IDFC Project

Performance Evaluation of Mutual Funds 2010
INDUSTRY PROFILE
The mutual fund industry in India started in 1963 with the formation of Unit Trust of India, at the initiative of the Government of India and Reserve Bank of India. The history of mutual funds in India can be broadly divided into four distinct phases : First Phase 1964-87 Unit Trust of India (UTI) was established on 1963 by an Act of
Parliament. It was set up by the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial Development Bank of India (IDBI) took over the regulatory and administrative control in place of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6,700 crores of assets under management. Second Phase 1987-1993 (Entry of Public Sector Funds) 1987 marked the entry of non- UTI, public sector mutual funds set up by public sector banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC). SBI Mutual Fund was the first nonUTI Mutual Fund established in June 1987 followed by Canbank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC established its mutual fund in June 1989 while GIC had set up its mutual fund in December 1990. At the end of 1993, the mutual fund industry had assets under management of Rs.47,004 crores. Third Phase 1993-2003 (Entry of Private Sector Funds) With the entry of private sector
funds in 1993, a new era started in the Indian mutual fund industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year in which the first Mutual Fund Regulations came into being, under which all mutual funds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993. The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI (Mutual Fund) Regulations 1996. The number of mutual fund houses went on increasing, with many foreign mutual funds setting up funds in India and also the industry has witnessed several mergers and acquisitions. As at the end of January 2003,
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MS RAMMAIAH INSTITUTE OF MANAGEMENT - Bangalore

there were 33 mutual funds with total assets of Rs. 1,21,805 crores. The Unit Trust of India with Rs.44,541 crores of assets under management was way ahead of other mutual funds. Fourth Phase since February 2003 In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust of India with assets under management of Rs.29,835 crores as at the end of January 2003, representing broadly, the assets of US 64 scheme, assured return and certain other schemes. The Specified Undertaking of Unit Trust of India, functioning under an administrator and under the rules framed by Government of India and does not come under the purview of the Mutual Fund Regulations. The second is the UTI Mutual Fund, sponsored by SBI, PNB, BOB and LIC. It is registered with SEBI and functions under the Mutual Fund Regulations. With the bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76,000 crores of assets under management and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund Regulations, and with recent mergers taking place among different private sector funds, the mutual fund industry has entered its current phase of consolidation and growth. The graph indicates the growth of assets over the years.

Concept of a mutual fund
A mutual fund is a common pool of money into which investors place their contributions that are to be invested with a stated objective. The ownership of the fund is thus joint or mutual and the fund belongs to all investors. A single investors ownership of the fund is in the same ratio as the amount of contribution made by him or bears to the total amount of the fund.
Meaning of Mutual Fund

Mutual Funds are investment products that operate on the principles of Strength in Numbers. They collect money from a large group of investors, pool it together, and invest it in various securities in line with their objective. They are an alternative to investing directly. A more convenient alternative yet no less rewarding. Take stocks, trading into the market by yourself would mean knowing at the very least, how to analyze and track companies, the way of the market and the intermediaries who will help you buy and sell shares. A mutual fund that invests in stocks relieves you of all such hassles, while giving you the same investment option for individuals handicapped by a lack of investing acumen or time, or generally disciplined to take charge of their personal finances.

The following simple diagram clearly shows the working of a mutual fund:
Mutual funds are not magic investment vehicles that do it all youll have to come to terms with the fact that they assure neither returns nor the value of yours original investment. Youll have to accept the reality that even they, who are supposedly experts in investments matter, can go wrong. These are inherent risks, but these can be managed. Mutual funds offer several advantages that make them a powerful and convenient wealth creation vehicle worthy of yours consideration
Characteristics of a Mutual Fund

A Mutual fund actually belongs to the investors who have pooled their funds. The ownership of the mutual funds is in the hands of the investors. In case of mutual fund the contributors and the beneficiaries of the funds are the same class of people namely the investors. Investment professionals manage a mutual fund and other service providers, who earn a fee for their services provided, from the fund. The pool of funds is invested in a portfolio of marketable investments. The value of the portfolio is updated every day.
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The investors share in the fund is denominated by UNITS. The value of the units changes with the change in the portfolios value, everyday. The value of one unit of investment is called as the net asset value or NAV HOW ARE THE MUTUAL FUNDS STRUCTURED? Mutual funds can be structured in the following ways: Company form, in which investors hold shares of the mutual fund. In this structure, management of the fund is in the hands of an elected board, which in turn appoints investment managers to manage the fund. Trust form, in which the funds of the investors are held by a trust, on behalf of the investors. The trust appoints investment managers and monitors their functioning in the interest of investors. 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 sponsor, who is the actually the entity interested in creating the mutual fund business. The trust is either managed by a Board of trustees, or by a trustee company, formed for this purpose. The investors funds are held by the trust. ORGANISATION OF A MUTUAL FUND There are many entities involved and the diagram below illustrates the organisational set up of a mutual fund:

Mutual funds have a unique structure not shared with other entities such as companies of firms. It is important for employees & agents to be aware of the special nature of this structure, because it determines the rights & responsibilities of the funds constituents viz., sponsors, trustees, custodians, transfer agents & of course, the fund & the Asset Management Company(AMC) the legal structure also drives the inter-relationships between these constituents. The structure of the mutual fund India is governed by the SEBI (Mutual Funds) regulations, 1996. These regulations make it mandatory for mutual funds to have a structure of sponsor, trustee, AMC, custodian. The sponsor is the promoter of the mutual fund,& appoints the trustees. The trustees are responsible to the investors in the mutual fund, & appoint the AMC for managing the investment portfolio. The AMC is the business face of the mutual fund, as it manages all affairs of the mutual fund. The mutual fund & the AMC have to be registered with SEBI. Custodian, who is also registered with SEBI, holds the securities of various schemes of the fund in its custody. Sponsor: establishes the Mutual fund &
The sponsor is the promoter of the mutual fund. The sponsor
registers the same with SEBI. He appoints the trustees, Custodians & the AMC with prior approval of SEBI, & in accordance with SEBI regulations. He must have at least five year track record of business interest in the financial markets. Sponsor must have been profit making in at least three of the above five years. He must contribute at least 40% of the capital of the AMC. Trustees:
The Mutual Fund may be managed by a Board of trustees a of individuals, or a trust company a corporate body. Most of the funds in India are managed by board of trustees. While the board of trustees is governed by the provisions of the Indian trust act, where the trustee is the corporate body, it would also be required to comply with the provisions of the companies act, 1956. the board of trustee company, as an independent body, act as protector of the unit-holders interest. The trustees dont directly manage the portfolio of securities. For this specialist function, they appoint an AMC. They ensure that the fund is managed by AMC as per the defined objectives & in accordance with the trust deed & SEBI regulations.
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The trust is created through a document called the trust deed i.e., executed by the fund sponsor in favor of the trustees. The trust deed is required to be stamped as registered under the provision of the Indian registration act & registered with SEBI. The trustees begin the primary guardians of the unit-holders funds & assets, a trustee has to be a person of high repute & integrity. Asset Management Company(AMC):
The role of an Asset management companies is to act as the investment manager of the trust. They are the ones who manage money of investors. An AMC takes decisions, compensates investors through dividends, maintains proper accounting & information for pricing of units, calculates the NAV, & provides information on listed schemes. It also exercises due diligence on investments & submits quarterly reports to the trustees. AMCs have been set up in various countries internationally as an answer to the global problem of bad loans. Bad loans are essentially of two types: bad loans generated out of the usual banking operations or bad lending, and bad loans which emanate out of a systematic banking crisis. It is in the latter case that banking regulators or governments try to bail out the banking system of a systematic accumulation of bad loans which acts as a drag on their liquidity, balance sheets and generally the health of banking. So, the idea of AMCs or ARCs is not to bail out banks, but to bail out the banking system itself.
Open-End Funds An open-ended fund is one that has units available foe sale and repurchase at all times. An investor can buy or redeem units from the fund itself at a price based on the Net Asset Value (NAV) per unit. NAV per unit is obtained by dividing the amount of the market value of the funds assets by the number of units outstanding. The number of outstanding goes up or down every time the fund issues new units or repurchase existing units. Closed-End Funds Unlike an open-end fund, the unit capital of a closed-ended fund is fixed, as it makes a one-time sale of a fixed number of units. Closed-ended funds do not allow investors but or redeem units directly from the funds. However, to provide the much-needed liquidity to investors, any closed-end funds get themselves listed on stock exchanges. Trading through a stock exchange enables investors to buy or sell units of a closed-end mutual fund from each other. Load and No-Load Funds Marketing of a new mutual fund scheme involves initial expenses. These expenses may be recovered from the investors in different ways at different times. Three usual ways in which a fund's sales expenses may recover from the investors are: 1. At the time of investor's entry into the fund/scheme, by deducting a specific amount from
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his Initial contribution, or 2. By charging the fund/scheme with a fixed amount each year, during the stated number of years, or 3. At the time of the investor's exit from the fund/scheme, by deducting a specified amount from the redemption proceeds payable to the investor. These charges made by the fund managers to the investors to cover distribution/sales/marketing expenses often called "loads". The load charged to the investor at the time of his entry into a scheme is called front-end or entry load". The load amount charged to the scheme over period of time is called a deferred load. The load that the investor pays at the time his exit is called a "back-end or exit load". Some funds may also charge different amounts of loads to the investors, depending upon how many years the investor is stayed with the fund; the longer the investor stays with the fund, less the amount of exit load" he charged. This is called contingent deferred sales charge". Funds that charge front-end, back-end or deferred loads are called load funds. Funds that make no such charges or loads for sales expenses are called no-load funds. A load fund's declared NAV does not include the loads. Hence, a new investor must add any front-end load amount per unit the NAV per unit to calculate his purchase price. An outgoing investor needs to deduct the amount of any back-end load per unit from his sale price per unit to get to know the net sale proceeds he would receive. Tax Exempt and Non-Tax Exempt Funds Generally, when a fund invests in tax-exempt securities, it is called a tax-exempt fund. In the U.S.A, For example, municipal bonds pay interest that is tax-free, while interest on corporate and other bonds is taxable. In India, after the 1999 Union Government Budget, all of the dividend income received from many of the Mutual funds is tax-free in the hands of the investor. However, funds other than Equity Funds have to pay a distribution tax, before distributing income to investors. In other words, equity mutual fund schemes are tax-exempt investment avenues, while other funds are taxable for distributable income.
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While Indian Mutual funds currently offer tax-free income, any capital gains arising out of sale of fund nits are taxable. All these tax considerations are important in the decision on where to invest as the tax exemptions or concessions alter returns obtained from these investments. Hence, classification Of Mutual funds from the taxability perspective has great significance for investors. Broad Fund types by Nature of Investments Mutual funds may invest in equities, bonds or other fixed income securities, or shortterm money market securities. So we have Equity, Bond and Money Market Funds. All of them invest in financial assets. But there are funds that invest in physical assets. For example, we may have Gold or other Precious Metals Funds, or Real Estate Funds.
Broad Fund Types by Investment Objective Investors and hence the mutual funds pursue different objectives while investing. Thus, Growth Funds invest for medium to long-term capital appreciation. Income Funds invest to generate regular income, and less for capital appreciation. Value Funds invest in equities that are considered under-valued today, whose value will be unlocked in the future. Broad Fund Types by Risk Profile The nature of a fund's portfolio and its investment objective imply different levels of risk undertaken. Funds are therefore often grouped in order of risk. Thus, Equity funds have a greater risk of capital loss than a Debt Fund that seeks to protect the capital while looking for income. Money Market Funds are exposed to less risk than even the Bond Funds,' since they invest in short-term fixed income securities, as compared to longer-term portfolios of Bond Funds. Money Market Funds Often considered the lowest rung order of risk level, Money Market Funds invest in securities of a short-term nature, which generally means securities of less than one-year maturity. The typical, short-term interest-bearing instruments these funds invest in include Treasury Bills issued by governments. Certificates of Deposit issued by banks and Commercial Paper issued by companies. In India Money market Mutual funds also invest in the inter-bank
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call money market. The major strengths of money market funds are the liquidity and safety or principal that investors can normally expect from short-term investments. Gilt Funds Gilts are government securities with medium to long-term maturities, typically of over one year (under one-year instruments being money market securities). In India we have now seen the emergence of Government Securities or Gilt Funds that invest in government paper called dated securities (unlike Treasury Bills that mature less These funds have little risk of default and hence offer better protection of principal. However, investors have to recognize the potential changes in values of debt securities held by the funds that are caused 'by changes in the market price of debt securities quoted on the stock exchanges (Just like the equities).Debt securities' prices fall when interest rate levels increase (and vice versa). Debt Funds (or Income Funds) Next in the order of risk level, we have the general category Debt Funds. Debt funds invest in debt instruments issued not only by governments, but also by private companies, banks and financial institutions and other entities such as infrastructure companies/utilities. By investing in debt, these funds target low risk and stable income for the investor as their key objectives. However, as compared to the money market funds, they do have a higher price fluctuation risk, since they invest longer-term securities. Similarly compared to Gilt Funds, general debt funds do have a higher risk of default by their borrowers. Debt Funds are largely considered as Income Funds as they do not target capital appreciation, look for high current income, and therefore distribute a substantial part of their surplus to investors. Income funds that target returns substantially above market levels can face more risks. The Income Funds fall largely in the category of Debt Funds as they invest primarily in fixed income generating debt instruments. Again, different investment objectives set by the fund managers would result in different risk profiles.
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Diversified Debt Funds A debt fund that invests in all available types of debt securities, issued by entities across all industries and sectors is a properly diversified debt fund. While debt funds offer high income and less risk than equity funds, investors need to recognize that debt securities are subject to risk of default by the issuer on payment of interest or principal. A diversified debt fund has the benefit of risk reduction through diversification and sharing of any default-related losses by a large number of investors. Hence a diversified debt fund is less risky than a narrow-focus fund that invests in debt securities of a particular sector or industry. Focused Debt Funds Some debt funds have a narrower focus, with less diversification in its investments. Examples include sector, specialized and offshore debt funds. These funds are similar to the funds described later in the equity category except that debt funds have a substantial part of their portfolio invested in debt instruments and are therefore more income oriented and inherently less risky than equity funds. However 'the Indian financial markets have demonstrated that debt funds should not be automatically considered to be less risky than equity funds, as there have been relatively large default by issuers of debt and many funds have non-performing assets in their debt portfolios. It should also be recognized that market values of debt securities will also fluctuate more as Indian debt markets witness more trading and interest rate volatility in the future. High Yield Debt Funds Usually, Debt Funds control the borrower default risk by investing in securities issued by borrowers who are rated by credit rating agencies and are considered to be of "investment grade". There are High Yield Debt Fund that seek to obtain higher returns by investing in debt instruments that are considered "below investment grade. Clearly, these funds are exposed to higher risk. In U.S.A., funds that invest in debt instruments that are not backed by tangible assets and rated
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below investment grade (popularly known as junk bonds) are called Junk Bond Funds. These funds tend to be more volatile than other debt funds, although they may earn higher returns as a result of the higher risks taken. Assured Return Funds Fundamentally, mutual funds hold assets in trust for investors. All returns and risks are for account of the investor. The role of the fund Manager is to provide the professional management service and to ensure the highest possible return consistent with the investment objective of the fund. Assured return debt fund certainly reduce the risk level. Fixed Term Plans Fixed Term Plans are closed-end, but usually for shorter term-less than a year. Being of short duration, they are not listed on a stock exchange. As investors move from Debt Fund category to Equity Funds they face increased risk level. However, there is a large variety of Equity Funds and all of them are not equally risk-prone. Investors and their advisors need to sort out and select the right equity fund that suits their risk appetite
Equity funds invest a major portion of their corpus in equity shares issued by companies, acquired directly in initial public offerings or through the secondary market. Equity funds would be exposed to the equity price fluctuation risk at the market level at the industry or sector level and at the company-specific level. Equity Funds Net Asset Values fluctuate with all these price movements. These prices are caused by all kinds of external factors, political and social as well as economic. Hence, Equity Funds are generally considered at the higher end of the risk spectrum among all funds available in the market. Equity funds adopt different investment strategic resulting in different levels of risk. Hence, they are generally separated into different types in terms of their investment styles. Some of the major types of equity funds, arranged in order of higher to lower risk level. Aggressive Growth Funds
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There are many types of stocks/shares available in the market; Blue Chips that are recognized market leaders, less researched stocks that are considered to have future growth potential, and even some speculative stocks of somewhat unknown or unproven issuers. Fund managers seek out and invest in different types of stocks in line with their own perception of potential returns and appetite for risk. Aggressive growth funds target maximum capital appreciation, invest in less researched or speculative shares and may adopt speculative investment strategies to attain their objective of high returns for the investor. Consequently, they tend to be more volatile and riskier than other funds. Growth Funds These funds invest in companies whose earnings are expected to rise at an above average rate. These companies may be operating in sectors like technology considered having a growth potential, but not entirely unproven and speculative. The primary objective of Growth Funds is capital appreciation over a three to five year span. Growth funds are therefore less volatile than funds that target aggressive growth. Specialty Funds These funds have a narrow portfolio orientation and invest in only companies that meet predefined criteria. For example, at the height of the South African apartheid regime, many funds in the U.S. offered plans that promised not to invest in South African companies. Some funds may build portfolios that will exclude Tobacco companies. Funds that invest in particular regions such as the Middle East or the ASEAN countries are also an example of specialty funds. Within the Specialty Funds category, some funds may be broad-based in terms of the types of investments in the portfolio. However, most specialty funds tend to be concentrated funds, since diversification is limited to one type of investment. Clearly, concentrated specialty funds tend to be more volatile than diversified funds. Sector Funds Sector funds' portfolios consist of investments in only one industry or sector of the market such as Information on Technology, Pharmaceuticals or Fast Moving Consumer Goods that have
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recently been launched in India. Since sector funds do not diversify into multiple se Offshore Funds.
Offshore Funds These funds invest in equities in one or more foreign countries thereby achieving diversification across the country's borders. However they also have additional risks - such as the foreign exchange rate risk - and their performance depends on the economic conditions of the countries they invest in. Offshore Equity Funds may invest in a single country (hence riskier) or many countries (hence more diversified). Small Cap Equity Funds These funds invest in shares of companies with relatively lower market capitalization than that of big, blue chip companies. They may thus be more volatile than other funds, as smaller companies' shares are not very liquid in the markets. In terms of risk characteristics, small company funds may be aggressive-growth or just growth type. Option Income Funds Option Income Funds write options on a significant part of their portfolio. While options are viewed as risky instruments, they may actually help to control volatility, if properly used. Conservative option funds invest in large, dividend paying companies, and then sell options against their stock positions. This ensures a stable Income stream in the form of premium income through selling options and dividends. Diversified Equity Funds A fund that seeks to invest only in equities except for a very small portion in liquid money market securities, but is not focused on any one or few sectors or shares, may be termed a diversified equity funds seek to reduce the sector or stock specific risks through diversification. They have mainly market risk exposure. Diversified funds arc clearly at the lower risk level than growth funds Equity Linked Saving Schemes: An Indian Variant
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In India, the investors have been given tax concessions to encourage them to invest in equity markets through these special schemes. Investment in these schemes entitles the investor to claim an income tax rebate, but usually has a lock-in period before the end of which funds cannot be withdrawn. These funds are subject to the general SEBI investment guidelines for all equity funds, and would be in the Diversified Equity Fund category. However, as there are no specific restrictions on which sectors these funds ought to invest in, investors should clearly look for where the Fund Management Company proposes to invest and accordingly judge the level of risk involved. Equity Index Funds An index fund tracks the performance of a specific stock market index. The objective is to match the performance of the stock market by tracking an index that represents the overall market. The fund invests in shares that constitute the index and in the same proportion as the index. Since they generally invest in a diversified market index portfolio, these funds take only the overall market risk, while reducing the sector and stock specific risks through diversification. Value Funds Value Funds try to seek out fundamentally sound companies whose shares arc currently underpriced in the market. Value Funds will add only those shares to their portfolios that are selling at low price-earnings ratios, low market to book value ratios and are undervalued by other yardsticks. Value funds have the equity market price fluctuation risks, but stand often at a lower end of the risk spectrum in comparison with the Growth Funds. Value Stocks may be from a large number of sectors and therefore diversified. Equity Income funds Usually income funds are in the Debt Funds category, as they target fixed income investments. However, there are equity funds that can be designed to give the investor a high level of current income along with some steady capital appreciation, investing mainly in shares of companies' with high dividend yields. Hybrid Funds Quasi Equity/Quasi Debt
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Money market holdings will constitute a lower proportion in the overall portfolios of debt or equity funds. There are funds that, however, seek to hold a relatively balanced holding of debt and equity securities in their portfolio. Such funds are termed "hybrid funds" as they have a dual equity/bond focus. Balanced Fund A balanced fund is one that has a portfolio comprising debt instruments, convertible securities, and Preference equity shares. Their assets are generally held in more or less equal proportions between debt/money market securities and equities. By investing in a mix of this nature, balanced funds seek to attain the objectives of income, moderate capital appreciation and preservation of capital, and are ideal for investors with a conservative and long-term orientation. Growth-and-Income Funds Unlike income-focused or growth-focused funds, these funds seek to strike a balance between capital appreciation and income for the investor. Their portfolios are a mix between companies with good dividend paying records and those with potential for capital appreciation. These funds would be less risky than pure growth funds, though more risky than income fund. Commodity Funds Commodity funds specialize in investing in different commodities directly or through shares of commodity companies or through commodity future contracts. Specialized funds may invest in a single commodity or a commodity group such as edible oils or grains, while diversified commodity funds will spread their assets over many commodities. Real Estate Funds Specialized Real Estate Funds would invest in Real Estate directly, or may fund real estate developers, or lend to them, or buy shares of housing finance companies or may even buy their securities assets. The funds may have a growth orientation or seek to give investors regular income. There has recently been an initiative to offer such an income fund by the HDFC.
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Benefits of Mutual Fund Portfolio Diversification Return on investment from just one industry or sector are subject to how well or poorly the industry fares. But with mutual fund ones money is invested across different sector. This reduces the risk of low returns on investments, because rarely do different sectors decline at the same time. Professional Management A mutual fund draws on the professional expertise of a team of research analysts and fund managers in investing ones saving in a number of securities. Reduction of Transaction Costs The purchase or sale of financial assets through the exchanges entails a certain proportion of changes known as transaction made. Investments through mutual fund reduce these costs considerably as they enjoy the benefits of economies of scale. Liquidity If one invests in an open-ended mutual fund, one can claim the money at net asset value related prices from the mutual fund itself. Convenience and Flexibility One has access to up-to-date information on the value of the investment in addition to the investments that have been made by the scheme, the proportion allocated to different assets and the fund managers investment strategy. Return Potential
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Investing in a Mutual Fund reduces paperwork and helps to avoid many problems such as bad deliveries, delayed payments and follow up with brokers and companies. Mutual Funds save time and make investing easy and convenient.
Transparency Through features such as regular investment plans, regular withdrawal plans and dividend reinvestment plans, one can systematically invest or withdraw funds according to once 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.
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.
Disadvantages of Mutual Funds:

Professional ManagementDid you notice how we qualified the advantage of professional management with the word "theoretically"? Many investors debate over whether or not the so-called professionals are any better than you or I at picking stocks. Management is by no means infallible, and, even if the fund loses money, the manager still takes his/her cut. We'll talk about this in detail in a later section. Costs
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Mutual funds don't exist solely to make your life easier--all funds are in it for a profit. The mutual fund industry is masterful at burying costs under layers of jargon. These costs are so complicated that in this tutorial we have devoted an entire section to the subject. Dilution It's possible to have too much diversification (this is explained in our article entitled "Are You Over-Diversified?"). Because funds have small holdings in so many different companies, high returns from a few investments often don't make much difference on the overall return. Dilution is also the result of a successful fund getting too big. When money pours into funds that have had strong success, the manager often has trouble finding a good investment for all the new money. Taxes When making decisions about your money, fund managers don't consider your personal tax situation. For example, when a fund manager sells a security, a capital-gain tax is triggered, which affects how profitable the individual is from the sale. It might have been more advantageous for the individual to defer the capital gains liability.
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COMPANY PROFILE
IDFC is a leading private sector diversified financial institution established by a consortium of strong global & local institutions with the support & sponsorship of the government of India. A majority of IDFCs shareholding (67% as of march 31st, 2008) is held by reputed global stalwarts that include respectable names like government of India, International Finance Corporation (IFC) a member of the world bank group, Government of Singapore, AIG, Morgan Stanley, Goldman Sachs, City Group, JP Morgan among others. The best Indian Financial Institutions such as HDFC, LIC, SBI & IDBI are owners in IDFC, making it an institution of high repute & standing.
HISTORY OF IDFC
The Fund was established on march 13th 2000. Now the management of the fund has been taken over by Standard Chartered Bank, the UK based banking conglomerate. The name of the AMC too has been changed from ANZ AMC. Previously sponsored by ANZ Banking Group, Australia, this fund has just set up its operations in the year 2000. Australia & New Zealand Banking Group Limited, the previous sponsor of the fund, is leading International Bank & is also one of the Big Four Australian commercial Banks providing a full range of Banking & financial services with total assets of US $ 97.35 billion as on 30th September, 1999. ANZ funds management is a core business unit of the group & its one of Australias largest fund managers. It has a full range of investment product & services managing more than AUD $ 13267.7 million in customer funds on 30th September., 1999. ANZ Banking group as significant presence in 35 nations from the Middle East to through South Asia & East Asia to Pacific
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Schemes offered by IDFC.

IDFC Schemes No. of Schemes No. of Schemes 84
No. of Schemes including options 269 Equity Schemes Debt Schemes Short term Debt Schemes Equity & Debt Money Market Gilt fund Source: www.idfcmf.net The table infers the no. of schemes offered by IDFC, there are 84 schemes and including the options there are 269 schemes the schemes are divided into plans as Growth option etc.The debt schemes available are 209 out of which there are 7 major schemes which are dealt with. 24 209 19 0 0 13
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Financial Performance of the Sponsor in last three years PARTICULARS 31.03.08 31.03.07 31.03.06
(Rs in crores) (Rs in crores) (Rs in crores)
Net Worth Total Income Profit after tax Assets Under Management (under its private equity business) Source: www.idfcmf.net
5454.38 2532.42 669.17 2545
2882.03 1505.74 462.87 2671
2544.19 1002.36 375.64 2551
The table infers the financial position for the past three years. Their net worth, total income, profit after tax asset under management are mentioned. There is a consistent increase in the financial performance. Year after year there is an increase in the profit than the previous year showing that the organization is financially strong.
ASSET MANAGEMENT
IDFC is determined to construct a comprehensive asset management business that consists of :
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Private Equity investments through IDFC Private Equity Co. Ltd. Project Equity through IDFC Project Equity Co. Ltd,
Public Market Investment Advisory Services through IDFC investment Advisors
Limited. IDFC Private Equity manages a corpus of US $ 630 million & is Indias largest & most active private equity focused on Infrastructure. The two funds under management are India Development Fund (IDF) & IDFC Private equity fund. IDFC, along with citigroup & India Infrastructure finance company limited (IIFCL) launched a landmark US $ 5 billion initiative for financing infrastructure projects in India. The Equity fund will be solely managed by IDFC. IDFC plans to raise approximately $ 1.7 billion in private & project funds focused on Infrastructure. The objective is to build a large asset management platform focused on private investments & public markets through a variety of domestic & offshore products.
IDFC PRODUCT RANGE

The categories of funds offered by IDFC are Equity funds, Debt funds & Liquid funds which is further categorized in to different types as shown in the chart below:
\IDFC PRODUCT RANGE IDFC PRODUCT RANGE
Equity Funds 24 MS
Debt Funds Balanced
RAMMAIAH INSTITUTE OF MANAGEMENT fund - Bangalore

Classic Equity Fund EQUITY FUND Super Saver Income Fund, Liquid Funds
IDEAL INVESTMENT HORIZON
DATE
OF
INCEPTION
Classic Equity Fund
3 yrs or more
9th Aug 2005
Imperial Equity Dynamic Bond Fund Fund Cash Fund Super Saver Premier Equity Income FundFund Arbitrage Fund und Money manager Fund- Treasury Arbitrage Plus Fund Government Securities Fund-
Imperial Equity Fund 3 yrs or more
16th March 2006
Premier Equity Arbitrage Fund
3 yrs or more 1 yrs or more
28 sep 2005 21st Dec 2006
th
Super Saver Enterprise Equity Income Fund- Short Fund All Season Bond Small & Midcap Fund Equity (SME)fund
Strategic IDFC Sector(50-50)
Arbitrage Plus Fund
1 yrs or more
9th June 2008
money fund-
Equity Fund manager
Enterprise Equity Fund

Nifty Fund
3 yrs or more
9th June 2006
investment plan
Small & Midcap Equity (SME)fund
1 yrs or more
7th March 2008
Tax Advantage (ELSS)Fund
INDIA GDP growthfund
Strategic Sector(5050) Tax Advantage (ELSS)Fund
3 yrs or more
3rd Oct 2008
Lock in period 26th Dec 2008 of 3yrs 3 yrs or more 30th April 2010
Nifty Fund
25
INDIA GDP - Bangalore or more 3 yrs growthfund
MS RAMMAIAH INSTITUTE OF MANAGEMENT

11th March 2009
26

Source: Fund review of IDFC for the month of march 2010
Liquid Funds
DEBT FUND
IDEAL DIVIDEND DATE OF INCEPTION DATE OF IDEAL INVESTMENT FREQUENCY INVESTMENT INCEPTION HORIZON HORIZON
nd July Annually Quarterly, Half2Yearly,2001
Cash Funds Super Income Investment
1 or more Saver 1 Year Day or More Fund-
14th July 2000
1 Year or more Dynamic Fund Super Income Saver 6 months or more FundBond
Quarterly & Annually
25th June 2002
Bi-monthly, Monthly, Fortnightly 8th July 2003 & daily
Medium Term Super Term Money plan Money Manager 1 day or more Fund Investment Plan Daily & Weekly(with 9th August Manager 1 day or more Monthly & Daily/Weekly with 18th compulsory reinvestment 2003 February saver 3 months or more Monthly, Fortnightly 14th 2000 December
Income Fund-Short
Fund-Treasury
reinvestment facility in both Plan 2004 A &plan B), Monthly, Quarterly and Annual.
Government Securities 27 MS
1 year or more
Quarterly/Half yearly/Yearly
9th March 2002
FundRAMMAIAH INSTITUTE OF MANAGEMENT Investment Plan - Bangalore All Seasons Bond 1 year or more Fund Quarterly/Half yearly & Annual 13th September 2004
28
Source: Fund Review of IDFC for the month of May 2009 and www.idfcmf.net. Table shows various debt funds of IDFC Mutual Funds, their ideal investment horizon, dividend frequency and the date of inception. There are 7 types of debt funds super saver income fundmedium term is good for investing for more than 6 months, super saver income fund-short term is suitable for more than 3 months & all other funds for more than one year.
SWOT ANALYSIS
Strengths Good brand name of the company in all over India. Flexible products. Expertise in the field of Mutual Fund. Sound Financial Resources of the company as well as sponsors. Strong communication network all over the country. Weakness Less awareness regarding mutual funds among the investors. Yet to build strong distribution network. Cannot tap rural market. Opportunities
29

Untapped rural market Lack of competitive products to suit clients investment objectives. Threats The numbers of players are increasing which further increases the competition. Product innovation done by other asset management companies & is able to collect large amounts. Customer mindsets are still rigid & they mostly prefer traditional pattern of investments.
Statement of the Problem

With a plethora of schemes to choose from, the retail investor faces problems in selecting funds. Factors such as investments strategy & management style are qualitative, but the funds record is an important indicator too. Though past performance alone cannot be indicative of future performance, it is the only quantitative way to judge how good a fund is at present. Therefore, there is a need to correctly assess the past performance of different mutual funds. The evaluation would help the investors to choose the appropriate schemes while portfolio, in order to ensure better returns for their investments. In this study an attempt is made to evaluate the performance of equity diversified growth oriented mutual fund schemes of different AMCs on the basis of quarterly returns compared to benchmark returns. For this purpose, risk adjusted performance measures suggested by Jenson, Treynor and Sharp are employed.
30

Objectives of the study
To understand the various mutual fund schemes offered by the different AMCs To compare the performance of various AMCs offering equity diversified growth oriented schemes. To measure & analyze the return of the sampled mutual fund equity diversified growth oriented schemes and compares them with the market returns. To suggest the investors of the performance of various AMCs by ranking them based on the performance measures.
Scope of the Study

The study considers only equity diversified growth oriented mutual fund schemes. The performance of the mutual fund scheme is evaluated, based on the quarterly returns for the past three i.e. from 2007 to 2009. The returns of the schemes are compared with the benchmark which is nifty. The sample of ten equity diversified growth oriented schemes selected for the study represents the population of equity diversified growth schemes offered by different AMCs.
METHODOLOGY Research Design

The research design is descriptive in nature, the study attempts to analyze & evaluate the existing data system, through the financial data. For this purpose, risk adjusted performance measures suggested by Jenson, Treynor & Sharpe are employed. Here the comparison is done on the various well performed schemes selected from different fund houses or AMCs. The analysis is done on the percentage of returns from the last three consecutive years (2007-09)
Sampling Design
31

The sampling design used is convenience Sampling. Ten equity diversified growth oriented mutual fund schemes each from different AMCs are selected. In this study ten equity diversified growth oriented schemes have been considered. They are : ABN Amro Equity Fund (growth) DSP-ML India T.I.G.E.R. Fund (growth) HSBC Equity Fund (growth) HDFC Equity Fund (growth) JM Basic Fund (growth) Kotak Opportunities Fund (growth) ICICI Pru Growth (growth) SBI Magnum Equity Fund (growth) Tata Infrastructure Fund (growth) Sundaram BNP Paribas Growth Fund (growth) The Research method is descriptive in nature. The whole study is based on both primary & secondary data. They are: 1. Information collected from the company. 2. Information from the internet. 3. Data collected from newspaper, books an journals. 4. Data collected from National stock Exchange websites & brochures. Tools use for the Analysis A. Performance measures Treynors measure Sharpe measure
32

Jenson measure
B. Statistical tools Mean Standard deviation
Treynors performance index: According to him systematic risk or beta is the appropriate measure of risk . He relates the excess of return on a portfolio to the beta i.e., systematic risk.
Average rate of return Average rate of return
Treynors measure =
on portfolio p free investment
on risk
Beta of Portfolio p
Sharpes performance index: The sharpers measure is similar to the Treynors measure except that it employs standard deviation and not beta value as the measure of risk.
Average rate of return Average rate of return on portfolio p free investment on risk
Sharpe Measure =
Standard deviation of return of Portfolio p
33

Jensons performance index: It reflects the difference between the return actually earned on a portfolio and the return the portfolio was supposed to earn.
Risk free + portfolio Beta Average returns Return Risk on market portfolio free return
Jenson Measure =
Mean The mean is the mathematical average of a set of numbers. The average is calculated by aping up two or more scores an giving the total by the number of scores. Mean= X N Where: X= Values in the set N= Number of values in the set
Standard Deviation It measures how widely values are dispersed from the average. Dispersion is the difference between the actual value and the average value. The larger the difference between the closing prices and the average price, the higher the standard deviation will be and the higher the volatility and vice verse.
(RA RA*) 2 Standard Deviation of return =

34
N-1

Operational Definitions: Return can be defined as the amount or rate of proceeds, gain, profit which accrues to an economic agent from an undertaking or enterprise or real/ financial investment. It is a motivating force behind investment, the objective of an investor is usually to maximize return.
Ending NAV Beginning NAV + Dividend paid during the period Beginning NAV b) Standard Deviation of return =
a) Returns =
(RA RA*) 2 N-1
c) Beta =
(RA RA*) (RM RM*) (RM RM*) 2
OR
COV (RA,
Beta (A) =
RM) 2M (RA RA*) (RM
d) COV (RA, RM) =
RM*) (N-1) (RM
e) 2M(variance) = 35
RM*)
(N-1) MS RAMMAIAH INSTITUTE OF MANAGEMENT - Bangalore
RA RM N 2M RM* RA*
: Return of the portfolio A : Return of the market M : Number of periods : variance of market return : Average return of market : Average return of portfolio A
f) Net Asset Value (NAV):
In simple words, Net Asset Value is the market value of the securities held by the scheme. Since market value of securities changes every day, NAV of a scheme also varies on day-to-day basis. It is the current price of every unit of a fund. Formula of the calculation of Net Asset Value (NAV)
Net Asset Value =
Market Value of Investments No. of units Outstanding
LIMITATIONS OF THE STUDY: The study is limited to equity diversified growth schemes. Only ten growth orient mutual funds are compared and analyzed. Since only one scheme is selected from one company, the companys overall performance cannot be judged by the performance of that particular scheme. Sundaram BNP Paribas Growth Fund (Growth) Objective of the Fund
36

The primary aim of the scheme is to achieve Capital Appreciation by investing in equity and equity related securities of different companies. The fund size is 182.43 crores as on 29 th 2008.
Table showing the schemes return

Date Opening NAV Jan 05-Mar 05 Apr 05-June 05 Jul 05- Sept 05 Oct 05-Dec 05 Jan 06-Mar 06 Apr 06-June 06 Jul 06- Sept 06 Oct 06-Dec 06 Jan 07-Mar 07 Apr 07-June 07 Jul 07- Sept 07 Oct 07-Dec 07 TOTAL 34.29 34.186 36.028 43.683 48.171 63.195 54.539 61.359 69.392 60.1 72.585 88.647 Closing NAV 33.02 35.752 43.222 48.126 61.302 54.078 61.359 68.631 62.759 72.512 87.065 116.197 Quaterly Returns (RA ) -3.7 4.6 20 10.2 27.3 -14.4 12.5 11.9 -9.6 20.7 19.6 31.1 130.2 Mean (RA* ) 10.85 10.85 10.85 10.85 10.85 10.85 10.85 10.85 10.85 10.85 10.85 10.85 (RA-RA* ) (RA-RA* )2 (RA-RA* ) (RM-RM* ) 174.16 4.81 66.88 0.51 166.14 -63.58 8 0.714 275.87 31.03 58.28 251.1 973.9161
-14.55 -6.25 9.15 -0.65 16.45 -25.25 1.65 1.05 -20.45 9.85 8.75 20.25
211.70 39.06 83.72 0.42 270.60 637.56 2.72 1.10 418.20 97.02 76.56 410.06 1629.11
Table showing market return

Date Opening NAV Jan 05-Mar 05 Apr 05-June 05 Jul 05- Sept 05 2080 2035.9 2220.6 Closing NAV 2035.65 2220.6 2601.4 Quaterly Returns (RA ) -2.1322 9.072 17.15 Mean (RA* ) 9.84 9.84 9.84 -11.97 -0.768 7.31 143.2809 0.589824 53.4361 (RA-RA* ) (RA-RA* )2
37

Oct 05-Dec 05 Jan 06-Mar 06 Apr 06-June 06 Jul 06- Sept 06 Oct 06-Dec 06 Jan 07-Mar 07 Apr 07-June 07 Jul 07- Sept 07 Oct 07-Dec 07 TOTAL 2601 2836.8 3403.15 3128.75 3588.95 3966.25 3821.55 4318.3 5021.6 2836.55 3402.55 3128.2 3588.4 3966.4 3821.55 4318.3 5021.35 6138.6 9.056 19.94 -8.07 14.69 10.52 -3.65 12.99 16.28 22.24 118.0858 9.84 9.84 9.84 9.84 9.84 9.84 9.84 9.84 9.84 -0.784 10.1 -17.91 4.85 0.68 -13.49 3.15 6.44 12.4 0.614656 102.01 320.7681 23.5225 0.4624 181.9801 9.9225 41.4736 153.76 1031.82068
Calculation: Average Nifty Return (RM*) = R N = 118.086 12 = 9.84 R N = 130.2 12 = 10.85
Average Return of the scheme (RA*) =
Standard deviation (Nifty) =

38
(RA RA*) 2

(N 1)
1031.82 11
= 9.6850
Standard Deviation (Scheme Risk) =
(X X*) 2 (N 1)
1629.11 11
= 12.1696
Beta of Scheme () = COV (R, X) SD2R
(R R*) (X X*) / (n-1) (R R*) 2 / (n-1)
88.5378 93.8018
39

= 0.9439
Average rate of return rate of return
Average on risk free
Treynor Ratio (Scheme) =
On portfolio p investment Beta of portfolio
= (10.85 7.35) 0.9439 = 3.7080

Average rate of return rate of return Average on risk free Beta of portfolio p
Treynor Ratio (Nifty) =
On portfolio p investment
= (9.84 7.35) 1 = 2.49

Average rate of return of return On portfolio p investment Average rate on risk free
Sharpe Ratio (Scheme) =
Standard Deviation of return of portfolio p
(10.61 7.35) 13.0524
=
40
0.2498

Average rate of return rate of return Average on risk free
Sharpe Ratio (Nifty) =
On portfolio p investment
Standard Deviation of return of portfolio p
(9.84 7.35) 9.6851
0.2571
Average rate of return rate of return
Average
Jenson Measure (Scheme) =
Risk free + portfolio beta On portfolio p investment Return
on risk free
= =
10.61{7.35+0.8043(9.84-7.35)} 1.2573
Performance Measure Calculation: Particulars Average Return Beta Risk Treynor Sharpe
41
Sundaram BNP Paribas S & P CNX NIFTY 10.85 0.9439 12.1696 3.708 0.2876 9.84 1 9.685 2.49 0.2571

Jenson 1.1496 0
INTERPRETATION From the table, Sundaram BNP Paribas Growth Earned an average return of 10.85% as against the market return of 9.84% The beta value indicates that 1% increase in market portfolio return results in 0.9439% increased in the fund returns and 1% decrease in the market portfolio results in 0.9439% decrease. The high standard deviation (Risk) of 12.169% indicates the volatility of the fund returns. The positive alpha value (Jenson ratio) indicates that the superior performance of the fund in comparison to the market. The high variability ratio (Sharpe ratio) indicates that the investors can earn superior returns by taking greater risk than the market. The reward to variability ratio (Treynor ratio) is higher than the benchmark which indicates its superior performance. From these three measures it can be concluded that the Sundaram BNP Paribas fund (Growth) has a performed over its benchmark.
Chart showing the scheme return and market return of Sundaram BNP Paribas Growth fund.
42
43
ICICI PUR Growth (Growth) Objective of the fund To generate long-term capital appreciation to your from a portfolio made up predominantly of equity related securities. Table showing the scheme returns
Date Opening NAV Jan 05-Mar 05 Apr 05 Jul 05- Sept 05 Oct 05-Dec 05 Jan 06-Mar 06 Apr 06 Jul 06- Sept 06 Oct 06-Dec 06 Jan 07-Mar 07 Apr 07 Jul 07- Sept 07 99.71 116.07 16.4 9.82 6.58 43.29 42.37 07-June 73.42 84.12 94.48 85.15 84.52 93.36 89.18 99.94 15.1 11 -5.6 17.4 9.82 9.82 9.82 9.82 5.28 1.18 -15.42 7.58 27.88 1.39 237.78 57.46 25.61 0.80 -208.01 23.87 06-June 48.08 59.62 65.58 82.66 58.84 65.39 80.76 73.04 22.4 9.7 23.1 -11.6 9.82 9.82 9.82 9.82 12.58 -0.12 13.28 -21.42 158.26 0.01 176.36 458.82 91.96 0.09 134.13 383.63 05-June 44.08 44.92 Closing NAV 44.27 47.03 Quarterly Returns (RA ) 0.4 4.7 Mean (RA* ) 9.82 9.82 (RARA* ) -9.42 -5.12 88.74 26.21 (RA-RA* )2 (RA-RA* ) (RM-RM* ) 112.75 3.94
44

Oct 07-Dec 07 TOTAL 116.39 133.6 14.8 9.82 4.98 24.80 1300.99 61.75 672.89
Performance Measures Calculation Particulars Average Return Beta Risk Treynor Sharpe Jenson Sundaram BNP Paribas S & P CNX NIFTY 10.85 0.9439 12.1696 3.708 0.2876 1.1496 9.84 1 9.685 2.49 0.2571 0
INTERPRETATION From the table ICICI Pru Fund Growth Earned an average return of 9.82% as against the market return of 9.84%. The beta value indicates that 1% increase in market portfolio returns result in 0.6521% increase in the fund returns and 1% decrease in the market portfolio results in 0.6521% decrease in the fund. The high standard deviation (Risk) of 10.8753% indicates the high volatility of the fund returns. The positive alpha value (Jenson ratio) indicates the superior performance of the fund in comparison to the market.
45

The high variability ratio (Treynor ratio) is higher than the benchmark which indicates its superior performance. It can be concluded that according to Jenson and Treynor ICICI Pru Fund (Growth) has performed over its benchmark.
Chart showing the Scheme and Market returns of ICICI Pru Growth Fund
46
Kotak Opportunities Fund (Growth) Objective of fund The scheme aims to generate capital appreciation from a diversified portfolio of equity and equity related securities. Kotak opportunities have a flexible investing style and it invests in sectors, which the fund managers believe would outperform others in the short to medium-term. Table showing the scheme return
Date Opening NAV Jan 05-Mar 05 Apr 05-June 05 Jul 05- Sept 05 Oct 05-Dec 05 Jan 06-Mar 06 Apr 06-June 06 Jul 06- Sept 06 Oct 06-Dec 06 Jan 07-Mar 07 Apr 07-June 07 Jul 07- Sept 07 13.205 13.043 14.743 18.188 20.574 26.498 22.768 25.45 28.725 26.836 32.38 Closing NAV 12.764 14.471 17.648 20.45 25.89 23.252 24.327 28.067 27.944 31.515 33.011 Quaterly returns (RA ) -3.3 9.22 21.8 12.4 23.8 -14.7 12 11.5 -2.7 20 16.7 Mean (RA* ) 9.22 9.22 9.22 9.22 9.22 9.22 9.22 9.22 9.22 9.22 9.22 -15.73 0.17 9.37 -0.03 11.37 -27.13 -0.43 -0.93 -15.13 7.57 4.27 247.43 0.03 87.80 0.00 129.28 736.04 0.18 0.86 228.92 57.30 18.23 (RA-RA* ) (RA-RA* )2 (RA-RA* ) (RM-RM* ) 188.288 -0.1309 68.49 0.0234 114.837 485.89 2.085 0.6324 -204.103 23.84 27.49
47

Oct 07-Dec 07 TOTAL 38.545 47.629 39.1 9.22 26.67 711.29 2217.37 330.708 1038.0499
Performance Measure Calculation Particulars Average Return Beta Risk Treynor Sharpe Jenson Sundaram BNP Paribas S & P CNX NIFTY 12.43 0.9794 14.1975 5.1868 0.3578 2.6413 9.84 1 9.685 2.49 0.2571 0
INTERPRETATION From the table, Kotak Opportunities fund-Growth Earned an average return of 12.43% as against the market return of 9.84%. The beta value indicates that 1% increase in marked portfolio results in 0.9794% increase in the returns and 1% decrease in the market portfolio results in 0.9794% decrease in the fund. The high standard deviation (Risk) of 14.1975% indicates the high volatility of the fund returns. The positive alpha value (Jenson ratio) indicates the superior performance of the fund in comparison to the market.
48

The high variability ratio (Sharpe ratio) indicates that the investors can superior fund earn returns by taking greater risk than the market. The reward to variability ratio (Treynor ratio) is higher than the benchmark which indicates its superior performance. From these measures it can be concluded that performance of Kotak opportunities fund (Growth) is doing better than the benchmark. Chart showing the Scheme and Market returns Kotak Opportunities Fund (Growth)
49
DSP-ML INDIA T.I.G.E.R. FUND (Growth) Objective of the fund DSP ML T.I.G.E.R. fund (The infrastructure growth and Economic Reforms Fund). The scheme aims to generate capital appreciation, from a portfolio that is substantially constituted of equity and related securities of corporate. Table showing the schemes return
Date Openi ng NAV Jan 05-Mar 05 Apr 05June 05 Jul 05- Sept 05 Oct 05-Dec 05 Jan 06-Mar 06 Apr 06June 06 14.17 14.06 14.78 19.54 21.63 27.96 Closi ng NAV 13.79 14.58 19.45 21.5 27.15 23.69 Quaterly returns (RA ) -2.7 3.7 31.6 10 25.5 -15.3 12.91 12.91 12.91 12.91 12.91 12.91 -15.61 -9.21 18.69 -2.91 12.59 -28.21 243.672 1 84.8241 349.316 1 8.4681 158.508 1 795.804 1 Mean (RA* ) (RARA* ) (RA-RA* )2 (RA-RA* ) (RMRM* ) 186.85 7.09 136.62 2.29 127.15 505.24
50

Jul 06- Sept 06 Oct 06-Dec 06 Jan 07-Mar 07 Apr 07June 07 Jul 07- Sept 07 Oct 07-Dec 07 TOTAL 23.86 28.29 33.109 30.297 38.427 46.44 28.26 32.77 3 31.54 38.23 1 45.85 7 59.03 6 18.4 15.8 -4.7 26.2 19.3 27.1 12.91 12.91 12.91 12.91 12.91 12.91 5.49 2.89 -17.61 13.29 6.39 14.19 30.1401 8.3521 310.112 1 176.624 1 40.8321 201.356 1 2408.00 92 26.62 1.9652 -237.55 41.86 41.15 175.95 1015.2 35
Performance Measure Calculations Particulars Average Return Beta Risk Treynor Sharpe Jenson Sundaram BNP Paribas S & P CNX NIFTY 12.9083 0.9831 14.7955 5.6538 0.3756 3.1064 9.84 1 9.685 2.49 0.2571 0
INTERPRETATION
51

From the tables, DSP-ML INDIA T.I.G.E.R. FUND (Growth) Earned an average return of 12.9083% as against the market return of 9.84% The beta value indicates that 1% increase in market portfolio returns results and 1% decrease in the market portfolio results in 0.9831% decrease in the fund. The high standard deviation (Risk) of 14.7955% indicates the high volatility of the fund returns. The positive alpha value (Jenson ratio) indicates the superior performance of the fund in comparison to the market. The high variability ratio (Sharpe ratio) indicates that the investors can earn superior returns by taking greater risk than the market.) The reward to variability ratio (Treynor ratio) is higher than the benchmark which indicates its superior performance. It can be concluded that the DSP-ML INDIA T.I.G.E.R. FUND (Growth) has performed over its benchmark.
Chart showing the scheme and market returns of DSP-ML INDIA T.I.G.E.R. FUND
52
SBI Magnum Equity Fund (Growth) Objective of the fund

53

The scheme invests in companies having sustainable competitive advantage owing to their leadership in technology, brands, distribution network and adopts bottom-up approach in choosing companies. Table showing the scheme returns
Date Openi ng NAV Closi ng NAV Quaterly returns (RA ) Mean (RA* ) (RARA* ) (RA-RA* )2 (RA-RA* ) (RMRM* ) Jan 05-Mar 05 Apr 05June 05 Jul 05- Sept 05 Oct 05-Dec 05 Jan 06-Mar 06 Apr 06June 06 Jul 06- Sept 06 Oct 06-Dec 06 Jan 07-Mar 07 Apr 07June 07 Jul 07- Sept 30.67 36.1 17.7 11.42 6.28 39.4384 40.44 25.6 30.61 19.6 11.42 8.18 27.87 26.61 -4.5 11.42 -15.92 253.446 4 66.9124 25.767 -214.76 24.02 27.58 14.8 11.42 3.38 11.4244 2.2984 21.106 23.672 18.193 17.191 13.889 12.631 12.846 12.34 1 13.79 8 16.98 6 18.23 4 22.77 8 21.11 5 24.02 13.8 11.42 2.38 -10.8 11.42 -22.22 25.2 11.42 13.78 189.888 4 493.728 4 5.6644 11.543 397.96 139.178 6.1 11.42 -5.32 22.2 11.42 10.78 116.208 4 28.3024 4.17 78.8 9.2 11.42 -2.22 -3.9 11.42 -15.32 234.702 4 4.9284 1.7094 183.38
54

07 Oct 07-Dec 07 TOTAL 36.52 46.65 27.7 11.42 16.28 265.038 4 1709.68 2 872.35 58 201.87
INTERPRETATION From the tables, SBI Magnum Equity Fund (Growth) Earned an average return of 11.42% as against the market return of 9.84%. The beta value indicates that 1% increase in market portfolio returns results in 0.8454% increase in the fund returns and 1% decrease in the market portfolio results in 0.8454% decrease in the fund. The high standard deviation (Risk) of 12.4669% indicates the high volatility of the fund returns. The positive alpha value (Jenson ratio) indicates the superior performance of the fund in comparison to the market.
55

The high variability ratio (Sharpe ratio) indicates that the investors can earn superior returns by taking greater risk than the market. The reward to variability ratio (Treynor ratio) is higher than the benchmark which indicates its superior performance. It can be concluded that the SBI Magnum Equity Fund (Growth) has performed over its benchmark. Chart showing the scheme and market returns of SBI Magnum Equity Fund
56
ABN Amro Equity Fund (Growth) Objective of the fund To generate long-term capital growth from a diversified and actively managed portfolio of equity related securities. Table showing the scheme return
Date Openi ng NAV Closi ng NAV Quaterly returns (RA ) Mean (RA* ) (RARA* ) (RA-RA* )2 (RA-RA* ) (RMRM* ) Jan 05-Mar 05 Apr 05June 05 Jul 05- Sept 05 Oct 05-Dec 05 Jan 06-Mar 06 Apr 06June 06 Jul 06- Sept 20.44 23.72 16 11.07 4.93 24.58 20.3 -17.4 11.07 -28.47 810.540 9 24.3049 23.91 509.89 19.74 23.74 20.3 11.07 9.23 85.1929 93.22 17.93 19.73 10 11.07 -1.07 14.1 17.73 25.7 11.07 14.63 214.036 9 1.1449 0.8388 106.94 13.54 13.97 3.2 11.07 -7.87 61.9369 6.05 12.93 13.21 2.2 11.07 -8.87 78.6769 106.17
57

06 Oct 06-Dec 06 Jan 07-Mar 07 Apr 07June 07 Jul 07- Sept 07 Oct 07-Dec 07 TOTAL 35.84 44.9 25.28 11.07 14.21 201.924 1 2156.27 8 1361.9 8 176.08 30.97 35.37 14.2 11.07 3.13 24.07 30.77 27.7 11.07 16.63 27.52 25.18 -8.5 11.07 -19.57 382.984 9 276.556 9 9.7969 20.15 52.69 263.99 23.82 27.19 14.1 11.07 3.03 9.1809 2.06
INTERPRETATION From the table ABN Amro Equity Fund-Growth Earned an average return of 11.07% as against the market return of 9.84%.
58

The beta value indicates that 1% increase in market portfolio returns in 1.3199% increase
in the fund returns and 1% decrease in the market portfolio results in 1.3199% decrease in the fund. The high standard deviation (Risk) of 14.0107% indicates the high volatility of the fund returns. The positive alpha value (Jenson ratio) indicates the superior performance of the fund in comparison to the market. The high variability ratio (Sharpe ratio) indicates that the investors can earn superior returns by taking greater risk than the market. The reward to variability ratio (Treynor ratio) higher than the benchmark which indicates its superior performance. It can be concluded that the ABN Amro Equity Fund-(Growth) has performed over its benchmark. Chart showing the scheme and market returns of ABN Amro Equity Fund-Growth
59
HSBC Equity Fund (Growth) Objective of the fund

60

HSBC Equity Fund aims to generate long term capital growth from an actively managed portfolio of equity and equity related securities. It seeks to predominantly invest in large and midsized companies with little bit of exposure to smaller companies, which ensures that the portfolio is spread across a variety of stocks and sectors so that risk is minimized. Table showing the scheme return
Date Openi ng NAV Jan 05-Mar 05 Apr 05June 05 Jul 05- Sept 05 Oct 05-Dec 05 Jan 06-Mar 06 Apr 06June 06 Jul 06- Sept 06 Oct 06-Dec 06 Jan 07-Mar 07 Apr 07June 07 Jul 07- Sept 07 Oct 07-Dec 07 37.439 36.991 37.216 47.857 52.393 62.297 55.006 62.663 73.024 64.958 76.994 89.453 Closi ng NAV 36.18 3 36.69 8 47.16 1 52.48 8 60.22 1 54.69 4 63.01 4 72.04 67.85 9 76.60 8 88.95 4 113.3 7 Quaterly returns (RA ) -3.4 -0.8 26.7 9.7 14.9 -12.2 14.6 15 -7.1 17.9 15.5 26.7 9.79 9.79 9.79 9.79 9.79 9.79 9.79 9.79 9.79 9.79 9.79 9.79 -13.19 -10.59 16.91 -0.09 5.11 -21.99 4.81 5.21 -16.89 8.11 5.71 16.91 173.976 1 112.148 1 285.948 1 0.0081 26.1121 483.560 1 23.1361 27.1441 285.272 1 65.7721 32.6041 285.948 1 Mean (RA* ) (RARA* ) (RA-RA* )2 (RA-RA* ) (RMRM* ) 157.88 8.15 123.61 0.071 51.6 393.84 23.32 3.45 -227.85 25.55 36.77 209.68
61

TOTAL
117.5
1801.62 92
806.07 1
INTERPRETATION From the table HSBC Equity Fund (Growth) Earned an average return of 9.79% as against the market return of 9.84%. The beta value indicates that 1% increase in market portfolio returns in 0.7818% increase in the fund returns and 1% decrease in the market portfolio results in0.7818% decrease in the fund. The high standard deviation (Risk) of12.7978% indicates the high volatility of the fund returns. The positive alpha value (Jenson ratio) indicates the superior performance of the fund in comparison to the market.
62

The high variability ratio (Sharpe ratio) indicates that the investors can earn superior returns by taking greater risk than the market. The reward to variability ratio (Treynor ratio) higher than the benchmark which indicates its superior performance.
It can be concluded that the HSBC Equity Fund (Growth) has performed over its
benchmark. Chart showing the scheme and market returns of HSBC Equity Fund (Growth)
63
HDFC Equity Fund (Growth) Objective of the fund Birla infrastructure Fund seeks to provide medium to long term capital appreciation, by investing predominantly in a diversified of equity related securities of companies that are participating in the growth and development of infrastructure in India. Table showing the return
Date Openi ng NAV Closi ng NAV Quaterly returns (RA ) Mean (RA* ) (RARA* ) (RA-RA* )2 (RA-RA* ) (RMRM* ) Jan 05-Mar 05 Apr 05June 05 Jul 05- Sept 05 Oct 05-Dec 05 Jan 06-Mar 06 Apr 0642.329 36.03 -14.9 10.61 -25.51 33.589 31.592 25.694 24.491 25.49 9 31.38 2 33.58 9 41.02 21.4 10.61 10.79 116.424 1 650.760 456.88 108.97 6.3 10.61 -4.31 22.1 10.61 11.49 132.020 1 18.5761 3.339 83.99 4.1 10.61 -6.51 24.319 24.17 -0.6 10.61 -11.21 125.664 1 42.3801 5.0127 134.18
64

June 06 Jul 06- Sept 06 Oct 06-Dec 06 Jan 07-Mar 07 Apr 07June 07 Jul 07- Sept 07 Oct 07-Dec 07 TOTAL 64.356 55.289 43.815 48.828 43.16 36.316 4 43.44 6 48.41 4 45.46 1 54.69 5 63.81 8 79.35 6 23.8 10.61 13.19 173.976 1 163.55 15.4 10.61 4.79 24.8 10.61 14.19 -6.9 10.61 -17.51 306.600 1 201.356 1 22.9441 30.8476 44.69 -236.21 12.2 10.61 1.59 2.5281 1.0812 19.6 10.61 8.99 1 80.8201 43.6
127.3
1874.04 92
839.93 05
INTERPRETATION
65

From the table HDFC Equity Fund-Growth
Earned an average return of 10.61% as against the market return of 9.84%. The beta value indicates that 1% increase in market portfolio returns in 0.8043% increase
in the fund returns and 1% decrease in the market portfolio results in0.8043% decrease in the fund.
The high standard deviation (Risk) of 13.0524% indicates the high volatility of the fund
returns. The positive alpha value (Jenson ratio) indicates the superior performance of the fund in comparison to the market. The high variability ratio (Sharpe ratio) indicates that the investors can earn superior returns by taking greater risk than the market. The reward to variability ratio (Treynor ratio) higher than the benchmark which indicates its superior performance.
It can be concluded that the HDFC Equity Fund (Growth) has performed over its
benchmark according to Treynor and Jenson. Chart showing the scheme and market returns of HDFC Equity Fund (Growth)
66
JM Basic Fund (Growth) Objective of the fund

67

The scheme aims to provide long term capital appreciation by investing in equity and equity related securities. Table showing the schemes return
Date Openi ng NAV Closi ng NAV Quaterly returns (RA ) Mean (RA* ) (RARA* ) (RA-RA* )2 (RA-RA* ) (RMRM* ) Jan 05-Mar 05 Apr 05June 05 Jul 05- Sept 05 Oct 05-Dec 05 Jan 06-Mar 06 Apr 06June 06 Jul 06- Sept 06 Oct 06-Dec 06 Jan 07-Mar 07 Apr 07June 07 Jul 07- Sept 07 24.683 17.93 24.39 6 29.92 5 21.1 11.44 9.66 36.1 11.44 24.66 18.91 18.74 -0.9 11.44 -12.34 152.275 6 608.115 6 93.3156 62.85 77.67 -166.46 16.61 18.83 13.4 11.44 1.96 3.8416 1.33 14.11 16.67 18.1 11.44 6.66 17.54 14.09 -19.7 11.44 -31.14 13.26 17.26 30.2 11.44 18.76 351.937 6 969.699 6 44.3556 32.3 557.7 189.47 12.23 13.16 7.6 11.44 -3.84 14.7456 3.01 10.59 12.51 14.7 11.44 3.26 10.58 10.61 0.3 11.44 -11.14 11.6 10.3 -11.2 11.44 -22.64 512.569 6 124.099 6 10.6276 23.44 8.57 271
68

Oct 07-Dec 07 TOTAL 30.467 38.83 8 27.5 11.44 16.06 257.923 6 3143.50 72 1575.8 9 199.14
INTERPRETATION From the table JM Basic Fund (Growth)

returns. The positive alpha value (Jenson ratio) indicates the superior performance of the fund in comparison to the market.
69

The high variability ratio (Sharpe ratio) indicates that the investors can earn superior returns by taking greater risk than the market. The reward to variability ratio (Treynor ratio) higher than the benchmark which indicates its superior performance.
It can be concluded that the JM Basic Fund (Growth) has performed over its benchmark
according to Treynor and Jenson. Chart showing the scheme and market returns of JM Basic Fund (Growth)
70
TATA Infrastructure Fund (Growth) Objective of the fund To provide income and/or medium to long term capital gains by investing predominantly in equity and equity related instruments of companies in infrastructure sector. Table showing the scheme return
Date Openi ng NAV Closi ng NAV Quaterly returns (RA ) Mean (RA* ) (RARA* ) (RA-RA* )2 (RA-RA* ) (RMRM* ) Jan 05-Mar 05 Apr 05June 05 Jul 05- Sept 05 Oct 05-Dec 05 Jan 06-Mar 06 Apr 06June 06 20.561 15.05 14.121 11.294 10.754 9.854 10.59 4 11.19 4 14.02 2 14.97 3 19.91 3 17.68 4 -14 13.56 -27.56 32.3 13.56 18.74 351.187 6 759.553 6 493.59 189.27 6 13.56 -7.56 24.2 13.56 10.64 113.209 6 57.1536 5.927 77.77 4.1 13.56 -9.46 89.4916 7.28 7.5 13.56 -6.06 36.7236 72.5382
71

Jul 06- Sept 06 Oct 06-Dec 06 Jan 07-Mar 07 Apr 07June 07 Jul 07- Sept 07 Oct 07-Dec 07 TOTAL 33.389 27.48 21.124 24.273 20.842 17.717 20.73 9 24.00 5 22.02 1 27.15 1 32.92 7 43.83 31.3 13.56 17.74 314.707 6 219.97 19.8 13.56 6.24 28.5 13.56 14.94 -9.3 13.56 -22.86 522.579 6 223.203 6 38.9376 40.1856 47.061 -308.38 15.2 13.56 1.64 2.6896 1.1152 17.1 13.56 3.54 12.5316 17.169
162.7
2521.96 92
848.94
INTERPRETATION From the table TATA Infrastructure Fund (Growth)

72

returns. The positive alpha value (Jenson ratio) indicates the superior performance of the fund in comparison to the market. The high variability ratio (Sharpe ratio) indicates that the investors can earn superior returns by taking greater risk than the market. The reward to variability ratio (Treynor ratio) higher than the benchmark which indicates its superior performance.
It can be concluded that the TATA Infrastructure Fund (Growth) has performed over its
benchmark according to Treynor and Jenson. Chart showing the scheme and market returns of TATA Infrastructure Fund (Growth)
73
Summary of Findings
74

Table showing the performance of the mutual fund schemes using the Treynors ratio.
SI.N O
Fund Name
Treynor's Ratio
Ran k
1 Kotak opportunities Fund (Growth) 2 Tata Infrastructure Fund (Growth) 3 DSP-ML India T I G E R Fund (Growth) 4 HDFC Equity Fund (Growth) 5 JM Basic Fund (Growth) 6 SBI Magnum Equity Fund (Growth) 7 ICICI Pru Growth (Growth) 8 ABN Amro Equity Fund (Growth) 9 Sundaram BNP Paribas Growth (Growth) 10 HSBC Equity Fund (Growth)
5.1868 7.5483 5.6538 4.0532 2.9575 4.8143 3.7878 2.8184 3.708
3 1 2 5 9 4 6 10 7
3.121
Table showing the performance of the mutual fund schemes using the Sharpes ratio.
SI.N O
Fund Name
Sharpe's Ratio
Ran k 3
1 Kotak opportunities Fund (Growth) 75
0.3578

2 Tata Infrastructure Fund (Growth) 3 DSP-ML India T I G E R Fund (Growth) 4 HDFC Equity Fund (Growth) 5 JM Basic Fund (Growth) 6 SBI Magnum Equity Fund (Growth) 7 ICICI Pru Growth (Growth) 8 ABN Amro Equity Fund (Growth) 9 Sundaram BNP Paribas Growth (Growth) 10 HSBC Equity Fund (Growth) 0.1906 10 0.4101 0.3756 0.2498 0.2418 0.3265 0.2271 0.2655 0.2876 1 2 7 8 4 9 6 5
Table showing the performance of the mutual fund schemes using the Jensons ratio.
SI.N O
Fund Name
Jenson's Ratio
Ran k 3 1 2 5
1 Kotak opportunities Fund (Growth) 2 Tata Infrastructure Fund (Growth) 3 DSP-ML India T I G E R Fund (Growth) 4 HDFC Equity Fund (Growth) 76
2.6413 4.1614 3.1064 1.2573

5 JM Basic Fund (Growth) 6 SBI Magnum Equity Fund (Growth) 7 ICICI Pru Growth (Growth) 8 ABN Amro Equity Fund (Growth) 9 Sundaram BNP Paribas Growth (Growth) 10 HSBC Equity Fund (Growth) 0.4933 9 0.6466 1.9649 0.8462 0.4343 1.1496 8 4 7 10 6
Table showing the performance of the mutual fund schemes using the average of all three ratios.
SI.N O
Fund Name
Treynor' s Ratio
Sharpe 's Ratio 0.3578
Jenson' s Ratio 2.6413
Avera ge
Ra nk
Kotak opportunities Fund (Growth)
5.1868
2.7286
Tata Infrastructure Fund (Growth)
7.5483
0.4101
4.1614
4.0399
3 77
DSP-ML India T I G E R Fund
5.6538
0.3756
3.1064
3.0453

(Growth) 4 5 6 HDFC Equity Fund (Growth) JM Basic Fund (Growth) SBI Magnum Equity Fund (Growth) 7 8 ICICI Pru Growth (Growth) ABN Amro Equity Fund (Growth) 9 Sundaram BNP Paribas Growth (Growth) 10 HSBC Equity Fund (Growth) 3.121 0.1906 0.4933 1.2683 9 3.708 0.2876 1.1496 1.7151 6 3.7878 2.8184 0.2271 0.2655 0.8462 0.4343 1.6204 1.1724 7 10 4.0532 2.9575 4.8143 0.2498 0.2418 0.3265 1.2573 0.6466 1.9649 1.8534 1.2819 2.3685 5 8 4
The findings of the analysis are as follows:

The benchmarking was done to compare the scheme return with a benchmark and to judge whether the scheme is performing above the benchmark or below the benchmark set. The benchmarking was done with the S & P CNX NIFTY. It is found that all the mutual fund schemes selected for the study have performed above the benchmark except for one scheme which is Kotak Opportunities Fund. The risk free rate is the 91 days treasury bills with 7.35%. According to the Treynors ratio, the best performance mutual fund scheme is the Tata Infrastructure Fund (Growth). The top five performing mutual fund schemes are:
78
Tata Infrastructure Fund (Growth) DSP-ml India T.I.G.E.R. Fund (Growth) SBI Magnum Equity Fund (Growth)

According to the Sharpes ratio, the best performing mutual fund scheme is the Tata Infrastructure Fund (Growth). The top five performing mutual fund schemes are: Tata Infrastructure Fund (Growth) DSP-ml India T.I.G.E.R. Fund (Growth) SBI Magnum Equity Fund (Growth)
According to the Jensons ratio, the best performing mutual fund scheme is the Tata Infrastructure Fund (Growth). The top five performing mutual fund schemes are: Tata Infrastructure Fund (Growth) DSP-ml India T.I.G.E.R. Fund (Growth) SBI Magnum Equity Fund (Growth)
On the basis of an average ranking the top five performing mutual fund schemes are: Tata Infrastructure Fund (Growth) DSP-ml India T.I.G.E.R. Fund (Growth) Kotak Opportunities Fund (Growth)
All the mutual fund schemes have higher rate of return than the market return (Nifty), i.e.
all the schemes have performed above the benchmark.
SUGGESTION
A good investment is one which helps an investor to earn rate of return with the same risk or a same rate of return at a lower risk. Most of the schemes selected in the sample have performed better than their benchmark. There are schemes with high risk and high return like Tata infrastructure Fund with an average return of 13.56% and risk is 15.1415%. so an investor must make his investments based on not only the returns but also his risk taking ability.
79

A passive investor can choose ICICI Pru Growth scheme as the risk is low and the returns are slightly higher than the market returns. An aggressive investor can choose Tata infrastructure Fund growth scheme because it gives high returns and involves high risk. Investors are advised to invest in mutual funds as compared to individual stocks because they minimized risk. The risk is reduced due to diversification. However the funds performance also depends upon the stocks selected by the fund manager. The unsystematic risk can be reduced to the minimum by proper diversification.
CONCLUSION
The study has shown the performance of the mutual schemes selected in the sample by using different performance measures. From the above analysis, it can be concluded that most of the equity diversified mutual fund growth oriented schemes have performed better in comparison with the market. But return alone should not be considered as the basis of measurement of the
80

performance of a mutual fund scheme, it should also included risk attached to them. Risk associated with a fund, in general, can be defined as variability or fluctuation in the returns generated by it. The higher the fluctuation in the returns, higher will be the risk associated with it. Investments in mutual fund enable the investors to reap the benefits of diversification, specialized service, low cost etc. by investing in mutual funds an investor can optimized his risk and return. An investor is advised to keep revising his portfolio. Some funds give a very high rate of returns and at the same time they involve high risk. So an investor must evaluate both, risk and returns associated with the fund. An investor can switch from a none or a bad performing scheme to a better performing scheme to increase his returns. Sometimes the low returns may be due to wrong choice of the stocks in the portfolio. Thus an investor needs to make an analysis of both risk and return before investing to maximize his earnings.
BIBILOGRAPHY
Text Books
81
Prasanna Chandra, investment analysis and portfolio management, TMH Publications, Second edition.

Punithavathy pandian, Security Analysis and portfolio Management, Vikas publishing House Pvt Ltd. Websites
www.idfc.india.com
www.mutualfundsindia.com www.nseindia.com www.bseindia.com www.moneycontrol.com www.yahoofinance.com
Newspapers TV channels NDTV Profit CNBC 18 Business line Times of india Financial express
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Performance Evaluation of Mutual Funds 2010

MS RAMMAIAH INSTITUTE OF MANAGEMENT - Bangalore

Performance Evaluation of Mutual Funds 2010

MS RAMMAIAH INSTITUTE OF MANAGEMENT - Bangalore

Performance Evaluation of Mutual Funds 2010

Meaning of Mutual Fund

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Performance Evaluation of Mutual Funds 2010

Characteristics of a Mutual Fund

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Performance Evaluation of Mutual Funds 2010

MS RAMMAIAH INSTITUTE OF MANAGEMENT - Bangalore

Performance Evaluation of Mutual Funds 2010

The sponsor is the promoter of the mutual fund. The sponsor

MS RAMMAIAH INSTITUTE OF MANAGEMENT - Bangalore

Performance Evaluation of Mutual Funds 2010

MS RAMMAIAH INSTITUTE OF MANAGEMENT - Bangalore

Performance Evaluation of Mutual Funds 2010

MS RAMMAIAH INSTITUTE OF MANAGEMENT - Bangalore

Performance Evaluation of Mutual Funds 2010

MS RAMMAIAH INSTITUTE OF MANAGEMENT - Bangalore

Performance Evaluation of Mutual Funds 2010

MS RAMMAIAH INSTITUTE OF MANAGEMENT - Bangalore

Performance Evaluation of Mutual Funds 2010

MS RAMMAIAH INSTITUTE OF MANAGEMENT - Bangalore

Performance Evaluation of Mutual Funds 2010

MS RAMMAIAH INSTITUTE OF MANAGEMENT - Bangalore

Performance Evaluation of Mutual Funds 2010

MS RAMMAIAH INSTITUTE OF MANAGEMENT - Bangalore

Performance Evaluation of Mutual Funds 2010

MS RAMMAIAH INSTITUTE OF MANAGEMENT - Bangalore

Performance Evaluation of Mutual Funds 2010

MS RAMMAIAH INSTITUTE OF MANAGEMENT - Bangalore

Performance Evaluation of Mutual Funds 2010

MS RAMMAIAH INSTITUTE OF MANAGEMENT - Bangalore

Performance Evaluation of Mutual Funds 2010

MS RAMMAIAH INSTITUTE OF MANAGEMENT - Bangalore

Performance Evaluation of Mutual Funds 2010

MS RAMMAIAH INSTITUTE OF MANAGEMENT - Bangalore

Performance Evaluation of Mutual Funds 2010

Disadvantages of Mutual Funds:

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Performance Evaluation of Mutual Funds 2010

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Performance Evaluation of Mutual Funds 2010

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Performance Evaluation of Mutual Funds 2010

Schemes offered by IDFC.

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Performance Evaluation of Mutual Funds 2010

(Rs in crores) (Rs in crores) (Rs in crores)

5454.38 2532.42 669.17 2545

2882.03 1505.74 462.87 2671

2544.19 1002.36 375.64 2551

MS RAMMAIAH INSTITUTE OF MANAGEMENT - Bangalore

Performance Evaluation of Mutual Funds 2010

IDFC PRODUCT RANGE

\IDFC PRODUCT RANGE IDFC PRODUCT RANGE

Debt Funds Balanced

RAMMAIAH INSTITUTE OF MANAGEMENT fund - Bangalore

Performance Evaluation of Mutual Funds 2010

IDEAL INVESTMENT HORIZON

Classic Equity Fund

(RA RA) (RM RM) (RM RM*) 2