Sowmya T P

A REPORT ON
Comparative study between 5 representative

equity scrip’s (BSE) and 5 representative
mutual funds with special reference to risk
and return
Submitted in partial fulfillment of the
Requirements for MBA Degree of
Bangalore University
Submitted By
Sowmya T P
Registration Number:
07XQCM6107
Under the Guidance Of:

Prof. Sathyanarayana
M.P.BIRLA INSTITUTE OF MANAGEMENT

Associate Bharatiya Vidya Bhavan
Race Course Road, Bangalore-56
M P Birla Institute of Management Page: 1

DECLARATION
I hereby declare that this dissertation titled “Comparative study between 5

representative equity scrip’s (BSE) and 5 representative mutual funds with special
reference to risk and return” is submitted by me to the Department of Management,
Bangalore University in partial fulfillment of the requirements of Master of
Business Administration (MBA) programme is a bona-fide work carried by me
.
under the guidance of Prof. Sathyanarayana This has not been submitted earlier to
any other university or institution for the award of any degree/diploma/certificate or

published anytime before.
Place: Bangalore
Date: Sowmya T P
GUIDE’S CERTIFICATE

This is to certify that the report entitled “Comparative study between 5
reference to risk and return” done by Sowmya T P bearing exam registration No.
07XQCM6107 is a bonafide work done carried under my guidance during the
academic year 2007-2009 in a partial fulfillment of the requirement for the award of
MBA degree by Bangalore University. To the best of my knowledge this report has
not formed the basis for the award of any other degree
Place: Bangalore Prof.

Sathyanarayana
Date: Internal
guide

PRINCIPAL’S CERTIFICATE
This is to certify that this report entitled “Comparative study between 5

reference to risk and return” has been prepared by Sowmya T P bearing exam
register number 07XQCM6107 under the guidance and supervision of Prof.
Sathyanarayana of M.P.Birla Institute of Management, Bangalore.
Place: Bangalore Dr. N.S.

Malavalli
Date:
Principal

ACKNOWLEDGEMENT
I sincerely thank Dr. Nagesh Malavalli, for providing me an opportunity to

prepare the dissertation on the topic” Comparative study between 5 representative
equity scrip’s (BSE) and 5 representative mutual funds with special reference to
risk and return” which is part of the curriculum as required by the University
syllabus of our college.
I am also thankful to the entire teaching faculty for having given me their
valuable guidance for preparing the project successfully.
I also thank my family members for their continuous support in my endeavor
for preparing the project.
Finally, I pray to the almighty to bestow upon me success and progressing in
my endeavor.

TABLE OF CONTENTS
Chapter No. Contents Page No
1 INTRODUCTION 3-17
2 RESEARCH DESIGN 19-28
Statement Of The Problem
Literature review
Objectives Of The Study
Scope Of The study
Methodology
Plan Of Analysis
Limitations of The Study
Chapter scheme
3 INDUSTRY PROFILE 30-37
4 ANALYSIS AND INTERPRETATION 39-94
5 SUMMARY OF FINDINGS, SUGGESTION 95-99
AND CONCLUSIONS
ANNEXURE
BIBLOGRAPHY 100
List of Tables and Charts

Sl. Page
No Contents No.

1 Calculation of Risk and Return of BSE SENSEX 39-40
2 Calculation of Risk and Return of NIFTY 41-42
3 Calculation of Risk and Return of BSE200 43-44
4 Calculation of Risk and Return of BSE100 45-46
5 Calculation of Risk , Return & Beta of KOTAK30 (MF) 47-49
6 Chart showing Risk and Return of KOTAK30 (MF) 50
7 Calculation of Risk , Return & Beta of HDFC TOP200 (MF) 51-53
8 Chart showing Risk and Return of HDFC TOP200 (MF) 54
9 Calculation of Risk , Return & Beta of SBI CONTRA(MF) 55-57
10 Chart showing Risk and Return of SBI CONTRA (MF) 58

Calculation of Risk , Return & Beta of RELIANCE VISION
11 FUND (MF) 59-61
Chart showing Risk and Return of RELIANCE VISION FUND
12 (MF) 62
Calculation of Risk , Return & Beta of FRANKLYN INDIA
13 PRIMA (MF) 63-65
Chart showing Risk and Return of FRANKLYN INDIA PRIMA 66

14 (MF)
Table & Chart Showing Average risk of selected mutual fund
15 schemes 67
16 Table showing Average return of selected mutual fund schemes 68
17 Chart showing average return of selected mutual fund schemes 69
18 Calculation of Risk , Return & Beta of RIL 70-72
19 Chart showing Risk and Return of RIL 73

20 Calculation of Risk , Return & Beta of BHEL 74-76
21 Chart showing Risk and Return of BHEL 77
22 Calculation of Risk , Return & Beta of HDFC 78-80
23 Chart showing Risk and Return of HDFC 81
24 Calculation of Risk, Return & Beta of TATA POWER CO. LTD 82-84
25 Chart showing Risk and Return of TATA POWER CO. LTD 85
26 Calculation of Risk , Return & Beta of L&T 86-88
27 Chart showing Risk and Return of L&T 89
28 Table & Chart Showing Average risk of selected Equity scrips 90
30 Table & Chart Showing Average return of selected Equity scrips 91-92
31 Chart showing risk of Mutual funds & Equity shares 93
32 Chart showing return of Mutual funds & Equity shares 94

EXECUTIVE SUMMARY
In the current economic scenario interest rates are falling and fluctuation in the
share market has put investors in confusion. One finds it difficult to take decision
on investment. This is primarily, because of investments are risky in nature and
investors have to consider various factors before investing in investment avenues.
These factors include risk, return, volatility of shares and liquidity. The main
objective of comparing investment in equity shares with mutual fund schemes is to
analyze the performance of mutual funds with their benchmark and comparing them
with equities by using risk, return, beta and alpha as a parameter.
Historical data were taken for calculating risk, return, alpha and beta. Analysis has
done on percentage method for comparing equity shares with mutual fund schemes.
Compared to equities, mutual funds are less risky with stable returns and mutual
funds give the investor a diversified portfolio.
Those who have well knowledge in equity market they can go for equity
investments rather that investing in mutual funds because no control on the
expenses made by the fund manager.
The study will guide the new investor who wants to invest in equity and mutual
fund schemes by providing knowledge about how to measure the risks and return of
particular scrip or mutual fund scheme. The study recommends new investors to go
for mutual funds rather than equities, because of high risk and market instability.

INTRODUCTION
Introduction to Equity Capital and Mutual Fund
Issue of shares is the most important method of raising capital. Finance raised by
the issue of shares serves as a financial floor to the company’s capital structure.
Shares indicate the ownership or equity interest in the assets of the company. Shares
are of different nominal or face values and of different kinds to attract different
kinds of investors. The maximum amount of capital to be raised by the issue of
shares is mentioned in the memorandum of association.
During 1990-91 and 1991-92, equity accounts for 35 to 39 percent of the total
capital raised respectively. This proportion was reversed in 1992-93, the first year
of free pricing, when the share of equity increased to 62 percent. The share of
equity finance increased to a high of 73.18 percent in 1994-95. However, in 1995-
96 there is a rise in the importance of debt largely due to the high interest rates in
the economy and negative returns from the secondary market.
The mutual fund industry in India started in 1964 with the formation of Unit Trust
of India, at the initiative of the Government of India. The 1993 SEBI Regulations
were substituted by a more comprehensive and revised Mutual Fund Regulations in
1996.
The end of millennium marks 36 years of existence of mutual funds in this country.
The ride through these 36 years is not been smooth. Investor opinion is still divided.
While some are for mutual funds others are against it. UTI commenced its
operations from July 1964. The impetus for establishing a formal institution came
from the desire to increase the propensity of the middle and lower groups to save
and to invest. UTI came in to existence during a period marked by great political
and economic turmoil that depressed the financial market; entrepreneurs were rather
hesitant to enter the capital markets.

Concept of Equity Capital and Mutual Fund
The term Equity literally means the stock or ownership of a company. They are also
known as ordinary shares. The rate of dividend on equity shares varies according to
the amount of profit available and the intention of board of directors. In the event of
winding up of the company, equity shares can be refunded only after all other
claims, including those of preference shares for the refund of their capital, have
been met.
Equity capital or financing is money raised by a business in exchange for a share of

ownership in the company. Ownership is represented by owning shares of stock
outright or having the right to convert other financial instruments into stock of that
private company. Two key sources of equity capital for new and emerging
businesses are angel investors and venture capital firms.
Equity capital is represented by funds that are raised by a business, in exchange for
a share of ownership in the company. Equity financing allows a business to obtain
funds without incurring debt, or without having to repay a specific amount of
money at a particular time.
The Equity Capital Markets Group (ECM) oversees the Firm's activities in the
primary equity and equity-linked markets, as well as monetization and equity
derivatives. It provides support in the origination of primary market transactions
and manages their structuring, syndication, marketing and distribution.
The world over, it s been shown that over long tenures, equities with their risk
premia have provided approximately 7 percentage points higher returns than risk-
free options. People have to accumulate significant amounts of wealth during their
working years. Right now, a 17-year bond gives you only 5.5 per cent. So, it is
imperative that these people have some exposure to equity.
A Mutual Fund is a trust that pools the savings of a number of investors who share a
common financial goal. The money thus collected is then invested in capital market
instruments. Investments may be in stocks, bonds, money market securities or some
combination of these. Those securities are professionally managed on behalf of the
shareholders, and each investor holds a pro rata share of the portfolio -- entitled to
any profits when the securities are sold, but subject to any losses in value as well.

A mutual fund is a group of investors operating through a fund manager to purchase
a diverse portfolio of stocks or bonds. There are myriad kinds of mutual funds, each
with its own goals and methodologies. Whether or not a mutual fund is a good
investment is a matter of much public debate, with many claiming they are
excellent for the average person, and others saying they are simply a poor way to
invest.
For the individual investor, mutual funds provide the benefit of having someone
else manage your investments, take care of recordkeeping for your account, and
diversify your rupees over many different securities that may not be available or
affordable to you otherwise. Today, minimum investment requirements on many
funds are low enough that even the smallest investor can get started in mutual
funds.
A mutual fund, by its very nature, is diversified -- its assets are invested in many
different securities. Beyond that, there are many different types of mutual funds
with different objectives and levels of growth potential, furthering your chances to
diversify.
Many critics of mutual funds point out that scarcely over 20% of mutual funds
outperform the Standard and Poor's 500 Index. This means that nearly 80% of the
time, an investor would have been more profitable by simply buying equal shares in
all 500 of the companies currently on the S&P 500.
The flow chart below describes broadly the working of a mutual fund:

Evolution of 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 Canbank 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 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.

The graph indicates the growth of assets over the years.
GROWTH IN ASSETS UNDER MANAGEMENT

Schemes of Mutual funds
Schemes according to Maturity Period/ Structure:
Open-ended Scheme:
An open-ended fund or scheme is one that is available for subscription and
repurchase on a continuous basis. These schemes do not have a fixed maturity
period. Investors can conveniently buy and sell units at Net Asset Value (NAV)
related prices which are declared on a daily basis. The key feature of open-end
schemes is liquidity.
Close-ended Scheme:
A close-ended fund or scheme has a stipulated maturity period e.g. 5-7 years. The
fund is open for subscription only during a specified period at the time of launch of
the scheme. Investors can invest in the scheme at the time of the initial public issue
and thereafter they can buy or sell the units of the scheme on the stock exchanges
where the units are listed. In order to provide an exit route to the investors, some
close-ended funds give an option of selling back the units to the mutual fund
through periodic repurchase at NAV related prices. SEBI Regulations stipulate that
at least one of the two exit routes is provided to the investor i.e. either repurchase
facility or through listing on stock exchanges. These mutual funds schemes disclose
NAV generally on weekly basis.
Schemes according to Investment Objective:

Schemes may be open-ended or close-ended schemes as described earlier.
Growth / Equity Oriented Scheme:

The aim of growth funds is to provide capital appreciation over the medium to long-
term. Such schemes normally invest a major part of their corpus in equities. Such
funds have comparatively high risks. These schemes provide different options to the
investors like dividend option, capital appreciation, etc. and the investors may
choose an option depending on their preferences.
Income / Debt Oriented Scheme:

The aim of income funds is to provide regular and steady income to investors. Such
schemes generally invest in fixed income securities such as bonds, corporate
debentures, Government securities and money market instruments. Such funds are

less risky compared to equity schemes. These funds are not affected because of
fluctuations in equity markets.
Balanced Scheme:
The aim of balanced funds is to provide both growth and regular income as such
schemes invest both in equities and fixed income securities in the proportion
indicated in their offer documents. These are appropriate for investors looking for
moderate growth. They generally invest 40-60% in equity and debt instruments.
These funds are also affected because of fluctuations in share prices in the stock
markets. However, NAV’s of such funds are likely to be less volatile compared to
pure equity funds.
Money Market or Liquid Fund:

These funds are also income funds and their aim is to provide easy liquidity,
preservation of capital and moderate income. These schemes invest exclusively in
safer short-term instruments such as treasury bills, certificates of deposit,
commercial paper and inter-bank call money, government securities, etc. Returns on
these schemes fluctuate much less compared to other funds. These funds are
appropriate for corporate and individual investors as a means to park their surplus
funds for short periods.
Other Schemes:
Gilt Fund:
These funds invest exclusively in government securities. Government securities
have no default risk. NAV’s of these schemes also fluctuate due to change in
interest rates and other economic factors as is the case with income or debt oriented
schemes.
Index Funds:
Index Funds replicate the portfolio of a particular index such as the BSE Sensitive
index, S&P NSE 50 index (Nifty), etc, these schemes invest in the securities in the
same weightage comprising of an index. NAV’s of such schemes would rise or fall
in accordance with the rise or fall in the index, though not exactly by the same
percentage due to some factors known as tracking error" in technical terms.
Necessary disclosures in this regard are made in the offer document of the mutual
fund scheme.

Sector Specific Schemes:
These are the funds/schemes which invest in the securities of only those sectors or
industries as specified in the offer documents. e.g. Pharmaceuticals, Software, Fast
Moving Consumer Goods (FMCG), Petroleum stocks, etc. The returns in these
funds are dependent on the performance of the respective sectors/industries.
Tax Saving Schemes:

These schemes offer tax rebates to the investors under specific provisions of the
Income Tax Act, 1961 as the Government offers tax incentives for investment in
specified avenues. E.g. Equity Linked Savings Schemes (ELSS). Pension schemes
launched by the mutual funds also offer tax benefits. These schemes are growth
oriented and invest pre-dominantly in equities. Their growth opportunities and risks
associated are like any equity-oriented scheme.
Advantages of Equity Capital and Mutual Fund:
1.1 Advantages of Equity Capital:
1.1(i) High dividend and high value:-

In times of prosperity, the equity shareholders get a very high rate of dividend,
sufficiently higher than that on preference shares. At the same time, their share
value will also go up in the market.
1.1(ii) Voting rights:-

It is only the equity shareholders who enjoy voting rights on all the policy matters
of the company.
1.1(iii) Pre-emptive right to new shares:-

Equity shareholders have the pre-emptive right to purchase new shares. Under the
provisions of the companies act, the existing shareholders of the company have a
right to allotment of newly issued shared.
1.1(iv)Many privileges and rights:-

Equity shareholders enjoy many privileges and rights. For example, they can vote at
meetings, elect directors, control the directors to run the company efficiently and
profitably, look into the books and records of the company and transfer or sell their
shareholdings.

1.2 Advantages of Mutual Fund:
1.2(i) Professional Investment Management:-

By pooling the funds of thousands of investors, mutual funds provide full-time,
high-level professional management that few individual investors can afford to
obtain independently. Such management is vital to achieving results in today's
complex markets. Your fund managers' interests are tied to yours, because their
compensation is based not on sales commissions, but on how well the fund
performs.
1.2(ii) Diversification:-
Mutual funds invest in a broad range of securities. This limits investment risk by
reducing the effect of a possible decline in the value of any one security. Mutual
fund shareowners can benefit from diversification techniques usually available only
to investors wealthy enough to buy significant positions in a wide variety of
securities.
1.2(iii) Low Cost:-

If you tried to create your own diversified portfolio of 50 stocks, you'd need at least
Rs.1,00,000 and you'd pay thousands of rupees in commissions to assemble your
portfolio. A mutual fund lets you participate in a diversified portfolio for as little as
Rs.10,000, and sometimes less. And if you buy a no-load fund, you pay or no sale
charges to own them.
1.2(iv) Convenience and Flexibility:-

You own just one security rather than many, yet enjoy the benefits of a diversified
portfolio and a wide range of services. Fund managers decide what securities to
trade, clip the bond coupons, collect the interest payments and see that your
dividends on portfolio securities are received and your rights exercised.
1.2(v) Quick, Personalized Service:-

Most funds now offer extensive websites with a host of shareholder services for
immediate access to information about your fund account. Or a phone call puts you
in touch with a trained investment specialist at a mutual fund company who can
provide information you can us e to make your own investment choices, assist you
with buying and selling y our fund shares.

1.2(vi) Ease of Investing:-
You may open or add to your account and conduct transactions or business with the
fund by mail, telephone or bank wire. You can even arrange for automatic monthly
investments by authorizing electronic fund transfers from your checking account in
any amount and on a date you choose.
1.2(vii) Total Liquidity, Easy Withdrawal:-

You can easily redeem your shares anytime you need cash by letter, telephone, bank
wire or check, depending on the fund. Your proceeds are usually available within a
day or two.
1.2(viii) Life Cycle Planning:-

With no-load mutual funds, you can link your investment plans to future individual
and family needs -- and make changes as your life cycles change. You can invest in
growth funds for future college tuition needs, then move to income funds for
retirement, and adjust your investments as your needs change throughout your life.
1.2(ix) Market Cycle Planning:-

For investors who understand how to actively manage their portfolio, mutual fund
investments can be moved as market conditions change. You can place your funds
in equities when the market is on the upswing and move into money market funds
on the downswing or take any number of steps to ensure that your investments are
meeting your needs in changing market climates.
1.2(x) Investor Information:-

Shareholders receive regular reports from the funds, including details of
transactions on a year-to-date basis. The current net asset value of your shares (the
price at which you may purchase or redeem them) appears in the mutual fund price
listings of daily newspapers. You can also obtain pricing and performance results
for the all mutual funds at this site, or it can be obtained by phone from the fund.
1.2(xi) Periodic Withdrawals:-

If you want steady monthly income, many funds allow you to arrange for monthly
fixed checks to be sent to you, first by distributing some or all of the income and
then, if necessary, by dipping into your principal.
1.2(xii) Dividend Options:-

You can receive all dividend payments in cash. Or you can have them reinvested in

the fund free of charge, in which case the dividends are automatically compounded.
This can make a significant contribution to your long-term investment results.
1.2(xiii)Automatic Direct Deposit:-

You can usually arrange to have regular, third-party payments -- such as Social
Security or pension checks -- deposited directly into your fund account. This puts
your money to work immediately, without waiting to clear your checking account,
and it saves you from worrying about checks being lost in the mail.
1.2(xiv) Record keeping Service:-

With your own portfolio of stocks and bonds, you would have to do your own
recordkeeping of purchases, sales, dividends, interest, short-term and long-term
gains and losses. Mutual funds provide confirmation of your transactions and
necessary tax forms to help you keep track of your investments and tax reporting.
1.2(xv) Safekeeping:-
When you own shares in a mutual fund, you own securities in many companies
without having to worry about keeping stock certificates in safe deposit boxes or
sending them by registered mail. You don't even have to worry about handling the
mutual fund stock certificates; the fund maintains your account on its books and
sends you periodic statements keeping track of all your transactions.
1.2(xvi) Retirement and College Plans:-

Mutual funds are well suited to Individual Retirement Accounts and most funds
offer IRA-approved prototype and master plans for individual retirement accounts
(IRAs) and Keogh, 403(b), SEP-IRA and 401(k) retirement plans.
1.2(xvii) Online Services:-

The internet provides a fast, convenient way for investors to access financial
information. A host of services are available to the online investor including direct
access to no-load companies. Visit company Links to access these companies
1.2(xviii) Sweep Accounts:-

With many funds, if you choose not to reinvest your stock or bond fund dividends,
you can arrange to have them swept into your money market fund automatically.
You get all the advantages of both accounts with no extra effort.
1.2(xix) Asset Management Accounts:-

These master accounts, available from many of the larger fund groups, enable you
to manage all your financial service needs under a single umbrella from unlimited
check writing and automatic bill paying to discount brokerage and credit card
accounts.
Disadvantages of Equity Capital and Mutual Fund
1.3 Disadvantages of Equity Capital:
1.3(i) No refund of capital:-

Since equity shares cannot be refunded, excessive is sue of such shares may leads to
overcapitalization, particularly when the earning capacity of the company declining.
1.3(ii) Benefits only in prosperity:-

During the periods of prosperity, the company has to distribute heavy dividends on
these shares.
1.3(iii) Manipulation of control:-

Since the equity shares have proportionate voting power, the company’s
management may be vitiated by manipulation of votes, clique-formation, abuse of
proxy rights etc.
1.3(iv) High risk:-

Equity share holders cannot claim dividend as a matter of right, because the
decision to fit the rate of dividend on equity shares is vested in the Board of
Directors. Therefore investors as a class may find equity shares unsafe, unattractive
and unremunerative.
1.3(v) Unhealthy Speculation:-

During the period of boom, the market value of shares will go up, which leads to
unhealthy speculation in the stock market.
1.4 Disadvantages of Mutual Fund:

There are certainly some benefits to mutual fund investing, but you should also be
aware of the drawbacks associated with mutual funds.
1.4(i) No Insurance:-
Mutual funds, although regulated by the government, are not insured against losses.

The Federal Deposit Insurance Corporation (FDIC) only insures against certain
losses at banks, credit unions, and savings and loans, not mutual funds. That means
that despite the risk-reducing diversification benefits provided by mutual funds,
losses can occur, and it is possible (although extremely unlikely) that you could
even lose your entire investment.
1.4(ii) Dilution:-
Although diversification reduces the amount of risk involved in investing in mutual
funds, it can also be a disadvantage due to dilution. For example, if a single security
held by a mutual fund doubles in value, the mutual fund itself would not double in
value because that security is only one small part of the fund's holdings. By holding
a large number of different investments, mutual funds tend to do neither
exceptionally well nor exceptionally poorly.
1.4(iii) Fees and Expenses:-

Most mutual funds charge management and operating fees that pay for the fund's
management expenses (usually around 1.0% to 1.5% per year). In addition, some
mutual funds charge high sales commissions, 12b-1 fees, and redemption fees. And
some funds buy and trade shares so often that the transaction costs add up
significantly. Some of these expenses are charged on an ongoing basis, unlike stock
investments, for which a commission is paid only when you buy and sell.
1.4(iv)Poor Performance:-
Returns on a mutual fund are by no means guaranteed. In fact, on average, around
75% of all mutual funds fail to beat the major market indexes, like the S&P 500,
and a growing number of critics now question whether or not professional money
managers have better stock-picking capabilities than the average investor.
1.4(v) Loss of Control:-

The managers of mutual funds make all of the decisions about which securities to
buy and sell and when to do so. This can make it difficult for you when trying to
manage your portfolio. For example, the tax consequences of a decision by the
manager to buy or sell an asset at a certain time might not be optimal for you. You
also should remember that you trust someone else with your money when you
invest in a mutual fund.
1.4(vi) Trading Limitations:-

Although mutual funds are highly liquid in general, most mutual funds (called

open-ended funds) cannot be bought or sold in the middle of the trading day. You
can only buy and sell them at the end of the day, after they've calculated the current
value of their holdings.
1.4(vii) Size:-
Some mutual funds are too big to find enough good investments. This is especially
true of funds that focus on small companies, given that there is strict rules about
how much of a single company a fund may own. If a mutual fund has $5 billion to
invest and is only able to invest an average of $50 million in each, then it needs to
find at least 100 such companies to invest in; as a result, the fund might be forced to
lower its standards when selecting companies to invest in.
1.4(viii) Inefficiency of Cash Reserves:-

Mutual funds usually maintain large cash reserves as protection against a large
number of simultaneous withdrawals. Although this provides investors with
liquidity, it means that some of the fund's money is invested in cash instead of
assets, which tends to lower the investor's potential return.
1.4(ix) Different Types:-

The advantages and disadvantages listed above apply to mutual funds in general.
However, there are over 10,000 mutual funds in operation, and these funds vary
greatly according to investment objective, size, strategy, and style. Mutual funds are
available for virtually every investment strategy (e.g. value, growth), every sector
(e.g. biotech, internet), and every country or region of the world. So even the
process of selecting a fund can be tedious.

Research Design
Research design provides the glue that holds the research project together. A design
is used to structure the research, to show how all of the major parts of the research
project -- the samples or groups, measures, treatments or programs, and methods of
assignment -- work together to try to address the central research questions.
2.1 Statement of Problem
In the current economic scenario interest rates are falling and fluctuation in the
share market has put investors in confusion. One finds it difficult to take decision
on investment. This is primarily, because investments are risky in nature and
investors have to consider various factors before investing in investment avenues.
Therefore the study aims to compare equity and mutual fund schemes in form their
risk, return & liquidity and also creating awareness about Equity and Mutual Fund
Schemes among the investors.
2.2 Literature review

Literature review has under taken for analyze various literature and research papers
available in the related field. Further research can be undertaken where sufficient
study is not done in particular field. Various sources of information have been used
in this review include technical analysis books, financial journals, articles and
research papers.
a) Jonathan B. , Berk Richard C. Green (2004)
Mutual Fund Flows and Performance in Rational Markets
Journal of Political Economy, 2004, vol. 112, no. 6
We derive a parsimonious rational model of active portfolio management that

reproduces many regularities widely regarded as anomalous. Fund flows rationally
respond to past performance in the model even though performance is not persistent
and investments with active managers do not outperform passive benchmarks on
average. The lack of persistence in returns does not imply that differential ability
across managers is nonexistent or unrewarded or that gathering information about

performance is socially wasteful. The model can quantitatively reproduce many
salient features in the data. The flow-performance relationship is consistent with
high average levels of skills and considerable heterogeneity across managers.
b) Noel Capon, Gavan J. Fitzsimons and Russ Alan Prince (2005)

Graduate School of Business, Columbia University, New York,
This study investigates the manner in which consumers make investment decisions
for mutual funds. Investors report that they consider many nonperformance related
variables. When investors are grouped by similarity of investment decision process,
a single small group appears to be highly knowledgeable about its investments.
However, most investors appear to be naive, having little knowledge of the
investment strategies or financial details of their investments.
c) Erik R. Siri and Peter Tufanno (1998)

Costly Search and Mutual Funds Flows (The Journal of Finance Vol.-I.III No. 6)
The paper studies the flows of funds into and out of equity mutual funds.
Consumers base their fund purchase decision on prior performance information, but
do so asymmetrically investing, disproportionately more in funds that performed
very well the prior period. Search costs seem to be an important determinant of fund
flows. High performance appears to be most salient for funds, that exert higher
marketing effort, as measured by higher fees. Flows are directly related to the size
of the funds complex’s as well as the current media attention received by a fund,
which lower consumers search costs.
d) Mark M. Kahart (1997)

On Persistence in Mutual Fund Performance (The Journal of Finance Vol-LIII)
Using the sample free of survivor bias, I demonstrate that common factors in stock
returns and investment expenses almost completely explain persistence in equity
mutual funds’ mean and risk-adjusted returns. Hendricks, Patel and Zechauser’s
(1993) “hot hands” result is mostly driven by the one year momentum effect of
Jagadish and Titman (1993), but individual funds do not earn higher returns from
following the momentum strategy in stocks. The only significant persistence not
explained is concentrated in strong underperformance by the worst-return mutual
funds. The results do not support the existence of skilled or informed mutual fund

portfolio managers.
e) Mark Grinblatt, Sheridan Titman (1989)

Mutual Funds Performance: An Analysis of Quarterly Portfolio Holdings
Journal of Business 1989 vol.62.No.3
The evaluation of performance has generated a great deal of interest in academic
circles. Previous studies of mutual funds performance have examined the actual
returns realized by investors, and with few expectations found either negative
performance or no performance for the average mutual fund. This is not surprising
form the economic perspective: if mutual fund managers have the superior
investment talent they may be able to capture the rents from their talent in the form
of fees or perquisites obtained through their expenses. In this case we can expect to
observe abnormal performance only by examining growth returns, which do not
have transaction fees, costs or other expenses subtracted from them.
f) Burton G. Malkiel (1996)

Returns from Investing in Equity Mutual Funds 1971-1991
The Journal of Finance Vol. Lno.2
Several suggests that equity mutual fund managers achieve superior returns and that
considerable persistence in performance exists. This study utilizes a unique data set
including returns from all equity mutual funds existing each year. In the aggregate
funds have underperformed benchmark portfolios both under management expenses
and even gross of expenses. Survivorship bias appears to be most important then
other studies has estimated. Moreover while considerable performance persistence
existed during 1970s there was no consistency in fund returns during the 1980s.
Equity
g) Oliver Smiddy, “Private-Equity IPOs Outperforming Others”
Stock Performances Show Sponsored Deals Weathering Woes Well. One of the
biggest casualties of the economic downturn has been the initial public offering, for
years the exit route of choice for private-equity firms. Returning a company to the
public markets allowed buyout firms to retain an equity interest in the business, if
desired, and also provided a public seal of approval for a job well done in building a
company. Yet since the start of last year, there have been just two European IPOs of
$50 million or more that were backed by private-equity firms, a sign of how

unattractive the public markets have become as an exit route.
h) Ben Steverman “Stocks: A Positive 2009?”, May 5, 2009,

Investors who dare look at their retirement accounts this week may get a pleasant
surprise: Their equity holdings may actually be up for the year. Not by much, to be
sure. On May 5, the S&P index of 500 stocks—a good gauge of the broad stock
market,—closed at 903.80, just 0.55 points above its close on the last day of trading
in 2008. Still, market participants were marveling that the stock market could trade
in positive territory in spite of the state of the economy and the troubles that still
plague the financial system. Stocks peaked in October 2007 and then began a slide
that picked up speed in late 2008 and early 2009. By Mar. 9, the S&P 500 had lost
57% of its value.
i) Hugh Son, “Liberty Mutual Net Falls 92% on Private Equity Loss”,
May 5, 2009
Liberty Mutual Group Inc., the policyholder-owned insurer that purchased Safeco
Corp. last year, said first-quarter profit plunged 92 percent on losses tied to private
equity investments. Net income fell to $28 million from $360 million in the year-
earlier period, the Boston-based company said today in a statement. The company
had a private equity loss of $373 million in the first quarter, compared with a gain
of $60 million a year earlier.
j) Shiyin Chen and Netty Ismail, “Global Crisis ‘Vastly Worse’ Than
1930s, Taleb Says ”, May 7, 2009.
Equity investments are preferable to debt, a contributor to the current financial
crisis, Taleb said. Deflation in an equity bubble will have smaller repercussions for
the global financial system, he added. “Debt pressurizes the system and it has to be
replaced with equity,” he said. “Bonds appear stable but have a lot of hidden risks.
Equity is volatile, but what you see is what you get.”
k) Ludovic Phalippou “Investing in Private Equity Funds: A Survey”,

Research Foundation Literature Reviews, Private Equity (April 2007)
This literature review covers the issues faced by private equity fund investors. This
literature survey shows that the average investor has obtained poor returns from

investments in private equity funds, potentially because of excessive fees. Overall,
investors need to gain familiarity with actual risk, past return, and specific features
of private equity funds. Increased familiarity will improve the sustainability of this
industry that plays such a central role in the economy.
l) Megan Davies, “Private equity treads cautiously in bankruptcy

quagmire”, 2009
Picking over the carcasses of bankrupt companies is tempting for private equity
firms, but the more traditional buyout shops are showing caution bidding on assets
entangled in the courts, experts say. "Traditional private equity firms have always
been more conservative in terms of the process they go through to buy companies
and most have branded themselves as specifically not doing deals that involve
distress or turnaround," said Edward Reilly, a partner at law firm Goodwin Procter.
m) Junko Fujita and David Dolan, “RPT-UPDATE 1-HSBC to close

equity research and trading in Japan”, April 24, 2009.
HSBC Holdings (HSBA.L) (0005.HK) said on Friday it will shut its equity research
and trading businesses in Japan, as Europe's biggest bank cuts staff globally amid
the financial crisis.The bank will shift the operations to its Asia headquarters in
Hong Kong, said Paul Allen, an HSBC spokesman in Tokyo. That "may result in
the reduction of a number of positions," he said. HSBC will no longer have equity
analysts in Tokyo, although it may transfer some research and equity trading staff to
offices outside of Japan, Allen said. HSBC had at least eight analysts in Tokyo,
covering areas such as financial firms, electrical equipment and machinery,
according to Thomson Reuters data. The bank has had a presence in Japan for more
than 100 years, but has been a niche player in the world's second-largest economy.
HSBC, which also offers asset management and private banking in the country, has
been focusing on its "Premier" banking service, which targets customers with at
least 10 million yen ($103,000) in liquid assets.
n) Ben Steverman “Stock Research: An Uncertain Future”, May, 2009
For the average individual investor, getting good information on stocks and other
investments has never been easy. Furthermore, top analysts are setting up their own
firms (with limited client lists) and moving to hedge funds or other "buy-side"

institutions. That means much of the best analysis is going behind closed doors,
where it's harder for individual investors to access.
Benefits derived from literature review:
• Provide a context for the research

• Justify the research
• Ensure the research hasn't been done before
• Show where the research fits into the existing body of knowledge
• Enable the researcher to learn from previous theory on the subject
• Illustrate how the subject has been studied previously
• Highlight flaws in previous research
• Outline gaps in previous research
• Show that the work is adding to the understanding and knowledge of the
field
• Help refine, refocus or even change the topic
2.3 Objectives of the study
Saving money is not enough. Each of us also need to invest one’s savings
intelligently in order to have enough money available for funding for one s own
golden years. But the rapidly growing number of investment avenues often lead to
confusion. Objectives of the study are to provide information to individual investors
regarding their risk, and choosing the best investment options to match their goals
and attitude to risk.
1. To compare Equity and Mutual Fund Schemes in respect of their risk & return.
2. Analyzing the performance of equity shares and mutual fund schemes with their
benchmark
3. Finding the Volatility of shares by using beta.
4. Provide information about pros and cons of investing in Equity and Mutual
Funds

2.4 Operational definitions
(i) Return:
A return is a measurement of how much an investment has increased or decreased

in value over any given time period. In particular, an annual return is the percentage
by which it increased or decreased over any twelve-month period. Suppose you
invest $1,000 today and twelve months later your investment is worth $1,070. The
annual returnon your original investment of $1,000 is 7%, or $70. The real return,
however – the annual return less the rate of inflation over the investment period --
will be lower.
(ii) Standard Deviation:
Standard Deviation the risk measures -- one with a distinct advantage over beta.
While beta compares a fund's returns with a benchmark, standard deviation
measures how far a fund's recent numbers stray from its long-term average. For
example, if Fund X has a 10% average rate of return and a standard deviation of
5%, most of the time, its return will range from 5% to 15%. A large standard
deviation supposedly shows a more risky fund than a smaller one. But here, again,
what's problematic is your reference point. The number alone doesn't tell you much.
You have to compare one standard deviation with the others among a fund's peers.
A fund is considered stable based on the uniformity of its own monthly returns. So
if it loses money but does so very consistently it can have a very low standard
deviation -- down 3% each and every month wins a standard deviation of zero. And
likewise, a fund that gains 10% one month and 15% the next would be penalized by
a high standard deviation -- a reminder that volatility, although perhaps a cousin to
risk, itself isn't necessarily a bad thing. A measure of the dispersion of a set of data
from its mean. The more spread apart the data, the higher the deviation. Standard
deviation is calculated as the square root of variance. In finance, standard deviation
is applied to the annual rate of return of an investment to measure the investment's
volatility. Standard deviation is also known as historical volatility and is used by
investors as a gauge for the amount of expected volatility.

(iii) Beta coefficient
The Beta coefficient, or financial elasticity (sensitivity of the asset returns to

market returns, relative volatility), is a key parameter in the Capital asset pricing
model. Beta can also be defined as the risk of the Mutual Fund to a diversified
portfolio. Therefore the beta of a Mutual Fund will be much lower than its (the
fund's) standard deviation. The β coefficient measures the asset's non-diversifiable
risk, also called systematic risk or market risk, rm measures the rate of return of the
market and ra measures the rate of return of the asset. On an individual asset level,
measuring beta can give clues to volatility and liquidity in the marketplace. On a
portfolio level, measuring beta is thought to separate a manager's skill from his
willingness to take risk. The beta movement should be distinguished from the actual
returns of the stocks. For example a sector may be performing well and may have
good prospects but the fact that its movement does not correlate well with the
broader market index may decrease its beta. It however should not be taken as a
reflection on the overall attractiveness or the loss of it for the sector or stock as the
case may be. Beta is a measure of risk and not be confused with the attractiveness
of investment
2.5 Scope of the Study
It gives a brief idea about the benefits available from Equity and Mutual Fund
investment
• Comparison between direct equity and mutual funds

• Using what kind of tool customer can safely invest his money
• information on the risks & return involved in direct equity as well in mutual
funds
• Giving the right information to the investor about the safe investments in his
portfolio.
• Analyzing the performance of equity shares and mutual fund schemes with
their benchmark
• Provide information about pros and cons of investing in Equity and Mutual
Funds
• Mainly focused on the safety of the investment to the customer.

2.6 Research methodology
Type of research:
Type of research is Descriptive research, which is Quantitative in nature.
The whole study can be termed as comparative study of investment in equity shares
and mutual funds. It is purely a quantitative study of available secondary data,
hence; there is no field work and collection of primary data for this research.
Sample size:
Method of sampling is convenience sampling.
Five equity scrips and five mutual fund schemes were selected.
Sample Description:
SCRIPS BENCH MARK

RELIANCE BSE SENSEX
HDFC BSE SENSEX
BHEL BSE SENSEX
TATA POWER BSE SENSEX
L&T BSE SENSEX
FUND NAME BENCHMARK

KOTAK 30 NIFTY
HDFC TOP 30 BSE200
SBI CONTRA BSE100
RELIANCE VISION FUND BSE100
FRANKLYN INDIA PRIMA FUND BSE100
2.7 Plan of analysis
The study centers on comparing equity and mutual fund schemes in respect of their
risk, return and liquidity. However, with the objective and scope of the study in
mind, it was decided to base the study on return series of selected stocks and mutual
fund schemes.
BSE being the premier exchange of India was chosen for selecting stocks. It is
widely accepted that BSE Sensex is the one of the most reliable index of the stock
exchange that reflects present day market condition. Since it is not possible to

compare all the 30 scrip’s in the index with all Mutual Fund Schemes due to time
and resource constraints, sampling techniques were considered. Randomly selected
samples will facilitate inference of the population, in our case BSE Sensex and
mutual fund industry in India. Hence by stratified random sampling, 5 scrip’s out of
30 Sensex scrip’s and 5 Mutual fund schemes out of whole mutual fund industry
were selected.
Monthly share price and unit prices of the selected scrip’s and units were collected
from historical data. In order to avoid bias, at least three years monthly data was
decided to be necessary. The reference period is from 1st Apr, 2005 to 31st Mar,
2008.
2.8 Limitations of the Study
• The time period for the project was limited to only 90 days and information
provided is limited to the extent of internet and journals.
• The sample size is limited to only five equities and five mutual funds
• The study is limited to compare equity capital and mutual fund schemes in
respect of their risk, return and liquidity.
• The analysis is strictly based on share price and unit price information.
Other company performance indicators are not considered.
2.9 Chapter Scheme
Chapter 1: Introduction deals with various aspects of mutual funds and equity
shares
Chapter 2: deals with research design and other important elements pertaining to
design of the study
Chapter 3: company or industry profile
Chapter 4: covers the crux of the research discussion i.e., analysis of data by
calculating risk, return, beta and presentation of the data in tabular column and
graphical representation of the data
Chapter 5: Summary of Findings, Recommendations and conclusions
Annexure

Company/industry profile
3.1 Reliance Group
The Reliance Group, founded by Dhirubhai H. Ambani (1932-2002), is India's

largest private sector enterprise, with businesses in the energy and materials value
chain. Group's annual revenues are in excess of US$ 34 billion. The flagship
company, Reliance Industries Limited, is a Fortune Global 500 company and is the
largest private sector company in India.
Backward vertical integration has been the cornerstone of the evolution and growth
of Reliance. Starting with textiles in the late seventies, Reliance pursued a strategy
of backward vertical integration - in polyester, fibre intermediates, plastics,
petrochemicals, petroleum refining and oil and gas exploration and production - to
be fully integrated along the materials and energy value chain.
The Group's activities span exploration and production of oil and gas, petroleum
refining and marketing, petrochemicals (polyester, fibre intermediates, plastics and
chemicals), textiles, retail and special economic zones.
Reliance enjoys global leadership in its businesses, being the largest polyester yarn
and fibre producer in the world and among the top five to ten producers in the world
in major petrochemical products.The Group exports products in excess of US$ 20
billion to 108 countries in the world. Major Group Companies are Reliance
Industries Limited (including main subsidiaries Reliance Petroleum Limited and
Reliance Retail Limited) and Reliance Industrial Infrastructure Limited.
3.2 BHEL
BHEL is the largest engineering and manufacturing enterprise in India in the

energy-related/infrastructure sector, today. BHEL was established more than 40
years ago, ushering in the indigenous Heavy Electrical Equipment industry in India
- a dream that has been more than realized with a well-recognized track record of

performance. The company has been earning profits continuously since 1971-72
and paying dividends since 1976-77.
BHEL manufactures over 180 products under 30 major product groups and caters to
core sectors of the Indian Economy viz., Power Generation & Transmission,
Industry, Transportation, Telecommunication, Renewable Energy, etc. The wide
network of BHEL's 14 manufacturing divisions, four Power Sector regional centres,
over 100 project sites, eight service centres and 18 regional offices, enables the
Company to promptly serve its customers and provide them with suitable products,
systems and services -- efficiently and at competitive prices. The high level of
quality & reliability of its products is due to the emphasis on design, engineering
and manufacturing to international standards by acquiring and adapting some of the
best technologies from leading companies in the world, together with technologies
developed in its own R&D centres.
BHEL has acquired certifications to Quality Management Systems (ISO 9001),

Environmental Management Systems (ISO 14001) and Occupational Health &
Safety Management Systems (OHSAS 18001) and is also well on its journey
towards TQM.
BHEL's operations are organised around three business sectors, namely Power,
Industry - including Transmission, Transportation, Telecommunication &
Renewable Energy - and Overseas Business. This enables BHEL to have a strong
customer orientation, to be sensitive to his needs and respond quickly to the
changes in the market.
The greatest strength of BHEL is its highly skilled and committed 42,600
employees. Every employee is given an equal opportunity to develop himself and
grow in his career. Continuous training and retraining, career planning, a positive
work culture and participative style of management, all these have engendered
development of a committed and motivated workforce setting new benchmarks in
terms of productivity, quality and responsiveness.

3.3 Larsen & Toubro Limited
Larsen & Toubro Limited (L&T) is India's largest engineering and construction
conglomerate with additional interests in electricals, electronics and IT. A strong
customer-focussed approach and constant quest for top-class quality have enabled
L&T to attain and sustain leadership position over 6 decades. L&T enjoys a premier
brand image in India and its international presence is on the rise, with a global
spread of over 30 offices and joint ventures with world leaders.
ECC - the Engineering Construction & Contracts Division of L&T - is India's

largest construction organisation. Many of the country's prized landmarks - its
exquisite buildings, tallest structures, largest industrial projects, longest flyovers,
highest viaducts - have been built by ECC. Leading-edge capabilities of ECC cover
every discipline of construction: civil, mechanical, electrical and instrumentation
engineering.
Larsen & Toubro Limited (L&T) is a technology, engineering, construction and

manufacturing company. It is one of the largest and most respected companies in
India's private sector.Seven decades of a strong, customer-focused approach and the
continuous quest for world-class quality have enabled it to attain and sustain
leadership in all its major lines of business.
L&T has an international presence, with a global spread of offices. A thrust on

international business has seen overseas earnings grow significantly. It continues to
grow its overseas manufacturing footprint, with facilities in China and the Gulf
region.The company's businesses are supported by a wide marketing and
distribution network, and have established a reputation for strong customer support.
L&T believes that progress must be achieved in harmony with the environment. A
commitment to community welfare and environmental protection are an integral
part of the corporate vision.

3.4 Tata Power
Recognized as India’s largest private sector power utility, with a reputation for
trustworthiness, built up over nearly nine decades, Tata Power surges ahead into yet
another year with plans of sustained growth, greater value to consumer and reliable
power supply.
Led by a powerful vision, Tata Power pioneered the generation of electricity in

India. It has now successfully served the Mumbai consumers for over ninety years
and has spread its footprints across the nation. Today, it is the country’s largest
private player in the sector. Apart from Mumbai and Delhi, the company has
generation capacities in Jojobera, Jharkhand and Karnataka.
Tata Power has an installed power generation capacity of above 2300 Mega Watts,
with the Mumbai power business, which has a unique mix of Thermal and Hydro
Power, generated at the Thermal Power Station, Trombay, and the Hydro Electric
Power Stations at Bhira, Bhivpuri and Khopoli, accounting for 1797 MW. Its
diverse generation capability facilitates the company in producing low cost energy,
thereby giving its consumers a greater value for money.
Among its many achievements that Tata Power can proudly boast of are the
installation and commissioning of India’s first 500 MW unit (at its Thermal Power
Generating Station, Trombay) the 150 MW Pumped Storage Unit at its Hydro
Generating Station, Bhira, and environmental control systems like the Flue Gas
Desulphurisation plant.
Tata Power has a first of its kind joint venture with Power Grid Corporation of India
for the 1200 km Tala Transmission Project.
3.5 Housing Development Finance Corporation Ltd
Housing Development Finance Corporation Limited (HDFC), was incorporated in

1977 by Hasmukhbhai Parekh, with the primary objective of meeting a social need -
that of promoting home ownership by providing long-term finance to households
for their housing needs. HDFC was promoted with an initial share capital of Rs. 100
million. HDFC’s distribution network spans 243 outlets that include 49 offices of

HDFC’s distribution company, HDFC Sales Private Limited. In addition, HDFC
covers over 90 locations through its outreach programmes. HDFC’s marketing
efforts continue to be concentrated on developing a stronger distribution network.
Home loans are also marketed through HDFC Sales, HDFC Bank Limited and other
third party Direct Selling Agents (DSA).
To cater to non-resident Indians, HDFC has an office in London and Dubai and
service associates in Kuwait, Oman, Qatar, Sharjah, Abu Dhabi, Al Khobar, Jeddah
and Riyadh in Saudi Arabia.
The primary objective of HDFC is to enhance residential housing stock in the

country through the provision of housing finance in a systematic and professional
manner, and to promote home ownership. Another objective is to increase the flow
of resources to the housing sector by integrating the housing finance sector with the
overall domestic financial markets.
At present, the company’s offerings range from hassle-free home loans and deposit
products, to property related services and a training facility. HDFC also offers
specialised financial services to the customer base through partnerships with some
of the best financial institutions worldwide.
HDFC’s subsidiaries and associate Companies
• HDFC Bank
• HDFC Mutual Fund
• HDFC Standard Life Insurance Company
• HDFC Sales
• HDFC ERGO General Insurance Company ltd ( formerly HDFC General
Insurance Company Ltd)
3.6 Kotak Mahindra Mutual Fund

Kotak Mahindra Mutual Fund is one of the topmost mutual funds firm in India and
it is promoted by Kotak Mahindra Bank. Kotak Mahindra Mutual Fund's asset
manager is Kotak Mahindra Asset Management Company Limited which is a fully
owned subsidiary company of Kotak Mahindra Bank.

Kotak Mahindra Mutual Fund started its schemes in December 1998 and it is
promoted by Kotak Mahindra Bank which is one of the country's topmost financial
institutions that provides a wide range of financial solutions such as investment
banking, commercial banking, life insurance and stock broking.
The asset manager of Kotak Mahindra mutual fund is Kotak Mahindra Asset
Management Company Limited which is a fully owned subsidiary company of
KotakMahindraBank. Kotak Mahindra Mutual Fund manages the assets of around
434,504 investors in a wide range of schemes. According to estimates of August
2006, Kotak Mahindra Mutual Fund had assets of more than Rs. 12,530 crores
under its management. It is the first mutual fund firm in India to start a scheme of
dedicated gilt that would make investment in securities of government only. The
Chief Executive Officer of the Kotak Mahindra Asset Management Company is Mr.
Sandesh Kirkire and its Chief Operations Officer is Mr. R. Krishnan.
3.7 SBI Contra Mutual Fund
SBI Contra Mutual Fund is one of the funds under the Magnum Sector Funds
Umbrella. The fund is aimed at providing maximum capital growth opportunities to
the investors through equity investments in stocks of upcoming sectors of the
economy. There are five sub-funds of SBI Contra Fund each dedicated to a
customized investments theme. These include:
IT (Information Technology)
Pharmaceuticals
Fast Moving Consumer Goods (FMGC)
Contrarian (investments in out of favor stocks)
Emerging Businesses
The asset allocation in SBI Contra Mutual Fund includes 90 - 100% investments in
equity stocks that are high on risk profile and 0 - 10% in money markets that are
relatively low risk profile. Investors are free to choose one or more of the specified
themes mentioned above to invest in. besides this, a free switchover from one sector

to another is also provided which is a facility not available for NRIs.
Under the contra, pharmaceuticals and emerging businesses funds SBIMF also
provides growth and dividend options. Launched on 14th July 1999, SBI Contra
Mutual Fund involves a minimum investment of Rs. 2000 per sector. For further
details on the Entry Load or Exit Load per fund, SIP and SWP provided, and the
Contra Fund NAV Growth or Contra Fund NAV Dividend for the current and
previous years, refer to their official website mentioned below. For information on
other SBI Mutual Funds and other banking products and services of State Bank of
India, browse through our subsequent pages on each.
3.8 Reliance Vision Fund
India is one of the fastest growing economies in the world. Today, many Indian
companies are delivering world-class performance. The growing level of Foreign
Direct Investment (FDI) in various sectors of industry is providing the much needed
impetus to industry growth.
A good number of Indian blue chip companies, having strong cash flows are
acquiring global companies. The buy-outs are helping them in acquiring a ready
front. This coupled with the cost competitive back-end in India offers a strategic fit.
Reliance Vision Fund was launched in October 1995. The fund invests in large cap,
highly liquid stocks with good fundamentals and long-term prospects. Long-term
investors, looking at bringing stability in their portfolio should invest in Reliance
Vision Fund.
The primary investment objective of the Scheme is to achieve long-term growth of

capital by investment in equity and equity-related securities through a research-
based investment approach.

3.9 Franklin India Prima Fund
Franklin India Prima Fund is an open-end aggressive equity fund that aims to
achieve capital appreciation through investments in relatively smaller, faster
growing companies. "Our focus is to provide exclusive access to the finest of India's
smaller companies", says the fund. Research has shown that dynamic and well-
managed, small and medium sized enterprises experience higher growth rates than
their well-established, larger counterparts. The fund believes that if identified early,
investments in such companies could give substantial capital appreciation over
time. Launched in December 1993, Franklin India Prima Fund has maintained a
good track record, having out-performed its benchmark over all time frames. It is
the top performer amongst its peers for the 3 months, 6 months and 3 years period,
while holds the second position in the 1 year and 2 years time frame.
As on April 30, 2003, the scheme's portfolio is spread across 14 sectors viz,
commodity chemicals, banks, heavy electrical equipment, IT consulting & services,
automobile, textile, oil & gas, pharmaceuticals, packaged food, services, electric
utilities, industrial conglomerates, personal products, media telecommunications.
Commodity Chemicals, Banks, Heavy Electrical Equipment, the top 3 sectors
together account for almost 47% of the total portfolio.

Analysis and interpretation
Calculation of Return and Risk of Selected Mutual Fund Schemes

and their Bench Marks
1. BSE SENSEX:
Table 4.1: Table showing Calculation of Risk and Return
Return in
Date SENSEX % (R-R1) (R-R1)2
1-Apr-05 6154.44
29-Apr-05 6605.04 7.32 4.47 20.02
31-May-05 6715.11 1.67 -1.18 1.39
30-Jun-05 7193.85 7.13 4.28 18.34
29-Jul-05 7635.42 6.14 3.29 10.83
31-Aug-05 7805.43 2.23 -0.62 0.39
30-Sep-05 8634.48 10.62 7.77 60.44
31-Oct-05 7892.32 -8.60 -11.44 130.93
30-Nov-05 8788.81 11.36 8.51 72.45
30-Dec-05 9397.93 6.93 4.08 16.67
31-Jan-06 9919.89 5.55 2.71 7.33
28-Feb-06 10370.24 4.54 1.69 2.86
31-Mar-06 11279.96 8.77 5.93 35.11
29-Apr-06 11851.93 5.07 2.22 4.94
31-May-06 10398.61 -12.26 -15.11 228.30
30-Jun-06 10609.25 2.03 -0.82 0.68
31-Jul-06 10743.88 1.27 -1.58 2.49
31-Aug-06 11699.05 8.89 6.04 36.52
29-Sep-06 12454.42 6.46 3.61 13.03
31-Oct-06 12961.90 4.07 1.23 1.51
30-Nov-06 13696.31 5.67 2.82 7.94
29-Dec-06 13786.91 0.66 -2.19 4.78
31-Jan-07 14090.92 2.21 -0.64 0.41
28-Feb-07 12938.09 -8.18 -11.03 121.63
30-Mar-07 13072.10 1.04 -1.81 3.28
30-Apr-07 13872.37 6.12 3.27 10.72
31-May-07 14544.46 4.84 2.00 3.99
29-Jun-07 14650.51 0.73 -2.12 4.49

31-Jul-07 15550.99 6.15 3.30 10.88
31-Aug-07 15318.60 -1.49 -4.34 18.85
28-Sep-07 17291.10 12.88 10.03 100.58
31-Oct-07 19837.99 14.73 11.88 141.19
30-Nov-07 19363.19 -2.39 -5.24 27.46
31-Dec-07 20286.99 4.77 1.92 3.70
31-Jan-08 17648.71 -13.00 -15.85 251.29
29-Feb-08 17578.72 -0.40 -3.24 10.52
31-Mar-08 15644.44 -11.00 -13.85 191.85
Total 102.50 1577.79
Bench Mark Return and Risk (BSE Sensex)
Return = (P1-P0 /P0 *100)-100

Where, P1 = Current month price,
P0 = Previous month price
R1 = ∑R/n, where n=number of months.
R1 = 102.50/36
=2.85
SD = √∑(R- R1)2 /n
= √1577.79/36
SD = 6.62

2. NIFTY:
Return in
Date NIFTY % (R-R1) (R-R1)2
1-Apr-05 2024.25
29-Apr-05 1902.50 -6.01 -8.66 75.07
31-May-05 2072.40 8.93 6.28 39.44
30-Jun-05 2220.60 7.15 4.50 20.26
29-Jul-05 2312.30 4.13 1.48 2.19
31-Aug-05 2384.65 3.13 0.48 0.23
30-Sep-05 2601.40 9.09 6.44 41.47
31-Oct-05 2370.95 -8.86 -11.51 132.45
30-Nov-05 2652.25 11.86 9.21 84.91
30-Dec-05 2836.55 6.95 4.30 18.48
31-Jan-06 3001.10 5.80 3.15 9.93
28-Feb-06 3074.70 2.45 -0.20 0.04
31-Mar-06 3402.55 10.66 8.01 64.21
29-Apr-06 3557.60 4.56 1.91 3.64
31-May-06 3071.05 -13.68 -16.33 266.55
30-Jun-06 3128.20 1.86 -0.79 0.62
31-Jul-06 3143.20 0.48 -2.17 4.71
31-Aug-06 3413.90 8.61 5.96 35.55
29-Sep-06 3588.40 5.11 2.46 6.06
31-Oct-06 3744.10 4.34 1.69 2.85
30-Nov-06 3954.50 5.62 2.97 8.82
29-Dec-06 3966.40 0.30 -2.35 5.52
31-Jan-07 4082.70 2.93 0.28 0.08
28-Feb-07 3745.30 -8.26 -10.91 119.12
30-Mar-07 3821.55 2.04 -0.61 0.38
30-Apr-07 4087.90 6.97 4.32 18.66
31-May-07 4295.80 5.09 2.44 5.93
29-Jun-07 4318.30 0.52 -2.13 4.52
31-Jul-07 4528.85 4.88 2.23 4.95
31-Aug-07 4464.00 -1.43 -4.08 16.66
28-Sep-07 5021.35 12.49 9.84 96.74
31-Oct-07 5900.65 17.51 14.86 220.86
30-Nov-07 5762.75 -2.34 -4.99 24.87

31-Dec-07 6138.60 6.52 3.87 14.99
31-Jan-08 5137.45 -16.31 -18.96 359.45
29-Feb-08 5223.50 1.67 -0.98 0.95
31-Mar-08 4734.50 -9.36 -12.01 144.28
Total 95.40 1855.42
Bench Mark Return and Risk (NIFTY)

Return = (P1-P0 /P0 *100)-100
R1 = 95.40/36
=2.65
SD = √∑(R- R1)2 /n
= √1855.42/36
SD = 7.18

3. BSE 200:
Return in
Date BSE 200 % (R-R1) (R-R1)2
1-Apr-05 867.58
29-Apr-05 821.02 -5.37 -7.89 62.25
31-May-05 889.31 8.32 5.79 33.58
30-Jun-05 923.08 3.80 1.27 1.62
29-Jul-05 978.28 5.98 3.46 11.95
31-Aug-05 1012.28 3.48 0.95 0.91
30-Sep-05 1098.02 8.47 5.95 35.36
31-Oct-05 999.57 -8.97 -11.49 132.00
30-Nov-05 1114.21 11.47 8.95 80.03
30-Dec-05 1186.23 6.46 3.94 15.53
31-Jan-06 1251.26 5.48 2.96 8.75
28-Feb-06 1295.01 3.50 0.97 0.95
31-Mar-06 1412.62 9.08 6.56 43.02
29-Apr-06 1500.48 6.22 3.70 13.66
31-May-06 1289.86 -14.04 -16.56 274.23
30-Jun-06 1271.02 -1.46 -3.98 15.87
31-Jul-06 1275.50 0.35 -2.17 4.71
31-Aug-06 1398.68 9.66 7.13 50.90
29-Sep-06 1495.48 6.92 4.40 19.34
31-Oct-06 1560.68 4.36 1.84 3.37
30-Nov-06 1645.24 5.42 2.89 8.38
29-Dec-06 1655.74 0.64 -1.88 3.55
31-Jan-07 1691.45 2.16 -0.37 0.13
28-Feb-07 1545.27 -8.64 -11.17 124.67
30-Mar-07 1556.72 0.74 -1.78 3.18
30-Apr-07 1666.14 7.03 4.51 20.30
31-May-07 1766.08 6.00 3.48 12.08
29-Jun-07 1804.81 2.19 -0.33 0.11
31-Jul-07 1894.18 4.95 2.43 5.90
31-Aug-07 1857.70 -1.93 -4.45 19.79
28-Sep-07 2118.86 14.06 11.54 133.06
31-Oct-07 2439.87 15.15 12.63 159.44
30-Nov-07 2454.23 0.59 -1.93 3.74
31-Dec-07 2656.52 8.24 5.72 32.71

31-Jan-08 2230.39 -16.04 -18.56 344.63
29-Feb-08 2217.47 -0.58 -3.10 9.63
31-Mar-08 1932.41 -12.86 -15.38 236.49
Total 90.84 1925.82
Bench Mark Return and Risk (BSE 100)

Return = (P1-P0 /P0 *100)-100
R1 = R/n,
Where n=number of months.
R1 = 90.84/36
= 2.52
SD = √ ∑(R- R1)2 /n
=√ 1925.82/36
SD = 7.31

4. BSE 100:
Return
Date BSE 100 in % (R-R1) (R-R1)2
1-Apr-05 3481.86
29-Apr-05 3313.45 -4.84 -7.52 56.62
31-May-05 3601.73 8.70 6.01 36.15
30-Jun-05 3800.24 5.51 2.82 7.97
29-Jul-05 4072.15 7.16 4.47 19.96
31-Aug-05 4184.83 2.77 0.08 0.01
30-Sep-05 4566.63 9.12 6.44 41.42
31-Oct-05 4159.59 -8.91 -11.60 134.59
30-Nov-05 4649.87 11.79 9.10 82.79
30-Dec-05 4953.28 6.53 3.84 14.72
31-Jan-06 5224.97 5.49 2.80 7.82
28-Feb-06 5422.67 3.78 1.10 1.20
31-Mar-06 5904.17 8.88 6.19 38.33
29-Apr-06 6251.39 5.88 3.19 10.20
31-May-06 5385.21 -13.86 -16.54 273.69
30-Jun-06 5382.11 -0.06 -2.75 7.54
31-Jul-06 5422.39 0.75 -1.94 3.76
31-Aug-06 5933.77 9.43 6.74 45.47
29-Sep-06 6328.33 6.65 3.96 15.69
31-Oct-06 6603.60 4.35 1.66 2.76
30-Nov-06 6931.05 4.96 2.27 5.16
29-Dec-06 6982.56 0.74 -1.94 3.78
31-Jan-07 7145.91 2.34 -0.35 0.12
28-Feb-07 6527.12 -8.66 -11.35 128.76
30-Mar-07 6587.21 0.92 -1.77 3.12
30-Apr-07 7032.93 6.77 4.08 16.63
31-May-07 7468.70 6.20 3.51 12.31
29-Jun-07 7605.37 1.83 -0.86 0.74
31-Jul-07 8004.05 5.24 2.55 6.52
31-Aug-07 7857.61 -1.83 -4.52 20.41
28-Sep-07 8967.41 14.12 11.44 130.78
31-Oct-07 10391.19 15.88 13.19 173.96
30-Nov-07 10384.40 -0.07 -2.75 7.58
31-Dec-07 11154.28 7.41 4.73 22.33
31-Jan-08 9440.94 -15.36 -18.05 325.74
29-Feb-08 9404.98 -0.38 -3.07 9.42

31-Mar-08 8,232.82 -12.46 -15.15 229.54
Total 96.77 1897.60
Bench Mark Return and Risk (BSE 100)

Return = (P1-P0 /P0 *100)-100
R1 = R/n,
R1 = 96.77/36
= 2.69
SD = √ ∑(R- R1)2 /n
=√ 1897.60/36
SD = 7.26

Return and Risk of Selected Mutual Fund Schemes
1. KOTAK 30
Kotak 30 is an open ended equity growth fund. Its objective is to
generate capital appreciation from a portfolio of predominantly equity & equity
related schemes. Monthly risk & return from 01st April 2005 to 31st March 2008 is
calculated below.
Net Asset Return (R-

Date Value in % R1) (R-R1)2
1-Apr-05 32.62
29-Apr-05 30.67 -5.96 -8.95 80.03
31-May-05 32.88 7.20 4.22 17.77
30-Jun-05 33.65 2.32 -0.66 0.44
29-Jul-05 37.51 11.50 8.51 72.43
31-Aug-05 40.73 8.57 5.59 31.21
30-Sep-05 44.18 8.47 5.48 30.05
31-Oct-05 40.07 -9.29 -12.28 150.74
30-Nov-05 44.81 11.81 8.83 77.92
30-Dec-05 47.59 6.21 3.22 10.37
31-Jan-06 51.62 8.47 5.48 30.04
28-Feb-06 53.62 3.88 0.90 0.80
31-Mar-06 59.46 10.89 7.90 62.46
29-Apr-06 63.38 6.59 3.60 12.98
31-May-06 56.71 -10.52 -13.50 182.34
30-Jun-06 53.73 -5.27 -8.25 68.14
31-Jul-06 53.37 -0.67 -3.65 13.35
31-Aug-06 58.09 8.84 5.86 34.33
29-Sep-06 61.13 5.24 2.26 5.10
31-Oct-06 63.51 3.89 0.90 0.82
30-Nov-06 67.45 6.21 3.22 10.37
29-Dec-06 68.34 1.32 -1.66 2.76
31-Jan-07 70.11 2.59 -0.40 0.16
28-Feb-07 64.32 -8.27 -11.26 126.71
30-Mar-07 65.00 1.06 -1.93 3.71
30-Apr-07 69.24 6.53 3.55 12.57
31-May-07 73.55 6.23 3.24 10.50

29-Jun-07 75.13 2.15 -0.84 0.71
31-Jul-07 79.61 5.97 2.98 8.89
31-Aug-07 78.30 -1.66 -4.64 21.54
28-Sep-07 87.76 12.08 9.10 82.79
31-Oct-07 104.28 18.82 15.84 250.76
30-Nov-07 105.53 1.21 -1.78 3.16
31-Dec-07 113.84 7.87 4.88 23.82
31-Jan-08 98.80 -13.21 -16.19 262.23
29-Feb-08 97.60 -1.22 -4.20 17.68
31-Mar-08 85.53 -12.37 -15.35 235.71
Total 107.49 1955.39
Table 4.6: Table showing Calculation of Beta
Return of Return of [Ra-Ra1] (Rm-

Date Company Market Ra-Ra1 Rm-Rm1 (Rm-Rm1) Rm1)2
1-Apr-05
29-Apr-05 -5.96 -6.01 -8.95 -8.66 77.51 75.07
31-May-05 7.20 8.93 4.22 6.28 26.48 39.44
30-Jun-05 2.32 7.15 -0.66 4.50 -2.98 20.26
29-Jul-05 11.50 4.13 8.51 1.48 12.59 2.19
31-Aug-05 8.57 3.13 5.59 0.48 2.68 0.23
30-Sep-05 8.47 9.09 5.48 6.44 35.30 41.47
31-Oct-05 -9.29 -8.86 -12.28 -11.51 141.30 132.45
30-Nov-05 11.81 11.86 8.83 9.21 81.34 84.91
30-Dec-05 6.21 6.95 3.22 4.30 13.85 18.48
31-Jan-06 8.47 5.80 5.48 3.15 17.27 9.93
28-Feb-06 3.88 2.45 0.90 -0.20 -0.18 0.04
31-Mar-06 10.89 10.66 7.90 8.01 63.33 64.21
29-Apr-06 6.59 4.56 3.60 1.91 6.87 3.64
31-May-06 -10.52 -13.68 -13.50 -16.33 220.46 266.55
30-Jun-06 -5.27 1.86 -8.25 -0.79 6.51 0.62
31-Jul-06 -0.67 0.48 -3.65 -2.17 7.93 4.71
31-Aug-06 8.84 8.61 5.86 5.96 34.93 35.55
29-Sep-06 5.24 5.11 2.26 2.46 5.56 6.06
31-Oct-06 3.89 4.34 0.90 1.69 1.53 2.85
30-Nov-06 6.21 5.62 3.22 2.97 9.56 8.82

29-Dec-06 1.32 0.30 -1.66 -2.35 3.90 5.52
31-Jan-07 2.59 2.93 -0.40 0.28 -0.11 0.08
28-Feb-07 -8.27 -8.26 -11.26 -10.91 122.86 119.12
30-Mar-07 1.06 2.04 -1.93 -0.61 1.18 0.38
30-Apr-07 6.53 6.97 3.55 4.32 15.31 18.66
31-May-07 6.23 5.09 3.24 2.44 7.89 5.93
29-Jun-07 2.15 0.52 -0.84 -2.13 1.79 4.52
31-Jul-07 5.97 4.88 2.98 2.23 6.64 4.95
31-Aug-07 -1.66 -1.43 -4.64 -4.08 18.95 16.66
28-Sep-07 12.08 12.49 9.10 9.84 89.49 96.74
31-Oct-07 18.82 17.51 15.84 14.86 235.33 220.86
30-Nov-07 1.21 -2.34 -1.78 -4.99 8.87 24.87
31-Dec-07 7.87 6.52 4.88 3.87 18.90 14.99
31-Jan-08 -13.21 -16.31 -16.19 -18.96 307.01 359.45
29-Feb-08 -1.22 1.67 -4.20 -0.98 4.10 0.95
31-Mar-08 -12.37 -9.36 -15.35 -12.01 184.41 144.28
Total 107.49 95.40 1788.36 1855.42
Calculation of Risk and Return

Return = (P1-P0 /P0 *100) - 100
Where, P1 = Current month price, P0 = Previous month price
R1 = ∑R/n,
R1 = 107.49/36
= 2.99
SD = √ ∑(R- R1)2 /n
= √1955.39/36
SD = 7.37
Calculation of Beta
B = [∑ (Ra –Ra1)(Rm-Rm1)]/ ∑ (Rm-Rm1)2
Where Ra = Return on Company, Ra1= Average return on company
Rm= Return on market, Rm1= Average return on market
= 1788.36/1855.42
B = 0.96

Calculation of Alpha
Alpha = (Ra1-Rm1)*B
= (2.99-2.65)*0.96
=0.32
Risk and return of KOTAK 30
Factor Percentage
Risk 7.37
Return 2.99
Beta 0.96
Alpha 0.32
Chart 4.1:Chart showing risk & return of Kotak 30
Risk & Return of Kotak 30
8
7
6
Percentage
5
4 Percentage
3
2
1
0
Risk Return Beta Alpha
Factor
ANALYSIS:
¾ Kotak 30 has a risk factor of 7.37%
¾ Its rate of return on a monthly average is 2.99%
¾ Beta and Alpha are 0.96 and 0.32 respectively
INTERPRETATION:
Beta of Kotak 30 is 0.96 which is less than one; it shows less volatility of the fund
with respect to market. Risk of the fund is 7.37% and the rate of return is 2.99%.

2. HDFC TOP 200
HDFC Top 200 is an opened ended equity & equity linked

scheme. Its objective is to generate long term capital appreciation from a portfolio
of equity & equity-linked instruments primarily drawn from the companies in BSE
200 index. Monthly risk & return from 01st April 2005 to 31st March 2008 is
calculated below.
Net Asset Return in

Date Value % (R-R1) (R-R1)2
1-Apr-05 53.22
29-Apr-05 49.93 -6.18 -8.95 80.14
31-May-05 54.93 10.01 7.25 52.50
30-Jun-05 57.34 4.39 1.62 2.63
29-Jul-05 60.76 5.96 3.19 10.16
31-Aug-05 63.53 4.57 1.80 3.23
30-Sep-05 69.90 10.02 7.25 52.52
31-Oct-05 66.01 -5.56 -8.33 69.33
30-Nov-05 74.02 12.13 9.37 87.72
30-Dec-05 79.98 8.05 5.29 27.94
31-Jan-06 84.60 5.77 3.00 9.02
28-Feb-06 87.25 3.14 0.37 0.14
31-Mar-06 96.26 10.32 7.56 57.09
29-Apr-06 98.53 2.36 -0.41 0.16
31-May-06 87.33 -11.37 -14.14 199.83
30-Jun-06 85.83 -1.72 -4.48 20.11
31-Jul-06 87.44 1.87 -0.90 0.80
31-Aug-06 95.57 9.30 6.53 42.63
29-Sep-06 100.85 5.53 2.76 7.60
31-Oct-06 105.01 4.12 1.36 1.84
30-Nov-06 109.48 4.25 1.49 2.21
29-Dec-06 109.93 0.41 -2.36 5.57
31-Jan-07 112.36 2.21 -0.55 0.31
28-Feb-07 103.27 -8.09 -10.86 117.91
30-Mar-07 104.50 1.20 -1.57 2.47
30-Apr-07 111.81 6.99 4.22 17.79
31-May-07 119.10 6.52 3.75 14.08
29-Jun-07 120.34 1.04 -1.72 2.97

31-Jul-07 127.61 6.04 3.28 10.73
31-Aug-07 126.20 -1.11 -3.88 15.02
28-Sep-07 140.49 11.32 8.55 73.18
31-Oct-07 160.22 14.04 11.27 127.03
30-Nov-07 158.36 -1.16 -3.93 15.43
31-Dec-07 169.79 7.22 4.45 19.84
31-Jan-08 147.72 -13.00 -15.77 248.69
29-Feb-08 147.69 -0.02 -2.79 7.77
31-Mar-08 131.54 -10.93 -13.70 187.69
Total 99.66 1594.13

1-Apr-05
29-Apr-05 -5.96 -6.01 -8.95 -7.89 70.63 62.25
31-May-05 7.20 8.93 7.25 5.79 41.98 33.58
30-Jun-05 2.32 7.15 1.62 1.27 2.07 1.62
29-Jul-05 11.50 4.13 3.19 3.46 11.02 11.95
31-Aug-05 8.57 3.13 1.80 0.95 1.71 0.91
30-Sep-05 8.47 9.09 7.25 5.95 43.10 35.36
31-Oct-05 -9.29 -8.86 -8.33 -11.49 95.67 132.00
30-Nov-05 11.81 11.86 9.37 8.95 83.79 80.03
30-Dec-05 6.21 6.95 5.29 3.94 20.83 15.53
31-Jan-06 8.47 5.80 3.00 2.96 8.89 8.75
28-Feb-06 3.88 2.45 0.37 0.97 0.36 0.95
31-Mar-06 10.89 10.66 7.56 6.56 49.55 43.02
29-Apr-06 6.59 4.56 -0.41 3.70 -1.50 13.66
31-May-06 -10.52 -13.68 -14.14 -16.56 234.09 274.23
30-Jun-06 -5.27 1.86 -4.48 -3.98 17.87 15.87
31-Jul-06 -0.67 0.48 -0.90 -2.17 1.95 4.71
31-Aug-06 8.84 8.61 6.53 7.13 46.58 50.90
29-Sep-06 5.24 5.11 2.76 4.40 12.13 19.34
31-Oct-06 3.89 4.34 1.36 1.84 2.49 3.37
30-Nov-06 6.21 5.62 1.49 2.89 4.30 8.38
29-Dec-06 1.32 0.30 -2.36 -1.88 4.45 3.55
31-Jan-07 2.59 2.93 -0.55 -0.37 0.20 0.13
28-Feb-07 -8.27 -8.26 -10.86 -11.17 121.24 124.67
30-Mar-07 1.06 2.04 -1.57 -1.78 2.80 3.18
30-Apr-07 6.53 6.97 4.22 4.51 19.00 20.30

31-May-07 6.23 5.09 3.75 3.48 13.04 12.08
29-Jun-07 2.15 0.52 -1.72 -0.33 0.57 0.11
31-Jul-07 5.97 4.88 3.28 2.43 7.96 5.90
31-Aug-07 -1.66 -1.43 -3.88 -4.45 17.24 19.79
28-Sep-07 12.08 12.49 8.55 11.54 98.68 133.06
31-Oct-07 18.82 17.51 11.27 12.63 142.32 159.44
30-Nov-07 1.21 -2.34 -3.93 -1.93 7.60 3.74
31-Dec-07 7.87 6.52 4.45 5.72 25.48 32.71
31-Jan-08 -13.21 -16.31 -15.77 -18.56 292.76 344.63
29-Feb-08 -1.22 1.67 -2.79 -3.10 8.65 9.63
31-Mar-08 -12.37 -9.36 -13.70 -15.38 210.69 236.49
Total 107.49 95.40 1720.18 1925.82
Return = (P1-P0 /P0 *100) - 100

R1 = ∑R/n,
R1 = 99.66/36
= 2.77
SD = √ ∑(R- R1)2 /n
= √1594.13/36
SD = 6.65
Calculation of Beta
B = [∑ (Ra –Ra1)(Rm-Rm1)]/ ∑ (Rm-Rm1)2
= 1720.18/1925.82
B = 0.89
Alpha = (Ra1-Rm1)*B
= (2.77-2.52)*0.89
=0.22

Risk and return of HDFC TOP 200
Factor Percentage
Risk 6.65
Return 2.77
Beta 0.89
Alpha 0.22
Chart 4.2:Chart showing risk & return of HDFC TOP 20
Risk & Return of HDFC TOP 200
7
6
Percentage
5
4
Percentage
3
2
1
0
Factor
ANALYSIS:
¾ HDFC Top 200 has a risk factor of 6.65%

INTERPRETATION:
Beta of HDFC Top 200 is 0.89 which is less than one; it shows less volatility of the
fund with respect to market. Risk of the fund is 6.65% and the rate of return is
2.77%.

3. SBI CONTRA
SBI MSFU CONTRA is open ended growth fund. Its objective is to

achieve capital appreciation by investing in diversified stocks. Monthly risk &
return from 01st April 2005 to 31st March 2008 is calculated below.
Net Asset
Date Value Return in % (R-R1) (R-R1)2
1-Apr-05 17.38
29-Apr-05 16.52 -4.95 -8.09 65.45
31-May-05 17.16 3.87 0.73 0.54
30-Jun-05 17.66 2.91 -0.23 0.05
29-Jul-05 19.87 12.51 9.37 87.84
31-Aug-05 21.91 10.27 7.12 50.76
30-Sep-05 23.04 5.16 2.02 4.06
31-Oct-05 21.53 -6.55 -9.70 94.01
30-Nov-05 24.10 11.94 8.79 77.35
30-Dec-05 24.92 3.40 0.26 0.07
31-Jan-06 27.08 8.67 5.53 30.53
28-Feb-06 28.43 4.99 1.84 3.40
31-Mar-06 32.26 13.47 10.33 106.70
29-Apr-06 35.14 8.93 5.79 33.47
31-May-06 30.59 -12.95 -16.09 258.89
30-Jun-06 28.99 -5.23 -8.37 70.10
31-Jul-06 28.76 -0.79 -3.94 15.49
31-Aug-06 31.43 9.28 6.14 37.72
29-Sep-06 33.43 6.36 3.22 10.38
31-Oct-06 35.11 5.03 1.88 3.55
30-Nov-06 37.48 6.75 3.61 13.02
29-Dec-06 37.50 0.05 -3.09 9.54
31-Jan-07 38.78 3.41 0.27 0.07
28-Feb-07 35.69 -7.97 -11.11 123.43
30-Mar-07 35.55 -0.39 -3.53 12.49
30-Apr-07 38.86 9.31 6.17 38.05
31-May-07 41.43 6.61 3.47 12.05
29-Jun-07 41.97 1.30 -1.84 3.38
31-Jul-07 44.29 5.53 2.39 5.69

31-Aug-07 44.05 -0.54 -3.68 13.57
28-Sep-07 49.37 12.08 8.94 79.84
31-Oct-07 55.31 12.03 8.89 79.02
30-Nov-07 56.49 2.13 -1.01 1.02
31-Dec-07 62.36 10.39 7.25 52.55
31-Jan-08 51.74 -17.03 -20.17 406.92
29-Feb-08 51.50 -0.46 -3.61 13.00
31-Mar-08 45.65 -11.36 -14.50 210.29
Total 113.11 1958.84
Return Return of [Ra-Ra1] (Rm-

Date of Co Market Ra-Ra1 Rm-Rm1 (Rm-Rm1) Rm1)2
1-Apr-05
29-Apr-05 -4.95 -4.84 -8.09 -7.52 60.88 56.62
31-May05 3.87 8.70 0.73 6.01 4.40 36.15
30-Jun-05 2.91 5.51 -0.23 2.82 -0.64 7.97
29-Jul-05 12.51 7.16 9.37 4.47 41.87 19.96
31-Aug-05 10.27 2.77 7.12 0.08 0.56 0.01
30-Sep-05 5.16 9.12 2.02 6.44 12.97 41.42
31-Oct-05 -6.55 -8.91 -9.70 -11.60 112.48 134.59
30-Nov-05 11.94 11.79 8.79 9.10 80.02 82.79
30-Dec-05 3.40 6.53 0.26 3.84 1.00 14.72
31-Jan-06 8.67 5.49 5.53 2.80 15.46 7.82
28-Feb-06 4.99 3.78 1.84 1.10 2.02 1.20
31-Mar-06 13.47 8.88 10.33 6.19 63.96 38.33
29-Apr-06 8.93 5.88 5.79 3.19 18.47 10.20
31-May06 -12.95 -13.86 -16.09 -16.54 266.19 273.69
30-Jun-06 -5.23 -0.06 -8.37 -2.75 22.99 7.54
31-Jul-06 -0.79 0.75 -3.94 -1.94 7.63 3.76
31-Aug-06 9.28 9.43 6.14 6.74 41.41 45.47
29-Sep-06 6.36 6.65 3.22 3.96 12.76 15.69
31-Oct-06 5.03 4.35 1.88 1.66 3.13 2.76
30-Nov-06 6.75 4.96 3.61 2.27 8.19 5.16
29-Dec-06 0.05 0.74 -3.09 -1.94 6.01 3.78
31-Jan-07 3.41 2.34 0.27 -0.35 -0.09 0.12
28-Feb-07 -7.97 -8.66 -11.11 -11.35 126.07 128.76
30-Mar-07 -0.39 0.92 -3.53 -1.77 6.25 3.12
30-Apr-07 9.31 6.77 6.17 4.08 25.16 16.63
31-May07 6.61 6.20 3.47 3.51 12.18 12.31
29-Jun-07 1.30 1.83 -1.84 -0.86 1.58 0.74

31-Jul-07 5.53 5.24 2.39 2.55 6.09 6.52
31-Aug-07 -0.54 -1.83 -3.68 -4.52 16.64 20.41
28-Sep-07 12.08 14.12 8.94 11.44 102.18 130.78
31-Oct-07 12.03 15.88 8.89 13.19 117.25 173.96
30-Nov-07 2.13 -0.07 -1.01 -2.75 2.78 7.58
31-Dec-07 10.39 7.41 7.25 4.73 34.26 22.33
31-Jan-08 -17.03 -15.36 -20.17 -18.05 364.07 325.74
29-Feb-08 -0.46 -0.38 -3.61 -3.07 11.07 9.42
31-Mar-08 -11.36 -12.46 -14.50 -15.15 219.70 229.54
Total 113.11 96.77 1826.94 1897.60
Return = (P1-P0 /P0 *100) - 100

R1 = ∑R/n,
R1 = 113.11/36
=3.14
SD = √ ∑(R- R1)2 /n
= √1958.84/36
SD = 7.37
Calculation of Beta
B = [∑ (Ra –Ra1)(Rm-Rm1)]/ ∑ (Rm-Rm1)2

= 1826.94/1897.60
B = 0.96
Alpha = (Ra1-Rm1)*B
= (3.14-2.69)*0.96
=0.43

Risk and return of SBI CONTRA
Factor Percentage
Risk 7.38
Return 3.14
Beta 0.96
Alpha 0.44
Chart 4.3:Chart showing risk & return of SBI CONTRA
Risk & Return of SBI CONTRA
8
7
6
Percentage
5
4 Percentage
3
2
1
0
Factor
ANALYSIS:
¾ SBI Contra has a risk factor of 7.38%

INTERPRETATION:
Beta of SBI Contra is 0.96 which is less than one; it shows less volatility of the fund
with respect to market. Risk of the fund is 7.38% and the rate of return is 3.14%.

4. RELIANCE VISION FUND
RELIANCE VISION FUND is large cap open ended growth fund. Its
objective is to achieve long term growth of capital through a research based
investment approach. Monthly risk & return from 01st April 2005 to 31st March
2008 is calculated below.
Net Asset Return

Date Value in % (R-R1) (R-R1)2
1-Apr-05 88.13
29-Apr-05 86.10 -2.30 -4.96 24.63
31-May-05 91.64 6.43 3.77 14.25
30-Jun-05 91.49 -0.16 -2.82 7.97
29-Jul-05 99.75 9.03 6.37 40.56
31-Aug-05 104.82 5.08 2.42 5.87
30-Sep-05 114.32 9.06 6.40 41.01
31-Oct-05 105.35 -7.85 -10.51 110.37
30-Nov-05 118.05 12.06 9.40 88.28
30-Dec-05 125.97 6.71 4.05 16.40
31-Jan-06 134.38 6.68 4.02 16.13
28-Feb-06 139.26 3.63 0.97 0.94
31-Mar-06 155.75 11.84 9.18 84.30
29-Apr-06 165.65 6.36 3.70 13.67
31-May-06 141.84 -14.37 -17.03 290.13
30-Jun-06 137.65 -2.95 -5.61 31.51
31-Jul-06 138.85 0.87 -1.79 3.20
31-Aug-06 150.99 8.74 6.08 37.01
29-Sep-06 160.53 6.32 3.66 13.39
31-Oct-06 171.09 6.58 3.92 15.36
30-Nov-06 174.93 2.24 -0.42 0.17
29-Dec-06 183.67 5.00 2.34 5.46
31-Jan-07 184.14 0.26 -2.40 5.78
28-Feb-07 171.42 -6.91 -9.57 91.53
30-Mar-07 169.70 -1.00 -3.66 13.42
30-Apr-07 183.80 8.31 5.65 31.91
31-May-07 200.00 8.81 6.15 37.88
29-Jun-07 207.32 3.66 1.00 1.00
31-Jul-07 219.24 5.75 3.09 9.55
31-Aug-07 214.28 -2.26 -4.92 24.22

28-Sep-07 235.29 9.80 7.15 51.06
31-Oct-07 268.30 14.03 11.37 129.28
30-Nov-07 264.45 -1.43 -4.09 16.76
31-Dec-07 287.66 8.78 6.12 37.42
31-Jan-08 246.44 -14.33 -16.99 288.62
29-Feb-08 240.47 -2.42 -5.08 25.83
31-Mar-08 206.12 -14.28 -16.94 287.10
Total 95.74 1911.97
Return
Return of of [Ra-Ra1] (Rm-
1-Apr-05
29-Apr-05 -2.30 -4.84 -4.96 -7.52 37.34 56.62
31-May05 6.43 8.70 3.77 6.01 22.70 36.15
30-Jun-05 -0.16 5.51 -2.82 2.82 -7.97 7.97
29-Jul-05 9.03 7.16 6.37 4.47 28.45 19.96
31-Aug-05 5.08 2.77 2.42 0.08 0.19 0.01
30-Sep-05 9.06 9.12 6.40 6.44 41.21 41.42
31-Oct-05 -7.85 -8.91 -10.51 -11.60 121.88 134.59
30-Nov-05 12.06 11.79 9.40 9.10 85.49 82.79
30-Dec-05 6.71 6.53 4.05 3.84 15.54 14.72
31-Jan-06 6.68 5.49 4.02 2.80 11.24 7.82
28-Feb-06 3.63 3.78 0.97 1.10 1.07 1.20
31-Mar-06 11.84 8.88 9.18 6.19 56.85 38.33
29-Apr-06 6.36 5.88 3.70 3.19 11.80 10.20
31-May06 -14.37 -13.86 -17.03 -16.54 281.79 273.69
30-Jun-06 -2.95 -0.06 -5.61 -2.75 15.41 7.54
31-Jul-06 0.87 0.75 -1.79 -1.94 3.47 3.76
31-Aug-06 8.74 9.43 6.08 6.74 41.02 45.47
29-Sep-06 6.32 6.65 3.66 3.96 14.49 15.69
31-Oct-06 6.58 4.35 3.92 1.66 6.51 2.76
30-Nov-06 2.24 4.96 -0.42 2.27 -0.94 5.16
29-Dec-06 5.00 0.74 2.34 -1.94 -4.54 3.78
31-Jan-07 0.26 2.34 -2.40 -0.35 0.84 0.12
28-Feb-07 -6.91 -8.66 -9.57 -11.35 108.56 128.76
30-Mar-07 -1.00 0.92 -3.66 -1.77 6.47 3.12
30-Apr-07 8.31 6.77 5.65 4.08 23.04 16.63
31-May07 8.81 6.20 6.15 3.51 21.59 12.31

29-Jun-07 3.66 1.83 1.00 -0.86 -0.86 0.74
31-Jul-07 5.75 5.24 3.09 2.55 7.89 6.52
31-Aug-07 -2.26 -1.83 -4.92 -4.52 22.23 20.41
28-Sep-07 9.80 14.12 7.15 11.44 81.72 130.78
31-Oct-07 14.03 15.88 11.37 13.19 149.96 173.96
30-Nov-07 -1.43 -0.07 -4.09 -2.75 11.27 7.58
31-Dec-07 8.78 7.41 6.12 4.73 28.91 22.33
31-Jan-08 -14.33 -15.36 -16.99 -18.05 306.62 325.74
29-Feb-08 -2.42 -0.38 -5.08 -3.07 15.60 9.42
31-Mar-08 -14.28 -12.46 -16.94 -15.15 256.71 229.54
Total 95.74 96.77 1823.56 1897.60
Return = (P1-P0 /P0 *100) - 100

R1 = ∑R/n,
R1 = 95.74/36
=2.66
SD = √ ∑(R- R1)2 /n
= √1911.77/36
SD = 7.29
Calculation of Beta
B = [∑ (Ra –Ra1)(Rm-Rm1)]/ ∑ (Rm-Rm1)2

= 1823.56/1897.60
B = 0.96
Alpha = (Ra1-Rm1)*B
= (2.66-2.69)*0.96
=-0.027

Risk and return of RELIANCE VISION FUND
Factor Percentage
Risk 7.29
Return 2.66
Beta 0.96
Alpha -0.03
Chart 4.4:Chart showing risk & return of RELIANCE VISION FUND
Risk & Return of RELIANCE VISION FUND
8
7
6
Percentage
5
4 Percentage
3
2
1
-1
Factor
ANALYSIS:
¾ Reliance Vision Fund has a risk factor of 7.29%

¾ Alpha and Beta are 0.96 and -0.03 respectively
INTERPRETATION:
Beta of Reliance Vision Fund is 0.96 which is less than one; it shows less volatility
of the fund with respect to market. Risk of the fund is 7.29% and the rate of return
is 2.66%.

5. FRANKLYN INDIA PRIMA FUND
FRANKLIN INDIA PRIMA FUND is mid cap open ended growth fund.
Its objective is to achieve long term growth of capital through a research based
investment approach. Monthly risk & return from 01st April 2005 to 31st March
2008 is calculated below.
Net Asset (Ra- (Ra-

Date Value Return Ra1) Ra1)^2
1-Apr-05 115.64
29-Apr-05 118.08 2.11 -0.55 0.30
31-May-05 124.54 5.47 2.81 7.90
30-Jun-05 122.89 -1.32 -3.98 15.88
29-Jul-05 136.37 10.97 8.31 69.05
31-Aug-05 154.47 13.27 10.61 112.64
30-Sep-05 158.65 2.71 0.05 0.00
31-Oct-05 149.40 -5.83 -8.49 72.08
30-Nov-05 164.69 10.23 7.57 57.38
30-Dec-05 174.03 5.67 3.01 9.07
31-Jan-06 180.17 3.53 0.87 0.75
28-Feb-06 182.34 1.20 -1.46 2.12
31-Mar-06 196.88 7.97 5.31 28.25
29-Apr-06 203.46 3.34 0.68 0.47
31-May-06 179.48 -11.79 -14.45 208.68
30-Jun-06 162.06 -9.71 -12.37 152.90
31-Jul-06 161.08 -0.60 -3.26 10.66
31-Aug-06 174.84 8.54 5.88 34.61
29-Sep-06 184.11 5.30 2.64 6.98
31-Oct-06 196.21 6.57 3.91 15.31
30-Nov-06 206.71 5.35 2.69 7.25
29-Dec-06 214.36 3.70 1.04 1.08
31-Jan-07 216.32 0.91 -1.75 3.05
28-Feb-07 194.89 -9.91 -12.57 157.91
30-Mar-07 186.51 -4.30 -6.96 48.43
30-Apr-07 199.12 6.76 4.10 16.82
31-May-07 217.34 9.15 6.49 42.13
29-Jun-07 226.76 4.33 1.67 2.80
31-Jul-07 231.45 2.07 -0.59 0.35
31-Aug-07 229.62 -0.79 -3.45 11.90

28-Sep-07 246.72 7.45 4.79 22.92
31-Oct-07 265.00 7.41 4.75 22.56
30-Nov-07 276.12 4.20 1.54 2.36
31-Dec-07 316.50 14.62 11.96 143.15
31-Jan-08 254.65 -19.54 -22.20 492.90
29-Feb-08 243.02 -4.57 -7.23 52.22
31-Mar-08 207.38 -14.67 -17.32 300.15
Total 69.83 2133.01

1-Apr-05
29-Apr-05 2.11 -4.84 -0.55 -7.52 4.13 56.62
31-May-05 5.47 8.70 2.81 6.01 16.90 36.15
30-Jun-05 -1.32 5.51 -3.98 2.82 -11.25 7.97
29-Jul-05 10.97 7.16 8.31 4.47 37.12 19.96
31-Aug-05 13.27 2.77 10.61 0.08 0.84 0.01
30-Sep-05 2.71 9.12 0.05 6.44 0.30 41.42
31-Oct-05 -5.83 -8.91 -8.49 -11.60 98.49 134.59
30-Nov-05 10.23 11.79 7.57 9.10 68.92 82.79
30-Dec-05 5.67 6.53 3.01 3.84 11.56 14.72
31-Jan-06 3.53 5.49 0.87 2.80 2.43 7.82
28-Feb-06 1.20 3.78 -1.46 1.10 -1.59 1.20
31-Mar-06 7.97 8.88 5.31 6.19 32.91 38.33
29-Apr-06 3.34 5.88 0.68 3.19 2.18 10.20
31-May-06 -11.79 -13.86 -14.45 -16.54 238.98 273.69
30-Jun-06 -9.71 -0.06 -12.37 -2.75 33.95 7.54
31-Jul-06 -0.60 0.75 -3.26 -1.94 6.33 3.76
31-Aug-06 8.54 9.43 5.88 6.74 39.67 45.47
29-Sep-06 5.30 6.65 2.64 3.96 10.47 15.69
31-Oct-06 6.57 4.35 3.91 1.66 6.50 2.76
30-Nov-06 5.35 4.96 2.69 2.27 6.11 5.16
29-Dec-06 3.70 0.74 1.04 -1.94 -2.03 3.78
31-Jan-07 0.91 2.34 -1.75 -0.35 0.61 0.12
28-Feb-07 -9.91 -8.66 -12.57 -11.35 142.59 128.76
30-Mar-07 -4.30 0.92 -6.96 -1.77 12.30 3.12
30-Apr-07 6.76 6.77 4.10 4.08 16.73 16.63
31-May-07 9.15 6.20 6.49 3.51 22.77 12.31

29-Jun-07 4.33 1.83 1.67 -0.86 -1.44 0.74
31-Jul-07 2.07 5.24 -0.59 2.55 -1.51 6.52
31-Aug-07 -0.79 -1.83 -3.45 -4.52 15.59 20.41
28-Sep-07 7.45 14.12 4.79 11.44 54.75 130.78
31-Oct-07 7.41 15.88 4.75 13.19 62.65 173.96
30-Nov-07 4.20 -0.07 1.54 -2.75 -4.23 7.58
31-Dec-07 14.62 7.41 11.96 4.73 56.54 22.33
31-Jan-08 -19.54 -15.36 -22.20 -18.05 400.70 325.74
29-Feb-08 -4.57 -0.38 -7.23 -3.07 22.18 9.42
31-Mar-08 -14.67 -12.46 -17.32 -15.15 262.48 229.54
Total 69.83 96.77 -25.91 1665.63 1897.60
Return = (P1-P0 /P0 *100) - 100

R1 = ∑R/n,
R1 = 69.83/36
=1.94
SD = √ ∑(R- R1)2 /n
= √2133.01/36
SD = 7.70
Calculation of Beta
B = [∑ (Ra –Ra1)(Rm-Rm1)]/ ∑ (Rm-Rm1)2

= 1665.63/1897.60
B = 0.88
Alpha = (Ra1-Rm1)*B
= (1.94-2.68)*0.88
=-0.66

Risk and return of FRANKLYN INDIA PRIMA FUND
Factor Percentage
Risk 7.70
Return 1.94
Beta 0.88
Alpha -0.66
Chart 4.5:Chart showing risk & return of FRANKLYN fund
Risk & Return of FRANKLYN INDIA PRIMA FUND
10
8
6
Percentage
4 Percentage
2
0
-2 Risk Return Beta Alpha
Factor
ANALYSIS:
¾ Franklin India Prima Fund has a risk factor of 7.70%
¾ Alpha and Beta are 0.88 and -0.66 respectively
INTERPRETATION:
Beta of Franklin India Prima Fund is 0.88 which is less than one; it shows less
volatility of the fund with respect to market. Risk of the fund is 7.70% and the rate
of return is 1.94%.

Table 4.15: Table showing
Average risk of selected mutual fund schemes
Mutual Fund Schemes Risk Beta Alpha

KOTAK 30 7.37 0.96 0.32
HDFC TOP 200 6.65 0.89 0.22
SBI CONTRA 7.38 0.96 0.44
RELIANCE VISION FUND 7.29 0.96 -0.03
FRANKLYN INDIA PRIMA FUND 7.70 0.88 -0.66
TOTAL 36.39
Bench Mark 6.62
Average risk = 36.39/5

= 7.28.
Chart 4.6:Chart showing risk factor of mutual funds
Risk factor of Mutual Funds
9
8
7
Risk,Alpha & Beta
6
5
Risk
4
Beta
3
Alpha
2
1
0
-1 KOTAK 30 HDFC Top SBI Contra Reliance Franklyn Bench Mark
200 Vision Fund India Prima
-2 Fund
Mutual Funds & Bench Mark

ANALYSIS:
¾ Franklyn India Prima Fund has the highest risk factor of 7.70% with 0.88
beta and -0.66 as alpha.
¾ HDFC TOP 200 Fund has the lowest risk factor of 6.65% with 0.89 of beta
and 0.22 of alpha.
¾ Bench Mark has the risk factor of 6.62.On an average Mutual Fund
schemes have the risk factor of 7.28.
INTERPETATION:
Risk is a major factor influencing all type of investors. In the above selected Mutual
Fund Schemes average risk factor is 7.28 even though the risk factor of bench mark
is 6..62, it is very close to average risk. It is showing Mutual Funds are also risky.
Average return of selected mutual fund schemes
Mutual Fund Schemes Return

KOTAK 30 2.99
HDFC TOP 200 2.77
SBI CONTRA 3.14
RELIANCE VISION FUND 2.66
FRANKLYN INDIA PRIMA FUND 1.94
Total 13.5
Bench Mark 2.85
Average Return = 13.50/5

= 2.70
Chart 4.7:Chart showing return of selected mutual funds

Return on selected Mutual Funds
4
3
Return in %
2 Return
0
Kotak 30 HDFC Top SBI Contra Reliance Franklyn Bench
200 Vision India Prima Mark
Fund Fund
Mutual Funds & Bench Mark
ANALYSIS:
¾ SBI Contra Fund has got the highest return of 3.14%.

¾ Franklyn India Prima Fund has got the lowest return of 1.94%.
¾ Bench Mark return is 2.85%.
¾ On an average Mutual Fund Schemes have got 2.70% per month.
INTERPETATION:
Return is a major factor influencing all type of investors. In the above selected
Mutual Fund Schemes average return is 2.70%, compared to bench mark return of
2.85%.So the returns on mutual fund are good and it will attract more and more
customers.

Calculation of Return and Risk of Selected companies
1. RELIANCE INDUSTRIES LTD
It is a diversified group of manufacturing companies, active in polymers,

chemicals, fiber intermediates, petroleum, textiles and procurement. Monthly
risk & return from 01st April 2005 to 31st March 2008 is calculated below.
Scrip Return in
1-Apr-05 564.60
29-Apr-05 528.05 -6.47 -10.88 118.40
31-May-05 535.00 1.32 -3.09 9.56
30-Jun-05 642.55 20.10 15.70 246.35
29-Jul-05 703.35 9.46 5.05 25.55
31-Aug-05 719.40 2.28 -2.13 4.52
30-Sep-05 793.55 10.31 5.90 34.81
31-Oct-05 762.50 -3.91 -8.32 69.23
30-Nov-05 832.70 9.21 4.80 23.03
30-Dec-05 889.30 6.80 2.39 5.71
31-Jan-06 713.90 -19.72 -24.13 582.29
28-Feb-06 708.85 -0.71 -5.11 26.16
31-Mar-06 795.35 12.20 7.80 60.77
29-Apr-06 1022.95 28.62 24.21 586.07
31-May-06 954.15 -6.73 -11.13 123.94
30-Jun-06 1059.85 11.08 6.67 44.50
31-Jul-06 978.80 -7.65 -12.05 145.32
31-Aug-06 1117.35 14.16 9.75 95.02
29-Sep-06 1171.75 4.87 0.46 0.21
31-Oct-06 1226.00 4.63 0.22 0.05
30-Nov-06 1244.45 1.50 -2.90 8.42
29-Dec-06 1270.15 2.07 -2.34 5.49
31-Jan-07 1366.45 7.58 3.17 10.08
28-Feb-07 1352.50 -1.02 -5.43 29.47
30-Mar-07 1370.30 1.32 -3.09 9.56
30-Apr-07 1561.05 13.92 9.51 90.50
31-May-07 1758.80 12.67 8.26 68.23
29-Jun-07 1700.55 -3.31 -7.72 59.59

31-Jul-07 1893.50 11.35 6.94 48.15
31-Aug-07 1960.90 3.56 -0.85 0.72
28-Sep-07 2298.05 17.19 12.79 163.49
31-Oct-07 2783.80 21.14 16.73 279.90
30-Nov-07 2851.65 2.44 -1.97 3.88
31-Dec-07 2882.70 1.09 -3.32 11.01
31-Jan-08 2478.90 -14.01 -18.42 339.12
29-Feb-08 2463.45 -0.62 -5.03 25.31
31-Mar-08 2265.80 -8.02 -12.43 154.52
Total 158.67 3508.89
Rm-
Return Return of (Ra-Ra1) Rm1)
Date of Co Market (Ra-Ra1) (Rm-Rm1) (Rm-Rm1) ^2
1-Apr-05
29-Apr-05 -6.47 7.32 -10.88 4.47 -48.68 20.02
31-May05 1.32 1.67 -3.09 -1.18 3.65 1.39
30-Jun-05 20.10 7.13 15.70 4.28 67.21 18.34
29-Jul-05 9.46 6.14 5.05 3.29 16.63 10.83
31-Aug-05 2.28 2.23 -2.13 -0.62 1.32 0.39
30-Sep-05 10.31 10.62 5.90 7.77 45.87 60.44
31-Oct-05 -3.91 -8.60 -8.32 -11.44 95.20 130.93
30-Nov-05 9.21 11.36 4.80 8.51 40.85 72.45
30-Dec-05 6.80 6.93 2.39 4.08 9.76 16.67
31-Jan-06 -19.72 5.55 -24.13 2.71 -65.31 7.33
28-Feb-06 -0.71 4.54 -5.11 1.69 -8.66 2.86
31-Mar-06 12.20 8.77 7.80 5.93 46.19 35.11
29-Apr-06 28.62 5.07 24.21 2.22 53.83 4.94
31-May06 -6.73 -12.26 -11.13 -15.11 168.22 228.30
30-Jun-06 11.08 2.03 6.67 -0.82 -5.48 0.68
31-Jul-06 -7.65 1.27 -12.05 -1.58 19.03 2.49
31-Aug-06 14.16 8.89 9.75 6.04 58.91 36.52
29-Sep-06 4.87 6.46 0.46 3.61 1.66 13.03
31-Oct-06 4.63 4.07 0.22 1.23 0.27 1.51
30-Nov-06 1.50 5.67 -2.90 2.82 -8.18 7.94
29-Dec-06 2.07 0.66 -2.34 -2.19 5.12 4.78
31-Jan-07 7.58 2.21 3.17 -0.64 -2.04 0.41
28-Feb-07 -1.02 -8.18 -5.43 -11.03 59.87 121.63
30-Mar-07 1.32 1.04 -3.09 -1.81 5.60 3.28

30-Apr-07 13.92 6.12 9.51 3.27 31.15 10.72
31-May07 12.67 4.84 8.26 2.00 16.50 3.99
29-Jun-07 -3.31 0.73 -7.72 -2.12 16.35 4.49
31-Jul-07 11.35 6.15 6.94 3.30 22.89 10.88
31-Aug-07 3.56 -1.49 -0.85 -4.34 3.68 18.85
28-Sep-07 17.19 12.88 12.79 10.03 128.24 100.58
31-Oct-07 21.14 14.73 16.73 11.88 198.79 141.19
30-Nov-07 2.44 -2.39 -1.97 -5.24 10.32 27.46
31-Dec-07 1.09 4.77 -3.32 1.92 -6.38 3.70
31-Jan-08 -14.01 -13.00 -18.42 -15.85 291.92 251.29
29-Feb-08 -0.62 -0.40 -5.03 -3.24 16.32 10.52
31-Mar-08 -8.02 -11.00 -12.43 -13.85 172.18 191.85
1577.7
TOTAL 158.67 102.50 0.00 0.00 1462.78 9
Return=P1-P0 /P0 *100

R1 = 158.67/36
=4.40
SD = √ ∑ (R- R1)2 /n
= √3508.89/36
SD = 9.87
Calculation of Beta
B = [∑(Ra Ra1)(Rm-Rm1)]/ ∑(Rm-Rm1)2

= 1462.78/1577.79
B = 0.93
Alpha = (Ra1-Rm1)*B
= (4.40-2.85)*0.93
=1.45

Risk and return of Reliance
Factor Percentage
Risk 9.87
Return 4.41
Beta 0.93
Alpha 1.45
Chart 4.8:Chart showing risk & return of Reliance
Risk & Return of Reliance
10
9
8
7
Percentage
6
5 Percentage
4
3
2
1
0
Factor
ANALYSIS:
¾ Reliance Industries Ltd. has a risk factor of 9.87%

¾ Alpha and Beta are 1.45 and 0.93 respectively
INTERPRETATION:
Beta of the Reliance Industries ltd. is 0.93 which is less than one; it shows the less
volatility of scrip with respect to market. Risk of the share is 9.87% and the rate of
return is only 4.41%.

2. BHARAT HEAVY ELECTRICALS LTD
BHEL is the largest engineering and manufacturing enterprise in India in

the energy-related/infrastructure sector, today. Its vision is to become a world-
class engineering enterprise, committed to enhancing stakeholder value.
Monthly risk & return from 01st April 2005 to 31st March 2008 is calculated
below.
Scrip Return in
1-Apr-05 801.65
29-Apr-05 792.40 -1.15 -6.39 40.86
31-May-05 882.00 11.31 6.07 36.84
30-Jun-05 867.95 -1.59 -6.83 46.66
29-Jul-05 1006.85 16.00 10.77 115.89
31-Aug-05 1067.10 5.98 0.75 0.56
30-Sep-05 1224.15 14.72 9.48 89.86
31-Oct-05 1129.95 -7.70 -12.93 167.27
30-Nov-05 1427.15 26.30 21.06 443.69
30-Dec-05 1387.05 -2.81 -8.05 64.77
31-Jan-06 1795.60 29.45 24.22 586.43
28-Feb-06 2027.00 12.89 7.65 58.51
31-Mar-06 2241.95 10.60 5.37 28.80
29-Apr-06 2358.10 5.18 -0.06 0.00
31-May-06 1903.30 -19.29 -24.52 601.47
30-Jun-06 1949.45 2.42 -2.81 7.92
31-Jul-06 2045.20 4.91 -0.33 0.11
31-Aug-06 2261.00 10.55 5.31 28.23
29-Sep-06 2398.80 6.09 0.86 0.73
31-Oct-06 2420.10 0.89 -4.35 18.92
30-Nov-06 2505.75 3.54 -1.70 2.89
29-Dec-06 2299.35 -8.24 -13.48 181.58
31-Jan-07 2523.15 9.73 4.49 20.20
28-Feb-07 2181.80 -13.53 -18.77 352.20
30-Mar-07 2261.35 3.65 -1.59 2.53
30-Apr-07 2487.85 10.02 4.78 22.83
31-May-07 1399.10 11.09 5.85 34.26

29-Jun-07 1537.85 9.92 4.68 21.89
31-Jul-07 1728.00 12.36 7.13 50.79
31-Aug-07 1888.45 9.29 4.05 16.38
28-Sep-07 2036.95 7.86 2.63 6.89
31-Oct-07 2607.55 28.01 22.77 518.67
30-Nov-07 2679.50 2.76 -2.48 6.14
31-Dec-07 2589.75 -3.35 -8.59 73.75
31-Jan-08 2060.30 -20.44 -25.68 659.58
29-Feb-08 2286.85 11.00 5.76 33.15
31-Mar-08 2061.35 -9.86 -15.10 227.98
Total 188.58 4569.22
Table 4.20: Table showing Calculation of beta
Return Return (Ra-Ra1) (Rm-

Date of Co of Mkt (Ra-Ra1) (Rm-Rm1) (Rm-Rm1) Rm1)2
1-Apr-05
29-Apr-05 -1.15 7.32 -6.39 4.47 -28.60 20.02
31-May05 11.31 1.67 6.07 -1.18 -7.17 1.39
30-Jun-05 -1.59 7.13 -6.83 4.28 -29.25 18.34
29-Jul-05 16.00 6.14 10.77 3.29 35.43 10.83
31-Aug-05 5.98 2.23 0.75 -0.62 -0.46 0.39
30-Sep-05 14.72 10.62 9.48 7.77 73.69 60.44
31-Oct-05 -7.70 -8.60 -12.93 -11.44 147.99 130.93
30-Nov-05 26.30 11.36 21.06 8.51 179.29 72.45
30-Dec-05 -2.81 6.93 -8.05 4.08 -32.86 16.67
31-Jan-06 29.45 5.55 24.22 2.71 65.55 7.33
28-Feb-06 12.89 4.54 7.65 1.69 12.95 2.86
31-Mar-06 10.60 8.77 5.37 5.93 31.79 35.11
29-Apr-06 5.18 5.07 -0.06 2.22 -0.13 4.94
31-May06 -19.29 -12.26 -24.52 -15.11 370.56 228.30
30-Jun-06 2.42 2.03 -2.81 -0.82 2.31 0.68
31-Jul-06 4.91 1.27 -0.33 -1.58 0.52 2.49
31-Aug-06 10.55 8.89 5.31 6.04 32.11 36.52
29-Sep-06 6.09 6.46 0.86 3.61 3.09 13.03
31-Oct-06 0.89 4.07 -4.35 1.23 -5.34 1.51
30-Nov-06 3.54 5.67 -1.70 2.82 -4.79 7.94
29-Dec-06 -8.24 0.66 -13.48 -2.19 29.45 4.78
31-Jan-07 9.73 2.21 4.49 -0.64 -2.89 0.41
28-Feb-07 -13.53 -8.18 -18.77 -11.03 206.97 121.63
30-Mar-07 3.65 1.04 -1.59 -1.81 2.88 3.28
30-Apr-07 10.02 6.12 4.78 3.27 15.65 10.72

31May07* 11.09 4.84 5.85 2.00 11.69 3.99
29-Jun-07 9.92 0.73 4.68 -2.12 -9.91 4.49
31-Jul-07 12.36 6.15 7.13 3.30 23.51 10.88
31-Aug-07 9.29 -1.49 4.05 -4.34 -17.57 18.85
28-Sep-07 7.86 12.88 2.63 10.03 26.33 100.58
31-Oct-07 28.01 14.73 22.77 11.88 270.61 141.19
30-Nov-07 2.76 -2.39 -2.48 -5.24 12.99 27.46
31-Dec-07 -3.35 4.77 -8.59 1.92 -16.52 3.70
31-Jan-08 -20.44 -13.00 -25.68 -15.85 407.12 251.29
29-Feb-08 11.00 -0.40 5.76 -3.24 -18.68 10.52
31-Mar-08 -9.86 -11.00 -15.10 -13.85 209.13 191.85
TOTAL 188.58 102.50 1997.45 1577.79
• indicates that on 31-05-2007 the scrip was split in the ratio of 1:1.

R1 = 188.58/36
=5.24
SD = √ ∑ (R- R1)2 /n
= √4569.22/36
SD = 11.27
Calculation of Beta
B = [∑(Ra Ra1)(Rm-Rm1)]/ ∑(Rm-Rm1)2

= 1997.45/1577.79
B = 1.27
Alpha = (Ra1-Rm1)*B
= (5.24-2.85)*1.27
=3.03

Risk and return of BHEL
Factor Percentage
Risk 11.27
Return 5.24
Beta 1.27
Alpha 3.03
Chart 4.9:Chart showing risk & return of BHEL
Risk & Return of BHEL
12
11
10
9
8
Percentage
7
6 Percentage
5
4
3
2
1
0
Factor
ANALYSIS:
¾ BHEL has a risk factor of 11.27%

INTERPRETATION:
Beta of BHEL is 1.27 which is higher to one; it shows the high volatility of scrip
with respect to market. Risk of the share is 11.27% and the rate of return is 5.24%.

3. HOUSING DEVELOPMENT FINANCE CORPORATION LTD
HDFC is a service enterprise with the objective of meeting a social

need - that of promoting home ownership by providing long-term finance to
households for their housing needs. Monthly risk & return from 01st April 2005
to 31st March 2008 is calculated below.
Scrip Return in
1-Apr-05 716.65
29-Apr-05 731.20 2.03 -1.75 3.05
31-May-05 763.60 4.43 0.66 0.43
30-Jun-05 890.85 16.66 12.89 166.12
29-Jul-05 925.80 3.92 0.15 0.02
31-Aug-05 903.80 -2.38 -6.15 37.85
30-Sep-05 1039.40 15.00 11.23 126.06
31-Oct-05 967.90 -6.88 -10.65 113.52
30-Nov-05 1127.95 16.54 12.76 162.82
30-Dec-05 1207.00 7.01 3.23 10.45
31-Jan-06 1339.70 10.99 7.22 52.11
28-Feb-06 1365.65 1.94 -1.84 3.38
31-Mar-06 1336.80 -2.11 -5.89 34.67
29-Apr-06 1311.75 -1.87 -5.65 31.92
31-May-06 1123.55 -14.35 -18.12 328.44
30-Jun-06 1139.80 1.45 -2.33 5.43
31-Jul-06 1177.40 3.30 -0.48 0.23
31-Aug-06 1310.15 11.27 7.50 56.24
29-Sep-06 1533.15 17.02 13.25 175.44
31-Oct-06 1463.90 -4.52 -8.29 68.77
30-Nov-06 1646.95 12.50 8.73 76.19
29-Dec-06 1626.90 -1.22 -4.99 24.93
31-Jan-07 1673.85 2.89 -0.89 0.79
28-Feb-07 1507.25 -9.95 -13.73 188.48
30-Mar-07 1519.80 0.83 -2.94 8.66
30-Apr-07 1666.35 9.64 5.87 34.42
31-May-07 1882.60 12.98 9.20 84.67
29-Jun-07 2033.70 8.03 4.25 18.07

31-Jul-07 2017.10 -0.82 -4.59 21.09
31-Aug-07 1977.50 -1.96 -5.74 32.94
28-Sep-07 2527.90 27.83 24.06 578.76
31-Oct-07 2771.55 9.64 5.86 34.37
30-Nov-07 2781.40 0.36 -3.42 11.70
31-Dec-07 2877.75 3.46 -0.31 0.10
31-Jan-08 2839.10 -1.34 -5.12 26.20
29-Feb-08 2796.35 -1.51 -5.28 27.89
31-Mar-08 2379.75 -14.90 -18.67 348.71
Total 135.93 2894.89

1-Apr-05
29-Apr-05 2.03 7.32 -1.75 4.47 -7.81 20.02
31-May05 4.43 1.67 0.66 -1.18 -0.77 1.39
30-Jun-05 16.66 7.13 12.89 4.28 55.19 18.34
29-Jul-05 3.92 6.14 0.15 3.29 0.49 10.83
31-Aug-05 -2.38 2.23 -6.15 -0.62 3.82 0.39
30-Sep-05 15.00 10.62 11.23 7.77 87.29 60.44
31-Oct-05 -6.88 -8.60 -10.65 -11.44 121.92 130.93
30-Nov-05 16.54 11.36 12.76 8.51 108.61 72.45
30-Dec-05 7.01 6.93 3.23 4.08 13.20 16.67
31-Jan-06 10.99 5.55 7.22 2.71 19.54 7.33
28-Feb-06 1.94 4.54 -1.84 1.69 -3.11 2.86
31-Mar-06 -2.11 8.77 -5.89 5.93 -34.89 35.11
29-Apr-06 -1.87 5.07 -5.65 2.22 -12.56 4.94
31-May06 -14.35 -12.26 -18.12 -15.11 273.83 228.30
30-Jun-06 1.45 2.03 -2.33 -0.82 1.91 0.68
31-Jul-06 3.30 1.27 -0.48 -1.58 0.75 2.49
31-Aug-06 11.27 8.89 7.50 6.04 45.32 36.52
29-Sep-06 17.02 6.46 13.25 3.61 47.81 13.03
31-Oct-06 -4.52 4.07 -8.29 1.23 -10.18 1.51
30-Nov-06 12.50 5.67 8.73 2.82 24.60 7.94
29-Dec-06 -1.22 0.66 -4.99 -2.19 10.91 4.78
31-Jan-07 2.89 2.21 -0.89 -0.64 0.57 0.41
28-Feb-07 -9.95 -8.18 -13.73 -11.03 151.41 121.63
30-Mar-07 0.83 1.04 -2.94 -1.81 5.33 3.28
30-Apr-07 9.64 6.12 5.87 3.27 19.21 10.72
31-May07 12.98 4.84 9.20 2.00 18.38 3.99

29-Jun-07 8.03 0.73 4.25 -2.12 -9.00 4.49
31-Jul-07 -0.82 6.15 -4.59 3.30 -15.15 10.88
31-Aug-07 -1.96 -1.49 -5.74 -4.34 24.92 18.85
28-Sep-07 27.83 12.88 24.06 10.03 241.28 100.58
31-Oct-07 9.64 14.73 5.86 11.88 69.66 141.19
30-Nov-07 0.36 -2.39 -3.42 -5.24 17.92 27.46
31-Dec-07 3.46 4.77 -0.31 1.92 -0.60 3.70
31-Jan-08 -1.34 -13.00 -5.12 -15.85 81.14 251.29
29-Feb-08 -1.51 -0.40 -5.28 -3.24 17.13 10.52
31-Mar-08 -14.90 -11.00 -18.67 -13.85 258.65 191.85
TOTAL 135.93 102.50 1626.72 1577.79

R1 = 135.93/36
=3.78
SD = √ ∑ (R- R1)2 /n
= √2894.89/36
SD = 8.97
Calculation of Beta
B = [∑(Ra Ra1)(Rm-Rm1)]/ ∑(Rm-Rm1)2

= 1626.72/1577.79
B = 1.03
Alpha = (Ra1-Rm1)*B
= (3.78-2.85)*1.03
=0.96

Risk and return of HDFC
Factor Percentage
Risk 8.97
Return 3.78
Beta 1.03
Alpha 0.96
Chart 4.10:Chart showing risk & return of HDFC
Risk & Return of HDFC
10
8
Percentage
6
Percentage
4
0
Factor
ANALYSIS:
¾ HDFC has a risk factor of 8.97%

INTERPRETATION:
Beta of HDFC is 1.03 which is higher to one; it shows the high volatility of scrip

4. TATA POWER CO. LTD
Tata Power is India’s largest private sector power utility. Its

objective is to be the most admired Integrated Power and Energy Company
delivering sustainable value to all stakeholders. Monthly risk & return from 01st
April 2005 to 31st March 2008 is calculated below.
Scrip Return in
1-Apr-05 362.15
29-Apr-05 345.85 -4.50 -8.52 72.53
31-May-05 385.80 11.55 7.54 56.79
30-Jun-05 376.65 -2.37 -6.39 40.79
29-Jul-05 393.20 4.39 0.38 0.14
31-Aug-05 450.75 14.64 10.62 112.80
30-Sep-05 480.90 6.69 2.67 7.15
31-Oct-05 395.40 -17.78 -21.79 475.00
30-Nov-05 446.40 12.90 8.88 78.91
30-Dec-05 436.20 -2.28 -6.30 39.69
31-Jan-06 471.80 8.16 4.15 17.19
28-Feb-06 511.20 8.35 4.34 18.80
31-Mar-06 582.40 13.93 9.91 98.26
29-Apr-06 552.75 -5.09 -9.11 82.93
31-May-06 500.10 -9.53 -13.54 183.35
30-Jun-06 482.50 -3.52 -7.53 56.77
31-Jul-06 489.25 1.40 -2.62 6.85
31-Aug-06 527.80 7.88 3.86 14.93
29-Sep-06 567.85 7.59 3.57 12.76
31-Oct-06 540.55 -4.81 -8.82 77.85
30-Nov-06 581.30 7.54 3.52 12.41
29-Dec-06 560.50 -3.58 -7.59 57.66
31-Jan-07 605.45 8.02 4.00 16.03
28-Feb-07 542.75 -10.36 -14.37 206.54
30-Mar-07 509.30 -6.16 -10.18 103.60
30-Apr-07 591.85 16.21 12.19 148.67
31-May-07 585.75 -1.03 -5.05 25.46
29-Jun-07 670.65 14.49 10.48 109.81

31-Jul-07 734.85 9.57 5.56 30.88
31-Aug-07 684.75 -6.82 -10.83 117.36
28-Sep-07 854.30 24.76 20.75 430.37
31-Oct-07 1213.70 42.07 38.05 1448.12
30-Nov-07 1168.60 -3.72 -7.73 59.77
31-Dec-07 1470.05 25.80 21.78 474.39
31-Jan-08 1277.95 -13.07 -17.08 291.83
29-Feb-08 1399.90 9.54 5.53 30.55
31-Mar-08 1171.50 -16.32 -20.33 413.34
Total 144.55 5430.29

1-Apr-05
29-Apr-05 -4.50 7.32 -8.52 4.47 -38.10 20.02
31-May05 11.55 1.67 7.54 -1.18 -8.90 1.39
30-Jun-05 -2.37 7.13 -6.39 4.28 -27.35 18.34
29-Jul-05 4.39 6.14 0.38 3.29 1.25 10.83
31-Aug05 14.64 2.23 10.62 -0.62 -6.59 0.39
30-Sep-05 6.69 10.62 2.67 7.77 20.78 60.44
31-Oct-05 -17.78 -8.60 -21.79 -11.44 249.39 130.93
30-Nov05 12.90 11.36 8.88 8.51 75.61 72.45
30-Dec-05 -2.28 6.93 -6.30 4.08 -25.73 16.67
31-Jan-06 8.16 5.55 4.15 2.71 11.22 7.33
28-Feb-06 8.35 4.54 4.34 1.69 7.34 2.86
31-Mar-06 13.93 8.77 9.91 5.93 58.73 35.11
29-Apr-06 -5.09 5.07 -9.11 2.22 -20.25 4.94
31-May06 -9.53 -12.26 -13.54 -15.11 204.59 228.30
30-Jun-06 -3.52 2.03 -7.53 -0.82 6.19 0.68
31-Jul-06 1.40 1.27 -2.62 -1.58 4.13 2.49
31-Aug06 7.88 8.89 3.86 6.04 23.35 36.52
29-Sep-06 7.59 6.46 3.57 3.61 12.90 13.03
31-Oct-06 -4.81 4.07 -8.82 1.23 -10.83 1.51
30-Nov06 7.54 5.67 3.52 2.82 9.93 7.94
29-Dec-06 -3.58 0.66 -7.59 -2.19 16.60 4.78
31-Jan-07 8.02 2.21 4.00 -0.64 -2.57 0.41
28-Feb-07 -10.36 -8.18 -14.37 -11.03 158.50 121.63
30-Mar-07 -6.16 1.04 -10.18 -1.81 18.44 3.28
30-Apr-07 16.21 6.12 12.19 3.27 39.93 10.72

31-May07 -1.03 4.84 -5.05 2.00 -10.08 3.99
29-Jun-07 14.49 0.73 10.48 -2.12 -22.20 4.49
31-Jul-07 9.57 6.15 5.56 3.30 18.33 10.88
31-Aug07 -6.82 -1.49 -10.83 -4.34 47.03 18.85
28-Sep-07 24.76 12.88 20.75 10.03 208.06 100.58
31-Oct-07 42.07 14.73 38.05 11.88 452.17 141.19
30-Nov07 -3.72 -2.39 -7.73 -5.24 -1664.18 27.46
31-Dec-07 25.80 4.77 21.78 1.92 41.90 3.70
31-Jan-08 -13.07 -13.00 -17.08 -15.85 270.80 251.29
29-Feb-08 9.54 -0.40 5.53 -3.24 -17.93 10.52
31-Mar-08 -16.32 -11.00 -20.33 -13.85 281.60 191.85
TOTAL 144.55 102.50 384.06 1577.79

R1 = 144.55/36
=4.02
SD = √ ∑ (R- R1)2 /n
= √5430.29/36
SD = 12.28
Calculation of Beta
B = [∑(Ra Ra1)(Rm-Rm1)]/ ∑(Rm-Rm1)2

= 384.06/1577.79
B = 0.24
Alpha = (Ra1-Rm1)*B
= (4.02-2.85)*0.24
=0.28

Risk and return of Tata Power
Factor Percentage
Risk 12.28
Return 4.02
Beta 0.24
Alpha 0.28
Chart 4.11:Chart showing risk & return of Tata Power
Risk & Return of Tata Power
14
12
10
Percentage
8
Percentage
6
4
2
0
Factor
ANALYSIS:
¾ Tata Power has a risk factor of 12.28%

INTERPRETATION:
Beta of the Tata Power is 0.24 which is lower than one; it shows the low volatility
of scrip with respect to market. Risk of the share is 12.28% and the rate of return
is only 4.02%.

5. LARSEN & TOUBRO LIMITED
L&T is India's largest engineering and construction conglomerate

with additional interests in electrical, electronics and IT. Monthly risk & return
from 01st April 2005 to 31st March 2008 is calculated below.
Scrip Return in
1-Apr-05 1021.10
29-Apr-05 966.60 -5.34 -11.03 121.55
31-May-05 1048.00 8.42 2.73 7.47
30-Jun-05 1132.25 8.04 2.35 5.53
29-Jul-05 1268.00 11.99 6.30 39.71
31-Aug-05 1334.10 5.21 -0.47 0.23
30-Sep-05 1518.95 13.86 8.17 66.72
31-Oct-05 1398.75 -7.91 -13.60 184.99
30-Nov-05 1685.15 20.48 14.79 218.67
30-Dec-05 1845.15 9.49 3.81 14.49
31-Jan-06 2172.10 17.72 12.03 144.76
28-Feb-06 2396.95 10.35 4.66 21.75
31-Mar-06 2432.70 1.49 -4.20 17.61
29-Apr-06 2714.80 11.60 5.91 34.91
31-May-06 2318.35 -14.60 -20.29 411.73
30-Jun-06 2242.00 -3.29 -8.98 80.66
31-Jul-06 2209.55 -1.45 -7.14 50.91
31-Aug-06 2403.75 8.79 3.10 9.62
29-Sep-06 1272.45 5.87 0.18 0.03
31-Oct-06 1312.20 3.12 -2.56 6.57
30-Nov-06 1364.55 3.99 -1.70 2.88
29-Dec-06 1445.90 5.96 0.27 0.08
31-Jan-07 1589.00 9.90 4.21 17.72
28-Feb-07 1489.85 -6.24 -11.93 142.27
30-Mar-07 1620.10 8.74 3.05 9.33
30-Apr-07 1698.40 4.83 -0.85 0.73
31-May-07 2009.90 18.34 12.65 160.10
29-Jun-07 2198.00 9.36 3.67 13.48
31-Jul-07 2607.80 18.64 12.96 167.87
31-Aug-07 2582.80 -0.96 -6.65 44.18
28-Sep-07 2807.95 8.72 3.03 9.18

31-Oct-07 4243.25 51.12 45.43 2063.68
30-Nov-07 4128.75 -2.70 -8.39 70.33
31-Dec-07 4167.40 0.94 -4.75 22.58
31-Jan-08 3646.85 -12.49 -18.18 330.47
29-Feb-08 3521.25 -3.44 -9.13 83.39
31-Mar-08 3035.95 -13.78 -19.47 379.07
Total 204.76 4955.24

1-Apr-05
29-Apr-05 -5.34 7.32 -11.03 4.47 -49.33 20.02
31-May05 8.42 1.67 2.73 -1.18 -3.23 1.39
30-Jun-05 8.04 7.13 2.35 4.28 10.07 18.34
29-Jul-05 11.99 6.14 6.30 3.29 20.74 10.83
31-Aug05 5.21 2.23 -0.47 -0.62 0.29 0.39
30-Sep-05 13.86 10.62 8.17 7.77 63.50 60.44
31-Oct-05 -7.91 -8.60 -13.60 -11.44 155.63 130.93
30-Nov05 20.48 11.36 14.79 8.51 125.87 72.45
30-Dec-05 9.49 6.93 3.81 4.08 15.54 16.67
31-Jan-06 17.72 5.55 12.03 2.71 32.57 7.33
28-Feb-06 10.35 4.54 4.66 1.69 7.89 2.86
31-Mar-06 1.49 8.77 -4.20 5.93 -24.86 35.11
29-Apr-06 11.60 5.07 5.91 2.22 13.14 4.94
31-May06 -14.60 -12.26 -20.29 -15.11 306.59 228.30
30-Jun-06 -3.29 2.03 -8.98 -0.82 7.38 0.68
31-Jul-06 -1.45 1.27 -7.14 -1.58 11.26 2.49
31-Aug06 8.79 8.89 3.10 6.04 18.74 36.52
29Sep06* 5.87 6.46 0.18 3.61 0.67 13.03
31-Oct-06 3.12 4.07 -2.56 1.23 -3.15 1.51
30-Nov06 3.99 5.67 -1.70 2.82 -4.79 7.94
29-Dec-06 5.96 0.66 0.27 -2.19 -0.60 4.78
31-Jan-07 9.90 2.21 4.21 -0.64 -2.70 0.41
28-Feb-07 -6.24 -8.18 -11.93 -11.03 131.55 121.63
30-Mar-07 8.74 1.04 3.05 -1.81 -5.53 3.28
30-Apr-07 4.83 6.12 -0.85 3.27 -2.80 10.72
31-May07 18.34 4.84 12.65 2.00 25.27 3.99
29-Jun-07 9.36 0.73 3.67 -2.12 -7.78 4.49
31-Jul-07 18.64 6.15 12.96 3.30 42.74 10.88
31-Aug07 -0.96 -1.49 -6.65 -4.34 28.86 18.85

28-Sep-07 8.72 12.88 3.03 10.03 30.38 100.58
31-Oct-07 51.12 14.73 45.43 11.88 539.78 141.19
30-Nov07 -2.70 -2.39 -8.39 -5.24 43.95 27.46
31-Dec-07 0.94 4.77 -4.75 1.92 -9.14 3.70
31-Jan-08 -12.49 -13.00 -18.18 -15.85 288.17 251.29
29-Feb-08 -3.44 -0.40 -9.13 -3.24 29.62 10.52
31-Mar-08 -13.78 -11.00 -19.47 -13.85 269.67 191.85
TOTAL 204.76 102.50 2105.98 1577.79
* indicates that on 28th September 2006 there was a scrip split in the ratio of
1:1

R1 = 204.76/36
=5.69
SD = √ ∑ (R- R1)2 /n
= √4955.24/36
SD = 11.73
Calculation of Beta
B = [∑(Ra Ra1)(Rm-Rm1)]/ ∑(Rm-Rm1)2

= 2105.98/1577.79
B = 1.33
Alpha = (Ra1-Rm1)*B
= (5.69-2.85)*1.33
=3.79

Risk and return of LT
Factor Percentage
Risk 11.73
Return 5.69
Beta 1.33
Alpha 3.79
Chart 4.12:Chart showing risk & return of L&T
Risk and Return of LT
12
10
Percentage
8
6 Percentage
4
2
0
Factor
ANALYSIS:
¾ L&T has a risk factor of 11.73%

INTERPRETATION:
Beta of L&T is 1.33 which is higher to one; it shows the high volatility of scrip

Average risk of selected Company shares
Company Risk
RELIANCE 9.87
HDFC 8.97
BHEL 11.27
TATA POWER 12.28
L&T 11.73
Total 54.12
Bench Mark 6.62
Average risk = 54.12/5

=10.82
Chart 4.13:Chart showing risk of selected shares
Risk Profile
14
12
10
8
Risk
Risk
6
4
2
0
Reliance HDFC BHEL Tata LT Bench
Power Mark
Companies & Bench Mark

ANALYSIS:
¾ Tata Power has the highest risk factor of 12.28% with 0.24 beta and 0.28
as alpha.
¾ HDFC has the lowest risk factor of 8.97% with 1.03 beta and 0.96 as
alpha.
¾ Bench Mark has the risk factor of 6.62%
¾ On an average Equity shares have the risk factor of 10.82%
INTERPETATION:
Risk is a major factor that influences all type of investors. In the above selected
Equity Shares average risk factor is 10.82% and the risk factor of bench mark is
6.62%, it is showing equities are more risky than their benchmark index.
Average return of selected Company shares
Company Return
RELIANCE 4.41
HDFC 3.78
BHEL 5.24
TATA POWER 4.02
L&T 5.69
Total 23.12
Bench Mark 2.85
Average return = 23.12/5

=4.62

Chart 4.14:Chart showing return of selected shares
Return Profile
5
Return in %
3 Return
0
Reliance HDFC BHEL Tata LT Bench
Power Mark
Companies & Bench Mark
ANALYSIS:
¾ L&T shares have got the highest return of 5.69%.

¾ HDFC shares have got the lower return of 3.78%.
¾ Bench Mark return is 2.85%.
¾ On an average equity shares have got 4.62% per month.
INTERPETATION:
Return is a major factor influencing all type of investors. In the above selected
equity shares average return is 4.62%, compared to bench mark return of 2.85%.
The selected equity share returns are good and it will attract more and more
investors.
M P Birla Institute of Management Page:100

Comparisons of Selected Equity Capital and Mutual Fund
Schemes in respect their Risk
Investment Avenues Risk

Mutual Funds 7.28
Equity Capital 10.82
Chart 4.15:Chart showing risk of Mutual funds & Equity shares
Risk Profile
15
10
Risk
5
0
Risk
Mutual Funds Equity capital
ANALYSIS:
¾ Mutual funds have the risk on an average of 7.28%.
¾ Equity shares have the risk on an average of 10.82%.
INTERPETATION:
Equity capital and Mutual fund schemes are subjected to market risk. Based on
the above analysis mutual funds have an average risk of 7.28% which is compared
to equity shares risk of 10.82% is lower. Those who would like to take risk can go
for equity investments.

Comparison of Selected Equity Capital and Mutual Fund
Schemes in respect their Return
Investment Avenues Return

Mutual Funds 13.50
Equity Capital 23.12
Chart 4.16:Chart showing return of Mutual funds & Equity shares
Return Profile
25
20
15
Return
10
Mutual Funds Equity capital
ANALYSIS:
¾ Mutual funds have average return of 13.50%.
¾ Equity shares have the return on an average of 23.12%.
INTERPETATION:
Equity capital and Mutual fund schemes are subjected to market risk. Based on
the above analysis mutual funds have an average return of 13.50% which is
compared to equity shares return of 23.12% is lower. Those who would like take
risk can go for equity investments for getting higher return.

FINDINGS AND RECOMMENDATION
Saving money is not enough. Each of us also need to invest one’s 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.
RESEARCH FINDINGS
1. Investments in both equity capital and mutual fund schemes are subjected
to market risk.
2. Investment in equity and mutual fund schemes are increasing because of
falling interest rates and awareness of equity capital and mutual fund
schemes in the minds of investors.
3. Tata power has a highest risk factor of 12.28 and HDFC has a lowest risk
factor of 8.97, where as benchmark risk is 6.62% which shows investing in
equity is more risky.
4. L&T has a highest return on a monthly average of 5.69% and HDFC has a
lowest return on a monthly average of 3.78%, where as benchmark return
is only 2.85% which shows higher the risk higher the return.
5. Franklyn India Prima Fund has higher risk factor of 7.70 with a return of
1.94% where as SBI CONTRA Fund has risk factor of 7.38 with a return
of 3.14% per month.
6. On the basis of above analysis mutual funds have a risk factor on an
average 7.28 and their returns 2.7% per month.
7. On the basis of above analysis Equity shares have a risk factor on an
average 10.82, and their returns are 4.62% per month
8. On the basis of above statements it has provided that higher the risk higher
the return and lower the risk lower the return.
9. Investment in mutual fund schemes gives diversified portfolio to investors.
10. Standard deviation is one of the best ways for finding risk of scrip’s &
mutual fund units.
11. In case of both equities and mutual funds(open ended) liquidity is very
high, with in three working days mutual funds will be converted into cash
and liquidity of equity is based on demand and supply conditions of the
market for a particular scrip.

SUGGESTIONS
• Indian capital market is attracting more and more Foreign Institutional

Investors (FII s) because of economic stability and increasing growth rate,
it leads to gradual increase in the stock market indices.
• This is the right time to invest in shares and mutual funds because of above
reason.
• Interest rates are falling gradually and equity markets are booming because
of this reason investors can move from bank deposits to mutual funds and
equities.
Five basic norms of smart investing:
• Investors must have a portfolio approach to wealth.

• One must analyze one's risk appetite.
• One must possess a long-term outlook
• Never forget to do homework and analysis.
• It is essential to have control over one's emotions.
Investment in both equity capital and mutual fund schemes are subjected to
market risk. Following are the suggestions given to investors for investing
rationally in equity capital and mutual fund schemes
• Aggressive Growth Funds

It’s good for investors who can assume the risk of potential loss in value of
their investment in the hope of achieving substantial and rapid gains. They are not
suitable for investors who must conserve their principal or who must maximize
current income.
• Growth Funds
Although Growth funds are more conservative than aggressive growth funds,
they are still relatively volatile. They are suitable for growth-oriented investors
but not for investors who are unable to assume risk or who are dependent on
maximizing current income from their investments.
• Growth and Income Funds

Growth and income funds have low to moderate stability of principal and
moderate potential for current income and growth. They are suitable for investors
who can assume some risk to achieve growth of capital but who also want to
maintain a moderate level of current income.
• Fixed-Income Funds
Fixed-income funds are suitable for investors who want to maximize current
income and who can assume a degree of capital risk in order to do so. Again,
carefully read the prospectus to learn if a fund's investment policy with respect to
yield and risk coincides with your own objectives.
• Balanced/Equity Income funds

Balanced and equity income funds are suitable for conservative investors who
want high current yield with some growth.
• Money Market Funds

Money market funds are suitable for conservative investors who want high
stability of principal and moderate current income with immediate liquidity.

CONCLUSION
Saving money is not enough. Each of us also need to invest ones 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 equity and
mutual fund schemes by providing knowledge about how to measure the risk and
return of particular scrip or mutual fund scheme. The study recommends new
investors to go for mutual funds rather than equities, because of high risk and
market instability.
From the calculation it is found that the average risk of equities based on sample
size is 10.82 & they are earning 4.62% returns per month where as mutual funds
average risk based on sample size is only 7.28 & they are earning 2.7 per month.

BIBLIOGRAPHY
BOOKS REFFERED
• “Financial institutions and Markets”, first edition, Tata McGraw Hill

publications company Ltd., 2004, L.M. Bhole.
Web sites:
• www.il&fs.com
• www.moneycontorl.com
• www.finance.indiamart.com
• www.wikipedia.org
• www.amfiindia.com / Historical NAVs of mutual fund schemes
• www.bseindia.com / Historical share prices of companies.

Sowmya T P

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A REPORT ON

Comparative study between 5 representative

Under the Guidance Of:

M.P.BIRLA INSTITUTE OF MANAGEMENT

M P Birla Institute of Management Page: 1

I hereby declare that this dissertation titled “Comparative study between 5

any other university or institution for the award of any degree/diploma/certificate or

M P Birla Institute of Management Page: 2

Place: Bangalore Prof.

M P Birla Institute of Management Page: 3

This is to certify that this report entitled “Comparative study between 5

Place: Bangalore Dr. N.S.

M P Birla Institute of Management Page: 4

I sincerely thank Dr. Nagesh Malavalli, for providing me an opportunity to

M P Birla Institute of Management Page: 5

2 RESEARCH DESIGN 19-28

 Statement Of The Problem

 Objectives Of The Study

 Scope Of The study

 Limitations of The Study

3 INDUSTRY PROFILE 30-37

4 ANALYSIS AND INTERPRETATION 39-94

5 SUMMARY OF FINDINGS, SUGGESTION 95-99

List of Tables and Charts

M P Birla Institute of Management Page: 6

2 Calculation of Risk and Return of NIFTY 41-42

3 Calculation of Risk and Return of BSE200 43-44

4 Calculation of Risk and Return of BSE100 45-46

5 Calculation of Risk , Return & Beta of KOTAK30 (MF) 47-49

6 Chart showing Risk and Return of KOTAK30 (MF) 50

7 Calculation of Risk , Return & Beta of HDFC TOP200 (MF) 51-53

8 Chart showing Risk and Return of HDFC TOP200 (MF) 54

9 Calculation of Risk , Return & Beta of SBI CONTRA(MF) 55-57

10 Chart showing Risk and Return of SBI CONTRA (MF) 58

Chart showing Risk and Return of FRANKLYN INDIA PRIMA 66

16 Table showing Average return of selected mutual fund schemes 68

17 Chart showing average return of selected mutual fund schemes 69

18 Calculation of Risk , Return & Beta of RIL 70-72

19 Chart showing Risk and Return of RIL 73

M P Birla Institute of Management Page: 7

21 Chart showing Risk and Return of BHEL 77

22 Calculation of Risk , Return & Beta of HDFC 78-80

23 Chart showing Risk and Return of HDFC 81

25 Chart showing Risk and Return of TATA POWER CO. LTD 85

26 Calculation of Risk , Return & Beta of L&T 86-88

27 Chart showing Risk and Return of L&T 89

28 Table & Chart Showing Average risk of selected Equity scrips 90

31 Chart showing risk of Mutual funds & Equity shares 93

32 Chart showing return of Mutual funds & Equity shares 94

M P Birla Institute of Management Page: 8

M P Birla Institute of Management Page: 9

Introduction to Equity Capital and Mutual Fund

M P Birla Institute of Management Page: 11

Equity capital or financing is money raised by a business in exchange for a share of

M P Birla Institute of Management Page: 12

M P Birla Institute of Management Page: 13

First Phase – 1964-87

Unit Trust of India (UTI) was established on 1963 by an Act of Parliament.

Second Phase – 1987-1993 (Entry of Public Sector Funds)

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

M P Birla Institute of Management Page: 14

Fourth Phase – Since February 2003

Statement Of The Problem

Objectives Of The Study

Scope Of The study

Limitations of The Study