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“MUTUAL FUND”

A
PROJECT REPORT
ON
ANALYSIS OF TOP 5 MUTUAL FUNDS

SUBMITTED TO:- SUBMITTED BY:-


Prof. Vandana Balyan Deepti Singh
Prerna Shukla
Neetam
Kirti Ahuja
Jiney Sachan
Section-A
ACKNOWLEDGEMENT

The successful completion of this Project may not have been possible, if not the

kind assistance of our team members and many people who through their good-

heart and knowledge supported a long way. We wish to pay our gratitude to Prof.

vandana balyan, our faculty of Financial Management for giving us the

opportunity of undertaking this Project where we got a chance to apply our

classroom‘s learning, which lead to a successful completion of the Project and it

will also help us to achieve our goals in long way.


Executive summary
The Indian mutual fund industry in recent years has exponential growth and yet it
is still at a very nascent stage. We believe that the mutual fund industry has grown
in terms of size or choices available, but is a long distance from being regarded as
a mature one. To understand this one has to look at the global scenario. If one look
at the global mutual fund industry, one has see that assets have grown by 185%
between 2000 and 2009. In comparison, Indian assets outgrew at a staggering
446%, where as the US only grew by 158% and Europe by 242%.

As our economy continues to grow at a spectacular rate there is a huge amount of


wealth creating opportunities surfacing everywhere. Financial Planners have an
immensely responsible role to play by identifying these opportunities and
channeling them into wealth creating initiatives that would enable people to
address their financial needs.

To give an overview of a recent study conducted by Invest India, there are about
321.8 millions paid workers in India. Of this only 5.3 millions have an exposure to
mutual funds. This is less than 2% of total work force.

Even more interesting fact is that 77% of them reside in super metros and Tier I
cities. Again, about 4 millions come in the Rs. 90,000-5 lakh income bracket. The
penetration among the less than Rs. 90,000 and more than Rs 5 lack income
bracket is very low. The need for the hour is to expand the market boundaries and
expand scope in Tier II and Tier III cities.
India is also one of the fastest growing markets for mutual funds, attracting a host
of global players. Hence, investors will have an even wider range of products to
choose from. The combination of the increase in number of fund houses along with
new schemes and the increase in the number of people parking their saving in
mutual funds has resulted in per cent during April-December 2009.
This now stands at Rs 30314 billions as against Rs. 13476 billions for the
corresponding period last year.
We already have many experts expressing their concentration at the frequency of
NFO launches. Yet we have less than 1000 schemes in India, compared to 15000
in the US and 36000 in Europe. The gap is significant and has to be filled up with
unique and better priced products.
There has also been a rapid rise in the HNI segment. India stands only second-best
to Korea in the Asia- Pacific region in terms of percentage growth. The total HNI
(High Net Worth Individual) assets stood at about Rs 12 trillion and their assets are
distributed over various assets classes.
To top them MFs will have to come up with structured products, real estate funds,
commodity based funds, art funds and the like.

Indian house holds have also increased their exposure to the capital market. Very
interestingly, the Mutual fund proportion in this has increased.

In fact, there has been more than 2000% growth in the assets coming to MFs in the
last 3 years. Statistics reveal that a higher portion of investors’ savings is now
invested in market-linked avenues like mutual funds as compared to earlier times.

Passing through the growth phase


We have always read that fund industry has seen three phases – the UTI phase, the
public sector phase and the post – UTI phase. But if we study a bit more closely,
there have been four clear stages.
- UTI Phase (1964 – 1987)

- Public sector phase (1987 – 1993), during which the likes of SBI,BOB and
Canara Bank comes into existence

- The emergence phase (1993 – 2003), when international players come in to


India. Some have wound up their operations and a few of them are looking
for re-entry.

- Post UTI phase (2003 – 2009), when domestic players along with some
global players have consolidated the MF industry.

And now we are entering Phase V of the industry, when not only are newer players
readying to enter the market but are also looking at penetration and market
expansion. All in all, this is a win-win situation for Indian investors. We have also
come up a long way from plain vanilla equity funds to hybrid funds, from balanced
funds to arbitrage funds, from sectoral funds to quant strategies.

Changing investor profile


Today’s investor is quite young and very unlike the older generation. He follows a
contrarian’s approach. He buys when the market flips and books profit when it
rallies.
The retail participation in equity schemes has also increased tremendously.
Although many complain that the industry is still brokerage driven, the trends
clearly suggest that investors prefer NFOs to enter equities.
Our economy is booming, we have now a sustained GDP growth of 8%, which is
likely to remain at this level for years to come.
The number of AMCs is increasing. Their presence across India is expanding.
Distributors too are expanding their networks. Besides, the regulator has taken up
measures to safeguard investor interests. These are all drivers for the fund industry.
Together, these greet investor warmly.
The need of the investor populace has changed, resulting in a change in asset
management styles. In this way, this is leading to the design of new and
competitively-priced products, implying greater emphasis on higher quality of
intermediation. This in itself is both an opportunity and a challenge.
As our economy continuous to grow at a spectacular rate there is a huge amount of
wealth creating opportunities surfacing everywhere.
Financial Planners have an immensely responsible role to play by identifying these
opportunities and channeling them into wealth creating initiatives that would
enable people to adequately address their financial needs.

MUTUAL FUND
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 offer
document.
Investments in securities are spread across a wide cross-section of industries and
sectors and thus the risk is reduced. Diversification reduces the risk because all
stocks may not move in the same direction in the same proportion at the same time.

Mutual fund issues units to the investors in accordance with quantum of money
invested by them. Investors of mutual funds are known as unit holders.

The profits or losses are shared by the investors in proportion to their investments.
The mutual funds normally come out with a number of schemes with different
investment objectives which are launched from time to time.

A mutual fund is required to be registered with Securities and Exchange Board


of India (SEBI) which regulates securities markets before it can collect funds from
the public.
HISTORY OF MUTUAL FUNDS AND ROLE OF SEBI IN INDIA:-

Unit Trust of India was the first mutual fund set up in India in the year 1963. In
early 1990s, Government allowed public sector banks and institutions to set up
mutual funds.

In the year 1992, Securities and exchange Board of India (SEBI) Act was passed.

The objectives of SEBI are – to protect the interest of investors in securities and to
promote the development of and to regulate the securities market.

SEBI formulates policies and regulates the mutual funds to protect the interest of
the investors. SEBI notified regulations for the mutual funds in 1993. Thereafter,
mutual funds sponsored by private sector entities were allowed to enter the capital
market.

The regulations were fully revised in 1996 and have been amended thereafter from
time to time. SEBI has also issued guidelines to the mutual funds from time to
time to protect the interests of investors.

All mutual funds whether promoted by public sector or private sector entities
including those promoted by foreign entities are governed by the same set of
Regulations. There is no distinction in regulatory requirements for these mutual
funds and all are subject to monitoring and inspections by SEBI.

The Evolution

The formation of Unit Trust of India marked the evolution of the Indian mutual
fund industry in the year 1963. The primary objective at that time was to attract the
small investors and it was made possible through the collective efforts of the
Government of India and the Reserve Bank of India. The history of mutual fund
industry in India can be better understood divided into following phases:
Phase 1. Establishment and Growth of Unit Trust of India - 1964-87

Unit Trust of India enjoyed complete monopoly when it was established in the year
1963 by an act of Parliament. UTI was set up by the Reserve Bank of India and it
continued to operate under the regulatory control of the RBI until the two were de-
linked in 1978 and the entire control was transferred in the hands of Industrial
Development Bank of India (IDBI). UTI launched its first scheme in 1964, named
as Unit Scheme 1964 (US-64), which attracted the largest number of investors in
any single investment scheme over the years.

UTI launched more innovative schemes in 1970s and 80s to suit the needs of
different investors. It launched ULIP in 1971, six more schemes between 1981-84,
Children's Gift Growth Fund and India Fund (India's first offshore fund) in 1986,
Master share (India’s first equity diversified scheme) in 1987 and Monthly Income
Schemes (offering assured returns) during 1990s. By the end of 1987, UTI's assets
under management grew ten times to Rs 6700 crores.

Phase II. Entry of Public Sector Funds - 1987-1993 The Indian mutual fund
industry witnessed a number of public sector players entering the market in the
year 1987. In November 1987, SBI Mutual Fund from the State Bank of India
became the first non-UTI mutual fund in India. SBI Mutual Fund was later
followed by Canbank Mutual Fund, LIC Mutual Fund, Indian Bank Mutual Fund,
Bank of India Mutual Fund, GIC Mutual Fund and PNB Mutual Fund. By 1993,
the assets under management of the industry increased seven times to Rs. 47,004
Mobilisation
Amount Assets Under as % of gross
1992-93
Mobilised Management Domestic
Savings
UTI 11,057 38,247 5.2%
Public
1,964 8,757 0.9%
Sector
Total 13,021 47,004 6.1%
crores. However, UTI remained to be the leader with about 80% market share.
Phase III. Emergence of Private Sector Funds - 1993-96

The permission given to private sector funds including foreign fund management
companies (most of them entering through joint ventures with Indian promoters) to
enter the mutal fund industry in 1993, provided a wide range of choice to investors
and more competition in the industry. Private funds introduced innovative
products, investment techniques and investor-servicing technology. By 1994-95,
about 11 private sector funds had launched their schemes.

Phase IV. Growth and SEBI Regulation - 1996-2004


The mutual fund industry witnessed robust growth and stricter regulation from the
SEBI after the year 1996. The mobilization of funds and the number of players
operating in the industry reached new heights as investors started showing more
interest in mutual funds.
Inventors’ interests were safeguarded by SEBI and the Government offered tax
benefits to the investors in order to encourage them. SEBI (Mutual Funds)
Regulations, 1996 was introduced by SEBI that set uniform standards for all
mutual funds in India.
The Union Budget in 1999 exempted all dividend incomes in the hands of
investors from income tax. Various Investor Awareness Programmes were
launched during this phase, both by SEBI and AMFI, with an objective to educate
investors and make them informed about the mutual fund industry.

In February 2003, the UTI Act was repealed and UTI was stripped of its Special
legal status as a trust formed by an Act of Parliament. The primary objective
behind this was to bring all mutual fund players on the same level. UTI was re-
organized into two parts: 1. The Specified Undertaking, 2. The UTI Mutual Fund.

Phase V. Growth and Consolidation - 2004 Onwards


The industry has also witnessed several mergers and acquisitions recently, ex: of
which are acquisition of schemes of Alliance Mutual Fund by Birla Sun Life, Sun
F&C Mutual Fund and PNB Mutual Fund by Principal Mutual Fund.
Simultaneously, more international mutual fund players have entered India like
Fidelity, Franklin Templeton Mutual Fund etc. This is a continuing phase of
growth of the industry through consolidation and entry of new international and
private sector players.
HOW IS A MUTUAL FUND SET UP?
A mutual fund is set up in the form of a trust, which has sponsor, trustees, asset
management company (AMC) and custodian.

The trust is established by a sponsor or more than one sponsor who is like
promoter of a company. The trustees of the mutual fund hold its property for the
benefit of the unit holders.

Asset Management Company (AMC) approved by SEBI manages the funds by


making investments in various types of securities.

Custodian, who is registered with SEBI, holds the securities of various schemes of
the fund in its custody. The trustees are vested with the general power of
superintendence and direction over AMC. They monitor the performance and
compliance of SEBI Regulations by the mutual fund.

SEBI Regulations 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 funds are required to be registered with SEBI before they
launch any scheme.
TYPES OF MUTUAL FUNDS SCHEMES IN INDIA:-
Open-ended Fund/ Scheme

An open-ended fund or scheme is one that is available for subscription and


repurchase on a continuous basis. These schemes do not have a fixed maturity
period. Investors can conveniently buy and sell units at Net Asset Value (NAV)
related prices which are declared on a daily basis. The key feature of open-end
schemes is liquidity.

Close-ended Fund/ Scheme

A close-ended fund or scheme has a stipulated maturity period e.g. 5-7 years. The
fund is open for subscription only during a specified period at the time of launch of
the scheme. Investors can invest in the scheme at the time of the initial public issue
and thereafter they can buy or sell the units of the scheme on the stock exchanges
where the units are listed. In order to provide an exit route to the investors, some
close-ended funds give an option of selling back the units to the mutual fund
through periodic repurchase at NAV related prices. SEBI Regulations stipulate that
at least one of the two exit routes is provided to the investor i.e. either repurchase
facility or through listing on stock exchanges. These mutual funds schemes
disclose NAV generally on weekly basis.

Growth / Equity Oriented Scheme

The aim of growth funds is to provide capital appreciation over the medium to
long- term. Such schemes normally invest a major part of their corpus in equities.
Such funds have comparatively high risks. These schemes provide different
options to the investors like dividend option, capital appreciation, etc. and the
investors may choose an option depending on their preferences. The investors must
indicate the option in the application form. The mutual funds also allow the
investors to change the options at a later date. Growth schemes are good for
investors having a long-term outlook seeking appreciation over a period of time.
Income / Debt Oriented Scheme

The aim of income funds is to provide regular and steady income to investors.
Such schemes generally invest in fixed income securities such as bonds, corporate
debentures, Government securities and money market instruments. Such funds are
less risky compared to equity schemes. These funds are not affected because of
fluctuations in equity markets. However, opportunities of capital appreciation are
also limited in such funds. The NAVs of such funds are affected because of change
in interest rates in the country. If the interest rates fall, NAVs of such funds are
likely to increase in the short run and vice versa. However, long term investors
may not bother about these fluctuations.

Balanced Fund

The aim of balanced funds is to provide both growth and regular income as such
schemes invest both in equities and fixed income securities in the proportion
indicated in their offer documents. These are appropriate for investors looking for
moderate growth. They generally invest 40-60% in equity and debt instruments.
These funds are also affected because of fluctuations in share prices in the stock
markets. However, NAVs of such funds are likely to be less volatile compared to
pure equity funds.

Money Market or Liquid Fund

These funds are also income funds and their aim is to provide easy liquidity,
preservation of capital and moderate income. These schemes invest exclusively in
safer short-term instruments such as treasury bills, certificates of deposit,
commercial paper and inter-bank call money, government securities, etc. Returns
on these schemes fluctuate much less compared to other funds. These funds are
appropriate for corporate and individual investors as a means to park their surplus
funds for short periods.
Gilt Fund

These funds invest exclusively in government securities. Government securities


have no default risk. NAVs of these schemes also fluctuate due to change in
interest rates and other economic factors as is the case with income or debt
oriented schemes.

Index Funds

Index Funds replicate the portfolio of a particular index such as the BSE Sensitive
index, S&P NSE 50 index (Nifty), etc. These schemes invest in the securities in the
same weightage comprising of an index. NAVs of such schemes would rise or fall
in accordance with the rise or fall in the index, though not exactly by the same
percentage due to some factors known as "tracking error" in technical terms.
Necessary disclosures in this regard are made in the offer document of the mutual
fund scheme.

TYPES OF RETURN:

There are three ways, where the total returns provided by mutual funds can be
enjoyed by investors:
• Income is earned from dividend 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 a distribution.

• If fund holdings increase in price but are not sold by the fund manager, the
fund’s share increase in price.You can then sell your mutual fund shares for
a profit. Funds will also give you a choice either to receive a check for
distributions or to reinvest the earnings and get more shares.
HOW TO INVEST IN A MUTUAL FUND:-

Mutual funds normally come out with an advertisement in newspapers publishing


the date of launch of the new schemes.

Investors can also contact the agents and distributors of mutual funds who are
spread all over the country for necessary information and application forms. Forms
can be deposited with mutual funds through the agents and distributors who
provide such services.

Now a days, the post offices and banks also distribute the units of mutual funds.
However, the investors may please note that the mutual funds schemes being
marketed by banks and post offices should not be taken as their own schemes and
no assurance of returns is given by them. The only role of banks and post offices is
to help in distribution of mutual funds schemes to the investors.

Investors should not be carried away by commission/gifts given by


agents/distributors for investing in a particular scheme. On the other hand they
must consider the track record of the mutual fund and should take objective
decisions.
PROCEDURE FOR REGISTERING A MUTUAL FUND
WITH SEBI:-
An applicant proposing to sponsor a mutual fund in India must submit an
application in Form A along with a fee of Rs.25,000.

The application is examined and once the sponsor satisfies certain conditions such
as being in the financial services business and possessing positive net worth for the
last five years, having net profit in three out of the last five years and possessing
the general reputation of fairness and integrity in all business transactions, it is
required to complete the remaining formalities for setting up a mutual fund.

These include inter alia, executing the trust deed and investment management
agreement, setting up a trustee company/board of trustees comprising two- thirds
independent trustees, incorporating the asset management company (AMC),
contributing to at least 40% of the net worth of the AMC and appointing a
custodian. Upon satisfying these conditions, the registration certificate is issued
subject to the payment of registration fees of Rs.25.00 lacs.
MUTUAL FUNDS- [terms]
1. NAV: Net Asset Value is the market value of the asset of the scheme minus
its liabilities. The per unit NAV is the net asset value of the scheme divided
by the no. of the units outstanding on the valuation date.

2. SALE PRICE: is the price you pay when you invet in a scheme, also called
offer price. It may include a sales load.

3. REPURCHASE PRICE: is the price at which a close ended schemes


repurchase their units and close ended schemes redeem their units on
maturity.

4. SALES LOAD: is a charge collected by a scheme when it sells the units,


also called front end load.

5. BACK END LOAD: is a charge collected by a scheme when it buys back


the units from the unit holders.
RESEARCH METHODOLOGY

NEED FOR THE STUDY:

The main purpose of doing this project was to know about mutual fund and its
functioning. This helps to know in details about mutual fund industry right from its
inception stage, growth and future prospects.
It also helps in understanding different schemes of mutual funds.

SCOPE OF THE STUDY:

The scope is limited to some prominent mutual funds in the mutual fund industry.
We analyzed the top 5 mutual funds in India.

OBJECTIVE:

• To give a brief idea about the benefits available from Mutual Fund investment
• To give an idea of the types of schemes available.
• To discuss about the market trends of Mutual Fund investment.
• To study some of the mutual fund schemes and analyse them.

METHODOLOGY:
To achieve the objective of studying the mutual funds data has been collected.
Research methodology carried for this study is:
1. Secondary
The secondary information is mostly taken from websites, books, journals, etc.

Limitations

• The time constraint was one of the major problems.


• The study is limited to the different schemes available under the mutual funds
selected.
• The lack of information sources for the analysis part.
TOP FIVE MUTUAL FUNDS:
1. BIRLA SUNLIFE MUTUAL FUND

BIRLA SUNLIFE ADVANTAGE FUND-GROWTH


BIRLA SUNLIFE ADVANTAGE FUND is a diversified equity fund enabling
investors to capitalize on the immense growth opportunities provided by the
stock market while at the same time minimizing the risk.
Launched in feb 24,1995, the fund is an open ended growth scheme
with a LARGE CAP theme.

OBJECTIVE:
Aims to achieve long term growth of capital at relatively
moderate levels of risk through a diversified research based investment
approach.

FUND FEATURES:
Type of scheme OPEN ENDED
Nature EQUITY
Option GROWTH
Inception date FEB 24-1995
Face Value(rs/unit) 10
Fund size in (rs crore) 405.44 as on dec 30,09
Minimum investment(rs) 5000/-
Purchase redemption Daily
Nav Daily
Entry load 0%
Exit load If redeemed between
0 days to 7 days exit load is 0.5%
Mutual fund
Birla sun life mutual fund
Ahura centre,2nd floor,A.96/A-D,
Mahakali caves road,andheri(E)
Mumbai
Tel:-56928000

Asset management company


Birla Sun Life Asset Management Company Ltd.
One India bulls centre ,tower 1, 17thflr
841,senapati bapatmarg, Elphinstone road
Mumbai-400013

Registrar:
Computer Age Management Services Private Limited
A&B, Lakshmi Bhavan
609, Anna salai
Chennai

NAV

Latest NAV 140.55 as on feb.2010


52 week high 150.76 as on dec.2009
52 week low 66.01 as on mar.2009

RISK AND RETURN


Scheme performance as on dec.2009
1 month 3 month 6 month 1 year 3 year 5 year Since
inception
-1.18 2.22 22.41 77.10 6.04 18.90 20.40
ASSET ALLOCATION:

EQUITY DEBT CASH &


EQUIVALENT
96.62 0.0 3.38

EQUITY

DEBT

CASH &
EQUIVALENT

2. FRANKLIN ASIAN EQUITY FUND – GROWTH


OBJECTIVE: An open-end diversified equity fund that seeks to provide
medium to long term appreciation through investments primarily in Asian
companies/Sectors (excluding Japan) with long term potential across market
capitalization.

FUND FEATURES:
Type of scheme Open-ended
Nature Equity
Option Growth
Inception date Jan 16’2008
Face value(rs./unit) 10
Fund size(rs./crore) 416.45 as on dec’2009
Minimum investment(rs.) 5000/-
Purchase redemption Daily
NAV Daily
Entry load 0%
Exit load If redeemed between 0
Yr to 1 yr exit load is
1%

MUTUAL FUNDS

Franklin Templeton Mutual Fund


Level 4, Wockhardt Towers
Bandra Kurla Complex, Bandra(East)
Mumbai
Tel.-67519100

Asset Management Company

Franklin Templeton Asset Management(India)Pvt.Ltd


Wockhardt Towers, 4 floor,
Bandra Kurla Complex
Mumbai
Tel.-67519100
Registrar
Franklin Templeton Asset Management(India)Pvt.Ltd
Franklin Templeton centre, no.7
3rd cross street, Adyar
Chennai
Tel.-24407000

NAV
Latest NAV 9.6 as per feb’2010
52 week high 10.29 as per dec’2009
52 week low 6.23 as on mar 9’2009

RISK AND RETURN


Scheme performances as on dec’ 2009
1month 3month 6month 1 year 3 year 5 year Since
inception

-0.61 -0.54 17.28 46.57 NA NA 0.32

ASSET ALLOCATION
EQUITY DEBT CASH & EQUIVALENT
95.52 0.0 4.48

EQUITY

DEBT

CASH &
EQUIVALENT
2. ING CORE EQUITY FUND – GROWTH

OBJECTIVE: Seeks to provide long term capital appreciation by investing pre-


dominantly in a portfolio of high quality equity and equity related securities.

FUND FEATURES:
Type of scheme Open- ended
Nature Equity
Option Growth
Inception date May 6,1999
Face value(rs/unit) 10
Fund size in (rs/crore) 58.44 as on dec,2009
Minimum investment(rs) 5000/-
Purchase redemption Daily
NAV Daily
Entry load 0%
Exit load If redeemed between 0
Days to 365 days exit
Load is 1%

MUTUAL FUND

ING Mutual Fund


101 Winsor,
1st floor, C.S.T. Road , Santacruz E
Mumbai
Tel.-39827999

Asset management company


ING investment management(India) Pvt Ltd
601/602, “Windsor”, CST road,
Kalina, Santacruz E
Mumbai-400098

REGISTRAR
Computer Age Management Services Private Limited
A&B, Lakhsmi Bhavan
609,Anna Salai
Chennai

NAV

Latest NAV 33.14 as per feb’2010


52 week high 33.97 as per dec’2009
52 week low 16.48 as on mar 9’2009

RISK AND RETURN


Scheme performances as on dec’ 2009
1month 3month 6month 1 year 3 year 5 year Since
inception

1.09 3.51 21.97 69.34 7.74 21.51 11.99

ASSET ALLOCATION
EQUITY DEBT CASH & EQUIVALENT
92.98 0.0 7.02

EQUITY

DEBT

CASH &
EQUIVALENT
4. MORGAN STANLEY A.C.E FUND- GROWTH

OBJECTIVE:
The investment objective of the scheme is to generate long term capital growth
from an actively managed portfolio of equity and equity related securities
including equity derivatives.

FUND FEATURES:
Type of scheme Open- ended
Nature Equity
Option Growth
Inception date Apr3,2008
Face value(rs/unit) 10
Fund size in (rs/crore) 131.67 as on dec,2009
Minimum investment(rs) 5000/-
Purchase redemption Daily
NAV Daily
Entry load 0%
Exit load If redeemed between 0
Days to 365 days exit
Load is 1%

MUTUAL FUND

Morgan Stanley Mutual Fund


Forbes Building , 5th floor
Charnjit Rai Marg,
Mumbai
Tel.-22097045

Asset Management Company


Morgan Stanley Asset Management(1) Pvt.Ltd
Office No.201, 2nd floor,
DBS House, Prescott street, Fort,
Mumbai-400001
Tel.- 40779226
Registrar
Karvy Computershare Pvt.Ltd.
21,Avenue 4,
Street no.1, Banjara hills
Hydrabad

NAV

Latest NAV 12.72 as per feb’2010


52 week high 12.85 as per dec’2009
52 week low 5.29 as on mar 9’2009

RISK AND RETURN


Scheme performances as on dec’ 2009
1month 3month 6month 1 year 3 year 5 year Since
inception

1.53 11.05 37.49 93.84 NA NA 15.09

ASSET ALLOCATION
EQUITY DEBT CASH & EQUIVALENT
94.94 0.0 5.06

EQUITY

DEBT

CASH &
EQUIVALENT
5. RELIANCE MUTUAL FUND

OBJECTIVE: The primary investment objective of the scheme is to seek to


generate capital appreciation & provide long-term growth opportunities by
investing in a portfolio constituted or equity & equity related securities of top
100 companies by market capitalization and of companies which are available
in the derivatives segment from time to time and the secondary objective is to
generate consistent returns by investing in debt and money market securities.

FUND FEATURES:
Type of scheme Open- ended
Nature Equity
Option Growth
Inception date Mar.28,2006
Face value(rs/unit) 10
Fund size in (rs/crore) 2254.11 as on dec,2009
Minimum investment(rs) 5000/-
Purchase redemption Daily
NAV Daily
Entry load 0%
Exit load If redeemed between 0
Days to 365 days exit
Load is 1%

MUTUAL FUND

Reliance mutual fund


Kamla mills compound, Trade World,B- wing
7th floor, Senapati bapat marg, Lower parel(west)
Mumbai
Tel.-30414800

ASSET MANAGEMENT COMPANY


Reliance Capital Asset Management Ltd.
11th & 12th floor, One India bull centre, Tower 1
841, Senapati bapat marg
Mumbai Tel.-30414800
Registrar
Karvy Computershare Pvt.Ltd.
21,Avenue 4,
Street no.1, Banjara hills
Hydrabad

NAV

Latest NAV 14.80 as per feb,2010


52 week high 15.24 as per dec,2009
52 week low 8.21 as on mar 9,2009

RISK AND RETURN


Scheme performances as on dec’ 2009
1month 3month 6month 1 year 3 year 5 year Since
inception

-0.91 0.35 16.68 49.27 8.64 NA 11.09

ASSET ALLOCATION
EQUITY DEBT CASH & EQUIVALENT
87.20 0.0 12.80

EQUITY
DEBT
CASH & EQUIVALENT
FINDINGS

a. All funds are open ended, growth equity funds.


b. Fund size of RELIANCE MUTUAL FUND is maximum.
c. Minimum requirement of fund for investment in any of the scheme is
Rs.5000/-
d. NAV is calculated on daily basis.
e. Exit load of BIRLA SUNLIFE ADVANTAGE fund is very low 0.5% .
f. All funds are showing positive growth but BIRLA SUNLIFE is showing
negative growth.

On the basis of NAV:


g. NAV of Birla Sunlife fund has much fluctuation.
h. Reliance mutual fund has less fluctuation in NAV.

On the basis of risk and return:


Company 1 month 3month 6month 1year 3year 5year Since
inception

Birla sunlife -1.18 2.22 22.41 77.10 6.04 18.9 20.40


advantage
Franklin -0.61 -0.54 17.28 46.57 NA NA 0.32
Asian Equity
ING core 1.09 3.51 21.97 69.34 7.74 21.51 11.99
equity fund
Morgan 1.53 11.05 37.49 93.84 NA NA 15.09
Stanley A
Reliance -0.91 0.35 16.68 49.27 8.64 NA 11.09
Equity Fund
100

80
Birla sunlife
advantag
60 Franklin
asian equity
40 ING core
equity fund
Morgan
20 stanley
Reliance
equity fund
0
ar
th

th

n
th

-20
io
ye
on

on
on

pt
m

m
1m

ce
3

in
e
nc

3
si

a. For the 1st month performance of Birla sunlife advantage fund is much
lower -1.18, the best performance is of Morgan Stanley 1.53.
b. For the initial time period of 3 months the lowest performer is Franklin asian
equity -0.54, Morgan Stanley is still performing well as 11.05%.
c. The period of 1st year is of Morgan Stanley with 93.84% performance.
d. Since inception the best performer of the above mutual funds is Birla sunlife
mutual advantage.
e. From the graph it is clear that the best performer of mutual fund MORGAN
STANLEY.
f. The 2nd good performer is BIRLA SUNLIFE ADVANTAGE MUTUAL
FUND.
g. Franklin asian equity fund is the lowest performer of all.
On the basis of Asset allocation:
Company Birla Franklin ING core Morgan Reliance
sunlife asian equity Stanley equity
advantage equity fund fund
Equity 96.62 95.52 92.98 94.94 87.20
Debt 0.0 0.0 0.0 0.0 0.0
Cash & 3.37 4.48 7.02 5.06 12.80
Equivalent
100
80
60
40 Equity
Debt
20
Cash & Equivalent
0
Birla Franklin ING core Morgan Reliance
sunlife asian equity fund stanley equity fund
advantage equity

a. Mutual fund invests most of their investments in EQUITY.

b. There is no investment in DEBT.

c. Investment in cash & equivalent is very low.

ADVANTAGES OF MUTUAL FUND :


1. Portfolio diversification- Mutual Funds invest in a well-diversified portfolio of
securities which enables investor to hold a diversified investment portfolio
(whether the amount of investment is big or small).

2. Professional management- Fund manager undergoes through various research


works and has better investment management skills which ensure higher returns to
the investor than what he can manage on his own.

3. Less risk- Investors acquire a diversified portfolio of securities even with a


small investment in a Mutual Fund. The risk in a diversified portfolio is lesser than
investing in merely 2 or 3 securities.

4. Low transaction costs- Due to the economies of scale (benefits of larger


volumes), mutual funds pay lesser transaction costs. These benefits are passed on
to the investors.

5. Liquidity-An investor may not be able to sell some of the shares held by him
very easily and quickly, whereas units of a mutual fund are far more liquid.

6. Choice of schemes- Mutual funds provide investors with various schemes with
different investment objectives. Investors have the option of investing in a scheme
having a correlation between its investment objectives and their own financial
goals. These schemes further have different plans/options.

7. Transparency- Funds provide investors with updated information pertaining to


the markets and the schemes. All material facts are disclosed to investors as
required by the regulator.

8. Flexibility- Investors also benefit from the convenience and flexibility offered
by Mutual Funds. Investors can switch their holdings from a debt scheme to an
equity scheme and vice-versa. Option of systematic (at regular intervals)
investment and withdrawal is also offered to the investors in most open-end
schemes.

9. Safety- Mutual Fund industry is part of a well-regulated investment


environment where all funds are registered with SEBI and complete transparency
is forced.

Disadvantage of Investing Through Mutual Funds:


1. Costs Control Not in the Hands of an Investor- Investor has to pay investment
management fees and fund distribution costs as a percentage of the value of his
investments (as long as he holds the units), irrespective of the performance of the
fund.

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


a decision taken by the fund manager. Investors have no right to interfere in the
decision making process of a fund manager, which some investors find as a
constraint in achieving their financial objectives.

3. Difficulty in Selecting a Suitable Fund Scheme- Many investors find it


difficult to select one option from the plethora of funds/schemes/plans available.
For this, they may have to take advice from financial planners in order to invest in
the right fund to achieve their objectives.

CONCLUSION:
1. A mutual fund brings together a group of people and invests their money in
stocks, bonds, and other securities.
2. The advantages of mutuals are professional management, diversification,
economies sale, simplicity and liquidity.
3. The disadvantages of mutuals are high costs ,over-diversification, possible tax
consequences, and the inability of management to guarantee a superior return.
4. There are many, many types of mutual funds. You can classify funds based on
asset class, investing strategy, region, etc.
5. Mutual funds have lots of costs.
6. Costs can be broken down into ongoing fees and transaction fees.
7. The biggest problems with mutual funds are their costs and fees.
8. Mutual funds are easy to buy and sell. You can either buy them directly from the
fund company or through a third party.
9. Mutual fund ads can be very deceiving.

LIMITATIONS OF THE STUDY:


1. The study is restricted to secondary data only.

2. The time is the main constraints so limited period of time is spend on this
study.

3. Not possible to get whole information because of their business secret.

BIBLIOGRAPHY:
1. www.Mutualfundindia.com

2. www.birlasunlifemutualfund.com

3. www.franklinfunds.com

4. www.reliancemutualfund.com

5. www.morganstanleymutualfunds.com

6. www.Ingcorefunds.com