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Pooled Vehicle
A mutual fund (MF) is a vehicle to pool money from investors, with a promise that professional managers who are expected to honor the promise would invest the money in a particular manner.
Mutual funds in India are governed by the regulations of Securities and Exchange Board of India (SEBI).
Professional Management
The idea behind a MF is that investors lack the time or the inclination or the skills to manage their own investments. Professional managers, acting on behalf of the MF, manage the investments for the benefit of investors, in return for a management fee.
The organization that manages the investment is the Asset Management Company (AMC). Employees of the AMC who perform this role of managing investments are the Fund Managers.
Schemes
Investors have their individual preferences on how they would like their money invested and how much risk they are willing to take. Professional managers can choose to manage each individual investors money as per the investors preferences. Such personal treatment, often referred to as
Portfolio Management Scheme (PMS) in India, entails significant demands on the time of the managers. PMS is therefore economically feasible only for investment mutual fundss above a particular value. The breakeven asset size, which depends on the cost structure of the manager, is rarely below Rs 10,00,000. 1
It is possible to balance the time and cost required to manage investments by grouping investors together based on their preferences. In this manner, the focus of the investment activity can be shifted from a single investor (in the case of PMS) to a group of investors having similar expectations (in the case of a MF).
For ease of management and reporting, such a group of investors is identified with a mutual fund scheme. In commercial terminology, the investors have invested in a scheme and the professional managers manage the scheme. A MF can, and typically does, have several schemes to cater to different investor preferences.
Money in Trust
The MF manages investments of the scheme for the benefit of its investors. Every scheme has an: investmentmutual funds (Portfolio Statement); account of income and expenditure (Revenue Account); and Account of assets and liabilities (Balance Sheet).
In order to ensure fairness to investors, the expenditure that can be charged to the scheme, whether as management fees or as other expenses, is regulated by SEBI.
The gains of any scheme (after accounting for income, permitted expenses, profits and losses from the investment activity) would belong to its investors. Similarly losses, if any, would need to be borne by its investors, upto the amount invested. Thus, the MF manages the moneys in trust for the benefit of investors
Legal framework
Across the world, the MF sector is viewed as a critical mechanism to channel funds of investors into the capital market. Since these investors are often not so well qualified to
invest, the mutual fund business is highly regulated. Regulations vary from country to country. But broadly they provide for : checks and balances in the legal structure; pre-qualifications to start a MF;, permissible schemes and investments; control over marketing process; level of operational flexibility to the professional investors; Valuation of securities etc.
The flow chart below describes broadly the working of a mutual fund:
RESEARCH METHODOLOGY
A research design is a specification of methods, procedure for acquiring information needed. It is overall pattern or frame work of the project that stipulates what information is to be collected from which sources and by what procedures. Research is a systematic and intensive study directed towards a more complete knowledge of the subject studied
PRIMARY DATA
Data collected directly from the account certain ratios are computed and certain has also been prepared to perform the economic , industry and company analysis. the economic indicators are Gross domestic product, Inflation, Industries and Agriculture
SECONDARY DATA
Journals Internet Company websites Text books
GIC mutual fund (December 1990.) At the end of 1993, the mutual fund industry had assets under management of Rs.47, 004 crores.
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 Ltd, 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. As at the end of September 2007, there were 29 funds, which manage assets of Rs.153108 Crores under 421 scheme.
Investing through a MF would make economic sense for an investor if her investment, over the medium to long term, fetches a return (net of all costs and expenses) that is higher than what she would otherwise have earned by investing directly. 9
Because the goal of investing is to accumulate real wealth an enhanced ability to pay for goods and services the ultimate focus of the long-term investor must be on real, not nominal, returns. The following categories of investors are eligible to invest in Indian mutual funds: Resident Indian adult individuals, either singly or jointly (not exceeding three); Parents / lawful guardians on behalf of minors; Companies, corporate bodies registered in India; Registered societies and co-operative societies authorized to invest in such Units; Religious and charitable trusts under the provisions of 11(5) of the Income Tax Act,
1961 read with Rule 17C of the Income Tax Rules, 1962; Trustees of private trusts authorized to invest in mutual fund schemes under their trust
deeds; Partners of partnership firms; Association of persons or body of individuals, whether incorporated or not; Hindu Undivided Families (HUFs), in the sole name of the Karta; Banks (including co-operative banks and regional rural banks) and financial
institutions and investment institutions; Non-resident Indians / Persons of Indian origin resident abroad (NRIs) on full
repatriation or non-repatriation basis; Overseas corporate bodies (OCBs), firms and societies which are held directly or
indirectly but ultimately to the extent of at least 60% by NRIs and trusts in which at least 60% of the beneficial interest is similarly held irrevocably by such persons, on full repatriation basis (subject to RBI approval); Other mutual funds registered with SEBI; Foreign institutional investors (FIIs) registered with SEBI; International multilateral agencies approved by the Government of India. Army / Navy / Airforce, para-military units and other eligible institutions; Scientific and industrial research organisations
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Trustees
Trustees are the people within a mutual fund organization, who are responsible for ensuring that investors interests are properly taken care of. In return for their services, they are paid trustee fees, which is normally charged to the scheme.
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Distributors
Distributors earn a commission for bringing investors into the schemes of a MF. This commission is an expense for the scheme, although there are occasions when an AMC chooses to bear the cost, wholly or partly. Depending on the financial and physical resources at their disposal, the distributors could be: Tier 1 distributors (having an owned or franchised network reaching out to investors
all across the country); or Tier 2 distributors (regional players with some reach within their region); or Tier 3 distributors (marginal players).
It is paradoxical that distributors earn a commission from the AMC, but are expected to safeguard the financial health of investors from whom they do not earn a fee. It is almost like a doctor earning a commission from the pharmaceutical company, but expected to safeguard the physical health of the patient who does not pay him anything. In recognition of the anomaly in the distribution structure, a body of financial planners is expected to emerge in the Indian financial market. They will safeguard investors interest in return for a fee from the investor.
Registrars
The investors holding in schemes is typically tracked by the schemes Registrar and Transfer agent (R&T). Some AMCs prefer to handle this role inhouse. The registrar / AMC maintains an account of the investors investments in and dis-investment from the scheme. Requests to invest more money into a scheme, or to recover moneys against existing investments in the scheme are processed by the R&T. Since the database of investors is maintained by the R&T, internet based transactions of existing investors in the schemes of an AMC are effected through the R&Ts database servers.
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Records of unitholders determine the schemes unit capital (discussion follows), which is a significant component of the liability side of any MF scheme.
Custodian / Depository
The custodian maintains custody of the securities in which the scheme invests (as distinct from the registrar who tracks the investment by investors in the scheme). This ensures an ongoing independent record of the investments of the scheme. The custodian also
follows up on various corporate actions, such as rights, bonus and dividends declared by investee companies. In a situation where securities are increasingly being dematerialised, the role of the depository for such independent record of investments is growing. In the recent securities market scam, a large investor parted with some of its funds without gaining custody of the securities where they were supposed to have invested. When the scam broke out, they realized that the money was gone, but they did not have the securities. The custodian in the MF structure is in a position to prevent such risks.
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Types of schemes
MF schemes can be offered with any of a range of investment objectives, each corresponding to a certain point in the risk return matrix. In a broad sense, they can be categorised based on tenor or asset class or position philosophy or geography.
Closed-end schemes
These are schemes that have a fixed maturity. Liquidity in such schemes is available through listing in the stock market. Trades in the market entail change in the ownership of the units, but do not alter the schemes unit capital.
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Occasionally, closed-end schemes provide a re-purchase option to investors, either for a specified period or after a specified period, normally up to a total limit for all investors together, or a limit per investor. Such re-purchase would reduce the unit capital of the scheme. It is not normal for closed-end schemes to sell new units on an ongoing basis, though they could make a rights offering to existing investors.
o Bond Schemes These schemes invest in bond securities issued by the government or any other issuer.
High yield bonds is a politically correct way of referring to junk bonds. SEBI guidelines limit investment in unrated securities and securities that are below investment grade to 25 per cent of the net assets of any scheme. Therefore, it is not possible to have a junk bond scheme in India.
o Money market / Liquid Schemes These schemes invest in short term debt instruments. As will be seen in Chapter 7, such schemes are less volatile.
o Balanced Schemes
Balanced schemes invest in a mix of equity and debt. The debt investments ensure a basic interest income, which the fund manager hopes to top up with capital gains on the investment mutual funds. However, losses can eat into the basic interest income and capital. The greatest benefit of a balanced investment program is that it makes risk more palatable. An allocation to bonds moderates the short term volatility of stocks, giving the risk averse long term investor the courage and confidence to sustain a heavy allocation to equities. Choose a balance of stocks and bonds according to your unique circumstances your investment objectives, your time horizon, your level of comfort with risk, and your financial resources. One of the common allocations used in these types of funds is known as the robot mix: 55 per cent in stock, 35 per cent in bonds, and 10 per cent in cash equivalents. A capital protected scheme is a kind of balanced scheme, where a part of the initial issue proceeds is invested in gilts that would mature to a value equivalent to the unit capital of the scheme. Thus, the investors capital is protected. The remaining issue proceeds (excess over what is required to be invested in gilts for capital protection) is invested in risky investments. In such schemes, an investors worst case scenario is that her investment does not grow. But the principal amount invested is covered by maturity proceeds from the investment in gilt securities. 16
o Physical assets Technically, mutual funds can invest in any asset. This includes real estate, precious metals (gold, silver), other metals (aluminium, steel), oil and commodities. The regulatory framework in India however does not currently permit MFs to invest in physical assets. SEBI is actively considering a proposal to permit schemes that would invest in real estate.
o Index funds Index funds seek to have a position that replicates an identified index, say, BSE Sensex or NSE Nifty. Such a position can be created through either of 2 methods -
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composition of the chosen index. Thus, the stocks in such a funds mutual funds would be the same as are used in calculating the index. The proportion of each stock in the mutual funds too would be the same as the weight of the stock in the calculation of that index.
therefore often called passive funds. Funds that are not passive are managed funds.
Index schemes are also referred to as unmanaged schemes (since they are passive) or
Passive investment places lower demands on the time and efforts of the AMC. All
that is required is a good system that would integrate the valuation of securities (from the market) and information of sales and re-purchases of units (from the registrar) and generate the requisite buy / sell orders. Therefore, management fees for index funds are lower than for managed schemes.
Alternately, a MF, through its research can identify a basket of securities and / or
derivatives whose movement is similar to that of the index. Schemes that invest in such baskets can be viewed as active index funds.
Internationally, MFs have proprietary models that help create baskets that seek to
outperform the market during a boom, while falling lesser in a bearish market.
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The differences with respect to index funds are : A single NAV is applicable for the day in the case of any open-end funds.
Therefore, a single price would be applicable for all investors who buy units of an openend index funds on the day. Similarly, a single price would be recoverable by all investors who wish to exit from an open-end index fund on any day.
ETF, on the other hand, is traded in the market place. Therefore its price keeps This intra-day fluctuation in ETFs appeals to short-term
The ETFs AMC does not offer sale and repurchase prices for the Units. Instead, it
appointsdesignated market intermediaries (market makers) who buy or sell units from the investors.
Thus, an investor who wants to invest in an ETF would go to a market maker who is
expected to offer two-way quotes at all times. An investor who chooses to invest in the ETF would thus know precisely how many units in the ETF she will get against her investment.
The moneys collected from investors would be invested in index scrips by the market These investments would become a part of the ETFs mutual funds.
maker.
Based on two-way quotes of the market maker, the investor would know how much
she would recover if she were to exit from the ETF. On exit, the ETF will release index scrips from its mutual funds, which the market maker would sell to pay the investor.
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Competition between market makers is expected to keep the bid-ask spread low.
This structure also ensures that the AMC does not need to pay a commission to
market intermediaries for bringing investors into the fund. Similarly, there are no loads recovered by the AMC (the concept of loads is discussed in Chapter 6).
Thus, a significant element of cost is eliminated for the investors. Investors only bear
a cost that is implicit in the bid-ask spread. Low expense ratio is an attraction for any investor.
Suppose today many large applications are received in the fund, and tomorrow there are several large redemptions. The fund manager would be under pressure to buy and sell securities in the market to match such sudden inflows and outflows. Besides, most openend funds maintain 5-10% in liquid assets to meet the cash flow requirements for possible redemptions. These factors can pull down returns in an open-end index fund. ETFs, as seen earlier, have a different structure where the fund receives (if investor invests) and gives securities (if investor disinvests). Since such transactions are effected in kind, short-term investments and disinvestments do not affect the performance of the fund. Long-term investors like this feature in ETFs.
On maturity, the scheme would redeem the security and pay the investor. The investor, however, can exit earlier. But what she would recover in an early exit would depend on the market situation at her time of exit.
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Thus, an investor is assured a fixed return, if she stays invested in the scheme for the period originally envisaged. But she also has an earlier exit option, in case she invests in a FMP that is structured as an open-end scheme.
Normally, an assured returns scheme can be offered only if there is a named guarantor who offers the guarantee. A FMP is anassured returns scheme through the back door, since the investor is reasonably assured of the expected return (subject to credit risk and re-investment risk) if she holds the units for the originally envisaged period but the return is assured without a named guarantor.
Further, as explained later in this chapter, mutual funds are tax efficient. The income accrued in the scheme would not bear a tax, and would therefore be revested on gross basis. If the same income were to be received directly by the investor, it would be subject to tax, thus reducing the amount available for re-investment.
When a series of FMPs are issued for different maturities, they are called Serial Funds. These can choose to invest exclusively in government securities, in which case they become Serial Gilts. Alternatively, they can invest in non-government securities, in which case they become Serial Bond SchemesNon-government securities of course have a risk of default (credit risk), which does not exist for government securities.
Hedge funds are leveraged funds where the fund manager invests a mix of funds belonging to its investors (unit capital and reserves) and funds from lenders (borrowed funds). A leveraging of two would mean that for every Re 1 of unit capital, an additional Rs 2 is borrowed, thus investing Rs 3 in the market. Borrowed funds have interest and repayment obligationsthat are independent of how the market performs. Thus, in bad market conditions, a non-leveraged fund only needs to 21
bear a loss; a leveraged fund would also need to generate additional resources to meet the interest and repayment obligations on borrowed funds. However, when the returns on the investment mutual funds are higher than the cost of borrowed funds, investors in a leveraged fund earn super-normal return. The following illustration will explain the concept better: Table 1: RETURN ON MUTUAL FUND UNIT
Scheme : Leverage: Unit Capital (Rs) Loans (Rs) Investible funds (Rs) Interest rate on loan Portfolio Return Earning before interest (Rs) Interest (Rs) Profit (Rs) Return on unit capital
Hedge funds are therefore extremely risky funds; the level of risk being a function of the extent of leveraging. Why then the name hedge fund?
Suppose an investor has a short-sold position of Rs 100 in the market. If the market goes up by 20%, then the investor effectively loses Rs 20.
If such an investor wants to neutralize this short-sold position, she can either purchase stocks worth Rs 100. Or, if she invests in Scheme B in the above example, she only needs to invest Rs 80 to fully reverse her short-sold position of Rs 100. The 25% gain on Rs 80 invested in Scheme C will give her Rs 20 precisely the amount she would lose in her earlier short-sold position.
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Thus, if a person already has an exposure that he wants to reverse, hedge funds help him do that with minimum capital outlay (and therefore cost). Hence the name hedge funds.
As seen in Scheme C, it is also easy for hedge funds to wipe out their profits or even report significant losses.
Thus far, by limiting the scope for borrowing by MFs (as detailed in Chapter 7), the Indian regulatory framework has kept hedge funds out.
Option income
Suppose you would like the right, but not the obligation (an option) to buy 100 shares of Company Z from me at a price of Rs 15 some time in the future. I will give you that option only if you pay me an option premium. (In option market terminology, I would be the writer of that option).The option premium would be my income, because it is not refundable to you. There are 2 implications for me as the option writer:
If the stock of Company Z rises above Rs 15 in the market, you would exercise
your option. in which case I would lose out on the opportunity of gaining from that appreciation (opportunity loss).
If I operate on a fully hedged basis, then I will retain 100 shares of Company Z in
my mutual funds, so that I can offer them if you exercise your option.
Thus, I effectively lose my right to sell the shares (dead asset). During the period that I hold the share, the dividend would belong to me (holding income).
A typical option income fund will earn option premium through writing options on securities where the holding income is attractive enough to retain the security as ]a dead asset. The underlying view of the fund is that holding income plus option premium more 23
than covers for the opportunity loss.Option Income funds are permitted in India, though none has been launched so far.
Offshore funds Offshore funds mobilise moneys from investors for investment outside their country. Indian mutual funds have been permitted to invest in foreign debt securities in countries with fully convertible currencies. The debt instruments, short term or long term, would need to have the highest rating (foreign currency credit rating) by accredited/registered credit rating agencies, say A-1/AAA by Standard & Poor, P-1/AAA by Moodys, F1/AAA by Fitch IBCA, etc. The MF may also invest in government securities where the countries are AAA rated. Indian mutual funds may also invest in the units / securities issued by overseas mutual funds or unit trusts, which invest in the aforesaid securities or are rated as mentioned above and are registered with overseas regulators.For Indian mutual funds as an industry, there is a cap of $500mn on investment in American Depository Receipts (ADR) / Global Depository Receipts (GDR) and foreign securities. Each mutual fund is permitted to invest up to 10% of its net assets as on 31.3.2005. The foreign investment limit for each mutual fund cannot be more than US$50 mn, nor less than US$5mn.
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We are a full spectrum investment management house specializing in online commodity trading. We are one of the earliest members of MCX and pioneers of online commodity broking in TAMILNADU. ATS is promoted by young and dynamic entrepreneurs who have years of proven experience in international derivative markets like NYMEX and worked with several FORTUNE 500 companies. We are the largest online commodity Trading Company in Tamilnadu. Our client base consists of a long list of satisfied institutional and retail client base broking.
MISSION
To provide cost effective Trading, Investment & Risk Management solutions to our ever increasing client base in a professional and ethical way.
SERVICES
Trading & investment access to MCX, NCDEX, NSE, BSE &Currency futures Physical Delivery of commodities Price risk management & Hedging Wealth management with capital protection Research & investment advisory
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RESEARCH GUIDANCE
We provide you with highly successful Trading/Investment calls to enhance your profitability. Our research will guide you in making informed decisions which will make your WEALTH GROW.
PERSONALIZED SERVICE
We understand that each of our clients have unique set of trading requirements. We customize our service package to suit your trading needs
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EQUITY
The section attempts to assist and guide our valuable investors in their decision making process with the thorough company-specific in-depth analysis. Based on the complete evaluation and study of the stocks, done by our highly experienced and efficient research and analytical team, the investors, with different risk appetites, may judge their past, present and likely future position in equity shares. The report covers various aspects like valuation, revenue projection, future financial position of the business, key ratios, trading comparables, market data, current positioning of the company and industry, key developments and other relevant details. To make the information reader friendly and simpler, it is also presented in tabular and graphical forms. Analysis of impact of any important business, economic or political development, on the revenues and margins is conduct to give a clear insight to the investors. Finally an investment call to BUY, SELL, HOLD, or ACCUMULATE is provided by the analyst. Besides, a similar approach is followed in offering industry reports as well.
DERIVATIVES
Derivatives are tools used to hedge position of an investor in a future position. However, in recent times, Futures and Options have also grabbed investors attention in view of their lucrative returns. A daily derivative report is provided in order to give an insight on the day-to-day F&O highlights, overview, pivot table, nifty put call ratio over the month, daily future open interest gainers & losers and recommendation. We also provide information on daily trading strategy in the F&O.
IPO
This includes the extensive coverage of the companies entering the capital market with their Initial Public Offers (IPO). Mostly, investors are unaware regarding the longevity of these companies operations and where will they stand in future. Our IPO report, which incorporates all the relevant information including future earnings forecast, growth and 29
its current market performance, acts as a complete investment guide. Besides, our specialized team also ranks the IPO, in order to make the investment decision simpler.
MUTUAL FUND
The section includes the daily updates in Mutual funds including New Fund Offers, Dividend declaration, buying and selling by Mutual funds in equity as well as in debt market. Besides, it also highlights the in-depth analysis on mutual funds, in which the news and developments, category wise top gainers and over all top gainers schemes, portfolio and scheme analysis of top three schemes are covered along with the updates on NFO and latest dividends.
COMMODITIES
A commodity, the only asset class that is negatively correlated to bonds is a powerful tool for diversification, and has developed into a new opportunity for investors to get heavy returns. With ATS, you can cash on the lucrative opportunity of investing in commodities or the raw materials used to create the products that people really need, demand for which is endless and ever increasing. Our report covers various aspects including Agricultural Commodities, Precious Metals, Base Metals, Energy segment, coupled with the analysis of impact of the global and domestic news. Finally an investment call to BUY, SELL, orHOLD, is provided by the analyst, and a similar approach is followed in offering industry reports as well.
ANNOUNCEMENTS
Daily corporate announcements made by the top companies in the BSE and NSE are covered throughout the day, coupled with the analysts view on the major business events.
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COMPANY INFORMATION
An overall company snapshot captures all the relevant details including contact information, top management, listings, latest financial results, market performance, news, shareholding pattern and announcements.
TRADING GUIDELINES
Equity trading is no more risky, as now ATS is there with you to take care of your investment portfolio by providing assistance in the world of stock markets. We support our customers by providing them timely recommendations, fact based reliable and "dependable" research calls. Bundled with this, we also offer value-added tools and services to our customers to enrich their trading know how.
Investing in equities is considered risky due to the highly volatile nature of stock markets and their dependence on the varied factors ranging from global and domestic economic and political situations.
However, the high returns from equities offset the underlying risk and can become the best option for long term wealth accumulation. Hence, before investing you should always a consult a knowledgeable and experienced expert who will guide you during the course of investment process. We want to explain some trading guidelines, please implement our trading guidelines. Trade management is more important than successful trading tips.
1. Please place stop loss orders in trading system not in your mind, without stop loss don't trade its nothing but suicide attempt.
2. Trade all our tips, do not select our tips. If you have Rs.50,000 rupees, non-risky traders fix your each trade value as Rs.25,000 (50% value of your cash), risky traders fix your each trade value as Rs.50,000(100% value of your cash). 31
3. Book 75% quantity at first target then change stop loss to actual recommended price for remaining quantity, place first target order in advance, sometimes price come and go very quickly. Execute trades very quickly price movements are very sharp in intraday.
4. Small difference is common, you can execute trades with small difference, do not look for exact recommended entry prices and target prices.
5. If you trade all our tips and maintain all trades equal value then only profits and losses will be balanced systematically.
6. Please trade with trading discipline; if we protect our capital with good trading discipline, profits automatically follow otherwise only luck will dominate you. Dont depend on luck.
7. Always trade with 1 lot after recover your principal amount, you can trade as you want.
8. Trade in the most active markets and avoid inactive markets. Also, trade the contract months with the most open interest. They are more liquid.
For example if we buy and stop loss trigger, sell at stop loss price then buy position will become sell position, easy method to reverse to trade: just place double quantity stop loss order
10. Avoid taking small profits and big losses, never add to a losing position.
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1. ATS CLASSIC EQUITY FUND& IMPERIAL FUND TABLE 2: ANALYSIS OF ATS CLASSIC EQUITY FUND & IMPERFUND
Scheme Performance (%) as on FEB 20, 2012 1 Month 3 Months 6 Months 1 Year 3 Years 5 Years Since Inception -2.72 3.96 -34.29 -48.42 -4.05 NA 2.87
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PORTFOLIO
PORTFOLIO ATTRIBUTE P/E P/B Dividend Yield Market Cap (Rs. in crores) 16.48 as on Dec- - 2011 4.75 as on - Dec- 2011 1.48 as on Dec- - 2011 66,387.54 as on Dec- 2011 Large Mid Small Top 5 Holding (%) No. of Stocks Expense Ratio (%) 72.32 as on Jan - 2012 5.45 as on Jan - 2012 NA 32.35 as on Jan - 2012 23 2.33 STYLE BOX
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TOP 10 HOLDINGS
Stock Sector P/E Percentage Qty of Assets Net Value Percentage of Change with month Other Debts Debt Investments Reliance Industries Ltd Oil & Gas, 13.33 8.07 & 131,432 17.40 7.39 NA 12.51 NA 26.95 9.97 last
Petroleum Refinery
Telecom Diversified
-11.42 4.50
95,552
12.62
-3.07
Electricals Ltd
Larsen & Toubro Engineering Limited Industrial Machinery Infosys Technologies Ltd Computers Software Education State India Hindustan Petroleum Corporation Ltd Bajaj Auto Ltd Oil & Bank of Banks
145,648 10.05
29.86
71,204
9.30
17.09
9.13
3.57
66,850
7.69
2.26
3.31
249,600 7.13
4.69
143,256 6.79
21.41
ancilliaries 35
Whats In
Whats out
SECTOR ALLOCATION
Auto & Auto ancilliaries Banks Computers - Software & Education Current Assets Debt Investments Diversified Electricals & Electrical Equipments Engineering & Industrial Machinery Finance Miscellaneous Oil & Gas, Petroleum & Refinery Packaging Pharmaceuticals Plastic Power Generation, Transmission & Equip Steel Telecom 3.15 9.35 4.32 7.93 12.51 6.38 5.86 6.25 5.74 1.79 16.98 1.61 2.92 2.25 2.87 2.72 7.38
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Power Generation, Transmission & Equip Steel 3% 3% Plastic 2% Pharmaceuticals 3% Packaging 2% Oil & Gas, Petroleum & Refinery 17%
Chart Title
Telecom 7% Banks 9%
Current Assets 8%
INTERPRETATION:
Fund Objective; To maximize performance by investing in diversified mutual funds with out any cap bias that can generate long-term capital growth. Fund Investments is not restricted to any particular market sector or company size, thereby investing across all sectors without market capitalization bias covering large-cap, small-cap and mid-cap companies. ATS Classic mutual funds Fund offers you a mutual funds whose core is invested in fundamentally strong companies that may or may not be in current market favour. The 37
1remainder of the mutual funds is invested in companies / sectors that attempt to capture an oncoming market bias ahead of the market rally.
The ground rule quite simply is - a large cap company is relatively much safer as compared to a company with a small-cap. Due to their small size, lack of established brand equity, minimal liquidity, small cap companies are most susceptible to economic and environmental threats.
tracks the performance of companies whose market capitalization falls between 80 -95% of aggregate total market capitalization and the BSE Small-Cap index tracks the performance of remaining 5% companies (95-100%).
All funds have a benchmark (which serves as a basis for comparison) and the investment strategy of the fund decides what kind of companies a fund would invest in.
A fund that invests in small and mid cap companies can also be diversified in the sense that it invests across various industries within the small and mid cap space.
Diversification follows the maxim of not putting all your eggs in one basket. The extent of diversification can though differ. When we say the Classic mutual funds fund has no market cap bias, we are merely referring to the fact that the Fund selects companies irrespective of their market cap. It does so purely on the merit of the companys current performance and future promise it holds. However the fund mindful of its motive of true diversification it would try and ensure that there is no concentration of companies belonging to a particular market cap or a particular industry/ sector.
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By doing so you are merely, and most importantly, temporarily changing your external demeanor and attire but you are certainly not changing your intrinsic character or basic nature. You do so purely to gain instant acceptability and thus profit from it.
Thematic preference
While well-managed companies do perform well in the long run, from time-to-time, there are certain themes that seem to catch investor fancy. And it is this that the Classic mutual funds Fund tries to capture. Carrying forward the analogy to the Classic mutual funds Fund, one could describe this fund as a fu\intrinsic core comprising well-managed companies that hold great promise in the future or the long-term but an adaptable exterior that seeks to dip into the current market sentiment and attempts to profit from it by investing in companies that have caught investor fancy.
Market Preference
For example the BSE Mid-Cap 200 Index scaled its new high in two long rallies of about seven months each between July 2006 and January 2007, and from August 2007 to March 2008. Thus it is not uncommon to hear stocks belonging to a particular sector are performing better as the market anticipates that the build-up of certain market-related, consumer preference related or economy related conditions portend better for some sectors than others. While each of these rallies was driven primarily by the expectations of an upturn in economic activity, the underlying factors and sectoral themes that propelled them were different. First the sector focus was skewed towards pharma and software (global outsourcing story- where the world at large considered India as a cheaper base for 40
manufacturing and delivering service and hence companies that), banking (led by the decline in interest rates) and power (based on power reforms- the power sector caught the fancy of the markets on account of the sector emerging from the regulatory haze and was driven by huge capital investments.).
Sectoral Preference
More recently with the economy growing at 8-9 %, consumption (that is when consumers i.e. people like you and me spend or consume goods and services) was a dominant theme in the markets. And this purely domestic consumption story is one of the few ideas that professional investors are almost unanimously positive aboutTraditionally the universe of stocks that benefited from the consumption theme was restricted to the FMCG sector but no longer. Sectors like retailing, media, tourism, alcoholic beverages, automobiles, telecom and housing too stand to gain during a consumption theme. However within this theme, the performance in the stock market over the past year has been mixed. Obvious beneficiaries of consumption, such as FMCG, retailing and hotels have been underperformers. So it not necessary that all sectors within a theme perform equally well.
The one thing to remember in such market fancies is that companies in such sectors tend to witness a sharper rise in prices in the medium term. Again it is not uncommon for markets to be in an experimental phase for the market, where sectors and stocks may catch investor fancy for a month or quarter, only to be dumped unceremoniously in the next few months.
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Thus a fund that seeks to do just this, that is, predict the next big wave and ride it when it actually develops can have very volatile returns in the short to medium term.
Consistancy
The point therefore is simple. Anticipating the dominant theme and within that the sector is something that even to most professionals is a challenge. Therefore most diversified equity funds prefer cherry-picking robust well-managed companies with a clear eye only on the long term. Such funds therefore tend to under-perform when a particular theme is in vogue and if the stocks in the funds mutual funds do not figure in the current market rally. So while the long term performance may look promising, it is the medium term performance that may suffer.
The Classic mutual funds Fund attempts to plug that and attempts to stay within a band of acceptability by attempting to ensure that a part of its mutual funds stays contemporary by taking medium term exposures in sectors that have caught the market fancy.
The Classic mutual funds Fund does not lose its intrinsic character or basic nature of a diversified equity fund. A large part of the mutual funds comprises companies that are carefully handpicked with a view on the long term but has a small portion that keeps rotating sectors by investing in those sectors and in turn companies that look promising in the medium term. The fund manager of the Classic Fund would attempt to constantly scan the environment and interpret which sectors-and in turn companies-would profit from the build up of prevalent conditions in the near future and thus attempt to invest early on and thus attempt to profit from these investments. Trying to mimic the Classic mutual funds Fund is much like investing a certain percentage of your mutual funds in a core diversified fund and a certain percentage that you keep rotating across sector funds trying to capitalize on the market fancy for a particular sector. Trying to mimic this is easier said than done for often trying to decipher 42
which sector will catch the market fancy is a challenge even to the most seasoned investment professional. The Classic mutual funds Fund attempts to does this for you and does away with the need of having to maintain two different sets of funds one for the very long term and one that takes advantage of the medium term. By attempting to rotate sectors the fund is more in touch with prevalent conditions.
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2. ATS PREMIER EQUITY FUND TABLES 3: ANALYSIS OF ATS PREMIER EQUITY FUND FUND FEATURES
Type of Scheme Nature Option Inception Date Face Value (Rs/Unit) Fund Size in Rs. Cr. Open Ended mutual funds Growth Sep 26, 2008 10 507.68 as on Jan 30, 2012
Dividend NA
5000
Investment (Rs) Purchase Redemptions NAV Calculation Entry Load Daily Amount Bet. 0 to 49999999 then Entry load is 2.25%. and Amount greater than 50000000 then Entry load is 0%. Exit Load If redeemed bet. 0 Year to 1 Year; ; and Amount Bet. 0 to 49999999 then Exit load is 1%. and Amount greater than 50000000 then Exit load is 0%. Daily
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Fund Manager SIP STP SWP Expense ratio(%) Portfolio Turnover Ratio(%)
Kenneth Andrade .
2.43 127
SCHEME PERFORMANCE (%) AS ON FEB 20, 2012 1 Month 3 Months 6 Months 1 Year 3 Years 5 Years Since Inception -1.70 9.18 -26.21 -35.83 NA NA 0.37
RISK
Mean Standard Deviation Sharpe Beta -0.88 5.05 -0.20 0.86
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PORTFOLIO
PORTFOLIO P/E P/B Dividend Yield Market Cap 69,514.24 as on Dec (Rs. crores) Large Mid Small Top Holding (%) No. of Stocks Expense Ratio (%) 20 2.43 75.51 as on Jan - 2012 NA NA 5 31.52 as on Jan - 2012 in 2011 14.89 as on Dec- 2011 2.82 as on Dec - 2011 1.79 as on Dec - 2011 STYLE BOX
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Industries Ltd
Oil & Natural Oil & Gas, 8.79 Gas Ltd Corpn Petroleum & Refinery
6.12
125,000 8.19
63.69
ICICI BANK Banks LTD. Bharti Airtel Telecom Ltd ITC Ltd Tobacco Auto & Auto ancilliaries Banks Indian Cement Pan Masala
11.13 5.94
190,870 7.94
-8.70
16.13 5.40
114,000 7.23
-11.36
109.67
4.74
4.66
Corporation Petroleum & Computers - Software & Education Ltd Current Assets Refinery Infosys Technologies Ltd Ambuja Cements Ltd Computers - 14.05 4.41 Software Education Cement 7.50 4.34 &
75.43
819,000 5.80
1.10
WHATS IN
WHATS OUT
Reliance Petroleum Ltd Maruti Suzuki India Ltd ABB Ltd Sun Pharmaceuticals Industries Ltd
Larsen & Toubro Limited Maruti Udyog Ltd Punjab National Bank
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Debt Investments Electricals & Electrical Equipments Finance Metals Oil & Gas, Petroleum & Refinery Pharmaceuticals Telecom Tobacco & Pan Masala
SECTOR ALLOCATION
Tobacco & Pan Masala 5% Pharmaceuticals 2% Telecom 5%
Chart Title
Banks 16% Oil & Gas, Petroleum & Refinery 24% Metals 1% Finance 2% Electricals & Electrical Equipments 6% Current Assets 13% Debt Investments 11% Cement 4% Computers Software & Education 5%
ASSET ALLOCATION
Mutual funds 75.51 Debt 11.33 Cash & Equivalent 13.16
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INTERPRETATION:
The funds compact mutual funds of large-caps is likely to weather the current market correction better. The one-year return, although at -2.5 per cent, has declined lesser than the diversified fund category average of -14 per cent, suggesting that the mutual funds may have higher tolerance to bear phases. The large-cap tilt also holds promise for a lead rally when the market makes a recovery. However, given the funds short track record of just over two years since its launch in March 2009, investors can avoid fresh exposure to the fund and instead watch its performance against such peers as Sundaram Select Focus or Kotak-30. The funds monthly return pattern since its launch also suggests that while it has managed to contain the downside better than its benchmark BSE-200, the returns on the upside have lagged behind.
SUITABULITY:
ATS Imperial mutual funds provides exposure to stocks of companies that are large in terms of their business as well as market capitalization. To this extent, the fund may be suitable for novice investors looking to enter the equity market through exposure to prominent stocks. The compact mutual funds of less than 25 stocks also allows the fund to take focused bets, which, if timed well, hold potential for higher returns.
PERFORMANCE:
The time of launch did not prove to be very auspicious for the fund as it had to face the May 2009 correction soon after raising funds. However, the correction could have provided a good window of opportunity to enter the market. The funds return of about 11 per cent since its launch in March 2009 is superior to returns generated by diversified funds that were launched during the same period. This
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performance appears reasonable given the bout of corrections and the absence of any prolonged rally since the fund launch. ATS Imperial returned 15 per cent over the last two years, beating its benchmark by two percentage points. However, the monthly return since inception suggests that it has had difficulty in consistently beating the benchmark. While it did so in just 11 of the 26 months since inception, the fund has performed well against the Sensex beating the index over 80 per cent of the times.
PORTFOLIO OVERVIEW:
The fund, as part of its strategy, also seeks to invest in companies that have unlocked potential by hiving off potential businesses and also in companies that are into emerging sectors. The mutual funds holds stocks such as Larsen & Toubro, Suzlon Energy and Gujarat NRE Coke, reflecting the above themes. The fund increased exposure to software and Parma as defensive bets. This has reduced losses after its worst quarterly performance between January-March 2011.
OBJECTIVE
To generate long-term capital growth from an actively managed mutual funds of predominantly equity and equity related instruments. The Scheme mutual funds would acquire, inter alia, small and medium size businesses with good long term potential, which are available at cheap valuations. Such securities would be identified through disciplined fundamental research keeping in view medium to long-term trends in the business environment
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FUND FEATURE
Type of Scheme Nature Option Inception Date Face Value (Rs/Unit) Fund Size in Rs. Cr. Open Ended mutual funds Growth Sep 26, 2008 10 507.68 as on Jan 30, 2012
Fund Manager SIP STP SWP Expense ratio(%) Portfolio Turnover Ratio(%)
Kenneth Andrade .
2.15 21
Last Divdend Declared Minimum Investment (Rs) Purchase Redemptions NAV Calculation Entry Load
NA 25000 Daily Daily Amount Bet. 0 to 49999999 then Entry load is 2.25%.
Exit Load
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Scheme Performance (%) as on FEB 20, 2012 1 Month 3 Months 6 Months 1 Year 3 Years 5 Years Since Inception -1.70 3.69 -37.13 -47.85 3.35 NA 5.60
RISK
Mean Standard Deviation Sharpe Beta -1.12 4.78 -0.26 0.72
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PORTFOLIO
PORTFOLIO ATTRIBUTE
STYLE BOX
P/E
P/B
Dividend Yield
Market Cap (Rs. 3,217.71 in crores) Large Dec - 2011 6.86 as on 2012
Jan -
Mid
Small
Top 5 Holding 26.34 as on Jan (%) No. of Stocks Expense (%) 2012 26
Ratio 2.15
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TOP 10 HOLDINGS
Stock Sector P/E Percentage Qty of Assets Net Value Percentage of Change with month Other Debts Shree Debt Investments NA 17.75 NA 90.11 34.04 8.16 last
Renuka Sugar
29.02 7.52
4,800,000 38.16
Sugars Ltd. Exide Industries Auto Ltd Other Equities Shriram Transport Finance Company Ltd Coromandel Fertilisers Ltd Fertilizers, Pesticides Agrochemicals Blue Express Ltd PTC India Ltd. Power Generation, 16.67 3.63 Transmission Equip Axis Bank Ltd Banks 9.74 3.55 415,000 18.00 -28.67 20.40 & 2,732,004 18.43 -1.88 Dart Miscellaneous 12.75 3.70 432,231 18.80 2.70 & 4.41 3.95 1,846,789 20.07 15.24 & Auto 11.48 5.06 6,317,773 25.68 -13.08
1,313,945 24.72
10.30 3.54
3,000,000 17.97
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SECTOR ALLOCATION
Auto & Auto ancilliaries Banks Cement Computers - Software & Education Consumer Durables Current Assets Debt Investments Electricals & Electrical Equipments Engineering & Industrial Machinery Fertilizers, Pesticides & Agrochemicals Finance Housing & Construction Leather Miscellaneous Oil & Gas, Petroleum & Refinery Power Generation, Transmission & Equip Sugar Textiles Trading Transport & Travel 7.45 3.55 4.56 1.47 2.35 5.84 17.75 3.31 1.58 6.53 6.49 2.71 2.37 8.65 1.14 3.63 11.06 5.15 2.36 2.04
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Oil & Gas, Petroleum & Refinery Pharmaceuticals Housing & 9% 5% Construction 5% Metals Banks 3% 10%
Chart Title
Fertilizers, Pesticides & Agrochemicals 1% Entertainment Engineering & Industrial Machinery 2% 0% Electronics 0% Current Assets 21%
ASSET ALLOCATION
Mutual funds 76.41 Debt 17.75 Cash & Equivalent 5.84
INTERPRETATION
1.start of a period of high growth and profitability. 2. The investments will attempt to capture shifts in the business environment with regard to new business opportunities, new technologies, new trends, etc. 3. The fund has a bias towards a mutual funds of companies which are going to undergo transformational changes in their business prospects. We rely predominantly on in-house primary research of companies in this mutual funds. This requires meeting up with top management, employees, dealers, trade bodies, etc 56
The fund invests in small and medium-sized businesses in emerging segments or markets. This gives the mutual funds a venture-capital feel and makes it riskier than even the typical mid-cap fund. The fund lacks a long track record and, therefore, need not form part of ones core mutual funds. It could, however, complement other mid-cap funds in a mutual funds and help boost overall returns. Investments can be planned in phases, as the fund is likely to encounter a greater degree of volatility than the average diversified fund.
PERFORMANCE:
Premier mutual funds has delivered a return of 26 per cent over the past year, beating benchmark BSE-200 by a whopping 17 percentage points. Its performance is equally impressive against the broader benchmark, the BSE-500. The fund has withstood the turbulent period over the last six months and three months better than the average fund in the diversified equity category. It has shed about 28 per cent of its value since the beginning of the year, in line with the BSE-500. The net asset value has doubled since its launch in October 2008, while the BSE-500 has gained 75 per cent in absolute terms. However, Premier mutual funds has witnessed periodic bouts of underperformance and even sharp slides in value as several stocks in the mutual funds enjoy expensive valuations and are more vulnerable to a meltdown.
PORTFOLIO OVERVIEW:
The fund follows a bottom-up approach to investing. The latest mutual funds does not reveal any sector biases. Investments are stock-specific and the fund takes measured exposures to stocks. The top ten stocks account for about 45 per cent of the mutual funds. The latest mutual funds, as on April 30, 2011, sported about 27 stocks. The fund appears to favour stocks that have a niche within their category or are leaders in emerging categories. Within a mature sector such as FMCG, for instance, the fund has
57
homed in on Jyothy Laboratories. Stocks such as Alphageo, Entertainment Network, Time Technoplast, Vimta Labs, Educomp Solutions, Onmobile Global and 3M India are stocks with leadership status in nascent segments. Many of these stocks have delivered significant returns over the past year and trade at premium valuations. In the near term, these stocks may remain range-bound as investors stay away from richly valued stocks. However, from a long-term perspective, they continue to hold promise. Importantly, the ability to continue to pick such stocks ahead of the market would be key to sustaining the funds performance. Premier mutual funds does not have a specific mid-cap mandate, but the fund is inherently mid-cap biased. It, however, periodically curtails inflows into the fund to ensure that it remains at a manageable size. This offers some protection to investors as it ensures that the fund sticks to its original mandate.
OBJECTIVE
To generate long-term capital growth from an actively managed mutual funds of predominantly equity and equity related instruments. The Scheme mutual funds would acquire, inter alia, small and medium size businesses with good long term potential, which are available at cheap valuations. Such securities would be identified through disciplined fundamental research keeping in view medium to long-term trends in the business environment.
58
Last Divdend Declared Minimum Investment (Rs) Purchase Redemptions NAV Calculation Entry Load Exit Load
NA 5000 Daily Daily Entry Load is 0%. If redeemed bet. 0 Days to 30 Days; Exit load is 0.25%.
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RISK RETURN
Scheme Performance (%) as on Feb 20, 2012 1 Month 3 Months 6 Months 1 Year 3 Years 5 Years Since Inception 0.23 1.49 3.99 6.33 NA NA 7.96
RISK
Mean Standard Deviation Sharpe Beta 0.12 0.25 0.13 0.22
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PORTFOLIO
PORTFOLIO PERRFORMANCE STYLE BOX
P/E
P/B
Dividend Yield
Market Cap (Rs. in 30,740.92 as on Dec crores) Large - 2011 35.86 as on Jan2012 Mid 31.45 as on Jan 2012 Small Top 5 Holding (%) 1.50 as on Jan - 2012 16.11 as on Jan 2012 No. of Stocks Expense Ratio (%) 105 1.75
WHATS IN Chambal Fertilisers & Chemicals Ltd Jet Airways India Ltd Jindal Steel and Power Ltd. Industrial Development Bank of India Ltd
WHATS OUT IBN18 Broadcast Ltd. Wire and Wireless India Ltd. Satyam Computer Services Ltd Associated Cement Companies Ltd
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TOP 10 HOLDINGS
Stock Sector P/E Percentage Qty of Assets Net Value Percentage of Change with month Other Debts Global Debt Investments NA 14.46 NA 521,530 43.73 11.58 93.14 6.88 last
Tele- Telecom
19.08 3.83
Systems Ltd Ultratech Cement Ltd. ITC Ltd Tobacco & Pan 21.26 3.44 Masala Balrampur Chini Ltd Hindustan Petroleum Corporation Ltd Ranbaxy Laboratories Ltd Bharat Heavy Electricals Electricals Ltd Electrical Equipments JaiPrakash Associates Ltd. Hindalco Industries Ltd Housing Construction Metals 3.34 1.91 1,179,469 5.77 234.34 & 12.78 1.99 788,250 6.01 747.41 & 22.36 2.04 46,701 6.17 312.55 Pharmaceuticals -6.16 2.08 291,962 6.30 -32.72 Oil & Gas, -0.47 & 2.20 232,700 6.65 4.74 Mills Sugar 10.30 2.73 1,377,600 8.25 13.09 578,250 10.41 63.38 Cement 5.19 3.53 269,200 10.66 2.72
Petroleum Refinery
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SECTOR ALLOCATION
Auto & Auto ancilliaries Banks Cement Chemicals Computers - Software & Education Consumer Durables Current Assets Debt Investments Diversified Electricals & Electrical Equipments Electronics Engineering & Industrial Machinery Entertainment Fertilizers, Pesticides & Agrochemicals Finance Hotels & Resorts Housing & Construction Metals Oil & Gas, Petroleum & Refinery Pharmaceuticals Power Generation, Transmission & Equip Steel Sugar Telecom Textiles Tobacco & Pan Masala Transport & Travel 1.30 8.08 6.10 1.54 3.63 0.40 16.68 14.46 0.32 2.10 0.04 1.66 0.15 0.99 3.27 0.24 3.91 2.09 6.89 4.11 4.15 2.81 3.43 6.16 0.70 3.83 0.96
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Chart Title
Oil & Gas, Petroleum & Housing & Refinery Construction 9% Metals 5% 3% Hotels & Resorts 0% Fertilizers, Finance Pesticides & 4% Agrochemicals 1% Entertainment 0% Engineering & Industrial Machinery 2% Electronics 0% Electricals & Electrical Equipments 3% Pharmaceuticals 5%
Consumer Durables 1%
Diversified 0%
ASSET ALLOCATION
mutual funds 68.86 Debt 14.47 Cash & Equivalent 16.67
INTERPRETATION
The ATS Arbitrage Fund is a fund that invests predominantly in arbitrage opportunities in the cash and the derivative segments of the equity markets. As an open ended equity fund, it offers the tax benefits that equity schemes enjoy and with up to 35% allocation in debt and money market instruments, the fund has relatively low investment risk.
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6. ATS TAX SAVER (ATSTS) TABLES 5: ANALYSIS OF ATS TAX SAVER (ATSTS) FUND FEATURES
Type of Scheme Nature Option Inception Date Face Value (Rs/Unit) Fund Size in Rs. Cr. Close Ended mutual funds Growth Feb 23, 2010 10 42.99 as on Jan 30, 2012
Fund Manager SIP STP SWP Expense ratio(%) Portfolio Turnover Ratio(%)
Ajay Bodke .
2.43 55
Last Divdend Declared Minimum Investment (Rs) Purchase Redemptions NAV Calculation Entry Load Exit Load
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RETURNS
Scheme Performance (%) as on FEB 20, 2012 1 Month 3 Months 6 Months 1 Year 3 Years 5 Years Since Inception -2.18 4.24 -34.21 -49.62 NA NA -17.22
RISK
Mean Standard Deviation Sharpe Beta -0.27 0.81 -1.28 5.06
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PORTFOLIO
PORTFOLIO ATTRIBUTES
STYLE BOX
P/E
P/B
Dividend Yield
Market Cap (Rs. 61,425.07 as on in crores) Large Dec - 2011 70.60 as on Jan2012 Mid 14.57 as on Jan 2012 Small Top (%) No. of Stocks Expense (%) 5 NA Holding 30.39 as on Jan 2012 23
Ratio 2.43
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TOP 10 HOLDINGS
Stock Sector P/E Percen tage of Net Assets Reliance Industries Ltd Oil & Gas, Petroleum & 13.33 Refinery 9.13 6.87 25,640 2.95 -10.73 7.95 25,806 3.42 Qty Value Percentage of Change last
State Bank of Banks India HDFC Ltd Exide Industries Auto & Auto ancilliaries Ltd Hindustan Petroleum Corporation Ltd Hindustan Unilever Ltd NTPC Limited. Power Diversified Bank Banks
18.86
6.17
28,660
2.65
-7.38
11.48
4.86
513,460 2.09
-15.70
4.56
68,500
1.96
4.87
27.23
4.46
73,202
1.92
4.79
Generation, 21.04
4.42
100,245 1.90
4.95
Transmission & Equip Larsen & Engineering Industrial Machinery Computers - Software & Education 14.05 3.82 12,558 1.64 17.08 & 15.93 3.90 24,308 1.68 48.63
22.36
3.79
12,350
1.63
-3.14
Electricals Ltd
69
SECTOR ALLOCATION
Auto & Auto ancilliaries Banks Cement Computers - Software & Education Current Assets Diversified Electricals & Electrical Equipments Engineering & Industrial Machinery Finance Miscellaneous Oil & Gas, Petroleum & Refinery Packaging Pharmaceuticals Plastic Power Generation, Transmission & Equip Steel Telecom 7.92 14.97 2.59 3.82 14.39 4.46 3.79 6.73 5.75 0.45 15.61 2.60 3.72 1.69 4.42 3.34 3.74
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Steel 3%
Telecom 4%
Banks 15%
Oil & Gas, Petroleum & Refinery 16% Current Assets 14% Miscellaneous 0% Finance 6% Engineering & Industrial Machinery 7%
Diversified 4%
ASSET ALLOCATION
mutual funds 85.61 Debt 0.00 Cash & Equivalent 14.39
INTERPRETATION
ATS Tax Saver (ATSTS) Scheme is a ten year old equity linked savings scheme. It is a scheme formulated under the mutual funds Linked Savings Scheme, 2008, issued by the Indian Central Government. Accordingly, investment made by individuals, HUFs and / or specified category of BOI / AOPs (as per ATSTS notification) in the Scheme up to a sum of Rs. 100,000 in a financial year would qualify for deduction under Section 80-C of the
71
Act.Investors other than these specified investors shall not qualify for the tax benefit as mentioned under Section 80-C of the Income Tax Act. The investment objective of the Scheme is to seek to generate long-term capital growth from a diversified mutual funds of predominantly equity and equity-related securities. In accordance with ATSTS, investments in equity and equity related instruments shall be to the extent of at least 80% of net assets of the Scheme.Investments in the scheme shall be locked in for a period of 3 years from the date of allotment.
HOW TO REDEEM?
Units can be redeemed / switched out only after the expiry of lock-in period of three years. Thereafter the Units can be redeemed (i.e., sold back to the Fund), at the Applicable NAV (hereinafter defined) on relevant business days. Repurchase facility is available on all business days on completion of lock in period of 3 years from the date of allotment.The lock in period may be changed prospectively if so permitted by the applicable regulations (SEBI Regulations and the ATSTS guidelines). A Unit holder may request redemption of a specified amount or a specified number of Units, (subject to the minimum redemption amount which is presently in multiples of Rs. 500/-) the number of Units specified will be considered for deciding the redemption amount.
OBJECTIVE
The investment objective of the Scheme is to seek to generate long-term capital growth from a diversified mutual funds of predominantly equity and equity-related securities.
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SUGESSTION 1. The Mutual Funds Manager has to spend more on advertisement and other promotional activities to create awareness among the public 2. The Mutual Funds Manager has to introduce some new schemes and offers in the market to increase the sale of Mutual Funds. 3. The equity fund is very high risky, so during the depressed economy they should inform to investors and put them in some other schemes which give them reasonable returns. 4. The Mutual Funds booklet should have to issue to each investor, in order to get a clear cut idea about Mutual Funds. 5. It has to maintain better services to capture the market.
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CONCLUSION
The Mutual Fund there by collects money or funds from a group of people with similar investment goals. The Mutual Fund scheme is well known to a good percentage of population.
The advertisement has become an effective tool to wake public awareness. The switching off from the Mutual Funds is very Low. The investment Manager has to guide the investors to choose the correct Mutual Funds, which they prefer.
Furthermore, to conclude we can say that mutual fund is a very much profitable tool for investment because of its low cost of acquiring fund, tax benefit, and diversification of profits & reduction of risk.
Many investors who have invested in mutual fund have invested with ATS and them also thinks that it provides better returns. Finally, to conclude we can say mutual fund is a best investment vehicle for old & widow, as well as to those who want regular returns on their investment. Mutual fund is also better and preferable for those who want their capital appreciation.
Both the companies are doing considerable achievements in mutual fund industry. There are also so many competitors involved those affect the company.
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OF
OF PLACE PUBLISHERS
YEAR
G.j,
Sharpe, Fundamentals of PHI 3RD Ed. Investments Investment Introduction an Thomson Western 9th Ed. TMH of
2010
2010
Prasanna Chandra
2010
V.K. BHALLA
1st Ed
2010
S.NO 1 2 3 4 5 6 7 8 9
WEBSITES http://www.valueresearchonline.com/funds/amclist.asp www.adityatrading.in http://www.moneycontrol.com/mf/returns.php http://www.investopedia.com/articles/mutualfund/ http://finance.indiamart.com/india_business_information/mutual_funds_concept.html http://finance.indiamart.com/india_business_information/drawbacks_of_mutual_funds.in http://sify.com/finance/mf/moreheadlines.php?ctid=2&cid=20803 www.mutualfundsindia.com www.sify.com/finance
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