp

t

S

S

RRS


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Standard Deviation

3. Kotak Tax Saver Scheme-Growth


Apr-09 9.122 - 9.98 9.4058

May-09 9.98 - 13.789 38.1663

Jun-09 13.789 - 13.447 -2.4802

Jul-09 13.447 - 14.894 10.7608

Aug-09 14.894 - 14.894 0.0000

Sep-09 14.894 - 15.918 6.8753

Oct-09 15.918 - 14.9270 -6.2257

Nov-09 14.9270 - 16.06 7.5903

Dec-09 16.06 - 16.675 3.8294

Jan-10 16.675 - 15.85 -4.9475Feb-10 15.85 - 15.8110 -0.2461

4634.159.1

%55.3%2136.1

t

t

p

fp

t

S

S

RRS


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Mar-10 15.8110 - 17.1080 8.2031

AVERAGE RETURN (in %age) 5.9110%



Standard Deviation


Particular Average

Return

Sharp Index

Ratio

Rank

Kotak Equity-FOF-Growth 5.7097 % 0.2144 I

Kotak Income Plus-(Growth) 1.2136 % - 1.4634 III

Kotak Tax Saver-Scheme- 5.9110 % 0.1637 II

1637.0

66.11

%55.3%911.5

t

t

p

fp

t

S

S

RRS


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Growth

Escorts Mutual Fund

Escorts Mutual Fund is promoted by the business conglomerate Escorts group. Escorts Asset

Management Limited acts as the AMC to the mutual fund. Escorts Mutual Fund usually

offers open ended schemes and the fund category is Equity- balanced fund.


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The fund is a member of the Escort Group of Companies, which deals with a number of high

growth industries like construction and material handling equipment, farm machinery, two

wheelers, auto ancillary products and financial Services.


Key Personnel: Rajan Nanda (Chairman & MD), Lalit K Khanna (CEO & Compliance),

Sanjay Arora (CIO), Mohini Sharma (IRO).

Fund Managers: Mr. Jagveer Singh Fauzdar , Mr. Sanjeev Sharma.

For Performance Comparison we take three Mutual Fund

Schemes of Company

Escorts Growth Plan (Growth)

Escorts Income Plan (Growth)

No. of schemes 13


Equity Schemes 13

Debt Schemes 7


Equity & Debt 4

Money Market 0

Gilt Fund 2


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Escorts Tax Plan (Growth)

1. Escorts Growth Plan (Growth)


Apr-09 34.8155 - 36.6330 5.2204

May-09 36.6330 - 56.9001 55.3247

Jun-09 56.9001 - 55.5782 -2.3232

Jul-09 55.5782 - 60.7149 9.2423

Aug-09 60.7149 - 60.7149 0.0000

Sep-09 60.7149 - 63.0134 3.7857

Oct-09 63.0134 - 60.7351 -3.6156Nov-09 60.7351 - 64.4480 6.1133

Dec-09 64.4480 - 68.3673 6.0813

Jan-10 68.3673 - 65.7441 -3.8369

Feb-10 65.7441 - 64.8682 -1.3323

Mar-10 64.8682 - 70.1250 8.1038




Standard

Deviation

210.0

252.15

%55.3%897.6

t

t

p

fp

t

S

S

RRS


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2. Escorts Income Plan (Growth)


Apr-09 27.1535 - 28.2081 3.8838

May-09 28.2081 - 27.8613 -1.2294

Jun-09 27.8613 - 28.1730 1.1188

Jul-09 28.1730 - 28.1160 -0.2023

Aug-09 28.1160 - 28.1160 0.0000

Sep-09 28.1160 - 28.3370 0.7860

Oct-09 28.3370 - 28.4620 0.4411

Nov-09 28.4620 - 28.9679 1.7775

Dec-09 28.9679 - 28.9170 -0.1757

Jan-10 28.9170 - 29.0567 0.4831

Feb-10 29.0567 - 29.0088 -0.1649

Mar-10 29.0088 - 29.2065 0.6815




Standard

Deviation

289.2

28.1

%55.36167.0

t

t

p

fp

t

S

S

RRS


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3. Escorts Income Plan (Growth)


Apr-09 25.9839 - 27.2905 5.0285

May-09 27.2905 - 37.1072 35.9711

Jun-09 37.1072 - 38.6629 4.1924

Jul-09 38.6629 - 40.8944 5.7717

Aug-09 40.8944 - 40.8944 0.0000

Sep-09 40.8944 - 42.8570 4.7992

Oct-09 42.8570 - 41.6245 -2.8758

Nov-09 41.6245 - 44.1556 6.0808

Dec-09 44.1556 - 45.8891 3.9259

Jan-10 45.8891 - 44.3687 -3.3132

Feb-10 44.3687 - 42.6067 -3.9713

Mar-10 42.6067 - 45.3606 6.4635



Sharpe Index = Portfolio average

return - Risk free rate of return

155.0

449.10

%55.31727.5

t

t

p

fp

t

S

S

RRS


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Standard Deviation


Particular Average

Return

Sharp Index

Ratio

Rank

Escorts Growth Plan (Growth) 6.8970 % 0.210 I

Escorts Income Plan (Growth) 0.6167 % -2.289 III

Escorts Tax Plan (Growth) 5.1727 % 0.155 II


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ICICI Prudential Mutual Fund

Prudential ICICI Mutual Fund is the largest private sector mutual fund in India with assets of

over Rs.34,119 crore under management as of Aug 2006.

The asset management company, Prudential ICICI Asset Management Company Limited, is a

joint venture between Prudential Plc, Europe's leading insurance company and ICICI Bank,

India's premier financial institution. Prudential Plc holds 55 per cent of the asset management

company and the balance by ICICI Bank.


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Documents

36097230 Mutual Funds Complete Project Report