Introduction

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Definition:Mutual funds is nothing, the participation of the investor who are not enable
to invest their money in the share market and hence they participate in the
mutual funds
When an investor buy the unit of the Mutual funds what happen the
manager of the company invest in the shares.
The process is that the manager of the company goes to the people and
sells the units of the Mutual funds and hence collects the money and then
invests the money in the shares.
What happen which dont have the power to invest in the shares they also
participates in the shares because when they invest in the Mutual funds
then automatically they invest in the shares because the fund manager
invest it in the shares

SEBI

TRUSTEE

OPERATIONS

SPONSORS

AMC
FUND

MARKET / SALE

MARKET / SALE
MUTUAL
SCHEME
INVESTOR
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DISTRIBUTORS

Role of a Fund Manager:

Fund managers are responsible for implementing a consistent investment
strategy that reflects the goals and objectives of the fund. Normally, fund
managers monitor market and economic trends and analyze securities in
order to make informed investment decisions.
How are mutual funds regulated?
All Asset Management Companies (AMCs) are regulated by SEBI and/or the
RBI (in case the AMC is promoted by a bank). In addition, every mutual fund
has a board of directors that represents the unit holders interests in the
mutual fund.
What is an Asset Management Company (AMC)?
The company that manages a mutual fund is called an AMC. For all practical
purposes, it is an organized form of a money portfolio manager. An AMC
may have several mutual fund schemes with similar or varied investment
objectives. The AMC hires a professional money manager, who buys and
sells securities in line with the fund's stated objective.
Are investments in mutual fund units risk-free or safe?
This depends on the underlying instrument that a mutual fund invests in,
based on its investment objectives. Mutual funds that invest in stock
market-related instruments cannot be termed risk-free or safe as
investment in shares are inherently risky by nature, whereas funds that
invest in fixed-income instruments are relatively safe and those that invest
only in government securities are the safest.
How is NAV calculated?
The value of all the securities in mutual funds portfolio is calculated daily.
From this, all expenses are deducted and the resultant value divided by the
number of units in the fund is the funds NAV or its Net Asset Value.

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Introduction:-

Mutual funds are financial intermediaries in the investment business. They

collect funds from public and invest on the behalf of the investors as pass
through entity with losses and gain with accruing to the investors only.
Mutual funds sell their shares to their investors; invests the proceeds in a
wide choice of securities in the financial market. Owner of shares receive
prorate shares of the earning from these assets, minus management and
other fees assessed by the fund.
Mutual funds are defined by the different authors in different words
meaning on the same thing I. e. it is non banking and non depository
financial intermediary which act as an important vehicle for bringing wealth
holders and deficit units together indirectly. Mutual funds are pooling funds
together and then investing that funds in different securities thus reduce
risk by diversification
Origin of Mutual funds :
The origin of the modern mutual funds industry may be traced to
Robert Fleming first investment trust set up in the 1870s when he promised
to manage the finance of the moneyed classes of Scotland. Flemings trust
called foreign and colonial investment Trust was formed as Limited
company, to invest in the selection of 18 overseas Government stocks, as
average yields of 8 Percent. The moneyed people latched on to the trust
idea in a period of falling interest rates.
In India, excepting UTI all other mutual funds are organized and set up
under Indian trust act 1882. And UTI is set up under special act, the UTI act,
amended by the parliament in1963.
We can divide the four phases
Phase 1(1964-1986)

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The Unit trust of India (UTI) has the distinction of laying the foundation
of mutual funds industry in India. The trust was establish under UTI act,
1963, a special act of parliament and became operational in July 1964. It
started with the basic objective of mobilizing the savings through the sale of
units and investing them in corporate securities, for maximizing yield and
capital appreciation.
The institution maintained its monopoly till 1987, with its different
scheme like monthly income, capital gains scheme equity linked scheme
plan etc. Its most popular scheme has been the unit scheme 1964, which is
the first open ended scheme. Over the years, UTI has emerged as a large
investment institution; with a well spread out network, it has successfully
managed its domestic and offshore mutual funds. During this phase, UTI
was the only fund company in India, and its funds family included five
income oriented open-ended schemes, which were sold largely through its
agent network built up over years.
Phase 2 (1987-1992)
When the mutual funds become free for Public sector
The second phase, witness the entry of funds companies sponsored by
the state owned bank and financial institution. In 1987, SBI mutual funds
Canara bank mutual funds were set up as trust under the Indian trust Act
1882, by the respective sponsors, the state bank of India andCanara bank.
By the 1990, the two state sector insurance giant, LIC and GIC and state
owned bank namely Indian India issued another set of guidelines in June
1990, which emphasized that arms lengths relationship be maintained
between the sponsor and MAC.
Phase 3 (1992-..)
The phase for open field policy
The year 1993 marked a turning point in the history of mutual funds
in India. As a part of the economic liberalization and reform process, the
Government launched a series of measures for financial sectors including
setting up of SEBI issued the mutual funds regulation in January 1993. Also
the mutual funds industry opened up to private domestic and international

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players. Kothari groups of companies, in joint venture with pioneer of US

Funds Company, set up first private mutual funds, the Kothari Pioneer
mutual funds, in 1993. This was soon fallowed from Morgan Stanley.
Subsequently, several mutual fund trusts set up by the domestic and foreign
companies either in joint venture as independent entities.

The contribution of mutual funds toward the Economy

Every entity present in the economy has its own role in the economy. For
performing that role in the Economy it charges to somebody and gives some
benefits to him. If these benefits provided by that by that entity are more
than the cost, then that entity exist in the economy and we can say that this
entity is performing well. The investment needed for different household not
conform to ant standard pattern. First they determine clearly their
investment objectives, including the combination of safety, income capital
growth and price level protection they are seeking.
Second, they must decide they must of investment to be used and the
proportions of each to be acquired. Third, they must select specific
investment of the desire type, making sure that quality stability and other
features are obtained as needed. Finally, they should study the long run
values of suitable investment and time their purchase and sales with due
regard for the price behavior of characteristically unstable investment
markets. The proper handling of the fourfold task is an assignment of no
mean proportions.
In choosing specific investment, investors will need definite ideas
regarding a number of features of investments. The following are some
factors which investor consider while designing his investment policy. They
are not offered in any order denoting importance, the emphasis each should
receive varies with the situation of each investor.
1. Safety (Risk reduction) :
Household investors are in financial surplus, and are therefore the net
primary lenders to the financial markets, and the industrial commercial and
government sectors in financial deficit and are therefore net borrowers from

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the financial markets. But always there is a risk involved of a borrower being
unable to pay the interest to repay the principal when it is due. This risk is
known as default risk or credit risk.
Also there is a certainty attached to the income stream derived from
investment project, since the value of equity investment will rise if the
underlying capital stock is used productively and will decline or even vanish
if it used unproductively. This risk is called equity risk. Investors therefore
want safety against this risk in the investments, even though the returns on
the investment may be low.

2. Capital appreciation:
The ultimate objective of an individual in household sector, say,
is to maximize the expected welfare of utility of this lifetime
consumption stream. For that sometime he looks for larger return than
a safe investment. These types of investors are more interested in
priced gain rather than income.
Therefore they invest in speculative assets like equity shares,
which have radical price variation. In this type of investments value of
principal is of prime concern
3. Regular income (Stability of income)
The factor is important in arranging an investment portfolio for
an individual who depend closely on income. The risk related to the
assets giving regular income has less risk as com [pared to the
investment, which provide capital growth.
4. Liquidity
Every investor require minimum, quick recourse fund available
to meet emergencies. Furthermore, a sound portfolio will look to the
sure and quick availability of additional fund which may be needed for
business opportunities, or estate taxes. Therefore liquidity is one of
the important factor considers while investing.

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5. Freedom from care about investment

The existence of important risk in every class of investment
makes it impossible to buy good thing and forget them. T/Constant
skilled supervision is necessary to obtain good returns. Those who
wish to minimize the attention required by their investment should
therefore make quality their watch word.
6. Proper investments
The proper handling of investment task is very difficult. It
demands technical knowledge, diligence, and some experience, but it
is the essence of successful investment management for an
individual. In country like India, where the literacy level is very low the
investors from, household sector lakes in knowledge or in them
required for successful investment in capital market

Classification of mutual funds:Mutual funds can be classified in to fallowing three based categories.
1. Portfolio classification of mutual funds.
2. Functional classification of mutual funds.
3. Geographical classification of mutual funds.
1. Portfolio classification of mutual funds
I)

Growth funds:These funds invest mostly equity shares and assume the risk
associated with the equity investment. The main objective of the
growth funds is to appreciate the capital.

II)

Income funds:These funds mostly invest in bonds, like debt instruments, like
debentures. Their basis is towards providing safety of investment and
regular income.

III)

Balance funds:-

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They are divide their investment between equity shares and

bonds in order to meets the objective of safety, capital appreciation
and regularity of income.
IV)

Tax exempt funds:-

They invest their funds in such investments, which receive

benefits and enjoy exclusive tax free treatment.

V)

Index funds:These funds invest only in those shares, which are included in
the market indices and in exactly in the same proportion, so that the
value of such index varies with the market index.

VI)

VII)

Hedge funds:Mutual funds, which employ their funds by speculative trading, i.e.
by buying shares whose prices are likely to rise and selling shares
whose prices are likely to fall, are called hedge funds.
Money market funds:-

Specialize in investing in short-term money market instrument like

certificate of deposits the emphasis on liquidity with low rate of return.
VIII) Special funds:These funds invest only in specialized channels like a specific
country (India funds, Japan funds, and Korea funds) a specific category of
companies, real stat.
1. Functional classification of mutual funds:I)

Open ended Scheme:-

Mutual funds may have open ended scheme under which an

investor is free to join the fund or withdrew from their funds at any time
after an initial lock in period. Such funds announce sale and repurchase
prices from time to time. UTIs US 64 scheme is an example of such fund.
In open ended mutual funds, the holder can resell the shares in the fund

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to the issuing mutual fund company and receive in turn the net asset
value (NAV) of the shares. The open ended fund can buy or sell their own
shares.
II)

Closed ended Funds:-

Such mutual funds do not issue shares or unit or repurchase or

redeem on a periodic basis. Units of such schemes can redeem only on
termination or through dealing in share market. In close ended scheme
the period of the scheme specified. Close ended scheme has definite
target amount for the funds and cannot sell more after initial offering.
2. Geographical classification of mutual funds:3. Domestic funds:Domestic funds are the savings schemes. Which are opened for
mobilizing saving of investors in household sector in the country.
They can invest in the securities in the financial markets within
the country.
4. Offshore funds:Such mutual funds can invest in securities of foreign companies and
such investment requires RBI permission.
Mutual funds Investment VS Individual investment

5. Amount of funds available:Fund manager have a large amount of funds, which provide them
economies of scale by which they can absorb any losses in the stock market
and can continue investing in the stock market.
On the other hand, individual investors dont have large amount of
funds for investments. Therefore if the suffer any losses in the market, it
become very difficult for him to regain his position. Thus mutual funds
provide stability to the stock market.

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6. Portfolio diversification:Also mutual funds have portfolio diversification, of securities because

of large amount of funds available with them, which helps in reduction in
risk. But the portfolio diversification of securities is not possible for an
individual investor. Therefore mutual funds help the investor in reducing the
risk.
Information and data available:AMCs have large amount of funds available with them, so can afford
information and data required for investments through equity research
team. Although individual investor can access to the information he cant
afford information
Professional management:Fund manager have professionals who have various analytical
techniques available with them for analyzing data of various companies. But
many investors dont have basic knowledge about investment thus making
them incapableof making informed decision. Thus fund managers help the
individual investors in proper investment in the financial market by
analyzing the data and information available.

Continuous monitoring of investments:As the AMCs have the information and data with them and also they
have various analytical techniques available with the, they can continuously
monitor the progress of the companies in which they have invested their
funds. On the other hands, investors at time dont have sufficient knowledge
and time to monitor the performance of companies in which they have
invested. Fund management thus helps the investors in talking the worry
out of their investments.
The present state of the mutual funds their performance and
profitability has been a cause of concern. Concern have been expressed in
various quarters, including investors association about the legality and

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ethics of certain practice fallowed by mutual funds and the fund

management capabilities of the fund managers.
Questions have been raised about the accountability and
responsibility of the asset management companies towards their investors,
and the role of trustee in supervising the asset management companies in
fulfilling their obligations towards the investors.
Therefore we must consider the issue and try to work on them to
ensure that mutual funds develop in to vibrant and efficient investment
vehicles, providing the benefits of security markets to millions of investors.

Organization
Preview
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LIC Introduction
LIC Mutual Fund was set up by Life Insurance Corporation of India on 19th
June 1989 with a corpus of Rs. 2 crores. LIC Mutual Funds are managed by
LIC Mutal Fund Asset Management Company Ltd which was formed on 20th
April 1994 in compliance with the Securities and Exchange Board of India
(Mutual Funds) Regulations, 1993.

Life Insurance in its modern form came to India from England in the year
1818. Oriental Life Insurance Company started by Europeans in Calcutta
was the first life insurance company on Indian Soil. In the year 1912, the
Life Insurance Companies Act, and the Provident Fund Act were passed. The
Life Insurance Companies Act, 1912 made it necessary that the premium
rate tables and periodical valuations of companies should be certified by an

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actuary. But the Act discriminated between foreign and Indian companies
on many accounts, putting the Indian companies at a disadvantage.
19th of January, 1956, that life insurance in India was nationalized. The
Parliament of India passed the Life Insurance Corporation Act on the 19th of
June 1956, and the Life Insurance Corporation of India was created on 1st
September, 1956, with the objective of spreading life insurance much more
widely and in particular to the rural areas with a view to reach all insurable
persons in the country, providing them adequate financial cover at a
reasonable cost.
Today LIC functions with 2048 fully computerized branch offices, 100
divisional offices, 7 zonal offices and the Corporate office. LICs Wide Area
Network covers 100 divisional offices and connects all the branches through
a Metro Area Network. LIC has tied up with some Banks and Service
providers to offer on-line premium collection facility in selected cities. LICs
ECS and ATM premium payment facility is an addition to customer
convenience. Apart from on-line Kiosks and IVRS, Info Centres have been
commissioned at Mumbai, Ahmedabad, Bangalore, Chennai, Hyderabad,
Kolkata, New Delhi, Pune and many other cities. With a vision of providing
easy access to its policyholders, LIC has launched its SATELLITE SAMPARK
offices.

PRUDENTIAL ICICI MUTUAL FUNDS

ICICI Prudential is a joint venture between ICICI Bank and Prudential plc
engaged in the business of life insurance in India. ICICI Prudential is the
largest private insurance company and second largest insurance in India
after LIC. ICICI Prudential Life Insurance Company is a joint venture between
ICICI Bank, a premier financial powerhouse, and Prudential plc, a leading
international financial services group headquartered in the United Kingdom.

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ICICI Prudential was amongst the first private sector insurance companies to
begin operations in December 2000 after receiving approval from Insurance
Regulatory Development Authority (IRDA).ICICI Prudential Life's capital
stands at Rs. 37.72 billion (as on March, 2008) with ICICI Bank and
Prudential plc holding 74% and 26% stake respectively. The company has
assets held over Rs. 30,000 crore as on April 30, 2008.ICICI Prudential Life is
also the only private life insurer in India to receive a National Insurer
Financial Strength rating of AAA (Ind) from Fitch ratings..
Arguably the most innovative Indian Life insurer in terms of customer
services and products, ICICI Prudential has one of the largest distribution
and servicing network with over 2,000 proprietary offices & customer touch
points across India. The 30,000 employee strong organization has one of the
largest agency distribution in the industry.
In June, 2009 ICICI Prudential Life Insurance has decided to snap its tie up
with TTK Healthcare to settle insurance claims of its users.

Research
Study
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Objective of study:To compare the returns given by two mutual funds mentioned above VS with
the index and also to compare the relative returns given by two mutual
funds.
To see if they are able to achieve the objective with regard to managing the
portfolio as they have spelt out in their offer documents.

~ 16 ~

To see if there is acquits liquidity offered by the mutual funds.

To see if they are transparent in disclosing their portfolioon a regular basis
and dealing with public.

Hypothesis for the project are as follows:-

Portfoliomanaged by professional bodies like mutual funds five better

returns in comparison to return given by index.

~ 17 ~

More transparent the portfolio, more are the returns and public
confidence in term of mobilization of funds.
Schemes of LIC mutual fund that have been taken for the comparison
withPru. ICICI mutual fund have given better returns in comparison to
both LIC Mutual funds and BSE-sensex.

Research methodology:The research methodology that I followed during preparation of

project consisted of primary collection of data from various internet sites like
mutualfundindia.com bseindia.com. I also took data from the site of mutual
funds like pruicici.com. the data given in the fact sheets of both the mutual
fund also proved to be great help.
The secondary source of data consist question being asked to market
analysts as to the appropriate method for the performance evaluation of
mutual funds. Majority of them suggested the tactual comparison of returns
is the correct evaluation method of evaluating the mutual funds. I prepared
a questionnaire to ask various people as to the mutual funds they like with
regard to their transparency, portfolio disclosure and service standards.
Majority of them showed a preference towards investing mutual funds of
private sector especially pro ICICI and LIC.

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Comparison of
Mutual funds

The Mutual funds Boom:-

~ 19 ~

The history of mutual funds begins in 1964 that was the year of
the Unit Trust of India Launched in 1964. It was only 1987 that the banks
and insurance companies got in to the act, with state bank of India taking
the initiative 40% of the funds promoted by the banks and insurance
companies were launched in the go-go year in the 1987 and 1993. The first
private fund. Kothari Pioneer (Now ITI pioneer) was launched in to 1993.
More fund were joined the party and the total asset under management
grew to Rs. 61.301crore in 1994. But as the Sensex dropped, investor
preference shifted to fix income instruments in 1996.here most new
entrants found it difficult to complete with UTI. Which has assured return
debt.Products. The period 1996-98 was the worst in the history of mutual
funds. But several asset management companies used the opportunity of
restructure their portfolio and were ready for the 1999 boom in equities. In
1999- 2000, the value of asset under management swelled to Rs. 167946
Crore. Then the great equity melt down happened. Today, there are 34
mutual fund houses managing 614 scheme and Rs 94571 crorein assets.
Not all of them will survive, but performance and transparency will tell in the
long run.

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Pro ICICI Balanced Fund

Summary information
Fund Name
Asset management Company
Ownership
Type
Investment Objective
Launch date
Net Asset (Fund size)
Fund manager
Growth Option
Entry Load
Exit Load

On Mar. 31, 2010

Pru.ICICI Mutual funds
Pro ICICI AMC Ltd.
Joint venture
Open ended
Income and Growth
November 09, 1999
Rs. 262.86 .crore
Mr. Prashant Kothari
47.30
Nil
1%

Performance table
Perio
d
Name
Pro ICICI Balanced
Fund

Asset allocation

Last 1
Year

Last 3
Year

Last 5
Year

Since
Inception

66.2

7.1

14.8

14.5

31st Mar.2010 (%)

Finance - Banks - Public Sector

Computers Software
10
Diversified
9.0
Finance - Banks - Private Sector
Refineries
9.0
Cigarettes
6.0
Finance Investments
4.0
Auto, cars & Jeeps
3.0
Engineering Heavy
Oil Drilling And Exploration

10.0
9.0

3.0
3.0

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Oil Drilling And Exploration; 3

Engineering - Heavy; 3
Finance - Banks - Public Sector; 10
Auto - Cars & Jeeps; 3
Finance - Investments ; 4
Cigarettes; 6

Refineries; 9

Computers - Software; 10

Diversified; 9

Finance - Banks - Private Sector; 9

Sr.
No.
1
2
3
4
5
6
7
8
9
10

Top 10 Holding Scripts name Listed

on stock exchange
Finance - Banks - Public Sector
Computers - Software
Diversified
Finance - Banks - Private Sector
Refineries
Cigarettes
Finance - Investments
Auto - Cars & Jeeps
Engineering - Heavy
Oil Drilling And Exploration

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Market Value
(Rs In Lakhs)
2628.6
2628.6
2365.74
2365.74
2365.74
1577.16
1051.44
788.58
788.58
788.58

% to NAV
10.0
10.0
9.0
9.0
9.0
6.0
4.0
3.0
3.0
3.0

LIC Balanced Fund

Summary information
Fund Name
Asset management Company

On Mar. 31, 2010

Equity - Balanced Fund
LIC Mutual Fund Asset Management
Company Ltd.
Joint venture
Open Ended
Growth
January 01, 1991
Rs. 30.73 rore
Mrs. BichitraMahapatra
47.30
21.95
Nil
1%

Ownership
Type
Investment Objective
Launch date
Net Asset (Fund size)
Fund manager
Growth Option
Dividend Option
Entry Load
Exit Load
Performance table
Last 1
Peri Year
od
Name
LIC Balanced Fund -23.3732

Asset allocation

Last 3
Year

Last 5
Year

Since
Inception

-3.2532

10.0276

5.3061

31st Mar.2010 (%)

Power - Transmission/Equipment
Telecommunication - Services 15.0
Finance - Banks - Public Sector
Pharmaceuticals
7.0
Cement Major
7.0
Finance - Banks - Private Sector
Power - Generation/Distribution
Aluminum
4.0
Personal Care
Diversified
3.0

15.0
8.0
5.0
5.0
4.0

~ 23 ~

Diversified; 3
Personal Care; 4
Power - Transmission/Equipment; 15
Aluminium; 4
Power - Generation/Distribution; 5
Finance - Banks - Private Sector; 5
Cement Major; 7

Telecommunications Service; 15

Pharmaceuticals; 7 Finance - Banks - Public Sector; 8

Sr.
No.
1
2
3
4
5
6
7
8
9
10

Top 10 Holding Scripts name Listed Market Value

on stock exchange
(Rs In Lakhs)
BhartiAirtel
279.3357
Jyoti Structures
236.621
Power Grid Corpo
216.3392
Ambuja Cements Ltd.
207.4275
Ranbaxy Labs.
203.7399
IDBI Bank Ltd.
197.5939
RelianceCommu.Ltd
173.0099
YES Bank Ltd.
160.1033
PTC India
2145.11
Hindustan Unilever L
2025.66

ICICI Prudential Growth Plan

~ 24 ~

% to NAV
9.09
7.7
7.04
6.75
6.63
6.43
5.63
5.21
5.03
4.31

Summary information
Fund Name
Asset Management Company
Ownership
Types
Investment objective
Launch date

On Mar. 31, 2010

Pru. ICICI MF.
Pru. ICICI AMC Ltd.
Joint Venture
Open ended
Income and growth
July 09, 1998

Net asset (Fund Size)

Fund manager

389.56 crore
Mr. SankaranNaren

NAV
Entry Load
Exit load

120.51
NIL
NIL

Performance table
Last 1
Period
Year
Name
ICICI Growth 87.4
Plan

Asset allocation

Last 3
Year

Last 5
Year

Since
Inception

41.6

158.4

120.650

31st Mar.2010 (%)

Diversified
Computers- Software
Finance - Banks - Private Sector
Telecommunications Service
Finance Housing
Oil Drilling and Exploration
Engineering Heavy
Power - Generation/Distribution
Metals - Non Ferrous Copper
Pharmaceuticals

16.0
15.0
11.0
7.0
6.0
6.0
5.0
5.0
4.0
4.0

~ 25 ~

Pharmaceuticals; 4
Diversified; 16
Power geneeration/Distribution; 5

Meats Non ferrous Copper, copper Alloy; 4

Engineering Heavy; 5
Oil Drilling, Exploration; 6
Computer Software; 15
Finance Housing; 6
Telecommunication services; 7

Finance bank private sectors; 11

Sr. No.
Top 10 Holding Scripts name Listed on stock exchange
Market Value
(Rs In Lakhs)
% to NAV
1
Reliance Inds.
279.3357
16.0
2
Infosys Techno.
236.621
15.0
3
BhartiAirtel
216.3392

~ 26 ~

11.0
4
HDFC
207.4275
7.0
5
ICICI Bank
203.7399
6.0
6
Bharat Heavy Elec.
197.5939
6.0
7
L & T
173.0099
5.0
8
Hindustan Unilever L
160.1033
5.0
9
HDFC
2145.11
Bank
4.0
10
Cairn India Ltd
2025.66
4.0

LICMF Growth Fund (G)

Summary information
Fund Name LIC MF Growth fund
Asset management Company
Ownership

On Mar. 31, 2010

LIC MF Growth fund
LIC Mutual Fund Asset Management
Company Ltd.
Joint venture

~ 27 ~

Type
Investment Objective
Launched date
Net Asset size
Fund manager
Growth Option
Entry Load
Exit Load

Open Ended
Growth
01, Aug., 94
Rs. 82.53 crore
Mrs. Ramasamy
11.81
Nil
1% if exit within 1 years for any
investment.

Performance table
Per
iod
Name
LIC Growth Fund

Last 1
Year

Last 3
Year

Last 5
Year

Since
Inception

103.96

10.46

15.26

10.19

Asset allocation
Automobiles
Gas & others
Transports
Fertilizers
Pharma
Media & Entertainment
Non Ferrous Metal
Auto Ancillary
Hotel
Textile products

31st Mar.2010 (%)

2.25
1.9
1.41
1.03
0.82
0.64
0.32
0.32
1.91
1.32

~ 28 ~

Textile products; 3.92 Oil & others; 5.27

Media & entertainment; 1.91
Cements; 2.46

Software; 4.8

Ferrous metals; 2.49

Industrial products; 2.58 Powers & others; 4.8
Automobiles; 3.3

Sr.
No.
1
2
3
4
5
6
7
8
9
10

Constructions & others; 3.38

Top 10 Holding Scripts name Listed Market Value

on stock exchange
(Rs In Lakhs)
Reliance Inds
727.279
ITC
331.9967
ONGC
285.2183
State Bank of India
274.8231
Larsen & Toubro
268.9758
Reliance Infra.
214.401
HDFC
418.4068
BhartiAirtel
257.9309
Relience Communication
196.8591
TCS
191.0118

~ 29 ~

% to NAV
7.155
5.46
5.10
4.37
4.22
3.78
3.49
3.13
2.93
2.87

Pro ICICI Tax Plan

Summary information
Fund Name
Asset Management Company
Ownership
Type
Investment objective
Launch Date
Net asset (Fund Size)
Fund Manager
Growth Option
Entry Load
Exit Load

On Mar. 31, 2010

Pro. ICICI Mutual funds
Pro. ICICI AMC Ltd
Joint venture
Open ended
Income and Growth
Aug. 19 1999
Rs. 1011.03 Crore
Mr. SankaranNaren
119.69
Nil
Nil

Performance table
Last 1
Peri Year
od
Name
Pro ICICI Tax Plan

Asset allocation

117.37

Last 3
Year

Last 5
Year

Since
Inception

45758

20.60

26.60

31st Mar.2010 (%)

Computers Software
11.0
Pharmaceuticals
10.0
Diversified
6.0
Fertilisers Nitrogenous/Phosphate
5.0
Finance Banks Private Sector
5.0
Power Generation/Distribution
5.0
Telecommunications Service
5.0
Chemicals Specialty Others
4.0
Finance Housing
4.0
Personal Care
4.0

~ 30 ~

Personal Care; 4
Finance - Housing;
4
Computers
- Software; 11
Chemicals - Speciality - Others; 4
Telecommunications - Service; 5
Pharmaceuticals; 10
Power - Generation/Distribution; 5
Diversified; 6
Finance - Banks - Private Sector; 5
Fertilisers - Nitrogenous/Phosphate; 5

Sr.
No.
1
2
3
4
5
6
7
8
9

Top 10 Holding Scripts name Listed Market Value

on stock exchange
(Rs In Lakhs)
CadilaHealthcare
5449.4517
Infosys Techno.
5085.4809
BhartiAirtel
4832.7234
ZuariIndustrie
4600.1865
Reliance Inds.
4266.5466
HDFC
4195.7745
NTPC
4185.6642
Corporation Bank
4064.3406
Hindustan Unilever L
3538.605

~ 31 ~

% to NAV
5.39
5.03
4.78
4.55
4.22
4.15
4.14
4.02
3.5

10

PidiliteInds.

3245.4063

3.21

LICMF Tax Plan (G)

Summary information
Fund Name LIC Mutual fund Tax Plan
Asset management Company
Ownership
Type
Investment Objective
Launch date 01, Jan. 97
Net Asset (Fund size)
Fund manager
Growth Option
Entry Load
Exit Load

On Mar. 31, 2010

LIC Mutual fund Tax Plan
LIC Mutual Fund Asset Management
Company Ltd.
Joint venture
Open Ended
Growth
01, Jan. 97
Rs. 40.98 crore
Mrs. Ramasamy
26.69
Nil
1% if exit within 1 years for any
investment.

Performance table
Peri
od
Name
LIC Tax Plan

Last 1
Year

Last 3
Year

Last 5
Year

Since
Inception

77.81

3.08

9.17

8.28

Asset allocation
Oil & others
Software
Powers & others
Constructions & others
Automobiles
Industrial products
Ferrous metals
Cements

31st Mar.2010 (%)

5.27
4.8
4.8
3.38
3.3
2.58
2.49
2.46

~ 32 ~

Media & entertainment

Textile products

1.91
1.32

Textile products; 3.92 Oil & others; 5.27

Media & entertainment; 1.91
Cements; 2.46

Software; 4.8

Ferrous metals; 2.49

Industrial products; 2.58 Powers & others; 4.8
Automobiles; 3.3

Sr.
No.
1
2
3
4
5
6
7
8
9
10

Constructions & others; 3.38

Top 10 Holding Scripts name Listed Market Value

on stock exchange
(Rs In Lakhs)
Reliance Inds
727.279
ITC
331.9967
ONGC
285.2183
State Bank of India
274.8231
Larsen & Toubro
268.9758
Reliance Infra.
214.401
HDFC
418.4068
BhartiAirtel
257.9309
Relience Communication
196.8591
TCS
191.0118

~ 33 ~

% to NAV
7.155
5.46
5.10
4.37
4.22
3.78
3.49
3.13
2.93
2.87

ICICI Prudential Flexible Income Plan Premium Growth

Summary information
NAV
Fund
Name
Entry
Load
Asset
Management
Company
Ownership
Exit load
Types
Investment objective
Launch
date
Performance
table
Net asset (Fund Size)
Last 1
Last 3
Fund manager Year
Year
Period
Name
Pro
ICICI 5.23
7.76
Flexible
Income

On Mar. 31, 2010

170.64
Pru.
ICICI MF.
NIL
Pru.
ICICI AMC Ltd.
Joint
NILVenture
Open ended
Income and growth
September 27, 2002
35669.76
crore
Last
5
Since
Mr. ChaitanyaPande,
Amit
Mehta
Year
Inception
7.06

Asset allocation
31st Mar.2010 (%)
Banks
45.63
Current Assets
16.42
Sovereign
14.74
NBFC
6.17
Petroleum, Gas and petrochemical products
4.69
HFC
3.54
Food & Food Processing, Beverages
2.24
FI
1.55
Diversified
1.34
Steel and Ferrous Metal
1.26

~ 34 ~

7.45

Steel and Ferrous Metal; 1.26

FI; 1.55 Diversified; 1.34
Food & Food Processing, Beverages; 2.24
HFC; 3.54
Petroleum, Gas and petrochemical products; 4.69
NBFC; 6.17
Banks; 45.63
Sovereign; 14.74

Current Assets; 16.42

Sr.No
.
1
2
3
4
5
6
7
8
9

Top 10 holdings Scripts Name Market Value

Listed o Stock exchange
(RS.
In
Lakhs )
Canara Bank
309970.2144
Central Bank
257535.6672
Punj. NationlBak
884624.3159
04
Bank of India
172284.9408
IDBI Bank Ltd.
164794.2912
Union Bank of In
157660.3392
Oriental Bank of
444477.3123
84
HDFC
121990.5792
Syndicate Bank
119493.696

~ 35 ~

% of NAV
8.69
7.22
4.98
4.83
4.62
4.42
3.53
3.42
3.35

10

UCO Bank

116640.1152

3.27

LICMF Opportunities Fund (G)

Summary information
Fund Name
Asset management Company

On Mar. 31, 2010

Equity Balanced Fund
LIC Mutual Fund Asset Management
Company Ltd.
Joint venture
Open Ended
Growth
31-Jan-05
Rs. 64.97 crore
Mrs. Ramasamy
17.19
Nil
1% if exit within 1 years for any
investment.

Ownership
Type
Investment Objective
Launch date
Net Asset (Fund size)
Fund manager
Growth Option
Entry Load
Exit Load

Performance table
Last 1
Peri Year
od
Name
LIC
Opportunity 75.11
Fund (G)

Asset allocation
Banks
Petroleum products
Powers & others
Telecommunication services
Industrial capital goods

Last 3
Year

Last 5
Year

Since
Inception

2.85

0.00

11.56

31st Mar.2010 (%)

15.44
12.23
10.13
8.97
8.47

~ 36 ~

Consumers Non durables

Oil & others
Finance
Cement
Ferrous Metals

Sr.
No.
1
2
3
4
5
6
7
8
9
10

6.7
5.69
5.41
4.12
3.92

Top 10 Holding Scripts name Listed Market Value

on stock exchange
(Rs In Lakhs)
Reliance Inds
727.279
ITC
331.9967
Larsen & Toubro
285.2183
ONGC
274.8231
Reliance Infra.
268.9758
BhartiAirtel
214.401
HDFC
418.4068
Petronet LNG
257.9309
Petronet LNG
196.8591
ICICI Bank
191.0118

~ 37 ~

% to NAV
10.07
5.11
4.39
4.23
4.14
3.30
6.44
3.97
3.03
2.94

Diversified; 3
Personal Care; 4
Power - Transmission/Equipment; 15
Aluminium; 4
Power - Generation/Distribution; 5
Finance - Banks - Private Sector; 5
Telecommunications Service; 15
Cement Major; 7
Pharmaceuticals; 7

Finance - Banks - Public Sector; 8

ICICI Pru Index Fund-Nifty Plan

Summary information
Fund Name
Asset Management Company
Ownership
Types
Investment objective
Launch date
Net asset (Fund Size)
Fund manager
NAV
Entry Load
Exit load

On Mar. 31, 2010

Pru. ICICI MF.
Pru. ICICI AMC Ltd.
Joint Venture
Open ended
Growth
15 Feb. 2002
97.59 crore
KayzadEnglim
176.09
NIL
NIL

Performance table

~ 38 ~

Period
Name
Pro.ICICIind
ex fund

Asset allocation

Last 1
Year

Last 3
Year

Last 5
Year

Since
Inception

94.6

12.2

20.8

21.4

31st Mar.2010 (%)

Petroleum, Gas and petrochemical

Banks
FMCG
Current Assets
Auto & Auto Ancillaries
Engineering and Capital Goods
HFC
Non Ferrous metals
Construction materials
Construction and Infrastructure

products
16.56
15.91
7.04
6.93
5.84
5.83
4.63
3.64
2.02
1.21

~ 39 ~

Construction
Infrastructure;
Constructionand
materials;
2.02 1.21
Non Ferrous metals; 3.64
Gas and petrochemical products; 16.56
HFC; Petroleum,
4.63
Engineering and Capital Goods; 5.83

Auto & Auto Ancillaries; 5.84

Banks; 15.9
Current Assets; 6.93
FMCG; 7.04

Sr.No
.
1
2
3
4
5
6
7
8
9
10

Top 10 holdings Scripts Name Market Value

Listed o Stock exchange
(RS.
In
Lakhs )
Petroleum Products
1024.695
Software
663.612
icici bank ltd
517.227
Diversified
478.191
Consumer Non Durables
361.083
Finance
331.806
hdfc bank ltd
331.806
state bank of india ltd
292.77
bharat heavy electricals ltd
214.698
bhartiairtel ltd
204.939

~ 40 ~

% of NAV
10.5
6.8
5.3
4.9
3.7
3.4
3.4
3.0
2.2
2.1

LICMF Index Fund - Nifty Plan (G)

Summary information
Fund Name
Asset management Company

On Mar. 31, 2010

Equity Balanced Fund
LIC Mutual Fund Asset Management
Company Ltd.
Joint venture
Open Ended
Growth
14-Nov-02
Rs. 78.10crore
Mrs. Ramasamy
17.19
Nil
Nil

Ownership
Type
Investment Objective
Launch date
Net Asset (Fund size)
Fund manager
Growth Option
Entry Load
Exit Load

Performance table
Peri
od
Name
LIC Index Fund

Last 1
Year

Last 3
Year

Last 5
Year

Since
Inception

88.6

6.5

15.2

16.9

Asset allocation
Banks
Petroleum products
Powers & others
Telecommunication services
Industrial capital goods
Consumers Non durables
Oil & others
Finance
Cement
Ferrous Metals

31st Mar.2010 (%)

15.44
12.23
10.13
8.97
8.47
6.7
5.69
5.41
4.12
3.92

~ 41 ~

Comparison of NAVs Of ICICI Balanced Fund v/s LIC

Balanced fund
Comparison of NAVs Of ICICI Growth Fund v/s LIC Growth
Plan

Sr.
No.
1
2
3
4
5
6
7
8
9
10

Top 10 Holding Scripts name Listed

on stock exchange
Reliance Inds
ITC
Larsen & Toubro
ONGC
Reliance Infra.
BhartiAirtel
HDFC
Petronet LNG
Petronet LNG
ICICI Bank
Comparison of NAVs Of ICICI Tax

~ 42 ~

Market Value % to NAV

(Rs In Lakhs)
898.15
11.5
679.47
8.7
531.08
6.8
507.65
6.5
343.64
4.4
328.02
4.2
320.21
4.1
273.35
3.5
210.87
2.7
203.06
2.6
Plan v/s LIC Tax Plan

LIC Tax Plan/ ICICI Tax Plan

180
160
140
120
100
80
60
40
20
0
39172

39538

39903

LIC Tax plan

40242

ICICI Tax plan

Comparison of NAVs Of ICICI Flexible income v/s LIC Opportunity fund

ICICI Flexible Income/LIC Opportunity Fund

200
150
100
50
0
39172

39538

39903

LIC Flexible income

ICICI Flexible income

Comparison of NAVs Of ICICI Index fund v/s LIC Index fund

~ 43 ~

40242

ICICI Index Fund/ LIC Index Fun

50
45
40
35
30
25
20
15
10
5
0
39172

39538

39903

LIC Index Fund

~ 44 ~

ICICI index fund

40242

Pru. ICICI Balanced (G)

Since its inception on 9th November 1999, it has done very well beating all
parameters. It reached to Rs. 9.50 on 31 st Dec. 2000. On subsequent
downturn it touched to Rs. 8.40/- on 31 st Dec. 2001. It has recovered to
11.41/- as on 31st January 2002, and by the end of 31 st Dec. 2003 it gone up
to 16.50/- along with upward move of sensex. The NAVs increases up to
26.77 at the end of 31st Dec. 2005, Rs. 26.96 and 34.63 at the 31 st Dec.
2006 and then increase as 47.3 at 31st Dec. 200, then fall down with sensex
fallen down in 2008.But Now at the date of 31 st Dec. 2009, the NAV of the
this Mutual fund is 40.050.
LIC Mutual Funds Balanced Funds

The inception date of LIC MF Balanced Fund is01-Aug-94 and in the year
2000 it reached to 18.78, in 2001 it decreases to 15.71. in 2005 it reached
to 27.02, after that in the year 2006 it touched to 42.75. in the year of 2008
it was 50.517, but in 2009 it goes a little down as 38.709.
Pru. ICICI Growth Plan (G)

July 09, 1998 the inception date of the this scheme after that in 1999 the
NAV goes to the 14.570 and in 2000 it goes to 32.630, but in 2001 it
decreases to the17.330, after a slow growth the NAV reached 44.270 in the
year of 2005. After that the scheme reached 103.220 in the year of 2008.
But it decreases in the year 2009 as 72.940.
LIC Mutual Funds Growth Fund (G)

01-Aug-94 inception date in 2000 it goes to the 4.970, and in the year 2002
it decreases to the 2.129 then started to increase and goes to 5.393 in the
year 2004 and 6.188 in 2005. In 2006 it goes to the 10.424, and in 2007 it
was 9.970, in the year 2008 it was 10.186 and then decreases to 6.593 in
the year of 2009.

~ 45 ~

Pru. ICICI Tax Plan (G)

Aug. 19 1999 the scheme was launched and in the next year it reached to
the 21.48 in the year of 2000, but it cant stay at the same place it slipped
in next year to the 10.33. In the year of the 2005 the NAV touched the
height as 47.37 and after that the NAV increases every year it went to 92.74
in the year of 2008, but it slipped to 56.88 in the year of the 2009.
LIC Mutual fund Tax Plan

01-Jan-97 launch date of this scheme. The NAV was 10.87 in the year of the
1999, in 2000 the NAV was 16.5. in 2001 it slipped to the 7.0, In Mar. 2005
the NAV was 16.484, in 2006 it reached to the 25.112. In the year 2007 the
NAV Increased 24.265.in 2008 it was 26.7 and in the year 2009 the NAV
slipped to 16.686.
ICICI Flexible Income

September 27, 2002 the inception date of the scheme in 2003 it reached
107.75, and in the year 2004 it reached to the 119.43 and increase year by
year. In the year 2008 the NAV reached to the 149.35. and lastly in the year
of the 2009 it reached to 162.970.
LIC Mutual fund opportunity fund

31-Jan-05 inception date of the mutual funds, in the same year the NAV fall
a little bit but in the next year the NAV cover the return and reached to
15.337. And in the year 2007 the NAV was 15.916, in the 2008 it reached to
the 17.558. The last year was not good for this scheme and the NAV slipped
to 10.866.
Pru. ICICI Index Fund Nifty plan (G)

The inception date is 15th Feb. 2002. The year 2003 was not good for this
scheme because the NAV was negative 8.328, but in one year it reached to
15.181, in 2005 it was 17.235. in the year 2006 it reached to 29.91,in the
year 2007 it was 34.037 and it reached a high NAV as 42.855. But in the
Year 2009 the NAV decreases to the 27.965.
LIC MF Index Fund - Nifty Plan (G)

~ 46 ~

14 Nov. 2002 when this scheme launched, in the year 2003 it go down to
8.438, and in the year 2004 it recovered and reached to 13.503, and the
year 2005 the NAV was 15.026. in the year 2006 it was 21.993, it increases
year by year and in the year 2008 it was 27.744, in the year 2009 the NAV
was 17.252.

Performance
Evaluation of
Mutual funds

~ 47 ~

Performance evaluation tools of Mutual funds

The tool according to me, which is relevant in the Indian scenario to

evaluate the performance of the mutual funds is Comparison of returns
Comparison of Returns:We all are always interested in discovering of the performance of the mutual
funds, whether the management of the mutual funds is performing well, that
is, has management done better through his selective buying and selling of
securities that would have been achieved through merely buying the
market picking up a large no of securities randomly and holding them
throughout the period?
One of the most popular of measuring management performance is by
comparing the yield of managed portfolio with the market or with the
random portfolio. The portfolio yields formula parallels the holding period
yield,
Formula for stocks that is presented as
{(NAVT + D t)/NAVt-1}-1
Where,
NAV t
= Per share net asset value at the end of the year t.
Dt
= the total of all distribution both income and capital
Gain per share during the year.
NAV = Per share net asset value at the end of previous year.

~ 48 ~

It is clear that by concede ration of returns or yields alone, mutual

funds on the average have well between the Sensex. In spite of negative
returns of the sensex, the returns for the mutual funds are positive one.
First if the managed portfolio did better than the unmanaged portfolio, the
investor in the mutual funds should not rejoice too soon. He has to pay the
management fee as well as suffer a reduction in equity equal to the loading
charges (in the case of a load fund). So, he must incurred by purchasing a
mutual funds rather than purchasing a diversified portfolio on his own and
paying the commission.
Second, the investor must determine the relative riskiness of the portfolio
under analysis. The managed portfolio could have achieved higher returns
than the markets or an unmanaged portfolio by taking on considerably more
risk investments.
It is not surprising under such circumstances for higher return to
occur, for higher returns should go along with the higher risks.
Since the differential returns earned by a manager may be due to
difference in the exposure to risk forms that of the index or typical manager,
there would be merit in the attempting to adjust the return for any
difference in risk exposure.
Comparison of return of Ten Mutual Fund
Name

1 Year

3 Year

5 Year

Since
Inception

Pru. ICICI Balanced Fund (G)

65.3%

24.2%

98.7%

303.7%

LIC MF Balanced Fund (G)

42.4%

29.5%

88.8%`

147.2%

Pru. ICICI Growth Plan (G)

87.4%

41.6%

158.4%

1030.7%

LIC MF Growth Fund (G)

108.1%

23.8%

81.5%

204%

Pru. ICICI Tax Plan (G)

156.7%

54.5%

152.4%

1156.5%

LIC MF Tax Plan (G)

79.5%

14.1%

56.1%

189.2%

Pru. ICICI Flexible income Plan (G)

5.2%

25.1%

40.5%

70%

LIC MF Opportunity Fund (G)

78.0%

12.9%

73.2%

73.2%

Pru. ICICI Index Fund Nifty plan (G)

93.4%

44.2%

156.7%

376.1%

Pru. LIC MF Index Fund Nifty Plan

(G)

87.4%

23.5%

101.7%

207.6%

~ 49 ~

As it can be seen from the above that all funds have given high return
in the last year. As the index goes to healthy the returns also rise.
The first objective is to compare the return given by two mutual funds
in comparison with the index and also to compare the relative returns given
by two mutual funds.
Name

1 Year

3 Year

5 Year

Since
Inception

Pru. ICICI Balanced Fund (G)

65.3%

24.2%

98.7%

303.7%

LIC MF Balanced Fund (G)

42.4%

29.5%

88.8%`

147.2%

Name

1 Year

3 Year

5 Year

Since
Inception

Pru. ICICI Balanced Fund (G)

65.3%

24.2%

98.7%

303.7%

LIC MF Balanced Fund (G)

42.4%

29.5%

88.8%`

147.2%

Pru. ICICI Growth Plan (G)

87.4%

41.6%

158.4%

1030.7%

LIC MF Growth Fund (G)

108.1%

23.8%

81.5%

204%

Pru. ICICI Tax Plan (G)

156.7%

54.5%

152.4%

1156.5%

LIC MF Tax Plan (G)

79.5%

14.1%

56.1%

189.2%

Pru. ICICI Flexible income Plan (G)

5.2%

25.1%

40.5%

70%

LIC MF Opportunity Fund (G)

78.0%

12.9%

73.2%

73.2%

Pru. ICICI Index Fund Nifty plan (G)

93.4%

44.2%

156.7%

376.1%

~ 50 ~

Pru. LIC MF Index Fund Nifty Plan

(G)

87.4%

23.5%

101.7%

207.6%

It can be seen from the above that all the funds out perform the sensexby wide
margin over a long period of time.
As we are seing that ICICI Balnced fund is better in the First year than the LIC
balanced Fun, But in 3rd year it is less than the LicBalncedfund , in 5 th Year it is
highest.
Pru. ICICI Growth Fund was a lower performer than the LIC growth fund but in
3 and 5th year the ICICI Growth fund performed very well.
rd

Pru. ICICI Tax plan was performed very well in the comparison of the LIC Tax
plan in all the comparison as you are seeing in the above table that in 1 st , 3rd , 5th
the ICICI tax Plan is best.
Pru. ICICI Flexible income if you will compare with LIC Opportunity fund only
in the 3rd year the ICICI flexible income is better than the LIC Opportunity fund and
in the 1st and in the 5th year it is lower than the LIC opportunity fund.
ICICI Index fund is better performer in the 1 st year 3rd year, and 5th year than
the LIC Index Fund.

Name

1 Year

3 Year

5 Year

Since
Inception

Pru. ICICI Balanced Fund (G)

65.3%

24.2%

98.7%

303.7%

LIC MF Balanced Fund (G)

42.4%

29.5%

88.8%`

147.2%

Pru. ICICI Growth Plan (G)

87.4%

41.6%

158.4%

1030.7%

LIC MF Growth Fund (G)

108.1%

23.8%

81.5%

204%

Pru. ICICI Tax Plan (G)

156.7%

54.5%

152.4%

1156.5%

LIC MF Tax Plan (G)

79.5%

14.1%

56.1%

189.2%

Pru. ICICI Flexible income Plan (G)

5.2%

25.1%

40.5%

70%

LIC MF Opportunity Fund (G)

78.0%

12.9%

73.2%

73.2%

~ 51 ~

Pru. ICICI Index Fund Nifty plan (G)

93.4%

44.2%

156.7%

376.1%

LIC MF Index Fund Nifty Plan (G)

87.4%

23.5%

101.7%

207.6%

Hypothesis
testing
~ 52 ~

Hypothesis testing-1

Hypothesis testing-1

Navs
Perio
d

ICICI
Bal.

LIC
Bal.

ICICI
Grow.

LIC
Grow
.

ICICI
Tax.

LIC
Tax.

~ 53 ~

ICICI
Flex.

LIC
Oppor
t.

ICICI
Index

LIC
Index

Mar.0
7

33.56
0

42.06
8

89.180

9.970

82.500

24.26
5

137.38
0

15.91
6

34.0
37

23.39
7

Mar.0
8

37.28
0

50.51
7

103.22
0

10.186

92.740

26.70
0

149.35
0

17.55
8

42.6
55

27.74
4

Mar.0
9

26.38
0

38.70
9

72.940

6.593

56.880

16.68
6

162.97
0

10.86
6

27.9
65

17.25
2

Mar.1
0

40.37
0

52.99
0

120.65
0

11.885

125.65
0

26.89
9

170.66
2

17.32
1

46.8
51

28.02
2

All the Funds selected for the analysis well performed.

ICICI Flexible income is the best among all the funds.
Hence this hypothesis accepted.

Hypothesis Testing- 2
To prove the second hypothesis that more transparent the portfolio, more are the
returns and public confidence in terms of mobilization of funds, I took structured
interview of people (Sample size 50) who invest regularly in mutual funds.
(Is given in ,Annexure A)

I found that majority of them used to look up to UTI of meeting their

investment needs in mutual funds. In last three years, simce the debacle suffered

~ 54 ~

by UTI in 1998 particularly in its largest and most popular scheme UTI-64 people
have lost the faith in the UTI . Now after the latest episode Involving UTI where lack
of transparency regarding its disclosure of portfolio. UTI has lost trust of people so
much that many people have taken a view to never invest in any scheme in UTI.
It is my surprise many people are aware of private mutual funds Specially
ICICI Mutual funds and LIC Mutual funds. People who have invested in the ICICI
and LIC they are very happy according to their transparency and performance.
Both these funds give very high quality of services with regard to sending
transaction statement, repurchase facility on any working day. Both these funds are
very transparent with regard to disclosure of their portfolios, sending newsletter to
its holders on quarterly basis. Information about NAVs are available 24 hours on
partial usual funs companies. It can be said that people feel confident while invest
both these mutual funds.

As to the performance of both LIC and ICICI both performed very well in the last
one year. But if you will see in the last three year and five years the performance
was up and down but at the average it was good.
Hence this hypothesis is accepted.

Name

1 Year

3 Year

5 Year

Since
Inception

Pru. ICICI Balanced Fund (G)

65.3%

24.2%

98.7%

303.7%

LIC MF Balanced Fund (G)

42.4%

29.5%

88.8%`

147.2%

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Pru. ICICI Growth Plan (G)

87.4%

41.6%

158.4%

1030.7%

LIC MF Growth Fund (G)

108.1%

23.8%

81.5%

204%

Pru. ICICI Tax Plan (G)

156.7%

54.5%

152.4%

1156.5%

LIC MF Tax Plan (G)

79.5%

14.1%

56.1%

189.2%

Pru. ICICI Flexible income Plan (G)

5.2%

25.1%

40.5%

70%

LIC MF Opportunity Fund (G)

78.0%

12.9%

73.2%

73.2%

Pru. ICICI Index Fund Nifty plan (G)

93.4%

44.2%

156.7%

376.1%

LIC MF Index Fund Nifty Plan (G)

87.4%

23.5%

101.7%

207.6%

Hypothesis Testing-3

To prove this hypothesis three schemes of each LIC and ICICI Mutual funds
were taken.
All schemes of ICICI Have performed well by a wide margin over a three year
periods however in the last one year, schemes of ICICI mutual funds performed
very well. As the sensex grow. As mutual funds are for long term investment, it can
be said that scheme of LIC has underperformed.

~ 56 ~

On the other hand in comparison of schemes of LIC and ICICI Prudential, ICICI
has performed well than the LIC Mutual funds. You can see that the Mutual funds of
the ICICI is well performer than the LIC Mutual funds in the 1 st year, in 3rd Year, in 5th
Year also.
Hence this hypothesis is accepted

~ 57 ~

Future scope
And
Limitation

Future scope and limitations

Future Scope:This project is specifying to equity scheme of Pru. ICICI fund and LIC MF
which are similar in nature. Further it can be done to similar scheme of other
mutual funds.
The tool, which I have adapted to evaluate the performance of mutual funds,
the comparison of actual returns method, but other theoretical methods, can be
adapt to evaluate the returns.

~ 58 ~

Limitations:The most important limitation that is very apparent is that I has adapted
only comparison of Return method for evaluating the performance of mutual funds,
while there are theoretical methods for evaluating the performance for mutual
funds. In our country, people always look for actual returns, which they are actually
going to get.
Other limitation is that the project is restricted to only five schemes of both
the mutual funds where it can be extended to other schemes of both these mutual
funds and also extended to other mutual funds.

Conclusion
And
Recommendation
~ 59 ~

Conclusion and recommendations:After a study that I have made, I come to conclusion that all the diversified
funds that I have selected for study have giving high returns in last one year and in
some cases to to the that they were normally performed as the sensex was
performing, some time what happen that the NAV s went down of the face value
because of the sensex as we can say recession was the main cause due to which
2006 to 2008 themutual funds of both companies were restricted to grow or they
were underperforming.

~ 60 ~

The mutual funds of both the companies gave a highest return from the
periods of the Mar. 2000 till the 2006, in between this period the return was very
good of both companies and from the 2006 to 2008 both the companies were
underperforming, and from the starting of the 2009 the return and NAV,s of both
the companies were classical.

It can be seen that all these funds have performed very well but the
comparison of LIC with ICICI both are very different in the status, some
funds of the ICICI is equal to the LIC Funds and mostly they have very high
NAVs than the LIC Mutual funds.
But both companies are performing well according to their Funds.

~ 61 ~

Bibliography

Bibliography:-

Books
1. Investment management

~ 62 ~

2. (V.K. Bhalla)
3. 2. Banking theory, law & practices
4.

(Gorden & Natrajan)

5. 3. Insurance & risk management

6.

(Dr. P.K. Gupta)

Internet sites
1. www.lic.com
2. www.iciciprulife.com
3. www.google.com
4. Onlineindia.com
5. Valuesearchonlin.com
6. Moneycontrol.com
News Papers
1. The Economic Times of India

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