Академический Документы
Профессиональный Документы
Культура Документы
INTRODUCTION
INVESTMENT
An investment is the use of capital to create more money through the
acquisition of a security that promise the safety of the principal and generate a
reasonable return.
Reason Of Investment
One of the important reasons why one needs to invest wisely is to
meet the cost of ination. Ination is the rate at which the cost of
living increases. The cost of living is simply what it costs to buy the
goods and services you need to live. Ination causes money to lose
value because it will not buy the same amount of a good or a service
in the future as it does now or did in the past. For example, if there
Was a 6% ination rate for the next 20 years, a Rs. 100 purchase
a return above the ination rate to ensure that the investment does not
Decrease in value. For example, if the annual interest rate is 6%, then
ination rate, then your assets have actually decreased in value; that
is, they wont buy as much today as they did last year.
INTEREST
When we borrow money, we are expected to pay for using it
this is known as Interest. Interest is an amount charged to the borrower for the
privilege of using the lenders money. Interest is usually calculated as a
percentage of the principal balance (the amount of money borrowed). The
percentage rate may be xed for the life of the loan, or it may be variable,
depending on the terms of the loan.
Types of investment
1. Short Term Financial Investment:
Saving Bank Account-it is often the rst banking product
people use, which offers low interest (4%-5% p.a.), making them
only marginally better than xed deposits.
Money Market Funds-These are a specialized form of mutual
funds that invest in extremely short-term xed income instruments
and thereby provide easy liquidity. Unlike most mutual funds,
money market funds are primarily oriented towards protecting your
capital and then, aim to maximise returns. Money market funds
usually yield better returns than savings accounts, but lower than
bank fixed deposits.
MUTUAL FUNDS
A Mutual Fund is a body corporate that pools the savings of a number of
investors and invests the same in a variety of different financial instruments, or
securities. The income earned through these investments and the capital
appreciations realized by the scheme are shared by its unit holders in proportion
to the number of units owned by them. Mutual funds can thus be considered as
financial intermediaries in the investment business that collect funds from the
public and invest on behalf of the investors. The losses and gains accrue to the
investors only. The Investment objectives outlined by a Mutual Fund in its
prospectus are binding on the Mutual Fund scheme. The investment objectives
specify the class of securities a Mutual Fund can invest in. Mutual Funds invest
in various asset classes like equity, bonds, debentures, commercial paper and
government securities.
Available for sale and repurchase at all times based on the net asset
values
Unit capital of the fund is not fixed
Fund size and its total investment go up if more new subscriptions come
in than redemptions and vice versa.
Listed on stock exchange and investors can buy or sell units through
exchange. May be traded at a discount or premium to NAV based on
3. INTERVAL FUNDS:
PORTFOLIO MANAGEMENT
People have different investment objective and risk appetite so to get the highest
returns asset allocation through active portfolio management is the key element.
Asset allocation is a method that determines how you divide your portfolio
among different investment instruments and provides you with the proper blend
of various asset classes.
It is based on the theory that the type or class of security you own equity, debt
or money market- is more important than the particular security itself. In other
words asset allocation is way to control risk in your portfolio. Different asset
class will react differently to market conditions like inflation, rising or falling
interest rates or a market segment coming into or falling out of favor.
The most important part of the calculation is the valuation of the assets owned
by the fund. Once it is calculated, the NAV is simply the net value of assets
divided by the number of units outstanding. The detailed methodology for the
calculation of the asset value is given below.
+ Dividends/interest accrued
For liquid shares/debentures, valuation is done on the basis of the last or closing
market price on the principal exchange where the security is traded.
For illiquid and unlisted and/or thinly traded shares/debentures, the value has to
be estimated. For shares, this could be the book value per share or an estimated
market price if suitable benchmarks are available. For debentures and bonds,
value is estimated on the basis of yields of comparable liquid securities after
adjusting for illiquidity.
CHAPTER-2
COMPANIES
PROFILE
Below is the snapshot of the fact list of franklin india blue chip
fund
SBI BLUECHIP MUTUAL FUNd
Domestic cues included strong earnings from few index majors, policy
regarding capital infusion in public-sector banks and Cabinet's approval of
amendments to the Goods and Services Tax (GST) Bill. Another trigger was the
setting up of a Rs.20,000 crore National Investment and Infrastructure Fund
and a composite cap for Foreign Portfolio Investment (FPI) and Foreign Direct
Investment (FDI), replacing them with a single upper limit in a bid to make
foreign investments easier.
Below is the snapshot of the fact list of SBI bluechip Mutual fund
CHAPTER-3
RESEARCH
METHODOLOGY
Research Design
Primary Objectives
The main objective of this study is to doing a technical analysis of Mutual Fund
portfolio by taking sample of funds and comparing it with it others
Secondary objectives
To promote investment cult among Indian investors.
To understand the portfolio management process in mutual fund.
To know the importance of statistical measures in portfolio and
investment analysis.
Evaluating fund performance
Collection of data
For the complete study, I collected NAV information of Mutual Fund from the
secondary data base.
Secondary form of data is used for the technical research. Data for the study has
been taken from Technical Trends database. The closing price of mutual fund
NAV was selected for calculating the arithmetic return of the respective mutual
funds.
A time frame of 1 year is considered for calculating the arithmetic return of the
mutual funds on daily basis.
NAV closing price from 1st August 2014 to 1st August 2015 is considered for
the calculation.
Variables Studied
Mathematically,
Mathematically,
Limitations
Time Constraint
Lack of resources