Final Draft Ashi

EXECUTIVE SUMMARY
The private and MNC banks in India is today paving through one of its
rough times. Though it has a tremendous growth potential, the competition and
related factors have made the scenario worst. This has really compelled the
banking industry to come out with improved performance with their customers.
ABN AMRO Bank as usual remains vibrant by attracting all the customers.
The Mutual Fund Industry has come a long way since the days of the UTI. The
numbers of mutual funds has also increased over the years. Mutual funds are seen
as an avenue for the retail investors to enter the stock market and bonds. They
provide the professional competence to the retail investor. In India the retail
investor is increasingly seeing mutual fund as an alternative investment avenue to
the low-yielding bank deposits. ABN AMRO has got its own AMC called ABN
AMRO AMC who intelligently manages the funds of their investors, which keep a
good record of their risk and make good yield or return on investment.
I am honored to be associated with ABN AMRO Bank to work on this

project entitled: A Study On
“ABN AMRO BANK AND COMPARITIVE STUDY FOR MUTUAL FUND
INVESTMENTS WITH REFERANCE TO ABN AMRO MUTUAL FUNDS”.
The project lasted for 10 week and the project has been conducted in the
year 2005 i.e., from June 20th to August 27th 2005
The study was mainly aimed to understand the performance of ABN

AMRO mutual funds by comparing it with other selected funds and identify the
shortcomings and benefits of ABN AMRO mutual funds. The study covers the
other vital objectives like:
• To find out the best performing scheme for investment by evaluating the
performance of the scheme among various AMC’S over a year’s
performance.
• To compare ABN AMRO’s scheme with the selected schemes and know
the performance and suggest methods to improve shortcomings.
CMR INSTITUTE OF TECHNOLOGY, BANGALORE -1-

• Enabling the advisors to suggest the customers to choose among the
schemes by looking upon the needs and requirements of the customers.
• To give necessary suggestions for the improvement of the ABN AMRO’s
funds in the areas of shortcomings.
• To help the bank in the sales of Mutual Fund products through proper and
accurate advises on investments for customers and earn more commission
on it.
• Performance evaluation of the investment, to compare the services of ABN
AMRO AMC with other AMC’S, to know the best performer among
different AMC’S and to suggest remedial measures to increase the market
performances.
• To check the volatility and expenses involved in the ABN AMRO MF
schemes.
• To compare the fund size of each scheme of each AMC’S to identify the
best growing scheme in the market.
• To compare the risk involved and the yield in each scheme.
• To compare the scheme that yields the best in the shortest time period.
The study revealed that market performance, proper advisor-customer interaction

and periodical feedback does have a greater impact on customers interest and
hence success.

1.1 INDUSTRY PFOFILE
BANKING SCENARIO IN INDIA, POST 90’S
Banks in India have traditionally offered mass banking products. Most

common deposit products being Savings Bank, Current Account, Term deposit
Account and lending products being Cash Credit and Term Loans. Due to Reserve
Bank of India guidelines, Banks have had little to do besides accepting deposits at
rates fixed by Reserve Bank of India and lend amount arrived by the formula
stipulated by Reserve Bank of India at rates prescribed by the latter.
PLR (Prime lending rate) was the benchmark for interest on the lending
products. But PLR itself was, more often than not, dictated by RBI. Further,
remittance products were limited to issuance of Drafts, Telegraphic Transfers,
Bankers Cheque and Internal Transfer of funds. In view of several developments
in the 1990s, the entire banking products structure has undergone a major change.
As part of the economic reforms, banking industry has been deregulated and made
competitive. New players have added to the competition. IT revolution has made
it possible to provide ease and flexibility in operations to customers.
Rapid strides in information technology have, in fact, redefined the role

and structure of banking in India. Further, due to exposure to global trends after
Information explosion led by Internet, customers - both Individuals and
Corporates - are now demanding better services with more products from their
banks. Financial market has turned into a buyer's market. Banks are also changing
with time and are trying to become one-stop financial supermarkets. Market focus
is shifting from mass banking products to class banking with introduction of value
added and customized products.
A few foreign & private sector banks have already introduced customized
banking products like Investment Advisory Services, SGL II accounts, Photo-
credit cards, Cash Management services, Investment products and Tax Advisory
services.

A few banks have gone in to market mutual fund schemes. Eventually, the
Banks plan to market bonds and debentures, when allowed. Insurance peddling by
Banks will be a reality soon. The recent Credit Policy of RBI announced on
27.4.2000 has further facilitated the entry of banks in this sector. Banks also offer
advisory services termed as 'private banking' - to "high relationship - value"
clients.
The bank of the future has to be essentially a marketing organization that

also sells banking products. New distribution channels are being used; more &
more banks are outsourcing services like disbursement and servicing of consumer
loans, Credit card business. Direct Selling Agents (DSA) of various Banks go out
and sell their products. They make house calls to get the application form filled in
properly and also take your passport-sized photo. Home banking has already
become common, where you can order a draft or cash over phone/internet and
have it delivered home. ICICI bank was the first among the new private banks to
launch its net banking service, called Infinity. It allows the user to access account
information over a secure banking scenario in India, post 90’s.
Banks in India have traditionally offered mass banking products. Most common
deposit products being Savings Bank, Current Account, Term deposit Account
and lending products being Cash Credit and Term Loans. Due to Resensumer
durable loans, education loans, loans against share, finance against gold.
IMPORTANT PHASE IN THE HISTORY OF THE MUTUAL FUND
a) 1963-1987: The Unit Trust of India was the pioneer to start up the
MUTUAL FUNDS in India created by the act of 1963.UTI created a
number of schemes during this Period such as children’s plan, equity
oriented plan schemes and offshore Funds During this period UTI
managed assets of Rs.6700 crores.

b) 1987-1993: In 1987 public sector banks and financial institutions entered
in this industry. SBI mutual funds were the first non UTI funds set up in
1987.
c) 1993-1996 : In1993 mutual fund industry was opened to private sector

players, both India and foreign.SEBI’s first set up of regulation for the
industry were formulated n 1993.
d) 1996-1999: The implementation of the new SEBI regulations and the

restricting of the mutual fund industry led to the rapid growth of
asset.UTI came under the voluntary SEBI regulation.
e) 1999-2003: This stage marked the rapid growth off the industry, with a
significant increase in the market share of the private sector players. Asset
crossed 100000 crores .Bond funds and liquid funds registered the highest
growth.

1.2 COMPANY PROFILE
Mission, History and Network
Mission:
"ABN AMRO's mission is to create maximum economic value for our
shareholders through a constant relationship focus on the financial services needs
of our chosen client segments and a strict adherence to our financial targets. We
are operating in three principal customer segments, whereby the objective is to
maximize the value of each of these businesses as well as the synergies between
them. Excellence of service to our clients and leadership in our chosen markets are
of paramount importance to our long-term success. The Bank's corporate values
play an integral role in the fulfillment of our mission."
History:
On 29 March 1824 King Willem-I issued a royal decree creating the
Nederlandsche Handel-Maatschappij with the aim of reviving trade between the
Netherlands and the Dutch East Indies. In 1964, NHM merged with De Twentsche
Bank to form Algemene Bank Nederland (ABN), while Amsterdamsche Bank
and Rotterdamsche Bank joined to become Amsterdam-Rotterdam (Amro) Bank.
In 1991, these two banks merged as ABN AMRO Bank. Today, ABN AMRO
Bank has a powerful presence in world markets, building on a tradition of
stimulating international trade.
Network:
As an international bank, they have more than 3,500 branches in over 70
nations across the globe. ABN AMRO, the Network Bank caters to everyone’s
needs both at home and abroad.

Corporate Values:
ABN AMRO’s Corporate Values provide the foundation for the bank's
newly introduced Business Principles. The bank formulated these Corporate
Values in 1997.
Integrity:
Above all, they are committed to integrity in all that they do, always, everywhere.
Teamwork:
Teamwork is the essence of their ability to succeed as a trusted preferred supplier
of financial solutions to their clients. Their overriding loyalty is to the good of the whole
organization, requiring them all to learn from each other and to share their skills and
resources across organizational boundaries for their clients' benefit.
Respect: “We respect every individual. We draw strength from equal opportunity and
diversity, at the same time supporting personal growth and development. We value and
we all benefit from the entrepreneurial spirit of each individual.”
Professionalism:
To be of service to their clients they are committed to the highest standards of
professionalism, pursuing innovation, deploying imagination, being open to new ideas
and acting decisively and consistently. They are determined to deliver outstanding quality
so that their relationships with their clients be long lasting and close.

ABN-AMRO (MAIN BRANCH)
PROFILE:
The goal of ABN AMRO is to create value for its clients. Key in their
relationship approach is a constant focus on the financial services needs of their
client segments. It is through the professionalism and motivation of their global
staff that they realize this value, resulting in maximum economic value for their
shareholders.
They are active in three principal customer segments: Consumer &

Commercial Clients, Wholesale Clients and Private Clients & Asset Management.
The objective is to maximize the value of each of these businesses as well as the
synergies between them. Excellence of service to their clients and leadership in
their chosen markets are of paramount importance to their long-term success.
The ABN AMRO Corporate Values and Business Principles provide the
framework within which the people working under are carrying out their
operations.
In brief...
ABN AMRO is a prominent international bank, its history going back to 1824.
ABN AMRO ranks 10th in Europe and 22nd in the world based on tier 1 capital,
with over 3,400 branches in more than 60 countries, a staff of 110,000 employees
and total assets of more than EUR 622 billion (as per end December 2004).

ABN AMRO branches in INDIA
With assets over US $504 billion and an AA credit rating, ABN AMRO
Bank ranks among the top 10 banks in the world in size and strength. Their
international network comprises 3,568 branches and offices in over 320 cities and
76 countries and territories, with over 100,000 highly qualified staff. As a global
bank, they can handle the most complicated cross-border transactions, yet they
also understand the subtleties of local markets.
ABN AMRO in India
ABN AMRO Bank (India) has an eight-decade long experience of the

Indian business scenario.
Traditionally known as a strong "diamond-financing bank", it has turned

into a bank providing a comprehensive range of services with a difference.
ABN AMRO (India) has branches in Mumbai, Delhi, Chennai, Kolkata,

Pune, Baroda, Hyderabad, Bangalore and Noida with each branch servicing multi-
product relationships.
Consumer banking offers a suite of products for every one’s personal

financial needs offered through various channels including ATMs, Doorstep
Banking and Net Banking.
ABN AMRO Bank in India enjoys a strong image as a corporate bank with
comprehensive Global Transaction Services. Its investment banking services are
delivered through ABN AMRO (India) Corporate Finance and the Global
Financial Market Teams, which strive to maintain the permanent position, they
have built in the marketplace.
ABN AMRO Bank has launched its Private Banking Services in India
offering a comprehensive range of high quality Portfolio Advisory Services along
with a comprehensive transaction execution platform, complemented by
personalized Banking and custodial services.

Three global Strategic Business Units (SBUs):
I. Consumer & Commercial Clients (C&CC) - for individuals and small-

to medium-sized enterprises requiring day-to-day banking. We serve
approximately 15 million clients, mainly through our major presence in three
home markets: the US Midwest, the Netherlands and Brazil. The Business Unit
New Growth Markets is also expanding its consumer and commercial operations
in selected countries such as India, Hungary and Thailand.
II. Private Clients & Asset Management (PCAM)- for individuals and
institutional investors. ABN AMRO is a leading player in private banking both in
the Netherlands and in France, and has strong positions in Luxembourg, Miami
and Switzerland. Private Clients ranks among the world's top 10, with EUR 96
billion in Assets under Administration. Asset Management has a local presence in
30 countries and EUR 150 billion in Assets under Management.
III. Wholesale Clients (WCS) - for major international corporations and

institutions. This is one of the largest Europe-based wholesale banking business
with around 10,000 clients, 20,000 staff and operations in over 40 countries. With
a global network, specialists in all major industry sectors and a broad range of
products, ABN AMRO provides local and global expertise for complex cross-
border deals.
PROFILE OF ABN AMRO India
ABN AMRO Bank (India) has an 81-year long experience of the Indian business
scenario. Traditionally known as a strong "diamond-financing bank", it has turned
into a bank providing a comprehensive range of services with a difference.
ABN AMRO (India) has had a long-standing presence in India since 1920, in
Kolkata and Mumbai. At that time, the bank mainly worked for diamond clients.
The bank took off in a big way in 1991, after the merger of ABN and AMRO
worldwide. The Delhi branch was functional in the very same year. ABN AMRO
CMR INSTITUTE OF TECHNOLOGY, BANGALORE - 10 -

was launched in other cities throughout India between 1994 and 1999. They were
Chennai in 1994, Pune in 1997 and Baroda in 1999, while the Hyderabad and
Bangalore branches were opened in 2001. The bank acquired the retail business of
the Bank of America in 1999. The year 2002 saw the opening of the Noida office.
AA Securities [I] Pvt. Ltd. formed in September 1998.
ABN AMRO’s ACHIEVEMENTS
 Second overall in banking industry: Financial Express-BRIS survey 2002

 “Best Cash Management Award in September 2002"
 The Banker Top Foreign Bank in India: Economic Times - CMIE survey
2002.
 Top Foreign Bank in India: Economic Times - CMIE survey 2002.
 Corporate Finance India: Ranked Second in M&A in the Investment
Banking arena in 2001 - Economic Times.
 ABN AMRO Securities India: Best Foreign Bond House; No 1 Arranger
in Private Sector: Euro money 2000.
 Top Bank on "Management Quality" parameter: Business India 'Best
Banks Survey 2000'.
 7th Most Admired Commercial Bank in the World: Fortune Magazine,
2000.

The products and services in consumer banking.
Consumer Banking
• Freedom Credit Card
• Smart Gold Card
Credit Card • Card for you
• Services
• FAQs
• Loans against Securities
Loan Products • Car Loans
• Personal Loans
• Savings Accounts
Deposit Products • Value+ Current Accounts
• Easy Draw Fixed Deposits
NRI Services • Value Added Services
• Products and services
Investment Services • Mutual funds
• Debit Card
• Net Banking
• Express Cash
• ATM Services
• 24 Hour Bank by Phone
Services
• Bill Payment
• Doorstep Banking
• Depository Services
• National Access
• 365 Days Banking
• Extended Banking Hours

1.3 PRODUCT PROFILE
ABN AMRO bank offers a variety of products to its investors to facilitate them to
invest their money according to the portfolio they desire and as per their future
expectations. ABN AMRO bank acts as a lender to the customer in providing a
variety of investment schemes in Mutual Fund not only from ABN AMRO AMC
but also from many AMC’s like ICICI PRUDENTIAL, RELIANCE, BIRLA
SUN LIFE MF, FRANKLIN TEMPLETON INVESTMENT. Etc. This is enabled
by having tie-ups with number of AMC’s which also helps bank to expand its
financial operations and also market share.
The numbers of schemes offered for public investment are as follows:
• EQUITY SCHEME
1. ABN AMRO EQUITY FUND.

2. ABN AMRO OPPORTUNITY FUND.
3. ABN AMRO DIVIDEND YIELD FUND.
• INCOME SCHEME
1. ABN AMRO MONTHLY INCOME FUND.

2. ABN AMRO FLEXI DEBT FUND
• LIQUID SCHEME
1. ABN AMRO FLOATING RATE FUND

2. ABN AMRO CASH FUND.

EQUITY SCHEME
1. ABN AMRO EQUITY FUND
Investment Objectives:
The investment objective of the fund is to generate long-term capital growth
from a diversified actively managed portfolio for equity and equity related
securities. The scheme will invest in a range of companies, with a bias towards
large and medium market capitalization companies.
Fund Manager:
Mr. Mihir Vora
NAV to the date:

Growth: Rs. 13.97
Dividend: Rs. 12.10
Benchmark Index:
S&P CNX Nifty.
Load Structure:
Entry load: In respect of each subscription / switch-in of units for an amount less
than Rs. 5 Crores in value: 2.25% in respect of each subscription of units for an
amount equal to Rs. 5 Crores in value or more: Nil.
No entry load for switch –in from ABN AMRO opportunities fund
Exit load: Nil

2. ABN AMRO OPPORTUNITIES FUND
Investment Objectives:
The investment objective is to generate long-term capital growth from an
actively managed portfolio of equity and equity related securities. The scheme
will aim to identify attractive investment opportunities in companies across all
ranges of market capitalization viz- small, large and medium capitalization and
across all sizes in terms of turnover, balance sheet size etc. The scheme has the
flexibility to actively shift portfolio concentration between different market
capitalization buckets. The scheme also retains the flexibility the flexibility to
hold from time to time relatively concentrated investment in a few sectors than
plain diversified equity funds.
Fund Manager:
Mr. Mihir Vora
NAV to the date:

Growth option: Rs.10.307
Dividend option: Rs. 10.307
Benchmark Index:
BSE200.
Load Structure:
Entry load: In respect of each subscription of units for an amount les than Rs. 5
Crores in value: 2.25% In respect of each subscription for an amount equal to Rs.5
Crores in value or more: Nil.
No entry load payable for switch-in from AMN AMRO Equity Fund.
Exit load: Nil.
Initial Issue expenses: Initial issue expenses to the maximum of 2% of the amount
collected during the IPO (after charging entry load) have been charged to the

scheme. The initial issue expense will be amortized over the period not exceeding
five years or such shorter period as approved by the Trustee.
INCOME SCHEME
ABN AMRO FLEXI DEBT FUND:

Investment Objective:
The primary objective of the scheme is to generate income from investments from
a range of debt and money market instruments of various maturities with a view to
maximize income while managing an optimum balance between yield , safety and
liquidity.
Fund Manager:
Mr. Mahendra Jajoo
NAV to the date:

Quarterly Dividend option: Rs.10.1455
Half yearly Dividend option: Rs. 10.1458
Average Maturity:
37 days
Benchmark Index:
CIRISIL Composite Bond Fund Index.
Load Structure:
Regular Plan: there is no Entry or Exit load.
CDSC: In respect of each subscription of units for an amount less than Rs. 10
lakhs in value, a CDSC of o.50% is payable is payable if the units are redeemed
with in 6 months from the date of allotment. In respect of each subscription of
units equal to Rs. 10 lakhs in value or more, no CDSC is payable.
Institutional Plan:

No entry load or exit load for CDSC.
ABM AMRO MONTHLY INCOME PLANS:
The primary objective of the firm is to generate regular returns through investment
primarily in debt and money market instruments. The secondary objective of the
scheme is to generate long-term capital appreciation by investing a portion of the
scheme’s assets in equity and equity related securities.
Fund Manager:
Mr. Mahendar jajoo
NAV to the date:

Growth option: Rs. 10.7454
Monthly Dividend option: Rs.10.3537
Quarterly Dividend option: Rs.10.4381
Average Maturity:
13 days.
Benchmark Index:
CIRISIL MIP Blended Index
Load Structure:
There is no Entry load or Exit load.

CDSC: In respect of each subscription of units for an amount less than Rs. 10
lakhs in value, a CDSC of 0.50% is payable if units are redeemed with-in 6
months from the date of allotment. In respect of each subscription of units equal to
Rs. 10 lakhs in value or more , no CDSC is payable.

LIQUID SCHEME
ABN AMRO CASH FUND:
The primary objective of the scheme is to enhance income consistent with a high
level of liquidity, through a judicious portfolio mix comprising of money market
and debt investment.
Fund Manager:
Mr. R.Sivakumar
NAV to the date:

Regular plan:
Dividend option: Rs. 10.000
Institutional Plan:
Daily Dividend option: Rs. 10.000
Average Maturity:
132 days.
Benchmark Index:
CIRISIL Liquid Fund Index
Load Structure:
There is no Entry or Exit load or CDSC

ABN AMRO FLOATING RATE FUND:
The primary objective of the fund is to provide income consistent from the
prudent risk from a portfolio comprising substantially of floating rate debt
instruments, fixed rate debt instrument swapped for floating rate return, through
the use of OTC or exchange rate derivatives. The scheme may also invest in fixed
rate and money market instruments and/or floating rate return swapped through
fixed rate return through the use of OTC or exchange trade derivatives.
Fund Manager:
Mr. R.Sivakumar
NAV to the date:

Regular plan:
Monthly Dividend option: Rs. 10.0439
Institutional option:
Daily Dividend option: Rs. 10.000
Monthly Dividend option: Rs.10.0446
Average Maturity:
56days
Benchmark Index:
CRISIL Liquid Fund Index
Load Structure:
There is no Entry or Exit Load or CDSC.

1.4 OPERATIONAL DEFINITION OF CONCEPTS
INTRODUCTION
A mutual fund is a pool of money, collected from the investors, and is

invested according to certain investment objectives.
A mutual fund is created when investors put their money together. it is
therefore a pool of the investors’ funds. The most important characteristic of a
mutual fund is that the contributors and the beneficiaries of the fund are the same
class of people, namely investors. The term mutual fund means that investors
contribute to the pool, and also benefit from the pool. There are no other claimants
to the funds. The pool of funds held mutually by investors is the mutual funds. A
mutual fund’s business is to invest the funds thus collected, according to the
wishes of the investors who created the pool.
CHARACTERASTICS OF A MUTUAL FUND.
1. The ownership of the mutual fund is in the hands of the investors

2. Investment professionals who earn a fee from their services manage the
mutual funds
3. The value of the portfolio is updated every day.
4.The value of one unit of investment is called as the net asset value or NAV.
5. Investment portfolio is created according to the stated investment objective
of the fund.
ADVANTAGES OF MUTUAL FUND TO INVESTORS
1. Portfolio diversification.
2. Professional management.
3. Reduction in risk.
4. Reduction of the transaction cost.
5. Liquiduity

6. Convenience and flexibility.
Investors in the mutual fund industry has choice of around 40 mutual funds,
offering nearly 500 products .It is also possible for the investors to decide the
manner in which their returns would be distributed and choose from daily,
monthly, qarterly or annual payouts or reinvestment of the dividends into the
mutual fund product itself or a growth option that would seek growth in the
investment over distribution of income.
HOW DOES MUTUAL FUND REDUCE RISK
MUTUAL FUND invests in portfolio of securities .This means all the funds are
not invested in the same investment venue. This is done by holding a diversified
investment portfolio in a wise way to reduce risk .Since the investors lack
professional experience the diversified portfolio is usually created by the AMC’S
itself.
PROFESSIONAL MANAGEMENT OF MUTUAL FUNDS
 Mutual funds are managed by the investment managers.(AMC) who are

appointed by the trustees.
 AMC’S regulated by the SEBI compete for the funds under management
therefore bring professional expertise and are bound by regulatory and trustee
supervision.
 Regulations allow trustees to monitor the performance of the AMC, with
regulations to safe guard the interest of the investor.
 Investment managers and the funds are bound by the AMFI code of the ethics
which foster professional standards in the industry.
INFORMATION TO THE INVESTORS
A periodical statement of investment regarding the performance is seen to the

investor. They disclose the following:

1. Daily NAV by phone or by
internet.
2. Complete portfolio of the
fund and commentaries of the fund manager on how they are managing fund.
3. Credit quality of the investment and the behavior of the NAV since inception
of the fund.
MUTUAL FUND PRODUCTS
OPEN-ENDED AND CLOSED-ENDED FUNDS
In an open-ended fund, investor can buy and sell units of the fund, at the NAV
related prices, at any time, directly from the fund. The pool of fund is open for
additional sale and repurchases. Therefore the amount of fund the mutual fund
manages and the number of units varies every day. Open ended funds are offered
for sale at a prespecified price and, say Rs.10,in the initial offer period. After pre
specified period, say 30 days, the fund is declared open for further sale and
repurchases. This traction happens at computed NAV price.
A closed-ended fund is open for sale to the investor for a specific period , after
which the sale are closed .Any further repurchasing or buying of the units happens
only in the secondary market. There by new investor can buy from the existing
investor and the existing investor can liquidate their units by selling them to the
other interested buyer. There by the pool of funds are kept constant.
STRUCTURING THE RETURNS TO THER INVESTOR.
Mutual Fund investors has choice of structure for their returns from the.
Dividend option
Growth option
DIVIDEND OPTION

Investor who choose dividend option will receive dividends from the
mutual funds as and when such dividends are declared. Dividends are paid in the
form of warrants or directly credited to the investor’s bank account. In a normal
dividend plan periodicity of the dividends are decide by the fund manager. who
may pay annually or interim dividends variant to the normal dividend plan is the
pre-specified plan which can vary from daily, weekly, monthly, quarterly, half
yearly or annualy.Investor can choose the frequency of dividend distribution that
suits their requirements.
GROWTH OPTION
Investor who do not require periodic income plan can choose the growth plan,
where the incomes earned are retained in the investment portfolio, and allowed to
grow, rather than being distributed to the investors. Investor with long-term
investment horizons and limited requirements for income choose this plan.
PRODUCTS AVAILABLE WITH RESPECT TO INVESTMENT

OBJECTIVES
Depending on the investment portfolio that is created the following are the
types of products that are offered by the mutual funds:
Equity funds
Debt funds
Balanced fund
EQUITY FUNDS
These are those funds that primarily invest in the equity shares of the
company .There are variety of ways in which an equity portfolio can be created
for the investors .These includes.
Simple equity fund

Primary market funds
Sectoral funds

Index funds
Other equity funds
DEBT FUNDS
Debt funds are those funds that are pre-dominantly invested in the debt
securities. Since most debt securities pay periodic rate of interest to the investors,
these funds are also known as income funds. However it must be remembered that
funds investing in debt products can also offer a growth option to their investors.
What is important is that the portfolio is predominantly made up of debt securities.
The universe of debt securities comprises of long term instruments such as bond
issued by the central and the state government , public sector organization ,public
financial institutions and private sector companies and short term instruments
such as call money lending; commercial papers ,certificates of deposits and the
treasury bills. Debt funds tend to create a variety of options for investors by
choosing one or more of these segments of the debt markets in their investment
portfolio.
GILT FUNDS
Gilt invests in securities that are issued by the government, and therefore does
not carry any credit risk. These funds invest in short and long term securities
issued by the government. These funds are preferred by institutional investors who
have to invest only in the government papers. These funds also enable retail
investors to participate in the market of government securities, which otherwise is
a large-ticket market.
STRUCTURE OF MUTUAL FUNDS IN INDIA
The structure of mutual funds in India is governed by the SEBI (Mutual

Funds) Regulations,1996(here in there after referred to as SEBI regulations)

.These regulations make it mandatory for mutual funds to have a three-tier
structure of Sponsor-Trustee-Asset Management Company (AMC).
The sponsor is the promoter of the mutual fund and appoints the Trustees.
The trustees are responsible to investors in the mutual fund and appoint
the AMC for managing the investment portfolio.
The AMC is the business face of the mutual fund as it manages all the
affair of the mutual fund .
The mutual fund and the AMC have to be registered with the SEBI.
SEBI regulations also provide for who can be the sponsor , trustee and the
AMC , and specify the format of the agreement between the these entities. These
agreements provide for the rights, duties obligations of the three entities.
The UTI is also structured as a trust. The important difference though is that
UTI does not have sponsors or a separate AMC .Financial institutions and bank
that contributed to the initial capital of the UTI have their representatives on the
UTI’s board of Trustees, which oversees the operations of the UTI. The chairman
appointed by the Board, who in turn employs managers and the staff to run its
activities, manages UTI.
HOW ARE MUTUAL FUNDS STRUCTURED
Mutual funds can be structured in following:
a. Company form, in which investors hold shares .In this structure, management
of the funds are in the hands of the elected board, which inurn appoints investment
Managers to manage the funds.

b. Trust FORM, in which the funds of the investors are held by trust, on behalf of
the investor the trust appoints the investment managers and monitor their
functioning in interest of the investor
The company form of organization is very popular in the United States. In India
mutual funds are organized as trusts. The trust is created by the sponsor, who is
actually the entity interested in creating the mutual fund business. The trust is
either managed by the Board of trustees, or by a trustee company, formed for this
purpose. The investor’s funds are held by the trust.
WHO ACTUALLY MANAGES THE MUTUAL FUNDS
The sponsors, acting through the trustees, appoint all the functionioners
required for managing investor’s money. These functionaries are as follows:
a. Investment managers, known as the Asset Management Company.(AMC).

b. Registrar and transfer agent
c. Broker
d. Selling agents and distributors
e. Custodian
f. Depository Participants
g. Banker
h. Legal advisor
i. Auditors
ORGANIZATION OF THE INDIAN MUTUAL FUNDS
Though the trust is the mutual fund, the AMC is the is the operation face.
The AMC is the first functionary to be appointed , and is involved in the
appointment of all other functionaries .The AMC structures the mutual fund
products markets them and mobilizes the funds , manages the fund and
services the investors. It seeks the services of other functionaries in carrying
out these functions. All the above noted functionaries are required to report to
the trustees, who lay down the ground rules, and monitor their workings.

TYPES OF AMC’S IN INDIAN CONTEXT
a. AMC’s owned by banks

b. AMC’s owned by financial institutions
c. AMC’s owned by Indian private sector companies
d. AMC’s owned by Foreign Institutional Investors.
e. AMC’s owned jointly by Indian and Foreign sponsors.
LEGAL AND REGULATORY FRAMEWORK
SEBI
Securities and Exchange Board of India is the apex regulator of the capital
markets. Issuance and trading of capital market instruments and the regulation of
capital market intermediaries is under the purview of SEBI. SEBI is the primary
regulator of mutual funds in India
All the mutual funds are required to be mandatory registered with SEBI. Structure
and functions of mutual funds and the appointments of the functionaries,
operations of mutual fund, accounting and disclosure norms, rights and
obligations of the functionaries and investors, investment restrictions, compliance
and penalties are all defined under the SEBI regulations. Mutual funds have to
send half yearly compliance report to SEBI, and also provide all other information
about their operations, as SEBI may require. SEBI is also empowered to
periodically inspect mutual fund organizations to ensure compliance with SEBI
regulations.
REGULATORY JURISDICTION OF RBI OVER MUTUAL FUNDS
RBI is the monetary authority of the country and is also the regulatory of the
banking system.RBI is involved with the mutual fund industry only up to a limited
extend of being regulator of sponsors of bank sponsored mutual funds.

CAPITAL MARKET and PORTFOLIO MANAGEMENT.
EQUITY MARKET AND MUTUAL FUND .
MAJOR TASK OF EQUITY PORTFOLIO.
a. Constructing a portfolio of the equity shares or equity linked

instruments that is consistent with the investment objective of the fund.
b. Managing and constantly re-balancing the portfolio to produce capital
appreciations and earnings that would reward the investors with superior
returns.
INDICATORS OF THE NATURE AND DEPTH OF EQUITY MARKET IN

INDIA.
a. There are 9922 companies listed on the Indian Stock Exchange

b. The market capitalization of these equity shares was Rs. 768863 crores.
c. The ratio of market capitalization of equity shares to the GDP was 54.5%.
d. There are 23 stock exchanges and 9792 brokers.
MEASURING AND EVALUATION OF FUND PERFORMANCE.
RATE OF RETURN TO AN INVESTOR IN MUTUAL FUNDS.
Investors in mutual funds earns from two sources:
a. Income from dividend paid by the mutual fund

b. Capital gains arising out of selling the units at a higher than the acquisition
price.
Since the mutual fund does not commit any specific rate of dividends the rate of
return is not known in advance. The mutual fund does not specify any particular
tenor for its products. The investor is free to enter and exit the fund at any time.

He would do so at the price that depends on the NAV at that time. Since NAV’s
changes are not foreseen the investors are not known about the capital gains or
loss for their investment.
MUTUAL FUNDS DO NOT PROVIDE AN ASSURED LEVEL OF

RETURNS TO THE INVESTORS.
Since the value of the securities can change at any time the mutual fund cannot
assure any fixed rate of return. In case the market value of the securities falls
short if assured returns has to be provided , the short fall has to be made good by
another security.
METHODS OF COMPUTING RETURNS ON INVESTMENT IN

MUTUAL FUND PRODUCT.
a. Percentage change in NAV

b. Simple total return
c. ROI or Total returns dividend re-investment.
RISK AND PERFORMANCE EVALUATION.
Risk as we have seen arises out of facts that do not remain constant or unchanged
.Every change in situation is a risk for the investor. The simplest way to measure
risk is to find out over a period of time, what is the average return from investing
in a fund. We can then find out how the actual returns are distributed among the
actual return of fund. If the actual returns earned by the investor are close to the
average, such a fund is less risk. If the return varies by larger amount, around the
average, the fund is more risky.
The difference between the average return and the dispersion of actual returns
around the average can be measured with the help of statistical measure called
Standard Deviation.

The standard deviation measures what is the average dispersion of returns around
the average value. If the standard deviation is high the risk inherent in the returns
of the mutual fund is high.
MARKET RISK AND HOW IT IS MEASURED.
Market risks refers to the extend to which the fluctuations in the return of a fund
are caused by broad market factors. The changes in the return performance of a
fund may be attributed to changes in the market factors, rather than any factor
specific to the company in the funds portfolio .
There are two ways in which the market risk are measured. :
a. Bogle’s Ex-Marks or R-squared
This measure simply compares the return from a fund and the return from
a market index, over the same period and measures the extent of sympathy in their
movement .For eg. An index funds return would be in complete sympathy with
the movement in the index that it seeks to track. The R-squared of this fund would
be 1, or the ex-marks would be 100%. Lower ex-marks refer to the funds with
lower level of sympathy with market returns. A fund’s risk can be gauged by its
ex-marks in comparison with the market index.
b. Beta co-efficient :
This is a popular measure of the extent to which the fund returns are
impacted by the market factors. The returns of the funds are linearly
related the returns from the underlying market. The extent to which the
fund returns are impacted by the market returns is measured by the beta
co-efficient. A fund with higher beta is
More risky than one of lower beta.
MEASURES OF RISK AND RETURN USED TO UNDERSTAND

MUTUAL FUND PERFORMANCE.

Since we know that the mutual funds cannot be expected to deliver a pre-
specified rate of return, the measures of risk and return make little sense,
unless we are able to say something about their adequacy. If the fund
makes 20% in a period and 8% in another we will not be able to say
whether 20% is too high or high enough, or if 8% is too low.
Therefore we should be able to define what we can expect from from the
fund, in terms of risk and return. Since this cannot be done in absolute
terms given that the portfolio varies along with the changes in the market
price of the securities, we have to set relative standards of performance..
This is done using benchmark.
BENCHMARKS.
Benchmarks are independent portfolios that are not managed by any fund
manager, but are representatives of the behavior of return from the
market .For eg; The S&P CNX NIFTY is a port folio of 50 securities
traded in the National Stock Exchange. The BSE Sensitive index is a
portfolio of 30 securities traded in the Bombay Stock Exchange. The
movements in these indices represent the movement in the prices, and
returns of large, actively traded stock in the equity market. If an investor
has invested in the index fund ,the return from the index will have to
compare with the risk and return of the equity index ,which the fund
manager is replicating .If the fund manager is managing an equity
portfolio, it invest only in equity and not in index fund , investor may want
to know how his performance compares with the independent portfolio
like the NIFTY or SENSEX .These independent portfolios, used to
understand fund manager performance , are called BENCHMARKS .
BENCHMARK TO EVALUATE THE PERFORMANCE OF THE

MUTUAL FUND .
Over the same period of time, it is possible to observe how the returns of
the benchmark and the NAV of the mutual fund have behaved. This will

provide an indication of the extent to which the mutual fund portfolio has
tracked the underlying benchmark.
We can create a common size graph, assuming an investment of Rs.100 in

both the mutual fund and the benchmark, on the date of inception of the
fund. We can then see, in a normalized graph the relative performance of
the mutual fund and the benchmark.
These comparisons tell us whether a fund has done as well as the

benchmark, better or worse than the benchmark. In the mutual fund
industry, a fund that performs better than the benchmark is known to have
out-performed; those that did worse are called under performance.
SEBI’S GUIDELINES ON BENCHMARKS TO BE USED BY THE

MUTUAL FUND
• Mutual fund should use benchmarks that reflect the asset allocation of
the fund, and the period of returns being compared should be identical
for the fund and the benchmark.
• If the scheme’s offer document indicates a benchmark for return
comparisons, the same should be used by the scheme.
• Income funds with more than 60% in debt should use a bond market
index as benchmark.
• Balanced funds should be compared with a tailored in benchmark that
combines equity and bond index returns in the same proportion as in
the asset allocation of the fund.
• Money market funds can use a money market instrument or a
combination of them, benchmark.

2.1 McKINSEY 7-S-Model
The 7-S-Model is better known as McKinsey 7-S. This is because the two persons
who developed this model, Tom Peters and Robert Waterman, have been
consultants at McKinsey & Co at that time.
Those seven elements are distinguished in so called hard S’s and soft S’s. The
hard elements are feasible and easy to identify. They can be found in strategy
statements, corporate plans, organizational charts and other documentations.
The four soft S’s however, are hardly feasible. They are difficult to describe since
capabilities, values and elements of corporate culture are continuously developing
and changing.
They are highly determined by the people at work in the organization. Therefore it
is much more difficult to plan or to influence the characteristics of the soft
elements. Although the soft factors are below the surface, they can have a great
impact of the hard Structures, Strategies and Systems of the organization.

BANK AND THE AMC
The Hard S’s

Actions a company plans in response to or anticipation of changes in its
Strategy external environment.
Basis for specialization and co-ordination influenced primarily by strategy and
Structure by organization size and diversity.
Formal and informal procedures that support the strategy and structure.
Systems (Systems are more powerful than they are given credit)
The Soft S’s

The culture of the organization, consisting of two components:
· Organizational Culture: the dominant values and beliefs, and norms, which
develop over time and become relatively enduring features of organizational
Style / Culture life.
· Management Style: more a matter of what managers do than what they say;
How do a company’s managers spend their time? What are they focusing
attention on? Symbolism – the creation and maintenance (or sometimes
deconstruction) of meaning is a fundamental responsibility of managers.
The people/human resource management – processes used to develop
Staff managers, socialization processes, ways of shaping basic values of
management cadre, ways of introducing young recruits to the company, ways
of helping to manage the careers of employees
The distinctive competences – what the company does best, ways of
Skills expanding or shifting competences
Guiding concepts, fundamental ideas around which a business is built – must

Shared Values / Super be simple, usually stated at abstract level, have great meaning inside the
ordinate Goals organization even though outsiders may not see or understand them.

Since the ABN AMRO AMC has been formed very recently all their workings are
monitored and assisted by the ABN AMRO bank to help them grow to a level
until they establish and have a strong foundation . The Mutual Fund has been
registered with the SEBI dated may 27, 2004. The office at Nariman point,
Mumbai.
THE SPONSOR: ABN AMRO BANK is the sponsor for the ABN AMRO
Mutual Fund. With a contribution of Rs.100000. towards the corpus of MF.
THE TRUSTEE: ABN AMRO Trustee India PVT LTD, accompany
incorporated under the companies act1956 on Nov 4 2003 is appointed as the
Trustee to the Mutual Fund vide.
Since there is Bank and Mutual fund organization, various departments of the
bank are inter-connected inter-related with each other. The specially designed
Information System helps in sharing and transferring information from one
Department to another.
All the details related to Mutual Funds will be coming to the Investment Advisory
Department, which gives information about the investment to all those who are in
need of such information. The details and the information collected by the
investment advisory division will be scrutinized and evaluated. Finally, after the
scrutiny, it is dispatched to Asset Management Company of ABN AMRO Mutual
Funds, for the final record.
The working of all the Departments at AN AMRO is according to the Rules and
Regulations given by SEBI. It obeys and strictly follows all the Banking rules
along with Investment related regulations as stated by SEBI.
STRATEGY

Strategy sets the vision, mission, objectives, major action plans and policies lf the
organization. These set out the picture of the organization in the future typically
spelling out the overall corporate strategy, the SBU (strategic business unit)
strategy and the functional strategies.
It can also be defined as the choice of direction and action that the company
adopts to achieve its objectives in a competitive situation. It is the first step that a
company has to take in leading its organization to the ladder of success. The
competitive advantage for the company can be achieved by keeping in mind the
following points.
• What are the company’s sources of sustainable competitive
advantage (e.g. penetration new markets, new product
development, improving customer service)
• What are the company’s key strategic priorities (e.g. penetrating
new markets, new product development, improving customer
service)
Strategies adopted at ABN AMRO Bank:

Strategies adopted at ABN AMRO Bank can be understood under its functions:-
1. Consumer Banking:
• Tap savings potential of affluent urban class.
• Emphasize control and convenience
• Offer a slew of new products and innovations
2. Corporate Banking:
• Leverage its flat structure to facilitate information – flow
and keep the level of NPAs (Non-Performing Assets) is
low.
• Use cash-flow-based funding to check NPAs
• Offer MIS to clients for faster and cost-effective
transaction processing.
3. Fee-based Banking:

• Focus on sectors where there is likelihood of
consolidation, liberalization or regulatory changes.
• Leverage relationships of commercial bank and cross-
sell.
4. Shared Service Business:

• Lower the cost of processing of services for the bank.
• Add to the efficiencies of doing business.
• Consider offering services to other banks at later stage.
Thus by adopting such strategies ABN AMRO Bank seeks to achieve its
objective of creating value for clients.
STRUCTURE:
Structure includes the policies and procedures that govern the way in
which the organization acts within it and the environment. It provides the
framework for relationships among different parts of organization. It sets out the
formal reporting relationships, mode of communication, their respective roles and
rules and regulations for carrying out different task. If not properly defined-
detrimental effect on the effective and efficient working because motivation and
morale is low, decisions are delayed and of poor quality, the expenses rises, orders
are lost due to competition, lack of confidence. Structure of any organization has
to answer the following question-
• What is the basic structural form?

• How centralized versus how decentralized is the organization?
• What is the relative status and power of the organization?

ORGANIZATIONAL STRUCTURE OF ABN AMRO BANK
HEAD QUARTER
COUNTRY HEAD
RETAIL BANK
CORPORATE
BANK HEAD
HEAD
HEAD SALES
MANAGER
REGIONAL
HEAD
ASSET LIABILITY SALES

SALES HEAD HEAD
SALES MANAGER
ASSISTANT SALES
MANAGER
TEAM LEADER
Personnel Financial Personnel Financial Telemarketing

Executives (PFE) Consultants (PFC) Executives (TME)

SYSTEMS:
System in this framework stands for the rules and regulation, procedures and
practices that must be allowed to carry out the tasks in the organization. A good
system adds to the efficient in effective working of the entrepreneur.
At ABN AMRO Bank:
The procedure is followed is clear, transparent and complicated. For example in

the Consumer Retail Banking the process for making a deal is as follows;
• Targets are set for the week and the month as a whole.
• The Telemarketing Executive (TME) makes an introductory call to the
potential customer where in the TME introduces and explains about the
company, the financial products and services offered, in brief.
• TME then messages to get an appointment with the interested potential
customer.
• If the customer agrees, the Personal Financial Consultant (PFC) meets the
potential customer at the appointed time and then explains about the
products and services, facilities in a detailed manner.
• The customer is asked for few documents and is required to fill in a form.
• These documents are scrutinized by the team leader or the higher authority
(if necessary) and the appropriate decision is taken.
The procedure appears to be simple but a lot of hard work and
dedication is put in by every individual involved in the process at ABN
AMRO Bank, beginning from the TME.

STYLE:
Style includes leadership style of top management and overall operating

style of the organization. Style impacts the norms people follow and how they
work and interact with each and with customers.
• How does top management make decisions- participatory versus top-
down?
• How do managers spend their time-in formal meeting, informal
conversations, in the field, with customers, etc.?
At ABN AMRO Bank:
ABN AMRO Bank follows a very ineffable style of functioning;

• Managers, staff, etc. are approachable, a perfect blend of formal and
informal approach.
• They follow a system of rewarding. Rewards are given according to
the performance .Monetary and non-monetary incentives are given.
• Personal attention to every individual especially the external trainees,
helps in gaining additional knowledge on various industries, their
products. The theoretical concepts are made more clearer through their
practical implications
• Informal conversations, which develop loyalty, motivation, dedication
in the employees.
• Every Monday it holds meetings where in the top management and
employees collectively participate-targets for the week is set,
responsibilities are delegated suggestions are invited, etc.
STAFF:
The organization has to look into its people, their backgrounds, and
competencies, staff also includes, the organizations approaches to
recruitment, selection and specialization. How people are developed, how

recruits are trained, socialized, integrated, and how their careers are
managed?
At ABN AMRO Bank; there are approximately 200 employees.

• They are given regular training. On- the- job training provided.
• They are involved in all the required meetings, activities.
• Staffs are given the freedom to use their innovative and creative
skills.
• They have a provision of career development. Those interested in
pursuing their studies can do so. Get together are held for staffs to
socialize.
• Staff grievances are given a listening year.
SKILLS:
Skills include the distinctive competencies that reside in the

organization. These can be distinctive competencies of people,
management practices, systems and/or technology. What business
activities is the company distinctively good at performing? What new
capabilities do the organization?
Needs to develop, which one does it need to unlearn to compete in the
future. This can be learning through “SWOT “analysis.
SHARED VALUES:
It refers to the core or fundamental values that are widely shared in the
organization and serve as guiding principles that are important. These values have
great meaning because they focus attention and provide a broader sense of
purpose. They also give a strong basis of stability to the organization in a rapidly
changing environment by providing a basic meaning to people working in the
organization.
• Do people have a shared understanding of why a company exists?

• Do people have a shared understanding of the vision of the company?
• How do people describe the ways in which the company is distinctive?
(e.g.; focus on quality, emphasis on people).
ABN AMRO Bank is a client/investor-oriented organization that has imbibed this
quality among all its members and employees. The whole unit works today
towards the growth and success of ABN AMRO Bank.
2.2 SWOT ANALYSIS:
STRENGTH:
• ABN AMRO Bank has a reputed name worldwide.

• It is a Cash Rich Bank.
• Recently (2004) been named as” the #1 service provider Bank”,(Free
doorstep banking,365days of bank from 10Am to 7Pm,bancafe after 7Pm
up to 11Pm,free credit card).
• Investment Advisory Services.
• Free Demat Account.
• Pre-approved Overdraft Facility.
• AAA Credit Rating.
• Operating with Centralized Account.
• Free reimbursement account.
• First Bank to tie up with Indian Airlines.
WEAKNESSES:
• Less branches.
• Reach is low.
• Awareness is low-in India it still has to gain tap new markets popularity.
• Elite customer oriented and concentrating on urban market.
• As a private Bank it is less accepted.

OPPORTUNITY:
• Open new branches.
• Tapping new markets.
• Mergers with local Banks.
• Target rural market.
THREATS:
• Other Banks are planning to offer similar/better services.
• May not be opted by many middle class consumers as it is more elite class
oriented, thus lose on market size.
• Economic policies controlled by RBI.
• Minimum balance is so huge that is not affordable for common mass.
SUGGESTION:
 The bank should try to make aware the public about their services and
about their AMC and schemes available as the people are rational and like
to earn more through various investments
 The bank should build a more customer friendly relation to face the
challenges put before by the competitors and build customers trust.
 The AMC should initiate the fund offering by putting up various investor
attractive and beneficial choices so as to attract more investments.

3.1 NEED FOR STUDY
The consulting advisors face the problem in deciding the choice of investment for
the prospective customers among the available schemes according to the
customers needs.
3.2 STATEMENT OF PROBLEMS

To identify the best performing fund among the selected few funds and to evaluate
the shortcomings of ABN AMRO funds with comparison to these funds and to
suggest remedial measures to rectify those.
3.3 OBJECTIVES OF THE STUDY/RESEARCH
The project aims at identifying the best performing funds in the market by
evaluating with the use of various parameters to help the consulting advisors to
suggest the prospective investors to decide the investments.
The study aims at identifying the best performing scheme of AMC by means of
comparing in between the chosen same schemes of three different AMC’s. For
this purpose three leading fund houses is being taken for mutual comparison and
interpreting the best performing AMC.
The three common schemes taken for the study are:
1. Opportunities fund.
2. Monthly income fund.
3. Floating rate fund.
The schemes were chosen from leading AMC whose performances were well
appreciated in the market:
1. ABN AMRO Asset Management Company.
2. FRANKLIN TEMPLETON Investments
3. BIRLA SUNLIFE Mutual Fund.

The study also tries to:
1. Compare the performance of ABN AMRO mutual fund with other fund.
2. Compare the risk involved in various scheme
3. To identify the shortcoming of ABN AMRO MF and suggest remedial
measures to improve those.
4. To help the bank in increasing their earnings by selling MF products
according to customers needs and requirements.
3.4 RESEARCH METHODOLOGY
SOURCES OF DATA
The data sources can be classified into 2 categories
1. PRIMARY DATA
2. SECONDARY DATA
1. PRIMARY DATA
Primary data is collected through unstructured interviews from the officials of

band and fund houses.
2. SECONDARY DATA
Secondary data is collected through
 The Published websites:

o www.banking/services.com
o www.abnamro.com
o www.international/banking.com
o www.mutualfundsindia.com
o www.personalfn.com

 Materials provided by the company.
 Annual report of the company.
 Brochures, fact sheets etc.
SAMPLE DESIGN
Sample Units: Data collected through information given by ABN AMRO BANK
Sample Size: 3 Asset Management Companies and 9 schemes
TOOLS AND TECHNIQUES OF DATA COLLECTION
 Internet.
 Annual Report of the Company.
 Fact Sheets.
 Newspapers.
3.5 SCOPE OF THE STUDY

1. The study was aimed at understanding and analyzing the market of Mutual
Fund of different fund house in the country.
2. The research was conducted in ABN AMRO bank based on the information
furnished.
3. Various parameters were used in comparing and evaluating the schemes
• Expense Ratio
• NAV Details
• Asset allocation.
• Top Ten holdings
• Benchmark comparison.
• Proportion of Equity and Fixed income holdings.
4. The schemes covered under the study are :

• ABN AMRO OPPORTUBITIES FUND.
• ABN AMRO MONTHLY INCOME PLAN.
• ABN AMRO FLOATING RATE FUND.

• FRANKLIN INDIA OPPORTUNITIES FUND.
• FRANKLIN TEMPLETON MONTHLY INCOME PLAN.
• TEPLETON FLOATING RATE INCOME FUND.
• BIRLA INDIA OPPORTUNITIES FUND.
• BIRLA MONTHLY INCOME FUND.
• BIRLA FLOATING RATE FUND.
3.6 LIMITATIONS OF THE STUDY
As far as possible best efforts have been made to collect the data in the
course of entire study, study also encountered certain difficulties in collecting data
on certain aspects, and research study has done with whatever data on hand.
• Difficulties are faced while accumulating the required data.

• Data insufficiency in evaluating and suggesting the fund strategy to
improve the fund performance.
• The fund identified as best may not hold good for long period because
performance of a fund might change according to the changes in the
market with respect to the portfolio.
• Performances of the fund are always subjected to the market risk which
can never be predicted or foreseen.
• Choice of selecting the parameters for comparison of funds had to
identify very carefully as the information required has to be given by
every fund.

AN ANALYSIS ON THE BALANCE SHEET
Since the Asset Management Company of ABN AMRO was formed only
recently, the company got approval from SEBI on may 28 2004 and they started
their fund were launched on 28 August 2004 , from that time they had to bear all
the initial expenses and also face tough competition from the other competitors
already established in the market. So the balance sheet exhibited low performance
of the company earning losses for the past two years and also bearing exorbitant
operating cost and personnel cost. This can be found out from the following
figure.
Total income : 37,025,609

Total expenditure : 124,987,997
Loss for the year : 87.962,388
Turn over : 37026
Profit After tax : -87962000
Number of Equity share : 30,360,000
Earnings Per share :-2.90
Interpretation:
 Since the company commenced its operation very recently it had to bear
all the expanses prior to obtaining the SEBI’s approval for acting as the
Asset Management Company.
 Due to the burden of initial operating expenses the company’s expenditure
crossed the income as well as the turnover.
 The Profit after tax was got in negative figures, because of which the
Earnings per equity was got as -2.9.
 The company must try to reduce travel cost and communication expenses
as the expenses involved in advertisement, remuneration etc are inevitable
part of the business process. If only the company can reduce the expenses
which do not yield any returns such as fixed assets and non performing

assets the profit and the EPS can be increased and more focus can be
given for public awareness and expansion programmes.
OPPORTUNITIES FUND
Investment Objective.
The investment objective is to generate long tem capital growth from an actively
managed portfolio of equity and equity related securities. The scheme will aim to
identify attractive investment objective in companies across all ranges of market
capitalization viz large, medium and small capitalization and across all sizes in
terms of turnover, balance sheet size etc.The scheme has the flexibility to actively
shift portfolio concentration between different market capitalization buckets. The
scheme also retains the flexibility to hold from time to time relatively more
concentrated investments in a few sectors than plain diversified equity fund.
Who should invest?
Those investors seeking to take advantage of investment opportunities across

sectors and market capitalizations buckets and those who want to invest in a fund
that can hold relatively more concentrated investments in a few sectors compared
to plain diversified equity fund.

ABN AMRO OPPORTUNITIES FUND
Fund Manager : Mr. MIHIR VORA

Expense ratio : 2.28%
Load Structure
Entry Load : 2.25%
Exit Load : Nil
Fund Size : 204.68 Cr.
Performance
ABN AMRO Opportunities fund : 3.07%
BSE 200 :9.71%
TABLE NO. 5.1

TOP TEN HOLDINGS AS ON JUNE 30th 2005
Equity Holdings Sector % of net assets Market Value(in
Rs Lacs)
State Bank Of India. Bank 12.75 1,163.19
Jaiprakash Associates ltd. Construction 9.66 1332.37
Voltas LTD. Consumable Durables 3.43 1002.98
Thermax LTD. Industrial Capital 14.22 1418.35
Goods
Siemens LTD. Industrial Capital 14.22 1123.57
Goods
Sintex Industrial LTD. Industrial Products 3.47 1014.86
Oil & Natural Gas Oil 5.58 1724.06

Corporation.
Reliance Industries Ltd Petroleum Products 5.24 1532.55
Infosys Technologies LTD Software 12.39 1021.41

HCL Technologies LTD Software 12.39 1018.41

Asset Allocation
16.00%
14.00%
Value Holding
12.00%
10.00%
8.00% S eries1
6.00%
4.00%
2.00%
0.00% Oil
Auto
Industrial
Banks
Finance
Telecom
Cement
Media
Fertiliser
Consumer
chemicals
Consumer
Construction
Pesticides
Textile Products
industrial capital
Ferrous Metals
Pharmaceuticles
Software
S ectors
GRAPH 5.1
Interpretation:
• It can be inferred that Benchmark has out-performed the ABN AMRO
Opportunities fund.
• Since it is an equity fund there also arises high risk in return earnings.
• The fund has majority investment in Industrial Capital which has a major
affect on its NAV.
• Standard Deviation cannot be found out to measure the risk as the fund has
been launched only recently.
• Expense ratio came down with respect to growth in fund size.

FRANKLIN INDIA OPPORTUNITIES FUND
Fund Manager : K.N.Sivasubramanian

Expense Ratio : 2.36%
Load Structure
Entry Load : 2.25%
Exit Load : Nil
Performance:
Franklin Templeton Opportunities Fund : 14.88%
BSE 200 : 6.40%
TABLE NO. 5.2

Rs Lacs)
Maruthi Udyog Auto 6.56 1418.75
Tata Motors Auto 4.95 1070.84
Icici Bank Bank 4.68 1011.72
Century Textiles & Cement 7.69 1663.20
Industries
Reliance Industries Petroleum Products 8.60 1858.30
Strides Acrolabs Pharmaceuticals 5.69 1231.00
IPCA Labs Pharmaceuticals 5.20 1123.10

Supply Corporation Power 6.42 1388.77
HCL Technologies Software 4.35 939.28

Mahavir Spinning Textile-cotton 5.54 1177.09

Value Holdings
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
Pharmaceuticals
Auto
Petroleum Products
Bank
Cement
Auto Ancillaries
Sectors
Power
Textile-Cottons
GRAPH 5.2
ASSET ALLOCATION
Consumer non durables
Software
CMR INSTITUTE OF TECHNOLOGY, BANGALORE

Rest
Series1
- 53 -
BIRLA INDIA OPPORTUNITIES FUND
Fund Manager : Deven Sangoi
Load Structure
Entry Load : 2.25%
Exit Load : Nil
Performance:
BIRLA INDIA OPORTUNITIES FUND: 45.27%
S&P CNX 500 : 52.74%
TABLE NO. 5.3
Rs Lacs)
Infosys Software 6.71 598.77
Technologies
Tata Consultancy Software 4.84 432.50
Services
United Phosphorous Pesticides 6.81 607.47
Subex Systems LTD Software 4.81 429.23
Sundaram Fasteners Auto ancillaries 5.96 531.98
LTD
Geometric software Software 4.59 409.67
solution LTD
HCL Info systems Hardware 4.90 436.90
LTD
Macmillan India Consumer Non 4.41 393.74
LTD Durables
Bharat Forge LTD Industrial Products 4.25 379.00
Thermax LTD Industrial Capital 4.27 380.49
Goods

AS S E T A LLO C AT IO N
3 5 .0 0 %
3 0 .0 0 %
Value Holdings 2 5 .0 0 %
2 0 .0 0 %
S e rie s1
1 5 .0 0 %
1 0 .0 0 %
5 .0 0 %
0 .0 0 %
Industrial
Software
Hardware
Other Equity
Pesticides
Cash & CA
Products
Consumer Non
Auto Ancillaries
Industrial Capital
Pharmaceuticals
Durables
Goods
S e c to rs
GRAPH 5.3
Interpretation:
• It can be inferred that Birla India opportunities fund has out-performed the
Benchmark fund.
• Since it is an equity fund there also arises high risk in return earnings.
• The fund has majority investment in Software Industry which has a major
affect on its NAV.
• Standard Deviation was found to be 6.32 which show a moderate measure
of risk as the fund is basically of equity holdings.
• Expense ratio came down with respect to growth in fund size.

MONTHLY INCOME PLAN
INVESTMENT OBJECTIVES:
The primary objective of the Scheme is to generate regular returns through

investment primarily in money market instruments and debt. The secondary
objective of the scheme is to generate long term capital appreciation by investing
a portion off the scheme’s assets in equity related securities.
WHO SHOULD INVEST?
Conservative investors seeking the stability offered by the debt & growth potential
of equities. Those who seek regular income through a portfolio of predominantly
high quality fixed income securities with a maximum exposure of 20% of equities.

ABN AMRO MONTHLY INCOME PLAN
Fund Manager : Mr. Mahendra Jajoo
Load Structure
Entry Load : Nil
Exit Load : Nil
Performance:
ABN AMRO MONTHLY INCOME PLAN: 7.45%
CIRISIL MIP Blended Index : 6.67%
TABLE NO. 5.4
Rs Lacs)
Cipla LTD Pharmaceuticals 2.75 25.09
Oil & Natural Gas Oil 1.01 24.66
Corporation
State Bank Of India Bank 2.34 24.55
Jaiprakash Construction 1.38 23.76
Associates LTD
Glenmark Pharmaceuticals 2.75 22.82
Pharmaceuticals
LTD
Mahindra & Auto 0.85 20.78
Mahindra LTD
Golkaldas Export Textile Products 0.97 20.28
LTD
Karnataka Bank Bank 2.34 20.25
LTD
Fixed Income Money Market 56.12 1373.48
Holdings. Instrument
Fixed Income Corporate Debt 10.25 250.99
Holdings.

Compositon By Assets
60.00%
Value Holdings
50.00%
40.00%
30.00% Series1
20.00%
10.00%
0.00%
Money Market
receivables(payab
Equity Holdings
Corporate Debt
Instrument
Net
le)
Sectors
GRAPH 5.4
Interpretation:
• It can be inferred that ABN AMRO Monthly Income fund has out-
performed the CRISIL MIP Blended index.
• Since it is a moderately balanced fund there is also balance of risk in return
earnings.
• The fund has majority investment in Money Market Instruments which has
a secured earnings & has a major affect on its NAV.
• Standard Deviation could not be found out as the fund was launched only
recently.
• Expense ratio is in the moderate level which will come down with respect
to growth in fund size.
FRANKLIN TEMPLETON INDIA MONTHLY INCOME PLAN

Fund Manager : Mr. Sukumar Rajah, Chellappa,
Sachin Padwal -Desai

Load Structure
Entry Load : Nil
Exit Load : Nil
Performance:
FT Income Monthly Income : 2.35%
TABLE NO. 5.5
Debt Holdings Rating % of net assets Market Value(in
Rs Lacs)
Consumer Finance. AAA 7.47 5679.60
Trust-Bajaj Auto AAA(SO) 6.78 5156.56
PTC.
Hindalco Industries. AAA 6.77 5144.79
Ultratech Cement AA+ 6.62 5035.45
Citicorp Finance AAA 3.29 2500
Citibank Mobile AAA(SO) 2.20 1670.71
Trust PTC
Neyveli Lignite AAA 10.68 8120.58
Corporation
Power Finance AAA 8.54 6489.51
Corporation.
IDFC AAA 3.93 2987.29
IDBI AA+ 2.69 2042.18

Asset Allocation
50.00%
45.00%
Value Holdings 40.00%
35.00%
30.00%
25.00% Series1
20.00%
15.00%
10.00%
5.00%
0.00%
Equity Corporate PSU/PFI Gilt
Holding Debt Bonds
Sectors
GRAPH 5.5
Interpretation:
• It can be inferred that FT INDIA Monthly Income plan has almost equaled
the CRISIL MIP Blended index still the fund has potential to grow.
earnings.
• The fund has majority of investment in corporate debt instruments which
has a secured earnings & has a major affect on its NAV.
• Standard Deviation was found to be 0.51 which indicates a low level of
risk in the investment.
• Expense ratio is at a very low level as the risk is minimized by investing in
Corporate Debt instruments which will enable steady returns..
BIRLA MONTHLY INCOME PLAN

Fund Manager : Mr. K.Ramnathan, Nishid Shah

Load Structure
Entry Load : Nil
Exit Load : 0.60%
Performance:
BIRLA MONTHLY INCOME PLAN : 8.26%
TABLE NO. 5.6

Rs Lacs)
ICICI Bank LTD AAA 7.28 2842.57
Bharat Heavy AAA 6.36 2484.58
Electrical LTD
Reliance Industries AAA 5.42 2116.48
LTD
Loan Sec Trust- LAAA(so) 5.16 2014.46
ICICI Bank
Tata Sons LTD AAA 3.90 1523.50
Hindalco Industries AAA 3.83 1496.19
LTD
L&T Holdings LTD AAA(so) 3.40 1326.26
Power Finance AAA 2.69 1050.79
Corporation.
HDFC LTD AAA 2.57 1003.78
The great Eastern AAA 2.43 949.62
Shipping Co. LTD.

A sset Allocation
30 .00%
25 .00%
Value Holdings 20 .00%
15 .00% Series1
10 .00%
5.00%
0.00%
Equity
Mutual Fund
Money Market
Floating rate
Cash& Current
Govt. Bonds
Securetised
Instruments
Corporate Debt
PSU/PFIBonds/
instruments
Units
Debt
assets
Banks
Sector
GRAPH 5.6
Interpretation:
• It can be inferred that Birla Monthly Income plan has almost equaled the
CRISIL MIP Blended index but still the fund has potential to grow.
earnings.
• The fund has majority of investment in PSU PFI BONDS which has
secured earnings & has a major affect on its NAV.
• Standard Deviation was found out to be 0.46 which means low risk.
• Expense ratio is a little high when compared with other two funds as the
fund size is low.
FLOATING RATE FUND

Investment Objective
The primary objective of the scheme is to provide income consistent with the
prudent risk from a portfolio comprising substantially of floating rate debt
instruments, fixed rate debt instrument swapped for floating rate return, through
the use of OTC or exchange traded derivatives. The scheme may also invest in
fixed rate and money market instruments and/or floating rate instruments swapped
for fixed rate return through the use of OTC or exchange traded derivatives. The
fund manager strives to minimize the risk arising from interest rate fluctuations.
Who Should Invest?
Investors who seek to insulate themselves for the price volatility caused by
interest rate moments in the debt markets.
ABN AMRO FLOATING RATE FUND

Fund Manager : Mr.R.Sivakumar
Load Structure
Entry Load : Nil
Exit Load : Nil
Performance:
ABN AMRO FLOATING RATE FUND: 3.85%
CIRISIL Liquid Fund Index : 3.57%
TABLE NO. 5.7

Rs Lacs)
Citifinancial AAA 7.28 5011.80
consumer Financial
India LTD
Indian retail ABS AAA 6.36 3875.25
trust
UMT 1Trust A1+ 5.42 3552.45
Indian Railway AAA 5.16 2500
Finance Corporation
GE Capital service P1+ 3.90 4372.15
India LTD
Kotak Mahindra P1+ 3.83 2478.13
Bank LTD
HDFC AAA 3.40 2000.65
BHPC Auto AAA 2.69 1872.05
Securitization Trust
Retail Pool Trust AAA 2.57 1589.14

Asset Allocation
80.00%
Value Holdings
70.00%
60.00%
50.00%
40.00% Series1
30.00%
20.00%
10.00%
0.00%
Recievables(paya
Money Market
PSU/PFC Debt
Corporate Debt
Instruments
ble)
Net
Sectors
GRAPH 5.7
Interpretation:
• It can be inferred that ABN AMRO Floating rate fund has almost equaled
the CRISIL liquid fund index still the fund has potential to grow.
• Since it is a completely a debt investment fund its risk is also low.
• The fund has majority of investment in corporate debt instruments which
has a secured earnings & has a major affect on its NAV.
• Standard Deviation cannot be found out as it was launched only very
recently.
• Fund size is also small due to initial launch.
• Expense ratio is a little high as the fund size is small but still has the
potentiality to grow,
Templeton Floating Rate Income Fund
Fund Manager : Mr.Sameer Kulkarni, Ninad

Deshpande

Load Structure
Entry Load : Nil
Exit Load : 0.30%
Performance:
Templeton Floating Rate Income Fund : 0.43%
TABLE NO. 5.8

Rs Lacs)
HDFC AAA 5.82 7024.48
M&M Financial AA+ 5.39 6504.65
Services
Trust Series 18 A2 AAA(so) 4.90 5920.42
Rabo India AAA 4.14 5000
Finances
IDBI AA+ 11.37 13721.74
National Housing AAA 4.60 5557.39
Bank
GOI 12.00% 2008 SOV 2.85 3442.50
LIC Housing AAA 3.31 4000
Finance
ICICI Bank P1+ 6.10 7360.92
ICICI Bank A1+ 4.09 49040.31

Asset Allocation
40.00%
35.00%
Value Holdings 30.00%
25.00%
20.00% Series1
15.00%
10.00%
5.00%
0.00%
Instruments
instruments
Call,Cash &
PSU/PFI
Gilts
Corporate
Bonds
Money
Market
Assets
linked
Debt
Mibor
other
Sectors
GRAPH 5.8
Interpretation:
• It can be inferred that Franklin Templeton India Floating rate fund has
very much out-performed the CRISIL liquid fund index.
• The fund has majority of investment in Money Market Instruments which
has secured earnings & has a major affect on its NAV.
• Standard Deviation was found out to be 0.0138 which is very low that
indicates low volatility.
• Fund size is also huge which reduces risk and expense ratio.
• Expense ratio is low due to high and large size of its corpus.
BIRLA FLOATING RATE FUND
Fund Manager : Mr.Satyabrata Mohanty

Load Structure
Entry Load : Nil
Exit Load : 0.50%

Performance:
BIRLA FLOATING RATE FUND : 0.46%
TABLE NO. 5.9

Rs Lacs)
Housing AAA 9.29 7325.79
Development
Finance corporation
Industrial AA+ 3.97 3133.32
development Bank
Of India
Indian Retail ABS AAA(so) 3.20 2520.88
Serve
HDFC LTD LAAA 3.19 2514.98
ICICI Bank LTD A1+ 3.94 3103.07
LIC Housing AAA 3.19 2511.70

Finance LTD
Housing & urban AA 2.56 2017.30
development Corp.
The J&K Bank P1+ 3.00 2363.20
Bharat Overseas A1+ 2.99 2359.62
bank

Asset Allocation
70.00%
Value Holdings
60.00%
50.00%
40.00%
30.00% Series1
20.00%
10.00%
0.00%
Treasury Bill
Cash&Current
Money Market
PSU/PFI
Floating rate
Securitiised
Corporate
instrument
Bonds
instrument
Debt
Debt
assets
Sectors
GRAPH 5.9
Interpretation:
• It can be inferred that Birla Floating Rate fund has out-performed the
CRISIL liquid fund index.
• The fund has majority of investment in Floating Rate Instruments which
has secured earnings & has a major affect on its NAV.
• Standard Deviation was found out to be 0.0146 which is very low that
indicates low volatility.
• Fund size is also huge which reduces risk and expense ratio.
• Expense ratio is low due to high and large size of its corpus.
TABLE NO. 5.10
TABLE SHOWING INTER-COMPARISON OF OPPORTUNITY

SCHEMES.
SCHEME EXPE FUND BENCH LAUNC TOP HOLDING FUND
NSE PERFORM MARK H DATE SIZE
RATIO ANCE SINCE

SINCE INCEPT
INCEPTION ION
ABN AMRO 2.28% 3.07% 9.71% APRIL INDUSTRIAL 204.68
OPPRTUNITIES 15 2005 CAPITAL GOODS Cr
FUND
FRANKLIN 2.36% 4.50% -21.50% FEB 21 PHARMACEUTICALS 216.17
OPPORTUNITI 2000 Cr.
ES FUND
BIRLA INDIA 2.50% 3.74% 7.64% DEC 27 SOFTWARE 91.74

OPPORTUNITI 1999 Cr.
ES FUND
Performance (%) as on June 11, 14 1 3 6 1

Date
2005 days month months months year
Birla India Opportunities Fund - June11,
8.66 1.93 7.19 24.75 39.97
Growth 2005
ABN AMRO Opportunities Fund - June11,
9.71 -1.73 10.05 34.72
Growth 2005
June
Franklin India Opportunity Fund -
11, 11.65 -1.52 2.85 36.14 52.61
Growth
2005
Average performance of similar category
7.7 -1.39 5.13 25.7 47.67
funds
BSE Sensex -2.06 -2.06 7.49 28.73 39.09
Interpretation:
• Birla showed a consistent rate of return over the period with comparison to
sensex and other funds.
• ABN AMRO fund had the lowest expense ratio.
• Franklin Templeton has been the best performer.
• ABN AMRO had come up with high fund size with in a short period it
shows the ability & the effectiveness of the fund manager and the
efficiency distributors.
TABLE NO. 5.11
TABLE SHOWING INTER-COMPARISON OF MONTHLY

INCOME PLANS.
SCHEME EXPENSE FUND BENCH LAUNC TOP HOLDING FUND
RATIO PERFORMANCE MARK H DATE SIZE
SINCE SINCE

INCEPTION INCEPTION
ABN AMRO 2.25% 7.45% 6.67% SEPT 23 MONEY 53.98
MONTHLY 2004 MARKET Cr.
INCOME PLAN INSTRUMENTS
FT INDIA 1.83% 12.95% 9.79% SEPT 28 CORPORATE 473.94

MONTHLY 2000 DEBT Cr
INCOME PLAN
BIRLA 2.25% 10.43% 9.79% NOV 20 PSU/PFI 168.50
MONTHLY 2000 BONDS
Cr.
INCOME PLAN
Performance (%) as on June 11, 14 1 3 6 1

Date
2005 days month months months year
June
Birla MIP - Growth 11, 1.23 0.29 2.12 5.35 9.4
2005
June
ABN AMRO MIP - Growth 11, 1.14 0.03 2.25 5.94 11.49
2005
June11,
FT India MIP - Plan A - Growth 1.62 -0.34 1.49 6.4 11.77
2005
0.33 0.27 1.09 2.75 5.76
funds
BSE Sensex -2.06 -2.06 7.49 28.73 39.09
Interpretation:
• Franklin T. has the lowest expense ratio &performed best among funds.
• Birla considers assured returns &less risk for investors by giving

consistent earnings through investing in PSU/PFI Bonds.
• ABN AMRO showed consistent returns trying to establish in the market

along with the competitors.
• Although FT shows high returns it has been highly volatile trying to

maximize its investor’s earnings.
TABLE NO. 5.12
TABLE SHOWING INTER-COMPARISON OF FLOATING RATE
FUNDS.
SCHEME EXPENSE FUND BENCH LAUNC TOP HOLDING FUND
RATIO PERFORMANCE MARK H DATE SIZE
SINCE SINCE
INCEPTION INCEPTION
ABN AMRO 2.25% 3.85% 3.57% SEPT 13 CORPORATE 393.61

FLOATING 2004 DEBT Cr.
RATE FUND
TEMPLETON 1.00% 5.06% 4.36% FEB 11 CORPORATE 1207.2
FLOATING 2002 DEBT
1 Cr.
RATE
INCOME
FUND
BIRLA 1.00% 5.20% 4.21% JUNE 4 FLOATING 788.37
FLOATING 2003 RATE Cr.
RATE FUND INSTRUMENTS.
14 1 3 6 1
Performance (%) as on 11, 2005 Date
days month months months year
Birla Floating Rate Fund - LTP - June11,
0.2 0.42 1.28 2.7 5.41
Growth 2005
June11,
ABN AMRO FRF - Growth 0.19 0.41 1.25 2.51 4.93
2005
June
Franklin Templeton FTF - Series 1 -
11, 3.18 0.91 4.45
Growth
2005
0.33 0.27 1.09 2.75 5.76
funds
BSE Sensex -2.06 -2.06 7.49 28.73 39.09
Interpretation:
• Birla kept the investors interest by giving them a good returns and assured
earnings by investing in floating rate instruments.
• Although Birla’s fund size is low they were able to keep the expense ratio
low thereby increasing the investors security and trust in their fund.
• FT has been very volatile and so needs to keep up to the constant dividend
return even though they give good returns.
• ABN AMRO had been performing so far good but still has to keep low
expense ratio and increase fund size.
FINDINGS:
• There is a direct positive relationship between the net asset value and the
share price movements in the share market or benchmark movements
• Expense ratio reduces the net asset value of units because before
calculating net asset value, the expenses will be deducted.
• There is a common tool for comparison for each and every fund in every
scheme. For eg. Benchmark for opportunity fund

CRISIL MIP Blended index for Monthly income plan.
CRISIL Liquid fund Index for Floating Rate Fund.
• There is an inverse relationship between Expense ratio and Fund size.
• Entry and Exit loads of the scheme, reduces the investment and receivables
of the investors to that extent respectively. Because loads are deducted
from the investors amount.
• In most of the funds the entry load is Nil thus encouraging the investments
in the funds
• In the opportunities fund, ABN AMRO Fund has only been introduced
very recently so its performance is not up to the mark of Franklin India and
Birla funds. Franklin Templeton has been the best performer.
• Even though Birla opportunity fund had been introduced earlier than other
funds their fund size had been kept very 0low may be due to lack of
proper distribution and non proper returns to the investors. Whereas ABN
AMRO which had been introduced late was able to grow its fund size and
decrease its expense ratio.
• In Monthly income plan Franklin Templeton fund has been the best
performer than ABN AMRO and Birla fund. This is due to its large fund
size, less expense ratio and longer player in the market & expert
international experience.
• Franklin Templeton has outperformed all the funds in this sector and
sensex because of its expert & high internationally experienced fund
manager’s decision and best distribution strategy to bring the funds to the
investors awareness.
• Franklin Templeton Monthly Income Plan has a greater fund size in
comparison with other two funds which ensures low expense ratio and low
risk.
• In Floating rate fund Birla floating rate has been the best performer this
may be due to actively managed portfolio, and the least expense ratio and
moreover their experience and expert advice from the international
performance ,as they have already been established internationally.
• Birla is very much investor oriented by securing investors returns through
reduced risk and consistent returns through actively managed portfolios

there by winning customers trust and increasing their investment through
secured future.
• ABN AMRO FLOATING RATE FUND’S expense ratio is a little high
due to its recent entry in the market and the low fund size.
• ABN AMRO should try to diversify their portfolio to increase the returns
and reduce the expense ratio there by increasing the investment
opportunities.
SUGGESTIONS:
After the research and findings, I came out with some of the following
suggestions;
1. ABN AMRO Mutual funds need to concentrate on their portfolios and

emphasize in increasing their fund size and decreasing their expense
ratio.

2. The risk involved can be decreased by diversifying the portfolios and
investing in evergreen industries such as Banks, Information
Technology, and Cement etc.
3. Since expense ratio has a greater impact on the NAV of the fund the
bank should try to reduce the expense ratio to increase their NAV,
which respectively will help in increasing their investments.
4. Expense ratio can be reduced by increasing the fund size.
5. The public should be made aware of the ABN AMRO MF
investments through increasing the distributors like banks, private
agencies and consulting services.
6. The distributors should be encouraged to sell more of the ABN
AMROS MF schemes by offering various benefit and increased
commissions.
7. Portfolio should be altered frequently and modified to outperform the
benchmark which is a basic tool for comparison and convincing the
prospective investors.
8. Through more of advertisements on visual Medias and other daily’s
and weekly’s they should attract and make aware the investors about
the schemes offered.
9. There should always retain constant communication and interaction
with the investors to get their feedback and make them aware about
the best performing funds and help them diversify their investments.
They may also help in suggesting and bringing new investors.
10. By reducing the volatility and consistent earnings they can win the
trust and investment interest of the investors.
SUGGESTIONS TO THE BANK
1. Bank can expand its operation in more number of places and capture more
market by following the policy of giving priority to the customer’s needs and
requirements.
2. ABN AMRO can capture the competitors (ICICIPrudential, Birla MF, Fidelity,
Franklin Templeton Reliance, SBI, Sundaram Finance, etc.) Market by creating
new customers.

3. By giving right advises to the prospective investors they can increase customers
trust and interest
4. The bank’s consulting advisors should not let go off the customers after their
investment a constant feed back and customer queries should be handled with
utmost customer satisfaction.
5. Many are interested in Mutual Fund and Investment services, bank can sell
these products to the interested customers by framing a useful and customer
oriented portfolio.
6. By creating awareness program bank can convert non-customers into
customers. Since many customers know only through telemarketing and personnel
selling only these two can’t help in promoting the market share of ABN AMRO’s
MF.
7. ABN AMRO can overcome its drawbacks by studying customer minds and
market perception.
8. By following the suggestions the bank can get capture the major market share
and can be the leading fund houses in India.
9. Bank can also introduce various schemes for the investors according to their
needs and requirements so as to compete with other funds and schemes of the
same nature.
10. By ensuring the trust of the customers the bank can increase the earnings and
also win reputation in the market.

CONCLUSION
From the analysis & interpretation it can be arrived and inferred that:
The ABN AMRO AMC which came recently was able to increase its fund size
within a short span of time, by implementing the suggestions given before, and
with the help of the bank there can be a greater pace in the AMC’s development
with a robust growth.
The ABN AMRO bank has very good services when compared to other banks and
people do appreciate these services. The only thing the customer complains is that
the bank should see the things from customer point of view and the Fund Manager
should formulate an appropriate portfolio within their specifications, there by
becoming a more customer oriented bank than just being a house of business, by
managing the investor’s valuable amount into prospective and good return funds.
Even though the mutual funds performance can never be predicted or foreseen,
banks past performance and their regular customer relation will encourage them to
become the market leader in capturing the MF market share and attain the first
place among the customers choice.

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EXECUTIVE SUMMARY

I am honored to be associated with ABN AMRO Bank to work on this

The study was mainly aimed to understand the performance of ABN

CMR INSTITUTE OF TECHNOLOGY, BANGALORE -1-

The study revealed that market performance, proper advisor-customer interaction

CMR INSTITUTE OF TECHNOLOGY, BANGALORE -2-

Banks in India have traditionally offered mass banking products. Most

Rapid strides in information technology have, in fact, redefined the role

CMR INSTITUTE OF TECHNOLOGY, BANGALORE -3-

The bank of the future has to be essentially a marketing organization that

IMPORTANT PHASE IN THE HISTORY OF THE MUTUAL FUND

CMR INSTITUTE OF TECHNOLOGY, BANGALORE -4-

c) 1993-1996 : In1993 mutual fund industry was opened to private sector

d) 1996-1999: The implementation of the new SEBI regulations and the

CMR INSTITUTE OF TECHNOLOGY, BANGALORE -5-

CMR INSTITUTE OF TECHNOLOGY, BANGALORE -6-

CMR INSTITUTE OF TECHNOLOGY, BANGALORE -7-

They are active in three principal customer segments: Consumer &

CMR INSTITUTE OF TECHNOLOGY, BANGALORE -8-

ABN AMRO in India

ABN AMRO Bank (India) has an eight-decade long experience of the

Traditionally known as a strong "diamond-financing bank", it has turned

ABN AMRO (India) has branches in Mumbai, Delhi, Chennai, Kolkata,

Consumer banking offers a suite of products for every one’s personal

CMR INSTITUTE OF TECHNOLOGY, BANGALORE -9-

I. Consumer & Commercial Clients (C&CC) - for individuals and small-

III. Wholesale Clients (WCS) - for major international corporations and

PROFILE OF ABN AMRO India

CMR INSTITUTE OF TECHNOLOGY, BANGALORE - 10 -

ABN AMRO’s ACHIEVEMENTS

 Second overall in banking industry: Financial Express-BRIS survey 2002

CMR INSTITUTE OF TECHNOLOGY, BANGALORE - 11 -

CMR INSTITUTE OF TECHNOLOGY, BANGALORE - 12 -

The numbers of schemes offered for public investment are as follows:

1. ABN AMRO EQUITY FUND.

1. ABN AMRO MONTHLY INCOME FUND.

1. ABN AMRO FLOATING RATE FUND

CMR INSTITUTE OF TECHNOLOGY, BANGALORE - 13 -

1. ABN AMRO EQUITY FUND

NAV to the date:

CMR INSTITUTE OF TECHNOLOGY, BANGALORE - 14 -

NAV to the date:

CMR INSTITUTE OF TECHNOLOGY, BANGALORE - 15 -

ABN AMRO FLEXI DEBT FUND:

NAV to the date:

CMR INSTITUTE OF TECHNOLOGY, BANGALORE - 16 -

ABM AMRO MONTHLY INCOME PLANS:

NAV to the date:

There is no Entry load or Exit load.

CMR INSTITUTE OF TECHNOLOGY, BANGALORE - 17 -

ABN AMRO CASH FUND:

NAV to the date:

CMR INSTITUTE OF TECHNOLOGY, BANGALORE - 18 -

NAV to the date:

CMR INSTITUTE OF TECHNOLOGY, BANGALORE - 19 -

A mutual fund is a pool of money, collected from the investors, and is

CHARACTERASTICS OF A MUTUAL FUND.

1. The ownership of the mutual fund is in the hands of the investors

ADVANTAGES OF MUTUAL FUND TO INVESTORS

CMR INSTITUTE OF TECHNOLOGY, BANGALORE - 20 -

HOW DOES MUTUAL FUND REDUCE RISK

PROFESSIONAL MANAGEMENT OF MUTUAL FUNDS

 Mutual funds are managed by the investment managers.(AMC) who are