INTRODUCTION TO THE TOPIC:

A STUDY ON THE PERFORMANCE OF MUTUAL FUND WITH SPECIAL REFERENCE TO DEBT ORIENTED PRODUCTS AT RELIANCE MUTUAL FUND, AHMADABAD Mutual funds are investment companies that pool money from investors at large and offer to sell and buy back its shares on a continuous basis and use the capital thus raised to invest in securities of different companies. The stocks these mutual funds have are very fluid and are used for buying or redeeming and/or selling shares at a net asset value. Mutual funds possess shares of several companies and receive dividends in lieu of them and the earnings are distributed among the share holders. A mutual fund is a company that brings together a group of people and invests their money in stocks, bonds, and other securities. Each investor owns shares, which represent a portion of the holdings of the fund. Mutual funds face risks based on the investments they hold. A bond fund faces interest rate risk and income risk. Bond values are inversely related to interest rates. If interest rates go up, bond values will go down and vice versa. Bond income is also affected by the change in interest rates. Bond yields are directly related to interest rates falling as interest rates fall and rising as interest rise. Income risk is greater for a shortterm bond fund than for a long-term bond fund. Similarly, a sector stock fund is at risk that its price will decline due to developments in its industry. A stock fund that invests across many industries is more sheltered from this risk defined as industry risk. Different mutual fund categories have inherently different risk characteristics.

Statement of the problem: At a time when the markets have become highly volatile, the rapid growth of investment options often leads to confusion. The general economic environment impacts the performance of companies. Therefore, it pays to choose a mutual fund depending on ones own preferences for regularity of income, risk averseness and repayment of capital. Mutual funds are considered as one of the best available investments as compared to others, since they are very cost efficient and also a convenient Investment avenue. All Mutual Funds have some amount of risk, but debt oriented Mutual Funds are less risky

than equity oriented Mutual Funds. Debt funds usually invest in fixed income instruments that may also offer capital appreciation. They serve as a kind of anchor to the winds of adversity. For those who find less volatility more emotionally acceptable or for those who realize their investment needs are more modest than those promised by an all - equity portfolio, debt funds tend to represent an important Investment Alternative in the portfolio asset allocation decision. The study therefore, aims to examine the growth and performance of debt oriented mutual fund.

Objectives of the Study: To study the structure and mechanism of mutual fund. To understand the operations of debt funds. To study the performance of debt funds offered by Mutual fund company with respect to risk and return. To study Investors perception towards Mutual Fund.

RESEARCH DESIGN: METHODOLOGY:

Plan of analysis:

Data collected will be presented in the form of tables, graphs/charts and has been analyzed through statistical tools like standard deviation, Beta () and performance measure tools that is Sharpe, Treynor and Jensen.