Project From Introduction

MUTUAL FUNDS BALANCE FUNDS
INTRODUCTION
Mutual Funds are professionally managed pool of money from a group of investors. A Mutual Fund manager invests your funds in securities including stocks and bonds, Money Market instruments or some combination and decides the best time to buy and sell. By polling your resources with other investors in Mutual Funds, you can diversify even a small investment over a wide spectrum. With the emergence of the capital market at the center stage of the Indian financial system from its marginal role a decade earlier, the Indian capital market also witnessed during the same period a significant institutional development in the form of diversified structure of Mutual Funds. A Mutual fund is a special type of investment institution which acts as an investment conduit. It pools the savings, particularly of the relatively small investors, and invests them in a well-diversified portfolio of sound investment. As an investment intermediary, it offers a variety of services/advantages to the relatively small investors who on their own cannot successfully construct and manage investment portfolio mainly due to the small size of their funds, lack of expertise and experience, and so on. These services include the diversification of portfolio, expertise of the professional management, liquidity of investment, tax shelter, reduced risk and reduced cost. Mutual fund is the most suitable investment mode for the common man as it offers an opportunity to invest in a diversified, professionally managed portfolio at a relatively low cost. Any body 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.
NEED FOR THE STUDY

The basic purpose of the study is to give broad idea on Mutual Funds and analyze various schemes to highlight the diversified investment that Mutual Fund offers to its investors. Through this study one can understand how to invest in Mutual Funds and turn the raw investment into ripen fruits by taking wise decisions, taking the risk factors into account.
SCOPE OF THE STUDY

The Study presents basic concept and trends in the Mutual fund Industry. The Study enables a fresh investor to understand easily the various benefits
offered by Mutual Funds and their working in the Market. The Study provides a clear idea on growth of Mutual Funds from past to the
present scenario and its scope in the future. The Study gives a brief idea on the Open- Ended Balanced Growth Schemes
of five major organizations. At the end of the study, one can conclude what type of investments would be
ideal with reference to the risk taking abilities of the investors and which type of investments would suit their financial needs and goals.
OBJECTIVES OF THE STUDY

The Main objective of this project is to study and analyze Open-Ended Balanced growth schemes of five Mutual Funds and to compare and Rank each of them. To give a broad idea on basics, structure, constituents, characteristics, advantages, disadvantages, types, and risk associated with Mutual Funds. To give investor an idea on Mutual Funds and its working in the market with illustrations. To help and guide investors to take wise investment decisions. To help the investors have an understanding of the Risks associated with Mutual fund investment. The Tax benefits of investing in Mutual Funds under various schemes. To understand the recent trends in the world of Mutual Funds. The project gives a detailed idea which enables even a common man or fresh investor to understand the functioning of Mutual Funds and to take wise investment decisions.
RESEARCH METHODOLOGY
All information related to the topic needs to be carefully scrutinized to avoid the risk of biased analysis. Having once identified which information is relevant and need to be collected, we will have to define how this will be done. The Method employed in the investigation depends on the purpose and scope of the study.
Research Design
Research design is some statement or specification of procedures for collecting and Analyzing the information required for the solution of some specific problem. Here, the exploratory research is used as investigation and is mainly concerned with determining the trends and returns in Mutual Funds and Bank returns.
Data Collection Methods
The key for creating useful system is selectivity in collection of data and linking that selectivity to the analysis and decision issue of the action to be taken. The accuracy of collected data is of great significance for drawing correct and valid conclusions from the research.
Sources of Information
Data available in marketing research are either primary or secondary. Primary Data is not included in this study, only secondary data is taken in to account since, it is a comparative analysis
Primary Data
The key for creating useful system is selectivity in collection of data and linking that selectivity to the analysis and decision issue of the action to be taken. The accuracy of collected data is of great significance for drawing correct and valid conclusions from the research.
Secondary Data
Secondary data can be defined as - data collected by someone else for purpose other than solving the problem being investigated. Secondary data is collected from external sources which include information from published material of SEBI and some of the information is collected online. The data sources also include various books, magazines, newspapers, websites etc. The organization profile is collected from the Hyderabad Stock Exchange.
SCOPE OF THE STUDY

The Study covers the basic meaning, concept, structure and the organization of the Mutual Funds. The Study is restricted to explain only the returns provided by the Mutual Funds from various schemes.
Under this study investments relating to Open-Ended Balanced Growth Fund of Mutual Funds are taken into account.
The theoretical part of the study include the following concepts: Characteristics of Mutual Funds. Advantages/ Disadvantages of Mutual Funds. Net Asset Value (NAV). Investment Process. Risk return grid of Mutual Funds. SEBI guidelines.
The tools used for graphical representation of data include Pie charts, bar diagrams, and other accessories.
The Study is made to equip the investors with the information, which will enable them to choose the type of Scheme depending upon their investing objective and respective Risk return grid.
LIMITATIONS OF THE STUDY

The data that is considered for the Comparative analysis of various Mutual Funds returns of Open-Ended Balanced Growth Fund are only for a short period of one year and performance during this period may not be same in future. Project period is only 45 days , so I have taken two months portfolios into consideration As the project period is limited, the long-term data of Mutual Funds are not taken into consideration in analysis section. Mutual Funds of only five organizations are taken into account for analyzing their performance, because the time duration of the project is short and limited. The performance of these funds since inception is not considered. This study on Mutual Funds is restricted to Open-Ended Balanced Schemes only. The core details are untouched. The data taken into account for analysis is very general. Confidential data is ignored as it is highly sensitive. As a result the information presented in the research report is limited.
REVIEW OF LITERATURE
According to SEBI - Mutual Fund is defined as - A fund established in the form of a trust to raise moneys through the sale of units to the public or a section of the public under one or more schemes for investing in securities, including money market instruments. Mutual Fund is a mechanism for pooling the resources by issuing units to the investors and investing funds in securities in accordance with objectives as disclosed in the offer document. DEFINITION A Mutual Fund is a financial intermediary which acts as an instrument of investment. It collects the funds from different investors to a common pool of investible funds and then invests these funds in a wide variety of investment opportunities in diversified portfolios of securities such as Money Markets instrument, corporate and government bonds and equity shares of joint stock companies. The investment may be diversified to spread risk and to ensure good return to the investors. The Mutual Funds employ professional, experts and investment consultants to conduct investment analysis and then to select the portfolio of securities where the funds are to be invested. Each investor owns units, which represent a portion of the holdings of the fund. You can make money from a MF in three ways 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. 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 the form of dividends. 9
MUTUAL FUNDS BALANCE FUNDS If fund holdings increase in price but are not sold by the fund manager, the funds
shares increase in price. You can then sell your Mutual Fund units for a profit. Funds will also usually give you a choice either to receive a cheque for dividends or to reinvest the same and get more units.
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FIGURE SHOWING THE WORKING OF MUTUAL FUND
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STRUCTURE AND CONSTITUENTS OF FUND
MUTUAL FUND
Sponsor
Trustee
AMC
Custodian
SPONSOR
Establishes the MUTUAL FUND Need to have sound financial track record. Appoints TRUSTEES. Appoints Asset Management Company. Must contribute 40% of the net worth of the AMC. Sometimes this power is given by the sponsor to the trustees through the trust
deed. At least 50% of directors on the board of Asset Management Company should be
independent of the sponsor. Asset Management Company shall not deal with any broker or firm associated
with sponsor beyond 5% of daily gross business of the Mutual Fund. All securities transactions of the Asset Management Company with its associates
should be disclosed.
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TRUSTEE
Manages the Mutual Fund and look after the operation of the appointed AMC. The investments are held by the Trustees, in a fiduciary responsibility. Trustees approve each Mutual Fund Scheme floated by AMC. Furnish report to SEBI on half yearly basis on AMC and Fund Functioning.
ASSET MANAGEMENT COMPANY

AMC acts as investment manager of the trust under the board supervision and
direction of the trustees. AMC floats the different Mutual Fund schemes. Submits report to the Trustees on quarterly basis, mentioning activity and
compliance factor. AMC is responsible to the trustees. AMC fees have a ceiling, decided by SEBI. Should have a net worth of at least Rs.10 crores at all the times.
CUSTODIAN
Appointed by board of trustees for safekeeping of securities. Its an entity independent of sponsors.
SEBI regulates the securities market in India. According to SEBI every Mutual Fund require that at least two thirds of the directors of trustee company or board of trustees must be independent i.e. they should not be associated with the sponsors. Also, 50% of the directors of AMC must be independent. All Mutual Fund are required to be registered with SEBI before they launch any Scheme
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ORGANISATION OF MUTUAL FUND
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CHARACTERISTICS OF MUTUAL FUNDS

A Mutual Fund actually belongs to the investors who have pooled their funds. The
ownership of the Mutual Fund is in the hands of the investors. Mutual funds are trusts or registered associations managed by investment
professionals and other service providers, who earn a fee for their services from the fund. The pools of the funds are invested in a portfolio of marketable investments
(Shares and Securities). The value of the portfolio is updated everyday. Mutual funds collect money from small investors and in return, they will issue a
certificate in units. The investors share in the fund is denoted by UNITS". The value of the units
changes with the change in the portfolios value every day. The profits of investments will be distributed to the unit holders. The unit holders
can sell their units in the open market at Net Asset Value (NAV).
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NET ASSET VALUE (NAV)

Mutual Funds invest the money collected from the investors in securities markets. In simple words, Net Asset Value is the market value of the securities scheme also varies on day to day basis. The NAV per unit is the market value of securities of a scheme divided by the total number of units of the scheme on any particular date. The performance of a particular scheme of a Mutual Fund is denoted by Net Asset Value. For example; if the market value of securities of a MF Scheme is Rs. 200 lakhs and the Mutual Fund has issued 10 lakhs units of Rs. 10 each to the investors, then the NAV per unit of the fund is Rs. 20. NAV is required to be disclosed by the MF on a regular basis daily or weekly depending on the type of scheme.
NAV = Market value of the funds investments + Receivables + Accrued Income Liabilities Accrued Expenses
Number of Outstanding units
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MUTUAL FUNDS BALANCE FUNDS .
SCHEMES OF MUTUAL FUNDS

Mutual fund schemes are usually open-ended (Perpetually open for investors and redemption) or close-ended (with a fixed term). A Mutual Fund scheme issues units that are normally priced at Rs.10/- during the initial offer. The number of units you own against the total number of units issued by a Mutual Fund scheme determines your share in the profits or losses in the scheme.
TYPES OF MUTUAL FUND SCHEMES

The Mutual Funds can be classified under the following types
ACCORDING TO STRUCTURE
STRUCTURE
OPEN-ENDED SCHEME
CLOSED-ENDED SCHEME
INTERVAL SCHEME
OPEN - ENDED SCHEME

An open-ended scheme is a scheme in which an investor can buy and sell units on a daily basis. The scheme has a perpetual existence and flexible, ever changing corpus. OpenEnded schemes do not have a fixed maturity period. The investors are free to buy and sell any number of units, at any point of time, at prices that are linked to the NAV of the units.
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MUTUAL FUNDS BALANCE FUNDS In these schemes the investor can invest and disinvest any amount, any time after a short initial lock in period.
Advantages of Open-ended funds over Close-ended funds

Any time Entry Option. This provides ready liquidity to the investors and avoids reliance on transfer
deeds, signature verifications and bad deliveries. Allows to enter the fund at any time and even to invest at regular intervals. Any time Exit Option.
CLOSE ENDED SCHEME

A Close-ended scheme has a stipulated maturity period. E.g. 5-7 years. A Close-ended scheme is one in which the subscription period for the Mutual Fund remains open only for a specific period, called the redemption period. At the end of this period, the entire corpus is disinvested and the proceeds distributed to unit holders. After final distribution the scheme ceases to exist. Such schemes can be rolled over by approval of unit holders.
Reasons for fluctuations in NAV

Investors doubts about the abilities of the funds management. Lack of sales effort (Brokers earn less commission on closed end schemes than on
open ended schemes). Riskiness of the fund. Lack of marketability of the funds units.
INTERVAL SCHEMES
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MUTUAL FUNDS BALANCE FUNDS Interval schemes are those that combine both the features of both open-ended and closeended schemes. The units may be traded on the stock exchange or may be open for sale redemption during during predetermined intervals at NAV related prices.
ACCORDING TO INVESTMENT OBJECTIVE
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EQUITY SCHEME
DEBT OR BOND SCHEME
BALANCED SCHEME INVESTMENT OBJECTIVE MONEY MARKET SCHEME GROWTH & INCOME FUND
OTHER SCHEMES
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ADVANTAGES OF MUTUAL FUNDS

The key advantages of both open and close-end Mutual Funds is that they put professional managers with experience and access to sophisticated financial research to work for you this, and other wide range of key benefits are as follows
Professional Management
Experienced portfolio managers carefully select a funds holdings according to the funds seated investment objective. The portfolio management team continuously monitors and evaluates the funds holdings to help make sure it keeps pace with changing market conditions. The team decides when to buy and sell securities. There is a fee associated with this professional management.
Diversification
A Single diversified Mutual Fund may invest in dozens even hundreds of different holdings. This approach may reduce the impact on your return if any one investment held by the fund declines. Diversification spreads your assets among different types of
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MUTUAL FUNDS BALANCE FUNDS holdings and may be one of the best ways to protect yourself amid the complexity and uncertainty of the financial markets.
Compounding
In a Mutual Fund, you may choose to reinvest your earnings automatically to buy more shares. When you reinvest, not only do you have the potential to earn money on your initial investment, you may also have the opportunity to earn money on the dividends and capital gains you accumulate. of what you contribute and can help your money grow faster. And the longer you invest, the greater the potential growth.
SYSTEMATIC INVESTING
You can invest in most mutual funds automatically through regular payments directly from your bank account; you can start building a long-term investment program. With systematic investing you invest a fixed amount of money at regular intervals regardless of market conditions, helping out market fluctuations.
Hassle-free operations
With most Mutual Funds, buying and selling shares, changing distribution options, and obtaining information can be accomplished conveniently by telephone, by mail, or online. Although a funds shareholder is relieved of the day-to-day tasks involved in researching, buying and selling securities, an investor will still need to evaluate a Mutual Fund based on investment goals and risk tolerance before making a purchase decision. Investors should always read the prospectus carefully before investing in any Mutual Fund.
Buying Power
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MUTUAL FUNDS BALANCE FUNDS When you invest in a mutual fund, you join the other investors in a pool of investment money. The result is that you have a partial stake in each company the fund holds for a relatively small amount of principal invested, while potentially offsetting some of the risk associated with holding individual securities.
Choice
There is an incredible array of mutual funds more than 10,000 available to meet your specific Investment objective. Funds have different investment objectives and degrees of investment risk often indicated through asset classes and sub-classes, such as money market funds, fixed income funds, balanced funds, growth and income funds, growth funds and aggressive growth funds.
Liquidity
Mutual fund shares are liquid and orders to buy or sell are placed during market hours. However, orders are not executed until the close of business when the NAV (Net Asset Value) of the fund can be determined. Fees or commissions may or may not be applicable. Fees and commissions are determined by the specific fund and the Institution that executes the order.
Transparency
You get regular information on the value of your investments in addition to disclosure on the specific investments made by your scheme, the proportion invested in each class of assets and the fund managers investment strategy and outlook.
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COMPANY PROFILE
Incorporated in 1993, Net worth Stock Broking Limited (NSBL) has been a listed company at Bombay Stock Exchange (BSE), Mumbai since 1995. A Member, at the National Stock Exchange of India (NSE) and Bombay Stock Exchange, Mumbai (BSE) on the Capital Market and Derivatives (Futures & Options) segment, NSBL has been traditionally servicing Institutional clients and in the recent past has forayed into retail broking, establishing branches across the country. Presence is being marked in the Middle East, Europe and the United States too, as part of our attempts to cater to global markets. We are a Depository participant at Central Depository Services India (CDSL) with plans to become one at National Securities Depository (NSDL) by the end of this quarter. We have our customers participating in the booming commodities
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MUTUAL FUNDS BALANCE FUNDS markets with our membership at the Multi Commodity Exchange of India (MCX) and National Commodity & Derivatives Exchange (NCDEX), through Networth Stock.Com Ltd. With its strong support and business units of research, distribution & advisory, NSBL aims to become a one-stop solution to the broking and investment needs of its clients, globally.
Strong team of professionals experienced and qualified pool of human resources drawn from top financial service & broking houses form the backbone of our sizeable infrastructure. Highly technology oriented, the companys scalability of operations and the highest level of service standards has ensured rapid growth in the number of locations & the clients serviced in a very short span of time. Networthians, as each one of our 400 plus and ever growing team members are addressed, is a dedicated team motivated to continuously progress by imbibing the best of global practices, Indian sing Such practices, and to constantly evolve a comprehensive suite of products & Services trying to meet every financial / investment need of the clients. NSE CM and Derivatives Segment SEBI Regn. 1NB230638639 & 1NF230638639 BSE CM and Derivatives Segment SEBI Regn. 1NB010638634 & PMS SEBI Regn. 1NP000001371 CDSL DP SEBI Regn. IN-DP-CDSL 251-2004 Commodities Trading: MCX -10585 and NCDEX - 00011 (through Networth Stock.Com Ltd.)
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MUTUAL FUNDS BALANCE FUNDS Hyderabad (Somajiguda) 401, Dega Towers, 4th Floor, Raj Bhavan Road, Somajiguda Hyderabad - 500 082 Andhra Pradesh. Phone Nos.: 040-55560708, 55562256, and 30994985
Mumbai (MF Division)

49, Au Chambers, 4th Floor, Tamarind Lane, Fort Mumbai - 400 001 Maharashtra. Phone Nos.: 022- 22650253
Mumbai (Registered Office)

5, Church gate House, 2nd Floor, 32/ 34 Veer Narirnan Road, Fort Mumbai - 400 001 Maharashtra. Phone No. 022-22850428
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The Net worth connectivity with 107 branches and growing
r a
c h
e s
Products and services portfolio

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MUTUAL FUNDS BALANCE FUNDS Retail and institutional broking Research for institutional and retail clients Distribution of financial products PMS Corporate finance Net trading Depository services Commodities Broking
Infrastructure
A corporate office and 3 divisional offices in CBD of Mumbai which houses stateof-the-art dealing room, research wing & management and back offices. All of 107 branches and franchisees are fully wired and connected to hub at Corporate office at Mumbai. Add on branches also will be wired and connected to central hub
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MUTUAL FUNDS BALANCE FUNDS Web enabled connectivity and software in place for net trading. 60 operative IDs for dealing room In house technology back up team to ensure un-interrupted connectivity.
1993: Networth Started with 300 Sq.ft. of office space & 10 employees 2006: Spread over 42 cities (around 70,000 Sq.ft of office space) with over 107 branches & employee strength over 400
Market & research Focusing on your needs

investor prefer to make own investment decisions or desire more in-depth assistance, company committed to providing the advice and research to help you succeed. Networth providing Every investor has different needs, different preferences, and different viewpoints. Whether following services to their customers, Daily Morning Notes Market Musing Company Reports Theme Based Reports Weekly Notes IPOs Sector Reports Stock Stance Pre-guarter/Updates
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MUTUAL FUNDS BALANCE FUNDS Bullion Tracker F&O Tracker
QUALITY POLICY
To achieve and retain leadership, Networth shall aim for complete customer satisfaction, by combining its human and technological resources, to provide superior quality financial services. In the process, Networth will strive to exceed Customers expectations. As per the quality policy, Networth will Build in house processes that will ensure transparent and harmonious relationships with its clients and investors to provide high quality of services. Establish a partner relationship with in its investor service agents and vendors that will help in keeping up its commitments to the customers. Provide high quality of work life for all its employees and equip them with adequate knowledge & skill so as to respond to customers needs. Continue to uphold the values of honesty & integrity and strive to establish unparalleled standards in business ethics. Use state-of-the art information technology in developing new and innovative financial products and services to meet the changing needs of investors and clients. 30
MUTUAL FUNDS BALANCE FUNDS Strive to be a reliable source of value-added financial products and services and constantly guide the individuals and institutions in making a judicious choice of it. Strive to keep all stake-holders (share holders, clients, investors, employees, suppliers and regulatory authorities) proud and satisfied.
Key Personnel
Mr. S P Jain CMD Networth Stock Broking Ltd. A qualified Chartered Accountant with over 15 years of experience capital markets. Mr. Deepak Mehta Head PMS Over 12 years of experience in the capital markets and has the prior work experience of serving on the Equity desk of Reliance. Mr.Viral Doshi Equity Strategist A qualified Chartered Accountant with experience of over a decade in technical analysis with respect to equity markets. Mr. Vinesh Jain Asst. Fund Manager A qualified MBA graduate specializing in finance and over two years of experience in the capital markets. Research and the Back office. We have sought to provide premium financial services and information, so that the power of investment is vested with the client. We equip those who invest in the
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MUTUAL FUNDS BALANCE FUNDS with us to make intelligent investment decisions, providing them with the flexibility to either tap into our extensive knowledge and expertise, or make their own decisions. We made our debut into the financial world by servicing Institutional clients, Now, powered by a top-notch research team and a network of experts, we provide an array of financial products & services spanning entire India. Our strong support, technology-driven operations and business units of research, distribution, advisory, wide array of products & services coalesce to provide you with a one-stop solution to cater to all your investment needs. Our single minded objective is to help you grow your Networth.
OUR GROUP COMPANIES

Net worth Stock Broking Ltd. [NSBL]
NSBL is a member of the National Stock Exchange of India Ltd (NSE) and the Bombay Stock Exchange Ltd (BSE) in the Capital Market and Derivatives (Futures & Options) segment. NSBL has also acquired membership of the currency derivatives segment with NSE, BSE & MCX-SX. It is Depository participants with Central Depository Services India (CDSL) and National Securities Depository (India) Limited (NSDL). With a client base of over 1L loyal customers, NSBL is spread across the country though its over 230+ branches. NSBL is listed on the BSE since 1994.
Net worth Wealth Solutions Ltd. [NWSL]

NWSL is into the business of delivery of Financial Planning & Advice. Its vision is to Advice & Execute money related solutions to/for our customers in the most Convenient & Consolidated manner, while making sure that their experience with us is always pleasant & memorable resulting in positive advocacy. The product & Services include
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MUTUAL FUNDS BALANCE FUNDS Financial Planning, Life Insurance, On-line Trading Account, Mutual Funds, Debentures/Bonds, General Insurance, Loans and Depository Services.
NetworthStock.ComLtd.[NSCL]
NSCL is the commodities arm of NSBL. It is a member at the Multi Commodity Exchange of India (MCX) and National Commodity & Derivatives Exchange (NCDEX) and is backed by solid research & analytics in Commodities.
NetworthSoftTechLtd.[NSL]
NSL is an ISO 9001:2000 Certified Company. It is into Application Development & maintenance. Building & Implementation of packaged software across various functions within the Financial Services Industry is at its core. It also provides data center services which include hosting of websites, applications & related services. It combines a unique delivery model infused by a distinct culture of customer satisfaction.
Ravisha Financial Services Pvt. Ltd. [RFSL]

RFSL is a RBI registered NBFC engaged in financing, primarily it provides loan against securities
Principles & Values

At Net worth Stock Broking Ltd. success is built on teamwork, partnership and the diversity of the people. At the heart of our values lie diversity and inclusion. They are a fundamental part of our culture, and constitute a long-term priority in our aim to become the world's best international bank. Values
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Responsive Trustworthy Creative Courageous
Approach
Participation:- Focusing on attractive, growing markets where we can leverage our relationships and expertise
Competitive positioning:- Combining global capability, deep local knowledge and creativity to outperform our competitors
Management Discipline:- Continuously improving the way we work, balancing the pursuit of growth with firm control of costs and risks Commitment to stakeholders
Customers:- Passionate about our customers' success, delighting them with the quality of our service
Our People:- Helping our people to grow, enabling individuals to make a difference and teams to win
Communities:- Trusted and caring, dedicated to making a difference Investors:- A distinctive investment delivering outstanding performance and superior returns
Regulators: - Exemplary governance and ethics wherever we are.
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MARKET PROFILE
NATIONAL STOCK EXCHANGE

The National Stock Exchange of India (NSE) situated in Mumbai - is the largest and most advanced exchange with 1016 companies listed and 726 trading members. Capital market reforms in India and the launch of the Securities and Exchange Board of India (SEBI) accelerated the incorporation of the second Indian stock exchange called the National Stock Exchange (NSE) in 1992. After a few years of operations, the NSE has become the largest stock exchange in India. Three segments of the NSE trading platform were established one after another. The Wholesale Debt Market (WDM) commenced operations in June 1994 and the Capital Market (CM) segment was opened at the end of 1994. Finally, the Futures and Options segment began operating in 2000. Today the NSE takes the 14th position in the top 40 futures exchanges in the world.
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MUTUAL FUNDS BALANCE FUNDS In 1996, the National Stock Exchange of India launched S&P CNX Nifty and CNX Junior Indices that make up 100 most liquid stocks in India. CNX Nifty is a diversified index of 50 stocks from 25 different economy sectors. The Indices are owned and managed by India Index Services and Products Ltd (IISL) that has a consulting and licensing agreement with Standard & Poor's.
In 1998, the National Stock Exchange of India launched its web-site and was the first exchange in India that started trading stock on the Internet in 2000. The NSE has also proved its leadership in the Indian financial market by gaining many awards such as 'Best IT Usage Award' by Computer Society in India (in 1996 and 1997) and CHIP Web Award by CHIP magazine (1999). The NSE is owned by the group of leading financial institutions such as Indian Bank or Life Insurance Corporation of India. However, in the totally de-metalized Exchange, the ownership as well as the management does not have a right to trade on the Exchange. Only qualified traders can be involved in the securities trading. The NSE is one of the few exchanges in the world trading all types of securities on a single platform, which is divided into three segments: Wholesale Debt Market (WDM), Capital Market (CM), and Futures & Options (F&O) Market. Each segment has experienced a significant growth throughout a few years of their launch. While the WDM segment has accumulated the annual growth of over 36% since its opening in 1994, the CM segment has increased by even 61% during the same period. The National Stock Exchange of India has stringent requirements and criteria for the companies listed on the Exchange. Minimum capital requirements, project appraisal, and 36
MUTUAL FUNDS BALANCE FUNDS company's track record are just a few of the criteria. In addition, listed companies pay variable listing fees based on their corporate capital size.
NSE Nifty
The S&P CNX Nifty (nicknamed Nifty 50 or simply Nifty), is the leading index for large companies on the National Stock Exchange of India. S&P CNX Nifty is a well diversified 50 stock index accounting for 22 sectors of the economy. It is used for a variety of purposes such as benchmarking fund portfolios, index based derivatives and index funds. Nifty was developed by the economists Ajay Shah and Susan Thomas, then at IGIDR. Later on, it came to be owned and managed by India Index Services and Products Ltd. (IISL), which is a joint venture between NSE and CRISIL. IISL is India's first specialized company focused upon the index as a core product. IISL have a consulting and licensing agreement with Standard & Poor's (S&P), who are world leaders in index services. CNX stands for CRISIL NSE Indices. CNX ensures common branding of indices, to reflect the identities of both the promoters, i.e. NSE and CRISIL. Thus, 'C' stands for CRISIL, 'N' stands for NSE and X stands for Exchange or Index. The S&P prefix belongs to the US-based Standard & Poor's Financial Information Services.
NSE other indices
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MUTUAL FUNDS BALANCE FUNDS S&P CNX Nifty CNX Nifty Junior CNX 100 S&P CNX 500 CNX Midcap S&P CNX Defty & CNX Midcap 200
BOMBAY STOCK EXCHANGE
The Bombay Stock Exchange Limited (formerly, The Stock Exchange, Mumbai; popularly called The Bombay Stock Exchange, or BSE) is the oldest stock exchange in Asia. It is located at Dalal Street, Mumbai, India. Bombay Stock Exchange was established in 1875. There are around 5,600 Indian companies listed with the stock exchange, and has a significant trading volume. As of October2006, the market capitalization of the BSE was about Rs. 33.4 trillion (US $ 730 billion). The BSE SENSEX (SENSitive indEX), also called the BSE 30, is a widely used market index in India and Asia. As of 2005, it is among the 5 biggest stock exchanges in the world in terms of transactions volume.
History
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MUTUAL FUNDS BALANCE FUNDS An informal group of 22 stockbrokers began trading under a banyan tree opposite the Town Hall of Bombay from the mid-1850s, 1875, was formally organized as the Bombay Stock Exchange (BSE).In January 1899, the stock exchange moved into the Brokers Hall after it was inaugurated by James M MacLean. After the First World War, the BSE was shifted to an old building near the Town Hall. In 1956, the Government of India recognized the Bombay Stock Exchange as the first stock exchange in the country under the Securities Contracts (Regulation) Act.1995, when it was replaced by an electronic (eTrading) system named BOLT, or the BSE Online Trading system. In 2005, the status of the exchange changed from an Association of Persons (AoP) to a full fledged corporation under the BSE (Corporatization and Demutualization) Scheme, 2005 (and its name was changed to The Bombay Stock Exchange Limited).
BSE Sensex
The BSE SENSEX (also known as the BSE 30) is a value-weighted index composed of 30 scrips, with the base April 1979 = 100. The set of companies which make up the index has been changed only a few times in the last 20 years. These companies account for around one-fifth of the market capitalization of the BSE. SENSEX, first compiled in 1986 was calculated on a "Market Capitalization-Weighted" methodology of 30 component stocks representing a sample of large, well-established and financially sound companies. The base year of SENSEX is 1978-79. The index is widely reported in both domestic and international markets through print as well as electronic media. SENSEX is not only scientifically designed but also based on globally accepted construction and review methodology. From September 2003, the SENSEX is calculated on a free-float market capitalization methodology. The "free-float Market Capitalization-
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MUTUAL FUNDS BALANCE FUNDS Weighted" methodology is a widely followed index construction methodology on which majority of global equity benchmarks are based. The growth of equity markets in India has been phenomenal in the decade gone by. Right from early nineties the stock market witnessed heightened activity in terms of various bull and bear runs. More recently, the bourses in India witnessed a similar frenzy in the 'TMT' sectors. The SENSEX captured all these happenings in the most judicial manner. One can identify the booms and bust of the Indian equity market through SENSEX. .
SENSEX
calculation
SENSEX is calculated using a "Market Capitalization-Weighted" methodology. As per this methodology, the level of index at any point of time reflects the total market value of 30 component stocks relative to a base period. (The market capitalization of a company is determined by multiplying the price of its stock by the number of shares issued by the company). An index of a set of combined variables (such as price and number of shares) is commonly referred as a 'Composite Index' by statisticians. A single indexed number is used to represent the results of this calculation in order to make the value easier to work with and track over time. It is much easier to graph a chart based on indexed values than one based on actual values.
The base period of SENSEX is 1978-79. The actual total market value of the stocks in the Index during the base period has been set equal to an indexed value of 100. This is often indicated by the notation 1978-79=100. The formula used to calculate the Index is fairly straightforward. However, the calculation of the adjustments to the Index (commonly called Index maintenance) is more complex.
The calculation of SENSEX involves dividing the total market capitalization of 30 40
MUTUAL FUNDS BALANCE FUNDS companies in the Index by a number called the Index Divisor. The Divisor is the only link to the original base period value of the SENSEX. It keeps the Index comparable over time and is the adjustment point for all Index maintenance adjustments. During market hours, prices of the index scrips, at which latest trades are executed, are used by the trading system to calculate SENSEX every 15 seconds and disseminated in real time. During market hours, prices of the index scrips, at which trades are executed, are automatically used by the trading computer to calculate the SENSEX every 15 seconds and continuously updated on all trading workstations connected to the BSE trading computer in real time.
BSE - other Indices

Apart from BSE SENSEX, which is the most popular stock index in India, BSE uses other stock indices as well: BSE 500 BSE PSU BSE MIDCAP BSE SMLCAP BSE BANKEX
The most important trend in the Mutual Fund industry is the aggressive expansion of the foreign owned Mutual Fund companies and the decline of the companies floated by nationalized banks and smaller private sector players.
41
MUTUAL FUNDS BALANCE FUNDS Funds issue and redeem shares on demand at the fund's net asset value (NAV). Mutual fund management fees typically range between 0.5% and 2% of assets per year, exchange fees and other administrative charges also apply.
GROWTH AND HISTORY OF MUTUAL FUNDS

The First investment trust (now called Mutual Fund) began in the Netherlands in the early 1800s. The first in the U.S. was the New York Stock Trust, which started in 1889. Since Boston was the economic center of the nation until the turn of the century, the majority of funds started thereFidelity, Pioneer and Putnum Fund, to name a few. A Fund that was comprised of both stocks and bonds (the Wellington Fund) started in 1928 and is still part of Vanguard. As the 20's crashed to a close, there were 10 Mutual Funds in the nation. Foundation for the Mutual Fund in India was laid by the parliament in 1963. With the enactment of Unit Trust of India (UTI) Act the then Finance Minister Mr. T.T. Krishnamacharya who initiated the act made it clear to the parliament act UTI would provide an opportunity for the middle and lower income groups to acquire property in the form of share. Thus UTI came out with the mission of catering to the needs of individuals investors whose means are small, with its maiden fund, an open ended fund in 1964. 42
The Indian Mutual Fund Industry can be studied in four phases FIRST PHASE BETWEEN 1964 1987
The genesis of the Mutual Fund industry in India can be traced back to 1964 with the setting up of the Unit Trust of India (UTI) by the Government of India. Since then UTI has grown to be a dominant player in the industry. UTI is governed by a special legislation, the Unit Trust of India Act, 1963. It was setup by the Reserve Bank of India and functioned under the regulatory and administrative control of RBI. In 1978, UTI was de-linked from the RBI and the administrative control in place of RBI.
SECOND PHASE 1987-1993 (Entry of Public Sector Funds)

Till 1986, UTI was the only mutual player in India. The industry was opened up for wider participation in 1987 when public sector banks and insurance companies were permitted to setup Mutual Funds. Since then, many public sector banks have setup Mutual Funds. SBI Mutual Fund was the first non-UTI Mutual Funds established in June 1987 followed by can bank Mutual Funds, Punjab National Bank Mutual Fund, India bank Mutual Funds, Bank of India, Bank of Boroda Mutual Funds. Also the two Insurance companies LIC (June 1987) and GIC (December 1990) have established Mutual Funds. At the end of 1993, the Mutual Fund industry had assets under management of Rs. 47004 crores. This phase changed the mind set of the investors.
THIRD PHASE 1993-2003

With the entry of private sector funds in 1993, a new era started in the Indian Mutual Fund Industry, giving the Indian investors a wider choice of fund families. Also, 1993 43
MUTUAL FUNDS BALANCE FUNDS was the year in which the first Mutual Funds regulations came into being, under which all Mutual Funds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first sector Mutual Fund registered in July 1993. Securities Exchange Board of India (SEBI) formulated the Mutual Fund (Regulation) 1993, which for the first time established a comprehensive regulatory framework for the Mutual Fund Industry. Since then several Mutual Funds have been setup by the private and joint sectors.
FOURTH PHASE - Since February 2003

In February 2003, following the repeal of the Unit Trust of India act 1963, UTI was bifurcated into separate entities. One is the specified undertaking of the UTI with asset under management of Rs. 29835 crores as at the end of January 2003, representing broadly, the assets of US 64 schemes, assured return and certain other schemes. The second is UTI Mutual Fund ltd, sponsored by SBI, PNB, BOB and LIC. It is registered in SEBI and functions under the Mutual Fund regulations. With the bifurcation of the erstwhile UTI which had in March 2000 more than Rs. 76000 crores of assets under management and with the setting up of the UTI Mutual Fund. At the end of October 31, 2006 there were 39 funds which manage assets of Rs. 176726 crores under 426 schemes.
PRESENT SCENARIO
44
MUTUAL FUNDS BALANCE FUNDS The decade of 80s witnessed the emergence of stock markets as major source of finance for trade and industry. The process of liberalization and deregulation had led to a pace of growth almost unparallel in the history of any nation. Average annual capital mobilization from the marked, which used to be about Rs.70 crores in the 60s and Rs.90 crores in the 70s increased manifold during the 8-s with the amount raised in 1989-90 being of the order of Rs.647.3 crores. The number of listed companies rose from 2265 in 1980 to over 8600 at the end of 2006; the daily turnover accordingly shot up from Rs.25 crores in 1979-80 to about Rs.585 crores in 2007-2008.
Distribution of Worldwide Mutual Fund Assets by Region, 2012
(Percentage of Total Assets)
At present, there are 20 stock exchanges recognized under the Securities Contracts (Regulation) Act, 1956. These recognized stock exchanges mobilize and direct the flow of savings of the general public into productive channels of investment.) . According the
45
MUTUAL FUNDS BALANCE FUNDS latest statistics the market capitalization (assets) of Mutual Funds in India is amounting to Rs. 3, 00,000 Crores.
ASSOCIATION OF MUTUAL FUNDS OF INDIA

With the increase in Mutual Fund players in India, a need for mutual fund association in India was generated to function as a non-profit organization. Association of Mutual Funds in India (AMFI) was incorporated on 22nd August 1995. AMFI is an APEX body of all Asset Management Companies (AMC), which has been registered with SEBI. Till date all the AMCs are that have launched mutual fund schemes are its members. It functions under the supervision and guidelines of its Board of Directors. Association of Mutual Funds of India has brought down the Indian Mutual Fund Industry to a professional and healthy market with ethical lines enhancing and maintaining standards. It follows the principle of both protecting and promoting the interests of mutual funds as well as their unit holders. 46
Objectives
The AMFI works with 30 registered AMCs of the country. It has certain defined objectives, which juxtaposes the guidelines of its Board of Directors. The objectives are as follows This mutual fund association of India maintains high professional and ethical
standards in all areas of operation of the industry. It also recommends and promotes the top class business practices and code of
conduct which is followed by members and related people engaged in the activities of MF and asset management. The agencies who are by any means connected or involved in the field of capital markets and financial services also involved in this code of conduct of the association.
47
MUTUAL FUNDS BALANCE FUNDS AMFI interacts with SEBI and works according to SEBIs guidelines in the
mutual fund industry. AMFI do represent the Government of India, the Reserve Bank of India and other
related bodies on matters relating to the Mutual Fund Industry. It develops a term of well-qualified and trained Agent distributors. It implements a
programmed of training and certification for all intermediaries and other engaged in the mutual fund industry. AMFI undertakes all India awareness programmed for investors in order to
promote proper understanding of the concept and working of mutual funds. At last but not the least association of mutual fund of India also disseminate
information on Mutual funds Industry and undertakes studies and research either directly or in association with other bodies
BEFORE INVESTING IN MUTUAL FUNDS

profile. Select the scheme which is giving income according to your requirements. First choose a scheme (equity/debt/balanced) according to your returns/risk
(Short term returns like income fund, long term returns like growth fund). Select the fund which gives maximum returns and high security and liquidity
and low risk. Then compare similar schemed offered by various MFs and their track record.
Examine the track record of the mutual fund and its sponsors. Study the track record of the fund manager. Examine the investment strategy of the scheme. 48
MUTUAL FUNDS BALANCE FUNDS Check the load (entry/exit). Check out on special facilities like switching options, account statements,
sale/repurchases policy etc. Do not buy in to new schemes that are deceptively being offered at par.
RIGHTS AND OBLIGATIONS OF INVESTORS

Right to proportionate beneficial ownership. Right to timely service. Right to information. Right to approve changes in fundamental attributes. Rights to wind up a scheme. Right to terminate the AMC.
LEGAL LIMITATIONS TO INVESTORS RIGHTS Investors cannot sue the trust. Investors can initiate legal proceedings against the trustees. Sponsors of mutual funds have no obligations to meet the shortfall in
non-assured schemes. Only if the OD has specifically provided such guarantee by a named
sponsor, the investors have the right to sue the sponsor. Prospective investors cannot sue the trust/the AMC or any other
constituent. Companies act cannot protect investors as fund investors are neither share holders in the AMC nor depositors.
49
ORIGIN:
Rapid growth in industries in the erstwhile Hyderabad State saw efforts at starting the Stock Exchange. In 1942, Mr. Gulag Mohammad, the Finance Minister formed a committee for the purpose of constituting Rules and Regulations of the Stock Exchange. Sri Purushothamas Thakurdas, present and Founder Member of the Hyderabad Stock Exchange performed and the opening ceremony of the Exchange on 14-11-1943 under the Hyderabad Securities Contract Act Mr. Kamal Yar Jung Bahadur was the first President of the Exchange. The HSE started functioning under Hyderabad Securities Contract Act of No.21 of 1352 under H.E.H Nizams Government as a Company Limited by guarantee. It was the 6th Stock Exchange recognized under Securities Contract Act, after the premier Stock Exchange, Ahmedabad, Bombay, Calcutta, Madras and Bangalore Stock Exchange. All the deliveries were completed every Monday or the next working day.
The Securities Contract Act, 1956 was enacted by the Parliament passed into Law and Rules were also framed in 1957. The Act and Rules were brought into force from 20th February 1957 by the Government of India. The HSE was first recognized by the Government of India on 29th September 1958 as Securities Regulation Act was made applicable to twin cities as Hyderabad and Secunderabad from that date. In View of Substantial growth in trading activities, and for the Yeoman services rendered by the Exchange was bestowed a permanent recognition with effect from 29th September 1983.
OBJECTIVES
50
MUTUAL FUNDS BALANCE FUNDS The Exchange was established on 18th October, 1943 with the main objective to create, protect and develop a healthy Capital Market in the State of Andhra Pradesh to effectively serve the Public and the investors interests. The property, Capital and Income of the Exchange, as per the Memorandum and Articles of Association of the Exchange, shall have to be applied solely towards the promotion of the objects of the Exchange. Even in case of dissolution, the surplus funds shall have to be devoted to any activity having the same objects, as Exchange or be distributed in Charity, as may be determined by the Exchanged or the High Court of Judicature. Thus, in short it is a Charitable Institution. The Hyderabad Stock Exchange Limited is now on its stride of completing its 57th year in the history of Capital Markets serving the cause of saving and investments. The Exchange has made its beginning in 1943 and today occupies a prominent place among the Regional Stock Exchange in India. It thus, promotes the mobilization of the funds to the Industry and develops the industrialization in the state of Andhra Pradesh.
GROWTH The HSE Ltd was established in the year 1943 as a non-profit making organization catering to the needs of investing population in a small way in a rented building in Koti area. In September 1989, then Vice-President of India Honorable Dr. Shanker Dayal Sharma had inaugurated the own building of the Stock Exchange at Himayat nagar, Hyderabad. Considerably, there has been a tremendous perception growth that could be observed from statistics. The number of members of the Exchange was 55 in 1943, 117 in 1193, and 295 in 1995 and increased to 413 in 2006. The business turnover stood more than Rs.1200 crores in
51
MUTUAL FUNDS BALANCE FUNDS 2006. The Exchange has got a very weekly settlement system earlier and now a daily Rolling settlement
GOVERNING BOARD
At present, the Governing Board consists of the following: Members of the Exchange Sri Hari Narayan Rathi Sri Rajendra V Naniwadekari Sri Raj Kishore Harkut Sri Ram Swaroop Agarwal Sri Dattatraya
SEBI Nominee Directors

Shri R.P Singh IAS Joint Secretary of Department of Defence Production and Supplies, Ministry of Defence, New Delhi. Shri N.S Ponnunambi Register of Companies, Hyderabad.
Public Nominee Directors

Shri D. Seetharamaiah Dr. Braj Kishore Shri S. Dasaratharama Reddy Dr. B. Brahmaiah Shri M. Subramanyam - Practicing CA - Professor (Retd.) - Retired Judge - Professor - Executive Director
COMPUTERISATION
52
MUTUAL FUNDS BALANCE FUNDS The Stock Exchange business operations are equipped with modern communications systems. Online computerization for simultaneously carrying out the trading transactions, monitoring functions have been introduced at this Exchange since 1988 and the settlement and the Delivery System has become simple and easy to the Exchange members. The HSE in-line Securities Trading system was built around the most sophistication state of the Art Computers, Communication System, the proven VECTOR Software from CMC and was one of the most powerful SBT Systems in the Country, operating in a WAN environment, connected through 9.6 KBPS 2 wire leased lines from the offices of the Members to the office of the Stock Exchange at Somajiguda, where the Central System CHALLENGE-L DESK SIDE SERVER made of silicon graphics (SGI Model No. 95602-S2) was located and connected to all the members who were provided with COMPAQ DESKPRO 2000/DESKTOP 5120 computers connected through
MOTOROLA 3265 V 34 MANAGEABLE STAND ALONE MODEMS (28.8KBPS) for carrying out business from computer terminal located in the offices of the Members. HSE is the only Exchange in the country which has provided infrastructure to its members for its members for trading through WAN and leased lines from the day one. The HOST system exchange not only to expand its operations later to other Prime Trading Centers outside the twin cities of Hyderabad and Secunderabad but also to link itself into the inter-connected market system (ECMS) proposed by the federation of Indian Stock Exchange (FISE) to inter-connect various Regional Stock Exchanges in various States. In the age of electronic Trading on-line information on rates from other major markets was an essential input for efficiency. HSE provided on-line rates from BSE and NSE
53
MUTUAL FUNDS BALANCE FUNDS which not only enhanced the ability of HOST terminals to attract the investors but also enable the members to avail arbitraging opportunities between Exchanges.
Clearing Houses
The Exchange set-up a Clearing House to collect the Securities from all the Members and distribute to each member, all the securities due in respect of every settlement. The whole of the operations of the Clearing House were also computerized. Inter-Connected Market System (ICMS) The HSE was the convener of a committee constituted by the Federation of Indian Stock Exchanges for implementing an Inter-connected by Market System (ICMS) in which the Screen Based Training System of Various Stock Exchanges was inter-connected to create a large National Market. SEBI welcomed the creation of ICMS. The HOST provided the networks for HSE to hook itself into the ISE. The ISE provided the members of HSE and their investors, access to a large National network of Stock Exchange. The inter-connected Stock Exchanges is a National Exchange and all HSE members could have Trading terminals with access to the National market without any fee, which was a boon to the members of an exchange to have the Trading rights on a National Stock Exchange (NSE), without any fee or expenditure.
Stock Brokers Insurance Policy

HSE had taken a comprehensive Stock Brokers Insurance Policy covering the members to an extent of Rs.10 lakhs each and also insured the Clearing house. HSE was one of the few to have such comprehensive Insurance policy coverage.
On-Line Surveillance
54
MUTUAL FUNDS BALANCE FUNDS HSE pays special attention to Market Surveillance and monitoring exposures of the members, particularly the mark to market losses. By taking prompt steps to collect the margins to mark the market losses, the risk of default by members is avoided in any settlement. It is heartening that there have been no defaults by members since the introduction of Screen Based Trading. The Exchange restricted the effective Trading volumes and linked to the Capital deposited with the Exchange, to obviate defaults and losses and contain speculation. BASE MINIMUM CAPITAL Rs. 4.00 lakhs ADDITIONAL CAPITAL Upto Rs. 6.00 lakhs Rs.60.00 lakhs Rs.120.00 lakhs GROSS EXPOSURE LIMIT Rs.40.00 lakhs INTRA-DAY TRADING LIMIT Rs.132.00 lakhs
FURTHER ADDITIONAL CAPITAL: Upto Rs. 8.00 lakhs Rs. 48.00 lakhs Rs. 96.00 lakhs
Settlement Guarantee Fund

The Exchange has introduced Trade Guarantee fund on 25.01.2000. This will insulate the trading member from the counter-party risks while trading with another member. The trading member and his investors will be assured of the timely completion of the pay-out of funds and securities not with standing the default, if any, of any trading member of the Exchange. The short falls, if any, arising from the default of any member will be met out of the settlement guarantee fund. Several pay-ins worth of crores of rupees in all the settlement have been successfully completed after the introduction of the Settlement Guarantee fund, without utilizing any amount from the Settlement Guarantee Fund.
CURRENT PLANS
55
Depository Participant
The Exchange had also become a Depository Participant with National Securities Depository Limited (NSDL) and Central Depository Services Limited (DCSL). The depository functions can be undertaken by the Exchange by opening the accounts of investors, members of the Exchange etc. Floating of a Subsidiary Company For The Membership of Major Stock Exchange Of The Country The Exchange has already floated a Subsidiary Company in the name and style of HSE Securities Limited for obtaining the Membership of NSE and BSE. The process of acquiring the Membership of NSE has already been completed and SEBI was kind enough to grant its registration to HSE Securities Limited. Facility To Trade At NSE, Derivatives Trading, Net Trading Etc The Exchange Incorporated a Subsidiary HSE Securities Limited with a paid up capital of Rs.4.00 crores to NSE Membership, so that the members of the Exchanges had access to the NSEs Trading Screen as Sub-brokers, Derivatives Trading and Bet Trading etc. The Members of this Exchange had equal opportunity of participating in such trading like any other NSDE member. The Subsidiary of the exchange commenced trading with HSE members sub-brokers on NSE segment. During the year, the Exchange also acquired the membership if BSE and Trading will commence soon.
Commodity Exchange
The Exchange by seeking the support of the State Government is planning to set up online commodities Exchange to trade in certain Commodities since our State is one of the major Agriculture Economies. The Online Commodity Trading with WAN
56
MUTUAL FUNDS BALANCE FUNDS connectivity will minimize the middle men operation and provide price support to the producers.
DATA ANALYSIS & INTERPRETATION

FUND: TATA OPEN-ENDED BALANCED GROWTH FUND
57
MUTUAL FUNDS BALANCE FUNDS OBJECTIVE: Aims to invest in equity and debt oriented securities so as to give investor balanced returns. PORTFOLIO OF THE FUND
Sector Nov 2012 A B C D E F G H I J Energy Finance Technology Automobile Health care Engineering Diversified FMCG Metals Services 9.87 12.44 7.55 6.91 5.54 4.85 2.72 2.65 2.06 1.94 Dec 2012 11.31 10.56 8.26 7.25 7.05 6.84 5.84 4.65 4.01 3.43
Table No: 4.1
Note: Reasons for taking two months portfolio details in above mentioned fund are If you observe two months portfolio November and December, you can see some differences in values. Reason is Fund Manager will churn portfolio every month. So asset allocation changes every month. But investors units will be same. Portfolio of equity is 66.38%, but the above portfolio shows less than 66.38% reason, is here I have taken only 10 sectors for every fund. This will not get any affect for the analysis.
58
Sector wise chart

Portfolio allocation chart
59
Figure No:4.1(a)
60
CHART SHOWING ASSET ALLOCATION OF TATA BALANCED FUND

0 9.91 14.98
EQUITY DEBT OTHERS 75.11
Figure No: 4.1(b)
INTERPRETATION
The TATA Balanced Fund Portfolio consists of 75.11% Equity holdings, 14.98% Debt, 9.91% Money Market. It is evident from the data that though the investors have risk taking ability, they balanced their investments by investing in Debt also. The advantage of balanced fund based on market conditions, portfolio allocations can decrease to 50% also. It is evident that fund manager is bullish side on market.
61
MUTUAL FUNDS BALANCE FUNDS FUND : BIRLA OPEN-ENDED BALANCED GROWTH FUND The Scheme aims to balance income requirements with growth of Capital through balanced mix of investment in equity and debt. PORTFOLIO OF THE FUND
OBJECTIVE:
NOV Sector 2012 DEC 2012
A B
Finance Energy Health care
14.39 11.55 6.18 5.28 4.56 4.54 4.22 3.86 3.03 1.31
11.41 7.15 6.97 6.92 6.34 6.10 4.28 3.51 1.80 1.67
D E F G H I J
Technology Engineering Diversified Metals Automobiles FMCG Chemicals
Table No:4.2
62
Figure No: 4.2(a)
63
MUTUAL FUNDS BALANCE FUNDS Figure No:4.2(b)
INTERPRETATION
The BIRLA Balanced Fund Portfolio consists of 30.07% Equity holdings, 24.02% Debt, 45.91% Money Market. It is evident from the data that though the Investors have risk taking ability, they balanced their investments by investing in Debt also. Here fund manager, behaving portfolio very conservatively, so equity proportion selected less when compare to remaining four funds.
64
MUTUAL FUNDS BALANCE FUNDS FUND : Pru ICICI OPEN-ENDED BALANCED GROWTH FUND Aims to invest in equity and debt oriented securities so as to give Investor balanced returns. PORTFOLIO OF THE FUND
OBJECTIVE :
Sector Financial Technology Automobile Energy Health care Engineering Fmcg Diversified Services Communication Metals
NOV 12 14.85 12.46 8.25 5.76 7.25 5.54 4.31 3.5 3.29 3.9 2.23
DEC 12 16.37 10.47 7.85 6.92 6.43 5.23 4.04 3.85 3.59 3.00 2.85
A B C D E F G H I J K
65
Table No: 4.3
66
Figure No: 4.3(a)
67
CHART SHOWING ASSET ALLOCATION OF PRU ICICI BALANCED FUND

0 10.65
18.75
EQUITY DEBT OTHERS
70.6
Figure No: 4.3(b)
INTERPRETATION
The Pru ICICI Balanced Fund Portfolio consists of 70.6% Equity holdings, 18.75% Debt and 10.6% others. It is evident from the data that though the fund manager is taking high risk even in balanced fund for this particular period. And at the same time have gave priority to debt and other safety investment products.
68
FUND
DSP BLACK ROCK OPEN-ENDED BALANCED GROWTH FUND
OBJECTIVE: Seeks to generate long term capital appreciation and current income
from a portfolio constituted of equity and equity related securities as well as fixed income securities.
PORTFOLIO OF THE FUND

Sector A B C D E F G H I J K Financial Energy Technology Engineering Health care FMCG Services Automobiles Chemicals Construction Diversified NOV 2012 14.49 11.72 8.43 5.87 3.85 2.92 2.83 2.57 2.51 1.84 2.27 Table No: 4.4 DEC 2012 11.34 10.64 8.63 8.48 6.61 5.48 4.54 3.42 3.17 2.58 2.53
69
Figure No: 4.4(a)
70
CHART SHOWING ASSET ALLOCATION OF DSP BLAKROCK BALANCED FUND

3.99 0
23.29
EQUITY DEBT OTHER S
72.72
Figure No: 4.4(b)
INTERPRETATION
The DSP Black Rock Balanced Fund Portfolio consists of 72.72% Equity holdings, 23.29% Debt, 3.39% Money Market. It is evident from the data that though the Investors have risk taking ability more here also, their investment is not getting balanced properly, so risk element is there.
FUND: JM FINANCIAL OPEN-ENDED BALANCED GROWTFUND

71
OBJECTIVE: Aims to provide investors with liquidity and current income along with
capital appreciation. PORTFOLIO OF THE FUND Sector Nov 2012 Dec 2012
A B
Energy Automobile
12.45 7.75
14.79 9.85
Diversified
5.65
7.66
D E
Metals Financials
7.34 10.65
7.37 5.99
F G
Engineering Technology
5.07 4.71
5.52 5.40
H I J
FMCG HEALTH CARE Construction
2.60 3.15 2.67
4.94 3.20 3.12
Table No: 4.5
72
Figure No:4.5(a)
73
CHART SHOWING ASSET ALLOCATION OF JM BALANCED FUND

0 5.16
24.58
EQUITY DEBT OTHERS
70.27
Figure No:4.5(b)
INTERPRETATION
The JM Balanced Fund Portfolio consists of 70.27% Equity holdings, 24.58% Debt, 5.16% Money Market. It is evident from the data that though the Investors have risk taking ability, they balanced their investments by investing in Debt also. When compare to last year portfolio, fund manager has taken less exposure towards equity, so it clearly understands that fund manager is aggressive on equity markets.
74
TATA OPEN-ENDED BALANCED GROWTH FUND

1st APR DATE 2012 44.0946 1ST JUNE 2012 NAV 60.4396
1st AUG 2012 63.8779
1st OCT 2012 68.8779
1ST DEC 2012 73.853
1st FEB 2013 72.95
31st MAR 2013 76.0252
Table No: 4.6 Fund performance and NAV values over a period of 1 year.
Figure No: 4.6
BIRLA OPEN-ENDED BALANCED GROWTH FUND
75
Table No: 4.7 Fund performance and NAV values over a period of 1 year. 1st APR DATE 2012 1ST JUNE 2012 NAV 161.2176 230.133 1ST DEC 2012 265.98
1st AUG 2012
1st OCT 2012
1st FEB 2013
31st MAR 2013
238.42
258.07
264.03
277.09
76
Figure No: 4.7
Prudential ICICI OPEN-ENDED BALANCED GROWTH FUND
Figure No: 4.8
77
MUTUAL FUNDS BALANCE FUNDS Fund performance and NAV values over a period of 1 year.
1st APR DATE 2012 36.139
1ST JUNE 2012
1st AUG 2012 51.262
1st OCT 2012 55.79
1ST DEC 2012 58.042
1 ST FEB 2013 57.988
31st MAR 2013 59.945
NAV
48.675
78
Figure No: 4.8
DSP MERRILL LYNCH OPEN-ENDED BALANCED GROWTH FUND
79
Table No: 4.9
Fund performance and NAV values over a period of 1 year. 1st APR DATE 2012 42.139 1ST JUNE 2012 NAV 45.720 1ST DEC 2012 56.455
1st AUG 2012 50.571
1st OCT 2012 55.77
1 ST FEB 2013 58.584
31st MAR 2013 60.352
Figure No: 4.9
PERFORMANCE EVALUATION
80
MUTUAL FUNDS BALANCE FUNDS We are interested in discovering if the management of a mutual fund is performing well; that is, has management done better through its selective buying and selling of securities than would have been achieved through merely buying the market picking a large number of securities randomly and holding them throughout the period? One of the most popular ways of measuring managements performance is by comparing the yields for the managed portfolio with the market or with a random portfolio. The following formula can be used to evaluate Mutual fund performance:-
NAVt + Dt 1 NAVt 1
Where: NAV t = Dt= NAV t-1 = per-share net asset value at the end of year t Capital appreciation during two years. per-share net asset value at the end of the previous year.
PERFORMANCE EVALUATION OF SELECTED FUNDS

81
NAV t-1 = 1st October 2011 NAV t= 30th September 2012
TATA Open-Ended Balanced growth Fund

NAV t-1 51.6559 NAV t 86.7045 D t (NAV t 35.0486 NAV t-1)
Applying the formula we get = 35.0486 51.6559 = = 0.6785 x 100 67.85 %
BIRLA Open-Ended Balanced growth Fund NAV t-1 177.8434 Applying the formula we get= 145.4866 177.8434 = = 0.8180 x 100 81.80% NAV t 323.33 D t (NAV t NAV t-1) 115.8724
Pru ICICI Open-Ended Balanced growth Fund
NAV t-1 31.7077
NAV t 46.97
D t (NAV t NAV t-1) 15.2623
82
MUTUAL FUNDS BALANCE FUNDS Applying the formula we get= 15.2623__ 31.7077 = = 0.4813x 100 48.13%
DSP MERRILL LYNCH Open-Ended Balanced growth Fund
NAV t-1 43.6076 Applying the formula we get=
NAV t 70.11
D t (NAV t NAV t-1) 26.5024
26.5024__ 43.6076
= =
0.6077x 100 60.77%
JM FINANCIAL Open-Ended Balanced growth Fund
NAV t-1 18.9417 Applying the formula we get=
NAV t 25.0424
D t (NAV t NAV t-1) 6.1007
6.1007__
83
MUTUAL FUNDS BALANCE FUNDS 18.9417 = = 0.322 x 100 32.20%
FUND PERFORMANCE RANKING
Name of the Fund BIRLA open-ended Balanced Growth Fund
Returns 81.80%
Rank 1 2
TATA open-ended Balanced Growth Fund 67.85%
84
DSP Black Rock Balanced Growth Fund 60.77% Prudential ICICI open-ended Balanced Growth Fund 48.13% JM financial open-ended Balanced Growth Fund Table No: 4.10 32.20%
4 5
CHART OF FUND PERFORMANCE RANKING
85
Figure No: 4.10
FINDINGS
86
MUTUAL FUNDS BALANCE FUNDS The Biggest advantage with Mutual Funds is that the investor doesnt need huge amount tube invested in all his favorite stocks and bonds. Most Mutual Funds have a minimum investment of Rs.5000. The Balanced fund investments are a combination of Equity, Debt & Money markets. As such, the investments are diversified and the risk is balanced. The Balanced Fund Investments provide, steady and assured returns to the investors. This is one of the important reasons, for choosing the balanced investments. Five Balanced fund schemes are chosen for the study Tata, Birla, Pru ICICI, DSP BLACK ROCK & JM Financial. The Funds Chosen for the study are some of the top performers in the Market. Birla Mutual fund has recorded highest returns in this period and least generated by JM and Prudential ICICI. Asset allocation in balanced fund depends upon fund manager, but market conditions are same to the all funds, TATA fund manager expected growth in equity diversified and high priority given towards equity. All the funds performed above bench mark in the study.
SUGGESTIONS
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MUTUAL FUNDS BALANCE FUNDS In the market have less risk taking capabilities, the balanced fund investments are suitable one. Launch new mutual fund schemes according to investors perception. The Balanced fund investments are a combination of Equity, Debt & Money markets. So Balanced funds are suitable to lower income group investors. In volatility market conditions balanced funds are better than equity funds, and investors who are not ready to bear risk, they can go for balanced funds.
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CONCLUSION
The information in this project report will provide the investors the basic knowledge about Mutual Funds and enable them to choose the best investments suiting their risk/return profile. Basing on the information in this project, recommendations made to investors are as follows Mutual funds provide regular and steady income to investors. Systematic investment plan in Mutual Funds is the best tool for sound investment to small investors who prefer investments in installments. Liquidity, transparency, well regulated and flexibility are some of the features of Mutual funds which is very advantageous to investors. The entry load and exit load in Mutual Funds is very low which does not affect the ultimate yields. Safety of funds & positive rate of return over inflation are the basic two needs of traditional investor. Mutual Fund is well equipped to cater to these basic desires of investors.
89
BIBLIOGRAPHY
REFERRED BOOKS Security analysis and Portfolio management. By &RONALDJ.JORDAN,Edition-5thEdition(2009), Dorlingkindersley(Indian) pvt ltd. Financial Services .ByM.Y.KHAN,Edition -3rd Edition(2007),Tata MC Graw Hill publisher company limited. Personal Finance. By ASHU DATT,Edition-3rd Edition(2003), Penguin books India limited. WEBSITES http://www.mutualfundsindia.com/nav.graph.asp?midem=1 http://www.stockholding.com/shci_mf_intro.cfm http://www.moneypore.com/fund factsheet.asp. http://www.amfiindia.com/fund portfolio_view.asp. DONALD E. FISHER
NEWS PAPERS MAGAZINES Business World The Economic Times The New Indian Express
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MUTUAL FUNDS BALANCE FUNDS

MUTUAL FUNDS BALANCE FUNDS

NEED FOR THE STUDY

MUTUAL FUNDS BALANCE FUNDS

SCOPE OF THE STUDY

MUTUAL FUNDS BALANCE FUNDS

OBJECTIVES OF THE STUDY

MUTUAL FUNDS BALANCE FUNDS

Data Collection Methods

MUTUAL FUNDS BALANCE FUNDS

MUTUAL FUNDS BALANCE FUNDS

SCOPE OF THE STUDY

MUTUAL FUNDS BALANCE FUNDS

LIMITATIONS OF THE STUDY

MUTUAL FUNDS BALANCE FUNDS

MUTUAL FUNDS BALANCE FUNDS

FIGURE SHOWING THE WORKING OF MUTUAL FUND

MUTUAL FUNDS BALANCE FUNDS

STRUCTURE AND CONSTITUENTS OF FUND

MUTUAL FUNDS BALANCE FUNDS

ASSET MANAGEMENT COMPANY

MUTUAL FUNDS BALANCE FUNDS

ORGANISATION OF MUTUAL FUND

MUTUAL FUNDS BALANCE FUNDS

CHARACTERISTICS OF MUTUAL FUNDS

MUTUAL FUNDS BALANCE FUNDS

NET ASSET VALUE (NAV)

Number of Outstanding units

MUTUAL FUNDS BALANCE FUNDS .

SCHEMES OF MUTUAL FUNDS

TYPES OF MUTUAL FUND SCHEMES

OPEN - ENDED SCHEME

Advantages of Open-ended funds over Close-ended funds

CLOSE ENDED SCHEME

Reasons for fluctuations in NAV

ACCORDING TO INVESTMENT OBJECTIVE

MUTUAL FUNDS BALANCE FUNDS

DEBT OR BOND SCHEME

MUTUAL FUNDS BALANCE FUNDS

ADVANTAGES OF MUTUAL FUNDS

MUTUAL FUNDS BALANCE FUNDS

Mumbai (MF Division)

Mumbai (Registered Office)

MUTUAL FUNDS BALANCE FUNDS

The Net worth connectivity with 107 branches and growing

Products and services portfolio

Market & research Focusing on your needs

MUTUAL FUNDS BALANCE FUNDS Bullion Tracker F&O Tracker

OUR GROUP COMPANIES

Net worth Wealth Solutions Ltd. [NWSL]

Ravisha Financial Services Pvt. Ltd. [RFSL]

Principles & Values

MUTUAL FUNDS BALANCE FUNDS

Responsive Trustworthy Creative Courageous

Regulators: - Exemplary governance and ethics wherever we are.

MUTUAL FUNDS BALANCE FUNDS

NATIONAL STOCK EXCHANGE

NSE other indices

BOMBAY STOCK EXCHANGE

The calculation of SENSEX involves dividing the total market capitalization of 30 40

BSE - other Indices

GROWTH AND HISTORY OF MUTUAL FUNDS

MUTUAL FUNDS BALANCE FUNDS

SECOND PHASE 1987-1993 (Entry of Public Sector Funds)