Comparative Analysis of Mutual Fund With India Infoline by Nikita Chinchane

A PROJECT REPORT
ON
“COMPARATIVE ANALYSIS OF MUTUAL FUND ON THE

BASIS OF ALPHA, BETA, AND STANDARD DEVIATION”
FOR
INDIA INFOLINE, PUNE
BY
NIKITA BHARAT CHINCHANE
MBA Semester III
Project Guide
Prof. VAISHAMPAYAN
In Partial Fulfillment of the Requirements of the

Two-Year Full-Time PGPM Programme
of the
SMVIM
(St. Mira Vishwakarma Institute Of Management)
Pune
AY: 2007-08
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ACKNOWLEDGEMENT
I take this opportunity to express my deepest gratitude to all those people, without
those spontaneous support, guidance, encouragement and understanding, this project
would never had reached completion.
It was my privilege to work with India Infoline Ltd. I am indebted to Kamlesh

Tiwari (Branch Manager), Chetan Singh Rajpurohit (Sales Manager) who acted as
philosopher and guide through all the stages of completion of the project.
Mere words of gratitude will never suffice to their valuable guidance, patience
and faith shown in my work.
I would also like to avail this opportunity to express my sincere thanks and
profound gratitude to my project guide Prof (Vaishamparan), whose valuable knowledge
and guidance have me complete this project successfully.
I acknowledge the timely help extended by all my colleagues and all the
unmentioned names from the concerned field.
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INDEX
Sr.No. TOPIC Page no.
1 EXECUTIVE SUMMARY 4
2 RESEARCH OBJECTIVE 4
3 SCOPE OF PROJECT 5
4 RESEARCH METHODOLGY 5
5 FINDINGS AND ANALYSIS 6
6 LIMITATIONS 6
7 ABOUT INDIA INFOLINE 7
8 INTRODUCTION OF MUTUAL FUND 12
9 COMPARISON OF MUTUAL FUND 37
10 CONCLUSION
11 BIBLIOGRAPHY
3
Executive Summary
The project has been carried out at “India Infoline Ltd” with the title
“Comparative Analysis of Mutual Fund on the basis of Alpha, Beta and Standard
Deviation”.
The main function of having analysis of Mutual fund is to pinpoint the strong
points and weaknesses of mutual fund schemes.
For this I have taken the following parameters:
Analyzing Mutual Fund using:-
1. Alpha: - I came to know how particulars Mutual Fund schemes performed related
to what it was expected to do.
2. Beta:- By comparing Mutual Fund on the basis of beta we come to know how
volatile a particular Mutual Fund as related to stock market is.
3. Standard Deviation:- The standard deviation of a fund measures this risk by

measuring the degree to which the fund fluctuates in relation to its mean return.
4. Schemes selected for project:-
• Equity Diversified
• Balanced Fund
• Debt fund
• Liquid fund
4
RESEARCH OBJECTIVE:
To evaluate investment performance of selected mutual funds in terms of risk and

return. Also to analyze the performance of mutual fund schemes on the basis of various
parameters. Primarily to understand the basic concepts of Mutual fund and its benefits as
an investment avenue.
Secondly, to compare and evaluate the performance of different schemes of mutual
fund companies on the basis of risk, return and volatility
SCOPE OF PROJECT:
The Schemes were categorized and selected on evaluating their performance and
relative risk. The scope of the project is mainly concentrated on the different categories
of the mutual funds such as equity schemes, debt funds, balanced funds and liquid fund.
RESEARCH METHODOLGY:
Research Methodology is a very organized and systematic medium through which

a particular case or problem can be solved. It is analytical, descriptive and quantitative
research where the comparison between the different mutual fund schemes is made on the
basis of risk, volatility and return.
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FINDINGS AND ANALYSIS:
The collection of information is based on the secondary probe. The information

has been collected through various books, and internet.
An attempt has been made to evaluate the performance of the selected mutual
fund schemes. Performance of mutual fund schemes has been evaluated by using the
following performance measures
(a) Risk
(b) Standard Deviation.
(c) Beta
LIMITATIONS:
To get an insight in the process of risk and return and deployment of funds by
fund manager is difficult.
The project is unable to analyse each and every scheme of mutual funds to create
awarness about risk and return. The risk and return of mutual fund schemes can
change according to the market conditions
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ABOUT THE COMPANY
INDIA INFOLINE:
INDIA INFOLINE is a one-stop financial services shop, most respected

for quality of its advice, personalized service and cutting-edge technology.
VISION is “to be the most respected company in the financial services space.”
India Infoline Ltd:
India Infoline Ltd is listed on both the leading stock exchanges in India, viz. the
Stock Exchange, Mumbai (BSE) and the National Stock Exchange (NSE). The India
Infoline group, comprising the holding company, India Infoline Ltd and its subsidiaries,
straddles the entire financial services space with offerings ranging from Equity research,
Equities and derivatives trading, Commodities trading, Portfolio Management Services,
Mutual Funds, Life Insurance, Fixed deposits, GoI bonds and other small savings
instruments to loan products and Investment banking. India Infoline also owns and
manages the websites, www.indiainfoline.com and www.5paisa.com .
India Info line Ltd, being a listed entity, is regulated by SEBI (Securities and
Exchange Board of India). It undertakes equities research which is acknowledged by
none other than Forbes as 'Best of the Web' and '…a must read for investors in Asia'.
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India Infoline's research is available not just over the internet but also on international
wire services like Bloomberg , Thomson First Call and Internet Securities where it is
amongst the most read Indian brokers.
Its various subsidiaries are in different lines of business and hence are governed
by different regulators.
Geographical presence
IIL has pan-India presence across 94 cities. It started off with major branches in
metros and now it is focusing on Tier II and III cities. In Q1-FY07 the company opened
56 branches, taking the total number of branches to 233 branches. Almost 50%of the
revenue comes from centers in Maharashtra and Delhi.
Followed by other regions.
Investment Highlights
Strong growth in Industry volumes and rising retail participation Average daily
volumes in the equity markets (cash and derivative combined) have increased by
72%from to Rs.167bn in FY 05 to Rs.288bn in FY 06.With the economy growing at 7-
8% a mounting per capita income and growing BPO culture, there is a new class of
young investors, which are moving towards the equity market.
IIL is majorly present in the retail segment. With the rising income levels, risk- taking
ability of people and the confidence in the India Inc, participation from the retail crowd is
increasing y-o-y. IIL is aggressively increasing its presence by opening branches in
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different cities. In FY QI-07, they roll out 56 new branches and acquired 25000 new
customers. And it expects them to have 350 and 430 branches by FY 08 respectively.
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The subsidiaries of India Info line Ltd are:
India Infoline Securities Pvt Ltd:
India Infoline Securities Pvt Ltd is a 100% subsidiary of India Infoline Ltd, which
is engaged in the businesses of Equities broking and Portfolio Management Services. It
holds memberships of both the leading stock exchanges of India viz. the Stock Exchange,
Mumbai (BSE) and the National Stock Exchange (NSE). It offers broking services in the
Cash and Derivatives segments of the NSE as well as the Cash segment of the BSE.
India Infoline Commodities Pvt Ltd:
India Infoline Commodities Pvt Ltd is a 100% subsidiary of India Infoline Ltd,
which is engaged in the business of commodities broking. They have memberships with
the MCX and NCDEX, two leading Indian commodities exchanges, and has recently
acquired membership of DGCX.
India Infoline Distribution Co Ltd (IILD):
India Infoline Distribution Co Ltd is a 100% subsidiary of India Infoline Ltd and
is engaged in the business of distribution of Mutual Funds, IPOs, Fixed Deposits and
other small savings products. It is one of the largest 'vendor-independent' distribution
houses and has a wide pan-India footprint of over 232 branches coupled with a huge
number of 'feet-on-street', which help source and service customers across the length and
breadth of India.
Mortgages & Loans:
IILD has also entered the business of distribution of mortgages and loan products
during the year 2005-2006.
India Infoline Insurance Services Ltd:
India Infoline Insurance Services Ltd is also a 100% subsidiary of India Infoline
Ltd and is a registered Corporate Agent with the Insurance Regulatory and Development
Authority (IRDA). It is the largest Corporate Agent for ICICI Prudential Life Insurance
Co Ltd, which is India's largest private Life Insurance Company.
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India Infoline Investment Services Ltd:
India Infoline Investment Service Ltd is also a 100% subsidiary of India Infoline
Ltd. It has an NBFC licence from the Reserve Bank of India (RBI) and offers margin-
funding facility to the broking customers.
Management of India infoline:
Mr. Nirmal Jain
Nirmal Jain is the founder and Chairman of India Info line Ltd. He holds an MBA
degree from IIM Ahmedabad, and is a Chartered Accountant and a Cost Accountant. He
has had an impeccable professional and academic track record. He then joined hands with
two local brokers to set up their equity research division Inquire, in 1994. His work set
new standards for equity research in India. In 1995, he founded his own independent
financial research company, now known as India Info line Ltd.
Mr. R Venkataraman
Venkataraman is the co-promoter and Executive Director of India Infoline Ltd.

He holds a B.Tech degree in Electronics and Electrical Communications Engineering
from IIT Kharagpur and an MBA degree from IIM Bangalore. He has held senior
managerial positions in various divisions of ICICI Limited, including ICICI Securities
Limited, their investment banking joint venture with J P Morgan of USA and with BZW
and Taib Capital Corporation Limited. He has also held the position of Assistant Vice
President with G E Capital Services India Limited in their private equity division.
The Board of Directors
Apart from Nirmal Jain and R Venkataraman, the Board of Directors of India
Infoline comprises:
Mr Sat Pal Khattar (Non Executive Director)
Mr Sanjiv Ahuja (Independent Director)
Mr Nilesh Vikamsey (Independent Director)
Mr Kranti Sinha (Independent Director)
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INTRODUCTION TO MUTUAL FUND
A Mutual Fund is a trust that pools the savings of a number of investors who
share a common financial goal. The money thus collected is invested by the fund
manager in different types of securities depending upon the objective of the scheme.
These could range from shares to debentures to money market instruments. The income
earned through these investments and the capital appreciation realized by the scheme are
shared by its unit holders in proportion to the number of units owned by them (pro rata).
Thus a Mutual Fund is the most suitable investment for the common man as it
offers an opportunity to invest in a diversified, professionally managed portfolio at a
relatively low cost. Anybody with an investible surplus of as little as a few thousand
rupees can invest in Mutual Funds.
Each Mutual Fund scheme has a defined investment objective and strategy
mutual fund is the ideal investment vehicle for today’s complex and modern financial
scenario. Markets for equity shares, bonds and other fixed income instruments, real
estate, derivatives and other assets have become mature and information driven. Price
changes in these assets are driven by global events occurring in faraway places.
A typical individual is unlikely to have the knowledge, skills, inclination and time to keep
track of events, understand their implications and act speedily. An individual also finds it
difficult to keep track of ownership of his assets, investments, brokerage dues and bank
transactions etc.
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Draft offer document is to be prepared at the time of launching the fund.
Typically, it pre specifies the investment objectives of the fund, the risk associated, the
costs involved in the process and the broad rules for entry into and exit from the fund and
other areas of operation. In India, as in most countries, these sponsors need approval from
a regulator, SEBI (Securities exchange Board of India) in our case. SEBI looks at track
records of the sponsor and its financial strength in granting approval to the fund for
commencing operations.
A sponsor then hires an asset management company to invest the funds according
to the investment objective. It also hires another entity to be the custodian of the assets of
the fund and perhaps a third one to handle registry work for the unit holders (subscribers)
of the fund.
In the Indian context, the sponsors promote the Asset Management Company
also, in which it holds a majority stake. In many cases a sponsor can hold a 100% stake in
the Asset Management Company (AMC). E.g. Birla Global Finance is the sponsor of the
Birla Sun Life Asset Management Company Ltd., which has floated different mutual
funds schemes and also acts as an asset manager for the funds collected under the
schemes.
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ORGANIZATION OF A MUTUAL FUND
There are many entities involved and the diagram below illustrates the
organizational set up of a mutual fund
Organization of a Mutual Fund
A Mutual Fund is set up in the form of trust, which has sponsor, trustees,
asset management company (AMC), and custodian. The trust is established by
sponsor or more than one sponsor who is like a promoter of company. The trustee
of mutual fund holds its property for the benefit of unit holders. Asset Management
Company (AMC) approved by SEBI manages the funds by making investments in
various types of securities. Custodian, who registered with SEBI, holds the
securities 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 mutual fund.
SEBI regulations required 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 sponsors. Also, 50% of the directors of the AMC must be
independent. All mutual funds are required to be registered with SEBI before they
launch their schemes.
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MAJOR MUTUAL FUND COMPANIES IN INDIA
ABN AMRO MUTUAL FUND
ABN AMRO Mutual Fund was setup on April 15, 2004 with ABN AMRO
Trustee(India) Pvt. Ltd. as the Trustee Company. The AMC, ABN AMRO Asset
Management (India) Ltd. was incorporated on November 4, 2003. Deutsche Bank A G is
the custodian of ABN AMRO Mutual Fund.
BIRLA SUN LIFE MUTUAL FUND
Birla Sun Life Mutual Fund is the joint venture of Aditya Birla Group and Sun
Life Financial. Sun Life Financial is a global organization evolved in 1871 and is being
represented in Canada, the US, the Philippines, Japan, Indonesia and Bermuda apart from
India. Birla Sun life Mutual Fund follows a conservative long-term approach to
investment. Recently it crossed a AUM of
Rs.10, 000 crores.
BANK OF BARODA MUTUAL FUND
Bank of Baroda Mutual Fund or BOB Mutual Fund was setup on October 30,
1992 under the sponsorship of Bank of Baroda. BOB Assets Management Company
Limited is the AUM of BOB Mutual Fund and was incorporated on November 5, 1992.
Deutsche Bank AG is the custodian.
HDFC MUTUAL FUND
HDFC Mutual Fund was setup on June 30, 2000 with two sponsors namely
Housing Development Finance Corporation Limited and Standard Life Investments
Limited.
ING VYSYA MUTUAL FUND
ING Yysya Mutual Fund was setup on February 11, 1999 with the same named Trustee
Company. It is a joint venture of Vysya and ING. The AMC, ING Investment
Management (India) Pvt. Ltd. was on corporaed on April 6, 1998.
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PRUDENTIAL ICICI MUTUAL FUND
The mutual fund of ICICI is a joint venture with Prudential Plc. Of America, one
of the largest life insurance companies in the US of A. Prudential ICICI Mutual Fund was
setup on 13 October, 1993 with two sponsors, Prudential Plc. and the AMC is Prudential
ICICI Asset Management Company Limited incorporated on 22 June, 1993.
SAHARA MUTUAL FUND
Sahara Mutual Fund was setup on July 18, 1996 with Sahara India financial
Corporation Ltd. as the sponsor. Sahara Assets Management Company Private Limited
incorporated on August 31, 1995 works as the AMC of Sahara Mutual Fund. The paid up
capital of the AMC stands at Rs.25.8 crore.
STATE BANK OF INDIA MUTUAL FUND
State Bank of India Mutual Fund is the first Bank sponsored Mutual Fund to
launch offshore fund, the India Magnum Fund with a corpus of Rs.225 crore
approximately. Today it is the largest Bank sponsored Mutual Fund in India. They
already launched 35 schemes out of which 15 have already yield handsome returns to
investors. State Bank of India Mutual Fund has more than Rs.5, 500 crores as AUM.
Now it has an investor base of over 8 lakhs spread over 18 schemes.
TATA MUTUAL FUND
TATA Mutual Fund is a Trust under the Indian Trust Act, 1882. the sponsors for
Tata Mutual Fund are Tata Sons Ltd., and Tata Investment Corporation Ltd. the
investment manger is Tata management Limited is one of the fastest in the country with
more than Rs.7,703 Crore(as on 2005) of AUM.
KOTAK MAHINDRA ASSTE MANAGEMENT COMPANY
Kotak Mahindra Asset Management Company is a subsidiary of KMBL. It is

presently having more than 1, 99,818 investors in its various schemes. KMAMC stared
its operations in December 1998. Kotak Mahindra Mutual Fund offers schemes catering
to investors with varying risk return profiles. It was the first company to launch to
dedicated gilt scheme investing only in government securities.
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UNIT TRUST OF INDIA MUTUAL FUND
UTI Asset Management Company Private Limited, established in Jan 24, 2003
manages the UTI Mutual Fund with the support of UTI Trustee Company Private
Limited. UTI Asset Management Company presently manages a corpus of over Rs.20,
000 crore. The sponsors of UTI Mutual Fund are Bank of Baroda, Punjab National Bank,
State Bank of India, and Life Insurance Corporation of India. The schemes of UTI
Mutual Fund are Liquid Funds, assets Management Funds, Index Funds and Balanced
Funds.
RELIANCE MUTUAL FUND
Reliance Mutual Fund was established as trust under Indian Trusts Act, 1882.The
sponsor of RMF is Reliance Capital Limited and Reliance Capital Trustee Co. Limited is
the Trustee. It was registered on June 30, 1995 as Reliance Mutual Fund which was
changed on March 11, 2004. Reliance Mutual Fund was formed for launching of various
schemes under which, units are issued to the public with a view to contribute to the
capital market and to provide investors the opportunities to make investments in
diversified securities.
STANDARD CHARTERED MUTUAL FUND
Standard Chartered Mutual Fund was setup on March 13, 2000 sponsored by
Standard Chartered Bank. The Trustee is Standard Chartered Trustee Company Pvt. Ltd.
Standard Chartered Asset Management Company Pvt. Ltd is the AMC which was
incorporated with SEBI on December 20, 1999.
FRANKLIN TEMPLETON MUTUAL FUND
The group, Franklin Templeton investment is a California based company with a

global AUM of US $409.2(as on 2005). It is one of the largest financial service group in
the world. Investors can buy or sell the Mutual Fund through their financial advisor or
through mail or through their website. They have open end Diversified Equity schemes,
Open end Sector Equity schemes, Open end Hybrid schemes, Open end tax saving
schemes, Open end income and liquid schemes, Closed end Income schemes and Open
end Fund of Funds schemes to offer.
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MORGAN STANLEY MUTUAL FUND
Morgan Stanley is a world wide financial services company and its leading in the
market in securities, investment management and credit services. Morgan Stanley
investment management was established in the year 1975. it provides customized asset
management services and products to governments, corporations, pension funds and non
profit organizations. Its services are also extending to high net worth individuals and
retail investors. In India it is known as Morgan Stanley investment management Private
Ltd. and its AMC is Morgan Stanley Mutual Fund. This is the first closed end diversified
equity scheme serving the needs of Indian retail investors focusing on the long term
capital appreciation.
ESCORT MUTUAL FUNDS
Escort Mutual Funds was set up on April 15th, 1996 with Escorts Finance Ltd. as its
sponsor. The Trustee Company is Escorts Investments Trust Ltd.. its AMC was
incorporated on Dec1st, 95 with the name Escorts Asset Management Ltd.
ALLAINCE CAPITAL MUTUAL FUND
Allaince Capital Mutual Fund was set up on December 30, 1994 with Alliance
Capital Management Corp. of Delaware (USA) as sponsor. The Trustee is ACAM Trust
Company Pvt. Ltd. and AMC, the Alliance Capital Asset Management India Pvt. Ltd.
with the corporate office in Mumbai.
BENCHMARK MUTUAL FUND
Benchmark Mutual Fund was setup on June 12, 2001 with Niche Financial
Services Pvt. Ltd. as the sponsor and Benchmark Trustee Company Pvt. Ltd. as the
trustee Company. incorporated on October 16, 2000 and headquartered in Mumbai,
Benchmark Assets Management Company Pvt. Ltd. is the AMC.
CAN BANK MUTUAL FUND
Can Bank Mutual Fund was setup on December 19, 1987 with Canara Bank
acting as the sponsor. Canara bank investment Management Service Ltd. incorporated on
March 2, 1993 is the AMC. The Corporate Office of the AMC is in Mumbai.
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CHOLA MUTUAL FUND
Chola Mutual Fund under the sponsorship of Cholamandalam Investment &

Finance Company Ltd. was setup on January 3, 1997. Cholamandalam Trustee Co. Ltd. is
the Trustee Company and AMC is Cholamandalam AMC Limited.
LIC MUTUAL FUND
Life Insurance Corporation on India setup LIC Mutual Fund on 19th June 1989. It
contributed Rs.2 crore towards the corpus of the Fund. LIC Mutual Fund was constituted
as a trust in accordance with the provisions of the Indian trust Act, 1882. The Company
started its bsiness on 29th April 1994. The Trustees of LIC Mutual Fund have appointed
Jeevan Bima Sahayog Asset Management Company Ltd. as the Investment Managers for
mutual fund.
GIC MUTUAL FUND
GIC Mutual Fund, sponsored by General Insurance Corporation of India, a

government of India undertaking and the four Public Sector General Insurance
Companies, viz. National Insurance Co. Ltd, the New India Assurance Co. Ltd. the
Oriental Insurance Co. Ltd and United India Insurance Co. Ltd and is constituted as a
Trust in Accordance with the provisions of the Indian Trusts Act, 1882.
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Types of Mutual Funds
Mutual fund schemes may be classified on the basis of its structure and its
investment objective.
By Structure:
Open-ended Funds
An open-end fund is one that is available for subscription all through the year.
These do not have a fixed maturity. Investors can conveniently buy and sell units at Net
Asset Value ("NAV") related prices. The key feature of open-end schemes is liquidity.
Closed-ended Funds
A closed-end fund has a stipulated maturity period which generally ranging from
3 to 15 years. The fund is open for subscription only during a specified period. 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 they 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.
Interval Funds
Interval funds combine the features of open-ended and close-ended schemes.

They are open for sale or redemption during pre-determined intervals at NAV related
prices.
By Investment Objective:
Growth Funds:
The aim of growth funds is to provide capital appreciation over the medium to
long- term. Such schemes normally invest a majority of their corpus in equities. It has
been proven that returns from stocks, have outperformed most other kind of investments
held over the long term. Growth schemes are ideal for investors having a long-term
outlook seeking growth over a period of time.
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Income Funds:
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 and Government securities. Income Funds are ideal for capital stability and
regular income.
Balanced Funds:
The aim of balanced funds is to provide both growth and regular income. Such
schemes periodically distribute a part of their earning and invest both in equities and
fixed income securities in the proportion indicated in their offer documents. In a rising
stock market, the NAV of these schemes may not normally keep pace, or fall equally
when the market falls. These are ideal for investors looking for a combination of income
and moderate growth.
Money Market Funds
The aim of money market funds is to provide easy liquidity, preservation of

capital and moderate income. These schemes generally invest in safer short-term
instruments such as treasury bills, certificates of deposit, commercial paper and inter-
bank call money. Returns on these schemes may fluctuate depending upon the interest
rates prevailing in the market. These are ideal for Corporate and individual investors as a
means to park their surplus funds for short periods.
Load Funds:
A Load Fund is one that charges a commission for entry or exit. That is, each time
you buy or sell units in the fund, a commission will be payable. Typically entry and exit
loads range from 1% to 2%. It could be worth paying the load, if the fund has a good
performance history.
No-Load Funds:
A No-Load Fund is one that does not charge a commission for entry or exit. That
is, no commission is payable on purchase or sale of units in the fund. The advantage of a
no load fund is that the entire corpus is put to work.
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Other Schemes:
Tax Saving Schemes:
These schemes offer tax rebates to the investors under specific provisions of the
Indian Income Tax laws as the Government offers tax incentives for investment in
specified avenues. Investments made in Equity Linked Savings Schemes (ELSS) and
Pension Schemes are allowed as deduction u/s 88 of the Income Tax Act, 1961. The Act
also provides opportunities to investors to save capital gains u/s 54EA and 54EB by
investing in Mutual Funds, provided the capital asset has been sold prior to April 1, 2000
and the amount is invested before September 30, 2000.
Special Schemes:
Industry Specific Schemes:
Industry Specific Schemes invest only in the industries specified in the offer
document. The investment of these funds is limited to specific industries like InfoTech,
FMCG, Pharmaceuticals etc.
Index Schemes:
Index Funds attempt to replicate the performance of a particular index such as the
BSE Sensex or the NSE 50.
Sectoral Schemes:
Sectoral Funds are those, which invest exclusively in a specified industry or a

group of industries or various segments such as 'A' Group shares or initial public
offerings.
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BENEFITS OF MUTUAL FUND INVESTMENT
Professional Management:
Mutual Funds provide the services of experienced and skilled professionals,

backed by a dedicated investment research team that analyses the performance and
prospects of companies and selects suitable investments to achieve the objectives of the
scheme.
Diversification:
Mutual Funds invest in a number of companies across a broad cross-section of

industries and sectors. This diversification reduces the risk because seldom do all stocks
decline at the same time and in the same proportion. You achieve this diversification
through a Mutual Fund with far less money than you can do on your own.
Convenient Administration:
Investing in a Mutual Fund reduces paperwork and helps you avoid many
problems such as bad deliveries, delayed payments and follow up with brokers and
companies. Mutual Funds save your time and make investing easy and convenient.
Return Potential:
Over a medium to long-term, Mutual Funds have the potential to provide a higher
return as they invest in a diversified basket of selected securities.
Low Costs:
Mutual Funds are a relatively less expensive way to invest compared to directly
investing in the capital markets because the benefits of scale in brokerage, custodial and
other fees translate into lower costs for investors.
Liquidity:
In open-end schemes, the investor gets the money back promptly at net asset
value related prices from the Mutual Fund. In closed-end schemes, the units can be sold
on a stock exchange at the prevailing market price or the investor can avail of the facility
of direct repurchase at NAV related prices by the Mutual Fund.
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Transparency:
You get regular information on the value of your investment in addition to

disclosure on the specific investments made by your scheme, the proportion invested in
each class of assets and the fund manager's investment strategy and outlook.
Flexibility:
Through features such as regular investment plans, regular withdrawal plans and
dividend reinvestment plans, you can systematically invest or withdraw funds according
to your needs and convenience.
Affordability
Investors individually may lack sufficient funds to invest in high-grade stocks. A

mutual fund because of its large corpus allows even a small investor to take the benefit of
its investment strategy.
Choice of Schemes
Mutual Funds offer a family of schemes to suit your varying needs over a
lifetime.
Well Regulated
All Mutual Funds are registered with SEBI and they function within the
provisions of strict regulations designed to protect the interests of investors. The
operations of Mutual Funds are regularly monitored by SEBI.
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LIMITATION OF MUTUAL FUND INVESTMENT
1. No Control Over Cost:
An Investor in mutual fund has no control over the overall costs of investing. He
pays an investment management fee (which is a percentage of his investments) as long as
he remains invested in fund, whether the fund value is rising or declining. He also has to
pay fund distribution costs, which he would not incur in direct investing.
However this only means that there is a cost to obtain the benefits of mutual fund
services. This cost is often less than the cost of direct investing.
2. No Tailor-Made Portfolios:
Investing through mutual funds means delegation of the decision of portfolio

composition to the fund managers. The very high net worth individuals or large corporate
investors may find this to be a constraint in achieving their objectives.
However, most mutual funds help investors overcome this constraint by offering
large no. of schemes within the same fund.
3. Managing A Portfolio Of Funds:
Availability of large no. of funds can actually mean too much choice for the
investors. He may again need advice on how to select a fund to achieve his objectives.
AMFI has taken initiative in this regard by starting a training and certification
program for prospective Mutual Fund Advisors. SEBI has made this certification
compulsory for every mutual fund advisor interested in selling mutual fund.
a. Taxes:
During a typical year, most actively managed mutual funds sell anywhere from 20
to 70 percent of the securities in their portfolios. If your fund makes a profit on its sales,
you will pay taxes on the income you receive, even if you reinvest the money you made.
b. Cost of Churn:
The portfolio of fund does not remain constant. The extent to which the portfolio
changes is a function of the style of the individual fund manager i.e. whether he is a buy
and hold type of manager or one who aggressively churns the fund. It is also dependent
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on the volatility of the fund size i.e. whether the fund constantly receives fresh
subscriptions and redemptions. Such portfolio changes have associated costs of
brokerage, custody fees etc. that lowers the portfolio return commensurately.
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Net Asset Value (NAV)
The net asset value of the fund is the cumulative market value of the assets fund
net of its liabilities. In other words, if the fund is dissolved or liquidated, by selling off all
the assets in the fund, this is the amount that the shareholders would collectively own.
This gives rise to the concept of net asset value per unit, which is the value, represented
by the ownership of one unit in the fund. It is calculated simply by dividing the net asset
value of the fund by the number of units. However, most people refer loosely to the NAV
per unit as NAV, ignoring the "per unit". We also abide by the same convention.
Calculation of NAV
The most important part of the calculation is the valuation of the assets owned by
the fund. Once it is calculated, the NAV is simply the net value of assets divided by the
number of units outstanding. The detailed methodology for the calculation of the asset
value is given below.
Asset value is equal to
Sum of market value of shares/debentures
+ Liquid assets/cash held, if any
+ Dividends/interest accrued
Amount due on unpaid assets
Expenses accrued but not paid
HISTORY OF MUTUAL FUND:
27
Mutual Funds in India (1964-2000)
The end of millennium marks 36 years of existence of mutual funds in this

country. The ride through these 36 years is not been smooth. Investor opinion is still
divided. While some are for mutual funds others are against it.
UTI commenced its operations from July 1964 .The impetus for establishing a
formal institution came from the desire to increase the propensity of the middle and lower
groups to save and to invest. UTI came into existence during a period marked by great
political and economic uncertainty in India. With war on the borders and economic
turmoil that depressed the financial market, entrepreneurs were hesitant to enter capital
market.
UTI commenced its operations from July 1964 "with a view to encouraging
savings and investment and participation in the income, profits and gains accruing to the
Corporation from the acquisition, holding, management and disposal of securities."
Different provisions of the UTI Act laid down the structure of management, scope of
business, powers and functions of the Trust as well as accounting, disclosures and
regulatory requirements for the Trust.
The opening up of the asset management business to private sector in 1993 saw
international players like Morgan Stanley, Jardine Fleming, JP Morgan, George Soros
and Capital International along with the host of domestic players join the party. But for
the equity funds, the period of 1994-96 was one of the worst in the history of Indian
Mutual Funds.
1999-2000 Year of the funds
Mutual funds have been around for a long period of time to be precise for 36 yrs
but the year 1999 saw immense future potential and developments in this sector. This
year signaled the year of resurgence of mutual funds and the regaining of investor
confidence in these MF’s. This time around all the participants are involved in the revival
of the funds the AMC’s, the unit holders, the other related parties. However the sole
factor that gave lifr to the revival of the funds was the Union Budget. The budget brought
about a large number of changes in one stroke. An insight of the Union Budget on mutual
funds taxation benefits is provided later.
It provided centrestage to the mutual funds, made them more attractive and
provides acceptability among the investors. The Union Budget exempted mutual fund
28
dividend given out by equity-oriented schemes from tax, both at the hands of the investor
as well as the mutual fund. No longer were the mutual funds interested in selling the
concept of mutual funds they wanted to talk business which would mean to increase asset
base, and to get asset base and investor base they had to be fully armed with a whole lot
of schemes for every investor .So new schemes for new IPO’s were inevitable. The quest
to attract investors extended beyond just new schemes. The funds started to regulate
themselves and were all out on winning the trust and confidence of the investors under
the aegis of the Association of Mutual Funds of India (AMFI)
One cam say that the industry is moving from infancy to adolescence, the industry
is maturing and the investors and funds are frankly and openly discussing difficulties
opportunities and compulsions.
Future Scenario
The asset base will continue to grow at an annual rate of about 30 to 35 % over
the next few years as investor’s shift their assets from banks and other traditional
avenues. Some of the older public and private sector players will either close shop or be
taken over.
Out of ten public sector players five will sell out, close down or merge with
stronger players in three to four years. In the private sector this trend has already started
with two mergers and one takeover. Here too some of them will down their shutters in the
near future to come.
But this does not mean there is no room for other players. The market will witness
a flurry of new players entering the arena. There will be a large number of offers from
various asset management companies in the time to come. Some big names like Fidelity,
Principal, Old Mutual etc. are looking at Indian market seriously. One important reason
for it is that most major players already have presence here and hence these big names
would hardly like to get left behind.
The mutual fund industry is awaiting the introduction of derivatives in India as

this would enable it to hedge its risk and this in turn would be reflected in it’s Net Asset
Value (NAV).
SEBI is working out the norms for enabling the existing mutual fund schemes to
trade in derivatives. Importantly, many market players have called on the Regulator to
29
initiate the process immediately, so that the mutual funds can implement the changes that
are required to trade in Derivatives.
GROWTH IN ASSETS UNDER MANAGEMENT
RECENT TRENDS IN MUTUAL FUND INDUSTRY
30
The most important trend in the mutual fund industry is the aggressive expansion
of the foreign owned mutual fund companies and the decline of the companies floated by
nationalized banks and smaller private sector players. Many nationalized banks got into
the mutual fund business in the early nineties and got off to a good start due to the stock
market boom prevailing then. These banks did not really understand the mutual fund
business and they just viewed it as another kind of banking activity.
Few hired specialized staff and generally chose to transfer staff from the parent
organizations. The performance of most of the schemes floated by these funds was not
good. Some schemes had offered guaranteed returns and their parent organizations had to
bail out these AMC’s by paying large amounts of money as the difference between the
guaranteed and actual returns. The service levels were also very bad.
Most of these AMC’s have not been able to retain staff, float new schemes etc. and it is
doubtful whether, barring a few exceptions, they have serious plans of continuing the
activity in a major way. The experience of some of the AMC’s floated by private sector
Indian companies was also very similar. They quickly realized that the AMC business is
a business, which makes money in the long term and requires deep-pocketed support in
the intermediate years.
Some have sold out to foreign owned companies, some have merged with others
and there is general restructuring going on. The foreign owned companies have deep
pockets and have come in here with the expectation of a long haul. They can be credited
with introducing many new practices such as new product innovation, sharp improvement
in service standards and disclosure, usage of technology, broker education and support
etc. In fact, they have forced the industry to upgrade itself and service levels of
organizations like UTI have improved dramatically in the last few years in response to
the competition provided by these.
31
WHY SHOULD INVESTORS INVEST IN MUTUAL FUND?
An investor avails of the service of experienced and skilled professionals who are
backed by a dedicated of companies and selects suitable investments to achieve the
objectives of the schemes.
• Mutual funds invest in a number of companies across a broad cross- section of

industries and sectors. This diversification reduces the risk because seldom do all the
stocks decline at the same time and in the same proportion. The investors achieve this
diversification through a mutual fund with far less money than you can do on our own.
• Investing in a mutual fund reduces paperwork and helps an investor avoid many
problems such as bad deliveries, delayed payments and unnecessary follow.
32
EMERGING ISSUES IN MUTUAL FUND
• Rating of Mutual Fund Schemes:
Total returns has been the criteria for measuring the performance of mutual fund.
Therefore, CRISIL has development a composite performance ranking which measures
performance for each of the open- ended schemes. According to CRISIL, this measures is
applicable only to those schemes, which are at least two years old and disclose 100% of
their portfolios.
• Changes in Mutual Fund due to the Advent of Net:
As per SEBI regulations, bond funds and equity funds can charge a maximum of
2.25% and 2.5% as administrative fees, respectively. Mutual Funds could bring down
their administrative costs to 0.75%, if trading is done online and consequently improves
the return potential of their schemes. Mutual Funds could provide better advise or servise
to their investors through the Net.
• New Norms on NPA Classification:
The Malegan committee has made important recommendations regarding norms

on classification of NPAs in debt securities and norms for valuation of liquid securities in
a mutual fund schemes. The committee has recommended that debt securities held by
mutual fund in their portfolio can be classified as NPA, if the principal or interest is not
received for six months. The mutual funds will have to disclose the NPAs to unit holders
in a half-yearly basis.
• INFLUENCE OF TECHNOLOGY:
A majority of the mutual fund have their own websites providing basic
information relating to the schemes. Mutual Fund have begun to use electronic fund
transfer method top remit their dividends and redemption proceeds. However, the most
significant influence of technology is seen in servicing investors. So technology can
bridge the gap between investor education and products positioning.
• PRODUCT INNOVATION:
Product innovation is an emerging feature in the mutual fund industry in India.

Most of the products offered by mutual fund can be divided among three classes of cash
33
funds, income funds and equity funds. The year 2002 was different in that the products
offered were far more innovative. Templeton India launched a debt fund that would
invest predominantly in floating rate bonds.
• INDICES FOR MUTUAL FUNDS:
The AMFI has recently launched four indices for gilt funds and another set of
indices for balanced funds, bond funds, monthly income plans and liquid funds. The
indices, which have been developed and will be maintained by ICICI securities and
finance companied and CRISIL.com, respectively, will be mandated for use by mutual
funds to enable the comparison of performance.
• FUNDS OF FUNDS:
The SEBI may soon permit mutual funds to float a new category of funds called
“funds of funds”, which will invest in other mutual fund schemes. These scheme will
enable people to invest in different mutual funds schemes through a single find.
34
MUTUAL FUND BEST PRCTICES
THE PRACTICE OF “RESTFUL”
Risk- Reward Relationship:
A clear and direct relationship of risk with reward has to be developed and the
concept instilled in the mind of the investor, and this is the basis of all classification of
Mutual Fund.
Ease of Business:
The business of Mutual Fund is not an easy one. It is easy only for the ones who
have either been in the business for a long time, or for the people, institutions which have
been in the investment space for a long time and are willing to experiment and learn from
their mistake, and can be flexible.
Service:
The service provision ought to be flawless, for after all, Mutual Fund is a service,
and the only way the number of customers can be increased and the existing ones
retained is by providing a higher level of service, thereby increasing customer
satisfaction.
Trust / Transparency:
A high level of transparency has to be built into the system of processes and
investments in Mutual Fund. This is of vital importance as the terms “Transparency” and
“Trust”, in the case of Mutual Funds is synonyms. Trust in the firm would come only
with transparency. And with Trust would come more business.
Fairness to Investors:
This, of course, is an offshoot of the previous point that we made. No business

can survive unless it is fair to the customer. However, what is important here is that it has
to be made evidently clear that the firm is actually being fair to its customers. Modesty
doesn’t help, and this has to be told to your customers so that they actually notice.
Utility:
35
The objective of the investment have to be always kept in mind while marketing
Mutual Fund, for if there is a deviation, its utility is lost, or the customers remain
unsatisfied.
Liquidity:
This has again and again highlighted, for it the basic premise that most investors
invest in Mutual Fund only because of the high level of liquidity. There has to be a good
market development for your issue, so that there is a ready market available for them.
COMPARATIVE STUDY OF MUTUAL FUNDS ON THE BASES OF ALPHA,

BETA AND STANDARD DEVIATION
ALPHA:-
36
Measures how much if any of the extra risk helped the fund outperform its
corresponding benchmark. Using beta, alpha's computation compares the fund's
performance to that of the benchmark's risk-adjusted returns and establishes if the fund's
returns outperformed the market's, given the same amount of risk.
For example, if a fund has an alpha of 1, it means that the fund outperformed the
benchmark by 1%. Negative alphas are bad in that they indicate that the fund under
performed for the amount of extra, fund-specific risk that the fund's investors undertook.
BETA :-
Beta is useful statistical measure, which determines the volatility, or risk, of a

fund in comparison to that of its index or benchmark. A fund with a beta very close to 1
means the fund's performance closely matches the index or benchmark. A beta greater
than 1 indicates greater volatility than the overall market, and a beta less than 1 indicates
less volatility than the benchmark.
STANDARD DEVIATION :-
The standard deviation essentially reports a fund's volatility, which indicates the
tendency of the returns to rise or fall drastically in a short period of time. A security that
is volatile is also considered higher risk because its performance may change quickly in
either direction at any moment. The standard deviation of a fund measures this risk by
measuring the degree to which the fund fluctuates in relation to its mean return.
37
SENSEX RETURNS:
MONTH SENSEX RETURNS
March -0.14
April 0.14
May 0.02
June -0.17
July 0.11
CALCULATION OF RETURNS ON MUTUAL FUND SCHEMES:
BALANCE FUND:
TATA BALANCED FUND (GROWTH)
PRU ICICI FUND (GROWTH)
HDFC PRUDENCE FUND (GROWTH)
MAGNUM BALANCE FUND (GROWTH)
JM BALANCED FUND (GROWTH)
38
TATA BALANCED FUND
DATE NAV DATE NAV DATE NAV DATE NAV DATE NAV
RETURN RETURN RETURN RETURN RETURN
(%) (%) (%) (%) (%)
1-Mar -1.30% 2-Apr -1.94 3-May 1.16% 1-Jun 0.09% 2-Jul 0.34%
2-Mar -3.23% 3-Apr 0.74% 4-May -0.39% 4-Jun -0.49% 3-Jul 0.74%
5-Mar 1.10% 4-Apr 1.06% 7-May -0.23% 5-Jun 0.62% 4-Jul 0.17%
6-Mar 1.10% 5-Apr 0.55% 8-May -0.44% 6-Jun -1.10% 5-Jul -0.27%
7-Mar -0.91% 9-Apr 1.64% 9-May 0.07% 7-Jun -0.09% 6-Jul 0.52%
8-Mar 2.36% 10-Apr 0.28% 10-May 0.01% 8-Jun -0.59% 9-Jul 0.45%
9-Mar -0.84% 11-Apr 0.50% 11-May 0.26% 11-Jun -0.22% 10-Jul -0.39%
12-Mar 0.80% 12-Apr -0.13% 14-May 0.83% 12-Jun -0.11% 11-Jul 0.14%
14-Mar -1.96% 16-Apr 1.74% 16-May 1.19% 14-Jun 1.18% 13-Jul 0.83%
16-Mar -0.60% 17-Apr -0.47% 17-May 0.83% 15-Jun 0.04% 16-Jul 0.17%
20-Mar 0.24% 19-Apr 0.06% 21-May 0.59% 19-Jun 1.11% 19-Jul 0.83%
23-Mar 0.31% 24-Apr 0.81% 24-May -0.62% 22-Jun -0.23% 24-Jul 0.14%
26-Mar -0.41% 25-Apr 0.16% 25-May 0.55% 25-Jun 0.31% 25-Jul -0.75%
28-Mar -1.17% 26-Arp -0.13% 28-May 0.37% 26-Jun 0.48% 26-Jul -0.09%
27-Apr -0.78% 29-May 0.71% 27-Jun -0.31% 27-Jul 2.66%
30-Apr 0.61% 30-May -0.47% 28-Jun 0.29% 30-Jul 0.01%
31-May 0.79% 29-Jun 0.95% 31-Jul 1.67%
TOTAL 0.44% TOTAL -1.85% TOTAL 5.20% TOTAL 2.68% TOTAL 8.67%
Avg. Avg. - Avg. Avg. Avg.
RETURNS 0.02% RETURNS 0.092325 RETURNS 0.25% RETURNS 0.13% RETURNS 0.41%
39
PRU ICICI BALANCED FUND
(%) (%) (%) (%) (%)
1-Mar 1.05% 2-Apr -1.92% 3-May 1.03% 1-Jun 0.16% 2-Jul 0.02%
2-Mar -1.66 3-Apr 0.80% 4-May -0.74% 4-Jun -0.60% 3-Jul 0.90%
5-Mar -3.23% 4-Apr 0.64% 7-May -0.34% 5-Jun 0.55% 4-Jul -0.22%
16-Mar 0.00% 17-Apr -0.66% 17-May 0.79% 15-Jun 0.03% 16-Jul -0.21%
21-Mar 0.70% 20-Apr 1.24% 22-May 0.06% 20-Jun 0.78% 20-Jul 0%
28-Mar -1.31% 26-Apr -0.23% 28-May 0.83% 26-Jun 0.36% 26-Jul -0.18%
27-Apr -1.33% 29-May 0.55% 27-Jun -0.17% 27-Jul -2.70%
30-Apr 0.03% 30-May -0.79% 28-Jun 0.19% 30-Jul -0.24%
31-May 0.41% 29-Jun 0.85% 31-Jul 1.61%
TOTAL -0.20% TOTAL 4.84% TOTAL 4.50% TOTAL 0.69% TOTAL 1.90%
Avg. Avg. Avg. Avg. Avg.
RETURNS 0.25% RETURNS 0.24% RETURNS 0.21% RETURNS 0.03% RETURNS 0.09%
40
HDFC PRUDENCE FUND
(%) (%) (%) (%) (%)
12-Mar 0.66% 12-Apr -0.47% 14-May 1.37% 12-Jun -0.66% 11-Jul -0.06%
26-Mar -0.31% 24-Apr 0.24% 24-May -0.85% 22-Jun -0.32% 24-Jul -0.07%
26-Apr -0.26% 28-May 1.21% 26-Jun 0.37% 26-Jul 0.19%
27-Apr -0.41% 29-May 0.33% 27-Jun 0.11% 27-Jul -1.49%
30-Apr 0.81% 30-May -0.42% 28-Jun -0.09% 30-Jul -0.04%
31-May 0.88% 29-Jun 0.71% 31-Jul 1.73%
RETURNS -0.22% RETURNS 0.31% RETURNS 0.22% RETURNS 0.15% RETURNS 0.21%
41
MAGNUM BALANCE FUND
(%) (%) (%) (%) (%)
5-Mar -2.64% 4-Apr 0.88% 7-May -0.31% 5-Jun 0.05% 4-Jul 0.08%
19-Mar 1.46% 18-Apr 0.60% 18-May 0.33% 18-Jun 0.00% 17-Jul -0.53%
-1.12% 26-Apr -0.39% 28-May 0.27% 26-Jun 0.35% 26-Jul 0.08%
27-Apr -1.16% 29-May 0.99% 27-Jun -0.11% 27-Jul -2.54%
30-Apr 0.51% 30-May -0.27% 28-Jun 0.26% 30-Jul 0.31%
31-May 0.19% 29-Jun 0.92% 31-Jul 1.34%
42
JM BALANCED FUND
(%) (%) (%) (%) (%)
-
-
-
-
-
23-Mar 0.04% 24-Apr 0.50% 24-May -0.70% 22-Jun 0.41% 24-Jul -0.24%
-
-
27-Apr 1.02% 29-May 0.66% 27-Jun 0.59% 27-Jul -3.04%
30-Apr 0.69% 30-May -0.90% 28-Jun 1.11% 30-Jul 1.35%
31-May 1.69% 29-Jun -0.16% 31-Jul 1.35%
43
Sensex (Sm-Sm)* (Sm-mean)* (Mm-mean)*
Month Returns tata bal (Sm-mean) (Mm-mean) (Mm-Mm) (Sm-mean) (Mm-mean)
March -0.14 0.02 -0.132 -0.1240 0.016368 0.0004 0.015376
April 0.14 -0.09 0.148 -0.2340 -0.034632 0.0081 0.054756
May 0.02 0.25 0.028 0.1060 0.002968 0.0625 0.011236
June -0.17 0.13 -0.162 -0.0140 0.002268 0.0169 0.000196
July 0.11 0.41 0.118 0.2660 0.031388 0.1681 0.070756
TOTAL -0.04 0.72 0.01836 0.256 0.030525
mean -0.008 0.144
BETA 0.01836/ 0.08028 ALPHA 0.1458296
0.2286996 Standard Deviation 0.030525
PRU
Month sensex returns ICICI (Sm-mean) (Tm-mean) (Sm-Sm)*(Tm-Tm) (Tm-mean)*(tm-mean) (Tm-mean)*(tm-mean)
March -0.14 0.25 -0.132 0.086 -0.011352 0.007396 0.007396
April 0.14 0.24 0.148 0.076 0.011248 0.005776 0.005776
May 0.02 0.21 0.028 0.046 0.001288 0.002116 0.002116
June -0.17 0.03 -0.162 -0.134 0.021708 0.017956 0.017956
July 0.11 0.09 0.118 -0.074 -0.008732 0.005476 0.005476
TOTAL -0.04 0.82 0.01416

MEAN -0.008 0.164
BETA 0.01416/ 0.08028 ALPHA 0.174

44
MAG (Mm-
Month sensex returns BAL (Sm-mean) mean) (Sm-Sm)*(Tm-Tm) (Tm-mean)*(tm-mean)
March -0.14 -0.04 -0.132 -0.186 -0.186 0.034596
April 0.14 0.32 0.148 0.174 0.174 0.030276
May 0.02 0.23 0.028 0.084 0.084 0.007056
June -0.17 0.08 -0.162 -0.066 -0.066 0.004356
July 0.11 0.14 0.118 -0.006 -0.006 0.013924
TOTAL -0.04 0.73 0.012

MEAN -0.008 0.146
BETA 0.012/ 0.08028 ALPHA 0.1522422
sensex HDFC (Sm- (Mm- (Sm-Sm)*(Tm- (Tm-mean)*(tm-

Month returns Pru mean) mean) Tm) mean)
March -0.14 -0.22 -0.132 -0.354 0.046728 0.125316
April 0.14 0.31 0.148 0.176 0.026048 0.030976
May 0.02 0.22 0.028 0.086 0.002408 0.007396
June -0.17 0.15 -0.162 0.016 -0.002592 0.000256
July 0.11 0.21 0.118 0.076 0.008968 0.005776
TOTAL -0.04 0.67 0.08156
45
MEAN -0.008 0.134
BETA 0.08156/ 0.08028 ALPHA 0.142127554
(Mm-
Month sensex returns JM BAL (Sm-mean) mean) (Sm-Sm)*(Tm-Tm) (Tm-mean)*(tm-mean)
March -0.14 -0.02 -0.132 -0.228 0.030096 0.017424
April 0.14 0.36 0.148 0.152 0.022496 0.021904
May 0.02 0.25 0.028 0.042 0.001176 0.000784
June -0.17 0.05 -0.162 -0.158 0.025596 0.026244
July 0.11 0.4 0.118 0.192 0.022656 0.013924
TOTAL -0.04 1.04 0.10202

MEAN -0.008 0.208
BETA 0.10202/ 0.08028 ALPHA 0.218166418
SCHEMES BETA ALPHA S.D.

TATA 0.2286996 0.146 0.031
PRU ICICI 0.174 0.165 0.006
HDFC 1.314365517 0.142 0.0524
MAG BAL 0.132383266 0.152 0.0137
JM BAL 1.24 0.218 0.0185
INTERPRETATION:
BETA:
This indicates that HDFC Schemes in balance fund has given return with par with
SENSEX. The highest volatility shown in balance fund is by JM Morgan Balance fund.
And the least volatility is been shown by Magnum Balance Fund.
Alpha:
46
Alpha of JM Morgan is the higgest, this indicate that with the given risk the fund
has given good return. It indicate that JM Morgan strategy is that, it takes comparatively
more risk but at the same time it gives good return. The less return is given by TATA
Balance Fund.
Standard Deviation:
Standard Deviation indicate volatility in the performance. From the Balance Fund
it indicates that HDFC has high volatility in its portfolio.
Investors who do not want to take much risk normally go for Balanced Funds.in
Balance Fund also investors who are risk averse can go for Pru ICICI as has less beta that
is it is less volatile but at the same time it is giving good returns.
47
EQUITY FUND:
DSP ML Equity Fund
Reliance Vision Fund
Magnum Multicap Fund
Birla Midcap Fund
Franklin India Opportunities Fund
48
EQUITY DIVERSIFIED
DSP ML Equity Fund
(%) (%) (%) (%) (%)
-
-
-
-
19-Mar 1.27% 18-Apr 0.23% 18-May 0.10% 18-Jun -0.58% 17-Jul -0.93%
-
-
27-Apr 1.48% 29-May 0.97% 27-Jun -0.34% 27-Jul -3.88%
30-Apr 0.96% 30-May -0.54% 28-Jun 0.44% 30-Jul 0.79%
31-May 0.72% 29-Jun 1.01% 31-Jul 1.46%
49
Reliance Vision Fund - (G)
(%) (%) (%) (%) (%)
-
-
-
-
27-Apr 1.41% 29-May 0.96% 27-Jun -0.27% 27-Jul -2.42%
30-Apr 1.00% 30-May -0.52% 28-Jun 0.70% 30-Jul 0.19%
31-May 1.02% 29-Jun 0.71% 31-Jul 1.54%
50
Magnum Multicap Fund (G)
RETUR RETUR RETUR RETUR
N RETURN N N N
(%) (%) (%) (%) (%)
27-Apr -1.47% 29-May 0.69% 27-Jun -0.75% 27-Jul -3.40%
30-Apr 0.32% 30-May -1.61% 28-Jun 0.19% 30-Jul 0.00%
31-May 1.07% 29-Jun 1.25% 31-Jul 2.09%
S -0.01% S 0.37% S 0.17% S 0.05% S 0.28%
51
Birla Midcap Fund (G)
(%) (%) (%) (%) (%)
22-Mar 1.29% 23-Apr -0.16% 23-May -0.48% 21-Jun 0.62% 23-Jul 0.55%
27-Apr -0.68% 29-May 0.35% 27-Jun 0.00% 27-Jul -2.74%
30-Apr 0.88% 30-May -0.41% 28-Jun 0.66% 30-Jul 0.60%
31-May 1.11% 29-Jun 0.95% 31-Jul 1.44%
52
Franklin India Opportunities Fund - (G)
(%) (%) (%) (%) (%)
5-Mar -4.53% 4-Apr -0.17% 7-May -0.55% 5-Jun 0.27% 4-Jul 0.13%
16-Mar -0.52% 17-Apr -1.12% 17-May 1.03% 15-Jun -0.18% 16-Jul 0.63%
27-Apr -1.42% 29-May 1.06% 27-Jun -0.53% 27-Jul -4.39%
30-Apr -0.04% 30-May -0.56% 28-Jun 0.74% 30-Jul 0.54%
31-May 0.64% 29-Jun 0.37% 31-Jul 1.68%
53
EQUITY DIVERSIFIED
DSP (Sm-
sensex ML (Sm- (Dm- Sm)*(Tm- (Sm-mean)*(Sm- (Tm-mean)*(tm-
Month returns Eq mean) mean) Tm) mean) mean)
March -0.14 -0.07 -0.132 -0.302 0.039864 0.017424 0.091204
April 0.14 0.45 0.148 0.218 0.032264 0.021904 0.047524
May 0.02 0.46 0.028 0.228 0.006384 0.000784 0.051984
June -0.17 0.14 -0.162 -0.092 0.014904 0.026244 0.008464
July 0.11 0.18 0.118 -0.052 -0.006136 0.013924 0.002704
TOTAL -0.04 1.16 0.08728

MEAN -0.008 0.232
BETA 0.08728/ 0.08028 ALPHA 0.241

sensex (Sm- (Rm- (Sm-Sm)*(Tm- (Tm-mean)*(tm-

Month returns Rel VIS mean) mean) Tm) mean)
March -0.14 -0.13 -0.132 -0.372 0.049104 0.138384
April 0.14 0.49 0.148 0.248 0.036704 0.061504
May 0.02 0.41 0.028 0.168 0.004704 0.028224
June -0.17 0.17 -0.162 -0.072 0.011664 0.005184
July 0.11 0.27 0.118 0.028 0.003304 0.000784
54
TOTAL -0.04 1.21 0.10548
MEAN -0.008 0.242
BETA 0.10548/0.08028 ALPHA 0.2525

(Mm-
Month sensex returns Mag Mul (Sm-mean) mean) (Sm-Sm)*(Tm-Tm) (Tm-mean)*(tm-mean)
March -0.14 -0.01 -0.132 -0.182 0.024024 0.033124
April 0.14 0.37 0.148 0.198 0.029304 0.039204
May 0.02 0.17 0.028 -0.002 -0.000056 0.00
June -0.17 0.05 -0.162 -0.122 0.019764 0.014884
July 0.11 0.28 0.118 0.108 0.012744 0.011664
0.016095686
TOTAL -0.04 0.86 0.18466
MEAN -0.008 0.172
BETA 0.08578/ 0.08028 ALPHA 0.181

sensex Birla (Sm- (Bm- (Sm-Sm)*(Tm- (Tm-mean)*(tm-

Month returns Mid mean) mean) Tm) mean)
March -0.14 -0.23 -0.132 -0.488 0.064416 0.017424
55
April 0.14 0.52 0.148 0.262 0.038776 0.021904
May 0.02 0.46 0.028 0.202 0.005656 0.000784
June -0.17 0.17 -0.162 -0.088 0.014256 0.026244
July 0.11 0.37 0.118 0.112 0.013216 0.013924
TOTAL -0.04 1.29 0.13632

MEAN -0.008 0.258
BETA 0.13632/0.08028 ALPHA 0.272

sensex Fran Ind (Sm- (Bm- (Sm-Sm)*(Tm- (Tm-mean)*(tm-

Month returns Opp mean) mean) Tm) mean)
March -0.14 -0.03 -0.132 -0.31 0.04092 0.0961
April 0.14 0.41 0.148 0.13 0.01924 0.0169
May 0.02 0.73 0.028 0.45 0.0126 0.2025
June -0.17 0.14 -0.162 -0.14 0.02268 0.0196
July 0.11 0.15 0.118 -0.13 -0.01534 0.0169
TOTAL -0.04 1.4 0.0801

MEAN -0.008 0.28
BETA 0.0801/0.08028 ALPHA 0.288


DSP ML Eq 1.09 0.241 0.036
Rel VIS 1.31 0.252 0.057
Mag Mul 1.07 0.181 0.016
Birla Mid 1.698 0.272 0.095
Fran Ind
Opp 0.998 0.288 0.087
56
INTERPRETATION
B E T A:
Beta of Birla Midcap Equity Scheme is the highest, this indicate that the risk
profile of Birla Mutual Fund for Equity schemes is more. In equity schemes all the above
mention schemes have shown volatility as compared to SENSEX.
But Franklin India Opportunies Fund has shown less volatility as compared to
other Equity Mutual Fund.
ALPHA:
The highest return is given by Franklin India Opportunies Fund. But the risk taken
by this fund is less. Magnum Multicap fund has shown volatility at par with SENSEX but
among the Equity Schemes this fund has given less returns.
STANDARD DEVIATION:
Birla and Franklin Equity Mutual Fund has shown more deviation in its
Movement. Therefore these fund has shown more volatility in its performance.
For investors who invest in Equity Fund for getting more returns as compared to
other schemes, thereofore in order to get more returns they have to take more risks.
Investors who donot want to take risk but want to get more returns can go for Franklin
India Opportunies Fund
GILT FUND:
DSP ML G-SEC FUND
57
MAGNUM GILT FUND(SHORT TERM)
HDFC GILT LONG TERM PLAN
PRU ICICI GILT FUND(INVESTMENT)
BIRLA GILT PLUS REGULAR FUND
DSP ML G-Sec Fund – A
(%) (%) (%) (%) (%)
5-Mar 0.02% 4-Apr -0.12% 7-May 0.14 5-Jun -0.10% 4-Jul 0.15%
8-Mar -0.21% 10-Apr -0.01% 10-May -0.23% 8-Jun -0.18% 9-Jul -0.05%
9-Mar 0.05% 11-Apr -0.04% 11-May -0.22% 11-Jun -0.50% 10-Jul 0.03%
27-Apr -0.05% 29-May -0.09% 27-Jun -0.14% 27-Jul 0.30%
30-Apr 30-May -0.02% 28-Jun 0.25% 30-Jul -0.58%
31-May 0.18% 29-Jun 0.05% 31-Jul
RETURNS 0.03% RETURNS -0.02% RETURNS 0.71% RETURNS 0.01% RETURNS 0.12%
58
Magnum Gilt Fund - Short Term
(%) (%) (%) (%) (%)
27-Apr 0.02% 29-May 0.02% 27-Jun 0.03% 27-Jul 0.01%
30-Apr 0.07% 30-May 0.02% 28-Jun 0.09% 30-Jul 0.04%
31-May 0.03% 29-Jun 0.03% 31-Jul 0.01%
TOTAL 0.61% TOTAL 0.68% TOTAL 0.95% TOTAL 0.94% TOTAL 1.43%
59
HDFC Gilt Fund Long Term Plan
(%) (%) (%) (%) (%)
2-Mar -0.06% 3-Apr -0.90% 4-May -0.03% 4-Jun -0.01% 3-Jul 0.03%
9-Mar -0.02% 11-Apr -0.14% 11-May 0.00% 11-Jun -0.92% 10-Jul -0.07%
12-Mar 0.34% 12-Apr -0.11% 14-May 0.15% 12-Jun 0.03% 11-Jul -0.03%
27-Apr -0.29% 29-May -0.06% 27-Jun -0.09% 27-Jul -0.26%
30-Apr -0.01% 30-May -0.04% 28-Jun 0.16% 30-Jul 0.30%
31-May 0.16% 29-Jun 0.02% 31-Jul -0.51%
RETURNS 0.02% RETURNS -0.01% RETURNS 0.06% RETURNS 0.00% RETURNS 0.04%
60
Pru ICICI Gilt Fund (Investment) –
(%) (%) (%) (%) (%)
1-Mar 0.04% 1-Mar 0.04% 3-May 0.09% 1-Jun -0.04% 2-Jul 0.31%
2-Mar -0.04% 2-Mar -0.09% 4-May -0.05% 4-Jun -0.05% 3-Jul 0.34%
5-Mar 0.02% 5-Mar 0.01% 7-May -0.05% 5-Jun -0.02% 4-Jul 0.11%
6-Mar 0.00% 6-Mar 0.22% 8-May 0.09% 6-Jun 0.01% 5-Jul 0.09%
8-Mar 0.00% 8-Mar 0.01% 10-May -0.09% 8-Jun -0.09% 9-Jul 0.40%
12-Mar 0.03% 12-Mar -0.04% 14-May 0.17% 12-Jun 0.10% 11-Jul 0.07%
13-Mar 0.00% 13-Mar 0.07% 15-May 0.06% 13-Jun -0.05% 12-Jul -0.08%
14-Mar -0.02% 14-Mar 0.06% 16-May 0.05% 14-Jun -0.05% 13-Jul 0.17%
16-Mar 0.05% 16-Mar 0.00% 17-May -0.04% 15-Jun 0.10% 16-Jul 0.34%
20-Mar 0.08% 20-Mar 0.04% 21-May 0.08% 19-Jun -0.05% 19-Jul 0.14%
21-Mar 0.17% 21-Mar 0.08% 22-May -0.01% 20-Jun 0.01% 20-Jul 0.46%
22-Mar 0.03% 22-Mar 0.27% 23-May 0.05% 21-Jun 0.02% 23-Jul -0.17%
23-Mar -0.05% 23-Mar 0.07% 24-May -0.05% 22-Jun -0.01% 24-Jul -0.27%
26-Mar 0.07% 26-Mar -0.17% 25-May 0.11% 25-Jun -0.04% 25-Jul 0.14%
28-Mar 28-Mar -0.07% 28-May 0.15% 26-Jun 0.06% 26-Jul -0.28%
30-Apr -0.03% 29-May -0.05% 27-Jun -0.12% 27-Jul 0.53%
30-May -0.06% 28-Jun 0.13% 30-Jul -0.49%
31-May 0.10% 29-Jun -0.02% 31-Jul
61
Birla Gilt Plus - Regular
(%) (%) (%) (%) (%)
9-Mar -0.01% 11-Apr -0.03% 11-May -0.01% 11-Jun -0.09% 10-Jul -0.03%
30-Mar 0.03% 27-Apr -0.17% 29-May -0.03% 27-Jun -0.10% 27-Jul -0.13%
30-Apr -0.04% 30-May -0.01% 28-Jun 0.22% 30-Jul 0.17%
31-May 0.04% 29-Jun 0.01% 31-Jul -0.04%
TOTAL 0.28% TOTAL 0.77% TOTAL 0.67% TOTAL -0.07% TOTAL 2.82%
62
sensex (Sm- (Bm- (Sm-Sm)*(Tm- (Tm-mean)*(tm-
Month returns DSP ML mean) mean) Tm) mean)
March -0.14 0.03 -0.132 -0.14 0.01848 0.0196
April 0.14 -0.02 0.148 -0.19 -0.02812 0.0361
May 0.02 0.71 0.028 0.54 0.01512 0.2916
June -0.17 0.01 -0.162 -0.16 0.02592 0.0256
July 0.11 0.12 0.118 -0.05 -0.0059 0.0025
TOTAL -0.04 0.85 0.0255

MEAN -0.008 0.17
BETA 0.0255/0.08028 ALPHA 0.1725
sensex
Month returns Magnum (Sm-mean) (Bm-mean) (Sm-Sm)*(Tm-Tm) (Tm-mean)*(tm-mean)
March -0.14 0.03 -0.132 -0.014 0.001848 0.000196
April 0.14 0.03 0.148 -0.014 -0.002072 0.000196
May 0.02 0.05 0.028 0.006 0.000168 0.0000360
June -0.17 0.04 -0.162 -0.004 0.000648 0.000016
July 0.11 0.07 0.118 0.026 0.003068 0.000676
TOTAL -0.04 0.22 0.000592

MEAN -0.008 0.044
BETA 0.00059/ 0.08028 ALPHA 0.044
63
sensex (Sm- (Bm- (Sm-Sm)*(Tm- (Tm-mean)*(tm-
Month returns HDFC mean) mean) Tm) mean)
March -0.14 0.02 -0.132 -0.002 0.000264 0.000004
April 0.14 -0.01 0.148 -0.032 -0.004736 0.001024
May 0.02 0.06 0.028 0.038 0.001064 0.001444
June -0.17 0 -0.162 -0.022 0.003564 0.000484
July 0.11 0.04 0.118 0.018 0.002124 0.000324
TOTAL -0.04 0.11 0.00228

MEAN -0.008 0.022
BETA 0.00228/ 0.08028 ALPHA 0.022
sensex Pru (Sm- (Bm- (Sm-Sm)*(Tm- (Tm-mean)*(tm-

Month returns ICICI mean) mean) Tm) mean)
March -0.14 0.03 -0.132 -0.014 0.001848 0.000196
April 0.14 0.03 0.148 -0.014 -0.002072 0.000196
May 0.02 0.03 0.028 -0.014 -0.000392 0.000196
June -0.17 0.01 -0.162 -0.034 0.005508 0.001156
July 0.11 0.12 0.118 0.076 0.008968 0.005776
TOTAL -0.04 0.22 0.01386
MEAN -0.008 0.044
BETA 0.01386/ 0.08028 ALPHA 0.045
sensex (Bm-
Month returns Birla (Sm-mean) mean) (Sm-Sm)*(Tm-Tm) (Tm-mean)*(tm-mean)
March -0.14 0.01 -0.132 -0.032 0.004224 0.001024
April 0.14 0.04 0.148 -0.002 -0.000296 0.000004
May 0.02 0.03 0.028 -0.012 -0.000336 0.000144
64
June -0.17 0 -0.162 -0.042 0.006804 0.001764
July 0.11 0.13 0.118 0.088 0.010384 0.007744
TOTAL -0.04 0.21 0.02078
MEAN -0.008 0.042
BETA 0.02078/ 0.08028 ALPHA 0.044


DSPML G-SEC
FUND 0.318 0.173 0.057
MAGNUM GILT
FUND 0.007 0.044 0.0027
HDFC GILT FUND 0.028 0.022 0.00057
PRU ICICI GILT
FUND 0.173 0.045 0.0024
BIRLA GILT PLUS 0.259 0.044 0.0032
INTERPRETATION
B E T A:
Beta of DSP ML G-Sec Fund is the highest, which indicate that volatility in this
specific schemes is more as compared to other fund. But at the same time Magnum Gilt
Fund and HDFC Gilt Fund has shown less risky investments.
ALPHA:
Returns on HDFC Gilt Fund is less but it has shown volatility also.But DSP ML
G-Sec Fund has taken risk but at the same time it has generated positive returns.
STANDARD DEVIATION:
DSP ML G-Sec has shown more deviation as compared to other G-sec funds.
65
HDFC LIQUID FUND
PRU ICICI LIQUID
MAGNUM INSTACASH
TEMPLETON INDIA LIQUID PLUS
JM BASIC FUND
66
HDFC Liquid Fund
HDFC Liquid Fund
RETUR RETUR RETUR RETUR RETUR
N N N N N
(%) (%) (%) (%) (%)
2-Apr 0.13% 1-Mar 0.00% 2-May 0.07% 1-Jun 0.07% 2-Jul 0.07%
16-Apr 0.02% 16-Mar 0.05% 16-May 0.02% 17-Apr 0.02% 16-Jul 0.02%
23-Apr 0.02% 25-Mar 0.05% 23-May 0.02% 24-Apr 0.02% 24-Jul 0.02%
27-Apr 0.02% 28-May 0.02% 28-Jun 0.02% 29-Jul 0.03%
29-Apr 0.05% 29-May 0.02% 29-Jun 0.02% 30-Jul 0.02%
30-Apr 0.03% 30-May 0.02%
31-May 0.02%
67
Pru ICICI Liquid
(%) (%) (%) (%) (%)
19-Mar 0.07% 17-Apr 0.03% 17-May 0.02% 17-Apr 0.04% 17-Jul 0.02%
26-Mar 0.03% 24-Apr 0.03% 24-May 0.02% 24-Apr 4.00% 25-Jul 0.02%
27-Apr 0.03% 28-May 0.02% 27-Jun 0.02% 29-Jul 0.03%
29-Apr 0.05% 29-May 0.02% 28-Jun 0.03% 30-Jul 0.02%
30-Apr 0.03% 30-May 0.02% 29-Jun 0.03% 0.01%
31-May 0.02%
68
Magnum InstaCash
RETUR
N RETURN RETURN RETURN RETURN
(%) (%) (%) (%) (%)
1-Mar 0.0599 2-Apr 0.06% 0.06% 1-May 1-Jun 0.00% 1-Jul 0.06%
24Mar 0.0003 24-Apr 0.02% 0.02% 23-May 23-Jun 0.02% 25-Jul 0.01%
30-Apr 0.02% 0.02% 29-May 29-Jun 0.02% 31-Jul 0.01%
0.02% 30-May
0.02% 31-May
TOTAL 0.0674 TOTAL 0.62% TOTAL 0.66% TOTAL 0.52% TOTAL 0.48%
Avg. Avg. 0.000221 Avg. 0.000212 Avg. 0.000185 Avg. 0.000164
RETURNS 0.002407 RETURNS 1 RETURNS 9 RETURNS 7 RETURNS 8
69
Templeton India Liquid Plus
RETUR RETUR
N RETURN RETURN RETURN N
(%) (%) (%) (%) (%)
1-Mar 0.00% 2-Apr 0.073 2-May 0.073 1-Jun 0.073 2-Jul 0.00%
27-Apr 0.02% 28-May 0.02% 27-Jun 0.02% 29-Jul 0.03%
29-Apr 0.04% 29-May 0.03% 28-Jun 0.02% 30-Jul 0.01%
30-Apr 0.02% 30-May 0.02% 29-Jun 0.02% 31-Jul 0.01%
31-May 0.02%
TOTAL 0.49% TOTAL
0.0057 TOTAL 0.079 TOTAL 0.0782 TOTAL 0.40%
Avg. Avg. 0.0031 Avg. 0.0030 Avg. 0.0031 Avg.
RETURNS 0.03% RETURNS 5 RETURNS 4 RETURNS 3 RETURNS 0.0002
70
(%) (%) (%) (%) (%)
1-Mar 0.70% 2-Apr -2.34% 2-May 1.21 1-Jun 0.56% 2-Jul 1.15%
25-Mar 26-Apr -1.07% 23-May 1.03% 26-Jun -0.77% 24-Jul -2.94%
26-Mar 27-Apr 1.67% 24-May 1.64% 27-Jun 1.12% 25-Jul -0.04%
27-Mar 25-May 0.65% 28-Jun 1.57% 26-Jul 2.43%
28-Mar
TOTAL -0.47 TOTAL 12.07% TOTAL 1.31% TOTAL 5.69% TOTAL 9.74%
RETURNS -0.02611 RETURNS 0.006035 RETURNS 0.06231 RETURNS 0.0027095 RETURNS 0.0046381
71
LIQUID FUNDS
sensex HDFC (Sm- (Bm- (Sm-Sm)*(Tm- (Tm-mean)*(tm-

Month returns Liq mean) mean) Tm) mean)
March -0.14 0.03 -0.132 0.002 -0.000264 0.000004
April 0.14 0.03 0.148 0.002 0.000296 0.000004
May 0.02 0.03 0.028 0.002 0.000056 0.000004
June -0.17 0.02 -0.162 -0.008 0.001296 0.000064
July 0.11 0.03 0.118 0.002 0.000236 0.000004
TOTAL -0.04 0.14 0.00162

MEAN -0.008 0.028
BETA 0.00162/ 0.08028 ALPHA 0.028

Pru
ICICI
Month sensex returns Liquid (Sm-mean) (Bm-mean) (Sm-Sm)*(Tm-Tm) (Tm-mean)*(tm-mean)
March -0.14 0.03 -0.132 -0.032 0.004224 0.001024
April 0.14 0.04 0.148 -0.022 -0.003256 0.000484
May 0.02 0.03 0.028 -0.032 -0.000896 0.001024
June -0.17 0.18 -0.162 0.118 -0.019116 0.013924
July 0.11 0.03 0.118 -0.032 -0.003776 0.001024
TOTAL -0.04 0.31 -0.02282 0.005834117

MEAN -0.008 0.062
BETA -0.02282/0.08028 ALPHA 0.059725959

-0.2843 Standard Deviation 0.0058
72
sensex (Sm-Sm)*
Month returns magnum (Sm-mean) (Bm-mean) (Tm-Tm) (Tm-mean)*(tm-mean)
March -0.14 0.0024 -0.132 0.002032 -0.000268224 0.00000413
April 0.14 0.0002 0.148 -0.000168 -0.000024864 0.00000003
May 0.02 0.00021 0.028 -0.000158 -0.000004424 0.00000002
June -0.17 0.00018 -0.162 -0.000188 0.000030456 0.00000004
July 0.11 0.0002 0.118 -0.000168 -0.000019824 0.00000003
TOTAL -0.04 0.00319 -0.00028688 0.00000183

MEAN -0.008 0.000638
BETA -0.00029/ 0.08028 ALPHA 0.000609412
Templeton
sensex India (Sm-Sm)*(Tm-
Month returns Liquid Plus (Sm-mean) (Bm-mean) Tm) (Tm-mean)*(tm-mean)
March -0.14 0.03 -0.132 0.022168 -0.002926176 0.00049142
April 0.14 0.003 0.148 -0.004832 -0.000715136 0.000023348
May 0.02 0.003 0.028 -0.004832 -0.000135296 0.000023348
June -0.17 0.003 -0.162 -0.004832 0.000782784 0.000023348
July 0.11 0.00016 0.118 -0.007672 -0.000905296 0.000058860
TOTAL -0.04 0.03916 -0.00389912

MEAN -0.008 0.007832
BETA -0.0039/ 0.08028 ALPHA 0.007443448
sensex JM Basic (Sm-Sm)*(Tm-

Month returns Fund (Sm-mean) (Bm-mean) Tm) (Tm-mean)*(tm-mean)
March -0.14 -0.00026 -0.132 -0.0153308 0.002023666 0.000235033
April 0.14 0.006 0.148 -0.0090698 -0.00134233 8.22613E-05
May 0.02 0.06231 0.028 0.0472402 0.001322726 0.002231636
June -0.17 0.0027 -0.162 -0.0123698 0.002003908 0.000153012
July 0.11 0.0046 0.118 -0.0104698 -0.001235436 0.000109617
TOTAL -0.04 0.075349 0.002772532 0.000934968

MEAN -0.008 0.01507
BETA 0.00277/ 0.08028 ALPHA 0.015346086
73

HDFC Liq 0.02018 0.028 0.000027
Pru ICICI -0.284 0.06 0.01
Magnum -0.0036 0.0006 0
Templeton
India -0.049 0.007 0.00021
JM Basic
Fund 0.0345 0.015 0.0093
INTERPRETATION:
BETA
In Liquid most of the schemes has shown more volatility except HDFC Liquid
Fund and JM Basic Fund. All other funds has been volatile as compared to SENSEX.
ALPHA
As the nature of Liquid Fund is to provide easy liquidy to investors, therefore the
return accepted from this type of fund is also less. Among these funds Magnum Instacash
has given less returns as compared to other funds.
STANDARD DEVIATION
Among the above mentioned schemes Pru ICICI has shown more volatility in its
portfolio. But Magnum Insta cash has shown no deviation in its portfolio.
Therefore for short term investors HDFC Liquid Fund is suitable as it has given
returns and at the same time in has not shown much volatility as compared to SENSEX
returns.
RECOMMENDATIONS
74
Remember to pack the following investment gems in your luggage as you set
forth on your financial journey. These guideposts reinforce and expand the key points
covered throughout Building Your Mutual Fund Portfolio.
• Diversify for investment success: Develop a solid plan based on your age, time
horizon, liquidity needs, income and risk tolerance. Stick with it until your circumstances
change.
• Periodically rebalance your holdings to your original asset allocation

benchmark: By doing this, you will wind up selling shares in expensive funds and
reinvesting in cheaper ones.
• Invest as much as you can in stock funds: As a rough rule, try to hold a
percentage at least equal to “100 minus your age” in stocks. Senior citizens might
consider 110 minus their ages to avoid growing too conservative.
• Don’t hop from fund to fund: Traders often lag the long-range returns of the
stock and bonds markets.
• Set your sights on building wealth slowly: Get rich quick schemes often
backfire. People who amass fortunes through speculation frequently also learn how it
feels to get poor quickly.
• Keep it simple: Basic investment plans often work best on the quest for wealth.
• Avoid gimmicks: Don’t invest in anything you don’t understand. Pain vanilla
funds survive the test of time better than faddish peers that make use of derivatives and
other arcane strategies.
• Do your home work before starting out: Never buy or sell Mutual Funds solely
on the basis of tips. If a suggestion seems to have merit, do your own analysis.
• Focus on risk, return and cost when evaluating funds: Keep in mind that a
fund’s risk and expenses are easier to predict than its return.
• Judge past performance with a grain of salt: Historic returns don’t always
predict future results, especially if a fund’s management or investment style has changed
recently.
• Don’t neglect the prospectus: You’ll find the guts of this document in the
“financial - highlights”. Look for past expense rations, portfolio turnovers, total annual
returns and year to year changes in assets.
75
• Consider hiring a stockbroker or financial planner if you need help with
your portfolio: Just make sure the individual is competent and will your needs. The
more you understand about investment risks, return and costs, better you can evaluate the
kind of jobs your advisor is doing.
• Don’t overlook estate planning in your investment game plan: A living trust
has important advantage over a will.
• Make sure your Mutual Fund accounts are titled correctly: Individual, joint,
custodial and trust account are four common alternatives. The manners of titling takes
precedence over any instructions in your heirs know about your accounts.
• Take advantage of fund company service: Telephone reps often can furnish
answers to your questions.
• Let time work for you: At 10 percent annually – the long run average return on
stocks your money doubles every 7.3 years, quadruples every 14.6 years and expands
tenfold every 24.2 years.
• Emphasize time over market timing: Buy good stock funds and stay with them
for the long haul. Even professional have trouble predicting the market’s next move.
• Invest regularly: It’s been demonstrated that you can do well over the long haul
even if you invest money each year at or near the market’s annual peak.
• Recognize that the risk of being in stock decreases as your holding period
lengthens: Known as time diversification, it works because the good years far outweigh
the bad over lengthy period. On average, seven out of every ten years are winners in the
stock market.
• Save as much of your paycheck as you can: The older you get and the higher
your income, the larger the percentage you should strive to set aside.
• Consider painless and efficient automatic investment plans, as offered by

many fund companies. Your monthly investment go straight into your chosen fund from
either a bank account or your paycheck.
• Pay attention to what T-bills yield relative to stocks: by dividing the yield on
the former by the yield on the latter, when 91 days T-bills yield more than twice the
sensex 30’s yield, it could signal that stocks have become overpriced.
76
• Conversely, recognize the excellent value offered by stocks any time the T-
bills /stock yield ration is considerably below 2. At the extreme, stock market condition
could be highly favorable when both numbers are about equal.
• Don’t expect good or bad times to last forever. Stocks can stay overvalued or
undervalued for surprisingly long stretches, but bull markets always come to an end, and
so do bear markets.
• Use standard deviation instead of beta to evaluate a mutual fund’ risk: The
former is a pure, unbiased measure of volatility, which is not tied to a particular stock-
price index as is beta. Standard deviation measures the extent to which returns bob up and
down around their average.
• Examine your fund’s composite PE ratio: The average price earnings ratio for
all the stocks it holds. If a fund’s PE is well above that of the sensex 30’s, it faces greater
possible losses in a correction or bear market.
• Remember that volatile funds might not be so bad when held in appropriate
proportions within a broad portfolio. Combining funds that rise and fall at different
times could result in an overall smoother ride.
• Combine funds that follow the growth and value stock picking styles: as one
style normally is out of favour when the other is in. your portfolio’s fluctuations will be
less erratic if you include investments from both camps.
• Don’t give up stock funds, even if you’re retired: A 65 year old retiree can
expect to live another 20 years or so. If you need income, take your dividends in cash. If
that’s insufficient, make systematic withdrawals from a diversified portfolio.
• But don’t set up a systematic withdrawal plan without forst calculating how
long your capital will last: given your expected return and withdrawal rate. Considering
the impact of taxes and inflation, you risk depleting your nest egg if your annual
withdrawal rate exceeds about 6 percent.
• Stay away from funds that are not members of reputable families: Unless you
know the manager has an excellent record. In particular, avoid tiny funds those with assts
less than 400 million unless they are promising members of an established group
77
• Don’t assume that laggard funds will bounce back: Long term losers have
perennially poor performance records, along with outsized expenses, a small and
declining asset base, high portfolio turnover and, sometimes, legal problems.
• Don’t look to your nest egg for thrills and excitement: Some times, relatively
dull investments, such as index funds, are best.
• Keep in minds that about 70 percent of actively managed funds under

perform the market: because operating expenses, transaction costs and cash holdings
lower returns. This represents the main argument in favor of index funds.
• Favor index funds for a meaningful “core ”portion of your stock allocation:
say 25 to 50 percent or so. With these portfolios you need not worry that a fund manager
might jump ship. With a passive approach, it doesn’t matter so much who’s in control.
• Beware of gimmicks when shopping for an index fund: Avoid “enhanced”

index portfolios that claim they can outperform the sensex or other benchmarks. Plain
vanilla products with rock bottom costs are best.
• Include small cap and international funds in your portfolio for better risk
adjusted performance: Younger investors with long time horizons should take a
significant stake in these categories.
• Look beyond a fund’s name to its actual investment policies and portfolio
holdings.
• Avoid small stock portfolios with assets greater than 20,000 million or so
unless you’re convinced the management is exceptionally talented.
• Keep in mind that small stocks move in cycles of five to seven years, during
which they either outperform or underperform the large blue chips.
• Conversely, do take bigger positions in small stocks when they’re cheap:

Small companies represent excellent value when the PE of any funds approximates that
of the sensex.
• Don’t hesitate to venture abroad: International investing is a great way to round

out a portfolio, since about two-thirds of world stock market values exist outside India.
• Lean to international rather than global funds for your over-seas exposure:
The former invest exclusively in foreign markets, whereas the latter have stakes in
78
stateside stocks as well. With international funds, you can fine tune your overseas
exposure more precisely.
• Check the foreign weightings of your domestic stock funds: which could hold
up to 15 percent or more of their assets in non- Indian issues to try to improve
performance. You may already have more international exposure than you think.
• Maintain modest stake in emerging stock markets: as well if you have a

lengthy investment horizon. Developing nations offer exciting long term growth
potential.
• Don’t expect international diversification to reduce your portfolio’s volatility

all the time: Normally, it works reasonably well, but during a global panic, all the
world’s major stock exchanges could tumble together.
CONCLUSION:
I order to study the concept of mutual fund we should note that a mutual fund is a
trust that pools the money of several investors and manages investments on behalf. The
fund collects this money from investors through various schemes. Each schemes is
differentiated by its objectives of investments or in other words a broadly defined
purpose of how the collected money is going to be involved.
79
Investors invest in mutual fund due to following advantages: they have
professional management, diversification, convenient administration, return potential,
low cost, liquidity.
By comparing the above mentoined schemes I came to know the risk and return
relation between the specified schemes. Therefore investors before investing in any
Mutual Fund schemes they should study the risk and return relation. And if the risk and
returns is been matched with their planning, then only the investors should go for Mutual
Fund schemes.
So the future of mutual funds in India is bright, because it meets investor s needs
perfectly. This will give boost to Indian investors and will attract foreign investors also. It
will lead to the growth of strong institutional framework that can support the capital
markets in the long run.
BIBLIOGRAPHY:
www.indiainfoline.com
www.amfiindia.com
www.mutualfunds.com
www.investopidia.com
80
MUTUAL FUNDS IN INDIA BY: Nalini Prava Tripathy
AMFI WORK BOOK
81

Comparative Analysis of Mutual Fund With India Infoline by Nikita Chinchane

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Comparative Analysis of Mutual Fund With India Infoline by Nikita Chinchane

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A PROJECT REPORT

“COMPARATIVE ANALYSIS OF MUTUAL FUND ON THE

INDIA INFOLINE, PUNE

NIKITA BHARAT CHINCHANE

MBA Semester III

In Partial Fulfillment of the Requirements of the

It was my privilege to work with India Infoline Ltd. I am indebted to Kamlesh

Sr.No. TOPIC Page no.

5 FINDINGS AND ANALYSIS 6

7 ABOUT INDIA INFOLINE 7

8 INTRODUCTION OF MUTUAL FUND 12

9 COMPARISON OF MUTUAL FUND 37

For this I have taken the following parameters:

Analyzing Mutual Fund using:-

3. Standard Deviation:- The standard deviation of a fund measures this risk by

4. Schemes selected for project:-

To evaluate investment performance of selected mutual funds in terms of risk and

Secondly, to compare and evaluate the performance of different schemes of mutual

fund companies on the basis of risk, return and volatility

Research Methodology is a very organized and systematic medium through which

basis of risk, volatility and return.

The collection of information is based on the secondary probe. The information

(b) Standard Deviation.

INDIA INFOLINE is a one-stop financial services shop, most respected

India Infoline Ltd:

Followed by other regions.

India Infoline Securities Pvt Ltd:

India Infoline Commodities Pvt Ltd:

India Infoline Distribution Co Ltd (IILD):

Mortgages & Loans:

India Infoline Insurance Services Ltd:

Management of India infoline:

Mr. Nirmal Jain

Venkataraman is the co-promoter and Executive Director of India Infoline Ltd.

The Board of Directors

Mr Sat Pal Khattar (Non Executive Director)

Mr Sanjiv Ahuja (Independent Director)

Mr Nilesh Vikamsey (Independent Director)

Mr Kranti Sinha (Independent Director)

Organization of a Mutual Fund

asset management company (AMC), and custodian. The trust is established by

Company (AMC) approved by SEBI manages the funds by making investments in

compliance of SEBI regulations by mutual fund.

company or board of trustees must be independent i.e. they should not be

launch their schemes.

BIRLA SUN LIFE MUTUAL FUND

Rs.10, 000 crores.

BANK OF BARODA MUTUAL FUND

HDFC MUTUAL FUND

ING VYSYA MUTUAL FUND

SAHARA MUTUAL FUND

STATE BANK OF INDIA MUTUAL FUND

TATA MUTUAL FUND

KOTAK MAHINDRA ASSTE MANAGEMENT COMPANY

Kotak Mahindra Asset Management Company is a subsidiary of KMBL. It is

RELIANCE MUTUAL FUND

STANDARD CHARTERED MUTUAL FUND

FRANKLIN TEMPLETON MUTUAL FUND

The group, Franklin Templeton investment is a California based company with a

ESCORT MUTUAL FUNDS

ALLAINCE CAPITAL MUTUAL FUND

BENCHMARK MUTUAL FUND

CAN BANK MUTUAL FUND

Chola Mutual Fund under the sponsorship of Cholamandalam Investment &

sensex HDFC (Sm- (Mm- (Sm-Sm)(Tm- (Tm-mean)(tm-

sensex (Sm- (Rm- (Sm-Sm)(Tm- (Tm-mean)(tm-