A Study On Performance of Equity Linked Savings Schemes

AN ANALYTICAL STUDY ON INVESTMENT
PERFORMANCE OF EQUITY LINKED SAVINGS

SCHEME
Dissertation submitted in partial fulfillment of the requirements for the
Award of the degree of
MASTER OF BUSINESS ADMINISTRATION
Of
BANGALORE UNIVERSITY
By
Lovin Easo Varkey
Reg. No. 11JJCMA049
Under the guidance of
Prof. Aloysius Edward J
Department of Management Studies
KRISTU JAYANTI COLLEGE OF MANAGEMENT AND TECHNOLOGY

K.Narayanapura
Kothanur post
Bangalore - 560077
CERTIFICATE
It is certified that the Project entitled ‘A study on investment performance of Equity Linked
Savings Schemes’ is an original study carried out by Lovin Easo Varkey; 11JJCMA049 is
being submitted in partial fulfillment for the Award of the Degree of Master of Business
Administration of Bangalore University. The report has not been submitted earlier to any
University / Institution for the fulfillment of the requirement of a course of study.
Prof. Aloysius Dr. Justin Nelson Michael Rev. Fr. Sebastian T.A.
Edward Research Head Principal
Guide Dept. of Management Studies
Bangalore
Date:
DECLARATION
I, Lovin Easo Varkey, hereby declare that the Project entitled ‘A study on investment
performance of Equity Linked Savings Schemes’ is an original study carried out by me. The
Report does not form a part of any other work submitted to any University / Institution for the
award of any degree, diploma, associateship or other similar title.
Lovin Easo Varkey
Bangalore 11JJCMA049
Date:
ACKNOWLEDGEMENTS
At the successful completion of my project I would like to extend my gratitude to all those, without
whose valuable guidance and support it would have not been possible. I would first thank God Almighty
for giving me the wisdom and strength to undertake and complete this project. With all sincerity and
respect, I would like to express my gratitude to Fr. Sebastian T. A., Principal, Kristu Jayanti College, for
giving me an opportunity to have a platform to this project.
I also owe my gratitude to my internal guide Prof. Aloysius Edward, Department of Management, Kristu
Jayanti College of Management & Technology, for his support and assistance for the completion of this
project.
I thank all the faculty of Department of Management Studies whose contribution has helped in
completion of study. I like to extent m thanks to the Librarian of Kristu Jayanti College who helped in
locating various books and journal which was necessary for the completion of this study.
I affirm my renewed thanks to everyone who one way or the other helped me to complete this project .I
deeply acknowledge every service with grateful attitude.
LOVIN EASO VARKEY

11JJCMA049
TABLE OF CONTENTS
CHAPTER PARTICULARS PAGE NO
NO.
List of Tables i
List of Figures iv
Abstract v
1 Introduction 1
2 Review of Literature & Research Design 18
3 Profiles 25
4 Results, Analysis & Discussion 61
5 Findings, Conclusion And 109

Recommendation
Annexure
LIST OF TABLES
Table No. Description PAGE NO.
1.1 Tax Saving Schemes 13
1.2 Comparison Of ELSS with other Tax 13

Saving Instruments
1.3 List Of Top 10 Performing ELSS Funds 14

Based On Performance
1.4 List Of Top 10 Performing ELSS Funds 15

Based On Return(5 years)
3.1 List Of Mutual Funds In India 28
3.2 Investment Pattern 39
4.1 SBI Magnum Tax Gain Quarterly Return 62
4.2 SBI Magnum Tax Gain Return V/S The 63

Index Return
4.3 Birla Sun Life Tax Relief 96 Quarterly 65

Return
4.4 Birla Sun Life Tax Relief 96 V/S Index 66

Return
4.5 HDFC Tax Saver Quarterly Return 68
4.6 HDFC Taxsaver Return V/S The Index 69

Return
4.7 ICICI Prudential Tax Plan Quarterly 71

Return
4.8 ICICI Prudential Tax Plan V/S Index 72

Return
4.9 HDFC Long Term Advantage Quarterly 74

Return
4.10 HDFC Long Term Advantage V/S Index 75

Return
i
4.11 Birla Sunlife Tax Plan Quarterly Return 77
4.12 Birla Sunlife Tax Plan V/S Index Return 78
4.13 Principal Personal Tax Saver Quarterly 80

Return
4.14 Principal Personal Tax Saver V/S Index 81

Return
4.15 Franklin India Tax Shield Quarterly 83

Return
4.16 Franklin India Tax Shield V/S Index 84

Return
4.17 DSP Blackrock Tax Saver Quarterly 86

Return
4.18 DSP Blackrock Tax Saver V/S The Index 87

Return
4.19 Tata Tax Savings Fund Quarterly Return 89
4.20 Tata Tax Savings Fund V/S The Index 90

Return
4.21 HSBC Tax Saver Quarterly Return 92
4.22 HSBC Tax Saver Equity Quarterly Return 93
4.23 BNP Paribas Tax Advantage Plan Gain 95

Quarterly Return
4.24 BNP Paribas Tax Advantage Plan V/S The 96

Index Return
4.25 Religare Tax Plan Gain Quarterly Return 98
4.26 Religare Tax Plan V/S The Index Return 99
4.27 Kotak Tax Saver Quarterly Return 101
4.28 Kotak Tax Saver V/S The Index Return 102
4.29 ING Tax Saving Fund Quarterly Return 104
4.30 ING Tax Saving Fund V/S The Index 105

Return
ii
4.31 Comparative Performance Analysis based 107
on Sharps Ratio
4.32 Top 5 Schemes Return and its Correlation 108

to Index Return
iii
LIST OF FIGURES
Figure Description Page No.
No.
1.1 Classification of Investments 3
3.1 Growth In Assets Under Management 28
4.1 Comparison of Quarterly Return 63
4.2 Comparison of Scheme Return And Index 64

Return

Return

Return

Return

Return

Return

Return
iv
Return

Return

Return

Return

Return

Return

Return

Return
v
ABSTRACT
The objectives of this study are to compare equity-linked saving schemes with other traditional
forms of tax saving schemes. To analyze the equity-linked saving scheme picked at random on the
basis of risk and return. To understand the level of awareness regarding the mutual funds among the
Indian salaried class and the various factors that influence investors to invest in equity linked saving
schemes. The methodology conducted for this study is by using Sharpe ratio, standard deviation, beta,
multivariate statistical tool was used to cluster the funds into groups based on various parameters and
analyzed. The secondary data were collected by visiting various websites of the asset management
companies, articles available on the web, investment magazines and facts sheets of the asset
management companies.
All funds had a step declined in the year 2008 and 2010 because of financial crisis and melt
down stock market. The sharps index is at maximum for HSBC Tax Saver Equity with .023 Some Equity
Linked Savings Schemes have shown better returns than their respective benchmark index. The beta of
Birla Sun Life Tax Relief 96, Principal Personal Tax Saver Kotak Tax Saver, ING Tax Saving Fund
suggest that they are highly sensitive be relative to the market as a whole. The beta of SBI Magnum
Tax Gain, HDFC Tax Saver, ICICI Prudential Tax Plan, HDFC Long Term Advantage, Birla Sunlife Tax
Plan, Franklin India Tax Shield, DSP BlackRock Tax Saver, TATA Tax Savings Fund, HSBC Tax Saver
Equity, BNP Paribas Tax Advantage Plan, Religare Tax Plan Gain suggest that they are less sensitive
be relative to the market as a whole. The fund chosen by the investor should match the risk appetite of
the investor. It is suggested that the equity linked saving scheme should be seriously considered by
investors because of the dual advantage of tax saving and high return. Investing in HSBC Tax Saver
Equity is the best option in all 15 schemes
Keywords
NAV- Net Annual Value
Scheme Return
AMC- Asset Management Company
Risk
Return
v
CHAPTER 1
INTRODUCTION
1
1.1 INTRODUCTION
Investment is the employment of fund with the aim of achieving additional income
or growth in value. The essential quality of an investment is that it involves ‗waiting‘ for
reward. It involves the commitment of resources which have been saved or put away from
current consumption in the hope that since benefit will accrue in future.
Investment is the allocation of monetary resources to assets that are expected to

yield some gain or positive return over a given period of time. These assets range from
safe investment to risky investments. Investment in this form is called as ‗financial
Investments‘.
Why should one invest?
One needs to invest to:


Earn return on your idle resources.

Generate a specified sum of money for a specific goal in life.

Make a provision for an uncertain future.
One of the important reasons why one needs to invest wisely is to meet the cost of
inflation. Inflation 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. Inflation causes
money to lose value because it will not buy the same amount of gods or services in the
future as it does now or did in the past. The aim of investments should be to provide a
return above the inflation rate to ensure that the investment does not decrease in value.
2
1.2 FACTORS INFLUENCING INVESTMENT

Increasing rate of taxation.

High interest rate.

High rate of inflation.
1.3 TYPES OF INVESTMENTS


Short term investment

Long term investment
FIGURE 1.1
Classification of investments
SHORT TERM LONG TERM
Savings Bank Account Post Office Savings
Money Market or Liquid Funds Public Provident Fund
Fixed Deposits with Banks Company Fixed Deposits
Securities [Shares, Bonds]
India by 2032 will become the third largest economy in the world, as reported by
Goldman Sachs in their wealth report. India‘s domestic savings as a percentage of its GDP is
28%, one of the forms of investment avenues like gold, fixed deposits, insurance, mutual
3
funds and capital markets. Investments in equities have shown better results and have
potential grow in the long run which can be an ideal approach to adjust inflation and provide
an opportunity for capital appreciation, provided the investors are high on risk. The majority
of Indian investors considerably have a low risk appetite, on an average. The only option left
for the investors in the mutual fund industry which has dual advantage of investing in equity
and getting goods return with optimum risk.
The Indian mutual fund market is in the process of evolving and the statistics on various
parameters like number of customers, types of products, types of channels, and geographical
locations along with the projection till 2005.
Equity linked Savings schemes are equity funds floated by mutual funds. They offer a 20 per
cent tax rebate on investments upto Rs 10,000 in a given financial year. There is a three year
lock-in on investments and there is no assurance on returns. The ELSS funds have to invest
more than 80 per cent of their money in equity and related instruments. Returns form ELSS
funds tend to fluctuate widely, in line with the performance of the stock markets. Young
people should definitely invest in the ELSS funds as they have the ability to take on higher
risk. Ideally one should invest in them when the markets are down. These funds are now open
all the year round. Therefore, investors can time their investment. The other way of investing
in these funds could be a systematic investment, which essentially means investing a small
sum regularly (monthly or quarterly).
It is one of the popular and good investments available under section 80c. Most
people not utilizing the power of mutual funds as the tax savings instrument. If you are
comparing with all the other tax saving instruments, ELSS is the one offers you high return.
There is risk associated with this investment. One think you have to keep in mind, if you are
taking the risk, return will be higher. In our life, every where there is some kind of risk exists.
An equity-linked saving scheme (ELSS) is a great investment option that offers the twin
benefits of tax saving and capital gains. Earlier, investors had to spread their investments across
different instruments such as PPF, ELSS, NSC and infrastructure bonds. But now, it‘s possible to
invest the entire limit of Rs 100,000 available under Sec 80C in ELSS. According
4
to the new Income Tax Act, Sec 80C investments in ELSS are allowed as deduction from the
total income, up to maximum Rs100, 000 in a financial year.
ELSS schemes have a three-year lock-in period, which works to the investors‘ benefit
as the fund manager can have a portfolio of stocks that can out-perform over a period of time.
1.4 Before investing in ELSS
Investment in an ELSS helps get a tax benefit to a maximum limit of Rs 1 lakh under
Section 80C of the Income Tax Act. Various other options like contribution to provident fund,
contribution to public provident fund, insurance premium paid, etc also get tax benefit under
Section 80C of the I-T Act. Investments made in ELSS are locked-in for a period of three
years and each scheme has a different portfolio.
LOWER COST
Mutual fund investments have a cost attached to them because every scheme incurs
some cost while managing your money. This cost is charged annually and eats into the returns
on your investments. An equity-oriented scheme attracts a fund management fee, also called
as expense ratio. This cost is adjusted in the net asset value (NAV) of the scheme and not
charged separately. Therefore, the investor does not realize that he is pays this amount to the
asset management company. The expense ratio is a percentage of the scheme's assets under
management. For example, if scheme returns 10 per cent and its expense ratio is 1 per cent, it
means, the scheme earned 11 per cent of which 1 per cent went towards the various expenses.
According to the data from mutual rating agency, Value Research, 14 schemes had an
expense ratio of 2.5 per cent and 19 others had a lower expense ratio. Of the top 10 ELSS
schemes seven had a ratio lower than 2.5 per cent, while the remaining three had a ratio of
2.5 per cent, in the last one year ending January 27. This kind of lower cost is good for a
long-term investor who stays invested in the scheme for several years.
5
OLDER SCHEMES
Many ELSS have been launched till now, but, since fund houses usually do not launch
multiple schemes with similar features, the total number of ELSS is limited. And, the
presence of a large number of schemes with a long performance record helps investors
research enough for selecting the right scheme.
Thus, it is not surprising that most of the top performing schemes, even in the past one
year, are those that have been in the market for several years. In the last one year, six ELSS
have returned more than 100 per cent. Last ELSS scheme was launch in October 2005 and
the first scheme came to the market in March 1993. Investors need to look at each ELSS
portfolio.
Moreover, when time-tested schemes perform well, investors are more confident about
putting their money.
LOW PERFORMANCE DIFFERENTIAL
If your scheme selection goes wrong, there are chances of witnessing a big
difference in the return you receive as schemes differ in their performance from one another.
This situation can be illustrated better when it involves the selection of a equity diversified
scheme. In this case, a wrong choice can lead to a large difference in overall performance and
hence the returns received by the investor.
However, this does not hold true for ELSS. As the variance is comparatively less in
their case. In the last one year, the best performing scheme returned 127 per cent and the
worst performer returned 63 per cent, as on January 27. In comparison, the difference
between the worst and best performing equity diversified fund was a whopping 138 per cent
When compared over a period of two or three years, returns given by the best and the
worst performing ELSS were 24 per cent and 22 per cent per annum, respectively.
6
This is less than half, when the best and the worst performing equity diversified
schemes are compared. The difference stood at 57 per cent and 46 per cent per annum,
respectively. The absolute difference will be far higher, as the figures are compounded over
different time periods. This helps investors select a good ELSS scheme before investing.
1.5 How to choose this scheme
Short term performances of the fund can be ignored as its negligible and concentrate
on the brand and track record for over a period. Consistency in performance of fund is the
key. Many times certain funds become hit over a period but the quality deteriorates over a
period of time. Don‘t go just by the brand also as there have been times when investors have
been doomed by just going by brand name and have lost their capital.
1.6 Why should one invest ELSS?


Lock-in for three years helps in staying invested over a long period.

Investments in equity over a long-term delivers better returns.

Tax savings and high returns.

Through SIPs, one can invest small amount of Rs 500 in ELSS every
month.
There are different types of mutual funds available in the market. Based on the style of
investing the 3 well known types of mutual funds are:
1. Equity Mutual Funds: These mutual funds invest a major portion of their corpus in
equity shares and equity related instruments. The aim of this type of mutual fund is to
generate long term capital appreciation for the investor. This type of mutual fund is
suited to those investors who are looking for high returns and have a high appetite for
risk.
2. Debt Mutual Funds: These mutual funds invest a major portion of their corpus in
debt instruments like Government Bonds and Securities, Corporate Bonds, Fixed
Deposits, Money Market Instruments etc. The aim of this type of mutual fund is to
generate regular income for the investor. This type of mutual fund is suited for those
7
investors who are looking to generate regular income for themselves without taking
much risk.
3. Balanced Mutual Funds: These mutual funds invest a major portion of their corpus
in a mix of equities and debt instruments. The distribution may be in the ratio of
Equity 70 and Debt 30 or 50:50 or any other ratio as specified by the mutual fund.
The equity component aims at generating long term appreciation and the debt
component aims at providing stability and generating regular income.
Equity Linked Saving Scheme (ELSS) is also a type of mutual fund and falls under the
Equity Mutual Fund category. An ELSS mutual fund invests major portion of its corpus into
equity and equity related instruments. But there are some distinct features which makes ELSS
plans different from other equity mutual funds.
1.7 Difference between ELSS Plans and Other Mutual Funds
There are 2 major features that make ELSS plans different from other mutual funds:
1. Income Tax Benefit: Investments made in ELSS plans are eligible for deduction from
the taxable income under Section 80C of the Income Tax Act. There is no limit for
investments in ELSS plans, but investments of upto Rs 1,00,000 qualify for income
tax benefits. Investments made in normal mutual funds (other than ELSS plans) do
not qualify for income tax deduction.
2. 3 Year Lock-in Period: Investments made in ELSS plans have a lock-in period of 3
years. In case of normal mutual funds this lock-in period is not there. In an ELSS plan
every instalment has a lock-in period of 3 years.
Example: Let us assume that a person starts investing on a monthly basis from Jan
2009. The lock-in period of the 1st instalment (Jan 2009) will end in Jan 2012. The
lock-in period of the 2nd instalment (Feb 2009) will end in Feb 2012 and so on.
8
1.8 Features of an ELSS Plan
1. ELSS is an equity linked tax saving investment instrument.
2. Money collected under ELSS plan is mainly invested in equity and equity related
instruments.
3. This financial product is more suited to those investors who are willing to take high
risk and looking for high returns.
4. There is no upper limit on investments that can be made in ELSS. However

investments upto INR 1,00,000 made in ELSS in a financial year qualify for
deduction from taxable income under Section 80C of the Income Tax Act.
5. ELSS comes with a 3 year lock-in period.
6. Long term capital gains earned on investments from ELSS are tax free.
7. Also dividends earned from ELSS plan are tax free in the hands of the investor.
8. The other tax saving instrument that comes closest to comparison with ELSS is Unit
Linked Insurance Plan (ULIP).
1.9 Benefits of ELSS
Tax Benefits
- Deduction under section 80C

- No tax on Capital gains
- Dividends are tax free in the hands of investor
Lock in period (3 years)
- Lowest among all tax saving instruments

under section 80C
- Long enough to minimize market volatility
Better Return
- Compared to all tax saving instruments under sec 80C
9
1.10 Options in an ELSS Plan
ELSS plans come with 2 options of growth and dividend.
1. Growth Option: If the investor selects growth option, he will not get any income
during the tenure of the investment. He will get a lump sum amount at the time of
redemption or on maturity. In other words the investor will not get any returns till the
time he is holding the instrument and the profit/loss is realized when the securities are
sold/transferred.
2. Dividend Options: Under the dividend option the investor has 2 options. Dividends
give income tax benefits to the investor. For example let us assume that the investor
invests Rs 1 Lakh in an ELSS plan (NAV Rs 10) in the month of April and the ELSS
scheme declares a dividend of 25% in the following month in May. The investor will
get back Rs 25,000 on his investment of Rs 1 Lakh. So effectively the investor has
invested only Rs 75,000 but he gets the income tax benefit on the entire Rs 1 Lakh. So
if the investor is falling in the 30% tax bracket, the tax saving of Rs 30,000 on Rs
75,000 (net investment amount as Rs 25000 is received back as dividend) effectively
works out to 40% instead of 30%. Also the lock-in period of the Rs 25,000 received
as dividend gets reduced from 3 years to 1 month only.
Please Note: The above calculation is done assuming the investor falls in the 30% tax
b racket and the investor has invested Rs 1, 00,000 and the ELSS scheme declares a
dividend of 25% in the subsequent month.
3. Dividend Re-investment Option: If the investor opts for dividend re-investment

option, then any dividends declared are re-invested on behalf of the investor. The
investor can claim additional tax benefits on the re-invested dividend amount. For
example let us assume that the investor has invested Rs 1 Lakh in the ELSS plan. In
the next year the scheme declares a dividend and the investor is entitled to a dividend
of Rs 20,000. This dividend is re-invested on behalf of the investor and he gets
additional units of the scheme. The investor can claim income tax deduction for this
Rs 20,000 from his taxable income as this investment of Rs 20,000 is treated as fresh
investment.
10
1.11 Charges in a Mutual Fund
There are 3 types of charges in an ELSS Plan:
1. Entry Load: This is the charge levied by the mutual fund at the time of investment. For
example if the entry load is 2.25% and the investor has invested Rs 100, the Rs 2.25 will
go towards entry load charges and the remaining Rs 97.75 is invested by the mutual fund
on behalf of the investor. If the NAV on that day is Rs 10, then the investor will get
97.75/10 = 9.775 units in his account.
st
Recently from 1 August 2009, Securities Exchange Board of India (SEBI) has abolished
the entry load for mutual funds. So now all ELSS plans are free of entry load charges.
This effectively means that if the investor invests Rs 100, the full Rs 100 will be invested
without deduction of any entry load charge.
2. Fund Management Charges: This is the recurring charge levied by the mutual fund. This
charge is for the day to day expenses of the mutual fund. The maximum permissible by
SEBI is 2.5% and the industry average is around 2.25%. This charge is collected by the
mutual fund by cancelling equivalent units from the investors account.
3. Exit Load: This charge is levied by mutual funds when the investor sells the units. In
ELSS plans there is no exit load.
1.12 Advantages of ELSS over NSC and PPF
1. Main advantage of ELSS is its short lock-in period. Maturity period of NSC is 6 years and
PPF is 15 years.
2. Since it is an equity linked scheme earning potential is very high.
3. Investor can opt for dividend option and get some gains during the lock-in period
4. Investor can opt for Systematic Investment Plan
5. Some ELSS schemes also offer personal accident death cover insurance
6. Provides 30 to 40% returns compared to 8% in NSC and PPF
11
1.13 Disadvantages of ELSS
1. Risk factor is high compared to NSC and PPF
2. Premature withdrawal is not allowed but it is allowed in other instruments in some specific
conditions.
1.14 ELSS vs other tax-saving instruments

There is no upper limit on investment is ELSS. However, investments of only upto Rs
100,000 are allowed to be claimed as deductions under section 80C.

The performance of the top five funds in India over a period of three years. Past
performance may or may not be sustained in the future.

Investors may note that though as of now the Finance Act, 2005 does not tax any
withdrawals from ELSS; it may be possible that as and when the proposed EET
system becomes fully operational, any redemption from ELSS may be subjected to
tax. In order to work out the roadmap for smoothly moving towards the EET system,
the Bill has proposed to set-up a committee of experts. Such committee will examine
the mix of savings instruments that would qualify under the new system and propose
suitable tax incidence. Investors should note the above before making any investment
under ELSS.
1.15 Investment strategy for ELSS funds


Risk appetite should at all times determine the total investments in tax-saving funds.
Don't go overboard in the segment simply because of the opportunity to rake
in impressive returns, thereby ignoring the risk involved.

Use the SIP route for investing in tax-saving funds. Not only does it do away with the
need for timing markets, but it also reduces the strain on your wallet at the end of the
financial year when most investors conduct their tax-planning exercise.
12
1.16 TAX SAVING SCHEME (ELSS)
TABLE 1.1
Tax Saving Schemes
Parameter PPF NSC ELSS

Returns 8% 8% Market linked*
Interest Receipt On Maturity On Maturity Depends on Performance
Tenure 15 Years 6 Years Minimum 3 years
Tax Benefits Sec 80C ,sec10 Sec 80C Sec 80C
Minimum Investment Rs 500 p.a. Rs 100 Lump sum: Rs 5000/-

Maximum Investment Rs 70,000 Rs 1,00,000 No Upper Limit
Monthly Plans N.A N.A. SIP : Rs. 500/-
Source: Secondary data
Comparison of ELSS with other tax saving instruments
TABLE 1.2
Comparison of ELSS with other tax saving instruments
Particulars PPF NSC ELSS Bank ULIP

Deposits
Tenure (Years) 15 6 3 5 5
Min. investment (Rs) 500 100 500 10,000 10,000#
Max. Investment (Rs) 70,000 1,00,000 1,00,000 1,00,000 1,00,000
for sec 80C benefits
Return (CAGR) 8.00 8.00 32.25^ 8.25* NA
1.17 ELSS over ULIP (Unit linked insurance plan)
Though one must not discount importance of insurance, ELSS still has edge over
ULIP. ELSS has much lesser administration cost just 2% either in the form of entry load or
exit load. The entire amount of investment goes in to mutual fund unlike ULIP where a
certain amount is deducted for mortality charges, administration charges etc. The lock in
13
period of ELSS is three years and can be withdrawn later. Dividends received from ELSS are
tax free.
Growth option is the best choice for ELSS as there is substantial capital appreciation.
Avoid dividend reinvestment option as the small amounts will get locked in for three years
again. You can choose the SIP way again for ELSS.
TABLE 1.3
List of top 10 performing ELSS funds based on performance
Open Ended - Equity: Tax Planning - (Since Launch Return)
Funds NAV (Date) Returns(%) Return as on
Union KBC Tax Saver Scheme (G) 12.93 (15-Jan) 13.7 1/15/2013
HSBC Tax Saver Equity Fund 15.75 (15-Jan) 12.8 1/15/2013
SBI Tax Advantage Sr-2 11.45 (15-Jan) 11.8 1/15/2013
IDFC Tax Saver Fund 15.61 (15-Jan) 11.7 1/15/2013
IDFC Tax Advantage 21.18 (15-Jan) 11.5 1/15/2013
Axis Long Term Equity Fund 14.39 (15-Jan) 11.1 1/15/2013
DSP-BRTax Saver Fund 17.84 (15-Jan) 10.4 1/15/2013
DWS Tax Saving Fund 13.30 (15-Jan) 10.4 1/15/2013
Quantum Tax Saving Fund 24.34 (15-Jan) 10.1 1/15/2013
Principal Tax Savings 78.82 (15-Jan) 9.8 1/15/2013
Sundaram BNP Paribas Taxsaver 23.13 (15-Jan) 18.14 1/15/2013
14
From a tax management perspective, ELSS investment stands out as a preferred investment.
Investors, who want to lock-in their funds and not succumb to the temptation of re-working
and shuffling their holdings, will find ELSS a good avenue for investment as there is three
year lock-in period.
1.18 TOP 10 TAX SAVING MUTUAL FUNDS (ELSS)
The following 3 tables list the top 10 ELSS schemes in descending order of their 5 years, 3
years and 1 year returns. This may help you in selecting the best ELSS scheme for your
needs.
TABLE 1.4
List of top 10 performing ELSS funds based on Return (5 years)
Return (%)
Rank Fund Name 1 Year 2 Years 3 Year 5 Year
1 Can Robeco Eqty TaxSaver 7.6 4.3 6.2 11.2
2 Reliance ELSF - Series 1 3.8 3.4 6.5 9.2
3 Religare Tax Plan 9.1 3.7 6.1 8.3
4 UTI Long Term Advantage S2 9.1 2.0 4.2 8.1
5 Franklin India Tax Shield (G) 6.6 3.7 6.9 8.1
6 Reliance Tax Saver 0.6 2.2 5.6 7.9
7 HDFC Tax Saver 1.8 -1.5 3.3 7.7
8 L&T Tax Advantage 5.2 -0.1 5.3 7.7
9 ICICI Pru Tax Plan 8.4 1.6 4.8 7.6
10 HSBC Tax Saver Equity Fund 12.8 4.2 4.4 7.2
15
1.19 ADVANTAGES OF AN OPEN-ENDED ELSS
Mutual funds have been allowed to offer Equity Linked Saving Schemes (ELSS)
structured as open-end funds. ELSS offer 20 per cent tax rebate for investments up to Rs
10,000 with a three year lock-in period, under section 88 of the Income Tax Act. For instance,
if tax liability of an investor is Rs 3000, and he invests Rs 5000 in an ELSS, 20 per cent of Rs
5000 or Rs 1000 would be reduced from his tax liability, thus bringing it down to Rs 2000.
Earlier, these schemes were allowed to be structured only as 10-year closed-end funds with a
lock-in period of three years commencing from the beginning of the new financial year.
Under the revised regulation, all investments under ELSS will continue to attract a lock-in
period of three years from the date of allotment or holding of units as the case may be and not
just from the beginning of the new financial year.
1. Wider Choice: With the new regulation, fund companies have been saved from the
process of floating a new fund in the last quarter of every financial year. The effort
and expense involved in launching such schemes and the small corpus garnered have
deterred funds even with a good track record from launching new schemes. Now there
is the flexibility than even if one tax-saving scheme is launched and garners a modest
sum, funds can leverage their performance and attract fresh subscription. This would
lead to addition of an open-end tax saver to the product portfolio of every AMC
giving investors a wider choice.
2. Periodic Investments: The open-end structure will make the fund less vulnerable to
market moods. Since all ELSS schemes were floated in the last quarter of the fiscal
and most of the money was collected in March, the fund's performance depended on
the market performance at that time. As these funds will now be sold throughout the
year, tax-savers can choose to invest at any point of time and take advantage of
market conditions. Importantly, the open-end structure for ELSS provides for natural
product enhancements, with features of regular investment plan (rupee cost
averaging) which will be of special appeal to marginal taxpayers while planning their
investments. Right in the beginning of the year, the investor can estimate his tax
liability and chalk out a strategy.
3. Buy a Hot Fund: The earlier framework did not allow an investor to buy an ELSS
based on its track record. The investor could take clue from the performance of the
16
tax-plans of a particular AMC, but could invest only in a tax-plan launched for that
year. And if a better performing AMC chose not to launch one in that year, investor
would have to settle for the second best. With open-end ELSS schemes, an investor
can buy into a fund that has a track record and can know the portfolio he is buying
beforehand.
4. Roll-Over: The instant liquidity after three years can be advantageous for investors
facing a cash crunch. An investor can get his units redeemed after three years and
redeploy the principal in the same fund and avail of tax rebate once again. Earlier, one
would have to put in investments in a new closed-end fund launched every year.
Effectively, it is now possible to lock-in Rs 30,000 over a period of three years and
enjoy the tax rebate on Rs 10,000 every year!! That of course assumes that the NAV
after three years is above the par value. Even after allowing for the capital gains tax
after adjusting for the inflation-index, it could work out to be beneficial. In fact, in
certain circumstances, the investor could take advantage of the fund's
underperformance i.e if the NAV falls below par value. Investors confronted with
substantial capital gains, can simply get the units redeemed and actualize a capital
loss and offset it against a capital gain. And if the investor is still optimistic about the
fund, he can redeploy the proceeds in the same fund may be at the same NAV.
5. Performance Pressure: The fact that there could be numerous open tax-savings
schemes competing for the investor's pie will optimize investment performance by
fund managers. So far, they could sit back in comfort - at least for three years. Now,
they will be under constant pressure to retain existing investors as well as to attract
fresh inflows.
6. ELSS for the Year: Many AMCs have indicated their intention to convert one of
their existing ELSS schemes into an open-end fund instead of launching a new one.
Currently, Birla and Alliance are offering open-end ELSS while Kothari and UTI have
launched closed-end ELSS. Both Birla and Alliance funds have been superior
performers till date. Both the tax plans are on a equal footing considering the
impressive performance of existing funds from both AMCs. In the past one year, Birla
Advantage has witnessed a spectacular appreciation of 95.69 per cent while Birla Tax
plan '98 has posted a total return of 62 per cent with the NAV at 16.22 as on February
25, 1
17
CHAPTER 2
REVIEW OF LITERATURE & RESEARCH DESIGN
18
2.1 INTRODUCTION
The title of the study is “A study on investment performance of equity linked saving
scheme ―
2.2 REVIEW OF LITERATURE
Shefali Jains conducted an empirical study on ‗Investment Performance of Equity Linked

Savings Schemes‘.Tax saving is the motive of any Indian investor today with increasing
average income and cash inflows. Investors have a choice of investing in a lot of traditional
tax saving instruments. They are all supported by Government of India and offer low rate of
return with long lock-in periods. The study evaluates the performance of equity-linked saving
schemes selected at random vis-à-vis the traditional schemes to give an insight into how these
funds perform with respect to risk and returns. This is done to help investors to choose an
ideal option to save tax and enjoy the benefits of investing in equity market which offers
good returns.
Nalini Prava Tripathy has done an empirical study on ‗Market Timing Abilities and Mutual
Fund Performance - An Empirical Investigation into Equity Linked Saving Schemes‘. The
Indian financial system in general and the mutual fund industry in particular continue to take
turns from around early 1990s. Growth of various mutual fund products has proved to be one
of the catalytic instruments in generating momentous investment growth in the capital
market. Therefore the present study evaluates the market timing abilities of Indian fund
managers of thirty-one tax planning schemes in India over the period December,1995 to
January, 2004 by using Jensen &Mazuy Model and Henriksson and Merton model. The study
indicates that the fund managers have not been successful in reaping returns in excess of the
market, rather they are timing the market in the wrong direction
Dr. S. Vadivelu has done ‗A Study on Performance of Mutual Fund Schemes‘ an overview
about mutual funds and various schemes related mutual funds are discussed in this paper. The
investors have been guided with investment portfolio. The common principles of funds
management (i.e.) Safety, liquidity and profitability are also discussed. A comparative study
has been made between the mutual fund investment and other investment avenues. The study
is made like an emperial research using latest tools and techniques. The conclusion and
suggestions are worth to emulate for the future development of mutual fund segments and
eye opener to bring the surplus resources into the organized sector
19
2.3 STATEMENT OF THE PROBLEM
India by 2032 will become the third largest economy in the world, as reported by
Goldman Sachs in their wealth report. India‘s domestic saving as a percentage of its GDP is
28%, one of the highest in the world. A significant proportion of this saving is in the form of
investment avenues like gold, fixed deposits, insurance, mutual funds and capital markets.
Investments in equities have shown better results and have the potential to grow in the long
run which can be an ideal approach to adjust inflation and provide an opportunity for capital
appreciation, provide the investors are high on risk. The study is undertaken to know the
performance of ELSS.
2.4 SCOPE OF THE STUDY


For the Purpose of this study the following different ELSS Mutual Fund Schemes for
five years are considered:
a) SBI Magnum Tax Gain
b) Birla Sun Life Tax Relief 96
c) HDFC Tax Saver
d) ICICI Prudential Tax Plan
e) HDFC Long Term Advantage
f) Birla SunLife Tax Plan
g) Principal Personal Tax Saver
h) Franklin India Tax Shield
i) DSP BlackRock Tax Saver
j) TATA Tax Savings Fund
k) HSBC Tax Saver Equity
l) BNP Paribas Tax Advantage Plan
m) Religare Tax Plan
n) Kotak Tax Saver
o) ING Tax Saving Fund

All those Mutual Funds were schemes of mutual funds(ELSS open-ended scheme)

The returns are undertaken for 5 years
20
2.5 OBJECTIVES OF THE STUDY

To compare equity-linked saving schemes with other traditional forms of tax saving
schemes.

To understand the quarterly return for 5 year of the schemes.

To analyze the equity-linked saving scheme picked at random on the basis of risk and
return.
2.6 HYPOTHESIS
H0: There is no relationship between the scheme return and index return
H1: there is relationship between the scheme return and index return
2.7 OPERATIONAL DEFINITION OF CONCEPTS
2.7.1 Net Asset Value or NAV
NAV is the total asset value (net of expenses) per unit of the fund and is calculated by the
Asset Management Company (AMC) at the end of every business day. Net asset value on a
particular date reflects the realizable value that the investor will get for each unit that he his
holding if the scheme is liquidated on that date.
Net asset Value of an investment company is the company‘s total assets minus its total
liabilities. For Example, if an investment company has securities and other assets worth $100
million and has liabilities of $10 million, the investment company‘s NAV will be $90 million
one day, $100 million the next, and $80 million.
21
For Calculating NAV in Years
NAV Closing Value – NAV Opening Value
= *100
NAV Opening Value
2.7.2 MARKET RETURN
The return on the market as a whole is known as market return. Market return is derived for
analysis is from BSE SENSEX index.
2.8 METHODOLOGY
Risk is measured using the parameters like Sharpe ratio, standard deviation, beta,
multivariate statistical tool was used to cluster the funds into groups based on various
parameters and analyzed.
The secondary data were collected by visiting various websites of the asset management
companies, articles available on the web, investment magazines and facts sheets of the asset
management companies.
2.8.1METHOD OF ANALYSIS

Standard Deviation

Beta

Sharpe measure
2.8.2 SOURCES OF DATA COLLECTION
Secondary Data: The various secondary data which will be used in this work includes

Internet

News Papers

Journals

Books related to investments etc
22
2.9 LIMITATIONS OF THE STUDY

The comparison of the fund was mainly dependent on the information collected from
secondary data i.e., fact sheets of various funds and from websites like value research
online. There could be possibility of error in the secondary data.

The results are generalized to all the Equity-linked saving scheme though the
comparison was done for few schemes.
2.10 CHAPTER SCHEME
CHAPTER 1 INTRODUCTION
In this chapter consists of introduction, factors influencing investment, types of investments,

classification of investments, before investing in ELSS, difference between ELSS plans and
other mutual funds, features of an ELSS plan, benefits of ELSS, options in an ELSS plan,
charges in a mutual fund, advantages of ELSS over NSC and PPF, disadvantage of ELSS,
ELSS v/s tax saving instruments ,investment strategy for ELSS funds, tax saving scheme v/s
ELSS, ELSS over ULIP, list of ten performing ELSS funds based on performance since
launch, top ten tax saving mutual funds(ELSS), advantages off an open-ended ELSS.
CHAPTER 2 REVIEW OF LITERATURE & RESEARCH DESIGN
This contains Title of the study, Statement of the Problem, Review of Literature, Objective of
the Study, scope of the study, Methodology, Method of analysis, Sources of data collection,
operational definition of concepts Limitation of the Study.
CHAPTER 3 PROFILES
In this chapter it contains industry profile, its history, list of mutual funds available in India,
investment opportunities. This chapter contains the selected companies‘ profiles.
23
CHAPTER 4 RESULTS, ANALYSIS & DISCUSSION
In this chapter, it contains the quarterly return average, the yearly average of fund and the
index, standard deviation and sharps ratio
CHAPTER 5 FINDINGS, CONCLUSION AND RECOMMENDATION
In this chapter contains all the findings that is been done on the research analysis chapter. The
conclusion, suggestions, bibliography and annexure is been include in this chapter
24
CHAPTER 3
PROFILES
25
3.1 PROFILES
History of the Indian Mutual Fund Industry
The mutual fund industry in India started in 1963 with the formation of Unit Trust of
India, at the initiative of the Government of India and Reserve Bank the. The history of
mutual funds in India can be broadly divided into four distinct phases
First Phase – 1964-87
Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set
up by the Reserve Bank of India and functioned under the Regulatory and administrative
control of the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the
Industrial Development Bank of India (IDBI) took over the regulatory and administrative
control in place of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the end
of 1988 UTI had Rs.6, 700 crores of assets under management.
Second Phase – 1987-1993 (Entry of Public Sector Funds)
1987 marked the entry of non- UTI, public sector mutual funds set up by public
sector banks and Life Insurance Corporation of India (LIC) and General Insurance
Corporation of India (GIC). SBI Mutual Fund was the first non- UTI Mutual Fund
established in June 1987 followed by Can bank Mutual Fund (Dec 87), Punjab National Bank
Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of
Baroda Mutual Fund (Oct 92). LIC established its mutual fund in June 1989 while GIC had
set up its mutual fund in December 1990.
At the end of 1993, the mutual fund industry had assets under management of Rs.47,004
crores.
Third Phase – 1993-2003 (Entry of Private Sector Funds)
With the entry of private sector funds in 1993, a new era started in the Indian mutual
fund industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the
year in which the first Mutual Fund Regulations came into being, under which all mutual
funds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer (now
26
merged with Franklin Templeton) was the first private sector mutual fund registered in July
1993.
The 1993 SEBI (Mutual Fund) Regulations were substituted by a more

comprehensive and revised Mutual Fund Regulations in 1996. The industry now functions
under the SEBI (Mutual Fund) Regulations 1996.
The number of mutual fund houses went on increasing, with many foreign mutual
funds setting up funds in India and also the industry has witnessed several mergers and
acquisitions. As at the end of January 2003, there were 33 mutual funds with total assets of
Rs. 1,21,805 crores. The Unit Trust of India with Rs.44,541 crores of assets under
management was way ahead of other mutual funds.
Fourth Phase – since February 2003
In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was
bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust of
India with assets under management of Rs.29,835 crores as at the end of January 2003,
representing broadly, the assets of US 64 scheme, assured return and certain other schemes.
The Specified Undertaking of Unit Trust of India, functioning under an administrator and
under the rules framed by Government of India and does not come under the purview of the
Mutual Fund Regulations.
The second is the UTI Mutual Fund 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, 2004, there were 29 funds, which manage assets of Rs.153108 crores
under 421 schemes.
27
The graph indicates the growth of assets over the year
GROWTH IN ASSETS UNDER MANAGEMENT
FIGURE 3.1
Growth In Assets Under Management
Table 3.1
LIST OF MUTUAL FUNDS IN INDIA
Mutual Fund Sponsors Year of

Entry
Bank sponsored
BOB Asset Management Co. Ltd Bank of Baroda 1992
Can Bank Investment Management Canara Bank 1987

Services Ltd.,
S.B.I. Funds Management Ltd., State Bank of India 1987
UTI Asset Management Co., Pvt. SBI, PNB, BOB, LIC 1963
Ltd.,
28
Institutions
G.I.C. Asset Management Co. Ltd., General Insurance 1990

Corporation & other 4
PSU GIC
Jeevan Bhima Sahyoga Asset LIC 1989

Management Co. Ltd.,
Private Sectors
Benchmark Asset Management Co. NICHE Financial 2001

Pvt. Ltd., Services
Chola Mandalam Asset Chola Mandalam 1997

Management Co. Ltd., Investments
Escorts Asset Management Ltd., Escorts Finance 1996
J. M. Capital Management Pvt. J.M. Shares and Stock 1994

Ltd., Brokers
Kotak Mahindra Asset Management Kotak Mahindra Bank 1998

Co. Ltd.,
Reliance Capital Asset Reliance Capital 1995

Management Co. Ltd.,
Sahara Asset Management Co. Pvt. Sahara India Finance 1996

Ltd.,
Sundaram Asset Management Co. Sunadaram Finance 1996

Ltd.,
Tata Asset Management Pvt. Ltd., Tata Sons 1995
Joint Ventures Predominantly Indian
Birla Sun Life Asset Management Birla Global Finance 1994

Pvt. Ltd.,
29
D.S.P.Merrill Lynch Fund D.S.P. Merrill Lynch 1996
Manager Ltd.,
HDFC Asset Management Co. Ltd., HDFC & Std Life 2000
Investment
Joint Ventures Predominantly Foreign
Alliance Capital Asset Management Alliance Capital 1994

Pvt. Ltd., Management
Deutsche Asset Management Pvt. Deutsche Asset 2002

Ltd., Management
Franklin Templeton Asset Franklin Templeton 1996

Management Pvt. Ltd., Investments
HSBC Asset Manageent Pvt. Ltd., HSBC Security 2002
ING Inveatment Management Pvt. ING Group 1999

Ltd.,
Morgan Stanley Investment Morgan Stanley 1993

Management Pvt. Ltd.,
Prudential ICICI Asset Prudential ICICI 1993

Management Pvt. Ltd.,
Principal Asset Management Co. Principal Financial 1994

Pvt. Ltd., Service
Standard Charted Asset Standard Charted Bank 2000

Management Ltd.,
Source: Secondary Data
30
Recent Trends in Mutual Fund Industry
The most important trend in the mutual fund industry is the aggressive expansion of
the Foreign owned mutual fund companies and the decline of the companies floated by
Nationalized Banks and smaller Private Sector players.
Many Nationalized banks got into the mutual fund business in the early nineties and
got off to a good start due to the stock market boom prevailing then. These banks did not
really understand the mutual fund business and they just viewed it as another kind of banking
activity. Few hired specialized staff and generally chose to transfer staff from the parent
organization. The performance of the schemes floated by these funds was not good
Some schemes offered guaranteed returns and their parent organization had to bail out
these AMCs by paying large amounts of money as the difference between the guaranteed and
actual returns. The service levels were also very bad. Most of these AMCs have not been able
to retain staff, float new schemes etc. and it is doubtful whether, barring a few exceptions
they have serious plans of continuing the activity in a major way.
The experience of some of the AMCs floated by private sector Indian companies was
also very similar. They quickly realized that the AMC business, which makes money in the
long term and requires deep-pocketed support in the intermediate years. Some have sold out
to Foreign owned companies, some have merged with others and there is general
restructuring going on.
The Foreign owned companies have deep pockets and come in here with the
expectation of a long haul. They can be credited with introducing many new practices such as
new product innovation, sharp improvement in service standards and disclosure, usage of
technology, broker education and support etc. In fact they have forced the industry to
Upgrade it and service levels of organizations like UTI have improved dramatically in
the last few years in response to the competition provided by these companies.
31
Future Scenario
The asset base will continue to grow at an annual rate of about 30 to 35% over the
next few years as investors shift their assets from banks and other traditional avenues. Some
of the older and private sector players will either close shop or be taken over.
In the coming years the market will witness a flurry of new players entering the arena.
There will be a large number of offers from various AMCs in the time to come. Some big
names like Fidelity, Principal, and Old Mutual etc. are looking at Indian market seriously.
One important reason for it is that most major players already have presence here and hence
these big names would hardly like to get left behind. The mutual fund industry is awaiting the
introduction of Derivatives in India as this would enable it to hedge its risk and this in turn
would be reflected in its NAV.
SEBI is working out the norms for enabling the existing mutual fund schemes to trade
in derivatives. Importantly, many market players have called on the regulator to initiate the
process immediately, so that the mutual funds can implement the changes that are required to
trade derivatives.
3.1.1 INVESTMENT OPPORTUNITIES
Savings bank account with commercial banks:
A safe, liquid and convenient investment option, it gives an interest rate of an average 4.5% per
annum, ideal parking funds for emergencies or unexpected expenses, the account holder may
keep an average balance equal to three months of his living expenses.
Objective: To provide high liquidity and safety to the account holders.
Risk: The savings rate is usually very low as compared to the other financial instruments and it
cannot offset inflation.
Bank fixed deposits
Being a safe investment option bank fixed deposits give interest rates around 5.25% to 8%. A
bank fixed deposit is recommended for those looking for preservation of capital along with 32
current income in the short term. However, over long term the returns may not keep pace with
inflation.
Objective: To provide regular and fixed income to the account holders who wish to have
regular and steady savings and earnings.
Risk: Although not rated, fixed deposits facilitate 100% assurance of principal with interest
rates regulated by RBI. But there is inflation risk involved.
Bonds and debentures
They are long-term debt instruments with interest rate ranging between 9-18% per annum.
Many types of debts and bonds have been structured to the investors with different time
horizons. Though the risk is high they offer better returns when compared to bank fixed
deposits.
Objective: It is the safest investment and loans can be borrowed against bonds or debentures.
Risk: The inflation and interest fluctuation affects investment decision. They have no
commercial ratings.
Company deposits
Fixed investment schemes offered by various Public limited companies or the private sector
may be cumulative or non-cumulative. They can be offered to the public as well as the existing
shareholders and employees. Non-Banking Financial Companies cannot offer more than 14%
of interest on the fixed deposits.
Objective: It confers faster capital appreciation and hence it is suitable for regular income
holders and an investor can borrow against the deposits depending on the credit rating.
Risk: It is an unsecured investment and there is no asset backing and provides limited
protection against inflation risk.
33
Gold:
In India gold is more of a sense of security and a fixed asset rather than for any use or for the
purpose of making profit or income. Since a long time it has been used extensively for
speculation. Gold may be invested either in the form of gold shares which are banned in India,
gold coins, gold bars, gold jewellary etc.
Objective: gold offsets inflation rates to some extent and offers good appreciation over a long
period of time.
Risk: there are no regular earnings and the rates fluctuate. Even the rates of capital appreciation
are not fixed or certain.
Real estate
Land and house property are the main real estate investments. These investments are taken by
and large number of people for hedging the inflation rates.
Objective: In India it is found that almost all banks and financial institutions consider land as
good collateral. Hence it is considered a safe investment.
Risk: investment in real estate involves a lot of pressures in terms of tax payment for capital
appreciation, stamp duties etc.
Shares
It is the most risky investment with highest returns in the long run. Sensex indicates the price
movements of shares on weighted average basis. Dividends up to Rs.1000 are not taxed.
Objective: to provide high capital appreciation and very high rates of dividend.
Risk: being highly volatile the price movements depends on the market and the company‘s
performance. The earning may even become negative.
34
3.2 COMPANY PROFILES
3.2.1 SBI CAPITLA MARKET LIMITED
SBI CAPITAL MARKETS LIMITED (SBICAPS) is India's leading investment bank

and project advisor, assisting domestic companies fund-mobilisation efforts for last many
years.
Foreseeing the changing needs of clients in a rapidly opening economy, over the years,
we have evolved an array of advisory services in almost all sectors of the economy. We are
known for professionalism and business ethics and provide a full range of Investment,
Advisory and Financial Services under one umbrella. A pioneer in privatization in India, we
have established ourselves as a leader in providing financial and advisory services in the core
sector and infrastructure industries.
We began operations in August 1986 as a wholly owned subsidiary of the State Bank of
India, which is the largest commercial bank in India. In January 1997, fresh equity shares
were issued to Asian Development Bank (ADB) and ADB now holds 13.84% stake in the
equity of SBICAPS. The distinguished parentage (with a 86.16% stake) together with the
long standing association of an internationally renowned financial institution like the Asian
Development Bank further enhances our image as a truly 'World Class Investment Bank'.
SBI MAGNUM TAX GAIN (ELSS)
Magnum Tax gain has consistently yielded superior returns over the past couple
of years. The fund has capitalized on the bullish trend in the markets in 2003 and 2004; its
shift to mid-cap stocks has also paid rich rewards. The scheme has generated 13.8%
annualized return
since it turned open-ended in November 1999 against 9.2% annualized return by its
benchmark, BSE 100 over the same period. Head of Equity at SBI Mutual Fund and Fund
35
Manager for the scheme Sandip Sabharwal attributes this performance to the superior stock
selection with a long-term view on investments.
Experts believe that the scheme will become even more attractive now with the
Finance Minister's budget proposal to remove the cap on investment in tax saving
instruments, allowing an investment of Rs 1 lakh in equity linked saving schemes, ELSS.
Sabharwal says, ―We believe this will be a big driver for flows into the equity markets.
Earlier the cap was at Rs 10000, so it really did not make sense for a lot of people to invest
this small amount and then monitor the performance. However with Rs 1 lakh limit, we are
likely to see huge inflows into this category of schemes from April 1st onwards.‖
Commenting on the advantages of investing in ELSS, Sabharwal says, ―If you see
ELSS schemes across fund houses they are one of the best performing schemes mainly due to
stable long-term funds where the fund manager can also take a long-term view. The other
advantages of no long term capital gains tax and tax free dividends also is a big positive as all
the returns that an investor makes out of this scheme are free of tax which is not so for most
asset classes today.‖
Meanwhile, the government is mulling over the proposal to tax the maturity value
of the tax saving instruments. When asked about the impact of the same on the scheme,
Sabharwal said, ―The Finance Minister has proposed the EET scheme but it is yet to be
implemented. Even if it gets implemented it will be uniform across tax saving asset classes
and as such will not have a significant impact on the inflows.‖
PORTFOLIO ANALYSIS
Magnum Tax gain Scheme has portfolio largely invested in mid-cap stocks. Barring
Gujarat Ambuja Cement, it has weeded out even the few large-cap stocks that it held last
year. The scheme invests with a bottom up approach with certain sectoral caps. Its current
turnover ratio is close to 110%, says the fund manager. The scheme's strategy to stick with
quite a few of its midcap stocks in the top ten holdings — Thermax, Praj, Crompton, KPIT,
Sintex, and United Phosphorus — for several months now, has paid off.
Besides this, Magnum Tax gain is heavily skewed to Electrical Equipment stocks
which together account for almost 32% of the net assets. Sabharwal says, ―Actually the
36
companies into which we have invested in belong to different product classes and each is
different in its product profile. We are positive on this sector due to the strong capital
investment cycle
3.2.2 HDFC ASSET MANAGEMENT COMPANY LIMITED
HDFC Asset Management Company Ltd. is a privately owned investment manager.

The firm primarily manages equity, fixed income, and balanced mutual funds for its clients. It
invests in public equity and fixed income markets. The firm employs fundamental analysis to
make its investments. It operates as a subsidiary of Housing Development Finance Corp. Ltd.
HDFC Asset Management Company Ltd was founded in 1999 and is based in Mumbai,
Maharashtra.
HDFC Mutual Fund Declares Dividend on Quarterly Interval Fund
HDFC Mutual Fund has approved Feb. 8, 2010 as the record date for declaration of
dividend under dividend option in retail and wholesale plan of HDFC Quarterly Interval Fund
- Plan C. The quantum of dividend will be 100% of distributable surplus as on the record
date.
HDFC Announces Launch of New Fund Named as HDFC FMP 19M November 2009
HDFC Asset Management Company Ltd. announced the launch of a new fund named
as HDFC FMP 19M November 2009, fixed maturity plan under HDFC Fixed Maturity Plans-
Series XI, a close-ended income scheme. The face value of the new issue will be INR 10 per
unit. The new issue will be open for subscription on Nov. 6, 2009 and close subscription on
16 Nov. 2009. The investment objective of the plans under the scheme is to generate regular
income through investments in debt/money market instruments and government securities
maturing on or before the maturity date of the respective plan(s). Maturity date of the scheme
would be 19 months from the date of allotment of units of the scheme. The fund would invest
60% to 100% of assets in debt and money market instruments including securitized debt.
Investments in securitized debt would be upto 75% of the net assets of the plan. The scheme
may invest upto 40% of the scheme‘s net assets in government securities. The entry and exit
37
load charge will not be applicable for the scheme. The units of the scheme will be listed on
the National Stock Exchange.
HDFC Asset Management Reportedly Mulls Listing
An Industry official said, HDFC Asset Management Company Ltd (HDFC Mutual
Fund) plans to conduct an initial public offering by early 2010. A leading mutual fund
distributor said, ―The fund house is planning to list itself in January.‖ Business Standard
added that HDFC Mutual Fund officials, when approached, did not comment. Milind Barve,
Managing Director, HDFC MF, could not be reached for comments. Lately Housing
Development Finance Corp (HDFC) Chairman Deepak Parekh had said that it plans to list
both insurance, and mutual fund companies and plans to list the mutual fund business first.
HDFC TAX SAVER (ELSS)
Investment objective
The investment objective of the Scheme is to achieve long term growth of capital.
BASIC SCHEME INFORMATION

Nature of scheme: open ended equity linked scheme with a lock-in period of 3 years.
Inception date: December 18, 1995
Option / plan: Dividend option, growth option. The dividend option offers dividend payout
and Reinvestment facility.
Entry load (purchase/additional purchase/switch-in): NIL (with effect from August 1,

2009
Minimum application amount: for new and existing investors: Rs 500 and in multiple
thereafter.
Lock-in-period: 3 years from the data allotment of the respective units.
Redemption proceeds: Normally dispatched within 3 Business day (subject to completion of

Lock- in-period)
38
INVESTMENT PATTERN
TABLE 3.2
Investment pattern
Sl No Asset type (% Of Portfolio) Risk Profile Medium

to High
1 Equities & Equity Minimum 80%

related intruments
2 Debt
Securities,Money Low to Medium
Market
instruments(including Minimum 80%
cash/call Money)
Source: secondary data
Investment in securitized debt, if undertaken, would not exceed 20% of the net
assets of the scheme. The scheme may also invest up to 25% of net assets of net assets of the
scheme in derivatives such as futures and options and such other derivative instruments as
may be introduced from time to time for the purpose of hedging and portfolio balancing an
do there uses as may be permitted under the regulations and guidelines.
The scheme may also invest a part of its corpus, not exceeding 40% of its net assets,
in overseas markets in Global Depository Receipts(GDR‘s), ADR‘s, overseas equity, bonds
and mutual funds and such other instruments as may be allowed under the Regulations from
time to time .
Subject to the Regulations and the application guidelines, the scheme may, engage
in stock Lending activities. Also refer to section on stock lending by the fund.
The ELSS (equity linked saving scheme) guidelines, as applicable, would be

adhered to in the management of this fund.
39
If the investment in equities and related instruments falls below 80% of the
portfolio of the scheme at any point in time, it would be endeavored to review and rebalance
the composition.
Not with standing anything stated above, subject to the regulations, the asset
allocation patter indicated above may change from time to time, keeping in view market
conditions, market opportunities, Applicable regulations and political and economic factors.
It may be clearly understood that the percentage stated above are only indicative and are not
absolute and that they can vary substantially depending upon the perception of the AMC, the
intention being at all times to seek to protect the NAV of the scheme. Such changes will be
for short term and defensive considerations.
Provided further and subjective to the above, any changes in the asset allocation
affecting the investment profile of the scheme and amounting to change in the fundamental
attributes of the scheme shall be effected in accordance with sub-regulation(15A) of
regulation 18 of SEBI regulations.
Investment strategy
Debt securities (in the form of non-convertible debentures, bonds, secured premium
notes, zero interest bonds, deep discount bonds, floating rate bond / notes, securitised debt,
pass through certificates, asset backed securities, mortgage backed securities and any other
domestic fixed income securities including structured obligations etc.) include, but are not
limited to :
 Debt obligations of the Government of India, State and local Governments, Government
Agencies and statutory bodies (which may or may not carry a state / central government
guarantee),
 Securities that have been guaranteed by Government of India and State Governments,
 Securities issued by Corporate Entities (Public / Private sector undertakings),
 Securities issued by Public / Private sector banks and development financial institutions.
40
Money Market Instruments include:
 Commercial papers
 Commercial bills
 Treasury bills
 Government securities having an unexpired maturity upto one year
 Collateralized Borrowing & Lending Obligations (CBLO)
 Certificate of deposit
 Usance bills
 Permitted securities under a repo / reverse repo agreement
 Any other like instruments as may be permitted by RBI / SEBI from time to time.
Investment policies
Consistent with the investment objectives of the scheme, the AMC aims to identify
securities which offer superior levels of yield at low levels of risk. The investment team of
the AMC will carry out an internal credit analysis of all securities included in the investment
universe. The Scheme may also use various derivative and hedging products from time to
time, as would be available and permitted by SEBI, in an attempt to protect the value of the
portfolio and enhance Unit holders‘ interest. The Investment Manager may therefore enter
into forward contracts, future contracts or buy or sell options in an effort to maintain risks at
acceptable levels. The Scheme may also invest in suitable investment avenues in overseas
financial markets for the purpose of diversification, commensurate with the Scheme
objectives and subject to necessary stipulations by SEBI / RBI. Towards this, the Mutual
Fund may also appoint overseas investment advisors and other service providers, as and
when permissible under the regulations.
41
HDFC Long Term Advantage Fund(ELSS)
Investment objective
The primary objective of the Scheme is to generate long term capital appreciation from
a portfolio that is invested predominantly in equity and equity related instruments.
Nature of Scheme Open Ended Equity Linked Savings Scheme with a lock-in
period of 3 years
Inception Date January 02, 2001
Option/Plan Dividend Option,Growth Option. The Dividend Option

offers Dividend Payout and Reinvestment Facility.
Entry Load NIL

(purchase / additional purchase (With effect from August 1, 2009)
/ switch-in)
(click here for SIP Details) Please click here to go through the addendum.
Exit Load
(as a % of the Applicable No Exit Load shall be levied on bonus units and units
NAV) allotted on dividend reinvestment.
(click here for SIP Details)
Minimum Application For new & existing investors :Rs.500 and in multiples
Amount thereafter.
(click here for SIP Details)
Lock-In-Period 3 years from the date of allotment of the respective Units
Net Asset Value Periodicity Every Business Day.
Redemption Proceeds Normally dispatched within 3 Business days(subject to

completion of Lock-in period, Only Individuals and HUF)
Investment Pattern
The net assets of the scheme wil be invested primarily in equity an dequity related
instruments. The scheme may invest a part of its net assets in debt and money market
instruments, in order to manage its liquidity requirements from to time, and under certain
circumstance, to protect the interest of the unit holders.
42
The asset allocation under the Scheme will be as follows :
Sr.No. Type of Instruments Normal Risk Profile

Allocation
(% of Net Assets)
1 Equities & Equity related instruments 80 Medium to

High
2 Debt Securities, Money Market 20 Low to

instruments(including cash/call money) Medium
Investment Strategy
The funds collected under the Scheme shall be invested in equities, cumulative
convertible preference shares and fully convertible debentures and bonds of companies.
Investment may be made in partly convertible debentures and bonds including those issued
on a rights basis subject to the condition that, as far as possible, the non convertible portion of
the debenture so acquired or subscribed shall be disinvested within a period of 12 months.
It shall be ensured that funds of the Scheme shall remain invested to the extent of at
least 80% in securities specified above. In exceptional circumstances, this requirement may
be dispensed with by the AMC, in order that the interests of the Unit holders are protected.
Pending investment of funds of the Scheme in the required manner, the AMC may
invest the funds of the Scheme in short term money market instruments or other liquid
instruments or both. After 3 years from the date of allotment of the Units, the Mutual Fund
may hold up to 20% of net assets of the Scheme in short-term money market instruments.
The investment approach will be based on a set of well established but flexible
principles that emphasis the concept of sustainable economic earnings and cash return on
Investment as the means of valuation of company.
43
3.2.4 PRUDENTIAL ICICI ASSET MANAGEMENT PRIVATE LIMITED
Company Overview
ICICI Prudential Asset Management Company Limited is a privately owned

investment manager. The firm provides its services to individuals and institutions. It manages
separate client-focused equity, fixed income, and balanced mutual funds. The firm invests in
the public equity and fixed income markets of India. It operates as a subsidiary of ICICI Bank
Ltd. ICICI Prudential Asset Management Company Limited was founded in 1998 and is
based in Mumbai, India.
ICICI Prudential Asset Management Company (AMC) is a child of two of the

strongest names in the world finance market - Prudential PLC of UK and ICICI Bank India.
Incepted in 1998, ICICI AMC Ltd is already a pre-eminent name in investment sector of
India. With just 2 funds under management in 1998, ICICI Prudential mutual fund count has
grown to 35 in the past decade.
Get the services of full-time, professionally trained and well-experienced investment

professionals for managing your funds at ICICI Prudential Asset Management Co. What‘s
more you can also get personal consultations at the customer service segment with
information to all your queries. Complete transparency is rendered in every investment by
ICICI Prudential Advisor. Prompt liquidity at the net asset values (NAV) in open-ended
schemes makes ICICI Prudential Mutual Funds a popular choice among investors.
ICICI Prudential Asset Management Company enjoys the strong parentage of

prudential plc, one of UK's largest players in the insurance & fund management sectors and
ICICI Bank, a well-known and trusted name in financial services in India. ICICI Prudential
Asset Management Company, in a span of just over eight years, has forged a position of pre-
eminence in the Indian Mutual Fund industry as one of the largest asset management
companies in the country with average assets under management of Rs. 82,168.12 Crore (as
of Nov 30, 2009). The Company manages a comprehensive range of schemes to meet the
varying investment needs of its investors spread across 230 cities in the country.
44
ICICI PRUDENTIAL TAX PLAN (ELSS)
ICICI Prudential Tax Plan (the Scheme) is a diversified equity fund that aims to
generate capital appreciation by investing in equity instruments. As an Equity Linked Savings
Scheme (ELSS), investments of upto Rs.1,00,000 are eligible for tax deduction u/s 80C of the
Income Tax Act, 1961. The scheme offers significant advantages in terms of (i) potential for
higher returns, and (ii) shorter lock-in period of 3 years as compared to other traditional tax
saving instruments. The 3-year lock-in, allows fund managers freedom to select stocks with a
long-term perspective without day to-day liquidity pressure which provides potential for
higher returns. The scheme offers potential to earn tax-free dividend. Maturity proceeds do
not attract Long Term Capital Gains Traditional tax saving instruments may have implicit /
explicit guarantee of Government of India or respective issuer for repayment of principal and
interest. Partial or pre mature withdrawals are also allowed in some instruments. Investments
in ELSS are subject to market risks and the NAV of units of ELSS may go up or down,
depending on the factors and forces affecting the capital markets. Partial or pre mature
withdrawals are not permitted in ELSS. Investors shall read and understand risk factors
before making an investment decision.
Portfolio Strategy
• ICICI Prudential Tax Plan is a blend of large and mid/small cap fund, seeking to provide
steady returns.
• The large cap stocks constitute about 57% of the net assets as on Oct 30, 2009.
• The 3-year lock in and mandate for patient long term investment enabled the fund to
maintain ~ 90% to 95% equity exposure on an average during the 2008 and 2009.
• This mandate has allowed fund manager to take advantage of investing at lower market
levels during early 2009 and subsequently has benefitted from the recent market recovery.
• For defensive purposes, the fund as on Oct 30, 2009, continues to remain over-weight on
Pharmaceuticals
45
• The fund has also turned overweight on Software by investing at current valuations due to
expected growth revival across the globe, lending higher growth visibility for the sector and a
favourable risk reward scenario
• The fund has been accumulating good quality stocks at lower levels and booking profits
intermittently at every possible opportunity
Scheme Features
Type Open-ended Equity Linked Savings Scheme Investment Pattern Equity and
Equity related instruments upto 90% & Debt, Money Market and Cash upto 10% Options
Growth & Dividend Default Option Dividend Reinvestment Application Amount Rs. 500
(plus in multiples of Re. 1) Minimum Additional Investment Rs. 500 & in multiples thereof
Redemption Cheques Issued Generally within 3 Business Days for specified RBI locations
and an additional of 3 Business Days for Non RBI locations after lock-in period of 3 yrs. Cut
off time: Purchase/Switch in : 3pm Redemption/Switch out : 3pm Systematic Investment Plan
(SIP) Monthly: Minimum of Rs. 500 or multiples thereof & 5 postdated cheques for a
minimum of Rs. 500for a block of 5 months in advance. Quarterly: MinimumRs.5000+
4postdatedcheques of Rs. 5,000each. Systematic Withdrawal Plan (SWP) Not Available
Systematic Transfer Plan (STP) Available.
3.2.5 BIRLA SUN LIFE ASSET MANAGEMENT PRIVATE LIMITED

Birla Sun Life Asset Management Company Ltd. (BSLAMC), the investment
managers of Birla Mutual Fund, is a joint venture between companies of the Aditya V. Birla
Group and the Sun Life Financial Services of Canada Inc.
The Aditya Birla Group is a multinational group of companies comprising of some

of the best known companies in India. The group companies have attained a leading position
in a range of key core sector areas and rank among the country‘s largest, most profitable and
fastest growing companies with an excellent track record of returns to investors. At the
Aditya Birla Group, growth with excellence is a way of life. With a turnover of over Rs 280
billion, and fixed assets worth Rs 265 billion, the group is India's second largest business
house. The Group's family of 81,000 employees is spread across 40 companies situated in 17
countries around the globe. With the beginning of economic reforms in India, the Aditya
46
Birla Group entered the financial services sector in the early nineties. The aim is to become
the first choice of Indian customers for world class financial services.
Sun Life Financial Services of Canada Inc. is the holding company of Sun Life
Assurance Company of Canada. The group ranks as one of the largest global insurance and
wealth management organizations with assets under management of more than $300 billion
and credit ratings that places it at the top of the financial sector in North America. With major
operations for over a century and with businesses in 21 key markets throughout the world,
Sun Life Financial is a global force in financial services. Sun Life has major presence in the
growing mutual fund markets through MFS Investment Management in the U.S. and through
the Spectrum United Mutual Fund in Canada. MFS is listed in four stock exchanges and has
US$147 billion total assets under management with a four year compounded growth of 30%
across international, institutional, retail annuities and retail mutual funds.
The joint venture brings together the Aditya Birla Groups' experience in the Indian
market and Sun Life's global experience. Birla Mutual fund has been constituted as a trust in
December, 1994. It has a spectrum of 17 investment schemes including 2 off shore funds,
designed to cater to every need of the investor. Birla Mutual Fund today has emerged as one
of India's leading Mutual Funds with over Rs. 9200 crores1 of assets under management and
an investor base in excess of 5.75lac folios.
Birla Mutual Fund follows a long-term, fundamental research based approach to

investment. The approach is to identify companies, which have excellent credit-worthiness
and strong Fundamentals. The fundamentals include the quality of the company‘s
management, sustainability of its business model and its competitive position, amongst other
factors.
47
Birla Sun Life Tax Plan (ELSS)
FUND OVERVIEW
Category ELSS
Fund Family Birla Sun Life Mutual
Fund
Scheme Plan Growth
Scheme Class Open End
Tax Benefit Yes
Net Asset 1.66 B
1 Year Return 99.87%
Fund Inception Date 16-02-1999
Birla Sun Life Tax Plan (BSLTP) aims at achieving long term growth of capital
along with Income Tax benefits for investors. It follows a bottom-up approach to investing,
where the emphasis is on identifying companies in quality businesses with a strong
competitive position and run by quality management. Essentially the focus is on long term
fundamentally driven values. The fund offers superior growth opportunities. Since
investments are planned for a 3 year period it helps the Fund Manager to take a long term
view while selecting stocks and not remain constrained by short term liquidity pressures.
48
TAX BENEFITS U/S 80C:
Investments in this fund would enable you to avail benefits under Section 80C of the
Income Tax Act, 1961. Investments upto Rs. 1 lakh by eligible investors in the scheme may
qualify for deductions. Investors are requested to consult their tax advisor in this regard.
BIRLA SUN LIFE TAX RELIEF 96
Investment Objective
An open-ended equity linked savings scheme (ELSS) with the objective of long term growth
of capital through a portfolio with a target allocation of 80%equity, 20% debt and money
market securities.
Scheme details
Fund Type Open-Ended
Investment Plan Growth
Launch date Mar 06, 2008
Asset Size (Rs cr) 703.13 (Mar-30-2013)
Minimum Investment Rs.500
Load Details
Entry Load Nil

Exit Load 0.00%
3.2.6 PRINCIPAL ASSET MANAGEMENT COMPANY PRIVATE LIMITED
Principal Mutual Fund (formerly known as IDBI-PRINCIPAL Mutual Fund) has been
constituted as a Trust in accordance with the provisions of the Indian Trusts Act, 1882 (2 of
1882). The Mutual Fund is registered with SEBI under Registration No. MF/019/94/0, dated
December 13, 1994. The underlying objective of Principal Mutual Fund is to mobilize
savings from the public, provide investment expertise to achieve optimal returns on their
investments.
49
The Fund was initially set up by Industrial Development Bank of India (IDBI) in 1994 by
execution of a Trust Deed dated November 25, 1994, under which IDBI was the sole Settlor,
Subsequently, on March 31, 2000, Principal Financial Services Inc. USA became the deemed
sponsor (along with the IDBI) by acquiring 50% stake in IDBI-PRINCIPAL Asset
Management Company Limited. In June 2003, Principal Financial Services Inc. USA became
the sole sponsor by acquiring 100% stake in IDBI-PRINCIPAL Asset Management Company
Limited, through its wholly owned subsidiary Principal Financial Group (Mauritius) Limited
(Principal Mauritius). Principal Mauritius has become the sole settlor of the Fund. Name of
the Asset Management Company was changed to Principal Asset Management Company
Private limited, to reflect the change in ownership.
Our Investment Philosophy
Having thoroughly understood the needs of our investors, we at Principal Mutual Fund
provide investors with a disciplined investment approach that takes acceptable risks, whilst
attempting to minimize volatility in the portfolio.
Equity Funds create wealth for our investors by investing in well-managed companies
that are attractively valued, to generate sustainable cash flows in the future. We add value by
maintaining a strong focus on credit research and every company is added to the portfolio
after it undergoes a thorough credit analysis.
We proactively manage our Debt and Liquid Funds by continuously monitoring the
macroeconomic environment and undertaking fundamental research of the fiscal and the
monetary position.
Both our corporate and individual clients get to choose from a variety of structured,
diversified investment options that meet their investment needs at all stages in their life.
PRINCIPAL PERSONAL TAX SAVER (ELSS)
Objective: Principal Personal Tax Saver Fund will invest in equity and equity linked
instruments, debt securities and money market to achieve long term capital gain. Investment
in the Scheme is subject to a lock-in period of 3 years from the date of allotment.
50
Structure: open-ended equity linked saving scheme.
Inception Date: April 12, 1996
Plans and options under the plan: Not Applicable
Face Value(Rs/unit): Rs 10
Minimum Investment: Rs 500 and any amount thereafter under each option.
Entry Load: 2.25%
Exit Load: Nil
3.2.7 FRANKLIN TEMPLETON ASSET MANAGEMENT (INDIA) PRIVATE

LIMITED
Franklin Templeton Asset Management (India) Private Limited is a privately owned

investment manager. The firm primarily caters to individuals, and investment companies. It
manages equity, fixed income, and balanced mutual funds for its clients. The firm invests in
the public equity and fixed income markets. It employs a combination of fundamental and
quantitative analysis along with bottom-up stock picking approach to make its investments.
The firm conducts in-house research to make its investments. It was founded in 1996 and is
based in Mumbai, India. Franklin Templeton Asset Management (India) Private Limited
operates as a subsidiary of Franklin Templeton Holding Ltd.
FRANKLIN INDIA TAX SHIELD

An open end Equity Linked Savings scheme with an objective to provide medium to long-
term growth of capital along with income tax rebate.
Scheme details
51
Launch date Apr 10, 1999
Asset Size (Rs cr) 905.20 (Dec-31-2012)
Load Details
Entry Load Nil
Exit Load 0.00%
Load Comments 3 yr lock-in
3.2.8 DSP BLACKROCK INVESTMENT MANAGERS PVT LTD
DSP BlackRock Investment Managers Pvt. Ltd. is the investment manager to DSP BlackRock
Mutual Fund.
The philosophy of DSP BlackRock Investment Managers Pvt. Ltd. has been grounded in the
belief that experienced investment professionals, using a disciplined process and
sophisticated analytical tools, can consistently add value to client portfolios.
DSP BlackRock Investment Managers Pvt. Ltd. takes a three dimensional approach to the
management of the organization, incorporating functional, product and regional elements in
support of clients' goals. The functional dimension looks at the company's operations by
specific task, such as account management or operations. The product dimension brings
together the cross-disciplinary expertise critical to managing client assets in each class.
Finally, the regional aspect of the company's model recognizes the unique, geography-
specific needs of clients as well as the importance of local regulatory issues.
With our three-dimensional approach to managing the organization, we seek to:

 Ensure consistency on a global basis;
 Allow for the tailoring of products and services according to client or local needs;
 Promote teamwork among our employees worldwide; and
 Facilitate operational integrity and efficiency
52
DSP BLACKROCK TAX SAVER FUND
An Open ended equity linked savings scheme whose primary investment objective is to seek
to generate medium to long-term capital appreciation from a diversified portfolio that is
substantially constituted of equity and equity related securities of corporates and to enable
investors avail of a deduction from total income as permitted under the Income Tax Act,1961
from time to time.
Scheme details
Launch date Nov 27, 2006
Benchmark CNX 500
Asset Size (Rs cr) 763.17 (Dec-31-2012)
Minimum InvestmentRs.500
Load Details
Entry Load Nil
Exit Load 0.00%
3.2.9 HSBC GLOBAL ASSET MANAGEMENT
World-class investment solutions backed by the strength of the HSBC Group HSBC Global
Asset Management has an outstanding track record and a longstanding presence globally.
With approximately USD409 billion (as on 30 June 2012) of assets under
53
management worldwide and a presence in about 30 countries, it is one of the premier fund
management organizations in the world.
HSBC Global Asset Management in India provides a comprehensive range of investment

management solutions to a diverse client base and is committed to delivering consistent
investment performance, world-class service and a broad range of solutions for all types of
investors. Our range of offerings in India comes under two broad categories Mutual Fund and
Portfolio Management Services.
HSBC TAX SAVER EQUITY
Aims to provide long term capital appreciation by investing in a diversified portfolio of

equity & equity related instruments of companies across various sectors and industries, with
no capitalization bias The Fund may also invest in fixed income securities
Scheme details
Benchmark S&P BSE 200
Load Details
Entry Load Nil
Exit Load 0.00%
54
3.2.10 BNP PARIBAS ASSET MANAGEMENT INDIA
About BNP Paribas Investment Partners
BNP Paribas Investment Partners is the dedicated autonomous asset management business of
the BNP Paribas Group. BNP Paribas Investment Partners It offers the full range of
investment management services to both institutional and retail clients around the world.
Central to the way we it works is the concept of partnership – both in terms of how we it
behaves as a family of companies and our its relationships with our its clients.
Nearly 800 investment professionals‘ work across our BNP Paribas Investment Partners'
network of some 60 investment centers, each specializing in a particular asset class or type of
product. With total assets under management of EUR 513 billion, BNP Paribas Investment
Partners is the 6th-largest asset manager in Europe and the 15th-largest in the world. Fortis
Mutual Fund have been acquired by BNP Paribas Asset Management, Accordingly, all
existing schemes of Fortis Mutual Fund has been renamed with BNP Paribas with effect from
October 19, 2010.
BNP PARIBAS TAX ADVANTAGE PLAN
The investment objective of the Scheme is to generate long-term capital growth from a
diversified and actively managed portfolio of equity and equity related securities along with
income tax rebate, as may be prevalent from time to time.
Scheme details
Launch date Dec 20, 2005
55
Load Details
Entry Load Nil
Exit Load 0.00%
3.2.11 RELIGARE INVESCO ASSET MANAGEMENT COMPANY PRIVATE

LIMITED
Religare Invesco Asset Management Company Private Limited, the domestic asset
management arm of Religare, is the country‘s 13th largest mutual fund house by AUM. With
nearly 2,50,000 folios, we have a presence in 58 business locations across 55 cities within the
country.
A commitment to building a strong, process driven organization that follows a team approach
rather than revolving around star fund managers is central to our success. We cater to both
individual investors and institutional clients through mutual funds and sub-advised portfolios.
We have successfully forayed into managing offshore funds as well.
Our core investment philosophy leverages the inefficiency of equity markets, by relying on
sound research and disciplined portfolio management. Our equity investment philosophy is a
matrix of company, industry, technical and economic analysis. Our fixed income investments
focus on optimizing the risk-adjusted returns by investing in high credit-quality assets,
managing interest rate risk and minimizing liquidity risks. Lotus India Mutual Fund renames
as Religare Mutual Fund w.e.f. February 5, 2009.
56
RELIGARE TAX PLAN
To generate long term capital growth from a diversified portfolio of predominantly equity and
equity related securities.
Scheme details
Load Details
Entry Load Nil
Exit Load 0.00%
3.2.12 KOTAK MAHINDRA ASSET MANAGEMENT COMPANY LIMITED
Kotak Mahindra Asset Management Company Limited is privately owned investment

manager. The firm manages equity and fixed income, and balanced mutual funds for its
clients. It also manages exchange traded funds for its clients. The firm was founded in 1998
and is based in Mumbai, India. Kotak Mahindra Asset Management Company Limited
operates as a subsidiary of Kotak Mahindra Bank Limited.
KOTAK TAX SAVER
To generate long-term capital appreciation from a diversified portfolio of equity and equity
related securities and enable investors to avail the income tax rebate, as permitted from time
to time.
57
Scheme details
Launch date Oct 28, 2005
Load Details
Entry Load Nil
Exit Load 0.00%
3.2.13 ING INVESTMENT MANAGEMENT (INDIA) PVT. LTD.
About ING Group
ING Group is a global financial institution of Dutch origin with 94,500 employees. ING
offers banking, insurance and asset management services to more than 67 million clients in
over 40 countries. The clients are individuals, families, small businesses, large corporations,
institutions and governments. ING comprises a broad spectrum of prominent businesses that
increasingly serve their clients under the ING brand.
ING Investment Management
At ING Investment Management, we provide a comprehensive range of investment solutions

and services to our clients and partners. We manage assets for institutional clients, fund
distributors and the ING labels.
58
ING Investment Management has nearly €322 billion assets under management. Worldwide
2800 professionals watch over our clients‘ money. We operate along regional lines with
centers of expertise in Europe, Americas and Asia-Pacific. ING Investment Management is
the principal asset manager of ING Group. Against the background of ING Group realizing
its global ambitions, ING Investment Management has also expanded across borders.
Nowadays we are active in well over 25 countries.
ING in India:
In India, ING is present in all three fields of banking, insurance and asset management in the
form of ING Vysya Bank, ING Life Insurance and ING Investment Management respectively.
The presence in all three fields signifies the importance that the group attaches to the Indian
markets and the group's operations here, as well as its bullish future outlook on the country.
ING Investment Management – India
ING Investment Management (I) Pvt. Ltd has been associated with innovation and responsive
adaptability with sharp minds at work. ING Investment Management has sealed a position of
strength and is considered as one of the top contenders to challenge the market leaders. ING
Investment Management has enjoyed many firsts and has always maintained a pioneering
outlook.
ING Investment Management India operates under two divisions
Mutual Fund
Under the Mutual Fund division, ING offers a range of equity, debt and alternative asset class
funds in Single Manager & Multi Manager category. Each fund follows a stringent
investment process backed by in house research. Multi Manager business offers open
architecture, zero brand bias and active management. The belief to construct a Multi Manager
fund is not by simply combining the third party mutual funds with the best performance
records. Instead, use core research and proprietary investment tools to blend funds which
offer the potential for superior, consistent performance in the future.
59
Portfolio Management Service (PMS)
ING Private is the umbrella brand of ING Investment Management (India) Pvt. Ltd. in India
for all PMS product offerings. This exclusive offering especially created for high net worth
individuals and institutional investors, offers investment solutions that are built on ING‘s
global and local quantitative strategy expertise, using years of in-depth research that together
enable innovation in product design.
ING TAX SAVING FUND

To generate medium to long term growth of capital along with income tax rebate.
Scheme details
Launch date Mar 12, 2004
Load Details
Entry Load Nil
Exit Load 0.00%
60
CHAPTER 4
RESULTS, ANALYSIS & DISCUSSION
61
4.1 INTRODUCTION
This chapter deals with analysis and interpretation of fund and market return in
relationship with ELSS.
4.2 SBI MAGNUM TAX GAIN
Table 4.1
SBI Magnum Tax Gain Quarterly Return
Year Q1 Q2 Q3 Q4 Average
2012 16.86 0.39 9.37 4.65 7.8175
2011 -7.97 -1.35 -8.37 -8.05 -6.435
2010 0.05 2.89 9.55 0.18 3.1675
2009 -0.26 47.69 18.58 6.72 18.1825
2008 -25.62 -17.06 -4.58 -23.33 -17.6475

Inference
From the table4.1, the four quarters of year 2008, there is a negative return due to the
financial crisis. The average return is -17.6475 which a loss is for the investor. For the year
2009, there was a recovery from the financial crisis which made the return to jump back to
positive figures for the Q2, Q3 and Q4 with an average return of 18.1825. In the year 2010 all
quarter had positive return with average return of 3.1675. In 2011 return fell back to negative
in all quarter with an average return of -6.435. In 2012 return back to positive return for all
quarter with an average return of 7.817
62
Figure 4.1
Comparison of Quarterly Return
60
50
40
30 Q1
20
R Q2
e 10
Q3
t 0
u Q4
r 2012 2011 2010 2009 2008
-10
n
-20
-30
Year
Table: 4.2
SBI Magnum Tax Gain Return V/S the Index return
Year Rp Rm
2008 -54.86 -52.45
2009 86.41 81.03
2010 12.98 17.43
2011 -23.50 -24.64
2012 34.29 25.70
Total 55.32 47.07
Arp 11.06 SDRp 26.57
Arm 9.414 SDRm 27.15
Beta 0.90 Sharpe 0.03
63
Inference
The fund has performed fairly; the return of the fund is greater for the period 2009, and 2012.
The fund has fairly performed in 2010. In 2008 and 2011 fund return and market index return
at negative zone due to financial crisis. In 2009 it has increased by 86.41 at positive zone. The
average return of the fund is also satisfactory compared to the benchmark index mean. The
Beta of this scheme was 0.90 which shows that it is less volatile and it has lesser risks than
compared to the benchmark index. Its standard deviation was at 26.57 not much comparable
to that of the benchmark at 27.15 has lower risks.
Figure 4.2
Comparison of Fund Return and Index Return
100
80
60
R 40
e
t 20 Rp
u 0 Rm
r -20 2008 2009 2010 2011 2012
n
-40
-60
-80
Year
64
4.3 BIRLA SUN LIFE TAX RELIEF 96
Table: 4.3
Birla Sun Life Tax Relief 96 Quarterly Return
2012 15.73 -0.27 10.29 7.31 8.265
2011 -9.53 -1.32 -11.71 -10.71 -8.3175
2010 0.21 4.44 11.07 -2.4 3.33
2009 -3.13 59.66 22.68 6.87 21.52
2008 -32.11 -21.62 -3.95 -26.96 -21.16

Inference
For the four quarters of year 2008, there is a negative return due to the financial crisis. The
average return is -21.16 which a loss is for the investor. For the year 2009, there was a
recovery from the financial crisis which made the return to jump back to positive figures for
the Q2, Q3 and Q4 with an average return of 21.52. In the year 2010 Q1, Q2, Q3 quarter had
positive return with average return of 3.33. In 2011 return fell back to negative in all quarter
with an average return of -8.3175. In 2012 return back to positive return for Q1, Q3, Q4with
an average return of 8.265.
Figure 4.3
80
60
40 Q1
Return 20 Q2
0 Q3
Q4
2012 2011 2010 2009 2008
-20
-40
Year
65
Table: 4.4
Birla Sun Life Tax Relief 96 V/S Index Return
Year Rp Rm
2008 -62.67 -52.45
2009 102.77 81.03
2010 13.46 17.43
2011 -29.62 -24.64
2012 36.60 25.70
Total 60.54 47.07
Arp 12.108 SDRp 31.50
Arm 9.414 SDRm 27.15
66
Inference
From the Table 4.4, the fund has performed fairly; the return of the fund is greater for the
period 2009, and 2012. The fund has fairly performed in 2010. In 2008 and 2011 fund return
and market index return at negative zone due to financial crisis. In 2009 it has increased by
102.77 at positive zone. The average return of the fund is also satisfactory compared to the
benchmark index mean. The Beta of this scheme was 1.05 which shows that it is more
volatile and it has larger risks than compared to the benchmark index. Its standard deviation
was at 31.50, which is much deviation from the normal return to that of the benchmark at
27.15 has lower risks. The standard deviation of fund return and Index return is satisfactory
Figure 4.4
120
100
80
R 60
e 40
t 20 Rp
u
r 0 Rm
n -20 2008 2009 2010 2011 2012
-40
-60
-80
Year
67
4.4 HDFC TAXSAVER
Table 4.5
HDFC Tax Saver Quarterly Return
2012 15.71 -2.9 6.59 5.71 4
2011 -6.49 1.09 -11.47 -7.54 -6.1025
2010 4.39 6.12 14.82 -0.62 6.1775
2009 -1.93 51.17 24.92 7.48 20.41
2008 -25.58 -16.82 4.93 -25.41 -15.72

Inference
From the Table 4.5, the four quarters of year 2008, there is a negative return due to the
financial crisis, but had a positive return for the Q3. The average return is -15.72 which is a
loss for the investor. For the year 2009, there was a recovery from the financial crisis which
made the return to jump back to positive figures for the Q2, Q3 and Q4 with an average
return of 20.41. In the year 2010 quarter had positive return for Q1, Q2, and Q3 with average
return of 6.1775. In 2011 return fell back to negative in all quarter with an average return of
-6.1025. In 2012 return back to positive return for all quarter with an average return of 4.
Figure 4.5
60
50
40
30 Q1
20
Return
Q2
10
Q3
0
Q4
2012 2011 2010 2009 2008
-10
-20
-30
Year
68
Table: 4.6
HDFC TAXSAVER Return V/S the Index return
Year Rp Rm
2008 -51.55 -52.45
2009 99.07 81.03
2010 26.42 17.43
2011 -22.62 -24.64
2012 26.59 25.70
Total 77.91 47.07
Arp 15.582 SDRp 26.54
Arm 9.414 SDRm 27.15
69
Inference
period 2009, 2010 and 2012. In 2008 and 2011 fund return and market index return at
negative zone due to financial crisis. In 2009 it has increased by 99.07 at positive zone. The
Figure 4.6
120
100
80
R 60
e 40
t 20 Rp
u
r 0 Rm
n -20 2008 2009 2010 2011 2012
-40
-60
-80
Year
70
4.5 ICICI PRUDENTIAL TAX PLAN
Table: 4.7
ICICI Prudential Tax Plan Quarterly Return
2012 18.28 0.13 8.18 7.42 8.5025
2011 -6.69 0.56 -10.47 -9.48 -6.52
2010 4.64 3.77 12.29 1.79 5.6225
2009 -0.91 51.11 25.62 12.71 22.1325
2008 -28.95 -9.83 -7.51 -25.75 -18.0175

Inference
positive figures for the Q2, Q3 and Q4 with an average return of 22.1325. In the year 2010,
all quarter had positive return with average return of 5.6225. In 2011 return fell back to
negative inQ1, Q3, Q4 quarter with an average return of -6.52. In 2012 return back to positive
return for all the quarter with an average return of 8.5025.
Figure 4.7
60
50
40
30
20 Q1
Return 10 Q2
0 Q3
-10 2012 2011 2010 2009 2008 Q4
-20
-30
-40
Year
71
Table 4.7
ICICI Prudential Tax Plan V/S Index Return
Year Rp Rm
2008 -56.03 -52.45
2009 112.00 81.03
2010 24.11 17.43
2011 -23.96 -24.64
2012 37.63 25.70
Total 93.75 47.07
Arp 18.75 SDRp 28.39
Arm 9.414 SDRm 27.15
72
Inference
Figure 4.4
140
120
100
80
R
e 60
t 40 Rp
u 20 Rm
r 0
n -20 2008 2009 2010 2011 2012
-40
-60
-80
Year
73
4.6 HDFC LONG TERM ADVANTAGE
Table: 4.9
HDFC Long Term Advantage Quarterly Return
2012 17.43 -1.72 7.56 3.78 6.7625
2011 -6.64 0.29 -10.79 -8.38 -6.38
2010 2.65 6.18 15.56 1.91 6.575
2009 -3.58 52.45 49.93 7.14 18.985
2008 -25.49 -11.51 -3.24 -25.37 -16.4025

Inference
with only Q2 in positive with an average return of -6.38. In 2012 return back to positive
return for Q1, Q3, Q4with an average return of 6.7625
Figure 4.9
60
50
40
30 Q1
20
Return Q2
10
Q3
0
Q4
2012 2011 2010 2009 2008
-10
-20
-30
Year
74
Table 4.10
HDFC Long Term Advantage V/S Index Return
Year Rp Rm
2008 -52.39 -52.45
2009 88.89 81.03
2010 28.37 17.43
2011 -23.48 -24.64
2012 28.83 25.70
Total 70.22 47.07
Arp 14.044 SDRp 25.98
Arm 9.414 SDRm 27.15
75
Inference
period 2009, and 2012. The fund has fairly performed in 2010. In 2008 and 2011 fund return
and market index return at negative zone due to financial crisis. In 2009 it has increased by
88.89 at positive zone. The average return of the fund is also satisfactory compared to the
benchmark index mean. The Beta of this scheme was 0.16 which shows that it is less volatile
and it has lesser risks than compared to the benchmark index. Its standard deviation was at
25.98, which is less volatile from the normal return to that of the benchmark at 27.15 has
lower risks.
Figure 4.10
100
80
60
R
e 40
t 20 Rp
u Rm
r 0
n 2008 2009 2010 2011 2012
-20
-40
-60 Year
76
4.7BIRLA SUNLIFE TAX PLAN
Table: 4.11
Birla Sunlife Tax Plan Quarterly Return
2012 15.76 -0.33 10.23 7.22 8.22
2011 -4.15 -1.74 -8.45 -10.54 -6.22
2010 -0.24 0.51 12.2 0.8 3.3175
2009 -0.29 42.76 18.6 5.61 16.67
2008 -30.66 -15.17 -5.1 -24.22 -18.7875

Inference
positive figures for the Q2, Q3 and Q4 with an average return of 16.67. In the year 2010, Q2,
Q3, Q4 quarter had positive return with average return of 5.6225. In 2011 return fell back to
negative in all quarter with an average return of -6.22. In 2012 return back to positive return
for Q1, Q3, Q4 quarter with an average return of 8.22
Figure 4.11
50
40
30
20 Q1
10
Return Q2
0
Q3
-10 2012 2011 2010 2009 2008
Q4
-20
-30
-40
Year
77
Table 4.12
Birla Sunlife Tax Plan V/S Index Return
Year Rp Rm
2008 -57.69 -52.45
2009 78.31 81.03
2010 13.40 17.43
2011 -22.86 -24.64
2012 36.38 25.70
Total 47.54 47.07
Arp 9.508 SDRp 26.21
Arm 9.414 SDRm 27.15
78
Inference
From the Table 4.12, the fund has performed fairly; the return of the fund is in positive for the
compared to the benchmark index. Its standard deviation was at 26.21, which is less volatile
from the normal return to that of the benchmark at 27.15 has lower risks.
Figure4.11
100
80
60
R 40
e
t 20 Rp
u 0 Rm
r -20 2008 2009 2010 2011 2012
n
-40
-60
-80
Year
79
4.8 PRINCIPAL PERSONAL TAX SAVER
Table: 4.13
Principal Personal Tax Saver Quarterly Return
2012 16.02 0.85 9.1 5.62 7.8975
2011 -8.05 -2.19 -12.59 -9.27 -8.025
2010 0.21 4.02 1.92 -1.25 3.975
2009 -2.38 48.42 21.84 5.85 18.4325
2008 -31.15 -14.6 -8.45 -29.24 -20.86

Inference
all quarter had positive return except for the Q4, with average return of 3.975. In 2011 return
fell back to negative in all quarter with an average return of -8.025. In 2012 return back to
positive return for all the quarter with an average return of 7.8975
Figure 4.13
60
50
40
30
20 Q1
Return 10 Q2
0 Q3
-10 2012 2011 2010 2009 2008 Q4
-20
-30
-40
Year
80
Table 4.14
Principal Personal Tax Saver V/S Index Return
Year Rp Rm
2008 -61.91 -52.45
2009 86.87 81.03
2010 16.23 17.43
2011 -28.67 -24.64
2012 34.83 25.70
Total 47.35 47.07
Arp 9.47 SDRp 28.28
Arm 9.414 SDRm 27.15
Beta 0.95 Sharpe -0.06
81
Inference
From the Table 4.14, the fund has performed poorly; the return of the fund is in positive for
the period 2009, 2010 and 2012. In 2008 and 2011 fund return and market index return at
compared to the benchmark index. Its standard deviation was at 28.28 which is more volatile
Figure 4.14
100
80
60
R 40
e
t 20 Rp
u 0 Rm
r -20 2008 2009 2010 2011 2012
n
-40
-60
-80
Year
82
4.9 FRANKLIN INDIA TAX SHIELD
Table: 4.15
Franklin India Tax Shield Quarterly Return
2012 14.47 -1.18 7.66 6.24 6.7975
2011 -3.19 0.19 -5.56 -6.77 -4.0025
2010 4.95 1.74 14.24 1.23 5.5375
2009 -1.91 49.52 14.91 8.28 16.95
2008 -25.63 -14.09 0.23 -20.69 -15.045

Inference
financial crisis except shown a positive of 0.23 in Q3 . The average return is -15.045 which a
loss is for the investor. For the year 2009, there was a recovery from the financial crisis which
made the return to jump back to positive figures for the Q2, Q3 and Q4 with an average return
of16.95. In the year 2010, all quarter had positive return with average return of 5.5375. In
2011 return fell back to negative inQ1, Q3, Q4 quarter with an average return of -4.0025. In
2012 return back to positive return for Q1, Q3, Q4 quarter with an average return of 6.7975
Figure 4.15
60
50
40
30 Q1
Return 20 Q2
10
Q3
0
Q4
-10 2012 2011 2010 2009 2008
-20
-30
Year
83
Table 4.16
Franklin India Tax Shield V/S Index Return
Year Rp Rm
2008 -49.22 -52.45
2009 78.81 81.03
2010 23.47 17.43
2011 -15.19 -24.64
2012 29.38 25.70
Total 67.25 47.07
Arp 13.45 SDRp 23.82
Arm 9.414 SDRm 27.15

84
Inference
Figure 4.16
100
80
60
R
e 40
t 20 Rp
u
0 Rm
r
n -20 2008 2009 2010 2011 2012
-40
-60
Year
85
4.10 DSP BLACKROCK TAX SAVER
Table 4.17
DSP BLACKROCK Tax Saver Quarterly Return
2012 16.79 0.79 9.68 8.29 8.8875
2011 -8.3 -0.78 -11.3 -9.14 -7.38
2010 4.49 5.86 12.54 -0.98 5.4775
2009 -3.28 47.9 21.28 6.2 18.025
2008 -32.75 -10.49 -8.19 -21.63 -18.265

Inference
From the Table 4.17, for the four quarters of year 2008, there is a negative return due to the
financial crisis. The average return is -18.265 which is a loss for the investor. For the year
Q1, Q2, Q3 quarter had positive return with average return of 5.4775. In 2011 return fell back
to negative in all quarter with an average return of -7.38. In 2012 return back to positive
return for all quarter with an average return of 8.88875
Figure 4.17
60
50
40
30
20 Q1
Returen
10 Q2
0 Q3
-10 2012 2011 2010 2009 2008 Q4
-20
-30
-40
Year
86
Table 4.18
DSP BLACKROCK Tax Saver V/S the Index return
Year Rp Rm
2008 -56.68 -52.45
2009 84.22 81.03
2010 23.26 17.43
2011 -26.68 -24.64
2012 39.81 25.70
Total 63.93 47.07
Arp 12.786 SDRp 26.00
Arm 9.414 SDRm 27.15

87
Inference
Figure 4.18
100
80
60
R 40
e 20
t Rp
u 0 Rm
r -20 2008 2009 2010 2011 2012
n
-40
-60
-80
Year
88
4.11 TATA TAX SAVINGS FUND
Table 4.19
TATA Tax Savings Fund Quarterly Return
2012 12.07 -0.42 829 5.39 6.325
2011 -5.77 0.15 7.58 -6.37 -4.8925
2010 1.15 2.96 11.1 1.98 4.295
2009 -2 46.3 16.97 7.53 17.205
2008 -27.56 -16.03 -2.86 -23.34 -17.6975

Inference
financial crisis. The average return is -17.6975 which is a loss for the investor. For the year
positive figures for the Q2, Q3 and Q4 with an average return of 17.205.In the year 2010 all
in the first quarter and last with an average return of -4.8925. In 2012 return back to positive
return for Q1, Q3, Q4 quarter with an average return of 6.325
Figure 4.19
60
50
40
30
20 Q1
Return 10 Q2
0 Q3
-10 2012 2011 2010 2009 2008 Q4
-20
-30
-40
Year
89
Table 4.20
TATA Tax Savings Fund V/S the Index return
Year Rp Rm
2008 -55.17 -52.45
2009 80.37 81.03
2010 17.97 17.43
2011 -18.34 -24.64
2012 27.32 25.70
Total 52.14 47.07
Arp 10.428 SDRp 25.14
Arm 9.414 SDRm 27.15
90
Inference
Figure 4.18
100
80
60
R 40
e
t 20 Rp
u 0 Rm
r -20 2008 2009 2010 2011 2012
n
-40
-60
-80
Year
91
4.12 HSBC TAX SAVER EQUITY
Table 4.21
HSBC TAX SAVER Equity Quarterly Return
2012 15.58 1.87 9.394 7.33 8.68
2011 -8.39 -1.36 -10.6 -6.22 -6.6425
2010 2.08 2.4 12.45 0.3 4.3025
2009 -1.77 42.63 19.53 7.53 16.98
2008 -32.11 -10.53 -3.34 -17.72 -15.925

Inference
in all quarter with an average return of -6.6425. In 2012 return back to positive return for all
quarter with an average return of 8.68.
Figure 4.21
50
40
30
20 Q1
10
Return Q2
0
Q3
-10 2012 2011 2010 2009 2008
Q4
-20
-30
-40
Year
92
Table4.22
HSBC Tax Saver Equity V/S the Index return
Year Rp Rm
2008 -51.69 -52.45
2009 80.08 81.03
2010 17.90 17.43
2011 -24.24 -24.64
2012 38.93 25.70
Total 60.98 47.07
Arp 12.196 SDRp 24.04
Arm 9.414 SDRm 27.15
93
Inference
Figure 4.22
100
80
R 60
40
e
t 20 Rp
u
0 Rm
r
n -20 2008 2009 2010 2011 2012
-40
-60
Year
94
4.13 BNP PARIBAS TAX ADVANTAGE PLAN
Table 4.23
BNP PARIBAS Tax Advantage Plan Gain Quarterly Return
2012 15.23 0.96 7.37 7.53 7.7725
2011 -6.61 3.38 -4.85 -7.47 -3.8875
2010 1.09 4.6 11.49 -2.52 3.665
2009 -1.7 39.2 19.35 4.2 15.2625
2008 -38.05 -19.41 -9.45 -23.8 -22.6775

Inference
Q1, Q2, Q3 quarters had positive return with average return of 3.665. In 2011 return fell back
to negative in Q1, Q3, Q4 quarters with an average return of -3.8875. In 2012 return back to
positive return for all quarter with an average return of 7.7725
Figure 4.23
50
40
30
20
10 Q1
Return 0 Q2
-10 2012 2011 2010 2009 2008 Q3
-20 Q4
-30
-40
-50
Year
95
Table 4.24
BNP PARIBAS Tax Advantage Plan V/S the Index return
Year Rp Rm
2008 -65.56 -52.45
2009 70.18 81.03
2010 14.92 17.43
2011 -15.00 -24.64
2012 34.31 25.70
Total 38.85 47.07
Arp 7.77 SDRp 24.78
Arm 9.414 SDRm 27.15
96
Inference
From the Table 2.24, the fund has performed poorly; the return of the fund is in positive for
average return of the fund is not satisfactory compared to the benchmark index mean. The
Figure 4.24
100
80
60
R 40
e
t 20 Rp
u 0 Rm
r -20 2008 2009 2010 2011 2012
n
-40
-60
-80
Year
97
4.14 RELIGARE TAX PLAN
Table 4.25
RELIGARE Tax Plan Gain Quarterly Return
2012 14.46 -.75 8.17 6.04 6.98
2011 -6.13 3.55 -8.02 -9.32 -4.98
2010 3.35 6.04 12.88 -1.27 5.25
2009 -4.34 43.7 23.14 8.4 17.725
2008 -25.49 -19.35 -1.42 -14.78 -15.26

Inference
Q1, Q2, Q3 quarters had positive return with average return of 5.25. In 2011 return fell back
to negative in Q1, Q3, Q4 quarters with an average return of -4.98. In 2012 return back to
positive return for Q1, Q3, Q4 quarters with an average return of 6.98
Figure 4.25
50
40
30
20 Q1
10 Q2
Q3
0
Q4
2012 2011 2010 2009 2008
-10
-20
-30
98
Table 4.26
RELIGARE Tax Plan V/S the Index return
Year Rp Rm
2008 -49.51 -52.45
2009 83.49 81.03
2010 22.13 17.43
2011 -18.92 -24.64
2012 30.31 25.70
Total 67.5 47.07
Arp 13.5 SDRp 24.77
Arm 9.414 SDRm 27.15
99
Inference
From Table 4.26, the fund has performed fairly well; the return of the fund is in positive for
Figure 4.26
100
80
60
R
e 40
t 20 Rp
u Rm
r 0
n 2008 2009 2010 2011 2012
-20
-40
-60 Year
100
4.15 KOTAK TAX SAVER
Table 4.27
KOTAK Tax Saver Quarterly Return
2012 17.06 .81 9.13 5.81 8.2025
2011 -7.92 -0.24 -11.75 -8.76 -7.1675
2010 2.6 3.62 14.2 -1.22 4.8
2009 -4.27 47.41 18.38 4.76 16.57
2008 -30.34 -17.86 -7.26 -23.45 -19.7275

Inference
From Table 4.27, the four quarters of year 2008, there is a negative return due to the financial
crisis. The average return is -19.7275 which a loss is for the investor. For the year 2009, there
was a recovery from the financial crisis which made the return to jump back to positive
figures for the Q2, Q3 and Q4 with an average return of 16.57. In the year 2010, Q1, Q2, Q3
quarters had positive return with average return of 4.8. In 2011 return fell back to negative in
all quarters with an average return of -7.1675. In 2012 return back to positive return for all
quarters with an average return of 8.2025.
Figure4.27
60
50
40
30
20 Q1
Return 10 Q2
0 Q3
-10 2012 2011 2010 2009 2008 Q4
-20
-30
-40
Year
101
Table 4.28
KOTAK Tax Saver V/S the Index return
Year Rp Rm
2008 -59.38 -52.45
2009 74.99 81.03
2010 19.93 17.43
2011 -26.03 -24.64
2012 36.25 25.70
Total 45.76 47.07
Arp 9.152 SDRp 28.87
Arm 9.414 SDRm 27.15
102
Inference
compared to the benchmark index. Its standard deviation was at 28.87, which is more volatile
Figure 4.28
100
80
60
R 40
e
t 20 Rp
u 0 Rm
r -20 2008 2009 2010 2011 2012
n
-40
-60
-80
Year
103
4.16 ING TAX SAVING FUND
Table 4.29
ING Tax Saving Fund Quarterly Return
2012 9.06 -.98 5.75 5.26 4.7725
2011 -5.48 -1.45 -9.22 -6.96 -5.7775
2010 2.55 7.6 12.25 1.65 6.0125
2009 -2.3 52.39 23.9 5.85 19.96
2008 -33.39 -12.79 -12.04 -31.46 -22.42

Inference
positive figures for the Q2, Q3 and Q4 with an average return of 19.96. In the year 2010, all
quarters had positive return with average return of 6.0125. In 2011 return fell back to negative
in all quarters with an average return of -5.7775. In 2012 return back to positive return for
Q1, Q3, Q4 quarters with an average return of 4.7725
Figure4.29
60
50
40
30
20 Q1
Return
10 Q2
0 Q3
-10 2012 2011 2010 2009 2008 Q4
-20
-30
-40
Year
104
Table4.30
ING Tax Saving Fund V/S the Index return
Year Rp Rm
2008 -64.98 -52.45
2009 95.26 81.03
2010 25.90 17.43
2011 -21.32 -24.64
2012 20.21 25.70
Total 55.07 47.07
Arp 11.014 SDRp 30.05
Arm 9.414 SDRm 27.15
105
Inference
Beta of this scheme was 100 which show that it is volatile and it has risks than compared to
the benchmark index. Its standard deviation was at 30.05, which is more volatile from the
normal return to that of the benchmark at 27.15 has lower risks.
Figure 4.30
120
100
80
R 60
e 40
t 20 Rp
u
r 0 Rm
n -20 2008 2009 2010 2011 2012
-40
-60
-80
Year
106
Table 4.31
Comparative Performance Analysis based on Sharps Ratio
Schemes Ranking
HSBC Tax Saver Equity 1
Religare Tax Plan 2
Franklin India Tax Shield 3
ICICI Prudential Tax Plan 4
HDFC Tax Saver 5
HDFC Long Term Advantage 6
DSP BlackRock Tax Saver 7
TATA Tax Savings Fund 8
Principal Personal Tax Saver 9
SBI Magnum Tax Gain 10

Birla Sun Life Tax Relief 96 11
Birla SunLife Tax Plan 12
ING Tax Saving Fund 13
BNP Paribas Tax Advantage Plan 14
Kotak Tax Saver 15
107
Hypothesis
Ho: there is no relationship between the scheme return and index return
H1: there is significant relation between scheme return and index return
Taking the correlation of the first 5 ranked ELSS schemes with its index return
Table 4.32
Top 5 Schemes Return and its Correlation to Index Return
Schemes Correlation Inference

HSBC Tax Saver Equity 0.993597 Highly Positive Correlation
Religare Tax Plan 0.999681 Highly Positive Correlation
Franklin India Tax Shield 0.997763 Highly Positive Correlation
ICICI Prudential Tax Plan 0.998663 Highly Positive Correlation
HDFC Tax Saver 0.997295 Highly Positive Correlation
From the Table 4.32, we can see that all the top 5 schemes is highly positive correlation to the
index return
Therefore reject null hypothesis, that is, there is significant relation between scheme return
and index return
108
CHAPTER 5
FINDINGS, CONCLUSION AND RECOMMENDATION
109
5.1 FINDINGS

All funds had a step declined in the year 2008 and 2010 because of financial crisis
and melt down stock market.

The analysis of Mutual funds schemes based on NAV returns for a period of 5 years
ranked.

Some Equity Linked Savings Schemes have shown better returns than their respective
benchmark index.

The beta of Birla Sun Life Tax Relief 96, Principal Personal Tax Saver Kotak Tax
Saver, ING Tax Saving Fund suggest that they are highly sensitive be relative to the
market as a whole.

The beta of SBI Magnum Tax Gain, HDFC Tax Saver, ICICI Prudential Tax Plan,
HDFC Long Term Advantage, Birla Sunlife Tax Plan, Franklin India Tax Shield, DSP
BlackRock Tax Saver, TATA Tax Savings Fund, HSBC Tax Saver Equity, BNP
Paribas Tax Advantage Plan, Religare Tax Plan Gain suggest that they are less
sensitive be relative to the market as a whole.

The performance measures of all Equity Linked Savings Schemes are not that
satisfactory on an average, but some are having fairly good return.

SBI MAGNUM TAX GAIN the four quarters of year 2008, there is a negative return
due to the financial crisis. The average return is -17.6475 which a loss is for the
investor. For the year 2009, there was a recovery from the financial crisis which made
the return to jump back to positive figures for the Q2, Q3 and Q4 with an average
return of 18.1825. In the year 2010 all quarter had positive return with average return
of 3.1675. In 2011 return fell back to negative in all quarter with an average return of
-6.435. In 2012 return back to positive return for all quarter with an average return of
7.817.
110

SBI MAGNUM TAX GAIN, the fund has performed fairly; the return of the fund is
greater for the period 2009, and 2012. The fund has fairly performed in 2010. In 2008
and 2011 fund return and market index return at negative zone due to financial crisis.
In 2009 it has increased by 86.41 at positive zone.

SBI MAGNUM TAX GAIN, the average return of the fund is also satisfactory
compared to the benchmark index mean. The Beta of this scheme was 0.90 which
shows that it is less volatile and it has lesser risks than compared to the benchmark
index. Its standard deviation was at 26.57 not much comparable to that of the
benchmark at 27.15 has lower risks. The sharps ratio is 0.03.

For the four quarters of year 2008, BIRLA SUN LIFE TAX RELIEF 96, there is a
negative return due to the financial crisis. The average return is -21.16 which a loss is
for the investor. For the year 2009, there was a recovery from the financial crisis
which made the return to jump back to positive figures for the Q2, Q3 and Q4 with an
average return of 21.52. In the year 2010 Q1, Q2, Q3 quarter had positive return with
average return of 3.33. In 2011 return fell back to negative in all quarter with an
average return of -8.3175. In 2012 return back to positive return for Q1, Q3, Q4with

BIRLA SUN LIFE TAX RELIEF 96, the fund has performed fairly; the return of the
fund is greater for the period 2009, and 2012. The fund has fairly performed in 2010.
In 2008 and 2011 fund return and market index return at negative zone due to
financial crisis. In 2009 it has increased by 102.77 at positive zone.

BIRLA SUN LIFE TAX RELIEF 96,The average return of the fund is also
satisfactory compared to the benchmark index mean. The Beta of this scheme was
1.05 which shows that it is more volatile and it has larger risks than compared to the
benchmark index. Its standard deviation was at 31.50, which is much deviation from
the normal return to that of the benchmark at 27.15 has lower risks. The standard
deviation of fund return and Index return is satisfactory. The sharp ratio is 0.02
111

HDFC TAXSAVER, the four quarters of year 2008, there is a negative return due to
the financial crisis, but had a positive return for the Q3. The average return is -175.72
which is a loss for the investor. For the year 2009, there was a recovery from the
financial crisis which made the return to jump back to positive figures for the Q2, Q3
and Q4 with an average return of 20.41. In the year 2010 quarter had positive return
for Q1, Q2, and Q3 with average return of 6.1775. In 2011 return fell back to negative
in all quarter with an average return of -6.1025. In 2012 return back to positive return
for all quarter with an average return of 4.

HDFC TAXSAVER, the fund has performed fairly; the return of the fund is greater
for the period 2009, 2010 and 2012. In 2008 and 2011 fund return and market index
return at negative zone due to financial crisis. In 2009 it has increased by 99.07 at
positive zone. The average return of the fund is also satisfactory compared to the
benchmark index mean. The Beta of this scheme was 0.88 which shows that it is less
volatile and it has lesser risks than compared to the benchmark index. Its standard
deviation was at 26.54 not much comparable to that of the benchmark at 27.15 has
lower risks. The sharps ratio is 0.18.

ICICI PRUDENTIAL TAX PLAN, the four quarters of year 2008, there is a negative
return due to the financial crisis. The average return is -18.0175 which a loss is for the
return of 22.1325. In the year 2010, all quarter had positive return with average return
of 5.6225. In 2011 return fell back to negative inQ1, Q3, Q4 quarter with an average
return of -6.52. In 2012 return back to positive return for all the quarter with an
average return of 8.5025.

ICICI PRUDENTIAL TAX PLAN, the fund has performed fairly; the return of the
fund is greater for the period 2009, 2010 and 2012. In 2008 and 2011 fund return and
market index return at negative zone due to financial crisis. In 2009 it has increased
by 112.00 at positive zone. The average return of the fund is also satisfactory
112
index. Its standard deviation was at 28.39 not much comparable to that of the
benchmark at 27.15 has lower risks. The sharps ratio for the scheme is 0.18.

HDFC LONG TERM ADVANTAGE, the four quarters of year 2008, there is a
negative return due to the financial crisis. The average return is -16.4025 which a loss
is for the investor. For the year 2009, there was a recovery from the financial crisis
average return of 18.985. In the year 2010 all quarter had positive return with average
return of 6.575. In 2011 return fell back to negative with only Q2 in positive with an
average return of -6.38. In 2012 return back to positive return for Q1, Q3, Q4with an

HDFC LONG TERM ADVANTAGE, the fund has performed fairly; the return of the
fund is greater for the period 2009, and 2012. The fund has fairly performed in 2010.
In 2008 and 2011 fund return and market index return at negative zone due to
financial crisis. In 2009 it has increased by 88.89 at positive zone. The average return
of the fund is also satisfactory compared to the benchmark index mean. The Beta of
this scheme was 0.16 which shows that it is less volatile and it has lesser risks than
compared to the benchmark index. Its standard deviation was at 25.98, which is less
volatile from the normal return to that of the benchmark at 27.15 has lower risks. The
sharps ratio for the scheme is 0.16.

BIRLA SUNLIFE TAX PLAN, the four quarters of year 2008, there is a negative
return of 16.67. In the year 2010, Q2, Q3, Q4 quarter had positive return with average
return of 5.6225. In 2011 return fell back to negative in all quarter with an average
return of -6.22. In 2012 return back to positive return for Q1, Q3, Q4 quarter with an

BIRLA SUNLIFE TAX PLAN, the fund has performed fairly; the return of the fund is
in positive for the period 2009, 2010 and 2012. In 2008 and 2011 fund return and
113
by 78.31 at positive zone. The average return of the fund is also satisfactory compared
to the benchmark index mean. The Beta of this scheme was 0.88 which shows that it
is less volatile and it has lesser risks than compared to the benchmark index. Its
standard deviation was at 26.21, which is less volatile from the normal return to that
of the benchmark at 27.15 has lower risks. The sharps ratio for the scheme is 0.01.

PRINCIPAL PERSONAL TAX SAVER, the four quarters of year 2008, there is a
negative return due to the financial crisis. The average return is 20.86 which a loss is
for the investor. For the year 2009, there was a recovery from the financial crisis
average return of 18.4325. In the year 2010, all quarter had positive return except for
the Q4, with average return of 3.975. In 2011 return fell back to negative in all quarter
with an average return of -8.025. In 2012 return back to positive return for all the
quarter with an average return of 7.8975.

PRINCIPAL PERSONAL TAX SAVER, the fund has performed poorly; the return of
the fund is in positive for the period 2009, 2010 and 2012. In 2008 and 2011 fund
return and market index return at negative zone due to financial crisis. In 2009 it has
increased by 86.87 at positive zone. The average return of the fund is also satisfactory
index. Its standard deviation was at 28.28, which is more volatile from the normal
return to that of the benchmark at 27.15 has lower risks. The sharps ratio for the
scheme is -0.06.

FRANKLIN INDIA TAX SHIELD, the four quarters of year 2008, there is a negative
return due to the financial crisis except shown a positive of 0.23 in Q3 . The average
return is -15.045 which a loss is for the investor. For the year 2009, there was a
recovery from the financial crisis which made the return to jump back to positive
figures for the Q2, Q3 and Q4 with an average return of16.95. In the year 2010, all
quarter had positive return with average return of 5.5375. In 2011 return fell back to
114
negative inQ1, Q3, Q4 quarter with an average return of -4.0025. In 2012 return back
to positive return for Q1, Q3, Q4 quarter with an average return of 6.7975.

FRANKLIN INDIA TAX SHIELD, the fund has performed fairly; the return of the
fund is in positive for the period 2009, 2010 and 2012. In 2008 and 2011 fund return
and market index return at negative zone due to financial crisis. In 2009 it has
index. Its standard deviation was at 23.82, which is less volatile from the normal
scheme is 0.18.

DSP BLACKROCK TAX SAVER, for the four quarters of year 2008, there is a
negative return due to the financial crisis. The average return is -18.265 which is a
loss for the investor. For the year 2009, there was a recovery from the financial crisis
average return of 18.025. In the year 2010, Q1, Q2, Q3 quarter had positive return
with average return of 5.4775. In 2011 return fell back to negative in all quarter with
an average return of -7.38. In 2012 return back to positive return for all quarter with

DSP BLACKROCK TAX SAVER, the fund has performed fairly; the return of the
fund is in positive for the period 2009, 2010 and 2012. In 2008 and 2011 fund return
and market index return at negative zone due to financial crisis. In 2009 it has
index. Its standard deviation was at 26.00, which is less volatile from the normal
scheme is 0.10.
115

TATA TAX SAVINGS FUND, the four quarters of year 2008, there is a negative
return due to the financial crisis. The average return is -17.6975 which is a loss for the
return of 17.205.In the year 2010 all quarter had positive return with average return of
4.285. In 2011 return fell back to negative in the first quarter and last with an average
return of -4.8925. In 2012 return back to positive return for Q1, Q3, Q4 quarter with

TATA TAX SAVINGS FUND, the fund has performed fairly; the return of the fund is

HSBC TAX SAVER EQUITY, the four quarters of year 2008, there is a negative
return of 16.98. In the year 2010 all quarter had positive return with average return of
4.3025. In 2011 return fell back to negative in all quarter with an average return of -
6.6425. In 2012 return back to positive return for all quarter with an average return of
8.68.

HSBC TAX SAVER EQUITY, the fund has performed fairly; the return of the fund is
116

BNP PARIBAS TAX ADVANTAGE PLAN, the four quarters of year 2008, there is a
negative return due to the financial crisis. The average return is -22.6775 which a loss
is for the investor. For the year 2009, there was a recovery from the financial crisis
average return of 15.2625. In the year 2010, Q1, Q2, Q3 quarters had positive return
with average return of 3.665. In 2011 return fell back to negative in Q1, Q3, Q4
quarters with an average return of -3.8875. In 2012 return back to positive return for
all quarter with an average return of 7.7725.

BNP PARIBAS TAX ADVANTAGE PLAN, the fund has performed poorly; the
return of the fund is in positive for the period 2009, 2010 and 2012. In 2008 and 2011
fund return and market index return at negative zone due to financial crisis. In 2009 it
has increased by 70.18 at positive zone. The average return of the fund is not
satisfactory compared to the benchmark index mean. The Beta of this scheme was
0.82 which shows that it is less volatile and it has lesser risks than compared to the
benchmark index. Its standard deviation was at 24.78, which is less volatile from the
normal return to that of the benchmark at 27.15 has lower risks. The sharps ratio for
the scheme is -0.03.

RELIGARE TAX PLAN, the four quarters of year 2008, there is a negative return due
to the financial crisis. The average return is -15.26 which a loss is for the investor. For
the year 2009, there was a recovery from the financial crisis which made the return to
jump back to positive figures for the Q2, Q3 and Q4 with an average return of 17.725.
In the year 2010, Q1, Q2, Q3 quarters had positive return with average return of 5.25.
In 2011 return fell back to negative in Q1, Q3, Q4 quarters with an average return of -
4.98. In 2012 return back to positive return for Q1, Q3, Q4 quarters with an average
return of 6.98.

RELIGARE TAX PLAN, the fund has performed fairly well; the return of the fund is
117
by 83.49 at positive zone. The average return of the fund is not satisfactory compared

KOTAK TAX SAVER, the four quarters of year 2008, there is a negative return due to
the financial crisis. The average return is -19.7275 which a loss is for the investor. For
the year 2009, there was a recovery from the financial crisis which made the return to
jump back to positive figures for the Q2, Q3 and Q4 with an average return of 16.57.
In the year 2010, Q1, Q2, Q3 quarters had positive return with average return of 4.8.
In 2011 return fell back to negative in all quarters with an average return of -7.1675.
In 2012 return back to positive return for all quarters with an average return of
8.2025.

KOTAK TAX SAVER, the fund has performed fairly; the return of the fund is in
positive for the period 2009, 2010 and 2012. In 2008 and 2011 fund return and market
index return at negative zone due to financial crisis. In 2009 it has increased by 74.99
at positive zone. The average return of the fund is not satisfactory compared to the
benchmark index mean. The Beta of this scheme was 0.97 which shows that it is less
volatile and it has lesser risks than compared to the benchmark index. Its standard
deviation was at 28.87, which is more volatile from the normal return to that of the
benchmark at 27.15 has lower risks. The sharps ratio for the scheme is -0.03.

ING TAX SAVING FUND, the four quarters of year 2008, there is a negative return
due to the financial crisis. The average return is -22.42 which a loss is for the investor.
For the year 2009, there was a recovery from the financial crisis which made the
return to jump back to positive figures for the Q2, Q3 and Q4 with an average return
of 19.96. In the year 2010, all quarters had positive return with average return of
6.0125. In 2011 return fell back to negative in all quarters with an average return of -
5.7775. In 2012 return back to positive return for Q1, Q3, Q4 quarters with an average
return of 4.7725.
118

ING TAX SAVING FUND, the fund has performed fairly; the return of the fund is in
positive for the period 2009, 2010 and 2012. In 2008 and 2011 fund return and market
index return at negative zone due to financial crisis. In 2009 it has increased by 95.26
at positive zone. The average return of the fund is not satisfactory compared to the
benchmark index mean. The Beta of this scheme was 100 which show that it is
volatile and it has risks than compared to the benchmark index. Its standard deviation
was at 30.05, which is more volatile from the normal return to that of the benchmark
at 27.15 has lower risks. The sharps ratio for the scheme is -0.01.

HSBC Tax Saver Equity scheme is the having the highest Sharp.

The schemes return is highly correlated to the index return, that is the market
fluctuation has an high impact on the schemes.
5.2 CONCLUSION
Saving money is not enough. Each of us also need to invest the savings intelligently in order
to have enough money available for funding the higher education of one’s children, for
buying a house, or for one’s own golden years.
The study will guide the new investor who wants to invest in mutual fund schemes by
providing knowledge about how to measure the risk and return of particular scrip or mutual
fund schemes of different companies. The biggest advantage of the Mutual Funds is the
diversified investment and transparency in the operation of the Asset management Company.
The study is about understanding and comparing the various tax saving instruments in the
market with focus on the equity linked saving schemes. The performance of various funds is
evaluated using various parameters of risk and return and comparing their performance with
119
its benchmark S&P BSE SENSEX. It is just not the past performance or returns, but
qualitative criteria like reputation and performance of fund house, credentials and expertise of
the fund manager and the other funds managed.
Finally, the fund chosen by the investor should match the risk appetite of the investor. It is
suggested that the equity linked saving scheme should be seriously considered by investors
because of the dual advantage of tax saving and high return.
5.3 SUGGESTIONS

For the scheme, SBI MAGNUM TAX GAIN, beta is less volatile. Hence it is
suggested that the companies should not reallocate their funds according to the
market performance.

For the scheme, BIRLA SUNLIFE TAX PLAN RELIEF 96, the beta of the scheme
shows that it’s more sensitive to the index. Hence it is suggested that the companies
can reallocate their funds according to the market performance.

For the scheme, HDFC TAXSAVER, the beta of the scheme shows that it’s less
sensitive to the index. Hence it is suggested that the companies should not reallocate
their funds according to the market performance.

The beta of ICICI PRUDENTIAL TAX PLAN is high and it is more volatile. Hence
it is suggested that the companies can reallocate their funds according to the market
performance.

The beta of HDFC LONG TERM ADVANTAGE is low and it is less volatile.
Hence it is suggested that the companies should not reallocate their funds according
to the market performance.
120

The beta of BIRLA SUNLIFE TAX PLAN is low and it is less volatile. Hence it is
market performance.

The beta of PRINCIPAL PERSONAL TAX SAVER is high and it is more volatile.
Hence it is suggested that the companies can reallocate their funds according to the
market performance.

The beta of FRANKLIN INDIA TAX SHIELD is high and it is more volatile.
Hence it is suggested that the companies can reallocate their funds according to the
market performance.

The beta of DSP BLACKROCK TAX SAVER is low and it is less volatile. Hence it
is suggested that the companies should not reallocate their funds according to the
market performance.

The beta of TATA TAX SAVINGS FUND is low and it is less volatile. Hence it is
market performance.

The beta of HSBC TAX SAVER EQUITY is low and it is less volatile. Hence it is
market performance.

The beta of BNP PARIBAS TAX ADVANTAGE PLAN is low and it is less volatile.
Hence it is suggested that the companies should not reallocate their funds according
to the market performance.

The beta of RELIGARE TAX PLAN is low and it is less volatile. Hence it is
market performance
121

The beta of KOTAK TAX SAVER is high and it is more volatile. Hence it is
suggested that the companies can reallocate their funds according to the market
performance

The beta of ING TAX SAVING FUND is high and it is more volatile. Hence it is
suggested that the companies can reallocate their funds according to the market
performance

The top 5 schemes are: HSBC TaxSaver Equity, Religare Tax Plan, Franklin India
Tax Shield, ICICI Prudential Tax Plan and HDFC TaxSaver. Investing in HSBC Tax
Saver Equity is the best option in all 15 schemes according to Sharps Index
122
BIBLIOGRAPHY
BOOKS
 nd
Chandra Prasanna, Investment Analysis and Portfolio Management, 2
edition, Tata McGraw-Hill publishing company Ltd., New Delhi, 2005.

Fischer Donald E & Ronald Jordan J, Security Analysis and Portfolio
th
Management, 6 edition, Pearson Prentice Hall, New Delhi, 2009.

Avadhani V.A, Investments and Securities Markets in India,2nd edition
Himalaya Publishing House, 2003.
JOURNALS

Indian journal of finance, Vol III, Jan 2011
WEBSITES

www.valueresearchonline.com

www.mutualfundindia.com

www.amfiindia.com

www.moneycontrol.com

www.bseindia.com

www.yahoofinance.com

www.sebi.gov.in

www.morningstar.in
123
ANNEXURE
STANDARD DEVIATION
Standard Deviation (Risk) of the Fund:
n Rp2 - ( R ) p
2
1/2
p =
n2
Where:  p : Risk of the Fund.
Rp : Return of the fund.
Standard Deviation (Risk) of the benchmark index:
1/2
m= n Rm2 - ( R )2 m
n2
Where
Rm Index Return (Market Return)
m Risk of the Index
124
BETA
Beta of the Fund:
Where:
n
 (Rp - ARp) (Rm – ARm 
 p : Beta of the fund.
p = Rp: Return of the fund.
n ARp: Average return of the Mutual
Fund Scheme.
ARm: Average return of the
i=1 benchmark index.

Rm – ARm2
SHARPE’S MEASURE
Sharp index = Portfolio average return – risk free rate of return / standard deviation of the
Portfolio return
CORRELATION
x: return of fund
y: return of index
125

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AN ANALYTICAL STUDY ON INVESTMENT

PERFORMANCE OF EQUITY LINKED SAVINGS

Dissertation submitted in partial fulfillment of the requirements for the

Award of the degree of

MASTER OF BUSINESS ADMINISTRATION

Reg. No. 11JJCMA049

Under the guidance of

Prof. Aloysius Edward J

Department of Management Studies

KRISTU JAYANTI COLLEGE OF MANAGEMENT AND TECHNOLOGY

award of any degree, diploma, associateship or other similar title.

Lovin Easo Varkey

LOVIN EASO VARKEY

CHAPTER PARTICULARS PAGE NO

2 Review of Literature & Research Design 18

4 Results, Analysis & Discussion 61

5 Findings, Conclusion And 109

Table No. Description PAGE NO.

1.1 Tax Saving Schemes 13

1.2 Comparison Of ELSS with other Tax 13

1.3 List Of Top 10 Performing ELSS Funds 14

1.4 List Of Top 10 Performing ELSS Funds 15

3.1 List Of Mutual Funds In India 28

3.2 Investment Pattern 39

4.1 SBI Magnum Tax Gain Quarterly Return 62

4.2 SBI Magnum Tax Gain Return V/S The 63

4.3 Birla Sun Life Tax Relief 96 Quarterly 65

4.4 Birla Sun Life Tax Relief 96 V/S Index 66

4.5 HDFC Tax Saver Quarterly Return 68

4.6 HDFC Taxsaver Return V/S The Index 69

4.7 ICICI Prudential Tax Plan Quarterly 71

4.8 ICICI Prudential Tax Plan V/S Index 72

4.9 HDFC Long Term Advantage Quarterly 74

4.10 HDFC Long Term Advantage V/S Index 75

4.12 Birla Sunlife Tax Plan V/S Index Return 78

4.13 Principal Personal Tax Saver Quarterly 80

4.14 Principal Personal Tax Saver V/S Index 81

4.15 Franklin India Tax Shield Quarterly 83

4.16 Franklin India Tax Shield V/S Index 84

4.17 DSP Blackrock Tax Saver Quarterly 86

4.18 DSP Blackrock Tax Saver V/S The Index 87

4.19 Tata Tax Savings Fund Quarterly Return 89

4.20 Tata Tax Savings Fund V/S The Index 90

4.21 HSBC Tax Saver Quarterly Return 92

4.22 HSBC Tax Saver Equity Quarterly Return 93

4.23 BNP Paribas Tax Advantage Plan Gain 95

4.24 BNP Paribas Tax Advantage Plan V/S The 96

4.25 Religare Tax Plan Gain Quarterly Return 98

4.26 Religare Tax Plan V/S The Index Return 99

4.27 Kotak Tax Saver Quarterly Return 101

4.28 Kotak Tax Saver V/S The Index Return 102

4.29 ING Tax Saving Fund Quarterly Return 104

4.30 ING Tax Saving Fund V/S The Index 105

4.32 Top 5 Schemes Return and its Correlation 108

1.1 Classification of Investments 3

3.1 Growth In Assets Under Management 28

4.1 Comparison of Quarterly Return 63

4.2 Comparison of Scheme Return And Index 64

4.3 Comparison of Quarterly Return 65

4.4 Comparison of Scheme Return And Index 67

4.5 Comparison of Quarterly Return 68

4.6 Comparison of Scheme Return And Index 70

4.7 Comparison of Quarterly Return 71