A

PROJECT REPORT
ON

Fundamental and Technical Analysis of

Mutual Funds
AT
MOTILAL OSWAL SECURITIES LTD.

SUBMITTED
BY
CHANKI .H. DARJI

TO
UNIVERSITY OF PUNE

In Partial Fulfillment of the Master of Business Administration

Degree Course

PROJECT GUIDE
Prof. SONALI SARIPALLI

Sinhgad Institute of Business Administration

And Research
2011-13

CERTIFICATE
This is to certify thatMr.ChankiHasmukhbhaiDarjistudent of SINHGAD
INSTITUTE OF BUSINESS ADMINISTRATION & RESEARCH, Pune has
completed her work report atMotilalOswal Securities Ltd.PUNEon the topic of
Fundamental & Technical Analysis of Mutual Funds And has to be
submitted the work report in partial fulfillment of Master in Business Administration of
the UNIVERSITY OF PUNE for the academic year 2011-2013.
He has worked under our guidance and direction. The said report is based on
bonfide information.

Prof. SonaliSaripalliProf. Avadhoot D. Pol Project Guide

Date:Place:-

Director

DECLARATION

I hereby declare that the project titled Fundamental and Technical Analysis of
Mutual Funds.is an original piece of research work carried out by me under the
guidance and supervision of Prof. SonaliSaripalli. The information has been collected
from genuine & authentic sources. The work has been submitted in partial fulfillment of
the requirement of Master of Business Administration under University of Pune.

Signature:
Place:
Date:

Name of the student:

Mr. ChankiHasmukhbhaiDarji

Acknowledgement

This is to gratefully acknowledge the contribution of all who have helped

me out during this project.
This project has been developed in close cooperation with the kind support and help of
many individuals and organization. I would like to extend my sincere thanks to all of
them.
I am highly indebted to Mrs. Swati Marathe for their guidance and constant supervision
as well as for providing necessary information regarding the project & also for their
support in completing the project.

I would like to express my gratitude towards my parents & member of Motilal Oswal
Securities Ltd. for their kind co-operation and encouragement which help me in
completion of this project.

I would like to express my special gratitude and thanks to industry persons for giving me
such attention and time.

My thanks and appreciations also go to my colleague in developing the project and

people who have willingly helped me out with their abilities.

Sr. No.
1

Topic

Page
No.

INTRODUCTION
Introduction of topic

Company Profile

11

Statement of problem

13

Objective of the study

14

Research Methodology

15

Limitations

16

CONCEPTUAL METHODOLOGY

17

Literature Review

18

Concepts and Definitions

19

Fundamental analysis

26

Technical Analysis

29
46

DATA PRESENTATION, ANALYSIS

AND INTERPRETATION

FINDINGS

57

SUGGESTIONS

59

CONCLUSION

61

ANNEXEURE

63

BIBLIOGRAPHY

68

Executive Summary
This project is done at MotilalOswal Securities Ltd., Pune, as a part of MBA
program with the objective to study and analyze a company with the objective of
investing in the securities of the company so as to get maximum returns.
The Mutual Fund gives unbelievable returns if invested for long term. Investment
decisions are of critical nature and there by a major part of the population shys away
from the investment s in the mutual Funds
The project serves as a guide line to naive as well as investors to choose the right
mutual fund to strengthen the portfolio. Fundamental and Technical Analysis are used as
tools to choose the right script, thereby formulating a strong investment strategy.
While Fundamental and Technical analysis are useful tools in the hands of an Analyst,
one should understand that the mutual fund is majorly by market sentiments. Market
sentiments are nothing but human psychological behavior that decides the market prices
of a particular company. For investment Analysis of a company its EPS, P/E analysis,
Market Capitalization, promoters and institutional holdings, Management control as well
as the future growth prospects of the company are scrutinized to arrive at a script that will
maximize return at minimum risk. With the help of Fundamental Analysis the projection
regarding the companys future potential can be evaluated, thereby creating a strong
interest amongst the investors.Technical Analysis goes one step ahead to enable us to
time the market for maximum return on investment.

INTRODUCTION

Introduction
A mutual fund is a financial intermediary that pools the savings of investors for collective
investment in a diversified portfolio of securities. A fund is mutual as all of its returns,
minus its expenses, are shared by the funds investors.
The Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 defines a
mutual fund as a a fund established in the form of a trust to raise money 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. According to the above definition, a
mutual fund in India can raise resources through sale of units to the public. It can be set
up in the form of a Trust under the Indian Trust Act.
A mutual fund serves as a link between the investor and the securities market by
mobilizing savings from the investors and investing them in the securities market to
generate returns. Thus, a mutual fund is akin to portfolio management services (PMS).
Although, both are conceptually same, they are different from each other. Portfolio
management services are offered to high net worth individuals; taking into account their
risk profile, their investments are managed separately. In the case of mutual funds,
savings of small investors are pooled under a scheme and the returns are distributed in the
same proportion in which the investments are made by the investors/unit-holders.
Mutual fund is a collective savings scheme. Mutual funds play an important role in
mobilizing the savings of small investors and channelizing the same for productive
ventures in the Indian economy.

What are Mutual Funds?

A mutual fund is nothing more than a collection of stocks and/or bonds. You can think of
a mutual fund as a company that brings together a group of people and invests their
money in stocks, bonds, and other securities. Each investor owns shares, which represent
a portion of the holdings of the fund.
A mutual fund is a type of professionally-managed collective investment scheme that
pools money from many investors to purchase securities.

Mutual funds have advantages compared to direct investing in individual

securities. These include:

Increased diversification

Daily liquidity

Professional investment management

Ability to participate in investments that may be available only to larger investors

Service and convenience

Government oversight

Ease of comparison

Mutual funds have disadvantages as well, which include

Fees

Less control over timing of recognition of gains

Less predictable income

No opportunity to customize

You can make money from a mutual fund in three ways:

1) Income is earned from dividends on stocks and interest on bonds. A fund pays out
nearly all of the income it receives over the year to fund owners in the form of a
distribution.

2) If the fund sells securities that have increased in price, the fund has a capital gain.

3) If fund holdings increase in price but are not sold by the fund manager, the fund's
shares increase in price. You can then sell your mutual fund shares for a profit.

Company Profile

MotilalOswal Securities Ltd. (MOSL) was founded in 1987 as a small sub-broking unit,
with just two people running the show. Focus on customer-first-attitude, ethical and
transparent business practices, respect for professionalism, research-based value investing
and implementation of cutting-edge technology has enabled us to blossom into an over
1600 member team.
Today we are a well diversified financial services firm offering a range of financial
products and services such as Wealth Management, Broking & Distribution, Commodity
Broking, Portfolio

Management

Services,

Institutional

Equities, Private

Equity, Investment Banking Services and Principal Strategies.

We have a diversified client base that includes retail customers (including High Net
worth Individuals), mutual funds, foreign institutional investors, financial institutions and
corporate clients. We are headquartered in Mumbai and as of June 30th, 2012, had a
network spread over 548 cities and towns comprising 1,565 Business Locations operated
by our Business Partners and us.
As at June 30th, 2012, we had 749,745 registered customers

Companies Core Businesses

Statement ofthe Problem

To study the major fundamental and technical factors along with some other
factors such as social and geographical with a view to facilitate a common investor with
the tools to take a wise decisions and maximize his returns on investments in mutual
funds.

Objectives of the study

An investors point of view behind investing in any instrument is to foster and
channelize the savings to their most efficient use. An investor should allocate his funds in
such a way that should yield him optimal returns.

The broad Objectives of the study being:

To enable a common investors to make his investment decision in mutual funds

simple.

To make an investment in mutual fund as safe & secure as possible.

To study the tools of fundamental analysis

To study the terms of Technical Analysis. To study the strategy that one should
use to make buying or selling decision with the help of technical Charts.

Research Methodology
Every project is stared with the objective of getting results either positive or negative and
each and every project reaches to the stage of completion through the way of some
research either with the help of primary data or secondary data. And getting of any
project and getting genuine results from is depended on the research methodology used
by the researcher.

Objective of the Research

Primary Objective:

To do technical and fundamental analysis of chosen securities

Sub-Objectives:

1) To study the various theories of technical analysis and fundamental analysis for
various mutual funds that chosen.

2) To understand the movement performance of mutual funds to take decision to invest.

3) To understand and analyze the factors affecting the movement of mutual fund prices in
the Indian Market.

Limitations of the study:

Taking about the two broad patterns of analysis which are to be studied in further
topics, following are few limitations of the study:

Time for the study was given limited

Technical analysis are done with the help of computerized utilities & integrated
software, it is a bit difficult for a new investor to understand the logic behind the
movements of charts without a thorough study.

Technical analysis is not a fool proof study and it considers only the price
movements and the volumes.

Identifying the pattern plays a major role.

In fundamental analysis, companies employ investor relationship managers

specifically to handle the analyst community and release information. While
estimating, there can be lies, lies and real lies.

There can always be analyst bias.

The project is based on study of limited company

CONCEPTUAL
METHODOLOGY

Literature Review

A Mutual Fund is a trust that pools the savings of a number of investors who share a
common financial goal. The money thus collected is then invested in capital market
instruments such as shares, debentures and other securities. The income earned through
these investments and the capital appreciation realized is shared by its unit holders in
proportion to the number of units owned by them. Thus a Mutual Fund is the most
suitable investment for the common man as it offers an opportunity to invest in a
diversified, professionally managed basket of securities at a relatively low cost.
The term mutual fund is less widely used outside of the United States. For collective
investment schemes outside of the United States, see articles on specific types of funds
including open-ended investment companies, sicavs, unitized insurance funds, unit trusts
and Undertakings for Collective Investment in Transferable Securities.
Literature on mutual fund performance evaluation is enormous. A few research studies
that have influenced the preparation of this paper substantially are discussed in this
section. Sharpe, William F. (1966) suggested a measure for the evaluation of
portfolio performance. Drawing on results obtained in the field of portfolio
analysis, economist Jack L. Trey nor has suggested a new predictor of mutual fund
performance, one that differs from virtually all those used previously by
incorporating the volatility of a fund's return in a simple yet meaningful
manner.

Concepts and Definitions

Mutual Funds Concept

A Mutual Fund is a trust that pools the savings of a number of investors who share a
common financial goal. The money thus collected is then invested in capital market
instruments such as shares, debentures and other securities. The income earned through
these investments and the capital appreciations realized are shared by its unit holders in
proportion to the number of units owned by them. Thus a Mutual Fund is the most
suitable investment for the common man as it offers an opportunity to invest in a
diversified, professionally managed basket of securities at a relatively low cost. The flow
chart below describes broadly the working of a mutual fund:

Mutual Fund Operation Flow Chart

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. The table below gives an overview
into the existing types of schemes in the Industry.

TYPES OF MUTUAL FUND SCHEMES

By Structure
o

Open - Ended Schemes

Close - Ended Schemes

Interval Schemes

By Investment Objective
o

Growth Schemes

Income Schemes

Balanced Schemes

Money Market Schemes

Types of mutual funds

1)

Equity Funds

This type of mutual fund makes investments in the stocks of companies listed on major
share markets. Equity Mutual Funds help in shielding unseasoned investors from the risk
they would have incurred if they had directly invested in the stock market. The fund
manager makes the investment decisions for the investor.

In Equity mutual funds, the fund portfolio may be mixed, having stocks from various
sectors or they may concentrate on a particular sectors. They may also tilt towards large
cap or mid cap stocks. Fund information may list the stocks invested by the fund and may
also give their weight age. For example the Sundaram Paribas Equity - CAPEX
Opportunities Fund (a mutual fund operating in India) has a large-cap stock tilted in its
fund portfolio (as on Oct 2007).

2)

Debt funds

Debt mutual funds include bonds issued by the Government and other institutions in their
fund portfolio. The portfolio of the mutual fund may include investments in a mix of
Government securities, corporate bonds, and Public Sector Unit (PSU) bonds as also
securitized debt.
Bonds are more secure than shares as they are usually fixed-interest, though not always.
Investments in government bond are also said to be a refuge of stability. This is ideal for
those investors looking for low risk, high stability and regular income.

The mutual fund portfolio can be studied to see the percentage of investments in various
types of bonds. For example, the Templeton Global Bond Fund invests in bonds of many
countries such as Korea Treasury Bonds, Government of Sweden Bonds etc.

3)

Money Market Funds

The money market consists of short-term debt instruments, mostly Treasury bills. This is
a safe place to park your money. You won't get great returns, but you won't have to worry
about losing your principal. A typical return is twice the amount you would earn in a
regular checking/savings account and a little less than the average certificate of
deposit (CD).

4)

Income Funds

Income funds are named appropriately: their purpose is to provide current income on a
steady basis. When referring to mutual funds, the terms "fixed-income," "bond," and
"income" are synonymous. These terms denote funds that invest primarily in government
and corporate debt. While fund holdings may appreciate in value, the primary objective
of these funds is to provide a steady cash flow to investors. As such, the audience for
these funds consists of conservative investors and retirees.

Phases of Mutual Funds

Mutual Funds Industry in India
The origin of mutual fund industry in India is with the introduction of the concept of
mutual fund by UTI in the year 1963. Though the growth was slow, but it accelerated
from the year 1987 when non-UTI players entered the industry.The mutual fund industry
can be broadly put into four phases according to the development of the sector. Each
phase is briefly described as under.

First Phase - 1964-87

Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up
by the Reserve Bank of India and functioned under the Regulatory and administrative
control of the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the
Industrial Development Bank of India (IDBI) took over the regulatory and administrative
control in place of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the
end of 1988 UTI had Rs.6,700crs of assets under management.

Third Phase - 1993-2003 (Entry of Private Sector Funds)

With the entry of private sector funds in 1993, a new era started in the Indian mutual fund
industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the
year in which the first Mutual Fund Regulations came into being, under which all mutual
funds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer
(now merged with Franklin Templeton) was the first private sector mutual fund registered
in July 1993.
The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive
and revised Mutual Fund Regulations in 1996. The industry now functions under the
SEBI (Mutual Fund) Regulations 1996.

Fourth Phase - since February 2003

This phase had bitter experience for UTI. It was bifurcated into two separate entities. One
is the Specified Undertaking of the Unit Trust of India with AUM of Rs.29,835crores (as
on January 2003). The Specified Undertaking of Unit Trust of India, functioning under an
administrator and under the rules framed by Government of India and does not come
under the purview of the Mutual Fund Regulations.
With the bifurcation of the erstwhile UTI which had in March 2000 more than
Rs.76,000crores of AUM 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, 2004, there were 29 funds, which
manage assets of Rs.153108 crores under 421 schemes.

Major Mutual Fund Companies in India

ABN AMRO Mutual Fund
ABN AMRO Mutual Fund was setup on April 15, 2004 with ABN AMRO Trustee
(India) Pvt. Ltd. as the Trustee Company.

Birla Sun Life Mutual Fund

Birla Sun Life Mutual Fund is the joint venture of Aditya Birla Group and Sun Life
Financial. Sun Life Financial is a global organization evolved in 1871 and is being
represented in Canada, the US, the Philippines, Japan, Indonesia and Bermuda apart from
India.

Bank of Baroda Mutual Fund (BOB Mutual Fund)

Bank of Baroda Mutual Fund or BOB Mutual Fund was setup on October 30, 1992 under
the sponsorship of Bank of Baroda.

HDFC Mutual Fund

HDFC Mutual Fund was setup on June 30, 2000 with two sponsorersnamely Housing
Development Finance Corporation Limited and Standard Life Investments Limited.

HSBC Mutual Fund

HSBC Mutual Fund was setup on May 27, 2002 with HSBC Securities and Capital
Markets (India) Private Limited as the sponsor. Board of Trustees, HSBC Mutual Fund
acts as the Trustee Company of HSBC Mutual Fund.

ING Vysya Mutual Fund

ING Vysya Mutual Fund was setup on February 11, 1999 with the same named Trustee
Company. It is a joint venture of Vysya and ING.

Prudential ICICI Mutual Fund

The mutual fund of ICICI is a joint venture with Prudential Plc. of America, one of the
largest life insurance companies in the US of A. Prudential ICICI Mutual Fund was setup
on 13th of October, 1993 with two sponsorers, Prudential Plc. and ICICI Ltd.

State Bank of India Mutual Fund (SBI)

State Bank of India Mutual Fund is the first Bank sponsored Mutual Fund to launch
offshore fund, the India Magnum Fund with a corpus of Rs. 225 cr. approximately.

Tata Mutual Fund

Tata Mutual Fund (TMF) is a Trust under the Indian Trust Act, 1882. The sponsors for
Tata Mutual Fund are Tata Sons Ltd., and Tata Investment Corporation Ltd.

Fundamental Analysis
Meaning:-Fundamental analysis attempts to find the actual value of a stocki.e., its ability
to generate future cash flows to make investment decisions and focuses on a company's
financial results. Specifically, fundamental analysis emphasizes forecasts of
company's earnings and revenue growth rates, valuation ratios like price to earnings, and
financial ratios like profit margins.
Fundamental analysis also looks to conditions in the industry sector(s) in which
the company operates and the broader economic outlook.
Tools of fundamental analysis

Equity Share Capital

Equity Capital = FV * No. of shares

Always invest in large equity companies. The equity capital has to be

compared in peer group of companies only.

E.g. equity capital of an auto company should be compared with the equity capital
of auto companies only and not with equity capital of IT Companies. Invest in the
company having large equity capital compared to other companies of the same
sector.

Earnings Per Share (EPS)

EPS = Net profit / No. of shares

It is a self comparative tool. EPS of one company should not be compared with EPS of
another company even if they are from same sector.

Market Capitalization
Market Capitalization = Current Market Price 8 * No. of shares

According to market capitalization companies are divided as follows:

1. Large Cap companies: having market capital greater than 7500Cr.

2. Mid Cap companies: having market capital between 500Cr to 7500Cr.
3. Small Cap companies: having market capital less than 500Cr.
4. More than 80% should be invested in large Cap companies.

Earnings

The amount of profit that a company produces during a specific period,which is usually
defined as a quarter or a year. Earnings typically refer to after-tax net income. Ultimately,
a business's earnings are the main determinant of its share price, because earnings and
the circumstances relating to them can indicate whether the business will be profitable
and successful in the long run.

There are two ways of checking a companys earning.

1. Year to year comparison study: Net profits of the current financial year are to
be compared with the net profits of previous financial year. It gives a bigger
picture of the companys performance.

2. Quarter on Quarter comparison study: The earnings of quarter of the current

financial year are compared with the earnings of the quarter of the previous
financial year.

Bonus

A company gives bonus in the form of shares only. It is given in some ratio of what share
holders are holding. It is in the ratio of free holdings 1:2 means the company will give 1
bonus share for every 2 holdings.

Price to Earnings Ratio (P/E Ratio)

P/E = Share Price / EPS

Hence, share price P/E * EPS
In general, a high P/E suggests that investors are expecting higher earnings growth in the
future compared to companies with a lower P/E. However, the P/E ratio doesn't tell us the
whole story by itself. It's usually more useful to compare the P/E ratios of one company
to other companies in the same industry, to the market in general or against the
company's own historical P/E. It would not be useful for investors using the P/E ratio as a
basis for their investment to compare the P/E of a technology company (high P/E) to a
utility company (low P/E) as each industry has much different growth prospects.
E.g. the share having P/E multiple 20 and trading at market price 80/- is costly than the
share having P/E multiple 5 and trading at market price 550/-. It means that in the first
case we are paying 20times the earnings and in the second case we are paying 5times the
earnings.

Dividend

Dividend is the small portion of the net profits, what company decides to distribute to its
shareholders. It is always calculated on FV in terms of percentage. It shows goodwill of
the company towards it shareholders.

Technical Analysis

Meaning: A method of evaluating securities by analyzing statistics generated by market

activity, such as past prices and volume. Technical analysts do not attempt to measure a
security's intrinsic value, but instead use charts and other tools to identify patterns that
can suggest future activity.
Technical analysts believe that the historical performance of stocks and markets are
indications of future performance.

In a shopping mall, a fundamental analyst would go to each store, study the product that
was being sold, and then decide whether to buy it or not. By contrast, a technical analyst
would sit on a bench in the mall and watch people go into the stores. Disregarding the
intrinsic value of the products in the store, the technical analyst's decision would be based
on the patterns or activity of people going into each store.

The field of technical analysis is based on three assumptions:

1

The market discounts everything.

Price moves in trend.

History tends to repeat itself.

Concepts relating to study topics:

- Price
Price in terms Technical Analysis is an interaction of demand and supply. The
price of a security depends on the expectation of the buyer and seller. If the investor
expects the price to rise, he will buy the security else he will sell it.

- Opening Price
This is price of the first trade for the period. When analyzing daily data, the open
price is especially important as it is the consensus price after all interested parties were
able to sleep on it

- High
This is a highest price that security traded during the period. It is the point at
which there were more buyers.

- Low
This is a lowest price that security traded during the period. It is the point at
which there were mare sellers.

- Close
This is a last price that the security traded during the period. Due to its
availability, the close is most often used price for analysis. The relationship between the
first price (open) & the last (close) is considered significant by most technicians. The
relationship is emphases in candlestick charts.

- Volume
Volume means number of transaction takes place at given price for given period
of time.

Chart Patterns & Technical Analysis

Chart Patterns are graphical representations of historical stock prices which help to
determine current supply and demand forces in a stock. Chart pattern analysis allows a
trader to determine with more accuracy just what the current supply and demand is in a
stock. Chart patterns are graphical representations of historical stock prices which form
repeating patterns or shapes, and are commonly used in the stock market.

Bullish Pattern
In bullish pattern, the overall stock price goes on increasing and shows an upward trend.
The strategy of an investor should be to buy on dips.

Bearish Pattern
Bearish Pattern is exactly opposite of bullish pattern. Here the overall stock price goes on
decreasing. The strategy of an investor should be to sell on rise.

Types of Chart


Bar Chart

A style of chart used by some technical analysts, on whom, as illustrated below,

the top of the vertical line indicates the highest price a security traded at during
the day, and the bottom represents the lowest price. The closing price is displayed
on the right side of the bar, and the opening price is shown on the left side of the
bar. A single bar like the one below represents one day of trading.

Line Chart

A style of chart that is created by connecting a series of data points together with
a line. This is the most basic type of chart used in finance and it is generally created by
connecting a series of past prices together with a line.
As you can see from the chart above, a line chart can give the reader a fairly good idea of
where the price of an asset has traveled over a given time frame. Since the closing prices
are often seen as the most important ones to keep track of, it is not difficult to see why
line charts have become so popular. Other popular styles of charts include bar charts,
candlestick charts and point and figure charts.

Candlestick Chart

A price chart that displays the high, low, open, and close for a security each day over a
specified period of time. A candlestick chart is a style of bar-chart used primarily to
describe price movements of a security, derivative, or currency over time.
It is a combination of a line-chart and a bar-chart, in that each bar represents the range of
price movement over a given time interval. It is most often used in technical analysis of
equity and currency price patterns. They appear superficially similar to error bars, but are
unrelated.

Analysis

Prudential ICICI balanced fund

Scheme objective: The scheme seeks to generate long term capital appreciation and
Current income by investing in a portfolio of equities, fixed income and money
marketsecurities. The approximate allocation to equity would be in the range of 60-80 per
cent witha minimum of 51 percent and the approximate debt allocation is 40-49 percent,
with aminimum of 20 percent.

Composition:
Equity

65.96 %

Debt

24.27 %

Cash

9.77 %

Trailing returns:
3 Months

1 year

3 years

5 years

Since launch

14.46

54.98

48.43

29.79

18.85

Fund Vs Category Average)Performance (Fund Vs Category Average)

Relative performance (Fund Vs Category Average)

Analysis
We cant expect miracles in Prudential ICICI Balanced. Though it can take us to our goal
in a stable fashion. The last five calendar years are testimony to this fact that it has
consistently been delivering an above average performance. Last year also the fund kept
its record intact the return was up 38.70 percent against the category average of 32.56
percent. So on an average we can rate this fund in low risk segment which can perform in
a consistent manner.

Franklin India prima plus

Scheme objective: The scheme aims to provide growth of capital and regular dividend
from a portfolio of equity, debt and money market instruments and focusing on the
wealth creating companies across all sectors and market cap ranges.

Composition:
Equity

92.59 %

Debt

0.01 %

Cash

7.39 %

Trailing returns:
3 Months

1 year

3 years

5 years

Since launch

23.03

79.28

71.4

42.86

23.47

Relative performance (Fund Vs Category Average)

Analysis
This fund was launched around the peak of the IPO boom, Prima Plus started as a
stockcollector. By March 1996, the funds portfolio was totally out of focus with nearly
200 stocksin its kitty, including many small cap and illiquid issues. Despite relentless
cleaning if theportfolio, the fund took nearly four years to consolidate. Since 1998 the
fund has beenfocusing on large and mid caps and to a more manageable number of issues
45 60 in thelast two years. It grew at a fast pace to make up for initial losses with big bets
in technologysome of which included scripts such as Satyam.
Satyam. Hughes. Zee &Mastek.
&
Losing nearly 32percent has made in a conservative with high concentration on large
caps. This year the fundfrom the word go has been almost fully invested. Since the start
of the year the fund is up11.91 percent as on February 28, 2006. Today it favors
diversified financial and technologysector stocks.

Reliance vision fund

Scheme objective: The fund seeks capital appreciation by investing in larger stocks
withgood fundamentals and good long term prospects.

Composition:

Equity

95.76%

Debt

0.00 %

Cash

4.24 %

Trailing returns:
3 Months

1 year

3 years

5 years

Since launch

23.64

79.64

80.47

62.11

29.93

Relative performance (Fund Vs Category Average)

Analysis
Reliance vision is a good choice for those who want high returns but can deal with
somedownside in bear markets. The fund was an average performer in the early part of its
nineyear existence, but it has staged an impressive turnaround in the past few years.
years The
fund hasnever shielded away from shuffling its portfolio between large caps and mid caps
to boostperformance. This strategy has worked especially well in the last two years. In
2002 it toppedthe category with a mind boggling 72 percent return against the category
average of justt 20percent. Year 2003 also proved to be an excellent year thanks to a
higher exposure in banksand
banks
healthcare stocks. Year 2004 and 2005 were the ups and
downs for the fund respectively.

HDFC equity fund

Scheme objective: The scheme seeks to provide long term capital appreciation
bypredominantly investing in high growth companies.

Composition:
Equity

97.30 %

Debt

0.00 %

Cash

2.70 %

Trailing returns:

3 Months

1 year

3 years

5 years

Since launch

18.82

90.24

78.76

50.55

25.3

Relative performance (Fund Vs Category Average)

Analysis
This fund has an amazing feat to its credit. This is the only diversified equity fund that
hasoutperformed the category average return every time in the last seven calendar years.
Top quartile performance in the four of the last five years with an average volatility
makes thisfund suitable as a core holding. HDFC equity is one of the most versatile funds
available tothe Indian investors. In fact its ability to change with times is responsible
resp
for a
great showeven in tough times. Its top three sectors technology automobile and financial
servicesaccount for nearly 54 percent of the portfolio and technology alone accounts for
21 percentout of it.

Kotak balanced fund

Scheme objective: The scheme seeks to exploit the capital appreciation of equity and the
stable returns of the debt and money markets instruments. It aims to minimize the risk
thatarises out of even the most carefully picked equity stocks.

Composition:
Equity

62.50 %

Debt

33.65 %

Cash

3.86 %

Trailing returns:

3 Months

1 year

3 years

5 years

Since launch

23.29

67.9

53.76

33.3

24.01

Relative performance (Fund Vs Category Average)

Analysis
This fund has a reasonable long term performance record. In the last two calendar years it
haslanded itself in the top quartile returns. In 2005 the fund gained 43.19 percent
tocomprehensively beat 32.56 percent return of an average peer. In 2004 too it had
returnednearly 25 percent to win a place among the top three funds in the category. The
fund has alsobenefited by not being very rigid with its asset allocation in the past for e.g.
when the bullsreturned to the equity markets in the early 2002 the fund reduced its bond
exposure from anaverage
age 41 percent in 2001 to around 33 percent in 2002. The portfolio
has once again gonefor a complete overhaul. The exposure to equities has gone up to 68
percent now. A welldiversified portfolio is also a plus here. The fund always keeps 20 to
30 stocks andd limitsexposure in individual stocks to around 6 percent at most. This funds
versatility is hard tobeat. Long term investors would be rewarded here.

DATA PRESENTATION, ANALYSIS AND

INTERPRETATION

Q1. What kind of Investment you prefer most?

A. Savings Account
B. Fixed Deposit
C. Insurance
D. Mutual Fund

30%

35%
Savings Account
Fixed Deposit
Insurance

15%
20%

Mutual Funds

Interpretation:
35% of people go with Savings account & 30% of the people are interested in Mutual
Funds.

Q2. While investing your money, which factor you prefer most?
A. Liquidity
B. Low Risk
C. High Return
D. Company Reputation

10%

10%

Liquidity

30%

Low Risk
50%

High Return
Company Reputation

Interpretation:
50% of the people are interested in such a type of investments which are of low risk and
30% wants high returns on their investment.

Q3. Have you ever invested your money in mutual fund?

A. Yes
B. No

30%

Yes
70%

No

Interpretation:
More than 50% of the people want their money to be invested in the mutual funds as it
has low risk and more diversified.

Q4. In which kind of mutual fund you would like to invest?

A. Public

B. Private

45%
55%

Public
Private

Interpretation:
Investment in Public and Private Funds is almost in the same percentage. Then too there
is more number of investors in private funds.

Q5. Which feature of mutual fund assures you most?

A. Diversification
B. Better return and safety
C. Reduction in risk and transac
transaction cost
D. Regular Income
E. Tax benefit

20%

Diversification

15%

Better return and safety

10%

25%
Reduction in risk and
transaction cost
30%

Reduction in risk and

transaction cost
Tax benefit

Interpretation:
According to 30% of respondents Reduction in Risk & Transaction cost is the best
feature of mutual fund that is most assured.

Q6. In which mutual fund you have invested?

A. SBIMF
B. UTI
C. HDFC
D. JM Mutual fund
E. Reliance
F. Others

10%
30%

10%

SBIMF
UTI

15%

HDFC
JM Mutual Fund
10%

25%

Reliance
Others

Interpretation:
Maximum percentages of investors are in UTI mutual fund followed with SBI Mutual
Fund.

Q7. When you invest in mutual funds which mode of investment will you prefer?
A. One time investment

B. Systematic Investment Plan (SIP)

45%
One time investment
55%
Systematic Investment Plan
(SIP)

Interpretation:
Maximum number of investors wants to go with SIP i.e. Systematic Investment Plan
rather than one time investment.

Q8. Which AMC will you prefer to invest?

A. SBIMF
B. UTI
C. Reliance
D. HDFC
E. Kotak
F. ICICI

10%

10%

10%
SBIMF
UTI

15%
40%

Reliance
HDFC

15%

Kotak
ICICI

Interpretation:
Maximum percentages of investors are in UTI mutual fund as it is the oldest mutual fund
and also the risk involved is less.

Q9. Which sector are you investing in mutual fund sector?

A. General
B. Oil & Petroleum
C. Gold Fund
D. Diversified Equity fund
E. Power Sector
F. Debt Fund
G. Banking Fund
H. Real Estate Fund

5%

10%

10%

General
15%

10%

Oil & Petroleum

Gold Fund
Diversified Equity fund

15%
25%
10%

Power Sector
Debt Fund
Banking Fund
Real Estate Fund

Interpretation:
Most of the people invest in gold as it gives large returns from the investments and also
the risk of investment is very low.

Q10. How would you like to receive the returns every year?
A. Dividend Payout
B. Dividend re-investment
re
C. Growth in NAV

30%
45%
Dividend Payout
Dividend re-investment
25%

Growth in NAV

Interpretation:
45% of the people like to receive their returns in the form of Dividend as it is fix and less
risky
ky rather than on NAV and Re-investing.
Re

FINDINGS

Findings

It was found that majority of the investors are interested in going for mutual
funds. Also there are some people who are in for savings account rather than
investing in mutual funds.

It was observed that large part of the people wants to go with low risk investment
with high returns.

It was also found that majority of the investors opt for private funds as they are
more profitable and less risky.

It was observed that 20% of customers are preferred to invest in Tax saver funds.

It was found that the majority of the investors invest in Systematic Investment
Plan (SIP)

SUGGESTIONS

Suggestions

Investors should invest in mutual funds by doing fundamental and technical

analysis and investors should not buy what they dont understand as at cab be
creating lost to the investors

Breakdown of neckline by head and shoulder pattern, buyers should sell the
holding stock and minimize loss.

For a trader it is vital to be in touch with the current happenings, news regarding
the merger, takeovers, regulations, de-regulations, quarterly results, etc.

Dont get emotionally attached to the stock

Investment should be done on a regular basis with consistency

Always use earned saved tension free money with bigger time frame

When a reasonable profit has already been made, one cannot overcome the greed
and sell the stock for taking the profit

Inactivity

Portfolio should not be empty at any point of time means; there should always be
some cash and some stock in the portfolio at any point of time

Times to tradealways buy good stocks in bad times and sell stocks in good times
taking help of macros and technical.

CONCLUSION

Conclusion

With the help of this project I conclude that Technical and Fundamental Analysis is
playing very important role in stock market, when making decision of buying and selling.
By investing in right company and at the right time can even get you returns of more than
60% in one year. Always invest with a long term objective. Do not enter the market with
the objective of speculation. Ste your goals and adopt a strategy and do not change it
every day. Always have a well diversified portfolio so as to reduce the risk of losses.
To get good returns from investments follow the pattern of accumulation & distribution
in pyramid fashion. This requires patience and discipline, but it increases returns.
Fundamental analysis considers the long term performance of companies & this will help
to invest their money for long terms as well as can get the good returns.
Technical Analysis comprises of short term analysis of the companies. Technical analysis
really studies supply and demand in the market in an attempt to determine what direction
or trend will continue in future.

ANNEXEURE

Questionnaire

Q1. What kind of Investment you prefer most?

A. Savings Account
B. Fixed Deposit
C. Insurance
D. Mutual Fund

Q2. While investing your money, which factor you prefer most?
A. Liquidity
B. Low Risk
C. High Return
D. Company Reputation

Q3. Have you ever invested your money in mutual fund?

A. Yes
B. No

Q4. In which kind of mutual fund you would like to invest?

A. Public

B. Private

Q5. Which feature of mutual fund assures you most?

A. Diversification
B. Better return and safety
C. Reduction in risk and transaction cost
D. Regular Income
E. Tax benefit
Q6. In which mutual fund you have invested?
A. SBIMF
B. UTI
C. HDFC
D. JM Mutual fund
E. Reliance
F. Others
Q7. When you invest in mutual funds which mode of investment will you prefer?
A. One time investment
Q8. Which AMC will you prefer to invest?
A. SBIMF
B. UTI
C. Reliance
D. HDFC
E. Kotak
F. ICICI

B. Systematic Investment Plan (SIP)

Q9. Which sector are you investing in mutual fund sector?

A. General
B. Oil & Petroleum
C. Gold Fund
D. Diversified Equity fund
E. Power Sector
F. Debt Fund
G. Banking Fund
H. Real Estate Fund

Q10. How would you like to receive the returns every year?
A. Dividend Payout
B. Dividend re-investment
C. Growth in NAV

BIBLIOGRAPHY

Bibliography

Books
Financial Management - Khan & Jain
Research Methodology C.R Kothari
Mc Grow Hill
Web Sites
www.motilaloswal.com
www.amfindia.com
www.moneycontrol.com
www.mutualfundsindia.com

MUTUAL FUND INVESTMENT ARE SUBJECT TO MARKET

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INVESTING