CONTENTS

S.No Topic Name

1. List Of Figures 2. List Of Tables

Page No

I. Introduction II. Company Profile III. Literature Review IV. Data Analysis & Interpretation V. Finding & Suggestions VI. Bibliography

1 - 16 17 - 21 22 - 33 34 - 52 53 - 54 55

LIST OF FIGURES

S.No 1 2 3 4 5 6 7 8 9 10 11 12

Figure Name Working Of Mutual Fund Structure Of a Mutual Fund Types Of Mutual Fund Mutual Funds Cycle Constituents of Mutual Fund Offerings ICICI Prudential Capitalization ICICI Portfolio Reliance Capitalization Reliance Portfolio ICICI Prudential Mutual Fund Fund Performance Ranking

Page Nos 3 4 5 34 31 38 40 41 43 48 59 52

LIST OF TABLES
S.No 1 2 Table Name Net Asset Value ICICI Prudential Table Page Nos 35 39

3 4 5 6 7 8 9 10 11

Reliance portfolio Table Reliance Growth Fund Performance Table ICICI Growth Fund Performance Table Observations Reliance Mutual Fund ICICI Mutual Fund Performance Evaluation Of Reliance Mutual Fund Performance Evaluation Of ICICI Mutual Fund Fund Performance Ranking

42 44 45 47 48 49 51 51 52

I. INTRODUCTION

INTRODUCTION TO MUTUAL FUNDS

Mutual funds are trusts, which accepts savings form investors and invest the same in diversified financial instruments in terms of objectives set out in the trust deed with the view to reduce the risk and maximize the income and capital appreciation for distribution for the members.

The objective sought to be achieved by mutual funds is to provide an opportunity for lower income groups to acquire fixed assets without much difficulty. According to SEBI - Mutual Fund is defined as - A fund established in the form of a trust to raise moneys through the sale of units to the public or a section of the public under one or more schemes for investing in securities, including money market instruments. Mutual Funds are professionally managed pool of money from a group of investors. A Mutual fund manager invests your funds in securities including stocks and bonds, Money Market instruments or some combination and decides the best time to buy and sell. By pooling your resources with other investors in Mutual Funds, you can diversify even a small investment over a wide spectrum. With the emergence of the capital market at the center stage of the Indian financial system from its marginal role a decade earlier, the Indian capital market also witnessed during the same period a significant institutional development in the form of diversified structure of Mutual Funds. A Mutual fund is a special type of investment institution which acts as an investment conduit. 1

It pools the savings, particularly of the relatively small investors, and invests them in a well-diversified portfolio of sound investment. As an investment intermediary, it offers a variety of services/advantages to the relatively small investors who on their own cannot successfully construct and manage investment portfolio mainly due to the small size of their funds, lack of expertise and experience, and so on. These services include the

diversification of portfolio, expertise of the professional management, liquidity of investment, tax shelter, reduced risk and reduced cost. Mutual fund is the most suitable investment mode for the common man as it offers an opportunity to invest in a diversified, professionally managed portfolio at a relatively low cost. Any body with an investible surplus of as little as a few thousand rupees can invest in mutual funds. Each Mutual fund scheme has a defined investment objective and strategy. The most important trend in the Mutual Fund industry is the aggressive expansion of the foreign owned Mutual Fund companies and the decline of the companies floated by nationalized banks and smaller private sector players.

Funds issue and redeem shares on demand at the fund's net asset value (NAV). Mutual fund management fees typically range between 0.5% and 2% of assets per year, exchange fees and other administrative charges also apply.

WORKING OF MUTUAL FUNDS:

Figure 1

The mutual fund collects money directly or through brokers

from investors. The money is invested in various instruments depending on the objective of the scheme. The income generated by selling securities or capital appreciation of these securities is passed on to the investors in proportion to their investment in the scheme. The investments are divided into units and the value of the units will be reflected in Net Asset Value or NAV of the unit. NAV is the market value of the assets of the scheme minus its liabilities. The per unit NAV is the net asset value of the scheme divided by the number of units outstanding on the valuation date. Mutual fund companies provide daily net asset value of their schemes to their investors. NAV is important, as it will determine the price at which you buy or redeem the units of a scheme. Depending on the load structure of the scheme, you have to pay entry or exit load. 3 NAV = Market value of the funds investments + Receivables + Accrued Income Liabilities Accrued Expenses Number of Outstanding units

STRUCTURE OF A MUTUAL FUND:

India has a legal framework within which Mutual Fund have to be constituted. In India open and close-end funds operate under the same regulatory structure i.e. as unit Trusts. A Mutual Fund in India is allowed to issue open-end and close-end schemes under a common legal structure. The structure that is required to be followed by any Mutual Fund in India is laid down under SEBI (Mutual Fund) Regulations, 1996.

Figure 2

Mutual Funds diversify their risk by holding a portfolio of instead of only one asset. This is because by holding all your money in just one asset, the entire fortunes of your portfolio depend on this one asset. By creating a portfolio of a variety of assets, this risk is substantially reduced. 4 Mutual Fund investments are not totally risk free. In fact, investing in Mutual Funds contains the same risk as investing in the markets, the only difference being that due to professional management of funds the controllable risks are substantially reduced. A very important risk involved in Mutual Fund investments is the market risk. When the market is in doldrums, most of the equity funds will also experience a downturn.

TYPES OF MUTUAL FUNDS SCHEMES IN INDIA

Wide variety of Mutual Fund Schemes exists to cater to the needs such as financial position, risk tolerance and return expectations etc. thus mutual funds has Variety of

flavors, Being a collection of many stocks, an investors can go for picking a mutual fund might be easy. There are over hundreds of mutual funds scheme to choose from. It is easier to think of mutual funds in categories, mentioned below.

Figure 3

A).

BY STRUCTURE

1. Open - Ended Schemes:

An open-end fund is one that is available for subscription all through the year. These do not have a fixed maturity. Investors can conveniently buy and sell units at Net Asset Value ("NAV") related prices. The key feature of open-end schemes is liquidity.

2. Close - Ended Schemes:

A closed-end fund has a stipulated maturity period which generally ranging from 3 to 15 years. The fund is open for subscription only during a specified period. Investors can invest in the scheme at the time of the initial public issue and thereafter they can buy or sell the units of the scheme on the stock exchanges where they are listed. In order to provide an exit route to the investors, some close-ended funds give an option of selling back the units to the Mutual Fund through periodic repurchase at NAV related prices. SEBI Regulations stipulate that at least one of the two exit routes is provided to the investor.

3. Interval Schemes:
Interval Schemes are that scheme, which combines the features of open-ended and close-ended schemes. The units may be traded on the stock exchange or may be open for sale or redemption during pre-determined intervals at NAV related prices.

6 B). BY NATURE 1. Equity Fund:

These funds invest a maximum part of their corpus into equities holdings. The structure of the fund may vary different for different schemes and the fund managers outlook on different stocks. The Equity Funds are sub-classified depending upon their investment objective, as follows:

Diversified Equity Funds Mid-Cap Funds Sector Specific Funds Tax Savings Funds (ELSS)

Equity investments are meant for a longer time horizon, thus Equity funds rank high on the risk-return matrix.

2. Debt Funds:
The objective of these Funds is to invest in debt papers. Government authorities, private companies, banks and financial institutions are some of the major issuers of debt papers. By investing in debt instruments, these funds ensure low risk and provide stable income to the investors. Debt funds are further classified as:

Gilt Funds: Invest their corpus in securities issued by Government, popularly known as Government of India debt papers. These Funds carry zero Default risk but are associated with Interest Rate risk. These schemes are safer as they invest in papers backed by Government.

Income Funds: Invest a major portion into various debt instruments such as bonds, corporate debentures and Government securities.

MIPs: Invests maximum of their total corpus in debt instruments while they take minimum exposure in equities. It gets benefit of both equity and debt market. These scheme ranks slightly high on the risk-return matrix when compared with other debt schemes. 7

Short Term Plans (STPs): Meant for investment horizon for three to six months. These funds primarily invest in short term papers like Certificate of Deposits (CDs) and Commercial Papers (CPs). Some portion of the corpus is also invested in corporate debentures.

Liquid Funds: Also known as Money Market Schemes, These funds provides easy liquidity and preservation of capital. These schemes invest in short-term instruments like Treasury Bills, inter-bank call money market, CPs and CDs. These funds are meant for short-term cash management of corporate houses and are meant for an investment horizon of 1day to 3 months. These schemes rank low on riskreturn matrix and are considered to be the safest amongst all categories of mutual funds.

3. Balanced Funds:
As the name suggest they, are a mix of both equity and debt funds. They invest in both equities and fixed income securities, which are in line with pre-defined investment objective of the scheme. These schemes aim to provide investors with the best of both the worlds. Equity part provides growth and the debt part provides stability in returns. Further the mutual funds can be broadly classified on the basis of investment parameter viz, Each category of funds is backed by an investment philosophy, which is pre-defined in the objectives of the fund. The investor can align his own investment needs with the funds objective and invest accordingly.

BY INVESTMENT OBJECTIVE: Growth Schemes:

Growth Schemes are also known as equity schemes. The aim of these schemes is to provide capital appreciation over medium to long term. These schemes normally invest a major part of their fund in equities and are willing to bear short-term decline in value for possible future appreciation.

8 Income Schemes:
Income Schemes are also known as debt schemes. The aim of these schemes is to provide regular and steady income to investors. These schemes generally invest in fixed income securities such as bonds and corporate debentures. Capital appreciation in such schemes may be limited.

Balanced Schemes:
Balanced Schemes aim to provide both growth and income by periodically distributing a part of the income and capital gains they earn. These schemes invest in both shares and fixed income securities, in the proportion indicated in their offer documents (normally 50:50).

Money Market Schemes:

Money Market Schemes aim to provide easy liquidity, preservation of capital and moderate income. These schemes generally invest in safer, short-term instruments, such as treasury bills, certificates of deposit, commercial paper and inter-bank call money. Load Funds: A Load Fund is one that charges a commission for entry or exit. That is, each time you buy or sell units in the fund, a commission will be payable. Typically entry and exit loads range from 1% to 2%. It could be worth paying the load, if the fund has a good performance history. No-Load Funds: A No-Load Fund is one that does not charge a commission for entry or exit. That is, no commission is payable on purchase or sale of units in the fund. The advantage of a no load fund is that the entire corpus is put to work.

9 B). BY NATURE
These funds invest a maximum part of their corpus into equities holdings. The structure of the fund may vary different for different schemes and the fund managers outlook on different stocks. The Equity Funds are sub-classified depending upon their investment objective, as follows:

1. Equity Fund:

Diversified Equity Funds Mid-Cap Funds Sector Specific Funds Tax Savings Funds (ELSS)

Equity investments are meant for a longer time horizon, thus Equity funds rank high on the risk-return matrix.

2. Debt Funds:
The objective of these Funds is to invest in debt papers. Government authorities, private companies, banks and financial institutions are some of the major issuers of debt papers. By investing in debt instruments, these funds ensure low risk and provide stable income to the investors. Debt funds are further classified as:

Gilt Funds: Invest their corpus in securities issued by Government, popularly known as Government of India debt papers. These Funds carry zero Default risk but are associated with Interest Rate risk. These schemes are safer as they invest in papers backed by Government.

Income Funds: Invest a major portion into various debt instruments such as bonds, corporate debentures and Government securities.

MIPs: Invests maximum of their total corpus in debt instruments while they take minimum exposure in equities. It gets benefit of both equity and debt market. These scheme ranks slightly high on the risk-return matrix when compared with other debt schemes.

10

Short Term Plans (STPs): Meant for investment horizon for three to six months. These funds primarily invest in short term papers like Certificate of Deposits (CDs) and Commercial Papers (CPs). Some portion of the corpus is also invested in corporate debentures.

Liquid Funds: Also known as Money Market Schemes, These funds provides easy liquidity and preservation of capital. These schemes invest in short-term instruments like Treasury Bills, inter-bank call money market, CPs and CDs. These funds are meant for short-term cash management of corporate houses and are meant for an investment horizon of 1day to 3 months. These schemes rank low on riskreturn matrix and are considered to be the safest amongst all categories of mutual funds.

3. Balanced Funds:
As the name suggest they, are a mix of both equity and debt funds. They invest in both equities and fixed income securities, which are in line with pre-defined investment objective of the scheme. These schemes aim to provide investors with the best of both the worlds. Equity part provides growth and the debt part provides stability in returns. Further the mutual funds can be broadly classified on the basis of investment parameter viz, Each category of funds is backed by an investment philosophy, which is pre-defined in the objectives of the fund. The investor can align his own investment needs with the funds objective and invest accordingly.

11

E). BY INVESTMENT OBJECTIVE: Growth Schemes:

Growth Schemes are also known as equity schemes. The aim of these schemes is to provide capital appreciation over medium to long term. These schemes normally invest a major part of their fund in equities and are willing to bear short-term decline in value for possible future appreciation.

Income Schemes:
Income Schemes are also known as debt schemes. The aim of these schemes is to provide regular and steady income to investors. These schemes generally invest in fixed

income securities such as bonds and corporate debentures. Capital appreciation in such schemes may be limited.

Balanced Schemes:
Balanced Schemes aim to provide both growth and income by periodically distributing a part of the income and capital gains they earn. These schemes invest in both shares and fixed income securities, in the proportion indicated in their offer documents (normally 50:50).

Money Market Schemes:

Money Market Schemes aim to provide easy liquidity, preservation of capital and moderate income. These schemes generally invest in safer, short-term instruments, such as treasury bills, certificates of deposit, commercial paper and inter-bank call money. Load Funds: A Load Fund is one that charges a commission for entry or exit. That is, each time you buy or sell units in the fund, a commission will be payable. Typically entry and exit loads range from 1% to 2%. It could be worth paying the load, if the fund has a good performance history.

12 Non-Load Funds: A No-Load Fund is one that does not charge a commission for entry or exit. That is, no commission is payable on purchase or sale of units in the fund. The advantage of a no load fund is that the entire corpus is put to work.

OTHER SCHEMES Tax Saving Schemes:

Tax-saving schemes offer tax rebates to the investors under tax laws prescribed from time to time. Under Sec.88 of the Income Tax Act, contributions made to any Equity Linked Savings Scheme (ELSS) are eligible for rebate.

Index Schemes:
Index schemes attempt to replicate the performance of a particular index such as the BSE Sensex or the NSE 50. The portfolio of these schemes will consist of only those stocks that constitute the index. The percentage of each stock to the total holding will be identical to the stocks index weightage. And hence, the returns from such schemes would be more or less equivalent to those of the Index.

Sector Specific Schemes:

These are the funds/schemes which invest in the securities of only those sectors or industries as specified in the offer documents. e.g. Pharmaceuticals, Software, Fast Moving Consumer Goods (FMCG), Petroleum stocks, etc. The returns in these funds are dependent on the performance of the respective sectors/industries. While these funds may give higher returns, they are more risky compared to diversified funds. Investors need to keep a watch on the performance of those sectors/industries and must exit at an appropriate time.

13

NEED FOR THE STUDY :

The projects idea is to project Mutual Fund as a better avenue for investment on a longterm or short-term basis. Mutual Fund is a productive package for a lay-investor with limited finances, this project creates an awareness that the Mutual Fund is a worthy investment practice. Mutual Fund is a globally proven instrument. Mutual Funds are Unit

Trust as it is called in some parts of the world has a long and successful history, of late Mutual Funds have become a hot favorite of millions of people all over the world. The driving force of Mutual Funds is the safety of the principal guaranteed, plus the added advantage of capital appreciation together with the income earned in the form of interest or dividend. The various schemes of Mutual Funds provide the investor with a wide range of investment options according to his risk bearing capacities and interest besides, they also give handy return to the investor. Mutual Funds offers an investor to invest even a small amount of money, each Mutual Fund has a defined investment objective and strategy. Mutual Funds schemes are managed by respective asset managed companies sponsored by financial institutions, banks, private companies or international firms. A Mutual Fund is the ideal investment vehicle for todays complex and modern financial scenario. The study is basically made to analyse the various open-ended equity schemes of different Asset Management Companies to highlight the diversity of investment that Mutual Fund offer. Thus, through the study one would understand how a common man could fruitfully convert a pittance into great penny by wisely investing into the right scheme according to his risk taking abilities.

14

OBJECTIVE
1. To project Mutual Fund as the productive avenue for investing activities. 2. To show the wide range of investment options available in Mutual Funds by explaining its various schemes. 3. To compare the schemes in different mutual fund companies based on Sharpes ratio, Treynors ratio, Co-efficient, Returns and show which company is best for the investor based on his risk profile.

4. To compare the schemes in different mutual fund companies based on Net Asset Values and show which company is best for the investor based on his risk profile. 5. To help an investor make a right choice of investment, while considering the inherent risk factors. 6. To understand the recent trends in Mutual Funds world.

SCOPE
The study here has been limited to analyse open-ended equity schemes of two different Asset Management Companies namely Reliance and HDFC Mutual Funds each scheme is analysed according to its performance against the other, based on factors like Sharpes Ratio, Treynors Ratio, (Beta) co-efficient, Returns and also NAV

15 IMPORTANCE
Importance includes diversification of risk, wherein individual risk is distributed among various securities. In other sense if loss is incurred from one type of holding, chance of gaining profit from rest of the holdings will increase.

METHODOLOGY
The methodology involves randomly selecting open ended equity schemes of different fund houses of the country. The data collected for this project is basically from secondary sources like monthly fact sheets of different houses, research reports from bank, data from internet and books.

The methodology involves randomly selecting open-ended equity schemes of different fund houses of the country. The data collected for this project is basically from two sources, they are 1. Primary sources: The monthly fact sheets of different fund houses and research reports from banks. 2. Secondary sources: Collection of data from Internet and books

LIMITATIONS OF THE STUDY

1. The study is limited only to the analysis of different schemes and its suitability to different investors according to their risk-taking ability. 2. The study is based on secondary data available from monthly fact sheets, websites and other books as primary data was not accessible. 3. The study is limited by the detailed study of Growth schemes of Two AMCs. 16

II. COMPANY PROFILE

COMPANY PROFILE

Indianbulls is emerging as one of the top most wealth management companies in India with a daily turnover of over 200 crores and 116 branches spread all over the country. Indianbulls, originally promoted by the Investment Trust of India, is now a part of the Sharyans and Inga Group. The Sharyans Group has an impressive portfolio of businesses under its fold which mainly fall under the real estate and financial services categories. The prominent subsidiaries of this Group are Prebone Yamane (Countrys largest debt broking company), Intime Spectrum (Indias largest Registry & Transfer Agents), and Collin Stewarts India Private Limited (Portfolio Management Services & Research along with institutional broking operations for Collin Stewarts which is the largest wealth management company in the UK). Under the guidance of the Sharyans and

Inga Group, Indianbulls will soon touch the pinnacles of success in the financial services industry by being a dominant force in the broking as well as the distribution arena. With an unblemished and reputed track record, Indianbulls is all set become an imposing wealth management firm in the country by giving the best to its clients as well as stakeholders. Indianbulls has been set up to engage in Stock Broking Institutional Broking Derivatives Depository Services Distribution of Investment Products Distribution of Insurance Commodities Broking

17

OFFERINGS

18

Research competency:
Our primary strengths lie in research and operational efficiency. The day-to-day operations are managed by some of the best professionals in the industry having in-depth

understanding of underlying market trends and sound business practices The Research Team comprises of competent professionals with vast experience, insightful analytical abilities and high standards of integrity. Some of research reports are as below: Economic Outlook and Updates Sector & Company Reports Technical Recommendations Daily Market Report Daily Technical Outlook Reports on New Fund Offerings Weekly analysis of mutual funds Fund Focus Weekly debt report: Debt Dose Monthly Newsletter - ITI Investment Flash Monthly 4 Pager - ITI Wealth Wise ITIFSL also offer daily technical calls through SMS to our clients free of charge ADVANTAGES TO INVESTERS: Why you need a financial planner? The financial planner is someone who can help you invest across investment avenues based on your risk profile and investment objectives. Post-investment, he monitors your investments and ensures that you are on course to achieve your investment objectives. If necessary, he suggests changes to your financial plan so that you are able to achieve your investment objectives as planned. Given the critical inputs provided by the financial planner in helping you achieve your financial goals, it is important that you select the right financial planner. Here are the reasons why ITI is the right planner for you

19 Certification/Membership More than anything else, this is a pre-requisite from the compliance point of view. Your financial planner should be certified and registered as a broker or mutual fund agent with NSE, BSE, AMFI etc. ITI FSL has Trading and Clearing Memberships with major Stock

Exchanges in India to offer broking services across market segments at all of the Nationallevel Exchanges. ITI FSL is a Depository Participant with CDSL. We also have memberships with commodity exchanges. We have AMFI certified professionals to advice you on mutual funds.

Competence Gone are the days when financial planning simply required delivering application forms. The traditional "one-size fits all" approach is pass. With the increasing list of investment avenues on offer, selecting the one that suits you the best is becoming a challenge. To that end, competence and skill set are the basic criteria that investors should look for in an investment planner. With ITI fine staff of professionals, you can be sure that you will get the best advice and service to achieve your financial goals. Furthermore, the recommendations offered by ITI are backed by solid research.

Value-add services In addition to financial planning, ITI provides related, value-add services that can assist you in the investment process. On-line tools and calculators are some of our more popular value-add services. These tools can help you keep track of your investments. These valueadd services form an integral part of our offering. One-stop shop Every individual has different needs and the same undergo a change over a period of time. The financial planner should be capable enough to understand these needs and offer suitable products to fulfill them. For this purpose, ITI provides you with the entire range of investment products from stocks, mutual funds, bonds to fixed deposits. In other words, we offer a "one-stop" solution for all your investment needs.

20 Accessibility One of the common complaints from investors is that their financial planner is unavailable/inaccessible and therefore unable to provide adequate/prompt service. This is

particularly common in a one-man setup where the financial planner's services begin and end with him, with little or no backup. If the financial planner is preoccupied with some important clients or if he re-locates, it leaves you in a soup because your financial plan is in limbo. It is best to go with a financial planning initiative that is run by teams (as opposed to one-man setups) to ensure continuity of your financial plan. ITI has a team of professionals who are ever ready to serve you at any point of time. We are spread across the country so that you can have access to us always

KEY LEARNINGS IN THE ORGANIZATION

EQUITY FUTURES OPTIONS COMMODITIES IPO MUTUAL FUNDS SIP TAX SAVING SCHEMES IN INDIA ONLINE AND OFFLINE TRADING PORTFOLIO MANAGEMENT

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III. LITERATURE REVIEW

LITERATURE REVIEW
1. Journal of Economic Perspectives

Vol. 18, No. 2, Spring 2004 Manager-Investor Conflicts in Mutual Funds Paul G. Mahoney Article Citation Mahoney, Paul. G. 2004. "Manager-Investor Conflicts in Mutual Funds." Journal of Economic Perspectives, 18(2): 16118 Abstract Half of all of U.S. households own shares in one or more mutual funds, either directly or through personal or employer-sponsored retirement accounts. This article describes the structure and regulation of mutual funds and the resulting incentives facing those who make decisions for the funds. After providing some basic institutional details, it focuses on the cash flows from mutual fund investors to fund managers, brokers, and other third parties and the associated conflicts of interest. The article concludes with a summary of recent legal proceedings against mutual fund managers and brokers based on improper trading practices and regulatory proposals to curb those practices.

2. Predicting returns of equity mutual funds Correspondence: Olaf Stotz, Frankfurt School of Finance & Management, Sonnemannstrae 9-11, D-60314 Frankfurt, Germany Olaf stotz holds the BHF-BANK Endowed Chair of Private Wealth Management at Frankfurt School of Finance & Management, Germany. date- 18 September 2010 Abstract This paper investigates 1-year-ahead forecasts of actively managed equity mutual funds. A multifactor forecast model is developed that employs forecasts on the manager's skill, the fund's style and the expected factor returns. On the basis of a sample of German equity funds, we show that this forecast model substantially improves forecast power in relation to a nave forecast model, which just extrapolates past returns into the future. In particular, the multifactor model reduces the mean-squared error (mean absolute error) by up to 30 per cent compared to the nave model. More importantly, from the perspective of a mutual fund investor, the return of top-decile funds chosen by the multifactor model exceeds the average return of all funds by more than 200 basis points per year

22 3.Article: PERFORMANCE PERSISTENCE OF FIXED INCOME MUTUAL FUNDS

Article from: Journal of Economics and Finance Article date: October 1, 2008 Author: Droms, William G; Walker, David A Invest in Mutual Funds ICICI Prudential Infrastructure Fund- Largest Infrastructure Fund! Abstract The "winner-winner, winner-loser, gone" methodology allows tests for short-term performance persistence for government and corporate fixed income mutual funds from 1990 to 1999. Persistence occurs when "winner" (loser) funds remain "winner" (loser) funds. If intermediate-term (long-term) bond returns are higher than long-term (intermediate-term) bond returns for successive years, the z statistic is positive. Persistence is negative in the opposite case, and the pattern holds for longer lag periods. 4.Article: MUTUAL FUND PERFORMANCE PERSISTENCE: STILL TRUE? Article from: Academy of Accounting and Financial Studies Journal Article date: October 1, 2012 Author: Fortin, Rich; Michelson, Stuart ICICI Prudential Infrastructure Fund- Progress with Indias infrastructure growth! Abstract The purpose of this paper is to examine the performance persistence of a large sample of mutual funds over time. Specifically do mutual fund managers show positive (negative) performance year after year? Alternatively, is mutual fund performance from one year to the next basically a random event? Our tests show that there is performance persistence in mutual fund returns. This outcome is true for both the lowest performing and highest performing mutual funds. 5.Article: Mutual fund managers: Does longevity imply expertise? Article from: Journal of Economics and Finance Article date: July 1, 2003 Author: Costa, Bruce A; Porter, Gary. Invest in Mutual Funds ICICI Prudential Infrastructure Fund- Largest Infrastructure Fund

23 Abstract We analyze the performance of 1,042 mutual funds from 1986 to 1995 to measure the relationship between manager tenure and performance. Funds whose managers' have at

least ten years tenure do not generate significantly higher excess returns than funds with less experienced managers. The excess returns of the best managers are not greater than those of their less experienced colleagues. Regardless of tenure, managers producing positive risk adjusted returns for three years are not likely to repeat their performance in subsequent periods. Our results provide further evidence that tenure should not be a factor in selecting mutual funds. 6.Article: Mutual fund attributes and performance Article from: Parenting Article date: July 1, 2003 Author: Jan, Yin-Ching; Hung, Mao-Wei ICICI Prudential Infrastructure Fund-Invest in Indias infrastructure growth! Abstract This paper investigates the relationship between mutual fund attributes and performance. Funds in the same investment objective category are classified into two portfolios according to mutual fund attributes, including load/no-load, size, turnover, expense, and past performance. The stochastic dominance approach is used to test whether a specific characteristic of mutual funds is efficient relative to its counterpart. We find that the relationship between mutual fund attributes and performance differs among mutual funds with different objectives. 7.Article: Explaining persistance in mutual fund performance Article from: Parenting Article date: January 1, 1998 Author: Detzel, F Larry; Weigand, Robert A ICICI Prudential Infrastructure Fund- Invest in Indias largest infrastructure fund Abstract This study investigates the determinants of persistence in mutual fund performance. Previous research that uses factor-mimicking portfolios and characteristic benchmarks to model fund performance fails to explain all the persistence in fund returns. This study employs a model that directly relates mutual fund returns to the characteristics of the stocks held by funds. Adjusting fund returns for the size of the stocks in which funds invest and financial ratios intended to capture fund manager investment styles explains all the persistence in mutual fund returns from 197S1985, the period in which persistence is most prevalent. 24 8.On Persistence in Mutual Fund Performance Mark M. Carhart

Kepos Capital LPJ. OF FINANCE, Vol. 52 No. 1, date- March 1997 Abstract: Using a sample free of survivor bias, I demonstrate that common factors in stock returns and investment expenses almost completely explain persistence in equity mutual funds' mean and risk-adjusted returns. Hendricks, Patel and Zeckhauser's (1993) "hot hands" result is mostly driven by the one-year momentum effect of Jegadeesh and Titman (1993), but individual funds do not earn higher returns from following the momentum strategy in stocks. The only significant persistence not explained is concentrated in strong underperformance by the worst-return mutual funds. The results do not support the existence of skilled or informed mutual fund portfolio managers. 9. The Journal of Indian Management & Strategy 8M Year : 2010, Volume : 13 Emerging trends of mutual funds in India: A study across category and type of schemes BodlaB. S.1,BishnoiSunita2,Lecturer 1Haryana School of Business, Guru Jambheshwar University of Science and Technology, Hisar, Haryana. 2DAV Institute of Management, Faridadad. Abstract The present paper aims to bring out the recent trends in mutual fund industry in India. The emerging scenario and growth of mutual funds have been analyzed across category, sector and type of portfolio. Year-on-year percent change, compound annual growth rate (CAGR) and proportionate market share are the major tools applied for analysing growth in number of schemes, assets under management and resources mobilized. The reference period ranges from 19982008, i.e. period of second generation financial sector reforms. The study brings out that the mutual fund investors in India at present have as many as 609 schemes with variety of features such as dividend, growth, cumulative interest income, monthly income plans, sectoral plans, equity linked schemes, money market schemes, etc. Though both open-end and closeend schemes have registered excellent growth in fund mobilization, but currently the former category of schemes is more popular among the investors. Portfolio-wise analysis has brought that income schemes have an edge over growth schemes in terms of assets under management.

25 10.MUTUAL FUND: A RESOURCE MOBILIZER IN FINANCIAL MARKET P. Hanumantha Rao* Vijay Kr. Mishra*

Abstract The success story of any economy can only be scripted on the basis of sound financial system of the country. Economic reform process of 1991 had a great Impact on the financial system of the country leading to the overall development of the Indian economy. Today, Indias financial system is considered to be sound and stable as compared to many other Asian countries where the financial market is facing many crises. During last one decade or so, role of Indian mutual funds industry as a significant financial service in financial market has really been noteworthy. In fact, Mutual funds have emerged as an important segment of financial market of India, especially as a result of the initiatives taken by the Govt .of India for resolving problems relating to UTIs US-64 and to liberalize tax liabilities on the incomes earned by the mutual funds. They now play a very significant role in channelizing the saving of millions of individuals into the investment in equity and debt instruments. This paper aims at making a critical financial market. 11.Classifying mutual funds in India: some results from clustering Indian Journal of Economics and Business, June, 2009 by Gajendra Sidana, Debashis Acharya Abstract This paper attempts to classify hundred mutual funds employing cluster analysis and using a host of criteria like the I year total return, 2 year annualized return, 3 year annualized return, 5 year annualized return, alpha, beta, R-squared, sharpe's ratio, mean and standard deviation etc. The data is obtained from Valuresearchonline. We do find evidences of inconsistencies between the investment style / objective classification and the return obtained by the fund. 12.Mutual Fund In India: A Financial Service In Capital Market NALINI PRAVA TRIPATHY* Abstract The Indian capital market has been increasing tremendously during last few years. With the reforms of economy, reforms of industrial policy, reforms of public sector and reforms of financial sector, the economy has been opened up and many developments have been taking place in the Indian money market and capital market. In order to help the small investors, mutual fund industry has come to occupy an important place. The main objective of this paper is to examine the importance and growth of mutual funds and evaluate the operations of mutual funds. 26

GROWTH AND HISTORY OF MUTUAL FUNDS

The First investment trust (now called Mutual Fund) began in the Netherlands in the early 1800s. The first in the U.S. was the New York Stock Trust, which started in 1889. Since Boston was the economic center of the nation until the turn of the century, the majority of funds started thereFidelity, Pioneer and Putnum Fund, to name a few. A Fund that was comprised of both stocks and bonds (the Wellington Fund) started in 1928 and is still part of Vanguard. As the 20's crashed to a close, there were 10 Mutual Funds in the nation.

Foundation for the Mutual Fund in India was laid by the parliament in 1963. With the enactment of Unit Trust of India (UTI) Act the then Finance Minister Mr. T.T. Krishnamacharya who initiated the act made it clear to the parliament act UTI would provide an opportunity for the middle and lower income groups to acquire property in the form of share. Thus UTI came out with the mission of catering to the needs of individuals investors whose means are small, with its maiden fund, an open ended fund in 1964.

27

THE INDIAN MUTUAL FUND INDUSTRY CAN BE STUDIED IN FOUR PHASES:FIRST PHASE BETWEEN 1964 1987

The genesis of the Mutual Fund industry in India can be traced back to 1964 with the setting up of the Unit Trust of India (UTI) by the Government of India. Since then UTI has grown to be a dominant player in the industry. UTI is governed by a special legislation, the Unit Trust of India Act, 1963. It was setup by the Reserve Bank of India and functioned under the regulatory and administrative control of RBI. In 1978, UTI was de-linked from the RBI and the administrative control in place of RBI. The first scheme launched by UTI was unit Scheme 1964. At the end of 1988, UTI had Rs. 6700 crores of assets under the management.

SECOND PHASE 1987-1993 (Entry of Public Sector Funds)

Till 1986, UTI was the only mutual player in India. The industry was opened up for wider participation in 1987 when public sector banks and insurance companies were permitted to setup Mutual Funds. Since then, many public sector banks have setup Mutual Funds. SBI Mutual Fund was the first non-UTI Mutual Funds established in June 1987 followed by can bank Mutual Funds, Punjab National Bank Mutual Fund, India bank Mutual Funds, Bank of India, Bank of Boroda Mutual Funds. Also the two Insurance companies LIC (June 1987) and GIC (December 1990) have established Mutual Funds. At the end of 1993, the Mutual Fund industry had assets under management of Rs. 47004 crores. This phase changed the mind set of the investors.

28 THIRD PHASE 1993-2003

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 Funds 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 sector Mutual Fund registered in July 1993. Securities Exchange Board of India (SEBI) formulated the Mutual Fund (Regulation) 1993, which for the first time established a comprehensive regulatory framework for the Mutual Fund Industry. Since then several Mutual Funds have been setup by the private and joint sectors.

FOURTH PHASE - Since February 2003

In February 2003, following the repeal of the Unit Trust of India act 1963, UTI was bifurcated into separate entities. One is the specified undertaking of the UTI with asset under management of Rs. 29835 crores as at the end of January 2003, representing broadly, the assets of US 64 schemes, assured return and certain other schemes. The second is UTI Mutual Fund ltd, sponsored by SBI, PNB, BOB and LIC. It is registered in SEBI and functions under the Mutual Fund regulations. With the bifurcation of the erstwhile UTI which had in March 2000 more than Rs. 76000 crores of assets under management and with the setting up of the UTI Mutual Fund. At the end of October 31, 2008 there were 39 funds which manage assets of Rs. 176726 crores under 426 schemes. 29

FIGURE SHOWING THE WORKING OF MUTUAL FUND

Figure 4

30

STRUCTURE AND CONSTITUENTS OF FUND

MUTUAL FUND

Sponsorr

Trustee
FIGURE 5

AMC

Custodian

SPONSOR
Establishes the MUTUAL FUND Need to have sound financial track record. Appoints TRUSTEES. Appoints Asset Management Company. Must contribute 40% of the net worth of the AMC. Sometimes this power is given by the sponsor to the trustees through the trust deed. At least 50% of directors on the board of Asset Management Company should be independent of the sponsor. Asset Management Company shall not deal with any broker or firm associated with sponsor beyond 5% of daily gross business of the Mutual Fund. 31 All securities transactions of the Asset Management Company with its associates should be disclosed.

TRUSTEE
Manages the Mutual Fund and look after the operation of the appointed AMC. The investments are held by the Trustees, in a fiduciary responsibility. Trustees approve each Mutual Fund Scheme floated by AMC. Furnish report to SEBI on half yearly basis on AMC and Fund Functioning.

ASSET MANAGEMENT COMPANY

AMC acts as investment manager of the trust under the board supervision and direction of the trustees. AMC floats the different Mutual Fund schemes. Submits report to the Trustees on quarterly basis, mentioning activity and compliance factor. AMC is responsible to the trustees. AMC fees have a ceiling, decided by SEBI. Should have a net worth of at least Rs.10 crores at all the times.

32

CUSTODIAN
Appointed by board of trustees for safekeeping of securities.

 Its an entity independent of sponsors. SEBI regulates the securities market in India. According to SEBI every Mutual Fund require that at least two thirds of the directors of trustee company or board of trustees must be independent i.e. they should not be associated with the sponsors. Also, 50% of the directors of AMC must be independent. All Mutual Fund are required to be registered with SEBI before they launch any Scheme.

MAJOR MUTUAL FUND COMPANIES IN INDIA :

33 ABN AMRO Mutual Fund Birla Sun Life Mutual Fund Bank of Baroda Mutual Fund HDFC Mutual Fund HSBC Mutual Fund ING Vysya Mutual Fund Prudential ICICI Mutual Fund State Bank of India Mutual Fund Tata Mutual Fund Unit Trust of India Mutual Fund Reliance Mutual Fund Standard Chartered Mutual Fund Franklin Templeton India Mutual Fund Morgan Stanley Mutual Fund India Escorts Mutual Fund Alliance Capital Mutual Fund Benchmark Mutual Fund

IV. DATA ANALYSIS AND INTERPRETATON

DIFFERENT MODES OF RECEIVING THE INCOME EARNED FROM MUTUAL FUND INVESTMENTS
Mutual Funds offer three methods of receiving income:

Growth Plan In this plan, dividend is neither declared nor paid out to the investor but is built into the value of the NAV. In other words, the NAV increases over time due to such incomes and the investor realizes only the capital appreciation on redemption of his investment. Income Plan In this plan, dividends are paid-out to the investor. In other words, the NAV only reflects the capital appreciation or depreciation in market price of the underlying portfolio. Dividend Re-investment Plan In this case, dividend is declared but not paid out to the investor, instead, it is reinvested back into the scheme at the then prevailing NAV. In other words, the investor is given additional units and not cash as dividend.

NET ASSET VALUE (NAV) AN EXPLANATION

When a Mutual Fund scheme is first offered to the public, the offer price is usually Rs.10 per unit. After the amount raised is invested, the total funds under the control of the Mutual Fund increases or decreases depending upon the fluctuation in the market value of the investments. As a result, this Rs.10 per unit becomes higher or lower. This is the NAV or the market value of each unit of the scheme. This is explained with an example: 34

Table 1

Initial amount collected by the Mutual Fund

Rs.100 crores

Number of initial units issued, taking Rs.10 per unit as the Rs.10 crores initial value per unit

This initial amount is now invested and the market value goes Rs.110 crores up to Taking the initial number of units (i.e. 10crore units), the value Rs.11 (Rs.110 crores divided per unit (the NAV) will now be by 10 crore units.) Rs.11 is the NAV of each unit. Explanation for A) Sharpes Ratio B) Treynors Ratio C) (Beta) co-efficient. D) Returns

A) The Sharpes Measure In this model, performance of a fund is evaluated on the basis of Sharpe Ratio, which is a ratio of returns generated by the fund over and above risk free rate of return and the total risk associated with it. According to Sharpe, it is the total risk of the fund that the investors are concerned about. So, the model evaluates funds on the basis of reward per unit of total risk. Symbolically, it can be written as: Sharpe Index (Si) = (Ri - Rf)/Si Where, Si is standard deviation of the fund. 35 While a high and positive Sharpe Ratio shows a superior risk-adjusted performance of a fund, a low and negative Sharpe Ratio is an indication of unfavorable performance. B) The Treynor Measure Developed by Jack Treynor, this performance measure evaluates funds on the basis of Treynor's Index.

This Index is a ratio of return generated by the fund over and above risk free rate of return (generally taken to be the return on securities backed by the government, as there is no credit risk associated), during a given period and systematic risk associated with it (beta). Symbolically, it can be represented as: Treynor's Index (Ti) = (Ri - Rf)/Bi. Where, Ri represents return on fund, Rf is risk free rate of return and Bi is beta of the fund. All risk-averse investors would like to maximize this value. While a high and positive Treynor's Index shows a superior risk-adjusted performance of a fund, a low and negative Treynor's Index is an indication of unfavorable performance.

C) (Beta) Co-efficient: Systematic risk is measured in terms of Beta, which represents fluctuations in the NAV of the fund vis--vis market. The more responsive the NAV of a Mutual Fund is to the changes in the market; higher will be its beta. Beta is calculated by relating the returns on a Mutual Fund with the returns in the market. While unsystematic risk can be diversified through investments in a number of instruments, systematic risk cannot. By using the risk return relationship, we try to assess the competitive strength of the Mutual Funds vis--vis one another in a better way. (Beta) is calculated as N (XY) XY N (X2) (X) 2 36 D) Returns: Returns for the last one-year of different schemes are taken for the comparison and analysis part. Note : All the data used for analysis is taken upto the period 31-march-2012 HYPOTHESIS The hypothesis of the study involves comparison between 1. ICICI Prudential growth plan

2. Reliance Growth Fund

ICICI PRUDENTIAL GROWTH FUND

Investment Information Fund name Fund Type Investment Plan AMC Asset Size Min. Investment Fund Manager Launch date Face value Custodian ICICI prudential mutual fund Open-Ended Growth ICICI Prudential asset management company ltd. 368.18 cr (july-31-2012) Rs 5,000 Mr. Sankaran Naran 19-06-1998 10 HDFC Bank ltd

Asset Allocation (%) Equity Domestic equities Cash & cash equivalents 37 18.22% 74.91% 6.87%

Figure 6 Intrepretation: It shows that the asset allocation of ICICI in which Domestic Equities consists of 74.91%, Cash and Cash Equilvalents consists of 18.22% and Others Equities consists of 6.87%.

38

PORTFOLIO
Table 2

Company Name Other Equities Other Assets Bank Of Baroda Lupin Ltd. ICICI Bank Ltd. State Bank Of India EID-Parry (India) Ltd. Infosys Technologies Ltd. Reliance Industries Ltd. Jindal Saw Ltd.

Market Value 1472.51 554.89 321.28 316.97 294.37 288.14 284.68 267.05 252.19 243.38

% Holdings 18.22 6.87 3.98 3.92 3.64 3.57 3.52 3.31 3.12 3.01

Figure 7
Intrepretation: Asset Allocation is allocating of ICICI mutual funds in investments into different investment options depending on your risk profile and return expectations.

RELIANCE MUTUAL FUND

Fund name reliance mutual fund

Fund type Investment plan AMC Asset size Min investment Fund manager Launch date Face value Custodian 40 ASSET ALLOCATION Equities Domestic equities Cash and cash equivalents

open ended growth fund Reliance capital asset management ltd. 7428.96cr(31-05-2012) Rs 5000 sunil singhania 08-12-1995 10 Deutsche Bank AG

4.19 83.86 11.95

Figure 8

Intrepretation: It shows that the asset allocation of Reliance in which Domestic Equities consists of 83.86%, Cash and Cash Equilvalents consists of 11.95% and Others Equities consists of 4.19%.

41 PORTFOLIO

Table 3

Company Name Cash & Cash Equivalent Reliance Industries Ltd. State Bank Of India Tata Consultancy Services Ltd. ICICI Bank Ltd. Oil & Natural Gas Corpn. Ltd. Infosys Technologies Ltd. HCL Technologies Ltd. Other Equities Reliance Infrastructure Ltd

Market Val 203.42 125.69 118.69 110.71 108.77 108.75 90.83 77.04 71.35 71.18

% Hold 11.95 7.38 6.97 6.50 6.39 6.39 5.34 4.53 4.19 4.18

Intrepretation: expectations.

Thus Asset Allocation is allocating of Reliance mutual fund of

investments into different investment options depending on your risk profile and return

42

Figure 9

43

RELIANCE GROWTH FUND PERFORMANCE:

Table 4

YEAR
LAST 1 YEAR LAST YEARS LAST YEARS SINCE INCEPTION TOTAL

Rp 35.54%

Rm

Rf

(Rm-Rf) (RpX Rf) Y

X2

XY

(X D2 -Xbar) D

18.54% 6.57% 20.20% 12.36%

8.25% 10.29 9.08% -2.51 8.25% 11.95 10.08 % 2.28 22.01

27.29 5.39 18.97 19.42 71.07

105.88 6.3001 142.80 25 5.198 260.18 1

3 14.47%

5 27.22%

29.50%

280.8 14 13.52 8 226.6 915 44.27 7 538.2 54

4.79 -8.01 6.45 -3.22

22.944 64.16 41.60 10.368 139.07 2

Xbar

= X / N

= 22.01 / 4 = 5.5

Std.Deviation ( )

= (X-Xbar)2 / N = 139.072/4 = 5.89

Co-efficient

= N (XY) XY

N (X2) (X) 2 = 4(538.254) (22.01)(71.07) 4(260.181) (22.01) 2 = 1.058

44 Sharpes Ratio = Rp-Rf / = 71.07/5.89 = 12.066 Treynors Ratio = Rm-Rf / = 22.01/1.058 = 20.803

ICICI PRUDENTIAL GROWTH FUND PERFORMANCE

Table 5

YEAR
LAST 1 YEAR LAST YEARS LAST YEARS SINCE INCEPTION TOTAL

Rp 23.22%

Rm

Rf

(Rm-Rf) (RpX Rf) Y

X2

XY

(X D2 -Xbar) D

17.42% 6.52% 18.32% 15.32%

8.25% 9.17 9.08% -2.56 8.25% 10.07 10.08 % 5.24 21.92

14.97 -1.47 11.34 13.46 38.3

84.089 6.553 101.40 4 27.457 219.50 3

3 7.61% 5 19.59%

137.2 74 3.763 114.1 93 70.53 325.7 6

3.69 -8.04 4.59 -0.25

13.616 64.64 21.068 0.0576 99.381 6

23.54%

Xbar = X / N

= 21.92 /2

= 5.48 Std.Deviation ( ) = (X-Xbar)2 / N = 99.3816/4 = 4.984

45 Co-efficient

= N (XY) XY N (X2) (X) 2 = 4(325.76) (21.92)(30.08) 4(219.503) (21.92) 2 = 1.619

Sharpes Ratio

= Rp-Rf / = 30.08/4.984 = 6.035

Treynors Ratio

= Rm-Rf / = 21.92/1.619 = 13.539

OBSERVATIONS Observations are made from the data analysis. The following observations are drawn from the analysis of schemes:

46
Table 6

Reliance Growth Sharpes Ratio Treynors Ratio Fund 12.066 20.803 1.058 5.89

ICICI MUTUAL FUND 6.035 13.539 1.619 4.984

PRU

Co-efficient
Std.Deviation()

RANK

47

COMPARATIVE ANALYSIS USING NET ASSET VALUES

Reliance mutual fund

Table 7

Date

January(2012)

January(2011) 195.6634

January(2010) 401.79

January(2009) 278.54

January(2008) 201.71

NAV 423.7479

450 400 350 300 250 200 150 100 50 0

NAV

2012

2011

2010

2009

2008

Figure 10 Fund performance and NAV values over a period of 5 year. Intrepretation: It shows that the NAV values of Reliance mutual funds of the following years from January 2008 to Jan 2012.

48

ICICI PRUDENTIAL MUTUAL FUND

Table 8

Date

January(2012)

January(2011) 67.28

January(2010) 118.67

January(2009) 96.40

January(2008) 69.60

NAV 116.670

120 100 80 60 40 20 0 2012 2011 2010 2009 2008 NAV

Figure 11 Fund performance and NAV values over a period of 5 year. Intrepretation: It shows that the NAV values of ICICI mutual funds of the following years from January 2008 to Jan 2012.

PERFORMANCE EVALUATION
We are interested in discovering if the management of a mutual fund is performing well; that is, has management done better through its selective buying and selling of securities than would have been achieved through merely buying the market picking a large number of securities randomly and holding them throughout the period?

49 One of the most popular ways of measuring managements performance is by comparing the yields for the managed portfolio with the market or with a random portfolio.

The following formula can be used to evaluate Mutual fund performance:-

NAVt + Dt 1 NAVt 1

Where: NAV t = per-share net asset value at the end of year t Dt= NAV t-1 = Capital appreciation during year. per-share net asset value at the end of the previous year.

PERFORMANCE EVALUATION OF SELECTED FUNDS

NAV t-1 = 1st January, 2008 NAV t
=

1st January, 2012

50

1)
Table 9

RELIANCE MUTUAL FUND(G)

NAV t-1 201.71 Applying the formula we get-

NAV t 423.7479

D t =(NAV t 222.039

NAV t-1)

423.7479 + 222.039 - 1 201.71

=423.84% 2) ICICI PRUDENTIAL MUTUAL FUND

Table 10

NAV t-1 69.90 Applying the formula we get=

NAV t 116.670

D t =(NAV t 46.77

NAV t-1)

116.670 + 46.77 - 1 69.90

=116.339%

51

FUND PERFORMANCE RANKING

Table 11

Name of the Fund

RELIANCE MUTUAL FUND(G) ICICI PRUDENTIAL MUTUAL FUND(G)

NAV
423.84 116.339

Rank
1 2

450 400 350 300 250 200 150 100 50 0

RELIANCE MUTUAL FUND ICICI PRUDENTIAL MUTUAL FUND (G)

NAV

Figure 12 Intrepretation: It shows that ranking wise Reliance mutual fund is stands for No-1 and 2nd is the ICICI mutual fund.

52

V. FINDINGS & SUGGESSTIONS

FINDINGS

The Biggest advantage with Mutual Funds is that the investor dont need huge amount to be invested in all his favorite stocks and bonds. Most Mutual Funds have a minimum investment of Rs.1000 to Rs.5000.

From the above comparative analysis between RELIANCE and ICICI we can find the differences between their growth schemes performances.

By using both the methods i found that the performance of mutual fund growth scheme of Reliance is better than the ICICI.

Hence the calculated NAV result of Reliance (423.84) is better than that of ICICI(116.339)

By using sharpes ratio and treynors ratio we can find the same result that is Reliance is performing better than ICICI in this particular growth scheme.

Reliance:Sharpes ratio-12.066 Treynors ratio-20.803

ICICI :Sharpes ratio-6.035 Treynors ratio-13.539

By the above results we can rank the Reliance growth fund as no-1 And ICICI growth fund as no-2.

53

SUGGESTIONS
The Asset Management Company must design the portfolio in

such a way, to lessen the risk that is prevalent in the market. The Asset Management Company must design the portfolio in

such a way, to increase the returns.

The Asset Management Company must make sure to pay regular

dividends to the investor The Asset Management Company must dedicate itself to a more

professional management of the Fund because it motivates the investors and potential investors to invest in Mutual Funds. The Asset Management Company must make the most

advantageous use of print and electronic media in order to motivate the investors and potential investors to invest in Mutual Funds. The Asset Management Company must make sure that the Net

Asset Value (NAV) of the fund remains considerably high because it is the most important factor that would be checked by the investors before investing in Mutual Funds. The Asset Management Company must organize itself professionally and manage the Fund efficiently and with dedication to earn the goodwill of the public.

54

VI.BIBLIOGRAPHY

BOOKS Security analysis and Portfolio management Financial Services Essentials of Investment & -DONALD E. FISHER & RONALD J. JORDAN -M.Y.KHAN

Tax Planning Personal Finance

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ICFAI ASHU DATT

NEWS PAPERS The Economic Times The New Indian Express

MAGAZINES WEBSITES www.mutualfundsindia.com www.stockholding.com www.moneypore.com www.amfiindia.com www.moneycontrol.com Business World

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